Masaaki Ito Representative Director and President Kuraray Co., Ltd.

Vision: To be a Company that Sustainably Grows and Makes a Social Contribution Based on Its Own Technology

Higher Demands for CSR

Today, the demands for corporate social responsibility have intensified. As one example, activities for E-S-G (environment, society and governance) have become critical themes for corporate management. This approach is based on the concept that a steady and continued response to various challenges by corporations based on these three viewpoints becomes a motive power for a sound evolution and growth for corporations that in turn contributes to the formation of a sustainable society.

As one recent topic in the area of the environment, the Paris Agreement that was adopted at COP21 in December 2015, and went into effect in November 2016, can be singled out first. The Paris Agreement hammered out a goal of reducing greenhouse gas emissions substantially to zero by the second half of this century throughout the world, targeted at “controlling the average temperature rise of the world to 2°C or lower.”

This historic international agreement manifests a strong sense of crisis entertained among the nations against the spreading of adverse effects caused by climate change on a global scale. I believe that we too in the Kuraray Group as a whole should tackle this goal to realize a sustainable society.

Next, our next social challenge is the acceptance of diversity. “Diversity” embraces a very broad scope such as human ethnicities, languages, genders and religions. First, Kuraray will aim at creating workplaces, in which female workers can play active roles, through continuous improvements of the workstyle of its employees. Kuraray believes that this initiative will eventually support the growth of Kuraray to be a corporation with vitality where its diverse workers fully demonstrate their capabilities.

Lastly, corporate governance has increasingly become a critical challenge when corporations aim at enhancing their corporate values. Kuraray aims at creating an efficient corporate governance system based on the corporate governance code set by the Tokyo Stock Exchange. Kuraray is determined to enhance its corporate values sustainably over many years while maintaining appropriate relations with its diverse stakeholders and fulfilling its responsibilities to society.

The Path on which the Kuraray Group should Tread

The basic approach of Kuraray toward CSR follows the belief of our founder, Magosaburo Ohara, “Returning all assets gained from society to society” and the philosophy of our secondgeneration president Soichiro Ohara, “Any profit which a company might gain should be confined to those profits that come from technological innovation and from consideration of the social and economic benefits it brings to the entire nation.” The basic approach of Kuraray embodies the mission “For people and the planet – to achieve what no one else can.” Kuraray has the founder who had a clear approach toward corporate social responsibility long before the word CSR was coined and this sense of mission has been passed down unbroken from generation to generation.

I have always conveyed to our employees my aspiration of wishing “ Kuraray to be a company that sustainably grows based on its own technology.” In other words, I wish Kuraray to be a company to contribute to society through its business and to sustainably grow with all employees by making its strong core businesses stronger and larger, by expanding the scale of its businesses that are expected to grow using new technologies rich in originality and by increasing the profit of new businesses and products.

CSR Activities of Kuraray in Action

The thought processes of Kuraray are explained above and one of the tangible activities of Kuraray is participation in the program called “Responsible Care (RC)” promoted by the world’s chemical industry. Kuraray expressed its approval of the Responsible Care World Charter when I signed our declaration in support of the charter and is promoting its RC activities as core CSR activities of Kuraray.

The RC activities of Kuraray include activity items such as “Environmental conservation,” “Process safety and disaster prevention,” “Occupational safety and health,” “Logistics safety,” “Chemical and product safety” and “Interaction with society.” The Kuraray plants in Japan continuously improve their operations autonomously by rotating the PDCA cycle (a cycle consisting of steps for “plan,” “do,” “check” and “act”) for each of these activity items. Our future challenge will be to upgrade the level of our activities as group total activities embracing the Kuraray Group in Japan as well as our overseas affiliates.

Activities to reduce the emissions of greenhouse gases as a goal of the Paris Agreement will be undertaken as part of our RC activities when the Japanese Government presents specific numerical targets together with a legal framework to the industry.

The next topic is improvement of our workstyles. Since as early as 2015, Kuraray has engaged in an activity to recognize the value of time, which is a precious asset bestowed on all people, instead of merely targeting the reduction of overtime hours.

I believe it is extremely important for all employees to work within a giventime, to foster family members and households, to build relationships with communities and to aim at personal growth.

Workstyles at companies are important to “lead a better life.” We have been proceeding with work style improvements where each one of the employees works in high quality, efficiency of workplace are improved by all the members and a healthy mind and body is maintained while each one of us uses precious time effectively and makes all effort worthwhile aiming at creation of new values and personal growth. When these improvements in workstyle are accomplished, the spectrum of activities of female employees, which has been a social issue especially in Japan these days is expected to expand.

At the same time, we consider that the employment of female employees, expansion of their responsibilities and their higher retention rate are crucial issues and have been introducing specific measures to tackle with the issues.

Lastly, talking about corporate governance, in Fiscal 2003, Kuraray established a management consultative committee, increased the number of outside auditors and reinforced the functions of its board of auditors. In Fiscal 2008, Kuraray appointed two outside board directors and this timing in having outside board directors was relatively early for Japanese companies. Through these and other measures, Kuraray is active in enhancing corporate governance. A Kuraray governance report in compliance with the corporate governance code that is introduced by Tokyo Stock Exchange is also compiled in English for disclosure to foreign shareholders.

Thoroughness in Preventing Recurrence of Incidents

In March 2016, the Fair Trade Commission of Japan made an on-the-spot inspection of Kuraray, involving competitive bidding on specified Vinylon products purchased by the Acquisition, Technology and Logistics Agency of the Defense Ministry. Kuraray fully cooperated with the investigation conducted by the commission. In March 2017, the commission ruled that Kuraray violated the Anti-Monopoly Law and issued a cease and desist order.

Immediately after the on-the-spot inspection, I issued a message to all the Group employees stating “I do not want any profits gained by violating a law or a regulation. Those businesses that cannot produce profits without infringing a law or a regulation must be discontinued.”

Additionally, a new version of the Kuraray Group Anti- Monopoly Law Compliance Guideline has been issued and distributed to raise the compliance awareness of the Anti- Monopoly Law among all our personnel. Measures for more thorough compliance have been implemented, including boosting of the compliance system within the organization.*

Nonetheless, in February 2017, the Fair Trade Commission of Japan again conducted an on-the-spot inspection of Kuraray on suspicion of having violated the Anti-Monopoly Law in connection with activated carbon used in water purification facilities, waste incinerators and other facilities. We deeply regret our failure to find this incident by ourselves. I apologize to all the stakeholders including our customers and business clients for their concerns regarding this matter.

Kuraray takes the series of these events seriously and sincerely and will implement all necessary measures to ensure such incidents will never be repeated.

Kuraray is committed to more thoroughly comply with the laws and regulations and to further devote itself to corporate activities in maintaining good harmony with society in order to regain the trust of its stakeholders and to respond to their expectations.

Masaaki Ito

  • *Please see page 31 for Kuraray’s specific measures in implementing its compliance activities.