Fiscal 2019 CSR Activity Report - Facilitating CSR Initiatives Throughout the Supply Chain

Toray Group Distribution Initiatives

Social Initiatives

Working Together with Business Partners

Basic Distribution Policy BriefingBasic Distribution Policy Briefing

Holding Basic Distribution Policy Briefings

Toray Industries, Inc. holds annual Basic Distribution Policy Briefings as part of its ongoing effort to improve quality and reduce the environmental impact of its distribution process. In 2019, 52 distribution partner companies participated in briefings to promote understanding of Toray Group’s distribution policies and improve distribution performance.

Participation in White Logistics Movement and Declaration of Voluntary Activities

Toray Industries supports 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. As part of this support, the Company submitted a declaration of voluntary activities.
The declaration included the Company’s commitment to taking the following voluntary actions to overcome the growing logistics crisis in Japan. Going forward, it will continue to actively work to improve the logistics environment as part of its corporate social responsibility. This commitment is based on mutual understanding and cooperation with business partners and logistics companies, with the aim of ensuring sustainable logistics.

  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.

Reducing the Environmental Impact of Distribution

Reduction in CO2 emissions per unit of sales from distribution activities (year-on-year)

■Reporting scope
Toray Group (Only specified consigners in Japan)
■Target in fiscal 2019
1.0%

Result in fiscal 2019

-4.7%

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 2019, at Toray Group (only specified consigners2 in Japan), CO2 emissions from distribution activities were 30,800 tons, down 3,800 tons (10.9%) year-on-year, due primarily to a decrease in transport volume.
Meanwhile, CO2 emissions intensity (average energy consumption per unit of sales) increased significantly for some group companies due to the fact that a relevant transport-related index3 fell by more than the CO2 emissions concerned. The average Toray Group CO2 emissions intensity3 was 96.1 in fiscal 2018, compared to the fiscal 2014 level (set at 100). In fiscal 2019, the figure was 100.6, an increase of 4.7%.
In fiscal 2019, Toray Industries’ CO2 emissions from distribution activities totaled 25,800 tons, down 3,100 tons (10.6%) from the previous fiscal year. This decline from the previous year was primarily due to full-load transport, increased loading rates and reductions of inefficient transport, which resulted in a 512-ton reduction, and a decrease in the transport volume for plastic and film products.
Energy consumption per unit of net sales decreased by 3.0% year-on-year and an average of 3.5% over the past five years, due mostly to a decrease in net sales. 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. 2 Toray Industries, Inc., Toray Advanced Film Co., Ltd., and Toray Amenity and Civil Engineering Co., Ltd., which have annual cargo transport totaling 30 million ton-kilometers or more, are “specified consigners” under Japanese law.
  2. 3 Energy consumption per unit of net sales refers to CO2 emissions in transport divided by a transport-related index, as shown below:
    Toray Industries, Inc.= Net sales
    Toray Advanced Film Co., Ltd. = Shipping volume
    Toray Amenity and Civil Engineering Co., Ltd. = Shipping volume x distance (per ton-kilometer)
    Specified consigners are required to endeavor to meet the legal mandate to reduce energy consumption intensity by an average of at least 1% every year over the medium- and long-term.
CO2 Emissions Resulting from Distribution Activities (Toray Group’s Specified Consigners in Japan)
CO2 Emissions Resulting from Distribution Activities (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 0.120
Modal shift 0.002
Full-load transport (strategic positioning of warehouses, etc.) 0.321
Shortened transport distances (loading at the nearest port, etc.) 0.069
Total 0.512

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 MaterialsToray Group's Bulletin Board System for Sharing Surplus Shipping Materials

Monetary Amounts Recovered for Packaging Materials (Toray Industries )

Toray Industries recovered 740 million yen for packaging materials in fiscal 2019, down 80 million yen (10.2%) 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 in fiscal 2019
40%

Result in fiscal 2019

35%

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 pursued modal shift. In addition, the Company augmented its initiatives to address the recent vulnerabilities in truck transport caused by a shortage of drivers, by using ships for products that cannot be easily transported by rail.
Toray Industries set a modal shift target of 40% to be achieved by fiscal 2019 and has been actively promoting the use of rail and sea transport. The modal shift rate for January to December 2019 increased by 5.7 points from the previous year to 34.5%. While the overall transport volume decreased, more resin and film products were shifted to ocean transport.
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 to Sea or Rail for Transport (Toray Industries, Inc.)
Modal Shift to Sea or Rail for Transport (Toray Industries, Inc.)

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 project involves sharing accident analysis data, and distribution quality enhancement reports. Partners that make outstanding contributions to improving quality are recognized through annual awards4 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. Toray Industries works with distribution partners to improve distribution quality and safety and to reduce the incidence of problems by conducting on-site inspections and holding quality control meetings with partners.

  1. 4 Distribution-partner companies receiving awards in fiscal 2018 (alphabetical order):
    Daiichi Storehouse & Refrigeration Co., Ltd., Hamakyorex Co., Ltd., Itochu Logistics Corporation, Mitsunori Corporation, Narukawa Warehouse Co., Inc., Shikoku Meitetsu Transportation Co., Ltd., Trancom Co., Ltd., Yamada Unso Co., Ltd.

Distribution Incidents

Distribution Incidents

Toray Industries worked to reduce the number of incidents in fiscal 2019. Not only did the number of shipments decline; the Company also set incident reduction targets and reinforced on-site inspections, particularly at the distribution companies where incidents had been high in the previous fiscal year. As a result, the number of accidents involving damage to plastic products, which account for about 60% of incidents, fell by 11%, and the overall number of incidents fell by 6% (41 accidents) from the previous year. Toray Group will continue working with partner companies to improve distribution quality.

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 Certification5 and G Mark.6 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. 5 Green Management Certification is awarded 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. 6 The G Mark is awarded to companies that meet certain criteria and demonstrate excellent safety, based on an assessment of proactive initiatives for legal compliance and safety.

Yellow Card Emergency Response Measures

Drivers of shipping vehicles carry a yellow card7 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. 7 Cards summarizing the names of any hazardous substances, applicable laws and regulations, hazardous properties, emergency accident procedures, emergency reporting and contact information, methods for minimizing the spread of damage, and other accident response 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)8 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)9 status.

  1. 8 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. 9 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.