Sustainability Report 2012
Year ended March 31, 2012

Environmental Consciousness of this Publication
This Sustainability Report 2012 is printed on paper approved by the Forest StewardshipCouncil at a green printing certified plant using waterless printing, which is highly effective
in reducing volatile organic compounds (VOC). In addition, the computer-to-plate (CTP)
method of printing is used to eliminate the intermediary materials required for the platemaking process.

Corporate Social Responsibility Department
Administration Division
USHIO INC.
2-6-1, Otemachi, Chiyoda-ku, Tokyo 100-8150, Japan
TEL: 03-3242-1892 FAX: 03-3245-0730
E-mail:kankyo@ushio.co.jp

http://www.ushio.co.jp
1209G -5000S
Printed in JapanSustainability Report 201201

Contents

USHIO unlocks the potential oflight to develop solutions forthe entire planet

Editorial Policy
In choosing the material for this Sustainability Report 2012, we made an effort to reportin greater depth on the correlation between management and corporate social responsibility (CSR) issues. The report was created mainly for the following stakeholder audience, while emphasizing links with our Annual Report and various other media forcommunicating our corporate activities.

1) Approach to Materiality

Today, the world faces global pressure
relating to issues like the environment,
the scale of the human population, andDialogue and the exchange of opinions with our stakeholders guided us in narrowing
down the most important social issues confronting corporations and USHIO’s numerous CSR initiatives.
This booklet reports on issues and initiatives that were judged to be of high importance. Other initiatives too numerous to mention are introduced on the Group’s website.

the need for energy. USHIO believes thatthe power of light is part of the solution.

Approach to Materiality at the USHIO GroupHigh

Company has acquired over decades ofsolutions, in the hope that USHIO, aswell as human society, can continue togrow and prosper.

Importance to stakeholders

developing that technology, to provide

01

Editorial Policy

02

Top Message

05

Feature:Part 1 Healing with Light
Part 2 Phototherapy andExcimer Filters
10

We are using the technology that theoperation, and our skill at applying andC2	USHIO GroupManagement Philosophy

14	 GovernanceHigh

Rank C

Rank B

f
eo
nc
a
rt
po
im
c
si
rin
Int

Rank A

s
tie
ivi
t
ac

Reportingin printed
material		Corporate Governance andCompliance16	 People

Working Together with Employees

Reporting throughweb and other media

Importance to USHIOUSHIO’s CSR

18	 Quality	Relationships with Customers
and Business Partners
High

21	 Society

Relationship with Society2) Annual Report
For detailed information about the USHIO Group’s business activities, please see our Annual Report 2012, and
our Group website.

USHIO Group Management
Philosophy

22	 Environment

	Environmental Activities
24

Business Overview

25

Third-Party Opinion

The Management Philosophy that underpins all activities of USHIO Group employees was revised in fiscal 2004. The new
philosophy retains the spirit of the “Basic
Policy” that was formulated when the
Company was first founded, while also

• Use of Website

recognizing the social issues that have

We provide more comprehensive and detailed reporting on our corporate website.
Please refer to the USHIO corporate website at the link shown below for moredetail on items marked by the following symbol.

emerged with the changing times. Our
Management Philosophy therefore calls us
to “fulfill our corporate social responsibility.”

http://www.ushio.co.jp/en/csr/index.html• Scope of Report
Time period:	This report basically covers fiscal 2012 (April 1, 2011 to March 31, 2012), butalso includes some continuing activities from before fiscal 2011, and some activities in fiscal 2013. Fiscal 2012 and fiscal 2013 are years ended march 31, 2012
and 2013.
Organizations:	All USHIO INC. business sites and Group companies worldwide• The Tri-colored Leaf—A Symbol of the
USHIO Group’s Activities
The Tri-colored Leaf that appears on the cover of thisreport is designed to symbolize the three primary colorsof light in a budding leaf motif that symbolizes the naturalenvironment. At the same time, the design represents
three elements of sustainable management—financial
viability (red), social responsibility (blue), and regard forthe environment (green). Our goal is to grow each ofthese leaves through steady, daily activities, until they
produce a powerful trunk.

02

Sustainability Report 2012

Top Message

In fiscal 2013, we expect the business outlook to remain uncertain. Nevertheless, the
USHIO Group is committed to meeting the targets set in the Medium-Term Vision. We fore-

In fiscal 2012, USHIO sought to embed

cast net sales to increase by 9.9% year on year in fiscal 2013 to ¥165.0 billion. Operating

corporate social responsibility (CSR)

income is projected to rise 12.2% to ¥12.0 billion, ordinary income by 10.6% to ¥14.5 billion,
and net income by 14.3% to ¥10.0 billion.

activities in day-to-day operations bydrafting a CSR Action Plan (Policy)

Medium-Term Vision

designed to clarify CSR issues to be

USHIO announced its Medium-Term Vision in May 2012. In imaging equipment, our task isaddressed. We did this because weto retain profitability in the digital cinema business while spurring growth in the non-cinema

recognized that CSR is going to become

business, which will drive future growth. In optical equipment, our range of products sup-even more critical to business activities.

porting the manufacture of LCD panels, semiconductors and high-precision PCBs are posi-This perspective is especially important intioned as growth drivers. We are also quickly considering ways to establish ourleading-edge lithography business (EUV) for use in next-generation semiconductor manufac-

fields where USHIO is enacting long-term

turing, and have this contribute to profits. USHIO is also aggressively developing operations

initiatives in pursuit of future growth.

in fields connected to social issues such as medicine and the environment. By enacting
these measures, we are aiming to achieve net sales of ¥200.0 billion and operating incomeof ¥25.0 billion by fiscal 2015.

Vision for the USHIO GroupThe objective of this new Medium-Term Vision is to establish the USHIO Group as the “Light
Innovation Company” with the world’s No. 1 technology and branding in light-related business, able to propose solutions that fully satisfy customers’ needs at all times. Essentially, we
have taken it upon ourselves to search for ways to use light to address new factors, explore
new fields and develop new solutions for customers.
Our efforts in electronics over the years have seen the Group offer products in response to
demands for new processes and functions. Growth for the Group has always come in stepwith new applications for light and new light-related products. The USHIO Group remains
committed to meeting light-related needs in the fields of video and imaging. At the sametime, from a long-term perspective we are proactively addressing areas such as the environ-

Results of Operations and Future Outlook

ment, medicine and biotechnology, as well as fields that seek to resolve social issues. What-First up is a look at USHIO today in terms of business performance. In fiscal 2012, net sales

ever our customers or the public truly needs, our vision for the USHIO Group is that we will

increased by 3.4% year on year to ¥150 billion. Operating income declined by 23.8% tobecome a “Light Innovation Company” able to meet those needs first.

¥10.6 billion, ordinary income fell 24.5% to ¥13.1 billion and net income was down 8.7% to¥8.7 billion.
The main factor supporting sales growth was a strong surge in the equipment business,and in particular, a 14% year-on-year rise in sales of imaging equipment.
However, the market for light sources stagnated, and the equipment business wasaffected by a slump in the electronics industry in Japan. The situation was exacerbated by
rapid yen appreciation, particularly in the early autumn, which depressed profits at all levels.

Net sales

Operating income/Operating income ratio(Billions of yen)
200

(Billions of yen)
20.0
20

150

148.1

145.1
120.8

150.0

(%)
20

(Billions of yen)
20

(%)
12

9.4

15

14.0

13.5

15

15

10

10

9

15.4

119.0

100

10

9.7

10.6

8.9

6.2
4.7

7.2

Financial Performance(Millions of yen)

2008

2009

2010

2011

2012

Net Sales

148,148

120,846

119,079

145,125

150,087

Operating Income

20,050

8,963

7,262

14,034

10,696Net Income

15,486

3,481

7,071

9,577

8,748

9.4

2.3

4.7

6.2

5.6

Return On Equity (ROE) (%)

Net income/Return on equity (ROE)

Years ended March 31

5

50

7.4
6.1

7.1

5

5

2.3

9.5

5.6

6

8.7

7.0

3

3.4

0

2008 2009 2010 2011 201202008 2009 2010 2011 2012

Operating income (left scale)Operating income ratio (right scale)Years ended March 31002008 2009 2010 2011 2012

Net income (left scale)
Return on equity (right scale)

003

04 Top Message

Sustainability Report 2012

Feature:Vital Human Resources for an Era of Transformation
The diversification and globalization of market needs has gained momentum over the past
several years. As our markets spread to emerging countries across Asia and beyond, this			

Healing with Light
part
Part 2	Phototherapy andExcimer Filters

part 1

radically different environment has the potential to generate completely new needs. This landscape requires people capable of experiencing and offering firsthand feedback on thischange, and connecting this to the development of products through cooperation between
Japan and local markets, and to business. Looking at the Group as a whole, there are

Yuta Hanamoto is a typical fifth-grader who loves bugs, books andplaying Pokemon™, and lives with his parents and older sister.

already more foreign workers in our ranks than Japanese staff. Promoting diversity therefore

One morning when Yuta was in first grade, his parents noticed

is crucial to creating new possibilities and realizing growth.

something peculiar as Yuta prepared to go happily off to school.

I believe that we live in an era today not simply of change, but of transformation; and thatthe ongoing globalization we see is just one aspect of this. This means, of course, thatmany of the ways that things were done and conceptualized before are no longer effective.
But it also means that we live in a time when minor improvements and changes are simply

They saw that the area around Yuta’s mouth had a dull, whitish
appearance. Thinking his face was just a little dirty, Yuta’s motherproceeded to wipe it, but to no avail.

not enough. Through a CSR perspective, USHIO committed to creating new value and driv-

After visiting a dermatologist, Yuta was diagnosed as having

ing ongoing transformation and change to meet the expectations of our customers and of

vitiligo, a condition in which white patches form on the skin. While

global society.

phototherapy was known to be an effective treatment, previous
devices used for the therapy carried the danger of exposing
healthy skin to ultraviolet rays as well. “Because our son was still

October 2012

so young, we were worried,” recalls Yuta’s father. “We were thenintroduced to Yahata Municipal Hospital in the city of Kitakyushu,
where they had a phototherapy device that had minimal side
Shiro Sugata
President and Chief Executive Officer

effects even for small children.”Looking back on that time, Yuta’s father recalls the therapy sessions. “At first, we had to take him to the hospital once a week.
The treatment itself only took about 10 seconds, but it took us 40
minutes to drive there. So that was tough. But about a month after

What the USHIO Group Should Aim For
Aim to become a “Light Innovation Company” with the world’s No. 1 technology and branding in light-related businessable to propose solutions that fully satisfy customers’ needs at all times.

Once the redness left, his healthy skin color returned. The times
between his treatments have also gradually gotten longer, and now
he only needs to go in once every six months.”

Medium-Term Vision
FY2015 Quantitative Target

Key Business Strategies

Net sales

Imaging Equipment Ensuring profits in the digital cinema business
Growth and expansion of the non-cinema business (growth driver)
Optical Equipment	Provision of products that underpin the manufacturing of LCD panels, semiconductors, and high precision PCBs (growth driver)		 Lithography tools: Synergy with ADTEC Engineering		Equipment for LCD panel manufacturing: Expansion into fields other than largesized TVs
		 Sales expansion of new processes	Establish leading-edge lithography business (EUV) for the manufacturing of nextgeneration semiconductor products
Others
New products and businesses (medical, life science)
Solid-state light sources
Promotion of business alliances, joint ventures, and M&A¥200.0 billion

Operating income ¥25.0 billion
ROE More thanthe first treatment, the white spots on his skin began turning red.

10%

“Yuta is growing up nice and strong,” says Dr. Fujino with asmile. The dermatologist has been treating Yuta since first grade
when his symtoms first began. “Both parents are always with him
for the long trip in. Yuta has a very loving family, and they are
determined to overcome this together.”
Today, Yuta is completely absorbed in playing videogames withhis friends. When asked what it’s like to undergo the treatment, hereplies with a laugh, “It doesn’t hurt at all.”05

06 Feature

Sustainability Report 2012

Part 1

Interview with a Doctor

Healing with Light

Perspective from a clinical setting

Are you familiar with autoimmune diseases? These ailments are considered a typeof allergic reaction, and many people suffer from them. With autoimmune
diseases, instead of attacks by outside bacteria, viruses and other microbes, aperson’s own normally protective immune cells (white blood cells) suddenly begin
Yahata Municipal Hospital(City of Kitakyushu), Dermatology Dept.

that use light have had great success in combating these vexing illnesses.

Attack on Friendly Cells byWhite Blood Cells

UV Phototherapy
to Treat Skin Allergies

Two Mechanisms behind UVPhototherapy

Until recently, skin allergy ailments weretreated mostly with prescription medication or topical agents. However, concern
arose over the limited effectiveness ofthese approaches, which was often
accompanied by unpleasant side effects.
UV phototherapy has thus been drawing
increasing interest in recent years.

Taking one type of skin allergy, psoriasis,
as an example, there are two mechanisms behind how UV phototherapy
works. The first is the destruction of theoveractive white blood cells, the directcause of the condition. The second
involves increasing the number of a different set of white blood cells, called regulatory T cells, that help deactivate their
trouble-causing counterparts. In otherwords, UV radiation has an immune suppressing effect that reduces the number
and attack strength of white blood cells
that have begun attacking the body’s own
cells, thereby mitigating the symptoms.

Hay fever, hives and atopic skin inflammation are all commonly known allergic
reactions. In recent years, however, awhole spectrum of illnesses and conditions are now known to actually be typesof allergic reactions referred to as autoimmune diseases. These include conditions once classed as skin ailments,
such as vitiligo, psoriasis, alopecia areata(autoimmune hair loss), and palmoplantar pustulosis (a form of psoriasis affecting the palms and soles of the feet), toconditions with vastly different symptoms, such as rheumatoid arthritis.
But why should what is basically anallergic reaction (autoimmune diseases)
trigger so many illnesses that at firstglance appear to be completely unrelated disorders sharing virtually none of
the same symptoms? The reason for thisis that when white blood cells, which
normally protect the body, become
overactive, they mistakenly begin to
attack the body’s own cells.

Vitiligo is thought to afflict some 100,000
people in Japan. In this condition, whiteblood cells lose control and begin
attacking melanocytes, the cells that
produce pigment for the skin. The attack
causes these cells to lose their functionality and to stop making pigment, leading to the condition’s telltale symptoms.
Similar attacks on the cells that make up
hair follicles in alopecia areata (autoimmune hair loss) and the synovial membrane of the joints in rheumatoid arthritis
are the mechanism behind the symptoms associated with these disorders.

Ordinary Immune Function

Internal/Eternal factors

White blood cells lose control!

s
Viru

Virus
Viru
s

WBC
Chemicals

Skin

Completely different symptoms
depending on which cells are attacked

WBC

k!

Attac

co/
Tobachol
alco

WBC

W

BC

k!!
ac
att

Virus

Diet

WBC
B

B

[Immune cell]

B

B

WBC: white blood cells
B: body cells (Melanocytes, synovial membrane cells, hair follicle cells, etc.)

OthersAttack on hair follicle

B

B

UV

UV

Attack on synovial membrane cells of thejoints cells

UV radiation

UV Rheumatoid
arthritis

att

UV

!!

attack

UV

UV
BC

WBC

B
B

ck!!

atta

WBC

UV radiation
GO!

Vitiligo

B

Virus

All UV light is not the same, however,when it comes to phototherapy. Indeed,
it is widely known that UV light contains
components that can be harmful toliving tissue. As a result, there was aneed for a phototherapy device that wassafe and easy to use, and could stably
bathe an affected area solely in wavelengths of UV that would enhance therapeutic effectiveness while minimizing
any side effects.

Treatment of psoriasis via UV therapy

pigment

WBC

s
Stres

Attack on melanocytes that produce skin

The Key is Wavelength

W

Hair loss
B

ack

B

WBC

WBC

!!
ER

NN
WI
B

？

!!
B

Some Commonly Known Illnesses Are Allergies

Dr. Masayo Fujino, M.D.

B

UV

s

!!
t o p WBCB

B

to attack the body itself, causing symptoms to emerge. Therapeutic approaches

The root cause of vitiligo is still unclear, making it one of the more difficult skin ailments totreat. Although there is no pain associated with the condition, its symptoms are plainly visible
to the eye. In many ways, this makes the psychological burden associated with the illness
more challenging than the condition itself. While oral and topical medications have been
available for treating vitiligo, these treatment options often yield little success. When I
decided to install a phototherapy device as another treatment option, I chose one from
USHIO. Since the product is made in Japan, the level of UV radiation used is optimally suited
to the skin quality of my patients.
Even so, I initially had doubts about whether the therapy would actually work. But afterusing the system, I can now say that it has performed above and beyond what I ever imagined. The blending between the spot-affected area and healthy skin is extremely good, andpatients are always pleasantly surprised that the treatment is over so quickly.

B[Regulatory T cells]

The purpose of this information is to intuitively explain general medical information to a broad audience; it is not intended as a testimonial of effectiveness.

07

08 Feature

Sustainability Report 2012

Part 2

Interview with a Doctor

All for the Sake of Patients

Phototherapy and Excimer Filters

Insights from the developer

Phototherapy utilizes the immune-suppressing effects of UV light to quell skin
symptoms arising from an excessive immune response. Since the 1970s, when
researchers at Harvard University discovered that UV radiation could effectively
treat psoriasis, UV light in the 311-nanometer (nm) band has been the mostcommonly used wavelength for treatment.
potential side effects had largely remained a mystery. And while the existence ofDepartment of Geriatric and Environmental Dermatology,
Nagoya City University Graduate Schoolof Medical Sciences

relatively more effective wavelengths was suggested, the research did not extend

Dr. Akimichi Morita, M.D.

In fact, though, the approximate effectiveness of a particular wavelength and its

Although phototherapy is much more widely known today than it once was, there are still
many patients out there who would benefit from UV phototherapy, yet have given up on
treatment because they believe their condition to be intractable. Nothing would be moregratifying for me than for those patients and the physicians involved in their treatment tochallenge these tough disorders again by giving this more advanced phototherapy
approach a try.
Because phototherapy devices are a type of medical equipment, the dependable quality
and maintenance and support structures are very important. With the excimer light, we haveleveraged precision technology to create the world’s first 308-nm excimer light and excimer
filter. The result is a safe device offering the most effective light for treatment possible. Effectively, we have made a treatment once deemed impossible a reality. I’m proud that we canpresent this feat of Japanese engineering to the world.

to determining which specific wavelengths had a strong effect.

Identifying Light with Greater Therapeutic
Effectiveness and Fewer Side Effects

The same research team applied their findings to an excimer
lamp, a product that USHIO led the world in commercializing in
the 1970s. The team developed a light source to emit peak
308-nm wavelength, a technologically impossible task when
the lamp was first marketed. The team also successfully developed an excimer filter to block short wavelengths below 297nm, which were associated with the biggest side effects.
Based on the excimer light, in 2008, USHIO created a working phototherapy device equipped with its own proprietary lighttechnology, making safe and highly effective phototherapy areality. This was the birth of the TheraBeam® UV308, theworld’s first device of its kind to have both a 308-nm excimer
light and excimer filter.

Shift 3 nm towards theshorter wavelength side

Excimer light

Conventional
phototherapy

Since its launch, the outstanding safety and effectiveness of
the TheraBeam® UV308 for dermatological use has earned
the device a strong reputation among dermatologists andpatients alike. Today, the TheraBeam® UV308 boasts the top
share of the market in Japan (based on USHIO data). The
device has already won approval for medical use in China

and Taiwan, where it is now being sold. USHIO now plans to
obtain similar approval and promote sales in South Korea,
India and other markets in Asia, as well as in the UnitedStates, Europe and elsewhere around the world. These products will enable both the light field and the position of thedevice to be selected more easily depending on the size andlocation of the target area of the body.

Shorter
wavelengththanconventional
phototherapy
Sales Areas for TheraBeam® UV308

Wavelength (nm)Balancing safety and effectivenessExcimer light (no excimer filter)
Excimer light (with excimer filter)

Relative value

Original Excimer Filter Based on Light
Technology

Wavelength comparison

Relative value

A joint research team from USHIO and the Nagoya City University Department of Geriatric and Environmental Dermatology (Prof. Akimichi Morita) decided to tackle the challenge ofidentifying the optimal treatment. In searching for light thatwould enhance therapeutic effectiveness with fewer side
effects, the team concluded after a detailed analysis of wavelengths that the most effective light is at a wavelength of 308
nm, where effectiveness peaks. They also determined that
cutting wavelengths below 297 nm reduced skin redness andother side effects.
While just 3 nm shorter than the 311-nm wavelength conventionally used, there were now grounds to expect that thispreviously unidentified wavelength could eventually make more
effective therapy possible.

From Japan to the World

Removewavelengths
where side effects
outweigh
effectiveness withthe excimer
filterWavelength band withstrong side effects

Highly effective
wavelength band

Wavelength (nm)

Kobayashi K, Morita A et al, Photoderm Photoimmunol Photomed 25; 30-36, 2009 lready introduced: Japan,A
China, Taiwan
Pending introduction: South
Korea, Singapore, Thailand,
Indonesia, India, Myanmar

09

10

Sustainability Report 2012

http://www.ushio.co.jp/en/csrprogram (Toward Realizing a Sustainable Society)

USHIO’s CSR

CSR Promotion Framework
USHIO has established a CSR Committee, which is chaired by
the president. The committee decides on policies for the whole
Company relating to CSR initiatives. The CSR Committee
establishes subcommittees as needed to oversee practicalimplementation of the policies it has decided, and discusses
specific initiatives and ways to promote them.
CSR Promotion Framework

CSR Committee(Chairperson: president)

United Nations Global Compact’s Ten
Principles
USHIO has declared its support for the United Nations Global
Compact of principles concerning human rights, labor standards, the environment and anti-corruption. We have joined
the local UN network supporting the compact, Global Compact Japan Network, and have taken an active role in various
sectional activities, including our involvement in co-sponsoringa .proposal on supply chain management as one of the participating companies.

CSR
Department
Separate subcommittees
for each initiative

UGN

Group
companies

Business divisions

United Nations Global Compact’s Ten Principles and Our Initiatives
United Nations Global Compact’s Ten Principles

Human
RightsLabor
Standards

Approach to Corporate Social
Responsibility (CSR)
We consider it natural that a corporate citizen should observe
laws and regulations, contribute to society, and take steps toprotect the environment. These are the foundations of all corporate activity. In addition, a corporation should build good
relationships with its various stakeholders and advance by
creating and offering new value to contribute to society. This is
the kind of corporation that USHIO is working to become.

Society

Create and provide new value to society
USHIO Group

Build good
relationships

Environment

Stakeholders

Compliance

Anti-­
Corruption

USHIO’s Related Initiatives

Principle 1

Businesses should support and respect the protection of internationallyproclaimed human rights; andPrinciple 2

make sure that they are not complicit in human rights abuses.

Principle 3

Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;

Principle 4

the elimination of all forms of forced and compulsory labor;

Principle 5

the effective abolition of child labor; andPrinciple 6

the elimination of discrimination in respect of employment and occupation.

Principle 7

Businesses should support a precautionary approach to environmental
challenges;

Principle 8

undertake initiatives to promote greater environmental responsibility; andPrinciple 9

encourage the development and diffusion of environmentally friendly
technologies.

Principle 10

Businesses should work against corruption in all its forms, including
extortion and bribery.

The third section of USHIO’s 10 Action Guidelines
sets out clear requirements for respecting basic
human rights for all people, and prohibits unfair
discrimination, among other measures.
e Pages 16, 17
The USHIO Group respects the International
Labour Organization’s Declaration on Fundamental
Principles and Rights at Work. Under the third
section of USHIO’s 10 Action Guidelines, theCompany strives to promote good labormanagement relations, abolish discrimination in
the workplace, and create working environmentsthat are cheerful, safe, and comfortable.
e Pages 16, 17
Section 8 of USHIO’s 10 Action Guidelines
clearly states the Company’s position on actively
working to protect the environment. We also
formulated our 2020 Environmental Vision andare now working to implement Phase Three of theEnvironmental Action Plan.
e Pages 22, 23
Under section 6 of the 10 Action Guidelines,
USHIO strives to prevent corruption and to
conduct fair business activities. We have also
set up a Compliance Committee and the USHIO
Hotline (internal reporting system).
e Pages 15

Glossary
CSR (Corporate Social Responsibility): The responsibility of a company as an entity

Compliance: Literally, compliance with laws and regulations. At one point this was all

UGN: USHIO Green Network. An organization for promoting environmental action and

ILO: The International Labour Organization was established by the 1919 Treaty ofin global society.

the word was taken to mean, but in recent years it has come to include observing theinformation sharing at USHIO Group sites.

Versailles. As an international organization, the ILO works in all countries to improve

Stakeholders: People who are concerned or affected in some way by the decisions

rules and norms of society, and contributing to society.

The United Nations Global Compact: This initiative was set up in 1999 by Kofi

labor conditions and realize social justice.

and actions of an organization. Generally described as people who have a stake in a

Annan, the United Nations secretary general at the time. The Global Compact calls forcompany.

organizations to take practical steps to follow ten principles relating to human rights,
labor standards, the environment and anti-corruption.

11

12 csr

Sustainability Report 2012

Medium-term Planning for CSR

In phase-2, USHIO will delve deeper into its CSR priorities
to fuse the relevant initiatives together with each businessactivity aimed at enhancing the Group’s value chain.

Since 2009, USHIO has formulated medium-term plans inpromoting its CSR initiatives. In the first phase of planning, we
identified the CSR issues USHIO should take up by conducting
awareness surveys among the management tier and questionnaires with our employees at large and promoting dialogue
with NGOs and knowledgeable experts by taking advantage ofthe seminars on the UN Global Compact we conducted. The
results of the prioritization of CSR issues and initiatives inphase-1 were announced publicly in fiscal 2012 as a CSR
Action Plan and fed back for implementation in the businessplan of each division.

Formulation of a CSR Action Plan
From fiscal 2012, USHIO has created a CSR Action Plan
(Policy) and taken steps to reinforce its CSR initiatives. The
plan covers items classified under the five pillars of governance, people, quality, society, and environment. These items
are then broken down further into action policies.
Fiscal 2013 will be a year in which we strenuously promotethese respective CSR initiatives within our business confines.
As such, we will treat the CSR Action Plan as a guiding principle for fitting in our five CSR pillars harmoniously with thebusiness plan and momentum of each division and department.

CSR Activities through the Value Chain

CSR Issues
ISO 26000 core subjects, 10 Principles of the U.N. Global Compact, etc.

Company Infrastructure(Human resources, accounting and finance, management planning, public relations and IR, etc.)

Value
Product
planning

Product
designProduction
planning

Procurement Manufacture

Qualityinspection

Formulation of a CSR Action Plan under the Five Pillars

GovernancePeopleQuality

Establish a compliance system thatencompasses international standards inglobal corporate activities, work to
publicize CSR related information andestablish stakeholder communication,and strengthen and enhance the governance framework

Considering workplace environments,
human rights, and diversity of values inhiring and using human resources

Initiatives to meet the needs of customers, shareholders, and business partners based on observance of market
rules, and regulations

IssuesIssuesIssues• Promulgation throughout the company• Internal control• Global measures• BCP• Compliance and ethics• Building information security systems• Fair and impartial business activities• Protecting property rights• Human rights• Promotion of diversity• Promotion of work-life balance• Health and safety• Human resources• CSR procurement• Quality•C reation of solutions to meet new social needs

Fiscal 2013 Action Policies

Fiscal 2013 Action Policies

Fiscal 2013 Action Policies• Promotion of risk management• Take steps to promote observance of laws andregulations• Build information security systems• Protect and make strategic use of intellectual
property• Formulate a business continuity plan•F
 ormulate a human resources plan looking
three-years into the future(Promote human resources, employee composition, and diversity to match future strategies)• Promote work-life balance• Reduce total work hours• Promote health and safety measures•P romote initiatives to increase customer
satisfaction and quality in addition to achieving
sales and profit targets• Strengthen supply chains (Promote CSR andgreen procurement)• Formulate an approach for solving social
issues through core business (product andservice) capabilities, and a business promotion
plan for Asia and other emerging markets

Sale anddeliverySociety

Environment

Medium-term Planning for CSR Goals and Roadmap

Phase 3Complete integration of management strategy with CSR issues
Link social issues with management
strategy, clarify the relationship withthe medium-term management plan

Development of CSR
Activities

Phase 2

2011

2012

IssuesIssuesFiscal 2013 Action Policies

Form an infrastructure for CSR initiatives, gather information
Determine important issues using in-house opinion surveys anddialogue with experts
Decide upon issues that relate to the five pillars of CSR initiatives

2010

Engage in corporate activities to protect
the environment. Strive to meet both
environmental and business needs,
including addressing global environmental problems affecting biotopes•S ocial contribution activities

Dig deeper in to CSR issues
Organize social issues and USHIO
management issues and strategies
Develop action plans for each strategy(Reflect the issues in each department’s
business plans)

Phase 1Engage widely with society at all levels
from local to international, cooperating
and coordinating with other groups incontributing to education, culture,
welfare, development and other aspectsof society

2013

2014

2015

2016 (Fiscal year)

Glossary• Promote social contribution activities(Communicate with local communities andexplore ways to contribute to the world
through our core businesses)• Environment

Fiscal 2013 Action Policies• Promote Phase Three of the Environmental
Action Plan
• Contribute to the environment by reducing
energy and resource costs• Comply with environmental laws and regulations; develop products and markets ahead of
regulatory trends

Value chain: An approach in which the chain of value generated by buying andISO 26000: A global guideline for initiatives regarding organizational social responsibility

Internal control: The process of forming rules for conducting business appropriately

and effectively in the event of a natural disaster or other unforeseen circumstances. The

distribution, manufacturing, shipping, sales and marketing, and services, coupled withpublished in October 2011 by the International Organization for Standardization (ISO).

within an organization such as a company, and ensuring business is conducted in

key is to create frameworks for adapting to the unexpected, rather than attempting topersonnel and labor management, technology development and other efforts that

The guideline was drafted through discussions with representatives from government

accordance with these rules. In the wake of incidents of large-scale financial reporting

respond to the unexpected in a predictable manner.

support these processes, give rise to value in end products and services. The term wasand industry, labor, consumer groups, NGOs and other organizations that began in theand accounting fraud in the U.S., compliance has become an important issue worldwide.

Social needs: Among the various needs in the world today, this refers to needs in public

first coined in the book Competitive Advantage by American scholar Michael Porter.

early 2000s. Unlike previous ISO programs, no certification is required.

BCP (Business Countinuity Plan): An abbreviation for Business Continuity Plan, aor social areas such as the environment, poverty, human rights, welfare and health.

set of policies and plans for continuing business operations and responding quickly

13

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Sustainability Report 2012

http://www.ushio.co.jp/en/governance (Corporate Governance System)

Governancehttp://www.ushio.co.jp/en/compliance (Compliance)

Corporate Governanceand Complianceand the Group’s executive officers. In addition, the USHIO Group
has a business unit structure and an executive officer system for the
purposes of strengthening and speeding up the execution of business operations by the representative directors.

The basic policy of the USHIO Group is to ensure
the transparency and efficiency of the Group’s
management, and increase corporate value to meet

Board of Directors
The Board of Directors comprises a total of 11 directors: 10 internal directors and 1 highly independent outside director. Internal
directors with complete knowledge of the Company’s businessdetails ensure prompt decision making, while the appointment of
an independent outside director strengthens monitoring and helps
maintain the objectivity of management. Based on the Tokyo Stock
Exchange’s rules for protecting general shareholders, USHIO has
filed a notice stating that its outside director is an independent
director who has no conflict of interest with general shareholders.

the expectations of all of the Group’s stakeholders.
To this end, we place the establishment andmaintenance of systems of internal control,
incorporating compliance with laws, regulations,social norms, corporate ethics, and J-SOX
regulations, as a top management priority and makeevery effort to promote these systems.

Corporate Governance Framework
USHIO uses a management structure that includes a Board of
Corporate Auditors. Management and administrative responsibilities
are divided among three governance units. The first is the Board of
Directors, which determines management policies and makes decisions about other matters of the highest importance. The directors
also oversee the management of business operations. The second

is the representative directors, who are responsible for conducting
business operations. The third is the Board of Corporate Auditors,
which is responsible for audits. To assist the Board of Directors inreaching decisions, the USHIO Group has three advisory units thatexamine and discuss management strategies and medium andlong-term management policies with respect to the entire Group.
The units are the Executive Council, Group Coordination Council

USHIO’s Internal Control Framework
General Meeting of Shareholders
Election anddismissal

Election anddismissal

ReportingBoard of Directors

Board of Corporate Auditors

Auditing
Election anddismissal• Appointments
and removals• Supervision

Election anddismissal

Reporting

Reporting

Auditing

Independent Auditing Firm

• Approval of appointments
and reappointments• Evaluation of appropriatenessof financial audits

Reporting

Reporting

Representative Directors

Instructions andsupervision

Reporting about
importantmatters

Executive Council
Group Coordination Council(Deliberation on important matters)

Instructions andsupervision

Reporting about
important matters

Divisions, subsidiaries, and affiliates

Glossary
Corporate governance: This refers to a company’s mechanisms for management
and supervision. Supervision refers not to monitoring for suspicious activity in management, but rather setting targets for management and evaluating performance. In otherwords, a mechanism for ensuring that management is managing the company for theshareholders.

Security Export Control Committee
Corporate Social Responsibility Department
Compliance Committee
Business Auditing Department
including evaluation of theinternal control system

Submitting policy
proposals and plans

Authorization of policy
proposals and plans

Audits by Corporate Auditors
USHIO has a Board of Corporate Auditors with six members that
include three outside auditors who are independent of the USHIOGroup. The outside corporate auditors are professionals in fields
such as finance and auditing. The inclusion of outside corporate
auditors makes it possible to perform audits from an objective andneutral perspective. The board submits reports concerning legallyrequired items and other matters to the Board of Corporate Auditors. Other matters include items that may have a significant
impact on the entire Group, important items concerning monthly
business operations, the status of internal audits and other information that should be reported. The independent auditor submits
an annual auditing plan to the Board of Corporate Auditors andexplains its specific auditing objectives to the corporate auditors.
In addition, the independent auditor provides the corporate auditors with reviews of quarterly and year-end financial reports as well
as reviews of the financial audits and summaries of audit results.
This forms the basis for periodic meetings of the independent
auditors and Board of Corporate Auditors.
Strengthening Business Audits
The importance of internal audits has increased along with theenactment of the Companies Act and Financial Instruments andExchange Act of Japan, and in order to prevent corporate impropriety. Besides compliance audits of laws, regulations and so forth,and assessments of the design and operation of internal controls,internal audits must now also offer proposals for improvement,
serving as a consulting function. At USHIO, we conduct various
audits, including compliance audits and audits of export controls.
To ensure the quality and raise the effectiveness of these audits, wework in close cooperation with the corporate auditors at all times.
The theme and inspection items in our internal audits are derived
from the perspectives of the Company’s business aims and minimizing management risks to make sure that the audits help USHIO
achieve its organizational objectives. To this end, the indications
and recommendations raised by the internal audits are followed
through periodically until the required improvements have beenmade. We will continue to have audits conducted in close observation of actual frontline business conditions with a view to issuingrecommendations for streamlining management, improving busi-

ness operations, safeguarding assets, and improving the management structure while minimizing the risks.
Compliance
It is widely recognized that breaches of compliance can undermine
the very foundations of the public’s trust in a company or government, and carry a risk of significant losses through claims for damages, and sharp declines in sales. At USHIO we have established aCompliance Committee to address compliance-related concerns,
including potential risks, across the entire Group as early as possible.
The USHIO Helpline
The USHIO Helpline has been in operation in
the USHIO Group since October 2006. All
Group employees in Japan can use this hotline for direct communications with individuals
outside the Group to consult or report on
workplace violations of laws and regulations,internal rules, ethics and other standards forbehavior. The hotline allows for quick discovery and correction of improper behavior andprovides access to consultations while protecting individuals who use the hotline fromany negative consequences.

USHIO Helpline poster

Information Security
The use of IT is essential for business activities. On the other hand,
there has been an endless stream of security issues related to IT insociety. Among various others, these include leakage of confidential and personal information, infection from computer viruses,
unauthorized system access, and work stoppages due to system
malfunctions. USHIO acquires and holds a variety of information in
the course of conducting its business operations. We are wellaware of the importance of safeguarding important information
about customers and suppliers. We have established rules for theproper handling of this information and have imposed stringent
requirements concerning the protection of confidential information.
Information security requires three interlocking initiatives: rules
must be determined, a framework must be created for observing
those rules, and awareness must be raised. We have established afunction for automatically encrypting file attachments and a systemfor preventing email address mistakes, along with other systems andrules for program asset management and the like, but on the whole
we are not 100% satisfied with these measures. The awareness ofeach and every employee is essential. So, in fiscal 2012, we will work
to raise awareness by utilizing e-learning tools and other media andconduct information security audits linked to J-SOX audits.
Fair and Equitable Business Transactions
The USHIO Group’s 10 Action Guidelines expresses our commitment to always respecting the position and rights of the otherparty in business dealings, to conducting transactions fairly andequitably, and to not taking advantage of a dominant position to
impose inappropriate terms or conditions. We also promise towork to prevent corruption and carry out appropriate business
transactions in line with socially accepted practices.

15

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Sustainability Report 2012

http://www.ushio.co.jp/en/peoples (Working Together with Employees)

PeopleWorking Together with
Employees
By working to fulfill its responsibilities to society,Work-Life Balance

the USHIO Group aims to create a company

Support Programs
We are committed to developing a working environment thatenables both men and women to balance their jobs and home life
without excess worry. We offer childcare leave and other support
programs that go beyond legal mandates. In March 2009 wecreated the Work-Life Balance Handbook, which contains information on programs for balancing work. It also contains information
on child-raising and maternal welfare, how managers should
respond, and other tips for employees who would use the programs and for their managers. In July 2011, we revised our system
for working shorter hours to extend the eligibility of choosing towork shorter hours until a child is six years old. Moreover, in aneffort to build an environment conducive to supporting genderequality, we uploaded stories of male
employees and their experience with childcare leave for view on our intranet portal.
Consequently, in June 2012 we earned
Kurumin certification under the Act for Measures to Support the Development of the
Next Generation for the third time.

where employees can work with enthusiasm anda sense of purpose. As is clear from the first
item in the Group’s management philosophy:“Build both a prosperous Company andprosperous employees,” this goal has remained
the same since the Company’s foundation.

Respecting Human Rights
The USHIO Group respects the International Labour Organization’s
Declaration on Fundamental Principles and Rights at Work. USHIO
also declared its support for the ten principles of the United
Nations Global Compact in October 2010. The principles relate tohuman rights, labor, the environment, and anti-corruption. USHIO
is promoting initiatives to ensure adherence to them. From fiscal
2011, we began looking into CSR procurement and checking for
the usage of conflict minerals among the Group and its business
partners. Going forward, we will formulate a medium-term planand promote initiatives for working together with our business
partners in raising the level of conflict mineral avoidance.

Diversity
Utilizing Global Human Resources
Overseas sales account for over 70% of the USHIO Group’s total.
Human resources capable of blending in to communicate andunderstand local needs are indispensable in promoting businessoverseas. We are therefore working to develop and utilize global

human resources by conducting
international study programs,
hiring international students,
sending personnel from Group
companies overseas to the parent
company in Japan, and providing
opportunities for interaction
between Group companies.

Employees Using Childcare Leave

Diverse employees and customers
on a visit from overseas

Support for Working Women
USHIO INC. strives to help employees balance their work
responsibilities with having and raising children, which is a major
reason women quit their jobs, and to create a company where
women can work easily. New talent pools are needed in order togenerate new business amid the matured economies of theindustrialized nations. Consequently, the percentage of women
employees in sales and technical positions has more than doubled compared to 2007 in our effort to recruit human resources
without regard to gender.

USHIO’s Work-Life Balance Support Program (Balancing Work and Parenting)Prior to Birth

Birth

Post NatalChildcare• Leave of absence for fertility treatment• Shortened working hours (pregnancy)• Leave of absence for maternity clinic visits• Pregnancy discomfort leave• Paternity leave• Antenatal/postnatal leave
a 8 weeks each

• Childcare leavea Women may take up to two years
leave two times for each child,regardless of whether their spouseis working• Short working hours (childcare)• Excused from work outside of regular
hours, or amount of regular work limited• Amount of late night work limited• Nursing care leave• Childcare leave• Hospital visit leave

Glossary

2010

2011

2012

Men

0

2

2

Women

26

29

27

Total

26

31

29

Paid Vacation and No-Overtime Days
Based on a commitPercentage of Paid Vacation Days
ment to work-life
Usedbalance, we designate(%)
certain days as no100
overtime days andprearrange paid vaca75
tion days to give50
employees time tospend with their25
friends and family or0on their own pursuits
2010
2011
2012
and to help create amore dynamic working environment. We believe that performance improves whenemployees maintain their physical and mental health by taking time
off to relax and rejuvenate.

Occupational Health and Safety
USHIO INC. engages in occupational health and safety initiatives
to maintain a workplace that provides total peace of mind to
employees. Various systems have been established to help
employees maintain their health. Health-related counseling isprovided to employees with health or weight issues identified byhealth exams, and industrial physicians consult with employees
working long hours.

Education and Training for Human
Resources Development
Various training programs have been established to facilitate thedevelopment of personnel capable of acting independently and to
make it possible to align the company’s prosperity with enriching
the lives of individual employees.
In addition, revisions were made to the skills required for eachdivision and type of job, and a system established at each office
which will facilitate training and evaluation of employees.
Regardless of the type of job, all employees are trained todevelop their ability to maintain an awareness of the problem, aproblem-solving approach that is not limited by past experience andthe ability to independently develop and implement new proposals.
Support for Self-Development
Correspondence courses: In fiscal 2011 we had a lineup ofroughly 302 courses on subjects ranging from management tocomputer skills, in addition to basic classes on foreign languages
and technical topics and certification courses. When employees
finish a course, they are paid a bonus. The courses accommodate
the desire of employees to keep learning. In fiscal 2011, a total of
376 courses were taken.
TOEIC testing: TOEIC tests are given to employees who want togauge their English ability and further improve it. The company
pays a portion of the testing fees. A total of 93 employees took thetest in fiscal 2011.
Tiered Employee Training
Mid-career training: Available for employees who have been withthe company for five years and who want to improve their own
abilities. This training focuses on developing the skills to guide andcorrect others when providing on-the-job training, and the ability tocontrol or improve the motivation of others.
New management training: Available for employees who havebeen recently promoted to a level-2 assistant leader position.
Training concentrates on developing the ability to identify or extract
problems in the workplace (within a division, working group orteam), mobilize resources and guide the team to a solution.
New line manager training: Available for employees who haverecently been promoted to a line manager (generally, a department
manager) position. Training focuses on the ability to identify organizational objectives, then lead or manage the department or teamto achieve these objectives, while addressing any obstacles orproblems encountered along the way.
Division manager training: Available for employees who haverecently been promoted to a division (or assistant division) manager position. The training is directed at further improving organizational skills and human relations skills. At present, the content of
this training program is being revised, to not only enhance organizational management skills but also to ensure that managers cankeep their eye on the medium- and long-term strategic goals of
their business and resolve issues in order to meet those goals.

Conflict Minerals: Conflict minerals are gold, tin, tantalum and tungsten mined in the

Diversity: The principle of diversity calls for the creation of organizations that allows

Work-life Balance: This refers to regulating the workplace and the social environment

Kurumin: The Kurumin symbol is used by companies who receive certification fromregions around the Republic of Congo that find their way into products. Under thediverse people to achieve their full potential, regardless of race, gender, age, or beliefs.

to allow people to enjoy full lives while working. The concept extends further than theJapan’s Ministry of Health, Labour and Welfare after creating and implementing an2010 U.S. financial reform bill, SEC registered companies are obliged to report on theirsimple reduction of overtime, calling for initiatives that improve the quality of both work

action plan for supporting employees in childcare, and meeting certain standards.

use of such minerals. This disclosure is required because of concerns that such mining

and private life to achieve synergies.

products are a source of funding for armed groups that are known to commit serious
human rights abuses in the Republic of Congo.

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Sustainability Report 2012

http://www.ushio.co.jp/en/supplier (Working Together with Business Partners)

Quality

http://www.ushio.co.jp/en/customer (Working Together with Customers)

Relationships with
Customers and­Business Partners

Contributing to Society with USHIO Products

Development of Super Green Products

For USHIO, contributing to society through the products of our

Products eligible for certification as an SG product must be themain business is a particularly important initiative, among thebest in their class, while offering superior environmental perfor-

To accurately grasp the needs of our customers,

many we are involved in. In order to contribute to the environ-mance in terms of energy efficiency, extended lifetime, 3R

we think from their perspective, then work as

ment through innovations in product performance, USHIO has

design, materials used, applications and so forth. In addition, theone with our business partners to improve ourbuilt a system for conducting environmental assessments starting

product must satisfy our new USHIO environmental factor*

product development and quality. In this way weat the product development stage and certifying products withrequirement, which was

exceptional environmental performance as Super Green prod-

established to clarify ouructs. As of fiscal 2012, seven products have been certified as

standards following a fiscal

Super Green products.

2009 review of certification

provide products and services with appealing
quality that goes above and beyond therun-of-the-mill.

We are also working to develop products capable of address-

requirements in light of recent

ing problems that must be solved at the global level, in areas such

trends in society. As of March

as medicine, health, the environment, food and energy.

2011, the Group has certified
five SG products, and added
two during fiscal 2012.

Super Green Products Label

Quality Policy
USHIO has created unified quality policies for the entire Group andcontinued its efforts to improve quality.

UPS(USHIO Production System)
UPS (USHIO Production System) is the name of a new initiative
aiming to establish a unique new production system at USHIO’s
Harima Division from fiscal 2011. Amid a rapidly changing business environment, it is important to be able to efficiently supply
high quality products in any environment. To achieve this, we saw
the need to think outside of the box and promote improvementsfrom a broad-ranging perspective by integrating our ongoing UPS,
TPM and TQC improvement activities, rather than repeatedly goingover the same ground. The main thrust of the UPS movement is
ZD (zero-defects) activities, which seek to eliminate defective workby stimulating individual autonomy and enthusiasm among
employees and fostering creative thinking. It is a movement thatconsists of three pillar groups. Namely, 1) the Manufacturing Technology Group for promoting production based on defect-freeprocess completion and the reduction of defects and variable
quality, 2) the Quality Assurance System Reform Group for proposing rules stripped of formalities that focus on effectiveness, and 3)
the Education and Enlightenment Group for implementing systematic training in cutting-edge skill sets and knowledge. Thosegroups are striving to promote initiatives with tangible results infiscal 2013.

Basic Philosophy
USHIO regards product quality as an overriding priority
and will promptly provide global markets with high quality,
safe products and services that are highly reliable andeconomical in order to fulfill the requirements of customers.
Action Guidelines
1. We will act rigorously in putting the customer first andputting quality first, and will develop appealing productswith cutting-edge technology to fulfill the requirementsof customers and earn their trust.
2. We will strive to further improve quality by developing
entity-level quality management systems and continually working to improve their effectiveness in order tomeet the needs of customers.
3. We will work to share information with customers,
make cost improvements, develop new products,
pioneer new markets, and promptly provide global
markets with high quality, safe products that are highly
reliable and economical.
April 1, 2010
Shiro Sugata
President andChief Executive Officer
USHIO INC.

MedicalEnergy(treatment, diagnosis, sterilizationand testing)Light-based medical equipment is
attracting great interest due to its
ability to enhance the quality oflife. USHIO employs the mostadvanced technology to develop
new products used in medical
treatment, diagnosis, testing andsterilization/hygiene.

Light plays a central role in thedevelopment of many new energy
sources including solar power.
USHIO has taken a pioneering rolein the development of new infrastructure and technology topromote a carbon-neutral society.

UV phototherapy
device for dermatological problems

Interior of the bodyvisualization system

Agriculture

Security(cultivation and propagation)
Agriculture faces great challenges
in our modern world to preserve
the safety, quality and stability of
our food supply. By developing
and optimizing man-made lightsources that can be used for
cultivation, USHIO hopes to help
solve global food supply issues.

(hazardous chemicals, surveillance and information security)
USHIO provides products for avariety of purposes including thedetection of pesticides and hazardous chemicals, nighttime
surveillance and security. USHIO
products are also used to prevent
data theft and provide information
security for computer systems.

Lighting systemfor plant cultivation

Light source unit
for plant cultivationand control

Acceleration
testing system
Solar simulator for
testing solar batteries

UV LED projector
Biotip for chemical
detection system

Natural environment(air and water quality)
USHIO has developed light-based
products that help improve water
quality in rivers, groundwater, watersupply and sewerage systems, andpreserve air quality by reducing gas
and particle emissions.

Mercury-free UVlamp for water
disinfection

VUV light source
unit for NOx andSOx degradation

USHIO Light Put to Work in Ballast Water Sterilization (USHIO EUROPE B.V.)
Ballast water is a problem because it impacts marine ecosystems. In order toeliminate this impact, the water must be sterilized, and one method for doing
so uses light. This method has drawn attention for being compact, easy tohandle and not producing chemical pollution. Water treatment using light is
an important technology in all water-related fields. USHIO EUROPE currently
supplies UV lamps and power sources for ballast water as well as control
parts when they are needed. Going forward, the company intends to expand
into a variety of applications, including industrial wastewater treatment, andsupply them to the market as optical solutions to environmental problems.

Glossary
Evaluation Criteria of Super Green Products: The certification standard for Super

Environmental Factor: A comparison of the environmental efficiency of a newly√ [(Energy input)2+(3R volume)2+(Chemical substances content)2]

Green Products is comprised of the following three requirements.

developed product and past products can be expressed numerically as an environ-

Notes: 1. Energy output: For lamps, primarily lighting output and intensity in the1) Environmentally conscious product score of 80 or more (based on environmentallymental factor. Higher numbers represent greater improvements

conscious product assessment standards)
2) Environmental factor of 1.5 or more (calculated in comparison to previous products,
with fiscal 2000 as the baseline year)
3) Attainment of transparency

necessary wavelength range

Environmental factor is calculated by dividing the environmental efficiency of the target

2. Energy input: Energy consumed in using the productproduct by the environmental efficiency of the equivalent product in the baseline year.

3. 3R volume: Product size and weight (quantity of resources used)

USHIO calculates a product’s environmental efficiency by dividing product value

4. Chemical substances content: Quantity of substances with environmental(performance) by environmental impact. Product value is calculated by multiplying
energy output by lifespan. Environmental impact is calculated with this formula:risk contained in the product19

20 Relationships with Customers and B­ usiness Partners

Sustainability Report 2012

Societyhttp://www.ushio.co.jp/en/contribution(Working Together with Local Communities)
http://www.ushio.co.jp/en/society(USHIO Group Support for Culture and Learning)

Relationship with Society
It also runs an educational program for personnel involved in

We shall contribute to the development of

CSR Procurement and Checking for
Conflict Minerals

procurement that covers such topics as Japan’s Subcontract Act,

respective regions where we conduct business

Cooperation from business partners is crucial for USHIO to con-environmental regulations and the Foreign Exchange and Foreign

as a member of the international community.

tribute to the world through excellent products and services. CSR

Trade Act. The program helps ensure that we remain in strict com-

procurement initiatives are intended to build relationships of sus-

pliance with laws and regulations.

tainable coexistence between USHIO, its business partners, andTo help us respond quickly and appropriately to requests andsociety. In fiscal 2011 we conducted a CSR survey of our businessinquiries from customers at overseas sites regarding the environ-partners, and requested that their initiatives be upgraded based onment, joint teams have been established by the Harima Division

the survey results and feedback. As for fiscal 2012, we aim toand overseas sites and measures are being taken to raise the level

improve our CSR procurement initiatives by examining ways ofof our environmental responsiveness.

implementing activities in unison with our business partners. We
have also conducted a survey to ascertain the usage of conflictminerals in components, as part of our due diligence.

Initiatives at the Gotemba Division
At the Gotemba Division, all employees involved in procurementtake a seminar on the Subcontract Act in order to deepen theirLectures at Universities

understanding of it. In addition, the division emphasizes thinking

Lecture on Environmental Concepts(CHRISTIE DIGITAL SYSTEMS CANADA INC.)
Every year since 2009, CHRISTIE DIGITAL SYSTEMS CANADA
has given lectures on environmental concepts at Wilfrid Laurier
University in Waterloo, Ontario. The university is well known for its
outstanding business and economics programs, and has taken aleading role in promoting educational quality by integrating sustainability practices in its education programs. These programs includeunits on ISO14001, sustainable development and environmental
accounting. When students of the lecture voiced a request to see
how environmental concepts were put in practice in a real-worldcontext, CHRISTIE DIGITAL SYSTEMS CANADA responded byorganizing a factory tour.
In 2011, the company invited students in MBA and BBA
courses at Wilfrid Laurier University to attend an orientation lecture
and tour of the company’s facilities. In addition, similar presentations were given to local business leaders, at Communitech Hub.
Lecture on Optical Technologies (USHIO INC.)
USHIO conducts lectures on optical technologies each year at the
University of Tokyo, as part of its involvement in CORAL, the Consortium on Education and Research on Advanced Laser Science.
In fiscal 2011 we gave the lectures for the fourth time, with thelesson in June consisting of a lecture on “methods of generating
light and photochemical reactions,” and practical modules on “thespectroscopy and photochemical reaction of UV light.” A large
number of students researching light participated eagerly in boththe lectures and the practical modules. As part of its contribution
to society, USHIO will continue to support the development ofyoung students who will be the optical technicians of the future.

and acting together with suppliers, and when an issue occurs
related to quality or a missed delivery deadline, it investigates thecause with the supplier and takes steps to address the problem.
As a result of these efforts, we have set targets for making
progress on initiatives to improve on-time delivery by suppliers andreduce non-conformance rates. Moreover, to help us keep in stepwith our business partners, we undertake activities to build mutually beneficial relationships, including supporting their acquisition of
Eco-Action 21 (EA21), and using meetings with suppliers todevelop a common awareness.

Initiatives at the Harima Division
As overseas transactions have increased, the Harima Division has
consolidated the trade operations of the materials division into its
Overseas Support Office, including procurement of parts andmaterials from overseas and supply to overseas manufacturing
sites. The division works to acquire specialized knowledge of laws
and regulations pertaining to overseas transactions, which are
growing increasingly diverse and include national security guarantee regulations and Export Administration Regulations, andaccommodate them in an appropriate manner.

Supplier briefing in progress

Relief Efforts Following the Great East
Japan Earthquake(USHIO Philippines, Inc.)
The Board of Trustees of First Cavite Industrial Estate (FCIE), theindustrial park where USHIO Philippines is located, manufactured
patches emblazoned with the message “Gambaro Nippon—We
Glossary
Due Diligence: Originally this was a financial term referring to general research activities relating to a company, real estate asset or financial instrument targeted for investment or an M&A. In the 2008 United Nations report on human rights issues by John
Ruggie, due diligence was proposed as necessary for corporations to fulfill their
responsibilities regarding human rights. Due diligence is also included in the ISO26000
international guideline on CSR activities as an item for organizations to undertake.

Glossary

Support Japan” and donated 50% of the money from sales ofthese patches to Japanese charities. Every employee at USHIO
Philippines took part in the activity.
Exhibition of Local Products from the Tohoku Region(USHIO INC.)
In March 2012, the USHIO head office and other companies
located in the same office building jointly organized a “local foods
market to support Great East Japan Earthquake victims in
Tohoku.” Donations collected at the venue, were given to NPOs
involved in the recovery effort in Tohoku via the Japan Philanthropic Association.
At the USHIO Festival, held during July at the Harima Divisionand the Gotemba Division, an exhibition was held of local products from the earthquake-hit Tohoku region as a way to support
its recovery. Donations collected at the Gotemba Division weresent to the ­Japanese Red Cross Society by the USHIO Festival
executive committee.

The USHIO Foundation
The USHIO Foundation was established in 1994 to commemorate
the 30th anniversary of the founding of USHIO. Its purpose is tocontribute to the development of human resources, learning andculture. The foundation was designated as a public interest incorporated foundation by the Japanese government in April 2011 andmade a new start as the USHIO Foundation. Its main projects
include supporting the development of the next generation ofhuman resources who will be responsible for leading the world in the
future by providing scholarships to assist with their studies, andpromoting further interaction and mutual understanding between
Japan and other countries. In 2011, the foundation provided scholarships to 49 graduate
students (including overseas
students) and 16 students inspecialized courses at colleges of technology. So far,
373 scholarship students
have graduated.

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Sustainability Report 2012

http://www.ushio.co.jp/en/environmental (Environmental Management System)

Environment

http://www.ushio.co.jp/en/energy (Global Warming Countermeasures)

Environmental Activities
The USHIO Group has defined a vision of where

Phase Three of the Environmental Action Plan

it wants to be in 2020, and is strengthening its

Phase Three of the Environmental Action Plan provides the following four environmental themes: environmental management, activities to promote environmentally conscious product performance,
activities to promote environmentally conscious operations, andenvironmental and social contribution activities. The plan also setsout 17 specific measures and targets, and sets out four

initiatives to contribute to the realization of asustainable society through its core operations.

environmental issue committees for each measure to promote
activities: a Global Warming Countermeasures Committee, aGreen Products Committee, a 3R Committee, and a Green Procurement Committee. Please refer to the corporate Web site for
information on these activities and results for fiscal 2011.
http://www.ushio.co.jp/en/csr/eco/manage/plan.html

Four Environmental Themes of Phase Three of the Environmental Action Plan
Environmental­management

Activities to promote
environmentally­conscious productperformance·S trengthen environmental
governance·C arbon management

2020 Environmental Vision
The USHIO Group formulated its 2020 Environmental Vision withthe goal of becoming a company able to contribute through its
business activities to the realization of a low-carbon, recyclingoriented society that preserves biodiversity by the year 2020.

Under Phase Three of the Environmental Action Plan, whichstarted in fiscal 2010, we extrapolated back in time from our vision
for 2020, and broke down our vision into a set of specific goals
through a process called “back casting.”· Expand lineup of environmentally conscious products

Global Warming Countermeasures Committee

Green Products Committee

Despite a targeted 2% reduction in emissions from base levels,
emissions increased for a consecutive year by 8.4% in fiscal 2011.
The main reason once again was an increase in production activity
in line with business expansion.
In particular, production increased in Asia, with every plant in
the region exceeding their target by at least 100%. Although thecompany has adopted the stance that energy use should be

USHIO’s vision for the Company in 2020
Low-carbon societyGroup CO2 Emissions and Breakdown

26,78425,1792012
Target:24,92722,721

Recycling-oriented society
20,0002010

Biodiversity-preserving society
Back casting

10,0002013·S
 trengthening global
warming countermeasures·C onserving resources·C hemical substance management system (CMS)·C ommunication withstakeholders· Social contribution activities·P reserve biodiversity

2020
0Base level

2010

2011

Green Procurement
Committee

3R Committee

treated as a cost, with production levels rising it will be necessary
to look for other ways to reduce CO2 emissions. In the future, thecompany plans to adopt alternative sources of energy, and tocontrol CO2 emissions from supply chain activities, in recognitionof the need to establish targets for reducing the CO2 emissions
related to its products. In this way, USHIO is making a concerted
effort in addressing the issue of climate change. On the other
hand, successful measures at each site to reduce power usage
and changes in the product mix meant that emissions per unit saledecreased by 1.5% from the base level.

Introduction of Solar Power Generation
Equipment (Gotemba Division)(tons of CO2)
30,00026,836

Goals and Targets of
Phase Three of
USHIO’s Environmental
Action Plan

Environmental andsocial contribution­activities

Committees for Each Measure Promote Activities

Measures to Reduce CO2 Emissions fromEnergy Consumption

2020 Environmental Vision
Through Lighting-Edge technologies, we will contribute to:creation of a low-carbon society, conservation of resources,
and preservation of biodiversity.

Activities to promote
environmentally­conscious operations

2012

n Base level n USHIO Group n USHIO INC. n USHIO PHILIPPINESn USHIO (SUZHOU) n CHRISTIE DIGITAL SYSTEMS n Other* Top four contributing companies to USHIO Group total CO2 emissions

Glossary
Low-carbon Society: A society that reduces its CO2 emissions to prevent global

Biodiversity-preserving Society: A society that supports a rich variety of life by

CO2 coefficient: CO2 coefficients represent the amount of CO2 emitted per 1kWh ofwarming.

protecting diversity in genes, living organisms, and biotopes.

electricity supplied. The USHIO Group uses the published figures from the respective

Recycling-oriented Society: A society that uses resources carefully, promoting

Back casting: A technique for setting targets by working backward from a future

power companies that supply each site.

sustainable recycling through reuse and other means.

vision to the present.

In January 2012, the Gotemba Division introduced a solar power generation system which has a generation capacity of 100 kWh, and iscapable of generating around 100,000 kWh of electric power per year.
The Gotemba Division has made extensive efforts to promote environmental activities in the past, and had already introduced an electric
power monitoring system and other features to reduce its power consumption. The introduction of a solar power generation system willcomplement past measures to analyze, manage
and reduce power consumption, creating
greater synergy, andhelping to conserve
power on a daily basis.
On sunny days, thesystem generates aroundSolar Power Generation Equipment
60 kWh of electricity.

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Sustainability Report 2012

Business Overview

Third-Party Opinion

Years ended March 31

Breakdown of Sales

Breakdown of Operating Income(Billions of yen)(Billions of yen)

Other Businesses 2%

Other Businesses 2%

Breakdown of Assets(Billions of yen)

Other Businesses 23%

Equipment
Business
63%

Equipment
Business
26%

Equipment
Business
45%

2012

2012

2012

¥150.0¥10.6¥224.4Light
Sources
Business
35%

Light
Sources
Business
72%

Light
Sources
Business
32%

Equipment Business

Light Sources Business

Other Businesses

Imaging equipment

Light Sources Business

Machinery for industrial uses
and others• Digital projectors for cinemas•	Digital projectors for non-cinema applications(control rooms, simulators, signage, virtual
reality, and others)

Optical equipment•	Optical equipment for manufacturing semiconductors, flat panel displays and electronic
components (exposure tools, photo-cleaning
units, photocuring systems, and others)•	UV phototherapy devices and other medical
equipment•	EUV light sources for next-generation semiconductor lithography

Discharge lamps•	UV lamps for manufacturing semiconductors,
flat panel displays, and electronic components•	A range of lamps and industrial LEDs for use incinema projectors, data projectors, officeequipment, illumination, and other opticalequipment•	Plastic forming applications, peripheral
machinery• Industrial machinery and systems• Others

Halogen lamps• For use in office equipment•	For illumination applications (commercial
facilities, stage and studio lighting, specialized
lighting, and others)• Halogen heaters

Sales

Sales

Sales

(Billions of yen)(Billions of yen)(Billions of yen)

100

60

4

80

3
40

60

2
40

Masaatsu Doi
Associate Professor,
Takasaki City University of Economics
Dr. Doi holds a PhD in commerce. He began
his current job in 2009 after graduating fromthe Hitotsubashi University Department of
Economics and completing post-doctoral
research at the Hitotsubashi University Graduate School of Commerce and Management. He
has written several books, including CSR
Keiei—Kigyou no Shakai teki Sekinin to Stakeholders (co-author, CHUOKEIZAI-SHA, INC.)
Social Enterprize—Shakai teki Kigyou no Taitou(co-author, CHUOKEIZAI-SHA, INC.)

1

2011

2012

0

2011

2012

0

2011

Segment Income

Segment Income

Segment Income(Billions of yen)(Billions of yen)(Billions of yen)

6

10

4

2012

0.15

6
4
0.05

2

2011

2012

0

2011

2012

0

Tadashi Taki
We appreciate receiving valuable feedback from Dr. Masaatsu Doi,such as medicine, the environment and biotechnology that will help to

Associate Professor of the Faculty of Regional Policy, Takasaki City

resolve social issues. In that sense, seeing USHIO initiatives to address

University of Economics, on our Sustainability Report 2012.

social needs rated so highly this year is extremely encouraging.

In our Medium-Term Vision, USHIO is committed to becoming a

0.10
2

Response to Third-Party Opinion
Director, Officer in Charge of CSR

0.20

8

0

medical technology, proven to be both safe and highly effective, isa groundbreaking advance for patients suffering from vitiligo andatopic skin inflammation. While business development of this kindin the medical field requires enormous time and cost, the profitside results of these efforts are often harder to realize. Given thissituation, USHIO has decided to take a long-term perspective andaggressively develop business in medicine, agriculture and othersocially vital fields. This strongly suggests that the concepts of
CSR and sustainability run deeply through USHIO’s business strategy. CSR is not limited to compliance or social contribution activities. It includes a determination to be involved in businesses that
address social issues even when short-term profitability may not
be feasible. If the medical equipment business featured in thisyear’s report were presented with a clear example of its position interms of CSR at USHIO, I think it would be even easier for readers
to grasp.
Outside of the featured field of medicine, there are many moreareas where USHIO’s light technology can be leveraged to addresssocial needs. Linking those needs to new innovation requires
fostering human resources who are well-versed not only in optics
and engineering, but also in diverse areas such as medicine andagriculture. USHIO will need to establish an HR development
strategy that takes this into account as it plans for the future.
In closing, I hope that USHIO will build on the culture it has
nurtured over many years with respect to CSR and sustainability to
become a “Light Innovation Company” supported by a wide rangeof stakeholders that addresses issues like those I have mentioned.

20

20
0

For USHIO, the start of fiscal 2012 marked the transition from
Phase One to Phase Two of its CSR efforts. For Phase One, thekey point was to identify which issues emerged during the threeyear period. For Phase Two, the emphasis is on determining which
specific measures to apply and how to apply them. Put differently,
this boils down to determining what the important issues are(materiality) with respect to CSR at USHIO, and the extent towhich USHIO can incorporate CSR into its management activities
going forward. This is the rationale given for USHIO’s release ofaction policies for fiscal 2012 aligned with the “five pillars” of its
CSR Action Plan (p. 13). I later learned that these guidelines were
derived through dialogue at the supervisor level with key stakeholders. From here in, I want to take this opportunity to point out
what I see as two major issues that are likely to emerge.
The first is that although USHIO formulated a Medium-Term
Vision in May 2012, the connection between this vision and
USHIO’s related CSR issues is not entirely clear in some ways. The
incorporation of CSR into management activities should be closely
related to management planning of this kind, and publicizing it
both within and outside the Company is significant and meaningful. The second issue is similar to one I pointed out last year.
Rather than stopping at action policies within a broad framework,
USHIO needs, to a certain extent, to introduce KPI and othermanagement indicators in order to enact these policies at the top,
middle and worksite levels of its organization. Outcomes thenneed to be measured and confirmed across the entire Company. It
is important not only to drive in-house CSR promotion, but also todisclose the status and results of initiatives in ways readily accessible to outside stakeholders in order to gain their support.
In last year’s report, I mentioned expectations for USHIO
around the creation of solutions to meet social needs. This timearound, there is a special feature in the report (p. 5) on the use of
the “excimer filter” light technology in the medical field as an actual
case of the therapeutic use of USHIO technology. USHIO hasdifferent products for each bandwidth of light across the spectrum,from infrared and visible light to ultraviolet. In particular, the development and success of medical systems utilizing excimer lamps in
the ultraviolet band are generating strong expectations for USHIO
going forward.
This business is one of several new ventures that USHIO
launched in the early 2000s with the 2003 establishment of the
New Business Promotion Office. Nearly a decade later, this

2011

2012

To better enhance our CSR Action Plan, we are setting quantitative“Light Innovation Company” able to propose solutions that fully satisfy

action plan targets and will push to enact concrete measures to meetcustomers’ needs at all times. Under this policy, we have sought out

them. We also want every member of our workforce to pursue diverse

growth by delivering new applications for light and light-based prod-

initiatives under a shared sense of value.

ucts. At the same time, we have also been actively engaged in fields

25