Foundation for Value Creation

Sustainability Strategies

Tackling climate change -- Initiatives based on TCFD recommendations and theSustainability

challenge to achieve carbon neutrality -We can afford no further delay in tackling climate change. The Nihon Parkerizing Group will fulfill its accountability to
stakeholders by disclosing information based on recommendations of the Task Force on Climate-related Financial
Disclosure (TCFD). At the same time, we will meet our corporate responsibility by identifying the risks and opportunities of climate change, evaluating the business impact and financial impact through scenario analysis, and implementing remedies to explore the sustainability of our business.

In July 2023, we set up a Sustainability Committee headed by the Chairman, Presi-

Governancedent and CEO to explore ways to achieve growth that does not burden society. What

In July 2023, we set up a Sustainability Committee to achievesustainable growth under our management philosophy while
also enhancing both economic and social value and continue
to pursue initiatives related to sustainability, including thoserelated to climate change, in response to rising demands andexpectations that companies contribute to the realization of asustainable society.
The committee is chaired by an executive director appointed
by the President and CEO and is responsible for the execution ofrole should we play in society in response to demands for sustainability? We arecommitted to addressing social issues and working with society in the three business domains of chemicals, engineering, and processing.

Aiming to “make effective use of limited
resources and realize an affluent, sound society”
Our corporate philosophy is: “We are contributing to the effective use of limited resourceson planet Earth, creating new value of resources through surface modification of all
kinds of materials, preserving the global environment, and realizing an affluent
society”.
Since we introduced Japan’s first rust prevention technology (phosphate conversion
treatment technology), we have contributed to a wide range of fields, from core industries to cutting-edge industries in surface modification, mainly for metals. As a leader inall sustainability-related tasks. This committee meets four times
a year to discuss the scenario analysis results based on the
TCFD recommendations, issues related to measures to address
climate change, and issues associated with establishing andprogressing towards qualitative and quantitative targets.
The committee reports these deliberations to the Executive
Committee and the Board of Directors at least once a year
without delay. The Board of Directors oversees the company’s sustainability activities.

Strategies
Based on short-, medium-, and long-term time perspectives,
we have assessed and identified risks and opportunities that
we estimated would have a significant impact on our business,from among transition risks attributed to policies, regulations,and market changes that climate change will bring to the value
chain, as well as physical risks such as extreme weather
events, according to the risk and opportunity assessment process that we have established. In addition, we have conducteda scenario analysis of how our business environment could
have changed in 2030 from a long-term perspective, given theunique nature of the issue of climate change.

In the scenario analysis, we referenced multiple existing
scenarios published by the International Energy Agency (IEA)
and the Intergovernmental Panel on Climate Change (IPCC).
We assumed two scenarios: the below 2°C scenario, underwhich decarbonization is accelerated, and the 4°C scenario.
The risks and opportunities expected to impact the businesssignificantly were identified as follows, and we quantified thefinancial impact in 2030 to the extent possible.
*Reference scenarios: IEA APS, SSP5-8.5, SSP1-2.6, STEPS

surface modification, we recognize the social responsibility that comes with our corporate activities, and we will strive to meet society’s expectations. We aspire to develop theCompany through these efforts and help create a sustainable society.

Scenario analysis (below 2°C scenario)
Scenario

1. The Nihon Parkerizing Group is committed to realizing a sustainable society and increasing

Difficulty in procuring raw materials

Transition
risks

its corporate value by providing its products and services.
2. The Nihon Parkerizing Group will actively seek to provide products and services that are

Marketenvironmentally friendly and ensure safety and quality.

play an active role through respect for human rights and equal employment opportunities.
4. The Nihon Parkerizing Group will engage in fair and sincere corporate activities, with

Impact on business

Cost increase resulting from theintroduction of carbon tax and use of
Policy and Decarboniza- carbon credits
tion policy
legal
regulations breakthroughBasic Policy on Sustainability

3. The Nihon Parkerizing Group aims to realize a society where diverse human resources canTime span

Type of risk/
opportunity

Below
2°C
Physicalrisks

Demand for
decarbonizaGrowing customer demand fortion andlow-carbon products and services
energyconservation

Technology

Response tocustomers

Acute

Increase innaturaldisasters

appropriate information disclosure and proactive communication with stakeholders.

Nihon Parkerizing Co., Ltd. Integrated Report 2023

Long

term

term

term

Overallevaluation

Shutdowns resulting from natural
disasters caused by extreme weather
conditions

Remedies- Promotion of energy conservation- Shifting to renewable energy-based power
Medium - Use of solar power generation for private consumption- Improvement of utilization ratio through consolidation andcentralized operation- Enhancing supplier engagement- Promoting multi-sourcing
Medium- Product development with a view to purchasing and using
alternative raw materials

High- Studying potential and apparent demands and issues andpromoting research and development- Enhancing customer engagement- Expanding the lineup of environmentally friendly products- Promotion of CFP calculation for products and services- Promotion of energy conservation

Low- Enhancing supplier engagement- Promoting multi-sourcing- Product development to use alternative raw materials

Low-	Studying potential and apparent demands and issues andpromoting research and development- Enhancing customer engagement- Launching decarbonized products as soon as possible towin customers

High- Studying apparent demands and issues and promoting
research and development- Developing customized products- Materializing environmentally friendly products by accelerating development

Difficulty in procuring scarce raw
materials

Marketchanges
Serving new markets

39

Medium-Responding to customers’ technological innovations

Expansion of existing markets
Products
Opportu- andservicesnities

Short

Nihon Parkerizing Co., Ltd. Integrated Report 2023

40

Foundation for Value Creation

Ultimately, risks are rated on a 16-point scale based on

Financial impact in 2030 under “the below 2°C scenario”
Risks

Opportunities

Handling of risks

Operating income

their importance, and priorities to be addressed are set by

The Group has established a Risk Management Committee

examining risks in relative terms from a management

to effectively and efficiently manage various risks that may

perspective.

hinder the achievement of its business objectives. This committee oversees risk management activities focused on man-

Process of managing climate-related risks

Strategy1

The organization devised and implemented measures toStrategy

address business and other risks based on their materiality.

2

Strategy

Their progress is managed, and improvements are made on

4Strategy

an ongoing basis. We reflect measures to tackle climate-3

Integration with comprehensive risk management

related transition risks and opportunities in our environmental
strategy, incorporate them into our targets and plans, promote and develop environmental performance improvement

agement risks (operational risks), assesses such risks,
evaluates and manages them, examines measures toaddress them, and reports to the Internal Governance Committee. The Sustainability Committee takes the lead in managing risks related to climate change, and the twoorganizations work closely and cooperatively with each otherin company-wide risk management activities.

and risk management efforts, and make improvements
through the PDCA cycle.
FY2021
operatingincomeIntroductionof thecarbon tax

Difficulty inprocuringrawmaterials

Decarbonization
measuresNaturaldisasters

Expansionof existing
markets

Servingnewmarkets

Handling ofrisks

FY2030operatingincomeMetrics and targets -- initiatives to achieve carbon neutrality -To achieve carbon neutrality by 2050, we aim to reduce our non-consolidated CO2 emissions by 5% from the FY2020 level by

Key strategies based on the below 2°C scenario

FY2024 and 30% from the FY2020 level by FY2030. In addition, to achieve these targets, we will take measures such as (1)Strategy

1Introduction of the
carbon tax

Strategy 2

Difficulty in procuring raw materials

We estimate that emissions from business activities will increase with business growth if we take no remedialaction. Assuming the introduction of a carbon tax, the impact on operating income could be hundreds of millions of yen. We have, therefore, set an ambitious emissions reduction target of reducing CO2 emissions per unitof sales (Scope 1 and 2) by 30% (compared to FY2020) by 2030 and will ensure that we promote measures toaddress this risk.
We anticipate that the procurement of new raw materials may be required due to environmental regulations. If
it is difficult to procure raw materials, the impact on operating income could be billions of yen. As we have set“building a sustainable supply chain” as one of our key issues (materiality), we will establish a stable supply
system for raw materials in cooperation with suppliers. Further, we will seek to develop products using alternative raw materials and switch to alternative products as appropriate.

improving the efficiency of facilities and equipment and streamlining operating methods and processes, (2) expanding the use ofelectricity derived from renewable energy sources, and (3) using carbon offsetting methods.

CO2 emissions reduction targets (non-consolidated basis, CO2 emissions per unit of sales, Scope 1 and 2)(kg-CO2/million yen)

FY2030

600

552

572

585

30% reduction
562

500

Strategy 3

Decarbonization
measures

Strategy 4Serving newmarkets

Customer demand for decarbonization is increasing. Failure to meet this demand could result in a decrease inorders and the loss of billions of yen in operating income. As we have set forth “developing new products andtechnology that are environmentally friendly” and “contributing to reducing the environmental load” as our key
issues (materiality), we will work to reduce the environmental impact of our customer’s manufacturing processes
and promote carbon footprint (CFP) calculation for each product and service to visualize CO2 emissions, thus
driving measures to address this risk.
The movement toward carbon neutrality is accelerating worldwide, with the rapid expansion of decarbonization
markets and the development of innovative technologies required in these markets. As we have set “developing
new fields making the most of surface modification technologies” as one of our key issues (materiality), we will
actively develop products for new markets based on the proprietary surface modification technologies we havecultivated over many years as a leading company.

300

200

100

0

2018

2019

Process for identifying and assessing

reliability of the disclosed GHG
For business risks, climate-related transition and physicalclimate-related risks

risks were identified and assessed in light of risk assessment

At Nihon Parkerizing, our Sustainability Committee identifies

criteria, such as impact and probability of occurrence, using

and assesses climate risks. In contrast, the Risk Management

a standard risk sheet for the overall Company. The impact is

Committee identifies and evaluates other business risks.

evaluated on a four-point scale based on operating income.

The Sustainability Committee conducts scenario analysis
based on TCFD recommendations to identify critical risks

2020

2024

2030

2050

Scope 1, 2, and 3 GHG emissions
To ensure the transparency and

Risk management

FY2050409

400

Achieving carbon
neutrality by(greenhouse gas) emissions, in
FY2022, we received assurance
from

an

externalorganization(SOCOTEC Certification Japan) asa third party.

Scope 1

26,593 (t-CO2)

Scope 2 (market standard)

23,770 (t-CO2)

Scope 3573,119 (t-CO2)

Total

623,482 (t-CO2)

Coverage:	Nihon Parkerizing Co., Ltd., Parker Engineering Co., Ltd., Parker
Processing Co., Ltd., Oita Parkerizing Co., Ltd., Komatsu Parkerizing
Co., Ltd., Japan Kanigen Co., Ltd., Hamamatsu Netsushori Co.,
Ltd., Million Chemicals Co., Ltd., and Kyodo Yuso Co., Ltd.

In contrast, the probability of occurrence is assessed on afour-point scale based on the frequency of occurrence.

and opportunities and assess the degree of impact.
41

Nihon Parkerizing Co., Ltd. Integrated Report 2023

Nihon Parkerizing Co., Ltd. Integrated Report 2023

42

Foundation for Value Creation

Environmental Initiatives
The Nihon Parkerizing Group is committed to developing products that solve environmental issues at the production
stage and the stage of customer use to “effectively use limited resources and realize an affluent, sound society.”

Environmental policy and ISO 14001
To contribute to protecting the global environment, we haveestablished environment policies and obtained ISO 14001
certification, the international standard for environmental
management systems. We engage in activities such as
strengthening our corporate structure, developing environmentally friendly products, saving energy and resources, andreducing waste.

Approach to water resources
We use Baseline Water Stress, an Aqueduct Country Rank-

1. The Nihon Parkerizing Group will comply with all relevantlaws, regulations, and agreements and operate its business in consideration of biodiversity and by giving thehighest priority to environmental protection.

ing evaluation indicator developed by the World Resources

2. The Nihon Parkerizing Group will contribute to society by
developing and marketing environmentally friendly products and technologies for them.

use water resources effectively (such as reusing cleaning

Baseline Water StressInstitute, to check the water stress conditions in the countries

Extremely highIndia

where the Group’s business sites are located. We manage

High

Belgium, Mexico

Medium-highThailand, Korea, China, Indonesia

Low-medium

US., Japan, Philippines

Low

Taiwan, Vietnam, Malaysia

our water consumption as a precious resource and strive towater and steam drain water).

3. The Nihon Parkerizing Group will promote GHG reduction
throughout the value chain to realize a low-carbon
society.
4. The Nihon Parkerizing Group will strive to reduce theenvironmental impact of its business activities by effectively using resources and appropriately managing
chemical substances.

Initiatives to reduce the environmental load
Promotion of energy conservation

Countries where our business sites are locatedCreated based on scores by country for Base Water Stress used in Aqueductfrom the World Resources InstituteManagement of chemical substances
To fulfill our social responsibility as a chemical manufacturer

In addition, we conduct surveys of suppliers about chemi-

that manufactures and sells chemical products, we havecal substances contained in products under our Green Pro-

formulated a policy for the management of chemical sub-curement Guidelines. By controlling chemical substances

stances in products and established a Chemical Substancecontained in our products and identifying chemical sub-Management System (hereinafter referred to as CMS). We

stances of concern for hazardousness, we manage andcollect, manage, and communicate complex and voluminous

reduce the risk of chemical substances for people and theinformation on the hazards, toxicity, and risk assessment ofenvironment throughout the entire supply chain.

chemical substances based on domestic and international

1

Achieving both energy reduction and high efficiency with optimal processing methods

2

Saving energy with initiatives including appropriate management of electricity and gas use and use of waste heat3

Developing chemicals and expanding their lineup with a focus on low temperature and long life4

Reducing industrial waste in the treatment process5Efforts to develop equipment and systems aimed at reducing CO2 emissions from various industrial machinery

laws and regulations, as well as customers’ standards, andshare this information internally for CMS activities.

CMS management system
To provide appropriate information to our customers, we have established a system in which the seven sectors concerned cooperate and collaborate under the supervision of the management, chief administrator, and chemical substance control supervisor to
manage chemical substances in products.

Development of environmentally friendly products
The Group’s surface modification technologies contribute toin surface modification, we are promoting the development ofsolving global environmental issues such as resource conserva-

technologies for reducing environmental impact, such astion, energy conservation, and high efficiency by adding various

replacing hazardous substances with chrome-free, phospho-

functions to the surface of materials, such as corrosion resis-

rus-free, sludge-free, or similar substances, reducing hazard-

tance, wear resistance, and lubrication. As a leading company

ous substances, and achieving zero emissions.

Approach to resource recycling

Raw material suppliers
Qualityassurance
dept.
Environmentand safety
dept.

R&D

Purchasing dept.

Processing andmanufacturing dept.

Technologicalmanagement dept.

The domestic and overseas sales dept.

The Group uses recyclable containers for the products. We

strive to minimize industrial waste emissions while at thealso promote the 3Rs (reducing, reusing, and recycling) andsame time ensuring that waste is disposed of properly.

ChemicalsLife sciences

Toll processing

Customers (market)*Arrows indicate information flows.

43

Nihon Parkerizing Co., Ltd. Integrated Report 2023

Nihon Parkerizing Co., Ltd. Integrated Report 2023

44

Foundation for Value Creation

R&D
The Nihon Parkerizing Group, a technology-driven company, has been focusing on researching and developing surface modification technologies that excel in progressiveness and originality. In recent years, we have also been
actively addressing various social issues, including the development of technologies that can reduce the environmental impact, such as the substitution or reduction of hazardous substances and zero emissions.

Research and support systems

Functions
Rust prevention

Design quality

The Central Research Laboratories constitute the development center that provides the basis of our technologies.
Hydrophilicity

Adhesion

Here, we engage in basic research and product development

Elemental
technologies

Selfdeposition

for customers worldwide. In addition to the Central Research

Denaturation

Rust
prevention

Laboratories, we have created several technical centers in

Conjugation

Japan and overseas to improve products and provide timely
technological support by working close to our customers.

Lubricity

Meanwhile, to expand and strengthen our research andSurfaceanalysis

Chemicalequilibrium

Lubrication
Oxidationreduction

Paint
foundation

development system for the future, we are currently renovating the Central Research Laboratories.
tories are scheduled to open in 2025.

Rendering image of the Central Research Laboratories scheduled to open in2025*Subject to change due to the project at the planning stage

Aggregation
Electrolysis

Global structure

Deposition

Degreasing

To ensure the sustainability of our business, we are expand-

Shanghai, China

ing our surface modification technologies worldwide. In thisParker Surface
Technologies (Shanghai) Co., Ltd.

process, we are taking advantage of the global network we

Organic
chemistry
Inorganic
chemistry
ChemicalComputational
thermodynamics
chemistry
Materials
chemistry

Salt bathnitriding

support systems. We thus respond timely to requests fromlocal customers.

Oilrepellency

Comminution

Macromolecularization

Coloration

Fingerprint
resistance

PlasmaGroup has established technology development bases in
China and Thailand to build local development and technical

Multifunctionalization

Synthesis

Roughening

our connections with local customers. The Nihon Parkerizing

MixingEmulsification

Metamorphosis

have built to strengthen our customers’ overseas roll-out andHydrophobicity

Absorption

Expansion

Diffusion

ElectrolessplatingWearresistanceInterfacescienceBasicscience

Crystallography

ChemicalresistanceAnalyticalchemistry

Material
analysis

Molecular
designOxidationreduction

Electrochemistry
Chemicalengineering

Wastewater
treatment

Film
formation

Polymerization

Physicalchemistry

Quantumchemistry
Dispersion

Based on the concept of open innovation, the new labora-

Inhibitor
Dispersion andagglomeration
Water
solubilization

Carburization

LiquidanalysisHeat resistance

Insulation

Bangkok, Thailand

Hiratsuka, Japan

Parker Surface
Technology Asia PacificCo., Ltd.

Nihon Parkerizing Co.,
Ltd.
Central ResearchLaboratories

Antibacterial

Strengthening core technologies and R&D
We will celebrate our centenary in 2028, five years from now.

modification technologies, which add value to materials as a

We have developed various surface modification technolo-

new means of solving social issues. Our research and devel-

gies to engage with customers sincerely and solve theiropment dept. is focusing on medicine, EV-related compo-

issues with our technical expertise. As a result, as shown in

nents, and renewable energy, and we are gaining confidence

the figure on the right, our core technologies have foundin ourselves about deepening and utilizing surface modifica-

widespread application in all industrial fields. Recently,

tion technologies as our core technologies.

expectations

45

have

been

growing

Nihon Parkerizing Co., Ltd. Integrated Report 2023

for

new

surface

Product development for realizing a sustainable world
We have launched PALLUCID, an environmentally friendly

prevention treatment but also reduces CO2 emissions fromnext-generation conversion coating agent that replaces

raw materials, chemical manufacturing, and transportation

phosphate conversion coating processes for various paintprocesses by 70%. We will continue to spare no effort inbases. PALLUCID is a revolutionary technology that not only

developing innovative products for realizing a sustainable

extends the service life of metal materials through rustworld.

Nihon Parkerizing Co., Ltd. Integrated Report 2023

46

Foundation for Value Creation

Human Resource Strategies
At the Nihon Parkerizing Group, we believe that people are the source of our competitiveness and, most importantly,
our management resource. We create a motivating and comfortable work environment to maximize the power of ourpeople and organizations, thus continuously enhancing our corporate value. We also respect the human rights of all
stakeholders involved in our business activities.

Human resource development
To develop human resources who are proactive, dynamic,
and creative and who can be active on a global scale from a

Diversifying human resources

The number of hours allocated to capacity-building training for our employees in FY2022 was as follows.

includingtheintroductionofdifferent

training

programs.

of diversity, our goal is to increase the percentage of women in

employees can leverage their diverse personal qualities andmanagement positions over the medium to long term.

maximize their abilities.

long-term perspective, we are implementing various initiatives,

We are committed to promoting diversity so that individual

Number of training
participants

In addition, to systematically develop next-generationa step-by-step training program for all employees.

values, ways of thinking, and skills, consisting of various backgrounds such as race, gender, physical characteristics, physi-

8,655

379

leaders who will play a central role in management, we offer

We aim to realize a company where employees with diverse

Total training hours

cal disabilities, diseases, nationality, religion, political beliefs,
age, sexual orientation, and gender identity, can maximize
their abilities and characteristics and work energetically.
In FY2022, as part of our efforts to promote active participation of our human resources, we held the Parker Group Spe-

Schematic for capacity building training programs

cial Lecture Meeting for Promoting Active Participation ofTraining provided outside the workplace

TOEIC training

Managerial competence and aptitude

Basics of accounting
Supervisor assessment training

TOEIC training

Supervisory competence and aptitude

Mid-level employee training
Non-managers

New employee training
Product knowledge, practical training

Critical thinking

New employee training

Presentation skills
training

Business manners and internal rules

Prospective employees

Basics of marketingand businessstrategies

TOEIC training
TOEIC training

Self-development (incentive program encouraging acquisition ofqualifications)

Assistantmanager
level

Daily individual training (on-the-job
training)

Manager assessment training
Supervisory
positions

TOEIC training

Compliance training

Practical course on
business accounting

Women for female employees and their supervisors by inviting
a woman working on the frontline of business as the lecturer.
Participants commented that they wanted to use the lecturer’s
experience as a reference for their approach to their work. It

Language training (English, Chinese)

Management courses, training for evaluators,
interview system, labor management

Pre-assignment training for expatriates (culture, customs, environment,
procedures)

Training for new managers

Coaching training, on-the-job training, and hands-on
training

Management strategy training
Middle management program

Sectionmanager
level

Workplace Other
training

Specialty (elective)

Rust prevention technology school

Technical skills

Training for developing global human resources

Managerial
positions

Generalmanager
level

Human skills

Introductory course on surface treatment [1st and 2nd semesters](Electrochemistry, corrosion, and analysis)

Position

Prospective employee training

was an excellent opportunity for them to think about developing their subordinates as supervisors, which means that theevent increased motivation.
In addition, to develop global human resources, welaunched the Global Associates Program, under which we
accept engineering staff from overseas Group companies toour technology centers in Japan. Through this initiative, we
deepen technological, cultural, and other exchanges in various
areas to invigorate the entire Group.
We will continue implementing initiatives to maximize thepower of people and organizations. Concerning the promotion

The Group has implemented initiatives on respect for human
Policies and guidelines.

Creation of a comfortable workplace

47

Respect for fundamental human rights is clearly stated inour compliance handbook, distributed to all employees toPursuing employee happiness and achieving a high level ofhours, and income considerations for life events such as

self-fulfillment are among the most important significance forchildcare and nursing care. We are working to make these

our continued existence. To bring our employees as close as

programs known to all employees. We also support flexible

To respect each other and eliminate all discrimination, we

possible to this ideal, we provide a range of support accord-

work styles such as through telework and flextime systems.

issue a monthly Compliance Newsletter and conduct compli-

ing to their life stages. The creation of a pleasant work envi-

These systems have become widely available, enablingance training once a year to ensure that each employee willronment also leads to higher labor productivity. We have

employees to work flexibly and efficiently.

have

Nihon Parkerizing Co., Ltd. Integrated Report 2023

Trainees accepted from Group companies in Thailand and Malaysia

Respect for human rights

rights through the Nihon Parkerizing Group Human Rights

established programs for leave, leave of absence, working

Parker Group Special Lecture Meeting for Promoting Active Participation of
Women

ensure they are fully aware of the importance of respecting
basic human rights.

acorrect

compliance.

understandingandawarenessof

Human Rights Policies
1. The Nihon Parkerizing Group will comply with the laws
and regulations of the countries and regions in which it
operates, support and respect international norms
related to human rights, and fulfill its responsibility torespect human rights.
2. The Nihon Parkerizing Group will eliminate unfair discrimination and any form of harassment in the workplace andrespect labor rights.
3. 
The Nihon Parkerizing Group will strive to promoterespect for human rights throughout the supply chain
involved in its business.
4. The Nihon Parkerizing Group will prevent the occurrenceof adverse human rights impacts. It will take prompt andappropriate action when identifying contributing or complicit violations.
Nihon Parkerizing Co., Ltd. Integrated Report 2023

48

Foundation for Value Creation

Occupational Health and Safety

Supply chain management

The Nihon Parkerizing Group strives to maintain and promote every employee’s physical and mental health by

The Nihon Parkerizing Group aims to build a sustainable supply chain. To this end, we have established close coop-enhancing tangible aspects (e.g., facilities and environment) and intangible aspects (e.g., health management) soerative relationships with our suppliers. We are working to build resource management, production, and supply

that employees can exercise their full potential safely and comfortably.

systems to realize a recycling-oriented society. In addition, to build a stable supply system, we are strengthening ourunderstanding of and remedies against risks in procurement.

Health and Safety Policy
The Nihon Parkerizing Group has established a Health and Safety Policy toensureallemployees

andparties

involved, including subcontractors, know
the importance of preventing occupational accidents. They prioritize ensuringsafety and health for a safe and comfortable work environment.

Procurement Policies and promotion of CSR procurement
The Nihon Parkerizing Group and its sup-Health and Safety Policy

pliers have established Procurement Poli-

1. The Nihon Parkerizing Group will place the highest priority on the safety andhealth of all of its employees. It will be committed to providing a safe andsecure work environment and promoting mental and physical health.
2. The Nihon Parkerizing Group will take appropriate preventive measures forhealth and safety and strive for continuous improvement.
3. The Nihon Parkerizing Group will comply with all laws and regulations regarding health and safety.

cies and Green Procurement Guidelines
to ensure sound procurement activities incompliance with laws and regulations
and with environmental considerations,
respect for human rights, and fair trade.
Based on these policies, we promote
CSR procurement to fulfill our social
responsibility as a company. In addition,

Physical and mental health managementin FY2022, we formulated the Quality

We provide advice and support for health management

We provide employees with an opportunity for stressthrough interviews with industrial physicians to help employ-checks once a year to prevent mental health problems.

ees maintain and improve their health. Believing that it is of

Employees who are highly stressed in the stress check areutmost importance for employees to understand, maintain,

encouraged to undergo an interview with an industrial physi-

and improve their health status, we encourage employees tocian. We also conduct group analyses of offices and plants inreceive regular health checkups, aiming for the rate ofaddition to analysis of individuals and conduct hearings as

employees receiving the checkups at 100%.

necessary to improve the workplace environment.

Risk assessment (chemical risks and health and safety risks)

Procurement Policies
1. The Nihon Parkerizing Group aims to realize coexistence and co-prosperity
with suppliers based on mutual trust.
2. The Nihon Parkerizing Group will provide opportunities for procurement transactions to all suppliers and select them fairly and honestly, considering quality,
price, delivery time, and other factors.
3. The Nihon Parkerizing Group will comply with domestic and foreign laws, regulations, and social norms and request that its suppliers comply with the samelaws and regulations.
4. The Nihon Parkerizing Group is committed to sustainable procurement activities, fully considering the environment, human rights, occupational health andsafety, and corporate ethics.

Assurance Manual for Purchased Raw
Materials and informed our suppliers ofthe manual.

Supplier engagement
In FY2022, we conducted a questionnaire to deepen mutual

We will continue to deepen our relationship with suppliers

understanding with our suppliers. We aimed to confirm thethrough dialogue on their sustainable procurement policies

status of suppliers’ sustainability initiatives, including procur-

and the status of their initiatives. We will pursue initiatives

ing “sustainable palm oil with an awareness of human rights,”

aimed at achieving mutual understanding and bolstering cor-consideration for water use and biodiversity, assessing envi-

porate value.

Chemical risk assessment

Health and safety risk assessment

We have introduced a system that allows us to assess theBased on the health, safety, and environment manual, we

efforts toward carbon neutrality. We received responses fromrisk of hazardous chemical substances and take measures to

identify risks such as hazardous work to prevent serious

more than 80% of suppliers.

reduce the risk. We share the results of this risk assessment

accidents. In addition, we make assessments for each risk

throughout the company.

and take cross-sectional measures internally according toronment-related risks such as soil and air pollution, andRisks in procurement and remedies

the risk level.
In recent years, the environment surrounding corporate
activities has drastically changed, and the future remains

Creation of safe and pleasant workplaces

External environment affecting procurement

uncertain, mainly reflecting the growing geopolitical risks in- Procurement uncertainty caused by geopolitical risks

Occupational accident frequency
rate

Occupational accident severity
rate*2

addition to the spread of COVID-19, climate change, and

(%)

(%)

increasing natural disasters. In FY2022, our business was- Delivery delay resulting from unexpected equipment
troublefully. We are proactively improving our

1.50

0.10

workplace environment to create a pleas-

1.00

A safe work environment is essential for
employees to perform their duties peace-ant workplace. In addition, all employees
and related parties, including subcontractors, engage in safety activities
together to achieve zero accidents.

also severely affected, mainly by the rising prices of raw
materials, including phosphoric acid as a critical raw material.

0.05

Given this situation, we continue to step up measures to

0.50
0.00

FYE 2021/3 FYE 2022/3 FYE 2023/3

Nihon Parkerizing

0.00

FYE 2021/3 FYE 2022/3 FYE 2023/3

Total for the manufacturing industry*

Occupational accident frequency rate = (Number ofcasualties/Gross working hours) × 1,000,000

Occupational accident severity rate = (Number ofwork days lost/Gross working hours) x 1,000- Delays or suspension of deliveries resulting from natural
disasters- Delivery time affected by logistics problems

timely identify risks in our supply chain and take steps toimprove them from the perspective of our business continuity
plan (BCP).

* Source: Overview of the Ministry of Health, Labor and Welfare’s whitepaper survey on trends of industrial accidents (survey of business establishments (with 100 or more workers each) and survey of the construction work,
general including public and private construction work)* Coverage expanded in FYE 2023/3 (to include contractors)
49

Nihon Parkerizing Co., Ltd. Integrated Report 2023

Nihon Parkerizing Co., Ltd. Integrated Report 2023

50

Foundation for Value Creation

Quality Assurance

Efforts for Safe and Reliable Production

The Nihon Parkerizing Group is committed to technological innovation and quality improvement to provide products

The Nihon Parkerizing Group produces safe and reliable products by strengthening process quality control of manu-

and services that consistently exceed the expectations of customers and society. We provide products and services

facturing processes, reducing hazardous and harmful work for on-site workers, and improving the workwith reliable quality to our customers through continuous improvements to our quality management system, compli-

environment.

ance with legal and regulatory requirements, and fair and sincere corporate activities.

Quality Assurance System and Quality Policy
Based on a policy of customer
focus, the Nihon Parkerizing Group
is stepping up initiatives to create
its Group-wide quality assurance
system through quality audit activities and quality training not only
within the Group but also atdomestic and overseas affiliates toprovide products and services thatearn the trust and satisfaction ofcustomers.

Reliability is achieved by enhancing manufacturing quality control.
We bolstered quality control with standardized process audits

Quality Policyof our domestic manufacturing plants, affiliates, and subcon-

The Nihon Parkerizing Group strives to provide products and services that exceed the
expectations of society and customers through quality improvement and technologicalinnovation in its efforts to enhance customer satisfaction.
1. We will provide reliable quality to our customers by continuously improving our quality
management system.
2. We will comply with legal and regulatory requirements and provide our customers withsafe and reliable products and services.
3. We will strive to earn the trust of our customers by thoroughly preventing the recurrence and occurrence of problems.
4. We will enhance the transparency of our quality assurance system and conduct fairand sincere corporate activities.

Quality management system
We have obtained certification under international quality

products to our customers and implemented the PDCA

standards (ISO 9001) for each chemical and toll processing

cycle, thus advancing improvement initiatives on an ongoing

business. The standard certification for quality management

basis. As part of our commitment to improving quality, we

systems was obtained by the Kansai Plant in 1995 for thehave also acquired IATF 16949 certification for the automo-

chemicals business and by the Hiratsuka No. 2 Plant in 1997

tive industry, JIS Q 9100 certification for the aerospace

for the toll processing business. Our chemical and toll pro-industry, and ISO 13485 certification for the medical device

cessing plants are now certified to international quality stan-industry. Overseas, we are working to obtain ISO 9001 certi-

dards. Under the ISO 9001 fundamental principles offication at all our affiliates. We are striving to build a system

customer focus and improvement of customer satisfaction,that will enable us to meet global quality requirements.

tractors to advance sustainable resource management, production, and transportation. We plan to expand this initiative to
our suppliers to strengthen our relationships with them.

Certificates of registration of quality management system(Points)
100
75
50

Domestic manufacturing 6 locations -- All are excellent
plants:plants*.

025

3 locations -- Excellent or certified
plants(Points)

Plants ofoverseas affiliates:

3 locations -- Excellent or certified
plants75

Domestic transportation 3 locations -- All are excellent
contractors:
transportation
contractors.
*The judgment was made through audits that followed internal evaluation procedures
and standards.
(80 points or above Excellent plant, 60 points or above Certified plant)

Hiratsuka

KansaiKansai (Rust(Chemicals) prevention oil) Fukuyama

KyushuChiba

Results of evaluation of visualization and identification

Plants ofdomestic affiliates:

100

50
25
0

Hiratsuka

FYE 2021/3

KansaiKansai (Rust(Chemicals) prevention oil) Fukuyama

FYE 2022/3

KyushuChiba

FYE 2023/3*Domestic manufacturing plants: Hiratsuka, Kansai, Fukuyama, Kyushu, and Chiba

Safety ensured by reducing hazardous work
We conduct risk assessments of our product manufacturing processes to reduce hazardous work. We engage in continuous
activities, such as providing safety training and proposing improvements for reducing hazardous work to on-site workers, aiming
to eliminate dangerous work.

Efforts to improve the working environment
Case 1: Improvement of label removal work at automaticcleaning of product containers(as of July 31, 2023)

Case 2: Improvement in the indication of relevant legal
information on raw materials

Information on laws and regulations is indicated in the raw

Non-consolidated
16 plants in total: 5 product manufacturing plants and
11 processing plants

Results of evaluation of manufacturing and equipment conditions

Results of standardized process audits at
manufacturing sites in FY2022

we have clarified our procedures for providing better
Rate of acquisition of ISO 9001 certification

Evaluation results of standardized process audits ofdomestic manufacturing plants

material receiving and inventory management systems,

ISO9001100%[Duplicate]

which has led to improved workability, response to investiga-[Duplicate]tions of legal regulation information, and compliance with
New container

Domestic consolidated subsidiaries
10 companies in total that are engaging in equipment
manufacturing/ product manufacturing/ processing*Acquisition status of ten of our 13 domestic consolidated
subsidiaries (excluding Parker Giken Kogyo, Kyodoyuso, andOzeki Chemical Industry, which do not engage in any of theabove businesses) (Two of the ten companies have yet toobtain the certification.)Labels remaining
unremoved80%*17 major overseas consolidated subsidiaries(Including IATF 16949 certification/Not yet acquired by one of
the companies)
51

Nihon Parkerizing Co., Ltd. Integrated Report 2023

laws and regulations.

Labels removed completelyfrom 70% of the containers

Compliance initiatives

Overseas consolidated subsidiaries
17 companies in total, which are engaging in equipment manufacturing/product manufacturing/processing

Recycled
container

Automatic transfer of product inspection result

94%

Chemicals

Toll Processing

We are working to prevent human intervention and avoid

We have completed the introduction of this system at several

risks posed by humans by automatically incorporating qualityof our plants. We will gradually expand this to other plants toinspection results into our manufacturing and sales systems.

promote further automation.
Nihon Parkerizing Co., Ltd. Integrated Report 2023

52

Foundation for Value Creation

Corporate governanceNihon Parkerizing regards corporate governance as one of the most essential management issues. We strive toensure that corporate governance functions soundly by constantly developing the most appropriate management
structure so the company can develop and grow soundly while considering all stakeholders.

Steps we have taken to strengthen governance

Board of Directors

2016

June 29 Introduction of a performance-linked stock compensation plan using a trust for directors

2017

June 29 Transition from a company with a board of company auditors to a company with an audit and supervisory committee

2019

June 27 Introduction of an executive officer system

2022

August 5 Establishment of a Nomination and Remuneration Committee

The Board of Directors consists of ten directors (including fivelong-term corporate value of the Group as a whole. The

outside directors) and meets monthly in principle. Kazuichi

Board of Directors also supervises the status of business

Satomi, Chairman, President, and CEO, chairs the Board of

execution by separating the management decision-making

Directors. It deliberates on essential matters stipulated in theand supervisory functions from the business execution func-

Articles of Incorporation and the Board of Directors Regula-tions and clarifying responsibilities.

tions. It makes management decisions to enhance the

Corporate governance structure

Audit and Supervisory Committee

In 2017, we transitioned to a company with an audit andOf our ten directors, five are outside directors. They are

The Audit and Supervisory Committee comprises four mem-

Directors and express their opinions as appropriate. They

supervisory committee to strengthen our corporate gover-designated as independent directors under the Tokyo Stockbers: one director and three outside directors. Masaharu

also conduct audits, for instance, by examining essential

nance and improve our corporate value by enhancing the

Exchange (TSE) rules and registered with TSE. In addition,

Kubota, an outside director who is an Audit and Supervisory

documents, visiting business offices, and inspecting subsid-

audit and supervisory functions of the Board of Directors.

one of them is a female director.

Committee member, chairs the committee. It meets monthly

iaries. In addition, accounting matters are regularly reported

We have also introduced an executive officer system toin principle. Directors who are members of the Audit andto the Audit and Supervisory Committee by the designatedseparate the management decision-making and supervisory

Supervisory Committee attend meetings of the Board of

CPA.

Outside Director

functions from the business execution functions, thereby

Female directors

5

accelerating decision-making, improving management effi-

1/10 directors

ciency, and clarifying responsibility for business execution.

Executive Committee/10 directors

Corporate governance structure (As of July 1, 2023)

The Executive Committee consists of ten executive officers

executive policies and other matters based on the basic

and meets monthly, in principle. Masayuki Yoshida, the Rep-

guidelines decided by the Board of Directors, as well as toresentative Director and Managing Executive Officer, chairs

discuss management matters to be submitted to the Board

the committee. Its purpose is to discuss and resolve criticalof Directors in advance and report as necessary.

Stockholders Meetings
Appointment/Dismissal

Reply

Nomination andRemuneration
Committee

Consult

Audit and Supervisory Committee Cooperation

Director(Excluding directors who are membersof the Audit and Supervisory Committee)

Appointment/Dismissal

Business execution

Appointment/Dismissal
Appointment/Dismissal

Board ofDirectors
Audit/
Supervision(Directors who are members of the
Audit and Supervisory Committee)

Internal Governance Committee

Accountant auditor

Appointment/Dismissal

President/Chairman & CEO

ReportTo carry out internal control, we have established the Internaland Compliance Committee as its subordinate organizations,

Governance Committee, chaired by the president and com-

aiming to build a more effective governance system that

posed of directors, and the Risk Management Committee

includes Group companies.

Cooperation

Management Council
Internal Audit Unit
Internal Governance Committee
Executive Committee

Compliance Committee(Executive officers)

Risk Management Committee
Sustainability Committee
Business execution departments/affiliates

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Nihon Parkerizing Co., Ltd. Integrated Report 2023

Sustainability Committee
Cooperation

Audit

We established the Sustainability Committee to strengthen

on sustainability activity policies, promotion and progress

our sustainability efforts, further enhance our corporate value

management of various sustainability-related measures, andin the future, and identify and address critical social issues onmatters related to climate change, including critical issues

an ongoing basis.

(materiality) and KPIs.

The representative director chairs the Committee and consists of four directors and one executive officer. It deliberates

This Committee meets quarterly and annually reports its
activities to the Board of Directors.

Nihon Parkerizing Co., Ltd. Integrated Report 2023

54

Foundation for Value Creation

Nomination and Remuneration Committee

Officers’ remuneration

The Board of Directors’ decisions on the nomination anddirectors, we have voluntarily established a Nomination andremuneration of directors follow recommendations by the

Remuneration Committee, which is chaired by an outside

Nomination and Remuneration Committee. To improve thedirector, with most of its members being independent out-

effectiveness of the nomination and remuneration ofside directors.

Expertise and experience of directors (skill matrix)

Policy for the determination of or the method for calculating officers’ remuneration
At its meeting on March 22, 2021, our Board of Directors

Amounts of bonuses are determined comprehensively bypassed a resolution on a policy for determining the content ofusing operating income, which is an indicator of the businessindividual directors’ remuneration. Our basic policy is toperformance of our main businesses, as the primary index,

ensure that our directors’ remuneration is linked to the com-and by taking into account changes from the same period ofpany’s performance, reflects their positions’ responsibilities,

the previous year.

To ensure accurate and prompt decision-making and super-skill matrix of knowledge, experience, and abilities required ofand results in increasing corporate value sustainably. Remu-

The performance-linked stock compensation plan is avision toward the realization of our corporate philosophy anddirectors. It intends to maintain a balance and diversity ofneration for directors consists of monthly compensation,system under which points are awarded based on businesslong-term vision, our Board of Directors has established askills on the Board of Directors.

bonuses, and performance-linked stock compensation.

performance for each fiscal year, and compensation, equiva-

Remuneration for outside directors and directors and mem-

lent to the accumulated points, is paid at the time of retire-bers of the Audit and Supervisory Committee is monthly

ment. Whether or not points are awarded, and the number ofcompensation only.

points to be awarded, are determined each fiscal year.

SkillsExperience, knowledge, and abilities of the expected skills

Corporate management

Experience as a (representative) director of a company, management performance, and experience andknowledge in business management

Marketing/sales

Experience and knowledge in the marketing and sales field

Development/technology

Experience and knowledge in development and technology fields

International/global

Experience in overseas business, knowledge of international affairs, culture

Remuneration paid in FY2022

Finance/accounting

Qualification as a Certified Public Accountant, experience and knowledge in the field of finance andaccounting

Legal affairs/compliance

Attorney’s license, experience, and knowledge in the field of legal affairs and compliance

Name

Corporate
management

Marketing/sales

Development/
technology

International/global

Finance/accounting

Total amount of
remuneration(Million yen)

Executive classification

Legal affairs/
complianceTotal amount of remuneration by type (Million yen)
Fixedcompensation

Performance-linked
compensation

Stockcompensation

Number of eligible
officers

Directors (excluding directors who are members of
the Audit and Supervisory Committee and outside
directors)

212

143

42

26

6

Members of the Audit and Supervisory Committee(excluding outside directors)

18

18

—

—

1

Outside Director

36

36

—

—

5

Kazuichi Satomi
Hiroyasu Tamura
Masayuki Yoshida

Our Board of Directors conducts “a questionnaire of all direc-

explanations of matters to be resolved, and responses to

Yasumasa Fukuta

tors on matters for improving the effectiveness of the Board

issues raised at the Board of Directors meetings, among

Shimako Emoriof Directors”, including the operation of the Board of Direc-

other aspects. On the other hand, while we see specifictors meetings, the content of agenda items, and the status of

improvements from the previous fiscal year, we confirmed thesupervision of business execution. Each director’s self-evalu-

need to continue promoting sustainability management,

ation and opinions are collected and analyzed, and the Board

including SDGs and ESGs, and to further enhance discus-of Directors receives the results.

sions on management strategies from a medium- to long-

Tatsuya Mori
Masaharu Kubota
Hayato Hosogane

55

Evaluation of the effectiveness of the Board of Directors

As a result of the survey, we have confirmed that our Board

term perspective.

Koji Chika

of Directors is generally effective regarding the operation of

We will continue striving to improve the effectiveness of the

Shigetaka Hazeyama

the Board of Directors meetings, the sufficiency of prior

Board of Directors, such as making improvements in issues.

Nihon Parkerizing Co., Ltd. Integrated Report 2023

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56

Foundation for Value Creation

Officers (As of June 30, 2023)

Chairman and President
CEO

Representative Director
in charge of Administration Div. andGroup Management Div.

Representative Director
in charge of Technical Div. andCorporate Planning Div.

Outside Director(Audit and Supervisory Committee Member)

Director(Audit and Supervisory Committee Member)

Kazuichi Satomi

Hiroyasu Tamura

Masayuki Yoshida

Masaharu Kubota

Hayato Hosogane

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
100% (12/12)

April

April

April

1985

Joined the Company

April

Joined the Company

April

1987

Joined the Company

July

1987

Director of the Company

December 2009

April

2012

January

2000

Managing Director of the Company

General Manager of Accounting Dept.
of the Company

June

2003

Senior Managing Director of theCompany

June

2015

Director and General Manager of
Administration Div. of the Company

General Manager of First ResearchCenter, Central Research Laboratoriesof the Company

June

2013

June

2022

Director and in charge of
Administration Div. and GroupManagement Div. of the Company

President of PARKER SURFACETECHNOLOGIES (SHANGHAI) CO., LTD.

June

2017

June

2023

Representative Director and in chargeof Administration Div. and GroupManagement Div. of the Company (topresent)

Director and General Manager ofCentral Research Laboratories of theCompany

April

2018

Director and General Manager ofTechnical Div./Central ResearchLaboratories of the Company

June

2005

Vice President of the Company

April

2011

President of the Company

June

2017

Chairman of the Company

June

2022

Chairman and President of theCompany (to present)

June

2022

Director and in charge of Technical Div.
and Corporate Planning Div. of theCompany

June

2023

Representative Director and in charge ofTechnical Div. and Corporate Planning
Div. of the Company (to present)

1989

Registered as Attorney-at-law Joined
Daini Tokyo Bar Association

April

1990

Chief of Jingumae Law Office (topresent)

June

2019

Outside Director (Audit andSupervisory Committee Member) of
the Company (to present)

1983

Joined the Company

November 2012

Department Manager of Chukyo
Dept., Chemicals Div. of the Company

June

2015

Director of the Company andPresident of Thai Parkerizing Co., Ltd.

April

2019

Director and General Manager ofCorporate Planning Div. of theCompany

June

2020

Director (Audit and Supervisory
Committee Member) of the Company

June

2022

Director (Audit and Supervisory
Committee Member) of the Company(to present)

Directorin charge of Chemicals Div. andCommercial Processing Div.

Outside Director

Outside Director

Outside Director(Audit and Supervisory Committee Member)

Outside Director(Audit and Supervisory Committee Member)Yasumasa Fukuta

Shimako Emori

Tatsuya Mori

Koji Chika

Shigetaka Hazeyama

Attendance at the Board of Directors meetings*
100% (10/10)

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
100% (12/12)

Attendance at the Board of Directors meetings
92% (11/12)

Attendance at the Board of Directors meetings*
100% (10/10)

March

Executive Officer and General
Manager of Marketing Planning Dept.
of Nippon Life Insurance Company

October1997

Joined Chuo Audit Corporation

April

2001

Executive Officer and Deputy General
Manager of Customer Service
Headquarters of Nippon Life
Insurance Company

Registered as Certified Public
Accountant

February 2002

Joined Starbucks Coffee Japan Ltd.

January

2007

Established Hazeyama Certified Public
Accountant Office (to present)

August2017

Registered as a Certified Tax
Accountant

June

2022

Outside Director (Audit andSupervisory Committee Member) of
the Company (to present)

April

1989

Joined the Company

October

2002

Registered as Attorney-at-law

December 2002

Joined Aozora Bank, Ltd.

July

2016

General Manager of Marketing Div. of
the Company

September 2004

Registered as Patent Attorney

July

2006

April

2019

General Manager of Chemicals Div. of
the Company

March

2009

Established Ocean Law Offices (topresent)

Joined Japan Asia Investment
Company, Limited

May

2010

Joined New Horizon Capital Co., Ltd.

April

2009

Associate Professor of Komazawa
University Law School

November

2012

Established Office-Prifiss

June

2019

Outside Director of the Company (topresent)

June

June

57

1983

2019

2022

Executive Officer and General
Manager of Chemicals Div. of theCompany
Director and in charge of Chemicals
Div. and Commercial Processing Div.
of the Company (to present)

Nihon Parkerizing Co., Ltd. Integrated Report 2023

April

2017

Professor of Komazawa University
Law School

June

2019

Outside Director of the Company (topresent)

March

March

2013

2015

2017

Managing Executive Officer andGeneral Manager of Head OfficeOsaka Corporate Marketing Dept. of
Nippon Life Insurance Company

April

2019

Representative Director and Vice
President of SEIWA BUSINESS LINK
CO. LTD

June

2019

Outside Director (Audit andSupervisory Committee Member) of
the Company (to present)

April

2020

Representative Director and Presidentof SEIWA BUSINESS LINK CO. LTD(to present)*This applies to Board of Directors meetings for the current fiscal year held after taking office on June 29, 2022.
Nihon Parkerizing Co., Ltd. Integrated Report 2023

58

Foundation for Value Creation

Risk Management

Compliance

The early detection and handling of risks is essential for the smooth operation and achievement of business. The

The Nihon Parkerizing Group is committed to being a corporate group trusted by its stakeholders. For this purpose,

Nihon Parkerizing Group is striving to develop and strengthen its risk management system to detect risks with the

we fulfill our corporate social responsibilities while complying with all laws and regulations in our business activities.

potential to impede the achievement of business objectives as early as possible and to respond promptly and appro-

Through our systems and initiatives, we strive to raise awareness of compliance issues and foster a sound corporate

priately when risks materialize.

culture.

System for driving risk management

System for driving compliance

We have established a Risk Management Committee undermanagement of risks of all Group companies. Once a year,

Under the Basic Compliance Rules, we have established a Compliance Committee to establish, maintain, and review our compli-

our Risk Management Rules. The risk management supervi-

we conduct a risk survey to review our risks, examine means

ance system. Such efforts are also regularly reported to the Internal Governance Committee.

sors and risk managers, who play a critical role in the riskof identifying and tackling risks, and provide internal training.

Promoting compliancemanagement system, are responsible for the overall

Risk assessment and response measures
Risk assessment process
Step 1. Collecting risk information and identifying risks

Collecting a wide range of risk cases from external information, in addition to risk survey
results, and identifying risks that may have a significant impact on the company fromamong the collected risk cases
Step 2. Risk calculation

Calculating the severity of the identified risks. Quantitative or qualitative calculations are
based on two factors: the likelihood of an event occurring (probability of occurrence)and the magnitude of the impact that will be given if an event occurs (level of impact).
Step 3. Risk assessment

Comparing the calculated risks with predetermined risk criteria and determining theneed for actions and the level of importanceLevel of impact if risk occurs

High

Transfer

Avoidance

Recognizing the social responsibility that corporate activities

informed of the Code of Conduct. We are thus fostering aprovide, we have distributed a Code of Conduct for Execu-

corporate culture that does not tolerate misconduct. In addi-

tives and Regular Employees that defines the proper behav-tion, to prevent discrimination and harassment, we haveior expected of executives and employees. We ensure that all

established Employment Regulations and Anti-Harassment

executives and employees in Japan and overseas are fully

Regulations.

Internal whistleblowing system

ReductionRiskretention
Low
Low

High

Probability of risk occurrence

The Group has established a reporting desk where employ-confidentiality of whistleblowing information, accepts anony-ees can report and seek advice about incompliance andmous whistleblowing, and otherwise complies with thefacts suspected of non-compliance. To protect whistleblow-

Whistleblower Protection Act.

ers, we have established a system that maintains theDecision on Remedies

Training and awareness-raising activities

We formulate measures to address each risk we have identified as significant.

Activities for preventing corruption and harassment

Quality compliance activities

The Nihon Parkerizing Group translates and distributes a

To foster an awareness of compliance and quality, we havefamilies, (2) strive to preserve management resources, and (3)compliance handbook and the Code of Conduct for Execu-

introduced a Compliance and Quality Enhancement Monthand regularly reviewed a business continuity plan (BCP) tocontribute to business continuity and early recovery, and wetives and Regular Employees in multiple languages so thatto undertake various initiatives in December every year. In

minimize damage and ensure business continuity and an early

have established a disaster control manual and operateGroup employees in each country can understand them. In

FY2022, we delivered the top message, “Handling num-

recovery during a disaster or other emergency. We are also

according to it. We have also introduced a system for confirm-

addition, we hold training sessions and conduct regular train-bers accurately and carefully.” We put up posters, including

taking steps to strengthen our business continuity manage-

ing employees’ safety and health status as part of our mea-

ing and awareness-raising activities through e-learning andones showing the quality

ment (BCM) by conducting earthquake response drills, amongsures to tackle disasters and pandemic diseases. This systemother means.

slogan. In addition, eachother initiatives. In terms of disaster countermeasures, ourenables us to promptly check employee’s safety and healthdepartment determined thebasic policy is to (1) protect the lives of employees and theirstatus during an earthquake, pandemic or other emergency.

themes of their issues andBusiness continuity plan (BCP)
To fulfill our corporate social responsibility, we have prepared

Supply chain

Information security

Laws andregulations

worked on remedies andimprovements. Ten Group
companies also joined theWe take the following approaches to address information
security risks that have been increasing in recent years, suchas cyber-attacks and conventional information security risks.

Three approaches to information security measures1

 stablishing and continuing to review management systems
Eand internal rules related to information security

2

Implementing and continuing to review technical and physical measures

3Improving information security literacy through information
security training and drills and continuing to review training
plans*

QualityCompliance

Information
management

Corporate
governanceactivities.

Human rights*We are taking initiatives to raise information security awareness, including periodic training for officers and employees and drills on targeted e-mail attacks.
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60