CSR Materiality for the Teijin Group

In recent years, shareholders, institutional investors and various other stakeholders have increased their requests to companies regarding the disclosure of financial and non-financial information. Nowadays, disclosing non-financial information appropriately, as it pertains to corporate social responsibility encompassing the environment, society, and governance (ESG), requires identifying the material CSR issues to be disclosed, along with explaining the reasons for their materiality.

The Teijin Group aims for the sustainable development of both business and society. The Group identified the following materiality for a variety of CSR issues related to the social responsibilities of companies, and is advancing CSR management that is integrated with our business strategies. For fiscal 2016, we identified CSR procurement as a new material CSR issue in light of our renewed recognition of its importance in our businesses and through dialogue with external experts.

CSR Materiality of the Teijin Group (Material CSR Issues)

Initiatives for CSR Materiality

The Teijin Group is advancing initiatives for identified material issues by assigning the responsible organization for each issue.

In fiscal 2016, we reconfirmed the scope of each material issue based on the initiative of individual business groups and set key performance indicators (KPIs) and medium-term targets; all the KPI targets have been set except for corporate governance and biodiversity. In particular, for six issues identified as focus areas, we proceeded with the following initiatives:

  • Corporate governance

The effective operation of the system established has always been one of our material issues. We implemented measures, including an advisory board and a TRM committee.

  • Environmental value solutions
  • Safety, security and disaster mitigation solutions
  • Demographic change and increased health consciousness solutions

We defined these three solutions and listed relevant products.

  • Reduction of environmental impacts

Energy conversion works were carried out at the Toho Tenax Mishima Factory. The new gas turbine power generation system that started operation in April 2017 is expected to help reduce CO2 emitted by the Teijin Group as a whole by more than 2% (about 50,000 tons/year). Moreover, in light of the Paris Agreement, our target for after 2020 is due to be set during the new medium-term management plan period (fiscal 2017-2019).

  • Diversity

We continued to work on improving diversity awareness and encouraging various ways of working, advancing female employees in the workplace, and promoting the diversification of human resources. In addition, we set forth "Promote the success of human resources regardless of gender, nationality, experience and sense of values" and "Promote the design of systems to support diverse work styles in line with the times" in the new medium-term management plan.

In fiscal 2017, we will continue to press forward with our initiatives for material issues, including the newly identified "CSR procurement", while reviewing CSR materiality on a continuous basis.

Process of Identifying Materiality

As described below, the Teijin Group grasps and screens a wide range of CSR issues, analyzes those issues screened in terms of their degree of impact on stakeholders and importance to the Teijin Group, and selects material issues. The Chief Social Responsibility Officer then holds dialogues with external experts. For the final stage, the Group Management Committee identifies CSR Materiality of the Teijin Group.

Grasp and screen >> Analyze materiality >> Select material CSR issues >> Dialogues with external experts >> Identify material CSR issues

  • STEP1 Grasp and screen

    The Teijin Group is grasping a wide range of CSR issues and screening them into groups for materiality analysis.

    The Teijin Group has positioned as fundamental the issues that the Teijin Group is already working on, and also Creating Shared Value (CSV) issues that were identified as business opportunities in line with management strategies. These issues are then cross-checked against social issues indicated in relevant international documents such as the ISO 26000 guidance on social responsibility, Global Reporting Initiative (GRI) Guidelines, the United Nations (UN) Global Compact, the UN's sustainable development goals (SDGs), and the Paris Agreement on climate change, and evaluation items of major socially responsible investment (SRI) indices, to grasp and screen CSR issues.

    [The Teijin Group's CSR issues] ・Basic CSR (Compliance, Risk management, Environment, Safety and disaster prevention, and Health (ESH), Product liability/Quality assurance) ・Expansive CSR (Human resources/Labor, Purchasing/Procurement) ・Selective CSR (Value creation addressing social issues, Social contribution activities) [Issues pertaining to CSV in medium-term management strategies] ・Environmental value ・Safety, security and disaster mitigation ・Demographic change and increased health consciousness [Screen] ・External evaluations ・ISO26000 ・GRI Guidelines ・UN Global Compact ・UN SDGs ・Paris Agreement on climate change ・Major SRI indices [Screening results] The CSR issues the Teijin Group is tackling currently overlap for the most part with the issues raised by external evaluations. [Items Subject to Materiality Analysis]
All Teijin CSR activities and CSV issues + Socially important issues yet to be addressed

  • STEP2 Analyze materiality

    The CSR issues grasped and screened into groupings are put through a materiality analysis.

    The screened CSR issues are analyzed and mapped two-dimensionally, with importance of the CSR issues to the Teijin Group in ascending order along the horizontal axis, and impact on stakeholders in ascending order along the vertical axis.

    [High] Degree of impact on stakeholders [Low] Importance to the Teijin Group (Material issues to the Teijin Group are selected based on the ascending order of importance to the Teijin Group and impact on stakeholders)

    Method for determining impact on stakeholders (vertical axis)

    Stakeholders are categorized into (1) shareholders and investors, (2) employees, (3) customers, (4) suppliers, and (5) local residents. The ascending order of degree of impact on stakeholders is determined by whether a CSR issue is of particular interest to each stakeholder category and then tallying the score.

    Method for determining degree of importance to Teijin Group (horizontal axis)

    Importance to the Teijin Group is determined from both the degree of impact on business (taking into account both the positive and negative aspects), and also the prospect and likelihood of the issues occurring.

    Degree of impact on businesses, Positive impact on business development, Positive impac, Negative impact, Negative impact on business continuity Strong, Weak Prospect and likelihood of the issue occurring High ... Low Importance to the Teijin Group High

    STEP3 Select material CSR issues

    From the issues analyzed at STEP 2, we select those issues which have a high importance to the Teijin Group and a high degree of impact on stakeholders.
  • STEP4 Dialogues with external experts

    We conduct dialogues with external experts about the Teijin Group's process of identifying CSR Materiality and the selected issues.

    Input from the experts (March 2017)

    Clarifying how the material issues relate to business raises awareness to resolve social issues.

    Nowadays, determining how companies can contribute to social issues through their technological capabilities, new business, and so forth is a major priority. Teijin's new medium-term management plan sets out three types of solutions and a roadmap for that. In particular, I think it is fantastic that Teijin has clarified its approach to social issues. Furthermore, where each business unit comes into play is also clear. For employees as well, I think that making the results of the initiatives visible both heightens sensitivity to CSR thinking and can also be tied to value creation.

    Hidemi Tomita,
    Director,
    Lloyd's Register Japan K.K.

    Next step is to diversify storytellers

    I learned from the latest round of dialogue that Teijin's initiatives are making headway and becoming broader in scope. I think the next step is to diversify our storytellers. Teijin's board members are clearly very conscious of CSR. However, I think it will be important going forward to visualize further its dissemination among employees and to aim to re-entrench CSR thinking. For example, I think traveling around within the company to communicate directly with a group of mainly young employees to spread the word about CSR and incorporating fresh opinions would be effective. This is because a decade or two down the line, today's younger generation will be supporting Teijin.

    Ken Shibusawa,
    Founding Partner & Chairman of the Board,
    Commons Asset Management, Inc.

    It is important that employees really feel their activities are contributing to sales.

    Fostering consciousness about resolving social issues is not something that can be taught. For example, it is important that frontline employees can really get a sense for things like how to tie an eco-product that they have developed to sales and profits. Working environmental and social issues into the targets for product and technology development also leads to higher motivation at worksites. When people take the initiative to think about what they can do themselves, an array of opportunities arise and business units can get the message out about what kinds of developments and innovations are needed. I think making that happen is what fostering consciousness is all about.

    Toshihiko Goto,
    Chief Executive Officer, Sustainability Forum Japan,
    and Board Member, Global Compact Network Japan
  • STEP5 Identify CSR Materiality

    The Group Management Committee deliberates, confirms, and identifies the Teijin Group's CSR Materiality.

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