S UMITO MO R UBBER GR O U P C S R R epo r t 20172017

3-6-9, Wakinohama-cho, Chuo-ku, Kobe,
Hyogo 651-0072, Japan

Public Relations Dept.
TEL.+81-78-265-3004 FAX.+81-78-265-3113

TEL.+81-78-265-3149 FAX.+81-78-265-3114

http://www.srigroup.co.jp/english/

Certified by
Minister of the Environment
Sumitomo Rubber Industries, Ltd.
has been certified as an Eco-First
company by Japan’s Ministerof the Environment.

1.5A . 17 . 8 . TI PR 34

Contents

03

Business of Sumitomo Rubber Group ........... 03
Performance Highlights ........... 05
Philosophy and Vision ........... 07

09 Creating Value for the Company
Our Top Commitment

and Society

The Sumitomo Rubber Group iscommittedd to making contributioncommitte
contributionss to society
by offering true value in our areas of business:tires, sports and industrial products.

11

Create new value for more comfortable and appealing lifestyles for people all
high-quality products that are both safe and environmentally friendly.
Continuing to be a company whose existence is truly valuable, both for people

Creating Value Corresponding
to Area Characteristics witha Three-Region Global
Management Structure ................ 11
Contributing to the Sustainable
Development of Tires
through Research into One of
Their Main Raw Materials—
Natural Rubber ....................... 15

What we can do to create a sustainable society:over the world through our daily business practices and by providing

Feature Go for NEXT19

CSR Activity Report
Sumitomo Rubber Group CSR Report .......... 19

and for the environment—this is the kind of CSR management that

Materiality characteristics
and dialogue with stakeholders .......... 21

the Sumitomo Rubber Group aims to achieve.

Fiscal 2016 Targets and Results .......... 23

Green
Ecology
Next
Kindness
Integrity

Green Initiative .......... 25
Ecological Process .......... 29

Next-Generation Product Development ...... 33
Kindness to Employees .......... 35
Integrity for Stakeholders ...... 41

Site Report ............. 45
Independent Verification Report /Third-Party Opinion ............. 47
Honors and Certifications from Outside
Organizations /Editorial Policy............. 49

Sumitomo Rubber Group
Tire Business

01

SUMITOMO RUBBER GROUP CSR REPORT 2017

Sports BusinessIndustrial and other products Business

SUMITOMO RUBBER GROUP CSR REPORT 201702

Accelerated Glo bal Expansion
Europe,Middle East
and Africa

Asia,
Pacific

11

27

consolidated
subsidiaries

consolidated
subsidiaries

North America,
Latin America

Japan

4

affiliates

27

consolidated
subsidiaries

78

affiliates

consolidated
subsidiaries

1

affiliate

Breakdown of Sales Revenue by Region
Japan

Others

40.6%

13.8%
Europe7.3%
NorthAmerica

17.5%¥756.7 billion(as of the end of
December 2016)

Asia

20.8%

Business of Sumitomo Rubber Group
Tire BusinessSports BusinessIndustrial and other products Business

Sumitomo Rubber Industries sells its mainbrands of tires—DUNLOP and FALKEN—forpassenger cars, trucks, buses and motorcycles
both in Japan and overseas. Our tires employ
state-of-the art-environmental technologies.

Dunlop Sports Co. Ltd. is our central groupcompany in the manufacture and marketingof golf clubs and golf balls, tennis racquets
and tennis balls, and fitness gym management. We provide golf products worldwide
under the SRIXON, XXIO, and Cleveland Golf
brands, and our tennis products include the
SRIXON and DUNLOP brands.

The Hybrid Business Division of Sumitomo
Rubber Industries manufactures and markets awide range of products, including rubber partsfor medical applications, precision rubber partsfor office equipment, vibration control dampers, floor coating, marine fenders, rubber
water seals, artificial turf for sporting facilities,
rubber gloves, rubber gas tubes and portablewheelchair ramps.

Production factories
Japan (Shirakawa, Nagoya, Izumiotsu,Miyazaki),
China, Indonesia, Thailand, Brazil, South Africa,
Turkey, United States.
Production companies
13 consolidated subsidiaries, 4 affiliates
Sales companies
25 consolidated subsidiaries, 1 affiliate
Tire test courses
Okayama, Nayoro, Asahikawa, United States
R&D facility
Tire Technical Center
USA Technical Center

03

SUMITOMO RUBBER GROUP CSR REPORT 2017

Production factories
Japan (Ichijima, Miyazaki), Indonesia, Thailand,
U.S.A.

Group Overview (as of the end of December 2016)• Company name / Sumitomo Rubber Industries, Ltd.
• Head Office / 3-6-9 Wakinohama-cho, Chuo-ku, Kobe, Hyogo
651-0072, Japan• Establishment / 1909
• Paid-in capital / ¥42.7 billion• Consolidated sales revenue / ¥756.7 billion (IFRS)• Number of employees (consolidated) / 33,792• Consolidated subsidiaries / 73 (of which 27 are in Japan)• Affiliates / 12 (of which 7 are in Japan)

Manufacturing factories
Japan (Kakogawa, Izumiotsu), Malaysia, China,
Vietnam, Switzerland

Breakdown of Sales Revenue by Business Segment

Sales companies R&D facility

Production companies
4 consolidated subsidiaries, 1 affiliate

4.7%

11 consolidated
subsidiaries

Sales companies
4 consolidated subsidiaries

Production companies
4 consolidated subsidiaries, 1 affiliate
Golf Science CenterNorth America R&D CenterIndustrial andother products businessSports business

9.6%

Tire business¥756.7 billion(as of the end of
December 2016)

85.7%
SUMITOMO RUBBER GROUP CSR REPORT 201704

Performance Highlights
CSR-Related Indicators

Main Financial Indicators
Regarding consolidated performance, from the current consolidated fiscal year, the Company has switched from conventional Japanese standards to the application ofinternational financial reporting standards (IFRS). To this end, consolidated figures from prior fiscal years and comparisons thereto are also presented on an IFRS basis.

Sales revenue¥

Business profit

756.7

billion¥Profit attributable to owners of parent

74.9

billion¥41.4

billion

5.2 % decrease

5.0 % decrease

42.5 % decrease

Total assets

ROE

D/E ratio

¥

897.6

billion

9.7

Ratio of equity attributable to owners of parent

ROA

47.8

8.2

%

0.5

%

Overseas sales ratio

33,792607

59.4

Ecology

Cumulative number of trees planted

CO2 emissions (six factories in Japan)

1.66

5,000

millionEcology

Ecology
Ecological Process
E
co

t-CO2
reduction

EcologyEcoEcological Process

Employees at ISO 14001 certified
sites as percentage of all employees

89.4

%

times

%

Number of employees (consolidated)

re Initiative
G reen GGreene Generation Products Development
N ext NNext

Kin
to Employees
Kindness Kindnessnt
for Stakeholders
Integrity IIntegrity

New tire technologies for safer.
more environmentally friendly tires

Global human resources
development

CSR funds (cumulative total)

Development ofsuper grip
nano-fit rubber

Overseas trainee
training trial

¥

41.29

million%increase

Net sales/Sales revenue(Billions of yen)

JGAAP

1,000

837.6 848.7

800

798.5

Ecology

NumberNumberb of trees planted in the
million trees for local forests project

GlobalGl
lobball envi
environmental data

(Billions of yen)(Billions of yen)

(10,000 trees)

100

IFRS
805.0

re Initiative
G reen GGreen

Operating income/Business profit

Net income attributable to ownersof parent/Profit attributable toowners of parent

80

756.7

600

60

400

40

200

20

JGAAP

80

IFRS

JGAAP

77.1

74.3

78.9

74.9

60
53.2

55.8

150
129.8

44.9

2014

Total assets/
Equity ratio/Ratio of equity
attributable to owners of parent

ROE/ROA

2015

2016

2015

Total assets
Equity ratio/Ratio of equity attributable to owners of parent(Billions of yen)

(%)

JGAAP

1,200

973.6 936.2

IFRS
899.6

800

932.4 897.6

90

60

2015

2016

2015

42.5

45.3

48.0

45.3

47.8

30

0

0
2014

2015

2016

2015

2016 (FY)

2014

2015

2016

2015

(Billions of yen)

20.0
15.0

JGAAP

14.3

IFRS
17.5

300

13.3

5.0

8.1

261.9

8.4

8.2

0

203.0

200
100

0.7

2.0
1.5

295.7
260.6

9.7
8.1

IFRS

1.0
0.5

0.6

0.5

0.6

2015

2016

2015

2016 (FY)

0
2014

2015

2016

2015

SUMITOMO RUBBER GROUP CSR REPORT 201724,25720142016 (FY)19,53915,000400,000

10,000200,000

5,000

2013

2014

2016 (FY)

2015

0
2012

2013

2014

2015

2016 (FY)

2012

2013

2015

Int
for Stakeholders
Integrity Integrity

Number of employees using
childcare leave system

NumberNumberNb of alertsaor counseling cases
to compliance counseling room

Number of counseling cases forcustomers by business segment(Cases)Industrial andother products
business(People)

25

24
3

20

24
21
19

15

20
1

23

2

21

2

10

16

15

14

16

5

5

13

6

2012

2013
Women

2014

2015

2016 (FY)

Cases

Sportsbusiness

5,799

Cases

18,365 Cases(as of the end of
December 2015)

9,242

0

0

2016 (FY)

Tire business

3,324

10

10

14

Men

05

786,000

0.5

0
2014

734,000

23,543 23,372

in
to Employees
Kindness KKindness

15
204.2

687,000

21,822

Note: Figures for fiscal 2016 increased substantially due to the additionof the aggregate of six overseas bases (Brazil, South Africa, UnitedStates, Turkey, Switzerland and Germany).

(Times)

JGAAP

400

11.7

9.4

2012

Interest-bearing debt
D/E ratio (Debt-to-equity ratio)(%)

668,000

25,00020,00002016 (FY)Interest-bearing debt/
D/E ratio

10.0
400

2016 (FY)ROE
ROA (Business profit base)600,000

00

2016 (FY)

2014

148.5

800,000

50

20

0

0

139.5

166.1

157.6

(Millions of yen)

100

41.4

40

1,014,000

1,000,000

72.0

86.3

Next-genNext-generation
products
development(CO2 emissions)(t-CO2e)

200

IFRS

e
Products Development
N ext NNext-Generation

E
Ecologyco
Ecological Process

2012

2013

2014

2015

2016 (FY)

Cases

SUMITOMO RUBBER GROUP CSR REPORT 201706

Philosophy and VisionHelping Realize a Sustainable Society
The Sumitomo Business Spirit reflects Sumitomo’s strong sense of mission and commitment to improving society;our business is not only for the benefit of Sumitomo, but for the benefit of the nation and society as well.
We believe that corporate social responsibility (CSR) is simply a matter of putting the Sumitomo Business Spirit into Action,and in doing so we continuously strive to provide world-class value that will help realize a sustainable society.
Long-Term Vision

Group Philosophy

The Sumitomo Rubber Group aims to be known andtrusted as a global corporate citizen that fulfills its
responsibilities to society by seeking the wellbeing of
all of its employees, making significant contributions
to improving both communities and society andcontinuing to offer products that help people achieve
more comfortable lifestyles.
• Meet customer expectations with ever-improving product quality, manufactured based on
careful observation of what is happening in the market.

• Create new possibilities for the future by adapting to changing times while maintaining asound business foundation.
• Make the most of proprietary technologies and advanced research and development tocreate new products and services to meet customers’ changing needs.
• Take responsibility for environmental protection in all of our business activities and continue
to develop eco-friendly technologies.
• Create an attractive workplace that helps employees to achieve their lifestyle needs.

ValuesAction Principles

Integrity & ................... • Customer first• Genchi-Genbutsu• Scientific approach• Continuous improvement
Communication ....... • Get to Know One Another• Face to face communication• Report, liaise and consult on all levels
Set the Bar .................. • Problem Awareness• Set Benchmarks
Higher.......................
• Teach / Learn by Doing (OJT)
Cultivate• Achieve Results through Teamwork
PeopleSoundness

External Environment• Climate change, frequent natural disasters• Stricter environmental regulations• Lower birthrates, aging society• Diversification in consumption behavior• The evolution of cars
• Rapid growth in emerging countries• Price fluctuations for raw materials
and crude oil

07

SUMITOMO RUBBER GROUP CSR REPORT 2017

Aim to be a company that provides
the World’s Best Value in all of our fields of business.

Pursuit of Economic Value

Long-Term Vision Action Slogan

2020 Financial Targets (Japanese GAAP)¥1,200 billion
Operating
Income¥150 billion
Operating
proﬁt ratio 12% at leastROE
15% at leastROA
14% at least
Debt/equity
ratio
0.5 or less
Net Sales

The SRI Way“Integrity and Soundness”“Communication”“Set the Bar Higher”“Cultivate People”
The Sumitomo Business Spirit

Integrity and Soundness
Respect for People
Value Technology
Mutual Prosperity

Growth Engines forAchieving Our Goals / New Challenges

Become a true global player with both high profits and rapid growth.
Pursue increased value for all stakeholders and greater happinessfor all employees.

The Challenges of New Markets
Insatiable Drive for Innovation
Entering New Business Fields
The World’s Best Onsite Operational
Skills, Research and Development
Capabilities and Technical Skills

Pursuit of Social Value

The Best Profitability
in Our Industry

CSR Guideline

G reenGreeninitiative

Ecology Ep rcoocl eosgsi c a l

Next

Next-generation
product development

Kindness Kt oi ne dmnpelsosy e e s Integrity Is tnatke eghr iotlyd ef rosr
Basic Philosophy of CSR

The Sumitomo Rubber Group’s GENKI Activities areenergetic contributions to the environment andcommunities, focusing on being both a trusted
corporate citizen and helping achieve a sustainable society.

SUMITOMO RUBBER GROUP CSR REPORT 201708

Our Top Commitment

Creating Value for Both the
The pursuit of social value, like the pursuit of economic value, isabsolutely essential for a company to achieve sustained growth.
As a core element of Sumitomo’s philosophy, this is an idea thathas been passed down from one generation to the next throughout Sumitomo’s 400-year history.
By continually providing “The World’s Best Value” for all of
our stakeholders, the Sumitomo Rubber Group aims to always bea corporate group that achieves sustained growth while at the sametime contributing to the development of a sustainable society.

Strengthening Our Global Management
System toward the Accomplishment of
Our Long-Term Vision—VISION 2020
VISION 2020 is the Sumitomo Rubber Group’s Long-Term Vision,reflecting our corporate stance as we simultaneously pursue both
economic and social value under our stated goals of “Becoming a
True Global Player with High Profits and High Growth” and “Pursuing Enhanced Value for All Stakeholders and Greater Happiness for
All Employees.” Toward the accomplishment of these goals, wehave chosen “Go for NEXT” as our rallying slogan for VISION
2020 in the hope that it will unite all of our employees around ashared, strong desire to contribute to society for future generations by actively taking on New Challenges. In addition to thisslogan, we have also defined three key Growth Engines to serveas the pillars supporting our overall efforts to take on various New
Challenges: the “Challenges of New Markets,” an “Insatiable
Drive for Innovation” and “Entering New Business Fields.”
In April of 2016, the Sumitomo Rubber Group overhauled our
global management structure, transitioning away from our previous
system, which had revolved entirely around our headquarters inJapan, to a new “Trilateral System” based around three regional
headquarters: our Asia/Pacific HQ, our Europe/Africa HQ and ourAmericas HQ. Moving forward, our Global Head Office in Japan will
provide backing and support to our new regional headquarters as
they operate with a greater degree of autonomy. We believe that thisshift will enable us to strengthen our global management system bygreatly enhancing the speed of our decision-making process, thus
preparing the way for our group to take our next big step forward.
As part of our efforts to take on the “Challenges of New Markets,” we are pushing forward with rapid business expansion indeveloping countries and other growth markets while also striving topromote harmonious coexistence with local communities throughexpanded local recruiting and job creation, reducing the environmental impact of our operations and so forth.

09

SUMITOMO RUBBER GROUP CSR REPORT 2017

Company and for Society
Embracing Our “Insatiable Drive forInnovation” to Provide New Value in Termsof Safety, Comfort and the Environment
In keeping with our “Insatiable Drive for Innovation,” we havebeen actively engaged in research and development activities that
aim to answer the question of “What can tires contribute to theglobal environment?” with a focus on three key areas of environmentally friendly product development—Fuel Efficiency, Raw Materials and Resource Savings. We will continue to provide productsthat respond to these diverse and complex needs with such
advanced technologies as our “ADVANCED 4D NANO DESIGN,”
which combines some of the world’s most cutting-edge researchfacilities and applies them to the task of developing innovative
new materials, and our “High-Performance Biomass Materials
Development,” through which we are promoting the use of environmentally friendly, all-nature resources.
At the same time, we are also devoting considerable effort toresearching and improving natural rubber itself. Thanks to these
efforts, we have succeeded in shedding light on natural rubber’s
biosynthetic mechanism, a breakthrough discovery that may very
well lead to the development of new technologies that will help
ensure a more stable supply of natural rubber.
In this way, the Sumitomo Rubber Group will continue working
to provide new value in terms of Safety, Comfort and Environmental
performance through our ongoing efforts to develop unique andinnovative rubber technologies.
When it comes to “Entering New Business Fields,” we arefocusing our efforts on expanding our Healthcare Business. In particular, having acquired a Swiss manufacturer of medical rubberparts in January of 2015, we are now taking advantage of theHigh Quality and High Performance that we have cultivated on
the Japanese market to deliver safety and peace of mind to medical and caregiving facilities throughout the world.

Contributing to the Creation of a Sustainable
Society by Striving to Be a Truly Valuable
Company with a Strong Sense of Purpose
In order for a company to continue to grow and develop, thatcompany must continually earn and maintain the trust of society by not only fulfilling its social responsibilities as a corporate
citizen, but also through active contributions to the develop-

ment of a sustainable society. This is one of the reasons why
we have established the SRI WAY, which defines the specific
Values and Principles for Action that we wish for all of our employees to practice and exemplify as they go about their
day-to-day work. It is also the reason why we strive to engender a corporate culture in which all employees feel a strong
sense of purpose while creating workplaces with a free andopen atmosphere, where employees can encourage one
another to do their best and set the bar higher together.
Further, guided by our Basic CSR Philosophy and our CSR
Guidelines as encompassed in the acronym “GENKI,” as wellas our CSR Message —“For You, For the Earth”—we are not
only working to fulfill our various social responsibilities in termsof compliance and environmental preservation, but are also
actively applying our advanced technical research and development capabilities toward solving society’s problems and contributing to global progress with an eye toward the next generation. At the same time, we are also striving to develop
products with an emphasis on customer safety and comfort
while pursuing ever higher levels of product quality and economy, as well as enhancing the soundness and transparency of
our management so that we may maintain our integrity and continue to be a reliable corporate group for all of our stakeholders.
In order to continue being a corporate group that provides real value for people, for communities and for society
now and in the future, the Sumitomo Rubber Group will continue to reinforce the foundation of our business and strengthen our group’s horizontal and vertical connections in order tobuild a strong organization that can withstand the changes of
the times as we continue to make extensive contributions tothe creation of a sustainable society.
On behalf of the Sumitomo Rubber Group, I sincerely
hope for and look forward to everyone’s continued guidanceand support. In addition, I wish to say that we would verymuch appreciate your candid thoughts and opinions withregard to this year’s CSR Report.

President and CEO, Representative Director
Sumitomo Rubber Industries, Ltd.

SUMITOMO RUBBER GROUP CSR REPORT 201710

Feature

Establishing an R&D Basein the United States and Expanding
Light Truck Tire Production Capacity

Creating Value Corresponding to Area
Characteristics with a Three-Region
Global Management Structure
Global demand for tires is increasing at an average annual rate of 4%.
This growth rate is driven by tire markets in emerging nations including China.
To provide customized responses to needs that differ by area, it has become necessary to break awayfrom our conventional centrally controlled system headquartered in Japan.
The Sumitomo Rubber Group assigned executives to each of three global bases located in Asia and Oceania,
Europe and Africa, and the Americas, creating a management structure for the promotionof policies aimed at integrating manufacture and sales in each area.
We will attempt to accelerate decision-making and establish close collaborations between the Japan
headquarters and each base to promptly reflect local needs corresponding to the characteristics
of each area into our production and marketing while striving to create a variety of value.

in

USA Factory

USA Tire Test Course

Americas

Enhancing production
capacity in response to
growing demand

TurkeyTurkey Factory

U.S.A.

USA Factory production target

10,000 tires per day(as of the end of 2019)8 consolidated subsidiaries
1 affiliate

The United States Technical Center, an R&D base located inside the
USA Factory, commenced full-scale operations in January 2017. Our
U.S. Tire Test Course added the evaluation of four-wheeled vehicletires to its existing expertise in two-wheeled vehicle tires in March2017. In the future, we will attempt to expand this structure to one
able to design, evaluate and provide feedback locally on new
products promptly incorporating U.S. customer needs.
At the USA Factory, we are promoting the creation of a systemable to quickly deliver high-quality tires that meet customer needs in
the Americas focused on SUV tires, which are increasingly in demand.
We plan to expand passenger car and light truck tire production
capacity from the current 5,000 tires per day (as of the end of 2016),
to 10,000 tires per day by the end of 2019. Going forward, we will
strengthen local production capacity to further shrink lead times andenhance our high added value tire supply capabilities.

Aiming for a Stable Supply Chain
through Local Productionof Truck and Bus Tires in Brazil
The market for truck and bus tires in Brazil is forecast to grow at anannual rate of around 2% going forward. We are promoting
enhancements to our local production and marketing structures toensure a stable supply chain able to respond to this increased demand.
We will establish a production facility for truck and bus tires at
our Brazil Factory, which up to now has produced passenger car andlight truck tires. Production will commence in March 2019 and is
projected to produce 500 tires per day. We plan to expand our
production of passenger car and light truck tries from the current
15,000 per day, to 18,000 per day (as of the end of 2019).

South Africa FactorySouth AfricainEurope/Africa

Preparing for higher demand in
Africa while responding to advanced
requirements in Europe

BrazilChina

Thailandin

SUMITOMO RUBBER GROUP CSR REPORT 2017

18,000 tires per day(as of the end of 2019)

Asia/Pacific

Enhancing product quality andexpanding sales network

11

Brazil FactoryJapan
Brazil Factory production target

11 consolidated subsidiaries

Thailand Factory

Brazil27 consolidated subsidiaries
4 affiliate

Indonesia

Increasing the Value of the FALKEN Brand
To increase value of the FALKEN brand,which has a strong reputation as a highperformance tire, we maintained oursponsorship agreement with Major League
Baseball in fiscal 2016 with the aim offurther increasing brand recognition andpenetration.

SUMITOMO RUBBER GROUP CSR REPORT 201712

Expanding Eco-Friendly Tire Lineup in Asia Where
Environmental Regulations are Tightening

FeatureGermany

Creating Value Corresponding to Area
Characteristics with a Three-Region
Global Management Structure

EuropeTurkeyTurkey Factory production target

30,000 tires per day
Recep Tayyip Erdoğan, President of TurkeyinAfricaNew store
opening(as of the end of 2019)

Europe/Africa

Preparing for Higher Demand in Africa
While Responding to Advanced
Requirements in Europe
Enhancing the Development and Production
Capacity for High-Performance Tires Enabling
Sporty and Comfortable Driving

South Africa

Tire production line (South Africa Factory)

South Africa Factory production target

14,500 tires per day(as of the end of 2017)

We are engaged in ongoing efforts to increase
the value of the FALKEN brand. In addition toincreasing exposure at the Nurburgring 24-HourRace with the entry of two cars in fiscal 2017, we
also maintained our sponsorship agreement with“FC Ingolstadt 04,” a first-tier team in Germany’s
Bundesliga professional football league.

Expanding Stores that Handle FALKEN in Asia
We are opening FALKEN
Pulse stores that handle
the FALKEN Brand in Asiawith the aim of further
penetration of the sporty
brand image and reasonable price.

in

The German automotive magazine AUTO BILD conducts proprietarytire comparison tests. Conducting overall evaluations of 52 different
high performance tire brands based on metrics including handling on
wet and dry road surfaces, braking, comfort and rolling resistance,
the results have a major influence on average European user tire
purchase intention. In 2016, our newly launched FALKEN AZENISFK510 ranked second in this tire comparison test, scoring high overall
in terms of handling, braking, and steering stability at high-speeds.

China agent conference

Asia/Pacific

Enhancing High-Quality Products andExpanding Sales Network

In Europe, we are promoting significant revisions to create a morefunctional development and sales network structure. We plan tocommence full operation of our European Technical Center R&D basein August 2017 to ensure tires respond to high-level needs such as
stable handling even on wet road surfaces and at high speeds. We
will also expand production capacity at our Turkey Factory to 30,000
tires per day by the end of 2018. We will focus efforts on building asales strategy structure for each country throughout Europe, including acquisitions of companies like Micheldever Group Ltd., a major
British wholesale and retail company boasting a market scale second
only to that of Germany in all of Europe.

Tire Performance Highly Rated by Popular
German Automotive Magazine

Promoting FALKEN Tire Performance

Sales in
Australia

Approximately

6,000 stores

Amid heightening concerns over environmental issues throughout
the world, there is an increasing demand for fuel-efficient tires. In
addition to environmental performance labeling regulations
introduced in Japan, the United State and Europe, eco-tire
technology standards were formulated in China, and beginning in
September 2016, a tire labeling system was launched as anindustry voluntary standard. These standards are under consideration for compulsory implementation in the future. Environmental
regulations are expected to tighten in Asian nations going
forward. In response to demand and these laws and regulations,
the Sumitomo Rubber Group will expand its lineup of eco-friendly
tires and attempt to increase its presence in Asia.

Substantially Strengthening DUNLOP Brand Powerand Supply Capabilities throughout China
We are focusing efforts on strengthening brand power andenhancing supply capabilities and sales networks in Asia. Specifically, we will launch new D-Guard retail stores with the aim of
improving the DUNLOP brand image in China. D-Guard provides
management expertise and staff training to ensure the same highlevel of management at all stores.

Expanding FALKEN Brand Concept Shops
and Retail StoresCompared to DUNLOP tires, which have a luxury image, FALKEN is
positioned as affordably priced high-performance tires for which
we are promoting the expansion of retail store networks in China,
India and Australia. In India, more than 1,200 stores handle thisbrand, while in Australia, we have opened specialized FALKEN
Pulse stores in an attempt to achieve further brand penetrationand increase brand value.

handle the DUNLOP
and FALKEN brands

India

China

China

Approximately

1,200

ThailandRetail store in China

D-Guard store in China

stores handle
the FALKEN brands

Building an Efficient Sales Network in
Preparation for Increased Needs forHigh-Performance Tires Expected in Africa
In Africa, four-wheeled vehicle production grew 16.2% year on year,
to 836,000 vehicles*1 in 2015, a rapid rate of growth. Focusing on the
anticipated motorization of Africa in the near future, the Sumitomo
Rubber Group is making an effort to expand sales networks andproduction capacity. At the South Africa Factory, which up to now
produced passenger car and light truck tires, we are expanding
production capacity mainly focused on high-performance tires. This
includes the addition of a facility for the production of truck and bus
tires that will commence operations in July 2018.

Indonesia

Retail store in India

Australia

160

stores handle
the FALKEN brand*1: According to the Japan Automobile Manufacturers Association

13

SUMITOMO RUBBER GROUP CSR REPORT 2017

SUMITOMO RUBBER GROUP CSR REPORT 201714

Feature

Elucidating the Mechanisms Behind Natural Rubber Biosynthesis

Contributing to the Sustainable Developmentof Tires through Research into One
of Their Main Raw Materials—Natural Rubber

The World’s First Successful Attempt to Synthesize Natural Rubber Artificially + The Discoveryof the Enzymes That Are Essential to Natural Rubber Biosynthesis

The Sumitomo Rubber Group is actively engaged in research and development activities that aim to answer the question of“What can tires contribute to the global environment?” with a focus on three key concepts for environmentally friendly productdevelopment—Fuel Efficiency, Raw Materials and Resource Savings. As part of our basic research activities undertaken with an eye
toward modifying existing materials and developing all new materials, we took on the immense challenge of elucidating
the structures and biosynthetic mechanisms of natural rubber. Through these efforts, we have succeeded in shedding light on natural
rubber’s structures and biosynthetic mechanisms in unprecedented detail, thus paving the way for further improvements in tire
performance and opening up new avenues toward ensuring a stable supply of natural rubber in the future. In addition,
this discovery has enormous potential for applications in other rubber-related fields, as well.

Natural rubber makes up about 30% of the mass of a typical tire. Thus,
elucidating the structures and synthesis processes of natural rubber isimmensely important research that may very well lead to further improvements in tire fuel efficiency and wear resistance performance.
One of the results of our basic research has been our success in
shedding light on the mechanisms behind the biosynthesis of natural
rubber. Within rubber trees, natural rubber is formed when special
enzymes link together anywhere from 1,500 to 5,000 small molecules(monomers) to create extremely long chain molecules (polymers).
Although this much has long been known, previous research had been
unable to identify the exact enzymes involved in this process.
Previous attempts to identify these enzymes and observe their
behavior have relied on methods that involved observing the chemical
reactions (polymerization) of reactants in a solution. However, with these
Preparing a Membrane
to Allow Natural Rubber
to Exist Within Water

Recreating the Biosynthesis
of Natural Rubber
in a Test Tube

Technical
BreakthroughTechnology to Analyze Enzyme Functions

Utilizing Rubber Particle Membranes to
Biosynthesize Natural Rubber in a Test Tube

Natural rubber particles are surrounded by a membrane composed of various
enzymes and phospholipids. With the help of our research partners at
Tohoku University, we succeeded in removing the enzymes without
destroying the membrane itself so that we could then add
only the enzymes that we wished to analyze. This
breakthrough allowed us to selectively assess
specific enzymes for the first time.

12

Prepared Solution
Containing Small
Natural Rubber
Molecules

conventional methods, the reactions would cease after linking together
chains of only 15 or 20 monomers, making it impossible to replicate thebiosynthesis of natural rubber or analyze the functions of the enzymes.
Because natural rubber does not dissolve in water, the reactions would
always stop at the onset of the rubber formation process.
In order to overcome this obstacle, we came up with a novel
method: preparing a molecular membrane for natural rubber molecules
to form by allowing monomers to accumulate without exposing thegrowing polymer to water. Thanks to this innovative approach, we wereable to discover that monomers link together to form polymer chains of
1,500 to 5,000 monomers (i.e. natural rubber biosynthesis occurs) only
when three particular enzymes are present. In other words, ourcompany has succeeded in artificially biosynthesizing natural rubber ina test tube for the first time in the long history of rubber science.

3

1 Removing the Original Enzymes
2 Adding Specific Enzymes for Analysis
3 Observing the Newly Formed

Molecules to Analyze Enzyme
Functions

Outside Membrane =Hydrophilic

Monomers

Enzymes(3 Types)

Natural Rubber

Natural Rubber Plantation

Tire Raw Material
Composition Proportionof Natural Rubber:

29.6

Enhanced Natural Rubber (ENR)%

As a company that uses massive amounts ofnatural rubber, the Sumitomo Rubber Group
has long been an industry leader in seeking
ways to enhance the performance andfunctionlity of natural rubber.

15

Advanced Technologies to Enhance the Performance of
Natural Rubber & Balance the 3 Key Contradictory Performance
Traits of Tires
ENR is natural rubber that features superior rolling
resistance. By rearranging part of the chemicalcomposition of natural rubber, we are now able
to give natural rubber the same high level of grip
performance as synthetic rubber.

Three Major
Contradictory
Tire Performance
TraitsBy thoroughly removing all of the impurities
typically found in natural rubber, we are able toincrease the interaction between the rubber andcarbon, thus improving both the fuel efficiency
and wear resistance performance of tires.

SUMITOMO RUBBER GROUP CSR REPORT 2017

Grip
(Safety)

Trade OffUltra-Pure Natural Rubber (UPNR)

Fuel Efficiency(Rolling Resistance)

Inside Membrane = Hydrophobic(Environment Suited for Rubber Stabilization)

Wear Resistance

Adding Specific Enzymes tothe Hydrophobic Membrane
Surface for Analysis

Enzymes React with Natural Rubber
Monomers to Form Long Polymer
Chains Inside Membrane(Strength/Energy
Savings)

SUMITOMO RUBBER GROUP CSR REPORT 201716

Analyzing the Factors That Determine the Processability & Performance of Natural Rubber

Toward More Efficient Material Procurement with Lower Environmental Impact

The Ratio of 4 Types of End Groups Determine Natural Rubber’s Processability & Performance

Selecting Rubber Trees That Produce Highly Processable Rubber to Efficiently Increase Production Volume

Another result of our basic research has been our success in shedding lighton the structures of biosynthesized natural rubber. While natural rubber
has long been thought to have a molecular structure that features
multiple branches, the exact structure of its molecular end groups
remained shrouded in mystery. Because the branching structure of natural
rubber molecules almost certainly has a significant effect on rubber’s
performance, elucidating these structures is an immensely important step
toward achieving the next evolution in rubber.
Thus, the Sumitomo Rubber Group is taking full advantage of ourresearch facility in rubber-producing Thailand to obtain fresh
samples for analysis. After undergoing chemical treatment,
the samples are analyzed using high-performance
instruments and the advanced analysis techniques
End Group 1that we have cultivated through years of

The products of our basic research have laid the groundwork for the
potential discovery of new and more effective ways of producing natural
rubber in the future, such as selectively breeding rubber trees that havehigh latex output or that produce highly processable rubber in order toincrease rubber productivity, or even deriving natural rubber fromplants other than rubber trees.
As global automobile production volume continues to increase
year by year, there are now growing concerns about the environmental
impact of the accompanying increase in tire demand and consequent
expansion of rubber plantations, which may contribute to deforestationand the depletion of essential water resources. The Sumitomo RubberGroup will continue to further various research so that we may
reduce our environmental impact while contributing to thedevelopment of a sustainable society.

rubber research. As a result of our research, we have not only determinedthat one end of a natural rubber molecule is a dimethylallyl functionalgroup, but we have also discovered that the other end group comes infour different varieties. We believe that the combinations and ratios ofthese end groups are among the major decisive factors that determine
the properties of rubber.
We plan to continue working to further advance this research sothat we may discover how each of these end groups functions andwhich combinations and ratios of these end
groups would be best suited tothe task of enhancing
tire performance.

Unveiling Our Research Results at
the International Rubber Conferencein Kitakyushu in October 2016
Before Assembled Rubber Experts
from Around the World

Explanatory Meeting Held in December
2016 for Analysts & Members of thePress Entitled “Cutting-Edge Material
Development Efforts”

FeatureRaw
Material
Procurement

Contributing to the Sustainable Developmentof Tires through Research into One
of Their Main Raw Materials—
Natural Rubber

End Group 3
Of These Four Types of End
Groups, Two (End Group 1,
End Group 3) Contribute to
Branching Structures and
Gel-Forming
End Group 2

Sustainable Procurement of Natural Rubber

Supporting an International Framework Toward
Building a Supply Chain in Harmony
with Society & the Environment

In order to ensure a lasting, stable supply of natural rubber for the future, it is vital that procurement activities take into account such factors as human rights and the environment. With thisin mind, the Sumitomo Rubber Group has long incorporated environmental concerns, community contributions and respect for human rights in our Procurement Guidelines, which form thebasis of our procurement activities when it comes to natural rubber and various other raw
materials. We also demand the same of our suppliers, regularly visiting their processing plants
to conduct quality audits to ensure that our guidelines are being followed.
In recent years, rising awareness has led to growing demands for more diversified andsophisticated considerations when it comes to human rights and the environment, thus requiring ahigher level of responsiveness in these areas than ever before. In response to these trends, theSumitomo Rubber Group announced in October of 2016 that we will participate in the “Sustainable Natural Rubber Initiatives (SNR-i)” advocated by the International Rubber Study Group (IRSG).
We have already begun awareness raising activities, such as explaining the significance of SNR-i toour suppliers when we conduct quality audits at their processing plants and so on.
In addition, we are actively engaged in research that aims to improve productivity, quality
and water resource management at the natural rubber plantations and processing plants
affiliated with our group while also working to implement a traceability system at affiliatedprocessing plants so that we can track raw materials to their point of origin.

End Group 4

Our Natural Rubber Procurement
Sumitomo Rubber Group
Natural Rubber
Plantations

Technical
BreakthroughEnhancing Productivity& Quality
Improving Water
Resource Management
Establishing Traceability

Natural Rubber End
Group (Image)With On-Site Chemical Treatmentof Natural Rubber at Its Source+ World-Class Analysis Equipment & Techniques,

17

SUMITOMO RUBBER GROUP CSR REPORT 2017

Chemical Treatmentof Rubber Sap
Removing Impurities &Excising Complex
Branching Structures
for Ease of Analysis

High-Performance
Analysis Equipment
Utilizing Osaka University’s
Cutting-Edge NMR
Equipment to Detect the
Faint NMR Signals of
Natural Rubber End Groups

Quality Audits
SNR-i Awareness Raising
Activities

Sustainable Natural Rubber Initiatives (SNR-i)

We Have Successfully Identified the Faint NMR Signals of Natural Rubber End Groups
At the Sumitomo Rubber Group’s research facility in
Thailand, natural rubber samples undergo chemicaltreatment to separate out the complex branching
structures and remove impurities before the rubber begins
to deteriorate. We then analyze these high-quality samples
using world-class analysis equipment and techniques, thus
allowing us to detect and identify the faint NMR signals ofnatural rubber molecular end groups for the very first time.

Sumitomo Rubber(Tire Factories)

Natural Rubber
Processing Plants

Advanced Analysis
Techniques

Searching for the Exact
Chemical Structures That
Match NMR Signal Patterns
Derived from Multiple
Measurement Methods

Created with the aim of ensuring the sustainable development of natural rubber, SNR-i is anindustry framework that establishes guidelines
covering five areas of supply chain management
while also promoting independent activities andcontinuous improvement. As of December
2016, some 38 tire manufacturers, rubber
suppliers and other related companies and organizations have joined this initiative.

1. Supporting Efforts to Enhance
Productivity
2. Enhancing Natural Rubber Quality
3. Supporting Efforts to Sustain Forests
4. Water Resource Management
5. Consideration for Human Rights &Basic Labor Rights

SUMITOMO RUBBER GROUP CSR REPORT 201718

CSR Activity Report

Sumitomo Rubber Group CSR Activities Report
Guided by our Basic CSR Philosophy and our CSR
Guidelines as encompassed in the acronym “GENKI,”
we have formulated these CSR Guidelines. The
Sumitomo Rubber Group is promoting and improving
our CSR activities based around the GENKI guidelines
which have become firmly ensconced amongst
Group employees.
In social contribution activities, at our business sites
within Japan and overseas we are interacting withlocal communities, with activities such as cooperatingin tree-planting activities, volunteer work, and working
with NPOs and NGOs. Underlying these activities is ourGroup Philosophy of “making significant contributions
to local communities and society,” and the idea of“contributing to society” as outlined in the
Sumitomo Business Spirit.
Through our business we make a wide-ranging
contribution to society by providing products,
technologies, and services that are useful to society,and will in the future as a corporate member ofsociety continue to implement initiatives to improvesociety as a whole.
What are the GENKI CSR Guidelines?
Since 1988, the Sumitomo Rubber Group has had in place the“GENKI Activities” project (meaning activities that give everybody energy), in which employees take part in volunteer andenvironmental conservation activities one a way to contributeto society.
These are the essence of our CSR activities, and havebecome firmly entrenched throughout the Company andGroup. In 2008 GENKI was set as a keyword in our CSR Guidelines. Employees play a key part in these activities, and therefore
ensuring that they are all familiar with this keyword increases
awareness of CSR and improves the activities themselves.

Eco-First commitments makeenvironmental protection a top priority.
The Sumitomo Rubber Group makes environmental protection
efforts a top management priority. In March 2009, as part of the
Eco-First Program established by the Ministry of the Environment,
the Group made a “pledge of Eco-First” to the
Minister of the Environment. The new “pledgeof Eco-First (renewal letter)” signed in March2012 was achieved in March 2015, and a newpledge is expected to be signed in 2017.
Eco-First commitments Companies conducting “advanced, unique and industry-leadingbusiness activities in the environmental field” (environmentally advanced enterprises in
an industry) make a commitment to the Minister of the Environment to engage inenvironmental preservation efforts including global warming countermeasures andwaste and recycling measures.

19

SUMITOMO RUBBER GROUP CSR REPORT 2017

GreenG r e e n

Promoting Green Initiatives Worldwidei n i t i a t i v e

1Helping to curb global warming by planting trees

2

Fostering better relationships with local communities
through tree planting

3

Protecting Biodiversity

The Sumitomo Rubber Group
plants trees and flowers atfactories and sales companies
in Japan and overseas. In fiscal
2016, we planted a total of
84,607 trees throughout thewhole Group.

P.25

Ecology4

Creating a Low-Carbon Society

5

Building a Recycling-Oriented Society

6Managing Environmental Pollutants

7

Implementing worldwide environmental management

Next

Next-generation product development
8

Developing environmentally friendly products

9

Pursuing safety and comfort, economy, and quality

Planting mangrove
in Malaysia

Boneset flower root divisionat the Kakogawa Factory

We have set a target of recycling
100% of the wastewater at ourfactories around the world by
2050, and are already working
towards this end.

Kindness to employees

10 Fostering human resource development and making jobs rewarding
11 Creating a safe, employee-friendly workplace

Also Improving Environmental Awareness in Japanand Overseas
We are carrying out educational and promotional activities toincrease environmental awareness and educational activities
in Japan and overseas.

P.31

P.32

Wastewater recycling
equipment(Thailand Factory)

Green Curtain Contest(SRI Engineering Ltd.)

Launch of First Product to Employ
Newly Developed Technology“ADVANCED 4D NANO DESIGN”
Succeeded in improving wear resistance performance by 51% compared with conventional products while maintaining high levels of fuel efficiency
and grip performance.

P.33

Kindness

We promote activities for thepreservation of genetic
biodiversity and are preserving
and cultivating endangered
species.

P.28

Promoting the Protection of Water Resources

Ecological process

Preservation and Cultivation of Endangered

Wear resistance
performanceUp

51%

Note: Compared with our ENASAVENEXT products

ENASAVE NEXT

Global Human Resource Development
We strengthened humanresourced development andspread “The SRI Way” atoverseas bases.

P.37

Preventing Lifestyle-Related Diseases

P.39

13 Promoting Diversity

Workshop by smoking
cessation clinic physician on
he subject of tobacco

Integrity
In t eg r it y

f o r

s t a keh o l d er s

15 Ensuring thorough corporate governance
16 Ensuring thorough compliance
17 Promoting dialog with stakeholders
18 Keeping social contribution in constant motion
19 Supply Chain Management

Training at an overseas baseAAA-a

We provide a variety ofhealth guidance for employees and their families, including specific health guidance
and mobile health checks.

12 Achieving a work-life balance
14 Respect for Human Rights

Highest grade wet
grip performance:

Strengthened Compliance Education

CSR Commendations

We hold lectures for personnel
in management positions, andprovide explanations forGroup companies, including
those overseas.

Since FY2009, we havecommended outstanding
activities within the Groupto promote efforts toward
environmental and social
contribution activities.

P.42

P.44
Compliance seminarat overseas affiliate

Directors present CSR
commendations to recipients

SUMITOMO RUBBER GROUP CSR REPORT 201720

CSR Activity Report

Materiality Characteristics and Dialogue with

Stakeholders

Taking into account international guidelines and stakeholders’ views,
determine the materiality of CSR-related activities (priority issues).
We have prioritized the 19 indicators of the CSR guidelines, and will further work towards these initiatives.

Materiality Identification Process Dialogue with Stakeholders

Dialogue with Stakeholders

We periodically carry out surveys to learn about the various opinions
and expectations of stakeholders, and while taking their views
into account, we also place importance on dialogue with stakeholders in pursuing our daily business activities. To energize the
CSR activities of the Sumitomo Rubber Group, and become acorporate group trusted by society, in fiscal 2008 the Group
formulated its Basic Philosophy of CSR and its CSR Guidelines(five areas comprising 13 indicators) made up of the five areas ofGreen (green initiatives), Ecology (reducing the environmental
impact of business activities), Next (development of next-generation technologies and products), Kindness (kindness to employees), and Integrity (integrity for stakeholders).
In fiscal 2011, we identified which of these 13 indicators in the
CSR guidelines were the most important (their “materiality”).
In fiscal 2014, taking into account the impact on stakeholders
and society due to changes in the business environment, we set
19 key CSR indicators.
In fiscal 2015, we prioritized efforts for these 19 indicators,
based upon required content in the “GRI Guidelines (G4)*” andbased upon a survey of all stakeholders. These are proving
useful in future CSR activities.

We periodically carry out surveys to learn about the various
opinions and expectations of stakeholders, and while taking
their views into account, we also place importance on dialogue
with stakeholders in pursuing our daily business activities.

Survey and Questionnaire for Stakeholders
1 Supplier CSR interview surveys
2 CSR report readers questionnaire (employee)
3 Environmental brand survey

We are conscious of our responsibilities towards stakeholders, and are working to promote communications througha variety of means.

How We Communicate with Stakeholders

4 Employee questionnaire

FeaturesMain responsibilities

Communications method

Automobile manufacturers,
manufacturing companies,
sales companies, sports facilities,
consumers, etc.

• Quality management• Development of safer products• Safe driving awareness• Providing product information• Customer consultation and service

5 Comprehensive consumer survey
6 Questionnaire to individual shareholders

Customers

In light of the “GENKI 5 Key Areas, 19 Indicators”
we have set priority items in terms of“Important Issues for Stakeholders” and“Important Issues for the Sumitomo Rubber Group.”

Determining materiality, and prioritization

contact• Customer response through service
and sales departments• Providing information on websites,and servicesetc.

• Exhibitions and events

Clients* Global Reporting Initiative: An international organization that issues CSR reporting guidelines.
Thus far, four editions have been published.

Rubber raw materials manufacturers,
other materials manufacturers,
trading companies,
processing companies• Fair and reasonable procurement• CSR procurementetc.

• Dialog through day-to-day business• onfirmation visits to procurement
partners, and feedback• Questionnaires to procurement
partners• Holding explanatory meetingsetc.

19 Indicators Included in “GENKI” CSR Guidelines, and Materiality (2016 onwards)
Managing Environmental Pollutants

Creating a Low-Carbon Society

Implementing worldwide environmental management

Building a Recycling-Oriented Society

Promoting dialog with stakeholders

Developing environmentally friendly products

Residents, municipalities,
Local
Communities local government,

educational institutions,and other organizations nearfactories and offices

Pursuing safety and comfort, economy, and quality• Social contribution activities• Green initiatives• Protecting biodiversity• Participation in local events• Cooperation with NGOs and NPOs insocial contribution activities• Participation in economic andindustry organizations• Dialog with local governments

Important Issues for Stakeholders

Ensuring thorough corporate governance
Ensuring thorough compliance

Shareholders
and Investors
Helping to curb global warming by planting trees

Protecting Biodiversity

Fostering better relationships with communities through tree planting

Fostering human resource development and making jobs rewarding

Keeping social contribution in constant motion

Creating a safe, employee-friendly workplace

Shareholders (individuals: 20,374,
financial institutions: 951)
Individual and institutional investors• Return of profits to shareholders• Enhancement of corporate value

through dialogue with shareholders
and investors

Promoting Diversity
Respect for Human Rights
Supply Chain Management

Employee
Numbers

Sumitomo Rubber Group: 33,792,
Sumitomo Rubber Industries: 6,693(Male: 6,100, female 593)

SUMITOMO RUBBER GROUP CSR REPORT 2017and publications• Issuance of financial information• Fostering human resources• Occupational health and safety• Health management• Diversity in employment• Consideration of work/life• Providing information through• Consideration of human rights• Dialog with employeeswith president to exchange views withmanagement• CSR Report survey etc.

balance

Important Issues for the Sumitomo Rubber Group• General meeting of shareholders• Timely disclosure of news releases
including fact books, annual reports,and shareholder communications• Providing information on websites,etc.
• Results briefings etc.

Achieving a work-life balance

21

etc.

internal newsletters, intranet, etc.

• Cooperation with labor-management

councils and employee representatives• Compliance consultation service• Holding of round-table discussions

SUMITOMO RUBBER GROUP CSR REPORT 201722

CSR Activity Report

Fiscal 2016 Targets and Results

Based on our GENKI CSR Guidelines, we have verified the progressand successes of our fiscal 2016 Action Plan and have set targets
for fiscal 2017. Let’s look at the main targets.

2017 Target

ActionPlan

2016 Target

Self-Evaluation

Check

Do

2016 Results

Note: Items marked with a are verified by third parties. See our website for details on Fiscal 2016 Activities and Fiscal 2017 Targets.
(Scheduled to go online at end of June 2017.)

CSR Guidelines

2016 Activities and 2017 (Excerpt from major items)

Plan 2016 Target

Green
Green initiative

E cology

Helping to curb global warming byplanting trees• Proceed with the Million Trees for Local Forests project

Expand from just weeding to include forest thinning and planting
trees

Fostering better relationships with local
communities through tree planting• Proceed with Acorn ProjectProtecting Biodiversity• Prepare the biotopes• Continue to protect and raise endangered species

3.6% increase

G4-EN23

8.1% increase• (Six factories in2 Japan)

G4-EN22

6.6% increase

Managing Environmental Pollutants• (Six factories in Japan)

G4-EN2183% decrease

Implementing worldwide
environmental management• Maintain ISO 14001 Global Integrated Certiﬁcation—

Maintained and continue

Developing environmentally friendly
products• Develop and release products employing high-functionality biomass• (Six factories in Japan)

CO2 emissions: ≥1.5% reduction over previous ﬁscal year

Discharged waste (excepting valuable substances to be recycled): ≥2.0% reduction over previous ﬁscal year
Water usage* : ≥1.4% reduction over previous ﬁscal year
NOx, SOx, and dust: ≥80% reduction over ﬁscal 2005 levels

100%• Productize of new technologies• Introduce special English education including in-house English
conversation classes that are convenient for employees to attend• Conﬁrm workstyle changes via employees questionnaires,

sealant tire technologies• Get more male employees to take childcare leave• Implement the daycare support system• Get more employees to use shortened working hours for childcare

G4-LA6

G4-LA3leave

Promoting Diversity

Integrity for stakeholders• Develop and release products created using• Ongoing, systematic development of global human resources• Follow up on creating a work environment with a sense ofAchieving a work-life balance

I

100%

Fostering human resource
development and making jobs
rewardingcompliance with laws and regulations Promote the creation of
workplaces and people able to observe safety rules• Introduce health management support system, advance newmeasures for mental health consultation• Ongoing employment of female and disabled employees• Ongoing utilization of talented human resources regardless ofgender, etc.

Respect for Human Rights• Hold human rights-related training

Ensuring thorough corporate
governance• Establish a Nomination and Compensation Committee as an advisory
body at the discretion of Board of Directors• Increase number of independent external directors (from current two

Ensuring thorough compliance• Promote Group compliance and risk management

G4-56

Promoting dialog with stakeholders• Promote dialogue with a range of stakeholders

G4-26

Keeping social contribution inconstant motion• Work together with NPOs (continue and expand activities)

G4-SO1

Supply Chain Management• Promote CSR in the supply chain

G4-HR10
G4-EN33

members

G4-HR2G4-34

three members)• ≥2.3% reduction per unit over previous ﬁscal year• ≥4.2% reduction over previous ﬁscal year
• Water usage*2: ≥1.4% reduction over previous ﬁscal year
• ≥80% reduction over ﬁscal 2005
• Maintain Global Integrated Certiﬁcations
high-functionality biomass materials• Expand overseas culture and business practice content,

100%

launch creation of work environments that are
employee-friendly• All types of accidents are increasing (disabling injuries:
decreasing; non-disabling injuries: increasing)• Promote the creation of helpful workplaces throughCompany-wide deployment of KK mapping• Mental health-related time-off is decreasing, promote
non-smoking and smoking areas

80%• 1 man used system for childcare leave for men• Better awareness of systems that use the intranet• 56 employees used shortened working hours for childcare

80%
100%

leave

G4-LA12

Expand exchange with communities, including giving away
seedlings• Announce WINTER MAXX02 employing biomass material• Develop “GYROBLADE” airless tire, and “CORESEAL• Strengthen various safety and health activities in addition to• Proceed with Acorn project• ≥2.5% reduction over previous ﬁscal year

• Commercialize new technologies

Creating a safe, employee-friendly
workplace

Team ENASAVE & overseas factories promote mangrove
planting

95%
95%
90%
92%
100%
100%

Pursuing safety and comfort,
economy, and quality

satisfaction through veriﬁcation via employee questionnaires• Proceed with Million Trees for Local Forests project• Build biotopes• Preserve and cultivate endangered species

G4-EN27

G4-LA10

Action 2017 Target

100%

riverbed in Kakogawa

softener component

materials

Kindness to employees

ntegrity100%

Fiscal 2016: 8,588 Cumulative total: 163,357

G4-EN18

Energy saving (crude oil equivalent per unit): ≥1.5% over previous
ﬁscal year100%

• Acorn planting and giving away seedlings

3.6% increase

Building a Recycling-Oriented Society

Next-generation
product development

G4-SO1

G4-EN5Creating a Low-Carbon Society

1

FFiscal 2016: 84,607 trees planted Cumulative total:
1,660,713 trees planted• Building of biotope at Ichijima Factory• Continuing from 2015 with transplanting of boneset along• (Six factories in Japan)

Check Self-Evaluation*• Million Trees for Local Forests project tree planting activities

Expand exchange with communities, including giving away seedlings• (Six factories in Japan)

N
Kindness

Do 2016 Results

G4-EN13

Ecological processext

GRI Guidelines

promote development of human resources who are not only
able to speak but also work successfully in English•Promote workstyle reforms, improve operational efﬁciency, linkto promotion of work/life balance•Invigorate activities heightening health and safety awarenessat each business site, develop and inculcate Sumitomo Rubber
safety activity know-how Company-wide•Promote mental health measures, health advances, follow-up
on availability of health examination practitioners andpromote smoking cessation• Get more male employees to take childcare leave• Promote use of systems• Get more employees to use shortened working hours forchildcare leave• 12 women in managerial positions• Percentage of employees with disabilities: 2.25%

80%• Ongoing employment of female employees and employeeswith disabilities• Employed capable human resources without regard to• Human rights-related training held80%

• Human rights-related training held100%

• Improve efﬁcacy of Corporate Governance Code• Formulate BCP at overseas business ofﬁces, conduct

100%• Promotion of the Group’s compliance and risk

100%
100%
100%

• Promote dialogue with a range of stakeholders• Held Nomination and Compensation Committee meetings(three times)• Conducted survey on efﬁcacy of Board of Directors• Increased independent external directors (added one person)• Consolidate compliance activities systems at overseas bases• Conduct various brieﬁngs at Group companies in Japan andoverseas, provide training in bribery prevention, antitrust
laws and legal risks, particularly at overseas afﬁliates• Conduct stakeholder dialogues at each business base
• Carry out manufacturing workshops at 6 schools• Carry out environmental workshops with 7 groups• Prepare survey for suppliers regarding CSR procurement

gender or similar factors

Company-wide risk analysis

management• Work together with NPOs (continue and expand activities)• Conduct survey among suppliers regarding CSR
procurement*1 : Self-assessment calculation method: Use the baseline year
(1 – reduction ratio) to calculate as follows.

1
23

SUMITOMO RUBBER GROUP CSR REPORT 2017target value – actual value
target value

100%*2 : The denominator of the basic unit
is the new rubber consumption
amount (consumption of natural
rubber + synthetic rubber).

SUMITOMO RUBBER GROUP CSR REPORT 201724

CSR Activity Report

GreenGre e nGreen Initiativei n i t i a t i ve

Management Approach
Forests absorb CO2, which is attributed to climate change,
and are an important place for preserving biodiversity. We
promote green initiatives as one part of Sumitomo RubberGroup CSR activity guidelines through ongoing tree
planting activities on and around our bases within Japanand overseas.
In fiscal 2009, we launched the Million Trees for
Local Forests project to plant trees and flowers on andaround our bases around the world. We have kept wellahead of our initial 20-year target, reaching 1.66 million
trees planted as of fiscal 2016. We will continue to plant
trees and create new forests.

(10,000 trees)

200

Initialtarget
100

50

0
2010

2011

We plant trees and other vegetation at
our 11 “Sumitomo Rubber GENKI Forests” (23 ha), as well as on and aroundour bases in Japan.

When planting trees, one has tobe careful of invasive species that may
have a negative effect on local varietiesof vegetation. That is why we only plantseedlings grown using seeds gatheredin the target area. This is our “Acorn
Green activity event in Tamba, Hyogo Prefecture,attended by President Ikeda

25

SUMITOMO RUBBER GROUP CSR REPORT 20172012

Acorn Project in Japan
Team ENESAVE campaign

2013

2014

2015

2016

2029

Greening Activities Overseas

Forest Creation Workshop Heldin GENKI Forest

150

Helping to Curb Global
Warming While Fostering
Better Relationshipwith Local Communities
through Tree Planting
Planting Trees in GENKI
Forests in Japanin which employees, former employees,
families, friends, local residents andregional organizations participate.

Progress of the One Million Trees for Local Forests Project(Cumulative Number of Trees Planted)(FY)

Other tree-planting activities in Japan
Overseas tree-planting activities

Project.” Our efforts in protecting biodiversity also include planting sasanqua,cherry, dogwood, maki, rhododendron
indicum, and rhododendron, with these
efforts aimed at increasing the amountof greenery around us.
Care for forests after these havebeen planted is also important. In addition
to weed cutting, removal of hydrangea
varieties, removal of unnecessary trees,
pruning and thinning work is carried out.

When holding a tree planting event, we
conduct a tree planting workshop forparticipants led by experts and authorities.
At GENKI Forest in Uzugamori on
Mt. Rokko, the relationship between
current conditions and issues on Mt.
Rokko and forest creation activities currently conducted was understood interms of Rokko Mountain area landslidedisasters and tree planting.

Stakeholder Voices
Workshop on tree planting and landslide disasters(Mt. Rokko: GENKI Forest)

Connecting to Regions within
Green Activities

Children Learning About the
Challenge of Cultivating Treesin the GENKI Forest

Takenoko Science
NPO

Removal of hydrangea varieties(Sakai: GENKI Forest)

Forest Creation Workshop Heldin GENKI Forest
The objective of tree planting activities
is to preserve biodiversity and communicate with local communities throughcooperation with the holding of festivals
and satoyama preservation activities, theprevention of global warming by absorption of CO2 and landslide prevention.
To achieve tree planting throughout
an entire region, we promote activities

Local elementary school learns about tree planting(Toyota: GENKI Forest)

We plant trees and flowers at our factories and sales bases around the world.
In fiscal 2016, we planted 49,573 trees
at these worldwide bases.
A portion of the sales proceedsfrom ENASAVE fuel-efficient tires goesto supporting TEAM ENASAVE campaign mangrove planting activities. We
planted 20,000 mangrove trees in fiscal
2016, bringing the total so far to
1,159,617 trees planted. Under our 1
Pair for 1 Love initiative, for each pair ofgloves sold 1 yen goes to tree planting
activities in Borneo, Malaysia. We haveplanted 2,400 trees under this initiativein fiscal 2016.

I participated in Sumitomo Rubber GENKI
Forest maintenance activities from outside theCompany. To grow an acorn tree, I learned
that there are many difficult tasks, not only
planting, but also weed pulling and cutting
down unnecessary trees.
Children were told how to carefully use
hoes, sickles and other tools they usuallycannot use because they are dangerous sothat we could enjoy these activities safely.
Also, the tonjiru soup we had at lunch
after the maintenance activities was delicious.
I am always deeply moved by the polite
way we are guided from start to finish. I
would like to participate again in the future.

The Sumitomo Rubber Group engages
with a variety of stakeholders throughongoing business activities.
We also deepen our connection
with regions through the provision ofopportunities to interact with local residents and nature within green initiative
activities in a variety of places (parks,
rivers, schools, residences, etc.) throughthe provision of seedlings suited to thearea, the preservation of endangered
species and tree planting.

Tree planting activities in Dubai

Tree planting activities in Singapore“Sunflower foster parents” activity
Mangrove planting activities in Malaysia

SUMITOMO RUBBER GROUP CSR REPORT 201726

CSR Activity Report

GreenGre e nGreen Initiativei n i t i a t i ve

Preserving Biodiversity
Shiraoi, Hokkaido

Let’s protect the Uyoro Riverbasin environment!
TEAM ENASAVE Future Project, Protecting Culture and NatureWith the goal of protecting Japan’s vanishing cultural assets and naturalenvironment, in fiscal 2013 we launched the TEAM ENASAVE Future Project incooperation with the National Federation of UNESCO Associations in Japan (NFUAJ).
As a part of this project, in fiscal 2016 we held clean-up activities at eightlocations around Japan, with the help of employees, their families, and local
associations. Together with others, including volunteers from the public as wellas radio personalities, these events have seen 470 people participate.
Mimasaka, Okayama Prefecture

Echizen, Fukui Prefecture

Let’s link Aida Ueyama terraced
rice fields to the future!

Let’s bring the Oriental storks
back to Echizen!

On June 11, 60 people participated in rice planting conducted by the NPO Aida Ueyama
Terraced Rice Field Organization in Mimasaka,
Okayama Prefecture, where 8,300 terraced rice
fields were once located.

On July 9, 40 people participated in grass
cutting and mud raising work conductedby Farmers and Citizens for the Protectionof Waterfronts andLiving Creatures.

On September 10, NPO Uyoro Environmental Trust and NPO Hokkaido Environmental Community Network participatedin activities held in Shiraoi, Hokkaido,
where 50 attendees experienced tree
thinning in a natural Japanese larch forestand engaged in deer countermeasures.

The Birth of Regional Biotopes
Created by Hand
The Sumitomo Rubber Group is promoting the creation of biotopes inside
its business bases. In addition to the
Shirakawa Factory “Shirawa no Izumi”,
the Nagoya Factory “Koromo no Izumi”,
the Kobe Head Office “Soso no Izumi”
and the Miyazaki Factory “Kirishima no
Izumi,” in 2016 a new biotope was borninside the Dunlop Sports Ichijima Factory.
Biotopes in each region were createdby employees on their day off. With thecooperation of local residents, we plan
to return endemic plants and aquatic
life to local areas.

Ichinoseki, Iwate Prefecture

Let’s restore the Kubo River basin
ecosystem!
On May 14, 50 people participated in naturereclamation work (spreading wood chips to makepaths, planting wild grasses and flowers andcreating artificial floatingislands) conducted by Kubo
River Ihatobu Nature
Reclamation Council.

Fukuoka City,
Fukuoka Prefecture

Let’s protect nature at
Wajirohigata!
On October 23, 50 people participatedin nature observation and Wajirohigata cleanup activities conducted by The
Save Wajiro Tidal Flat Association.

Ichijima Factory biotope

Kumagaya, Saitama
Prefecture

Koromo no Izumi (Nagoya Factory)

Let’s cleanup around Oshino Hakkai!
On July 23, 100 people participated in activities
conducted by the Oshino UNESCO Association,
conducting cleanup activities around the Shinnasho
River basin and the Oshino Hakkai areas.

Let’s Revitalize biodiversity in Mokofudodani!
On June 12, NPO Natural Recovery Attempt Group: Biotope
Moko conducted rice planting in which 60 people participated.

27

SUMITOMO RUBBER GROUP CSR REPORT 2017

The Sumitomo Rubber Group works toprotect biodiversity through businessactivities that make sustainable useof the many elements that make up
biodiversity.
The Acorn Project aims to preserve
the biodiversity of DNA. The project
preserves and nurtures endangered species to protect the biodiversity of seeds.
Our main species are the Katakuri

Boneset after grass cutting

OPICS

Preserving and Nurturing Endangered Species
at the Kobe Head Office

Oshinomura, Yamanashi Prefecture

Kainan, Wakayama Prefecture

Preservation and Nurturing ofEndangered Species

TLet’s protect the fishin the Motoara River!
On June 19, 60 people participated in activities conducted by the Kumagaya Musashitomiyo Protection Association, which
involved cutting grass around the Motoara
River where the endangered musashitomiyo
fish species lives.

Shirawa no Izumi (Shirakawa Factory)

family at the Shirakawa Factory, boneset (asteraceae), (cyperaceae) and sanguisorba tenuifolia at the Kakogawa
Factory, echinops (asteraceae) at the
Miyazaki Factory, arimagumi (elaeagnaceae) in the Kobe area, and sasakia
charonda (Japanese emperor butterflies)at the Ichijima Factory.
At the Kakogawa Factory, inFebruary 2016, we collaborated with
the Ministry of Land, Infrastructure,
Transport and Tourism, other companies
and volunteer organizations to cut grassin order to preserve boneset transplanted
to the Kako River lagoon.

Kirishima no Izumi (Miyazaki Factory)

At the Kobe Head Office, we are cultivating
the Soso no Izumi, a biotope containing
European waterclover, a Kobe City red
rank A plant that floats on water, received
from the City of Kobe Environment Bureau
in 2011. In the summer of 2016, it flourished enough to cover the entire pond, so
we took some of it from the Kobe City
Environment Bureau and returned it to the
local pond. European waterclover had disappeared from the local pond, enabling theKobe Head Office biotope to fulfill its role
as a refuge for valuable endangered species.

European waterclover
covers the entire pond
surface
European waterclover

SUMITOMO RUBBER GROUP CSR REPORT 201728

CSR Activity Report

Ecology

Reducing the Environmental Impact of
Our Business Activities

Ecological process

Management Approach
As a global company responsible forthe environment, the Sumitomo
Rubber Group will fulfill its social
responsibility to realize sustainable
development of society through ourany activities.
In March 2009, Sumitomo Rubber
Industries, Ltd. was certified as an
Eco-First company by Japan’s Minister of the Environment. We have
set targets under our three Eco-First
commitments: create a low-carbon
society, build a recycling-oriented
society, and promote harmonious
coexistence with nature. In fiscal
2015, we fulfilled all our commitments and we plan tomake new commitments in fiscal 2017.

Energy Usage (Crude Oil Equivalent)(Factories in Japan)

Sumitomo Rubber Industries Eco-First Commitments• Reduce CO2 emissions basic

1
2
3

unit to less thanof 1990 levels

Creating a
Low-Carbon
Society55%

Fiscal 2015

• Release tire with 50%
lower rolling resistance(1,000 kL)
180

53.9% Achieved

On sale in fiscal 2014

to landfill at production
bases in Japan and overseas

Continue withcomplete zero

CO2 Emissions (Factories in Japan)(Kt-CO2e)400(t-CO2e/t)
2.4• The Acorn Project

Average

293
264

288
261

289
262

249

1.8

275
244

270

Achieved

On schedule

In fiscal 2016, we worked at using larger
vehicles, and improving transportation
efficiency. These initiatives resulted in a dropin CO2 emissions from transporting tires to30,700 tons-CO2, down 7.4% over theprevious year. The basic unit decreased
2.6%. Production areas and distribution

CO2 Emissions (Overseas Factories)

CO2 Emissions (Factories Operated by Domestic
Affiliates)

200

0.932

100

0.915 0.891 0.916 0.941

CO2 Reduction Activities
in Distribution Processes(Kt-CO2e)4,500(t-CO2e/unit)
1.20

3.00

4,000 0.843

3,992

4,010

4,008

3,940

508
1.2

400

0.919 0.6

200

1.481

1.958

409

0.61

210

0.605

0.600

0.59

0.685
0.721

140

0.672

200

183

0.693

176

171

302

(1,000 kL)
2,500

0.80

2,000

0.70

1,500

3,894

441

3,500

1.549 1.561 1.480 1.566 1.606 1.529 1.00

3,000

0

0

0.521 0.538 0.513 0.498 0.527 0.516

1,000

0.57

0.582

0.50

500

0

0

70

0

2012

2013

2014

2015

2016

2017
TargetBasic unit

(FY)

(t-CO2e/t)
0.05

0.04

50

40

0.038834.3

0.03950.038834.6

35.9

0.039033.2

30

0.0380

30.7

0.03

0.02
0

0

2012
Total

2013
Basic unit

2014

2015

2016

2004
Total

CO2 Emissions in Logistics (Domestic)(Kt-CO2e)
60

0

(FY)

2012

2013

2013

2015

2016

Basic unit

2017
Target(FY)

Employee Voices

Realizing Energy Savings by
Reusing Residual Heat and Steam

ZiFei Qian
Team Manager, Engineering
Sumitomo Rubber (Hunan) Co., Ltd.

Since the Hunan Factory (China) commenced
operations in July 2012, we have been
focusing efforts on improving energy conservation. This is indicated by the “heavy oil
basic unit (L/t)” or the “electricity basic unit
(kWh/t)”, which means how much heavy oil orelectricity are required to mix one ton of rubber.
To improve the heavy oil basic unit, we
captured and reused residual heat andattempted to reduce the amount of steam

0.90

0.30

92
0

0

1990
Total*1

2012

2012

2014

Total Emissions*2

2015

2016 2017 (FY)
TargetBasic unit

*1: According to the Guide for Calculating Greenhouse Gas Emissions,published by the Japan Rubber Manufacturers Association (used to
calculate per-unit figures). The electricity emission factor is the valueannounced by the electricity companies in 2004.
*2: Total emissions do not take into account cogeneration credits.

02004
Total*3

2012

2013
Basic unit

2014

2015

2016

2017
Target(FY)*3: According to the Guide to Calculating Greenhouse Gas Emissions,published by the Japan Rubber Manufacturers Association. The
electricity emission factor is as per the WRI/WBCSD GHG Protocol
Initiative Calculation Tool (2004).

02004
Total*42012

2013
Basic unit

2014

2015

2016

2017
Target(kL/unit)
0.500

2,273

2,295

2,291

2,193

2,117

2,237
0.400

1,855

0.300

0.299 0.308 0.293

0.659 0.60

0.60

3,370

0.464

0.277

0.297 0.296
0.200

0.613 0.616

3,749
2.00

386

162

300

(kL/t)
0.90

701

600

245

0.617

routes were revised according to local
demand and transport distances by truck
from factories to warehouses were shortened. We also made an effort to improvevehicle loading efficiency.
In FY2017, we will continue to makeefforts to shorten the distance between
factories and destinations. For example, wewill produce tires for exporting purpose at
the factory which is the closest to the port.
Also, tires for car makers and ones for commercial will be produced at the factory whichis the nearest to the warehouses in the
demanding area. Expanding routes to enabletransport by ferries and railroads is also considered to increase the modal shift rate.

244,000 tons-CO 2 ) CO 2 emissions
quantities increased 2.7% over theprevious year. This was because of thelarge impact of decreased production
decrease.
We will place a priority on measures to dissipate heat from equipment
and shift to inverter type hydraulic machines in 2017.

695
300 293 302

0.609

Total

Achieved(Average)biodiversity(t-CO2e/t)
4.00

280

Energy Usage (Crude Oil Equivalent)(Factories Operated by Domestic Affiliates)

0.100

34

21,660 trees/year Achieved

20,000• Take action to protect(Kt-CO2e)
800

149

140

Creating a Low-Carbon Society
In fiscal 2016, we made efforts to
reduce air leakage and lower power
consumption to reduce CO2 emissions
from production processes. These
efforts have resulted in reducing 5,000
tons-CO 2 from the previous year at
the six factories in japan. (total

0.63

160

Items marked with a “ ” are verified by third parties. Verified data do not include “intensity” figures. Figures differ from verified ones because of a difference in coefficient.

CO2 Reduction Activities
in Production

171
163

2000

On sale in fiscal 2013

*Details are on pages 25-28

169

160

Achieved

Achieved• Release a 100% fossil

Plant overtrees/year

1720resource-free tire

PromotingHarmonious
Coexistence with
Nature(1,000 kL)
350

0.593

zero emissions for waste

Buildinga RecyclingOriented Society(kL/t)
0.65

0.638
170

150

• Achieved complete

Energy Usage (Crude Oil Equivalent)(Overseas Factories)

(FY)

0

2004
Total

2012

2013

Basic unit

2014

2015

2016

2017 (FY)
Targetused in the manufacturing process. In
addition to reusing residual heat generated
from raw water tanks of the boiler at tirebuilding process, in fiscal 2016, we discontinued processes and machinery using steam
and introduced steam compressors, enabling
the reuse of steam generated during rubber
processing as low-pressure steam.
We are also trying to optimize theoperational efficiency of equipment toimprove the electricity basic unit. By introducing inverter controls on equipment whose
operational efficiency is not stable as well as
automatic lighting, electricity consumption
has been decreased.
In fiscal 2017, we plan to convert
heating equipment by using captured
steam for heating. Going forward, we will
utilize broader reuse of captured residual
heat and steam or renewable energy suchas solar power generation with the aim of
becoming the Sumitomo Rubber Group’s
No1 factory of energy conservation improvements in 2020.

Green Logistics Guidelines
The Sumitomo Rubber Group is promoting environmental conservation
activities through its supply chain
based on Green Logistics Guidelines
formulated in December 2007.
In fiscal 2016, we attempted to
optimally organize production. In fiscal
2017, we will strengthen initiatives toshorten transportation distances andengage in activities to reduce CO 2
emissions during transportation.

*4: According to the Guide for Calculating Greenhouse Gas Emissions,published by the Japan Rubber Manufacturers Association. The
electricity emission factor is the value announced by the electricity
companies in 2004.

Modal shift to ferries

29

SUMITOMO RUBBER GROUP CSR REPORT 2017

SUMITOMO RUBBER GROUP CSR REPORT 201730

CSR Activity Report

Ecology

Reducing the Environmental Impact of
Our Business Activities

Ecological process

Building a Recycling-Oriented
Society
Items marked with a “ ” are verified by third parties. Verified data does not include “intensity” figures.Verification covers:
Waste generated in fiscal 2011 and 2012, and waste discharged (excluding valuables) in fiscal 2013 and 2015.

Continue to Achieve Complete
Zero Waste Disposal

The Sumitomo Rubber Group is working
to reduce, reuse and recycle wastes inorder to build a recycling-oriented
society.
Complete zero waste disposal isdefined as recycling in order to use all
waste, with 100% recycling and nowaste sent directly to landfills. We
achieved complete zero waste disposal
at our primary production sites inJapan and overseas in March 2010.
Currently, we are aiming to systematically achieve this at new sites, andensure this continues at existing sites.
Material recycling rate was 81%
in fiscal 2016 against 85% (target),and it was largely unchanged from theprevious year.

Reducing Waste Discharged*

From fiscal 2013, though we have also
been working to reduce amount ofwaste discharged as making metals
dipped with rubber valuables. In fiscal
2016, this increased 7.7 points at our
six factories in Japan.
This was down 28.1% at the 10
factories overseas, and up 5.6% at the fivefactories operated by affiliates in Japan.
* Amount of waste discharged is calculated as waste
discharged with the goal of recycling it (thermal/
material recycling).

Amount of Waste Discharged(Excluding Valuables) (Factories in Japan)
(t/t)
0.040

(Kt)
20.00

0.032 0.033
15.00

10.00

0.024 0.026
8.92

(Kt)
50.0

(%)
100

100

100

100

100

100

34.5

36.0

36.6

35.8

40.0

33.9

80

9.33

0.000

Total

2013

(Kt)
20.00

10.0

20

15.00

0
Total

2016

(FY)

Recycle Rate

Material Recycling Rate (Factories in Japan)

81

81

60

8.89

2015

2016

2013

2014

2015

2016

Wastewater recycling equipment (Thailand Factory)

Basic unit

0.113
0.097

774

(%)

724

0.119

0.103

806

894

0.112

845
0.040

0.000

0

2012
Total

SUMITOMO RUBBER GROUP CSR REPORT 2017

(t/unit)
0.120

0.080

850

2013

2014

Basic unit

2015

2016

2017
Target(FY)

Yagiz Ozan Ozdemir
Staff, Health Safety and Environment Department
Sumitomo Rubber AKO Lastik Sanayi ve Ticaret A.S.

(FY)

2017
Target

500

31

0.020

9.63
0.010

1,000

0

2014

10.01

0.000

0.102

2013

0.021

10.52

Further Promotion of Environmental
Conservation Activities Starting with
the Acquisition of ISO 14001 Certification

0.030

0.00

20

2012

0.032

5.98

(t)
1,500

40

Employee Voices*1: World Business Council for Sustainable Development

Amount of Waste Discharged(Excluding Valuables)(Factories Operated by Domestic Affiliates)

80

81

(FY)

2017
Target

0.023
8.77

Total

82

0.030

0.024

2012

82

2016

To implement global environmental
management, in December 2010, theSumitomo Rubber Group obtained ISO
14001 Global Integrated Certification
for its 30 bases in Japan and overseas.
This enables us to carry out unified
environmental management at global
production and development bases.
In fiscal 2016, Turkey Factoryacquired ISO 14001:2004 certificationand Sumitomo Rubber Group has completed the transition to ISO 14001:2015.
In fiscal 2017, four factories (South
Africa, United States, Switzerland

(t/t)
0.040

10.00

5.00

(%)
100

2015

Basic unit

0.033

2015

2014

ISO 14001 Global Integrated
Certification

Amount of Waste Discharged(Excluding Valuables) (Overseas Factories)

40

2014

7.21
0.010

2012

20.0

2013

7.34

0.00

60

2012

7.13

5.00

30.0

0.0

0.027 0.030
0.020

7.19

Amount of Waste Generated and Recycle Rate
(Factories in Japan)

0.028

Water use Reduction

In strict response to water crises, theSumitomo Rubber Group has established the target of recycling 100% of
wastewater at factories by 2050. In
2016, the wastewater recycling system
was introduced at the Factory 1 in Thailand, resulting the recycling of approximately 46% of wastewater. In our
med-term plan, we aim to recycle thewastewater at two of our factories. We
also plan to conduct trial operations infiscal 2018 at Turkey Factory to establish
recycling technologies.
Effective use of rainwater is also
intended, and it has been launched forgreening at Hunan Factory. Next, it isgoing to be reused for sprinklers (forcooling products in warehouses)
In fiscal 2017, we will optimize
water use at all bases considering resultsof the WBCSD* 1 Global Water Tool
water risk assessment.

Implementing Global
Environmental Management

Wastewater recycling equipment (Turkey Factory)

We identified environmental issues and conducted risk assessments. They enable us to
use environmental management systemefficiently, conducting internal audits, andwe acquired ISO 14001 certification in
November 2016, nine months after launching these initiatives.
Environmental conservation activities
have just begun at Turkey Plant. In 2017, we
will conduct a variety of measures to reduce
wastes, CO2 emissions and energy consumption, while expand environmental conservation activities including regional communities, employees and suppliers.

and Turkey) are scheduled to join
Global Integrated Certification of
ISO 14001:2015.
Coverage rate of employees at ISO 14001
Certified Sites

Employees
at ISO 14001
Certified Sites as
Percentage of
All Employees

30,212
personsawards, including at overseas bases. In
terms of new initiatives, an outside
lecturer was invited to conduct a workshop on energy saving equipment at
Shirakawa Factory and the Green Curtain
Contest was held at SRI Engineering Ltd.
These activities will be continued
and create new approaches are complemented.

89.4%

Note: Temporary employees are Included. (As of December, 2016)

Environmental AwarenessImprovement Activities

The Sumitomo Rubber Group conducts
environmental education so that all employees increase the awareness andknowledge about environmental issues
and proactively participate in environmental conservation activities.
In fiscal 2016, we continued to holdexhibitions and environmental knowledge contests, solicit posters, slogans
and creative suggestions and present

Green Curtain Contest (SRI Engineering Ltd.)Managing
Environmental Loads
Reducing Volatile Organic
Solvents

The Sumitomo Rubber Group has been
making voluntary efforts to reduce emissionof VOCs (volatile organic compounds) emissions, and fiscal 2016 improvements to
production processes succeeded in a 3.6%
drop over the previous year. This represents
an 81% reduction over fiscal 2000 levels.
In fiscal 2017, we will continue to
optimize how the use of VOC and reduce
quantities used.

VOCs Emissions and Basic Units(Factories in Japan)
(t)
2,000

(kg/t)
8.00

8.20
1,917

1,500

6.00

1,000

4.00

674
500

2.38
0

2000

2012

Total emissions

2.00

402

406

1.41

1.38

1.34

1.35

0.00

2013

2014

2015

2016

(FY)

363

350

Basic unit

Note: VOCs emissions are calculated using methods from the Japan
Rubber Manufacturers Association.

SUMITOMO RUBBER GROUP CSR REPORT 201732

CSR Activity Report

Next

Next-Generation Product Development

Next-generation product development
For its quality improvement efforts, the Indonesia Factory has since 2008
been continuously awarded at the Toyota Kaizen Festival

Management Approach
Underpinning the activities of The Sumitomo
Rubber Group is the theme “tires can contribute to the global environment.” To this end,
it is developing eco-friendly products with afocus on three things—fuel efficiency, rawmaterials, and resource savings.
Sumitomo Rubber Industries’ Tire
Division has established its own environmental standards. As well as improving tire
performance, it is developing the usage offossil resource-free materials, materials toimprove fuel economy, and runflat tires thateliminate the requirement for cars to carryspare tires, creating products that protect the
global environmental and conserve resources.

Environmentally Friendly Product Development Themes

Tires can Contribute to the Global Environment
Fuel efficiency(lower rolling resistance)
Fossilresource-freematerials

Rawmaterials

MakingUsing

Quality Management System
Reduce(weight-savings,
wear resistance)

Resource
savingRecycle & reuse(ease of retreading)

Fuel
efficiency

Safety and comfort(grip, braking, and quiet)

Discarding

Developing Environmentally
Friendly Products
Developing Fuel Efficient Tires
Given that over 80% of CO2 emissions
throughout a tire’s life cycle is emitted
during usage, we are working todevelop environmentally-friendly products developed with fuel economy asa central tenet.
The ENASAVE NEXT II fuel efficienttires released in November 2016 are thefirst product to adopt the ADVANCED
4D NANO DESIGN new materials
development technology. Employing amolecular designed New Flexible
Bonding Agent based on the resultsof wide-scale simulations of rubber
physical characteristics, we attained“AAA-a” in the labeling system, thehighest grade of rolling resistance andwet grip performance, while successfully
improving wear resistance 51% compared to conventional ENASAVE NEXTproducts. This is the most fuel efficienttire in the DUNLOP brand.
In addition, the ENASAVE SPLT50

Sumitomo Rubber Industries is continuingLife performance

Highest grade
AAA-aMore than

Wear resistance

Rolling resistance
Decreased

9%

Note: Compared to our standard
SP LT33 model

ENASAVE NEXTSUMITOMO RUBBER GROUP CSR REPORT 2017

1.4 times

Note: Compared to ENASAVE SP
LT38

Note: Compared to our ENASAVE NEXTproducts

33

Development of Runflat Tires
for Safer Driving

tires released in March 2017 for small
trucks and buses meet customer
demands for life performance and fuelefficiency, realizing high environmental
and economic performance. Improving
wear resistance through the utilizationof new active carbon, life performanceis increased more than 1.4 times compared to conventional products androlling resistance has been reduced by
9% over our standard model.

51%

ENASAVE SP LT 50

The Sumitomo Rubber Group’s quality
management system is certified for ISO/TS
16949*1, an international standard covering automotive parts and service parts.
We are actively putting together quality
management systems overseas, with the
USA Factory receiving ISO 9001 certificationin May 2016 and the Turkey Factory conforming to ISO/TS 16949 in December 2016.
*1: ISO/TS 16949: A quality management system
based on ISO 9001, but tailored to the demandsof the automotive industry.

Wet grip performance

Up

In Pursuit of Safety and Comfort,
Economy, and Quality

T

to work to develop runflat tires that can still
be used at a specified speed for a certain
distance* 1 , in order to improve safety
even during a puncture while driving, andto make these tires more widespread.
In addition to conventional runflat tires,we sell DUNLOP SP SPORT MAXX 050NEO in
Japan, premium runflat tires realizing superior
comfort, environmental performance*2 andstability, while also selling FALKEN AZENIS
FK453RUNFLAT in Europe, which incorporate
our proprietary next-generation newprocessing method NEO-T01 and 4D NANO
DESIGN materials development technology.

Employee Voices*1: Requirement that a runflat tire can go a distanceof 80 kilometers at a speed of 80 km/h.
*2: Specified by reduction of tire weight.

OPICS

Our ADVANCED 4D NANO DESIGNNew Materials Development Technology Receives
Tire Technology of the Year Award“Letting the World Know
About Our Groundbreaking
ADVANCED 4D NANO DESIGN”

Our company’s proprietary ADVANCED 4D NANO
DESIGN New Materials Development Technology
received the prestigious Tire Technology of the YearAward at the Tire Technology Expo 2017, a tire industry
technical conference and trade show that was held in
February in Hanover, Germany. We believe this to be aclear sign of the widespread recognition that we havereceived for our innovative approach to new materials
development and our outstanding technical capabilities.
Awards Ceremony
Finalized in 2015, ADVANCED 4D NANO
DESIGN is a groundbreaking technology that allows
us to analyze and simulate the complex internal structures and behaviors of rubber materials across awide range of scales of magnitude. This technology enables us to accurately predict the intricate
properties of rubber from multiple facets, thus making it possible to achieve simultaneous improvementsin the three key contradictory performance traits of tires: Grip, Fuel Efficiency and Wear Resistance.
In order to achieve such advanced analysis and simulation, ADVANCED 4D NANO DESIGN takes
full advantage of some of the world’s most cutting-edge research facilities, including the SPring-8 large-scale
synchrotron radiation facility to analyze the internal structures of rubber, the J-PARC proton accelerator andexperimental facility to analyze the mobility and behavior of molecules and the K computer, a supercomputer boasting a processing speed that is 1,000 times faster than typical enterprise supercomputers.

(PhD Engineering)
Manager, Research & Development HQ,
Research Department 1

Dr. Masato Naito

Now that we have gained the ability to rapidly
develop the kinds of materials that high-performance tires require, we have been developing andutilizing various new materials in one tire after
another since we released our first products totake advantage of this new technology in 2016.
In order to let the world know just how
advanced these tires that incorporate our new
materials development technology are, we havebeen actively engaged in showing them off at
technical conferences and trade shows in Europe,
North America and elsewhere. In February of 2017,
our ADVANCED 4D NANO DESIGN was honoredwith a Tire Technology of the Year Award as an
outstanding example of tire development technology.
In the future, we will continue working tocontribute to the development of products thatwill provide greater satisfaction to our customers
throughout the world with advanced development
technologies that represent the next step forward.

SUMITOMO RUBBER GROUP CSR REPORT 201734

CSR Activity Report

Kindness

K indne ss to Emp loye e s

Kindness to employees

Management Approach
Employees achieve satisfaction by working
for the Sumitomo Rubber Group, which
grows as a result of its employees’ success.
To continue building such a sound relationship, we believe that we have a responsibility
to provide all employees with a fair andequal chance to grow through a range ofbenefit packages and training programs.
Women are taking on more active roles
in Japanese society, and Sumitomo Rubber
Industries is doing everything possible to
make workplaces more conducive to womenand maximize their talents.

Sumitomo Rubber Group’s Basic Hiring Policy

Employee Voices

Diverse employment
environment and humanresource development

Environment conducive
to rewarding work

Fair evaluationand equal benefits

Becoming Able to Work
Confidently in English

Rieko Aizawa
Logistics Department

Fostering Human Resources
and Making Work Rewarding
Fostering Human Resources
The Sumitomo Rubber Group provides
all employees with well-rounded personal training through the Human
Resources Department, Production
Training Department, and related divisions. Young employees get fundamental training in theory, and managementlevel employees get practical training in
how to maximize organizational
strength and energize their organizations. Such training helps individuals by
respecting their motivation to grow andhelping them learn to notice andimprove situations on their own.
At our overseas affiliates, we aredeveloping human resources by conducting OJT and other training in theaims of boosting problem-solving skills,
understanding Sumitomo Rubber management philosophy, and understanding an implementing the SRI Way.
We conduct trial training for overseas
trainees targeting young employees tofoster global human resources. One ofthese employees was dispatched toThailand for six months beginning inNovember. Going forward, we plan toexpand the number of bases that35

SUMITOMO RUBBER GROUP CSR REPORT 2017

accept these trainees, establish a training program and officially introduce itthroughout the Company.

Manufacturing Education
At the Shirakawa Training Center managed
by the Manufacturing Education Department,
in fiscal 2016 we conducted integrated
manufacturing education training in Japanand overseas targeting site foremen andyoung employees in production divisions
in which 1,700 employees participated.
Training for site foremen emphasized applying what was learned intraining to actual work going forward.
Furthermore, to raise the level ofworkplace management, we are conducting activities to unify concepts
throughout the entire Company, suchas the role of managers and important
administration and manufacturing management items, to inculcate them inJapan and at overseas factories.
In terms of technical staff, QC education was provided at the Central Training Center in the city of Sanda (Hyogo
Prefecture) involving training to ascertainsite data at factories and apply QC methods.
We also held technology inspections
to solve problems with team activities in linewith factory improvement themes. Fiscal
2016 was the 53rd year of these activities,
which were conducted at four factories
in Japan and five factories overseas.
In fiscal 2016, a total of 238 employees participated in QC education,practical training at factories and technology inspections.

Manufacturing education training(Shirakawa Training Center)

Since 2016, my job has involved interactingwith overseas bases in English. I wanted toreceive proper English instruction, so I participated in the English Special Education
six-month intensive language course held
twice each year. Starting with grammar, I
learned English through easily understandable descriptions, logical statements and avariety of scenario-specific expressions
through situations involving everyday conversation, business English and even living on an
uninhabited island.
Conversing in English became quite
natural even in my everyday work duties. I
want to further improve my English abilities
to be able to communicate more intimately
with people around the world.

T

Conducting Employee
Questionnaires
We conduct employee questionnaires
once every two years. The sixth suchquestionnaire, in fiscal 2016, demonstrated high levels of satisfaction with
the Company and its future promise, asin previous years.
As previous questionnaire responses
offered opinions about improvementsthat could be made to working styles, infiscal 2015 we undertook companywide
approaches in such areas as promoting
increases in working efficiency in orderto reduce overtime working hours andon efforts to accumulate and pass on
knowledge, resulting in a substantial
reduction in the amount to which employees felt a sense of burden.
We will conduct an employeequestionnaire again in fiscal 2016, andaim to again connect such opportunities
with initiatives for creating a friendlier
working environment.
In fiscal 2017, we will enhance
operational efficiency and conduct
Company-wide activities to innovate
workstyles so staff can take on morechallenges to create a friendlier working
environment.

Dialogue Between Managers
and Employees
The Sumitomo Rubber Group provides
periodic opportunities for frontline
managers and employees to share con-OPICS

USA Factory Participates in the Skill Olympics for the First Time

The Skill Olympics, which began in October 2009, was held for the eighth time in fiscal 2016. In
recent years, many previous participants have taken leadership positions as coaches, resulting in thetransfer of skills and the development of human resources, which are objectives of the Skill Olympics.
In addition to participants from the USA
factory in 2016, a new process category wasadded to the competitive category. Going forward,
we plan to expand the number of factories andprocesses involved in the Skills Olympics.
To further promote the transfer of skills, after
the awards ceremony, the skills of top performers
are showcased by all participants and coaches anda discussion takes place to highlight positive
aspects. A DVD of the event is distributed, which 15th Skill Olympics competition(making precise holes in a mold without breaking
is useful for transferring skills at all bases.
the drill )cerns and exchange opinions. At informal roundtable meetings with the President, between 20–30 newly hired employees gather to focus on selectthemes as they freely discuss a range of
topics off the record including work-related advice, the President’s philosophyof life, family, and hobbies.
These dialogues were held threetimes in fiscal 2016 and attended by 76
people. They led to a frank exchange of
opinions on themes such as what isneeded to promote an environment thatmakes work stimulating and enjoyable.
We plan to provide employees at all
job levels and in all company divisions
with opportunities to exchange views
with the President and among themselves.

Love Your Work Project
In fiscal 2007, we launched the “LoveYour Work” project as an opportunity
for employees to perceive work in apositive light and share things they had
noticed, as well as their ideas and experiences, with the rest of the Company.
A major component of these activities
is having a place for special employee
discussions that everyone from executives
to Group employees can participate in,encouraging individual employees toreflect on their own work, reinforcing
teamwork, motivation and creativity, andhelping to invigorate the entire Group.
This year, as we promote workstylerevisions to create a challenging workplace culture, we will leverage achievements over the past 10 years to develop
activities appropriate for this new stage.

Special employee discussion between the production
and sales divisions

SUMITOMO RUBBER GROUP CSR REPORT 201736

CSR Activity Report

Kindness

Kindness to Employees

Kindness to employees

SPECIAL TOPICS

Global Human
Resource Development
We are enhancing human resource development overseas aimed at employee
growth and providing rewarding work and realize products having the samelevel of quality regardless of which factory makes them at all Sumitomo
Rubber Group bases throughout the world.
Speciﬁcally, in recent years, guidance and support from the Japan
Head Oﬃce aims to strengthen human resource development in line withlocal business and needs.

The SRI Way: Sharing Workstyle
Values Globally

37

Training participants at the Changshu Factory (China)

The SRI Way at overseas factories. These efforts include adjusting
action principles to local cultures and altering expressions basedon the universal four values so that they are easily understood by
local people, while adding unique principles in light of regional
characteristics to advance more effective efforts.

to autonomous improvements. Learning how to look for and solve
problems and making possible the autonomous implementation of
the PDCA cycle has achieved the intended results.
Also, training Japanese employees assigned locally to provide
support is also essential for promoting these measures. The Manufacturing Education Department leads efforts aimed at the development and education of overseas factory auditors, overseas supporters
and overseas personnel, leading to the global transfer of skills.

The Sumitomo Rubber Group believes it essential to ensure thateach employee can fully demonstrate their capabilities for corporate
development, thus we are working harder than ever on humanresource development. We have inculcated The SRI Way among
all employees in Japan and overseas to establish a common starting
point for how to proceed with work and shared values and waysof thinking that form the basis of employee behavior anddecision-making.
The SRI Way indicates four values important to the Group:“Integrity and Soundness,” “Communication,” “Set the Bar Higher”
and “Cultivate People.” 11 action principles based on these values
clearly define how one is supposed to act. All of this is based on
the Sumitomo Business Spirit continuously handed down over 400
years of Sumitomo history.
Specifically, since 2012, we have focused efforts on spreading

We are also focusing efforts on meticulous quality training based on
The SRI Way to realize products having the same quality regardlessof which factory makes them throughout the world.
One of these efforts involves the manufacturing mastercraftsman system launched in 2013. Skilled foremen are selectedfrom each factory in Japan to visit overseas factories and first
conduct factory diagnoses to verify factory conditions. They engage
in support activities to correct weak points and problems in terms ofimprovement activities engaged in by local employees, which leads

In addition to these activities, in fiscal 2017 we will continue topromote the adoption of a “foreman’s management manual”
prepared for the purpose of standardizing labor management in eachcountry, while developing and utilizing various tools including thesemanuals with the aim of creating a system of instruction that will becompleted in the future by local employees.

Lecture on The SRI Way (sales company in Germany)

Training activity (Thailand Factory)

Guidance based on genchi-genbutsu (seeing things with one’s own eyes) at the Brazil Factory

SUMITOMO RUBBER GROUP CSR REPORT 2017

Efforts to Educate Local Employees
Enabling the Transfer of Skills Onsite

Training participants at the Hunan Factory (China)

Aiming to Improve Technology and Develop
Human Resources Able to Manage and Direct

Newly appointed manager training (Indonesia Factory)

SUMITOMO RUBBER GROUP CSR REPORT 201738

CSR Activity Report

Kindness
K i ndne ss

toKindness to Employees

Creating a Safe,
Employee-Friendly
Workplace
Striving to Eliminate All Disasters
With the aim of ridding the workplace ofall dangers and accidents, the Sumitomo
Rubber Group carries out safety activities
that eliminate the causes of accidents andintrinsically raise the level of safety. We also
practice direct confirmation exhaustive
safety inspections and visual checks.
As a result, in fiscal 2016, there
were no major accidents requiring time
off at factories in Japan and only 11
incidents throughout the entire Group(down 31%) an improvement over theprevious fiscal year. However, small accidents such as injuries while walking andpinched fingers caused by carelessness
increased to a total of 74 incidents (up12%), worse than in the previous year.
As in fiscal 2016, priority activities
in fiscal 2017 will establish the creationof safe people and workplaces.
In addition to voluntary safety
activities by individuals, we will communicate workplace safety activity know-how

Past accident education at morning meeting

Frequency of Occupational Accidents(disabling injury frequency rate*)
2.00

1.59

1.58

1.00

0.94

0.15

0.15

2012

2013

1.66

1.61

1.63

1.06

1.06

1.06

1.50

1.00

0.50

2014

Education and Awareness Activities
Boost Occupational Safety and HealthPreventing Lifestyle-Related Diseases

Since the Sumitomo Rubber Group believes
that fostering safety-aware human resources is the key to eliminating all workplace
accidents, we hold periodic education andawareness-raising activities on occupational safety and health. These activities
are given for each job description and arefollowed up in order to ensure that
employees are effectively acquiring theskills and knowledge being taught.
In fiscal 2016, 67,941 employees
participated in our regular occupationalsafety and health training. We conducted
experiential safety training to demonstrate just how frightening an accident at
machinery being operated every day canbe. A total of 46,208 people took part inthis training during the year. In responseto requests from regional companies andschools, this training was also conducted
for an additional 2,035 people.
In fiscal 2017, to avoid accidents,
we will not limit the communication of
workplace safety activity know-how to
individuals, but incorporate it into small
group activities throughout the entire
Company to promote the creation of aworkplace environment and culture that
protects employee safety by engaging involuntary optimized activities in each
workplace.

Through collaboration between Sumitomo
Rubber Industries and a health insurance
association, we are increasing our rate ofspecific health guidance for employees aged
40 years or older from 22.3% in fiscal 2014,
to 20% in fiscal 2015 and an expected 30%
in fiscal 2016. We sent materials on lifestyle
improvements to people in their 30s in the
preliminary stages of metabolic diseases
again in fiscal 2016. Regarding dependents,
we introduced mobile medical examinations,which caused rate of specific health checks toincrease 2%. Cancer screening subsidies will
also increase from ¥3,000 to ¥6,000 to
encourage consultations.
Because of the dangers of smoking, wehave set a goal of making all company buildings no-smoking and reducing the employeesmoking rate by half by 2020. In fiscal 2016,
we sought to eliminate harmful passive
smoke and make it more difficult for employees to smoke by moving designated smoking
areas to outdoor locations. At present, fourbases are entirely smoke free indoors. In addition to Company-wide no smoking day on
May 31, we will increase the number of
non-smokers by through outpatient treatment for smoking cessation, no-smoking
seminars and other measures.

Experiential training demonstrating the danger ofgetting fingers caught in machinery

Workshop for thinking about tobacco by a smoking
cessation clinic physician

Work-Life Balance
Helping Employees Balance
Work and Family Life
Sumitomo Rubber Industries has introduced
work systems and awareness activities thatmake it easier for employees to carry out
childcare and nursing care; for example, weare reducing the amount of after-hours
work employees do, and we are encouraging employees to take their paid leave.
The result of these and otherefforts has been that 95% of employees who give birth take childcare leave.
As well, we are doing everything possible
to encourage male employees to takechildcare leave, and in the past five years
eight male employees have done so.
In fiscal 2009, we became the firstcompany in the tire industry to be certified
for the Kurumin logo, presented by theJapanese government to companies thatstrive to help employees raise their children.
We were once again certified in fiscal 2015.

Manufacturingindustry

2016

Expanding Women’s
Occupational Range
To promote more active roles for women,
the Company has set the target of doubling its number of women in management positions by 2020, compared withthe 2014 level. To this end, we will needto maintain our hiring ratio of female
employees and increase initiatives thatraise the percentage of people whotake paid leave so they can return towork refreshed.
The daycare support system andother measures introduced in fiscal(FY)

Sumitomo Rubber
Industries, Ltd.

SUMITOMO RUBBER GROUP CSR REPORT 2017

In fiscal 2014, we introduced the
JOB Return system aimed to get employees who have left the company toreturn to work. Under this system, employees who had to quit due to reasons
like marriage or their spouse’s job transfer can return to work as full-time employees. Employees can also choose not
to be subject to a workplace transfer,
giving them more flexibility in how theybalance their jobs and home life.
We will continue to expand andimplement systems that create a work
environment that meets the specificlifestyle needs of
employees.

Kurumin certification as
a company that supports
child-rearing

Initiatives Enabling Further
Participation by a Diverse
Range of Employees

Akari Uesugi
Material Research & Development HQ.
Material Planning Department

Our Company maintains a variety of systems inplace to support a balance between work andhome life. I myself am currently raising a
two-year old boy while working, so for women,
I think these systems help support the successof employees from diverse backgrounds.
As globalization progresses, I think theimportant of ensuring diversity will grow.
Rather than resting on our laurels, we needto make our workplaces even more employee-friendly places where individual employees
can maximize their skills. I would like to see
us make steady strides in this direction.

Promoting Diversity

0.00
2015

*Accident frequency rate: The number of deaths or injuries per 1 million
net working hours.
No. of deaths and injuries due to accidents x 1,000,000/Total work hours

39

throughout the entire Company andpromote the creation of a workplaceenvironment and culture that protects
employee safety by engaging in voluntary
optimized activities in each workplace.

Promoting Health Management
We were certified under the 2017 Certified Health and Productivity Management Organization Recognition Program
promoted by the Ministry of Economy,
Trade and Industry and the Nippon
Kenko Kaigi in February 2017. This certification was granted in recognition of
our efforts toward thorough regular
medical examinations, the promotion of
specific health guidance, the preventionof lifestyle diseases and other disorders
and expanded mental health care options.
Having established a Health Management Office in January 2017, we will continue our aim to realize health management.

0.28
0.07

0.00
Overallindustry

Employee Voices

e mpl oyees

Hyogo Women’s Active Participation Award ceremony

2015 have gained a strong reputation,
resulting in our recognized as a company
that is proactively engaged in promoting
women and improving the workplaceenvironment by the Hyogo Council for
the Promotion of Active Participation by
Women in March 2016.

Respect for
Human Rights
Basic Perspective on
Consideration for Human Rights
The Sumitomo Rubber Group’s Corporate
Code of Conduct states that that we“maintain a sound working environment free from discrimination on thebasis of belief, creed, religion, race, skincolor, nationality, language, social background, gender, age, physical handicap
or other reason.” Accordingly, we strive
to ensure against the infringement of

human rights of any employee.
We distributed handbook on humanresources and occupational management to all managers and held training
sessions and lectures to ensure awareness of the handbook’s content as partof our efforts to create a workplace freeof human rights infringements andharassment, where employees canwork enthusiastically.

SUMITOMO RUBBER GROUP CSR REPORT 201740

CSR Activity Report

Integrity

Inte grity for Stak e h olde rs
Governance From an External Director’s Perspective

Proactively Offering Advice and Raising Issues from the Perspective of“Global Manufacturing”

Integrity for stakeholders

Management Approach
The Sumitomo Rubber Group must fulfill
its responsibilities, understand what is
expected of it, and reflect these in its
business activities. To this end, regularcommunication with our stakeholders is
indispensable.
As we globalize our business, wewelcome a diverse range of new stakeholders around the world. We strive to demonstrate integrity in all our business activities
so that we can earn the trust of all our
stakeholders.

Sumitomo Rubber Group Stakeholders

Customers

Localcommunity

Sumitomo
RubberGroup

Suppliers

Employees

Enhancing
Corporate GovernanceCorporate Governance Philosophy

positioned as an important management
issue. Thus, the Group aims to improve
fairness and transparency, strengthen
relationships of trust with society andensure comprehensive management
efficiency through initiatives aimed ataddressing management issues.
Sumitomo Rubber Industries has
adopted a corporate system with a
Board of Auditors. In an effort tostrengthen corporate governance, since

Based on the Sumitomo Business Spirit
and the Corporate Philosophy, theSumitomo Rubber Group makes it a basic
company policy to continue to enhance
its corporate value as a promising andreliable global company for the benefit of
all stakeholders, continuously creating newvalue to ensure living that is comfortable
and attractive. Based on this policy,
thorough corporate governance is
Corporate Governance Structure

General Meeting of Shareholders
ReportAppointment/Dismissal

Board of Directors (Directors)

Business Audit

Board of Auditors (Corporate Auditors)

Nomination andCompensation Report
Committee

Appointment/
Supervision

ReportReportCooperation

Internal Control
Auditors

Business Execution
ReportPresidentInternal
Audit

Management Committee
Report

Audit

Audit Department

Executive Officers

Accounting Audit

Compliance Counseling Room(Corporate Ethics Helpline)
Cooperation

Legal ComplianceReinforcement ofCorporate Ethics

Corporate Ethics Committee

41

SUMITOMO RUBBER GROUP CSR REPORT 2017

AdviceCooperation

Cooperation

Corporate Attorney

Each Business Operation Division

Independent Auditors

Consultation

Appointment/
Dismissal

Appointment/Dismissal

Business
Audit

ProposalReportShareholders,
Investors

2015 we have operated a Nomination andCompensation Committee comprised ofa majority of external directors with an
external director as the chairman, which
operates as an advisory body to theBoard of Directors in an attempt toimprove objectivity and transparency inprocedures related to the nomination of
directors and other activities.

Risk Management Philosophy
The Sumitomo Rubber Group defines
risk within risk management as a“factor that may interfere with or exert anegative effect on the smooth executionof business activities or the achievementof management objectives/strategies
based on the Group’s management philosophy.” We determine the relative
importance of risks by taking into
account not only financial impact but
also whether we (1) ensure quality andsafety, (2) maintain a good relationshipwith stakeholders, (3) comply with laws
and regulations, and maintain corporate
ethics, and (4) abide by the Sumitomo
Business Spirit, Group Philosophy, andGroup Code of Conduct.
In fiscal 2016, we confirmed thestatus of responses to critical risks
throughout the Group, including atoverseas bases, which were shared
among management level employees.
In fiscal 2017, we will enhance these
activities, sharing critical risks among
management level employees througha reassessment of Groupwide risks.

At Sumitomo Electric Industries, Ltd., up to
now we have been engaged in the manufacture of auto parts and other products as wellas the global expansion of production bases.
Although Sumitomo Rubber is a company inthe same field as automobile manufacturers,
each of its businesses operate independently.
Among the diverse array of independent
external directors, my role is to leverage myexperience up to now to offer advice andraise issues from a technical position andperspective with regard to “global manufacturing.” In particular, I am also focused on
Sumitomo Rubber’s environmentally friendly

product lines, such as the ENASAVE series,
which have a strong reputation throughout
the world. I ask for detailed explanations of
new products and technologies, and offer
advice from a technical perspective.
Since fiscal 2016, the Board of Directors
receives briefings on division policies andmeasures directly from the general managers
in each business division, facilitating a deeper
understanding with regard to management
and the creation of an environment enabling
more precise management guidance andproposals, which I feel results in livelier Boardof Director meetings.

Fumikiyo Uchioke
External Director

Ensuring Thorough CompliancePreventing Wrongful Conduct
We drive home to our employees theimportance of avoiding all wrongfulconduct through our Corporate Codeof Conduct, which includes rules toforbid private monopolies, unfair competition, and business dealings; forbid
bribery; and insulate ourselves fromanti-social forces, etc.
Once again In fiscal 2016, we
focused efforts on establishing a systemenabling voluntary compliance activities
at overseas bases through the establishment and operation of Compliance
Committees at each base.
Going forward, we will continue
efforts aimed at improving complianceawareness.

Compliance Education
Compliance issues are part of everything from new employee orientation
to training programs for all employee
levels so that we can raise awareness of
the importance of compliance among
our employees.
In addition, in fiscal 2016 we held
training for managers on a number of
topics, including a lecture on compliance-related points to bear in mind andcountermeasures within recent overseas
transactions, and briefings on legal
issues such as contracts and Japan’s
Subcontract Act. Briefings on a range of
topics were also held at Sumitomo
Group companies around the world.
Compliance education was also
held for individual employee groups,
such as newly hired university graduates, mid-career-hired employees, andSumitomo Group company managers
at overseas affiliates.

Compliance lecture

Information Security
The Sumitomo Rubber Group fully understands the importance of protecting andmanaging personal and confidential
corporate information and makes aneffort to appropriately handle both.
In fiscal 2016, we continued toinculcate knowledge through “targeted
attack email” practical drills conductedin the previous fiscal year.
Furthermore, we formed SRIG-CSIRT,
an information security countermeasures team, to conduct reviews of information security countermeasures andrespond to accidents.

Compliance seminar at overseas affiliate

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CSR Activity Report

Integrity
Inte gr ity

fo rIntegrity for Stakeholders

sta kehol d ers

Promoting Dialogue
with Stakeholders
Enhancing Products andServices for Customers
Tire Business:
Improving Customer Service Skills
We held the 11th Annual National
Customer Service Skills Contest at
Company stores to improve customer
service capabilities. The 10 contestants who passed the grueling nationwide preliminary round demonstrated
their intimate knowledge of the “Tire
Concierge” iPad app, in its third yearof use since being released in fiscal
2016. As skill levels rise, so do expected judgements of further progress.
The key factor was the degree towhich the contestants were able toprovide customers with polite andNational Customer Service Skills Contest

easily understandable explanations.
The contest was won by Daisuke
Ikenoshima of DUNLOP TYRE CHUO
Co., Ltd., Tire Select Shin-Yokohama,for his smooth response to customer
needs, his ability to bring a smile to thecustomer’s face and his extremely polite
and pleasant nature. Going forward,
we plan to deploy Tire Concierge inother types of industries.

Sports Business:
Customer Support
With the aim of improving customer
satisfaction and creating more Dunlop
fans by obtaining feedback from a greaternumber of customers, Dunlop Sports Co.,
Ltd., established the Customer Service
Office and After Service Centers as adirect link between the Company andcustomers. Also, information received is
rapidly deployed for use in productdevelopment and quality improvements
aimed at customer satisfaction.
In fiscal 2016, we established a
new hotline specifically for tennis
products in September to create asystem able to incorporate more customer feedback.
We aim to go beyond golf-related
products to further enhance the valueof the DUNLOP brand overall.

Supply Chain
Management
Engaging in CSR Procurement
Along with Suppliers
The Sumitomo Rubber Group aims topromote CSR procurement involving
not only quality, cost and delivery, butalso compliance, human rights and labor.
In fiscal 2014, we conducted CSR

43

SUMITOMO RUBBER GROUP CSR REPORT 2017questionnaires two times at approximately 1,100 supplier companies, theresults of which were announced at
the 13th Annual CSR Briefing held inseven locations across Japan in fiscal
2015, where 166 supplier companies
met and exchanged opinions. In fiscal

Industrial and Other Products
Business:
Information Provision
Dunlop Home Products Ltd., a manufacturer of gloves and other daily products for end consumers, established a
Customer Service Office that promptly
conveys valuable opinions and complaints received from customers to relevant departments and reflects them innew product development and service
improvements.
Dunlop Home Products Ltd., also
focuses efforts on providing information
online, updating its website and ongoing
distribution of product information on
Twitter and Facebook among otherefforts to improve customer satisfaction.

Dialogues with Shareholders
and Investors
Sumitomo Rubber Industries places
importance on communications (IRactivities) with shareholders and investors, including information provided
on the Investor Relations section of
our corporate website, briefings foranalysts and institutional investors
and the timely and accurate disclosureof information.
Furthermore, we focus efforts on
ongoing communications (SR activities)
with institutional investors in Japan andoverseas and attempt to achieve mutual
understanding and increase trust
through direct dialogues.

Ongoing Social Contribution
CSR FundIn fiscal 2009, Sumitomo Rubber Industries established a CSR fund for thefinancial support of groups working tosolve social problems in the regions
where we have business sites. With thefund, all donations from employees arematched by the company, and organizations receiving funding are selectedby our business sites and an NPO intermediary support center.
In fiscal 2016, the fund donated a
total of 6.96 million yen to 32 organizations located in six Japanese prefectures: Fukushima, Tokyo, Aichi, Osaka,
Hyogo, and Miyazaki, as well as one
organization in Thailand, our first everdonation overseas.

CSR Commendations

Directors present CSR commendations to recipientsT

Since fiscal 2009, the Sumitomo
Rubber Group has presented CSR commendations to deepen employee
understanding and concern for environmental and social contributions andexpand related activities.

Safe Driving Awareness
The Dunlop Tire Safety Project is aimed
at preventing tire-related accidents, andsince fiscal 2008, we have been conducting this project twice a year at
highway rest stops and commercial
facilities in all of Japan’s 47 prefectures.

Activities Closely Connectedwith Local Communities
The Sumitomo Rubber Group promotessocial contribution activities closely connected to local citizens living near ourfactories. Employees join together toengage in projects promoting exchanges with local residents to deepen relationships of trust and resolve issues bycultivating an environment enabling
mutual understanding.
When an earthquake struck Kumamoto in April 2016, Company (Sumitomo Rubber and Dunlop Sports) and

The Voice of Our Stakeholders

OPICS

Miyazaki Factory Receives the Prime Minister’sCommendation for Distinguished Activities
Promoting Greening

2017, we plan to conduct CSR questionnaires and hold CSR briefings forthe third time.
In addition, we explained our
CSR action guidelines to new suppliers and conducted a CSR questionnaire self-assessment.
In accordance with the spirit of
Sustainable Natural Rubber Initiatives(SNR-i) proposed by the International
Rubber Study Group, we will request
cooperation from suppliers leading to
improvements.

Group employees donated ¥6,413,118
to the affected areas through the Japanese Red Cross Society. In terms ofrecovery support volunteer activities,
between May 21 and July 31, a total of
63 employees from the Miyazaki Factory and Dunlop Golf Club Factory assisted with cleaning at evacuation centers
and the distribution of cooked rice.
Their efforts toward the disposal andtransportation of waste and debris fromdamaged houses garnered words ofappreciation from local residents,
making the activity very meaningful for
those who participated.
Going forward, we will proactively
engage in exchanges with nearby residents and collaborate with municipalities in the vicinity of this factory.

The Miyazaki Factory received the Prime Minister’s Commendation for Distinguished Activities Promoting Greening, which honors companies and other organizations for noteworthy
achievements in promoting and spreading awareness of greening initiative activities.
The Miyazaki Factory conducts eco-friendly initiatives including (1) factory greening
initiative activities (planting trees in nearby residential streets in consideration of the site environment and the handmade creation of a biotope by employees), (2) community collaboration
activities (acorn cultivation and sapling donations, seed preservation activities through the cultivation of type II endangered species Echinops
setifer that are planted in the community and atelementary schools) and (3) improvement of
employee environmental awareness (in-housegreen curtain contests, participation in regional
volunteer activities).
Going forward, we will continue to contribute to society and the environment through green
initiatives and biodiversity preservation activities. Award ceremony

Connecting Victims andVolunteers with the Aim of
Reconstructing Kumamoto

Naoko Nakashima
Community Welfare Manager
Social Welfare Service Corporation Mifune Social
Welfare Council (Kumamoto Prefecture)

After the Kumamoto earthquake, Sumitomo
Rubber Industries sent many disaster volunteers who assisted with debris removal andhouse cleaning. With support from acrossJapan, we are slowly but steadily rebuilding.
Even though they are called disastervolunteers, victim needs will change overtime. We will disseminate information on
current challenges and demands to continue
fulfilling our role of connecting victims andvolunteers.

SUMITOMO RUBBER GROUP CSR REPORT 201744

Site Report
Shirakawa Factory

Shirakawa City,
Fukushima Prefecture

1,700

Number of Employees

1,363

Opened1974

Opened1961

Automobile tires

Donated cherry seedlings to the Tohoku Sakura Live
Project.

Miyazaki Factory

Miyakonojo City,
Miyazaki Prefecture

Tamba City,
Hyogo Prefecture

Ichijima Factory
Number of Employees

214

Opened1996

Number of Employees
OpenedBusiness Outline

Ono City,
Hyogo Prefecture

55
1972

Miyakonojo City,
Dunlop Golf Club Corp. Miyazaki
Prefecture

Number of Employees

240

Opened1989

Main Products

Main Products

Golf clubs

Volunteers participated in support efforts after the
Kumamoto Earthquake.

SUMITOMO RUBBER GROUP CSR REPORT 2017

Golf balls

Conducted a careful investigation of biotope water
quality and released an endangered species, theJapanese eight-barbel loach, into the biotope.

SRI Engineering Ltd.
Number of Employees
Business Outline

173

Kakogawa City,
Hyogo Prefecture

Opened2003

Design/manufacture ofmetallic molds fortire production

Manufacture/sale of retread tires

Employees participated in the 11th Self-Defense FireFighting competition of the Ono City Fire Brigade aspart of efforts to raise fire prevention awareness in
Ono City.

Opened1944

Received a letter of appreciation from the Izumiotsu
City Board of Education and a nearby elementary
school for ongoing neighborhood watch activities thatlook after children on their way home from school.

1976

Dunlop Retread
Service Co., Ltd.

391

For approximately three weeks from the beginning ofMay, firefly viewing is conducted in the biotope locatedon the factory premises with neighboring residents todeepen interactions with the local community.

1,437

Participated in voluntary accompaniment at RUN
TOMO 2016, an event where people and family
members with dementia run a marathon while
tethered to a supporter.

Number of Employees
Main Products

Izumiotsu City,
Osaka Prefecture

Automobile tires, motorcycle tires

Main Products

OpenedAutomobile tires

Izumiotsu Factory

Automobile tires,
agricultural equipment and industrial vehicle tires,rubber parts for medical applications

Number of Employees
Main Products

45

Toyota City,
Aichi Prefecture

Nagoya Factory

Number of Employees
Main Products(Number of employees as of December 31, 2016)

This section introduces some of the CSR activities at the Sumitomo Rubber Group’s six factories inJapan, 14 factories overseas and four affiliated companies in Japan.
For initiative overviews and activity examples, please visit our corporate website.
http://www.srigroup.co.jp/english/csr/

Kakogawa Factory

Kakogawa City,
Hyogo Prefecture

Number of Employees
479
Opened1972
Main Products
Rubber parts for medical applications,precision rubber parts for office equipment,
vibration control dampers, marine fenders, rubber gas tubes

We planted 75 sawtooth oak, konara oak and Japanese blue oak saplings in the No. 2 GENKI Forest.

Nakata Engineering
Co., Ltd.

Kobe City,
Hyogo Prefecture

Number of Employees
Business Outline

137
Opened1914
Design/manufacture/sale ofmachines and equipment forthe manufacture of rubber products

Every year in the summer, employees pick up litterin the vicinity of the site.

Employees sorted 37,988 Bell Mark logos according
to sponsoring company once each week for approximately one year.

Indonesia Factory

Changshu Factory (China)(P.T. Sumi Rubber Indonesia)

Number of Employees
OpenedMain Products

Karawang Regency
Indonesia

3,664
1997
Automobile tires,motorcycle tires, golf balls

Textbooks were donated to elementary schools
near the factory.

(Sumitomo Rubber (Changshu) Co., Ltd.)

Jiangsu,
China

Factories in Japan

Hunan Factory (China)

Hunan,
China(Sumitomo Rubber (Hunan) Co., Ltd.)

Number of Employees

857

Opened2012

Main Products

Automobile tires

Regularly conducts safety activity briefings and education for nearby companies and schools.

South Africa Factory(Sumitomo Rubber South Africa (Pty) Limited)

KwaZulu-Natal
Province,
South Africa

Thailand Factory

Rayong,Thailand(Sumitomo Rubber (Thailand) Co., Ltd.)

Affiliates in Japan

Brazil Factory(Sumitomo Rubber do Brasil Ltda.)

Factories Overseas

Paraná,Brazil

6,739
Number of Employees
Opened2006
Automobile tires, motorcycle tires,
Main Products
agricultural equipment and industrial vehicle tires

Number of Employees

Conducted tree planting activities with the aim of
instilling environmental awareness among students
and local citizens.

Included in a list of the top 35 companies to work for in
the state of Paraná, part of the Great Place to Work®
ranking of companies offering rewarding work
announced by the Institute Brazil in 2016.

Turkey Factory

Cankiri Province
TurkeyUSA Factory(Sumitomo Rubber AKO Lastik Sanayi ve Ticaret A.S.)

Opened1,272
2013

Main Products

Automobile tires(Sumitomo Rubber USA, LLC)

New York
United States

Number of Employees

1,347

Number of Employees

1,111

Number of Employees

1,233

Opened1973

Opened2015

Opened1923

Main Products

Automobile tires

Main Products

Automobile tires

Main Products

Automobile tires, motorcycle tires

Employees conduct a free tutorship program for local
students focused on mathematics and science, twoimportant subjects in South Africa.

Conducted tree planting activities for the first time to
reduce flying dust and increase the amount of foliage
at the factory as one part of Green Initiative activities.

Continued to conduct charitable activities carried out
for more than 10 years that aim to make the dreamsof children with incurable diseases come true. In 2016,
this factory was awarded the Group CSR Grand Prize.

Natural Rubber
Processing(Sumirubber Thai Eastern Corporation Co., Ltd.)

Thailand Factory Tennis Balls

Malaysia Factory

Thailand Factory

Udonthani,
Thailand(Srixon Sports Manufacturing (Thailand) Co., Ltd.)

Prachinburi
Province,
Thailand(Sumirubber Malaysia Sdn. Bhd.)

Kedah,
Malaysia

Number of Employees

287

Number of Employees

357

Number of Employees

664

Opened2010

Opened2007

Opened1981

Main Products

Natural rubber products

Conducted tree planting activities with children at anelementary school.

Zhongshan Factory (China) Guangdong,
China(Zhongshan Sumirubber Precision Rubber Ltd.)

Main Products

Tennis balls

Main Products

Rubber gloves, Flat tire repairing agent

Planted 1,500 trees in nearby Wang Takhian Village
alongside students, villagers and local authorities.

Conducted mangrove planting activities for the firsttime.

Vietnam Factory

Switzerland Factory(Sumirubber Vietnam, Ltd.)Hai Phong City,
Vietnam(Lonstroff AG)

Switzerland
Canton of Aargau

Automobile tires

Main Products Precision rubber parts for office machines

Main Products Precision rubber parts for office equipment

165
Number of Employees
1908
OpenedRubber parts for medical applications,
Main Products
industrial rubber parts

A Faculty Encouragement and Student Scholarship
Fund was established with the aim of supporting
nearby elementary school teachers and students.

Funds were collected in-house and donated as
support to areas damaged in the Kumamoto Earthquake.

Saplings cultivated onsite were donated to a nearby
elementary school where they were planted.

Employee volunteers participated in a Red Cross
blood drive to acquire first aid credentials.

Number of Employees

2,400

Number of Employees

464

Number of Employees

1,070

Opened2004

Opened2001

Opened2007

Main Products

SUMITOMO RUBBER GROUP CSR REPORT 201746

Independent Verification Report

Third-Party Comments

To enhance the reliability of this report and the environmental data disclosed on our website, we underwent verification bya third party.
Data marked with a(pages 23, 29, 31) has been verified.
The target data for verification and the verification criteria used are as follows.

Economic Value and Social Value
Sumitomo Rubber’s pursuit of both economic and social value is evident in President
Ikeda’s message and throughout this entire report. This is a very laudable goal, andI hope the Company achieves great results. To this end, it is important to increasesocial value, which will enable a virtuous cycle that also increases economic value.
Above and beyond maintaining and appropriate profit ratio, the key to increasingsocial value and further increasing economic value overall is strategic CSR.

1. Total global CO2 emissions and emissions per unit
Criteria: ISO 14064-1
2. Amount of water used, wastewater, and waste discharged (excluding valuable substances for recycling)
Criteria: LRQA’s Report Verification (pursuant to ISAE3000, AA1000AS, and GRI)Internationalization and CSR

Katsuhiko Kokubu

Professor at the Graduate School ofBusiness Administration, Kobe University
Completed the doctoral program in businessadministration at Osaka City University Graduate
School. After serving as assistant professor at
Osaka City University and Kobe University, heassumed his current position in 2001. Appointed
head of Graduate School of Business Administration at Kobe University. His recently publishedworks include “An accounting System that
Supports Environmental Business Decision
Making” (Chuokeizai-sha, Inc.) and “Environmental Management and Accounting” (Yuhikaku
Publishing Co., Ltd.).

Sumitomo Rubber is adamant about creating value through a three-region global
management structure in accordance with local characteristics. To contribute to regional
development through the deployment of various activities, increase social value and connect
both to the enhancement of economic value, initiatives must be long-term and strategic infocus. Different international regions have different social issues, thus Sumitomo Rubber
must quickly create a mechanism for global CSR deployment. CSR management systems are
not only for the promotion of activities, they are also a means of inculcating the Sumitomo
Business Spirit as well as a way to cultivate a sense of unity among global businessactivities. I look forward to the Company’s fulfillment of these important roles.

Importance of the Supply Chain
In recent years, the importance of CSR in the global supply chain has been on therise. This pertains not only to the negative aspects of the supply chain, such as
human rights issues and environmental destruction, but also to positive aspects
including supply chain cooperation that increases environmental and social value. In
terms of rubber procurement, Sumitomo Rubber makes an effort to create supply
chains in harmony with the environment and society. I also applaud the Company
for its efforts toward listening to the opinions of suppliers as critical stakeholders.
I would like to see them further expand these activities.

Strengthening “Checks” and “Actions” Within the PDCA
The Plan-Do-Check-Act (PDCA) cycle applied to CSR activities by Sumitomo Rubber
is quite robust compared to other companies. In particular, reviews conductedduring the Plan phase, including materials analysis, are especially noteworthy. Goingforward, I think the Company will be required to enhance the Check and Act
phases, which constitute the feedback system within the PDCA cycle. Sumitomo
Rubber is proficient at achieving objectives as a result of the Do phase, but I thinkthey need to go a step further and incorporate a feedback function to ensure theseresults are truly achieving the intended objectives. So doing, they will rise evenhigher towards a near perfect level.

Response to Third-Party Comments
I would once again like to thank Professor Kokubo for always providing us with pertinent advice and generous
evaluations. I agree we must maintain a constant awareness that CSR activities are the basis for enhancing
social value, which in turn increases economic value, while maximizing this strategy to the fullest extent
possible. The advice indicating that we should “create a mechanism for global CSR development thattakes regional characteristics into consideration” and “promote CSR activities alongside suppliers” provides
us with specific measures that help us think more deeply about these issues. Underpinning all this advice
is understanding stakeholder needs, thus we will enhance the effective execution and transparency of
our activities to provide a well-balanced response.

47

SUMITOMO RUBBER GROUP CSR REPORT 2017

Toshihiko Komatsu

Executive Officer in chargeof Human Resources

SUMITOMO RUBBER GROUP CSR REPORT 201748

Honors and Certifications from Outside Organizations

Editorial Policy

GreenThe Sumitomo Rubber Group has been conducting CSR activities in five key areas represented by the GENKI acronym (seepages 19) of its CSR Guidelines as stipulated in our Fundamental Policy on CSR Activities. This report summarizes the results of
the CSR activities carried out by the Group in fiscal 2016.
Our CSR activities are related to “Go for NEXT,” the slogan
of VISION 2020, and the three facets of our engine for growth:
the challenges of new markets, an insatiable drive for innovationand entering new business fields. Highlighting these activities
are two feature articles, entitled “Creating Value with a ThreeRegion Global Structure” and “Exploring Natural Rubber.”Basic corporate CSR information and detailed data notcovered in this report are available on the CSR Activities sectionof the Company’s website (scheduled to go online at end ofJune 2017).

Green initiative• The Dunlop Sports Co., Ltd., Ichijima Factory was awarded theMinistry of Economy, Trade and Industry Minister’s Prize for Factory
Green Initiatives (photo)• The Head Office received a letter of appreciation from the Osaka

Prefectural Port Director for activities conducted in in district No.7-3
of Sakai City

• The Miyazaki Factory received the Prime Minister’s Commendation
for Distinguished Activities Promoting Greening

E cology
Ecological process• Turkey Factory acquired ISO 14001 and OHSAS 18001 certification• Sumitomo Rubber Group transitioned to ISO 14001: 2015 edition• Thailand Natural Rubber Processing Factory awarded “Thailand’s
Best Factory Award” for fiscal 2016 (photo)

Target Readers
Customers, employees, shareholders/investors, business partners,
local communities, general consumers, NPOs/NGOs, administrative
agencies

Type of Reporting Media

Reporting centered around our
stakeholders and environment
http://www.srigroup.co.jp/english/csr/

Reporting centered around
our GENKI CSR Guidelines

Featurereports

DetailedreportReports ofactivities
undertaken
in a specificyear

Updatedfrequently(Japan Only)

BrochureCompanies Covered by the Report

Next

Next-generation
product development• New materials development technology ADVANCED 4D NANO

DESIGN received the 28th Society of Rubber Science and Technology
Japan Award (photo)• New materials development technology ADVANCED 4D NANO
DESIGN received “Tire Technology of the Year” Award at “Tire
Technology Expo 2017” in Europe

Focused on the six factories operated by Sumitomo Rubber
Industries, Ltd. and Dunlop Sports Co., Ltd., in Japan, including
some information on bases and affiliates in Japan and overseas.
Referenced Guidelines• Sustainability Reporting Guidelines Version 4, published by the
Global Reporting Initiative (GRI)• Environmental Reporting Guidelines (Fiscal 2012 edition),published by the Ministry of the Environment

Period of the Report

Kindness
Kindness to employees

Fiscal 2016 (January 1, 2016 to December 31, 2016), with some
information from outside of this period• Received the 2016 Kurumin next-generation certification mark• Selected for the 2016 Hyogo Corporate Supporter of Women’s
Active Participation award• Sumitomo Rubber certified as an Excellent Enterprise of Health andProductivity Management 2017 (photo)• Miyazaki Factory awarded the Governor’s Prize for Promoting
Health and Longevity

Integrity

Integrity for stakeholders• Shirakawa Factory received a Special Prize in the first Fukushima

Publishing Date
May 2017 (planned publishing date for the next edition: May 2018)

Third Person’s Comments
Comments from an expert are included in order to adopt an
objective perspective on the report. (See Page 48.)

Disclaimer
Besides facts on the past and present of the Sumitomo Rubber Group, thisreport contains projections based on forecasts and future management plans.
These projections are based on assumptions and judgments from information
available at the time this report was made. Actual future results may differ
from these projections.

WebsiteAccessibility of Report
We have further enhanced our main financial indicators
and CSR-related indicators since last year’s report. We
report on some of our value creation through businessactivities.
Page5-6
We introduce concrete examples of actions toward thepractice of our long-term vision slogan “Go for NEXT”
from the viewpoint of global management and technology
development.
Page11-18
We introduce the materiality identification process andour prioritization of important issues in addition toreporting on stakeholder characteristics and methods of
dialogue.
Page21-22
On our CSR activities report pages, we make an effort toprovide reporting that takes into consideration theconcerns of our readers and society with detailed
content related to global human resource development.
Page37-38

Economy, Industry and Monodzukuri Awards (photo)• Received Prize for Science and Technology in the “2017 The

Commendation for Science and Technology by the Minister of
Education, Culture, Sports, Science and Technology”• Received a letter of appreciation from the city of Izumiotsu for
GENKI activities in the Izumiotsu area

• Izumiotsu Factory recognized as an Organization that Successfully
Protects Rivers by Osaka Prefecture

49

SUMITOMO RUBBER GROUP CSR REPORT 2017

SUMITOMO RUBBER GROUP CSR REPORT 201750