CSR Activity Report (CSR Guideline Activity Reports) - Risk Management

Risk Management Initiatives

Basic System for Group-Wide Risk Management

Description of Activities

1. Periodic risk management (priority risk mitigation activities)

  1. (1) Toray Industries, Inc. exhaustively identifies group-wide risks (climate change, natural disasters, legal violations, scandals, etc.) and then pinpoints significant risks to address in a group-wide system. It does this by taking each risk identified and conducting quantitative analysis and assessment in a process of mapping based on the possibility of occurrence, degree of impact on the Company’s management, and indicators of whether sufficient measures are already in place as well as qualitative analysis based on interviews with each department. Ultimately, priority risks are determined after consulting with the Risk Management Committee, which is chaired by the general manager of the Corporate Strategic Planning Division.
  2. (2) Priority risks are addressed with risk mitigation activities following the PDCA cycle over a three-year period.
  3. (3) In the fifth three-year set of priority risks (fiscal 2021–2023), information security, global CSR procurement, and business continuity risks from water hazard risks were selected. In order to promote risk management that can help achieve management goals, Toray Group terminated the fifth set of priority risks one year ahead of schedule in fiscal 2022 after establishing a system to promote risk mitigation and working out the details of relevant activities.
    Currently, the sixth three-year set of priority risks is being implemented for the period from fiscal 2023 to fiscal 2025. Toray Group has set out the two priority risks—crisis response risks based on the possibility of war and product supply disruption risks—to help achieve the Group's current Medium-Term Management Program.
  4. (4) Toray Industries assigns a department responsible for each priority risk and integrates group-wide activities using a three-year road map for risk mitigation activities as well as an annual activity plan.
  5. (5) In addition, progress of the risk mitigation activities is monitored and the results of the annual activities for Toray Group overall are reported to the Risk Management Committee every year. Toray Industries discusses and establishes an annual activity plan for the next fiscal year that addresses the monitoring results and any new risks that have materialized due to changes in the environment.

Group companies conducting follow-up on the Toray Group’s priority risks (%)

■Reporting scope
Toray Group
■Target in fiscal 2022

Result in fiscal 2022


2. Routine risk management (monitoring trends in and outside Japan, identifying, assessing and monitoring risks)

Toray Industries routinely monitors domestic and overseas trends and identifies risks that could have a major impact on Toray Group’s management. When such risks are identified, the Company promptly develops a company-wide system to address them and takes the necessary group-wide countermeasures.

3. Response in the event of a crisis

Based on the Risk Management Regulations, a company-wide quick response system (Company-Wide Emergency Headquarters) is formed to respond to the crisis that has occurred.

Business and Other Risks

Toray Group has identified the following business and other risks, as noted in its annual securities reports.

  • Crisis response risks based on the possibility of war
  • Product supply disruption risk
  • Risks related to product demand, market trends, and business plans
  • Risks related to global business development
  • Risks related to foreign currency, interest rate and securities market fluctuations
  • Risks related to environmental issues such as climate change, water shortages, and resource depletion
  • Risks related to natural disasters and accidents
  • Risks related to human resource strategies
  • Risk related to compliance
  • Risks related to information security and cyber threats

Related Information

Initiatives to Mitigate Global CSR Procurement Risk

Investigating a Survey Process Prioritizing High-risk Issues

The Toray Group CSR Procurement Policies were established as the Group's CSR policies related to procurement. Meanwhile, the Toray Group CSR Procurement Guidelines were implemented as activity guidelines for the entire supply chain, with which suppliers need to comply. In addition, the Group conducts the CSR Procurement Survey regularly with major suppliers and confirms that CSR initiatives are being implemented throughout the supply chain. After evaluating and analyzing the survey responses, Toray Industries asks suppliers with low scores to make improvements and follows up with such measures as facility visits.
Moreover, in order to mitigate CSR procurement risk for the entire Group, Toray Industries has been investigating the adoption of a certain process. This process involves identifying important CSR procurement risk types corresponding to specific countries, regions, and industries, and those suppliers deemed to require risk investigation, auditing, and/or mitigation measure implementation.
This initiative was promoted in fiscal 2021 and fiscal 2022 as one of Toray Group's priority risks. In fiscal 2021, after identifying and prioritizing its CSR procurement risks, Toray Industries decided to focus on the three issues of human rights and labor, safety and health, and environmental preservation. Supplier survey questionnaires and an audit procedure manual were prepared for investigating suppliers.
In fiscal 2022, in order to verify the usability of the prepared questionnaires and audit procedure manual, Toray Industries conducted tests with the help of affiliated companies in Japan and overseas, and carried out investigations to establish the survey process. In order to identify the suppliers to be surveyed, a process was devised to narrow down the list based on factors such as supplier country (or region) and industry, using supplier information gathered from affiliated companies worldwide.
Going forward, Toray Industries will establish risk identification and investigation processes and conduct risk investigations of the selected suppliers. Whenever a risk is identified, the Company will conduct an audit and follow-up, in an effort to reduce CSR procurement risks for the entire Group.

CSR Procurement Risk Map
CSR Procurement Risk Map

Risk Management Education for Employees

In order to foster employee awareness of risk management, Toray Group has set a KPI in its CSR Roadmap 2022 of the number of Group companies implementing risk management education. In fiscal 2022, the Group conducted risk management education, which included crisis response, for its new employees, newly appointed managers, and general managers. To prevent the spread of COVID-19, some training sessions were held remotely.

Group companies implementing risk management education (%) achieved (compared to the plan at the beginning of the fiscal year)

■Reporting scope
Toray Group
■Target in fiscal 2022

Result in fiscal 2022


Click here for the main initiatives for CSR Guideline 5, “Risk Management” in CSR Roadmap 2022.