Fiscal 2019 CSR Activity Report - Risk Management

Risk Management Initiatives

Governance

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 identifies important risks after carrying out an assessment to determine the relative importance of each risk. 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 (an executive vice president).

  2. (2) Priority risks are addressed with risk mitigation activities following the PDCA cycle over a three-year period.

    PDCA Cycle for Group-Wide Risk Management
    PDCA Cycle for Group-Wide Risk Management
  3. (3) In the priority risk mitigation activities for the fourth cycle (fiscal 2018-2020), Toray Industries set quality management, earthquake response, information management and socially responsible procurement,1 among others, as its priority risks. These efforts extend to the Group overall, including group companies in and outside Japan.

    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 implementing continuous review of risk management (%)

■Reporting scope
Toray Group
■Target in fiscal 2019
100%

Result in fiscal 2019

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. Domestic and overseas demand and product market trends
  2. Fluctuations in fuel prices
  3. Capital expenditures, joint ventures, alliances and acquisitions, etc.
  4. Fluctuations in foreign currency, interest rate, and the securities market
  5. Changes in assumptions on which forecasts are based that might affect employee retirement benefit obligations and deferred tax assets
  6. Overseas operations
  7. Product liability
  8. Lawsuits
  9. Laws and regulations, taxes, competition policies, and internal controls
  10. Natural disasters and accidents
  11. Information security risks
  12. Environmental issues
  13. COVID-19

Risk Management Education for Employees

In order to foster employee awareness of risk management, Toray Group has set a KPI in its Sixth CSR Roadmap of the number of Group companies implementing risk management education. In fiscal 2019, group education on risk management was provided to Toray Group’s new employees, newly appointed managers, core managers, and group companies in and outside Japan.

Group companies implementing risk management education(%)

■Reporting scope
Toray Group
■Target in fiscal 2019
100%

Result in fiscal 2019

100%