To Build a Trusted Identity as a Contributing Member of the
Global Community

01

Contents / Editorial Policy

02

Message from Chairman

03

Yokohama Rubber Group at a Glance / Corporate Philosophy

05

CSR and Important Issues (Materiality) / Participation in initiatives in Japan and overseas /CSR and Environmental Management Promotion System

07

Message from the PRESIDENT

09

Dialogue with the Chairperson of the Board

11

Yokohama Rubber’s Tire Business and CSR

13

Yokohama Rubber’s MB (Multiple Business) and CSR

15

Creating Value through Our Businesses

16

Special Feature Yokohama Rubber’s Important Issues

17

For the Global Environment

19

Together with Local Communities

21

Together with Our Customers

23

To Our Stakeholders and Investors

25

Together with Our Business Partners

27

Together with Our Employees

29

Introduction of New Technology

31

ISO26000 Compliance Activity Report33

Response to Outside Experts’ Opinions/Third-Party Opinion

Editorial Policy
This report was created to share Yokohama Rubber Group’s policies, approach to CSR, orientation and performance with each of its stakeholders in a
concise and clear manner.
Within this report, you will find information about Yokohama Rubber Group’s stance toward achieving its vision of “to build a trusted identity as acontributing member of the global community” with an eye on 2017, when the company celebrates its 100th anniversary, and beyond.
Additional details of our activities can be found on our CSR website, which contains a host of information compliant with GRI Guidelines Ver. 4 about
the progress of Yokohama Rubber Group’s CSR activities. We invite you to review this website together with the print version.

Information Map Highlighting the information published on Yokohama Rubber’s corporate website
1 Products Information

1

2

3

4

Delivers information about product features andspecifications, including tires, industrial products, andsporting goods
2 Investor Relations

Presents investor relations information about management
plans, growth strategy and earnings
3 CSR

Provides information about ESG policies, activities andprogress
4 Corporate Information

Highlights the corporate philosophy, company profile andgovernance structure01

Corporate website

Message
Yokohama Rubber will celebrate its centennial in 2017. In thinking about the next 100 yearsof the company, I believe it is very important to think about our vision for 2050 and what weneed to do to accomplish this.
I want the Yokohama Rubber of 2050 to be an appealing company. This requires that weachieve stable, continuous growth globally and raise our profile internationally. In recent
years, manufacturers from emerging countries have grown stronger and industry
reorganization has become much more active. To maintain this identity as an appealing
company well into the future, we will also need to engage in value-added businesses and playa lead role in industry reorganization.
Aimed at our centennial in 2017, we have been implementing the medium-range
management plan Grand Design 100 (GD100) since fiscal 2006 to become a global company
with a unique presence in terms of both corporate value and market position. In addition to
our core business of supplying high performance, safe tires for automobiles, we have decided
to also focus on tires for vehicles used in agriculture, industry and disaster relief applications
through M&A. This will not only help us to achieve continuous growth, but also contributebroadly to society through our businesses.
Recently, I had the chance to talk with Ms. Nami Takenaka, Chairperson of Prop Station,a social welfare corporation helping people with disabilities participate in society (see page 9).
Simply having solid financial performance does not mean that society will respect you as acompany. You can question whether many companies are indeed contributing to society ornot. Whether a company employs and utilizes a diverse workforce, including people withdisabilities, women and foreign nationals, will have a major impact on that company’s future.
I want to make Yokohama Rubber to be a top five tirecompany globally by 2030. To achieve this, I will make surethat we have a diverse workforce that works well together toachieve continual growth. I will also ensure that we value
employees with broad perspectives and a unique presence.

Tadanobu Nagumo
Chairman and Representative Member of the Board

02

Yokohama Rubber Group at a Glance (as of December 31, 2015)
Company NameThe Yokohama Rubber Co., Ltd.

Number of Shareholders

12,501

Establishment

October 13,1917

169,549,081

Paid-in Capital

JPY 38,909 million

Net Sales

JPY 629,856 million

Number of Shares
Issued and Outstanding
Number of Consolidated
Subsidiaries
Number of Affiliates Accounted
for by the Equity Method

Fiscal Year End

December 31

Stock Exchange Listings

Tokyo and Nagoya

Chairman and Representative
Member of the Board
President and Representative
Member of the Board

Tadanobu Nagumo

Our Worldwide
LocationsJapan, the USA, Canada, Australia,
Germany, the Philippines, Vietnam,
China, Thailand, Russia, etc.

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

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

Number of Employees

22,187 (consolidated)

122
1

Yokohama Rubber Group at a Glance● Main Products
Tires

MB*

Other

Yokohama Rubber manufacturers awide range of tires, tubes, aluminum
foil and automotive components forpassenger vehicles, trucks and buses,
light-duty trucks, construction
vehicles, and industrial vehicles

Yokohama Rubber supplies conveyor belts, pneumatic fenders, marine
hoses, rubber bearings, highway joints, industrial air springs, various highpressure hoses, couplings, sealants, urethane coating waterproof materials,
various adhesives, electronic materials (coatings, encapsulants for LED),
aerospace products (lavatory modules, tanks, couplings)

Sporting goods, information
processing services, realestate leasing, and others*Acronym that stands for Multiple Business. This term is collectively used by Yokohama
Rubber to refer to a diversified and growing business portfolio.

● International Presence

Tire production sites

Tire sales sites

MB production sites(consolidated)(consolidated)

Net Income of the Period

Total Assets

Net sales(JPY billion)

Net Income of the Period(JPY billion)

700
600
500

465.1

559.7
32.6

625.2
601.6
35.0

40.5

629.9
36.3

700

25
20
15

11.6

100

03

40

30

300

0

800

2011

2012

2013

2014

2015

(FY)

600
500

41.4
37.5

653.6

44.1
734.5

(Persons)

47.7

25,000

50
45

710.7

40
30
25

300

20

200

5

100

0

0

20,00019,272 19,412 19,770

21,441 22,187

35

543.8

400

10

(consolidated)

Equity Ratio
(%)

32.3
501.8

● Number of Employees

Equity Ratio

Total Assets(JPY billion)

45

35

400

200

Other

● Total Assets and Equity Ratio● Net Sales and Net Income
Net Sales

MB sales sites

15,00010,000

15
10

5,000

5
2011

2012

2013

2014

2015

(FY)

0

0

2011

2012

2013

2014

2015 (FY)Corporate Philosophy (CSR Management Vision and Action Guidelines)

Corporate Philosophy (Launched in 1990)
Basic Philosophy
To enrich people’s
lives and contribute to theirgreater happiness and well-being
by devoting our wholehearted
energies and advanced technology to thecreation of beneﬁcial products.

Management Policies● Take on the challenge of new technologies to produce new value.
● Develop proprietary business fields to expand the scope of business.
● Create a workplace that values, improves and energizes people.
● Deal fairly with society and value harmony with the environment.

Action Guidelines

Corporate Slogan● Develop ourselves so that we may give our personal best.
● Trust, challenge and improve one another.

Excellence by nature● Nurture a welcoming, open spirit.

CSR Management Vision (Launched in 2008)
To build a trusted identity as a contributing member of the global community.
CSR Action Guidelines● Act swiftly to earn affirm trust.

● Ascertain the items that can contribute.

● Practice CSR in one’s own work.

Yokohama Rubber Group Action Guidelines (Updated in 2014)
1. We shall respect human rights inside and outside the company
2. We shall create workplaces that are safe and healthy
3. We shall harmonize our activities with the global environment
4. We shall provide safe and high-quality products and services

5. We shall conduct corporate activities with a high transparency andpractice proper disclosure of information
6. We shall observe not only laws and regulations but also social norms
7. We shall aspire to harmony and prosperity with local communities

Grand Design 100 (GD100)
Medium-range Management Plan

GD100 and Our Approachto the Environment

GD100 Vision and Basic Policy

To mark the Yokohama Centennial in fiscal 2017,
we will evoke a distinctive global identity in building
corporate value and in building a strong market presence.

Long-Term Financial Targets (FY2017)

Net sales: ¥770 billion, operating income: ¥80 billion,
operating margin: 10.4%

Basic Policy

Corporate Philosophy● Identify continually changing social trends.

Basic Policy

Following the principle of dealing fairly with society andvaluing harmony with the environment,
we shall assert our world-class strengths in technologies forprotecting the environment.
●Continued improvement of environmental management.
●Action to combat global warming.

Deliver the best products at competitive prices and on time.
Assert world-class strengths in technologies for protecting the environment.
Foster a customer-oriented corporate culture that honors rigorous
standards of corporate ethics.

●Contributing to the creation of a sustainable recycling

society.

Updated in 2015

Established in 2006

The Founding Spirit
1. Production business is a social service. Its purpose is to make people’s lives more convenient and enjoyable. Its aim
should be to offer good, useful products at moderate prices.
2. There must be a basic commitment to delivering quality products unrivaled by those of competitors.
3. Management should adhere to the principles of fairness and consideration. The mission of a fair, honest management isto ensure capital, share the fruits of endeavor with its workers, and fulfill its responsibilities to consumers to act, in otherwords, rationally.
4. A company should have as few employees as possible and make the best use of the productivity of machines. This is thegreat secret for improving efficiency.
5. The success or failure of a business depends on how much one is willing to study, and with how much determination, tomutually improve and grow. Accordingly, one must make a great effort.

04

CSR and Important Issues (Materiality)
Yokohama Rubber Group is committed to the ten principles of the UN Global Compact*1 and carries out thePlan-Do-Check-Act (PDCA) cycle following the framework of ISO 26000*2.
*1: A voluntary initiative in which companies participate in a worldwide framework for realizing a sustainable society by taking action as a good corporate citizen throughcreative and responsible leadership.
*2: A set of guidelines created by the International Standards Organization (ISO) on the social responsibilities of companies and other organizations.

The Ten Principles of the UN Global Compact
Human Rights• Principle 1: Businesses should support and respect theprotection of internationally proclaimed
human rights; and• Principle 2: make sure that they are not complicit in humanrights abuses.

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

Labour

CSR and Important Issues (Materiality)

ISO26000 Seven Core Subjects
1 Organizational governance2 Human rights• Principle 3: Businesses should uphold the freedom of
association and the effective recognition of
the right to collective bargaining;• Principle 4: the elimination of all forms of forced andcompulsory labour;• Principle 5: the effective abolition of child labour; and• Principle 6: the elimination of discrimination in respectof employment and occupation.

3 Labor practices

Environment

6 Consumer issues• Principle 7: Businesses should support a precautionary
approach to environmental challenges;• Principle 8: undertake initiatives to promote greater
environmental responsibility; and• Principle 9: encourage the development and diffusion ofenvironmentally friendly technologies.

4 The environment
5 Fair operating practices

7 Community involvementand development● Determining Important Issues (Materiality)

Starting in 2014, we have determined important issues (materiality) with regards to themes of great interest to andimpacts on both the company and stakeholders, from among the many CSR issues that exist.
We focus on specific items among these and establish KPI as we work towards ongoing improvements byimplementing the PDCA cycle to achieve these items.

The global
environment

Local communities

Customers
Shareholders/investors

Business partners

Employees

We challenge to build a sustainable society inharmony with the environment, to protect ourblue planet and human beings.

● Materials● Energy● Water● Biodiversity● Emissions● Products and services● Environmental grievance mechanisms

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

● Market presence● Local communities● Grievance mechanisms for impacts on society

We supply safe and secure products throughmanufacturing focused on the heart andtechnology.

● Customer health and safety● Product and service labeling● Marketing communications● Compliance (Product liability)

We improve our company value by growing business
opportunities.

● Economic performance

We promote CSR activities throughout the value chain.

● Supplier human rights assessment● Supplier assessment for impacts on society● Supplier environmental assessment● Supplier assessment for labor practices● Child labor● Forced or compulsory labor

We value and develop our people, and create
opportunities for people.

● Occupational health and safety● Training and education● Diversity and equal opportunities● Human rights grievance mechanisms*Please see page 15 for specific initiatives for stakeholders in terms of value creation through our businesses.
05

Participation in Initiatives in Japan and Overseas
Japan Association for the World Food Programme

Keidanren's Commitment to a Low Carbon Society

We endorse the World Food Progamme (WFP) in undertaking
to eradicate hunger and poverty and supports the activities ofthe WFP as a trustee.

We are in accordance with, and participate in various activities
for Keidanren's Commitment to a Low Carbon Society underthe vision of "Japanese industries playing a role as corefunctions with their technological strength in order to achieve
our target which is to halve the greenhouse gas emission of theworld in 2050."

Fun to Share Campaign
We have been supporting the new Fun to Share Campaign
aimed at achieving a low-carbon society in response to climatechange since 2014. We have also registered as a participatingcompany and organization and made a declaration on thecontent of the initiatives.

〈Yokohama Rubber Co., Ltd. 〉

Achieving a low-carbon society through fuel-efficient tires
and environmental contribution products and activities.

"Declaration of Biodiversity by Keidanren" Promotion Partners

WBCSD refers to the unified association consists of top
executives from global corporations in order to perform theirleadership in their industry, have lively discussion, and propose
policies with regards to the environment and sustainable
development. We are participating in the Tire Industry Project
which is to conduct surveys pertaining to possible impact on
the environment and health to be made by tires, and topromote various activities to save energies in the buildings andoffices.

CSR and Environmental Management Promotion System
Twice a year, we hold a CSR* Council and an Environmental Council, each chaired by the President, in order to planand review CSR issues that Yokohama Rubber Group should be addressing. Matters that affect management arereported to the Executive Committee for approval.
Tire Production Environmental Task Force

Representative Director

Head: Head of Tire Production Division

Management
Meeting

CSR Council
Chairperson:
President

CSR Report
Editorial Group

Corporate Compliance
Committee
Central Labor
Committee
Central Safety and HealthCommittee
Central Disaster Prevention
Council
Risk Management
Committee
Personal Information Protection
Management Committee
Export Control Committee, etc.
Corporate Officer/
Operating Departments

Chair: Head ofCorporate Social
Responsibility Division

Environment Council
Chairperson: President

Initiatives/CSR and Environmental
Management Promotion System

We have been in accordance with the idea of "Declaration of
Biodiversity by Keidanren" and their promotion partners since2009 to develop various approaches for the preservation of
biodiversity. Basic policies and action guidelines have been set
forth as "Yokohama Rubber's Guidelines on Biodiversity."

WBCSD (World Business Council for Sustainable
Development)

MB Production Environmental Council
Head: Managing Corporate Officer,
Multiple Business Production and Technology

Head Office and Sales Subsidiary CSR &Environmental Council

Head: Head of Corporate Social Responsibility Division

Subsidiary Production Environmental
Task Force
Chairperson: General Manager,
Environmental Affairs Department

Global Environmental Council

Chairperson: Head of Corporate Social Responsibility Division

Chemical Substance Management Committee
Chair: Managing Corporate Officer,
Multiple Business Production and Technology

3Rs Committee

Chair: Head of R&D Center

Global Warming Countermeasures Committee
Chair: Head of Tire Production Division

Environmentally Friendly ProductCommittee

Chair: General Manager, Head of Commercial Tire Division

Yokohama Forever Forest Committee

Chair: Head of Corporate Social Responsibility Division■CSR and environmental management promotion framework (as of April 1, 2016)06

Message from the PRESIDENT

Message from the PRESIDENT

Aspiring to Grow the Company
with a Strong Presence inAdvance of Our Centennial
Hikomitsu Noji
President andRepresentative Member of the Board

07

Reinforcing Our Operating Base andMaximizing Added Value throughCSR-centered Management

Yokohama Rubber will celebrate its centennial next
year in 2017. I would like to take this opportunity toextend my appreciation for the support we havereceived over this time from customers, business
partners and various other stakeholders.
Last year, there were a number of corporate scandals
around the world that shook the confidence ofconsumers and society as a whole.
Yokohama Rubber, recognizing that these scandals
are not someone else´s problem, took stock of fraud
and risk items at all business divisions, subsidiaries andaffiliates in order to check whether information, goods,
and money is centrally managed within operationalflows. We also clarified accountability for meetingbodies and job duties and thoroughly implemented
measures to prevent fraud.
Today, our work involves both digital tasks andanalog tasks. For example, we have digitized work that
handles data to every extent possible and established amechanism whereby data is retained in its original
condition without modification by others.
At the same time, we want workers to focus on
analog tasks that produce added value for thecompany, such as communication with others andvalue creation. We are in the process of developing asystem that will ensure corporate scandals never occur
and that will maximize added value in terms of both
systems and people.

Safety, the environment, quality, and compliance
represent pillars of CSR initiatives that form the very
foundation of a company. A company´s added value islargely determined by the extent to which it can
reduce related risks to zero and accumulate positive
value in other places. The greater the positive value, thegreater the corporate value, which also translated into
greater brand power, too.
Yokohama Rubber acquired Alliance Tire Group B.V.
(ATG) of the Netherlands in 2016. ATG markets
industrial tires in 120 countries around the world. Now,
we will turn our attention to carefully examining ATG´splants and their supply chain.
Diversity is also an important issue for a global
company. In Japan, we are examining ways to increase
the number of females hired to work mainly at ourplants. Increasing women in our workforce will not only
make workplaces more dynamic and friendly, but it will
also help to reduce manual labor and improve safety. In
this manner, we will continue to work on making ourjob sites more female friendly.
As for business partners, we will continue to focus onsourcing materials from companies that disclose ESG,
particularly those outside of Japan, and companies thathave obtained ISO 9000 and ISO 14001 certification.
We must compete with peers in terms of businessand products, but there are certain CSR issues thatshould be addressed with the cooperation of othercompanies. Our industry is already working together toimplement distribution and environmental measures.
There are many limits to what a single company canaccomplish, so I hope to increase joint efforts withindustry and communities.

Raising Our Visibility Among Customers
Around the WorldTo increase our visibility further, in 2015 we concluded
a partnership agreement with Chelsea FC of thePremier League, one of the world´s foremost
professional soccer leagues. Soccer is a popular sporteven in emerging countries, and so through thisrelationship, we hope to get our name out and let
people know our tires are being used in motorsports
and on some of the world´s top vehicles. This will raise
our brand profile and help pave the way for increasing
our customer base around the world.
Environmental initiatives are another essential
element for any company. Yokohama Rubber has
declared its commitment to become a company having
world-class strengths in technologies for protecting theenvironment when it comes to giving back to theenvironment. We offer some of the world´s best tires
when it comes to environmental performance. Our
goal is to be a company with a strong presence inglobal markets for the next century. Toward that end,
we will implement various initiatives and activities.

Message from the PRESIDENT

Yokohama Rubber´s Mechanisms andHuman Resource Development Initiatives
for Continually Earning the Trust of Society

Establishing a Unique Presence Where
Yokohama Rubber is Truly Needed
Advancements in GPS and control technologies havemade the self-driving car a reality. The self-driving
automotive society of tomorrow will be here very
shortly. The advent of self-driving cars will require
drastic changes in tire performance. Only thosecompanies with the manufacturing capabilities toadapt technologically to these major changes insociety will survive. Yokohama rubber will always be
one step ahead of changes and reflect this in its
business activities. This will enable us to be a company
that contributes to society and maintains a strong
presence.
Our goal under Grand Design 100 (GD100) is tobecome a global company with a unique presence. I
want Yokohama Rubber to have a presence in theworld as a company that is truly indispensible and acompany that people are proud of using. To ensure ouruniqueness in continually adapting to the changing
times, Yokohama Rubber stands strongly committed to
not only future technological development, but also
CSR activities, too.

08

Dialogue with the
Chairperson of the Board

Tadanobu Nagumo
Chairman and Representative Memberof the Board

Ms. Nami Takenaka

Dialogue with the Chairperson of the Board

Chairperson, Prop Station(Non-Profit Social Welfare Organization)

Working towards better companies, and a better society,in which everyone can maximize their potential
Ms. Nami Takenaka, who has known Yokohama Rubber Chairman Mr. Tadanobu Nagumo for many years, is the Chairperson of
non-profit social welfare organization Prop Station, an organization which uses information technology (IT) to help disabled people
achieve more autonomy and participate more actively in society, encouraging disabled people to find work and helping to create work
opportunities for them. Both Ms. Takenaka and Mr. Nagumo believe that we have a responsibility to help other people maximize theirpotential; in this dialogue, they discuss how people can be helped to make the most of their potential, both in business enterprises andin society as a whole.

Opportunities for turning the impossible
into the possible
Ms. Takenaka: Our activities involve unleashing the potential ofpeople with severe disabilities who might have been thought
incapable of working, using IT to enable them to work at home, fromtheir beds. While this is a social initiative, we have had a lot ofinterest from people in the business world and in government. The
extent to which businesspeople understand our activities is very
important for us, and it is wonderful when an influential person like
Yokohama Rubber Chairman Mr. Nagumo takes an interest in what
we are doing.
Mr. Nagumo: It just so happens that currently Prime Minster Abe is
promoting the “Plan for Promoting the Dynamic Engagement of All
Citizens,” which is aimed at creating a society in which people who inthe past have not been able to work will be able to work and play anactive role.
Ms. Takenaka: The approach taken to promoting work for thedisabled will be the litmus test as to whether Japan really can
become a society characterized by the “Dynamic Engagement of All
Citizens.”
Mr. Nagumo: When I first talked to you, Ms. Takenaka, I was amazed tohear that your initiative only came into being because of computers.
09

Ms. Takenaka: When we started out 25 years ago, it was just aroundthe time when computers were starting to come into widespreaduse.
Mr. Nagumo: So this was around the time when Japan´s “Bubble
Economy” had just burst?
Ms. Takenaka: Yes, that´s right. The Japanese economy was justbottoming out, and the people we were caring for made thesuggestion to us themselves that this was the right time to belearning new skills, so that everyone would be able to use computerseffectively. They pointed out that “if we are linked up by computer,
we can work even from our beds.” Over the last 25 years, we havecontinued to keep pace with the developments in information andcommunications technology. As a result, thankfully, we have never
had any complaints about the quality of the work done by thedisabled people that we help.
Mr. Nagumo: While people tend to feel sorry for the disabled, andfeel that they need help, there are actually many disabled people
who are very capable, and for some people being disabled actuallyseems to be a source of creativity.
Ms. Takenaka: When people have no choice, they take action.
When I heard them saying “If we had computers, we could work; wewant to give it a try” , I felt certain that, if we could create anenvironment in which they could use computers, it would produce
spectacular results.

“Helping people to maximize their potential.”
This is important not just for business enterprises,
but for society as a whole.
Ms. Takenaka: When I first met you, Mr. Nagumo, the thing thatbrought home to me that we were on the same wavelength was thatthe activities that we are implementing, and the way that Yokohama
Rubber tries to ensure that every one of its employees is able tomaximize his or her potential, are basically very similar in theiressential features. It is a shame to allow people´s potential to lie
dormant. I remember you saying that this is important for society as
a whole, as well. I believe that this attitude is the secret to Yokohama
Rubber´s successful development as a company.
Mr. Nagumo: I think that not just the disabled, but other people aswell, often fail to develop 100% of their full potential. It is our
responsibility as managers to think about how we can get people torealize their full potential. The same is true for society as a whole; it isvitally important that we become a society where everyone candevelop all of their latent capabilities. The key factor is how you go
about enhancing the sense of self-realization, job satisfaction, or
motivation. It is very important for people to be able to feel that they
are valued within their particular group or organization. The
converse of that is we need to develop groups and organizations inwhich that sense of belonging is possible.

Ms. Takenaka: Work involves more than just earning money; it also
helps to determine the extent to which a person feels needed. If
someone feels that they are needed, they will respond bydemonstrating an amazing level of energy and vigor. That is true
right across the board, in big organizations as well as in smallorganizations.

Working to build companies, and a society,in which people of all different kinds are accepted

Mr. Nagumo: When disabled people are working at home, this can be asource of pride for a company´s employees, and it can also stimulatethem to make even greater efforts in their own work.
Ms. Takenaka: I think that it provides an opportunity for employees tothink about their work-styles, and also that it can lead to change within acompany. This is not something that only applies to the disabled; it also
applies to the ways in which women are able to work, and of coursewith the impact of globalization it is also becoming increasingly
common to work alongside people of different nationalities and people
with different religious beliefs.
Mr. Nagumo: People with different characteristics need to beworking together in an atmosphere of mutual respect. I hope thatYokohama Rubber can be this kind of company. If a company isunable to achieve this, then it will be unable to attract and retain
diversified human talent. As you pointed out just now, this issue
does not only affect the disabled; unless individual company
employees become more willing to take on different challenges,
then 20 or 30 years down the road they will find that they have failed
to realize their own ambitions in terms of the person they wanted to
become. I hope that in the future I can get you to come and give atalk at our company, as an opportunity to make our employees moreaware of this issue.
Ms. Takenaka: I am delighted to have had this opportunity to talkto you, and it would be wonderful if it helped to boost the
motivation of your company´s employees. I believe I am right insaying that your company will celebrate its 100th anniversary next
year. This is a company with a rich history. It would be marvelous if,
20 or 30 years from now, all of Yokohama Rubber´s employees,
including the shop-floor workers, felt that this dialogue today had
been the starting point for changes that had benefited the company
over the intervening period.
Mr. Nagumo: Looking ahead to our next 100 years, I hope that wewill be able to make changes that seem impossible now, and that byworking together with one another we can create a better company,
and a better society.

Dialogue with the Chairperson of the Board

Mr. Nagumo: I should think it is fair to say that, on the whole,business enterprises still don´t really understand how much disabled
people are capable of.
Ms. Takenaka: No, they don´t understand. The thing is, people
don´t usually think of someone who is bedridden as being able towork. What is more, because bedridden disabled people are notpotential candidates for recruitment to meet a government-set
disabled employee quota, they are completely off the radar forbusiness enterprises. While you could say that it´s only natural thatbusinesses don´t understand, I think it is also partly that we ourselves
haven´t been making a big enough effort to educate them about it.
Having said that, with the government´s new initiative aimed at the“Dynamic Engagement of All Citizens,” I feel that the opportunities
to spread awareness among business enterprises have increased.
Mr. Nagumo: I suppose it relates to the fact that, even if a firm
outsources work to disabled people through Prop Station, it doesn´tcount towards filling the government-set disabled employee quota
for that firm. If the government changed the system, then awarenessamong business enterprises would probably increase.
Ms. Takenaka: The calculation of the official disabled person
employment rate is based solely on formal recruitment as a regular
employee. For people who are bedridden, and people who require
help from a carer to go to the toilet, securing regular employment ofthat kind is very difficult. So why can´t they work in other ways?
Business enterprises would be able to meet the government-set
disabled employee targets, and disabled people would become
economically independent, develop a new sense of purpose, andpossibly even become taxpayers; everyone would benefit. It´s up to
the politicians to make the necessary decisions, of course; rather
than it just being us promoting the idea, it would carry much moreweight if business enterprises would make their voices heard insupport as well.

Profile of Ms. Nami Takenaka
Having an eldest daughter who was severely disabled led Ms.
Takenaka to undertake self-directed study in the fields of pediatric
medicine, social welfare and education. In 1991 she founded thegrassroots organization Prop Station. In 1998 the Ministry of Healthand Welfare granted Prop Station Social Welfare Corporation status,and Ms. Takenaka took on the post of Chairperson. Prop Station is
focused on helping the disabled to develop their full potential, toachieve increased independence, and to participate more actively insociety; it provides support to help disabled people secure work.
10

Yokohama Rubber’s Tire Business and CSR

Providing customers withtires that are not only
environmentally-friendly,
but also meet the uniqueneeds of individual
regions
Hikomitsu Noji

Yokohama Rubber’s Tire Business and CSR

President and Representative Member of the Board,
President of Tire Business

Aiming to reduce the burden on theenvironment in every aspect of our operations
Yokohama Rubber, which has committed itself to building “atrusted identity as a contributing member of the global
community,” is taking steps to reduce the burden on theenvironment in every aspect of the company’s operations. At
Yokohama Rubber, we have established a set of standards fordetermining whether individual products can be classed asenvironmentally-friendly; our goal is to ensure that all of ourcompany’s products meet these criteria by fiscal 2017.
The biggest single impact that a tire has on the environment is
the carbon dioxide emissions in the exhaust of the vehicle towhich the tire is attached, so we have been working to find ways
to contribute to improving vehicles’ fuel efficiency. While
working to further reduce rolling resistance of tires, we havebeen undertaking R&D to enhance aerodynamic performance by
attaching fins to the outside of our tires. We have also beendeveloping a new product: a tire that improves the driving
performance of sports-type passenger vehicles while at the sametime providing enhanced fuel economy. This new tire product isscheduled to be launched in August 2016. Even if a vehicle has
superior fuel economy characteristics, if the tire pressure is notcorrect, fuel consumption will increase. To help overcome thisproblem, we are also working on the development of new tire
products that maximize the performance of both tire and vehicle
by making it more difficult for air to escape, thereby helping thetire to maintain the correct pressure for longer.

Striving to achieve the kind of performance thatpeople want from their tires
Road surface conditions and climatic conditions vary fromcountry to country. The advent of automated driving in the near
future can also be expected to have a major impact on how
people drive. Nevertheless, no matter what country you areliving in, the fundamental requirement for a tire is the same: toallow you to travel safely without the tire getting damaged.
For a company operating on a global scale, it is vitally
important to respond to the variations in end-user needs
between regions and over time, by providing tires that enablepeople to travel in safety regardless of the environment that11

they are in.
As part of the efforts being made towards the realization of the“sustainable society,” we at Yokohama Rubber are undertaking
research into the making of synthetic rubber from biomass
resources. In March 2016, we announced the launch of a new
type of tire that is 25% lighter than conventional tires, making it
possible to achieve a significant reduction in resource utilization.
We will continue to undertake research in this area, with the aimof using technology development to respond to society’s calls
for protection of the global environment.

Educating consumers about tire performance andproper tire usage
It is an unfortunate fact that, even today, the ordinary consumers
who are the end users of our products tend not to have a very
good understanding of tire performance. It is fair to say that
relatively few consumers are familiar with even such basic
concepts as rolling resistance and wet-grip performance. Even
when someone is driving a low-fuel-consumption vehicle, if they
are using the wrong type of tire, or if the tire pressure is too low,then the fuel economy of that vehicle will be lower than it
should be. As a tire manufacturer, we have not been doing
enough to educate consumers and spread awareness of therelevant concepts; in the future, we will need to be
implementing awareness-raising activities that target ordinary
consumers.

Social issues
Tire safety

Accidents caused byunsatisfactory tire maintenance:

272 accidents*Accidents caused by unsatisfactory vehicle maintenance:

546 accidents

Source: Institute for Traffic Accident Research and Data Analysis (ITARDA)
Accidents in Japan (Nationwide) Caused by Unsatisfactory Maintenance in 2015

Educating consumers

Percentage of consumers with inadequate
knowledge of tire performance and tire safety:

15.1%

A significant percentage of consumers did not keep the air pressure in their tires highenough, necessitating an appeal to consumers to implement more effective tire pressure
management, both in order to achieve improved fuel economy and for safety reasons.
Source: Japan Automobile Tyre Manufacturers Association (JATMA)
Results of tire inspections performed on “Tyre Day” (April 8th)

Products and services that contribute to solving social issues

Ultra-lightweight
Concept Tire

ADVAN FLEVA V701

Aerodynamic Tires

AIRTEX

Conventional tire productNew tire product

The ADVAN FLEVA V701 is a new high-performance sport tirefrom Yokohama Rubber’s flagship ADVAN tire branddesigned to provide effortless handling. This new tire productwas launched in Japan in August 2016. While retaining the
responsive handling characteristic of ADVAN tires, the
ADVAN FLEVA V701 also aims to improve vehicle fueleconomy by reducing the tire’s rolling resistance by around20%. This enhanced fuel economy makes the ADVAN FLEVA
V701 a unique environmentally-friendly sports tire.

Yokohama Rubber’s Tire Business and CSR

LT151R Retread TireAt the Geneva Motor Show in March 2016, Yokohama Rubbershowcased a new ultra-lightweight concept tire. As a result ofextensive research on tire structure, materials, manufacturingmethods etc., we have succeeded in simplifying the tire’s
structure and reducing its weight by 25% without negatively
affecting braking performance, rolling resistance or any otheraspects of tire performance. Preparations are underway forthe full-scale commercial launch of this new tire. Reducing
tire weight helps to improve vehicles’ fuel economy, andcontributes to reducing carbon dioxide emissions.

Retread tires (where the tread on a used tire is replaced withnew tread so that the tire can be reused) offer significant
environmental benefits in terms of reducing theconsumption of resources. Yokohama Rubber’s LT151R is afriction-resistant ribbed tire designed for use on small trucks
and buses; launched in 2014, it has been very well-received,
and in October 2015 a retread version was introduced. This is
a product that provides enhanced safety at reduced cost.

Yokohama Rubber noticed that, when a vehicle is moving andthe wheels are going round, the airflow around the upper part of
the tire is different from that around the lower part of the tire;
R&D work based on the recognition of this phenomenon has led
to the development of a new type of aerodynamic tire, where
fins in the shape of long, thin strips are attached to the outer partof the tire, making it possible to control the airflow over the tire,
which in turn helps to reduce the air resistance affecting themoving vehicle and control the amount of lift experienced by
the vehicle. This aerodynamic tire design helps to improve fueleconomy while also contributing to vehicle safety. A prototypeof the new tire was showcased at the Tokyo Motor Show in
October 2015, and attracted a great deal of interest.
To realize the goal of giving vehicles superior fuel economy,
besides tire performance, having the right tire pressure is also
vitally important. AIRTEX is a new technology for the inner
lining on the inside wall of tubeless tires. By comparison withtraditional lining materials, AIRTEX reduces air leakage byaround 30%, while also making it possible to reduce tire
weight. AIRTEX has been adopted for use in passenger
vehicle tires since 2007, and a similar technology for reducing
air leakage was introduced for commercial vehicles such astrucks and buses since 2013.

drawing )(Conceptualawarded)(Patent
AIRTEX Advanced Liner,
a Yokohama Rubber-developed material thatcombines the properties of rubber and plastic.

Yokohama Rubber’s new inner lining technology forpassenger car tires

12

Yokohama Rubber´s MB (Multiple Business)
and CSR

How the MB enables
each of us to achieve
meaningful CSR results

Takao Oishi
Yokohama Rubber´s MB (Multiple Business) and CSR

Member of the Board and Senior Managing Officer,
President of Multiple Business

Creating products that help to solve society´s issues
At Yokohama Rubber´s MB (Multiple Business) Group, we handle
a wide range of products, including industrial materials, hoses
and coupling products, sealing materials, adhesives, aerospacecomponents, etc. We use the technology that Yokohama Rubber
has accumulated through its tire business to diversify thecompany´s business operations. As the MB Group´s products aremainly oriented towards the business-to-business (B2B) market,
many of them are used in locations where they are unlikely to be
seen by ordinary consumers; nevertheless, these products makea substantial contribution in many different fields, playing animportant role behind the scenes.
The MB Group is making active use of Yokohama Rubber´sunique technologies to develop products that help to solve
social issues from an environmental perspective; examples
include our marine hoses, which are designed to prevent water
quality contamination that could lead to pollution of the oceans,
our urethane water-resistant coating materials, which help toreduce the “heat island” effect, and our hydrogen dispenser
hoses for fuel-cell powered vehicles (which are attracting
considerable attention as the “next-generation” vehicle that will
help to reduce carbon dioxide emissions).

Aiming to become a trusted brand in markets
throughout the world
The last few years have seen the countries of Asia and Africa
developing at an impressive pace. Demand in the area of
infrastructure improvement and in the resource development
related businesses offers particularly strong potential, and if
Yokohama Rubber can match those product groups in which weare highly competitive – such as industrial materials andconstruction equipment components, etc. – with market needs
then I believe there is the possibility of achieving significant
growth in the global market as a whole. In the B2B businesssector, it is not just the products themselves that are important,but also the reputation of the company that supplies them.
European companies in particular tend to have their own
individual criteria, and are very exacting when it comes tochoosing a supplier. So it becomes a question of how much trust
customers place in your company. The extent to which eachindividual employee understands CSR and implements CSR

13becomes very important, and sometimes you need to thinkcarefully about where the real value of CSR lies. Also, I believethat one real key to success as a global enterprise is the degree
to which a company understands the differences between
individual overseas markets when developing its business
operations, and the extent to which a company is able to utilize
its know-how to develop products suited to overseas markets.

Gender-neutral global talent cultivation
For our company to achieve sustained growth there is a need fora gender-neutral approach to the cultivation of human talentthat is able to operate effectively in a global environment. We
are taking a proactive stance towards the recruitment of local
talent (both male and female) overseas, with the goal of
spreading awareness and appreciation of the Yokohama Rubber
brand in countries throughout the world. In my own case, sincejoining Yokohama Rubber I have worked in around 40 different
countries at one time or another. I see my mission as being tofind ways to leverage this international experience in our humantalent cultivation efforts. I anticipate that, in the future, ourcompany will be providing the support needed to enable adiversified range of human talent to maintain high motivationand maximize their potential in many different countries.

Social issues
Rising demand for energy
Global demand for primary energy
Expected toincrease by around 30%
by 2040 (compared to 2013)
Source: IEA, World Energy Outlook 2015

Trend towards people using
smartphones for extended periods of time

Average amount of time per day that young people (aged 10 – 20)
in Japan spend using a mobile phone (smartphone or conventional
mobile phone) to access the Internet:

Over 120 minutes per day

Source: Institute for Information and Communications Policy (IICP),
2014 Survey of Time Spent Using Information and Communications Media and Related Usage Behavior

Products and services that contribute to solving social issues

Marine Products

Hydrogen Gas Hoses“Urban Roof”
Urethane Coating
Waterproof Materials

Blue Light*
Blocking Films

Marine hoses

Pneumatic fenders

Yokohama Rubber also possesses world-class technology inthe conveyor belt segment (conveyor belts are used formoving materials such as coal, mineral ores, gravel, andmanufactured products and components). Yokohama
Rubber´s ECOTEX energy saving belts utilize the latest rubbercompounding technology to optimize both adhesion andflexibility. ECOTEX conveyor belts provide reduced
movement resistance and lower energy consumption while
maintaining a high level of durability. We anticipate growing
demand for our conveyor belt products, particularly in theemerging economies.

Energy saving belts

Fuel-cell cars, which represent the next generation of motor
vehicles, rely on dispenser hoses to fill up with hydrogen. Ashydrogen gas is stored under high pressure at very low
temperatures, dispenser hoses have to meet demanding
technical requirements. Yokohama Rubber and Iwatani
Industrial Gases Corp. have jointly developed a new type oflightweight, highly flexible hose that makes hydrogen gas
transportation and dispensing operations much easier toperform. To help encourage the widespread adoption of
fuel-cell vehicles, work is now underway on the developmentof an 87.5MPa hose (the international standard for hydrogendispending hoses).
“Urban Roof NX” is a range of urethane water-resistant coating
materials with superior thermal insulation properties developedby Yokohama Rubber for use on building roofs. These coating
materials contribute to energy conservation by preventing
building temperature from rising due to the external
temperature and direct sunlight. In combination with aheat-shielding top coating, “Urban Roof NX” can prevent rises inbuilding temperature of as much as 8˚C. In 2015, “Urban Roof
NX” was awarded a Heat Island Mitigation Technologies
Verification Number from Japan´s Ministry of the Environment(MOE).
In today´s world, where mobile phones and other portableelectronic devices are so widely used in everyday life, there isstrong evidence that the blue light emitted from device
displays is having an adverse impact on human health,causing eye strain, “dry eye” symptoms, impaired retinal
function, and disruption of the body clock, etc. Responding tosociety´s need for a film that can effectively block blue light,
Yokohama Rubber is working on the development of such a
film.
*The term “blue light” is used to refer to light in the 380 – 495nm band thatappears violet or blue in the visible spectrum.

Hydrogen gas hoses

Yokohama Rubber´s MB (Multiple Business) and CSR

Environmentally-friendly,
Energy Saving Belts

Yokohama Rubber is a world leader in the manufacturing andsale of the pneumatic fenders and marine hoses used inpetroleum and liquefied natural gas (LNG) sea transport
operations. As there is a danger of serious accidents involving
oil spillage, marine pollution, etc., the requirements for theseproducts in terms of safety and durability are extremely
demanding; however, with our extensive rubber-related
know-how, Yokohama Rubber has the necessary technicalexpertise, and in the future we plan to further expand our
product line-up in this market segment.

Japan
Environmental
Technology
Verification
Ministry of theEnvironment

Urethane coatingwaterproof materials

Heat Island Mitigation
Technology
Verification No. 051-1410
The performance,Year ofverified by a third party verification
2014
organization, is disclosed.

http://www.env.go.jp/policy/etv/en
This logo is not proof of certification ofcompliance with certain standards.

4. Violet/blue lightfrom the exterior
is reflected,
reducing theyellow tint

2. Blue light reflectedfrom the back3. Violet/blue lightfrom the exterior
Coating

1. Light from the display

Example of a method for blocking blue light14

Creating Value through Our Businesses
GD100 Phase IV: All for growth

Creating Value through Our Businesses

Phase IV (2015 to 2017) is theculmination of GD100 and ispositioned as the phase for setting
the stage for progress in ourcompany’s second century andresolving issues that have arisen up
until now based on the theme of "Allfor Growth — Open the way for the
next 100 years by bringing together
the potential of Yokohama Rubber".
We hope to bring together all formsof growth in our business activities,
including the growth achieved ineach phase, the growth of the Groupoverall, and individual growth. Net
sales of 770 billion yen, operating
income of 80 billion yen, and an
operating margin of 10.4% havebeen set as the quantitative targets
for 2017.

Work together as an entire
company so that all behaviors
lead to an improvement incustomer satisfaction

Products that have apresence that feels like
Yokohama Rubber

Tire business strategy
Technology strategy

Aggressive investments
utilizing a sound financial
position

MB business strategy
Company-wide
strategy

CSR initiatives

Yokohama Rubber’s stakeholders
The global environment

Local communities

Customers

Shareholders andinvestors

Business partners andsuppliers

Employees

Process used for identifying important issues
We identify important issues in relation to Yokohama Rubber’s stakeholders and determine
which issues should be prioritized.

STEP 1

G4 gap analysis

STEP 2

Issues Assigning
G4 GapAnalysis Priority

STEP 3

Assigning an
external perspective
G4 gap analysis priority
STEP 4

Deciding onimportant issues

15

We will improve customer value and expand on a global scale in order to continue to be amanufacturer of tire and rubber products needed by customers for the next 100 years

Focus was placed upon the requirements of the fourth-generation GRI
Sustainability Reporting Guidelines (G4) with respect to current
information disclosure levels (CSR Report 2013). The current situation was
grasped vis-à-vis the content and processes of both responsive andunresponsive items. (conducted January 2014)

Analysis was conducted in accordance with Yokohama Rubber’s industries, business sectors andbusiness regions. After completion of this analysis, the G4 gap analysis priority was assigned
vis-à-vis those issues affecting Yokohama Rubber that were identified through discussions withrelated business units. (conducted January - February, 2014)
Sample Evaluation The "Supplier Environmental Assessment" Aspect: For Yokohama Rubber,a company that procures natural rubber as a raw material, there is the necessity to consider that
hidden human rights risks might exist within the upper reaches of supplier chains extending
beyond its scope. Moreover, if wide-ranging business activities conducted in numerous regions
encompassing both developed and developing nations are considered, such risks might be easily
exposed. Through coordination in-house with the parties responsible for such matters, "humanrights risk" was evaluated as being "a very important aspect" for Yokohama Rubber.
Interview research was conducted among five stakeholders. From the perspective of what each ofthese individuals considered to be important issues (material aspects), a gap analysis priority was
assigned based upon the research results. (conducted February - March, 2014)
The views expressed by the stakeholders can be found on our website.
(http://www.y-yokohama.com/global/csr/outline/g4.html)
On the basis of the analysis of the degree of importance (internal and external), research, anddiscussions conducted in Steps 2 and 3, the selected important issues were decided on through
CSR Council, Board of Directors, and stage-by-stage discussion. (This process was implemented in
October 2014)

We will strive for ongoing improvement by setting KPIs and implementing the PDCA cycle in relation to theselected important issues.

Together with
Local Communities
We build a trusted identity as acontributing member of the global
community by making contributions to
the development and prosperity of local
communities.
Organizational governanceCommunity involvement anddevelopment

Together with
Our Customers

For the Global Environment

We supply safe and secure products
through manufacturing focused on theheart and technology.

We challenge to build a sustainable society inharmony with the environment, to protect ourblue planet and human beings.

Organizational governance

Organizational governance

The environment

Consumer issues

Yokohama Rubber’s

Important Issues
To Our Stakeholders
and Investors
We improve our company value by
growing business opportunities.

Organizational governance

Together with
Our Business Partners
We promote CSR activities throughout
the value chain.**The overall series of activities or stakeholders providing
or receiving value in the form of products or services.

We value and develop our people, and create
opportunities for people.

Organizational governance

Organizational governance

Human rights

Human rights

Labour practices

Fair operating practices*

Together with
Our Employees

These symbols correspond to the ISO26000 framework outlined on page 31-32.

Labour practices16

We challenge to build asustainable society inharmony with theenvironment,
to protect our blue planet
andhuman beings.

Special Feature:

Yokohama Rubber’s Important Issues

For the Global Environment

Contributing to a reduction in the burden on theenvironment by promoting the widespread adoption ofretread tires in the transportation sector
At Yokohama Rubber, we have been focusing heavily on the
manufacturing and sale of retread tires, which are used tires that have
had the tread (the part of the tire that comes into contact with the roadsurface) replaced with new tread. In October 2015, we launched two newretread tire models designed for use on small trucks and buses: theLT151R, which offers outstanding wear resistance, and the iceGUARD
iG91, a studless tire that provides superior driving performance on ice
and snow.
Retread tires can be manufacturing using only around 30% as muchraw material (by weight) as brand-new tires, and the amount of carbon
dioxide emitted during the production process is approximately 60%
less. The utilization of retread tires also helps to reduce the quantity of17

waste tires that need to be disposed of, so from the perspective of the“3Rs” (Reduce, Reuse, and Recycle), the widespread adoption of retread
tires can be expected to be very effective in helping to safeguard theenvironment. When designing tires, Yokohama Rubber has for many
years now taken into account the need to ensure that the tires willremain durable if they are retreaded and reused, thereby ensuring tiresafety and quality, while also reducing the effective cost per tire.
The transportation sector in particular is experiencing rapidly growing
demand for retread tires, partly in order to upgrade the sector’s
environmental management (with a particular focus on working tocombat global warming), and partly to reduce costs. Currently, however,
only around 20% of the tires used on trucks and buses in Japan are
retread tires, a figure which is very low by comparison with the situationin Europe and North America, where awareness of the benefits of using
retread tires is higher.
In the future, Yokohama Rubber will be working to promote wider
adoption of retread tires in the transportation sector, by offering
combinations of brand-new tires and retread tires that provide costsavings, and by stepping up PR efforts to spread awareness of thebenefits of retread tires. We are also making a concerted effort to further
enhance the quality and cost-effectiveness of retread tires using a variety
of different approaches, including the development of new tire productsthat can be retreaded more than once, further enhancing the durabilityof brand-new tires, and working to increase the share of used tires thatare recycled, etc.

Resource recycling in the form of retread tires can help to reduce the amount of carbon dioxide
emitted at the tire production stage, while also contributing to a reduction in the quantity of
waste tires generated. It is also an economical approach, providing significant cost savings.

Retread Tires

Reducing resource
consumption by 68%

Reducing carbon dioxide
emissions by 60%

Manufacturing retread tires uses only 32% of
the petroleum resources required whenmanufacturing brand-new tires.

The amount of carbon dioxide emissions generated
in tire manufacturing and disposal is approximately
60% lower than for brand-new tires.

Brand-newtires

68% saving

100%
Source: Japan Retreaders Association

Retread tires

32%

Brand-new tires

Retread tires

emissionsemissions

CO2

CO2

Retreadtire

Tire priceApproximately

60%
reduction

Cost ofbrand-newtire (2)Cost ofretread tire

Cost ofbrand-newtire (1)Cost ofbrand-newtire

New tire

Retread tire

Source: Estimates based on data published in Japan Rubber
Manufacturers Association, Tire Inventory Preliminary Analysis

Developing an automotive air-conditioning hose for the next-generation,
environmentally friendly refrigerants* Refrigerant oil: A lubricant for refrigerant compressors in refrigerating air-conditioning
equipment

Reinforcement layer (PET)

Inner resin(Nylon)Outer rubber layer Inter-layer rubber layer Intermediate rubber layer(EPDM)(IR/EPDM)(IR/EPDM)[Environmental benefits]

150

Refrigerant permeation
control

A. Global warming
prevention

100

Conventional
products

Special Feature:[The structure of our new air-conditioning hose product]

Yokohama Rubber’s Important Issues

further advance its development of products that meet various needs,
such as the strict heat-resistance demands of overseas automotive makers
and the various refrigerant and refrigerant oil* combination requirementsof different system makers, while contributing to the use of refrigerants
with a low environmental burden.

＝

Yokohama Rubber has developed and marketed a high-pressure
automotive air-conditioning hose, the AC6B-11, designed for the
HFO-1234yf, which has a significantly reduced environmental footprint.
HFO-1234yf has a very low Global Warming Potential (GWP) of just 4,
compared to 1,300 for conventional air-conditioning refrigerants. Thisability to contribute to the prevention of global warming has provided
impetus for a shift over to using HFO-1234yf. However, at hightemperatures HFO-1234yf tends to react with moisture inside
air-conditioning hoses, leading to the release of an acid that can result insignificant degradation of the inner resin of conventional hoses, with theappearance of cracks, etc.
The new type of hose that Yokohama Rubber has developed
incorporates an acid acceptor that captures and breaks down the acidrunoff from the resin material, thereby successfully preventing
degradation of the resin. Yokohama Rubber has been awarded patents
for this technology not only in Japan, but also in North America, Europe,and China. The AC6B11 hose has already been adopted for use in cars
designed for the European market, including the Subaru Impreza, thefirst production car in the world to use the new HFO-1234yf
air-conditioning refrigerant.
The European and North American automotive industries has been
gradually introducing a GWP 150 restriction on refrigerants, with all new
vehicles in North America to comply by 2020 (2023 in Japan). There is also amovement to push forward these dates. Yokohama Rubber will continue toAC6B11

50
D. Safety and comfort
enhancement0

B. Resource recycling and reuse

Environmental
improvement

Increased lifespan anddurability
C. Resource conservation

Message from an automotive air-conditioner manufacturer
With the aim of contributing to the development of a new type of hose that would be able to cope with the
new types of refrigerant now being introduced, we have been working together with Yokohama Rubber,
undertaking repeated studies to determine the causes of cracks, and sharing ideas with one another. As a resultof these research efforts, Yokohama Rubber has developed its new AC6B11 hose product.
During the development process, Yokohama Rubber shared their chemical know-how with us in a very
easy-to-understand way, which proved very useful to us when providing product explanations to our car
manufacturer customers. In addition, the test standards* derived from the data obtained in this project haveprovided the basis for the new Valeo standard, which is being used to evaluate the chemical reliability of otherproducts too.
While there are still some problems to be address in regard to hoses (including the need to add
noise-reduction functionality, heat-resistance, etc.), we look forward to continuing to respond to our customers’
suggestions in the future.
* Test standard: Standards for testing methods regarding performance and functionality.

Mr. Takeo Shimizu (left)

Manager
Thermal Asia Regional Operation R&D
Valeo Japan Co., Ltd.

Mr. Hirotaka Kajizuka (right)
Hose Design Group Leader
Thermal Asia Regional Operation R&D
Valeo Japan Co., Ltd.

18

We build a trusted
identity as a contributing
member of the global
community by making
contributions to thedevelopment andprosperity of local
communities.

Special Feature:

Yokohama Rubber’s Important Issues

Together with Local Communities

Yokohama Rubber has been providing support for
the “Heyuan Community Sustainable Development and Ecosystem Protection Project,”which aims to help safeguard the biodiversity of, and the livelihoods of the people living in,
the Three Parallel Rivers of Yunnan Protected Areas (a UNESCO World Heritage Site)
The Three Parallel Rivers region is an area in the north of Yunnan Province,
China where three major rivers run parallel to one another. The area’s richanimal and plant life has led UNESCO to designate it a World Heritage Site.
Heyuan Village is one of the major tourism centers within the Three Parallel
Rivers region; it is a minority nationality village located within the
Laojunshan Nature Reserve, Lijiang, Yunnan. The village has just over 2,000
people living within an area of approximately 108 square kilometers. In thepast, there were no significant cash crops to serve as a source of income,and the inhabitants relied on logging and hunting wild animals, which
provided a limited amount of income for them. As a result of unrestricted
logging that had continued over an extended period, the area’s
topography and its precious natural resources were damaged, and its
biodiversity was under threat.

19

In 2011, Yokohama Rubber (China), Co., Ltd, which oversees Yokohama
Rubber’s business operations in China, began providing support for the“Heyuan Community Sustainable Development and Ecosystem Protection
Project” initiated by Chinese environmental NGO Beijing Sansheng
Environment and Development Research Institute.
The aim of this project is to facilitate the sustainable development ofHeyuan Village by transforming the village economy so as to safeguard
both local economic development and the local ecosystem. 2011 saw theestablishment of a “Village Bank” to provide funding to support a shift
away from logging towards arable and pastoral farming, and the provisionof training in agricultural techniques began. In 2012, an “Ecological
Scholarships (Education Support)” plan was launched to help families inthe village who were experiencing a temporary fall in income because of
the transformation of the local economy to pay their children’s school fees.
In 2013, the village was provided with equipment and funding support forthe processing of honey, the herb Gastrodia elata, and other agricultural
products, and in 2014 the “Laojunshan Ecological Agricultural and Forestry
Product Sales Platform” was launched. The villagers have also been working
in collaboration with business enterprises, receiving support to help themincrease the value-added of their products through improve packaging,processing, etc., and have received assistance in developing distribution
channels, as well as training in production techniques, etc.
As of March 2015, “Village Bank” branches had been established in nine
locations in Heyuan Village, and 203 households (representing 42% of allhouseholds in the village) were participating in the “Heyuan Community
Sustainable Development and Ecosystem Protection Project.” As a result,average household income rose from 650 Yuan in 2010 to 3,000 Yuan in
2013. The interest paid on loans from the Village Bank was donated to thevillage cooperative for use in ecosystem conservation and sustainable
development initiatives, enabling the ecosystem protection area to be
increased to around 3,055 hectares.
The Heyuan Village project is the first initiative of its kind in China thatcombines environmental protection efforts with economic development(with participation by business enterprises), and the project has attracted agreat deal of positive comment within China. In March 2013 the “Heyuan
Community Sustainable Development and Ecosystem Protection Project”
was selected by the Development Research Center of China’s State Council
as a “Project Observation Point,” and in September 2013 the Project washonored as an outstanding public-interest project in the first “Beautiful
China, Green Magnificence” awards. In January 2015, the Project received
the China Social Innovation Award, and Yokohama Rubber (China), Co., Ltd.

received the Outstanding Corporate Image Award.
With the aim of building on the three years’ experience at Heyuan Village
and expanding the project scope, in the spring of 2015 the provision of
support began to Liguang Village, which is located within the same Nature
Reserve. In the future, Yokohama Rubber will continue its involvement insustainable community development initiatives.

Laojunshan

Message from a local resident

Special Feature:

Mr. Li Yukun

Vice Chairman, Heyuan Eco-Industry Cooperative

Yokohama Rubber’s activities to help safeguard biodiversity in Thailand
by monitoring and mitigating the impact of business activities on the environment

An open day at the Biodiversity Learning Center

Since its establishment in 2004, Yokohama Tire Manufacturing (Thailand)Co., Ltd. (YTMT), which is Yokohama Rubber’s tire manufacturing and sales
subsidiary in Thailand, has been working steadily to minimize the impact of
its production activities on the environment through the implementationof better environmental measures. Starting from 2008, as part of the“Yokohama Forever Forest Project” initiative, YTMT has planted over 60,000
trees in Thailand, helping to create a diverse habitat that can support awide range of living creatures.
In September 2013, YTMT launched a new activity to help safeguard
biodiversity. This involved catching and photographing birds, butterfliesand dragonflies to calculate indicators that can give some idea of thecurrent state of the local environment, as well as investigating the species
distribution, availability of food, habitats and lifecycle, etc.; this information
is being preserved in the form of a database. Using these data, YTMT has
been able to verify that the natural environment in the vicinity of its factory
is in a healthy state; the data are made public for the reference of other

Yokohama Rubber’s Important Issues

When the project was first launched, at a time when we were having trouble making ends meet, nobody really
understood the idea of establishing a “Village Bank” so that everyone in the village could benefit from the aid
money. However, after a series of meetings were held, we gradually developed a more in-depth understandingof the arrangement. Villagers who in the past were viewed as being destroyers of the natural environment are
now playing a leading role in safeguarding the environment, and I believe that being able to obtain benefits
from protecting the environment has changed people’s attitudes. By working together, the villagers have beenable to make steady improvements in the state of the local ecosystem. In the future, we will continue working
to overcome the apparent contradictions between environmental protection and economic development.

interested parties.
In October 2015, YTMT established a new “Biodiversity Learning Center.”
Local residents have been invited to attend presentations at the Center tolearn about YTMT’s biodiversity preservation activities and Yokohama
Rubber’s other environmental initiatives. The local inhabitants commented
that they hoped YTMT can continue making this kind of information
available to the public, and that it would be much appreciated if the Center
could be used as a venue for environmental education activities for local
children. Responding to these suggestions, in February 2016 YTMT
completed construction of a biotope eco-park and an expanded
Biodiversity Learning Center, which are open to the general public.
In the future, YTMT will continue to implement measures to safeguardand enhance biodiversity, and will take steps to share the fruits of its
endeavors as places for joint learning with local schools, local government
bodies and ordinary members of the public.

Some of theliving creatures found in
the vicinity of the factory

Creating the biotope

20

Together with Our Customers

Special Feature:

Yokohama Rubber’s Important Issues

We supply safe andsecure products throughmanufacturing focusedon the heart andtechnology.

Enhancing drivers’ safety and peace of mind when driving on snow-covered or icy roads
Yokohama Rubber introduces the iceGUARD5 PLUS
In August 2015, Yokohama Rubber announced the launch of the
iceGUARD5 PLUS, a new studless tire that provides superior
performance on icy roads. The design for the new tire reflected
end-users’ suggestions regarding their expectations for studless tire
performance, analysis of usage conditions, etc.; intensive market
research helped to solidify the product design concept. Surveys ofdrivers who use studless tires on a regular basis showed that the aspectof tire performance that they were most concerned about was
performance on ice. The road surface conditions in those parts of Japanthat receive heavy snowfall are actually some of the most challenging in
the world. Despite the heavy snowfall, the temperature is usually notespecially low; as a result, the snow melts during the daytime and thenrefreezes as ice during the night, making for very slippery, dangerous
roads.
Yokohama Rubber’s goal was to ensure that our studless tires would
help to keep end-users safe, even in the face of these hazardous roadconditions. We want consumers to be able to drive with complete peaceof mind. This vision led us to develop a Super Absorptive Compoundthat is combined with Absorptive Giant White Gel that is up to 30 times
larger than conventional gel.
The reason why tires tend to slip on icy roads is because the ice
covering the road surface melts due to frictional heat, creating a film ofwater on the road surface. This film prevents the tires from getting a gripon the ice below.
21

Yokohama Rubber’s iceGUARD5 PLUS, with its Super Absorptive
Compound, enhances tire surface absorption capability by 20%
compared to conventional tire products. The film of water on the roadsurface is absorbed almost instantaneously, ensuring good contact
between the tire and the ice covering the road. The Super Absorptive
Compound remains soft even at low temperatures, enabling it to fill thetiny depressions in the ice surface, thereby providing better adhesion,and enabling the tire to maintain its usual grip.
Another impressive feature of the iceGUARD5 PLUS is that this superior
performance on icy road surfaces does not deteriorate over time.
Extended use simulations showed that the deterioration in the ice
friction coefficient is only around one-third of that seen withconventional tire products, ensuring that the iceGUARD5 PLUS is able tocontinue providing users with safety and peace of mind over a long
period.
One of the areas that tire users were most interested in seeing
improvement in was fuel economy. To this end, Yokohama Rubber
combined some of the advanced fuel-efficient tire technologies that wehave developed over the years. Thanks to adjustments to materials andtire structure, rolling resistance has been reduced by 7%.
During development, test drives were performed repeatedly under all
possible conditions and with a range of different icy road surface
scenarios, including slippery road conditions caused by compacted snow,
black ice (where a thin layer of ice forms on the road surface), etc. In thefuture, Yokohama Rubber aims to provide even higher-performance tire
products, with a comprehensive range of functionality including

The use of the improved
Super Absorptive Compound
provides a braking distance on
ice that is 7% shorter than withconventional tires**More detailed test data is available to
the Tire Fair Trade Council.

enhanced ability to perform controlled braking on icy roads, smootheracceleration and braking on snow-covered or icy roads.

[Test data for braking distance on ice (indicator)]

7% reduction in braking distance
Conventional tire
product(iceGUARD5)

Striving for even better performance –Holding test drive days both in Japan and overseas

A scene from the test drive daySpecial Feature:with existing products, and experience how they handle on snow, braking
performance on ice, etc. Although the weather on the day of the test was
un-seasonally warm, resulting in less-than-ideal driving conditions,participants were still able to appreciate the high performance ofYokohama Rubber’s new products and the disparity between these newtires and conventional tire products.
The views and impressions expressed by participants at test drive days
like these will be reflected when Yokohama Rubber is planning new
products in the future, helping us to decide on the positioning and goalsof new products and enabling us to develop products that meetsociety’s needs.

Yokohama Rubber’s Important Issues

To ensure that customers’ reactions to existing products and customer
needs can be properly reflected in the development of future products,
Yokohama Rubber holds test drive days, both in Japan and overseas, forthe companies that purchase our products and for the media.
In fiscal 2015, a special test drive day was held for the new iceGUARD5
PLUS studless tire at Yokohama Rubber’s own T*MARY test track in
Kamikawa district, Hokkaido (operations at which have since been
relocated to TTCH).Over a hundred representatives of customer firms
and of the media took part, having the opportunity to experience
driving cars fitted with the iceGUARD5 PLUS tire in braking on ice tests,
snow slalom, snow hillclimb, and snow handling tests, etc.
After the test drives, participants were asked to give their views, andalso to fill out a questionnaire survey. Besides the many positive
comments, such as “It is a very well-balanced tire; I would be able to sellthis tire with confidence,” and “You can feel quite relaxed going into a
corner, and then put your foot down coming out of the corner and still
maintain good handling,” we also received some useful suggestions for
future product development.
A test drive day has also been held at the Yokohama Test Centre of
Sweden, located in Northern Sweden. There were around 250 participantsfrom Yokohama Rubber customer firms in Germany, Italy, France, Norway
and other parts of Europe. Participants had the opportunity to try out cars
fitted with Yokohama Rubber’s new iceGUARD5 PLUS studless tire, wintertires designed for use in Continental Europe, and studded tires designed
for use in Scandinavia and Russia; they were able to compare these tires

Comments by test drive day participants
Taking part in this test drive day enabled ourdealers to experience Yokohama Rubber’s new
winter tires for ourselves, and showed us thatthese products are high-performance tires
that really do meet the requirements ofdriving in Scandinavia. I feel that these aredefinitely products that we will want to stock.

Mr. Egli Stenshagen
Auto Grip

I am very happy to have had the opportunity
to take part in such a marvelous test drive day.
All of the participants, myself included, had
looked forward to the event very much. I had
never had the opportunity to take part in a
winter test drive day before, which made thisevent even more special. Most of the otherparticipants I talked to felt that, of all the test
drive days they had participated, this was theone which enabled them to evaluate the tire
products with the most precision and clarity.

This was a very well-organized, truly
outstanding test drive day. All of the membersof our team had an incredibly goodexperience. I hope that Yokohama Rubber willcontinue to hold similar events in the future.

Mr. Richard Peto
ALCAR Hungaria KFT

Mr. Michal Kamieniarz
ITR CEE22

To Our Stakeholders and Investors

Special Feature:

Yokohama Rubber’s Important Issues

We improve ourcompany value by
growing business
opportunities.

Ensuring transparency in all our business areas,
and being properly prepared for a wide range of risks
Strengthening corporate governance
The Yokohama Rubber Group has put in place a corporate governancesystem designed to realize sound, transparent, fair business managementin accordance with the Corporate philosophy, and is working to achieve afurther strengthening of this system. In this way, we will be able tomaintain solid management fundamentals supporting continued value
creation, while maintaining the unshaken confidence of all stakeholders.
[Corporate Governance Support System]
Shareholders’ Meeting
Selection, dismissal,
oversight

Accounting
Auditors

Selection, dismissal,
oversight

Audit &
Accounting
audits Supervisory Board

Accounting
audits5 auditors(including 3 outsiders)

Audit

Selection, dismissal,
oversight

Board of Directors
12 directors(including 3 outsiders)

Audit

Proposals

Personnel Remuneration
Committee for
Corporate Officers
and Directors

Management,
oversight

4 committee members(including 1 outsider)

Representative Director
CSR Council

Executive Committee

Compliance Committee

Accounting
auditsCentral Meeting forDisaster Prevention
Environment Council

Head of Corporate
Administration
Internal Audit
Department

Risk Management
Committee, etc.

Internal audits

Corporate Officer/
Each Business Management DivisionCorporate Philosophy/Code of Conduct

Regarding the structure of the board of directors, Yokohama Rubber
has obtained the agreement of the shareholders’ meeting to add an
additional outside director to the board; of the 12 members of the boardof directors, 3 are now outside directors. Decisions regarding personnel
and remuneration matters for company officers are approved by theboard of directors following review by the Personnel Remuneration
Committee for Corporate Officers and Directors; an outside director has
now been added to the membership of this Committee, thereby ensuring
enhanced transparency and fairness in its deliberations.
23

Please note that disclosure pursuant to the requirements of the Code of
Conduct is outlined in Yokohama Rubber’s Corporate Governance Report.
(http://www.y-yokohama.com/profile/governance/)(available only in Japanese)

Promoting engagement with shareholders
With the aim of enhancing understanding of the company’s corporate
vision, business strategy and business plans, since 2013 Yokohama
Rubber has implemented visits to and talks with individual key
shareholders on an annual basis.
Besides holding quarterly business results briefings (attended bysenior Yokohama Rubber managers) for investors and analysts, Yokohama
Rubber also makes a proactive effort to communicate and to disseminate
information, for example by making available its annual report, businessresults, and interim and end-of-period reports on the company’s website.
With regard to stakeholders other than shareholders and investors,
Yokohama Rubber engages in dialog with outside experts, andendeavors to ensure that the views obtained are reflected in thecompany’s business operations. We also create opportunities for regulardialog between the local inhabitants living near Yokohama Rubber’s
overseas production locations and the managers of these production
sites, so that we can listen to local residents’ requests regarding factory
operation; in this way, we strive to ensure smooth coexistence between
our overseas production sites and the districts in which they are located.

Risk management
In order to put in place a framework to ensure that risks affecting the
Yokohama Rubber Group as a whole are properly handled, meetings of
the Risk Management Committee (chaired by the Director responsible for
CSR) are held on a periodic basis, and the company is working constantly
to realize improvements in this area. In 2015, Risk Management
Committee meetings discussed the following issues:●Review of the risk management system●Revision of the guidelines for dealing with emergency situations●Review of the key points to note for persons working or on assignment
overseas in regard to overseas terrorist incidents●Review of the system for the safeguarding of personal information andsharing of informationEffective utilization of the compliance Whistle-Blowing
SystemYokohama Rubber has established a Compliance Hotline contact window
via the company’s Compliance Promotion Office and an external law firm;
this Compliance Hotline is available for the submission of reports by
Yokohama Rubber Group (Japan) directors, regular employees andpart-time employees, as well as by agency and contract staff working in
the company’s facilities. A total of 15,000 Compliance Cards (listing theCompliance Hotline telephone numbers and e-mail address) have been
distributed to all applicable personnel, and the company guarantees thatthe submission of reports will not lead to unfair treatment of the reporting
party. In 2015, the Compliance Hotline handled a total of 95 reports(anonymous or otherwise) and consultations.

[Whistle-Blowing System (Flow chart)]
Whistle-Blower
ReportContact Point

Compliance
Promotion Office

External
law firm

Outcome
Notification

Notification

Compliance Promotion Office
Investigation
Improvement
Instructions

Improvement
Outcome
Notification

Notification

Corporate
Compliance
Committee

Relevant Department

What is expected of an outside director at Yokohama Rubber

OPINI N An Outside Director’s perspective

Outside Director

Special Feature:

Hideichi Okada

I believe that there are three things that are expected of me as an outside director. Firstly, I can observe how
the company is viewed by outsiders, from the perspective of a non-related party. Secondly, I can view thecompany from the perspective of a layman (as opposed to an expert). Thirdly, I can make use of theperspective given me by my international experience, which has involved participating in negotiations withgovernment agencies and businesspeople in countries throughout the world. With all of this in mind, I am
endeavoring to proactively offer my views regarding the company’s management, and ask questions where
needed. I feel that my views are respected by the company in regard to the way it is run.
I get the strong impression that, under the effective leadership of the Chairman and CEO, the management
team at Yokohama Rubber is displaying a high level of cohesion and is advancing steadily in a concerted way. I
feel that the company is boldly moving forward in the development of its global business strategy, and thatthe company’s management is making steady progress in the right direction. In order to realize the goal of
making Yokohama Rubber a truly global enterprise, steps need to be taken to ensure that even more
importance is placed on corporate governance and compliance. To ensure that Yokohama Rubber, with its
world-renowned technology, is able to achieve wider popularity in global markets, I believe that it isimportant to ensure that the company’s management decisions are readily understandable, even whenviewed from overseas. I will be doing my utmost to provide advice that can help, in some small way at least,
towards the achievement of this goal.

Yokohama Rubber’s Important Issues

To help Yokohama Rubber realize its goal of becoming a truly global
enterprise, I aim to leverage my international experience by actively
getting the company’s message across to people outside the industry.

OPINI N An Outside Audit & Supervisory Board Member’s perspective
I believe that Yokohama Rubber can achieve steady growth through thestrengthening of compliance, while taking appropriate measures to handle
the new risks that accompany the expansion of its’ global operations.

Akio Yamada

An Outside Audit &Supervisory Board Member

With Yokohama Rubber aiming to further expand its operations on a global scale, the company will be
required to give due consideration to global standards that take into account the needs of a wide variety ofdifferent stakeholders. The most fundamental requirement in this regard is the need to abide by the laws andregulations of the countries and regions in which the company operates (i.e. compliance).
Yokohama Rubber’s recent acquisition of ATG (Alliance Tire Group B.V.) will necessitate dealing with types of
stakeholders that the company has not had to deal with in the past. It also means that Yokohama Rubber isfaced with new types of risk. Yokohama Rubber will need to respond by further strengthening its internal
controls and compliance.
The Audit & Supervisory Board has a very important role to play in this regard. Yokohama Rubber alreadyhas in place a system whereby, prior to the holding of meetings of the board of directors etc., the Board ofAuditors is provided in advance with detailed information and detailed explanations from the company’s
executive officers. In addition, close communication has been maintained with the internal audit &supervisory board members and the company’s external auditors. There are also opportunities to exchange
views with the Chairman and the President. As Yokohama Rubber’s Outside Audit & Supervisory Board
Member, I intend to fulfill my role properly by expressing frank opinions when appropriate.

24

Together with Our Business Partners

Special Feature:

Yokohama Rubber’s Important Issues

We promote CSR
activities throughout
the value chain.

Implementation of the “CSR Accredited Farms” cultivation project in Thailand –Helping to ensure sustainable production of natural rubber
Y.T. Rubber Co., Ltd. (YTRC), which is Yokohama Rubber’s natural rubber
processing subsidiary in Thailand, has adopted the “Agro-Forestry”
technique advocated by Professor Sara Bumrungsri (of Songkla
University), and has launched a program to cultivate “CSR Accredited
Farms” which can help to ensure sustainable rubber production while
also creating a healthy working environment.

25

Natural rubber is a vital raw material for the production of the tires
and hoses that are Yokohama Rubber’s main products. With the aim of
ensuring sustainable procurement of natural rubber, starting from 2014
Yokohama Rubber has been implementing surveys of biodiversity etc. innatural rubber farms in Southeast Asia that constitute the company’s
main rubber procurement sources. These surveys led to the adoption of
the “Agro-Forestry” approach. Rather than planting only rubber trees in
the form of monoculture, “Agro-Forestry” involves inter-planting rubber
trees with a dozen or so other tree species, including bamboo and fruit
trees.
Surveys conducted in Professor Bumrungsri’s experimental farmshowed that the use of the “Agro-Forestry” technique helps farms tomaintain a state closer to that of natural forest than is possible withrubber tree monoculture, while also helping to conserve the biodiversityof the soil; an additional benefit is that the fruit and timber from theother tree species provide an additional source of revenue, boosting therubber farmers’ income.
It has also been confirmed that reducing the amount of chemicalfertilizer used helps to stimulate rubber tree growth, boost the amountof rubber collected, and increase the lifespan of the rubber trees.
YTRC has been introducing “Agro-Forestry” techniques to YTRC
employees’ families and to local farmers, and has built up considerable
evidence of the effectiveness of this technique. Using the sapling
cultivation know-how developed through the “Yokohama Forever Forest

Project”, YTRC has been providing the saplings of other tree species foruse in inter-planting with rubber trees, to help farmers who are thinking
about adopting this new method.
The implementation of this project has helped to strengthen YTRC’srelationship with rubber farmers and other local residents, and YTRC is
now providing additional consultation and support in regard to issues
that relate to the working environment on rubber farms. It is hoped that
this will contribute to an improvement in working conditions, including
the prevention of child labor and forced labor, etc.
In the future, YTRC will be working in concert with local government
authorities to try to expand the adoption of the “Agro-Forestry” method
to include contract farmers, and will be taking steps to cultivate model“CSR Accredited Farms” whose operations pay due attention to theneeds of the environment, human rights, etc.

Message from the project’s leading advocate

Songkla University

Special Feature:

Professor Sara Bumrungsri

Yokohama Rubber’s Important Issues

Adoption of the “Agro-Forestry” technique can help farmers to obtain income not just from rubber, but also
from vegetables, fruit trees, and medicinal plants, while often also boosting the rubber harvest.
Farmers tend to be reluctant to change their established agricultural techniques, but if they have theopportunity to visit farms where this method has been put into practice, exchange ideas with theresearchers, and develop a better understanding of the techniques used, then this can help to expand thescale of adoption. I believe that the best way to help farmers acquire an understanding of the “Agro-Forestry”
method is for them to be able to visit other farms where the method is already being used, and also for themto receive support in terms of provision of saplings and knowhow.

Implementation of a questionnaire survey regarding CSR-aware procurement
In August – September 2015, Yokohama Rubber implemented a
CSR-aware procurement questionnaire survey and interviews targetingthe suppliers who handle the natural rubber which is a key raw material
for Yokohama Rubber’s main products. The aim was to identify major
issues relating to socially-responsible procurement, and to develop
strategies for solving these problems.
The questionnaire survey was administered to suppliers, particularly in
Thailand and Indonesia (which account for around 93% of all natural
rubber procured by Yokohama Rubber). Suppliers were asked to answer
24 questions relating to conditions on suppliers’ own plantations andalso other rubber farms with which they do business (including
pesticide and chemical fertilizer usage status, measures taken toconserve forests and ecosystems, etc.), as well as the working
environment for their company employees, human rights protection,etc.
The results obtained showed that almost all suppliers were meeting
requirements in terms of the employee working environment,
environmental protection measures, etc. However, some of the answers
suggested that not all suppliers were clear about the usage of fertilizers
on natural rubber farms other than their own in-house plantations, orabout the legal and regulatory requirements in the districts in which
they were operating.
We were also able to verify from the survey results that suppliers were
providing support, in a variety of forms, to help boost productivity andtechnical capabilities at the rubber farms with which they do business.
Yokohama Rubber is considering providing similar support activities
itself in the future.
In regard to CSR-aware procurement, in April 2016 Yokohama Rubber
held the first-ever Suppliers’ Day for the company’s natural rubber
suppliers. The event was attended by 41 representatives of 24
companies in five different countries. There was a presentation on
Yokohama Rubber’s CSR-aware procurement policy, and a lively
exchange of views regarding various CSR-related issues.
Yokohama Rubber also holds annual study meetings for thecompany’s suppliers. The fiscal 2015 study meeting features discussionof issues that included compliance and CDP Water Disclosure. From thepoint of view of maintaining a stable, continued supply of raw materials,
the strengthening of relations with suppliers (including natural rubber
plantation operators) is very important.
In the future, we will continue to implement surveys and visits tofarms, both independently and in collaboration with suppliers andrelevant government agencies, while also organizing study meetingsand discussion meetings in different regions. Our aim is to realize
CSR-aware procurement, including natural rubber related activities, thathelps to build a strong relationship with local suppliers while at thesame time contributing to local development and the safeguarding of
the natural environment.
26

We value anddevelop our people,
and create opportunities
for people.

Special Feature:

Yokohama Rubber’s Important Issues

Together with Our Employees

The “In-house Skills Olympics” –Aiming to raise skill levels and facilitate the transmission of skills to new generations ofworkers at production facilities throughout the world
The Yokohama Rubber “In-house Skills Olympics” has been held every
year since 2012 as one of the company’s measures to enhance skill levels
for important skills throughout the company and ensure that skills arehanded down to new generations of workers, thereby helping to ensurethat “frontline” manufacturing and equipment proceeds smoothly.
Following the preliminary rounds, the teams (comprising Yokohama
Rubber workers from different production locations around the world
who are aged 27 or under, or have been with the company for less than
5 years) travel to Japan for the finals, where they have an opportunity to

A scene from the practical tasks in the 2nd “In-house Skills Olympics”

27

demonstrate their superior skills and know-how in competition with theother teams. The participants in the 4th “In-house Skills Olympics” in2015 included young employees from 15 tire production facilities inJapan and 26 facilities overseas. Besides receiving coaching from theircolleagues and supervisors at their respective facilities, the participantsalso continued to practice the skills on which they would be tested rightup until the day of the finals.
Besides a written exam, the tests included in the first “In-house Skills
Olympics” in 2012 included arc welding and operation of high-speed
cutters and screw-cutting lathes, all of which are vital skills in tire
production; these practical tests took approximately three hours tocomplete. For the third and fourth “In-house Skills Olympics” in 2014 and2015, the written exam was accompanied by practical tests that covered
every aspect of electrical control technology, including electrical circuit
diagram preparation, control panel construction, and software
compilation. The participants began their preparations three days before
the finals; on the day, each team had 15 minutes to complete thepractical tasks.
To ensure that teams from other countries are not unfairly
disadvantaged, every year the test materials and questions aretranslated into each team’s language.
Comments from participating team members have included: “Taking
part helped me to realize the importance of being to get tasks finishedwithin a specific period of time,” and “Having learned how to resolve

problems rapidly, I am looking forward to using these new skills in myregular work.” By bringing together contestants from different countries,
the “In-house Skills Olympics” also provide a marvelous opportunity forpromoting exchange and communication between shop-floor
operatives from Yokohama Rubber facilities in different countries.
Not only do the “In-house Skills Olympics” help to enhance the speed
at which technology levels are raised (through healthy rivalry), reports
from individual production facilities suggest that participating has also
helped to change employees’ mindsets.
In the future, the Yokohama Rubber Group will continue to hold the“In-house Skills Olympics,” and will be putting in place a system so thatoverseas plants can provide support for other plants, so that Yokohama
Rubber’s monozukuri-based technology can be taken to an even higher
level, and passed down to new generations of employees.

The practical tasks competition in the 4th “In-house Skills Olympics”

Comments from participants in the “In-house Skills Olympics”

Yokohama Tire Manufacturing Virginia, LLC (YTMV)

Enhancing safety awareness by giving employees the opportunity toexperience danger in the “Safety Dojo”
In line with the Yokohama Rubber Group philosophy that “health andsafety is the foundation of everything we do,” one of the health andsafety targets that we have set ourselves is to “Build a safety culture
aimed at reducing workplace risk to zero by fiscal 2017.” To realize thisgoal, we are working to eliminate risk from three angles: “People,”“Things (i.e. facilities),” and “Systems.” One of the measures that havegenerated particularly good results in terms of raising safety awarenesshas been the “Safety Dojo” initiative, which has been implemented at all
Yokohama Rubber production locations, both in Japan and overseas.
On the shop-floor of a factory, people often don’t realize the danger ofgetting too close to machines that are in operation, and sometimes they
thoughtlessly do things that would appear clearly dangerous in othercircumstances. The goal of the “Safety Dojo” program is to use
techniques such as virtual reality and visual examination, focusing on
equipment when actually in operation in the factory, to heighten
employees’ awareness of potential risks.
At Yokohama India Pvt. Ltd. (YIN), Yokohama Rubber’s tire production
plant in India, all employees are required to undergo annual safety[Number of “Safety Dojo” participants at YIN]
(Persons)

200

177

150
100

105
56

50
0

Oct. 2015

Nov. 2015

Dec. 2015

Special Feature:

André Meyers and Matt Perry

Yokohama Rubber’s Important Issues

One of the challenges in the 4th “In-house Skills Olympics” involved collaborating with contestants fromanother factory, which meant working with people who spoke a different language; starting from three days
before the finals, we were working with them on circuit diagram preparation, control panel construction, andsoftware compilation. Being able to complete the task successfully by sharing ideas and encouraging one
another gave us a really special feeling of satisfaction, and it was great to share the joy of success with ourcolleagues from the other plant. We are looking forward to making use of the electrical know-how that wehave acquired back at our plant, and also to being able to provide support for other employees from ourplant who may be competing in the “In-house Skills Olympics” in the future.

“Safety Dojo” at YIN

training covering 10 types of equipment; new hires have to undergo this“Safety Dojo” training before they are allowed to actually begin work on
the shop-floor. Between the commencement of classes in July 2015 andthe end of December 2015, all 338 employees at the plant completed
this safety training. Participants were made more aware of the risk
associated with particular items of equipment and of the types of injury
that could be suffered, and made comments such as “Being able toactually see the risks and dangers for ourselves using virtual reality has
brought home to us the importance of following procedures strictly.”
This training has helped to reduce the incidence of accidents at YIN to avery low level.
In line with Yokohama Rubber Group’s goal of reducing to zero thepossibility of serious accidents involving the equipment in use at ourdomestic and overseas production locations, in fiscal 2015 YIN identified
3,284 potential risks; effective measures to ameliorate these risk havebeen taken in 3,218 (approx. 98%) of cases.
Through these measures, YIN is working to comprehensively eliminate
the dangers associated with production processes, and to firmly implant
the importance of safety in employees’ minds.
28

Introduction of New Technology

Introduction of New Technology

Taking Yokohama Rubber’s technology to a whole new level

Airflow around a moving vehicle (conceptual image)

Further improvements in aerodynamic
technology
Yokohama Rubber pays considerable attention to aerodynamics,
specifically to controlling the airflow around the sides of a moving tire;
this is partly to reduce tires’ rolling resistance, and also for the potential
environmental benefits. Since 2010, we have been undertaking ongoing
research using aerodynamics simulations.
When a vehicle is moving, it is affected by air resistance acting fromvarious different directions; the amount of air resistance experienced by
the vehicle can affects its fuel consumption. At the same time, airflow
around the vehicle’s tires is highly complex, and it is known that thismovement can affect the air flowing around the vehicle as a whole. Bychanging the airflow around the tire, by means of adjustments to thetire’s shape (including the adding of small protruding “fins” to the side of
the tire), it should be possible to reduce the air resistance of the vehicle
as a whole, thereby contributing to an improvement in fuel economy.
This concept was the starting point for the R&D that Yokohama Rubber
undertook.
With the latest technology, simulations indicate that it should bepossible to reduce vehicle air resistance by 2 – 3%, roughly equivalent to
reducing tire rolling resistance by 2 – 3%.
Thanks to this attention to airflow and the resulting R&D work,
Yokohama Rubber has succeeded in developing new aerodynamic
technology that helps to control vehicle lift when a vehicle is moving.
Controlling lift not only contributes to vehicle safety, it also has apositive impact on vehicle stability; up until now, it had proved difficult

29

to combine effective lift control with low air resistance. Yokohama
Rubber’s new aerodynamic technology, which reduces air resistance
while also controlling lift, is thus a real breakthrough.
In the future, Yokohama Rubber will continue to build on theseresearch achievements to realize further improvements in tire
performance.

Adding protruding fins to the side wall of the tire helps to control airflow

Laying the foundations for next-generation technology
Development of biomass-derived synthetic
rubber[Biomass-derived synthetic rubber]
Resource depletion due to the use offossil fuel derived raw materials

Plant-derived cyclic resources

CO2

CO2

Energy production
and useful materials

CO2 sequestered sinceprehistoric times

Fossil fuels:
Coal and petroleum

Useful materials
Plastics and rubber

Introduction of New Technology

Synthetic rubber, the main raw material used in tire manufacturing, isgenerally derived from petroleum. Producing synthetic rubber frombiomass rather than petroleum could contribute to a significant
reduction in carbon dioxide emissions. Yokohama Rubber has been
undertaking a variety of research programs in collaboration withexternal research organizations with the aim of developing
biomass-derived synthetic rubber. In fiscal 2015, this research bore fruitwith the successful development of two important new technologies.
The first of these breakthroughs, resulting from collaborative researchby Yokohama Rubber and Tokyo Institute of Technology, is thedevelopment of technology for synthesizing butadiene from cellulose (asugar that is a key component of plant fibers) using industrial solid
catalyst technology. Butadiene rubber, which has outstanding durability
and resistance to low temperatures, is one of the most widely produced
and widely used forms of synthetic rubber; if biomass-derived butadiene
can be effectively commercialized, then this can be expected to lead to asignificant reduction in the amount of fossil fuels consumed.
The second breakthrough is the result of collaborative research

between Yokohama Rubber, National Research and Development
Agency RIKEN, and Zeon Corporation. Using cell design biotechnology,
we have succeeded in developing technology for synthesizing isoprene(the raw material for producing synthetic polyisoprene rubber) frombiomass. Synthetic polyisoprene rubber has a chemical structure very
similar to natural rubber, and is sometimes referred to as “synthetic
natural rubber.” The development of this new technology has immense
significance; not only will it contribute to reduced consumption of fossil
fuels, it will also provide a new raw material that can supplement natural
rubber (which is characterized by pronounced fluctuations in both priceand production volume).
If these biomass-derived synthetic rubber technologies can becommercialized, then it should be possible to reduce the carbon dioxide
emissions associated with rubber manufacturing to around one-quarterof the current level. While there are still significant obstacles to be
overcome in terms of production cost, etc., nevertheless, whether
viewed in terms of reducing the burden on the environment or of
ensuring a stable supply of raw material, there is a clear need tocontinue undertaking R&D aimed at the commercialization of thesetechnologies so that they can be used to revolutionize the mass
production of tires.

Plant photosynthesis
CO2 absorption

Plant-derived
biomass30

Yokohama Rubber

ISO26000 Compliance Activity
Report[Self-evaluation code] ○: Achieved or improved △: Unachieved or unchanged ╳: Deteriorated
Our Goals● Continuous improvement of corporate value and an identity that is trusted by all stakeholders.
Economic performance
Allocation of economic value(non-consolidated)

Organizational
Governance
The global environment

million yen

400,000

Accomplishments

(

1,000
2014

2015

○

Self-assessment

1,245
participation
rate 93%

0

FY

)

2013

(
2014

988
participation
rate 82%
2015*No. of complaints received
through official channels

5

4

4

3

3

2

2
1
0

0

0

2013

2014

2015

0
2013

0

FY

0
2014

0
2015

FY

○

Target for FY2016

0 casesTarget for FY2016

0 cases● To be an organization that allows people of diverse ages, genders, and nationalities to demonstrate theirmaximum capabilities● Establishing a zero-hazard culture of safety by promoting physical and mental healthOccupational Safety and HealthTraining and education programs

Lost worktime rate (consolidated)

Cost for education and training(non-consolidated)％Accomplishments

0.4

Diversity and equal opportunity
Female employment rate formain career track (singly)*Additional information: rate of female employees(consolidated): 14%％

million yen

0.47

0.42

200

0.40

177

171
150

0.3

32

146

30
20

0.1

50

10

0

0

2013

Partners

2014△

Self-assessment

2015

FY

2013

2014

38

40

100

0.2

2015

0

FY

25

2013

○

*Internal target
not reached

2014

2015

FY

○

● To make all of our products environmentally friendly ● To reduce the total amount of GHG emissions (to 50% lessthan 2005 levels across the value chain) ● To promote the efficient use of water resources according to thecharacteristics of water risks ● To develop biodiversity conservation activities at production sites
Materials

Water

Products and services

Total amount ofmaterials used(consolidated)

Water intake(consolidated)

Environmentally-friendly
product rate among
all of our products(consolidated)

thousandtons

Self-assessment

FY

○

Cases

○

0.5

The global environment

2015

Official number of complaints to the Grievance
Mechanisms (consolidated)

Self-assessment

Accomplishments
The
Environment

2014

Number of jobs identified as suspected childlabour or forced labour

Partners

Our Goals

2013

Human Rights Grievance Mechanisms

0

Employees0Child labour / forced or compulsory labour

1LabourPractices

10

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

Accomplishments

Our Goals

20

△

5

Employees

)

31

27

30

Target for FY2017
At least 90% of employees to have undergone training

Cases

Human Rights

50

40

2,000

2013

*Does not include
non-anonymous consultations

50

3,000

*per 1 million hours

31

5,788 (participation rate 99%)

Whistle-blowers (consolidated)
Cases
60

4,000

0

Our Goals*among eligible
employees

5,000

300,000

Stockholders and investors

ISO26000 Compliance Activity Report

379,842

100,000

Customers

Employees

Persons
6,000

200,000

Local community

Partners

397,087

381,424

ComplianceTraining participants(non-consolidated)

800

766

791

thousandm3

789

10,000
8,000

600

％

8,280

8,660

100

8,728

93

95

Biodiversity Conservation
Implementation rate ofconservation activities
at production sites(consolidated)
％

98

50

80
60

30

4,000

40

20

200

2,000

20

10

0

0

0

2013

2014

○

2015

FY

2013

2014

○

2015

FY

* Due to the expansionof the scope of
calculation

39

40

6,000

400

*Scope of estimation
has been adjusted

2013

2014

○

2015

0
FY

Target for FY2017

100%

29

32*

2013

2014

○

2015

FY

In FY 2014, the Yokohama Rubber Group selected priority issues for each group of stakeholders.
In this section, we report on the priority items identified according to ISO26000 and our progress toward achieving
them, as well as the data requested for disclosure.
Please refer to our CSR Website for background details regarding the importance of each priority, our goals, ouraspirations, the FY 2015 activity report, the challenges we faced, and future measures.

Please refer to our CSR Website for detailed reports ofeach achievement

Air emissions

Total consumption(consolidated)

Greenhouse gas emissions(consolidated)

1,455,347

1,500,000
1,250,000

1,180,827

1,231,611

1,000,000

The
Environment

750,000

298,937

311,668

368,932

500,000
250,000
0

The global environment

Partners

2014○

Accomplishments

thousand
tons

500,000

30,000400,000

20,000300,000
200,000

500

100,000

250

FY

Scope
(3)
23,831*No. of complaints received throughofficial channels

Cases

10
8

Scope Scope(1) (2)
328 328

Scope Scope(2)(1)
334 351

6

Scope Scope(1) (2)326 358

4
2

0

0

Scope
(3)
30,844Scope(3)23,301

2013

2014

○

*Due to the expansion of
the scope of calculation

2015

FY

0
2013

0

0
2014

○

*Due to the expansion of
the scope of calculation

0
2015

FY

Target for FY2016
0 cases● CSR activities in collaboration with our partners
Environmental, human rights,
and labour practices of our partners
Social impact assessment

Partners’ compliance complaint(Grievance Mechanisms for
Impacts on Society)

Participating companies
in our CSR workshops for partners

Percentage of partners that westarted working with after impact
assessments (consolidated)

Official numbers of complaints to
the Grievance Mechanisms(consolidated)

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

％
100

100

Cases

100

100

*No. of complaints received throughofficial channels*Small and medium size companies with which
we have a stable amount of businessCompanies

90.5

90.3

90.3

298

299

317

％

5

500

80

4

400

60

3

300

40

2

200

40

20

1

100

20

0

0

2013

2014

○

Self-assessment

Our Goals

2015

KL

Official number of complaints
to the Grievance Mechanisms(consolidated)

2015

FY

0
2013

0
2014

○

Target for FY2016

100%

0
2015

FY

0

2013

Target for FY2016

0 cases

100
80
60

0

2014

2015

○

90% or higher

FY

Target for FY2016● Achievement and maintenance of zero violations of regulations and voluntary codes concerning usage of our
products and services

ISO26000 Compliance Activity Report

Fair Business
Practices2013

Self-assessment
Our Goals

Environmental Grievance
Mechanisms

EnergyMWhAccomplishments

http://www.y-yokohama.com/global/csr

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

5

ConsumerIssuesAccomplishments

4
3
2
1
0

Customers

Community
Involvement
andDevelopment

Local society

1

1

1

2013

2014

2015

*There were errors in tire labeling data,
which were attributable to Yokohama Rubber
FY

Self-assessment△

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

Self-assessment

0 cases

Local communities

Promotion of the Forever Forest ProjectMarket Presence

Community activities at production
sites Implementation rates(consolidated)

Number of trees planted in ayear (cumulative) /Target achievement rate

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

Target for FY2016

100

100

100

No. of trees

100

500,000
74

83

％

％

100

100

80

80

60

60

40

40

80

400,000

60

300,000

40

200,000

20

100,000

20

20

0

0

0

0

2013

2014

○

2015

FY

Target for FY2016

100%

65
325,7062013

369,1502014○

414,6972015

FY

Target for FY2017

500,000 trees

100

100

2013

2014

○

100

2015

FY

Target for FY2016

100%

32

Response to Outside Experts’ Opinions
Yokohama Rubber took the following actions in response to the opinions expressed by outside experts Ms. Mariko
Kawaguchi and Mr. Hideto Kawakita in discussions regarding CSR Report 2015. A selection of these actions ispresented below.

Views and suggestions put forwardby Ms. Kawaguchi and Mr. Kawakita

Yokohama Rubber’s Response

Response to Outside Experts’ Opinions

Organizational Governance
It is vitally important that, besides encouraging subordinates to take a
responsible approach towards the specified materiality (important
issues), senior management must also commit to these objectives, andthe various measures must be linked together organically. In particular,
because senior managers’ commitment is seen as being especially
important, attention must be paid to this point when undertaking
disclosure.

The CSR Council and Environmental Council, both of which are chaired by the
President, are held twice a year, and a framework has been put in place for relevant
departments to formulate and review measures relating to the important issues that
the Yokohama Rubber Group needs to tackle. In addition, matters that could have an
impact on the Group’s operations are reported to the Executive Committee, and thenimplemented once the Executive Committee’s approval has been obtained.
Furthermore, the Yokohama Rubber Group’s commitments have been announced in
the Chairman’s Message and in the top-level interview.

It would be good to see Yokohama Rubber clarify “what,” “when” and“how” it is doing in regard to achieving thorough visualization of themeasures being implemented with respect to environmental, social andcorporate governance (ESG). The key issue here is the extent to whichtransparency has been enhanced.

Yokohama Rubber Group is working towards the realization of building “a trusted
identity as a contributing member of the global community.” Information on the
ESG-related positive and negative impacts of measures implemented by relevant
departments are reviewed by the department head, the responsible director, the CSR
department (compliance etc.), and by senior management, thereby ensuring
accurate transmission of information.

Regarding materiality, clarification is needed as to precisely whoparticular issues are material to; this will require more precise, more
concrete definitions of the targets of particular issues. With regard to
the concept of being an enterprise that continues to be valued bysociety over the long term, there is a need to determine a priority orderas to precisely who the company is important to.

Yokohama Rubber positions the global environment, local communities, customers,
shareholders and investors, suppliers, and employees as our important stakeholders.
In accordance with the principles and goals of the U.N. Global Compact, and in linewith the framework prescribed by ISO 26000, we implement measures with regard to
the important issues (materiality) that the company should be addressing, and strive
to contribute to the resolution of social issues. We have established a priority orderfor the activities we see to implement; for example, with respect to customers weprioritize customer health and safety, with respect to suppliers we prioritize supplier
human rights assessment, and with respect to employees we prioritize occupational
health and safety, diversity and equal opportunities, etc. (see page 5).

The Environment
As a tire manufacturer, ensuring a stable supply of natural rubber andsynthetic rubber is a key issue for you. One would hope that you could
find a way to explain to consumers, in an easy-to-understand way, thesignificance of your efforts to ensure efficient utilization of resources.

We are currently working to reduce the weight of our products, and to manufacture
them using the smallest possible quantity of resources and with the greatest possible
potential for recycling and reuse. In this way, we can help to improve vehicles’ fueleconomy while also contributing to the prevention of global warming through the
reduction in carbon dioxide emissions. In addition, because countries and regions indifferent parts of the world have different road surfaces and different climaticconditions, we are working to raise awareness of the need to check one’s tirepressure on a regular basis. Also, as part of our efforts to ensure that used tires areproperly disposed of, we monitor the status of illegal tire dumping, and we try toensure the implementation of recycling systems that reduce the amount of waste
generated by ensuring effective utilization of resources. We also endeavor to spreadawareness of these products and services in an easy-to-understand way.

Fair Operating Practices
As a continuation of its ambitious overseas expansion strategy,
Yokohama Rubber is now attaching considerable importance to M&A
activity. It would seem to be important to evaluate the firms with which
Yokohama Rubber forges tie-ups from an ESG perspective, and to
identify the potential risks that linking up with these firms may bring.

In line with our goal of being an enterprise that plays a valued and irreplaceable rolein society, we and the companies that we join up with do implement mutual
appraisal from an ESG perspective, and work to build mutual trust, so as to facilitate
the sustainable development of the Yokohama Rubber Group.

Consumer Issues

33

Rather than merely viewing CSR as a means of safeguarding oneself
against risk, it would seem to be advisable for Yokohama Rubber to aim
at creating value through the adoption of a more proactive approach
towards reducing the burden on the environment and enhancing safety.

The single biggest impact that tires have on the environment is the carbon dioxide
emissions generated when the vehicle to which the tires are attached is in motion.
With this in mind, we are endeavoring to spread awareness of the importance of
having all vehicles fitted with low-energy-consumption tires, which not only help tosafe energy but also make for safer driving in rainy weather.

It would be seem to be important for Yokohama Rubber to spreadawareness of the positive benefits to society from the company’scontribution towards safer and more energy-efficient “driving, turningand braking.”

Regarding tire performance, we inform customers of the level of performance that
our tires provide with respect to rolling resistance and wet-grip performance; we arecontinuing to implement measures to spread awareness among consumers of theneed to fit the most appropriate type of tire for each particular vehicle, and of theneed to ensure that the tire pressure is correct.

Would it not be a good idea for Yokohama Rubber to prioritize helping
elderly derivers in Japan’s Tohoku Region to cope with the need todrive in snowy conditions, so as to ensure that senior citizens in thisregion can maintain their mobility safely?

We view helping senior citizens and people living in under-populated, remote areas
to drive safely as an important social issue. We share information with local
government authorities and related organizations, and we are examining ways tohelp arrange tire checks and tire replacement service for senior citizens; although ourcontribution so far has been less than we could have hoped, we have also been
providing winter tires for the use of senior citizens.

Third-Party Opinion
The description herein refers to the opinions based on this report, a related website(http://www.y-yokohama.com/global/csr), and also interviews held with persons incharge from the planning, quality assurance and materials functions of Yokohama
Rubber’s Tire and MB divisions, as well as from the Corporate Quality, Human
Resources and Health and Safety, General Affairs, Compliance and CSR departments,
along with on-site observation of activities aimed at helping to safeguard
biodiversity at the Hangzhou Plant of Yokohama Rubber Group member company
Yokohama Rubber Industrial Products Shanghai Co., Ltd.
Suffice to say, Yokohama Rubber’s various approaches to CSR are steadily
progressing under the PDCA management cycle, especially with regard to its
mitigation of environmental impacts.

Hideto Kawakita

CEO and Editor/Publisher of Socio Management
International Institution for Human,
Organization and the Earth (IIHOE)IIHOEThe International Institute for Human, Organizationand the Earth is a non-profit organization establishedin 1994 for the democratic and balanced developmentof all the lives on the earth. Although it mainly provides
management support for citizens’ groups and welfare
workers, the group is also heavily involved in providing
CSR support to large corporations.
http://blog.canpan.info/iihoe/ (available only in Japanese)

Truly Commendable Areas

While Approving of Progress, Areas that May Require Further Improvement Regarding corporate governance and CSR promotion system (http://www.
y-yokohama.com/global/csr/report/governance/management.html), while I
commend Yokohama Rubber for establishing interim targets up to 2017, when it
celebrates its centennial anniversary, and promoting initiatives using key performanceindicators (KPI) based on the core issues addressed by ISO26000, going forward I
sincerely hope the Company will develop a system that, led by the managers
responsible for planning in each division, focuses on the Company’s position in world
markets and the evolution of its business model in the 2020s, and in particular, that it
will continue to use targets and measures created using a bottom-up approach at its
domestic and overseas sites in order to incorporate many different values globally inits management decisions and practices, and to promote the appointment of a diverse
range of human talent to managerial positions. In terms of its reporting andcommunication, I would like to commend the Company for providing more detailed
being
introductions of the initiatives (http://www.y-yokohama.com/global/csr/data/）
carried out by major Yokohama Group business locations in Japan and abroad; I hopethat the Company will continue to provide this information in more detail, and alsothat the Company will promote stakeholder engagement further as required by
ISO26000, setting up opportunities for continuous dialogue with NPOs in important
operating regions.
 Regarding its quality assurance promotion system (http://www.y-yokohama.com/
global/csr/report/consumer/consumer02.html), in regard to the discovery in February
2016 that the Yokohama Rubber had shipped tires with incorrect product labels
attached, I commend Yokohama Rubber for implementing measures to prevent
reoccurrence and for launching a “Company-wide Key Essentials Management
System”; in the future, I continue to look forward to seeing the Company incorporate
the minimization of impacts on customers as part of its management indicators andfurther advance quantitative and effective measures.

Third-Party Opinion

 Regarding conservation of biological diversity (http://www.y-yokohama.com/
global/csr/report/environment/environment03.html), I commend the Company forcarrying out initiatives to foster a correct understanding of ecosystems and thepositive and negative impacts that the Company’s operations have on them, including
by hosting employee-led workshops and briefings for the local community as well as
conducting activities aimed at conserving biological and ecosystem diversity
autonomously across a wide area, at seven factories in Japan, including the Mie Plant,
based on the preliminary studies implemented at 15 of the Company’s businesslocations both in Japan and overseas in fiscal 2010. In particular, I highly praise the factthat members comprising managerial employees taking part in activities at the Mie
Plant have taken the lead in the monitoring efforts, which are ongoing. The Company
has also begun to implement continuing efforts to monitor the state of ecosystems inthe vicinity of its overseas production facilities, such as the Hangzhou factory. I hopethat the Company will continue with these efforts, which use surveys of the current
situation to provide a foundation for safeguarding and revitalizing ecosystems, at both
its Japanese and overseas facilities in the future.
 Regarding the Yokohama Forever Forest Project (http://www.y-yokohama.com/
global/csr/mori/index.html), in the eight years since the project was launched
Yokohama Rubber’s domestic and overseas sites have planted more than 410,000
trees with sufficient consideration towards the conservation and improvement of
biodiversity. They nurtured the seedlings on their own, and not only were 83%
supplied within the Yokohama Rubber Group in fiscal 2015 in Japan, but also they
have provided a cumulative total of more than 270,000 seedlings so far to municipal
governments and other companies. I also commend the Company for playing aleading role in the “Green Coastal Levee that Protects Lives” project planned for thoseareas affected by the Great East Japan Earthquake. I also truly commend thisworld-leading initiative for contributing to society to preserve and improve forest
ecosystems and greenery. Going forward, I hope that the Yokohama Forever Forest
Project website will evolve into a portal that also introduces (in a multilingual format)
many examples of similar initiatives taking place at other companies.

 Regarding the reduction of environmental impacts (http://www.y-yokohama.com/
global/csr/report/environment/), I would like to commend the Company for its
development of technology that helps to make tires lighter, with better aerodynamic
performance, and for its improvement (compared to the previous year) andachievement of interim targets in regard to total waste generated (on a per unit ofproduction output basis) and greenhouse gas emissions (total emissions). Goingforward, I strongly encourage the Company to try to meet the target that the Japanese
government has recently set of reducing greenhouse gas emissions by 26% by 2030
(compared to 2013) as soon as possible, and to thoroughly shed light on its challenges
and methods, such as transitioning to the non-fixation of energy usage adjustable tothe fluctuation of production volume (Just- In-Time for Energy), and also to expand theuse of powdered recycled rubber.
 As for CSR at suppliers (http://www.y-yokohama.com/global/csr/report/partner/), I
commend the Company for encouraging natural rubber suppliers in Thailand to adopt“Agro-Forestry” techniques, for continuing to hold CSR workshops for suppliers in key
countries, and for establishing a commendation system based on feedback fromsuppliers in regard to the results of supplier self-checks and field surveys. In order tomore effectively improve initiatives being undertaken by suppliers, I strongly
encourage the Company to implement more detailed evaluation of individual items
and measures taken, and to establish a support system with suppliers for sharing andproblem solving actual cases and further understanding initiatives in greater detail.
 As regards employee safety (http://www.y-yokohama.com/global/csr/report/
employee/employee01.html), I commend Yokohama Rubber for responding to theserious accident that occurred in fiscal 2013 by investigating and rectifying thesituation company-wide, and expanding the scope of the rectification efforts toinclude temporary and agency staff; the Hangzhou factory is also now implementing
experiential training on an annual basis, with all employees from the plant manager ondown required to participate. Moving forward, I continue to urge the Company toincorporate safety improvements and remedies for facility specifications without failand to issue a report about the progress of evaluations and improvements to ensure
the greater effectiveness of safety measures.
 Regarding improvement of workplaces’ ability to retain employees(http://www.y-yokohama.com/global/csr/report/employee/employee03.html), I
commend the fact that 3.91% of Yokohama Rubber employees took advantage of thesystems for paid vacation, leave of absence or shorter work hours in order to care for achild or family member in need, and that Yokohama Rubber is working incollaboration with the labor union to arrange the holding of nursing care leaveseminars. I continue to strongly urge the Company to establish an environment where
employees can continue to work, while also taking leave. In terms of mental healthcare, I commend the Company for establishing hotlines where employees can discuss
any problems they may be experiencing, including non-work-related matters; I hopethat the Company will promote more effective measures of this kind in the future. I
also praise the Company for making progress with the reemployment of retired
workers and I expect the Company to encourage the participation and involvement of
reemployed workers in their local communities.
 As regards the enhancement of the human resource portfolio required as a
global corporation over the midterm, I think it is good that the Company iscontinuing to strengthen personnel development efforts across the Group (including
overseas business locations) for managerial level employees; for example, at theHangzhou plant, employees who were working at section chief level when the plant
was first established have since been promoted to department manager. Meanwhile,
going forward, I strongly encourage the Company to accelerate its development of thenext generation of executives at both its head office and overseas sites based on along-term goal and strategy that reflects how the Company sees itself being
positioned in global markets in the 2020s, and the business models that it expects tohave adopted.
 As regards employment of persons with disabilities (http://www.y-yokohama.com/
global/csr/report/employee/employee03.html), I commend the Company for achieving thestatutory employment rate of persons with disabilities and expanding job
opportunities. I ask that the company to continue to work proactively toward
implementing measures to ensure that employees with disabilities are retained overthe long term.

Response to Third-Party Opinion
While we have received positive feedback regarding the progress made in
our CSR initiatives, we take suggestions and recommendations very
seriously, as something to be improved upon in continuing to meet the
expectations of our stakeholders.
Safe workplaces, and the physical and mental wellbeing of employees,
represent the very foundation of our corporate management, and we view
it as being very important that employees of the Yokohama Rubber Groupbe able to carry out their duties safely. To this end, we are working, on a
global basis, to build a working environment in which employees canmaximize their potential and continue to work, by establishing a laborsystem that meets employee needs with respect to childcare, nursing care,etc., through mental health provisions, and by expanding the recruitmentof a diverse range of human talent.

In addition, in order to ensure that our business operations can continue
in a sustainable, stable manner, in the future we will continue to strive to
make a positive contribution to local communities in the countries where
we operate by providing products and services that help to addressenvironmental and social issues, and through the implementation ofactivities to safeguard biodiversity, etc., in the vicinity of our businesslocations.
We will also be collaborating with social welfare organizations to develop
new ways for persons with disabilities to work.

Shuichi Tsukada

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

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

CSR Planning Department
36-11 Shimbashi 5-chome, Minato-ku, Tokyo
105-8685, Japan
Tel. +81-3-5400-4705

Environmental Protection Promotion Department

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

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ダミー

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