Value Creation

Monozukuri

Creating Value with Manufacturing CraftsmanshipThe origin of Kayaba traces back to the 1919 establishment of the Kayaba Research Center by our founder
and inventor, Shiro Kayaba. For over 100 years since then, we have continued to refine hydraulic technology.
Featuring advanced technology and high quality, the present-day our shock absorber enjoys a 13% global share.
Further, though efforts for innovative manufacturing using DX and new business creation, the Group will work
together to provide manufacturing craftsmanship that will contribute to finding solutions to various issues suchas environmental/social problems, the promotion of carbon neutrality, and the achievement of the SDG targets.

Technology Development
In their efforts to develop technologies and products,
our research centers, business units, and group companies collaborate to combine vibration control andpower control technologies with all underlying technologies, such as electronic control technology. When
compared with other driving methods such as electric
power or pneumatic pressure, hydraulics can deliver amore powerful output from a small device. They excel
in responsiveness, and are characterized by their easeof control. And even in the current era of rapid technological evolution, we believe that hydraulic technology
will make a valuable contribution to the development ofsociety. Therefore, we are not only further deepening
our core technologies, but also responding to changing
times by adopting cutting-edge technologies such as
AI, IoT, the promotion of DX, and advanced simulations
to promote the systemization of products. We are also
taking on the challenge of developing the next generation of hydraulic equipment that offers both higher
efficiency and better safety, such as automated ICT
construction machinery using electronic control.

Conceptual Diagram of Kayaba’s Technology
Value creation
Automobiles

Railroad

Industrial
vehicleEquipment

Motorcycles

Construction
machinery

Agricultural
machinerySpecial-purpose
vehiclesHydraulicElectronic control
Motorization
SystemMaterials
Testing andevaluation
Monozukuri(Production technology)

SystemTechnology
Elemental
Technologies

Leading-Edge
Technologies

AI/IoT
Advanced simulations
Digital technology

Electronic
ControlTechnology

Vibration
controlPowercontrolCore Technologies

Technology Development System
Kayaba uses its engineering, global production, andsales sections in concert to promote new technology
and value creation while actively engaging in the development of advanced technology aimed at the resolutionof social issues such as energy conservation and the
reduction of materials with environmental loads.
At our Basic Technology R&D Center and Production
Technology R&D Center, we investigate and analyze
long-term environmental changes and the accompanying changes in the needs of society and our customers,
and conduct R&D focused on the ideal for futuretechnologies based on our forecasts and the creationof road maps that clarify the related long-term strategies. In basic research, we are conducting research forthe next generation of businesses and products as wellas underlying technology research, and converting theresults into tangible assets by, for example, developing
an integrated system that combines electronicallycontrolled suspension and electronic power steering
technologies for the self-driving vehicles of the future.

23

KAYABA Group Report 2022

At the same time, the engineering divisions of eachbusiness unit are also improving the performance andlowering the cost of existing products, conducting
original product development, and moving them into
mass production.
In the Engineering Div., we are conducting basic
research, future technology research, and underlying
technology research while using our intellectual property
strategy and digital technology. We then use this research for product development and mass production at
our business units and group companies in a processthat accumulates and upgrades technology on a Groupwide basis. In addition, we are using the technologies
and know-how we have accumulated from our R&D tomove toward the in-house production of manufacturing
equipment and metal molds. Further, seeking to optimize and accelerate our R&D, we are forcefully
engaging in efforts for efficiency and productivity improvements, such as data analysis using AI, in addition
to actively promoting DX throughout the Group.

Kayaba’s Technology Development Process

Control, vibration, information and communications, electrical/electronics, mechanical elements,
sensors, surface treatment, heat treatment, processing, assembly, inspection, automation, etc.
Introduction

Engineering Division(Basic Technology R&D Center/Production Technology R&D Center)
Basic research

Future technology

Elemental technology
research

Intellectual Property
Department
Intellectual property
strategy

CAE* Promotion Department/DX Improvement Department
AI/IoT

Digital technology

Simulation technology

Strategy

Mass production

Product development
Each business units/Group companies*CAE: Computer-Aided Engineering. The use of computer simulations to resolve issues faced by technical departments.

Vibration Control: New EV and Automation Compatible Services Using DX
develop low energy consumption electric pumps that
output only the required pressure and output as well as
highly efficient electric pumps for e-Axle.
e-Axle poses gear lubrication and motor/inverter
cooling challenges. We believe that, through the development of electric pumps that respond to theseissues, we can contribute to the reduction of electricity
and fuel consumption in an EV-base society.

High Safety and Comfort Required by Mobility Shift

Reducing Electricity and Fuel Consumption

Electronic
control
Sens

Think

Act

Pursuing safety and comfort
in the automatic operationand EV era with the advanced
integration of our core technology
and electronic control systems

Active Suspension
SystemNext Generation Hybrid
Suspension System•Pursuit of safe function /ultimate flat ride

•Next generation vehicle
height adjustment +suspension system
デジタル技術•Improve aerodynamic
performancee-AxleTransmission Motor
axle

Inverter

M

Data

In Europe, China, and the ASEAN region, the demandfor EVs and new energy vehicles is growing, spurred
on by governmental policies.
Kayaba offers products such as electric power steering and transmissions as well as CVT vane pumps thatlow fuel consumption needs for automobiles.
Furthermore, we are using the electronic control andelectrification technologies we have fostered toContributing to reducing theelectricity and fuel consumptionof EVs/mobility with an advanced
integration of our core technology
with electronic control andelectrification technologies

Electric Pump
•Providing electric pumps for lubrication/cooling for electricvehicle equipment•Highly efficient pump/motor control technology•Proposals for oil pressure / hydraulic system maintenance•Reduce electric power/ fuel consumption•Improve verticalmovement

製品開発

Electronic control
Suspension for Automobile

Vehicle heightadjusting suspension

KAYABA Group Report 2022

Value Creation

Monozukuri

Initiatives for New Product Development

24

MonozukuriPower Control: Industrial Machinery—Electronic Control and Hydraulic Systems

Remote control, automatic operation, and increased
efficiency of construction machinery

Kayaba’s strength lies in that we are the only manufacturer
with a full lineup of hydraulic products for construction
machinery—valves, pumps, motors, and cylinders—inaddition to handling electronic control systems.
Currently, we are working in such ways as expanding ourlineup of pumps and load sensing devices and developing
electronically controlled hydraulic systems to strengthen
our ability to respond to such customer needs for construction machinery, such as automation, unmanned operation,
increases in efficiency, and improvements in operability.
Further, our newly developed sensors perform detection
and sensing of leaks in hydraulic equipment, and combining
them with DX technology makes breakdown prediction andmaintenance a reality. This means that construction machinery that has Kayaba-made products installed can be used
for a longer time, which in turn contributes to a moresustainable society.

Electronic
control
Sens

The only manufacturer
with possible systemcompatibility

ECU +Hydraulic equipment

Act

Think

Self-driving
Remote control
Hydraulic
System
Pump

Valve

P

A system for supplying the required flow/pressure

Improve operability
Low energy consumption

Load Sensing

Information System

Service

In-house development

Breakdown prediction
Oil leakOily condition
Optimum maintenance detection sensor detection sensor
Condition monitoring

Intellectual Property Strategy
In the Kayaba Group, our R&D departments and intellectual property departments collaborate to actively generateintellectual property and conduct the appropriate protection and usage thereof. These intellectual property
initiatives create growth for our business and increase ourcorporate value.
R&D departments and intellectual property departments
regularly hold an Intellectual Property Strategy Meeting, inwhich they discuss R&D themes from an intellectual
property perspective. In these meetings, the participants
think of every single invention from the results of the R&D
themes and attach them to patent applications. Throughthis procedure, we actively apply for patents, obtain rights,
and protect our original products and technologies.
As a result of these initiatives, we hold the highest
number of patents worldwide that are related to protecting our major products of shock absorbers and hydrauliccylinders.
In recent years, we have been obtaining patents bystrategically generating inventions based on our technology strategies and product concepts. Also, we work toinventory the patent rights we own and to apply forpatents in carefully selected overseas countries. We
obtain and manage patents necessary to protecting the

global competitive edge of our business.
Furthermore, we are working on a new initiative forusing information on intellectual property in research anddevelopment. In order to create the technology of the
future, we analyze and understand technology trends andthe position of Kayaba and the competition using intellectual property information from the early stages of R&D,
pinpoint the strategy for each technology, and incorporatethat into our R&D. Also, we use IP landscaping* to formulate our technology strategy, and for the purpose ofbuilding a patent portfolio for our core technology, we havebeen testing cooperative IP landscaping that links theengineering departments and intellectual property departments of each business unit since 2021.
In initiatives to protect our corporate and productbrands, we are responding with formal legal objections tocounterfeit trademark applications, particularly in China,
and exercising our trademark rights against counterfeit
products such as shock absorbers. In these ways, we areendeavoring to maintain and increase the value of ourcorporate brand.
*IP landscaping: To create proposals for strategies that contribute to intellectual
property management by analyzing intellectual property information.

Ratio of Domestic and Overseas Patents
Retained (As of March 31, 2022)

Number of Related Patents Retained(As of May 12, 2022, based on our own research)

Other 4%

Shock AbsorberHydraulic Cylinder

800

100

Southeast Asia 1%

629

China 8%80

600

America 13%
Europe 5%

2,698

435

Japan 69%
400

０

25

KAYABA Group Report 2022

60

325

40
200

86

134

117

96

Company B
Company D
KayabaCompany A
Company C
Company E

44

36

35

31

30

20
０

Company b
Company d
KayabaCompany aCompany cCompany eProducts Built with the Environment in Mind
Recycling greenery

Pruned Tree Shredder
Truck

Introduction

1.	Substantially improving
the efficiency of pruning
labor and transport
related to roadside trees
2.	Effectively using woodchips for biomass power
generation, soil improvement additives, mulchingmaterial, and more
(applications for woodchips)

Shreddedwood chips

Strategy

We believe that conducting environmentally friendly manufacturing activities is essential, and promote R&D thatincorporates environmental considerations up to the
manufacture of a product. Centering on the Environmental
Regulation Response Group established in FY2020, weare responding to the REACH Regulations* as well as
sharing and seeking out information from all countries
related to social environmental regulations, such as theelimination of Pb.
We are working on products that contribute to renewable energy, energy conservation, and the reduction of
CO2 from the viewpoint of achieving carbon neutrality by
2050.

REACH Regulations： REACH stands for Registration, Evaluation, Authorisation
and Restriction of Chemicals. It is an EU law intended to protect human healthand the environment while fostering competitiveness within the European
chemical industry.

*Innovative Manufacturing for the Next Generation

Self handling innovation plant 2030

Data

Pursuit and evolution of a Kayaba production system with a core of digital technology
Innovative production
processes
Present

Component inventory

Construct a compact, integrated production line that simultaneously completes
manufacturing from processing to assembly→ Automated in ways such as AI/robots that inspect production processes, unmannedInterim inventory

Inspector

Imageinspection

Product inventory

Back to thestarting point

Eliminating inefficient inventory
Eliminating inefficient operations

Innovative equipment
management

Transport

Transport

Component transport

MachineProduct transport

Shipping

Transport

Shipping

Transport

Eliminating inefficient transport

Construct a next-generation TPM system that can respond to upgraded equipment groups→ Analyze all kinds of equipment data in real time, predict and prevent the occurrence ofabnormalities

Analog, manual, and experience → Digital, automation, and AI analysis

Real time centralized
management

Use of DX
Abnormality detection
Quality, equipment breakdown,
production progress→ Places where “things” can’t stop

Prevention

Intelligencegathering/analysis
Education / Human
resource training
TPM of next-generationequipment

KAYABA Group Report 2022

Value Creation

Next-generation Innovation Plant (Concept)

In production process innovation, automated guided
vehicles (AGV), robots, and imaging examination are incorporated into processing to create a highly efficient
production line, allowing for unmanned operation andreduced inventory.
In innovative equipment management, we will set up asystem that conducts real time centralized management of
all kinds of data from equipment in operation while predicting the occurrence of an abnormality before it happensusing AI. And we will completely prevent issues, providing
training for and implementing next-generation total productive management (TPM; an approach that engages all
employees in production maintenance and production
management) that is fitted to upgraded equipment groups.
Through the Ship’30 initiative, we are building a worksite
where processes run flawlessly on highly efficient production lines (through production process innovation) with highreliability (through cutting-edge equipment management),
and aiming to bring our unmanned plant into operation
globally in 2030.

Monozukuri

We have worked to evolve the sites of Kayaba’s manufacturing craftsmanship starting from conveyer belt
manufacturing in the post-WWII period, responding to
widely changing social conditions and flexibly moving frommass production to high-mix low volume production.
Kayaba is still looking toward the next generation. We
have started work on Ship’30, an initiative that will further
evolve manufacturing sites. The Ship’30 initiative is aimed at
the breakthrough achievement of constructing an unmanned plant by 2030—an innovative plant that will be fully
self-sufficient with a foundation of digital technology.
The initiative focuses on two major aspects of innovation:
production process and equipment management. It will
make possible an innovative manufacturing method with acompact production line that perfectly synchronizes processing and assembly. We are aiming to create a plant that
ultimately will not rely on humans at all, and that minimizes
transport, inventory, and work at the manufacturing site with
innovative equipment management using the latest technology yet retaining the basics of equipment maintenance.

26

Value Creation

ESG Management

Creating Value Through ESG Management Promotion
Kayaba sets ESG management as the foundation of its policy development. We are not only responding toenvironmental needs, but also promoting the development of products that contribute to a sustainable society
and connecting the resulting business opportunities to an increase in corporate value. Our ESG Promotion
Office is at the forefront of developing basic environmental, social, and governance policies enacted
throughout the Group. In addition, we are building trust through collecting data on all of our in-house ESG
initiatives and fulfilling our reporting accountability to our stakeholders.

Corporate Spirit
By providing technologies and products that make people’s lives safe and comfortable,
the Kayaba Group contributes to society
1. We shall follow all rules and face all issues with honesty.
2. We shall build a corporate culture full of vitality, and hold high goals.
3. We shall value kindness and sincerity, cherish nature and care for the environment.
4. We shall constantly pursue creativity to contribute to the prosperity of customers, shareholders, suppliers
and society.

Basic Policy for ESG• With ESG management as the basis for formulating policies, we will establish an overall picture(our values, business model, sustainability, growth potential, etc.) for our value creation cycle.
• We will also reexamine existing initiatives in terms of ESG initiatives and communicate them outside
the Company in order to foster trust.

Sustainability Promotion System
The promotion of ESG management is essential for a
globally operating corporation to continue achieving
sustainable growth. The standard for management is tonot simply pursue profits, but to also contribute tosociety.
At Kayaba, we are also seeking to strengthen our
promotion of initiatives for ESG related to a sustainable
society. To that end, we established the Sustainability
Committee, an organization that oversees the entire
Group, in March 2022. The President serves as theCommittee Chair, and it is composed of the executives
in charge of ESG promotion, the general managers of
production, engineering, sales, accounting, safety,
purchasing, and others as well as the general managers of all business units. Through debating issues
related to sustainability such as policies and management/measures for progress toward achieving targets,
we are aiming to make the Kayaba group a corporate
entity that contributes to society.

27

KAYABA Group Report 2022

Board of Directors /Board of Executive Officers
Report tosuperiors

Approve/supervise
Proposals/
reportSustainability Committee
Chair:All practical business
committees

President

Proposals

Member: ESG Promotion
Executive Office rand
12 other members
Secretariat: ESG Promotion Office

Matters todecideInform inside and outside
the Company

Implementation/
follow up

Participation

All functions anddepartments,
all offices/plants

Outline of Activities
Kayaba’s initiatives

Related SDGs

Environment

Environmental
preservation

Environmental Management
Measures against climate change
Mid- to long-term Policy for Achieving Carbon Neutrality
Environmental Impact by Business Activity

Labor practice

Human Development
Respect for Human Resources
and Diversity work-life balance
Promotion of Health Management
Creating a Safe, Secure Working Environment

Human rights

Respect for Human Rights

Qualityassurance

Quality Management

Fair Business
Practices

Supply Chain Management

SocialStrengthening Our Management Foundation
ESG education and human resource development
External communication to foster trust

Value Creation

Corporate governanceInternal Control and Compliance
Risk Management

Strategy

Corporate
governance

ESG Management

GovernanceIntroduction

Key issue

Initiatives to Strengthen our Foundation
SDGs as part of our ESG education. We are introducing
specific efforts for the SDGs that anyone can easily get
involved with, and provide enlightenment on issues
such as carbon neutrality and diversity. Also, we started an education course (e-learning) entitled “SDG
Basics” for all employees in FY2021. In these ways, weare educating human resources who understand thelinks between their everyday work and the targets of
the SDGs, and have the ability accomplish their social
responsibility in their daily work.

Data

In July 2021, centered on the newly established ESG
Promotion Office, we set out to develop basic environmental, social, and governance policies across theentire Group and promoted the strengthening of thefoundation. In addition, we redesigned existing initiatives into efforts for ESG and actively provided
information inside and outside the Company, thereby
earning trust.
Specifically, we started providing a serialized article
in our in-house company newsletter on ESG and the

In-house Company Newsletter Article Content List (Aug. 2021− Mar. 2022)
We Can Start Right Now with SDGs
Aug. 2021 What are the SDGs

From an article ofin-house newsletter

Kayaba and the ESG Improvement Sect.
ESG Promotion Office was establishedon July 1

Sep. 2021

Let’s reduce carbon dioxide emissions! Efforts for Carbon Neutrality

Oct. 2021

Let’s reduce plastic waste!

Initiatives for Plastic Resource Circulation

Nov.2021

Work in happiness every day!

Reduce overtime and make time to enjoy life

Dec. 2021

Let’s Think about Diversity andUnderstanding!

Efforts to Respect Human Rights

Jan. 2022

What Is Carbon Neutrality?
(Fundamental knowledge)

Kayaba’s efforts

Feb. 2022

Let’s use our limited resources carefully Reducing industrial waste

Mar. 2022

Know the facts
The first step to a peaceful world

Enforcing human rights due diligence

KAYABA Group Report 2022

28

ESG Management

Response to TCFD
We are aware that taking measures against climatechange is one of the most important initiatives in which
the Kayaba Group should engage. During FY2022, wewill adopt the Task Force on Climate-Related Financial
Disclosures (TCFD) framework, planning to further
strengthen our efforts.

Going forward, we will understand the risks andopportunities that accompany climate change based on
TCFD recommendations, incorporate them into business strategies, and actively disclose information,
thereby endeavoring to increase corporate value.

GovernanceRisk Management

The Kayaba Group has established the Sustainability
Committee as an organization that formulates policies concerning management related to a range of environmental,social, and governance issues, including countermeasuresagainst climate change issues.
In addition to beforehand discussions on the policies andstrategies to be determined by the Board of Directors, theSustainability Committee also discusses management,
evaluation, and measures related to the progress of achieving
targets in order to fully demonstrate the supervisory function
and monitoring function that the Board of Directors is intended to accomplish. In FY2021, we discussed numerical targets
related to climate change (CO2 emissions volume*1 decreaseby 50% compared to 2018) and the establishment of anindustry ESG Working Team (one that will promote concrete
action on climate change issues in all business units).

The Kayaba Group has launched a working team to determineand start investigations into the respective risks and opportunities for Automotive Components (AC) Business, HydraulicComponents (HC) Business, and the Special-purpose Vehicles
Division.
Currently, the short-, medium-, and long-term risks andopportunities for each business unit are under analysis. Goingforward, we will commence quantitative analyses, such as theimpact on financial affairs, and release information in line withthe framework for information disclosure that is recommended by the TCFD.

Indicators and Targets
Kayaba has set forth the target of reducing CO2 emissions* by
50% (compared to FY2018) by 2030. We are actively pursuingthis goal in ways such as starting energy conservation activities at each manufacturing plant, introducing renewableenergy through the installation of solar panels, and reducing
the emissions of CO2 in logistics.
Under current circumstances, we have calculated the
Scope 1 and 2 CO2 emissions volume of 28 plants, including
five domestic affiliates and 17 overseas affiliates. Goingforward, we plan to calculate the Scope 1 and 2 as well as the
Scope 3 CO2 emissions volume of all 33 companies of the
Kayaba Group. In addition, we are working to bring the ratio ofrenewable energy use up to 15% by 2025, and construct a
production system with zero CO2 emissions volume.

Strategy
The Kayaba Group has the target of achieving carbon neutrality by 2050. We are working to achieve greenhouse gas output
reduction targets, taking measures to decrease materials withenvironmental load in our products, and developing productswith low CO2 emissions and that conserve energy. Also, we
have started to select and conduct qualitive investigations intorisks to business continuity, such as risks related to the supplyof energy and raw materials due to climate change and risks
due to the changes in consumer needs, as well as the business opportunities that will arise from their impact. Goingforward, we will analyze physical scenarios and transition
scenarios, and incorporate the results into our business strategies and management plans.

* Scope1, 2Targets and Actual Results
Targets
Year ofachievement

Details

FY2021

FY2021

3% reduction of CO2 emissions level (Scope 1 and 2) compared to FY 2020

-11.6%FY2025

Renewable energy usage rate of 15%

0.1%

FY203050% reduction of CO2 aggregate emission (Scope 1 and 2) compared to FY 2018

Numerical target of Kayaba (applicable to Kayaba’s six plants)

29

Actual results

KAYABA Group Report 2022

-16.2%

Value Creation

Corporate GovernanceCorporate Governance Principles
management structure, highly fair and transparent management
oversight centered on the Board of Directors, and continuous
efforts to strengthen and enhance our corporate governancebased on the Corporate Spirit and the following basic policies.

Introduction

In order to fulfill our corporate social responsibility to contributeto society as well as to meet shareholders’ expectations byrealizing sustainable growth and the increase of corporate
value, Kayaba works to ensure a speedy, efficient

Strategy

Basic Policies
1. We shall respect the rights of shareholders, and ensure the equal and fair treatment of all shareholders.
2. 	We shall take the benefits of stakeholders into consideration and endeavor to appropriately cooperate with those stakeholders.
3. 	We shall disclose not only information on compliance with the relevant laws and regulations, but also actively provide
important and/or useful information to stakeholders for their well-informed decision making.
4. 	The Board of Directors shall be cognizant of its fiduciary responsibility and accountability to shareholders, and shall appropriately fulfill its roles and responsibilities in order to promote sustainable and stable corporate growth and increase
corporate value, profitability, and capital efficiency.
5.	We shall engage in constructive dialogue with shareholders, and make efforts to obtain shareholders’ support regarding theCompany’s business policies and also reflect shareholders’ opinions and concerns in the improvement of management.

1. Appointment of female executives (one outside director,
one outside Audit & Supervisory Board member) (As ofJune 23, 2022)
2. Established Sustainability Committee (March 2022)

Value Creation

Efforts to meet shareholders’ expectations by realizing
sustainable growth and the increase of corporate value are as
follows.

Corporate GovernanceInitiatives to Achieve Sustainable Growth and Increase Corporate Value

Corporate Governance Overview and Structure
Kayaba is a company with an Audit & Supervisory Board as
described under the organizational design stipulated by theCompanies Act of Japan, and has a system of corporate
governance in place that centers on the Board of Directors

and Auditors / the Audit & Supervisory Board. Also, we haveadopted the Executive Officer System, seeking to increase
the speed of decision making and optimize corporate
management.
Data

Relationship between engines and organizations
Relationship of committee to engines and organizations

General Meeting of Shareholders
Elect /Dismiss

Advisory Committees(Nomination, Compensation)

Consult

Elect /Dismiss
Consult

Board of Directors

ReportConsult

Regional
Instruction
Representative Director,
Representative
Report President Executive Officer
Officers

Audit &
Supervisory Board

ReportReportApplication

Audit

ReportReportConsult
Approval
Instruction

Instruction
Cooperation

Sustainability Committee
ReportInformationexchange

Risk Management Committee(Board of Directors Subcommittees)(Chair: President)

Audit

Instruction
ReportBoard of Executive Officers
and other management meetings

Instruction

Compliance Committee(Chair: President)

Instruction

Approval
Proposal
Recommendation
Supervision

Responsible head office departments, operational headquarters,
Group companies, branches, representative offices

Audit

Draft
ReportReportReportInstruction

Elect /Dismiss

SurveyInstruction
SurveyAudit firm

Instruction

Audit Department
J-SOX OfficeEvaluation
based on J-SOX Audit

KAYABA Group Report 202230

Corporate Governance

Board of Directors
The Board of Directors comprises ten members, including four
outside directors. In principle, the Board of Directors meetsonce a month. The Board of Directors makes decisions basedon laws, the Articles of Incorporation and Company regulations,and deliberates on policies and other important matters involving management. The Board of Directors also oversees the
management of business operations. In addition, four outside
directors are registered as independent officers.

report on the status of business execution, and the Global
Executive Meeting, where regular reports on business conditions are submitted to those responsible for overseeing
management of the Kayaba Group companies overseas. In
addition, we are working to strengthen Group management
oversight and have established the Operational Review with the
President Meeting, where the president executive officer visits
production sites to review and follow-up on matters related topolicy development and important manufacturing issues.

Board of Executive Officers
The Board of Executive Officers, a body that reports directly
to the Board of Directors, deliberates on important mattersconcerning management from a Company-wide perspective.

Audit & Supervisory Board
The Audit & Supervisory Board comprises four full-time andone part-time Audit & Supervisory Board members, two ofwhom are full-time and one part-time are outside members.
Through audits by outside Audit & Supervisory Board members, we expect to achieve effective management oversightand have concluded that an effective governance system is inplace. In addition, three of the outside Audit & Supervisory
Board members are registered as independent officers.

Other Management Committees
We have also established other management committees,
including the Domestic Affiliated Companies Management
Meeting, where functional and business divisions/departments

The members of each of the aforementioned organizations are as follows. (As of June 23, 2022)
Domestic affiliated companies
management
meeting◎

Board of
Executive
Officers
○

○

◎

○

Takaaki Kato

○

○

◎

Member of the Board of Directors,
Executive Vice President Executive Officer

Keisuke Saito

○

○

○

Member of the Board of Directors,
Executive Vice President Executive Officer

Hajime Sato

○

○

○

Director and Senior Managing Executive Officer

Masahiro Kawase

○

○

○

Outside Director

Rokurou Tsuruta

○

○

○

Outside Director

Shuhei Shiozawa

○

○

○

Outside Director

Masakazu Sakata

○

○

○

Outside Director

Akemi Sunaga

○

○

○

Audit & Supervisory Board Member (Full Time)

Hideki Nonoyama◎

Audit & Supervisory Board Member (Full Time)

Osamu Kunihara○

Outside Audit & Supervisory Board Member

Junichi Tanaka○

Outside Audit & Supervisory Board Member

Masahiko Sagara○

Outside Audit & Supervisory Board Member

Junko Watanabe

11 executive officers

−

Name

Board ofDirectors

Director, Chairman

Yasusuke Nakajima

Representative Director, President Executive Officer

Masao Ono

Representative Director, Executive Vice President Executive Officer

Title

○

○
○

Note: ◎ denotes the chairperson

Audit &
Supervisory
Board

○

For details, see “Outside directors andoutside Audit & Supervisory Board Members” on the website
https://www.kyb.co.jp/english/company/governance.html

Evaluation of the Effectiveness of the Board of Directors(1) Evaluation Method
Respondents at the time of evaluation:
11 respondents, comprising seven directors (including three
independent outside directors), four Audit & Supervisory Board
members (including two independent outside Audit &Supervisory Board members)
Survey period: February to March 2022
Methodology:Administration, analysis and evaluation of aself-assessment questionnaire
Key questionnaire items:
I. Composition of the Board of Directors and balance of knowledge and experienceII. Administration of the Board of Directors
III. Discussion topics at meetings of the Board of Directors
IV. Systems supporting the Board of Directors
V. Relationship and dialogue with shareholders

31

KAYABA Group Report 2022

Number of survey questions: 38
Questionnaire method:
Evaluation of the current situation: Evaluate on a scale of 1 to 4
Specific suggestions for improving the current situation: Openended response(2) 2021 Results
Comments and suggestions were submitted regarding thematters to be discussed at Board meetings and the composition of the Board to strengthen its supervisory functions, andthe evaluation results and comments from respondents werereported and shared at a meeting of the Board of Directors.
(3) Future Actions
Based on the results, the Board will continue to discuss bothinternal and external issues in order to further improve its
effectiveness.

Officer Compensation(1) Compensation Structure

Type of compensation

Fixed compensation*1(Basic compensation）

Maximum total compensation

Date of resolution of theGeneral Meeting of
Shareholders

Calculation process

Directors¥30 million per month(¥360 million per year)

June 27, 1997, 75th
Ordinary General Meetingof Shareholders

Consultation with
Compensation
Committee

Audit & Supervisory
Board members¥10 million per month(¥120 million per year)

June 23, 2022, 100th
Ordinary General Meetingof Shareholders―

40% or less and ¥200 million per yearof total compensation (Fixed compensation + Performance-linked
compensation)

June 23, 2022, 100th
Ordinary General Meetingof Shareholders

Consultation with
Compensation
Committee

Within 20,000 shares per year(¥75 million per year)

June 23, 2022, 100th
Ordinary General Meetingof Shareholders

Consultation with
Compensation
Committee

Directors(Excluding outside
directors)*1 The limit on total fixed remuneration for directors does not include salary for employees concurrently serving as directors.
*2. There is an upper limit of 1.0% of profit attributable to owners of the parent in the fiscal year preceding the fiscal year in which performance-linked compensation is paid.

(2) Compensation Decisions
achievement of the indexes that form the basis of its calculation, and is determined by a resolution of the Board of
Directors made upon receiving a report from theCompensation Committee and within the range of the limit for
the total remuneration amount that is determined at theGeneral Meeting of Shareholders.
Fixed remuneration for Audit & Supervisory Board members isdetermined in consultation with Audit & Supervisory Board
members, within the limit on total compensation decided at theGeneral Meeting of Shareholders.

Data

For director compensation, the discretionary Compensation
Committee composed of representative directors and outside
directors verifies the propriety of the criteria for calculating fixedand performance-linked compensation and reports the proprietyof criteria to the Board of Directors.
Fixed compensation for directors is determined by resolutionof the Board of Directors, upon receiving a report from theCompensation Committee, within the limit on total compensation decided at the General Meeting of Shareholders. The
performance-linked compensation of Directors (excluding
outside directors) is in accordance with the level of(3) Calculation and Determination of Performance-Linked Compensation
Performance-linked compensation (bonus) consists of monetary compensation and transfer-restricted stock compensation.
Monetary compensation is limited to 1.0% of profit attributable to owners of the parent in the previous fiscal year.
However, the total amount of remuneration is determined bya resolution of the Board of Directors upon receiving a reportfrom the Compensation Committee based on a predetermined proportional amount (40% of the total amount of thebasic compensation for directors excluding outside directors
and the monetary compensation portion of bonuses, as wellas the maximum amount determined by resolution at theGeneral Meeting of Shareholders [200 million yen per year]) in
accordance with the position of each director, and we thenremunerate to each director.
In stock compensation, the number of shares provided isdetermined by a resolution of the Board of Directors uponreceiving a report from the Compensation Committee basedon the level of achievement of the indicators that are the basis
for calculating performance-linked compensation and thepredetermined number of shares provided in accordance withthe position of each director, and we then provide transfer-restricted stock compensation to each director.
The indicators that are the basis for calculating performance-linked compensation are calculated according to thedegree of achievement of the consolidated earnings forecastin the previous fiscal year along four calculation indicators(amount of segment profit, ratio of segment profit, amount of
profit [loss] attributable to owners of the parent, ratio of profit[loss] attributable to owners of the parent). In a case where
there is a loss attributable to owners of the parent, performance-linked compensation will not be paid.
Regarding decisions on the individual remuneration
amounts of fixed compensation and performance-linked
compensation, our policy is for the Compensation Committee
to inspect the validity of the decisions, report to the Board of
Directors that such validity was found, and to conduct calculations and decisions based on the content of the report.

KAYABA Group Report 2022

Value Creation

Corporate Governance

Performancelinked
compensation(Bonus (stock))directors and Audit & Supervisory Board members only
receive fixed compensation according to their respectiveroles, and in view of their independence do not receive
performance-linked compensation.

Strategy

Performancelinked
compensation(Bonus (monetary))*2

Eligible officers

Introduction

Officer compensation consists of fixed monthly compensation(basic compensation) according to position and responsibilities, and performance-linked compensation (bonus) that varies
depending on the Company’s business results. Outside

32

Corporate GovernanceInternal Control and Compliance
Basic Policy
In order for corporate governance to function effectively, we are promoting a basic policy for our internal
controls system that is based on the Companies Act ofJapan and determined by the Board of Directors.
Particularly in FY2021, we established theCompliance Committee which is chaired by the
President, and enacted a compliance program ofconcrete measures. We are carrying out the program inorder to strengthen and thoroughly instill compliance inthe Kayaba Group.

Key Points for Internal Control

Compliance Promotion• The compliance program was enacted under our compliance system, which is headed up by theCompliance Committee. It is being rolled out and implemented at Group companies, and we are
evaluating and reviewing the results. The issues we uncover now will be used to improve
initiatives in the next fiscal year.

Risk Management Initiative• The Risk Management Committee reports to the Board of Directors, and based on the Risk
Management Rules, it identifies material risks the Group must address and the business units
responsible for managing them, and conducts risk reduction initiatives at each responsible
business unit.

Responding to Internal Reports andImproving the Effectiveness of
the Reporting System• We respond to reports in order to ensure the prevention or early-stage discovery and correctionof non-conforming acts. Moreover, we are making improvements for the purpose of achieving ahighly trustworthy reporting system that allows individuals to report without hesitation.

FY2021 Initiatives
1. Promoting corporate governance at the KayabaGroup1) Compliance Reinforcement Month 	We designated October as ComplianceReinforcement Month, and conducted various
activities to promote heightened complianceawareness among all employees, including
President’s message, call for compliance mottos,
repeated in-house training, Compliance Top
Management Training Course, etc.
2) Compliance retraining	We confirmed the results of the Compliance

Survey that we took during ComplianceReinforcement Month in the previous fiscal year,
and continued to provide re-education.
2. R isk Management Initiatives
Conducted risk-reduction initiatives for 11 key risks
3. R
 esponded to internal reports, made effectiveness
improvements and responded to reported cases,
and supported the responses of Group companies.
Reported regularly to the Compliance Committee.

Basic Policy on Risk Management
At the Kayaba Group, the Risk Management
Committee reports to the Board of Directors, andbased on the Risk Management Rules, it identifies
material risks the Group must address and the business units responsible for managing them, conducts
risk management initiatives at each responsible business unit, and presents quarterly updates to the Boardof Directors.

33

KAYABA Group Report 2022

Also, the Sustainability Committee is in charge of our
response to risks related to climate change. They
conduct initiatives such as uncovering the risks andopportunities presented by climate change in cooperation with the Risk Management Committee.

Internal Control System
Compliance Committee(Chair: President)

Introduction

General Manager,
CSR & Safety Control Division
Group Compliance Promotion Office(Internal Control Department)

Regional Headquarters Compliance Managers
Presidents of Regional Headquarters and Large-scale Domestic Subsidiaries
Instruction/Report

Instruction/ReportCompliance Officers(General Manager, Internal Control Department)
Instruction/ReportCompliance Managers
Presidents of Domestic andOverseasGroup Companies

Instruction/Report

Key Compliance Personnel(Department Managers)

Regional Headquarters
Compliance Officers
Instruction/Report
Instruction/ReportCompliance Managers
Presidents of Affiliated Companies

Instruction/Report

Key Compliance Personnel
at Each Site
Cooperation

Instruction/Report

Regional headquarters
Compliance Officers

Key Compliance Personnel
at Each Site

Cooperation

Cooperation

Person in Charge of Compliance

Person in Charge of Compliance

Person in Charge of Compliance

KayabaSubsidiaries

Regional Headquarters

Affiliated Company

officers. Regional headquarters and large-scale domestic subsidiaries regulate their own companies as wellas their affiliates and subsidiaries, while the Kayaba
regulates itself and subsidiaries other than thosementioned above.

Data

Basic Policy on Information Security
Kayaba works to ensure information security by settingout a Standard Information Security Policy and appointing persons responsible for information security
management in order to strengthen information security
on a global level. Nevertheless, in addition to the increasingly evolved and complex information systems ofrecent years and increased frequency of access fromoutside the Company by employees as a result of
remote work becoming standard, cyberattacks havebecome increasingly complex and diverse, leading toincreased risks associated with information security.
Therefore, we are taking measures to defend against
the latest risks, such as cyberattacks, through self-check
evaluations and evaluations conducted by third parties.

Value Creation

Person in Charge of Compliance

The Compliance Committee conducts activities such as
deliberating on the fiscal year compliance program,which is drafted by the Compliance Promotion Office.
In addition to drafting the program, the secretariat
provides support for to regional headquarter compliance managers and regional headquarter complianceCorporate Governance

Cooperation

Strategy

Instruction/ReportCompliance Managers(General managers of business divisions/departments and functional divisions/departments, and factory managers)*KYB-YS, Takako

Major efforts in FY2021• Established a cybersecurity response organization(KYB-CSIRT)• Conducted routine education and drills for all executives and employees• Conducted self-assessment in accordance with thestandard automobile industry security guideline• Hired third-party security evaluation organization to
conduct vulnerability assessments• Installed the latest security software• Joined the Nippon CSIRT Association (August 2022)

KAYABA Group Report 2022

34

Corporate GovernanceManagement Team (As of June 23, 2022)* Independent Directors and Auditors

Directors

Position

Yasusuke Nakajima

Masao Ono

Takaaki Kato

Representative Director,
Chairman

Representative Director,
and President

Representative Director,
Executive Vice President
Executive Officer

Chief Executive Officer (CEO)In Charge of Global Corporate
Finance (Chief Financial Officer),
North, Central & SouthAmerican Operations andPublic Relations/IR

June 2005

June 2017

June 2015

Keisuke Saito

Hajime Sato

Masahiro Kawase

New

New

Work in Charge

Appointment of
directors

Position

Member of the Board of
Directors, Executive Vice
President Executive Officer

Member of the Board of
Directors, Executive Vice
President Executive Officer

Member of the Board of
Directors, Senior Managing
Executive Officer

Work in Charge

In Charge of ESG Promotion,
China Operations and Seismic
Isolation / Mitigation
Correspondence Operations

In Charge of Sales andSpecial Purpose
Vehicles Division

In Charge of Automotive
Components Operations
and Engineering

June 2011

June 2022

June 2022

Appointment of
directors

Rokurou Tsuruta*

Shuhei Shiozawa*

Masakazu Sakata*

Akemi Sunaga*

Member of the Board of
Directors (Outside)

Member of the Board of
Directors (Outside)

Member of the Board of
Directors (Outside)

Member of the Board of
Directors (Outside)

June 2015

June 2016

June 2020

June 2022

New

Position
Appointment of
directors

35

KAYABA Group Report 2022

Introduction

Audit & Supervisory Board Members

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member(Outside)

Audit & Supervisory
Board Member(Outside)

Osamu Kunihara

Junko Watanabe*

New

New

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member(Outside)

Value Creation

Masahiko Sagara*

Strategy

Junichi Tanaka*

Corporate Governance

Hideki Nonoyama*

Data

Executive Officers
Managing Executive

Takashi Tezuka

In Charge of Quality and Aircraft Components Division, General Manager, Quality Division

Officers

Ryuji Uda

General Manager, Suspension Headquarters, Automotive Components Operations

Minoru Ishikawa

General Manager, CSR & Safety Control Division and General Manager, General Affairs & Human
Resources Division

Ichio Nemoto

General Manager, Hydraulic Components Operations, and General Manager, Gifu South Plant

Takashi Saito

In Charge of European Operations, General Manager, Finance & Accounting Division

Shozo Amano

In Charge of Production, General Manager, Production Division

Masaru Tsuboi

In Charge of China Operations (Deputy), Chairman & President, KYB (China) Investment Co., Ltd.

Deputy Managing

Tomoki Takaoka

General Manager, Purchasing & Logistics Division and General Manager, Corporate Planning Division

Executive Officers

Minoru Tamai

General Manager, Sagami Plant, Hydraulic Components Operations

Toshimichi Izeki

Deputy General Manager, Engineering Division, General Manager, Basic Technology R&D Center andCurator, KYB Museum

Shinichi Sugioka

General Manager, Motorcycle Headquarters, Automotive Components Operations, and President,
KYB Motorcycle Suspension Co., Ltd.

KAYABA Group Report 2022

36

Value Creation

Environmental Initiatives

Environmental Management
Basic Policy
To prevent climate change and achieve a sustainable
society, Kayaba creates products that are safe forpeople and the environment, and actively conducts
environmental preservation initiatives.
In order to strengthen our efforts toward helping toachieve the SDGs and carbon neutrality, which is a
SloganProtect the Green Earthand Create Environmentally
Friendly Products

global target, we established the ESG Promotion Officein FY2021 to further enhance our environmental initiatives. Also, we established the CN Promotion Office,which specializes in responding to carbon neutrality
and further enhancing our efforts aimed at achieving it.

Basic Environmental Policies
The Kayaba Group creates user- and earth-friendly products. We actively promote
environmental conservation activities as an important tool for evaluating management.
1.	Develop and build up production and corporate activities based on recycling to
reduce impacts on the environment.
2.	Strive to ensure long-term and sustainable operations throughout the entire
Kayaba Group.
3.	Work to promote relationships with local communities and contribute to society
as a good corporate citizen.
4.	Clarify the role of each employee and encourage the participation of all employees.

Environment & Safety Management System
We are systematically expanding ourenvironmental preservation efforts. We
adopted the international standard ISO
14001 for environmental management
and established the Environment &Safety Committee with the Directors incharge of the environment and safety
serving as its leaders. We are working
with a unified purpose on our efforts
for environmental preservation andsafety under the system shown in thechart on the right. Also, we monitor
and revise our initiatives by conducting
environmental and safety audits.

President
Sustainability Committee
Executive Officer in chargeof Environment & Safety

Respective business units*

Environment & Safety
Committee
Chairman:
Executive Officer in charge ofEnvironment & Safety

Subcommittees
Environment Preservation Subcommittee
Energy-saving Plant Subcommittee
Safety and Health Subcommittee

Plant General Manager

Overall Safety Supervisor

Environment Supervisory
Officer

Safety and HealthCommittee

Environment Supervisory
Committee

Subcommittees

Subcommittees*Implemented ISO 14001 at each business units.

ISO 14001 Certification Acquisition (As of April 2022)
Japan

Overseas

Gifu North Plant(Including KYB Kanayama Co., Ltd.)North America

KYB Americas Corporation、Takako America Co., INC.

BrazilKYB Manufacturing do Brasil Fabricante de Autopecas S.A.

Spain

KYB Suspensions Europe, S.A.U.、KYB Advanced Manufacturing Spain,
S.A.U.

Czech

KYB Manufacturing Czech, s.r.o.

ThailandKYB (Thailand) Co., Ltd.、KYB Steering (Thailand) Co., Ltd.

Indonesia

PT. Kayaba Indonesia

Malaysia

KYB-UMW Malaysia Sdn. Bhd.

Takako Industries, Inc. (Shiga Plant)

China YB Industrial Machinery (Zhenjiang) Ltd.、K
Changzhou KYB Leadrun Vibration
Reduction Technology Co., Ltd.、
Wuxi KYB Top Absorber Co., Ltd.

KYB-YS Co., Ltd. (Head Office Plant)

TaiwanKYB Manufacturing Taiwan Co., Ltd.

KYB Trondule Co., Ltd.

VietnamKYB Manufacturing Vietnam Co., Ltd.、
Takako Vietnam Co., Ltd.

Gifu South Plant(Including Gifu East Plant, Production
Technology R&D Center, Machine Tools
Center, KYB Motorcycle Suspension Co., Ltd.)
Sagami Plant(Including the Basic Technology R&D Center)
Kumagaya Plant

37

KAYABA Group Report 2022

Environmental Conservation Efforts
emissions volume, and amount of all waste matter
showed an increase over 2020, but when compared to2019, we have maintained a steady reduction andimproved the output level. While we achieved ourtarget for the amount of energy consumed on a global
evaluation, but Kayaba did not reach its target due tofactors such as the absorption merger of a domestic
affiliate. 2022 is the final year of the medium-term
management plan, in which we will strengthen ourenergy conservation initiatives aimed at achieving thetarget.

Introduction
Strategy

Kayaba is working to conserve energy and reduce
waste matter under the medium-term management
plan (three years) that was launched in 2020. In 2021,
we added new targets for CO2 emissions volume(output level) reductions as a countermeasure against
climate change. Amidst the ongoing COVID-19 pandemic, there was a temporary decrease (worsening of
output level) in the aggregate amount of energy consumed and CO2 emissions. However, with the world
trending toward a recovery in demand, the amount ofenergy consumed (crude oil equivalent volume), CO2

Mid- to long-term Policy for Achieving Carbon Neutrality (CO2 Emissions Volume Reduction)
Set up cogeneration renewal / private solar power generation
Various energy conservation activities, energy changeover (electrification)

CO2
emissionsvolumePrivate power
generation(renewableenergy)50% decrease
compared to2018

Scope1
Direct emissions from the combustionof gas and other fuelsGreenelectric
power

CO2
emissionsvolume

2021

2022

2025

Achievements in FY2021• Installed solar power generation equipment• Optimized hours of operation for cogeneration power
equipment• Updated and improved use of highly efficient compressor• Optimized hours of operation for chiller(cooler circulation system)• Thermally insulated heat treatment equipment for plating• Installed heat insulation in steam piping, removed waste piping

2030

Carbonneutrality

2050

Data

2018

Value Creation

Environmental Initiatives

Renewable energy usage rate 15%
Scope2
Indirect emissions from electricity(fossil fuel)• Installed energy saving welding machines and dust collectors• Reduced air and steam supply loss (such as by repairing leaks)• Installed energy saving equipment to match repairs andupgrades• Reduced standby electric power consumption• Installed LED lighting and motion sensors• Improved shipping efficiency, employed consolidated shipping,
reduction of number of shipments

Creating a System with Minimum Energy Use and Waste Matter
Currently underway–2030 (Mid-term goals)

2050 (Ultimate goal)• Attention to environmental concerns,
such as the amount of energy consumed and CO2 emissions• Use of low CO2 emission energy,
conducting initiatives to prevent climatechange• Promotion of a range of policies
through visualizing energy• Energy and environmental maintenancebuilt on ESG thinking and that shows
our awareness of the need to achieve asustainable society and environment• Achieve renewable energy usage rateof 15% by 2025
• Energy reduction: continue 1% annual
reductions• Cut CO2 emissions volume by 50%• Continue to reduce industrial waste andimprove recycling rate
• Promote the visualization of energy
though the use of IT• Achieve carbon neutrality• Visualize and manage energy consumption though the use of IT• Minimize industrial waste and achieve ahigh recycling rate

KAYABA Group Report 2022

38

Environmental Initiatives

Performance Report on FY2021 Initiatives○: Target achieved

GlobalKayaba(Kayaba, five domestic companies, 17 overseas companies)

Theme
CO2 emission volume
CO2 emission volume
Climateper basic unitchangecounterEnergy consumption
measures Energy consumption
per basic unit
General waste
General waste perbasic unit
Reduction Metal scrap
of industri- Metal scrap per basic
al wasteunit
Industrial waste
Industrial waste perbasic unit
Recycling rate
Recycling
Final disposal volume

Numerical
targetFY 2021
achievements

×: Target not achieved(six plants)

Numerical
targetEvaluation

FY 2021
achievements

Evaluation(Ref.) 256,583 tCO2 or less

284,456 tCO2

ー(Ref.) 75,596 tCO2 or less

81,210 tCO2ー0.755 tCO2/¥ million or less

0.687 tCO2/¥ million○

0.501 tCO2/¥ million or less

0.457 tCO2/¥ million○

158,374 kl or less

155,249 kl○

47,945 kl or less

46,612 kl○

0.386 kl/¥ million or less

0.375 kl/¥ million○

0.258 kl/¥ million or less0.262 kl/¥ million

×(Ref.) 4,181 t or less

3,512 tー(Ref.) 532 t or less

343 t

ー

0.010 t/¥ million or less0.008 t/¥ million○

0.003 t/¥ million or less0.002 t/¥ million○(Ref.) 41,735 t or less

38,549 tー(Ref.) 19,422 t or less

18,358 tー0.102 t/¥ million or less0.094 t/¥ million○

0.105 t/¥ million or less

0.105 t /¥ million○(Ref.) 19,839 t or less

19,371 tー(Ref.) 3,255 t or less

2,809 tー

0.048 t/¥ million or less0.047 t/¥ million○

0.018 t/¥ million or less0.016 t/¥ million○ーー

92.5 % or more
3.22 % or more

92.9%
3.16 %

○
○

–
–

–
–

Major Initiatives planned for FY 2022
Climate change countermeasures (energy conservation, low CO2)
Switch to high-efficiency lighting such as LED and LVD, incorporate
new cogeneration sources, eliminate air leaks, reduce the amount of
air used in plants, initiative to decrease loads with high-efficiency air
conditioning and equipment temperatures, promote the installationof solar power generation equipment, and more

Measures to reduce waste matter (environmental conservation)
Reduce paint residue volumes with bioprocessing, install equipmentthat reduces the volume of waste processed, convert waste tovaluable materials and promote recycling activities

Note:	Energy refers to the total of crude oil conversion, such as electricity and fuel. Regarding the decrease of industrial waste, the calculations exclude valuable materials(recycling or reuse) generated by initiatives to promote recycling.
	Output level are calculated based on Kayaba’s regulations, which take shipping into account.
Reference: At the present time, the numerical target for the aggregate volume of emissions has not been set, and we are undergoing investigations related to setting the targets.

Product Compatibility with Environmental Regulations
Regulations and requirements such as the REACH
requirements, the ELV directive*1 and the RoHS directive*2 are being greatly tightened every year. Kayaba is
identifying the trends of these regulations and endeavoring to incorporate them into its technology
development plan.
Also, in addition to responding to regulations on

chemical substances, we are conducting initiatives fora low-carbon society and designing products withrecycling in mind.
ELV directive: A directive that came into effect in the EU in October 2000 to
reduce environmental impact caused by end-of-life vehicles.
*2 R
 oHS directive: A directive that came into effect in the EU in July 2006 that
restricts the use of specific hazardous substances found in electrical andelectronic products.
*1 

Examples of Environmental Initiatives
Introduction of solar power generation system (Adoption of renewable energy)
We had installed solar panels on the roof of Gifu North Plant’s cation coating building. Installationof solar panels (system capacity: approx. 160 kW) contributes to CO2 emissions reduction. It cuts
the current annual CO2 emissions of approximately 75 tons per year or approximately 40,000 L ofoil equivalent.
Plan to Purchase Carbon Neutral City Gas (Adoption of green energy)
Carbon neutral city gas reduces CO2 emission volume by turning the CO2 generated from theprocesses of natural gas extraction through to combustion into CO2 credit* or carbon offsetting.
We have an agreement with Toho Gas Co., Ltd., involving carbon neutral city gas, and it is contributing to our CO2 reductions.
*CO2 credit: These certificates are issued by an inspections organization that confirms the effects of environmental conservation projects in places all around on CO2
reductions, and can offset emissions volumes in the production and transport of gas.

39

KAYABA Group Report 2022

Environment Data
Introduction

Environmental Impact by Business Activity
We use a range of resources, including energy, water,
and chemical substances. We are making effective useof limited resources, taking into account climatechange countermeasures, and moving ahead withenergy conservation activities as well as reduction
activities for the emission of materials such as waste
matter and CO2.

Production Activities
Development/Design■Raw materials
・Steel, cast and forged materials 185,320t[ー]■Used energy (Crude oil equivalent)・Green electricity

・Electricity from fossil fuel sources 26,198kL[106,245kL]

・Fuel, gas, steam[41,437kL]

20,403kL■Chemical substances (PRTR law target substances)

274t■Water (water supply)[ー]

1,571,109kL [3,027,216kL]
Recycling inside Company

21,865t[62,155t]■Emission into atmosphere

Production

・CO2

81,210tCO2[284,456tCO2]

・Nox

35.5t

[ー]

・Sox

2.01t

[ー]

Distribution• Development of technologies andproducts that are environmentallyfriendly as a result of recycling,energy saving and safety, etc.
• Promotion of green procurement• Promotion of modal shift• Scrap (Effective utilization in the KYB Group)• Deteriorated solution for chrome plating• Water used for rinsing in chrome plating process, etc.

Production process■Amount of waste (Including reuse)

Procurement

・Dust■Water (drainage)

0.27t

[ー]

1,187,931kL[1,910,752kL]

Recycling outside Company• Metal scrap • Waste oil • Waste plastic• Grinding powder • Waste thinner • Paper, cardboard, etc.

Scrap

Recycling company

Related company

Data

Environmental Accounting
The amounts of investment and cost were calculated with reference to the Environmental Accounting Guidelines,
2005, provided by the Ministry of the Environment.
FY2021 Results(Millions of yen)

Cost type(1)-1Pollution prevention cost(1) Businessarea cost(1)-2 Global environmental
conservation-cost(1)-3 Resource circulation cost

Major contents
Air pollution and water pollution prevention activities
Maintenance and inspection of pollution prevention facilities
Analysis and measurement of atmosphere and water quality
Energy conversion
Energy-saving activities (Investments, etc.)
Recycling of plant waste
Reduction of industrial waste(2) Upstream/downstream cost(3) Management activity cost(4) R&D cost(5) Social activity cost

Maintenance and management of ISO 14001, etc.
Monitoring of environmental impact and employee education
Environmentally friendly product development
Lightweight products and products containing less hazardous
chemical substances
Support of non-profit environmental protection
Afforestation and maintenance of scenery around plants(6) Environmental remediation cost(7) Other cost

Value Creation[7,567kL]

OUTPUT

Environmental Initiatives

11kL

Strategy

INPUT

Because there are concerns regarding the levels of
danger and toxicity of chemical materials, we are conducting risk assessments and taking the appropriate
safety measures to the greatest extent possible. Also,
we are responding to the newest round of revisions tothe chemical substance regulations of the Industrial
Safety and Health Act, which are scheduled for FY2023.

Internal environmental conservation
Welfare conservation

Subtotal
Grand total

Invested
amount

Cost

65.5

213.8

8.3

13.6

0.0

231.6

0.0

0.0

0.0

109.2

64.7

119.8

0.0

4.7

0.0

0.0

9.7

0.0

148.2

692.9
841.0

Note: Classification and Definition of Environmental Conservation Costs
	Invested amount: Expense for the purpose of environmental conservation during the target period with effect that continues for a number of terms and running cost for
those periods. Cost: Cost or loss generated from expenditure of finances/services for the purpose of environmental conservation.

KAYABA Group Report 2022

40

Environmental Initiatives

CO2 Emissions(tCO2)

Category

Description
Direct emissions from company-owned and controlled resources(Fuel combustion, industrial processes)
Indirect emissions from the use of electricity, heat and steam
supplied by other companies
Indirect emissions other than Scope 1 and 2 (Other company’s
emissions related to the activities of the company) Total of thefollowing 2 to 7 categories
Expansion of production equipment (If construction was done overmultiple years, it is accounted for in the last year when construction was completed)
Upstream emissions of purchased fuels (Extraction, production,etc)

Scope 1
Scope 2
Scope 3*2

2 Capital Goods

Fuel- and EnergyRelated Activities
Not Included in Scope 1 Upstream emissions of purchased electricity ((extraction, production,and transportation of fuels consumed in the generation of electricity, etc.)
or Scope 2
Upstream Transportation Logistics*3 of procurement, side-holding, and shipping
4（t）(Shippers own)
and Distribution
150,０００ valuable
Waste Generated inTransportation and disposal of waste materials (excluding
5
0.200
materials) other than the company’s own
Operations

3

6 Business Travel

Business travel of employees

7 Employee Commuting

Transportation of employees

Domestic
Overseassubsidiaries subsidiaries*1

Kayaba39,162

4,496

44,05887,71642,04829,193

125,498

196,739

52,03921,206

17,36390,60818,395

8,028

353

26,777

10,320802

2,572

13,694

7,133

5,280

304

12,717908

Calculated in

6,885

100,０００

Total

0.221

2,524
724
6,059

7,793
（t）

0.236

0.250

4,712

0.212
12,754

19,989327

314

01,364
.200

1,150

1,066

8,274

0.150

45,79744,058*1. Includes North America (KAC, TAC), Spain (KYBSE, KAMS) and the Czech Republic (KMCZ). Other positions are46,315
under calculation
39,4510.100*2. The output level used for calculations was determined in reference to the “Emission output level database for calculating the greenhouse gas emissions of an organization
5０,０００6,473
5,333
via its supply chain (Ver. 3.2)” of Japan’s Ministry of the Environment
4,496
4,345
*3. Logistics: Shipping, loading/unloading, storage
0.050
40,144
39,47339,16236,386０

Environment-related Data■
■ KAYABA

CO2 Emissions: Scope 1
0.236

0.221

0.200

2020

０

(FY)

2021

Basic unit (all bases)

CO2 Emissions: Scope 2（t）
150,０００

2019

2018

■ Domestic subsidiaries ■ Overseas subsidiaries

0.212

（t）

（t）

0.250

300,０００

（t）

0.542

0.52

0.600

0.475

0.474
0.200

100,０００0.150

46,31545,797

6,473

5,333

5０,０００40,144０■■ KAYABA

2019

2018

■ Domestic affiliates

Energy Consumption

0.100

4,496

4,345

39,16236,386
2020

(FY)

2021

■ Overseas affiliates

０

０

（kL）

（kL）

300,０００

0.500

3,０００

0.415
0.375

0.400

20０,０００0.300

90,656

91,64322,324

21,04010０,０００50,995０

18,55648,92320192018

79,7040.200

21,363

0.100

2021

(FY)

Water Usage

０

０

1,280

1,636

1,355
750

159

132

1,669
1,357

０

2018

■ ■ ■ Water supply

2019

2018

27,77829,1930.200

41,5482020

42,048
2021

(FY)

1,910
1,650

1,479

2019

2018

2020

2021

(FY)

Waste Emissions: Industrial waste
（t）

1,０００

51,799125,498

1,０００

30,０００17856,800

1,946

4,０００

2,０００

33,100

2,０００

（km3）

3,０００

36,455

115,011

46,61242,877
2020

87,273

128,318

Energy Consumption for Transportation

（kL）

0.394

41

10０,０００0.050

Basic unit (all bases)

0.353

0.400

126,973

44,05839,451

39,473200,０００

1,046
836

143

119

1,562
1,426

2019
■ ■ ■ Wastewater

KAYABA Group Report 2022

1,301
155

547
103

1,571

12,840
14,114611
112

10,０００

2021

(FY)

5,483
０

11,492

12,085

5,272

1,188

1,288
2020

20,０００

2018

2019

4,649

3,740

4,846

2,681

3,052

3,164

2020

2021

(FY)

０

Value Creation

Social Initiatives

Basic Policy
are to be observed in everyday work and company life
as the Kayaba Group’s Corporate Guiding Principles.
Our basic stance toward efforts to create a better
society is indicated by these Principles. They apply toall people who work at the Kayaba Group, who are
required to act in accordance with the Principles.

Supply Chain• We will acknowledge that we have social responsibilities to our supply chain as well. We will
oppose forced labor and child labor in any form in the supply chain and implement the non-use
of conflict minerals.
• We will aim to create products that are friendly to the earth and people and work hard in our
procurement that takes the environment into consideration.
• We expect our suppliers to share the values expressed in this clause.

Participation in Activities of Industry
Associations and Other Related
Organizations• We will join and be active in industry associations and other related organizations solely for the
purpose of promoting and familiarizing technology related to our products and services, as wellas contributing to the sound development of the industry.

Value Creation• Pursuant to international standards and the laws and regulations of each country, we will
respect the fundamental rights of labor, such as workers’ freedom of association, right toorganize and right to bargain collectively.

Strategy

Respect for Workers’ Rights

Social Initiatives

Respect for Human Rights• We will respect the dignity of all individuals and respect human rights that are internationallyrecognized and, additionally, we will not be involved in violations of human rights. In the unlikely
event it is found or likely that our business activities, products or services may cause violationsof human rights, we will forthwith take an appropriate measure against it.
• We will absolutely not tolerate any discriminatory acts on the grounds of race, gender, sexual
orientation, nationality, religion, age or physical or mental disabilities or illnesses.
• We will not practice forced labor and child labor in any form whatsoever.

Introduction

In order to put the SDGs into practice and raise corporate value, Kayaba believes it is essential to create aplace where human rights and workers’ rights areupheld—one that has a comfortable environment where
diverse human resources can work energetically.
Based on “Our Promise” aimed at accomplishing our
Corporate Spirit, we put together 26 specific rules that• We will not have any relationships whatsoever with forces, associations and illegal organizations
that threaten the safety and order of society. We will take a resolute stance as an organization
No Involvement with Antisocial Forces
against improper or illegal demands from those forces, etc. and we will not provide them withany benefit whatsoever.

Preservation of Natural Environment• We will recognize that we are dependent upon rich and varied nature and make efforts to create
products that are friendly to the earth and people in our domestic and overseas business activities.
• We will actively promote preservation of natural environment by identifying environmental
conservation activities as one of the important indicators for the evaluation of management andundertaking global warming countermeasures, energy conservation promotion, recycling ofresources, waste reduction and proper management of chemical substances.

Health and Safety• We will always think safety first and engage, with all employees participating, in activities
aimed at prevention of industrial accidents and occupational diseases and the creation of an
accident-and-risk-free work environment.
• We will prepare a clean and hygienic work environment through thorough tidiness, order,
cleanliness, sanitation and training.

Creation of Comfortable Working
Environment• We will value a way of working that takes the diversity of our employees into consideration andstrive to create lively workplaces.
• We will strive to create a vibrant and comfortable workplace where we care for each otherwhile giving consideration to physical and mental health, respect each persons’ point of view
and position, and allow free and open exchange of opinions.
• We will absolutely not tolerate acts that worsen the working environment and cause mental
and physical pain beyond the proper scope of operations.

Enhancing Workplace Capabilities
through Education and Skills
Development• As “human resources” that support the sustainable growth of the Kayaba Group operating its
business globally, each one of us will proactively increase our own abilities through diverse
education and training and we will build strong workplace capabilities at every workplace.

Data

Contribution to Society• We will promote coexistence and cooperation with local communities, proactively engage in suchactivities as volunteer activities and conducting local events, and contribute to the developmentof local communities as “good corporate citizens.”• We will respect local communities’ history, culture and customs, and support non-commercial
aspects such as culture and arts in order to contribute to development of a sustainable society.

Kayaba Group Corporate Guiding Principles (excerpt)

KAYABA Group Report 2022

42

Social Initiatives

Human Resource Initiatives
Respect for Human Resources and Diversity
The Kayaba Group regards the diversity of humanresources as an important factor for realizing soundoperations. Accordingly, we aim to build a corporate
culture that accepts and respects diverse values,
cultures, and customs, while featuring open communication and maintaining flexibility in management
strategies and product development.
Specifically, we are training human resources who
can uphold our Corporate Spirit, employing diverse
human resources, and positioning the right employee
in the right position. Also, we are strengthening themanagement foundation and awareness campaigns forhelping women thrive in the workplace. We haveincreased the number of female employees in positions which provide opportunities for promotion, with aview to raising the number of female managers(achieved the target in FY2021). Going forward, theCompany plans to help women set their career paths—
in this way raising their awareness of opportunities andtheir possible futures—and create training programs forsupervisors to raise their awareness of issues

impacting women in the workplace. Kayaba has alsoestablished special organizations that employ people
with disabilities and is actively engaging in related
activities.
To maintain an environment where employees canwork energetically, we are helping employees maintaina healthy work-life balance, continuing remote working,encouraging employees to take annual paid leave, andreducing long working hours.

Raise personal awareness

Raise awareness ofworkplace issues

Draw on the talents ofdiverse human resources

Foster working
conditions that allow
everyone to thrive on the job

Create systems that
employees need and want

Enhance the value offered by individuals and organizations,and increase the value the Company provides to society

Efforts to Promote the Employment of People with Disabilities
Kayaba is making efforts to employ people with disabilities based on the following targets.
Target
1. CSR: Realization of a symbiotic society	Contribute to the realization of a symbiotic society in whichanyone can participate in society through their work inproportion to aspiration and ability, regardless of handicap

2. Diversity	Build a corporate culture and make workplace environment
improvements so that diverse employees can work energetically, with handicaps being a non-factor

3. Compliance	Observe laws and regulations, such as the Act on the
Promotion of the Employment of Persons with Disabilities

In September 2019, Kayaba established the Work
Support Center as an organization to promote theemployment of persons with disabilities. It cooperates
with all departments in the Company, government andmunicipal offices, schools, and all kinds of organizations to promote the employment of people withdisabilities and works on initiatives to stabilize theretention rate.

43

KAYABA Group Report 2022   1. Actively accepts internships in cooperation with special
support schools and employment support organizations
and challenge training, and regularly exchanges information and conducts hearings   2. Advice and guidance to settle in after employment withthe help of an in-house coaching staff.
   3. Enlightenment regarding diversity for persons with nodisabilities in sites where people with disabilities work,
and improvement and maintenance of the working
environment

As a result of these efforts, the employment rate ofpersons with disabilities improved to 2.36% at the endof March 2022, up from 1.88% at the end of March 2019and exceeding the legally stipulated employment rate of 2.3%.
Kayaba will continue our initiatives
aimed at improving the employment rate of persons withdisabilities and providing workplaces where people with and without
disabilities can feel satisfaction in
their work.
Certificated of thanks from
Gifu Prefectural Kamo Special
Needs School

Human Resource Development
improvement measures can be incorporated intoon-the-job training, which is important for complementing human resource development systems.
Kayaba recognizes that training managers of overseas bases is vital for ensuring the sustainable growthof global operations. Therefore, we provide them withexperience in departments that are essential for managing their workplaces over the medium term, helping
them develop the qualities they need through training,
and then assign them to leadership positions when thetime is right.

3

4

5

Ability to carryout social
responsibilities

Customerorientation

Challengeorientation

6

7

Sincerity

8

Instruction Task and strategy Improvement
andformulation
andreform ability
abilitytraining ability

Creativity

9

10

Basic
knowledge
and skills

Specialized
knowledge
and skills

Two skills

Eight qualities
10 components of training programs (focusing on eight qualities and two skills)

Training Managers ofOverseas Bases

PurposeTraining to instill
the necessary qualities(Candidates for management
positions outside Japan)

Value Creation

2
Mutualrespect andteamwork

VitalitySocial Initiatives

1
Awareness ofcomplianceand ethics

HonestyStrategy

Qualities Required to Make the Corporate Spirit a Reality (Ideal Human Resources)

Introduction

Kayaba has redesigned its human resource training
programs to ensure that employees have the qualities
necessary to help realize the ideas behind the
Corporate Spirit (honesty, vitality, love and creativity).
We have been working to improve these programs
while recognizing that transparency in employee evaluations and promotions is one of the most important
aspects of human resource development. For thisreason, we have made clear the necessary qualities
and achievement levels for every job level and reviewed the requirements for management promotions
based on this. We are also exploring ways that

1. Skill development training → Select and train candidates
2. Training rotation → Formulate plans for training rotation and follow-up
3. Assignment of candidates → Set and deploy criteria for assignments

Data

Creating Harassment-Free Workplaces
Workplaces where there is no harassment are an
essential foundation for maintaining and improving thephysical and mental health of employees while promoting human resource development.
To avoid a situation where it is difficult to raise one’s
voice within the Company, we are placing emphasis on
harassment prevention (freedom from harassment),
and actively conducting education and awarenessactivities to promote mutual respect.
Specifically, Kayaba integrates anti-harassment
education into new training programs such as those on
listening skills and equality under the law, conducts
evaluations on a trial basis, and publishes anti-harassment articles in our internal newsletter. We also survey
the extent of reported cases of harassment throughstress assessments, which employees receive every
year. Also, the Company promptly responds to cases
reported to the harassment helpline and the whistleblower hotline, taking strict disciplinary action after
confirming the facts.

From an article of in-house newsletter

KAYABA Group Report 2022

44

Social Initiatives

Health Management
Health Declaration
Kayaba sees the health of employees and their families as an important management resource and a source ofcorporate vitality, and is working to achieve sustainable growth through the creation of an environment in which
all employees can work in good health both physically and mentally.
We are committed to actively supporting employees who are engaged in health promotion activities and topromoting organizational measures for health promotion in order to live up to our Corporate Spirit by “building a
corporate culture full of vitality and holding high goals.”
November 1, 2019

Masao Ono

Representative Director
and President Executive Officer
KYB Corporation

Health Management
Maximize the performance of employees by increasing their health and wellness
Creating a workplace where employees can work in good health both physically and mentally

Key Activities(current conditions)

Risk Improvement Activities
Abnormal findings
Decreasein rate ofabnormalfindings

Decreasein sick
leave
Minor abnormal

Good health

Increase number of
non abnormal

Increasein jobsatisfaction

Increasein sleep
sufficiency

Health Promotion
Activities

Reduction
in rate ofhigh stress

Expansion of health management policies, collaboration
with related departments, and the participation of employees

45

KAYABA Group Report 2022

Reduction
in rate ofobesity

Reduction
in rate ofsmokingOrganizational Structure for Promoting Health Management
Responsible for Heath Management(President)

Introduction

Instruction/Report

Policyexecution

Responsible for Heath Management Promotion(Human resource officer)
Instruction/Report

Heath Management Promotion Project
All functions,departments

Cooperation

HealthSupportCenterCooperation

Human
Resources
Planning Dept.

HealthInsurance
Association

Cooperation

Sagami Plant

Gifu area

ESG Promotion
OfficeKumagaya Plant

Mie plant

Labor Union

Cooperation

In charge of promotion at each office or plant
Head Office

Occupational
PhysicianCooperation

Safety Education
Committee

Cooperation

StrategyWith the top management
ranks positioned as responsible
for heath management, theentity conducts the sharing of
information on health management issues and ensures theeffectiveness and continuanceof initiatives while cooperatingwith the health management
promotion project in charge ofpromotion at each office orplant, the safety educationcommittee, and our groupcompanies.

In charge ofpromotion
at group
companies

Health index

PhysicalWe are aiming to continuously
maintain and promote physicaland mental health, maximize
performance through the
improvement of employee
health, and create an environment in which employees canwork happily and comfortably.

Decrease inabsenteeism
due to sickness

2019

2020

2021

Rate of diabetes

41.4%

44.2%

54.1%

45.2% ▶

40%

Rate of obesity

29.1%

29.2%

32.8%

30.5% ▶

30%

Rate of smoking

34.9%

35.3%

34.2%

32.3% ▶

30%

Rate of sleep
sufficiency

48.2%

61.4%

67.2%

67.2% ▶

70%

Job satisfaction

58.3%

55.3%

58.0%

58.0% ▶

60%

Rate of use of yearlypaid vacation

68.1%

71.7%

62.8%

76.9% ▶

80%

Data

MentalImprovement ofa lively workplace(employee engagement)

2023
Target2018*Health index covers KYB Corporation

Health Management Policy
Physical health• Making a comfortable working environment: Promote use of the walking course, hold a walking
event, support the continuation of the exercise habit after the event
Lifestyle disease countermeasures(Collaboration with health insurance measures) • Keep a 100% rate of employees taking regular heath checkups• Increase the ratio of employees taking specific medical examinations
Stages of preventing second-handsmoke• Environmental measures: Smoking completely prohibited on the premises (starting in April 2022)• Support for quitting smoking• Education on second-hand smoking prevention(Hold an exhibition on the prevention of second-hand smoking）

Mental health

Measures to support mental health• Hold mental health education: Promote education by level for the purpose of building positive
mental attitudes• Harassment-free campaigns with the cooperation of each function and business division→ In order to create a workplace where people can do their work with a sense of worth andpurpose, it most important that there is no harassment. Based on that thinking, we added“harassment-free” to the Key Initiatives of the Corporate Policies. This policy is being carriedout in each department and function.

KAYABA Group Report 2022

Value Creation

Social Initiatives

Health Issues and Kayaba’s Index

46

Social Initiatives

Safety Activities
Creating a Safe, Secure Working Environment
With the of slogan “Safety is the top priority,” theKayaba Group works as one to achieve zero occupational accidents. Also, our Corporate Guiding Principles
state that we will always think about safety first andengage, with all employees participating, in activities
aimed at prevention of industrial accidents and occupational diseases and the creation of an
accident-and-risk-free work environment.
The Global Safety Promotion Committee, which ischaired by Kayaba’s president, works to revitalize
activities. The Environment & Safety Committee, which
is chaired by the executive officer in charge of CSR andsafety, discusses safety measures related to the

Kayaba Group. In these ways,
we are promoting safety andsecurity in the working environment.
Regarding fires at our plants,
we periodically reexamine thefire prevention system andidentify equipment that poses
any risk of a fire. Also, we hold aFire Prevention Day in which weraise the awareness of all employees and work to reduceand prevent risks.

Fire prevention poster

OSHMS/ISO 45001 Certification Acquisition (As of April 2022)
In order to systematically implement initiatives to build
an occupational health and safety management systemand strengthen its foundation, we are introducing andpromoting certification in OSHMS and ISO 45001.*
In introducing our health and safety management
system, the Gifu North Plant was first to obtain certification in FY2004, and in FY2022, we are working

toward the certification of one new location. We will
make practical use of the system and push forwardwith efforts to achieve a higher level of safety thanever before.
* ISO 45001: An occupational safety and health management system (OSHMS)
standard issued in 2018 by the International Organization forStandardization (ISO).

Bases with Certification (As of April 2021)
Japan (OSHMS)
Gifu North Plant
Gifu South Plant(Including Gifu East Plant, Production Technology R&D Center, Machine Tools Center, KYB Motorcycle Suspension Co., Ltd.)
Sagami Plant(Including the Basic Technology R&D Center)
Kumagaya Plant
Takako Industries, Inc. (Shiga Plant)
KYB Kanayama Co., Ltd.
KYB-YS Co., Ltd.
KYB Trondule Co., Ltd.
Overseas (ISO 45001 Certification)
North America
MexicoBrazilSpain
Czech
ThailandIndonesia
Malaysia
India
China
TaiwanVietnam47

KYB Americas Corporation / Takako America Co., INC.
KYB Mexico S.A. de C.V.
KYB Manufacturing do Brasil Fabricante de Autopecas S.A.
KYB Suspensions Europe, S.A.U. / KYB Advanced Manufacturing Spain, S.A.U.
KYB Manufacturing Czech, s.r.o. / KYB CHITA Manufacturing Europe,s.r.o.
KYB (Thailand) Co., Ltd. / KYB Steering (Thailand) Co., Ltd.
PT. Kayaba Indonesia / PT. KYB Hydraulics Manufacturing Indonesia
KYB-UMW Malaysia Sdn. Bhd.
KYB Mmotorcycle Suspension India Pvt. Ltd.
KYB Industrial Machinery (Zhenjiang) Ltd. / Changzhou KYB Leadrun Vibration Reduction Technology Co., Ltd. /Wuxi KYB Top Absorber Co., Ltd.
KYB Manufacturing Taiwan Co., Ltd.
KYB Manufacturing Vietnam Co., Ltd. / Takako Vietnam Co., Ltd.

KAYABA Group Report 2022

Quality Management
Introduction

Basic Policy
To prevent a recurrence of quality-related misconduct,
Kayaba will continue to foster and establish an awareness of compliance as the prerequisite for andfoundation of quality management.

The Kayaba Group shall:
1. Address quality improvement with honesty driven by
the belief that quality is the basis for business.
2. Deliver safe and secure products in compliance withpromises to customers as well as with laws andregulations.
Strategy

Quality Assurance System

Prior and model
development

Details

DR*0 evaluation
meeting
DR1 evaluation
meeting

Mass-production
development andproduction preparations

Quality Safety Audit

Development quality

Implementation of commercialization (Description and evaluation ofdevelopment quality)

Start quality

Implementation of mass production (Description and evaluation ofdevelopment quality)

Mass-production
quality

Implementation of achieving quality requirements (Demonstration andevaluation of start quality)

DR2 evaluation
meeting

Mass production
Initial flow management
Quality Safety Audit

Goal of the three steps

Data

Order development

Bad News First
Execute (until the reporter receives feedback)
When abnormalities arise: Stop, Call, Wait

Evaluate manufacturing site, manufactured products and data to confirm that mass-production quality is
problem-free and that reliable production and shipment are possible.
* DR: Development & Research

Quality Management Initiatives
Kayaba is strengthening its quality audit system tothoroughly prevent quality-related misconduct, andaiming to create a corporate culture of open
communication.
• Revision of the Bad News 1st Initiative regulations(November 2021)• Establishment of the Bad News 1st Initiative implementation guidelines (November 2021)

Value Creation

Step

to defect reduction and change management after
mass production and shipment. At our production
bases, we take a variety of quality improvement measures under the leadership of base managers and plant
managers, and we are working to promote the unerring
operation of our three-step evaluation system.
Furthermore, to ensure the quality of mass-produced
products, we also follow this system for single, smalllot orders and when production is transferred toanother production base.

Social Initiatives

We have built, and now operate, an ISO 9001-compliant quality assurance system that emphasizes thequality of work processes as well as the quality of
products and services. We strive each day to make
improvements in all aspects of quality.
At Kayaba, we implement what is called a “threestep evaluation system” for the development andmass production of products, the development oftechnologies, manufacturing methods, and so on. We
make every effort to achieve high quality throughout
the product life cycle, from the product planning stage,

We are increasing workplace communication by
conveying information on “Bad News” or concerns
related to quality, then taking steps and improving
based on the information and launching initiatives toproperly deal with the matters, then providing feedback
to the reporter in the form of reports and replies.

KAYABA Group Report 2022

48

Social Initiatives

Supply Chain Management
Basic Policy
Kayaba conducts ESG management so as to continuously develop our business through manufacturing
craftsmanship and contribute to the realization of anaffluent society as a corporation that has earned thetrust of the global community.
Going forward, we will further increase the responsibilities of the companies in our supply chain to conduct
efforts to uphold human rights, the prevention of childlabor and forced labor, responsible mineralprocurement, and carbon neutrality. We naturally build
partnerships with important suppliers, and also carryout our social responsibility while thoroughly enforcing
our basic policy in procurement and striving to contribute to the realization of a sustainable society.
For policy details, see “Supply information” on the website
https://www.kyb.co.jp/english/company/supply_information.html

Building Relationships with Suppliers
We hold a Purchasing Policy Briefing for the management ranks at our suppliers’ companies. At thismeeting, we provided them with a stronger understanding of our corporate, purchasing, and quality
policies. We also awarded excellent suppliers who havecontributed greatly to QCD* through the issues andtargets that Kayaba and our suppliers share. This madethe briefing a venue for sharing valuable information inaiming for coexistence and mutual prosperity.
Kayaba is ensuring two-way communication between us and our suppliers based on a relationship ofmutual trust.

Examples of Our Efforts
Carbon Neutral Initiatives
The Japanese government’s “2050 Carbon Neutral
Declaration” and the Glasgow Climate Accord at COP26
have accelerated efforts to achieve carbon neutrality.
Kayaba holds briefing sessions on carbon neutrality
to its suppliers and shares with them Kayaba’s approachto carbon neutrality and its goals, and asks them towork toward these goals.

* QCD: Quality, Cost, Delivery

Responding to Responsible Mineral Provision
To avoid inadvertently providing funds to armed groups
responsible for human rights violations, the Kayaba
Group annually conducts an investigation with thecooperation of its suppliers, summarizes the results
and reports to customers that request such information, in accordance with the Dodd-Frank Act.*In these inspections, we employ the questionnaire
issued by the Responsible Minerals Initiative (RMI; anorganization that is promoting the responsible procurement of minerals).

* The Dodd-Frank Act is a U.S. financial regulatory act that aims to indirectly cut off trade in mineral resources mined in the Democratic Republic of the Congo and nineneighboring countries because of concerns that these mineral resources are the source of funding for armed groups that are responsible for environmental destruction andhuman rights violations.
Target minerals: tin, tantalum, tungsten, gold

Initiatives to Prevent Human Rights Violations in the Supply Chain
In accordance with the U.K. Modern Slavery Act 2015,
we annually release a statement on the Kayaba Group’sbusiness activities and initiatives to prevent slave laborand human trafficking in our supply chain, including theabovementioned conflict mineral measures. We will

49

KAYABA Group Report 2022

carry on with our awareness-raising activities on prohibiting human rights violations and slave labor incooperation with the relevant departments while
understanding the progress of our business partners
with their efforts.

COLUMN

Products + Human Resources + the Future
Introduction

Our Challenge—providing technology support
that draws out full potential

Strategy

Evolving Technology

Value Creation

Social Initiatives

Kayaba takes pride in our added-value products

Chair ski model diagram(early development)

Shock absorber forchair ski (present)

Data

Kayaba employee Takeshi Suzuki is an Olympic
athlete who competes in Para Alpine sit ski
events at the Games as a representative ofJapan. He has competed at Paralympics in
Torino, Vancouver (bronze medal), Sochi (goldand bronze medals), Pyeongchang, and mostrecently took on the 2022 Beijing Paralympics.
While he didn’t obtain a medal at the BeijingGames, he placed fifth in the super combined
and slalom, and placed eighth in the downhill,
receiving a prize for each.
In sit skis, shock absorbers are used to mitigate the shock that the rider feels when skiing,
and also as a medium to transmit the operating
motions of the athlete to the ski board. We takepart in anticipated development projects with ourtechnological abilities that have been forged insuch heated competitions as the world’s leading
motorcycle races and support Japanese athletes.
We’ve been building our record of achievements
since we began conducting development for the
Nagano Paralympics.
Currently, participating countries are focusing
on shock absorber development, with the difference between victory or defeat hanging in thebalance. We are continuing to pour our energy
into improving sit ski performance by repeatedly
conducing a cycle of development, evaluations
by skiers, and improvements in cooperation with
Mr. Suzuki and other athletes.
Kayaba will continue to support the field ofsports for people with disabilities in the hopes
that, through the activities of world-class athletes, they will be inspired to participate in sports
and to take on great challenges.

Shock absorberfor chair ski< Profile of Takeshi Suzuki >• Competitive event Alpine skiing(Sitting: Sit ski)• Date of Birth: May 1, 1988
• Age: 34• Place of origin: Inawashiro-machi,
Fukushima, Japan•Joined Kayaba: 2015
Adjust damper until just before run

Note: Kayaba is an official sponsor of the Alpine Skiing National Team of the JAPAN Para-Ski Federation

KAYABA Group Report 2022

50