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 cycle of mitigation activities for the fourth three-year set of priority risks (fiscal 2018-2020), Toray Industries set quality management, earthquake response, information management and socially responsible procurement1, as priority risks. These efforts extend to the Group overall, including group companies in and outside Japan. In the fifth three-year set (fiscal 2021–2023), information security, socially responsible procurement, and water hazard countermeasures were selected.
    1. 1 For more information, please refer to “Facilitating CSR Initiatives Throughout the Supply Chain
  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, the results of the annual activities for Toray Group overall are reported to the Risk Management Committee every year, and progress is monitored. 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 2020
100%

Result in fiscal 2020

100%

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.

  1. Risks related to the COVID-19 infection
  2. Risks related to environmental issues such as climate change, water shortages, and resource depletion
  3. Risks related to domestic and overseas demand and market trends
  4. Risks related to procurement of raw materials and fuel
  5. Risks related to capital expenditures, joint ventures, alliances and acquisitions
  6. Risks related to foreign currency, interest rate and securities market fluctuations
  7. Risks related to changes in assumptions on which forecasts are based that might affect employee retirement benefit obligations and deferred tax assets
  8. Risks related to global business development
  9. Risks related to product liability
  10. Risks related to lawsuits
  11. Risks related to laws and regulations, taxes, competition policies and internal controls
  12. Risks related to natural disasters and accidents
  13. Risks related to information security and cyber threats

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 2020, group education on risk management was provided remotely to Toray Group’s new employees, newly appointed managers, and group companies in and outside Japan by using a Web conference system. Some training sessions that could not be held remotely were postponed to prevent the spread of COVID-19.

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 2020
100%

Result in fiscal 2020

80%2

  1. 2 Some group training sessions were postponed to prevent the spread of COVID-19.

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