CHIYODA GROUP

Sustainability Report 2018

Chiyoda Corporation

Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku, Yokohama 220-8765, Japan
Please direct inquiries
about this Sustainability Report to:
IR, PR & CSR Department

TEL : (81) 045-225-7741
E-mail : Chiyoda_CSR@chiyodacorp.com

Overseas Subsidiaries and Offices & Major Domestic Group Companies

Corporate Profile (as of March 31, 2018)
Chiyoda Corporation

Company Name

Number of Employees

6,176 people (Consolidated)

Main Business Fields

Engineering and Construction

Main Offices

Chiyoda Global Headquarters (CGH)
Koyasu Office & Research Park

January 20, 1948

Established

43,396 million yen

Paid-in Capital

Chiyoda’s Global Network (Major Overseas Subsidiaries and Offices)■Milan Representative Office■Abu Dhabi Office■Chiyoda - CCC Engineering

Revenues

Net Income (Losses)

The Netherlands

Revenues by Region (FY2017)(Pte.) Limited■Tehran Representative Office

Italy

21.5%

134
6,115 6,037

5,899
4,810

■ Overseas
78.5%

110

64

7%

3%

10%
-411
2013 2014 2015

■Chiyoda Petrostar Ltd.

2016 2017 (FY)2013 2014 2015 2016 2017 (FY)

71%

2%

Editorial Policy

The Chiyoda Group provides comprehensive reporting on its CSR activities, including detailed information presented on the Chiyoda
Corporation website.
In addition, the Group has published this digest version of the Group’s FY2017 report, highlighting the latest activities.
The contents of these reports are elaborated and compiled from the perspective of the Chiyoda Group Corporate Philosophy and CSR Values
in collaboration with the members of the Group Liaison Meeting on CSR and those responsible for CSR in Group companies in Japan andoverseas. For further details, including particulars on governance, please refer also to the below websites and other sources.
■ Applicable Period: FY2017(April 1, 2017 to March 31, 2018, unless otherwise specified)■ Website
Sustainability■ Website
Corporate Governance Policy
https://www.chiyoda-corp.com/
company/les/160623_CGPr.pdf

Chiyoda Group Sustainability
Comprehensive
reporting on the website
Sustainability
Report
FY2017 activity
highlights

Reference
Annual Report
Annual reports focused primarily on
financial information are published in
English for shareholders and investors
overseas. They also introduce major
topics relating to CSR activities.
This is our Communication on Progressin implementing the principles of theUnited Nations Global Compact andsupporting broader UN goals.
We welcome feedback on its contents.

CHIYODA GROUP Sustainability Report 2018

The Chiyoda Corporation has
been
includedinthe
FTSE4Good Index Series,
designed by FTSE Russell(United Kingdom), index ofsocially responsible investment.

■ Group Companies Covered by the Report
The scope of this report extends to all Chiyoda Group companies. The
names of Group companies are given in an abbreviated form in thereport. Regarding those abbreviations, please refer to the details below.
Arrowhead International Corporation (AIC)
Choyoda International Corporation (CIC)
PT. Chiyoda International Indonesia (CII)
Chiyoda Philippines Corporation (CPh)Chiyoda & Public Works Co., Ltd. (CPW)
Chiyoda Singapore (Pte.) Limited (CSL)
L&T-Chiyoda Limited (L&TC)
PT. Suluh Ardhi Engineering (SAE)

Indonesia

MozambiqueUSA■Beijing Office■Chiyoda Corporation (Shanghai)■■Chiyoda International

Corporation■Chiyoda Philippines Corporation■PT. Chiyoda International Indonesia■L&T-Chiyoda Limited

Brazil■■Chiyoda Mozambique

Australia

Limitada■Chiyoda Oceania Pty. Ltd.

■Chiyoda Human Resources International (Pte.) Limited■Chiyoda Singapore (Pte.) Limited■Chiyoda do Brasil

Representações Ltda.

■Chiyoda Malaysia Sdn. Bhd.

Engineering■ Chiyoda Kosho Co., Ltd.

Engineering, construction, and maintenance of industrial equipment andfacilities of every type; insurance business, etc.

http://www.cks-ykh.co.jp/■ Chiyoda System Technologies Corporation

Engineering, procurement, construction, and maintenance of electrical,
instrumentation, and control systems; consulting, development, andoperation of integrated IT systems; business relating to social infrastructures■ Chiyoda TechnoAce Co., Ltd.

Consulting, planning, design, execution, test
operation, and other services for civilengineering and construction work on
pharmaceutical and petroleum facilities

http://www.cta.chiyoda.co.jp/

http://www.cst.chiyoda.co.jp/■ Arrow Business Consulting Corporation

Business
Support■ Chiyoda U-Tech Co., Ltd.

Consulting and business outsourcing for finance, accounting, and tax
services

Feasibility studies and consulting for energy,oil, chemical, and environment-related plants
as well as other various types of industrial
facilities■ Arrowhead International Corporation

Travel agent, air cargo, materials export, and other related services

https://www.utc-yokohama.com/

http://www.arrowhead.co.jp/

INDEX■ Date of Publication: October 2018

Corporate Profile and Editorial Policy

Reference
Chiyoda Group CSR Handbook
This Handbook is a compilation of the ‘Corporate Philosophy,’‘Business Vision,’ ‘CSR Values,’ ‘Code of Conduct,’‘Compliance Manual (Employee’s Practical Guide),’ and othersuch basic policies of the Chiyoda Group. It is made public on
the Group website and is also widely known among employees
through the internal education.
The Chiyoda Corporation
has been included as one of
the constituent companies
in the FTSE Blossom Japan
Index designed by FTSE
Russell (United Kingdom).

Philippines

Engineering LLC■ LNG Plants■ Gas Development/
Processing/Receiving■ Refinery/Petrochemical/
Metals■ Pharmaceuticals/
Biochemistry/Chemicals■ Environment/New Energy/
Infrastructure■ Others

Japan●Chiyoda Global Headquarters

Thailand
Malaysia
Singapore■Chiyoda Almana■ CSR Activity Report Policy

https://www.chiyoda-corp.com/csr/

India
Myanmar

Revenues by Industry (FY2017)7%2017 (FY)

Qatar UAE

Doha Office

34

2016

Saudi Arabia

China

Iran

■Middle East Headquarters

3,012

2013 2014 2015

■ Domestic

5,109

3,518

1

■Korea Representative Office

Korea

7,468

4,036

■ Operation Support Base■Chiyoda (Thailand) Limited■Chiyoda Corporation Netherlands B.V.

UK

4,461

■ Project Execution Base■Chiyoda & Public Works Co., Ltd.

■Xodus Group (Holdings) Ltd.

Consolidated Financial Highlights(One Hundred Million Yen)
New Orders■ Engineering Center■ Procurement Center

Over 60 countries worldwide

Project Experience■ Sales Base

The Chiyoda Corporation isthe constituent company of
SNAM Sustainability Index.

Overseas Subsidiaries and Offices &Major Domestic Group Companies • INDEX

1

3

The Chiyoda Group: 70 Years of History

5

The Story of Value Creationby the Chiyoda Group

7－A Grand Opportunity for the Future－

Technology and businessmodel innovation

CSR Management

15

01

Value 1
A Reliable Company

17

Value 2
Environmental Initiatives

19

Value 3Social Contributions

21

Value 4
Respect for Human Rights

23

Value 5
Commitment to Fairness

25

2

Top Message

EnergyEnvironmental
Solutions
Solutions
Mirai Engineering

Feature: ‘Mirai Engineering’ – A Grand Opportunity for the Future
Energy Project
Operations Division

9
02

03

Global Environment
and Green Energy
Project Operations
Division

11

ChAS and Digital
Technology Project
Operations Division

The Chiyoda Group’s Social
Contribution Activities

13

Messages from Stakeholders

27
29

CHIYODA GROUP Sustainability Report 20182

Top Message

The Chiyoda Group’s Corporate Social Responsibility (CSR)
Arising from the backgrounds, the Chiyoda Group is pursuing business under the declared
Corporate Philosophy of ‘harmony between energy and the environment.’
We have made a commitment to the 10 principles of the UN Global Compact*2 that we joined in2012, and complied with the imperatives to assure safety, protect the environment, correct disparities,
respect human rights, prevent corruption, as well as contribute to local communities, and so on in ourbusiness activities. In the course of our business, we have devoted ourselves to grasping just what isrequired by the times and our stakeholders, and using engineering as our tool to create value, we haveworked toward the sustainable development of society.
The Sustainable Development Goals (SDGs*3) adopted by the United Nations in 2015 and the Paris
Agreement represent shared global goals, and corporations are also being strongly called on to takemeasures through their business to resolve global issues. In addition to taking initiatives that form thefoundation for CSR, the Chiyoda Group will work toward realization of a carbon-free society that
achieves a balance between climate change countermeasures and economic growth, fulfilling themission of an engineering company to bring about the resolution of social issues by means of technology
and human capital, and continue aiming to improve corporate value.

To Achieve Our Ultimate Goal, ‘a Reliable Company’

The Chiyoda Group’s Backgrounds as a Social Entity
Ever since the Chiyoda Group was founded in 1948, we have been contributing to society withengineering that makes use of technology we have kept refining. From then up to today, when wecelebrate the 70th anniversary of our founding, we have been making contributions to the growth ofJapan’s energy and chemical industries by means of plant construction. We have also taken measures
for the global environment by developing and commercializing technology for plants to prevent air
pollution, treat wastewater, and so on. We have made every effort to provide the optimal infrastructure
to meet the requirements of every era and region, and to contribute to the growth of society with ourtechnology and human capital*1.

President & CEO

As our corporate activities have been increasingly global, we
are dedicated to developing the circumstance in which not only
employees but also all the other stakeholders such as
customers, business partners and local communities canparticipate and play an active role, regardless of their gender,
nationality, age or religion in a spirit of respecting human rights,
above all.
The Group has also introduced the Chief Officer Systemstarting in FY2018, and has appointed a Chief Human
Resources Officer (CHRO), a Chief Compliance Officer (CCO),
and a Chief Sustainability Officer (CSO). With the above activities
further integrated into our business management, and with themedium-term management plan we announced in FY2017 in thename of ‘Mirai Engineering – A Grand Opportunity for the
Future,’ the entire Group will act together for responding todiversifying energy demand together with sustainable global
environment and society. As a global leading company, we willcontribute to the achievement of a sustainable society by meansof engineering.

*1: In the Chiyoda Group, human resources are a valuable asset and are referred to by the term ‘human capital’.
*2: UN Global Compact was announced by then UN Secretary-General Kofi Annan in an address to the World Economic Forum
held in 1999. It is a principle-based framework for businesses, stating ten principles in the areas of human rights, labor, theenvironment and anti-corruption. Chiyoda has signed up in UN Global Compact in 2012.
*3: SDGs are a set of global goals to be achieved by 2030, adopted at the UN Sustainable Development Summit in September
2015. They are common goals for the international community, consisting of 17 goals and 169 targets, for both developed
and developing countries to tackle to eradicate poverty and realize a sustainable world.

3

CHIYODA GROUP Sustainability Report 2018

CHIYODA GROUP Sustainability Report 2018

4

Execution of LNG mega projects
Execution of projects in the gas value chain■ Development and demonstration operation of environmental conservation technology■ Development of renewable energy-related business■ Participation in photovoltaic and solar thermal power
generation projects■ Development of SPERA Hydrogen® System technology
for large-scale transportation of hydrogen■ Expansion of overseas licensing of fluegas desulfurization technology■■

The Chiyoda Group: 70 Years of History
We were founded in 1948, during the period when Japan was starting to
make powerful moves toward its postwar recovery. With ‘serving society
through technology’ as its founding motto, the company has kept
■ Start environmental initiatives in conjunction with domestic
moving forward in accordance with the Corporate Philosophy of
economic growth‘harmony between energy and the environment’ and in unswerving■ Respond to the diversification of plant demands led by oil
producing countries
awareness of the requirements of the global community. Having■ Overseas expansion shifts into high gear in line with promotion
entered the 70th year since our founding, we are aiming toof Group-wide internationalization
become the new leading engineering company that works■ Start initiatives for laboratory facilities projects
with technology and passion to create the future of■ Construct desulfurization units for the petroleum refinery■ Receive consecutive domestic orders for flue gas
energy and the global environment.
desulfurization units

1948 Founding of Chiyoda Corporation
Contributions to the postwar reconstruction of Japan’s domestic industry■ Participation by means of engineering in oil and petrochemical industries■ Start establishing footholds for overseas expansion 1948

G

■
■

ning

Daw
The Chiyoda Group
History

1948

1948
Construction to rebuild the Kawasaki petroleum refineryof Mitsubishi Oil Co., Ltd. (present JXTG Energy)■

New petroleum refinery for Mitsubishi Oil Co., Ltd.
Ammonia and urea plant for India

■

1960

1960
■

Jeddah and Riyadh petroleum refineries,
Saudi Arabia■

Petroleum refineries for Nigeria
Tsukuba Research Institute
Upjohn Pharmaceuticals Limited

■

■

h
rowt

01
Mizushima grass-roots refinery. Courtesy of Mitsubishi Oil Co., Ltd.

Project to build new Mizushima grass-roots refinery for Mitsubishi Oil Co., Ltd.

5CHIYODA GROUP Sustainability Report 2018■

Accelerate pursuing LNG projects
Participate in national oil stockpiling projects

nce

ge
esur

ition

ans
& Tr

1980
1980
R

■

Copper smelter for P.T. Smelting Co.
Arun natural gas liquefaction plant for Pertamina(Indonesia)■

Fukui national petroleum stockpile base■

Projects that Served
as a Foundation for
Development

v

De
ther

Fur

nt

me
elop

2000
2000

Toward Further
Value Creation

CT-121 Bowen 3 SGR JBRPhotovoltaic power generation facility for Mitsui & Co., Ltd.
■ Qatar Gas Operating Co., Ltd.
■ Mizushima LNG receiving terminal for Mizushima LNG Co., Ltd.
■ Sakhalin Energy Investment Co., Ltd.
■■

02

Qatargas (Qatar) LNG Plant (Trains 1 and 2)

Qatar LNG Project‘The project was to excavate the broad expanse of reclaimed land,
down to the grass roots, and build a modern petroleum refinery, theconstruction of a grass-roots refinery was starting to get underway in
October 1960.’
Our company started out in 1948, during the postwar period in Japan,
proclaiming our commitment to making contributions to the postwar
reconstruction of Japanese industry by means of technology. Since executing
the contract for construction to rebuild the Kawasaki refinery of Mitsubishi Oil
Co., Ltd., we have been implementing projects for domestic oil and chemicalcompanies.
The Mizushima grass-roots refinery contract we were awarded in 1960
involved construction in a single phase of a 22,500 BPSD atmosphericdistillation unit and a 20,000 BPSD vacuum distillation unit as well as
the complete range of ancillary facilities, including oil storage tanks,
utility facilities, and product shipping facilities. For that period, this was a■‘We build on distant desert lands.
The completion of construction on
Trains 1 and 2 represented a first stepin the industrial developmentof the State of Qatar.’

Major Projects
and Technology
Development

Projects that Served
as a Foundation for
Development

Accelerate overseas expansion and move to global operations■ Expand into fields of general industrial facilities andnon-ferrous metals■

noteworthy construction project for a major refinery of a new type. Our workat the phase 1 construction was led by the Mizushima site office with 90
personnel, and as a result of the uninterrupted efforts of the entire company,
the project was completed in October 1961. An opening ceremony washeld with the Director of the Mining Division of the Ministry of International
Trade and Industry now and many other guests in attendance.
We were then employed to continue as the contractor to phase 3 ofconstruction, building up our reputation as an engineering, procurement,
construction (EPC) contractor. This provided the foundation for subsequent
expansion of our operation as we entered a period of internationalization
centered mainly on oil producing countries.

In 1993, we were awarded a project for a liquefied natural gas (LNG)
plant by Qatargas. This was a large-scale project in the Ras Laffan districtof northern Qatar for two LNG lines and one optional line with annual
production of two million tons, at that time among the largest in the world,
for a total of $2.3 billion. For our company, this was the first full-fledged
grass-roots LNG plant construction project. Construction began with thebuilding of a 30-km access road to the site, and it required the construction
and operation of a camp that at its peak housed 10,000 construction
personnel from 20 countries. The camp included a full range of facilities,
such as power generation, desalinization, and other such utility facilities,
as well as sports facilities, an outdoor movie theater, clinic, mosque, bank,fire department, and so on. The project ended up on a large scale thatexceeded ¥10.0 billion in value. Construction involving the installation ofas much as 25,000 tons of piping, a 55-m long cryogenic heat exchanger
forming the main part of the plant, and so on was executed safely andefficiently, achieving no accident and no disaster record of 9 million
continuous hours. As the result of the combined efforts of the whole
company, two lines of the plant were completed in January 1997, aheadof the construction schedule, and a ceremony marking completion of
construction was held locally on February 24, with Sheikh Hamad, Emirof Qatar, and several hundred concerned parties from both countries inattendance. The third line was completed in 1998, and in 1999 the project
was chosen by the American Project Management Institute to be the firstproject of the year outside of North America.

In 1992, the Chubu Electric Power Co., Inc. of Japan concluded
a long-term contract for the annual purchase of 4 million tons of LNG
over a 25-year period, the first such contract in Japan. This triggered theparticipation of many other Japanese corporations, and the project was
realized as a result. As a symbol of the friendship between Qatar and Japan,
various dignitaries made visits to the site while construction was in progress,
including the Crown Prince and Princess of Japan, who were on a tour ofthe Middle East, the Crown Prince of Qatar, the Minister of Energy & Industryof Qatar, and so on. Qatar places great importance on the relationshipwith Japan, and when the Great East Japan Earthquake struck in 2011,
Qatar donated $100 million, established the Friendship Fund, and provided
assistance to affected areas. Chiyoda’s performance on this project wasvalued highly, and the company was retained as the EPC contractor on LNG
projects for Qatar. We have completed all seven trains for Qatargas andfive trains for the RasGas Company totalling 70 million tons of capacity, andQatar has become one of the world’s greatest LNG exporting countries withan annual production of 77 million tons that contributes to its prosperity.
At present in Qatar we are constructing a further three trains of LNG
production facilities with 7.8 million tons of capacity that are to be finishedby the end of 2024. The plan is to expand production volume to 100 million
tons. In March 2018, we were awarded the contract for the front-end
engineering design (FEED) work on this expansion plan. We will continue
making contributions to the development of Qatar and to the stable supply
of LNG with a low environmental impact.

CHIYODA GROUP Sustainability Report 2018

6

The Value Creation Story by the Chiyoda GroupThe Chiyoda Group pledges to continue as an enterprisethat optimizes the use of the cutting-edge technology andhuman resources to create value for society.
Our Corporate Philosophy proclaims ‘harmony between
energy and the environment,’ and we are pursuingbusiness with our CSR Values as shared values.
In order to respond to the requirements of global markets
and communities, we aim to be a global top-tier provider ofcomprehensive engineering services in both energy andenvironmental fields by implementing our Medium-Term
Management Plan ‘Mirai Engineering - A Grand
Opportunity for the Future’.

Realization of the Corporate
Philosophy- The Mission for us to Accomplish Enhance our business in aiming for harmony between
energy and the environment and contribute to thesustainable development of a society as an integrated
engineering company through the use of our collective
wisdom and painstakingly developed technology.

2017-2020

Medium-Term Management Plan

‘Mirai Engineering’– A Grand Opportunity for the Future

Energy Solutions- Build Energy Value Chain Business -Environmental- Expand Global

Solutions
Environmental Engineering Business -• Achievement of SDGs

ISO26000
United Nations Global Compact● SDGs● Paris Climate Agreement● United Nations Convention on Biological Diversity●●

GlobalStandards

The Chiyoda Group’s
CSR Values
1. A Reliable Company
2. Environmental Initiatives
3. Social Contributions
4. Respect for Human Rights‘Mirai Engineering’－A Grand Opportunity for the Future－
At the Chiyoda Group,
we are aiming to become the new leading
engineering company that works with technology
and passion to create the future of energy and theglobal environment.

Technology and Business
Model Innovation- Develop new business model for a digital society -5. Commitment to Fairness

Initiatives in 2017-2018
Human Rights
Anti- Corruption● Global Warming● Economic Disparity● Appropriate Employment● Individual Issues in Local Communities● Securing Energy Resources●●

Social Issues

7

CHIYODA GROUP Sustainability Report 2018

• Enhancement of Corporate Value

What are the SDGs (Sustainable Development Goals)?
These are goals that need to be realized by the year 2030 in order toachieve a sustainable development of society. They consist of 17 major
goals and 169 targets that were adopted by the United Nations General
Assembly in September 2015 to provide a basic framework for action in
the international community of both developing and developed countries.
In this report, we are reconfirming our own corporate activities anddisplaying icons for the relevant goals side by side with such activities.

The Chiyoda Group Supports the SDGs.

• Appointed Chief Sustainability Officer (CSO)• Established the Decarbonization
Advancement Office

CHIYODA GROUP Sustainability Report 20188

Feature:‘Mirai Engineering’ – A Grand Opportunity for the Future

01 Energy Project Operations Division

Business Development
1

Our Mission

Large EPC projects on going

Support the revenue base of the Chiyoda Group,
respond to diverse energy demand,and aim for a sustainable society
The Business Environment■ Natural gas demand centered in Asia is increasing. New large-scale LNG*1
project FIDs*2 are anticipated.
■ Crude oil supply-demand balance has improved as an effect of cooperative
production cuts and growth in demand from developing countries.
■ There is continuing investment and development in petroleum andpetrochemical projects derived from an oil or gas shale in the US.
*1 LNG: Liquefied natural gas*2 FID: Final investment decision

Ichthys LNG Project onshore processing facilities at Bladin Point, Darwin. Photo courtesy of INPEX

2 Promoting creation of energy value chain businessIn the LNG field, which is fundamental for us, we will further
expand our position as a top LNG contractor by strengthening
our capabilities throughly and expanding our lineup in order to
respond to diversifying needs. In addition, we will realign ourbusiness in upstream areas and aim to assure stable revenue inthe area of offshore facilities.

We will continue providing value to society and building a stable revenue baseby engaging in LNG plant construction and developing the energy value chain.
LNG has CO2 (carbon dioxide) emissions approximately
25% less than oil for energy with a lower environmental impact.
LNG is expected to realize both climate change measuresand economic growth while it finds expanding use as a fuel forthe transition toward future achievement of a carbon-freesociety.
Since Chiyoda started working on its first LNG plant in the
Middle East in the 1970s, we have built the equivalent of about
40%*1 of the LNG plants in countries around the world. We haveestablished our firm position as an EPC*2 contractor and also
contributed to ‘harmony between energy and the environment.’
By means of plant construction, we
have also contributed to stabilizing the
economic base of Qatar and other gas
producing countries, and recently won the40%of world EPC projects

Career Summary
Joined Chiyoda in 1977. Qalhat
LNG Project Director, 1999.
Concurrent Director of Gas Value
Chain Project Division, 2006.
Qatargas 3 and 4 Project Director,
2007. Concurrent Director ofOverseas No. 3 Project Division,
2009. Senior Vice President
and Director, Overseas Gas and
LNG Operations Division, 2013.
Director, 2017. Current position
since April 2018.

Mamoru Nakano

Executive Vice President, Operations Director
Energy Project Operations Division
and General Manager, Gas and
LNG Project Department

contract for front-end engineering design of a large new LNG
plant in Qatar. Based on this record of performance and ourrelationship of trust with gas producing countries, we willcontinue building our foundation for stable revenue as a top
contractor in the LNG field and aiming for a sustainable society
while addressing diverse energy demands.
Going forward, we will work to expand the LNG value chain
through such projects as small-mid scale LNG, floating LNG
power vessels, and so on. We will play a key role in providing astable supply of energy with a low environmental impact tocontinue promoting global environmental protection.
As for the overseas petrochemical field, the infrastructure
field, and the metals field, where Chiyoda also has a record ofachievement, we will take steps to steadily expand our businessby ascertaining the markets in these fields. Meanwhile, working
in collaboration with other divisions, we will further take steps fortechnological innovation and cost reduction through the use of
the IoT and AI in the energy field, and in addition we will create
value in environmentally friendly areas of business. This will
involve participation in various areas of technology, including
lithium ion batteries, which are items related to renewableenergy, storage batteries, and electric vehicles (EVs),
high-performance magnets, and so on.
In support of the Chiyoda Group’s revenue base, we will
promote energy solutions under the ‘Mirai Engineering’
medium-term management plan and, as one of the world’s
leading engineering companies, we will aim to increase ourcorporate value and work toward a sustainable society.

Large Liquefaction Project Located in Louisiana USA

We will take steps for differentiation in the petroleum,
petrochemical, and metals fields to ensure our contract awards.
At the same time, we will promote our asset holding typebusiness as a new business sector, and in the asset
management business we will strengthen our plant operations
functions by application on and promoting leading-edge digitaltechnology.

Building our base for providing value in the energy value chain
Upstream

Midstream

Downstream

Contributions of Resource
Development

As the No. 1 LNG contractor,
we will support the growthof the LNG industry.

Expand the Possibilities ofFossil Fuel Mineral Resources

Asset Management
Business• Participation in the Gas toPower field• Enhancement in the petroleum,
petrochemical, and metals
fields• Strengthen plant operations
functions• Application on leading-edge
digital technology• Participation in the offshore
facility field• Collaboration with Xodus(Subsea 7)• Deal with the diversity of
LNG (standardization, shift
to smaller scale, offshore)

Asset Holding Business

Pipeline

Gas field

LNG liquefaction plant

LNG tanker(loading)

Consuming country

Gas field

Contribution to SDGs

The stable supply of energy brings value that is universal for humankind. We
consider the increased value that ‘Mirai Engineering’ aims for to be the source for asustainable society.
By means of plant construction, we assure access to energy for all people aroundthe world. By channeling it into infrastructure improvement, we realize growth fordeveloping countries and improvement in standards of living. In addition, our use oftechnology and equipment with a lower environmental impact even while making
energy widely available is a contribution toward curbing global warming and addressing
the issue of climate change by means of Chiyoda’s technological capabilities.

*1 Our estimate *2 Engineering, procurement, construction

9

CHIYODA GROUP Sustainability Report 2018

CHIYODA GROUP Sustainability Report 2018 10

Feature:‘Mirai Engineering’ – A Grand Opportunity for the Future

02 Global Environment and Green Energy
Project Operations Division

Our Mission

We are aiming to become a leading engineering company
that contributes to the future of the global environment
and the sustainable development of society.

Business Development

Enhancement of business in new energy, environment and energy saving,new materials, and life sciences
We will expand our initiatives in environment-related
business, including life sciences, in view of heigtening awarenessof the global environment. We will respond to the diversification ofelectric power source equipment and facilities by pursuing still
further advances in technology for combining renewable energy
and electric power storage, for distributed power generation, andso on. We will pursue business with a focus on the global issuesof increasingly scarce food and water resources and thedevelopment of a health-oriented society while at the same time
we deploy the engineering knowhow we have cultivated toward
the realm of space. With the knowhow we acquire from this, wewill promote further business expansion.

The Business Environment■ Expanding investments in the renewable energy field that are aware of theforthcoming carbon-free society■ Progressing technology for electric power storage and energy storage■ Robust interest to invest in medium molecular weight drugs, biotechnology,
and antibody drugs

New Energy■ Respond to expanding market needs inrenewable energy• Initiatives in photovoltaic power generation,
electric power storage, and biomass power
generation fields• Establish a hydrogen supply chain business• Develop business through partnering

Implement projects across a wide range of fields and realize a sustainable society
Achieving a balance between industrial development andthe global environment has been a crucial mission for Chiyoda
since the time of our founding. The international community’s
concern with the global environment is accelerating withgrowing rapidity, as can be seen from the global attention being
paid recently to the issue of a carbon-free society.
The Chiyoda Corporate Philosophy proclaims ‘harmony
between energy and the environment,’ and we have been
actively participating in projects not only in natural gas,
Career Summary
Joined Chiyoda in 1984. APM
of TPS-4 Project, 2001. General
Manager, Refinery Project Division
2, 2006. General Manager, Domestic
Petrochemical Project Unit,2012. Vice President and Deputy
Operations Director, Downstream
and Non-Hydrocarbon Project
Operations, 2014. In current position
since April 2018.

Terunobu Iio

Senior Vice President
Operations Director,
Global Environment andGreen Energy Project
Operations Division

11 CHIYODA GROUP Sustainability Report 2018

petroleum, and other core businesses we have long pursued, butalso in renewable energy. In addition, we are taking active part in
multiple photovoltaic power generation facility construction
projects as well as in biomass power generation demonstration
projects and construction projects for electric storage facilities
that work in combination with diversifying power sources.
We have also engaged in construction of a hydrogen supply
chain intended to realize widespread adoption of hydrogenenergy, which is being promoted by the Japanese government.
As part of this effort, we will implement a demonstration oftechnology to store and transport hydrogen from the Nation ofBrunei, starting in January 2020. This hydrogen will be primarily
for use as a fuel for power plants.
At Chiyoda, we also understand global environmental
measures as something to undertake across a wide range offields, including pharmaceuticals, medicine, and life sciences. We
are not limiting ourselves to the engineering and construction of
conventional facilities for low molecular weight drugs(pharmaceutical manufacturing and pharmaceutical ingredients),
but are broadening our expertise of biotechnology and cell
technology and building up our record of performance in facilities
for such new fields as macromolecular drugs, therapeutic middle
molecules, regenerative medicine, and so on.
In addition to our continuing work on petroleum, chemical,
gas, and industrial facilities for customers in Japan, we are
pursuing new business developments in new energy,
environmental, electric power, pharmaceuticals, and other suchfields. We will contribute to the sustainable development ofsociety through our active initiatives in these wide-ranging areasof technology.

Photo courtesy of Nagasaki Solar Energy Godo Kaisha

Environment and Energy Saving, New Materials■ Expand environment-related business■ Differentiate by means of technology

Life Sciences■ Develop new technology inpharmaceutical and life sciences fields
and deploy in EPC projects

Contribution to SDGs

GMP Vector Manufacturing Plant for Tissue Engineering, Courtesyof I’ROM Group Co., Ltd./ID Pharma Co., Ltd.

• Deploy low environmental impact andenergy-saving technology to industrial facilities• Incorporate next-generation leading-edge materials• Progress in decarbonization technology
development• Pursue business model for regenerative
medicine field• Business development through partnering• Expand areas of business and start operating
overseas

To realize ‘harmony between energy and the environment,’ wewill aim for sustainable development of the global environment andhuman society as we create corporate value together with value forsociety through engineering that has its sources in technology andpassion. As a leading engineering company, we will engage inwide-ranging fields of business and contribute to the sustainable
development of society by addressing and resolving global issues.

CHIYODA GROUP Sustainability Report 2018 12

Feature:‘Mirai Engineering’ – A Grand Opportunity for the Future

03 ChAS and Digital Technology
Project Operations Division

Business Development
1

Accelerating Adoption of Digital Technology, Including AI
Companywide Digitization

Our Mission

We will grasp the innovations made in digital technology
and contribute to a sustainable society by developing
next-generation business models that are rooted intechnology.

Expand partnering

Accelerate the adoption of digital technology inthe whole Group and realize reforms in EPC
execution• Develop and provide Plant Smart IoT Service
Advanced safety and security operations realized using a virtual plant• Develop and provide services that are
combined with AI technology

Develop new business models

Support maximization of plant productivity bybusiness alliance with GRID Inc.

Combine advanced analysis and other types ofplant engineering technology with innovative
digital technology• Digital Twin Platform
Collaboration of 3D facility diagrams with all types
of facility information

The Business Environment■ Boundaries between manufacturing and service industries are being erased■ Roles performed by people are changing

2 AI Solutions■ Needs for heightened business value are increasing throughout the life cycleA
D

Virtual Space

Analysis and Visualization

Big Data analysis (based on
accumulated data, visualize current
state and predicted future changes)

Data Acquisition and
Accumulation

O

Optimization andEfficiency Improvement

Artificial intelligence, etc. (optimize bymeans of predictions and points for improvement
to be found in visualization of the real world)

Big Data (collect and accumulate vast
amounts of information generated by IoT
devices)AI

Engineering
Real SpaceDCS System

Making effective use of innovative digital technology to realize ‘Mirai Engineering’
Digital technology innovations have recently beentransforming society and people’s lives. Digital technologies
such as the internet of things (IoT), artificial intelligence (AI), bigdata, and so on are being employed in business, as well, andnew value is being created. The ChAS and Digital Technology
Project Operations Division was started up in April 2018 for the
purpose of creating next-generation business models while also
grasping trends in these areas, applying innovative digital

Career Summary
Joined Chiyoda in 1983. Director,
Technology Division, MechanicalEngineering Center, 2005.
General Manager, Mechanical
Design Unit, 2012. Vice President
and Deputy Director, Technology
and Engineering Division, 2016.
Current position since April 2018.

Toshiaki Furugori

Vice President
Chief Digital Officer (CDO) and Operations Director,
ChAS and Digital Technology Project Operations Division

13 CHIYODA GROUP Sustainability Report 2018technology to Chiyoda business, contributing to the safe andstable operation of customer facilities, and contributing to thestrengthening of our competitiveness relative to othercorporations.
Up to now, Chiyoda has used advanced analysis anddiagnostic technology to assist in raising production efficiency,
heightening safety, and so on. In addition to dealing with issuesof productivity and maintenance, including energy saving incustomer facilities that help maintain the supply of sustainableenergy, we have also taken on support for improvement ofoperational processes, data management, training for customer
personnel in other countries, and other such activities to support
customer operations. We are also making advantageous use ofplant seismic diagnostics and countermeasures knowhow totake part in resilient infrastructure improvements that address thepromotion of national resilience.
In future, we will fuse innovative digital technology with ourbusiness and apply it to matters we could not have anticipated
before in order to provide further support to the safe and stable
operation of our customers’ facilities. At the same time, we willrealize reforms in EPC execution and take steps to strengthen
our competitiveness, thereby providing continuing support to
Chiyoda’s ‘Mirai Engineering.’

Productivity
Improvement

IoT
Sensor andtransmitter

Controlvalve

New on-site sensor
Noise, vibration, video, etc.
Smart positioner

3 Chiyoda is Achievement Using Digital Technology
Memorandum of Understanding on AI and Big Data
Concluded with ADNOC LNG
Chiyoda has concluded a Memorandum of Understanding
with the Abu Dhabi Gas Liquefaction Co. Ltd. (ADNOC LNG) in
the United Arab Emirates regarding the provision of the latest
digital technology for AI and Big Data analysis and other such
purposes at that company’s LNG plant. The provision of newleading-edge digital technology services that combine
advanced plant engineering technology with cutting-edge AI
technology from GRID will raise the level of the plant’s optimal
operation and maintenance as well as its production efficiency.
In this way, we will contribute to raising the value of theContribution to SDGs

customer’s assets. We will take steps to expand technologicalinnovation and contribute to society by assuring access toenergy that is sustainable and modern.

Photo courtesy of Japan External Trade Organization

With the knowhow we have cultivated to date as a base, we implement facility
management that makes thoroughgoing use of innovative digital technology, and in this way
we support improvements to energy efficiency in our customers’ facilities as well as
achievement of safe and stable operation. By heightening the value of what our customers
provide to society, we contribute to strengthening competitiveness, and this forms afoundation for creating the value for society found in industrial development and beyond thatin infrastructure improvement. In addition, we will contribute to the sustainable developmentof society by means of technological innovation that is friendly to the global environment.

CHIYODA GROUP Sustainability Report 2018 14

CSR Management

Corporate philosophy : Our Mission to Fulfill

As circumstances in the world community grow more complex, we are being called on to graspchanges in business environments as soon as they occur, and to respond appropriately to thedemands of the times. In order to achieve further growth of the global environment and humansociety in a sustainable community, Chiyoda appointed a Chief Sustainability Officer (CSO)
starting in April 2018 to ensure grasping issues correctly and proceed to resolve them.

Enhance our business in aiming for harmony between energy and the environment and contribute to thesustainable development of a society as an integrated engineering company through the use of ourcollective wisdom and painstakingly developed technology.

Business vision : The Aim of Chiyoda(Integration of the former Business Vision and CSR Vision, as of May 9, 2018)

Responding to the changing
business environment,
we contribute to realizationof a sustainable society

Ryosuke Shimizu
Director and Executive Vice President(CSO and Division Director, Corporate Planning Division)

Message from the CSO
I am Ryosuke Shimizu, the newly appointed CSO and
Director of the Corporate Planning Division. As the
Corporate Planning Division Director, I promote short andmedium-term management strategy in accordance with thecurrent medium-term management plan, ‘Mirai Engineering’– A Grand Opportunity for the Future. In addition, I will
formulate long-term strategy and take active measures
toward the sustainable development of society.
For that purpose, it is important to declare and commit
to objectives and cite specific cases that will contribute toresolving issues with our technology and human capital thatare this company’s strengths. In this, we will also focus on
SDGs, which are common world goals, with a view to theyear 2030. Having linked the activities we are currently
undertaking to the SDGs, we will uncover the key issues
and from them obtain particular themes that are to be
integrated with management as priority issues. As I see it, itis the mission of the CSO to be responsible for these
innovations of the integration, and to link them to long-term
strategies that are in line with our CSR.
We think that the global movement toward realizationof a carbon-free society by climate change initiatives
adopted in SDGs and declared in the Paris Agreement also
represents a major opportunity for Chiyoda. First of all, oneof the key issues we have identified for Chiyoda to addressis the realization of a carbon-free society, which we envision
for the year 2030 or a bit more. In order to study measures
aimed at achieving this, and to formulate a strategy for it, weestablished the Decarbonization Advancement Office in the
Corporate Planning Division as of June 1, 2018.
15 CHIYODA GROUP Sustainability Report 2018

There is also the matter of the CSR based managementawareness, which our Corporate Philosophy describes as
our aim to contribute to the sustainable development ofsociety. We intend to strengthen our resolve on this still
further, and therefore we announced a new Business Visionin May of this year that integrates our former Business Vision
and CSR Vision, which used to be separate. The five themesof our former CSR Vision are now positioned as CSR Values
that continue to be shared by Group employees in supportof the new Business Vision. By means of engineering, we willkeep on contributing to the effort toward a sustainable global
environment and human society.

A Grand Opportunity for the Future
The Chiyoda Group is committed to being an ‘Innovative’ Engineering Company, shaping the future ofenergy and the global environment with passion and cutting-edge technology.

CSR Values : Our Shared Values

12
3Management System
Board of Directors
Executive Committee
CSO

Corporate Planning
Division
Decarbonization
Advancement Office

Corporate Management
Division
IR, PR, and CSR
Department
Sustainability Group4
5

ISO 26000
Core Subjects

UN Global Compact

Consumer(customer)
issues━A Reliable Company
We strive to be a reliable company to our customers
and all our stakeholders by providing world-classtechnologies and knowledge.

Environmental Initiatives
We will work to remain an invaluable company tosociety by utilizing refined technologies to promoteharmony between the global environment andeconomic and social activities.

Principle 7: Businesses should support a precautionary
approach to environmental challenges;

The environment

Principle 8: undertake initiatives to promote greater
environmental responsibility; andPrinciple 9: encourage the development and diffusion ofenvironmentally friendly technologies.

Social Contributions
Through our engineering business in Japan andoverseas, we contribute to local communities andaddress global issues in ways including humanresources development, technology transfer andenvironmental protection.

Community
involvementand development━

Human rights
Labor practices

Principle 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights
abuses.
Principle 3: Businesses should uphold the freedom of association andthe effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labor;
Principle 5: the effective abolition of child labor; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation.

Organizational
governanceFair operating
practices

Principle 10: Businesses should work against corruption in allits forms, including extortion and bribery.

Respect for Human Rights
We are dedicated to respecting the human rights of all
people. We will create a corporate culture where thediversity, individuality and character of employees arerespected, where people are motivated to do their best,and of which employees and their families are proud.

Commitment to Fairness
We are dedicated to achieving even greatertransparency and stability by conducting our operations
fairly in accordance with the highest ethical standards.

CHIYODA GROUP Sustainability Report 2018 16

Value 1

A Reliable Company

Effective Use of Energy by Facility Renovation Work in Line with the
Demands of the Times for Sustainability
RFCC* Unit Regenerator Cyclone System Renovation WorkHow

For a corporation, the trust of its stakeholders provides• Provide safe, reliable plants• Execute high quality engineering• Provide engineering solutions for the sustainable
development of society• Share our CSR philosophy with business partners
through the supply chain• Perform facility renovations in line with the demandsof the times

the foundation for management. Through our business,
the Chiyoda Group will contribute to the resolution of
global issues and the sustainable development of society
so as to continue earning the trust of our stakeholders.

Yamal LNG Project Achieves Its First LNG Cargo Shipment in 44 Months

Mr. Norio Ochi

Column top portion of 16-m diameter regenerator that is largest in Japan

Manager
Electric Instrumentation andMachinery Section Engineering Department
Yokkaichi RefineryShowa Yokkaichi Sekiyu Co., Ltd.

Developing Industrial Infrastructure by Providing High Performance Products
Completed Construction of Specialty Chemicals Manufacturing Facility at Mizushima Plant of Mitsubishi Gas Chemical Co., Inc.

Respect for
Human Rights

various requirements,
have combined andled the utility area
Chiyoda undertook to
successfully start its
operation in 41 months.
­­­Together with the client,
this early completionof the world’s first LNG
plant on the northern
most Arctic Region
has made a great
contribution to the stableenergy supply. Now,
Chiyoda is continuously
aiming at completing thewhole trains in 2019.

Social Contributions throughBusiness Activities

Chiyoda has been participating in the construction of
Yamal LNG Plant project in Russia, as a member of the joint
venture (JV) led by TechnipFMC and with JGC and Chiyoda.
This is the world’s first LNG plant in the Arctic Region
comprising three (3) LNG trains that will produce 5.5 million
tons per each train annually.
Through this project, the robust teamwork has beenrequired to cope with various challenges specific to the severe
construction site conditions in the freezing cold. Under suchcircumstances, JV has achieved the 1st-Drop product of Train-1
in November 2017 and the 1st-LNG Cargo in December 2017
respectively in 43 and 44 months from the start of this project.
Despite the harsh on-site duty rotation, JV has been able toprevent troubles as much as possible by proceeding with works
in a flexible manner without any sectionalism and building up
a close communication network. In addition to the above site
work, a great deal of support from the client, all the seamlessefforts of members at the headquarters, JV partners, andsuppliers as well as subcontractors that well responded to our* Residue fluid catalytic cracking unit

I think that a major factor in the successful execution ofthis project under very demanding conditions was that we were
fortunate in our members. Thanks to the fact that appropriate
specialists were assigned to us from the preparatory stage, thepeople in charge on the Chiyoda side and on our side got together
face to face to examine the various challenging issues that cameup and deal with them. Therefore we were able to take steps fora speedy and appropriate resolution of the issues. It was also
good that we had built up an excellent relationship with Chiyoda
through other projects in the past, so we were able to move aheadsmoothly with the examination of matters. Our company’s missionis the stable supply of petroleum products. The FCC is an extremely
critical unit, in making gasoline or chemical products. It was a great
boost to the confidence of our company’s employees to see how
this renovation work was carried out to completion, without any
disaster and any quality defects, during scheduled maintenancein a very complicated location. What we expect Chiyoda to do
is to carry out advanced plant engineering. I hope that in the
future as well Chiyoda will continue handling this difficult workwith that high level of safety management, quality management,
and progress management. I also hope that Chiyoda will pass on
the experience and knowledge from this job toyounger engineers, as well, and also bring us
new suggestions.

Environmental Initiatives

Development on the Northernmost Energy Frontier for a Stable Energy Supply

Comments from the Customer
A Reliable Company

Why

Chiyoda conducted renovation in conjunction withscheduled maintenance at the Yokkaichi refinery of Showa
Yokkaichi Sekiyu Co., Ltd., in 2017. The work was done on
the regenerator cyclone system (for centrifugal separation of
catalyst), which was integrated with the column top portion of
the RFCC unit we had built in 1996.
This was a partial renovation of a regenerator that is 16 m indiameter, the largest such FCC unit-related regenerator in Japan,
and we had been conducting a study of the job since 2012 in orderto realize safe and efficient work under demanding conditions.
In addition to resolving problems on the technical side,
we took steps to shorten the construction period and reduce
costs. Working in cooperation with Group companies, we alsocollaborated very closely with the customer and successfullycompleted this highly difficult cyclone system renovation workwithout any accident or disaster.
Going forward, the Chiyoda Group will work together as
one and join with our customers in contributing to the effective
utilization of resources and aiming to develop sustainably
dwellable communities.

Courtesy of JSC Yamal LNG

18th Valve Summit Held
Large amounts of equipment and materials are procured
when building a plant. When problems in quality occur, theyaffect the safety of residents living near the construction site
and the global environment.
Defects have various different causes, so it is crucial
to recognize and avoid problems in advance, and to assure
quality. We implement such measures with our suppliers on aregular basis.
Valve summits have been held three times a year since2013, and there were suppliers from approximately 40
companies taking part in February 2017. The summits include
technical discussions about valves, which are critical materials
for a plant, participants share cases of defects and methods for

17 CHIYODA GROUP Sustainability Report 2018

avoiding them, and so on. We cooperate with suppliers in theeffort to improve quality and technological capabilities.

Scene of a Valve Summit* Hazard and operability study: A method that was developed to identify
process risks. Its purpose is to identify potential risks, evaluate their impact
and results, and devise necessary safety measures.

Comments from the Customer
In addition to their record of performance in our plant site, Chiyoda
also has a record of performance with maintenance at facilities adjoining
to the site, and their thorough familiarity with the area environment
led to their being awarded the contract. The present construction
took place under harsh conditions, and we are grateful that Chiyoda
addressed our requests to the utmost, gave us suggestions, andcompleted the construction on schedule without accident or disaster.
The Mitsubishi Gas Chemical Group vision calls for the ‘creation ofvalue that can be shared with society.’ To realize this, it is essentialthat we make our contribution by providing chemical products with thefunctionality demanded by society, in a timely manner. Going forward,
we hope that Chiyoda Kosho Co., Ltd., will continue
making use of their safe management capabilities,
technological capabilities, and onsite capabilities
so that together we can go on contributing to thesustainable development of society.

Mr. Akira Katsume
Senior Project Leader
Mizushima Plant Research andTechnology Division
Mitsubishi Gas Chemical Co., Inc.

CHIYODA GROUP Sustainability Report 2018 18

Commitment to Fairness

Quality Improvements Implemented with Suppliers

Chiyoda Kosho Co., Ltd., was awarded the contract for
construction of a specialty chemicals manufacturing facility at
the Mizushima plant of Mitsubishi Gas Chemical Co., Inc., andcompleted the construction in October 2017.
Construction methods to enable smooth onsite operationin the cramped site area were proposed and a HAZOP* study
was conducted. Results were incorporated in the detailed
design and thoroughgoing measures were taken for safety.
Process meetings were also held at which finely tailored process
and construction adjustments were made with the customer,
and construction was successfully completed without any
disaster and accident. The specialty chemicals to be produced
at this facility will be used in coatings and plastics, with thefeature of performance dramatically enhanced by comparison
with conventional products. Sales of these products will
be expanded on a global scale, leading to development ofindustrial infrastructure.

Value 2

Environmental Initiatives

Initiatives to Industrial Wastewater Reclamation in Water Stress Area
MODON Wastewater Reclamation System Demonstration Project

How

Ever since the Chiyoda Group was founded, we haveengaged with the contradictory themes expressed as‘harmony between energy and the environment.’ Inorder for the global environment and human society to
be sustainable, we will aim to use engineering to realize
climate change countermeasures and a carbon-freesociety. As we contribute to solutions for new issues as
they arise, we will continue to be a leading company.

• Implement measures to protect the environment
through project execution• Implement measures to use water effectively• Suggest technology that addresses climate change• Develop and provide technology to protect theenvironment• Use energy effectively by improving energy efficiency

CO2 Reduction Through Engineering
Mega Solar Plant Construction Effectuates CO2 Reduction
design and construction services to meet the needs of ourcustomers that promote carbon-free projects.
* Value estimated in accordance with Japan Photovoltaic Energy
Association Display Guidelines (FY2018)

Contribution to Reduction of Environmental Impact by Technology Development

Chiyoda won the FY2017 Catalyst Manufacturers
Association Japan Technology Award for the development
and practical application of CT-HBT®*, a catalyst for thehydrodesulfurization of kerosene and diesel oil.
CT-HBT® is a catalyst that uses an alumina substrate witha titanium coating as a support. This catalyst exhibits highhydrodesulfurization activity with refractory feedstock and istherefore able to improve the conversion rate to diesel oil ofcatalytic cracked gas oil (light cycle oil, LCO) produced in a fluid
catalytic cracker (FCC). Improving the rate of conversion from
LCO to diesel oil contributes to the effective use of feedstock as
well as to the reduction of air pollutant emissions.
* Chiyoda Thoroughbred Hybrid Titania

19 CHIYODA GROUP Sustainability Report 2018

With the momentum provided by this award, we will
actively engage in further development of this catalyst in orderto reduce the impact of harmful emissions.

Commemorative photograph of Catalyst Manufacturers Association Japan members withaward recipients (the two people at the left end of the front row are recipients from Chiyoda)

Effluent

70% of industrial
water reused

SeawaterIntroduction ofrecycling system
reduces energy
25-30%

Filter

System Diagram

Initiative Undertaken with Kawasaki City to Contribute to
Achieving a Carbon-Free Society
Constructing a Hydrogen Supply Network
Chiyoda is working with Kawasaki City to realize theHydrogen Energy Utilization Promotion Project proposed in the
Coastal Area Vision that the city announced in March 2018.
Gaseous hydrogen is difficult to handle, and transportationof hydrogen has been a challenge. Chiyoda has establisheda proprietary ‘SPERA Hydrogen®’ technology for safely
transporting large volume of hydrogen in a liquid state atambient temperature and pressure.
As a step toward realization of a zero emission society,
Advanced Hydrogen Energy Chain Association for Technology
Development, AHEAD, has been established by Chiyoda,
and Mitsubishi Corporation, Mitsui & Co., Ltd. and Nippon
Yusen K.K. With subsidies from the New Energy and Industrial
Technology Development Organization, NEDO, Chiyoda willlead the world by implementing ‘The Demonstration of theHydrogen Supply Chain by Organic Chemical Hydride Method
Utilizing Unused Energy’, which is scheduled to transport
SPERA Hydrogen® in ISO tank containers by container shipfrom Negara Brunei Darussalam to the Kawasaki coastal
area from January to December in 2020. SPERA Hydrogen®
unloaded at Kawasaki Port will have its gaseous hydrogenextracted at oil refineries of TOA OIL CO., LTD. in the coastal
district, and that hydrogen will be used as gas turbine fuelto generate electric power by co-combustion. Based on thisdemonstration, the hydrogen supply from overseas will put
into full-scale operation and a wide-area hydrogen network will
be constructed by around 2030, so that it is anticipated thathydrogen fueled electric power generation and fuel cell vehicles(FCV) as well as FC buses and FC forklift that use hydrogenenergy will be in widespread use. This will contribute to the
reduction of carbon emissions.

Comments from Partners
The Hydrogen Energy Utilization Promotion Project leads
toward a sustainable society and the Coastal Area Vision makes
it a priority project. Developing the town of Kawasaki is not justa matter of improving citizen services. We are taking the lead tosolve the social issues of an industrial city. This makes Kawasaki
a model city for Japan domestically but we think the city will also
contribute to the world. The coastal area is home to numerous
petrochemical industrial complexes and energy facilities, whichmake up the key industries. Therefore collaboration on the coastal
with Chiyoda, which possesses expertise about such plants, isvery effective not only for coping with aging plant facilities, which
is an issues throughout the industry, but also for enhancing
facility performance and realizing the watching with new industrial
infrastructure. The establishment of supply chains with a view toextending them overseas also necessitates resolving issues withmany related organizations, and we have high expectations of the
Chiyoda Group’s international network. Partnering with Chiyoda inways that also make good use of Kawasaki City’s regional network,
we will lead the way toward sustainable community development.
Associate Manager Mr. Tetsuya Majima

Assistant Manager Mr. Akikazu Kobayashi

Ms. Rika Hasegawa

Kawasaki City Coastal Area Projects Promotion Department

Kawasaki City Coastal Area Vision (adopted March 27, 2018):
http://www.city.kawasaki.jp/590/page/0000096607.html

CHIYODA GROUP Sustainability Report 2018 20

Commitment to Fairness

Received FY2017 Technology Award from the Catalyst Manufacturers Association Japan

Plant

Respect for
Human Rights

Shima City Ago Tategami Mega Solar Plant

Quantity ofindustrial waterfrom desalinationof seawater
reduced 70%

Social Contributions throughBusiness Activities

In December 2017, Chiyoda completed constructionof the Shima City Ago Tategami Mega Solar Plant (12.8
MW) for Sanco Real Estate Co., Ltd. The plant is located in
Agocho Tategami, Shima-shi, Mie Prefecture. The Japanese
government’s Basic Energy Plan positions photovoltaic power
generation as a key energy source that is supposed to makeup 22-24% of renewable energy by 2030. Chiyoda has been
involved in the design and construction of approximately 29
mega solar plants to date, and when the power plants currently
under construction have all been completed, they will generate
a total of 460 MW. It is estimated that the greenhouse gas
emissions reduction effect will be equivalent to approximately
4.5 million tons* by 2040.
We will continue in the future as contractors providing

Desalination
systemEnvironmental Initiatives*1: W ater stress is an indicator for evaluating the extent of strain relating towater supply and demand, and is expressed as the usable quantity ofwater resources per capita of population.
*2: Membrane bio reactor*3: Reverse osmosis

The project country has limited water resources, so
promoting the recycling and reuse of industrial wastewater
contributes to the effective use of water resources.
Implementation in other water stress areas is anticipated.

A Reliable Company

Why

The Chiyoda Group implemented a demonstration project
entrusted from NEDO (the New Energy and Industrial Technology
Development Organization) for wastewater reclamation systemat the Dammam First Industrial City established by MODON (theSaudi Industrial Property Authority) in Saudi Arabia, which has ahigh level of water stress*1, after carrying out a risk assessmentand feasibility study. As an initiative in the water recycling field, we
implemented a demonstration project for wastewater recycling
system technology at the Dammam First Industrial City, which isoperated by MODON.
The project demonstrates a system that achieves an energy
saving of approximately 30% over conventional methods ofseawater desalination. The project treats approximately 5,000 tonsof wastewater per day using membrane technology (MBR*2 andRO*3 membranes), and reuses 3,500 tons of industrial wastewater.

Value 3

Social Contributions

Global Operation System and Technology Transfer
Paku Gajah Gas Development Project Completed

Why

How
• Establishing industrial infrastructurecompany’s mission in society. It is not just about• Providing added value by integrating with cuttingedge technologies

providing plants. The areas of social issues addressed byand include improvement of social infrastructure, the• Transferring technology, creating jobs, and developing
human resources in countries where we execute
projects

food problem, and so on.

• Resilient infrastructure improvement

the engineering business are growing larger and larger,

Construction of Demonstration Vegetable Factory in Dubai
Therefore this project has also enabled us to present solutions tosocial issues in the area of food. We are aiming to make further
contributions to society by developing the demonstration facility
to large cultivation facilities.

For this project I served concurrently as Deputy ProjectManager and Deputy Engineering Manager, so I was in charge ofthings from design to onsite construction. This was my first time
to participate in a project as the PKP*, and I was able to acquire agreat deal of valuable experience from being assigned to positionsof responsibility.
My work on this project renewed my sense that men andwomen have the strengths of their respective
individual characteristics, and that using those toan advantage contributed to the success of thisproject, which drew heightened awareness of
local initiative.
There still are not very many female
engineers, but I will be happy if this project
helps to increase appointments ofwomen as PKP.

Shoko Shimotori
On secondment to SAE

Scene of coordination meeting in Indonesia

Respect for
Human Rights

Demonstration factory interior* Abbreviation for project key person, the main position on a project teamSocial Contributions throughBusiness Activities

We have been working on the development of vegetablefactories for overseas countries collaborating with Marubeni
Corporation and Showa Denko K.K. since 2016. In December
2017, we completed a demonstration plant of a vegetablefactory in Dubai for a local conglomerate. We are now
supporting the customer’s stable vegetable cultivation in thisplant.
As the Vegetable factory ensures the suitable cultivation
conditions constantly, regardless of the climate conditions
outside the factory building, its major feature is that ourcustomer can produce safe vegetables stably even in areasthat are unsuitable for vegetable cultivation.
This work on construction of a food factory adds the elementof life sciences to the existing repertoire of Chiyoda strengths.

Voices of Employees

Environmental Initiatives

Building Industrial Infrastructure by Promoting Stable Self-Sufficiency in Foodbuilding the group companies’ technological base. In addition,a joint team was formed with local members to take part in the
Jakarta ‘Kizuna’ (Bond) Ekiden road relay that is held to foster
friendship between Japan and Indonesia. This kind of teambuilding activity was one major reason why we were able toimplement Group operations, in all their diversity, so smoothly.
We will join as one with our group companies in the future
and work together again on supplying energy to Indonesia.

A Reliable Company

Working to resolve the issues of society is the engineering

A consortium we formed with two of our Group
companies in Indonesia, PT. Suluh Ardhi Engineering (SAE) andPT. Chiyoda International Indonesia (CII), was awarded a gas
processing project contract for the Indonesian state-operated
PT. Pertamina EP. The project was brought to completion on a
local production for local consumption basis in FY2017.
This is an important domestic project for Indonesia thatinvolves construction of gas processing facilities in the two
districts of Paku Gajah and Kuang in southern Sumatra,
together with a pipeline connecting them.
SAE acted as the leader and built a system of operationthat was under the control of local engineers and also engaged
a female engineer from Chiyoda Global Headquarters (CGH).
The various types of project methods being used by CGH as
well as material procurement, advanced pulsation analysis, andso on were implemented with local operators. In addition, SAE
brought in design management and coordination methods
using 3D models, which SAE had no experience with, and thisenabled it to shorten the construction period.
This project was also very effective in transferring
technology to local users, and it made a contribution to

Resilient Infrastructure Improvement for a Sustainable Society
Construction of New Ulaanbaatar International Airport

Contributing to a Sustainable Society Using the Acoustic Emission (AE) Technique
Science and Technology Award Conferred for Development of Global Diagnostic Technology

21 CHIYODA GROUP Sustainability Report 2018

well, to evaluate the corrosion of bottom plate of the tanks.
Chiyoda took the lead in developing that technology.
At present, we are deploying a service using tank AE to help
storage tank operators plan the management of above-ground storage
tanks in a safe, rational, and systematic manner. Going forward,
we intend to continue making effective use of our expertise as anengineering company as well as of digital technology, and contributeto society throughfurther technologicalinnovation.
* A technique thatmeasures the sounds(elastic waves from30 kHz to 1 MHz)
generated when material
undergoes damage,cracking, and so on, anddiagnoses and evaluates
the state of that material.

Group photograph of award winners at thepresentation ceremony

the winter when temperatures dropped as low as -40°C, theactual construction period was 28 months (approximately twoand-a-half years), making this an extremely challenging project.
We used our project execution knowhow to advantage inorganizing contractors brought together from various countries
until construction was completed. Going forward as anintegrated engineering company, we will continue engaging in
airport and other transportation-related infrastructure projects,
making our contribution to the construction of industrial
infrastructure.

Artist’s rendering of completed airport

CHIYODA GROUP Sustainability Report 2018 22

Commitment to Fairness

In May 2018, an article written at Chiyoda, ‘Developmentof a Global Diagnostic Technology for Corrosion Damage on
the Bottom of Above-ground Storage Tanks Using the AE
Technique’, was received the Science and Technology Award
from the High Pressure Institute of Japan.
There are many above-ground storage tanks placed atplants in Japan, and designated above-ground storage tanks
holding 1,000 kl or more are required to undergo periodic
overhaul inspections. For particularly large tanks, the mandatory
inspection period is almost one year, and the inspection cost
can range from several tens to several hundreds of millions ofyen, so this places a great burden on the companies concerned.
The acoustic emission (AE) technique* is already being usedin Europe and America for inspections that do not require
opening up the tank interior. The various institutions concerned
therefore carried out development of advanced non-destructive
inspection technology (hereafter tank AE) for use in Japan, as

Chiyoda was awarded a contract in 2013 for a national
project in Mongolia to build the New Ulaanbaatar International
Airport. A joint venture was formed with Mitsubishi Corporation,
subcontractors from South Korea and materials manufacturers
from Japan were organized, and construction on our area of
responsibility was completed in January 2017.
The development of Mongolia’s manufacturing industries,
industrial sector, and so on is expected to continue increasing
the demand for international line service in particular. The
construction of this new airport will make it possible to receive
more travelers and, will further contribute greatly to theeconomic growth of Mongolia. The Mongolian government
therefore considers this a major project and has allocated anamount corresponding to 10% of the national budget to it.
This project includes construction of a passenger terminalbuilding and virtually all of the other specialized facilities requiredby an international airport. The construction period was 43months (approximately three-and-a-half years), but taking into
account that any outdoor construction was impossible during

Value 4

Respect for Human Rights

Initiatives to Promote Safety Culture
Using Virtual Reality for Experiential Knowledge of Risks and Danger

Why

How
• Create a lively and vital working environment

company. In order to maintain a corporate climate that

• Undertake work style reform initiatives

our employees and their families can take pride in, we• Share the consciousness of ‘safety as a core value’

are faced with a growing necessity to carry out work

• Strengthen emergency management systems

style reforms, develop global human resources, and• Reinforce corporate strengths by development of
global human capital

respect the diversity of personnel.

Providing Internships and Lecturing at Universities
communicate the appeal of engineering and contribute toraising the industry’s level of recognition as well as to developing
the next generation of human capital.

Chiyoda System
Technologies Corporation

 ix people accepted to the internship programSOne-day internships held

Chiyoda Philippines
Corporation

 n-the-job training held for 22 engineering students at 19 local universities
OLectures held for chemical engineering students at Adamson University and University of the Philippines

Chiyoda & Public WorksCo., Ltd.

Five students attending universities of technology in Yangon accepted as interns

Memorandum of Understanding Concluded with National Enterprise of Hydrocarbons (ENH) in the Republic of Mozambiquethe near future.
At Chiyoda, employees who took child-rearing leave in
FY2017 had a 100% rate of return to their work. There is alsoa growing number of women engineers working actively on ourconstruction sites, which used to be a man’s world. We willcontinue our initiatives to have a diverse human capital play
an active part by sharing our own experiences locally and byworking closely with local communities so that we not only
achieve growth for the corporation but also development of thecommunity as a place where people feel fulfilled in their work.

Center of front row: Yokohama
Mayor Fumiko Hayashi; left offront row: Ms. Takaoka
http://www.city.yokohama.lg.jp/
shimin/kochosodan/kocho/
tea/29/270419.html

Voices of Employees
When I took part in the program, I was very encouraged through my encounters with people who engaged intheir work with great motivation and high objectives. In the meeting with Mayor Hayashi, I was given suggestions
regarding work based on the course followed to this point by a woman leader who is currently in an active position
as well as in light of her various experiences. This gave me a feeling for Mayor Hayashi’s strength and her kindness.
I am also grateful to be given the opportunity to communicate to people who feel uneasy about returning to theworkplace regarding my own experiences and the experiences of employees who are working in the company while
engaged in child-rearing. I will be very happy if in the future I can be of use not just to people in the company, but
beyond that to people in the community who are working while rearing their children.

Yukiyo Takaoka

Senior Executive Vice President Sahara exchanging the Memorandum of Understanding

Human Resources Development Department

CHIYODA GROUP Sustainability Report 2018 24

Commitment to Fairness‘Lectures on Project Management’ held annually at Yokohama National University and Kyushu University
52 people accepted to internship program

Since FY2016, we have been sending two women
employees every year to participate in the Yokohama Women’s
Leadership Program, a six-month program organized by the
Yokohama Association for Promotion of Gender Equality. In
FY2016, a group that a Chiyoda employee belonged to proposed
productivity increases by the adoption of a point system, andtheir proposal won an award for excellence in a competition. The
group won the right to attend one of Mayor Fumiko Hayashi’s‘tea meetings’ where the mayor told them about her own careerand her ideas about work and exchanged views with them.
The Chiyoda employee who took part in that program
subsequently participated as a guest speaker in the ‘Chat
Salon’ at the Support Desk for Women in the Work Force,
organized by the Gender Equality Center Yokohama North.
She spoke about what she felt when she returned to work
after taking child-rearing leave, adding in things she learned
from the leadership program, and imparting a variety of things
to participants who were scheduled to return to their jobs in

Respect for
Human Rights

Chiyoda & Public Works Co., Ltd., Interns

Chiyoda Corporation

23 CHIYODA GROUP Sustainability Report 2018

Initiatives Toward Utilization of Diverse Human Capital
Participation in Yokohama Women’s Leadership Program

Example of FY2017 Initiative

Making effective use of an abundant record of achievements
on LNG and other types of plant construction, Chiyoda has
been providing technical training to engineers from around theworld now numbering in the hundreds. As part of this program,
we concluded a Memorandum of Understanding with theMozambique National Enterprise of Hydrocarbons (ENH) forthe purpose of supporting human capital development in the
Republic of Mozambique. We will vitalize our global partnerships
and contribute to the further sustainable development of othercountries in order to bring about a sustainable society.

The image actually seen during VR experience(example)

Social Contributions throughBusiness Activities

In the engineering industry, people are the most valuable
capital. If we are to heighten our international competitivenessand realize innovations in technology in order to resolve issues,
it is essential to find and foster younger engineers. It is our
mission to convey the appeal of engineering to the younger
generation that will be leaders in the industry of the future.
The Chiyoda Group has mainly tried to reach university
and graduate school students of science and technology inJapan and overseas. We have collaborated with universities
to offer a variety of programs, and we have taken active steps
to promote exchanges between students and the engineering
industry as well as to foster the development of human capitalfrom an early stage.
At the Chiyoda Group, we intend to continue establishingcollaborative programs of various kinds with universities to

Scene of VR experience inprogress (example)

Environmental Initiatives

Developing the Next Generation of Human Capitaland in offices can join in measures to promote safety culture
and contribute to achieving no accident and no disaster.
A Reliable Company

Human resources are valuable assets for an engineering

Safety is a core value for Chiyoda. We act safely not only
for our own good, but also because it leads to safety for ourcolleagues who work with us and further for all the members of
our families, as well. Chiyoda has sought to reduce the unsafe
actions and unsafe situations that can cause accidents, and in
FY2017 we introduced experiential risk training that uses virtual
reality (VR) to heighten employee awareness of safety.
This experiential training is being conducted for all our
employees so that they can be safety conscious not only
on the worksite and in the office, but in various situations ofeveryday work and living. In FY2017, we had approximately 260
participants including members of corporate management. For
FY2018, we are also considering dispatching personnel withthe equipment to worksites in Japan and overseas to conduct
the training there.
We intend to reach out to further expanded audiencesin future. We will be working with Chiyoda Group employees,
customers, and business partners so that people on worksites

Value 5

Commitment to Fairness

Measures for Thoroughgoing Compliance Awareness and System Reinforcement
Appointment of CCO, Implementation of Thorough Education, Enhancement of Compliance
Consultation and Reporting System (Whistleblowing System)

How

Commitment to fairness is the foundation for a
corporation’s continuing existence. The Chiyoda Group
has also been pursuing stronger governance and a morethoroughgoing compliance. Meanwhile, transparency,
fairness, and openness in management have been
increasingly called for because of requirements in Japanand overseas.

• E xpand corporate management frameworks that aretransparent and sound• Implement initiatives to prevent misconduct• Implement thoroughgoing risk management• Implementation of thoroughgoing complianceeducation and export control education•G lobal development of Compliance Consultation andReporting System

Making the Corporate Governance System Stronger

Diagram of Relationship Between Corporate Governance and Internal Control

FY2017 Compliance Education and Export Control Education Performance
Title

ComplianceAppoint and Dismiss

Propose and Report

Hierarchical trainingT raining for new hires
Training for mid-career hires
Training for new managerial personnel

Held 1 time
Held 2 times
Held 2 times

93
3
54

Functional training

Training prior to overseas assignment (for all assignees)
Training prior to on-site supervisory assignment (for all assignees)

Held as needed
Held as needed

145
37

SeminarsS eminar with outside instructor (Harassment: for managerial staff)
Seminar with outside instructor (Harassment: for general employees)

Held 2 times
Held 2 times

261
401

e-Learning

For the Company and Group companies in Japan and overseas

5,213

Hierarchical trainingT raining for new hires
Training for mid-career hires

Held 1 time
Held 2 times

933

Functional trainingE xport control: General training
Special Training Course: Determination of the classification for goods& technologies

Held 3 times
Held 3 times

80
52

Appoint and Dismiss

Report, Provide Opinions, Etc.

(Numbers of Times, People, Etc.)

Commitment to Fairness

Appoint and Dismiss

Item

In Export Control

General Meeting of Shareholders

Content

Category

Audit, Etc. and Report<Board of Directors>
Directors(Excludes Audit and Supervisory
Committee Members)

Appoint and Dismiss<Audit and Supervisory Committee>
Directors (Audit and Supervisory
Committee Members)

Internal Control Committee

Deliberate and Report

Report<Executive Committee>
Representative Directors

Compliance Committee

ReportLegal violations
and bribery

Cooperate andReportDeliberate
and Report

Audit

Divisions Engaging in Business Operations
Manage and Supervise

Group Companies

25

Accounting Audit

cases

9 cases

Sexualharassment

Internal Audit DivisionInternal Audit

Total

0 cases

Power harassment(Abuse of power)

Collaborate

Instruct

President
Instruct

25 CHIYODA GROUP Sustainability Report 2018

ReportReportSelection

Main Committees Involved with Internal Control

FY2017 Whistleblowing and Consultation Record (Cases Reported to Chiyoda Only)

Accounting Auditors

1 caseLabor, work
rules, morals

11 casesOther
consultation

4 cases
0

2

4

6

8

10

In FY2017, there were no cases of bribery, corruption, orother corrupt practices.

Respect for
Human Rights

internal control, we further established an Internal Control
Committee and a Compliance Committee, we have reinforced
our systems for responding promptly to rapidly changing
social and economic circumstances, and we are engaging indecision-making accordingly.
For the purpose of enhancing the soundness andtransparency of our management base, in June 2018 we
took the additional step of further strengthening the corporate
governance system by increasing the membership of our Audit
and Supervisory Committee from three to five members. As aresult, the number of independent outside directors at Chiyoda
increased from one in the previous fiscal year to the present
four. From now on, we will continue to maintain and increase
the transparency and soundness of our management, we will
engage in swift and certain decision-making, and we will aim torealize further enhancement of our corporate value.

Social Contributions throughBusiness Activities

The Chiyoda Group has formulated and implemented
the Chiyoda Corporation Corporate Governance Policy forthe purpose of sustaining the Group’s growth and enhancing
our corporate value in the medium to long term. We are taking
active measures to maintain and enhance the transparency
and soundness of management.
In 2016, Chiyoda made the transition to a ‘Company with
Audit and Supervisory Committee’ in order to strengthen thecorporate governance system. In order to better respond to
the expectations of all our stakeholders, and to strengthen
our legal compliance and risk management functions, we alsoestablished the Legal and Compliance Department, the SQEIand Corporate Risk Management Department (Safety, Quality,
Environmental and Facility Law, and Information Security),
the Crisis Management Department, and the Internal Audit
Department as of April 1, 2018. In order to strengthen ourEnvironmental Initiatives

About the Corporate Governance System

Starting in April 2018, Chiyoda established a Chief
Compliance Officer (CCO) to take steps toward even morethoroughgoing compliance. A compliance officer has been
assigned at each division and group company, forming acompliance system with a hierarchical structure that has
the CCO at the apex, thereby further clarifying where theresponsibility for compliance is placed.
In addition, the Chiyoda Group has introduced acompliance consultation and reporting system (whistleblowing
system) for the purpose of prevention, early detection,and correction of illegal or unethical acts, including thosethat deviate from the Chiyoda Group Code of Conduct. In
accordance with the Whistle-Blower Protection Act, thissystem assures whistleblowers thoroughgoing protection
and anonymity. The inside and outside (legal offices) contact
points have been augmented since January 2018 by a newcontact point established at an outside company specializing
in providing the contact and consultation services.
The Chiyoda Group will continue working together as awhole to enhance compliance education as well as to reinforce
our systems for ensuring early detection and prompt response
to cases regarding the compliance.

A Reliable Company

Why

The Chiyoda Group is working to enhance and deepen
compliance awareness by continuously implementing
education on corruption prevention and other subjects related
to compliance.
In FY2017, we conducted education by e-learning for
all employees in Group companies in Japan and overseas. In
order to heighten awareness and knowledge of compliancethroughout the Group as a whole regarding the Chiyoda Group
Code of Conduct and other rules and the serious risks involvedin bribery, corruption, and other corrupt practices, including
cartel behavior and so on, the training was designed to convey
cautions relevant to scenarios that employees might encounterin the course of their work.
Continuing from FY2016, we also conducted Harassment
Prevention Training with instructors invited from outside. In
addition to the above, our compliance education also covered
such matters as cautions regarding the compliance consultation
and reporting system (whistleblowing system) and economic
sanctions, respect for human rights, the Construction Industry
Law, dealing with anti-social organizations, the Subcontracting
Act, export controls, insider trading, intellectual property,
information security, working hour management, and so on.

12Harassment prevention training

CHIYODA GROUP Sustainability Report 2018 26

The Chiyoda Group’s
Social Contribution Activities
Why

How

The Chiyoda Group is actively seeking solutions to global
issues in order to help create a better society. This is not justa matter of social contributions through business. We will
also continue working closely with local communities tocontribute to the sustainable development of society.

Taking ‘CSR promotion by all members together’ as our motto,
and with collaboration and coexistence with local communities
as our objective, we will continue our corporate existence as acontributor to the sustainable development of society. By
having our employees participate in these activities, we arealso heightening their motivation to contribute to society anddeveloping human capital that will be capable of contributing
not just to business performance but to society as a whole.

Interns accepted to program andUniversity lecturers

Students received on company visits andCGH outreach lecturers dispatchedBook Magic (CGH)

Yubeshi no Kai (CGH and Koyasu office & research park)
Donations for hurricane
victim relief sent
to U.S. state of Texas(CIC, Chiyoda Group within Japan)

School Drive Campaign(CPh, CPW, and L&TC)

Sale of used books and DVDs
donated by employees yielded¥12,577 that was put to use
for school construction andother purposes in developing
countries.

In-house sales of products fromearthquake-affected areas areheld every month.

Kamaishi City and Otsuchi Town,
Iwate Prefecture, were visited

Assistance to Areas Hit by the Great East Japan
Earthquake Employees Serve as Volunteer Relief
Workers (Chiyoda Group within Japan)

6 times and a total of 54
people dispatched forrelief activities.

Donation of unused pamphlets (AIC)• Purchase of CO2 sequestration credit(19.00 t-CO2)• Registration for Green Wave program*1

Students received by company
3 times and outreach lecturers
dispatched 2 times as career

We donated school supplies
to local primary schools.

development support for students.
Please see page 23 for details.

Japan Philharmonic Orchestra of
Beethoven’s Ninth Symphony (CGH)

Widen the Circle ofwith Local Communities
Educational Support& Human Resource
the Sustainable
Development
ECOCAP Program *3(Chiyoda Group within Japan)

Heart-Made Sale
(CGH and Koyasu office & research park)

Chiyoda has been
supporting Japan
Philharmonic
Orchestra of
Beethoven’s Ninth
Symphony since 2011,and every year we give

invitations with
25 pairs of tickets topeople with visual
impairments.

27 CHIYODA GROUP Sustainability Report 2018

Exchange and Collaboration
and Aim to Further Realize
Development of Society

Donated 12
cartons of unused
pamphlets and theproceeds were used forprotection andpreservation of naturaland cultural heritage
sites.

Environmental
Conservation
Community clean-up
activities (CGH andKoyasu office &research park)
In cooperation with
community clean-up
activities, a total of 157

Contributions
to Health &Welfarepersonnel
participated in the

Minatomirai and Koyasu
districts.

Tree planting activities (CPh)In cooperation with the City
Environment and Waste
Management Office, 99
trees were planted.
198,660 caps recycled(Vaccine doses for 231
people)In-house sales of products made bypeople with special needs in Yokohama
are held monthly at CGS andevery other month at theKoyasu office.

*1: An initiative to spread a ‘Green Wave’ of growing things acrossthe Earth by tree-planting and other such activities on the
UN-designated International Day for Biological Diversity.
http://greenwave.undb.jp/index.html/

Blood donation(Implemented at CPh and L&TC)

Support for people
with special
needs

Table For Two*2(Koyasu office & research park)

Assistance toareas hitby disasters

to the JATA
Environment Fund

*2: The TFT menu provided at employee dining halls includes a 20-yen donation, and each 20 yen
can provide one school meal in a developing country.

1,581 meals provided*3: Caps for PET bottles are collected at the office and the proceeds (approximately 860 caps
provides a polio vaccine for one person) are sent to developing countries.

CHIYODA GROUP Sustainability Report 2018 28

Messages from Stakeholders

Mr. Kenichi
Takayasu

The Chiyoda Group, which declares ‘harmony between energy and theenvironment’ as its Corporate Philosophy, has publicly announced, a stance ofsincere engagement by achieving the SDGs in the ‘Chiyoda Group
Sustainability Reports’ for 2017 and 2018. Having mapped (related) its corebusiness with the 17 SDG goals, it went on to establish the position of CSO in
the Corporate Planning Division in April 2018. A series of these convey theextent to which the management team commits to achieving the goals.

Professor
Department of Economics
Dokkyo University

The More Value the Chiyoda Group Creates,
the Easier the World Will Become to Live in

Mr. Masao Seki
Adjunct Professor,
School of Business
Administration,
Meiji University

This year’s Sustainability Report from the Chiyoda Group shows someclear advances in comparison with the report last year. Management’s
intentions have also been clarified by having the business strategy include
SDGs that place greater expectations on the corporate role, and Chiyoda has
built a new system for their specific promotion within the company.
I consider the Chiyoda Group to have very great potential, using thestrengths they have cultivated in the engineering field, to successfully achieve
the realization of a sustainable society and at the same time create corporate
value. This fiscal year’s report has laid out a direction for SDG managementthat is clearly stated, and I hope that they will continue moving steadily forwardin that direction in the future.

■ Points Deserving Recognition■ Points that Require Reinforcement in Future

1. The fact that the company established a Chief Sustainability

1. In order to make the value creation story more persuasive, it will

Officer (CSO) position in order to clarify the structure of

be necessary to show in more circumstantial detail how the

management responsibility regarding sustainability. I think it is ofconceptual diagram on pages 7 & 8 of the Sustainability Reportmajor significance that the company recognizes sustainability as

is related to the disclosure information presented later. The story

a management issue and has elevated the matter to a crucial

needs to be built up in that way so that people will be convincedissue to be addressed in-house across organizational lines.

of the correlation between the diagram and the information

The Chiyoda Group has a threefold structure of Corporate

and that is ultra-long-term in nature. The Chiyoda Group is

Philosophy, Business Vision, and CSR Values as its foundation,

engaging with Kawasaki City on a Hydrogen Energy Utilization

upon which it is accelerating the movement of its value creation

Promotion Project in an industrial zone, and meanwhile it also

2. The fact that the company established a Decarbonization

management is incorporating this into actual practice, it would

launched a Decarbonization Advancement Office in 2018. I wish

Advancement Office is also noteworthy. Chiyoda has explicitly

be good for the company to state its long-term objectives, set

has fixed its focus for a decade from now on three new growth

the company would widely broadcast the impact of this not just on

declared that it will employ its own strengths as an engineering

up the key performance indexes (KPI), and disclose the state ofareas. These are the construction of an energy value chain

industry, but also on the local community and on people’s lives.

company to contribute to realizing not just a low-carbon society

their progress to the KPI as they go.

business, the expansion of global environment initiatives and theDoing so would frame the company’s own value creation in aengineering business, and the development of new businessbroader perspective, and no doubt it would also be able to draw inmodels compatible with a digital society. The company has statedpeople who want to act with the Chiyoda Group to resolve issues.

distinctly that it is going to significantly increase the proportion of its

One other hope I have is that an arrangement will be createdearnings portfolio involved in the environment in the medium-term

that achieves a balance between financial returns and social

management plan (2017-2020).

returns. In the context of worldwide expansion of ESG investment

toward the resolution of societal issues. Furthermore, the company

presented on the following pages. In order to show thatbut beyond that a carbon-free society, and this is very
convincing evidence of the company’s recognition of materiality.

2. The intention to incorporate respect for human rights into

As I see it, making the management commitment to a

management can be felt, but compared to what is called for incarbon-free society explicit also embodies an important social

international standards of conduct, I think there is still a large

message that will influence other corporations.

gap in the scope and depth of the company’s measures. I
recommend that the company take steps first to analyze that

3. The case of the demonstration plant factory in Dubai that willgap, and that they refer to the Nippon Keidanren (Japan

contribute to a stable food supply is a possible solution that

Business Federation) Charter of Corporate Behavior, which has

aware of both financial returns and social returns. However, it isshould be given attention as a way of meeting societal needs

newly incorporated respect for human rights, together with thatdifficult to accept that obtaining social returns from resolving issues

that will be growing more intense on a global scale in the future.

organization’s Implementation Guidance.

use of the technology it has acquired. I think this must be the origin

faced by the world means sacrificing financial returns. This is a new

I think that the company should position its work in this field as aof the innovation that has been there since the company’s founding

set of contradictory themes, and to resolve them, it will be essential

project that contributes to the SDGs, and I hope they will

3. I think that in strengthening the initiatives above, Chiyoda should

achieved a balance between the contradictory themes of ‘harmony

to have youthful human resources with the ability to come up with

develop this as an initiative in the manner that the Chiyoda

definitely implement dialogue and engagement with theirbetween energy and the environment.’ That being the case, thefresh new ideas, further innovation to resolve issues, and steadyGroup is uniquely capable of.

stakeholders, who will be key actors in these initiatives. It is also

company personnel who engage faithfully in solving issues are

implementation of productivity improvements.

What I myself find most appealing in the message

and the widespread adoption of the SDGs, investors have become

communicated by the Chiyoda Group is that it will concentrate its
intelligence as an integrated engineering company and make goodthemselves the wellspring for the Chiyoda Group’s value creation. I
feel this very strongly.

voiced in the course of such dialog and engagement.

hope for realization of a carbon-free society and other expectations

I will state two hopes I have regarding the Chiyoda Group. One

placed on private enterprise have grown higher than ever before.
The creation of value by the Chiyoda Group will be communicatedof the future, and stimulate public opinion on the matter. For

in Japan and overseas through Group networks, supply chains,

example, say that the realization of a carbon-free society will remainvalue chains, and so on, and spread to the company’s business

an important topic even beyond the year 2030, which is thepartners and localities around the world. The more value thedeadline for achieving the SDGs. Someone has to present a

Chiyoda Group creates, the easier the world will become to live in.

29 CHIYODA GROUP Sustainability Report 2018

disclose in specific detail that process and any opinions that are

The SDGs have taken root as common goals for the world. The

is that the company will periodically announce its projected image

projected image of the future that has engineering corroboration

hoped that the company will heighten its transparency and

In Response to the Messages from Stakeholders
We are truly grateful that you expressed your views, which are of great value to us, in this report again
in FY2018 as you did in FY2017. The Chiyoda Group has responded to global requirements by establishinga new “Basic Policy on Human Rights” and “Tax Policy.” We are making a detailed study of the views
expressed regarding issues identified and measures that should be taken toward achieving a sustainable
society. Great anticipation was expressed regarding our establishment of a CSO and a Decarbonization
Promotion Office to advance our measures toward a carbon-free society. We will therefore make it our aim
to do what we are uniquely equipped to do as an engineering company that creates value for society
through technology and wisdom. That is, to create a projected image of the future that is corroborated byengineering, and to integrate that image with a management strategy for its realization. We hope we willcontinue to receive the unstinting expressions of your views from your professional perspectives.

Kaoru Nakamura
General Manager
IR, PR, and CSR Department

CHIYODA GROUP Sustainability Report 2018 30