ZEON GroupCSR Report 2012

Towards the Enterprise Blueprint for 2020
ZEON is a pioneering company that started out in 1950 manufacturing and selling polyvinyl
chloride resins it created through the introduction of overseas technology, becoming the firstprivate company to localize synthetic rubber business in Japan.
Since then we have developed products that contribute to the global environment andinnovative chemical products with notable features, thereby providing to society at large.
ZEON products are rarely advertised on TV, but they are currently used in a wide variety of fields,
including automobile, semiconductor, telecommunication device, energy, medicine and health careindustries.
By providing “products and services that are just a little more excellent” we hope to contributeto the realization of customer’s dreams and a prosperous society.
We at ZEON will continue to take on new challenges, motivated to create more inspiration andfeelings of gratitude among our customers.

Corporate
Philosophy

Contribute to the preservation of the Earth andthe prosperity of the human race
Realization

CSR
Policy● Ensure compliance and meet society’s needs for safety and security● Contribute to sustainably developing society and protecting

the global environment through our corporate activities● We will ensure that each and every ZEON person is awareof CSR and acts accordingly

Mid-Term
Management
Plan

Enterprise Blueprint for 2020

ZEON creates the future
today through the powerof chemistry
ZEON will continue to contribute to therealization of customer dreams and aprosperous society.

Key sense of value

Speed
DialogueSocial Contribution
Treasured ZEON characteristics

Mutual trust and fellowship

Evolve ideas towards fiscal 2013 execution

We consider our CSR Policy as the means to fulfill our corporate philosophy.
To achieve the Enterprise Blueprint for 2020 we will treat “speed,” “dialogue,” and “contribution to society”
as our key values and maintain the positive and lively nature of ZEON that is based on our mutual trustand fellowship.
Furthermore we will define the things we must do to achieve this blueprint in our SZ-20 Mid-Term
Management Plan, and then execute the needed actions.

2

ZEON Group CSR Report 2012

Report Policy
At ZEON Corporation and the ZEON Group, so that all of our
stakeholders can understand our approach to CSR and activities
for the environment, we began publishing the Responsible
Care Activity Report in fiscal 2000 and the CSR Report
including a report on social aspects since fiscal 2006.
In the fiscal 2012 version of the report, in order to achieve
the enterprise blueprint for 2020: “ZEON creates the future
today through the power of chemistry” drawn up during thecurrent Mid-Term Management Plan SZ-20, we are using the“Surprisingly ZEON” theme to introduce how our materials areused in people’s everyday lives as well as re-examining themeaning behind our CSR and how we should contribute tosociety through stakeholder dialogue with outside experts.
Serving not only as a comprehensive survey of our company’s
approach to CSR and our initiatives, the CSR Report is acommunication tool that promotes dialogue with all of our
stakeholders so that we can serve a greater purpose to theworld at large. We ask for your honest feedback and opinions
so that they may be used to improve our activities in the future.
■Period Covered
April 2011 to March 2012
(also includes some new information from April 2012 and later)■Organizations Covered
ZEON and the following subsidiaries and affiliates are included.
Japan: Z EON Kasei Co., Ltd., ZEON Polymix Inc., ZEON Medical Inc.,ZEON North Co., Ltd., Tokyo Zairyo Co., Ltd., RIMTEC Corp.,
ZEON Yamaguchi Co., Ltd., ZEON Chemicals Yonezawa Co., Ltd.,
Optes Inc.
Overseas: Z EON Chemicals LP. (USA), ZEON Chemicals Europe Ltd. (UK),ZEON Chemicals Thailand Co., Ltd. (Thailand),ZEON Advanced Polymix Co., Ltd. (Thailand)■Notes on the Report
The report was compiled with reference to the 2007 Environmental
Reporting Guidelines of the Japanese Ministry of the Environment andthe 2006 Sustainability Reporting G3.1 Guidelines of the Global Reporting
Initiative (GRI).

Contents
2
3
4
6
8
12
12
13
14
15
16
17
18
18
18
19
19
20
21
21
22
23
24
25
25
26
28
29
30
31

Towards the Enterprise Blueprint for 2020
Report Policy
Surprisingly ZEON: ZEON is All Around Us!
President’s Message
Stakeholder Dialogue
ZEON’s CSR
Corporate Philosophy / ZEON CSR Policy / CSR Code of Conduct
CSR Management
Corporate GovernanceRisk Management and Compliance
TOPICS 1 R esponse to Great East Japan Earthquake andTsunami Disaster
TOPICS 2 K ey Initiatives for Implementing CSR Activities:
CSR Matrix and CSR Core Projects
Environment / Safety
Environmental Philosophy / Safety Philosophy
Responsible Care Policy
Environmental and Safety Management
Safety Training
Targets and Results
Overall Environmental Impact
The Economic Aspects of Our Environmental Performance
Reduction of Greenhouse Gas Emissions
and Energy Conservation
Chemical Substances Management
Quality Assurance (Relationship with Customers)
Relationship with Suppliers
Relationship with Shareholders and Investors
Relationship with Employees
Relationship with Society
Third-Party Opinion
About ZEON Group
Content Available in the Online Report

About CSR Reporting Formats
ZEON’s CSR Report is available in two different formats:a printed brochure and website version. Website version canbe accessed on ZEON Corporation’s website.
The printed brochure mainly covers activities in fiscal 2011.
The website version adopts the same content of the expanded
version but is updated continuously.

Website version
CSR Section of ZEON’s Website

http://www.zeon.co.jp/csr_e/index.html
Home>CSR Activities

ZEON Group CSR Report 20123

Surprisingly ZEON: ZEON is All Around Us!
ZEON products are highly versatile, functional materials used in all kinds of things you see and use every day.
Take a look around and you might be surprised to find ZEON right under your nose–or even your feet!

Rubber gloves
Known for having few impurities and allergens and being
highly resistant to oils and chemicals, our synthetic latex is
widely used in rubber gloves of all kinds, including medical
gloves, gloves used in the kitchen, and work gloves.

Tires
ZEON manufactures synthetic rubber for automobile tires.
Much attention in recent years has been given to synthetic
rubber that improves tires’ ability to roll more easily(better fuel efficiency for the car) and stop better (safer
for occupants), two properties that usually are mutually
exclusive. Such tires help protect the global environment asthey increase the vehicle’s fuel efficiency and thus reduce
CO2 emission.

Lithium-ion batteries
Lithium-ion batteries are used as a power source in a widearray of electronics, from hybrid vehicles to mobile phones
and laptop computers. ZEON’s binder (an adhesive) help
make batteries safer and last longer. Use of this binder is
expected to increase dramatically as the electric car market
takes off.

Automotive parts
Zetpol® is an oil and heat-resistant, long-lasting synthetic
rubber that commands the largest share of the global
market. Energy efficient and eco-friendly, Zetpol is widelyused in automotive parts such engine timing belts.

Roadmarking paints
ZEON’s petroleum resins are also used in traffic paints
used to mark white and yellow lines on roads andcrosswalks. These resins are made from an ingredientcalled piperylene, which ZEON extracts from naphtha using
proprietary extraction technologies.

4

ZEON Group CSR Report 2012

Description of Symbols

Higher qualityof life (QOL)

Faster and easiercommunication

Energy conservation,
storage, and generation

Sink bowls,
bathtub pans
RIMTEC, a group company, manufactures and supplies
raw materials used to make plastic molded products
such as sink bowls and bathtub pans. The materials are
made from an ingredient called dicyclopentadiene, which
ZEON extracts from naphtha using proprietary extraction
technologies.

Perfumes, shampoos,conditioners
ZEON aroma chemicals are used in cosmetic and hygiene
products, food products, and various everyday goods.
Green aromas chemicals lend a fresh, crisp scent like green
foliage, while jasmine aroma chemicals release a sweeter,floral scent. Lactone aroma chemicals are essential
ingredients in dairy products. Our products are very safe,with our green aroma chemicals taking the largest shareof the global market.

Televisions, smartphones,
tablet devices
ZeonorFilm®, produced using the world’s firstenvironmentally friendly sheet extrusion process, has
superior optical performance and is used in
LCD televisions, smartphones and tablet devices.

Housing materials
ZEON Kasei, a group company, supplies various user- andenvironment-friendly construction materials to make timespent at home more comfortable, such as sound insulating
materials, vibration damping materials, and siding.

Powder puffs
Synthetic latex is also used in powder puffs
for makeup application. Roughly 90 percent(Estimate by ZEON) of the world’s powder
puffs made from NBR latex use ZEON latex
because of its high performance and ease ofprocessing.

Digital cameras
ZEONEX®, a highly functional resin developed by ZEON
with superior optical properties, high transparency,
and very high purity, is used to make optical components
for digital cameras and camera lenses for mobile phone
cameras.

ZEON Group CSR Report 20125

President’s Message
Promoting CSR with the New
Mid-Term Management Plan, SZ-20
Over one year has passed since the Great East Japan
Earthquake, but many in the disaster zone still livein temporary housing. We would like to express our
deepest sympathies and wishes for quick restoration
to all whose lives have been affected by the disaster.
Fiscal 2011 marked the first year in our new MidTerm Management Plan, SZ-20. The three years of
our last plan, IZ-60, saw the creation of various
mechanisms for fulfilling our corporate social
responsibility, including a CSR Policy, CSR Code of
Conduct, and CSR Conference.
These mechanisms will prove instrumental inrealizing our Enterprise Blueprint for 2020: to create
the future today through the power of chemistry.
Based on our corporate philosophy (“contribute to
the preservation of the Earth and the prosperity of
the human race”) and CSR Policy, through SZ-20
we will seek to create new products that contributeto society, help our customers live their dreams, andmake the world a more comfortable place to live.
We will tackle various challenges in the next three
years based on a two-pronged strategy. First, as a groupwide business strategy, we will further strengthen ourelastomer and specialty materials businesses to expand
operations globally, and contribute to society throughour core business with innovative, world-classtechnologies. Secondly, through “visualization,”or graphically organizing our goals and actions,
we will develop a CSR-based awareness to achieve
Enterprise Blueprint for 2020. As concrete steps toachieve the former, we will develop our global
production system, including, for instance, constructing

6

ZEON Group CSR Report 2012

a new plant in Singapore to produce S-SBR for ecofriendly fuel-efficient tires, and accelerate researchand development in three key specialty-materials
fields (IT components, energy components, andmedical devices) to market new products. For thelatter, we will implement projects to earn society’s
trust–and employee’s pride–in our company based ona set of key values (speed, dialogue, and contribution
to society) and qualities of ZEON we admire (mutual
trust and fellowship). We hope that, through these
activities, we can help people realize their dreams andmake the world a more comfortable place to live.

Remaining Vital to Society
Reflecting on what it means for a company to besocially responsible, we believe that not being aburden to society–in other words, being fully compliant
with laws and regulations and fulfilling society’s
needs to be safe and consistent–is the first thing acompany needs to show its raison d’être. For a chemicalcompany like ZEON, which uses large factories tocreate its value, adhering to laws and regulations andoperating safely and reliably–without accident andwithout burdening local communities or society ingeneral–is just the starting point.
The second requirement is that the company’sbusiness activities provide the world a service.
Contributing to society by delivering products andservices through one’s core business is the most basic
form of social responsibility. Creating Shared Value(CSV) has been a hot topic of late, but even before
this concept emerged , ZEON was safely providing
society with a steady stream of environmentallyfriendly products built with innovative technologies

that neither imitate nor could be imitated themselves.
And lastly, a company must work in areas outside its
business to create an independent and self-disciplinedorganization where all employees are sensitive to,think about, and act to meet society’s needs.

Future Initiatives
The CSR Matrix and CSR Core Projects initiatives
launched in fiscal 2011 represent our efforts to make
CSR a visually understandable process.
In fiscal 2012, we will continue to review these
initiatives and clearly show our progress in
implementing them to our stakeholders, all while
maintaining our most basic responsibility: to contributeto society through our core business.
With speed, dedication to society, and a desire tocommunicate, ZEON will strive to earn trust fromsociety, be a source of pride to its employees and,while meeting the requirements and expectations of
its various stakeholders–suppliers, customers, investors,
local communities, affiliated companies, and others
contribute to sustainable growth for everyone.
Lastly, I would like to thank you for reading thisreport. We truly look forward to hearing yourthoughts and suggestions.
June 2012

President and CEO
Naozumi Furukawa

ZEON Group CSR Report 2012

7

Stakeholder Dialogue

Rethinking CSR:Contributing to Society
Through Business and Outside of BusinessPreface
ZEON had its first stakeholder dialogue on CSR attended by
the President in fiscal 2010. This year, on May 15, 2012,a management team led by President Furukawa
engaged in a discussion with external experts on the theme,“Rethinking CSR: Contributing to Society Through Businessand Outside of Business,” to think about how to advance CSR
management under ZEON’s new CSR implementation system.
After the three experts presented their talking points (Please
see the External experts’s proposal) and opinions, the group
launched into a discussion focused on the two key areas
where companies can make a difference.

Participants● External experts
・Mizue Unno: Managing Director, So-Tech Consulting Inc.
・Masao Seki: Associate Director and Chief CSR Officer, Sompo
Japan Insurance Inc.
・Toshihiko Fujii: Consulting Fellow, Research Institute of Economy,
Trade and Industry (RIETI) Deputy Director General,
Global Energy Policy, Agency for Natural Resources
and Energy, Ministry of Economy, Trade and Industry● ZEON Corporation
・Naozumi Furukawa: President and CEO・Hiroshi Takegami: Director and Corporate Officer
・Yoshiyuki Mitsuhira: General Manager, R&D Center・Shunichi Yamamoto: Director, CSR Coordination Division(Transcription and editing: CSR Promotion Department)

External Expert 1
Fiscal tightening in many countries aroundthe world has put a damper on government’s
ability to address society’s problems. As aresult, the role has shifted toward businesses,
a social entity. This shift is in fact what led tothe birth of the CSR concept in Europe.
Imagine a Venn diagram made up of two
Toshihiko Fujii
ellipses, one representing customer needs,
the other social problems. Most companies think of contributing tosociety through their core business as the place where these two
ellipses overlap. For example, improving energy efficiency is a majorsocial challenge from a global environmental perspective, but it is also
clearly a customer need since it leads to lower utility bills for consumers.
Lately, however, some companies are calling attention to the possibilityof extending business even farther into the social problems category.
One recent example is a bread machine that can make bread with rice.

8

ZEON Group CSR Report 2012

In spite of a lack of customer needs, the product attracted new users
and became a hit because it addressed two of Japanese society’s
problems: a dependence on food imports and a decline in foodconsumption. I think companies need to think from a business perspective
about how to help solve social problems in areas that aren’t usually
within the scope of business, They need to focus on the social problems
themselves, not consumer needs, to find new business opportunities.
Contributing to society through your core business is dependent on
how much your employees try to be interested in social problems. It istherefore important to educate
Overlap: Contribute to society
through your core businessemployees to help
them develop an
CustomerSocialattitude that is.
needs

problems

Expand business farther into
the social problems area

Naozumi Furukawa

Hiroshi Takegami

Contributing to Society Through Business
Furukawa: We at ZEON strive to contribute to society
through our core business by supplying products where“customer needs” and “social problems” overlap. We do thisby developing and deploying innovative technologies thatneither imitate nor can be imitated themselves. Such products
include rubber (S-SBR) used to make fuel-efficient tires, which
help reduce CO2 emissions, cycloolefin polymers with advanced
optical properties, and a next-generation fluorocarbon detergent
that helps protect the ozone layer and mitigate global warming.
Mr. Fujii, you mentioned finding ways through business tosatisfy customer needs while addressing social issues in areas
where they don’t typically overlap. I see that as a process oftrying to expand our core business. To do that I think it’s
possible for us to approach research and development fromthe social problems angle, not just the customer needs angle.
Mitsuhira: In research and development, we need to createtechnologies that correspond to the overlapping part of theVenn diagram to an extent that they differentiate us fromother companies. This is not something we can pursue simply
because we have the idea. We need the technologies.
Takegami: Our company has been thinking about how tocontribute to society through our core business for a long time,
and this Venn diagram is a very easy way to understand it. In
our case, the overlap is rather large. Many of our users’ needs
overlap with a social problem. The diagram made me realizethat that’s perhaps one unique aspect of our company’s products.
Fujii: Chemical products are highly versatile and have numerous
applications, so there are many places where the two overlap.
I think engineers with an adaptive mindset could find ways to

Yoshiyuki Mitsuhira

Shunichi Yamamoto

use their company’s technologies if they visited places that arebattling numerous social problems, like disaster zones andplaces in Africa. Also, technologies and the ability to use themwell do not always come hand-in-hand. You can’t predict how
technologies will be applied, but you can see where society isgoing and figure out what problems will need to be solved a
decade from now. I think it’s important for managers to have aclear understanding of social problems and communicate
those problems to employees so they can understand them.
Mitsuhira: I’d like to respond to Ms. Unno’s comment that ourusing fossil fuel as a raw material poses a risk. It reaffirmed myfeeling that departing from our current research approach,which starts with the raw material and says, “What can I makefrom this?” is a big challenge in our development division. Do
you know of any good way to get our researchers and engineers
to be aware of this?
Seki: I think there are a number of ways. To get them interested insocial problems it is important to give them more opportunities tointeract with NPOs that work on social problems, and allow
them to have direct, real-life experiences in the places where
those problems are happening.
Unno: In industries driven by research and development,
it is common for companies to organize information bybusiness or technology, even in their stakeholder
communications. The explanatory materials ZEON provides forindividual investors, on the other hand, are easy to understand,because they’re organized by application–IT components,
energy components, and medical devices, for instance.
I think you would agree that you have to clearly explain how yourproducts are being used, and how they relate to environmental
and social issues.

External Expert 2
Being a chemical company, ZEON implements
Responsible Care activities to improve its
performance in safety and the environment.
But to take your CSR a step further, it is also
really important to determine how to run yourbusiness on top of a Responsible Careinitiative. In that process you should be
Mizue Unno
cognizant of the fact that virtually all
products use rubber, chemicals, or something else that ZEON makes.
In other words, ZEON’s business reaches out and touches many
aspects of society. Next, what value will you create in your business?
What I call “strategic CSR” is creating social value as well as
corporate value–creating social value through your core business–andincorporating CSR into business management. ZEON products alreadycreate a certain level of value for society, such as reducing impacts
on the environment. On the other hand, they also pose a concern in termsof risk management. As long as these products use petroleum, a fossil
fuel, as a raw material, they pose a future risk. For the long-termsustainability of society, you need to think, Will future generations beable to operate the same businesses and lead the same lives as us
today? ZEON needs to show its stakeholders what direction it will goin, including what raw materials it will use, to be the company it wants
to be in 2020. And to
expand your business
Value
Strategic CSR creation
globally, you need to provide
concrete examples of where
Risk
your products are being
management
Basic CSR(ISO 26000 and other standards)
used and also effectively
communicate the CSR work
you are doing.
Corporate governance,compliance, etc.

ZEON Group CSR Report 20129

On another topic, if your new plant in Singapore is goingto create products for emerging countries, it probably means
you have to develop products that are different from thosemade for developed countries. Those products aren’t born fromthe laboratory. Take the automotive field for example. You haveto make components for cars that probably aren’t inspected orserviced for years, or are driven on bumpy, unpaved roads.
Such components are developed differently from the highly
functional components demanded in developed countries.
Looking at development from the perspective of how thecomponents will be used will help you find a development
objective that new markets will need. A CSR perspective thattakes into account the problems local communities are actuallyfacing goes a long way in penetrating new markets.
Seki: The Japanese insurance industry is aggressively trying
to expand overseas, and for developing countries we haveto devise entirely new business models. Many of our new ideas
are about how we can sell our products, or how we can help
people. They’re not much about the products themselves.
When we developed our weather index-based insurance fordeveloping countries, young employees with three to four
years work experience contributed the most. They came to thecompany with a desire to do something positive for developing
countries and have worked really hard at it. So I think you
have to appreciate young people’s sensitivity and enthusiasm.
Furukawa: Emerging markets will become more important for
ZEON as well. Emerging countries have been the beneficiaries
of more traditional forms of social contribution such asphilanthropy, but I am sure there are areas where we can dosomething through our business. We need to think of productsthat will address social problems in these countries.

Contributing to Society Outsideof BusinessYamamoto: The third item in our CSR Policy expresses ourhope that our employees will take seriously the expectations
our stakeholders have toward the company as a social entity,even outside its business. What should we do as a company
to help them?
Seki: Right now, the Japan Business Federation is advocatinga strategic approach to CSR in response to skepticism overthe effectiveness of philanthropy alone. The idea is to change
society and the company together through social contributions.
Corporations have had difficulty making a difference bythemselves, so in recent years more corporations have been
seeking partnerships with organizations in non-private sectors
like NPOs, which are growing in number and reach. A survey
by the Japan Business Federation three years ago showed thatover half of respondents were either in or had been ina partnership. Given the 2011 disaster in Japan, I expect thisnumber to increase substantially.
It is also important to give employees the opportunity
to come in contact with social problems. Whether they are
motivated by it probably depends on the person, but I believe
many individuals are forever changed on some level by what

External Expert 3
My company started working on global
environment and sustainability issues backin 1992 when our president at the time,
Yasuo Goto, was inspired to action by the
Earth Summit in Rio de Janeiro. As formyself, I’ve been working to promote CSR
at Sompo Japan Insurance for the last ten
Masao Seki
years, and in five of those years I’ve been
involved in the creation of the ISO 26000 standard as a representativeof the Japanese business community, appointed by the Keidanren(Japan Business Federation). To become a socially responsible
corporation, it really boils down to one thing: how you motivate youremployees, or in other words, how you change their awareness andbehavior. Social responsibility should also be embedded in a company’s
management system. It should not just be about philanthropy.
ISO 26000, too, encourages companies to unify social responsibility
with their existing management systems. The key to that unification
is raising leaders through education. Departments and human

10

ZEON Group CSR Report 2012

resources with a key role in CSR need to be properly educated.
And the first step in CSR education is the president expressing his
or her commitment, and employees understanding it.
ISO 26000 is a global standard in the truest sense of the word.
Some 400 people from 100 countries came together, brainstormed,
and drew up a set of guidelines that everyone could agree on.
While taking full advantage of the guidance this standard provides,
it is important for companies to work on CSR with an awareness ofthe differences in thinking between stakeholders in Japan and thoseoverseas (in Japan the emphasis is on the environment, while inEurope and the U.S. it is on human rights and labor), and to clearlycommunicate their efforts. ZEON business is not easy to understandfor most consumers. Nor is it something they are very familiar with.
So instead of simply listing facts and results when communicating
your efforts globally, you need to tell a story about why you
are implementing CSR while understanding how much interest yourdifferent stakeholders have. This will also impact talent acquisition
when you expand overseas.

Toshihiko Fujii

they do for people or what they experience.
Yamamoto: I went to Minamisanriku as a disaster relief
volunteer and I must say there is a big difference between
what you read in the newspaper or see on TV and what you
see and feel when you’re actually there.
Fujii: The important thing with social contributions is what
you just said–the experience–and also what employees dowith their experience when they come back to the workplace.
Whether you can identify a social problem that will inspirea new technology depends on awareness. The best way
to acquire an awareness of problems is to go where they exist.
The next important step is then harnessing the energy of
employees who have returned from the experience.
Furukawa: This is an example from another company inthe same industry, but producing mosquito nets in Africa
to prevent the spread of malaria there is a great way to tackle
a specific local problem. One of the CSR Core Projects
proposals we received from employees suggested that we give
ZEON products free-of-charge to developing countries to help
improve their living conditions. There are a number of reasons
why that would be difficult, so we’re approaching it froma different angle. We at ZEON want to find something we
can do to help.
Unno: Southeast Asia, where you are expanding your business
now, faces a whole range of social issues, such as disasters,
traffic accidents, agricultural industry, and so on. I would like

Mizue Unno

Masao Seki

you to focus on problems that are particularly important
for the region.
Also, in terms of providing assistance for the disasterrecovery, I think having a division in charge of coordinating
activities to raise employee awareness and connect employeeswith volunteer opportunities will raise awareness and help
employees find something the company can do.
Mitsuhira: We chemical manufacturers often say that you
can never know the truth without going to the source of the
problem. This is also true with CSR. If you don’t go to the sourceof the problem, you’ll never experience it, you’ll never be
motivated to fix it, and you’ll never come up with the right ideas.
Yamamoto: In 2011 we asked members of the company tosubmit proposals for a core project that would symbolize our
CSR efforts here at ZEON. We received 217 proposals, someof which were related to our business but many of which–now
being after the 2011 earthquake and tsunami–were forreconstruction volunteering, philanthropy, and local community
projects. We plan to announce the project and get started
working on it as soon as we decide.
In the two years since we formulated our CSR Policy,
we’ve tried to be sensitive to feedback from stakeholders tokeep us from becoming complacent about our CSR activities.
I would like to end today’s discussion by saying that I lookforward to your feedback bringing new energy to the CSR
debate inside ZEON.

CSR Efforts at ZEON: Conclusions Drawn from the Stakeholder Dialogue
Naozumi Furukawa, President and CEO
Like many Japanese corporations, ZEON started its CSR program by
enforcing legal and regulatory compliance in its operations. Taking
lessons from the government sanctions imposed on us for violating
Japan’s High Pressure Gas Safety Act in 2003 and also from cartel
activity related to nitrile-butadiene rubber in the U.S. and Europe, weplaced compliance at cornerstone of management and built a group-widesystem to prevent incidents like these from recurring.
Starting in the mid-2000s, when CSR first entered business parlancein Japan, ZEON announced a CSR-focused management policy in its
mid-term management plan, PZ-3 (fiscal 2005 to 2007). In our next
mid-term management plan, IZ-60 (fiscal 2008 to 2010), we built
a policy and organizational framework for
implementing CSR, consisting of a CSR
Policy, CSR Code of Conduct, and CSR
Promotion Structure. Under our current
mid-term management plan, SZ-20 (fiscal
2011 to 2013), we are continuing our work,
this time to achieve our Enterprise Blueprintfor 2020: “ZEON creates the future today
through the power of chemistry” and“ZEON will continue to contribute to the
Naozumi Furukawa
realization of customer dreams and aprosperous society.” The backbone of these efforts is our Corporate
Philosophy and CSR Policy. To make these two an enduring andunchangeable part of our business, I want to raise the level of CSR
efforts here at ZEON.
In my President’s Policy, I talk about making our operations more
visible. CSR is the process of getting stakeholders to evaluate ourbusiness, and to ensure a fair evaluation we need to communicate
what we are doing and make it visible. All our employees need topractice being sensitive to, thinking about, and acting to meet society’s
needs in their respective workplaces. Some of these individual efforts
require a long-term commitment, such as volunteering to help towns
devastated by the 2011 disaster rebuild. This concept of mutual
assistance between our company and society is the perspective I wantto take in finding what is in our power at ZEON to help society.
In this year’s dialogue we heard some very thought-provoking ideas
and suggestions from our three guests. ZEON efforts until now havebeen focused on setting up a framework for implementing CSR activities.
From here we will use these new ideas to find ways to combine solutions
to social problems with fulfillment of customer needs. To do this we will
think about society in our work and harness the full potential of young
employees who have an interest in social problems by giving them
opportunities to experience those problems first-hand.

ZEON Group CSR Report 2012

11

ZEON’s CSR
ZEON regards CSR activity as all activities undertaken in order to continue being “a company trusted and valued by society.”
With each employee acting in awareness of CSR, we will thoroughly enact compliance and contribute to the global environmentand sustainable development through corporate activities.

Corporate Philosophy (Established April 1997)
ZEON will contribute to thepreservation of the Earth and theprosperity of the human race
In keeping with its name, which derives from the Greek
words “geo” (the Earth) and “eon” (eternity), ZEON willcontribute to the sustainable development of people,
society and the global environment through innovative
world-class technologies.

ZEON CSR Policy (Established April 2010)
1. We will ensure compliance and meet society’s needs
for safety and security
2. We will contribute to sustainably developing society
and protecting the global environment through our
corporate activities
3. We will ensure that each and every ZEON person isaware of CSR and acts accordingly

First principle

Beyond complying with laws and regulations, we intend to
firmly uphold the values and ethics required of a corporate
member of society and cause no distress to society. Moreover,
we will conduct all business operations appropriately in orderto prevent accidents, provide a sense of security to ouremployees as well as our local communities, thoroughly
address quality and product liability issues, and undertake
enterprise-wide environment and safety initiatives to avoid
impairing the safety and security of society.

with enthusiasm. We will remain dedicated to environmental
preservation as well as safety and quality assurance through theparticipation of every individual and in every corporate activity.

CSR Code of Conduct
This code of conduct was established after the ZEON CSR Policyby thoroughly reviewing the previous ZEON Compliance Codeof Business Practice (established October 2003). While the
ZEON Compliance Code of Business Practice was essentiallyregarded as a list of prohibited activities by stakeholder category,with an emphasis on legal and regulatory compliance, the newcode clearly outlines the behavior to be progressively adopted
with the perspective of meeting society’s expectations inaccordance with the ZEON CSR Policy.
Example CSR Code of Conduct Items● Compliance with antitrust laws
● Prohibition of entertaining and gift-giving to civil employees● Severance of relationships with anti-social forces● Provision of product safety, manufacturing responsibility andproduct information● Selection of production service providers● Protection of personal information● Protection of intellectual property rights● Compliance with competition laws of other countries● Strict export management under a security pact
● Prohibition of entertaining and gift-giving to foreign
civil employees● Compliance with labor-related laws
● Prohibition of conflicts of interest● Compliance with local laws and regulations and respect for
cultures, traditions, customs and religions● Compliance with internal regulations and respect forsocial standards● Respect for human rights and prohibition of discrimination

Second principle

We will contribute to the realization of a ubiquitous society andprotect the global environment through our core business. We willencourage proactive action across the world, refine innovativetechnology, and continually create new products. As an
indispensable and valuable corporate citizen, we will enhance ourcorporate value and meet the expectations of society.
Third principle

Through our CSR management, we will continue to strengthen
our corporate governance and ensure that all employees
thoroughly recognize CSR as a personal commitment, performtheir duties in accordance with this understanding, achieve our
mission to meet the public’s expectations, and fulfill ZEON’s CSR

12ZEON Group CSR Report 2012For details on the CSR Code of Conduct, please refer to this PDF file.

http://www.zeon.co.jp/content/000257956.pdf
CSR Activities > ZEON’s CSR > CSR Code of Conduct

CSR Management
The CSR Policy and a more specific CSR Code of Conduct was established in April 2010. Then in January 2011, we revamped our CSR
organizational structure to help advance CSR activity within ZEON. Chaired by the President, the CSR Conference would be the chief bodyfor decision-making on matters relating to CSR. Seven committees, which would report to the CSR Conference, were installed to advance CSR
activities in specific areas. The CSR Conference is held six times a year to discuss and finalize activities, measures and annual activity plans
to be advanced by each of the seven committees, and to give necessary instructions based on progress reports.
CSR Promotion Structure
CSR Director

CSR Coordination Division

CSR Promotion Department

CSR Basic Policy Committee

CSR Promotional Committees
at Offices and Group Companies

General Affairs Department

Compliance Committee

Antitrust Law
Regulatory Subcommittee

Environmental &Safety Affairs Department

Risk Management Committee

Export Security
Control Subcommittee

Quality Assurance Department

Public Relations Committee

Corporate Governance
Subcommittee

Legal Affairs Department

Quality Assurance Committee

Information Security
Subcommittee

Corporate Communications &Public Affairs Department

President

CSR Conference

PL Committee

Internal Auditing

Environmental &Safety Affairs Committee

CSR Basic Policy Committee
Established in January 2011 to stimulate CSR
activities of ZEON. The committee also provides
guidance and support for CSR activities of CSR
Promotional Committees under its jurisdiction at
six offices and 10 group companies in Japan.
Meetings are held as required. The committee
convened seven times during fiscal 2011.
In fiscal 2011, the committee worked on
creating a CSR Matrix outlining the CSR activities
that ZEON should advance in regard to eachbusiness area and each stakeholder group. The aimof this exercise was to provide a bird’s eye view
visualizing CSR activity by the entire ZEON.
The committee also asked employees to submit
ideas for social contribution projects (Core Projects)
that were representative of ZEON’s CSR activity.
Some 217 responses were received and theselection process is now underway.
Compliance Committee
Established to prevent violations of laws andregulations. The committee is responsible for creatingcompliance education and training programs to be
implemented by departments in charge of businessactivities. The objective of these programs is to make2012.6.28 Updated

sure every officer and employee of ZEON acts in fullaccordance with the values and ethics society expects,
and by so doing establish fair and proper businesspractices that allow ZEON to develop business inharmony with the local community and society ingeneral. The four subcommittees shown in the chart
above were established to assist the Compliance
Committee. The committee convened three times
during fiscal 2011.
Compliance

P15

Risk Management Committee
Established to manage risks for the purpose ofmaintaining business continuity. The committee is
responsible for systematically preventing potential
risks and gaining control over emerging risks, as well
as for taking controlled action to minimize losses ordamage in the event a crisis does occur.
The committee convened 13 times during fiscal 2011.
Risk Management

P15

Public Relations Committee
Established to enhance the profile and image of
ZEON through accurate communication of its

philosophies, stances and activities to stakeholder
groups and society as a whole, and to ensure
timely and appropriate disclosure of information by
ZEON. Meetings are held as required.
Quality Assurance Committee
Formulates plans for management improvement
activities and training related to quality assurance
within ZEON and monitors quality assurance
implementation. Meetings are held as required.
PL Committee
Formulates plans for prevention activities andtraining related to the product liability of ZEON andmonitors response to emergencies. Meetings areheld as required.
Environmental and Safety Affairs Committee
Plans and proposes specific environmental andsafety measures for ZEON and monitors progressin addressing environmental and safety issues.
Meetings are held as required.
Environment / Safety

P18

ZEON Group CSR Report 201213

Corporate Governance
ZEON aims to increase profits and achieve ongoing corporate value enhancement while respecting and balancing the various interestsof its shareholders and other diverse stakeholders. To this end, we are making ongoing efforts to establish a system that enables
efficient and sound corporate management through corporate governance.
Putting into place a corporate governance system allows us to clarify the functions and roles of each organizational entity within
the company and to carry out quick decision-making and execution. We are also improving business transparency through appropriatemonitoring and disclosure of activities and their effects. We are determined to further enhance our corporate governance system inorder to carry out these functions effectively.
Corporate Governance System
General Meeting of Shareholders(Appointment / Dismissal)

Decisions / Supervision(Appointment / Dismissal)
Auditing

Board of Directors

Corporate Auditors

Decisions / Supervision(Selection / Dismissal)

Executive
Committee
Collaboration

Auditing(Dismissal)

Collaboration (Appointment / Dismissal)(Assistance)

Collaboration

Independent Auditor
Financial
Auditing

Auditing
Personnel

Business Execution andInternal Controls System

Representative Director
Information

Internal
Auditing

CSR Conference
CSR Basic Policy
Committee

Risk Management Committee

Information(External)

Internal auditing

Compliance Committee

External
LawyerEnvironmental and Safety Committee
PL Committee

Information(Internal)

Quality Assurance Committee
Public Relations Committee
Operating division, indirect departments, research laboratories, plants
Control / monitoring

Information(Internal)

Information(External)

Subsidiaries and affiliates

Board of Directors
The Board of Directors meets, in principle, every
month with corporate auditors in attendance toensure compliance with applicable laws and thearticles of incorporation in the execution of business.
The primary role of the Board of Directors besides
statutory duties is to make important decisions
about basic management policy and strategy andother aspects of business execution. An outside
director was appointed to the Board of Directors at
the June 2011 shareholders’ meeting.

14

ZEON Group CSR Report 2012

Executive Committee
The Executive Committee, in accordance with
Executive Committee regulations, comprises the
President, executive officers ranked senior corporate
officer or above, and other members separately
nominated by the President and meets, in principle,
twice a month to examine and make decisions onimportant business matters after due deliberation
involving consultation with attending full-time
corporate auditors. Important agenda items, as
stipulated in regulations for the Board of Directors,
are examined and decided by the Board of Directors.

Board of Corporate Auditors
The Board of Corporate Auditors comprises fivemembers, including three outside corporate
auditors. The board meets once every four months,
in principle, to report, discuss and resolve importantmatters related to auditing. In accordance withauditing guidelines established by the Board of
Corporate Auditors, each corporate auditor audits
directors’ execution of duties through various means,such as attendance to Board of Directors meetingsand monitoring of business operations, including
subsidiaries’ operations.

Risk Management and Compliance
Under the CSR Conference chaired by the President, seven standing committees manage risks of loss. The Risk Management Committee
and the Compliance Committee, along with the Compliance Committee’s subcommittees–the Antitrust Law Regulatory Subcommittee,
the Export Security Control Subcommittee, the Internal Control Subcommittee, and the Information Security Subcommittee–areadvancing ZEON’s risk management and compliance efforts.
ZEON’s Risk Management and Compliance System
CSR Conference

ZEON CSR Policy■ We will ensure compliance and meetsociety’s needs for safety and security■ We will contribute to sustainably
developing society and protecting the
global environment through our
corporate activities■ We will ensure that each and every
ZEON person is aware of CSR andacts accordingly

Compliance Committee
Prevention of law violations
Education, training, and audit of compliance with laws

Antitrust Law Regulatory Subcommittee

Corporate Governance Subcommittee

Prevention of violations of the Antitrust Law

Reliability in financial reporting

Export Security Control Subcommittee

Information Security Subcommittee

Proper security export control

Management of corporate confidentiality
and information security

RiskManagement
Committee
Prevention andcontrol of Risks;
Dealing withcrisesInternal reporting system
Internal route

External route(1) Superior(2) RiskManagement
Committee(3) External
LawyerInternal reporters
Employees, dispatched employees,
and officers and employees of contractors

CSR Code of Conduct
Individual stakeholders of ZEON such as its officers, employees, shareholders, and customers

The activities of each committee and subcommittee
in fiscal 2011
Risk Management Committee
The Risk Management Committee continued handling incidents
as they occurred and took steps to prevent their recurrence.
It also enhanced risk and crisis-related control measures,for example by performing a comprehensive revision of ourEarthquake Disaster Response Manual based on problems thatemerged during and in the wake of the Great East Japan
Earthquake in March 2011, and developing internal systems
to comply with ISO 31000, an international risk management
standard.
Compliance Committee
The Compliance Committee published a Chinese language
version of our CSR Code of Conduct and also educatedaffiliated group companies in Japan on Japan’s Subcontract
Proceeds Law. The committee strived to improve complianceawareness among all executives and employees of ZEON by
conducting its annual workshops on legal and regulatorycompliance at each worksite, gathering suggestions for a CSR& Compliance motto, and performing a legal and regulatorycompliance inspection at all worksites simultaneously,
among other activities.
● Antitrust Law Regulatory Subcommittee
The Antitrust Law Regulatory Subcommittee revised internal
rules and sought to clarify certain provisions in those rules.

The committee analyzed the reasons for raising prices,
the timing of the price increases, conformity with the rising
prices of raw materials, and other factors prior to raising prices
for ZEON products (including group companies in Japan).
In addition, the subcommittee reviewed the status of attendance
for industry entities to thoroughly implement rules and held
in-house seminars on the Antitrust Law.
● Export Security Control Subcommittee
The Export Security Control Subcommittee conductedassessments–also at group companies in Japan–to ascertain
whether our products are subject to list control*1 or Catch-All
Controls*2. The subcommittee held in-house seminars at the
Head Office, laboratories, and plants, and strived to increase
the understanding of all those involved, including those who
assess technologies.
*1. List control
A program controlling exports of materials and technologies likely to
be diverted to military end-use.
*2. Catch-All Controls
An export-control program controlling anything that could be used todevelop weapons of mass destruction and related materials, particularly items not subject to list control.

● Internal Controls Subcommittee
The Corporate Governance Subcommittee strived to improvethe efficiency of internal control evaluations and focused onstandardizing operations. Nothing particularly noteworthy took
place in fiscal 2011.

ZEON Group CSR Report 201215

● Information Security Subcommittee
The Information Security Subcommittee partially revised our
education program and held e-learning courses, which saw
a participation rate of 99.7%. The subcommittee also hosted
lectures on information security taught by our corporate lawyers,
and also worked to establish an information management
system for ZEON.
Internal Reporting System
ZEON established its internal reporting system to quickly
collect information on potential risks and facilitate theirresolution. Reports of risk information can be made not only
to one’s supervisor or to the Risk Management Committee
directly but also by calling the Compliance Hotline, whichconnects that person to an external lawyer. No person who
reports a matter of concern will suffer any disadvantage asa result of making a report.
There have been three incidents of internal reporting
over the last five years (fiscal 2007-2011). The Risk
Management Committee has appropriately dealt with eachof these incidents by conducting an investigation into
the reported details and instructing internal organizations
to institute measures accordingly.

TOPICS

1

Response to Great East Japan
Earthquake and Tsunami Disaster
First we would like to express our heartfelt sympathies to all
who were affected by the Great East Japan Earthquake andtsunami disaster that took place on March 11, 2011.

Internal Reporting Flow Chart
Report/Contact

Supervisor

Feedback

Whistleblower

Risk Management Committee

Discovers the risk

Investigation
and response

Discovers thecompliance violation

External lawyer
HOTLINE
Compliance Hotline

Receive the report,
record observations, results

Supplying Much-Needed Electricity
We made full use of the on-site power generation systemat our Kawasaki Plant, meeting all of the plant’s and adjacentlaboratory’s energy needs with just this system. By feeding
power into the TEPCO service area grid we contributed toa more stable local electricity supply.

Monetary Donations
ZEON has donated a total of 40 million yen–30 million fromZEON Group companies and 10 million from employees,
including those at group companies outside Japan–throughsuch organizations as the Central Community Chest ofJapan to aid disaster victims and support reconstructionin the disaster area.
Efforts to Save Energy
In response to power shortages after the disaster, we
implemented various measures to reduce electricity use andcut peak power consumption, including reducing electricity
used by lights and OA equipment at all worksites andswitching to a summer work schedule and using fewer
floors at the head office.

16

ZEON Group CSR Report 2012

Banner hung at the Tokuyama Plant to keep spirits high during
the post-disaster recovery

For details

http://www.zeon.co.jp/csr_e/introduction/earthquake.html
CSR Activities > ZEON’s CSR > Response to Great East Japan
Earthquake and Tsunami Disaster

TOPICS

2

Key Initiatives for Implementing CSR Activities: CSR Matrix andCSR Core Projects
The new Mid-Term Management Plan SZ-20 announced in May 2011 is the first 3-year plan formulated since the enactment of
the CSR Policy. In formulating SZ-20, an awareness of how each business activity of each department (which form the basis
for creating the plan) relates to the CSR Policy was constantly maintained during its creation.
Now under SZ-20, CSR activities were organized by category and stakeholder in line with the structure installed in fiscal
2010 and we began work on the CSR Matrix, for visualizing CSR, and the CSR Core Projects, for new ideas of CSR activities inwhich all employees can participate, in order to further lay the foundation of ZEON’s CSR.

CSR Matrix

CSR Core Projects

CSR Matrix is an initiative in which the CSR Basic Policy
Committee and 16 CSR Promotional Committees (one ateach operating site and group company) work together
to create diagrams of CSR activities, organized by category
and stakeholder, to be implemented across the group andat each operating site and group company based on
day-to-day observations made in their operations. The groupmatrix provides an overall strategy for implementing CSR
activities across the group, while individual matrices
provide strategies for implementing CSR activities at each
operating site and group company.
In fiscal 2011, the first year of this initiative, we began
by organizing CSR activities for each department. We needto continue to review this initiative to determine what goals
should be set to realize our Enterprise Blueprint in SZ-20
and what strategies should be followed to achieve thosegoals, and will make steady progress in laying out a plan.

CSR Promotional
Committees at Offices

Following CSR policy and organizational developments infiscal 2010 (establishment of our CSR Policy and CSR Codeof Conduct and review of our committee systems), in fiscal
2011 we launched CSR Matrix and CSR Core Projects as
two new initiatives for laying down the foundation for CSR
within this new framework.
A CSR Core Project is a business or social contribution
activity that lays the foundation for future CSR activities in
ZEON. As a whole, CSR Core Projects will consist of notjust one core project but rather multiple projects carriedout on various scales–across the entire group and atdifferent operating sites, for example. We will openly solicit
project proposals from members of ZEON.
We received numerous project proposals from groupmembers during the proposal period from August to
October 2011. We will closely examine all of these proposals
and separate them into core projects, projects that shouldbe implemented throughout the group, and projects to be
implemented by individual operating sites and groupcompanies.
We plan to announce all of these projects together inthe coming weeks.

CSR Promotional
Committees at Offices

Core Project Selection Process

Organizational Framework for Creating Matrices
16 CSR Promotional Committees

Collaboration

CSR Basic Policy CommitteeCore projects

CSR Promotional Committee
at Group Companies
CSR Promotional Committee
at Group Companies

Group matrix

Individual matrices

Project proposals fromoperating sites andgroup companies

Group projects
Selection

Projects implemented
by specificorganizational units,
such as operating sites
and group companies

ZEON Group CSR Report 201217

Environment / Safety
Ensuring the safety of our stakeholders and protecting the environment is a prerequisite for all business activities and a mandate
for companies that provide a service to consumers. We strive to fulfill our mandate with innovative technologies and by taking
personal responsibility for our actions.

Environmental Philosophy and Safety Philosophy
Environmental Philosophy

Safety Philosophy(Established August 2001)(Established March 1997)

1. Environmental protection is a mission of a socially responsibleorganization
2. Our basic belief is that environmental protection can be achieved
with innovative technology
3. Environmental protection will be achieved when all employees
work together with a sense of mission to overcome challenges

1. Safety is the foundation of all business activities andthe greatest priority
2. Our basic belief regarding safety is that we can prevent all accidents
3. Safety will be achieved by performing the 5Ss* and when
everyone takes responsibility for their own actions*5Ss: Seiri (neatness), Seiton (orderliness), Seisou (cleanliness), Seiketsu (hygiene),and Shitsuke (discipline)

Responsible Care Policy
Responsible Care refers to a voluntary initiative by businesses that manufacture or handle chemical substances to achieve continuous
improvement in health, safety, and environmental (HSE) performance across the entire life cycles of such substances–from development
and manufacture, through distribution and use, and ending in final consumption or disposal–and based on the principles of independent
decision-making and personal responsibility. These businesses publicly commit to Responsible Care in their business policies,
execute HSE measures, and strive to improve their performance.
ZEON Corporation has been continuously practicing the Responsible Care philosophy as a member of the Japan Responsible CareCouncil since its inception in 1995. In 1998 we formulated our own Responsible Care Policy, which lays out a list of concrete goals
for implementing Responsible Care.

Responsible Care Policy(Established June 1998)
1. Prioritize the environment and safety
Protecting the environment and ensuring safety are preconditions
for all business activities and are the most important priorities.
We will work continuously to enact full accident prevention
countermeasures, and provide education and training for all
employees to prevent safety and environmental accidents.

5. Take the environment and safety into account when developing
new processes and products and performing quality assurance
We will perform thorough environmental and safety evaluations fromthe initial stages of research, develop technology and products thattake the environment and safety into account, and work to maintainand improve the quality of technology and products.

2. Collect and distribute the latest information on chemical products
We will collect, store and manage the latest information required
for the appropriate handling, use and disposal of chemical products,
and distribute this information to employees and users.

6. Live together with society
We will strictly observe regulations related to the environmentand safety, whether the regulations come from the local community,
the national government, overseas, or organizations to which we belong.
While cooperating in these activities, we will work to enhance
our communication with the local community and society in order
to convey a better understanding of ZEON’s activities and further
strengthen the trust that society has in our company.

3. Minimize the discharge of toxic chemicals and waste
We will work to reduce the discharge of hazardous chemical
substances, minimize waste, and develop technology for recycling
and reusing materials.
4. Promote activities for conserving resources and energy
We will aim to dramatically reduce the amount of energy we use
and help alleviate global warming by developing innovativetechnology and actively promoting resource and energy conservation
activities that involve all employees.

18

ZEON Group CSR Report 2012

7. Perform continuous improvements
We will continuously improve our environment safety management
and technology by operating a Responsible Care Audit, the Safety
Management System, an Environment Management System basedon ISO14001, and an Occupational Health and Safety Management
System.

Environmental and Safety Management
The president of ZEON Corporation formulates a President’s
Annual Policy and Safety Management Improvement Master
Plan by the end of each fiscal year for the following fiscal year.
These documents inform the head of the Environmental
and Safety Affairs Department, who then drafts his/her own
Annual Environment and Safety Policy, which is finalized by
the president following a review by the CSR Conference.
Worksite managers receive the President’s Annual Policy
and Safety Management Improvement Master Plan and use it
to formulate their own Annual Worksite Manager’s Policy
and Annual Worksite Safety Management Improvement Master
Plans. Worksite managers also receive the company-wide
Annual Environment and Safety Policy and formulate their own
Annual Worksite Environmental and Safety (Responsible Care)
Activities Plans.
The CSR Conference keeps track of progress in implementing
the Safety Management Improvement Master Plan, whileworksite managers track progress in implementing the Annual
Worksite Safety Management Improvement Master Plans
and Annual Worksite Environmental and Safety Activities Plans
by conducting worksite inspections.
Overall process of environmental and safety management
President

President’s Annual
PolicySafety Management
Improvement Master
Plan
Annual Environment
and Safety Policy

President’s Annual
PolicySafety Management
Improvement Master
Plan

AnnualEnvironment
and Safety
Policy (Draft)

Deliberation
Decision-making
Confirmation

CSR Conference

Safety Training
Systematic Safety Training
At ZEON Corporation, the head office organizes safety-training
programs for all organizations in the company, while each
worksite provides training tailored to its own operations.
These programs are implemented in accordance withthe annual plans set by each worksite.
Training Organized by the Head OfficeThrough education and training programs organized by the head
office and respective operating sites, we strive to eliminate
workplace accidents and injuries and prevent the spreadof damage should anything occur. In doing so, we hope to earn
the trust of the communities in which we operate.
Environmental and Safety Education and Training
Programs Organized by Operating Sites
Each of our worksites educates its employees on safety
and environmental laws and regulations according to anannual plan. Worksites also conduct comprehensive
emergency-response training once or twice a year. In fiscal
2011, we also conducted evacuation drills, taking a lesson
from the tsunami that hit Japan’s shores during the Great East
Japan Earthquake. A variety of other drills are conducted ona planned basis, including drills by the emergency response
teams comprising our self-defense emergency responseorganization, and also alert drills. After training, meetings
are held to identify problems, plan improvements, and in otherways increase worksites’ capacity to respond to emergencies.

Manage progress in
implementing the
Safety Management
Improvement
Master Plan

Environmental and Safety Affairs Department

Worksites● Formulate Annual Worksite Manager’s Policy● Formulate and manage progress in implementing Annual Worksite
Safety Management Improvement Master Plan
● Formulate and manage progress in implementing Annual Worksite
Environmental and Safety (Responsible Care) Activities Plan

ZEON Group CSR Report 201219

Targets and Results
Environment
The goals and results of the initiatives for environmental preservation under the fiscal 2011 Responsible Care activities are as follows.
We have had zero environmental incidents in the last four years. We were aiming to achieve zero emissions* of industrial waste in2013, but the goal was achieved two years early. We will continue to focus on reducing unit energy consumption and unit CO2 emissions
by an average of one percent per year as well as reducing acrylonitrile emissions.
* 0.1% or less of the actual disposal volume in 2007 (a target of less than 33.4 tons)

Review of 2011 Targets and Results
Theme
Eliminate environment
incidents
Reduce environmental
impact★★★Target reached

FY2011 Targets
Zero environment incidents

FY2011 Results
No environment incidents★★Target almost reachedSelfassessment★★★

★Improvement needed

FY2012 Targets
Zero environment incidents(1) Implement voluntary management plan for air-polluting toxic substances			
Reduce butadiene emissions from★
Butadiene: 4.0 tons
2010 level of 5.5 tons to 3 tons
Reduce acrylonitrile emissions from
Reduce acrylonitrile emissions from 2011★
Acrylonitrile: 13.0 tons
2010 level of 15.2 tons to 9 tons
level of 13.0 tons to 10 tons
(2) Implement zero emissions plan for industrial waste			
Reduce volume of waste sent to landfill to
Reduce volume of waste sent to★★★
Final landfill amount 4.1 tons
4.1 tons in 2011
landfill to 140 tons in 2011
Final amount to landfill for domestic
Final amount to landfill for domestic group
group companies 47.1 tons
companies Under 25 tons (Landfill disposal(Landfill disposal rate: 2007 emission
rate: 2007 emission standards) 1.0%
standards) 1.9%
(3) Strengthen company-wide energy conservation project			
Reduce unit energy consumption to
Reduce unit energy consumption* to Unit energy consumption was 73.5% of★
73.5%⇒66% of 1990 level
67.8%⇒67% of 1990 levelthe 1990 level
Unit CO2 emissions was 78.9% of theReduce unit CO2 emissions to 78.9%⇒69%
Reduce unit CO2 emissions to★
71.0%⇒70% of 1990 level
1990 levelof 1990 level*Per production volume

SafetyThe goals and results of the initiatives for safety under the fiscal 2011 Responsible Care activities are as follows. While the numberof workplace accidents has been declining in the last several years, we experienced a higher number of workplace accidents in fiscal
2011. We will strive to eliminate workplace accidents and safety incidents by going back to our safety philosophy and renewing ourefforts to maintain safety.
Review of 2011 Targets and Results
Theme
Eliminate safetyincidents

Eliminate workplace
accidents
Promote safety inlogistics

FY2011 Targets(1) F ull implementation of plant safety
evaluations(2) Implement specialized RC audits*1(at least 1 per year at all 4 plants)(3) Implement training to raise awarenessof accident prevention(at 4 plants and 1 group company)(4) Zero safety incidents*2(1) Z ero lost-time accidents, zero serious
non-lost-time accidents
Zero accidents in logistics★★★Target reached ★★Target almost reached★Improvement needed

Selfassessment

FY2012 Targets

Implemented 13 evaluations★★★

Implemented 1 audit at all 4
plants★★★

Implemented at 4 plants and 1
group company★★★

4 safety incidents
5 lost-time accidents, 1 serious
non-lost-time accident★

(1) Full implementation of plant safety
evaluations(2) Implement specialized RC audits(at least 1 per year at all 4 plants)(3) Implement training to raise awarenessof accident prevention(at 4 plants and 1 group company)(4) Zero safety incidents(1) Zero lost-time accidents, zero serious
non-lost-time accidents

FY2011 Results

Zero accidents in logistics★
★★★

*1. S pecialized RC audits: As stipulated by ZEON’s Responsible Care Policy, an audit conducted by a team led by the head of the Environmental and Safety Affairs
Department to confirm the status of RC implementation from an expert’s point of view. Sometimes simply called “specialized audit.” In contrast, a general RC audit,
or general audit, is an RC audit conducted by a team led by the director in charge of environment and safety. The team visits company worksites once a year to checkon the status of RC implementation from a managerial perspective.
*2. Safety incident: The occurrence of a fire, explosion, leakage, rupture, runaway reaction, or other such event. Company rules also define a safety incident as, in thenear-occurrence of one of these events, an event that could have occurred if actions were delayed, or an event in which signs of its potential occurrence were observed.

20

ZEON Group CSR Report 2012

Overall Environmental Impact
ZEON Corporation procures raw chemical materials andconsumes energy and water resources to produce materials
and chemical substances, its end products. While the nature ofour business requires that we generate by-products that stresswater and atmospheric environments to manufacture theseproducts, we are constantly making improvements to minimize
these substances.

Responding to Power Restrictions
In summer 2011, businesses all across Japan were working to
reduce their electricity use, partly to comply with restrictions
set in motion by Article 27 of the Electricity Business Act. ZEON
Corporation’s head office also took part in these efforts.
We were particularly successful in reducing power consumption
from lighting, using roughly 40% less electricity than in
fiscal 2010.

INPUTOUTPUT

EnergyHead Office

Products

Water discharges

211 thousand kL (crude oil equivalent)

Takaoka Plant

1,002 thousand tons

PRTR substances handled

Kawasaki Plant

Atmospheric discharges

878 thousand tons

Tokuyama Plant

Water resources

Mizushima Plant

18,812 thousand m3

R&D Center

PRTR substances 34 tons
CO2
581 thousand tons
SOx
513 tons
NOx
375 tons

Total water amount
15,716 thousand m3
COD
136 tons
Total nitrogen 149 tons
Total phosphorus 2.1 tons

The Economic Aspects of Our Environmental
Performance (Environmental Accounting)
ZEON Corporation began introducing environmental accounting
into its operations in fiscal 2000 in accordance with the
Guidelines for Introducing Environmental Accounting Systems(Ver. 2000) published by Japan’s Ministry of the Environment(MOE), and has published its environmental accounting results
since its 2001 Responsible Care Activity Report. This CSR reportpresents key data from our environmental accounting statements
in fiscal 2011, as recommended in the Environmental Accounting
Guidelines 2005 (MOE), Environmental Accounting Guidelines
for Chemical Companies (JCIA 2003), and Procedures forEnvironmental Protection Cost Classification 2003 (MOE).
Environmental Protection Costs● Capital investment for environmental protection
In fiscal 2011, we also invested in both reducing the amount ofemissions of toxic air pollutants as well as improving wastewater
treatment equipment at the Tokuyama Plant. Furthermore, wehave introduced solar power generation equipment at the
Tokuyama Plant as an energy conservation investment.
● Environmental protection costs
We are developing technologies to minimize the environmental
impacts of our wastewater and reduce the amount of residual

Industrial waste
Final landfill
4.1 tons
Recycled
11,654 tons

volatile substances in our products. We are particularly
focused on developing technologies, designing equipment,
and prototyping operating procedures to reduce emissionsof butadiene and acrylonitrile, both toxic air pollutants, andto reduce the environmental impact of our wastewater basedon such parameters as total nitrogen (TN) and chemical
oxygen demand (COD).
We are also working to develop eco-friendly products
and innovative, energy-efficient processes.
Environment protection costs
FY2011 (million yen)
Investment amount
Expenses
Classification(1) Costs within the business area
345
2,622
Pollution prevention costs
179
1,870
120
182
Breakdown Global environmental protection costs
Resource recycling costs
46570(2) Upstream and downstream costs00(3) Management activity costs
31
104(4) Research and development costs
386
1,309
(5) Social activity costs
0
116
0
107
(6) Environmental damage handling costs
Total
762
4,258
Item
Total investment amount within applicable period
Total research and development costs within applicable period(million yen)
16,382
10,626

Scope of accounts: Z EON CORPORATION; ZEON Head Office, Takaoka Plant,
Kawasaki Plant, Tokuyama Plant, Mizushima Plant, R&D Center
Period covered: April 1, 2011 to March 31, 2012

ZEON Group CSR Report 201221

Environmental impact index
SOx emissions (tons)
NOx emissions (tons)
COD emissions (tons)
CO2 emissions (tons)
Industrial waste sent to landfill (tons)
Total emission of substances subject to PRTR (tons)

FY2011513
375
136
581,060
4
37

Compared to FY2010
＋18
＋84
−4
＋22
−177
＋0.4

Scope of accounts: Z EON CORPORATION; ZEON Head Office, Takaoka Plant,
Kawasaki Plant, Tokuyama Plant, Mizushima Plant, R&D Center
Period covered: April 1, 2011 to March 31, 2012

● Economic Effects
We strive to use oils and other by-products arising from our
production and manufacturing processes in an economicallyeffective way by converting them to fuel, recycling them, or byother means. We also try to recycle empty drums and metal
Strong Tight Economical Containers (STECs). To conserve
energy, we try to capture waste heat generated byheat-intensive distillation processes.
Description of effects
Benefits of reclaiming material and utilization as fuel
Cost reduction through energy savings
Cost reduction through waste-elimination and recovery and reuse of solvents and catalysts
Total(Million Yen)
36
22
873
930

Scope of accounts: Z EON CORPORATION; ZEON Head Office, Takaoka Plant,
Kawasaki Plant, Tokuyama Plant, Mizushima Plant, R&D Center
Period covered: April 1, 2011 to March 31, 2012

Environmental and Safety Investment
In addition to our environmental investment related topollution prevention equipment, energy resources, and energy
conservation, we strived to improve safety through ongoinginvestment (safety investment) aiming to improve safety andeliminate hazards.
(100 million yen)
7.6
19.1
26.7

Environmental conservation-related
Safety-related
Total eduction of Greenhouse Gas
R
Emissions and Energy Conservation
By fiscal 2020, we are working to reduce CO2 emissions fromfuels defined in Japan’s Law Concerning the Rational Use ofEnergy to 80% of emissions in fiscal 1990. In fiscal 2010,
we added CO2 reduction to the list of evaluation parametersin our ZΣ Activities*, and are working to reduce CO2 emissions
across all our operations.
CO2 emissions in fiscal 2011 were approximately 580,000
tons, or 91% of emissions in fiscal 1990. We plan to improve
unit CO2 emissions by an average of 1% per year going
forward, and will also explore the feasibility of shifting toboiler fuels at plants to reduce CO2 emissions. In fiscal 2011,
we consumed an amount of energy equivalent to burning
approximately 211,000 kiloliters of crude oil , or 73% of
the amount of energy consumed in fiscal 1990. We plan
to improve unit energy consumption by an average of 1% peryear going forward.
*ZΣ Activities: An improvement initiative aimed at strengthening our corporate
health, with a special focus on boosting cost competitiveness.

Annual CO2 Emissions(1,000 tons)

Target line (80% of fiscal 1990)

700
600
Emissions

Environmental Protection Effects● Physical Results
We are actively striving to reduce our environmental impact
through investment to boiler equipment and wastewater
treatment facilities at each plant as well as other various
campaigns.
We were able to steadily reduce NOx emissions throughenergy conservation and improved combustion by installing
dry air emission processing equipment and optimizing
the amount of combustible air of the boilers at the Tokuyama
Plant. Our efforts cleared the environmental standards of eachplant and we will work to stably promote ongoing management
in fiscal 2012.
The amount of landfill waste was drastically reduced
compared to fiscal 2010. Eliminating the amount of waste
for external landfills by continuing to investigate recycling ofindustrial waste including plastic and rubber, which had been
sent to landfills, and sludge from wastewater treatment
facilities largely contributed to this reduction.

500
400
300
200
100
0

1990

2007

2008

2009

2010

2011 FY

Calculated using the Ministry of Economy, Trade and Industry’s “Report
Preparation Support Tool.” The CO2 emission factor used for power providers is
a value published in 2011.

22

ZEON Group CSR Report 2012

Energy Consumption and Unit Consumption Index）

250
Energy Consumed

110

Target line for unit energy consumption index*(80% of fiscal 1990)

100

200

90

150

80

100

70

50

60

0

1990

2007

2008

2009

2010

2011 FY

50

Unit energy Consumption Index (compared to fiscal 1990)（

1,000 kL crude
oil equivalent*Unit energy consumption index: An indicator for comparing energy efficiency.
Here energy efficiency in fiscal 1990 is used for comparison.

Reduction of Hazardous Chemical Substance Emissions
into the Atmosphere
Butadiene and acrylonitrile are among the 23 typesof substances requiring priority action stipulated by Japan’s
Air Pollution Control Law and thus the focus of our active
efforts to reduce atmospheric emissions of hazardous
chemical substances.
For butadiene, in fiscal 2008 we changed the manufacturing
process at our Tokuyama Plant to one that incinerates exhaustgas emitted by our recovery systems.
With regard to acrylonitrile emissions, we have beenworking to keep our recovery systems running steadily byrevising their operating conditions. We will continue to makeongoing efforts to reduce acrylonitrile emissions.
Amount of Butadiene Emitted into the Atmosphere

Chemical Substances Management

Emissions and Transfer of Applicable Substances in
PRTR Law (fiscal 2011)
Amount released
into atmosphere:
34.4 tons
Amount released
into water:
0.3 tons

Total transferred:
297.3 tons

Amount tolandfill:0

Release Amounts for Substances Subject to PRTR Law■New applicable substances■Applicable substances before revision(tons)

15
10
5
2007

2008

2009

2010

2011

FY

Amount of Acrylonitrile Emitted into the Atmosphere(tons)

Amount released
into soil:
0
Amounttransferred:
297.3 tons

20

0

25
Atmosphere emissions

Amount released
and transferred:
332.0 tons

Atmosphere emissions

25

PRTR Initiatives
ZEON is working to reduce the release and transfer ofsubstances subject to Japan’s PRTR Law.

Total released:
34.7 tons(tons)

20
15
10
5
0

2007

2008

2009

2010

2011 FY

70
Amount of release

60
50
40
30
20
10
0

2007

2008

2009

2010

2011 FY

ZEON Group CSR Report 201223

Quality Assurance (Relationship with Customers)
We are building frameworks and making steady efforts to ensure that our products achieve world-leading quality
and cost competitiveness.

Quality Assurance System
To consistently manufacture products that reflect the needs
and wants of customers and to ensure product quality, ZEON isadvancing integrated quality assurance activities company-wide,
across manufacturing, sales and engineering functions,by strengthening cooperation among plants, business divisions
and research units (R&D Center). For example, whena complaint is received or a problem occurs within a line,
business divisions, research units, and the Quality Assurance
Department get actively involved, joining manufacturing
departments (plants) in identifying the root cause, taking
action, and confirming effectiveness, as well as standardizing
processes to prevent a recurrence.
Quality Assurance System
Customers
Requests andrequirements

Products andservices
Plants(Manufacturing)

Site education;
Strengthening
integration ofquality into designand development
R&D Center(R&D)

Fact-finding;Knowledge sharing
between plants;
Reform/change planning
Quality
Assurance Dept.
Problem identifying;
Improvements

Divisions(Sales andLogistics)

Through these efforts, ZEON is working to improve theconsistency of quality and processes so that we are able todeliver to the customer products they will be satisfied with.

Quality Assurance Mechanisms
To ensure a consistent supply of high-quality products to ourcustomers, we have put in place various quality assurance
mechanisms based on the ISO 9001 international standard
for quality management systems.
Mechanisms supporting quality assurance at ZEON
Mechanism

Description

Policyimplementation

Identifying what has to be done within eachorganizational layer based on the President’s policy,
and then carrying it out.

Management
planning andreviews

Ensuring continuous improvement in quality
management by organizations with heads of units (plant
managers and business division heads) evaluating the
progress of tasks for each organizational layer andindicating strategies for the next round of improvements.

Product designand development
reviews

Reviewing whether each stage of product design anddevelopment is being effectively performed, and thenmaking improvements as required.

Product safety
evaluations

Performing a multifaceted product safety review inwhich product safety is evaluated at all stages, frominitial research through to product sale and ultimate
disposal.

Changemanagement

Preventing problems before they occur by establishingrules for making process changes associated withproduct improvements and so on.

Handling
abnormalities

Eliminating quality problems by pinpointing thecauses of process abnormalities at production
facilities, removing the causes, and ensuring that the
problems never recur.

Handling
complaints

Responding quickly and with sincerity to customer
complaints and raising the standard of quality control
to prevent recurrence.

Internal quality
auditing

Internal auditing to check that the company’s quality
management systems are working efficiently andeffectively.

Aiming to Create a Framework for Achieving World-Leading Quality and Cost CompetitivenessOur enterprise blueprint for 2020 in the area of quality assurance is
to be “a company with a framework for achieving world-leading
quality and cost competitiveness.” We are working toward thisunder our new Mid-Term Management Plan, SZ-20, which involves
establishing a quality assurance system that enables us to avoid
potential quality assurance risks. These risks include: (1) the risk of
product liability lawsuits; (2) supply obligation risk; (3) productrecall risk; and (4) the risk of credibility loss due to rumor.
We recognize quality problems as extremely important issues that
influence business continuity. We carry out quality management
through fact control involving data-based consideration,
decision-making and management. In other words, we pursue

24

ZEON Group CSR Report 2012

thorough visualization of the issues.
In keeping with our CSR Policy of being “a company that causes
no stress to society and is of value to the world,” we are establishinga quality assurance system that will
form the foundation for realizing our
Corporate Philosophy–“ZEON willcontribute to the preservation of
the Earth and the prosperity of
the human race.”
CSR Director

Hiroshi Takegami

Relationship with Suppliers
We are building raw material procurement systems to help us deliver the safest products to our customers in line with our CSR
Policy and Code of Conduct.
In procurement, we prohibit suppliers from handling certain
substances and monitor the content of substances governedby laws, regulations, and the RoHS Directive. We diligently
disclose information on substances contained in our products
and develop mechanisms to ensure that the products we
supply are safe.

Currently we are conducting a comprehensive revision of
our CSR Code of Conduct based on ISO 26000. Improving our
supply chain management is an important part of that process,so we are exploring the best mechanisms for practicing socially
responsible procurement.

Relationship with Shareholders and Investors
Through active communication and disclosing the right information at the right time through various media, we strive to help
our shareholders and other investors fully understand our business.

Communication with Shareholders

Communication with Investors

General Shareholders’ Meeting
On June 29, 2011, we held our 86th annual general shareholders’meeting in a conference room of the head office. To help investors
have a clearer understanding of our business, on the day of themeeting we also set up a booth with panel displays explaining
clients’ commercial products that use our manufactured goods.
To allow investors who cannot attend the meeting to exercise
their voting rights based on a full review of the proposals, wemail out notices approximately three weeks prior to the meeting.
We also post resolutions from the shareholders meeting on
our website, and also upload audio files of the presentation at
our quarterly financial results briefing, and videos of presentations
by top management on the current status of management at
ZEON (currently in Japanese only).

We engage in active communication with institutional investors
and analysts from both Japan and abroad.
Last fiscal year, in August and November 2011 and February
and May 2012, we held briefing sessions to announce ourquarterly results to analysts. In addition to summarizing financial
results, sessions for the 2nd quarter and the end of the fiscal
year included a briefing from top management on the current
status of management and our medium-term plan, SZ-20.
We also strive to provide individual investors with up-todate information on our business. For example, last year welaunched a website dedicated to that purpose. And in January
2012, an article on President Naozumi Furukawa was featured
in IR magazine, a business quarterly for individual investors
published by Nomura Investor Relations Co., Ltd.
We try to seize various other opportunities to inform investors.
In fiscal 2011, we took part in three individual investor events,
where we presented ZEON products used in day-to-day living
and our future business plans, using “Surprisingly ZEON” as
our presentation theme.
For foreign investors, we participated in a conference hosted
by Daiwa Securities Co. in March 2012 and plan to takeadvantage of more opportunities to communicate with foreign
investors going forward.
The company will continue to actively disseminate informationand deepen mutual communications with investors through its
website, briefings, and other means.

Informing Investors
We send a pamphlet featuring articles on the current status of
ZEON’s businesses, relevant topics, and other information toshareholders twice a year. The Midyear Report issued in
December 2011 was substantially redesigned to make information
more accessible, particularly to individual investors.

For details

http://www.zeon.co.jp/ir_e/index.html
Home > Investor Relations
87th Midyear Report
Showcases ZEON products that are the world’s top brands

ZEON Group CSR Report 201225

Relationship with EmployeesWith respect for human rights and a desire to maintain healthy work environments, we design and implement our employee
training and personnel programs so that all our employees, regardless of their background or values, can take pride in their work.

S triving to be An Enterprise where All
Employees Can Feel Pride in Their WorkZEON requires respect for human rights and prohibits
discrimination in its CSR Code of Conduct. We strive to bea business that is understanding and accepting of diverse
values and where no person is discriminated based on gender,
age, nationality, or other attributes.
We encourage employees to continually evolve by pursuinghigh goals based on independent thinking, develop humanresources systems that challenge them to achieve theirpotential, and maintain comfortable work environments thatvalue dialogue toward establishing ZEON as an enterprise
where every employee can work with pride.

ZEON CSR Code of Conduct(Excerpt)(Respect for human rights and prohibition of discrimination)
We will make efforts to maintain a sound working environment
at all times, respect the human rights of each individual, and not
engage in any act that may lead to discrimination.
(1) We will not commit unlawful discrimination based on birth,
nationality, race, ancestry, creed, religion, sex, age, disability,
preference, academic history or any other characteristic.
(2) We will not force business operations through violence, jeering,abusing, smearing and threatening behavior, nor will we infringe
upon human rights through bullying and other such acts.
(3) We will not engage in child labor and forced labor nor will wepurchase any product manufactured through such labor.

*At ZEON, we use “employee” to describe all workers, including both permanent and part-time workers

Basic Policy

ZEON–“A company of which each and every one of its employees can be proud”

Encourage employees to continually
evolve by pursuing high goals based on
independent thinking

Human resources system allows a senseof challenge and achievement

A comfortable working environment thatvalues dialogue

A wide variety of human resources
Respecting human rights, Prohibition of discriminationE ncouraging Employees to Think
Independently and Adapt toAchieve High Goals
Basic Philosophy on Human Resource
Tap into, develop, and fully use the competencies of each employee.

ZEON’s concept of “being what we want to be” refers topeople who act by thinking rigorously for themselves andcontinue to change in order to achieve lofty goals. ZEON’sconcept of “being the employee you want to be ”refers
to employees who think independently and continually adapt
themselves to achieve high goals. Employees at ZEON
are encouraged to visualize the employees they want to become,while ZEON tailors its education and training practices to help
each employee bridge the gap between their current

26

ZEON Group CSR Report 2012and visualized selves and to take daily steps toward that vision.
By fairly assessing the results of those actions and changing
how we treat each employee accordingly, we encourage
employees to set ever-higher goals. All of these concrete,
iterative actions to effect change and improvement
are harnessed toward creating a more vital workforce acrossthe company.
Resource Development Flow
Change employment
conditions
The employee
I want to be
Evaluation

Education andtraining
Tasks andperformance

The employee
I want to be(higher goals)

Educationand training

H uman Resources System that Gives Employees
a Sense of Challenge and Achievement
ZEON believes talented employees are what make a competitive
company. We aim for a human resources system that provides
employees with a sense of achievement by giving them
opportunities to challenge themselves with ambitious goals,
to act in pursuit of their goals, and to have their employment
terms be a fair reflection of their performance, all within
the greater goals of the organization.

Joint Declaration by Labor and Management
Aimed at the Growth of the Company

Performanceappraisal system
Bonus linked toresults system

A human resources
system that gives
employees a sense ofchallenge andachievement

ZEON Mastersystemthe two parties and cooperating to grow the company in a healthymanner and to maintain and improve working conditions for union
members. This agreement stipulates rules for union activities,
labor-management negotiation, and complaint processing,
and working conditions such as wages and work hours.
We also issued a Joint Declaration by Labor and Management
Aimed at the Growth of the Company based on a common
understanding that both the company and labor union mustcooperate and actively strive to harness the abilities of everyone
in ZEON if the company is to grow.

ZΣ* allowance, awards
system, Compensation
system for inventors

Severance pay
system*ZΣ Activities: An improvement initiative aimed at strengthening our corporate
health, with a special focus on boosting cost competitiveness.

 Comfortable Working EnvironmentAthat Values Dialogue
Building on the important prerequisite of regulatory compliance,
ZEON seeks flexible work practices guided by such principles as
motivation, reliability, achievement, stability, safety, and security,with special importance given to our corporate social responsibility.
We work endlessly to build comfortable working environmentsfrom five perspectives: supporting flexible work styles for a worklife balance, enhancing workplace environments, encouraging
dialogue, improving health, and supporting self-reliance.
Motivation, reliability, achievement,
stability and safety, security
Creating a comfortable working environment
Flexible work practices, Working environment,
dialogue, health, self-relianceL abor Agreements and Communication
between Management and Employees
ZEON Corporation and its labor union have tied a labor
agreement aimed at maintaining peaceful relations between

1. We will make mutual understanding and trust the cornerstone of all
management-labor relations
2. We will perform our respective roles to strengthen company
infrastructure and build a company of which we can be proud
3. We will mutually strive to improve and promote our corporate culture
as beneficial partners

Numerous opportunities for exchanging opinions are established,including consultative meetings between labor and management,
RC audits, and joint labor and management patrols, as well as
quarterly roundtable meetings, which are now a permanent part ofthe labor-management dialogue. Consultative meetings between
labor and management provide ample opportunity for forthright
discussion and both sides participate with a forward-looking
attitude and spirit of friendly rivalry based on mutual trust.
ZEON intends to proactively provide opportunities for dialogue
with the labor union and to implement various policies for making
ZEON a “company of which each of its employees can be proud”
through a beneficial partnership between labor and management
based on mutual respect for each other’s positions.

Health Management Initiatives
We strive to maintain and improve the management of ouremployees’ mental and physical health. We also promote thephysical health of employees on a continuous basis throughhealthcare guidance provided by nurses and other professionals.
In terms of employee mental health, several worksites have
implemented stress assessments to assist employees in better
understanding the physical and mental influence of stress.
In addition, ZEON conducts mental health training and assigns
psychiatrists and psychotherapists to support its industrial
physicians. Performing environmental measurements (such as
chemical concentrations, dust concentrations, noise levels) atworkstations in our plants also helps us to make improvements
to workplace environments.

ZEON Group CSR Report 201227

Relationship with Society
For the peace of mind of communities living near our operations, it is crucial that we maintain stable plant operations and build
trusted relationships with our neighbors. Through safe, stable, and reliable operations, we strive to earn that trust.

 elationships withR
the Local Community
Festivals
Some of our worksites host summer festivals.
● ZEON Summer Festivals(Takaoka, Kawasaki, and Mizushima plants)● ZEON Waraku Odori Dance Festival (Tokuyama Plant)● They also participate in summer festivals hosted by local
community groups, etc.
Cleaning
Our worksites help clean the neighborhoods around theirfacilities and also volunteer in cleanups hosted by local
communities and nearby companies.
● Joint cleanup with the Marunouchi Neighborhood
Association (Head Office), etc.
● Himi and Fushiki coastal cleanups (Takaoka Plant)● Tonomachi Yakosen street cleanup with nearby companies(Kawasaki Plant, R&D Center)● Higashi-gawa River cleanup (Tokuyama Plant)● Volunteer cleanups in the Shionasu District(Mizushima Plant), etc.
Plant and Laboratory Tours
Our plants and laboratories offer tours for high schools, vocational
schools, universities, local governments, business partners, relatedorganizations, and other interested community members.

presentations, and informal meetings where everyone could
voice their opinion. For the Tokuyama Plant, which strives toearn the trust of the local community through stable, safe, andreliable operations, the forum was a valuable opportunity to
exchange information and opinions with local stakeholders.

Furukawa Scholarship
The Furukawa Memorial Foundation is a public interest
incorporated foundation with 47 years of experience granting
scholarships to Japanese and foreign students who faceeconomic barriers to education. The foundation wasestablished and is currently operated with the goal of fostering
human development through academics. So far 2,766 people,
including the family members of some of our employees,
have received a Furukawa scholarship.
As an ongoing supporter of the Furukawa Memorial
Foundation, in 2010 we donated 10 million yen to thefoundation to celebrate ZEON Corporation’s 60th anniversary,and in 2011 we set up an internal contact to direct donations
from individual employees.

Recognition from Society
In July 2011, the Takaoka Plant’s long-running blood
donation program earned the Health, Labour and Welfare
Minister’s Award at the 47th national assembly for supportingblood donations.
The Takaoka Plant has held blood drives and supported blood
donation campaigns every year in the four decades since 1971.
Japan faces a growing need for donated blood as its population
continues to shrink and age, and the Takaoka Plant hopes to use
this award as an opportunity to contribute to society byparticipating more actively in blood donation programs.

Welcoming the Tsuruoka National College of Technology (Kawasaki Plant)

Participating in Community Discussions on
Responsible Care (Tokuyama Plant)
The Shunan District Community Forum is a multi-stakeholder
event held periodically in the Shunan Industrial Complex,–where our Tokuyama Plant is located–attended by 16companies, Shunan City government, and local residents.
At the sixth forum in November 2011, we gave tours of theTokuyama Plant. The event also included a keynote speech,

28

ZEON Group CSR Report 2012

Takaoka Plant manager Hiroshi Fujisawa accepting the award

Third-Party Opinion
Eiichiro AdachiCounselor Head of ESG Research Center,
The Japan Research Institute, Ltd.
ProfileOversees industry research and company screening from a CSR
standpoint, with a special focus on environmental initiatives.
Provides financial institutions with corporate information
for socially responsible investment and environmental loans.
Served as a Japanese industry expert in the ISO 26000
working group from March 2005 to May 2009.
The following is my independent assessment of corporate social responsibility (CSR) efforts andcommunication of such efforts by ZEON Corporation and the ZEON Group. This assessment is based on
my understanding of these efforts from reading this CSR report, written from the perspective of one
who provides financial institutions with corporate information for socially responsible investment.

That Japan’s industrial competitiveness is as much dependent on
manufacturers of materials, intermediate goods, and capital goods (e.g.,
raw materials, parts, and industrial machinery) as it is on manufacturersof goods for final consumption is well known. But when it comes tocorporate social responsibility (CSR), how the former are working toadvance their social responsibility is not something the public knowsmuch about. I sometimes come across manufacturers of materials,
intermediate goods, and capital goods who have trouble understanding
why CSR is so important an issue.
Easy answers to this question include “because we’re required byour business partners ” and “because other companies are working on
CSR and disclosing their efforts,” but I also hear comments such as“using our superior technologies and know-how to deliver exceptional
products to market is the most important part,” and “we don’t
understand why CSR is so necessary.”
When reading this CSR report, I had the impression that ZEON
Corporation and the ZEON Group, too, are on a search to understandwhy promoting CSR is necessary. But I could also tell they are well on
their way to finding an answer. The President’s Message clearly states,“...Not being a burden to society–in other words, being fully compliant
with laws and regulations and fulfilling society’s needs to be safe
and consistent–is the first thing a company needs to show its raisond’être”. This awareness is right on-target considering recent events–a
disconcerting corporate behavior in the area of fair competition,
and accidents such as fires and explosions at large plants. ZEON has

Response toThird-Party Opinion
Hiroshi Takegami
CSR Director

In fiscal 2011, the first year of SZ-20, we used the new CSR promotion
system established under IZ-60 to enhance and visually communicate
our CSR activities on top of more basic CSR efforts in safety, quality,
and the environment.
We would like to thank Eiichiro Adachi, Counselor of the Japan
Research Institute, for his pertinent observations of the state of CSR
activities at ZEON as well as his valuable perspective on the futurealso clearly presented its focus on sustainable societal growth andprotecting the global environment.
The question that remains is whether ZEON is effectively communicating
the results it has achieved through this approach. Saying that you haveformulated a policy, built an internal framework, and implemented
certain activities is only part of what stakeholders expect to hear. The real
focus should be on, for example, how company behavior has changed toensure fair competition, how many accidents have actually been prevented,
and whether environmental impacts have been steadily reduced.
ZEON should also try to explain its goals in greater detail. The report
includes the line, “ZEON will continue to contribute to the realization ofcustomer dreams and a prosperous society,” but unfortunately it remains
unclear what ZEON Corporation and the ZEON Group consider to be“customer dreams” and what kind of society is a “prosperous” one.
I would also like to hear ZEON talk about its concrete vision forsustainable development when setting goals to “contribute to thesustainable development of society.”
The third line of ZEON’s CSR Policy, “each and every ZEON person
is aware of CSR and acts accordingly,” really hits the nail on the head,because, while the CSR concept has spread to the larger part of theJapanese business community, issues have been raised over how CSR isonly implemented by the departments in charge of CSR, and overthe gaps that exist between awareness and reality. This report would be
far more compelling if ZEON Corporation and the ZEON Group were todescribe how they are putting this part of the CSR Policy into practice.
I hope you will heed the suggestions of stakeholders noted in
the stakeholder dialogue–“Companies need to focus on the social
problems themselves, not consumer needs, to find new business
opportunities,” “Using any fossil fuel poses a future risk…ZEON
Corporation needs to show its stakeholders what direction it will go in,”and “It really boils down to one thing: how you motivate youremployees.”–and become a corporation where everyone understands
why CSR is an important issue.
This third-party opinion is not a reflection of judgment about whether the environmental data
provided in this report was accurately measured, calculated, and provided in full as required bygenerally accepted environmental reporting standards.

direction of those efforts. To clarify our Enterprise Blueprint for 2020,“ZEON creates the future today through the power of chemistry,” we will
strive to better communicate our contribution to society through our corebusiness (products)–in other words, what we are doing today–and also
give real-life meaning to “customer dreams” and “prosperous society”–
the future we are creating with innovative R&D. With regard to Mr.
Adachi’s comment on the need to more effectively communicate ourresults, we hope to make our CSR efforts more visible by disclosing our
CSR matrices to outside stakeholders, setting concrete targets,and practicing the PDCA cycle.
And lastly, we hope to continue on our mission to become a company
where everyone has an understanding of what CSR is and why it isimportant, and takes initiative to satisfy the expectations of society
and make it a better place.

ZEON Group CSR Report 201229

About ZEON GroupAt ZEON, we strive for innovative and revolutionary new technology that does not imitate others and cannot itself be imitatedwhile pursuing continuous improvement of our core strengths. Our ultimate aim is to establish a leading presence in society.

ZEON Corporation

ZEON Group

Corporate Profile

Major companies in Japan

Company Name ZEON Corporation
ProfileApril 12, 1950
Capital24.2 billion yen (as of March 31, 2012)
Employees	2,857 (Consolidated) 1,613(Non-consolidated; as of March 31, 2012)
Head office	Shin Marunouchi Center Building,
1-6-2 Marunouchi, Chiyoda-ku,
Tokyo 100-8246, Japan
Tel: +81-3-3216-1772
Fax: +81-3-3216-0501
Operations	Takaoka Plant, Kawasaki Plant, Tokuyama
Plant, Mizushima Plant, R&D Center● ZEON Kasei Co., Ltd.
● ZEON Polymix Inc.
● ZEON Medical Inc.
● ZEON North Co., Ltd.
● Tokyo Zairyo Co., Ltd.
● RIMTEC Corporation● ZEON Yamaguchi Co., Ltd.
● ZEON Chemicals Yonezawa Co., Ltd.
● Optes Inc.
Major companies overseas● ZEON Chemicals L.P. (USA)● ZEON Chemicals Europe Ltd. (UK)● ZEON Chemicals (Thailand) Co., Ltd. (Thailand)● ZEON Advanced Polymix Co., Ltd. (Thailand)

ZEON’s Businesses
ZEON’s extensive range of products
occupies a commanding position,
particularly in international markets.
These include synthetic rubber designed
specifically for timing belts and othersafety-critical components in automobile
engines, green note aroma chemicals(leaf alcohol) for perfumes and foodflavors, and environmentally soundproducts such as lightweight,
transparent cycloolefin polymer resins
and etching gases for semiconductorsthat do not damage the ozone layer.

Elastomer Business
Sales and manufacturing of synthetic
rubber, synthetic latex, and chemical
products (C5 petroleum resin,
thermoplastic elastomer, etc.)
Specialty Material Business
Sales and manufacturing of chemicals(aroma chemicals, specialty chemicals,etc.), imaging materials (electronics
materials, toner products, etc.), specialty
plastics (Cyclo-olefin polymer andprocessed products, etc.)

Other Businesses
RIM combination liquid and molded
items, medical equipment materials,
butadiene extraction technology,
packaging and distribution materials,
building and construction materials, etc.

Financial Results
Sales Share (FY2011)(in billionsof yen)Other
Businesses

14.7％

Specialty
Material
Business

18.2％

262.8

Consolidated Net Sales

300
Elastomer
Businessbillion yen

67.1％

ZEON Group CSR Report 2012

■Consolidated Net Sales

302.9

268.9
225.9

270.4 262.8

200(in billionsof yen)

30
20

100
0

30

Operating income, Ordinary income■Operating income ■Ordinary income

35.3 33.6 32.1
31.5
25.3
20.6
9.3 9.4

10
2007

2008

2009

2010

2011 FY0

2.9 3.8
2007

2008

2009

2010

2011 FY

Content Available in the Online Report
The online version of this CSR Report, available on ZEON’s website, offers moredetailed information on activities featured in this brochure. The chart below outlines
the website version while noting sections that are only available online.
CSR Section of ZEON’s Website

http://www.zeon.co.jp/csr_e/index.html
Home > CSR Activities●：Included○：Some content is only available online (parts in bold)

Contents
President’s Message
Promoting CSR with the New Mid-Term Management Plan, SZ-20 / Remaining Vital to Society / Future Initiatives
This illustration shows the more familiar places in which ZEON products are used. Take a look and you might be“ZEON’s Businesses: Surprisingly ZEON: ZEON is All Around Us!”
surprised to find ZEON right under your noise or even your feet!
Special Feature: Stakeholder Dialogue
External experts joined us in reflecting on the meaning of CSR and how companies can best serve society

Environment

Management

ZEON’s CSR

Page Title

ZEON’s CSR

Corporate Philosophy / ZEON CSR Policy / CSR Code of Conduct−：Not included
Web

Brochure

●

●

●

●

●

●

●

●

●

－

SZ-20 Enterprise Blueprint and CSR Management
New Mid-Term Management Plan SZ-20
Key Initiatives for Implementing CSR Activities: CSR
CSR Matrix / CSR Core Projects
Matrix and CSR Core Projects
Response to Great East Japan Earthquake and Tsunami Disaster Monetary Donations / Supplying Much-Needed Electricity / Efforts to Save Energy

●

●

●

○

CSR Management

CSR Management / CSR Promotion Structure●●

CSR History

CSR Activity Time Line●－

Corporate Governance

●

●

●

●

Auditing

Basic Policy / Corporate Governance System / Board of Directors, Executive Committee and Board of Corporate Auditors
Risk Management and Compliance System / Risk Management and Compliance System (Chart) / The activities ofeach committee and subcommittee / Internal Reporting System
Auditing at ZEON Corporation and Group Companies / Auditing at Internal Plant●－

Public Relations

Organization and Objectives / Information Disclosure / Advertising●－

Environmental Philosophy

Philosophy and Policy for Environmental and Safety Activities / Environmental Philosophy / Responsible Care Policy●●

Environmental and Safety Management

Overall process of environmental and safety management / Auditing●○

Overall Environmental Impact

Overall Environmental Impact●●

Targets and Results

Review of 2011 Targets and Results

Risk Management and Compliance●●

The Economic Aspects of Our Environmental Performance Policy / Environmental Protection Costs / Environmental Protection Effects / Environmental and Safety Investment
Reduction of Greenhouse Gas Emissions and Energy Conservation Efforts to Reduce Greenhouse Gas (CO2) Emissions / Efforts to Conserve Energy / Efforts at the Head OfficeChemical Substances Management
PRTR Initiatives / Reduction of Hazardous Chemical Substance Emissions into the Atmosphere●●Air, Water and Waste
Environmental Performance in Logistics

●

○

●

○

Air and Water Pollution Prevention / Reduction of Industrial Waste●－

Environmental Countermeasures for Logistics●－

Safety Philosophy

Philosophy and Policy for Safety and Environmental Activities / Safety Philosophy / Responsible Care Policy●●

Targets and Results

●

●

●

－

●

－

●

－

●

○

Quality Assurance (Relationship with Customers)

Review of 2011 Targets and Results
Policy (Doing all we can to prevent workplace accidents and protect the safety and health of allplant workers) / History of Workplace Accidents at ZEON Corporation (Lost-Time Accident Rates) /5S Safety Audits / Risk Assessment (Kiken Yochi) / Identifying Near-Miss Incidents
Policy / Dialogue between Management and Plants / President-Led Efforts to Promote Safety
Management / Obtaining Safety Inspector Certification at all Sites / Improving Plant Safety /Accidents and Injuries in Fiscal 2011 / Emergency-Response Training
Logistics Safety
Systematic Safety Training / Training Organized by the Head Office / Environmental and Safety Education andTraining Programs Organized by Operating Sites
VOICE / Quality Assurance System / Quality Assurance Mechanisms / Efforts to Ensure Product Safety●○

Relationship with Suppliers

Policy●●Relationship with Shareholders and Investors

Communication with Shareholders / Communication with Investors●●

Basic Policy

Basic Policy (Striving to be An Enterprise where All Employees Can Feel Pride in Their Work)●●

Human Resource Development

Policy (Encouraging Employees to Think Independently and Adapt to Achieve High Goals) / Education andTraining Structure / ZEON’s Ippeki Facility (training site) / Monozukuri Training Center●○

Personnel System

Policy (Human Resources System that Gives Employees a Sense of Challenge and Achievement) / Employee Performance Appraisal System /Communicating and Sharing the Appraisal Process / Bonus Linked to Results / Awards system (ZEON Challenge Award) / ZΣAllowance / ZEON Master System (Reemployment System) / Severance Pay System / Compensation System for Invention Patents

●

○

●

○

●

－

SafetyOccupational Safety
Safety and Accident Prevention
Safety in Logistics

Relationship with Employees

Safety Training

Creating Workplace Environments that Protect Human
Rights and Health
Employment and Diversity

Respecting Human Rights and Prohibiting Discrimination / A Comfortable Working Environment that Values Dialogue /Working Environment Development Policy / Programs and Efforts to Realize Comfortable Working Environments /Support for combining work and childcare / Support for combining work and family care / Enhancing workplaceenvironments, encouraging dialogue, and supporting self-reliance / Labor Agreements and Communication between
Management and Employees / Dialogue with management / Complaint Processing / Health Management Initiatives
Basic Information on ZEON’s Workforce / Hiring in 2012 / Employing People with Disabilities /Reemploying Retired Employees / Outstanding Performance by Female Staff Members
Relationships with the Local Community / Furukawa Scholarship / Recognition from Society / Supporting Disaster Rescue and Reconstruction●●

Site Reports●－

Third-Party Opinion●●

Content Indexes for GRI 3.1●－

ISO 26000 Content Index●－

Contents Available in the printed brochure and Online Report●●

Glossary

●

－

●

●

Relationship with Society

Report Policy

Report Policy / Period Covered / Organizations Covered / Notes on the Report

ZEON Group CSR Report 201231

Inquiry: ZEON CORPORATION CSR Promotion Department
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-0603 Fax: +81-3-3216-0604 http://www.zeon.co.jp/index_e.html