Enhancing
Qualityof LifeDeveloping
PeopleGrowingwith
Society

CSR & Environmental
Report2018
Digest

The main text of this pamphlet was
printed on paper made with wood fromforest thinning"Morino Chonai-Kai"(Forest
Neighborhood Association)-Supporting
sound forest management

2-3-6, Akasaka, Minato-ku,
Tokyo107-8414, Japan
https : // home.komatsu/en/
CSR Department
Environmental Af fairs Department
Phone :81- 3-5561-2799
Fax: 81-3-3505-9662

Concept of CSR activities
Enhancing Quality of Life

Contents

Editorial Policy / Corporate Profile ………………………………………… 03

Concept of CSR activities
Special Story1: Part of our DNA ……………………………………………… 06
CSR Theme and Key Business Activities ………………………………… 08

CSR &Environmental
Report 2018
DigestEditorial Policy

Message from Top Management ……………………………………………… 04

The Komatsu Report is a concise report created annually, focusing on the most vital information concerning
the Komatsu Group's corporate activities. This CSR & Environmental Report is a compilation of Komatsu's
initiatives in the realm of CSR and environmental issues. A comprehensive report regarding Komatsu's CSR
activities can be seen from our website.

Incorporating CSR into Management ………………………………… 09
Comparison with Global Principles ………………………………………… 09

Organization of Komatsu´s Annual Reports

Komatsu's CSR and SDGs (Sustainable Development Goals) ……………………… 10
Organization to Promote CSR ……………………………………………… 10
Dialogue with Our Stakeholders …………………………………………… 11

KOMATSU REPORT

External Evaluations …………………………………………………………… 11(Integrated reporting)Major Achievements and Mid-term Plans ………………………………… 12
Theme 1 : Enhancing Quality of Life

Developing People-Providing products required by society-

Special Story2: Part of our Way …………………………………………… 14

Annual Securities Report

Product Safety -Increasing Safety by Innovation- ……………………………… 16(Financial conditions)(Social activities & Environmental
performance)

Quality and Reliability - Responsible Commitment to Customers - …………… 17
Occupational Safety and Health …………………………………………… 18
Pursuing Environmental Management …………………………………… 19
Amount of CO2 Emissions by Scope 3……………………………………… 25

Growing with Society

Mitigating Climate Change through Products and Services ………… 26
Initiatives to Mitigate Climate Change in Business Operations ………… 28
Promoting Recycling …………………………………………………………… 30
Feature Article: KMC's Environmental Sustainability Program ……… 32●

KOMATSU REPORT https://home.komatsu/en/ir/library/annual/

CSR & Environmental Report 2018 covers data for theperiod from April 2017 to the end of March 2018, withsome non-periodic information on continuing efforts.
Quantitative information included in environmental
portion has received an independent practitioner's

Theme 2 : Developing People

Social Contribution Activities●

CSR＆Environment (Website) https : // home.komatsu/en/csr/

assurance from Deloitte Tohmatsu Sustainability Co.,
Ltd., an affiliate of the Deloitte Touche Tohmatsu LLC.
(Information assured by an independent practitioner
can be viewed on our website.)

Corporate Profile

Personnel Policy and Performance Appraisal System ………………… 34
Diversity Initiatives …………………………………………………………… 34
The KOMATSU Way …………………………………………………………… 35
Employee Training Structure ……………………………………………… 35
Enhancing Work-Life Balance……………………………………………… 36
Strengthening Our "Gemba" Capability ……………………………… 37
Theme 3 : Growing with Society
Risk Management ……………………………………………………………… 38
Compliance ……………………………………………………………………… 39
Corporate Governance ………………………………………………………… 40
Support for CSR Initiatives of Business Partners …………………… 41
CSR Procurement Guidelines ………………………………………………… 42
Biodiversity ……………………………………………………………………… 43

Company Name

Komatsu Ltd.

EstablishedMay 13, 1921

Head Office

2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan

President andChief Executive
Officer

Tetsuji Ohashi

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

Common Stock

Consolidated 2,501.1 billion yen

Komatsu Group

Komatsu Group consists of Komatsu Ltd., and 266
other companies.
・Consolidated Subsidiaries 227
・Companies accounted for by the equity method 38
・Komatsu Ltd. 1
・Total 266

Social Contribution Activities
Special Story3: Part of our Impact ………………………………………… 46
Social Contribution Activities ……………………………………………… 48
Developing People Needed by the Community ……………………… 50

Number ofOperations

Number of
Employees

CSR & Enviromental Report 2018 Digest

・Consolidated 67,870 million yen
・Non-Consolidated 70,120 million yen
・Total Number of Shares Issued and Outstanding
971,967,660 shares
・Number of Shareholders 149,459

Net Sales

Environmental Risk Management ………………………………………… 44

2

CSR & Environmental Report

・Manufacturing Operations of Construction,
Mining and Utility Equipment (Number ofOperations)：93
・Sales Operations of Construction, Mining andUtility Equipment (Number of Operations)：100
・［Consolidated］59,632
・［Non-consolidated］10,465

Sales to External Customers (by operating departments)( Yen in billions )2,500.0

2,501.1
7.4%
2.0%

2,000.0
1,854.9
11.7%
2.7%

1,500.0

1,802.9

90.6%

10.5 %
2.6 %

1,000.0
85.6 %

86.9%

500.0
0

2015

2016

Construction, Mining and Utility Equipment

2017

(FY)

Retail FinanceIndustrial Machinery and Others

Sales of the Construction, Mining and Utility Equipment by Region
Africa 5%

Middle East 2%
Oceania 8%
Asia 13%China 7%
CIS 5 %
Latin America 14 %(Billion of yen)Japan 14%
FY2017
Sales of theConstruction,
Mining and Utility
Equipment
2,267.3 billion
yenNorth America 24%

Europe 8%

CSR & Enviromental Report 2018 Digest
25,0113

Message from Top Management

Contributing to the development of a sustainable
society through efforts geared towards ESG
Management with an emphasis on ESG
In FY2017, we expanded our mining equipment business by welcoming a major mining equipment manufacturer in USA, Joy Global Inc.(now Komatsu Mining
Corp.), into the Komatsu Group.
Responding to ESG (Environmental, Social, Governance) issues, we seek to develop solutions that utilize
our unique strengths in ICT and IoT. These include measures like " SMARTCONSTRUCTION " and the " Autonomous Haulage System(AHS)". We have made efforts toenhance safety and productivity of jobsites while simultaneously reducing the burden on the environment.
FY2018 is the final year of our three-year mid-range
management plan "Together We Innovate GEMBAWorldwide - Growth Toward Our 100th Anniversary(2021) and Beyond - ". As we move towards 2021, weplan to focus on "Growth Strategies based on innova-

tion", " Growth strategies of existing businesses", and"Structural reforms designed to reinforce the businessfoundation " to accelerate growth. By linking thesemanagement strategies with ESG activities required bysociety, we hope to build a brighter future that marks
the celebration of our 100th Anniversary in 2021 andbeyond.
Furthermore, we aim to contribute to the "Sustainable
Development Goals (SDGs)", a collection of common
objectives established by the international community,
to further strengthen our ESG efforts. Through extensive
discussion among our management team, we selected
five SDG goals that were most relevant with our business operations. By focusing on these goals, we believe
we will be able to comprehensively contribute to theadvancement of the SDGs.

SDGs highly relevant with our business

SDG Goal 8 ：Decent Work and Economic Growth
SDG Goal 9 ：Industry, Innovation, and Infrastructure
SDG Goal11：Sustainable Cities and Communities
SDG Goal 13：Climate Action
SDG Goal17：Partnerships for the Goals
Symbolic social and environmental activities
This "CSR＆Environmental Report 2018" consolidates all
non-financial information into a single report. We havehighlighted three symbolic social/environmental activities in special stories , which relate to the actual locationsof our business operations.
Nurturing the Next Generation
The spirit of "coexistence with local communities" and"human resource development" is of particular importance to Komatsu's management principles. Throughthe perspective of "people" rather than "products", weintend to convey our business philosophy that has been
inherited since our foundation over a century ago to today, and beyond.

4

CSR & Enviromental Report Digest 2018

Leading the Way at Awazu Plant
Energy resource is indispensable for our business operations. With this in mind, we have worked closely withlocal communities to come up with ways by which ourelectricity consumption should be managed considering
desirable form of our environmental efforts. Actual cases
can be explored through power reduction activities at
our Awazu plant and its biomass cogeneration facility.
Fostering Community Growth in Cambodia
Since 2008, we have been supporting anti-personnel
landmines removal and reconstruction activities in Cambodia. We would like to report the local daily activities
that are carried out alongside our partners, hoping tocreate a safe and comfortable living environment for villagers in Cambodia.

Tetsuji Ohashi, President and CEO

Creating new value with our customers
It goes without saying that the quality and reliability of
products is important for any manufacturer that deals
with machines. However, it is my belief that businesses
focusing solely on quality and reliability will become
difficult to sustain in the long run. Through thoroughdialogue with our customers, we wish to envision the
future they seek to realize together, which should lead

us to genuine "New Value".
How will the future change? What roles will company,
industry and society take? We believe deepening suchdiscussions will enable us to materialize products, services and solutions that are in need, and to further promote activities toward value creation.

Actions based on SLQDC
In today's society where the impact of corporate responsibility has become more significant than ever, it iscritical for every individual employee to be fully awareof "corporate social responsibility". This applies not onlyin the narrow sense of complying to law, but also in
broader sense of following business and societal rules
in general, thus allowing us to meet the level of trust demanded from society.
Whenever our employees face uncertainty or confusion in making decisions, they are advised to use the"SLQDC" as a frame of reference. The "SLQDC" is anacronym for Safety (safety and health), Law (generalcompliance with the law/compliance with environmental regulations), Quality (quality and reliability), Delivery(timing), and Cost. I believe safety and health should always come first in day to day operations, whether it is aninternal/affiliated entity or not.
Finally, Komatsu considers "corporate value" to be thetotal sum of trust given to it by society and all its stakeholders. Through constant adherence to this guideline,
we will further strengthen our efforts towards ESG inorder to reach the targets set by our March 2019 midrange management plan and the 100th anniversary
in 2021, and beyond. In addition, while actively participating in initiatives such as the United Nations Global
Compact and World Business Council for Sustainable
Development (WBCSD), we will fulfill our responsibilities
as a global company for society and the environment.
July 2018
Tetsuji Ohashi
President and CEO

Komatsu has signed the United Nations Global Compact (UNGC).
Read p.9 for more information about the ten principles advocatedby UNGC and how they pertain to Komatsu's initiatives.

Komatsu has joined the World Business Council for Sustainable Development (WBCSD).

CSR & Enviromental Report 2018 Digest

5company in 2000. "We use the site's Genki-Satoyamaclasses for children at Komatsu-no-Mori. Starting in 2011

nature preserve to help knowledge take root."with 20 retirees, Orimoto and his peers each came up

Ranging in age from 65 to 93, the members of Yoshi-

with topics they could teach and developed a curricu-

da's Komatsu retiree group are all connected in somelum.
Classes are held at the Waku-waku Komatsu Kan, away through familial ties. Yoshida's father worked at thecompany, and now his son is also "a Komatsu man."recreation of the company's original head office build-

These close family and business connections are com-ing, which features classroom space upstairs, and a

mon in Ishikawa Prefecture, Japan; home to Komatsu-

children's museum and play area below. The facility was

no-Mori, the KOMATSU Way Global Institute and theKouji Orimoto , a lecture of Komatsu-no-moribuilt at a former Komatsu plant site, in honor of the company's 90th anniversary in 2011.

company's manufacturing plants in Awazu and Kanazawa.

plant, during which he and the other trainees "received"We want the children to work at Komatsu someday,"Long after one's official work at Komatsu ends, the com-

To see these connections continue to grow and thrivea lot of support from senior members of Komatsu," heOrimoto said. "Through Monozukuri learning we sharepany's founding spirit of commitment to community

nearly 100 years after Komatsu's origin is a fitting tributesaid.

with them about quality, reliability and manufacturing

growth lives on in each employee and the lives theyto Takeuchi, who founded Komatsu Ltd. with a passion

touch.

for developing people.

Learning about process management, machine engi-

craftsmanship."neering, sales and production systems "laid the founda-

An average of 240 students in grades 3 through 6 at-

Komatsu's founder, Meitaro Takeuchi, established the"We have grown with the company," said Junji Kawasa-

tion for the rest of my career," Itao said, "Komatsu has atend science classes at Komatsu-no-Mori each year. They

company nearly 100 years ago in Komatsu City, Japan,

ki, head of the Kushi neighborhood district association.

real commitment to training its employees."

recently added an advanced class for select 5th and 6th

to sustain area residents dependent on the depleted Yu-"Community and company growing together. From theSome of the people he was in training with went on

graders. The program's retiree instructors also volunteer

senji Copper Mine he previously managed.

viewpoint of human development, Komatsu is fulfilling

to become the next generation of Komatsu leadership,at other schools approximately eight times a year.

Inspired by the leading-edge technologies he saw inthat connection to the founding principles. Person towho he then continued to work with through his work

Europe, Takeuchi began focusing his efforts on develop-

person, an exchange is built."

at family's company.

ing industrial technologies and the resources to create
them, locally.

As set forth in The KOMATSU Way, the company's guid-"Having colleagues and business associates that start-

ing principles handed down through generations, theed at the same time as me and went through the same

In advance of a Japanese educational mandate set totake effect in 2020, the Komatsu-no-Mori instructors also
started coming up with ways to teach the children aboutprogramming.

He knew the importance of education," said Akinori

core of Komatsu's founding philosophy includes contrib-

training has been very valuable," Itao said. "We share the

They use basic models of the company's hydraulic ex-

Maeda, who worked at Komatsu for 42 years. "He knew

uting to the sustainability of local economies throughsame mentality."

cavators and mining trucks that students can program to

the Yusenji Copper Mine would eventually be depleted,technology development and job creation.

and he had a vision of what to do - how to move society

For Masayuki Itao, the president of Itao Iron Works, asential to Komatsu. Though it literally translates as "man-forward."

Komatsu supplier, the company has been influential inufacturing," Monozukuri encompasses teamwork activ-

For Mr. Yoshida, getting the chance to nurture the next

It's a mentality that relies on the Monozukuri spirit es-

Concept of CSR activities

45 years at the company, to start offering free science

Enhancing Quality of Life

Nurturing the
Next Generation

Kouji Orimoto, who retired from Komatsu in 2009 after

Developing People

DNA"Our motto is to teach children while we enjoy ourselves," said Susumu Yoshida, who retired from the

Growing with SocietyPart of our"The desire to share Monozukuri learning inspired

teaching local children about science and nature.

move; incorporating Komatsu's end products with foundational learning.

Akinori Maeda, who retired from Komatsu in 2004 andboth aspects. Itao's grandfather and father both worked

ities performed by all members of the Komatsu family,

generation at a place where the original Komatsu facto-

now volunteers at the company's Komatsu-no-Mori site

at Komatsu before founding and incorporating, respec-

including internal divisions and external partners.

ry once stood has a certain romance to it.

for children and families, said he and other retirees feeltively, Itao Iron Works. Itao went through a three-year

It includes the wisdom collected and shared by all. "In"We want kids to come and be interested in sciencea connection to Takeuchi's vision through their work

Komatsu training program at the company's Osakaorder to maintain quality, it's important to learn from se-and nature," he said, "to blossom.

nior members," said Tadahiro Naka, who spent 50 years

Social Contribution Activities

Social Contribution Activities

Growing with Society

Developing People

Enhancing Quality of Life

Concept of CSR activities

Special Story

as a welder at Komatsu before retiring. He now instructs
high school students, teaching them the welding tradesenior members of the company taught him.
"I succeeded in this business because of the enthusiasm from older generations," he said. "Those whoare motivated can learn quickly. I was told, 'Don't fear
making mistakes. The gemba should always be the bestplace to improve."Though technology has changed significantly over
the years and the welding shop he once ran at Awazu
is now automated in some areas, the wisdom collectedfrom years past remains invaluable.

Yoshinobu Hirai, a retieiree teaching juvenile"There are robots doing some of the work now," Naka
said. "But it is indispensable to still have the basic understanding of how to do things. It enables the best use of
cutting-edge technologies.

6

CSR & Enviromental Report 2018 Digest

CSR & Enviromental Report 2018 Digest

7and stakeholders. Out of those, Komatsu's CSR material
issues were determined. By focusing on these material
issues, we believe we can maximize our social
contribution by leveraging our core strengths as an
equipment manufacturer.

= Our CSR Priorities● Issue A● IssueC

Management
Policy● IssueD● IssueF● IssueE

Business
Domain● IssueB

Importance to Our Business →Enhancing the trust
placed in us
by society→Further growth Management

Strategy

Formulating CSR Themes and Key Business Activities

The
KOMATSU Way

Based on our priorities, we identified three material CSR themes, and through dialogue with BSR (Business for Social
Responsibility), a third party non-profit organization based in the U.S.
Komatsu's CSR Themes●●●

Enhancing Quality of Life
- Providing products required by societyDeveloping People
Growing with Society

In order to achieve our goals for each of the three areas,
we have determined priority activities that align with

Enhancing Quality of Life

-Providing products requiredby society -Developing People

Growing with Society

the mid-term management plan as“activities throughour core businesses”. In addition to its main business,
Komatsu believes it is the responsibility of a businessto engage in“social contribution activities”in the local
community where business is conducted. Komatsu is
engaging in the following social contributory activities
that make the most of the know-how developed in our
main business.

Corporate
Citizenship

Demands of Society

Committed to“Quality and Reliability,”Komatsu strives to maximize its corporate value
by providing products that customers are happy to own.
“Corporate value is the sum of trust given to us by all our stakeholders”
By focusing on construction and mining equipment, and industrial machinery, we will
work for sustainable growth that minimizes negative environmental and social impacts.
Mid-range Management Plan (FY2016-FY2018)“Together We Innovate GEMBA Worldwide: Growth Toward Our 100th Anniversary (2021) and Beyond”
・Growth strategies based on innovation ・Growth strategies of existing businesses
・Structural reforms designed to reinforce the business foundation ・Paying attention to ESG
Values, basic attitudes and patterns of behavior to be passed on to future generations.
1. To further cultivate the forward-looking corporate climate and the corporate culture of continuously
taking on challenges, we will thoroughly ensure group-wide practice of ﬁve Gen principles, i.e.,
Gemba (workplace), Genbutsu (actual things), Genjitsu (reality),Genten (the origin) and Kenzaika(making evident).
2. To anchor The KOMATSU Way, we will strengthen our Gemba capability through Kaizen activities inour routine work.
3. We will focus our efforts on brand management activities designed for us to thoroughly understandcustomers' Gemba and become indispensable for customers.
(Supporting customers to achieve their ideal conditions)

Implementation ofmanagement policy→ Contributing
to society

Is management inline with societal
demands?
→ Always monitor

Code of Worldwide Business Conduct
・Rules that Komatsu and its management and employees must abide by as a member of the business society
・Statement to society as a“responsible corporate citizen”＜Policies, Standards, Principles＞
・5 Principles of Compliance ・Earth Environmental Charter・Declaration of Biodiversity
・Global Policy of Human Resources
・Occupational Safety and Health Policies ・Standards for Product Safety
・Principles Governing Quality Assurance ・Basic Principles for Social Contributions
・Regional Policies, Standards by Countries, etc
Komatsu's CSR Themes
1. Enhancing Quality of life - Providing products required by society - 2. Developing People
3. Growing with Society
Global Principles
・The UN Global Compact ・ISO26000 ・GRI ・Keidanren Charter of Corporate Behavior
・The UN Sustainable Development Goals (SDGs)

Comparison with Global Principles

Concept of CSR activities

for SDGs (Sustainable Development Goals). In addition,
we will understand social issues through interactive
dialogue with stakeholders and will carry out exclusive
efforts.
In our social contribution activities, we pay due
attention to prevailing issues in the regions where we
operate while carefully considering how we can apply
our strengths to undertake "activities with a human face"that are uniquely associated with Komatsu.

Principles and ISO 26000, as well as international goals

Enhancing Quality of LifeCSR Issues of Importance toboth our Business and Stakeholders

public expectations and requirements throughout theexecution of our business activities, while deepening
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 order to know the demands of society, we seek
to adhere to not only various international guidelines
such as GRI Guidelines and the Keidanren Charter ofCorporate Behavior, but also to international standards

Developing People

We evaluated CSR issues based on the degree ofimportance to our business shown on the horizontal
axis, and the degree of importance to our stakeholders
shown on the vertical axis.
The social issues placed in the top right quadrant
are considered to be the social issues (=CSR material
issues) of importantance to both Komatsu's businesssuch as the United Nations Global Compact- 10

Growing with Society

Evaluating CSR issues

Having clearly defined our CSR themes and key
activities, we consistently confirm that Komatsu meetsSocial Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society

In 2009, we assessed our CSR activities in terms of their valuation and meaning through a societal perspective, andwere proud to recognize that every one of our activities has contributed in a meaningful manner to societal needs.
We are aware of the need for reliable fulfillment of our social responsibilities, and thus believe that it is necessary to
first determine what both society and Komatsu considers to be of the most value. Through these determinations, weformulated our CSR material issues in.

What Komatsu considers to be material issues are listed in our CSR Priorities, each of which are in line with international
standards such as the ISO26000 and the United Nations Global Compact.
Key Business Activities

CSR Themes

8

Incorporating CSR into Management

Putting together Komatsu's CSR focus areas← Importance to Our Stakeholders

Social Contribution Activities

CSR Theme and Key Business Activities

Activities through the core businessSocial Contribution Activities

・Provide products and services that contribute to the development of
infrastructure and improvements in quality of life
・Improve production/safety, as well as promoting efficiency and・Promoting environmental efficiency & safety through initiatives notenergy conservation through innovation
directly related to the business・Improve environmental efficiency at operation sites and facilities
・Providing products, services, know-how required by society for free・Reduce the environmental load throughout the product life cycleof charge
・Improve safety (for customers, society, employees, business
partners)
・Human resources development through the KOMATSU Way(employees, business partners)
・Human resources development through our Brand Management
initiative (employees, distributors)
・Respect for employees, diversity

・Support the development of people in local communities
・Development of next generation

・Engage in dialogue with our stakeholders
・Strengthen our corporate governance and compliance
・Promote compliance with environmental, labor and social norms
within our group and among business partners

・Disaster Relief
・Social Contribution utilizing core strength and know-how

CSR & Enviromental Report 2018 Digest

ISO26000 core subjects/issues

UNGC 10
Principles

Komatsu's CSR Priorities
・Corporate Governance・Compliance・Collaboration with business partners
to comply with social regulations

Organizational
Governance

Human Rights

Human Rights
Principle 1
Principle 2・Respecting human rights
・Collaboration with business partners
to comply with social regulations
・Development of local communities
・Disaster relief
・Improving local residents' quality of life

Labour Practices

LabourPrinciple 3
Principle 4
Principle 5
Principle 6・Equal employment
・Safety and health・Human resource development
・Collaboration with business partners
to comply with social regulations

The Environment

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

ISO26000 core subjects/issues
Fair Operating
Practices

UNGC 10
Principles

Komatsu's CSR Priorities

Anti-Corruption
Principle 10・Corporate governance・Compliance・Collaboration with business partners
to comply with social regulations

Consumer Issues

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

Community
Involvement andDevelopment

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

CSR & Enviromental Report 2018 Digest

9Customers

Decent work &economic growth

Industry Innovation &Infrastructure

Sustainable cities

SDG Targets（which have strong ties with Komatsu business）● We strive for increased employment and job creation in regions
where we operate by utilizing our human resource and skills
development know-how cultivated in our business.
We place top priority in providing a safe and rewarding workplacefor our customers' employees worldwide.

・Achieve full and productive employment and decent work
・Reduce youth not in employment, education or training
・Achieve higher levels of economic productivity through diversification,technological upgrading and innovation
・Improve resource efficiency in consumption and production

・Develop resilient infrastructure to support economic development and● We enhance productivity, safety and reduction of the environmental
human well-being
impact of our customers' business by providing innovative and・Promote inclusive and sustainable industrialization
environmentally sound business solutions.
・Upgrade infrastructure with greater adoption of clean and
We collaborate with business partners and stakeholders, including
environmentally sound technologies and industrial processes
our customers, towards advanced technology contributing to sustainable ・Encouraging innovation and sustainability increasing the number of
infrastructure and energy/resource development.
research and development workers per 1 million people and public
and private research and development spending● We contribute to bringing industrial vitalization and enhancementof quality of life through our Dantotsu(Unrivaled)Products, Services andSolutions which accelerate sustainable infrastructure development andurbanization.
● We support development of cities resilient to natural disasters andprovide disaster relief Komatsu equipment and core business skills.

・Provide access to sustainable transport systems (infrastructures,
including roads)
・Enhance inclusive and sustainable urbanization
・Reduce the environmental impact by waste management
・Reduce the number of people affected by disasters● We commit to reduce carbon emissions and environmental impact
throughout our value chain.
We increase efficiency and reduce energy use through innovation.

・Strengthen resilience and adaptive capacity to climate-related hazards
and natural disasters
・Raising capacity for effective climate change-related planning andmanagement focusing on women, youth and communities● We engage with stakeholders to understand societal needs and takeaction.
We foster actions complying with social, environmental and working
condition norms including our business partners.
We work towards social solutions through open innovation, academicindustrial collaborations, and partnering with customers, distributors,
suppliers and local communities.

・Enhance regional and international cooperation on and access toscience, technology and innovation
・Enhance knowledge sharing through a global technology facilitation
mechanism
・Enhance the global partnership for sustainable development
complemented by multi-stakeholder partnerships

Climate change

Partnerships● Enhancing Quality of Life ● Developing People

Business Partners

As needed

Distributor meetings in each region

Annually

Meetings with the President

Semiannually

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

As needed

Dialogue with the labor union and employee
representatives to improve the workplaceenvironment

Regular Meetings between Management andLabor 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

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

Komatsu Science and Technology Collaboration
Council

Biannually

CEO and CFO explanation of businessperformance, policies and strategies

IR Meeting

Japan: Daily
USA and Europe: Annually

Respond to inquiries and SRI surveys

SRI Surveys

Daily

CEO and CFO explanation of businessperformance, policies and strategies

Shareholders Meetings

2-3 times a year, held in Japan

Plant tours and explanation of operations

Plant tours for shareholders

About twice a year in Japan

Explanation by the President businessperformance, policies and strategies
Employees

3 times a year

Local Community

Industry-Academia
Collaboration
Partners

Investors

Individual
Shareholders● Growing with Society

Organization to Promote CSR
Committee

Various meetings with Midori-kai

Explanation by the President on businessperformance, policies and strategies

Distributors

Daily

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

The SDGs, officially known as The 2030 Agenda for Sustainable Development is a set of 17 goals with 169 targets covering a broad range of sustainable development issues,
which was adopted at the United Nations General Assembly in September, 2015.

Organization

Daily

Collaborate to resolve issues in society and in
the regions where we operate, and participate inlocal activities
President explains business performances,
policies and strategies

Komatsu Business/CSR

Brand Management Activities

Frequency

External Evaluations
Commendations from Assessment Bodies

Area of CSR Oversight

Executive Officer Supervising CSR
CSR Dept.

CSR Committee
CSR Steering Committee

President and CEO

Overall CSR・Social Contribution

Environmental Affairs Dept.

Earth Environment Committee

Environment

Compliance Dept.

Compliance Committee

Compliance

KOMATSU Way Global InstituteKomatsu Way Committee

Developing Human Resources

Risk Management Committee

Risk Management

Information Security Committee

Information Security

Internal Audit Dept.
General Affairs Dept.

Internal Auditing

Legal Dept.

Compliance with Laws

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 DivisionCorporate-level Product Safety Committee

Safety & Health Admin Dept.

Group Health and Safety Committee

Procurement Div.
Business Coordination Dept.

Business Division

10 CSR & Enviromental Report 2018 Digest

External Evaluations for CSR Activities (FY2017)
2017
April

Certified as SBT（Science Based Targets)

September

Listed on the Dow Jones Sustainability Index list of companies

July

Selected for inclusion in the FTSE Blossom Japan Index Component

October

Certified as CDP“Climate Change”and“Water”A List Company

Product Safety

July

Selected as a MSCI Japan ESG Select Leaders Index

December

Chosen to be a Euronext Vigeo World 120 index

Health and Safety

July

Selected as a MSCI Japan Empowering Women Index

December

22st IR Excellent Business Prize awarded

Ranked fourth (among 1,413 firms) in the 12th“CSR Firm Ranking”
compiled by Toyo Keizai Inc.

March

Chosen on the“Nadeshiko Brand 2017”list, or a list of firms
supporting active promotion of women

Procurement
IR Steering Committee

Investor Relations (IR)Corporate Governance

Subsidiaries / Offices

Concept of CSR activities

Collaborate to realize customers' goals and fulfill
corporate responsibility

Co-relation between SDGs and Komatsu Business/CSR
SDG Goals

Examples of Meetings and Activities

Enhancing Quality of LifeESG into the Mid-range Management Plan, we re-examine the relationship between Komatsu's business and CSR
initiatives, reveal the direction we are currently taking, and how Komatsu's CSR activities link to the SDGs (Sustainable
Development Goals) adopted by the United Nations as a common goal aimed at by the international community.

Purposes

Developing People

Stakeholders

the Mid-range Management Plan in April 2016 which stated that Komatsu places emphasis on ESG. In incorporating

Growing with Society

In light of the emphasis on corporate efforts towards ESG (Environmental, Social, Governance), Komatsu announced

SDGs (Sustainable Development Goals)

Social Contribution Activities

Dialogue with Our Stakeholders

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society

Komatsu's CSR and SDGs (Sustainable Development Goals)

2018
February

Implementation of CSR

CSR & Enviromental Report 2018 Digest 11

Enhancing Quality of Life

Providing products and services that contribute to
infrastructure development and improvement of qualityof life
Improving productivity, safety and efficiency, andenhancing energy conservation through innovations

Solution Business SMARTCONSTRUCTION - Partnership to increase the safety and productivity of construction sites -Fostering the enhancement of SMARTCONSTRUCTION as a core business

Expansion of launching construction equipment that respond tocomprehensive applications of ICT "i-Construction" advocated by Japan's MLIT

Sales expansion of ICT intensive machines in Japan, USA and Europe

Reduction in CO2 Emissions of Construction Equipment

Optimization of mining machine operations, and expanding scope of remote andunattended operations
Reinforcement of global presence in quarry and cement production business
Expanding lines of environmentally compatible models
25% of CO2 reduction per work volume (New models to be sold in FY2025 ascompared to FY2007)

Reduction of CO2 emissions in manufacturing in; Japan -39.2% (compared to FY2000)

Japan -57% (in FY2020 compared to FY2000)

Overseas -26.2% (compared to FY2010)

Overseas -32% (in FY2020 compared to FY2010)

Reduction of water consumption in Japan: -42.7% (compared to FY2010)

Japan -40% (in FY2020 compared to FY2010)
Overseas -10% (in FY2020 compared to FY2010)

Autonomous Haulage System（AHS）10th anniversary of commercial introduction
Tier4 Final Compliant Models Released

Improving environmental efficiency at operation sites andplantsReducing environmental impact throughout the productlife cycle

Mid-term Issues and Targets

Major Achievements for FY2017

Support for Agriculture with ICT・Promotion of rice field flattening and direct sowing
cultivation by multifunctional ICT bulldozers

Implemented reducing electricity usage project to suppliers (93 companies)
Water risk seminar for suppliers: Distribution of the best practice booklet related with water usage reduction（to 93 member firms of the Midori-kai）

Enhancing safety for society, customers,
employees and business partners

Follow-up action to suppliers that could not achieve the targets

Cardiopulmonary resuscitation training for all domestic Komatsu Group employees

All employees receive course training (Domestic employee attendance rate as of theend of FY 2017: 91.5%)

Promoting the Five-Year Health Development Plan in Japan (Lifestyle diseases, cancer, Tabaco and mental health)Continuation of the Five-Year Health Development Plan

Safety patrol in suppliers' sites (97 companies)

Continuation of safety patrol in suppliers' sites

Employee trainings (non-consolidated); Average hours per FTE: 58 hours
Continuation of Employee Training
Average spent per FTE: JPY 255 thousand

Enhancing our employees and suppliers through the
KOMATSU Way

Continued QC instructor trainings to oversea subsidiaries

Developing national employees as in-house KOMATSU Way instructors
Conduct surveys on understanding of The KOMATSU Way

Full-scale "Asia Training & Demonstration Center" in Thailand
Manufacturing skill competition (181 participants from 11 countries)

Improvement and expansion of Brand Management activities

Continuation of improvement and expansion of Brand Management activities

Enhancement of employees' work-life balance (Average days of paid leave taken per year: 19.4 days)

Continuation of enhancement of employees' work-life balance(less than 2,100 working hours per year, and at least 18 days of paid leave taken per year)

Holding female employee exchange workshops

Respect for employees, Diversity
Continuation of Career plan training for female employees
Promoting employment of persons with disabilities (Employment ratio : 2.50%, non-consolidated)

Continuation of creating workplaces that provide a sense of fulfillment such asactivity of Business Creation Center

Disaster relief
・Assistance to America in Hurricane disaster areas

Plant tours for individual shareholders (September to March, 526 participants)
Techno Center tours for individual shareholders (August, 212participants)
Continuation of communication activities

Growing with Society

Meetings for Individual Investors (11 cities in Japan, 1,045 participants)

Clearing anti-personnel landmines and reconstruction support
・1,735ha landmines removal in Cambodia. Total removal count

1,360 landmines, Road construction 61.8km, Ponds constructed 46,
Schools constructed 8 (cumulative total).

Plant Fairs (8 plants in Japan, 56,350 visitors)

・200ha Cluster bomb removal in Laos.

President meeting with employees and sharing Q&A session contents with global employees
Establishment of Komatsu Mining Corp.（April 2018）

・52,000 visitors (FY2017)

Promoting female employees (Ratio of employees in management positions:
8% in April 2019, 10% in April 2021)

Shareholders' meeting (December, 984participants)

Engaging in dialogues with our stakeholders

Komatsu-no-mori(science class provided by retired employees and flower fostering)

QC circle competition (94 cases from 14 countries)

Development of employees and distributors throughBrand Management initiatives

Local HR development in the areaof construction equipment and manufacturing
・Komatsu and Cummins collaborative program

Continuation of manufacturing skills development world-wide

Concept of CSR activities

Major Achievements for FY2017

Developing People

Key Business Activities

Growing with Society

CSR
Theme

Social Contribution Activities

Social Contribution Activities

Contributing to Society through Core Business

Enhancing Quality of Life

Komatsu's CSR themes, concrete initiatives of key business activities, and mid-term issues and targets are as follows.

Developing People

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Major Achievements and Mid-term Plans

Improve efficiency by integration, technological innovation, and strengthening ofdevelopment capabilities

Total removal count - 1,436 bombs

・Visiting lectures in Japan approximately 50 times, about 4,500 people

Conducting compliance and risk audit (575 offices)Strengthening our corporate governance and compliance
Conducting compliance training (17,800 employees)

Improve efficiency by integration, technological innovation, and strengthening ofdevelopment capabilities

Information provision through "Everybody's Compliance" (147 issues, March 2018)
Conducting safety patrol (99 suppliers)

Promoting compliance with environmental, labor, humanrights and social norms within the Group and among
business partners

Implementation of electric power consumption reduction activities (96 suppliers)
Continuation of individual activities based on "CSR procurement guideline"
CSR training (23 suppliers), Subcontracting Charges Law Training (312 participants from 181 suppliers)

Supporting Flower Association of Japan・Technical support to fostering flowers at Komatsu-no-mori・Donation of young cherry blossom trees to disaster areas of

the Great East Japan Earthquake (more than 5,600 trees, cumulative total)

Information provision through "CSR Bulletin" (118 issues, cumulative total)

12 CSR & Enviromental Report 2018 Digest

CSR & Enviromental Report 2018 Digest 13

capabilities.

areas of the machine. Employees can put their tool"It's such a small town, but Komatsu has a big presence,"boxes on the rotating floor and it will move with them,said local business owner Masayuki Itao, president of Itao

allowing them to concentrate on their assembly work.

Iron Works, a Komatsu business partner. "We are proudInstalling double-sided cranes allowed the facility

to have Awazu here."footprint to be shortened by 30 percent compared
to prior designs. The plant's overhead cranes also

One of the facility's primary energy reduction
mechanisms, a biomass power generation system,

Chipping equipment developed by Tagami Ex

contribute to the sustainability effort, generating energy

has created a microindustry in Ishikawa Prefecture;

When approached by the company about developing(converted into electricity) with every downward

sustaining new jobs and the creation of new equipment.

the woodchip equipment, Tagami initially thought

movement. The concept was inspired by the energy-"This was an important aspect of the overhaul of

they wouldn't be able to support the level of businesssaving mechanics of Komatsu's hydraulic excavators.

Awazu's facility," said Yoshihiro Toi, manager of theKomatsu sought to provide. But the Komatsu teams

Even the rollers used in the interior testing facility play

Manufacturing Engineering Department, "We created awere passionate about making it work and collaborated

a part: generating electricity that feeds back into the

Since 1938, our Awazu manufacturing plant in Japan's

property that was not only environmentally sustainable,with Tagami's teams to develop the new equipment

plant's power system. Solar panels on the roof add toIshikawa Prefecture has been a key supporter of local

but that could help sustain the surrounding community

required. That commitment as not only a businessthe self-generated energy that has allowed Awazu tobusiness and industry. One of the largest out of nine

as well.

partner, but as a supporter of sustainable technologies,

drastically reduce its public power consumption and

Komatsu Mother Plants worldwide, Awazu is a stan-"Since entering into an agreement with Komatsu in

led to mutual success.

serve as a shining example of Komatsu's commitment

dard-setting facility for Komatsu operations. The first2014 to supply the necessary woodchip fuel for Awazu's"It's very motivating for us, for our work," Tagami seniorbulldozers in Japan were manufactured there, and today

biomass cogeneration system, the local KAGA Forest

added, "to know the chips our machines produce areWith its commitment to looking at the big picture, both

it is the lead facility for small to mid-sized equipment

Association has developed a full woodchip productionused for conservation-related activities."

within the facility and in the surrounding community,

such as dozers, hydraulic excavators, wheel loaders,to sustainability.

business that supports the area's forestry industry. The"Opting to rely on biomass power at Awazu was a

Komatsu's Awazu facility embodies the Monozukuri

motor graders and transmissions. In recent years, Awazu

woodchips are burned at Awazu plant's Woody Biomass

strategic decision that involved considerations far

spirit that is essential to the company's long-term

has worked to become a sustainable community part-

Power Generation facility to produce high-pressure

beyond ease and cost. But it was a choice that brought

success. When we speak about Monozukuri, whichner, as well.

steam that generates electricity, as well as hot and cold

the community along on the journey, in keeping withliterally translates as "manufacturing," at Komatsu we arewater used in heating and cooling the plant.

Komatsu's founding spirit. "not referring only to activities on the plant floor. Rather,

Following the 2011 earthquake that left millions
in Japan temporarily without electricity, Komatsu

To secure water resources for agricultural use and cut"Biomass facility is very tough to control in terms of

we define Monozukuri as teamwork activities performed

leadership began to look for ways to reduce electrical

down on the amount of waste timber clogging up area

operation," said Norio Mitani, project manager of theby all members of the Komatsu family, including internal

consumption and become less dependent on thestreams and rivers, the Forest Association collects andWoody Biomass Power Generation facility. "You have todivisions and external partners.

traditional power grid. The decision was made to

cuts down trees from southern Ishikawa Prefecture tohave a certain level of raw materials to make it work. And"You cannot limit yourself to your own scope of work,"

consolidate two outdated plants at Awazu into one newpreserve balanced forestry environments.

you have to think of profitability, too. It's much easier

said Chizuru Nakaizumi, who works at Awazu along withassembly plant that was designed to cut electric power

This work is very important for the health of the area's

to just use fuel oil boilers. It's tough, but we wanted toher daughter and son-in-law. Her husband also works

consumption drastically while supporting new businessnatural resources, but at least 30 percent of the resulting

contribute to the community and forestry conservation."for Komatsu in China. "You need to understand thetimber was unusable for construction or commercial

In keeping with the communal spirit of the project,in the community.
By combining leading-edge design with alternative

purposes.

overall flow."younger generations of Komatsu employees led

Nakaizumi said she is proud to work for a company

energy sources, Awazu's new assembly plant, built in

Now, that resource plays a crucial role at Awazu,

the design, planning and implementation efforts

that cares about the environment and takes its role in2014, reduced electrical power consumption by 90

as leftover timber is turned into woodchips that fuelfor the changes at Awazu. More senior employees

the flow of a sustainable society seriously.

percent.

biogenerative power.

then reviewed the suggestions and they would meet

"The biomass facility," she said, "has this good cycle

To pull off this exciting feat, Komatsu worked with local"The logs that were not used before now have abusiness partners to ensure the work supported the

purpose," said Masaaki Shimizu, senior managing

Another key way they were able to reduce energy

director of the KAGA Forest Association. "They help

consumption was to only heat and cool the three meters

These innovative "circles of support" in the way wecreate energy and also new jobs."

immediately above and below the shop floor. Typicaloperate and interact with our community and our

Komatsu worked with local manufacturing firm Tagami

facility design would have wasted energy heating andenvironment are what has made Awazu plant not just a

Ex Co. Ltd. to develop special equipment which satisfies

cooling the entire 18 meter height of the facility. But at

Komatsu success story, but a sustainability success story.

Awazu's woodchip needs. Yoshimichi Tagami, chairman

Awazu, air is rotated through the six-meter loop above"The factory was able to grow along with the peopleof Tagami Ex, said that Komatsu's partnership wasand below the floor using a system of fans, pumps andin this community," said Mitani. "We were able to grownecessary to grow the local forestry industry.

radiators that leverage the underground water supply

because of them. So we wanted to return that support.

and geothermal energy, requiring very little electricity.

It's our duty. We are a global company with close ties to"We are very appreciative that Komatsu is paying

Awazu plant in Ishikawa Prefecture

14 CSR & Enviromental Report 2018 Digest

together to make decisions.

attention to the forestry industry," said Yoshihiro Tagami,

Komatsu teams also reduced energy demands

president of Tagami Ex. "An entire local industry is

by designing the new assembly shop to maximize

benefitting."

efficiencies.

Concept of CSR activities

that minimize time wasted moving between tools andEnhancing Quality of Life

Leading the Way at
Awazu Plant

inclusion of slowly rotating assembly line floor panels

Developing People

Way

Now, customers, suppliers and local school groups
frequently request tours to see the facility's innovative

Growing with SocietyPart of our

Productivity per area unit doubled thanks to thesurrounding community, as well.

Social Contribution Activities

Social Contribution Activities

Growing with Society

Developing People

Enhancing Quality of Life

Concept of CSR activities

Special Storyof using the trees to support the creation of equipmentthat then helps take care of the environment."

the community."

CSR & Enviromental Report 2018 Digest 15

Komatsu's commitment to quality and reliability is encapsulated within the fundamental principle of“Monozukuri”

mental design and economic efficiency. Out of these areas, the one which we consider to be of the most importance is(manufacturing competitiveness). With this in mind, we are dedicated to maintaining a portfolio of first-class prod-that of“Safety”.
From providing safe products to the overall safety of our automatic operational systems, we persistently utilize thefull scope of our innovation capabilities to find ways in which safety is used to maximize the value of our products toour customers.

ucts-both hardware and software − that builds on customer satisfaction. Our basic managerial policies have a strong focus on customer-centricity, creating a manufacturing ecosystem that places customer satisfaction at the forefront of its
priorities. We maintain the standards of quality that have become an integral part of our organizational culture througha continuous process of assessment and refinement that takes place across all areas of our production process.

On-site Operational Safety

Principles Governing Quality Assurance

Automatic
operational
systems

Ultimate safety features. Mine management
via autonomous haulage system (AHS)

ICT-Intensive
construction

Rapid improvement of product safety. ICTintensive construction to labor-saving on site work.

Improvingproduct safety

Component technology to reduce human error.
Entire perimeter monitoring system, etc.

Regulations and standards
approach(ISO, EU regulations, etc.)"Dantotsu"
solutions"Dantotsu"
products

Innovative approach (Use of ICT)

Social Contribution Activities

Growing with Society

Example of Safety Activities
Komatsu celebrates the 10th anniversary of thecommercial deployment of Autonomous Haulage
System (AHS): Meeting the“100-AHS-trucks-in-operation”milestone inspires plans to accelerate paceof mining automation
In 2005, Komatsu began AHS trials at CODELCO's coppermine in Chile, subsequently achieving the world's firstcommercial AHS deployment with CODELCO in January
2008. A second successful deployment followed in late2008 at Rio Tinto's iron ore mine in Australia. To date,
Rio Tinto operates AHS trucks in four mines in the Pilbara
region of Western Australia. The entire AHS operation iscontrolled remotely and efficiently from Rio Tinto's operations center in Perth, roughly 1,500 km from the mines.
Following the successes of these AHS deployments,
Komatsu supported Suncor's AHS testing in a section of
their oil sands mine in Canada in 2013.
Today, our Automatic Hauling Systems operate aroundthe clock, hauling three different commodities in six
mines across three continents. It has achieved significant
milestones in efficiency, safety, and environmental
friendliness. By the end of 2017, the AHS recorded aworld-leading cumulative total of 1.5 billion tons ofmaterials hauled. With regards to safety, we have foundthe AHS to be significantly safer than conventional
mining methods where even a small truck driving error
could cause a serious accident. AHS has created largescale customer efficiency, reducing load and haul unit
costs by more than 15% compared to conventional
haulage methods. In addition, the optimized automatic
controls of the AHS reduce sudden acceleration andabrupt steering resulting in a 40% improvement of

16 CSR & Enviromental Report 2018 Digest

tire life which reduces the need for replacements andrelated environmental impacts.
In order to extend the scope of AHS's applicability
to operations with manned haul fleets, Komatsu
conducted and successfully completed trials of its AHS
retrofit kit at Rio Tinto's existing mine in September
2017. The retrofit kit, mounted on a Komatsu electric
drive standard truck 830E (nominal payload: 220 tons),
enabled the truck to operate in autonomous mode. As aresult, Komatsu received an order from Rio Tinto for 29
AHS retrofit kits, to be installed on 830E standard trucks
currently operating at Rio Tinto's Brockman 4 mine.
In addition to expanding the AHS retrofit kit to include
other main models of Komatsu electric drive standard
trucks, Komatsu is planning to enhance the AHS's
mixed-operation functions. The planned enhancements
will enable manned haul trucks of any make to safely
interoperate with Komatsu AHS trucks in a blended fleet
operation. Under this initiative, Komatsu has committed
to provide mining customers with AHS solutions tomeet the growing demand for gradual transitions tofully automated mines.

1. Putting customers first, being receptive to the views of the customer, and responding appropriately
to the customer, thereby earning the customer's satisfaction, are fundamental to the job of every
employee and constitute the responsibility of every employee.
2. Complying with international standards and the legal requirements particular to individual countries
as a matter of course, and providing products and services that, from the perspective of thecustomer, have incorporated proper regard for safety and a sense of assurance and that do not easily
malfunction, are fundamental to the job of every employee and constitute the responsibility of every
employee.
3. Providing products and services that incorporate proper regard for global environmental conservation
is fundamental to the job of every employee and constitute the responsibility of every employee.
4. Providing products and services that are creative and provide benefits to the customer is fundamental
to the job of every employee and constitute the responsibility of every employee.
5. Giving the customer a sense of safety, assurance, satisfaction, and the ability to use the product for
many years to come is a source of happiness for every employee.

Mechanisms for Quality Assurance
Komatsu employees across all areas of our operations,from product planning to development, manufacturing,sales, and after-sales service, work together as a single
cohesive unit to ensure that the products we develop
are safe, innovative, and of high quality. Our unique“monozukuri”system enables the creation and subsequent introduction of highly competitive DANTOTSU
products into the market, whilst maintaining our significant competitive advantage through goods and services
with a wide array of substantial features.
Keeping in line with our commitment to productquality and innovation, a variety of meetings are heldat each stage of the development and manufacturing
processThrough this meticulous step-by-step process,the product's features are enhanced and refined until itmeets the high standards that we adhere to.

Market trends
Product
planning● Assessing market trends● Clarification of desired level quality● Formulation of product objectives

Evaluation meeting

Development● Product planning and design● Creation of prototype, testing toconfirm quality

Evaluation meeting
Manufacturing
Customer
support● Mass production prospects● Mass production● Sales● After-sales service● Collection of information on productCustomersatisfaction

quality in the market● Customer satisfaction surveys

System for Dealing with Recalls
We have noticed a paradigm shift in customer concerns

A standard truck 830E
with the AHS retrofit kit
running in autonomousmode at Rio Tinto's minein Australia

Developing People

Activities to improve on-site operational safety

Growing with Society

The provision of profoundly safe products is the mostimportant responsibility of any manufacturer. With thatin mind, we strive to exceed what is expected of us bygoing above and beyond the call of duty. On top of
meeting all international standards and regulations,
we supplement our products with additional safety
features that remain unsurpassed by our competitors.
This commitment, compounded with our innovative
drive for safety improvement, also allows our customers
to achieve the consummate climate of safety within
their operations.

Concept of CSR activities

Our innovative processes afford us the ability to consistently conceive valuable ideas in multiple fields, such as environ-

Enhancing Quality of Life

Quality and Reliability - Responsible Commitment to Customers -Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People

Product Safety -Increasing Safety by Innovation-

in recent years, with a greater focus on product safety
and recalls. To meet these new expectations and ensure
product safety in our markets, Komatsu is reinforcing its
recall-related organizational strength, comprehensive
response capabilities, procedures for prompt corrective
measures, and proactive information disclosure whilst
conducting increasingly rigorous monitoring activities.

Number of Incidents with Recall Notices Filed (for construction
equipment and utility equipment products sold in Japan)（Incidents）
25
5
20

Utility equipment

15

15
10
5
0

Construction equipment

21

4

2

8

8

6
6

16
12
9

1
1

3
5

1
1

1

4

5

3
2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
（FY）

CSR & Enviromental Report 2018 Digest 17

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

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

Occupational Safety and Health Policies(Released as a part of the Komatsu's Worldwide Code of Business Conduct on April 1, 2011)

1. Observe the laws and regulations concerning occupational safety and health as well as internal rules, key
items common to the Komatsu Group about occupational safety and health, and particularly items agreed
as a result of labor-management consultations in each workplace.
2. Set up targets for activities based on occupational safety and health policies, review their progress, andendeavor to continuously improve and enhance occupational safety and health activities.
3. Carry out occupational safety and health activities in management-and-labor partnership on a fullparticipation basis and keep good communication with stakeholders with regard to occupational safety andhealth.
4. Identify and evaluate the risk for occupational safety and health of a workplace and take appropriate actions
accordingly.
5. Actively promote employees' healthcare management and support the maintenance and promotion of
employees' health.
6. Actively promote education, training and qualification acquisition necessary for employees' occupationalsafety and health activities, and endeavor to develop human resources for safely carrying out their
responsibilities in the workplace.
7. Subject to appropriate protection of personal information, publicly offer the knowledge and information
about occupational safety and health activities obtained through the business activities in order to securesafety and health in society.

Educational Training for Labor Safety and Health (in Japan)

1.60

1.58

1.66

1.61

1.63

1.66

1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00

0.94

1.02
0.81

0.87

0.87

0.46

0.42

0.20
0.05
2013

All industries (Japan)
Komatsu Group (Japan)

2014

0.79
0.32
0.14
2015

0.73

0.79

0.72
0.45

0.75
0.46

0.32

0.36

2016

2017

Contents

FY2017 PracticeBased on the rules of theIndustrial Safety and Health
Act, educational training formental health is conducted.
Stress assessments werestarted in FY2006, and stressawareness training were started
in FY2007 and is being held
for the employees of all Group
companies in Japan

・Stress assessment/awarenesstraining implemented in 30
companies, with approximately
23,409 employees
・“Support Letter for the Heart”,
which is motivational material
for management personnel, isdistributed every other month tomanagement personnel within
the Group.

Education based on Job Levels(FY)

Contents

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

Komatsu (Non-Consolidated)

1. The data for all industries (Japan) and construction and mining
equipment manufacturing industry (Japan) are provided by the Ministryof Health, Labour and Welfare.
2. The scope of the Komatsu Group (Japan) includes Komatsu Ltd. andgroup companies in Japan.
3. The scope of the Komatsu Group (global) includes "Komatsu Group(Japan)" and overseas production plants.

18 CSR & Enviromental Report 2018 Digest

Safety and Health educationand mental health education
is provided to each level ofthe company including new
employees●●

Contributions to Realization of Sustainable Society,
Simultaneous Realization of Environmental andEconomic Performance, andObservance of Corporate Social Responsibility.

Sales, Rentals, and After-sales Services

Use
Communications
satellite

ParticulatematterSales and after-sales service agents

Customers

Activities based on health and safety and environmental guidelines
Provision of environmentally-friendly products and services● Creation and operation of a transaction network for usedcomponents (parts), information on“Reman”sales, etc.

Reduction of environmental impacts during the product usage stage
Provision of solutions for customers’environmental activities● Promotion of fuel-efﬁcient operation● Product support through use of ICT

●

●

●

●

Reuse

Logistics

CO2 reductions in logistics● Improvement of transport efﬁciency● Improvement of packing material

Products

CO2

NOX

Products

使用済み
Remanufacturing コンポーネント
of used components（部品）のbusiness)(parts)“Reman”(
再生（リマン事業）

Manufacturing

Reuse of parts
Reuse of products

RecoveryDisassembly

RecycleKomatsu employees
Mitigation of climate change (energy conservation)
Effective utilization of resources (zero emissions)● Environmental risk management● Elimination of the use of hazardous chemical substances● Correspondence to biodiversity

Komatsu employees●●

Recycling ofmaterials(outsourcing)●

Reduction of energy consumption related to procurement,
production, distribution, etc. from research and development,
as well as greenhouse gas emissions.

ReduceFY2017 Practice
New Employees (1 time, 330
people)
3rd year of employment with thecompany (10 times, 330 people)
Hiring experienced individuals (4times, 105 people)
New Assistant Managers (10times, 307 people)
Foremen/Senior Foremen (6times, 147 people)
New Managers (6 times, 188
people)●Relationship of the Komatsu Group's Business Activities with the Environment

Education regarding Mental Health(Frequency Rate)

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. Climate Change
2. Establishment of a Sound Material-Cycle Society
3. Conservation of Air, Water and Other Natural Resources as well as Management of Chemical Substances
4. Biodiversity●

Incidence Rate of Occupational Accidents(Frequency Rate of Lost Worktime)
1.80

In recognition of the fact that our business activities affect the environment on a regional and global level, we,at Komatsu, have placed the focus on the following four
key areas:

Developing People

Our Approach to Safety and Health at the Workplace

Concept of CSR activities

Komatsu's Relationship with the Environment

Komatsu thus enhances safety at the workplace for our employees and business partners.

Growing with Society

Occupational Safety and Health is a core component in Komatsu's business operations. In line with this commitment,

Enhancing Quality of Life

Pursuing Environmental Management

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Occupational Safety and Health

Development

Procurement ofMaterials

Komatsu employees

Business associates●●●

Environment & Economy
LCA design
Medium-term targets fordevelopment ofenvironmental technology

●

Local
community

Proper disposal of waste(outsourcing)

Green procurement

CSR & Enviromental Report 2018 Digest 19

by our superior manufacturing.

2. Simultaneous Realization of Environmental andEconomic Performance
We are committed to improving both environmental
performance and economic efficiency, as a group of

Guidelines for Corporate Activity
1. Basic Stances on Earth Environmental Problems
We, at the Komatsu Group, work for sustainable society
and earth environment through our global business operations by addressing the following four environmental
problems with the stances discussed below.
1)Climate Change
We will reduce the use of energy and emissions ofgreenhouse gas in all phases of our business activities
ranging from research and development, procurement,
production and logistics to sales and service as well as in
the total life cycle of our products and services.
2)Establishment of a Sound Material-Cycle Society
Through our business processes, we work to minimize
the use of natural resources, such as materials and water, promote their re-use or recycle them as much as
possible, and expand Zero Emissions from our manufacturing activities around the world. At the same time weensure the thorough management of waste materials
in all our business domains, including our suppliers anddistributors.
We also continuously work to increase the recyclability
rate of products at the time of disposal.
3)Conservation of Air, Water and Other Environments aswell as Management of Chemical Substances
We comply with not only local laws and regulations but
also with our established standards concerning the conservation of water quality, prevention of air pollution,
noise and vibrations.
As much as possible, we also ensure the thorough

20 CSR & Enviromental Report 2018 Digest

3. Observance of Corporate Social Responsibility
Each company of the Komatsu Group promotes environmental conservation by not only complying with theapplicable laws and regulations of the concerned hostcommunity, region and country but also by establishingits voluntary standards which consider global and local
environmental concerns. Each company of the Groupalso strives to fulfill its corporate social responsibility byactively participating in local environmental conservation programs and thereby promoting close-knit communication with local communities, while striving to become a company trusted by all Komatsu stakeholders.

content of environmental communication.

and suppliers, and strive to disclose such information,

Organizational Chart of the Environmental Management Structure

Board of Directors

4)Biodiversity
We recognize biodiversity as one of the important issues
concerning the earth environment, evaluate, understandand analyze impact on it in all our business domains, andwork on our tasks according to the criteria of the highest
impact and/or the most effective actions.

2. Framework of Global, Group-wide Environmental
Management System
The Komatsu Head Office, as well as the manufacturing
facilities and main companies of the Komatsu Group,
already with ISO certifications, will work to maintain andimprove their environmental management system, whileother manufacturing facilities and suppliers will also workto establish their environmental management systems
and reduce their environmental impact.
The Komatsu Environmental Committee develops environmental action plans and common guidelines for the
Komatsu Group. Based on these Group-wide plans andguidelines, each division or company sets up its own midto long-term targets, develops and implements specificaction plans, reviews them regularly and works to continuously improve them.

3. Environmental Education and Communication
We believe that it is important to enhance the environmental awareness of each and every employee andthereby actively promote environmental awareness andResearch anddevelopment divisions

The highest level of management that evaluates materiality and makes decisions on group management
policies.

Manufacturing divisions
President and CEO

Sales and after-sales
services divisions

Corporate level control division

Strategy Review Committee(Environmental Affairs Department)

Business units

Executive body that studies and reviews basic policies,

Affiliated companies

plans, and strategies. The committee also deliberates
on highly important corporate matters, and reports their

Manufacturing facilities
outside Japanfindings directly to the Board of Directors. This committee consists of the standing executive directors.

Development
Development Meeting

Earth Environment Committee
This committee has complete oversight regarding
Komatsu's environmental conservation policies andmanagement of chemical substances for use in our business activities, while continuously reducing the use of potentially harmful chemical substances or replacing themwith alternative substances for discontinuation of theiruse.

Administrative part

initiatives. It meets biannually to formulate specific environmental action plans based on the "Guidelines forEnvironment Personnel Liaison Council

Manufacturing
Environment Management
Personnel Liaison Council

Manufacturing Technology Meeting

Corporate Activity" of the Komatsu Earth Environment
Charter, and determines the Komatsu Group's overall

Sectorial Working Groups

Logistics Reformation Meeting

direction in environmental conservation. The committee
is chaired by the executive officer in charge of environ-

Manufacturing Facility
Environment Management
Committee

mental management, and is made up of other executive
offers responsible for specific divisions.

Environment Promotion Team

Global Safety and Environmental Affairs Meeting
Chaired by the executive officer in charge of environmental management, the meeting is attended by offi-

Procurement Division
Procurement Meetingcers responsible for safety and environmental management in Komatsu manufacturing facilities both within
and without Japan. The meeting takes place once a year,
and provides a platform by which policies and measures

Concept of CSR activities

customer satisfaction. To this end, we constantly takeup the challenge of advancing technologies to develop creative products that improve both environmental
performance throughout the product's life cycle and the
product's economic performance at the same time.

other related entities, such as major affiliated companies

Enhancing Quality of Life

Mankind must not only promote the further growth of
a rich and comfortable society but also pass down thisindispensable environment of our planet earth to future
generations in a sound and healthy condition.
We, at the Komatsu Group, define environmental
conservation efforts as one of the highest priority
management tasks, and endeavor to contribute to thesustainable growth of society by integrating advanced
technologies into environmental conservation efforts inall our business activities. This is represented by our hybrid construction equipment which features a substantial reduction of CO2 emissions while in operation andcompanies working toward superior manufacturing forour stakeholders, such as customers, employees, local
communities and suppliers and further expanding theDeveloping People

1. Contributions to Realization of Sustainable Society

thereby facilitating proactive communication with all

We will gather environment-related information concerning not only our manufacturing facilities but also

Growing with Society

Corporate Principles

education programs for all employees.

Procurement Control Manager Meeting

Sales and after-sales service

formulated by the Earth Environment Committee are
implemented. The meeting also serves to exchange
information related to environmental conservation withexternal organizations and other stakeholders.

Domestic Sales Division
Environment Committee

Environment Committee for
Customer support

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Komatsu Earth Environment Charter (June 2010 revision)Acquiring ISO14001
Komatsu has implemented a Group-wide initiative
to acquire ISO14001 certification, an international
standard for environmental management systems.
The objective is to enhance management quality
by strengthening systematic steps towards environmental conservation. Since 1997, several of our domestic and foreign manufacturing facilities received
certification. In FY2005, four plants belonging to ourparent company, Komatsu Ltd. (Awazu, Osaka, Mooka, and Oyama), acquired integrated certification.
We further added to this number in FY2007, with our
major affiliates in Japan and non-certified non-manufacturing facilities (notably the head Office) receiving integrated certification in May 2008, allowing
us to achieve integrated certification as a Group.
From 2017, we carried out the same certification ac-quisition activities for our sales and service divisions,and acquired certification for the 2015 ISO 14001 standards in the Komatsu Construction Machinery Sales
and Komatsu Rental
divisions in March 2018.
As of FY2015, we haveachieved certificationfor 100% of our major
production sites situatedoverseas.

ISO14001 Integrated Certification

CSR & Enviromental Report 2018 Digest 21

Indirect Materials

3

1,168t＊1
16,128kℓ

243TJ（6thousand kl）
96TJ（3thousand kl）
251TJ（7thousand kl）

Light oil
Natural gas

LNG

173TJ （4,000N㎥）

Renewable energy

Biomass Energy

Scope2

Power consumption 6,558TJ（691GWh）
Regional heat usage
8TJ （5GWh）
Steam usage
67TJ（16kt）Development
 cology開E& Economy
発● LCA design● M edium-term targets fordevelopment
開 発 of environmental technology●

開 発

Effective utilization of resources (zero emissions)
Environmental risk management
生産● Elimination of hazardous chemical substances ＊1● Termination
of資材調達use of organic chlorinated生産
cleaning solvents ＊2
●
●

資材調達
開 発

Environmental Risks(Air, soil, and groundwater pollution)0

Europe

60

203.5
182.8

Japan

Asia

0.08

0.06

40

The

Europe(excluding Japan) Americas

1.0

30

50
0

Japan

Asia

20

39.0

22.4

The

Europe(excluding Japan) Americas

10
0

物流

3.3

50

100
0.59

Recycled amount（ kt ）

生産

150

0 .1

0.3

16.2
Japan

3 0.6

5 3.2

8 .4

Asia

The

Europe(excluding Japan) Americas

EnergyLight oil＊3

Resins97 t
Wood, cardboard＊336,491kℓ

5,837t物流

 O2 reductions in logisticsC● I mprovement of transport ef ficiency●●

Improvement of packing materials

物流＊4

Electricity

16.6GWh

Kerosene

0.6 thousand kℓ
etc.

Energy＊4

Fuel

Indirect Materials, Oils

＊3

25 Komatsu Group Logistics

物流

Number of products(construction, mining
and Industrial equip63,674 vehicles
ment)

2,918tLogistics ( Facilities in and outside Japan )物流

Product weight(construction, mining
and Industrial equip1,255 kt
ment)

EnergyPackaging

0.2million㎥

Product

●

The

Steel

0.8million㎥

Industrial water200

Disposal amountNote:Komatsu has begun to include parts of overseas data to the amount energy used and emissions by logistics.

Groundwater
3.1million㎥
Rain water
0million㎥
Wastewater from other organizations 0million㎥

Mitigationof climate change (energy conservation)
生産
資材調達
生産

G reen procurement
資材調達

Asia

(excluding Japan) Americas

0million㎥

Manufacturing (30 Komatsu Group Manufacturing Facilities in and outside Japan)

Procurement of Materials

●

Japan

Water supply

3.30

1

0 .5

0

Water Resources

資材調達
250

2
1 .1

1

Surface water (river etc.)

53TJ（ kt ）

発

3
2 .5

2

903TJ （21million N㎥）
305TJ （6thousand t）
31TJ（0.9 thousand kl）

LPG
Gasoline

4開

Waste

販売

販売

 rovision of environmentallyP
販売 products and services-friendly● C reation and operation oftransaction network for
usedcomponents (parts)

使用
使用

●

●

●

Fuel, electricity

Use

Recovery and Disassembly

使用

Reduction of environmental impact during the
product usage stage●

Provision of solutions forcustomers’environmental activities

使 of用 romotionP
fuel-effi使
cient operation
使
用

回収解体

Promotion of“Reman,”in whichused compo回収解体
nents (parts) are recovered, remanufactured,and supplied back to themarket用

Environmental Risks(Air, soil, and groundwater pollution)
Storage for PCB transformers
4units ＊2
Stabilizer Storage
346stabilizers ＊2
Groundwater observation wells 114wells ＊2

Reuse of products
Reuse of parts
Recycling of materials (outsourcing)

Output
Waste

Atmospheric Discharges

Total amount generated 113.2kt
Substances under the Pollutant Release

GHG Energy originated CO 2 448 kt -CO 2＊ 5使用
0 kt-CO 2
Biological CO
2emissions (biomass)

販売＊2

and Transfer Register (PRTR) Law
66t（Waste furnaces
All removed）

販売

販売

Waste Recycling

Waste Disposal

138 ｔ ＊2
363 ｔ ＊2
619 ｔ ＊2

VOC

使

Waste materials disposed by subcontractor 4.7kt

使 0t) 用(Company on-site disposal of waste materials

PRTR Subject matter
使用

CO 2
24,186kt-CO 2
NO X
diesel particulatematterAtmospheric Discharges

回収解体
9ｔ

SOx
NOx

108.5kt

Atmospheric Discharges

8.6kt-CO2 ＊4

Noise andvibration

CO 2

Waste oilproducts

Returnable
pallets

回収解体販売
Hazardous waste manifests

Use in otherindustrial
sectors

Atmospheric Discharges
CO2

104.7kt-CO 2

Non-energy originated CO2 456t-CO 2
543t-CO 2
CH 4
N2 O
217t-CO 2
HFC
1,058t-CO 2
PFC
使
用 0t-CO 2
SF６0t-CO 2
NF 3
0t-CO 2使用

使用

Recycling amount

回収解体

Atmospheric Discharges
CO 2

回収解体

Recycling conducted atoil manufacturers

回収解体

Hazardous waste
manifests
Noise andvibration

Use in otherindustrial sectors

Waste
disposal

用

Amount of Energy Sold
Electric energy soldRegional heat quantity soldSteam volume sold27TJ（2,871MWh）
0 GJ
0 GJ

使

用

Coverage of Data

Scope of energy and CO2 data of

Water-based Discharges
Wastewater
BOD emissions＊2

3million m3＊2
12t

COD emissions
Substances under the PRTR Law (public water areas)
Substances under the PRTR Law (sewerage)

＊2

12t
＊2
0.0t

0.0t

＊2

logistics

Komatsu (parent company) facilities, specifically the following fourteen plants

Awazu Plant, Osaka Plant, Rokko Plant, Ibaraki Plant, Tochigi Plant, Kanazawa Plant, Shonan Plant, Oyama Plant, Koriyama Plant, and Komatsu
Logistics Corp (Parts Logistics Division) (Kanto Parts Distribution Center, Kansai Parts Distribution Center, Awazu Parts Distribution Center, Hokkaido Parts Distribution Center, Kyusyu Parts Distribution Center）.

K omatsu Group manufacturing facilities in Japan, specifically the above fourteen plants and the following one business unit
Komatsu Castex Ltd.

Komatsu Group manufacturing facilities outside Japan, specifically the following ten plants
Emissions and transfer of substances covered by the PRTR Law: Calculated by the“content ratio of specific chemical substances”contained in indirectmaterials multiplied by the“discharge or transfer rate.”This calculation is based on the PRTR Law, which was designed to mandate the disclosure of theamount of specific chemical substances released into the environment to promote the management of such substances.

22 CSR & Enviromental Report 2018 Digest

物流

EnergyIndirect Materials, Oils

Sales and After-sales Services●

Concept of CSR activities

4Non- renewable energy

Heavy oil A
Kerosene＊1

PaintsLubricants

Scope1（million ㎥ ）

4.5

生産

Social Contribution Activities

Developing People

963kt

資材調達
CO2

Growing with Society

Input

5

生産

Enhancing Quality of Life（million GJ ）EnergyDirect Materials
Steel

資材調達

開 発
Water
Resources

EnergyGrowing with Society
Social Contribution Activities

開 発

Environmental Impact Indicators by Region

including Facilities outside Japan (FY2017)

Developing People

Environmental Impact Resulting from Business Activities of Komatsu Group Companies,

Enhancing Quality of Life

Concept of CSR activities

Relationship between Business Activities and the Environment

Komatsu America Corp.,[Chattanooga Manufacturing Operation], [Peoria Manufacturing Operation], Komatsu do Brasil Ltda., Komatsu UK
Ltd., Komatsu Mining Germany GmbH, Komatsu Shantui Construction Machinery Co., Ltd., Komatsu (Changzhou) Construction Machinery
Corporation, Komatsu (Changzhou) Foundry Corp., Komatsu (Shandong) Construction Machinery Corp, PT Komatsu Indonesia Tbk, Bangkok
Komatsu Co., Ltd..

8
 Komatsu manufacturing facilities in*1: Japan
1Komatsu Group manufacturing facili*2: 1ties
in Japan15 domestic logistics bases including 14*3: non-consolidatedbases and 1 consoli-

dated base within the scope of energy
and CO2 emission of logistics.
4: S ales agencies and rental companies inJapan(Komatsu
Construction
Equipment Sales and Service Japan Ltd.,
Komatsu Rental Ltd. and Komatsu Forklift
Japan Ltd.) were added
5: Including the usage of forklifts in thepremises of a factory**

CSR & Enviromental Report 2018 Digest 23

From live data gathered by KOMTRAX, Komatsu has gained perspective on the amount of CO2 emissions(Scope 3 Categor y 11) produced by our products manufactured in F Y2017 in operation world-wide.

of our main domestic plant. In Russia(KMR), we wereable to collaborate
with external Russian
consultants to obtain aunique local perspective in our auditing.

The calculation was performed as follows.
Calculation of Emissions from Customer Use(1) Calculate the following by each model
CO2 emissions over the life of each model= (FY2017 Production Volume) × (Fuel Consumption; L/kWh) × (Engine Output; kW)× (Engine Life; as product life; h) × (CO2 Conversion Factor)(2) Calculated for each model in (1) above, Total these values

Environmental Audit at KIPL

* For models able to collect data on fuel consumption, KOMTRAX collected the actual values of fuel consumption and operating time from representativemodels of each size. We back calculated data from development for other models.

Past Environment Audits

For others, including the 14 remaining categories, general CO2 emissions was calculated. The result is shown

Year

Area

Year

Area

2007

China

2013

United States

2008

ー

2014

United States and Brazil

2009

Thailand and Indonesia

2015

Thailand

2010

India

2016

India and Indonesia

30,0002011

Brazil2017

Russia and China

25,0002012

Russia and Czech Republic

Scope3 Manufacturing ofPurchasable Goods
9.6 %Scope3 Customer Use
88.9%

Total CO2
Emission Amount
27.2million
t-CO2/year

Developing People

in the pie chart below.
(kt-CO2)
35,00028,62827,20625,99521,881

20,00016,801

19,232

15,00010,000

Promoting Environmental Activities at Group Sales and Rental Agencies

5,000

Komatsu continues to promote safety and environmental improvement activities for the sales and services
departments. In FY 2017, we carried out activities to strengthen the awareness of environmental management andsupport activities for improvements centered on the company's worksites.

Acquisition of ISO 14001 Certification
To strengthen the awareness of environmental management at sales companies and other companies, we
implemented activities to qualify for the international
standard ISO 14001 on the environmental management system, as planned at Komatsu Construction Machinery Sales and Komatsu Rental in FY 2017, and havesuccessfully received certification in May 2018. With the
integration of three sales companies in FY 2018, we willcontinue with the process to add a lift business division
as Komatsu Customer Support Co., Ltd. so that all sales
companies can make unified environmental improvement efforts.

agement and the representatives in charge of eachcompany to personally visit each site to ensure compliance with environmental guidelines at the different
worksites.

Appropriate Discharge of Waste
Our construction machine sales department's waste
management system uses unified management forelectronic manifests and a centralized management
process for consignment contracts and permits to create a system of unified management that allows us toreduce the amount of man-power hours spent on management. We plan to introduce this system to our lift/
rental business division by FY 2018.

0
Scope3 Customer Use
Scope3 Fuel Procurement

24 CSR & Enviromental Report 2018 Digest

Scope3 Manufacturing of Purchasable Goods

2012

2013

2014

2015

2016

2017

(FY)

Scope3 Capital Goods Construction and others

OthersAs evident from the results above, emissions during product use make up approximately 90% of total
emissions.
From this, we can see that fuel-efficient products have a significant effect on reducing CO2 emissions.
Komatsu is committed to developing hybrid construction machinery (improving fuel efficiency by 25%) and
DANTOTSU products (over 10% improvement in fuel efficiency). In addition to this, we are accelerating thedevelopment and implementation of our ICT-based SMART CONSTRUCTION business.
In addition, the results of our assessments regarding LCA * (Life Cycle Assessment) can be found in the pie
chart below.
* LCA refers to the environmental impact assessment method for individual products at each stage, from manufacture, transportation, sale, use, disposal, to reuse

Scope1

Scope2(kt-CO2)
35,00030,000Total CO2
Emission Amount
27.7million
t-CO2/year

Activities Based on the Environmental Guidelines
for Sales Agencies
Last year, we distributed our“Environmental Guidelines”to our sales and rental company sites, whichsummarized the matters and standards to be followedin the management of waste disposal, waste-water
treatment, noise vibration, and other matters deeply
related to environmental conservation. This fiscal year,
we updated the information regarding the amendment of laws and regulations, and required upper-man-Concept of CSR activities

In line with our commitment to environmental conservation, we have been conducting regularly scheduled
compliance risk audits of our overseas affiliate companies since 2007.
In 2017, we conducted environmental audits at ouraffiliates in Russia (KMR) and China (KCF).
Our comprehensive auditing procedure begins withthe assessment of a check sheet that our affiliate company completes. We then begin an audit of environ-mental activities and compliance to legislative regulations, supported by the chief of environmental matters

Growing with Society

Environmental Audit of affiliate companies
in Russia and China

Enhancing Quality of Life

Amount of CO2 Emissions by Scope 3

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Environmental Audit

29,101

27,654

26,43325,00022,28920,00017,131

19,59915,00010,0005,000
0Scope1 FuelScope2 Purchased electricity

Scope3 Capital Goods Construction and others

Environmental education at a group sales agency

Scope3 Customer Use
Scope3 Fuel Procurement

2012

2013

2014

2015

2016

2017

(FY)

Scope3 Manufacturing of Purchasable Goods
Others* Scope 1 refers to direct CO2 emissions by operators (ex: fuel consumption)* Scope 2 refers to indirect CO2 emissions by operators (ex: power purchase)* Scope 3 refers to CO2 emissions by operators from within our supply chain (ex: emissions of product during operation, emissions from suppliers, transportation,business trips and commuting)

CSR & Enviromental Report 2018 Digest 25

Medium size bulldozer“D51 PX-24”

Komatsu launched the 2014 off-road law standard
compliant ICT hydraulic excavators“PC200i-11”and“PC200LCi-11”, alongside a smart construction support
contract. We are constantly engaged in the advancementof machine control technology through“intelligent
machine control”systems that allow for the control
of different components of a machine (boom, arm,
bucket etc.). It is controlled by calculating the positionof the bucket cutting edge using the Global Navigation
Satellite System and correction information and collating
it with the construction design data, which allows us
to improve on control functions from conventional
machines (such as automatic landing assistance).
One of our newest functions enables bucket angle
retention control, which we are confident will reduce
construction time and improve productivity significantly.
Through the adoption of an after-treatment systemfor exhaust gas, our excavator is able to greatly reduce
the emissions of nitrogen oxide (NOx) and particulatematter (PM). It also comes replete with features suchas KomVision (a machine peripheral camera system),an auto idle stop system, and an automatic lock systemon the locking lever. We are proud to announce therelease of this state-of-the-art hydraulic excavator, andare confident in its abilities to strengthen environmental
conservation, general safety, and ICT.

Komatsu launched a medium-sized bulldozer“D51
PX-24“ that is compliant with the 2014 off- roadlaw standards. This model is equipped with a newgeneration engine that dramatically reduces emissionsof nitrogen oxides (NOx) and particulate matter (PM),Electronically controlled hydraulic transmission controls
low speed matching between the engine and HST*
pump, two operational modes (P mode and E mode),and an automatic idle stop function, etc., it achieves ahigh level in both productivity and fuel consumption
performance. According to our test standards, using
the D51 PX-24 saw an increase in productivity by 10%
and a reduction in fuel consumption by 10%. Thismodel comes with a display monitor that adopts a clear,easy-to-see high-definition 7 inch liquid crystal display(LCD), and also supports energy saving operations bydisplaying eco guidance etc.

* HST: Hydro-Static Transmission

Step 1

Reduction of CO2 Emissions through Dantotsu Products

Step 2

Reduction of CO2 Emission by Products through Dantotsu Service (KOMTRAX)

Step 3

Reduction of CO2 Emissions for Overall Construction Work through Dantotsu Solutions( SMART CONSTRUCTION using ICT Construction Equipment )Reduction of CO2 Emissions from
Construction Equipment(Estimate of Amount of Reduction Contributions)

In Komatsu's Mid-term Management Plan (FY2016 FY2018), we set the goal of achieving a total of 25%
reduction by 2025 in CO2 emissions per unit of workfrom construction equipment, compared to our baseyear of FY2007. In order to assess our progress towards
achieving this target, we have set up a number ofkey performance indicators, such as CO2 reduction
resulting from fuel efficiency, work efficiency, andequipment capability as compared to FY2007.
Steady progress has been made, and we found thatthe machines manufactured in FY2017 achieved a
reduction of 7.4% in CO2 emissions as compared to oura year (about 1200 hours) would result in an overall
reduction of 210,000 tons of CO2, an equivalent ofapproximately 45% of Komatsu's total manufacturing
plant CO2 emission in FY2017.
CO2 emissions for operation time of one year (ton-CO2 )Approximately 0.21 million tons (7.4%)
in reduction contribution amountCO2（t）3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Base Year(FY2007)base year. Constant operation of these machines for

Items Manufactured
in FY2017

Growing with Society

ICT hydraulic excavator“PC 200i / PC 200 LCi-11”

Service”, and“Dantotsu Solutions”.

Concept of CSR activities

are working to reduce these operational emissions through three different initiatives:“Dantotsu Products”,“Dantotsu
In 2017, Komatsu released one vehicle model after another that greatly reduce nitrogen oxide (NOx) and particulatematter (PM) emissions that meet Japanese (Emissions from Non-Road Special Motor Vehicles 2014 Standards), North
American (EPA Tier4 Final), and European (EU Stage IV) emissions controls for Hydraulic Excavators, Bulldozers,
Dump Trucks and Wheel Loaders. These models are equipped with newly developed next-generation enginesthat result in construction machinery that are clean and fuel efficient, with excellent durability and reliability.
Below are some examples.

Enhancing Quality of Life

product operation, during which approximately 90% of emissions are produced. We have acknowledged this fact, andDeveloping People

The main bulk of CO2 emissions produced throughout the lifecycle of our construction equipment is centered on

Tier4 Final Compliant Models Released

Operation for one year: estimated as 1,200 hours

Introduction of the new medium-sized servo press“H2FM series”to the market
Komatsu Industries Co., Ltd. has developed and introduced
a medium-sized servo press“H2FM630”that is compatible
with productivity improvement and energy saving.
This machine enables high speed pendulum motion
operation through the use of a newly developed“watercooled high torque servo motor”. When combinedwith a“High Speed Leveler Feeder ”(Coil Supply Unit),
complete synchronous operation becomes possible,

D51PX-24

thus achieving an increase of about 60% in productivity
compared to current mechanical presses. (FIGS. 1 and 2)
Furthermore, by adopting Komatsu's proprietary highcapacity capacitor energy storage system (Fig. 3), power
consumption can be reduced by up to 55% (compared
to a machine that does not utilize the same system).
This allows users of our products to contribute greatly toenergy saving initiatives.

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Reduction in CO2 Emissions of Construction Equipment

Mitigating Climate Change through Products and Services

Main Specifications
Item
Machine mass (kg)Development machine productivity

13,62097.6/2,200200
Productivity raitio

Engine rated output net (kW/min-1)

D51PX -24

PC200i -11

Main Specifications
Item
Machine mass (kg)Engine rated output net (kW/min-1)

26 CSR & Enviromental Report 2018 Digest

PC200i-11

PC200 LCi-11

19,80021,200123/2,000

123/ 2,000

160

150
100

100

50
0

H2 FM 630 and coil feeder

Conventional
existing machine(induction motor)

development machine(water-coolong servo)

CSR & Enviromental Report 2018 Digest 27

per unit.
We have set an ambitious goal of a 54% reduction
compared to FY2000 levels and pursued activities toreduce power consumption and achieved significant
success, using the“cutting electricity use in half”
activities that followed the Great East Japan Earthquake
as an impetus. As a result, in February 2017, we received
the“Kanto Bureau of Economy, Trade and Industry
Director's Award”
as a superior energy managementbusiness operator.
In FY2017, as a result of energy-saving activities
undertaken based on the lateral spread of various
production reforms, the CO2 emissions per unit ofCO2 emissions (Japan)（k t ）
350
300
250
200

264 264
209 200 190
71.8 71.2

150

66.2 67.2 61.0

100
50
0

167
54.9

180

（kt）
350

100

300

80

202

59.0 60.8

（%）
120

43.0

60
40
20

2000

buildings that are over 40 years old to building thatincorporate the newest energy-conserving technology
and increase the renewable energy such as solar power.

2010 2011 2012 2013 2014 2015 2016 20170
2020（FY）

Manufacturing value : Total production cost excluding direct material cost,
other facilities' components, and procured components
Total amount of CO emissions of
all Komatsu Group manufacturing facilities in Japan

100

95.3

250

84.2

200
150
100
50
0

287

315

81.0 75.7 74.2

258

239

211

165

100
73.5
193

73.8

68

at Komatsu Group manufacturing facilities in Japan (compared to FY2000)

Basic unit : CO2 emission Index per unit manufacturing value at each manufacturing
facilities, weighted by ratio of manufacturing value of each site (compared to FY2010)
CO2 emissions (Komatsu Group manufacturing overseas facilities)
CO2 emission basic unit (compared to FY2010)

and facilities, and takes safety and environment into consideration

28 CSR & Enviromental Report 2018 Digest

air conditioning in the manned area. Since we can
expect underground heat of around18℃ throughout
the year around the factory, we installed sevenboreholes with depths of 100 m and exchanged
geothermal energy to improve the efficiency of
the water-cooled heat pump air conditioning
system. In addition to sending the warm air staying
in the upper part of the unmanned area to themanned area foruse as a heating aid
in winter.

New heat
treatment plant

109.3
100

100

103.2

97.9

102.6

100.1

120

Japan

105.8
100

81.4

78.9

75.5

74.4

77.6

87

70.8

80

55,57460
38,45634,98427,54027,42725,652
24,5687,196
3,737 2,716 2,199 2,303
21,852

23,69021,99321,707
1,536 1,926

36,11433,44824,71624,3352,676

14,749Komatsu CO2 emission

20

CO2 basic unit index perinternational Komatsu cargo weight0（Japan）
2020

Mid-term objective

2011 2012

Japan

2013 2014 20152016 2017

Oversea

Mid-term objective（Overseas）
2020

CO2 Improvement for Domestic Transport (Expansion of near port usage of export vehicles)
Based on our vision for Komatsu as a company that isrooted in the local community, we initiated full scale useof Kanazawa harbor in 2008.
we are proud to report that activity at Kanazawa Port
has increased dramatically.In addition to this success, wewere also able to reduce CO2 emissions by 1059 tons in
FY2017.
Though the number of available flights and routes arelimited when compared with major ports due to thelocation of the local port on the side of the Sea of Japan,
there are three means by which Kanazawa port can beutilized, each with different characteristics. They are usedaccordingly depending on the cargo situation.

TOPICS

Positional relationship between Kanazawa harbor andKomatsu improvement initiatives

Press

Kanazawa
Plant

Kanazawa
Port

Concept of CSR activities

CO2 basic unit index per
Komatsu cargo weight

21,746

19,781
21,65920,457

2006 2011 2012 2013 2014 2015 2016 2017

: 10 business sites

Group (Overseas) CO2 emission
40

23,34925,341

Group

Group (Japan) CO2 emission

68

64.5

50,0000

Komatsu: 14 business sites
Group : 1 business sites
Overseas75,00025,000

Scope of aggregate calculation for CO2

60

02020（FY）

TOPICS Energy saving heat treatment factory (Osaka factory) that separates people
In Osaka factory, by concentrating the heat
treatment process which had been dispersed ina new heat treatment plant, weimproved energy
efficiency by 38% (approx.9,600MWh/year) by 20%
improvement in efficiency of production area andseparation of heat source It is realized. Especiallyin unmanned areas where heat treatment
facilities are consolidated, we are saving energy
and eliminating air conditioning and lighting. In
addition, by adopting a convex roof, we promoted
natural ventilation due to the temperature
difference between the upper and lower sides, andwe adopted indirect natural lighting from thenorth face. Meanwhile, we introduced geothermal（Basic unit index）

100,0008020

2

CO2 emission index per unit of manufacturing value

3.5point when compared to emissions in FY2016.

40

244

2010 2011 2012 2013 2014 2015 2016 2017

compared to emissions in FY2016.
Our overseas operations also saw an improvementin the reduction of CO2 emissions, with a decrease of（t-CO 2 ）27,788（％）
120

As a result, in FY2017 we achieved a reduction of
6.8point in CO2 emissions per cargo weight when

Global Shipment CO2 Emissions Volume and Basic Unit

CO2 emissions (Overseas)

100
239

sites have also been reduced by 26.2% compared to
FY2010 as a result of fuel conversion and lateral spreadof improvement examples from Japanese plants. In
addition, the ratio of renewable energy including
certificated electricity in power consumption up to 7.2%
by installing solar power system at KIPL, India and BKC,
Thailand.
For FY2018, to achieve the mid-term objectives, wewill add an idea for an improvement and work towards
further reduction in CO2 emissions per unit by updating

and railways (modal shift).

Enhancing Quality of Life

unit of manufacturing value as our main indicator, we
aim to proactively reduce the amount of CO2 emissions

manufacturing value was reduced by 39.2% comparedto FY2000 level, up 1.8 point from the previous year.
The mismatch between the increase in energy use
by production rise and the increase in production
cost resulted in the increase of emission per unit.
CO2 emission at Komatsu's overseas manufacturingtransportation by increasing the use of coastal shipping

operations on a globally consolidated basis at all 25
business locations.
Domestically, we are continuing improvements with
an emphasis on decreasing transportation distancethrough efficient use of the Kanazawa and Hitachi Naka
Ports (which are located adjacent to manufacturing
plants), as well as improving on long distance

Developing People

As a part of our efforts to mitigate climate change,
Komatsu set mid and long term objectives in Japanand overseas operations for the amount of electricity,
fuel gas, fuel oil, and other types of energy used in
manufacturing operations. By using CO2 emissions per

We have now implemented improvements in logistics

Located very close to
Komatsu's production

0Km

Growing with Society

Reducing CO2 Emissions in Manufacturing Operations

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Reduction CO2 Emissions in Logistics

Initiatives to Mitigate Climate Change in Business Operations

Construction
machine

37Km
Awazu Plant

Ishikawa Prefecture

Certified as CDP“Climate Change”and“Water”A List Company

Komatsu was certified as a“Climate Change”and“Water”A list company
in 2017 by CDP, an international nonprofit organization that provides
environmental information disclosure system. These are given to companies
recognized as global leaders in addressing climate change and water
resource management.

CSR & Enviromental Report 2018 Digest 29

●●

Lower cost for "remanned" components
Reduced idle time for construction equipment
because of adequate inventory of "remanned"
components
Resource conservation and waste reduction
through reuse and recycling of components

meeting our goals ahead of schedule.

Amount of Waste Generated in Japan (Data coverage: Komatsu Ltd.
Reman center in Komatsu Indonesia plant

Future Steps
To further increase the reuse rate of used components, the Komatsu Group is reducing the number of disposed parts by:
Developing parts for remanufacturing, oversized parts, etc

Developing recycling-related technologies (assessment and measurement for reuse, remanufacturing
worn-out parts, cleaning, heat treatment, etc.)
to reduce waste components, and thereby further increase reuse and recycling activities.

●

Amount of Water Resources Used (Japan)

and the Komatsu Group manufacturing facilities in Japan)(kt/year)
30
107
101
100
99.6
99.6 99.7 99.6 99.8
25
99.7
99.5
99.0
94.0
92.1
92.0
20
86.6
78.6
15
10
5
0

99.5
90.0

（km3）

120

7,000

100
80
60
40

19.5 19.8 15.8 16.9 15.2 12.7 14.1 16.3

2010 2011 2012 2013 2014 2015 2016 2017

（%）

20
0

2020Target (FY)

Index per unit of manufacturing value(kt/year)（千ｔ/年）
100 96.9
120
92.1 97.6 91.4
91.4 91.4 92.1

2. Cleaning

3. Disassemble

4. Parts inspection

100 85.1

84.0

80

89.8

83.6

80.4

1,000
0

80.6

Amount of Water Resources Used (Overseas)

7. Performance test

（%）

（km3）

100

1,400

95.0

95.2

90.0

80
60

40
20
0

40
93.8 102.3 97.8

84.2

67.7

49.4

69.2

96.9

2010 2011 2012 2013 2014 2015 2016 201720

0
2020Target (FY)

Recycling rate

99.0 99.7

94.0

15
10
5
0

99.5

92.0

78.6

86.6

92.1

2010 2011 2012 2013 2014 2015 2016 2017
排出量原単位指数8060

19.5 19.8 15.8 16.9 15.2 12.7 14.1 16.3

廃棄物排出量90

リサイクル率40

リサイクル率／指数

20

96.1

（%）
84.1
84.1

92.8

1,000

77.4
77.4

72.3

789

633

800
600
400
200
0

1,136 1,228 1,081 970

100
90
80
70
60
50
40
30
20
10
0
2020Target (FY)
90

67.4

670

59.1

720

2010 2011 2012 2013 2014 2015 2016 2017

Concept of CSR activities
Enhancing Quality of Life

Support for Suppliers in Water Consumption Reduction Activities

8. Paint

廃棄物排出量10. Core return

1,200

100
100

Amount of water resources
Index per unit of manufacturing value (Compared to FY2010)

Waste disposal amountIn order to promote water consumption reduction
activities amongst our suppliers, we have promoted
the development of our water use reduction initiatives（千ｔ/年）（%）
suppliers.
30 to major outsource
120
107
100 101 99.6
99.7 99.6 99.8
99.5
We continued our99.6
efforts
towards water consum25
100

30 CSR & Enviromental Report 2018 Digest

2,000

86.7

Amount of water resources
Index per unit of manufacturing value (Compared to FY2010)

60

TOPICS
6.Assemble

96.2

84.3

68.4

Index per unit of manufacturing value

9. Factory Shipment

3,000

100
90
80
64.5
70
60
56.9
57.3
60
50.4
50
40
6,347 5,652 4,734 4,144 3,475 2,994 2,660 3,295
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2020Target (FY)88.4

Komatsu Group manufacturing facilities in overseas)

Amount recycled

5. Component Remanufacturing

4,000

Recycling rate

Recycling rate/Index

1. Receiving inspection

5,000

Waste disposal amountAmount of Waste Generated in overseas (Data coverage: The

Reman Process

6,000

（%）

100

Developing People●

Quality and performance that matches newcomponents

and elimination of wasteful practices) have shown
significant results in our domestic facilities, reducing
water use per unit of manufacturing by a total of 42.6%
compared to FY2010. These activities mostly took placein the Hokuriku region, which is possessed of a highcapacity of groundwater. Despite the fact that we havesatisfied our mid-term targets, our water usage worsenedby 6.9 points as compared to our previous year. This wasdue to heavy snowfall in the Hokuriku region, which
required the increased usage of groundwater for snow
melting activities.
We achieved the mid-term objectives ahead of its
original schedule by the effectiveness of our water
manage initiatives in our overseas operations (purificationof water discharges for recycling and the elimination ofwasteful practice), which have reduced water use per unitof manufacturing cost by 40.7% compared to FY2010.

Growing with Society●

Our water-saving initiatives (reuse of water in processing

reducing waste production, separation of waste materials
and increased conversion rates of waste materials toresources, we achieved a total reduction of 7.9% of waste
generated per unit of production in domestic operations(compared to FY2010). However, due to a temporary
increase in waste as a result of the reduction in inventoryof roadbed materials and the temporal increase ofwood debris due to growth in the production, our waste
management performance has worsened compared tothe previous fiscal year. Despite these setbacks, we wereable to reach a record high of 99.8% in recycling rates.
With regards to overseas operations, we saw an
overall decrease of 3.8% in waste generation per unit ofproduction compared to FY2010. Due to an increase in
the amount of sand used for quality maintenance, thisnumber is worse compared to our previous fiscal year.
Recycling rates for overseas operations reached 95.2%,

Social Contribution Activities

Reman (an abbreviation of remanufacturing) offers
the following advantages to customers:

By strict adherence to waste management policies,

Recycling rate/Indexof used engines, transmissions, and other key
components of construction and mining equipment
into“Remanned”components. Af ter confirmingthat these remanufactured par ts are possessedo f t h e s a m e q u a l i t y a s n e w l y m a n u f a c t ur e dcomponents, we inject them back into the market.
We currently promote the“Reman business at 12“Reman”Centers worldwide.

We established PT Komatsu Indonesia (KI) as a
global base, which supplies key components forlarge-size construction machiner y and hydrauliccylinders like engines and transmissions. We also
es tablished PT Komatsu“Reman”Center Chile(KRCC) in Chile, which supplies components forelectric dump trucks.
Additionally, Komatsu established PT KOMATSU
REMANUFAC TURING A SIA (KR A) in Indonesia torecycle all components of large-size construction
machinery exclusively for the Indonesian market.
We have also established individual“Reman”centers
for countries that are not part of our global supply
chains (China, Russia, India and Brazil, Myanmar etc.).

Water Resources

Total amount of waste

Our“Reman”business involves the remanufacturing

Waste

Total amount of waste

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society

Development of our“Reman”Remanufacturing Business●Social Contribution Activities

Effective resource utilization activity in production

Promoting Recycling

ption reduction in FY2017 by selecting ten modelcompanies for inspection.
In FY2018 (with the exception of model enterprises),
we distributed 25 examples of case studies that
centered on Komatsu’s water use reduction initiatives.

20
0

2020目標（年度）

CSR & Enviromental Report 2018 Digest 31

minimizing our Carbon and Environmental Footprint, establishing a sound material cycling society,conservation of air, water, and waste, implementation of biodiversity projects to promote and sustain
environmental wildlife and natural resources.

Program, which will be the primary focus of the discussion of this Feature Article.
It should be noted that the Longview, Texas Facility
is in continuous compliance with all local, state, andfederal environmental regulations and is recognizedby the regulatory and industrial agencies and communities as a leader in both environmental compliance, presenting no potential threat to human healthand the environment, and attaining environmental
sustainable achievements. Each Topic of the Sustainable Program is discussed below:

has been successfully cleaned up and remediated to
non-detectable contaminant levels. The facility operations pose no threat to human health and the envi-

KMC Global Operations Introduction
Since being acquired by Komatsu in 2017, we havebeen rebranded Komatsu Mining Corp. and are now
part of the larger Komatsu organization, which is basedin Japan. The Komatsu Mining Corp. name is more ofa legal entity identifier. Through ongoing integration
efforts, we are part of and support Komatsu's growing

mining business segment. We continue to support andinvest in the Joy, P&H and Montabert brands. Our four
leading brands all have long histories of innovation andhelping reshape industries. Now as one group we arefocused on further innovation to move mining forward.

KMC Longview, Texas Operations Introduction
Komatsu Longview Operation is the mother plant for
the P&H Hybrid Wheel Loader and Hard Rock Load
Haul Dump (LHD's) product lines. The manufacturing center is responsible for producing a variety ofmining products and parts.
Longview has a highly skilled workforce consisting of welding, fabrication, electrical, and assembly
trades. The product manufacturing over past 70
years has spanned many industries including material handling, oil and gas, rail, forestry, construction
and mining.
Longview's campus is as historic and diverse as its
product line, from the distinctive domed buildings tothe vast acreage of undisturbed lakes and wetlands.
The culture at the campus is a strong reflection of
SLQDC*. The focus is largely process and process improvement. Their Zero Harm Culture has been institutionalized over the past several years. The facility
has worked 4 million hours zero lost time injuries
and has a medical recordable rate of 0.17 (94% reduction since 2011).
The zero-harm impact carries over into the facility's focus on environmental and social contributions
as well. The facility boasts both a strong waste water
management program and air emissions containment. The Texas Commission on Environmental
Quality hosts delegations of state officials to thefacility every year as the state considers it showcase
site for the state.

32 CSR & Enviromental Report 2018 Digest

The operation has been largely people and community centered since its inception in 1946.It has alongstanding relationship with Letourneau University, a private university that was started originally as a
training center for its own employees. In addition, theoperation is actively engaged in several education,
adult outreach and community improvement programs. Komatsu Longview Operation is known as an
employer of choice in the community and held in highesteem by local business and governmental officials.

Elimination of Risk to Business
Operations are conducted to minimize air emissions (including Greenhouse Gas Emissions - CO2e) of potential
airborne contaminants; both hazardous and non-hazardous waste management programs are implemented to maximize the amount of recycling and reuse or
waste elimination; wastewater discharges are eliminated and storm water discharges are treated with a storm
water treatment system with a 99.7% efficiency.

ronment.

Minimizing our Carbon and Environmental Footprint
During 2017, the Longview Facility emitted approximately 5,077 metric tons of CO2e Scope 1 emissions.
Projects implemented to minimize Greenhouse Gas
emissions include using clean energy for processes,
installing low CO2 emitting equipment for processes,
along with energy conservation measures.
The Scope 2 GHG emissions (GHG emissions produced off-site at the electric company that provides
electricity to the Longview Facility) for 2017 were approximately 15,795 metric tons of CO2e.
The KMC Sustainability Program also looks at reducing priority pollutant air contaminants including
VOCs, NOx, SO2, CO, and PM. The Longview Facility
has a state of the art Regenerative Thermal Oxidizer(RTO) that destroys 98+% of all VOCs emitted from thepainting operations.

A release from an onsite closed hazardous waste

Implementation of biodiversity projects to promote and sustain environmental wildlife and natural resources
The Longview Operations has a large-scale Biodiversity
Program in place which preserves the natural wildlife
and nature in conjunction with its water conservation
and wastewater and storm water capture, retention,
treatment and recycle system to achieve a net provider
status of water resources while maintaining continuous compliance and providing a haven for wildlife, flora and fauna. In addition, another Biodiversity Project
was successfully completed at the KMC Troutdale, Oregon Facility which eliminated storm water pollutant
discharges, reclaim a large portion of the facility storage yard, while also promoting the preservation of thenatural wildlife and species indigenous to that area.

Concept of CSR activities

that mildly impacted the groundwater in the 1980's

ment System (ECMS) also includes our Sustainability

Enhancing Quality of Life

KMC's global Environmental Compliance Manage-

while eliminating environmental risk to business,

Developing People

Achieving an Environmental Sustainability Program

Growing with Society

KMC's Sustainability Program (included as part of KMC's Environmental Compliance Management System)

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Feature Article: KMC's Environmental Sustainability Program

Lake LeTourneau Clarification/Retention Treatment Unit - restoration for water
fowl and fish

Manufacturing environmental friendly products

KMC Longview, TX Facility* SLQDC:Philosophy to prioritize in the order of Safety, Law, Quality, Delivery, Cost.

The Longview Operations produces a wide array of
products which are designed to be environmentallyfriendly, of which the SR Hybrid Drive Wheel Loaders leading the way. In addition, lower emission engines are used as well as oil hydraulic systems are
replaced in applicable locations with electric drive
systems. The picture below is an example of how
KMC's Longview Facility continues to utilize innovation to ensure that its products are environmentallyfriendly in the applications they are used in.

“Environmental friendly”SR Hybrid Wheel Loaders

CSR & Enviromental Report 2018 Digest 33

employee on the basis of nationality, race, religion, age, gender, physical or mental disability or other legally protected attributes
that are irrelevant to his or her performance. We shall vigorously endeavor to promote equal opportunities for employment andDeveloping People
Growing with Society

eliminate harassment in the workplace.
3. We shall endeavor to provide employees with workplaces where they can seek a good balance between their private and6. We shall not tolerate child labor or forced labor.

professional lives, while effectively accomplishing their respective tasks with satisfaction and pride.
4. We shall endeavor to design and administer the system of human resource management in a manner that is most reasonable
and persuasive to the employees. We shall make such systems open and clearly explain them to the employees to the
maximum extent practicable.
5. Komatsu Group companies shall comply with all applicable laws and regulations governing employee rights in the jurisdictions
in which they operate, and faithfully accommodate, wherever applicable, conversations or discussions with employees or theirSocial Contribution Activities

representatives.
7. Komatsu Group companies shall endeavor to offer to their respective employees those terms and conditions for employmentthat are sufficiently competitive in their respective regions.

Diversity Initiatives
Promoting Women's Careers
Approach and Goals
Komatsu actively promotes various measures in orderto achieve a desirable level of diversity in the workplace.
We have recognized that the lack of female managers
compared to male managers in our employ is an issue
that must be rectified, and are also providing support
for work-life balance initiatives with regard to childbirth,childcare, and nursing care. These include the proactive
employment of female employees, as well as theimplementation of special opportunities for our female
staff to hone and nurture their professional skills. We
have set and begun working towards the goal of having
a percentage of women in management of 8% by April
2019 and 10% by April 2021.

Systems and Status in FY2017
Komatsu is dedicated to providing multiple avenues
for female employees to develop their careers and stayahead of the competition. Continued from FY2015
to encourage mid to long-term conceptualizationof future career prospects, as well the provision of
networking workshops for female employees working
in manufacturing industries throughout Japan from34 CSR & Enviromental Report 2018 Digest

Employee Training Structure
Approach and Goals
Komatsu strives for the sustainable growth of both thecompany and employees through human resource
development. We believe that each employee is
responsible for the setting of high individual goals,
and the subsequent fulfillment of these goals. Each
employee should thus be self-reliant and highly
motivated in seeking the knowledge and skills necessary
for the fulfillment of personal objectives, while
relying on company support through our educational
programs. Komatsu supports the career development of

Employee Training Structure
FY2017.
We are also engaged in a number of ventures tohelp acclimatize prospective female employeeswith Komatsu. These include discussion meetingsfor different job categories, and holding career andnetworking events in cooperation with external groups
and schools for female engineers.
Komatsu is widely recognized and assured by externalgroups with regards to our pursuits in diversity.
We have been named by the Ministry of Economy, Trade,and Industry, as well as the Tokyo Stock Exchange as aNadeshiko Brand company for our fourth year running(since FY 2014). These accolades take into account the
number of women in managerial positions at Komatsu(including executive officers), our installation of utility
facilities at manufacturing sites such as toilets andrestrooms in accordance with company-wide guidelines,
the creation of an infrastructure which actively promotes
the employment and engagement of female talent,thus guaranteeing Komatsu's
position as a listed company
that excels in the promotionof career development for
Nadeshiko Brand logo
women.

Job roles

Executive

Skilled
Executive
officer

New Executive Officer's Program

Executive

Global Management
Seminar (GMS)
Suprememastermechanic

GlobalManagement
Development
ProgramChiefmastermechanic

Manager Refreshment Training

Dept. GM

Professional / Expert

K-Way Leadership
Development
Program (KLDP)

each employee focusing on the education required tocompany management and employees.
While we promote the education of professionals ina wide variety of proficiencies, Komatsu is aware of
the importance for the dissemination of knowledge
and skills at every level within the company. Regularexplanatory sessions and discussions are convened
at Group companies to propagate the KOMATSU way,
ensuring that it is incorporated as an integral componentof our human resource development on a group-wide
scale.
Training for Selected employees

Training by Job rank

Other (Training by job function)

Training for Non-Japanese employees

Skilled Worker ／ Technical Employee

Intermediate

TQM Training for General Managers
QC Instructor Development Program

Assistantmanager

Mastermechanic

Entry leveltraining

QC Circle Instructor
Training

Cross-industrial Training
New Assistant Manager Training

Training by job function
Women’s Career Training

Advanced
Technic
Contest(ATC)

3rd and 7th Year Training
Experienced Employee TrainingNew
employee

TQM Training for Managers

New Manager Training
Study
AbroadNew Employee Training

Admin./All Employees

TQM Training for New Expats

K-Way Expert
Development
Program (KEDP)

Middle Management Strategy Program
Sectionmanager

Choice-type training

TQM (QC) training

Skilled Worker

Concept of CSR activities

time, and Europe and USA of the traditional market. In
USA, as a tool to introduce the fact that the KOMATSU
Way is being practiced naturally in operations invarious parts of the world, we have completed andpublished the North American version of Komatsu Way
experiences collection which was being produced from
FY2016 . We will further advance the global consolidationof the Komatsu Way by developing the North American
version of the experiences collection produced this time
as a sample to other regions.

Enhancing Quality of Life

2. We shall treat and appraise each individual employee in a fair and impartial manner. We shall not discriminate against any

In FY2017, training was held in South Africa for the firststandards that all workers at every level of managementin the Komatsu Group are expected to meet and uphold.
Through these shared principles, employees of theGroup will be able to establish a unified framework thattranscends nationality and age to enhance workplace(gemba) capability, dynamism, and the quality ofwork life. This in turn will serve to showcase thestrength, reliability, and robust nature of our brand, thus
reinforcing the trust placed in the Group by society andour stakeholders. We will further improve on our "quality
and reliability".

Developing People

1. We shall respect each employee's fundamental human rights, inherent personality, individuality, and legally protected privacy.

The KOMATSU Way is a statement of values andGrowing with Society

Global Personnel Policy

Status in FY2017

Social Contribution Activities

terms of value would be our employees. We are proud to maintain a culture that places our people at the forefront ofour priorities, recognizing the importance of their roles in maintaining the quality of our products and the reputationof our company. Komatsu is thus dedicated to the development of our workforce, striving to foster an engaging work
environment that provides opportunities for creativity and challenges to stimulate growth, all the while building on arelationship of mutual trust with our employees.

Approach of The KOMATSU Way

TechnoServiceSchoo

Meister Training

GlobalTechnical
Institute (GTI)

Foremen Training

Domestic TechnicalInstitute

All Komatsu
Technology
Olympics

QC Circle Promoter
Training
Assistant
ForemenTraining

Human
Komatsu
Mid-level
Resource
College of Industrial Employee
Development Technology
Training
Center(Philippines)

QC Circle
LeaderTraining

QualityEngineering

Intermediate-level TQM
Elementary-level TQM

All Komatsu QC Convention

time are all irreplaceable facets of our day-to-day operations. However, the one resource that stands above all others in

QC presentation by job function

Here at Komatsu, we consider many aspects of our business to be valuable assets. Goods, money, information, and

The KOMATSU Way

KMPI activity (Admin related dept.)

Concept of CSR activities
Enhancing Quality of Life

Personnel Policy and Performance Appraisal System

DATA
Employee Training
FY2015FY2016FY2017

Average hours per FTE

96

76

58

Average spent per FTE

JPY244,000

JPY246,000

JPY255,000* Non-consolidated data for Komatsu Ltd.

CSR & Enviromental Report 2018 Digest 35

working hours per year, along with the provision of
an average of at least 18 days of paid leave per year

Solutions against Low Birthrate and Longevity".

FY201646

57

FY201759

Childcare leaves

89

98

120

Male

9

10

15

Within one week leave

1

1

0

Return and retention
rates

96.7％

100％

97.5％

FY2015FY2016FY20176

4

4

Family-care leave
Family-care leaves

Paid vacation
FY2015FY2016FY2017

Days granted

20.0

20.0

20.0

Days taken

18.4

19.2

19.4

Ratio

92.2％

95.8％

96.8％

Volunteer incentive program
FY2015FY2016FY2017

Number of program
users

92

95

71

Long-term leaves

1

0

0

Information on this page is non-consolidated data with the exception of certain programs, which encompass not only Komatsu Ltd. but also our subsidiaries in Japan.

Childcare support

Content

Childcare leave program

Available for a maximum of three years from the birth of the child to the time thechild 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.

Part-time work

Shortening of working hours by a maximum of three hours per day to allow for careof children up to the third grade of elementary school

Telework program

Option to work at home in order to care for children up to the third grade ofelementary school

Allowance toward thecost of using childcare
services

Allowance toward the cost of childcare for infants up to age two before entering
nursery school (10,000 yen/month)Nursing leave

Five days for nursing care of one child up to the third grade of elementary school, andten days for the second child onward (paid leave) . Allowance granted to cover thecost of using childcare services

Family-care leave
program

A maximum of three years available for employees taking care of family members(possible to take in installments)

Part-time work

Shortening of working hours by a maximum of three hours per day (possible to takein installments)

Telework program

Option to work at home for a maximum of three years in order to provide care forfamily members

Care leave

Five days per year for attending to one family member in need of nursing care, andten days for the second family member onward (paid leave)

Enhancing the Technical Capabilities of Our Manufacturing Operations
Systems and Status in FY2017
With major advancements in technologies andglobalization within our production operations,the need for a high level of technical capability has
become all the more relevant. As such, we havedesignated the third Saturday of every October as"Technical Day", holding technical competitions for
employees from all areas of Komatsu. These include
personnel from overseas subsidiaries and businessassociates, who come together to maintain and improve the overall technical capabilities of the Komat-

su Group through mutual dedication to studying.
In FY2006, Komatsu established the Meister systemthat focuses on the passing down of technical knowhow from production sites. Techniques and skills that
we have judged to be worth passing on are divided
into 9 fields that each comprise of 15 specific competencies, with a "First Meister" certified for each competency. Under Komatsu's Mother Plant System, production plants with product development capabilities are
specified as "Mother Plants".

Growing with Society

Strengthening Our "Gemba" Capability

Main Programs and Measures Designed to Enhance Work-Life Balance

Programs and Measures

Concept of CSR activities

for each employee. As of FY2018, we have introduced
an“interval system”that enforces a minimum of 10hours of rest following long periods of work in orderto promote a“safe and healthy”manner of working.
In addition, we consider the arrangement of systems
for child care leave and short working hours to be arequisite in creating a sustainable work environment.
Our efforts to promote work-life balance in the workplace have not gone unnoticed, and in 2007, we werecertified by the Japan Ministry of Health, Labour, andWelfare with the "Kurumin" symbol. This prestigious
accolade marks us as a company that supports the development of the next generation, and has encouraged
us to bolster our already significant commitments.
In addition to child-care leave and the reduction ofworking hours, we launched the "Panel on Fostering
Future Generations", as well as the "Research Group on

FY2015Pregnancy leaves

Enhancing Quality of Life

The maintenance of a healthy work-life balance is an
integral component in bringing the best out of our employees. Studies have shown that individuals who areable to nurture a fulfilling personal life alongside theirwork commitments are both more motivated and driven, while being able to draw out the full potential of
their abilities. With this understanding in mind, Komatsu is working to reduce the total number of required
working hours for our personnel while introducing a
number of work-life balance systems to improve workplace sustainability.
We are currently engaged in co-operative undertakings with labor unions in order to formulate specific quantifiable targets to reduce the total numberof working hours for our employees. These efforts
have proven to be highly productive, allowing us
to establish commendable goals of less than 2,100

Parental leave

Developing People

Past Endeavors and Status in FY2017

DATA

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Enhancing Work-Life Balance

Service Personnel Human Resource Development

Care support

Life support leave

Other types of leave

Flexible 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 third grade in junior highschoolProvided to encourage employees to take five consecutive days of leave for mental
and physical rejuvenation
Employees receive an additional five days of annual leave and a travel voucher uponcompletion of their 15th, 25th and 35th year of continued service

Volunteer incentive
programLong-term paid leave of up to two years, or short-term paid leave of 12 days per year

Spousal transfer
occupational leavesystemAcquisition for up to three years per spousal transfer (Acquisition up to one per
employee)

36 CSR & Enviromental Report 2018 Digest

TOPICS

Asia Training & Demonstration Center in Thailand

Ko m a t s u enh a n ce s t r a inin g s a t t h e A si a
Training & Demonstration Center in Thailand
to s treng then it s tr aining capabilities for
distributors in Asia. Training sessions officiallybegan there in November 2016.
Equipped with over 20 dif ferent models,the center boasts a wide range of utility, fromproduct and technical training for distributors

to machine demonstrations and trials. Ourcenter even provides operator training forend-customers to promote sales. In FY2017,
we w e l c o m e dapproximately
3,000 agents andcustomers in total.

CSR & Enviromental Report 2018 Digest 37

Company by society and all our stakeholders.
In order to raise the total sum of reliability, it is necessary not only to improve business performance and to enhance the soundness and transparency of management, but to also become a company that has acquired societal
trust. Thus, it is increasingly important for any company to comply with the rules of business society.

Basic Principles and Structure for Risk Management
In addition to the basic policy for risk management toensure business continuity and stable development,
Komatsu has established Risk Management Rules tocorrectly recognize and manage risks.
●Komatsu has established a Risk Management Committee
to devise relevant policies for the entire Group, review therisk management system, and evaluate and improve upon
response measures in place for each risk, as well as to takecontrol of risks when they arise. The committee regularly

Frameworks for Promoting Compliance

Risk Management Structure

Board of directors

To make cer tain that the entire Komatsu Group
complies with the rules of the business community,
Komatsu has appointed an executive officer at thehead office in charge of compliance, and established
the Compliance Department to handle this issue

Executive Function
President

Risk Management Committee(Emergency Headquarters)

Upholding Thorough Compliancereports on its deliberations and activities to the board of
directors.
Risk Management Committee

Komatsu will establish an emergency headquarters whenserious risks occur and implement appropriate measures
to minimize damage.
●・Each Department, Each Group Company
・Department responsible for each risk category

Human Right Management Issues
Komatsu signed the United Nations Global Compact
in 2008. In an effort to apply its major principles
for protec ting human right s, Komat su utilized
the help of external experts (BSR, or Business forSocial Responsibility) to conduct a human rights
risk assessment for all of its construction/mining
equipment and forestr y machiner y businesses
worldwide in 2014 and once again in 2017, taking
guidance from the Universal Declaration of Human

Rights and the U.N. Guiding Principles on Business andHuman Rights.
The results showed that the degree of urgency for
problems occurring is low, while the degree of effectif a problem does occur is moderate. However, thehuman rights risk might not be removed depending on
the business, area and contractors, so we will respondflexibly as needed.

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 are not included in the
J-SOX audits, which are conducted in accordance with
the Financial Instruments and Exchange Act of Japan toevaluate internal controls related to financial reporting andidentify potential compliance risks within the company,
with a particular focus on confirming and evaluating thestatus of legal compliance. Our internal specialist teamconducts the internal audits at Komatsu and its Japanese/overseas affiliates, as well as independently-owned
distributors and Midori-kai member companies.
Through these audits, we strive to raise the control andcompliance awareness levels at each company and inevery department.

exclusively. The Compliance Committee, chaired by
the president and CEO, deliberates the Group's action
policies and important issues while regularly reporting
the state of compliance-related activities to the boardof directors.

So that employees remain continuously aware ofcompliance, the Group is working to cultivate theirconsciousness of best business practices by displaying
business unit posters in every Komatsu Group listing
The Five Principles of Compliance (a condensed versionof Komatsu's Code of Worldwide Business Conduct).
The Group engages in awareness-raising initiatives,with a page dedicated to compliance on its intranet aswell as well-developed compliance-related educationand training that corresponds to each employee rank
and their respective duties. The Group strives to detectrisks early and implement reforms at Komatsu business
units and Group companies through monitoring during
financial audits and compliance and risk audits. The
monitoring covers compliance in highly important
areas such as safety and environmental practices.

Internal Reporting System
Komatsu has established the "Compliance Hotline"
consultation office both internally and externally at
Komatsu Group companies to respond to consultations
or reporting from Group company employees thatpertain to best business practices or questionableactions. The Group actively encourages consultations
and reporting through Komatsu's Worldwide Code ofBusiness Conduct, the Five Principles of Compliance,

and Group companies' workplace rules, making it clearthat employees who use the system for appropriate
reporting will not be treated unfairly in any way as aresult of their action.
Number of Internal Reports
Number of Internal Reports(number of serious cases)

FY2015FY2016FY2017

68（0）

95（0）

105（0）

Concept of CSR activities

nent of our management principles. The Company believes its corporate value is the total sum of trust given to the

problems, and elimination of anti-social forces. The company has adopted the following measures to counter theserisks.

Enhancing Quality of Life

Komatsu considers the maximization of corporate value with the pursuit of Quality and Reliability as a core compo-

particularly compliance issues, environmental issues, product quality concerns, accidents, information security

Developing People

The Komatsu Group recognizes all uncertainties that could threaten the Group's sustained growth as risks,

Growing with Society

Compliance

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Risk Management

Implementation of Compliance and Risk Audits

With regard to anti-corruption（Incidents）
600
502

500
400

534

559

342
288

300
200

531

575

142

145

191

100
0

Number of employees who were dismissed because of conflict with
Komatsu's anti-corruption policy (global)
Fines imposed on Komatsu related to corruption / Amount ofpenalties (global)
Number of employee training sessions on anticorruption prevention(in Japan)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
（FY）

Antimonopoly act
Information security
Export Control
Vehicle inspection & speciﬁed
Quality assurance & recall
Audit of sales subsidiary
Accounting
Labor
Environment
SafetyWorkplace instruction

600
Establishment of internal reporting system related to corruption

500(global)400

Fiscal Year 2017: ZeroFiscal Year 2017: ZeroFiscal year 2017: 11 times
Target audience: Approximately 60 (planned to be transferredoverseas)
Prevention of corruption is specified in "Komatsu's Worldwide Codeof Business Conduct" as a key priority issue. If there is any suspicion orconcern involving corruption or the violation of business society rules,
concerned parties are invited to use the Compliance Hotlines establishedat the Komatsu Head Office or within each region to report the problem.

300
38 CSR & Enviromental Report 2018 Digest

200

CSR & Enviromental Report 2018 Digest 39

Growing with Society

Establishment and Improvement of Corporate GovernanceIn 1999 Komatsu Ltd. introduced the Executive
Officer System and has been working to separate
management decision making and super visor yfunctions 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 numberof members and appoint Outside Directors and Outside

Audit & Supervisory Board Members. To improve theeffectiveness of 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
matters and prompt decision making. We have alsoestablished the International Advisory Board (IAB) as ameans to supplement executive functions.

General Meeting of Shareholders
Elect/Discharge

Elect/Discharge

Elect/Discharge

Audit
Audit & Supervisory
Board

Office of Corporate
Auditors' Staff(Standing 2 / Outside 3)

Collaboration
Audit

Audit reports

International
Advisory Board

Advice/SuggestBoard of Directors

Accounting Auditors(Standing 5 / Outside 3)

Elect/
Discharge/
Supervise

Report/Submission

Advice/Suggest(Audit corporation)

Human Resource Advisory
Committee
Recommend

Compensation Advisory
Committee

Executive Functions
President & CEO
Internal Auditing Dept.
Strategy Review Committee

Internal Audit

Komatsu Group's Global Operations
Executive Officers and Global Officers 63

Compliance Committee
Earth Environment Committee
CSR Committee
Development Strategy Meeting
Risk Management Committee
Information Security Committee
Information Disclosure Committeewith our partners in CSR initiatives will contribute significantly to corporate success and subsequent expansion, andthus endeavors to commit to this undertaking.

Our Support for Komatsu Midori-kai in FY2017
Komatsu Midori-kai is an organization that consistsof our business partners, with domestic membership
totaling a number of 156 member companies. Given
the scale of this organization, it comes as no surprisethat 75% of our domestic procurement is sourced
through these firms. We engage the managementof these companies through multiple avenues, suchas the general assembly, general meetings, and New
Years’special meetings. In these discussions, Komatsu
executives take the chance to explain our policies,emphasize the importance of CSR management, andrequest that awareness be raised with regards to CSR
policies.
Midori-kai companies are grouped into 5 different
categories by their specific item of production, witheach group collaborating with Komatsu to promote
CSR improvement initiatives for each of the shared
themes of safety, the environment, and state-of-the-art
technologies. Case examples regarding improvementin these areas are shared within the companies of
the group through a system that promotes the lateraldissemination of information.
Midori-kai organizations are not limited to Japan,
but exist in North America, Europe, and China as well.
These organizations are made up of Komatsu’s majorbusiness partners within the region, and take the same
steps to improve on CSR activities in accordance tospecific regional characteristics.

・Japan 34
Collaboration

Status on initiatives in FY2017
SafetyAs part of the effort to strengthen safety and healthactivities, we conduct continuous safety patrols for 99
companies, share information on labor accidents, andexecute lateral sharing of safety measures throughsafety activities presentation meetings. These activities
have a significant impact on increasing company safetylevels, ensuring an appropriate working environment
for personnel.

Environment
We enforce the acquisition of a number of certifications,such as ISO14001 and Eco Stage. We are proud to reportthat as a result of our commitment to this mandatory
implementation, all 156 domestic companies within
the Midori-kai have received certification.

Personnel Development
We promote the development of young individuals
in management positions at our business partners
through the implementation of“Management Salons”.
Through these engagements, Komatsu executives
e xc h a n g e v i e w s w i t h t h eir l e s s - e x p er i en ce dcounterpar ts to nur ture and guide them in their
vocations. This creates a“win-win”situation, allowing
us to align our respective management policies andimplement PDCA cycles while enhancing the skills of
our treasured partners.

Concept of CSR activities

management on a group-wide basis. To fur ther
improve the transparency of management for ourshareholders and investors, we disclose information
in a fair and timely manner and actively engage ininvestor relations’activities by holding meetings withshareholders and investors.

Enhancing Quality of LifeWe, at Komatsu Ltd., believe our corporate value
is the total sum of trust given to us by society andall s takeholders. To become a company whichenjoys more trust from shareholders and all otherstakeholders, we are working to strengthen corporate
governance, improve management ef f icienc y,
ad vo c a te cor p or a te e t hic s and ensure s oundDeveloping People

necessary for the continued operation of our manufacturing enterprise. Komatsu believes that collaborative efforts

Growing with Society

Our business partners are important members of our value chain who supply the materials, parts, and components

Basic Stance

Corporate Governance of Komatsu

Social Contribution Activities

Support for CSR Initiatives of Business Partners

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People

Corporate Governance・Global 29(including 19 foreign nationals)

Policy and Actions Regarding Conflict Minerals

Decide on the details of the items including election and discharge/Confirm suitability or independency of the Accounting Auditors
Recommend
Audit reports

Board of Directors

Audit & Supervisory Board

Komatsu Ltd. holds Board of Directors’meetings periodically at least once every month. The Board of Directors deliberates and makes resolutions on importantmatters, determines management policies of Komatsu,
and rigorously controls and supervises the executionof duties by all members of the executive management team including Representative Directors. Of the
8 Directors on the Board, three are Outside Directors toensure transparent and objective management.

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 meetings of 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 periodicallyat least once every month, and the Board performs
appropriate audits by such means as hearing reports
from members of the executive management team on
their execution of duties.

40 CSR & Enviromental Report 2018 Digest

In line with our corporate social responsibilities,
Komatsu does not condone the use of conf lic tmaterials produced by the Democratic Republic ofCongo (DRC), or its neighbors (Angola, Central African
Republic, Republic of the Congo, Rwanda, Southern
Sudan, Tanzania, Uganda and Zambia).
This policy has been disseminated to our suppliers
through our regular Komatsu plant meetings, whohave been made aware of our stance and related
requirements. Working hand-in-hand with suppliers,

we conducted a country-of-origin survey to determine
the location of origin of our minerals to ensure thatnone of them are sourced from areas of conflict.
Moving forward, we will continue to take steps toenforce strict adherence to this policy, which will serve
to restrict funding for military groups situated in suchareas. Any conflict materials discovered to be within
our suppler chain will be immediately discontinued
from use.

CSR & Enviromental Report 2018 Digest 41

2.Thorough Enforcement of Compliance
1. Engage in business operations while complying
with the laws and regulations as well as the rules of
the Business Community of the host countries andregions.
2. Develop a corporate climate under the leadershipof top management, which places top priority oncompliance.
3. Build up compliance-responsive operations,according to the scale and characteristics of yourcompany, designed to prevent your company,
executives or employees from wrongdoings andto respond to any compliance-related problems
promptly when they occur.

3.Product Safety, QCD and Technology Innovation
1. Comply with the laws and regulations concerning
product safety and deliver products and services
which will offer safety and peace of mind to
customers.
2. In addition to maintaining the quality and costcompetitiveness of products and services which yourcompany delivers to customers, stand by the agreed
upon date of delivery and supply your products in astable manner.
3. Establish quality control operations.
4. Constantly engage in technology development andprovide innovative, safe and environmental-friendly
products and services.

4.Considerations for the Environment
1. Continue efforts to reduce environmental impact
resulting from business operations.
2. Appropriately manage chemical substances
contained in products.
3. Build up environmental management systems suchas the ISO14000 series and "Eco Stage."

42 CSR & Enviromental Report 2018 Digest

1. Respect human rights.
2. Never get involved, directly or indirectly, in any childor forced labor.
3. Cr eate a work environment where there is nodiscrimination or harassment in any aspect of
employment.
4. Build up an occupational safety and health operational
structure under the leadership of top management andcreate a work environment where all employees canwork in safe and healthy conditions.
5. In addition to establishing a fair and just personnel
system, pay attention to human resource development
and employee education as well.
6. Give consideration to improving communication
between top management and employees.

6.Fair Business Practices
1. Comply with all related laws and regulations andengage in free and fair competition and business
transactions.
2. Respect intellectual properties of other parties andwork to prevent infringement thereof. Appropriately
handle information (including personal information)of your company and other companies.
3. Never accept inappropriate cash, gifts or other favors.
4. Carry out proper foreign trade transactions (goods
and technologies) while complying with the related
laws and regulations.
5. Never have any relationship with antisocial forces orgroups.

7. Social Contributions and Co-existencewith the Local Community
1. Engage in social contribution activities based on yourcompany's management principle(s) and support
employees' volunteer activities.
2. Place importance on co-existence with local
communities which is the foundation of yourbusiness, and proactively support the growth of local
communities.

* These guidelines will be revised as needed.

Biodiversity" and "Biodiversity Guideline" in January 2011,

when deciding how land is to be used, such as when

Komatsu business units worldwide began activities
designed to preserve biodiversity.
Komatsu promotes initiatives to preserve biodiversity
on two levels.
First, the Company continues to promote ongoing
efforts to reduce the environmental impact of Komatsu's

building factories.
Second, Komatsu is becoming directly involved in
the preservation of biodiversity, and at the same time
expanding our "one-site, one-theme activities" to raise
employee's awareness of the need to preserve local
ecosystems.

Initiatives from Specific Business Facilities
Testing Department Test Engineering Center
Fully utilizing the different aspects of naturally abundant land while maintaining the habitats of rare flora andfauna unique to the local area
Oita's rich natural environment is home to one of our
testing sites, where we conduct quality confirmation
tests for our construction machines .
We have thus conducted an investigation of animals
and plants in FY2011 across each of the four seasons toknow the potential impacts on the surrounding area.
We found that the animal and plant species uniqueto this region have not suffered any negative impacts,
and are instead growing and thriving.
We have continued this commitment to biodiversity
through a number conservation activities involving
the waterside environment and the reparation ofdevastated forests etc. Of the animals involved in
our investigation, we found that the majority ofthem consisted of birds, amphibians, and insects
who inhabited locations near to bodies of water. The
conclusion can be drawn that the waterfront plays apivotal role in the sustainable living of these creatures,
which makes it doubly as important for us to ensure
the continued quality of water in the surrounding
regions. We have made efforts to improve upon thesehabitats through the use of natural materials in our
testing site, which has allowed us to enhance thetopography of the area while ensuring that the travel
routes of these animals are not compromised.
We have worked hard to ensure the maintenanceof devastated forest regions near our site to create
an ideal“Satoyama”(undeveloped woodlands near
populated areas), where natural light is in abundance.
This provides plants that are low-growing (such as
Kinran) with an environment that encourages theirpropagation, enabling them to grow and thrive.
In order to ensure appropriate accountability andcompliance with our commitment, we have createda distribution map of amphibians and Kinran throughyearly censuses. The results from these surveys have
proven favorable, with an increase in population
statistics across the board. With this success in mind,
we will continue to maintain and improve on ourconservation efforts to ensure that the whole test site
is managed appropriately.
Komatsu engages external lecturers on a regularbasis to train our employees in order to create aculture of environmental conservation amongst our
workforce. These training efforts afford personnel
at all levels with an understanding and awareness of
the importance of biodiversity conservation activities,
which has thus far led to excellent results in themaintenance of the environment in our test site. In
FY2017, employees will learn the tree cutting method
known as“Yamazakura”, which will prove extremely
beneficial to woodland conservatory efforts. Following
this trend of woodland conservation, we also hope tohave our employees engage in tree-planting activities
for the local community in the future.
Our conservation activities are not limited to within
the test site, but encompass much of the surrounding
areas as well. We clean the neighboring Onogawa
river four times a year, and have established a
dedicated corner at a business establishment fairthat teaches local residents about the importance of
biodiversity.

Salamander

KinranEducation by external lecturers

Scenery of the Onogawa Cleanup

Concept of CSR activities

1. Build a system or operational structure designed tomeet various risks.
2. Establish legal and transparent decision-making
processes concerning management.
3. Conduct appropriate accounting procedures, tax
filing and settlement of accounts.
4. Place importance on communication with stakeholders(customers,shareholders,business partners,employees, etc.).
5. Ensure that top management will be notified
promptly when any abnormal condition develops
and that your company will be able to promptly andaccurately respond to the situation(s).

5.Measures to Respect Human Rights, Appropriate
Labor Conditions and Occupational Safety and Healthbusiness activities. Komatsu also considers biodiversity

Enhancing Quality of Life

1.Operations for Sound Management

With the establishment of Komatsu's "Declaration of

Developing People

Komatsu Group CSR Procurement Guidelines : What we would like to ask our business partners in the supply chain

Growing with Society（ Established on August 30, 2011）

Biodiversity

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

CSR Procurement Guidelines

CSR & Enviromental Report 2018 Digest 43

Addressing Soil and Groundwater Contamination
Komatsu has established guidelines for testing soil andgroundwater in our domestic operations, and continues
to ensure that appropriate investigative measures arein place to determine strict compliance to laws andregulations regarding the selling, closing, or destructionof business units. Should any contamination bediscovered, Komatsu works alongside local authorities
to take appropriate measures.
We voluntarily perform investigations on in-operation
business units, in order to test for contamination
stemming from VOC's in the cleaning solvents that weuse.
We have been carrying out surveyance of soil andgroundwater for VOC contaminations at domestic

emissions per units of manufacturing value.
Komatsu Cabtec Co., Ltd.'s Painting Line

Amount of PRTR-related Substances Released into the atmospherebusiness units since 2005, and have implemented
countermeasures at any sites that have been found to
be contaminated. Komatsu is committed to the prompt
resolution of any issues, and works to ensure that all cleanup processes are executed with speed and efficiency.
Our clean-up of the Oyama plant was completed in
FY2009, with clean-up operations for other sites currently
ongoing. To assure the quality and haste by which these
operations are completed, we continuously assess andrefine the effectiveness of our clean-up procedures.
Moving forward, in addition to the management of

1,200
1,000
800
600
400
200
0

CleanupstatusBusiness unit

Cleanup method

In process

Shonan Plant

Excavation and removal,
groundwater withdrawal and aeration

In process

Komatsu Plant(former site)

Excavation and removal, groundwater withdrawal
In process
and aeration, bioremediation

Tochigi Plant

Excavation and removal, bioremediation

In process

Osaka Plant

Soil vapor extraction, air sparging, groundwater
withdrawal and aeration, bioremediation

1,036
6.4

8

977
7.0
5.9

570
4.7

402
2.6 2.5

690

Amount of VOC Released
（t）
2,000

525

3.1 3.0 2.9

463
2.4

386 375 363
2.1

4

90

1,500

6
575

（%）
120

100.0 103.7

1,000

86.9

71.1
45.9 48.2

39.8
500

2

41.2
1,449 1,622 1,690 1,318 561 829

2.0 1.802005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017（FY）

0

Index per Unit of Manufacturing Value

48.0
969

803

60
38.9

33.1 34.9 34.1

775 661550 582 619

30

02005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017（FY）
Amount of VOC Released

Index per Unit of Manufacturing Value(Compared FY2005)

Reducing the Use of Substances of Environmental Concern and Complying with the EU REACH Regulation
Komatsu is aware of the harmful environmental impacts
that certain materials possess, and has made continuous
efforts from an early stage to reduce the use of a numberof such substances. These included asbestos, lead, andother such items. In FY1999, we created our own list of
banned and limited-use substances, which was based inpart on Japanese legislation (Japanese Law Concerning
the Examination and Regulation of Manufacture ofChemical Substances Control) that banned a numberof chemical materials as well as regulatory measures inother countries.
We have also implemented more stringent measuresin the control of substances that raise environmental

CleanupstatusAwazu Plant＊1＊

Cleanup method

10

1,288
1,214

PRTR emissions

clean-up operations, Komatsu has committed to ensuringthat our off-site outflow of ground water meets regulatory
standards through meticulous monitoring systems at thesite boundaries.

Excavation and removal, soil vapor extraction,
groundwater withdrawal and aeration,bioremediation

Note:Substances handled in quantities of 1 ton or more
（kg/million yen）

（t）
1,400

Status of Soil and Groundwater Cleanup in Japan
Business unit

Concept of CSR activities

maintain a 50% reduction (as compared to FY2005) in the amount of VOC

Komatsu Group companies periodically report and archive environmental measurement results, in compliance with theapplicable laws and regulations of national and local authorities. In FY2017, there were four minor instances of violations
with regards to environmental regulations. All four cases have been summarily dealt with and resolved.
There were no major environmental accidents which might pollute the environment on the boundary of our site during
this period.

In process

Bio-remediation is a purification process whereby hazardous materials are purified using micro- organisms. This return the soil to a non-hazardous state.
Investigative surveys revealed zero contamination in the Koriyama Plant, Technology Innovation Center in Hiratsuka, Techno Center in Izu and Field Testing
Department in Oita.

＊

concerns. In compliance with REACH , we began＊

revisions of our FY1999 listing of banned and limiteduse substances. We have also collaborated with
suppliers to create a regulatory system thatstrengthens control of potentially harmful materials
being used for production. We have rolled thissystem out in Japan and Europe, with plans tocontinue implementation in other areas of operation.
Through the use of this system, we identify SVHC
(substances of very high concern) in vehicles currently
in production and in newly developed vehicles.
Furthermore, we also regularly check for new SVHCs to be
added to the list.

REACH: EU regulations for the Registration, Evaluation, Authorization and Restriction of Chemicals

Management of Chemical Substances and Pollution Prevention
Water Related Risk Management
Reducing the amount of PRTR-related substances
In FY2017 the number of substances specified by
PRTR* with a handling volume of 1 ton or more (0.5
tons or more for Class I specified) was 27 with anincrease of 4 substances from the previous year.
Out of all PRTR-listed substances, xylene, ethyl
benzene and toluene account for approximately
93% of the emissions from Komatsu and KomatsuGroup manufacturing facilities. Most of theseemissions are released into the atmosphere.
In FY2017, the amount of xylene, ethylbenzene
and toluene handled has been reduced from2016, as production is increasing as the switch
to coatings and thinners with less PRTR type 1
designated chemical substances progresses.
We will continue to make efforts to switch to lesspaint containing PRTR type I designated chemical
substances, thinner, high solids of paint, improve

44 CSR & Enviromental Report 2018 Digest

coating efficiency, and reduce the coating film
thickness. Emissions in fiscal 2017 were reduced byabout 4% from the previous year.
＊

In accordance with our Earth Environment Charter, thefirst half of FY2015 saw the Komatsu Group focus on
two salient areas:

PRTR : Law designed to mandate the disclosure of the amount of specificchemical substances released into the environment to promote themanagement of such substances (The notification system based on the
PRTR Law)●

Breakdown of the Amount of PRTR-related Substances
Released and Transferred from Komatsu Group
Manufacturing Facilities in Japan
Other 2.5％

Xylene 11.9％

Nickel 1.6％

Ethylbenzene 8.7％

Molybdenum andits compounds 3.9％
Chromium andits compounds
10.9％

Manganese andits compounds
33.8％

Other 5.0％
Xylene 2.9％

Toluene 4.0％
Atmosphericdischarge
26.1％
transferred
Adherence to（Waste）
products
4.6％
52.5％ Chemicallytransformed
or eliminated
16.8％

Other 1.9％
Ethylbenzene
0.9％
Xylene 0.8％
Manganese andits compounds
0.8％
Toluene 0.8％

Other 0.9％
Methylnaphthalene
5.4％
Trimethylbenzene
3.3％
Note: Substances handled in quantities 1 ton or more●

その他 2.5％ニッケル 1.6％
モリブデンおよび
その化合物 3.9％
クロムおよびその化合物
10.9％
マンガンおよびその化合物 33.8％

その他 5.0％
キシレン 2.9％

Promoting reductions in water-usage (input),
and increasing the recycling (circulation) of water.
Activities centered on water quality conservation

However, in response to the frequency of weather
abnormalities and societal demands(2015/1 Water
キシレン 11.9％
エチルベンゼン 8.7％
Crisis named as the number one
riskat
トルエン 4.0％ Davos Forum大気へのその他 1.9％
排出etc.), Komatsu has since establishedthe“Water-Related
エチルベンゼン
26.1％
0.9％
製品への
移動量
Risk
Evaluation
Committee”
inthesecondhalf of 2015.
キシレン
0.8％
（廃棄物）
付着
4.6％
マンガンおよび52.5％
Thiscommittee
engages in thestudyofwater-related
化学変化
その化合物 0.8％
除去量
トルエン 0.8％ Risk Survey”
issues, and16.8％
conducted a“Water-Related
その他0.9％after half a year of learning.
Thissurvey engaged
メチルナフタレン 5.4％
1,2,4トリメチルベンゼン
both our domestic and foreign
affiliates,
seeking to3.3％
注：取扱量1t以上（但し、特定第一種は0.5t以上）
understand business-related water impacts and improveupon Komatsu's water policies.

Enhancing Quality of Life

Despite a slight increase in emissions in FY2017, we have managed to

Developing People

contained in paint, such as Xylene and Ethyl benzene.

Promoting Legal Compliance, and Pollution Mitigation and Prevention

Growing with Society

The majority of VOC (Volatile Organic Compounds) emissions are from VOC

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Reducing the amount of VOC released

Environmental Risk Management

Results from the Water Related Risk Survey(conducted at 45 global affiliates/divisions in January 2016)●

Effect of heavy rain on operations/business●

Risk of pollution from drainage●

Effect of river flooding on the supply chain

Our water-related policies for FY2016 onwards havethus been changed to reflect the result of this survey.
In addition to the continuation of previous initiatives
and activities, we are now newly promoting“WaterRelated Risk Reduction Activities”in order to minimize
the impacts of water-related risks within our business
operations.

CSR & Enviromental Report 2018 Digest 45

jobs. It opens the world to them."

Battambang Province villages where we are providing

Asked what they wanted to be when they grew up, the"We developed these machines special for this [pur-aid and partnering with local communities, peace andchildren added policemen and carpenters to the list.

pose]," said Atsushi Nagira, General Manager, Demining

happiness radiated on residents' faces in areas where

and Reconstruction Project, Construction Equipment

the land has been cleared.

Marketing Div., Komatsu Ltd. "Not for sale, but for society."cleared," said the female farmer.

kindness of peers thousands of miles away. Classrooms
are decorated with Japanese pieces of art such as
calligraphy and origami (paper folding), and a library

We first started designing the demining machine inbearing the Komatsu name is comprised of items

2002 when redevelopment initiatives gained momen-

Komatsu has also done much more to empowertum in Afghanistan and Cambodia. Eager to help unite

the villagers than just remove active landmines.

as global citizens and provide a service to areas in need,

Together with these government organizations,

Growing up in areas now free of the threat of

we tested the first machine in Afghanistan with support

community partners and local residents, we are building

landmines, these children will help shape Cambodia's

In western Cambodia, a land peppered with as manyfrom the Japanese government and later handed it overcommunities: clearing the land of overgrowth, building

future. Living with their families on redeveloped land

gleaming temples as tin roofs, there's a destructive

to a local NGO (non-governmental organization) for use

or rebuilding roads, and constructing primary schools.

distributed to residents free of charge through anthreat buried just beneath the surface of everyday life:

there utilizing Japan's ODA (Official Development As-"There is a great need here," Nagira "Many schools areapplication process, this new generation doesn't haveactive landmines left from the Cambodian Civil War.

sistance) funds. The machines are modified versions ofneeded and the work must continue after the schools,

to know the fear of trying to make a living on land that is

In certain areas - generally known to locals but not

Komatsu bulldozers, featuring specially designed roller

too. Employing people and giving them places to live."

unsafe.

secured- one wrong step can mean devastation. The an-pulverizers in front of the equipment and bulletproof,

We have now helped redevelop 10 villages in areasti-personnel mines still lurking in Cambodia's rural coun-soundproof operator cabins that keep safe those work-

previously riddled with active landmines.

tryside were designed to maim or kill a person. Less

ing to clear the fields. The deminers are painted white,common but more powerful are the anti-tank mines,

one of the official colors of the United Nations.

donated from Japan for the school.

"When we provide aid, we have to enable those we areaiding to be self-sustainable," said Nagira. "The project is
to foster people. We must do more than clear the land.

Komatsu equipment was used to build local roads

We must work with the government … to make life
sustainable."

In 2008, we joined JMAS in their efforts to build upon

for more than 60 kilometers, connecting villages that

These areas of danger are overgrown with bushes

CMAC's ongoing manual efforts to remove landmines

previously were difficult if not impossible to access

For the female mango farmer and her husband, theand trees, as residents have learned where they cannot

in Cambodia. The "Project for Developing a Safe Village"

during monsoon season. We provided a bridge for one

plot of land they received 10 years ago through thefarm or live safely. But in a country where 90 percent

in Battambang District includes landmine removal andvillage particularly cut off during monsoon season, andBattambang Province Demining and Reconstructionof impoverished residents live in the countryside, mostcommunity reconstruction in areas suffering from thehelped build 46 ponds for the villages, which previously

Project is truly special, because it's theirs.

have no choice but to continue to farm the land in andimpacts of anti-personnel landmines.

had no water supply. And eight new primary schools

strong enough to destroy heavy machinery.

now serve nearly 600 local students.

around these areas of threat.
Social Contribution Activities"We are so happy and so grateful that the mines are

Through a cultural exchange with Japanese
schoolchildren, the students also experience theKomatsu provided free of charge a demining machine"Most students want to go to school and now they

Since 2008, we have been supporting a unique com-

for removing landmines, and related equipment

can," said a teacher at Chror Narb Phes Komatsu Primary

munity development project undertaken by the Japan

including a hydraulic excavator and bulldozer for earth

School, built in 2011. "Komatsu's vision and leadership

Mine Action Service (JMAS) in cooperation with the Cam-

excavation and ground leveling work. Today, there

have helped make this project a reality."

bodian Mine Action Center (CMAC), to remove theseare four Komatsu demining machines in Cambodia.

Young children in these villages now aspire to become

landmines and redevelop villages where families can

Residents who are part of CMAC operate the equipment.

doctors, nurses and teachers because they have a place

live, work and play without fear.

When asked what it's like to drive the deminer andto learn and thrive.

By donating special equipment designed by Komatsu

detonate deadly landmines, one operator said "this is heavy

engineers to safely remove anti-personnel landmines,

duty equipment, so it's no problem. We feel very safe."

Older local schools have dirt floors and tin roofs that

we have supported the clearing of about 1,400 mines

According to Nagira, "Not only the people, but also ourmake the monsoon rains incredibly loud. Some of

spread across more than 1,700 hectares of land.

equipment is very tough."

Concept of CSR activities

in landmine accidents. During a March visit to theand work.

Enhancing Quality of Life

Fostering Community
Growth in Cambodia

ing machine, these teams clear areas for residents to live

Developing People

ImpactSince 2006, the area has seen an 82 percent decrease"I'm so happy," she said. "It's a small land but I have my

Growing with SocietyPart of our"The students come to school and learn about otherbulldozer to cut brush and a specially designed demin-own. I am happy to live here."Social Contribution Activities

Growing with Society

Developing People

Enhancing Quality of Life

Concept of CSR activities

Special Story

these schools have to close during the rainiest days as
students and teachers cannot hear one another and theground floods.

"Before the landmines were cleared," said one female
resident in Battambang Province, "it was like a forest. All

At Chror Narb Phes Komatsu Primary School, happy

the people were scared to come into the forest. Now

schoolchildren now sit at desks under a sturdy roof withthe land is safe for people to live," she said. The wom-solid floors beneath their feet. Reciting their lessons

an lives with her husband on a plot of land in one ofin unison, they learn math and writing, dreaming of

the redeveloped areas. They farm the land where theygrowing up to be like the teachers they so admire.
"Many children's parents are farmers, which is hardbuilt their own home, growing mangos and other food.

work," said one of the school's teachers.

As a valued community partner, we work with CMAC
and JMAS to respond to local governments' requests toclear areas of known landmine activity. Using a Komatsu

46 CSR & Enviromental Report 2018 Digest

Classroom under study roof with solid floors

CSR & Enviromental Report 2018 Digest 47

5 Basic Principles for Social Contribution

Social Contribution Expenditures of the Komatsu GroupAims:

We have divided and summarized the results of our social contributions into 6 general categories. These canbe found in the infographic below:

To clarify the responsibilities of Komatsu Group and its
employees as members of the local community andguide their activities for social contribution accordingly.

Principles: Activities for social contribution should:●

have continuity;●contribute to the advancement of public welfare;●be voluntary (not forced);●be reasonable to employees; and●not be designed to advertise our products or services.

Academic andIndustry-Academia
Collaborations
14％

FY2017
1,822 million yen

Culture & Sports
25％

Disaster Relief

Human Resource
Development
24％(consolidated)

P.48

Local Community
Support27％

9％Environment

1％

Komatsu's Initiatives for the Social Issues
As Komatsu develops business on a global scale, we listen to the opinions of the people who live in each area
and conduct support activities to improve the living standards of the people in the local community. We believethat conducting such social contribution activities is the responsibility of those doing business in that area.

USA：Support for housing improvement

Oceania：Employee engagement program for com-

(Komatsu Mining Corp.)

munity support (Komatsu Australia & Komatsu Mining Corp.)

Employees of Komatsu Mining Corp. (KMC) participated involunteering activities for the Non-Profit Organization(NPO),
Habitat for Humanity. Habitat for Humanity is an NPO thataims to support a range of home building and community
projects, focusing on practical support that makes a real,
tangible difference to the lives of of those most in need. We
support Habitat for Humanity's efforts in improving andsecuring housing by setting up sanitation facilities, spreading construction technology, building a community that isstrong against disasters, supporting the development of
the entire community, and providing building support forhouses. A total of 110 KMC employees have participated intangible activities thus far. In September 2017, 11 employeesof Komatsu America Corp. (KAC) came together to jointly
support housing improvement near Milwaukee, where KMC
headquarters are located.

In Oceania, Komatsu Australia (KAL) is focused on employee engagement activities to support the resolution of local
community issues. We shared various challenges that employees are focusing on throughout the company, asking
them to come up with potential solutions to these problems
known as "DREAM"s. We received a total of 42 entries from
employees within a time frame of 3 months (from September 2017), from which 8 winners were selected. These winners were provided with grants from the company, as wellas the freedom to carry out their plans independently.
Owing to the diverse nature of these issues, such as "Revegetation of salt and soil affected areas back to a healthy
eco system" and "Supporting families affected by domestic
and family violence", we have also opened up the possibility for collaborative efforts with local NPOs involved in the
resolution of such issues.

Between manufacturing and foundry plants, distrib-

donation to the American Red Cross to support Hurricane Harvey relief efforts.
Komatsu America also matched dollar-for-dollar,
all contributions made by Komatsu America Corp.
(KAC) and subsidiary-company employees. Subsidiary companies include Komatsu Financial, Komatsu
Mining Corp., Modular Mining Systems, Inc., Hensley
Industries, Inc., NTC America Corp., Komatsu America Industries, LLC, Gigaphoton USA, Komatsu Forklift
USA, Komatsu Equipment Company, Komatsu SouthWest, F&M Equipment, Ltd., Komatsu do Brasil Ltda.,
Komatsu Cummins Chile Arrienda S.A. and Komatsu
Holding South America Ltda.

utors and other support functions, there are morethan 1,000 Komatsu-affiliated staff members andtheir families in the state of Texas alone.
“Speaking on behalf of the Komatsu family ofcompanies, we have been moved by the stories
of loss, courage and comradery coming out of thestorm-damaged areas in the wake of Hurricane Harvey,“ said Rod Schrader, CEO of Komatsu America
Corp.
“ We are pleased to support the American Red
Cross in their efforts to help families and communities begin the journey towards recovery and rebuilding,“ Schrader said.

Clearing Anti-Personnel Landmines and Reconstruction Support
As of 2008, Komatsu has engaged in collaborative
efforts with the Japan Mine Action Service (JMAS) to
support the demining of anti-personnel landmines.
In addition to removing mines, we also provide reconstruction work as part of a community development project.
We started support of unexploded bomb disposal
activities in 2016 in Laos.
In Laos, about 36% of the land is riddled with
unexploded bombs, many of which are cluster
sub-munitions. This is a problem on a massive
scale, with children and farmers suffering bomb-related injuries on a yearly basis.

Komatsu’s demining machine

Komatsu plays its part by offering the necessary
equipment to UXO-LAO (a Lao unexploded bomb
disposal squad) and the Japan Mine Action Service(JMAS) free of charge, alongside engineering support for the machines it provides.
Following the success of the demining machine
for anti-personnel landmines we have used komatsu's
past experiences and techniques to develop removal machines for processing unexplode ordnancebased on hydraulic excavator PC130-8, and continue the disposal activities.

Machine developed based on hydraulic excavator (for processing unexploded
ordnance)

Results of Demining and Reconstruction Support
Activities in Cambodia (Cumulative)
Item
Demined area
Total removal countRoad construction / maintenanceSupport for Habitat for Humanity activities

48 CSR & Enviromental Report 2018 Digest

LIVE YOUR DREAM

Concept of CSR activities

Komatsu America Corp. provided a $250,000 cash

Enhancing Quality of Lifeof the importance for“Social Contribution Activities“ that help nurture and develop the local communities in
our areas of operation. We emphasize themes in our social contributions which utilize the business acumen andknow-how that we have cultivated in our business operations. This in turn allows us to make use of our existing
expertise to greatly increase the beneficial impact and reach of our contributory activities.

Assistance to America・Hurricane disaster area

Developing People

that a business take responsibility for local engagement within the social sphere. Komatsu is thus acutely aware

Growing with Society

While much of a business’s responsibilities lie within the corporate sphere, it is nonetheless equally as importantSocial Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People
Growing with Society
Social Contribution Activities

Disaster Relief

Social Contribution Activities

Result (Cumulative Total by FY2017)
1,735ha1,360 landmines
61.8kmSchools constructed

8 (about 600 school children)

Ponds constructed

46

Lecturing on anti-personnel landmine disposal at an elementary school

CSR & Enviromental Report 2018 Digest 49

Various Areas and Forms of Support
Developing Human Resources Tailored to
Regional Needs Worldwide

ent parts of Japan, USA 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 thelevel of education necessary to find employment, due
to circumstances specific to their country 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
our daily cultivated know-how can be best put to use.

Using the know-how cultivated through our corebusiness, Komatsu supports the development ofskills in people that are needed not only internallyby our company, but by local communities as well.
Expectations for human resources can vary greatly
from community to community. At Komatsu, as we dobusiness on a global scale, we try to understand 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 areasin which Komatsu is supporting human resource development. It also shows that the closer 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 differ-Support for Developing Human Resources
Cooperatingwith theCommunity andCustomers

We provide needed support for regions where human resource development is asocial challenge, in cooperation with customers and national and local governments.

Supporting Vocational
Training Schools

We support industrial vitalization and employment promotion by providing
instructors, programs and equipment to vocational training schools.

Supporting Universities

Providing Basic Education

Supporting Children's Education

We support specialized courses such as electronics and mechanicalConcept of CSR activities

sharing of valuable requisite resources and knowhow. In promoting social contribution activities in thepast, Komatsu has collaborated with entities like NPO
organizations that have their own unique know-how ofCSR. And in 2016, we have entered into a contract withour business partner, Cummins Inc. of U.S., to collaborateon the development of local human resources.
We will globally expand our development of humanresources through the comprehensive utilization of eachother's resources and best practices.

Trade neme

Cummins Inc.

Established

1919

Headquarters

Columbus, Indiana, U.S.

Businesssegments

Engine, Power systems, Components,

URL

http://www.cummins.com/

Distribution

Collaboration program of both companies（- 1）Case of South Africa -Collaboration program of both companies（- 2）
Case of Peru -Komatsu supports the technical education program(Technical Education for Communities: TEC) that Cummins is developing in various countries around theworld, and has developed various joint programs.
Our activities in South Africa, which took place inMarch 2018, are a good example of this program.
Through a three-year program at the local vocational
training school Sedibeng College, we aim to develop human resources capable of repairing and maintaining both engines and construction machinery.
The shortage of skilled technicians has become aserious problem all over the world, especially in the
manufacturing industry. Due to the massive lack of both
hands-on and soft skills, we are currently experiencing
a severe labor shortage. TEC provides various tools to
vocational training schools for young aspirants to fullyacquire the skills necessary for employment and to participate actively in society, building a better country forthe future.

Komatsu has also developed a TEC program in Peru,
South America in collaboration with Cummins. We
started a program to support the SENATI (Servicio Nacional de Adiestramiento en Trabajo Industrial) Arequipa (a local vocational training school) from FY 2016,
and are working to provide the training of mining andconstruction machine skills in the 3 year course. While
Peru has social issues such as economic disparity andinequality in education, we believe that investmentsin the mining industry are expected to cause it to expand further. As a result of this, the training of mining
and construction machine skills is an urgent issue.
More than half of the mine sites in Peru are located in
the southern region, of which Arequipa city is the center.
Since many mining companies are developing businesses in the suburbs, graduates who have studied at theschool will not need to leave their local communities,
even if they are employed in neighboring mining companies in the future. We will continue to make use of ourbusiness acumen and equipment to develop support
activities that create a good number of job opportunities
in the area.

engineering to contribute to human resource development.

We support employment by providing training in computer

Enhancing Quality of Life

resource development programs that are tailored to each region's needs and enable participants to acquire skills thatwill open up various employment opportunities.

effective than activities conducted alone, due to theDeveloping People

cooperation with several entities (such as national and local governments as well as schools), to carry out human

We believe that collaborative CSR activities are more

Growing with Society

and make the best use of Komatsu's strengths?" We arrived at the answer: "developing people." We are working in

Collaboration with Cummins Inc.

Social Contribution Activities

Concept of CSR activities
Enhancing Quality of Life
Developing People

When we asked ourselves: "What sort of social contribution activities would meet the needs of regional communities

Social Contribution Activities

Growing with Society

Developing People Needed by the Community

operations and basic learning.

Our employees and alumni go to elementary and middle
schools as visiting instructors at science classes and so on.
Students attending the school

Dispatching instructors

50 CSR & Enviromental Report 2018 Digest

Providing teaching materials andequipment

Providing facilities and supporting
operations

Accepting apprentices

Vocational training school supported by Cummins andKomatsu

SENATI Arequipa

CSR & Enviromental Report 2018 Digest 51