Contents

Introduction

Management

Social (S)Environment (E)Governance (G)Recognition / Assurance

Corporate Governance | Risk Management | BCP / BCM | Strict Compliance | Information Security | Tax GovernanceRisk Management
Basic Approach

Promotion Framework

ApproachPromotion framework

Risks surrounding corporations continue to diversify and growWe manage individual risks specific to organizations such asManagement, the working group manages risks from a position

more complex. The most pressing risks include global shifts inbusiness divisions, subsidiaries, and Group companies.

independent from the business divisions within the Group.

political and economic landscapes, environmental shifts brought

Risks associated with diverse businesses are assessed everyyear. The frequency and severity of possible risks are evaluated,with the advance of digital transformation, and human rights

and countermeasures are formulated based on the results.

issues such as forced labor.

Midway through each fiscal year, we monitor the progress of

As a group of companies engaged in manifold businesses,

independent external directors.
Under the leadership of the Director in charge of Risk

by climate change, the growing sophistication of cyber-attacksthe TOPPAN Group views accurate detection, appropriate

Management Promotion Committee, which includes

mitigation measures designed at the beginning of the year.
Among the risks identified, we define those that can exert ee the Promotion Structure for Sustainability Initiatives on page 16 for
Sdetails

We designated 25 significant risks in fiscal 2023. The
responsible head office divisions spearhead Groupwide efforts

management, and steady prevention of these impending risks assevere adverse impacts on management as “significant risks.”

to plan countermeasures against these risks and implementone of its principal management challenges. In keeping with thisWorking as part of the Corporate ESG Project, the Risk

comprehensive measures to control them (see page 139). The

viewpoint, we identify a set of “significant risks” affecting us

Management Working Group (led by the Director in charge ofDirector in charge of Risk Management regularly reports thethrough annual risk assessments and take steps to prevent theirRisk Management; attended by persons in charge of risk

outcomes of those measures to the Board of Directors.

occurrence.

management at the responsible head office divisions; andWhen a significant risk actually arises, we immediatelyadministrated by the Compliance Department in the Legal

collect the necessary information and take comprehensive andDivision) set under the Sustainability Promotion Committee

strategic countermeasures under our risk management structure(chaired by the President & Representative Director) reviews

to minimize losses, ensure business continuity, and maintainthe results of risk assessments performed by relevant businessthe trust of society.

divisions, subsidiaries, and Group companies. The working
group also considers social conditions, the possibility of risks
arising over the medium to long term, and various other risk-Risk Management Structure
Board of Directors
Director in charge of Risk Management
Administration office(Compliance Department, Legal Division)

related circumstances surrounding the TOPPAN Group. Basedon the review results, a significant risk designation for thecurrent year is finalized with authorization from theSustainability Promotion Committee.

Responsible head office divisions
Departments in business divisions

The Risk Management Working Group regularly reports
activity results to the Sustainability Promotion Committee. Thecommittee members discuss risk management independently
and objectively, in cooperation with the TOPPAN Group ESG

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Contents

Introduction

Management

Social (S)Environment (E)Governance (G)Recognition / Assurance

Corporate Governance | Risk Management | BCP / BCM | Strict Compliance | Information Security | Tax GovernanceSignificant Risks and Countermeasures for Fiscal 2023

6Significant Risks
Human injury or damage to physical assets caused by infectious diseases or earthquakes, storms, floods, or other natural disasters
Climate change risks
Risks associated with market shifts● When failing to implement sufficient measures to address market shifts such as globalizing social trends, innovations ininformation technology, progress in digital networking, and the growing expectations for a sustainable society
Risks associated with strategic partnerships, investments, or acquisitions● When failing to continue partnerships or gain expected results
Risks associated with research and development● When progress is halted by delays in commercialization, launches, etc.
Securing human resources to sustain business growth7

Securing financing

8

Risks associated with control of the Group

9

Intense market and price competition● Declining prices or a loss of product or service competitiveness due to fiercer competition in prices or product development10

Non-performing or long-term retained inventory assets, etc. due to inadequate asset management

11

Incidents related to receivables (bad debt, customer bankruptcy, etc.)

12

Fluctuations in the current value of marketable securities

13

Fluctuations in foreign exchange rates

14

Information security risks (cyber-attacks, information leakage)

15

Risks associated with IT system shutdowns (production lines, digital services, etc.)

12
34
516

1718
19202122232425

Product quality risks● Outflow of unsafe products to the market● Self-imposed product recalls
Procurement risks● Accidents, disasters, or bankruptcies affecting business partners, human rights incidents or violations of environmental
regulations committed by business partners, or supply stoppages, significant supply shortages, delayed delivery, soaring prices forenergy or raw materials, etc. caused by geopolitical disruptions, etc.
Risks associated with the leakage of toxic substances or environmental pollutants
Risks associated with waste● Unauthorized dumping, inappropriate disposal, etc. by waste-disposal service vendors
Human rights risks
Fires or occupational accidents
Risks associated with labor issues (violations of labor-related laws, labor disputes, etc.)
Infringements of patents, copyrights, or other intellectual property rights● Risk of being seen to have infringed the intellectual property rights of other parties; risk of being drawn into lawsuits; risk of being
unable to prevent the unauthorized use of the Group’s intellectual properties; etc.
Misconduct (serious improper conduct or inappropriate actions, etc.) or compliance violations (collusion, bribery, or other legal orregulatory violations)
Overseas business risks (other matters not included in the paragraphs above, such as regulatory violations, geopolitical risks,
lawsuits, labor disputes, or issues to do with international taxation)

See pages 141-143
See pages 110-115

Main Initiatives● Transform the business portfolio centered on the Group’s three growth businesses: DX business, SX in Japan/overseas Living& Industry business, and new businesses (frontier)● Enhance due diligence efforts, intensify monitoring activities, devise improvement plans, and so on● Prevent delays by monitoring progress, judging step-up timing, and identifying risks
See pages 30-44● Diversify financing methods and time spans● Maintain and solidify a sound financial position● Review financial plans● Manage and control under the Related Company Administration Regulations● Disseminate the TOPPAN Group Conduct Guidelines as basic compliance standards● Devote resources to and reinforce development capabilities in DX business● Advance BX, develop Hybrid-BPO™ services, and develop mono-material-based sustainable packaging materials andpromote their growing share in the global market● Improve the stock turnover ratio by promoting sales interdepartmentally● Regularly check asset quality and monitor inventory management● Set credit limits and review credit periodically based on in-house credit management standards● Take credit protection measures in response to credit uncertainties or credit collection delays● Periodically review strategic shareholdings and ascertain the financial condition, etc. of issuing companies● Formulate a set of risk management guidelines● Use hedging instruments such as foreign exchange contracts
See pages 148-153● Formulate a set of guidelines for the construction of core IT systems● Confirm the extent of impact on business, ascertain priorities and procedures for restoration, and organize training
See pages 79-80

See pages 66-71
See pages 122-125
See pages 119-121
See pages 54-59
See pages 60-62, 141-143
See pages 54-62● Regularly survey the intellectual property rights of other parties in Japan and overseas and follow up on the survey results● Construct a strong intellectual property rights portfolio by obtaining rights in accordance with individual countries andregions where we do businessSee pages 144-147● Clarify an ideal Group management approach, build optimal governance structures/systems and operate them with overseas
Group subsidiaries● Develop governance structures through internal and financial audits● Assess risks in the business environment using tools provided by third-party institutions, etc.

*For details, see the securities report (in Japanese) at: https://ssl4.eir-parts.net/doc/7911/yuho_pdf/S100R83D/00.pdf

139Sustainability Report 2023

Contents

Introduction

Management

Social (S)Environment (E)Governance (G)Recognition / Assurance

Corporate Governance | Risk Management | BCP / BCM | Strict Compliance | Information Security | Tax GovernanceRisk Management Structure
In accordance with the Rules on Risk Management, we have set

Fostering Risk AwarenessTraining, education

up a risk management structure under which theOur internal website posts a set of Rules on Risk Management

responsibilities for risk management are allotted to specificalong with a list of risks facing the Group, details on thedivisions in the head office based on the types of risk involved.

division-specific structures set up to address individual risks,

When a risk actually arises somewhere in the Group, theand various other risk management materials. This site is

responsible head office division coordinates with relevant

constantly updated to keep Group employees apprised of thebusiness divisions to minimize the negative impacts on businesslatest risk-related information.

and reports to the Board of Directors if the incident is severe.

Based on the division-specific risk management structure,

When emergency response actions are needed, the President &the responsible head office divisions spearhead Groupwide

Representative Director or the Executive Vice President &efforts to organize regular training and audits to foster employee

Representative Director is responsible for forming an emergency

awareness of the risks to be addressed. The impending risks

taskforce to properly handle the issue. The taskforce isfacing us include information and cyber security incidents,

composed of directors in charge of the relevant head officenatural disasters, infectious disease outbreaks, occupational

divisions, audit & supervisory board members, legal consultants,accidents, environmental issues, and compliance violations.

and other outside experts.

The TOPPAN Group ESG Management Promotion
Committee is a forum where officers from Group companies

Risk Management Liaison Meetingshare and pool their experience to deepen their understanding

All of the personnel in charge of risk management in the head

present risk management lectures for the committee members.

office divisions assemble on a regular basis to share information

The external directors on the committee also provide additionalat the Risk Management Liaison Meeting. When a risk actually

information and draw senior managers into discussions.

arises, the responsible persons from relevant head officedivisions convene an extraordinary meeting to take necessaryof ESG and SDG issues. Experts from outside of the GroupWe will continue to hold annual risk management seminars
and workshops at the committee.

actions and develop preventive measures.

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