Nippon Light Metal GroupC O R P O R AT E S O C I A L R E S P O N S I B I L I T Y R E P O R T

CSR REPORT

Nippon Light Metal GroupCONTACT INFORMATION

Nippon Light Metal Holdings Company, Ltd.
CSR Contact, Central CSR and Audit OfficeTennozu Ocean Square, 2-2-20 Higashi Shinagawa, Shinagawa-ku, Tokyo, 140-8628
TEL.03-5461-8645 FAX.03-5461-9188
https://www.nikkeikinholdings.co.jp

Table of Contents
2

Editorial policy /Reporting media of CSR information

4

Message from CEO

6

80 years of history

8

New mid-term management plan

1012

The NLM Group’s CSR promotion system, selectionof materiality, and approach response to climatechangeFeatureBuilding a sustainable society with aluminum
1. Contributing to building a sustainable society
with aluminum
2. Helping to build a sustainable society throughrecycling
3. Contributing to sustainable transportation
4. Contributing to building a sustainable living
environment
5. Contributing to building a sustainable future
Environment

24

Safety25

Quality Assurance

28

Work-Life Balance

29

Communication with Stakeholders

31

Governance and Internal Control

33

Interview with an Outside Director

34

Global network, corporate overview, financial
highlights, business summary

36

Third-party opinions

37

Independent Assurance Report

38

Data

Introduction

This report describes the CSR initiatives that were taken by the NLMGroup in FY2018. Further information are available on our official
website.

Awards

The aim of this CSR Report 2019 of the Nippon Light Metal (NLM)
Group is to ensure that the NLM Group’s CSR-related approach andinitiatives are understood by our stakeholders by reporting them in a
way that is easy to understand.
The NLM Group recognizes the social issues surrounding it. We are also
aware of the climate change problem and ESG investments, which arereceiving increasing attention in recent years, and global initiatives
including SDGs. We pursue CSR initiatives that help to solve theseissues. We would appreciate it if you would read about the initiatives wetake to address each of the issues and provide us with opinions andcomments.

Non-financial information
CSR Report(Brochure/
PDF)

Websitehttps://www.nikkeikinholdings.co.jp/csr/
https://www.nikkeikinholdings.com/csr/(English)

The Japan Business Federation(Keidanren) Chairman award in the
Global Environment Awards
April 2018

Reference guidelines
This report was created by referring to the Environmental Reporting
Guidelines 2018 (Ministry of the Environment) and the Global Reporting
Initiative (GRI) Standards.

Period covered

Financial information

Data for the report were collected between April 2018 and March 2019.
* Data collected before or after this period are also used in some sections of

Websitethis report.

https://www.nikkeikinholdings.co.jp/ir/ir-data/

Scope of the report
This report describes the activities of and facts about Nippon Light
Metal Holdings Co., Ltd. and its 77 consolidated subsidiaries (a total of
78 companies) unless otherwise specified.

Annual Report

Excellence Award
Environmental Communication Awards
February 2019NIPPON LIGHT METAL HOLDINGS COMPANY, LTD. ANNUAL REPORT 201921

Reporting media of CSR information

Editorial policy

Period of issuance
October 2019 (Next report: To be issued in October 2020; Previous
report: Issued in October 2018)

Fact Book

ANNUAL REPORT 2019Year ended March 31, 2019https://www.nikkeikinholdings.co.jp

Nippon Light Metal Holdings Company, Ltd.
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
https://www.nikkeikinholdings.co.jp

Independent assurance
A ★ symbol indicates that a third party, KPMG AZSA Sustainability Co.,
Ltd., has provided independent assurance regarding the reliability of thedata.

Printed in Japan

005_0600701371909.indd

1

2019/08/29

14:33:49

Stock Indexes

Initiatives for SDGs and creation of Special Features pages of the CSR Report
In the CSR Report 2017, the NLM Group expressed its determination towork on SDGs. Since then, we have been advancing initiatives such as
discussions within the CSR Committee, dissemination of information via
our internal newsletters, mapping, and selection of issues of individual
businesses. In addition, as partially introduced in this report, we arehaving discussions to ensure that material issues selected for the overall
group and each main sector will be linked to SDGs.
Since we began to issue CSR Reports in 2011, the reports’ Special
Features have been created by more than ten members of the group.
The main chapters have also been created by around ten members of
the secretariat. In creating this CSR Report 2019, members of thisyear’s production team, those from the secretariat, members of past
production teams, and others who were interested attended Workshop
2030 SDGs, which was given by Imacocollabo, a general incorporated
association, to develop better understanding of SDGs. This workshop
was also given at the meeting of environmental practitioners that washeld in May 2019 and contributed greatly to the spreading of SDGs
internally. There are still many people who are interested in the seminar,
so we will continue to take similar initiatives.
2 Corporate Social Responsibility Report 2019

Cover page design
Common kingfishers prefer refreshing streams as their habitats.
When the natural environment was being destroyed in Japan
during its post-war economic boom, this species of bird wascalled the symbol of the destruction of nature. In recent years,
however, these birds are seen in urban rivers and park ponds dueto the improvement of water quality. Because of this, the common
kingfisher is said to be a barometer of environmental pollution.
Members of this report’s production team selected this bird as
the motif of the cover page design, wishing that the NLM Groupwill contribute to environmental protection and be a 100-year
corporate group that continues to operate its businesses andorganizations in an agile manner like the common kingfisher,whose body color is the same color as our corporate blue.
Workshop 2030 SDGs

Nippon Light Metal Holdings Co., Ltd. 3

Message from CEO

Building a sustainable society with the power of Team NLM
Based on the firm business foundation that we have developed so far, we will contributeto building a sustainable society by taking advantage of the strengths of Team NLM toachieve new growth.

80th anniversary, and aiming for a 100year corporate group
Nippon Light Metal Co., Ltd., the core company of the NLMGroup, celebrated its 80th anniversary in March 2019, and thegroup took a new step forward.
The history of the NLM Group goes back to the early 1940s,
when it started aluminum smelting in Shizuoka and Niigata. While
the aluminum smelting industry achieved growth with theeconomic development of Japan that began in the 1950s, we
expanded our operations by accepting a large number ofaluminum processing manufacturers as our group companies.
Later, the aluminum smelting industry, which should beconsidered a representative of industries with large power
consumption, was to exit the market due to the oil shocks thatbegan in 1973. However, the NLM Group has kept growing todate, mainly in the field of processing, by pursuing the potentialof aluminum, a material with excellent properties.
At the NLM Group, we will tirelessly continue to develop
environmentally friendly products and services while continuing tovalue our manufacturing spirit that has been passed down since
our foundation and maintaining our inexhaustible explorer spirit.

Overcoming crisis and achieving thesustainability of society and the company
Today, aluminum is used in a broad range of fields including
food, healthcare, construction, transportation equipment, electricand electronic equipment, and machine equipment. This isbecause the superior properties of aluminum, such as its lightweight, thermal conductivity, and workability, are useful in many
fields and diverse applications. Another important factor is theexistence of abundant bauxite reserves, the source of aluminum,
evenly distributed around the world. This has led to theestablishment of an international market and stable prices. It is
aluminum’s high functionality as a material and its marketability
as a product that has instigated its wide application in manyindustrial and household uses.
Further, aluminum features a diversity of alloys andmanufacturing methods. This allows an alloy design andmanufacturing method to be selected by each user for eachproduct, catering to diverse needs. We have developed
applications for aluminum together with users by reducing its
weight while keeping it rigid, downsizing it while maintaining its

4 Corporate Social Responsibility Report 2019

dimensional precision, improving its heat-exchange efficiency
while reducing cost, and improving its decorative value while
maintaining its rigidity. As a result of these initiatives, aluminumhas become a material essential for our lives, and new demand
for the material will be triggered by market diversification and thegrowth of developing countries. As before, we will continue toidentify those new needs accurately together with users.
Regardless of what industries will rise, and which countries orregions will develop, we will continue to collaborate andcooperate closely with users to develop applications foraluminum. We believe that our mission is to maximize the valueof this metal, which is both functional and marketable, andprovide it to the market, and this is where our corporate valuelies. We will continue to pursue the value as before.
On the other hand, high energy consumption and thesubsequent CO2 emissions in the aluminum smelting process is amajor drawback of the material. There is a risk that problems likethese will lead to a move to avoid aluminum if the energy supplydemand balance in the world tightens or the impact of global
warming becomes more serious. Therefore, we regard the
reduction of CO2 emissions in the aluminum supply chain as animportant task of aluminum manufacturers.
Fortunately, aluminum is superior in economic efficiency
because its recycling rate is high in terms of both quality andquantity and its value is not greatly lowered by recycling. This has
led to the natural development of a global system for recyclingaluminum. The NLM Group is the only aluminum manufacturer inJapan that has technologies, products, and services, andbusinesses, in both fields where new ingots are primarily used
and fields that primarily use recycled ingots. We are sure that thedevelopment of recycling technologies for the material will be
another core mission of the NLM Group, following the application
development that we have been working on. The value we havebeen providing to society through aluminum must hereafter be
provided together with quality, combined with the added value ofenergy conservation and decarbonization.
We overcame the major crises of the oil shocks. We willcontinue to recognize the risks involved in aluminum, due to theincreasing importance of decarbonization and risks stemmingfrom climate change, to our businesses and provide products
and services that cater to the changing needs of society. With
those products and services, we will do more than satisfy ourcustomers’ desires, and contribute to a sustainable society.

Evolving into a sustainable,
groundbreaking innovator of aluminumand beyond by leveraging the strengthsof Team NLM

comprehensive capability covering design, installation, services,
and after-sales maintenance in addition to manufacturing.
The slogan of the NLM Group, groundbreaking innovator ofaluminum and beyond, reflects our intention to continue creating
attractive features that are different from those of other material
manufacturers, by taking advantage of our comprehensive
capability as the strength we have as Team NLM and keeping
ourselves sensitive to the needs of customers. What defines
added value is determined by customers, and by society behind
them, instead of ourselves. I believe it is important to give our full
attention to society via our customers, identify the needs of society,and reflect them in our products and services. If we pursue thethings that only Team NLM can accomplish in reflecting theseneeds, we will be able to compete in a different dimension thanother material manufacturers. Giving our full attention to society bytaking advantage of the material’s strength, which is also thestrength and origin of Team NLM, providing products and services
tailored to social needs, and having their added value recognizedby society -- these are the tasks of the groundbreaking innovatorof aluminum and beyond that we aim to be.
The Paris Agreement, which was adopted in 2015 to mitigate
global warming, aims to keep the average global temperaturerise well below 2 degrees Celsius above pre-industrial levels andto pursue efforts to limit the temperature increase even further to
1.5 degrees Celsius. However, it will be extremely difficult toachieve these targets if the measures we take continue to evolveat the current rate. Last year, we formulated a plan to reducegreenhouse gas emissions, specifying FY2030 as the target year,
to ensure that aluminum will continue to satisfy needs relating to
the prevention of global warming and contribute to the building ofa sustainable society. This year, we began to select material
issues with awareness of the risks and opportunities associatedwith climate change and contributions toward achieving
Sustainable Development Goals (SDGs). We will give our full
attention to all stakeholders to solve the various social issues set
forth in SDGs, including global warming. Thus, we will continue
our activities with determination to become a groundbreaking
innovator of aluminum and beyond.
We hereby report the achievements and issues of our CSR
activities at the NLM Group. We would appreciate your frankopinions.

August 2019
Nippon Light Metal Holdings Company, Ltd.
President and Chief Executive Officer

At the NLM Group, our group companies operate businesses
across a broad range of aluminum-related domains. We have a

Nippon Light Metal Holdings Co., Ltd. 5

80 years of history

2010s

Continue evolving into a 100-year corporate groupas a sustainable, groundbreaking innovator ofaluminum and beyond.
A little more than 200 years after aluminum smelting technology was invented in the early 19th
century, humankind has continued using this lightweight, strong metal skillfully and beautifully
to enhance the convenience of our lives.
Since 1939, Nippon Light Metal Co., Ltd. has been involved in this history for 80 years, or for
more than 100 years if the history of our predecessors is included.
The purpose of our business activities has been to enrich people’s lives and contribute to thesound development of society.
Nippon Light Metal Co., Ltd. will engage in more sustainable business activities to become a
100-year company.

Overseas expansion(to China, Southeast
Asia, India, andNorth America)

2000s
1990s
Secondary alloy
business (recycling),
automotive parts

1980s
Capacitor foils,
automotive wheels
and heat exchangers,
memory disks

1970s
1960s

Net sales

Panels for professional
refrigerators, products
for public engineeringand landscaping(billion yen)

600

Aluminum windows,
truck bodies

1950s

500

Rapid spread ofhousehold products
made of aluminum

1939

Foil, powder andpaste business

The NLM Group400

Launch of thealuminum smelting
business

1903

300

The Company’s Prehistory
1903: Nasu Aluminium Instrument Factory (later known as Nikkei
Aluminium) begins operations.

200

1931: Sumitomo Aluminium Co., Ltd. (now known as Toyo
Aluminium K.K.) is established.
1934: Special Light Alloy Co., Ltd. (later known as Nikkei
Aluminium Rolling Co., Ltd.) is established.

Nippon Light Metal Co., Ltd.

100

1937: The Shizuoka Plant of the Riken Foundation (now known
as Riken Light Metal Industry Company, Ltd.) begins
operations.
1903

History prior to 1948 is not listed becauseof the lack of accurate data.
1939

Before foundation

1952
Initial period after foundation

1974

Second foundationand expansion

2003
Business expansion

2019

0

Overseas business expansion

History and significance of our businesses

1903

1939

1952

1974

1998

2012

2019

Nasu Aluminium Instrument Factory, an aluminum
instrument manufacturer, starts business.

Nippon Light Metal Co., Ltd., is establishedwith investment mainly from Tokyo ElectricPower and Furukawa Electric Co., Ltd., tobegin aluminum smelting.

A Capital and technology partnership is formed
with Aluminum Limited (later known as Alcan,
and now known as Rio Tinto) of Canada.

The company merges with Nikkei Aluminium
Co., Ltd. and establishes an integrated
system for manufacturing aluminumproducts through business transfer from
Nikkei Aluminium Rolling Co., Ltd.

The company merges with Toyo
Aluminium K.K.

Holding company structure

Head office relocation (plan)

Management of businesses that rose andgrew in the period of business expansion
was integrated, and cross-functional
collaboration between them wasstrengthened, resulting in the birth of Team
NLM, which provides more sophisticated,
meticulous services to users.

The head office will be relocated back to
the place of our foundation after 80 years,
marking the opening of a new page in our
history as a groundbreaking innovator ofaluminum and beyond.

Pots, teapots, and other household products marked withthe trademark “Nigiriya” depicting a hand holding arrows
contributed greatly to cultivating demand for aluminum inJapan in the early days.

6 Corporate Social Responsibility Report 2019

The establishment of this aluminum smelting manufacturer
with large-scale hydroelectric power generation facilities
contributed greatly to the stable supply of aluminum, which
was undergoing the expansion of its applications forindustrial and household use.

World-leading technologies obtained through thispartnership with a major global aluminum manufacturer
paved the way for new products and technologies to be
developed and supported the explosive growth of demandin the post-war economic boom.

The increase of electricity costs from the oilshocks led to the rapid progress in business
transformation from aluminum smelting to abusiness portfolio centered on aluminum
processing.

Addition of the final manufacturing
processes for aluminum foil enableddiversification of the group’s businesses
and development of environmentally friendly
products such as products for solar power
generation.

Nippon Light Metal Holdings Co., Ltd. 7

New mid-term management plan

Review of the mid-term management plan for FY2016 to FY2018
In the mid-term management plan for the three years starting April
2016 (hereinafter “MTMP 2016”), the NLM Group strived tomaximize its consolidated earnings and strengthen its financial
foundation under the three basic policies of creating new products
and business models by strengthening cooperation within thegroup, business development through regional and sector
strategies, and strengthening the corporate culture (strengthening
our business foundations). As a result, among the performance(1) Create new products and businesstargets for the fiscal year ended March 2019, the final year of
MTMP 2016, we achieved targets for net sales, ordinary profit,and profit attributable to owners of parent, and only our operating
profit target was unachieved due to the slowdown of the Chinese
economy and worsening of the market environment related to
semiconductors and electric and electronic equipment.
Concerning key financial performance indicators, we achieved alltargets.

Key indicators and results under the mid-term management plan for FY2016 to FY2018(Billion yen)

FY2015(Results)

FY2018(Targets under MTMP2016)

FY2018(Results)

Net sales

464.4

500.0

500.5

+0.5

Operating profit

26.8

32.0

30.1

Ordinary profit
Profit attributable to owners of parent
Interest-bearing debt
D/E Ratio*1

24.5
15.5
182.2
1.4
9.0

31.0
20.0
160.0
1 or below
Over 10%

31.1
20.6
139.6
0.7
10.8

1.9
+0.1
+0.6
20.4

ROCE(%)*2

0.3
+0.8

Mid-term management plan for FY2019 to FY2021

Working as Team NLM to be a groundbreaking
innovator of aluminum and beyond
MTMP2016, with which we made a certain level of achievementin the improvement of earning power and financial foundation.
Thus, we will aim to achieve further growth as a groundbreaking
innovator of aluminum and beyond.

1. Basic policies(1) Create new products and businesses
Create new value for all customers by thoroughly pursuing group-wide cooperation
Develop products and businesses, taking advantage of the supply chain with ourmanufacturing at the core(2) Invest resources for growthMore vigorously invest resources into fields and regions where the group’s strengths canbe utilized
Manage the group’s organizations agilely and utilize external resources according tobusinesses(3) Strengthen the management foundation
Give top priority to safety and ensure compliance and quality
Enrich human assets to improve corporate value sustainably
8 Corporate Social Responsibility Report 2019

Environmentally friendly vehicles
Lithium-ion batteries
Medical and pharmaceutical
Extension of the lifespan of infrastructure
Maintenance and other services

capabilities, we will thoroughly pursue group-wide cooperation involving
suppliers to create competitive new products and businesses attuned tomarket needs and offer such products to an ever-broader customer base.

FieldsGroup companies
Automotive/transport
Nippon Light Metal Co., Ltd., Nikkeikin Aluminium Core Technology
Automotive, electrical/electronics, the environment Nippon Light Metal Co., Ltd., Toyo Aluminium, Nikkeikin Aluminium Core Technology, Nippon Electrode
Electrical/electronics, food/healthcare, etc. Nippon Light Metal Co., Ltd., Toyo Aluminium, Nikkei Panel System
Nippon Light Metal Co., Ltd., Nikkeikin Aluminium Core Technology, Sumikei-Nikkei Engineering
Public engineering/landscaping
Automotive/transport, food/healthcare, etc. Nippon Fruehauf, Nikkei Panel System

Difference(Compared to targets)*1 D/E ratio (Ratio of interest-bearing debt to equity): Interest-bearing debt / Shareholders’ equity*2 ROCE (Return on capital employed): Ordinary profit before deduction of interest expenses / Capital employed (Shareholders’ equity + Interest-bearing debt – Cash anddeposits)

Under the new mid-term management plan that was launched
in FY2019 (hereinafter, “MTMP2019”), we will aggressively
invest in the management of resources, including funds andhuman assets while enhancing and continuing initiatives under

The NLM Group operates businesses in wide-ranging fields related toaluminum and has comprehensive capabilities extending from design,
installation, and services to after-sales services and maintenance inaddition to manufacturing. Capitalizing on these comprehensive

Lithium ion battery caseA clean room using flat panels

Powder laminated foil

Bridge inspection walkway [KERO®]

Temperature controlled vans

(2) Invest resources for growth
In view of the NLM Group’s current situation, we will invest resources
more aggressively than before to achieve further growth. Based on our“Start small and let it grow” policy, we will identify market trends andexecute aggressive investment in fields and regions where the group’s
Region
Japan
Japan
China
India
North America

Business development
Capital investment for new products, investment for capacity expansion
Construction of the Engineering Development Center
Capital investment for new products
Establishment of a manufacturing/ sales site
Establishment of a manufacturing/ sales site

strengths can be best utilized. In addition, to execute aggressive
investment, we will manage organizations with agility according toindividual businesses and utilize external resources as necessary.

StrengthIntegrated system, technological development capabilities
No. 1 market share, capability to handle large projects, network for engineering/ installation
Extrusion of complex shapes, high-precision extrusion, machining, high-frequency bonding, assembly
Alloy development, collaboration
Design, alloy, casting, forging, fabrication

Field
Automotive, batteries, thermal, the environment, etc.
Food/ healthcare, electrical/electronics
Automotive, thermal
Automotive
Automotive(3) Strengthen the management foundation
Based on our “safety first” policy, we aim to create healthy and safe
workplaces and eliminate occupational accidents. At the same time, wewill remind employees of the group, as well as external people engaged in
the group’s business activities, of the importance of ensuring complianceand quality, to ensure smooth business activities.
At the NLM Group, we regard our human resources as our assets.
Because human assets are the foundation of our business operations, wewill strive to develop and retain human assets by being proactive inpromoting flexible workstyles and improving the workplace environment.
Moreover, through further promotion of diversification of human assets
and workstyle reform, we will strive to enable every employee todemonstrate his or her full potential, taking responsibility for and pride in
his or her work. We will also vigorously invest resources in safety andenvironmental measures and labor savings, besides awareness raisingand education and training, in order to achieve sustainable growth andco-existence with society.

2. Financial policy and shareholders return
Our basic policy on the distribution of profits is to pay dividends
to shareholders, taking into consideration consolidated financial
results and other factors in a comprehensive manner from a
medium- to long-term perspective while strengthening financial
position and management foundation. We use the total return
ratio* including share buybacks as the indicator for profit
distribution and determine the amount of dividend to achieve a
total return ratio of approximately 30%.

Moreover, we will secure internal reserve to prepare forbusiness development for the future, including reinforcement of
the management foundation, R&D, and human asset
development, in addition to making investments to expand
business in growth fields and for stimulating demand andexpanding the earnings power in the infrastructure businessfield, so as to enhance corporate value.
Note: Total return ratio in fiscal year n (%) =(Total amount of dividend paid in fiscal year n) + (total amount of share buybacks in fiscal year n + 1)
Profit attributable to owners of parent in fiscal year n

3. Numerical targets(billion yen)

FY2018 (Results)

FY2019 (Forecasts)

FY2021 (Targets under MTMP2019)

Net sales

500.5

510.0

540.0

Operating profit
Ordinary profit

30.1
31.1

31.0
30.5

37.5
37.0

Profit attributable to owners of parent

20.6

20.0

24.0

ROCE(%)

10.8

10.3

11.4
Nippon Light Metal Holdings Co., Ltd. 9

The NLM Group’s CSR promotion system, selection of materiality, and approach response to climate change

Mid-term CSR promotion plan of the NLM Group (2019 to 2021)

NLM Group’s CSR promotion system
At the NLM Group, the CSR Committee, which is chaired by the president andCEO and consists of group company presidents and officers in charge of
operating their respective businesses, meets two times a year. The CSR
Committee discusses important CSR-related issues such as SDGs and climatechange. The NLM Group’s CSR activities are carried out based on the CSR
promotion plan adopted by the CSR Committee. In addition, members from
related departments gather for monthly CSR meetings, where they check the
progress of the CSR promotion plan and take other initiatives in cooperation with
the CSR Committee. Further, issues discovered through the initiatives arereported to the Board of Directors of Nippon Light Metal Holdings two times ayear and as necessary.
Each group company and segment of the NLM Group assigns a CSR Leader
and a CSR Promoter, who are responsible for overseeing and promoting CSR
activities. CSR Leaders and CSR Promoters carry out their own CSR activities
by communicating with stakeholders in the business of each company orsegment. This has resulted in the creation of some products in response tosocial need.

What We Want to Be (in 2030)

E

The
environment

Customers

At the NLM Group, we have begun to select material issues that
we must resolve to continue growing as a sustainable,
groundbreaking innovator of aluminum and beyond. For the
MTMP2019, we tentatively selected safety, quality, and theenvironment, which are the three core elements ofmanufacturing, as our material issues.
Safety includes employee safety, product and service safety,
business continuity safety, including that of our business partners,
safe town development, and the safety of food and healthcare.
Quality means product and service quality. We will observe
quality standards and ensure compliance.
The environment refers to the reduction of the environmental
impact of our business activities and our supply chain, including
the mining and smelting process, and contributions to society
enabled by aluminum products that are lightweight and strong.
Globally, business enterprises are expected to handle climatechange risks and opportunities and contribute to achieving
SDGs. As mentioned in the Message from the CEO, aluminum
involves both risks and opportunities concerning the climatechange problem. We will have sincere discussions withstakeholders about what we should do to reduce the risks, tomake use of the opportunities for business expansion, and toachieve the group’s growth.

Business
partners

S

Employees

A page from the presentation material for the Nippon Light Metal Holdings mid-term
management plan

Formulation of a mid-term CSR promotion plan
In February 2019, the NLM Group adopted a mid-term CSR promotion plan at
the 16th CSR Committee meeting. This plan differs from previous ones in thefollowing four major points.
First, while the plan was renewed every year before, the latest plan wasformulated as a three-year plan starting in FY2019, just like the mid-term
management plan. As a result, major issues are also included in the targets ofthe plan.
Second, while previous plans focused on risk mitigation, the latest plan also
includes initiatives for opportunities. This reflects the fact that initiatives fortackling risks have been enhanced sufficiently, and also our intention to focus ourefforts on initiatives taken through our businesses, which is what CSR activities
should be under normal circumstances.
Third, we set What We Want to Be in 2030. We clarified what we should do
now by imagining the future, or what we want to be ten years from now.
Finally, we reorganized initiatives on a stakeholder-by-stakeholder basis, as
they were previously classified into categories such as the environment andquality. This reflects our belief that we should include dialogue with stakeholders
in the process of solving these issues.
10 Corporate Social Responsibility Report 2019

Excellent environmentally friendly products andservices are provided to society.
Environmental activities aimed for sustainable society
are making progress.

Environmental risks are managed.
Environmental human assets are developed in awell-planned manner.
Communications about environmental issues are
made properly.
Activities for achieving SDGs are carried out underthe ISO 14001 management system.

Products and services with consistently high quality
are provided.
Customer needs are identified accurately, andproducts and services which are better than what
they need are provided.

Build a quality assurance system in each one of thephases from product/service development tocommercial production.
Reinforce the system for managing products which
are regulated by laws and regulations.
Build quality assurance systems for overseas
production bases.
Improve the capabilities of quality control/quality
assurance staff.

Products and services are procured at the lowest
sustainable costs.
Products and services with the highest sustainable
quality are procured.
Necessary amount of products and services areprocured at all times.
Doors are always open to suppliers.
Good communications with suppliers have been
established.
Risks of business suspension are cooperatively
addressed.
Products and services with low environmental impact
are procured.
Procurement is made in consideration of humanrights.

Promote mutual understanding with suppliers.
Identify and address risks of business suspension.
Assess environmental impact and adopt highlyevaluated products and services.
Assess human rights risks and adopt highlyevaluated products and services.

NEQRES® quakeproof ceilings were developed after the Great
East Japan Earthquake.
None of the ceilings fell during the 2016 Kumamoto earthquakes.

Materials selection issues and response to climate change risks and opportunities

Local
communities
and society

G
A CSR Committee meeting

Shareholders
andinvestors

Mid-term plan (FY2019 to FY2021)

SafetyAll the company’s workplaces are free of workplace
injuries.
All the company’s workplaces allow employees towork with good physical and mental health.

SafetyImprove the level of each activity to eliminating
workplace injuries.
Make sure that no employee is absent from work
due to a mental health problem.

Labor practices
The company allows its employees to work with vigor
and enthusiasm, find their jobs rewarding, and feel
their own development.
The company allows its employees to feel that they
are contributing to society and take pride inthemselves.
The company evaluates, praises, and appreciates
employees’ contributions in a fair manner.
The company takes advantage of diversity without
discrimination based on gender, nationality, age, or
any other attributes.
The company is free of harassment, and its
employees are considerate of each other.
The company allows its employees to choose diverse
workstyles to keep a good work-life balance.

Labor practices
Promote employment and active participation ofdiverse human assets.
Promote work-life balance based on workstylereform.

The company is popular within local communities.
The company contributes to the development of local
communities and is needed by them.
The company attracts excellent local human assets.

Continue to develop communication with local
communities.
Establish a corporate brand in local communities
through appropriate distribution and return ofprofits to them.
Maintain and improve local biodiversity.
Play an active role in developing local
manufacturing human assets.

Shareholders’ and investors’ understanding of thecompany has been deepened, and the company’s
shares are managed and held by them for the longterm.

Disclose information demanded by investors on atimely basis and promote their understanding of thecompany.
Communicate the appeal of Team NLM byemploying diverse methods in addition todisclosing financial information.

Nippon Light Metal Holdings Co., Ltd. 11

Special
FeatureBuilding a sustainablewith aluminum

society

Contributing to building a sustainable
society with aluminum
Making aluminum materials sustainable

Used in various forms in our everyday life, aluminum products
have spread to every corner of society. However, the materials foraluminum products are made through a process that starts fromthe mining of bauxite, the raw material for aluminum, and includes
the smelting process, which requires a large amount of electricity.
On the other hand, used aluminum products are recycled andmade into products again.
At the NLM Group, we are striving to minimize theenvironmental impact of our activities while improving the value ofour products.

Aluminum as an abundant resource

Aluminums is the third most abundant element in the Earth’s crust
after oxygen and silicon and the most abundant among metallic
elements existing in the ground*1. It is also said that there is 50 to
75 billion tons*2 of bauxite. This is equal to 12.5 to 20 billion tonsof aluminum. There exists a sufficient supply of aluminumcompared to the global aluminum consumption of approx. 60.0
million tons/ year (excluding recycled aluminum)*3.
*1 Source: Handbook of Chemistry: Applied Chemistry, 5th ed. (Edited by the
Chemical Society of Japan/ Published by Maruzen)*2 Source: Data from U.S. Geological Survey 2007 (USGS)*3 Source: JOGMEC, Mineral Resource Material Flow 2017

Risks of using aluminum

Many bauxite ore deposits exist in tropical rainforests and areasthat used to be tropical rain forests. Because native forests arecleared in areas where bauxite is mined, use of aluminum carries
the risk of reducing forest resources.

12 Corporate Social Responsibility Report 2019

In addition, a large amount of electricity is consumed in theprocess of smelting aluminum. Approx. 9.2 tons*4 of CO2 isemitted to produce 1 ton of aluminum.

BauxiteAlumina

AluminumRed ore from which aluminumis madeBauxite is put into a chemical
and melted, and then alumina
is removed.

Aluminum is made byremoving the oxygen fromalumina.

*4 Source: Japan Aluminium Association, Tei-tanso Shakai Jikko Keikaku (Action
plan for building a low-carbon society)

Benefits of using aluminum

Aluminum products are used in a diverse range of fields. The useof aluminum enables the manufacture of lightweight transportationequipment such as automobiles, trucks, and railway vehicles,
which ensures high fuel efficiency and low CO2 emissions fromuse of such equipment. In addition, aluminum foil packages
enable us to sustain the quality of food and drugs for extended
periods.
Further, aluminum is resistant to corrosion, contributing to theextended service lives of houses, office buildings, and otherbuildings, as well as structures such as bridges. Aluminum also
features superior recyclability. It can be used again and again justby melting it. Recycling aluminum requires only 3% of the energy
needed to produce new aluminum. This means that the morerecycled aluminum is used, the less new aluminum needs to be
produced through the smelting process, which emits a large
amount of CO2.

Building a sustainable society with aluminum

Aluminum products have been used widely in society because of
the benefits of their use, such as enabling lightweighttransportation equipment and lengthening the service life ofbuildings. On the other hand, the process of manufacturing
aluminum products involves the destruction of nature and theemission of large quantities of CO2. The NLM Group understands
both of these aspects of the material and works to improve thevalue of its products and reduce their environmental impact, tocontinue to contribute to building a sustainable society.

Aluminumproducts

Melting andprocessing

Used
products

Aluminum is melted
into a sticky mess andthen processed invarious ways into
products.

Recycling

Aluminum products at
the end of theirproduct life

Segregation
andcollection
Used aluminumproducts are segregatedand collected asresources.
Nippon Light Metal Holdings Co., Ltd. 13

Special
FeatureBuilding a sustainable society with aluminum

Helping to build a sustainable society
through recycling
The group also recycles scrap special alloys as valuable resources.

Nippon Light Metal Co., Ltd. exports special alloys cast at its
Kambara Complex to Thailand in the form of coiled plates. In
Thailand, the alloy plates are rolled at Nikkei Siam Aluminium Ltd.,a group company, and sold locally as a material for automotive
heat exchanger fins.
At Nikkei Siam Aluminium Ltd., scrap is generated in theprocessing. However, because it contains special elements, it was
not possible for them to convert the scrap into any other material.
Scrap is normally recycled back to the original material, which isenvironmentally friendly because the addition of new elements or
the use of new aluminum ingots is not required. In the case of
Nikkei Siam Aluminium, however, sending the scrap back to the
Kambara Complex without changing its form had a cost problem
attributed to low loading efficiency. Therefore, the company built asystem in which the scrap is cast into slabs sized to ensure hightransportation efficiency and sent back to the Kambara Complex
in Japan for recycling. The company began these operations in2017. At present, around 100 tons of scrap is recycled in thissystem every month, enabling Nikkei Siam Aluminium to reduce
its annual CO2 emissions by approx. 10,000 tons (an estimate by
Nippon Light Metal Co., Ltd.).

Interview with a procurement manager at
Nikkei Siam Aluminium Ltd.
Could you tell us the challenges you faced and thecreative measures you devised in building this system?
We faced two problems in the process of building thesystem.
First, we went through a trial and error process todetermine the size of the slabs into which the scrap was
to be cast. We had to ensure high efficiency in loading theslabs into containers while also optimizing the size of thecasting equipment.
The second problem was the mixing of other scrap
materials into the casting, which resulted in non-standard
slabs. To prevent this, we managed the scrap so that
other materials would not be mixed in before the scrap is
put into the furnace. We also measured the compositionof the scrap before casting it. We introduced a compact
measuring instrument for this purpose.
We are delighted that we were able to solve these
problems and build a system that has allowed us toreduce inventory and also cut costs.

Ms.

We aim to build a new recycling system (horizontal recycling of aluminum vehicles).

Aluminum scrap can be melted and recycled easily because themelting point of aluminum is low. Ideally, a material should berecycled into the same product, as in the case of the can-to-can
recycling. This is called horizontal recycling. In the majority ofcases, however, a material is not necessarily recycled into thesame product because of quality or other issues, including themixing in of other materials or metals, such as iron, in the
distribution process. For example, aluminum window scrap,
generated in housing demolition, cannot be recycled straight into
aluminum window material because it has non-aluminumcomponents, such as wire screens and screws. However, it is noteasy to remove wire screens and screws, segregate them, andtransport the aluminum parts to a recycling plant without mixing
them with other materials. Therefore, the scrap becomesdegraded, and its applications are narrowed every time it isrecycled.
In response to this problem, at the NLM Group, we have madehorizontal recycling a development theme at the Nikkei Researchand Development Center, our R&D base. We are studying
horizontal recycling from a number of perspectives, including
methods of sorting scrap, methods of removing impurities frommelted aluminum, and product design that ensures easy
dismantling and disassembly. As part of these initiatives, we areworking on a project to enable horizontal recycling of aluminum
railway vehicles jointly with the New Energy and Industrial

Technology Development Organization (NEDO) and the Japan
Aluminium Association. We have dismantled a railway vehicle,
quickly analyzed and sorted scrap from the vehicle, melted thescrap thus acquired, and produced an extruded railway vehicle
material.
Vehicle manufacturing

Railway vehicles

Scrap sorting
Extrusion

Casting

Sorted materials

A system for horizontal recycling of aluminum
railway vehicles that we aim to build

Sumontha

Assistant Manager
Procurement Department

We even use aluminum residue (aluminum dross).

Nikkei Siam Aluminium Ltd.

Slabs delivered to the Kambara Complex from Thailand

Delivery of special alloy
coils from theKambara Complex

Exported to the
Kambara Complex

Processing

Flow of therecycling system
Cast into slabs

Scrap generated inprocessing

When aluminum is melted, an oxide containing aluminum forms
on the melted aluminum. It reacts with air and becomes aluminumdross. Aluminum dross is just like the floating scum formed whencooking soup or stew. Aluminum remains in the aluminum dross,so it is squeezed out by a recovery unit. The residue that would
otherwise be disposed of in a landfill can be used as adeoxidizing* material for iron and steel. When added to melted
iron, processed aluminum dross contributes to improving yieldand energy efficiency in addition to controlling composition.
Nikkei Sangyo Co., Ltd. collects approx. 5,400 tons per year ofaluminum dross generated within the NLM Group. We thus
operate a sustainable business, in which we use all of ouraluminum by making effective use of residue generated in the
manufacturing process, thereby eliminating industrial waste to bedisposed in landfills and also improving the productivity of ironand steel.

At our Chita Plant, we produce 140,000 to 150,000 tons ofspecialty steel every month. After melting iron scrap in anelectric furnace, we coarsely adjust its composition bydeoxidizing and desulfurizing the scrap and adding alloys to it
in the ladle refining process, and then use degassing
equipment to remove hydrogen and other gas components.
We use around 350 tons of aluminum dross every month in
the process of melting iron in the electric furnace and theladle refining process. In the electric furnace, the use ofaluminum dross, which features high heat efficiency, leads tohigher yield and reduction of electricity consumption. We also
use aluminum dross to control the slag* composition, whichis essential for efficient ladle refining. High cost efficiency isanother appeal of aluminum dross. We have been usingaluminum dross for approx. 35 years, and we would like tocontinue using it.

* Deoxidizing means removing oxygen.

* Slag: A by-product generated when a metal is smelted from ores

A Message from a Customer

Mr.

Ryota Mauchi

Steelmaking Office, Chita Plant
Inspection for mixing in ofother materials

Daido Steel Co., Ltd.

Temporary storage

An electric furnace

14 Corporate Social Responsibility Report 2019

Dross taken out of the furnace

Nippon Light Metal Holdings Co., Ltd. 15

Special
FeatureBuilding a sustainable society with aluminum

We will contribute to thedevelopment of lightweight
electric vehicles withaluminum busbars.

Contributing to sustainable transportation
We contribute to reducing energy consumption by developing
high-capacity trucks
In Thailand, the retail market has continued to expand with thatcountry’s economic growth. Above all, convenience stores enjoy
growing demand due to the increase of the busy urban
population, and the number of stores has been increasing rapidly.
As in Japan, products are delivered to convenience stores bytruck. Unlike Japan, products are delivered not by large 4-ton or
8-ton vehicles, but mostly by small pickup trucks.
While the number of vehicles owned is increasing rapidly in
Thailand, infrastructure development is not keeping pace with theincrease, resulting in chronic traffic congestion, mainly in city
centers. To help address these traffic jams, a ban on the entry ofcargo vehicles into Bangkok’s city center during peak hours wasintroduced in the 1990s. In Bangkok, vehicles weighing more than
2.2 tons are not allowed to enter the city center from 6:00 to 9:00
or from 16:00 to 20:00. This is why pickup trucks, which are notsubject to the ban, are used for the deliveries.
However, because pickup trucks can only carry 1 ton of cargo,delivery frequency had to increase to meet the growing demandfor product transportation. This exacerbated traffic congestion,and there is strong demand for a vehicle which can carry morecargo than a pickup truck.
In response, Fruehauf Mahajak Co., Ltd. developed andreleased KaruBo, a lightweight dry van body for trucks. Designed
for 2-ton trucks, KaruBo trucks aren’t subject to the ban,permitting them to deliver to the city center 24 hours a day. With acargo volume 1.4 times larger than a pickup truck, and able tocarry 2.9 times the weight, KaruBo reduces the frequency ofdeliveries. In recognition of this benefit, 7-Eleven has adopted

KaruBo for its vehicles delivering products to the city center of
Bangkok.

Number of 7-Eleven stores in Thailand
11,299

7,000

8,000

9,000

10,000

5,000

First
store

1,000

1990

1998

2,000
2002

3,000

2005

2009

2013 20142016 20172019 (Year)

Source: Data from CP All Public Company Limited

Store

KaruBo, the lightweight dry van body

A Message from a Customer

In recent years, air pollution has been growing more serious
in Bangkok, and the number of days with high amounts offine particulate matter (PM2.5) has increased. I feel that many
people have become aware of the importance ofenvironmental protection. The Government of Thailand has
formulated measures for protecting the environment. It willtighten regulations on automobile exhaust gases and vehicleloads. We believe that we will see an increase in truck bodies
that are lighter but stronger than ever.
The greatest benefit of KaruBo is that it is half the weight of
conventional bodies of the same size while being just as
strong. We will continue to deliver products like KaruBo,
which enables energy conservation.

Fruehauf Mahajak Co., Ltd. responds promptly and suggests
new solutions to problems. KaruBo is stronger than othermanufacturer’s vehicle bodies while the white panels lookclean and are believed to give people a good impression of
CP All. I hope that we can continue to communicate closelywith the company.
We will unify our distribution standards. We will reduce
exhaust gas emissions by using truck loading platforms witha larger capacity, thereby reducing the frequency oftransportation. We will also take other initiatives, such as theintroduction of electric vehicles, in pursuit of higher
distribution efficiency, greater environmental protection, and alarger contribution to society.

Yuta Oyanagi

Deputy Manager
Design Department
Fruehauf Mahajak Co., Ltd.

16 Corporate Social Responsibility Report 2019

Electric and hybrid vehicles, which are increasing in popularity acrossthe globe, use large metallic electrical conductors called busbars forhigh current power distribution. Busbars are housed inside parts suchas batteries, inverters, converters, and capacitors, and between parts,
to carry current.
Most busbars currently used are copper because copper provides
a stable flow of current. However, copper has a shortcoming.
Because of its high specific gravity, copper makes the vehicle heavy.
Further, electric vehicles use large batteries and other large
electrical devices to extend driving range. These make vehicle bodies
heaver, making it difficult to extend driving range, which is a
shortcoming of those vehicles.
In response, Nippon Light Metal Co., Ltd. has developed analuminum busbar for vehicles. Aluminum busbars had implementation
issues, including their vulnerability to oxidation. We overcame theissues by developing a special plating material that prevents oxidation.
The weight of aluminum is about one-third that of copper. The
weight of an aluminum busbar is about half that of a copper busbar
needed to carry the same amount of current.
High expectations are placed on aluminum busbars ability to enable
the development of lighter electric vehicles.

Message from a Person in Charge
Busbars used most commonly were large ones, used for
power plants or for factories which consume a lot ofelectricity. We thought that smaller-sized busbars could
be applied in electric vehicles, which are gaining in
popularity, which is why we developed the PPAB
aluminum busbar. Because it is lightweight, it contributes
to the reduction the environmental impact of vehicles
which use it.
Taking advantage of these features, we will develop
diverse aluminum products, including products forelectric vehicles.
Mr.

Akihito Yoshida

Electric Material Processing
Business Unit
Rolled Products Division
Nippon Light Metal Co., Ltd.

We will reduce CO2 emissions with home delivery boxes.

Message from Development Personnel

Mr.

An aluminum busbar

Sumathe Numtong

Mr.
(second from left)

Assistant General Manager
Logistics Department
CP All Public Company Limited(the company operating 7-Elevenstores in Thailand)

The number of parcels handled by couriers is increasing rapidly due to the spreadof online shopping in recent years. In addition, the high frequency of redelivery
has increased the burden on drivers, which has become a social problem. The
development of new systems and infrastructure is needed to improve theefficiency of home delivery without losing the convenience for users.
Toyo Rikagaku Kenkyusho Co., Ltd. manufactures mailboxes. Recently,
mailboxes have been upsized to accommodate parcels, but they are not large
enough for large parcels. Therefore, development of a home delivery box, whichis large enough to receive large parcels while the user is away from home, hadbeen demanded. In the development of this home delivery box, we faced various
challenges because security needs to be ensured and the product will be installedby the front door, and therefore importance is attached to its design and size.
However, we were able to develop a product with the functionality and aesthetics
demanded by customers.
If this home delivery box is used all over Japan, the wasted labor caused byredelivery will be reduced. We believe that it will lead to reduction of the burden
on drivers and environmental impact, contributing to sustainable logistics.
Amount of CO2 emitted from trucks traveling for redeliveries
Impact on CO2 emissions Extra 420,000 tons emitted every year
3.6 billion parcels x 0.58km/parcel x 25% x
Number ofparcels handledby couriers(FY2014)

Distance traveled by acourier per parcel(excluding arterialtransportation)

Impact on labor productivity

Redelivery
rate

1t
The average
load
assumed tobe 1 ton

x 0.8kg-CO2/t-km = 420,000 t CO2
CO2 emission
intensity of compact
vehicles used fordeliveryLabor equivalent to approx. 180 million hours per year and90,000 workers* are consumed for redeliveries.

3.6 billion parcels x(970,000 times / 4.1 million parcels)x0.22 hours x180 million hours/year =Labor equivalent to 90,000 workers*
Number of
Total number ofparcels handled times of delivery to
by couriers
absent recipient(FY2014)(FY2014)

Total
number ofcargoes

Hours worked fordelivering one
parcel* Based on the assumption that the
average workday is 8 hours and numberof days worked per year is 250.

A home delivery box

A Message from a Customer
We began to outsource the manufacturing ofsheet-metal products to Toyo Rikagaku Kenkyusho
Co., Ltd. about 35 years ago. The company has
since been supplying high-quality products to us
stably with integrated production.
A home delivery box is a kind of locker that cansecure delivered parcels for the resident. Because
it saves the trouble of having to redeliver parcels or
wait for their delivery, it is highly appreciated in thisera of online shopping and is attracting attention
again in the market.
Home delivery boxes have been defined as
equipment for reducing burden of housework
under the government’s point program forpromoting and supporting the acquisition of
next-generation homes that are energy-saving,
quake-resistant, and/or barrier-free, and/or
contribute to reducing burden of housework. We
therefore expect the further growth of demand forhome delivery boxes.

Mr.

Atsushi Yabe

General Manager,
Technology
Development DivisionTajima Metal Work Co., Ltd.

Source: Ministry of Land, Infrastructure, Transport and Tourism (2015), Report of examination of
the promotion of the diversification of methods for receiving home delivery parcels aimed
at reducing redeliveries
Nippon Light Metal Holdings Co., Ltd. 17

Special
FeatureBuilding a sustainable society with aluminumContributing to building a sustainable living
environment
We deliver electric power safely.

Heat barrier

Waterproofness
Exterior wall of a home

Indoorspace

OPP film

Aluminum foil

Permeable, waterproof, non-woven fabricOverhead electric lines and a steel tower

Composition of the permeable water-proof sheet

Heat insulating material for housing

Wire rod for overheadelectric lines(Φ 9.5mm, a 2-ton coil)

Waterproof sheets using vapor-deposited aluminum films arecommonly used for exterior walls of houses. However, thealuminum part of a vapor-deposited aluminum film is oxidized anddegraded mainly by humidity, which had made it impossible toobtain sufficient durability. In response, Toyo Aluminium K.K.
developed the Toyal Thermo Reflector that takes advantage ofaluminum foil’s properties.
This product uses perforated aluminum foil, which not only
makes it water-proof, permeable, and breathable but also keeps
this permeable water-proof sheet reflective to infrared for a longtime.
In summer, the Toyal Thermo Reflector maintains room
temperature from rising by reflecting radiation heat (infrared) fromthe outside. In winter, the product keeps the room temperaturefrom declining by reflecting heat radiation from indoor heaters.

Interior wall of a home

Aluminium Wire Rod Co., Ltd. manufactures aluminum wires used
for power transmission lines, with a domestic market shareexceeding 50%. There are two types of power transmission lines,
one made of copper and one made of aluminum, each with its
own advantages. Copper power transmission lines feature highconductivity and therefore are capable of transmitting more
electricity than aluminum ones. Aluminum lines have lower
conductivity than copper ones. However, they are lighter in weight
than copper lines and therefore are less burdensome to the power
poles and steel towers supporting them, allowing them to be used
longer than ones supporting copper cables. In addition, aluminumis an accessible material because its price is stable and lower
than the copper.
Reflecting these advantages of aluminum, many of the powertransmission lines in Japan that were installed in or before the1960s and are now being overhauled are being replaced withaluminum lines.
In addition, Aluminium Wire Rod Co., Ltd. recycles aluminum
power transmission lines that have been replaced during overhauls.

We will extend the service life of buildings and promote thedevelopment of towns where we can continue to live for a long time.

Moisturepermeation

Wind
protection

Outdoor space

We deliver water safely.
Perforation

The water we use every day is supplied by water pipes. Manywater pipes were installed more than 50 years ago, and someaging pipes have corroded. The corrosion will eventually cause
water leakage or a water outage resulting from the leakage. In
addition, a major earthquake may lead to large-scale damage of
the water pipe networks. This is likely to cause a prolonged water
outage and serious damage to people’s lives.
Nippon Light Metal Co., Ltd. and Nikkei Sangyo Co., Ltd. havedeveloped an aluminum alloy thermal spraying wire jointly with
Kurimoto, Ltd. This product is a metallic coating that prevents the
corrosion of water pipes. Different metals (aluminum and zinc) are
sprayed onto the pipe at the same time to create a thermal spraycoating that is resistant to corrosion. The coating permits water
pipes to be used for more than 100 years*.
* An estimate calculated by Japan Ductile Iron Pipe Association based on the
results of a survey of actual products and those of a laboratory experiment.

Coating

Ductilecast-iron pipe

Toyal Thermo Reflector

Zinc wire
Compressed air

ObjectWe will further the spread of sustainable solar power generation

Aluminum wire
How the zinc-aluminum pseudo
alloy is thermally sprayed

Message from Development Personnel
I was in charge of suggesting and assessing the alloy’s
composition for the aluminum alloy thermal spraying wire. We
obtained many unexpected results and had great difficulty
determining the composition. However, as a result oftenacious efforts, we successfully developed a thermal
spraying wire with excellent durability. We will continue
striving to develop products that will contribute to building
sustainable social infrastructure.

Mr.

Akira Kaneko

Surface Innovation Group

Corrosion proofing ofa ductile cast-ironpipe’s exterior
surface

Nikkei Research & Development Center

Surfacethermal-sprayedwith a pseudo
alloy

Cross-section of a residential exterior wall using the Toyal Thermo Reflector(for illustrative purposes only)

Nippon Light Metal Co., Ltd.

The growing demand for renewable energy has led to the rapid
spread of solar power generation systems, both for industrial andconsumer use, as a key part of efforts to meet the demand forsustainable energy.
The NLM Group provides a wide variety of products related tosolar power generation, including an aluminum solar panel frame(ALSOL®), ceramic materials for solar cells, and materials for solar
cells such as a back sheet (ToyalSolar®) and aluminum paste(ALSOLAR®). Toyo Aluminium K.K. developed the Hane® Module,
a compact, lightweight solar cell module aimed at accelerating the
spread of solar power generation further. The company
succeeded in reducing the weight of this module by half
compared to conventional modules. This enables the Hane®
Module to be installed in various places where installation of amodule was previously difficult, due to the load capacity ofbuildings, such as factory roofs, warehouse roofs, wall surfaces ofbuildings and large-scale facilities, parking areas, paths, bus
stops, taxi stands, roofed rest areas in parks, and coin-operated
parking lots. Further, used with ENESTAND® (a solar car port),
Hane® Modules contribute to the spread of the charging
infrastructure for electric vehicles.

Ductile cast-iron water pipe
ENESTAND® is a registered trademark of Sky Japan
Corporation.

18 Corporate Social Responsibility Report 2019

Nippon Light Metal Holdings Co., Ltd. 19

Special
FeatureEnvironment

Building a sustainable society with aluminumContributing to building a sustainable future
Wishing to reduce traffic accidents

Most center dividers of temporary two-lane sections, whichconstitute approx. 30% of toll expressways in Japan, are rubberpoles. Such sections have a high risk of accidents caused by cars
crossing into the opposite lane, and these accidents are likely to
be serious, keeping roads blocked for a long time.
To reduce traffic accidents in such sections of toll expressways,
Sumikei Nikkei Engineering Co., Ltd. is developing a fence fordividing roads. The fence consists of two aluminum alloy beams
and posts to which the beams are attached. The posts areanchored to the road with bolts.
This fence can be installed even in narrow areas because its
installation width is narrow. Additionally, the height of the posts
ensures good front and side visibility, giving drivers a sufficient
range of vision. In addition, because its posts are designed to beconnected with bolts, the fence can be installed by humans
anywhere, without using heavy machinery. Widespread use of thisfence is expected to reduce accidents.

Message from Development Personnel
In this development project, the application of ouraccumulated experience and technologies was not enough,and we had to think more flexibly than before. While thedesign of the posts, which are still too weak, and theacquisition of the asphalt’s physical properties remain issues,
we are proceeding with development by repeating crashtests again and again to find out asphalt’s physical properties.
We will continue product development to help reduce traffic
accidents.
Mr.

Norikazu Tomioka

Head of the New Product Development TeamSales Planning Division
Sumikei-Nikkei Engineering Co., Ltd.

The Environment

Tackling the climate change
problem to build a sustainable
society
Environmental management system
At the NLM Group, we fully recognize the impact that ourbusiness activities may have on the environment. We havedeveloped an environmental policy, under which we are taking
initiatives to realize sustainable businesses and a sustainable
society voluntarily and proactively, beyond complying with related
laws and regulations.
The NLM Group Environmental Committee deliberates anddecides on the core measures related to the group’s environment
management. The committee is chaired by the president of
Nippon Light Metal Holdings Co., Ltd., and consists of company
officers, presidents of major NLM Group companies, and othermembers.
Matters determined by the Environmental Committee are fleshedout by the environmental control segment, which serves as thecommittee’s secretariat, and are made known at meetings ofenvironmental practitioners from each site* before actions are taken.
*Sites: Scope of application of the environmental management system

Environmental management system
Board of Directors of Nippon
Light Metal Holdings Co., Ltd.
President of Nippon Light Holdings Co., Ltd.
Person in charge of environmental protection
from the Central CSR and Audit Office

Creating industrial infrastructure for the futureGroup Executive Committee
Operation

Environmental Committee(Chair: President of Nippon Light Metal Holdings Co., Ltd.)

ControlGroup companies’ sites

At the NLM Group, we are engaged inresearch and development of an aluminumalloy as a material for 3D printers, believingthat we can make maximum use of thegroup’s powder manufacturing technologies
and rapid solidification technology.

Interview with the Leader of the 3D Project
In what fields is aluminum expected to be applied as a 3D printer material?
It is expected to be applied in every industrial field. Aluminum enables 3D printingof objects in shapes that could not be reproduced with conventional processing.
Moreover, the rapid solidification of objects, made by melting and sintering a
powder alloy with a laser, enables unprecedented alloy characteristics. We
believe that the use of alloy development technologies, for which we takeadvantage of the group’s expertise, and other technologies will greatly expand
the possibilities of aluminum to various fields. These technologies will also enable
lighter weight and higher functionality than before. We believe that our efforts willcontribute to society in regards to the environment, in the form of developmentof parts with high energy-saving abilities.
What is the hardest part of the 3D printer business?
Because 3D printing is a new technology, precedents and related literature arelimited. In addition, there is no established standard. We therefore need tobuild everything from scratch. It is just like cultivating a vast wilderness fromscratch, but I feel that’s what makes it greatly rewarding.
Mr.

Yasuhiro Kubota

Leader3D Project
Nikkeikin Aluminium Core Technology Co., Ltd.

A 3D-printed sample
20 Corporate Social Responsibility Report 2019

Development of environmental human assets
At the NLM Group, we run various training programs to develop
environmental human assets in accordance with the nature of thework at each site.
Nikkei Logistics Co., Ltd. provides training on compliance withstandards for the collection and transportation of waste, creation ofindustrial waste ledger sheets for and storage of entrusted waste
and other practices, in addition to the legal obligations of waste
generators stipulated by the Waste Management and Public
Cleansing Act. In addition, Nikkei Research and Development
Center provides training on how to clean up used chemicals andemergency response training for chemical leaks because a wide
variety of chemicals are used in R&D and analysis operations.
Environmental training programs that are common across thegroup include training sessions on laws and regulations, training todevelop ISO 14001 internal auditors, and participation inenvironmental audits. The training sessions on laws and regulations
are held twice each year. In FY2018, they were held under thethemes of the Soil Contamination Countermeasures Act and the
Waste Management and Public Cleansing Act. We hold a training
session to develop ISO 14001 internal auditors once a year, to giveas many employees as possible an opportunity to look at the fields
they work in from the viewpoint of environmental protection. In
FY2018, 50 employees attended the session. The “participation inenvironmental audits” mentioned above refers to environmental
practitioners participating in the environmental audits of other sites,
and not just their own. This is aimed at deepening theirunderstanding of the environment by having them learn how to walkaround and look at sites, key points for identifying issues, key pointsof countermeasures, and other matters on site. In FY2018, there
were 34 total participants while the number of environmental
practitioners was 27 (rate of participation: 126%).

Meeting of environmental practitioners* 47 sites of 25 companies in total (scope of environmental management inJapan)

Environmental audits
At the NLM Group, we conduct regular environmental audits of
60 sites in Japan and other countries, separately from the ISO
14001 audits, with the environmental control segment of thegroup playing a leading role. Points checked in environmental
audits include the status of compliance with laws and regulations,system for handling emergencies, training given at each site, andinitiatives taken to preserve biodiversity.
In FY2018, we conducted environmental audits at 15 sites inJapan and seven overseas sites and pointed out 65 problems. The
problems include the failure to fulfill storage standards based on
the Waste Management and Public Cleansing Act and insufficient
surveys on equipment containing PCBs, and corrections weremade accordingly. We also discovered good practices, such as
writing the planned date of the next inspection on the storage tankitself to ensure theinspection is conducted
as planned, thereby
preventing
environmental problems.
These examples wereshared at meetings ofenvironmental
practitioners and appliedhorizontally to reduce
environmental risks.

Development of personnel with public qualifications
related to the environment
At the NLM Group, we aim to develop human assets who can
respond promptly to moves to revise environmental laws andregulations. For this purpose, we encourage our employees toobtain public certifications related to the environment, beyond
fulfilling legal requirements on the number of staff members withsuch qualifications.
Public qualifications related to the environment obtained by employees
Number of
employees
who haveobtained it

Legally required
number ofqualified
employees

Cashbonus*(thousand yen)

Air

96

26

100

Water

128

28

100

Noise

51

16

50

Vibration

46

18

50

Dioxins

23

14

50

Name of qualification

Manager in charge ofpollution control

Ordinary particulates

45

4

—

Engineering manager for industrial waste treatment facilities

9

3

—

Manager in charge of
specially controlledindustrial waste

Waste other than infectious waste

153

32

—

Infectious waste

5

4

—

Qualified energy manager Heat and electricity

96

19

100

Certified environmental measurer Concentration-related measurement

2

0

100

* Amount paid by Nippon Light Metal Co., Ltd.

An environmental audit
Nippon Light Metal Holdings Co., Ltd. 21

Environment

The Environment

Meetings of environmental practitioners at overseas sites
At the NLM Group, we have been holding a meeting ofenvironmental practitioners at one of our overseas sites every
year since FY2016. In FY2018, we held the meeting in Thailand(at the Pathumtani Factory of Nikkei Siam Aluminium Limited) in
October, with the participation of 18 environmental practitioners
from five sites, representing three companies.
In the meeting, the participants had a lively Q&A session anddiscussions about energy conservation and the prevention of air,water, and soil pollution. The meeting has also led to thedevelopment of a network of environmental practitioners fromthese sites. Environmental information is shared across the
network, leading to the reduction of environmental risk.

Material balance (FY2018)

Greenhouse gas emissions including Scope 3 emissions (FY2018)(Thousand tons-CO2)
Category 2 to 7

INPUT

OUTPUT

Fuels

Greenhouse gases

6.2PJ

12%

2

PlantsNOx

10.4PJ

Scope 1560 tons

products

28.5 mil. m
COD

Raw materials

601thousand tons

Final disposal (landfill)

Water*

23.9 mil. m

Amount of recycling/ reduction

Initiatives for reducing greenhouse gas emissions
Greenhouse gas emissions from the NLM Group
Greenhouse gas emissions from the overall NLM Groupdecreased 43 thousand tons CO2 year-on-year, to 885 thousand
tons CO2. Emissions in Japan decreased 56 thousand tons CO2
year-on-year, to 748 thousand tons CO2 while emissions from ouroverseas sites increased 12 thousand tons CO2 year-on-year, to
137 thousand tons CO2.

600

Japan (Scope 1)

Japan (Scope 2)

796

804

512

513

Overseas

747

768

440

481

306 98287 127 285 135 291 125 286 137

2014

2015

748
462

400

11

5
0

10

3

3

0

0

2015

2016

2017

2018 (Fiscal year)

7
1
2014

16
4

* Complaints: Number of complaints (about odor, noise, or the similar event)lodged by external parties* Accidents: Environmental issues that have an impact outside the site (suchas leakage of oil or chemicals)

Local residents tour factories(Left: Riken Light Metal Industry Co., Ltd., Right: Tokura Plant of Nikkei MC
Aluminium Co., Ltd.)
22 Corporate Social Responsibility Report 2019

Reduction of greenhouse gas emissions: target and results (Japan)
The NLM Group aims to reduce the greenhouse gas emission
intensity per unit of sales to 1.82 tons CO2/million yen by FY2030.
The result for FY2018 was 1.87 tons CO2/million yen. This
mainly reflects our energy saving activities, a reduction of energy
consumption attributed to reduction in production, and thedecline of the CO2 emission factor for electricity.

(Tons CO2/million yen)
3

2.13

2.09

2.19

2.09

2

200
0

2016

2017

2018 (Fiscal year)* Boundary (Japan): 29 consolidated subsidiaries in Japan* The following CO2 emission factors were used for the calculations.
Electricity: The CO2 emission factor with T&D losses of each previous fiscal
year announced by the Federation of Electric Power Companies
of Japan and the Electric Power Council for a Low Carbon Society
Fuel:
CO2 emissions as per heat value and calorific value for each fuel,which are set forth in the Ministerial Ordinance for Calculation ofGreenhouse Gas Emissions Associated with Business Activities ofSpecified Emitters2* CO emissions associated with the hydroelectric power generated at theKambara Complex of Nippon Light Metal Co., Ltd. are calculated with theabove CO2 emission factor for electricity for each fiscal year.
* The target and actual values do not include emissions caused bychlorofluorocarbons and their alternative.
* Boundary (overseas): 14 overseas consolidated subsidiaries (out of 24 intotal)* CO2 emissions from our overseas sites related to electric power were
calculated by using the latest CO2 emission factors of the respective
countries shown in CO2 Emissions from Fuel Combustion 2017 from IEA.

Message from a Person in Charge
I am a part of the Motivity Section, in charge of managing
the utilities of the Shimizu Plant. The introduction of acogeneration system began to be discussed about four
years ago with the goal of reducing energy costs andenergy consumption. The installation work began in 2017,
and we started operating the system in January 2019.
Since the system began operating, we have been
exchanging opinions daily with people in the field, aiming
for stable operation with optimal efficiency. We are learning
a lot. All of us work hard daily with a strong sense of
responsibility, aware that a problem with the cogeneration
system could shut down the entire plant, and a strong
sense of our mission to advance energy conservation at
the Shimizu Plant.

1.82
1.87

TargetMr.

Tatsuya Imai

1

Motivity Section, Equipment Department0

Nippon Light Metal Co., Ltd.

Shimizu Plant
2014

2015

2016

2017

2018

2030 (Fiscal year)

Greenhouse gas emissions(Thousand tons CO2)

800

10

the use of energy including electricity
Scope 3: Indirect greenhouse gas emissions by the NLM Group in its supply
chainGreenhousegas emission intensity per unit of sales (Japan)
4

Number of environmental troubles that occurred

15

Cogeneration system* Water: Seawater intake is excluded.

(cases)20

Accidents

3,500 tons

Recycling

48,400 tons

1,000Complaints

105 tons

Customers

3

At the NLM Group, we have developed and operate a quick
reporting system in Japan and overseas to respond promptly toenvironmental problems.
In FY2018, we received 16 environmental complaints*1 (four inJapan and 12 overseas). For each complaint, we take emergency
countermeasures and institute measures to prevent recurrence,with the cooperation of the people from the site and theenvironmental control segment. We also reduce the risk ofrecurrence by extending the countermeasures to other sites inJapan and other countries that have equipment similar to thatinvolved in the complaint.
In addition, we regularly hold environmental briefings for local
residents at each site to disclose the results of the measurementof water, atmosphere, and the similar elements, explain ourenvironmental measures, and give them a factory tour. We takethese and other measures in our efforts to disclose information topeople from local communities and exchange opinions
proactively with them.
In FY2018, there were no lawsuits, fines, or forfeits related tothe environment. We also achieved zero environmental
accidents*2 for the second consecutive year.

Scope 3

Scope 2: Indirect greenhouse gas emissions by the NLM Group attributed to3

Environmental accidents and emergency responses

Scope 2Category 1

Scope 1: Direct greenhouse gas emissions by the NLM Group

Wastewater

The meeting of environmental
practitioners held in Thailand

2,035
70%

379 tons
Aluminum and aluminum

Scope 3

2,920

SOx

Electricity and steam

An environmental audit in Thailand

18%

885 thousand tons CO

TOPIC: Introduction of a cogeneration system
The Shimizu Plant of Nippon Light Metal Co., Ltd.
manufactures aluminum hydroxide and alumina, and theprocess demands a large amount of electricity and steam.
In the past, the plant used an in-house power generator
fueled by heavy oil, emitting large amounts of greenhousegases. As a solution to this issue, we introduced acogeneration system and began operating it in January
2019.
A cogeneration system uses an engine fueled by utility
gas to generate electricity, and at the same time, generates
steam and hot water using waste heat from the engine.
The introduction of this system enabled us to reduce
emissions by approx. 3,400 tons CO2 in the six months toJune. We expect it to reduce emissions by approx. 7,000
tons CO2* for the year.
Some of the hot water from the cogeneration system isstill unused, and we plan to use it for manufacturing
process of other products in the future, aiming to achieve
further energy use efficiency and further reduction ofgreenhouse gas emissions.
* This is based on the assumption that annual operating time is 8,400
hours (350 days per year). The CO2 emission factor used for the
calculation is the actual CO2 emissions in FY2017 (final value) that
was announced by the Electric Power Council for a Low Carbon
Society.

Initiatives for efficient use of water
At the NLM Group, we take initiatives to use water efficiently.
Toyo Precision Appliance (Kunshan) Co., Ltd., located in
Kunshan City, China, has drainage facilities at two plants, fromwhich approx. 90 to 140 tons/day of water was discharged during
the day time. We have reduced it to approx. 70 tons/day by
expanding the reverse osmosis membrane water purifier tofacilitate water recycling and by taking other initiatives. We haveensured zero water discharge at night by taking measures suchas adjusting production.

Reverse osmosis membrane water purifier used at Toyo Precision Appliance

Nippon Light Metal Holdings Co., Ltd. 23

SocialSocialSafetySafety comes before
anything else.

Safety comes before anything else.

Workplace injury trends
Japan

Lost time injuries

63

Non-lost-time injuries

66

58

Assuring the quality ofgroundbreaking products
and services
Positioning the safety-first principle as thebasic policy of the mid-term management plan

At the NLM Group, we conducted activities for safety and healthin FY2018 under five policies in addition to the slogan, “Based on
the recognition that safety and health form the basis of acompany’s existence, the overall group will make concerted
efforts to ensure the safety and health of all employees andpeople in local communities, with labor and management
working as one team, aiming to improve the level of safety andhealth and achieve zero workplace injury.”
Despite our efforts, the number of accidents increased
significantly from the previous year, both in Japan and overseas
in 2018.

64

At the NLM Group, we have positioned the safety-first principle,
a measure for reinforcing our management foundation, as thebasic policy of the medium-term management plan that started
in FY2019 (MTMP 2019), to further clarify the group’s policy,
safety comes before anything else, and effectively communicate
the top management’s determination.
Human assets are the foundation of business operations, andprotection of the lives and health of workers is essential for thesurvival of a company. All officers and employees will unerringly
observe the policy that safety comes before anything else, of
which our top managers will clearly remind us at the onset of
their messages and speeches. Thus, we will create safe
workplaces, thereby achieving zero accidents, in our efforts toensure stable production activities and improve our businessperformance based on such activities.

43
14

13

2014
Outside Japan

9

2015

2016

Lost time injuries

2017

4

8 9

2018

9
5

5

2017

2018

A page from the Nippon Light Metal Holdings
mid-term management plan presentation materials

1
2014

2015

2016

Quality assurance and control system
Board of Directors of Nippon
Light Metal Holdings Co., Ltd.
President of Nippon Light Holdings Co., Ltd.
Central Product Safety & Quality
Assurance Division(Year)Taking this situation seriously, we reflected on our activities andsuspected that our safety and health policies had become amere façade instead of being truly instilled in employees. We
simplified our basic policy on safety so that it could be easily
incorporated by employees. We also revised our safety andhealth policies with the goal of communicating the thoughts ofthe top management directly to employees.
Under the basic policy, safety comes before anything else, allofficers and employees are working as one to prevent workplace
injuries.
We have also translated the safety and health policies into
Chinese, Thai, and English to enable them to take root at ouroverseas business locations. Thus, all NLM Group companies
take part in safety activities.

Operation

Quality Committee(Chair: Director in charge of quality assurance)

Appointment ofTraining on safety and healthAt the NLM Group, we position the development of humanassets who promote safety activities as an important task, andwe are focusing our efforts on the safety training of employees.
In FY2018, we conducted internal training, including on thesafety management system, on risk assessment, and special
statutory training. Believingthat learning safety skills andaccumulating safetyknowledge is important foreliminating accidents, we are
increasing human assets who
can provide training andpromoting human asset
development.

Ensuring the independence of quality assurance
departments
To ensure the independence of quality assurance departments,
we established the Central Product Safety & Quality Assurance
Division (headed by the director in charge of quality assurance)
under the direct control of the president of Nippon Light Metal
Holdings Co., Ltd., as an organization that directly oversees thequality assurance departments of all companies and segments.
Reporting of serous quality-related matters
At the NLM Group, in the event of a serious quality problem suchas a recall or a defect that may cause physical injury, information
about the problem is provided promptly to the overall groupregardless of who is responsible for it.
In FY2018, eight problems were reported.
Number of serious quality-related matters that were reported
Number of prompt reports

8

8

2015

Screening Committee Meeting that evaluates safety, quality, andconformity to laws and regulations from various perspectives
The Screening Committee Meeting meets whenever a product islaunched or there is an important change, such as a change inthe material or manufacturing process of a mass-produced
product. Reviews are conducted again and again until the subject
product or service is deemed acceptable.
The Screening Committee Meeting examines the subject frommultiple perspectives to ensure compliance with laws andregulations, product safety, and conformity to quality
requirements. By applying their specialized knowledge, membersof the council check such points as whether the adopted
purchase/ production process, cost, and inspection method
enable the specifications promised to customers. If impossible
specifications are identified, we improve the process or negotiatewith the customer to change the specifications. If these measures
do not work, declining the order is a possible option.
Number of products and services examined by the
Screening Committee Meeting
120
70

2014

82

87

2015

2016

94

2017

2018

(Fiscal year)

Checking the testing and measurement systems
November is quality month, and each year the NLM Group
conducts full quality checks.
In FY2018, we conducted full quality checks under the themeof checking the testing and measurement systems.
Content of the full quality checks• Cross-check of data in the shipping inspection sheet with the source data

2
2016

2017

2018

Content of prompt reports and recalls (FY2018)
Month and year

Serious property damage

December 2018 Finger cut caused by product burr Physical injury(2) Whether measurement data are handled appropriately

4

4

1
2014

November 2018 Abnormal composition• Submission of documents showing a list of all measuring instruments that havebeen introduced, including veneer calipers, and their locations• Testing and measurement procedures that have been established, and how they
are implemented

83

No command to the pressure
Possibility of a recall
reducing valve of a movable device
Defective
coatingofaPossibility of a recall
November 2018
packaging material
Serious property damage

October 2018

(1) Whether measuring instruments are managed and used appropriately

6

On-site safety training

At the NLM Group, we utilize an internal system database toprovide information when a workplace injury has occurred andshare detailed information about accidents and countermeasures.
Using this database, which is accessible from all of the group’sbusiness locations and permits the posting of information at all
locations, we share information about specific activities forpreventing workplace injuries, including case examples ofaccidents that have occurred in the group in the past andcountermeasures against them, and make use of the information
to prevent accidents.

Number of recalls

10

Sharing safety information

24 Corporate Social Responsibility Report 2019

Group Executive Committee(Year)

Non-lost-time injuries

4

Quality management systemcommittee members
Group companies
Quality assurance and control managers

16

6

At the NLM Group, we strive to maintain our quality
management system appropriately to reduce quality risks
and concerns. As a part of efforts to take every opportunity
we can, we hold a competition on good practices in quality
to share information, thereby advancing activities for adding
to the NLM Group’s strengths.

Supervision

23

12

Quality Assurance

Content of the defectCategory

September 2018 Finger cut caused by product burr Physical injury
October 2018

Crack on a lid

October 2018

Insufficient grease on parts

Serious property damage
Possibility of a recall

October 2018

Parts welding defectPossibility of a recall(Fiscal year)

Quality assurance network
At the NLM Group, we have established a group-wide quality
assurance network to further strengthen the independence ofquality assurance departments. The Group Quality Committee
chaired by the director in charge of quality provides information
about the group’s quality policies and approves quality
management promotion plans. This committee also sharesinformation about quality problems that have occurred in thegroup and the results of quality audits, has discussions about
them, and engages in other activities for improving our quality
assurance level.
Nippon Light Metal Holdings Co., Ltd. 25

SocialQuality Assurance

Quality audits
We conduct quality audits of all group facilities every year tocheck that measures to continue to be implemented. These
activities are aimed at sharing points needing improvement
related to quality with the audited departments in question withthe aim of improving the level of their quality assurance further.
In FY2018, 131 problems were pointed out and 138
suggestions were given at 66 facilities.

Good practices in quality competition
At the NLM Group, we began to hold a competition on goodpractices in quality in FY2018 with an aim to improve the group’s
quality assurance level.
In FY2018, there were 41 entries to the competition, and theHighest Award was granted to one initiative and the Award of
Excellence was given to two. The competition gave groupcompanies an opportunity to learn about various initiatives taken
within the NLM Group and to share information with each other,where some plants facing challenges contacted another facility
seeking details about their successful initiatives.
HighestAward

Award of
Excellence

Toyo Rikagaku Kenkyusho Co., Ltd.
Quality improvement of an aluminum
die-cast parts achieved in collaborations
with a partner company
Reason for the award: In pursuit of stabledelivery of good products to customers, they
strived to improve product quality, without
giving up, going beyond the framework of
the company and working together with apartner company. As a result, they made agreat achievement, which was also praisedby their customers.

Nikkeikin Aluminium Core Technology Co., Ltd.
Standardization of tensile testing
Reason for the award: In building a tensile
testing system free from human intervention,
they applied the good practices of anothergroup company and it led to an efficiency
improvement.

Riken Light Metal Industry Co., Ltd.
Quicker measurement with measuring equipment
and the prevention of judgment errors
Reason for the award: While increasing
measurement points to achieve the quality
required by customers, they automated apart of the measuring procedures andsucceeded in not only decreasing judgment
errors but also reducing the burden on
inspection staff.

People who were granted awards by the Group Quality Committee. (From left)
Mr. Tanaka from Nikkeikin Aluminium Core Technology Co., Ltd., Chairman
Murakami, Ms. Bamba from Toyo Rikagaku Kenkyusho Co., Ltd., and Mr.
Yoshimura from Riken Light Metal Industry Co., Ltd.

26 Corporate Social Responsibility Report 2019

Message from an Award Recipient
I work on quality assurance by
beginning to be involved in the
production in the test production
phase and trying to apply the
5-Gen Principle*.
We applied for the competition
with an improvement we made by
Ms. Tomoe Bamba
cooperating with a partnercompany. We made theQuality Assurance Gr.,
improvement because we were
Quality Assurance Division
Toyo Rikagaku Kenkyusho Co., Ltd.
about to run out of stock for acustomer because of poor productyield at the partner company. Initially, I had trouble
communicating well with people from the partner company.
I tried to respond sincerely to their requests while also
explaining to them what we wanted. This allowed me tocollect various opinions, and then we began to proceedsmoothly with the improvement. We received help from
Nippon Light Metal Co., Ltd. in the technological aspect ofaluminum die-casting. We took full advantage of the Team
NLM’s strengths in this improvement.
I would like to go for the Highest Award again next time,and achieve a second straight victory.
* A set of principles that focus on the frontline (Gen-ba), actual items or
products (Gen-butsu), actual condition or situation (Gen-jitsu), actual
principle or theory (Gen-ri), and actual rules or standards (Gen-soku).

Message from an Award Recipient
I am in charge of the quality
assurance of forged automotive
suspensions.
This time, I coordinated activities
for automating the tensile testing at
the extruding plant, thereby
creating a system in which humans
Mr. Yasuhito Tanaka
cannot intervene. I visited individual
facilities to identify current
Quality Assurance Gr.
problems and visited model
Nikkeikin Aluminium CoreTechnology Co., Ltd.
facilities to have them understandthe necessity of automation. I also
supported facilities needing help by joining the people
working there. Because tensile testing machines andsystems differed between facilities, I had difficulty finding a
way to automate the testing. I believe we could build aleading system in the group.

Message from an Award Recipient
I am involved in the quality
assurance of extruded materials.
We began trying to make theimprovement when we increased
the points of inspection to provide
higher-quality products tocustomers. We proceeded with
Mr. Fujio Yoshimura
the project by reflecting onrequests from inspection staff to
Quality and Environmental
eliminate inconvenience to them,
Improvement Promotion Office
Riken Light Metal Industry Co., Ltd.
so that they can do inspections
smoothly without error. After wesucceeded in making the improvement, the staff told us“We are happy with the new system although we werepuzzled at the difference from previous tasks. We can now
complete inspections on time without working overtime
despite the increased number of inspection points.” I feelthat the hardship paid off.

Cross-check
At the NLM Group, we manufacture and sell products that use
aluminum and aluminum alloys. While aluminum itself is a soft
metal, it can be converted into aluminum alloys with diverse
properties by adding other metallic elements, such as silicon,
iron, copper, and magnesium, or by treating it with heat. The
amounts of the additives need to be controlled by the onehundredth to one-millionth of a gram. In addition, we need toensure that specific elements are not contained, to comply with
Europe’s RoHS Directive*1, REACH*2, and other regulations. For
this purpose, we conduct emission spectrochemical analysis toconfirm that specific elements are not contained. We also
conduct tensile testing of aluminum alloys we manufacture tocheck their mechanical performance, such as tensile strengthand stretch, and confirm that they have the specific performancerequired by customers.
We conduct these tests using equipment dedicated for each.
To control the components by one-millionth of a gram, however,
we need to ensure the precision of analytical work and tackle
instrument errors. Therefore, we conduct cross-checks between
the group’s facilities in Japan and overseas every year to ensure
the precision of analysis and that such errors are not overlooked.
Cross-checking involves analyses or tests of the same material
conducted under the same conditions at multiple facilities tocheck for differences or variations in the results. The results ofcross-checks are distributed to each facility and reflected in theadjustment of equipment to improve the accuracy of analysis.
Results of the overall cross-check are reported to the Group
Quality Committee.
In FY2018, an emission spectrochemical analysis cross-check
was conducted at 15 facilities and a tensile testing cross-check
was conducted at 16 facilities, and no problems were found in
those facilities.
The Nikkei Research and Development Center, which is incharge of cross-checks, is engaged in research and development
as the R&D base of the NLM Group. At the same time, its
Analysis & Material Test Group conducts various analyses
including elemental analysis, compound identification,
morphological observation, crystal structure analysis, surface
analysis, environmental analysis, and materials testing. The Nikkei
Research and Development Center is the only testing laboratory
in the NLM Group that is JIS Q17025 certified.
*1: RoHS Directive: RoHS stands for Restriction of the use of certain Hazardous Substances in electrical and electronic equipment.
*2: REACH stands for Registration, Evaluation, Authorization, and Restrictionof Chemicals.

Nikkei Research and Development Center

Emission spectrochemical analysis

Tensile testing

Results of cross-check (tensile testing)

Message from Management
At the NLM Group, we areautomating tensile testing toeliminate errors caused bydifferences in analytical work. We
need to proceed with theautomation with the understandingof its advantages andMr. Hiroyuki Mochizuki
disadvantages. For example,
automation makes some processes Leader in charge of material tests
into black boxes, and we need toAnalysis & Material Test Group
Nikkei Research and Development Center
provide training for those black
Nippon Light Metal Co., Ltd.
boxes, to understanding which
processes have been automated.
Therefore, we are planning to holdregular study sessions for people in the group who are
involved in tensile testing. We are planning to make thestudy sessions opportunities to learn the principles andbasic rules of tensile testing, latest trends of testing
equipment, and other important information.

Message from Management
I was in charge of the emission
spectrochemical analysis crosscheck. In my work, providing
reliable analytical information that istrusted by customers is my toppriority.
In the cross-check, I confirmed
Mr. Yasuhiro Hosoji
details such as whether the
analyzed points were appropriate,
Leader in charge of chemical analyses
not just the results of analysis.
Analysis & Material Test Group
Nikkei Research and Development Center
While the analyses themselves
Nippon Light Metal Co., Ltd.
are done by machines, theoperation and setup of thosemachines are done by humans.
Therefore, we hold study sessions on emission
spectrochemical analysis and strive to improve the skill
level of the group.

JIS Q17025 certificate

Nippon Light Metal Holdings Co., Ltd. 27

SocialSocialWork-Life Balance

Workstyle reform

Communication withstakeholders

Workstyle reform
Measures to reduce long working hours
The NLM Group has been addressing long working hours as partof its workstyle reform. In November 2016, we began to identify
employees in Japan who have worked overtime beyond a certain
limit and provide support to them. We manage employees’
physical and mental health mainly by encouraging them to takepaid leave or compensatory leave and having an occupational
physician interview and give advice to them. We also invest in
plant improvements and equipment to save labor and improve
efficiency at production sites.
Nippon Light Metal Co., Ltd. improved its working hour
management system in April 2019 to reduce overtime hours. The
improved system visualizes overtime hours and the level of fatigueof each employee. When overtime hours of an employee haveincreased, or the level of their fatigue has gone up, the system
automatically reports it to their superior the next morning. The
superior immediately reviews the workload allocation or take othermeasures to disperse theOvertime hours per employee
workload.
Since FY2017, Nikkeikin(hours/month-person)
Aluminium Core Technology
Nippon Light Metal
Nikkeikin Aluminium Core Technology
Co., Ltd. has been strictly
enforcing a system, under
20.7
which employees are
18.4
18.1
17.0
16.0
obliged to declare their
15.1
overtime hours, in theirefforts to reduce overtime
hours. As a result, in
FY2018 overtime hours
were reduced by approx.
27% from the FY2016 level.
2016

2017

2018 (Fiscal year)

Message from Management
Two years ago, we reviewed thesystem under which subordinates
declare their overtime hours to theirsuperiors. We have since been
ensuring that overtime hours are
declared, and that superiors andsubordinates communicate wellwith each other under the system.
Mr. Takaki Indo
There had been many cases in
HR Group
which employees gave low priority
Nikkeikin Aluminium Core Technology Co., Ltd.
to time management of theiroperations and selection ofoperations, resulting in long working hours. We therefore
carried out an awareness reform, under which superiors
and subordinates thoroughly discussed whether specificjobs have to be done now and whether they really need to
be done, so that they select and concentrate on essential
tasks. As a result, overtime hours have been reduced, andmany employees say that they spend more time with theirfamilies and are more motivated to work hard.
Annual paid leave taken by employees
In FY2018, the usage rate of annual paid leave at the NLM Groupin Japan was 58.8%. We have introduced planned annual paid
leave, encourage employees to take five or more consecutive
days of paid leave as a summer holiday, and take other measuresin our efforts to create an environment which facilitates employees
to take paid leave.
28 Corporate Social Responsibility Report 2019

Communication with Stakeholders

Nippon Light Metal Co., Ltd. has introduced an accumulated
leave system, which permits employees to accumulate expired
annual paid leave days for use in the event of illness, nursing careof families, or any other event for which they will have to take longleave. This system was introduced to encourage employees totake annual paid leave for refreshing themselves mentally andphysically or for developing themselves, which were the original
purposes of the paid leave programs, instead of saving paid leavedays to prepare for the above events.

Childcare support

Communication with suppliers
At the NLM Group, we have been working together with our
suppliers in promoting CSR procurement, working toward fair,equitable procurement, elimination of antisocial forces,
procurement compliance, management of chemicals contained in
our products, response to the problem of conflict minerals, andconsideration of human rights and labor environments. Further, weshare information about our business continuity plan (BCP),
initiatives on SDGs, and other matters with our suppliers, in ourefforts to meet the requests and expectations of society.

At the NLM Group, we are committed to supporting employee
childcare.
In FY2018, childcare leave was taken by six male employees(one) and 66 female employees (55). (*Figures in the parentheses

indicate numbers in FY2017.)

Nippon Light Metal Co., Ltd.’s childcare support programsChildcare leave program that can be used until the child becomes three years old (exceeding the statutory age of one year old and up to two years old)
Shorter working hour program that can be used until the child becomes a third grader (exceeding thestatutory age of three years old)
A program under which employees who left the company to care for children can return to their work(a return-to-work program)
The first five days of childcare leave are regarded as paid leave to promote use of the leave.
Accumulated leave for childcare can be used until the child becomes a third grader.
Family sick leave, which is taken when a child suddenly gets sick or similar situations, is regarded as paid leave. (Five days
per year are granted to employees with one child, and ten days per year are granted to those with two or more children.)

To promote the use of these programs, we informed all
employees of them via
Total number of family sick leave days taken
the intranet and ourby employees (Nippon Light Metal)
internal newsletters.
Male
FemaleAs a result, the total
number of family sick
98.5
leave days used by
employees increased
from 25.5 in FY2017
to 147.0 in FY2018.
48.5
The NLM Group willcontinue to enhance
21.5
support programs tohelp employees
5
5
4
4
3
0
0
balance work and
2014
2015
2016
2017
2018 (Fiscal year)
childcare.

Message from an employee
who took family sick leave
I took family sick leave for my child’s
hospital visit, and both my wife andchild were happier with it than I
expected. (Laughter) While theunderstanding and cooperation ofyour superiors and co-workers arenecessary for taking family sick
Mr. Keiji Mochizuki
leave, its conversion to paid leave
has clarified that the company is
Maintenance Section
really encouraging us to take thePower Generation Department
leave, and we are therefore much
Kambara Complex
less hesitant to take it than before.
Nippon Light Metal Co., Ltd.
While childcare is hard in many
ways, my wife and I enjoy seeing our child grow. I would
like to continue balancing work and childcare by making
effective use of the company’s programs.

Supplier questionnaire
Nippon Light Metal Co., Ltd. requests its suppliers answer
the CSR procurement questionnaire, which is sent to them
together with the CSR Report issued for them every year, toshare our policies on CSR procurement with suppliers. We
began this initiative in 2010 and conduct the survey every
year. In FY2018, we sent the questionnaire to 446 suppliers,
and the response rate was 51.8%.
Trends of their answers show that, concerning initiatives
on human rights, more suppliers formulated human rights
policies and carried out activities to raise their employees’
awareness than the previous year.
Higher awareness was also seen in initiatives for protecting
intellectual property rights, with an increasing number ofsuppliers striving to ensure fair, equitable corporate activities.
Initiatives for promoting CSR procurement taken byusing the questionnaire
The frequent occurrence of major disasters in recent years
has increased the importance of BCP. The questionnaire has
also revealed that suppliers are working proactively toformulate their own BCP.
To have these suppliers’ initiatives lead to even morestable procurement, we have created a supply route map bychecking some suppliers’ production and shipping bases
and storage facilities. This has enabled us to quickly narrow
down the routes and goods that would be expected to beaffected when a major disaster has occurred. Moving
forward, we will expand these efforts to other suppliers as
well, to increase the certainty of business continuity.
Business continuity plans formulated by suppliers

26%

41%

17%
16%

Have already established a BCP
Formulating a BCP at present
Have not formulated a BCP but will in roughly
one yearHave not formulated a BCP and have no plan
to do so

It was found that approx. 70% of our suppliers have already formulateda BCP or are taking actions to formulate one at present.

Initiatives for ensuring compliance with the Subcontract Act
At the NLM Group, we are aware that our relationships with
suppliers involve the risk of forcing unfair business conditions
upon our suppliers by abusing our superior position as theordering party. We are striving to eliminate such risks with theleading role played by the procurement department.
Above all, we are making group-wide initiatives to comply with
the Subcontract Act. We hold study sessions and individual
consultation sessions for people in charge of procurement atgroup companies, conduct case studies, and take otherinitiatives in our efforts to allow people in charge of procurement
to acquire accurate knowledge on their work and to raise theirawareness. In FY2018, a total of 200 people from 20 sites
participated in training sessions.

A Subcontract Act training session

Message from a participant
I participated in the session for the first time. I was able todeepen my understanding of the Subcontract Act because
the class focused on some key points and therefore waseasy to understand. The Subcontract Act is very familiar tome because I am a member of the procurement andpurchase department. The session allowed me to reaffirm
that the law should be observed.
After the session, I began to pay more careful attention
than before to such points as whether or not the
Subcontract Act applies to our transactions with suppliers
and whether or not the terms and conditions meet thepayment conditions stipulated by the Subcontract Act. We
are promoting initiatives for the achievement of SDGs atpresent, and I think the partnerships with our suppliers,
who are included in our value chain, are very important. I
will work on daily tasks, being more
conscious of our obligations than
before.

Ms.

Naomi Shinohara

Purchasing & Logistics Dept.
Nippon Light Metal Co., Ltd.

Nippon Light Metal Holdings Co., Ltd. 29

SocialGovernanceCommunication with Stakeholders

Partner meetings
The NLM Group holds partner meetings as a measure forcommunicating with suppliers. Contents of partner meetings
include exchanges of opinions about CSR procurement, SDGs,
and development projects. In addition, in FY2018, we showed ourpartners the renovated HINTBOX (a hands-on showroom).
In April 2019, we sought advice from President Fujita of Nichiei
Yakuhin Kogyo Co., Ltd., which is both our supplier andshareholder, about our initiatives, including those regarding CSR
procurement and SDGs.

Interview with a supplier
Mr. Masaaki Fujita

President and Representative Director

Nichiei Yakuhin Kogyo Co., Ltd.
Could you evaluate our initiatives from the viewpointof a supplier?
In the last year, we began to hear the term “SDGs” veryfrequently as we talk with our business partners. I thinkthat the NLM Group has taken on initiatives ahead of ourother business partners. I think that the method of
expanding those moves to the overall group is yourissue. You can probably make your initiatives meaningful
by narrowing them down to specific targets and linking
them to your business activities.
How do you evaluate our initiatives from thestandpoint of a shareholder?
First of all, I think that aluminum is excellent from theviewpoint of sustainable business expansion. Above all,the outstanding recycling rate is believed to be a great
advantage. From the viewpoint of a shareholder, I cansay that the NLM Group, which deals with such a metal,
is rich in potential advantages. Further, the NLM Groupis also very reliable from the standpoint of a shareholder
because it is among the first to proactively carry out CSR
activities and activities that address SDGs.
How do you feel about the BCP initiatives of the
NLM Group?
In many cases, specific measures for BCP are limited.
However, the NLM Group created a supply map. I think
it is a good, practical initiative.

NLM Group

The abolishment of takeover defenses
At the Annual General Meeting of Shareholders held in June 2013,
the NLM HD introduced countermeasures against large-scalepurchases of the Company’s stock (takeover defenses). Partly
reflecting the influence of the Stewardship Code, standards for
institutional investors’ exercising of voting rights for proposed
resolutions on takeover defenses have been growing even stricter.
We carefully reviewed our takeover defenses based on thechanges in the external environment and an exchange of opinionswith institutional investors. As a result, we abolished the takeover
defenses as of the Annual Meeting of Shareholders held in June
2019, believing that working boldly on the action plan based on
the mid-term management plan and striving to enhance dialogue
with institutional investors will lead us to secure and improve ourcorporate value, and ultimately, the common interests ofshareholders.
Against parties who intend to make large-scale purchases ofour stock, we will take appropriate measures in accordance with
the Financial Instruments and Exchange Act, Companies Act, andother related laws. For example, we will request the provision of
sufficient information for our shareholders for them to make anappropriate judgment concerning any large-scale purchases. We
will also disclose the opinions of the NLM HD Board of Directors
and other information in our efforts to secure time and informationfor our shareholders’ consideration.

The group’s governance structure

Students experiencing a quality
inspection

A student experiencing productinspections for scratches and dirt

Measures to address floods in the area around Amehata Dam
On August 16, 2019, Amehata Dam, which is owned by Nippon
Light Metal Co., Ltd., was damaged by torrential rain from Typhoon
Krosa. This caused water level of the Amehata River upstream
from the dam to rise, resulting in a flood in the areas around thedam.
We hereby extend our deepest apologies to residents and otheraffected people for the great problems and anxieties caused by theflood.
In the efforts to implement the measures needed to prevent theflooding of the Amehata River, which the prefectural government of
Yamanashi has requested we take, we submitted an emergency
construction plan to prevent floods in the Amehata-ko Honmura
district to the River Improvement and Management Division,
Prefectural Land Development Department of the Yamanashi
prefectural government on August 30, 2019. We are proceedingwith the construction work quickly in accordance with the plan.

Outside directors / outside auditors ratios
Thirteen directors (term: one year)

General Meeting of Shareholders
Appointment/ removal

Appointment/ removal

Audit reports

Board ofDirectors

Directors

Appointment/ removal

Outsidedirectors

Audit reports

Appointment/ removal

President and CEO
Accounting
audit

Appointment/
removalExecutive officers
Reports andproposals

Opinion exchangeGroup Executive
Committee

Operations, subsidiaries,
and affiliates

Central CSR and
Audit Office

Statutory
auditor audits

Compliance Committee
CSR Committee
Quality Committee
Environment Committee

Auditors
Outside auditors

In addition to taking these emergency measures, we have set
up an investigative commission with the Kanto Regional
Development Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism, the Yamanashi prefectural government,
and the municipal government of Hayakawa Town. This
commission will examine permanent measures.

Governance structure

Board of Auditors<Content of the plan submitted to the Yamanashi prefectural
government>
Prompt emergency measures for preventing damages from flood(1) Build an embankment along an approx. 380-meter section of
the river in the district, to prevent the Honmura district fromflooding.
The target period of construction shall be from August 23,
2019 to late September of the same year.
(2) Build concrete floodwalls along an approx. 200-meter sectionof the Honmura district bypass road, to prevent thesurrounding area from flooding after the road is flooded.
The target period of construction shall be from August 22,
2019 to late November of the same year.
(3) Take sufficient safety measures and give full consideration to
the health of the environment.

The NLM Group’s basic approach to management is systematizedas the Group Management Policy, which consists of three pillars
and 13 basic policies.
Matters concerning the NLM Group’s governance are managed
based mainly on rules on the group stipulated by the NLM HD,
while the autonomy of each company is respected.
In addition, decisions on matters that affect the overall groupare made after they are examined from multiple perspectives by
the Group Executive Committee, which consists mainly of
directors of the NLM HD. Among these matters, those that areespecially important are discussed and determined by the Boardof Directors of the NLM HD.
The Board of Directors of the NLM HD consists of 13 members
including four outside directors. They met 12 times in FY2018. To
operate the Board of Directors flexibly and ensure fruitful
discussions at its meetings, the NLM HD has separated
management supervision from business execution by introducing
an executive officer system.

Audit reports/ Opinion exchange

30 Corporate Social Responsibility Report 2019

In addition, the NLM HD has set up a Board of Auditors tomaintain the institutional independence of the auditing function.
The Board of Auditors consists of six members including threeoutside auditors and met 11 times in FY2018. In addition, it has
one full-time employee who is in charge of assisting in auditing
operations. (All of these figures are as of June 25, 2019).

Nippon Light Metal Holdings Co., Ltd. (NLM HD) is the holding
company listed on the First Section Market of Tokyo Stock
Exchange, Inc. We have formed the NLM Group, which consistsof 77 consolidated subsidiaries including Nippon Light Metal Co.,
Ltd. and Toyo Aluminium K.K., the core operating companies (asof March 31, 2019). At the NLM Group, we operate businesses
with a focus on the manufacture and sales of aluminum andrelated products.

Internal
audit* Website introducing SHC5®*
https://www.nikkeikin.com/SHC5/index.html

Riken Light Metal Industry Co., Ltd. brought in two second-year
students from Toyoda Junior High School in Shizuoka City for awork experience.
The students learned about processes through to thecompletion of products at the manufacturing site, and experienced
processing and product inspections. They directly handled our
products and directly felt what manufacturing is like.
The students gave such comments as “The products wereheavier than I expected, so I handled them carefully so as not tohit them against something. As I repeated the work, I became able
to do it by myself, which made me happy” and “The work was
harder than I thought, but they kindly taught me how to do it, andI enjoyed it.”Group companies are also proactive in taking initiatives like this.
They are actively involved in the development of local communities
and carry out activities in accordance with the Social Contribution
Policy of the NLM Group.
In FY2018, the NLM Group participated in 371 community
programs, and made community investments of 168 million yen.

Aiming for governance that
improves our corporate value

Accounting auditor

You saw the HINTBOX when you participated in thepartner meeting. Did you think that there were likely
to be earnings opportunities from the viewpoint ofSDGs and ESG investment?
I didn’t find an opportunity immediately, but I thought
there were the seeds of possibilities. I think that you willachieve a sustainable business with SHC5®*, which I
read about in a newspaper the other day, for sterilizing
the ballast water of ships. You need to consider userfriendliness and other additional elements with the raw
seeds. As your partner, we would like to be useful foryou in the supply chain.

Communication with local communities

Governance and Internal Control

Four outside directors (All of them
are independent directors*)

Six auditors (term: four years)

Three outside auditors (All of them
are independent auditors.)
Opinion exchange* Defined by of Tokyo Stock Exchange,
Inc. as “an outside director/auditor
who is unlikely to have conflicts ofinterest with general shareholders”
Nippon Light Metal Holdings Co., Ltd. 31

GovernanceInternal control

Compliance system

The Board of Directors of the NLM HD has determined the Basic
Policy on the Development of the Internal Control System and is
striving to apply the policy uncompromisingly. In addition, theBoard of Directors receives a report about the status of internal
control every two quarters and provides appropriate supervisionand instructions.

Risk management
Under the risk management system of the NLM Group, risks areclassified into strategic risks*1, operational risks*2, and hazard
risks*3. Above all, we specify priority risks mainly among
operational risks and hazard risks, and we have set up a
supervisory department at the NLM HD to respond flexibly toindividual risks. The supervisory department handles risks bycooperating with business departments.
The Board of Directors of the NLM HD receives a report on theoverall risk management situations twice a year and evaluates thecontents of the report before giving the necessary instructions.
In FY2018, we focused on the problem of quality fraud, whichbecame a social problem, and conducted a group-wide inspectionof testing and inspection systems and quality specifications andtook other initiatives in our efforts to reinforce our quality
assurance system.
*1 Business strategies, market, economic fluctuation, legal system reform, andothers*2 Defective product or service, environmental accident, and others*3 Natural disasters, accidents, and others

Priority risks

Failure toservice disclose
information ona timely basis

Security
exportcontrol

Defective
product/
service Environmental
problem

information
systemCompliance Committee
The NLM Group has set up a Compliance Committee, which ischaired by the president and CEO of NLM HD and consists ofthe members of the Board of Directors of NLM HD. The
Compliance Committee prepares a compliance promotion plan
every year and checks the status of implementation of the plan
on a quarterly basis
Compliance Codes and compliance meetings
The codes of conduct of the NLM Group are published as theGroup Compliance Codes, which require all officers andemployees of the group, including those outside Japan, tocomply with laws and regulations, corporate ethics, and businessetiquette, act sensibly, and communicate with stakeholders
proactively, among other requirements. To ensure officers andemployees are thoroughly informed of these codes, a handbook
containing them is distributed to all so that they can carry it
around.
Moreover, to promote the understanding of, and inform
employees thoroughly of, the codes of conduct, a compliance
meeting is held at each workplace twice a year to enable them tolearn by repetition. At the meetings, participants exchange
opinions about problems faced in the workplace, case examples
of compliance violations that occurred in other departments, andother subjects. In FY2018, a total of 2,066 workplace meetings
were held, with 20,972 participants in total (participation rate:
93%).
Whistleblowing system
A whistleblowing system has been introduced at major groupcompanies. In addition, the NIKKEI HOTLINE, the group’scommon contact office for whistleblowers, has been set up.

Number of cases that were reported to NIKKEI HOTLINE
28

Naturaldisasters/
accidents

Priority risks

Leakage of
trade secret Problem with

Governance

Governance and Internal Control

Safety/healthproblems

13
8

2014

2015

2016

2017

2018

(Fiscal year)

How NIKKEI HOTLINE works

Q1

Outside directors began to inspect groupcompanies’ factories and other facilities the
fiscal year before last. Could you tell us how
you found the work sites?

I was impressed with all of the factories. I think this initiative is avery good one. There are many things that are taken for granted
at work sites but unknown to directors unless we actually see thework sites. Seeing work sites in person, I can find things thatwere not seen in materials submitted to the Board of Directors orpresentations given to us, in my own way. In addition, the eyes of
onsite workers tell us whether each factory is lively or not, forexample. By seeing sites with our own eyes, we can prevent
misunderstandings that occur when we just see materials.
Therefore, I think that this initiative increases the effectiveness ofgovernance.

Could you give us your opinions about

Q 2 the Board of Directors of the NLM HD?
I think that the Board of Directors of NLM HD is very open. As far
as I have experienced, boards of directors where only thepresident makes statements is not unusual among othercompanies. I believe that the duty of outside directors is to makesuggestions to have businesses executed in an appropriate
direction, based on our experience. This requires that the Boardof Directors should be an open place. On this point, the Board of
Directors of NLM HD provides opportunities to discuss various
topics as well as matters for resolution. At its meetings, outside
directors with diverse careers and experience express theiropinions without reservation from different perspectives andangles. I think it is important to maintain this sort of open
atmosphere at the Board of Directors meetings.

committed to using human assets for deepening the Team NLM
and cross-functional collaboration that the group puts forward? I
feel that your initiatives regarding how human assets shouldinteract with each other beyond the boundaries between groupcompanies and business divisions is still inadequate. While it isnatural that you should want to retain excellent human assets inyour division, you must overcome the boundaries. Why don’t you
set up a personnel committee or a similar organization involving
external people as well, to help you overcome the boundaries? I
think that you need to create a system or mechanism whichleads excellent human assets to interact with each other within
the group and proactively develop each other. I think it is only
when you have created such a system or mechanism that you
will achieve Team NLM and cross-functional collaboration.

Please give a message to the young

Q 4 future leaders.

I think that governance is functioning well by and large. I think it
is because governance is functioning appropriately that businessperformance has improved as much as it has. I sometimes feelthat you should go one step further. Why don’t you become more

I request that young employees experience many failures while
they are young. You will learn a lot from experiencing failure. You
will not only learn how to find the causes of failure and how tocope with it, but also learn to understand the feelings of people
who have failed in something. This will help you to support yoursubordinates and co-workers when you have become a manager
and they have failed in something. I also request that you do yourbest in your work, without fear of failure. Give your opinions
frankly to your superiors. While decisions are made by yoursuperior, you should tell them what you think is right for thecompany. It’s wrong to think that right things will makethemselves known without words. I think it is essential to love
your work and work hard on each one of your tasks without
running away from them. I think that a company’s growth isbrought about by the accumulation of such attitudes toward
work. All of us are born by chance and are destined to die
someday. I request that you keep thinking all the time about themental attitude you should have in the time that you have andcherish the present moments of your life.

Mr. Ryoichi Hayashi, an outside director

Interviewer: Ms. Mayu Ogasawara, Personnel Dept., Nippon Light Metal Co., Ltd.

3

Could you tell us what problems you seein the governance of NLM HD?

Whistleblower

Internal control over financial reporting(10) Notification of the result

HOTLINE contact office• Persons in charge of compliance• Personnel Dept.

• Auditors• Persons in charge of legal affairs(2) Reporting(3) Setting up
the team(5) Reporting• Persons in charge of auditing/ Auditing Office• External lawyers(9) Notification of results

Director in charge of compliance
Compliance Office Manager(4) Investigations(7) Determining
improvement
measuresTask force on
improvement measures

Investigation
team

32 Corporate Social Responsibility Report 2019

Make Team NLM move further forward bypromoting exchange and interaction between
human assets beyond the boundaries ofcompanies and businesses!

Q(1) Reporting

To ensure appropriate financial reporting, we have established andoperate an internal control system over financial reporting. For thispurpose, we have appointed an internal control executive and aninternal control promoter at each group company and segment
and promote appropriate establishment and operation of internal
control system.
Evaluation is undertaken by auditing departments under the
direct control of the president of NLM HD and whose
independence is secured. The status of the establishment,
operation, and evaluation is reported to auditors, accounting
auditor, and the Board of Directors of the NLM HD and corrections
are made as needed.

15

14Interview with an Outside Director(6) Suggesting
improvement
measures(8) Improvement measures (discontinuation of
the act, reprimand, prevention of recurrence)

Person engaged in the act subject
to whistleblowing(Matter subject to whistleblowing)

Nippon Light Metal Holdings Co., Ltd. 33

Global network

Alumina, Chemicals, and Ingot Business
Fabricated Products and Other Businesses

Sheet and Extruded Products Business
Foil and Powder Products BusinessNippon Light Metal Holdings
Nippon Light Metal
Nikkei Sangyo
Shizuoka Kosan
Kinki Kenmazai Kogyo
Aluminium Wire Rod
Nikkei MC Aluminium
Nikkeikin Kakoh Kaihatsu Holdings
Nikkei Inazawa
Nikkei Metal
Nikkei Extrusions
Chugoku Nikkei Katahan
Riken Light Metal Industry
Nisshin
Nikkeikin Aluminium Core Technology
Nikkei Technology Center
Nikkei Niigata
Nikkei Kambara
Toyo Rikagaku Kenkyusho
Nikkei Kenzai Kogyo
Nippon Fruehauf
NikkanNKS
Nikkei Matsuo
Nikkei Hokkaido
Nippon Electrode

ToyaI Europe

Nikkei MC Aluminum (Kunshan)
Nikkei MC Aluminum (Thailand)
Nikkei Singapore Aluminium
NI Nikkei Shenzhen
Nikkei (Shanghai) Body Parts
Nikkei Siam Aluminium
Nikkei (Shanghai) International Trading
Shandong Nikkei Conglin Automobile Parts
Toyo Precision Appliance (Kunshan)
PT. Nikkei Trading Indonesia
Nikkei Panel System Vietnam
Fruehauf Mahajak

Suzhou Toyo Aluminium Ekco
Household Products
Toyal Zhaoqing
Toyo Tokai Aluminium Hanbai(Shanghai)
Hunan Ningxiang JiWeiXin Metal
PowderToyo Aluminum Ekco Trading(Suzhou)
Toyo Aluminium (Shanghai)Management
Toyal MMP India
Toyal (Thailand)

Nikkei Partners
Nikkei New Business
NLM ECAL
Nikkei Panel System
Shiga Nikkei
Shimonoseki Nikkei
Arumi Reinetsu
Nikkei Information Systems
Nikkeikin OhLis
Nikkei Logistics
KeinaraNikkei Fujioka
Fruehauf Industries
Fruehauf Hokkaido
Fruehauf Okayama
Fruehauf Kyushu
Fruehauf Shiga
Fruehauf Service
Sumikei-Nikkei Engineering
Toyo Aluminium
Toyo Aluminium Ekco Products
Toyo Tokai Aluminium Hanbai
ALP
Toyo Aluminium Kosan
ALPHAMIC

Nikkei MC Aluminum America
Nippon Light Metal North America
ToyaI America

Dormant companies (three companies) are excluded.

Corporate overview

Business summary

Trade name:

Nippon Light Metal Holdings Company, Ltd.
(Abbreviated to “NLM HD”)

Securities code:

5703

Head office location:

2-2-20 Higashi Shinagawa, Shinagawa-ku, Tokyo

Established:

October 1, 2012

Paid-in-capital: 46,525 million yen
Sales:

Alumina, Chemicals,
and Ingot Business

Sheet and Extruded
Products Business

Fabricated Products andOther Businesses

Foil and Powder
Products Business

Sales ratio

Sales ratio

Sales ratio

Sales ratio

23

22

36

19

500,451 million yen (consolidated)

Number of employees: 13,316 (consolidated)*All data are from FY2018 or as of March 31, 2019.

Financial highlights
Net sales (consolidated)

Ordinary profit (consolidated)(billion yen)(billion yen)

431.5

500.5
464.4 448.4 481.4
20.6

Profit attributable to owners of parent(consolidated)

%

24.5

26.3

29.5

19.5
15.5

18.0

2016

2017

2018 (Fiscal year)

2014

Equity ratio (consolidated)

Dividend

(%)

(yen)

35.6
26.6

2014

37.2

5

2015

2016

2017

2015

Sales

117.0

Sales

Operating profit

2018 (Fiscal year)

34 Corporate Social Responsibility Report 2019

2014

2016

2017

2018 (Fiscal year)

2014

8

8

2016

2017

9

6

2015

2018 (Fiscal year)

billion yen(billion yen)

2015

2016

2017

2018 (Fiscal year)

10.1

2016

39.0

28.8

%

20.6

101.8
2015

%

(billion yen)

31.1

9.6

2014

%

Sales

107.8

Sales

Operating profit

billion yen(billion yen)

111.1

9.0

2017

117.0

9.6

2018 (Fiscal year)

The alumina and chemicals segment
manufactures aluminum hydroxide,
alumina, and various otherchemicals. These products are used
in a range of fields, including as fire
retardants, raw materials forceramics, and industrial materials forthe manufacture of pulp and paper.
The ingot segment manufactures avariety of aluminum ingots and ishighly evaluated for the developmentof highly-functional ingots that cater
to customers’ needs.

98.2

7.8

2016

Sales

180.3

Sales

Operating profit

billion yen

Sales(billion yen)

107.0

9.8

2017

107.8

7.2

2018 (Fiscal year)

Aluminum sheets and extrusion
products are used in a wide range offields, such as for automotive partsand railway cars in the transportindustry and for semiconductor/
liquid-crystal manufacturing
equipment and photosensitive drums
in the electrical and electronics
industry. The NLM Group makes useof its technologies and expertise
cultivated over many years toproactively develop products thatmeet customers’ needs and to
supply highly functional sheets andextrusion products.

154.7
10.2

2016

Sales

95.3

billion yen

Operating profit(billion yen)

169.0
9.8

2017

180.3
11.7

2018 (Fiscal year)

The NLM Group has many groupcompanies that deal with distinctive
fabricated products. Among them,truck bodies from Nippon FruehaufCo., Ltd. and commercial
refrigerators and freezer panels from
Nikkei Panel System Co., Ltd. arehighly valued for their quality andthereby enjoy the top share in eachindustry. We also supply otheraluminum fabricated products thatare closely related to our everyday
lives, including anodized aluminum
foil for aluminum electrolytic
capacitors, automotive parts, andcarbon products.

93.7

95.3

94.4

5.5

4.9

2016

2017

5.1

2018 (Fiscal year)

Toyo Aluminium K.K. plays theleading role in these businesses. We
have established our position as aleading manufacturer by developinga wide range of products thatincorporate aluminum’s special
characteristics and that are useful insociety, industry and everyday life.
They include packaging materials forfood and pharmaceuticals, products
for electronics, aluminum paste, andsolar cell materials. We develop new
fields by utilizing our own
technologies as the foundation andprovide a range of highly functional
materials and products in markets athome and abroad.
Nippon Light Metal Holdings Co., Ltd. 35

Third-party opinions

Independent Assurance Report

Our responses to previous third-party opinions
The following are opinions (from Ms. Mizue Unno) about the CSR Report 2018 of the NLM Group and the responses of the group to
the opinions.
Major opinions

Responses of the NLM Group

Applicable page

It is important that the group clarify its operations leading to the creationof corporate value related to social elements in the form of asustainability strategy. ... and they will strengthen cooperation with thedevelopment and sales departments. I would like to suggest here thatthe group also discuss SDG-related issues.

We have begun to discuss countermeasures against the climatechange problem. Above all, concerning opportunities, we will
accelerate discussions in relation to SDGs.

P4-5

Overall emissions will increase if the group’s production activities
continue to intensify, which means that the efforts of people on thefrontlines will not be enough. … Since its founding, NLM has been
generating power using in-house hydroelectric generators that it
developed on its own. I think that one possible measure the group cantake is to conduct a comprehensive examination of the energy used in
power generation.

Our greenhouse gas emissions decreased in FY2018 due in part to
the reduction of production. We have yet to conduct thecomprehensive examination of energy that was suggested. We thinkthat it is one of the issues we should consider as we discuss the
problem of climate change in the future.

P21-23

Recycling is another major environmental issue. An index for the level ofachievement made each year will facilitate understanding, and the groupwill need to evaluate the achievements of its activities over time basedon the index.

At the NLM Group, we position recycling as one of our main
businesses. In FY2018, recycled materials constituted 33% of thematerials that we used. We are also advancing initiatives for increasingcase examples of recycling involving the group and our customers(closed recycling).

P4-5
P12-15

I ask the group to continue its comprehensive activities for labor safety
and quality control, by separating them from activities for contributing tolocal communities and by maintaining awareness of compliance,
regarding them as responsible activities that support the group’sbusiness foundation.

Safety and quality are material issues that the NLM Group has
selected tentatively. We have set giving priority to safety and ensuring
compliance and strict quality control as a basic policy in our new
mid-term management plan, to clarify that these responsible activities
support the foundation of our businesses. We are also working to turnthese issues into the group’s added value.

P10
P24
P25-27

Even if communication with stakeholders is also included in governance,
the group should emphasize initiatives that mitigate risk, that is, initiatives
related to the problems of facing and resolving stakeholders’ concerns
and issues.

We have tentatively selected safety, quality, and the environment asmaterial issues for the group. Moving forward, we will proceed withreview and the selection of material issues through dialogue with our
stakeholders.

P5
P10
P29-30P2
P10Managing Director,
So-Tech Consulting, Inc.

Mizue Unno
The NLM Group launched its new mid-term management plan in
FY2019. It is taking steps toward the next stage under the slogan
of “groundbreaking innovator of aluminum and beyond.”
Sustainability factors are included in the new business domain in
the plan, and the group’s CSR has made progress, transcending
the previous domain.
In this issue’s special features entitled “Contributing to building
a sustainable society with aluminum,” the company explains thesustainability initiatives of its businesses, and the report has
become easier to understand on this point. The group is
expected to develop this further to a sustainability management
plan. For this purpose, the group should first show thesustainable future society it aims for and the domains of its
business innovation. At present, the group has put up themes
but has yet to systematized them sufficiently. It is therefore
important to sort out issues like this, set targets, and keep
checking progress.
For example, there are two paths toward achieving sustainable
society with aluminum materials, providing products and building
public infrastructure. The former applies to products forenvironmentally friendly vehicles and the medical industry
mentioned in the mid-term plan. Concerning the latter, I ask thegroup to be conscious of society as well as itself and keep an
eye toward the impact on society in the sustainability plan.

36 Corporate Social Responsibility Report 2019

The environment: Information disclosure related to the climate
is demanded more strongly than before, and initiatives for
reducing greenhouse gas emissions surpassing the previous
ones and disclosure of such initiatives have been the focus. We
are in an era when long-term vision and analysis and identificationof business risks and opportunities are necessary, and evencollaboration with external parties beyond initiatives within eachsite are considered. I ask the group to show specifically the styleof a groundbreaking innovator that makes use of its services andvarious technologies to expand its ideas to new business models
involving collaborations with other industries as well, while
positioning its aluminum business at the core.
Society: Regarding CSR procurement from suppliers, thecorporate responsibility of global enterprises is strongly
questioned globally. I ask the group to report its initiatives in thisrespect, including its overseas businesses. Concerning
communication with stakeholders, it is important to report not
only what the group did with which stakeholders but also whatissues were brought up by the stakeholders and what lessons
were learned, and what changes were made by the group, forexample. In addition, shareholders should be positioned astargets of engagement activities as a governance measure,instead of being included among stakeholders. I also ask thegroup to go so far as to report achievements of enhanced
engagement with shareholders, such as its impact on thebusiness management of the group.
Nippon Light Metal Holdings Co., Ltd. 37

Data

Coverage

2016

2017

2018

2017

2018

Consolidated
Male
Consolidated
FemaleConsolidated
Male
Consolidated
FemaleConsolidated (Japan only) Male
Consolidated (Japan only) Female
Consolidated (Japan only) Male
Consolidated (Japan only) Female
Consolidated
Male
Consolidated
FemaleConsolidated
Male
Consolidated
FemaleConsolidated (Japan only) Male
Consolidated (Japan only) Female
Consolidated (Japan only) Male
Consolidated (Japan only) Female
Consolidated (Japan only) Male
Consolidated (Japan only) Female

Coverage

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

39.1
36.9
11.5
7.7
2,146
1,974
324
161
9.9
9.7
52.5
71.6
1
55
2
1
0
61

39.9
37.4
11.8
8.0
2,157
1,871
302
150
9.9
9.6
57.8
73.4
6
66
4
2
1
66

Consolidated (Japan only) Male

—

34

59

NumberConsolidated (Japan only) Female
Consolidated
Non-consolidated (Nippon
Light Metal Co., Ltd.)
Non-consolidated (Toyo Aluminium K.K.)

—
—

2
29.2

9
24.9

thousand yen/ person

2.47

2.59

2.63

%

2.05

2.03

1.93

%

9

12

23

cases

8

8

16

cases

43

65

64

cases

9

5

5

cases

0.46

0.56

1.05

0.00

0.27

0.54

Consolidated
Consolidated

14
2,230

15
2,102

28
2,066

cases

Consolidated

19,991

20,237

20,972

total number

Number of patent publications*18

Consolidated

126

182

167

cases

Number of patent registrations*18

Consolidated

143

107

92

cases

Consolidated

0

0

0

cases

Consolidated
Consolidated

10
4

6
2

8
4

cases

Consolidated

163

133

168

million yen

Consolidated

8

8

9

yen

Unit
Average age*15

The Environment
Consolidated (Japan only)*2

796

804

★ 748

thousand tons-CO2

Consolidated(besides Japan)*3

135

125

137

thousand tons-CO2

Greenhouse gas emission intensity per unit of sales*

Consolidated (Japan only)

Breakdown of Scope 3 emissions*4

Category 1: Purchased goods and services*5

Consolidated
Consolidated

2.09
1,926
22

1.87
★ 1,947
35

thousand tons-CO2

Category 2: Capital goods

2.19
1,962
21

Consolidated

33

28

34

thousand tons-CO2

Average number of days of annual paid leave taken*15

Consolidated

11

11

11

thousand tons-CO2

Average rate of acquisition of annual paid leave*15

Category 5: Waste generated in operation

Consolidated
Consolidated

Category 7: Employee commuting

Consolidated

Electricity, steam

Consolidated

Fuels

Consolidated

5
0
3
10.4
6.2
33.2
601
379
560
23.9
28.5
105
48.4
3.5
2,218
6,210
554

thousand tons-CO2

Category 6: Business travel

4
0
3
10.8
6.3
35.5
576
473
520
23.5
28.6
97
37.3
3.5
1,983
*85,598486-1,440-982

million yen

Greenhouse gas emissions (Scope 1, Scope 2)*1

1

Category 3: Fuel and energy related activities(not included in Scope 1 or 2)
Category 4: Upstream transportation anddistribution

Energy consumption

Recycled/Reduced

Consolidated

Disposed (landfill)

Consolidated

Environmental conservation expenditure: Investment

Consolidated (Japan only)

Environmental conservation expenditure: Expenditure

Consolidated (Japan only)

Economic effect of environmental conservation activities: Earnings

Consolidated (Japan only)

4
0
3
10.6
6.3
37.7
618
341
576
*723.7
30.8
119
40.9
3.9
2,009
5,847
397

Economic effect of environmental conservation
activities: Changes in expenditure*9, *10

Consolidated (Japan only)

2,770

Energy consumption intensity per unit of sales

Consolidated

Weight of raw materials used in production

Consolidated

SOx emissions

Consolidated

NOx emissions

Consolidated
5

Quantity of water intake*

Consolidated

Total amount of discharged water

Consolidated

COD emissions

Consolidated

Emissions and disposal of waste and waste byproducts
Environmental accounting

Number of cases of lawsuits, penalties, orforfeitures related to the environment

tons-CO2/ Million yen

thousand tons-CO2
thousand tons-CO2
PJ
PJ

tons
tons
3

million m

million m3
thousand tons
thousand tons
million yen

Number of accidents related to the environment*

Consolidated
Consolidated

0
10

0
16

cases

Number of complaints related to the environment*12

3
4

cases

Employees
Consolidated

FemaleConsolidated

Male

Consolidated

FemaleEmployees (regular employees)

Number of employees by country/region

Consolidated

Male

Consolidated

FemaleEmployees

Consolidated

Total

Japan

Consolidated

Male

Consolidated

FemaleAsia
U.S. and Europe
14

Number of employees in each age group*

15 to 19 years old
20 to 29
30 to 39
40 to 49
50 to 59
60 or older

Number of new hires*15

MaleConsolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleTotal

Consolidated (Japan only)

Percentage to employees

Consolidated (Japan only)

Number of new graduates who were recruited*15
Number of employees who left*15

Consolidated

Consolidated (Japan only)
Total

Consolidated (Japan only)

Percentage to employees

Consolidated (Japan only)

Three-year retention rate*15*16
Number of those who were re-employed after retirement
Labor Union participation rate

38 Corporate Social Responsibility Report 2019

Consolidated (Japan only)
Non-consolidated (Nippon
Light Metal Co., Ltd.)
Non-consolidated (Nippon
Light Metal Co., Ltd.)

Average annual amount of expenditure for education/ training*15
Employment rate of people with disabilities*17

187
0
1,529
73
9,091
2,433
13,126
7,879
1,135
2,506
1,331
235
40
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

190
0
1,540
90
8,992
2,233
12,855
8,058
1,198
2,243
1,089
231
36
—
—
—
—
—
—
—
—
—
—
—
—
596
7.1
197
401
3.5
88.4

208
0
1,640
95
9,087
2,494
13,316
8,399
1,271
2,282
1,095
229
40
108
15
2,153
559
3,150
833
2,878
671
1,975
276
646
52
692
7.8
211
490
5.6
83.8

Number26

8

8Number

100

100

100

%

NumberNumberNumberNumber of workplace injuries*18

Lost-time injuries

Non-lost-time injuries

Frequency rate of lost-time injuries*18, *19

Number of participants

Quality assurance

NumberNumber of violations of laws or regulations in theprovision of products/services
Number of prompt reports
Number of recalls

NumberNumberNumberCommunity

NumberExpenditure related to social contribution

NumberNumberNumberNumberNumberNumberNumberNumberNumberNumberNumberNumberNumberNumberNumber%NumberNumber%%years old
years
years
hours/ person
hours/ person
hours/ person
hours/ person
days
days
%
%
NumberNumberNumberNumberNumberNumberNumberConsolidated (Japan only)
Consolidated(besides Japan)
Consolidated (Japan only)
Consolidated(besides Japan)
Consolidated
Non-consolidated (Nippon
Light Metal Co., Ltd.)

Compliance
Number of cases that were reported to NIKKEI HOTLINE*20
Compliance meeting
Number of times the meeting was held

NumberNumberUnit
years old

Safetymillion yen

cases

Employees (managerial employees)

Number of employees who were absent fromwork due to mental health problems*15

million yen

0

Number of employees

Number of employees who newly took nursing care leave*15

tons

0

Male

Number of employees who newly took childcare leave*15

Number of users of the shorter working hour program*15

thousand tons

0Consolidated

Average annual overtime work hours*15

GJ/ Million yen

Consolidated

Full-time directors

Average annual hours worked*15

thousand tons-CO2

11

Number of directors

Average duration of service*15

2016

times

cases

GovernanceInterim and year-end dividend per share★: We have received independent assurance by KPMG AZSA Sustainability Co., Ltd. regarding the reliability of the data.
*1. In FY2018, we began to compile statistics on greenhouse gas emissions from our main offices.
*2. The value for greenhouse gas emissions (in Japan) for FY2017 was incorrect and was therefore corrected.
The following CO2 emission factors were used for the calculations.
Electricity: The CO2 emission factor with T&D losses of each previous fiscal year announced by the Federation of Electric Power Companies of Japan and the Electric Power Council
for a Low Carbon Society
Fuel: CO2 emissions as per heat value and calorific value for each fuel, which are set forth in the Ministerial Ordinance for Calculation of Greenhouse Gas Emissions Associated with
Business Activities of Specified Emitters*3. For calculating CO2 emissions related to electric power, we use the latest CO2 emission factor of each country that is shown in CO2 emissions from fuel combustion 2017, which was
published by the International Energy Agency (IEA).
For calculating CO2 emissions related to fuels, we use the CO2 emission factor of Japan.
*4. The emissions are calculated by multiplying the activity amount by the CO2 emission factor published by the Ministry of Economy, Trade and Industry and the Ministry of theEnvironment.
*5. The Scope 3 Category 1 emissions are calculated based on the volume of purchase of the top three items in terms of volume purchased from outside of the group. Of the items, thealuminum ingots are those purchased by Nippon Light Metal Group Metal Center.
*6. The seawater intake quantity is not included.
*7. Coverage: Consolidated (Japan only)*8. The value for FY2017 was incorrect and was therefore corrected.
*9. Changes in expenditure are calculated using the following formula:
Changes in expenditure = expenditure incurred during a base period (FY2017) – expenditure incurred during the current year (FY2018)*10. - (minus) indicates an increase in expenditure.
*11. Environmental problems that affect external parties (such as the leakage of oil or chemicals)*12. Number of petitions from external parties (such as those regarding smell and noise)*13. Fixed-term (full-time) employees are not included.
*14. Consolidated values began to be reported in FY2018.
*15. Consolidated values began to be reported in FY2017.
*16. Percentage of employees who are still at the company as of April 1 in the year that is three years after they joined the company*17. As of June 1 immediately after the end of each fiscal year. The statutory employment rate is 2.2% (was 2.0% until March 31, 2018).
*18. The subject period is calendar year (January to December).
*19. Injuries that resulted in one or more days’ absence from work (excluding commuting injuries)*20. Starting from 2018, all reported cases, including one which did not need to be addressed, are included.

Nippon Light Metal Holdings Co., Ltd. 39