Response to Inappropriate Conduct in Quality Inspections
Background behind the Series of Instances of Inappropriate Conduct
Having received a report from an internal whistleblower in late February 2022, about quality inspections by Japan Steel Works
M&E, Inc. (hereinafter “M&E”), JSW Group conducted an unannounced internal inspection of M&E. In late March of the same year,
we confirmed that M&E had committed inappropriate conduct in the inspection of some products they had manufactured.
In response, after making a public announcement about the matter on May 9, a special investigation committee consistingof outside attorneys was established to conduct an investigation. On November 14, 2022, we received the results of thatinvestigation and made an announcement about the initiatives we would be implementing.

Analysis of the Causes
1 Inadequate organizational management system that made it difficult for a system of checks and balances tofunction
Authority was concentrated in the product division, which was in charge of planning and directing each process from specification coordination
with customers to manufacturing and quality confirmation of products. In addition, due to the very nature of materials manufacturing, which
involves only a limited number of divisions in the manufacturing process and is subject to direct or indirect involvement and guidance by the
product division, it is difficult for a system of checks and balances to function between processes. This contrasts to the situation at othermanufacturing plants engaged in machine manufacturing, where the series of manufacturing processes, such as design, machining, andassembly, are based on a division of labor, with process control by a production control division and at least a semblance of check-and-balance
functions in place among the processes.

2 Lack of awareness of the importance of quality compliance

Results of the Special Investigation Committee’s Investigation and theInappropriate Conduct Determined
From among the facilities investigated (at M&E, Hiroshima Plant, Yokohama Plant, and Meiki Plant), inappropriate conduct was
confirmed for products manufactured and shipped by M&E. No inappropriate conduct was confirmed at the Hiroshima Plant,
Yokohama Plant, or Meiki Plant.
The inappropriate conduct confirmed at M&E was independently investigated and confirmed by the Special Investigation
Committee. As a result of this investigation, inappropriate conduct was confirmed in the following product groups: power products,
nuclear energy products, cast steel products, forged steel products, steel Plate & Pipe products, and ordnance products.
A summary of the confirmed inappropriate conduct for each product group is shown in the table below. (Additional comments
below the table are supplemented by the Company.)
Regarding the affected products, we are reporting to and discussing with our customers sequentially.
The occurrence of problems in the product quality or performance owing to the inappropriate conduct has not been confirmed.
We take the facts and recommendations of the Special Investigation Committee with the utmost seriousness, and we will makecompany-wide and group-wide efforts to reform our systems and culture to prevent any recurrence, which will enable us to regain
the trust of all stakeholders.

There had been a tendency toward downplaying the process of quality assurance due to there being more importance placed on the final
quality of products and inadequate awareness of the fact that quality is created through the cumulative practice of adhering to each and every
specification and inspection requirement in the manufacturing process that has been agreed on with the customer. In addition, it was observedthat some individuals mistakenly believed that certain specification violations were acceptable as long as no quality problems were encountered
while practicing individual standards. There was also a tendency to try to solve problems by independently changing the definitions andinterpretations of regulations and specifications.

3 Overconfidence in experience and track record, and pressure to respond to customer requests and dialogue
M&E is seen as maintaining a strong commitment to perfection in terms of quality and on-time delivery. Against this background, M&E ended
up engaging in inappropriate conduct due to the justification at the individual and organizational levels of taking measures without sufficient
communication with customers in the event of the occurrence of quality problems.

4 Paper-based and manual inspection work processes and a chronic shortage of personnel
Paper-based management and manual record keeping create an environment in which there are occurrences such as the rewriting of inspection
results. In addition, the considerable volume of cumbersome manual work increased the workload and put a strain on human resources,
especially in responding to unexpected events, thereby triggering the omission of necessary operations in the name of efficiency.

Measures to Prevent Recurrence
Based on the analysis of the causes, and taking into consideration the recommendations from the Special Investigation Committee,
the Company has formulated the following measures to prevent recurrence of this inappropriate conduct. Having granted approvalof the overall approach, the Board of Directors will regularly monitor the progress and effectiveness of these measures.

Measures to Prevent Recurrence in the Company
Product groups

Products

Type of inappropriate conduct

Number of cases and times ofoccurrence1	
Establishment of a company-wide quality assurance system (new establishment of a Quality Management Office)For details, please refer to p. 32.
2
	Strengthen and raise awareness of the need for quality compliancePower products

Rotors, ring materials

Falsification, fabrication, or misstatement of inspection
results and analysis values

341 cases (1998-2021)

Nuclear energy
products1

Disc materials, headmaterials

Falsification of dimensional records, falsification or
fabrication of test results, false statements in inspections

20 cases (2013-2021)

Cast steel
products

Valve casing materials,
steam turbine casingmaterials

Falsification of inspection results, test results, andanalysis values

12 cases (2007-2022)

Forged steel
products

Rolls, forged steel pipes

Falsification or fabrication of inspection results, test
results, and analysis values

68 cases (2003-2020)

Steel Plate & Pipeproducts

Stainless clad steel plate

Falsification of inspection results and analysis values

2 cases (2017, 2020)

Ordnance
products2

Forged steel materials

Falsification of test results and analysis values

6 cases (2020)

1. Most of the cases were emergency measures that were triggered by sudden events that occurred in the manufacturing process, a finding that was confirmed in theinvestigation report by the Special Investigation Committee. There were circumstances that would not have otherwise been a problem if they had been reported toor discussed with customers, but they were covered up without reporting to or discussing about with customers, which constitutes a deviation from the procedural
specifications sought by customers.
2. There was no deviation from the specifications agreed on with final customers, but instead from the internal control values of M&E, whose customer is our Company(Hiroshima Plant).

30 JSW Integrated Report 2022

• Proper communication from top management	   Top management indicating the serious commitment to quality compliance will be an activity for raising awareness among theemployees who work under them. In addition, the president will hold lunch meetings with employees on a regular basis to promotedialogue and transition to a more open workplace culture.
• Establishment of a Quality Compliance Month	   In order to sustain an awareness of the importance of the lessons learned from the inappropriate conduct, May of each year will
be observed as Quality Compliance Month, which will entail activities such as education and training sessions pertaining to quality
compliance, as well as proper communication from top management.

3

Strengthen governance and internal controls• Strengthen internal audit functions	   Strengthening the internal audit functions of the head office Internal Auditor Office, internal control will be established in the quality
management process, including quality inspections by the Quality Management Office, and the status of operations will be audited asneeded.
• Strengthen the internal whistleblowing system	   Further awareness of the whistleblowing system will be promoted and the system with undergo further strengthening, including theestablishment of a new leniency system (punishment reduction) for internal voluntary reports.
• Review the structure of the Board of Directors	   The functions of the Board of Directors will be oriented toward monitoring. Regarding the composition of the Board of Directors, we will
move forward in ensuring diversity through means such as considering a reduction in the number of internal executive directors and anincrease in the percentage of outside directors.

Measures to Prevent Recurrence at M&E

For details, please refer to p. 33.

1	Strengthen the independence of quality assurancefunctions by deconcentrating authority in the productdivision2

Reform the workplace culture

3

Strengthen education pertaining to quality control

4

Digitalization of inspection operations5	
Appropriate allocation of management resources toquality control
6

Upgrade communication with customers

7	
Revision of standards for the storage of qualityrelated documents and data

JSW Integrated Report 2022 31

Details of the Main Recurrence Prevention Measures
Measures to Prevent Recurrence in the Company

Measures to Prevent Recurrence at M&E

Establishment of a company-wide quality assurance system

Strengthening the independence of quality assurance functions bydeconcentrating the authority of the product division

In order to strengthen the corporate monitoring and supervision of the self-contained quality assurance management systemin each division and plant, we established the Quality Management Office on September 16, 2022. This office is headed by
the director in charge of quality management to oversee the quality assurance functions in each division and plant. The Quality
Management Office is responsible for the following operations

1

 stablishment of company-wide quality policy and basic
E
quality action guidelines (figure on right)2

 uidance on consistency with the Company’s management
Gstrategy pertaining to the quality activity policies at eachbusiness and plant (including M&E)

3S
 upervision and assessment of quality assurance activities
at each division and plant (including independent audits)4

 uidance and recommendations for operationG
improvement based on the related assessments

5Implementation of company-wide education and training
related to quality assurance activities

6 ompany-wide horizontal deployment of information
Cthat should be shared: information on useful quality
improvement activities and problems at each division/plant7

 upervision of response to serious product accidents andS
quality irregularities at the time of occurrence8 eports to management on important quality assuranceR
activities of the entire company or each division/plant

In order to prevent interference with quality control operations by the product division, which is responsible for delivery dates andcosts, quality assurance functions will be integrated into the Quality Control Department, which will report directly to the presidentof M&E. This reorganization has been implemented as of June 1, 2022. In addition, by incorporating Quality Assurance Division
Directors into the parent company’s Quality Management Office for concurrent duty, there will be a system in place for ensuringpersonnel control. Moreover, the Quality Control Department now receives quality audits from the Quality Management Office.
These changes will strengthen the monitoring and supervision functions of the parent company.
For nuclear products, we will strengthen monitoring and supervision by third parties through means such as accepting witness
inspections by external inspection organizations. Though we already have witness inspection by external inspection organizations
for some matters, we will consider expanding this practice in the future as based on consultations with our customers.
In addition, functions related to delivery and cost management will be separated from the product division and reorganized, anda system will be established to appropriately verify and manage the personnel and facility capabilities of the plant of M&E.

Renewal of workplace culture
The report of the Special Investigation Committee suggests that the corporate culture within the Company is not conducive tobringing attention to internal problems. We will work to create an open workplace culture where individuals can point out mistakes
without fear, where such feedback is accepted, and where opinions can be freely expressed.
To this end, we will move forward with activities that raise awareness for fostering a culture of quality and safety, including senior
management sending the right kind of messages and gleaning feedback from employees through regular round-table talks, as wellas through actions such as holding regular workshops and study sessions on quality and compliance, along with the posting of
posters.
Also, since divisions where human resources remain unchanged are susceptible to the onset of peer pressure, we will also
promote personnel rotation across divisional boundaries in parallel with the review of business processes. The effectiveness ofthese actions will be verified through means such as internal attitude surveys.

General Meeting of Shareholders
Audit & Supervisory Board
Board of Directors
Executive Board
President

ESG Promotion
Office32 JSW Integrated Report 2022

Quality Management
Office(Quality Assurance Department General Manager, M&E)

(Ordnance Quality Assurance Department General Manager, Hiroshima Plant)* Concurrently serving as General Manager incharge (Muroran)(Quality Assurance Group Manager, Yokohama Plant)* Concurrently serving as General Manager incharge (Ordnance)(Quality Assurance Department General Manager, Meiki Plant)* Concurrently serving as General Manager incharge (Yokohama)* Concurrently serving as General Manager incharge (Meiki)(Quality Assurance Department General Manager, Hiroshima Plant)

Other organizations omitted* Concurrently serving as General Manager incharge (Hiroshima)

Corporate Planning
OfficeConcurrently serving as office staff:
each Quality Assurance Division Director(as indicated on the right)
Dedicated Office staff: 1
Deputy Office Manager: 1
Office Manager: 1 (director in charge of quality management)Internal Auditors
OfficeDigitization of inspection work
We will construct a digitalized inspection work system to prevent the kind of errors and omissions in inspection data that could be
due to intentional or negligent errors in the process of preparing inspection reports.
The Office of Digital Transformation (established on July 1, 2022) is taking the lead in the digitization of inspection operations at
plants, including those of M&E, with M&E aiming to begin partial operation during the second half of fiscal 2023.

Appropriate investment of management resources in quality control
Given that the lack of personnel and equipment necessary for quality control, including inspections, was a factor in the occurrenceof inappropriate conduct, we will increase the number of personnel needed, invest in education to train inspectors, and invest in
the necessary equipment and measuring instruments, including digitization.

JSW Integrated Report 2022 33

Sustainability Policies
The Japan Steel Works has continued to consistently resolve social problems by innovating materials for more than a century
since our founding in 1907, first in steel, then in the development of plastic that began after the Second World War and more
recently in crystals such as gallium nitride (GaN). With the belief that this is the very purpose for the existence of the Group,
we set forth as our Purpose Material Revolution™, making the world sustainable and prosperous. Furthermore, we identified
as Materiality six themes that should be prioritized in order to realize our Purpose. With these as the basis for decisions madeand actions taken in the Group’s business activities, the Group will coalesce as one to consider which industrial machineryand new materials to provide for which social issues, and then work towards realizing them to create social value.

Sustainability
Management

In addition, as stated in our vision, we believe that the Group’s corporate value will be enhanced by benefiting all
stakeholders by developing and implementing industrial machinery and new materials that solve social issues.
The simultaneous realization of this creation of social value and the sustainable enhancement of corporate value typify theconcept of sustainability to JSW Group.
In taking specific actions in our quest to realize sustainability for JSW Group, we will continue to hold ourselves to highethical standards in accordance with the Group Standards of Business Conduct.

Governance and Promotion System for Sustainability
Sustainability promotion activities are carried out by the ESG Promotion Committee, which was established in April 2021
and chaired by the Director in charge of Promoting ESG. In addition to considering strategies related to climate change, thecommittee also discusses all manner of ESG-related issues. The Board of Directors exercises appropriate oversight on the

Message from the Director in Charge of Promoting ESG

basis of input such as reports on the ESG Promotion Committee’s activities.

Having established JSW Group corporate Philosophy, starting with
Purpose, Materiality was identified as themes that should be prioritized inorder to realize our Purpose. By clarifying these, we were able to reaffirm
the challenges that need to be undertaken to realize the future and mission
we would like to realize, as well as the very purpose of theGroup’s existence.
In parallel, in June 2022, we announced our endorsement of the TCFD
and then in September 2022 established a Human Rights Policy andexpanded our Basic Procurement Policy. Companies are increasingly
expected to manage their operations in an ever more sustainable manner,and our Group is indeed one that is progressively organizing and building
a framework for sustainable management. Based on this framework,
we aim to further enhance our corporate value by fulfilling the host ofsocial responsibilities that are sought in companies and contributing to
the resolution of social issues through the provision of reliable products,
technologies and services that place importance on quality.

Junichiro Deguchi

In April 2022, the Company established the ESG Promotion Office as an organization dedicated to promoting ESG activities
on a company-wide basis. The ESG Promotion Committee plays a central role in the Group’s climate change response and
ESG-related activities, which are promoted through the ESG Promotion Office in cooperation with head office divisions,business divisions, plants and Group companies.

Board of Directors
Inside Directors

Supervise

Representative Director & Executive Vice President
In charge of Export Control Administration; In charge of Personnel Department; In charge of CSR & Risk
Management; In charge of Promoting ESG; In charge of Health & Safety Management and Environmental
Management; In charge of General Affairs Department; In charge of Material and Engineering Products Business

Environment

SocialGovernance

36 Response to Climate Change

41 Talent Development Strategy

46 Corporate Governance

38 Environmental Management

43 Human Rights

52 Management Team40 	Reduction of Environmental

44 Occupational Health and Safety

54 Message from an Outside Director

45 	Supply Chain Management

55 	Risk Management45 	Local Communities

56 	ComplianceImpactOutside Directors

Report

ESG Promotion Committee

Plan (target setting)
Check (monitoring)

Chair: Junichiro Deguchi, Director in charge of Promoting ESG
and Representative Director & Executive Vice President
Office: ESG Promotion Office
ESG Promotion Office(newly established on April 1, 2022)

Do (implementation of measures)
Action (review of activities)

Head Office
Divisions

Business
Divisions

PlantsGroup
Companies57 	Digital Transformation Promotion
57 Information Security
34 JSW Integrated Report 2022

JSW Integrated Report 2022 35

Response to Climate Change

Governance
The Board of Directors recognizes that it is one of the important subjects to respond to climate change issues and supervises theGroup’s efforts to address climate change issues in terms of both risks and opportunities. Specifically, when the Board of Directors
deliberates on management strategies and plans, its decisions are made based on risks and opportunities related to climatechange issues as necessary. For more information, see the pages on Sustainability Management (p. 34-35).

Impact on Operating Income: Minor: less than ¥100 million/year; Moderate: ¥100-1,000 million/year; Major: ¥1,000 million/year or more
Category

Type

Transition risks

Policies andregulations

36 JSW Integrated Report 2022

4°C

Major

—

—

Moderate

Introduction of border adjustment tax

Moderate Moderate
Minor

Increased procurement costs due to increased demand for steelmaking raw materials as a result of the shift from blast
furnaces to electric furnaces in the steel industry (CO2 reduction measures)

Moderate Moderate

Damage to our ESG evaluation and reputation due to delays in CO2 emission reduction measures at the productmanufacturing stage

Moderate Moderate

Acute

Increased costs incurred by the restoration of damaged production and supply chain facilities due to severe natural disasters
such as typhoons and torrential rains caused by extreme weather change

Minor

Minor

Chronic

Increased costs (capital investment) to cope with rising sea levels

Minor

Minor

Markets—

Financial “Opportunity” Impact Assumed for FY2030
Impact on operating income: Minor: less than ¥100 million/year; Moderate: ¥100-1,000 million/year; Major: ¥1,000 million/year or more
Category

Type
Markets

Opportunities

and renewal of production facilities) to non-fossil fuels.
In terms of opportunities provided by the below 2°C
scenario, we possess multiple product groups that could
potentially provide opportunities for us as environmental
regulations become stricter, such as manufacturing equipment
for separator film used in EVs and electrically driven injection
molding machines with superior energy efficiency. To increase
sales of those products, we are working to strengthen our
production system, expand product substantiality that meetmarket needs, and strengthen our technology. In addition,
we will promote resource efficiency by taking the opportunityof introducing carbon prices, such as electrification of
manufacturing facilities and promotion of the use of electricity
and non-fossil fuels derived from renewable energy.
Risks posed by the 4°C scenario include physical damage
to production facilities and other property caused by events
such as typhoons, torrential rains, floods and storm surges,
costs incurred by countermeasures, and consequences suchas the impact on business performance due to the shutdownof operations.
We asked an external organization to scrutinize the location
conditions of our main manufacturing bases, forecasted
changes in weather, existing disaster prevention facilities inand around the manufacturing bases, and damage records
in the past. As a result, it was confirmed that disasterprevention measures have been strengthened not only in the
manufacturing bases but also in the surrounding area suchas raising the embankment. In addition, as the estimatedamount of damage is expected to be covered by insurance,
the impact of physical risks (acute and chronic) on businessperformance is expected to be minimal by the middle of thiscentury. We will continue to monitor climate trends, and if
the tendency for intensifying disasters becomes even more
pronounced, we will consider parallel production of major
products at bases with stronger disaster tolerance.
Based on the above, we believe that our strategy for climatechange is resilient.

2°C

Introduction of carbon pricing (imposition of a carbon tax)
Cost of refurbishing/updating facilities and R&D to support a shift to the use of non-fossil fuels used in production facilities

Reputation

Strategy
We conducted a scenario analysis to evaluate how the risks
and opportunities of climate change affect our businessstrategy and to consider countermeasures. The assumptions
used for this scenario analysis are as follows. The target ofthe analysis is covering all businesses based on consolidated
financial statements, and the analysis time axis is fiscal 2030.
As for the based scenarios, IEA’s SDS scenario (Sustainable
Development Scenario) and IPCC’s RCP 2.6, etc., are used as“below 2°C scenario,” and STEP scenario (Stated Policies
Scenario) and IPCC’s RCP 8.5 etc. are used as “4°C scenario.”
As a scenario analysis process, we first identified the risks
and opportunities that climate change would bring, andextracted items that are expected to have a relatively large
impact on operating income from among various items. Next,
we collected objective external data necessary for estimating
the impact of these items, and estimated the impact as of fiscal
2030 based on the below 2°C scenario and the 4°C scenario.
Then, we considered countermeasures for the results of ourestimates with appropriate parameters. The extracted items
and the estimated degree of impact, and countermeasures forthem are as shown in the table on the right page.
The risks of the below 2°C scenario include, in addition toincreased costs due to the introduction of carbon pricing, adecrease in sales of products for coal-fired power stations,increased costs for the non-fossilization of fuel for production
facilities, and a decrease in sales due to reputation damage if
the company’s CO2 emissions reduction measures prove to
be insufficient.
In response, we are promoting the reduction of CO2
emissions at major manufacturing plants and are also
working on the introduction of renewable energy-derived
power, research, and development for the shift to non-fossil
fuels, and equipment refurbishment/renewal. Regarding thedecline in reputation, ESG Promotion Committee will continue
discussion with a view to accelerating the plan, as well as
ensuring the execution of plans such as increasing the amountof electricity derived from renewable energy and shifting (repair

Degree of impact

Details

Decrease in demand for thermal power related products due to the reduction in the construction of conventional thermal power plants

Technology

risks

While climate change has a great impact on the global environment, society, andeconomy, it is a long-term and highly uncertain problem. We, Japan Steel Works Ltd., considers a climate change as one of theimportant management issues, and in June 2022, we have expressed our endorsement for TCFD (Task Force on Climate-related
Financial Disclosures).
JSW Group analyzes and examines the impact of climate change as risks and profit opportunities on its business activities andis working for our disclosure of information in accordance with TCFD Disclosure Framework.
* TCFD: T ask Force on Climaterelated Financial Disclosures
See website for detailed report.
established by the Financial
Stability Board (FSB).
Climate change response: https://www.jsw.co.jp/en/sustainability/environment/climatechange.html

Financial “Risk” Impact Assumed for FY2030

PhysicalSupport for and Information Disclosure in Line with
the TCFD Recommendations

EnergysourcesResource
efficiency
Products andservices

Degree of impact

Details

2°C

4°C

Expansion of the EV market

Major

Major

Expansion of high-efficiency, energy-efficient power electronics market and 5G infrastructure market

Moderate Moderate

Increased demand for offshore wind turbines

Moderate Moderate

Increase in hydrogen stations for fuel cell vehicles

Minor

Tax relief after the introduction of carbon pricing on CO2 emissions from production facilities

Major

—

Reduction of CO2 emissions due to the introduction of photovoltaic installations (Scope 1, 2)

Minor

—

Minor

Expansion of products and services that contribute to the demand for the reduction of CO2 emissions

Major

Major

Response to the demand for plastic recycling, contribution to social implementation of non-fossil fuel-derived plastics andcoal alternatives

Minor

Minor

Response to the demand for nuclear power plants that emit less CO2 and are a stable source of electricity

Moderate Moderate

For more information on our measures to address each of the risks and opportunities, please see our website.

Risk Management
We have established rules regarding risk management and clarified the company-wide risk management system. The ESG Promotion
Committee and the Environmental Management Committee conduct the identification and assessment of risks related to climatechange. Important risks among those identified will be deliberated on by the Board of Directors or the Executive Board as appropriate.
For more information on the environmental promotion system, please see the Environmental Management pages (p. 38-39).

Indicators and Targets
The “Indicators and Targets” that measure and manage risks

CO2 Emission (Scope 1, 2) Reduction Plan and Renewable Energy
Introduction Planand opportunities related to climate change have set the(t-CO2/year)

following targets for a carbon-neutral decarbonized society.

250,000

239,854

CO2 emissions reduction target

By the end of FY2025 By the end of FY2030
45% reduction
60% reduction(compared with FY2013) (compared with FY2013)(%)
50

We are engaged in environmentally friendly business activities
that aim for improvement in terms of both “decarbonization

200,000

187,184

by products“ and ”decarbonization of production processes.”

161,913150,000

Regarding the CO2 emission reduction target, we have40

180,444 185,502

171,42530

initiatives underway from Scope 1 and Scope 2. As Scope 3
is being calculated, we are proceeding with efforts toward

100,000

20
95,942

setting publication and management indicators.
Target (by end of year)

Classification

Management Indicator

2025

2030

Reduction of CO2
emissions in production
activities (Scope 1, 2)CO2 emissions reduction
target(compared with fiscal 2013)45%
reduction60%
reduction

Promotion of theintroduction ofrenewable energy

Percentage of renewableenergy among all energy
used (Scope 1, 2)

25%
or more40%
or more50,00010
118,606

0

0
2013

2017

(benchmark year)

CO2 emissions (left axis)

2018

2019

2020

2021

2025

2030

Estimate Target(FY)

Percentage of renewable energy introduced (right axis)* In terms of the scope covered, the CO2 emissions calculation includes the totalof the head office and the Group's main manufacturing sites (Hiroshima Plant,
Yokohama Plant, Meiki Plant, Japan Steel Works M&E, JSW Aktina System).

JSW Integrated Report 2022 37

Environmental Management

Environmental Policy

Targets and Progress of the Medium-Term Environmental Plan
Achievement Level:

JSW Group is committed to being an environmentally responsible corporate citizen. We emphasize environmentally responsible
production and technology as means to support sustainable social development in harmony with ecosystems.

Action Plan
1

Priority Issues

Business sites set environmental policies, objectives andgoals in accordance with international standards with due
consideration of their operations and nearby communities.

	
Set appropriate objectives and targets to reduce2environmental impact, including on biodiversity.

	Provide society with products and services that contribute3
to environmental conservation.
( 1 ) Improve the social value of our products in terms of the		
environment, health and safety.
( 2 ) Provide products and services that reduce environmental		
impact by understanding environmental needs anddeveloping technologies.

( 1) Comply with laws, regulations and JSW Group agreements with	
external entities.
( 2) Prevent pollution and reduce and properly process waste with	
due consideration for impact on ecosystems.
( 3) Use resources more productively by saving energy and by saving	and recycling resources.
( 4) Require employees and on-site companies to understand and	abide by business site policies.

Environmental Management Structure

Maintain existing ISO 14001 certifications
Obtain new ISO 14001 certification ofdomestic manufacturing Group companies

30% reduction in CO2 emissions(compared with fiscal 2013)

29% reduction in CO2 emissions(compared with fiscal 2013)

60% reduction in CO2 emissions by the endof fiscal 2030 (compared with fiscal 2013)
45% reduction in CO2 emissions by the endof fiscal 2025 (compared with fiscal 2013)

Improvement of 1% or more in energy
usage intensity(year-on-year and average change in
intensity over 5 fiscal years)

0.1% worse than the previous year
0.8% improvement over average change
in intensity over 5 fiscal years

Improvement of 1% or more in energy usage
intensity (year-on-year and average change
in intensity over 5 fiscal years)

Promotionof Resource
Conservation andRecycling

Recycling rate of 95% or higher(excluding slag and refractories)

Recycling rate of 96%(excluding slag and refractories)

Recycling rate of 95% or higher(excluding slag and refractories)

Managementof Chemical
Substances

Improvement of 1% or more emissions
and transfers intensity of chemical
substances subject to the PRTR* law(year-on-year and average change in
intensity over 5 fiscal years)

3.1% worse than the previous year
0.1% worse than the average change in
intensity over 5 fiscal years

Improvement of 1% or more emissions andtransfers intensity of chemical substances
subject to the PRTR law(year-on-year and average change in intensity
over 5 fiscal years)

Legal or regulatory violations: 0

Legal or regulatory violations: 0

Legal or regulatory violations: 0

Treat low-concentration PCB waste by
the legal deadline (March 2027)

Progressing appropriately

Treat low-concentration PCB waste by thelegal deadline (March 2027)

Issuance of integrated reportIssuance of integrated report

Disclose environmental management
activities in an integrated report
Conduct training for employees

Climate Change
Measures

Recognizing the importance of conducting its business activities in harmony with both the international and local communities,
Management Committee, headed by the director in charge of environmental management, formulates group-wide annual
environmental management policies and action plans, and monitors and evaluates the progress of environmental management

Achievement
Level

Less than 80% achieved

Medium-Term Environmental Plan
(under JGP2025)
Fiscal 2025 Targets

Maintained ISO 14001 certification ofplants and Nikko-YPK Shoji

Compliance

JSW Group has been promoting environmental management activities throughout the Group since 1997. The Environmental

Fiscal 2021 Actual Results

80% or more achieved

Maintain ISO 14001 certification ofplants and Nikko-YPK Shoji

Environmental
Management

Shared Business Site Policies

 ystematically implement environmental initiatives andScontinuously promote environmental conservation.

Fiscal 2021 Targets

Fully achieved

Raising
Environmental
Awareness* PRTR: Pollutant Release and Transfer Register

activities. Each plant has its own environmental supervisory committee and works to promote environmental management
activities, as part of JSW Group’s unified approach to reducing its environmental impact.
Environmental Management Committee

JSW Plant Environmental Supervisory Committee
JSW Plants(Hiroshima, Yokohama, Meiki)

President

Chief Environmental
Management Supervisor(Director in charge ofEnvironmental Management)

Environmental
Management
Administrative OfficeEnvironmental
Management Supervisors(JSW Plant Managers)

Environmental
Management Officers(President,
Japan Steel Works M&E, Inc.)

Renewable Energy Use Initiatives

The fiscal 2021 environmental impact of the manufacturing

energy used, the Group has set the target at 25% or more byprocesses of the Industrial Machinery Products Business and

JSW plants
affiliated companies

the Material and Engineering Business is as indicated below.
JSW Group carries out quantitative assessments of inputs,

Environmental
Management Officers

Muroran Plant
M&E affiliatedcompanies

Head Office
General Manager,
Corporate Planning
Divisionsuch as energy and intake water, and outputs, such aswaste generated in manufacturing processes, carbon dioxide
and waste water, and applies those in its environmental

Materials

Business Site

and Nikko-YPK Shoji Co., Ltd. have obtained ISO

Hiroshima Plant

December 18, 1998

JQA

14001 certification, an international standard for

Yokohama Plant

September 4, 2006

JQA

environmental management systems.

Meiki Plant

March 4, 2005

JQA

Japan Steel Works M&E

December 18, 1998

LRQA

Nikko-YPK Shoji

February 7, 2005

JQA

* Certification bodies: LRQA (Lloyd’s Register Quality Assurance Limited), JQA (Japan Quality
Assurance Organization)

MANUFACTURING

2021 electricity derived from renewable energy sources wasintroduced as part of the purchased electricity at that plant.
renewable energy sources accounted for 0.8% of the Group's

Metals, rubber,
timber, etc.

Chemical
substances

7,228 tIntakewater

2,878 TJ

16.91 million m

3(of which 0.8% renewable energy)

Original Certification Date Current Certification Body

In April 2021, a solar power generation equipment wasenergy consumption in fiscal 2021.
In fiscal 2022, the Hiroshima Plant increased the percentage
of electricity derived from renewable energy sources in its

EnergyGroup companies Japan Steel Works M&E, Inc.

fiscal 2030.

The combined result of these two developments is that

INPUT

Business Site ISO 14001 Certification

the end of fiscal 2025 and 40% or more by the end of

installed at our Hiroshima Plant, and, in addition, from October

improvement activities.

Head OfficeEnvironmental
Management Division

JSW’s Hiroshima, Yokohama and Meiki plants andIn terms of the percentage of renewable energy sources in all

JSW Plants

Japan Steel Works M&E
Environmental
Management Supervisor

Business Activities andEnvironmental Impact

purchased electricity, and newly introduced renewable energyderived electricity for part of the electricity purchased at the
Yokohama Plant and Meiki Plant.

Industrial machinery products
Materials and engineering products

In addition, there is active rebuilding and expanding ofbuildings at the Hiroshima Plant with an aim to achieve

Total waste volume Waste emission volume

Recycling volume85,429 t

21,066 t

64,360 t

CO2 (Scope 1 + 2)

Chemical substances(amounts emitted and transferred)

Waste water

171,425 t-CO

226 t

16.91 million m

OUTPUT

2

JGP2025, and plans are in place to install solar power
generation equipment in all new buildings.
We will continue initiatives that work toward increasing theuse of renewable energy sources.

3

75% of total waste volume is recycled
38 JSW Integrated Report 2022

JSW Integrated Report 2022 39

Reduction of Environmental Impact

Policy and Initiatives for Water Resources

Talent Development Strategy

Intake Water Consumption

Japan Steel Works M&E, Inc. accounts for over 99% of the intake waterused by JSW Group. Although the Company uses industrial water andsea water in cooling, as it not only operates in a region with low water
stress but is also engaged in initiatives such as practicing water source
management for the industrial water it uses and recycling the coolingwater, we believe there is little impact on stakeholders.
In terms of waste water quality, we will continue to conduct strictwater quality management based on government ordinances.

(Million m3/year)

20
15

16.73

16.33

16.86

16.28

16.91

2017

2018

2019

2020

2021

10
5
0

Proper Management of Chemical Substances
At JSW Group, we manage chemical substances and other substances withenvironmental impact and are working to reduce emissions of hazardous substances.
Based on the PRTR Law, we report to local governments annually about our releaseand transfer of the substances that are subject to that law. Substances that are
subject to the PRTR law are used primarily in manufacturing processes, such as steel
manufacturing, welding, galvanization, cleaning and coating.

(FY)

In order for our Group to simultaneously realize sustainableenhancement of corporate value and creation of social value,
it is first and foremost important for us to acquire and develop
the right human resources for realizing the Purpose of Material
Revolution™, making the world sustainable and prosperous.
This comprises engineers, including those in our current
business divisions, who will contribute to strengthening ourcore competence, as well as corporate personnel who will
support our management strategy to spread far and wide
the value we provide to the world. In addition, it is necessary
Overview of Talent Development Strategy

Release and Transfer of PRTR Substances
FY2020

FY2021

Amountreleased (t)

50.1

65.1

Amounttransferred (t)

153.1

161.0

Total (t)

203.2

226.1

PurposeEngineers

Corporate personnel

Chemical recycling response

Already in use in a host of recycling fields, usage of our twin-screw extruders (TEX) is expected to expand, particularly in the field ofchemical recycling for waste plastics. As a typical example of chemical recycling with the use of TEX, it is possible to decompose
used acrylic resin and recover monomer, the raw material for new acrylic resin. Having opened the Recycling Technical Center (RTC)
at the Hiroshima Plant in November 2022, we are stepping up our efforts toward the spread of chemical recycling.

Non-fossil fuel-derived plastics and biodegradable plastics response

Though plastics such as non-fossil fuel-derived plastics that are not reliant on fossil fuels and biodegradable plastics that preventthe problem of marine plastic litter differ in terms of their respective raw materials, have their fundamental manufacturing process
of melting, mixing and solidifying raw materials is the same as that of general-use plastics. Utilizing the core competence we havedeveloped as a comprehensive plastics processing machinery manufacturer, we are developing and supplying all manner of plastics
processing machinery for the production of these environmentally friendly plastics, and supporting their social implementation.

Initiatives to Reduce Waste Emissions

40 JSW Integrated Report 2022

Global personnel

Acquisition

Talent development strategy

Development

Human capital

Acquiring and Developing Human Resources
Our Ideal Candidate Profile and Recruitment Activities

Plastic Resource Recycling Initiatives

Our Industrial Machinery Products Business is maintaining ahigh recycling rate through thorough implementation of thethree R’s of waste. Our Material and Engineering Business iscontributing to the realization of a recycling-oriented society
by utilizing internal and external steel scrap as raw materials.
Though waste emissions in fiscal 2021 ended up at almost
the same level as in the previous year partly due to increased
operations, efforts are being made to reduce waste generation“Material Revolution™,” making

Diverse humanresources

The Group has set forth “Material Revolution™, making the world sustainable and prosperous.” as the Purpose. In order toachieve a world that is both sustainable and prosperous, products that contribute to the reduction of environmental impact andresource recycling are indispensable, and the Group will continue to engage in the development and supply of such products.
As we aim to be a comprehensive plastics processing machinery manufacturer unparalleled across the world, the realization ofa plastic-resources-recycling society in support of a prosperous society is an extremely important issue for us, and we have duly
placed it at the forefront of the Group’s Materiality.
In addition, the Group will continue to work on reducing our direct waste emissions by applying reduce, reuse and recycle (thethree R’s) as a basic principle.

•

Material Revolution™
the world sustainable and prosperous.

Our Approach to Resource Recycling (Reduction of Waste Emission Volume)•for us to also go beyond these human resources to enhance
educational opportunities so that our employees are capableof success on a global scale.
This is why we will implement measures to acquire anddevelop diverse human resources that will contribute to theachievement of the vision sought by the Group, based on our
medium-term personnel plan and taking into consideration thecomposition of our human resources and our organizational
nature ascertained through engagement surveys.

by improving manufacturing processes and developing new
recycling methods.
Industrial Machinery
Products Business
Material andEngineering Business

Setting forth the following profile of our ideal candidates
to illustrate the requirements that will contribute to theimplementation of our management strategy and take on thechallenge of resolving social issues, we are focusing on the
recruitment of new graduates and experienced personnel thatmeet these requirements. In order to acquire human resourcesfrom a wide range of sources, we are currently engaged ina host of hiring activities, including referral recruiting throughreferrals from employees and direct recruiting that entails theproactive scouting of talented individuals.
Recruitment interviews in the selection process are
conducted using a combination of face-to-face and online
methods to ensure that we have the opportunity to match theCompany with fine and motivated individuals across the nation.

Ideal Candidate Profile

FY2020

FY2021

Waste emission
volume (t)

213

124

2. Has strong problem-solving capabilities

Recycling rate (%)

98.0

98.7

Waste emission
volume (t)3. Has firm independent views and standards

20,66920,943

Recycling rate (%)

72.3

72.2

1. Is eager to take on challenges

4. Is able to think logically
5. Is able to act with persistence

We also channel efforts toward offering internships toprospective new graduates, providing many opportunities
for them to gain a deeper understanding of our workplaceenvironment and culture. In recruiting engineers, on-thesite tours and interviews are conducted, while for those whocome from the liberal arts we take steps such as providing theopportunity to participate in group discussions with younger
employees who are principally in sales positions. This is how
we are endeavoring to give prospective employees a concrete
image of how we work and where they might perform
best within the Company, as well as to prevent the risk ofperceived incompatibility between new employees and theorganization after the former have been employed.
Based on an analysis of the composition of our current cropof human resources, we know that we now need to continue
to secure more diverse employees than ever before in orderto realize sustainable growth. To hire and secure highly skilled
and experienced personnel, we are taking steps such as
establishing a new compensation system.
Going forward, we will continue to focus efforts on an
activity structure that facilitates the recruiting of the corepersonnel and corporate personnel with high expertise whowill drive our business.

JSW Integrated Report 2022 41

Workplace Success for Diverse Human Resources

Training and Development
To develop human resources capable of generating innovationand creating value at our company, we not only train by job
level, from newly hired employees to management, but alsooffer selective training for younger employees with a view
toward developing human resources capable of success in the
global market. In addition to improving business skills such as
negotiating and presenting in English, this training also gives
participants the opportunity to learn styles of thinking that haveglobal resonance. We also strive to create an environment inwhich employees can learn the skills they personally want toacquire by providing a variety of learning opportunities, including
basic and specialized education required for work, language
education that includes overseas study, and self-development
support through an online learning platform.
Regarding the transfer to employees of the technical skills thatare the foundation of our core competence, we have establishedin-house training programs such as the Ginou-Dojo (Technical
Skills Dojo) (Hiroshima Plant) and the Hagane-Juku (SteelAcademy) (Japan Steel Works M&E, Inc. (Muroran Plant)), wherethe various know-how cultivated by skilled engineers over many
years of manufacturing is passed on to younger employees. In
addition, we have introduced a system to encourage and reward
the acquisition of official qualifications, as well as a system tocertify technical skills.

our growth in a process where the starting point is support for
the growth of the mid-level employees who drive the workplace
and take the lead in deploying business strategies. The results ofengagement surveys have shown that an initial focus on improving
the leadership and development skills of mid-level employees
leads to improved performance among all employees. In addition,by promoting the development of human resources who cantake the lead in achieving strategies without being constrained byprecedent, we will increase selective training with a view toward
tailoring employees for future promotion to senior management. To
this end, in addition to giving high performers fast-track promotion
to managerial positions and assigning them important missions
even if they are new, we actively provide opportunities such as
training and career programs that leverage job rotation.
In digital transformation training, we will categorize employees
according to their responsibilities and IT skills, and formulate
a training system based on this categorization in order toensure that the reskilling of employees is promoted and our
digital transformation activities assuredly lead to innovation. We
will then implement educational programs for each category,from improving basic literacy to training specialists, in order tomaximize the effectiveness of the programs.
We will focus on the development of corporate humanresources who will lead the planning and execution of
growth strategies on a global scale and the establishment ofmanagement systems necessary to achieve these strategies, andbegin work on formulating an education system for this purpose.

In human resource development during JGP2025, we arepromoting solutions to management issues and linking them to
Indicators

FY2019FY2020

FY2021

Training cost per employee (thousands of yen)

37.9

29.8

28.5

Number of participants in job level-specific training

234

285

277

Completion rate of job level-specific training (%)

93.2

98.6

98.9

Number of employees newly certified under The
National Trade Skill Test & Certification (NTSTC)

79

47

111

Training System

Group training

Other types of training

42 JSW Integrated Report 2022

Indicators
Percentage of Female New
Graduate Hires for Career-track
Positions (%)

FY2019FY2020

FY2021

8.5

10.0

15.0

Percentage of Women among
Section Managers (%)

7.8

7.8

8.7

Number of Employees Who Took
Childcare Leave

10

11

16

Percentage of Employees with
Disabilities (%)

1.90

2.21

2.46

Human Rights
Respect for Human Rights

SectionManagerTraining
Academic Qualifications and Study Abroad

Development Academy

Leadership Development Seminar

Basic Seminar

Overseas Placement Training

TOEIC English Program

Self-Development Support

Health and Safety

Intensive Training for Qualifications

OJT

Monozukuri Training (Technical Skills Dojo, Steel Academy)

Language Study Abroad

Mid-Level
Employee Training

Global Skills Training

New Employee
Training

Assistant Manager
Candidate Training

Quality Control Training

2nd-Year Training

Business Essay Writing

3rd-Year Training

Job-Based Training

5th-Year Training

Business Basics Training

Level-Based
Correspondence Training

CSR and Risk Management

Executive Seminar

General Managers

Section Manager
Candidate Training

work with childcare and nursing care. We are also moving
ahead in preparing a training program that supports selfdevelopment so that employees can improve their own skills
according to their ambitions. And regarding benefits offered,
the program is being upgraded in ways such as offering acafeteria plan that enables employees to choose the benefit
options they find necessary to meet their own various values
and needs.
In order to create added value through the diverse humanresources in our group, we will continue to conduct a wide
range of educational activities that encourage positivechanges in employee awareness with the goal of promoting
D&I. Furthermore, we will work to build a corporate culture of
openness that provides psychological safety.

Technical Skill
Global Personnel
Management andDevelopment,
Training
Engineer Training Leadership Training

Workplace/Frontline Capability Development

Section Managers
Assistant Managers

Employee Level

New Employees andGeneral Employees

Managerial Level

Business Basic Skills
Training

Dispatched training outside the company

The Group recognizes that the execution of its management
strategy hinges on the active participation of diverse humanresources that can bring about new added value through avariety of thinking styles and ideas.
Regarding the percentage of female employees among
managers, a major indicator of corporate diversity, currently
the female career-track employees, who are the main
candidates for promotion to management positions, aredisproportionately numerous among the younger to midcareer employees. The task of increasing this percentage
is expected to take some time. First, we will increase thepercentage of female employees by boosting the recruitmentof new graduates and experienced workers and implementing
retention measures. This will be followed by an increase in
the percentage of women in leadership positions of at leastassistant-manager level, which will lead to a steady increasein the number of female managers.
In addition, we are developing each of our human resource
systems to make for a work-life balance and employeefriendly workplace that enables one and all to be able to workwith full assurance. Specifically, having established the legally
mandated childcare leave and nursing care leave system,
which is reviewed in accordance with each revision to the law,
we have introduced telecommuting, staggered work hours,
and an hourly paid leave system to help employees balance

Section Manager
Initiation Training

Assistant Manager
Initiation Training

JSW Group respects internationally recognized codessuch as the International Bill of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work.
We also promote efforts to respect human rights based oninternational guidelines such as the United Nations’ Guiding
Principles on Business and Human Rights.
In accordance with these, we have established The Japan
Steel Works Group Human Rights Policy, which clearlyprohibits discrimination, harassment, child labor, and forcedlabor; indicates our respect for basic labor rights; andexpresses our commitment to respecting all human rights inall aspects of our business activities.
In this context, JSW Group has focused on health andsafety activities and harassment prevention, with the primary
aim of ensuring that each and every employee can performtheir work in a healthy and pleasant environment where
they are respected as individuals and their human rights
are not violated. We have established internal and external

consultation hotlines and a resolution process through theHarassment Countermeasures Committee. We conduct fairhiring practices that respect the human rights of all individuals,
and have also established systems that support a favorable
work-life balance, foster a workplace environment that isinclusive of diverse personnel, and strive to provide equal
opportunities so that individuals can excel.
In the creation of our supply chain, we require that suppliers
share an understanding of human rights and legal compliance,
as appropriate, and continue to do due diligence in theconstruction of a framework conducive to human rights.
Recognizing that its business activities are extremely vast
in terms of the fields covered, involving a wide variety of
individuals, JSW Group will engage in dialogue with labor
unions and all other stakeholders, set priorities and address
them appropriately, and step up the monitoring of humanrights-related risks to prevent any direct or indirect negative
impacts on human rights.

For details on JSW Group’s respect for human rights and Human Rights Policy, please refer to the website.
Respect for human rights: https://www.jsw.co.jp/en/sustainability/social/diversity.html
JSW Integrated Report 2022 43

Occupational Health and Safety

Supply Chain Management

Policy for Health and Safety Activities

Approach to Supply Chain Management

In JSW Group, which operates primarily in manufacturing, ensuring the health and safety of employees has always been a toppriority. We consider our health and safety initiatives to be part of a corporate foundation and corporate culture rooted in anemphasis on human capital and respect for human rights.
We are carrying out these activities in accordance with the policy below, with the aim of maintaining and improving the health of
employees and preventing occupational accidents.

JSW Group has established The Japan Steel Works Group
Standards of Business Conduct, which states, among otherthings, that the Group will respect the human rights of all
people, conduct business transactions properly as basedon fair and free competition, and engage in responsible
procurement. In September 2022, The Japan Steel Works
Group Human Rights Policy was established to promoterespect for human rights in accordance with international
norms. Furthermore, in September 2022, we revised theexisting The Japan Steel Works Group Basic Procurement
Policy to have our suppliers achieve an understanding of andcooperate with the above standards and policies, and to
facilitate product procurement that takes into consideration
matters such as human rights, labor, health and safety, theenvironment, and information management in a mannerconsistent with the move toward a sustainable society. We

1

Basic Philosophy

 o fulfill our social responsibility, we have positioned health and safety as a vital part of our management policy, and work toTensure the health and safety of everyone involved in our business.
• We have established and operate an occupational health and safety management system, and prioritize health and safety inall of our business activities to foster workplaces where employees can work safely and with peace of mind.
•

2

Basic Policy(1) We will comply with health- and safety-related laws and regulations, as well as internal standards.
(2) We will establish a safety management system based on strong leadership from top management, the participation of
all employees, and the cooperation of the labor union as well as that of Group companies and partner companies, andthereby prevent occupational accidents and health problems.
(3) We will invest the resources necessary for effective workplace improvements.

Health and Safety Promotion Structure

The Japan Steel Works Group Basic Procurement Policy
The Japan Steel Works Group promotes procurement activities as follows based on The Japan Steel Works Group
Standards of Business Conduct and The Japan Steel Works Group Human Rights Policy.

The promotion structure for health and safety activities in JSW Group is as follows.
Companywide Health and Safety Council

Plant Health and Safety Committee

1

JSW Plants(Hiroshima, Yokohama, Meiki)

President

Companywide Healthand Safety Manager(Director in charge of Health &Safety Management)

Companywide Healthand Safety Management
Administrative Officealso formulated our Request to Suppliers, a document thatoutlines the specifics regarding our vision of how we hopesuppliers conduct business.
In moving forward, we will try to ensure thorough awarenessby our suppliers of this Code of Conduct, policies, andrequests, and promote activities so that we can keep trackof the status of sustainability initiatives of our major suppliers
and, if necessary, engage in dialogue with them to deepen
their understanding of the Group’s Basic Procurement Policy
and improve their initiatives. If necessary, we will continue
to strengthen our supply chain risk management andsustainability. To ensure that all suppliers in our supply chain
can continue to play indispensable roles within society, we
will share with them the Group’s policies and work together
to promote sustainable procurement practices that sustain
sound growth together through our business dealings.

JSW Plants

General Health and
Safety Managers

Health and
Safety Manager(JSW Plant Managers)

Labor unions
JSW plants affiliated companies

Japan Steel Works M&E
General Health and
Safety Manager(President, Japan Steel Works
M&E, Inc.)

Muroran Plant
Health and
Safety Manager

Fair and impartial procurement

	The Japan Steel Works Group complies with laws andinternational norms, treats all suppliers fairly and impartially, andalways conducts transactions in good faith.

M&E labor union
M&E affiliated companies

Head Office
Safety and Health
Department

Head Office
Labor union2

Relationship with suppliers based on trust	The Japan Steel Works Group aims to build partnerships tocreate corporate value by deepening mutual understanding withall suppliers and realizing optimal quality, prices, and delivery
through stable procurements with the following activities.
(1) Regular briefings on our procurement policy(2) Quality management checkups and guidance to eliminate
defects(3) Recognition of outstanding suppliers(4) Confidential management of sales and technology
information(5) Establishment of whistleblowing systems for suppliers

3

Supplier Selection Policy

	The Japan Steel Works Group places particular importance on
the following conditions in selecting suppliers toward building
stronger and more sustainable partnerships.
(1) Achieve legal compliance and fulfill social responsibility.
(2) Respect human rights and prohibit discrimination. Do not becomplicit in human rights violations.
(3) Apply fair working conditions and maintain a safe andhealthy working environment.
(4) Prohibit forced labor, child labor and discrimination in
employment.
(5) Recognize environmental problems and strive to solve andrespond to them.
(6) Conduct fair corporate activities under sound management.
(7) Have an appropriate level of quality, price, delivery time,etc., and make efforts to maintain and improve them

Request to Suppliers
We ask that our suppliers achieve an understanding of the following six items, cooperate with our own proactive efforts, and disclose information as necessary.
Please refer to our website for details.

Health and Safety Initiatives and Results
In JSW Group, we specify priority items for health and safety
activities each fiscal year, and the Group (as well as the labor
union) and suppliers of each plant work together on activities
aimed at achieving zero occupational accidents.
Our major sites have acquired certification for theiroccupational health and safety management systems, and areenhancing the effectiveness of their activities.
We plan to step up our initiatives and activities for improving
the physical and mental health of employees, and are currently
establishing the necessary framework and systems.

Frequency Rate of Accidents per Million Workhours
Muroran Plant
Meiki Plant

3
2.42
2

1

1.20

1.21

0.61

0.63

0.79

0

0

0.53
0

0.42
0

2017

2018

2019

1.02
0.81

0

Site

Certification

Date Acquired/Renewed

ISO 45001

August 12, 2022

Japan Steel Works
M&E

OSHMS

June 5, 2021

44 JSW Integrated Report 2022

Supply Chain: https://www.jsw.co.jp/en/sustainability/social/supplychain.html

Hiroshima Plant
Yokohama Plant
Manufacturing industry average

0.34

Hiroshima Plant

1. Compliance with laws and social norms; 2. Consideration for human rights and occupational safety; 3. Consideration for the environment;
4. Ensuring quality, price and delivery; 5. Efforts on conflict minerals; 6. Information security

1.21

2020

Local Communities

1.31

0.42
0.40
0

2021

(FY)

Note:	Frequency rate of accidents calculated from lost-worktime, serious and fatal
accidents during the fiscal year.
* Meiki Plant merged into The Japan Steel Works, Ltd. in fiscal 2020
Frequency rate of accidents at the Meiki Plant in fiscal 2020 due to theoccurrence of multiple lost-worktime accidents* Manufacturing industry averages are from the survey of occupational accident
trends (Ministry of Health, Labour and Welfare).

The Group recognizes that companies are also members of society and that they are expected to participate in various community
activities, including local communities, and contribute to local development. In addition to contributing to society through its
business, JSW Group also engages in socially responsible activities with the aim of realizing a better society and becoming acompany that is rooted in the local community. Please refer to our website for details regarding the activities we engage in, suchas cleanups, education, and community exchange.
Social Contribution Activities: https://www.jsw.co.jp/en/sustainability/social/socialcontribution.html
JSW Integrated Report 2022 45

Corporate GovernanceCorporate Governance Policies

Building a Stronger Governance System

Based on our Philosophy and the Standards of Business Conduct, the Group recognizes that it is essential to earn the trust of all•N ov. Formulated Corporate Governancestakeholders, including shareholders, customers, business partners and employees, in order to simultaneously create social value
and enhance sustainable corporate value. We therefore continue to strengthen corporate governance to ensure the transparency,

Policy of The Japan Steel Works, Ltd.
•F ormulated Policies in Relation to
Cross-Shareholdings•F ormulated Basic Policy for Officer
Nominations•F ormulated Criteria for
Independence of Outside Officers• Apr. Introduced

whistleblowing system•J un. Discontinued
retirement benefit systemfor officers

soundness and effectiveness of management.

Overview of Corporate Governance Structure
The Japan Steel Works, Ltd. (“the Company”) has adopted

strengthening supervision and improving business execution.

the structure of a company with an audit and supervisory

Audit & Supervisory Board members attend importantboard. The Board of Directors consists of eight directors

meetings including those of the Board of Directors, the(three of whom are outside directors) and the Audit &Executive Board and the Management Council. Once every

Supervisory Board consists of four Audit & Supervisory Board

fiscal half in principle they visit plants, sales locations andmembers (two of whom are outside Audit & Supervisory

Group companies, and receive reports on necessary

Board members).

information from each division. They also exchange opinions

The term of office for directors is set at one year. The

with directors, executive officers and other keypersons, andCompany has also introduced an executive officer system

based on these exchanges, advise management from anthat separates management decision-making and supervisoryobjective and impartial standpoint, while strictly monitoring thefunctions from business execution functions conducted byexecution of duties by directors.

executive officers, thereby speeding up decision-making,

2011

2006

Board of Directors
Auditing

Inside Audit & Supervisory
Board members

regarding directors

2016

2018

•F
 eb. Established Nomination

Maximum number of directors: 20 10
Term of office: 2 years 1 year
Note: At the 85th Annual General Meeting of
Shareholders held in June 2011, the numberof directors was reduced to 7 (from 13 in theprevious year).
•J un. Appointed first outside director(1 director)

Percentage of
Outside Officers: Inside: Outside

ReportingAccounting auditors
Cooperation

Outside Audit & Supervisory
Board members

Outside directors

Nomination
Advisory Committee
Remuneration
Advisory Committee

Auditing
Cooperation

Cooperation

1
6

Advisory Committee andRemuneration Advisory
Committee•M ar. Conducted evaluation ofBoard of Directors effectiveness(once a year since 2016)•J un. Appointed 2 outside directors

2

14.3%

2020

2021

2022

6

25%

•J
 un. Appointed 3 outside

directors• Apr. Established ESG

Promotion Office• Apr. Conducted evaluationof Audit & Supervisory Board
effectivenes•J un. Changed the numberof members on the Board of
Directors from nine to eight

3
6

33.3%

3
5

37.5%

• Business divisions• Plants

Information Security
Committee

Companywide Health and
Safety Council

Export Control
Administration Committee

Business execution organizations

Environmental Management
Committee

Directors with business execution
responsibilities and executive officers

ESG Promotion Committee

Management Council

Internal Control Committee

Internal Auditors OfficeAttendees(with voting rights)

Directors(5 inside, 3 outside)

Inside directors (5)Non-director executive officers (5)President (1)Director in charge of Personnel Department and Secretary Office (1)Outside directors (3)Observers/
Advisors(no voting rights)

Audit & Supervisory Board members(2 inside, 2 outside)

Inside Audit & Supervisory Board
member (1)Outside Audit & Supervisory Board member (1)Chairperson/
Committee Chair

President

President

Outside director

Objectives andAreas of Authority

Decides and reports on basic
management policies, matters stipulated
by laws and regulations, and otherimportant management matters, andmonitors the execution of duties bydirectors and executive officers

Meetings in FY2021

18

Composition

Attendees

Chairperson

 eliberates and decides on importantDmanagement matters and mattersthat have a significant impact on the
Company’s profit and loss
• Discusses and reports on basic
management policies and mattersrelating to overall management

As an advisory body to the Board of
Directors, deliberates on matters relating
to the remuneration of directors andexecutive officers, and reports the results
to the Board of Directors

46

5

5

Management Council

Audit & Supervisory Board

Liaison Council of Outside
Officers

Inside directors (5)Inside Audit & Supervisory Board member (2)Non-director executive officers (7)Business division directors and business division deputy directors,
general plant managers, Head Office division managers

Audit & Supervisory Board members(2 inside, 2 outside)• s an advisory body to the BoardAof Directors, deliberates on mattersrelating to the nomination and dismissalof directors, Audit & Supervisory Board
members and executive officers, andreports the results to the Board of
Directors• Consult on the succession planning forthe president, and report the results to
the Board of Directors•

Directors (3 inside, 3 outside)
Audit & Supervisory Board members(2 inside, 2 outside)

President

Inside Audit & Supervisory Board member

President

Objectives andAreas of Authority

Coordinates and reports on the following important management matters and shares
management information
1. Analysis of business environment, progress of business plans
2. Important matters relating to research and development
3. Matters relating to Group companies
4. Matters that have a significant impact on management including those relating tosales, production, funding, profit and loss
5. Other important management matters

Reports, discusses and makes
resolutions on important matters relating
to auditing; this does not preclude theexercise of individual Audit & Supervisory
Board members’ authority

Advance explanation of the resolution
matters and deliberation matters of
the Board of Directors, and report on
the status of operations and importantmanagement matters of the Company
and the Group

Meetings in FY2021

12

13

Newly established from FY2022• Group companies* The Liaison Council of Outside Officers was established as a venue to provide outside officers with advance explanations about the agenda for Board of Directors
meetings, and as a forum for outside directors and executive officers to verify, report on, and exchange opinions about business execution.

Nomination Advisory
Committee

Executive Board

Executive Board
President

Remuneration Advisory
Committee

Board of Directors

Monitoring

Business
execution

46 JSW Integrated Report 2022

stock-based compensation
plan for officers•J un. Amended Articles of Incorporation

Composition

Audit & Supervisory Board

Inside directors• Head Office divisions•J un. Introduced restricted• Apr. Introduced executive officer system

General Meeting of Shareholders

Decision-making

implement a policy for determining
the content of remuneration, etc., forindividual directors• Apr. Established ESG Promotion
Committee

Role and Composition of Governance Bodies

Corporate Governance Structure

Oversight/
Monitoring

2015

•M
 ar. Board of Directors resolved to

JSW Integrated Report 2022 47

Major Matters Discussed at the Board of Directors Meetings in FY2021• Medium-term management plan JGP2025• Feedback on IR/SR activities• Environmental activity initiatives • Evaluation of the effectiveness of the Board of Directors• Review of the rationality of cross-shareholdings • Business portfolio• Review of dividend policy• Report on the status of compliance line operations• Executive structure• Officers’ renumeration• Reorganization of Yokohama Plant• Status of operations of internal control systems• Market restructuring of the Tokyo Stock Exchange • Talent development strategy

Skill Matrix
JSW Group’s long-term vision is to be a company with job satisfaction and excitement for employees and growing to a business2

Officer Training	In order to deepen the understanding of the roles and responsibilities required of directors and Audit & Supervisory Board
members, the Company invites outside experts to lead study sessions as needed. The subjects covered in the fiscal 2021 study
sessions were as follows.
• May 21 ESG & SDGs Trends & Sustainable Management• Aug. 2 Recent Trends in SR/IR Activities and Issues to be Addressed by the Company• Nov. 4 Response to TCFD and Information Disclosure	In addition to the above, opportunities for inside officers to participate in external training, workshops, and programs are provided
as-needed on an ad hoc basis.

Evaluation of Board of Directors’ Effectivenessscale of 300 billion yen. In line with the medium-term management plan JGP2025, formulated in May 2021 and covering the five-

The Board of Directors continues to enhance its functions by conducting an annual questionnaire-based analysis and evaluation.

year period beginning fiscal 2021, we will promote business activities based on the following four basic policies: 1) Towards the

The following is a summary of the analysis and evaluation for fiscal 2021.

unprecedented general manufacturer of plastic processing machinery in the world, 2) Make constant profit in the Material andEngineering Business, 3) Create new core businesses, and 4) Implementation of ESG management.

1

From this perspective, we believe it is important to ensure that the Board of Directors has the diverse experience and capabilities
necessary for promoting JGP2025’s four basic policies. To that end, we have prepared a skills matrix as one selection criterion for
director and Audit & Supervisory Board member candidates.
For information on the skill matrix, please refer to p. 52-53.

Reasons for Appointment of Outside Directors
JSW believes that the function and role of outside directors in corporate governance is to strictly supervise the execution of duties
by directors and to make management judgments and decision-making from a neutral and objective standpoint with no conflict ofinterest with the Company, and from an independent standpoint with no risk of conflict of interest with general shareholders.
To that end, the Company has appointed three outside directors.
The roles expected of outside directors are stipulated in the Corporate Governance Policy.
For information on the Corporate Governance Policy of The Japan Steel Works, Ltd., please refer to the following.
https://www.jsw.co.jp/pdf/sustainability/governance/governance/GovernancePolicy_en.pdf

Succession Planning for the President and Procedures for Appointment and Dismissal
1
Formulation and Implementation of Succession Plan for the President
	With respect to the formulation and implementation of the succession plan for the president, the Nomination Advisory Committee
holds appropriate discussions, considering the qualities of the candidate, such as experience, ability and character, based on thecorporate philosophy of JSW Group and management strategies, and reports to the Board of Directors as necessary.

Questionnaire content
I.	Composition, discussion, and monitoring functions of
the Board of Directors
II. Performance of inside and outside directors
III.	Support system for directors and Audit & Supervisory
Board members
IV. Training
V.	Dialogue with shareholders (investors)
VI.	Self-evaluation by each director and Audit &Supervisory Board member
VII.	Management of the Nomination Advisory Committee
and Remuneration Advisory Committee
VIII.	Miscellaneous (pertaining to the Board of Directors ingeneral)2
Appointment Criteria and Procedures	The appointment of the president is decided by the Board of Directors after receiving a report from the Nomination Advisory
Committee based on the succession plan.
3
Dismissal Criteria and Procedures	Dismissal of the president is decided by the Board of Directors if circumstances make it difficult for the president to carry out hisor her duties.

Support for Outside Directors and Officer Training
1

Support for Outside Directors

	For the purpose of deepening their understanding of JSW Group, outside directors are provided with information on the Group’sbusiness, finances, organization and other topics at appropriate times after assuming office. In addition, the General Affairs
Division at the head office serves as the secretariat for the monthly meeting of the Liaison Council of Outside Officers, which
provides outside officers including Outside Audit & Supervisory Board members, with advance briefings on matters to be resolved
or deliberated at meetings of the Board of Directors, reports on the state of operations and important management matters of
the Company and its Group, and provides opportunities for question-and-answer sessions. They also attend the president's
report meetings at each plant twice a year where they are given the opportunity to observe work on-site and meet with plant
management. Moreover, outside officers also receive materials at least three days prior to Board of Directors meetings, separate
to the aforementioned advance briefings provided at meetings of the Liaison Council of Outside Officers.

48 JSW Integrated Report 2022

Analysis and Evaluation Methodology(1) During March 2022, an anonymous questionnaire wasadministered to all directors and Audit & Supervisory
Board members. In light of the June 2021 revision of the
Corporate Governance Code, the survey questions wererevised to focus on evaluations of the monitoring functionsof the Board of Directors. The planning of the subjects
covered and the collection and tabulation of the survey
results were outsourced to a third-party organization.
(2) The Board of Directors Secretariat recompiled and analyzed
the results of the questionnaire, comparing them withthe previous evaluations, identifying subjects given low
evaluations, confirming differences in evaluation by officer
type (i.e., inside directors, outside directors, inside Audit &Supervisory Board members, outside Audit & Supervisory
Board members) and by individual, and extracting
important comments from the open-ended responses.
(3) At the May and June 2022 Board of Directors meetings,
the board discussed its effectiveness from the perspectiveof improving the medium-to-long-term corporate value ofthe entire Group, based on the re-tabulation and analysis of
the results of the questionnaire by the Board of Directors
Secretariat and advice from a third-party organization.

2

Results of the FY2020 Analysis and Evaluation Results

and an Overview of the Resultant FY2021 Initiatives
	In response to the three issues identified in the fiscal 2020
effectiveness evaluation, the Board of Directors proceeded
forward with the following actions in fiscal 2021. As a result,the effectiveness evaluation for fiscal 2021 confirmed that
improvements have been steadily made for each of the issues
and that effectiveness has been generally ensured.
   (1) S ufficiently discussing management strategies forsustainable growth and enhancement of corporate value
over the medium to long term			 Subjects that merit discussion from a medium-to-longterm perspective were incorporated into the Board of

Directors meeting schedules as appropriate for the timingof broaching each subject. In addition to the types ofresolutions and reports normally included in the agenda, avenue for deliberation was established to provide a forum
for free discussion of medium-to-long-term strategies,
and sufficient time was reserved for discussion of theformulation of medium-term management plans andbusiness portfolio management.
   (2) Addressing ESG issues and reflecting them in management
strategies
			In the process of drafting the integrated report, ESG
issues were identified and deliberated on, and progress
was observed in terms of success in considering our basic
sustainability policy and talent development strategy.
   (3) P roviding the necessary training opportunities for officers
			 Inviting outside lecturers, study sessions were held as avenue for the acquisition of the knowledge that officers
need to fulfill their roles and responsibilities. In fiscal 2021,
a total of three sessions were held featuring subjects suchas sustainability management and TCFD disclosure.
3
	
Future Initiatives Based on the FY2021 Analysis and

Evaluation Results
 ased on the results of the effectiveness evaluation in fiscal
B
2021, the following have been identified as the major issues
to be addressed in fiscal 2022.
(1) Deeper discussions at the Board of Directors meetings towork toward sustainable growth for the Group			Since evaluation revealed the need for more extensive
discussions on important management issues such as
formulating the Purpose, the promotion of sustainability,
and assuring diversity, we will delve deeper into discussion
by systematically providing multiple venues for dialogue on
high-priority subjects.
   (2) Close scrutiny of the progress being made by the mediumterm management plan JGP2025 amid changes in thebusiness environment			 Since evaluations identified that the medium-term
management plan should be aligned in a timely fashion todeal with a rapidly changing business environment, the degreeof progress made by business-specific strategies will beclosely scrutinized and the plan will be revised as necessary.
   (3) U pgrading of risk management that includes a review of
the quality control system			 Since evaluations identified that it would behoove theCompany to further enhance its awareness of andsensitivity to risks and opportunities, the Company will firstwork on the review of the quality control system, which
is a top priority, and then establish a group-wide risk
management system.

JSW Integrated Report 2022 49

Officers’ Remuneration

management measures to contribute to businessperformance, the restricted transfer period that had
previously been set at three years in line with themedium-term management plan term was changed to
five years in accordance with the five-year length of themedium-term management plan JGP2025.

The Company’s policy for determining the directors’ remuneration (the “policy for determining”) was resolved at the Board of
Directors meeting held on March 16, 2021, and was partially revised at the Board of Directors meeting held on March 23, 2022, withthe aim of improving incentives for achieving the medium-term management plan JGP2025. In accordance with the revision, theCompany revised a part of the officers’ remuneration system, focusing on the evaluation method related to variable remuneration.
(Outline of the revision of the policy for determining and review of the officers’ remuneration system)
As a result of the revision of the policy for determining and the review of the officers’ remuneration system, the variable
remuneration portion of annual remuneration, which previously consisted solely of remuneration linked to divisional performanceand results, was partially changed to be linked to company-wide performance. In addition, the percentage of fixed remuneration
was reduced for the representative director & president, and a portion of the bonus evaluation was changed from being linked todividends to incorporating individual performance results. These changes were designed to increase short-term incentives.

1
Basic Policy for Directors’ Remuneration
	The maximum amount of directors’ remuneration is decided
by resolution of the General Meeting of Shareholders. The
basic policy is to set remuneration that provides soundincentives for sustainably enhancing corporate value, at alevel corresponding to respective roles and responsibilities,
and that ensures fairness and transparency in remunerationrelated decision processes.
2
Procedures for Determining Directors’ Remuneration
	The directors’ remuneration is determined by the Board of
Directors after receiving a report from the Remuneration
Advisory Committee. However, the allocation of annual
remuneration by position and by individual and the allocationof bonuses by individual may be delegated to the president
by resolution of the Board of Directors. In this case, thepresident makes decisions in accordance with the content
of the report.
3
Composition of Directors’ Remuneration
	The composition and percentage breakdown of directors’
remuneration are as follows   (1) R epresentative director & president and representative
director & executive vice president			The composition shall be annual remuneration ((1) baseportion, (2) company-wide performance-linked portion)and stock-based remuneration.
			The president’s remuneration comprises an approximate
55:35:10 ratio of fixed remuneration ((1) base portion) :variable remuneration ((2) company-wide performancelinked portion) : stock-based remuneration. For the vicepresident, the approximate ratio is 60:30:10 of fixed
remuneration ((1) base portion) : variable remuneration((2) company-wide performance-linked portion) : stockbased remuneration.
   (2) Inside directors
			The composition shall be annual remuneration ((1) baseportion, (2) company-wide performance-linked portion, (3)divisional performance/results-linked portion), bonuses,
and stock-based remuneration. The approximate ratioof fixed remuneration ((1) base portion) to variable
remuneration ((2) company-wide performance-linked
portion, (3) divisional performance/results-linked portion,and bonus) to stock-based remuneration is 60:30:10.
   (3) Outside directors
			Outside directors, who are responsible for supervisory
functions, shall be paid only fixed remuneration (baseportion of annual remuneration) in consideration of
their duties.

35

10

Vice president

60

30

10

Inside directors

60

30

10

President

Outside directors

50 JSW Integrated Report 2022

55

100

(%)
Fixed
Variable
Shares4	Matters Relating to the Method of Calculation of
Directors’ Remuneration, Etc.
	The summary of each type of remuneration is as follows.
Variable remuneration is calculated by comparing actual
performance against the consolidated operating income,net income attributable to shareholders of the parent
company, and other indicators set forth in JGP2025 astargets for fiscal 2021, and multiplying the percentage ofachievement by the base amount of remuneration foreach position.
   (1) A nnual remuneration
		 1) Base portion
The base portion is fixed remuneration determined on
the basis of the particular position and the number ofyears the position has been held by the individual.
		 2) Company-wide performance-linked portion
The company-wide performance-linked portion isvariable remuneration that is determined on the basisof consolidated performance during each fiscal year. It
consists of a net income attributable to shareholdersof the parent company and a consolidated operating
income portion. This indicator was selected because of
its importance in terms of indicating how performance
directly links to the company-wide performance targets
in the medium-term management plan.
		 3) Divisional performance- and results-linked portion
The portion linked to divisional performance and results
is determined as variable remuneration based on theperformance evaluation of the division for which thedirector is in charge.
   (2) Bonuses			Bonuses are variable remuneration determined on thebasis of the performance evaluation of the division forwhich the director is in charge and the performance
results of each individual.
			The ratio of the performance evaluation portion for eachdivision and the performance evaluation portion for eachindividual is 50:50. However, directors in charge of head
office divisions receive only the individual performance
portion.
   (3) Stock-based remuneration
			Stock-based remuneration is granted in the form of
restricted transferable shares as remuneration for the
purpose of providing medium-to-long-term incentives
to increase corporate value and to further the sharingof value with shareholders. The number of shares tobe allocated shall be the number of shares obtainedby dividing the standard amount by position according
to the director’s position by the closing price of theCompany’s shares on the Tokyo Stock Exchange on
the day before the date of resolution by the Board of
Directors regarding the execution of the restricted stock
remuneration allocation agreement.
			In consideration of the period of time it takes

5	
Remuneration for Audit & Supervisory Board
Members, Etc.
	The remuneration of each Audit & Supervisory Board member
shall consist only of fixed remuneration (base portion ofannual remuneration) from the viewpoint of emphasizing
independence and objectivity with respect to management.

Group Governance
JSW Group consists of The Japan Steel Works, Ltd. and46 subsidiaries (33 consolidated, 13 non-consolidated). The
Group operates the Industrial Machinery Products Business,
Material and Engineering Business, and other businesses inJapan and around the world.
For Group companies, the JSW business division withprimary responsibility leads the formulation of management
policies and short- and medium-term management plans, andmonitors their progress. In order to enhance the effectivenessof these efforts, we assign full-time or part-time directors or
Audit & Supervisory Board members with the responsibilityof supervising and auditing the execution of duties at specificGroup companies, in principle, thereby ensuring that theexecution of duties by directors, etc., and employees at Group
companies comply with laws and regulations and the Articles
of Incorporation. In addition, regarding risks relating to specificfunctions, such as health and safety, environmental management,
and export control administration, each Group company
participates in the various committees formed by the relevant
divisions of the Company, or follows the regulations developedby the Company, and appropriately manages these risks.

In addition, each company in the Group appoints individuals
to be in charge of general affairs, accounting, and IT mattersrelated to internal control. The appointed individuals receive
guidance and training from the Internal Control Committee
Office and conduct self-assessment of implementation andoperation of internal control in step with risk assessment. The
status and results of the self-assessment of internal control
operations are reported to the Office and each company. In
response, the Internal Audit Division of the Company, which
also serves as the Office of the Internal Control Committee,
monitors the governance and risk management status of eachcompany by directly or indirectly auditing the status of eachcompany and the methods and results of self-assessments.
With regard to internal control over quality assurance
processes at Japan Steel Works M&E, Inc., the Company
is promptly implementing its reorganization, includingorganizational reforms to strengthen mutual checks andbalances among divisions and eliminate the concentration of
authority, moving ahead with operations and assessments
under the guidance and management of the Company.

Cross-Shareholdings
1

Policy on Cross-Shareholdings

The Company holds shares that it judges, through regular confirmation and review, to be necessary for policy
purposes, and that contribute to the Company’s businesses over the medium to long term in ways suchas maintaining and strengthening sound, ongoing relationships with business partners, forming businessalliances, and supporting the sound development of investee companies.
Each year, the Company confirms the purpose of individual cross-shareholdings and current transaction2
	Regular Confirmation and Review status, etc., and the Board of Directors verifies whether shareholdings are appropriate by comprehensively

considering the significance and purpose of the Company’s acquisition and holding of the shares, as well as
the safety, profitability, economic viability, risks and other factors associated with the shareholdings.

of Shareholdings

The Company makes decisions on the exercise of voting rights based on factors including the businessconditions of the investee company and its business relationship with the Company, having confirmed thedetails of each proposal from the standpoint of increasing the investee company’s corporate value over the
medium to long term and fulfilling that company’s social responsibilities.

3	
Policy on Exercise of Voting

RightsStatus of Holdings
Number of Listed and Unlisted Stocks Held; Market Value of
Cross-Shareholdings on Balance Sheet ÷ Consolidated Net Assets
Number of stocks held (left axis)
Market value of stocks ÷ Consolidated net assets (right axis)(Stocks)

100
80
60

(%)

90
28.3

40

88

50

85
69

21.6

15.5

16.9

20

40

62
12.3

0

30
20
10
0

2017

2018

2019

2020

2021

(FY)

Based on the Corporate Governance Policy of The Japan SteelWorks, Ltd., we regularly confirm and review the significanceof our policy cross-shareholdings, and we are gradually sellingshares whose significance has diminished.
In addition, setting forth in our medium-term management
plan JGP2025 the financial strategy of ensuring an appropriatebalance between investment in growth and shareholder returns
in order to sustainably increase corporate value, the Company
plans to reduce its cross-shareholdings to less than 10% of
net assets, and to allocate the funds obtained from the sale ofcross-shareholdings into areas such as investment growth andshareholder returns.
JSW Integrated Report 2022 51

Management Team (As of June 30, 2022)
Directors / Audit & Supervisory Board Members

NameToshio Matsuo

Junichiro Deguchi

Hiroki Kikuchi

Shingo Mito

Shigeki Inoue

Sadao Degawa

Yoshiyuki Nakanishi

Hisao Mitsui

Toru Nishiyama

Hiroyuki Shimizu

Fumihiko Tanizawa

Hiroshi Misawa

Title

Representative Director &President

Representative Director &Executive Vice President

Director & Managing
Executive Officer

Director & Managing
Executive Officer

Director & Managing
Executive Officer

Director

Director

Director

Audit & Supervisory
Board Member (Full-Time)

Audit & Supervisory
Board Member (Full-Time)

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Apr. 1984 Joined the Company
Apr. 2013 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2015 General Plant Manager,
Hiroshima Plant
Apr. 2016 Executive Officer
Apr. 2017 Managing Executive
Officer; Director of Injection
Molding Machinery Business
Division; In charge ofHiroshima Plant
Jun. 2017 Director & Managing
Executive Officer
Apr. 2020 Representative Director& Executive Vice President;
In charge of Export Control
Administration; In charge of
Plastics Machinery Business
Division, Injection Molding
Machinery Business Division,
Industrial Machinery Business
Division; In charge of Meiki
Plant
Apr. 2021 In charge of OrdnanceBusiness Headquarters;
In charge of Business
Development Office; Incharge of Hiroshima Plant andYokohama Plant
Apr. 2022 Representative Director& President (current position)

Apr. 1981 Joined the Company
Apr. 2013 Deputy General Plant
Manager, Muroran Plant
Apr. 2015	 Executive Officer;
Deputy Director of SteelBusiness Division
Oct. 2017 General Manager,
Personnel Department
Apr. 2018 In charge of CSR &Risk Management (current
position); In charge of Export
Control Administration;
In charge of Health &Safety Management andEnvironmental Management(current position); In charge of
Secretary Office and General
Affairs Department
Jun. 2018 Director & Executive
OfficerJul. 2018 In charge of General
Affairs Department (current
position); General Manager,
Secretary Office
Apr. 2019 Director & Managing
Executive Officer
Apr. 2020 Chief Information
Security Officer; In chargeof Office of Information
Technology; In charge of
Personnel Department
Apr. 2021 In charge of Promoting
ESG (current position)
Apr. 2022 Representative Director& Executive Vice President(current position); In charge ofExport Control Administration(current position); In charge of
Personnel Department (current
position)
Jun. 2022	 In charge of Materialand Engineering Products
Business (current position)

Apr. 1985 Joined Mitsui Bank
(currently Sumitomo Mitsui
Banking Corporation)
Apr. 2012 General Manager,
Nihonbashi-higashi Corporate
Business Office, Sumitomo
Mitsui Banking Corporation
Apr. 2015 Joined the Company
Jul. 2015 General Manager,
General Affairs Department
Apr. 2016 General Manager,
Secretary Office
Apr. 2018 Executive Officer
Jul. 2018 General Manager,
Corporate Planning Office(current position)
Apr. 2020 Chief Financial Officer(current position), In chargeof Finance & Accounting
Department (current position);
General Manager, Business
Development OfficeJun. 2020 Director & Executive
Officer
Apr. 2021 Director & Managing
Executive Officer (current
position)
Apr. 2022 In charge of Plastics
Machinery Business Division,
Injection Molding Machinery
Business Division, OrdnanceBusiness Headquarters(current position); In charge ofIndustrial Machinery Business
Division; In charge of Business
Development Office

Apr. 1984 Joined the Company
Jul. 2006 General Manager,
Personnel Department
Jul. 2011 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2014 Deputy Director of
Machinery Business Division
Apr. 2016 Deputy Director of
Research and Development
Headquarters
Apr. 2017 Executive Officer
Oct. 2017 Deputy Director of
New Business Promotion
Headquarters
Apr. 2021 Director of New
Business Promotion
Headquarters (current position)
Jun. 2021 Director & Executive
Officer
Apr. 2022 Director & Managing
Executive Officer (current
position)

Apr. 1986 Joined the Company
Apr. 2015 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2017 General Plant Manager,
Hiroshima Plant
Apr. 2018 Executive Officer
Apr. 2021 Managing Executive
Officer; Director of Industrial
Machinery Business
Division (current position),
General Manager, Business
Development Office (current
position)
Apr. 2022 Chief Technology
Officer (current position); In
charge of Quality Management(current position); In chargeof Intellectual Property
Department (current position);
In charge of Yokohama Plant(current position)
Jun. 2022 Director & Managing
Executive Officer (current
position)

Apr. 1977 Joined IshikawajimaHarima Heavy Industries Co.,
Ltd. (currently IHI Corporation)
Jun. 2009 Director and Executive
Officer, IHI Corporation
Apr. 2011 Director and Managing
Executive Officer,
IHI Corporation
Apr. 2012 Executive Vice
President, IHI Corporation
Oct. 2015 Executive Vice
President and Senior Executive
Officer, IHI Corporation(–Mar. 2016)
Apr. 2016	 Director, IHI
Corporation (–Jun. 2016)
Jun. 2016 Advisor, IHI Corporation(–Jun. 2020)
Outside Director, Nishishiba
Electric Co., Ltd. (–Mar. 2020)
Jun. 2018 Director, the Company(current position)

Apr. 1978 Joined Dainippon Ink
and Chemicals, Incorporated(currently DIC Corporation)
Apr. 2010 Executive Officer, DIC
Corporation
Jun. 2011 Director and Executive
Officer, DIC Corporation
Apr. 2012 Representative
Director, President and CEO,DIC Corporation (–Dec. 2017)
Jan. 2018 Chairman of the Boardof Directors, DIC Corporation(–Jan. 2021)
Jun. 2020	 Director, the Company(current position) Outside
Director, IHI Corporation(current position)
Jan. 2021 Director, DIC
Corporation (–Mar. 2021)
Mar. 2021 Executive Advisor, DIC
Corporation (current position)
Jun. 2021 Outside Director,
Shimadzu Corporation (current
position)

Apr. 1978 Joined Kao Soap Co.,
Ltd. (currently Kao Corporation)
Jun. 2006 Executive Officer, Kao
Corporation
Jun. 2010 Director and Executive
Officer, Kao Corporation
Jun. 2012 Director and Managing
Executive Officer, Kao
Corporation (–Mar. 2014)
Apr. 2015 Auditor, National
Institute of Technology and
Evaluation (–Jun. 2019)
Jun. 2020 Director, the Company(current position)
Outside Auditor, LiveDo
Corporation (current position)

Apr. 1982 Joined the Company
Sep. 2011 Deputy General
Manager, Corporate Planning
OfficeApr. 2015 Deputy General Plant
Manager, Muroran Plant
Apr. 2017 Executive Officer
Oct. 2017 Deputy General
Manager, Technological
Strategy Office
Apr. 2018 General Manager,
Internal Auditors OfficeJun. 2019	 Audit & Supervisory
Board Member (Full-Time)(current position)

Apr. 1984 Joined the Company
Oct. 1998 Houston Office
ManagerJun. 2008	 Nagoya BranchManager
Sep. 2015	 Deputy General
Manager, Corporate Planning
OfficeApr. 2017 Kansai BranchManager
Apr. 2019 Deputy Directorof Machinery Business
Division (Sales Management
Supervisor)
Apr. 2020 Representative
Director, President and CEO of
GM Engineering Co., Ltd.
Jun. 2022 Audit & Supervisory
Board Member (Full-Time)(current position)

Apr. 1976 Joined Mitsui Bank
(currently Sumitomo Mitsui
Banking Corporation)
Jun. 2003	 Executive Officer,
Sumitomo Mitsui Banking
Corporation
Oct. 2006 Managing Executive
Officer, Sumitomo Mitsui
Banking Corporation(–Mar. 2009)
Apr. 2009	 Senior Managing
Executive Officer, Sumitomo
Mitsui Financial Group, Inc.
Jun. 2009 Senior Managing
Director, Sumitomo Mitsui
Financial Group, Inc.
(–Jun. 2010)
Jun. 2010 Representative
Director, Executive Officer andExecutive Deputy President,
SMBC Friend Securities Co.,
Ltd. (currently SMBC Nikko
Securities Inc.) (–Mar. 2012)
Dec. 2012 Representative
Director, President andExecutive Officer, Horai Co.,
Ltd. (–Dec. 2019)
Jun. 2015 Outside Audit &Supervisory Board Member,
Sotetsu Holdings, Inc.
(–Jun. 2019)
Jun. 2019 Audit & Supervisory
Board Member, the Company(current position)

Apr. 1981 Joined The Mitsui Trustand Banking Company, Ltd.
(currently Sumitomo Mitsui
Trust Bank, Limited)
Jul. 2008 Executive Officer,
Chuo Mitsui Asset Trust andBanking Company, Limited.
(currently Sumitomo Mitsui
Trust Bank, Limited)Feb. 2011 Managing Executive
Officer, Chuo Mitsui Asset
Trust and Banking Company,
Limited.
Apr. 2012 Managing Executive
Officer, Sumitomo Mitsui Trust
Bank, Limited
Jul. 2012 Advisor, Sumitomo
Mitsui Trust Bank, Limited(–Sep. 2012)
Oct. 2012 Director and Vice
President, Sumitomo Mitsui
Trust Asset Management Co.,
Ltd. (–Mar. 2016)
Apr. 2016 Audit & Supervisory
Board Member, Sumitomo
Mitsui Trust Bank, Limited(–Mar. 2017)
Apr. 2017 Advisor, Sumitomo
Mitsui Trust Bank, Limited(–Jun. 2017)
Jun. 2017 Deputy Chairman of theBoard of Directors, Directorand Audit & Supervisory
Committee Member,
Sumitomo Mitsui TrustHoldings, Inc. (–Jun. 2019)
Jun. 2019	 Audit & Supervisory
Board Member, Sumitomo
Mitsui Trust Business Service
Co., Ltd. (–Mar. 2021)
Jun. 2020	 Audit & Supervisory
Board Member, the Company(current position)
Apr. 2021 Advisor, Sumitomo
Mitsui Trust Business Service
Co., Ltd. (current position)

3,946 shares

0 shares

255 shares

7,421 shares

18/18 (100%)

18/18 (100%)

18/18 (100%)

18/18 (100%)CareerNumber of shares of the Company held

17,733 shares

15,612 shares

9,347 shares

13,043 shares

Record of attendance at Board of Directors
meetings (FY2021)

18/18 (100%)

18/18 (100%)

18/18 (100%)

14/14 (100%)

Committee

9,003 shares—

Nomination Advisory Committee(Chair)Remuneration Advisory
Committee(Chair)2,426 shares—

0 shares

1,077 shares

18/18 (100%)

18/18 (100%)(Advisor)(Advisor)

Corporate Management
Finance and Accounting
Sales and Marketing
Manufacturing, Quality Control,
Technology and R&D
Skill Matrix

Environment
Personnel and Human Resource
Development
Legal, Compliance and Risk
Management
Information Systems and Digital
Transformation

Executive Officers

Takashi Iwamoto

Seiji Umamoto

Yoshitaka Sato

Shoji Nunoshita

Takeshi Shinmoto

Motoyuki Shibata

Masayuki Aoyama

Hidenao Kudo

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

52 JSW Integrated Report 2022

JSW Integrated Report 2022 53

Message from an Outside Director
Risk Management

Promoting Fundamental
Reforms and Initiatives toAddress Challenges to Realize
the Purpose

Basic Approach
The Company and its Group companies have an important responsibility to minimize risks affecting the Group, ensure the ongoingdevelopment of the Group, and thoroughly fulfill their social responsibilities by appropriately and effectively managing various risks.

Sadao Degawa, Outside Director

Framework allying the Group Together as One to Enact Reforms thatR
Prevent Recurrence
I see the inappropriate conduct in quality inspections at Japan
Steel Works M&E, Inc. as an incident that should have nevertaken place, and as an outside director overseeing managementof the Group, I take it very seriously. I offer my heartfelt apology
for any inconvenience and concern this may have caused to ourstakeholders. In response to the findings and recommendations of
the Special Investigation Committee, we have conducted an analysis
that probes into even the background of the matter. We thenrepeatedly discussed preventive measures to ensure compliancewith all laws, contractual provisions, and internal regulations, as we
maintain and improve our delivery of products of unparalleled quality,
a tradition we have upheld since our founding. I too have mademany proposals for reform in my capacity as an outside director.
The Purpose and Materiality that were announced in November
2022 represent the very fruition of the thoughts and feelings thisincident provoked in all of us.
It bears noting here that, as the Special Investigation Committee
pointed out, in order to prevent a recurrence we must reform theorganization so that a system of checks and balances is put in place,while also cultivating a commitment to compliance through theeducation and training of our employees. Nevertheless, it will taketime for all employees to gain the proper understanding that enables
them to thoroughly act on these measures and for an accompanying
company culture conducive to such practices to take hold.
To accelerate reform, in addition to these measures, it will benecessary to incorporate the right kind of inspections into thebusiness process so that they are mandatory rather than performedat the discretion of individuals. Specifically, it would be a more
effective way forward to incorporate into the business process asystem in which there is planning of product inspection schedules,
inspection items to be covered, costs, and personnel assignments atthe time any and all product order are received, with accompanying
monitoring and follow-up. I believe that this practice should be begun
as early as possible in parallel with the establishment of the systemitself as well as reforms to the company culture.
Though the trust of customers and other stakeholders, not tomention the general public, can be lost in a moment, it takes a great
deal of time to gain that back.
I hope that this matter has served as a wake-up call for all officers
and employees of the Group, and provides an excellent opportunity
for the entire Group to rally together as one and promote theproper reforms.
 aking on Challenges with an Eye toward
T
Further GrowthWith the appointment of representative director & president Toshio
Matsuo in April 2022, many changes have taken place on thegovernance front.
In establishing the Purpose and Vision that were announced in
November 2022, the Board of Directors spent over six months
holding a variety of discussions about how to achieve consistency
with the history of the Company and management philosophy, while
maintaining a bird’s-eye view of the Group as a whole and basedon the perspectives required for consideration. Via the exchanges ofmany an opinion, I believe that we were able to arrive at a laudable
Purpose that well summarized the thoughts and feelings shared by
54 JSW Integrated Report 2022

the members of the Board of Directors.
The major changes in the organizational structure were
the discontinuation of participation by outside directors in the
Executive Board and the Management Council, the narrowing ofdown the number of bodies whose meetings they attend, andfurther clarification of the division of roles between execution andsupervision. As a result, there are now more opportunities for insidedirectors to speak at Executive Board of Directors meetings than
before, which has made for discussions that are more animated.
At the same time, the Liaison Council of Outside Officers was newly
established in April 2022. By offering all outside officers not onlya preliminary briefing about what is to be discussed at the Boardof Directors meetings, but also reporting to them on the details of
discussions by the Executive Board and Management Council,
and then having them hold discussions, the aim of this council is topromote a greater understanding of the status of business execution.
The outcome of this has led to the deepening of discussions at
Board of Directors meetings.
Regarding the composition of the Board of Directors, the numberof inside directors was reduced by one, and three of the eight
directors are now outside directors, increasing the percentage
of outside directors from 33.3% to 37.5%. At the same time, itwill be important to further increase the depth of the Board of
Directors from the perspectives of both skills and human resources.
Though bolstered global expansion will be essential for the Groupto achieve further growth, I feel that the organization is lacking inpersonnel with expertise in global marketing. Also needed is a boost
in personnel with skills in legal affairs, compliance matters, anddigital transformation, which seems to me to necessitate both therecruitment of candidates for executive positions from outside thecompany and the development of internal personnel.
Regarding management of the Board of Directors, I feel that there
are two issues that need to be addressed. The first is that insidedirectors currently also serve as executive officers, which makes
for comments that are skewed toward their respective areas of
responsibility. I believe that deeper discussions can be brought about
by increasing the number of directors who speak from a companywide management perspective. Another issue to tackle is the lackof discussion about risk. The response taken for the inappropriate
conduct can indeed be described as a part of risk management,
but there is also a separate need to discuss in greater depth thanat present the prospective risks and consideration of potential
countermeasures that accompany transactions with new customers
and in new countries and areas reached by business expansion.
By making all directors more strongly aware of working basedon a monitoring board model, we hope to strengthen our ability torespond to all risks, not just the instance of inappropriate conduct
dealt with this time.
The Group’s performance is currently solid. Beyond that, I hope
to see our efforts accelerate so rather than just sow the seeds of
new business, we germinate and see sprouting of the seeds ofbusinesses that will be new pillars for us over the next decade.
In order to realize the Material Revolution™ that is our Purpose
and create one-of-a-kind businesses unmatched by any othercompany, it is incumbent on us to pursue discussions that are selfdirected and animated. As an outside director, I will do my utmost to
provide support toward that end in ways such as offering advice andmonitoring management affairs.

The Group has established JSW Group Risk Management
Regulations, which clearly stipulate that the Company and Group
companies manage risks in accordance with their respective
management structures and division of duties, and that all
employees, from officers to general employees, are responsiblefor implementing appropriate and effective risk management inaccordance with their respective roles. In addition, the Company
has appointed a director in charge of risk management (CRO),
who oversees risk management of the Company and Group
companies while also assessing the internal control of eachmanagement structure. Also, to deal with risks by divisional
function, divisions such as those in charge of health and safety,
environmental management and export control management
are each conducting appropriate operations through steps suchas forming committees or putting in place regulations from acompany-wide, cross-sectional perspective.
Regarding the status of company-wide risk management, theInternal Control Committee (Chairperson: Director in charge of
Risk Management (CRO)) shares information on potential andemerging key issues, including the identification and evaluationof risks, and, when necessary, discusses risk responses andspecific initiatives, and gives instructions or guidance to relevant
departments as appropriate.
The Internal Audit Division, which also serves as the office of
the Internal Control Committee, directly or indirectly monitors
the management status of risks of each division (management
structures) and each committee, and reports to the Board of
Directors or the Executive Board. The main risks and the status ofinitiatives are duly disclosed in the annual financial report and on
the website.
In the event of a major accident, disaster or any other riskthat could cause serious damage to JSW Group, the Crisis

Management Headquarters, led by the director in charge of risk
management, is promptly established to offer response. As the
COVID-19 virus spread during the period from fiscal 2020 to fiscal
2021, a Crisis Management Headquarters was set up to provide
functions such as ascertaining the health status of employees,
establishing a telecommuting system and offering response to
those infected.
In fiscal 2021, it was revealed that inappropriate conduct inquality inspections by Japan Steel Works M&E, Inc. had takenplace (see p. 30 of this report). As this was the case of an
operational misconduct risk that manifested itself in the quality
assurance process, work will be done to prevent a recurrence bystrengthening operational processes and management systems toensure that operations are conducted in a proper andefficient manner.
In addition, in November 2022, a new corporate groupphilosophy system was established and six key issues wereidentified as Materiality that should be prioritized in order torealize our Purpose. Materiality comprises the two perspectivesof “creating value and solving social issues through JSWGroup’s businesses” and “bolstering JSW Group’s managementfoundation for sustainable growth.”
From these two perspectives, we will encourage awarenessthat there are both risks for the sake of sustainable growth thatshould be taken actively and risks that should never be taken,
even if for the sake of making profits. We will work to develop an
operational system and framework, as well as a culture of taking
risks, that give license to actively take the former type of risks
under appropriate risk management controls, while minimizing thelatter kind of risk. We believe that fostering this culture of taking
risks advisedly and renovating our corporate culture will also leadto the prevention of the recurrence of inappropriate conduct.

Risk Management Framework
Board of Directors and Executive Board
Reporting

Evaluation and auditing

Internal Audit Division

Indirect monitoring

Internal Control Committee(Chairperson: Director in charge of Risk Management)

Discussion and decision-making,instructions and guidance, information
sharing, etc.

Evaluation, corrective action, etc.

Various committees, etc.
Information sharing andreporting of processing results
Evaluation and auditing

Head Office divisions, business divisions and plants
Monitoring, evaluation and guidance
Self-assessments

Group companies

JSW Integrated Report 2022 55

The Group recognizes the importance of updating systems
that contribute to enhanced competitiveness in these rapidlychanging times. This is seen in developments such as the
improvement of operations through digital transformation andthe construction of system environments that enable datadriven decisions that are rapid and highly accurate.
The Group is offering and promoting a Digital Transformation
Promotion Project (D-Pro) in order to build toward thefollowing vision.
1* Relevant laws and regulations: Laws and regulations regarding the environment,
Industrial Safety and Health Act, Financial Instruments and Exchange Act, laws
and regulations regarding export control administration, laws and regulations
regarding competition, laws and regulations regarding bribery, and Whistleblower
Protection Act

2

The Company is implementing the following measures to further enhance compliance awareness.
• Regular training sessions at plants, sales locations (branches and sales offices), and domestic JSW Group companies are held
regularly by JSW’s legal department.
(In fiscal 2021, training was held at the Japan Steel Works M&E Muroran Plant and Kyushu Business Office)• Training sessions for Head Office business divisions are conducted (as needed) by JSW’s legal department.
(In fiscal 2021, training on the theme of confidentiality agreements was conducted at the New Business Promotion Headquarters)• E-learning for JSW employees and Group company officers and employees was offered to enhance compliance awareness andensure thorough risk management. (In fiscal 2021, held once with a 99% participation rate)• Harassment awareness videos, which are required viewing by managers (and can also be viewed by general employees), arestreamed on the company intranet, a development prompted by a revision to the whistleblowing rules.
• Diverse information and articles on compliance awareness raising are posted on the company intranet noticeboard, in posters and in
the company newsletter.
• E-learning was provided for employees of the Company and Group companies to ensure compliance with laws, regulations andinternal rules on export control administration (In fiscal 2021, held once with a 100% participation rate)• Internal mock examinations, preparatory courses for examinations and e-learning were provided to increase the number of current
employees who have passed the export control administration practical skills certification examination.

Whistleblowing System
JSW Group has formulated whistleblowing rules for the
purpose of strengthening and promoting compliancemanagement, and has established a system for the proper
handling of reports and consultations from employees andothers regarding potential organizational or individual violationsof laws and regulations that may have been committed
by employees or others associated with JSW or Group
companies. This enables JSW Group to promptly detect
potential violations of laws and regulations and take corrective
action, thereby minimizing risk and damage to the Group thatwould otherwise arise from such a violation. The inappropriate
conduct in quality inspections by Japan Steel Works M&E,
Inc., announced on May 9, 2022, (see p. 30 of this document)
was prompted by an internal report issued in late February
2022. The system is thus functioning effectively in accordancewith its purpose.
Anonymous reports and consultations are acceptedand disadvantageous treatment of persons who makereports or seek consultation is prohibited. In the event of
disadvantageous treatment received, the Company will
respond with appropriate measures, including disciplinary
action. In October 2021, the whistleblowing rules wereamended so that the contact point for whistleblowing waschanged to external specialists in order to ensure greater
56 JSW Integrated Report 2022

protection for the confidentiality of whistleblowers andindividuals with whom they consult, while also reducing thepsychological burden of whistleblowing. Furthermore, in orderto facilitate further awareness of the whistleblowing system toreach even Group subsidiaries as well, we display the manualon internal workplace bulletin boards and have distributed apocket version of the manual that employees and others canrefer to at any time.
The Whistleblowing Committee, chaired by the director in
charge of risk management, investigates reported cases, andif a problem is identified, the committee will take appropriate
action and implement corrective measures. During thisprocess, the office of the Whistleblowing Committee andAudit & Supervisory Board members share information as
appropriate, while the Audit & Supervisory Board members
monitor the progress made in individual cases and the statusof operation of this system. In principle, the Board of Directors
confirms proper operations of the whistleblowing system
twice a year, as based on reports from the Committee.
The number of reports made was 14 in fiscal 2020 and
31 in fiscal 2021, most of which were consultations about
workplace environment, including instances of harassment.
Reports were investigated by the Committee andappropriately addressed.

4Improve operational efficiency by digitizing
routine tasks, transitioning to paperless
operations and enabling remote work.
F acilitate digital transformation (i.e., business
transformation leveraged by digital technology)
to expand business through organizations for
digital transformation promotion.

Board of Directors

Progress reports twice a year

Management
Alignment of management
strategy with digitaltransformation and strategy

Corporate divisions
anttees d taskmim
D-Pro Office

Manufacturing management
digital transformation

Business management,
accounting, general affairs,
HR digital transformation

Office of Digital
Transformation

Business divisions
Sales and sales management
digital transformation

Affiliated companies,
overseas offices

Overall project management
Budget management• Progress management••coPromotion of Compliance TrainingIntegrate and revamp core systems to reduce
maintenance costs and promote value-enhancing
investments.

Digital Transformation Promotion Structure Chart

Sub

3

R
 econfigure the information network into a data
lake to facilitate data-driven management thatshares and analyzes data.

As of July 1 2022, the Office of Digital Transformation (seechart below) was established to promote D-Pro. Positioning
the period through fiscal 2025 as Phase 1, the office has
formulated an action plan that includes the renewal of thecorporate culture and is promoting activities ineach subcommittee.

fo
rce
s

to ensure quality compliance and prevent the recurrence of
inappropriate conduct.
Regarding compliance with codes such as laws andregulations, and internal rules, on a regular or as-neededbasis, the Internal Auditors Office audits the overall operationsof JSW, and reports the results to the representative director& president, as well as to the Board of Directors, the Executive
Board or the Management Council, and other relevant parties,
including Audit & Supervisory Board members. In fiscal 2021,
there were no violations of relevant laws and regulations* that
resulted in fines or penalties.

s
rce
fo

JSW Group has established its Standards of BusinessConduct and engages in business activities in compliance withethics, laws and regulations, and international rules in bothletter and spirit. The Group will continue to conduct businessactivities based on the understanding that compliance is not
only legal compliance, but also includes adherence to internal
rules and contracts, and is an important element for building a
relationship of trust with society as well as a fundamental driverfor increasing employee engagement.
In addition, the Board of Directors has decided on the Basic
Policy on Internal Control and is developing internal control
systems. Recognizing the importance of the proper operationof these systems, the Internal Control Committee regularly
reports on matters relating to internal control and its progress.
The Group will also review its Basic Policy on Internal Control

Digital Transformation PromotionSub
coCompliance

m

m

itte
e

s and taskDigital transformation for
information linkage
Consultancy,
IT vendor coordination

External partnercompanies

Plants

Office of Information Coordination and alignment ofsystem development, infrastructure
Technology
development, etc.

Information Security
Basic Approach
There is a continued increase in the importance of information and information systems in improving the efficiency of office work andproduction technology continues to increase, as well as speeding up decision-making. At the same time, threats such as information
destruction, leaks, and tampering and system destruction due to cyberattacks are increasing, and the risks associated with informationand information systems are on the rise. In this environment, in order to continue to maintain the satisfaction and trust of customers andto fully fulfill our role, we recognize that an important management challenge is to accurately identify information-associated risks andprotect both the information entrusted to us by customers and the information and systems necessary for us to do business.

Framework

Training

The Chief Information Security Officer (CISO), appointed byresolution of the Board of Directors, oversees information
security measures at JSW. Persons in charge of information
security management and information security administrators
are assigned at the Head Office and each plant. The Information
Security Committee, chaired by the CISO, comprehensively
discusses the status of information security incidents, recent
threats to information systems, the environment in which theCompany operates, and opinions and requests regarding theusability of various security measures, and conducts detailed
verification on a regular basis.
In addition, we are constantly working to maintain andimprove security while continuously evaluating the adequacyof countermeasures against various cyber-attacks based on
detailed analysis results from continuous monitoring data fromone of Japan's leading security vendors.

We conduct information security training (e-learning) for JSW
officers and employees to improve their security awarenessand literacy.

Participation Rate in Information Security Training (E-Learning)
Participation rate

Head Office ommittee members (each division)
CPersons in charge of information
security management• 
Information security administrators••

Each Plant ommittee members
CPersons in charge of information
security management• 
Information security administrators••

FY2020

FY2021100.0%

99.3%

100.0%

Evaluation by Third-Party Organizations
Diagnostic Assessments in Fiscal 2021
Assessment*

Results of evaluation

Information security risk
assessment—(Implemented with every major
system change)

Information leakage
communications assessment

Information leakage
communications assessment overallrating: A(no communications corresponding
to information leakage)

Structure of the Information Security Committee
Chair: Chief Information Security Officer (CISO)
Executive Office: Office of Information Technology, Head Office

FY2019* Assessments consist of intrusion inspections and vulnerability assessments ofcompany network systems, based on information security benchmarks andcarried out by security vendors with information security management system(ISO/IEC 27001) certification.
JSW Integrated Report 2022 57