Chapter 03

Foundations Supporting our BusinessCorporate Governance
Under the philosophy of the “Cycle of Goodness,” we strive to enhance our corporate governance system inan effort to further enrich our corporate value.

YKK philosophy —“Cycle of Goodness”
P4

Shareholders Meeting
Appointment and dismissal

Based on an organizational system in which the Board of Directors serves to make decisions on important

ReportAudit & Supervisory Board
Two of whom are outside auditors

Appointment and dismissal

Assesses Risks and Opportunities and Encourages
Creation and ExplorationYKK AP has established a Board of Directors as a body to oversee
the implementation of strategies and to make corporate
decisions. The Board deliberates and makes decisions on
investment strategies for business expansion and humanresource strategies. To ensure transparency and objectivity, theBoard of Directors includes members from YKK, and external
experts are added to the Audit & Supervisory Board in order toaddress increasingly complex compliance and risk issues. With
regard to important matters, in order to ensure that decisions
can be made through active discussion, the points fordiscussion are clarified at the Management Strategy Council
before being brought to the Board of Directors.
One aspect of materiality emphasizes employee engagement
at manufacturing sites. In general, discussions about work
styles tend to focus on office workers, leaving employees

Evolution 2030
P7

Research &Development Divisions

Internal Audit
Manufacturing and
Supply Divisions

Separation of management and execution(Execution of duties by directors, Operating Officer System)

Directors comply with the regulations of the Board of Directors and follow
the rules regarding director duties, and appropriately carry out businessbased on the division of duties. They regularly attend compliance training
offered by lawyers, etc., and submit to the company written oaths pledging
to comply with laws and regulations in performing their duties as directors.

Internal Audit Ofﬁce
Overseas Companies

Administrative Divisions

In addition, we have introduced the Operating Officer System to ensure thefaster execution of business and operations via the separation ofmanagement and execution. While directors dedicate themselves to realize
total optimization, operating officers execute individual businesses andoperations with responsibility and authority, in accordance with the policies
resolved in the Board of Directors meeting.

Main Committees for Executing Business/Duties
Key consolidated
financial data
P56

Compliance Committee

Corporate compliance system
P33
Risk management system
P34

Chair: Kosuke Iwabuchi (Director and Executive Vice President, General &Administration); Members: 15
Number of meetings in FY2022: 2

We work to improve the compliance system of our company and subsidiaries. A compliance director isappointed, and he reports to the directors and audit & supervisory board members regarding thedevelopment of the compliance system and compliance status.

Brand Management Committee

Chair: Koichi Ebihara (Executive Vice President, Sales & Marketing); Members: 26
Number of meetings in FY2022: 5
YKK philosophy —"Cycle of Goodness"
P4

Directors andBoard of Directors
P27

Carbon neutrality
P38-39This committee considers and formulates important policies for our company from a technicalstandpoint. It works to build the Company’s brand, practice corporate activities based on the “Cycle ofGoodness,” and enhance our public outreach.

Investment Committee

Chair: Kimihiko Yamada (Head of Accounting & Finance Department)
Number of meetings in FY2022: 11

The committee reviews and discusses investment economics calculations, costs of capital, free cash flow,
and sets ICPs for promoting carbon neutrality for significant investment projects. By going throughreview in the committee, these can be evaluated more efficiently by the Board of Directors meeting.

Environmental Policy Board Committee

Chair: Akira Uozu (President Representative Director); Members: 11

Number of meetings in FY2022: 1

Materiality
P20

Environment Committee

Risk-related Committees (5)We have appointed a Chief Risk Management Officer (CRO) to promote YKK AP’s risk management. We
established a Quality Committee, Trade Management Committee, Crisis Management Committee,
Information Security Committee, and Technical Asset Management Committee in order to maintain andenforce regulations.

Corporate Data

Toward a Board of Directors that Appropriately

Sales Divisions

Sharing of issues and policies

Instructions and supervision

Initiatives in the Value Chain

Message from the Chairman of the Board

Risk-related Committees (5)Operating Ofﬁcers

Delegation of
authority

Business Strategies for Growth

Hidemitsu Hori

Environment Committee

Foundations Supporting our Business

Chairman of the Board
Chairman Representative Director

Investment Committee

Collaboration

Ofﬁcers Meeting

Brand Management Committee

Execution of business and operations

Internal audit instructions

President

Compliance Committee

Dialog with employees
P32

Accounting Auditors

Representative Director

Management Strategy Council

Environmental Policy Board Committee

Collaboration

Value Creation

System, a framework that helps the company undertake the execution of business and operations.

Audit

Appointment and dismissal

Supervision

Board of Directors

Appointment and dismissal

Audit

Supervisory Board serves as the company’s auditing organization, we have adopted an Operating Officer

ReportSupervisionYKK Nomination
andCompensation
Committee

matters, such as the company’s management policy, and serves an oversight function, while the Audit &working in plants and factories out of the picture. However, as amanufacturing company, our employees on the shop floor are
our lifeline. I know through my own roundtable discussions
that each of them is a talented individual with outstanding
technical skills and knowledge. We are in the process of
discussing how to provide job satisfaction.
Discussions are also underway on measures to combat
climate change. In order to realize the "contribution to theglobal environment" set forth in President Uozu's "Evolution
2030" vision, we are considering ways to further accelerate fueltransition in Japan, such as switching to carbon neutral
methane and utilizing hydrogen and ammonia, andestablishing recycling technologies for discarded aluminumand vinyl.
It is also important to strengthen the Board itself. Our
company has always emphasized the importance of “continuing
to grow.” However, now that our share of the domestic windowmarket has exceeded 50% and net sales have reached 508.6
billion yen, it is difficult to expect the same growth as in thepast. To achieve our new targets, we need to create new
businesses both domestically and internationally, develop newmarkets, and make a giant leap forward from our current
growth curve.
In the future, large acquisitions and partnerships withforeign companies may also come into consideration. I myself
visit startups in Japan and abroad to explore new business
opportunities, and outside knowledge is indispensable inidentifying risks and opportunities. In light of this, we hope toappoint an outside director who is well versed in overseas
affairs within the next one to two years. Currently, the Board of
Directors is composed entirely of men, and we are considering
the appointment of female directors in order to have morediverse discussions at the Board meetings in the future. We arealso considering the implementation of evaluation of the Boardof Directors, including the methodology.
As Chairman of the company and of the Board, I willcontribute to a new vision for YKK AP.

Messages from Management

Corporate Governance System◎Quality Committee

Chair: Yoji Abe (Head of Quality Assurance Division); Members: 7
Number of meetings in FY2022: 4◎Trade Management Committee

Chair: Tetsuya Onodera (Head of International Division)
Number of meetings in FY2022: 3◎Crisis Management Committee

Chair: Osamu Anda (CRO); Members: 16
Number of meetings in FY2022: 3◎Information Security Committee

Chair: Tetsuya Komori (Head of IT Department); Members: 9
Number of meetings in FY2022: 3◎Technical Asset Management Committee

Chair: Toshiyuki Nakaso (Head of Fabrication Technology Department,
Manufacturing Division); Members: 9
Number of meetings in FY2022: 3

Chair: Shunichi Matsuda (Head of Safety & Environment Department); Members: 57
Number of meetings in FY2022: 4
Environmental management
P36-37The Environmental Policy Board Committee was established to develop our environmental policies andstrategies, and to supervise the progress of our environmental measures. Also, the Environmental
Committee promotes the policies of business execution divisions, plans and formulates measures, andsupervises their progress.
*Number of committee members as of June 2023.

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YKK AP Integrated Report 2023

25

Chapter 03

Foundations Supporting our Business

Members: 5 (including 2 outside directors)
Number of meetings in FY2022: 10

An advisory body established within YKK and independent of YKK AP that deliberates and reports on
the appointment and dismissal of directors, Audit & Supervisory Board members, operating officers,
and executive specialists of YKK and YKK AP, as well as their compensation.

Message from Chair of the Nomination and Compensation Committee

Enhancing Governance with a Highly Independent
Personnel Structure

Hidemitsu Hori

March 1985: Joined company
April 2013: Vice President
April 2021: Senior Vice President
June 2021: Director, Senior Vice President
April 2022: Director, Executive Vice President
April 2023: President Representative Director(Current)

March 1981: Joined Yoshida Kogyo K.K. (now
YKK)
1989 to 2006: Served in the U.S.A.
April 2007: Vice President
April 2009: Senior Vice President
June 2009: Director, Senior Vice President
June 2011: President Representative Director
April 2023: Chairman Representative Director(Current)
June 2023: YKK Director (Current)

Business Strategies for Growth

YKK Philosophy —"Cycle of Goodness"
P4
Management Principle
P5

Director and Vice Chairman

Shinichiro Yamaji

March 1981: Joined company
April 2009: Vice President
April 2013: Vice President
April 2017: Executive Vice President
June 2020: Director, Executive Vice President
April 2023: Director, Vice Chairman (Current)

Director
Executive Vice President, General &Administration

Kosuke Iwabuchi

March 1986: Joined company
1996 to 2009: Served in the U.S.A. and China
April 2009: Vice President
April 2016: Executive Vice President
June 2016: Director, Executive Vice President(Current)

Director
Executive Vice President, R&D and Technology

Director
CHRO (Chief Human Resources Officer)

July 1985: Joined Yoshida Kogyo K.K. (nowYKK)
April 2009: Executive Chief Engineer
April 2010: Vice President
June 2020: Director, Vice President
April 2021: Director, Senior Vice President
April 2022: Director, Executive Vice President(Current)

March 1981: Joined Yoshida Kogyo K.K. (nowYKK)
April 2009: Vice President
June 2016: Director, Vice President
April 2018: Director, Executive Vice President
October 2021: Director, Executive Vice
President, CHRO
April 2023: Director, CHRO (Current)

Shuichi Mizukami

Kazuo Matsutani

Initiatives in the Value Chain

The YKK Group has set up the Nomination and Compensation
Committee in YKK as an advisory body, and its members areappointed by resolution of the YKK Board of Directors. Theremay not be many privately held companies that have anomination and compensation committee. However, at thecenter of the YKK Group’s management principle, which was set
forth by Tadahiro Yoshida, the second president of YKK andfounder of YKK AP, is “fairness,” which forms the foundation of
the Value Action Standards. The idea that it is precisely because
the company is privately held that decisions should be madefairly and transparently is deeply ingrained in the Group.
Accordingly, an advisory board of outside experts wasestablished in 1998, and a Nomination and Compensation
Committee was established in 2008. The reason that YKK AP

Akira Uozu

Foundations Supporting our Business

Masayuki Sarumaru

President Representative Director

Chairman of the Board
Chairman Representative Director

Value Creation

Director
Chairman Representative Director,
YKK Corporation

does not have its own committee is to ensure that the entire
Group is on the same page and that governance is effective.
The Nomination and Compensation Committee consists of atleast three members, including one outside director of YKK,
and currently has five members, two of whom are outside
directors. To ensure independence, persons with executive
responsibility are not included as members. The Nomination
and Compensation Committeedeliberates on the election anddismissal of directors, Audit & Supervisory Board members,
operating officers, and executive specialists, as well as theircompensation, and reports back to the Board of Directors.
Regarding appointments, to ensure that the Board of
Directors can properly fulfill its role, we check the balance ofskills possessed by directors and formulate plans to appoint
appropriate personnel. Discussions are also underway
regarding skills matrices and the promotion of diversity, withthe goal of strengthening the Board’s governance andincreasing its effectiveness. When appointing directors, theNomination and Compensation Committee deliberates andformulates proposals under the basic prerequisite thatcandidates understand and practice the “Cycle of Goodness”
that is the Group's corporate philosophy. The Nomination andCompensation Committee also held repreated discussions of
this spring’s change of president, and formulated a proposal toappoint Akira Uozu to the position.
Compensation, meanwhile, is considered based on the sizeand status of the business, while also referring to industry
standards. In doing so, consideration is also given to changes tothe employee salary system.

Messages from Management

Directors and Board of Directors (As of June 2023)

YKK Nomination and Compensation Committee

Message from a Nomination and Compensation Committee Member

Corporate Data

Director (outside director), YKK Corporation
Professor Emeritus, Keio University
Professor Emeritus, Chubu University

Keinosuke Ono

Advancing Discussions on Governance Reform
based on Expertise

I have been involved in research and educational activities andin the administration of academic organizations for 50 years at
two different universities. In addition, through the graduate
school of management (business school) where I worked for 40
years, I have interacted with many business executives. In thiscommittee, I will provide opinions and discuss issues regarding
governance reform in a way that reflects the expertise I haveacquired through my own experience, including on issues suchas increasing the number of outside directors, defining theideal officer skills matrix, and clarifying the criteria fornominating officers and the system for determining theircompensation.

26

Director (outside director), YKK Corporation
Professor, Hitotsubashi University Graduate
SchoolErika Okada

I Hope to Give Advice as a Witness to Proper Process

I want YKK AP to be a company that creates new products andservices with high potential for the future, leading to thecreation of value for buildings. To this end, a long-term growthstrategy will be important. I see my primary role as an outsidecommittee member as being a witness to proper processes fornomination and compensation decisions, and I intend toprovide advice on these matters as needed.

Director

Director

March 1977: Joined Yoshida Kogyo K.K. (nowYKK)
April 2012: Vice President
June 2014: Director, Vice President
April 2016: Director, Executive Vice President
April 2022: Director (Current)

March 1981: Joined Yoshida Kogyo K.K. (nowYKK)
April 2001: YKK Vice President
April 2004: YKK Senior Vice President
June 2004: YKK Director, Senior Vice President
April 2009: YKK Director, Executive Vice
President (until June 2018)
June 2018: Director, Executive Vice President
April 2023: Director (Current)

Fumio Niizeki

Wataru Otani

Director
Chairman, YKK Corporation

Masayuki Sarumaru

March 1975: Joined Yoshida Kogyo K.K. (now
YKK)
1977 to 1994: Served in the U.S.A.
June 1999: YKK Vice President
April 2003: YKK Senior Vice President
June 2008: YKK Director, Executive Vice
President
June 2011: YKK President Representative
Director
April 2017: YKK Vice Chairman Representative
Director
June 2018: YKK Chairman Representative
Director (Current)
June 2020: Director (Current)

Director
Executive Vice President, Manufacturingand Head of Manufacturing Division

Hiroshi Abe

March 1985: Joined company
April 2014: Vice President
April 2021: Senior Vice President
April 2022: Executive Vice President
June 2023: Director, Executive Vice President(Current)

YKK AP Integrated Report 2023

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Chapter 03

Foundations Supporting our Business

Board of Directors Meetings in FY2022
Number of meetings

15 times (including extraordinary meetings)

Average number of agenda
items

8.25

Main agenda items andreporting items

Formulation of the YKK AP Human Rights Policy
YKK Philosophy —"Cycle of Goodness"
P4

Establishing a Human Rights Working Group topromote internal understanding
Compliance Committee
P33

Fuminao Hachiuma

Hisao Miyamura

March 1978: Joined Yoshida Kogyo K.K. (now
YKK)
2002 to 2008: Served in China
April 2008: YKK Vice President (until March
2018)
June 2018: Full-time Audit & Supervisory Board
Member (Current)

Audit & Supervisory Board Member
YKK Corporation Audit & Supervisory Board
Member (full-time)

Kiyotaka Nagata

March 1979: Joined Yoshida Kogyo K.K. (nowYKK)
April 2008: YKK Vice President
April 2009: YKK Executive Chief Specialist
June 2013: Outside Audit & Supervisory Board
MemberYKK Full-time Audit & Supervisory Board
Member (Current)
June 2016: Audit & Supervisory Board Member(Current)

Audit & Supervisory Board Member (outside)

Mina Sekiguchi

April 1993: Joined Arthur Andersen L.L.P. Dallas
OfficeJune 2022: Managing Partner, Resonancia LLC(Current)
Outside Director, Penta-Ocean Construction Co.,
Ltd. (Current)
July 2022: Outside Director, Trainocate
Holdings, Ltd. (Current)
September 2022: Auditor, Japan Atomic Energy
Agency (Current)
October 2022: Outside Director, EX4Energy, Inc.
(Current)
June 2023: YKK AP Outside Audit & Supervisory
Board Member (Current)

Corporate Data

April 1983: Joined Ajinomoto Co., Inc.
June 2013: Executive Officer of same
June 2015: Executive Officer & Vice President ofsame
J-Oil Mills, Inc.
President and Representative Director
June 2016: Representative Director,
President, and CEO of same
April 2022: Director of same (until June 2022)
May 2023: Outside Director, Seven & i Holdings
Co., Ltd. (Current)
June 2023: YKK AP Outside Audit & Supervisory
Board Member (Current)
Outside Director, Subaru Corporation (Current)

Audit & Supervisory Board Member (full-time)YKK AP Human Rights Policy

Human rights issues related to business activities

・Values・Prohibition of child and forced labor

・Scope・Commitment to human rights

The Audit & Supervisory Board, which consists of four Audit &Supervisory Board members, held 14 meetings in FY2022 toaudit the execution of duties by directors from the standpointof legality and propriety. They also attend major meetings suchas the Board of Directors Meeting, express opinions asnecessary, and visit each location to conduct audits inaccordance with the audit policy. Two of the Audit & Supervisory
Board members are invited from outside the company. With ahigh level of insight, experience, and expertise in corporate
management, they conduct audits from an objective and fairminded stance.

Initiatives in the Value Chain

Chair of the Audit & Supervisory Board
Audit & Supervisory Board Member (outside)In FY2022, the company established a Human Rights Working
Group (WG) as part of the Compliance Committee, and isstrengthening its efforts by integrating the human rights
initiatives from our past business activities into the entire
company. In addition to promoting understanding of thecurrent situation through assessment of new human rights risks
and evaluating their level of importance and severity, fromFY2022 to FY2023, we are conducting video training on“Business and Human Rights” for all employees to raiseawareness of human rights and promote understanding within
the company.

The YKK Group implemented the “YKK Group Whistleblowing
System” in 2006, establishing a system that enables individuals
to consult with/report to consultation desks inside and outside
the company anonymously regarding behavior that violates
laws, work regulations, or internal rules. We are working to
make all users aware of it. In addition, from the perspective ofprotecting whistleblowers, we have prohibited treating
individuals disadvantageously due to their consultation.
By aiming to prevent the occurrence of illegal actions and toaddress them quickly if they do occur in the process ofconducting business activities, the whistleblowing system isintended to serve as a structure for firm compliance. In addition
to establishing a “grievance mechanism” to provide relief tothose involved with the company from human rights violations
arising from corporate activities, etc., we have also established aconsultation desk to address workplace environment, mental
health concerns, and the mental and physical health of ouremployees.
We have also implemented whistleblowing systems atoverseas companies and have established a system for
consultation/notification.

Business Strategies for Growth

Audit & Supervisory Board and Members (as of June 2023)

In accordance with the “Cycle of Goodness” approach, we
respect the human rights of every individual stakeholder inevery country and region. In FY2023, the YKK AP Human Rights
Policy was formulated in line with the revision of the YKKGroup Human Rights Policy . YKK AP has set out its own Human
Rights Policy Statement that, while sharing the fundamentals of
the YKK Group policy, takes into account the human rights
issues that arise in relation to YKK AP’s business activities.
Accordingly, we will further strengthen our efforts to fulfill our
corporate social responsibility by appealing not only to ouremployees but also our business partners.

Operation of a whistleblowing system and continued
activities to increase employees’ awarenessFoundations Supporting our Business3.2 hours
・Matters related to the Shareholders Meeting
・Matters related to directors, operating officers, andexecutive specialists
・Matters related to personnel and organizations
・Matters related to business・Matters related to the disposal and transfer ofimportant assets
・Matters related to subsidiaries and major affiliatedcompanies

Approach to and engagement with human rights

Value Creation

Average time per meeting

Messages from Management

The Board of Directors deliberates and resolves on importantmatters, determines management policies, and supervises theexecution of business operations. Currently, the Board has 10
directors (no more than 10 members), and the main results ofdeliberations in FY2022 are shown on the right. In order topromote active discussions, important matters are discussed at
the Management Strategy Meeting before being brought up at
the Board of Directors’ meeting, external Audit & Supervisory
Board members (outside experts) attend and state theiropinions, and the chairman, president, and Audit & Supervisory
Board members exchange opinions (three times in FY2022).
In order to improve the function of the Board of Directors, weare considering appointing not only Audit & Supervisory Board
members but also outside officers as directors to increase theBoard’s transparency going forward.

Human Rights and Human Resources

・Organization and governance・Human rights due diligence
・Human rights education

・Corrections and remedies

・Ensuring transparency/communication

・Maintaining initiatives for respecting human rights

・Prohibition of discrimination, harassment, and abuse・Respect for freedom of association and the right to collective
bargaining

・Understanding of customs and compliance with laws andregulations
・Respect for diversity
・Health and safety
・Hours and wages

The details of YKK AP Human Rights Policy are available on our website.
https://www.ykkap.co.jp/company/jp/sustainability/humanrights/

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YKK AP Integrated Report 2023

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Chapter 03

Foundations Supporting our Business

Human Resources Strategy

YKK AP has issued the “Diversity & Inclusion Declaration” with the aim of utilizing the diversity of human resources to create new value

We are working to create systems and environments in which each and every employee can demonstrate their full potential.

In particular, as priority issues, we are striving to strengthen the hiring of female employees and support their career development,

value,” and “development and retention of innovative human resources” as our priority issues, and by improving our human resource

and increase our future competitiveness in the international community.

The “AP Women’s Career Development Program, a careerdevelopment support program for female employees under the
6th Mid-term Management Plan, provides support for the longterm career development of participants through various
training programs such as career training, internal exchange
meetings, and the operation of a mentor system. In FY2022,
256 people, who were recommended from each workplace as
candidates to be leaders in the future, participated.

Diversity initiatives
Step 1 (Past)

Step 3 (Future Vision)

Focus on superﬁcial characteristics

Create value

Management from diversity to value creation

Compliance with laws/rules
Educational
background Labor Standards Act
Act on Stabilization of Employment of Elderly
Persons●

GenderAct on Securing, etc., of Equal Opportunity andTreatment between Men and Women in Employment
Act on Promotion of Womenʼs Participation andAdvancement in the Workplace (2016)

Promotion of the active participation of women; promotion of women for management
positions/section manager-level positions● Management positions: FY2022: 122 → FY2024 targets: 140● Section manager-level positions: FY2021: 447 → FY2024 targets: 500

Nationality

Immigration Control and Refugee Recognition Act(Illegal employment)●

Disabilities

Act on Employment Promotion etc., of Persons
with Disabilities

Workingstyle

Labor Standards Act

Abolition of mandatory retirement age system: Hiring regardless of age, gender, or nationality

Creating opportunities for people with disabilities that leverage their capabilities:
FY2022: 2.32%→ FY2024 targets:2.50%

Achievement of work-life balance● Encouragement of male employees to take childcare leave: FY2022:73.2%● Encouragement to take paid vacation: FY2022:71.3% → FY2024 targets:80.0%● Total actual working hours / FY2022: 1,974 hours

Voice Comments from AP Women's Career Development Program participant*Period of employment

Matching business strategies
with human resources

Qualiﬁcation
allowance(Retention)(YKK AP)Internal
certiﬁcation system[New]

Incentives to acquire public
qualiﬁcations(Lump-sum payment)

A base for individual
capacity development(Across YKK AP Group)

Distance learning subsidies(Fully paid)

training program for self-development, and subsidize the costfor employees who wish to attend. Moreover, with the abolitionof the mandatory retirement age system and the decision ofwhen to retire being left to the individual, the company
provides “career training” for employees to reflect on their own
careers.

Diagram of the Training Scheme for FY2023
OFF-JT

OJT

Voice Comments from an employee who took childcare leave

Businessskillstraining

Global training

Specialized
training

Job-speciﬁctraining

SD
SelfdevelopmentYKK AP English training

Distance learning, e-learning, etc.

Incentive scheme for acquiring public qualiﬁcations

Improving vocational and monozukuri skills

Improving sales proposal capability

Improving technology and product appeal

Compliance training

Anger management training

Evaluator training

Overseas
trainees

Selection based on business issues

Management training

Cross-industry exchanges (technical and external)

Language (English) study abroad

Global training

MBA/MOTInter-cultural management

EMBA

Graduate school dispatch program

Regular hires
induction training

Value Creation Academy

Business basics training

Career training

Fourth year training
Work report meetings

Supervisor sessions

OJT training for
new section managers

Womenʼs
Careerleader training design training

I took a year of childcare leave after the birth of my second and thirdchildren, a set of twins. I am grateful for the strong support I received
from my workplace, including the creation of a backup framework for theentire organization. I was also impressed by the fact that operations werestreamlined to fill the holes left by my absence, and the organization wasstronger upon my return. I did not feel too rusty after returning to work,and I am now in a role with more responsibility than I had before I tookchildcare leave.

Training for
new senior section managers

Womenʼs career development
support program

Takayuki Wakana

Advanced management
seminarMid-career hires induction training

Nationwide Accounts,
Special Accounts Department

Purpose-speciﬁc training

Selective leader
Indepen development
dence
training

Level-stratiﬁed training

Three-year,
one-person program

30

Enhancement of work and life

General employees

I participated in AP Women's Career Development Program for two years
between 2021 and 2022. Listening to the stories of senior employees
working in management positions while experiencing childbirth andchildcare, as I did, I realized that the important thing is to establish systems
that allow both family and work to run smoothly. Through this experience, I
have been able to think from a higher perspective in terms of how to utilize
limited resources and how to develop human resources as an organization.

Utilize the characteristics ofindividuals, create new value,and contribute to business

Qualiﬁcation allowance(Application)(YKK AP)We are enhancing our internal training system to develop
personnel who can contribute to our business and organizationand improve their individual skills. In addition to the “Value
Creation Academy,” which aims to develop the business leadersof the future, level-stratified training for newly appointed
managers, we have established a six-month English language

Intentional, systematic, and sustained teaching and development of the abilities
necessary for job performance through work

Sari Sasaki

Equal role
Equal results
Equal treatment

Management positions

Product Development, International Business,
Product Research & Development Division

Building and strengthening
the foundation of ourbusiness operations

Corporate DataAge●

We have been working toward an appropriate wage level that iscompetitive in the market, and in FY2022, in light of thegovernment's wage hike policy, yen depreciation, and risingconsumer prices, we revised salaries upward by an average of
3% for general employees and provided all employees with a
special lump-sum payment. In FY2023, in addition to theprovision of specific duty allowances and other benefits under
the newly established internal certification system, we arerevising salaries upward by an average of 6%. In encouraging
the acquisition of qualifications, we are expanding the system
by removing the age limit for eligibility and increasing thequalification allowance.

Enhancement of training systems

Hiring of human resources with a variety of career backgrounds; fair evaluation

Proactive hiring of foreign nationals

Expansion of qualification allowances and support for qualification acquisition

Initiatives in the Value Chain

Step 2 (Present)

Accept diversity

Salary revisions, allowances for specific duties, andqualifications

Business Strategies for Growth

We are working to create an environment and design systems
that enable a diverse range of personnel to play an active role,such as easing restrictions on dual/secondary employment andintroducing a shortened working hours system. In FY2022, we
also conducted a “Job Satisfaction and Workplace Diversity
Questionnaire” to ascertain the actual situation regardingbalancing work and nursing care. Going forward, we will work
to reduce anxiety over nursing care and improve the ease ofbalancing it with work.

Promoting the active participation of womensystem and implementing a human resource strategy, we will realize a pleasant and fulfilling work environment.

Foundations Supporting our Business

Creating a work environment for a diverse range of
personnel to play an active role

In FY2023, we have set “efforts to improve employee engagement,” “development and training of human resources to create new

Value Creation

as well as to expand and entrench the employment of persons with disabilities.

Messages from Management

Promoting Diversity

YKK AP Integrated Report 2023

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Chapter 03

Foundations Supporting our BusinessDialog with employees

corporate officers, at least two hours of compliance training isprovided to all employees each year. For persons heavily
involved in compliance work, we also provide education in
specialized fields led by the relevant specialized departments
and committees (HR, purchasing, environmental safety
management, trade management, information security,
technical asset management, the environment, etc.).

We have established a Compliance Committee to promote theYKK AP Group corporate compliance system. Divided into fiveunits, this system promotes the compliance activities of YKK AP
and affiliated companies. Each unit is working independently toenhance monitoring, including compliance with rules,
regulations, and guidelines.
In addition to regularly holding compliance training for

FY2023 Corporate Compliance System

Foundations Supporting our BusinessIn order to develop new areas and fields that contribute tosustainable growth, in FY2022, under the leadership of the
CHRO (Chief Human Resources Officer), we held an internal callfor new business themes and the leaders who will be
responsible for promoting them. Employees of all ages
contributed ideas that were not confined to existing businessfields, and three leaders were selected from among them towork toward the commercialization of these ideas. In FY2023,
they will be assigned to the newly established “New Business
Development”, where they will further evolve their proposal
topics and search for new business themes.

Corporate Compliance System and Education

Value Creation

We hold “roundtable meetings,” in which the president andother directors engage in direct dialogue with employees, aswell as site visits and interviews, in which employees fromheadquarters and business units gather information on issues
in various regions and workplaces. Employee feedback
obtained through dialogue is being reflected in a variety ofmeasures, including the establishment of a career consultation
desk and the introduction of a “shared mentor system.” In
addition, the YKK Employee Stockholding Association holds a
biannual meeting to report on business results and for
employees to ask questions of the directors.

Open call for new business themes and promotion
leaders

Messages from Management

Compliance

Board of Directors
Compliance Committee

YGCC Promotion Subcommittee

Secretariat: Compliance Promotion Ofﬁce/
Legal & Intellectual Property Department

Human Rights Working Group

Sales units

their fields of expertise.

Implementing
bodyAdministrative units

Overseas units

Executive Vice President
in charge/Division head

Executive Vice President incharge/Division head

Executive Vice President incharge/Division head

Executive Vice President incharge/Division head

Chief Supervisor

Chief Supervisor

Chief Supervisor

Chief Supervisor

Chief Supervisor

Promotion Supervisor

Promotion Supervisor

Promotion Supervisor

Promotion Supervisor

Promotion Supervisor

Individual divisions

Product development,
technical research, etc.

Individual factories/
plantsExecutive Vice President in charge/
Division head

Voice Comments from an employee who obtained a PhD

Manufacturing andsupply units

Individual branches/Sales ofﬁces
Business divisions under
the presidentʼs management

Operational
divisiondepartments

Headquartersfunctional
divisions

Overseas companies
Initiatives in the Value Chain

Individual policy departments

Environment, Energy and Analysis Technology
Group,
Technical Research Division

Yohei Tsukamoto

I received my Ph.D. from the Graduate School of Kobe University, where
I conducted research on methods for predicting the sound insulation
performance of double-glazed windows. Sound insulation testing toevaluate windows’ sound insulation performance can be very costly andtime-consuming. For double-glazed windows with significant soundinsulation effects, I conducted a study based on the theory of doublepanel sound insulation and proposed a practical method for predicting
sound insulation performance. I hope to continue working on internal andexternal architectural acoustics issues and contribute to the creation of
comfortable spaces.

Standards for Compliance Activities: “YKK Global
Criteria of Compliance”

In FY2019, YKK AP introduced the YKK Global Criteria ofCompliance (YGCC), the YKK Group’s compliance standards
based on the YKK Philosophy and ISO 26000, and the adoptionof the YKK Global Criteria of Compliance at major sites in Japanand overseas was completed in FY2021. From FY2022 onward,

we have been promoting the establishment of YGCC operation
while accommodating new business sites.
We regularly carry out YGCC audits such as self-inspection
and internal audits. Standardized monitoring contributes toreduction of on-site workloads by eliminating duplicate
monitoring items.

Corporate Data

Aiming to develop the next generation of business leaders, we
dispatch employees to graduate schools (PhD/master’s
programs) in Japan and overseas and provide support for MOT/
MBA study abroad. Research topics are not limited to ourcurrent business, and we also proactively recommend themesthat will become even more critical in the future, such as
robotics, AI/machine learning, DX, next-generation
environmental response, etc. We aim for diversified ideas as anorganization by helping employees to gain specialized
knowledge and a multifaceted perspective that expand beyond
the framework of the company. We dispatched 14 employees in
FY2022, for a cumulative total of 31 employees.
Further, in addition to recommending the acquisition of
doctorates, etc., we are implementing collaboration between
recipients, with organizations within the company, and with
universities and research institutes, and we operate the “AP PhD
Holder Association” with the aim of further revitalization. In
FY2022, YKK and YKK AP PhD holders held a technical exchange
meeting to share technical information and technical issues in

Committee
members

Research &development units

Business Strategies for Growth

Graduate school dispatching and MOT/MBA
overseas studies

YKK Global Criteria of Compliance (YGCC)
Seven Core Themes
Related to ISO 26000

Health Management

We view the health of our employees and their families as amanagement issue, and under our “Health Declaration”
adopted in 2018, we have promoted the establishment of ahealthy environment, etc., to reduce lifestyle-related diseases
and control psychological disorders. As such, we have beenrecognized as a “2023 Certified Health & Productivity
Management Outstanding Organization (Large Corporation
Division).”Details of the YKK AP Health Declaration are available on the website.
https://www.ykkap.co.jp/company/en/sustainability/health/32

We have also established a health consultation service both
inside and outside the company to promote the maintenanceof employee physical and mental health. Inside the company,
employees can consult with industrial physicians at businesslocations and nurses at health management centers, at any
time. We also work with external organizations to provide
appropriate mental healthcare for employees throughcounseling by e-mail, by phone, and via remote interviews.

Details of Human Rights and Human Resources are presented in our Sustainability Data Book. (in Japanese only)
https://www.ykkap.co.jp/company/jp/sustainability/data/social/(1) Organizational Governance(2) Human Rights(3) Labor Practices(4) Environment(5) Fair Operating Practices(6) Consumer Issues(7) Community Involvement
and Development

Customer Requests
Supplier Code of Conduct

Corporate Activity GuidelinesYKK Group Commonalities(1) Management System

Items Speciﬁc to YKK APʼs Business(3) Working Hours and Wages(5) Environment(6) Fair Business Practices(7) Contract Construction Work・Business Licenses

・Working Hours

・Environmental Management System

・Fair Competition

・Management System

・Social Compliance Policy

・Wages and Beneﬁts

・Energy Consumption and・Anti-Bribery

・Labor Conditions

・Social Compliance Committee(4) Health and Safety

Greenhouse Gas Emissions

・Conﬁdential Information Protection

・Hours and Wages

・Opinions from the Employees

・Health and Safety Management System

・Water Use

・Non-Competition Obligation

・Health and Safety

・Whistle-Blowing System

・Emergency Planning & Fire Safety

・Waste Water Discharge and Efﬂuents・Personal Information

・Environment

・Compliance Violations

・Medical Services

・Waste Management

・Intellectual Property

・Fair Business Practices(2) Labor Conditions

・Sanitation/ Hygiene

・Atmospheric Emissions

・Accounting and Tax Preparation

・Child Labor

・Physical Hazards

・Chemical Management

・Antisocial Forces

・Forced Labor

・Chemical Hazards

・Supplier Management

・Discrimination

・Structural Integrity

・Foreign Trade

・Discipline, Harassment or Abuse

・Dormitory and Canteen

・Subcontracting

・Freedom of Association and Collective Bargaining
・Regular Employment/ Employment Contract

Details of Compliance are presented in our Sustainability Data Book. (in Japanese only)
https://www.ykkap.co.jp/company/jp/sustainability/data/governance/
YKK AP Integrated Report 2023

33

Chapter 03

Foundations Supporting our Business

Strengthening of the risk management system

We assess the risks surrounding the business and create a risk
map according to changes in the environment, the urgency of
response to the risks, and the expected scale of damage. In
FY2022, we reviewed our risk map from the following threeperspectives: (1) reviewing risk items including key risks, (2)clarifying risk levels, and (3) identifying efforts by related

YKK AP has formed five risk committees to enhance the risk
management system and establish a governance system for
emergencies. We have also created regulations for eachcommittee and are operating them accordingly.
In FY2022, with the aim of improving preparedness forincreasingly diversified risks and strengthening our measuresfor business continuity (BC), we changed the persons

Response to main key risks

Trade Management Committee

Crisis Management Committee

Information Security Committee

Technical Asset Management CommitteeCore Departments
International Division
Subcommittees/WGs
Machinery and Engineering Export WG

Core Departments
Risk Management Ofﬁce
Subcommittees/WGs
Safety Conﬁrmation System Development
Subcommittee
Earthquake, Fire, and Flood Prevention Subcommittee
Infection Risk Subcommittee
Public Relations SubcommitteeCore Departments
IT Department
Subcommittees/WGs
IT Subcommittee/Cyber Security Subcommittee
Personal Information Management Subcommittee
Education SubcommitteeCore Departments
Product Research & Development Division
Technical Research Division
Manufacturing Division, Fabrication Technology Department
Subcommittees/WGs
Conﬁdential Information Leak Prevention WG
Drawing Management WG
Critical Technology Management WG
Education Subcommittee

Business Units (5)Strengthening of company-wide, speciﬁc initiatives

Development and Technology

Manufacturing and Supply

Secretariat

Administration

Secretariat

Secretariat

Manufacturing Division
Safety & Environment Department
SCM Department

Functional Divisions of Headquarters
Operation Division
New Business DevelopmentYKK AP R&D Center

Factories/Plants

Headquarters Functions(Tokyo/Kurobe)

Initiatives

Initiatives●●

In the event of a disaster, a company-wide BCP task force headed by thepresident is established. BCM Committee members will serve as theheads of BCP task forces for their respective functions, and will oversee,
direct, and generally manage the emergency response.
●The Crisis Management Committee, which oversees the entire company
as an organization to deliberate and decide on policies and measures forbusiness continuity, with the head of each functional unit serving as amember of the BCM Committee, will be responsible for handling thesituation.

Secretariat
International Division
Overseas Afﬁliated Companies

Overseas Afﬁliated Companies

directly between home and work sites, the CRO led the
distribution of a “Natural Disaster Risks and Countermeasures”
video via a web-based internal newsletter.
We are also enhancing our ability to quickly identify and addressrisks in procurement. In addition to purchasing materials frommultiple suppliers, understanding and improving the supply
chain, and securing inventories of critical management items incase of emergencies, the research and development, manufacturing,and purchasing divisions work together to set up alternative
sources of supply, and other efforts taking the BCP into account are
conducted from the product development phase.

Material procurement
P51

Vice President, CRO

Osamu Anda

Measures and initiatives to address risks in procurement
Risks

Countermeasures

Weather and disasters (earthquakes, typhoons, cold spells, etc.)

Alternative materials,
multi-company purchasing, inventory

Politics (wars, conﬂicts, economic sanctions)Exclusion from purchasing

Economy (supply-demand balance, exchange rates)

Alternative materials,
multi-company purchasing, inventory

Ethical and legal issues (human rights, the labor environment,
information security, subcontracting support)

Exclusion from purchasing,legal compliance

Supply chain (legal compliance, competitiveness, stable supply)

Inspection, evaluation, restructuring“We aim to build a resilient organization.”

Initiatives

Materiality
P20(1) Selection of alternative materials(2) Multi-company purchasing system(3) Inventory measures(4) Cost reductions, sale prices, and other business strategies(5) Conclusion of agreements on the Basic Transaction Principles (7) Implementation of CSR surveys(6) Change of internal systems(rules and regulations, appraisals)(8) Changes in the management system forcontracted and temporary employees(9) Supply chain restructuring(10) Compilation of BCP data

Establish and operate an IT-BCP (including at domestic and overseas
affiliated companies)●Implement IT security management measures (cyber security and SIRT
response)●Strengthening response by setting up subcommittees in the Information
Security Committee for specific roles.

Corporate Data

In preparation for disaster and risk occurring, we haveformulated BCPs at all locations in Japan and overseas. In
addition, for the purpose of prompt implementation of the
BCPs, in FY2022 we reviewed and updated the BusinessContinuity Management (BCM) Regulations. In FY2023, weplan to further instill this along functional axes and on aregional site basis.
We carry out regular disaster drills every year to increase theeffectiveness of the BCPs. In addition, in FY2022, in response tochanges in work styles, such as telecommuting and commuting

Overseas

Company secrets and other confidential information may be lost or leaked
due to computer virus infections, unauthorized access, or other causes. In
addition, cyber attacks, outages of telecommunication services, etc., could
bring down information systems and shut down all our businesses.
With the recent progress of DX and the expansion of remote work,
information systems have more network connection points with internaland external parties than in the past. Environmental changes haveheightened the possibility of disruption of business activities due to forced
shutdowns or loss of corporate secrets, etc., caused by malicious external
intrusion into information systems.

Initiatives in the Value Chain

Product Research & Development Division
Technical Research Division
Quality Assurance Division

BCP initiatives

34

External environment and potential risks(information security)

Business Strategies for Growth

Quality CommitteeCore Departments
Quality Assurance Department
Subcommittees/Working Groups (WGs)
Quality Information Integration WG
Digital Product Development andQuality Assessment WG
Risk Assessment Revision WG

Divisions/Branches/
Domestic Afﬁliated Companies

External environment and potential risks

Damage caused by large-scale earthquakes, windstorms, or flooding at ourbusiness sites, or similar damage at our business partners, etc., may lead toslowdowns in our business activities.
Natural disasters may result in the death or injury of employees,
damage to facilities, etc., leading to reduced production capacity, as well as
replacement and restoration costs for equipment, company buildings,
warehouses, and production lines, etc. In addition, there is a risk thatbusiness activities may be hampered by outages to critical infrastructureand disruptions to logistics. These slowdowns may lead to customers andbusiness partners moving to competitors.

Risk Management Ofﬁce

Risk-related Committees (5)Commercial Business Division
Residential Business Division
Exterior Business Division
Global Curtain Wall Business Division
Special Accounts Department
Industrial Products Department

Cyber attacks

Foundations Supporting our Business

Board of Directors/
Management Strategy Council

CRO

Secretariat

Threat of natural disasters(earthquakes, tsunamis, typhoons, torrential rains)

FY2023 Risk Management System

Sales

Value Creation

responsible for individual organizational units (Executive Vice
Presidents and Division Heads) from “Crisis Management
Committee Members” to “Business Continuity Management(BCM) Committee Members.” We will enhance our resilience bystrengthening cooperation between individual divisions andthe Risk Management Committee, preparing a business
continuity plan (BCP) for ordinary circumstances, and ensuringsmooth operations in the event of an emergency.

divisions to address key risks.
Risks that have a significant impact on our business are
positioned as key risk items, and as a result of this review, thethree items of “cyber attacks (information security),” “supply
chain (changes in the economic environment),” and“environmental regulations” were upgraded in risk rank, andspecific measures are now being implemented.

Messages from Management

Risk Management

Risk map development and selection of key risks

To realize one aspect of materiality, a “Resilient Business
Foundation,” in FY2022, we reviewed and updated our BusinessContinuity Management Regulations for the first time in eight
years. We are aiming to acquire appropriate business continuity
capabilities for major contingencies, with the goal of promptly
implementing an initial response and BCP on an all-hazards
basis, including in the event of major natural disasters, severingof the supply chain, cyber accidents, spread of infectious
diseases, etc.
I believe that in the implementation of risk management
activities, it is important to secure the human resources toperform the work. Going forward, we are planning to strengthen
both operational and physical aspects of the BCM
implementation framework in each country and region,
including the implementation of education and training
programs for all employees, and the provision of centralized
information. In addition, in order to develop human resources
with a high sensitivity to risk, we have established a team,consisting mainly of young employees, which will take an activerole in addressing risk. We will further strengthen our
foundation by enhancing our efforts made during ordinary
circumstances.

Details of Risk Management Resources are presented in our Sustainability Data Book. (in Japanese only)
https://www.ykkap.co.jp/company/jp/sustainability/data/governance/
YKK AP Integrated Report 2023

35

Foundations Supporting our Business

Chapter 03

Environmental Management[Environmental Issues] Research, Development,
and Veriﬁcation●

Environmental initiatives

Material
Procurement

Development of products as measures against climate change● Scope 3: Reduction of CO2 emissions by 20%

Climatechange

Resource recycling
●

Water

Installation[People]Product Use

Contribution of a 149% reductionof CO2 through high thermal
insulation products (relative to FY2020)● Scopes 1 + 2: Reduction of CO2 emissions by 36%● Achievement of zero-CO2 model factories●

Customers● Aluminum: 39% recycling rate for external products● Utilization of outside company
Vinyl windows (APW scrap): 100% internal recycling rate
scrap from vinyl windows● Reduction of waste emissions by 32%(relative to FY2016)● Reduction of packaging materials●

Showrooms linked
to the community

Society

Education of thenext generation● Contribution to the
local community●

Development of products as measures against damage from windstorm and ﬂooding● Reduction of total water usage by 32%

Foundations Supporting our Business

Employees●

Biodiversity●

Achievement of hexavalent chromium-free products● Achievement of factories that are in harmony with local nature

Environmental
activities with everyone
participating

Disclosure of information under the TCFD recommendations

Business Strategies for Growthpresident, formulates and approves environmental policy andstrategy from a management perspective. Under that policy, the“YKK AP Environmental Committee” incorporates theenvironmental policy into sales, research & development,
manufacturing, management, and overseas divisions.
In addition, to confirm the progress of these environmental
policies and environmental compliance, we conduct annualinternal environment audits. We have also acquired ISO 14001
certification at all locations in Japan and at eleven locations
overseas, and are continually working to increase the level ofenvironmental management. In April 2023, we were certified
as an “Eco-First Company” by the Minister of the Environment
in recognition of our position as an environmentally progressive
company in the industry.

Sales

Value Creation●YKK Group has established the “YKK Group Environmental
Vision 2050,” which maps out the long-term orientation of ourenvironmental initiatives. Under this policy, YKK AP has
established its vision for 2050 of “achieving zero environmental
impact in our business activities throughout the entire productlifecycle.”
In the Mid-term Environmental Policy for FY2021 to FY2024,
we have set environmental targets for the entire value chain
with the aim of resolving and contributing to the resolution of
the environmental issues of “climate change,” “resource
recycling,” “water,” and “biodiversity,” and are working toachieve them.
As the structure for promoting these activities, the “YKK AP
Environmental Policy Board Committee,” chaired by the

Manufacturingand Logistics

Messages from Management

FY2024 environmental targets (relative to FY2013)YKK AP has endorsed the Task Force on Climate-related Financial Disclosures (TCFD) since FY2019.

In relation to both climate-related risks and opportunities, we conduct scenario analysis of the impact on our business and finances andYKK AP Environmental Management Policy (FY2021 to FY2024)

reflect the results in our management strategies.

With the intention to make a better society and environment for the next generation,YKK AP will take on the challenge of creating new value and achieving zero environmental burden, through technical innovation.
We will strive to contribute to resolving environmental issues throughout the value chain and reducing the environmental burden.

●

We will address climate change, resource recycling, water, and biodiversity as environmental issues.

●

We will create new environmental value with an eye toward the future, on a foundation of diverse human resources

Governance

YKK AP has a Board of Directors as the decision-making and oversight body for important matters such as management policy, an Audit &Supervisory Board as the company’s auditing organization, and an Operating Officer System to help the company promote the execution ofbusiness and operations.
In particular, sustainability issues are addressed by the “ESG General Meeting,” chaired by the president, which conducts cross-functional
activities by formulating policies from a company-wide perspective and rolling them out to related divisions and domestic and overseas
group companies.
The Environmental Policy Board Committee, which is chaired by the president and has jurisdiction over the environmental area within the
ESG General Meeting, formulates and approves environmental policies and strategies, including on climate change, from a management
perspective, and monitors their progress. The “Environment Committee” rolls out these environmental policies and strategies to ourmanufacturing and sales sites in Japan and overseas, and confirms how they are being implemented through mutual internal environment
audits.
In line with TCFD recommendations, we are identifying and assessing the significant risks and opportunities that the issue of climate change
poses to YKK AP.

The history of YKK AP’s environmental activities and future vision for 2050

Type

1990

1995

2000

2005

2010

2015

The 5th Mid-term Environmental Management Policy

Observance ofcompliance

Response to recyclingoriented society

Response tosustainable society

2020

Response tosustainable society

Simultaneous pursuit of businessgrowth and the environment

・Establishment of the YKK AP・Creation of a sustainable society

・Development/promotion ofCreating environmental value at allstages of the lifecycle

・Increasing the level of eco-products; ・Increased contribution to the・Establishment of the environmental ・Continued reduction of the・Global activities to reduce the・Response to/compliance withenvironmental laws and regulations
management structure

・ISO 14001 certiﬁcation (the ﬁrst

certiﬁed in YKK AP: M&E Center(1998))

Environmental Committee
eco-products

through products and monozukuri
improving societal recognition(outside awards)

・Enhancement/visualization ofenvironmental burden (energy
conservation, 3Rs, chemical agents)
energy policy; utilization of naturalenergy・Environmental communication andeducation

・Creation of an environmental

management system

・Strengthening of communication

inside and outside the company

2030･･･2050

The 6th Mid-term Environmental Management Policy

Low-carbon, resource recycling,
coexistence with nature[YKK Group Environmental
Pledge (1994)]

Corporate Data●

Initiatives in the Value Chain

Creating environmental value at every stage of the lifecycle: Toward a brighter future for nature and humanity

reduction of CO2

environmental burden

・Environmental activities witheveryone participating(Year)

Long-term goals

Transition risks

Strategy
Physical risks

Achievement ofa sustainable society
Decarbonization, circulation,
coexistence

Achievement of “zero environmental
burden” throughout the entire
lifecycle in business activities

・Achievement of zero CO2

throughout the lifecycle in products
and monozukuri

・Use of renewable/recyclable

materials

・Expansion of coexistence withnature and the community

Opportunities

Financial impact on YKK AP

Reputation

Loss of corporate value due to delay in responding to public demands, such as carbon neutrality

UrgentIncreased damage from natural disasters, supply chain fragmentation

MarketChronic
Products/
Services

Increased costs due to energy resource depletion

Reduced earnings due to higher average temperatures causing higher air conditioning costs at
company plants and higher raw material prices
Restrictions on business activities due to water shortages caused by reduced rainfall
Increased demand for high thermal insulation products

Increased demand for carbon-free and recycled-resource products (e.g., recycled aluminum)

Risk management

Risks related to the business as a whole are assessed and reviewed once a year, prioritized by “size of loss” and “frequency of occurrence,” andeach risk is managed by the relevant committee. Climate change-related risks (natural disasters, environmental regulations, etc.) are also
identified as key risks and incorporated into the management process, with policies developed and monitored on a global basis by theEnvironment Committee and the Crisis Management Committee.

Indicators andtargets

In order to achieve carbon neutrality, we have set medium- and long-term goals certified by Science Based Targets initiative (SBTi) andformulated an environmental action plan to achieve them in conjunction with our mid-term business plan. Progress is disclosed in the
Integrated Report and Environmental Report.

・Social Environment Report (since

2005)

36

YKK AP Integrated Report 2023

37

Chapter 03

Foundations Supporting our Business

Lifecycle of YKK AP products and CO2 emissions

Upstream

Installation Use

Resource
extraction

Disposal

Evolution 2030
P7
Products and services toaddress social issues
P19

Recycling

Reclamation and reuse

Scope 3

Scope 1, Scope 2

Raw materials
Business partners

Collection

Scope 3

Used at YKK AP
Fuel (Scope 1)
Electricity (Scope 2)Distributors
Customers

Contributions to CO2
reductions throughhigh thermal insulation
products

Contributions to CO2 reductions through high thermal insulation products sold in Japan

In the supply chain as a whole, procurement of materials (refining, etc.) under Scope 3
accounts for a large proportion of emissions, and aluminum materials account for a large
proportion of these

Sales of high thermal insulation products can be said to contribute to CO2 reductions insociety as a whole(kt CO2)

2,100

Logistics, installation, disposal, etc.
Capital goods
Iron 3%

Stainless steel 1%
Wood 1%Glass 4%

Scope 3Composition:84％

Purchasedmaterials
1,566

vs FY2020
185%

900
800

vs FY2020
149％

700
vs FY2020
117％

600
500

Aluminum
87%

864

400
548

300

Scope 2
230
Composition:11%
Scope 198
Composition:5%
CO2 emissions in FY2021(Japan + overseas)vs FY2020
127％

Proportion of CO2 emissions
from purchased materials

200

594

2020

2021

CO2 emissions
from the average
household per year.
Equivalent to
250,000 households*
Calculated as 2.74 tons
per household.
From the Ministry of theEnvironmentʼs “Statistical
Survey of CO2 Emissions
from the Household
Sector” (2021)

468

100

0

Aluminum, also known as “electricity
in a can,” requires a large amount ofelectricity for electrolysis to refine it fromraw materials such as bauxite. However,
because aluminum can be remelted using
only a small amount of energy, aluminum
recycling plays a very important role in
reducing CO2 emissions.

696

Corporate Data

Vinyl 4%

(kt CO2)

Initiatives in the Value Chain

Breakdown of YKK AP’s CO2 emissions (FY2021)

Business Strategies for Growth*Scopes 1, 2, 3: From the conceptual schema of the GHG Protocol, a global calculation standard*Contributions to reductions:Windows themselves do not directly generate greenhouse gases, but contribute to reductions in energy used for
air-conditioning
Contributions to reductions themselves are not included in Scope 3

Foundations Supporting our Business

38

Logistics

Increased
contributions

Scope 3 emissions account for the majority of the CO 2
emissions associated with YKK AP’s business activities acrossthe supply chain as a whole. Of these, emissions from the

Research & Development,
Manufacturing, and Sales

Zero impact

Scope 3 initiatives

Downstream

Contributions
to reductions

We are working to reduce the amount of fuel used in our
manufacturing processes. In addition to improving theefficiency and energy-conservation performance of our
production facilities, we are electrifying our heat source
equipment and switching from liquid fuels to natural gas.
Furthermore, we are using existing technologies to develop anddemonstrate the use of hydrogen, ammonia, and othersubstances in our gas burners.
As such, we are working on both energy saving and energy
creation. In terms of energy creation efforts, we are working to
introduce solar power generation (installed on rooftops, fields
etc., at seven plants and factories in both domestic andoverseas), hydroelectric power generation (using the power ofwater flowing through pipes), biomass power generation andboilers (using wood waste produced during manufacturing forin-house consumption), and wind power generation (using
exhaust wind inside factories). We have tripled our investment
in renewable energy relative to FY2020 levels and are stepping
up our efforts accordingly.
In order to measure our progress in reducing CO2 emissions,
we established a database to visualize CO 2 emissions byidentifying the energy consumption of each piece of equipment
at the manufacturing stage. In product development, we haveintroduced the “Environmentally Friendly Design Evaluation
Sheet,” which relates CO 2 emissions to evaluation criteria
during design and development.

procurement of materials used in the manufacture of products
account for 80% of the total. In particular, the procurement(mining, refining, and overseas transportation) of aluminum
ingots used for aluminum products and other products has asignificant impact, and increasing the utilization rate of recycledmaterials (re-used raw materials such as aluminum scrap
recovered from the market) will have the greatest impact
toward achieving carbon neutrality.
All aluminum scraps generated in the manufacturing process
are reused, and we have already achieved an internal recycling
rate of 100%. We also aim to achieve a 100% recycling rate formarket-obtained aluminum scrap generated outside thecompany. In September 2023, an aluminum recycling furnace
will start operation at the Shikoku Plant, and we plan to install
the same equipment at other manufacturing sites in the future.
In addition, we will work toward technical progress inaluminum recycling through co-creation between industry,
government, academia, and the private sector. We are involved,
as the lead company, in the “Creation of a Toyama Resource
Recycling Society Model,” an industry-academia fusion hub
concept project to revitalize aluminum-related industries inToyama Prefecture, led by the University of Toyama.
In regard to logistics, we have introduced double-trailer
trucks for transportation over land, increasing the amount ofcargo transported at once by 1.8 times the previous level. By
introducing “trunk line relay transportation,” which includes
consolidating transportation routes and improving loadability
by combining partial loads, “secondary delivery,” which includes
joint delivery and alternate-day delivery, and “modal shift,”which includes using railroad containers, we are making
ongoing efforts to reduce CO2 emissions.

Raw materials andSmelting and components
Logistics
reﬁning
EnergyEmissions

Scope 1 and 2 initiatives

executive vice president as project leader. A carbon neutral
technology roadmap has been developed, and six working
groups, with young engineers participating, are developing
technologies to achieve decarbonization.
Furthermore, by reducing the energy used for heating andcooling through the popularization of high thermal insulation
products, we will contribute to carbon neutrality not only for ourown company but also for society as a whole.

YKK AP

Value Creation

We have set our own greenhouse gas reduction target for
FY2030 at 50% below the FY2013 level. In February 2021, thistarget was certified by the international organization Science
Based Targets initiative (SBTi). Under the “Evolution 2030”
vision, YKK AP aims to reduce its emissions by 80% by FY2030
and by 100% by FY2040, and we will strengthen our efforts toachieve these goals ahead of the certified schedule.
In FY2021, we launched the “Carbon Neutral Project” with an

Messages from Management

Taking on the challenge of carbon neutrality

2022

2023
(Plan)

2024 (Fiscal year)(Plan)*Applicable products (equivalent to sustainable products)
Vinyl windows: APW 430, APW 330, PLAMADO H
Composite windows: APSWORD, APW 410
Vinyl inner windows: Mado Remo - PLAMADO U Inner Window
Thermal insulation doors: InnoBest, Venato D30, Kantan Door Remo, Concord S30
Commercial building thermal insulation windows: EXIMA 37, EXIMA 77, APSWORD
NEO-LB*Conventional products[New construction] Aluminum windows + insulating glass, aluminum doors[Remodeling] Aluminum windows + single glass*The FY2024 plan is the mid-term plan developed in FY2021.

YKK AP Integrated Report 2023

39

Chapter 03

Foundations Supporting our Business

Taking on the challenge of a circular economy

Developing and disseminating digital technology
for smart factories

Implementation of guidelines for environmentallyfriendly design
IoT devices
RobotsEquipment

Data models

Design / Development
Product design

Equipment designand development

Virtual factory

Feedback ofsimulation results

Design /Development Simulation

Digital twinAI

XR

Processes

Operators
AI

XR

Fabrication technology
Factory layout

Individual
manufacturing process

Real-time interlinking ofacquired data

Data collection

Platform

Plant design
Process simulations
Data analysis

Data use

Corporate Data

To minimize CO2 emissions throughout the supply chain, wedeveloped the ”Environmentally Friendly Design Guidelines” in
FY2022.
Five items that contribute significantly to CO 2 reduction
during the product lifecycle are “visualization of CO2 emissions,”“standardization of packaging materials,” “visualization ofenvironmentally hazardous substances,” “ease of disassemblyand separation,” and “environmentally friendly design
guidelines and evaluation methods.” These items indicate YKKAP’s approach and policy regarding environmental considerations,and efforts are underway to evaluate and improve its products.

Smart factory

Initiatives in the Value Chain

We are also actively engaged in recycling the vinyl produced
during the manufacturing process for vinyl windows and afteruse. We have installed crushing and sorting equipment at eachof our vinyl window manufacturing sites, and by reusing thematerials as raw materials for vinyl profiles and gaskets*2 forinsulating glass, our internal recycling rate improved to 28% in
FY2022.
We are working with industry and academia to build anindustry-wide system to collect and recycle vinyl windows in themarket, including participation in the “Reviewing Committee
for Recycling of Used Vinyl Windows,” (Vinyl Environmental
Council, etc.), which was established in 2019.

RPF production equipment (Kurobe Ekko Plant)

Business Strategies for Growth

Toward improved vinyl recycling rates

Foundations Supporting our BusinessOur company is promoting 3R activities * 1 (reduce, reuse,recycle waste, etc.). In FY2021, we installed RPF (Refuse derived
paper and plastics densified fuel) production equipment at the
Kurobe Ekko Plant. In the past, waste plastics such as film andlaminate, as well as used paper, were used as raw materials, butfrom FY2022, the range of waste used will be expanded toinclude wood waste, thereby promoting the conversion of waste
into valuable resources. We reduced the total amount of waste
product in Japan and overseas in FY2022 by approximately
25% relative to FY2016.

YKK AP is promoting smart factories to increase its competitivenessin the global market, and is working to improve the operational
availability of its equipment through digital transformation(DX). In addition, through DX, we aim to increase productivity
by improving efficiency in all departments, including sales,development, manufacturing, and administration, and areworking to achieve transformation into a company with “thespeed and flexibility to respond to changes.”
In order to strengthen research and development in thedigital field, YKK AP Technologies Lab (NA) Inc. was establishedin June 2022 to undertake research and development on

virtual factories and other fundamental reforms. Specifically, we
are introducing digital technologies such as IoT devices, 5G,
and AI to create engineering and supply chains in virtual space
for the purpose of digital twinning, as well as training global
personnel capable of implementing change.
In addition to basic research on drones, 3D printers, and AI
image analysis, the Digital Strategy Department is also
developing plans and conducting trials for operational use,which is expected to be applied in various fields such as sales,development, and manufacturing. Hands-on digital experience
events are being held to spread awareness of these initiatives
within the company.

Value Creation

Installation of RPF production equipment andexpansion of operations

Messages from Management

DX Promotion

Hands-on digital experience events
Industrial waste recycling rate (manufacturing sites)
100％

99

100

100

100

100

100

100

97

98

99

99

99

99

99

91

91

91

91

90％

89

86

80％
70％

Waste output (manufacturing sites)
Extent of Coverag:YKK AP Group (Japan and overseas)

(kt)

25

20

20.5

Recycling

19.3

Landﬁll

18.3

16.9

15

76
YKK AP Group (Japan)
YKK AP Group (Japan and overseas)YKK AP Group (overseas)

60％

15.4

15.9

15.4

2020

2021

2022 (Fiscal year)

10

5

50％

2016

2017

2018

2019

2020

2021

2022 (Fiscal year)*1 3Rs: Reduce, Reuse, Recycle*2 Parts used to fit glass into sashes

0

2016

2017

2018

2019

Hands-on digital experience events for employees are held todeepen their understanding of digital technology, generate
ideas for business applications, and develop digital humanresources capable of driving DX.
In FY2022, events were held both at real-world venues (twolocations), where participants could operate and experience
actual equipment, and on the web (at a Metaverse venue),
where remote participation was possible. Going forward, weplan to hold these events at locations around the country. We
will continue to work toward the realization of DX while creating
an environment in which employees are able to make use ofdigital technology.

Employees try their hand at operating a drone at an event

Events were also held at a Metaverse venue

Details of Environmental Management are presented in our Environmental Report. (in Japanese only)
https://www.ykkap.co.jp/company/jp/sustainability/environment/report2023/

40

YKK AP Integrated Report 2023

41