Last Update : Sep 25, 2019

Human Capital

While continuing to protect the rights of all its employees and giving consideration to providing comfortable and rewarding workplace environments, SEKISUI CHEMICAL Group works to develop its human resources and is intending that the effective utilization of those human resources will lead to the enhancement of its corporate value.

Stance toward Human Resources

Based on the belief that “employees are precious assets bestowed on us by society,” SEKISUI CHEMICAL Group works to create environments in which employees are able to work with enthusiasm and provides a range of opportunities for each and every one of them to hone his or her unique skill and assist in their personal growth.

Recognizing that protecting the human rights of individuals is our social responsibility, we respect each person’s diversity, personality and individuality, while promoting various work styles compatible with each country and region and the creation of safe and secure working environments. Sharing the same basic stance with regard to human resources throughout the Group, we are promoting the creation of fulfilling workplaces in which diverse human resources can thrive.

Respect for Human Rights

To fulfill its responsibilities to all stakeholders, the Group conducts business activities that show consideration for human rights in conjunction with its business partners. Providing all Group employees with a copy of the Compliance Manual, we strictly demand respect for human rights, the prohibition of discrimination, prevention of harassment, and the protection of personal information. With regard to the prevention of harassment, we also conduct educational programs in association with e-learning sessions. We are working to facilitate and encourage the understanding of our employees.

Labor Relations

In SEKISUI CHEMICAL Group, the companies and labor unions collaborate while respecting each other’s position and way of thinking. Through close communications, we undertake constructive discussions on issues labor and management have in common under the shared objective of advancing our companies. In the Group in Japan, there were 15 independent labor unions with 5,349 employees in the All-SEKISUI CHEMICAL Labor Union Federation in fiscal 2018.

Diversity Management

Not only perceiving diversity by differences understood from outward appearance—such as gender, age, nationality, and career—SEKISUI CHEMICAL Group will also focus on differences that include values and personality while understanding, recognizing, and utilizing the differences between each and every employee as strengths.

SEKISUI CHEMICAL Group’s Diversity Management Policy

Diversity is essential to maintain our strong corporate presence for 100 years and beyond. We understand and recognize that every employee’s orientation to work and life, and their personal strengths are different and thus we use this to our advantage. Through employee dialogue, we will strengthen our organizational culture by providing employment, opportunities for development and an enhanced work environment to support growth.

Diversity Management Promotional Structure (CSR Committee, Human Resources Committee)

The CSR Committee deliberates on CSR measures generally. This includes matters relating to diversity management. Chaired by the president, the CSR Committee is comprised of such senior executives as the presidents of divisional companies as well as employee representatives including female employees and the head of the Labor Union. Matters that require resolution are also reported to the Board of Directors. In addition to deliberating on Group-wide diversity management issues, the Human Resources Committee puts in place and monitors measures aimed at securing and developing the personnel necessary for diversity management. Chaired by the managing executive officer and head of the Human Resources Department, the Human Resources Committee is comprised of executive officers and the heads of human resources departments selected from each divisional company.

Work Style Reforms

In order to accelerate the pace of diversity management, SEKISUI CHEMICAL Group has positioned 2018 as its inaugural year of promoting work style reforms. After first putting in place a “Statement of Work Style Reforms,” the Group has initiated the three business, HR system, and work environment reform activities, and it is steadily making improvements.

SEKISUI CHEMICAL Group is working to address the issue of long working hours by improving productivity and is aiming to create an invigorating and rewarding workplace.

Statement of Work Style Reforms

We determine work methods that promote growth over time to enable each and every individual employee to manifest their personal “characteristics,” and pursue highly productive work methods that maximize success. In order to improve productivity, the Company actively invests in management resources, and unifies managers and workers to coalesce their wisdom Companywide. We nurture work worth doing by improving the quality of the job, and promote workers’ diverse activities by returning the success of reforms to them.

Investment in Work Style Reforms

Substantial capital investment and the introduction of systems are essential to continuously realizing the effects of business and work environment reforms. With this in mind, SEKISUI CHEMICAL Group has decided to invest 10 billion yen over the two years of 2018 and 2019 in an effort to reduce working hours Group-wide.

In 2018, the first year of our efforts, we made investments of approximately 8 billion yen (including an amount intended for after 2020). With the goal of promoting reduction in working hours from which we will not backtrack, we have invested in a production management system and automated inspection equipment, as well as a video conferencing system and strategies aimed at improving the workplace environment.

Promotion of Health Management

SEKISUI CHEMICAL Group announced details of its Declaration of Health and established the Basic Policy for Health and Productivity Management in March 2019. This Declaration and Policy summarizes the Group’s philosophy and stance toward health management and provides the roadmap for further improving the physical and mental health of its employees, which is recognized as the foundation for diversity management.
Note: “Health and Productivity Management” is a registered trademark of the NPO Kenkokeiei.

Declaration of Health for SEKISUI CHEMICAL Group

SEKISUI CHEMICAL Group's Basic Policy for Health and Productivity Management SEKISUI CHEMICAL Group has been engaged in health management initiatives for our employees based on our belief that “employees are precious assets bestowed on us by society.” SEKISUI CHEMICAL endeavors to take these initiatives to the next level by treating the promotion of the health of our employees as a management strategy that is aimed at achieving the physical, mental, and social well-being of all employees.

Initiatives to Promotion Health Management

SEKISUI CHEMICAL Group is working to achieve the objectives of its existing medium- and long-term health management goals across the five physical, mental, social well-being, Group-wide initiative, and motivation and productivity segments.

Among a host of specific examples, SEKISUI CHEMICAL Group is looking to promote healthier and longer lives in line with seven key health habits, push forward mental health initiatives and create vibrant workplaces through the effective use of stress checks, and engage in health promotion activities based on an analysis of data collated through the application of ICT.

Working in unison, the Group has also established a structure through which steady measures can be implemented to advance health management. In addition to setting up the Health Promotion Office within the Company’s Human Resources Department, every effort is being made to put forward comprehensive health management promotions plans and to enhance collaboration between the officers responsible for and in charge of health management at approximately 300 business sites and the Health Promotion Office in a bid to ensure the well-being of all employees. Each year, health promotion workshops are held for officers responsible for and in charge of health management. The participation rate was 93% in 2018.

Recognized as a 2019 Certified Health and Productivity Management Organization

SEKISUI CHEMICAL was recognized for its Companywide efforts to resolve issues relating to the health of its employees and was certified as a 2019 Health and Productivity Management Organization by both the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi for the third year in a row in the large enterprise category (“White 500”). In addition, on this occasion the certification included twenty SEKISUI CHEMICAL Group companies that are actively engaged in health management.

Initiative Aimed at Ensuring Safety and Security

We, SEKISUI CHEMICAL Group, recognize that employee safety is essential to achieving sustainable growth. We aim to be a "Safe and Secure" enterprise that establishes safe and secure working environments and has the full trust of its customers and the community as well as its employees.

At the core of safety, it is important that each and every employee has the ability to identify dangerous situations and take appropriate steps to protect themselves and fellow employees. Even if equipment can be made completely safe, it is necessary to recognize that work and actions taken by individuals can have hidden risks. For this reason, we are making concerted efforts at safety education and raising sensitivity to risks, while following rules and creating a protective corporate culture.

At the same time, constructing a work environment in which employees can work with safety and security is our responsibility as a company and we consider it to be one of the most important priorities for management. SEKISUI CHEMICAL Group is implementing total safety activities (i.e. zero occupational injuries, zero equipment-related accidents, zero commuting-related accidents, and zero extended sick leave) based on five themes.

Allowing Diverse Human Resources to Excel

SEKISUI CHEMICAL Group provides opportunities for personnel training according to individual career orientation. As an overall company activity, we strive to ensure that the Group can move forward on the two pillars of business leaders, who will someday shoulder management, and efficient staff that can maintain our manufacturing processes. In addition, we support employees in their efforts to take the initiative to challenge themselves while providing the systems and opportunities necessary to promote individual growth.

Developing Employees to Fill Senior Management Position Going Forward

With an eye toward management positions throughout the Group, SEKISUI CHEMICAL has established the Saijuku School. This internal training and development tool is designed to help enhance the scope and depth of future business leaders going forward.

Employees participating in the Saijuku School review a wide range of case studies while attending lectures. In addition to the skills required to put forward management strategies, the Saijuku School provides details of important business theories and philosophies. This in turn provides participants with the broad perspective necessary to engage in global business development and to further hone the abilities to think and act. Working to instill a broad mindset that encompasses the Group as a whole, employees are encouraged to take the initiative in their own development and to establish action plans geared toward reform.

Training Human Resources to Support the Workplace

The human resources who will support the foundations of management in practical terms in the workplace must undergo self-growth as highly capable practitioners accumulating experience over the long term and acquiring highly specialized knowledge and skills. Based on this concept, SEKISUI CHEMICAL Group hires human resources who will support the workplace as permanent, full-time employees, creates an environment in which they can demonstrate their abilities with peace of mind over the long term, and deploys the Meister System to strengthen their abilities in the workplace.

Group Internal Job Posting

SEKISUI CHEMICAL Group supports its employees’ willingness to take on challenges. At the same time, assistance is given to realize career plans by providing opportunities to thrive within the Group through the internal posting of job openings.

Under the Group’s internal job posting system, all employees are eligible to apply for a position in line with the requirements posted on the Group’s intranet. The approval of managers is not required.

Retaining and Utilizing Young Employees

SEKISUI CHEMICAL has established a training manager (brother/sister) program aimed at enabling new employees to smoothly adapt to their assigned workplaces and quickly hit the ground running.

The role of training managers goes beyond job-related instruction to play a role in providing guidance on how adult members of society should conduct themselves while following up on new employees’ state of mind. The program also encourages training managers to leverage their experience guiding junior employees to gain a new perspective and thereby grow themselves.

Promote the Active Participation of Seniors

In fiscal 1993, SEKISUI CHEMICAL introduced a reemployment system for employees who had reached mandatory retirement age. Since fiscal 2006 this program has been expanded to Group companies as well. In October 2015, SEKISUI CHEMICAL revised its Senior Expert System, a system for reemploying elderly retirees in order to foster greater employee motivation. We have finished putting in place systems for employees to continue working through to the age of 65 at all Group companies, ensuring that 100% of the employees that elect to do so can remain employed or be reemployed.

Promote Female Empowerment

As a group that is engaged in a wide range of activities, SEKISUI CHEMICAL is critically aware of the need to make the most of the diverse orientations and strengths of its employees if it is to continue contributing to society. Based on this awareness, top management has declared its commitment to promoting diversity management, which includes the empowerment of women, both within and outside the Group.

SEKISUI CHEMICAL Group has initiated efforts toward the empowerment of women as a first step toward promoting diversity management. The CSR Medium-term Plan launched in fiscal 2017 set the goal of becoming “an organization where women can truly thrive” as well as specific targets for the hiring of women and the number of women in management positions. These targets form an integral part of the objectives that directors and executive officers are expected to help achieve.

SEKISUI CHEMICAL Group has broadly classified its endeavors into two phases in order to empower women. The first is to increase retention rates and create a workplace environment in which women can thrive. The second is to foster women’s candidacy for management positions. In a bid to increase retention rates and create a workplace environment in which women can thrive, every effort is being made to put in place a receptive environment in which women can demonstrate their attributes and participate actively at an early stage and to introduce a structure and systems that will allow flexible workstyles. Working to foster women’s candidacy for management positions, SEKISUI CHEMICAL Group is conducting programs including training for women who hope to be appointed to management positions and their direct supervisors.

Efforts to Employ People with Disabilities

We believe it important not only to hire people with disabilities, but to create an environment where those with disabilities can easily work. Maintaining an environment in which people with disabilities can work easily at the same time leads to an environment in which all employees find it easy to work. To help maintain that environment, we have been conducting joint brainstorming sessions for people with disabilities that involve the personnel departments of the entire Group since fiscal 2016.

Developing Personnel Who Can Succeed on the World Stage

Amid accelerating global business development, SEKISUI CHEMICAL Group recognizes the need to make active use of the diverse human resources who support each business and to revitalize the organization in order for each company within the Group to maintain autonomous growth. Based on this understanding, the Group is promoting the development of personnel in line with the conditions in each area.

To adapt to the different business characteristics, history, management styles, lifestyle habits, as well as the various laws and regulations of each country and region, SEKISUI CHEMICAL Group is focusing on training human resources capable of demonstrating their abilities in their respective countries and regions.

Hiring Foreign Nationals

SEKISUI CHEMICAL Group is actively hiring foreign nationals for the purpose of further globalizing the Group’s businesses. In addition to hiring students who have been studying in Japan, the Company launched overseas recruitment activities in fiscal 2015. In fiscal 2018, the Company carried out the hiring of engineers in India and of personnel for office-based positions in the UK and the Netherlands. We will allow our diverse human resources to excel and accelerate globalization by expanding the area in which we recruit new employees, acquiring the best candidates from around the world, and having them work with a global perspective.

Global Talent Employee System

The Group has established a Global Talent Employee System dedicated to nurturing of global human resources that can succeed on the global stage, and about 1,700 employees of the Group working in Japan have registered with it. The participants are provided with cultural training programs and professional education necessary for working overseas, and we are currently promoting measures to create opportunities for them to actually go to other countries and gain work experience there.

Global Trainee Program

The Group offers a Global Trainee Program that enables employees to gain work experience overseas. Employees working in sales, accounting, product development, and some other areas with a certain achievement level are eligible to participate in the program allowing them to apply for posts at the overseas companies affiliated with the Group. In fiscal 2018, we organized our Overseas Engineers Dispatch Program aiming at training engineers with globally competitive high-level expertise as well as Short-term Overseas Dispatch Training Program that teaches the participants to cultivate their own abilities and behavioral patterns that are required to succeed in global business. The Group shall continue expanding the programs allowing more and more employees working in various countries to gain experience in business overseas.

Intellectual Capital (Research & Development/Manufacturing/Intellectual Property)

SEKISUI CHEMICAL Group recognizes that maintaining a prominence in technology is the bedrock for creating value. This is particularly the case in the residential and social infrastructure creation as well as chemical solutions fields, where the Group’s technology platform provides the underlying strength of its competitive advantage. In order to further advance this prominence in technology, the Group is committed to consistently strengthening its human resources and organizational structure in the research & development, manufacturing and intellectual property (IP) fields.

Research & Development(R&D)/Manufacturing

SEKISUI CHEMICAL’s Approach to R&D and Its R&D System

With the putting of efforts into practice for its Group Vision forming the framework of its medium-term management strategy, SEKISUI CHEMICAL Group is aiming to maintain its strong corporate presence for 100 years and beyond. The Medium-term Management Plan “SHIFT 2019 -Fusion-” is positioned as one step forward toward a “new phase of growth” for the realization of the aim, and establishes the acceleration of new business creation through “technology fusion” as one of the top priorities. Actively promoting the fusion of in-house technologies with those from outside, the Company is working to increase the pace of commercialization in the new markets and fields that will play a part in the Group’s future while creating attractive themes that look beyond at what will follow.

Forming the basis of these efforts are the 25 technological platforms with direct links to the Group’s two business domains, “Residential and Social nfrastructure Creation” and “Chemical Solutions.” These are the fundamental technological platforms that support the Group’s product lineup and should even be said to be the source of its competitiveness that has been cultivated over many years. An example of this would be our processing, which imparts smart value to components and our molding that enhances the functionality of materials. In this area, we listen to the needs of our customers as a way to best determine the path to adding value. Moreover, by effectively combining multiple platforms, we will continue to develop new products and services that are capable of maintaining a clear lead in the market even in a harsh competitive environment.

Serving as the R&D system in the Group responsible for these platforms are the four primary R&D centers within the Housing Company, the UIEP Company, the HPP Company, and the Corporate headquarters. In addition, Sekisui Medical Co., Ltd. and other key affiliated companies maintain independent R&D divisions and facilities. Directly linked to the enhancement of existing businesses and the pioneering of new frontiers, the R&D conducted at the divisional companies focuses on product development and manufacturing technology themes that will lead to profit in the near future.

In fiscal 2018, SEKISUI CHEMICAL Group introduced several new products to the market. Working to bolster initiatives aimed at addressing rebuilding demand, the Group launched New Parfait to further fortify its product lineup. Steps were also taken to inject other products into the market including a non-flammable urethane thermal insulating foam material for onsite use, the first of its kind to acquire approval from Japan’s Ministry of Land, Infrastructure, Transport and Tourism as an organic non-flammable material. Looking ahead, SEKISUI CHEMICAL Group will continue to actively introduce new products in fiscal 2019 as a part of efforts to secure a new phase of growth.

In contrast, as an independent research unit the center within Corporate headquarters is conducting research into themes that present extremely high technical hurdles to be addressed over medium- and long-term timeframes, large-scale themes spanning the entire Company, and new business domain themes which we have never challenged before as a group.

For example, SEKISUI CHEMICAL Group participated in EcoPro 2018 -International Exhibition on Environment and Energy- in December 2018. Here, the Group’s film-type perovskite photovoltaic battery drew wide-ranging attention and expectation as a next-generation solar cell. In addition, the Group is moving steadily toward the world’s first practical application of a bio-refinery technology that converts waste into ethanol. Through these and other initiatives, SEKISUI CHEMICAL Group is actively promoting the development of other themes with a view to creating new businesses.

Moreover, divisional companies and Corporate headquarters are bringing to the table their respective capital while engaging in co-development activities to promote a variety of fusion themes. SEKISUI CHEMICAL Group has also established the New Innovation Committee (NIC) as a forum to support these endeavors. The NIC is comprised of officers who oversee the Group’s R&D, manufacturing, business strategy and human resources functions, and is charged with the responsibility of calling for and evaluating themes with the potential for fusion. Those themes considered worth pursuing are then supported either through corporate expenses or through the dispatching of personnel. Several themes have already been approved and are in the process to realization.

As one example, SEKISUI CHEMICAL Group is taking preparatory steps to develop a Town Energy Management System (TEMS) under which the Company will purchase excess electricity generated solar power generation cells from customers living in SEKISUI HEIM houses. In addition to supplying this excess electricity to customers living in SEKISUI HEIM houses that are not equipped with power-generating facilities, the purchased power will also be made available use at domestic plants and business sites of the Group. Plans are in place for this service to begin from fiscal 2019.

Strengthening Manufacturing Capabilities

The Group is working to promote R&D that helps to create new products. At the same time, the Group is placing equal emphasis on strengthening its manufacturing capabilities in a bid to reinforce the competitive advantage of its existing products.

In the Medium-term Management Plan “SHIFT 2019 -Fusion-,” we stated “minimizing manufacturing risk and fortifying our ability to respond to the new era of manufacturing”* as a policy relating to manufacturing capabilities. Regarding the building of a culture to reduce manufacturing risk as one of its priority measures, the Company will promote the strengthening of CS quality infrastructure by, for example, promoting the intrinsic safety of equipment and the thorough promotion of safety-aware human resource development as well as the building of a CS quality information knowledge system. As part of our efforts to bolster our manufacturing capabilities, we will use quantitative assessments of our production technology capabilities to strengthen our technical capabilities in automation and information technologies, while accelerating the introduction of new technologies relevant to ICT/IoT technologies. At the same time, we will further enhance our manufacturing core strengths through the nurturing of manufacturing human resources, as we have been doing up to now.

Such organizational approach will enable the Group to engage its prominent technologies and quality in the continuous development of new frontiers in the domains of “Residential and Social Infrastructure Creation” and “Chemical Solutions” for the betterment of the environment and the people’s lives in the world.

* The Third Industrial Revolution: IT/Information Society; The Fourth Industrial Revolution: AI

Human Resources and Benefits for R&D and Manufacturing

The Group presents Great Invention Awards to acknowledge researchers and engineers that have created highly unique and innovative inventions with the potential to become profitable technologies and products. These awards and the accompanying monetary endowment are one way the Group demonstrates its recognition of and appreciation for its talented researchers and engineers.

So far in the current fiscal year, certification has been awarded to advancements in conductive fine particles and anisotropic conductive materials.

The Group has also established a specialist position system for researchers and engineers with highly specialized skills. The system selects exceptional individuals who have been recognized as possessing highly advanced skills and appoints them to uniquely defined specialist positions. The system promotes ongoing development and aims to cultivate outstanding researchers and engineers recognized both inside and outside the Company. As of April 2019, 21 people held specialist positions.

The Group introduced the Meister position to recognize individuals that exemplify the range of manufacturing skills and technical objectives of the Group. The position is intended to promote the Group tradition of superior skill and craftsmanship and increase the motivation of each and every technician. As of April 2019, 3 people held Meister positions. Cultivating and encouraging the Group’s talented manufacturing technicians by acknowledging their highly refined skills inspires motivation and will further elevate the Group’s high level of manufacturing expertise in the years to come.

Intellectual Property

Fundamental Policy on Intellectual Property

Intellectual property is an important management resource that underpins growth and revenue aimed at optimizing corporate value. Accordingly, SEKISUI CHEMICAL Group places considerable emphasis on strategic IP activities in order to maximize its technological prominence and contribute to business growth. Among a host of activities, the Group identifies business strategies based on an analysis of the competitive environment. To this end, SEKISUI CHEMICAL Group assesses the IP landscape, which includes a review of IP, market and peer data. The Group also engages in IP portfolio management.

Intellectual Property Management System and Major Activities

SEKISUI CHEMICAL Group has set up independent intellectual property divisions at its Corporate headquarters and at each divisional company. This takes into account the Group’s divisional company structure and enables the Group to promptly engage in activities that are attuned to the business environment of each divisional company.

The intellectual property divisions, the business divisions, and the R&D divisions at each divisional company are tasked with constantly maintaining cooperation and periodically holding Intellectual Property Strategy Committee meetings for divisional company presidents. Through these means, the Group is able to engage in activities that facilitate the building of an IP network almost to the complete exclusion of competitors.

The Intellectual Property Division at the Group’s Corporate Headquarters is responsible for the planning and drafting of basic IP strategies that are common to the entire Group, IP education and training as well as management of the patent management system. Taking into consideration its corporate R&D mission of creating new businesses, SEKISUI CHEMICAL Group draws on an analysis of the IP landscape at an early stage to engage in strategic IP activities that allow it to overwhelmingly succeed while continuously dominating the market.

SEKISUI CHEMICAL Group has adopted a new two-tiered IP education and training system from fiscal 2018. In addition to a basic IP education and training component that covers areas common to both Corporate headquarters and each divisional company, this new two-tiered IP education and training system contains a second component aligned to the particular features of each divisional company that is designed to enhance practical skills. Moreover, steps were taken to update the patent management system in May 2018 in order to maximize the contribution to strategic IP activities.

In this way, the intellectual property divisions at Corporate headquarters and at each divisional company are endeavoring to build a close-knit Group-wide IP structure while engaging in strategic IP activities that are attuned to the business environment.

Social Capital

SEKISUI CHEMICAL Group recognizes the importance of providing products and services that consistently satisfy and appeal to customers. Only in this way can the Group truly strengthen its ties with society and stakeholders. Accordingly, every effort is made to enhance the quality of our human resources, products, and systems while targeting the quality that will always be specified by customers. At the same time, we adhere strictly to a policy of CSR procurement and promote green procurement when seeking to purchase raw materials. We also refrain from the use of conflict minerals associated with inhumane acts.

Cognizant that the Company is a member of society, we support the social contribution activities of employees in each of three fields: the environment, the next generation, and local communities.

CS & Quality Management—Pursuing a level of quality that is always specified by customers

Since 1999, SEKISUI CHEMICAL Group has practiced customer satisfaction (CS) management. In 2004, we coined the phrase CS & Quality in the belief that customer satisfaction and quality are inseparable. We began CS & Quality Management to consistently deliver value to our customers so that they will always choose our products and services. As we consider customer’s feedback as the beginning of our manufacturing activities, we are actively honing the Quality of Our People, the Quality of Our Systems, and the Quality of Products and Services. In this manner, the Group is working in unison to consistently deliver the quality that is always specified by customers.

On-site Manufacturing Supports Quality

Recognizing that it is the fields of manufacturing development that support quality, since fiscal 2006 SEKISUI CHEMICAL Group has focused its efforts on innovation in production. Based on its belief that quality defects lead to higher costs arising from handling complaints or increased waste, we are trying to reduce costs by targeting the “three zeros” of accidents, waste, and complaints.

Preventing Quality Fraud

In light of the frequent occurrence of quality control related fraud from 2017 to 2018 in Japan, SEKISUI CHEMICAL implemented an in-house investigation to confirm that our quality data is not fraudulent and that inspection has not been conducted by uncertified personnel for all products throughout the Group in order to ensure that we do not put the lessons learned by others to waste. As a result, we have confirmed that there are no cases of deficiencies regarding certification of auditors, official certification and quality that hold the risk of violation or fraud.

SEKISUI CHEMICAL Group will continue to ensure that the specifications agreed upon with our customers are observed and that we re-instill an awareness of compliance for the purpose of enhancing our quality assurance capability. At the same time, by ensuring the reliability and transparency of inspections, we will continue to implement in-house quality control investigations that extinguish any potential for fraud.

Systems for Employees to Share Customer Feedback

SEKISUI CHEMICAL Group’s Customer Consultation Office receives over 10,000 inquiries and comments every year. The Group directly answers each inquiry and analyzes the factors that motivated the customer to make the inquiry in the first place, in order to discover the hidden needs of customers. Having published VOICE, a summary of the inquiries received by Customer Consultation Office, the Group is working to reflect customer feedback in management activities, cultivate and instill a culture of CS & Quality in all employees, and promote understanding of these issues in Group-wide businesses in a manner that transcends particular operational areas.

CS & Quality Medium-term Plan Progress

The Group has identified two themes for CS & Quality Management. One of these is the number of major quality issues*1 and the other is the external failure costs*2. In fiscal 2018, there was one incidence of a major quality issue. This was the first incidence of a major new product*3 quality issue within the period of the current medium-term plan. External failure costs decreased compared with fiscal 2017. To achieve zero major quality issues in the future, we aim to improve Basic Qualities by ensuring thorough adherence to the practice of Development Guidelines and Everyday Management Guidelines throughout the entire Group.

We aim to continue to decrease external failure costs by rolling out across the entire Group a more robust quality assurance system, management of changes and alterations to this system, and quality risk-reduction activities based on the prevention of defects.

  • *1 Major quality issues: Problems related to product and service quality that could cause significant damage to customers, society, or SEKISUI CHEMICAL Group if not thoroughly resolved on an urgent basis.
  • *2 External failure costs: Costs arising from responding to product-related complaints.
  • *3 New product: A challenging product selected by divisional companies through the development of new fields and technologies.

Materials Procurement

SEKISUI CHEMICAL Group regards openness, fairness and equity, legal compliance mutual trust, and consideration for the environment as the basis of its CSR procurement. We will strengthen the harmonious and mutually beneficial partnerships with our business partners through fair transactions. We actively request that all our suppliers ensure superior quality, take into consideration the environment, comply with the relevant laws and social norms in each of the countries and regions in which they operate, and conduct health and safety activities in their own companies.

Caring About Human Rights Issues Across the Entire Supply Chain

Through CSR procurement with our suppliers, we make sure our business partners respect human rights. With regard to suppliers that do not meet the prescribed standards, a request is made to ensure that the necessary steps are taken to resolve any issues. SEKISUI CHEMICAL Group works together with suppliers in the implementation of appropriate measures. We are making progress with the development of mechanisms, designed specifically for our overseas business partners and suppliers, to encourage improvements via our regional headquarters. Following upon the survey implemented in fiscal 2017, in fiscal 2018 we assessed the status of human rights related initiatives among the major suppliers for Group Companies in the Asian and Oceania regions by implementing the CSR procurement survey. As a result, we confirmed that no major human rights infringements, including child labor and forced labor, occurred at our major suppliers.

Addressing the Issue of Conflict Minerals

SEKISUI CHEMICAL Group is concerned about the conflict mineral problem, namely the mineral resources controlled by armed forces in the Democratic Republic of Congo and neighboring countries that commit human rights violations and destroy the environment. We conduct surveys on the use of conflict minerals at companies throughout our supply chain from a CSR perspective. We put our “Conflict Minerals Survey Guidelines” into effect in April 2017. These guidelines were newly formulated for each Group division* responsible for receiving survey requests for conflict minerals from suppliers and for conducting the surveys. In fiscal 2018, we conducted 569 conflict mineral surveys (as of June 18, 2019) at SEKISUI CHEMICAL’s Urban Infrastructure & Environmental Products Company, High Performance Plastics Company, and the Group companies of each. We were unable to identify any conflict minerals among the surveyed companies. However, there were some issues such as the smelting facility being unclear for 2 of these surveys. These surveys will continue to be implemented in fiscal 2019.

  • * For the quality control department of each divisional company factory and the quality control departments of affiliated

Addressing the Procurement of Timber Materials

We have been implementing Timber Procurement Surveys for Housing Company suppliers since fiscal year 2015, and Timber Procurement Survey Guidelines for the procurement departments of each divisional company were established in 2017. Implementation of the guidelines began in April 2018. In order to contribute to the eradication of deforestation as well as the sustainable use of timber resources, every effort is made to ensure that the timber used in products is logged in accordance with statutory and regulatory requirements. In fiscal 2018, we conducted a survey based on the Timber Procurement Survey Guidelines for all companies. The results confirmed that all of the timber was logged in accordance with statutory and regulatory requirements for the business partners (39 companies) of the Housing Company.

SEKISUI CHEMICAL Group “Basic Procurement Policy”

Social Contribution Activities

As a company that lives together with the local community, the Group promotes social contribution activities in the areas of the environment, the next generation, and local communities. For example, on an environmental theme we encourage forest preservation activities, the preservation of biodiversity, and greening activities. Positioning these activities as a hallmark of our initiatives as a corporate citizen in tune with the needs of society, we also support the activities of Group employees to give back to society.

Natural Capital

The air, water, and land that constitute our plant provide a healthy living environment for its inhabitants and foster robust biodiversity. Our daily lives and economic activities are sustained by the natural capital* provided by our planet. SEKISUI CHEMICAL Group is aiming for the planet and society to remain like this. In addition to halting the deterioration of natural capital, such as by reducing greenhouse gas (GHG) emissions, promoting the recycling of resources, and reducing the burden on ecosystems, the Group contributes to making returns to natural capital through such means as expanding sales of its Environment-Contributing Products that contribute to the environment, while engaging in daily business activities toward achieving a world in which biodiversity is preserved.

*Natural capital: A term that refers to physical capital, such as soil, air, water, minerals, flora and fauna, as well as biological capital, human capital and social capital.

Long-term Environmental Management Vision “Sekisui Environment Sustainability Vision 2030”

SEKISUI CHEMICAL Group formulated the Long-term Environmental Management Vision “Sekisui Environment Sustainability Vision 2030,” the basis of its environmental activities, to advance environmental management. The Group will engage in environmental management based on contributions in three areas —“Expand and create markets for Environment-Contributing Products,” “Reduce environmental impact,” and “Conserve the natural environment” —to give back more to the Earth than is taken” by 2030. We aim for a “world in which biodiversity is conserved” by reaching a return rate to natural capital of 100% or higher by 2030 and thus achieving sustainable use of the earth’s natural capital.

Environmental Medium-term Plan “Sekisui Environmental Sustainability Plan: Accelerate” (FY2017-2019)

We have established and are implementing a three-year Environmental Medium-term Plan for fiscal 2017 through fiscal 2019 based on backcasting from our Long-term Environmental Vision. This Environmental Medium-term Plan, “Sekisui Environmental Sustainability Plan: Accelerate,” will accelerate various initiatives aimed at achieving the posture we have depicted for 2030 in our Long-term Environmental Vision.

Integrated Index “Sekisui Environmental Sustainability Index”

The Sekisui Environmental Sustainability Index represents the impact on the environment caused by the activities of SEKISUI CHEMICAL Group companies (the use of natural capital) and their degree of contribution to the environment (returns to natural capital) as a single indicator. Starting in fiscal 2017, the “rate of return to natural capital,” as reflected in this index, is being used as a KPI to manage the overall progress of Group companies’ environmental management.

In fiscal 2018, setting the use of natural capital (the impact on the environment) at 100, the return of natural capital (contributions to the environment) was 92.8%. One of the factors in this achievement was expanding the contribution from the products, including solar power-equipped houses and interlayers to address sound and heat insulation in vehicles. Increasing the “product contribution,” as reflected in this index, and bringing about an improvement in the return to natural capital are also linked to improving the environmental efficiency of SEKISUI CHEMICAL Group customers.

Promotion System

Environmental Management System

The CSR Committee headed by the president and the Environmental Subcommittee of SEKISUI CHEMICAL Group report on CSR-related issues, afterward determining CSR policies and initiatives for the entire Group. Their reports are then submitted to the Board of Directors for approval and subsequent implementation. Each business site manages its environmental activities through an environment management system based on ISO 14001.

Complying with Environmental Laws and Regulations

The Group has set its own environmental management targets, such as for reducing emissions into the atmosphere and water environments, which are tougher than legal regulations. Each business site strictly follows these internal targets. We aim to prevent environmental accidents before they occur by conducting internal environmental audits to unveil latent environmental risks.

Usage of Natural Capital

Climate Change

We will continue to work toward reducing GHG emissions at every stage of our business activities from the procurement of raw materials to development, manufacturing, transport, and use with the COP21 (Paris Agreement) objectives at the forefront of our decision-making.

SEKISUI CHEMICAL Group is also actively engaged in environment-contributing investments that contribute to reducing greenhouse gas emissions from its production divisions. In regard to the electricity that accounts for about half of these greenhouse gas emissions, we are reviewing our selection criteria for electric power suppliers with an eye toward cutting costs and CO2 emission coefficients. Moreover, we are increasing our utilization ratio for renewable energy by advancing the introduction of solar power equipment to generate electricity for use at the plant or facility in which it was installed.

Efficient Use of Resources

With regard to waste, we strive to thoroughly implement the “3Rs” (reduce, reuse, and recycle) throughout entire lifecycles. We also engage in Zero Waste Emissions Activities that reuse as resources all the waste generated due to our business activities.

Conservation of Water Resources

Identifying the impact of water resources on business continuity and reflecting this into our BCP. SEKISUI CHEMICAL Group recognizes that conveying the importance of safe water supply and water infrastructure to customers is critical for business sustainability since we supply products for infrastructure for water supply, storage and drainage. In addition, the Group also realizes that contributions to preserving water resources through its businesses will help achieve one of the 17 Sustainable Development Goals (SDGs): “access to safe drinking water and sanitation.”

Chemical Substance Management

Since fiscal 1999, SEKISUI CHEMICAL Group has set and worked toward its own targets for reducing emissions and the transfer of chemical substances in addition to implementing efforts such as the Product Assessment System for Environmental Impact*1 and the Green Procurement System*2. Periodically we also review chemical substances, in accordance with the establishment and amendment of relevant laws and regulations.

  • *1 Product Assessment System for Environmental Impact: A system for assessment of the environmental impact of product development all the way from raw material procurement through manufacture, use, disposal, transport and all other stages.
  • *2 Green Procurement System: A system of giving priority to choosing raw materials, parts, etc. with lower levels of environmental impact when procuring them.

Environmental Impact Assessment

SEKISUI CHEMICAL Group undertakes an evaluation of the environmental effects of products across all stages from product planning, development, and mass prototyping to marketing and initial distribution.

Return of Natural Capital

Environment-Contributing Products

SEKISUI CHEMICAL Group defines products that have demonstrated a high level of environmental contribution when used by customers as Environment-Contributing Products. Environment-Contributing Products are contributing to the return of natural capital by creating and expanding markets.

In fiscal 2018, new registrations exceeded targets. SEKISUI CHEMICAL Group also achieved its Environment- Contributing Products sales ratio target. Meanwhile, SEKISUI CHEMICAL Group is increasing sales of Environment- Contributing Products through new registration. This is in turn attributable to growth in zero energy houses (ZEH) in Japan and a reaffirmation of the value of pharmaceuticals and drug manufacture support in the Group’s medical operating which expanding globally.

Conserving the Natural Environment

Having incorporated items relating to biodiversity into its Environmental Management Policy in April 2008, SEKISUI CHEMICAL Group formulated guidelines in 2011. The Group has striven to conserve the natural environment, including in terms of biodiversity, through both environmentally conscious business activities and actions to preserve the environment undertaken around the world.