ESG Databook

2019Formulating
CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of LifeESG Databook 2019

002

010

Dialogue with Our Stakeholders

012

Organization to Promote CSR

013

Major Achievements

020

External Evaluations

GRI
STANDARDS
INDEX■ Social Contribution Activities■ Management of Environmental and Social Initiatives
Comparison with Global Principles

Environmental
Performance
Data

This publication is the compiled PDF version of Komatsu's webpage"ESG Databook", as of July 18, 2019.

Formulating CSR Themes (Materiality)

008

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
People■ Theme 1 : Enhancing Quality of Life138

Accomplishments and Approaches forSocial Contribution Activities

140

Komatsu's Initiatives for the Social Issues

142

Developing People Needed by the Community

145

Disaster Relief

147

Clearing Anti-Personnel Landmines andCommunity Development Support

153

Promoting Sports̶The Komatsu Women's Judo Club■ Environmental Performance Data023

Product Safety - Increasing Safety by Innovation -158

Environmental Education

026

Quality and Reliability- Responsible Commitment to Customers -161

Environmental Accounting

033

Occupational Safety and Health164

Site Data

041

Pursuing Environmental Management165

Scope of Environmental Data

049

Relationship between Business Activities and the Environment-Product Life Cycle and Mitigating Climate Change-

169

Independent Practitioner's Assurance on
Environmental Report 2018060

Relationship between Business Activities and the Environment-Promoting Recycling-

171

Amount of CO2 Emissions by Scope3

172

GRI STANDARDS INDEX■ Theme 2 : Developing People
068

Personnel Policy and Performance Appraisal System

074

Diversity Initiatives

079

Enhancing Work-Life Balance083

The KOMATSU Way

086

Employee Training Structure

088

Strengthening Our "Gemba" Capability

091

Brand Management Initiatives

E d i to ri a l P o l i c y
These reports principally cover data for the period
from April 2018 to the end of March 2019, withsome non-periodic information on continuing
eﬀorts.
About the report which doesn't cover all ourdomestic and overseas consolidated Group companies, we stated the scope of report in each page.
The date of the previous report is July 2018. We
publish these reports every July, and the next issue
will be published in July 2020.
Please use this form to send us any questions
regarding our reports.
The reports contain Standard Disclosures from the
GRI Sustainability Reporting Standards. You can see
a list of the Standard Disclosures and their locationin our report here.
Komatsu has received an independent practitioner's
assurance on important quantitative data inenvironmental reporting, which can be viewed here.

■ Theme 3 : Growing with Society
095

Communication with Stakeholders

099

Compliance

103

Risk Management107

CSR Initiatives in the Supply Chain:
Support for CSR Initiatives of Business Partners

120

CSR Procurement Guidelines

122

Environmental Risk Management

131

Environmental Activities in the Product Life Cycle(Upper and Lower Stage)

134

Biodiversity

1

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Formulating CSR Themes (Materiality)
Komatsu formulated its CSR themes in 2010, placing CSR activities as the ones to respond to social needs through core business, uponmuch discussion on de ning initiatives that would both be of value to society and to Komatsu.
Also, in the Mid-Term Management Plan announced in April 2019, we touch upon the growth strategy in our core business in relation
with our CSR themes, and are striving for sustainable growth through a positive cycle of improving earnings and solving ESG issues.
In addition, even in social contribution activities that do not aim at direct pro tability, we strive to contribute to society in a way thatdraws on the strengths of our core business through initiatives aligned with our CSR themes.

Komatsu's procedure to identify CSR material issues

In 2010, with the support of Business for Social Responsibility (BSR), a nonpro t organization, Komatsu undertook a materiality
assessment to accomplish the following objectives:
1. Identify a set of CSR issues and prioritize these issues by their relevance to our business and importance to our stakeholders
2. De ne a set of global CSR themes and activities
From an extensive list of CSR issues, we selected those relevant to Komatsu as a construction/mining and industrial equipment
manufacturer. We then evaluated CSR issues based on their importance to our business. To understand the relevance of CSR issues toour business, we interviewed senior executives across our company, including the heads of regions outside Japan. These interviews
helped us in understanding the degree to which CSR issues impact our business priorities and operations. We then evaluated CSR
issues based on their importance to our stakeholders. To understand the relevance of CSR issues to our stakeholders, we reviewed
external reports, viewpoints, and public statements published by governments and policy makers, issue experts and advocates, media,
suppliers, and customers. We also took into consideration the BSR's view of stakeholder importance.

Evaluating CSR issues
We evaluated CSR issues based on the degree of importance to our business shown on the horizontal axis, and the degree ofimportance to our stakeholders shown on the vertical axis.

The CSR issues of more importance to both businesses and stakeholders are placed in the top right quadrant. We narrowed our focus to
sixteen material issues across six categories. By focusing on these material issues that have the most impact on our business andstakeholders, we believe that we are in a strong position to leverage our core strengths as an equipment manufacturer, and create
lasting social impact going forward.

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ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Komatsu's CSR Priorities
Products, Services, and Customers

Products that enhance safety
Responsible marketing and customer support

Environment

Environmentally-friendly products
Environmental e ciency (facilities, such as plants, and job sites)
Remanufacturing

Employees

Human resource development
Safety and healthRespecting employees

Human Rights

Respecting human rights
Equal employment

Ethics and Governance

Cooperation with stakeholders
Corporate governance and compliance
Collaboration with business partners to comply with social regulation

Local Community

Development of local communities
Disaster relief
Improving local residents' quality of life

Formulating CSR Themes and Key Business Activities
We identi ed three CSR Themes via a two-pronged approach, basing them on our material issues and through internal/external
dialogues within the company and with BSR.

Komatsu's CSR Themes
Enhancing Quality of Life-Providing products required by societyDeveloping People
Growing with Society
In order to achieve our goals for each of the three areas, we have determined priority activities that align with the mid-term
management plan as “activities through our core businesses”. In addition to its main business, Komatsu believes it is the
responsibility of a business to engage in “social contribution activities” in the local community where business is conducted.
Komatsu is engaging in the following social contributory activities that make the most of the know-how developed in our main
business.

3

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

CSR Themes

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Key Business Activities
Activities through the core businessSocial Contribution Activities

Enhancing Quality ofLife-Providing products
required by society -Providing products, services and solutions withhigh-quality and high-e ciency that place
importance on safety and reductionof environmental impact in response to climatechangePromoting environmental e ciency & safety
through initiatives not directly related to thebusiness
Providing products, services, know-how
required by society for free of charge

Developing People

Development of a diverse workforce
Strengthening and developing diverse andglobal-scope talent to help achieve sustainable
workplaces

Support the development of people in local
communities
Development of next generation

Growing with Society

O ering solutions for social issues throughcollaboration with stakeholders
Responsible corporate behavior

Disaster Relief
Social Contribution utilizing core strength andknow-how

Komatsu's CSR and SDGs (Sustainable Development Goals)
In light of the emphasis on corporate e orts towards ESG (Environmental, Social, Governance), Komatsu announced the Mid-range
Management Plan in April 2016 which stated that Komatsu places emphasis on ESG. In incorporating ESG into the Mid-range
Management Plan, we re-examine the relationship between Komatsu's business and CSR initiatives, reveal the direction we are
currently taking, and how Komatsu's CSR activities link to the SDGs (Sustainable Development Goals) adopted by the United Nations as
a common goal aimed at by the international community.

SDGs (Sustainable Development Goals)
The SDGs, o cially known as the 2030 Agenda for Sustainable Development is a set of 17 goals with 169 targets covering abroad range of sustainable development issues, which was adopted at the United Nations General Assembly in September,
2015.

4

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

SDG Goals and Selection Process
Based on the discussions, we did a thorough analysis to compare the 17 SDG goals and their accompanying 169 SDG targets with our
CSR activities and themes. We evaluated 1) whether there is a relation, and 2) the depth of the relation.
[Table 1: Komatsu's CSR priority areas / Priority activities and SDG goals]

For example, one of our CSR activities is providing products and services that contribute to infrastructure development and improve
the quality of life. For each SDG goal and target, we compared our activity: For example, for SDG Goal #1, we compared as follows;<Example 1> SDG Goal #1 (No poverty)
SDG Target 1.1 (By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25
a day)In this instance, we did not see a direct relation.
SDG Target 1.2 (By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its
dimensions according to national de nitions)
In this instance, we did not see a direct relation.
SDG Target 1.5 (By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure andvulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters), we believe
there is an indirect relation, and thus colored the cell light blue to indicate the connection. (Refer to ① in the Table 1)
In the same manner, we compared as follows;<Example 2> SDG Goal #9 (Industry Innovation and Infrastructure)
SDG Target 9.1 (develop quality, reliable, sustainable and resilient infrastructure, including regional and trans- border infrastructure
to support economic development and human well-being).
We colored the cell rich blue because there is a strong relation with our key theme. (Refer to ② in the Table 1)
The same process was followed for all SDG targets and all of Komatsu's CSR activities. On Table 1, the number in the cell represents the
SDG target(s) where there is a relation, and the color (dark/medium/light) indicates the depth of the relation (direct or indirect).
According to the team's analysis, ve SDG goals have a strong relationship with Komatsu's three CSR Themes. By focusing on these ve
SDG goals, Komatsu contribute to all the SDG goals comprehensively since it is proved that each SDG goal is mutually intertwined.

5

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People6

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXManagement of Environmental and Social Initiatives

008

Comparison with Global Principles

010

Dialogue with Our Stakeholders

012

Organization to Promote CSR

013

Major Achievements

020

External Evaluations

7

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Comparison with Global Principles

Comparison with Global Principles
What Komatsu considers to be material issues are listed in our CSR Priorities, each of which are in line with international standards suchas the ISO26000 and the United Nations Global Compact.
Details on these standards can be found in “Komatsu's Worldwide Code of Business Conduct” and the “CSR Procurement Guidelines,”.

ISO26000 core
subjects/issues

UNGC 10
Principles

Komatsu's CSR Priorities

Organizational
GovernanceCorporate GovernanceCompliance
Collaboration with business
partners to comply with social
regulations

Human Rights

Human Rights
Principle 1
Principle 2

Respecting human rights
Collaboration with business
partners to comply with social
regulations
Development of local
communities
Disaster relief
Improving local residents' qualityof life

LabourPrinciple 3
Principle 4
Principle 5
Principle 6

Providing safe products,
services and solutions
Equal employment
Safety and health
Human resource development
Collaboration with business
partners to comply with social
regulations

LabourPractices8

Incorporation into Komatsu's Internal
Guidelines■: Items of Komatsu's Worldwide Code ofBusiness Conduct●: Items of Komatsu Group CSR Procurement
Guidelines“Quality and Reliability” of organizational
structure, business operations, employees andmanagement■Emphasis on corporate governance■●Compliance with the Rules■

Respect for human rights
Due consideration to work-life balance■●■

Conversations or discussions with employeesor their representatives■●Zero tolerance for child labor and forced
labor■●Promotion of equal opportunities for
employment, with zero tolerance fordiscrimination and any kind of harassment■●Ensuring a safe and comfortable work
environment■●Human resources management in fair andimpartial manner■

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Comparison with Global Principles

ISO26000 core
subjects/issuesThe
Environment

Fair Operating
Practices

UNGC 10
Principles

Komatsu's CSR Priorities

Environment
Principle 7
Principle 8
Principle 9

Providing environment-friendly
products, services and solutions
Environmental e ciency(facilities, such as plants andoperation sites)
Remanufacturing

AntiCorruption
Principle 10

Corporate governanceCompliance
Collaboration with business
partners to comply with social
regulations

ConsumerIssuesProviding safe products,
services and solutions
Responsible marketing andcustomer care
Providing environment-friendly
products, services and solutions
Remanufacturing

Community
Involvement
andDevelopment

Development of local
communities
Disaster relief
Improving local residents' qualityof lifeHuman resources development

9

Incorporation into Komatsu's Internal
Guidelines■: Items of Komatsu's Worldwide Code ofBusiness Conduct●: Items of Komatsu Group CSR Procurement
Guidelines
Providing products, services and systems thatare environmentally-conscious■Environmental protection■Komatsu Earth Environmental Charter■Declaration of Conservation of Biodiversity●Reducing environmental impact,
managing chemical substances and building
up environmental management systems■

Fair and appropriate business operations
Fair and proper relationship with governmental
bodies and agencies■●Never providing, o ering or
promising inappropriate money, goods orfavors■●●Providing customers with suitable solutions
and striving to deliver products, services andsystems that are safe, environmentallyconscious and innovative■Environmental protection■●Reducing environmental impact,
managing chemical substances and building
up environmental management systems■

To fully understand its social responsibilities asa corporate citizen■Groupwide social contribution (5 Basic
Principles for Social Contribution)■●Good harmony with local communities■

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Dialogue with Our Stakeholders

10

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Dialogue with Our Stakeholders

11

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Organization to Promote CSR

Organization to Promote CSR
The CSR Department is an organization under the direct control of the President and has established the CSR Committee chaired by the
President, and has the opportunity for top management to regularly discuss the direction of CSR strategy. In addition, the CSR Steering
Committee, which consists mainly of related o cers, conducts discussions on the policy of individual activities, and in particular, is
responsible for governance functions in conducting social contribution activities.
Our CSR activities are integrated to our daily business activities, and we engage in them through dedicated divisions and committeesorganized in all our Group companies. With respect to our major overseas subsidiaries, we communicate with sta responsible for CSR
activities on a daily basis and share information in an e ort to bolster our organization and promote CSR activities worldwide.

Reinforcement of Our CSR Systems
Evaluation Tools for CSR Activities

We evaluate new initiatives to determine whether they are bene cial to both our business and our stakeholders. Of particularimportance are social contribution activities (donations), which we have monitored diligently with regards to their e ectiveness as CSR
activities since FY2013. This is carried out using a donation check sheet that we created to assess quantitative e ects via two
perspectives (our business and our stakeholders), which is then evaluated by our CSR Steering Committee upon completion.

Global Information Sharing

Prior to FY 2015, information on CSR activities implemented in overseas subsidiaries were obtained through questionnaires that werecollected periodically. We have since updated this system in order to increase its reach and e ectiveness; the information is now
updated daily on a bulletin board so that it can be disseminated on a global scale through the intranet.
In addition, overseas subsidiaries set up places for exchange of opinions through individual visits, e-mail, telephone, etc., for about 30
persons in charge who are responsible for the CSR activities of each company to share current status globally. In the future, bycollecting various opinions from various areas of the world, we will create a system to comprehensively understand and share what isrequired on the front lines of the business sites.

12

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

13

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

14

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

15

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

16

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

17

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

18

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Major Achievements

19

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

External Evaluations

External Evaluations
Commendations from Assessment Bodies
Certi ed by the CDP as a “Water” A List Company

Selected for inclusion in the Dow Jones Sustainability World Indices (DJSI World and DJSI
Asia Paci c), SRI indexes developed by S&P Dow Jones Indices (U.S.) and RobecoSAM(Switzerland)
Selected for inclusion in the MSCI Global Sustainability Indexes, SRI indexes developed by
Morgan Stanley Capital International (U.S.)
THE INCLUSION OF KOMATSU LTD IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE ASPONSORSHIP, ENDORSEMENT OR PROMOTION OF KOMATSU LTD BY MSCI OR ANY OF ITS
AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE
MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITSAFFILIATES.

Selected for inclusion in the index of companies recognized for their contribution tosustainable development by NYSE Euronext and Vigeo

Rated as a “Prime” machinery company in the social responsibility ratings by Oekom, aGermany-based independent CSR assessment company

20

ESG Databook 2019

Formulating
CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

External Evaluations

Selected as a MSCI Japan ESG Select Leaders Index

Selected as a MSCI Japan Empowering Women Index

Selected for inclusion in the FTSE Blossom Japan Index Component (July 2018)“FTSE Russell (the trading name of FTSE International Limited and Frank Russell
Company) con rms that Komatsu has been independently assessed according to theindex criteria, and has satis ed the requirements to become a constituent of the FTSE
Blossom Japan Index. Created by the global index provider FTSE Russell, the FTSE
Blossom Japan Index is designed to measure the performance of companies
demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE
Blossom Japan Index is used by a wide variety of market participants to create and assess
rsponsible investment funds and other products.”

External Evaluations for CSR Activities (FY2018)

2018
July

Selected for inclusion in the FTSE Blossom Japan Index Component

July

Selected as a MSCI Japan ESG Select Leaders Index

July

Selected as a MSCI Japan Empowering Women Index

September

Listed on the Dow Jones Sustainability Index list of companies.

2019
January

Certi ed by the CDP (Carbon Disclosure Project) as a “Water” A List Company

February

Ranked 6th (among 1,221 rms) in the “CSR Firm Ranking” compiled by Toyo Keizai Inc.
Granted Special Jury Prize in NIKKEI Smart Work Award 201821

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Theme 1 : Enhancing Quality of Life

023

Product Safety - Increasing Safety by Innovation -026

Quality and Reliability- Responsible Commitment to Customers -033

Occupational Safety and Health041

Pursuing Environmental Management049

Relationship between Business Activities and the Environment-Product Life Cycle and Mitigating Climate Change-

060

Relationship between Business Activities and the Environment-Promoting Recycling-

22

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Product Safety - Increasing Safety by Innovation -Product Safety -Increasing Safety by InnovationOur innovative processes a ord us the ability to consistently conceive valuable ideas in multiple elds, such as environmental designand economic e ciency. Out of these areas, the one which we consider to be of the most importance is that of “Safety”.
From providing safe products to the overall safety of our automatic operational systems, we persistently utilize the full scope of ourinnovation capabilities to nd ways in which safety is used to maximize the value of our products to our customers.

On-site Operational Safety
The provision of profoundly safe products is the most important
responsibility of any manufacturer. With that in mind, we strive to
exceed what is expected of us by going above and beyond the callof duty. On top of meeting all international standards andregulations, we supplement our products with additional safety
features that remain unsurpassed by our competitors.
This commitment, compounded with our innovative drive forsafety improvement, also allows our customers to achieve theconsummate climate of safety within their operations.

In 2013 and 2014, Komatsu introduced the ICT Bulldozer and ICT Hydraulic Excavator respectively, an innovation that made possible
the automatic control of blades and buckets. These systems by-pass the need for manual experience, allowing even fresh or lessexperienced workers to perfectly reproduce the same high-level precision construction work of a skilled worker. This has eliminated thepast need for ancillary workers and guiding processes, thus enabling our customers to make huge savings on labor costs and improving
general safety.
The pinnacle of our safety innovations has birthed a fully automated operational system, known as the Autonomous Haulage System(AHS). This ingenious system has been fully-established in certain major mines in Australia and Chile, which involves the unmanned
operation of giant dump trucks that carry over 300 tons of soil and minerals. The mine is an often harsh environment which requires
constant vigilance and safety protocols, having multiple construction machines and vehicles that operate around the clock on a 24 hourbasis. The AHS system utilizes cutting-edge technologies like satellite communication and various radars and sensors to create a usefulsystem that meets this need in its entirety, responding to the diverse nature of our customer's safety requirements.
Despite these signi cant achievements, we are fully aware that there is always room for amelioration. We will continue to innovate andimprove, furthering the evolution of such safety systems in order to realize the optimal safety environment that our customers requirein their respective sites of operation.

23

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Product Safety - Increasing Safety by Innovation -24

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Product Safety - Increasing Safety by Innovation -25

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -Quality and Reliability - Responsible Commitment toCustomers Komatsu's commitment to quality and reliability is encapsulated within the fundamental principle of “Monozukuri” (manufacturing
competitiveness). With this in mind, we are dedicated to maintaining a portfolio of rst-class products-both hardware andsoftware−that builds on customer satisfaction. Our basic managerial policies have a strong focus on customer-centricity, creating a
manufacturing ecosystem that places customer satisfaction at the forefront of its priorities. We maintain the standards of quality thathave become an integral part of our organizational culture through a continuous process of assessment and re nement that takes
place across all areas of our production process.
Our quality management systems touch on a number of speci c elds, such as the global environment, quality assurance, and theeducation and training of our personnel. We also evaluate our performance in these areas using a number of key performanceindicators.

Our Principles (Komatsu's Principles that govern Quality Assurance)
Komatsu has established the following principles on quality in its products and services, which all subsidiaries and employees are
responsible for putting into practice.

General Approach to Quality and Reliability
We provide customers with products, services, and systems that are considered to be environment friendly, safe, and innovative.

De nition of Quality Assurance
The company has a responsibility to take actions that will ensure it is able to provide products and services that the customer canpurchase and use with a sense of assurance and satisfaction and use for many years to come.

Principles Governing Quality Assurance
1. Putting customers rst, being receptive to the views of the customer, and responding appropriately to the customer, thereby
earning the customer's satisfaction, are fundamental to the job of every employee and constitute the responsibility of every
employee.
2. Complying with international standards and the legal requirements particular to individual countries as a matter of course, andproviding products and services that, from the perspective of the customer, have incorporated proper regard for safety and a senseof assurance and that do not easily malfunction, are fundamental to the job of every employee and constitute the responsibility of
every employee.
3. Providing products and services that incorporate proper regard for global environmental conservation is fundamental to the job of
every employee and constitute the responsibility of every employee.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -4. Providing products and services that are creative and provide bene ts to the customer is fundamental to the job of every employee
and constitute the responsibility of every employee.
5. Giving the customer a sense of safety, assurance, satisfaction, and the ability to use the product for many years to come is a sourceof happiness for every employee.

Mechanisms for Quality Assurance
Komatsu employees across all areas of our operations, from product planning to development, manufacturing, sales, and after-sales
service, work together as a single cohesive unit to ensure that the products we develop are safe, innovative, and of high quality. Our
unique “monozukuri” system enables the creation and subsequent introduction of highly competitive DANTOTSU products into themarket, whilst maintaining our signi cant competitive advantage through goods and services with a wide array of substantial features.
Keeping in line with our commitment to product quality and innovation, a variety of meetings are held at each stage of thedevelopment and manufacturing process in order to ensure that our o erings are of the highest possible quality. Through thismeticulous step-by-step process, the product's features are enhanced and re ned until it meets the high standards that we adhere to.
Through such approaches, the company is able to strengthen safety assurance and satisfaction for customers while simultaneously
providing products and services that take the global environment into account and comply with both international speci cations andthe regulatory requirements of individual countries.

Structure for Quality Assurance
The majority of Komatsu's product portfolio is made up of manufacturing equipment (construction and mining equipment, presses,
and forklifts) that lend value to customer enterprises through enhanced rates of operation and productivity. In order to ensure optimaluser experience, Komatsu sales agents engage with customers on both a pre-sale and post-sale basis to provide advice, conduct
maintenance, and collect feedback. This collated information is then related back to the relevant Komatsu divisions for evaluation and,
if it should be needed, subsequent follow-ups or remedial actions.
Komatsu also maintains comprehensive databases on market information regarding product quality. Company sales sta are able toutilize this wealth of information to ensure the rapid resolution of quality-related issues, should they be raised.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -Increasing the Degree of Customer Satisfaction
In accordance with our Principles that Governing Quality Assurance, Komatsu has introduced a range of initiatives that deal explicitlywith increasing customer satisfaction.
We take customer response seriously, and have implemented rigorous feedback mechanisms in order to give due consideration to theviews of our consumers. Utilizing regular customer satisfaction and post-launch eld surveys, we acquire and collate copious amountsof data. The results from these assessments are used by our analysts to improve upon not only our product quality, but our quality
assurance frameworks as well. The surveys help furnish new value to customers as the company develops DANTOTSU products that
anticipate customer needs in advance and delivers services with distinct features.
Komatsu is able to raise the level of customer satisfaction through the following approaches.

Post-launch Field Surveys and Feedback of Results
Komatsu's post-launch eld surveys are a core component of our customer satisfaction assurance framework, conducted by our
employees who visit purchasers of our newly developed products in order to acquire important data regarding product evaluation.
These personnel listen to customer feedback, taking input on all aspects of the product in order to report back to the relevant Komatsu
divisions. After careful assessment of operational feedback and customer requests pertaining to service and replacement parts, we
process the data into quanti ed objectives for improvement. The data is also disseminated to all levels of the company in order toensure an e ective understanding of customer needs and potential areas for advancement. With these systems in place, we are able toconsistently deliver products and services that generate optimal levels of customer satisfaction.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -Tracking Vehicles with Extended Hours of Operation*
Keeping in accordance with our commitment for pursuing product durability and reliability, we track our product vehicles that haveseen lengthy periods of operational service. By storing this information, Komatsu is able to predict potential issues with productusability and respond promptly to requests for servicing and other maintenance concerns. In addition to this, we utilize a remotemanagement system named “KOMTRAX PLUS” to monitor equipment operating conditions, allowing us to ensure continued productstability in terms of durability, e ciency, and functionality. Through these assessment systems, we are able to analyze customer
expectations and satisfaction in relation to our product quality objectives. Should there be a failure to meet these objectives, Komatsu
designs carefully evaluated proposals to rectify problematic areas, later integrating any e ective measures into product revisions ordevelopment. This process increases product durability and reliability and thus extends product lifecycles, leading to greater customer
satisfaction and an overall decrease in resource consumption and waste production.
* De ned as vehicles with an operating history of 5,000 hours or more

Using ICT to Support Customers throughout the Product Life Cycle
Komatsu uses ICT-based remote vehicle management systems in order to track the current status of a vehicle's “health”, its operating
status, and other relevant information metrics. The Komatsu Tracking System (KOMTRAX) is used for conventional construction
equipment, while the Komatsu Tracking System Plus (KOMTRAX Plus) is used in relation with larger mining equipment.

Quality Assurance Activities at the Global Level
By fully implementing our quality assurance systems on a global level, Komatsu is able to ensure that its products meet a standardized
level of high quality across all countries of operation. Regardless of geographical location, our products are subject to strict, uniform
standards in relation to technical drawings, manufacturing systems, inspection methods, information collection, and quality
management.
Komatsu has a number of manufacturing facilities that it refers to as “mother plants”. These plants have product development
capabilities and serve as the central hub for global product development initiatives using cutting-edge technologies and techniques.
Any form of progress or advancement that is conceived at a “mother plant” is immediately disseminated to other Komatsu

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -manufacturing locations around the world, creating a uniform ecosystem that promotes technological development and enhances
product quality.

Standards for Product Safety
Safety and customer trust are at the forefront of all our quality assurance activities. In line with this dedication, Komatsu has
formulated a number of Product Safety Standards and associated principles that all employees are expected to comply with in theexecution of their duties. This enables us to live up to our established reputation by delivering products that exceed customer
expectations in terms of safety, quality, and longevity.

Information System for Product Safety and Services
While we have utmost con dence in the safety of our products, Komatsu is nonetheless aware of the fact that potential issues could
arise in the course of their usage. In order to facilitate a rapid response to any problems that occur, we have established an information
system that deals exclusively with product safety concerns.
The system executes a consistent process of education and re nement, making constant improvements and allowing employees at alllevels to respond quickly to problems without delay. Using the system, personnel are able to (1) assess the cause of the accident andsubsequent procedures to be taken, (2) contact the relevant governing authorities, and (3) decide the best course of action in terms ofremedial measures, such as product recalls.

Standards for Product Safety
1. Compliance
The provision of products and services that comply with international standards and the legal requirements particular to individual
countries is fundamental to the job of every employee and constitutes the responsibility of every employee.
2. Safety via prevention
The provision of products and services that are safe and provide a sense of assurance, and do no harm to the customer isfundamental to the job of every employee and constitutes the responsibility of every employee.
3. Security regarding accidents
The provision of products and services that minimize any injury that might occur to a customer who has an accident isfundamental to the job of every employee and constitutes the responsibility of every employee.
4. Transparency
The ongoing provision of advance safety warnings after receiving information from the customer and, in the case of a defect arisingin a product or service, prompt response measures and the provision of information, are fundamental to the job of every employee
and constitute the responsibility of every employee.
5. Improvement of organizational culture
In order to create a corporate culture in which product safety is emphasized, the standardization of the safety management systemand safety techniques as well as ongoing e orts to improve them are at all times fundamental to the job of every employee andconstitute the responsibility of every employee.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -31

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Quality and Reliability - Responsible Commitment to Customers -32

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and HealthOccupational Safety and HealthOccupational Safety and Health is a core component in Komatsu's business operations. In line with this commitment, Komatsu thus
enhances safety at the workplace for our employees and business partners.

Our Approach to Safety and Health at the Workplace
Komatsu communicates the message of “Safety First” to the Komatsu Group and addresses occupational safety and works on mental
and physical health care to create a safe and comfortable work environment.

Message from the President Concerning Occupational Safety and Health
1. The Komatsu Group shall, rst of all, strive to ensure a safe and comfortable work environment, and maintain andpromote employee health.
2. The Komatsu Group shall promote proactive occupational safety and health activities in order for all employees to achieve
the above conditions by working together as one team.
3. Each and every person in a senior management position of the Komatsu Group shall acknowledge the above two mattersas top priority tasks and shall take the initiative in demonstrating the execution of daily duties accordingly.
Considering our obligation to occupational Safety and Health, we have implemented the following guideline: All the Komatsu Group
companies, including all top managers and employees, shall promote occupational Safety and Health activities so that everyone canwork in a safe and comfortable work environment in accordance with the policies described below.

Occupational Safety and Health Policies(Released as a part of the Komatsu's Worldwide Code of Business Conduct on April 1, 2011)
1. Observe the laws and regulations concerning occupational safety and health as well as internal rules, key items common
to the Komatsu Group about occupational safety and health, and particularly items agreed as a result of labormanagement consultations in each workplace.
2. Set up targets for activities based on occupational safety and health policies, review their progress, and endeavor tocontinuously improve and enhance occupational safety and health activities.
3. Carry out occupational safety and health activities in management-and-labor partnership on a full participation basis andkeep good communication with stakeholders with regard to occupational safety and health.
4. Identify and evaluate the risk for occupational safety and health of a workplace and take appropriate actions accordingly.
5. Actively promote employees' healthcare management and support the maintenance and promotion of employees' health.
6. Actively promote education, training and quali cation acquisition necessary for employees' occupational safety andhealth activities, and endeavor to develop human resources for safely carrying out their responsibilities in the workplace.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and Health34

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and Health

35

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and Health

Main Themes of the Five-Year Health Development Plan
1. Addressing lifestyle diseases and cancer: Prevent lifestyle-related diseases and reduce the number of patients, and reduce theseverity of diseases
2. Addressing tobacco-related diseases: Reduce smoking and prevent passive exposure to smoking
3. Addressing mental health: Reduce the number of individuals with mental disorders, provide early response and support return toappropriate workplaces, and create a happy and vigorous workplace
4. Addressing risks of impaired health: Eliminate and reduce the risks of impaired health associated with the work environment andoperations
5. Response for small domestic worksites: Support health development at small worksites (such as sales and service sites)
6. Global response: Formulate and promote global measures for occupational safety and health management

Cardiopulmonary resuscitation training for all domestic Komatsu Group employees
The infectious disease and rst aid team of the ve-year health development plan is engaging in activities to acquire knowledge andskills with regards to cardiopulmonary resuscitation methods and AED for all Komatsu Group employees in Japan. (As of the end of
FY2018, domestic employee cardiopulmonary resuscitation training attendance rate: 99.7%)
The purpose of this activity is to make a stand from the perspective of respect for human life, to improve the knowledge and skills of
our employees, and to take the initiative in dealing with emergency situations encountered inside and outside the company. We also
aim to contribute widely to local residents by posting AED installations at each site and displaying "AED mounted car" on our servicecars for the sales company.

Cardiopulmonary resuscitation training
AED mounted car

Supporting Supplier's Safety Activities
Komatsu is conducting the following safety activities for the “Komatsu Midori-kai”, which is an organization of Komatsu's businesses
partners (suppliers) in Japan.
1. Support for the introduction of Japan Industrial Safety and Health Association (JISHA)'s Workplace Safety Health Impact Projectfor small and medium-sized businesses (2015)
For our 97 business partners—suppliers of outsourced items—Komatsu introduced JISHA's Workplace Safety Health Impact
Project, paying for the inspection fees, and asking each company to improve their safety level in 2015.
2. Conduct Safety Patrols
Komatsu conducts paperwork inspections and patrols the workplace, checking especially the legal compliance status (such as
noti cations and inspections) and unsafe places in the workplace and the possibility of unsafe conduct. For ndings, we request
the submission of a report listing preventative measures, and follow up accordingly.
3. Participation of business partners in the Komatsu Group Safety and Health Conference.
The heads of business partners are invited to participate in the Komatsu Group Safety and Health Conference that is held every
year in June.
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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and Health37

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Occupational Safety and Health38

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

SocialContribution
Activities

Theme 3 :Growingwith Society

GRI
STANDARDS
INDEX

Occupational Safety and Health

1. The data for all industries (Japan) and construction and mining equipment manufacturing industry (Japan) are provided by the
Ministry of Health, Labour and Welfare.
2. The scope of the Komatsu Group (Japan) includes Komatsu Ltd. and group companies in Japan.
3. The scope of the Komatsu Group (global) includes "Komatsu Group (Japan)" and overseas production plants.
The Komatsu Group has been fostering activities for acquiring ISO 45001 Certi cation.
In Japan, Osaka Plant acquired certi cation for the rst time in FY2019, and other divisions and Group companies are planning toacquire the certi cation in 2020. In addition, overseas companies plan to advance initiatives to acquire certi cation from FY2019.
The situation of OSHMS/OHSAS 18001 certi cation/renewal as of 2018 is shown below.
OSHMS Certi cation and Renewal
FY

2009

(◎ : Certi ed ○ : Renewed）

2010

2011

2012

2013

2014

2015

2016

Awazu Plant

○

○

○

Osaka Plant

○

○

○

Oyama Plant

◎

○

○

Ibaraki Plant

◎

○

○

2017

2018

Preparingfor theacquisitionof ISO45001
certi cation

Koriyama Plant◎○

Shonan Plant

◎

○

○

○

○

○

Kanazawa Plant◎

Tochigi Plant

◎

○

○

Komatsu Castex

◎

○

○

Komatsu NTC Toyama
area◎

Komatsu Cabtec

○

◎

○

GIGAPHOTON

◎

KELK

◎

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Environmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Occupational Safety and HealthOHSAS 18001 Certi ed O ces
FY

2009

2010

2011

2012

Komatsu America
Chattanooga
Manufacturing
Operation

2013

2014

◎

Komatsu America
Peoria Manufacturing
Operation
Komatsu Germany(Mining Division)

◎

2015

2016

○

◎

○

○

Komatsu Forest

○

○

○

Komatsu Germany(Construction Division)

○

○

○

◎

PT Komatsu Indonesia
PT Komatsu
Undercarriage
Indonesia

◎

○

2018

○

○

Bangkok Komatsu

2017

○
○

○

○

* OHSMS: Occupational health and safety management systems* OHSAS 18001: Occupational health and safety assessment series

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

Theme 3 :Growingwith Society

SocialContribution
Activities

Base Year

Mid- and LongTerm Targets(reduction rate)

GRI
STANDARDS
INDEX

Pursuing Environmental Management

Mid- and Long-Term Targets
Area

ObjectApplication

Construction
equipment
products
performance

2000

57%

65%

39.8%

Overseas

Improvement rate perunit of production

2010

32%

40%

33.6%

Japan

Improvement rate perunit of production

2010

10%

20%

0.4%

Overseas

Improvement rate perunit of production

2010

10%

20%

10.4%

Japan

Improvement rate perunit of production

2010

40%

50%

51.3%

Overseas

Improvement rate perunit of production

2010

10%

20%

34.7%

Japan

Improvement rate perunit of production

2006

32%

39%

31.7%

Overseas

Improvement rate perunit of production

2011

13%

22%

0.5%

40%

45%

36%

20%

25%

3-11%

Waste

CO2
HybridHydraulic
Excavator
CO2

2030

Improvement rate perunit of production

Water

Logistics

2020

Progress(results)
FY2018

Japan
CO2

Production

Index

NormalHydraulic
Excavator(non-hybrid)

Fuel Consumption
Reduction Rate

2007

* Minus indicates an increase

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ESG Databook 2019

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Pursuing Environmental Management

Additional Targets for Mid-Term Management Plan
Area
CO2during
construction
equipment
usage

ObjectApplication

Index

CO2

Construction
equipment
producedworldwide

Improvement
rate per unit ofproduction

Base Year2025 Targets(rate of reduction)

Progress(results)
FY2018

25%

8.8%

2007

New mid-term Targets from 2019
Komatsu has been moving forward under the new mid-term management plan from 2019. We set new ESG targets and expressed ourcommitment to sustainable growth through a positive cycle of pro t improvement through growth strategies and initiatives for ESG
issues.
Our targets from scal 2019 are to reduce CO2 emissions from products and production by 50% by 2030. In addition, as a new indicator,
we decided to aim for a ratio of 50% of renewable energy power (RE ratio) by 2030.
The new mid-term 2030 targets, including other indicators, are as follows:
Mid-term targets (applicable from 2019)
Area

Products

Production

Application
Construction
Equipment
MiningEquipment
Forestmachines

Domestic andoverseas
production
bases

ObjectIndex

Base Year

2030 Targets

CO2

Fuel
Consumption
Reduction

2010

50％ reduction

CO2

Improvement
rate of basic
unit

2010

50% reduction

Electricity

Ratio ofrenewableenergy in total
electricity
usage

-

50%

Water

Improvement
rate of basic
unit

2010

60% reduction

Waste

Improvement
rate of basic
unit

2010

40% reduction

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

Area

Application

ObjectBase Year

2030 Targets

Japan

CO2

Improvement
rate of basic
unit

2006

39% reduction

Overseas

CO2

Improvement
rate of basic
unit

2011

22% reduction-

CDP
AList（Climate,
Water),
Inclusion in the
Dow Jones
Sustainability
Indices (DJSI) ,etc.

Logistics

External evaluation

Index

-

-

External
evaluation

SBT (Science-Based Targets) Approved
Komatsu's CO2reduction objectives have been certi ed by SBT as of April 11, 2017.
SBT (Science-Based Targets) is an initiative that involves “setting goals that arecompatible with science.”
The COP21 (Paris Agreement) marked the introduction of a new set of CO2reduction
objectives that were submitted by various countries. However, even with thesummation of target values, it was found that it would be impossible for theincrease of average global temperatures in 2100 to be stay within 2℃ (as compared
to temperatures before the Industrial Revolution).
Therefore, after a detailed examination by the businesses of the world, reduction
objectives have been reassessed and SBTi (SBT initiative: CDP, Global Compact,
WRI, WWF) is supporting and approving SBTs to reach the goal of an increase of lessthan 2℃.
Komatsu 's SBT meets the requisites of the temperature increase of less than 2℃
scenario.
Komatsu 's SBT are as follows
1. SCOPE1+2: Base unit -49% (Target Year 2030; Base Year 2010)
2. SCOPE3: Total -46% (Target Year 2030; Base Year 2012)* Note: While Komatsu's 2015 medium and long-term objectives (2020 and 2030 respectively) di er from SBTi in terms of a few requisite
conditions (such as using the same base year for assessing both domestic and overseas operations) and target values, the targeted rates of
reduction are comparatively equal.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Pursuing Environmental Management

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

50

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

Mitigating Climate Change through Products and Service
The main bulk of CO2 emissions produced throughout the lifecycle of our construction equipment is centered on product operation,
during which approximately 90% of emissions are produced. We have acknowledged this fact, and are working to reduce these
operational emissions through three di erent initiatives: “Dantotsu Products”, “Dantotsu Service”, and “Dantotsu Solutions”.

Step1: Reduction of CO2 Emissions through Dantotsu Products
Step2: Reduction of CO2 Emission by Products through Dantotsu Service (KOMTRAX)The Komatsu Tracking System “KOMTRAX” is a system developed by Komatsu that automatically gathers the operational
information/health information of our construction vehicles that operate all over the world, making it possible to thenmonitor/manage/analyze the vehicles remotely. Information with regards to operation times, fuel consumption, and other such
relevant data is communicated to our customers via the internet, which is then analyzed to create opportunities for improvement. Thisenhanced operational e ciency helps to reduce fuel consumption, which results in a reduction in overall CO2 emissions.

Step3: Reduction of CO2 Emissions for Overall Construction Work through Dantotsu Solutions(SMART CONSTRUCTION using ICT Construction Equipment)
In 2013, Komatsu introduced the world’s rst automatic blade control ICT bulldozer, D61PXi-23, to the North American, European, andJapanese markets. Following this, in 2014, Komatsu developed and released a hydraulic excavator with semiautomatic control
functions (PC210LCi-10 for North America and Europe, and PC200i-10 for Japan). Preliminary calculations based on in-house testing
were promising, with construction data for ICT hydraulic excavators showing that fore-slope shaping work using the PC200i-10 resulted
in an approximate reduction of 30% in fuel consumption. In addition, the same testing showed that ICT bulldozers (like the D61DXi-23)
used in land preparation work resulted in an approximate reduction of 25% in fuel consumption. Our testing with hydraulic excavators
also showcased a signi cant decrease in CO2 emissions.
To consolidate our e orts in this sector, Komatsu is implementing “SMART Construction”, a system that uses ICT-type construction
machines alongside drones and 3D scanners to take real-time topography measurements. This initiative helps showcase the e ciencyof our machines by recording progress in construction sites and other relevant performance indicators.

Reduction of CO2 Emissions from Construction Equipment (Estimate ofAmount of Reduction Contributions)
In Komatsu's Mid-term Management Plan (FY2016 - FY2018), we set the goal of achieving a total of 25% reduction by 2025 in CO2emissions per unit of work from construction equipment, compared to our base year of FY2007. In order to assess our progress towards
achieving this target, we have set up a number of key performance indicators, such as CO2 reduction resulting from fuel e ciency, worke ciency, and equipment capability as compared to FY2007.
Steady progress has been made, and we found that the machines manufactured in FY2018 achieved a reduction of 8.8% in CO2emissions as compared to our base year. This equates to the reduction of 4.0 PJ in terms of energy. Constant operation of thesemachines for a year (about 1200 hours) would result in an overall reduction of 275,000 tons of CO2, an equivalent of approximately 58%
of Komatsu's total manufacturing plant CO2 emission in FY2018.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

Independent Practitioner's Assurance
CO2 emissions for operation time of one year (kton-CO2)

Electric Mini Excavator
Aiming to deliver environmentally and human-friendly next-generation construction
machines－－

Main Speci cations
Item

Exhibited vehicle speci cation

Bucket capacity（m3）Dimensions(for transport)

0.09
Total length（mm）

4,950

Total width（mm）

1,740

Total height（mm）

2,570

Rear-swing radius（mm）

1,420

Machine weight（kg）

4,730

Motor output（kW）

18.2

Battery capacity（kWh）

36

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

SocialContribution
Activities

Theme 3 :Growingwith Society

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-－

PC2000-11（Tier4 Final）North America Speci cation
Equipped with next-generation clean engine, environmentally friendly－

PC2000-11 Work volume, fuel consumption, fuel e ciency
Work mode
Use

Compared to existing 8 type P mode
P＋

P

E

Large output

Prioritize output

Prioritize fuelconsumption

Work volume（t/h）

1.12

1.03

1.00

Fuel consumption（l/h）

1.08

0.96

0.92

Fuel e ciency（t/l）

1.04

1.07

1.08

Initiatives to Mitigate Climate Change in Business Operations
Reducing CO2 Emissions in Manufacturing Operations
As a part of our e orts to mitigate climate change, Komatsu set mid- and long-term objectives in Japan and at overseas operations
about the amount of electricity, gas, oil and other types of energy used in research/development at our o ces and in manufacturing
operations. By using CO2 emissions per unit of manufacturing value as our main indicator, we aim to proactively reduce the amount of
CO2 emissions per unit.
In 2010, in response to the climate change issues raised in the Post-Kyoto Protocol, we set a mid-term objective of a 40% reduction in
CO2 emission levels by 2015, compared to the level in 1990. However, using the activities that followed the Great East Japan
Earthquake as an impetus to cut electricity use by half, we have changed our midterm objectives and set the ambitious goal of a 54%
reduction compared to FY2000 levels, pursued activities to reduce power consumption and achieved signi cant success. As a result, inFebruary 2017, we received the Kanto Bureau of Economy, Trade and Industry Director's Award as a superior energy managementbusiness operator. From FY2016, we have set new mid- and long-term objectives for both domestic and overseas operations, and are
moving forward with further activities for improvement.
In FY2018, because of the increase in production due to growing demand for construction/mine machinery, CO2 emissions increased inJapan and overseas. However, the emission intensity per production value declined from the previous year.
We promoted energy-saving activities through production reform across the company and the additional establishment of solar power
plants in Japan, reducing the CO2 emission intensity per production value by 39.8% (slightly down from the previous year), comparedto FY2000. In addition, the rate of renewable energy in in-house power generation increased because we minimized the use of fossil fuelin this process. Because of the proactive introduction of fuel shifts and green electricity (wind power), the CO2 emission intensityof overseas plants declined by 33.6% compared to FY2010, achieving the midterm objectives earlier. Moreover, the usage rate ofrenewable energy including green electricity in electricity consumed overseas increased to 11%. We aim to achieve the new midterm
objectives in FY2019 and later, promoting improvement in the use of renewable energy to reduce CO2 emission intensity.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

CO2 emissions, energy indicators in production activities
Independent Practitioner's Assurance
CO2 emissions (Japan)

CO2 emissions (Overseas)

Bangkok Komatsu’s "Safe energy, Save the environment":
Saving energy and reducing CO2 with solar roof
Power consumption (factories only) by Bangkok Komatsu was 4,653 MWh in FY2016 and increased by 5% to 4,887 MWh in
FY2017. Thailand’s Board of Investment (B.O.I) set up the project for the entrepreneur to promote energy saving by installingthe solar roof. With the B.O.I certi cate, participating companies can deduct 50% of their invested amount for the solar systemfrom corporate income tax. We started the phase 1 plan to install a solar roof with capacity of 853.3 kWp on the Fabrication
Factory to assist fabrication and began internal solar power generation in July 2017, producing solar power of 690 MWh. In
FY2018 we generated solar power of 885 MWh, up 30% from FY2017, accounting for 13.7% of power consumption (factories
only) 6,492 MWh. In phase 2 of the solar roof project in phase, we are installing a solar roof with capacity of 920 kWp on the
Assembly Factory (started in July 2019), and in phase 3 are going to install a solar roof with capacity of 1,412 kWp on the
KOMATSU Way building, warehouse and Fabrication Factory to assist casting.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

FY2018: Installed solar roof(920.7 kW)

FY2018: solar roof under construction

Certi ed as a CDP Climate Change A-List Company
Komatsu was certi ed as a Climate Change A-list company in 2018 by CDP, an international non-pro t organization thatprovides environmental information disclosure systems.
These certi cations are awarded to companies recognized as global leaders in addressing climate change.
Every year, CDP surveys the environmental impact of several thousand companies worldwide and their business risks as well
as opportunities due to the impact, and announces its independent assessment. In 2018, CDP conducted a survey on behalf of
650 institutional investors, holding assets of 87 trillion USD and 115 companies, and organizations with raised funds of 3.3
trillion USD. The companies that respond to the survey are rated from A to D- based on their answers about issues such as
climate change, deforestation, and water security.
Komatsu has positioned environmental activities as one of the highest priorities for management, and in the medium-term
management plan with ESG (environment, social, governance) as an important eld, we remain active. In particular, in orderto dramatically reduce CO2 emissions, we will promote smart construction, which utilizes an ICT construction machine and IoT
to realize future sites and production through connections. We are committed to achieving high energy savings in the eld,
and as the top leader in the industry, we will promote activities to achieve a low-carbon society.

Reduction CO2 Emissions in Logistics

CO2 Emissions Reduction Conditions in Global Transport(Basic Unit of CO2 Emissions per Cargo Weight: kg-CO2/ton)
In 2011, Komatsu began improving our data collection regarding CO2 emissions from logistics operations in our 10 major international
business locations.Including the improvements that were implemented in domestic locations from 2006, we have now implemented
improvements in logistics operations on a globally consolidated basis at all 25 business locations.
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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

Domestically, we have continued to focus on reducing transportation distance by increasing the utilization rate of Kanazawa and
Hitachi Naka Ports (which are located adjacent to manufacturing plants), as well as improving long distance and overlandtransportation through the use of coastal vessels and railways (modal shift).
As a result, in FY2018 we achieved a reduction of 3.6 points in CO2 emissions per cargo weight when compared to emissions in FY2017.
Our overseas operations also saw an improvement in the reduction of CO2 emissions, with a decrease of 6.0 points when compared toemissions in FY2017.

Global Shipment CO2 Emissions Volume and Basic Unit
Independent Practitioner's Assurance* A basic unit index is an index relative to the CO2 emissions per cargo weight in a reference year (2006 for Japan, 2011
for Overseas) as 100.

CO2 Improvement for Domestic Transport (Expansion of near port usage of export vehicles)
Promoting the Utilization of Kanazawa Port
Background
Based on our vision for Komatsu as a company that is rooted in the local community (Ishikawa Prefecture), we initiated full-scale useof Kanazawa Port in 2008
We engaged in activities that contributed greatly to the community while working to reduce CO2 emissions and transportation costs,
and alleviate the workload of truck drivers.
We were also able to reduce CO2 emissions by 1,218 tons in FY 201856

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-【Recent main body shipment (construction machines,
presses) numbers and CO2 suppression】

Examples of initiatives currently underway (increase in the use of container ships)

Super Rack Trial (bulldozer)

Overseas transportation ・improvement in CO2 emissions BKC (Thailand) Expansion of use ofnatural gas vehicles
As reported since 2016, NGV (Natural Gas Vehicles) continue to see an increase in popularity in BKC (Thailand), an overseas groupcompany of Komatsu.The rate of NGV conversion (since its introduction) expanded to 78.6% in FY2018.
Cumulative total CO2 reduction at BKC was 738 tons - CO2（FY2012～FY2018）
The FY 2018 CO2 reduction amount of 201.5 (ton - CO 2) / year corresponds to 21% of BKC total emissions.

57

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

Reducing CO2 Emissions in Sales and After-sales Divisions, Main Partner
Companies, and Non-manufacturing Divisions

Komatsu engages in continued e orts to assess and reduce the amounts of CO2 emissions across all areas of operations.
This encompasses not just our manufacturing plants, but also our sales and after-sales service divisions, main partner companies, andnon-manufacturing divisions (like the head o ce and Technology Innovation Center). The table below summarizes the amount of CO2
emissions and energy consumption in these divisions and companies.

CO2 Emissions and Energy Consumption of Sales and After-sales Service Divisions, Main
Partner Companies, and Non-manufacturing Divisions (FY2018)
Independent Practitioner's Assurance
Main sales and after-sales
service divisions

Main partnercompanies(93 companies)

KomatsuNon-manufacturing

CO2(kt)

7.6

406.6

5.4

Crude-oil equivalent(1000kℓ)

4.4

193.8

2.8

Amount of CO2 Emissions by Scope 3

Independent Practitioner's Assurance
In addition to CO2 emissions from production / sales / service etc., Komatsu aims to collate data regarding CO2 emissions from ourentire supply chain, and reduce CO2 emissions. For that purpose, Scope 3 CO2 emissions are calculated each year.
Scope1:CO2 directly discharged from Komatsu (e.g. CO2 emissions during fuel combustion)
Scope2:Indirect emissions of CO2 due to energy use in Komatsu (e.g. CO2 emissions produced at power generation
due to use of purchased electricity)

Scope3:Other indirect CO2 emissions(Example) Upstream: CO2 etc. generated during manufacturing of purchased items
Komatsu: Transportation ・CO2 emissions occurring during commuting, business trips etc.
Downstream: CO2 emissions produced when using products, such as construction
machinery58

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Product Life Cycle and Mitigating Climate Change-

From live data gathered by KOMTRAX, Komatsu has gained perspective on the amount of CO2 emissions (Scope 3 Category 11)
produced by our products manufactured in reported scal year in operation world-wide.
The calculation was performed as follows.

Calculation of Emissions from Customer Use(1) Calculate the following by each model
CO2 emissions over the life of each model= (Production Volume for reported scal year) × (Fuel Consumption; L/kWh) × (Engine Output; kW)× (Engine Life; as product life; h) × (CO2 Conversion Factor)※Data for fuel consumption（L/KWh）was collected using KOMTRAX as a representative model.
(2) Total these values, calculated for each model in (1) above
For others, including the 14 remaining categories, general CO2 emissions was calculated. The result is shown in the pie chart below.

*1 LCA refers to the environmental impact assessment method for individual products at each stage, from manufacture, transportation, sale, use,
disposal, to reuse*2 Scope 1 refers to direct CO2 emissions by operators (ex: fuel consumption)*3 Scope 2 refers to indirect CO2 emissions by operators (ex: power purchase)*4 Scope 3 refers to CO2 emissions by operators from within our supply chain (ex: emissions of product during operation, emissions from suppliers,transportation, business trips and commuting)* Calculating each category, the amount was calculated domestically and overseas. The amount of category (4): "Upstream Transportation disposal" wastotal of domestic and a part of overseas. In category (3): "Fuel Procurement", a part of data in overseas was estimated. The amount of category (13):"Downstream Leased Assets Operation" was included in category (11).

As evident from the results above, emissions during product use make up approximately 90% of total emissions.
From this, we can see that fuel-e cient products have a signi cant e ect on reducing CO2 emissions.
Komatsu is committed to developing hybrid construction machinery (improving fuel e ciency by 25%) and DANTOTSU products (over
10% improvement in fuel e ciency). In addition to this, we are accelerating the development and implementation of our ICT-based
SMART CONSTRUCTION business.
In addition, the results of our assessments regarding LCA * 1 (Life Cycle Assessment) can be found in the pie chart below.

59

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-«Reference» Pie Chart of Scope1, 2, 3

Promoting Recycling
Development of our “Reman” Remanufacturing BusinessOur “Reman” business involves the remanufacturing of used engines, transmissions, and other key components of construction andmining equipment into “Remanned” components. After con rming that these remanufactured parts are possessed of the same quality
as newly manufactured components, we inject them back into the market. We currently promote the “Reman business at 12 “Reman”
Centers worldwide.
Reman (an abbreviation of remanufacturing) o ers the following advantages to customers:
Quality and performance that matches new components
Lower cost for "remanned" components
Reduced idle time for construction equipment because of adequate inventory of "remanned" components
Resource conservation and waste reduction through reuse and recycling of components
We established PT Komatsu Indonesia (KI) as a global base, which supplies key components for large-size construction machinery andhydraulic cylinders like engines and transmissions. We also established PT Komatsu “Reman” Center Chile (KRCC) in Chile, which
supplies components for electric dump trucks.
Additionally, Komatsu established PT KOMATSU REMANUFACTURING ASIA (KRA) in Indonesia to recycle all components of large-sizeconstruction machinery exclusively for the Indonesian market.
We have also established individual “Reman” centers for countries that are not part of our global supply chains (China, Russia, India
and Brazil, Myanmar etc.).

Reman Factories and Centers map

Reman center in Komatsu Indonesia plant60

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-

Providing Reman-related Information
We have constructed a system called “K-WINS”, which shares technical information about “Reman” through an interconnecting
network (“Reman-Net) of Komatsu “Reman” centers around the world. The data acquired from this system allows us to e ectively
develop our global “Reman” operations.
IC tags and two-dimensional bar codes are used to manage each item's remanufacturing history, and to track quality and durability
information. This important information is reported to the Group, to help develop components with optimal service life.

Future Steps
To further increase the reuse rate of used components, the Komatsu Group is reducing the number of disposed parts by:
Developing parts for remanufacturing, oversized parts, etc
Developing recycling-related technologies (assessment and measurement for reuse, remanufacturing worn-out parts, cleaning, heat
treatment, etc.)
to reduce waste components, and thereby further increase reuse and recycling activities.

Reman Process

61

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-

Changes in Reman Sales (base FY2004 = 100)

Activities to E ectively Utilize Resources in Production
1. Waste
Komatsu promotes activities to reduce waste generation from its production activities while also implementing "zero emission"
activities to recycle and e ectively use the generated waste.
While we sought to reduce the volume of waste by thoroughly implementing sorting and turning waste into valuable commodities,
domestic waste generated per unit of production increased compared with the previous year due to an increase in waste sand disposal
volume at our metal-casting plant, and the temporary generation of waste such as used tires. However, with a recycling rate of 99.7%,
the target value was maintained.
Overseas waste generated per unit of production recorded a 10.4% reduction from FY2010 levels with thorough waste sorting e orts,
and medium-term targets are achieved ahead of schedule.
A recycling rate of 97.3% was recorded, marking two consecutive years during which the 2020 target value was achieved.
From 2019 onwards, we will promote reduction activities primarily at foundries in Japan and overseas to meet new medium-termtargets.
SectorBase FY

Objective FY

Target Value

2010

2020

Over 10%

Reduction of Waste Generated Per
Unit

Domestic

Maintenance and Improvement ofRecycling Rate

Domestic-

MaintainOver 99.5%

Overseas-

2020

Over 95%

Overseas

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-

Waste indicators in production activities
Independent Practitioner's Assurance
Amount of Waste Generated in Japan (Data coverage: Komatsu Ltd. and the Komatsu Group manufacturing facilities in Japan)

Amount of Waste Generated in overseas (Data coverage: The Komatsu Group manufacturing facilities in overseas)

Examples of Waste Reduction Initiatives

Activities to reduce the amount of wood packaging materials for overseas used at the
Kanazawa Plant
The Kanazawa Plant produces body forming presses for automotive manufacturers. The plant mainly transports its goods overseas,
and when shipments weighing as much as several dozen tons are packaged, packaging made from wood materials has conventionallybeen used. To reduce the amount of wood resources used from the perspective of conserving the global environment, the plant is
continually examining the packaging speci cations of all transportation companies and determining whether non-wooden packaging
materials can be applied to the products shipped from plants.
Even for heavy cargo, by shifting the packaging from wooden materials to steel, we have reduced the amount of wood being used.
However, depending on the customer, there are often cases where the use of conventional wood based materials is requested. We
consider possibilities to determine whether even in those cases, packaging speci cations can be met while reducing the use of wood
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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-materials to the minimum. Due to built-to-order items, the shapes of products can vary wildly, but by achieving improvements such as
taking cues from how products are suspended during the manufacturing processes, we were able to development new packaging
speci cations. We will continue to make improvements that give adequate consideration to the global environment.

Reduction in Wood Usage (-1,000kg / case)
Shape

Dimensions (cm)(Kg)

Weight of Packaging Materials (Kg)

L

W

H

Conventional packing

570

280

400

51,0004,000

Improved packing

530

290

350

50,0003,000

Di erence

-40

10

-50

-1,000-1,0002. Water Resources
In FY2016, we set new mid-term targets for water usage in our domestic and overseas manufacturing facilities and launched initiatives
to reduce water consumption.
Domestically, we have managed to reduce water use per unit of manufacturing by 51.3% compared to FY2010 by reducing waste
through the re-use of water within processes and daily management with a focus on sites in the Hokuriku area that use a lot ofgroundwater. In doing so, we have achieved our medium-term target ahead of schedule.
Overseas we also achieved our medium-term target ahead of schedule, managing to reduce water use per unit of manufacturing by
34.7% compared to FY2010 by recycling through the puri cation of process wastewater and by reducing waste.
From FY2019 onwards, we will promote further water usage reduction activities domestically and overseas to meet a new medium-termtarget.
SectorReduction in Water Used Per Unit of
Manufacturing

Domestic
Overseas

Base FY

Target FY

2010

2020

Target Value
40%+

△

10%+

△

64

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Relationship between Business Activities and the Environment -Promoting Recycling-

As a result of the consideration, in 2017 a pure water production system equipped with an ion exchange resin tower that is able toremove the hardness components was installed.
In FY2017 and FY2018, about 3,000m3 of water was supplied through the pure water production system annually, and water usage ofthe overall Osaka Plant was reduced by 3%.

Items not conforming to the required water quality are treated with the pure waterproduction system

Pure Water Production System

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Theme 2 : Developing People

068

Personnel Policy and Performance Appraisal System

074

Diversity Initiatives

079

Enhancing Work-Life Balance083

The KOMATSU Way

086

Employee Training Structure

088

Strengthening Our "Gemba" Capability

091

Brand Management Initiatives

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ESG Databook 2019

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Personnel Policy and Performance Appraisal System

Personnel Policy and Performance Appraisal System
Here at Komatsu, we consider many aspects of our business to be valuable assets. Goods, money, information, and time are all
irreplaceable facets of our day-to-day operations. However, the one resource that stands above all others in terms of value would be
our employees. We are proud to maintain a culture that places our people at the forefront of our priorities, recognizing the importanceof their roles in maintaining the quality of our products and the reputation of our company. Komatsu is thus dedicated to thedevelopment of our workforce, striving to foster an engaging work environment that provides opportunities for creativity andchallenges to stimulate growth, all the while building on a relationship of mutual trust with our employees.

Global Personnel Policy
Komatsu is acutely aware of the di erences pertaining to history and culture for each of the regions within which it operates. We arethus engaged in the creation of a personnel management system that tailors to the unique needs and circumstances of each region,whilst maintaining compliance with a set of basic policies as outlined below:
a. We shall respect each employee's human rights, personality, individuality and legally-protected privacy;b. We shall respect diversity and treat and appraise each and every employee in a fair and impartial manner. We shall notdiscriminate against any employee on the basis of race, ethnicity, color, sex, sexual orientation, gender identity, age,religion, national ancestry, disability, marital status or other legally protected status. We shall vigorously promote equal
opportunities for employment;c. We shall give due consideration to work-life balance and physical/mental health, and endeavor to provide the employeeswith workplaces where they can e ectively accomplish their tasks with satisfaction and pride. We will not tolerate any
kind of harassment, including sexual harassment, violence or other abusive conduct, in or outside the workplace;d. In designing and implementing Komatsu policies on employment conditions (such as wages, fringe bene ts, performanceappraisal, promotions), we shall assure that such policies are, and are understood to be, fairly and clearly implemented.
Such policies shall be accurately communicated to employees and, to the extent practicable, made open and accessible;
e. We shall comply with all applicable laws and regulations governing employees' rights and faithfully accommodate,whenever applicable, conversations or discussions with employees or their representatives;f. We shall not tolerate child labor or forced labor; andg. We shall o er terms and conditions of employment that are su ciently competitive in their respective regions.
*Additional notes on Item b:-We implemented e-learning on LGBT issues for the middle management.
-“Any action violating human rights (sexual harassment or other harassment related to pregnancy, childbirth,parenting and nursing care)” is speci ed as grounds for disciplinary action.

Personnel System that Accurately Recognizes Employee Abilities andAchievements
Komatsu recognizes the importance of providing an engaging workplace environment that recognizes and accurately rewards theachievements of its employees. This allows our people to take pride in the work that they do, motivating them to strive for greater
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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Personnel Policy and Performance Appraisal Systemheights within and without the workplace. To that end, we have incorporated an advanced system of evaluation that disregards age,gender, or nationality while assessing individual performance and abilities in order to provide a framework for fair recompense.

Fair and Appropriate Evaluation
The most important aspect in the creation of a workplace that promotes wellbeing and e ective working is the fair treatment of
employees. As mentioned above, Komatsu's personnel management system accurately evaluates our employees, granting recompense
based solely on merit. This system of assessment is enforced through multiple channels, such as evaluation training for bothmanagement and lower-level employees. An evaluation committee has also been established that works closely with labor unions inorder to con rm that evaluations are fair and appropriately conducted. Finally, Komatsu provides individual feedback on evaluations toemployees at both management and non-management positions, and has set up a consultation o ce through which employees can
express complaints and concerns.

Condition of Labor Unions
Having signed the United Nations Global Compact, Komatsu recognizes that freedom of association and the right to collective
bargaining are intrinsic human rights that must be respected. Our engagements with labor unions thus re ect this commitment,
showcasing our dedication to ensuring the best for our people.
We have a labor contract with the Komatsu Labor Union, which is organized by approximately 10,500 of our employees across 8 of ourJapanese branches and is a member of both the "All Komatsu Workers Union" and the "Japanese Association of Metal, Machinery, andManufacturing Workers". 13 of our consolidated subsidiaries and a liates in Japan have labor contracts with a labor union that has
joined the "All Komatsu Workers Union", making up a total of approximately 6,400 employees.
In addition to this, Komatsu continues to comply with legislation related to labor rights, while responding in an honest and transparent
manner to all dialogues and discussions with individual employees and their representatives.

Creating a vibrant workplace with rewarding jobs
The Komatsu Group regularly conducts an employee awareness survey, seeking to understand how its employees feel about and what
they expect for their jobs, workplaces and company management in order to create vitalized workplaces. The Group aims to o er
workplaces that enable its employees to work more actively by identifying advantages and challenges surrounding Komatsu, which will
be considered when implementing human resource initiatives and employee training programs.

Overview of employee awareness survey in FY2018
Number of
respondents

Employees of Komatsu and its Group companies in Japan, 97.1% responded

Objectives

To understand how the Komatsu Group employees feel about their jobs, workplaces, and supervisors;
analyzing current issues in order to consider measures to implement in the future

Survey overview

94 questions on items including the degree of employee satisfaction with job, o ce environment andpersonnel management system, along with employee awareness of the KOMATSU Way

Methodology

As a general rule, anonymous web survey used (paper-based survey for eld workers)

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Personnel Policy and Performance Appraisal System

DATA* Above data are on the non-consolidated basis except item (2).
Numbers of employees for item (11) are as of April 1 and all other numbers shown are as of the end of the year, except as otherwise noted.

（1）Number of employees (Non-consolidated basis)
FY2016FY2017FY2018

Total

10,371

10,465

11,537

Male

9,203

9,264

10,175

Female

1,168

1,201

1,362

（2）Number of employees (Consolidated basis)
FY2016FY2017FY2018

Consolidated

47,204

59,632

61,908Non-Japanese(consolidated)

29,57740,39742,349（3）Average age
FY2016FY2017FY2018

Total

38.9

39.3

39.6

Male

38.8

39.3

39.7

Female

38.9

38.9

39.3

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Personnel Policy and Performance Appraisal System（4）Years of continuous employment
FY2016FY2017FY2018

Total

14.6

14.1

14.3

Male

14.8

14.4

14.7

Female

12.4

11.8

11.9

（5）Annual total remuneration (average)
FY2016Total

FY2017
7,162,627

FY2018
7,387,475

7,608,424*Minimum wages set by age（6）Number of employees by age
Total

Male

FemaleUnder 30

2,309

1,936

373

30-39

3,675

3,402

273

40-49

3,079

2,679

400

50-59

2,474

2,158

316

Total

11,537

10,175

1,362

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Environmental
Performance
Data

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleGRISTANDARDS
INDEX

Personnel Policy and Performance Appraisal System（7）New graduates employment
College graduate
Year(April)Junior college graduate

Total

Male

Female

Total

Male

2017

166

137

29

18

14

2018

187

163

24

26

2019

195

169

26

25

High-school graduate

Female

Total

Male

Female

4

72

43

29

17

9

96

68

28

22

3

132

99

33

（8）Mid-career employment
College
male

Total

Collegefemale

Other
male

Other
femaleApril 2016March 2017

24

5

11

4

4

April 2017March 2018

44

25

12

4

3

April 2018March 2019

140

55

15

59

11

（9）Employee turnover (April 2018-March 2019)
Total
Number of employee
turnover

Male
105

Female82

72

23

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Personnel Policy and Performance Appraisal System（10）Retention of new employees
MaleFemaleNew employees (April 2016)

187

47

Enrollment (April 2019)

181

43

Turnover rate: 4.3%; 6 males, 4 females（11）Diversity of management
Male

FemaleFemale Parcentage

Foreign employees

Management position

1,661

126

7.1%

10

General managers

388

10

2.5%

0

Directors and o cers

49

3

5.8%

5

Executive o cers

46

2

4.2%

5

Managers, directors
and o cers

1,710

129

7.0%

10

73

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Diversity Initiatives

74

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Diversity Initiatives

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Diversity Initiatives

System and Status in FY2018
In March 2019, we held a Diversity & Inclusion Development Seminar for female mangers
of Komatsu and its overseas subsidiaries, in which 15 employees from 12 countries
participated. In this seminar, those that participated deepened their understanding of thehistory of Komatsu, the KOMATSU Way and management strategies. We expect them to be
the leaders of promotion of diversity initiatives in respective companies.
Also in Japan, as a measure to nurture female employees, we have held a career plan
training in which participants think about their future and their work styles. The CDP(Career Development Program), in which female employees formulate their mid to longterm career plans discussing with their supervisors has also been implemented since2015. Starting from 2016 onward, networking/training workshops for female employees
have been held jointly with other companies in the same manufacturing industry.
We believe that measures to promote the active participation of female employees andthose with time and physical constraints will lead to the development of a system and thecreation of an environment in which every employee can work comfortably with their fullpotential, and thus we continue promoting these measures across the Komatsu Group.
Scene of DIDS training

DATA
FY2017FY2018FY2019Number (ratio) of women
employed

1,281(12.0％)

1,321（12.2%)

1,463（12.3%)

Number (ratio) of women in
management positions

94(5.5％)109(6.2%)

129(7.0%)

Number (ratio) of women in
executive positions2(4.2％)

2(4.3%)

2(4.2%)

Number (ratio) of women
hired

29(17.5％)24(12.8%)26(13.3%)* Data for Komatsu Ltd. (non-consolidated). The numbers and rates are for newly hired university graduates. Data as of April 1.

Support for balancing childcare, nursing care and medical treatment
with work
Flexible work styles are spreading, where employees who are involved in childcare or
nursing care can telecommute or take advantage of a short-time work system. As part ofits e orts to support the balancing of childcare and work, the KOMATSU Way Global
Institute, in-house training center in Komatsu, Ishikawa Prefecture, provides a day-care
center service and since 2016, we have been hosting a networking event on the 19th every
month cooperating with labor unions as a place for communication among employees
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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Diversity Initiatives

who are involved in childcare. In addition, at the headquarters, we invited employees’
children for a Work Site Tour which provided work-experience opportunities.
With respect to nursing care, we hold seminars conducted by experts, providing
opportunities for employees to develop their mental attitudes toward nursing care andthink about balancing it with work. Since 2018, we hold monthly consultations for each
employee with an expert from outside the company, providing support in line with thesituation of each employee, and we also publish a Nursing Care Column via our in-houseportal site, taking measures to help employees to comprehend information related tonursing care and its support systems.
Moreover, from the standpoint of health and safety, a consultation service is set at eacho ce in which employees can seek consultation on balancing medical treatment withwork and developing a work environment where employees who need treatment canwork with safety and security.

The day-care center at the KOMATSU Way Global
Institute

Employing Persons with Disabilities
Approach and Goals

Komatsu actively seeks to employ persons with disabilities across the Group. Our goal is to achieve the employment ratio of 2.5% on aconsolidated basis by 2021 for the Group in Japan (the current statutory employment ratio is 2.2%).
In March 2008, Komatsu established the Business Creation Center (BCC) within the Human Resources Department in Japan as a
dedicated organizational entity for promoting the hiring of persons with disabilities. Persons with mental or developmental disabilities
are employed by the BCC in eleven business units in Japan. Advisors are assigned to each business unit to provide training and advice
on daily tasks. Each BCC sta member meets with an advisor every six months to discuss goals, instead of simply handling a delimited
set of tasks. Linking salary to individual performance assessments, we encourage employees with disabilities to work on their goals
toward achieving independence and self-reliance. Through these e orts Komatsu is not merely focused on achieving a targeted
employment ratio. Rather, it is seeking to create a workplace that provides a sense of ful llment for all individuals, where employeeswith disabilities work alongside other sta members.

Status in FY2019
As of April 2019, the employment ratio of persons with disabilities is 2.55% (non-consolidated basis). With regards to BCC, there are 125
people working at 11 business units. With the expansion of its organization, BCC has taken on matters that had previously been
outsourced, as well as tasks that had been taking up time and e ort internally, thereby contributing to e ciency and cost cutting forthe company as a whole.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleEnvironmental
Performance
Data

GRI
STANDARDSINDEX

Diversity Initiatives

DATA
FY2017FY2018FY2019

Employment ratio of persons
with disabilities

2.68％

2.50％

2.55%

Number of BCC locations

10

10

11

Number of BCC sta
members

103

101

125

* Data for Komatsu Ltd. (non-consolidated). As of April 1st.

Promoting Hiring of Retired Employees
Approach and Goals

As the aging of Japanese society accelerates, Komatsu is committed to maintaining its e orts to hire more elderly workers.
Komatsu(non-consolidated) introduced a re-employment program in 2006 and revised this system from April 2013 so that as a generalrule all those who desire to do so can work until the age of 65. We also established a Second Career Support Program for employees
who desire to play an active part outside the group, and provide training opportunities, paid leave and monetary aid.

DATA
FY2016FY2017FY2018

Number of retired employees

211

184

185

Number of retired employees who were rehiredby Group companies

173

146

155

LGBT Compatibility
Concept and system

In "KOMATSU'S WORLDWIDE CODE OF BUSINESS CONDUCT" October 2017 revision, we stipulated the prohibition of unfair
discrimination against sexual minorities (not only nationality, race, religion, age, sex, presence or absence of disability, but also sexual
orientation and gender identity) as sexual harassment including discriminatory remarks subject to disciplinary action. In addition to
implementing a number of initiatives, such as setting up an in-house counseling desk for LGBT individuals, the certi cation of same-sex
partnership and expansion of scope of welfare bene ts, we also worked to promote understanding of LGBT to all employees through anumber of approaches like e-learning.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure

Enhancing Work-Life Balance
Past Endeavors and Status in FY2018
The maintenance of a healthy work-life balance is an integral component in bringing the best out of our employees. Studies haveshown that individuals who are able to nurture a ful lling personal life alongside their work commitments are both more motivatedand driven, while being able to draw out the full potential of their abilities. With this understanding in mind, Komatsu is working to
reduce the total number of required working hours for our personnel by setting up a number of work-life balance systems to improve
workplace sustainability.
We are currently engaged in co-operative undertakings with labor unions in order to formulate speci c quanti able targets to reduce
the total number of working hours for our employees. We establish commendable goals of less than 2,100 working hours per year,
along with the provision of an average of at least 18 days of paid leave per year for each employee. In addition, based on compliancewith the Article 36 Agreement or agreement on overtime, we are working to realize an e cient way of working. As of FY2018, we havestarted an “interval system” that enforces a minimum of 10 hours of rest following long periods of work in order to promote a “safe andhealthy” manner of working.
In addition, we consider the arrangement of systems for child-care leave and short working hours to be a requisite in creating asustainable work environment. Our e orts to promote work-life balance in the workplace have not gone unnoticed, and in 2007, wewere certi ed by the Japan Ministry of Health, Labour, and Welfare with the "Kurumin" symbol. This prestigious accolade marks us as acompany that supports the development of the next generation, and has encouraged us to bolster our already signi cantcommitments.
In addition to child-care leave and the reduction of working hours, we launched the "Panel on Fostering Future Generations", as well as
the "Research Group on Solutions against Low Birthrate and Longevity". We have also continued to work on improving the reach andextent of our child-care support systems by extending periods of child-care leave (to a maximum of three years) in 2011. In 2018, we
further expanded the system by establishing a leave system that caters to spousal relocation.
Our personnel evaluation systems continue to be improved upon, and we now o er options such as temporary part-time work for
employees raising children and personal goal-setting in accordance to employee working conditions. In doing so, we provide realistic
motivation for employees, ensuring the continuance of their careers alongside the raising of their children.
Komatsu is also committed to providing aid to employees who are providing nursing care for their family members. In 2013, we
introduced an allowance for employees on family-care leave as a means of nancial support, and in 2014, we rolled out a hometeleworking option for employees who are required to stay home in order to take care of children/other family members. With thesesystems and initiatives, we will further enforce our initiatives to balance work with home life of each employee.

DATA

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure

DATA* Information on this page is non-consolidated with the exception of certain programs, which encompass not only Komatsu Ltd. but also our subsidiaries
in Japan.

Main Programs and Measures Designed to Enhance Work-Life Balance
Programs and Measures

Child-care support

Content

Child-care leave
programAvailable for a maximum of three years from the birth of the child to the time
the child enters nursery school. Also available for a maximum of three years
for children up to the third grade of elementary school in cases where a
spouse is transferred, etc.

Part-time work

Shortening of working hours by a maximum of three hours per day to allow
for care of children up to the third grade of elementary school

Telework program

Option to work at home in order to care for children up to the third grade ofelementary school

Allowance toward the Allowance toward the cost of childcare for infants up to age two before
cost of using child-care entering nursery school (10,000 yen/month)services

Family-care support

Other types of leave

Child-care leave

Five days for nursing care of one child up to the third grade of elementary
school, and ten days for the second child onward (paid leave)
Allowance granted to cover the cost of using child-care services

Family-care leave
program

A maximum of three years available for employees taking care of family
members (possible to take in installments)

Part-time work

Shortening of working hours by a maximum of three hours per day (possible
to take in installments)

Telework program

Option to work at home for a maximum of three years in order to provide carefor family members

Family-care leave

Five days per year for attending to one family member in need of nursing care,and ten days for the second family member onward (paid leave)

Life support leave

Can be used as sick leave, pregnancy leave, child-care leave or for care offamily members. An employee may add ve new days of accumulated leave
per year. A maximum of 40 days of unused annual leave may be accumulated.
Child-care leave may be used for school events for children aged up to third
grade in junior high school

Flexible leave forrefreshment

Provided to encourage employees to take ve consecutive days of leave formental and physical refreshment
Employees receive an additional ve days of annual leave and a travel
voucher upon completion of their 15th, 25th and 35th year of continued
serviceVolunteer incentive
programLong-term paid leave of up to two years, or short-term paid leave of 12 days
per year

Spousal transfer
occupational leavesystemAcquisition for up to three years per spousal transfer (Acquisition up to one
per employee)80

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure

Flexible Working Style
Flexible working hours (core time; 11:00 am-2:45 pm)
Part-time work (child and other family-care)Half-day paid leave
Maximum of ve consecutive days of paid leave for refreshment
System and facility for supporting child-care (nursery payment and use of in-house nursery)
Discretionary work system (employees in development, design and R&D section)
Telework program

Various Incentive Programs
Subsidizing the expense of taking a certi cation course
Job posting system
Studying in domestic college or study abroad program
Employee awards program for distinguished achievement
In-house language school and subsidizing the expense
Stock option (directors, o cers and some executives)

Work-Life Balance Data
Parental leave

FY2016FY2017FY2018Pregnancy leaves

57

59

63

Child-care leaves (total)

98

120

137

Child-care leaves(paternal leave)

10

15

23

Child-care leaves(within one week leave)

1

0

1

100％

97.5％

98.6%

Return and retention rates

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CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure

Family-care leave
FY2016
Family-care leaves

FY20174FY2018
4

7

Paid vacation
FY2016FY2017FY2018Days granted

20.0

20.0

20.0

Days taken

19.2

19.4

19.5

Ratio

95.8%

96.8%

97.5％

Volunteer Time O (VTO)FY2016FY2017FY2018

Number of VTO users

95

71

92

VTO in long-term

0

0

0

82

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

The KOMATSU Way

The KOMATSU Way
Approach of The KOMATSU Way
The KOMATSU Way is a statement of values and standards that all workers at every level of the Komatsu Group are expected to meetand uphold. The KOMATSU Way is a written statement of our corporate strengths, beliefs that support those strengths, the basic
attitude of mind and perspective, and a manner of action (style), which our predecessors created based on the founder’s spirit,
throughout the history of our growth and development. We aim to spread this knowledge to all employees and maintain it into the
future.

System and Status in FY2018
The KOMATSU Way nds its roots in the corporate strengths that Komatsu has cultivated over time, culminating in a system of integrity
and strength that is disseminated to group companies on a global scale. This propagation is achieved through the KOMATSU Way
Global Institute, which conducts various publication and human resource development activities.
Employee understanding of the KOMATSU Way is deepened via training sessions and the creation of opportunities for exposition andgroup debates. We foster interpersonal communication between employees at such sessions to minimize generational gaps, allowing
for a more e ective "trickle-down" spread of this knowledge. We have also considered the intrinsic di erences of foreign cultures, andhave worked to craft the KOMATSU Way in a manner that is both easy to understand and relevant for the international community atlarge. This allows us to promote the KOMATSU Way in domestic and foreign settings, allowing for uniformity across the group.
In 2018, we created the third edition of the KOMATSU Way. We improved the contents so values and ways of thinking become easier tounderstand, increasing the number of overseas case studies and adding expository writing detailing Komatsu's approach, in light of theincreased ratio of workers overseas and the change of Komatsu’s business environment.
In FY2018, training on the KOMATSU Way and Total Quality Management (TQM) was held in Brazil and Thailand for the rst time, and in
Chile, our strategic market. Because of the integration of KMC (Komatsu Mining Corp.) in FY2017, the number of employees overseas
increased further and the need for Komatsu employees to understand more about Komatsu's thinking has increased. Therefore, we
continue overseas training to globally establish the KOMATSU Way and TQM. We believe that through these activities, we will be able tofoster employees who practice the KOMATSU Way and pass it on to the next generation, leading to the sustainable growth of the entire
Komatsu Group.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

The KOMATSU Way

DATA

Educational Training that pertains to KOMATSU WayName of Training
CourseCourse participants

Targets

Education for top
management
personnel of overseas
subsidiaries(Global Management
Seminar)Overseas subsidiaries'
management level
personnel orcandidates

To train managers at
our overseas
subsidiaries who havecomprehensive
understanding of the
KOMATSU Way

September 2018
(Japan)12 people

Education for midlevel managers ofoverseas subsidiaries(KOMATSU Way
Leadership
Development
Program)Mid-level managers ofoverseas subsidiaries
expected to be
responsible for thecore
business/functions

To train up local
leaders who
understand andpractice the KOMATSU
Way

June 2018 (Chile)
June 2018 (Brazil)
December 2018
(Thailand)

34 people (Chile)
31 people (Brazil)
28 people (Thailand)

KOMATSU Way Expert
Development Program

Mid-level managers ofoverseas subsidiaries
with aptitude

To train up'evangelists'
responsible for
spreading the
KOMATSU Way in ouroverseas subsidiaries

June 2018 (Brazil)
December 2018
(Thailand)

23 people (Brazil)
11 people (Thailand)

TQM instructor
training

Mid-level managers ofoverseas subsidiaries
with aptitude

To promote
understanding of QC
at overseas
subsidiaries

June 2018 (Brazil)
December 2018
(Thailand)

29 people (Brazil)
20 people (Thailand)Training by Job Level

New employees,
assistant managers,
newly appointed
managers, etc.

To promote theunderstanding andpractice of the
KOMATSU Way

Year round

1,528 people

Selected from theKomatsu Group in
Japan and overseas

To present
improvement
activities as OJT andstrengthen awarenessof the KOMATSU Way
practices

November 2018
(Oyama Plant)

About 1,200 people

All Komatsu QC
Convention

84

Training dates

Number ofparticipants/cases

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

The KOMATSU Way

The KOMATSU Way-History of Dissemination Activities

85

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure

Employee Training Structure
Approach and Goals
Komatsu strives for the sustainable growth of both the company and employees through human resource development. We believethat each employee is responsible for the setting of high individual goals, and the subsequent ful llment of these goals. Each employee
should thus be self-reliant and highly motivated in seeking the knowledge and skills necessary for the ful llment of personal
objectives, while relying on company support through our educational programs. Komatsu supports the career development of each
employee focusing on the education required to company management and employees.
While we promote the education of professionals in a wide variety of pro ciencies, Komatsu is aware of the importance for the
dissemination of knowledge and skills at every level within the company. Regular explanatory sessions and discussions are convened
at Group companies to propagate the KOMATSU way, ensuring that it is incorporated as an integral component of our human resource
development on a group-wide scale.

System and Status in FY2018
Employee Training Structure

A Case of Employee Training: Manager Refreshment Training
Since 2017, Komatsu has been conducting a speci c training program for manager-level personnel, activating a 360 degree
feedback system which requires evaluations from each participant's supervisors, colleagues and other team members. Through thesystem, we aim to promote improvement of communication at the workplace, encouraging all the participants in the training torecognize the gaps in perceptions with others.
All manager-level personnel in Japan are eligible to attend the program. A total of 1,841 managers attended the training program so far
with an attendance rate of over 50%.
The program contributes to preventing abuse of authority and sexual harassment at work from happening by having senior employees
realize that they are apt to have an inter-generational perception gap with employees, especially the younger generations. Managers
who attended the program commented like, “It was a good chance for me to realize how I am perceived by others,” “The program86

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Employee Training Structure87

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXStrengthening Our "Gemba" Capability

88

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleSocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXStrengthening Our "Gemba" Capability.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXStrengthening Our "Gemba" Capability[Overview of Dubai Training & Demonstration Center]
Name

Dubai Training & Demonstration Center

Address

S21313 JAFZA South, Jebel Al Free zone, Dubai, UAE

Grounds area

17,000m2

Main facilities

Workshops, machine demonstration and operation area, actual products,
classrooms, observation room, etc.

Investment

JPY 1.4 billion

Number of employees

11 persons* Note: Dubai Training & Demonstration Center is a liated with Komatsu Middle East FZE, a Komatsu subsidiary in UAE.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Brand Management Initiatives

Brand Management Initiatives
What are Brand Management Initiatives?

Becoming Invaluable to Our Customers, who Both Create and Assess Our Corporate Value
Komatsu embodies this concept in our statement "our corporate value is the total sum of trust given to us by society and all
stakeholders." With this in mind, Komatsu's basic management policy is focused on increasing our corporate value through customer
engagement initiatives. Having grouped our various stakeholders into two distinct categories, while the former is responsible for
employees, a liate companies, sales / service shops, etc., the latter includes society, shareholders, investors, media, etc. We havecome to the conclusion that it is only our customers who take on both of these roles. Customers create corporate value by purchasing
our products, and assess our corporate value through the use and evaluation of our products (which returns to us via feedback). We
have thus rede ned the meaning of "heightening the trust placed in us from our customers", into a commitment to "increase the trust
placed in us to a degree at which our company is indispensable to our customers, in order to guarantee complete customer loyalty andretention". As of FY2007, we have begun initiatives designed to mold our brand into one that conceptualizes this vision.

Realizing Our Customers' Vision and Mission "from the Customer's Perspective"
Our brand management (BM) activities are built on the fundamental principle of "from the customer's perspective". One of the mostcommon misconceptions regarding marketing activities is that such initiatives involve nding means to di erentiate a product from thecompetition, or about nding a unique position within the market. Komatsu believes, however, that the crux of marketing involves
working from the customer's perspective, discovering what customers want and responding speci cally to those needs.
To realize this grand vision, we are engaged in activities designed to create sustained development and re nement in our management
resources and capabilities. In the past, these initiatives tended to rely on experience and intuition, but in the context of Komatsu's BM
activities, we have replaced them with a variety of tools and methods designed to develop case studies and accumulate validated
experience that can be disseminated to a new generation of employees.
Through discussions over time with our clients, we clarify their Vision (the ultimate future ideal state),Mission(Requirements that mustbe achieved in realizing the Vision), and Goals(speci c items that need to be accomplished). Once we have a good grasp of what ourcustomers are looking for, Komatsu implements a plan that utilizes our management resources and abilities e ciently to achieve said
goals. Ultimately, we believe that strong determination is the key aspect in governing the implementation and subsequent success of
our BM initiatives.
This chart serves as a summary for the ow of processes involved

91

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Brand Management Initiatives

Figure 1: Customer relationship chart

In addition, as a way to con rm the results of our activities, we have developed an evaluation tool (Figure 2) that evaluates therelationship between customers and Komatsu, separating them into seven di erent categories. These seven categories range from "nouse for us (Level 1)" to "Komatsu is indispensable for us (Level 7)". As a company, we strive to create good relationships with ourcustomers and are thus using this tool to provide a clear indicator of what we must do to climb towards a higher level of satisfaction.
With that said, we are aware that the levels on this chart make use of self-evaluations based on the subject matter provided by local
agents, and thus take that fact into consideration when evaluating the rise and fall of relationship levels with individual customers. We
continue to improve on our customer relationships while carrying our daily BM activities, so that Komatsu will become an
indispensable partner of customers' continuous choice.

Figure 2: Relationship level model92

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Brand Management Initiatives

Recent Activities and Future Plans
When we began in FY2007, the scope of our activities was limited to Japan, North
America, Chile, South Africa and Australia. By FY2013, we had expanded these activities toinclude China, Southeast Asia, Europe, Brazil, Oman, the Commonwealth of Independent
States, and the forestry business. In FY2011, we o cially declared our approach as the
KOMATSU Way of relating to customers, compiling the "KOMATSU Way of Brand
Management."
In FY2017 (more than 10 years since the start of our initiatives), we developed a customer
needs strati cation sheet to further deepen our insight into "customer perspectives".
Through this useful tool, we have become able to review customer needs in a clear,hierarchical format, enabling us to perceive what customers wish to achieve. We also hold Europe BM Workshop (Brussels, June 2018)
workshops on a global scale, focusing on the theme of customer needs.
Brand management activities that began with a focus on stakeholders by our marketing
department have expanded into company-wide activities that involve our production anddevelopment divisions. Owing to the positive strengthening e ects it has on our various
departments and human resource development circles, Komatsu will continue topromote brand management activities for the foreseeable future.

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Theme 3 : Growing with Society

095

Communication with Stakeholders

099

Compliance

103

Risk Management107

CSR Initiatives in the Supply Chain:
Support for CSR Initiatives of Business Partners

120

CSR Procurement Guidelines

122

Environmental Risk Management

131

Environmental Activities in the Product Life Cycle(Upper and Lower Stage)

134

Biodiversity

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Communication with Stakeholders

Communication with Stakeholders
Communication with Shareholders
Operating within our commitment to high managerial transparency, Komatsu discloses information in a proper and timely manner
through interactive dialogue and constructive approaches to investor relations on a global scale.

1. Activities for Corporate Investors and Securities Analysts
On the same day that quarterly business results are announced, the company holds explanatory sessions for corporate investors andsecurities analysts (we also release this information on our website). Corporate representatives visit institutional investors outside
Japan (primarily in the U.S. and Europe) to explain recent business performance statistics and other critical information.

2. Informational Meeting for Individual Shareholders
To create the opportunity to communicate with individual shareholders, Komatsu convenes shareholders' meetings in major cities inJapan twice a year, with top management explaining the company's performance statistics and management strategies. In 2018, we
held meetings in Nagoya City and Hiroshima City in December, during which the president and CEO provided insight into the businessenvironment and corporate performance data. Many questions were raised during the Q&A session, which covered a wide range of
topics such as mining, machinery business, environmental response, and corporate governance.
Since launching in 1997, our shareholder meetings have been convened 47 times, with about 15,700 shareholders participating in
attendance to date.

Shareholders' meeting held in Nagoya City

Shareholders' meeting held in Hiroshima City

3. Plant Tours for Individual Shareholders
Komatsu holds plant tours for individual shareholders to further deepen their understanding of the company. Tours were held at the
Osaka Plant (Osaka), and Awazu Plant (Ishikawa) in October 2018 , then Osaka Plant (Osaka), Ibaraki Plant (Ibaraki), Oyama Plant andTochigi Plant (Tochigi) in February - March 2019 for ten days in total.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Communication with Stakeholders

Plant tour for shareholders at Oyama Plant andTochigi Plant

Plant tour for shareholders at Osaka Plant

Plant tour for shareholders at Ibaraki Plant

4. Meetings for Individual Investors
Komatsu holds meetings for individual investors to explain our business andmanagement strategies as well as to cultivate a deeper understanding of our company. In
FY2018, these meetings were held in 9 cities in Japan.

Meetings for individual investors

DATA

Events for Shareholders in FY2018 (in Japan)
Location

Approximate Number of Participants

Shareholders' Meeting

Nagoya, Hiroshima

1,069

Plant Tours for Shareholders

Awazu Plant, Ibaraki Plant, Osaka Plant,
Oyama and Tochigi Plant, etc.

352

Meetings for Individual Investors

9 cities in Japan

422

Communication with Employees
Within Komatsu, the president convenes a “Meeting with the President” periodically at each business site in Japan. At these meetings,
the president directly explains the business environment and related issues, and also takes part in a Q&A session held for employees
and upper management. The content of these meetings, held at the head o ce in Tokyo, is simultaneously transmitted by TV broadcast
to other business units in Japan and later published on the company intranet in English to share the information with Group employees
around the world.
We are currently proactively engaged in holding employee meetings at our overseas subsidiaries in order to provide a place forcommunication to take place with local Group employees.
In addition to these measures, we launched an intranet bulletin board, entitled “Virtual O ce of President,” in January 2014 to sharethe questions and answers exchanged during the meeting with the president with employees around the world. The site is updated

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Communication with Stakeholders

each week with new questions, and as of March 31, 2019, a cumulative total of 251 questions on speci c topics, along with thepresident's answers, explanations and messages to employees, have been published in Japanese and English.

“Virtual O ce of President” on the intranet

Employee meeting held at the head o ce

Communicating with the Local Community (E orts in Japan)
We regularly open our plants to the public and hold various events during “Plant Fairs” to cultivate an understanding of our businessamong local residents. The events were held at eight plants in FY2018 and were attended by about 67,000 people.
The Awazu Plant held a variety of special events to celebrate its 80th anniversary. Visitors who brought a plastic bottle cap worked on
cap art to make an art piece of a bulldozer with 10,000 caps, and guests such as the Komatsu City’s Deputy Mayor carried out
commemorative tree planting amongst others, allowing for a lively and celebratory event.
Date

Plant

Number of Visitors (approx.)

May 19

Oyama and Tochigi Plant

12,000

May 20Awazu Plant

15,000

May 27

Ibaraki Plant

11,000July 14

Kanazawa Plant

8,000

September 22

Koriyama Plant

4,000

October 28

Shonan Plant

7,000

November 11

Osaka Plant

10,000Awazu Plant

Ibaraki Plant

Oyama and Tochigi Plant

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Communication with Stakeholders

Kanazawa Plant

Koriyama Plant

Shonan Plant

Osaka Plant

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Compliance99

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Compliance

Process for Compliance Activities
1. Formulate the Code:
Formulate the Code and the Five Principles of Compliance as a foundation for compliance activities and revise the Code (currently
in its tenth edition) as required to re ect social change.
2. Implement the Code:
Implement the Code through education that corresponds to employee rank and their respective duties, and by communicating
information in accordance with the Code.
3. Determine the current status:
Determine whether we comply with rules of business society by having all business units regularly report on their use of the Code,
implementing compliance and risk audits, conducting "visualization survey" of potential risks and enhancing Komatsu's internalreporting system.
4. Address inadequacies:
Any issues identi ed during the above activities or otherwise will be addressed in accordance with the Code and be recti edthrough implemented preventive measures.

Upholding Thorough Compliance
So that employees remain acutely aware of compliance all the time, the Group is working to cultivate their consciousness of best
business practices by displaying business unit posters in every Komatsu Group listing The Five Principles of Compliance (a condensed
version of Komatsu's Code of Worldwide Business Conduct). As for employee education, we have been expanding global e-learningsince the 10th edition of Komatsu's Code of Worldwide Business Conduct to help employees across all operations understand the Code.
Also, compliance training in the form of group education is being conducted according to the levels of managers and generalemployees. In addition, we are expanding business-speci c compliance training, and individual training in response to requests fromdepartments. Furthermore, as training for risks for overseas operations, education on anti-corruption, antitrust laws, export control
and more is provided to prospective employees to be based abroad.
We have established a "Compliance Portal" on our intranet to ensure wide-spread awareness. The monthly magazine "Everybody’sCompliance" provides explanations of important laws, lessons learned from other companies, and articles on human rights,
harassment prevention and tra c rules for general business-related practices. Articles on anti-corruption, antitrust laws, and export
control have been repeatedly published as particularly important elds.
The Group strives to detect risks early and implement reforms at Komatsu business units and Group companies through monitoring
during nancial audits and compliance and risk audits. The monitoring covers compliance in highly important areas such as safety andenvironmental practices.

Internal Reporting System
Komatsu has established the "Compliance Hotline" consultation o ce both internally and externally at the Komatsu Group companies
to respond to consultations or reporting from Group company employees that pertain to rules of business society aiming for prompt
detection and correction of those problems. The Group actively encourages consultations and reporting through Komatsu's Worldwide
Code of Business Conduct, the Five Principles of Compliance, and Group companies' workplace rules, making it clear that employees
who use the system for appropriate reporting will not be treated unfairly in any way as a result of their action.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Compliance

Status in FY2018
No incidents of note occurred during 2018.

DATA

1. Number of Internal Reports
FY2016
Number of Internal Reports(number of serious cases)

FY201795 (0)FY2018105 (0)134 (0)2. About Komatsu's Worldwide Code of Business Conduct
Established

January 1, 1998

Last revised

October 1, 2017 (10th edition)

Languages

20 languages
Japanese, English, Chinese, Spanish, Portuguese, German, Dutch, Italian, Polish, French,
Swedish, Finnish, Indonesian, Thai, Russian, Turkish, Persian, Tamil Taiwanese, Korean

3. Compliance Education in FY2018
Global e-learning

Approx. 30,000 people<Group training (mainly Japan)>Level-based training
Individual training by request

Approx. 1,700 people
Approx. 700 people

4. Compliance violation in FY2018
No compliance violation had a signi cant impact on the management of the company.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Compliance

5. With regards to anti-corruption
Number of employees who weredismissed because of con ict with
Komatsu's anti-corruption policy(global)Fiscal Year 2018: ZeroFines imposed on Komatsu related
to corruption / Amount of penalties(global)Fiscal Year 2018: ZeroFiscal year 2018: 12 times
Target audience: Approximately 100 (planned to be transferred overseas)

Number of employee training
sessions on anti-corruption
prevention (in Japan)

Establishment of internal reporting
system related to corruption(global)Prevention of corruption is speci ed in "Komatsu's Worldwide Code of Business Conduct"as a key priority issue. If there is any suspicion or concern involving corruption or theviolation of business society rules, concerned parties are invited to use the Compliance
Hotlines established at the Komatsu Head O ce or within each region to report the
problem.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Risk Management

Risk Management
The Komatsu Group recognizes all uncertainties that could threaten the Group's sustainable growth as major risks, particularlycompliance issues, environmental issues, product quality concerns, hazardous accidents, information security problems andelimination of anti-social forces. The company has adopted the following measures to counter these risks.

Basic Principles and Structure for Risk Management
Risk Management Structure
In addition to the basic policy for risk management to ensurebusiness continuity and stable development, Komatsu has
established Risk Management Rules to correctly recognize andmanage risks.
Komatsu has established a Risk Management Committee todevise relevant policies for the entire Group, review the risk
management system, and evaluate and improve upon response
measures in place for each risk, as well as to take control of risks
when they arise. The committee regularly reports on its
deliberations and activities to the board of directors.
Komatsu will establish an emergency headquarters whenserious risks occur and implement appropriate measures tominimize damage.

Speci c initiatives

Improvement of risk management system including the Group companies
We are developing risk reporting lines, preparing related manuals and making other e orts to further improve the risk management
system of the entire Group, including overseas subsidiaries. In connection with a business continuity plan (BCP), each o ce in Japan
carries out initial response training to raise the level of risk management and response to disasters. We are also strengthening the
emergency communication functions of the entire Group by developing tools such as the safety con rmation system and broad-area
wireless devices, and conducting periodical training programs for the reporting of safety and telecommunications.

Establishing a business continuity plan (BCP) and providing training
Komatsu has established a BCP to promptly check the safety of its employees and their families and to continue or quickly restore
important operations when a disaster or accident strikes. The head o ce building and factories conduct periodical training to facilitate
appropriate actions taken in an actual disaster by role-playing the occurrence of a large earthquake. In addition, the factories increase
the seismic capacity of their buildings and facilities and take measures against torrential rains based on their respective plans.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Risk Management

BCP training at Oyama Plant

BCP training at Awazu Plant

Conducting Compliance and Risk Audits
As a part of its risk management activities, Komatsu has been conducting compliance and risk audits (CR audits) since FY2008. These
cover areas are not included in the J-SOX audits, which are conducted in accordance with the Financial Instruments and Exchange Act
of Japan to evaluate internal controls related to nancial reporting and identify potential compliance risks within the company, with aparticular focus on con rming and evaluating the status of legal compliance. Our internal specialist team conducts the internal audits
at Komatsu and its Japanese/overseas a liates, as well as independently-owned distributors and Midori-kai member companies.
The audited items are: 1. Field instructor ;2. Safety; 3. Environment; 4. Labor; 5. Finance and Treasury; 6. Audit of sales o ce basebusiness operation;7. Quality Assurance and Recall; 8. Vehicle Inspections and Speci c Voluntary Inspections (inspections done on
construction equipment, similar to car inspections); 9. Export Control; 10. Information Security; 11. the Anti-monopoly Act; 12. theSubcontract Act; and 13. Overseas Representative O ces.
Through these audits, we strive to raise the control and compliance awareness levels at each company and in every department. Goingforward, we would like to improve our case-by-case audit method and raise the operational level of CR audits as a part of risk
management functions.

Strengthening Information Security
Komatsu is developing an information security structure for the entire Group, placing theInformation Security Committee at its center. As part of this structure, we distribute an Information
Security Guidebook to all employees, based on which we provide education and awareness-raising
activities, with the belief that raising the awareness of individual employees is essential for
information security. We provide employees of the Group companies who use PCs with basic
education on information security through e-learning and training for responding to targeted attack
e-mails that uses fraudulent messages.
Additionally, we provide our executives with separate e-learning sessions to raise the Group
companies’ awareness of security measures. Moreover, we develop a system defense structure toprotect information from being falsi ed, destroyed, leaked, lost, etc. due to negligence or outside
intrusion. We also conduct information security audits to ensure that these measures are working
e ectively and to detect and address any problems.

Human Right Management Issues
Komatsu signed the United Nations Global Compact in 2008. In an e ort to apply its major principles for protecting human rights,
Komatsu utilized the help of external experts (BSR, or Business for Social Responsibility) to conduct a human rights risk assessment for
all of its construction/mining equipment and forestry machinery businesses worldwide in 2014 and once again in 2017, taking guidancefrom the Universal Declaration of Human Rights and the U.N. Guiding Principles on Business and Human Rights.
The human rights risk might not be removed depending on the business, area and contractors, so we will respond exibly as needed.
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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Risk Management

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Risk Management

Employee Education (Information Security)
Name of Course

TargetNew Employee Training

New employees (both new graduates andexperienced hires)e-learning Information Security (Basic Course)

All employees who use PCs at worke-learning Information Security (Management Course)

All managers (line managers such as GMs andsection mangers)

Training for responding to targeted attack e-mails

All employees who use PCs to perform duties

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

CSR Initiatives in the Supply Chain:
Support for CSR Initiatives of Business Partners
Our business partners are important members of our value chain, who supply the materials, parts and components necessary for thecontinued operation of our manufacturing enterprise. At Komatsu, we aim to build a Win-Win relationship with our business partners
by making interactive e orts under a relationship of mutual trust. Along with the expansion of our global operation, our supply chain
has also been expanding all over the world. Taking seriously the recent gain of momentum for the spread of CSR in the overall supply
chain, we are working to realize CSR procurement globally by being proactive in providing intense support for the CSR initiatives of ourbusiness partners.

Approach and Policy

1. Komatsu's Procurement Policy and Procurement Status
As stated above, Komatsu's procurement policy is based on the philosophy of aiming to build a Win-Win relationship with our business
partners, who are on an equal footing with us, encouraging each other. The policy is to promote daily procurement activities taking CSR
aspects into consideration, by evaluating and selecting suppliers in a fair and equitable manner from the viewpoint of SLQDC (Safety,
compliance with the Law, Quality, Delivery and Cost). Our general production policy is to manufacture products directly within theareas of demand.
Concerning components, parts, materials and other items, we are promoting local procurement proactively based on production andprocurement policies that we set in accordance with the characteristics of each. Above all, for Components B and C listed below, we are
expanding cross sourcing between regions to respond exibly to changes in the international trade environment such as exchange rateuctuations, FTA and EPA, aiming for globally optimal procurement.
Policy on Production and Procurement of Components and Parts for Construction and Mining Machinery
Production and procurement
Examples of parts
policydevelopment and Engines, transmissions, axles,
Components Key components for di erentiation that determine Permanent
productionin Japan (supply hydraulic equipment, andA
product quality and functions
from Japan to the world)electronic equipment
parts of cabin, coolingthat we need to purchase intensively Optimal procurement from 2 or Floor
Components Components
parts,
undercarriage parts,
from certi ed suppliers from the viewpoints ofB
3
regions
in
the
world
cylinders,high-pressure hoses,
functions, quality, and investment
tires, rims, and operator's seatswith relatively low levels of technologicalThick/ thin sheet-metal parts,
Components Partsdimachined parts, and cast andculty,
whichshoulddesirablybeproducedor
Local
procurement
Cwrought products as materials
procured close to the assembly plant
Category

De nition

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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Contents

Management ofEnvironmental andSocial Initiatives

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

Breakdown of Critical Suppliers

RegionNumber of companies
Custom goods suppliers*1
Purchased goods suppliers*2
Companies in Companies which Companies in Companies which
Trading
Total which
are highly
which
are highly
Major companies/
Komatsu has dependent on Komatsu has dependent on enterprises material
invested
Komatsu
invested
Komatsu
suppliers
156
7
86
2
7
43
11
59
3
32
1
4
14
5

Japan
Midori-kai China
member North
companies America 44
Europe
39
Japan
1
North
2
America
Non9
members of Thailand
Midori-kai Indonesia 4
India1
Vietnam
3
Total
318

1

15

1

6

1

19

8

30

3
2

6
1
1
2
149

1
13

1

2
2
1
13

4

106

33

*1 Business partners who manufacture goods based on drawings and/or speci cations from Komatsu (mostly medium and small enterprises)*2 Business partners who manufacture goods based on their own drawings and/or speci cations (mostly major companies)

Classi cation of Critical Suppliers
Categories
Tier 1
1 All
suppliers

Level
3
Level
3 Criticalsuppliers 2
Level
4
1
2

Number and Percentage of Total (The numbers of higher-level companies are Percentage of procurement inincluded in those of lower-level ones.)monetary terms
2,666

100%

100%

318

12%

76%

179

7%

66%

17

1%

8%

The level of critical suppliers is determined by the degree of Komatsu's involvement in each.
Level 1: Companies in which Komatsu or the Komatsu Group companies have invested
Level 2: Companies in which Komatsu or the Komatsu Group companies have not invested but which are highly dependent on business
transactions with Komatsu
Level 3: All critical suppliers

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

reducing the water consumption by 15% (by 2021) of other ten companies, which use large amounts of clean water.
Level 2*: Critical suppliers who depend highly on business with Komatsu
In China, extremely tough environmental regulations were imposed in 2015, mainly in the coastal areas, aiming to improve air pollution
issues (PM2.5). As a result, companies engaging in businesses such as painting, welding, casting and plating are required to takethorough measures to reduce exhaust air, smoke and soot (including VOCs). Working together with member companies of the Midorikai in China, we provide support for complying with the regulations, including the installation of facilities. As a result of measures takenby the companies, 14 companies had been certi ed as exempt from the regulations (as green companies) as of March 31, 2019.

Survey based on interviews on environment

An example of measures to meet regulations in
China (Daikyo Machinery Shandong Co., Ltd.:Installation of a welding fume dust collector andexhaust air ducts)

Number of Midori-kai Member Companies with EMS Certi cations
Region
Japan
China
North
America
EuropeNumber of member
companies

156
59

Number of companies which have obtained
certi cation
156
55

Percentage of companies withcerti cation
100%
93%

44

19

43%

39

29

74%

Values for North America and Europe are as of September 2017. The latest data are being collected.

Number of Midori-kai member companies in China which have obtained EMS certi cations

Results of activities in Japan for reducing power consumption from 2012 to 2016 (reduction of electric power consumption rate
calculated against the 2010 base unit)

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleSocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

a business recently. Through these engagements, Komatsu executives exchange views on medium-term management visions of thecompanies with their counterparts who do not have much experience in company management to align and share management
policies and ideas. The skills transfer activities are aimed at facilitating the improvement and succession of the on-site skills of eachcompany. In these activities, we help each company build a system for promoting skills transfer and develop instructors in core skills
elds by disseminating our knowledge and skills.
Training Programs for Midori-kai Member Companies
Major
achievements
Komatsu accepts sons and daughters of corporate managers of member 49 trainees have
Commissioned
companies and provides them with on-the-job training for up to ve been accepted
training
years.
since 1972.
training program for its executive candidates is open to
23 people have
Middle management Komatsu's
candidates
formembercompany
successor.
Durationofthetraining
isparticipatedManagement training
seven months.
since 2005.
to a
Young corporate managers of member companies make presentations Provided
total
of
22
Management Salons on medium-term management visions of their respective companies, companies since
which are discussed and shared with Komatsu.
2014
Around 40
peopleManagerial training
participate every
Employees in
Exclusive training programs for the Midori-kai. The training is provided year.
managerial
two times a year.
Around 60
positions
Leader training (forpeopleeld managers)
participate every
year.
for leader candidates related to production engineering and 22 people have
Komatsu Technical Intended
manufacturing
who are aged 30 or younger. It is a boarding school which participatedInstituteprovides a two-year program.
since 2008.
Representatives
Around 40
is an exclusive training program for the Midori-kai on sheet metal
Production engineer Itprocessing
and mechanical engineering. Five-day training is provided people
training
participate every
once a year.
year.
69 people have
Instructor training A 30-day program for candidates for skilled instructors of each company participatedsince 2015.
Skilled workers
Inspection training Inspection skills training and classroom lectures
schoolAll Komatsu QC
Participants are selected from among the Midori-kai members.
competition
Around 20
companies
All Komatsu skills
Othersparticipate every
competition
Participants
areselected
from
among
the
Midori-kai
members.
year.
(Advanced TechniqueContest)Target job level

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners(ii) BCP to Prepare for Natural Disasters
In FY2012, we began to operate in Japan a supply chain management system linked with disaster information from the Japan
Meteorological Agency. This is aimed at minimizing the impact on our production of a natural disaster, such as earthquakes andtsunami, by quickly inspecting damage to our business partners and the impact on our supply chain after the occurrence of a disaster.
We have built a database of locations and production items at 20,000 sites of 7,662 business partners, including Tier 2 and 3 suppliers,
thereby visualizing the risks of interruption in product supply that can be expected to be caused by a disaster. This enables us to takewell-focused countermeasures promptly. In the event of a disaster, we rst check the damage to our suppliers at high risk which havebeen assessed through the system. Where necessary, we dispatch security maintenance personnel to the companies to support theiractivities for the prompt recovery of production. In 2018, we were reminded once again of the necessity of the BCP system in the supply
chain because we su ered many natural disasters, such as earthquakes, heavy rains and typhoons, mainly in West Japan. We took theGreat East Japan Earthquake in 2011 as an opportunity to take countermeasures against earthquakes and oods, mainly for tangible
properties of 104 Midori-kai member companies, including their buildings and equipment. Moving forward, we will also strengthen
intangible measures, such as the creation and appropriate revisions of the BCP manual, and the provision of simulation training.

Examples of recovery support (lending of power
generators and assistance in machine centering)

Map showing the epicenter of the Northern
Osaka Earthquake in June 2018 and the
distribution of our business partners(iii) Compliance
We conduct compliance and risk audits (CR audits) internally. In 2016, we began to conduct the CR audits even for 17 business partners
in which we have made minority investments. The audit is conducted in four elds -- nance and accounting, labor management,
procurement (the Subcontract Act) and information security. It is aimed at identifying potential risks and taking corrective measures at
an early stage. The risks are identi ed mainly by checking the status of compliance with relevant laws and regulations, con rming
business rules, segregation of business and decision-making authorities, inspecting relevant business documents and conducting onsite examinations. Voluntary establishment of compliance systems by business partners is essential for promoting CSR procurement.
We believe that such a system should desirably be established by 1) formulating rules (establishing codes of conduct of each company),2) building a structure for promoting CSR procurement (including the appointment of a person in charge and promoters), 3)
introducing a whistleblowing system, and then 4) providing employees with awareness training. In accordance with this policy, in
FY2018, we conducted a questionnaire survey on the status of forming own compliance systems against 99 companies mainly
consisting of custom goods suppliers belonging to the Midori-kai. Five model companies were selected from among them, to which we
provided support for establishing a compliance system through providing practical examples and employee training materials. Thisinitiative will be continued until FY2021 for all 318 Critical suppliers.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

Main Findings through CR Audits (2016 to 2018)
Field

Findings
Countermeasures-Business ow, operating procedures and decision-making authorities
have yet to be set/ are insu cient.
Formulation/ review of business ow/
inventory check is not conducted/ not regularly conducted.
Finance and -Physicalprocedure, provision of
on sale and disposal of stagnant assets and loss on forced write- operating
accounting -Rules
instructions
on physical inventory check,down of such assets are not clear.
andothers-Management of corporate seals and password updates for the accounting
system are not done thoroughly.
-Insu cient details provided on the order form (document set forth in
Article 3)
Procurement -There is a risk of delay in payment (within 60 days after receipt).
of order form and supporting(the-There is a risk of early deduction of the price of raw materials purchased Review
documentation,
review of business ow,
Subcontract by a subcontractor from the subcontract proceeds to be paid.
andothersAct)-Violation of the provisions prohibiting reduction of subcontract proceeds(Reducing the amount of subcontract proceeds by the amount equivalent
to that of discount commission where the payment is made in cash)

Policy and Actions Regarding Con ict Minerals
In line with our corporate social responsibilities, Komatsu does not condone the use of con ict materials produced by the Democratic
Republic of Congo (DRC), or its neighbors (Angola, Republic of Burundi, Central African Republic, Republic of the Congo, Rwanda, South
Sudan, Tanzania, Uganda and Zambia). We have informed our business partners of this policy through the Komatsu Green Procurement
Guidelines. Working hand-in-hand with suppliers, we conducted a country-of-origin survey to determine the location of origin of ourmaterials and to ensure that none of them are sourced from areas of con ict.
Moving forward, we will continue to take steps to enforce strict adherence to this policy, which will serve to restrict funding for militarygroups situated in such areas. Any con ict materials discovered to be within our supply chain will be immediately discontinued fromuse.

Procurement Education in Human Resource Development
We have compiled basic matters that purchasing departments must not forget in promoting global procurement - in particular, thebasic philosophy and code of conduct that should be kept in mind when working with business partners -- in the KOMATSU Way(Purchasing). In addition, we have been facing signi cant changes in laws and regulations of Japan and other countries on business
transactions, employment and labor, environmental protection, export control and other matters. Responsible persons from theprocurement department are required to understand these trends and re ect them appropriately in their daily procurement activities.
At Komatsu, we strive to inform all employees of the trends by providing group training and e-learning designed for each one of the jobclasses, from new employees to managers.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXCSR Initiatives in the Supply Chain: Support for CSR Initiatives of Business Partners

DATA

Support Activities in FY2018
Main Support Activities in FY2018
Field

Content
Spot-checks (Safety patrol)

SafetyMutual visits and spot-checks within subcommiittee members

FY2018 results
99 companies in Japan and 35
companies in China
104 companies in Japan and 35
companies in China
98 companies
4 companies in Japan and 1 company in
China

Risk assessment training
Reporting of safety activities at Komatsu safety and healthmeeting
Environmental survey (status of compliance with laws and
4 companies
regulations, and on-site check)
Environment
CO2 reduction workshops
10 companies
Activities for reducing water consumption
10 companies
Acceptance of trainees for commissioned training
3 trainees from 3 companies
Participation in the middle management training
2 participants from 2 companies
Participation in Midori-kai managerial training
19 participants from 17 companies
Participation in Midori-kai leader training
92 participants from 40 companies
Participation in Midori-kai production engineer training
23 participants from 18 companies
3 persons from 3 companies
Personnel Development People enrolled in Komatsu Technical InstituteParticipation in instructor training
22 participants from 14 companies
TQM training
121 participants
Management Salons
3 companies
Participation in all-Komatsu QC competition
8 companies
Participation in Komatsu skills competition (Advanced
28 participants from 18 companies
Technique Contest)
Number of K-MICS PAD units mounted on machine tools of
Cumulative total: 250 units
Midori-kai member companies
ICT
Number of welding robots of Midori-kai member companies that Cumulative total: 134 units in Japan andare connected to KOM-MICS
75 units overseas
BCP
Participation in Komatsu's BCP training as observers
10 participants from 8 companies
Compliance and risk audits
8 companies
Support for establishment of compliance system
5 companies
Compliance
Workshops on the revised Immigration Control and Refugee
140 participants from 79 companies
Recognition Act (speci c skills)
456 participants from the Procurement
Internal AwarenessTraining for updating knowledge about the Subcontract Act (e- Division
Raising Initiatives
learning)
929 participants from related divisions
and companies
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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

CSR Procurement Guidelines

CSR Procurement Guidelines
Komatsu Group CSR Procurement Guidelines : What we would like to ask
our business partners in the supply chain(Established on August 30, 2011; Revised on April 1, 2019)

1. Operations for Sound Management
1. Build a system or operational structure designed to meet various risks.
2. Establish legal and transparent decision-making processes concerning management.
3. Conduct appropriate accounting procedures, tax ling and settlement of accounts.
4. Place importance on communication with stakeholders (customers, shareholders, business partners, employees, etc.).
5. Ensure that top management will be noti ed promptly when any abnormal condition develops and that your company will be able
to promptly and accurately respond to the situation(s).
6. Ful ll accountability to society through active disclosure of corporate information.

2. Thorough Enforcement of Compliance
1. Engage in business operations while complying with the laws and regulations, as well as the rules of the business community in the
countries and regions where we conduct business operations. In addition, make e orts to respect internationally accepted
standards.
2. De ne a code of conduct, comprising company rules, under the leadership of senior management, and develop a corporate climatethat places top priority on compliance.
3. Establish a compliance regime, in accordance with the scale and characteristics of the company, that prevents the company,
executives, and employees from engaging in illegal conduct, and promptly addresses situations where issues have occurred (e.g. awhistle-blowing system)

3. Product Safety, QCD and Technology Innovation
1. Comply with the laws and regulations concerning product safety and deliver products and services which will o er safety andpeace of mind to customers.
2. In addition to maintaining the quality and cost competitiveness of products and services which your company delivers tocustomers, stand by the agreed upon date of delivery and supply your products in a stable manner.
3. Establish a quality management system and make e orts to maintain and improve it.
4. Constantly engage in technology development and provide innovative, safe and environmental-friendly products and services.

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Management ofEnvironmental andSocial Initiatives

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Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

CSR Procurement Guidelines

4. Considerations for the Environment
1. Continue e orts to reduce environmental impact resulting from business operations.
2. Appropriately manage chemical substances contained in products.
3. Build up environmental management systems such as the ISO14000 series and "Eco Stage."

5. Measures to Respect Human Rights, Appropriate Labor Conditions and Occupational
Safety and Health
1. Respect human rights including the rights to freedom of association and collective bargaining.
2. Never get involved, directly or indirectly, in any child or forced labor.
3. Create a work environment where there is no discrimination or harassment in any aspect of employment.
4. Respect the rights of workers, through payment of fair wages and proper working hours management.
5. Establish a system for occupational labor health and safety, under the leadership of top management, and create a working
environment where all employees can work safely and healthily.
6. Establish fair and equitable human resource system, and pay attention to human resource development and employee education
as well.
7. Give consideration to improving communication between top management and employees.

6. Fair Business Practices
1. Comply with all related laws and regulations and engage in free and fair competition and business transactions.
2. Respect intellectual properties of other parties and work to prevent infringement thereof. Appropriately handle information(including personal information) of your company and other companies.
3. Never accept inappropriate cash, gifts or other favors.
4. Carry out proper foreign trade transactions (goods and technologies) while complying with the related laws and regulations.
5. Never have any relationship with antisocial forces or groups.

7. Social Contributions and Co-existence with the Local Community
1. Engage in social contribution activities based on your company's management principle(s) and support employees' volunteer
activities.
2. Place importance on co-existence with local communities which is the foundation of your business, and proactively support thegrowth of local communities.

8. Spread of the guidelines throughout the Entire Supply Chain
1. Encourage business partners of the company to observe the items stipulated in the guidelines. Make e orts to encourage thespread of these guidelines into the entire supply chain.
* These guidelines will be revised as needed.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

Environmental Risk Management
Promoting Legal Compliance, and Pollution Mitigation andPrevention
Komatsu complies with national and local laws and regulations and ensures that it periodically reports and maintains measurement
results.
In FY2018, there was one minor violation of environmental regulations (a ne of less than USD 10,000). At our business unit in Russia(KMR), the iron concentration in sewage e uent exceeded the standard. It has been solved by cleaning and improving maintenance.
There were no major environmental accidents which might pollute the environment on the boundary of our site during this period.

Addressing Soil and Groundwater Contamination
Komatsu has established guidelines for testing soil and groundwater, inspects any business unit that is scheduled to be sold, closed, or
removed pursuant to laws and regulations, and takes puri cation measures upon con rmation by local authorities if contamination is
discovered.
We voluntarily investigate business units in operation in order to test for contamination stemming from VOCs in cleaning solvents, etc.
used in the past.
We have been surveying soil and groundwater for VOC contamination at domestic business units since 2005, and have implemented
countermeasures at any sites that have been found to be contaminated. We use methods that facilitate the cleaning process in the
shortest period of time possible.
Our clean-up of the Oyama Plant was completed in FY2009. We are continuing clean-up operations at other sites while checking thee ect of our cleaning measures.
In January 2018, a low-concentration of PCBs was detected in the waste oil contained in a part of the soil on the premises ofKomatsu Osaka Plant, which did not a ect the ground water or ow out of the plant.We have added water-pumping facilities toimprove oil removal and have been taking measures such as soil replacement.
We will continue to thoroughly clean-up and regularly monitor groundwater at site boundaries to ensure that there is no out ow ofgroundwater that has exceeded the standard outside the premises.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

Environmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Environmental Risk Management

Status of Soil and Groundwater Cleanup in Japan
Business unit

Cleanup method

Cleanup status

Awazu Plant

Excavation and removal, soil vapor extraction,
groundwater withdrawal and aeration,bioremediation

In process

Komatsu Plant(former site)

Excavation and removal, groundwater
withdrawal and aeration, bioremediation

In process

Osaka Plant

Soil vapor extraction, air sparging, groundwater
withdrawal and aeration, bioremediation

In process

Shonan Plant

Excavation and removal, groundwater
withdrawal and aeration

In process

Tochigi Plant

Excavation and removal, bioremediation

In process*1 Bio-remediation is a puri cation process whereby hazardous materials are puri ed using micro- organisms. This return the soil to a non-hazardous
state.
* Investigative surveys revealed zero contamination in the Koriyama Plant, Technology Innovation Center in Hiratsuka, Techno Center in Izu and Field
Testing Department in Oita.

Managing PCB (Polychlorinated Biphenyl) Waste
Komatsu stores and disposes of PCB-containing waste (such as transformers and uorescent stabilizers) in accordance with the "Act on
Special Measures concerning Promotion of Proper Treatment of PCB Wastes" and the "Waste Management and Public Cleansing Law".
We intend to continue our appropriate treatment of PCB waste, including low-concentration PCB waste, according to our plan.

Management of Chemical Substances and Pollution
Prevention
Reducing the amount of PRTR-related substances
In FY2018, the number of PRTR* substances with a handling volume of 1 ton or more (0.5 tons or more for Class I Designated Chemical
Substances) was 27, the same number as the previous year.
The PRTR substances xylene, ethyl benzene and toluene account for approximately 93% of the emissions from Komatsu and KomatsuGroup production sites. Most of these emissions are released into the atmosphere.
In FY2018, the volume of xylene, ethyl benzene and toluene fell from FY2017 levels despite increased production volume due to theongoing switch to coatings and thinners containing less PRTR Class I Designated Chemical Substances at each site.
We will continue to make e orts to switch to paints containing less PRTR Class I Designated Chemical Substances, introduce high solids

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

thinners and paints, improve coating e ciency, and reduce coating lm thickness. Emissions in FY2018 were reduced by about 5% fromthe previous year.
* PRTR: Law designed to mandate the disclosure of the amount of speci c chemical substances released into the environment to promote themanagement of such substances (The noti cation system based on the PRTR Law)

Reducing VOC Emissions
The majority of VOC emissions are from VOCs contained in paintsuch as xylene and ethyl benzene.
Despite a slight increase in emissions in FY2018, we have managed
to maintain a 50% reduction (as compared to FY2005) in theamount of VOC emissions per units of manufacturing value.

New Painting Line of Komatsu Cabtec

Initiatives to Address Chinese Environmental Regulation
In China, from FY2017 plants started to be ordered to halt production as a measure against air pollution (PM in particular). For theregions where Komatsu operates manufacturing facilities, plant stoppage orders based on air pollution conditions began from 2017 in
Jining District of Shandong Province and from 2018 in the Changzhou District of Jiangsu Province. In FY2018, the regulations were notenforced uniformly, and eased restrictions were applied to companies that had made progress in their environmental response.
Komatsu's plants in China have made improvements including the installation of equipment to collect and process the soot produced
from welding, and units to treat the VOCs produced by coatings. As a result, of Komatsu's four plants operating in the applicableregions, three plants were granted exemptions from the regulations, greatly reducing the number of days of halted operations. For theremaining one plant, in FY2019 we will make progress on improvements and obtaining certi cation in order to receive exemption fromthe regulations. In addition, Komatsu's plant in Shandong Province (KSC) invited around 80 a liate companies and local companies tovisit its premises for an environmental action exchange session in response to a proposal by the city government. An explanation of thedetails of Komatsu's environmental measures was met with high praise and is also contributing to environmental improvements in theregion.

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

Breakdown of the Amount of PRTR-related Substances Released andTransferred from Komatsu Group Manufacturing Facilities in Japan
Independent Practitioner's Assurance* Totals may not match exactly due to rounded decimals in individual categories.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

Amount of PRTR-related
Substances Released into theatmosphere

Amount of VOC Released
Independent Practitioner's Assurance

Independent Practitioner's Assurance

Komatsu Group Manufacturing Facilities in Japan

Komatsu Group Manufacturing Facilities in Japan

Reducing the Use of Substances of Environmental Concern
and Complying with the EU REACH Regulation
Komatsu is aware of the harmful environmental impacts that certain materials possess, and has made continuous e orts from an earlystage to reduce the use of a number of such substances. These included asbestos, lead, and other such items. In FY1999, we created ourown list of banned and limited-use substances (Refer to “Substances of Environmental Concern Banned or to Be Reduced for Use in
Products”), which was based in part on Japanese legislation (Japanese Law Concerning the Examination and Regulation of
Manufacture of Chemical Substances Control) that banned a number of chemical materials as well as regulatory measures in othercountries.
We have also implemented more stringent measures in the control of substances that raise environmental concerns. In compliancewith REACH*1, we began revisions of our FY1999 listing of banned and limited-use substances. We have also collaborated with suppliers
to create a regulatory system that strengthens control of potentially harmful materials being used for production. We have rolled thissystem out in Japan and Europe, with plans to continue implementation in other areas of operation.
Through the use of this system, we identify SVHC (substances of very high concern) in not only vehicles for export to the EU or produced
at local EU companies, but also in vehicles currently in production and in newly developed vehicles. Furthermore, we also regularly
check for new SVHCs to be added to the list.
There are currently 197 SVHCs registered, with the list being revised every six months. We expect this number to increase to about 1,500
in the future. We have also devised a work ow to monitor control of these substances.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

Control System for Substances of Environmental Concern

Substances of Environmental Concern that are Banned, or are to see
Reduced Use in Production
Rank

NumberChemical Substance
Hexavalent Chromium
PBB/PBDE/HBCDD *3

BannedTo be reduced(Subject tolimited use)

Substances ofVery High
Concern(SVHC) under
EU REACH
Regulations

1715(197)*4

PCB

Cadmium
Tri-substituted
Organostannic
Compounds
Asbestos

Mercury
Sulfur Hexa uoride *3
Speci ed
CFCs/Alternative CFCs
(HCFC)
Hexachlorobenzene

Trichloroethylene
PFOS (Per uorooctane
sulfonate)

Triethanolamine
RCF (Fire-ResistantCeramic Fibers) (Alumina
and Scilica Types) *3

Lead
Alternative CFCs (HFC)

Arsenic
Speci ed phthalate ester(DEHP/DBP/BBP/DIBP) *2
MethanolSelenium
Speci ed Chlorinated
Flame Retardents (TCEP)
DZ

DOTE

UV327

Polycyclic Aromatic
Hydrocarbons (PAH)
BNST

Komatsu controls the use of the following substances, which might be used in Komatsu
products.
DEHP/DBP/BBP/DIBP etc
HBCDD/DBDE/
RCF(5 substances)
Trisphosphates(2-Chloroethyl)Speci ed Lead
DOTE
UV327
Compounds(4 substances)127

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

*1
*2
*3
*4

REACH: EU regulations for the Registration, Evaluation, Authorization and Restriction of Chemicals
Diethylhexyl phthalate, dibutyl phthalate, benzyl butyl phthalate, diisobutyl phthalate
Review for stricter limits due to regulatory trends.
The number of substances registered up until April, 2019 (progressively updated). Includes materials that are not contained in Komatsu construction
equipment.

Water Risk Management
In accordance with our Earth Environment Charter, Komatsu Group has focused on two salient areas:
1. Promoting reductions in water-usage (input), and increasing the recycling (circulation) of water.
2. Activities centered on water quality conservation
However, in response to the frequency of weather abnormalities and societal demands (2015/1 Water Crisis named as the number one
risk at Davos Forum etc.), Komatsu has established the “Water-Related Risk Evaluation Committee” in the second half of 2015. This
committee engages in the study of water-related issues, and conducted a “Water-Related Risk Survey” after half a year of learning. Thissurvey engaged both our domestic and foreign a liates, seeking to understand business-related water impacts and improve upon
Komatsu's water policies.
To be more speci c, we identi ed the risks that applied to Komatsu at our major operation bases by using 7 categories such as heavy
rain, ood, drainage pollution, and scoring their probability of occurrence, di culty in issue resolution, magnitude of impact, andmore. In an addition, Aqueduct was used as a supplementary tool to objectively identify water risks.

Results from the Water Related Risk Survey (conducted at 45 global
a liates/divisions in January 2016)

Komatsu Group Water-Related Risks:
1. E ect of heavy rain on operations/business
2. Risk of pollution from drainage
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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

Environmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Environmental Risk Management

3. E ect of river ooding on the supply chain
Our water-related policies for FY2016 onwards have thus been changed to re ect the result of this survey. In addition to thecontinuation of previous initiatives and activities, we are now newly promoting “Water-Related Risk Reduction Activities” in order tominimize the impacts of water-related risks within our business operations.

Domestic Case Studies (Oyama and Tochigi Plants)
We have initiated the construction of multiple safety measures against the risks imposed by heavy rain. These include the building of
three reservoirs (capable of holding up to an hour's worth of 100mm/h rainfall), installation of heavy rainfall water pipes, theconstruction of underground reservoirs, and the widening of rainwater drainage ways. In addition to this, we have installed water block
walls and stop bars to prevent water from owing outside of the premises.
* Our reservoirs also serve to alleviate the surrounding district's lack of drainage capacity.
Current Status of Reservoirs:
1. Oyama Plant 20,000 ton 10,000 ton and 4,000 ton reservoirs (completed)
2. Tochigi Plant 12,000 ton reservoir (under construction)

International Case Studies (KI: Komatsu Indonesia)
The following measures have been implemented to prevent the entry of river ood water into KI premises.
1. Installation of concrete wall
2. Installation of emergency door for employees
3. Installation of oodgate
4. Installation of new drainage system
5. Installation of drainage gate
6. Installation of pump for oods
We have engaged elements of our supply chain to collaborate with our water-related risk initiatives. Our “Water-Related Risk Survey”
was conducted at the operations of one of our main supply chain companies (Midori-kai). Komatsu is proud to report that as of FY2017,
Midori-kai has begun collaborative e orts in our “Water-Related Risk Reduction Activities”.

Compliance and Risk Audit at overseas group companies

Komatsu has been conducting planned compliance and risk audits (CR audits) since scal 2007 for risk prevention at overseas groupcompanies.

Environmental Audit of group companies in Indnesia and Brazil
In FY2018, we conducted environmental CR audits in Indonesia (KI, KUI) and Brazil (KDB,
KRCC).
Our comprehensive auditing procedure begins with the assessment of a check sheet thatour group companies. We then begin an audit of environmental activities and complianceto legislative regulations, supported by the chief of environmental matters of our main
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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleSocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Risk Management

domestic plant. There were no major problems that would lead to environmental risks inboth Indonesia and Brazil, and both were actively working on reducing environmental
impact.
We continue to carry out follow-ups checks at areas where audits have already been
completed, and plan to conduct further environmental audits of our group companies inother regions.

Environmental Audit at KRCC

Past Environment Audits
Year

Area

Year

Area

2007

China

2013

United States

2008

—

2014

United States and Brazil

2009

Thailand and Indonesia

2015

Thailand

2010

India

2016

India and Indonesia

2011

Brazil2017

Russia and China

2012

Russia and Czech Republic

2018

Indonesia and Brazil

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Activities in the Product Life Cycle (Upper and Lower Stage)

Environmental Activities in the Product Life Cycle (Upperand Lower Stage)
Support for Sales and Service Divisions in Developing
Environmental Management Systems
Komatsu also stays committed to safety and the environment in the activities of its sales and rental companies. To raise awarenessabout environmental management, in FY2018 we developed environment management systems and supported improvements mainly
at our site workplaces.

Acquisition of ISO14001 Certi cation
On April 1, 2018, Komatsu Construction Equipment Sales and Service Japan, Komatsu Rental, and Komatsu Forklift Japan were merged
into Komatsu Customer Support Co., Ltd. (hereinafter “KCSJ”). In FY2018, as KCSJ, we planned and carried out activities to acquire
ISO14001 certi cation, an international standard for environmental management systems, by adding a lift division to our construction
machinery sales division and rental division that had already acquired certi cation in FY2017.As planned, we acquired certi cation in
May 2019 and all of our business divisions engage in a standardized e ort for environmental improvement.

Activities Based on the Environmental Guidelines
We distribute our "Environmental Guidelines" to all of our sites, and follow the guidelines
in pushing forward with our environmental activities. The guidelines summarize the rules
and standards that should be observed at the workplaces of our sales and rental
companies in compliance with the law and also to avoid negatively impacting neighbors
in terms of waste disposal, wastewater treatment, control of noise and vibration andother problems deeply related to the environment. Representatives of Komatsu and a
relevant company jointly visit our sites, provide guidance to on-site workers and develop
proposals for improvement so that the environmental guidelines can be consistently
Workers receive environmental guidance at one
complied with.
of our site

Proper Discharge of Waste
Our construction machinery sales division introduced a waste management system which centralizes the management of electronic
manifests, consignment contracts, permits and others to reduce management man-hours. The same system has also been introduced
to our rental and lift divisions so that the companies of KCSJ can properly centralize the management of waste.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Activities in the Product Life Cycle (Upper and Lower Stage)

Reduction of Environmental Impact in Our Regular Operations- Supporting the sale of environmentally friendly products -We focus on promoting sales of eco-friendly machines developed by Komatsu such as
hybrid construction machines, machines equipped with Tier 4 Final that clears emission
regulations, battery forklifts, and aim to reduce the environmental impact through theoriginal operations (sales and service). In adition, mainly rental division, KCSJ also
locates IOT centers around the country for many users to visit and experience smart
construction methods with the use of ICT construction machinery. In this way, we
endeavor to enhance understanding about construction methods that minimize
environmental impact and spread these methods.

A demonstration held at an IOT center

Support for Suppliers in Environmental Activities
Komatsu’s Green Procurement Principles

To o er eco-friendly products to customers, Komatsu advocates eco-friendly green procurement principles for raw materials, procured
components and parts that are important elements of production. In procurement, we give priority to products, parts, raw materials,
secondary materials, equipment, construction, etc., that carry fewer environmental burdens.
In green procurement, we have the following two principles.
1. Preferentially procure goods and products with fewer burdens on the environment.
2. Implement activities that raise awareness about the environment by building an environmental management system for our main
suppliers.

Support for Suppliers in Constructing Environmental Management
Systems
In order to bolster the strength of our supplier’s environmental management systems (EMS), we have tasked Komatsu Midori-kai (which
accounts for approximately 70% of our procurement) with obtaining certi cation for supplier EMS.
In FY2018, 156 companies (that are targeted for the acquisition of environmental management systems) acquired certi cations such as
ISO 14001 or Eco Stage, and are now engaged in the implementation of environmental management activities.

Anti-Climate Change Project: Support for Suppliers in CO2Reduction
Supporting Midori-kai’s CO2 Reduction Activities

With the goal of facilitating suppliers’ e orts to reduce CO2 emissions, we are rolling out part of Komatsu’s energy saving activities (50%reduction in energy consumption through production reforms) to major outsource suppliers.
From June 2012, we have continued to expand our initiatives, which had focused on energy-saving model companies, to also
encompass production reforms. We have also initiated education programs for managers and facility personnel. The activities havecontinued and we have endeavored to visualize potential improvements for each company and to disseminate them over our suppliers.

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

Environmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDS
INDEX

Environmental Activities in the Product Life Cycle (Upper and Lower Stage)

Support for Suppliers in Water Consumption Reduction Activities
To promote water consumption reduction activities amongst our suppliers, we haveintroduced our water use reduction initiatives to major outsource suppliers.
From FY2017, we have visited and inspected ten selected model companies and given, on
the spot, advice on improvement tailored to the companies’ needs and circumstances.
We still promote water consumption reduction activites today.
Water risk survey in FY2018

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Biodiversity

Biodiversity
Recognizing the potential impact of our business activities on our ecosystem, we have taken steps tomaintaining our commitment to protect biodiversity in our areas of operation.

Initiatives that Deal with Biodiversity
With the establishment of Komatsu's "Declaration of Biodiversity" and "Biodiversity Guideline" in January 2011, Komatsu business
units worldwide began activities designed to preserve biodiversity.
Komatsu promotes initiatives to preserve biodiversity on two levels.
First, the Company continues to promote ongoing e orts to reduce the environmental impact of Komatsu's business activities.
Komatsu also considers biodiversity when deciding how land is to be used, such as when building factories.
Second, Komatsu is becoming directly involved in the preservation of biodiversity, and at the same time expanding our "one-site, onetheme activities" to raise employee's awareness of the need to preserve local ecosystems.

Declaration of Biodiversity by Komatsu
Komatsu recognizes that its business activities are dependent on and in uence bene ts from the ecosystem through its
biodiversity.
Based on this understanding, Komatsu strives to take actions in accordance with the policies described below, as it shares asense of responsibility regarding the biodiversity crisis, and strives to conserve diverse resources.
(Recognition by Management)
Komatsu recognizes that conservation and promulgation of biodiversity are important management tasks.
Ⅰ(Initiatives)
Komatsu shall promote biodiversity through the following two perspectives
1. Komatsu shall reduce its environmental impact, which is a ecting biodiversity, through its business activities.
Ⅱ(1) Reduction of environmental impact of products(2) Reduction of direct environmental impact from products throughout lifecycle.
(3) Consideration of biodiversity when using land.

2. Komatsu shall work for conservation and promulgation of biodiversity through its social contribution activities.
(Operation)
Komatsu shall promote activities by means of a step-by-step approach.
Ⅲ(Cooperation with the community)
In order to protect the biodiversity rooted in regions, Komatsu will undertake activities in coalition with administrative agency,
local citizens, NGOs and other entities; by doing so we aim become a corporation communities can be proud of.
Ⅳ(Full participation activities)

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Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Biodiversity

Komatsu will promulgate the importance of biodiversity to all employees and undertake activities with their full participation.
We will involve corporations related to the lifecycle of Komatsu products and representative agencies as well as customers inthese activities and promote our initiatives on a global group-wide scale.
(Communication)
Communication: Komatsu will strive to educate and disclose related information to employees. In addition, Komatsu will
actively disclose information on activities being undertaken and work to contribute in heightening the level of societal
awareness on the importance of biodiversity.
Ⅵ

Initiatives from Speci c Business Facilities (one-site, one-theme
activites)
BIODIVERSITY OF KOMATSU FROM BRAZIL（K. DO BRASIL LTDA）
Komatsu from Brazil is located in the town of Suzano, in the stateof São Paulo, an industrial area of 633,00.00m2 since 1975,
currently counting with more than 95,000.00m2 of built-up area.
Throughout the years, along with the manufacturing area
expansion, came the improvement of the environmental
consciousness and the urge to promote actions in order topreserve the local Fauna and Flora, even though the company has
been built in an industrial area, it owns a wide wooded area,
sheltering a variety of animal species.
Brazil counts with six biomes: Amazon, Cerrado (savannas),
Caatinga, Atlantic Forest, the Pampa and Pantanal. In 2013 it wasmade a technical survey to identify and characterize the Fauna
Pau-Brasiland Flora where Komatsu is placed in, in order to increase thecurrent area preservation level, in which it was found that
Komatsu is inserted in the biome of Atlantic Forest, covered byvegetal formations integrated in the Vegetal Complex of theAtlantic Forest, we detected in this study that we have around 68
species of Fauna (mammals, birds, amphibians and reptiles) and82 species of Flora (vegetation and trees), between the species
identi ed in Flora there are some endangered and rare species
like Pau-Brasil (Paubrasilia echinata) an emblematic tree of ourcountry.
By knowing better the living biodiversity, with proper care andpreservation of the special endangered species being reinforced,
maintaining the trees inside their natural development
conditions, controlling the manufacturing area expansion so that GREEN AREA OF THE KOMATSU
the impacts and vegetal suppression are minimized, as such asaccidents between wild animals living in the area.
For the future we intend to expand our green area through a forest
enrichment, focusing in insert in the industrial area theendangered species and the other fruitful species, since they aretechnically compatible to our climate and geological conditions,bene ting the native fauna habitat, especially the local birds andother birds in migration period. The process to the forest
expansion in the company’s area will count on a project ofenvironmental education in which the employees will have135

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Biodiversity

contact to the planting of these trees, to conscious andstimulation of caring with the biodiversity inside out Komatsu,
spreading these values to their families.
Besides the internal e orts of Komatsu to preserve and protect
the local biodiversity, we will carry out the support to the city hall,through the donation of tree seedlings in adult stage of the fruitfultrees, in order to work on reforestation of speci c spots of the city,
increasing the conditions to preservation of the native fauna, thisproject counts on a program of environmental education focusedon children to young adults, in the moment of planting educators
speak about the importance of local fauna and ora preservation.
Sagui do tufo branco (monkey)

Tucano do bico verde (toucan)

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

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STANDARDSINDEX

Social Contribution Activities

138

Accomplishments and Approaches for Social Contribution Activities

140

Komatsu's Initiatives for the Social Issues

142

Developing People Needed by the Community

145

Disaster Relief

147

Clearing Anti-Personnel Landmines and Community Development Support

153

Promoting Sports̶The Komatsu Women's Judo Club137

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Accomplishments and Approaches for Social Contribution Activities

Accomplishments and Approaches for Social Contribution
Activities
While much of a business's responsibilities lie within the corporate sphere, it is nonetheless equally as important that a business takeresponsibility for local engagement within the social sphere. Komatsu is thus acutely aware of the importance for "Social Contribution
Activities" that help nurture and develop the local communities in our areas of operation. We emphasize themes in our social
contributions which utilize the business acumen and know-how that we have cultivated in our business operations. This in turn allows
us to make use of our existing expertise to greatly increase the bene cial impact and reach of our contributory activities.

Basic Approaches to Social Contribution (from “Komatsu’s Worldwide
Code of Business Conduct”)
CSR (Corporate Social Responsibility) is a multi-faceted topic, of which speci c elements pertaining to the di erent aspects of its
implementation are subject to change according to country, region, or business practices. However, regardless of these variations, theunderlying axioms that drive these initiatives remain the same: companies must co-exist in harmony with society, responding to
expectations and building a relationship of mutual trust. As mentioned in other sections of this report, one of the principles that guides
the Komatsu Group on a global scale is the understanding that Komatsu should ful ll its corporate social responsibilities throughintegration of CSR into our business operations. We further build on that belief by de ning clear requirements for good corporate
citizenship: a company should live up to societal expectations by promoting harmony and making real contributions for the bene t of
the community in which it operates. Komatsu is proud to report that we live up to these high standards, and are proactively engaged insocial contributory activities across multiple regions.

5 Basic Principles for Social Contribution (from "Komatsu's Worldwide
Code of Business Conduct")Aims:

To clarify the responsibilities of Komatsu Group and its employees as members of the local community and guide their activities forsocial contribution accordingly.

Principles: Activities for social contribution should:
have continuity;
be reasonable to employees; andcontribute to the advancement ofpublic welfare;not be designed to advertise our
products or services.

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be voluntary (not forced);

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Accomplishments and Approaches for Social Contribution Activities

Social Contribution Expenditures of the Komatsu GroupWe have divided and summarized the results of our social contributions into 6 general categories. These can be found in the infographic
below:

Type of Social Contribution Expenditure(Millions of yen)

Cash contributions

528

Time contributions

445

In-kind giving

352

Management overheads

656

Total

1,981

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Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Komatsu's Initiatives for the Social Issues

Komatsu's Initiatives for the Social Issues
There are various social issues in the world in each region.
As the Komatsu Group develops its business globally, we listen to the voices of people living in the various local communities in ourareas of operation, and actively carry out support activities to improve the living standards. We consider conducting such social
contribution activities as a responsibility of doing business around the world.

Oceania

Employee engagement program for community support (Komatsu Group companies in
Oceania)
In Oceania, Komatsu Australia (KAL) is playing a key role in an employee engagement
program to support the resolution of various social issues which local communities arefacing.
In this employee engagement program, called “Live Your Dream,” individual employees
rst explain local issues they are concerned about daily to the committee members andthen come up with potential solutions against these problems. We are promoting the
program to give each employee who is actively involved in this program an opportunity to
Fundraising for The Younger Heroes, anconsider solutions that contribute to the communities where we operate.
organization that supports veterans and theirfamilies
Once “dreams” are selected, activities are conducted in cooperation with local NPOs
involved in the resolution of such issues. In the rst year, 2018, a total of eight dreams,
such as “Supporting mothers with antenatal and postnatal depression” and “Supportingchildren and their families living with autism” were implemented. While putting thehighest priority to making contributions to local communities, we will continue toenergize this program.
Activities with Full Circle, an NPO that supports
children with autism and their families

BrazilSupport for children who participated in World Judo Championships (Komatsu do Brasil &Komatsu Brasil International Ltda.)
In Brazil, the Komatsu Women’s Judo Club held Judo classes and Judo events in 2015,2016 and 2017. It came to our attention through a Judo club that participated in those
Judo events that three children designated as representatives of Brazil for the under-13
category at the “Pan American Judo Championship” and “South American Judo140

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Komatsu's Initiatives for the Social Issues

Championship” had di culties overcoming nancial issues and raising money for travel
to participate in those championships.
In response to this, Komatsu do Brasil (KDB) and Komatsu Brasil International Ltda. (KBI)
decided to donate travel expenses for the three representative athletes and presented
ight tickets to them at the KDB building.
As a result, the championships ended with brilliant accomplishments: two of the athletes
won Gold medals for both championships and one athlete won Gold and Bronze medals.
When the athletes visited KDB again in December, they conveyed their joy andappreciation to us. Komatsu would like to continue to support them and watch theircontinued success in future too.

Flight tickets to Ecuador were presented

All three won Gold medals at the Pan American
Judo ChampionshipJapan

On-site study tour of demining project in Cambodia (Komatsu Group companies in Japan)
Komatsu has been continually implementing demining and community development
projects aiming for reconstruction since 2008. To let employees of the Komatsu Groupexperience the accomplishments of the activities we have performed in Cambodia, we
held an employee engagement study tour for the rst time in February 2019.
Many areas in Cambodia still have various types of landmines, and there is no end of
victims injured by those threats. There are people who have to live in places even if theyknow there are landmines. We held this tour so that our employees can see, know andfeel these situations in Cambodia. We also wanted the participants to touchupon Komatsu’s demining machines in operation, and the operations of our impayable
partner, Japan Mine Action Service, an approved speci ed non-pro t organization thathas been helping local communities for many years.
A total of thirty-nine participants visited several elementary schools built in deminedareas. They repainted the school building with students and installed play equipment
made of used tires on the school grounds. Throughout the six-day, ve-night schedule,
they enjoyed communicating with local people. We received a lot of happy commentsfrom the local residents like “It’s much more convenient with the new wide roads! I use it
every day” and “I am glad to have an elementary school in my neighborhood. I want
children to study hard and get a good job.”

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Demining site visit

Interview with residents who live in thedemined areas

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Developing People Needed by the Community

Developing People Needed by the Community
When we asked ourselves:"What sort of social contribution activities would meet the needs of regional communities and make the bestuse of Komatsu's strengths?" We arrived at the answer: "developing people." We are working in cooperation with several entities suchas national and local governments as well as schools, to carry out human resource development programs that are tailored to eachregion's needs and enable participants to acquire skills that will open up various employment opportunities.

Various Areas and Forms of Support

Developing Human Resources Tailored to Regional Needs Worldwide
Using the skills and know-how cultivated through our core business, Komatsu supports the development of human resources that areneeded not only within our company, but also in local communities.
Expectations for human resource development can vary greatly from community to community. At Komatsu, as we do business on a
global scale, we make e orts to understand what each community needs and work on providing that support accordingly in various
areas and in di erent forms.
The pyramid graph below shows the areas in which Komatsu is supporting human resource development. It also shows that the closer
you get to the top of the pyramid, the more closely linked the program is with Komatsu businesses. The base of the pyramid shows ouractive support of activities such as science classes in elementary schools, mainly in di erent parts of Japan, USA and Europe. The nextlevel up is to provide basic education, which consists of our support towards people who cannot or were not able to receive the level of
education necessary to nd employment, due to circumstances speci c to their country or region. We currently run such programs inChile and South Africa. At the next level, we support universities and vocational training schools in many regions by providing
Komatsu's curriculum and equipment, as well as instructors. At the top of the pyramid, we are working with national and local
governments and with our customers to develop human resources, particularly in regions where human resource development is asocial challenge.
The actual content of the support includes dispatching instructors and trainers; providing educational materials, equipment andfacilities; accepting apprentices; and various other means utilizing the full potential of our know-how.

Support for Developing Human Resources

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CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Developing People Needed by the Community

Dispatching instructors

Providing
educational materials andequipment

Providing facilities andsupporting operations

Accepting apprentices

Collaboration with Cummins Inc.
We believe that collaborative CSR activities deliver more e ective outcomes than those conducted alone, by sharing the people, knowhow, and other resources of each company. In promoting social contribution activities in the past, Komatsu has collaborated withentities such as non-pro t organizations that have their own unique know-how. In 2016, we agreed with our business partner, Cummins
Inc. in the U.S., to collaborate in the eld of local human resource development.

Komatsu and Cummins' Common Objective
Komatsu and Cummins Inc., a major engine manufacturer in the U.S., have built a strong relationship of trust over the years as partners
in the engine business. Both companies have already expended much energy into supporting human resource development in local
communities as part of social contribution activities, and have already collaborated in several areas. One of the main programs is
Technical Education for Communities (TEC). Both companies have partnered through contract to utilize their pool of resources and bestpractices, to expand the support of human resource development globally.
Cummins Pro leCorporate name

Cummins Inc.

Established

1919

Headquarters

Columbus, Indiana, U.S.

Business segments

Engine, Power systems, Components, Distribution

URL

http://www.cummins.com/

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Developing People Needed by the Community

Collaborative Development of the TEC Program - South Africa Case Study
TEC is a program of activities to provide students who major in mechanical and/or electrical engineering with a curriculum of technicaland practical vocational training that takes advantage of the knowledge of both Komatsu and Cummins.
In FY2018, we nished preparation at Sedibeng TVET College in Johannesburg, South Africa, and started a three-year curriculum,
accepting 31 students in May. In this curriculum, students learn how to maintain engines and operate construction/mining equipment
through lectures and internships.
Through the TEC program, students acquire knowledge useful for practical operations, which increases job opportunities withfavorable conditions and improves the sense of personal ful llment. Also, in the long term, the increase in the number ofskilled engineers will play an active part in local companies, including Komatsu Group companies. In turn, contribution to the entire
local economy is expected.
The companies that have been playing a major role in promoting TEC in South Africa are Cummins Africa and Komatsu Africa Holdings(Pty) Ltd., a Komatsu Group company. In providing this curriculum, the company worked to dispatch dedicated instructors, provide
educational materials such as cutaway models, and support the creation of the training curriculum. After the launch of the curriculum,
the companies have been supporting the entire program continuously. Moving forward, Komatsu will deepen the collaboration with
Cummins and promote the operation of TEC programs globally.

Discussion at "Safety" classStudents of Sedibeng TVET College and President Ohashi of Komatsu(current Chairman)

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

Environmental
Performance
Data

SocialContribution
Activities

GRI
STANDARDSINDEX

Disaster Relief

Disaster Relief
Many of Komatsu's products (especially construction equipment) are vital for recovery and reconstruction in the wake of a natural
disaster.
In the event of an emergency, we promptly grasp the local situation and support disaster recovery in a substantial way, such asproviding equipment needed by the disaster area. As part of these e orts, we have initiated support activities using drones as well as
construction machines. The latest activities are as follows:

Reconstruction Support for Natural Disasters in Indonesia

In 2018, in response to the three large-scale natural disasters that hit various parts of Indonesia, the Komatsu Group companies inIndonesia provided support for reconstruction as follows:
For the victims of the Lombok Earthquake that occurred twice in July and August, in addition to providing emergency relief
goods such as 50 sets of tents, tarps, blankets, and 50 sets of food and beverages, we leased three Komatsu hydraulic excavators freeof charge to the National Rescue Team. These support activities were conducted in coordination with the military, police, Ministry of
Public Works and Housing and local residents.
In response to the Sulawesi Earthquake that occurred in September (with tsunami and liquefaction), as a part of the emergency
support for the victims, we supplied daily necessities to Sigi villages, the most isolated area, and supported the activities of the
National Rescue Team. For this purpose, two Komatsu hydraulic excavators were lent free of charge. In addition, we constructedcommunal cooking grounds and three elementary schools(including facilities such as community library, sta rooms, restrooms,etc.).
In addition to daily necessities supplied to Pandeglang and Kalianda, the most a ected areas as part of the emergency relief for the
Sunda Strait Tsunami that occurred in December, Komatsu's hydraulic excavators were used to support the activities of the National
Rescue Team. Two units were lent free of charge. These machines were used for activities such as evacuation, land preparation andevacuation camp preparation under the management of the Ministry of Energy and Mineral Resources.

Hydraulic excavator in the Lombok Earthquake-stricken area

Construction site of an elementary school in Sulawesi

Assistance for 2018 Japan Floods
As part of disaster restoration assistance through practical methods, Komatsu performs assistance activities not only with construction
machinery but also with drones. To assist in the disaster response to the ood in western Japan that occurred in July 2018, Komatsu, in

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEX

Disaster Relief

cooperation with OPTiM Corporation and Landlog Ltd., performed drone surveying without charge for municipalities aiming at a quick
grasp of the damage situation.
Disaster areas have numerous hazardous zones that people cannot enter into due to landslides. Upon request from municipalities, thethree companies delivered drones and their services to the disaster areas and quickly assessed damage by creating 3D landscapemeasurement data. This drone surveying was performed at dozens of disaster areas in Hiroshima, Okayama and other surrounding
prefectures.
Because the method enabled safe and quick surveying without allocating human resources, it has been highly evaluated by themunicipalities in terms of not only quick understanding of damage situation but also base data creation for disaster restoration.

Roles of the three companies
OPTiM: Free dispatching of professional drone pilots who are registered in DRONE CONNECT, a drone pilot sharing service
Landlog : Free use of their data platform
Komatsu : Free use of EverydayDrone, a 3D current-status survey and measurement data creation service, and a smart constructionapp

EverydayDrone creates current-status survey measurement data in 3D

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Clearing Anti-Personnel Landmines and Community Development Support

Clearing Anti-Personnel Landmines and Community
Development Support

Since 2008, Komatsu has been engaging in collaborative e orts with the Japan Mine Action Service (JMAS) to support the demining ofanti-personnel landmines. In addition to removing mines, we also provide reconstruction work as part of a community development
project. Through the technical expertise and manufacturing knowledge we have gained through our business operations, ourequipment that excel in demining and reconstruction work have been playing important roles.
Our target is to transform landmine infested lands to safe lands, and further on to lands with value by constructing roads and facilities.
Going forward, we will continue to promote activities that contribute to the recovery of the entire regions utilizing our construction
machinery, which is Komatsu's main business.

Mine eld in Cambodia

Landmine blast procedure

DATA

Results of Demining and Reconstruction Support Activities in Cambodia (Cumulative)
Item

Result (Cumulative Total by FY2018)

Demined area

2,028haTotal removal count1,924landmines

Road construction / maintenance69.0kmSchools constructed

8 (which holds about 600 school children)

Ponds constructed

47

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Clearing Anti-Personnel Landmines and Community Development Support

Komatsu's demining machine"KOMATSU" bridge in Cambodia

We started support of unexploded bomb disposal activities in 2016 in Laos.
In Laos, about 36% of the land is riddled with unexploded bombs, many of which are cluster sub-munitions.
This is a problem on a massive scale, with children and farmers su ering bomb-related injuries on a yearly basis.
Komatsu plays its part by o ering the necessary equipment to UXO-LAO (a Lao unexploded bomb disposal squad) and the Japan Mine
Action Service (JMAS) free of charge, alongside engineering support for the machines it provides.
Following the success of the demining machine for anti-personnel landmines we have used Komatsu's past experiences and techniques
to develop removal machines for processing unexploded ordnance based on hydraulic excavator PC130-8, and continue the disposal
activities.

DATA

Results of unexploded ordnance removal in Laos (cumulative total)
Item

Result (Cumulative Total by FY2018)

Demined area

298ha

Total removal count2,751 bombs

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Clearing Anti-Personnel Landmines and Community Development Support

Machine developed based on hydraulic excavator (for processing
unexploded ordnance)

As part of the "Visiting Lecture" initiative, Komatsu employees visit schools in Japan and introduce these activities to a wide range ofstudents from elementary to university levels. As of today, we have carried out lectures for about 5,500 students over a total of 60
times.
We had the pleasure to provide a "Visiting Lecture" at an elementary school for 6th graders. One of the students had this to say: "I heard
KOMATSU's Story today. I realized that there were many landmines yet to be left and Komatsu helped remove landmines to move themsomewhere safe. I was surprised to see that the machines Komatsu provided did not break, even after rolling over landmines. Pleasekeep up the good work until all landmines have been removed in the world." Through this initiatives, Komatsu continues to nurturechildren, giving them opportunities to consider their future and ways of living.

Letter from a junior high school rst grader after a visiting lecture

Scene of a visiting lecture at a junior high school149

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Clearing Anti-Personnel Landmines and Community Development Support

E orts to remove anti-personnel landmines (past activities)

Utilization of construction
machine technology forlandmine removal- E orts to remove antipersonnel landmines First model of the D85MS-15 demining machine being tested in Afghanistan

Anti-personnel Landmines: A Semi-permanent Source of Terror
With the advent of numerous con icts in various areas around the world, an enormous quantity of anti-personnel landmines came tobe laid. Despite the restoration of peace in these con ict zones, the still-armed mines continue to be a massive threat. Un-deactivatedmines claim over 20,000 victims annually, many of whom are ordinary people going about their daily lives or children playing in elds.
The Ottawa Treaty was forged in 1999 in order to resolve this ongoing issue, which provides comprehensive prohibition of the use,
stockpiling, production, and transfer of anti-personnel landmines. With this treaty being signed by over 150 nations (including Japan),we can see validated proof that momentum for the abolition of anti-personnel landmines has spread throughout Japan and the world.
It takes an inordinate amount of time and meticulous attention to detect and remove anti-personnel landmines manually. Cambodia is
an excellent example of this fact; of the 6 million landmines laid during the civil war, only about 350,000 have been destroyed in the 15
years after the end of the war (1992 to 2006, according to the Cambodia Mine Action Centre). Going by this rate of progress, thecomplete removal of landmines would require more than 240 years, which would continue to put both citizens and manual removal
workers at great risk.
With this considered, Komatsu believes that using a machine for this manner of work would minimize the danger of potentially fatal
accidents while dramatically increasing the speed and e ciency of mine removal. This would involve a demining machine that cancrush or explode landmines buried near the surface by scratching at or pounding on the ground. Such a machine would often utilize astructure or functions that are similar to the chasses and attachments used by construction equipment. We are thus con dent that the
specialize technology and experience in manufacturing we have acquired through our business operations in manufacturing
construction equipment will prove invaluable in the development of a demining machine for anti-personnel landmines that is bothe cient and safe.

(left) An anti-personnel landmine has been discovered. Although it was laid almost 20 years ago, many of them are still explosive (Cambodia).
(right) Workers from local NGOs continue to be engaged in extremely dangerous clearance operations (Afghanistan).

Starting along the Path to Development
Back in 1998, Komatsu began development of machines to perform requisite pre-demining tasks, such as the removal of shrubbery. In
2002, the Japanese government approved exports of demining machines for anti-personnel landmines, and in 2003 Komatsu applied
ESG Databook
for the public o ering of subsidies of Japan's Ministry of Economy,150
Trade and Industry and The New Energy and Industrial
Technology2019
Development Organization (NEDO), embarking on the full-scale development of demining machines. In December 2003, we completed

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX(left) An anti-personnel landmine has been discovered. Although it was laid almost 20 years ago, many of them are still explosive (Cambodia).
(right) Workers from local NGOs continue to be engaged in extremely dangerous clearance operations (Afghanistan).

Clearing Anti-Personnel Landmines and Community Development Support

Starting along the Path to Development
Back in 1998, Komatsu began development of machines to perform requisite pre-demining tasks, such as the removal of shrubbery. In
2002, the Japanese government approved exports of demining machines for anti-personnel landmines, and in 2003 Komatsu applied
for the public o ering of subsidies of Japan's Ministry of Economy, Trade and Industry and The New Energy and Industrial Technology
Development Organization (NEDO), embarking on the full-scale development of demining machines. In December 2003, we completed
the production of our prototype.
The base of the machine is a bulldozer with a chassis weight of about 27 tons. In addition to excellent reliability and durability, such amachine has the ability to cover rocky terrain, damp ground, and sloping land quickly and thereby clear even large areas e ectively.
Replacement parts are easy to obtain, and by changing the vehicle's front attachment, the machine can also be used as a bulldozer for
ground leveling operations. It can be used in road construction work and other operations in the future.
Moreover, this machine features remote control technology for construction equipment that has been already proven to have practicalapplications in disaster recovery areas. Through remote operation, the operator's safety can be further enhanced.
Since many countries have now completely abolished the use of anti-personnel landmines, demonstration testing of demining
machines' capabilities must take place in actual mine elds. Komatsu has engaged in thorough testing of the capabilities of ourdeveloped machines in Afghanistan since 2004.
About 80% of Afghanistan's land is arid and mountainous, and during the long period of con ict approximately ten million antipersonnel landmines are estimated to have been laid around the country. Furthermore, antitank landmines can be found in mine elds
in addition to anti-personnel landmines. Demining machines must be able to withstand these even larger explosions while protecting
their occupants, and must be able to extricate themselves from mine elds safely. Tests to con rm the functionality and reliability of thevehicle were conducted repeatedly with great caution, also making use of remote operation technologies.
Field tests began in Cambodia in 2006. The objective was to verify the machine's capability to clear terrain, which, unlike Afghanistan,
features mud ats and areas covered with bushes. The results of the testing showed great promise, with the Komatsu anti-personnel
landmine demining machine succeeding in demonstrating clearance capabilities of 500 square meters per hour on average. This is from25 to over 50 times the speed of manual clearance (although this varies according to conditions during the clearance operations).
Operation of our demining machine for two or three days can produce one hectare of safe land. In Cambodia, converting that land into
elds will enable two or three families to support themselves.

(left) Komatsu's demining machine for anti-personnel landmines rotates rollers with spikes attached (rotary cutters) to crush and explode anti-personnel
landmines in the ground. It operates over a large area of land, tearing up bushes and weeds and transforming the land to look as if it were a eld (Cambodia,
2006).
(right) Practicing wireless operations (Cambodia). The worker operates the machine from behind a protective shield.

The First Machine in Service
What is essential for safe and e cient antipersonnel landmine removal operations is not only the development of vehicles but also
technical training of local operators of the equipment. In the spring of 2004, Komatsu invited people from landmine removal NGOs
operating in Afghanistan to Japan for the rst time and conducted technical training.
Through a single one of our demining machines, we have enhanced interaction among people centered on demining operations. In
addition, through getting to know the countries now working towards reconstruction and interacting with the local communities, a newcommitment has been born within Komatsu that drives us to redouble our already signi cant e orts.
The demining machine for anti-personnel landmines has had its capabilities and reliability thoroughly veri ed and has been deployed
by a local NGO in Afghanistan through ODA funding from the Japanese government since September 2007.
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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data(left) Komatsu's demining machine for anti-personnel landmines rotates rollers with spikes attached (rotary cutters) to crush and explode anti-personnel
landmines in the ground. It operates over a large area of land, tearing up bushes and weeds and transforming the land to look as if it were a eld (Cambodia,
2006). Anti-Personnel Landmines and Community Development Support
Clearing(right) Practicing wireless operations (Cambodia). The worker operates the machine from behind a protective shield.

GRI
STANDARDSINDEX

The First Machine in Service
What is essential for safe and e cient antipersonnel landmine removal operations is not only the development of vehicles but also
technical training of local operators of the equipment. In the spring of 2004, Komatsu invited people from landmine removal NGOs
operating in Afghanistan to Japan for the rst time and conducted technical training.
Through a single one of our demining machines, we have enhanced interaction among people centered on demining operations. In
addition, through getting to know the countries now working towards reconstruction and interacting with the local communities, a newcommitment has been born within Komatsu that drives us to redouble our already signi cant e orts.
The demining machine for anti-personnel landmines has had its capabilities and reliability thoroughly veri ed and has been deployed
by a local NGO in Afghanistan through ODA funding from the Japanese government since September 2007.

(left) In May 2007, people involved in the clearing of landmines in Afghanistan were once again invited to Japan to participate in training. In Afghanistan,there are many people from NGOs who participate in the landmine removal program under the United Nations umbrella.
(right) The rst machine has been deployed by a local NGO in Afghanistan and it has been in use since September 2007.

Further E orts by Collaboration with JMASIn January 2008, Komatsu and the Japan Mine Action Service (JMAS), a nonpro torganization of Japan, signed an agreement to jointly demine anti-personnel landminesin the contaminated regions and reconstruct local communities after demining. JMAS is a
nonpro t organization sta ed mainly by the retired individuals of Japan's Defense
Agency. Owing to their previous vocation, these retirees are possessed of a wealth oftechnical expertise and experiences. Since 2002, JMAS has engaged in clearing landmines
and unexploded ordnances (UXOs), as well as digging wells and providing educational
programs. Its zealous e orts also include the provision of technical personnel incooperation with the governments of Cambodia, Laos and Afghanistan. Komatsu believes
Noji (left), President and CEO of Komatsu,
that the combination of our demining machine technologies and JMAS' experiences and Kunio
and Mr. Mitsuo Nonaka, President of JMAS, at theknow-how should enable faster reconstruction of devasted local communities and thus signing ceremony (in 2008)
make very e ective social contributions.
Based on this agreement, the rst reconstruction project for local communities waslaunched in Battambang, Cambodia in May 2008. Speci c plans for this project call for ourdemining equipment to be rented at no cost to JMAS for speedy demining, and then, thesafe development of agricultural land, digging of wells, building of schools, and repair
and building of roadways and bridges. In addition to lending the demining machine andconstruction equipment required for use in building such infrastructure, at no cost,
Komatsu has agreed to pay the operating expenses of 50 million yen and transportation
cost to Cambodia. Komatsu will also supply replacement parts at no cost. For our next
project, Komatsu is considering a reconstruction project in Africa. Komatsu positions
community reconstruction (which begins with demining) as one of its core activities insocial contribution. In addition to continuing this activity, Komatsu hopes to expand its
e orts to other areas by collaborating with other companies, NGOs, governments,
international organizations and local people.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Promoting Sports̶The Komatsu Women's Judo Club

Promoting Sports—The Komatsu Women's Judo ClubFounded in 1991 as part of social contribution activities during the 70th anniversary of the company founding, the Komatsu Women's
Judo Club is celebrating its 28th year. Since its establishment, a total of 89 athletes have participated in competitions worldwide. The
club has actively engaged in teaching judo at home and abroad, and in welcoming foreign judo competitors, with the goal to develop
and popularize this sport.

Results of Club Activities in FY2018
At the 2018 World Judo Championships held in Baku, Azerbaijan, Japanese athletes looking towards the upcoming Tokyo Olympics in2020 achieved notable success. From Komatsu Women’s Judo Club, Tsukasa Yoshida (57 kg-weight class), expecting to avenge her
defeat at last year’s World Championship where she nished with silver, won her rst match by ippon using her brilliant newaza
technique. In the semi nal, she defeated her rival from their junior years, Christa Deguchi (Canada), after extra time, advancing to thenal round. In the nal, she defeated Nekoda Smythe-Davis (U.K.) with the awase-waza technique, winning her long-sought gold medal
and becoming number one in the world.

Yoshida showed overwhelming strength in the nal

Yoshida defeated Deguchi after extra time in the semi nal

For Miku Tashiro, who competed in the 63 kg category, this championship was her comeback world match after undergoing surgery on
her wrist after the Rio Olympics. Although she made it smoothly to the semi nal, she lost a close match to her rival Clarisse
Agbegnenou (France) and ended with the silver medal. Yoko Ono made her rst appearance in the world championship, competing in
the 70 kg weight class. Although her energy and stamina brought her a number of victories, she ultimately settled for the bronze medal.
Each of the athletes who participated in the individual tournament won medals of di erent colors.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Promoting Sports̶The Komatsu Women's Judo Club

The athletes congratulate one another.

Victory against the winner of the gold medal at the Rio Olympics in thesemi nal

Yoko Ono competed in the 70-kg division for her rst time participating in the World Championships. Her power and stamina reliably
won out through the matches, and she settled for the bronze medal in the end. All the players who participated in the individual
tournament were able to win medals.

Yoko Ono won the bronze medal.

In her rst appearance, she took home a medal.

In the mixed group tournament, the Japanese team was captained by Yoko Ono, the team’s eldest, while Tsukasa Yoshida, who won thegold medal in the individual tournament, led the way. They both kept winning matches and led the Japanese team to their second
consecutive victory.

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Promoting Sports̶The Komatsu Women's Judo Club155

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CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Promoting Sports̶The Komatsu Women's Judo Club

Judo class in Yaroslavl

Judo championship in Chicago

Month

Place

Number of ParticipantsMay

Hitachinaka (Ibaraki)

30

July

Chicago (United States)

150

September

Koriyama (Fukushima)40

October

Yaroslavl (Russia)

150

156

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Performance Data

158

Environmental Education

161

Environmental Accounting

164

Site Data165

Scope of Environmental Data

169

Independent Practitioner's Assurance on Environmental Report 2018171

Amount of CO2 Emissions by Scope3

157

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

SocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Education

Environmental Education
Komatsu is committed to employee education with regards to good environmental practices. Under
our basic framework, provision of education is divided according to two unique categories according
to type; Dissemination of common knowledge falls under the oversight of the Head O ce, whereas
speci c vocational training is managed by respective divisions.

We focused on education for new development and upgrading of environmental internal auditors in FY2018. In addition, environmental
laws and regulations refreshment education was conducted at production sites.
We have updated our FY2014 environmental education program for newly appointed managers, which is now conducted through an eLearning platform.
Despite the fact that we already meet the legislatively mandated quota of personnel with environment-related certi cation, we intend
to implement further training in order to increase this number.

Courses in Environmental Education and Training in Japan (excluding
general environmental courses)
Independent Practitioner's Assurance

Head O ce
No.

Course name

Target1

Newly appointed manager training

2

Participants
FY2015FY2016FY2017FY2018

Komatsu Group newly
appointed managers

168

193

161

171

Training new employees

New Employees(Komatsu and a liates)

333

322

329

369

3

Advanced environmental education(held every two years)

Environmental specialists(Komatsu and a liates)

21

-

-

-

4

Overview of the ISO14000 series

Managers(Komatsu, a liates, andbusiness associates)

-

80

73

36

5

ISO14001 Standard Amendment(2015 Revision)

Stakeholders regarding
ISO14001 amandment

281

79

-

-

158

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Education

No.

Course name

Participants

Target

FY2015FY2016FY2017FY2018

6

Training of internal auditors /Refresher courses

Environmental auditors(Komatsu, a liates, andbusiness associates)

-

61

89

336

7

Explanation of environmental laws
and risksManagers and employees

-

-

-

250

8

Development and manufacturing(introductory)

Development andmanufacturing sta(for second-year
employees)

334

287

249

187

9

Environmental training for
manufacturing engineers

Assistant foremen/
foremen/ manufacturing
engineers/ students ofKomatsu Institute ofTechnology

252

230

226

227

10

Lectures on the environment,
experience-oriented education

Komatsu Group employees

2,729

1,662

1,796

627

11

Education to refresh environmental
understanding(e-Learning)

Komatsu Group managers
and employees

181

229

-

-

Divisions overseeing environmental management at plants
Komatsu and Komatsu Group manufacturing facilities in Japan(including Technology Innovation Center, Field Testing Department)No.

Course name

Target1

Education in the basics of auditing

2

Participants
FY2015FY2016FY2017FY2018

Managers and employees

185

120

90

169

Overview of the ISO14000 series

Managers and employees

996

1,093

559

502

3

Training of internal auditors

Environmental auditors

28

13

61

34

4

Training new employees

New Employees

1,618

1,270

1,866

1,759

159

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Education

No.

Course name5
6

Participants

Target

FY2015FY2016FY2017FY2018Regulatory education and personnel
exchange

Employees (and otherparticipants)

467

217

835

510

Specialist training

Environmental
conservation practitioners(persons involved inregulatory a airs, etc.)

428

435

328

464

* In addition to the education and training courses listed above, Komatsu also held courses dealing with environmental issues intended for sales agents.

Number of Persons Having Environment-related Certi cate
Independent Practitioner's Assurance
Komatsu and Komatsu Group manufacturing facilities in Japan(including Head o ce, Technology Innovation Center, Field Testing Department)

Certi cate name

Number of persons with certi cate*
FY2015FY2016FY2017FY2018

Pollution control administrators247（31）

223（31）220（35）219（35）

Energy administrators

41（9）

41（9）

39（9）

41（9）

Environmental management system
auditors

4

2

2

5

* Figures in parentheses indicate the number of o cers required.

160

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

SocialContribution
Activities

Theme 3 :Growingwith Society

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Accounting

Environmental Accounting
Komatsu fully reports on the content of our environmental accounting systems in order to obtain an
objective and accurate evaluation of our environmental conservation activities.

Environmental Costs (Investments and expenses)
Independent Practitioner's Assurance
Komatsu and Komatsu Group manufacturing facilities in Japan(including Technology Innovation Center, Field Testing Department)

Category
1. Business area cost

(1).
Pollution
prevention
cost

FY2017

Investment*1(millions of
yen)

1,198

(3).
Resource
circulation
cost

Investment*1(millions ofyen)Contents

447

FY2017

Expenses*1(millions of
yen)

2,316

115

Investment for
installation andconversion of
192 pollution
mitigation /prevention
facilities

420

1,052

Investment for
implementing
energy139 conservation
measures(installation ofenergy saving
facilities, etc.)

919

31

Investment forthe
116 reducing
volume of wastematerials

977

Breakdown(2).
Globalenvironmental
conservation
cost

Investment
FY2018161

Expenses
FY2018

Expenses*1(millions ofyen)Contents

2,246

Cost ofmaintaining
equipment for
mitigation /prevention of air
and water
329 pollution and fornoise andvibration
prevention(labor anddepreciation
costs)
Cost ofmaintaining
energyconservationsuch as932 facilities,
cogeneration
systems(labor anddepreciation
costs)
material
985 Waste
processing cost

ESG Databook 2019

Formulating
CSR Themes(Materiality)

Contents

Management ofEnvironmental andSocial Initiatives

Theme 2 :Developing
PeopleTheme 1 :Enhancing
Quality of Life

SocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Accounting

Category

Investment
FY2018FY2017

Investment*1(millions ofyen)

Investment*1(millions ofyen)Contents

FY2017

Expenses*1(millions ofyen)0Additional
investment
0 needed to provide
eco-friendly
product services

21

Investment for
0 beautifying
manufacturing
sites

790

4. R&D cost

356

Investment inresearch facilities
195 for reduction ofenvironmental
impact

19,514

5. Social activity cost

0

0

17

6. Environmental remediation
cost

7

0

178

1,581

643

23,122

2. Upstream/
downstream cost

3. Administration cost

Total

307

Expenses
FY2018

Expenses*1(millions ofyen)Contents

Reduction of the241 environmental
impact of massproduction units
Cost ofmaintaining
environmental
management
775 systems
Cost of creating
green spaces andbeautifying
manufacturing
sites
Cost of R&D
activities to reduce
the environmental
impact of products
Cost of R&D
16,224 activities todevelopenvironmentallyfriendly
construction
equipment
39
Cost of conducting
surveys andremedial
212 countermeasuresrelated to soil andgroundwatercontamination
PCB disposal costs
19,735

1 All gures are rounded o to the nearest million yen.

※162

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Environmental Accounting

Environmental E ects

Independent Practitioner's Assurance

Environmental impact reduction e ects

Komatsu and Komatsu Group manufacturing facilities in Japan(including Technology Innovation Center, Field Testing Department)

Items of environmental impact
CO2 emissions
Water consumption
Waste materials generation

Reduction amount (t/year)

Rate of year-on-year changes (%)

3,841-410,408
1,926

1.9
-12.4
11.8

Economic bene ts
Komatsu and Komatsu Group manufacturing facilities in Japan(including Technology Innovation Center, Field Testing Department)

Type
Energyconservation
Resource
conservation
Waste materials
reduction
Gain on sale ofvaluables
Other
Total

Tangible bene ts
Monetaryvalue*1
Major activities

Avoidance bene ts ofenvironmental risks*2(millions ofyen)of energy-saving
336 Installation
facilities
heating and cooling cost * In FY2018, there were no major
34 Saving
accidents or legal infractions thatby biomass utilisation
would contaminate thePromotionofrecycling
throughenvironment.
44 thoroughgoing sorting* No litigation costs were requiredof scrap, used paper, waste in Japan during FY2018.
429 Saleoil, etc.
7
850

Contribution to pro ts*2

Proceeds from mobile
recycling equipment
Proceeds from value added
due to reduced
environmental impact of
products (engines)*1 Figures are rounded o to the nearest million yen.
*2 Komatsu used statements instead of numeral gures to describe the "Avoidance bene ts of environmental risks" and the "Contribution to pro ts". We
will give further consideration to the interpretation and the understanding of e ciency. The sales amounts of businesses for content presented in"Contributions to pro ts" in FY2018 are as follows:
Mobile recycling equipment business
2.3 billion yen
Engine business199.7 billion yen(Total for intra-Group sales from the Engine Business Division)

E ects on Society *1

Environmental impact reduction e ects
Environmental impact reduction resulting from on-site
recycling methods
Environmental impact reduction resulting from productoperation
Waste components reduction resulting from "Reman"business

Tangible bene ts
Reduction of expenses for processing waste materials
Savings in operating and maintenance costs
Reduction of repair costs*1 We are aware of the potential impacts on society that could arise from the use of our products. Qualitative information regarding the most signi cante ects are referenced here.
163

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Site Data164

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Scope of Environmental Data

Scope of Environmental Data
Komatsu Group Manufacturing Facilities in Japan
Komatsu (parent company) manufacturing facilities, with a focus on the following nine plants
Awazu Plant, Kanazawa Plant [including Kanazawa-Daiichi Plant and Kanazawa-Daini Plant], Osaka Plant [including Rokko Plant],
Ibaraki Plant, Oyama Plant [including Komatsu Cummins Engine Co., Ltd., Industrial Power Alliance Ltd. and GIGAPHOTON, Inc.],
Koriyama Plant, Shonan Plant [including KELK Ltd.], Tochigi Plant, and Himi Plant.
Komatsu Group manufacturing facilities in Japan, with a focus on the aforementioned nine plants and the following two business
units
Komatsu Cabtec Co., Ltd., Komatsu NTC Ltd.

Komatsu Group Manufacturing Facilities Outside Japan
Komatsu Group manufacturing facilities outside Japan, speci cally the 19 business units appearing on the world map below.

Komatsu Group manufacturing facilities, both foreign and domestic: Pertaining to all 30 of the o ces mentioned above.

165

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Scope of Environmental Data166

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Scope of Environmental DataClassi cation

ExhaustDrainage

Item

Calculation Method
CO2 emission = purchased electricity quantity x CO2 emission factor
CO2 emission factor:
Location-based Scope 2 Japan; Ministry of the Environment, Ministry of Economy, Trade and Industry
Emission Factor by Electric Utility Substitution Value
Overseas; 2010 value of IEA CO2 EMISSIONS FROM FUEL COMBUSTION 2012
CO2 emission = purchased electricity quantity x CO2 emission factor
CO2 emission factor:
Japan;Emission Factor by Electric Power Company
Market-based Scope 2
Overseas; 2010 value of IEA CO2 EMISSIONS FROM FUEL COMBUSTION 2012
However, the electricity generated from renewable energy source has zero
emission factors
Purchased product service: Product weight x emission factor + cooperating company
C1
CO2 emission amounts
C2
Capital goods: capital investment amount x emission factor
Fuels and energy related activities not included in Scope 1 and 2: fuel quantity
C3purchased x emission factor on the upstream side + purchased electric energy
amount x upstream side emission factor
Transportation, Delivery (upstream): Fuel consumption (amount) x Emission factor
C4(coe cient according to Komatsu actual result survey)
Scope3
Waste from project: Waste volume x Emission factor (coe cient according to
C5
Komatsu performance survey)
C6
Business trip: travel expenses x emission factor
C7
Employer commuting: commuting expenses x emission factor
C9
Downstream transport: transport volume x emission factor
Use of products sold: Σ (Production volume per product model x Fuel consumption x
C11
Product life)
C12
Disposal of products sold: Product weight x Emission factor
Emission factor
Power of C1/C2/C3, C6/C7/C12: Emission intensity unit database (Ver 2.6) for
calculating greenhouse gas emissions of organizations through the supply chain of
the Ministry of the Environment
C3 Fuel: Carbon Footprint Communication Program Basic Database (Ver 1.01)
C9: Ministry of Economy, Trade and Industry ・ Ministry of Land, Infrastructure,
Transport and Tourism Guidelines for Estimating CO2 Emissions in the Logistics Field
Total for heavy oil, kerosene, light oil and coke:
Sox Emissions
Calculated from fuel quantity x sulfur content in fuelTotal for heavy oil, kerosene, light oil, city gas, and LPG:
NOx Emissions
Calculated from Exhaust gas quantity x NOx concentration
BOD Emissions
Calculated from Wastewater x BOD Average Concentration Measurement Value
COD Emissions
Calculated from Wastewater x COD average concentration measured value

167

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Scope of Environmental Data

Main data, ISO 14001 certi cation acquisition coverage
The coverage rate of main data and ISO 14001 was calculated using the number of people as an index. (However, KMC is not included.)

1. Main data coverage

Data coverage rate at production sites: 96%

2. ISO 14001 certi cation acquisition coverage

ISO 14001 certi cation acquisition coverage rate at production sites: 100%168

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Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Independent Practitioner's Assurance on Environmental Report 2018169

ESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleSocialContribution
Activities

Theme 3 :Growingwith Society

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Independent Practitioner's Assurance on Environmental Report 2018

Supplementary Explanation regarding site visits to buisiness units
1. Buisiness units visited in this review(1) Komatsu Ltd. Head O ce(2) Komatsu Ltd. Oyama Plant

2. Visited to buisiness units take place in a planned rotation. Records for buisiness units
not visited during this review were reviewed at the Komatsu Ltd. Head O ce.

Executing a review at the Head O ce

Points of an Independent Practitioner's Assurance
Komatsu has received an independent practitioner's assurance from Deloitte Tohmatsu Sustainability Co., Ltd. for this Web data, which
is marked by the independent practitioner's assurance logo where appropriate.

170

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
PeopleTheme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDS
INDEX

Amount of CO2 Emissions by Scope3

Amount of CO2 Emissions by Scope3
Independent Practitioner's Assurance
Category

Rate (%)

Summary Data kt-CO2

Scope3 (11)Customer Use

88.7

26,419

Scope3 (1)Manufacturing of Purchasable Goods
Scope3 (2)Capital Goods Construction and others
Scope3 (3)Fuel Procurement
Scope3 (4)Upstream Transportation disposal
Scope3 (5)Waste Transportation
Scope3 (6)Business Trips
Scope3 (7)Commuting
Scope3 (8)Upstream Leased Assets Operation
Scope3 (9)Downstream Transportation
Scope3 (10)Processing Sold Products
Scope3 (12)Product disposal
Scope3 (13)Downstream Leased Assets Operation
Scope3 (14)Franchise Member Companies
Scope3 (15)Investment Management

9.6
0.5
0.5
0.1
0.1
0.1
0.1
0
0.2
0
0.1
0
0

2,871
143
140
36
16
42
25
0
58
0
17
0
0

Total CO2Emission Amount (kt-CO2/year)

100.0

29,769Note: When the gures in each category are rounded or truncated . the amount may not
Coincide with the aggregate of the relevant gures.

171

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CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

172

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

173

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

174

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

175

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

176

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

177

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

178

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People179

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

180

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

181

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

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Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

182

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People

183

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People184

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

Contents

Formulating
CSR Themes(Materiality)

Management ofEnvironmental andSocial Initiatives

Theme 1 :Enhancing
Quality of Life

Theme 2 :Developing
People185

Theme 3 :Growingwith Society

SocialContribution
Activities

Environmental
Performance
Data

GRI
STANDARDSINDEXESG Databook 2019

KOMATSU
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https://home.komatsu/en/