ESG Initiatives in Line with the Medium- to Long-term Management Targets
Sustainability and ESG Initiatives

ESG
Sustainability Promotion System and Governance and Risk Management
The SUMINOE GROUP holds meetings of the CSR Promotion Committee three times a year, under the corporate
governance and CSR promotion system (see p. 53). Chaired by the Managing Director and Representative Director(General Manager of Administration Headquarters), the Committee deliberates on the activity policies and important
challenges in the CSR and sustainability fields, related risks to be addressed with priority, etc. The results of deliberations
are reported to the CSR & Internal Control Council (Executive Committee) and then approved of at the meeting of theBoard of Directors.

Basic Approach to the Basic Policy on Sustainability and Related Policies
In the course of promoting ESG management, the Group is working to achieve the Medium- to Long-term Management
Targets “SUMINOE GROUP WAY 2022-2024-2027.” Particularly in the fields of CSR and sustainability, we believe that it isimportant to identify key sustainability issues to focus on (see pp. 17-18) and address these issues through its business
operations. With this recognition, we regard the Basic Policy on Sustainability and Related Policies as guidelines forresolving the key sustainability issues and achieving sustainable growth of the Group.

Basic Policy on Sustainability
The Suminoe Textile Group contributes to the realization of a sustainable society by achieving sustainable growththrough sound, transparent management and business activities in harmony with society and the environment whileobserving its Code of Conduct and the Standards of Conduct, both of which are based on the Corporate Philosophy.

Framework of the Basic Policy on Sustainability and Related Policies
Basic Policy on Sustainability

Sustainability-Related Policies
E (Environment)

Second SUMINOE Environmental Declaration

Developing Sustainability-Related Policies
Status of Development in FY2023 and Future PlanSUMINOE GROUP Human Rights Policy(formulated on June 1, 2023)
We at the SUMINOE GROUP believe that respect for humanrights is an important element that forms the foundation
for management in conducting global business operations.
The Company Motto of the SUMINOE GROUP upholds“cooperation,” which represents the spirit of mutual
improvement through the effective use of diverse
personalities of employees. The Group’s Code of Conduct
stipulates due respect for employees’ individual
personalities and high importance of their health and safety.
Under this motto and this code of conduct, we have strived
to ensure a sound working environment where no
employees are harassed or discriminated against because of
their race, beliefs, religion, nationality, physical features, etc.
In addition, on June 1, 2023, we formulated the Group
Philosophy, which lays out our mission: bring people- andsociety-friendly spaces to the world through technology
and ideas that closely support people’s lives. To fulfill thismission, we are aware that it is essential to pay respect not
only to officers and employees of the SUMINOE GROUP but
also to suppliers and other stakeholders and to build
relationships of trust with them all.
We recognize that the Group may have negative
impact on human rights directly or indirectly through its
business activities. With this recognition, we established the
SUMINOE GROUP Human Rights Policy as a basic policy thatclearly displays the Group’s attitude of respecting humanrights of all people engaged in our business activities. In linewith this Policy, we will continuously push forward withinitiatives and fulfill our responsibilities with the aim ofrespecting human rights.

Human Rights Policy*

Health Management Declaration

Health and Safety Policy

Basic Policy on Work-Life Balance

Basic Policy on Human Resource Development

Basic Policy on Sustainable Procurement*

SUMINOE GROUP Human Rights Policy

Basic Policy on Diversity and Inclusion

Basic Policy on Product Safety and Quality*

1. Basic approach

S (Social)

Basic Policy on Sustainable Procurement(preparations are under way for formulation in January 2024)
The SUMINOE GROUP considers that, in order to resolve
environmental and social issues through business
operations, it is indispensable that not only Group
companies but also all members of the entire supply chain
work in collaboration. Currently, preparations are under way
to formulate the Basic Policy on Sustainable Procurement,
which will guide such collaborative efforts.
Concurrently, we are making preparations to create
the Guidelines for Sustainable Procurement as the common
guidelines to be shared throughout the Group’s supply
chain.
Basic Policy on Product Safety and Quality(preparations are under way for formulation in January 2024)
The SUMINOE GROUP is making preparations forformulating the Basic Policy on Product Safety and Quality,
which aims to establish quality management, ensurecompliance with safety standards defined by law, andprovide accurate information on products and services.
Taking advantage of the strengths of manufacturingthat the Group has nurtured since its founding, we will
implement measures toward realizing a sustainable society
and quality improvement in pursuit of operations thatenhance customer satisfaction.
CSR Plan
Focusing on our medium- and long-term “ideal corporate
image,” we have formulated the Medium- to Long-termManagement Targets as well as the 3rd Medium-term CSR Plan(for 2021 to 2024), in which our key CSR issues are identified. To
address these issues, the Group is moving
ahead with various initiatives. As for our CSR
initiatives, the 3rd Medium-term CSR Plan,
and the results of CSR activities in fiscal 2023,
please visit a webpage by scanning the 2D
barcode on the right.

2. Scope of application*As for the policies marked with an asterisk, in FY2023 we made preparations for the formulation.

Since the fiscal year ended May 2022, the Group has worked to develop the Basic Policy on Sustainability and Related
Policies as the guidelines for its sustainability initiatives.
In the G (governance) aspect, the SUMINOE GROUP has established its Code of Conduct and its Standards of Conduct,both of which lay out the basic policy for ensuring full compliance in business activities. The Group has also beenendeavoring to strengthen governance by developing the Basic Policy on Sustainability and Related Policies,
implementing initiatives in line with these policies, as well as checking and evaluating the progress.

37

SUMINOE GROUP Integrated Report 2023

3. Human rights due diligence

SDGs on Which the SUMINOE GROUP Focuses

4. Redress and remedy

The Group has selected the following seven goals fromamong the 17 Sustainable Development Goals (SDGs) as
priority targets on which the Group focuses, in order tohelp resolve social sustainability issues through ourbusiness operations.

5. Governance system and in-housesystem
6. Education
7. Dialogue with stakeholders
8. Information disclosure* Scan here for thefull Japanese text.
(English text will
be published on
our website incoming May.)SUMINOE GROUP Integrated Report 2023

38

ESG Initiatives in Line with the Medium- to Long-term Management Targets
Initiatives to Address Key Sustainability Issues toward Achieving the Medium- to Long-term Management Targets

ESG
Results for fiscal year ended May 2023
CategoryE

Key sustainability issues selectedfrom the SGW challenges
Reduction of CO2 emissions, and development anddistribution of products for environmental measures(Environment)

Safe and secure work environment

S

Participation and cultivation of diverse humanresources(Social)Improvement of corporate brand value

G(Governance)

Enhancement of governance

Results

Relatedpage① Reduce CO2 emissions in the business activities.

Reduced by 36.9% as compared with FY2021 levels (basic unit), Eco Challenge 2024 target: Reduce by 3% as compared with FY2021,
by FY2024 (basic unit).

P43② Increase volume of contribution to the reduction of CO2 emissions through products.

Shipments of ECOS® series, eco-friendly carpet tiles under the horizontal recycling system (recycled material ratio of 84%):111.2% compared with previous FY-③ Develop and sell environmentally friendly products.

Number of developed products/technologies Interior Fittings: 2, Automotive Textiles:1, Traffic Facilities: 1, Total: 4P45④ Review, transmit, educate and disseminate our human rights policy.

Formulated the SUMINOE GROUP Human Rights Policy (June 2023).

P38⑤ Conduct training for the prevention of harassment.

Conducted training for the prevention of moral harassment (five Group companies in Japan).

P48⑥ Eliminate occupational accidents.

Rate of lost-worktime injuries Result: 1.39

P52

⑦ Acquire “Certified Health & Productivity Management Outstanding Organizations.”

Promoted work-life balance, implemented measures against lifestyle-related diseases, etc., measures against mental health problems,and activities to raise heath improvement awareness.

P51⑧ Teleworking and off-peak commuting system

Introduced regulations on work from home and the staggered working hours system (three Group companies in Japan).

〃⑨ Support for life-work balance (work, childrearing and nursing care)

Rate of employees taking childcare leave Male: 16.7%, female: 100% (Suminoe Textile Co., Ltd. , SUMINOE Co., Ltd.)〃⑩ Paid leave by the hour, flex-time system

Discussed the introduction of an attendance management system.

-⑪ Promote women’s participation.

Ratio of new female graduates hired: 48.7%, ratio of female managers: 5.1% (17 Group companies in Japan)

P51⑫ Employ people with disabilities.

Employment rate of people with disabilities: 1.6% (17 Group companies in Japan)-⑬ Employ foreign workers.

Number of present foreign employees: 24 (including 10 newly hired employees) (17 Group companies in Japan)-⑭ Participation of senior employees

Re-employment rate: 89.4% (17 Group companies in Japan)-⑮ Education for human resources (IT literacy, education for corresponding stages, etc.)

Level-based, role-based, and skill improvement training: 312 participants, correspondence course and language training:
130 participants Total: 442 participants

P48⑯ Career self-declaration system

Instituted the career self-declaration system at Suminoe Textile Co., Ltd. (June 2023).

〃⑰ Job rotation

Implemented personnel transfer within and beyond the department.

-⑱ Review of human resources management and evaluation systems

Instituted systems stated in ⑧ and ⑯.

⑲ Dissemination of corporate philosophy and management policy,
and the progress will be shared.

Launched the “Shin Mirai (lit. new future) Project” for promoting branding and formulated the SUMINOE GROUP Philosophy (June 2023).

P49⑳ Consider the timely disclosure of information and transmit it.

Disclosed information via the web and through the in-house intranet, as required.

-㉑ Communication between departments

Implemented the Tsunagu meeting and Tsunagu-wa-cation.

P50㉒ Contribution in cases of disasters

Domestic sites: 0, overseas sites: 0-㉓ Support and donation for poverty and starvation

Domestic sites: 0, overseas sites: 3-㉔ Restructure the core systems.

A production management system and a receivables/payables management system being introduced in sequence

P58, 60㉕ Promote interactive in-house communication through top management’s frequent
visits to workplaces.

Number of top management visits: eight domestic sites, one overseas site (between October 2022 and July 2023)

P58㉖ Continue to conduct compliance training.

Conducted training for officers and executive employees.
Conducted training for young employees and level-based training offered at every promotion, on such topics as compliance,
work-related laws and regulations, and occupational health and safety.

㉗ Further disseminate “Corporate ethics hotline.”

Continuously announced the whistleblowing contact points for consultation.

-㉘ Strengthen global risk management.

Started full-scale operation of the production management system.
Revised a risk management manual, “Crisis Response Manual on Overseas Assignment.”

P60㉙ BCP action plan

Established in-house emergency contact routes and implemented personal safety confirmation drills.

〃

Measures

Target: 1.0

P48, 51

P48, 61

Regarding the key performance indicators (KPIs) for the key sustainability issues in the SGW challenges, we are planning to establish the KPIs in the course ofidentifying the Group’s materiality (key issues) in the future.

39

SUMINOE GROUP Integrated Report 2023

SUMINOE GROUP Integrated Report 2023

40

ESG Initiatives in Line with the Medium- to Long-term Management Targets

E

Environment

Under the Slogan of KKR+A
Kenko
Kankyo(Health) (Environment) Recycling

Activity Guidelines
Amenity

In carrying out environmental conservation activities
We will positively promote energy-saving, resource-saving, and recycling with a consideration not to contaminate
environment in all of our business activities.
We will try to preserve environment through products’ life cycle from production, sales to disposal by developing

As an industry pioneer, the SUMINOE GROUP has pushed forward with the development and application of advanced technologies thatare friendly to human health and the environment. In 1998, the Group announced “KKR+A (Kenko [Health], Kankyo [Environment],
Recycling and Amenity)” along with the Interior Environment Improvement Declaration. Since then, under its fundamental development
philosophy “KKR+A,” the Group has been working on research and development of technologies and products that are friendly topeople and the environment while promoting interior environment improvement and utilization of recycled materials. The Group also
upholds the Fundamental Environmental Philosophy, to be followed in all aspects of our business operations. We have been positively
tackling environmental preservation activities, including decreasing our impact on the environment, in accordance with the Activity
Guidelines and activity goals. In April 2022, we announced the Second SUMINOE Environmental Declaration, which aims to ensure thatour products will be used by many more people and to promote “KKR+A” around the world through implementation of global strategies.
The entire SUMINOE GROUP will make concerted efforts to accomplish these objectives.

environment-friendly technology and products.
① Development of technology for energy-saving and resource-saving② Development of recycling technology and recycling system③ Development of products and technology to replace materials which would put less load on environment andhave more safety④ Development of product which could improve interior environment and contribute to health and comfort
We will try to live together with community through close communication and all employees will start action from
whatever one can do.
We will try to maintain internal system to promote environmental protection and enhance environmental
consciousness of all employees.

Fundamental Environmental Philosophy
Recently, deterioration of the global environment has rapidly been progressing. It is a mission in common among human beings who liveon Earth to make efforts to preserve and improve the global environment and hand the beautiful earth down to our descendants. With
this recognition, the Suminoe Textile Group will create a comfortable and rich society with the cooperation of all the employees positively
tackling environmental preservation activities.

Environmental Protection Promotion System
The Environmental Promotion Subcommittee was set up within the CSR Promotion Committee. Environmental measures drawn up andfinalized by the subcommittee are implemented in all divisions throughout the Group.
CSR Promotion Committee

Suminoe Textile
Headquarters &Administration Headquarters

Second SUMINOE Environmental Declaration

1

We shall provide healthy and environmentally friendly products.

We will provide safe and secure products to our customers by properly managing chemical substances used in our products based on theGreen Procurement Guidelines regarding legal regulations and restrictions on materials used in products.

2

Executive Committee

CSR & Internal
Control Council

CO2 Visualization
Subcommittee

We shall address the circulating society.

We shall promote the reduction of CO2 emissions.

To play a part in realizing a decarbonized society, we will develop and provide low-carbon products based on the Life Cycle Assessment(LCA) method. LCA is intended to comprehensively and quantitatively evaluate the impact of manufacturing activities on theenvironment while taking into consideration the entire life cycle of products ‒ materials, manufacturing, transportation, use, anddisposal.

41

Environmental
Management WG

Automotive Textile
Business Headquarters

OfficeManagement WG

Traffic Facilities
Business Headquarters
Functional Materials
Business Headquarters
Technical and Production
Engineering Headquarters

Introduction of Environmental Management System
The Nara Factory obtained ISO 14001 certification in fiscal 2001, making it the first among the Group to be awarded certification on
environmental management. To date, five factories in Japan have obtained ISO 14001 certification, and one factory Eco Action 21
certification.

To contribute to the reduction of industrial waste and the recycling of resources in the life cycle of products, we will actively use recycledmaterials as part of our eﬀorts to promote environmental conservation and the eﬃcient use of resources.

4

Environmental
Promotion Subcommittee

We shall work to prevent global warming.

We will promote the eﬀective use of resources by reducing losses of primary materials, auxiliary materials, water, and energy occurring in
the production process. We will also update energy-saving facilities constantly, improve product quality, reduce the weight of products,
simplify packaging and reduce its weight. At the same time, we will strive to increase the eﬃciency of transportation of materials andproducts, material utilization, and waste disposal during manufacturing, thereby promoting resource and energy conservation
throughout the supply chain.

3Interior Fittings
Business Headquarters

Working GroupSUMINOE GROUP Integrated Report 2023

ISO 14001: 2015

Eco Action 21: 2017

Nara Factory, Shiga Factory

Teijin Tecloth Ltd.

Owari Seisen Co., Ltd.:
Head Office Factory, Ishikawa Factory

Japanese Standards Association

Japan Quality
Assurance Organization

Japan Quality Assurance Organization

Registration number

JSAE 235

JQA-EM1519

JQA-EM3114

0009522

Registration date

May 2000

April 2001

March 2003

July 2013

7th renewal completed (July 2023)

5th renewal completed (July 2023)

Screening andregistration agency

Registration renewal 7th renewal completed (May 2021) 7th renewal completed (April 2022)

TANGO TEXTILE Co., Ltd.
Institute for Promoting
Sustainable Societies

SUMINOE GROUP Integrated Report 2023

42

ESG Initiatives in Line with the Medium- to Long-term Management Targets

E

Environment

Initiatives to Address Climate Change Issues
Target for reducing greenhouse gas emissions

Target for reducing greenhouse gas (CO2) emissions*■ Scope1: Direct greenhouse gas (GHG) emissions from the Group’s business operations■ Scope2：Indirect GHG emissions from the use of electricity, heat, etc. supplied by others(Unit: t)

Reduce GHG emissions by
35% from FY2014 (fiscal year

80,000ended May 2014) levels
60,00040,000

0
2014

2021

2031

(Fiscal year)■ As for Scope 3 emissions (Indirect emissions that are generated by othercompanies related to the Group’s business operations, excluding Scopes 1 and2), the calculation is currently under way.
* Per unit of sales

Information disclosure in alignment
with the TCFD recommendations

1. Governance
The Group has established the following governance system. The
Environmental Promotion Subcommittee set up within the CSR
Promotion Committee, which comprises members from respective
business headquarters and departments, draws up a plan formeasures to address environmental challenges as a whole,including climate change issues. The CSR Promotion Committee
deliberates on and finalizes the plan, which is implemented in all

43

SUMINOE GROUP Integrated Report 2023

3. Risk management
With regard to climate change-related risks, the Environmental
Promotion Subcommittee plays a central role in the formulation of
relevant polities and strategies to minimize risks and seize
opportunities, and in management of activity monitoring.
4. Metrics and targets① Eco Challenge 2024
Eco Challenge 2024 covers the three years from FY2022 to 2024
and aims to reduce CO2 emissions by 3% from the levels of FY2021(per unit of sales).

② The Suminoe Textile Group’s Target for Reducing Greenhouse
Gas Emissions
By FY2031 (fiscal year ending May 2031), the Group aims to reduce
CO2 emissions (per unit of sales) resulting from business activities by
35% from the levels of FY2014.
In the Group’s Target for Reducing Greenhouse Gas
Emissions, Scopes 1 and 2 emissions are used as metrics.
As for Scope 3, we started calculation of emissions from thesix major Group companies in Japan. As the first step toward
reducing Scope 3 GHG emissions, we will figure out the actual
situations of these six companies and discuss specific measures.

Examples of climate change-related risks/
opportunities according to the TCFD final report
Category of risks/opportunities
Policy andlegal risks

Major aspects/viewpoints
・Stricter regulations on GHG emissions
・Expanded obligations to disclose information

Analysis of impacts on the Group*1

2°C or lower
4°C
scenario*2 scenario*3

・Replacement of existing products withlower-carbon technology options
Technology risks ・Introduction of new technologies

Transition risks

Risks associatedwith the “transition”
to low-carbon
economyPhysical risks
Risks associatedwith “physical”
changes caused byclimate change

・Changing customer behavior
・Uncertainty in market signals (greater difficultyin forecasting market movements withconventional ways of thinking)・Increased cost of raw materials
・Shifts in consumer preferences
・Stigmatization of the sector that makes less
Reputation risks contribution to low-carbonization
・Increased stakeholder concern or negative
stakeholder feedback
・
Increased severity and number of extreme
Acute risks
weather events such as cyclones and floods
Market risks

Chronic risks

・Decreased demand and revenues due to changes in
the company image perceived by consumers
・Increased measures to address stakeholder feedback
regarding the company’s response to climate change・Decreased capabilities for production and distribution
due to ceased facility operations, interruptions oftransportation means and supply chains, etc.
・Negative impacts on workforce (e.g., health, safety,
absenteeism)
・Increased costs of provisions for damage to facilities

・Changes in precipitation and weather patterns
・Rising mean temperatures
・Rising sea levels

・More efficient production and distribution
processes
・More efficient modes of transportation
・Use of recycling
・Reduced water usage and consumption
・Use of low-carbon energy sources
Energy source
Positive impacts associated with a shift ・Use of new technologies
・Shift toward energy security and decentralized
to low-carbon energy sourcesenergy generation
・Development and/or expansion of low-carbon
goods and services
Products and services
・Development of new products or services
Positive impacts associated with thethrough R&D and innovationneeds of a low-carbon society
・Diversified business activities and a shift inconsumer preferences

・Increased production capacity, resulting in increased
revenues, due to efficient improvements in production
and distribution processes and modes of transportation
・Cost reduction resulting from improved efficiency inresource utilization related to business operation
・Reduced exposure to fossil fuel price increases
・Reduced exposure to GHG emissions and therefore lesssensitivity to changes in social cost of carbon

Resource efficiency

Positive impacts associated withimproved efficiency in resource
utilization

MarketPositive impacts associated withchanges in the market and economy due
to the trend toward a low-carbon society

Resilience
Positive impacts associated withresilience to climate change

Example of potential impacts
・Increased costs for switching to renewable energies
and energy-saving equipment
・Increased costs related to information disclosure
・Write-offs and early retirement of existing assets
・Increased costs for system changes and introduction of
new processes
・Increased workload in business operations, formodification management, etc.
・Shift in consumer preferences and reduced demand,
resulting in decreased revenues
・Increased production costs
・Increased costs for waste treatment

・Increased revenues through satisfying demand for
products that emit fewer GHG emissions
・Better competitive position to reflect shifting consumer
preferences, resulting in increased revenues

・Access to new markets

・Increased revenues through business expansion into
new and emerging markets

・Promotion of renewable energy programs andenergy-saving measures
・Resource substitutes/diversification
・Increased reliability of supply chain・Increased corporate valuation due to resilience toclimate change (resilience plan contents,
establishment of a stable supply chain, diversity ofalternative resources, etc.)*1 The directions of respective arrows indicate that potential business and financial impacts will be ⬆: Very significant: Somewhat significant ➡: Insignificant*2 2°C or lower scenario: A scenario where strict measures, including implementation of bold policies and promotion of technological innovations, are taken to reduce CO2 andother GHG emissions so that the increase in the global average temperature by 2100 is limited to less than 2°C above pre-industrial levels.
*3 4°C scenario: A scenario where the current measures against climate change go unchanged globally so that the average temperature rises around 4°C above pre-industrial
levels. Natural disasters continue to worsen, resulting in an increase in risks such as extreme weather events.
⬆

In July 2022, the Group declared its support for therecommendations from the Task Force on Climate-related Financial
Disclosures (TCFD). We will disclose the Group’s information on
climate change issues in alignment with the TCFD
recommendations.

the core of the Group’s development philosophy is thedevelopment of environmentally friendly products. Efforts todevelop and increase sales of these products will provide us with anopportunity associated with the transition to a decarbonizedsociety. With this recognition, we will further intensify and focus on
these efforts.

We have analyzed impacts that climate change-related risks and opportunities will have on the Group’s business and financial
performance.

Opportunities

20,0002. Strategy
To reduce environmental impact that may arise from our business
operations, we have formulated “Eco Challenge,” a set of goals on
activities regarding environmental issues in general, in line with theMedium- to Long-term Management Targets. For three years fromFY2022 to FY2024, we have worked on “Eco Challenge 2024,”
under the policy of the Medium- to Long-term Management
Targets “SUMINOE GROUP WAY 2022-2024-2027.”
In April 2022, we established the Suminoe Textile Group’s
Target for Reducing Greenhouse Gas Emissions to set up ourlong-term target for reducing greenhouse gas (CO2) emissions. At

Analysis of impacts on the Group based on the TCFD final report

Risks

In accordance with the policy of the Medium- to Long-termManagement Targets “SUMINOE GROUP WAY 2022-2024-2027,”
the Group established its long-term target for reducing
greenhouse gas (CO2) emissions in April 2022.
Specifically, by FY2031 (fiscal year ending May 2031) all theGroup companies will strive to reduce CO2 emissions in businessactivities by 35% from the levels of FY2014 (fiscal year ended
May 2014).
To promote the reduction of CO2 emissions resulting fromour business activities, we will implement concrete measures,
including improving logistics systems, unifying the production
bases, improving energy efficiency, changing fuels used, andpromoting working style reforms. In conjunction with thesemeasures, we will strive to expand sales of environmentallyfriendly products. Through these two approaches, the Groupwill contribute to the realization of a decarbonized society.

departments throughout the Group. The matters deliberated on
and decided by the CSR Promotion Committee are reported to the
CSR & Internal Control Council (Executive Committee) to obtainapproval.
We have also formulated “Eco Challenge,” as a set of goals on
activities regarding environmental issues in general, established inline with the Medium- to Long-term Management Targets. The
Group strives to achieve Eco Challenge goals to reduce
environmental impact from its business operations. Each fiscal year,
the activity results are evaluated and reported via this Report, etc.
In addition, in May 2021 we launched the CO2 Visualization
Subcommittee as an organ tasked with grasping and analyzing theGroup’s overall greenhouse gas emissions and designing strategies
for reducing these emissions.

Initiatives to reduce greenhouse gas emissions
Reducing GHG emissions from business activities
In fiscal year ended May 2022, the Group completed energy
conversion at overseas and domestic bases and reorganization of
two factories of Suminoe Techno Co., Ltd., resulting in improved
efficiency of production and logistics. In fiscal year ended May
2023, we introduced photovoltaic power generation systems intosome overseas production sites to promote renewable energy use.
In this manner, initiatives are under way to reduce greenhouse gas
emissions from business activities.

Contribution by products
Chief among the Group’s environmentally friendly products are the
ECOS® series, eco-friendly carpet tiles under the horizontal
recycling system, and ECONIX, a car seat covering material thatutilizes スミトロン® (SUMITRON) yarn made from recycled chips.
These eco-friendly products have steadily come into widespread
use and continue to penetrate.
By expanding sales of these products and further improving therecycled material ratio, we will enhance the degree of contribution
by our products in reducing greenhouse gas emissions.

SUMINOE GROUP Integrated Report 2023

44

ESG Initiatives in Line with the Medium- to Long-term Management Targets

E

Environment

Eco Challenge 2024
Business activities undertaken by the SUMINOE GROUP are deeply connected to the environment. This holds true to our daily operations,as well as to the entire lifecycle of our products—from product development and design, material procurement, production, sales,
distribution, consumption, disposal and recycling.
The Group is working on assessing and reducing the impact on the environment from all of our business activities and our products
throughout their lifecycle. We are committed to manufacturing environmentally friendly products. One example is active use of recycledmaterials, including polyvinyl chloride powder recycled from used carpet tiles and raw cotton and polyester pellets recycled from PET
bottles. To promote sustainability, we place focus on environmental conservation, and Group-wide efforts are underway to achieve thegoals set under Eco Challenge 2024.

③ 3Rs regarding Waste Material
We are striving to reduce industrial waste generation byminimizing unused materials for our products, by not
manufacturing products that do not pass quality standards, andby using resources effectively.

Changes in amount of industrial waste generated■Amount of industrial waste generated●Basic unit（t）
10,000
8,000

75.4

75.7

80.7

(kg/¥1 million)
100

70.8

65.3

40

4,000
2,000

Eco Challenge 2024

7,434
2019

Work areas

Final numericaltargets

Index

Base FY

FY2023 numericaltargets

FY2023 results

Evaluation

1

Prevention of
global warming

Reduction of CO2 emissions(energy consumption)

Reduce by 3% (basic unit).

2021

2

Resources
conservation

Increase in utilization rate of recycledresources (major factories in Japan*1)

Increase 3%.

2021

Increase by 2%.

Increased by 24.5%.

○

Reduction of industrial waste

Reduce by 3% (basic unit).

2021

Reduce by 2% (basic unit).

Reduced by 19.1%.

3Rs regarding
waste material○

3

Increase in recycling rate

65% or more―

65% or more

39.4%

△

Reduction in rate of waste
disposed of in landfills
Reduction of air pollution(reduction of N2O emissions)
Increase in green purchasing rate
for office supplies (in Japan)

10% or less―

10% or less

36.3%

△

Reduce by 3% (basic unit).

2021

Prevention ofenvironmental pollution
Promotion of5green activities

6

Promotion of LCA assessment for products

8

Reduce by 2% (basic unit). Reduced by 36.9% (basic unit).

Reduce by 2% (basic unit). Reduced by 23.3% (basic unit).

―

95% or more

95% or more―

Perform LCA for 18 items.

*2

7

89.2%

12 items

40 items○○

1 case△Promotion of development of environment-friendly products*2

9 cases―

6 cases

7 cases○

Promotion of biodiversity preservation in business activities

―

―

―

―

―

○: Attained △: Not attained at some factories ×: Not attained
Basic unit: Consolidated sales used as a denominator for calculation
Emission factor: For domestic factories, the amounts of CO2 and N2O emissions are calculated based on an emission factor set in accordance with the law to promote measures against
global warming. For overseas factories, the calculation is based on an emission factor set for each country in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories.
*1 Major factories in Japan: Shiga Factory and Nara Factory Suminoe Techno Co., Ltd., Teijin Tecloth Ltd., and Head Office Factory and Ishikawa Factory Owari Seisen Co., Ltd.
*2 The figures for targets and results are cumulative totals from FY2022 to FY2023.

Results for fiscal 2023
② Resources Conservation
We are actively using recycled resources for product manufacturing to promote savings in resources.

Change in CO2 emissions

Changes in utilization rate of recycled resources(Major factories in Japan)■Domestic

40
20

58.5
22.4

51.0
18.8

●Basic unit

0.566

0.6

0.496

45.1
18.7

40.5
16.6

33.9
9.9
24.0

32.3

26.4

23.9

2019

2020

2021

2022

SUMINOE GROUP Integrated Report 2023

（％）
50
40

0.358

36.1

0

45

■Overseas(t/¥1 million)

80
60

6,192

2022

0
2023 (Fiscal year)

2021

20

36.4

●Rate of waste disposed of in landfills

39.1

42.5

33.6

32.5

32.2

2019

2020

2021

2022

200

3.73

Using locally-grown native species, not nonnative species,
for tree planting●Basic unit
10

328

303

291

277

3.58

3.80

3.56

2.92

8
6
4
2

0
2019

2020

2021

2022

0
2023 (Fiscal year)⑤ Promotion of Green Activities
We are actively promoting purchases of environmentallyfriendly office equipment and supplies to reduce their impact on
the environment throughout their entire life cycle, fromcollection of materials to disposal.

0.4

0.2

0.0
2023 (Fiscal year)

46.4
37.7

37.3

49.9

40.1

30
20
10
0
2019

2020

2021

2022

2023 (Fiscal year)

（％）
100

90
80

85.2

86.2

86.1

2019

2020

2021

⑧ Environmental Activities for Preserving Biodiversity in
Business Operations

2023 (Fiscal year)■N2O emissions

100

railroad vehicles, featuring a backing created by using
ECOS® specifications

Monitoring the situation on biodiversity around factories
and their vicinity(g/¥1 million)3673) ECONIX, a seat covering material that utilizes スミトロン®
(SUMITRON), which is eco-friendly yarn made from recycled
chips4) ECOS-US3000 and ECOS-MD8500 series of carpet tiles for

36.3④ Prevention of Environmental Pollution
Among atmospheric contaminants, nitrous oxide (N2O) is usedhere as an example to explain the situation of air pollution.

Changes in N2O emissions

Promotion of Development of Environment-Friendly Products
1) ECOS NEO™ series of carpet tiles, which achieves a recycledmaterial ratio of 81% by using recycled materials on the pilesurface and the backing2) SORAIRO, a rug made of 50% recycled wool

Activity Policy1）Reduction of impact on biodiversity from business activities

39.4

Changes in green purchasing rate for office supplies (in Japan)① Prevention of Global Warming
We assess the impact of our corporate activities on global
warming based on CO2 emissions.

0.557

5,782

0

○

2 cases

40.8
38.2

300

―

0.593

30

△

3 cases

2020●Recycling rate

（kg）
400

Promotion of development of environment-friendly technologies*2(1,000 t)
100

6,434

Changes in recycling rate and rate of waste disposed of in landfills（％）
50

Activity Goals and Fiscal 2023 Results

4

6,932

0

As a set of goals on environmental activities, we have formulated Eco Challenge 2024, which covers the three years from fiscal 2022 to
2024.

80
60

6,000

⑦ Promotion of Development of Environment-Friendly
Technologies and Products

91.1

89.2

2022

2023 (Fiscal year)0⑥ Promotion of LCA* Assessment for Products
We have conducted in-house LCA assessments for our products
since fiscal 2016. Between fiscal 2022 and 2023, we carried out
LCA assessments for 40 items.
* LCA: Stands for lifecycle assessment. LCA is a method to quantitatively
evaluate the resources used to produce a product at each stage of its
lifecycle—from raw material procurement, manufacturing, distribution anduse to disposal— as well as its load on the environment, and also thepotential environmental impact that the product and resources may have on
the Earth and ecosystems.

Periodically cleaning areas near factories and improving
environmental conditions there by weeding out grass
Checking sustainability when biological resources are usedas product material
Promoting development of products with recycled material
and building a recycling system to manufacture suchproducts
Incorporating activities for biodiversity preservation into an
environmental management system
Promoting new measures that are possible at each factoryfor preservation of biodiversity2）Activities to seek suppliers’ cooperation in reducing impact
on biodiversity across the entire supply chain
Seeking cooperation from suppliers in observing green
purchase guidelines to promote our efforts to preserve
biodiversity
3) Social contribution activities
Supporting groups engaging in forestry preservation
activities
Supporting green charity activities
Activity Results
Each factory has been implementing activities, taking advantageof the regional characteristics.
Factory

Activity

Nara Factory of Suminoe
Textile Co., Ltd.

Participating in the Ando Ouyu-Kai, anassociation that works to develop a cherrytree-lined promenade in the area along
the Okazaki River

Shiga Factory of Suminoe
Techno Co., Ltd.

Propagating the Sasayuri lily on thefactory premises

Factory at the head officeof Owari Seisen Co., Ltd.

Helping protect fireflies as a supporting
member of the Ichinomiya Heisei Firefly
Association

SUMINOE GROUP Integrated Report 2023

46

ESG Initiatives in Line with the Medium- to Long-term Management Targets

S

SocialHuman Capital
Human resources strategies to create an ideal organization
SUMINOE GROUP Philosophy (VISION, MISSION, SPIRIT, VALUE）
Basic guidelines for business activities
SUMINOE “4C” Values

Human resources policy

Ideal employee profile*

Autonomy

Review of the personnel system
Optimal assignment of personnel
and human resources activation

Basic Policy on Sustainability and Related Policies

Challenging spirit

Co-creation

Human resources
cultivation and evaluation

Communication
Synergy effects and innovation

Job satisfaction, motivation

人材最適配置、
人材活性化

やりがい、
モチベーション

シナジー効果、イノベーション

Implementing skill improvement training
To promote personal growth of all SUMINOE GROUP
employees, we implement education and training programs
throughout the Group. We provide not only level-based androle-based training but also skill improvement training on
various themes for voluntary participants. The themes selected
for this fiscal year were as follows: “Effective use of Excel andPowerPoint for work efficiency enhancement,” which was
designed to improve work efficiency in day-to-day tasks; “Nikkei
information utilization course” to learn about an efficient
information gathering method using the Nihon Keizai Shimbun
newspaper; and “Leadership improvement to gain more
influence” for middle-level employees. Going forward, we willoffer various themes to improve the skills of employees.

* ●…Implemented in FY2023, ○…To be implemented in FY2024 and onward

47

Category

Details

Theme

Initiatives*

Group Philosophy

Behavioral changes of officers
and employees

Understanding andpenetration of the Group
Philosophy○ Implement training on Group Philosophy.
○ Incorporate the Philosophy into the MISSIONof segments, departments, and individual
employees.

Review of
personnel system

Human resources visualization,
optimal arrangement of personnel,
and human resources activation
Development of a challenging spirit
Realization of diverse working styles

Diversification of working
styles● Regulations on work from home andstaggered work hours systems〇 Career self-declaration system (p. 48)〇 Limited area employee system

Cultivation andevaluation ofhuman resources

Improvement of individual
employees’ skills
Strengthening of leadership capabilities
Cultivation of global human resources
Creation of job satisfaction andmotivation

Development of humanresources with professionaland creative personalities
Fair evaluation andtreatment● Skill Improvement Training (p. 48）● Language training○ Training for enhancing management capability○ Review of the evaluation system

Communication

Sharing of information,
know-how, and challenges
Reinforcement of inter-departmental
cooperation systems
Maximization of synergy effects
Preservation and succession of skills
and development of successors

Activation of “horizontal
relationships”
Information sharing
between officers andemployees● Tsunagu-wa-cation (p. 50)● Tsunagu-meeting (p. 50)● Management by Walking Around (p. 58）

Diversity andinclusion

Acceptance of diversity of humanresources
Respect for individuals and their
participation

Women’s career development
Participation and cultivationof diverse human resources● Promote women’s participation (p. 51)● Promote participation of senior employees

Health Management
Work-life balance

Improvement of employees’
well-being
Improvement of labor productivity

Mental and physicalhealth of employees● Measures against lifestyle-related diseases
and mental health problems● Establishment of contact points for healthcounseling services○ Working Style Reform Action Plan 2023 (p. 52)

SUMINOE GROUP Integrated Report 2023

Autonomy

Persons who can think by themselves and act
autonomously

Challenging Persons who can take on higher roles, without
fear of changing, from diverse perspectives
spiritCo-creation

Persons who can create new value in collaboration
with others, through many dialogues

Initiatives for career development of employees
Establishing the career self-declaration system
Suminoe Textiles Co., Ltd. launched the career self-declaration
system on June 1, 2023. Under this system, employees candeclare to the Company what kind of career path they wish to
pursue on a short- and long-term basis in the future (e.g., jobs
they wish to experience or dare to perform). The system isintended to cultivate autonomous human resources byencouraging employees to think about their future career andto proactively engage in their jobs and to provide employeeswith opportunities to better display their abilities, thereby
improving job satisfaction. Another purpose of the system is tohelp utilize human resources and revitalize the organization by
putting the right person in the right job and by reducing
voluntary turnover due to mismatched assignment. We willcontinue to carry out initiatives for human capital maximization.

Level-based

Role-based

Selective

Collective training
Managers

Mid-career
employees

Management
training
Supervisor
training
Leader training
Training for thirdyear employees

Skillimprovement
training(theme-based)

Selective(for selfdevelopment)

Language training

Ideal employee profile for Suminoe Textile Co., Ltd.

Education system

Correspondence course

Initiatives to realize an ideal organization

Reviewing the ideal employee profile
The SUMINOE GROUP considers human resources to be thesource of sustainable corporate growth and the most important
assets. In this age of uncertainties, it is difficult to predict what
will happen in the future. In this context, Suminoe Textile Co.,
Ltd. strives to achieve sustainable growth of employees and theCompany. As part of its efforts to activate and cultivate humanresources, the Company reviewed the ideal employee profile for
Suminoe Textile. From the fiscal year ended May 2022 to thefiscal year ended May 2023, we conducted interviews with the
President and officers and questionnaire surveys of department
managers. Based on the results of these interviews and surveys,
the Company defined “autonomy,” “challenging spirit” and“co-creation” as the elements of the profile.
Going forward, we will improve our education system andtraining programs with a central focus on “autonomy,”“challenging spirit” and “co-creation” so as to enable individual
employees to improve and exhibit their capabilities. In doing so,
we will nurture human resources who can help us to achieve theMedium- to Long-term Management Targets and appropriately
adapt to future times. We will also place emphasis on educationof managers, who play vital roles in making maximum use of our“people” and “organization.”

OJT instructor training* To be deployed from Suminoe Textile Co., Ltd. to Group companies

Improving skills of employees

Evaluator training

Ideal organization

Review of the ideal employee profile

Young
Training for secondemployees year employees
Training for
new employees

Number of employees taking training

FY2023Training type

Total

Male

FemaleLevel-based, role-based, skill
improvement collective training

312

213

99

Correspondence course,
language training

130

84

46

Measures against harassment
Implementing harassment prevention training
The Group provides training aimed at creating a comfortable
work environment and eliminating harassment. This fiscal year,
moral harassment was selected as the training theme.
Approximately 70% of 1,017 employees working for five Group
companies took part in the training. What is most important for
a company to prevent harassment is to create such a corporate
culture. Based on this idea, the Group will continuously conductanti-harassment training.

SUMINOE GROUP Integrated Report 2023

48

ESG Initiatives in Line with the Medium- to Long-term Management Targets

S

SocialOmnidirectional Communication
The Group has set “omnidirectional communication” as one ofits Medium- to Long-term Management Targets. To achieve thistarget, we plan to disseminate the Group Philosophy andmanagement policy and implement activities to promote
communication between departments.

Based on these strengths and value that the Group offers, we
logo and tagline, looking ahead to the future.
Through about one-year of branding activities, all Group
officers and employees had opportunities to reconsider whatkind of value the Group should provide to society.
By sharing the Group Philosophy with stakeholders andearning their empathy, we aim to enhance our brand value,“Shin Mirai Project” for promoting branding
In July 2022, we launched the Shin Mirai (lit. new future) Project,which will lead to new growth of the Group. To this end, we willcontinue Group-wide efforts to penetrate the SUMINOE GROUP
brand.

which aims to newly formulate the Group Philosophy (VISION,MISSION and VALUE) as the guidelines for
all the SUMINOE GROUP members to

Topicsfollow in conducting business with a senseof unity and oneness, toward enhancing
theGroup’s

medium-to

Unified Group logo

long-term

corporate value.

Project activities

Item implemented

PurposeQuestionnaire surveys of
all Group employees

Identify the Group’s strengths,
weaknesses and unique features

Interviews with the
President and officers

History, strengths, current
challenges, and future outlook

Workshop

Value creation and theconcept of VISION

Meaning of the seahorse markThe new logo was designed based on the previous logo of
Suminoe Textile Co., Ltd. It symbolizes a seahorse proudly
going forward into the future while cherishing tradition.
The four diamonds represent a sparking ocean while
indicating the Group’s “four businesses,” which create
spaces as well as rays of light spreading into the four
quarters of the globe.

Through the project activities, we re-defined the SUMINOEGROUP’s strengths and the value offered by the Group as

Taglinefollows:“Bring innovation to all kinds of spaces”

Strengths of the SUMINOE GROUP
Technology and development capabilities to create newvalue with our foresight

Tsunagu-wa-cation

Tsunagu-meeting

To maximalize synergies of the SUMINOE GROUP
In order to develop our one-of-a-kind technologies andproducts and eventually create social and economic value, we
believe that it is essential to maximize synergies of the entire
SUMINOE GROUP by sharing and coordinating technologies andideas between and among different business segments andGroup companies. This requires us to change the organizational
structure from a conventional “vertical” structure to a structure
focusing on “horizontal relationships.” To this end, we arepromoting initiatives to facilitate “communication between
departments.”
In the fiscal year ended May 2023, we held
“Tsunagu-wa-cation” events respectively for design staff andsales staff in order to promote exchange between Group
companies. As for the “Tsunagu-wa-cation” events for design
staff, around 40 designers participated from each businesssegment, with the objective of gaining inspiration for better
designs and manufacturing practice. These participating
designers exchanged information on their respective businessenvironments and results. They also received input on the latest
trends in overseas interiors through a special seminar, which
inspired them to come up with new design ideas. For sales staff
events, about 30 young employees in their 20s and 30s
participated from the Kanto and Kansai districts. They exchanged
information regarding products handled by each department,
sales methods, customers and the industry. The event provided
participants with an opportunity to deepen their understandingof the SUMINOE GROUP on the theme of “Sales” and consider
sales activities, taking into account cooperation within their own
departments as well as cooperation with other departments.
We are planning to hold “Tsunagu-wa-cation” events forother various departments and job categories, with the aim of
maximizing the SUMINOE GROUP’s synergies.

Two-way communication between officers and employees
As part of its efforts to promote omnidirectional communication,
Suminoe Textile Co., Ltd. held roundtable meetings at which the
President and officers of the Administration Headquarters talked
with employees grouped by age bracket. These meetings, called“Tsunagu-meetings,” are intended to connect (Tsunagu inJapanese) top management and employees through directconversations to exchange thoughts and feelings to ensure that
the SUMINOE GROUP will continue to develop into a better
enterprise in the business environment that is changing rapidly
and significantly.
At these meetings, each age group of employees actively
exchanged opinions with top management. In many cases, theytalked about human resources-related topics, such as domestic
and overseas human resources development, management bymanagers, and an ideal personnel evaluation system that
improves employee motivation. Other various opinions were also
advanced, including the sharing of the Company’s vision,development of new products and technologies, planning ofGroup-wide strategies, and maximization of synergies throughcross-departmental communication. About the advantages anddrawbacks of the Group, top management and employees
engaged in frank exchanges of views face-to-face, and thecontents of conservations were disclosed to and shared with
employees of other age brackets so that all employees were able
to have common recognition.
Going forward, we will summarize the issues identified
through these meetings and discuss measures to address theseissues in order to help create workplaces for employee happinessand build a foundation for growth of the SUMINOE GROUP.

* Definition of the Group’s “Wa-cation”: A means of creating new value byenhancing synergies through communication in an environment that is different
from usual. The Group coined this word by combining the Japanese word “Wa (lit.
a circle),” “work,” and “communication.”

President and officers of the Administration Headquarters
It was significantly meaningful to be able to hear candid
opinions and views from so many employees of each age
bracket. We realized that young employees hoped to work forthe betterment of the Company and for their personal growth.
We also felt that employees in higher age groups were more
knowledgeable about the Company’s advantages anddrawbacks. By seriously considering the views and ways ofthinking of employees in each age group, we will reflect the
input from employees in discussing future measures to be taken.

formulated the Group Philosophy as well as the unified Group

This tagline expresses our determination to advanceforward to accomplish the Group’s mission of bringing
people- and society-friendly spaces to the world throughtechnology and ideas that closely support people’s lives.

Trust established over 140 years of history and track record
A sense of mission to create people- and earth-friendly
lifestyles, starting from interior spaces around us
Value offered by the SUMINOE GROUP
Produce a virtuous cycle of co-creation by co-creating “social
value” with customers and consumers and continuing tomeet social needs.
Create new value through unconventional technologies andproducts by generating interdepartmental synergies, andsupport society by “functional and comfortable space itself.”
Create new value in the field of space creation, taking
advantage of the Group’s unique strengths— technologies,
expertise, trust and relationships with customers—that it has
cultivated, and consequently improve people’s quality of living.

49

SUMINOE GROUP Integrated Report 2023

Tsunagu-wa-cation (exchange event for design staff)
Employees working on the project

Impressions after participating in the
Tsunagu-meetings

Employees
Despite a few opportunities for communication, theTsunagu-meetings allowed us to directly exchange opinionswith officers and talk about what we had in mind. It was a
precious moment for us. We were also able to fully understand
top management’s way of thinking and the Company’s future
direction. We hope that there will be many more opportunities
for this kind of communication in the future.

SUMINOE GROUP Integrated Report 2023

50

ESG Initiatives in Line with the Medium- to Long-term Management Targets

S

SocialDiversity and Inclusion
In keeping with the Basic Policy on Diversity and Inclusion
formulated in June 2022, we carry out initiative to facilitate theacceptance of diversity of human resources and foster respect
for individuals and their participation.

Promoting women’s participation
SUMINOE GROUP’s activities to promote women’s participation
To promote women’s participation, the Group takes a two-axis
approach—encouraging female employees to develop their career(training and appointment) and supporting them in continuing towork (work-life balance). We strive to create a work environment
where both male and female employees can play active roles.

Results of women’s empowerment initiatives
As of the end of May each year

(Group companies in Japan)

Item
Number of new
graduates hired

MaleFemaleRatio of female managers (%)*1
Male-female wage
disparities (%)*2

2022

2023

17

21

19

20

5.3

5.1

All employees

73.0

Regular employees

75.8Part-time employees

68.5

As part of our initiatives to promote women’s participation, theCompany annually dispatches two female managers and two
female manager candidates to participate in women’s empowerment support programs held by an external organization. We
believe that the forum will provide these female employees witha great opportunity to acquire knowledge and skills required towork as managers and heighten their motivation for careerdevelopment. It will also be a good occasion where they cangather information and think about their future visions while
being exposed to more diverse views through exchange withpeers outside the Company. We will implement initiatives tosupport female employees in continuing to enjoy their work.

Health Management
Health management of Suminoe Textile Co., Ltd.
Suminoe Textile Co., Ltd. promotes health management based on
the concept of the Group’s Health Management Declaration.
Going forward, we will conduct Group-wide initiatives tostrengthen health promotion activities and systems for
management and evaluation, along with measures for work-lifebalance.

Health promotion system of Suminoe Textile Co., Ltd.

*1 Percentage of female employees whose positions correspond to section
chief or higher at the Group companies in Japan*2 Data for Suminoe Textile Co., Ltd. only

Health management CEO(President)

Suminoe Textile Co., Ltd. and five Group companies in Japan
analyzed the issues of respective companies. Reflecting theanalysis results, each company established its action plan based on
the Act on Promotion of Women’s Participation and Advancementin the Workplace. The activities and targets specified under theseaction plans are disclosed to the public.*

General Manager of Administration Headquarters* Published in: Database on Promotion of Women’s Participation and Advancementin the Workplace, run by the Ministry of Health, Labour and Welfare

Japan Health
Insurance
Association
External
contact point
for consultation

Departments incharge of promotion
Administration
department ofeach site

Suminoe Textile
Co., Ltd.

Targets

Ratio of employees taking Male: 25 or higher
childcare leave by sex (%)
Female: 100
Increase in No. of female
Increase one
managers
or moreRUNON CO., LTD.
Monthly average overtime
Within 40
hours (h)Results
45
16.7
100

0
8.9

Owari SeisenCo., Ltd.

51

Monthly average overtime
hours (h)SUMINOE GROUP Integrated Report 2023

Within 20

1.4

Target0

2. Use rate of annual paid leave (%)

70

3. Rate of male employees taking
childcare leave (%)

100

Item

Descriptions

Activities in FY2023

Promotion of awork-life balance

Held a life design seminar (on basics of caregiving).
Established regulations on working from homeand staggered working hours system.

Measures against
lifestyle-relateddiseases, etc.

Measures against
mental healthproblems
Raising healthimprovementawareness

Helped employees with expenses for cancer
examinations and complete physical checkups.
Helped employees with flu vaccination expenses.
Recommended seeing a doctor to employees who
were designated by Company doctors, fromamong those required to take a re-check or further
investigation as a result of health checkups.
Implemented stress checkups.
Held medical interviews between employees andCompany doctors.
Provided health counseling by Company doctors(every month).
Held health seminars and distributed videos on
health topics.
Set up points of contact for consultation.

Use rate of annual paid
leave (%)

As of May 31 each year

2022

2023

60.4

59.9

Number of employees who used childcare/family care supporting systems(Group companies in Japan)

As of May 31 each year

Item/sex
Number of employees who
took childcare leave
Number of employees who returned
to work after childcare leave
Number of employees who
took family care leave
Number of employees who
worked from home
Number of employees who
took childcare leave
Number of employees who
worked from home
Number of employees who
reduced working hours

Male
FemaleMale
FemaleMale
FemaleMale
FemaleMale
FemaleMale
FemaleMale
Female

2022

2023

1
13
1
9
0
18

2
13
2
12
0
22
33
21
0
0
0
0
4
1

0
0
0
0

We encourage employees to take childcare leave, as part of ourefforts to develop a corporate culture that embraces diversity andto promote work-life balance aimed at making employees’ workand life fulfilling. Suminoe Textile Co., Ltd. added a provision that
“Of the period of childcare leave, employees shall be regarded ashaving been at work up to 14 working days before returning towork,” effective since June 2023. The Action Plan sets 100% as theGroupwide target for the rate of employees taking childcare leave.
We will apply the provision to Group companies and promote
coordination across the Group, toward attaining this target.

Developing a Safe and Secure Work Environment
Progress in the occupational health and safety initiatives anddeliberation on the causes of occupational accidents andpreventive measures
The Group’s Central Health and Safety Subcommittee holds
meetings three times a year, bringing together persons in charge ofpromoting occupational health and safety at Group companies, toexchange views about prevention of occupational accidents andreport on the activities of each company. In fiscal year ended May
2023, the rate of lost-worktime injuries was 1.39.
In December 2020, an occupational fatal accident occurred at
the Shiga Factory of Suminoe Techno Co. Taking the accident
seriously, we are making Group-wide efforts to promote
occupational health and safety activities.

Activities to prevent occupational accidents at
Suminoe Techno Co., Ltd.

Use of paid leave

Family careleave, etc.

1 year andGender difference in length
Within 2 years 1 monthof continuous service
Suminoe Logistics Ratio of female managers
30 or higher
30.8(%)
Co., Ltd.
Suminoe TechnoCo., Ltd.

Indicator
1. Number of employees who
worked 70 hours overtime amonth(in Group companies in Japan)

Activities implemented by Suminoe Textile Co., Ltd.

55.6
16.7
100

Company
doctors

SUMINOE GROUP working style reform action plan 2023
Period: From June 1 2023 to May 31 2024

Childcare leave, etc.

SUMINOE
Co., Ltd.

Item

Ratio of new female
35 or higher
graduates hired (%)
Ratio of employees taking Male: 25 or higher
childcare leave by sex (%)
Female: 100
Ratio of new female
40 or higher
graduates hired (%)

Personnel
Department

Encouraging male employees to take childcare leave

Formulating the “Working Style Reform Action Plan 2023”
To enable employees to continue to display their best
performance and produce positive results, employee well-being(a state of complete physical, mental and social well-being) is
indispensable. It is therefore absolutely vital to identify factorsthat may negatively affect employee well-being and take
improvement measures. These measures are also importantfrom the perspective of human capital utilization.
In June 2022, the Group formulated the Heath
Management Declaration and the Basic Policy on Work-Life
Balance. As specific initiatives to follow these guidelines, weestablished the Working Style Reform Action Plan 2023
(hereinafter “Action Plan”) dated June 1, 2023, for all the 17
SUMINOE GROUP companies in Japan.
In the future, we will check and evaluate the progress inour efforts toward the Action Plan to implement the PDCA
(plan-do-check-act) process, through which we can improve andcontinue measures. In so doing, the Group will seek to realize
heath management, promote work-life balance, and enhance
its corporate value.

Employees

Numerical targets set in action plans based on the Act on Promotion of Women’sParticipation and Advancement in the Workplace, and activity results FY2023 results

Company

Health and
SafetyCommittee

Work-Life Balance

As part of its activities to prevent occupational accidents, Suminoe
Techno Co., Ltd. conducts hands-on safety training in which
employees experience firsthand the danger of equipment andmachinery. In FY2023, the company held training at the Nara
Factory, using a simulation system that provided employees with arealistic feeling of being caught or pulled into a machine. Many
employees have the opinion that realizing the danger of
equipment firsthand is effective in raising safety awareness ofoperators. For this reason, Suminoe Techno will continue to
conduct such hands-on training with different contents at the Naraor Shiga Factory alternately every year.

Change in the incident rate* of Group companies in Japan
Incident rate
8
6

5.99
4.98

4.52

4
2
0

All Group companies in Japan(Lost-worktime injuries &non-lost worktime injuries)

3.40

3.50

2.00
1.33
1.20

1.20

2018

2019

1.39

Average for the industry(Lost-worktime injuries)
All Group companies in Japan(Lost-worktime injuries)

1.21

1.31

1.02
2020

0.70 1.25
2021
2022 (Fiscal year)

Source: 2022 Workplace Accident Trend Survey, Ministry of Health,Labour and Welfare* Incident rate: Accident frequency, measured as the number of deaths
and injuries caused by industrial accidents per million working hours

SUMINOE GROUP Integrated Report 2023

52

ESG Initiatives in Line with the Medium- to Long-term Management Targets

G

Governance
Board of Corporate Auditors (No. of meetings held in FY2023: 9)
The Board of Corporate Auditors consists of three auditors(including two outside auditors). The Board decides auditing
policies and plans and deliberates on audit reports.

Enhancing Governance
Basic approach
The SUMINOE GROUP believes that the objective of corporate
governance is to secure the soundness and efficiency ofmanagement. In doing so, the Group stives to enhance its
corporate value to continuously return profits to stakeholders.
To secure the soundness and efficiency of management,
we have been appointing outside directors and strengthening
the function of the corporate auditor system. The Board of
Directors functions as a body for making management decisions
in a speedy and agile manner and for overseeing the status ofbusiness execution. The Company has also introduced an
operating officer system, under which operating officers areheld responsible for business execution. In terms of risk
management, we have formulated the Code of Conduct and theStandards of Conduct. By appropriately operating these codes,
we aim to be a company trusted in society.

Governance system
Board of Directors (No. of meetings held in FY2023: 9)
The Board of Directors comprises nine directors (including four
outside directors) and supervises business execution and makes
decisions on important matters.

Nomination and Remuneration Committee (No. of meetings
held in FY2023: 1)
The Nomination and Remuneration Committee is set up as anadvisory body to the Board of Directors. The Committee aims tostrengthen its oversight function by improving transparency andobjectivity in the evaluation and determination processes
concerning the nomination and remuneration of the membersof the Board of Directors, thereby further enhancing thecorporate governance system.
The Committee membership comprises five directors
selected by a resolution of Representative Directors, independent
outside directors and the Board of Directors. The majority of themembership should be outside executives, including
independent outside directors.
Executive Committee/CSR & Internal Control Council
A meeting of the Executive Committee is held every week, inprinciple, to report and deliberate on important management
matters. Matters of particular importance will be reported to theBoard of Directors. CSR-related important matters and evaluationof internal controls concerning financial reports are discussed at a
meeting of the CSR & Internal Control Council. The meeting is
attended by one full-time corporate auditor as an observer.

attendance of independent outside directors.
In July 2019, we set up the Nomination and Remuneration
Committee, which has been functioning as an advisory body to theBoard of Directors.
The Company’s Board of Directors consists of inside Directors who
are well versed in respective business and corporate activities andhave a wide variety of knowledge and experiences and Outside
Directors who are expected to provide advice and monitoring froma broad perspective. As for the selection of Directors, from among
candidates, the Company selects personnel who meet the samerequirements as above, while taking into account the appropriatebalance of the board as a whole, in accordance with the revised
Corporate Governance Code. The Company appointed a female
certified public accountant as an Outside Director in August 2021
and a female executive officer of a different company as an Outside
Director in August 2023. These appointments enabled theCompany to secure diversity, accounting literacy and global
perspectives. We believe that the Company’s Board of Directors
achieves appropriate diversity and a proper balance of knowledge,
experience and skills, making effective use of expertise possessedby respective board members.

Board of Operating Officers (No. of meetings held in
FY2023: 12)
The Board of Operating Officers comprises the President andoperating officers of Suminoe Textile Co., Ltd. and holds its
meetings once a month. At the monthly meeting, the decisions
made by meetings of the Board of Directors or the Executive
Committee are announced, and reports are made on thepresent status of business execution by each operating officer.

Policies and procedures for selecting officers
The Board of Director has not established specific procedures forselection of a CEO.
A CEO candidate is chosen from personnel who are able tocontrol overall management and business operation based on theGroup Philosophy and who have abundant experience andachievements required for contributing to the Group’s sustainablegrowth and to improvement in its corporate value. Such personnel
also must have a high level of ability, broad insights and a superior
personality. The successful candidate will be selected by resolution
after due deliberation at a meeting of the Board of Directors, with

Skill Matrix
Position

Name

Age Sex

TermofSpecialization and experience
Legal
GeneralSales and
Produc- FinanceOverseas
Sustainmanagemarkettion tech- and ac- Risk manbusinessabilityment
ing
nology counting agement

President

Teppei Nagata

66

Male 6 years●

Managing
Director

Hiroaki Usugi

59

Male 3 years●

Managing
Director

ToshiroMaruyama

65

Male 2 years●

Director

Eiichiro Kimura

64

Male 2 years●

Director

Norihisa Murase

62

Male

1 year●Outside Director

Haruo Shimizu

76

Male 7 years●

Outside Director

Kohei Nomura

75

Male 5 years

Outside Director

Yumiko Oida

56

Female2 year(whose tasks include personal
information management)

Outside Director

Yuko Shibuya

54

Female―Central Health and Safety Subcommittee

Full-time
Corporate Auditor

Kiyokazu
Ichikawa

64

Male 3 years

Outside Corporate
Atsuhiro Sonoda
Auditor58

Male 4 years

Outside Corporate
Auditor61

Male 3 years

Corporate Governance and CSR Promotion System

●

●

●

●

●

IT
Digital

●

●

●

●

General meeting of shareholders
Selection/dismissal Selection/dismissal

3 auditors(including 2 outside auditors)

Board of Directors
9 directors

Audit(including 4 outside
directors)

Nomination andRemuneration Committee

Directors

Board ofCorporate Auditors

Selection/dismissalnSelection/dismissal and supervision
tio
era

●

●

●

●

●

●

●

●

●

CSR Promotion System

Co

Cooperation

Audit

ion
rat

Direction andsupervision

Audit

Respective
departments, Head
Office, and Group
companies

CSR & Internal
Control Council
Officer in chargeof complianceCorporate
Ethics Hotline
Consultation
services for overseas
subsidiaries

Compliance & Risk
Management Subcommittee

Personnel (Development and Health) Subcommittee
Environmental Promotion Subcommittee
Product Liability (PL) Subcommittee
Financial Control Committee

Corporate Auditors

Board of
Operating Officers

eopInternal Auditing
Department

CSR Promotion Committee

Representative Directors
Executive Committee

Co

Accounting auditor

op●

Takafumi
Katayama

●

●

●

●

●

●

●

●

●

●

●

●

●

●

* The above is not intended as a complete list of knowledge and experience held by members of the Board of Directors and the Board of Corporate Auditors.
* As of the conclusion of the general meeting of shareholders held in 2023.

53

SUMINOE GROUP Integrated Report 2023

SUMINOE GROUP Integrated Report 2023

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ESG Initiatives in Line with the Medium- to Long-term Management Targets

G

GovernanceEvaluation of the effectiveness of the Board of Directors
Results of third-party analysis and matters requiring improvement
The Group analyzed and evaluated the effectiveness of theBoard of Directors, using the following processes, with thecooperation of a third-party organ.
① Prepare a “questionnaire survey regarding theeffectiveness of the Board of Directors,” in light of thepresent conditions of the Group.
② Collect responses to the questionnaire survey from all
directors and corporate auditors.
③ Compile and analyze responses to the survey and create a“report on the survey results regarding the effectivenessof the Board of Directors.”④ Share the report with the Board of Directors, etc.
⑤ Conduct self-evaluation of the Board of Directors andformulate a policy for addressing the identified issues.
⑥ Share the evaluation results and an outline of the policy
among the Board of Directors’ members.
Below are the contents of the “questionnaire survey regarding
the effectiveness of the Board of Directors.”

Closed-ended (multiple-choice) questions① Roles and functions of the Board of Directors② Structure and size of the Board of Directors③ Operation of the Board of Directors④ Coordination with the auditing organs⑤ Relationships with outside directors⑥ Relationships with shareholders and investors⑦ Summing-up

Closed-ended (free form) questions① The Group’s characteristics, strengths and weaknesses andthe reason for the answer (structure, operating methods,
experience, coordination, etc.)

Training for officers
Providing opportunities to acquire and update knowledge
Various training opportunities are offered for directors andcorporate auditors to encourage their self-improvement and help
them acquire and update knowledge necessary for their respective
duties and operations. And directors and corporate auditors havebeen actively participating in such training programs (p. 59).
To address issues pointed out through the aforementioned
evaluation of the Board of Directors, we strive to augment
opportunities for outside directors to better understand the Group.
Specifically, to help them deepen their understanding of the
management strategies and business nature/conditions of theGroup, explanations are provided upon their appointment, andalso opportunities to visit factories/offices and explanations by
responsible directors are provided subsequently as necessary. In
November 2022, outside directors visited the Nara Factory, of
which reorganization was completed in the same year (p. 58). We
plan to utilize such factory/office tours as venues for exchanging
views as to human resources development, sustainability and othermedium- and long-term issues, which had not been fully discussed
at meetings of the Board of Directors.

Status of attendance at Board of Directors’ meetings
As of May 31, 2023

Title

Name

Attendance atboard meetings

President

Teppei Nagata

100% (9/9 times)

Managing Director

Hiroaki Usugi

100% (9/9 times)

Managing Director

Toshiro Maruyama

100% (9/9 times)④ Other opinions and recommendations regarding improving
the Board of Directors’ functions, governance, etc.

Director

Eiichiro Kimura

100% (9/9 times)

Director

Norihisa Murase*1

100% (7/7 times)

The survey results showed that the Board of Directors had abalanced structure and that lively discussions were held at theBoard of Directors’ meetings. Accordingly, we conclude that theeffectiveness of the Board of Directors has been ensured.
On the other hand, the following matters were identified
as the issues to be addressed in the future.

Outside Director

Haruo Shimizu

100% (9/9 times)

Outside Director

Kohei Nomura

100% (9/9 times)

Outside Director

Yumiko Oida

100% (9/9 times)

Outside Director

Yuko Shibuya*2-

Corporate Auditor

Kiyokazu Ichikawa

100% (9/9 times)

Outside Corporate Auditor

Atsuhiro Sonoda

100% (9/9 times)

Outside Corporate Auditor

Takafumi Katayama

100% (9/9 times)② Matters that you think the Board of Directors should
improve or focus on in the future③ Matters that you feel you might have further contributed to
the Board of Directors① Enhance discussions on management strategies from a
medium- and long-term perspective.
② Augment opportunities for outside directors to deepen theirunderstanding of the Company.
③ Enhance reports about the internal control and risk

55

management systems.
In addition, outside directors recommended strengthening
dialogue with shareholders and markets. They also suggested
that additional venues for discussions with outside directors becreated, for example, by holding a reporting session for them.
Any of these issues will be addressed to improve operations of
the Board of Directors in the future. We will also continuously
evaluate the effectiveness of the Board of Directors in order tofurther enhance its functions.

SUMINOE GROUP Integrated Report 2023

*1 Appointed August 2022
*2 Appointed August 2023

Auditing status
Audits by the Board of Corporate Auditors
The Board of Corporate Auditors always seeks to coordinate
with related departments and units in order to further enhancethe effectiveness of audits conducted by the Board of Corporate
Auditors.
The full-time Corporate Auditor reports to outside
corporate auditors on the results of meetings of the Executive
Committee and the Board of Operating Officers, as well asinternal audits, to ensure close information-sharing with outside
corporate auditors.
As for coordination between members of the Board of
Corporate Auditors and the Internal Auditing Department,
corporate auditors hear the auditing status from the Internal
Auditing Department and then follow up on and verify the audit
findings. Also, the Internal Auditing Department members arepresent at business audits by the corporate auditors whennecessary.
As for coordination between members of the Board of
Corporate Auditors and the accounting auditor, the accounting
auditor provides explanations about audit plans to corporate
auditors at the beginning of the fiscal year and holds regularmeetings as to the implementation status of accounting audits
during the fiscal year. As the need arises, a meeting is held withthe attendance of members of the Internal Auditing
Department and the CSR Promotion Department to shareauditing issues mainly regarding internal audit evaluations andto strengthen coordination among participating units. Also,
members of the Board of Corporate Auditors and theaccounting auditor work in close coordination by timely
exchanging information on the accounting processes andopinions regarding audit dates. In addition, corporate auditors
attend the audits performed by the accounting auditor during
and at the end of the fiscal year.
Status of internal auditing
The Internal Auditing Department comprises three members
and is under the direct control of the President, the Executive
Committee, and the CSR & Internal Control Council. Based on
the Internal Audit Regulations and the Internal Audit
Guidelines, the Internal Auditing Department conducts audits toconfirm that the Company and its Group companies in Japanand overseas are performing their duties properly. The
Department also audits the development and operation statusof the systems and processes for internal controls, including theinternal control concerning financial reporting. In fiscal year
ended May 2023, the Department implemented on-site audits
for five consolidated subsidiaries in four countries—the UnitedStates, Mexico, Indonesia and Thailand.
As for internal controls concerning financial reporting, theCompany and 14 consolidated subsidiaries were evaluated fortheir company-wide internal controls, and five consolidated
companies were evaluated for their internal controls of work

processes. The results of these internal audits are reported not
only to the Company’s President and the Executive Committee
but also to corporate auditors, the accounting auditor and the
Financial Control Committee. By raising questions and making
improvement proposals, the Internal Auditing Department
seeks to improve the internal control system. Moreover, theDepartment strives to reinforce mutual coordination with theBoard of Corporate Auditors by such means as holding a liaison
meeting whenever necessary.

Status of attendance at Board of
Corporate Auditors’ meetings

Title

Name

As of May 31, 2023

Attendance atBoard of Corporate
Auditors’ meetings

Full-time Corporate Auditor Kiyokazu Ichikawa

100% (9/9 times)

Outside Corporate Auditor

Atsuhiro Sonoda

100% (9/9 times)

Outside Corporate Auditor Takafumi Katayama

100% (9/9 times)

Supervision and audits by outside officers
Close coordination between the Internal Auditing
Department and the accounting auditor
From viewpoints based on their experience and expertise,outside directors and outside corporate auditors express theiropinions where necessary in order to ensure the validity andappropriateness of the decisions made by the Board of Directors
and to supervise business execution. Outside corporate auditors
proactively obtain information required for audits from aneutral standpoint and share the information with otherauditors so as to enhance the auditing environment.
Outside directors and outside corporate auditors maintainclose coordination with the Internal Auditing Department
members and the accounting auditor. They require theDepartment and the accounting auditor to submit reports asneeded in order to improve supervision and auditing efficiency.
If an inadequacy or deficiency is identified through thesesupervision and auditing activities, the Internal Auditing
Department, which is in charge of internal controls, implements
measures to correct and supervise the inadequacy or deficiency
and evaluates the internal controls.

SUMINOE GROUP Integrated Report 2023

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G

Governance

Remuneration for officers
Matters regarding the policy for determining details of
remuneration, etc. of each director
The Company consults the Nomination and Remuneration
Committee and, based on the response from the Committee,
resolves the policy to determine details of remuneration, etc. foreach director as follows:① Policy for determining the amount of the base salary, as
well as the details and the amount or quantity of
non-monetary remuneration, for each individual director
Remuneration, etc. for directors shall be in the amountappropriate in light of their respective duties and the generalstandard and consist of base salary and stock-based
remuneration. Base salary is paid as monthly fixed remunerationin the amount appropriate for each position within the range of
remuneration determined at a general meeting of shareholders.
The purpose of stock-based remuneration is to provide an
incentive for directors to work toward sustainable improvementof the Company’s corporate value and also to promote their
sharing of value with shareholders. In view of this purpose, theamount deemed appropriate within the range of remuneration
determined at the general meeting of shareholders is paid to
directors, excluding outside directors, at a fixed time each year
as remuneration for provision of restricted stock, of which
disposal is not allowed until the directors resign or retire fromthe position of director, etc. of the Company.
② Matters regarding determining details of remuneration,etc. of each director
Based on the above policy, allocation of remuneration for eachindividual and other matters are discussed by the Nomination
and Remuneration Committee, which is an advisory organ of theBoard of Directors established as necessary for the purpose ofenhancing objectivity and transparency in the procedures
related to the appointment of directors and the determinationof their remunerations and consists mainly of independent
outside directors. Based on the report from the Committee,
these matters are discussed and resolved at a meeting of theBoard of Directors in which outside directors and outside
corporate auditors are present.
Matters regarding the policy for determining the amounts
and the calculation method of remuneration, etc. ofcorporate auditors
Remuneration of corporate auditors is determined throughconsultation with the corporate auditors within the range of
remuneration determined at a general meeting of shareholders.

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SUMINOE GROUP Integrated Report 2023

Total amount of remuneration, etc. for each officer
category, total amount of remuneration, etc. by type, andnumber of eligible officers
Officer category

Director*1

Corporate
Auditor*2

Outsideofficer

Total amount of remuneration,etc. (Millions of yen)

144

15

23

Basic salary

134

15

23

-

-

-

9

-

-

6

1

6

PerformanceTotal amount of based
remuneration, remuneration,etc. by typeetc.
(Millions of yen)Non-monetary
remuneration,etc.
Number of eligible officers*1 Excluding outside directors*2 Excluding outside corporate auditors

Policy for constructive dialogue with shareholders
Holding briefings for investors
To earn an appropriate evaluation from shareholders and otherstakeholders, the Group strives to realize constructive dialogue
with shareholders within the scope and by the means deemed
to be appropriate by the Group, and it provides opportunities todeepen their understanding of the Group’s management
strategies and business environments.
In addition to holding IR briefings for institutional investors
semiannually in Tokyo and Osaka, we visit major shareholders
around the time when financial results are announced to
explain about the financial results and our future initiatives andto hear opinions from these shareholders. For individual
investors, company briefings are held at irregular intervals.
As for the handling of the important facts that have notbeen published, our basic concept is that we should ensure theequality of shareholders. Under this concept, we comply with
the Financial Instruments and Exchange Act and other relevantlaws and regulations, and we conduct thorough information
management, based on the regulations for preventing insider
trading, which is our in-house regulations established to prevent
insider trading.

Cross-shareholding
Reasonable and appropriate holding
The Company implements cross-holding of shares for strategic
purposes, such as to maintain smooth transaction relationships
and strengthen stable and ongoing ties with financial
institutions, when it is deemed to contribute to improving theGroup’s corporate value.
Cross-shareholding cases are reported to the Board of
Directors every six months, where the purpose of cross-holding
is verified by examining such matters as whether the yielded
benefits meet the investment made, whether there are any risks,
and whether the shareholding is economically reasonable andappropriate, based on the status of relationship with the Groupand the governance condition of each partner. The cross-heldshares are sold whenever their purpose of holding disappears.
Regarding the exercise of voting rights, although nouniform standard has been established, we believe that proper
exercise of voting rights will lead to improved corporate value
and sustainable growth of the relevant companies in the medium
to long run. Based on this belief, in principle, we exercise ourvoting rights with regard to all the cross-holding shares bydetermining approval or disapproval of proposals in view of thesituation and business relationships of the relevant companies.
Incidentally, when a company holding shares of theCompany shows its intention to sell the shares, we basicallyagree to it.

Restructuring of the core systems
Restructuring of systems for management ofreceivables/payables and accounting
We have been working on the restructuring of its core systems
throughout the Group, which has been promoted in a top-downmanner since November 2018. To improve efficiency ofoperations while preventing misconduct, we have been
advancing restructuring of various systems so that ourbusinesses can be visualized.
Restructuring of the receivables/payables management
system and the accounting system was included in this initiative.
The purpose is to promote paperless operations through theelimination of forms and to integrate data on balance andparticulars of receivables and payables so that they can be easily
grasped. In October 2022, Suminoe Textile Co., Ltd. andSuminoe Teijin Techno Co., Ltd. introduced a new system. In
September 2023, the new system also came into full-scale
operation at SUMINOE Co., Ltd., RUNON CO., LTD., and Suminoe
Techno Co., Ltd.
Going forward, we will further expand the application ofthese systems throughout the Group. We will also work toenhance functions of these systems by promoting electronic
invoicing, introduction of a cloud service for expense settlement,
and reinforcement of administrative accounting. At the sametime, we will endeavor to prevent misconduct.

Interactive communication through“Management by Walking Around”
Interactive communication between top management andemployees to discuss worksite problems
The Group has been promoting “Management by Walking
Around” since the fiscal year ended May 2018, with the aim ofenabling information-sharing and interactive communication
between top management and employees. In the“management by walking around” approach, directors andoperating officers visit the Group’s offices and factories andexchange opinions with local employees.
In fiscal year ended May 2023, top management visited a
total of nine offices/factories, including the Shiga Factory of
Suminoe Techno Co., Ltd., Suminoe Textile Vietnam Co., Ltd.,and Seki Textile Co., Ltd, which joined the Group in July 2022. As
their worksite problems, local employees pointed out aging
equipment and facilities, aging employees, etc.
In November 2022, a meeting of the Board of Directors
was held at the Nara Factory, whose reorganization project wascompleted in the same year. All directors, including outside
directors, looked around the factory as well as the newly
constructed warehouse and Technology Development Centerbuildings, where they exchanged opinions with employees. An
outside director said: “It was a valuable opportunity to visit anoperation site, not through reference materials but in person. I
had a very meaningful time since I was able to deepen myunderstanding of the SUMINOE GROUP.” As exemplified by thiscomment, many positive opinions were expressed.
The “Management by Walking Around” initiative allows
top management to address problems with a greater sense ofownership through firsthand observation of the work
environment and direct communication with local employees.
We will continuously implement “Management by Walking
Around” in the future.

Top management during “Management by Walking Around”

SUMINOE GROUP Integrated Report 2023

58

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G

Governance

Ensuring Compliance
Basic Policy
Corporate activities in compliance with laws and corporate
ethicsThe Group has formulated its Code of Conduct and its Standardsof Conduct, both of which lay out the basic policy for
implementing compliance management.
In keeping with the basic policy, officers and employees of
the Group strive to ensure that their own ways of thinking andbehavior are always in compliance with laws and corporate
ethics.

Compliance measures
Creating a corporate culture to develop complianceawareness in daily operations
The Group carries out various measures to develop complianceawareness among employees.
For example, in December 2022, we revised theCompliance Guidance and distributed the revised Guidance toall Group employees in Japan. Its English and Chinese versions
were also prepared and distributed to overseas Group
companies.
The Group companies in Japan use the Guidance forcompliance-related lectures, which are continuously delivered
to employees when they enter the company and receive
level-based training. Also, at these companies, an employee
reads the Code of Conduct aloud at the morning assembly.

Compliance training

Initiatives for personal information protection
To notify all employees of the amended Act on the Protection of
Personal Information and to reduce the risk of leakage, we havepublished the Group’s rules concerning handling of personal
information in the Risk Management Manual and theCompliance Guidance so that all Group employees in Japan can
ascertain the rules to follow. At the same time, the Company
held briefings for several Group companies in Japan that handle
a large amount of personal information.
Subsequently, to confirm the management status of
personal information handled by each department and its risk
level, we distributed check sheets for personal information
protection to respective departments and collected thesesheets. If a collected check sheet revealed that the department
carries a high risk, we conducted an on-site inspection of thedepartment and urged it to take improvement measures.
The above initiatives are posted on the in-house intranet tocontinuously remind employees that they should take great carewhen handling personal information. We are also planning tohold a meeting to explain about personal information
protection to new employees, and we will continue to verify thestatus of personal information management in departmentswith a high risk.
Continuously implementing in-house study meetings
The Group has continuously been holding study meetings on laws
and regulations related to business operations to prevent
employees from mistakenly violating laws. This fiscal year, thesestudy meetings were held under the theme of “Subcontract Act”
and “Act against Unjustifiable Premiums and Misleading
Representations,” with the participation of 307 employees in total.

Risk Management
Risk management system
Reporting to the Executive Committee after deliberation by
the committees concerned
The Group has established the following risk management system.
The CSR Promotion Committee, which comprises members fromrespective business headquarters and departments, deliberates onmatters regarding overall risk management activities, such asproactive prevention and emergency response measures against
risks. The Committee then reports the deliberation results to the CSR& Internal Control Council (Executive Committee) to obtain approval.
In implementing internal control, we strive to identify risks,
mainly the risk of material misstatement in financial reports, basedon the risks reported from Suminoe Textile Co., Ltd. and its Group
companies in Japan and overseas. The Financial Control Committee
examines the risk assessment results, which are reported to the CSR& Internal Control Council. Under this system, we have reduced
risks to a certain level. We will henceforth promote theintroduction of information technology (IT) to improve the system
to mitigate each risk even further.

CSR & Internal Control Council(Executive Committee)
Deliberation
and reporting

Approval

CSR Promotion
Committee

Deliberation
and reporting

Approval

Financial Control
Committee

Whistleblowing system
Restructuring of the core systems

Training for officers and for executive employees
We have continuously implemented compliance training withexternal specialists invited as lecturers. In fiscal year ended May
2023, a training session was held for officers on the theme of“Human Rights Issues Associated with Business Activities andthe Responsibility of Management Executives” so thatparticipating officers could learn about the background ofincreased attention to human rights issues and how to copewith these issues. Another training session selected “Toward
Realization of DX—Roadmap and Final Targets” as its theme,
under which officers were lectured about what targets should
be set to promote digital transformation and what initiatives
should be undertaken in the future.
The Company also conducted training sessions for a totalof 49 executive employees who serve as directors of the Group
companies on the themes “How to Read Financial Statements”
and “Significance of Internal Control (Company-wide Internal
Control).”Going forward, we will implement compliance training onthemes selected for each business category.

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SUMINOE GROUP Integrated Report 2023

Establishing whistleblowing contact points
The Group has established the Corporate Ethics Hotline as acontact point through which officers and employees can submit
a report, should they find incidences of violation of laws andregulations or corporate ethics within their companies.
We added the contents of the system operation regulations
that were revised in 2022 to the Compliance Guidance (inJapanese), which was distributed to all Group employees in Japan.
Through in-house training sessions and by other means, wewill continue to ensure that all employees are notified of thesecontact points.

Consultation services used (number of consultations received)

Contact point for consultation

2022 2023

Corporate Ethics Hotline (in-house contact point)

10

Corporate Ethics Hotline (external contact point)

00Harassment consultation contact point (in-house contact point)

1

8

Harassment consultation contact point (external contact point)

3

9

Total

5

17

Application of the production management system to various
departments (in Japan)
We are working to gradually introduce a production management
system that is specifically tailored to the textile industry to various
departments in Japan. This fiscal year, we have completed defining
the requirements, aiming at starting full-scale operation of thesystem in the sales department of Suminoe Teijin Techno Co., Ltd.
The Group believes that this system will be instrumental inestablishing a structure that integrates production and sales
functions by visualizing three statuses: the order status from sales
to procurement; production status from procurement to sales; andthe inventory status. We will continue to promote the widespreaduse of this production management system, with a view to its
application across the Group.

Strengthening global risk management
Introduction of the production management system (overseas)
We have judged that IT controls are the most effective means forstrengthening internal controls at overseas Group companies. We

have therefore promoted the introduction of a production
management system focusing on inventory management, which
entails particularly large risks, into SPM Automotive Textile Co., Ltd.
Guangzhou in China and PT. Suminoe Surya Techno in Indonesia.
In fiscal year ended May 2023, after we had repeatedly madeadjustments while parallelly running the old and new systems, the
new system was finally brought into full-scale operation. We will
promote the introduction of the system to other Group companies
in the future.

Implementation status of Business Continuity
Plans (BCPs*)
Implementation of personal safety confirmation drills
In the event of a disaster, disseminating information to customers
speedily and accurately is key for us to maintain customer trust as acompany. Based on this idea, the Group has been working toestablish its business continuity plans (BCPs), focusing on collecting
information, such as that on employees’ personal safety anddamage caused by a disaster.
Suminoe Textile Co., Ltd. and SUMINOE Co., Ltd. have held anannual BCP-based emergency drill at their head office buildings. In
the drill, the personal safety of employees is confirmed inaccordance with the in-house emergency contact rules. On
September 1, 2023, these two companies carried out personalsafety confirmation drills, and the emergency headquarters wasable to swiftly confirm the safety of all employees.
Moreover, to ensure prompt response to emergencies atoverseas Group companies, the Crisis Response Manual on
Overseas Assignment, which is included in the Risk Management
Manual, was revised to provide clear and detailed descriptions of
the emergency contact routes and the duties to be performed byrespective persons in charge.
* BCP: Stands for “Business Continuity Plan,” a plan developed to ensurethat a company can continue and/or restore business operations in an
emergency, such as a disaster or an accident.

Intellectual property
Promoting awareness of intellectual property rights
Intellectual property rights include patents, utility model rights,
design rights and trademarks. To protect and utilize intellectual
property rights, employees must obtain an accurate understandingof and deepen their knowledge of intellectual property rights. For
this reason, we provide employees with education about theserights at the time of joining the company. In addition, informationon the patents of other companies is reported at regular technicalmeetings. Every month, we confirm other companies’ patents
associated with the Group’s technologies and communicate theobtained information across the Company. By doing so, we utilize
the information on these patents for technology development in
the future and for preventing the Company from infringing on
patents of other companies.
We will continuously conduct intellectual property educationand information sharing in order to protect and make effective
use of intellectual property rights.

SUMINOE GROUP Integrated Report 2023

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