CSR Digest

Komatsu Ltd.

CSR Department
2-3-6, Akasaka, Minato-ku, Tokyo
107-8414, Japan
http://www.komatsu.com/
Tel : +81-3-5561-2799
Fax: +81-3-3505-9662

2015

Message from Top Management

Contents
Message from Top Management ………………… 01
Our Approach to CSR ………………………………… 03

Pursuing CSR activities through core businesses as our basic principle, we will………………… 03

CSR Themes and Key Business Activities

also engage in social contribution activities that make the best use of Komatsu’s

Incorporating CSR into Management ……………………… 04

strengths to fulfill our responsibilities to society.

Comparison with Global Principles ………………………… 04
Dialogue with Our Stakeholders …………………………… 05
Organization to Promote CSR ……………………………… 05
Opinion of an External Stakeholder

Tetsuji Ohashi
President……………………… 06

Major Achievements and Mid-range Issues ……………… 07
CSR Theme ①

Enhancing Quality of Life ………………………… 09

Activities for Reducing Electricity andEnvironmental Action throughout the Value Chain

Pursuing Social Contribution Activities Unique toKomatsu“Developing people,” which Komatsu has emphasized since its found-At the Awazu Plant in Ishikawa Prefecture, one of our main plants,

While our basic principle is to “Contribute to society through core busi--Introduction to SMARTCONSTRUCTION- ………………………… 09

ing, and “Growing with society” by fulfilling our corporate responsi-

the completion of a new assembly line in May 2014 was followed byness,” we also aspire to fulfill our social responsibilities by engaging in

Occupational Safety and Health …………………………… 11

bilities in such areas as governance and compliance. In our Mid-term

the commencement of operations of a highly efficient biomass steamsocial contribution activities that make the best use of our strengths.

Komatsu’s Relationship with the Environment …………… 12

Management Plans, underway since FY2011, we have also clarified

boiler system in April 2015. Using wood chips from forest thinning, theLed by our local subsidiaries, Komatsu engages in human resourceand begun to implement worldwide the specific Key Business Activities

system is capable of using exhaust heat for air conditioning and oth-development and local community support activities that meet local

we will pursue for each CSR Theme. Here are a few examples.

er purposes in addition to generating power. We expect to meet ourneeds in countries around the world. In undertaking these social con-

FY2015 goal of reducing the annual volume of purchased electricity bytribution activities, it is important to focus on those that address issues

CSR Theme ②approximately 90% compared to FY2010.

faced by the local community, to join hands with good partners, andDeveloping People …………………………………… 15In FY2011, we stated that Komatsu is committed to contributing tosociety through core businesses, and we designated our CSR Themes:“Enhancing quality of life” by providing products required by society,

Solving Issues through SMARTCONSTRUCTION-Providing Products Required by SocietyInnovation and CSR

Special Story

Reducing CO2 Emissions in Manufacturing Operations …… 13
Environmentally-friendly Products and Services …………… 14

These initiatives are already being applied to our plants in Japan, in

to participate consistently. We aim to engage in social contribution

We set out our growth strategies based on innovation in the Mid-

Oyama, Tochigi and Osaka. Moreover, about half of the improvements

activities that are unique to Komatsu by making use of the know-how

range Management Plan “Together We Innovate GEMBA Worldwide,”actually implemented at Komatsu have been selectively adopted by busi-

accumulated in our businesses and through the participation of ourEnhancing Work-Life Balance ……………………………… 17

which covers the period ending March 31, 2016. Our goal is to expand

ness partners that manufacture our components. Many of these com-

employees, and to enhance the value of these activities by sharing re-Strengthening Our Gemba Capability

business domains by providing new value through our “DANTOTSU”

panies have already reported reductions in their electricity use, and welated information across the Group.

(unique and unrivaled) solutions, in which we take part in managing

believe we can contribute to raising the competitiveness of our businessWe will continue to pursue basic activities for safety, the environ-and raising the efficiency of entire construction projects for customers

partners through this initiative, which facilitates the reform of their pro-ment, compliance and quality assurance by bolstering our corporate

in addition to providing our products and services.

duction processes while reducing their environmental footprint.

governance and by having all employees share in the KOMATSU Way

Corporate Governancein order to enhance our business performance, improve our business

Risk Managementfoundation, and fulfill our social mission in a balanced manner.

Compliance ………………………………………………… 21

The most recent example of this strategy is the “SMARTCONSTRUC-

Reducing CO2 emissions is another area that requires not only in-

TION” business launched in Japan in February 2015. This solution ser-house action but also a response based on an understanding of thevice is intended to realize the safe and high-productivity job sites of theentire value chain. The KOMTRAX remote vehicle management systemfuture by connecting all information on worksites through informa-

installed in our products is capable of monitoring how construction

We are also actively participating in initiatives such as the United Na-tion and communication technology. We are promoting SMARTCON-

equipment is being used at customer job sites, providing us with ations Global Compact and the WBCSD, to take responsibility for doing

STRUCTION to contribute to the solution of other anticipated on-site

tool for proposing fuel-efficient operations. This system also enables

our part in the world as a global corporation.

issues for customers, including the severe shortage of experienced

Komatsu to gain an accurate grasp of the volume of CO2 emitted at

July 2015

workers.

the operating sites where our products are used. Our calculations have

Tetsuji Ohashi, President

In pursuing innovations such as these, Komatsu also values its

shown that operations at customer job sites account for approximately

Diversity Initiatives

Special Story…………………………… 15…………………… 18

CSR Theme ③

Growing with Society ………………………………… 19…………………………………… 19………………………………………… 20………… 22

Support for CSR Initiatives of Business Partners

Social Contribution Activities …………………… 23
Community Based Social Contribution around the World- CSR Activities and their Background in India

Special Story……… 23

Disaster Relief for Flooding in Chile

Special Story……… 25………… 27

collaborations with partners and participates in joint projects involving

90% of the volume of CO2 emitted by our products throughout their

Developing People Needed by the Community

industry, academia and government, as well as industry-to-industry

entire life cycle, from production to disposal. We will continue to de-

Clearing Anti-Personnel Landmines and Reconstruction Support … 28

collaboration. By quickly adopting superior technologies from outside

velop products that minimize environmental impact and will strive tothe company and promoting them through our business, we seek toreduce CO2 emissions throughout our value chain.

Komatsu participates in the UN Global Compact (UNGC).
For more information on the relationship between UNGC's
Ten Principles and Komatsu's activities, please see page 4.

promptly respond with solutions and value that address the challenges

Corporate Profile …………………………………………… 29
External Evaluations ………………………………………… 29

faced by our customers and by society at large.

Editorial Policy ……………………………………………… 30
Komatsu participates in the World Business Council for
Sustainable Development.

01

CSR DIGEST 2015

CSR DIGEST 201502

Komatsu will fulfill its responsibility to society by following its basic policy ofcontributing to society through core business and by engaging in social contribution activities that take advantage of Komatsu's strengths.

Our Approach to CSR

CSR Themes and Key Business Activities
We pursue the following three CSR Themes in our efforts to contribute to society through core business, and Key Business Activities aredesignated for each theme to reflect our latest mid-term management

plan and social issues. As for our social contribution activities, we set
themes under which Komatsu can apply technologies and know-how
which we have accumulated in our core business.

Contributing to Society through Core Business

Enhancing Quality of Life

Developing People

Growing with Society

・Providing products and services that contribute to infrastructure development and improve quality of life
・Improving productivity, safety and efficiency, and enhancing energy conservation through innovation
・Improving environmental efficiency at operation sites andfacilities, such as plants
・Reducing our impact on the environment throughout the
product life cycle
・Enhancing safety for society, customers, employees andbusiness partners

・Enhancing our employees and suppliers through the KOMATSU Way
・Enhancing our employees anddistributors through brand management

・Engaging in dialogues with our stakeholders
・Strengthening our corporate governance andcompliance
・Promoting compliance with environmental,
labor, human rights and social norms within
the Group and among business partners

Providing Products Required by Society

Incorporating CSR into Management
Having clearly defined our CSR themes and key activities, we constantly confirm that Komatsu meets public expectations and requirements
throughout the conduct of our business and we deepen our understanding of material issues through dialogues involving stakeholders inside and outside the company. Thus, we seek to earn the trust society
has placed in us as we pursue sustainable growth.
In our social contribution activities, we pay due consideration toprevailing issues in the regions where we operate and think throughhow we can apply our strengths to undertake “activities with a humanface“ that are uniquely associated with Komatsu.

・Contributing to human resource
development in local communities
・Developing the next generation

Komatsu conducted a materiality analysis to determine its CSR
Priority Issues and Themes with the support of Business for Social
Responsibility (BSR), a U.S. nonprofit organization, as a third party.
During this process, we identified a set of CSR Priorities, consistingof social issues important both to Komatsu's business and to ourstakeholders, as issues Komatsu should address on a global scale.
FY2011

・Providing social contributions through the use of
our core technologies and resources(e.g., disaster relief and activities to remove
antipersonnel land mines)・Contributing to the local
communities where we do business

Through repeated internal discussions related to these priority issues, we identified the three CSR Themes.
As we developed these activities, we realized that in addition
to undertaking CSR activities through our core business, it was also
important to engage in social contribution activities in the local
communities in which we operate. Consequently, we revised our approach in FY2015 and repositioned separately CSR activities throughcore business and social contribution activities.

FY2012FY2013

FY2014

Management
Strategy

Is management
in line withsocietal demands?
➡ Always monitor

・Evaluate activities

Defined as “Conducting CSR
activities through core business”（President’s message in CSR Report）

Comparison with Global Principles
Items Komatsu has identified as being its own CSR priority issues arein line with the international standards such as ISO26000 core subjects/issues and the United Nations Global Compact. In order to takemore concrete action, we have incorporated these standards into our
ISO26000
core subjects/issuesand Key Business Activities

・Grasp activities in each region

Formulation of CSR Themes
and Key Business Activities
・Designate CSR Priorities

1. Enhancing Quality of Life
2. Developing People
3. Growing with Societythat can be addressed
through business・Identify social issues that

Komatsu should address

・Integrate with Komatsu’s Code of

Repositioned social
contribution activities

Worldwide Business Conduct
・Formulate CSR Procurement Guidelines

・Introduction of evaluation

tool for CSR activities

・Introduction of platform for

global information sharing

Items of Komatsu's Worldwide Code of Business Conduct Items of Komatsu Group CSR Procurement Guidelines

・Corporate Governance・Compliance・Compliance with social norms including business partners

・“Quality and Reliability” of organizational structure,business operations, employees and management
・Emphasis on corporate governance・Observe business rules

・Respecting human rights
・Compliance with social norms including business partners
・Development of local communities
・Disaster relief
・Improving local residents' quality of life・Respect each employee's fundamental human rights
・Achieve a balance between work and personal life・Respect human rights

LabourPractices

LabourPrinciple 3
Principle 4
Principle 5
Principle 6・Equal employment
・Safety and health・Human resource development
・Compliance with social norms including business partners

・Dialogue with employees or their representatives
・Shall not tolerate child labor or forced labor
・Promote equal opportunities for employment and eliminate discrimination/harassment in the workplace
・Realize a safe and comfortable work environment

・Never get involved in any child or forced labor
・Create a work environment where there is nodiscrimination or harassment
・Build up an occupational health and safety
operational structure
・Establish a fair and just personnel system

The
Environment

Environment
Principle 7
Principle 8
Principle 9・Environment-friendly products
・Environmental efficiency (facilities, suchas plants, and operation sites)
・Remanufacturing

・Provide products, services and systems that are environment-friendly, safe and innovative・Environment protection- Komatsu Earth Environmental Charter- Declaration of Biodiversity by Komatsu

・Reduce environmental impact, manage chemical substances and build up environmental
management systems

Fair Operating
Practices

AntiCorruption
Principle 10・Corporate governance・Compliance・Compliance with social norms including business partners

・Fair competition
・Discontinuation of any innappropriate business transactions or practices
・Appropriate sociality
・Fair and proper relationship with governmental agencies

・Engage in free and fair competition and business transactions
・Never accept inappropriate cash, gifts or favors

ConsumerIssues・Products that enhance safety
・Responsible marketing and customer care・Environment-friendly products・Remanufacturing

・To always think about the needs of customers and to
strive to provide products, services and systems that aresafe, environment-friendly and innovative・Environment protection

・Never accept inappropriate cash, gifts or favors

Community
Involvement
andDevelopment

・Development of local communities
・Disaster relief
・Improving local residents' quality of life
・Human resources development

・To realize and fulfill CSR as a corporate citizen
・Groupwide social contribution (5 Principles for social
contribution)

2. Social contribution activities（Codify and publish in CSR Report）

Incorporation into Komatsu's Internal Guidelines

Human
RightsPrinciple 1
Principle 2

1. CSR activities throughcore business
1. Enhancing Quality of Life
2. Developing People
3. Growing with Society

Komatsu's CSR Priorities

internal guidelines, “Komatsu's Worldwide Code of Business Conduct”
and the “CSR Procurement Guidelines,” which we request that ourbusiness partners follow as well.

Human Rights

in each region

・Global deployment of CSR Themes

UNGC 10
Principles

Organizational
Governance

FY2015Progress inApproach

CSR DIGEST 2015

Enhancing thetrust placed in us
by society➡ Further growth

Implementation ofmanagement policy➡ Contributing tosociety

Demands of Society

Formulation Process and Review of Komatsu's CSR Priority
Issues and Themes

03

Business
DomainCorporate
Citizenship・Donating or offering free rental of equipment that is needed by society
・Conducting activities for energy saving, reducing environmental impact and enhancing safety

Reinforcementof Systems

Management
PolicyThe KOMATSU Way

Social Contribution Activities

FY2010

CSR and Management Cycle

CSR DIGEST 201504

Our Approach to CSR

Reinforcement of Our CSR Systems

Dialogue with Our Stakeholders
Creating a Variety of Dialogue Opportunities
Engaging in dialogues with our stakeholders is essential for determining
the relative effectiveness of Komatsu's management and business in
Stakeholders
Customers

Purposes
Collaborate to realize customers' goals and fulfill corporate responsibility

Evaluation Tools for CSR Activities
meeting social needs. Every department that has direct contact with
our stakeholders is creating opportunities to lay out our company's
current situation, receive feedback, and engage in useful discussions.
Examples of Meetings and Activities

Frequency

Brand Management Activities

Daily

Collaborate to resolve issues in society and in the regions we operate,participate in local activities
Business Partners

President explains business performance, policies and strategies

Various meetings for Midori-kai

3 times a year
As needed

Sales Distributors

President explains business performance, policies and strategies

Distributor meetings in each region(U.S., Europe, China and Southeast Asia)

Annually

Employees

President explains business performance, policies and strategies

Meetings with the president

Semiannually

Sharing Q&A session content with global employees via the intranet

As needed

Regular Meetings between Management and Labor Union

As needed

Explanation of initiatives related to operations, the environment and safety

Meetings with residents of the local community near the plant

As needed

Activities to resolve local issues based on employee suggestions

Voluntary activities by employees

Daily

Industry-Academia
Collaboration
Partners

Exchange of ideas and opinions between representatives such as university professors and the Chief Technology Officer

Komatsu Science and Technology Collaboration Council

Biannually

Investors

CEO and CFO explains business performance, policies and strategies

IR Meeting in Japan, U.S. and Europe

Japan: Daily
U.S. and Europe: Annually

Local Community

Respond to inquiries and SRI surveys
Individual Shareholders

Shareholders Meeting

2-3 times a year, held inmajor cities in Japan

Plant tours and explanation of operations

Plant tours for shareholders

About twice a year inJapan

Organization to Promote CSR

Organization
Board ofDirectors

President

Executive Officer
Supervising CSR

CSR Dept.

social contribution activities.
Our CSR activities are one and the same as our daily business activities, and we engage in them through dedicated divisions and committees organized at all Group companies. With respect to our major
overseas subsidiaries, we communicate with staff responsible for CSR
activities on a daily basis and share information in an effort to bolster
our organization and promote CSR activities in each region.
Committee

CSR Committee

Overall CSR
Social Contribution

Environmental Affairs Dept.

Earth Environment Committee

Environment

Compliance Dept.

Compliance Committee

Compliance

KOMATSU Way Global Inst.

Komatsu Way Committee

Developing Human Resources

Risk Management Committee

Risk Management

Information Security Committee

Information Security

CSR DIGEST 2015

Mr. Dunstan Allison-HopeManaging Director, Advisory Services,
Business for Social Responsibility (BSR)

Komatsu joined BSR in June 2010, and our initial partnership with thecompany involved establishing strategic priorities and creating an approach to Komatsu's most important sustainability issues. An updated
version of these priorities are shown in the materiality section of thisreport.
Since then, BSR has worked with Komatsu to make progress onthese priorities and address new stakeholder expectations that havearisen in recent years.
For example, during 2014 we worked with Komatsu to undertakea corporate-wide human rights impact assessment to identify potential
risks and opportunities in Komatsu's key business units and geographies.
BSR concluded that Komatsu's overall human rights risk profile is“medium-low risk.” This is due to the fact that Komatsu's main risks
are upstream in the supply chain and downstream through productmisuse by its customers.
Komatsu also has several opportunities to advance human rights
through its business, particularly through its mining business working

in local communities to provide skilled jobs and increased economic
benefits.
During 2012, BSR engaged internal Komatsu stakeholders andglobal mining companies to identify how Komatsu can most effectively meet the CSR expectations of key mining sector customers. The
review emphasized the importance of understanding local regional
expectations, and the role of Komatsu's product innovation to addressenvironmental impacts that directly influence the local social license tooperate, such as air emissions, dust, and noise.
It was for this reason that an engagement between BSR and
Komatsu to review the company's social contribution program resulted
in an emphasis on local contribution activities. BSR also facilitated astakeholder engagement for Komatsu at its Osaka plant.
During this time we have witnessed Komatsu make progress inother areas, too. For example:
・ Conducting regular CSR Steering Committee meetings, with senior
Komatsu executives setting CSR direction for Komatsu;
・ Developing an internal global network on CSR by identifying CSR
representatives from major subsidiaries, and sharing leading practices;・ Implementing a new CSR procurement guide, including conflict minerals; and,・ Establishing ambitious energy saving objectives at major manufacturing plants.
Komatsu has a clear grasp of its CSR priorities, risks, and opportunities.
However, as a global company operating and selling in many markets, the main challenge now is implementing CSR strategies at the
local level. This implies increasing the capacity of local staff to address
CSR issues. It also means ensuring CSR factors are effectively integrated
into company policies and procedures, especially in higher risk regions
and organizational functions.

Compliance with Laws

Legal Dept.
Export Control Dept.

Export Control Committee

Export Control

Corporate Communications Dept.

Information Disclosure Committee

Information Disclosure

Human Resources Dept.

Personnel Committee

Personnel System

Quality Assurance Div.

Corporate-level Product Safety Committee

Product Safety

Safety & Health Admin. Dept.

Group Health and Safety Committee

Health and Safety

Procurement Div.

Progress in Komatsu's CSR Activities and Focus on
Contribution to Local Communities

Internal Auditing

Internal Audit Dept.

05

Area of CSR Oversight

CSR Steering Committee

General Affairs Dept.

Opinion of an External Stakeholder

Daily

CEO and CFO explains business performance, policies and strategies

The CSR Department reports directly to the president, and the CSR
Committee chaired by the president provides opportunities for top
management to take part in regular discussions on the direction of
Komatsu's CSR strategy. Policies for each activity and related issues are
discussed by the CSR Steering Committee, which mainly consists ofexecutive officers in supervisory positions and is entrusted with governance functions particularly with respect to the implementation of

Until recently, we regularly conducted questionnaires to collect information on the CSR activities we have undertaken around the world.
In FY2015, we launched a bulletin board on our corporate intranet toprovide daily updates and facilitate information sharing globally.
We plan to increase the amount of practical information available
on the bulletin board toward developing it as a work-ready tool for
staff on the frontlines of our CSR activities.

Daily

Conduct safety patrols and provide opportunities such as for supportof efforts for obtaining certification

Dialogue with the labor union and employee representatives to improve the workplace environment

We evaluate new initiatives to determine whether they are beneficial
both to Komatsu's business and to our stakeholders. Particularly withrespect to social contribution activities (donations), we have been monitoring their effectiveness as CSR activities since FY2013 by using theCheck Sheet we created to assess quantitative effects from these two
perspectives and by having the CSR Steering Committee, consisting ofexecutive officers involved in CSR, evaluate the content.

Global Information Sharing

Procurement
CSR DIGEST 201506

Our Approach to CSR

Major Achievements and Mid-range Issues
Komatsu's CSR themes, concrete initiatives of key business activities, and mid-range issues and targets are as follows.

CSR Themes and Key Activities

Concrete Initiatives

Mid-range Issues and Targets for Themes▪Working for society through core business▪Growth strategies based on innovation (from the Mid-range Management Plan)- Promote the SMARTCONSTRUCTION business- Promote the development of DANTOTSU (unique and unrivaled) products, including open innovation

1. Contributing to Society through Core Business

Enhancing Quality of Life
–Providing products required by society–・Providing products and services that contribute to infrastructure development andimprove quality of life
・Improving productivity, safety and efficiency,
and enhancing energy conservation throughinnovation
・Improving environmental efficiency at operation sites and plants▪Innovation and CSR (P.9)- ICT solutions for construction work (SMARTCONSTRUCTION) ❶- Creating and providing value through open innovation▪Introducing environmentally-friendly products and services (P.14)- Construction equipment that is compliant with the latest emission standards ❷- Highly fuel-efficient forklifts- Laser cutting machines that significantly reduce electricity use❶▪Plants with unrivaled environmental performance and productivity (P.13)▪Responding to environmental risks❷▪Taking measures to maintain biodiversity at business units and facilities
・Reducing environmental impact throughout
the product life cycle▪Reducing environmental impact throughout the product life cycle- Promoting the “Reman” business- Raising the recyclability of construction equipment▪Reducing environmental impact in procurement and logistics- Support for business partners for acquiring certification (P.22)- Promoting an initiative to reduce electric power consumption by 50% at business partners (P.22)- Reducing CO2 emissions in logistics

・Enhancing safety for society, customers,
employees and business partners❸

Developing People▪Further encourage the adoption of the KOMATSU Way- Conduct education by rank and compile case studies rooted in each region with a particular focus on overseas Group
companies▪Promoting the KOMATSU Way- Educating employees through the KOMATSU Way- Developing local nationals for top management positions (P.15)- Enhancing human resources at our manufacturing sites and distributors (P.18)▪Supporting human resource development at our business partners (P.22)- Holding “Management Salons” for younger managers at business partners ❹- Activities for enhancing technical capabilities▪Environmental Action Plan (for detailed data, please refer to the Environmental Report)- Procurement and logistics (support for business partners for acquiring certification, shift to means of shipping with low
environmental impact, promotion of returnable packing containers, reduction in shipping distance and improvements
in shipping efficiency)- Sales and after-sales services (encourage distributors and rental companies to reduce their environmental impact)▪Create a healthy and safe workplace- Eliminate accidents accompanied by lost worktime/fatal occupational injuries across the entire Komatsu Group, including the overseas subsidiaries- Promote the Five-Year Health Development Plan to develop a corporate health culture (Japan)▪Occupational health and safety- Zero accidents with the participation of all employees (example of Chinese initiative) (P.11) ❸- Response to and report on accidents▪Promoting safety activities at business partners (P.22)- Support for acquiring Occupational Health and Safety Assessment certification- Promoting safety patrols

・Enhancing our employees and suppliers
through the KOMATSU Way▪Environmental Action Plan (for detailed data, please refer to the Environmental Report)- Environmental management (strengthen the environmental management system, education and training, audits foroverseas subsidiaries, reporting)- Research and development (ensure compliance with emission standards, improve the fuel efficiency of products, use
biodiesel fuel, improve the recyclability rate, promote reuse and recycling)- Manufacturing (energy conservation, effective utilization of resources, risk management, improvement of the greenery rate)▪Production reform through an initiative to reduce electric power consumption by 50%- Launch initiative at the Oyama, Tochigi and Osaka plants- Promote kaizen activities at business partners❹

Growing with Society

・Enhancing our employees and distributors
through brand management▪Promoting brand management initiatives▪Establish brand management initiatives

・Engaging in dialogue with our stakeholders▪Engaging in dialogue with our stakeholders- Dialogues with our stakeholders (P.5)- Communication with shareholders and local communities ❺- Communication with business partners (P.22)▪Engage in continuous communication with stakeholders

・Strengthening our corporate governance andcompliance▪Efforts on governance, compliance and risk management- BCP training and other efforts (P.19) ❻- Conducting CR (compliance risk) audits- Education on compliance and Komatsu's Worldwide Code of Business Conduct▪Continuous efforts on governance, compliance and risk management- Formulating and implementing anti-corruption guidelines- Enhancing the BCP/information security system throughout the Group- Improving the CR Audit Technique and increasing the operation level

・Promoting compliance with environmental,
labor, human rights and social norms within
the Group and among business partners▪Promoting CSR activities at business Partners (P.22)- Activities based on the CSR Procurement Guidelines- Support for business partners for acquiring environmental certification- Support for business partners for acquiring Occupational Health and Safety Assessment certification❺▪Continuous support for business partners❻

2. Social Contribution Activities
Pursuing activities unique to Komatsu in thefollowing 6 areas- Development of local human resources- Disaster Relief- Local Community Support- Academic Studies and Academia-Industry
Collaborations- Environment- Culture and Sports07

CSR DIGEST 2015

- Development of local human resources (support for a construction equipment operator training
school in Liberia) (P.27) ❼- Support for disaster reconstruction (response to flooding damage in Chile) (P.25)- Clearing anti-personnel landmines and reconstruction support (P.28)- Support for local communities (technical welding support for a technical school) (P.23)- Support for local communities (activities in Japan that support agriculture and forestry)- Activities by the Women's Judo Team- Maintaining efforts on the development of human resources and support for local communities that meets local needs- Supporting disaster reconstruction to meet the needs of the affected areas- Enhancing the value of Group activities through global information sharing- Expanding collaboration with the Flower Association of Japan❼CSR DIGEST 201508

CSR Theme ❶− Providing Products Required by Society −▪ Our Initiatives◦ Providing products and services that contribute to infrastructure development andimprove quality of life
◦ Improving productivity, safety and efficiency, and enhancing energy conservation
through innovation◦ Improving environmental efficiency at operation sites and facilities, such as plants◦ Reducing our impact on the environment throughout the product life cycle◦ Enhancing safety for society, customers, employees and business partners

Innovation and CSR

Solutions to Social Problems and Sustainable Growth
Today, the Japanese civil engineering/construction industry is facing a
critical problem of labor shortage at jobsites; the number of new graduates entering the industry is declining and veteran machine operators
are diminishing. This is happening against the backdrop of Japan’sAging of Construction Industry’s Labor force in Japan
(%)
34.0
29.0

Jobsite Labor Shortage of Construction Industry in Japan(Millions of people)

Ratio of labor force aged 55
and older in all industries

24.0

Needed: 3.14
million persons

3.6
3.4
3.2

19.0

Ratio of labor force aged 29
or younger in all industries

14.0
9.0

aging population combined with a declining birth rate.
While responding to this structural problem of Japanese society,
we are striving to offer excellence in jobsite safety, productivity, andreliability to our customers at lower costs.
We are committed to this jobsite of the future. To create such asmart jobsite of the future together with customers and ensure oursustainable growth with them and society, we have begun SMARTCONSTRUCTION first in Japan.

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 year

Construction industry:Those aged 29 or younger
account for about 10%

Sources: "Labor Force Survey" by Japan's Ministry of Internal Affairs andCommunications and "Current State and Recent Efforts of the Construction
Industry" by Japan's Ministry of Land, Infrastructure, Transport and Tourism

Since June, 2013, when we launched the D61PXi-23 intelligent Machine Control bulldozers, we have discussed
what kind of new value we can provide to customers
with our intelligent Machine Control models. They can
not only achieve high-precision construction but also
shorten the period of construction by streamlining works
before and after the construction phase. SMARTCONSTRUCTION packages these benefits with rental equipment.

2.6

Employed byConstruction
Industry:
2.13 million persons(Estimated Cohort analysis)

2.4
2.2
2.0
1.8

2005

2010

2015

09

CSR DIGEST 2015

2025

SMARTCONSTRUCTION
for the Future
SMARTCONSTRUCTION
support staff is readyto help customers

Man
High-precision survey ofsite conditions by UAV,etc.

Database of work finishedby intelligent Machine
Control models

Integration

Construction
equipment

JobsiteIntegration

Proposal of optimal
execution plans based on
decided areas of work

Research and analysis ofvariable factors, such as soil
quality and buried objects

3-demensional drawings based on the surveyed data by Skycatch-made drone

What we have learned from SMARTCONSTRUCTION jobsites

Integration
SMART
CONSTRUCTION

Construction by using
intelligent Machine
Control models

VOICE
Looking forward to the
future of intelligent Machine
Control equipment

2030 year

SMARTCONSTRUCTION uses Skycatch-madedrone to survey the sites.

“KomConnect”: Connecting everything on thejobsitesThrough ICT, SMARTCONSTRUCTION connects all jobsite
information concerning not only construction equipment
but also people, machines and the ground, that are involved in construction in all phases from pre-construction
to completion. Our “KomConnect” is a cloud-based software service, a platform connecting all the information.
By storing a massive amount of information concerning
construction activities, we engage in analyses, simulations
and proposals. This information can be accessed by allconcerned people via the Internet, anywhere, at anytime.

2020

After completion of construction work, customers will have maintenance work at many sites for a long period of time onward. As all dataof construction undertaken by intelligent Machine Control equipment
are stored in KomConnect, we are considering a service to make thatdata available, as needed, to concerned customers and other people.
When their completed jobsites are damaged by natural disaster, we
can survey the sites by using drones, compare the survey data with thecompletion data before the damage, and quickly confirm the areas
needed for reconstruction. We believe that we should be able to start
reconstruction soon after a disaster by remotely controlling unmanned
intelligent Machine Control equipment not too far into the future.
All around the world today, people are looking for new value by connecting machines through the Internet. This is the so-called Internet ofThings (IoT). With this tailwind of IoT, we are striving to evolve SMARTCONSTRUCTION to an extent that customers, and the world, will call it
Innovation.

Generation of 3D
completion drawings

We have already deployed some 350 units of intelligent Machine
Control equipment at about 800 construction sites in Japan. Our customers confirm that our intelligent Machine Control models eliminate
the need for staking and enable operators with limited experience toperform difficult tasks.
We have learned something new after introducing SMARTCONSTRUCTION. By analyzing data concerning machine positions and operations,
we have discovered a difference between veteran and new operatorsin the amount of time the two groups spent operating intelligent Machine Control models. The difference is attributable to veterans’ jobsite
know-how accumulated over the years, for example, where and inwhich direction to start work on jobsites. We would like to accumulate
such veterans’ expertise in KomConnect and provide it to all operators.

Mr. Satoshi Tsuchimoto

Kamitake Construction Co., Ltd.
Senior Managing Director and President of Civil
Engineering Division

I also operated a D61PXi intelligent Machine Control dozer, andthought it’s a good machine. I am responsible for supervising ourentire jobsite operations, including machine deployment, operator
assignment and troubleshooting. Because this dozer finishes almost all
work at one time, the best thing about it is no rework, which meansno additional costs. SMARTCONTRUCTION also enables me to know
how much earth is removed and the progress of work, for example,
every month. That will be a great help for me to control costs.
I think intelligent Machine Control dozers will continue to become
popular among more customers, because people with little experiencecan operate them, and they will finish the work, albeit taking moretime than veterans would.

Social Contribution Activities

Introduction to SMARTCONSTRUCTION

2.8*Stakes:Wooden sticks designed
to guide machine operators for
cutting and filling earth. Placed
at equal distances, each stakeconsists of smaller sticks in horizontal and angled positions for
guidance.

Shortage:
1.01 million persons-7.7% -16.4%-22.4%-28.5%

3.0

Heading for “Jobsites of the Future”

Growing with Society

Construction industry:Those aged 55 and older
account for about 30%― SMARTCONSTRUCTION ―Developing People

Special Story

D61PXi-23 intelligent Machine Control bulldozer launched in June, 2013

When our customers of construction and civil engineering receive acontract for construction and obtain completion drawings from theirclients, they survey the jobsites before construction, compare that survey data with the completion drawings to determine what needs to bedone and then develop construction plans.
Typically, surveying takes two surveyors who can survey a few hundred
points a day. As those points are located a few meters away from eachother, the surveyors repeat the same task as they move on the jobsite.
In some cases, construction companies compare 2-D survey drawings
with completion drawings and then estimate their work, which canoften result in big mistakes in actual work volume.
We believe we can propose a new way of surveying by using leading-edge ICT, for example, the use of survey-specific drones made by
Skycatch. Under ideal conditions, drones can automatically fly over thejobsites for about 15 minutes at each flight, surveying a few million
points a few centimeters away from each other. If needed, we can alsolaser scan the sites for high-precision 3-D surveys.
While surveying the sites, we receive the contract from customers toconvert their 2-D completion drawings into 3-D drawings. The differences between these 3-D drawings and 3-D survey data represent theareas where their work is needed.
“KomConnect” enables customers to have an accurate understandingof the areas, shape and volume of earth to work on, prior to construction work. Then, we transfer these data to intelligent Machine Control
machines, set up the machines at job sites, and enable customers toengage in high-precision earthmoving work without stakes*.

From veteran operators, we have also received a number of betterways of operating our intelligent Machine Control models. In addition
to accumulating and sharing veterans’ jobsite expertise, KomConnect
offers a platform to turn the subsequent Kaizen cycle on construction
jobsites.
We also need to listen to customers’ ideas and opinions at jobsites
where they are progressing with Kaizen, and respond to their needs.
At the SMARTCONSTRUCTION Support Center, established in February
2015, we have been increasing the number of members with experience of construction and civil engineering, and making its operationeven more responsive to customers’ needs by working closely withthem at jobsites.

Enhancing Quality of Life

Enhancing Quality of Life

High-precision survey and development of construction plans

D65PXi intelligent Machine Control dozer at a jobsite of Kamitake Construction.

CSR DIGEST 201510

CSR Theme ❶Enhancing Quality of Life

− Providing Products Required by Society −Occupational safety and health is a key area of focus for Komatsu's business operations, and our strong emphasis on workplace safety
is demonstrated across all Group companies and business partners.

Our Approach to Safety and Healthat the Workplace

The company has established this occupational safety and healthguideline: All Komatsu Group companies, together with all top managers and employees, shall promote occupational safety and healthactivities so that employees can work in a safe and comfortable work
environment in accordance with the policies described below.

VOICE

Example of Occupational
Safety Efforts in China

Ms. Wang Ruomei

Safety Manager
Komatsu (Changzhou) Construction
Machinery Corp. (KCCM)

Established in 1995, KCCM manufactures medium-sized hydraulic excavators, wheel loaders and industrial machinery. Following the transfer to our
new plant in June 2011, we opened a space for accident simulations at theskill training facility that offers about twenty types of simulations, and weare striving to enhance our safety awareness and risk prediction capability
by regularly conducting sensory training for all employees.
Under the slogan “Let's pay attention to the smallest signs and seek improvements to create a safe plant,” KCCM has sought to identify anderadicate risk factors through efforts that have included “Zero Accident”
circle activities, interdepartmental safety patrols, enhanced risk prediction
training, and the effective use of the safety diary. Despite these efforts, accidents occurred over three consecutive months beginning with April 2014,
prompting us to declare an emergency in June to pursue special safety
activities.
As part of these safety reinforcement activities, we consulted with every employee on safety, confirmed the priority management tasks,

DATA
Incidence Rate of Occupational Accidents(Frequency Rate of Lost Worktime)
All industries（Japan）
Komatsu Group（Japan）

Construction and mining equipment manufacturing industry（Japan）
Komatsu Group（Global）
Komatsu (Non-Consolidated)

Frequency Rate
3.0

2.91

Environmental Impact Indicators (FY2014)

2.97

2.5
2.0

1.62

1.61

1.5
1.0
0.5
0

1.65
1.60

0.74
0.45
0.15

FY 2009

1.00

1.27

0.76
0.19

0.88
0.26

2010

2011

1.59
1.31
0.86
0.59
0.05

2012

1.58
1.32
0.94

1.66

0.56

0.56

0.20

0.05

2013

CSR DIGEST 2015

Water Resources

CO2

Waste

8.0million GJ

3.7million m

401 thousand ton-CO2

Generated amount83 thousand ton

3

Recycling
77 thousand ton

1.21
1.02

2014

1. The data for all industries (Japan) and construction and mining equipment manufacturing industry (Japan) are provided by the Ministry of Health, Labour and Welfare.
2. Figures for the Komatsu Group (global) up to FY2012 are the total for Japan and
22 major overseas production plants. Three and six overseas sales companies wereadded to the scope for FY2013 and FY2014, respectively.
3. The scope of the Komatsu Group (Japan) includes Komatsu production plants aswell as Japan domestic dealers, of which for FY2009 and FY2010 includes only construction machinery dealers, and it was then extended to include forklifts in FY2011.

re-emphasized the preventive measures for past accidents, and strengthened facility inspections. We sought to raise the level of safety for theentire plant by clarifying potential risk factors and improving our risk
countermeasures. During our safety consultations, we spoke with a cumulative total of 668 employees (100% of target employees), clarified
828 potential risks and implemented solutions (completed 100% of the
improvements). In addition, we decided to conduct safety consultations ona regular basis.
We also implemented special safety education for all onsite staff during
the period of activities. We provided repeated training sessions for a cumulative total of 360 staff members until they achieved perfect scores in theconfirmation tests (implemented for 100% of targeted staff). In addition,
we reinforced our risk prediction activities and re-emphasized pointing andcalling. We were able to raise the safety awareness of all employees by
posting our slogan for the special safety reinforcement activities and internally broadcasting safety precautions. As a result, we have maintained zeroaccidents since July 2014.
There are no shortcuts to making safety our top priority and ensuring safety. Ever mindful of the Safety First
philosophy, we will continue toraise and strengthen safety awareness among all employees. We arecommitted to steadfastly pursuing
the creation of a truly safe work- “Zero Accident”
Safety patrol
place.
circle activity（For FY 2013 :8.4million GJ）（For FY 2013 :438 thousand ton-CO2）（For FY 2013 :4.7million m3）（For FY 2013 :Generated amount
101 thousand ton
Recycling 92 thousand ton）

[Coverage of Data] Komatsu Group’s 32 manufacturing facilities worldwide.
For the details of calculating methods, please refer to “Environmental Report” on our Website.
http://www.komatsu.com/CompanyInfo/csr/environment/2015/

New Mid- and Long-Term Objectives
In 2010, Komatsu set mid- and long-term objectives (2015, 2020) forthe production department in regards to CO2 reduction and started
reduction activities. While mid- and long-term objectives for CO2 reduction is being set for the world at the COP21 in 2015, Komatsu hasreevaluated its mid- and long-term objectives thus far (up to 2020) andset new mid- and long-term objectives up to 2030 in order to contribute to the environmental change measures.
Among these objectives, the stringent objectives have been set
increasingly in regard to CO2 reduction particularly in domestic production, taking into consideration the electricity situation after the Great
Eastern Japan Earthquake of 2011. Also, in addition to the targets set
Area

ObjectCO2
Production

Waste
Water

Logistics
Products

11

EnergyCO2
CO2

for CO2 reduction, targets will also be determined in terms of production, for our domestic and overseas factories regarding the amounts ofwaste generated and water input, in order to promote the efficient useof resources.
In addition, mid- and long-term objectives up to 2030 were set for
logistics CO2 for the first time.
Further, in looking at CO2 generated in the life cycle of construction
equipment products, we found that CO2 emissions during construction
equipment use makes up approximately 90% of total emissions. Therefore, fuel efficiency goals for construction equipment products werealso set this time, up to 2030, in order to promote CO2 reduction overthe entire life cycle.
New Objectives (Reduction Rate)

Application

Index

Base YearJapan

Improvement rate per unit of production

2000

57%

65%

Overseas

Improvement rate per unit of production

2010

32%

40%

2020

2030

Japan

Improvement rate per unit of production

2010

10%

20%

Overseas

Improvement rate per unit of production

2010

10%

20%

Japan

Improvement rate per unit of production

2010

40%

50%

Overseas

Improvement rate per unit of production

2010

10%

20%

Japan

Improvement rate per unit of logistics

2006

32%

39%

Overseas

Improvement rate per unit of logistics

2011

13%

22%

40%

45%

20%

25%

Hybrid Hydraulic Excavator
Normal Hydraulic Excavator (non-hybrid)

Fuel Consumption Reduction Rate

2007

Social Contribution Activities

In addition to our existing health management programs, the KomatsuGroup is striving to create its corporate Health Culture after the launchof the Five-Year Health Development Plan in FY2014. The goal of the
Health Culture is: to look after one's own health and the health of

http://www.komatsu.com/CompanyInfo/csr/2015/products/products03.html

In recognition of the fact that our business activities affect the environment on a regional and global level, we, at Komatsu, have placed thefocus on the following four key areas:
1) Climate Change
2) Establishment of a Sound Material-Cycle Society3) Conservation of Air, Water and Other Natural Resources as well as
Management of Chemical Substances

4) Biodiversity
In line with the Komatsu Earth Environment Charter revised in 2010,
the Komatsu Group embarks on global initiatives across business areas
guided by the fundamental principles of(1) Contributions to Realization of Sustainable Society,(2) Simultaneous Realization of Environmental and Economic Performance, and(3) Observance of Corporate Social Responsibility.

Growing with Society

Message from the President Concerning Occupational Safety and
Health(1) The Komatsu Group shall, first of all, strive to ensure a safe andcomfortable work environment and maintain and promote employee health.
(2) The Komatsu Group shall promote proactive occupational safety
and health activities in order for all employees to achieve the above
conditions by working together as one team.
(3) Each and every person in a senior management position of theKomatsu Group shall acknowledge the above two matters as toppriority tasks and shall take the initiative in demonstrating the execution of daily duties accordingly.

▼ For more information please refer to the following website:

Key Areas and Principles

Developing People

Komatsu formulates safety and health policies based on the message
from the president and disseminates them throughout the Group. We
address occupational safety and work on mental and physical healthcare to create a safe and comfortable work environment.

one's colleagues and to consider and take action on what is necessary for leading a better life. The president announced the “Komatsu
Health Declaration” in June 2014 to effectively promote this goal.

Komatsu promotes environmentally-friendly activities throughout the entire Group to realize its vision of “What Komatsu Can Do andWhat It Must Do” for the environment and sustainable development.

Enhancing Quality of Life

Komatsu’s Relationship with the Environment

Occupational Safety and Health

CSR DIGEST 2015

12

CSR Theme ❶Enhancing Quality of Life

− Providing Products Required by Society −As part of our efforts to mitigate climate change, Komatsu has adopted an indicator of CO2 emissions per unit of manufacturing value
with respect to the amount of electricity, fuel gas, fuel oil, and other types of energy used in manufacturing operations, the company established more aggressive mid to long term objectives in FY2013.

CO2 Emissions

CO2 emissions(Japan)
(%)
110

265

239

266

70.4

90
211

188
72.7

73.0

71.7

201

191

68.7

69.3
63.1

60

90.3

231

287

262

90

257

237

77.6
80.4

200

100

315

280

100

300

80
70

100

82.1

174

210

2000

2008

2009

2010

2011

2012

2013

46
40
2014 target of
FY2015 (FY)

70
68.2

66.7

100

Manufacturing value:Total production cost excluding direct material cost,
other facilities’ components, and procured components

Total amount of CO2 emlsslons of all Komatsu Group manufacturing facilitles in Japan
CO2 emission index per unit of manufacturing value
at Komatsu Group manufacturing facilitles in Japan (compared to FY2000)

67.0

As part of its continuing effort to reduce environmental burdens by
cutting CO2 emissions, Komatsu has decided to accelerate its pace ofpower usage reduction by boosting productivity drastically in anticipation of lingering nationwide power shortages in 2012 and after since
their outbreaks in the service areas of Tokyo Electric Power Company,
Inc. and Tohoku Electric Power Company, Inc. in the wake of the Great
East Japan Earthquake in 2011.
Since an ultimate reduction of 50% or more has come into sightafter in-depth analyses of electricity usage status, Komatsu is now
geared at pursuing a new goal of cutting the peak power 50% fromits summer 2010 level while checking its electricity usage to reduce environmental burdens.
The peak power reduction effort has progressed successfully, suggesting that Komatsu’s own target reduction of 50% will be attainedin FY2015.

13

CSR DIGEST 2015

60
59

2005

2007

2008

2009

2010

2011

2012

2013

2014

40
2015
(FY)

Basic unit:CO2 emission index per unit of manufacturing value at each manufacturing facilitles,
welghted by ratio of manufacturing value of each site. (compared to FY2005)
CO2 emissions (Komatsu Group manufacturing overseas facilitles)
CO2 emission Basic unit (compared to FY2005)

Electricity usage change forecasts
Peak power (MW)
120
100
100

Electric energy (thousand MWh)
700
600

87
78

80

100

70

98

100
81

60

78
70

72
62

40
20
0

100

2010

92

2011

Komatsu Industries Corporation has developed the
AC Servo Press “H1F200-2” with improved productivity and energy conservation. This machine stores
regenerated electricity in a condenser, and supplies
electricity when necessary from the condenser. As
a result, the consumption of electricity is decreased
by approximately 50% compared to previous mechanical presses. In addition, based on this system,
the electricity supply peak can be controlled, making it possible to operate it at the same electrical
capacity as past mechanical presses, thereby contributing to energy conservation and decrease incontracted electricity for the user.
We will continue to expand the range of productsin the environment friendly H1F series.

500
64

59

58

57

55

50

49

67
54

78

72

64

55

50

2012

2013

2014

FY2015
forecasts

ﬁnal■Consolidated electrick energy● Consolidated peak power

50

AC Servo Press H1F200-2■ Non-Consolidated electrick energy● Non-Consolidated peak power

400

FEATURE

Hybrid Hydraulic Excavators Surpass 3,000 Units in Sales

FE25-1 operating at a fishing port

Market Share Ratio of Hybrid HydraulicExcavators (as of the end of March 2015)

Social Contribution Activities

Halving Electricity Usage Project

0

80

76.6

50
0

“FE25-1” which was introduced to the market in April 2014, is an innovative battery-powered forklift that combines the outdoor capacity(waterproof, dust-proof qualities) and ease of use (rehydration unnecessary as well as rapid recharging capabilities of recharging up to 80%
over a one hour lunch break) with the environment-friendliness andeconomy of a battery-powered forklift.
With the growing interest in “food safety and security”, in places suchas fishing ports and wholesale market of fisheries products and fresh
produce, the FE25-1 is being chosen by many customers for its low
operating cost as well as its ‘clean’ characteristic of not producing any
exhaust gas, smells or noise.
Also, in airport terminal warehouses, wood processing industry, wood
products manufacture and sales companies, ceramic manufacturers,
and cast and wrought iron industries?all of which are outdoor works
affected by weather, fugitive dust(sand, etc.), and fine particles thatmake them unsuitable for battery-powered forklifts?the FE25-1 has
been highly rated for proving its outdoor capabilities and low operating cost demonstrated in actual work situations. The cumulative totalof domestic orders has already exceeded 700 forklifts.

Growing with Society

276

200

“D155AXi-8” is the first ICT construction equipment compliant to thenext generation exhaust emission regulations of Japan, USA and Europe. By building in, for the first time, an automatic blade control function to a large-sized bulldozer which bears the large burden of heavy
excavation work in land preparation, quarrying and mining, this largesized bulldozer performs with great effectiveness, making possible an
improvement in work efficiency (decreased the fuel consumption rate
per amount of work) of approximately 8% compared to models without the automatic blade control.

(%)
110

(kt)
400

100
100

Forklift Truck FE25-1

CO2 Emissions(Overseas)

(kt)
400

300

Large Bulldozer D155AXi-8

Developing People

In 2010, to contribute to Post Kyoto Protocol climate change measures,a mid-term goal for 40% reduction compared to 1990 levels by 2015
was established but following the start of activities to halve power
consumption, activities are under way to achieve an ambitious 54%
reduction compared to FY2000 levels.
Energy-saving activities were undertaken through the establishment
and start of high efficiency lines and removal of old lines along withadopting renewable energy and horizontal expansion of various production improvements revolving around the “Company-Wide Power

Reduction Project Team” established in May 2012. As a result, the index for the CO2 emissions per unit of manufacturing value was reduced
36.9% compared to FY2000. CO2 emissions at Komatsu’s overseas
manufacturing sites have also been cut 33% compared to FY2005 asa result of fuel conversion and lateral spread of typical improvements
across domestic plants.
Komatsu will continue its effort into this fiscal year to achieve further
reductions in the CO2 emissions index by renewing aged buildings ofover 40 years with a building that adopts the latest energy-saving technology and by making steady efforts on-site.

Offering products and services that aid Komatsu customers in their environmental efforts can lead toabatement of the environmentalloads across Komatsu’ value chains.

Enhancing Quality of Life

Environmentally-friendly Products and Services

Reducing CO2 Emissions in Manufacturing Operations

300
200
100
0
（FY）

Since 2008, when Komatsu introduced the world’s first mass-produced
Hybrid Hydraulic excavator (PC200-8E0), the number of units sold has
continued to increase, with the cumulative sales total surpassing 2,000
units in FY2012, then exceeding 3,000 units in FY2014.
In FY2013, a model change was made to HB205/215-2, which
greatly decreased the emissions of nitrogen oxide (NOx) and particulatematter (PM). Also in FY2013, in addition to the 20-ton class excavators,
30-ton class excavators were added to expand the model types available
for overseas exports to countries such as Australia.
For these hybrid models, a 20~30% cut in fuel consumption has
been achieved in comparison to previous models.

Other
countries
About
16%

China
About
23%

Total :
about
3,200 units

Japan
About
61%

CSR DIGEST 201514

CSR Theme ❷Developing People▪ Our Initiatives◦ Enhancing our employees and suppliers through the KOMATSU Way◦ Enhancing our employees and distributors through brand management

Diversity Initiatives

Our Approach to Diversity

Komatsu’s Approach to Diversity
Corporate social responsibility
Quality of employees’ lives

Balance・ Work-Life balance
・ Respect for the diversity of individuals andprovision of fair opportunities

・ Contribution to society

Sustainable development
Maintaining competitiveness・ Varied ideas and vigorous discussion
・ Culture of continuously taking on challenges
・ Enhancement and utilization of each
person’s strengths and individuality“Corporate Guide for Women” for FY2016 recruitment (left) and Nadeshiko Brand logo (right)

DATA
Women at Komatsu (employed at Komatsu Ltd. in Japan)
FY2012FY2013

Status in FY2014
FY2014

Number (ratio) of women employed

942
1,050
（9.5%） （10.3%）

1,091(10.5%)

Number (ratio) of women in management positions50（3.4%）

55（3.5%）

64（4.0%）

Number (ratio) of women in executive positions2（4.3%）

2（4.7%）

2（4.7%）

Number (ratio) of women hired*

30
32
20
（12.0%） （15.0%） （10.9%）*Note: Data is for Komatsu Ltd. Numbers and ratios represent employees who are new college
graduates.

DATA

Komatsu actively seeks to employ persons with disabilities across theGroup. Our goal is to achieve an employment ratio of 2.3% on a consolidated basis (the current statutory employment ratio is 2.0%) for theGroup in Japan by April 2018.
In April 2008, Komatsu established the Business Creation Center (BCC)
within the Human Resources Department in Japan as a dedicated organizational entity for promoting the hiring of persons with disabilities.
Persons with mental or developmental disabilities are employed by
the BCC in nine business units in Japan. Advisors are assigned to eachbusiness unit to provide training and advice on daily tasks. Each BCC
staff member meets with an advisor every six months to discuss goals,
instead of simply handling a delimited set of tasks. Linking salary toindividual performance assessments, we encourage employees withdisabilities to work on their goals toward achieving independence andself-reliance.
Through these efforts Komatsu is not merely focused on achieving atargeted employment ratio; it is seeking to create a workplace thatprovides a sense of fulfillment for all individuals, and where employeeswith disabilities work alongside other staff members.

The employment ratio of persons with disabilities was 2.58% (forKomatsu Ltd. in Japan) as of April 2015. A total of 94 workers were
employed by the BCC at nine business units in Japan. The BCC has expanded to begin taking on work that had previously been outsourced,
as well as internal tasks that tend to be time-consuming. As a result, it
has helped raise efficiency and reduce costs for the company.

DATA
Employment of Persons with Disabilities

FY2009Nationality, race, age, gender, disability, socio-economic status, and more

Promoting Globalized Management
Approach and Goals
Komatsu has placed top priority on localized management and isdeveloping locally-hired employees into business leaders who will beable to hold top management positions at overseas subsidiaries. Local
nationals take leadership positions at our major subsidiaries. For situations where Japanese managers still hold the top local post, our goal is
to develop local candidates to whom the baton of executive leadershipcan be gradually passed. To this end, the primary role of staff withextensive experience at Komatsu (commonly Japanese) provide in communicating the KOMATSU Way—Komatsu’s approach to management,
technology and skills—in overseas locations and serve as a bridge between Komatsu in Japan and subsidiaries overseas.

Systems and Status in FY2014
Human Resource Development
Since FY2006, Global Management Seminars have been conducted annually for local nationals in executive positions at overseas subsidiaries
to present and discuss information including Komatsu's management
policies, the KOMATSU Way and business strategies. In FY2014, theseminar was held in October with the participation of eight executives
representing subsidiaries in Brazil, Chile, Sweden, Indonesia, Thailand
and China. The overall objective has been to deepen understanding of
the KOMATSU Way based on Komatsu's corporate history, and of thecompany's approach to production, marketing and development, so
15

CSR DIGEST 2015

FY2014

April 2013

April 2014

April 2015

Number of major overseas subsidiaries

40

40

Number of companies with local nationals in top management
positions*

22

26*Executive positions include CEO, COO, president and chairperson

Promoting Women's Careers
Approach and Goals
Komatsu is committed to creating a working environment where female employees are able to demonstrate their capabilities. We actively
support the career development of women by setting targets for thenumber of women hired, the ratio of female employees and the ratioof female managers (on a non-consolidated basis). In Japan, our goal is
to increase the ratio of women in managerial positions to above 5% byApril 2016.

Systems and Status in FY2014
In 2014, we set up a study group by bringing together labor andmanagement to consider measures for promoting women’s careersand encouraging men to participate in childcare. We began offering
career planning training for female employees in Japan in FY2014. The
training focuses on business units in Japan and targets women who
are at least thirty years old but are not yet in a managerial position.
Participants review their past work experience and then consider careerplans. The training has been conducted at the KOMATSU Way Global
Institute in Komatsu City, Ishikawa Prefecture, with daycare provided to

FEATURE

Initiatives to Support Women Working
at Japanese Construction Sites

2.06%

2.36%

2.50%

2.58%

Number of BCC locations

8

9

9

9

Since the 1990s, the workforce in the Japanese construction industry
has continued to shrink due to the aging population and a decrease in
the number of new college graduates, which has given rise to concerns
about a labor shortage. As a result, there are moves in the male-centric
construction industry to increase the number of female workers. Komatsu has launched its own activities to support the advancement of women at construction sites.
So that more women can take part in programs aimed at providing thenecessary qualifications for operating construction machinery, we set up
a course exclusively for women at the Komatsu School for Construction
Machinery Operation. Our particular aim has been to support the Tohoku region, which is grappling with a serious shortage of labor for theongoing reconstruction work required after the earthquake disaster thatstruck the area. We launched the initiative at the Miyagi Center and, on
five occasions since December 2014, have held courses on forklifts andcompact equipment. In addition to preparing facilities and equipment
such as locker rooms and gear, we
provide childcare services upon request and have earned praise for ourefforts from the participants.
We have also addressed the issue
of toilets at the construction site bydeveloping a temporary lavatory thatis responsive to the needs of women through a joint effort between
Komatsu Rental Ltd. and a toilet Qualification program for women at
manufacturer. We are now working the Miyagi Center of the Komatsu
to introduce this lavatory to sites School for Construction Machinery Operation
where women operate machinery.

Number of BCC staff
members

59

75

88

94

Employment ratio of
persons with disabilities

Note: Data is for Komatsu Ltd.

VOICEI Have High Expectations for
Komatsu's Human Resource
Development, the Company's
Underlying Strength
Ms. Misato HorieVice Chairman
NPO WEL'S Shinkiba

WEL'S Shinkiba is an authorized nonprofit organization whose main
purpose is to support the employment of persons with disabilities. It has
been assisting Komatsu in its efforts since the end of 2007. Our activities
are centered around providing companies with the know-how required
to hire persons with disabilities, and we also help with their daily living
needs. Working with Komatsu, I have seen the underlying strength ofa Japanese company in its approach and efforts to develop people. I
have been impressed by Komatsu in creating suitable work and an environment for them as well as thorough training. Komatsu is resolved
to foster these individuals so that they become aforce of the company. Furthermore, while Komatsu makes use of its know-how in management ofspecial-purpose subsidiaries in managing the BCC,
it still positions the BCC as a unit of the company,
which I think is the ideal way to advance toward BCC staff, the driving
the goal of normalization.
force within the company

CSR DIGEST 2015

Social Contribution Activities

April 2012

Diversity at Komatsu
Diversity of individuals:

Growing with Society

The employees who drive our businesses are an indispensable assetof the Komatsu Group. And the motivating force behind DANTOTSU(unique and unrivaled) is generated by employees with diverse personalities seeking to enhance their skills and demonstrate their strengths
in an environment of mutual respect. Consequently, by recognizing
diversity as a significant corporate advantage, Komatsu respects thebasic human rights of every employee and strives to offer career development opportunities that enable each individual to fully demonstrate
their abilities with a sense of fulfillment and pride.

that participants will be able to clearly convey the information as theirown.
We also provide Global Management Training for selected employees
toward developing executive candidates capable of holding global
leadership roles. About ten general managers with potential are selected every year in Japan as well as top managers at overseas subsidiaries
for enrollment in short-term courses at international business schools.
In FY2014, seven individuals attended training at the London Business
School (England) and IMD (Switzerland).
Management System
In order to effectively promote global management, Komatsu runs various global meetings, including the Komatsu Global Executive Meeting
convened for the top management of all Komatsu Group companies
in Japan and overseas, management committees for each region andbusiness area, and other meetings for specific purposes, such as the
Quality Meeting; Occupational Safety, Health & Environmental Affairs
Meeting; and Legal Meeting.

Approach and Goals

Developing People

Special Story

Employing Persons with Disabilities

Enhancing Quality of Life

enable employees with young children to participate. We also createdthe “Corporate Guide for Women” to introduce Komatsu to female
job-seekers at universities during recruiting efforts for FY2016. In termsof external recognition, Komatsu was selected as a Nadeshiko Brand
company by the Ministry of Economy, Trade and Industry and the Tokyo
Stock Exchange as a listed company that excels in promoting career development for women. The commendation noted the number of women in managerial positions at Komatsu, including executive officers,
and the company’s work-life balance initiative for actively promoting
employee childcare and nursing care leaves regardless of gender.

16

CSR Theme ❷Developing People

Approach and Goals
Reducing the total number of actual working hours and implementing
related systems are the key aspects for achieving a healthy work-lifebalance for employees. Komatsu Ltd. has worked in coordination withlabor unions on this issue to formulate numerical targets, which are
now set at 2,100 or less working hours per year, and at least 17 daysof paid vacation taken per year.

DATA

Flexible Working Style

Information on this page is non-consolidated data except for that for some programs,
which are intended not only for Komatsu Ltd. but also for subsidiaries in Japan.

Main Programs and Measures Designed to Enhance WorkLife Balance
Program/MeasurePart-time work
Allowance toward
the cost of using
childcare services
Nursing leave
Family-care leave
programCare support

Part-time work
Care leave

Life support leave

Other typesof leave
Flexible leave

Volunteer incentive program

17

CSR DIGEST 2015

Description
Available for a maximum of three years from thebirth of the child to the time the child enters nursery school. Also available for a maximum of three
years for children up to the third year of elementary
school in cases where a spouse is transferred, etc.
Shortening of working hours by a maximum of
three hours per day to allow for care of children up
to the third grade of elementary school
Allowance toward the cost of childcare for infants
up to age two before entering nursery school(10,000 yen/month)
Five days for nursing care of one child up to thethird grade of elementary school, and ten days forthe second child onward (paid leave)
Allowance toward the cost of using childcare services
A maximum of three years available to employees
taking care of family members
Shortening of working hours by a maximum of
three hours per day
Five days per year for attending to one family
member in need of nursing care, and ten days forthe second family member onward (paid leave)
Can be used as sick leave, pregnancy leave,
childcare leave or for care of family members. An
employee may add five new days of accumulated
leave per year. A maximum of 40 days of unused
annual leave may be accumulated. Childcare leave
may be used for school events for children aged up
to sixth grade in elementary school
Provided to encourage employees to take fiveconsecutive days of leave for mental and physicalrejuvenation
Employees receive an additional five days of annual
leave and a travel voucher upon completion of their
15th, 25th and 35th year of continued service• Flexible working hours (core time; 10:00 am–3:45 pm)• Part-time work (child and other family-care)• Half-day paid vacation• Maximum of five consecutive days of paid vacation to encourage
employees• System and facility for supporting childcare (nursery payment and useof in-house nursery)• Work-sharing (based on negotiation between labor and management
as necessary)• Discretionary work system (employees in development, design andR&D section)• Telework program (officially introduced in FY2014)

DATA
FY2013

FY2014Pregnancy leaves

42

41

47

Childcare leaves

74

85

80

7

7

4

Within one week leave

0

0

0

Return and retention rates

100%

98.8%

100%

3

4

4

Family-care leaves

Services Personnel Human Resource
Development

Systems and Status in FY2014

Building a Structure Centered on the Department for
Promotion of Distributor HR Development

Globalization of Komatsu's production organization is progressing andthe manufacturing workplace requires a high level of technical capability. We have designated the third Saturday of every October as “Technical Day” and hold all-Komatsu technical competitions on this day.
Participants include employees from overseas subsidiaries and businessassociates, whose aim is to maintain and improve the Komatsu Group's
technical capabilities by mutually dedicating themselves to their studies.
In addition, Komatsu established the Meister system for passing down
technical capabilities from the production site in FY2006. Techniquesand skills that merit handing down are divided into 9 fields of 15 capabilities, and a First Meister is certified for each capability.
Under Komatsu's Mother Plant System, production plants with product development capability are positioned as Mother plants, which
are responsible for overseeing the safety, quality, cost and delivery ofoverseas Child plants that produce the same products. Meisters are
certified for their high level of proficiency in specific technical areas
and dedicate their time to guiding and nurturing engineers at plants inJapan as well as at overseas Child plants.
Komatsu is also enthusiastically conducting improvement activities.
Every year on the third Saturday of November, we hold the all-Komatsu
quality control competitions, and similar to the technical competitions,many people from overseas subsidiaries and business partners in the
supply chain participate.

DATA
FY2012All-Komatsu Technology Olympics

All-Komatsu QC
Competition
Certified Meisters

FY2012

Male

Enhancing the Technical Capability of Our
Manufacturing Workplace▼ For more information please refer to the following website:

Number ofparticipants
From overseas
Number of
teams
From overseas

FY2013

FY2014

211

203

225

50
(10 countries)49(11 countries)

50(11 countries)

78

76

79

25
(13 countries)

21(11 countries)

23(12 countries)

41

41

40

The services personnel, who support our customers with the operationof our products that they have purchased, play a very important role in
Komatsu's “Quality and Reliability.” Komatsu puts a lot of effort into thehuman resource development of our distributor services personnel allover the world. We have two training programs for services personnel
human resource development: internal human resource development forservices support and distributor human resource development.
We have created an internal training program called “Product Support
College” for training our Japanese staff, and the Komatsu Human Resource Development Center for training essential personnel who will
be working at future mining sites, and conduct planned training within
departments and at overseas sites by rotation.
Distributor human resource development, depending on the content,
will be created or supported by the head office, and for the basic courses
on products and services, Komatsu provides the curriculum and training
materials and conducts the training on site (at the local company anddistributors). We also provide advanced courses by inviting senior managers and mechanics to Japan to conduct the training, and technicaltraining provided by the local company's training center (mother training
center) for more specialized training. We track each type of training via
the LMS (Learning Management System) to continue making sure that
we can see and fortify the services personnel's human resource development.
For places that do not have a training system at the distributors, or if
there is an urgent need for human resource development, Komatsu finds
ways to efficiently develop human resources, such as by establishing a
training center in Africa and working with local schools in Russia, Brazil
and China to start a construction equipment training course.
To further strengthen our distributor human resource development, in
April 2014 we created the Department for Promotion of Distributor HR
Development at the Komatsu Head Office. We intend to continue developing our structure for providing long-term support to our distributors
by clearly establishing our global development structure and performance appraisal standards in areas such as marketing, parts and services
and by offering varied training systems and programs.

Training Centers around the World
Komatsu has 19 training centers in 17 countries.
■■■ Centers on the map in orange boxes are Mother Training Centers, which handle specialized training
including for distributers in other regions.

Germany（Hannover）
RussiaU.K.
Belgium

Social Contribution Activities

Childcare leave
programChildcare
supportto further advance discussions on working conditions. As a result of ourcontinuing efforts to expand our childcare support system, we wereagain granted use of the mark in 2010.
We have continued these efforts through initiatives such as increasing periods of childcare leave (to a maximum of three years) in 2011,
granting childcare leave for employees when a spouse is transferred,and increasing the subsidy for childcare support service expenses
through the “Cafeteria Plan” in 2013.
Aside from our efforts to reduce working hours, we are also supporting the achievement of work-life balance for our employees throughthe “Life Support Leave System” introduced in FY2014. Life Support
Leave is separate from regular annual leave, in which employees cantake paid time off for personal circumstances such as non-work related
illness, pregnancy, childcare and family-care. An employee is allotted
five days of this type of annual leave per year and may accumulate up
to 40 days of annual leave.
Also, in FY2013 we focused on family-care, and have introduced an allowance that can be received during family-care leave to provide financial support. We have also launched an internal website that publishes
information on family-care. Komatsu will continue to work on helping
our employees achieve a healthy work-life balance.

Growing with Society

In an effort to achieve appropriate working hours, every workplace in the
Komatsu Group formulates a concrete action plan for reducing overtimeand encouraging employees to take more of their paid annual leave,
which in turn allows them to seriously consider and address working
hour management on a daily basis. Childcare leave and shorter working
hours are contributing factors in the creation of an environment that facilitates productive careers. In 2007, Komatsu was certified by the Japan
Ministry of Health, Labour and Welfare to display the Kurumin Mark as
a company that is supporting the development of the next generation.
We subsequently launched the “Panel on Fostering Future Generations”

Strengthening Our Gemba Capability

Developing People

Systems and Status in FY2014

Enhancing Quality of Life

Enhancing Work-Life Balance

Germany（Düsseldorf ）Italy

SenegalJapan（Ishikawa, Shizuoka ）U.A.E.

Thailand

U.S.A.

China

Kenya

BrazilIndonesia
South Africa

Australia

Chile

http://www.komatsu.com/CompanyInfo/csr/2015/people/people03.html

Long-term paid leave of up to two years, or shortterm paid leave of 12 days per year

CSR DIGEST 201518

CSR Theme ❸Risk Management▪ Our Initiatives◦ Engaging in dialogues with our stakeholders◦ Strengthening our corporate governance and compliance◦ Promoting compliance with environmental, labor, human rights and social norms within the Group and among business partners

The Komatsu Group recognizes all uncertainties that could threaten the Group’s sustained growth as risks, particularly complianceissues, environmental issues, product quality concerns, accidents, and information security problems. The company has adopted thefollowing measures to counter these risks.

Basic Principles and Structure

Organizational Profile

We, at Komatsu Ltd., believe our corporate value is the total sum oftrust given to us by society and all stakeholders. To become a company
which enjoys more trust from shareholders and all other stakeholders,
we are working to strengthen corporate governance, improve management efficiency, advocate corporate ethics and ensure sound management on a group-wide basis. To further improve the transparencyof management for our shareholders and investors, we disclose information in a fair and timely manner and actively engage in investor relations’ activities by holding meetings with shareholders and investors.

■ Board of Directors
Komatsu Ltd. holds Board of Directors’ meetings periodically once or
twice every month as a general rule. The Board of Directors deliberates
and makes resolutions on important matters, determines management
policies of Komatsu, and rigorously controls and supervises the execution of duties by all members of the executive management team,including Representative Directors. Of the 10 Directors on the Board,
three are Outside Directors to ensure transparent and objective management.

Establishment and Improvement ofCorporate Governance

Organizations and Functions
General Meeting of Shareholders
Elect/Discharge
Audit & Supervisory Board
Standing 2/Outside 3
Collaboration
Internal
Auditing Dept.

Audit

Board of Directors
Standing 7/Outside 3

Office ofCorporate
Auditors’ Staff
Internal audit

Internal audit
Affiliated companies
Komatsu Ltd. sends outside Directors andAudit & Supervisory Board Members

Elect/Discharge

Elect/Discharge
Audit reports
Advise/Suggest
Recommend
Elect/Discharge/Supervise
ReportReportAdvise/Suggest
Exective Functions(38 Executive Officers incl.
6 concurrent Directors)

Accounting Auditors(Audit corporation)
Human Resource
Advisory Committee
Compensation Advisory
Committee

Compliance Committee, etc.
International Advisory Board
Collaboration

Determine the content of items to appoint/dismiss, etc./Confirm suitability or independency of the Accounting Auditors

Recommend
Audit reports

19

CSR DIGEST 2015

Systems and Status in FY2014

Anti-monopoly Act

Implementing a Business Continuity Plan for Komatsu
In order to quickly confirm the safety of employees and their families
in the event of an accident or disaster, and to be able to continue orquickly restart important business operations, Komatsu has formulated a business continuity plan (BCP). In addition, at our head officebuildings and all production plants, we assume the possible occurrenceof earthquakes and conduct regular training so that in the event of adisaster everyone will be able to act quickly and appropriately. Furthermore, at our production plants, we are working on seismic strengthening for buildings and equipment, as well as reinforcement against
damage from torrential rains, according to the production plant’s plans.
Also, in case of an outbreak or epidemic of a new type of influenza,
we will establish a special committee and take appropriate measures.
For our employees we have compiled a manual with information regarding preventative measures and what actions to take in case of
infection, and we also provide training sessions to promote a thoroughunderstanding of these measures.

Promoting Risk Management throughout the GroupTo reinforce the risk management structure across the Group, Komatsu
is establishing channels for risk reporting, creating a risk management
manual, and conducting BCP initial response training at the head officeand the sales and service locations of each company in order to raise
the level of risk management and response to disasters. Additionally,
Komatsu is strengthening its Group-wide system for contacting employees during an emergency by introducing safety confirmation systems, broad-area wireless devices, and conducting regular training forsafety reporting and communication.

Conducting Compliance and Risk Audits
As a part of its risk management activities, Komatsu has been conducting compliance and risk audits (CR audits) since FY2008. These
cover areas not included in the J-SOX audits, which are conducted inaccordance with the Financial Instruments and Exchange Act of Japanto evaluate internal controls related to financial reporting and identify
potential compliance risks within the company, with a particular focus
on confirming and evaluating the status of legal compliance. Our internal specialist team conducts the internal audits at Komatsu and its

Information Security
Export Control
Vehicle Inspections, etc.
Quality Assurance, etc.
Finance and Treasury
Labor
Environment
SafetyFY 2008

2009

2010

2011

2012

2013

2014

Strengthening Information Security
Komatsu is developing an information security structure for the entire
Group, placing the Information Security Committee at its center. As
one sphere of this structure, the company distributes an Information
Security Guidebook to all employees. In conjunction with this, it provides education and awareness-raising activities based on the Guidebook, with the belief that raising individual employee consciousness of
information security is essential. The company is developing a structure
to protect information from being falsified, leaked or lost, even incases of negligence or outside intrusion. In addition, it is conducting
information security audits to ensure that these measures are working
effectively and to detect and address any problems.

Human Right Management Issues

Social Contribution Activities

In 1999 Komatsu Ltd. introduced the Executive Officer System and has
been working to separate management decisionmaking and supervisory functions from executive functions to the extent permitted by laws
and regulations. At the same time, we also limit the Board of Directors
to a small number of members and appoint Outside Directors and Outside Audit & Supervisory Board Members. To improve the effectivenessof discussions at meetings of the Board of Directors, we have worked
to reform their operational aspect, primarily by putting in place a system to ensure thorough discussions of important management mattersand prompt decision making. We have also established the International Advisory Board (IAB) as a means to supplement executive functions.

■ Audit & Supervisory Board
The Audit & Supervisory Board determines such matters as audit
policies and the division of duties among Audit & Supervisory Board
Members. Each Audit & Supervisory Board Member attends meetingsof the Board of Directors and other important meetings, and audits theexecution of duties by Directors. Meetings of the Audit & Supervisory
Board are in principle held periodically once or twice every month as a
general rule, and the Board performs appropriate audits by such means
as hearing reports from members of the executive management teamon their execution of duties. The Company has also established the Office of Corporate Auditors’ Staff to assist the Audit & Supervisory Board
Members in their duties. At least half of the five Audit & Supervisory
Board Members are Outside Audit & Supervisory Board Members.

Implementation of Compliance and Risk Audits

Growing with Society

Basic Stance

Developing People

Corporate Governance・In addition to the basic policy for risk management to ensure business continuity and stable development, Komatsu has established
Risk Management Rules to correctly recognize and manage risks.
・Komatsu has established a Risk Management Committee to devise
relevant policies for the entire Group, review the risk management
system, and evaluate and improve upon response measures in placefor each risk, as well as to take control of risks when they arise. The
committee regularly reports on its deliberations and activities to theboard of directors.
・Komatsu will establish an emergency headquarters when serious risks
occur and implement appropriate measures to minimize damage.

Japanese and overseas affiliates, as well as at sites operated by independently-owned distributors.
The audited items are: 1. Safety; 2. Environment; 3. Labor; 4. Financeand Treasury; 5. Quality Assurance and Recall; 6. Vehicle Inspections
and Specific Voluntary Inspections (inspections done on construction
equipment, similar to vehicle inspections); 7. Export Control; 8. Information Security; and 9. Anti-monopoly Act.
Through these audits, we strive to raise the control and complianceawareness levels at each company and in every department. Going forward, we would like to improve our case-by-case audit method and raise
the operational level of CR audits as a part of risk management functions.

Enhancing Quality of Life

Growing with Society

Komatsu signed the United Nations Global Compact in 2008. In aneffort to apply its major principles for protecting human rights, Komatsu with the help of external experts conducted a human rights risk
assessment for all of its construction/mining equipment and forestry
machinery businesses worldwide in 2014, referring to the Universal
Declaration of Human Rights and the U.N. Guiding Principles on Business and Human Rights.
The results showed that the degree of urgency for problems occurring
is low, while the degree of effect if a problem does occur is moderate.
They also pointed to the need for Komatsu to move beyond its current
assessment efforts toward evaluating the activities of partner companies, such as parts suppliers and our network of distributors that provide products and services to our customers. In light of the results, we
intend to continue implementing the necessary measures.
CSR DIGEST 201520

CSR Theme ❸Growing with Society

Promoting ComplianceFollowing the principle that compliance is a top priority, Komatsu will
ensure that it fully understands and complies with business rules while
promoting structural improvements.

Frameworks for Promoting ComplianceKomatsu’s Worldwide Code of Business Conduct

Process for Compliance Activities

Internal Reporting System
Komatsu has established consultation offices both internally at Komatsu Group companies and externally at law firms, collectively known as
the Compliance Hotlines, to respond to consultations or reporting fromGroup company employees that pertain to best business practices orquestionable actions. The Group actively encourages consultations andreporting through Komatsu’s Worldwide Code of Business Conduct,
the Five Principles of Compliance, and Group companie’s workplacerules, making it clear that employees who use the system for appropriate reporting will not be treated unfairly in any way as a result of theiraction.

Status in FY2014
No incidents of special note occurred during 2014.

DATA
1. About Komatsu’s Worldwide Code of Business Conduct
Established

January 1, 1998

Last revised

April 1, 2014 (9th edition)

Languages

15 languages
Japanese, English, Chinese, Spanish, Portuguese, German,
Dutch, Italian, Swedish, Indonesian, Thai, Russian, Turkish,
Persian, Tamil

Distribution

Global Group employees (more than 29,000)
The Japanese and English versions are published on the
Komatsu website

2. Compliance Education in FY2014
Japan
Compliance education

More than 3,000

Code of business conduct education(including e-learning)More than 18,000

Overseas21

CSR DIGEST 2015

Conducted at 24 companies

Komatsu's Procurement Policy
Komatsu's basic policy is to produce a product in the area where there
is demand for it. Out of the 39 plants that manufacture construction
and mining machinery, 27 are located outside of Japan. In following
with the manufacturing of machinery at an overseas plant, we are
actively working on procuring parts and materials from the same area.
Aside from engines and main components that are shipped everywherein the world from Japan, and a few specific parts that are only suppliedby specialized manufacturers, the overseas plants are on their own interms of procurement, to promote local and optimal procurement forparts such as sheet metal.

CSR Procurement Guidelines
In 2011 we formulated the CSR Procurement Guidelines, which lay out
key compliance and CSR information for all our business partners. We
have posted the guidelines on our Japanese and English websites andare now making sure that our partners are aware of this information.
▼ For more information please refer to the following website:

http://www.komatsu.com/CompanyInfo/csr/2015/society/society06.html

Midori-kai and the State of Our Support of
the Organization in FY2014
Komatsu Midori-kai
Komatsu Midori-kai is an organization made up of our business partners, with 164 member companies in Japan, out of which the procurement amount is approximately 75% of domestic purchasing goods.
At the regular meetings, where the management members of eachcompany are present, such as the general assembly, general meetingsand New Years' special meetings, Komatsu's top executives explain ourpolicies, emphasize the importance of CSR management and requestthat awareness be raised in regard to CSR management.
In North America, Europe and China, there are Midori-kai organizations made up of Komatsu's major business partners. We hope thatthese chapters will take advantage of the characteristics of each region
to further expand their business activities.

Support to Member Companies
Environment
We are making certain certifications, such as ISO14001 and Eco Stage,
mandatory, and directing and supporting efforts to obtain these certifications. In our efforts to reduce electricity consumption, we set a target
for reducing electricity consumption by at least 15% from 2010 levels.
We are also working to reduce energy consumption among business
partners, focusing on implementing Komatsu's initiative (as part of our
production system reforms) to reduce electricity consumption by 50%
across our business partners.
SafetyWe have implemented the Japan Industrial Safety and Health Association's Small and Medium-sized Enterprises Occupational Health and
Safety Assessment for 97 companies, with Komatsu bearing the cost of

the assessment fees, to request that each company increase the levelof safety on their sites. In addition, we opened safety training centersin each Komatsu plant that our business partners can use so that theiremployees can experience simulated workplace hazards and be trained
to anticipate dangerous situations.
Personnel Development
To develop young top management at our business partners, we hold
“Management Salons” as occasions for Komatsu management andyoung top management to exchange views. With this approach we
intend to develop “win-win” relationships with our business partners
while aligning our respective management policies and implementing
PDCA cycles.
Furthermore, we select model companies as part of our efforts to support our business partners in overall improvement and advance theirtechnological resources by capitalizing on Komatsu expertise toward
strengthening their organizational capabilities.

Management System
Checking System for New Business Transactions andAgreements
Komatsu uses a check sheet before it starts doing business with a new
supplier, not only to confirm basic conditions related to quality, costand delivery, but also to verify their efforts in environmental protectionand employee education. To conduct a business transaction in accordance with the CSR Procurement Policy, our basic agreement includes
clauses pertaining to environmental protection and compliance.

Risk Management Prepared for Natural Disasters
Komatsu is strengthening its risk management system for procurement. Since FY2012, we have conducted assessments in Japan so that
we can quickly determine the status of partner companies in the eventof a disaster such as an earthquake or tsunami, and be able to continue procurement activities without delay, to minimize the effect on
production. In addition to considering prevention measures for eachpartner company that have higher levels of risk, the procurement staff
will be able to consider risks from this aspect when considering new
agreements, so that we can heighten the accuracy of the information.

Policy and Actions Regarding Conflict Minerals
Komatsu has adopted a policy of not using conflict minerals produced by the Democratic Republic of Congo (DRC) or its neighbors(Angola, Central African Republic, Republic of the Congo, Rwanda,
Southern Sudan, Tanzania, Uganda and Zambia) from our corporatesocial responsibility perspective. During the regular meetings we holdwith our suppliers at each Komatsu plant in Japan, we explained thispolicy as well as Komatsu's response to the conflict minerals issue andrelated requests to our suppliers. With the cooperation of suppliers,
we conducted a country-of-origin survey to determine the location oforigin of the conflict minerals we use. Looking ahead, we will continue
taking steps to prevent the use of conflict minerals from the DRC and
its neighbors and thereby restrict funding for military groups. We will
immediately discontinue any use of conflict materials that we discover.

CSR DIGEST 2015

Social Contribution Activities(1) Formulate and revise the Code:
Formulate the Code as a foundation for compliance activities andrevise the Code (currently in its ninth edition) as required to reflectsocial change.
(2) Implement the Code:
Implement the Code through education that corresponds to employee rank and their respective duties, and by communicating information in accordance with the Code.
(3) Determine the Code’s current status:
Determine the level at which the Code is being applied by having all
business units regularly report on their use of the Code and by conducting audits and enhancing Komatsu’s internal reporting system.
(4) Address inadequacies:
Any issues identified during the above activities will be addressed inaccordance with the Code and preventive measures will be implemented.

So that employees remain continuously aware of compliance, theGroup is working to raise their consciousness of best business practices
by displaying in every Komatsu Group business unit posters listing The
Five Principles of Compliance, a condensed version of Komatsu’s Codeof Worldwide Business Conduct. The Group engages in awareness-raising initiatives, with a page dedicated to compliance on its intranet
as well as well-developed compliancerelated education and trainingthat corresponds to each employee rank and and their respective duties. The Group strives to detect risks early and implement reforms at
Komatsu business units and Group companies through monitoring
during financial audits and compliance and risk audits. The monitoringcovers compliance in highly important areas such as safety and environmental practices.

Approach and Policy

Growing with Society

The company has formulated Komatsu’s Worldwide Code of BusinessConduct (established in 1998 and revised eight times to date) as acompilation of best business practices to be observed by officers andemployees of Komatsu Group companies around the globe. The code
addresses items such as free and fair business practices, appropriate
relationships between the company and its employees, endeavors forthe global environment, the handling of information, and the establishment of an internal control structure. The text of the code has beenreleased to the public in its entirety. Komatsu considers CSR as a key
responsibility and Komatsu’s Worldwide Code of Business Conduct
clearly conveys its policy of giving full weight to CSR. The pillar of
Komatsu’s compliance activities is based on constant repetition of thefollowing process, outlined in the Code of Worldwide Business Conduct: (1) Formulate and revise the Code, (2) Implement the Code, (3)Determine the Code’s current status, and (4) Address inadequacies.

Upholding Thorough Compliance

Developing People

To make certain that the entire Komatsu Group complies with the rulesof the business community, Komatsu has appointed at the head office
an executive officer in charge of compliance and established the Compliance Department to handle this issue exclusively. The Compliance
Committee, chaired by the president and CEO, deliberates the Group’s
action policies and important issues while regularly reporting the stateof compliance-related activities to the board of directors.

Support for CSR Initiatives of Business Partners

Enhancing Quality of Life

Compliance

22

CSR Promotion Structure at KIPL

Supporting a Welding Training School

CSR Steering Committee
1. Devising and driving
Functions

2. Select activity
3. Make budgetary plan
4. Ensuring reflection in annual reports

Community Based Social Contribution around the World— CSR Activities and their Background in India

Under its philosophy of “being a corporate citizen who is needed in the community,” Komatsu engages in social contribution activities in every part of the globe where it does business. The following report from India describes the efforts of Komatsu India Pvt.
Ltd. in that country, one of the world's growing markets.

Report from India

Report by

Mr. Subramanian Srikrishn
General Manager, Human Resources & General
Affairs Department Komatsu India Pvt. Ltd. (KIPL)CSR Activities and their Background in India

Functions

Carry out CSR activity
Kakamuthu Educational Trust welding technical school in Chennai

Results of Activities in FY2014
Education and Employment
・Provided welding technical support to a technical school.
・Sponsored teacher development.
・Welcomed student tours of the company.

Mr. Chitti Babu

President, Kakamuthu Educational Trust

Our Enhanced CSR System and Major Results of Activities in
FY2014Thank you for offering our students such a great opportunity. I would
like to express my deep appreciation to KIPL management for their support. Komatsu donated funds to us so that we could purchase materials
and equipment. With KIPL's support, we were able to buy a large quantity of welding electrodes and maintain a safe campus environment. The
company also gave 30 books, notebooks and stationery to the students
and invited them to a reading competition organized by KIPL. Two KIPL
engineers visit the school twice a week to provide the students withtechnical training in 80 key technical categories. The company has also
provided training materials for welding over the past three years.
Once again, I am deeply grateful for your support.

Following the amendment to the Companies Act, KIPL enhanced its
CSR system. The CSR Steering Committee consists of the president,
who chairs the committee, and three directors. The committee is
responsible for planning, overseeing the initiatives and selection ofactivities, determining the budget, and disclosing information about
activities in the annual report. The CSR Executive Committee is responsible for the execution of the activities, with the company's Human
Resources & General Affairs Department serving as the secretariat. This
committee promotes concrete actions while reporting the results ofthese actions to the CSR Steering Committee on a quarterly basis.

Activities in Coming Years

KIPL CSR Policy and Transition

In recent years, people in India have developed high expectations forthe social role of companies, particularly since corporate CSR activities
have been mandated by law. At KIPL, we will steadfastly implement
our current CSR activities while continuing to explore what more wecan do, including initiatives outside the Chennai region.

Amended KIPL CSR Policy
Indian Government made CSR a mandatory
reporting item by boards of directors
Komatsu CSR
KIPL CSR Policy
Approach and Priorities （Reviewed in FY2010）

FY2007 KIPL CSR Policy
・ Employment
Engaging ITI students as apprentices
・ Fulfilment of social demands
・ Environment

23

CSR DIGEST 2015

VOICE

FY2010 onward andCurrent CSR Policy
・ Education
・ Employment
・ Fulfilment of social demands
・ Environment

Government Proposed Activities
for Company in FY2014
・ Environmental sustainability
・ Eradicating poverty and hunger
・ Promoting education
・ Promoting gender equality and empowering women・ Protection of national heritage, art and culture
・ Measures for the benefit of armed forces veterans・ Training to promote sports
・ Contribution to the prime minister’s national relief fund・ Rural development projects

Social Contribution Activities

At Komatsu India Pvt. Ltd. (KIPL) we carry out social contribution
activities under the CSR policy formulated in FY2007. Following thepolicy's formulation by the Komatsu head office, we revised it in 2010
and identified four priority categories: education, employment, social
demands, and the environment. We conduct our CSR activities underthese categories. Over this period, a major change occurred in theenvironment surrounding our CSR activities; the Companies Act wasamended for the first time in 57 years. Under the amended act, passedin August 2013 and enforced in 2014, companies that meet certain
conditions are required to conduct CSR activities.

CSR Executive Committee

Growing with Society

The act specifically stipulates that companies must allocate at least
two percent of their net income over the past three fiscal years to CSR
activities in areas specified by the act. Companies are also required toestablish CSR committees under their boards of directors, formulate
policy, promote activities and disclose information. As for the background of this legislation, India is still facing very large social challenges
in areas such as the environment, poverty and inadequate infrastructure, despite the rapid economic growth of recent years. It has been
said that India is the first country to legally mandate corporate CSR
activities.

Observe progress
every quarter

Developing People

Special Story

Present progress
every quarter

One of our major initiatives has been to offer technical support for
welding at a local technical school. We have been providing this support since FY2008. Students aged 15 or 16 learn about the technology
they will need to find a job. In addition to offering the required materials and equipment for the training, KIPL also dispatches two engineers,
who provide about 300 hours of instruction each year. Moreover, we
recruit excellent students upon their graduation. These efforts are
steadily bearing fruit in terms of actual jobs, as evidenced by the significant improvement in the employment ratio of graduates.

Enhancing Quality of Life

Social Contribution Activities

Social Demands
・Donated furniture, equipment and stationery following
a request from a school.
Environment
・Conducted greening activities.
・Installed solar panels.
CSR DIGEST 201524

Step 2: Gemba

Disaster Relief for Flooding in Chile

Early on Wednesday, March 25, 2015, a front of bad weather affected the north-central region of Chile, resulting in heavy rainfall indesert areas, overflowing rivers, landslides and severe flooding in cities and towns. That same day, the president of Chile declared astate of catastrophe and a health alert for three northern regions of the country, affecting a population of roughly 1,750,000 people.
Komatsu Cummins Chile Ltda. (KCC) responded to the situation and decided to execute its Disaster Relief Program, the activities ofwhich the company has been continuing, as of June 2015. Here we report from an operational point of view on how these activities
have been planned and implemented.

Ms. Josefina Elissetche Correa (Left)
CSR Coordinator, Komatsu Cummins Chile Ltda. (KCC)

After traveling to the affected area, the crisis team forms a local Emergency Committee, consisting of leaders of the business units affected.

――

Step 3: Implementation of Work Plans
Stage 1: Critical Days of the Emergency (First two weeks)
Continuing
Operations- Crisis Manager
delivers guidelines
related to:
1. Flexibility inworking hours
for the workers
affected
2. Ensuring normal
operations of
the branch
offices in theaffected area
3. Monitoring
the situationin regard to
related tasks
and activating
emergency plansfor operational
continuity

External Focus- HR Department uploads information about the affected
workers- HR Department delivers
emergency kits with basic
necessities- CSR Department organizes
volunteer activities- CSR Department activates
the Disaster Relief Program,which aims to mitigate theeffects of the disaster andbring in humanitarian workthrough the presence of ourmachines and our team- Gemba (visits to the site)- CSR Department supports
the identified target townof Los Loros, commune ofTierra Amarilla, a zone ofinfluence of our mining client
Caserones of Lumina Copper,
which is found within the area
covered by our social planwith this mining company- CSR Department holds a
meeting with leading authorities in the area as well as theaffected community. Theirshort-, medium-, and longterm needs are identified,and roles and responsibilities
are described- CSR Top Management
validates the plan withdeadlines, a budget andcommitments that have been
agreed upon
- Supplies and support aredelivered- Machines are made available- Volunteer Days are activated

The “Advance Party“ visited the site on March 31,
where an employee's house
had completely collapsed.

Cities and towns that typically see little rain suffered severe damage.

Step 1: Activation of the Disaster Relief Program

Framework of KCC's Disaster Relief Program
Criteria for decision making

Top Management
Plan disaster countermeasure program

Authorization

・Declaration of a state of catastrophe by a state government
・Attributes to the region（areas in which we operate, where employees live, andwhere other stakeholders are located）

CSR Division
The Crisis Team
Continuing Operations（Crisis Manager）

Internal Focus（HR Dept.）

External Focus- Conduct employee volunteer activities focusing on children inan evacuation center- Define the roles for full- fledged reconstruction efforts (determine
the types of support wanted and the activities to be covered by
the state government)

Stage 4: Rebuilding
Continuing
Operations――

Internal Focus

External Focus

Employee volunteer activities are scheduled (role of the state government is highly significant at this stage)

Step 4: Internal Communication (plan)
An internal communication plan is formulated to make visible what has
been done, emphasizing recognition for those who have participatedin the various volunteer activities of the Disaster Relief Program.

Step 5: Closing of the Disaster Relief Program/Evaluation (plan)
At the end of Disaster Relief Program, the process is evaluated andareas for improvement that can be incorporated in the program are
discussed.

What We Gained through the Activities
DATA
Volunteering hours*
Total Volunteers

2,759.8 hours
175 people

Beneficiaries of KCC Support: internal workers, Los Loros and
San Antonio communities

2,749 people

Total machinery hours*

3,423 hours*As of the end of June 2015

Stage 2: Disaster Relief
Continuing
Operations- Crisis Manager
delivers final reporton operational
continuity

Internal Focus

External Focus- HR Department implements
actions such as: support
through the payment of ahouse for rent to 4 people
who had lost their homes ortheir buildings were declared
uninhabitable; a monetarycontribution to workers
who had lost all their basic
appliances; flexible social
loans; psychological support;
donated money from the
1+1 Campaign- CSR Department organizes
volunteer activities- Volunteer Days are heldat the Hostel Los Loros,organized by workers of theCaserones Mine and Cerro
Negro Norte Mine
- Closing milestone: top management visit to Los Loros
marks the completion of the“Plan of Work Equipment.“
This event starts the normalization step.

External Focus（CSR Dept.）

Internal Local Emergency Committee
External Local Emergency
Committee（affected Community）

At the present, June 2015, the area affected by the flood in
Northern Chile is gradually returning to normal in terms of basic
services: Hospital infrastructure is almost 100% operational, potable water, sewage, and roads are 99% recuperated.
In terms of housing, in the month of June the construction of 664
emergency homes were finalized, of which 66 were built in Los
Loros. During this month the Master Reconstruction Plan was announced by the Government. This plan will allow proper coordination of public policies to advance the delivery of definitive housing
solutions to families affected by the disaster plan.
Our mining customer Caserones Lumins Copper has continued tosupport the Town of Los Loros, either through the debris removal;
the channeling of the Copiapo River; carrying out work for the reconnection of the drinking water and sewer repair; and the delivery of basic kits (kitchen, dining room, bunk bed with mattresses,
dishwasher, gas cylinder, among others) to families affected by the
emergency.
July is scheduled to begin a new phase of community work together with our client Caserones, which aims to strengthen local
school education in Los Loros.

Social Contribution Activities

1. The CSR Department validates authorization of the Disaster Relief
Program activation. The criteria supporting this decision is:
・The state has decreed a “state of catastrophe,“ which corresponds
to a constitutional “state of exception,“ a legal mechanism to deal
with situations of political or catastrophic abnormality, in order tosafeguard the institutional stability and public order.
・The catastrophe affects one of our “influence zones,“ in which wehave operations where a significant number of employees live or

where we have strategic stakeholders.
2. Activating the crisis team is done by the corporate crisis management, general management, the CSR Department and HR management
3. The CSR Department activates the internal “1+1 Campaign,“ whichaims to contribute to the workers and come to the aid of people affected by the disaster, the donations from which are matched by thecompany. This campaign is valued by employees, who see them asopportunities for showing solidarity and support to those affectedby the disaster.

Internal Focus

Growing with SocietyInternal Focus

Ms. Karin Eggers Gutierrez (Right)
CSR Manager, Komatsu Cummins Chile Ltda. (KCC)

KCC's Disaster Relief Response Framework

Continuing
Operations

Developing People

Report byStage 3: Normalization

Enhancing Quality of Life

Special Story

Employee volunteer activities（organized by the CSR Dept.）
1+1 Campaign
Donations for employees affected by the disaster and collected from employees are matched by an equal donation from the company.

25

CSR DIGEST 2015

On May 13, KCC's top management
visited the affected area and talked
with local customers and community.

Firefighters in an affected area withJeffrey Dawes, CEO of KCC (center)

CSR DIGEST 201526

Clearing Anti-Personnel Landmines and Reconstruction Support

When we asked ourselves: “What sort of social contribution activities would meet the needs of regional communities and make thebest use of Komatsu's strengths?” we arrive at the answer: “developing people.” We are working in cooperation with several entities,
such as national and local governments, as well as schools, to carry out human resource development programs that are tailored toeach region's needs and enable participants to acquire skills that will open up employment opportunities.

Various Areas and Forms of Support

Since 2008, Komatsu has partnered with the Japan Mine Action Service (JMAS), a certified NPO, to support demining activities in areasof Cambodia and Angola that suffer from damages caused by anti-personnel landmines, which also includes reconstruction work as
part of this community development project. The demining machines and construction machinery, developed using our company's
technical expertise and manufacturing knowledge, are being put to full use in this endeavor.
We demined about 1,000 ha of land in Cambodia and constructed 33 km of roads in seven villages, bringing the total number of operating hours for the machines and machinery introduced in 2008 to over 6,000 hours.

Cooperating with theCommunity and Customers

Human Resource
Development that
Leads to Employment Supporting Vocational

Training Schools

Supporting Universities

Providing teaching materials
and equipment

Providing facilities andsupporting operations

Accepting apprentices

Activities in FY2014
Support for Developing Construction
Machinery Operators in Liberia
In line with higher expectations for economic growth, there is a pressing need to develop construction machinery operators for required
infrastructure improvements in the West African nation of Liberia. Although the country was severely affected by the spread of Ebola virus
disease (EVD) in FY2014, Komatsu has been supporting the trainingof construction machinery operators at a facility that was jointly constructed by the Japanese government and the UN Industrial Development Organization (UNIDO) and opened in June 2014, just before EVD
began to spread.
Before it opened, four instructors from the facility visited Japan in May
2014 to learn about basic operations and maintenance of construction
machinery at Komatsu. After returning to Liberia, they had to wait
until the spread of EVD was contained before getting back to work.
During that time, they supported the construction of a sanitary facility
in Monrovia, Liberia's capital, applying the skills they had acquired inJapan. In the meantime, Komatsu continued to support them, including by responding to their technical questions by email.
The construction machinery donated by Komatsu arrived in Liberia
in April 2015. The machinery, alongside the expertise of the young
instructors, is contributing alongside the cooperation of local dealers
to the quality of training at the school, where the class has restarted.
Komatsu will continue to provide its support with the cooperation of
local distributors, including the training program itself, until the facility
can be operated on its own.

Komatsu's demining machine

Road construction

At the Mabubas reservation in Angola, which has become a safe area
due to demining, the city rebuilding plan is moving forward.
In Cambodia, construction of the sixth elementary school under thisproject was completed in March 2015. Currently, more than 400 elementary school children attend these schools. We help make the area amuch safer place through demining and road construction to revitalize
the regional industry and build elementary schools for future generations. These support activities, as contributions to peace and development, can only be provided by Komatsu.

Komatsu employees visit schools in Japan to give lectures and sharedetails about these activities with younger generations, from elementary school children to university students. After a lesson at a senior highschool, one student commented that he had a clearer picture of what
he should do to realize his dreams, while another said she wanted tofind out how she could become a person who in some way contributes
to society. We will continue to offer visiting lectures to inspire young
people by example, helping them to take an initial step toward promising futures.

Construction of the sixth Komatsu elementary school wascompleted in March 2015.

Visiting lecture at a senior high school

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

Providing Basic Education

Supporting Children's Education

Social Contribution Activities

Support for Developing Human Resources

Providing instructors

Growing with Society

Using the know-how cultivated through our core business, Komatsu is
supporting development of the kind of human resources that are needed, not only internally by our company, but for local communities.
Expectations for human resources can vary greatly from community tocommunity. At Komatsu, as we do business on a global scale, we try tounderstand what each community needs and work on providing that
support accordingly, in various areas and in different forms.
The pyramid graph below shows the different areas in which Komatsu is supporting human resource development. It also shows that thecloser you get to the top of the pyramid, the more closely linked theprogram is with Komatsu businesses. The base of the pyramid shows
our active support of activities such as science classes in elementary
schools, mainly in different parts of Japan, the U.S.A. and Europe. The
next level up is to provide basic education, which is support given to
people who cannot or were not able to receive the level of educationnecessary to find employment, due to circumstances specific to thecountry or region. We currently run such programs in Chile and South
Africa. At the next level, we support universities and vocational training
schools in many regions by providing Komatsu's curriculum and equipment, as well as instructors. At the top of the pyramid, we are working
with national and local governments and with our customers to develop human resources, particularly in regions where human resource
development is a social challenge.
The actual content of the support given includes Komatsu providing instructors and trainers; providing teaching materials, equipment and facilities; accepting apprentices; and various other means through which
the daily cultivated know-how can be put to best use.

Developing People

Developing Human Resources Tailored to Regional
Needs Worldwide

Enhancing Quality of Life

Developing People Needed by the Community

Results (Cumulative Total by FY2014)

Demined area

1,007 haRoad construction

33km

Schools constructed

6

School children supported

414

Training for instructors carried out at the Komatsu Techno
Center in Shizuoka Prefecture27

CSR DIGEST 2015

CSR DIGEST 201528

Corporate Profile

Editorial Policy

Company Name

Income and Income Ratio

Komatsu Ltd.

Net Income（attributable to Komatsu Ltd.）

Operating Income

Main Businesses

Billion JPY

Manufacture and sale of construction and mining equipment,utilities, forest machines and industrial machinery

（%）

300

12.3

200

211.6

2-3-6 Akasaka, Minato-ku, Tokyo, Japan

150

126.3

Net Sales (Consolidated)

100

Sales to Outside Customers (by operating departments)

50

1,884.9

2,000

1,500

Construction, Mining and Utility Equipment

1,953.6

11.0%

11.0%

89.0%

89.6%

89.0%

2012

2013

242.0

159.5

154.0

6

2

FY

2012

2013

2014

0

2014

Japan

North America

Europe, CIS

Latin America

Asia, Oceania

Middle East, Africa

China

FY 201246,730FY 201347,208FY 201447,4170people10,00020,00030,00040,00050,000

Number of Operations
6%

Middle East 4%
Oceania

8%

Asia

12%

China

6%

CIS

3%

FY2014
Sales of theConstruction,
Mining and Utility
Equipment Department
JPY 1,761.3 billion

Japan

19%

North America 19%
Europe8%

Latin America 15%

External Evaluations
Commendations from Assessment Bodies
・Selected for inclusion in the Dow Jones
Sustainability World Indices (DJSI Worldand DJSI Asia Pacific), SRI indexes developed by S&P Dow Jones Indices (U.S.)
and RobecoSAM (Switzerland)
・Selected for inclusion in the index ofcompanies recognized for their contribution to sustainable development by NYSE
Euronext and Vigeo
・Selected for inclusion in the listing of SRI
issues developed by Morningstar

29

CSR DIGEST 2015

Annual Securities Report(Financial conditions)

CSR Report(Social activities)

Environmental Report(Environmental performance)

Number of Employees by Region

Sales of the Construction, Mining and Utility Equipment Department
by Region
AfricaKOMATSU REPORT(Integrated reporting)10

1,978.6

10.4%

500

FY

12
240.4

4

1,000

0

Organization of Komatsu’s Annual Reports

80Industrial Machinery and Other

14

12.2

11.2

250

Head OfficeBillion JPY

Operating Income Ratio

We at Komatsu Ltd. prepare KOMATSU REPORT annually by focusing our attention on the most important information and expressing it in a concise manner. Concerning financial conditions, environmental conservation and corporate social responsibility, we prepare the respective reports inmore detail and disclose information therein.

• Number of Komatsu Group companies (includes Komatsu Ltd.): 177• Number of production operations for the Construction, Mining andUtility Equipment Department: 39• Number of distributors for construction and mining equipment: 215• Number of distributors for forklift trucks: 147

・Rated as “Prime” among 35 machinerycompanies in the December 2009 social
responsibility ratings by Oekom, aGermany-based independent CSR assessment company◦ The “CSR Digest” is an abridged report of our CSR activities. Komatsu’s website will give you comprehensive information on our CSR activities.
We also disclose “KOMATSU REPORT” as an integrated report and “Environmental Report” as a report of our environmental activities.
KOMATSU REPORT:
http://www.komatsu.com/CompanyInfo/ir/annual/html/2015/
CSR Report:
http://www.komatsu.com/CompanyInfo/csr/2015/
Environmental Report:
http://www.komatsu.com/CompanyInfo/csr/ environment/2015/◦ These reports principally cover data for the period from April,2014 to the end of March 2015, with some nonperiodic information on continuing
efforts.
◦ Date of most recent previous report is July 10, 2014. We disclose these reports every July and next issue will be published in July, 2016.
◦ These reports contain Standard Disclosures from the GRI Sustainability Reporting Guidelines. You can see a list of the Standard Disclosures andtheir location in our report from our website.
http://www.komatsu.com/CompanyInfo/csr/2015/outline/outline10.html

External Evaluations for CSR Activities (FY2014)

August・Selected as a leading company of the
CDP Japan 500 Climate Performance
Leadership Index (CPLI) and Climate
Disclosure Leadership Index (CDLI) by
CDP
・Selected as one of 40 “2014 Nadeshiko
Brand” companies by Japan's Ministry of
Economy, Trade and Industry and theTokyo Stock Exchange
・Selected as one of 15 companies excelling in ESG by the Tokyo Stock Exchange
as part of its “+YOU” project supporting
Japanese economic growth

September

2014

Received the Minister of Education, Culture, Sports, Science andTechnology Award of Merit in the 12th Industry-Academia-Government Collaboration Awards for Connective Innovation
Selected for inclusion in the Dow Jones Sustainability Indices(World and Asia Pacific)

OctoberRanked 1st in the Machinery sub-group (out of 20) in the Securities Analysts Association of Japan's “2014 Awards for Excellencein Corporate Disclosure”

October

Selected by CDP for “Climate Performance Leadership” and“Climate Disclosure Leadership” in the CDP Japan 500 report for2014

NovemberRanked 17th overall (out of 538 companies) under the “NICES”
company rating system by Nihon Keizai Shimbun, Inc.

January

Ranked 8th (out of 419 companies) in the Manufacturing Sector
in Nihon Keizai Shimbun's 18th Environmental Management
SurveyJanuary

KFL Series fiber laser cutting machine received the Japan Machinery Federation Chairman's Award in the 2014 Energy-Efficient
Machinery Award

February

Ranked 23rd (out of 3,800) in the Nikkei Business “Excellent
Companies”

March

Ranked 1st (out of 624 companies) in the IntegreX survey

March

Ranked 5th (out of 1,305 companies) in Toyo Keizai's 9th “CSR
Company Ranking”

March

Selected as a “2014 Nadeshiko Brand” company that excels inpromoting career development for womenMay

Selected for inclusion in the “Euronext Vigeo World 120” index

2015

CSR DIGEST 201530