CSR Activity Report (CSR Guideline Activity Reports) - Facilitating CSR Initiatives Throughout the Supply Chain

Toray Group Distribution Initiatives

Working Together with Business Partners

Basic Distribution Policy Briefing (when held in fiscal 2019)Basic Distribution Policy Briefing (when held in fiscal 2019)

Holding Basic Distribution Policy Briefings

Toray Industries, Inc. promotes understanding of Toray Group’s distribution policies and works to improve distribution performance with annual Basic Distribution Policy Briefings for logistics companies as part of its ongoing effort to improve quality and reduce the environmental impact of its distribution process. In fiscal 2020, the briefing was canceled due to COVID-19, but it is scheduled to be held online in fiscal 2021.

Participation in White Logistics Movement and Efforts to Improve the Logistics Environment

Toray Industries participates in the White Logistics Movement,1 an initiative designed to ensure the provision of the stable logistics necessary for consumers’ lives and for industrial activities, while also contributing to economic growth. In line with the declaration of voluntary activities given below, the Company is actively working to improve the logistics environment based on mutual understanding and cooperation with business partners and logistics companies.

  1. 1 In response to the growing shortage of truck drivers in Japan, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), Ministry of Economy, Trade and Industry (METI) and Ministry of Agriculture, Forestry and Fisheries (MAFF) are working together to encourage the participation of shipping and logistics companies. The aim is to improve the productivity of truck transportation and raise logistical efficiency, while looking to realize a fairer labor environment, thereby making it easier for women and drivers over the age of 60 to work in the industry.
Initiative Details
Cooperate with the logistics improvement and proposals Seriously work on eliminating incidental work, etc. that leads to increased duty hours of truck drivers.
Use pallets, etc. Expand use of packing styles (pallets, etc.) that enables loading using forklifts to reduce cargo loading time.
Extend lead time Secure sufficient lead time corresponding to the transportation distance.
Take legal compliance status into account Give utmost priority to assess compliance status with relevant laws upon selecting logistics companies for signing agreements.
Actively utilize logistics vendors engaged in working style reforms, etc. Actively utilize logistics companies engaged in work-style reforms, improvement of transportation safety and logistics quality.
Suspend, discontinue, etc. of operation in case of adverse weather, etc. Give utmost priority to the truck driver's safety in the event of adverse weather, earthquake, etc.

Improving Logistics Productivity by Using Smart Pallets

As part of its White Logistics initiatives, Toray Industries, Inc. is the first in the industry to use smart pallets equipped with active tags developed by UPR Co., Ltd. Typically, pallets must be replaced with different pallets during transportation and storage to prevent their loss or outflow, and the loaded products must be reloaded each time. Smart pallets, on the other hand, do not need to be replaced, since the coming, going, and inventory of pallets can be managed from a distance with the embedded active tags. Adoption of these smart pallets allows Toray’s products to go on the same pallet from production to storage, transportation, and use by the customer. This has eliminated cargo handling work by truck drivers and warehouse personnel, shortened loading and unloading time, improved the working environment, and increased logistics productivity. Moreover, the Company is reducing CO2 emissions related to pallet recovery by using its packaging materials recovery system to recover empty pallets.
In recognition of the Company’s contribution to reducing the environmental impact and the burden on transportation companies, Toray Industries jointly received, with UPR Co., Ltd., the Special Award in the Fiscal 2020 Green Logistics Partnership Conference Award for Excellent Business Operators.2

  1. 2 An award, presented by the Ministry of Economy, Trade and Industry, the Ministry of Land, Infrastructure, Transport and Tourism, and others, that recognizes businesses for their remarkable contributions to the establishment of sustainable logistics systems by reducing environmental burdens in the logistics sector or improving productivity in terms of distribution.

Various Effects of Toray Industries’ Use of Smart Pallets

Initiative Effect
・Reduce CO2 emissions related to pallet recovery 83% reduction (by 197 t-CO2/year)
・Reduce product loading and unloading time 75% reduction (by 23,788 hours/year)
・Improve efficiency of office work 100% reduction in work time (by 1,584 hours/year)
・Reduce truck standby time 38% reduction (by 5,947 hours/year)
・Reduce distribution accidents (broken bags) 35% reduction (by 148 incidents/year)

Reducing the Environmental Impact of Distribution

Reduction in CO2 emissions intensity from distribution activities (year-on-year)

■Reporting scope
Toray Group (Only specified consigners)
■Target in fiscal 2020
1%

Result in fiscal 2020

-9.9%

Toray Group is working hard to reduce CO2 emissions in transport. These initiatives include reducing transport distances, shifting modes of transport to those which have less environmental impact such as sea and rail (modal shift), and raising transportation efficiency.
In fiscal 2020, at Toray Group (only specified consigners3 in Japan), CO2 emissions from distribution activities4 were 27,900 tons, down 2,900 tons (9.5%) year on year, due primarily to a decrease in transport volume.
Meanwhile, CO2 emissions intensity5 increased significantly for Toray Industries, which accounts for 85% of the Group’s CO2 emissions, due to the fact that a relevant transport-related index5 fell by more than the CO2 emissions concerned. The changes in Toray Group’s CO2 emissions intensity was 97.7 in fiscal 2020, taking the fiscal 2014 level (set at 100) as the base, an increase of 9.9% from the previous fiscal year (fiscal 2019).
In fiscal 2020, Toray Industries’ CO2 emissions from distribution activities totaled 23,700 tons, down 2,100 tons (8.2%) from the previous fiscal year. This decline from the previous year was primarily due to full-load transport, increased loading rates and reductions in inefficient transport, which resulted in a 53-ton reduction, and a decrease in the transport volume for fiber, textile and plastic products.
Toray Industries’ CO2 emissions intensity from distribution activities increased by 12.8% year on year (from fiscal 2019) because the decrease in net sales exceeded the decrease in CO2 emissions. Over the past five years, however, CO2 emissions intensity decreased an average of 1.3% per year. As a result, Toray Industries is meeting its legal mandate as a specified consigner to reduce energy consumption intensity by an average of at least 1% every year over the medium- and long-term.
Toray Group will continue to seek CO2 emissions reductions by pursuing environmentally responsible distribution.

  1. 3 Toray Industries, Inc., Toray Advanced Film Co., Ltd., and Toray Building Materials Co., Ltd., which have annual cargo transport totaling 30 million ton-kilometers or more, are “specified consigners” under Japanese law.
  2. 4 CO2 emissions from distribution activities refers to “CO2 emissions related to the transportation of cargo entrusted to freight carriers” stipulated in the Act on Rationalizing Energy Use (Revised Energy Conservation Act)
  3. 5 CO2 emissions from distribution activities ÷ the following transport-related indexes
    Toray Industries, Inc.= Net sales
    Toray Advanced Film Co., Ltd. = Shipping volume
    Toray Building Materials Co., Ltd. = Shipping volume x distance (per ton-kilometer)
    Specified consigners are required to endeavor to meet the legal mandate to reduce CO2 emissions intensity by an average of at least 1% every year over the medium- and long-term.
CO2 Emissions Resulting from Distribution Activities and CO2 emissions intensity (Toray Group’s Specified Consigners in Japan)
CO2 Emissions Resulting from Distribution Activities and CO2 emissions intensity (Toray Group’s Specified Consigners in Japan)

CO2 Emissions Reduction in Distribution Activities (Toray Industries, Inc.)

Details of initiatives CO2 Reduction (1,000 tons)
Recognized actual reductions more precisely due to improved calculation accuracy for maximum loading capacities, average loading rates, and other values 0.037
Full-load transport (strategic positioning of warehouses, etc.) 0.005
Shortened transport distances (loading at the nearest port, etc.) 0.011
Total 0.053

Expanding Collection and Reuse of Packaging Materials

Toray Group is establishing a global framework to collect and recycle packaging and shipping materials that are included with products used by customers. Group companies in Japan use an internal bulletin board to inform other companies if they have surplus packaging and shipping materials available for reuse.

  • System for Reusing Shipping Materials (Toray Industries, Inc.)
    System for Reusing Shipping Materials (Toray Industries, Inc.)
  • Toray Group's Bulletin Board System for Sharing Surplus Shipping Materials
    Toray Group's Bulletin Board System for Sharing Surplus Shipping Materials

Monetary Amounts Recovered for Packaging Materials (Toray Industries )

Toray Industries recovered 650 million yen for packaging materials in fiscal 2020, down 80 million yen (11.3%) from the previous fiscal year.
The Company endeavored to improve the return rate and the reuse rate by prioritizing the recovery of its main packaging materials, as the recovery volume decreased due to a decline in the shipment volume for fibers and film.

Monetary Amounts Recovered for Packaging Materials (Toray Industries )

Promoting a Modal Shift

Modal shift to sea or rail for transport across distances for 500 km or more (%)

■Reporting scope
Toray Industries, Inc.
■Target
40%(2022 target)(Calendar year)

Result in 2020(Calendar year)

32%

Toray Industries laid out its commitment to environmentally friendly distribution in its Basic Distribution Policies (established in December 2004), in which it aimed to balance consideration for the environment in the distribution process with better competition achieved by cost-cutting. Toward this end, the Company has actively pursued modal shift (switching from trucks to rail and ship transport). In addition, modal shift is also effective as a measure to address the recent vulnerabilities in truck transport caused by a shortage of drivers. Toray Industries set a modal shift target of 40% to be achieved by fiscal 2022 and has been actively promoting initiatives to achieve this goal.
The modal shift rate for January to December 2020 decreased by 2.4 points from the previous year to 32.2%. With the rapid recovery in product demand in the second half of fiscal 2020, transport by truck increased due to the difficulty of securing containers for rail transportation and the increase in the number of cases where lead times for rail transportation were unacceptable.
Toray Group will continue pursuing modal shift in diverse product and materials transport and will work more closely with distribution partners. Through these efforts, the Group will promote environmentally responsible distribution while taking into consideration the environmental impact of the distribution process.

Modal Shift Rate (Toray Industries)
Modal Shift Rate (Toray Industries)

Acquisition of Eco Rail Mark and Eco Ship Mark

Toray Industries has certified as an Eco Rail Mark Company by Japan's Ministry of Land, Infrastructure, Transport and Tourism and the Railway Freight Association. This recognizes Toray's active efforts to use rail freight transport, a relatively environmentally friendly means of transportation. The Company also obtained Eco Rail Mark Product certifications for its TORAY TETORON fiber and TORAYCON polybutylene terephthalate (PBT) resin.
Moreover, in fiscal 2017 Toray Industries achieved the Eco Ship Mark certification related to its film products, which are difficult to ship by rail. This program recognizes companies that are switching to ship transport and use maritime transport, which has a low environmental impact, to a certain extent.

Acquisition of Eco Rail Mark and Eco Ship Mark

Initiatives to Improve Safety and Quality in Distribution

Toray Industries is working on a project to improve transport quality. The Company works with distribution partners to improve distribution quality and safety and to reduce the incidence of problems by sharing accident analysis data and distribution quality enhancement reports, conducting on-site inspections and holding quality control meetings with partners. Partners that make outstanding contributions to improving quality are recognized through annual awards6 These initiatives are aimed at reducing the number of problems such as those involving breakage, and reducing transport delays and incorrect shipments of Toray products.

  1. 6 Distribution-partner companies receiving awards in fiscal 2020 (alphabetical order):
    Fuji Logitech Hamamatsu, Inc., Mitsui-Soko Co., Ltd., NRS Corporation, Shikoku Meitetsu Transportation Co., Ltd., Toto-Soko, Toyo Logistic Service Co., Ltd., UPR Co., Ltd.

Distribution Incidents

In fiscal 2020, not only did the number of shipments decline, the adoption of straight-through pallet transportation with smart pallets, introduced in January 2020, significantly reduced the number of accidents caused by truck drivers and cargo handlers loading and unloading cargo by hand and accidents due to pallet defects. As a result, the number of accidents involving damage to plastic products, which account for about 60% of incidents, fell by 31%, and the overall number of incidents fell by 29% (197 accidents) from the previous year. Toray Group will continue working with partner companies to improve distribution quality.

Distribution Incidents

Legal Compliance and Safety Initiatives in Distribution

Recommending that Distribution Partners Acquire Third Party Certification

Toray Industries recommends that its distribution partner acquire external certifications such as ISO 9001, ISO 14001, Green Management Certification7 and G Mark.8 These certifications require companies to achieve legal compliance, improve quality, and practice environmental conservation in distribution processes. Toray Industries also pursues CSR initiatives in collaboration with distribution partners.

  1. 7 Certification is awarded by the Foundation for Promoting Personal Mobility and Ecological Transportation to companies that demonstrate a certain level of environmental improvement activities based on a manual for implementing green management (business management with a low environmental impact)
  2. 8 A system that recognizes companies that meet certain criteria and demonstrate excellent safety, based on an assessment by the Safety Evaluation Committee established by the Japan Trucking Association of proactive initiatives for legal compliance and safety recommended by the Ministry of Land, Infrastructure, Transport and Tourism

Yellow Card Emergency Response Measures

Drivers of shipping vehicles carry a yellow card9 detailing emergency measures to be taken to minimize damage in the event of an accident. Toray Industries has also established an emergency communication system and carries out emergency training. In the unlikely event of such an accident, the Company has procedures in place enabling the necessary staff to be dispatched as swiftly as possible to the accident site for assistance.

  1. 9 A Card listing the names of any hazardous substances, applicable laws and regulations, hazardous properties, procedures in case of accident, emergency reporting and contact information, methods for minimizing the spread of damage, and other relevant information.

Initiatives to Prevent Overloading

The overloading of trucks causes vibration, noise, damage to roads and facilities, and also creates driving hazards. Consequently, Toray Industries is putting considerable effort into the prevention of overloading.

Compliance and Security Measures for Importing and Exporting

As a measure to ensure the legality and safety of imports and exports as part of Toray Group's expanding global operations, a US subsidiary of Toray International, Inc. enrolled in the Customs-Trade Partnership Against Terrorism (C-TPAT)10 with the aim of strengthening global supply chain compliance. In order to realize more efficient imports and exports of materials and to strengthen supply chain compliance and security measures, Toray Group is also encouraging its worldwide distribution partners to obtain Authorized Economic Operator (AEO)11 status.

  1. 10 A voluntary program introduced by United States Customs and Border Protection in November 2004. The aim of the program is ensure and strengthen security through the global supply chain, based on international cooperation with private operators importing goods into the US.
  2. 11 A status implemented by the EU in December 2006 that gives priority in customs procedures to importers and exporters with a high level of compliance for cargo security. The Japanese Customs Act was also revised in 2007, and a similar qualification system was established to provide priority in customs procedures to highly compliant operators.

Click here for the main initiatives for CSR Guideline 9, “Facilitating CSR Initiatives Throughout the Supply Chain” in CSR Roadmap 2022.