CSR Guidelines & Activity Reports - 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. 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. 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. 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.
  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. In addition, the results of the annual activities for Toray Group overall are reported to the Risk Management Committee every year, and the status of progress status 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.
  1. 1 For more information, please refer to “Facilitating CSR Initiatives Throughout the Supply Chain

Group companies implementing continuous review of risk management (%)

■Reporting scope
Toray Group
■Target in fiscal 2018
100%

Result in fiscal 2018

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. (1) Trends in domestic and overseas demand and product market conditions, etc.
  2. (2) Increases in fuel prices
  3. (3) Capital investment, merged businesses, affiliations, acquisitions, etc.
  4. (4) Fluctuations in currency markets, fluctuations in interest rates, fluctuations in the value of marketable securities and others
  5. (5) Retirement benefit liabilities and deferred tax assets following fluctuations in conditions on which future projections are premised
  6. (6) Overseas business activities
  7. (7) Manufacturing responsibility
  8. (8) Court cases
  9. (9) Laws and regulations, taxation, competition policies, internal controls
  10. (10) Natural disasters, accidents
  11. (11) Information security

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 2018, group education on risk management was provided to Toray Group’s newly appointed managers and group companies in and outside Japan.

Group companies implementing risk management education

■Reporting scope
Toray Group
■Target in fiscal 2018
80%

Result in fiscal 2018

100%