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CSR REPORT 2015

OPEN

About

CSR REPORT 2015

About CSR Report 2015

PurposeThis report (CSR* Report 2015 Print Version) was created to share Yokohama Rubber Group’s approach, activities, andcommitment to “to build a trusted identity as a contributing member of the global community” to each of its
stakeholders in a concise and clear manner.
In addition to this report, Yokohama Rubber Group’s policies as well as its approach, orientationand performance with regard to CSR can be found on its CSR website, which contains a host of
information compliant with GRI Guidelines Ver. 4 about the progress of Yokohama Rubber Group’s CSR
activities. We invite you to review this website together with the print version.

CSR website

Yokohama Rubber Group’s CSR and Important Issues (Materiality)
Yokohama Rubber Group is committed to the Ten principles of the UN Global Compact and carries out thePlan-Do-Check-Act (PDCA) cycle following the framework of ISO 26000*.
The Ten Principles of the UN Global Compact
Human Rights

Anti-Corruption• Principle 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; and• Principle 2: make sure that they are not complicit in human rights abuses.

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

Labour• Principle 3: Businesses should uphold the freedom of association and theeffective recognition of the right to collective bargaining;• Principle 4: the elimination of all forms of forced and compulsory labour;• Principle 5: the eff¬ective abolition of child labour; and• Principle 6: the elimination of discrimination in respect of employment andoccupation.

Environment• Principle 7: Businesses should support a precautionary approach toenvironmental challenges;• Principle 8: undertake initiatives to promote greater environmental
responsibility; and• Principle 9: encourage the development and di¬ffusion of environmentallyfriendly technologies.

ISO26000 Seven Core Subjects
1

Organizational governance2

Human rights

3

Labour practices

4

The environment

5

Fair operating practices

6

Consumer issues

7Community involvementand development

Yokohama Rubber addresses CSR in a wide range of ways. Starting in 2014, we have identified themes of particularsignificance for both our company and our stakeholders and carried out activities with priority rankings assigned basedon these themes. Those themes that the company should fulfill for each stakeholder, including the environment, local
communities, customers, shareholders/investors, business partners and employees, have been compiled into
Yokohama Rubber’s important issues (Materiality).
 The environment:

We challenge to build a sustainable society in harmony with the environment, to protect our blue planet
and human beings.

 Local communities:

We build a trusted identity as a contributing member of the global community by making contributions
to the development and prosperity of local communities.

 Customers:
 Shareholders/investors:
 Business partners:
 Employees:

We supply safe and secure products through manufacturing focused on the heart and technology.
We improve our company value by growing business opportunities.
We promote CSR activities throughout the value chain.
We value and develop our people, and and create opportunities for people.

This report highlights examples of activities being implemented to solve these issues, while also presenting thethoughts of employees and messages from stakeholders.

*Please utilize the glossary provided on the next page.
01

Corporate Philosophy (CSR Management Vision and Action Guidelines)

Corporate Philosophy (Launched in 1990)
Basic Philosophy
To enrich people’s lives andcontribute to their greater happiness
and well-being by devoting ourwholehearted energies and advanced
technology to the creation of beneficial products.

Corporate Philosophy / CSR and Environmental
Management Promotion System

CSR Management Vision (Launched in 2008)
To build a trusted identity as a contributing memberof the global community.

CSR Action Guidelines Identify continually changing social trends.

 Act swiftly to earn affirm trust.

 Ascertain the items that can contribute.

 Practice CSR in one’s own work.

Yokohama Group Action Guidelines (Updated in 2014)
1. We shall respect human rights inside and outside
the company
2. We shall create workplaces that are safe and healthy

5. We shall conduct corporate activities with a hightransparency and practice proper disclosure of
information

3. We shall harmonize our activities with the global
environment

6. We shall observe not only laws and regulations
but also social norms

4. We shall provide safe and high-quality products
and services

7. We shall aspire to harmony and prosperity withlocal communities

CSR and Environmental Management Promotion System
Twice a year, we hold a CSR* Council, chaired by the Chairman and CEO; and an Environmental Council, chaired by the
President, in order to plan and review CSR issues that Yokohama Rubber Group should be addressing. Matters that affectmanagement are reported to the Executive Committee for approval.

Board of Directors
Representative Director
Corporate Social
Responsibility Division

CSR Promotional Structure
Environment Council
Central Safety and Health Committee

Information Security Committee

Personal Information Protection
Management Committee

Export Control Committee

Risk Management Committee

Central Disaster Prevention Council

Tire Production Environmental Task Force

Deliberative Bodies by Business Segment

Head: Head of Tire Production Technology Division

MB Production Environmental Task Force

Head: Managing Corporate Officer, Multiple Business Production
and Technology

Head Office and Sales Subsidiary CSR &Environmental Task Force

Head: Head of Corporate Social Responsibility Division

Subsidiary Production Environmental Task Force

Chairperson: General Manager, CSR & Environmental Affairs
Department

Global Environmental Council

Chairperson: Head of Corporate Social Responsibility Division

Chemical Substance Management Committee

Deliberative Bodies by Functional Segment

Chair: Managing Corporate Officer, Multiple Business Production
and Technology

3Rs Committee

Chair: Head of R&D Center

Global Warming Countermeasures Committee

Chair: Head of Tire Production Division

Environmentally Friendly Product Committee

Chair: General Manager, Consumer Tire Development Division

Yokohama Forever Forest Committee

Chair: Head of Corporate Social Responsibility DivisionCorporate Compliance Committee

Chairperson: Chairman and CEO

Environmental Promotional System

CSR Council

Chairperson: President

CSR & Environmental
Affairs Department

CSR Report Editorial GroupInternal Audit Department

Corporate Officer/
Operating Departments¢CSR and environmental management promotion framework (as of April 1, 2015)

02

TITLE:CSR Glossary

CSR (pages 1, 2, 9, 10, 12, 20, 21, 22, 26, 27, 28)

achieving fuel efficient tires and improving the rolling

An acronym for corporate social responsibility. At

resistance of tires in both the front and rear directions.

Yokohama Rubber, we view CSR ----as the trust placedin a company by society. Toward that end, we areISO 9001 (page 8)

working to build a trusted identity as a contributing

An international standard on quality management

member of the global community.

systems established by ISO.

Stakeholder (pages 1, 8, 10, 25, 26, 28)

ISO 14001 (page 8)

The individuals, groups and concerned interests with a

An international standard on environmental

stake in the activities of a company or any othermanagement systems established by ISO.

CSR Glossaryorganization.
 Compliance (pages 8, 20, 25, 26)

UN Global Compact (pages 1, 8, 20)

The act of abiding by laws, regulations, and social

A voluntary initiative in which companies participate innorms.

a worldwide framework for realizing a sustainable
society by taking action as a good corporate citizen

 Supply chain (pages 9, 10, 18)

through creative and responsible leadership.

The series of activities or stakeholders providing
products and services to an organization.

ISO 26000 (pages 1, 8, 20, 25, 26, 28)
A set of guidelines created by the International

Value chain (pages 22 , 25)

Standards Organization (ISO) on the social

The overall series of activities or stakeholders providing

responsibilities of companies and other organizations.

or receiving value in the form of products or services.

GRI Guidelines (pages 1, 20)

5S methodology (page 24)

International guidelines on sustainability reporting for

The 5S stand for sort, systematic arrangement, shine,organizations.

standardize, and sustain. These activities aim to keep
the workplace neat and clean, improve employee

PDCA (pages 1, 24, 28)

morale, increase work flow efficiencies, and prevent the

A method for continually improving operations

occurrence of defects or trouble, and improvethrough the repeated cycle of plan, do, check and act.

workplace safety.

Medium-range Management Plan (GD100)

Near misses (page 24)(pages 8, 9, 10, 19, 20)
Grand Design 100 is the name of the medium-range

A near miss that potentially could have lead to aserious disaster or accident.

management plan launched by the Yokohama Group in
fiscal 2006. The 12-year plan spans until fiscal 2017

Safety Worker (page 24)

when the company will celebrate its 100th anniversary

An individual with accreditation in safety skills basedand comprises four phases. Fiscal 2015 to fiscal 2017 ison the company’s rules.

Phase 4, the final phase of the plan.

Standard Operating Procedure (pages 24, 27)
Wet grip (page 8)

Helps employees to work efficiency, safely and with

Wet grip indicates the braking force of tires on a wet

surety.

road surface. This is a key performance indicator for03

Yokohama Rubber Group at a Glance (as of December 31, 2014)
The Yokohama Rubber Co., Ltd.

Number of Shareholders

9,349

October 13, 1917

Number of Shares Issued
and Outstanding

342,598,162

Paid-in Capital

JPY 38,909 million

120

Net Sales

JPY 625,245 million (consolidated)

Number of Consolidated
Subsidiaries
Number of Affiliates Accounted
for by the Equity Method

Fiscal Year End

December 31

Stock Exchange Listings

Tokyo and Nagoya

Chairman and CEO and
Representative Director

Tadanobu Nagumo

President andRepresentative Director

Hikomitsu Noji

Our Worldwide Locations

Japan, the USA, Canada, Australia,
Germany, the Philippines, Vietnam,
China, Thailand, Russia, etc.

Head Office36-11 Shimbashi 5-chome, Minato-ku,
Tokyo, Japan 105-8685

Websitehttp://y-yokohama.com/global/

Number of Employees

21,441 (consolidated)

Company Name

Yokohama Rubber Group at a Glance

Establishment

1 Main Products
Tires
Yokohama Rubber manufacturers a wide range oftires, tubes, aluminum foil and automotive
components for passenger vehicles, trucks andbuses, light-duty trucks, construction vehicles, andindustrial vehicles

Industrial products
Yokohama Rubber supplies conveyor belts, rubber
plates, fenders, oil-spill containment booms, marine
hoses, molds, air springs, highway joints, rubber
bearings, water repellency materials, laminatedrubber for seismic isolation, water stopping
materials, sound and vibration proofing products,
adhesives, sealants, coatings, encapsulating
materials, welfare products (aero-cell cushions forwheelchairs)

Other
Aerospace components (laboratory modules, watertanks, couplings), electronic materials (hardcoatings, high thermal conductivity materials,
sealants for solar cells, LED encapsulating
materials), sporting goods, information processing
services, real estate leasing International Presence

Tire production sites

Tire sales sites

Industrial products production sites

Other Net Sales and Net Income (consolidated) Total Assets and Equity Ratio (consolidated)

Net Sales

Total Assets

Net Income of the Period

Net sales

Net Income of the Period(JPY billion)(JPY billion)

700

625.2 40.5

600
500

519.7
465.1

559.7
32.6

601.6
35.0

13.9

600

15

11.6

100
0

700

35

20

300
200

40

25

2010

2011

2012

2013

2014 (FY)

Equity Ratio(JPY billion)

800

500

 Number of Employees (consolidated)

Equity Ratio

Total Assets

45

30

400

04

Industrial products sales sites

41.4
37.5
34.2
478.9

32.3
501.8

653.6

（％）

(Persons)

44.1

45

25,000

734.5

40
35

543.8

30
25

400

20

300

15

10

200

10

5

100

5

0

0

2010

2011

2012

2013

2014 (FY)0

20,00018,465

19,272 19,412 19,770

21,441

15,00010,0005,000
02010 2011 201220132014 (FY)Message from the Chairman

Message
Since its establishment in 1917, The Yokohama Rubber Co., Ltd. (YRC) has
introduced numerous products including tires, industrial products and golf
products. Intent on enriching and contributing to the lives of every customer
as well as society as a whole, YRC is investing all of its energies in all
production, sales and technology development processes.
This is an ongoing process within the YOKOHAMA Group both inJapan and across the globe.
We must earn an even more solid reputation worldwide in order to achieve
further growth as a global company. In doing so, corporate value could well beconsidered the most concrete benchmark. I believe that the mission of amanufacturer is to “deliver the best products at competitive prices and ontime,” which will in turn contribute to enhancing our corporate value.
Needless to say, the foundation for this mission requires the utmost attention
to “safety” and the “environment.” We will imbue the leading technologies ofevery era with the passion of each and every member of the YOKOHAMAGroup and contribute to the greater happiness and well-being of individuals,
society and the world.

Tadanobu Nagumo
Chairman, CEO and Representative Director

05

Contents
07

01

02

05

About
CSR Report 2015

Corporate Philosophy /CSR and Environmental
Management
Promotion System

Message from the
Chairman

03

04

06

CSR Glossary

Yokohama
Rubber Groupat a GlanceContents / Information Map

Stakeholder
Dialogue

12

Toward the
Final Phase of

Striking a balance between
CSR and business operations

11

25

TopicsActivities Reportfollowing
ISO 26000

27

28

Response toThird-Party
Opinionin CSR report 2014

Third-Party
OpinionInformation Map

SpecialFeatureYokohama Rubber’s Important Issues

13 For the global environment
15 Together with local communities
17 Together with our customers

19 To our stakeholders and investors
21 Together with our business partners
23 Together with our employees

Contents / Information Map

09

Message from the President
Yokohama Rubber’s Important Issues for Earning theTrust of Society for its Next 100 Years of GrowthHighlighting the information published on Yokohama Rubber’s corporate website
1 Products Information
Delivers information about product features and specifications,
including tires, industrial products, and sporting goods

1

2

3

4

5

2 Investor Relations
Presents investor relations information about management
plans, growth strategy and earnings

Corporate website

3 CSR
Provides information about ESG policies, activities and progress
4 Corporate Information
Highlights the corporate philosophy, company profile andgovernance structure
5 Careers
Showcases career opportunities at Yokohama Rubber and its
group companies
06

M E S SAGEFROM THE

Message from the President

PRESIDENT

Yokohama Rubber’s Important Issues
for Earning the Trust of Society
for its Next 100 Years of Growth
Hikomitsu Noji
President and Representative Director07Ushering in the Phase IV of Medium-termManagement Plan Grand Design 100 (GD100)

Leveraging Our People and Working with
Communities to Accelerate Growth Globally
To expand in global markets, we need to carefully examine
the unique traits and characteristics of each. We cannot
simply push Japanese style beliefs and approaches on suchmarkets while ignoring obvious differences in businesspractices. It is critical that we set out the necessary rules
while respecting the culture of each region. When opening
a new location, we always base our actions on the UN
Global Compact* and ISO 26000* in order to establish acommon ground. For procurement as well, we ensure that
we buy primarily from business partners that haveobtained ISO 9001 or ISO 14001 certification. When wemust engage in business with companies that do not have

Message from the President

As we move toward our centennial in 2017, Yokohama
Rubber is working to establish a distinctive global identify
in building corporate value and a strong market presence.
Toward this end, FY2015 marks the beginning of Phase IV(FY2015 to FY2017) of GD100*, the final phase of themedium-term management plan.
During the three-year period of Phase III (FY2012 toFY2014), which aimed for “robust and responsive growth,”
we made steady progress with the development andexpansion of our worldwide tire production system. Using
this foundation, in FY2015 we will concentrate further
efforts on cultivating overseas markets in the United States,
Europe, China and Russia, among others. Our lineup of fuelefficient tires that offer great wet grip performance coupledwith reduced rolling resistance represent one of ourgreatest strengths. We need to fully harness this lineup to
capture demand around the world and steadily increase
our market share not only for after-market replacement
tires, but also for new vehicle tires.
Today, creating products with excellent environmental
performance has become second nature and going
forward we will need to continually deliver even greater
added value. We will look to develop tire products thatplease drivers with a more enjoyable driving experienceand peace of mind. Key to these efforts will be aggressive
investments in future-oriented R&D. Safety is also of theutmost concern because tires affect lives. In 2014, we
initiated a recall of BluEarth AE-01 tires in 38 countries
mainly in Europe. Safety and quality initiatives cannot be
overdone. We will assume nothing and work to find thecause so that we can prevent any and all reoccurrences. We
are committed to using lessons learned from this recall forthe future.
Our business environment continues to change sharply,
as symbolized by the depreciating yen, fluctuating raw
materials costs, the ups and downs of economic conditions
in each country, and the rise of emerging manufacturers.
We will work to realize further growth by leveraging ourability to analyze macro and micro economic conditions aswell as identify new trends as they emerge.

these international certifications, we will carry out audits
under our own responsibility. It will also be important tocreate an accounting system that links contracts andpayments to eliminate any possible room for fraud or othercompliance* improprieties.
We will also continue to system our business operations
to improve efficiency. Establishing an ability to centrally
manage data globally for human resources and finance aswell as ESG is an urgent task we have to address toaccelerate our overseas expansion. Furthermore, we will
eliminate jobs dependent on individual skills or expertiseto every extent possible. We will try out best to automate
work that does not produce added value and dedicate
more time to working with our customers.
Ultimately, I believe our people are the driving force
behind all corporate activities. It is important to develop
our people through safety, environmental, quality andcompliance activities and excellent products are most often
produced during the process of personal growth. Our goal
is to become a company where every employee is proud towork and where people believe its employees are highly
talented and trustworthy. To continue our global businessexpansion, we will need to foster a corporate culture thatembraces diversity and transcends differences innationality, culture or religion. We will focus on developing
leaders who are highly mobile and can drive our businessforward regardless of location.

Enhancing Corporate Value and Addressing
Important Issues in Ways Only Yokohama
Rubber Can
In FY2014, we established a number of company-wideimportant issues for each stakeholder* to be addressedwith priority by the entire Yokohama Rubber Group andinitiated specific activities for each. These are important
issues for each stakeholder, including the environment,
local communities, customers, shareholders/investors,
business partners, and employees and they must be
addressed with certainty within the framework of GD100.
FY2015, which marks the start of the final phase of
GD100, is a year in which we need to get off to a good start
aimed at the next 100 years in our company’s history. Our
mission of creating high quality products with the least
amount of resources and energy as possible will continue
to become even more important as we move forward. As isthe case where some of our plants have started making
tires based on local road conditions, it is essential that we
continue to respond to the needs of each market. Each of
our business sites will seek to harness its uniqueness tohelp us expand into a company beloved within theirrespective region.
We will now turn our attention toward promoting a
Yokohama Rubber approach to manufacturing thatleverages the collective strengths of the entire group to
focus on the customer in all aspects of business. We willcontinue to build our brand value and establish a presence
as a corporate group truly indispensible to society like noother.

08

Stakeholder
Dialogue

Toward the
Final Phase of

Stakeholder Dialogue

Striking a balance between
CSR and business operations

Outside Expert

The Yokohama Rubber Co.,Ltd.

The Yokohama Rubber Co.,Ltd.

Outside Expert

Ms. Mariko Kawaguchi

Ichirou Suzuki

Fumio Morita

Mr. Hideto Kawakita

Chief Researcher
Research Division
Daiwa Institute of Research Ltd.

Associate Corporate Officer
CSR & Environmental Affairs Department
CSR Division

Director and Managing Corporate Officer
Head of CSR DivisionInternational Institute for
Human Organization and the Earth(IIHOE)

Actions Needed to Achieve More Strategic CSR
Yokohama Rubber is currently implementing its medium-term

Affairs Department, stated, “I feel strong pressure to satisfy the

management plan called Grand Design (GD) 100*, which leads theinformation requests that come in from our customers. I believe

company to its centennial celebration in FY2017. To mark the start

we need to effectively use this pressure to provide a spark towardof the Phase IV, the last phase, Yokohama Rubber has identified

making our own changes.” Suzuki also explained how Yokohama

materiality (important issues) it must address in order to balance

Rubber is already undertaking studies on water risk and human

CSR* with its business activities.

rights issues on a worldwide scale given its recognition that its

The objective of this year’s stakeholder dialogue is to revisit
Yokohama Rubber’s strategic approaches to CSR going forward

Mr. Kawakita pointed out the importance of producing value

utilizing outside perspectives. Mr. Hideto Kawakita of International

through proactive CSR based on a clear understanding ofInstitute for Human Organization and the Earth and Ms. Mariko

materiality. Ms. Kawaguchi spoke about the perspectives that

Kawaguchi of Daiwa Institute of Research Ltd. joined this year’s

investors use to evaluate ESG information, based on her stance as

dialogue session to views based on their broad perspectives.

a professional in the field of socially responsible investing.

At first, the dialogue recognized that automakers, who are theAfter hearing these views, Fumio Morita, Director andmain customers of Yokohama Rubber, are stepping up their

Managing Corporate Officer in charge of CSR, stated, “We need tooversight of the supply chain*, including Yokohama Rubber, tocreate a future roadmap for what and how to rollout CSR

ensure thorough compliance with their environmental, social andinitiatives that are broad reaching and unique to Yokohama

governance (ESG) initiatives, which in turn has drawn greater

Rubber. Going forward, we will emphasize dialogue with outside

attention to ESG information globally.

stakeholders to promote CSR that is consistent with our business

Ichiro Suzuki, head of Yokohama Rubber’s CSR & Environmental
09

activities have a large impact on society.

activities.”

Main Opinions and Recommendations from Outside Experts

Opinions from
Ms. Mariko Kawaguchi— Broadly Share the Importance of Using Resources Effectively
Recently, companies have tended to focus only on reducing CO2
emissions when it comes to their environmental initiatives, buteffective use of resources is also a theme that should not be
overlooked. Reducing the amount of raw materials used andincreasing the rate of recycling will address cost issues as well as
support the continuity of the business through raw materials
acquisition. In particular, Yokohama Rubber, as a tire manufacturer,
faces the major challenge of securing stable supplies of natural andsynthetic rubber. I hope you can share the importance of pursuingresource efficiency with consumers in an easy-to-understand manner.
— Accept Accountability as a Multinational Corporation
The more broadly a company’s businesses are globalized, the further
you get from being able to say that doesn’t involve us when it comesto problems or suspicions. As a multinational corporation, Yokohama
Rubber must be prepared to deal with every type of voice when it
comes to CSR. Automakers, which are your main customers, havealready firmed up this stance and they prefer to do business withcompanies in the supply chain that are doing the same thing.
Also, Yokohama Rubber continues to expand aggressively under
GD100, with particular emphasis given to M&A strategy. It will be
important to evaluate, with greater certainty, the companies you will
be working with from an ESG perspective, in order to fully understandthe hidden risks with these companies.

— Increase Transparency for the Disclosure of ESG Information
External pressure about ESG compliance will only continue to growgoing forward. Instead of responding as an individual company to therequests of automakers as they are made, Yokohama rubber needs to
set up a system that first and foremost understands the consumer,
investor and society, which are found further downstream.
In many cases, automakers do not demand their business partners
to be engaging in advanced ESG initiatives at the current point intime. Instead, they want business partners to make it clear theirprogress as of today using thorough visualization. This makes
increased transparency one of the major issues of late.
— Make Contributions to the Value of Safety
CSR should not be viewed as something to carry out from a defensive
posture to combat risk. CSR should focus on producing value using aproactive approach. For example, Yokohama Rubber’s tire businessprovides the two values of reduced environmental impacts andimproved safety. In particular, safety is a very important value for the
automotive industry given the reality that the largest cause of deathin the world among those age 15 to 30 is traffic accidents.
Contributing the improved accuracy of vehicles’ driving, turning andstopping has direct, positive impacts on society, so it is important toappeal this fact.

Stakeholder Dialogue— Deepen Company-wide Understanding of CSR
The question “Why?” should be examined more in-depth within
Yokohama Rubber because this needs to be answered before CSR
initiatives are officially initiated. Making an effort because a corporate
customer asked for ESG information without understanding theimportance or background more than likely will end in paperworkthat simply reports predetermined matters in form alone. Whenever
you start a new environmental activity, it’s essential that each andevery employee begins to think about how protecting forest
biodiversity in a faraway country can come back to affect thecompany’s business activities.
Upon implementation, it is important to strike a balance between
the accountability of departments in charge of each material issue
and management’s commitment to linking initiatives organically. In
recent years, stronger emphasis has been given to the latter, so I
would like Yokohama Rubber to be mindful of this when disclosing
information.

Opinions from
Mr. Hideto Kawakita— Specify the Scope of Materiality (important issues)
It is extremely important to specify just who your definition ofmateriality is for. Simply put, if you say “customers,” this actually entails
a wide swath of possibilities, so greater detail and specification isnecessary. To become a company that is continually selected bysociety over the long term, you will need to think about priorities
based on the vantage point of which customers you will emphasize.
In the case of Yokohama Rubber, perhaps you should think firstabout seniors living in the Tohoku Region as your target. In a society
where depopulation and aging is picking up speed, seniors needaccess to safe and secure mobility options and this importanceincreases particularly in areas where there is snowfall. Continually
supporting senior drivers in Tohoku is a very significant initiative interms of gaining contact with society and users through safety.

Response from Yokohama Rubber

Response from Yokohama Rubber

Shifting Business Activities to Provide Value Requiredby Stakeholders*

Fully Conveying Yokohama Rubber’s Philosophy andCultureOne of Yokohama Rubber’s most important missions is to provide
products and services packaged together in support of traffic
conditions in regions and the lifestyles of each age group. For
this reason, we will look to develop products and services thatincorporate our strengths of material recycling technology anddesign technology that seeks to balance safety with drivability.
At our production sites with water risks, we will protect
biodiversity and move forward with activities that integrate ourbusiness activities with CSR so that we can contribute to thesustainable growth of our business and local communities.

We believe in the importance of sharing the fact with allshareholders that we engage in business activities following theaction guidelines based on our philosophy and culture createdover the last 100 years. Toward that end, we will work with thoseoutside the company to determine the path Yokohama Rubber
should take, while also bolstering transparency and governance.
We will continue to offer more ESG information so that
achievements of these activities can be recognized as long-term
corporate value.

10Consolidating
our growth potential
TOPICS

Topics1

Consolidating YOKOHAMA’s potential
to pioneer the next 100 years

Winning the Trust of Automobile Manufacturers All over the World

We will continue to provide our fuel-efficient “BluEarth” tires to
consumers around the world, so that they may continue toenjoy driving with peace of mind. The technology behind our“BluEarth” tires earned credibility in the marketplace bysatisfying both maximum fuel efficiency and wet grip capacity,and the tires have been used widely, in private cars and buses
as well as in trucks and construction vehicles.
In the ground transportation industry, the increased
dependence on automobiles associated with the expected

population growth has made the further reduction ofcarbon-dioxide emissions an increasingly challenging issue, andthe installation of fuel-efficient tires is strongly desired. While
the standards for endurance and safety have become
increasingly strict, our products meet those requirements andhave been adopted by many automobile manufacturers. We
will continue to improve the environmental performance of our
products.

Message from the person in charge
In terms of tire uniformity (weight balance) in general, the qualityof our tires is at the top of the industry. The speed of our
new-product development is also highly regarded. Our delivery of
SL class products for Daimler AG is a prime example of theconfidence in our tire technology, as the performance of our tires
must match the performance of vehicles on which they are used.

Our Onomichi Plant, which produces large-size tires forconstruction machinery, was granted the Platinum certificate, thehighest certificate in Caterpillar Inc.’s Supplier Quality Excellence
Process (SQEP), for the third consecutive year, in recognition of our
production capacity and distribution service network, as well as
the global provision of our products and services.
Left:

Mr. Mathias Fink

YEU General Manager OE Business

TOPICS

2

Mr. Andrew Zeisser
YTC OE Director

Right: Mr.Tsuyoshi Johnson
YTC Manager
OE Accounts

International Public Relations and Our Social Contributions

We signed a sponsorship agreement with the prestigous
CHELSEA Football Club in the English Premier League, because
we feel agree with their approach as a sports team thatencourages both each member’s day-to-day efforts to improve
his skills and the teamwork necessary to play fair games against
competitors.
Following the example of the Chelsea FC, will also continue
to “play fair games” in a variety of arenas, beginning with motor
sports.

Chelsea FC established The Chelsea Foundation in order topromote Football as a way of addressing various social
problems, such as education, character building, and crimes byyoung people. The Chelsea Foundation supports more than 1
million children and young people in more than 30 countries
worldwide every year. We also support their activities andcontinue to conduct community support activities with Chelsea
FC as a good partner.

A commemorative photo taken in Stamford Bridge, the home stadium ofChelsea FC. From right to left: José Mourinho, the manager of Chelsea FC; John
Terry, the captain of Chelsea FC; Tadanobu Nagumo, Chairman and CEO and
Representative Director, Yokohama Rubber; and Hideto Katsuragawa, Director
and Corporate Officer, Yokohama Rubber.

11

Special
FeatureYokohama Rubber’s
Important Issues

Together with Local Communities

Yokohama Rubber addresses environmental issues bydeveloping and providing sustainable products.

Yokohama Rubber addresses community issues byconducting locally-oriented activities that value theimportance of communicating with local communities.

Together with Our Customers

To Our Stakeholders and Investors

Yokohama Rubber addresses customer concerns byprofessionally delivering safe products and services to ourcustomers.

Yokohama Rubber addresses issues of stakeholder concern
by sharing value among various group employees in orderto improve the company’s value together as a team.

Together with Our Business Partners

Together with Our Employees

Yokohama Rubber addresses CSR* issues by implementing
workshops, awards programs, and site visits.

Yokohama Rubber addresses employee issues by creating asafe working environment using our original approaches.

Special Feature:
Yokohama Rubber’s Important Issues

For the Global Environment

12Special Feature:
Yokohama Rubber’s Important Issues

Yokohama Rubber’s
Important Issues

For the Global Environment
Yokohama Rubber addresses environmental issues bydeveloping and providing sustainable products.

13

We challenge to build a sustainable society
in harmony with the environment, to protect
our blue planet and human beings.
We aim to support the hydrogen energy society of the future with
our high-pressure hydrogen gas hoses
015 marks “the first year of hydrogen,” the year when the

2 full-scale market deployment of hydrogen fuel cell vehicles

Special Feature:
Yokohama Rubber’s Important Issues(FCVs) began. Because emission-free, energy-efficient FCVs are
considered to be the ultimate eco-cars, the development ofhydrogen stations is assumed to be one of the priorities ofinfrastructure development across the country. Yokohama Rubber
has been working on the development of the hoses necessary forsupplying high-pressure hydrogen gas to FCVs.
In accordance with the recent adoption in Japan of the “Global
Technical Regulations (GTR) for hydrogen and fuel cell vehicles” andthe subsequent revision to Japan’s safety regulations for containers,
it is now possible in Japan to provide hydrogen to FCVs at theinternational standard of 87.5 MPa, so that appropriate hoses
corresponding to the new standards are required. An enhanced
development team at Yokohama Rubber has been working on thedevelopment of 87.5MPa-compatible hoses as required by current
regulations, under a project commissioned by the New Energy andIndustrial Technology Development Organization (NEDO).

Under a joint research project with Iwatani Industrial Gases
Corp., Yokohama Rubber has been actively seeking out new
applications of hoses for high-pressure hydrogen gas, and has
developed a 35MPa-compatible hose, “ibar HG35,” and a
70MPa-compatible hose, “ibar HG70.” Currently, we are making thebest use of the hose design and technology we have thus
developed, the hose evaluation technologies developed in
hypothetical real-use environments, and the knowledge gained
from hydrogen station demonstrations, to advance thedevelopment of safer and more reliable 87.5 MPa-compatiblehydrogen gas hoses. We are also working in collaboration with
Iwatani Corporation, the operator of hydrogen stations, to enhance
our developmental team in response to market needs.
With our development of high-pressure hydrogen gas hoses,
backed up by our leading design and evaluation technologies, wehave already begun to tackle our goal to contribute to building theinfrastructure necessary for a hydrogen energy society.

Message fromthe team
Energy-efficient, greenhouse gas-free hydrogen will surely become a common
energy source essential to our everyday life in the future. As the use of hydrogenenergy has expanded to household fuel cells as well as FCVs, and is still expanding,
Yokohama Rubber is committed to the development of hydrogen gas hoses that
ensure stable operation in a variety of harsh environments. Our hope as thedevelopment team is to make contributions to the solution of global warming
thorough product development in support of supplying low-carbon energy.

Nariaki Ishikawa, Ikuma Yusa, Naoshi Yamaguchi,
Mie Okura, and Tatsuya Minaguchi Hoses and Couplings Division
Susumu Hatanaka MB Materials Development Division
Hideaki Washio Hoses and Couplings Sales Division

Message from the manager of Iwatani Corporation
The development of hoses that meet the three stringent requirements of hydrogen,high-pressure, and low-temperature, requires extremely high technological competence. We
sense Yokohama Rubber’s earnestness to stay the course in addressing each issue, even in the faceof various obstacles. We expect that Yokohama Rubber will realize Japan’s first
87.5MPa-compatible hose in practical use, and that its specification will become the global
standard. As we also have many years of knowledge regarding hydrogen, we would like tocontinue our joint research in order to realize the clean hydrogen energy society of the future.

Mr. Ryuichi Hirotani Senior Manager, Hrs systems, Hydrogen energy division, Iwatani Corporation
14

Special Feature:
Yokohama Rubber’s Important Issues
15

Yokohama Rubber’s
Important Issues

Together with Local Communities
Yokohama Rubber addresses community issues byconducting locally-oriented activities that value theimportance of communicating with local communities.

We build a trusted identity as a contributing memberof the global community by making contributions to
the development and prosperity of local communities.
Contributing to the reconstruction of earthquake-affected areas withthe know-how acquired through our “YOKOHAMA Forever Forest Project”
ince 2007, our “YOKOHAMA Forever Forest Project” has been

S横 planting trees at domestic and international production sites

Special Feature:
Yokohama Rubber’s Important Issues

according to the Miyawaki method, in which we do not simply “plant”
trees but rather employees at each production site are actively engaged
in the whole process from rearing the seedlings to cultivating andgrowing the trees. Making use of our experience with the “YOKOHAMA
Forever Forest Project,” in 2012 we constructed a 300-meter long “Inochi
wo mamoru mori no bochotei” (Forest on Coastal Levee that Protects
Lives) in Otsuchi town, Iwate, one of the areas affected by the Great East
Japan Earthquake. The forest was named “Heisei no mori” (Forest of the
Heisei Era), and in the three years since its establishment, together withtownspeople we have planted 150 meters of the area with trees.
Showing his appreciation for the project, the mayor of Otsuchi Town, Mr.
Ikarigawa, commented that “the rubble here isn’t simply disaster waste,
but is a part of the daily lives of those who suffered from the earthquake
here, a memento of lives lost, in a certain sense. The forest created out ofthat rubble is a commemorative forest for us, and also serves as avaluable reminder so that the disaster will not be forgotten in the future.”
In 2014, 64 fourth graders from Otsuchi Elementary School planted

trees in “Heisei no mori” under the mentorship of Dr. Miyawaki, as a partof their classwork for “Furusato ka” (hometown studies). We will continue
to collaborate in tree-planting activities at elementary schools, in hopesthat planting seedlings which they will rear by themselves in the forest
overlooking and protecting their hometown, “Mori no bochotei,” will
nurture students’ love of their hometown.
We are also engaged in similar reconstruction assistance throughtree-planting in other areas affected by the Great East Japan Earthquake.
Since 2012 we have participated in a tree-planting project “Sen-nen
kibou no oka” (Hill of thousand-year hopes) in Iwanuma city, Miyagi, byproviding seedlings. Beginning this year, 2015, we are planting trees inFukushima’s Somakoyo Football field, where they contribute to adisaster-prevention center in collaboration with the Public Interest
Incorporated Foundation Re-use of Debris: Great Forest Wall Project. We
will also join the tree-planting in “Inochi wo mamoru ‘Kibo no moritsukuri’” (‘Creation of a forest of hope’ to protect lives), a forest with a
total length of 10km along the coastline of Kakegawa City, Shizuoka
Prefecture, to prepare for the possibility of Tonankai earthquakes.

Message froma staff member
The fourth graders at Otsuchi Elementary School joined our tree-planting project
last year in our reconstruction efforts in Otsuchi town. I felt rewarded to see thechildren, who went through the painful experiences of the great earthquake rightbefore their entrance into elementary school, plant trees with delight. Now, theseedlings in pots have grown just as the children have. I am deeply moved bythinking about the children proudly talking about the forest to their own children in
the future, when the seedlings they planted have become a forest that protects lives.
I hope that the tree-planting project will help people in the town to look to the
future.

Atsushi Kanazawa CSR and Environmental affairs department

Message from an elementary school teacher who participatedin the tree-planting activity
The Great East Japan Earthquake destroyed the center of Otsuchi Town, resulting in huge numbers ofhuman causalities. Under such circumstances, the children in the town live with a belief in the bright
future.
Otsuchi Gakuen Elementary School has a course called “furusato ka” (hometown studies), an
educational program to foster children’s appreciation of their hometown. It has been 2 years since ourfourth graders participated in the tree-planting project with the people from Yokohama Rubber, as a partof this educational program. This “YOKOHAMA Forever Forest project” has been a great opportunity foreach student to think about disaster-prevention, the preciousness of life, the global environment, andtown development in the future.

Ms. Noriko Sotodate Head Teacher, Otsuchi Gakuen elementary school16Special Feature:
Yokohama Rubber’s Important Issues

Yokohama Rubber’s
Important Issues

Together with Our Customers
Yokohama Rubber addresses customer concerns byprofessionally delivering safe products and services toour customers.

17

We supply safe and secure products
through manufacturing focused on theheart and technology.
We strive to provide safe products and services by ensuring the safety ofour products throughout the entire production and delivery process.
otential quality issues of our tires and other products could

P have a great impact on customers’ assets as well as theSpecial Feature:
Yokohama Rubber’s Important Issues

environment. For sustainable business, it is essential to build
customers’ trust by providing safe products. Quality issues could
lead to the disintegration of consumers' trust.
Recognizing this possibility, Yokohama Rubber has set “healthand safety for our customers” as an important task, and we willcontinuously promote quality improvement activities in order toevaluate product safety risks and to prevent the recurrence ofquality issues. It is important that quality control measures include
measures to prevent quality issues from occurring in the first place,
restrict the distribution of flawed products once an issue has been
identified, as well as to identify the sources of the problem. Once a
problem occurs, we need to identify the root cause and implement
a permanent countermeasure without delay. We, Yokohama Rubber,
always treat the safety of customers as a priority in all quality
control issues.
To ensure the quality of products and services expected by ourcustomers, Yokohama Rubber places experienced engineers at
distribution and sales bases in domestic and overseas markets, andregularly holds internal training workshops on the specifications
and handling of our products. In FY 2014, we held 122 workshops,
in which a total of 600 people participated across the company. We
have increased opportunities to visit customers and also held
regular workshops to help our customers in the safe and secure useof our products. We encourage communication between the tireand industrial materials division, to share information in order torealize appropriate professional responses toward customers andproducts, and to build a global service structure to satisfy ourcustomers.

Message froma staff member
In the overseas market, which I am in charge of, we implement regular reviews andon-site training workshops at customers’ facilities to help them to handle our products
safely and properly. When we present information on how to handle YOKOHAMA brandproducts to customers from different countries, we are continuously making efforts toimprove our communication skills and product knowledge in various ways, includingtranslating presentation materials into local languages with support from local agencies,
to improve customers’ understanding of our products. We strive to improve our service
structure to properly respond to our customers and products through communicationand cooperation with the tire division.

Hirofumi Terauchi MB development service division

Message from quality assurance consultant (aerospace industry)
Regarding quality control issues, Yokohama Rubber has shifted its focus from “preventing
reoccurences” to “preventing issues from occuring.” They focus on pursuing the quality that customers
expect, collecting information, and identifying and removing potential risks. Regarding quality issues,
they act according to “Sangen shugi” (three reality principles) to understand reality, and operate theirbusiness with risk assessments from the customer’s view point, quick responses by analysis, and“thought based on risks” in the quality management system. We would like to suggest expanding theactivities of prevention from occurring to the supply chain,* as the occurrence rate of quality issues is
expected to increase when overseas suppliers increase in the future.

Mr. Kiyohide Monma TF Management
18

Yokohama Rubber’s
Important Issues

Special Feature:
Yokohama Rubber’s Important Issues

To Our Stakeholders and Investors
Yokohama Rubber addresses issues of stakeholder concern
by sharing value among various group employees in orderto improve the company’s value together as a team.

Summary of GD100

Unit: JPY billion

se

ase

GD10 wth)
g to gro(shiftin

400.4

451.9

Ph

I
se I

Pha

eI
Phas

517.3

III

IV

770.0 Net Sales

625.2
557.8
80.0
59.1

23.2

21.9

12.8

2002

2005

2008

26.8

2011

— Yokohama Rubber Group Action Guidelines —í We shall respect human rights inside and outside the company.
í We shall create workplaces that are safe and healthy.
í We shall harmonize our activities with the global environment.
í We shall provide safe and high-quality products and services.
í We shall conduct corporate activities with a high transparency
and practice proper disclosure of information.
í We shall observe not only laws and regulations but also social
norms.
í We shall aspire to harmony and prosperity with local
communities.

19

a
Ph

2014

Operating
Profit

10.4%

2017

(FY)

We improve our company value by growing
business opportunities.
Yokohama Rubber’s goals as we approach our 100th anniversary (FY2017)
ince 2006, the Yokohama Rubber Group has been working

S toward the achievements set out in our midium-term

Special Feature:
Yokohama Rubber’s Important Issues

management plan, Grand Design 100 (GD100),* with the financial
goals of one trillion yen in sales, 100 billion yen in operating profit,
and a 10% operating profit ratio by FY 2017. GD100 is divided into 4phases of 3 years each, and FY 2014 was the last year of phase III,
which began in FY 2012. Phase III set a financial goal of 1.8 trillion
yen in sales, 150 billion yen in operating profit, and an 8.3%
operating profit ratio for total of 3 years. By the end of phase III, we
had achieved 1.7866 trillion yen in sales, 165.4 billion yen in
operating profit, and a 9.3% operating profit ratio. Beginning in FY
2015 we entered phase IV, with FY 2017 as the final year, marking
the completion of GD100 and the first step towards our next 100
years of growth. We set the theme of “Consolidating YOKOHAMA’s
potential to pioneer the next 100 years” for phase IV, in which wewill solve unfinished business issues and will work on the 3 years ofphase IV by bringing all of our potential together, including

improving sales, technical and financial potentials, and operational
efficiency.
In promoting global business expansion, one of the goals
outlined in the GD100 business strategy, we will have many
opportunities to entrust each employee with various decisions
regarding daily operations, such as how to deal with cultural andvalue differences in regions where we expand our business, andhow to respond to ever-changing and ever–expanding social
requirements. We therefore revised the “Yokohama Rubber Group
Action Guideline” to make it more authoritative regarding
employees’ actions and decisions, which are becoming increasingly
diverse. We will distribute the code of conduct, which includes thecontent of the UN Global Compact* and ISO26000,* to all
employees at all offices and production sites. We will improve ourcorporate value based on the idea that we must be a sociallytrusted company in order to achieve the goals of GD100.

* Please see our official website (http://y-yokohama.com/cp/global/ir/company/gd100/) for details regarding our financial goals, business and technology
strategies, and the company-wide strategy.

Message froma staff member
Our CSR started from environmental protection and has grown to become a CSR
operation based on ISO26000, the GRI guidelines* for disclosure, and theacceptance of the UN Global Compact, with global standards always in mind. We
have come to recognize the importance of CSR through encouragement from our
top executives to understand “CSR” as “society’s trust in us” instead of “our social
responsibility,” safety and health activities on-site, compliance* activities, theForever Forest Project, and biodiversity conservation activities. Now we will
promote and share the value of “winning unshakeable credibility from society” asa whole group, based on the new code of conduct.

Yuichiro Chigira Corporate Compliance Dept.

Manager of Yokohama Corporation of North America(tire business controlling company in North America)
Yokohama Tire Corporation (tire sales company) has set and used the code of conduct by sharing
it with employees via our internal network system. It is important for the code of conduct
governing the entire Yokohama Rubber Group to address reporting misconducts andinfringement, workplace safety, and privacy and information management, in consideration of thedescription of our business, corporate culture, and expectations of employees, as well as tospecify applicable laws and regulations. It may be also efficient to add items that reflect thecharacteristic features of each group company. I think it will be necessary to develop humanresources to work on the promotion and adoption of the code of conduct.

Ms.Stephanie Beaulac YCNA Senior Director, HR
20

Special Feature:
Yokohama Rubber’s Important Issues

Yokohama Rubber’s
Important Issues

Together with Our Business
Partners
Yokohama Rubber addresses CSR* issues by implementing
workshops, awards programs, and site visits.

21We promote CSR activities throughout
the value chain*.
Yokohama Rubber strives for sustainable procurement of natural rubber
through the strong relationships of mutual trust.
okohama Rubber has various sources for raw materials andY indirect materials to make our products. The most important

Special Feature:
Yokohama Rubber’s Important Issues

thing we consider is to have a stable supply which is not affected byany conflicts, natural disasters and so on. We believe that keeping
good relationships and collaborating with our partners are the keys
to keep the stable supply. Therefore, we have started to look into
the situation of CSR activities not only of our primary partners but
also of our secondary partners through collaboration.
Natural rubber-the essential material for our rubber products, ismainly sourced from Southeast Asia. We communicate with rubber
farmers and natural rubber processors in order to understand more
about their working environment and human rights problems,
which we consider to be an important aspect for our stable supply
and working together with them for the improvement if needed.
In FY2014, we invited some of rubber farmers who have businesswith us to our natural rubber processing plant in Thailand andconfirmed that there are no significant problems in terms ofworking environment or human rights issues. As a next step, we will

share the information of CSR activities conducted by our partners inSoutheast Asia and collaborate with them. By doing so, we will beable to understand the 60% of the current situation of our natural
rubber suppliers.
In 2015, the International Rubber Study Group (IRSG); an
inter-governmental organisation composed of rubber producing
and consuming stakeholders, has published guideline for rubber
farm management. The guideline covers the stable procurement of
natural rubber (maintenance of quantity and quality), sustainable
farm operation (management of farmland and water), humanrights, and the improvement of working environment. We will keep
developing various ways of supports by keeping up with thecertification trend, surveying for our partners and rubber farms, andcollaborating with local NGOs.

Message froma staff member
I first thought that it wouldn’t be easy for natural rubber producers to implement CSR
activities as most of their businesses are small. However, through the visits to ourpartners and rubber farms, I learned that our local partner had already started to put
their care about safety and environment into action. We will expand our quality
verification survey not only to our partners but also to the rubber farms andindividual producers in the future. We seek for what we can do for sustainable natural
rubber supply and will endeavour to create CSR programs which can strengthen therelationships with our partners.

Yuta Ozawa Raw Material Procurement Department, Singapore Branch

Message of encouragement from a partner (a natural rubber processer)
It is very important for us to establish strong bonds with the local people in Indonesia, and tocreate sustainable value from rubber in order to realize sustainable business. Especially, focusing
on improving the production efficiency of natural rubber, we evaluated and built community
development and environmental programs in 2014. Currently, we are conducting 5 major social
programs: health promotion, education enhancement, economic development, social andcultural events, and infrastructure building.
We believe that we can meet our goals and create efficient programs for small rubber farms byconducting surveys and engaging in dialogue about small-scale farms with Yokohama Rubber.

Mr. Martinus S. Sinarya PT.KIRANA MEGATARA (CEO)22

Special Feature:
Yokohama Rubber’s Important Issues

Yokohama Rubber’s
Important Issues

Together with Our Employees
Yokohama Rubber addresses employee issues by creating asafe working environment using our original approaches.

23

We value and develop our people, and create
opportunities for people.
We build a culture of workplace safety through the full participationin activities to deliver safe products from safe workplaces.
ased on the idea that “safety and health are the basis for

B everything,” Yokohama Rubber implements safety activities

Special Feature:
Yokohama Rubber’s Important Issues

focusing on “human,” “equipment,” and “management,” with fullparticipation of the management and employees. We are working
to continuously improve safety and health by employing the PDCA*(Plan-Do-Check-Act) cycle in our safety and health management
system, which includes a variety of unique activities including
one-on-one trainings and safety-worker* evaluations, as well as 5S,*
Hiyari-Hatto* (near misses), KYT (Kiken Yochi Training/ hazard
prediction training), and risk assessment. We also makecontributions to the improvement of the societal safety level bypromoting safe communications between companies andcollaboration with safety and health organizations. The significant
contributions of our whole-group initiatives for safety and healthwere recognized by the Japan Industrial Safety and Health
Association (JISHA), and received the 2014 chairman award. We willcontinue our safety and health-related activities to build a “zeroaccident” and “zero hazard” safety culture.

At our Mie Plant, we promote the identification, assessment, andimprovement of potential hazards with a risk-assessment approach,as an initiative for safe equipment and the prevention of accidents
even in case of human error. We have shifted from “passive learning”
to “positive learning” by revising our human-focused activities fromgroup training to personal training and from classroom lectures toexperience-based workshops. We aim to develop human resources
who do not cause nor let others cause accidents by recognizing andimproving personal weak areas as a group. To be more specific, we
educate people to be able to think about how to respond when
they recognize hazards. We recognize good case examples andencourage employees to take on challenges without fear of failure,
regardless of an employee’s position or employment status, anapproach which has already resulted in various on-site employee
inventions. Through these activities we will familiarize all operatorswith an easy-to-understand SOP,* in order to promote thedevelopment of safer plants.

Message froma staff member
Since I was designated as a safety and health staff member in July 2014, far fromdeveloping greater awareness of the issues my days have been filled with trying toremember a great deal of new information. My biggest concern has been how to protect
the health and safety of the people who work at our plant. I have been trying tocommunicate with the workers while devising various ways to use my feminine wisdom. I
really appreciate the approaches of my bosses and seniors with on-site safety foremost in
their minds, which leads to their own on-site improvements. I work hard to develop suchapproaches in order to create a safe and secure plant where all staff members can work inpeace together.

Hiroko Morita Safety and Health Section, Mie Plant, TB division

Message from the Japan Industrial Safety and Health Association (JISHA)
The characteristic of the safety and health activities of Yokohama Rubber is that each production
site has its own well-established, unique activities tailored to individual situations, identified
through personal activities including one-on-one trainings. It tends to be considered difficult toachieve results of safety and health activities in China, where the turnover rate is high, but
Yokohama Rubber has certainly achieved success through their efforts in educational activities in
China. We expect the well-positioned plants will lead other plants so as to raise the basic safetylevel. We hope that Yokohama Rubber, as a tire manufacturer, will protect human safetycontinuously and take initiatives focusing on “safety,” to set an example worth following.

Mr. Akihisa Shirasaki Director, Management System Audit Center, JISHA
24

ISO26000 Compliance
Activity Report

Yokohama
Rubber[Self-evaluation code] ໐ : Achieved or improved △ : Unachieved or unchanged ╳: Deteriorated
Global environment

Organizational Governance
ISO26000 Compliance Activity Report

Our Goals

Customers
Employees

Compliance*

Allocation of economic value(non-consolidated)

Training participants(non-consolidated)

Whistle-blowers(consolidated)

FY 2013 ··· 381,424 million yen
FY 2014 ·· · 397,087 million yen

FY 2013 ·· · 1,245 (participation rate 93%)
FY 2014 ·· · 5,788 (participation rate 99%)

FY 2013 ·· · 27
FY 2014 ·· · 31

*among eligible employees○

Selfassessment○○

Human Rights
Our Goals

Partners

Employees

 Respecting human rights both internally and externally; no child labour or forced labour in our group or by our partners;
sincerely responding to and improving complaints on human rights

64.684 mm

Child labour / forced labour

Human rights complaint management system

Accomplishments

Number of jobs identified as suspected child labour or forced labour

Official number of complaints to the system (consolidated)

FY 2013 ··· 0 (consolidated) 0 (suppliers)
FY 2014 ··· 0 (consolidated) 0 (suppliers)

FY 2013 ·· · 0
FY 2014 ·· · 0

Selfassessment○○

Labour Practices
Our Goals

Accomplishments

Partners

Occupational Safety and HealthTraining and education programs

Diversity and equal opportunity

Lost worktime rate(consolidated)

Cost for education and training(non-consolidated)

Female employment rate
for main career track (singly)

FY 2013 ··· 0.42
FY 2014 ··· 0.40

FY 2013 ·· · 171 million yen
FY 2014 ·· · 177 million yen

FY 2013 ·· · 32%
FY 2014 ·· · 38%*Additional information: rate of female employees (consolidated): 12%○

Selfassessment○○

The Environment
Our Goals

Accomplishments

Selfassessment

Employees

 To be an organization that allows people of diverse ages, genders, and nationalities to demonstrate their maximum capabilities
 Establishing a zero-hazard culture of safety by promoting physical and mental health*per 1 million hours

25

Partners

 Continuous improvement of corporate value and an identity that is trusted by all stakeholders.
Economic performance

Accomplishments

Local community

Stockholders and investors

Global environment

 To make all of our products environmentally friendly  To develop biodiversity conservation activities at production sites
 To reduce the total amount of GHG emissions (to 50% less than 2005 levels across the value chain) To promote the efficient use of water resources according to the characteristics of water risks
Raw materials

Water

Products and services

Biodiversity Conservation

Total amount of
raw materials used(consolidated)

Water intake(consolidated)

Environmentally-friendly
product rate among all ofour products (consolidated)

Implementation rate ofconservation activities at
production sites (consolidated)

FY 2013 ··· 766 thousand tons
FY 2014 ·· · 791 thousand tons

FY 2013 ·· · 8,280 thousand m3
FY 2014 ·· · 8,660 thousand m3

FY 2013 ·· · 93%
FY 2014 · ·· 95%

FY 2013 ·· · 29%
FY 2014 ·· · 46%

△

△

○

○

In FY 2014, the Yokohama Rubber Group identified priority issues for each group of stakeholders.
In this section, we report on the priority items identified according to ISO26000* and our progress toward achieving
them, as well as the data requested for disclosure.
Please refer to our CSR* Website for background details regarding the importance of each priority, our goals, ouraspirations, the FY 2014 activity report, the challenges we faced, and future measures.

Please refer to our CSR Website for detailed reports of each achievement.

EnergyAir emissions

Environmental complaint
management system

Total consumption(consolidated)

Greenhouse gas emissions(consolidated)

Official number of complaints to the system(consolidated)

FY 2013 · ·· 1,180,827MWh

FY 2013 · · · Scope 1 328 thousand tons
Scope 2 328 thousand tons
Scope 3 23,301 thousand tons
FY 2014 · · · Scope 1 334 thousand tons
Scope 2 351 thousand tons
Scope 3 30,844 thousand tons

FY 2013 ·· · 0
FY 2014 ·· · 0*298,937KL converted to crude oil

FY 2014 · ·· 1,231,611MWh*311,668KL converted to crude oil

Selfassessment△△ the scope of calculation○*Due to the expansion of

Fair Business Practices
Our Goals

Accomplishments

Partners

 CSR activities in collaboration with our partners
Environmental, human rights,
and labour practices of our partners
Social impact assessment

Social impact complaint
management system(partners’ compliance)

Percentage of partners that we started
workingwith after impact assessments(consolidated)

Official numbers of complaints to the system(consolidated)

Number of participating companies /participation rate(non-consolidated)

FY 2013 · ·· 100%
FY 2014 · · · 100%

FY 2013 ·· · 0
FY 2014 ·· · 0

FY 2013 ·· · 298 companies 90.5%
FY 2014 · ·· 299 companies 90.3%

ISO26000 Compliance Activity Report

Accomplishments

http://y-yokohama.com/csr/en/

Participating companies
in our CSR workshops for partners*Small and medium size companies with which we havea stable amount of business

Selfassessment

○

○

○

Consumer Issues
Our Goals

Customers

 Achievement and maintenance of zero violations of regulations and voluntary codes concerning usage of our products and services
Safety and health for our customers, labeling compliance of our products and services
Number of violations of regulations or voluntary codes concerning product safety, labeling,
and provision of product usage information (consolidated)Accomplishments

FY 2013 ·· · 1
FY 2014 ·· · 1*There was a recall of our tires that was our responsibility, although it was not a violation of laws△

Selfassessment

Community Participation and Community Development Local society
Our Goals

Accomplishments

 Making contributions to local community development by communicating with the community, with a focus on the Forever Forest Project (a 500,000 tree-planting project)
Local communities

Promotion of the Forever Forest Project

Presence in the local communities

Community activities at production sites
Implementation rates(consolidated)

Number of trees planted in a year /number of seedlings provided(consolidated)

Percentages of sites which pay salaries
higher than minimum wage
(consolidated)

FY 2013 · ·· 100%
FY 2014 · · · 100%

FY 2013 ·· · 39,791 / 55,635(total 326 thousand trees, achievement rate 65%)

FY 2013 ·· · 100%
FY 2014 · ·· 100%

FY 2014 ·· · 43,644 / 71,404(total 369 thousand trees, achievement rate 74%)

Selfassessment

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○

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26

Response to Third-Party Opinion
Yokohama Rubber took the following actions in response to Mr. Kawakita’s third-party opinion about CSR*
Report 2014. A selection of these actions is presented below.

Mr. Kawakita’s Findings

Yokohama Rubber’s Response

Response to Third-Party Opinion

Labour Practices
I strongly urge the Company to establish an environment where employees
can continue to work, while also taking leave, such as by hosting
workshops that introduce examples of people that have taken nursing careleave.

We created a working team involving management and labour and heldinterviews with employees who have taken nursing care leave, both in aneffort to introduce examples. We also confirmed the current situation bycarrying out a survey of our benefits programs. We introduced a flex-timesystem for employees providing nursing care and are currently examining
other measures as well. [Human Resources]

I hope the Company will promote even more effective measures aimed atpreventative care (in terms of mental health), such as establishing a hotline
where employees can discuss personal problems.

We accept consultations from employees about health, workplace, money
and life plan issues. We involved management and labour in theestablishment of the Health Promotion Committee and Mental Health
Subcommittee, where we are reviewing issues. Under the guidance of an
occupational physician, we are currently moving forward with preventive
measures for mental health issues. [Human Resources, Safety, Compliance]

I expect the Company to encourage the participation and involvement of
reemployed workers in their local communities.

We launched our social contribution activity support system in FY2014,
under which employees working at all of our domestic group companies
are beginning to get involved with social community activities, including
those in their community. [Human Resources, CSR and Environmental
Affairs]

I strongly encourage the Company to accelerate its development of thenext generation of executives at both its head office and overseas sites
based on a long-term goal and strategy given where the market and thecompany will be in 10 years time.

We will continue to open new sites to support our expansion into majorinternational markets. Hiring and developing people and executive
candidates locally is critical to these business operations. We will continue
to develop human resources globally and offer a job rotation program.
[Human Resources]

I ask that the company to continue to work proactively toward
implementing measures to ensure that employees with disabilities are
retained over the long term.

We examined ways to improve the working environment and address
issues posed by increasing opportunities so that persons with disabilities
can contribute more. We are in the process of creating a development
program and evaluation system for these human resources as well. [Human
Resources]

I urge the company to not only look back on past accidents on thecalendar, but also to incorporate safety improvements and remedies forfacility specifications and to issue a report about the progress ofevaluations and improvements to ensure the greater effectiveness of safetymeasures.

We carried out risk assessments and opened workplaces to the public at
each of our sites and based on the results we are now making changes tofacility plans and SOP*. Additionally, we are using company-wide safety
checks and follow-up to check and improve activities, and we will continue
to engage in these effective efforts. [Safety]

The Environment
I strongly encourage the Company to thoroughly shed light on its
challenges and methods, such as transitioning to the non-fixation ofenergy usage adjustable to the fluctuation of production volume (JustIn-Time for Energy), and also to share the same support system among
divisions and overseas sites.

We are carrying out activities to reduce energy loss in line with fluctuationsin production volume (operations/shutdowns). Every year our domestic
and overseas sites hire outside consultants to provide guidance on energy
efficiency and initiatives are in turn being rolled out. [CSR andEnvironmental Affairs, Facilities]

Fair Operating Practices(As for procurement) I strongly encourage the Company to establish a
support system with suppliers for sharing and problem solving actual cases
and further understanding initiatives in greater detail, based on global
trends in the sector.

From the standpoint of stable procurement and ethical practices, wechecked for compliance with regulations around the world. For pursuingfair transactions with business partners, we encourage information sharing
about our procurement managers in Japan and overseas through meetings
and training sessions. [Procurement]

Consumer Issues(As for quality assurance) I hope that it will incorporate the minimization of
impacts on customers as part of its management indicators and further
advance quantitative and effective measures.

27

Under our quality policy, we are working to provide appealing productsthat satisfy our customers. We check quality every step of the way up tomarket launch and pursue further improvements through customer
satisfaction and technical services provided to customers. [Quality
Assurance]

Third-Party Opinion
The description herein refers to the opinions based on this report, a related
website (http://y-yokohama.com/csr/en/), and also interviews held withpersons in charge from Yokohama Rubber’s Raw Materials Procurement,
Human Resources, Corporate General Affairs, Quality, Safety and CSR
departments.
Suffice to say, Yokohama Rubber’s various approaches to CSR are
steadily progressing under the PDCA management cycle, especially withregard to its mitigation of environmental impacts.

IIHOE
The International Institute for Human, Organizationand the Earth is a non-profit organization establishedin 1994 for the democratic and balanced developmentof all the lives on the earth. Although it mainly
provides management support for citizens’ groups
and welfare workers, the group is also heavily involvedin providing CSR support to large corporations.
http://blog.canpan.info/iihoe/ (Japanese language only)

products, including increasing the use of powdered recycled rubber by some
3% compared to last year, achieving the interim targets for lowering waste
emissions and GHG emissions. Going forward, I strongly encourage theCompany to thoroughly shed light on its challenges and methods, such astransitioning to the non-fixation of energy usage adjustable to the fluctuation of
production volume (Just- In-Time for Energy), and also to share the same
support system among divisions and overseas sites.
l As for CSR at suppliers, I commend the Company for holding CSR workshops
for business partners in major countries, having suppliers carry out self checks
for the first time in five years, and establishing a commendation system basedon the results of these self checks. In order to more effectively improve
initiatives being undertaken by suppliers, I strongly encourage the Company toestablish a support system with suppliers for sharing and problem solving
actual cases and further understanding initiatives in greater detail.
l As for employee safety, I commend Yokohama Rubber for investigating andrectifying the situation company-wide with regard to the serious accident that
happened at the Company and the problems with its initial response andreporting. Ultimately, these efforts helped the Company win the Chairman’s
Prize at the National Industrial Safety and Health Convention. Moving forward, I
continue to urge the Company to incorporate safety improvements andremedies for facility specifications without fail and to issue a report about the
progress of evaluations and improvements to ensure the greater effectivenessof safety measures.
l Regarding improvement of workplaces to retain employees, I commend thefact that 3.67% of Yokohama Rubber employees took advantage of the systems
for paid vacation, leave of absence or shorter work hours in order to care for achild or family member in need, and that Yokohama Rubber interviewed those
employee who have taken nursing care leave. Going forward, to prepare for theunavoidable sharp increase in those going to take nursing care leave in the
future, I continue to strongly urge the Company to establish an environment
where employees can continue to work, while also taking leave, such as byhosting workshops that introduce examples of people that have taken nursing
care leave. In terms of mental health care, while commending the Company for
conducting stress screenings on all of its employees, going forward I hope theCompany will promote even more effective measures, such as establishing andusing hotlines where employees can discuss personal problems or any othermatter. I also praise the Company for making progress with the reemploymentof retired workers and I expect the Company to encourage the participation andinvolvement of reemployed workers in their local communities.
l As for the enhancement of a human resource portfolio required as a global
corporation over the midterm, I think it is good that the Company has begun
strengthening personnel development efforts across the Group for managerial
level employees. Meanwhile, going forward, I strongly encourage the Company
to accelerate its development of the next generation of executives at both its
head office and overseas sites based on a long-term goal and strategy given
where the market and the company will be in 10 years time.
l As for employment of persons with disabilities, I commend the Company forachieving the statutory employment rate of persons with disabilities andexpanding job opportunities. I ask that the company to continue to work
proactively toward implementing measures to ensure that employees withdisabilities are retained over the long term.

Response to Third-Party Opinion¢ Truly Commendable Areasl Regarding conservation of biological diversity, I commend the Company forcarrying out initiatives to foster a correct understanding of the positive andnegative impacts it has on ecosystems, including by hosting employee-led
workshops and briefings for the local community as well as conducting
activities that conserve biological and ecosystem diversity autonomously acrossa wide area, at seven factories in Japan, including the Mie Plant, based on the
preliminary studies implemented at 30 of the Company’s business locations
both in Japan and overseas in fiscal 2010. In particular, I highly praise the factthat members comprising managerial employees taking part in activities at the
Mie Plant have taken the lead in ongoing monitoring efforts. I hope that theCompany will expand this same initiative gradually to its overseas businesslocations.
l Regarding the Yokohama Forever Forest Project, in seven years since theproject was launched Yokohama Rubber’s domestic and overseas sites haveplanted more than 370,000 trees with sufficient consideration towards theconservation and improvement of biodiversity. They nurtured the seedlings ontheir own, and not only were 93% supplied within the Yokohama Rubber Groupin fiscal 2014 in Japan, but also they have provided a cumulative total of morethan 270,000 seedlings so far to municipal governments and other companies.
In particular, I commend the Company for playing a leading role in the “Green
Coastal Levee that Protects Lives” project planned for those areas affected by
the Great East Japan Earthquake. I also truly commend this world-leading
initiative for contributing to society to preserve and improve forest ecosystems
and greenery. Going forward, I hope that the Yokohama Forever Forest Project
website will evolve into a portal that also introduces many examples of similar
initiatives taking place at other companies.
¢ While Approving of Progress, Areas that May Require Further Improvementl Regarding corporate governance and CSR implementation system, while I
commend Yokohama Rubber for establishing interim targets up to 2017, when
it celebrates its centennial anniversary, and promoting initiatives using key
performance indicators (KPI) based on the core subjects of ISO26000, going
forward I sincerely hope the Company will develop a system that focuses on its
position in world markets in 2017, and beyond, and in particular, continue to
use targets and measures created using a bottom-up approach at its domestic
and overseas sites in order to incorporate many different values globally in its
management decisions and practices. In terms of its reporting andcommunication, I would like the Company to provide more detailed
introductions of the initiatives being carried out by Yokohama Group companies
in Japan and abroad. I also hope that the Company will promote stakeholder
engagement further as required by ISO26000, setting up opportunities forcontinuous dialogue with NPOs in important operating regions similar to thoseon biodiversity already begun at the Mie Plant. From this standpoint, I would
like the Company to provide a venue for persons in charge of business divisions
to share their views as an opportunity for dialogue to promote CSR across thecompany.
l Regarding its quality assurance implementation system, while I commend
Yokohama Rubber for its efforts to cut wait times in half for feedback provided
to customers who contact the company, I hope that it in the future will
incorporate the minimization of impacts on customers as part of its
management indicators and further advance quantitative and effective
measures.
l Regarding the reduction of environmental impacts, I praise the company forthe progress it has made. This includes reducing the environmental impacts ofHideto Kawakita

CEO and Editor/Publisher of Socio Management
International Institution for Human,
Organization and the Earth (IIHOE)

Response to Third-Party Opinion
While we have received certain positive feedback regarding
our CSR initiatives, we take suggestions and recommendations
very seriously, as something to be improved upon incontinuing to meet the expectations of our stakeholders.
Safe workplaces, as well as the physical and mental
wellbeing of employees, represent the very foundation of ourcorporate management, and employees of the Yokohama
Rubber Group carry out their duties closely in line with ouraction guidelines. On top of this, in order to pursue sustainablebusiness activities in Japan and overseas in a stable manner,
we will carry out biological diversity conservation studies andwork closely with suppliers, while developing an
employee-friendly workplace environment where employees
can contribute their skills and abilities, through greater
expansion our nursing care system, to accommodate the needof employees in an aging society. To that end, we will continue
to hold discussions and dialogue with our stakeholders in the
future.

Fumio Morita

Director and Managing Corporate Officer
Head of Corporate Social Responsibility Division
Yokohama Rubber Co., Ltd.

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The Yokohama Rubber Co., Ltd.
Corporate Communications Department
36-11, Shimbashi 5-chome, Minato-ku, Tokyo
105-8685, Japan
Tel. +81-3-5400-4531

CSR & Environmental Affairs Department

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2-1 Oiwake, Hiratsuka City, Kanagawa Prefecture
254-8601, Japan
Tel. +81-463-35-9512

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Yokohama Rubber is a signatory to the United Nations Global Compact.
Yokohama Rubber is an advocate of Fun to Share, a climate change program working to realize a low-carbon society.
Yokohama Rubber Group is an official partner of Chelsea F.C.
This publication was printed on FSC®-certified paper, which includes materials from timber manufactured in properly managed forests.
This publication was printed with a waterless printing method that does not emit hazardous waste fluids.
This publication was printed with vegetable oil ink which does not emit VOCs (volatile organic compounds) that cause air pollution.

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