Sustainability Report
2018Powering Progress
Together throughSustainability

Tableof Contents

This first edition of the MARELLI Sustainability Report marks
the beginning of a new phase, with the two companies
Calsonic Kansei and Magneti Marelli united since May 2019,
forming one new industrial entity, MARELLI.

• Top Commitment

03• Calsonic Kansei Sustainability Report

06• Magneti Marelli Sustainability Magazine: Start 06

40

As MARELLI, the new global entity is a leading player
in the industry, positioned as one of the world’s largest
independent automotive suppliers, with 62,000 employees
and 170 facilities and R&D centers across the world.
Within this publication we host the sustainability reportsof Calsonic Kansei and Magneti Marelli for the period 2018.
During this period each company operated as a separate
entity from what is now the MARELLI group, with different
reporting boundaries, metrics and standards of reference.
For Calsonic Kansei, the reporting period within this reportcovers 1 April 2018 – 31 March 2019. For Magneti Marelli,
the reporting period covers 1 January 2018 – 31 December
2018.
Although integration of our two companies has only justbegun, we chose to present the reports in one for the
purpose of transparency and ease of reference for our many
stakeholders. Through the reports we aim to display ourcommitment to the ongoing compliance and investment insustainability practices under the global brand, MARELLI.
As part of the ongoing integration of MARELLI, we will ensure
progressive alignment of strategies, metrics and reporting
methods. In future years, we are excited to report one single
MARELLI sustainability policy and commitments.

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Sustainability Report 2019

Sustainability Report 2019in mindset is prompted by a growing need to address climatechange caused by CO² emissions and more demand for sharedmobility and connectivity.
Leading in sustainability with product portfolio,
design, and skill
At the MARELLI Group, we recognize that our own productportfolio must provide a strong mix of established and newtechnologies to meet the needs of the evolving environment.
Our existing competitive product line will continue to provecritical going forward and we will compliment this throughongoing investment in research and development in order to
respond to meet the changes in consumer demand.
Realizing sustainable mobility via our thought leadership
I believe that, in particular, electrification of the powertrain
and the pursuit of zero-emission vehicles will gather pace.
This is an area where we are very confident that we can makea real difference in leading the transition to a greener future.
Autonomous driving is another key trend likely to accelerate
in the years ahead. The MARELLI Group can support thedelivery of safe, comfortable autonomous driving for people
with various needs and preferences through our cutting-edge
technologies, human centered designs and comprehensive
system solutions. Our safety-related technologies will also be
integral to this entire development.
Utilizing our global presence to be a green pioneer
As a leading production company with a large number ofmanufacturing plants across the world, we are well placed tomake significant steps towards greater sustainability.

Top Commitment

BUILDING A LONG TERM, SUSTAINABLE
BUSINESS THROUGH THE COMBINATION
OF TWO INDUSTRY LEADERS
Beda Bolzenius
President and Group CEO
MARELLI GroupA new dawn: for the industry and us
2019 marked a huge milestone for our company as CalsonicKansei and Magneti Marelli formally joined forces to create
one of the world’s leading global independent automotive
suppliers. In coming together under the global brand,
MARELLI, we can compete even more effectively on a global
scale, better serving our customers, employees, suppliers andmany stakeholders across the world within the many
communities we operate. With post-integration net sales of

03 4around €14.6 billion (approximately ¥1825 billion*¹), the
MARELLI Group becomes one of the top 10 largest independent
automotive suppliers in the world. Our aim is to build on thisposition in the coming years to create a strong and sustainablebusiness, delivering long-term value to all of our stakeholders.
The automotive industry is undergoing unprecedented change.
Advances in technology and changing consumer demand fueledby environmental considerations are driving the development ofsustainable, socially responsible vehicles. As a global automotive
supplier, inspired by our strong heritage in innovation andMonozukuri*² we take our role in contributing to a sustainable
society very seriously. Through ongoing investment insustainable technologies and innovation, we see a realopportunity to help shape the future of mobility.
Sustainability trend driving push for clean, shared cars
Central to what is considered the once-in-a-century
transformation of the global automobile marketplace is thedevelopment of Connected, Autonomous, Shared and Electric(CASE) mobility. Consumer attitudes towards the purpose, value,
and use of cars is changing. One of the critical factors in this shift

As part of our integration work, we are conscious of the need fora clear vision and implementation program for how we want toimprove our environmental performance, including via
purchasing and logistics. As a combined company, we arereviewing our environmental strategies to ensure we set
ourselves progressive targets helping to tackle climate change
related issues through recycling, resource efficiency, reduction ofpollutants, and protection of ecosystems.

We want to be an industry leader, not a follower. For that, wemust clearly communicate our vision and future direction
clearly, both internally and to communities. Sustainability will
form an important part of our combined group strategy as
we move forward in future years. The vision we project,targets we set, and plans we implement will be importantsignals showing how we intend to contribute to fundamental
and needed changes in society. Consistent with our current
approach, MARELLI will align its own Sustainability activities
to the United Nations’ Sustainable Development Goals.
I believe that there should be no compromise between the
global growth strategy of the MARELLI Group and the movetowards safer, cleaner, zero-emissions vehicles. It is thismessage that, with hope and excitement, I share with mycolleagues, business partners, customers, and society. While
we keep driving innovation in our manufacturing processes
to achieve state-of-the-art environmental performance, we
can grow our business with products and services that help
realize a more sustainable form of mobility for the world.
*1 Based on Fiscal 2018 figures. Converted at an exchange rate of €1= ¥125
*2 Monozukuri refers to the creation of value in all respects, throughmanufacturing fine products and providing excellent services in a timely manner
to meet customers’ expectations.

Now is the time to ask ourselves what we, as the MARELLI Group,
can further do to raise our environmental performance. CO²
emissions and their impact on climate change is among themost critical issues not only for our industry, but also forhumanity. Addressing it is therefore of key interest to ourstakeholders, and increasingly, our customers.
Today, we consider sustainability as impacting not only industry
trends, but also a new set of political priorities that may affectentire social systems in many parts of the world. We need agrowth strategy and a mindset that incorporates thisdevelopment. I do not see these changes in our relationship withthe environment and each other as something we should try to
avoid or merely react to; rather they represent a new set ofinnovation drivers that will help separate winners from losers in
the future global automotive market.
Sustainable Development Goals (SDGs)

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A PART OF

Calsonic Kansei Sustainability ReportE

E R N AN C

IR O N MEN
T

NV

OV

E

G

SummarySO

C IET Y

Calsonic Kansei Corporation
R&D Center, Headquarters
2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japan
Global Communication Department
www.calsonickansei.co.jp/en/

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2019
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Sustainability Report 2019

Sustainability Report 2019

Creating New Value
through Sustainability
Table of Contents
09-10
11-12
13-14
15-20
21

At a Glance
Sustainable Value Creation Process
Medium-term Business PlanOur Business Units and Sustainability
CSR Policy and Key CSR Issues

22
23-36

ESG Initiatives
Highlights

23
24
25
26

07 8

Environment
Green Challenge 2030 (Medium to Long-term Environmental Goals)
Climate Change
Resources Recycling
Environmental Pollution and Biodiversity

27
28
29
30
31
32
33
34

SocialImprove ESG in Supply Chain
Create Social Values Through Innovations
Respecting Human Rights
Occupational Health and Safety / Promoting Diversity
Promoting Work-life Balance
Human Resources Development / Productivity Improvement
Improvement of Customer Satisfaction / Quality Improvement
Promotion of Social Contribution Activities

35
36

GovernanceCorporate Governance / ESG Risk Management
Strengthening Compliance / Strengthening Information Security

37
38

Company Overview / Financial Highlight
Editorial Policy

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Sustainability Report 2019

Sustainability Report 2019

At a Glance
Consolidated Sales

Share of Consolidated Sales by Region
Japan
Americas

8,921

Asia
EuropeBillion Yen

36.6 %
27.5 %
24.3 %
11.6 %RUSSIAU.K.

GERMANYSPAINFRANCE

ROMANIA

U.S.A.

KOREA

JAPAN

CHINA

INDIA

MYANMAR

MEXICOTHAILANDMALAYSIABRAZIL

Regional Head Offices

Development

R&D / Global HQ

Testing and Research / Production Engineering

Number of Employees (Consolidated)

22,382

Production

Offices, etc.

Number of Employees by Region (Consolidated)
Americas
Asia

6,238
6,819

Europe
Japan

2,367
6,958

R&D Bases

9 14Countries

Production Sites

Bases

Consolidated R&D Expenditures

15 81 315.4
Countries

Bases

Billion Yen

Customer Auto Manufacturers

18

companies

As of March 31, 2019, Calsonic Kansei only

09 10

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Sustainability Report 2019

Sustainability Report 2019

Sustainable Value Creation Process
We have addressed solutions to social issues related to mobility by using the diverse technologies wehave cultivated through the manufacture of automotive components.
Going forward, leveraging our deep knowledge of the mobility market, we will promote innovation and,through the creation of value that is distinctive to our Group, contribute to realizing a sustainable society.

Social Issues

Major Trends in Mobility Markets

Our Technology Domains

Medium-term Business Plan*

SDGs Targeted in
Business Strategies

Value Provision

CPM / Interiors technology
Interior Experience Business Unit

Population growth

Resource
depletion

Fuel economy
improvements

Sys
So teml
Pr utio
ov n
id
er

p.15

Electronics technology
Electronics Business Unit

p.16

ClimatechangeEnvironmental Burden
Mitigation

Electric Powertrain Business Unit

Air
purification

Air pollution

We will contribute to the reduction ofgreenhouse gases and to the efficient use ofresources through efficiency improvements,
weight reductions, reuse and recycling.

p.17

Autonomous
driving vehicles

We will contribute to the mitigation of theenvironmental burden of cities with air
purification technologies.

Heat exchange technology
Thermal Solutions Business Unit

p.19

Population aging

Electrification
Climate control technology
Cabin Comfort Business Unit

p.20
Urbanization

Connectivity

Safety and Security

OutputWe will provide a comfortable, convenientmobility environment to contribute to
freedom of movement and to improving thequality of life.

Energy Management (Energy efficiency / Environmental performance)

Mobility
services

Population concentrationin cities

Domains of Focus

Compressor technology• Environmental technology• Integrated energy management

Cabin Comfort Business Unit

• Thermal energy management technology• New-generation power electronics• Electric energy management technology• Power-saving systems

p.20

Cabin Innovation (Cabin space / Human-machine interface)
Exhaust technology

Advancedcomputerization

Green Technology Systems Business Unit

p.18

Comfort andConvenience• HMI / Utility• Intelligent HMI• Interior design• Interior value products• Cabin environmental control• Connected systems• Inside/Outside communication technology• Cyber security

We will create safe and reliable cabin
spaces to contribute to reduction in traffic
accidents.

Risks and opportunities based on social issues and major trends in the mobility market

!
Risks

Opportunities

E : Environment

S : Social

G : Governance• Restriction of fossil fuel mobility due to climatechange• Tight raw material supply and demand due toresource depletion• Shift toward public transport due to population
growth and urban concentration• Decline in labor force due to population aging• Information security threats• Scandals due to dysfunctional internal control• Support electrification as a countermeasure toclimate change and atmospheric pollution• Development of products that will contribute toimproved fuel economy and resources recycling• Action toward highly safe autonomous driving
technologies• Safety measures for connectivity• Improve labor force through workplace safety,
productivity improvement, and diversity• Improve external evaluation through theestablishment of voluntary regulations that exceed
statutory regulations

We have identified the top priority CSR issues that we will engage in, based on the risks and opportunities.
1112

p.21

Management Assets

Intellectual property

Human Resources

R&D expenditures

Number of
consolidated employees

Degree of value penetration
among employees

31.54

22,382Global ave :Billion Yen

Production sites

Customer Assets

3.18 / 4

PointsCustomer auto
manufacturers

Customer satisfaction

18

3.44 / 5

Companies

Points81

sites*The 2018 to 2021 Medium-term Business Plan was formulated by Calsonic Kansei before Calsonic Kansei and Magnetti Marelli integrated their businesses.

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Sustainability Report 2019

Sustainability Report 2019

Medium-term Business Plan

We aim to be a “System Solution Provider” focused on cabin innovation and energy management with the DNA of technology innovation and a passion for Monozukuri.

Growth Strategy: 3 Pillars

Business Foundation: CSR Activities
In light of the Medium-term Business Plan, the CSR medium-termplan was updated in Fiscal 2018 to become the plan for up to Fiscal
2021. Based on this plan, which reflects the latest demands fromstakeholders, we will pursue activities throughout the group as a
global company, and use the PDCA cycle to manage progress.

Financial target: Value-added sales of 750 billion yen(Sales excluding parts specified by and supplied from completed vehicle manufacturers)

Develop
new products“unique toour company”

Sy
st
So em
lu
Pr tioov n
ider

CSR Vision

Developnew customers

Realize Dantotsu
Monozukuri

Toward the goal of remaining an honest and trusted
company, we strive to create a rewarding workplace,develop CSR-aware employees who tackle social issues,build a resilient company, and contribute to the achievementof a sustainable society.

Priority Areas

1. Develop new customers
In addition to promoting the maintenance and expansion of businesswith Nissan Motor, our main customer, we will also diversify ourcustomer base and expand sales. We will create a specialized teamfor expanding sales and steadily advance step by step based on
concrete milestones.

SystemProducts

Human Machine Interface

Electric Power Management

Cockpit Module

Thermal Management

2. Develop new products “unique to our company”

Climate Control System

Control System

We established a future product planning office for the purpose ofstrengthening our two domains of focus and will promote thedevelopment of new products that have appeal "unique to ourcompany". We will actively propose products and technologies that
anticipate the market and customer needs.

Heat Exchange, Climate Control

Displays

Electronics

Energy Regeneration /Conversion

Network / Communication

ExhaustExhaust Purification /Restriction Compliance

Safety Evaluation

Technology

Optimal Temperature Control

Interior

Usability
SensingReliability Evaluation

Traction Control

CAE / MBE

High Voltage System Design

Mechatronics

Energy Balance Prediction

Circuit / Software Development

3. Realize Dantotsu Monozukuri
Our aim is a production system that realizes the value of products andservices that satisfy customer needs at the highest level of efficiency.
Specifically, we will promote automation and in-house production that
increases cost competitiveness, on-site management that brings
stability to quality, and initiatives for new production technologies.

Domains of Focus

Cabin
Innovation(Cabin space / Human-machine interface)&

EnergyManagement(Energy efficiency / Environmental performance)

Ideal Form and Domains of Focus

1314

In July 2017, our Group implemented our new Medium-term

domains of cabin innovation (cabin space / human-machine

Business Plan. This is our first mid-term management plan after

interface) and energy management (energy efficiency / environ-

becoming independent from the Nissan Motor Group. It defines

mental performance). We will continue to further refine ourour ideal form (our “to be”) as a “System Solution Provider”.

competitiveness at each level of technology, products, andUtilizing our inherent strengths with a wide range of technologies

systems, and provide our customers with systems that anticipate

and products for automotive parts, we set our focus on the two

future value.

▼Improving Employee Awareness• Creating a rewarding workplace (decent work)• Improving employee awareness about tackling social issues▼Coexisting with Society• Support for international norms• Resolution of social issues through business operations• CO² emission reduction activities based on SBT▼Improving Corporate Value• Achieving the Medium-term Business Plan
• Strengthening our CSR activities

Applying ISO 26000(International guidance on social responsibility)

Regarding “Coexisting with society”, we set a target for reducing ourCO² emissions based on SBT. We will achieve this target throughthorough energy conservation activities and introducing renewableenergy.

State of Progress
In Fiscal 2018, we reviewed our management structure andtransitioned to Business Unit entities. Through these changes, we willachieve speedy decision-making and clarification of responsibilities, astrong spirit of enterprise and flexible portfolio management, andmake creative innovation possible. At the same time, we will pursue atransformation into a company that finds value in quality and speed.
We are also pursuing the integration of our management with that ofthe Italy-based global automotive supplier, Magneti Marelli. As a world
leading independent general automotive supplier, we aim to offer
value to all of our stakeholders.

As an activity to prevent global warming, we will promote
CO² emission reduction activities based on SBT.
CO² emission reduction target in Scope 1 and 2 (vs FY16 amount)

7%
FY16

FY21

35%
FY30

FY16=100

90%
FY 50

With intensive energy-saving activities & introduction of reusable energy,
we aim to reduce CO² emission.

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Sustainability Report 2019

Sustainability Report 2019

Our Business Units and Sustainability

Business unit interviews were conducted in April 2019 based on the structure and person
in charge at the time. The titles shown in this report are current as of June 2019.

Interior Experience Business Unit

Hideaki Watanabe
Executive Vice President
CEO, Interior Experience Business Unit

New Value Propositions that Only Our Exhaustive
Knowledge of Cockpits Can Provide
The Interior Experience Business Unit provides not only instrument
panels and other interior products, but also cockpit modules (CPMs)
that contain those products to provide an approach of meticulous
support to its customers. In CPMs, everything from styling to layout
design, component design, process design, production, and supply
chain management, which are domains that are usually tackled by the
car makers themselves, can be performed in-house.
CPMs are assembled alongside the car maker’s production line. This
has enabled them to shorten the vehicle production line and build
multiple models on the one line, contributing to improved productivity
in production. Since we are providing the CPMs, the car makers havebeen able to cut down on man-hours and allocate more resources tothe development of CASE, which are the megatrends of theautomotive industry today. This brings about enormous benefits forcustomers.
The basic concept of the cockpit module lies in improving efficiency.
Improving the efficiency of the production system in turn contributes toreducing the burden on the environment.
With the progress being made in vehicle electrification andautonomous driving, we are required to propose the vehicle interiorsof the future. Precisely because we have such an extensive
knowledge of the structure of cockpits, we are able to propose newvalue in what can be installed. This could be described as one of ourmajor strengths.

Electronics Business Unit

Achieved a weight reduction of 35% in the cross-car beam by changing to aluminumand 30% in the instrument panel lining with the use of foam molding.

Makoto Ishibashi
Senior Vice President
Electronics Business Unit, Senior Global Director (Innovation)

Above: Current weight detection type ODS.
Below: Next generation ODS that distinguishes between adults and children using aunique algorithm based on the skeleton of the occupant detected in a near-infrared
camera image. The next generation ODS is capable of supporting airbag deployment
control as well as individual authentication making it possible to reproduce theoccupant’s desired air conditioner and other settings.

Innovation that Supports the Evolution of Cars

Creating New Value in the Electronics Domain

Safety and Security Supported by Electronics technology

We declared “cabin innovation” in our medium-term business plan as
our response to the CASE initiatives being pursued by our customers,
and by fusing new technologies together with the technologies
cultivated in our wide range of cabin-related products, we aim torealize safe, secure, and comfortable cabin spaces that will bring
added value to the new mobility society. In particular, a key point is topursue spaces that support autonomous driving, and this means carsthat can be driven safely, even by drivers of more advanced age, andinterior technologies that support such cars. In the area of connectivity
as well, we want to create new value by providing safe, comfortablecabins for a new kind of car life, such as data confirmation functions,and new ways of enjoying time inside the car, and we hope to connect
this to new opportunities for growth.
In the interiors area, weight reduction, resources conservation, andother ways of reducing environmental burden will be a major theme.
Lighter, thinner materials, material modifications, less wastage in theuse of materials, and reduction in quantities used through more
efficient plastic molding and simplification of structure...these are theareas to which we are devoting our efforts. Thinking about
production-focused easy to produce structures in the design stage will
also help to reduce the burden on the environment.
These initiatives come under Goal 3, health, Goal 7, clean energy,
and Goal 12, responsible production, in the SDGs.

The Electronics Business Unit engages in business in a very wide
range of domains in the areas of human-machine interfaces (HMI)
and body electronics. A major feature of our business is that, insteadof revolving around products, our business extends across the entire
electronics domain, creating value that does not currently exist.
Against the background of the CASE megatrends in the automotive
industry, we see major opportunities for the blossoming of the car
electronics technologies we have built up to date. These trends
include a great many essential values, including safety and security inthe mobility society, and enriched lifestyles. It is the mission of ourbusiness unit to accurately identify those values, build new businessmodels, and create new value that will contribute to people andsociety.
To deal with the risks that accompany CASE, in 2017, we establisheda cyber security company that specializes in automobiles. Called
White Motion, this company provides cyber security solutions with thereliability of motion that is vital to vehicle in mind. We believe that
initiatives to prevent the threats to automated driving and connectivity
and to increase their reliability are the social responsibility of
automotive component manufacturers dealing with CASE.

Our business unit hopes to contribute to society by supporting the eraof transformation of the mobility society with safety and security fromthe HMI and body electronics domains. One example is a productcalled the Occupant Detection System (ODS). Airbags are important inlife-threatening accidents, but when infants and small children are on
board, the activation of the airbag itself can be dangerous. ODS is a
device that detects the occupant of the passenger seat to determine
whether or not it is safe to activate the airbag and controls its activationaccordingly. The current system does this based on the weight of theoccupant, but in future, we hope to increase the accuracy of suchdeterminations by using cabin monitor cameras and image recognition
technology to detect the occupant’s position. These technologies could
also be adapted to detecting if a driver is dozing at the wheel, and thesame camera image information could be used to control the
air-conditioning and create a comfortable cabin environment. In thearea of lithium ion batteries, we will use battery status estimation
technology to monitor and control the status of individual battery cells.
As well as delivering safety and security, this will contribute to greater
energy efficiency and to the effective use of resources.
Our aim is for a world in which, in the age of autonomous driving
vehicles, computers will take the place of drivers in achieving safety. To
respond flexibly to such a world, in the area of detecting dozing at thewheel, as well as our own original research, we are participating in joint
demonstration testing with the Japanese government and in many joint
research projects with universities.
Meanwhile, as well as responses to CASE, with the upward trend in theuse of batteries and motors in cars, reducing the use of rare metals andrare earth minerals such as lithium, copper, and gold has become an
important management issue. We consider proactive initiatives aimed
at a circular society to be essential.
By pursuing these initiatives, our business unit will contribute to Goal 3,
health, Goal 7, clean energy, and Goal 12, responsible production, in
the SDGs.

Relevance to the SDGs

1516

Relevance to the SDGs
3: We will create safe, secure interior spaces by developing cabins that are easy even for drivers of advanced age tooperate and reducing the use of VOCs inside the cabin.
7: We will increase vehicle energy efficiency by reducing the weight of components, thus contributing to reduced CO²
emissions.
12: We will contribute to reducing the burden on the environment through highly productive Monozukuri across theentire supply chain.

3: As well as reducing traffic accidents through electronics technologies, we will contribute to the safety and securityof the mobility society by strengthening cyber security.
7: We will contribute to the improvement of energy efficiency with electronics technologies that support EVs.
12: We aim to build a circular society as a manufacturer that uses rare metals and rare earth minerals.

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Sustainability Report 2019

Sustainability Report 2019

Electric Powertrain Business Unit

Green Technology Systems Business Unit

Manifold converter(purifies exhaust gases)
Underfloor catalytic
converter(purifies exhaust gases)

Exhaust manifold
Muffler (muffles noise and dampens vibrations)

Joachim Fetzer
Executive Vice President
CEO, Electric Powertrain Business Unit

Supporting the Transition to Electric Vehicles
We are moving toward a sustainable, low-carbon society, and theelectrification of vehicles is a key aspect of this transition. At ElectricPowertrain Business Unit, we are in a strong position to takeadvantage of this trend and stake out a dominant place in this growing
market.
I believe our flexible thinking and superior technological strengths willlead to successful growth strategies in China and Europe, which arelarge and growing markets for electric vehicles. At the same time, wewill make a major contribution to reducing humanity’s burden on theenvironment.
The strength of our business unit lies in our highly competitive
Monozukuri — our manufacturing prowess — from the perspective ofinnovative design premised on high productivity, manufacturing
process and price. We have both a technology roadmap to develop
superior products and a production roadmap to bring them to market.
Demand is soaring for our systems and components for electricvehicle powertrains. These include electric motors, inverters,
gearboxes, DC-DC converters, onboard chargers and battery
management systems. All of these are world-leading in terms of both
hardware and software.
We have developed a number of characteristic technologies andproducts, including hairpin winding technology to boost output
performance drive motors, new control algorithms, SiC technology
and next-generation GaN technology.

The inverters installed in the world’s first mass-production electric vehicle and have theproduction capabilities to respond to the popularization of electric vehicles that is
anticipated in the future.

Shuji Kobayashi

Contributing to a Safe, Secure and Low-carbon Society

Global Supplier that Meets the Requirements of Society

One of the most important themes in sustainability is climate change.
Electric vehicles can help reduce some of its causes, including CO,
SOx and CO² emissions, and they can contribute greatly todecarbonization and to reducing air pollution. From the perspective ofenergy diversity as well, they are attracting attention because of theirability to use renewable energy sources.
Our strength lies in both the quality and the breadth of our productrange that supports electric vehicles.
As everything becomes interconnected, a major concern in themobility society is potential threats to cybersecurity. This is a crucial
issue, and it is important to take a broader perspective, realizing thatthe problem does not affect electric vehicles alone. It encompasses
mobility, communications, the internet of things -- our entire
connected society.
In our business unit, we are serious about reducing the burden on theenvironment. Therefore, we are determined to contribute to the UN’s
Sustainable Development Goals -- in particular Goal 9, technologicalinnovation; Goal 11, sustainable communities; and Goal 12,
responsible production.
I believe a core theme of sustainability is mobility. The efficient supply
of goods and services in the automotive industry, with its extensive
range, has a major impact on society. Therefore, reducing theenvironmental burden from transport, which directly affects corporate
activity and daily life, will contribute to the sustainability of ourenvironment and of society as a whole.
My vision is for our company to become a leader in e-mobility by
managing and controlling power in electric vehicles and perfecting the
optimization of energy flows. At the same time, this will be a powerfulcontributor to solving a variety of social issues.
By innovating to develop superior new products and harnessing our
superior Monozukuri to make them, we offer electric vehicle
components that connect the technologies we have accumulated with
our intentions for the future. In so doing, we will continue to meet thechallenge of building a sustainable society.

Relevance to the SDGs

1718

and the Expectations of the Car Markers
Steady progress is expected in the electrification of vehicles going
forward. However, given the time that will be needed to conquer
challenges such as infrastructure development and electricity supply,
the popularization and expansion of these vehicles is unlikely to be
rapid. Looking at the long-term up to 2060, there may be isolated
regions in which they do become popular, but electric powertrains
equipped with internal combustion engines (ICE) are predicted to be
the mainstay. Meanwhile, against the background of the automotive
industry’s CASE megatrends, with their survival at stake, as well as
exploring various business schemes, the only options for the car
makers are to pursue collaboration and cooperation with each otherand with partners in other industries, and to concentrate the allocationof their limited resources into these areas. In terms of the exhaustemissions of ICE-equipped electric powertrains, this will give global
suppliers such as us more opportunities to shine.
Environmental laws and regulations related to exhaust emissions, fuelconsumption, and noise will become increasingly stringent. However,this actually represents growth opportunities for suppliers that havethe ability to meet such stringent environmental requirements. So that
we can continue on our path as a global comprehensive automotive
supplier and to respond quickly to change, we have always provided
feedback into development strategies that look five and ten years into
the future. We have established systems that allow us to respondflexibly and speedily to environmental regulations and market
developments such as CASE. As well as conventional systems, wewill work on developing innovative products that anticipate the future
and propose solutions that will exceed the expectations of the car
makers, which we hope will lead to major business opportunities.

Relevance to the SDGs
9: We will create innovative clean technologies for electric vehicles.
11: We will contribute to reducing the burden on the environment, such as reducing CO² emissions and air pollution incities with products and technologies that support electric vehicles.
12: We will contribute to reducing the burden on the environment through rational and environmentally-friendly
Monozukuri across the entire supply chain.

Product that combines purification performance and pressure loss at a high level while
maintaining compactness with its catalytic converter for purifying exhaust gases
efficiently installed in the tight space of the engine room.

Executive Vice President
CEO, Green Technology Systems Business Unit

MBE Development and One-team Monozukuri Activities
Our exhaust system is a combination system consisting of hot products(exhaust manifold and catalytic converter), cold products (muffler box,
front and rear pipes), and tailpipe. The main functions of this system,
which extends under the floor from the engine room to the rear of thevehicle, are to purify exhaust gases, muffle noise, and dampen
vibration. The system also needs to have sufficient durability andreliability even in harsh conditions, such as high exhaust temperatures,
inferior fuel, salt damage, and poor roads.
Meanwhile, the pace of development by car makers continues toincrease, and virtual development and support for global platforms areprogressing. Under these circumstances, to clear the required productspecifications, shorten development cycles, and improve quality, we are
actively incorporating Model Base Engineering (MBE) development.
With this development approach that entails breaking down the superior
functional requirements (in this case, the vehicle requirements) into thefunctional requirements of each product and efficiently conducting
analysis, design, and verification of system requirements, our strengthlies in our ability to balance conflicting phenomena at a high level andachieve high degrees of functionality, performance, and quality incompact, lightweight products. We also employ a variety ofdevelopment tools to engage directly in the process from designconcept to trialing, to prevent having to redo development.
Reducing the substances that cause air pollution is one mission of theGreen Technology Systems Business Unit, and we are engaging
proactively in developing new, innovative products that willaccommodate the increasingly stringent environmental regulations of
the future. We are pursuing simultaneous engineering, in which design,
production engineering, the manufacturing plant, and suppliers work
together from the initial stages of development. Based on 5G
methodology (genba, the actual place or source of the problem,
genbutsu, the actual article, genjitsu, the facts, genri, fundamental
principles, and gensoku, the rules), each division contributes its
respective knowledge and ingenuity in a spirit of friendly competition in
the pursuit of Monozukuri that will raise the competitiveness of our
products and contribute to reducing the burden on the environment.
These initiatives equate to Goal 3, health, Goal 7, clean energy, andGoal 11, sustainable communities, in the SDGs.

3: We will reduce the atmospheric pollutants found in exhaust gases to reduce the detrimental impact on humanhealth and living environments.
7 & 11: We will use our collective strengths, including collaborations with our supply chain, to reduce exhaust gaseswith the aim of realizing cleaner exhaust emissions.

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Sustainability Report 2019

Thermal Solutions Business Unit

Bharat Vennapusa

Cabin Comfort Business Unit

Battery Thermal Plate, which along with our intelligent thermal system, will contribute tomaintain optimum battery temperatures for range and life extension of batteries.

Executive Vice President
CEO, Thermal Solutions Business Unit
CEO, Cabin Comfort Business Unit

Providing Solutions to the Increasingly Diverse Needs

Contributing to the Popularization of E-mobility withof Electrification

Intelligent Thermal Management

Monozukuri to Suit the Country or Region

Contributing to Society with Improved Energy Efficiency

Our business unit is committed to provide solutions for ICE (Internal
Combustion Engine), HEV (Hybrid Electric Vehicles) & BEV (Battery
Electric Vehicles) for efficiency improvement, contribution to CO²
reduction thus creating a better world for current & next generation. For
ICE & HEV, we have been providing EGR-C (Engine Gas Recirculation-Cooler), BOC (Build in Oil Cooler) & CAC (Charge Air Cooler) targeting
exhaust gas, transmission oil & intake gas respectively contribution to
reduce CO2 by increasing fuel efficiencies. With the shift in market toelectric vehicles, we are working to develop a total thermal
management system for batteries.
In our business unit, we effectively manage thermal energy of thebatteries in HEV (Hybrid) & BEV (Battery). This is particularly importantin electrically-powered vehicles such as hybrid & full electric.
Lithium-ion batteries, which are highly efficient and have high energy
density, need to be cooled during charging/running whereas it also
needs to be heated in cold climates when starting the vehicle. Our
business unit`s thermal energy management system aims to effectively
maintain optimum temperatures for energy efficiency using battery
thermal plate & various sensors which will be operated by control
module. Effective battery management will also help extend the life of abattery.
The auto industry is seeing a significant shift toward increaseelectrification of the power train and related systems. Making safe,
effective use of these electrical energies to the greatest extent possible
is essential from the perspective of protecting the global environment.
Our strengths are the development of solutions needed in thermal
management, including the battery, and the technical capabilities andexpertise to commercialize those solutions. Through co-developmentwith battery manufacturers, we will respond to the demands of the car
makers and society.

The market is moving towards electrification at a very fast paceparticularly in China and Europe. As the market grows, competition is
also expected to become increasingly intense. We want to deliver new
technologies to the battery OEMs in these countries and regions.
However, because there are no unified global directions for mobility
solutions and regulations, we need to minimize this risk by expanding
business in emerging countries as well as in developed countries where
automotive markets overall are already very mature. We see this as achallenge not only for the car makers, but also for us.
With the electrification of the powertrain, the role of thermal
management has become increasingly complex and comprehensive.
There are more and more needs that are not confined to battery
cooling. Thermal management, including increasing the efficiency ofelectrical energy to improve the car’s overall performance, holds the
key to solving these challenges. We are a global, comprehensive
supplier of automotive systems. Leveraging the strength of our diverse
product line coupled with our ability in whole-car management, with ourintelligent thermal management that considers the entire vehicle in acomprehensive way, we are able to respond to the e-mobility.
Electrically-powered vehicles will contribute to the realization of azero-emissions society. In terms of the SDGs, we believe our business
unit can make major contributions to Goal 7, clean energy, Goal 11,
sustainable communities, and Goal 13, climate action. By offering
technologies and products that support these goals, we will continue
our challenge toward realizing a sustainable society.

A vehicle’s climate system automatically regulates air temperature, andquantity, direction independently for the passenger, and otheroccupants. It is a high-performance air-conditioner that uses sensors
and other elements to detect the external temperature and sunlightcoming into the vehicle and maintains the cabin temperature at aconstant set level. In the Cabin Comfort Business Unit, we build avariety of climate systems for different vehicle models at the request of
the car makers.
In our global expansion, different countries and regions require different
specifications, but our goal is to develop products that will meet themall. In addition, in line with the trend toward the electrification of
automobiles, we are working on the development of heating andrefrigerant heat pump system, and electric compressors as its main
component. Regular compressors are a component of the
air-conditioning cycle. Powered by the engine, they intake andcompress refrigerant gas, and send heated, high-pressure gas to thecondenser. The electric compressor is designed to meet global
requirements, and once perfected, we believe we will be able toproduce a climate system for electric vehicles that will meet the
specifications of any country and region, including China and Europe.
We are aiming to establish a technology we can bring to market by2021.
However, there is not a global agreement on standardization of therefrigerant due to differences of opinion from country to country. This isa risk for our business unit. Despite that risk, a unique part of our
Monozukuri is that our products are zero carbon products made with
100% recycled materials. We want to respond to our customers’
requirements with our Monozukuri and to realize a global zero-carbon
footprint.

Similar to the Thermal Solutions Business Unit, the Cabin Comfort
Business Unit’s greatest goal is to improve the efficiency of energy use.
In the air-conditioning domain, instead of thinking in terms of single
products, it is important to have a perspective of improving theefficiency of the entire vehicle. By optimizing the energy needed toachieve occupant comfort and reducing wasteful energy consumption,
we can improve fuel efficiency and vehicle performance. We areworking with the Environmental Protection Agency (EPA) toward goal of
obtaining approval of off-cycle credit for our compressor. Under the
EPA’s off-cycle credit program, the vehicle’s environmental
performance is evaluated and credits are issued according to theevaluation score. For the car makers, this has a major advantage interms of meeting fuel efficiency regulations.
We are working to improve thermal efficiency not only in the products
themselves but also by introducing new technologies to ourmanufacturing processes, which will lead to improved energy
conservation. We believe that pursuing efficiency in our plant andproduction processes is important in any consideration of sustainability.
With these approaches, we will contribute to Goal 7, clean energy, Goal
12, responsible production, and Goal 13, climate action in the SDGs.

Relevance to the SDGs

Relevance to the SDGs
7: We will contribute to improving energy efficiency through thermal management.
11: We will contribute to reducing the burden on the environment, such as reducing CO² emissions and air pollution incities with products and technologies that support electric vehicles.
13: We will contribute to alleviating climate change and reducing its impact through thermal management.

1920

Heat pump heating and refrigerant system that contributes to enhanced cabin comfort
and extended EV driving range through improved efficiency by reducing weight throughsimplified system configuration.

7: By improving compressor efficiency, we will raise the combustion efficiency of the engine, contributing to improved
fuel efficiency and better efficiency of energy use.
12: By taking the environment into consideration in our materials, we will contribute to reducing CO² emissions andcurbing the generation of waste.
13: Through the provision of climate systems, we will contribute to the mitigation, adaptation, and reduction of the
impacts of climate change.

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Report 20182019
Sustainability

Sustainability Report 2019

CSR Policy and Key CSR Issues

ESG Initiatives

CSR Policy
Responsibilities to Stakeholders and Society

Responsibilities to Shareholders

Our CSR Policy outlines the responsibilities and policies we promises tofulfil for our stakeholders, with a view to achieving our “Corporate Vision.”
Based on this policy, each employee contributes to the achievementof a sustainable society by conducting their daily operations with anawareness of social responsibilities and with well-balanced business
management based on environmental, social, and economic aspects.

We aim to improve our profitability by continuously developing
competitive products, and, at the same time, we aim to enhance thecompany’s corporate value by conducting fair business trade andproactive information disclosure in order to meet the expectations of
our shareholders.

Responsibilities to Customers
We aim to be the most trusted parts supplier by responding to thediversified needs and expectations of society and providing
high-quality products and services that satisfy our customers.

Responsibilities to Business Partners
We will collaborate with our business partners, who provide us withcomponents and services, as equals, and aim to create mutual
improvement and sustainable growth through fair and ethicalbusiness practices.

With our aim of realizing a sustainable society, we position CSR as the foundation of our management, and to

Monozukuri
We will contribute to the automotive society through our products byfocusing on three key technologies: Environment, Safety and Comfort.

Environment:
Technologies for developing eco-friendly-vehicles

Environment

Environment
We will contribute to the sustainable development of society as good
corporate citizens by proactively participating in social activities of local
communities through our business activities.
Responsibilities to Employees’ Health and Safety
Based on the basic principle “the health and safety of employees
takes precedence over all,” we are committed to creating the safest
and most appropriate workplace in the auto-parts industry through theparticipation of all employees.

Stakeholder Expectations

Extremely highGovernanceThe 23 CSR key issues are
introduced on the pageon the right.

• Effective use of resources• Quality improvement• Strengthening compliance• Climate change action• Maintain occupational health and safety• Strengthening information security• Prevention of pollution• Improve customer satisfaction• ESG risk management• Create social values through innovations• Respecting human rights
Improve ESG in supply chain• Promoting diversity• Promoting work-life balance• Human resource development• Protection of water resources• Productivity improvement• Protection of biodiversity• Dialogue between management andemployees• Promotion of social contribution activities• Strengthening of business continuity
management (BCM/BCP)• Prevention of corruption and bribery• Maintenance and disclosure of
appropriate tax administration

Top Priority Issues

Priority Issues

High

In the review of our key CSR issues that we performed in Fiscal 2017,
we first confirmed the latest trends in social expectations before
carefully examining the contents of our initiatives. We then conducted anassessment based on the two axes of (1) stakeholder expectations, and(2) impact on business, based on which we identified 23 key issues for us
to address, 15 of which we identified as top priority issues.
We also set KPIs for each of those issues, and we are implementing
the PDCA cycle based on their respective degree of priority.

Materiality Map

Priority Issues

Key CSR Issues

Top Priority Issues

Comfort:Technologies for developing vehicles that drivers can drive with comfort

Based on the basic principle “the health and safety of employees takes
precedence over all,” we are committed to creating the safest
and most appropriate workplace in the auto-parts industry through theparticipation of all employees.

Materiality

SocialSafety:Technologies for creating an automotive society without car accidents

Responsibilities to Employees’ Health and Safety

We have identified our key CSR issues and KPIs as a concrete action planfor the CSR Medium-term Plan, and are striving to reliably implement the
PDCA cycle to achieve them.
In Fiscal 2017, with the announcement of the new Medium-term
Business Plan in September 2017 titled Compass 2021, we
conducted a review of the key CSR issues that we identified in Fiscal
2015, and aligned them with the rapidly-changing expectations ofsociety and with the new management plan.

environment (E), social (S), and governance (G).

Responsibilities to Society

Responsibilities to Employees
We respect the diversity and value of each employee and provide
opportunities for them to develop talents that contribute to the company
and to society, as well as securing a healthy and safe workplaceenvironment. With this approach, we will create a company in which
every employee can enjoy a rich life of hope, passion, and pride.

increase our corporate value, we are pursuing initiatives for priority CSR issues from the aspects of theHigh

Extremely highImpact on Businesses

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Highlights

CK = Calsonic Kansei Corporation
Japan = CK, consolidated subsidiaries in Japan
Global = Japan, major overseas group companies

Environment
To further enhance protection of the environment through our global corporate activities, in
response to the international community’s demand on businesses to be considerate of theenvironment, we revised our Environmental Policy established in 2000, relaunching it inMarch 2018 as the Green Policy. This new Policy comprises the Basic Environmental Policy
and Environmental Action Guideline. Based on this policy, we have established Green
Challenge 2030, our medium to long-term environmental goals to 2030, as the vision we aim toachieve through environmental activities. We will all engage in environmental activities as one
team and contribute to the realization of a sustainable society.

GlobalGreen Policy (Environmental Policy)

Green Policy (Environmental Policy)

Basic Environmental Policy
To contribute to building a sustainable society, each individual shall strive to protect the environment at
every stage of our business activities.

To further enhance our initiatives to protect theenvironment through our global corporate activities, werevised our Environmental Policy established in 2000,
relaunching it in Fiscal 2017 as the Green Policy, which
comprises the Basic Environmental Policy andEnvironmental Action Guideline.
Based on this Policy, we will all engage in environmental
activities as one team and contribute to the realization of asustainable society.

Environmental Action Guideline• Continuously improve current target-achieving activities and environmental
management systems globally by setting annual plan based on compliance, social demands,
and long-term vision.
• Promote development of environmentally friendly products, with consideration to the lifecycle.
• In addition to making efforts to prevent pollution and complying with laws and regulations, etc.,
promote reduction of environmental impact caused by corporate activities.
• Enhance communication with stakeholders. Promote coordination, cooperation and involvement withlocal communities, governments, and municipalities regarding environmental protection.
• Build coordination and cooperation not only with affiliates but with customers and business partners
towards reduction of environmental impact on the overall supply chain.

GlobalGreen Challenge 2030

(Medium to Long-term Environmental Goals)

Climate Change

GlobalApproaches to Climate Change

Trends in CO² Emissions and Emissions Intensity

We have positioned responses to climate change as a top priority
issue in our environmental activities and engage in those responses
at all of our global sites. In our activities, we identify the risks andopportunities for society and corporate activities presented by climatechange. In terms of the physical risks posed by climate change, thereis the disruption of parts procurement and supply and the suspensionof plant operations due to torrential rain and flooding.
Meanwhile, we view the leveraging of our technological strengths inthermal energy and electricity energy management, to send out into
the world products that will contribute to the reduction of CO²
emissions, as a business opportunity. We consider the identified risks
and opportunities and the conspicuous environmental aspects andobligations and incorporate them into our activity plans. Based onthese plans, we strive to achieve our targets and make continuous
improvements.
In Fiscal 2017, we established CO² reduction targets that incorporate
the concept of Science Based Targets (SBT), an international
initiative that declares CO² reduction targets to achieve the Paris
Agreement’s “2°C Target,” and declared those targets in our
medium-term business plan, Compass 2021. In addition to the energy
conservation activities that we have been engaging in for some time,
we are working on the introduction of energy-saving equipment andthe adoption of new manufacturing methods that will lead to energy
conservation, and will further accelerate the reduction of CO²
emissions from our business activities.
Our total CO² emissions in Fiscal 2018 came to 192,000 t-CO². In
terms of emission intensity (total CO² emissions/sales revenue), we
pursued activities aimed at reduction targets of 17.9% for overseas
and 22.5% for Japan compared to Fiscal 2005. The overseas result of
a 13.8% reduction fell short of the target, but emissions in Japan in
Fiscal 2018 were reduced by 28.0%, achieving the target.

Environmental management
We aim to be a corporation in which every individual employee is aware of the environment and think and act accordingly.

300[t-CO²/million yen]

0.285

0.219
0.206

0.204

0.215

0.231

200

80

125

126

127

126

122

103

70

67

71

73

70

100

0

2005

2014

2015

CO² emissions in Japan (left axis)

2016

2017

2018

CO² emissions overseas (left axis)

CO² emissions intensity (right axis)

Japan

Contribution To Electrification
Regarding the goal of “Climate Action,” which is one of the SDGs, we
believe the electrification of vehicles to be an effective method ofachieving this goal. We are actively supporting electrification andengaging in the following initiatives, concurrently with productdevelopment.
Major Initiatives• Installation of rapid charging stations outside company headquarters, accessible freeof charge to anyone in the region• Introduction of Work Place Charging, which visitors and employees can use to charge
their EVs, at all our sites and some group companies in Japan• Introduction of HEVs and EVs to company fleets

CO² Emissions by Region[Unit: Thousand t-CO²]
Asia[Thousand t-CO²]

35.93
19%
Japan

Climate change

Resources recycling

We aim to reduce CO2 emissions throughout theentire life cycle of our products, from raw materials
through to waste disposal.

We aim to maximize effective use of limited
resources and water.

Waste intensity fromproduction(vs. FY16)

CO2 emissions frommanufacturing(vs. FY16)
FY21

-7

%

FY30

-35

FY21

%

My CSR Declaration
Here are some of the personal declarations made by our Group
employees around the world regarding their own CSR activities in their2324

companies and beyond.

-8

Environmental pollution
and biodiversity
We aim to minimize the burden placed on natural
capital and to protect biodiversity.

Water use intensity fromproduction(vs. FY16)

%

-12

36%
Europe24.30
13%Americas

Serious Incidents

0

FY21

%

Tomoaki Hasegawa
I organize the relationship between development operations and construction of asustainable society and explain it in easily accessible terms to people within andoutside the company. Also, in line with the philosophy of the SDGs, we set andpursue products related goals from the perspectives of climate change, resources
recycling, and environmental pollution.

69.76

61.91
32%

192,000

t-CO2

Zhang Yuanyuan
We have an obligation to treasure the earth both for our own sake and for the sakeof future generations. Starting with simple things in my own daily life, such as notusing paper cups or disposable wooden chopsticks, or taking the bus or otherpublic transport instead of driving my own car, I hope to make a contribution toenvironmental protection.

Keina Sakai
As CSR promotion officer, I set up forums for discussions about corporate social
responsibility and strive to invigorate communication. I am also engaged in
reducing plastic and other types of waste.

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Resources Recycling

Environmental Pollution and Biodiversity

GlobalGlobalGlobalGlobalEffective Use of Resources

Approaches to Resources Recycling

Thorough Management of Chemicals

Protection of Biodiversity

With an emphasis on the effective use of resources, we are engaged
in initiatives to reduce waste, achieve zero landfill, and conserve
resources.
Waste intensity (waste volumes/sales revenue) in Japan in Fiscal
2018 fell by 24.7% due to the pursuit of exhaustive activities for the
reduction of process defects, achieving the target of a reduction of
21.3% compared to Fiscal 2005.
Overseas, we actively engaged in activities for the reduction ofprocess defects and in the horizontal extension of resources
conservation best practice, and the result was a 3.9% reduction.

We are engaged in the recycling of resources such as catalysts usedin automobile exhaust purification. We are striving to recycle materials(wash coats) that contain rare metals, which are a precious valuable
resource, by efficiently separating and recovering them with the useof dry separation equipment, which is less burdensome on theenvironment.
Also, leveraging our plastic-forming technologies, we are engaged in
the recycling and re-use of the plastic containers used for in-houselogistics. This has enabled us to re-use these plastic containers,
which previously would have been thrown away, helping to reduce
waste and save costs.

We have identified “environmental pollution and biodiversity,” with afocus on chemicals, as top priority issues for environmental
protection. This is to ensure that we do not have a serious impact on
the environment at all stages, from manufacturing through use todisposal.
Also, along with increased environmental awareness in the global
community, laws and regulations concerning the reduction andnon-use of harmful chemicals are also becoming stricter year by year.
With this recognition, to comply with the law and with customers’
requirements, we have adopted basic policies of not using harmful
substances as far as possible, of reducing their use and adopting
alternatives as much as possible, and managing them properly if they
are used. On that basis, we are thoroughly managing the risks foreach product, manufacturing, and purchased product (components
and sub-materials) at each of our global sites.

We consider the protection of biodiversity as a priority issue and areengaging in it with a focus on social contribution activities.
In 2018, as an 80th anniversary project, through multiple social
contribution activities, we launched a global Green Project for theplanting and conservation of more trees than there are global
employees (22,678 in Fiscal 2017).
We aim not only to protect biodiversity, but also to mitigate theimpacts, risks, and vulnerabilities of climate change and natural
disasters and to contribute to securing the lifestyles and safety of
local residents.

Waste intensity

Global[waste volumes/sales revenue]

Japan

Protection of Water Resources

-24.7

%

FY2018 target: -21.3%[Compared to Fiscal 2005]

Overseas- 3.9%

With an emphasis on the protection of water resources and tostrengthen our initiatives to reduce water use, we have built a global
water use monitoring system. This has enabled us to identify
production sites with particularly high usage and problematic
equipment. We have also undertaken a range of improvement
measures on a global basis, such as updating equipment andadopting efficient water use systems for flushing toilets.
As a result of these initiatives, our global water usage in Fiscal 2018
was 1,085,000 m3 (down 7.2% on FY2017), but water use intensity(water usage/sales revenue) increased by 3.1%. Going forward, we
will promote analysis and plan further improvements.

FY2018 target: -8.8%[Compared to Fiscal 2010]

Water Use Intensity[Usage volume/Sales revenue]

Landfill rate

[landfill volumes/waste volumes]

Japan

GlobalPrevention of Pollution
As well as responding to the laws and regulations of individual
countries, such as Europe’s ELV Directive*1 and REACH
regulation*2, in light of the requirements of our customers andsuppliers around the world, we have set voluntary targets and areworking to reduce the content of substances that place a burden on
the environment.
Specifically, areas we are working on include the enhancement ofmanagement and follow-up systems using in-house systems, thepursuit of development of alternative technologies, and theconstruction of frameworks for managing chemicals according to ourGreen Procurement Guidelines throughout the entire supply chain.
We are also striving to analyze impact in the stages prior to becoming
SVHCs*3 under the REACH regulation and to take prompt,
appropriate action.

Young Tree Giving Ceremony for Mangrove Forest Regeneration Project,
one of the Green Project activities

FY20180%

Target continuously achieved since FY2006

3.1

Overseas0% Up

FY2018 target: Global: -2.0%(compared to FY2017)%*1 ELV Directive : End-of-Life Directive

FY2018 target: Maintain zero landfill*2 REACH Regulation : Registration, Evaluation, Authorisation and Restriction of Chemicals regulation*3 SVHC(Substance of Very High Concern)

Soukaina Yassine

2526

In our workplace, we are practicing environmental initiatives that each individual
employee can perform. The reduction of plastic use and promotion of recycling area step toward a circular society.

Yuan CuiTo reduce waiting times when receiving truck shipments, we are working on
staggering delivery times. When we engage in our operations, we are constantly
thinking about how we can contribute to society through our work, such as helping
to curb CO2 emissions with such activities.

Andra Savu Straja
To renew our awareness that planting trees plays a beneficial role in environmental
conservation, we are planning a tree-planting activity in the green space aroundthe plant, as well as a clean-up activity, for Earth Day, a day in which people
around the world think about and take action for the Earth.

Watcharanon Suphatree
The Coral-Planting Project involves building plastic greenhouses to cultivate coraland returning the coral we grow there to the ocean. I am proud to be involved inthis project together with my work colleagues.

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Create Social Values
Through Innovations

Social
We aim to realize a sustainable society by engaging in solutions to social issues through ourbusiness. As well as responding to increasingly diverse and complex social issues from the
aspects of human rights, labor, safety, and quality, we also recognize the importance ofpromoting diversity within the Group and acting with diverse perspectives. We will alsodeliver products and services that will satisfy our customers and create new value for society.

10.6

%

Ratio of sales expansion by products which affect "Environmental Burden Mitigation","Safety and Security" and "Comfort and Convenience"

GlobalGlobalTechnological Innovation and Research andDevelopment Framework

Base Technologies that Will Give Rise to Innovative Products

Americas base

Improve ESG in Supply Chain

208

GlobalGlobalPDM Server

Supplier Surveys for Action on Conflict Minerals

companies

Number of companies surveyed regarding conflict minerals

GlobalPromotion of Socially Responsible Procurement
With the expansion of our business, our supply chain is also
expanding globally. We are sharing our ideas and policies regarding
CSR with our suppliers in Japan and overseas as we pursue our
procurement activities.
In Japan, with the roll-out of our CSR Guidelines for Suppliers, wehave asked our suppliers to be thorough in their communication ofcompliance, including the prevention of bribery. We are also making
efforts to ascertain the state of approaches to the priority CSR issues
we established by conducting CSR due diligence surveys. Overseas
as well, in addition to sharing our CSR policies with our suppliers, weare actively pursuing local procurement from the perspective ofsecuring employment.

In recent years, against a background of the increasingly borderlessnature of the economy, there have been growing calls for businesses
to establish frameworks for respecting human rights that encompass
their entire supply chain. To respond to these demands from thecommunity, we established a Policy for Approaches to Conflict
Minerals from the perspective of curbing human rights violations inconflict regions. In line with that policy, we have been conducting
supplier surveys and other initiatives since 2012. In Fiscal 2018, 208
companies were surveyed regarding conflict minerals.

Year of Survey

Number of surveyed suppliers

Response rate

FY201240 companies (preliminary survey)-

FY2013224 companies (full survey)-

FY2014288 companies-

FY2015285 companies-

FY2016284 companies

83%

FY2017211 companies

99%

FY2018208 companies

96%

Japan

Collaboration with Suppliers for CO2 Reductions

CSR Guidelines
for Suppliers

Our Group

Suppliers

Confirmation of
Agreement

Watinee Wongkaew

2728

As a production management officer, I hope to cooperate well with our team andour suppliers so that we can deliver products that meet the quality standards
required by our customers and make our customers happy, and to work for themutual improvement of manufacturing and transport systems.

To strengthen our suppliers’ manufacturing systems and relationshipsof trust, our purchasing divisions provide support to suppliers. In
these activities, with the agreement of the supplier, we are introducing
site improvement tools and pursuing activities to improve
manufacturing sites.
Business cases are presented to other suppliers at exhibitions andother events, which we believe will invigorate site improvements atother suppliers.
In particular, an example of an environmental conservation activity is
the “quantification and visualization of the CO² reduction effect of site
improvements” that we began in 2013. The ongoing implementationof improvement activities contributed to a reduction in CO² ofapproximately 37 tonnes in Fiscal 2018.
We plan to continue with these environmental protection activities
with our suppliers into the future.

Emily Weaver
The mission of the regional hospital is to advance cures, and means of prevention,for intractable diseases in children through research and treatment. We arecommitted to supporting that mission by raising funds through various events
including bake sales, a Summer Festival, etc.

Europe base
LCC
LCC

Asia base

We are actively engaged in product design, and are developing
pioneering technologies in areas such as analysis, measurement, andevaluation that will provide a foundation for creating innovative
products and supporting even higher product quality.
To enhance the quality of development and increase its efficiency, we
are undertaking technological development in Computer Simulation(CAE) and Model-Based Engineering (MBE), and using thesetechnologies in a range of situations. We are also developing andmaking use of CAE and MBE not only for enhancing productperformance, but also in manufacturing domains, such as resin flow
and plastic working.

*PDM=Product Data Management

GlobalIn response to the needs of our customers around the world, we haveplanted roots in our respective regions and are pursuing productdevelopment that reflects our customers’ opinions. We are also
working to strengthen our development overseas by leveraging themechanisms of the Global Product Data Management (PDM) System.
This system provides integrated management of engineering
information on a global basis to enable us to deliver future value toour customers.

GlobalEnsuring a High Degree of Product Development Quality
The Testing Research Center, which implements measurement andevaluation technologies, investigates the global market environment
in the areas of safety, environment, and comfort technologies fromour customers’ perspective, and replicates the market environment
through state-of-the-art equipment and testing technologies.
In the pursuit of product development that will satisfy our customers,
we are enhancing safety and durability with the steady
implementation of the Development Quality Assurance Process in thefour stages of Vehicles, Systems, Components, andElements/Materials.

Technological Development Based on Domains of Focus

Cabin Innovation

Energy Management

Safety / Comfort
technologies

Environmental
technology

Development of comfortablecabin environments
Development of environments
for appropriate recognition,
judgment, and operation

Fuel efficiency improvement /Energy efficiency
Contribution to popularization ofelectrification

Innovations in Thermal Energy
Management
Innovations in Electric Energy
Management

Under our Medium-term Business Plan, we have set two domains offocus, namely “Cabin Innovation” and “Energy Management.” Basedon these pillars, we will engage in development that focuses on
Human-Machine Interfaces (HMI) that have human-centric design,and on the minimization of energy loss. We will develop and deliverproducts and technologies that contribute to social issues, to create asustainable mobility society.
EMC Test, a type of verification test at the “Vehicle” stage of the Development Quality Assurance Process

Sarah Murphy
We are continuing with our school engagement activities and building relationships
with schools and universities. I will attend events to encourage young people into
engineering and take part in site visits.

Areerat Srinun
I want to propose and develop groundbreaking products that mitigate
environmental burden and contribute to creating a better environment and building
a sustainable society.

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Sustainability Report 2019

Sustainability Report 2019

Respecting Human Rights

96.2

Occupational Healthand Safety%

CSR e-learning participation rate (Japan)

0.94

LTIFR*

GlobalGlobalEncouraging More Respect for Human Rights
awareness to thoroughly instill our human rights policies in all
employees of the Group. In Fiscal 2018 also, we adopted a variety of
approaches, including those described below, to instill these policies
throughout the Group.

Diversity & Inclusion[per million man-hours]
3.0
2.5
2.0
1.49

1.5

Number of Female Managers (Japan)

GlobalOccupational Health and Safety Initiatives

In April 2016, we published the Basic Policy for Human Rights andthe Key Policy on Human Rights. To ensure that our operations canbe pursued with respect for ethnicity, culture, and other factors indiverse countries and regions, we conduct education and raise

23

Promoting Diversity

Year-on-year reduction
target achieved

1.42
0.94

1.0

In the belief that creating new innovations through healthy conflict
between employees with diverse values will lead to the growth of thecompany and the growth of the individual, we consider the promotionof diversity as an important management strategy for the entire
Group.
In Fiscal 2018, executives and senior managers with extensive
international experience were employed from within Japan andoverseas, regardless of nationality, and efforts are being made tofurther extend our diversity management.

0.5
0Information published incompany CSR newsletter

Company magazine

In-house e-learning on CSR(Includes the Human Rights section)

CSR

Notices on global intranet
on World Human Rights Day

No mark: Global (with some exceptions)

Information publishedin CSR Handbook: JapanNotices on company electronic
noticeboards on
World Human Rights Day

2016

2017

2018

Posters hung incompany premises

Human rights training as part of
new employee induction training
Approx. 250 trainees(40mins)

Every year, in Japan, we set certain challenges and strive to raise thelevel of their performance in occupational health and safety.
In Fiscal 2018, in response to the Top Safety Declaration at eachbusiness location, a review was performed of the previous year andeach business site engaged in improving its individual weaknesses.
Other action in Fiscal 2017 included the publication of an
Occupational Health and Safety Manual and the establishment ofaudit criteria. Further, with the objective of PDCA confirmation, it was
decided to conduct annual audits of each business site going forward.
LTIFR* for the entire Group fell from 1.42 in Fiscal 2017 to 0.94 in
Fiscal 2018.

: Headquarters only

CK

Employee Data
2016

2017

2018

Number of employees

3,741

4,056

4,694

Number of male employees

3,419

3,657

4,175

Number of female employees

322

399

519

Average age (years)

44.2

43.7

42.3

Contract employees

246

231

272

Non-Japanese employees

75

75

112

Percentage of employeeswith disabilities

2.07

1.99

2.16

* Lost Time Injury Frequency Rates: Incidence of workplace accidents per 1,000,000 hours worked =(number of workplace accidents) + (working hours) x (1,000,000 hours)

CK

GlobalA Company Where Women Can ShineJapan

GlobalHuman Rights Due Diligence in the Supply Chain

Response to UK Modern Slavery Act

We conduct due diligence surveys of our suppliers, consisting of 80questions on seven topics: 1.corporate governance regarding CSR;
2.human rights; 3.labor practices; 4.environment; 5.operating
practices; 6.consumer (or customer) issues; and 7.community
development.
In Fiscal 2017, we rolled out the survey to 225 of our major suppliers
that account for 99% of our domestic purchasing. We analyzed theopinions, questions, and survey responses received from them andfed the findings back to the individual suppliers in Fiscal 2018.
These findings will be reflected in our activities in Fiscal 2019.

Calsonic Kansei Europe plc. (CKEU) published an annual statement
in response to the UK Modern Slavery Act* for the first time in Fiscal
2016 and has produced and published such a statement every year
since then. In addition to activities to raise awareness within thecompany, CKEU also made efforts to raise awareness among its
suppliers by conducting due diligence and distributing the CSR
Guidelines for Suppliers.
For the prevention of forced labor, human trafficking, illegal childlabor, and other similar acts, these initiatives are being extended
globally beyond the United Kingdom. We are continuing in our
endeavors to fulfil our responsibility to respect human rights acrossthe entire supply chain.

Mental Health Initiatives
Every year since Fiscal 2008, we have provided our employees withstress checks, conducted by independent service providers. Almost
100% of employees undertake the tests. Employees with high stresslevels are able to obtain advice from specialist doctors. Managers arealso able to check the overall stress levels in individual workplaces
and link it to improvements in their own workplaces.
Return-to-work programs have been developed for employees who
become ill due to mental health issues. Systems have been put inplace that will allow employees to return to their workplaces byfollowing these programs.

Number of employees
returning to work aftermaternity leave

100 %*UK Modern Slavery Act 2015
2015 Legislation that requires enterprises to prepare and publish an annual statement on the actions they
have taken to guarantee that they have not been involved in slave labor or human trafficking. For-profit
organizations and companies that are engaged in business activity in the UK and that have annual salesof over GBP 36 million, are subject to this obligation.

Namchai Kaewsalee
I want to help economically disadvantaged children to pursue their dreams andbecome fine citizens by donating to scholarship funds and other activities.

2930

Melissa Dixon
I attended the annual skills convention, joining local universities, the Welsh
Government and others. Through this event, which attracts over 4,000 attendees,
we promote careers within the automotive industry.

We aim to create workplaces and working styles that make it possible
to maximize the capabilities of women at various life stages, such as
childbirth and childcare. Accordingly, we listen to our employees’
voices through employee opinion surveys and through the Working
Style Improvement Committee and Diversity Promotion Team. The
results of such activities are reflected in our various diversity
promotion measures.

Yuta Furuya
I make a point of communicating actively with our operators so we can create asafe, comfortable environment in which colleagues in the workplace can cooperatewith each other.

Eruboshi MarkWe obtained the highest levelof certification under the
Eruboshi Mark scheme in2016. This scheme
recognizes companies with anexcellent record in terms of
implementing initiatives topromote women’s
advancement in the workplace.

Company that Practices
Diverse Working Styles(Saitama Prefecture)
In 2012, we were chosen as acertified company under the
Saitama Prefectural
Government’s Scheme for
Certification of Companies That
Practice Diverse Working
Styles.

Nawarat Nakprasit
I would like to plan a fund-raising event in aid of disadvantaged children andpeople living in poverty. I hope to cooperate with other foundations to donate books
as educational aid and provide economic assistance.

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Sustainability Report 2019

85.7

Human Resource
Development%

Promoting Work-life Balance

Average percentage of annual leave taken

10.7

hour

Training time (per person)

Japan

GlobalEncouraging a Good Work-life Balance

Employee welfare programs

Flextime scheme

Adopted a system in Fiscal 2018 forselecting and receiving services thatmatch one’s lifestyle from approximately
20,000 programs (for employees andmembers of their families)

A flextime scheme has been introduced
that has no core time requirements, withthe exception that employees work atleast one hour between 8:30 a.m. and5:30 p.m.

Japan

We are working to enhance our personnel and welfare programs sothat all of our employees may work energetically with peace of mind
according to their own individual circumstances and values and theirvarious life stages. In recent years, to contribute to the creation of asociety that makes the most of women’s vitality, we are making efforts
to enhance programs that assist with childbirth, raising children, andcaring for elderly and infirm family members.
In Fiscal 2016, we expanded the scope of eligibility for receiving
dependent family benefits, extended the child care leave period (until
the end of the April following the child’s second birthday), andintroduced a program for regular consultations with employees onchild care leave. In addition, from Fiscal 2018, we also extended theperiod during which employees raising children are able to work
shorter hours to until the end of compulsory education (under the ageof three by law). As a result of our continued efforts to expand ourprograms to help employees to continue their careers and support
their smooth return to their workplaces, in Fiscal 2018, our rate of
return to work was 100%.
In our nursing care leave scheme, we have extended the period forwhich such leave can be taken, to support working employees.

CK

We believe that, above all else, it is our people who are most
instrumental in the company’s sustainable growth. We are rolling out
various human resources development programs, with a priority on“Monozukuri” and “global” perspectives.
In Fiscal 2018, a total of 8,911 employees undertook these programs,
spending a combined total of 95,267 hours (10.7 hours training time
per person).

Monozukuri Human Resources Development

Child BirthWork and Family Life Balance Assistance Scheme

To further improve the Monozukuri capabilities that have beenstrengthened through global competition and roll out thesecapabilities on a global level, we conduct training for the acquisition ofknowledge and skills in a planned manner. This training includes
training on site improvement tools, which forms our foundation for
Monozukuri, and various specialized technical training programs.
Pre-and post-birth maternity leave
Expectant mothers are entitled to 6
weeks’ maternity leave or, in the case ofmultiple pregnancy, 14 weeks, datingback from the due date, and to 8 weeks’leave counted from the day after the childis born.

Measures for health examinations,etc.
On request, pregnant women and new
mothers may be excused from work forthe time required to receive healthguidance or undergo health examinations
during pregnancy and up to one year
after the child’s birth.

Child Care

Child Care Leave

Regular Consultation Scheme

Employees may take child care leave up
to the first April after the child turns two
years of age (the legislative requirement
is for up to eighteen months of age).

Consultations are set up for employees
on child care leave to make it easy forthem to return to work.

Child Care

Nursing

10

Meisters

Number of employees
taking childcare leave

14

18

35

Global Human Resources Development

Number of employees
taking nursing care leave

1

1

1

For the purpose of developing the next generation of global businessleaders, each year, we conduct Global Business Leader Training(GBLT), a group training program conducted in English for leader
candidates from each country and region, including Japan.
Further, to develop global Monozukuri human resources, we conduct
Global Factory Manager Training for factory managers and factory
manager candidates from each country and region.

Percentage of annual
leave taken (%)

Shorter working hours to carefor children

77

83

85.7

Kazuyoshi Kimura

3132

I coach a local children’s soccer team. I started when my own child joined theteam, but I have kept it up even after my child left. I want to work hard at practice
every day, watching over the children’s growth as they bounce from joy to sorrow.

Cost per Hour (indicator)
100

1.74

91.3

1.74
1.74
1.74
1.74
90

0

2017

2016

2018

2019

2020

2021

Promotion of Work-style Reform

2018

2018

We are striving to improve productivity through a range of ongoingkaizen activities, such as reduction of setup times and equipment
cycle times, and improvement of the efficiency of assembly andtransport tasks. These efforts include the use of robotics andimprovements to employee working environments. In Fiscal 2017, weintroduced “Cost per Hour” as a global KPI to determine whether
these kaizen activities are having sufficient effect, and we aremonitoring the outcomes of activities based on a shared philosophy.
With this initiative, activities that are closely related to financial figures
are being promoted, and in Fiscal 2018, Cost per Hour decreased by
1.74%.
Going forward, we will continue to pursue activities with the sharedglobal target of a 1.74% decrease per year until 2021.

Global2017

2017

Productivity Improvements in Manufacturing Processes

The Skills Meister System has been introduced to clarify the skills thatare required in Monozukuri. The Meister Certification Committee
convenes every year to certify Skill Meisters. Currently, there are 10
Meisters working hard in the Group. Skilled workers who have therequired skills as a matter of course, but who are also recognized by
all around them as being exemplary role models, are selected as
Meisters.

2016

2016

Cost per hour
(year-on-year percentage reduction)

Introduction of the Skills Meister System (CK only)Child Care and Nursing Care Data

Situation Regarding Annual Leave Taken%

GlobalHuman Resources Development to Expand Individual
Capabilities

The lifestyles of employees are becoming increasingly diverse every
year as the structure of society changes, and we are developing andimplementing systems to support those different lifestyles. The
systems we have put in place under the Act on Advancement of
Measures to Support Raising Next-Generation Children exceed thestandard required by the legislation.

1.74

Productivity
Improvement

Employees may work shorter hours until
the child completes compulsory
education (the legislative requirement isfor up to three years of age).

Nursing Care Leave Scheme
Employees with less than one year’s
service may also take nursing care leave(under the legislation, employers may
exempt employees of less than one year
from such leave).

Cai Ping
Donating blood can save lives and improve people’s health. As a mother of two, I
want to keep doing things that will make my children feel proud of me.

Mooktapha Wasikarat
As a member of the Human Resources Department, I hope to work in the planningand development of training courses with the objective of enhancing employees’skills. I believe that such training will encourage productivity improvements andsteady, sustainable growth.

We are engaged in the reform of work styles with the objective ofcreating highly satisfactory workplace environments by raising
operational productivity, achieving higher added value, and realizing
diverse working styles.
Specific initiatives include setting specific times for when meetings
with overseas parties may be held, thorough implementation of therules for holding meetings, the use of ICT, thorough improvements inthe efficiency of operations, particularly back-office operations, andthe systematization of various procedures and processes.

CK

Work-style Reform Related Data
2016

2017

2018

Overtime worked (hours)

22.7

22.0

21.6

Total working hours (hours)

2215.82216.02211.0

Hugh JohnCKLL are supporting a team from Gowerton School for the Engineering Education
Scheme Wales (EESW). Students are doing a project at CKLL that will give themvaluable workplace experience and an idea of the appeal of CKLL.

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Sustainability Report 2019

Improve Customer
Satisfaction

3.44

points

Quality Improvement

Customer satisfaction level(maximum 5 points)

Global11

Promotion of Social Contribution Activities

awardsNumber of quality awards received
from customers

GlobalGlobalGlobalReflecting Customers' Opinions in Improvements

Acquisition of Quality Management Standard IATF 1694

Assessment of Novelty and ImportanceFour Domains of Social Contribution Activities

We hope to be an industry leader in Monozukuri in the mobility
society and to continue to provide a range of values. To push forward
vigorously in Monozukuri that is of high quality, competitive, and thatmeets the needs of our customers, we are dedicating efforts to ourcustomer service capabilities. To this end, we have been conducting
Customer Satisfaction Surveys since 2005. The Customer
Satisfaction Survey asks respondents to evaluate us on a five-point
scale in the individual categories of Quality, Cost, Delivery,
Development, Management, and Sales (QCDDMS). It also seeks
comments from respondents on specific requests for improvement.
In Fiscal 2018, based on the results of surveys in the previous year,
we implemented three measures, namely quicker response times,
compliance with various deadlines, and strengthening of cooperation
with customers, which enabled us to raise customer satisfaction by
0.01 points. With this survey as a point of connection, we will further
enhance our communication with our customers and aim to improvecustomer satisfaction.

We have now acquired certification for ISO/TS 16949, an international
standard of quality management systems for the automotive industry,
for all of our sites. We have been pursuing activities aimed at bringing
our quality management systems into compliance with the newstandard, IATF 16949, to which product safety and the developmentof products with embedded software have been newly added, and toobtain certification for all of our global sites.
In Fiscal 2018, transition from TS16949 certification to IATF 16949
was completed at all sites, with 63 sites, including three new ones,
acquiring certification.

We clarify the novelty and importance of new products from thedesign concept phase. In accordance with those assessments, expert
reviewers conduct design examinations and process design
examinations to raise the safety and reliability of our products.
There were 1,148 such examinations in Fiscal 2018, and there were
no problems with product safety.
In pursuit of “limitless Monozukuri reform,” the Production Engineering
Center conducts development of new production methods, prototype
verification, and global standardization. Valuing teamwork, it ispursuing the realization of drawings and production processes basedon Monozukuri principles and doctrines.

To contribute to the creation of a better society, we enrich activities
on a global basis, with a focus on four domains. In the expansion ofthese activities, we identify the expectations of stakeholders andrequirements of our stakeholders by communicating with them, withthe aim of contributing to regional development and solving social
issues.

3.44
3.35
3.28

3.30

3.36

3.43

3.31
3.26
674

715

711

705

724

718

Q-Forum
As part of our quality awareness-raising activities, once a year, wehold the Q-Forum. Through exhibits of the prevention of quality defectrecurrences, displays of actual defective products, presentation ofkaizen examples, and supplier quality seminars, the Q-Forum gives
each and every individual the opportunity to reflect on their own
awareness and actions regarding quality and make new discoveries.
In this way, they can raise their awareness of quality and the qualityof their own actions, leading to improvements in quality.

Global

2012

2013

2014

Number of responses received

2015

2016

2017

2018

Score

Points for Improvement by Function

Support for the Monozukuri Human Resources of the Future

As a result of our various initiatives in quality improvement, we havebeen honored with various awards from automotive companies.

Team SKETT is a team of volunteers whose members are drawn
from an open call to our employees for participants. It conducts awide range of activities to give children, who are the future of society,hands-on experience of Monozukuri.
Team SKETT has exhibited at Kids Engineer, a hands-on exhibition
for elementary school pupils organized by the Society of Automotive
Engineers of Japan, Inc., every year since the inaugural event in2008. In Fiscal 2018, at Kids Engineer 2018 in Yokohama and at Mini
Kids Engineer in Tohoku (Sendai), more than 3,000 people
participated in challenges such as assembling a cockpit module,
where they learned the enjoyment of Monozukuri. We also exhibitedagain at the Jidosha Kaikan Kids Engineer event, which theAutomobile Business Association of Japan began holding in 2018. At
our booth, we gave more than 300 attendees a hands-on building
experience. In our Traveling Classrooms for Elementary Schools
program, which began in 2012, we conveyed the fun of science tomore than 1,000 children at 21 schools in Fiscal 2018.

Fiscal 2018 Award Winners
Automotive
Manufacturer

Awards Received

Award Category

Nissan Motor Co., Ltd

Certificate of Appreciation for
Excellent Quality, Japan Region

Compressor Business Unit

ASEAN Regional Quality Award

Calsonic Kansei (Thailand)Co., Limited (CKT)
Body category

Europe Regional Quality Award

Calsonic Kansei Europe plc.
(CKEU)Engine & Drive category

Regional Supplier Quality Award
Finalist

Calsonic Kansei North America,
Inc. (CKNA)Electric category

Regional Supplier Quality Award
Finalist

CKTInterior & Exterior category

General Motors
Thailand

Supplier Quality Excellence
Award

CKT

Nissan (China)
Investment Co., Ltd.

Quality Improvement Award

Calsonic Kansei (Guangzhou)
Corporation

GAC Mitsubishi Motors
Co., Ltd. (GMMC)

Outstanding SupplierCalsonic Kansei Components(Wuxi) Corporation

Dongfeng Motor Co., Ltd.
(DFL)

Supplier Contribution Award

Calsonic Kansei (Guangzhou)
Corporation, Dalian Plant

New Vehicle Quality Improvement
Award

Calsonic Kansei (Xiang Yang)
Corporation

Quality Improvement Award

Calsonic Kansei (Guangzhou)
Corporation, Zhengzhou Plant

Number of Participants
Attending Kids Engineer (2018)

2.Issues related to response and speed (49 cases)
3.Issues related to management (32 cases)
1.Issues related to new development and advanced development (54 cases)

Development

Community

Quality Awards from Automotive Companies

We conduct QC circle activities all over the world to promote quality
improvement activities on the factory floor and human resources
development through such activities.
Once a year, the QC Circle Global Convention is held at theheadquarters. Through presentations of outcomes of quality
improvement activities, we are striving to encourage friendly
competition among regions and to make further improvements to our
Monozukuri quality.

1.Issues related to costs and cost details (177 cases)

Sales

EnvironmentJapan

QC Circle Global Convention

2011

SafetyGlobalQuality Education and Awareness Raising Initiatives

581
469

Supporting
the next generation

2.Issues related to proposal activities (46 cases)
3.Issues related to management (project management, etc.) (41 cases)
1.Issues related to management (133 cases)

QualityZhengzhou Nissan
Automobile Co., Ltd.

2.Issues related to response and speed (38 cases)
3.Issues related to analysis capabilities (37 cases)

More than

Wang Xu

3334

In January 2019, the management policy of “creating appealing workplaces” wasrolled out, and an activity was launched in which, every Tuesday, we all greet
everyone we meet when we come into work in the morning. At first, not everyone
was able to do this, but now, everyone is able to respond to these morning
greetings.

Toshihisa Okada
As a factory technician, I aim to create a workplace in which everyone on thefactory floor can work in safety and comfort. I will be diligent in the quest for highquality and contribute to eliminating defects in delivered products. Going forward, I
will work hard every day in my endeavors to work steadily and enjoyably.

Ricardo Ponce de León
A person’s fate is decided by that person’s own abilities and by their willingness tomake moral decisions. As everyone knows, the actions of each and every
individual around the world has an impact on their local community. As a corporate
citizen with a conscience, we vow to bring about positive change in our community.

3,000

peopleJennifer Norman
CKNA successfully completed ISO 14001 re-certification for the Shelbyville, TN
plants and the Lewisburg, TN plants. The Madison, MS plant received its firstcertification in ISO 14001. We will continue to be united in our efforts to protect ourenvironment.

3534

Sustainability Report 2019

Sustainability Report 2019

Strengthening Compliance

ESG Risk Management

GlobalGlobalCorporate Governance Structure for
Speedier Decision-making

Activities of Internal Control Risk Management Committee

GlobalRegular Monitoring

Initiatives for Strengthening Information Security

We monitor major compliance activities in its various regions andsites according to seven elements (compliance program). This
monitoring is reported to the Global Compliance Committee andconnected to process improvements.

The Global Security Committee meets twice a year to share
information about the roll out of new measures concerning theimprovement of information security and the status of audits.

Compliance program

Major initiatives in Fiscal 2018

1. Standards and procedures 2. Organizational structures• Security measures: Internal audit conducted of cyber attacks

3. Education and training (including corruption and bribery prevention)• Employee awareness activities: Education of employees using globally

4. Regular evaluation (including survey of degree of penetration of compliance)

We are working to enhance our corporate governance to create aprosperous society through our business activities and to build
excellent relationships with all of our stakeholders. With the objectiveof realizing speedier decision-making, we have established a
corporate governance structure consisting of a Board of Directors,
with three directors who concurrently serve as executive officers, andtwo auditors. Also, in terms of our relationship with its controllingshareholder, as a wholly-owned subsidiary of CK Holdings (CKH), an
entity wholly owned by Kohlberg Kravis Roberts (KKR), we areworking to increase the diversity of its Board of Directors
membership, under the supervision of the CKH Board of Directors.
The auditor monitors the performance of Directors in carrying out theirduties, and also works with the auditors of CKH to audit the executionof business related to all aspects of the Group’s management. In
addition, outside auditors conduct accounting audits, in which they
verify the appropriateness and legal compliance of accounts and ofinternal controls related to the accounts from an independent
standpoint.
The current structure has been chosen because we believe thesemeasures will ensure the effectiveness of our corporate governance.

We have established various committees from social andenvironmental perspectives, with directors taking responsibility forthem. These committees consider policies and actions concerning
risk management and report to their responsible directors. They also
report regularly to the Board of Directors through the Internal Control
Risk Management Committee.
Through close cooperation with these committees, we strengthen
and further enhance CSR activities.
In Fiscal 2018, there were no legal violations regarding labor, bribery,
information security, product safety, or exports. Consequently, we
have not been subject to any fines or other punitive measures.
We will continue in our endeavors in appropriate organizational
governance and information disclosure under our CSR policies.

Board ofDirectors
Reports

Committees

Internal Control
Risk Management Committee

Corporate Governance Structure

Positions anddepartments of directors
with responsibility

Executive Vice President,
Global Corporate Development Division

Shareholders’ Meeting
Appointment/OversightAppointment/Oversight
ReportAudit Report

Board of Directors
Appointment/Oversight Report

Appointment/Oversight

ReportStatutory Auditor (int.)

Accounting Auditor (ext.)

Audit

Accounting Audit

Global Compliance Committee

Executive Vice President,
Global Corporate Development Division

Information Security Committee

Senior Vice President,
Global IT & Process Innovation Division

CK-DOA Committee

Twice annually(joint reports)

Executive Vice President,
Global Corporate Planning Division

Report & Instruction

Chief Executive Officer

EC

Direction/
ReportOther Committee- Global Environmental Management Meeting- J-SOX Steering Committee- Global Health & Safety- CK-DOA Committee- Export Controls (Global)(Executive Committee)

Direction/Report

ReportDirection/Report

Internal Control Risk Management Committee- Global Compliance Committee- Global Information Security Committ

Health and Safety Committee

Executive Vice President,
Global Corporate Development Division

Environmental Council

Executive Vice President,
Global Manufacturing Division

Export Control Committee

Deputy Global Function Leader,
Global Corporate Development Division

J-SOX Steering Committee

Senior Vice President,
Global Finance DivisionInternal Audit
Office

Audit

Audit

Each division & AFL*As of March 31, 2019

Adrian Key and Greg Harris

3536

CKNA supports Angel Tree, a program that provides personal items and toys tochildren at Christmas. This year our Lewisburg team was inspired by three
special requests for beds. They fabricated custom bed frames specificallythemed for each child.

Kazumi Osawa
I want to contribute to the community through the activities of the neighborhood
association. I also make a point of acting in ways that are considerate of theenvironment in my daily life, such as planting green curtains, conserving energy,
and recycling resources.

security among all global employees

7. Responses and recurrence prevention(compliance risk management including prevention of corruption and bribery)• Communication of awareness-raising messages from the President andresponsible directors• Display of security awareness messages on the Intranet and in posters• Strengthening of security measures for factory equipment

GlobalWhistleblowing Systems Operation
GlobalTrends in Whistleblowing Cases

Initiatives for Information Security Education
and Awareness-Raising

2016

Committees responsible for internal control

standardized educational content• Security Week to raise consciousness and increase knowledge about

5. Commendations and disciplinary action6. Reports and surveys

312

awards2017347

awards2018

280

awardsWe have introduced whistleblowing systems at all of our Group
companies, to ensure that every employee has an understanding ofcompliance and puts it thoroughly into practice and to confirm that
corporate activities are being conducted properly.
In Japan, we have incorporated the perspectives of whistleblower
protection in line with the Whistleblower Protection Act that came into
force in April 2006, and operate a Helpline as an external contact
point for whistleblowing in Japan. Highly experienced call-takers froman independent organization receive the information while respecting
the whistleblower’s privacy. The responsible division is contacted and,in turn, contacts the relevant departments and organizations andtakes appropriate action.
Globally as well, in the various regions and bases, we haveestablished and are operating whistleblowing systems in the mostappropriate form for each company, taking into consideration theculture and laws of their respective countries and regions. In theAmericas and Europe, we have established independent hotlines that
accept calls 24 hours a day, seven days a week. We are also looking
into establishing independent contact points in Asia going forward.
Since Fiscal 2016, we have also been establishing whistleblowing
contact points for suppliers in each of our regions globally.
There was a total of 280 whistleblowing cases in Fiscal 2018 in Japanand overseas. Proper action has been taken in all cases, including
improvements of systems after consultation with the relevant
departments.

Victoria Manghan
We will make a positive impact on the communities around us through school
engagement projects, focusing on apprenticeships and improving skills in the area,
being committed to improving the health and wellbeing of our employees andbecoming involved in local initiatives wherever we can.

A high awareness of control in each individual employee is essential
to compliance with information security. We are strengthening thatawareness through education. In addition to implementing various
security measures, such as control of rights to access electronic data
and the restriction of use of external storage media, we are also
pursuing activities to raise awareness among employees.
Education and Awareness Activities

Initiatives

Details

Security measures• Clarification of access rights through confidentiality classifications• Restrictions on writing data onto external storage media• Anti-virus measures and hard-disk encryption

Employee awareness-raising
activities• Communication of awareness-raising messages by the responsible
executives• Implementation of new employee education and regular employee
education programs• Assessment

Employee Education Track Record

100%
maintained

FY2018

Corporate Governance

Global

FY2017For our Group to continue to be an organization that is trusted by society, we haveestablished corporate governance and risk management frameworks with a strong awarenessof ESG and are pursuing business that is legally compliant, ethical, and sustainable.Under the
Global Code of Conduct of our Group, we have conducted exhaustive education andawareness-raising of employees, with the goal of strengthening our global compliance regime.

Strengthening Information Security

FY2016

Governance

Mitsuhiro Koyashiki
I want to fulfill my corporate social responsibility through communication withmembers of the local community by actively participating in events for children andvolunteer activities.

3736

Sustainability Report 2018

Sustainability Report
Report 20172019
Sustainability
2018

Company Overview
Company

Editorial Policy
About this Report

Calsonic Kansei Corporation

2-1917 Nisshin-cho, Kita-ku, Saitama City,
Saitama, Japan

Address

Main Products

Cockpit modules, Front-end modules, Exhaust systems,Air conditioning units, Compressors, Meters, Radiators

Number ofGroup Companies

Consolidated: 34*

Total Number of
Employees

We report on our ideas and various initiatives as a communication
method for stakeholders and as part of our efforts to disclose
information about corporate social responsibility (CSR). The report ispublished in Japanese and English.
We have also produced a summary version of the report in the formof this booklet to familiarize even first-time readers with the Group’s
CSR endeavors. More detailed information is found on the website.
To coincide with the change in management structure to a business
unit framework in January 2019, the 2019 edition contains messages
from the CEOs of the business units. We have also changed theformat of the report in line with the materiality based on ESG(environment, social, governance). As well as deepening readers’
understanding of our materiality, we aim to further pursue CSR
initiatives.
In May 2019, Calsonic Kansei and Magneti Marelli announced thatthey will pursue a merger under the shared brand, MARELLI.
However, this report concerns only the activities of the CalsonicKansei Group in Fiscal 2018.

Applicable Scope
Calsonic Kansei Corporation and Group companies

Website CSR Page

We look forward to receiving your opinions and comments about this report2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japan
Calsonic Kansei Corporation
Global Communication Department

Applicable Term
Mainly Fiscal 2018 (April 1, 2018–March 31, 2019)
Publication Date
June 2019 (previous report: June 2018; next report: August 2020 (scheduled) )Reference Guidelines
GRI Sustainability Reporting Standards
Environmental Reporting Guidelines of the Ministry of the Environment of Japan, 2018
EditionSupport for various principles, etc. concerning the environment, society,and management
We are in agreement with the initiatives laid out in policies such as the UN International
Bill of Human Rights, the UN Guiding Principles on Business and Human Rights, theUN Global Compact, the ILO Declaration on Fundamental Principles and Rights at
Work, ISO 26000 (Guidance on social responsibility) and the Keidanren (Japan
Business Federation) Charter of Corporate Behavior, and implements initiatives to help
achieve these important management indicators.
Third-party Assurance and Opinions
Third-party assurances will be conducted in 2019.

Consolidated: 22,382*
https://www.calsonickansei.co.jp/en/csr/

Audi AG, Daihatsu Motor Co., Ltd., Daimler AG, Geely Automobile, General Motors Corporation, Hino Motors, Ltd., Honda Motor Co., Ltd.,
Isuzu Motors Limited, Jaguar Land Rover Limited, Mazda Motor Corporation, Mitsubishi Motors Corporation, Nissan Motor Co., Ltd.,
Peugeot S.A., Renault S.A.S., Subaru Corporation, Suzuki Motor Corporation, UD Trucks Corporation, Volkswagen AG

Major Clients(alphabetical order)*As of March 31, 2019

CSR Opinion/Suggestion Form
https://www.calsonickansei.co.jp/en/csr/opinion/

Please Note:
This report contains forward-looking statements. Please be aware that actual results
may differ due to various industry-related factors.

Financial Highlights
Consolidated Sales

Share of Consolidated Sales by Region(Fiscal year)

892,100

2018

998,6172017

1,012,596

2016
0

36.6%
27.5%

Asia

24.3%

Europe11.6%

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 (million yen)

Consolidated R&D Expenditures

Number of Employees by Region (Consolidated)(Fiscal year)(Fiscal year)

31,5402018

2018

32,8912017

2017

30,392

2016
0

Japan
Americas

5,000

10,00015,00020,00025,00030,0002016
35,000(million yen)

0

6.958

6,238

2,367

6,819

7,053

6,183

2,372

7,070

6,756

6,277

2,476

6,915

22,3822,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Japan

3738

(Fiscal 2018)

Americas

Europe22,67822,424(people)

Asia

3938

A PART OF
A PART OF

Calsonic
ReportCalsonic Kansei
Kansei Sustainability
Sustainability Report
Summary
Summary

GG

EE

EERRNNAANNCCOOVVSUSTAINABILITY ENGINE

E

E

TT

IR O N MEN
N VI R O N M E N
NV

C IET
SO C I E TY
Y
SOMagneti Marelli Sustainability Magazine

Calsonic Kansei Corporation

Calsonic
Kansei Corporation
R&D Center, Headquarters
R&D Center,
Headquarters
2-1917
Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japan
Global Communication Department
2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japanwww.calsonickansei.co.jp/en/
Global Communication Department40
www.calsonickansei.co.jp/en/

2019
2019

41

INDEXSTART06 | READERS’ GUIDEThis is the sixth edition of Start,
the sustainability magazine
regarding Magneti Marelli’s scopeof activities, which brings together
figures, strategies and stories
that characterised Company
performance over the previous year.
By reporting on performancein 2018, it is an overview of thecompany’s final year as part of the
FCA Group, following FCA’s saleof Magneti Marelli’s automotive
component business to leading
Japanese automotive supplier,
CK Holdings Co. Ltd., a holding
company of Calsonic Kansei
Corporation. 10 May 2019 also saw
the announcement of the adoptionof MARELLI as the new global
brand uniting Magneti Marelli andCalsonic Kansei.
Reflecting the 4 pillars on which
our sustainability strategy has been
based, the magazine is made up of
4 sections: Products, Processes,
Stakeholders and Impacts. Eachchapter begins with a summary of
the key figures used to measure

WEB
SITE

42

41

our performance and presents
an example of the way in which
we faced up to the challenges ofsustainability with a focus on arepresentative case.
The performance reports inthis document are based on the
Global Reporting Initiative (GRI)
Guidelines and, as said, makereference to overall figures as of
31 December 2018 . Therefore, thescope of activities includes all thebusiness lines belonging to Magneti
Marelli at the time, including
Plastic Components and Modules
Automotive S.p.A. (PCMA), which
was later excluded from the sale ofMagneti Marelli to CK Holdings in
2019.
In the future perspective of a new
and wider sustainability perimeteras "MARELLI" with new approaches
and shared methods, START 06
has the only objective to provide
a consistent and methodologicallycorrect picture of the former
Magneti Marelli sustainability
perimeter as of year 2018.

S TA R T 0 6

WHO WE ARE

2018
AT A GLANCE

PAG. 43

PAG. 49

PRODUCTSPROCESSES

PAG. 51

PAG. 53

STAKEHOLDERS

IMPACTS

PAG. 57

PAG. 59

magnetimarelli.com/company/sustainability
43

42

WHO WE ARE

MAGNETI MARELLI SINCE 1919

SPRAZZI E BAGLIORIIn the year of our Centenary, we are dedicating the company profile to an original look back over a long and glorious historyof technology.
Here we are!
I’m the “man with the megaphone”,
created by Noël Quintavalle, the directorof the company magazine "Sprazzi e Bagliori",
to introduce the “Domando la parola”(Let me speak) column and answer readers’questions. I have now been chosen to tell
100 years of history through 12 “sparks”,
themed fragments that retrace someof the most important momentsof a bright industrial, business andtechnological history

Corporate culture, information and asense of humour: «Sprazzi e Bagliori»,
our company magazine, shows thespirit and life at Magneti Marelli in its
early years in the best possible way.

THE PEOPLE
Magneti Marelli’s people have guided and directed the company’slife. They have made the “factory” great with the same dogged
determination that came from Ercole Marelli.

RACING
Ercole Marelli

ELECTRONICS

They have always been in Magneti Marelli’s DNA. From thetrack to the road, motorsport is the strictest testing groundand a field for research and innovation.

Magneti Marelli’s “destiny”.
The brains that rule andwill increasingly rule allprocesses linked to smart
mobility in the automotive
industry... And just thinkthat it all started out with the
Dinoplex control unit...

First Magneti Marelli logo

THE DASHBOARD
The part of our cars that we look at most every time we drive:the instrument cluster speaks to us and lets us speak to
our cars. For Magneti Marelli, it represents technology anddesign, function and emotion.

OFF THE BEATEN TRACKPLACES AND BRANDS
THE MAGNETO
It all started here. Engines needed a spark generator:
the “magnete”, or rather, the magneto. And Ercole Marelli
started to produce it. It would become a symbol, an icon.

What you didn’t expect from Magneti Marelli: fromvideo surveillance systems and teaching in schools,
to submarines and Geneva’s CERN, as well as
artificial satellites and a presence on the Milan Metro.

The world is our home. From the very beginning, Magneti
Marelli opened its doors to the world with commercial andmanufacturing activities, going as far as to incorporate
great historical brands that make our industrial heritage
unique.

“SCINTILLA”
RADIOMARELLILIGHTING

44

43

The introduction of electric light tocars facilitated nighttime travel andexchanges. Light tore through the night,
extending the space given to social lifeand changing society.

Not just engines, but
telecommunications too:connecting and transmitting
information to help society progress.
Magneti Marelli enabled television
broadcasts and produced the mostpopular radios and televisions in Italyin the 1960s.

FUTUREWe were born a century ago to improve thefuture and to create the future.
Our history is a story of the future.

To tell Magneti Marelli’s story, we have used sparks to convey
the highlights of 100 years of history. But there’s more, a historic
image that represents us: a passionate Magneti Marelli technician
cheering. In the Formula 1 paddock, everyone knew him.
His nickname was “Spark”, that is to say: “Scintilla”!

MAGNETIMARELLI100.COM

45

44

MAGNETI MARELLI AROUND THE
WORLD IN 2018

ITALY
UK
FRANCEEMEA

SPAIN
GERMANYPOLANDROMANIACZECH REP.
SLOVAKIANAFTASERBIAUSA

TURKEYMESSICORUSSIA

APAC

CHINA

LATAM

MALAYSIA

ARGENTINA

INDIA

BRAZILPRODUCTION PLANTS

BUSINESSLINES45

APPLICATION CENTRESR&D CENTRESAUTOMOTIVE LIGHTINGSUSPENSION SYSTEMSAND SHOCK ABSORBERS

EXHAUST SYSTEMSPLASTIC COMPONENTS
AND MODULES

POWERTRAIN

ELECTRONIC SYSTEMSAFTER MARKET PARTS & SERVICES

MOTORSPORT

45
45

46

JAPAN

47

46

WHO WE ARE

The Sustainable Development Goals and our sustainability strategy

THE STRATEGY

I

n order to apply oursustainability strategy

allow continuous exchangeboth within the company and(2030 Agenda for Sustainable
Development) identified by theto our business, wehave identified two
main instruments thatwith the outside world: themateriality matrix and the 17
Sustainable Development Goals

United Nations in 2015.

The Sustainable Development
Goals (or SDGs) set out by theUnited Nations in 2015 represent

provides for the direct involvementof our main stakeholders(customers, employees, suppliers,

sustainability strategy, which isbased on four pillars:• Productsa benchmark and a source ofinspiration for Magneti Marelli.
In line with its role as a global

institutions, etc.) and the raisingof awareness with these groups
regarding the commitment to• Processes• Stakeholders• Impacts

leader in the automotive field,
Magneti Marelli has identified fivegoals that have impact on businessas usual, and one goal, Goal 17(Partnership for the goals), thatsustainable development.
In order to make the goals
tangible, in 2018 Magneti Marelli
combined the SDGs with themateriality matrix and with its own

This has allowed the Company
to identify not only the level ofcoverage of the sustainability
themes, but also cues for theexamination of future objectives.

MATERIALITY MATRIXThe materiality matrix indicates the themes that are the most important for our business.
The matrix has been constructed through a careful analysis of the our stakeholders' needs.
The approach adopted for matrix definition is available in the previous edition of START.

Eco-efficiency ofoperations
Eco-efficiency of
products

DEVELOPMENT, VALORISATIONAND ORGANISATIONOF HUMAN RESOURCES

IMPORTANCE FOR EXTERNAL STAKEHOLDERSEMPLOYMENT AND
JOB SECURITY

ECO-EFFICIENCY
OF OPERATIONSINNOVATION OF PRODUCTS

Reduction of theenvironmental impact of
products
Development, valorisationand organisation of humanresources
Innovation of products

PROMOTION OF A RESPONSIBLE
USE OF PRODUCTS

WORKER’S HEALTHAND SAFETY

ECO-EFFICIENCY OF PRODUCTSINTEGRATION OF SUSTAINABILITY
THROUGHOUT THE SUPPLY CHAIN

REDUCTION OF THE ENVIRONMENTAL
IMPACT OF PRODUCTSRESPONSIBLE MANAGEMENTOF BUSINESSQUALITY IN CUSTOMER RELATIONSWorker’s health andsafetyResponsible managementof business
Integration ofsustainability throughout
the supply chain
Employment and job
security

WELFARE AND EQUALOPPORTUNITIESCREATION OF VALUEFOR THE COMMUNITY

Quality in customer
relations
Promotion of a
responsible use of
products

IMPORTANCE FOR INTERNAL STAKEHOLDERS

Welfare and equal
opportunities
Creation of value for thecommunity

Products

48

47

Processes

Stakeholders

Impacts

49

48

2018
AT A GLANCETHE STORY OF A CONTINUOUS
COMMITMENTJANUARY

MARCH

MAY

50

49

Participation in theConsumer Electronics
Show (CES) in Las Vegas
exhibiting high-techelectronics, lighting andpowertrain solutions, witha focus on autonomous
driving, connectivity andhybrid/electric mobility.

The Brazilian plant in
Mauà sees the launchingof “Women’s week”,
focusing on equal
opportunities and the roleof women in the Automotive
market.

The Corbetta plant takes
part for the first time in“Italia Loves Sicurezza”,
hosting for a day a highschool in order to raiseawareness among thepupils on themes regarding
safety in the workplace andin daily life.

FEBRUARY

APRIL

JUNE

Victory at the “Indian
Automotive Technology
and Innovation Award”(IATIA), recognised forexcellence in the category“Transmission Technologyof the year”.

The Wuhu Automotive
Lighting plant is the first in
China to achieve the SilverAward in World Class
Manufacturing.

Launch of the internal
contest “Beat plastic
pollution” at world
wide level, involving all
employees and inviting
them to share ideas on
the reduction of plastic
consumption in everyday
life.

JULY

SEPTEMBERNOVEMBER

Signing of an agreement
for the acquisition of
Smart Me Up, a pioneering
start-up operating in thefield of autonomous driving.

On the occasion of World
Charity Day, a bookcollection is launchedin China for children to
support schools in isolatedrural regions, offering
quality didactic materials.

To promote the diversity offlora and fauna, in TrusetalLaudenbach, the German
Automotive Lighting plantin Brotterode plants 18
fruit trees and inaugurates
the largest “insect hotel”
in Thuringia. A “wildpharmacy” is also created,with clovers and wild
flowers.

AUGUSTOCTOBERDECEMBER

India sees the launchof the “Scholarship
distribution program”,
which ensures educationfor over 1100 students
in economicallydisadvantaged conditions.

The French Automotive
Lighting plant in St. Julien
takes part in the “Le
Foulées Roses de l’Yonne”
march for breast cancer
prevention.

The Health and Safety
Leadership Award(EHSLA) 2018 presents
two Magneti Marelli plants
with three awards: theManesar plant in India
for the “Health & Safety”
category, and the Bielsko
Biala plant in Poland in the
categories “Environment”
and “Energy”.

51

50

PRODUCTSKEY FIGURES 1

11

10%

1g CO2/Km

Projects released withLife Cycle Assessment
methodology
since 2012

Of Magneti Marelli
components turnover
involved in
LCA projects

Saved thanks
to Low beam LED module"E-Light" compared to
traditional lighting

FOCUS | THE 3D INSTRUMENT CLUSTERBECOMES AUTO-STEREOSCOPIC

In the automotive field, we are
now seeing the proliferationof on-board displays. Fromthe instrument cluster tothe central console, fromscreens on the dashboard and on
the seats for passenger use tohead-up displays, screens havenow become a necessary andever-more common element in
car interiors. This phenomenon
is facilitated by the fact that
future mobility, the progressive
introduction of autonomous driving
and the consequential evolutionof human-machine interaction(HMI) is freeing up ever-increasing
amounts of space and time
available to occupants. This is
why screens, tactile surfaces,
infotainment systems and videoconference systems are opening
new horizons and new possibilities
with regards to time spent onboard.
While in the past the instrument
cluster was used above all as

52

51

an interface via which driverand car could dialogue witheach other in a closed system,
nowadays passengers in a vehicle
can make use of numerous
forms of information regarding

presence of 3D screens in theautomotive field is due above all tothe complexity of 3D technology,
to their larger size compared

for a better perception of complex
shapes, obstacles and depth, thus

to traditional 3D technology.
The technology used up to now
requires two displays to provide
the sense of depth to the image,also contributing to increasinglevels of safety while the vehicle isin motion, a fundamental theme
for mobility. Warning messages,

and are therefore bulkier, heavier,more expensive and of low energy
efficiency. Thanks to a specificsoftware and theindicator lights and driving
information can therefore beshown more efficiently and clearly,
guaranteeing

use of various
lenticular opticallayers, the new
Marelli displays
offer better

By using a single display,this technology allows
for advantages in termsof space and a lower
and more intelligent use
of materials.

information at variable depths, inincreased levelsof safety for theoccupants of thevehicle, as wellas persons andaugmented reality applications andin depth perception in 3D rearview displays. Furthermore, theflexibility of these devices allows
3D viewing to be deactivated,

objects in thevicinity.
The advantages

leaving all of the functionality of a
traditional 2D screen.
On the other hand, by using a

not only the vehicle, but also
mobility, infrastructures, thesurrounding environment and evenperformance interms of image
quality andentertainment.
Although devices

depth and are more sustainable
in terms of use of materials andof this solution are therefore
important for two main reasons.

single display, this technology
allows for advantages in terms

In order toovercome these
problems,

energy for operation. Furthermore,bulky 3D glasses that are difficult
to use while driving are no longer

On the one hand, thanks to amore faithful visual perceptionof the surrounding area as wellof space and a lower and more
intelligent use of materials. This
results in improvements in terms

Marelli isapplying

necessary.
Marelli’s autostereoscopic display
technology is based on special,

as increased depth and realismof images, Marelli technology
allows for more aesthetically-of weight and consumption for thevehicle’s electrical systems.
Marelli’s proposal is therefore

ultra-thin lenses that are layered
onto the surface of a single

pleasing results that until now
were impossible to achieve in 3D

also more environmentally andeconomically sustainable thandisplay. This technology allows forthe reproduction of images withmore realistic effects, allowing

instrument clusters, in central
consoles with 3D infotainment
content, for head-up displays withtraditional 3D systems, offering
clear benefits not only for the end
user but also for the environment.

for the viewingof information
are becoming
increasingly
widespread andsophisticated,
the portrayalof the third
dimension is
not so common.
The scarce

to conventional screens, to theincreased manufacturing costs
and to the need to use special
stereoscopic
Marelli is applying
glasses.

autostereoscopic technology, offer
clear advantages in comparison

Marelli’s 3D displays canbe useful for perception ofsurrounding environment during
a parking sequence, or to provide
immersive navigation.
At the same time, they canreplicate complex object
surfaces, or can be used todisplay alerts to the driver.

innovative 3D
instrument clusters to
the automotive sector
that, with the use of
new auto-stereoscopic
technology, offer
clear advantages
over traditional 3D
technologies.

innovative 3Dclusters to theautomotive
sector that,through theuse of new

53

52

INDIRECT ENERGY CONSUMPTION PER SOURCE (GJ)

PROCESSES

3,014,040

KEY FIGURES 2
2018

2016

2016

2017

INJURY FREQUENCY INDEX(number of injuries / hours worked) x 100,000

2018

2017

2016

0.19

0.19

0.20

THERMAL
ENERGY

3,126,259

OTHER
ENERGY

20,98389,584TOTAL INDIRECTCONSUMPTIONOF ENERGY (GJ)

2018

2017

2017

3,106,400

12,147

2016

2018

ELECTRIC
ENERGYINJURIES

12,14778,06778,067

DIRECT AND INDIRECTCONSUMPTIONOF ENERGY PER HOUR
OF PRODUCTIONTOTAL CONSUMPTIONOF ENERGY (GJ)

*GJ/Good hours produced

2018

2018

2018

3,216,473

4,198,187

0.12

2017

2017

2017

3,216,968

4,167,040

0.12

2016

2016

2016

3,145,458

4,029,490

0.12

ECO-EFFICIENCY OF OPERATIONSDIRECT AND INDIRECTEMISSIONS OF CO2 PER
HOUR OF PRODUCTION

DIRECT AND INDIRECT EMISSIONS (tCO2)

2018*tCO2/Good hours produced

DIRECT
EMISSIONS

55,4502018

0.01

INDIRECTEMISSIONS

292,557

2017

2017

2016

DIRECT CO2 EMISSIONS

53,59849,880

INDIRECT CO2 EMISSIONS

295,943

298,309

TOT. CO2 EMISSIONS

349,541

348,190

0.01

MANAGEMENT OF WASTE

2016

WASTE GENERATED (t)0.01

WASTE GENERATED WASTE DISPOSED (t)PER HOUR OF
PRODUCTION

2018
2017

2016

2018

1.89
7,005

ENERGY EFFICIENCY

981,713
2018
NATURAL GAS

54

53933,153

2017

2016

NATURAL GAS

914,802850,692

OTHER FUELS

35,27033,340TOTAL NON-RENEWABLE
FUELS

950,072

884,032

65,59664,95561,329TOTAL NON-RENEWABLE
SOURCES

48,560

7,587

2017

2.04

DIRECT ENERGY CONSUMPTIONPER SOURCE (GJ)

OTHER
FUELS

7,196

2018

*Kg/Good hours produced

2016

2017

WASTE RECOVERED (t)
2016

2,445

2,598

3,296

2,535

2,339

2,497

4,980

4,937

5,793

2.21

68,335 72,151 73,183

TREATMENTLANDFILL
TOT. WASTE DISPOSED OF

2018
2017

2016

2,864

2,620

2,867

63,355 67,215

64,523

348,00764,595

TOT.

60,491CO267,390HAZARDOUS WASTE GENERATEDINCINERATIONNON-HAZARDOUS WASTE GENERATEDWASTE RECOVEREDTOTAL WASTE GENERATED

TOT.WASTE RECOVERED* Good hours produced = Number of good pieces x Cycle time

55

54

PROCESSESPROJECT 2 | “ZERO WASTE SENT TOLANDFILL” PROJECT IN CONTAGEM

FOCUS | MAGNETI MARELLI: WORKINGTO REDUCE ENVIRONMENTAL IMPACT
PROJECT 1 | “REDUCTION OF HAZARDOUS
WASTES” IN BIELSKO BIALA
PLANT INFORMATIONCOUNTRY: POLAND
BUSINESS LINE: SHOCK ABSORBERS
PLANT: BIELSKO BIALA

has already reached its goal ofZERO production waste sent tolandfill, has also considerably
reduced the production waste
generated in the 2016-2018
period.

The project: Reductionof the generation of
hazardous wastes
The welding department during 2018 introduced for the
first time the application of
56 an electrostatic filter for the55

ENVIRONMENTAL KPIs 2018 vs 2016
WASTE GENERATED: -12%
HAZARDOUS WASTE GENERATED: -9%
WASTE SENT TO LANDFILL: -23%
WASTE RECOVERY: + 11%

The Brazilian plant in Contagem(Automotive Lighting) improved
its environmental performances
over the 2016-2018 period, with aparticular focus on wastes.

The project: ZERO
waste sent to landfill

ENVIRONMENTAL KPIs 2018 vs 2016
WASTE GENERATED: -47%
HAZARDOUS WASTE GENERATED: -43%
WASTE RECOVERY: + 2%

The Polish plant of Bielsko
Biala (Shock Absorbers), which

THE PLANT IN NUMBERS
NUMBER OF EMPLOYEES: 782
BLUE COLLARS: 650
WHITE COLLARS: 132

The plant

THE PLANT IN NUMBERS
NUMBER OF EMPLOYEES: 343
BLUE COLLARS: 275
WHITE COLLARS: 68

The Plant

PLANT INFORMATIONCOUNTRY: BRAZIL
BUSINESS LINE: AUTOMOTIVE LIGHTING
PLANT: CONTAGEM

In 2018, the plant worked to reduce
environmental impacts, focusing on
production wastes sent to landfill.

purification of oil. This device,
which takes advantage of theelectrostatic charge of pollutant

Bielsko SA - Hazardous Waste KPI(kg hazardous waste generated/
Good Hours Produced)

particles, is used in machinery,allowing the reuse in the process of the filtered oils.

2016This has led not only to a
reduction in the quantity of
consumed oil, but above all a
progressive reduction of hazardous waste generated.
After this first application, thissolution has been extended toother production units in theplant.

0.041

A dedicated study revealed thatthe most relevant quantity of
wastes was made up of BMC(Bulk Moulding Compounds),
thermosetting materials used in
the moulding of Reflectors.

The project, that was developed
and launched in the last quarterof 2018, focused therefore on
the search for an alternative toContagem - Waste to landfill KPI(waste to landfill/waste generated) %sending BMC wastes to landfill.
After a detailed selection, acompany that was able to blend
BMC wastes with other wastes to

28.8%

2016

form a blend that could be used
as fuel in cement factories wasfound.
Since it was launched, the project
has led to a progressive reduction

26.7%

in the percentage of waste sent tolandfill that was already significant
in 2018 and that will guarantee

2018

the reaching of the defined target(ZERO waste sent to landfill) in

2017

22.1%

2019.

"ZERO waste sent to landfill" ProjectNow the BMC and not recyclabe waste are coprocessed

2017

0.031

Plant generates
wastes in its
productive process

Wastes are carried
to the recovery
supplier

The waste isanalysed andprocessed

The blend moves
from the recovery
supplier to thecement kiln

The blend is used
as fuel in the
cement kiln

A certificate
proves the thermal
destruction and theeffective disposal

2018

0.023
The selected waste
is transformed intoa blendTransformation ofwaste into energy

57

56

2

43,227

11,6242017

STAKEHOLDERS

42,980NEW EMPLOYEES(n.)
NEWNEWEMPLOYEESEMPLOYEES(n.) (n.)

From 41
From
toFrom50
41 to4150
toOver
50 50
Over
Over
50 50

42,980 42,980
42,980AVERAGEHOURSOF HOURS
TRAINING
AVERAGEHOURS
OF TRAINING(n.) (n.)
AVERAGEOF(n.)TRAINING
2016

2016 2016

42,830 42,830
42,830

10,48710,487
10,48732.3% 32.3%32.3%

OF WHICH
OF WHICH
OF WHICH

2017 20172017

2017 2017201710,62610,626
10,626 32.3%32.3%
32.3%

11.3
13.5 13.5
13.5 11.311.3
13.5 13.513.5

12,57412,574
12,574 33.5%33.5%
33.5%

2016 2016
2016

FOCUS | TOWARDS AN EVERINCREASINGLY RESPONSIBLE 513 513 513
SUPPLY CHAIN: THE ISO 20400 1,026 1,0261,026
160 160 160
GUIDANCE

pany procurement
processeswith201720172016
2017 20162015
2016
20152015
reference to the four macro-cate-466466328 328
328
gories identified
by466
the regulation:
fundamental elements, policies
N. OF APPRENTICESHIPS
N. OF
N.APPRENTICESHIPSOF APPRENTICESHIPS1%0.9%
1% 0.9%0.9%
0.9% 0.9%
0.9%
1,145 1,145
1,145
1,256 1,256
1,256
and strategies, organisation, andprocesses. Each of these aspects
EMPLOYEDEMPLOYEDEMPLOYED2018 201820172018 20172016
2017 2016
2016

58

57

95.2
95.2

96.2
95.2
96.2

96.2
96.2
96.2

96.2

M

N. OF SCHOLARSHIPS
N. OF
N.SCHOLARSHIPSOF SCHOLARSHIPS
91 in91
228
91
228
228
was examined
relationtovarious
AWARDED
AWARDED
AWARDED% of open-ended% of%open-endedof open-ended
contracts
contracts
contracts

themes regarding not only the enviagneti Marellihas
In 2018,
MagnetiMarellitooka SCHOLARSHIPS
new% of fixed-term% of%fixed-term
ofcontracts
fixed-term
contracts
contracts
VALUE
OF
VALUE
SCHOLARSHIPSVALUEOFOF SCHOLARSHIPS
115,189
115,189
197,829
115,189
197,829
197,829ronmental
aspect,but also
aspects
AWARDED
AWARDED(€)
AWARDED(€) (€)
alwaysstep in this direction,withthe aim
3.8 3.83.83.8 3.84.83.8
4.8been
4.8 comof ethics, referring to principles
mitted to sharingof responding to the most advancedsuch as responsibility, transparenits sustainability
requirements for sustainability in thecy and respect for human rights.
values not only
management of the supply chain. To
The assessment process was dividwithin the company but also withthis end, an assessment has been
ed into three steps:
all its external stakeholders, fromcarried out in accordance with the1) Analysis carried out throughcustomers to suppliers.
new ISO 20400 Guidance, publishedinterviews with actors involved
Beginning with the Sustainable Supin 2017, which indicates a series ofin the procurement process andply Chain Program launched in 2012,
steps to be taken in order to include
through the analysis of the main
Magneti Marelli has always placed
criteria for sustainability in the supply
documents regarding company
particular attention on the supply
chain. As well as providing a set ofgovernance.
chain, raising awareness among
definitions and suggestions on cri2) Assessment of the areas for
its suppliers on themes such as
teria that should be included in the
improvement and Gap analysis
respect for the environment and for
procurement process, the guidance
through a dedicated tool.
human rights, in the conviction that
introduces the concept of risks and3) Analysis of the results and defithe implementation of a clear andopportunities to bear in mind when
nition of actions to be taken fortransparent sustainability strategy
making company decisions.
improvement in each macro area
is not possible without an analysis ofMagneti Marelli’s assessment
examined.
the surrounding context.
was carried out by an external

2018

2018
2017
2018 20172016
2017 20162016

13.5

11.3

2018

2017

2016

3.8

3.8

4.8

149,226149,226
149,226% of which
are women

2017

2017

10,626

32.3%

2016

2016

12,57433.5%

SUPPLIERS

2018

2017

2016

1%

0.9%

0.9%

% of fixed-term contracts

N. OF GRADUATESEMPLOYED

2017

2016

2015

513

20183282017466

2016

850
300
1,145
1,256
1,026 1,300% OF ANNUAL
PURCHASED VALUE
98%91 90%228 70%
N. OF SCHOLARSHIPS
(APV)
160
AWARDED
UNIT
N. OF APPRENTICESHIPSVALUE OF SCHOLARSHIPS
AWARDED (€)

149,226 115,189 197,829

2016 2016
2016

TALENTTALENTATTRACTIONTALENTATTRACTIONATTRACTION
company that analysed the com-

N. OF GRADUATES
N. OF
N.GRADUATESOF GRADUATESPART TIMEPART
PART
CONTRACTS
TIME
TIME
CONTRACTS
CONTRACTS

1%

2016

% of open-ended contracts
TOTAL TOTALTOTAL% of which% of%whichof which
are women
are women
NEW EMPLOYEESNEWNEWEMPLOYEESEMPLOYEES(n.) are(n.)women(n.)

20182018
20182017 20172016
2017 2016
2016

EMPLOYEESEMPLOYEESEMPLOYEESBY
BY BY
CONTRACTCONTRACTCONTRACTTYPE (%)TYPE
TYPE(%) (%)

2017

TOTAL
NEW EMPLOYEES (n.)

NUMBEROF SUPPLIERS INVOLVEDTALENTATTRACTION
IN SUSTAINABLE SUPPLY CHAIN PROGRAM

ARE WOMENARE WOMENARE WOMEN

Up to 30
Up to
Up30
to 30 From 31From
toFrom40
31 to3140
to 40

2017 2017

Over 50

PART TIME CONTRACTS

95.2

2017

20182018

From 41 to 50

EMPLOYEES BY
CONTRACT TYPE (%)

96.2

2018

2017

2016

6,162 6,162
6,162
11,624
14,182 14,182
14,182
10,862 10,862
10,862
43,22743,227
43,227 11,624 11,624

2018

From 31 to 40

13.5

96.2

2018

2017

2016

2018

11,282 11,282
11,282
14,137 14,137
14,137
11,032 11,032
11,032
6,529 6,529
6,529

2018 2018

2016

2018

7,804 7,804
7,804
13,69613,696
13,69610,80410,804
10,804
10,92310,923
10,9232017

EMPLOYEESEMPLOYEESBY AGEBY(n.)AGE(n.) (n.)
EMPLOYEESBY AGETOTAL TOTALTOTALEMPLOYEES(n.)
EMPLOYEES(n.) (n.)
EMPLOYEESUp to 302018

42,830EMPLOYEESARE WOMEN

6,162

10,862AVERAGE HOURS OF TRAINING (n.)

2016

KEY FIGURES 3

14,182

The results of the study highlighted a solid structure of com-(in anonymous form or not) .
The assessment also highlight-

perspective, could evolve throughthe inclusion of the principles ofpany values founded on a clear
and complete Code of Conduct
shared with all the Stakeholders, and a structured grievanceed the particular importancethat Magneti Marelli places
on evaluation, monitoring andcertification of suppliers, ansustainability in all the stages ofthe sourcing process, from thedefinition of technical specifications to the qualification of themechanism to report violations

approach that, in the future

supplier.

1
2
3
4

ISO 20400: THE STANDARD CREATED FOR PROCUREMENTSCOPE
NORMATIVE REFERENCETERMS AND DEFINITIONSUNDERSTANDING THE FUNDAMENTALS

Risk
management

Due diligence

5

Definition ofpriorities

Avoid
complicity

Exerciseinfluence

POLICIES/STRATEGY

Organisational
goals

6

+

Context
for procurement=

Strategy for sustainableprocurement

ORGANISATION
GovernancePeople7

Stakeholders

Priorities

ReportingComplaints

PROCESSES
Plan

ProcureManage59

58

FOCUS | ITALIA LOVES SICUREZZA,THE CONTRIBUTION OF
MAGNETI MARELLIIMPACTSKEY FIGURES 4

DATE

PLACE

TYPE

DIFFUSIONRECIPIENTS

14 MayCorbetta (MI)Workshop

1 Event
69 people reached

Schools

INVESTMENTS IN THE COMMUNITY (M€)

2018
0.875

2017
1.025

2016

1.074

NUMBER OF VOLUNTEER HOURS

2018
5,829

2017
3,777

2016

410

SOCIAL PROJECTS IN INDIA

2017
11

2016

9

the students visited the production
plant, where they were given theopportunity to have hands-on

essential pillar of
Magneti Marelli’s
activity, in fact it represents a

represents a collection of abilities
and behaviour to be applied above
all in everyday life and then inexperience of the application of bestpractices regarding safety in a 4.0
plant.

value to be shared not only within
the production plants, but also
exported to the local communities
in which the company operates.

a working environment that ismore and more technological.
Magneti Marelli’s commitment tosafety, both as a cornerstone in

Magneti Marelli’s participation in
the Italia Loves Sicurezza event
was merely an initial step for thecompany, which aims to extend

In 2018, Magneti Marelli took partfor the first time in the initiative
Italia Loves Sicurezza (Italy Loves
Safety), a “movement of people

its sustainability strategy and as
an approach to all the activities
in all of the plants worldwide,
was illustrated to the students.

the initiative to the plants in Italy,
and in the future to those abroad,
identifying new Safety Ambassadorsfrom among its employees who

united through a shared passion
for health and safety that iscontributing to change the way tocommunicate” these themes.

Following a “safety game” aimed
at identifying dangerous actions
through the use of virtual reality,

actively promote the cultureof safety among younger
generations.

April), Italia Loves Sicurezza
launched a road show including
approximately 700 events
throughout Italy aimed atpromoting the concept that healthand safety are assets to be sought

PEOPLE INVOLVED

2018
6,400

welcomed 60 students from a local
State-High School, basing theactivity on the concept that safety

To celebrate the World Day for
Safety and Health at Work (28PARTNERS INVOLVED

2018
8

T

he culture of Health and Safety has
always been an

2017
5,500

2016

4,200

and protected, not only in theworkplace, but also and most of alloutside the company.
Magneti Marelli made an active
contribution to the campaign,
hosting the event “The evolutionof safety in the Industry 4.0 era”
in its Corbetta headquarters. It

60

59

61

60

SUSTAINABILITY ENGINE

Magneti Marelli Sustainability Magazine

COLOPHON
This publication has been produced by the Magneti Marelli sustainability teamwith the methodological support of Collectibus and the creativity of Publicor.
For further information
sustainability@marelli.com
Viale Aldo Borletti 61/63
20011 Corbetta (MI), Italia

62

magnetimarelli.com/company/sustainability

63

62

64