Risk Management System and Initiatives

Developing a Risk Management System

Percentage of group companies with enterprise risk management systems

Reporting scope: Toray Group

Fiscal 2016 target:
100%

Result:
100%

Percentage of group companies in Japan implementing continuous review of risk management

Reporting scope: Toray Group (Japan)

Fiscal 2016 target:
100%

Result:
100%

Percentage of group companies outside Japan implementing continuous review of risk management

Reporting scope: Toray Group (Outside Japan)

Fiscal 2016 target:
100%

Result:
100%

Toray has established a Risk Management Committee under the CSR Committee to regularly monitor the progress of risk reduction measures across the Toray Group and conduct planning and promotion of risk management measures. Under the Risk Management Committee, local risk management committees have been established at each of Toray's divisions, departments, offices, and plants. Company-wide measures decided by the Risk Management Committee are communicated to local risk management committees, which work to reduce risks by implementing company-wide measures together with individual measures decided by committees.

At group companies around the world, risk management systems are established under the leadership of their presidents. The system promotes initiatives to reduce the specific risks faced by each company. Each group company reports on the results of these initiatives to Toray's Risk Management Committee every fiscal year.

Toray evaluates overall risk and identifies priorities according to the scale of a risk's potential impact on the Toray Group's business. These issues are incorporated into plan-do-check-act (PDCA) cycles to reduce the risk that they pose.

 

Toray Group Risk Management System

Toray Group Risk Management System

PDCA Cycle for Enterprise Risk Management

PDCA Cycle for Enterprise Risk Management

Dealing with Priority Risks

Percentage of priority risks improved

Reporting scope: Toray

Fiscal 2016 target:
90%

Result:
95%

Priority risks are reevaluated every three years. Fiscal 2016 was the second year in the current cycle of priority risks. Designated departments implemented risk reduction initiatives in accordance with the three-year action plan, which enabled Toray to surpass its targets for percentage of priority risks improved. In particular, Toray significantly improved the business continuity plans for a major earthquake and influenza pandemic. Additionally, information security measures were implemented for certain areas of business, significantly raising the level of information security beyond company-wide standards.

Toray also conducted a basic survey for risk assessment among department managers in fiscal 2016, to determine if potential risks had significantly increased since the company-wide assessment that was conducted in fiscal 2014. The survey confirmed that no priority risks needed to be added during the current cycle. Group companies in Japan implemented surveys to determine the current risk management situation at their companies, as well as implementing direct interviews at certain group companies. Issues that were identified at each company were communicated to the supervising head office department, which discussed future concrete measures. Additionally, Toray started to examine methods and procedures for centralized risk assessment for the entire Toray Group.

Addressing Existing Major Risks

(1)Supply chain risk reduction

In fiscal 2016, Toray analyzed the results from its CSR survey of suppliers that was implemented in fiscal 2015 and provided feedback to suppliers. Toray also studied ways to address global human rights issues in the Group's supply chains, centering on international supply chains.

The Toray Group conducts checks for the use of conflict minerals1 in all products and has been working to make its responses to customers' requests for surveys quicker and more efficient by integrating data management.

 

  1. 1 The four minerals of gold, tin, tantalum and tungsten mined in the Democratic Republic of Congo and the nine surrounding countries. The aim is to cut off sources of funding for armed groups in the Democratic Republic of Congo by imposing disclosure and reporting obligations on manufacturers that use conflict minerals.

(2)Maintaining information security

The IT Promotion Committee had been worked on diverse IT initiatives for Toray and, in fiscal 2016, it was reorganized to focus on group-wide information security.

Toray also operates company-wide committees that focus on specific important risks including legal compliance, market conditions for raw materials, business strategy, climate change, currency fluctuations, and security trade control. These committees work to continually reduce risks and keep the Board of Directors informed through progress reports.

 

Percentage of group companies experiencing information security-related incidents, compared with fiscal 2013

Reporting scope: Toray Group

Fiscal 2016 target:
70%

Result:
142%

In fiscal 2014, the Toray Group adopted new rules requiring the loss or theft of mobile phones and security cards to be filed as incident reports. Incidents of this type were not covered back in fiscal 2013 when establishing the incident rate targets for fiscal 2014 to 2016. Since the targets have not been revised to reflect the broader inclusion, the target for fiscal 2016 was not achieved.

Crisis Management Systems

The Toray Group has established Crisis Management Rules, a set of clear fundamental principles that form the basis of a company-wide response in the event of a major crisis. The Group works to ensure the thorough implementation of these rules when required. Moreover, the Group reviews the rules as appropriate to prepare for new risks that emerge due to changes in the social environment.

In fiscal 2016, Toray reviewed the rules, focusing on risk management by the parent company for group companies in and outside Japan. The updated rules were put into effect in May 2017.

The Group also recognizes the importance of security control for international business travel as well as political instability and terrorism risks, and strives to reduce the risk by keeping employees informed with up-to-date information.


 

Emergency Quick Response System

Emergency Quick Response System

  1. 2 Notification is conducted according to the Emergency Reporting Route for Significant Disasters, Environmental Accidents, and Other Crisis Outbreaks.