CSR REPORT2020
INOAC CORPORATIONCSR REPORTContents
Corporate Philosophy

Contents / Corporate Philosophy

01

Company profile

Creating a beautiful forest,
comprised of many trees of varying character,rather than merely growing a single tall tree
In our efforts to enrich people’s lives,
we at INOAC have specialized in not only a single business,but we have cultivated four business “seedlings”- polyurethane, rubber, plastics and composite materials.
Today we have developed into a conglomerate,
supplying diverse products and services,
thereby contributing to society.

Message from the president

02

Company outline

04

Network05

Business overview

06[Feature story] For a Better Future
Manufacturing & talent development
for the future

08

Quality management - Creating worksites
to be proud of

09(2) High Performance Material Division
Minimizing loss in product development

10

Loss reduction in product development

11

Harmony with the environment

12

Environmental management

13

Reducing our environmental footprint

15

Managing information on chemical substances 17
Improving value

19

Communication with society

20

Contributing to society and communities

21

Producing an employee-friendly workplace

23

Improving in-house systems

24

Human resource development25

Supply chain management
Supply chain management
Governance & compliance

CSR REPORT 202018

Quality improvement efforts

Safety and health / Disaster prevention

01

07(1) Global Automotive-related Products Division

26
27
28
29

Governance

30

Compliance31

Applicability of report32Message from the president

Company profile

Company
profileconsumption tax increase, and inflamed international tensions.
Under these conditions we saw an increase in revenue andslight negative growth in profit domestically. However, favorable
developments internationally resulted in profit growth despite
no changes to sales overseas.
Specific examples of our efforts include investing in existing
plant facilities while also initiating construction of new
production plants, with the aim of improving production
efficiency and taking steps to address the environment. In terms
of productivity improvements, we have been implementing RPA
efficiency in building production systems that utilize IT and in

INOAC CORPORATION
President & COO

Internationally we have also outfitted our plants incountries such as Indonesia and Vietnam with state-of-the-art
facilities, and we are actively working toward local production
for local consumption in the bedding market.
Powered by material technology, we at INOAC will continue
throughout the world.

Top Message
02

CSR REPORT 2020

Governance & compliancestriving to make contributions to communities in Japan and

Supply chain management

Toyohiko Okina

making our offices more efficient.

Producing an employee-friendly
workplacetechnology in particular, leveraging it to improve administrative

Communication with society

and recognition

economy was impacted by a series of natural disasters, a

Improving valuesociety’s trust

Business activities stagnated in 2019 as the JapaneseHarmony with the environment

EarningFeature story

Sustainable activity powered bymaterial technology

At

INOAC,

ourCompliance

Committee

identifies

variouscompliance-related problems in our company and takes actions toresolve them early-on.

anchored by urethane, rubber, plastics and composite materials.

staff to keep compliance-related problems from arising. With the

As I said before, INOAC is a company that contributes to society

Recently, environmental issues such as saving energy andmindset that safety and quality form the very foundation ofthrough the manufacturing of materials. With strong awareness of CSR

reducing CO2 emissions have taken on major significance throughout

manufacturing, we also send specialists from Head Office to perform

in development, production, and every other aspect of our operations,

the world. At INOAC we strive to provide society with highly

safety inspections and quality inspections at all of our production sites

we are striving to be a company that is held in high esteem by clients,

eco-friendly products through the development of many different

in Japan and around the world twice each year, conducting

communities, and all of our employees.

materials and processes, including thermal insulators such as

inspections and reviews, and making improvements.

It is also important to support children, who are our future, as wellfollowing the rules. We devote ourselves to consistently earning thetrust of everyone in society.
As the world continues to globalize, developing human resources

Education and Scholarship Foundation, offered educational tours ofwith global perspectives is now imperative for survival. We are

our production plants to local elementary school students in Japan,

implementing systems for our younger employees to gain workand conducted charity and fundraising activities for elementary

experience abroad and to interact with the people in each of ourschools and orphanages internationally. We are also engaged in effortsbusiness locations, while also organizing activities that drive theirto help overcome environmental challenges in communities throughprofessional growth. At the same time, we are also striving to develop

the reuse of scrap materials.

our human resources through English and Chinese language classes

Developing human resources who
engineer the future

Top Message
CSR REPORT 2020

Governance & compliance

Compliance activities are now more important than ever.

acquire various qualifications, and more.

Supply chain management

overseas, study abroad programs at overseas universities, support to

Producing an employee-friendly
workplacestudents in Japan and other countries through the INOAC International

Communication with society

as communities. In FY 2019 we provided scholarship assistance toPromoting corporate ethics is about more than just always

Improving value

To facilitate this, our Human Resources Division is organizing
workshops for each level of employee and continuously educating

Harmony with the environment

As stated in our corporate philosophy, INOAC is a company that
contributes to society by developing new materials and new products,

THERMAX.

03

Ongoing CSR activities at each work
site

Feature story

Creating a better future for theplanet and humanity

Company profile

Message from the president

Company
profile■ Main Businesses
INOAC operates in five broadly-defined categories of business. We make people’s lives more comfortableand enjoyable in many different life scenarios, offering a wide range of products in various markets.

■ Established1954■ Incorporation Capital

720 million yen■ Representatives

Chairman & CEO Soichi Inoue■ Employees

1,945 (as of December 2019)■ Sales

189.4 billion yen (as of December 2019)1

President & COO Toyohiko Okina

INOAC operates in various fields closely related todaily life, from consumer products to information
technology equipment and housing andconstruction materials.
Foam products

2-13-4 Meieki Minami, Nakamura-ku, Nagoya, Aichi 450-0003

Head Office (Tokyo)

4F Osaki West-city Bldg., 2-9-3 Osaki, Shinagawa-ku
Tokyo 141-0032

Rubbers & elastomers

OlefinMaterial

Material

Material

Urethane foam

Plastics/Composites

RubberOlefin resin

Main applications

Main applications

Main applications

Main applications

Consumer products / Furniture &bedding / IT equipment

Distribution materials/Office automationequipment/Cosmetics bottles

Construction materials/
IT equipment/Cosmetic puffs

Packaging materials / Consumer
products / IT equipment

Communication with society■ S ale s

Plastic products

Material

2 Automotive-related Products

Hundred million yen

1,700

1,824

Sales by division in FY 2019
Plastic products & Packaging 3%

1,894

Rubber & Elastomer 3%

Others 3%
Automotive 59%

We offer products for interiors and exteriors,
products for car functions, and seat-related
products that help make cars safer and more
comfortable.

Producing an employee-friendly
workplaceDomestic sales by year

1,500

Sales by division
in FY 2019

500

04

2017

2018

CSR REPORT 2020

2019

Year

Foam products 32%

4

Housing & Construction
Materials

5 Bedding & FurnitureThis specialist manufacturer ofmotorcycle, bicycle, and wheelchairtires and tubes is the original
founding section of the INOAC Group.

We mainly operate in housing,construction, civil engineering, andenvironment-related business.

We produce mattresses for a
comfortable night’s sleep, as well as
the “Smile” brand of nursing carefurnishings and the HUKLA furniture
brand.

Governance & compliance0

3 IRC Tires

Supply chain management

1,000

Improving value■ Head Office

2,000High Performance Materials

Harmony with the environment

INOAC CORPORATION

Feature story■ Company nameCompany profile

Company outline

Company
profileNetwork

Company profile

Company
profile■ Major overseas locations

Our affiliated, associated and joint venture companies from Hokkaido to Okinawa, in addition to

We have constructed a system of proposing and supplying research, development, material

the nationwide network of INOAC Corporation, have established a close production and sales

processing, molding techniques and mass production in 13 countries and regions worldwide,

network which enables us to provide our customers with the most appropriate solutions.

mainly in North America and Asia.

Associated companies

Joint ventures

Mexico5 companies

China

16 companies

Hong Kong

1 company

Asia

35 companies

Thailand13 companies

Taiwan3 companies

Indonesia

6 companies

Vietnam

5 companies
1 company

Singapore

3 companies

Philippines

1 company

Malaysia

1 company

Sales branches: Tokyo, Chubu, Osaka, Kyushu
Sales offices: Sapporo, Tohoku, Hamamatsu, Hiroshima

Sri Lanka

2 companies

R&D Centers
INOAC Technical Center Co., Ltd., Jinno R&D Center

Governance & compliance

Main Sales Offices

Supply chain management

South Korea

Producing an employee-friendly
workplace

Anjo, Sakurai, Kira, Shinshiro, Yana, Ishimaki, Nanno, Seino,
Hanyu, Hadano, Toyohashi, Taketoyo

CSR REPORT 2020

3 companies

Mainland China 15 companies

Offices & Plants

05

12 companies

CanadaCommunication with society

Hokkaido INOAC Co., Ltd.
Tohoku INOAC Co., Ltd.
Higashi Nihon INOAC Co., Ltd.
INOAC Elastomer Co., Ltd.
Nishi Nihon INOAC Co., Ltd.
Kyushu INOAC Co., Ltd.

USA

Improving value

Affiliated companies

North/Central America 20 companies

Harmony with the environment

Inoue Rubber Co., Ltd.
BASF INOAC Polyurethane Co., Ltd.
INOAC International Co., Ltd.
Rogers INOAC Corporation, and others
INOAC Technical Center Co., Ltd.
INOAC Housing & Construction Materials Co., Ltd.
HUKLA Japan Inc.
INOAC Living Co., Ltd. and others

Feature story■ Major domestic locations

Company profile

Business overview

Company
profileResin-based bottles
for cosmetics

Feature story

Food tray

Kitchen spongeSound absorbing
material
for speakers
Packing material
for light fixtures

Harmony with the environment

Light shielding thermal
insulation sheet

Sofa

Electronics
cushioning material

Cosmetic puffs

Mattress

Improving value

Hot water floor
heating system

Interlocking matsmight be the kitchen spongeInterior

Prosthetics

Garden tape

Seam gasket
for houses

you use to clean dishes, orMaterial
for shoe insole
and upper

Sports bra cups

they might be used in

Seat-related parts

Supply chain management

quieting noise made by cars.
These products born fromadvanced technologies help
make everyone’s life a little
better.

Wheelchair tires

Exterior
Engine, floor, chassis* Products that appear here are actual or recommended usage cases.

06

CSR REPORT 2020

Governance & compliance

Yoga mat

Coolers &cold storage

Producing an employee-friendly
workplaceeven better. You can findthem all around you. They

Mask

Thermal insulation
for houses

INOAC products make life

Communication with society

INOAC products arepart of your life

Feature story

For a Better Future(1) Global Automotive-related Products Division
Manufacturing & talent development for the future(2) High Performance Material Division
Minimizing loss in product development

07

CSR REPORT 2020

For a Better Future

Company profile

Feature story (1)Feature story
Harmony with the environment

Manufacturing &talent development
for the future

Improving value
Communication with society

Global Automotive-related Products Division
Yasushi Nomura, Division Director

birthrate become bigger problems, society now expects companies topolicy at the Automotive-related Products Division as “Manufacturing &to have INOAC’ s suppliers strive for sustainability that boosts on-sitepractice sustainability. Consequently, auto manufacturers have begun

talent development for a changing future,” and each of our sections

capabilities and competitiveness, with a shared sense of awareness.

setting environmental targets and declaring their commitment tohave defined their own, more specific policies. Quality control for

improving their business continuity planning (BCP). At the same time,

products is handled by our Global Quality Assurance Division, which

I think we will be able to keep up with any changes that could possibly

the automotive industry is said to be going through a once in a century

strives to establish in-process quality assurance that does not rely on

occur in the future by creating “worksites to be proud of” through therevolution, and the mentality is shifting from “offering an even betterthe final inspection. They accomplish this through best practices inquality management activities that I am about to share (problemcar” to “offering solutions for mobility society.”

manufacturing & talent development. We set two objectives inanalysis, human resources development). We will engage in theseestablishing quality assurance. First is to provide products with theactivities persistently, with the determination to make ongoing

In order to keep up with this change and balance it with sustainability,

appropriate quality according to changes in the needs of customers

contributions to communities.

it is now extremely important for companies to strengthen their

who actually buy the cars. As opposed to simply seeking excessive

CSR REPORT 2020

Governance & compliancequality, we set target values from the customers’ perspective. Second is

Supply chain managementbusiness infrastructure. Starting in 2019 we defined our department

Producing an employee-friendly
workplace08

As global warming and Japan’ s aging society along with falling

For a Better Future

Company profile

Feature story (1)■ Developing talent

Producing an employee-friendly
workplace| Improvement at the source |Two Methods of Quality Assurance?

Process

Process Process

Final product(2) Build quality into the process
OK

Inspection

OK

OK

JudgJudgProcess Judging Process ing Process ing○
OKFinal productAt a PA meeting with open mutual communication

Eliminate as many defects as possible
within the process

Generate changes in processes(Upcycling, staff reduction, saving space)

Able to consistently offer good products with stable quality

Global Automotive-related
Products Division
Second Quality Control Section,
Quality Control Department,
Quality Assurance Division

Akinobu Tokunaga09

CSR REPORT 2020

Initially, PA began with exploratory activities between INOAC andsuppliers to see what could be done, but as improvements were madethe atmosphere became increasingly open.
With these activities now entering their second year, we are beginning tosee effects on site. Our results in terms of quality have improved to thepoint of being hardly recognizable from before. Going forward, we intend
to continue these activities while working even more closely with ourmanufacturing sections and suppliers.

Governance & compliance

Comments froma PA participantInteractive learning at Quality Dojo

Supply chain management(1) Quality relies on inspection

Communication with society

Production Engineering Section, Quality
Technology Section, and major suppliers.
It involves drafting Improvement Control Forms,
creating opportunities to openly share eachother’s issues and opinions, correcting thesources of defects within each other’s processes,
and eliminating problems at the source.
This makes it possible to not only solve problems
that are readily visible, but to also solve problems
that had previously gone unnoticed. It also
deepens mutual understanding between
departments and organizations, while improving
teamwork.

To improve quality management at
manufacturing sites we also hold weekly training
sessions for smaller numbers of staff. We develop
instructors by holding certification tests after the
training.
In order to deliver accurate instruction of thedaily management of worksites, employees fromsections not directly related to manufacturing
such as sales and accounting also participate inthis training in addition to employees fromsections ranging from production to quality
control. They utilize the training to make
improvements in their own daily operations.

Improving value

The Quality Assurance Section conducts
problem analysis (PA) to manage quality.
Rather than stopping defects from being senton, our aim is to have processes that produce
nothing but quality products.
In each process, INOAC workers judge on theirown whether or not the quality is up to par, withthe aim of establishing in-process quality control
that does not rely on the final inspection. This
results in improvements at the source, which inturn assures quality within the processes.
This activity was launched as a team effort
between INOAC’s Quality Control Section,

Quality Dojo is a place for learning and sharing
what INOAC quality management is all about.

Harmony with the environment■ Problem Analysis (PA) in manufacturing

INOAC Standards define rules for how
manufacturing operations are handled whenabnormalities occur. Activities to spreadawareness of these rules are organized not only
for our employees to learn them but for our
suppliers as well. Rather than thinking of therules one-dimensionally, it is important toactually experience and understand them. For
that purpose, we opened an interactive facility
called the Quality Dojo at our business site.
Its purpose is to make people think hard about
the very simple concept of “taking common
sense actions without a second thought,” help
them realize just how important it is to keep
problems from occurring, and use what theylearn in their daily work.

Feature story

Quality management- Creating worksites to be proud ofFor a Better Future

Company profile

Feature story (2)Feature story
Harmony with the environment

Minimizing loss
in product development

Improving value
Communication with societyHigh Performance Material Division
Division Director Motoyuki Asano

toward solving environmental pollution-related problems such as

minimizes energy loss and scrap materials produced in manufacturing.

reuse had previously required large amounts of energy. Now, in

marine plastic waste, and to engage in sustainable use of resources.

While we have pursued eco-friendly initiatives actively in the past, we

addition to saving energy we are creating products with new added

The Food Loss Reduction Promotion Act was passed in 2019, since

are now working to not only reduce loss that is currently visible but also

value by developing products out of scrap materials as they are,which time efforts to protect limited resources and eliminate waste as

reduce energy loss by revising product specifications and processes,

without processing.

much as possible have gained even more momentum.

and to fundamentally minimize material loss by creating new products
from waste and scrap.

As a manufacturer, INOAC is addressing the situation with aggressive

10

consumption and waste by minimizing all types of loss inefforts to contribute to a sustainable society and use less energy andRevising and simplifying production methods while maintaining

resources. We produce a wide range of products at the Highfunctionality allows us to use less processes and thus manufacture

Performance Material Division, from industrial materials to consumer

while consuming little energy. The work also requires less space, which

CSR REPORT 2020

We will continue contributing to a sustainable society, reducing energy
manufacturing, from materials to processes.

Governance & complianceimproves productivity. Processes leading up to waste recycling and

Supply chain management

products, and we are striving to develop products in a way that

Producing an employee-friendly
workplaceSociety now places stronger expectations on companies to take action

For a Better Future

Company profile

Feature story (2)Improvement: Roll processed rollers

sponges which has previously been disposed oflayer part as-is and applies wrinkle treatment toas waste.

the surface. Since it produces no leftover unused

The skin later of rubber sponges used to bematerials and wastes no energy, it helps reduce

considered nothing more than scrap fromwaste.

products and was discarded without being put

Taking advantage of the features of the material

to use.

in order to reuse it reduces waste loss andenergy expenditure from recycling, while at the

In order to reduce waste, we had been turning

same time creating new product value.

this skin layer into chips and remolding them

We will continue to eliminate as much waste as

into recycled products. The biggest problem waspossible and create new eco-friendly products.

that this involved a long energy-intensive

As a manufacturer we consider that to be ourmanufacturing process before completion. We

mission. We are working hard to achieve it.

overcame that by developing textured sponge,

Producing an employee-friendly
workplacePrevious: Sanding processed rollers

Textured sponge is a product that takes the skin

Simplified

CSR REPORT 2020

Comments froma developerHigh Performance Material
Division
Rubber & Elastomer Department
Production Engineering Section

Keisuke Okawa

Textured sponge helps reduce waste by turning material scrap into new
products without consuming additional energy.
The anti-slip effects of texturing combined with the cushioning of rubbersponge allow for a wide range of potential applications, from floor mats atworksites to cushioning, and more. We will be expanding the range of
texture patterns and color variations to address our customers’ needs.

Governance & compliance11

We are working to reduce waste at production plants starting from thedesign and development phases. There are various processes involved in
High Performance Material creating the functionalities that products require. Processes that are
Division,
considered necessary can still be eliminated by applying ingenuity andInformation Devices Department,
ideas during the design phase. I think the important thing is to determine
Technology Section
Urethane Group
what added value to give products in each process, and propose theToshinari Hayashi
optimal production methods accordingly.

Supply chain management

Comments froma developer

Communication with society

wraps polyurethane foam around the metal
shaft, which reduced waste materials andprocesses while retaining the cleaning function.
Reducing processes also saved space at theworksites. We were able to use this freed up
space to produce other new products, and it also
helped improve productivity at the production
plant as a whole.
We will continue striving to minimize loss andmake products that satisfy our customers while
using less energy and creating no waste inproduction.

using the skin layer as-is for a new product.

products that reuse the skin layer of rubber

Improving value

The Information Devices Department is reducing
the energy used and scrap materials produced in
manufacturing by revising specifications formore simplified methods to manufacture
cleaning rollers for office automation (OA)
equipment, such as copiers and printers. There
had previously been a sanding process, which
presented problems with scrap materials andsanding powder getting stuck to the products
after sanding.
We addressed this by changing the processing
method from sanding to processing that directly

The Rubber & Elastomer Division is developing

Harmony with the environment■ Simplified cleaning rollers for OA equipment■ Development of textured sponge, reusing skin layer material loss

Feature story

Loss reduction in product development

Harmony with the environment
Environmental management
Reducing our environmental footprint
Managing information on chemical substances

12

CSR REPORT 2020

Environmental management

INOAC respects the natural environment of our irreplaceable
earth and contributes to realizing an affluent society that isenvironment and environment-friendly corporate activities.

Environmental policy(3) We work on resource conservation, waste reduction and recycling tocontribute to a recycling-oriented society.

environmental activities under the direction of the Committee on Environment. We have organized specific section committees to handle industrial
waste and energy saving, and we coordinate environmental management through these committees while seeking further improvements inmitigating our environmental impact. As we strengthen the connection between environmental management and our main business in managing
our objectives, we are also supporting the appropriate efforts where changes are taking place, such as newly built business locations, buildings, andproduction lines.

■ Environmental Preservation Promotion System
Environmental
Preservation
Promotion
SystemTopmanagement

ChairmanCommittee on
Waste Reduction

Person Responsible forEnvironmental Management

Committee on Environment

ChairmanCommittee on Energy Saving(Energy Management Supervisor)

Committees on
Waste Reduction (by section)(Office) Committee on

Environment(Office) Committee on

Environmental
improvement
activities at each
workplace

Energy Saving

Internal environmental audits

External environmental examinations

We implement internal environmental audits to check the

We ask the Japan Quality Assurance Organization (JQA), an external certification
body, to conduct examinations to check if our environmental management

The audit team consists of two to three employees who havesystem is functioning properly in accordance with ISO 14001:2015.

completed the auditor training prescribed by the company.

In FY 2019 examinations were conducted at the Jinno R&D Center (Aichi

The team checks if the environmental management system is

Prefecture) and Hanyu Plant (Saitama Prefecture) along with change reviews for(7) We contribute to establishing asustainable society through local
environmental preservation work
as good corporate citizens.

being properly operated, maintained and improved. We create

expanding the scope of activities. No areas were found to be in need ofaudit guidance and hold advance workshops for auditors at

improvement as a result, and the auditors determined that the system is being

some locations in order to improve the quality of the audits.

maintained. As a general opinion, they pointed out the need to improve thecapabilities of each location as the applicable scope of the system is expanding
year by year.

13

CSR REPORT 2020

Governance & compliance

operational state of our environmental management system.

(6) We engage in environmental management, educate employees about
the environment, implement environmental audits, and continue toimprove.

Supply chain management(5) We actively develop products with less environmental impact,
contributing to the conservation of nature throughout the life cyclesof the products.

Producing an employee-friendly
workplace(4) We properly manage chemicals that could impact the environmentand seek to preserve our environment by reducing risk.

Communication with society(2) We work to reduce CO2 emissions such as by saving energy, to help
prevent global warming

management related to the environment, under the direct control of top management. In addition, the company as a whole also engages in

Improving value(1) We comply with environment-related laws, regulations, and otherrequirements, and engage in business activities that society can trust.

In order to engage in environmental activities in an organized fashion, the Person Responsible for Environmental Management implements integrated

Harmony with the environment

comfortable to live in through technology harmonized with ourEnvironmental management system

Feature story

Environmental vision

Company profile

Harmony withthe environment

Company profile

Environmental management

Harmony withthe environment

Compliance with environmental laws and regulations

Reduce energy
consumption

Factory-related

Office-related

Reduce waste
Office-related

Intensity (CO2 emission/production sum) Intensity
0.612 or less
0.578
CO2 emissions
59,563 t-CO2 (2018 result)CO2 emissions
212,993 kg-CO2 or less

CO2 emissions
322,345 kg-CO2

Measured units (CO2 treated amount/production sum) 0.0607 or less

Measured units
0.0708Treated amount
6,766 t (2018 result)

Treated amount 1,524 kg or lessenvironmental management system. In accordance withenvironmental preservation agreements with local
government, including environmental laws and regulations.

Noise, vibration & odor

Noise Regulation Act, Vibration Regulation Act,
Offensive Odor Control Act

Chemical substances

Resource conservation& recycling

Act on Confirmation, etc. of Release Amounts ofSpecific Chemical Substances in the Environment
and Promotion of Improvements to the Management
Thereof, Poisonous and Deleterious Substances
Control Act
Act on the Rational Use of Energy, Act on the
Promotion of Sorted Collection and Recycling ofContainers and Packaging, Act on Rational Use andAppropriate Management of Fluorocarbons, Act on
Special Measures concerning Promotion of Proper
Treatment of PCB Wastes, Waste Management andPublic Cleansing Act

Disaster prevention

Fire Service Act, High Pressure Gas Safety Act

General & others

Factory Location Act, Act on Improvement of
Pollution Prevention Systems in Specified
Factories, Radio Act* Local government ordinances are omitted

Training for emergencies
characteristics of each business facility, and periodicallyIssuedconduct training to prevent environmental pollution from fires
Target not reachedother facilities. General disaster training was held at the Anjo
Plant (Aichi Prefecture) on May 29 and November 26, 2019 andother training is also conducted according to thecharacteristics of each department, including training for

Kikuchi Plant, Ukiha Plant, Kitakyushu Plant

preventing outflows of raw materials and evacuation drills at

Techno Foam Japan Co., Ltd.

Head Office, Saitama Plant

night. In other facilities, training for emergencies is conducted

Higashi Nihon INOAC Co., Ltd.

* The Hanyu Plant (factory-related) and Jinno R&D Center (office-related) were added to the data collection range

on a preparatory basis.

Governance & compliance

Anjo Plant, Sakurai Plant, Nanno Plant, Yana Plant, Ishimaki Plant, Ikeda Plant,
Ikeda 2nd Plant, Ohno Plant, Jinno Plant, Ukiha Plant, Head Office (Nagoya/Tokyo),
Osaka Branch, Hanyu Plant, Jinno R&D Centerand chemical leakage (oils, solvents, etc.) from equipment andKyushu INOAC Co., Ltd.

CSR REPORT 2020

Water Pollution Prevention Act, Purification
Tank Act, Sewerage Act, Soil Contamination
Countermeasures Act

business ethics, we will continue strictly adhering to

INOAC Housing & Construction Materials Co., Ltd. Ibigawa Plant, Kofu Plant

Kyushu Color Foam Co., Ltd.

Water quality & soil

We identify accidents and emergencies according to the

1,479 cases

Target reached14

related to noise and industrial waste treatment as part of ourTreated amount 1,133 kg* Business locations from which environment data is collected to summarize major activities are shown below.
INOAC Corporation

ensure that we properly comply with laws and regulations

Air Pollution Control Act, Automobile Nox PM
Law, Act on Special Measures against Dioxins

Supply chain management

Issue CSR reportand otherwise conduct environmental risk management toTreated amount
7,245 t (2019 result)Measured units ((amount emitted + amount transferred) Measured units/ production sum) 1.86 or less
2.05
Amount emitted + amount transferred
Amount emitted + amount transferred
209,635 kg (2019 result)
188,693 kg (2018 result)

Environmental
Cases of environmental improvements
improvement activities (total in entire company) 1,123 cases or more
Environmental
communication

CO2 emissions
59,149 t-CO2 (2019 result)assessment at each plant, we prevent environmental pollution

Air

Producing an employee-friendly
workplace

PRTR substances
reduction in releaseand transfer amounts

Resultdaily basis. Through monitoring, measurement, and■ Major environment-related laws andregulations pertaining to our businessCommunication with society

Factory-related

Achieved in FY 2019are relevant to our business activities, and manage them on a

Improving value

Policies & targets in FY 2019

Initiative

At INOAC, we identify environmental laws and regulations that

Harmony with the environment

The results of INOAC’s major environmental efforts in FY 2019 are shown in the table below. In termsof reducing CO2 emissions that result from energy use, the Committee on Energy Saving continued totake the lead in various efforts, which enabled us to reach our targets. In terms of reducing waste
disposal, we moved forward in reducing emissions, including recycling and measures against defects.
However, we were unable to reach our targets because market conditions for resalable waste havebecome stricter each year. In terms of reducing emissions of substances subject to the Pollutant
Release and Transfer Register (PRTR) system, we were unable to reach our target by a small margin
because we transferred and closed several facilities, which resulted in the disposal of waste
substances.

Feature story

Summary of major activities in FY 2019

Anjo Plant: Firefighting team spraying waterReducing our environmental footprint

Reduce energy consumption

Company profile

Harmony withthe environment

To help to prevent global warming, we have been engaged in efforts to
reduce CO2 emissions by promoting energy saving. We made significant
revisions to our INOAC Energy Saving Standards, and made efforts toincluded thorough heat insulation measures, utilizing heat exhaust fromcompressors, eliminating air leakage, and applying heat shields to windows.
In 2019, our CO2 emissions resulting from energy use decreased a little—
approximately 10% in terms of intensity—compared to 2018.

■ Key efforts to promote energy saving in 2019
Installing inverters into cooling tower fansto reduce energy usage

Reducing energy usage by utilizing heat exhaustfrom compressors to heat rooms

Curtaining off areas of large workspaces
to improve the efficiency of air conditioning

Conducting air leakage patrols and eliminating air leakages
at each business location

Switching to LEDs for fluorescent lights andusing individual ON/OFF pull switches to save energy

Lining windows with INOAC’s heat insulation sheet,
CELL SHADE

Installing demand meters and visualizing demand
as a measure to address peak energy usaget

59,28260,20959,56359,149

2016

2017

2018

2019

Producing an employee-friendly
workplace

70,00060,00050,00040,00030,00020,00010,0000Communication with society■ Energy use (CO2 emission (t-CO2))

Year
Utilizing heat exhaust from compressors

Curtaining off areas of workspaces■ Energy use intensity (CO2 emission (t-CO2)/production sum (million yen))

2016

CSR REPORT 2020

0.710

2017

0.644

2018

■ Other efforts to prevent global warming
0.578

2019

Year

INOAC is working on preventing global warming from othermodal shift to railway and maritime transport, and consolidation ofperspectives as well. During the summer, we hold our Summer

distribution bases. Furthermore, we have installed and are operating

Eco-style Campaign to educate our employees on how to savesolar power generation equipment (total installed capacity 5,417

energy, such as by promoting “cool biz” energy saving attire. We arekw/h) in unused spaces on 15 different production plant sites

also engaged in cooperative transport and deliveries (milk runs), a

throughout Japan.

Governance & compliance

15

0.725

Supply chain management

Thermal insulation of worksites with THERMAX

0.8
0.7
0.6
0.5
0.4
0.3
0.2
0 .1
0.0

Improving value

Insulating buildings using INOAC’s thermal insulation board,
THERMAX

Harmony with the environmentvisualize the progress of our energy-saving activities. Major activities in 2019

Feature story

Efforts

All Committees on Waste Reduction throughout our company take the leadin promoting waste reduction activities. These include cutting back onlosses by reducing defects and improving yield; expanding on the use ofpromoting sales of the  produced from material remnants (seearticle on the right for more details); and developing recycled materials.

t

8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

amount of these substances we use, release and transfer, such as byimplementing alternatives to replace the use of 1-bromopropane as acleaning agent which we were able to fully accomplish. Conversely,from new coatings for automotive purposes, so output intensity remained
mostly level.

the life of the product. Products have longer replacement cycles and produce less
2016

2017

2018

2019

Year

waste thanks to longer product life and the use of unneeded material remnants that
had been treated as industrial waste.

2016

2017

2018

2019

Year

■ PRTR substance release and transfer amount (kg)kg

300,000
250,000

231,773

200,000

175,450 188,693

Chips (after being crushed)

209,635

150,000
100,000
50,000
0

2016

2017

2018

2019

Year

■ PRTR substance release and transfer amount intensity(release and transfer amount (kg))/production sum (million yen))
2.836

2016

2.068

2.040

2.048

2017

2018

2019

Finished product ()Year* Business places from which environment data are collected on pages 15 and 16 are shown below.
◎ INOAC Corporation, Anjo Plant, Sakurai Plant, Nanno Plant, Yana Plant, Ishimaki Plant, Ikeda Plant, Ikeda 2nd Plant, Ohno Plant, Jinno Plant, Ukiha Plant, Head Office (Nagoya/Tokyo), Osaka Branch, Hanyu Plant, Jinno R&D Center◎ INOAC Housing & Construction Materials Co., Ltd./Ibigawa Plant, Kofu Plant + Kyushu INOAC Co., Ltd./Kikuchi Plant, Ukiha Plant, Kitakyushu Plant + Techno Foam Japan Co., Ltd./Head Office, Saitama Plant + Kyushu Color Foam Co., Ltd. + Higashi Nihon INOAC Co., Ltd.
16

CSR REPORT 2020

Governance & compliance

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

Supply chain management

however, there were also increases in the use of such substances arisingin chip form, cushions exhibit less deformation over long-term use, thus extending

Producing an employee-friendly
workplaceused in coating processes. We are making efforts to cut back on thethat we produce, crushed into chips to be used as filling for cushions. With urethane

Communication with societymaterial for polyurethane foam as well as xylene and toluene which are

We are developing and manufacturing products with material remnants of urethane

Improving value

INOAC uses PRTR substances such as m-tolylene diisocyanate, a raw

6,766■ Measured units of waste treated(treated amount (t)/production sum (million yen))
0.08
0.073
0.071
0.067
0.07
0.061
0.06
0.05
0.04
0.03
0.02
0.01
0.00

Activities to reduce the use of environmentally hazardous
substances

4,988

5,685

7,245

Harmony with the environment

recycled materials, such as by separating and recycling used paper;

Development and manufacturing of the long cushion,a recycled product■ Waste treatment amount (t)Feature story

Activities to reduce waste

Company profile

Reducing our environmental footprint

Harmony withthe environment

Company profile

Managing information on chemical substances

Harmony withthe environment

Establishment and implementation of green procurement criteria

INOAC registers information on chemicals and reports it to our customers through IMDS*1, particularly in the

We ascertain what chemical substances are regulated by laws, regulations, and by our customers, based on which

automotive field which is our main field of business. We have a management system to obtain the necessary

we create our green procurement criteria - a list of those chemical substances that we should work to reduce. We

information via our supply chain and to register the information into IMDS.

present these criteria to suppliers and use them to obtain information on chemical substances contained in raw■ Information collection through IMDS in INOAC – reporting process and chemical management system
Component supplier
Products

INOAC

Communication about chemical substance management

In-house database
Products

Material supplier

Component parts
Materials

IMDS data

Chemical
substancesAutomanufacturer,
etc.

Materials

The Global Quality Assurance Division is a company-wide organization for environmental stewardship, whichorganizes and leads meetings for the chemical substance management sections of each department once every
two months. They review the green procurement criteria, check the management system and establish or change
its operating rules, and exchange opinions concerning the latest trends in chemical regulations, such as the REACH

Chemical
substances

maintain and improve management systems that are appropriate and reliable.
We also collect information and report it to our clients using the chemSHERPA format, which is widely used in theular meetings
Hold regindustrial world, especially the electrical machinery industry.

Procurement
sections
Automotive parts
sections
Urethane products
sections

Global Quality
Assurance Division

Plastic products
sections

The Automotive Division is creating an in-house database through which information on chemical substanceson chemical substances and client requirements which increase each year, while also helping to improve theefficiency and the reporting accuracy of information we register in IMDS and when examining the chemical

17

CSR REPORT 2020

ions
ement
audits at each of the sectGovernance & compliancesubstances, and centrally managed. This has allowed us to be certain of our compliance with laws and regulations

Impl

Maintain and improve
management systems

Supply chain management

Rubber products
sections

Creating an in-house database
contained in parts and materials purchased from suppliers is identified based on information about chemical

Producing an employee-friendly
workplace*1 IMDS (International Material Data System): A database for transmitting and obtaining information on materials and chemicals over theInternet for the automotive industry, which was originally developed to comply with the EU ELV Directive.
*2 chemSHERPA: A unified format to transmit information on chemicals contained in products in the supply chain, which the Ministry of
Economy, Trade and Industry took the initiative in developing.

Communication with society

regulation and RoHS Directive. They also periodically audit the management system in each department to*2

substances contained in our products.

Improving value

Components list,
drawings, etc.

we revise these criteria once each year.

Harmony with the environment

materials to be purchased. We are also consistently monitoring the latest regulatory developments, based on which

Feature story

Promoting IMDS, chemSHERPA and more

Improving value
Quality improvement efforts

18

CSR REPORT 2020

Company profile

Quality improvement efforts

Improving value

The INOAC Group has implemented a comprehensive management system based on ISO 9001 to guarantee quality and provide products and services that
our customers can be satisfied with and use safely with confidence. We are also engaged in efforts to improve quality by collaborating with our customers.
In recent years, quality fraud has become a large social issue and trust in Japanese manufacturing is wavering. Against this backdrop, the global trend is

Quality that can satisfy all customers■ Zero critical quality issues■ Ensure transparency of quality

Efforts(1) Product component audit for critical quality
We conduct audits and guidance at our production sites inquality issues in advance that could threaten our company’s
existence through the loss of social trust.

around 1965. These activities have since expanded worldwide. Starting in 1985 INOAC has held the QC Kaizen(Improvement) International
Competition on a global level in order to share quality control activities taking place throughout the group of companies. QC group activities are
currently under way at 96 locations in 12 different countries. Each country holds its own preliminary round, and the best teams then advance to the
QC Kaizen International Competition to give presentations and share what they have been doing. Broadening the deployment of the INOAC Group’s
production, technology, and quality control initiatives through this competition is not only leading to improvements in quality, but is also elevating
the cohesiveness and collective capabilities of the group as a whole.

We conduct audits of products created using new technologies,

Principles of QC group activities

with the goal of preventing serious quality issues in advance.

Audit areas
Material quality, product characteristics, product performance,
structure, exterior, comparison with similar products,
product safety, production safety, quality risks

CSR REPORT 2020

• Help to reshape and advance the company

Governance & compliance

President, Global Technology Development Division,
Global Production Management Division, Legal Affairs Section,
Intellectual Property Section, Global Quality Assurance Division,
department supervisor, product technology supervisor,
quality assurance supervisor, sales supervisor• Respect others and create cheerful, purposeful workplaces

QC group activities have an effect on both humanresources development and stimulating ourworkplaces. With the skills that these activities
develop we complete PDCA cycles for
improvements at the field level, and aim to makeeven bigger improvements. In order for allparticipants to gain a deeper understanding of theoutstanding improvement cases that made it past
the tough preliminary rounds in each block in Japanand overseas, the World QC & Improvement
Competition is simultaneously interpreted in threedifferent languages (Japanese, English and Chinese).
This makes the event a place where the participants
can learn from each other through sharing of
information and interaction.

Supply chain management

Audit members• Harness people’s capabilities and help them unlock limitless potential

Comments froman operative

Producing an employee-friendly
workplace(2) Quality audit of new products

new materials, new processes or for new usage applications,19

QC (quality control) group activities for small groups to voluntarily gather on the topic of quality control have been taking place at INOAC sinceCommunication with society

Japan and abroad to improve quality and prevent any serious■ QC Kaizen International Competition

Improving value■ 1. Activities to prevent serious issues in advanceHarmony with the environment

moving toward enforcing transparency in product development and manufacturing processes, as well as clarification of responsibility.

Basic
policyFeature story

Transparency of quality is necessary in global competition

Communication with society
Contributing to society and communities

20

CSR REPORT 2020

Company profile

Contributing to society and communities

Communication
with society

The INOAC Group takes various opportunities to engage in activities that build trust with society and communities.

Japan■ Reuse of scrap materials to contribute to communities

INOAC has been operating globally since the 1950s, and in 1987

As a company that is rooted in communities and has grown together

We are engaged in activities to reuse the scrap materials (off-specification

established the INOAC International Education and Scholarshipwith communities, we accept social studies field trips from schools in

products, material remnants, etc.) that inevitably result from ourFoundation to assist in the development of human resources capable oflocal and neighboring areas. By helping children learn about

production processes and find ways to use them for the benefit ofsucceeding throughout the world.

manufacturing at INOAC, we are supporting their education while at thecommunities and society.

Since the foundation was established it has provided scholarships forsame time opening up greater interaction with the community.

Currently we are helping to create safe spaces for kids to play at local
children’s centers by reusing off-specification polyethylene sheets tostudy abroad in Japan, and for bright Japanese students to study abroad.

make interlocking mats.

More than 300 students have received assistance during the 30-plus years

Through these activities we are reducing waste while contributing to thethat the foundation has been active.

community at the same time.

INOAC is extremely pleased to be able to help these students excel on
the future world stage.

Communication with society

bright students from China, South Korea, and various other countries to

Improving value■ Social studies fields trips at production plants

Harmony with the environment■ INOAC International Education and Scholarship Foundation

Feature story

Considering it our mission as a company to support the growth of children who are our future, we are engaged in educational and developmental activities in Japan and around the world.

Producing an employee-friendly
workplace
Supply chain management
Governance & compliance21

CSR REPORT 2020

Company profile

Contributing to society and communities

Communication
with society■ Charity activities for orphanages

Ningbo INOAC Huaxiang Automobile Products Co., Ltd. (China)

Kenjou Industrial Co., Ltd. (Taiwan)

PT. INOAC Polytechno Indonesia

Together with several other companies in the same industrial zone, we

We have been donating money to a nursery school (facility for the

A portion of the proceeds from sales of bedding and mattresses made by

are donating to local schools to help them create enjoyable educational

disabled) since 2017.

our group company are used in charitable activities for donations toenvironments.

Effort has been also made with a focus on interaction with the children,orphanages.

This year we also donated tents to serve as waiting areas by the entrance

including a special performance prepared by our group company for thePart of these activities involves building closer connections with theto shade parents from the heat when picking up and dripping off

nursery school’s opening festival.

orphans, including holding celebratory events at the end of the Ramadan

children.

We also support the facility in its operations, including periodically using

period of fasting, and donating presents.

products produced by the facility.

Improving value■ Supporting nursery schools

Harmony with the environment■ Donations to neighboring elementary schools

Feature story

Overseas

Communication with society
Producing an employee-friendly
workplace
Supply chain management
Governance & compliance22

CSR REPORT 2020

Producing an employee-friendly
workplace
Improving in-house systems
Human resource development
Safety and health / Disaster prevention

23

CSR REPORT 2020

Improving in-house systems

Promoting work-life balance■ Promoting female employees

We are actively working to support balance between

INOAC enables female employees to demonstrate their skills and capabilities, actively seeking out roles for themwork and family life, to have an employee-friendly

and creating environments where they can contribute to the company. Every year, we hold a seminar on
broaden their perspectives and advance their careers. We also hold a seminar every year aimed at male managers

According to our regulations regarding childcare leave,
employees are able to take leave until their children

and the company is leading efforts to create a system that supports the success of female employees.

are two years old. Special (paid) leave is also available■ Work related to the enforcement of the Act on the Promotion of Female Participation and Career Advancement in the Workplaceprovided to employees with one child and ten days to

to attend to sick or injured children: five days are
employees with two or more children. In addition, we

Workplace in April 2016, we have been engaged in promoting women's success at work with the three goals

offer a system of reduced working hours, which can be

below. They are designed to encourage female employees to demonstrate their potential and develop their careers

used for up to three years (available until the childin many departments over a period of five years from April 1, 2016 to March 31, 2021.

finishes third grade in elementary school). We also
gives birth to a baby.

Goals* Flextime was changed from “with core time” to “no core time”
on April 1, 2020.

(1) To raise the proportion of female subsection chiefs to that of male subsection chiefs, we will aim to promote
10% of female candidates to the position of subsection chief this term.

(3) We will make the usage rate of managers' annual paid vacation equal to that of general employees.

In order to realize a society where everyone canSince January 2015, we have been actively engaged in

expand their potential, we actively hire persons withcreating an environment in which senior citizens candisabilities. Doing so, we found that employees

effectively put their career skills to use. We are

become more considerate toward others and that it

increasing wages for employees who continue to work

creates heightened awareness.

with us, thereby implementing a system that makes it
worthwhile to rise to positions of responsibility.

24

CSR REPORT 2020

(1) Declaration and publication of company policy
INOAC declares its company policy concerning harassment, including sexual and power harassment.
(2) Establishment of consultation desks
Consultation desks to address harassment in the workplace are established in the Global HR Division in each areaof Japan. We also have dedicated consultation desks for women, and labor union consultation desks.
(3) In-house fact-finding surveys
The Power Harassment Questionnaire is administered annually to all employees to gain an understanding of theactual conditions.
(4) Harassment prevention training
All managers at INOAC are required to attend Harassment Workshops.

Governance & compliance■ Users of the continued employment system

INOAC implements the following measures against harassment in the company.

Supply chain management■ Employing persons with disabilities

Harassment prevention

Producing an employee-friendly
workplace(2) To find more female candidates for management positions, we will increase the proportion of female
participants in training courses for mid-level employees and subsection chiefs to 10%.

Communication with society

institute five days of special paid leave when a spouse

Improving value

Following the enforcement of the Act on the Promotion of Female Participation and Career Advancement in thePaternity leave (before 1980)
Flextime system (1990)
Regulations regarding family care leave (1990)
Happy Holiday Leave (1991)
Regulations regarding childcare leave (1992)
Regulations regarding measures for maternity healthmanagement (1998)
System for paid half days off (2000)
Family support holiday leave (2005)
Sick/injured childcare leave (2005)
Regulations regarding childcare leave amended (leave
period extension) (2005)
System of reduced work hours for childcare (2008)
Family Care Leave (2010)

Harmony with the environment

promoting women’s success at work, aimed at female candidates for management positions to encourage them toworkplace and promote the advancement of women.

■ Support systems to balance work and childcare(year enacted)

Feature story

Diversity efforts

Company profile

Producingan employee-friendly
workplaceHuman resource development

Company profile

Producingan employee-friendly
workplacehuman capital that can drive progress in globalization, INOAC stresses its Global HR Development activities - with a particular focus on younger employees.

The Distance Learning Program and Qualification Acquisition
Support Program are available for employees who are seeking
personal development. The Distance Learning Program offers
100 courses every year and participants get a refund of half thecost upon completion of the course. With the Qualification
Acquisition Support Program, the company sponsors employees
to take qualification exams that are specified in the program
regulations. Through continuous efforts such as these, the entire
company is engaged in supporting personal development.

■ Pre-Overseas Work Training■ Trainee System rollout

INOAC provides special training for employees whoare candidates for overseas posts to give them theskills they will need to be immediately productive inwork environments outside of Japan. This includes
lectures on key points for overseas work by in-house
instructors from various sections, and training by
instructors from outside the company fordeveloping global mindsets and leadership.
In 2019 we held sessions that provided
opportunities for candidates to listen to theexperiences of senior employees posted abroad. In
addition to hearing all the war stories, thecandidates also got to hear about the fulfillingaspects of working overseas.

In 2019 we rolled out the new Trainee System, which allows young employees to experience roughly a year ofpractical training abroad. During the first year we sent trainees to the United States and China, where they
achieved even more there than expected. The local business locations accepting the trainees are also on
board with the aim of our global human resource development, and local staff provide the trainees withattentive instruction. For this system, we are defining professional growth as taking on as many challenges as
possible over the course of a year and learning from both the successes and the failures. Many employees are
now applying to use the system. We are already considering applications for years two and three.

(Foam Product Planning Section, Business Planning Department,
High Performance Material Division)

I’ve been a trainee in the United States since
September 2019. I work together with theAmerican engineers on measures against
defects. During my time here I have participatedin several meetings and studied English in myspare time to bring my language skills up to
speed. As a result, I have been able to state my
opinions, understand others, and ultimately
contribute to reducing defects, which has been
an invaluable experience for me as an engineer.

I have been on assignment in Shanghai since
July 2019. After four months of language
training at a local university I underwent mytrainee program in Shanghai under a local
female sales manager. Through this program
I’ve been able to get a feel for the practical skills
required in Shanghai and for the way the local
staff goes about their work, and now I knowwhat challenges I want to take on myself going
forward.

■ English learning support

Governance & compliance

We provide English language lessons to boost our employees’
motivation for learning. Rather than focusing on raising testscores of younger employees, the aim of these lessons is toteach English that can be used in practical business scenarios.
The lessons are provided online, allowing employees to learn intheir preferred environments without needing to travel.
Motivation-building seminars are held before the lessons
With video letters from company officers and directcommunication by outside instructors about the importance ofEnglish, we are creating an environment that motivates young
employees.

Supply chain management

Manami Hayashi(Production Engineering Section, Resin Molding Department,
Global Automotive-related Products Division)

Producing an employee-friendly
workplace

CSR REPORT 2020

Jun Tanaka

Communication with society

As part of our human resources development
efforts, we invite international employees working at
local subsidiaries overseas to the mother plant inJapan and welcome them as trainees to increase
their technical knowledge and improve their skills.
These employees then bring back and utilize theknowledge and experiences they gained in Japan,
thus advancing localization and globalizing our
know-how. The sections that welcome theinternational employees also gain global
perspectives through this experience.

Comments froma participant

Improving value■ Distance learning program

Harmony with the environment

The INOAC Group began full-scale overseas expansion in the late 1950s, and now operates factories and offices globally in more than 50 locations. In order to develop■ Welcoming international employees

25

Personal development

Feature story

Global human resource development

Safety and health / Disaster prevention

CSR REPORT 2020

1. Large earthquakes◎ Measures to alleviate earthquake damage to buildings and facilities◎ Safety and disaster prevention equipment and stockpiles for earthquakes◎ Post-earthquake response◎ Stockpile of mattresses and other items to contribute to the community
2. Measures against fires, storms, and floods◎ Prevention of fires and explosions in
manufacturing facilities◎ Preparedness and systems for dealing
with storm and flood damage◎ Establishment of a weather
information distribution system
3. Disaster prevention education◎ Establishment of a disaster
Disaster prevention training center
prevention training center

Governance & compliance26

Safety Dojo
(1,000 employees have participated)

We take action according to our Crisis Management Regulations tominimize damage by natural and other disasters, execute accurate first
responses, and ensure early recovery.

Supply chain management

Safety conference

The Safety Dojo lets employees experience potential work hazards in safe
settings using 15 simulators that enable the employees to see, hear andfeel the hazards. The experience helps build workplaces capable ofachieving the zero-disaster standard by making employees moresensitive to potential hazards, training
their ability to predict them, and building
habits in safe work practices.
Employees will be even more alert forpotential disasters thanks to the virtual
reality (VR) system we implemented in
2020.

Disaster prevention activities

Producing an employee-friendly
workplace

1. Summary from the FY 2019 Conference(1) Reports on safety, health and disaster prevention activities(2) Statistics and analysis of disasters in the INOAC Group(3) Notices and changes in the Industrial Safety and Health Act
2. Education and awareness raising to prevent occupational accidents(1) Efforts to prevent occupational accidents• Kyushu and Tohoku (via online connection)
3. Policy for FY 2020
(1) Explanation on safety, healthand disaster prevention
activities in FY 2020
(2) Proposals from the labor union

Developing safety-conscious workers with the Safety Dojo

Heat insulating pavement(reducing road surface temperature by reflecting infrared rays)

Communication with society

Safety Practitioners Conference

Field safety inspection by top management

Managers are improving their skills and knowledge so that they can leadby example.
◎ Establishing mental health and harassment consultation desks◎ Establishing outdoor smoking space to ensure separation of smoking
areas◎ Reducing road surface temperature as an environmental measure◎ Organizing learning sessions and trainings by industrial physicians andthe health insurance association◎ Taking preventive measures againstheatstroke

Improving value

Based on the safety principles above, safety is prioritized above all,and this is demonstrated through action. When a risk becomes
known, our established practice is to “stop it, call it in, and wait.”
Our yearly activity plans include activities organized by the Ministryof Health, Labour and Welfare and monthly activities that pastdisasters have taught us to be of critical importance. We strive toimprove the safety, health and disaster prevention levels at all of
our locations by conducting repeated training and improving any
weaknesses we find in our safety, health and disaster prevention
assessments.

The following safety activities are led by top management and attended
by all members of the company.
◎ Central Safety and Health Committee meeting: Held four times per year
◎ Field inspection by officers: Held twice per year
◎ Safety Practitioners Conference: Held six times per year
◎ Safety and Health Committee meeting at each location: Held monthly
Through these activities, INOAC enhances company-wide awareness ofsafety, health, disaster prevention. We hold these meetings on safety tobuild organizational culture
and prevent thereoccurrence of disasters.

Promoting employee healthHarmony with the environment(1) Safety is the basis of the very existence of the company.
(2) All accidents and hazards are preventable.
(3) Safety is achieved through the awareness andresponsible action of each employee.

All INOAC Safety and Health Committee meetings

Feature story

Principles and basic policy for safety

Company profile

Producingan employee-friendly
workplaceSupply chain
management

27

CSR REPORT 2020

Supply chain management(1) Promotion of global procurement activities
We strive to enhance our global procurement utilizing ourvalued suppliers.

We comply with laws, social codes and internal regulations, andpromote healthy and open procurement activities.

conduct procurement with a higher level of strategy to accommodate our global production operations.

Strengthening partnerships with our valued suppliers
Together with approximately 80 valued suppliers we formed the INOAC Cooperative
Assembly, where we engage in various activities. We invite representative speakers from ourvalued suppliers to give presentations for our entire group of companies about theiractivities to raise awareness about compliance and risk management at speaking
engagements, and about the work that goes on in their subcommittees. In this way, we
strive to mutually raise the levels of all participating companies.

Communication with society(3) Promotion of fair, just and sincere procurement
activities

good relations with our valued suppliers taking long-term business relationships and the optimal quality and cost into consideration. Furthermore, we

We provide our valued suppliers with fair and just competitive
opportunities and act in good faith in our procurement
activities.

Conflict minerals

In order to keep up with environmental regulations that become

The Democratic Republic of Congo has one of the world’s richest total

environment in accordance with INOAC’s environmental

stricter every year, we revise the INOAC Green Procurement Criteria on

deposits of mineral resources. However, it is also a region—along with

policies. In addition, we give due consideration when dealinga yearly basis and engage in procurement activities that areneighboring countries—embroiled in ceaseless warfare. Minerals

with the procurement of raw materials that may cause humanenvironmentally conscious. In addition, we are also working to reduce

produced in this region become a source of funding for organizations

rights issues or social problems, such as the use of conflict

our environmental impact, such as by looking for ways to enhance

involved in human rights violations, environmental destruction,minerals.

loading efficiency as a means to improve procurement logistics.

corruption and illegal activities. Our policy is to not use such conflictsuppliers and cooperate with them to maintain and improveeach other’s technological capability and quality.

CSR REPORT 2020

minerals, and we are working with each of our business partners todisclose relevant information.

Governance & compliance

We construct firm, trusting relationships with our valued

Supply chain management

We conduct procurement with consideration for the earth’s(5) Building partnerships based on trustwith our valued suppliers

28

Green procurement

Producing an employee-friendly
workplace(4) Consideration for the environment andhuman rights in procurement

Improving value(2) Compliance with laws, social codes andinternal regulations

We contribute to the countries where our bases are located by procuring local raw materials and components. At the same time, we also aim to build

Harmony with the environment

domestic and overseas and strengthen relationships with our

Optimal procurement at our bases across the globe

Feature story

Basic Procurement Policy

Company profile

Supply chain
management

Governance& compliance29

CSR REPORT 2020

Company profile

Governance

Governance &compliance

Our basic view on corporate governance■ Board of Directors
Comprised of 10 members, the Board of Directors decides important issues in INOAC’s business. Each board member

INOAC considers the improvement of corporate governance to be an important

reports the execution, financial and performance statuses of his/her division, based on which the Board supervises

management task in order to raise the group’s performance, value and social■ Executive officer system
In order to separate supervisory and executional responsibilities, INOAC has introduced an executive officer system.

■ Corporate governance structure (organizational structure)

Each executive officer, endowed with his/her own authority from the Board, acts as the head of the department,
handle critical business execution.

Monitor
CCO

Compliance Officeand Compliance
Officers

Executive
Management
Committee

Various measures are implemented to ensure that we comply with applicable laws as well as the company’s articles of
Associated/affiliated groupcompanies

Businessunits

CrisisManagement
Committee

Internal control system
Cooperation

President

Board of Directors

Appointment and dismissal

Supervise

about the status of their business operations.

incorporation in our business execution.

■ Compliance
All employees are educated on our system for promoting compliance and our Corporate Code of Conduct.
■ Information management
Documents are managed by the Document Control Procedure that defines the responsible department/section andstorage period for each document.

Accounting audit
Accounting auditor

operations are also clarified along with audits conducted by company auditors when necessary.

■ Risk management
The Executive Management Committee manages each risk and Crisis Management Committee meetings are held
when necessary. The Negative Information Hotline is always ready to quickly obtain information about risk andprovide a structured response.

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CSR REPORT 2020

Governance & compliance■ Control structure as a corporate group
Governance rules for associated companies are established for associated and affiliated companies. Rules for businessSupply chain management

Appointment and dismissal

meeting

attend important meetings, such as board meetings, and audit the execution of duties by the directors by inquiring
Internal
Business Auditors’ audit
OfficeProducing an employee-friendly
workplace

Shareholders’■ Board of Auditors
The Board of Auditors is composed of three company auditors including two external auditors. The company auditors

Audit

Communication with society

Appointment and dismissal

Board of Auditors (including outside company auditors)

Improving value

group company or major functional organization to speed up decision-making, optimize business operations andHarmony with the environmentand controls the business execution of the company.

credibility.

Cooperation

Feature story

Corporate governance structureCompliance education

Internal reporting system

aimed to raise awareness on compliance is provided to sales

to act immediately in the event of any compliance-related violation. To

representatives, staff in charge of procurement, new employees andthis end, INOAC has established the Help Line through which anyone may

INOAC believes that the compliance requirement goes

mid-career hires at all INOAC business locations. The educational program

consult directly with both the legal department and an external law firm

beyond simply following the applicable laws and requires

looks at examples of compliance violations that have occurred at otherabout their concerns. Internal Reporting and Whistleblower Protection

each employee to act with a high level of ethics. In ordercompanies and conducts case studies on how such issues could occur inRegulations have also separately been established to protect

for INOAC to satisfy its corporate responsibilities andone’s own workplace. The program also holds discussions on questions

whistleblowers from any form of retaliation.

expectations from customers, it is not enough to simply

about matters requiring clarification which arise in day-to-day work

follow the applicable laws. Employees must also recognize

operations. Through these efforts, we are working to raise each

their social responsibilities as part of the corporation.

individual’s awareness of compliance.

Internal audits

Negative Information Hotline

Field audits are conducted at each section and domestic group company

The Negative Information Hotline (consultation line) has been establishedCompliance Office has been established within the Tokyo Head Office. We

covering aspects such as compliance, risk management and observancefor employees to report not only compliance issues, but also any issues

have appointed a Chief Compliance Officer (CCO) to lead the Complianceof laws. Areas that are deemed in need of improvement by the results ofregarding product quality, safety, the environment, sales, procurement

Office and Compliance Officers for each jurisdiction and business location

field audits are tracked regularly to raise the governance standards of theand more. When such issues arise, the company will be able to respondin Japan and overseas. In addition to establishing internal regulations, we

INOAC Group as a whole.

immediately and take measures to keep problems from spreading.

are also creating systems to raise employee awareness toward

Global Quality Assurance Division

Safety and environmental issues
Safety and Health Hazard Management Section

Information on compliance
Legal Affairs Section, Corporate Planning Dept.

Information on sales, procurement, etc.
Corporate Planning Div.

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CSR REPORT 2020

Governance & compliance

Negative
Information
HotlineSupply chain management

Quality issues

compliance.

Producing an employee-friendly
workplace

The Compliance and Ethics Program has been implemented, and a

Communication with society

Compliance and Ethics Program

Improving value

In order to thoroughly enforce compliance, the company must be readyHarmony with the environment

In addition to establishing internal regulations, an educational programFeature story

Basic views
on compliance

Company profile

Compliance

Governance &complianceCompany profile
Feature story

This report was prepared based on the business activities of INOAC Corporation during FY 2019 (January 1 - December 31, 2019).

Improving value

Reporting period

Harmony with the environment

Applicability of report* Also includes some information from FY 2018 and before, and from FY 2020.

IssuedGuidelines
for reference

The business activities of INOAC Corporation on a non-consolidated basis, including certain domestic and overseas companies of the INOAC Group.
November 2020
◎ Environmental Reporting Guidelines FY 2018 Edition ◎ ISO26000

Communication with society

Applicable scope

Producing an employee-friendly
workplace
Supply chain management
Governance & compliance32

CSR REPORT 2020

Inquiries

INOAC CORPORATIONPR Section, Corporate Planning Department
4F Osaki West-city Bldg., 2-9-3 Osaki, Shinagawa-ku, Tokyo 141-0032
Phone: 03-6680-8168

E-Mail: pr@inoac.co.jp

https:/ / www.i noac .c o. jp/