CSR Report
Corporate Social Responsibility Report2017Table of Contents

Reporting media of CSR information

Editorial Policy

The CSR Report 2017 of the NLM Group describes the CSR
initiatives that we took in FY2016. More details about our CSR
initiatives, past initiatives, financial information, and further
information are available on our official website.

Introduction
The aim of this report is to ensure that the NLM Group’s CSRrelated approach and initiatives are understood by our stakeholders
by reporting them in a way that it is easy to understand.
The NLM Group recognizes the social issues that are specified
as the core subjects of ISO 26000 and pursues CSR initiatives that
contribute to solving these issues. We would appreciate it if you
would read about the initiatives we take to address each of theissues and provide us with opinions and comments.

Non-financial information

3

Editorial Policy

4

Message from the CEO

6

Organizational Governance8

Human Rights

10

Labor Practices

CSR Report(Brochure/PDF)

Websitehttp://www.nikkeikinholdings.com/csr/

NLM Group’s CSR and SDGs
The CSR of the NLM Group is summarized in our Corporate
Philosophy as stated at the top of our Management Policy,
which reads “Be forever committed to the development of new
applications for aluminum and aluminum-related materials andthereby contribute to the improvement of people’s quality of lifeand environmental protection.” This concept is reflected in each of
the themes of our activities.
In addition, we are promoting activities for understanding theUnited Nations’ Sustainable Development Goals (SDGs), which
we call “Step 1 Activities,” as the first step in our initiatives forlinking the NLM Group’s growth and its contribution to realizing asustainable society. Explanations of these activities were provided
at the CSR Committee meetings that we held in February and July
2017. Moving forward, we will strive to integrate our activities with
SDGs. (See Page 6.)

Financial information
Website12

Environment

16

Fair Operating Practices

18

Consumer Issues

http://www.nikkeikinholdings.com/pages/ir/

Annual Report

20

Community Involvement and Development

22

Overview of the NLM Group

24

Third Party Opinion

25

Independent Assurance Report

26

Data

Fact Book

Shareholders Report

A CSR Committee meeting

Reference guidelines
This report was created by referring to the Environmental
Reporting Guidelines 2012 (Ministry of the Environment) and GRI
G4 Sustainability Reporting Guidelines.
Period covered
Data for the report were collected between April 2016 and March
2017.
* Data collected before or after this period are also used in some sections of this report.

Scope of the report
This report describes the activities of and facts about Nippon Light
Metal Holdings Co., Ltd. and its 73 consolidated subsidiaries (atotal of 74 companies) unless otherwise specified.
Period of issuance
October 2017 (Next report: To be issued in October 2018; Previous
report: Issued in October 2016)
Independent assurance
A ★ symbol indicates that a third party, KPMG AZSA Sustainability
Co., Ltd., has provided independent assurance regarding thereliability of the data.

2

3

Message from CEO

We will address social issues
proactively as Team NLM.
Good start to the new mid-term
management plan
At the NLM Group, we launched a new mid-term management
plan for a period of three years from FY2016. Under this plan, we
have established three basic policies of “Create new products andbusiness models by strengthening cooperation within the Group,”“Business development through strategies by region and by sector,”and “Strengthening of corporate culture.” I believe that the new midterm management plan made a good start in FY2016 as its first year.
We achieved a ten-year high operating profit of 30,200 million yen.
In December 2016, we paid an interim dividend for the first timein 24 years, and the amount of the full-year dividend increased forthe fifth consecutive year. Reflecting the favorable performance, we
improved our financial strength and achieved a D/E ratio of less than
1.0. We would like to move forward to achieve further growth while
maintaining this performance. While there were positive factors
including the low crude oil price, I believe that the driving force
behind this good start was our activities of giving comprehensive
thought to the question, “What is our unique corporate value as the
NLM Group?” and promoting businesses based on this thought in agroup-wide manner.

Corporate value of the NLM Group
What is our corporate value? I believe that it is determined by
how we can satisfy the desires in the minds of our customers by
deeply cultivating our strengths as a comprehensive material
manufacturer with a focus on aluminum. This is also expressed by
our Corporate Philosophy as stated at the top of our Management
Policy, which reads “Be forever committed to the development of
new applications for aluminum and aluminum-related materials andthereby contribute to the improvement of people’s quality of life andenvironmental protection.”
Under this philosophy, we at the NLM Group will continue tofocus on aluminum and build a highly profitable business structure
by taking advantage of our comprehensive accumulated knowledge
and experience of aluminum, which is our strength, with the aimof making a broad contribution to society through our businessactivities. We will strengthen our sense of unity as Team NLM byenhancing our cross-sectoral development activities, which we referto as a “cross-functional collaboration,” and create and provide a
range of products and services that cater to customer needs. We
engage in these activities with the aim of being a “groundbreaking

4

innovator of aluminum and beyond,” which is separated from thepath to scale expansion. As a result, for materials such as thoserelated to lithium ion batteries and those for smartphones, we havecombined our expertise in a broad range of business domains,from the development of alloys as the materials to processing andsurface-treatment technologies. This has led to our creation of
products with high added value.

Progress of globalization and our
CSR initiatives
While the global economy is being integrated in various forms,
the overseas expansion of the NLM Group is also making steadyprogress. In North America, which we position as an important
market, we have begun to establish our marketing base, targetingthe fields of automobiles, electric appliances and electronics, andfood and distribution, where the use of aluminum is expected toincrease. In Thailand, we saw start of the operation of the second
plant that was being constructed by the local subsidiary of Nikkei MC
Aluminum Co., Ltd., a group company that engages in the businessof secondary alloys for automobiles. In India, Toyo Aluminium K.K.
established a joint venture that manufactures and sells aluminum
paste for coating materials. Given the population decline, fallingbirthrate, and aging population in Japan, overseas expansion isinevitable.
On the other hand, destination countries face issues that are
specific to each, in addition to global issues such as global warming.

In 2015, the United Nations adopted the Sustainable Development
Goals (SDGs). We believe that we should carry out activities that
contribute to solving issues including environmental problems andconsideration for human rights and diversity, which are included in
the SDGs, from a medium- and long-term perspective to build asustainable world. We believe that these activities are included inimportant CSR activities that we in the NLM Group are expected tocarry out. We will continue to be proactive in tackling a wide range of
CSR issues, including the re-inspection of safety and ways of workingof our employees as human assets, the promotion of diversity
including the active participation of women, ensuring human rights
in supply chains, and activities for protecting the environment andpreserving biodiversity, not to mention ensuring compliance, both inJapan and overseas.
In this year’s CSR Report, we report on the achievements and issuesof the CSR activities of the NLM Group, which is moving forward
to be a “groundbreaking innovator of aluminum and beyond” asTeam NLM, while being conscious of the SDGs and other global
movements. We would appreciate your frank opinions.
August 2017
Nippon Light Metal Holdings Company, Ltd.
President and Chief Executive Officer

Key indicators of the mid-term management plan and actual achievements
Net sales

Profit attributable toowners of parent

Overseas sales ratio

D/E Ratio

ROCE(billion yen)(billion yen)(%)(times)

(%)

600

30

30

1.2

12.0

1.0

10.0

500

500
448.4

400

20

300

15

200

10

100

5

0

2016

2018 (Fiscal year)
Target underthe mid-term plan

23.6

25

0

19.5

20

20.8
0.8

20

10

2016

2018 (Fiscal year)
Target underthe mid-term plan

0

2016

Target underthe mid-term plan

9.6

0.9

Below 1.0

8.0

0.6

6.0

0.4

4.0

0.2

2.0

0
2018 (Fiscal year) 2016

Over 10%2018 (Fiscal year)
Target underthe mid-term plan

0

2016

2018 (Fiscal year)
Target underthe mid-term plan

5

Main relevant
SDGs

Organizational Governance

Organizational GovernanceWe strive to achieve the sustainablegrowth of our corporate group

Framework of CSR activities of the NLM Group
SocialActivities that can help
Contribution
overcome social
The Environment
issues or contribute Community Involvement
and Development
to the public interest
Human Rights

ActiviOrganiza t i ona

Fair Operating
Practices
Consumer Issues
Labor Practices

Activities that leadto the profits ofour stakeholderst i e s t h a t l e a d t o t h e h a pp ines s
and p r i d e o f emp l oyees

l Governancenc
C o mp l i aeTwelve directors (term: one year)

6

Financial results briefing for corporate
investors and securities analysts

Two times(full-year and first-half results)

One-on-one meetings with corporate
investors and securities analysts

99 times

Internal control system
Six auditors (term: four years)

Threeoutside directors(Two of them are
independent
board members.)

Corporate Governance, internal control, and others

On the other hand, the world’s sustainability-related goals havechanged a great deal in the last five years. In 2015, the Sustainable
Development Goals (SDGs) were adopted at the UN General
Assembly and the Paris Agreement was signed at COP21. All thegoals are ambitious and cover a broad range.
In the NLM Group, we are currently looking for specific measuresfor linking our CSR Promotion Plan with these two great objectives.
Regarding SDGs, we have started with efforts to understand thegoals by having them introduced at various meetings, including the
CSR Committee meetings and via various media.

Major IR activities (FY2016)

Three outside auditors(All of them are independent auditors.)

The NLM HD conducts an effectiveness evaluation of its Board of
Directors every year. Measures that were taken in FY2016 based on
the results of the evaluation include an increase in the number ofinspections of business locations by outside directors and auditors
and free discussions about a wide range of topics that are not limited
to matters for resolution. These initiatives have enabled remarks anddiscussions to be made more proactively, ensuring the effectivenessof our Board of Directors.

The NLM Group’s internal control framework has been establishedand is operated based on our Basic Policy on the Development of theInternal Control System that was determined by the Board of Directorsof the NLM HD in accordance with the Companies Act. In addition,
to respond to changes in the business environment, management
structure, and others, an internal control manager and an internal
control promoter, who supports the internal control manager, areappointed for each business unit in an appropriate manner.
The Board of Directors of the NLM HD receives a report about
the status of internal control every two quarters and provides
appropriate supervision and instructions.

Internal control over financial reporting (J-SOX)

Labor Practices
The Environment

At the NLM Group, we operate businesses with a holding company
structure, in which a corporate group is formed under the umbrellaof the holding company, the NLM HD.
The NLM HD has introduced an executive officer system toseparate management supervision from business execution. It has
also established a Board of Auditors.

At the NLM HD, we consider the general meetings of shareholders
to be valuable opportunities to establish a connection between ourshareholders and the company. We use videos and narrations tofacilitate an understanding of the agenda items. In addition, we
disclose information on the internet at an early stage and allow
our shareholders to exercise their voting rights on the internet.
In FY2016, we began issuing an English version of the notice ofconvocation of the general meeting of shareholders in our efforts toprovide information in multiple languages.
At the NLM HD, we settle the account and make earnings
announcements on a quarterly basis. At the time of earnings
announcements for the full year and the first half, our CEO explains
our performance and management policy himself. Earnings
presentation materials are available on our official website.

established and operates J-SOX with the CEO of the NLM HD serving
as the responsible person. The evaluation of the reports is undertakenby the internal auditing departments of major group companies
and consolidated by the NLM HD to check the effectiveness ofinternal control for the consolidated settlement of accounts. We also
cooperate in addressing new issues that arise due to environmental
changes and other causes, with information and opinion exchanges
carried out constantly by our auditors, accounting auditors, andinternal auditing department.
In recent years, the impact of business locations outside Japan on
our consolidated account settlement has been growing increasingly
important. Accordingly, we have introduced and established J-SOX
at our major business locations in China and Southeast Asia.

Risk management
At the NLM Group, we manage uncertainties such as the probability
that our business may suffer a loss, either directly or indirectly, theprobability that our business is interrupted or discontinued, and theprobability that we will lose credibility or that our brand image will
be damaged, by classifying them into strategic risks, financial risks,
operational risks, and hazard risks.
Among operational risks and hazard risks, those that areespecially serious are specified as “priority risks” by the Board of
Directors of the NLM HD. The Board of Directors requests that suchrisks be managed intensively. Concerning priority risks, the persons
responsible for the respective businesses provide instructions andtake overall control. In addition, the supervisory department of the
NLM HD supports each business by establishing the overall group’s
policies on handling such risks and the methods of managing them.
The business departments repeat the processes of undergoinginspections and audits by the supervisory department of the NLM
HD, assessing the remaining risks, and taking additional measuresthat are necessary.
In FY2016, we inspected and reviewed the system for managing
product quality specifications, the system for preventing oil leakages,
and the system for detecting leakages. In addition, we began to workon tasks such as the reinforcement of the information management
system and the strengthening of business continuity planning.
Moving forward, we will strive to reduce the risks that increase
due to business expansion at our overseas bases while taking thecircumstances of each country or region into consideration.

Fair Operating Practices

Corporate governanceCommunication with shareholders
and investors

Consumer Issues

The CSR activities of the NLM Group commenced in full scale after
the resolution regarding the CSR Promotion Plan was passed at the
2nd CSR Committee meeting (held in February 2012). Since then, we
have continued to implement the activities by revising the plan basedon an annual review of our achievements. We have increased thenumber of items for the action plan, which was initially 98, to 138 atpresent. We have selected these activities by ensuring consistency
between international goals with our own issues by referring to ISO
26000 that was issued in November 2010. In other words, we havebeen proceeding with activities in line with the three frameworks
of “Activities that lead to the happiness and pride of employees,”“Activities that lead to the profits of our stakeholders,” and “Activities
that can help overcome social issues or contribute to the public
interest.” Probably reflecting these initiatives, in July 2017, the stockof Nippon Light Metal Holdings Co., Ltd. (the NLM HD) was selected
as one of the 251 stocks of the MSCI Japan ESG Select Leaders
Index, which is one of the ESG indices selected by the Government
Pension Investment Fund (GPIF).

Concerning greenhouse gases, while the increase in theiremissions associated with our business expansion cannot be
fully offset by our reduction efforts (see page 20), we are having
discussions that are torn between a leap forward and feasibility.
With regard to both of these aspects, we will strive to set goals that
conform to international initiatives.
We will strive to achieve both the solution of international issues
and the maximization of aluminum’s value with the recognition
that for the NLM Group, which continues to grow by expanding its
business domains to China, Southeast Asia, India, the United States,
and Europe, its international goals and initiatives are inextricably
linked, and should be linked, to its businesses.

Community Involvement andDevelopment

NLM Group’s CSR management
and international initiatives

Human Rights

and improve our corporate value.

To ensure appropriate financial reporting, the NLM Group has

7

Main relevant
SDGs

Organizational Governance

Human Rights

We respecthuman rights andHuman Rights

strive to share policies.

• I believe that the understanding and cooperation of themembers around us enable me to use the program without
hesitation.

Q5
Q1

All the team members of the Public
Relations Office are women. How
do you feel about the concepts ofdiversity and the promotion of theactive participation of women?

• I often hear these words, but I am not as aware of the concepts
in my everyday work as you might think.
• I think that people feel differently about the words, diversity andpromotion of the active participation of women, depending on
their generation. I believe that they are matters of course foryoung staff members.

Q2

Do you feel that the fact that all theteam members are women is anadvantage for your work?

• I am not particularly conscious of the fact that we are womenwhile I am working. However, women may be better at taking
on new challenges than men.
• There is also one aspect that I am careful about because weare all women, and that is the possibility that our perspective
8

Staff members of the Public Relations Office ofNippon Light Metal Co., Ltd.

may be female-biased. For example, when we design a PR tool,
I suspect that the sensibility of women is not sufficient for us tocreate a design that is considered to be agreeable by various
people. We seek advice from men around us when necessary.

Q3

Do you notice anything in particular
as a foreign employee?

• I feel that not being Japanese is both a weakness and a strength.
As a Chinese person, I can look at things from different angles
than the Japanese do, and I believe that I have a set of values
and sensibility that are different from those of the Japanese
due to the differences in the environment in which we wereraised, the education we received, and our cultural differences.
China is an important region for the NLM Group, so I would liketo contribute to the public relations work by taking advantageof my strengths.
• We are not conscious of the nationality difference in our dayto-day work, but the difference is a significant advantage for us
when we undertake work related to China.

What do you think of female
manager and the careerdevelopment of women?

• I often attract attention in both a positive and negative sense
because we only have a small number of female managers.
This interview is one example. I guess that the existence offemale managerial staff would be nothing special if we had
more of them.
• It is clear that childbirth and childcare place a major burden
on women who are trying to develop their careers. I wish that
we received more support while on maternity leave, such as
the provision of work-related information and tools for skill
improvement and permission to work at home. In addition,
men should be allowed to take childcare leave more frequently.

Nikkeikin OhLis (One heart, Lively, Smile) Co., Ltd. is a special
subsidiary company aimed at promoting the employment of people
with disabilities.
In June 2017, we held a workplace observation session at thecompany by inviting employees’ families and the teachers of theschools they graduated from. The purpose of this session was todeepen the families’ and teachers’ understanding of the employees’
daily work at the company, obtain their opinions, and create an evenmore comfortable workplace environment.
Participants in the session saw the employees carry out work
such as cleaning the building of the Group Research and Development
Center of Nippon Light Metal Co., Ltd., washing cars, inspecting
equipment, maintaining flowerbeds and planted areas, growing
vegetables, and sorting waste. This was followed by the employees’
explanations of their work. In a subsequent opinion exchange session,
the families shared opinions such as “I saw a side of my son that I
don’t see at home,” and the teachers made comments such as “I wasable to observe our graduates actually working, which is helpful forteaching my current students.” The lunch served to the participants
was the Co-op Box Lunch from Co-op Kambara, for which two of thecompany’s employees work. They were very satisfied with the lunch.
The NLM Group will continue striving to increase the number ofjobs for people with disabilities and expand the employment of thedisabled.

Labor Practices• We don’t do anything in particular about it. However, unexpected
problems can arise for people with young children. Accordingly,
we try to communicate closely with each other on a daily basis
so that we can support each other in the event of a problem.

Promotion of the employment of people
with disabilities

The Environment

One of the members works
reduced hours for childcare.
Do you have anything in mind
regarding this?

Fair Operating Practices

Q4

Consumer Issues

The NLM Group strives to create systems and workplaces that enable the active participation of diverse human assets. All
the staff members of the Public Relations Office of Nippon Light Metal Co., Ltd., including the Manager, are women. The
Public Relations Office also has foreign employees and employees who use the shorter working hours system for childcare.

Q6

Please provide us with a final
comment.

• Diversity is of course important in that every single employee
is respected. At the same time, diversity keeps various humanassets together, leading to the development of the company.
That is what I believe.

Community Involvement andDevelopment

Round-tablediscussions

Participants in the workplace observation session at Nikkeikin OhLis Co., Ltd.

An employee explaining his work

Opinion exchange session

9

Main relevant
SDGs

Organizational GovernanceLabor Practices

We will promote the creation of safe, secure
workplaces and the development of

Human Rights

globally-competitive human assets.

2012

2013

2014

2015

2016 (Year)The fourth mid-term course of action forsafety and health
Under the (fourth) mid-term course of action for safety and healththat commenced in 2017, we have added comprehensive capability
to the existing field capability, management capability, technicalcapability, and health capability, reviewing the course of action toensure that the respective actions are taken in an integrated manner.
The fourth mid-term course of action for safety andhealth of the NLM Group
Enhancecomprehensive
capability
Enhance GENBA*
capability

10

2017

2018

2019

Raising awareness of safety and strengthening activities for preventing accidents
Support for priority business locations
Activities for improving risk sensitivity and uncompromising actions
for not overlooking risks
Promoting safety activities that are created in the GENBA*
Conducting audits (of all business locations) and expanding
the Safety Management System(SMS) certification to the overall group

Enhancemanagement
capability

Developing SMS promoters and safety managers internally and providing internal training

Enhance technicalcapability

Reducing risks by means of risk assessment (training and support for practices)Enhance healthcapability

Continuing to take mental health measures and infection control measures

Expansion of equipment safety standards throughout the groupContinuing to take countermeasures against back pain andheat stroke and measures for preventing passive smoking

Safety activities based on teamwork

Mid-term course of action* The word expressing the perspective of emphasis on hands-on experience

Enhancing management capability
We are working to introduce the safety management system. To
date, we have introduced it at 16 business locations. Further, we
also have our safety control department conduct safety audits,
thereby checking the status of safety and health activities at eachbusiness location. We have also introduced independent safety
investigations, thereby developing human assets who are capableof making improvements.

The group’s safety and health committee meeting• We got to learning new thing and we learning about teamwork
when we do KAIZEN activity, and we learned about problem solving
analysis that we can apply with our work done.

Experience of being sandwiched in acrane hoist (Head Office and Atsugi Plant
of Nippon Fruehauf Co., Ltd.)

Experience of being entangled in rolles(Nagoya Plant of Nippon Light Metal
Co., Ltd.)

Enhancing health capability• We will be share the KAIZEN activity experience, the working
principle, new technology as we saw in Plant tour to our colleague
to be driving our employee to thinking and improve more and moreto their work.
• We are very excited and proudly, that we are company's represent tojointed KAIZEN presentation in JAPAN.

We are working on the prevention of back pain and other healthproblems, lifestyle improvements such as non-smoking activities,
infection prevention, mental health care, and other activities.

• We will be share the KAIZEN activity experience, the working
principle, new technology as we saw in Plant tour to our colleague
to be driving our employee to thinking and improve more and moreto their work.

Enhancing comprehensive capability• We hope to continue this good activity for motivation to create theinnovation and improvement in the future.

We strive to improve the safety level of the overall group by taking
measures including the introduction of measures to preventthe recurrence of workplace injuries in the overall group and theintensive deployment of human assets to business locations withfrequent occurrences of workplace injuries.
These activities are aimed at achieving complete zero accidents
to enable every single employee of the group to return home
uninjured.

Labor Practices

The NLM Group holds the Conference for Presentation of
Improvement Cases to develop human assets for manufacturing
sites and promote improvement activities. At the conference,
presentations are given on a wide range of improvement cases,
including safety improvements, quality improvements, and cost
reductions. People from the overseas bases of the NLM Group also
participate in this conference. Participants in the conference held in
June 2017 included people from the heat exchanger plant of Nikkei
Siam Aluminium Ltd. Through this and other similar programs, the
NLM Group develops manufacturing professionals.
Comments from participants from Nikkei Siam Aluminium Ltd. [sic]Enhancing technical capability
We have established the equipment safety standards to promote thesafety of machines. We also reduce risks through risk assessment.

Human asset development at
manufacturing sites

The Environment

Various safety activities

Fair Operating Practices0

We provide experience-based safety training to raise the safety
awareness of workers in the GENBAs. The training program is aimed
at getting workers to deepen their understanding of the importanceof safety by experiencing risks and knowing the fear of injury. In
2016, the training was provided to 112 workers in three sessions.
We also provided risk prediction training to develop sensitivity fordiscovering potential risks and the capability of carrying out safe
behaviors.

Consumer Issues

The NLM Group has established and operates a safety and healthcommittee for each group company and the overall group, in addition
to one for each workplace as provided for by the Industrial Safety
and Health Act. The safety and health committee of the overall groupconsists of the presidents of major group companies and executive
members of labor unions. This committee deliberates and determines
the NLM Group’s safety and health policies, targets, and other matters.
In 2016 (calendar year), Workplace injury trends (Japan)
Lost-time injury
Non-lost-time injury
there were 17 cases of lost- (cases)
70
time injuries and 52 cases 60
of non-lost-time injuries in 50
the overall group, including 40
30
overseas sites. The workplace 20
injury trends have remained 10
0
2012
2013
2014
2015
2016 (Year)unchanged in the last several
years.
Regrettably,
our Workplace injury trends
measures for preventing the (outside Japan)(cases)Lost-time injury
Non-lost-time injury
recurrence of such injuries, 10
activities for reducing risks, and 8
training and awareness-raising 6
activities have not produced 4
sufficient effects.
2

Enhancing GENBA* capability

Risk prediction training (Toyo Precision Appliance (Kunshan) Co., Ltd.)

Independent safety investigations (Left: Shizuoka Kosan Co., Ltd., Right: Nikkei
Extrusions Co., Ltd.)

Community Involvement andDevelopment

Group-wide activities for safety and healthParticipants from overseas bases (people from the heat exchanger plant of
Nikkei Siam Aluminium Ltd.)11

Main relevant
SDGs

Organizational Governance

The Environment

We coexist in harmony withthe global environment, aiming

Human Rights

to create a sustainable society.

In FY2016, greenhouse gas emissions from the NLM Group in
Japan increased 3.7% from the previous year, to 796,000 tons.
Our emissions caused by fuel consumption (Scope 1) have been
reduced due to our energy-saving efforts, including fuel conversion.
However, our emissions caused by electricity consumption (Scope 2)
have increased, due in part to increased production, resulting in an
increase in overall emissions.

At the NLM Group, we engage in activities for achieving the targetof reducing greenhouse gas emissions by 15% from the FY2005
level by FY2020. We have set this target in our voluntary action plan
for reducing greenhouse gas emissions. Reflecting the status of theachievement of the target and the target of our nation that it pledged
under the Paris Agreement that was adopted at COP21 in 2015,
we are working to formulate a new voluntary action plan by setting
2030 as the target year, while continuing to engage in activities for
reducing greenhouse gas emissions further.

Due to the overseas expansion of the NLM Group, the subjects ofenvironmental management in local areas have also been increasing.
To respond to this situation in a group-wide manner and strengthen
cooperation among our overseas sites, we held a meeting of environmental
practitioners for the first time at an overseas venue in October 2016. We
held it in Thailand, where we have many sites and where a large numberof environmental initiatives are promoted. Environmental practitioners
from five sites in three companies participated in the meeting. They
introduced environmental management activities at each plant, shared
information about the environmental laws and regulations of Thailand,
and inspected the environmental facilities. They also asked questions andheld active discussions about practical tasks such as waste management
and countermeasures against the entry of pigeons into a plant. This
allowed the local staff members to share the issues and goals. We willcontinue to hold meetings of environmental managers in our efforts to
reduce the environmental risks at our overseas sites.

800

577

600
400
200
0

568

2005
(Baseline)

Scope 2

973
796

745

695

748

768

399

386

440

481

512

346

310

308

287

285

2012

2013

2014

2015

2016

2020 (Fiscal year)(Target)* Boundary: 23 consolidated subsidiaries in Japan★: We have received independent assurance by KPMG AZSA Sustainability Co., Ltd. regarding
the reliability of the data.

* The following CO2 emission factors were used for the calculations.
Electricity: End-use CO2 emission intensity of the last fiscal year announced by theFederation of Electric Power Companies of Japan and the Electric PowerCouncil for a Low Carbon Society
Fuel:
CO2 emissions as per heat value and calorific value for each fuel, which
are set forth in the Ministerial Ordinance for Calculation of Greenhouse Gas
Emissions Associated with Business Activities of Specified Emitters* The same emission factors are used for hydropower generation at the Kambara
Complex of Nippon Light Metal Co., Ltd.
* The target and actual values do not include emissions caused by chlorofluorocarbons
and their alternative.

On the other hand, we made a major achievement in Scope 3.
Nikkei Panel System Co., Ltd. has stopped using hydrofluorocarbons(HFCs), which are substitute for chlorofluorocarbons (CFCs), for all thethermal-insulation, flame retardant panels it produces. Since April 2016,
the company has been using no HFCs, which contribute significantly to
global warming. This is equivalent to reducing CO2 emissions by 300,000
tons per year, which account for about one-third of the CO2 emissions
caused by the energy consumption in the NLM Group in FY2016.

Greenhouse gas emissions including
those from our overseas sites*1
In the NLM Group, we make efforts to check the greenhouse gas
emissions from our overseas sites. In FY2016, we started checking
the emissions from all our overseas sites, and they were found to be
137,000 tons*2.

2

300

289

296

(ktons-CO )

0

81

12

0
2012

2013

2014

2015

Category 2 to 7

361
（12%）
572
（19%）

Total
2,968
2,035
（69%）

Scope 2

Scope 396%
Category 1(Purchased products and services)

Scope 1: Direct greenhouse gas emissions by a company
Scope 2: Indirect greenhouse gas emissions by a company attributed to the use ofenergy including electricity
Scope 3: Indirect greenhouse gas emissions by a company in its supply chain

200
100

Breakdown of Scope 3
emissions2

Scope 1

260

137

Greenhouse gas emissions
including Scope 3 emissions(FY2016)

Amount of use of HFCs by Nikkei Panel System Co., Ltd.
(greenhouse gas equivalent)(ktons-CO2)
400

Overseas

10
11

11

9

11

5
0

3

2
2007

2008

1
2009

8

2
2010

8

5

1
2011

2012

3

4

7

7

1
2013

1
2014

3

3

2015

2016

*Complaint: Number of petitions from external parties (such as those regarding smell and noise)
Accident: Environmental problems that affect external parties (such as the leakage of oilor chemicals)I

CNo disposal of waste sulfuric acidGreenhouse gas emissions from the overall group
including overseas sites (FY2016)(ktons-CO )796

Accident

T O P*1: Site: Scope of application of the environmental management system and the unit thereof*2: The CO2 emission factor of Japan was used for the calculation. Moving forward, we
will use emission factors that are appropriate for the conditions of each country in ourefforts to improve the accuracy of the data.

Japan(number of cases)
15
Complaint

On-site inspection ofenvironmental facilities

Meeting of environmental practitioners

Environmental accidents and emergency
response
Regarding environmental accidents and the emergency response
to such accidents, the NLM Group has established and operates aprompt reporting system both in Japan and overseas.
In FY2016, there were no environment-related lawsuits, penal
charges, or fines. There were four complaints* (three in Japan and one
overseas) related to the environment and three minor environmental
accidents* in Japan. In all of these cases, the sites where they occurred
and the environmental control department worked together to implement
countermeasures, including measures for preventing recurrence.

Nikkei Niigata Co., Ltd. uses sulfuric acid for the surface
treatment of aluminum. This would result in the generationof approx. 100 tons of waste
sulfuric acid every month. In May
2016, the company introduceda equipment for collecting andreusing sulfuric acid. As a result,the company has succeeded incompletely eliminating the needto dispose of sulfuric acid. This
device uses pressure dialysis, amethod that is new in the field
Equipment for collecting andreusing sulfuric acidof surface treatment.

Consumer Issues

Scope 1

(ktons-CO2)
1,200
1,144
1,000

Environmental problems

Amount of disposal of waste sulfuric acidCommunity Involvement andDevelopment

Greenhouse gas emissions (Japan) ★

To further reduce environmental problems, the NLM Group isproactive in taking risk-reduction steps that are appropriate foreach site, such as the enhancement, establishment, and renewalof systems for detecting the leakage and promotion of noise control
measures. We also hold regular briefings for local residents todisclose the results of environmental measurement and explain thecontents of our measures for reducing complaints, such as thoseregarding noise. We therefore make steady efforts to communicate
with the local residents.

Labor Practices

Meeting of environmental practitioners
held overseas for the first time

The Environment

Review of the voluntary action plan for
reducing greenhouse gas emissions

Fair Operating Practices

Reduction of greenhouse gas emissions(in Japan)

Amount of disposal (tons)

100

94

80
60
40
20
0

5

0

2015/4~2016/4

2016/5~2017/1

2017/2~2017/5

Pre-installation

Installation period

Post-installation

2016 (Fiscal year)

13

Main relevant
SDGs

The Environment

Fishway construction

Human Rights

Tree-planting activities
on an industrial estate

Activities for protecting
coral reefs

Kambara Complex of
Nippon Light Metal Co., Ltd.

Collaborations
with NPOs
Nikkei Siam Aluminium Ltd. (Thailand)

Mangrove protection
activities

Amata Nakorn Factory of
Nikkei Siam Aluminium Ltd.
(Thailand)
The Environment

Garden and biotope

Participation in the creation of
Kyosei no Mori (forest of coexistence)by Nikkei Technology Center Co., Ltd.

Nikkei Siam Aluminium Ltd. (Thailand)Tree planting at Miho no Matrubara (World Heritage)
and beach cleaning
Tomakomai Complex of
Nippon Light Metal Co., Ltd.

Fishway that was constructedin Toshima Dam

Fair Operating Practices

Greening of factory premises

Kakimoto Dam

Labor Practices

Tree planting and biotope creation

Organizational Governance

Activities for preserving biodiversity
In the NLM Group, we promote activities for preserving biodiversity at our sites in Japan and othercountries in accordance with our biodiversity guidelines. In promoting the activities, we apply
various methods that are appropriate for each phase. Specifically, we monitor the impact of ourbusiness activities on biodiversity, engage in business activities in consideration of biodiversity,and cooperate with local communities in our efforts to reduce the impact on biodiversity.

Neighborhood cleaning andenvironmental monitoring

Observation of wild birds thatcome to the discharge channel

Monitoring of drainage at the Shimizu Plant
of Nikkei Light Metal Co., Ltd.

Nikkei Niigata Co., Ltd.

Nikkei Sangyo Co., Ltd.

Riken Light Metal Industry Co., Ltd.

Patrol of the outer perimeter of the factoryby Toyo Rikagaku Kenkyusho Co., Ltd.

Cleaning of the area around the factory
Shiga Factory of Nikkei Panel System Co., Ltd.

Cleaning of the area around the plant Wellgrow Plant
of Nikkei MC Aluminum (Thailand) Co., Ltd.

Consumer Issues

Garden on office building rooftop
and biotope

Community Involvement andDevelopment

Fruehauf Mahajak Co., Ltd. (Thailand)

Amata Nakorn Factory of
Nikkei Siam Aluminium Ltd. (Thailand)

14

Wellgrow Plant of Nikkei MC Aluminum (Thailand) Co., Ltd.

Cleaning of the area around the factoryby Nikkei Extrusions Co., Ltd.

15

Main relevant
SDGs

Organizational GovernanceFair Operating Practices

We will promote fair and equitablebusiness activities by complying with

Human Rights

the relevant laws and regulations.

Chapter 1. Promotion of compliance
Chapter 2. Responsibilities for employees
Chapter 3. Basic internal rules
Chapter 4. Responsibilities for customers and business partners
Chapter 5. Responsibilities for society
Chapter 6. Responsibilities for shareholders and investors

Compliance meetings
A compliance meeting is held exclusively for employees’ discussions
about compliance. In daily operation, it is difficult for individual
employees to start a conversation about an ethical question or aconcern they experience at their workplace or about their work
every time such a question or concern arises. In response, we holdcompulsory meetings where the topic is limited to compliance in our
attempt to eliminate concerns and solve issues at an early stage.
All employees of all group companies in Japan participate in thesemeetings, which are held twice a year in each workplace. A total of
about 20,000 employees participate in these meetings at around2,000 workplaces every year. People from the same workplace
are not the only combination of participants in these meetings. For
example, only managerial staff participate in the meetings where theagenda involves how to instruct and train subordinates in a way thatenables them to avoid power harassment.
We continue to take initiatives like this, which are based on ourrecognition that all problems stem from a lack of communication.

16

An interview with a metal material
manufacturer in Fujian

An opinion exchange session at
Tomiyama Pure Chemical Industries, Ltd.

5

An opinion exchange session at Fukuoka Alumi Industry Co., Ltd.

Protection of intellectual property rights

0

3

2012

2013

2014

2015

2016

(Fiscal year)

Number of patent registrations

194

200
150

149

176
149 153

180

153
126

143

93

2012

2013

2014

2015

2016
(Fiscal year)

Initiatives for proper trade operations

13

7

Number of patent publications

250

0

15

9

(number)50(cases)10

Patent publications and registrations by the NLM Group100

Number of cases that were reported to NIKKEI HOTLINE
and where a violation of the Compliance Codes was
suspected, resulting in investigations or an attempt toreach a solution

10

Labor Practices

With the aim of sharing our human rights policies with our suppliers,
we in the NLM Group have our purchasing managers visit suppliersin Japan and other countries to undertake on-site checks andexchanges of opinions. A chemical manufacturer and master alloy
manufacturer in Japan agreed to share our human rights policies.
In China, our purchasing managers visited a metal material
manufacturer in Fujian, where they discussed the approach tohuman rights at manufacturing sites in China and exchanged frankopinions.
We will continue to visit our suppliers with the aim of sharing ourhuman rights policies with them.

The Environment

Compliance meetings are not the be-all and end-all solution. Thereare cases where the conditions or circumstances do not permit a
discussion about an issue by any means. In such cases, the issue isentrusted to the whistleblowing system, which was established andis operated by each group company, or NIKKEI HOTLINE, which wasestablished and is operated by Nippon Light Metal Holdings Co., Ltd.
(NLM HD).
NIKKEI HOTLINE provides consultation or handles whistleblowing
in about 20 cases every year. In the case of whistleblowing, thewhistleblower may select a contact office that is appropriate forthe matter they intend to report, such as a person from NLM HD incharge of compliance, legal affairs, personnel affairs, or audits, a
corporate auditor, and a law firm. Whistleblowing is accepted either
anonymously or non-anonymously, and the whistleblower protection
program is applied for whistleblowing that is accepted.
For whistleblowing, checks are made for violations of theCompliance Codes through investigations including interviews withthe whistleblower, the person involved in the alleged wrongdoing,
and responsible persons from the workplace or company in question.
Where the problem is judged to be a violation, we take appropriate
measures such as disciplinary action, a personnel transfer, and/or
an apology.

department cooperates with the intellectual property departmentin promoting activities such as the study of other companies’ priorarts, applications for patents concerning our technologies, and theacquisition of intellectual property rights over the technologies.
Where we operate a business overseas jointly with a local
partner, we work proactively to acquire the intellectual property
rights that are required in the country and ensure contracts toprevent technology leakage.

Fair Operating Practices

The compliance standards of the NLM Group are stipulated in
the Group Compliance Codes, which all officers and employees
are required to observe. With regard to these compliance codes,
a specific code of conduct is prescribed for each of the following
items.
We have a handbook that contains thesecodes of conduct and other important rules.
This handbook is distributed to all officers andemployees. They read through the codes ofconduct occasionally, using them as a guidepost.

Human rights due diligence in the supply
chain

In the NLM Group, we protect and apply the achievements of ourresearch and development activities with intellectual property
rights. We also work to protect intellectual property by respecting
third parties’ intellectual property rights, for example. In the processof developing new products, each business department and R&D

In import procurement, Nippon Light Metal Co., Ltd. participatesin the Authorized Economic Operator (AEO) program*, which is a
global standard. As an authorized importer, the company strives tofacilitate international trade while ensuring the safety of such trade.
It has also established a Customs Clearance Operation Management
Committee to ensure proper trade operations. This committee
supervises the trade operations of each department. In FY2016,
the company began to undergo independent audits in its efforts tocreate a stricter management system.
Group companies have also been requested to participate in the
Customs Clearance OperationManagement Committee to ensure
proper trade operations in each department. In the future, we will
make it a group-wide committee so that the overall NLM Group will
work to promote proper trade operations.

Consumer Issues

NIKKEI HOTLINE

Community Involvement andDevelopment

Promotion of compliance* AEO: A program that permits improved, simplified customs procedures for operatorswith established systems for cargo security management and compliance with laws
and regulations. The program is aimed at ensuring the security of international logistics
and facilitating this to increase Japan’s international competitiveness.

17

Main relevant
SDGs

Consumer Issues

Human Rights

Independent studies of quality (Hinshitsu Jishuken)
In FY2014, the NLM Group began conducting independent studies
of quality (Hinshitsu Jishuken), which are aimed at improving thequality assurance level of the overall group. Hinshitsu Jishuken is a
program aimed at fostering human assets who can play the leadingrole in quality assurance. It is conducted within each group company
by staff members who are directly involved in products, such as theirdevelopment, manufacturing, and sales, by using the factory or plantas the venue. They learn approaches and methods for improving
quality control and establishing quality assurance by carryingout improvement activities using actual products, manufacturing
processes, and other subjects. Human assets fostered through thisprogram constitute a foundation for building the quality assurance
system of a groundbreaking innovator of aluminum and beyond.

Prompt reports on quality
In the NLM Group, when a case that may be a serious quality
assurance problem has occurred, we provide information about
the case as a prompt report on quality regardless of its causes. In
FY2016, ten cases were reported.

Full quality checks
In FY2016, there was a case where we delivered a product whose
specifications differed from those we had determined with thecustomer. In response, we in the NLM Group conducted a full quality

18

Nikkei Siam Aluminium Ltd. (panel division) (Thailand)

Number of prompt reports

A session for independent studies of quality• Selecting a plant/factory as the venue• Determining the theme of improvements based on actual
production activities• Studying the methods and tools needed for improvement• Carrying out improvement activities in teams (three times
for a period of seven days in total)

Number of recalls

The Environment

14

12
10
9

0

Program for independent studies of quality

Shimonoseki Nikkei Co., Ltd.

15

8

8

5
3

3

(held twice a year with participants from all group companies)

Guangxi Zhengrun Nikkei High Purity
Aluminum Technol (China)(number)

4

Protecting quality
Quality audits
In the NLM Group, we conduct an audit of our domestic andoverseas bases every year. With regard to the problems discoveredin quality audits, we share the issues with the audited departments
in question with the aim of improving the level of their quality
assurance. In FY2016, we checked the methods of the management
and assurance of inspection equipment used in the processes, inaddition to the existing audit items, and confirmed that none of the64 bases have any problems.

Prompt reports and recalls

6

Quality audits

Labor Practices

Connecting quality

0
2012

2013

4
Fair Operating Practices

Management of chemical substances contained in
products
In the NLM Group, we strive to strengthen our management system
to ensure appropriate responses to laws and regulations related tochemical substances contained in products. Regulations related
to chemical substances are tightened and renewed, and we mustensure that we reflect the updates in our products. Accordingly,
our quality assurance supervisory department watches for thetightening of regulations and provides the latest information tobusiness departments. Further, concerning newly added chemical
substances, the supervisory department and business department
take countermeasures through mutual consultations.

Fostering quality

1
2014

2015

2016
(Fiscal year)

Group Quality Committee
In the NLM Group, we hold meetings of the Group Quality Committee,
which is chaired by the director in charge of quality, twice a year. At
the meetings, the participants receive information about the group’s
quality policies, approve the quality management promotion plan,share information about quality problems that have occurred in thegroup and the results of quality audits, and engage in other activities.
A group discussion is also held as part of the meeting. In FY2016, theparticipants held a discussion under the topic “prevention of incorrect
specifications,” which allowed them to share ways of thinking
that differ among the various business categories, issues that arecommon to them, and other information. Further, we are building a
network of committee members through these meetings.

Consumer Issues

The NLM Group is a corporate group that focuses on aluminummaterials and has strengths and expertise in a wide range of fields.
We develop products by combining the technologies and expertiseof group companies, aiming to be a groundbreaking innovator ofaluminum and beyond, that is, a creator of products that are able
to provide customers with satisfaction and pleasure that they havenever experienced before.
On the other hand, in order for us to allow customers to use our
products as combinations of our new technologies with a sense of
security, it is essential that we develop new measurement, inspection,
and analysis technologies to provide assurance for such use as agroundbreaking innovator of aluminum and beyond. To establish such
new quality assurance technologies, the quality assurance supervisorydepartment provides assistance with tasks such as the establishmentof methods for managing and inspecting new materials, parts, andprocesses through opportunities such as quality audits, independentstudies of quality (Hinshitsu Jishuken), and individual support. For
example, the division provided assistance with the establishmentof a method for ensuring the strength of reinforcing materials forstructures and support for supplier management.

check of all of our products and services to see whether we hadprovided the products and services required by customers. We
checked a total of 51,108 cases and found 148 cases with problems
such as insufficient recording and unclear detailed specifications.
We immediately ordered remedies for the problems that werediscovered and checked the contents of the remedies. Further, inthe quality audits, we check whether systems for preventing therecurrence of problems have been established.

Community Involvement andDevelopment

Quality assurance we provide as agroundbreaking innovator of aluminumand beyond

Organizational Governance

We are building a quality assurance systemthat will form the foundation ofa groundbreaking innovator ofaluminum and beyond.

Number of violations of laws in the provision of
products and services
In FY2016, there were no violations of laws in our provision of
products and services.

19

Main relevant
SDGs

Organizational GovernanceCommunity Involvement and Development

We are striving to undertake
better communication with

Human Rights

local communities.

(million yen)

200
163
150

121

117

95

100
71
50
0

Award presentation ceremony

2012

2013

2014

2015

2016
(Fiscal year)

Participation in local festivals
Dai Minyo Nagashi (a large folk-dancing parade)in the Niigata Festival (Nikkei Niigata Co., Ltd.)
Boasting around 14,000 participants, Dai Minyo Nagashi in the
Niigata Festival, which is held in Niigata City, Niigata Prefecture, issaid to be one of the largest dancing parades in Japan. Every year,
about 250 people from the NLM Group participate in this parade.
Wearing the same yukata (summer kimono), they display a wellsynchronized dance with a mando (a large lantern) decorated withaluminum barrels manufactured by Nikkei Niigata Co., Ltd.

Dai Minyo Nagashi

20

Mando decorated withaluminum barrels

Citizens’ dancing

Konomiya Hadaka Matsuri (Konomiya naked
festival) (Nagoya Plant, Nippon Light Metal Co., Ltd.)The Konomiya Hadaka Matsuri (Konomiya naked festival), which isheld at Owari Okunitama Shrine in Inazawa City, Aichi Prefecture, isa time-honored festival with more than 1,200 years of history. The
Nagoya Plant of Nippon Light Metal Co., Ltd. participates in the festival
every year through the local community. For example, its employees
participate in the ceremony of making a huge round rice cake to be
dedicated to the shrine. The plant also participates in the parade fordedicating the round rice cake. Further, on the day of the Naoi Shinji(the shrine ritual for dispelling misfortune), which is the climax eventof the festival, the factory offers its premises for security services
and first aid. The company thus cherishes this locally-based festival.

Making of the huge round rice cake

Huge round rice cake to be
dedicated to the shrine

The wild vegetable festival

Stall held by Kambara Complex

Venue of the event

Labor Practices

Rose Motive

The Environment

Expenses related to social contribution

Nippon Light Metal Co., Ltd. owns a dam and a power plant inHayakawa Town, Minami Koma County, Yamanashi Prefecture. In
Hayakawa Town, the Minami Alps Hayakawa Sansai Matsuri (wildvegetable festival) is held in the season of wild vegetables. The
Kambara Complex of Nippon Light Metal Co., Ltd. participates inthis event with the local women’s association and various otherorganizations by holding a stall in the venue. At the stall, they sell
everyday utensils made of aluminum, such as aluminum foils andpans, collect aluminum cans, and carry out other activities. Morethan 10,000 people visit the festival and look forward to buying
aluminum everyday utensils as well as wild vegetables.

to offer a mobile rose garden for delivering roses raised on thepremises. The Rose Motive has been deployed as part of theactivities for supporting the reconstruction of the disaster-affectedarea and the revitalization of the local community, and visitors to thefestival were pleased to see the container.

Festivals organized at our manufacturing sites
In the NLM Group, we hold on-premises events at our manufacturing
sites to enable local residents to get to know our plants and to
express our gratitude for them. At the festivals, our employees run
food stalls, host games and lotteries, organize bazaars, take visitors
on plant tours, and engage in other activities. In addition, taiko drum
groups and cheerleading teams from local schools are also invited tothe events. In this way, the festivals serve as valuable opportunities
for interacting with the local residents.

Fair Operating Practices

In 2013, the NLM Group participated in the citizens’ dance in
the Tomakomai Minato Festival, which is held in TomakomaiCity, Hokkaido, for the first time in 15 years. Since then, we
have participated in the dancing event every year. We make full
preparations for participating in the event, including training sessions
provided by a dance instructor and the creation of a special costume.
As a result, we have received an award, including the Fashion Awardand the Award of Excellence, for four consecutive years.

Minami Alps Hayakawa Sansai Matsuri(wild vegetable festival)(Kambara Complex, Nippon Light Metal Co., Ltd.)

Invitation to on-premise events
Rose Viewing Festival and Rose Motive(Head Office and Atsugi Plant of Nippon
Fruehauf Co., Ltd.)In 1984, the Head Office and Atsugi Plant of Nippon Fruehauf Co.,
Ltd. began growing roses on its premises with the aim of providing
pleasure to the employees. Currently, 1,000 roses of 400 breeds
flourish there, and the Rose Viewing Festival, which is open to the
public, is held as an opportunity to express appreciation to thecompany’s many stakeholders. The festival celebrated its 30th
anniversary and attracted around 6,000 visitors in 2017. Events
held during the festival include sales of rose saplings, a seminaron how to raise roses, and a concert. A fund-raising activity is also
included in the events, and the money collected through the activity
is donated as aid money for children in developing countries andothers. These initiatives were highly evaluated and the plant wascommended by Kanagawa Prefecture in the past as a plant thatcoexists in harmony with the local community.
At the 50th anniversary of the company, the Rose Motive,
a container in a see-through structure, was developed and used

Consumer Issues

At the NLM Group, we engage in activities with the local communities.
For example, at many of our business locations, we participate inlocal festivals and invite local residents to events that we host. Above
all, we participate in locally based traditional events and other events
proactively by involving all the staff members at each site. We thereby
contribute to the development of each local community as its member.
In FY2016, we participated in 255 local programs, and the amountof expenses for these and other activities was 163 million yen.

Tomakomai Minato Festival(Tomakomai Complex of Nippon Light Metal
Co., Ltd., Nikkei Hokkaido Co., Ltd., and others)

Performance of the taiko drum club of Shizuoka Prefectural Suruga-Sogo
High School at Riken Noryo Sai (Riken summer festival)

Plant tour at the Nikkei Sai festival
Event name

Number of times it has
been held to dateCommunity Involvement andDevelopment

Social contribution accounting

A bingo game at the Nikkei Bazaar

Number ofvisitors

Venue

Riken Noryo Sai

22

Approx. 1,000

Head Office Plant of Riken Light Metal
Industry Co., Ltd.

Nikkei Sai

28

Approx. 2,000

Kambara Complex, Nippon Light Metal
Co., Ltd.

Nikkei Bazaar

29

Approx. 2,000

Nagoya Plant, Nippon Light Metal
Co., Ltd.

21

Corporate overview
Trade name:Business summary

Nippon Light Metal Holdings Company, Ltd.
(Abbreviated to “NLM HD”)

Securities code:

5703

Paid-in-capital:

Alumina, Chemicals, andIngot Business

46,525 million yen

Sales:

448,381 million yen (consolidated)

Sales ratio 22.7% Sales 101,840 million yen
Sales

Operating profit (million yen)

120,000

114,339

109,844
9,138

90,000

Head office location:

2-2-20 Higashi Shinagawa, Shinagawa-ku,
Tokyo

Established:

October 1, 2012

Number of employees:

Sheet and Extruded Products
Business(billion yen)
500

448.3

Net assets (consolidated)(billion yen)(billion yen)

25

3,000

40

150

2014

2016 (Fiscal year)

0

Operating profit (million yen)
103,34030

30,00020

012,00098,16582,82360,000

35.6

2015

7,775

9,000
6,000

4,230

3,058

3,000

100
10

200

5

100
0

50

2012

2013

2014

2015 2016(Fiscal year)

0

2012

2013

2014

2015
2016
(Fiscal year)

0

Fabricated Products and Other
Businesses

10

2012

2013

2014

2015
2016
(Fiscal year)

0

2012

2013

2014

138,088

120,000

154,684

149,229

16,000

10,2458,000

40,000Foil and Powder Products Business

0

12,00010,9584,000

0■ Toyal Europe

2016 (Fiscal year)

7,704

80,000

Sheet and Extruded Products Business
Foil and Powder Products Business2015

Operating profit (million yen)

160,000

Global network
Alumina, Chemicals, and Ingot Business
Fabricated Products and Other Businesses

2014

Sales ratio 34.5% Sales 154,684 million yen
Sales

2015
2016
(Fiscal year)

The alumina and chemicals segment manufactures
aluminum hydroxide, alumina, and various otherchemicals. These products are used in a range offields, including as fire retardants, raw materials forceramics, and plant materials for the manufacture ofpulp and paper. The ingot segment manufactures avariety of aluminum ingots and is highly evaluated forthe development of highly-functional ingots that cater
to customers’ needs.

Sales ratio 21.9% Sales 98,165 million yen

90,000

50

173.6

15

300

30,000120,000

(%)

19.5

20

400

6,000

Sales

Equity ratio (consolidated)

200

9,000

60,0000Profit attributable to owners of parent(consolidated)

12,0006,069

13,126 (consolidated)

All of the data are in FY2016 or as of March 31, 2017.

Net sales (consolidated)

101,840 10,126

2014

2015

2016 (Fiscal year)

0

Sales ratio 20.9% Sales 93,692 million yen
Sales

Operating profit (million yen)

120,000

12,000102,001

96,227

93,69290,0006,829

60,000

9,000
5,478

4,183

30,000
0

6,000
3,000

2014

2015

2016 (Fiscal year)0

Aluminum sheets and extrusion products are used
in a wide range of fields, such as for automotive
parts and railway cars in the transport industry andforsemiconductor/liquid-crystal
manufacturing
equipment and photosensitive drums in the electricaland electronics industry. The NLM Group makes
use of its technologies and expertise cultivated overmany years to proactively develop products that meetcustomers’ needs and to supply highly functional
sheets and extrusion products.
The NLM Group has many group companies thatdeal with distinctive fabricated products. Amongthem, truck bodies from Nippon Fruehauf Co., Ltd.
and commercial refrigerators and freezer panels from
Nikkei Panel System Co., Ltd. are highly valued fortheir quality and thereby enjoy the top share in eachindustry. We also supply other aluminum fabricatedproducts that are closely related to our everyday
lives, including anodized aluminum foil for aluminumelectrolytic capacitors, automotive parts, and carbon
products.
Toyo Aluminium K.K. plays the leading role in thesebusinesses. We have established our position as aleading manufacturer by developing a wide rangeof products that incorporate aluminum’s special
characteristics and that are useful in society,industry and everyday life. They include packaging
materials for food and pharmaceuticals, products
for electronics, aluminum paste, and solar cellmaterials. We develop new fields by utilizing our own
technologies as the foundation and provide a rangeof highly-functional materials and products in markets
at home and abroad.

■ INMOBILIARIA WTV■ Nikkei MC Aluminum America■ T.S.T. Nikkei Metales■ Nikkei MC Aluminum (Kunshan)■ Nikkei MC Aluminum (Thailand)■ Toyal America■ CMR Nikkei India■ ■ ■ Nikkei Siam Aluminium■ ■ ■ Nikkei Singapore Aluminium■ Guangxi Zhengrun Nikkei High Purity Aluminum Technol

22■ NI Nikkei Shenzhen

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23

Third-party opinions

Independent Assurance Report

Our responses to previous third-party opinions
The following are opinions about the CSR Report 2016 of the NLM Group and the responses of the group to the opinions.
Major opinions

Responses of the NLM Group

Applicable
pageThis is an extremely easy-to-read and good report that tells us about thecompany’s eagerness toward CSR.

We aim to make our CSR reports understandable for our family members.

All pages

As far as human rights due diligence is concerned, I would like to note the valueof the NLM Group’s moving into action for visiting and exchanging opinionswith suppliers. Also…(snip)… I hope the Group will be able to sustain thismomentum to further promote their responses to social problems throughdialogue and mutual understanding with suppliers and partners.

We carry out activities with a basic rule of providing in-depth explanations to
suppliers and business partners and ensuring their understanding. These are
low-key efforts, but we would like to promote our responses stably as far as
we can reach.

P17

Based on these guidelines, we are enhancing our initiatives at each businesslocation.

P14-15

I hope that a new goal of greenhouse gas emissions will be established in
response to COP21.

We were unable to reduce GHG emissions because our production
performance remained favorable in Japan and overseas. Under thesecircumstances, it was extremely difficult to set a new goal, and we came to a
standstill. We will aim to set one as soon as possible.

P6
P12

I would like to see the Group continuously consider how to contribute to solving
problems that are mainly related to human rights and the environment. Bothperspectives of innovation for its own business method and creation of new
products and services are required.

We would like to implement the PDCA cycle so that we can carry out
activities reflecting international frameworks such as SGDs, in addition tocommunication with our stakeholders and ISO 26000.

P8-9
P12-15

I would like to recognize the fact that the guidelines concerning biodiversity
have been developed.

In the NLM Group’s CSR Report for the fiscal year under review, theviewpoints of “unique corporate culture,” “groundbreaking innovatorof aluminum and beyond,” and “globalization,” which are mentioned
by Mr. Okamoto in the Message from the CEO, constitute a rigid
framework. The report tells us that the group’s initiatives are making
steady progress. This is demonstrated most clearly by the fact thatthe company’s stock was selected as one of the 251 stocks for an
ESG index selected by GPIF.
Above all, I would like to evaluate highly appreciate the following
three points.
The first point relates to the environment. One aspect is the
expansion of the scope of the disclosed information to coveroverseas sites. Starting from the fiscal year under review, data about
overseas sites are included in the actual results of greenhouse gas
emissions. Moreover, the meeting of environmental managers washeld overseas for the first time. Needless to say, it is important toshare information and goals by involving overseas plants and offices.
Second, people from Nikkei Siam Aluminium in Thailand also
participated in a meeting for creating safe, secure workplaces. Thisis a new and highly welcome movement. I hope that the group will
expand this measure further from the next fiscal year onward.
The third point is the steady implementation of human rights
due diligence in the supply chain. This issue will be increasingly
important from a global perspective, and I hope that the groupwill enhance the range of information it discloses in addition tocontinuing to take this initiative.
On the other hand, I should also point out a few issues to be
overcome in the future.
First of all, the most critical issue is the renewal of the greenhousegas reduction target. It is vital to set a goal to be achieved by FY2030. In
doing so, the concept of increasing the reducible amount based on the24

status quo has its limitations. I hope that the NLM Group will recognize
the qualitative difference between a social target and a performancetarget. The former is a target as a challenge for encouraging anorganization to change its mindset for the unpredictable future.
The second issue, which relates to the above, is the increase ingreenhouse gas emissions from the group’s sites in Japan. However,what I am concerned about is not the increase in emissions itself. It isessential that the increase in emissions should not be a psychologicalbarrier to formulating an ambitious new plan. The group must avoid
being excessively preoccupied with immediate issues.
The third issue is CSR activities that are more closely related
to SDGs. The beginning of Step 1 activities in the fiscal year was
an important first step. I hope that the group will ensure that its
CSR activities appeal to a wider range of stakeholders by associatingthem closely with SDGs. I expect the group to take initiatives fortackling global common issues that are unique to a groundbreaking
innovator of aluminum and beyond with a unique set of values.
Finally, I was extremely interested in the special features “NLM
as the Creator of Connection” because all of the articles show
how technologies and products from the NLM Group contribute tocreating social linkages in an easy-to-understand manner.
I would like to close my third-party
opinions by expressing my hope for thefurther progress of the NLM Group’s CSR
activities.

Consulting Fellow, Research Institute of
Economy, Trade and Industry

Mr. Toshihiko Fujii

25

Data

The ★ mark indicates that a third party, KPMG AZSA Sustainability Co., Ltd., has provided independent assurance for the reliability of the data.

Organizational GovernanceInterim and year-end dividend per share
Year

2013

Dividend

(yen)

2014

3

The mark indicates that the data cover 23 consolidated
subsidiaries in Japan.

The Environment
2015

4

2016

5

6

Qualification

8

Human Rights
Number of employees by country/region

Full-time directors
Managerial
employees
Employees

Regularemployees

Asia

U.S. and Europe

Total

23.7

91
125

Noise

21

Vibration

21

162

21

4

187

Noise/Vibration

31

Female0000Dioxins Pollution

46

Male

1,313

184

32

1,529

Female

28

40

5

73

Male

6,566

2,322

203

9,091

Female

1,107

1,291

35

2,433

9,014

Year

2013

Nippon Light Metal Co., Ltd.

3,837

275

13,126
(%)

2014

1.92

Toyo Aluminium K.K.

2015

1.91

2.09

2016

1.89

2.05

2.41

2.06

2.12

2017
2.47
2.05

As of June 1 each year

Number of those who were re-employed after retirement (Nippon Light Metal Co., Ltd.) (number)
2012

2013

34

2014

16

2015

20

2016

17

General Dust Pollution
Qualified Manager of the SpeciallyControlled Industrial Waste Subject
to Special Control(%)

Year and month of joining the company

2010/04

2011/04

2012/04

2013/04

2014/04

Retention rate

97.1

93.2

92.9

98.1

93.7

* Percentage of employees who are still at the company as of April 1 in the year that isthree years after they joined the company

2012

2013

2014

2015

2016

Number

5

8

8

8

8

Labor Practices
Number of new graduates who were recruited (Nippon Light Metal Co., Ltd.)(number)

Fiscal year

2013

2014

2015

2016

2017

Number

54

41

43

47

72

6

Certified Environmental Measurer

Heat/Electricity

94

Density-related

3

Noise/Vibration-related

2012

2013

2014

2015

2016

New hires (number)

148

122

79

98

105

Rate (%)

7

6

4

5

5

(ktons-CO2)

2014

2015

2016

Japan

745

695

748

768

796

Overseas

-

-

-

-

137

* Values for overseas sites began to be aggregated in FY2016.
* CO2 emission factors used in Japan were used for calculating the values for overseas sites.
(tons-CO2/Million yen)

Fiscal year

2012

2013

2014

2015

2016

Intensity

2.41

2.08

2.14

2.09

2.19

Emissions (ktons)

Rate (%)

1,962

96.4

Capital goods

21

1.1

Category 3

Fuel and energy not included in Scope
1 or 233

1.6

Category 4

Upstream transportation and distribution

11

0.5

Category 5

Waste generated in operation

4

0.2

Category 6

Business travel0

0.0

Category 7

Employee commuting

3

0.2

2,035

100

* The emissions are calculated by multiplying the activity amount by the CO2 emission
factor published by the Ministry of Economy, Trade and Industry and the Ministry of theEnvironment.
* The Scope 3 Category 1 emissions are calculated based on the volume of purchase of
the top three items in terms of purchase volume. Of the items, the aluminum ingots arethose purchased by Nippon Light Metal Co., Ltd.

Energy consumption(PJ)

Number of those who left the company

128

124

140

100

134

Rate (%)

6

6

7

5

6

Electricity

8.2

7.8

7.6

8.5

9.5

Fuels

5.8

5.1

5.2

4.9

4.9

Fiscal year
Participation rate

2012
100

2013

2014

100

(%)
2015

100

2016

100

100

Number of workplace injuries
Year

2012

2013

2014

2015

2016

Energy consumption intensity per unit of sales
Fiscal year

2012

2013

2014

2015

2016

Intensity

45.2

38.4

36.4

36.5

39.6

2013

2014

2015

2016

Lost-time injuries (Japan)

18

10

14

13

9

Non-lost-time injuries (Japan)

57

65

63

56

43

(ktons)Fiscal year

2012

2013

2014

2015

2016

Weight

559

543

640

678

618

Lost-time injuries (overseas)

4

2

4

7

8

SOx emissions

Non-lost-time injuries (overseas)

4

1

1

4

9

Fiscal year

2012

2013

2014

2015

2016

Emissions

372

379

402

312

339

Frequency rate of lost-time injuries
Year(tons)

2013

2014

2015

2016

NLM Group

1.17

0.87

0.96

0.70

0.46

Nippon Light Metal Co., Ltd.

0.28

0.29

0.58

0.59

0.00

* Injuries that resulted in one or more days’ absence from work (excluding commuting injuries)* Values for past years were corrected reflecting changes to the boundaries of the NLM Group.

NOx emissions(tons)

Fiscal year

2012

2013

2014

2015

2016

Emissions

380

396

496

437

388

* The value for FY2015 was corrected.

Landfill

Sewerage

Outsidebusiness sites

Ethyl Benzene

19,745

0.0

0.0

0.0

0.0

4,230

80

Xylene35,108

0.2

0.0

0.0

0.0

13,52583

Cumene

3.4

0.0

0.0

0.0

0.0

0.0

87

Chrome and trivalentchrome compounds

0.0

12

0.0

0.0

0.0

4.2

165

2,4-Dichlorotoluene

4.4

0.0

0.0

0.0

0.0

0.0

186

Methylene chloride

55,000

0.0

0.0

0.0

0.0

5,520

243

Dioxins

1,023

26

0.0

0.0

0.0

16.1

2014

2015

2016

273

N-Dodecyl alcohol

16,944

0.0

0.0

0.0

0.0

8,200

Emissions

88

94

79

92

109

281

Trichloroethylene

10,200

0.0

0.0

0.0

0.0

6,780

296

1,2,4-Trimethyl benzene

14,213

0.0

0.0

0.0

0.0

31,154

Fiscal year

2012

Recycled/Reduced

2013

28.6

2014

34.3

38.9

297

1,3,5-Trimethyl benzene

6,900

0.0

0.0

0.0

0.0

6,699

300

Toluene127,130

0.7

0.0

0.0

0.0

137,450

2016

308

Nickel

0.0

19

0.0

0.0

0.0

33.1

33.5

309

Nickel compounds

0.0

0.0

0.0

0.0

32.3

690

321

Vanadium compounds

0.0

0.0

0.0

0.0

0.0

0.1

349

Phenol

330

14

0.0

0.0

0.0

0.0

374

Hydrogen fluoride and its
water-soluble salt

0.6

0.0

0.0

0.0

0.0

0.0

384

1-Bromopropane

9,800

0.0

0.0

0.0

0.0

0.0

392

N-hexane

5,257

0.0

0.0

0.0

0.0

772

(ktons)2015
33.2

Disposed (landfill)

3.5

2.2

2.0

2.4

2.9

Total

32.1

36.5

40.9

35.6

36.4

Environmental accounting[(1) Environmental conservation expenditure](million yen)

405

Boron compounds

190

44,000

0.0

0.0

730

2,071

Pollution prevention cost

667

1,034

412

Manganese and its
compounds

0.0

0.0

0.0

0.0

0.0

3.1

Environmental
conservation cost

880

138

438

Methylnaphthalene

347.1

0.0

0.0

0.0

0.0

0.0

448

Methylenebis(4,1-Phenylene) =Diisocyanate

0.0

0.0

0.0

0.0

0.0

86

Investment

Resource circulation
cost

Expenditure

457

842

Upstream/Downstream costs

0323Management costs

5

185

R&D costs

0

3,255

Social activity costs

010

Environmental remediation costs

0

61

2,009

5,847

Total

[(2) Economic effect of environmental conservation activities]
Earnings
Changes in expenditure*1*2 (million yen)(million yen)
Details

Total

Earnings from recycling
waste produced in thecourse of main businessactivities, including
earnings from sales ofvaluables, and recycling
used products
Total

397

397

Total
2,833

Water expenditure

4

Waste disposal expenditure-85

VOC*3 processing expenditure

14

Legally required
contributions to the
reduction of restrictedhazardous substances(Example: SOx pollution levy)

3

Fiscal year
Number of cases

2012
0

2013
0

2014
0

2016
0

Number of accidents and complaints related to the environment
Fiscal year
Accidents
Complaints

2012
3
5

2013
1
7

2014
1
7

2015
2
11

2016
3
4

Number of cases that were reported to NIKKEI HOTLINE and where
noncompliance was suspected, resulting in investigations or an attempt toreach a solution
Fiscal year
Number of cases

2012
13

2013
10

2014
7

2,770

(million yen)

Fiscal year
Number of meetings held
Number of participants (total)

2012
1,435
15,3542013
1,623
17,136

2015
3

2016
9

2014
1,874
18,5472015
2,038
19,6002016
2,230
19,991

2014
153
176

2015
180
93

2016
126
143

Number of patent publications and registrations
Fiscal year
Number of publications
Number of registrations

2012
149
194

2013
149
153

Consumer Issues
Number of violations of laws or regulations in the provision of products/services

Fiscal year

2012

2013

2014

2015

2016

Investment

1,615

1,014

1,526

1,612

2,009

Fiscal year
Number of cases

Expenditure

6,643

5,903

4,925

5,517

5,847

Number of quality-related prompt reports and recalls* Figures for FY2012 to FY2015 were corrected.

(million yen)

Fiscal year

2012

2013

2014

2015

2016

Earnings

382

357

433

383

397

Changes in
expenditure

-246

-350

-415

3,174

2,770

* - (minus) indicates an increase in expenditure

2015
0Compliance meeting*1: Changes in expenditure are calculated using the following formula:
Changes in expenditure = expenditure incurred during a base period (FY2015) –expenditure incurred during the current year (FY2016)*2: - (minus) indicates an increase in expenditure*3: Volatile Organic Compounds

Environmental conservation expenditure

Number of cases of lawsuits, penalties, or forfeitures related to the environment

Fair Operating Practices

Details
Energy expenditure

Economic effect of environmental conservation activities* The value for FY2015 was corrected.

2012

Soil

53

30.5

(tons)

Movement
Business sites

2013

Total

(GJ/million yen)

Weight of raw materials used in production
2012

26.1

Public water
Atmospheredistrict

2012

Category

Breakdown of Scope 3 emissions

Fiscal year

Labor Union participation rate (Nippon Light Metal Co., Ltd.)

26.3

2016

Name of substances

Fiscal year

Costs incurred
within business area

Category

27.9

2015

Emissions and disposal of waste and waste byproducts

2013

Category 2

29.0

2014

* Figures for FY2012 to FY2015 were corrected.

2012

Purchased goods and services(million m3)

2013

COD emissions

Fiscal year

Category 1

2012

Total amount ofdischarged water

0

Greenhouse gas emissions (Scope 1 and Scope 2)

Total

Number and rate of new hires and those who left (Nippon Light Metal Co., Ltd.)Fiscal year

Infectious waste

Qualified Person for Energy Management

Number of employees who newly took childcare leave (Nippon Light Metal Co., Ltd.) (number)
Fiscal year133

* We began to calculate the quantity in FY2015. (The seawater
intake quantity is not included.)

Fiscal year

9

Non-infectious waste

EmissionsNo.

Total amount of discharged water

23

Qualified Engineer of the Industrial Waste Treatment Facility

Greenhouse gas emission intensity per unit of sales

26

Three-year retention rate (Nippon Light Metal Co., Ltd.)

26

2016

22.6

Air Pollution

Pollution Control Manager

Employment rate of people with disabilities

Number2015

Quantity

Male

Total

Fiscal year

Fiscal year

Water Pollution(number)Japan(number)Class 1 designatedchemical substances (kg)
(mg-TEQ for dioxin, etc.)

 missions of substances controlledEunder the PRTR

(million m3)

Number of employees
who have acquired it

Employees with official environmental qualifications

2017

Quantity of water intake

Fiscal year
Prompt reports
Recalls

2012
0

2012
14
4

2013
0

2013
5
0

2014
0

2014
8
1

2015
0

2016
0

2015
8
3

2016
10
4

Community Involvement and Development
Expenditure related to social contribution
Fiscal year
Expenditure

2012
71

2013
95

(million yen)
2014
121

2015
117

2016
163

27

CONTACT INFORMATION

Nippon Light Metal Holdings Company, Ltd.
CSR Contact, CSR & Auditing Administration Department
Tennozu Yusen Bldg, 2-2-20 Higashi Shinagawa, Shinagawa-ku, Tokyo, 140-8628
TEL: +81-3-5461-8601
Fax: +81-3-5461-9188