About the Formulation of the New Action Plan

The Daifuku Group formulated the CSR Action Plan in 2014, as a medium-term plan that sets up targets according to the six initiatives and clarifies the actual content of the initiatives. On this occasion, we are making revisions to deepen the CSR initiatives to coincide with the start of Value Innovation 2020, the new medium-term business plan.

Achievements in FY2016

Provide high quality products and services

Provide high quality products and services
Initiative FY2016 plans and targets
KPI FY2016 targets FY2016 results
Improve product quality and services

1. Maintain and improve product quality to satisfy customer needs

  • Continue to promote improvement proposal activities
  • Internal product safety design training (internal education)
  • Obtain ISO 9001 certification at production bases around the world
  • Global deployment of teamwork initiatives and presentation contests
  • Continue to operate the internal assay system (welding, assembly)
Number of improvement proposals 4,000 3,615
Number of employees acquiring Safety Assessor certification 70 in the Group 95 in the Group
2. Reduce product defects - - -

3. Improve customer satisfaction by ensuring a full support structure

  • Conduct customer satisfaction surveys
- - -
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Strengthen risk management

Strengthen risk management
Initiative FY2016 plans and targets
KPI FY2016 targets FY2016 results
Strengthen the risk management structure 4. Promote and strengthen information security measures Number of times information security regulations were reviewed, revised and publicized. Once Once
Number of times information security education was done through e-learning Twice Twice

5. Expand Business Continuity Management (BCM)

  • Conduct risk assessment for all group companies
  • Educate and train all employees on disaster countermeasures
  • Conduct BCP drills
Risk assessment execution rate 100% 97%
Implementation of complience and ethics training courses 4 times or more a year 4 times

6. Enhance compliance and anti-corruption measures

  • Implementation of compliance and ethics training courses
Implementation of compliance and ethics training courses Completed Completed
Enhance corporate governance

7. Enhance transparency and monitoring of management

  • Promote disclosure of information in accordance with GRI
- - -
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Nurture relationships of trust with our suppliers

Nurture relationships of trust with our suppliers
Initiative FY2016 plans and targets
KPI FY2016 targets FY2016 results
Promote CSR procurement in the supply chain

8. Form partnerships with suppliers and share information on CSR

  • Hold Presentation on Management and Production Trends regularly
  • Continue to conduct SQD Awards, a system to certify outstanding suppliers
- - -

9. Construct mechanisms and ensure policies concerning fair procurement are kept

  • Continue to implement the procurement personnel qualification system
  • Establish CSR procurement policy
- - -
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Respect for human dignity (human rights, labor practices, safety, health)

Respect for human dignity (human rights, labor practices, safety, health)
Initiative FY2016 plans and targets
KPI FY2016
targets
FY2016
results
Protect human right

10. Determine current considerations for human rights throughout

  • Investigate the presence of any issues concerning considerations on human rights inside the Group
- - -

11. Ensure knowledge throughout the Group of in-house policies on human rights

  • Establish internal policy concerning human rights and spread it throughout the Group
- - -
Develop workplace environments that are easy to work in 12. Conduct surveys of employee awareness - - -
13. Promote work-life balance - - -
Promote diversity 14. Expand employment of persons with disabilities Employment percentage of persons with disabilities 2.1% 1.81%

15. Employment of the elderly

  • Establish a post-retirement re-employment system
- - -
16. Facilitate an environment of gender equality - - -
- - -
17. Promote global human resources - - -
Ensure health management and safety of our employment and safety of our employment and safety of our employees and those of our partner companies 18. Expand health and safety training Number of people receiving training at the Anzen-Taikan Dojo 1,750 persons 1,083 persons
19. Minimuze (Eliminate) workplace accidents and other serious accidents Severity rate 0.01 0.02
Frequency rate 0.6 0.67
20. Build a global safety and tygiene management framework - - -

21. Promote mental and physical health

  • Conduct health promotion events
- - -
Personal training 22. Foster global business leaders - - -
23. Create and maintain a training system to help develop the skills of employees - - -
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Create good relations with communities

Create good relations with communities
Initiative FY2016 plans and targets
KPI FY2016
targets
FY2016 results
Encourage communication and activities that contribute to society

24. Formulate a policy for social contributions of the Group

  • Create a clear participation schedule for regular regional activities and provide reports of their contents
- - -

25. Conduct regular dialog with neaby communities

  • Conduct regular meetings with local residents
  • Accept observation tours of the office by local residents and students
- - -
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Contribute to the environment through corporate activities

Contribute to the environment through corporate activities
Initiative FY2016 plans and targets
KPI FY2016 targets FY2016 results
Promote environmentally friendly business operations 26. Minimize environmental impact through energy and resource savings Units of CO2 emissions compared to FY2005 37% or more 41.4%
COemissions generated per unit of net sales: FY2005
(Factory, Office)
76% or less 61.4%
COemissions generated per unit of net sales: FY2005
(Products)
82% or less 55.9%
Waste generated per unit of net sales: FY2005 74% or less 85.3%
Recycling rate of waste 99% or more 98.7%
Waste generated per unit of net sales: FY2005 61% or less 42.5%

27. Conduct activities to conserve biodiversity

  • Conduct conservation activities at the Shiga Works
  • Conduct rare spacies inhabitation survey
Conduct conservation activities at the Shiga Works Internal and external publication of information on biodiversity preservation initiatives
  • Insect and Nature tours
  • Release of clouded salamander for biodiversity protection

28. Promote green procurement in the supply chain

  • Promote according to green procurement guideline
- Sharing of information with suppliers Understand the environmental impact of suppliers’ actual emissions
Increase the number of eco-friendly products and services 29. Increase the number of certified Daifuku Eco-Products Number of certified Eco-Products 35 or more 38
30. Reduce CO2 from products and services COReduction Contribution 41,000 ton-CO2 41,689 ton-CO2
Enhance the foundations for environmental management 31. Foster an environmental mindset in employees through training Participation in Eco-Action Total of over 3,000 people
(expand events, lectures and autonomous activities throughout the Group)
Total of 5,603 people

32. Build a global environmental management structure

  • Set an environmental goal globally and monitor it
- Implementation of environmental impact reduction measures at non-Japan sites Self-assessment of energy conservation actions
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Action Plan and Determining Materiality

Daifuku started the ESG Project in November 2013, and then in June 2014 we established and implemented the activities of Daifuku’s CSR and the CSR Action Plan, which make up the core of our various CSR initiatives. In April 2017, in line with the beginning of our new medium-term business plan, we revised the previous Action Plan.

Determining Materiality

Step 1 Identify issues

We identified issues surrounding our business environment based on the general principles of international guidelines such as GRI*2 and ISO 26000*3 as well as the UN Global Compact, together with both the underlying and apparent demands of various stakeholders including our customers, investors, local communities, and employees.

Step 2 Determine materiality

For the issues identified in Step 1, we evaluated “the impact on stakeholders” and “the impact on our business” according to our original criteria and determined 15 issues as “materiality” that impacted both of these factors beyond a certain level.

Step 3 Verify material aspects and set KPIs

We verified the progress of our efforts toward the 10 material aspects and revamped them as necessary, while checking whether our approach to issues are keeping with changes in the social environment outside the Company. We then set KPI*2 for the material aspects and began activities after setting quantitative targets.

Materiality

For the 15 material aspects determined in Step 2, we examined and revised the validity of selecting those issues according to necessity, based on the progress of our initiatives or the change of the social environment surrounding our business. We set up KPI*4 for all material aspects and carry out initiatives after setting up targets so that it is possible to judge the progress of each material aspect.

  • Maintain and improve product quality to satisfy customer needs around the world
  • Create a comfortable workplace environment
  • Strengthen technology development platform
  • Promote human resource development
  • Ensure compliance and prevent corruption
  • Encourage communication with shareholders and investors
  • Promote and strengthen information security measures
  • Encourage communication with local communities and society at large, and social contribution activities
  • Continue expanding business continuity management
  • Promote environmentally friendly activities in business operations
  • Promote CSR procurement in the supply chain
  • Expand environmentally friendly products and services
  • Eliminate workplace accidents and serious accidents
  • Strengthen environmental management platform
  • Promote diversity
  • *1Materiality: Issues that need to be addressed as top priorities, as they have a significant influence on the environment, society and governance or the evaluation and decision making of stakeholders.
  • *2GRI: Global Reporting Initiative: An NGO that advocates sustainability reporting guidelines. Daifuku refers to the G4 guidelines.
  • *3ISO26000: International standard for the social responsibilities of organizations that is issued by ISO.
  • *4KPI: Key Performance Indicator, a quantitative performance evaluation index that measures target achievement