LIXIL Group
Corporate Responsibility Report 2017

Contents
LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
Reporting

03 Our Approach

39 Environment

56 Customers & Supply Chain

04 Message

40 Environmental Management

57 Responsible Supply Chain Management

07 Corporate Responsibility (CR) Strategy

42 Greenhouse Gas Reduction

60 Product Safety & Quality

08 CR Management Structure

45 Sustainable Water Use

63 Customer Satisfaction

09 Material Issues

48 Sustainable Use Of Resources

11 Key Performance Indicators

50 Performance

17 Three Strategic Pillars

51 Society

18 Global Sanitation & Hygiene

52 Human Rights

21 Water Conservation &53 Stakeholder Engagement

64 Reporting
65 Scope Of Reporting
66 CR Library
67 Global Reporting Initiative (GRI) Index

Environmental Sustainability
24 Diversity & Inclusion

26 Our People
27 A Fair & Rewarding Workplace

Corporate GovernanceSee the Corporate Governance section on the LIXIL Group Corporation website (http://www.lixil.com/) for information on the Corporate
Governance Framework, the Group Management Philosophy, Group Charter of Corporate Behavior and Internal Control Systems.

30 Work Safety & Well-being
32 Talent Development
35 Diversity & Equal Opportunity
38 Performance
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LIXIL Group Corporate Responsibility Report 2017

■ Reporting period■ Applicable organizations

FY2016 (April 1, 2016 to March 31, 2017)

CR activities of LIXIL Group Corporation, as well as LIXIL Corporation andother consolidated subsidiaries are covered in the report.
The scope is provided in footnotes for matters that have narrower
coverage.

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Message
Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues
Key Performance Indicators

Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
Reporting

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03

LIXIL Group Corporate Responsibility Report 2017

Our Approach
We are committed to enhancing living spaces
through responsible engagements and initiatives around the world.

Messagethrough our products and services.
To mitigate global climate change, the Paris Agreement set a long-term ambition to achieve abalance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in thesecond half of this century.

LIXIL Group

Corporate

In order to contribute to this carbon-neutral future, LIXIL Group created a new Environmental
Vision. By 2030, the positive environmental contribution from our products and services will surpass

Responsibility

Message from the CEO

Report 2017

As a global citizen, we are committed to creating a positive
impact on society through responsible business operations andOur Approachsustainable innovation.
I have always been motived by the opportunity to make acontribution to society, and it was this passion that moved me to

Message
Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues
Key Performance Indicators

Three Strategic Pillars
Our People

become an entrepreneur and corporate leader.
I believe that a strong commitment to corporate responsibility iscore to LIXIL's long-term success, and that our CR strategy shouldalign with our business strategy.
The LIXIL Group has been a signatory of the United Nations
Global Compact (UNGC) initiative since July 2013. In addition to
supporting and implementing the ten principles of the UNGC
in the areas of human rights, labor, the environment and anticorruption, we are also taking action towards accomplishing
the Sustainable Development Goals (SDGs) established by the UN, with a target date of 2030. These

Environment

goals include aims such as to "ensure healthy lives and promote wellbeing for all at all ages" and "ensure

the environmental footprint from our entire business process, thus achieving a Net Zero environmental
footprint. We will achieve this through innovative technologies, such as low-carbon and water-efficienttechnology, and also by reducing environmental impact in every process of the business, including
procurement, production, product use and disposal.
Furthermore, to foster an organizational culture in which diversity is valued, we announced our
LIXIL Diversity and Inclusion Declaration, a revised version of the LIXIL Diversity Declaration publishedin 2013, and clarified the importance of open, honest dialogue and entrepreneurial values. To achievesustainable growth in a market where customer needs are increasingly diverse, it is vital to encourage
a diverse workforce to apply and optimize their individual capabilities. Under our new Declaration, we
will empower employees to maximize their skills by encouraging mutual respect, and foster a corporate
culture that instills a desire to constantly tackle challenges with a true entrepreneurial spirit.
We remain committed to engaging on global issues by leveraging our global network, expertiseand experience, and contributing to improving people's comfort and lifestyles.
October 2017
Director, Representative Executive Officer, President & Chief Executive Officer (CEO),LIXIL Group Corporation
Kinya Seto

access to sanitation for all".
Society

Even today, approximately 2.3 billion people, one third of the global population, live without accessto proper sanitation. To help resolve this sanitation and hygiene crisis, we have been developing a range

Customers & Supply Chainof solutions to improve sanitary conditions. For example in 2013, we developed our first product under
the SATO brand, an innovative toilet pan for developing countries, and in 2016, established a dedicated

ReportingContents Next

social considerations facing our communities and our planet, we firmly believe that sustainable andpeople by the year 2020.

responsible operating practices not only enhance our competitiveness for the short and long term, but

protection, to be critical to today's business agenda. As a company that provides products, materials

LIXIL Group Corporate Responsibility Report 2017

Corporate Responsibility (CR) is core to our business philosophy. Given the environmental andinitiatives to meet our target of providing improved access to sanitation and hygiene for 100 million
We also consider environmental challenges, such as water conservation and environmental
04

Committee Chairperson

business unit to promote the broader use of SATO products and allow us to respond to local demand.
To date, over 6 million people in more than 15 countries are using SATO. We will accelerate thesePrev.

Message from the Corporate Responsibility (CR)and solutions for people's everyday living spaces, LIXIL pledges to provide environmental solutions

such practices make LIXIL a more trusted contributor to the communities in which we work and live.
FY2016 was a significant year for LIXIL's progress on CR. It was the first year following the launchof both our global CR strategy and, by coincidence, the UN's Sustainable Development Goals (SDGs).

We welcome the collaborative approach outlined in the SDGs
between government, business and civil society and our CR
strategy is well-aligned with these goals.

LIXIL Group

Corporate
Responsibility
Report 2017

This year, we made steady progress against the three pillars
outlined in our CR strategy. On improving Global Sanitation& Hygiene, we see it as an age-old challenge whose time hascome for some new thinking and new solutions. We launched a
dedicated business unit within LIXIL to scale up and accelerate
new product development for communities without access tosafe sanitation, and expanded SATO business operations and the
SATO line of products, a range of simple and innovative toilet

Our Approach

solutions for rural communities. We are also actively engaged
in advocacy to enhance awareness globally of the urgency to

Message
Corporate Responsibility (CR) Strategy

improve sanitation for the estimated 2.3 billion people today
who lack a clean and safe toilet for daily living.

CR Management Structure

On Water Conservation and Environmental Sustainability, we developed a robust global EHS

Material Issues

management system that keeps us on track toward our goal of being "Net Zero" by 2030. To increase

Key Performance Indicators

our environmental contribution through products, we successfully launched a variety of innovative
energy-saving products globally, such as ultra-high-efficiency toilets H2Option and H2Optimum inThree Strategic Pillars

North America and ERSTER S, the top-level insulation resin window, available in Japan.
On Diversity and Inclusion, in addition to launching universal design products worldwide, we launched

Our People

our first contract-based facility management business for serviced retirement homes, Premio
Kawaguchi, reflecting the needs of the rapidly aging Japanese population.

Environment
Society
Customers & Supply Chain
Reporting

One year after its launch, our CR strategy influences the decisions we make and ensures thatsustainable and responsible ways of operating are properly embedded within LIXIL. With a strong
foundation built in FY2016, LIXIL will continue to accelerate our CR initiatives in FY2017.
October 2017
Executive Officer and Senior Managing Director, Public Affairs, Investor Relations, External Affairs,
and Corporate Responsibility,
LIXIL Group Corporation
Jin Song Montesano

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LIXIL Group Corporate Responsibility Report 2017

Commitment to the UN Global Compact
The LIXIL Group signed the United Nations Global Compact (UNGC) in
July 2013 in full support with the principles set out in the framework.
Our corporate philosophy is to contribute to improving people's comfort
and lifestyles. To fulfill that aim through our operational activities,
we are driving a range of R&D and various initiatives to help resolve
global sanitation and hygiene problems as well as other social andenvironmental issues.
To meet and exceed society's expectations for the LIXIL Group,
we must take active leadership as a comprehensive living and housing
solutions company. We will not only put the UNGC's 10 Principles into
practice, but also assist the UN efforts towards achieving the Sustainable Development Goals by
providing our expertise in areas of sanitation to help create a safe living space for all.

The Ten Principles
Principle 1: Businesses should support and respect theprotection of internationally proclaimed
human rights; andPrinciple 2: make sure that they are not complicit inhuman rights abuses.
Principle 3: Businesses should uphold the freedom of
association and the effective recognition of
the right to collective bargaining;
Principle 4: the elimination of all forms of forced andcompulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respectof employment and occupation.

Principle 7: Businesses should support a precautionary
approach to environmental challenges;
Principle 8: undertake initiatives to promote greater
environmental responsibility; and

LIXIL Group

Principle 9: encourage the development and diffusion ofenvironmentally friendly technologies.

Corporate
Responsibility

Principle10: Businesses should work against corruption in
all its forms, including extortion and bribery.

Report 2017
Our Approach
Message
Corporate Responsibility (CR) Strategy

United Nations Global Compact >Sustainable Development Goals

CR Management Structure
Material Issues
Key Performance Indicators

The United Nations Sustainable Development Goals (SDGs) is a concrete plan of action outlined in theTransforming our World: The 2030 Agenda for Sustainable Development results-oriented document
adopted by the United Nations General Assembly in September 2015, consisting of 17 global goals andThree Strategic Pillars
Our People

169 targets related to sustainable development.
The LIXIL Group reflects the SDGs approach in its corporate responsibility strategy and uses the goals asa broad guideline when forming management decisions.

Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

United Nations Sustainable Development Goals >Corporate Responsibility (CR) Strategy

3.Diversity & Inclusion
Embrace the diversity of people in society and within LIXIL. This includes enhancing
quality of life and wellbeing for the elderly and the physically disabled through LIXIL

LIXIL Group

Corporate
Responsibility
Report 2017

products and services, as well as harnessing the intelligence and perspectives of LIXIL's
LIXIL is committed to enhancing living spaces through innovative responsible engagements andinitiatives around the world.

diverse workforce, as an engine for growth and innovation.
more >At LIXIL, we believe that our living spaces - the environment where we live, work and play - are criticalto our daily lives and wellbeing. As a result, we are committed to ensuring that the growth of ourbusinesses contributes to improving the quality of people's lives, by delivering safe and comfortable

Our Approachproducts and services through responsible and sustainable innovations. Leveraging the scale andexpertise of our four core technology business units, we are focused on making a positive impact in the

Message
Corporate Responsibility (CR) Strategy

communities in which we operate and on matters that require urgent action:
Process of identifying the Three Strategic Pillars >CR Management Structure
Material Issues
Key Performance Indicators

Three Strategic Pillars
Our People

1.Global Sanitation & Hygiene
Promote and enable access to safe and hygienic sanitation practices, especially for
women and girls, while preventing the harmful transmission of diseases for children.
more >

Environment
Society
Customers & Supply Chain
Reporting

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2.Water Conservation & Environmental Sustainability
Conserve water, energy, and other natural resources utilized in and by LIXIL products
and services, including in the supply chain, production, distribution and during end use.
more >

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LIXIL Group Corporate Responsibility Report 2017

View PDF >CR Management Structure
LIXIL Group

Corporate
Responsibility
Report 2017

LIXIL's Corporate Responsibility (CR) Committee was established to align with the technology business
operating model that was established in June 2015. The CR Committee succeeds the CSR Promotion
Committee, which had been in place since 2012, and works to ensure swifter action in response to
economic, environmental and social sustainability issues.
Management leadership and coordination with the technology businesses is critical to achieve

Our Approach

prompt and appropriate actions. Accordingly, Executive Officers in charge of the corporate functions,
namely HR, Legal, Public Affairs, Finance, Quality, Environment, Technology, and R&D, as well as

Message
Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues
Key Performance Indicators

Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

representatives from each of the technology businesses have been appointed as members of the CR
Committee.
The outcomes from CR Committee meetings are presented to LIXIL Group's Board of Directors andExecutive Officers Committee for final approval, and decisions are immediately communicated downfrom the Executive Officers to the respective functional divisions and swiftly executed.

Material Issues

Category

LIXIL Group

Corporate
Responsibility
Report 2017

List of LIXIL Group's Material Issues

The issues outlined in our corporate responsibility (CR) strategy and framework are based on a rigorous
materiality selection process, as described below, which ena bles us to identify the issues that mattermost to our stakeholders and our Group. We have set medium-term action plans focusing on each ofthese material issues, and will be disclosing the progress and results of related activities on this website.

Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues

As a global company, maintaining strong corporate

Compliance*is also an issue that has become of increased interest to
our shareholders with the adoption of Japan's Corporate

Risk management*

Governance Code in 2015.
While expanding our global reach, our corporate

Information security

Material Issues Selection Process

our efforts to strengthen our corporate governance,compliance, and risk management systems.

Transparent political relations

Human rights due diligence*

Our People
Diversity and equal opportunity*

Environment

Occupational health and safety*

Society

Employee hiring and retention
Labor Practice

Customers & Supply Chain

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LIXIL Group Corporate Responsibility Report 2017

Labor-management relationshipWorking environment
Talent development

ReportingLocal job creation

Quality andSatisfaction

accounting irregularities at an overseas subsidiary.

Intellectual property strategy

Three Strategic Pillars
Human Rights

governance was put to test in 2015, when we discovered
To prevent recurrence of such incident and solidify
our operating foundation, we must further advance

Fair business

Key Performance Indicators

governance practices is of critical importance to LIXIL. It

Taxation strategy

Anti-corruption*
Fair Business
Practices

Background and Reason

Corporate governance*

Governance

Our Approach
Message

Material Issues*Highlights issues that require focusedpriority action

Product safety*
Customer satisfaction

Corruption is detrimental to the development of asustainable society. Global scrutiny towards bribery andfraud is intensifying, and extraterritorial application ofpenalties is increasing rapidly.
With the UN's adoption of Guiding Principles on
Business and Human Rights clarifying the responsibilityof companies to uphold human rights, protecting andrespecting human rights both within the LIXIL Group andacross its entire sphere of business influence have becomea greater priority.
With global expansion, our business and organizational
structure have become more complex and diverse. We
therefore need to grasp and manage appropriately risks
related to occupational health and safety across theGroup.
Diversity is vital to innovation. Companies worldwide are
increasingly focused on attracting and retaining highcaliber employees. We are actively promoting diversity inline with the LIXIL Diversity Declaration, but we need topush ahead further in pursuing this cause.
Product safety is a top priority for the LIXIL Group asa manufacturer. Serious product defects can cause
customer anxiety and greatly affect the reliability andreputation of our products.

Category

Greenhouse gas reduction*

LIXIL Group

Corporate

Material Issues*Highlights issues that require focusedpriority action

Water conservation*
Environment

Responsibility

Sustainable use of raw materials*

Report 2017

Environmental management

Background and Reason
The adoption of the Paris Agreement to combat
climate change by 196 parties has shaped a clear
direction towards future decarbonization. Global
water shortage is intensifying and we need to do
more to protect water, energy and other natural
resources throughout the LIXIL Group value chain,from procurement to production, distribution, productuse and disposal.
Stakeholder interest in responsible suppliermanagement has grown in line with the developmentof international standards on sustainable procurement.

Our Approach
Supply Chain

Supply chain management*

Message

Europe, North and South America, and the Middle
East, and we need to do more to promote responsible
supplier management.

Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues

Stakeholder engagement andcollaboration*

Key Performance Indicators

Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
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LIXIL Group Corporate Responsibility Report 2017

The LIXIL Group's manufacturing footprint expands
across Japan, China and the Asia-Pacific, as well as,

Stakeholder
Engagement

R&D for solving social problems*
Contribution to Global Sanitation& Hygiene*

The UN Sustainable Development Goals havegalvanized companies into helping solve social
problems. As a comprehensive living technology
company, we need to cooperate with stakeholders
and focus more on R&D designed to help solve
social issues, such as graying society, hygiene and theenvironment.

Key Performance Indicators

Action plan

Strengthen compliance-related education and training
1. Develop training for Group Code of Conduct and ensure each employees' commitment
2. Strengthen training by regions and corporate positions

KPI

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Message
Corporate Responsibility (CR) Strategy

1. Basic training and commitment to Group Code of Conduct (%)
2. Implementation of training by regions and corporate positions (%)

Action plans, KPIs and targets for specific material issues are determined as below. We will report ourTarget for FY2016

progress and results on each issue on this website. The below provides an overview of the main issues.
Progress as of 2016

Governance
Enhance group governance to maximize our corporate values.

・Implemented key basic training programs for all new graduate hires, new managers,and directors in Japan
Target for FY2017

Risk management
TargetEstablish global-standard governanceAction plan

Establish a Group governance system

KPI

Coverage of improved governance rules and procedures (%)

Target for FY2016

・Implement Corporate Governance Guidelines and commitments
・Appoint independent outside directors as chairs of the Nomination, Compensation and
Audit Committees

Environment
Progress as of 2016

Society
Target for FY2017

・Established standards within Corporate Governance Guidelines for dealings with relatedparties. Conducted Board of Directors self-appraisal
・Appointed independent outside directors as chairpersons of the Nomination,
Compensation, and Audit Committees
・Set clear rules and procedures for business boards and other committee groups
・Ensure 100% coverage of improved governance rules and procedures

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LIXIL Group Corporate Responsibility Report 2017

TargetTargetEstablish and operate a Group-wide enterprise risk management system, and nurture arisk management culture in the organization

Action plan

Establish a risk management system to contain the occurrence of crisis events andminimize damage

KPI

Coverage of the risk management system across Group companies (%)

Target for FY2016

・Clarify risk definitions to ensure common understanding throughout the Group

Progress as of 2016

・Established an action plan, including risk definitions and risk management system to be
developed from FY 2017

Target for FY2017

・Establish a set of systems, processes and rules to identify, analyze, evaluate and respondto significant risks (Boundary: all Group companies.)

Intellectual property (IP) strategy

Compliance
Prev.

・Build a system for compliance education and training
・Group-wide basic training and commitment to the Group Code of Conduct: 100%・Group-wide implementation of training by region and corporate position: 100%

Corporate governance

Our People

Customers & Supply Chain

・Established Group-wide basic training and acknowledgment mechanism under Group
Code of Conduct. Achieved 99% acknowledgment rate in Japan and 94% overseas
・Consolidated FY2017 reporting framework for status of training and completion fromeach technology business unit

Key Performance Indicators

Three Strategic Pillars

・Inspect high-risk regions and implement a compliance system and training plan, basedon the observations
・Develop training programs by regions and corporate positions, and a mechanism tomonitor the training record

For more details, please see the report pages for each activity.

CR Management Structure
Material Issues

Group-wide:

Develop comprehensive and effective compliance structure across the Group

TargetMaximize the value of the Group's intellectual property by operating a streamlined global
IP governance system

Action plan

Extend the global reach and functionality of the IP Committee (IPC)

KPI

Number of meetings of IPC, designed to maximize the value of Group IP

Target for FY2016

・Convene IPC meetings to decide how to drive forward the Group-wide IP management

Progress as of 2016

・Convened LWT IP Committee at GROHE and ASB

Target for FY2017

・Build a system to monitor IP creation, maintenance and application at individual
technology businesses, as well as external IP disputes and IP contractual relationships

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Message

Human Rights
Advance human rights across the business to operate as a responsible corporate citizen.

・Convene IPC meeting at least twice a year

Detailed action plan, KPI and target for :Governance >Human rights due diligence
Targetoperational influence across our entire value chain

Fair Business Practices
Engage all employees and officers in our business operations with a high standard of corporate ethics.

Action plan

Create a LIXIL Group Human Rights Principles and promote awareness amongst all LIXILGroup employees

KPI

Implementation of Human Rights Principles learning across the Group (%)

Target for FY2016

・Ensure full implementation across the Group

Progress as of 2016

・In Japan, LIXIL Corporation fully implemented a human rights policy education
program in the form of quarterly interactive departmental meetings

Target for FY2017

・Implementation of training in main LIXIL Corporation overseas subsidiaries: 100%

Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues

Anti-corruption

Key Performance Indicators

Three Strategic Pillars

TargetDevelop an effective anti-corruption mechanism across the Group

Action plan・Establish a Group Compliance Policy and Group Compliance Guideline

KPI

Our People
Environment

Progress as of 2016

・Developed six global polices (concern-raising, anti-corruption, conflict of interest, faircompetition, international trade controls, and anti-discrimination and harassment) andemail investigation guidelines based on risk assessments attained through inspectionsof high-risk regions and analysis of internal reporting incidents
・As a subset of the Group Code of Conduct, established Policy on Third Party
Compliance for Suppliers, Anti-Money Laundering Policy, and Global Gifts andEntertainment Guidelines

Target for FY2017

・Group-wide compliance-related education and training ratio: 100%

Detailed activities for :Prev.

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LIXIL Group Corporate Responsibility Report 2017

Compliance >Human Rights >Group-wide:・Under the Group Code of Conduct, create Group-wide policies and guidelines for anticorruption and transparent political relations

Customers & Supply Chain

Detailed activities for :・Compliance-related education and training ratio (%)

Target for FY2016

Society

ReportingAppropriately manage human rights considerations that fall within the scope of ourLabor Practice
Build a strong corporation and workplace where all employees can achieve their fullest potential.

Working environment
TargetBuild a worker-friendly environment for all employees

Action plan

Conduct a regular employee awareness survey across the Group

KPI

Implementation of action plans derived from the global employee awareness survey
across the Group (%)

Target for FY2016

・Implementation of action plans derived from the 2015 global employee awarenesssurvey across the Group: 100%Progress as of 2016

・Implemented actions in each organization based on the results of the Group-wide
employee survey conducted during FY2015

LIXIL Group

Corporate

・Set up the LIXIL Engagement Committee and shared best practices Group-wide via theintranetTarget for FY2017

Responsibility
Report 2017

・Implementation of action plans derived from the 2017 global employee awarenesssurvey across the Group: 100%

Diversity and equal opportunity
TargetSecure highly competent people by respecting diversity across the Group

Action plan

Promote the active participation of women in the workplace

KPI

Percentage of women among regularly recruited new hires (Japan only) (%)

Corporate Responsibility (CR) Strategy

Target for FY2016

・Percentage of women among regularly recruited new hires in March 2016: over 30%

CR Management Structure

Progress as of 2016

Percentage of women among regularly recruited new hires in April 2017: 30.8%

Material Issues

Target for FY2017

・Percentage of women among regularly recruited new hires (Japan only): over 30%

Our Approach
Message

Key Performance Indicators

Three Strategic Pillars

Quality and Satisfaction
Strengthen relationships with customers through our products and services.

Product safety

TargetEradicate product accidents

Action plan

Make continuous improvements to the product quality management system

KPI

Number of serious product accidents across the Group (#)

Target for FY2016

・Zero cases of serious product accidents across the Group・Extend product safety strategy by setting specific KPI for each technology business

Progress as of 2016

・Four serious product accidents across the Group. Held a product accident conference
to share details of the experience and confirm countermeasures

Target for FY2017

・Number of serious product accidents across the Group: 0 cases

Detailed activities for :Occupational health and safety

Product safety & Quality > Customer satisfaction >TargetEstablish an Environment, Occupational Health and Safety (EHS) management system
across the Group

Action plan

Build a common Group EHS management system

KPI

Group-wide coverage of EHS management system (%)

Target for FY2016

・Set up a Group EHS Committee
・Formulate Group-wide operational rules (EHS manual, EHS emergency response
guidelines, EHS governance inspection guidelines)

environmental efficiencies over all operational processes.

Customers & Supply Chain

Progress as of 2016

Greenhouse gas reduction

Reporting・Scope of EHS performance data capture (employees): 98%
・Developed and implemented Group Occupational Health and Safety Policy, core rules
such as the EHS manual and EHS internal audit guidelines

Target for FY2017

・Group-wide operational scope of occupational health and safety covered by the EHS
management system: 98%

Our People
Environment
Society

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LIXIL Group Corporate Responsibility Report 2017

Contribute to a sustainable society through innovative products and services, and improving theTargetPromote reduction in greenhouse gas emissions across the Group

Action plan

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services
・Improve CO2 emissions/units

KPI

Group-wide:
1. Benefits from CO2 emissions reduction achieved from the products and services

Detailed activities for :A Fair & Rewarding Workplace > Work Safety & Well-being > Talent development > Diversity and

13

Environment

Equal Opportunity > Performance >2. Levels of CO2 emissions across all operational processes

Target for FY2016

1.Create a guideline for calculating the decrease in CO2 emissions to help achieve our

Progress as of 2016

increased by 1.08 times (compared to FY2015). Created Guideline for Calculation of

mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor

Corporate

Environmental Contribution to clarify calculation method for individual products andservices, and calculated results based on FY2015 performancethe FY2015 result
2.Target -1.6% compared to FY2015, in FY2016 compared to FY2015 to achieve our new
mid-term CO2 emissions target for FY2016-20 (-8% v. FY2015)

LIXIL Group

2.CO2 emissions from operational processes increased by 5% (compared to FY2015). Set
targets and initiatives for each business organization in compliance with med-termtargets*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Progress as of 2016

1.Contributions from CO2 emissions reduction achieved from products and services

・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify
calculation method for all processes from procurement of raw materials through to
product disposal

1.Contributions from CO2 emissions reduction achieved from products and services

Responsibility

increased by 1.08 times (compared to FY2015). Created Guideline for Calculation ofEnvironmental Contribution to clarify calculation method for individual products andReport 2017

2.CO2 emissions from operational processes increased by 5% (compared to FY2015). Set

services increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2

targets and initiatives for each business organization in compliance with med-termtargets

emissions target for FY2016-20
2.Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%
(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20

services, and calculated results based on FY2015 performance

・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify
calculation method for all processes from procurement of raw materials through to
product disposal

Our Approach
Message

Target for FY2017

emissions target for FY2016-20
2.Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%
(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20

CR Management Structure
Material Issues
Key Performance Indicators*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Society

TargetPromote efficient use of water resources across the Group

Action plan

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services
・Improve efficient use of water resources

KPI

Group-wide:
1. Benefits from CO2 emissions reduction achieved from the products and services
2. Levels of CO2 emissions across all operational processes

Target for FY2016

1. Create a guideline for calculating the decrease in CO2 emissions to help achieve our
mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor
the FY2015 result
2. Target -1.6% compared to FY2015, in FY2016 compared to FY2015 to achieve our new
mid-term CO2 emissions target for FY2016-20 (-8% v. FY2015)

Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Sustainable use of raw materials
TargetPromote sustainable use of resources across the Group, from procurement throughdisposal of raw materials

Action plan

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services
・Improve waste recycling ratio

KPI

Group-wide:
1. Benefits from CO2 emissions reduction achieved from the products and services
2. Levels of CO2 emissions across all operational processes

Target for FY2016

1. Create a guideline for calculating the decrease in CO2 emissions to help achieve our
mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor
the FY2015 result
2. Target -1.6% compared to FY2015, in FY2016 compared to FY2015 to achieve our new
mid-term CO2 emissions target for FY2016-20 (-8% v. FY2015)

Water conservation

Our People
Environment

1.Group-wide benefits from CO2 emissions reduction achieved from products and

1.Group-wide benefits from CO2 emissions reduction achieved from products andservices increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2

Corporate Responsibility (CR) Strategy

Three Strategic Pillars

Target for FY2017*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Progress as of 2016

1.Contributions from CO2 emissions reduction achieved from products and services
increased by 1.08 times (compared to FY2015). Created Guideline for Calculation ofEnvironmental Contribution to clarify calculation method for individual products andservices, and calculated results based on FY2015 performance
2.CO2 emissions from operational processes increased by 5% (compared to FY2015). Set
targets and initiatives for each business organization in compliance with med-termtargets
・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify
calculation method for all processes from procurement of raw materials through to
product disposalTarget for FY2017

1.Group-wide benefits from CO2 emissions reduction achieved from products andservices increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2

Stakeholder Engagement

emissions target for FY2016-20
2.Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%

Proactively engage with LIXIL's key stakeholders for better business management.

(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20

LIXIL Group*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Corporate

Stakeholder engagement and collaboration

Responsibility

Detailed activities for :Report 2017

Environmental management > Greenhouse gas reduction > Sustainable Use Of Resources >TargetProactively engage with LIXIL's key stakeholders for better business management

Performance >Action plan

Hold regular stakeholder engagement meetings, and disclose the content of thesemeetings

Our Approach
Message
Corporate Responsibility (CR) Strategy
CR Management Structure
Material Issues

KPI

Supply Chain

meeting content
Target for FY2016

・Extend the reach of currently implemented mechanisms and encourage moresophisticated and effective engagement initiatives
・Encourage the sharing and adaptation of successful engagement initiatives across theGroup

Progress as of 2016

・Engaged at least once with each stakeholder
・Collected and shared information on stakeholder engagement across the Group

Target for FY2017

・Hold at least ore annual dialogue with each group of stakeholders (stakeholders,
employees, business partners, local residents, end users, suppliers, etc)

Through responsible management of the overall supply chain, deliver a stable portfolio of products
and fulfill stakeholder accountability.

Key Performance Indicators

Supply chain management
Three Strategic Pillars
Our People

TargetIdentify supplier's CR risk, and establish a mechanism to respond accordingly

Action plan

Extend our Japanese CR procurement process across the Group

KPI

Responsible procurement surveys coverage ratio (based on purchased amount) (%), andpercentage of suppliers which satisfy CR management standards (%) and improvement
rate (%)

Environment
Society
Customers & Supply Chain
Reporting

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Target for FY2016

・Promote Group-wide awareness of the LIXIL Group's procurement strategy
・Implement existing CR procurement process across the Group

Progress as of 2016

・Achieved responsible procurement surveys coverage ratio of 85% in Japan and
80% outside of Japan, Proportion of suppliers that meet CR management standards
conformity rate of 94% in Japan and 88% outside of Japan

Target for FY2017

・Achieve responsible procurement surveys coverage ratio (based on purchased amount)of 90% in Japan and 60% outside Japan, 90% conformity rate, and 100% improvement
rate

Detailed activities for :15
LIXIL Group Corporate Responsibility Report 2017

Contribution to Global Sanitation & Hygiene
TargetHelp improve global hygiene and sanitation through our business

Action plan

Launch and develop a business

KPI

・Number of beneficiaries

Target for FY2016

・Form a solid operational platform for legal affairs, intellectual property, etc

Progress as of 2016

・Generated 6.24 million beneficiaries as of March 31, 2017
・Created a support team of HQ specialists to help form solid business platforms inindividual countries
・Created new SATO brand guidelines
・Strengthened advocacy activities

Target for FY2017

・Generate 10.9 million beneficiaries by March 31, 2018 in order to achieve our 2020
target of 100 million beneficiaries*exclude GROHE Group S.a r.l., American Standard Brands and PERMASTEELISA GROUP*exclude PERMASTEELISA GROUP

Responsible Supply Chain Management >Number of stakeholder meetings held across the Group (#). Meeting quality based on

R&D for solving social problems
TargetCreate products that contribute to the environment

LIXIL Group

Action plan

Pursue product R&D that is designed to help resolve problems for elderly people andCorporate

KPI

Development of IoT-driven applications

Responsibility

Target for FY2016

Report 2017

・Complete our IoT House Project in July (ready for public viewing)・Develop two IoT-driven applications

Progress as of 2016

・Built latest IoT experimental housing facility on LIXIL property in July 2016 todemonstrate how IoT could be employed in living environments
・Conducted two surveys for IoT-driven applications

Target for FY2017

・Development of IoT-driven applications: 10 applications

Our Approach

people with disabilities

Message

CR Activities (FY2012-2015):

Corporate Responsibility (CR) Strategy

Targets and Results >CR Management Structure
Material Issues
Key Performance Indicators

Three Strategic Pillars
Our People
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Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Our People
Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

Three Strategic Pillars
We focus on making a positive impact in the communities
in which we operate and on matters that require urgent action,leveraging our expertise.

Global Sanitation & Hygiene

Activities
LIXIL has pledged to provide better sanitation to 100 million people by 2020. In addition to

LIXIL Group

Corporate
Responsibility
Report 2017

committing our own substantial corporate resources to this goal, we are at the forefront ofpublic-private partnership, teaming with such organizations as UNICEF, the Japan International
LIXIL is committed to promoting and enabling access to safe and hygienic sanitation practices,
especially for women and girls, while preventing the harmful transmission of diseases forchildren.

Cooperation Agency (JICA) and WaterAid. LIXIL is also a member of the Toilet Board Coalition,a wide-ranging global alliance that aims to develop sustainable, scalable measures to tackle thesanitation crisis.
Given the immense size and complexity of the global sanitation issue, LIXIL is developing
a number of products to fit different markets, infrastructure and income levels, as well as deal
with environmental constraints. Our primary solutions are the SATO product series, already

Our Approachcommercially available, and the Micro Flush Toilet System, Green Toilet System and Portable
Toilet System, all systems are currently under development. Each represents LIXIL's dedication toThree Strategic Pillars

improving the quality of people's daily lives.
LIXIL has also established the Social Sanitation Initiatives to strengthen the framework behind

Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Backgroundsustainable businesses.

An estimated 2.3 billion people – one out of every three in the world today – live without access to proper

Time for Global Action Episode I - LIXIL (26 mins)

sanitation, of which approximately 900 million still defecate in the open on a daily basis. These are figures
Our People

our commitment to resolving the global sanitation crisis through revolutionary products andwith a devastating human cost: 800 children under five years of age are estimated to die every day fromdiarrheal diseases caused by a lack of clean water and sanitary living conditions.

Environment

The absence of safe, clean toilets is a particular threat to women. Not only is it embarrassing forSocietyrisk of assault. As a result, the lack of sanitary toilets is one of the primary reasons young girls drop out of

women and girls to defecate outside, having to leave home or school to relieve themselves increases theschool when they reach puberty.
Customers & Supply Chain

The impact of the sanitation crisis is felt throughout entire nations and regions, crippling opportunities
for growth and development. According to an Oxford Economics report on behalf of LIXIL, global

Reportingeconomic losses from poor sanitation were estimated at US$223 billion in 2015, an increase of more than
20 percent from five years earlier.
The True Cost Of Poor Sanitation >Prev.

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18

LIXIL Group Corporate Responsibility Report 2017

"Global Sanitation Solution" brochure >SATO:
Preventing the transmission of disease and odors,
LIXIL Groupand reducing open defecation

Corporate

Having to defecate in the open, into an open pit or

Responsibility

people to odors and disease. To combat this problem,

Report 2017

over an inadequate pit latrine, exposes millions of
LIXIL has developed the SATO series of products,
the first model created with funding from the Billand Melinda Gates Foundation and launched in

Our Approach
Three Strategic Pillars
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Our People
Environment
Society
Customers & Supply Chain
ReportingBangladesh in 2013.
Users pour in less than 500 milliliters of water

To deliver sustained improvements to sanitary conditions
for as many people as possible, LIXIL is focused on
developing SATO operations in a tailored way to meet
local needs.
Producing SATO toilets locally keeps costs down
and facilitates broader distribution. Selling SATO toilets
through local partners creates employment and more
concrete and entrenched local operations. By establishinga local Make, Sell, Use cycle, individual regions can independently and consistently improve their own
sanitary conditions.
Countries Where "SATO" is in Use

to flush away waste, after which an airtight,
counterweighted trap door quickly seals to block
smells and flying insects. SATO products are safe forchildren, easy to clean and affordable. Each one isdesigned to suit the needs and preferences of users
in different regions. Already more than 1.2 million are
in place around the world, improving the lives of 6
million people. (As of March 2017)

How "SATO" Works

Micro Flush Toilet System:
Better management of water resources in urban environments
Using far less water per flush than a regular toilet, and recycling sewage water to assist the flow in
outside pipes, the Micro Flush Toilet System significantly reduces the consumption of precious cleanwater. It is particularly aimed at mitigating problems related to scarce or unreliable water resources inurban environments where the population is rapidly increasing.
Suitable for both stand-alone homes and multi-unit buildings, the system avoids clogging of thePrev.

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sewage system and features a comfortable sitting-type toilet that is easy to clean and maintain. A
flapper valve in the toilet bowl is operated with a handle, and the valve and accumulated water prevent
odors from entering the room. A steeply angled pipe connected to the toilet and sewage water system

19
LIXIL Group Corporate Responsibility Report 2017assists the overall flow of waste.

Portable Toilet System:

How "Micro Flush Toilet System" Works

Hygienic, efficient collection of human waste
The Portable Toilet System is an in-home sanitation solution designed for urban slums that lack

LIXIL Group

proper sanitation infrastructure. It is being developed and field-tested to offer disadvantaged

Corporatehouseholds an 'odorless' toilet from which human waste can be collected and treated hygienicallyResponsibility

and efficiently.

Report 2017

toilet, which has a mechanism for minimizing odors, can be easily placed in any household. It is

The system consists of a compact, attractive, stand-alone toilet and a collection station. The
equipped with a removable cartridge, which is transported from individual homes to a designatedcollection station, where the waste inside the cartridge is deposited and the cartridge cleaned.

Our Approach
Three Strategic Pillars

Professional waste treatment companies then collect the accumulated waste from the station andGreen Toilet System:transport it to an offsite treatment site.

Safety processing human waste into fertilizer

How "Portable Toilet System" Works
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

The Green Toilet System safely processes human excrement

How "Green Toilet System" Works

into fertilizer and provides that value to farmers throughthe creation of a viable business model. Solid and liquid
wastes are separated to prevent odors and prepared fortheir subsequent conversion into fertilizer, with maintenance

Our People

workers collecting the waste from different tanks behind
the toilet and transporting it to a compost facility.

Environment

The Green Toilet System is aimed at communities

Societyspread out to justify a large sewage system. No waterwith no water and sewage infrastructure, or that are too

Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017is used to transport the waste, circumventing the needfor a traditional sewage system. Additionally, the proper
treatment of human wastes protects groundwater and other resources from contamination. The
system also creates employment for collection services and compost facilities, providing a financial
incentive to prevent dumping.

Water Conservation & Environmental
Sustainability
LIXIL Group

Corporate
Responsibility
Report 2017

we are committed to our Environmental Strategy, which pledges that LIXIL will provide environmental
solutions through our products and services.

Environmental Vision 2030
To mitigate global climate change, the Paris Agreement set a long-term ambition to achieve a balance
between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the

The LIXIL Group is committed to conserving water, energy, and other natural resources utilizedin our products and services, across the supply chain from procurement through production,
distribution, end use and product disposal.

second half of this century. In order to contribute to this carbon-neutral future, LIXIL Group created a
new Environmental Vision. By 2030, the positive environmental contribution from our products
and services will surpass the environmental footprint from our entire business process, thus,achieving a NETZERO Environmental Footprint. We will achieve this through innovative technologies,
such as low-carbon and water-efficient technology, and also by reducing environmental impact in every

Our Approachprocess of the business, including procurement, production, product use and disposal.

Three Strategic Pillars
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Our People
Environment
Society
Customers & Supply Chain

Background
Sustainable use of natural resources is ever more critical for our society, and given the nature of LIXIL's
business, there are multiple areas where our actions can make a difference. By 2030, approximately
47% of the world's population is expected to be living in areas of high water stress. Additionally, LIXIL's
business is strongly linked to buildings, which account for 32% (24% residential and 8% commercial)of total global final energy use, and without action, energy use by buildings is estimated to morethan double by 2050. With regards to other natural resources, aluminum, one of LIXIL's important raw
materials, has been identified as one of the priority materials in the metals category and requires urgent
attention.

Core Environmental Strategy Themes

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LIXIL Group Corporate Responsibility Report 2017

To achieve our Environmental Vision, we are focused on three core areas, based on clearly definedtargets and actions plans.

LIXIL Group Enviromental Strategy

1. Climate change mitigation and adaptation

The LIXIL Group considers environmental challenges, such as water conservation and environmental

3. Sustainable use of resources

protection, to be one of our most important business initiatives. As a 'Living Technology' company,

2. Conservation of water resources

Environmental Sustainability Principles
Procurement

The Environmental Sustainability Principles cover five key areas, as outlined below, and guide the actions

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approachand disclose informationof all LIXIL employees. From procurement to production, product use, and disposal, we are committed
to creating a sustainable society throughout every aspect of our business, and taking responsible
actions to respect our environment.

2. Reduce

Manufacturing

environmental
footprint across

LIXIL Group Environmental Sustainability Principle (PDF:50KB) >by 5%)

processes

1. Continually improve environmental management systems and performance

Logistics
Reduce CO2 emissions
by 8% v. FY2015

2. Adhere to rigorous compliance3. Develop and provide environmentally sound products and services
4. Reduce environmental impact in every process of the business operation

2020 Mid-term Targets

Diversity & Inclusion

Action Plans for Addressing Environmental Issues
Targets and KPI

Our People

gas reduction)

Environment
R&D

Society
Customers & Supply Chain
Reporting

1. Improve
environmental
value of products
and services

22
LIXIL Group Corporate Responsibility Report 2017

Sustainable
use ofresources

・Engage in R&D and develop products that help resolve
environmental issues

establish reporting lines, and set KPI and targets (FY2016)
Product
development

・Achieve KPI targets within all technology businesses that arelinked to the targeted 40% decrease in product CO2 emissions(FY2017-FY2020)
・Pursue Design for Environment, taking into account the entire
product lifecycle

v. FY2015

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Water conservation

・Define what constitutes LIXIL Group's global "product CO2
emissions by products and the decrease in CO2 emissions",

Secure a reduction of
CO2 emissions by 40%

Prev.

Mitigating andadapting to climatechange (Greenhouse

Sales

・Focus on sales expansion strategies for eco-friendly products
and services

・Improve consigners'
CO2 emissions by
5%・Improve water use
efficiency⇒ Assess our water
usage, evaluate therisk, identify highrisk facilities, andbuild action plans
starting with highrisk facilities

Sales

・Reduce electricity charges or overall cost ofutilities by 5%

Product use &disposal*See Product Development in Section 1 above

5. Proactively communicate with all stakeholders

Global Sanitation & Hygiene

・Reduce CO2
emissions by 8%(reduce energy use

all operational

Three Strategic Pillars

Water Conservation & Environmental
Sustainability

・Cooperate with and encourage suppliers to fully embrace
responsible procurement, reduce their environmental footprint

3. Build an effective environment
management system-Ensure strict compliance-Strengthen risk management

・Achieve
95% ormore
recycling ofwaste

・Strengthen governance, including the committee framework,
reporting lines, and Group-wide rules and regulations etc.
・Maintain zero compliance violations (requiring administrative
guidance or incurring a penalty)
・Establish and achieve an environmental risk management plantaking into account locality and economic viability

Progress on the LIXIL Environmental Vision 2030
Target (as of FY2016)
LIXIL Group

Approximately 80% of the environmental impact caused by the LIXIL Group value chain occurs when

Corporate

our products are used, making product and service initiatives the most important aspect in achieving

Responsibility

understanding of the environmental impact of our entire value chain and develop global activities toReport 2017

our Environmental Vision 2030. In FY2016, the entire Group united in an effort to gain a better
reduce that impact. In FY2016, the Group increased production due to strong global product sales. As
a result, product contribution to lower CO2 emissions increased by 1.08 times compared to FY2015, andCO2 emissions from operations increased by 5%.

Our Approach
Three Strategic Pillars
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Our People
Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

Click here for more details: >Environment
With the desire to help people live in harmony with the Earth, we are committed to continuing ourefforts to be environmentally sound in every aspect of our businesses activities.
more >

Diversity & Inclusion
LIXIL Group

Corporate
Responsibility
Report 2017

LIXIL is committed to embracing the diversity of people in society and within our firm. This
includes enhancing quality of life and wellbeing for the elderly and the physically disabledthrough LIXIL products and services, as well as harnessing the intelligence and perspectives of
LIXIL's diverse workforce, as an engine for growth and innovation.

Toilets

Bathroom

Dressing room

Dim light

Push-type faucet

Wash-stand for wheelchairs

Our Approach
Three Strategic Pillars
Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

BackgroundBy 2050, more than one in every five people around the world are projected to be over the age of 60,

Our People

with many living either alone or with their spouse only. Approximately 15% of the world's population

Kitchen

Living room

Stairs, corridors, entrance halls

Touch-less faucet

No-rail window sash

Stairs with slipping prevention mechanism

today has some sort of disability, and this rate is increasing every year. In Japan, female participation in
Environment

the workforce is still low compared to other countries, despite the fact that multiple researches suggestthat gender diversity correlates with less volatile and improved financial performance of corporations.

Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

Activities
Universal Design by LIXIL
LIXIL engages in research and development for products and services factoring in various points ofEntrance porch / exterior

Public toilets

Public spaces

view, to help create comfortable and fruitful lives for people of all ages.

Linear sliding system

Large remote controls

Support rail UD

Launched Serviced elderly homes, Premio
LIXIL Senior Life Company, which manages elderly homes, launched Premio , LIXIL Group's first contract-

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars

based facility management business for serviced homes for the elderly. Premio Kawaguchi , the first
facility in the Premio series, opened in March 2017. By using LIXIL products at elderly homes, LIXIL
can continuously assess how to improve its product development for the elderly. LIXIL also displayed
a lineup of products for the elderly at the 43rd International Home Care & Rehabilitation Exhibition,
the largest international home care and rehabilitation exhibition in Asia, further demonstrating its
commitment to inclusive designs.

LIXIL Diversity & Inclusion Declaration
We leverage our differences to create new energy and engagement generated by open and honest
dialogue across our organization. These efforts will enable our employees to build entrepreneurial

Global Sanitation & Hygiene
Water Conservation & Environmental
Sustainability
Diversity & Inclusion

Our People
Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

mindset that will drive growth and sustainable innovation.

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development
Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

Our People
We are committed to respecting the individuality of
all employees and offering a rewarding working environment.

A Fair & Rewarding Workplace

Our Approach to Personnel Management
The LIXIL Group strives to create an environment that encourages employee diversity, inspires pride in

LIXIL Group

Corporate
Responsibility

the company, and enables each individual employee to maximize their productivity and their potential.
We have focused on improving our work styles to ensure employees' enthusiasm and motivation,
The LIXIL Group seeks to create a fair and rewarding workplace, develop a strong and cohesive
corporate culture, and foster an open atmosphere between the unions and the company.

Report 2017
Our Approach
Three Strategic Pillars
Our People

Action plan

Conduct a regular employee awareness survey across the Group.

KPI

Implementation of action plans derived from the global employee awareness survey
across the Group (%)

Target for FY2016

・Implementation of action plans derived from the 2015 global employee awarenesssurvey across the Group: 100%Progress as of 2016

・Implemented actions in each organization based on the results of the Group-wide
employee survey conducted during FY2015
・Set up the LIXIL Engagement Committee and shared best practices Group-wide via theintranet

Work Safety & Well-being
Talent Development

Target for FY2017

Diversity & Equal Opportunity
Performance・Implementation of action plans derived from the 2017 global employee awarenesssurvey across the Group: 100%

Action plan

Hold regular discussions between the union and the company

KPI

Number of meetings of the Central Labor Relations Committee at LIXIL Corporation (Japan
only)

Environment

Customers & Supply Chain

Target for FY2016

・Hold 9 meetings of the Central Labor Relations Committee annually(*Also hold regional Labor Relations Committees in order to share details of Central
Labor Relations Committee action and debate various issues)

Progress as of 2016

・Held 9 meetings
・Established smooth labor relations by promoting prompt communication, including
meetings and councils, on each of the themes stipulated under the basic labormanagement agreement

ReportingTarget for FY2017

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LIXIL Group Corporate Responsibility Report 2017

Employee Opinion Surveys
important to understand our current situation and actively incorporate employees' views in improving
working environments. Accordingly, from FY2015, we have combined employee opinion surveys thatwere previously conducted separately within each group subsidiary into one global survey. We are now
collecting comprehensive data on the level of employees' understanding of our corporate vision, dayto-day work-related issues, satisfaction, as well as engagement. Over 66,000 employees around theworld responded to the first survey conducted in 21 different languages, providing feedback from over
90% of our global workforce.
Survey feedback was offered in three languages (Japanese, English and Chinese) and each business
function within the organizations used the results to identify its own issues, design solutions, andimplement action plans. In addition, we have set up a global cross-functional project to address groupwide issues. For example, LWT Asia identified communication issues between managers and teamTarget / ProgressSocietydevelopment.

In order for the rapidly evolving LIXIL Group to achieve further integration as One LIXIL, we believe it isTarget / Progress

A Fair & Rewarding Workplace

and revising our human resource systems to encourage employees to take paid holidays; this includes
offering more comprehensive childcare and nursing care support, and promoting personal career

・Hold 9 meetings of the Central Labor Relations Committee annually to facilitate regularcommunication between the union and company

members, and decided to provide training for new managers. In addition, LWT Americas committed
to optimizing and improving the quality of its daily operation. LWT Americas sent staff from the
manufacturing management division to the branches in Japan and Vietnam. As a result, LWT Americas
improved the standard of work of these employees through best practice management training over a
period of 5 weeks.

Supporting a Healthy Work-Life Balance

Number of Maternity Leave
Users ★

Number of Child-Care Leave
Users ★

At the LIXIL Group, the executive management team is actively supervising the creation of a rewarding

LIXIL Groupworking environment in which each and every employee can perform to their full potential.

Corporatecompany, LIXIL Corporation is committed to enhancing the necessary systems and cultivating the right

Responsibility
Report 2017

Holding active Work-Life Flexibility (WLF) Advisory Discussions between the union and theatmosphere. We currently have support practices in place for female employees looking after young
children, and are now focusing on supporting our male employees with their childcare commitments,
in addition to supporting all employees looking after sick or elderly relatives. We have introduced avariety of new systems, including hourly based paid holidays for all employees, career return systems

Our Approach
Three Strategic Pillars

that allow employees who gave up work due to childbirth, childcare, or nursing care commitments
to be reemployed; we are subsidizing extended daycare fees, providing subsidies equivalent to social
security premiums to employees on temporary nursing care leave, and offering "Papa Childcare Leave"
to male employees whose partner has just had a baby.
LBT (JOSEF GARTNER CURTAIN WALL SHANGHAI) has introduced and sponsored two initiatives

Our People

for employees that need to juggle work and care for newborns: fathers are able to request 10 days ofpaternity leave, and mothers can ask for partially reduced working hours during the first year since the

A Fair & Rewarding Workplace
Work Safety & Well-being

child was born. LWT Indonesia allows flexible working hours during Ramadan to enable employees to
eat breakfast with their families and attend prayers.

Talent Development
Diversity & Equal Opportunity
Performance

Environment*Directly hired employees in Japan only
*The FY2015 figures have been revised on January 12, 2017

*Directly hired employees in Japan only

Number of Nursing-Care Leave Users ★

Society
Customers & Supply Chain
Reporting

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LIXIL Group Corporate Responsibility Report 2017

*Directly hired employees in Japan only

LIXIL Group

Corporate

Preventing Overwork

Labor-Management Relationship

LIXIL Group top management are proactively seeking to improve productivity by eradicating long

The LIXIL Group believes that building mutual trust between the unions and the company based

working hours and ensuring a healthy work-life balance.
To encourage employees to actively reduce overtime, LIXIL Corporation has designatedWednesdays to be a no-overtime day and has implemented an advance declaration policy for overtime.

on an equal relationship helps build a fair and rewarding workplace and leads to improved businessperformance.
LIXIL Labor Union, which adopts a union shop system for original permanent employees of LIXIL

Responsibility

From FY2015, managers and staff are required to carefully manage their working hours. Employees

Corporation, is comprised of 13,869 registered members as of March 31, 2017, a 100% membership

Report 2017

who consistently work long hours are interviewed by an industrial physician to prevent mental/

rate. Labor-management consultations take place in the form of regular discussions and information

physical health issues. We aim to increase paid-leave usage to 50% or more by introducing measures

sharing on business status, working conditions, health and safety issues, etc., and the union and thesuch as offering "memorial leave" for personal anniversaries and encouraging employees to take fivecompany work together to resolve issues. When there are changes to working conditions and/or other

Our Approachconsecutive days of annual leave at a time. In FY2016, paid-leave usage stood at 48.6%.

systems being introduced or revised through labor-management consultation, the union and the

LWT South Africa (Grohe Dawn) prohibits administrative staff from working after 6pm, and urges

company cooperate to ensure employee awareness of the changes. This is facilitated through postingThree Strategic Pillars

them not to work on weekends unless it is an emergency. LHT HK & Macau monitors work progress

the information on the corporate intranet, cascading the information down through relevant general

at monthly or weekly meetings and immediately reviews individual workloads if anyone is working

affairs departments, and the union distributing its own Union Guide to all union members.

excessive hours.
Our People
A Fair & Rewarding Workplace

Paid Leave Days Taken per
Employee ★

Average Monthly Overtime
Hours per Employee ★

Work Safety & Well-being

・LIXIL VALUES >Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
ReportingContents Next
*Directly hired employees in Japan only

29
LIXIL Group Corporate Responsibility Report 2017

Scope and details >Related principles:

Talent Development

Prev.

FY2016 data indicated with a ★ have received an independent practitioner's assurance.

*Directly hired employees in Japan onlyWork Safety & Well-being

environmental areas and became the Group Environment, Health and Safety (EHS) Committee, chairedby the Representative Officer & Executive Vice President, Production Optimization. Subsequently, we
implemented a universal internal occupational safety policy and EHS core rules to establish a Groupwide occupational health and safety management system, and broaden its application over time.

LIXIL Group

Corporate
Responsibility

The LIXIL Group has built a Group-wide occupational health and safety management system to protect
all employees, and is working to expand its scope.

Report 2017
Our Approach
Three Strategic Pillars
Our People

Action plan

Build a common Group EHS management system

KPI

Group-wide coverage of EHS management system (%)

Target / Progress
Target for FY2016

・Set up a Group EHS Committee.
・Formulate Group-wide operational rules (EHS manual, EHS governance inspection
guidelines).

Progress as of 2016

・Scope of EHS performance data capture (employees): 98%
・Developed and implemented Group Occupational Health and Safety Policy, core rules
such as the EHS manual and EHS internal audit guidelines

Target for FY2017

・Group-wide operational scope of occupational health and safety covered by the EHS
management system: 98%

A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development

Severity Rate and Lost Time Injuries Frequency Rate ★

Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
Reporting

Our Approach & Structure
The LIXIL Group, in our Group Charter of Corporate Behavior, commits to "promoting the mental andphysical well-being of all workers by prioritizing safety in order to realize an ideal accident-free working
environment." To this aim, we have introduced an occupational health and safety management system
and implemented a PDCA approach to help prevent accidents at work. We also have a Health and
Safety Committee in each business segment, which discusses health and safety issues on a regular basis
to help generate continuous improvements.
We have also focused on building and expanding an effective Group-wide management system

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for occupational health and safety. In July 2015, we appointed health and safety administrators andimplementation managers within each of our business units in Japan (each technology business, LIXIL
Japan Company and Housing & Services Business) and at headquarters, as well as set up the Japan30
LIXIL Group Corporate Responsibility Report 2017

Health and Safety Committee. In April 2016, the committee's scope was broadened to incorporate* Lost Time Injuries Frequency Rate: Number of lost-day occupational injury cases / Total working hours × 1,000,000**Severity Rate: Total days lost due to occupational accidents / Total working hours × 1,000(Total days lost due to occupational accidents = actual days absent from work)
Scope: FY2014 covers directly employed staff at production bases in Japan.
FY2015 covers directly employed staff at production and non-production bases in Japan.
FY2016 covers directly and indirectly employed staff at production and non-production bases in Japan and a majority of overseas production bases.

OIFR ★

LIXIL Group

Corporate
Responsibility
Report 2017

OIFR ＊

Our People

FY2015FY20160.00

0.00

Employee Health Management*OIFR: Occupational Illness Frequency Rate
Number of lost-day occupational illness cases / Total working hours × 1,000,000
Scope: FY2015 covers directly employed staff at production and non-production bases in Japan.
FY2016 covers directly and indirectly employed staff at production and non-production bases in Japan and a majority of overseas production bases.

Working with the LIXIL Health Insurance Society, LIXIL Corporation seeks

Number of work-related fatalities ★

providing opportunities to prevent illnesses and improve fitness.

to ensure the wellness of employees by promoting health awareness andAll employees undergo annual medical check-ups, and industrial doctors determine whether individual

Our Approach
Three Strategic Pillars

with pedestrians walking behind blind corners when the forklift is reversing. LWT Japan improved on thisidea by switching the spotlights for strip lights so that pedestrians notice the lights more easily.

Work-related fatalities

FY2014FY2015FY2016

employee require attention at work. In addition, employees with high health risks are encouraged to visit

0

0

0

symptoms. Extra attention is paid to encouraging priority cases (44 employees in FY2015 and 50 in FY2016)*Scope: FY2014 covers directly employed staff at production bases in Japan.
FY2015 covers directly employed staff at production and non-production bases in Japan.
FY2016 covers directly and indirectly employed staff at production and non-production bases in Japan and a majority of overseas production bases.

A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development

Working to Eradicate Work-Related Accidents
The LIXIL Group seeks to actively prevent work-related
accidents by ensuring all employees follow established safety

Environment
Society
Customers & Supply Chain
Reportingrules and anticipate dangers at work. That means pinpointing
and eradicating any dangerous elements relating tomachinery, facilities, or unsafe action by workers, and sharing
best-practice examples to avoid work-related accidents.
To prevent reoccurrence, we compare and analyze any
similarities between accidents that do occur, and instigates
improvements. LIXIL Corporation also provides practicaltraining sessions (Anzen Dojo) in which staff from Japan andoverseas can experience simulations of past accidents.

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LIXIL Water Technology (LWT) shares and develops bestpractices from each region to help promote further progress.
For instance, LWT EMENA and LWT Americas attached

31
LIXIL Group Corporate Responsibility Report 2017

to visit a healthcare facility, and, as a result, we achieved a 100% consultation rate. The LIXIL Health InsuranceSociety covers basic medical examination fees for both employees and their dependents.
We are also focused on caring for mental health, which is important in ensuring overall wellness of
employees. We have specialist industry physicians at our business sites, and offer mental health management

Diversity & Equal Opportunity
Performancea doctor to enable them to continue working in a healthy and safe manner without exacerbating their

spotlights to the back of their forklifts to prevent collisions

training for managers to help create a working environment conducive to early detection and early
treatment. We also conduct seminars to ensure employees have the correct knowledge to help themselves,and offer a Workplace Reinstatement Program to help employees who have been on sick leave to facilitate
their return to the workforce.
In line with new legal requirements on stress tests introduced in December 2015, we started conducting
stress tests each year between May and June from 2016. In FY2016, 84.5% of employees took the stress test,
rising to 93.9% in FY2017. We are using the test to ensure employees understand the importance of self careas a key part of successful mental health care, and to better understand workplace conditions and instigate
improvements.
In February 2017, the LIXIL Group was recognized as a certified health and productivity management
organization in the large enterprise White 500 category, a program operated by Japan's Ministry of
Economy, Trade and Industry.
FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Related principles:
・LIXIL Group Occupational Health and Safety Principles >Talent Development

1.Basic School
Improving basic skills at each level and offering learning opportunities to match employees' enthusiasm
for learning

LIXIL Group

Corporate
Responsibility

2.Professional College
The LIXIL Group supports a systematic and structured talent development program, and encourages all
employees to proactively advance their own careers.

Report 2017

3.Next-generation Seminars
Action plan

Our Approach
Three Strategic Pillars
Our People

Target for FY2016

・Number of participants: 200 employees

Progress as of 2016

・237 employees participated in leadership training*・Expanded development programs to enable all employees to take part

Progress as of 2016

・—

Target for FY2017

・Ensure 100% introduction of 3-yearly communication training(LIXIL Corporation, Japan only)

LIXIL Group Corporate Responsibility Report 2017

Sponsoring MBA
candidates

・—

TAP

Target for FY2016...

Target / Progress

HR

Percentage uptake of initial 3-year basic education (LIXIL Corporation, Japan only)

IT

KPI

Communication
workshops

Elective education
Basic School

Professional College

Next-generation
Seminars*Newly added in FY 2017

Our Approach to Talent Development
designed to improve employees' basic skills, develop stronger expertise, and nurture nextgeneration

32

TAP

Finance・Next-Generation Human Resource Promotion Program: hold 5 classes for 116
employees at LIXIL Corporation (Japan only)

LIXIL Corporation's talent development consists of the seamless education and training programsContents Next

Company or department specific education
LHT- J

Target for FY2017

Reporting

Prev.

Essential skills training

LW T- J

Customers & Supply Chain

Next-generation
initiatives

LJ C

Society

Improve expertise

Target / Progress*Newly added in FY 2017

Environment

Improve basic skills

Career developmenttraining

Performance

Number of employees participating in leadership training

New manager
training

Diversity & Equal Opportunity

KPI

S2 grade employee
training

Talent Development

Providing proactive training for entrepreneurially minded employees

the Group

Young employee
training

Work Safety & Well-being

Continue and optimize regular leadership training programs*, both in Japan and across

New employee
training

A Fair & Rewarding Workplace

Improving the overall capability and expertise of business units and functional divisions

managers. We have three types of educational institutions, which are all intrinsically linked.

Training for young employees (Basic School)
This established training system is designed to ensure young employees in their first through third yearsof employment can acquire the necessary competences to cope with higher expectations and evolving
roles within the company. Our communication skills training for each year group, in particular, focuses
on developing the skills required to foster a flat and open corporate culture.

LIXIL Group

Corporate

TAP program for next-generation leaders of an entrepreneurially

Training and education support programs conducted in FY2016

minded company(including overseas businesses)

Our Talent Acceleration Program (TAP) is designed to
Itemproactively nurture entrepreneurially minded personnel,
including young employees selected by open recruitment or

Number ofparticipants

Training summary

New employee training

Basic training for new employees entering the company

165

Responsibility

recommendation, middle managers working predominantly

Report 2017

in the field, and division or section managers. We operate

Training by corporate

Training to develop skills and capabilities required at each positiondifferent training programs for each of three groups,

positionslevel

Leadership training (LT)Training to nurture next-generation management personnel

237

Management training

Training for employees being promoted to management positions

120

focusing on fostering management skills and a managerial

863

mindset from an early stage. We are also introducing
Our Approachan overseas MBA study program to help employees acquire management skills and develop aninternational outlook.

Three Strategic Pillars
Our People

Training in each division to develop skills and capabilities
Division training

Talent Acceleration Program (TAP) Structure

respectively required for product development, production, sales,
and other lines of work

12,602* LIXIL Corporation only
Leadership training (LT) covers LIXIL Corporation and its subsidiaries

A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development
Diversity & Equal Opportunity
Performance

Annual training hours and costs per employee (FY2016) ★
Overall training*Directly hired employees in Japan only

Environment
Society
Customers & Supply Chain
Reporting

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33

LIXIL Group Corporate Responsibility Report 2017

Training hours 15.01 hours

Training costs 57,392 Yen

Career Development

Performance Evaluation Flow

LIXIL Corporation aims to create an environment that enables all employees to contribute

LIXIL Groupenthusiastically and proactively. That involves supporting career development from a dual perspective;

Corporate

development driven by individual employees. Our career support training conducted in FY2016

Responsibility
Report 2017encouraging both strategic career development driven by the company, and self-motivated careerconcentrated on helping managers help staff build their own ideal careers, and we will implement thisprogram more widely going forward. We will also continue our Job Posting system that advertises
specific vacancies to ensure higher mobility across business sections, and support individual andcorporate growth through optimum job placements that match company needs with employees' career

Our Approach
Three Strategic Pillars

designs.
In order to discover and nurture proactive, global-minded personnel, we launched the Global
Challenge Program in FY2017, which enables employees, selected from internal opportunity system, tospend 12 to 18 months at one of LIXIL's international businesses.

Our People
A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development
Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
Reporting

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34

LIXIL Group Corporate Responsibility Report 2017

Evaluation Framework
LIXIL Corporation evaluates all employees to ensure growth and accomplishments are justly awarded.
Employees are required to assess their own achievements against objectives set at the beginning of theyear, and managers provide feedback in meetings on the performance evaluation results. We nurturedevelopment by reviewing half-yearly performance and communicating future expectations. To securefair evaluations, we develop managers' personal evaluations skills through the Personnel Evaluation
System Manual or new manager training programs.
FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Diversity & Equal Opportunity

Our Approach
United under the LIXIL Diversity & Inclusion Declaration, the LIXIL Group embraces diversity in gender,

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
A Fair & Rewarding Workplaceage, race, nationality, values, background, etc., and turns the energy and creativity generated bydiversity into a source of strength. We aim to furnish a comfortable and friendly working environment
The LIXIL Group is committed to respecting diversity and recruiting and developing high caliber talentacross the Group. We believe that harnessing the intelligence and perspectives of our diverse workforce

Action plan

Promote the active participation of women in the workplace

KPI

Percentage of women among regularly recruited new hires (Japan only) (%)

Empowering Women in the Workplace

Target for FY2016

・Percentage of women among regularly recruited new hires in March 2016: over 30%

In March 2012, we had 1 female senior executive (1.0%) in the Group. In March 2017, that number had

Progress as of 2016

・Percentage of women among regularly recruited new hires in April 2017: 30.8%

risen to 7 (11.9%), including 2 directors, 2 senior managing executive officers and 3 executive officers.

Target for FY2017

・Percentage of women among regularly recruited new hires (Japan only): over 30%

As of March 31, 2017, the number of female managers increased to 687, constituting 12.9% of total

KPI

Percentage of women participating in leadership training* (LIXIL Corporation, Japan only)(%)

The LIXIL Group believes the active participation of female employees is vital to promoting diversity.

Target / Progress

Target / Progress

Diversity & Equal Opportunity

Target for FY2016

・Percentage of women participating in leadership training: over 20%

Progress as of 2016

・Percentage of women participating in leadership training*: 20.8%

Target for FY2017

・Percentage of women participating in Next-Generation Human Resource Promotion
Program: over 20%

Action plan

Create a staffing plan that encourages employment and development of people in local
communities

KPI

Fulfillment of recruitment plans to increase the number of local factory employees (LIXIL
manufacturing subsidiaries)

Society
Customers & Supply Chain
Reporting

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management personnel. In July 2017, the LIXIL Group was included in the MSCI Japan Empowering
Women Index (WIN), which features Japanese companies with high proportions of female managers
and female employees.

Talent Development

Environment

evaluated for their performance.

is critical to driving growth and innovation.

Work Safety & Well-being

Performancefor all, enabling employees to approach challenges with an entrepreneurial spirit, and be appropriately

Target / Progress

LIXIL Corporation has set up the Diversity Promotion Office to further advance careers for women.
As a member of "Male Leaders General Meeting (to promote the active role of women)", an initiative
backed by the Cabinet Office, we declared a WeDo Action* plan in August 2014, and are facilitating
more appointment of female directors / officers and managers. As of March 2017, we had 168 female
managers (6.8% of all managers), representing growth of approximately 7.6 times in absolute number
from 22 female managers (0.9%) in March 2012.
*WeDo: Women Empowerment in a Diversified Organization*(): The ratio of women in all management positions*1 female director and 1 female senior managing executive officer are from countries other than Japan.
*Data excludes Senior Life Company of LIXIL Corporation

Target for FY2016

・Achieve 100% of the recruitment plan (100 newly hired employees)

Taking the promotion of active female employees to the next level, we are currently creating an

Progress as of 2016

・Recruited 100 people (17 graduates from specialist high schools and 83 high-school
graduates)
・Frequently visited schools in each area, and participated in job fairs

environment in which female employees can consistently develop their careers even if they takeTarget for FY2017

・Achieve 100% of the recruitment plantime off for life events such as childbirth. For example we developed a Mamap career-building tool
for working mothers. Female employees intending to take childcare leave use the provided tool andinterview sheet to help them communicate with their managers to design a career path and support
system, and ensure continued active and rewarding work after the maternity leave.

35
LIXIL Group Corporate Responsibility Report 2017

Number and Composition Ratio of Female Managers

Fostering a LGBT-friendly company environment
The LIXIL Group is working to create a friendly work environment for LGBT and other sexual minority

LIXIL Group

employees.

Corporate

identified as an LGBT Ally as a way to display their support. The badge logo is a unique LIXIL design.

LIXIL Corporation held study sessions for employees and provided badges to employees who
We intend to extend these study sessions to employees across the Group, and will continue to actively

Responsibility

expand the LGBT Ally network as part of our drive to create a comfortable and friendly corporate

Report 2017environment for all.
LBT (PNA Corp.) has launched various actions that reflect social change in the US, including theprovision of medical coverage to same-sex married partners.

Our Approach

To comply with local anti-discrimination laws, LBT (PERMASTEELISA UK) has supported initiatives, suchas the installation of unisex toilets, to create a more comfortable working environment for LGBT.

Three Strategic Pillars
Our People
A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development
Diversity & Equal Opportunity
Performance

Environment* Directly hired employees only, data collected based on the qualification system used at each operating company, as of March 31 of each fiscal year
Scope: FY2014 and FY2015 cover LIXIL Corporation in Japan, and FY2016 covers the entire Group

Customers & Supply Chain
Reporting

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36

LIXIL Group Corporate Responsibility Report 2017

Many employees with disabilities work alongside those without disabilities in the LIXIL Group

Other external commendations of LIXIL Corporation

because the Group has developed inclusive working environments, from R&D to production, sales

・Received the highest level of Eruboshi certification in 2017 from the Ministry of Health, Labour and759 people with disabilities were employed across the LIXIL Group, representing 2.34% of the workforce

Welfare, which honors companies that have actively promoted female employment in accordancewith the Act on Promotion of Women's Participation and Advancement in the Workplace.
*Click here for details (Japanese only) >Society

Employing Persons with Disabilities

・Received the first Catalyst Distinction award from non-profit Catalyst Japan in 2017, which honors
women's advancement, diversity and inclusion initiatives in the workplace.
*Click here for details >administration, and planning management, to suit each individual's specific disability. As of March, 2017,(427 and 2.26% for LIXIL Corporation).
In 2014, we launched the WING NIJI employment center for disabled people at LIXIL Corporation's
office in Koto ward, Tokyo, to provide support for them in the workplace, in addition to proper
evaluation of work assignments and job development opportunities. WING NIJI provides work support,
job aptitude assessments, and professional skills development services, and has been undertaking many
initiatives to create more inclusive work environments.
In May 2016, LIXIL Corporation received certification from the Ministry of Health, Labour andWelfare as a leading company in the active employment of persons with mental and other disabilities.

Number and Percentage of Disabled Employees ★

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
A Fair & Rewarding Workplace
Work Safety & Well-being
Talent Development*Directly hired employees in Japan only, data collected based on the qualification system used at each operating company, as of March 31 of each fiscal year
*LIXIL Corporation includes LIXIL Senior Life Company*Calculated based on the Employment Rate System for Persons with Disabilities by the Ministry of Health, Labour and Welfare

Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
Reporting

Creating Local Employment Opportunities
LIXIL Corporation supports the growth of employment opportunities in the regions where we operateby employing technical college and high-school graduates as local permanent employees at our plants
in Japan.
FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Related principles:
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37

LIXIL Group Corporate Responsibility Report 2017

・LIXIL Diversity & Inclusion Declaration >Performance
LIXIL Group

Corporate
Responsibility
Report 2017

In recruiting and hiring employees, the LIXIL Group respects human rights and is committed toensuring a fair selection process, recruiting diverse talent irrespective of social group, and building aplatform which allows diverse set of employees to contribute to their full potential.
LIXIL Group FY2016 Human Resource Performance data (PDF: 300KB) >Our Approach
Three Strategic Pillars
Our People
A Fair & Rewarding Workplace

Includes the following information/data:
1. Number of Employees by Type of Employment
2. Number of Employees by Country
3. Number of New Hires
4. Number of Retirees and Turnover Rate
Scope of Data Collection >Work Safety & Well-being
Talent Development
Diversity & Equal Opportunity
Performance

Environment
Society
Customers & Supply Chain
Reporting

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38

LIXIL Group Corporate Responsibility Report 2017

FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Details >LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources
Performance

Society
Customers & Supply Chain
Reporting

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39

LIXIL Group Corporate Responsibility Report 2017

Environment
With the desire to help people live in harmony with the earth,
we are committed to continuing our efforts to be environmentally soundin every aspect of our businesses activities.

Environmental Management

raw materials procurement through product disposal. In 2016, we started operating under our newly
established EHS Performance Reporting Guidelines to help strengthen Group-wide target management
and monitoring systems. We are looking to actively reduce environmental impact across the Group byextending activities currently implemented in Japan to all global operations.

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars

In order to achieve our Environmental Vision 2030, the LIXIL Group has committed to reducing theenvironmental footprint of our business operations through launching a Group-wide Environment,
Occupational Health and Safety (EHS) management system.
Action plan

Build a common Group EHS management system

KPI

Group-wide coverage of EHS management system (%)

Our People
Progress as of 2016

Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources

Target for FY2017

・Establish a Group EHS Committee
・Formulate Group-wide operational rules (EHS manual, EHS governance inspection
guidelines)
・Start collecting and reporting on Group-wide EHS performance data
・Scope of environmental performance data captured (offices and companies): 96%
・Built Group-wide EHS enhancement framework. Convened the first EHS Committee
・Developed and implemented core rules such as the EHS manual and EHS internal audit
guidelines. Trialed EHS internal audit
・Determined Group Occupational Health and Safety Policy
・Group-wide operational scope of occupational health and safety covered by the EHS
management system: 98%

Performance

Society
Customers & Supply Chain
Reporting

Our Approach
In 2016, the LIXIL Group announced its Environmental Vision 2030 medium to long-term targets,and established the LIXIL Group Environmental Sustainability Principles to define our environmental
philosophy and code of conduct. By 2030, we aim to secure an overall net zero balance between the

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environmental footprint of our business and the positive environmental contribution we make throughtechnological innovations and the development of low-carbon, water-saving products and services.
To achieve our Environmental Vision, it is vital that we operate an effective environment

40
LIXIL Group Corporate Responsibility Report 2017

In April 2016, the LIXIL Group launched the Group EHS
Committee, chaired by the Representative Officer andExecutive Vice President, Product Optimization and covering
our four technology businesses, LIXIL Japan Company, Housing& Services Business, and headquarters. We developed andTarget / Progress
Target for FY2016

Environment

Promoting EHS

management system, and work to reduce environmental impact across our entire business, frombroadened the scope of the Group EHS management system,by bringing together all of the businesses for an annual Group

Group EHS Committee

EHS Committee meeting. The committee will further drive ourenvironmental strategy and build effective management and reporting lines in cooperation with LIXILGroup Executive Officers, the LIXIL Corporation Board of Directors, and the Corporate Responsibility
Committee.

LIXIL Group

Corporate

External and Internal Audits

Preventing Pollution Through Strict Control

The LIXIL Group conducts internal audits of its manufacturing factories according to ISO14001 standardsof Chemical Substancesand checks the effectiveness and compliance of the environmental management systems. With regard
to non-manufacturing divisions and Group operating companies, we perform internal audits basedon the standards set in our own environmental management system and are gradually expanding the

Responsibility

scope to include Group subsidiaries. We work to ensure the effective operation of our management

Report 2017

improvements.

Our Approach
Three Strategic Pillars
Our People
Environment

system by following up on all audit points and confirming the implementation of appropriate

Environmental Education Initiatives
LIXIL Corporation strives to inform and educate employees at various levels of the company about
environmental initiatives. The company conducts environmental training for new recruits, provides
Environmental Management System (EMS) training for EMS promotion managers and operators ineach office, and distributes monthly reports on environmental trends to top management, including

Sustainable Water Use

Converted Economic Value
The LIXIL Group has calculated the total economic value of our products in order to understandcosts for water, gas, and electricity from the use of our toilets, water faucets, and kitchens to be
US$179.2 billion for our end users. On the other hand, the positive value created from the use of ourCustomers & Supply Chain

environmentally designed products, such as insulated windows, doors, curtain walls, as well as watersaving and energy efficient toilets, water facets, and kitchens, would generate savings of approximately

Reporting$59.7 billion for end users. These calculations reveal that the running costs for our mainstream products
are nearly triple the potential savings that can be made by using our environmentally designed
products. As products account for over 70% of the Group's environmental impact within our value

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chain, in order to achieve our 2030 Environmental vision, LIXIL is committed to producing even moreenvironmentally efficient products. To achieve this, we intend to analyze the environmental impacts ofour products more thoroughly to encourage better processes and more effective management.

41
LIXIL Group Corporate Responsibility Report 2017

Number of Environmental law violations
FY2013

FY2014FY2015FY2016

No. of environmental law violations

0

0

0

0

Total amount of fines/penalties from the above

0

0

0

0

Environmental liability

0

0

0

0

*Scope: Significant violations with fines of US$10,000 or more

Scope and details >the positive and negative impacts they have on the environment. We estimated the overall running
Societywith the Soil Contamination Countermeasures Act and other environmental laws and regulations toensure the soil and waterways around our manufacturing facilities are not affected by our operations.

FY2016 data indicated with a ★ have received an independent practitioner's assurance.

Sustainable Use Of Resources
Performance

products and/or during production processes. We manage and monitor our factories in compliancedirectors, auditors, and the CEOs of technology businesses.

Environmental Management
Greenhouse Gas Reduction

LIXIL Corporation has set rules on substances that are forbidden or require strict control for use in

Related principles:
・LIXIL Group Environmental Sustainability Principles >Greenhouse Gas Reduction

Improving Energy Efficiency of Products and Services
The LIXIL Group pursues the development of low-carbon and energy-saving products and services

LIXIL Group

Corporate
Responsibility

to achieve a net zero balance between our environmental footprint and our positive environmental
contribution. In FY2016, we completed the Guidelines for Calculation of Environmental Contribution,
The LIXIL Group is focused on developing products and services that can help realize a low-carbon or
decarbonized society, as well as actively reducing greenhouse gas emissions in its operational processes.

Report 2017
Action plan

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services
・Improve CO2 emissions/units

KPI

Group-wide:

Our Approach
Three Strategic Pillars

1. Benefits from CO2 emissions reduction achieved from the products and services
2. Levels of CO2 emissions across all operational processes

Our People
Target for FY2016

Environmental Management

Progress as of 2016

Society

1.Contributions from CO2 emissions reduction achieved from products and services
increased by 1.08 times (compared to FY2015). Created Guideline for Calculation ofEnvironmental Contribution to clarify calculation method for individual products andservices, and calculated results based on FY2015 performance
2. CO2 emissions from operational processes increased by 5% (compared to FY2015). Set

Customers & Supply Chain

targets and initiatives for each business organization in compliance with med-termtargets
・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify

Reportingcalculation method for all processes from procurement of raw materials through to
product disposal
Target for FY2017

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1.Group-wide benefits from CO2 emissions reduction achieved from products andservices increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2
emissions target for FY2016-20
2. Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%
(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20

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LIXIL Group Corporate Responsibility Report 2017

LIXIL's Navish hands-free faucets use automatic Eco Sensors todetect the presence of hands and other objects, enabling water
to be dispensed and stopped without touching the faucet.
hot and cold water, preventing unintended use of hot water and1.Create a guideline for calculating the decrease in CO2 emissions to help achieve our
mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor
the FY2015 result
2. Target -1.6% in FY2016 compared to FY2015 to achieve our new mid-term CO2*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

Sustainable Water Use
Performance

LIXIL Navish hands-free faucets

energy. Compared to conventional faucets, users can expect tosee energy savings of about 52%, and water savings of about
31%.

LIXIL Navish hands-free faucets

emissions target for FY2016-20 (-8% v. FY2015)

Greenhouse Gas Reduction
Sustainable Use Of Resourcesof environment-conscious products.

Faucets equipped with the Eco Sensor function also separate
Target / Progress

Environment

which is our global guideline to measure the positive environmental contribution of our products andservices. Going forward, we intend to strengthen our focus on product lifecycle and expand our range*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)

LIXIL SAMOS L and ERSTER S
To reduce energy consumption from air conditioning, it isimportant to improve the thermal insulation of openings in
the home. These represent the greatest inflow and outflow ofheat. Following the introduction of LIXIL's high-performance
SAMOS X hybrid aluminum and resin windows, in FY2016 LIXIL
introduced SAMOS L, a strategic product designed to be more
affordable while maintaining high thermal insulation. In addition,
ERSTER X, a resin window aimed at providing the top-class levelin thermal insulation performance, has been joined by ERSTER S,
a resin window at a more affordable price point.

LIXIL SAMOS LCO2 Emissions ★

Permasteelisa mfree-SCCF
Introduced by Permasteelisa in 2008, mfree-SCCF (moisture

LIXIL Group

Corporate
Responsibility
Report 2017

free Sustainable Close Cavity Façade) curtain walls feature
double-skin glass walls with compressed-air internal cavity.
The Permasteelisa Group's proprietary technology offers
outstanding performance from the perspectives of ecologicalsensitiveness, comfort, and aesthetic appeal. Many buildings
HILTI INNOVATION CENTER, SCHAAN
LIECHTENSTEIN

with these curtain wall exteriors have received acclaim andcertification by green building rating systems such as Leadership©Bruno Klomfar Fotografie

in Energy and Environmental Design (LEED) and the Building
Our Approach
Three Strategic Pillars
Our People
Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use

Research Establishment Environmental Assessment Method (BREEAM).

Expanding Net Zero Energy Housing

Scope: FY2014 covers operation in Japan and Asia, while FY2015 and FY2016 cover a majority of the entire Group*Cargo shipped by LIXIL Corporation is covered

In FY2016, LIXIL also worked to promote Net Zero Energy Housing (ZEH).* In October 2016, werenamed the Exterior Business Department the ZEH Solutions Division to further our focus onpromoting ZEH in Japan. In April 2017, we also began offering ZEH Design Support Services to assist
builders in designing houses that meet ZEH criteria. By providing both building materials with highperformance thermal insulation and design services for builders, LIXIL is helping to promote the growthof ZEH in Japan.
*A house that achieves net zero energy consumption through the use of improved thermal insulation, energy-saving technology, and renewableenergy-generating equipment such as solar panels. The definition or criteria of a net zero energy house can vary by country.

Establishing a solar power system
LIXIL Corporation is promoting the generation and use ofrenewable energy by turning idle land and factory roofs intomega-solar power plants at five of its sites in Japan. The fivesites combined generate approximately 28,900MWh each

Sustainable Use Of Resources

year, equivalent to the annual power consumption of roughly

Performance

5,800 households in Japan. At the end of April 2017, we also

Society
Customers & Supply Chain
Reporting

Promoting Energy Creation and Saving
Each business within the LIXIL Group sets targets and implements initiatives in line with our mediumterm goals, which includes creating and saving energy in operational activities. In FY2016, weContents Next

Kumayama factory.

Energy savings at manufacturing sites

established the Guideline for Calculation of Value Chain CO2 Emissions and are currently implementing
these guidelines Group-wide.
We are implementing a number of initiatives to reduce energy consumption in all of our businessPrev.

introduced a similar system at Minakuchi distribution center and

In July 2016, the GROHE Lahr Plant in Germany introduced
a new CHP unit, replacing two inefficient boilers. The newprocesses, including switching to LED lighting in our offices and installing systems that encourage

CHP unit is providing heat for two electroplating lines andenvironmentally efficient use of commercial vehicles in Japan.

can supply up to 30% of the plant's demand for electricity. In
addition to better overall energy efficiency, it also enables theplant to reduce CO2 emissions by 2,500 tons per year.

43
LIXIL Group Corporate Responsibility Report 2017

At the GROHE Hemer Plant, a CHP unit introduced in 2015 is

LIXIL Chita SOLAR POWER generated approx.
6,700MWh in FY2016

reducing 15% of the plant's electricity consumption from the use of "recovered heat," generating asavings of 2,200 tons of CO2 per year.
All GROHE plants and distribution centers around the world were successfully certified according to ISO

LIXIL Group

Corporate

50001 Energy Management Systems by the end of 2016.
*A power generation system that uses a heat recovery unit to capture waste heat and turn it into thermal energy

Responsibility

CDP Climate Change Information Request

Report 2017

LIXIL has been participating in the CDP questionnaire since 2011 and actively disclosing our non-Our Approach
Three Strategic Pillars
Our People
Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources
Performance

Society
Customers & Supply Chain
Reporting

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44

LIXIL Group Corporate Responsibility Report 2017financial information to investors.
For further details, please refer to the CDP website. >FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Sustainable Water Use
LIXIL Group

Corporate
Responsibility

The LIXIL Group is focusing on water conservation as a core theme for our 2020 mid-term targets. This
includes enhancing the water-saving features in our products and services.
The LIXIL Group promotes the conservation and sustainable use of water across the entire lifecycle ofour products, from procurement through disposal.

Report 2017
Action plan

Our Approach
Three Strategic Pillars

KPI

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services
・Improve efficient use of water resourcesGroup-wide:
1. Benefits from CO2 emissions reduction achieved from the products and services
2. Levels of CO2 emissions across all operational processes

Our People
Target for FY2016

Environmental Management

1.Create a guideline for calculating the decrease in CO2 emissions to help achieve our
mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor
the FY2015 result.
2. Target -1.6% in FY2016 compared to FY2015 to achieve our new mid-term CO2*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use).

Sustainable Water Use
Progress as of 2016

Performance

Society
Customers & Supply Chain
Reporting

1.Contributions from CO2 emissions reduction achieved from products and services
increased by 1.08 times (compared to FY2015). Created Guideline for Calculation ofEnvironmental Contribution to clarify calculation method for individual products andservices, and calculated results based on FY2015 performance
2.CO2 emissions from operational processes increased by 5% (compared to FY2015). Set
targets and initiatives for each business organization in compliance with med-termtargets
・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify
calculation method for all processes from procurement of raw materials through to
product disposal

Target for FY2017

1.Group-wide benefits from CO2 emissions reduction achieved from products andservices increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2

Prev.

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According to the 2017 GROHE Water Security Survey, 54%
of European households experienced water damage. To
help households to get control over water in home andcostly repairs, GROHE developed the GROHE Sense &GROHE Sense Guard. The GROHE Sense Guard is a smart
water controller which notifies them the moment it detects
ONDUS smartphone application, users can shut off theemissions target for FY2016-20
2.Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%
(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use)water supply, thus protecting their home and avoiding costly
damage – especially if they are away from home.
For further details, please refer to the GROHE SENSE GUARD website >American Standard Water Saving Toilets
American Standard offers a wide range of toilets that savenearly 20% more water than the national code for toilet
water consumption and meet the strict criteria for watersavings established by the U.S. Environmental Protection
Agency's WaterSense program. We have a variety of
products to match consumers' tastes, including CADET PRO,a quality toilet at an affordable price, VorMax UHET, an ultrahigh efficient toilet, and Lyndon, a popular contemporarystyled toilets. The bowl height of these toilets also conforms
to the accessibility height as outlined by the Americans with
Disability Act of 1990.

45
LIXIL Group Corporate Responsibility Report 2017

GROHE SENSE GUARD

emissions target for FY2016-20 (-8% v. FY2015).

Greenhouse Gas Reduction
Sustainable Use Of Resources

GROHE SENSE GUARD, the smart water controller

anomalies in their home's waterflow. Using the GROHE

Target / Progress

Environment

Enhancing the Water-Saving Features in Products
and Services

VorMax UHET flushing technology cleans twice as wellas conventional toilets with less water.

Conserving Water in Business Activities

Water Usages ★

To help preserve water resources, the LIXIL Group is working to further improve the efficient use of

LIXIL Group

Corporate
Responsibility
Report 2017

water in our business processes by developing tailored measures for each production base.

Identifying water risk in our production facilities
As a company that uses water in our production processes, the LIXIL Group identified water supply
Scope: FY2014 covers operation in Japan and Asia, while
FY2015 and FY2016 cover a majority of the entire Grouprisks at production sites in order to better understand local conditions and introduce appropriate
countermeasures. We used international evaluation tools such as the WWF Water Risk Filter and the

Our Approach
Three Strategic Pillars
Our People
Environment

promoted improving water quality and efficiency according to individual sites, going forward, we will
also incorporate these evaluation results to promote initiatives at each production facility.

Production Sites Categorized by

Water Risk Survey Results andWater Risk Level

FY2015 Water Usage

the factory installed a wastewater recycling system with a
RO membrane filtration system, which can filter wastewater
generated in production processes such as machining andSustainable Use Of Resources

plating. The treated water is reused in production and

Performance

to flush toilets. This new system is currently one of thebiggest contributors to water saving in the factory. For example, water consumption per unit weight ofSocietyproducts was reduced by approximately 45% in FY2016 compared to FY2014 (pre-system installation).
In FY2016, fresh water usage and cost were reduced by 36,927m3 and US$15,000, respectively.

Customers & Supply Chain

Due to its success, similar projects are being rolled out in other LIXIL faucets factories in Asia. Along

Reducing water usage in factories
The LIXIL Group uses large amounts of water for aluminum product surface finishing and otherprocesses. In order to conserve water, we study the level of water usage per factory, including water
intake, water usage per process, and the installation of water circulation systems. In addition, we
promote efficient use of water by building circulation systems and engaging in other conservation

46
LIXIL Group Corporate Responsibility Report 2017

LIXIL Sanitary Fitting Manufacturing (Suzhou) Corporationthat has made a notable reduction in its water use. In 2015,

Sustainable Water Use

Contents Next

Introducing waste water recycling systems
is a factory in China affiliated with LIXIL Water Technology

Greenhouse Gas Reduction

Prev.

FY2015 excludes LIXIL Total Service Corporation, JIO
Corporation

factories mainly in Asia were designated top priority water conservation targets. While to date we have

Environmental Management

Reporting*Data excludes the tenants in the building that we cannot
assess the water intake data.

WRI AQUEDUCT to quantify local characteristics and water usage. Of the 100 manufacturing sites,

measures, as well as conduct strict wastewater management to protect and maintain water quality.

with other water saving projects, we are expecting to see even more benefits from reductions in fresh
water use and related costs.
*A type of filtration membrane that enables water to flow through while blocking impurities such as ions and other molecules.

CDP Water Information Request
The LIXIL Group has been participating in the CDP questionnaire since 2016 and actively disclosing our

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources
Performance

Society
Customers & Supply Chain
Reporting

Prev.

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47

LIXIL Group Corporate Responsibility Report 2017non-financial information to investors.
For further details, please refer to the CDP website. >FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Sustainable Use Of Resources

Recycling Resources in Operational Activities
The LIXIL Group ensures sustainable use of resources through initiatives such as recycling waste

LIXIL Group

Corporate
Responsibility

materials produced during its operations.
Based on the 3R principles - Reduce, Reuse, Recycle - LIXIL Corporation is committed to reducing
The LIXIL Group promotes the sustainable use of raw materials across the entire lifecycle of our
products, from procurement through disposal.

Report 2017
Action plan

・Pursue more environment-conscious product design and sales expansion strategies,
taking into account the entire lifecycle of both products and services.
・Improve waste recycling ratio

KPI

Group-wide:
1. Benefits from CO2 emissions reduction achieved from the products and services

Our Approach
Three Strategic Pillars

industrial waste products generated from manufacturing processes, collecting and sorting waste, andrecycling. Going forward, we plan to expand our efforts by recycling resources at the raw material
procurement and product disposal stages as well, and to extend the system globally.

Waste Materials and Recycling Rates ★

2. Levels of CO2 emissions across all operational processes

Our People
Target / Progress

Environment

Target for FY2016

Environmental Management

Progress as of 2016

Performance

Society
Customers & Supply Chain

Prev.

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1.Contributions from CO2 emissions reduction achieved from products and services
increased by 1.08 times (compared to FY2015). Created Guideline for Calculation ofEnvironmental Contribution to clarify calculation method for individual products andservices, and calculated results based on FY2015 performance
2.CO2 emissions from operational processes increased by 5% (compared to FY2015). Set
targets and initiatives for each business organization in compliance with med-termtargets.
・Created Guideline for Calculation of CO2 Emissions from Value Chain to clarify
calculation method for all processes from procurement of raw materials through to
product disposa

Target for FY2017

1.Group-wide benefits from CO2 emissions reduction achieved from products and

LIXIL Group Corporate Responsibility Report 2017

Reducing Factory Waste Materials
Recycling complex waste plastics
LIXIL Corporation's Ueno-midori bathtub-manufacturing factory uses plastic resin for its bathtub press
molding, wrapped in a protective polypropylene film to prevent the volatilization of organic solvents.
The resin and protective film were previously disposed of as waste due to the difficulty of recycling
materials with different material composition. However, working together with a waste management

services increased by 1.16 times (compared to FY2015) to achieve our mid-term CO2

processing company, we found a successful way of reusing the materials from FY2016. The pulverized

emissions target for FY2016-20
2.Group-wide levels of CO2 emissions across all operational processes reduced by 3.2%
(compared to FY2015) to achieve our mid-term CO2 emissions target for FY2016-20

resin and film is sorted, cleaned, and pelletized for reuse as resin pallet. The factory has also worked*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use).

48

entire Group*FY2015 excludes JIO Corporation.

*Above includes water resource conservation data (indirect avoided emissions and actual emissions related towater use).

Sustainable Water Use

Reporting

Scope: FY2014 covers operation in Japan and Asia,
while FY2015 and FY2016 cover a majority of theemissions target for FY2016-20 (-8% v. FY2015).

Greenhouse Gas Reduction
Sustainable Use Of Resources

1.Create a guideline for calculating the decrease in CO2 emissions to help achieve our
mid-term target for FY2016-20 (1.4 times more efficient than in FY2015), and monitor
the FY2015 result.
2. Target -1.6% in FY2016 compared to FY2015 to achieve our new mid-term CO2*1 and 2 include water conservation data on indirect CO2 emissions and the decrease in CO2 emissions when using water.

efficiently to reduce waste by minimizing defective products, as well as distilling and reusing previously
used solutions such as paint thinner. As a result, the factory has been able to reduce the total volume ofwaste by approximately 18% from 905.6 tons in FY2015 to 744.0 tons in FY2016.

Recycling of sludge in Thailand
TOSTEM THAI Co., Ltd., a LIXIL Corporation subsidiary, has

LIXIL Group

Corporate
Responsibility
Report 2017

been working to reduce its biggest industrial waste product,sludge. In Thailand, the most common treatment of industrial
waste is to bury it. However, this method has recently been
criticized as hazardous materials have leached into the soil
and groundwater. Concerned with the current process, wesuggested to a local cement manufacturer about turning thesludge into cement material, a common process in Japan.
The subsidiary worked with the government of Thailand to

Our Approach
Three Strategic Pillars
Our People
Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources
Performance

Society
Customers & Supply Chain
Reporting

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49

LIXIL Group Corporate Responsibility Report 2017resolve the challenges of developing a suitable recycling
framework. This initiative resulted in a 60% reduction in buried sludge volumes in FY2016 compared to
FY2014, and reduced costs. These initiatives, along with other community activities such as tree planting
and garbage collection, helped TOSTEM THAI gain Level 4 in the Thailand Ministry of Industry's GREEN
INDUSTRY* commendation system. We are now working to reduce new sludge landfills to zero by
FY2018.
*The green industry commendation system operated by the Thai Ministry of Industry has five achievement levels, and gives a level-specific Green Industry markto each company that fulfills the required environmental activities.

Using recycled material up to 85% in product manufacture
At GROHE's faucet-producing plants in Germany, Portugal,
and Thailand, most material used for the brass alloy in theplants come from collected recycled material. Making useof the plant's in-house alloy smelting blast furnaces, we
refine the alloys collected internally and externally. Between
70% and 85% of the brass bodies are created from recycledmaterial, and are entirely recyclable.
FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Scope and details >Performance
LIXIL Group

Corporate
Responsibility
Report 2017

The LIXIL Group is committed to conserving water, energy, and other natural resources utilized in our
products and services, across the supply chain from procurement through production, distribution,
end use and product disposal. To that aim, we work hard to gain a clear understanding of total raw
materials and energy inputs as well as CO2, air pollutants and other emissions, and implement measures
to reduce them.

Our Approach
LIXIL Group FY2016 Environmental Performance Data (PDF: 419KB) >Three Strategic Pillars
Includes the following information/data:
Our People

1. Material Balance (INPUT): Material usage, Energy usage, Water intake
2. Material Balance (OUTPUT): CO2 emissions, Waste products emissions, Water discharge, Air pollutant

Environment
Environmental Management
Greenhouse Gas Reduction
Sustainable Water Use
Sustainable Use Of Resources
Performance

Society
Customers & Supply Chain
Reporting

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50

LIXIL Group Corporate Responsibility Report 2017

emissions
Scope of Data Collection >FY2016 data indicated with a ★ have received an independent practitioner's assurance.
Details >LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Society
Human Rights
Stakeholder Engagement

Customers & Supply Chain
ReportingSociety
We engage in continual dialogue with our stakeholders andPrev.

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51

LIXIL Group Corporate Responsibility Report 2017

various activities with the society and local communities.

Human Rights

LIXIL's framework for respecting human rights
The LIXIL Group strives to uphold stakeholders' human rights in all of its operations, including end-

LIXIL Group

Corporate
Responsibility

users, business partners or other suppliers, residents living near our factories and facilities, and our
employees. In March 2016, we published the LIXIL Group Human Rights Principles, which align with a
We aim to sustainability operate as a responsible corporate citizen that respects human rights.

commitment if there are any discrepancies between the internationally recognized human rights
Action plan

Three Strategic Pillars
Our People
Environment
Society
Human Rights
Stakeholder Engagement

Customers & Supply Chain
Reporting

Prev.

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52

LIXIL Group Corporate Responsibility Report 2017

the International Labour Organization Declaration on Fundamental Principles and Rights at Work, andthe UN Guiding Principles on Business and Human Rights. Furthermore, we will adhere to the higher

Report 2017
Our Approach

number of international guidelines, including the United Nations Universal Declaration of Human Rights,

Create a LIXIL Group Human Rights Principles and promote awareness amongst all LIXILGroup employees

KPI

Implementation of Human Rights Principles learning across the Group (%)

standards and the laws and regulations of individual countries or regions.
The LIXIL Group has also established an internal concern-raising system for reporting concerns
relating to the entire Group, including overseas subsidiaries, and accepts information regarding any
LIXIL Group compliance violations from materials suppliers, subcontractors, and other business partners.
Details >Target / Progress
Target for FY2016

・Ensure full implementation across the Group

Progress as of 2016

・In Japan, LIXIL Corporation fully implemented a human rights policy education
program in the form of quarterly interactive departmental meetings

Target for FY2017

・Implementation of training in main LIXIL Corporation overseas subsidiaries: 100%

Action plan

Create a framework for human rights due diligenceacross the whole Group. Moreover, as a global company, we will strengthen human rights due diligence

KPI

Status of creating an execution plan for human rights due diligenceprocesses and disclose the results.

LIXIL Corporation promotes human rights principles among all employees in Japan. In FY2016, wesought to deepen understanding of human rights issues in business by implementing a human rights
principles education program in interactive departmental meetings, and encouraged employees todiscuss issues amongst each other. Going forward, we will promote human right principles more broadly* Due diligence on human rights: to put in place measures that identify, prevent, reduce, or respond to any negative impact on human rights caused by theactivities of a company or its related companies, and to regularly monitor their effectiveness.

Target / Progress
Target for FY2016

・— (To be determined in FY2017)

Progress as of 2016

・Determined KPI with Human Resources, Compliance, Auditing, and Purchasing
Departments, and started surveying actual conditions

Target for FY2017

・Create an execution plan for human rights due diligence in all Group companies,
suppliers, and other business partners

Related principles:
LIXIL Group Human Rights Principles (PDF:76KB) >Stakeholder Engagement

Our Approach
Our success depends on the support of a broad range of stakeholders. We are committed to proactively

LIXIL Group

Corporate
Responsibility

engaging with our stakeholders (including customers, business partners, community members where
our operational facilities are located, shareholders, our employees and their families) to collect opinions
The LIXIL Group proactively engages with stakeholders to help improve the quality of people's daily
lives and resolve social issues.

Report 2017
Action plan

Our Approach
Three Strategic Pillars

Stakeholder Engagement

Customers

Number of top-level meetings held across the Group (#); Meeting quality based on
meeting content

・Plan and execute top-level meeting with external experts
・Establish a system to ensure timely communication of the content of the top-levelmeeting with the Board

Progress as of 2016

・Invited human rights experts for top-level meetings
・Held workshops on human rights, and discussions at the executive officer level

Target for FY2017

・Establish a system to facilitate at least one top-level meeting each year
・Communicate the content of the top-level meeting with the Board
・Disclose the content of the top-level meeting

KPI

Suppliers

Hold regular stakeholder engagement meetings and disclose the content of thesemeetings

improvements. We also hold regular meetings with suppliers to share information on
regulatory trends and new corporate purchasing strategies. More
Local communities

The LIXIL Group operates 99 factories worldwide. As a responsible corporate citizen, on
top of respecting local culture and customs and create responsible products and jobs, we
also contribute to the development of the surrounding community in which we operate.
We hold community dialogues at factories and sales offices in Japan to encouragecommunication with local residents. More

Shareholders andinvestors

We hold approximately 625 discussions every year with investors around the world tohelp promote sustainable growth and enhance corporate value. We disclose timely
and transparent information in English and Japanese via our Annual Report (Integrated
Report from FY2015), our Investor Relations web pages and the Tokyo Stock Exchange
website. More

Employees

The LIXIL Group boasts approximately 70,000 employees. We strive to create an inspiring
working environment that encourages diversity and incorporates employee opinion
expressed via systematic global employee satisfaction surveys or discussions between theunion and the company. MoreNPOs, NGOs,
government anduniversities

We partner with NPOs/NGOs and universities in the research and development related
to global sanitation, and support environmental education for next-generation leaders.

Number of stakeholder meetings held across the Group (#); Meeting quality based on
meeting content

Target / Progress

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53

LIXIL Group Corporate Responsibility Report 2017

We build and maintain strong relationships with our suppliers by facilitating two-way
procurement policies, recognize current circumstances and follow through on promised

Customers & Supply Chain
Reporting

We incorporate customer opinions as well as providing timely and appropriate disclosure
on our products and services. We offer customer support via telephone, email, and atcommunication. In response to recent Responsible Procurement Surveys, we share ourTarget for FY2016

Action plan

Type of Engagement

128 showrooms globally. More

Target / ProgressSociety
Human Rights

Stakeholders

meetings
KPI

Our People
Environment

Hold regular top-level meetings with external experts and disclose the content of theseand incorporate their voices in our business operations and social contribution activities.

Target for FY2016

・Extend the reach of currently implemented mechanisms and encourage moresophisticated and effective engagement initiatives
・Encourage the sharing and adaptation of successful engagement initiatives across theGroup

Progress as of 2016

・Engaged at least once with each stakeholder
・Collected and shared information on stakeholder engagement across the Group

Target for FY2017

・Establish a system for disclosing our engagement activities and resulting outcomes, forinternal and external audiences
・Hold at least one annual dialogue with each group of stakeholders (shareholders,
employees, business partners, local residents, end users, suppliers, etc.)

Government,

Engaging in vigorous but transparent dialogue with government authorities is aindustrial associationnecessary process to help shape a sustainable society. We are involved in several
industrial associations whose mission includes engaging with government on behalfof their respective industry, such as plumbing, business, metals and electrical, and

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment

Stakeholder Engagement

Customers & Supply Chain
Reportingskills. Students are sent on placements with local* Total fees from FY2014 and FY2016 include ASD Americas Holding Corp.(American Standard) and GROHE Group S.à r.l.(Grohe), respectively.

these skilled plumbers to install its premium products
at the highest professional standard. Spurred on

Examples of LIXIL Stakeholder Engagementby its overwhelming success, GROHE is looking to

LIXIL Group focuses on making a positive social impact in priority areas such as global sanitation andhygiene, water conservation and environmental sustainability, and diversity and inclusion, as well
as areas where our expertise can make the biggest difference. The "Endowments and Consulting
Review Committee", which our CEO serves as a member of, is held on regular basis to screen, assess
and prioritize significant donations and sponsorships to ensure our profits contribute to society
appropriately and effectively.

GROHE Dual Tech students at the training facility in Mumbai

extend the training program to Kenya.

Natural Disaster Aid and Recovery Support
Disaster recovery Initiatives in Japan
LIXIL Corporation has supported various recovery

Monetary and other contribution (in JPY)

FY2015FY2016

Charitable donations

130.6 Million

122.8 Million

Community investments

856.8 Million

880.8 Million

Commercial initiatives

600.0 Million

600.6 Million

Scope: LIXIL Group (non-consolidated) and LIXIL Corporation (non-consolidates), and some of the subsidiaries of LIXIL Corporation (Grohe and American
Standard)* Monetary and other contributions have been collected and categorized in accordance to the London Benchmarking Group Guidance Manual (June 2015).

efforts following the March 2011 earthquake andtsunami in Northeast Japan and the April 2016
earthquake in Kumamoto. These activities include
donations of basic daily necessities such as toilets
and hand-washing facilities, monetary donations,
sponsoring recovery projects, and employee-driven
charity events.
Employees are encouraged to offer their time

Underprivileged young people in many emerging countries often lack the skills to secure stable
employment, while at the same time the local society suffers a chronic shortage of skilled workers.

The German-modelled, dual-track training program, has been underway in Mumbai-Kurla inDonated windows and toilets to the "Playground-for-All" in
Minamisoma as part of a recovery support projectand expertise to help local communities which often proves to be a valuable experience that improves
their engagement level. More (Japanese only)

Mondo e.V., a non-profit organization committed to supporting disadvantaged youth.

LIXIL Group Corporate Responsibility Report 2017

firms, resulting in a nearly 100% placement rate upon
graduation. GROHE benefits from a great pool of

GROHE addresses this issue through GROHE Dual Tech, conducted in conjunction with Don Bosco
54

gain practical and classroom-based education on

JPY 29.5 million (FY2015); JPY 55 million (FY2016))

Plumbing skills for a more secure future

Contents Next

date, GROHE has helped over 850 young people
plumbing, as well as computer and English-language

Youth Empowerment

Prev.

Delhi, as well as Manila-Tondo in the Philippines. To

manufacturing. (Total political contributions (FY2013-2016): less than JPY 1 million per
year. Total industrial association fees*: JPY 11.9 million (FY2013); JPY 26.4 million (FY2014);

Society
Human Rights

India since 2009, and has been expanded to New

Providing safe sanitation for communities in needhave held over 100 community dialogues in total. We cultivate meaningful relations with local residents
and authorities by implementing initiatives based on the conversations during community dialogues,

SATO products are innovative, life-saving, and

LIXIL Group

Corporate
Responsibility
Report 2017

For example, our Handa Factory in Aichi Prefecture started to help local day-care centers withsanitation. In addition to growing the SATO businessemergency evacuation procedures after a Principal voiced concern that the predominately female staff

to reach more people in Asia and Africa, LIXIL havemight not be physically capable of evacuating all the children safely on their own. The same factory

been working with NGOs to support communities

is also participating in a range of community-inspired activities, including road accident prevention

with urgent needs. (More information on SATO

initiatives, accepting internships, factory visits, and providing classes on product safety.

products)
We are committed to helping ensure a safe andsanitary environment in disaster relief efforts. Poor

Our Approach
Three Strategic Pillars
Our People
Environment
Society
Human Rights
Stakeholder Engagement

Customers & Supply Chainand ensure consistent communication and follow up after the initial dialogue.

low-cost solutions that provides safe and hygienic

sanitary conditions on the poverty-stricken Caribbean

Teaching plumbing skills and how to improve hygiene to students
in Haiti.

island of Haiti were exacerbated by the 2010 earthquake, with open latrines increasing the risk of the
spread of disease by airborne insects. American Standard engineers worked with Plumbers without
Borders (PWB) to teach students at Haiti Tec plumbing skills and how to improve hygiene. With the help

Partnerships
UNICEF

Working together to promote safe sanitary facilities in Africa.

Japan International
Cooperation Agency(JICA)

Promoting field trials of the no-water Green Toilet System and water-saving Micro
Flush Toilet System in Kenya.

WaterAid

Cooperating to improve the lives of people living in areas without hygienic toilets, inaddition to collaborating on a white paper that analyzes the socioeconomic losses
associated with underdeveloped sanitary environments.
More(PDF:10.2MB)

Toilet Board Coalition

Helping develop sustainable, large-scale potential sanitation solutions as a founding
member of the multi-industry group. More

NIJIIRO DIVERSITY

Conducting awareness surveys with the non-profit organization to identify the issues
LGBT and other sexual minorities encounter when using public toilets, with the aimof providing a comfortable toilet space for all. More (Japanese only)of NGOs like PWB and Food for the Poor, American Standard donated 7,900 SATO products to towns
and villages in Haiti, as well as other parts of the Caribbean and Central America. SATO products werealso delivered to survivors of the 2015 devastating earthquakes in Nepal with the help of WaterAid.
Through private and public partners, we are also helping rural communities with difficulties
accessing adequate sanitation. In FY2016, few thousand SATO products were delivered to Bangladeshwith the help of BRAC, an international NGO. We will continue to work alongside International NGOs
such as WaterAid and Habitat for Humanity, to help ensure a safe and sanitary environment forcommunities in need.

Local Community Engagement

Environmental, Cultural and Social Programs

Holding community dialogues in factories, sales and retail bases
Reporting
LIXIL Corporation regularly holds community

Forest preservation

Encouraging our employees and their families to participate in voluntary activities toprotect forest and mountain environments in cooperation with government, NPOs
and forestry cooperatives. More (Japanese only)

Water and environment
related education
activities

Offering educational classes at primary schools on the global water and sanitation
challenge. More (Japanese only)

Cultural activities

Promoting cultural activities in areas related to our history, such as ceramic andtextile museums, gallery management and publishing. Moredialogues with local stakeholders (such as local
government officials, business owners, residents etc)
on how we can contribute back to the community.
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These are held at factories, sales and retail basesaround Japan.
In fiscal 2016, LIXIL Corporation held community
dialogues at 11 new locations in Japan, attracting

55
LIXIL Group Corporate Responsibility Report 2017

over 160 participants. Over the past five years, weCommunity dialogue with the Kitami Sales Office of Dohoku Sales
Branch, Hokkaido Branch Office

Click here to see more detail on other Japan-based activities (Japanese only.)

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
Responsible Supply Chain Management
Product Safety & Quality
Customer Satisfaction

Reporting

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56

LIXIL Group Corporate Responsibility Report 2017

Customers & Supply Chain
We are committed to delivering customer-focused products and services
and promoting responsible supply chain management.

Responsible Supply Chain Management

Procurement Policy
Fair and Impartial Trade Practices

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars

We will provide suppliers with equal and open opportunities, and solicit suppliers broadly. Whenselecting suppliers, we will evaluate them fairly and impartially, paying due consideration to CR aspects
The LIXIL Group seeks to ensure stable product supply and fulfill stakeholder accountability byidentifying and addressing risks at the procurement stage, and managing our processes across our
supply chain.

and delivery.
Adherence to Social Norms

Action plan

Extend our Japanese CR procurement process across the Group

KPI

Responsible procurement surveys coverage ratio (based on purchased amount) (%), andWe will observe laws, regulations, and rules related to procurement activities, and act in a way thatpercentage of suppliers which satisfy CR management standards (%) and improvement
rate (%)

gains the trust of society.
Respect for Human Rights and Consideration for Working Environment

Target / Progress
Target for FY2016

・Promote Group-wide awareness of the LIXIL Group's procurement strategy
・Implement existing CR procurement process across the Group

Progress as of 2016

・Achieved responsible procurement surveys coverage ratio of 85% in Japan and 80%
outside of Japan, CR management standards conformity rate of 94% in Japan and 88%
outside of Japan

Our People
Environment
Societysuch as environmental management, human rights, and workplace safety, in addition to quality, cost,

Target for FY2017

We respect internationally declared standards of human rights, and pay due attention on ensuring anappropriate working environment.

*exclude GROHE Group S.a r.l., American Standard Brands and PERMASTEELISA GROUP

Care for the Environment

・Achieve responsible procurement surveys coverage ratio of 90% in Japan and 60%
outside Japan, 90% conformity rate, and 100% improvement rate

We will preferentially procure raw materials that have low environmental impact.

*exclude PERMASTEELISA GROUP

Customers & Supply Chain
Responsible Supply Chain Management
Product Safety & Quality

Promotion of Mutual Prosperity with Our Suppliers

Procurement Policy

Supplier Code of Conduct(PDF:156KB) >Customer Satisfaction

The LIXIL Group has established a Procurement Policy to develop healthy business partnerships with
Reportingcounterparts worldwide. This policy forms the basis of our overall supply chain management. In FY2017,
the Group developed a Procurement Compliance Policy to provide more detailed guidance for thewhole Group. We also compiled our Supplier Code of Conduct and are working to ensure business
partners fully understand all the items they are required to adhere to.

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57

LIXIL Group Corporate Responsibility Report 2017

We will conduct transactions in a way that promotes mutual growth as partners.

Promoting Responsible Procurement that Upholds

Flowchart for important suppliers

the Environment and Labor Safety
LIXIL Group

The LIXIL Group promotes responsible procurement. The Supplier Assessment Standards used to selectCorporatebusiness partners includes: quality, cost, and delivery (QCD) criteria and technological prowess, theResponsibility

human rights, and labor safety. The supplier assessment criteria are applied in both the selection of newReport 2017ability to deliver stable supply, sustainable use of resources, proper control of chemical substances,
partners and the regular inspection of existing partners. Having selected a business partner, we also
conduct assessments of procured products. We seek to strengthen responsible procurement across our
network of international business partners, which has been extended by mergers and acquisitions.

Our Approach
Three Strategic Pillars

Working with our Suppliers

Our People

Supplier Breakdown

Environment

In terms of procurement transaction amounts, nearly 90% of LIXIL Corporation suppliers are based inJapan, followed by China, Austria, and Thailand. We determine our important suppliers using the criteria

Societyin the flowchart below, prioritizing them when we distribute our procurement strategies, conduct
surveys, and follow up on improvements.

Customers & Supply Chain

Procurement transaction amount breakdown by country

Responsible Supply Chain Management
Product Safety & Quality

Responsible Procurement Surveys and Follow-up
ActionLIXIL Corporation actively shares our Procurement Policy and Supplier Code of Conduct to help steer

Customer Satisfaction

our expanding and increasingly complex supply chain network following five-company merger in 2011
and subsequent series of international mergers and acquisitions.

Reporting

We use responsible procurement surveys to gain a strong understanding of business partners'
responses on 66 different survey items (46 for Japan, where low-risk items have been removed).
We visited over 100 suppliers inside and outside Japan that performed poorly in our survey to set
targets for improvement and provide necessary support. We attained our target of 90% conformity on

Prev.

procurement assessment items. The survey results serve as a valuable evaluation tool when appointing

Contents Next
58

LIXIL Group Corporate Responsibility Report 2017business partners.
[Scope of application] Suppliers to LIXIL Corporation and its subsidiaries*Excluding GROHE Group S.a r.l., American Standard Brands, PERMASTEELISA GROUP

Responsible Procurement Survey
LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach
Three Strategic Pillars
Our People
Environment
Society

Survey Results
OverseasJapan

1. CR Operations

10 questions

6 questions

2. Fair Business

8 questions

8 questions

3. Human Rights

7 questions

6 questions

Policy; follow up
survey results

Totaland related
activities

conformity
rate

5. Health & Safety

9 questions

6. Environmental Conservation of the Planet

14 questions

8 questions

7. Regional Contribution

5 questions

2 questions

Total

66 questions

46 questions

To suppliers overseas (English) (PDF:118KB) >To suppliers in Japan (English) (PDF:100KB) >FY2017

Targets

Results

Targets

Results

Targets

Japan

72%

80%

82%

80%

85%

90%

Overseas*

82%

60%

81%

60%

80%

60%

Japan

93%

85%

94%

90%

94%

90%

Overseas*

91%

85%

85%

90%

88%

90%

Japan

/

100%

97%

100%

100%

100%

(based onDistribute

7 questions

9 questions

FY2016

Results
Coverageratio
purchasedamount)13 questions

FY2015

KPI

Procurement

4. Labor

Survey sheets

FY2014
Tasks

Improvement
rate[Scope of application] Suppliers to LIXIL Corporation and its subsidiaries*FY2014-2016: Excluding GROHE Group S.a r.l., American Standard Brands, PERMASTEELISA GROUP.
FY2017: Excluding PERMASTEELISA GROUP*.
Japan: Procurement by operating sites in Japan
Overseas: Procurement by operating sites overseas*FY2014 data have been revised

Customers & Supply Chain
Responsible Supply Chain Management
Product Safety & Quality
Customer Satisfaction

ReportingManagement of Chemical Substances
LIXIL Corporation has set rules on chemical substances that are forbidden or require strict control foruse in products and/or during production processes.
LIXIL's list of controlled substances can be downloaded from the link below:
List of the Environment-Related Substances to be controlled by LIXIL Corporation(English version) (updated on November 17, 2016) (PDF: 51KB) >Prev.

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59

LIXIL Group Corporate Responsibility Report 2017

Product Safety & Quality

LIXIL Group Quality Policy

LIXIL Group

Corporate
Responsibility
Report 2017
Our Approach

We will continue to improve its product quality management system and provide clear guidance on
the safe use of products.

・LIXIL strives for high quality in all processes, pursuing customer satisfaction and contributing to
The LIXIL Group is committed to maintaining and strengthening our ties with our customers by
ensuring superior quality in manufacturing and services, and consistently improving our product quality
management system to eradicate product-related accidents.
Action plan

Make continuous improvements to the product quality management system

KPI

Number of serious product accidents across the Group (#)

improving people's comfort and lifestyles.
・We generate the world's highest quality, listening to our customers and striving for excellence
through KAIZEN activities, specifically going and seeing for ourselves and thoroughly understanding
the situation.
・We develop the management system that continuously improves the quality of our employees,
products and processes, and aim for business growth.

Target / ProgressThree Strategic Pillars

Target for FY2016

・Zero cases of serious product accidents across the Group・Extend product safety strategy by setting specific KPI for each technology business

Progress as of 2016

・Four serious product accidents across the Group. Held a product accident conference
to share details of the experience and confirm countermeasures

Target for FY2017

・Number of serious product accidents across the Group: 0 cases

Our People
Environment
Society
Customers & Supply Chain
Responsible Supply Chain Management
Product Safety & Quality

Action plan
KPI

Rate of disclosed instruction manuals for the main products on the website across theGroup (%)

Target for FY2016

・Disclose instruction manuals online for all main products in Japan

Progress as of 2016

・Disclosed instruction manuals online for all main products in Japan・Plan to disclose instruction manuals for Group company main products in FY2017

Target for FY2017

・Disclose instruction manuals online for all main products across the Group

Our Approachsociety and a source of corporate profitability. To ensure that this belief is shared among all employees,

Contents Next

we have published the LIXIL Group Quality Policy in 14 languages and are continuously pursuing
excellence in product manufacturing and services around the world. As significant product defects leadto customer anxiety and damage corporate reputation, our cross-functional teams work together to60
LIXIL Group Corporate Responsibility Report 2017

Our Quality & Six Sigma Division, which reports directly to the CEO, develops effective group-wide
product quality management systems and resolves quality issues across the Group under the leadershipof the Chief Technology Officer (CTO). Product Quality divisions at LIXIL's four technology businesses

Target / Progress

The LIXIL Group firmly believes that product quality is the key to earning the trust of customers andPrev.

Management Structure

Increase awareness of how to safely use our products

Customer Satisfaction

Reporting

LIXIL Product Safety Principles(PDF:40KB) >resolve any issues in accordance with the LIXIL Product Safety Principles.

and its Japan distribution arm, LIXIL Japan Company, assure the quality of each product and service andresolve issues under the direct guidance of dedicated Chief Quality officers (CQO). LIXIL Corporation
also conducts regular management reviews by inviting the CQO and relevant employees to quarterlygroup-wide Quality Management Committee meetings.

Commercialization, production, sales
We only commercialize products that have gone through and passed vigorous stress tests and quality
checks for durability, weather resistance, etc. Products that require specific safety and quality labelling

LIXIL Groupare clearly marked in our catalogues and other sales materials as meeting those criteria.

Corporate

Preparing for product defects & issues

Responsibility

We have a system to incorporate customer opinions and experiences with regard to product-related

Report 2017

accidents and defects, and thoroughly investigate the root cause for future improvements.
LIXIL Stage gate system

Our Approach
Three Strategic Pillars*Each technology business and LIXIL Japan Company include subsidiaries of LIXIL Corporation.

LIXIL Corporation introduced the LIXIL stage gate system to evaluate projects at five key points fromthe product development through to the product assurance stages. Internal gate keepers assess andapprove products at each stage gate to ensure commercial business decisions incorporate product

Our People
Environment
Society
Customers & Supply Chain
Responsible Supply Chain Management

Enhancing Quality Across Entire Product Lifecycle
To ensure customer safety, LIXIL Corporation is focused on enhancing quality across the full lifecycleof a product, from development through design, procurement, manufacture, distribution, and aftersales support.
Design & development
We use Fault Tree Analysis (FTA) and Failure Mode and Effect Analysis (FMEA) in risk assessments during

Product Safety & Quality

design and development. To help us reflect customer feedback, we are conducting a review of the

Customer Satisfaction

original Design Review Based on Failure Mode (DRBFM), and working to strengthen implementation
frameworks, on-the-ground procedures, and assessor and facilitator skills.

ReportingMaterial & parts procurement
We require our suppliers to fulfil a certain set of criteria, and cooperate with them to resolve andimprove on any issues.

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61

LIXIL Group Corporate Responsibility Report 2017

quality considerations. Regular reviews of the evaluation criteria for each gate help us develop higher
quality product.

LIXIL Group

Corporate

Responding to Serious Product-related Accidents

Nurturing a Culture that Strives for Superior Quality

At LIXIL Corporation in Japan, whenever a product-related accident occurs, information is gathered in

Product Manufacturing

the Quality & Six Sigma Division within 24 hours from the receipt of notification, and an emergency
notice is sent out to relevant departments. The division in charge of customer services coordinateswith other departments to implement on-site response and investigation of the accident. A report is

Responsibility

submitted to the relevant authorities within 10 days as stipulated by the government's reporting andReport 2017reoccurrence, we reflect lessons learned from accidents to design schematics, which are adjusted to

Our Approach

disclosure procedures on product accidents under the Consumer Product Safety Act. To prevent a

LIXIL Corporation holds LIXIL Quality Monthcampaigns to enhance awareness of productquality, expand quality management systems, andencourage improvements. The company holds
Product Quality Forums to share internal quality

improve the safety of our products and proactively improve our safety technology.

improvement initiatives. In FY2016, selected staff

Procedure for Responding to Accidents as Soon as They Occur

compete on best practices for improvements.

from 161 divisions worldwide came together toDuring each Quality Month campaign, posters were put up in all factories, and staffs wereencouraged to submit proposals for improvements.

Three Strategic Pillars
Our People

Information Disclosure and Communication

Environment

The LIXIL Group publishes product-specific instructions on the website to ensure safe product use,

Societyalong with videos illustrating how to care for and clean products to ensure appropriate use.

Customers & Supply Chain

External Recognition

Responsible Supply Chain Management
Product Safety & Quality

In 2014, LIXIL Corporation won the Excellence Award in

Customer Satisfaction

Reportingthe large manufacturer and importer category for the Best

Number of serious product-related accidents in FY2016
4 incident.

Contributors to Product Safety Awards program run byJapan's Ministry of Economy, Trade and Industry (METI).
METI commended the company for its ground-breaking
10-year guarantee services and its commitment to studying
problematic products to improve functionality. Before its

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amalgamation, INAX Co., Ltd. won the Director-General
for Commerce and Distribution Policy Award in 2010 inrecognition of its dedicated accident prevention measures during long-term product use.

62
LIXIL Group Corporate Responsibility Report 2017

Customer Satisfaction

Professional User Satisfaction of Products and Support Services

LIXIL Group

Corporate
Responsibility

We hold training workshops for commercial customers on sashes, doors, entrances, kitchens, andbathrooms. Practical construction courses are provided to help boost end consumer satisfaction.

The LIXIL Group is constantly enhancing its products and services across the Group to ensure continued
and improved customer satisfaction.

Report 2017
Action plan

Our Approach
Three Strategic Pillars
Our People

Monitor customer satisfaction levels and reevaluate collected data to help improvesatisfaction levels

KPI

Customer satisfaction survey towards all Group products and services (%)

Target / Progress
Target for FY2016

・Establish a mechanism for measuring and disclosing customer satisfaction, andimplement it across the Group

Progress as of 2016

・Conducted customer satisfaction surveys on product quality and customer support.
Expanded scope of responses from call centers only to: 1) product quality, 2)
showrooms, 3) call centers, 4) after maintenance, and 5) sales representatives. Result ofcustomer satisfaction survey: 71.9%

Target for FY2017

・Continue initiative to improve customer satisfaction across the Group

Environment

End Customers
LIXIL Corporation's customer service and repair centers receive approximately 270,000 inquiries eachSocietymonth. We are working to improve products and services with a PDCA approach by using our customer
Customers & Supply Chain
Responsible Supply Chain Management
Product Safety & Quality
Customer Satisfaction

Our Approach

improve our communications and ultimately enhance customer satisfaction.
developing products and services that satisfy both construction-related commercial customers and end
consumers, while communicating with them effectively.

Business Customers
Contents Next

LIXIL Corporation conducts satisfaction surveys of its commercial customers. In FY2016, we achieved anaverage of 71.9% in terms of the quality of our products and customer support, including showrooms,
call centers, after-sales maintenance, and sales representatives. We are committed to continuing thesesurveys and plan to extend systems for measuring and disclosing customer satisfaction across the63
LIXIL Group Corporate Responsibility Report 2017

Our customer service center conducts surveys on service quality twice a year. We use the results to

To ensure that our customers enjoy all aspects of their living spaces, the LIXIL Group is focused on

ReportingPrev.

opinion database to analyze and visualize problems from a customer perspective.

Group in order to achieve higher quality products and services.

Customer Inquiries

LIXIL Group

Corporate

ReportingResponsibility
Report 2017

Details of how we report on
our Corporate Responsibility activities and milestones.

Our Approach
Three Strategic Pillars
Our People
Environment
Society
Customers & Supply Chain
Reporting
Scope Of Reporting
CR Library
Global Reporting Initiative(GRI) Index

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64

LIXIL Group Corporate Responsibility Report 2017

Scope Of Reporting

Independent Practitioner's Assurance Report
LIXIL Group Corporation has received independent practitioner's assurance from Deloitte Tohmatsu

LIXIL Group

Corporate
Responsibility
Report 2017

Sustainability Co.,Ltd. regarding a portion of its environmental performance and employee-related
information.
The LIXIL Group is committed to providing prompt and transparent disclosure, seeking to build longterm trust of our stakeholders while achieving sustainable growth that complements society. We
advance our Corporate Responsibility (CR) activities by establishing lasting relationships with our
stakeholders through appropriate disclosure, reporting, and dialogue.
Details of our CR activities and related information are disclosed on our website. We also provide an

Our Approach

update of CR activities in our annual report. Please also see the Corporate Governance section of thiswebsite for information on our corporate governance policies.

Three Strategic Pillars
Our People

Reporting Period

Environment

Updated CR related information for FY2016 (April 1, 2016 to March 31, 2017) has been published on
October 31, 2017. We plan to update the report for the next fiscal year in September 2018.

Society
Customers & Supply Chain
Reporting

Coverage
CR activities of LIXIL Group Corporation, as well as LIXIL Corporation and other consolidated subsidiaries
are covered in the report.

Scope Of Reporting
CR Library

The scope is provided in footnotes for matters that have narrower coverage.
Please click below for further information on the scope of coverage:

Global Reporting Initiative(GRI) Index

Employee-related Information (scope, method and period) (PDF:61KB) >Environmental performance information (scope, method and period) (PDF:61KB) >Prev.

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65

LIXIL Group Corporate Responsibility Report 2017

Independent Practitioner's Assurance Report (PDF:178KB) >CR Library
LIXIL Group

Corporate
Responsibility
Report 2017

The Current corporate responsibility activities are reported in the Sustainability section of this website.

FY 2015
LIXIL Group Corporate Responsibility Report 2016 (published March 2016) (PDF:9.2MB) >Our Approach
Three Strategic Pillars

Detailed information (FY2015)

Our People

Detailed action plan, KPI and target for governance(PDF:78KB) >Environment

CR Activities (FY2012-2015) Targets and Results(PDF:288KB)>

Society

Employee-related Information (scope, method and period)(PDF:36KB) >Environmental performance Information (scope, method and period)(PDF:36KB) >Customers & Supply Chain
Independent Practitioner's Assurance Report(PDF:188KB)>
Reporting
Scope Of Reporting
CR Library
Global Reporting Initiative(GRI) Index

FY 2014
CSR Management 2015 English version (published September 2015) (PDF:5.5MB) >FY 2013
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66

LIXIL Group Corporate Responsibility Report 2017

CSR Management 2014 English version (published August 2014) (PDF:7.6MB) >Global Reporting Initiative(GRI) Index

G4-11

a. Report the percentage of total employees covered by collective bargaining agreements.

G4-12

a. Describe the organization's supply chain.

Responsibility

a. Report any significant changes during the reporting period regarding the organization's
size, structure, ownership, or its supply chain, including:This report contains Standard Disclosures from the GRI G4 Sustainability Reporting Guidelines.

G4-13

Customers & Supply Chain
Reporting
Scope Of ReportingG4-2

as CEO, chair, or equivalent senior position) about the relevance of sustainability to theorganization and the organization's strategy for addressing sustainability.

a. Provide a description of key impacts, risks, and opportunities.

G4-15

G4-16

・Holds a position on the governance body・Participates in projects or committees
・Provides substantive funding beyond routine membership dues
・Views membership as strategic
This refers primarily to memberships maintained at the organizational level.

G4-3

a. Report the name of the organization.

・Corporate Information

G4-4

a. Report the primary brands, products, and services.

・About Us > LIXIL at a Glance

G4-5

a. Report the location of the organization's headquarters.

・Corporate Informationa. List all entities included in the organization's consolidated financial statements orequivalent documents.
b. Report whether any entity included in the organization's consolidated financial
statements or equivalent documents is not covered by the report.

a. Report the number of countries where the organization operates, and names ofcountries where either the organization has significant operations or that are specifically
relevant to the sustainability topics covered in the report.

・Worldwide Presence

G4-7

a. Report the nature of ownership and legal form.

・Corporate Information

G4-8

a. Report the markets served (including geographic breakdown, sectors served, and typesof customers and beneficiaries).

・About Us > LIXIL at a Glance・otal number of employees
・Total number of operations
・Net sales (for private sector organizations) or net revenues (for public sector
organizations)・Total capitalization broken down in terms of debt and equity (for private sector
organizations)G4-17

The organization can report on this Standard Disclosure by referencing the information in
publicly available consolidated financial statements or equivalent documents.
a. Explain the process for defining the report content and the Aspect Boundaries.
G4-18

b. Explain how the organization has implemented the Reporting Principles for Defining
Report Content.

G4-19

a. List all the material Aspects identified in the process for defining report content.

a. Report the total number of employees by employment contract and gender.
b. Report the total number of permanent employees by employment type and gender.

Contents Next
G4-10

c. Report the total workforce by employees and supervised workers and by gender.
d. Report the total workforce by region and gender.
e. Report whether a substantial portion of the organization's work is performed by workers ・Performance
who are legally recognized as self-employed, or by individuals other than employees orsupervised workers, including employees and supervised employees of contractors.
f. Report any significant variations in employment numbers (such as seasonal variations in
employment in the tourism or agricultural industries).

－

・

有価証券報告書／事業の内
容 (P.8-14) (Available in Japanese)(PDF:2.2MB)・Annural Report 2017 / Principal
Group companies (P.69-70)
・Material Issues > Material Issues
Selection Process・Material Issues > List of LIXIL Group's
Material Issues

a. For each material Aspect, report the Aspect Boundary within the organization, as

・Corporate Information
・About Us > LIXIL at a Glance

・Quantity of products or services provided

・Messege > Message from the
Corporate Responsibility (CR)Committee Chairperson

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

a. Report the scale of the organization, including:

G4-9

LIXIL Group Corporate Responsibility Report 2017

other initiatives to which the organization subscribes or which it endorses.

・Message > Commitment to the UN
Global Compact

international advocacy organizations in which the organization:

ORGANIZATIONAL PROFILE

Global Reporting Initiative(GRI) Index

67

a. List externally developed economic, environmental and social charters, principles, ora. List memberships of associations (such as industry associations) and national or

・Annural Report 2017 / Measuresagainst Risks That May Influence
Management Strategy (P.49-50)

G4-6Management > Management ofChemical Substances
・Sustainable Water Use > Conserving
Water in Business Activities

・Message > Message from the CEO

・Annural Report 2017/ Business risks(P.67-68)

CR LibraryPrev.

a. Report whether and how the precautionary approach or principle is addressed by theorganization.

Related Page

a. Provide a statement from the most senior decision-maker of the organization (suchOur People

Society

Indicator

G4-14

STRATEGY AND ANALYSIS
G4-1

Environment

・Invester Relations

・Environmental Management・Responsible Supply Chain

GENERAL STANDARD DISCLOSURES
Item

Three Strategic Pillars

・Changes in the location of, or changes in, operations, including facility openings,
closings, and expansions
・Changes in the share capital structure and other capital formation, maintenance, andalteration operations (for private sector organizations)

・Changes in the location of suppliers, the structure of the supply chain, or in relationships
with suppliers, including selection and termination

Report 2017
Our Approach・Responsible Supply Chain
Management > Working with our
Suppliers

LIXIL Group

Corporate

・A Fair & Rewarding Workplace >Labor-Management Relationshipfollows:

G4-20

・Report whether the Aspect is material within the organization
・If the Aspect is not material for all entities within the organization (as described in G417), select one of the following two approaches and report either:–The list of entities or groups of entities included in G4-17 for which the Aspect is notmaterial or–The list of entities or groups of entities included in G4-17 for which the Aspects ismaterial
・Report any specific limitation regarding the Aspect Boundary within the organization

・Scope Of Reporting > Coverage

a. For each material Aspect, report the Aspect Boundary outside the organization, as

a. Report the composition of the highest governance body and its committees by:

・Executive or non-executive

follows:

G4-21

・Report whether the Aspect is material outside of the organization
・Water Conservation & Environmental
・If the Aspect is material outside of the organization, identify the entities, groups of
Sustainability
entities or elements for which the Aspect is material. In addition, describe the geographical

LIXIL Group

location where the Aspect is material for the entities identified
・Report any specific limitation regarding the Aspect Boundary outside the organization

Corporate

G4-22

a. Report the effect of any restatements of information provided in previous reports, andthe reasons for such restatements.

Responsibility

G4-23

Report 2017

Boundaries.

G4-38

・Membership of under-represented social groups
・Competences relating to economic, environmental and social impacts
・Stakeholder representation－－

a. Report whether the Chair of the highest governance body is also an executive officer (and,G4-39

Environment
Societya. Provide a list of stakeholder groups engaged by the organization.

・Stakeholder Engagement

G4-25

a. Report the basis for identification and selection of stakeholders with whom to engage.

・Stakeholder Engagement

a. Report the nomination and selection processes for the highest governance body and its

G4-26

a. Report the organization's approach to stakeholder engagement, including frequency ofengagement by type and by stakeholder group, and an indication of whether any of the・Stakeholder Engagement
・A Fair & Rewarding Workplace >committees, and the criteria used for nominating and selecting highest governance bodymembers, including:・Whether and how diversity is consideredengagement was undertaken specifically as part of the report preparation process.

G4-27

Employee Opinion Surveys

G4-40

a. Report key topics and concerns that have been raised through stakeholder engagement,
・Stakeholder Engagement
and how the organization has responded to those key topics and concerns, including
・A Fair & Rewarding Workplace >through its reporting. Report the stakeholder groups that raised each of the key topics
Employee Opinion Surveys
and concerns.

G4-28

a. Reporting period (such as fiscal or calendar year) for information provided.

・Scope Of Reporting > Reporting
PeriodG4-29

a. Date of most recent previous report (if any).

・Scope Of Reporting > Reporting
PeriodG4-30

a. Reporting cycle (such as annual, biennial).

・Scope Of Reporting > Reporting
Period

G4-31

a. Provide the contact point for questions regarding the report or its contents.

・Contact Us

a. Report the 'in accordance' option the organization has chosen.
b. Report the GRI Content Index for the chosen option (see tables below).

Customers & Supply Chain

G4-32

c. Report the reference to the External Assurance Report, if the report has been externallyassured. GRI recommends the use of external assurance but it is not a requirement to be・Global Reporting Initiative (GRI)
Index

G4-41

G4-33

c. Report the relationship between the organization and the assurance providers.
d. Report whether the highest governance body or senior executives are involved in

CR Library
Global Reporting Initiative(GRI) Index

b. If not included in the assurance report accompanying the sustainability report, report
the scope and basis of any external assurance provided.

G4-35

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LIXIL Group Corporate Responsibility Report 2017

a. Report the process for delegating authority for economic, environmental and social
topics from the highest governance body to senior executives and other employees.

・

有価証券報告書／役員の状況 (P.52-61) (Available in Japanese)(PDF:2.2MB)・Governance Framework

G4-43

a. Report the measures taken to develop and enhance the highest governance body's
collective knowledge of economic, environmental and social topics.

－

a. Report the processes for evaluation of the highest governance body's performance with・Scope Of Reporting > Independent
Practitioner's Assurance Reportself-assessment.
b. Report actions taken in response to evaluation of the highest governance body's
performance with respect to governance of economic, environmental and social topics,－

including, as a minimum, changes in membership and organizational practice.
a. Report the highest governance body's role in the identification and management of
G4-45

economic, environmental and social impacts.

・Governance Frameworka. Report the highest governance body's and senior executives' roles in the development,
approval, and updating of the organization's purpose, value or mission statements,
strategies, policies, and goals related to economic, environmental and social impacts.

G4-44

GOVERNANCE
G4-34

・LIXIL Group Board & Executive
Officers

G4-42seeking assurance for the organization's sustainability report.

a. Report the governance structure of the organization, including committees of thehighest governance body. Identify any committees responsible for decision-making on

・Cross-board membership
・Cross-shareholding with suppliers and other stakeholders
・Existence of controlling shareholder
・Related party disclosures

・Commitment to Corporate
Governancerespect to governance of economic, environmental and social topics. Report whether such
evaluation is independent or not, and its frequency. Report whether such evaluation is aa. Report the organization's policy and current practice with regard to seeking external
assurance for the report.

Reporting・Whether and how independence is considered・Whether and how expertise and experience relating to economic, environmental andsocial topics are considered・Whether and how stakeholders (including shareholders) are involved

a. Report processes for the highest governance body to ensure conflicts of interest are
avoided and managed. Report whether conflicts of interest are disclosed to stakeholders,
including, as a minimum:'in accordance' with the Guidelines.

Scope Of Reporting

if so, his or her function within the organization's management and the reasons for thisarrangement).

G4-24

REPORT PROFILE

Our People

・Number of each individual's other significant positions and commitments, and the nature
・Governance Frameworkof the commitments
・Gender

STAKEHOLDER ENGAGEMENT

Our Approach
Three Strategic Pillars

a. Report significant changes from previous reporting periods in the Scope and Aspect

・Independence
・Tenure on the governance body

G4-46
・Governance Structure

G4-36

・Governance Structure
・Governance Framework
・CDP Climate Change Information
RequestG4-37

a. Report processes for consultation between stakeholders and the highest governancebody on economic, environmental and social topics. If consultation is delegated, describe
to whom and any feedback processes to the highest governance body.

－・Governance Framework

body's identification and management of economic, environmental and social impacts,
risks, and opportunities.

・Governance Structure
・Governance Frameworka. Report whether the organization has appointed an executive-level position or positions
with responsibility for economic, environmental and social topics, and whether post
holders report directly to the highest governance body.

economic, environmental and social impacts, risks, and opportunities. Include the highest
governance body's role in the implementation of due diligence processes.
b. Report whether stakeholder consultation is used to support the highest governance

G4-47

a. Report the highest governance body's role in reviewing the effectiveness of theorganization's risk management processes for economic, environmental and social topics.

・Governance Framework
・Risk Management

a. Report the frequency of the highest governance body's review of economic,

・Annural Report 2017 / Review ofCorporate Governance (P.43)

environmental and social impacts, risks, and opportunities.

G4-48

a. Report the highest committee or position that formally reviews and approves theorganization's sustainability report and ensures that all material Aspects are covered.

－

G4-49

a. Report the process for communicating critical concerns to the highest governance body.

・Annural Report 2017 / Risk
Management (P.48-50)

G4-50

a. Report the nature and total number of critical concerns that were communicated to thehighest governance body and the mechanism(s) used to address and resolve them.

－CATEGORY: ECONOMIC

a. Report the remuneration policies for the highest governance body and senior executives
for the below types of remuneration:

・Fixed pay and variable pay:
–Performance-based pay

Item–Equity-based pay

LIXIL Group

G4-51

Corporate・Sign-on bonuses or recruitment incentive payments
・Termination payments

・Clawbacks
・Retirement benefits, including the difference between benefit schemes and contribution
rates for the highest governance body, senior executives, and all other employees

Responsibility

・Corporate Officer Compensation
・
有価証券報告書／役員報酬
等 (P.68-69) (Available in Japanese)(PDF:2.2MB)

a. Report the process for determining remuneration. Report whether remuneration
G4-52

Our Approach

consultants are involved in determining remuneration and whether they are independentof management. Report any other relationships which the remuneration consultants havewith the organization.

・Corporate Officer Compensation

Three Strategic Pillars

remuneration, including the results of votes on remuneration policies and proposals, if
applicable.

－

Our People

paid individual in each country of significant operations to the median annual totalcompensation for all employees (excluding the highest-paid individual) in the same
country.

・About Us > LIXIL at a Glance
・LIXIL グループの概略 (Available inJapanese)

G4-EC2Financial implications and other risks and opportunities for the organization's activities
due to climate change

・CDP Climate Change Information
Request

G4-EC3Coverage of the organization's defined benefit plan obligations

G4-EC4

Financial assistance received from government

有価証券報告書／確定給付制度(P.121-125) (Available in Japanese)(PDF:2.2MB)

Not applicable

Aspect: Market Presence
Ratios of standard entry level wage by gender compared to local minimum wage atsignificant locations of operation
Proportion of senior management hired from the local community at significant locationsof operation－－

Aspect: Indirect Economic Impacts－

a. Report the ratio of percentage increase in annual total compensation for the
G4-55

Direct economic value generated and distributed

G4-EC6

a. Report the ratio of the annual total compensation for the organization's highestG4-54

G4-EC1

G4-EC5a. Report how stakeholders' views are sought and taken into account regarding
G4-53

Related Page・

b. Report how performance criteria in the remuneration policy relate to the highest
governance body's and senior executives' economic, environmental and social objectives.

Report 2017

Environment–Bonuses–Deferred or vested shares

Indicator

Aspect: Economic Performanceorganization's highest-paid individual in each country of significant operations to the－median percentage increase in annual total compensation for all employees (excluding theG4-EC7Development and impact of infrastructure investments and services supported

・Global Sanitation & Hygiene

G4-EC8Significant indirect economic impacts, including the extent of impacts

・Global Sanitation & Hygiene
・About Us > LIXIL at a Glance

Aspect: Procurement Practices
G4-EC9highest-paid individual) in the same country.

Proportion of spending on local suppliers at significant locations of operation－

ETHICS AND INTEGRITY

Society
Customers & Supply Chain

G4-56

G4-57

Reporting
G4-58

a. Describe the organization's values, principles, standards and norms of behavior such ascodes of conduct and codes of ethics.
a. Report the internal and external mechanisms for seeking advice on ethical and lawful
behavior, and matters related to organizational integrity, such as helplines or advice lines.

a. Report the internal and external mechanisms for reporting concerns about unethicalor unlawful behavior, and matters related to organizational integrity, such as escalation
through line management, whistleblowing mechanisms or hotlines.

Scope Of Reporting

・Our Values
・Compliance
Code of Conduct (PDF:3MB)・・Compliance > Internal Concernraising System
・Compliance > Concern-raising
System・Compliance > Receiving Compliance
Information from Business Partners
・Human Rights > LIXIL's framework
for respecting human rights

CR Library
Global Reporting Initiative(GRI) Index

SPECIFIC STANDARD DISCLOSURES
Item

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G4-DMA69
LIXIL Group Corporate Responsibility Report 2017

Indicator

Related PageDISCLOSURES ON MANAGEMENT APPROACH
a. Report why the Aspect is material. Report the impacts that make this Aspect material.
b. Report how the organization manages the material Aspect or its impacts.
c. Report the evaluation of the management approach, including:・The mechanisms for evaluating the effectiveness of the management approach
・The results of the evaluation of the management approach・Any related adjustments to the management approach

CATEGORY: ENVIRONMENTAL
Item

Indicator

Related Page

Aspect: Materials
G4-EN1

Materials used by weight or volume

・Performance > Material Balance(INPUT)

G4-EN2

Percentage of materials used that are recycled input materials－

Aspect: Energy
・Environmental Management

DMA
G4-EN3

Energy consumption within the organization

・Performance > Material Balance(INPUT)

G4-EN4

Energy consumption outside of the organization

・CDP Climate Change Information
Request

G4-EN5

Energy intensity

・CDP Climate Change Information
Request

G4-EN6

Reduction of energy consumption

・Performance > Material Balance(INPUT)

G4-EN7

Reductions in energy requirements of products and services－

Aspect: Water
・Material Issues Selection Process・Key Performance Indicators

DMA

・Sustainable Water Use・Environmental Management

LIXIL Group

Corporate
Responsibility
Report 2017

・Sustainable Water Use > Water
Usages

G4-EN8

Total water withdrawal by source

G4-EN9Water sources significantly affected by withdrawal of water－

G4-EN10Percentage and total volume of water recycled and reused－・Performance > Material Balance(INPUT)

Aspect: Biodiversity
G4-EN11

Operational sites owned, leased, managed in, or adjacent to, protected areas and areas ofhigh biodiversity value outside protected areas－

Three Strategic Pillars

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LIXIL Group Corporate Responsibility Report 2017

Percentage of products sold and their packaging materials that are reclaimed by category－

Aspect: Compliance
G4-EN29

G4-EN14

Total number of IUCN Red List species and national conservation list species with habitats
in areas affected by operations, by level of extinction risk－

Aspect: Transport

G4-EN15

G4-EN30
・Greenhouse Gas Reduction
・Environmental Management

DMA

Direct greenhouse gas (GHG) emissions (Scope 1)

G4-EN16

Energy indirect greenhouse gas (GHG) emissions (Scope 2)

G4-EN17

Other indirect greenhouse gas (GHG) emissions (Scope 3)

G4-EN18・Performance > Material Balance(OUTPUT)・CDP Climate Change Information
・Performance > Material Balance(OUTPUT)・CDP Climate Change Information
Request・Performance > Material Balance(OUTPUT)・CDP Climate Change Information
RequestGreenhouse gas (GHG) emissions intensity

Emissions
・CDP Climate Change Information
Request・Performance > Material Balance(OUTPUT)

G4-EN19

Reduction of greenhouse gas (GHG) emissions

G4-EN20

Emissions of ozone-depleting substances (ODS)－

NOx, SOx, and other significant air emission

・Performance > Material Balance(OUTPUT)

G4-EN21

・CDP Climate Change Information
RequestAspect: Effluents and Waste
G4-EN22

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G4-EN28－

ReportingGlobal Reporting Initiative(GRI) Index

・Environmental Management >Converted Economic Value

Habitats protected or restored

・Performance > CO2 Conversion
Coefficients Used to Convert CO2

CR Library

Extent of impact mitigation of environmental impacts of products and services

G4-EN13Society

Scope Of Reporting

G4-EN27－

Environment

Customers & Supply Chain

・Greenhouse Gas Reduction >Improving Energy Efficiency of
Products and Services

DMA

Description of significant impacts of activities, products, and services on biodiversity inprotected areas and areas of high biodiversity value outside protected areas

RequestOur People

・環境配慮設計・エコ商品 (Available
in Japanese)

G4-EN12

Aspect: Emissions

Our Approach

Aspect: Products and Services

Total water discharge by quality and destination－

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations

・Environmental Management >Preventing Pollution Through Strict
Control of Chemical SubstancesSignificant environmental impacts of transporting products and other goods and materials ・Performance > Material Balance
for the organization's operations, and transporting members of the workforce(OUTPUT)

Aspect: Overall
G4-EN31

Total environmental protection expenditures and investments by type－

Aspect: Supplier Environmental Assessment
・Responsible Supply Chain
Management

DMA

G4-EN32

Percentage of new suppliers that were screened using environmental criteria

G4-EN33

Significant actual and potential negative environmental impacts in the supply chain andactions taken・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
Action・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
ActionAspect: Environmental Grievance Mechanisms
G4-EN34

Number of grievances about environmental impacts filed, addressed, and resolved throughformal grievance mechanisms－

CATEGORY: SOCIAL
SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK
Item

Indicator

Related Page

Aspect: Employment
・A Fair & Rewarding Workplace

DMA

G4-EN23

Total weight of waste by type and disposal method

・Performance > Material Balance(OUTPUT)

G4-LA1

G4-EN24

Total number and volume of significant spills

Not applicable

G4-LA2

G4-EN25

Weight of transported, imported, exported, or treated waste deemed hazardous under
the terms of the Basel Convention2 Annex I, II, III, and VIII, and percentage of transported
waste shipped internationally

Not applicable

G4-EN26

Identity, size, protected status, and biodiversity value of water bodies and related habitats
significantly affected by the organization's discharges of water and runoff－

G4-LA3

Total number and rates of new employee hires and employee turnover by age group,
gender and region
Benefits provided to full-time employees that are not provided to temporary or part-time
employees, by significant locations of operation
Return to work and retention rates after parental leave, by gender

Performance & Number of New Hires,
Turnover Rate－
・A Fair & Rewarding Workplace >Supporting a Healthy Work-Life
BalanceSUB-CATEGORY: HUMAN RIGHTS

Aspect: Labor/Management Relations
G4-LA4

Minimum notice periods regarding operational changes, including whether these are
specified in collective agreements－

LIXIL GroupDMAWork Safety & Well-being

G4-LA5

Responsibility

G4-LA6
G4-LA7G4-LA8and safety committees that help monitor and advise on occupational health and safety
programs
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and・A Fair & Rewarding Workplace

Our People

Reporting
Scope Of Reporting
CR Library

G4-HR3

Health and safety topics covered in formal agreements with trade unions

Aspect: Freedom of Association and Collective Bargaining

Programs for skills management and lifelong learning that support the continued
employability of employees and assist them in managing career endings

・Talent Development > Our Approachto Talent Development

Aspect: Forced or Compulsory Labor

Percentage of employees receiving regular performance and career development reviews,

・Talent Development > Evaluation
Framework

G4-HR6

G4-LA12according to gender, age group, minority group membership, and other indicators ofdiversity

G4-LA13

Ratio of basic salary and remuneration of women to men by employee category, by
significant locations of operation

・Diversity & Equal Opportunity
・Governance Framework

・Performance > Number of
Employees by Type of Employment,
Number of Employees by Country－

G4-LA14・Responsible Supply Chain
Management

Percentage of new suppliers that were screened using labor practices criteria

・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
Action・Compliance > Concern-raising
SystemDMA

LIXIL Group Corporate Responsibility Report 2017

G4-HR5

Operations and suppliers identified as having significant risk for incidents of child labor,
and measures taken to contribute to the effective abolition of child labor

Operations and suppliers identified as having significant risk for incidents of forced orcompulsory labor, and measures to contribute to the elimination of all forms of forced orcompulsory labor

G4-HR7

Percentage of security personnel trained in the organization's human rights policies orprocedures that are relevant to operations

G4-LA16

Number of grievances about labor practices filed, addressed, and resolved through formal
grievance mechanisms－

・Stakeholder Engagement > Our
Approach－

Aspect: Indigenous Rights
G4-HR8

Total number of incidents of violations involving rights of indigenous peoples and actions
taken

－

Aspect: Assessment
G4-HR9Total number and percentage of operations that have been subject to human rights
reviews or impact assessments－

・Responsible Supply Chain
Management

DMA

G4-HR10Percentage of new suppliers that were screened using human rights criteria－

・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
ActionActionSignificant actual and potential negative impacts for labor practices in the supply chain
and actions taken－

Aspect: Supplier Human Rights Assessment

Aspect: Supplier Assessment for Labor Practices
DMA－

Aspect: Security Practices
・Diversity & Equal Opportunity

DMA

・Human Rights

Aspect: Child Labor

G4-LA10

Aspect: Labor Practices Grievance Mechanisms

71

and collective bargaining may be violated or at significant risk, and measures taken to
support these rights

・Talent Development > Annual
training hours and costs per
employee

G4-LA15

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Total number of incidents of discrimination and corrective actions taken

Average hours of training per year per employee by gender, and by employee category

by gender and by employee category－

Operations and suppliers identified in which the right to exercise freedom of association
G4-HR4・Talent Development

Global Reporting Initiative(GRI) Index

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aspects of human rights that are relevant to operations, including the percentage of
employees trained

・A Fair & Rewarding Workplace >Labor-Management RelationshipAspect: Equal Remuneration for Women and Men

Customers & Supply Chain

G4-HR2G4-LA9G4-LA11

Related Page

Total hours of employee training on human rights policies or procedures concerning

・Work Safety & Well-being

Composition of governance bodies and breakdown of employees per employee category

Societyinclude human rights clauses or that underwent human rights screening

Workers with high incidence or high risk of diseases related to their occupation

Aspect: Diversity and Equal Opportunity

Environment

Total number and percentage of significant investment agreements and contracts that

Aspect: Non-discrimination

DMA

Three Strategic Pillars

Indicator

・Work Safety & Well-being

total number of work-related fatalities, by region and by gender

Aspect: Training and Education

Our Approach

G4-HR1

Percentage of total workforce represented in formal joint management–worker healthCorporate
Report 2017

Item
Aspect: Investment

Aspect: Occupational Health and Safety

G4-HR11Significant actual and potential negative human rights impacts in the supply chain andactions taken・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
ActionAspect: Human Rights Grievance Mechanisms
・Human Rights

DMA
G4-HR12

Number of grievances about human rights impacts filed, addressed, and resolved throughformal grievance mechanisms－

SUB-CATEGORY: SOCIETY
Item

SUB-CATEGORY: PRODUCT RESPONSIBILITY
Indicator

Related Page

Aspect: Local Communities
Percentage of operations with implemented local community engagement, impact

Item

Indicator

Percentage of significant product and service categories for which health and safety

LIXIL Group

G4-SO1

Corporate

G4-SO2

Operations with significant actual and potential negative impacts on local communities

G4-SO3

Total number and percentage of operations assessed for risks related to corruption andthe significant risks identified－

Aspect: Product and Service Labeling

G4-SO4

Communication and training on anti-corruption policies and procedures・Compliance > Compliance Training

DMA

Responsibility
Report 2017

G4-SO5

Our People
Environment
Society
Customers & Supply Chain
Reporting

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Global Reporting Initiative(GRI) Index

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LIXIL Group Corporate Responsibility Report 2017

Confirmed incidents of corruption and actions taken－

Total value of political contributions by country and recipient/beneficiary

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly
practices and their outcomes・Stakeholder Engagement > Our
Approach

Not applicable

Aspect: Compliance
G4-SO8

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations

Total number of incidents of non-compliance with regulations and voluntary codes

G4-PR3G4-SO9・Stakeholder Engagement > Our
Approach・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
ActionG4-SO10Significant actual and potential negative impacts on society in the supply chain andactions taken・Responsible Supply Chain
Management > Responsible
Procurement Surveys and Follow-up
ActionAspect: Grievance Mechanisms for Impacts on Society
Number of grievances about impacts on society filed, addressed, and resolved throughformal grievance mechanisms－
Type of product and service information required by the organization's procedures for
product and service information and labeling, and percentage of significant product and・環境配慮設計・エコ商品＞エコ訴求
マーク (Available in Japanese)

Total number of incidents of non-compliance with regulations and voluntary codes
concerning product and service information and labeling, by type of outcomes－

G4-PR5Results of surveys measuring customer satisfaction

・Customer Satisfaction > Business
Customers

Aspect: Communications Marketing
G4-PR6

Sale of banned or disputed products

Not applicable

G4-PR7

Total number of incidents of non-compliance with regulations and voluntary codes
concerning marketing communications, including advertising, promotion, and sponsorship,

Not applicableby type of outcomes・Responsible Supply Chain
Management

Percentage of new suppliers that were screened using criteria for impacts on society

concerning the health and safety impacts of products and services during their life cycle,
by type of outcomes－
・Product Safety & Quality >Responding to Serious Productrelated Accidents

G4-PR4

Aspect: Supplier Assessment for Impacts on Society
DMA

impacts are assessed for improvement

service categories subject to such information requirements

Aspect: Anti-competitive Behavior

G4-SO11

Scope Of Reporting

G4-PR1－

Aspect: Public Policy

G4-SO7

Three Strategic Pillars－

G4-PR2

G4-SO6

Our Approachassessments, and development programs

Related Page

Aspect: Customer Health and Safety－

Aspect: Privacy Customer
G4-PR8

Total number of substantiated complaints regarding breaches of customer privacy andlosses of customer data

Not applicable

Aspect: Compliance
G4-PR9

Monetary value of significant fines for non-compliance with laws and regulations
concerning the provision and use of products and services

Not applicable

LIXIL Group Corporation
36F, Kasumigaseki Building, 3-2-5, Kasumigaseki,
Chiyoda-ku, Tokyo 100-6036, Japanwww.lixil.com