DIC REPORT 2021
The DIC Group Integrated ReportComplete Version

“The DIC Way” was formulated to represent the
DIC Group’s fundamental management philosophy.
In line with The DIC Way, the DIC Group willcontinue to promote efforts aimed at enhancing
corporate value and achieving sustainable growth.

The DIC Way
MissionWe create enhanced value and utilize innovation to
introduce socially responsible and sustainable products.

MissionVisionColor & Comfort by Chemistry
We improve the human condition by safely bringing
color and comfort into people’s lives.*

Core Values

EnterprisingCore Values
Enterprising: Lead with a passion for excellence that is evident in thesolution-focused actions taken each day to drive value through innovation.*

VisionIntegrity

Integrity: Be honest, forthright, and ethical in all dealings with customers,
suppliers, and coworkers.*

Sustainability

Dedication & Loyalty: Take responsibility for performance in the ofﬁce,
laboratory, and factory, by demonstrating commitment to customers,
suppliers, and coworkers.*

Dedication & Loyalty

Diversity: Respect other viewpoints and work collaboratively whilevaluing collective goals over personal interests to achieve excellence;
foster communication and cooperation with people from all backgrounds.*

Company

Diversity

Social Responsibility: Go beyond compliance to promote products andactivities that achieve socially responsible and sustainable developmentthat protects the environment.*

Social Responsibility*Annotation

DIC Report 2021

1

Society

Contents&RQQHFWLQJWKH',&*URXSDQGLWV6WDNHKROGHUVThe DIC Group: A Global Powerhouse)LQDQFLDODQG1RQÀQDQFLDO,QIRUPDWLRQ$0HVVDJHIURPWKH3UHVLGHQW
<HDU6XPPDU\$0HVVDJHIURPWKH&)2
7KH',&*URXS·V$SSURDFKWR9DOXH&UHDWLRQ
Fiscal Year 2020 DIC Group Topics',&*URXS&RPPXQLFDWLRQV7RROVThe DIC Group uses a variety of tools to promote communication withits many stakeholders to encourage greater awareness of the Group’s
activities. More detailed sustainability-related information and data canbe found on the DIC global website.

3ULQWHG3'))RUP3XEOLFDWLRQV

Reports on activities',&5HSRUW',&5HSRUW VXPPDU\YHUVLRQ FRPSOHWHYHUVLRQ

3
5
7
12
13
15
17

7KH',&*URXS·V%XVLQHVV3RUWIROLR
Packaging & Graphic
Color & Display
Functional Products',&5HSRUW)LQDQFLDO6HFWLRQ

19
21
23

3URGXFW'HYHORSPHQW'HVLJQHGWR&UHDWH1HZ9DOXH
Employing Chemical Recycling to Realize a Closed-Loop Recycling System
for Polystyrene Food Containers
Nashiji Film Made with Biomass Plastic (DIFAREN ® A7440Bio)
An FFC that Improves the Skin’s Barrier Function from the Inside Out(PHYCONA Skin Moistlifting Tablets)
Special Feature

Summary integrated
report (published annually)(printed publication)

Complete report(published annually)(PDF-form publication)

Report on resultsof operations and¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

26
30
33

Activities

Sun Chemicalʼs Activities
DIC Asia Pacificʼs Activities
DIC (China)ʼs Activities',&*OREDO:HEVLWH

Real-time information
WEB https://www.dic-global.com/en/
Umbrella website providing information to
the global public about the DIC Group andreports on its various activities; updated
as necessary

39&RUSRUDWH*RYHUQDQFH$0HVVDJHIURPDQ2XWVLGH'LUHFWRU
3URPRWLQJ'LJLWDO7UDQVIRUPDWLRQ'LUHFWRUV$XGLW 6XSHUYLVRU\%RDUG0HPEHUVDQG([HFXWLYH2IÀFHUV
0DWHULDOLW\$QDO\VLV
A 0HVVDJHIURPWKH+HDGRIWKH(6*8QLW
6XVWDLQDELOLW\,QGH[
6XSSRUWIRUWKH7&)'
2YHUYLHZRI6XVWDLQDELOLW\$ERXWWKLV5HSRUWIn previous years, the DIC Group published a combined corporate
profile and sustainability report with the aim of presenting a clear,easy-to-understand picture of the Group and its sustainability
initiatives. Since 2017, the Group has published the DIC Report as an
LQWHJUDWHGUHSRUWZKLFKFRPELQHV¿QDQFLDOLQIRUPDWLRQHQFRPSDVVLQJ
consolidated operating results and corporate strategies, andQRQ¿QDQFLDO VXVWDLQDELOLW\ LQIRUPDWLRQ7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW SULQWHG ZKLFKIRFXVHVRQ
key highlights, and a more detailed complete version (PDF), whichcontains extensive quantitative data.

Compliance
BCM and Crisis Management
Information Security
Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement',&5HSRUW &RPSOHWHYHUVLRQ  3')IRUPSXEOLFDWLRQ
WEB

37
38

https://www.dic-global.com/en/csr/annual/Note: $VXVHGKHUHLQWKHWHUP³$VLD±3DFL¿FUHJLRQ´²DJHRJUDSKLFGHVLJQDWLRQWKDWOLNH³(XURSHDQGWKH$PHULFDV´DQG
³*UHDWHU&KLQD´UHSUHVHQWVDJURXSLQJRIFRPSDQLHVRYHUVHHQE\DUHJLRQDOKHDGTXDUWHUV²UHIHUVWR$VLD H[FOXGLQJ-DSDQDQG*UHDWHU&KLQD DQG2FHDQLD7KHWHUP³$VLDDQG2FHDQLD´UHIHUVWR$VLD H[FOXGLQJ-DSDQ DQG2FHDQLD

/LQNZLWKWKH',&*OREDO:HEVLWH

Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.
',&JOREDOZHEVLWH WEB https://www.dic-global.com/en/

6FRSHRI5HSRUWLQJIn principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC global website.
WEB https://www.dic-global.com/pdf/csr/environment/dic_report_scope_en_2021.pdf',&5HSRUWDQGWKH*5,6WDQGDUGV7KLUG3DUW\9HULÀFDWLRQ
7KLUG3DUW\2SLQLRQ5HJDUGLQJ',&5HSRUW
',&*URXS0LOHVWRQHV)LQDQFLDO6HFWLRQ

5HSRUWLQJ3HULRG
Fiscal year 2020 (January 1–December 31, 2020)'DWHRI3XEOLFDWLRQ
June 2021 (The next report is scheduled for publication in June 2022.)

40
45
46
48
50
52
54
56
59
62
64
67
69
112
115
132
135
137
140
144
150
155
157
158
C1‒50

&RYHU'HVLJQ*XLGHOLQHV5HIHUHQFHG

The cover of this year’s DIC Report derives its
LQVSLUDWLRQIURPWKH',&*URXS¶V³&RORU &RPIRUW´brand slogan, employing bright colors that evoke
the efforts of the Group, a global powerhouse, toenrich and add vibrancy to society and the lives ofpeople everywhere.

Guidelines referenced in the preparation of this report were ISO 26000, theInternational Organization for Standardization’s standard for social responsibility,
released in 2010; Japan’s Responsible Care Code; and the Global Reporting
Initiative (GRI)’s GRI Standards.

DIC Report 2021

2

The DIC Group: A Global Powerhouse
Net Sales

Corporate Data
Registered name:

Number of subsidiaries
and affiliates:(

173 Domestic: 29
Overseas: 144

701.2

768.6

400

805.5

600

789.4

Date of foundation:
Date of incorporation:
Paid-in capital:
Number of employees:

800

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,242(Nonconsolidated: 3,360)

751.4

Corporate headquarters:(Billions of yen)

1,000

’16

’17

’18 ’19 ’20 （FY）

200
0Operating Income(Billions of yen)

60

)

50

39.7

41.3

20

48.4

30

56.5

Note: Corporate data is as of December 31,
2020. Net sales and operating income
are for fiscal year 2020.

54.2

40
Corporate headquarters (Tokyo)’16’17 ’18 ’19 ’20 （FY）

100

Sun Chemical Corporation
headquarters (United States)

Global Network
DIC has 173 companies in 62 countries andterritories around the world.

Europe

53

14

29
Asia

North, Central andSouth America

58

Sun Chemical Group and others

Japan

Europe and Africa

Japan

Sun Chemical Groupand others

Net sales¥165.1billion

Net sales

Operating income

Asia and Oceania

Africa2¥271.2 billion

Operating income¥19.4(Excluding Japan)

DIC (China) Co., Ltd., DIC Asia
Pacific Pte Ltd and others

Net sales¥140.0 billion¥125.0 billion

Operating income¥4.8 billion

14billion

Oceania

Central & SouthAmerica

Operating income¥13.9 billion

DIC (China) Co., Ltd. (PRC)

Net sales

DIC Corporation, DIC Graphics
Corporation and others

3¥9.5 billion

North
America

DIC Asia Pacific Pte Ltd (Singapore)

DIC Report 2021

3

Breakdown of Fiscal Year 2020 Net Sales by Segment

Breakdown of Fiscal Year 2020 Operating Income by Segment

Functional
Products

Functional
Products￥701.2

32.3%

billionColor &
Display

36.1%

Packaging &Graphic￥39.7
billion

53.2%

Packaging &Graphic

46.0%

Color &
Display

14.5%

17.8%

Note: Fiscal year 2020 net sales and operating income as used here include intersegment transactions. For this reason, and because of the existence of transactions classified as “others,” which are not attributable to reportable segments, these figuresdiffer from reported net sales and operating income.

Breakdown of Fiscal Year 2020 Operating Income by Region

Breakdown of Fiscal Year 2020 Net Sales by Region
Asia and Oceania

Asia and Oceania

20.0%

29.2%

North, Central andSouth America￥701.2billion

17.8%

Japan

North, Central andSouth America

38.7%

￥39.7

10.1%

Europe and Africa

billion

Japan

40.7%

Europe and Africa

23.5%

20.0%

Note: Operating income as used here includes eliminations (approximately ¥7.9 billion). Accordingly, these percentages do not represent shares of reported operating income.

Principal Global R&D Sites
Printing Inks
Technical Center—
China

Cincinnati (United States)

Polymer Technical Center —China
Qingdao DIC Finechemicals(PRC)

Rochdale(United Kingdom)

St. Charles (United States)
Midsomer Norton(United Kingdom)
Fine Chemical
Technical Center—Korea

Gallarta(Spain)Eurolab(Germany)

Solid Compound
Technical Center—
Asia Pacific (Malaysia)

Central ResearchLaboratories (Japan)

Pigment Technical Center—
Asia Pacific (Indonesia)
Polymer Technical Center —Asia Pacific (Thailand)

Printing Inks Technical Center—
Asia Pacific (Thailand)

DIC Report 2021

4

DIC/Earthrise Algae ResearchCenter (United States)

Carlstadt (United States))LQDQFLDO,QIRUPDWLRQNet Sales, Operating Income and Operating Margin
Net sales

Operating income

Net Cash Provided by Operating Activities and Free Cash Flow

Operating margin (%)

Net sales(Billions of yen)

70

Operating income(Billions of yen)

900
800

805.5

789.4

751.4

700

Net cash provided by operating activities
Free cash flow

(Billions of yen)

701.2
7.2%

7.2%

6.0%
5.4%

600

62.5

80

768.6

60

54.2

70

54.5

51.0

50.6

50

5.7%

60
40

500

50

400

40

30

300

30

20

200

20

54.2

56.5

48.4

41.3

39.7

30.3
25.8
21.4

10

12.6

10

100

0
0
2016

2017

2018

2019

(FY)

2020

0

-4.7

-5
2016

2017

2018

2019

(FY)

2020

2ZLQJWRDQLQYHVWPHQWRI ¥ELOOLRQLQ7$,<2+2/',1*6&2/7'QHWFDVKXVHGLQLQYHVWLQJ
DFWLYLWLHVLQFUHDVHGLQ¿VFDO\HDUNet Income Attributable to Owners of the Parent and ROE

Capital Expenditure and Investment(Billions of yen)

Net income attributable to owners of the parent
Return on equity (ROE) (%)(Billions of yen)

70

62.4

50

60

38.6

40

50

34.8

32.0

（%）
30

30

37.5

37.1

2019

2020

32.1

23.5

30

20

20

12.9%

13.0%

20

13.2

10.4%
7.7%

10

10

4.2%
0

45.1

40

2016

2017

2018

2019

10

(FY)

2020

0

0
2016

2017

2018

(FY)

2ZLQJWRDQLQYHVWPHQWRI ¥ELOOLRQLQ7$,<2+2/',1*6&2/7'FDSLWDOH[SHQGLWXUHDQGLQYHVWPHQWLQFUHDVHGLQ¿VFDO\HDU

Returns to Shareholders* (Dividends per Share and Payout Ratio)

Net Assets, Interest-Bearing Debt and D/C Ratio*
Interest-bearing debt

Net assets

D/C ratio (%)

Interim dividend

Payout ratio (%)

Year-end dividend(Billions of yen)

71.5%

（%）
75

400

70
65

（%）
70

60
55

300

265.7

264.5

241.3

60

266.7

252.6

50
45

50
200

44.0%

43.6%

44.7%

42.4%

36.9%
(Yen)

40

43.2%

150

307.0

344.0

327.3

343.5

120
100

351.4

60

20

65

2018

2019

2020

(FY)

100

40

50

60

50

25
20
15
10

40
2017

100

50

10

2016

30

125

100
60

0

35

27.3%

30
100

40

40.3%

29.4%

0

0

'HEWWRFDSLWDO '& UDWLR,QWHUHVWEHDULQJGHEW ,QWHUHVWEHDULQJGHEW1HWDVVHWV

2016

60
2017

60
2018

2019

2020

)LJXUHVKDYHEHHQDGMXVWHGWRUHÀHFWWKHLPSDFWRIWKHFRQVROLGDWLRQRIVKDUHVDIC Report 2021

5

5
(FY)

0

1RQ¿QDQFLDO,QIRUPDWLRQ
Global CO2 Emissions and CO2 Emissions per
Unit of Production (DIC Group)
CO 2 emissions

Global Energy Consumption and Energy Consumption per
Unit of Production (DIC Group)
Energy consumption

CO 2 emissions per unit of production(Tonnes)(Kg CO2 /tonne)

1,000,000

400(GJ/tonne)(Thousands of GJ)

800,000
700,000

5.

659,000 659,000

12,000

296

292

5.

5.142

5.014

5.108
5

10,717 10,379

10,000635,000 618,000

600,000

155

11,100 11,379 11,053 10,902

11,000

300

272

270

5.360

144

13,000305

614,000900,000

311

Energy consumption per unit of production

4

9,000

577,000 552,000

8,000
200

500,000

3

7,000
6,000

400,000

5,000
300,000

2

4,000

100

3,000

200,000

1

2,000
100,000

1,000

0
2015

2016

2017

2018

2019

2020

(FY)

0

0

* &22HPLVVLRQVSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

2015

2016

2017

2018

2019

(FY)

2020

0

* (QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

Environment-Friendly Products as a Percentage of Overall
Product Portfolio (DIC Corporation and DIC Graphics Corporation)

Occupational Accident Frequency Rate (DIC Corporation)（%）(Rate)

100

1.50

DIC

Overall manufacturing industry in Japan

2015

2016

90
1.00

80
70
60

53%

56%

56%

57%

0.50

59%

58%

50

0.00
2012

40

2013

2014

2017

2018

2019

2020 (FY)

Note: The frequency rate expresses the frequency of accidents resulting in workdays lost in a fiscal year,
calculated as the number of deaths or injuries per million work hours.

30
20Frequency rate ＝

10
0

2015

2016

2017

2018

2019

2020

Male employees

Total work hours

Female Employees in Management Positions (DIC Corporation)

Female employees

Female employees(Number of people)
60

Percentage of total (%)（%）

57

Average years of employment in fiscal year 2020
Male employees:

× 1,000,000

A frequency rate of 1.00 means one occupational accident resulting in workdays lost in one year
at a site with 500 employees.

(FY)

Average Years of Employment (DIC Corporation)(Years)Number of deaths or injuries due to occupational accidents

7

18.3 years Female employees: 20.1years Overall:18.6 years

52
48

50

6

25
5.9%

41

5.5%

40

20

33
15

30

5

5.1%
4.4%

28

4

3.7%

10
20

3

3.1%

5

2
10

0
1994

1

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)0

DIC Report 2021

6

2016

2017

2018

2019

2020

2021

(FY)

0

A Message fromthe President

Kaoru Ino
Representative Director
President and CEO
DIC Corporation

Future vision:
Become a unique global
company that is trusted bysociety by providing value(safety and peace of mind,
color and comfort)

“We are marshaling our capabilities to addressincreasingly urgent social imperatives and help
realize a sustainable society.”
One of the world’s leading diversified chemicals companies, DIC is also the core of the DIC Group, a multinational organization
comprising 173 companies in 62 countries and territories. The DIC Group is the world’s leading manufacturer of printing inksand core printing ink raw material organic pigments, as well as of polyphenylene sulfide (PPS) compounds—major engineering
plastics—in terms of global market share. Against a backdrop of rapid global change, the Group continues to marshal its
capabilities to promote business portfolio transformation and provide value, positioning it to respond to expectations and earntrust worldwide.

Fiscal Year 2020 in Review
With the spread of COVID-19, fiscal year 2020 forced us to contend with significant changes in society, as well as in our role
as a corporate entity. Hindered by the protracted impact of the pandemic, consolidated net sales declined 8.8%, to ¥701.2
billion, while operating income slipped 4.0%, to ¥39.7 billion. Net income attributable to owners of the parent fell sharply,
owing to one-time costs and the recognition of an extraordinary loss on the divestiture of a business of U.S. subsidiary Sun
Chemical Corporation, both associated with our acquisition of BASF SE’s Colors & Effects business. However, thanks tosigns of economic recovery beginning in the fourth quarter, the Company projects higher net sales and operating income inall segments in fiscal year 2021.

The DIC Way: Addressing Social Imperatives in an Environment of Dramatic Change
The world today is under pressure to respond not only to the protracted impact of COVID-19 but also to changes in society
itself. With the United Nations (UN) adoption of the Sustainable Development Goals (SDGs), related initiatives are underway
by countries and regions, as well as by companies and individuals. Youth activism, in particular, is on the rise, underscoredby social media–based efforts to engage young people and promote understanding. The spread of capitalism and rapid
globalization have intensified wealth inequality around the world. With countries and regions, as well as corporate entities,
increasingly striving to build sustainability and environmental, social and governance (ESG) considerations into their socialand economic activities, new metrics for analyzing investments have been developed. This has led to the emergence of what
has come to be known as ESG investing, which continues to transform the rules whereby the competitiveness of companies
is judged. In Japan, Prime Minister Yoshihide Suga has declared that the country will become carbon neutral by 2050. Going
green, including by implementing the green recovery plans set forth by countries around the world, and going digital, throughefforts to leverage artificial intelligence (AI) and digital transformation (DX), are vital, global challenges that are directly linked
to social imperatives. At the same time, both are factors that will drive the global economy in the future.
Amid both of these paradigm shifts, it is important for a company to reconsider its goals, its raison d’être. The DIC Way,an articulation of our management approach adopted in 2008, identifies our mission as being to contribute to sustainable
development for our customers and society. Our current medium-term management plan, DIC111, which began in fiscal
year 2019, outlines our future vision of becoming a unique global company that is trusted by society by focusing ourmanagement resources on businesses that deliver social value—i.e., help resolve issues facing society—and that enhance
economic value.

Mission (Outlined in The DIC Way):We create enhanced value and utilize innovation to introduce socially responsible and sustainable products.

Future vision:
Become a unique global company that is trusted by society by providing value (safety and peace of mind,
color and comfort)

DIC Report 2021

8

At present, manufacturers in such areas as automobiles, renewable energy, semiconductors and food packaging must beable to offer solutions that reduce environmental impact across entire supply chains. Materials producers have a key role toplay in the realization of such solutions. As a manufacturer of fine chemicals, we work to lower the environmental impact ofour production processes. We also seek to provide products that underpin sustainability for our customers and for markets
and in so doing to lower environmental impact at all stages of our supply chains by helping to improve the conditions in which
resources are extracted and used, as well as to curb CO 2 emissions and other environmental threats while at the same time
driving unceasing innovation to tackle substantive social issues.
Guided by The DIC Way, we will work to develop products and solutions that integrate DIC Group technologies to deliver
the social value and enhance the economic value called for in DIC111. By further allocating this economic value to bolster
management resources, we will endeavor to create a virtuous circle of growth.

Creating Value: The Road Ahead
The two basic strategies of DIC111 are Value Transformation and New Pillar Creation. In line with these strategies, we will continue
working to build a business portfolio focused on environment, safety and health (ESH)-related issues and social changes.
Value Transformation calls for rallying the DIC Group’s technological resources to advance qualitative reforms in existing corebusinesses by promoting a targeted shift toward products that provide greater value to both society and our customers, enabling
us to reinforce our business structure. In the Packaging & Graphic segment, for example, our operations have traditionallycentered on publication inks, but we have redirected our focus to products used in packaging for food products, including plastic¿OPVDGKHVLYHVDQGSDFNDJLQJLQNVFRQWULEXWLQJWRVDIHW\DQGSHDFHRIPLQGE\KHOSLQJWRHQVXUHIRRGK\JLHQH)LOPVXVHGLQ
IRRGSDFNDJLQJFRPSULVHPXOWLSOHOD\HUVRI¿OPODPLQDWHGWRJHWKHUZLWKDGKHVLYHV%\FUHDWLQJ¿OPVZLWKRXWVWDQGLQJR[\JHQ
and vapor-barrier properties, we help extend the shelf life of food and reduce food loss. Moreover, by improving the recyclabilityof printing inks and coating agents used on paper packaging for food, we provide solutions that both heighten the performanceof said packaging materials and encourage their recycling. In the Functional Products segment, our lineup of products foruse in electronics equipment includes epoxy resins compatible with 5G-enabled devices that impart excellent insulation andheat resistance, facilitating high-capacity, high-speed communications. These resins were developed using our proprietary
technologies for epoxy resins used in semiconductors and printed wiring boards used in smartphones, personal computers andonboard equipment for automobiles, among others. We have already begun developing epoxy resins for devices compatible withthe 6G cellular telecommunications standard. Value Transformation thus translates into the development of innovative products
in core businesses that offer added value and help address social imperatives.
New Pillar Creation is the leveraging of DIC Group competencies to create new growth-driving businesses that respond to ESHrelated issues and social changes. For example, we have traditionally emphasized the development of products based on organic
materials such as organic pigments and synthetic resins. Recently, we have developed inorganic materials technologies that will
DVVLVWLQRXUHIIRUWVWRKHOSWDFNOHVRFLDOLVVXHV2ISDUWLFXODUQRWHLVDGLVWLQFWLYHÀDNHDOXPLQD¿OOHUVDOHVRIZKLFKFRPPHQFHGLQ-DQXDU\$OXPLQD¿OOHUVDUHXVHGWRKHOSGLVVLSDWHWKHKHDWJHQHUDWHGLQVLGHDXWRPRWLYHDQGHOHFWURQLFVHTXLSPHQW',&¶VQHZ
ÀDNHDOXPLQD¿OOHULPSDUWVSDUWLFXODUO\RXWVWDQGLQJKHDWGLVVLSDWLQJSURSHUWLHVUHGXFLQJWKHDPRXQWQHHGHGDQGWKXVWKHZHLJKW
of components and improving performance. In the area of healthcare, we provide bioproducts such as the edible blue-green algae
6SLUXOLQDZKLFKZHZHUHWKH¿UVWFRPSDQ\WRVXFFHHGLQFXOWLYDWLQJFRPPHUFLDOO\:HKDYHDOVRPDUNHWHGSK\FRF\DQLQDYLEUDQW
blue pigment extracted from Spirulina, as Linablue, a natural blue food coloring that today is used in food products around theworld. With phycocyanin’s outstanding moisture-retention capacity recently also garnering attention, we recently commercialized aphycocyanin-based Food with Functional Claims (FFC)* that improves the skin’s barrier function.
To underpin our Value Transformation and New Pillar Creation strategies, we recently established the DIC Sustainability
Index, a proprietary index that allows us to measure the social value of our products and to assess their environmental impact
across the supply chain, thereby clarifying the direction of our efforts to address social imperatives. (For more information on
the DIC Sustainability Index and the progress of its deployment, please see page 54.)
$Q))&LVDSURGXFWWKDWLVSHUPLWWHGWRFDUU\VWDWHPHQWVDERXWVSHFL¿FKHDOWKEHQH¿WVLQFOXGLQJVFLHQWL¿FHYLGHQFHRQIRRGVDIHW\DQGHIIHFWLYHQHVV²IRUZKLFKWKHPDQXIDFWXUHUWDNHVIXOOUHVSRQVLELOLW\²RQLWV
SDFNDJLQJLQOLQHZLWKJRYHUQPHQWHVWDEOLVKHGUXOHV1RWL¿FDWLRQPXVWEHVXEPLWWHGWR-DSDQ¶V&RQVXPHU$IIDLUV$JHQF\EHIRUHDQ))&LVPDUNHWHG

Building a Robust Management Infrastructure
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to seriously examine social and economic activities, a process that served to illuminate a number of critical problems. Of particularimportance, it became very evident that Japan lags behind other economic powers in deploying IT and DX. Companies have also faced
FKDOOHQJHVRQWKHKXPDQUHVRXUFHVIURQWZLWKWKHVKLIWWRUHPRWHZRUNQDPHO\WKHGLOXWLRQRILQWHUSHUVRQDOUHODWLRQVKLSVDQGGLI¿FXOWLHVin building mutual trust, both arising from feelings of isolation. Society at large and companies in particular are working to adapt tochanges wrought by this forced experiment, as well as to overcome the shortcomings it has revealed. With remote work unmistakably
the “new normal” for the DIC Group, we are also taking decisive steps to build systems that boost employee productivity and motivation.

DIC Report 2021

9

■ Human Resources Management

There is a general consensus that many employees willcontinue to choose telework even after the pandemic,
and that systems for remote work will evolve accordingly,
meaning that hybrid remote and in-person communication
will become standard. This will necessitate changes in theway we approach training. With conventional on-the-job
training no longer a viable option, sharpening work skills,
forming relationships with colleagues and building trust
will require highly effective communication skills. We arepressing ahead with various initiatives to support work stylereforms and the expanded use of telework arrangementsby DIC Group employees. In January 2021, we establishedthe Data Science Center with the aim of fostering humanresources with specialized capabilities in such areas as data
science and materials informatics (MI),* which will greatlyLQÀXHQFHFRUSRUDWHFRPSHWLWLYHQHVVLQWKH\HDUVDKHDG+DYLQJVNLOOHGLQGLYLGXDOVZKRSURDFWLYHO\UDLVHWKHLUKDQGVWR¿OOFUXFLDOUROHVDQGZKRDVSLUHDOZD\VWRUH¿QHWKHLUFDSDELOLWLHVZLOO
help revitalize DIC and will positively impact efforts to reform work styles and transform our business portfolio. Going forward, we
ZLOOUHÀHFWQHZDZDUHQHVVJDLQHGDVDUHVXOWRIRXUH[SHULHQFHVGXULQJWKH&29,'SDQGHPLFLQHIIRUWVWRIRVWHUDQGPDQDJH
human resources. In so doing, we will endeavor to organically mobilize the diverse individuals who make up our labor force toachieve a strong corporate organization.
* MI applies statistical analysis and other informatics techniques to search large amounts of data for new materials.

■ Digital Transformation

In fiscal year 2020, we established the dedicated DX Promotion Department with the objective not only of lifting operational
HI¿FLHQF\EXWDOVRWUDQVIRUPLQJRXUEXVLQHVVHVDQGDUHZRUNLQJWRLQFRUSRUDWH';LQWRRXUSURGXFWLRQWHFKQLFDOPDUNHWLQJDQG
sales departments. At production facilities, we have introduced the Internet of Things (IoT) and are making use of AI technologies
WRFUHDWHVPDUWSODQWVWKDWFDQRSHUDWHZLWKDPLQLPXPQXPEHURIVWDIIE\UDLVLQJSURGXFWLRQHI¿FLHQF\WKURXJKWKHDXWRPDWLRQRI
reaction processes and the remote control of production processes. Looking ahead, we will continue to promote digitalization at our
production facilities, positioning us to respond to the demands of customers while at the same time rationalizing and increasing theHI¿FLHQF\RIVXSSO\FKDLQVDQGFUHDWLQJDFUXFLDOQHZLQIUDVWUXFWXUHRIVPDUWIDFLOLWLHVWKDWZLOOIXUWKHULPSURYHRXUFRPSHWLWLYHQHVV
We continue to promote the development of materials by leveraging MI, making full use of unique DIC polymer design technologies
and AI technologies to, among others, realize a new molecular structure for phenolic resins for semiconductor resists. We are also
DFWLYHO\HQJDJHGLQUHVHDUFKLQFROODERUDWLRQZLWKH[WHUQDORUJDQL]DWLRQV6LQFH¿VFDO\HDUZHKDYHSXUVXHGUHVHDUFKDLPHGDW
developing the materials of the future through quantum computer–based chemical simulation, as well as participated in a consortiumof companies, academic institutions and government bodies promoting research in the area of chemical materials that fuses
neuroscience and AI.
We are also advancing digital marketing. With face-to-face marketing activities hindered by COVID-19, we stepped up participation in
online exhibitions. In addition, we have adopted a variety of new digital tools that enable us to share sales and marketing information
with customers—to date generally conducted in person—as well as to facilitate effective remote communication in-house and raise
ZRUNHI¿FLHQF\2ZLQJWR&29,'ZHFXUUHQWO\KDYHQRFKRLFHEXWWRFRQGXFWRXUEXVLQHVVUHPRWHO\EXW,DPFRQ¿GHQWWKDWHYHQ
LQDSRVWSDQGHPLFZRUOGZHZLOOUHDOL]HFRQVLGHUDEOHEHQH¿WVE\SXUVXLQJDK\EULGVW\OHRIPDUNHWLQJWKDWFRPELQHVGLJLWDODQGLQ
person methodologies.
DX is not simply the introduction of new systems. We recognize the importance of DX as a process for fundamentally transforming
our management foundation and will continue to accelerate related efforts.
■ Improved Safety and Quality

Safety, quality and environmental concerns are cornerstones of our business as a chemicals company. Drawing on thelessons of fires that have occurred at production facilities in the past, we continue to promote production under a meticulous
configuration in a manner that reflects a priority on safety. In particular, we are working to raise awareness to ensure that
employees are able to approach their work in a manner that reflects a commitment to ensuring safety and pride in ourcapabilities as a manufacturer. Of particular note, rather than one-way communications with me simply firing off instructions
and leaving it at that, we hold site meetings that facilitate dialogue, allowing me to actually hear employees’ voices as well as
for them to hear mine. With an eye on our vision for DIC 10 years in the future, we will continue to encourage the frank and
DIC Report 202110

open exchange of views with the aim of securing safety by transforming mindsets, building a safety-oriented corporate culture
and boosting job satisfaction.
Quality is an equally high priority for manufacturers. In January 2021, we took corrective actions in light of improprieties that
arose in relation to efforts to secure approval for a certain product, causing considerable inconvenience to customers. This
LQYROYHGFODULI\LQJWKHUROHVRITXDOLW\DVVXUDQFHDQGTXDOLW\ FRQWUROWRFUHDWHDVWURQJXQL¿HGTXDOLW\PDQDJHPHQWV\VWHP
Efforts to fundamentally revamp our Group quality management framework and restore the trust of stakeholders also included
establishing a new quality committee chaired by the CEO, who is now directly responsible for the administration and supervisionof quality management Groupwide.

■ Response to Climate Change

Having set a target for reducing CO2 emissions by 30% from the fiscal year 2013 level by fiscal year 2030, we continue toinvest actively in expanding our use of renewable energy, including electric power generated using biomass, solar power andwind power, and have so far achieved reductions well ahead of forecasts. After extensive deliberations in-house, we resolved
to revise our target. We now aim to achieve carbon neutrality by fiscal year 2050, as well as to reduce CO 2 emissions by 50%
from the fiscal year 2013 level by fiscal year 2030. With many countries reframing emissions reduction targets set with theaim of realizing the goal of the Paris Agreement into milestones on the way to carbon neutrality, we will further strengthen ourefforts to ensure our achievement of carbon neutrality. Of note, in addition to expanding renewable energy as a percentage
of total energy used by the DIC Group, we intend to adopt internal carbon pricing in preparation for the introduction of carbon
border taxes, as well as to promote cooperation with business partners across the supply chain. In addition to initiatives
aimed at reducing CO 2 emissions associated with our business activities, we will actively work to expand our lineup of
products and services that contribute to decarbonization, thereby helping reduce CO 2 emissions attributable to markets, aswell as to society.

A Global Organization that Responds to the Expectations of Society
The DIC Group is committed to allocating management resources to businesses that deliver social value, which in turnenhances economic value. Perpetuating this cycle will lead to further prosperity for society and will ensure that a company
enjoys support, appreciation, trust and respect. This is the sort of organization we want to be. At present, a team of mid-tieremployees is promoting a project to formulate a concrete vision for the DIC Group of the future. This project was launchedwith the goal of creating opportunities for those employees who will lead the DIC of the future to articulate their goals for the
future and put strategies for realizing that vision into practice. It will also explore novel ways to cultivate and deploy key DIC
Group resources in response to evolving trends and needs with a view to eventual commercialization.
The era ahead is one in which organizations that leverage the diverse strengths of individuals will prosper. An organization
made up of individuals with varied capabilities can create dynamism. As a multinational organization with operations in 62
countries and territories around the world, 60% of our employees are overseas. The integration of the newly acquired Colors& Effects business will make us even more diverse. Despite the protracted impact of the COVID-19 pandemic worldwide,
we will continue working to build social value, as well as to respond to the expectations of society as a whole. In all of ourendeavors, I look forward to the ongoing support of all of our many stakeholders.

DIC Report 2021

11

12-Year Summary
Key Financial Data
112

Period

113

114

115

116

117

118

119

120

121

122

123

2014

2015

2016

2017

2018

2019

2020

2009

2010

2011

2012

Net sales (Billions of yen)

757.8

779.0

734.3

703.8

784.0

830.1

820.0

751.4

789.4

805.5

768.6

701.2

Operating income (Billions of yen)

27.8

37.2

35.0

38.5

44.1

41.1

51.1

54.2

56.5

48.4

41.3

39.7

Operating margin (%)

3.7

4.8

4.8

5.5

5.6

4.9

6.2

7.2

7.2

6.0

5.4

5.7

R&D and technology-related
expenses*1 (Billions of yen)

27.1

26.3

23.7

23.0

19.8

25.3

26.8

26.2

27.4

28.4

27.9

26.2

Of which, R&D expenses(Billions of yen)

12.4

11.0

9.1

8.8

8.8

10.9

12.2

11.2

12.4

12.9

12.5

12.0

Ordinary income (Billions of yen)

19.1

31.7

30.8

35.1

40.9

39.9

49.0

55.8

57.0

48.7

41.3

36.5

Net income attributable to ownersof the parent (Billions of yen)

2.5

15.8

18.2

19.1

28.8

25.2

37.4

34.8

38.6

32.0

23.5

13.2

EBITDA (Billions of yen)

48.8

63.7

61.5

65.2

69.1

77.0

94.0

82.6

86.1

81.4

67.4

55.6

EBITDA margin (%)

6.4

8.2

8.4

9.3

9.8

9.3

11.5

11.0

10.9

10.1

8.8

7.9

Total assets (Billions of yen)

749.9

703.8

675.1

693.0

761.7

803.7

778.9

764.8

831.8

801.3

803.1

818.0

Net assets (Billions of yen)

122.8

130.4

124.5

160.7

218.9

276.7

289.9

307.0

344.0

327.3

343.5

351.4

Fiscal year

2013

*3

IncomeFinancial Position

Equity ratio (%)

13.5

15.3

15.1

19.8

25.6

31.1

33.7

36.4

37.9

37.3

38.9

38.9

Interest-bearing debt
(Billions of yen)

377.7

337.6

328.5

315.6

299.1

274.2

259.5

241.3

265.7

264.5

252.6

266.7

D/C ratio (%)

75.5

72.1

72.5

66.3

57.7

49.8

47.2

44.0

43.6

44.7

42.4

43.2

Net cash provided by operating
activities (Billions of yen)

39.5

30.9

31.2

41.4

33.9

46.4

29.1

62.5

54.2

51.0

50.6

54.5

Net cash used in investing activities(Billions of yen)

(12.5)(12.3)(17.6)(23.7)(9.8)(27.4)(10.0)(32.2)(58.9)(38.4)(24.9)(33.0))UHHFDVKÀRZ %LOOLRQVRI\HQ

27.0

18.6

13.7

17.7

24.0

19.0

19.1

30.3

(4.7)

12.6

25.8

21.4

Net cash provided by (used in)¿QDQFLQJDFWLYLWLHV %LOOLRQVRI\HQ(16.0)(26.3)(7.1)(26.6)(32.8)(26.1)(24.8)(26.9)

11.4(11.8)(26.8)

6.3

Cash and cash equivalents(Billions of yen)

29.5

22.9

29.6

22.5

15.0

16.4

15.1

16.7

17.7

18.6

16.7

41.4

Earnings per share (Yen)

32.11

175.96

197.90207.98292.26267.81

389.40366.72407.56338.40248.29139.81Price earnings ratio (PER)(Times)

62.9

11.0

8.4

9.5

10.9

10.9

8.5

9.7

10.5

10.0

12.2

18.6

Dividends per share (Yen)

40

40

40

60

60

60

80

100

120

125

100

100

124.6

22.7

20.2

28.8

20.5

22.4

20.5

27.3

29.4

36.9

40.3

71.5

Cash FlowsPer Share Information*2

Payout ratio (%)

Other Indicators
Return on equity (ROE) (%)

2.6

15.1

17.3

16.0

16.1

11.3

14.6

12.9

13.0

10.4

7.7

4.2

Capital expenditure(Billions of yen)

23.6

20.8

27.0

26.6

27.1

33.6

32.1

31.3

33.6

32.1

35.0

34.0

Depreciation and amortization(Billions of yen)

35.4

33.0

29.7

27.4

25.9

33.8

32.9

32.4

31.5

32.8

33.1

32.6

Overseas sales ratio (%)

58.2

57.3

58.2

56.7

66.6

63.4

65.1

62.4

63.4

63.6

63.5

64.8

Average exchange rate (¥/US$)

93.51

87.69

79.77

79.93

97.06

106.32120.85109.96112.33110.46109.11106.37

Average exchange rate (¥/EUR)

130.91116.63110.88103.11129.25141.41134.14122.06127.03130.46122.13121.43

Number of employees

22,583

21,572

20,455

20,273

20,034

20,411

20,264

20,481

20,628

20,62020,513

20,242*1 Technology-related expenses are for DIC and DIC Graphics Corporation*2 Per share information has been adjusted to reflect the impact of the consolidation of shares.
*3 (IIHFWLYHIURP¿VFDO\HDU',&DQGLWVGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVFKDQJHGWKHLU¿VFDO\HDUHQGIURP0DUFKWR'HFHPEHU$VDFRQVHTXHQFHUHSRUWHGUHVXOWVUHÀHFWWKHIDFWWKDWIRUWKHVHFRPSDQLHV¿VFDO\HDUZDVDWUDQVLWLRQDOLUUHJXODUQLQHPRQWKSHULRG)RUWKHSXUSRVHRIFRPSDULVRQ¿VFDO\HDU¿JXUHVKHUHKDYHEHHQDGMXVWHGWRUHSUHVHQWWKHPRQWKVIURP-DQXDU\±'HFHPEHU

DIC Report 2021

12

A Message from the CFO
The DIC Group works to maintain sound financial health while
promoting determined business strategies. We aim to expedite
business portfolio transformation by promoting significant M&A
transactions and the creation of new businesses.

Shuji Furuta
Head of Finance and Accounting Unit
CFO

Maximization of cash ﬂows

D/C ratio

50%

Returns to shareholders

Investments in growth

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NH\SULRULWLHVPDLQWDLQLQJVRXQG¿QDQFLDOKHDOWKSURPRWLQJLQYHVWPHQWVLQJURZWKWRWUDQVIRUPRXUEXVLQHVVSRUWIROLRDQGHQVXULQJVWDEOHUHWXUQVWRVKDUHKROGHUV$VSHUIRUPDQFHLQGLFDWRUVZHKDYHDGRSWHGGHEWWRFDSLWDO '& UDWLR1WRJDXJHILQDQFLDOVRXQGQHVVUHWXUQRQHTXLW\ 52( WRDVVHVVFDSLWDOHIILFLHQF\SD\RXWUDWLRWRHYDOXDWHUHWXUQVWRVKDUHKROGHUVDQGHDUQLQJVEHIRUHLQWHUHVWWD[HV
GHSUHFLDWLRQDQGDPRUWL]DWLRQ (%,7'$ 2WRMXGJHRXUDELOLW\WRJHQHUDWHFDVKDQG
PD[LPL]HVKDUHKROGHUYDOXH

Financial health| Basic Approach

Value Transformation
New Pillar Creation

Payout ratio

30%| Sound Financial Health
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GHWHULRUDWHGWRDVRIWKHHQGRI¿VFDO\HDU²ZDVDQLPSURYHPHQWWKDWUHÀHFWHGJOREDOHIIRUWVWRHQKDQFHFDVKHI¿FLHQF\DVZHOODVUREXVWQHWFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVDQGDFFXPXODWHGHDUQLQJV2ZLQJWRWKHDFTXLVLWLRQRI%$6)¶V&RORUV (IIHFWVEXVLQHVVLQWHUHVWEHDULQJGHEWDVRI'HFHPEHULVOLNHO\WREHKLJKHUWKDQD\HDUHDUOLHUEXWZHH[SHFWRXU'&UDWLRWRUHPDLQLQWKHDUHDRI:HZLOODOVRVWULYHWRPDLQWDLQVRXQG¿QDQFLDOKHDOWKE\SURFXULQJELOOLRQWKURXJKDVXERUGLQDWHGWHUPORDQ²DW\SHRIK\EULG¿QDQFLQJWKDWZKLOHRI¿FLDOO\GHEWKDVFKDUDFWHULVWLFVVLPLODUWRHTXLW\²DVZHOODVE\GLYHVWLQJDVVHWVDQGUHLQIRUFLQJRXUPDQDJHPHQWRIZRUNLQJFDSLWDO
+DYLQJFKRVHQ52(DVDQLQGLFDWRURIFDSLWDOHI¿FLHQF\ZHDUHZRUNLQJWRLQFUHDVHWKHYLVLELOLW\RIUHWXUQRQLQYHVWHGFDSLWDO 52,& LQHDFKLQGLYLGXDOEXVLQHVVDQGWRHQKDQFHDZDUHQHVVRI52(*URXSZLGH7RDGYDQFHWKHWUDQVIRUPDWLRQRIRXUEXVLQHVVSRUWIROLRDQGIXUWKHUEROVWHUFDSLWDOHI¿FLHQF\ZHDUHSURPRWLQJLQYHVWPHQWVDLPHGDWGULYLQJQHZJURZWKDQGKDYHHVWDEOLVKHGFULWHULDIRUZLWKGUDZLQJIURPEXVLQHVVHVLQ
OLQHZLWKZKLFKZHDUHDFWLYHO\GLYHVWLQJDVVHWVDQGUHWUHDWLQJIURPEXVLQHVVZLWKORZJURZWKSRWHQWLDODQGSUR¿WDELOLW\:HHPSOR\(%,7'$DQGWKHFDVKFRQYHUVLRQF\FOH &&& DVPHWULFVIRURXUDELOLW\WRJHQHUDWHFDVKÀRZV7KHDGGLWLRQRI(%,7'$WRRXU
FRQYHQWLRQDOSURILWDELOLW\FHQWHUHGSHUIRUPDQFHLQGLFDWRUVDQGRXUHIIRUWVWRVKRUWHQWKH&&&XQGHUVFRUHRXUFRPPLWPHQWWRFRQGXFWLQJ
PDQDJHPHQWZLWKDJUHDWHUDZDUHQHVVRIFDVKÀRZDQGWKHQHHGWRLQFUHDVHVKDUHKROGHUYDOXH
Interest-bearing debt (Billions of yen)
Net assets (Billions of yen)
D/C ratio (%)

Financial Health

344.0

241.3

44.0

2016

265.7

264.5

43.6

44.7

2017

2018

351.4

343.5

327.3

307.0

252.6

42.4

2019

266.7

Target for
D/C ratio: Around 50%

43.2

2020

2021
(Forecast)(FY)

Promote investments in growthand maintain D/C ratio at around 50%

Maintain D/C ratio at around 50%
Note: Forecasts for interest-bearing debt and D/C ratio for fiscal year 2021 assume the completion of DIC’s acquisition of BASF’s Colors & Effects business.

DIC Report 2021

13

A Message from the CFO

Net income attributable to ownersof the parent (Billions of yen)

ROE

EBITDA(Billions of yen)

ROE (%)
86.1

13.0

81.4

10.4

55.6

7.7

38.6

70.3

67.4
6.6

32.0
23.5

4.2

22.0

13.2

2017

2018

2019

2020

2021 (FY)2017(Forecast)

2018

2019

2020

2021

(FY)

(Forecast)| Strategic Investments to Accelerate Growth
2XUFXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ',&RXWOLQHVWZREDVLFVWUDWHJLHVIRUWUDQVIRUPLQJRXUEXVLQHVVSRUWIROLR9DOXH7UDQVIRUPDWLRQZKLFKHPSKDVL]HVZRUNLQJWREROVWHUWKHFRPSHWLWLYHQHVVRIEXVLQHVVHVDQGJHQHUDWHVXVWDLQDEOHFDVKÀRZDQG1HZ3LOODU&UHDWLRQZKLFKFDOOVIRUFUHDWLQJQHZEXVLQHVVHVWKDWUHVSRQG
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HOHFWURQLFVDXWRPRWLYHQH[WJHQHUDWLRQSDFNDJLQJDQGKHDOWKFDUH:HFRQWLQXH
Total capital expenditure
Total strategic investments
WRSURPRWHLQYHVWPHQWYLDFRUSRUDWHYHQWXUHFDSLWDO &9& DQGRWKHUHIIRUWVInvestments(Billions of yen)
GHVLJQHGWRH[SHGLWHWKHFUHDWLRQRIQHZEXVLQHVVHVDQGJDLQDFFHVVWR
150
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,PSDFW)LQDQFH 3,)  ZLWKXQVSHFLILHGXVHRIIXQGV ORDQDJUHHPHQWZLWK6XPLWRPR0LWVXL7UXVW%DQN/LPLWHG3,)LVD¿QDQFLQJIUDPHZRUNGHVLJQHGWRIDFLOLWDWHWKHFRPSUHKHQVLYHDQDO\VLVDQGHYDOXDWLRQRIWKHSRVLWLYHDQG
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70
60
50
40

33.6
28.8

30
20

34.0

35.0

32.1

13.0

10

2.5

3.1

2019

2020

0

2017

2018

2021 (FY)(Forecast)

Note: Forecasts for interest-bearing debt and D/C ratio for fiscal year 2021 assume
the completion of DIC’s acquisition of BASF’s Colors & Effects business.

Returns to Shareholders*1
Interim (Yen)
Year-end (Yen)
Payout ratio (%)| Stable Returns to Shareholders

36.9

71.5

43.0

40.3

29.4

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30
Dividend
yield (%)*2

120

125

60

65

100

100

100

40

50

50

60

60

50

50

2017

2018

2019

2020

2.8

3.7

3.3

3.8

60

30

2021 (FY)(Forecast)*1 Figures have been adjusted to reflect the impact of the consolidation of shares.
*2 Dividend yield: Annual dividend payments / Closing share price at fiscal year-end

1RWHV
'&UDWLR,QWHUHVWEHDULQJGHEW ,QWHUHVWEHDULQJGHEW1HWDVVHWV
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7KH¿JXUHJLYHQIRUWKHFRVWRIWKLVDFTXLVLWLRQLVGHULYHGE\DGMXVWLQJWKHHQWHUSULVHYDOXHRIWKHWDUJHWEXVLQHVV ¼PLOOLRQ WRUHÀHFWFDVKDQGGHEWDVRI'HFHPEHU7KHH[FKDQJHUDWHXVHGWRWUDQVODWHWKLVDPRXQWLQWR-DSDQHVH\HQLV¼ 

DIC Report 2021

14

The DIC Group’s Approach to
Value Creation
Delivering

Business Portfolio
Transformation Under DIC111

Environmental
issuesManagement capital(Inputs)

Funds essential tothe provision of products
and services

Integrate technologies
and make use ofopen innovation

Organic molecular
designOptics and
color

Basic
technologies

Applicability
assessment(Coating/printing/molding/adhesion)

Polymer
designDispersion

ies

New Pillar Creation
Create new businesses in response to
ESH-related issues and social changes

lut

on

ti o

Evo

i

Natural capital
Environmental resources andraw materials essential tothe provision of products
and services

ls
de
mo

Value Transformationlog

Ability to rally diverse humanresources as the source of
DIC’s competitiveness as a
global company (WING)

bu
sin
es
s

Strengthen DIC’s corporate structure throughqualitative reforms of businessesof techno

Human capital

Overh
aul
of

ips
rsh
e
rtn
a
P

r a ti o n

Accumulated technologies
and know-how

Climate change

Break free of
reliance on
independent efforts

In t
eg

Intellectual capital

Cyber threats

Diverse social imperatives

Manufacturing capital
Facilities and equipment
essential to the provisionof products and services

Human rights
issuesnFinancial capital

Health-related
issuesResource
depletion

of

org

a ni

zati

onal

capa bi lit i e s

D igitra
al t

Marshal individual
strengths to createorganizational dynamism

Social capital
Cooperation with stakeholders
and local communities

Reinforce ESG initiatives
The DIC WayDIC Report 2021

15

ns

f

m
or

a

With the aim of ensuring a sustainable society, the DIC Group strives to provide products andsolutions that respond to the needs of markets and its customers and add color and comfort to life.

Outcomes

Segment

Outputs

Packaging & Graphic

Next-generation
packaging inks andcoatings, functional
packaging adhesives,
industrial-use jet inks,
othersColor & Display

Pigments for color filters,
pigments for cosmetics,
effect pigments, natural Color and display
colorants, LC materials, materials that makenext-generation display life colorful
materials, others

Functional Products

Sustainable polymers,
environment-friendly
PPS compounds for
Functional products
automotive components, that add comfort
high-performance industrial
adhesive tapes, others

Business area

Electronics

Automotive

Healthcare

Packaging materials
that bring safety andpeace of mind

Outputs

Outcomes

Technologies andfunctional materials
that support the spreadof digitization

Provide functional materials that
contribute to a digital society

Technologies andfunctional materials that
underpin efforts to transformthe automotive industry

Provide composite materials that
contribute to a mobility society

Packaging materials
that help reduce foodloss and support
Next-Generation Packaging sustainability
Microorganism and cell culture
technologies withapplications extending
from food safety toadvanced medical care

DIC Report 2021

16

SDGs

Provide packaging solutions that
contribute to environmental
sustainability
Provide fine chemicals produced
using biotechnological processes
that contribute to health and longevity

SDGs Goals
2, 3, 6, 7, 9, 11,
12, 13, 14 and 15

Fiscal Year 2020 DIC Group Topics
DIC Group Initiatives in the Fight against COVID-19 and the Impactof the Pandemic on the Group’s Performance
The DIC Group would like to express its sorrow at the loss of lives and extend its deepest sympathies to everyone who has been
affected by the COVID-19 pandemic. At this challenging time, the Group is especially grateful to the healthcare professionals aroundthe world who are working tirelessly to alleviate the spread of the virus.
The Group works with customers in diverse industries to achieve innovations that bring “Color & Comfort” to society through
FKHPLVWU\(YHQJLYHQWKHGLI¿FXOWLHVRIWKHFXUUHQWSDQGHPLF',&*URXSSURGXFWVSOD\DQLPSRUWDQWRQJRLQJUROHLQVDIHJXDUGLQJ
stable supplies of daily necessities. Accordingly, the entire Group is committed to working as one to help maintain social
infrastructure. The Group will continue striving to contribute to society by delivering distinctively DIC products and technologies tosupport the efforts of a wide range of frontline healthcare facilities and local communities.
Donation of 10,000 N95 and Other High-Performance Masks to Healthcare Facilities

In April 2020, DIC donated 10,000 N95, surgical, ostrich antibody and other highperformance masks from its stockpile to healthcare facilities in Japan.
Provision of “DIC Health Packs” to Senior Care Facilities in Southeast Asia

As a component of a corporate social responsibility (CSR) project in Southeast Asia, DIC
Group companies in the region devised the idea of DIC Health Packs, kits containing avariety of COVID-19 protective items. Group companies prepare the DIC Health Packs, which
include masks bearing the DIC logo, DIC Spirulina (a health food) and liquid disinfectant, andthen donates them to senior care facilities and charitable organizations across the region.
Launch of Special COVID-19 Seals Indicating that Proper Cleaning and Disinfection Has Been Implemented

DIC Color Design, Inc., has developed and commenced sales of special seals to signifythat proper cleaning and disinfection has been implemented. These seals are used byhotels, for example, as door seals to indicate to guests that their room has not beenaccessed after cleaning and disinfection.
Production of Droplet Infection–Preventing Face Shields and Donation to Healthcare Facilities

To curtail the transmission of COVID-19, DIC leveraged proprietary DIC Group technologies todevelop face shields, which it has supplied to production sites and other workplaces where masks
must be worn. Prioritizing development speed, the Group diverted headbands normally used inhelmets manufactured by DIC Plastics, Inc., to the production of face shields. The Group also
donated approximately 1,000 of these face shields to healthcare facilities.
Note: For more information, please see page 24.

Provision of Hollow-Fiber Membranes for ECMO

DIC provides hollow-fiber membranes to add oxygen to the blood in extracorporeal
membrane oxygenation (ECMO), which is currently being used worldwide to treat critically
ill COVID-19 patients.

Business Continuity Initiatives Aimed at Maintaining Social Stability
In an attempt to curb the rampant spread of COVID-19, major cities in countries and territories around the world have implemented
stringent lockdowns. Nonetheless, DIC Group production facilities have sustained operations without interruption, with the approvalof governments and other public bodies, to respond to demand from customers critical to social infrastructure, including food andpharmaceuticals manufacturers and newspaper publishers. The Group’s products thus play an important role in preserving stablesupplies of these daily necessities and helping to maintain social infrastructure.
Anticipating a prolonged risk of COVID-19 infection, DIC has formulated and is implementing a policy for operating underpandemic conditions.
DIC Report 2021

17

Fiscal Year 2020 DIC Group Topics● Promote thorough efforts to prevent the spread of COVID-19 and prioritize the health and safety ofcustomers, suppliers, and DIC Group employees and their families;● Work to maintain DIC Group production and supply activities while minimizing the impact on customers
and suppliers; and,● Support healthcare professionals and promote efforts to contribute to society, with the goal of ensuring
DIC remains a company that is loved and respected worldwide.

Note: )RULQIRUPDWLRQRQDFWLYLWLHVLQWKH$PHULFDVDQG(XURSHWKH$VLD±3DFL¿FUHJLRQDQGWKH35&SOHDVHVHHSDJHVDQGUHVSHFWLYHO\Posters illustrating DIC Group measures to prevent thetransmission of COVID-19

Impact on Segment Operating Results
Packaging & Graphic

In the area of materials for food packaging, sales wererobust overseas, owing to demand driven by stay-athome measures, but languished in Japan as a result ofsluggish sales to convenience stores, among others, as
people refrained from leaving their homes. In products for
FRPPHUFLDOSULQWLQJÀDJJLQJHFRQRPLFDFWLYLW\SUHYHQWHGD
recovery in shipments of inks for advertisements, catalogs,
newspapers and other applications. Segment operating
LQFRPHURVHVLJQL¿FDQWO\EROVWHUHGE\FRVWFXWWLQJHIIRUWV
including curbing expenses related to business trips.

Packaging inks

Publication inks

Pigments for cosmetics and for inks

TFT LCs (uses include LCD televisions)

Epoxy resins

PPS compounds (uses include automotive components)

Color & Display

Sales of color materials fell sharply, owing to declining
shipments of pigments for cosmetics, as mask-wearing
became an ingrained part of daily life worldwide. In
display materials, sales rose as increased time spent byconsumers at home led to robust demand in the market
for liquid crystal displays (LCDs), pushing up shipmentsof pigments for color filters and thin-film transistor liquid
crystals (TFT LCs). Segment operating income dropped,
as production adjustments prompted the cutting ofoperating rates at certain production facilities made it
LPSRVVLEOHWRDEVRUEHG¿[HGDQGRWKHUFRVWVFunctional Products

Demand for materials for automotive applications plunged
temporarily. As a consequence, full-term segment sales
decreased despite a dramatic recovery in shipments ofsynthetic resins for use in automotive coatings, epoxy
resins for semiconductor devices used in onboard
equipment, and PPS compounds—uses for which,underpinned by the trend toward lighter and increasingly
electrified vehicles—rallied significantly in the fourth
quarter. Segment operating income was down, as lower
UDZPDWHULDOVSULFHVDQGFRVWUHGXFWLRQVZHUHLQVXI¿FLHQW
to offset the decline in full-term shipments.

DIC Report 2021

18

Packaging & Graphic
3DFNDJLQJ0DWHULDOVWKDW%ULQJ
6DIHW\DQG3HDFHRI0LQG
Masamichi Sota

SDGs Goals 12, 13 and 14

0DQDJLQJ([HFXWLYH2I¿FHU
3UHVLGHQW3DFNDJLQJ *UDSKLF%XVLQHVV*URXSMain Products
7KLVVHJPHQWLQFOXGHVQRWRQO\SULQWLQJLQNVEXWDOVRDGKHVLYHVFRDWLQJVILOPVDQGDEURDGUDQJH
RIRWKHUSDFNDJLQJPDWHULDOVDQG
VROXWLRQVWKHPDUNHWVIRUZKLFKFRQWLQXHWRVHHUREXVWJURZWKLQ
$VLDDQGHPHUJLQJHFRQRPLHV

［Printing Materials］*UDYXUHLQNVÀH[RLQNVRIIVHWLQNVQHZVLQNVMHWLQNVPHWDOGHFRUDWLYHLQNVSULQWLQJSODWHVVHFXULW\LQNVSULQWLQJVXSSOLHV［Packaging Materials］
3RO\VW\UHQHSDFNDJLQJDGKHVLYHVPXOWLOD\HU¿OPV

Segment Operating Results
Operating Income

Net Sales(Billions of yen)

430.5

416.4

114.7

388.4

(Billions of yen)

112.2

19.2

102.3

21.9

21.8
5.7

5.3

6.4
244.3

262.3

235.4

12.8

12.2
8.2

68.7

69.6

62.0

FY2019Japan

FY2020The Americas
and Europe

4.5

FY2021 (Forecast)

FY2019China andAsia Pacific

3.5

4.4

Japan

FY2020The Americas
and Europe

FY2021 (Forecast)

China andAsia Pacific

1RWH*UDSK¿JXUHVLQFOXGHLQWHUUHJLRQDOWUDQVDFWLRQVZLWKLQWKHVHJPHQW$FFRUGLQJO\WKHDJJUHJDWHVRIUHJLRQDOQHWVDOHVDQGRSHUDWLQJLQFRPH¿JXUHVIRUWKHVHJPHQWGLIIHUIURPWKH¿JXUHVSUHVHQWHGDERYHDIC Report 2021

19

Product News
Efforts to Develop Biomass-Based Packaging Inks (Gravure Inks, Flexo Inks) and Compostable Packaging Adhesives,Q-DSDQWKH',&*URXSKDVREWDLQHG%LRPDVV0DUNFHUWL¿FDWLRQIRUJUDYXUHLQNVXVHGIRUSULQWLQJ
RQJHQHUDOSXUSRVHILOPVVKULQNILOPDQGSDSHUDQGKDVVXFFHHGHGLQFRPPHUFLDOL]LQJDQ
DQWLEDFWHULDOYDUQLVKIRUXVHRQSULQWHGSDFNDJLQJ¿OPVXVHGIRULQGLYLGXDOO\SDFNDJHGSURWHFWLYH
IDFLDOPDVNV2YHUVHDVWKH6XQ&KHPLFDO*URXSLVFXOWLYDWLQJPDUNHWVIRUFRPSRVWDEOHSDFNDJLQJDGKHVLYHVLQNVIRUSULQWLQJRQIRRGFRQWDFWPDWHULDOVLQNVWKDWIDFLOLWDWHGHLQNLQJDQGRWKHUKLJKELRPDVVFRQWHQWSURGXFWVDQGKDVDOVRFRPPHQFHGWKHGHYHORSPHQWRIDQWLEDFWHULDOFRDWLQJVDevelopment of DICDRY LX-RP Series of Dry Laminating Adhesives Made from Recycled PET Bottles',&UHFHQWO\GHYHORSHGWKHDICDRY/;53VHULHVRIGU\ODPLQDWLQJDGKHVLYHVIRUIOH[LEOHSDFNDJLQJZKLFKDUHPDGHIURPUHF\FOHGSRVWFRQVXPHUSRO\HWK\OHQH
WHUHSKWKDODWH 3(7 ERWWOHV:KLOHFRQYHQLHQFHPDNHVSODVWLFVWKHIDYRUHGPDWHULDOIRUDZLGHUDQJHRIDSSOLFDWLRQVWKHHQYLURQPHQWDOLPSDFWRIZDVWHSODVWLFKDVEHFRPHDQLVVXHRIFRQFHUQDQGHIIRUWVWRIDFLOLWDWHWKHHIIHFWLYHXVH
Incineration
WKHUHRILVDJOREDOFKDOOHQJH',&OHYHUDJHGLWVSURSULHWDU\SRO\PHU
Process flow for the
Reduction of CO emissions
manufacture of adhesives
V\QWKHVLVWHFKQRORJLHVWRIDFLOLWDWHWKHFKHPLFDOUHF\FOLQJRIUHF\FOHG
using recycled PET bottles
Disposal as landfill
3(7ERWWOHVLQWRUDZPDWHULDOVVXLWDEOHIRUXVHLQSDFNDJLQJDGKHVLYH PET beverage bottles
Reduction of waste plastic
and marine plastics$GGLWLRQDOO\E\RSWLPL]LQJWKHUHVLQ¶VFRPSRVLWLRQWKH&RPSDQ\KDV
Collection/separation/pulverization/
VXFFHHGHGLQUHDOL]LQJDSURGXFWWKDWLVERWKVROYHQWVROXEOHDQGZKLFKwashing/pelletizing
GHOLYHUVH[FHOOHQWDGKHVLYHSURSHUWLHV$GKHVLYHVLQWKHDICDRY LX53VHULHVERDVWDUHF\FOHG3(7FRQWHQWRI VROLGFRQWHQWUDWLR 
Adhesive resin synthesis
DQGOLNHFRQYHQWLRQDODICDRY/;DGKHVLYHVLVDOVRVXLWDEOHIRU
Reaches consumers(Chemical recycling)
Laminated filmin the form of packaging
Decrease in use of petroleum-derived
ODPLQDWLQJOLJKWZHLJKWSDFNDJLQJPDWHULDOVDQGUH¿OOSRXFKHV
virgin raw materials
2

回収 BOXBusiness Strategies Under DIC111
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Transformation
Value

Publication inks

• Packaging solutions
Printing inks, adhesives, films, polystyrene• Specialty inks
Jet inks, security inks

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

73%

76%

85%

Fiscal Year 2020 Highlights
DIC and FPCO Explore Collaboration in the Practical Implementation of a Closed-Loop Recycling System for Polystyrenethat Employs Chemical Recycling',&DQG)3&RUSRUDWLRQ )3&2 DUHH[SORULQJWKHHVWDEOLVKPHQWRIDFROODERUDWLYHUHODWLRQVKLSWKDWLQFOXGHVWKHFUHDWLRQRIDFKHPLFDOUHF\FOLQJMRLQWYHQWXUH7KHWZRFRPSDQLHVSODQWRLQWURGXFHWKLUGSDUW\WHFKQRORJLHVIRUFRQYHUWLQJSRO\VW\UHQHEDFNLQWRVW\UHQHPRQRPHUWRIDFLOLWDWHWKH
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)3&2¶V³)3&2PHWKRG´FLUFXODUUHF\FOLQJ,QDGGLWLRQWKHDSSOLFDWLRQRIWKLVPHWKRGZLOOEH
H[SDQGHGWRDOORZWKHFROOHFWLRQRIXVHGIRRGFRQWDLQHUVYLDDQHWZRUNRIFROOHFWLRQFHQWHUV6W\UHQHPRQRPHUUHF\FOHGE\WKH',&±)3&2MRLQWYHQWXUHIURPWKHFRORUHGDQGRUSDWWHUQHG
FRQWDLQHUVZLOOEHWUDQVIRUPHGLQWRSRO\VW\UHQHPDWHULDOE\',&ZKLFKZLOOEHXVHGE\)3&2WRPDQXIDFWXUHQHZHQYLURQPHQWIULHQGO\Eco TrayFRQWDLQHUV1RWH)RUPRUHLQIRUPDWLRQSOHDVHVHHSDJHDIC Report 2021

20

Chemical recycling
FPCO

Recycled
styrene monomer

Recycling center

Model ofclosed-loop recycling
system for polystyrenethat employs chemical
recycling

Collection

回 収 B OX

End-of-life
polystyrene

Supermarkets andother retailers

DIC
Manufacture ofpolystyrene

Polystyrene resin
Sales

FPCO
Manufacture of polystyrene
food containers

Color & Display&RORUDQG'LVSOD\0DWHULDOVWKDW
0DNH/LIH&RORUIXO
Yoshinari Akiyama

SDGs Goals 3 and 13

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3UHVLGHQW&RORU 'LVSOD\%XVLQHVV*URXSMain Products
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［Color Materials］
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OLTXLGFU\VWDO 671/& PDWHULDOVSegment Operating Results
Net Sales

Operating Income

170.8(Billions of yen)(Billions of yen)

32.2

116.4

10.8

105.8

8.4

4.8

29.7

8.4

27.9
146.0

95.8

5.6

85.2

6.6

6.0
2.8

FY2019Japan

FY2020

FY2021 (Forecast)

FY2019Overseas

Japan

1.9

FY2020

FY2021 (Forecast)

Overseas

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21

Product NewsDIC Develops New Pigments for Color Filters Used in Next-Generation and Other Products,QWKHDUHDRISLJPHQWVQRWDEOHDFKLHYHPHQWVE\WKH',&*URXSRIODWHLQFOXGHWKHGHYHORSPHQW
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RXWVWDQGLQJUHOLDELOLW\DQGUHVSRQVHWLPHDQGVHQVLWLYLW\IRU.GLVSOD\V7KH',&*URXSLVDOVRDSSO\LQJLWV/&WHFKQRORJLHVWRWKHGHYHORSPHQWRIVPDUWZLQGRZVDQG/&EDVHGDQWHQQDV3LJPHQWVIRUFRORU¿OWHUVDWZRUN

Launch of PHYCONA, an FFC that Enhances the Skin’s Barrier Function
2Q2FWREHU',&*URXSFRPSDQ\',&/LIHWHF&R/WGODXQFKHGPHYCONA Skin Moistlifting
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Value Transformation

Generalpurpose
pigments• High-performance products
Functional pigments (pigments for color filters, effect pigments, pigments forcosmetics and pigments for NIP*), LC materials, next-generation display materials• Naturally derived products* Nonimpact printing
Natural colorants

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

50%

58%

62%

Fiscal Year 2020 Highlights
DIC Group Offers Pigments that Comply with Food Safety Laws and Requirements and Extensive Lineup of Pigments for Water-Based Inks
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7KHSULQWLQJLQGXVWU\LVWDNLQJYDULRXVVWHSVWRORZHUHQYLURQPHQWDOLPSDFWLQFOXGLQJE\HOLPLQDWLQJHPLVVLRQVRIYRODWLOHRUJDQLFFRPSRXQGV 92&V DQGWRLPSURYHWKHZRUNHQYLURQPHQWIRUSULQWIORRUHPSOR\HHV$NH\PRYHLVWKHVKLIWWRZDUGZDWHUEDVHGLQNV',&RIIHUVDQH[WHQVLYHOLQHXSRISLJPHQWVIRUZDWHUEDVHGLQNVLQPDUNHWVZRUOGZLGH7KHVHSLJPHQWVHQDEOHWKH&RPSDQ\WRSURYLGHDYDVWDUUD\RIFRORUVZKLOHDOVRFRQWULEXWLQJWRPRUHVXVWDLQDEOHSULQWLQJDIC Report 2021

22

Functional Products)XQFWLRQDO3URGXFWVWKDW$GG&RPIRUWTakashi Ikeda

SDGs Goals 6, 12 and 13([HFXWLYH2I¿FHU
3UHVLGHQW)XQFWLRQDO3URGXFWV%XVLQHVV*URXSMain Products［Performance Materials］

7KLVVHJPHQWSURYLGHVFRDWLQJDQG
FRPSRVLWHPDWHULDOVZLWKGLYHUVH
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HSR[\UHVLQVSRO\XUHWKDQHDFU\OLFUHVLQVSODVWLFL]HUVSKHQROLFUHVLQV SDSHUPDNLQJFKHPLFDOVDON\OSKHQROVVXOSKXUFKHPLFDOV¿EHUDQGWH[WLOHFRORUDQWVPHWDOFDUER[\ODWHV［Composite Materials］
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Segment Operating Results
Net Sales(Billions of yen)

Operating Income(Billions of yen)

269.3

268.6

26.1

236.0
19.2

17.1

193.8

199.3
176.1

91.9

11.6

80.9

FY2019
Japan

101.1

FY20208.3

FY2019Overseas

9.7

8.7

7.5

FY2021 (Forecast)

16.4

Japan

FY2020

FY2021 (Forecast)

Overseas

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23

Product NewsDIC Develops Quick-Acting Driers that Expedite the Curing and Drying of Coatings and Printing Inks
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WKHPRVWFRPPRQO\XVHGDQGWKHPRVWSRZHUIXO+RZHYHUEHFDXVHFREDOWLVKLJKO\WR[LF
DQGKDUPIXOWRWKHHQYLURQPHQWDVZHOODVFRVWO\',&GHYHORSHGWKHDICNATEVHULHVRIFREDOWIUHHDOWHUQDWLYHVZKLFKGHOLYHUHTXDORUEHWWHUSHUIRUPDQFH,QDGGLWLRQWRH[FHOOHQWGU\LQJVSHHGDICNATEGULHUVDUHHQYLURQPHQWIULHQGO\DQGFRVWHIIHFWLYH7KH\DUHDOVRFRPSDWLEOHZLWKERWKVROYHQWDQGZDWHUEDVHGLQNVDQGFRDWLQJVWKXVDGGUHVVLQJDZLGH
UDQJHRIFXVWRPHUUHTXLUHPHQWV3ULQWLQJLQNVPDGHZLWKDICNATE VDPSOHLPDJHDIC Group Company Develops Face Shield for Industrial Helmets that Helps Prevent Droplet Infection
for Pandemic-Era Workplaces:LWKWKHULVNRIWUDQVPLVVLRQDFRQVWDQWLQWKLVWLPHRI&29,'PHDVXUHVWRSUHYHQWGURSOHWLQIHFWLRQDUHDFUXFLDOSDUWRIHYHU\GD\OLIHDVZHOODVEHLQJDVLJQL¿FDQWFRQFHUQ
LQPDQ\ZRUNSODFHV2QSURGXFWLRQIORRUVDQGZRUNVLWHVZKHUHKHOPHWVDUHUHTXLUHG
SUHYHQWLQJKHDWVWURNHZKLOHDOVRJXDUDQWHHLQJYLVLELOLW\GXUDELOLW\DQGSHUIRUPDQFHDUH
LPSRUWDQWFRQFHUQV',&*URXSFRPSDQ\',&3ODVWLFVUHVSRQGHGWRVXFKQHHGVE\OHYHUDJLQJSURSULHWDU\WHFKQRORJLHVWRGHYHORSFace Shield ProDIDFHVKLHOGWKDWFDQEH
DWWDFKHGWRLQGXVWULDOKHOPHWV)HDWXULQJDVKDSHWKDWH[WHQGVEHORZWKHFKLQFace Shield
ProSURYLGHVIXOOSURWHFWLRQDJDLQVWGURSOHWLQIHFWLRQZKLOHDWWKHVDPHWLPHHQVXULQJH[FHOOHQWYLVLELOLW\DQGSHUIRUPDQFH7KHVKLHOGKDVDOVREHHQWUHDWHGWRSUHYHQWIRJJLQJDQG
FDQEHÀLSSHGXSZKHQQRWLQXVHHQKDQFLQJFRPIRUWIRUZHDUHUVFace Shield Pro: Protection Against Droplet Infection

Corporate logo orother helmet-front
marks remain visible

Ensuresvisibility

Treated toprevent fogging

Shield extends
below the chin,providing full
protection
Guarantees
performance

0.8 mm thickness
delivers strength;shield remains firmly inplace even when thewearer moves

One set contains:● Shield (includes polyurethane pad andrubber headband)● Goggle clip (snap-on)
Protects against dropletsfrom the sideCan be flipped up or detachedwhen not in use

Business Strategies Under DIC111
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H[SDQGUHVLQSURGXFWLRQEDVHVLQ$VLD$VZHOOWKH*URXSZLOOSURYLGHKLJKO\SUR¿WDEOHSURGXFWVWKDWPHHWVRSKLVWLFDWHGQHHGVLQQLFKHPDUNHWV
LQWURGXFHQH[WJHQHUDWLRQUHVLQVIRURSWLFDODQGHOHFWURQLFVDSSOLFDWLRQVH[SDQGVDOHVRILQGXVWULDODGKHVLYHWDSHVIRUPRELOHDQGDXWRPRWLYHDSSOLFDWLRQVDQGPDNHDIXOOÀHGJHGHQWU\LQWRWKHPDUNHWIRUODUJHVFDOHKROORZ¿EHUPHPEUDQHVDQGPRGXOHVValue Transformation
Generalprocessed
products
Solvent-based
products• Environment-friendly products
Waterborne resins, polyurethane, UV-curable resins• High-value-added products
Epoxy resins, PPS compounds, industrial adhesive tapes,
hollow-fiber membranes and modules

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

59%

63%

75%

Fiscal Year 2020 Highlights
DIC Group Enters into Agreement to Establish Strategic Partnership with DuPont in the Water Treatment Business,Q¿VFDO\HDUWKH',&*URXSHQWHUHGLQWRDQDJUHHPHQWWRHVWDEOLVKDVWUDWHJLFSDUWQHUVKLSZLWK'X3RQWDLPHGDWH[SDQGLQJJOREDOVDOHVRIGHJDVVLQJPRGXOHVIRUZDWHUWUHDWPHQW7KURXJKWKLVSDUWQHUVKLS',&JUDQWV'X3RQW¶V:DWHU6ROXWLRQVXQLWH[FOXVLYHVDOHVULJKWVIRULWV
SEPAREL®VHULHV¶ODUJHGHJDVVLQJPRGXOHVIRULQGXVWULDOZDWHUWUHDWPHQWDSSOLFDWLRQVZLWKWKH
JRDORILQFUHDVLQJVDOHVLQ$VLDWKH8QLWHG6WDWHVDQG(XURSH   'X3RQW PDLQWDLQV D JOREDOO\ OHDGLQJ SRUWIROLR RI ZDWHU SXULILFDWLRQ DQG VHSDUDWLRQWHFKQRORJLHVLQFOXGLQJXOWUDILOWUDWLRQUHYHUVHRVPRVLVDQGLRQH[FKDQJHUHVLQV$V',&¶VFXVWRPHUVLQWKLVILHOGLQFOXGLQJZDWHUWUHDWPHQWHTXLSPHQWPDQXIDFWXUHUVRIWHQXVHLWV
GHJDVVLQJPRGXOHVLQFRPELQDWLRQZLWK'X3RQWSURGXFWVWKLVSDUWQHUVKLSZLOOSRVLWLRQWKH
FRPSDQ\WRH[WHQGWRWDOVROXWLRQVDQGVHUYLFHVDIC Report 2021

24

Special Feature

Product Development Designed to Create New Value

The DIC Group is working across its various businessgroups to provide distinctive solutions that respondto evolving needs related to safety, peace of mind andthe environment and that contribute to sustainability.
The DIC Group provides a wide range of products and services that play an important role in a broad rangeof settings, from everyday life to social infrastructure. The Group views providing timely solutions that only
a manufacturer of fine chemicals can offer to a variety of key issues as both the source of the value it
provides as well as its obligation to society. Accordingly, it works to offer products and systems that enhance
convenience while at the same time contributing to safety and peace of mind, as well as to the environment.

Page

26

Employing Chemical Recycling to Realize a Closed-Loop
Recycling System for Polystyrene Food Containers

Page

30

Nashiji Film Made with Biomass Plastic (DIFAREN® A7440Bio)

Page

33

An FFC that Improves the Skin’s Barrier Function from the Inside Out(PHYCONA Skin Moistlifting Tablets)

DIC Report 2021

25

Special Feature: Product Development Designed to Create New Value

Packaging & Graphic
Employing Chemical Recycling to Realize a Closed-Loop
Recycling System for Polystyrene Food Containers
SDGs Goals 3, 7, 12, 13 and 14

Fine chemicals manufacturer DIC and food container manufacturer
FPCO collaborate to implement closed-loop recycling system forpolystyrene that employs chemical recycling.
Value Creation

Closed-loop recycling of polystyrene to reduce the use of resources and energy, and the discharge of waste

Given the increasingly critical nature of the issue of waste plastic, the need to reinforce recycling systems is an increasingly urgent imperative.
Polystyrene food containers are widely used because they are light and easy
to carry, easy to process and color, and protect food by preventing moisture
ingress. In Japan, municipalities separate and collect appropriately disposed-of
SRVWFRQVXPHUSRO\VW\UHQHIRRGFRQWDLQHUVWXUQLQJWKHPRYHUWRUHF\FOLQJ¿UPVWREHWUDQVIRUPHGEDFNLQWRUDZPDWHULDOVEXWDVLJQL¿FDQWDPRXQWLVGLVFDUGHGLPSURSHUO\DVJHQHUDOZDVWHDQGHQGVXSEHLQJLQFLQHUDWHGRUVHQWWRODQG¿OOVAnother problem is illegally dumped waste plastic, which often ends up inrivers and the ocean, becoming a major cause of environmental pollution inrivers and oceans, harming ecosystems, disrupting ship navigation, hindering
WRXULVPDQG¿VKLQJDQGGDPDJLQJFRDVWDODUHDV$SDUWLFXODUFDXVHIRUFRQFHUQLVPLFURSODVWLFVIUDJPHQWVRISODVWLFVPPRUOHVVDQGVXSHU¿QHQDQRSODVWLFV

which are ingested by marine organisms, persisting throughout the food chain
to eventually harm the health of humans.
With countries tightening restrictions on waste plastic imports, exports
are no longer a disposal route for Japan, which had previously exported a
portion of the waste plastic it generates as materials for recycling. Accordingly,
establishing an infrastructure for the recycling of waste plastic within the
country is an increasingly urgent imperative. Critical to addressing thisimperative is reducing the volume of waste plastic generated. To this end, it isnecessary to reconsider single-use plastics, promote the development of new
plastic resource recycling technologies and systems, and pare consumption of
petroleum-derived resources and energy.

Polystyrene Food Containers

Biaxially oriented polystyrene container

White foamed polystyrene container

DIC Report 2021

26

Colored and patterned polystyrene container

Special Feature: Product Development Designed to Create New Value

Accelerating Efforts to Tighten Restrictions on Non-Recyclable Packaging in Japan and Overseas■ JapanMilestone targets in Japan’s plastic resources recycling strategy▶ Achieve 25% cumulative reduction in use of single-use plastics (e.g., containers and packaging, etc.) by 2030

Reduce▶ Make container designs easier to separate and reuse/recycle by 2025
▶ Achieve reuse/recycle rate of 60% for plastic containers and packaging by 2030

Reuse/recycle▶ Achieve a 100% reuse/recycle rate for post-consumer plastics by 2035
Reuse of recycledmaterials/use of biomass plastics▶ Double reuse of plastics (use of recycled materials) by 2030
▶ Maximize use of biomass plastics (to approximately 2 million tonnes) by 2030 環境省「 プラスチック資源循環戦略 」より作成
Source: Based on Resource Circulation Strategy for Plastics published by the Ministry of the Environment■ Overseas
EU・Recycle 75% of container and packaging waste by 2030 (European Strategy for Plastics)
・Consider taxing non-recyclable plastic packaging (Circular Economy Action Plan)UK

Introduce Plastic Packaging Tax in April 2022

PRC

Establish life cycle management system for plastic products by 2025

DIC and FPCO: Building a Closed-Loop Recycling System for Polystyrene
DIC was the first company to succeed in developing and mass producing
hyperbranched polystyrene, which it markets in Japan under the nameHybranch. Approximately 80% of the polystyrene manufactured and sold by
the Company is currently used in the production of food containers. At present,
DIC is participating in a project to realize advanced plastic resource recycling
systems that involves collaboration among industry, government and academia.
7KH&RPSDQ\DOVRFRQGXFWVUHVHDUFKUHJDUGLQJWKHLQÀXHQFHRISRO\VW\UHQH
¿OPVLQNVDGKHVLYHVDQGRWKHUPDWHULDOVRQUHF\FODELOLW\LQDQHIIRUWWRGHYHORS
products that exert less of an impact on the environment.
FP Corporation (FPCO), based in the city of Fukuyama, Hiroshima Prefecture,
is Japan’s largest food container manufacturer and a major destination for DIC
polystyrene. The company boasts a nationwide network of 9,600 collection
centers and three recycling plants, through which it recovers and transforms

post-consumer foamed polystyrene food containers into new food containers
using materials recycling. Currently, the company pulverizes and melts thesecontainers into polystyrene pellets, with those from white containers recycled
into new environment-friendly Eco Tray containers (“tray-to-tray recycling”) andthose from colored and/or patterned containers recycled into clothes hangers
and other household items.
In November 2020, DIC and FPCO announced a new model of circular
recycling system that will maximize the two companies’ technologies, andFROOHFWLRQDQGUHF\FOLQJFRQ¿JXUDWLRQVZLWKWKHDLPRIDFKLHYLQJWKHSUDFWLFDO
implementation of advanced resource recycling. This initiative also seeks tofacilitate the use of chemical recycling to transform colored and/or patterned
polystyrene, which to date could not be recycled into food containers, facilitating
fully closed-loop recycling of all types of polystyrene products.

Simultaneous Promotion of Materials and Chemical Recycling Is Indispensable for the Realization of a Circular Economy

Recycle flow

Melting
White trays

Materials
recycling

Molding

White polystyrene
pellets

Food trays

Restricted

Separation

Food trays

Melting
Colored and/or
patterned trays

Chemical recycling(depolymerization intostyrene monomer)

Applications

Molding
Black polystyrene
pellets

Molded products

Unrestricted

Black polystyrene pellets

Depolymerization
into black styrene
monomer

Molding

Polymerization

Depolymerization into
virgin-quality styrene monomer

Recycled polystyrene

Recycled styrene
monomerFood trays

DIC Report 2021

27

Special Feature: Product Development Designed to Create New ValueA Distinctively
DIC Response

Using depolymerization through chemical recycling to realize closed-loop recycling of polystyrene food containers

Introducing third-party technologies and launching a testing plant in 2022
WHFKQRORJLHVWKDWLQFUHDVH\LHOGVE\HYDOXDWLQJGHSRO\PHUL]DWLRQHI¿FLHQF\energy consumption and cost, among other factors, at annual productionlevels of several thousand tonnes.

In addition to polystyrene, colored and/or patterned food trays contain ink
and adhesives. As a result, using materials recycling, which pulverizes
and melts the entire tray, yields black pellets and causes the deteriorationof physical properties, so the commercial value thereof is significantly
reduced. Such pellets also cannot be used for food-contact surfaces. In
contrast, polystyrene is suited to chemical recycling because it can be easily
depolymerized back into its precursor—styrene monomer—with only minimalenergy using pyrolysis, also known as thermal degradation. Because
polystyrene made with chemically recycled styrene monomer delivers thesame performance and safety levels as that made with petroleum-derived
virgin raw material, there are no limits to potential applications.
DIC thus plans to introduce third-party technologies and equipment for
depolymerizing polystyrene back into styrene monomer and to build a testing
facility at its Yokkaichi Plant, in Mie Prefecture, the Company’s principal
polystyrene production facility. The testing facility is expected to begin
operations in 2022. Through this, the Company aims to establish control

DIC’s Yokkaichi Plant

Current Process for Recycling Polystyrene

DIC’s Polystyrene Business Recycling Strategy
Styrenemonomer

Styrenemonomer

Polystyrene

Polystyrene
products

Partial circular recycling
through materials recycling

Chemicalrecycling

Polystyrene

Realization of closed-loop recycling
thanks to depolymerization tostyrene monomer

Consumers

Polystyrene
products

Collection
Transformation
into polystyrene
pellets

Materials
recycling

Collection
Consumers

By shifting to closed-loop recycling, DIC will
・Contribute to society and increase corporate value, and・Eliminate related risks to business continuity

Limited to partial circular recycling

The challenge of chemical recycling: A process with outstanding potential
by DIC and FPCO can be said to be a litmus test of the potential of chemical
recycling in the future. The DIC team expects the establishment of newtechnologies for depolymerizing polystyrene into styrene monomer tofacilitate expansion of the initiative’s focus to include biomass inks andadhesives and is thus committed to boldly taking the steps necessary toensure commercialization as quickly as possible.

Materials recycling is the principal method used to recycle plastics inJapan. The use of chemical recycling, which leverages a chemical reaction
to recycle resources, remains rare. However, given the limits of materials
recycling, the progress and expansion of chemical recycling is essential
to realizing the sort of advanced recycling-oriented society envisioned bypeople around the world. The new closed-loop recycling system launched

DIC Report 2021

28

Special Feature: Product Development Designed to Create New Value

Plastic Material Flows in Japan in Fiscal Year 2019 (Excerpt)
Production/Use

Discharge

Domestic
consumption
9,390,000 tonnes

Industrial(production and processing)waste
680,000 tonnes

Total waste
plastic discharged
8,500,000 tonnes
Post-consumer waste
plastic discharged
4,120,000 tonnes
Industrial waste discharged
4,380,000 tonnes

Disposal and recovery
Unused1,250,000 tonnes(15%)

Materials recycling
1,860,000 tonnes(22%)
Enhancing chemical
recycling is anurgent challenge

Chemical recycling
Thermal recycling
5,140,000 tonnes(61%)

270,000 tonnes(3%)(Source: Materials produced by the Plastic Waste Management Institute)

KEY PERSON from DIC

A sense of crisis shared by both DIC and FPCO led to this initiative.

Over many years working together, DIC and FPCO have come to share an awareness of key imperatives. We launched this initiative because of ashared sense of crisis derived from the recognition that given the overall trend toward resource recycling, the survival of related businesses in the
future depends on moving away from single-use food containers. Depolymerization back to styrene monomer is key to the closed-loop recycling of
SRO\VW\UHQH7KHDELOLW\WRDFKLHYHFORVHGORRSUHF\FOLQJZLOOEHDFULWLFDOPHDVXUHRI¿QHFKHPLFDOPDQXIDFWXUHUV¶FRUSRUDWHYDOXH:HORRNIRUZDUG
to building an optimal chemical recycling–based model system that contributes to a substantial reduction of waste and CO 2 emissions by choosing
and integrating superior basic technologies.
Manager, Polystyrene Sales Group, Packaging Material Products Division, DIC Corporation

KEY PERSON from DIC

Kensuke Shinya

We are working to make the best use of the existing collection and recycling infrastructure
to achieve early commercialization.

A number of chemicals manufacturers have begun to explore chemical recycling of polystyrene. The fully closed-loop model that we are working
on makes the best use of the infrastructure built by FPCO in 1990 for what it calls “FPCO-method” circular recycling, which involves the collection
and transformation of post-consumer containers using materials recycling. We are enhancing this already essentially complete recycling system by
DGGLQJFKHPLFDOUHF\FOLQJ'HFRPSRVLQJFRORUHGDQGRUSDWWHUQHGSRO\VW\UHQHLQWRVW\UHQHPRQRPHUWRIDFLOLWDWHWKHHI¿FLHQWUHFRYHU\RIUHVRXUFHV
is not an easy proposition, but we are committed to mobilizing DIC’s extensive know-how to facilitate the practical implementation of a system thathelps resolve plastics-related environmental issues.
Manager, Polystyrene Sales Group, Packaging Material Products Division, DIC Corporation

Ryou Minakuchi

Stakeholder Perspective
COMMENT

We look forward to the early establishment of chemical recycling technologies that balance
JUHHQKRXVHJDVHPLVVLRQVUHGXFWLRQDQGHFRQRPLFHIÀFLHQF\Using “FPCO-method” circular recycling, we collect post-consumer foamed polystyrene containers and transformthem into new food containers. We also recycle colored and/or patterned foamed polystyrene into a variety ofother items. Our desire to be able to recycle these latter containers inspired efforts to begin research in the areaof chemical recycling.
The challenge with chemical recycling technologies is that they will not be sustainable unless they help reduce
JUHHQKRXVHJDVHPLVVLRQVDVZHOODVPDNHVHQVHHFRQRPLFDOO\:HDUHFRQ¿GHQWWKDW',&ZLOOEHDEOHWRFOHDU
both of these hurdles to swiftly establish the best and most appropriate technologies.
Currently, colored and/or patterned polystyrene food containers are not the only type currently in use thatcannot be recycled into food containers. With this in mind, we look forward to increasing the range of input
materials we can recycle to bolster consumer recognition of the fact that polystyrene is an easy-to-recycle,
environment-friendly plastic and in so doing to expand the market for such containers.

DIC Report 2021

29

Executive Director,
Executive General Manager ofPurchasing Division, FP Corporation

Hiroshi Ogawa

Special Feature: Product Development Designed to Create New Value

Packaging & Graphic
Nashiji Film Made with Biomass Plastic(DIFAREN ® A7440Bio)

SDGs Goals 12 and 13',&KDVGHYHORSHGDQHZIRRGSDFNDJLQJÀOPWKDWLVUHÀQHGDQGYLVXDOO\DSSHDOLQJZKLOHDWWKHVDPHWLPH
reduces CO2 emissions.
Value Creation

Expansion of applications for biomass plastics to advance decarbonization',&LVWDNLQJGHFLVLYHVWHSVWRKHOS-DSDQEHFRPHFDUERQQHXWUDOE\
plastics capture atmospheric CO2 through photosynthesis during their growth,so even incineration after use, which releases CO 2, does not essentially
increase CO2 in the atmosphere. By leveraging the carbon-neutral nature ofbiomass plastics, we are working to reduce our dependence on petroleum
resources, as well as to contribute to the prevention of global warming andaccelerate resource recycling.

Curbing global warming is an urgent challenge facing the world. Japan has set atarget for reducing overall greenhouse gas emissions to zero by 2050. The country’s
government has positioned the creation of a mass production configuration toadvance the popularity of biomass plastics as a key theme in its plan for achieving
this goal and is encouraging the industrial sector to promote related efforts.
The plants that account for a portion of the raw materials used in biomass
Biomass helps prevent global warming

What does “carbon neutral” mean?

As a carbon-neutral resource, biomass curbs
CO2 emissions

The plants used in biomass plastics capture atmospheric CO2 through photosynthesis during their growth,so even incineration after use, which releases CO2, does not essentially increase CO2 in the atmosphere.

Fossil fuel dependency: The world of the past

Employing biomass: The world of the future

CO2

CO2

Biomass energy

CO2

CO2

Biomass products

Capturing CO2 andrecycling resources
Photosynthesis

Advance of global warming

Non-circularPrevention of global warming

Sustainable and circular
Source: Biomass Nippon, Japan Organics Recycling Association

DIC Report 2021

30

Special Feature: Product Development Designed to Create New Value

Developing DIFAREN ® A7440Bio, which boasts a 20% biomass content
In addition to protecting contents and offering suitability for packaging,films used in food packaging must deliver, among others, heat
UHVLVWDQFHKHDWVHDODELOLW\ULJLGLW\ÀH[LELOLW\FROGUHVLVWDQFHDQGHDV\peel and easy-open properties.
In 1970, DIC developed coextruded multilayer films for packaging
in which multiple resins with different characteristics are laminated
together in a single process. Using the same manufacturing process,the Company has also developed the DIFAREN ® A7440 series ofNashiji SHDUVNLQWH[WXUHG KLJKO\DWWUDFWLYHHPERVVHGPDWWH¿OPVZLWKa surface feel reminiscent of traditional Japanese paper, which hasearned high marks in the area of food packaging. A recent addition
to this lineup, developed in line with our commitment to promoting
decarbonization, is DIFAREN ® A7440Bio, made with biomass plastic$'LVWLQFWLYHO\DIC Response

DQGUHVLQ7KLVQHZ¿OPWKH¿UVWLQWKHDIFAREN ® OLQHXSWREHFHUWL¿HG
from the Japan Organics Recycling Association, was launched inAugust 2020.

Biomass Mark showing biomass content

DIFAREN ® A7440Bio NashijiELR¿OP

The Biomass Mark is an environment-friendly productlabeling program in Japan that certifies biomassderived products compliant with key laws, regulations
and standards for quality and safety.

$FKLHYLQJDYLVXDOO\DSSHDOLQJ¿OPZLWKDELRPDVVFRQWHQWXVLQJH[LVWLQJSURGXFWLRQHTXLSPHQW

3XUVXLQJDEDODQFHGFRPELQDWLRQRIWKHSK\VLFDOSURSHUWLHVRISHWUROHXPEDVHGDQGELRPDVVSODVWLFVproduction of this Nashiji film, made with biomass, which delivers thesame functionality and texture as petroleum-based Nashiji film, without
having to modify existing equipment in any way.

Nashiji film has a surface feel reminiscent of paper, but produces
no paper dust and so is hygienic, as a result of which it is attracting
a great deal of attention not only in Japan but also across Asia, theAmericas and Europe. Unfortunately, producing Nashiji film with biomass
plastics and maintaining its performance properties and visual appeal
has proven difficult. Adding biomass to principal petroleum-based raw
materials upsets the balance of properties, causing a variety of issues.
To overcome this, DIC engineers studied the microstructure of the film
and searched for the optimal resin–biomass formulation through aprocess of trial and error. Then, making full use of multilayer film forming
technology cultivated over many years of collaboration with CAST FILM
JAPAN CO., LTD., DIC succeeded in producing DIFAREN ® A7440Bio,
which boasts a 20% biomass content. The Company also achieved mass

DIFAREN ® A7440Bio Production Method and Composition (Example)

Extruder #1
Raw material #1

Extruder #2

DIFAREN ® A7440Bio
T die(Build up of layers)

Raw material #1

Raw material #2

Raw material #2

Extruder #3
Raw material #3

Cooling roll

Heating and melting

DIC Report 2021

31

Raw material #3

Special Feature: Product Development Designed to Create New Value,QFUHDVLQJELRPDVVFRQWHQWRISDFNDJLQJPDWHULDOE\XVLQJHQYLURQPHQWIULHQGO\LQNVDQGDGKHVLYHVIn addition to DIFAREN ® A7440Bio, numerous other environmentfriendly DIC Group products have earned certification from the Japan
Organics Recycling Association. These include biomass inks, including
FINART BM gravure inks for lamination developed by DIC Graphics,
and adhesives such as DICDRY LX-500 BM, underscoring DIC’s ability
to provide inks, adhesives and films that support environment-friendly
packaging. Use of heat-sealable biaxially oriented polypropylene(BOPP) sealant film, inks and adhesives made with biomass-derived raw
materials on a DIFAREN ® A7440Bio base makes it possible to create apackaging film with an even higher overall biomass content. The ability
to provide a full range of biomass packaging materials is a distinctive

competitive strength enjoyed by the DIC Group, which develops andmanufactures inks, adhesives and films for packaging applications.

Base film
Adhesive
Ink

Sealant film Heat-sealable BOPP Film
(Adherend)
Example of DIFAREN ® A7440Bio-based packaging material',&*URXS%LRPDVV%DVHG3URGXFWV ([DPSOHVBase film:
DIFAREN ®
A7440Bio

Adhesive:
DICDRY
LX-500 BM

Ink:
FINART BM
gravure ink

KEY PERSON from DIC

A7440Bio

Adherend

This is a groundbreaking product that responds to the needs of customers who want to
GLIIHUHQWLDWHWKHLUSURGXFWVLQWHUPVRIHQYLURQPHQWIULHQGO\SHUIRUPDQFH

Food products manufacturers and other customers are constantly conducting research to uncover packaging materials that differentiate them
IURPRWKHUFRPSDQLHV7RGDWH',&KDVHDUQHGKLJKPDUNVIRULWVUH¿QHGDQGYLVXDOO\DSSHDOLQJNashiji¿OPV,DPSDUWLFXODUO\SOHDVHGDWWKH
addition to our lineup of DIFAREN ® A7440Bio, which uses biomass plastic. The reaction to this new product at a recent packaging materials
H[KLELWLRQZDVWUHPHQGRXVO\SRVLWLYH,QLWLDOO\,KDGWKRXJKWLWZRXOGEHGLI¿FXOWWRUDLVHELRPDVVFRQWHQWVR,DPSDUWLFXODUO\JUDWHIXOWRWHFKQRORJ\
and manufacturing teams for their work to make this possible. I look forward to building on this groundbreaking product to actively promote ourenvironment-friendly offerings both in Japan and overseas.
Manager, Films Sales Group, Packaging & Graphic Business Group, DIC Corporation

KEY PERSON from DIC

Masaharu Ito

Building on this biomass NashijiÀOPWRH[SDQGWKHXVHRIELRPDVVGHULYHGPDWHULDOVZLOOEHDNH\challenge going forward.

The project to replace petroleum-derived raw materials with bioplastics while recreating the Nashiji texture was a series of stumbling blocks.
(YHU\WKLQJZRXOGEH¿QHDWWKHODEOHYHOEXWRQWKHSURGXFWLRQOLQHSUREOHPVZRXOGDULVH$QGWKLVGLGQ¶WKDSSHQMXVWRQFHRUWZLFHEXWPDQ\WLPHV
6RZKHQZH¿QDOO\DFKLHYHGVWDEOHSURGXFWLRQLWZDVSUHWW\HPRWLRQDO7KDWVDLGZHDUHQRWUHVWLQJRQRXUODXUHOV7KHUHDUHPDQ\HQYLURQPHQW
IULHQGO\UDZPDWHULDOVLQWKHZRUOGDQGLWLVRXUPLVVLRQDVDPDQXIDFWXUHURI¿QHFKHPLFDOVWRPDVWHUWKHLUXVH$QRWKHUFKDOOHQJHLQWKH\HDUVDKHDGZLOOEHWRUHGXFHWKHWKLFNQHVVRIWKLV¿OPEHORZȝPZKLFKZLOOFRQWULEXWHWRWKHUHGXFWLRQRIZDVWH%RWKDUHKLJKKXUGOHVEXWZHZLOO
capitalize on our experience to strive for an even higher level of sustainability.
Packaging Materials Technical Group 4, Packaging Materials Technical Division, DIC Corporation

DIC Report 2021

32

Tomohisa Kida

Special Feature: Product Development Designed to Create New Value

Healthcare
An FFC that Improves the Skin’s Barrier Function from the Inside Out(PHYCONA Skin Moistlifting Tablets)

SDGs Goals 3 and 12

DIC has developed a new “edible” skin-care product, made withphycocyanin extracted from Spirulina blue-green algae, that
addresses various skin problems.
Value Creation

Edible skin care: A new approach to increasing skin’s moisture retention

DIC’s new PHYCONAVXSSOHPHQWRIIHUVDVDIHDOWHUQDWLYHIRULQGLYLGXDOVZKRIHHOWKDWWKHUHDUHOLPLWVWRWKHEHQHÀWVRIWRSLFDOVNLQFDUHSURGXFWVWKHUHDUHOLPLWVWRWKHEHQH¿WVRIWRSLFDOVNLQFDUHSURGXFWVDQGWKDWdry skin is the main problem they face regardless of the season.
The DIC Group, which seeks to support healthy and comfortable
lifestyles, has applied its experience in the cultivation of Spirulina,
which is already used widely in dietary supplements and food
SURGXFWVUHFRJQL]LQJWKHSRWHQWLDORIWKLVHGLEOHQXWULHQWULFKEOXH
green algae to improve skin’s moisture retention.

Youthful and healthy skin is the earnest desire of many people—
women in particular. However, the reality is that most people see
their skin begin to lose moisture in their 40s. This is because theskin’s barrier function, which prevents moisture in the skin from
evaporating, deteriorates with age. When the skin’s barrier function
is compromised, whether due to age, irregular lifestyle or poor
nutrition, skin becomes dry. For this reason, many people feel that
What is the skin’s barrier function?
When the skin’s barrier
function is compromised
Moisture is lost from the skin

The skins moisture level decreases sharply after 40
Changes in the skin’s natural moisture content

When the skin’s barrier
function is preserved
Moisture is retained in the skin

(Moisture content)
100

80

0

20s

30s

40s

50s

60s（Age）

Source: Graph of relative value assuming 20s=100 adapted from Journal of the Society of Cosmetic Chemists ofJapan, Vol. 23, No. 11989, and Journal of Japanese Cosmetic Science Society, Vol. 24, No. 1 (2000) 7–13

DIC Report 2021

33

Special Feature: Product Development Designed to Create New Value

Developing PHYCONA, a skin-care supplement that enhances
the skin’s barrier function from the inside out

Suppressing the Evaporation of Moisture and Preventing TEWL

Focusing on the action on the skin of phycocyanin, a pigment–protein
complex found in Spirulina, when consumed, DIC found that it improves
the skin’s barrier function, which suppresses transepidermal water loss
7(:/ &DSLWDOL]LQJRQLWVSDWHQWHGKLJK\LHOGH[WUDFWLRQWHFKQRORJLHVIRUKLJKJUDGH&SK\FRF\DQLQDQGDOORSK\FRF\DQLQIURP6SLUXOLQD',&
VXFFHHGHGLQFRPPHUFLDOL]LQJDQHZVNLQFDUHVXSSOHPHQWGXEEHG
PHYCONA. In a world first, the Company also conducted a clinical
trial to verify the effects of this new supplement as a food product withphycocyanin as an ingredient, scientifically demonstrating its ability toenhance the skin’s moisture retention. As a consequence, an application
to have PHYCONADSSURYHGDVWKHILUVW6SLUXOLQDGHULYHG)RRGZLWKFunctional Claims (FFC) was accepted and in October 2020 DIC launched
PHYCONA Skin Moistlifting tablets.

Treatment group (received phycocyanin)
Placebo group (did not receive phycocyanin)2

Difference in TEWL (g/m 2/hr)

No moisture egress

Moisture egress

4

0

*
-2

TEWL issuppressed-4-6

Day of administration

4 weeks
after administration

8 weeks
after administration

TEWL: Difference in TEWL at start and end of trial (TEWL at start: 10 g/m2/hr–less than 20 g/m 2/hr)(Mean and standard deviation: *p＜0.05)
Intake: 5 tablets/day for 8 weeks; Participants: Treatment group: 40, placebo group: 38
Source: Yasuyuki Imai et al, Japanese Pharmacology & Therapeutics, No. 47, Issue 11 (2019) 1833–1840

How Phycocyanin Affects the Skin
Moisture【Skin lacks moisture】
The skin’s barrier function is compromisedby various factors, including lifestyle,stress and age. As a result, the skin loses
moisture and its ability to suppress theingress of foreign substances.

Epidermis

Phycocyanin acts to improve
the skin’s barrier function fromthe inside out, protecting
moisture from escaping.

【Skin is sufficiently moisturized】

Moisture
Epidermis

The barrier function of the stratum
corneum protects the skin from external
stimuli such as UV light. Because it holds
sufficient moisture, the skin is firm andlustrous.

PHYCONA’s principal raw material is Spirulina, which DIC has cultivated for half a century
In the 1960s, amid concerns that rapid population growth worldwide would lead to a
IRRGFULVLVUHVHDUFKHUVDFWLYHO\H[SORUHGWKHSURGXFWLRQRIIRRGJUDGH\HDVWE\IHHGLQJit petroleum byproducts. Against this backdrop, the efforts of DIC, which entered thebiochemicals business with the objective of developing new sources of protein, led it to
6SLUXOLQDDQHGLEOHEOXHJUHHQDOJDHFRQWDLQLQJPRUHWKDQQXWULHQWVDQGRWKHUKHDOWK
boosting constituents, including amino acids, vitamins and minerals, that grows naturally
in many tropical regions of the world. DIC commenced research into the cultivation of
Spirulina in 1970 and in 1977 became the world’s first successful commercial mass
producer of the algae.
In subsequent years, DIC established the world’s largest Spirulina farms in the United
6WDWHVDQGWKH35&ZKHUHLWSURGXFHVKLJKJUDGH6SLUXOLQDXQGHUTXDOLW\FRQWUROV\VWHPVWKDWVDWLVI\VWULQJHQWJOREDOVWDQGDUGV,QDGGLWLRQWRQXWULHQWVDQGRWKHUKHDOWKERRVWLQJ
constituents, the Company also extracts natural colorants made with phycocyanin, a blue

pigment found in the algae. In 1999, DIC established wholly owned subsidiary DIC Lifetec
WRIXUWKHUVWUHQJWKHQLWVSURGXFWLRQDQGVDOHRI6SLUXOLQDEDVHGSURGXFWVToday, Spirulina—commonly referred to as “the king of superfoods” thanks to its
superb nutritional balance—is used extensively in nutritional supplements, foodproducts, food colorings, animal feed and cosmetics and has become the mostproduced algae in the world.

Raceway ponds at the farm operated by DIC Group company Earthrise Nutritionals,
LLC in the U.S. state of California
Natural pigments found in Spirulina

Spirulina powder

Phycocyanin

ȕ&DURWHQH

DIC Spirulina has earned a variety of key global certifications.

Chlorophyll Hot water extract

DIC Report 2021

34

Special Feature: Product Development Designed to Create New ValueA Distinctively
DIC Response/DXQFKLQJWKHZRUOG¶V¿UVW6SLUXOLQDGHULYHG))&

Properly communicating evidence-based functions and product value
In commercializing PHYCONA, DIC emphasized demonstrating the
product’s scientifically proven functionality and correctly communicating
the commercial value that sets it apart from ordinary heath food products.
The Company thus sought to obtain approval of PHYCONA as an FFC, adesignation that falls under the jurisdiction of Japan’s Consumer Affairs
Agency. Traditionally, labeling of food functionality in Japan had been
OLPLWHGWR)RRGVIRU6SHFL¿HG+HDOWK8VHV )26+8 ZKLFKDUHDSSURYHG

E\WKHJRYHUQPHQWRQDRQHE\RQHEDVLVDQG)RRGZLWK1XWULHQW)XQFWLRQClaims (FNFC) products, which comply with national standards. The FFC
GHVLJQDWLRQZDVFUHDWHGLQZLWKWKHJRDORIH[SDQGLQJFKRLFH7REH
approved as an FFC, a product must comply with standards set by thegovernment, while manufacturers must prove safety and effectivenessbased on scientific evidence, establish rigorous production and quality
control systems, and collect information on adverse health events.

Basic Approach of the FFC System

Ensure safety

Misleading to consumers and promotes
voluntary and reasonable consumer product choices

Establish requirements
for scientific evidence tomake functional claims

Provide consumers
with information throughproper labelingSource: Based on materials published by Japan’s Consumer Affairs Agency

9HULI\LQJIXQFWLRQDOLW\WKURXJKFOLQLFDOWULDOVRIWKHÀQLVKHGSURGXFWAn important consideration once an application for FFC status has
been accepted is how to verify functionality. Two methods can be used:
Systematic literature review, whereby functionality is estimated based
RQH[LVWLQJUHVHDUFKUHSRUWVDQGFOLQLFDOWULDOVRIWKH¿QLVKHGSURGXFW
whereby trial data is compiled into an academic paper and submitted.
DIC and DIC Lifetec chose the latter method. There are still few studies
on phycocyanin and as a result still not enough research reports to countas scientific evidence. Accordingly, although clinical trials are morelaborious and costly than a systematic literature review, the companies
resolved that this was the best way to accurately confirm functionality
and to market PHYCONAZLWKFRQ¿GHQFHLQLWVSHUIRUPDQFH
In 2019, the two companies conducted a clinical trial using PHYCONA
manufactured on an experimental basis using an actual production line.
A total of 96 subjects (all female) aged 20–60 with dry skin were divided

into a treatment group, which received phycocyanin, and a placebogroup, which did not. Changes in TEWL—an indicator of the skin’s
barrier function—were monitored over a period of eight weeks. Trial
results showed that the PHYCONAJURXSVDZDVLJQL¿FDQWGHFUHDVHLQTEWL. Trial data was compiled into an academic paper and in July 2020
the appropriate applications were submitted, resulting in PHYCONA
EHFRPLQJWKHILUVW))&FRQWDLQLQJ6SLUXOLQDGHULYHGSK\FRF\DQLQ,Q
)HEUXDU\',&EHFDPHWKH¿UVWFRPSDQ\WRREWDLQDXVHSDWHQWIRU
“a food product containing phycocyanin as an active ingredient that has
VNLQPRLVWXUHLPSURYLQJDQGRWKHUEHQH¿FLDOSURSHUWLHV´$XVHSDWHQW
is granted for an existing substance when a previously unknown use
is discovered yielding new applications. This newest patent will enable
DIC to realize a considerable competitive advantage in the development
DQGVDOHVRISK\FRF\DQLQEDVHGVNLQFDUHDQGUHODWHGIRRGSURGXFWVDIC Report 2021

35

Special Feature: Product Development Designed to Create New Value&OLQLFDO5HVHDUFKLQWRWKH%HQHÀWVRI3K\FRF\DQLQSkin Moisture
Good
Skin elasticity

Good
S k i n m o i s t u re

＊

15

10

5

Skin Elasticity

10-point increase in elasticity after 4 weeks
20

Treatment group (received phycocyanin)
Placebo group (did not receive phycocyanin)

3

Skin health is key toa translucent complexion

Skin Gloss

15

15

Treatment group (received phycocyanin)
Placebo group(did not receive phycocyanin) ＊＊

＊

＊
＊＊

10

5

10

5

Day of administration

4 weeks
after administration

8 weeks
after administration-5

Po o rPo o rPo o r-5

Moistness is explained as representing the combinationof hydration and smoothness. The trial showed a gradualimprovement in moistness for the treatment group. Aftereight weeks, the difference was significant.

0

Day of administration

4 weeks
after administration

Confirmed decrease in wrinkle depth
460
420

Day of administration

4 weeks
after administration

8 weeks
after administration

＊

380
340
300

0

-5

8 weeks
after administration

Sagging skin and deepening nasolabial folds are telltale signs ofaging. In other words, the internal factors that keep skin firm andsupple and are key to a youthful appearance. The treatmentgroup saw a sharp increase in firmness after four weeks.

Improvement in theappearance of wrinkles

500

(μm)

0

A major factor behind how
old one looks

415-point increase in gloss after 4 weeks
20

Treatment group (received phycocyanin)
Placebo group(did not receive phycocyanin)Good

10-point increase in moistness after 8 weeks
20

Firmness creates a youthfulappearance

Deep

2

Shallow Maximum wrinkle depth

Hydrating action helps the skinretain moistureS k i n g lo s s

1Placebo group(did not receive phycocyanin)

Treatment group(received phycocyanin)

Dryness is a major cause of wrinkles. After eight weeks, a difference in maximum wrinkle
depth measured using the replica method was discernible between the two groups.
Fine vertical lines on
the temples becameless visible, making theskin look smoother.

Gloss is a sign of healthy skin, indicating moistness, elasticity
and vitality. The treatment group saw a 15-point increase ingloss after four weeks.
Day of administration

8 weeks after administration

Clinical trial: Changes in moisture, elasticity and gloss were measured using the Visual Analog Scale (subjective evaluation) from the day of administration (average value ± standard deviation) **P＜0.01 *P＜0.05
Source: Yasuyuki Imai et al, Japanese Pharmacology & Therapeutics, No. 47, Issue 11 (2019) 1833–1840

KEY PERSON from DIC

Our goal was to offer something entirely new.

,WZDVH[FLWLQJWRLQWURGXFHWKHZRUOG¶V¿UVWSURGXFWLQWKHVNLQFDUH¿HOGFRQWDLQLQJDQH[WUDFWRI6SLUXOLQDZKLFK',&KDVVWXGLHGIRUPRUHWKDQ\HDUV7RHQVXUHXQGHUVWDQGLQJRIMXVWKRZDPD]LQJWKLVSURGXFWUHDOO\LVZHUHFRJQL]HGWKHQHHGWRERRVWJHQHUDODZDUHQHVVRILWVPDLQ
ingredient, phycocyanin. We are currently working to increase recognition through the media. The level of interest from both men and women in
their 60s and older has been much higher than expected, underscoring the fact that proper skin care is of interest to people of all ages. Looking
DKHDGZHZLOOFRQWLQXHVWULYLQJWRJDLQDEHWWHUJUDVSRIFXVWRPHUQHHGVZKLOHDWWKHVDPHWLPHH[SDQGLQJRXURSHUDWLRQVLQWKHKHDOWKFDUH¿HOG²
DQLPSRUWDQWJRDOXQGHURXUFXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ²ZLWKDYLHZWRH[SDQGLQJLQWR$VLDDVZHOODVLQWRWKH$PHULFDVDQG(XURSH
Product Manager, Health Care Products Group, Color Material Products Division, DIC Corporation

KEY PERSON from DIC

Taro Ichimoto

Our research into skin aging led us to discover the potential of phycocyanin in this area.

The development of PHYCONAUHVXOWHGIURPRXUUHVHDUFKLQWRVNLQDJLQJZKLFKFRQILUPHGWKHH[FHOOHQWDQWLLQIODPPDWRU\DQGDQWLR[LGDQW
properties of phycocyanin. We had to overcome a number of issues before achieving commercialization. In particular, we struggled to establish atechnology for converting phycocyanin, which is sensitive to heat and alcohol, into a tablet form and coating it to make it easy for people to take whileat the same time ensuring solubility and absorption. Perfecting technologies to facilitate the stable mass production of a natural material also was noteasy. I feel that the acceptance of our application to have PHYCONADSSURYHGDVDQ))&LVDUHÀHFWLRQRIWKHH[SHUWLVHZHKDYHEXLOWXSWKURXJKRXU
\HDUVRI6SLUXOLQDUHVHDUFKDVZHOODVWKHH[WHQVLYHSURGXFWLRQWHFKQRORJLHVZHKDYHDFFXPXODWHGDVDPDQXIDFWXUHURI¿QHFKHPLFDOVManager, Health Care Products Business Planning & Development Group and Health Care Technical Group, Color Material Products Division, DIC Corporation

DIC Report 2021

36

Yasuyuki ImaiSun Chemical’s Activities
Sun Chemical powers through the pandemic.
The devastating global impact of COVID-19 made 2020 a year unlike any other—a year with
unprecedented business challenges. Despite these obstacles, Sun Chemical showed agility in its ability
to pivot business operations to implement crucial health and safety procedures for its employees while
complying with all regulations and maintaining unmatched support for customers across the globe.
By prioritizing customers, employees and local communities, Sun Chemical successfully adapted tomeet the many challenges introduced by COVID-19.
Myron Petruch
President and CEO, Sun Chemical■ Managing Volatile Supply Chains to Deliver for Customers
The pandemic caused significant disruption in global supply chains as well as price volatility in some key raw material categories.
Shifting demand away from industrial applications to healthcare needs exerted pressure on solvents. Additionally, the global supply of
pigments, pigment intermediates and various specialty chemicals were threatened by compromised distribution channels and limited
available labor.
All regions of the world experienced a heavy impact in their supply chains this year, many of which are still seeing challenges.
Although Sun Chemical monitors supply chain needs in all regions of the world, COVID-19 triggered the organization to monitor
purchase orders and supply positions daily, especially as the situation changed rapidly and as supplies were impacted by regional
COVID-19 outbreaks.
Through its strong global footprint, Sun Chemical responded to the constant shifts in the industry to best support customers with areliable supply. Much of Sun Chemical’s portfolio supports essential businesses and Sun Chemical focused its efforts to support thoseareas throughout the pandemic and beyond.

■ Prioritizing the Safety of Employees and their Families
In addition to meeting the supply needs of customers, Sun Chemical equally prioritized thesafety of its employees.
Sun Chemical quickly modified its operations in response to the pandemic. On-site work
was greatly reduced as non-lab and non-manufacturing personnel began to work remotely
to reduce the population density in all laboratories and production sites. The employees whotransitioned to working from home were provided the necessary tools and safety guidance towork remotely.
Additionally, custodial staff increased disinfection and concentrated on frequently touchedobjects to protect on-site employees.
Sun Chemical continues to monitor safety regulations, as well as the changing economic andhealth landscape to better understand what is best for customers and employees.

Masking up: Exceeding customer requirements, while keeping
employees safe

■ Meeting the Needs of the Community
Sun Chemical cares deeply about the health and well-being of employees, customers andpartners, as well as the communities in which they live and work around the world. Afterlearning about the lack of personal protective equipment due to increased demand, Sun
Chemical’s Carlstadt facility in New Jersey produced hand sanitizer for various locations acrossNorth America.
Our talented and dedicated employees have spent the last year working extremely hard,either at our manufacturing plants, our labs or remotely from their homes, to make sure that we
continue to provide the quality products and services that our customers have come to depend
upon from Sun Chemical.
We care deeply about the health and well-being of our customers and partners, as well as thecommunities in which they and their employees live and work around the world.

DIC Report 2021

37

Carlstadt: New safety protocols and sanitation stations
on-siteDIC Asia Pacific’s Activities
DIC Asia Pacific is focused on safety and stable growth.
The pandemic has taught us all not to take safety for granted. Though initially ill-prepared, focused on
VDIHW\RXU',&$VLD3DFL¿FWHDPPDQDJHGWRFXUEWKHVSUHDGRI&29,'DQGVHFXUHVDIHZRUNLQJ
environments. While the pandemic did cause disruptions and confusion, DIC Asia Pacific entities
remained focused on delivering quality products and services.

Paul Koek
Managing Director, DIC Asia Paciﬁc Pte Ltd■ Tackling the Pandemic
The year 2020 was truly unprecedented. While many nations are now rolling out vaccination programs, and over 2.45 billion people
have received at least one dose, COVID-19 will likely persist for some time, affecting both our personal lives and the economy.
The virus reached pandemic status alarmingly fast, infecting over 177 million, taking over 3.83 million lives and pummeling the
global economy. And just as we thought the virus was under control, new variants lead to second and third waves, resulting infurther lockdowns and plant closures.

■ Prioritizing Employee Safety and Stable Growth
The pandemic has taught us all to be constantly vigilant and not take safety for granted. Though initially ill-prepared, focused on safety, our
DIC Asia Pacific team has worked tirelessly to draft new management guidelines and practices, effectively disseminated, and implemented.
Thus, we managed to curb the spread of COVID-19 and secure safe working environments. While the pandemic did cause disruptions andconfusion, DIC Asia Pacific entities have remained focused on delivering the quality products our customers depend on.
Despite the pandemic, DIC Asia Pacific had to make some difficult but necessary decisions. Sadly, we had to transition theAustralian and New Zealand news inks business from a manufacturing to a trading model. We did so successfully and ahead of plan.
In India—where a steep decline in publishing wiped away 70% of normal average volumes—Team DIC has managed operating
profits month-on-month since April 2020. We accomplished this through value engineering, effective cost mitigation and working
capital management. Moreover, DIC India Ltd. was the first to initiate digitalization, introducing the
Ink Master Mobile Application to address day-to-day customer queries.

■ Meeting our Customers and Community Needs
In Thailand, through strong relationships with Global Key Account partners, our DIC colleagues
at Siam Chemical Industry Co., Ltd., managed to secure a large new contract. In Malaysia,
even with virus cases spiking, all entities performed well. Exemplifying DIC CSR, the region
participated in the first regionally coordinated CSR program, with many employees taking time to
distribute DIC Health Packs to the underprivileged and essential workers. This was The DIC Way
in action.

DIC India■ Safety First
Overall, the pandemic impact has been severe, but through our actions, particularly in-plant,
production teams, in-plant technicians, quality control and lab members, and safety officers
helped grow revenue by 6% month-on-month since May 2020. Together with team members
working remotely to coordinate the support functions, DIC Asia Pacific has maintained an
exemplary safety record.
Of course, we had failures. However, we were not disheartened and continued to work evenharder. The Asia–Pacific region managed to achieve a total recordable injury rate (TRIR) of 0.86—
the lowest in the DIC Group and a major achievement, given that our score was over 2.0 the past
two years. We achieved this by focusing on Safety First at all levels, with over 90% of employees
participating in safety e-learning programs.

DIC Compounds (Malaysia)

Siam Chemical Industry

DIC Report 2021

38

DIC (China)’s Activities
Despite COVID-19, DIC (China) continues working to ensure a stable supply of
products and services while prioritizing the safety and health of its employees.
,Q¿VFDO\HDUGUDVWLFFKDQJHVLQWKHRSHUDWLQJHQYLURQPHQWEURXJKWDERXWE\&29,'UHLQIRUFHGXQGHUVWDQGLQJRIWKHLPSRUWDQFHRIWKH
ability to respond swiftly and appropriately. To prevent the spread of infection within the DIC Group, DIC (China) Co., Ltd., took prompt, decisive
steps to protect the safety of workplaces across the PRC. In addition to establishing a framework for safeguarding employee well-being, thecompany focused on securing supply chains to ensure the reliable delivery of products and services to its customers. Despite harsh conditions,',& &KLQD DQGWKHFRPSDQLHVRIWKH',&*URXSLQWKH35&FRQWLQXHZRUNLQJWRIXO¿OOWKHLUUHVSRQVLELOLWLHVDVPHPEHUVRIVRFLHW\
Mao Jianwei
General Manager, DIC (China) Co., Ltd., and DIC (Shanghai) Co., Ltd.

■ Putting the Health and Safety of Employees and their Families FirstThe PRC’s 2020 Lunar New Year holiday began on January 23. While the holiday was originally scheduled to end
on January 30, signs of the emergence of a novel coronavirus prompted the Chinese government to extend theholiday until February 9 in a bid to contain the outbreak. During this period, DIC (China) formulated guidelines formeasures to be implemented, which were communicated to Group companies under its supervision together with
instructions for restarting operations in a manner that guaranteed compliance. These guidelines comprised detailed
directions for prohibiting overseas business trips and curtailing domestic business travel, as well as for encouraging
telework where possible, meticulously staggering working hours for employees required to be on-site, conducting
WHPSHUDWXUHVFUHHQLQJVDWSODQWDQGRI¿FHHQWUDQFHVLPSOHPHQWLQJPDQGDWRU\PDVNZHDULQJDQGWKRURXJKKDQG
washing, enforcing social distancing in the workplace, disallowing use of air conditioning, stepping up disinfection
and installing partitions in staff cafeterias, restricting outsider access and precisely recording data on visitors, andforbidding multiperson gatherings and dining in groups. DIC (China) also conducted company-by-company checks ofadherence to these guidelines to protect the safety of DIC Group workplaces across the region. Since the beginningof the pandemic, no infections have been reported among Group employees or their families in the PRC.

Partitions installed in the employee cafeteria at Qingdao
DIC Liquid Crystal Co., Ltd.

■ Ensuring a Stable Supply of Products and Services
In addition to establishing a framework for safeguarding employee well-being, DIC (China) focused on securing
supply chains to ensure the reliable delivery of products and services to its customers. To guarantee sufficient
access to raw materials despite the pandemic, the company provided demand information to suppliers and adjusted
inventories of those raw materials for which supplies were likely to fall short. On the production front, employees
were moved around as necessary to avoid the excessive concentration of production personnel at particular sites
and facilitate the responsiveness necessary to facilitate on-time production. Steps were also taken to enhance
the safety of logistics, including disinfecting the cargo boxes of transport trucks to dispel customer concerns and
XVLQJGHVLJQDWHGORJLVWLFV¿UPGULYHUVZKRZHUHSURYLGHGZLWKWUDLQLQJRQLQIHFWLRQSUHYHQWLRQDQGJLYHQZHHNO\polymerase chain reaction (PCR) tests. With the expectation that transport could be delayed, customers were asked
in advance to secure inventories. By grasping possible vulnerabilities and implementing preventative measures, the
DIC Group in the PRC was able to achieve annual sales of a level comparable to 2019, evidence of the success of
its efforts to maintain deliveries of products and services to its customers.

■ Working Together to Meet Community Needs
The experiences of the past year under COVID-19 also served to reinforce the understanding of DIC Group
companies in the PRC of the importance of valuing the ties that bind people together. In addition to masks,
companies distributed Spirulina extract to employees to help strengthen their immune systems. In the early months
RIWKHSDQGHPLFZKHQPDVNVDQGRWKHUHVVHQWLDOVZHUHGLI¿FXOWWRFRPHE\VKLSPHQWVRIVXFKLWHPVIURP-DSDQhelped ensure business continuity in the PRC. When the virus began spreading in Japan, DIC Group companies
returned the favor, dispatching shipments of masks and other items to corporate headquarters in Tokyo, as wellas to individual production sites. These companies also worked to contribute to local communities. For example,
97 employees of Changzhou Huari New Material Co., Ltd., volunteered to donate blood to help replenish supplies
depleted by the pandemic. Changzhou Huari New Material also donated 20 modular baths to a temporary hospital in
Hubei Province.
Although vaccination rollouts have begun around the world, when the COVID-19 pandemic will come to an end
remains uncertain. DIC (China) and the companies of the DIC Group in the PRC pledge to continue working as one
to assist their customers, as well as to contribute to society as a whole.
DIC Report 2021

39

Employees at Shenzhen-DIC Co., Ltd., participate in asocially distanced morning assembly

Employees of Changzhou Huari New Material who
volunteered to donate blood

Truck delivering modular baths donated by
Changzhou Huari New Material to a temporary
hospital in Hubei ProvinceCorporate Governance
Basic Approach to Corporate Governance
The DIC Group identifies the purpose of corporate governance as being to ensure effective decision making pertaining to its
management policy of achieving sustainable corporate growth and expansion through sound and efficient management, whileat the same time guaranteeing the appropriate monitoring and assessment of and motivation for management’s execution ofbusiness activities. With the aim of achieving a higher level of trust on the part of shareholders, customers and other stakeholders
and enhancing corporate value, the DIC Group also promotes ongoing measures to reinforce its management system and ensure
effective monitoring thereof.

| Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its global website.
Policy on Corporate Governance WEB https://www.dic-global.com/pdf/ir/management/governance/governance_en.pdf| Corporate Governance Organization
As a company with internal auditors, DIC has a Board of Directors and an Audit & Supervisory Board. The Company has also instituted an executive
RI¿FHUV\VWHPDQGKDVHVWDEOLVKHGD1RPLQDWLRQ&RPPLWWHHD5HPXQHUDWLRQ&RPPLWWHHDQ([HFXWLYH&RPPLWWHHD6XVWDLQDELOLW\&RPPLWWHHDQG
a Quality Committee.

Corporate Governance Organization
General Meeting of Shareholders
Appointment

Appointment

Board of Directors

Audit

Appointment

Audit & Supervisory Board

Nomination Committee
Remuneration Committee

Cooperation

Audit

Accounting auditors
Accounting audit【Execution of business activities】
President and CEO
Sustainability Committee
Quality Committee

Cooperation

Executive Committee

Business groups, New Business Development Headquarters,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquartersʼ administrative units, sites,
Group companies

1

Cooperation

Internal Control Department
Internal audit Responsible Care Department
Quality Assurance Department

Board of Directors

To accelerate decision making and reinforce corporate governance, nine directors have been elected to the Board of Directors. Of the nine,
three are outside directors (one of whom is female). In principle, the Board meets once monthly. The Board of Directors is responsible formaking decisions on matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval, as
ZHOODVIRUPRQLWRULQJWKHH[HFXWLRQRIEXVLQHVVDFWLYLWLHVDVUHSRUWHGE\WKHH[HFXWLYHRI¿FHUV
2Nomination Committee

7KH1RPLQDWLRQ&RPPLWWHHZDVHVWDEOLVKHGDVDQLQWHUQDOFRPPLWWHHRIWKH%RDUGRI'LUHFWRUVZLWKWKHDLPRIHQVXULQJREMHFWLYLW\LQWKHQRPLQDWLRQRIFDQGLGDWHVIRUWKHSRVLWLRQRIGLUHFWRU$XGLW 6XSHUYLVRU\%RDUGPHPEHURUH[HFXWLYHRI¿FHUDQGWKHGLVPLVVDORIVHUYLQJGLUHFWRUVAudit & Supervisory Board members and executive officers. The committee, which submits proposals to the Board of Directors, meets as
QHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHLQGHSHQGHQWRXWVLGHGLUHFWRUVZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLV¿OOHG
by an independent outside director.

DIC Report 2021

40

Corporate Governance3

Remuneration Committee

7KH5HPXQHUDWLRQ&RPPLWWHHZDVHVWDEOLVKHGDVDQLQWHUQDOFRPPLWWHHRIWKH%RDUGRI'LUHFWRUVZLWKWKHDLPRIHQKDQFLQJWKHREMHFWLYLW\RISURFHGXUHVIRU
determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining the salaries and bonuses of directors andH[HFXWLYHRI¿FHUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHGLUHFWRUVZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLVDOVR¿OOHG
by an independent outside director.
4

Executive Committee

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5

Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies and activity plans, as well as to
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directors of regional headquarters. As part of the auditing process, one Audit & Supervisory Board member also attends Sustainability Committee meetings. Detailsof deliberations at meetings and the results thereof are reported to the Board of Directors.
6

Quality Committee

The Quality Committee is a body that deliberates Group quality policies, important measures and key issues. In principle, the committee meets once each quarter
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divisions. As part of the auditing process, one Audit & Supervisory Board member also attends Quality Committee meetings. Details of deliberations at meetings andthe results thereof are reported to the Board of Directors.
7

Audit & Supervisory Board

The Audit & Supervisory Board comprises four members, including two outside members (one of whom is female). In principle, the Audit & Supervisory Board meetsonce monthly. Board activities include debating and determining auditing policies and auditing plans. Board members also report on the results of audits conducted,
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8Internal Auditing Department

The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at DIC and domestic DIC GroupFRPSDQLHV)RU',&*URXSFRPSDQLHVLQ$VLDDQG2FHDQLDWKH35&DQGWKH$PHULFDVDQG(XURSHLQWHUQDODXGLWLQJLVWKHUHVSRQVLELOLW\RIORFDOLQWHUQDODXGLWLQJWHDPV
9

Accounting Auditors

DIC has engaged Deloitte Touche Tohmatsu LLC as its independent auditors. DIC strives to ensure an environment that facilitates the accurate disclosure of
information and fair auditing. The members of the Audit & Supervisory Board, accounting auditors and the internal auditing department conduct audits from theirrespective independent positions, but also liaise periodically to facilitate close cooperation, thereby ensuring the effectiveness of auditing activities.

Meeting Data
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DIC Report 2021

41

Corporate Governance| Rationale Behind Current Corporate Governance Organization',&KDVLQVWLWXWHGDQH[HFXWLYHRI¿FHUV\VWHPDPRYHDLPHGDWVHSDUDWLQJGHFLVLRQPDNLQJDQGLPSOHPHQWDWLRQDQGWKHUHE\DFFHOHUDWLQJEXVLQHVV
execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to its Board of Directors, the Company
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accounting auditors and the internal auditing department. This structure ensures the effective functioning of DIC’s corporate governance system.

| System of Internal Controls
1

Status of the System of Internal Controls

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UHOLDELOLW\RILWV¿QDQFLDOUHSRUWLQJFRPSO\ZLWKODZVDQGUHJXODWLRQVUHOHYDQWWRLWVEXVLQHVVDFWLYLWLHVDQGVDIHJXDUGLWVDVVHWV7RWKLVHQG',&KDV
prepared and operates a system of internal controls, key components of which are summarized below, based upon the Companies Act of Japan and
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and employees of the DIC Group shall comply with, and to disseminate the same.
❷ The Company shall establish an internal notification system as a channel available for the employees of the DIC Group and set up
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❸ In order to ensure the duties of directors are performed properly and efficiently within the DIC Group, the Company shall establish
regulations regarding company organization and authority.
❹ The Company shall formulate medium-term management plans and the annual budget based on management policies and management
strategies, and, through dissemination of the same, ensure common goals are shared within the DIC Group. The Company shall makeprogress reports to the Board of Directors.
❺ Information pertaining to the performance of duties by directors shall be recorded, retained and managed appropriately based on theregulations for document management. The Company shall establish regulations for systems of information management and shall
SUHSDUHDV\VWHPIRUSUHYHQWLQJOHDNDJHRIFRQ¿GHQWLDOLQIRUPDWLRQRIWKH',&*URXS❻ The Company shall formulate a risk management policy and shall identify, assess, prioritize and address properly any risks that may
KDYHDVLJQL¿FDQWLPSDFWRQPDQDJHPHQWRIWKH',&*URXS❼ The Company shall determine an administrative department for each subsidiary from the standpoints of the conduct of business andbusiness management, and shall supervise business affairs by dispatching a director to each subsidiary.
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Basic Policy Toward Eliminating Demands by Antisocial Elements',&¶VEDVLFSROLF\DVRXWOLQHGLQWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLVWRVWDQG¿UPO\DJDLQVWDQWLVRFLDOHOHPHQWVDQGLQQRZD\WRDFTXLHVFH
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other demand presented by antisocial elements, while individuals have been put in charge of efforts at each site and within each Group company.
These individuals work in close collaboration with lawyers and the police to ensure the Company’s responses are resolute. DIC has also preparedand distributed a manual on appropriate responses to such demands, with the aim of raising awareness among employees.

| Outside Directors and Outside Audit & Supervisory Board Members
1

Number and Role of Outside Directors and Outside Audit & Supervisory Board Members

DIC currently has three outside directors and two outside Audit & Supervisory Board members. In addition to attending meetings of the Board of'LUHFWRUVWKHRXWVLGHGLUHFWRUV²ZKRKDYHH[WHQVLYHH[SHULHQFHLQFRUSRUDWHPDQDJHPHQW²VHUYHDVPHPEHUVRIWKH1RPLQDWLRQ&RPPLWWHH
DQGWKH5HPXQHUDWLRQ&RPPLWWHHHQDEOLQJWKHPWRSURYLGHVXSHUYLVLRQZLWKDQLQGHSHQGHQWSRLQWRIYLHZWKHUHE\KHOSLQJWRUHLQIRUFH',&¶V
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management of the DIC Group from an expert, multifaceted and independent perspective, thereby helping to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Audit & Supervisory Board Members

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside Audit &Supervisory Board member, which are shown below. DIC’s outside directors and outside Audit & Supervisory Board members are individuals
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DIC Report 2021

42

Corporate Governance,QGHSHQGHQFH6WDQGDUGVIRU2XWVLGH2IÀFHUV',&GRHVQRWUHFRJQL]HLQGLYLGXDOVZLWKWKHFRQQHFWLRQVOLVWHGEHORZDVEHLQJLQGHSHQGHQWLQWKHDSSRLQWPHQWRIRXWVLGHRI¿FHUV,QGLYLGXDOVZKRDUHH[HFXWLYHRI¿FHUVRI',&RURIRQHRILWVFRQVROLGDWHGVXEVLGLDULHVDWSUHVHQWRUKDYHEHHQLQWKHSUHFHGLQJ\HDUV,QGLYLGXDOVWRZKRPDQ\RIWKHIROORZLQJLWHPVKDYHDSSOLHGLQWKHSUHFHGLQJWKUHH\HDUV❶ $SULQFLSDOEXVLQHVVSDUWQHURIWKH',&*URXS DEXVLQHVVSDUWQHUZLWKZKLFKWUDQVDFWLRQVLQDVLQJOH¿VFDO\HDUH[FHHGRI
WKH',&*URXS¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV
❷ An individual for which the DIC Group is a principal business partner (a company with which the DIC Group’s transactions in aVLQJOH¿VFDO\HDUH[FHHGRIWKHFRPSDQ\¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WR
which this description applies❸ $VKDUHKROGHUZKRKROGVRUPRUHRIYRWLQJULJKWVLQ',&RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❹ $SULQFLSDOOHQGHUWRWKH',&*URXS DOHQGHUIURPZKLFKORDQVLQDVLQJOH¿VFDO\HDUH[FHHGVRIWKH',&*URXS¶VWRWDODVVHWVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❺ $QLQGLYLGXDOZKRKDVUHFHLYHGFRQWULEXWLRQVLQDVLQJOH¿VFDO\HDUWKDWH[FHHGVPLOOLRQRUEHORQJVWRDJURXSWRZKLFKWKLV
description applies❻ An accounting auditor, an accountant who has served as an accounting auditor for the DIC Group or an individual who isDQHPSOR\HHSDUWQHURUDVVRFLDWHRIDQDXGLW¿UPWRZKLFKWKLVGHVFULSWLRQDSSOLHV❼ An individual to whom ❻DERYHGRHVQRWDSSO\EXWZKRKDVUHFHLYHGUHPXQHUDWLRQIURPWKH',&*URXSLQH[FHVVRIPLOOLRQ
in a single fiscal year as a provider of professional services, such as consulting, accounting or legal services, or anLQGLYLGXDOZKREHORQJVWRDJURXSWKDWKDVUHFHLYHGUHPXQHUDWLRQLQH[FHVVRIRILWVFRQVROLGDWHGQHWVDOHVLQWKDW\HDU
as compensation for professional services, such as consulting, accounting or legal services❽ A corporate executive of another company in the event that an executive officer of DIC is appointed to an outside officer
position at that company
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$QLQGLYLGXDOZKRVHWHUPLQRI¿FHDVDQRXWVLGHRI¿FHURI',&KDVH[FHHGHGHLJKW\HDUV
3

Framework for Supporting the Efforts of Outside Directors and Outside Audit & Supervisory Board Members

Prior to meetings of the Board of Directors, relevant materials are distributed to all directors, full-time Audit & Supervisory Board members, outside directors
and outside Audit & Supervisory Board members. In addition, directors bringing matters before the Board provide explanations in advance to outside
directors, while full-time Audit & Supervisory Board members provide explanations as necessary to outside Audit & Supervisory Board members.

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

Composition of the Board of Directors

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facilitate the effective oversight of management, the Board of Directors comprises outside
directors, who maintain independence, and other individuals having a thorough knowledgeof the businesses of the DIC Group, with consideration given to ensuring a balance amongnecessary knowledge, experience and capabilities. In light of the DIC Group’s global
operations, DIC also strives to ensure diversity in the Board’s composition.
One member of the Board of Directors is female, as is one member of the Audit &Supervisory Board.
Composition of the Board of Directors and the Audit & Supervisory Board
In-house

Outside

Total

Percentage of outside
members

Directors

6

3

9

33.3%

Audit & Supervisory
Board members

2

2

4

50.0%

Total

8

5

13

38.5%

DIC Report 2021

43

In-house
Outside

38.5%
61.5%

Corporate Governance2

Remuneration for Executives

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HOLJLEOHIRUERQXVHVDQGVWRFNFRPSHQVDWLRQ2WKHUGLUHFWRUVDQGRXWVLGHGLUHFWRUVDUHHOLJLEOHIRUEDVLFUHPXQHUDWLRQRQO\5HPXQHUDWLRQ
for Audit & Supervisory Board members consists of basic remuneration only and is determined through discussion involving all Audit &Supervisory Board members, in accordance with internal rules established by the Audit & Supervisory Board, with consideration given to
ensuring a balance with remuneration for directors and to prevailing market rates.
Remuneration for Directors and Audit & Supervisory Board Members in Fiscal Year 2020
Total remuneration(Millions of yen)

Composition of remuneration(Millions of yen)
Basic salary

Bonus

Stock
compensation

1XPEHURIGLUHFWRUVDQG$XGLW& Supervisory Board members

Directors(excluding outside directors)

264

200

49

15

6

Audit & Supervisory Board members(excluding outside Audit & Supervisory
Board members)

60

60

―

―

3

2XWVLGHRI¿FHUV

69

69

―

―

5

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3

Evaluation of the Board of Directors’ Effectiveness

DIC analyzes and evaluates the effectiveness of the Board of Directors annually via a self-evaluation conducted by the directors and Audit
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self-evaluations, Board administration and other issues, responses to which were analyzed and evaluated by the Board of Directors.
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,Q¿VFDO\HDU',&ZLOOVHHNWRIXUWKHUEROVWHUWKH%RDUG¶VHIIHFWLYHQHVVE\UHYLHZLQJWKHLPSOHPHQWDWLRQVWDWXVRISULRULW\PHDVXUHVVHWIRUWKLQ',&DQGE\WDNLQJVWHSVWRHQKDQFHGLVFXVVLRQUHJDUGLQJDPRQJRWKHUVWKHFRQWHQWRIWKHQH[WPHGLXPWHUPPDQDJHPHQWSODQ
and the strengthening of internal controls and the risk management system, as well as of the monitoring thereof by the Board of Directors, aspart of its ongoing effort to promote improvements.

DIC Report 2021

44

A Message from an Outside Director

I sincerely believe that DIC, with its emphasis
on integrity, sincerity and goodness, has an
excellent corporate culture.

Kazuo Tsukahara
Outside Director
April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation
June 2014 Advisor, IHI Corporation

A Rich Corporate Climate
When I was appointed as an outside director in 2017, I was immediately attracted to DIC’s Color & Comfort by Chemistry management vision. To my mind,
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from material to spiritual wealth. To achieve this vision, we are probing ever more deeply to formulate management strategies that more clearly align our
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to be extremely encouraging. The driving force behind our efforts to put this strategy into practice is a rich corporate climate, which, as shown by our ESG
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A Highly Functional Corporate Governance Organization',&¶V%RDUGRI'LUHFWRUVHQJDJHVLQOLYHO\GLVFXVVLRQVDQG,JLYHLWKLJKPDUNVIRUHIIHFWLYHQHVV,DPFRQVWDQWO\LPSUHVVHGE\GLUHFWRUV¶ZLOOLQJQHVVWRDFFHSWharsh criticisms from outside directors and apply them to management. The Company was early to establish a Nomination Committee and a Remuneration
Committee, both of which are chaired by an outside director. Outside directors also comprise the majority of the members on these committees, evidence
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The Next Step Forward',&UHFRJQL]HVWKHLPSRUWDQFHRIDFNQRZOHGJLQJFKDQJHVLQRXURSHUDWLQJHQYLURQPHQW²QRWDEO\WKHGHFOLQHLQGHPDQGUHODWHGWRSXEOLVKLQJDQGDGYHUWLVLQJPHGLD²DQGRIVHDUFKLQJIRUQHZEXVLQHVVHVWKDWZLOOHQDEOHXVWRVKLIWWKHIRFXVRIRXUEXVLQHVVSRUWIROLRDZD\IURPSULQWLQJLQNV:HKDYHVWURQJPDUNHWLQJDQG
technological capabilities, so if we are able to effectively promote measures based on our two core strategies—Value Transformation and New Pillar Creation—weare well positioned to continue being a company that is able to contribute to society. On this point, there are two things to which we need to pay particular attention.
7KH¿UVWLVWKDWRXUHIIRUWVWRSURPRWH';DUHFXUUHQWO\OLPLWHGWRIUDJPHQWHGDQGEXVLQHVVVSHFL¿FLQLWLDWLYHV*LYHQWKDW';ZLOOEHDQLQWHJUDOSDUWRIWKH
ZRUOGLQZKLFKZHOLYHLQWKHIXWXUH,WKLQNLWLVLPSRUWDQWWKDWZHSURPRWHFRPSUHKHQVLYHDQGV\VWHPDWLFHIIRUWVWRFKDQJHWKHZD\ZHFRQGXFWEXVLQHVV7KH
VHFRQGLVWKDWZKLOHZHDUHJRRGDWXQHDUWKLQJQHZRSSRUWXQLWLHVLQH[LVWLQJGRPDLQVZHQHHGWRWDNHDJUHDWHULQWHUHVWLQWUHQGVLQRWKHULQGXVWULHVDQGVHHNWREURDGHQRXUIRFXV7KHJURZLQJLPSRUWDQFHRIHOHFWULFYHKLFOHV (9V DXWRQRPRXVGULYLQJDQGURERWVWKDWXWLOL]H$,DUHJDUQHULQJWUHPHQGRXVDWWHQWLRQ
:HKDYHRXUHDUVLQWKHDXWRPRELOHLQGXVWU\EXWZHVKRXOGDOVRKHHGZKDWLVJRLQJRQLQURERWLFVDQGRWKHUPDFKLQHU\DQGHQJLQHHULQJUHODWHGLQGXVWULHV,
EHOLHYHVWURQJO\WKDWWKHUHDUHPDQ\EXVLQHVVRSSRUWXQLWLHV²LQIRUH[DPSOHQXUVLQJFDUHDQGPHGLFDOFDUH²IRUURERWVWKDWZRUNDORQJVLGHKXPDQV

Becoming a Company that Offers Something a Little Different',&LVDFRPSDQ\WKDWERDVWVDSURXGKLVWRU\VWUHWFKLQJEDFNPRUHWKDQDFHQWXU\DVZHOODVRXWVWDQGLQJWHFKQRORJLFDODQGVDOHVFDSDELOLWLHV1RQHWKHOHVVDOO
companies must change with the times. We are actively promoting ambitious M&A initiatives that are breathing new air into the Company. I am excited to see
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to us being seen as a chemicals company that produces distinctive products that offer something a little different from our competitors. This is the aspiration
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45

Promoting Digital Transformation| Introduction,Q¿VFDO\HDU',&EHJDQDGYDQFLQJGLJLWDOL]DWLRQLQWHFKQLFDODQGSURGXFWLRQGHSDUWPHQWV,Q¿VFDO\HDUWKH&RPSDQ\HVWDEOLVKHGWKH';
3URPRWLRQ'HSDUWPHQWDGHGLFDWHGGHSDUWPHQWFKDUJHGZLWKDGYDQFLQJ';DQGEHJDQDGYDQFLQJGDWDFRRUGLQDWLRQDPRQJPXOWLSOHGHSDUWPHQWVLQDGGLWLRQWRGHSDUWPHQWVSHFL¿FHIIRUWV7KH¿UVWFKDOOHQJHVWKHQHZGHSDUWPHQWZLOODGGUHVVDUHWRLPSURYHWKHHI¿FLHQF\RI&RPSDQ\ZLGHEXVLQHVVSURFHVVHVDQGWRVWHSXSHIIRUWVWRIRVWHUKXPDQUHVRXUFHVDIWHUZKLFKLWZLOOWXUQLWVDWWHQWLRQWRWUDQVIRUPLQJWKH',&*URXS¶VEXVLQHVVIRUPDWDQG
EXVLQHVVPRGHOV| Initiatives in Technical and R&D Departments
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0, LQVRPHDUHDVRIPDWHULDOVGHYHORSPHQW,Q-DQXDU\',&HVWDEOLVKHGWKH'DWD6FLHQFH&HQWHUZKLFKKRXVHVGDWDVFLHQWLVWVDQG$,HQJLQHHUVWR
facilitate the introduction of AI and MI into the development of products and technologies, and embarked on full-scale initiatives to bolster business process
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*RLQJIRUZDUG',&ZLOOVWHSXSHIIRUWVWRIRVWHUKXPDQUHVRXUFHVLQKRXVH7KH&RPSDQ\ZLOODOVRZRUNZLWKWKLUGSDUW\RUJDQL]DWLRQVDQGPDNH$,
LQIUDVWUXFWXUH±UHODWHGLQYHVWPHQWVWRH[SDQGDQGHQKDQFHWKH'DWD6FLHQFH&HQWHUZLWKWKHDLPRIKDOYLQJWKHGHYHORSPHQWVWDJHIRUQHZSURGXFWVDQG
GRXEOLQJWKHQXPEHURIGHYHORSPHQWWKHPHVXQGHUSLQQLQJLWVWZRFRUHVWUDWHJLHV9DOXH7UDQVIRUPDWLRQWKDWLVVWUHQJWKHQLQJFRUSRUDWHVWUXFWXUHWKURXJKTXDOLWDWLYHUHIRUPVRIEXVLQHVVHVDQG1HZ3LOODU&UHDWLRQRUWKHFUHDWLRQRIQHZEXVLQHVVHVLQUHVSRQVHWR(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHV
0,DSSOLHVVWDWLVWLFDODQDO\VLVDQGRWKHULQIRUPDWLFVWHFKQLTXHVWRVHDUFKODUJHDPRXQWVRIGDWDIRUQHZPDWHULDOV| Production Department Focus: Creating Smart Production Facilities
Production departments will advance use of factory automation (FA) to automate production systems, in addition to pursuing collaboration bothin-house and with external organizations to realize “smart factories,”* and improve the manufacturing infrastructure by building an operational
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Key process innovations

Use of the IoT for electronic
documentation and process management

Sensing/Automation

Digitalization of maintenance

Innovation of key processes using digitaltwin and simulation technologies, resulting
in shorter lead times and improved yields

Semi-automation of work confirmation
thanks to systems support / availability ofdigital tools (paperless offices, augmented
reality (AR) navigation, remote monitoring) /centralized management and use of data

Use of soft sensors facilitates automatedprocess analysis, a bottleneck to the
reduction of labor requirements; automaticformulation of optimal production plans
thanks to systems support

Predictive maintenance made possible bysensing and systematization; reductionof losses due to equipment failure andoptimization of repair costs

Data-driven process management

Data-driven quality control

Centralized monitoring

Passing on of skills to the next generation

Use of simulation function, which is basedon real-time process data, makes it possible
to predict reaction end-point and gauge
appropriate timing for the addition of raw
materials, reducing variations in quality andprocessing times

Allows analysis of the correlation between
actual quality and quality parameters;
sensing technologies enable precise control
DFFRUGLQJWRGHJUHHRILQÀXHQFHLPSURYLQJand reducing variations in product quality

Allows monitoring of production staff at sites inJapan and overseas from a single centralized
monitoring room staffed by professionals;
helps in creating a production configurationthat ensures high product quality and stable
operations with minimal staff

Makes use of 3D site data and AR
navigation; AI technology enables thetransfer of employees’ formal knowledge
into data, creating a positive environment
for fostering the next generation of humanresources| $XWRPDWLRQWKDW/HYHUDJHV$,7HFKQRORJLHVDQG,QFUHDVHG3URGXFWLRQ'DWD9LVXDOL]DWLRQWR,PSURYHWKH(IÀFLHQF\RI2SHUDWLRQV)RUWKHFUHDWLRQRISURGXFWLRQVFKHGXOHVDWDVNXVXDOO\SHUIRUPHGXVLQJ([FHORUE\KDQG',&KDVLQWURGXFHGSURGXFWLRQVFKHGXOHUVDWVRPHVLWHVLQ-DSDQDQGRYHUVHDVDQGKDYHEHJXQWRDQDO\]HWKHEHQH¿WVZKLFKKDYHLQFOXGHGWKHV\VWHPDWL]DWLRQRIVFKHGXOLQJVNLOOVDQGDVKRUWHQLQJRIZRUNKRXUV',&LVDOVRVWULYLQJWRLPSURYHWKHHIILFLHQF\RIRSHUDWLRQVLQFOXGLQJJRLQJSDSHUOHVVLHXVLQJHOHFWURQLFGRFXPHQWDWLRQDQG
GDVKERDUGVWRYLVXDOL]HRSHUDWLQJVWDWXVDQGIDFLOLWDWHWKHVPRRWKKDQGLQJRYHURIZRUNGXWLHV| 8VLQJ'LJLWDO7ZLQVWR2SWLPL]H6PDOO/RW'LYHUVLÀHG%DWFK3URFHVVHV$WDSRO\PHUSURGXFWLRQIDFLOLW\',&LVHQKDQFLQJWKHLQIUDVWUXFWXUHE\EXLOGLQJDQ27QHWZRUNDLPHGDWIDFLOLWDWLQJDFHQWUDOL]HGPRQLWRULQJV\VWHPWKDWHQVXUHVVWDEOHSURGXFWLRQZLWKPLQLPDOVWDII7KHREMHFWLYHRIWKHVHPHDVXUHVLVWRUHGXFHODERUUHTXLUHPHQWVDVZHOODVWRLPSURYHSURGXFWLYLW\DQGTXDOLW\$WWKHVDPHWLPHWKH&RPSDQ\LVZRUNLQJZLWKWKLUGSDUW\RUJDQL]DWLRQVWRRSWLPL]HVPDOOORWGLYHUVL¿HGEDWFKSURFHVVHVE\PDNLQJXVHRIGLJLWDOWZLQV ZLWKDGYDQFHGVLPXODWLRQFDSDELOLWLHVHPSOR\LQJ$,DQG,R7WHFKQRORJLHVWRUHDOL]HNH\SURFHVVLQQRYDWLRQVDQGHVWDEOLVKWHFKQRORJLHVIRURSWLPL]HGDXWRPDWHGRSHUDWLRQV$GLJLWDOWZLQLVDYLUWXDOGLJLWDOUHSOLFDRIDQDFWXDOSK\VLFDOHQYLURQPHQW7KHFUHDWLRQRIGLJLWDOWZLQVIDFLOLWDWHVUHDOLVWLFVLPXODWLRQVDIC Report 2021

46

Promoting Digital Transformation%XLOGLQJRI'LJLWDO7ZLQV
sis/simulation trial
Analy
・Ability to flexibly combine twins
・Low cost

Modeling

DesignModelIntelligenceIntelligence

Data

Data

Data

Visualization/advice

Information/data

Information/data

・Semantic model・Real time

Automated control

Analysis/simulation

Cyber world

Data

Data

Data

Data Executive
Data
Administrator
People Frontline worker

Goods

Data

・Visualization
・Guidance anddirections
・Automation

Value

Realizeentation of physical world
epres
ital r
g
i
d
ate
Cre

Intelligence

Data

Source: Based on materials on infrastructure development for Japan’s transformation into anLQIRUPDWLRQDQGVHUYLFHRULHQWHGHFRQRP\SUHSDUHGE\WKH0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\0DUFK¥ ¥ ¥Physical world| Fusing the Tacit Knowledge of Experts and AI to Pass Knowledge on to Future Generations',&KDVVHOHFWHGDSLJPHQWVSURGXFWLRQIDFLOLW\DVDPRGHOIDFWRU\DQGLVZRUNLQJWROHYHUDJHRSHQLQQRYDWLRQWR³JHQHUDOL]H´ WKHWDFLWNQRZOHGJHRI
H[SHUWVFXOWLYDWHGRYHU\HDUVRIH[SHULHQFHXVLQJVHOILPSURYLQJ$,7KLVLQLWLDWLYHLVGHVLJQHGWRHQVXUHVXFKNQRZOHGJHLVHIIHFWLYHO\SDVVHGRQWRIXWXUHJHQHUDWLRQV,QDGGLWLRQVPDUWJODVVHVDUHEHLQJXVHGWRVXSSRUWWKHLQDXJXUDWLRQRIDQHZSURGXFWLRQOLQHDWWKH6KLJD3ODQWDOORZLQJDFFHVVWRKDQGVIUHHUHPRWHVXSSRUWIURPRYHUVHDVHTXLSPHQWPDQXIDFWXUHUV,QWKLVFRQWH[W³JHQHUDOL]H´PHDQVWRWUDQVIRUPWKHH[FOXVLYHVSHFLDOL]HGNQRZOHGJHRIH[SHUWVLQWRDQHDV\WRXQGHUVWDQGIRUPWKDWLVHDV\IRUVXEVHTXHQWJHQHUDWLRQVWRXQGHUVWDQG

Use of Self-Improving AI to Pass On Knowledge

Use of Smart Glasses to Provide Remote Support

ExpertProblem graphResults checkedto narrow down
possibilities anduncover problems③ Trouble allocation① Malfunction

OverseasVideo② Sound issue
used to③ Information
narrow down possibilities

Domestic siteVideoof problems④ Extractionin order of similarity

Video and text

Self-improving AI
Smart glasses

Video and text
DIC server

Computer (browser)

Internet

List of possible problems
Young employee| Sales and Digital Marketing Initiatives,QVDOHVDQGPDUNHWLQJ',&LVFDSLWDOL]LQJRQPDUNHWLQJDXWRPDWLRQ 0$ WRKROGRQOLQHH[KLELWLRQVLQDQHIIRUWWRSURPRWHHIILFLHQWVDOHVDQG
PDUNHWLQJLQLWLDWLYHVLQWKLVHUDRI&29,',Q)HEUXDU\WKH&RPSDQ\KDGDERRWKDQGKHOGDYLUWXDOH[KLELWLRQDVSDUWRILWVSDUWLFLSDWLRQ
LQ72.<23$&.DNH\SDFNDJLQJPDWHULDOVLQGXVWU\WUDGHVKRZKHOGRQOLQHDVZHOODVGHEXWHGDYLUWXDOWUDGHVKRZSODWIRUPLQWURGXFLQJDSSUR[LPDWHO\SDFNDJLQJUHODWHGSURGXFWVDQGVROXWLRQVZKLFKKDVVLQFHEHHQYLVLWHGE\DZLGHUDQJHRIFXVWRPHUV,QWKHDUHDRIVDOHVWKH',&*URXSVHHNVWRYLVXDOL]HDQGVWUHDPOLQHUHODWHGDFWLYLWLHVH[SHGLWHFXVWRPHUVHUYLFHDQGLQFUHDVHWKHFRQWUDFWFRQFOXVLRQUDWHWKURXJKLQIRUPDWLRQVKDULQJFROODERUDWLQJWRFRQGXFWYDULRXVLQLWLDWLYHVDVZHOODVWRDQDO\]HDQGGHSOR\DFFXPXODWHGVDOHVGDWD7RWKHVHHQGVWKH*URXSLVH[SORULQJ
WKHLQWURGXFWLRQRIDVDOHVIRUFHDXWRPDWLRQ 6)$ V\VWHP0$XVHVWRROVDQGVRIWZDUHWRVXSSRUWPDUNHWLQJHIIRUWVLQFOXGLQJWKHVHFXULQJRIQHZFXVWRPHUVDQGWKHFXOWLYDWLRQRISURVSHFWLYHFXVWRPHUV| Initiatives in the Area of Human Resources',&LVDOVRSODFLQJDSULRULW\RQIRVWHULQJWKHKXPDQUHVRXUFHVQHFHVVDU\WRDGYDQFHYDULRXVHIIRUWV,Q¿VFDO\HDUWKH&RPSDQ\EHJDQRIIHULQJWUDLQLQJIRUIXWXUHGDWDVFLHQWLVWVLQWKHHIIHFWLYHXVHRIGDWD7KHIRUPHUDLPVWRH[SDQGWKHQXPEHURIGDWDVFLHQWLVWVRQVWDIIE\WKURXJKLQWHUQDODQGH[WHUQDOWUDLQLQJ)RUWKHODWWHU',&KDVHVWDEOLVKHGDIUDPHZRUNWKDWVHHNVWRLPSURYHGDWDOLWHUDF\DWDOOOHYHOVDQGUDQJHVIURPVHPLQDUVDQGWDLORUHGWUDLQLQJIRUPDQDJHPHQWOHYHOHPSOR\HHVWRDUDQNVSHFL¿FFXUULFXOXPIRUUHJXODUHPSOR\HHV

DIC Report 2021

47

Directors, Audit & Supervisory Board Members and Executive Officers（ 2019 年 0 月現在）
(As of May 2021)| Directors

1

Masayuki Saito

Chairman of the Board of Directors

2

Kaoru Ino

Representative Director

3

Toshifumi Tamaki

Representative Director

4

Yoshihisa Kawamura

Director

5

Takeshi Asai

Director

6

Shuji Furuta

Director

7

Kazuo Tsukahara

Director*

6

9

Kuniko Shoji

Director*

8

6

5

7

9

Yoshiaki Tamura

Director** Outside

3

1

2

4

| Audit & Supervisory Board Members
1

Hiroyuki Ninomiya

Full-Time Audit & Supervisory Board Member
2

Akihiro Ikushima

Full-Time Audit & Supervisory Board Member
3

Michiko Chiba

Audit & Supervisory Board Member*
4

Keita Nagura

Audit & Supervisory Board Member** Outside3

2

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Kazuo Tsukahara

1

Kuniko Shoji

Michiko Chiba

June 2004 Executive Officer, Terumo Corporation
April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation June 2010 Director and Senior Executive Officer, Terumo Corporation
June 2017 Advisor, Terumo Corporation
June 2014 Advisor, IHI Corporation

October 1989 Joined Showa Ota & Co. (currently Ernst & Young ShinNihon LLC)
July
2010 Senior Partner, Ernst & Young ShinNihon LLC
September 2016 Founded Chiba Certified Public Accountant Office

Yoshiaki Tamura

Keita Nagura

January 2007 Executive Officer, Asahi Glass Co., Ltd.
March 2013 Representative Director and Executive Vice President, Asahi Glass Co., Ltd.
March 2017 Executive Fellow, Asahi Glass Co., Ltd.

April

1998 Registered as an attorney (Osaka Bar Association); Joined Yodoyabashi Godo Law Office(currently Yodoyabashi & Yamagami Legal Professional Corporation)
February 2002 Changed registration as an attorney to the Dai-Ichi Tokyo Bar Association

DIC Report 202148

| ([HFXWLYH2IÀFHUVKaoru Ino

Toshifumi Tamaki

Naoyoshi Furuta

Masaya Nakafuji

Kazuo Hatakenaka

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Assistant to President and CEO

General Manager, Production
Management Unit

Head of General Affairs and Legal Unit
In Charge of Diversity,
Osaka Branch and Nagoya Branch

Chairman, DIC (China) Co., Ltd.
Chairman, DIC (Shanghai) Co., Ltd.

Kiyotaka Kawashima

Masamichi Sota

Kiyofumi Takano

Yoshinari Akiyama

Taihei MukoseManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Executive Officer

General Manager, Technical Management
Unit

President, Packaging & Graphic
Business Group
General Manager, Printing Material
Products Div.

General Manager, New Business
Development Headquarters

President, Color & Display Business Group
General Manager, Color Material
Products Div.

Head of Purchasing and Logistics Unit
Head of ESG Unit

Paul Koek

Myron Petruch

Takeshi Asai

Koji Asada

Masahiro Kikuchi

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Managing Director,
DIC Asia Pacific Pte Ltd

President and CEO,Sun Chemical Corporation

Head of Corporate Strategy Unit
In Charge of Kawamura Memorial DIC
Museum of Art
Vice Chairman of the Board,
Sun Chemical Corporation

Head of SCM Unit

Deputy Managing Director(AP Region Non Graphic Business andSouth Asia), DIC Asia Pacific Pte Ltd

Yuji Morinaga

Shuji Furuta

Toshiro Ariga

Takashi Ikeda

Yuji Kikuchi

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

General Manager, Packaging Material
Products Div.

Head of Finance and Accounting Unit
CFO

General Manager, R&D Management Unit
General Manager, Central ResearchLaboratories

President, Functional Products
Business Group
General Manager, Composite Material
Products Div.

General Manager, Performance
Material Products Div.

Tomoyuki Tanaka
Executive Officer
General Manager, Corporate Planning
Dept.

DIC Report 2021

49

Materiality Analysis
Identifying Priority Materiality Themes*XLGHGE\LWV',&PHGLXPWHUPPDQDJHPHQWSODQODXQFKHGLQ¿VFDO\HDUWKH',&*URXSRQFHDJDLQDEVWUDFWHGDQGDQDO\]HGPDWHULDOLVVXHVWKDWLVLVVXHVZLWKWKHSRWHQWLDOWRQHJDWLYHO\DIIHFWLWVSHUIRUPDQFHIURPZKLFKLWLGHQWL¿HGIRXUWKHPHVRISULPDU\LPSRUWDQFHWRWKH*URXSWKDWLWGHVLJQDWHGSULRULW\PDWHULDOLW\WKHPHVThe DIC Group’s Materiality Matrix
Strengthening of partnerships
Reduction of environmental impact(emissions into air and water)●
Digital transformation●
Food safety●
Response to a circular economy●
Communication with customers and markets●
Response to pandemics●●

Importance to stakeholders

Very
high

Management of water resources
Contribution to local communities● Reputation-related risks● Response to tax-related risks● Management of work outsourced
to subcontractors

Promotion of diversity
Realization of colorful andcomfortable lifestyles● Business continuity(Business continuity planning(BCP))●●●●

Efforts to enhance employee
satisfaction/fulfillment●
Promotion of open innovation● Intellectual property strategies
●

High
High

Transformation to a sustainablebusiness structure● Product stewardship● Response to climate change● Efforts to strengthen productdevelopment capabilities andcreate new businesses●

Transformation to a sustainablebusiness structure● Product stewardship● Response to climate change● Efforts to strengthen productdevelopment capabilities andcreate new businesses●

Response to changes in environmental
laws and regulations● Promotion of sustainable procurement● Ability to maximize capital efficiency● Governance at subsidiaries● Information security●

Human resource development
and securing employment
Addition of depth to and expansionof basic technologies● Response to currency fluctuations●●

Issues of fundamental importance to DIC Group businesses
・Security and disaster prevention, occupational safety and health・Respect for human rights
・Compliance
・Product/manufacturer’s liability
・Quality management
・Political and geopolitical change
Information on key concrete initiatives related to issues of particularsignificance is disclosed in this report.

Very highImportance to DIC Group businesses

Process for Abstracting Material Issues
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Priority Materiality Themes
1

Transformation to a sustainable business structure

Reason for
identification

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50

2 Product stewardship

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3

Response to climate change

Reason for
identification

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Change fromprevious ﬁscal year

34

Change fromﬁscal year 2013

Global

-4.3％

23.6％

Japan

-12.0％-20.5%

Overseas＋ 0.4％-25.2％

Efforts to strengthen product development capabilities and create new businesses

Reason for
identification

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51

A Message from the Head of the ESG Unit
We are reinforcing sustainability initiatives
that help increase social value with the aimof ensuring sustainable, long-term growth.

Taihei Mukose([HFXWLYH2IÀFHU+HDGRI(6*8QLW',&&RUSRUDWLRQ

A variety of social imperatives have become increasingly evident in recent years owing to, among others, environmental issues, widening economic
inequalities arising from mounting resource constraints and human rights issues across supply chains. One of the most immediately obvious is climatechange, an increasingly urgent challenge. Recognizing these as issues that need to be addressed by the international community through mechanisms suchas the SDGs, set forth by the UN and adopted by its member states, the DIC Group works to contribute through its business activities to the realization of a
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sharply increasing expectations pertaining to related issues.

Sustainable Management at DIC
Important sustainability-related management matters are deliberated and determined by the Sustainability Committee, a key body that answers directly to the
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global scale of rising sustainability-related expectations, it is vital that participation in the Sustainability Committee is not limited to the DIC Group in Japan.
Accordingly, the committee includes individuals from the Group’s overseas bases. Members change, of course, so at any one time overseas members may
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imperatives, and social activities and contributions to society, formulating an annual activity plan for the Group and using the PDCA cycle to evaluate efforts. In
particular, in the area of raw materials procurement we have inaugurated a system that places importance on creating a framework for the procurement of raw
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question of how our products, and by extension our businesses, can help address social imperatives related to concerns such as climate change, food
VDIHW\DQGPDULQHSODVWLFV²SRVLWLRQVSURGXFWVWKDWERWKOHYHUDJHNH\',&FDSDELOLWLHVDQGEHQH¿WVRFLHW\DV³VXVWDLQDEOH´:HDUHFRQ¿GHQWWKDWWKH',&
Sustainability Index will continue to serve as a useful tool for employees in all areas, from product development to raw materials procurement, production andsales, to expand our selection of products that offer sustainable solutions.
Going forward, we will continue working to enhance both social value and economic value of our businesses, as well as to capitalize on the DIC
Sustainability Index to advance the prudent yet bold management of our business portfolio, strengthening the sustainability of our businesses, and byextension our ability to contribute to society, and helping to ensure continuous growth.

DIC Report 2021

52

A Message from the Head of the ESG Unit

Achieving Carbon Neutrality$WRWDORIRIWKH',&*URXS¶VVLWHVDQGRI¿FHVLQ-DSDQKDYHHDUQHGFHUWL¿FDWLRQXQGHU-DSDQ¶V'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\V\VWHP
:HKDYHORQJSURPRWHGV\VWHPDWLFHIIRUWVWRUHGXFHRXUHQHUJ\FRQVXPSWLRQDQGZHUHHDUO\WRDQQRXQFHDWDUJHWIRUORZHULQJRXUHPLVVLRQVRI&2,
FDOOLQJIRUDUHGXFWLRQRIIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU+DYLQJUHFRJQL]HGUHVSRQGLQJWRFOLPDWHFKDQJHDVDQLQFUHDVLQJO\FULWLFDOFKDOOHQJHIRUFRPSDQLHVLQ0D\ZHGHFODUHGRXUVXSSRUWIRUWKH7&)'DQGEHJDQWRGLVFORVHUHODWHGLQIRUPDWLRQLQOLQHZLWK7&)'recommendations. Focusing on risks and opportunities associated with climate change, the Sustainability Committee is proceeding with deliberations
on how to best tie these considerations into Group business strategies.
,Q-DQXDU\D&OLPDWH&KDQJH5HVSRQVH6XEFRPPLWWHHZDVFUHDWHGZLWKLQWKH6XVWDLQDELOLW\6WUDWHJ\:RUNLQJ*URXSWRHQDEOHSURGXFWLRQ
procurement, logistics, R&D, management planning and other departments to conduct a cross-functional review of related initiatives. As a result,
WKHGHFLVLRQZDVPDGHWRUHYLVHRXUFOLPDWHFKDQJH±UHODWHGWDUJHWV:HQRZDLPWRDFKLHYHFDUERQQHXWUDOLW\E\DVZHOODVWRUHGXFH&2
HPLVVLRQVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDUDPLGZD\SRLQWLQRXUGULYHWRHOLPLQDWHHPLVVLRQVHQWLUHO\$OVRLQ-DQXDU\ZHLQWURGXFHGLQWHUQDOFDUERQSULFLQJDVD¿UVWSUDFWLFDOQHZPHDVXUHWRZDUGDWWDLQLQJWKHVHWDUJHWV,QSUHSDUDWLRQIRUWKHH[SHFWHGLQWURGXFWLRQ
of carbon taxes, we have since put a mechanism in place to encourage employee awareness of the costs associated with CO  emissions andto increase incentives for reductions realized. Looking ahead, we will work to formulate and promote the horizontal deployment of measures toaccelerate environmental investments across the entire DIC Group, working as one to reduce our impact on the global environment.

2FWREHUPHHWLQJRIWKH6XVWDLQDELOLW\&RPPLWWHH 2ZLQJWR&29,'6XVWDLQDELOLW\&RPPLWWHH
PHHWLQJVLQZHUHFRQGXFWHGUHPRWHO\Responding to a Circular Economy: The Next Phase of Sustainability
7KHLVVXHRIPDULQHSODVWLFVLVRQHRISDUWLFXODUFRQFHUQWRXVDVDQRUJDQL]DWLRQWKDWPDQXIDFWXUHVDZLGHYDULHW\RISRO\PHUSURGXFWV,QDQ
initiative aimed at responding effectively to the shift to a circular economy, as well as to market changes propelled by evolving demand patterns,
we are currently promoting the creation of a system for the chemical recycling of polystyrene. More broadly, we will also increase efforts to search
IRUELRGHULYHGDQGUHF\FODEOHPDWHULDOVZKLFKZHDUHDSSURDFKLQJDVDPHGLXPWRORQJWHUPHQGHDYRU:KLOHZHDFNQRZOHGJHWKDWGHYHORSLQJthe materials and technologies necessary to ensure the practicality of recycling will require us to address daunting challenges, we are committed tocontributing to this next phase of sustainability for the world and for ourselves.

DIC Report 2021

53

Sustainability Index
Sustainable Products Are Those that Deliver Outstanding Social Value
7KH',&*URXSGH¿QHV³VXVWDLQDEOHSURGXFWV´DVSURGXFWVWKDWGHOLYHURXWVWDQGLQJVRFLDOYDOXHDQGZKLFKWKH*URXSLVXQLTXHO\SRVLWLRQHGWRRIIHUWRKHOSHQVXUHDEHWWHUVRFLHW\LQWKHIXWXUH7KHVHDUHSURGXFWVHQGRZHGZLWKGLVWLQFWLYHO\',&IHDWXUHVDQGYDOXH
7KH*URXSKDVWKXVGHVLJQDWHGSURGXFWVWKDWERWKGHPRQVWUDWHLWVXQLTXHFRPSHWLWLYHVWUHQJWKVDQGKDYHWKHSRWHQWLDOWRLPSURYH
VRFLHW\JRLQJIRUZDUGDV³VXVWDLQDEOH´7KHVHSURGXFWVZLOOKHOSWKH*URXSFRQWULEXWHWRWKHUHVROXWLRQRIVRFLDOLPSHUDWLYHVDULVLQJIURP(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHVLQFOXGLQJFOLPDWHFKDQJHIRRGVDIHW\DQGPDULQHSODVWLFV*LYHQWKHLQFUHDVLQJLQWHQVLW\RIWKHFKDQJHVVZHHSLQJJOREDOVRFLHW\WKH',&*URXSZLOODOVRIRFXVRQSRVLWLRQLQJLWVHOIWRDGGUHVVWKHVRFLDOLPSHUDWLYHVWKDWZLOODULVHLQWKH\HDUVDKHDG5HFRJQL]LQJWKDWLQVRPHFDVHVWKHXQLTXHVNLOOVQHFHVVDU\WRPHHWWKHVH
FKDOOHQJHVPD\VWLOOEHLQWKHLULQIDQF\WKH*URXSZLOOWDNHEROGVWHSVWRUHLQIRUFHLWVXQPDWFKHGFDSDELOLWLHVWKHUHE\HQVXULQJLWFDQ
FRQWLQXHSURYLGLQJYDOXH
① Identify sustainable businesses and products② Map sustainable businesses and products on the sustainability index③ Define target areas
DIC Sustainability Index

DIC’s Future Vision

Assess product/business using graph below
indicates ideal direction
Vertical Axis:
Environmental
impact reduction

Social Value• Environmental
impact reduction• Social contribution①

Product
B

ProductC

Two Strategies for Business
Portfolio Transformation③ Target Areas

Product
A

Economic Value• Growth• Profitability• Capital efficiency

Horizontal Axis: Social contribution(Resolving social issues/improving social wealth)Businesses and Products Designated Sustainable by the DIC Group
Social Imperatives

Unique Competitive Strengths

Urgent/important② A, B
Technologies

Climate change
Circular economy
Improvement of the environment
Improvement of quality of life①
A, B

Production
Sales and marketing
Global network
Solid relationships with customers

Digitization
Life sciences

C, D

Assessing the Sustainability of All DIC Group Products*XLGHGE\WKH',&6XVWDLQDELOLW\,QGH[ZKLFKZDVHVWDEOLVKHGZLWKWKHJRDORIPHDVXULQJWKHVRFLDOYDOXHLWSURYLGHVWKH',&*URXSLVDGYDQFLQJWKHWUDQVIRUPDWLRQRILWVEXVLQHVVSRUWIROLRE\IRFXVLQJRQEXVLQHVVHVWKDWEDODQFHWKLVDQGHFRQRPLFYDOXH$ZDUHWKDWH[SDQGLQJLQWRWKHDUHDVLWLVWDUJHWLQJZLOOUHTXLUHWKHHIIHFWLYHDOORFDWLRQRIOLPLWHGUHVRXUFHVWKH*URXSZLOOXVHWKHLQGH[WRHYDOXDWH
DOO',&*URXSSURGXFWVWRGHWHUPLQHZKHWKHUWKH\DUHVXVWDLQDEOHRUQRWHQDEOLQJLWWRPDNHDSSURSULDWHGHFLVLRQVUHJDUGLQJWKHXVH
RIUHVRXUFHVIRUSRUWIROLRWUDQVIRUPDWLRQDIC Report 2021

54

Sustainability Index

Reducing Environmental Impact: The Vertical Axis

Low

Environmental impact$VVHVVPHQWXVLQJWKH',&6XVWDLQDELOLW\,QGH[ZLOOUHVXOWLQSURGXFWVEHLQJFODVVL¿HG
DV³VXVWDLQDEOH´LQGLFDWHGLQJUHHQ³FRPSHWHQW´LQGLFDWHGLQ\HOORZDQG³FKDOOHQJHG´LQGLFDWHGLQSLQN$VQRWHGDERYHWKH',&*URXSXVHVWKHGHVLJQDWLRQ³VXVWDLQDEOH´
IRUSURGXFWVWKDWERWKGHPRQVWUDWHLWVXQLTXHFRPSHWLWLYHVWUHQJWKVDQGKDYHWKH
SRWHQWLDOWRLPSURYHVRFLHW\JRLQJIRUZDUG)URPWKHSHUVSHFWLYHRIVXVWDLQDEOH
YDOXHWKH*URXSKDVSRVLWLRQHGWKHVHDVWKHSURGXFWVWKDWLWPXVWVWUHQJWKHQLQWKH
\HDUVDKHDG
³&RPSHWHQW´SURGXFWVDUHHVVHQWLDOWRVRFLHW\WRGD\7KHVHDUHSURGXFWVWKDWERDVWLPSRUWDQWSHUIRUPDQFHIHDWXUHVWKDWIRUH[DPSOHHQKDQFHFRQYHQLHQFHRUVXSSRUWPRGHUQOLIHVW\OHVEXWWKDWIDOOVRPHZKDWVKRUWZKHQHYDOXDWHGLQWHUPVRISHUVSHFWLYHRIIXWXUHVXVWDLQDELOLW\3URGXFWVDVVHVVHGDV³FKDOOHQJHG´DUHWKRVHWKDWDUHQHLWKHU³VXVWDLQDEOH´QRU³FRPSHWHQW´+RZWRRUZKHWKHUWRSURFHHGIRUZDUGZLWKWKHVHSDUWLFXODUSURGXFWVZLOOUHTXLUHVHULRXVFRQVLGHUDWLRQ

High
D

C

Commoditized businesses/
products
Essential tosocietyーBA

Sustainable businesses/
products
Future inquestionーSocial contribution

Low

High

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PHDVXUHVWRLPSURYHWKHSHUIRUPDQFHRILWVSURGXFWLRQIDFLOLWLHVDQGRWKHUVLWHVLQFOXGLQJE\PRGLI\LQJSURGXFWLRQSURFHVVHVUHGXFLQJ&22HPLVVLRQVDWWULEXWDEOHWRHQHUJ\XVHDQGHQVXULQJWKHSURSHUPDQDJHPHQWRIZDWHUUHVRXUFHV7KH',&*URXSDFNQRZOHGJHVWKHH[SHFWDWLRQVDQGQHHGVRILWVFXVWRPHUVDQGRIVRFLHW\DWODUJHLQWHUPVRIORZHULQJLWV
HQYLURQPHQWDOLPSDFWDVUHSUHVHQWHGE\&22HPLVVLRQVDQGRWKHUNH\EHQFKPDUNVDQGSOHGJHVWRFRQWLQXHDGYDQFLQJIRUZDUGORRNLQJORQJWHUPHIIRUWVWRUHGXFHLWVHQYLURQPHQWDOLPSDFW

Contributing to Sustainability by Providing Safety and Peace of Mind, Color and Comfort
Coatings for bridges

Sewer repairs (pipe restoration)

Maintenance of key infrastructure

Maintenance of key infrastructure

PPS compounds forhousing applications

Heat-blocking coatings

The DIC Group:
Contributing to Sustainable
Cities and Industries
Rust-resistant materials to extend
the useful lives of water pipes

SDGs Goals 9 and 11

Degassing modules forwater treatment

Use of heat-blocking road surfacing materials tocreate comfortable urban spaces

Aluminum for
autoclaved aerated concrete
Extreme pressure
and lubricant additives

Use of thermally insulating materials that
improve the thermal insulation of buildings

Prevention of oxidation to extend theuseful lives of industrial equipment

Prevention of wear and friction toextend the useful lives of industrial equipment

DIC Report 2021

55

Support for the TCFDIn May 2019, the DIC Group declared its support for the Task Force on Climate-related Financial Disclosures (TCFD). Recognizing climate change as a critical factor
affecting its businesses, the Group is enhancing its efforts to respond appropriately to risks and capitalize on opportunities associated with climate change with theobjective of earning the trust of stakeholders through improved resilience and the proactive dissemination of information.

| A New Target for the Reduction of CO2 Emissions,Q-XQHWKH',&*URXSUHYLVHGLWVWDUJHWIRUWKHUHGXFWLRQRI&2HPLVVLRQV7KH*URXSQRZDLPVWRDFKLHYHFDUERQQHXWUDOLW\²QHW]HUR&2HPLVVLRQV²E\¿VFDO\HDUDQGZLOOVHHNWRUHGXFH&2HPLVVLRQVIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU 7KHUDQJHRIWKLVWDUJHWLV6FRSHDQGHPLVVLRQVThe DIC Group will also continue working to expand its portfolio of products and services that contribute to decarbonization with the goal of playing an active role in
ORZHULQJ&2 emissions in markets and across society.

| Disclosures in Line with TCFD Recommendations
With the aim of helping institutional investors grasp climate-related risks and opportunities and make investment decisions, the TCFD has structured its recommendations
around four thematic areas that represent core elements of how organizations operate—governance, strategy, risk management, and metrics and targets.
Having acknowledged the disclosure of information on efforts to address climate change as an imperative for companies today, the DIC Group has resolved to do
so in line with TCFD recommendations. Accordingly, the Group is enhancing its efforts to respond appropriately to risks and capitalize on opportunities associatedwith climate change with the objective of earning the trust of stakeholders through improved resilience and the proactive dissemination of information.

TCFD Recommendations for Financial Disclosures
Governance

Strategy

Risk management

Metrics and targets

Governance around climate-related risks
and opportunities

Actual and potential impacts of climaterelated risks and opportunities on
EXVLQHVVHVVWUDWHJ\DQG¿QDQFLDOSODQQLQJ

Processes used to identify, assess
and manage climate-related risks

Metrics and targets used to assess
and manage relevant climate-relatedrisks and opportunities

1

Governance

The DIC Group recognizes climate change as a key management challenge. Important matters, including the setting of medium- and long-term targets for the
UHGXFWLRQRI&2HPLVVLRQVDUHGHOLEHUDWHGDQGGHWHUPLQHGE\WKH6XVWDLQDELOLW\&RPPLWWHHZKLFKPHHWVIRXUWLPHVDQQXDOO\DQGDQVZHUVGLUHFWO\WRWKHSUHVLGHQW
DQG&(2DQGWKHGHWDLOVDUHUHSRUWHGWRWKH%RDUGRI'LUHFWRUVLQOLQHZLWKWKHUXOHVJRYHUQLQJWKH%RDUGRI'LUHFWRUV ,QSULQFLSOHWKH6XVWDLQDELOLW\&RPPLWWHHUHSRUWVWRWKH%RDUGRI'LUHFWRUVRQDOORILWVGHOLEHUDWLRQV $V\VWHPLVWKXVLQSODFHWKDWHQVXUHVDSSURSULDWHVXSHUYLVLRQRIWKH6XVWDLQDELOLW\&RPPLWWHHLVSURYLGHGE\WKH%RDUGRI'LUHFWRUVPrincipal Issues Deliberated by the Sustainability Committee in Fiscal Year 2020
To appropriately assess and manage climate change–
Fiscal year
Issues deliberated
related risks and opportunities, thereby ensuring the effective
・Medium-term sustainability policies*1
PDQDJHPHQWRILWVRSHUDWLRQVWKH6XVWDLQDELOLW\&RPPLWWHH
・5HSRUWRQDQGHYDOXDWLRQRIVXVWDLQDELOLW\LQLWLDWLYHVIRU¿VFDO\HDU
FRQVLVWVRIWKHSUHVLGHQWDQG&(2WKHJHQHUDOPDQDJHUVRIWKH
・Annual sustainability activity plans and key performance indicators (KPIs)
Production Management Unit and Technical Management Unit,
2020
IRU¿VFDO\HDU
・Report on the progress of efforts to determine priority materiality themes*
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・Introduction of an internal carbon pricing system/HJDO8QLW)LQDQFHDQG$FFRXQWLQJ8QLWDQG(6*8QLWDVZHOODV・Matters pertaining to the Climate Change Working Groupthe presidents of the business groups and the general managers
$IWHUGHOLEHUDWLRQE\WKH6XVWDLQDELOLW\&RPPLWWHHPHGLXPWHUPVXVWDLQDELOLW\SROLFLHVDUHGLVFXVVHGDQGGHWHUPLQHGE\WKH%RDUGRI'LUHFWRUV
of the product divisions.
³5HVSRQVHWRFOLPDWHFKDQJH´ZDVQHZO\LGHQWL¿HGDVDSULRULW\PDWHULDOLW\WKHPHLQ¿VFDO\HDU'HOLEHUDWLRQVFRQWLQXHGLQ¿VFDO\HDU
2

Strategy',&LVSURPRWLQJVXVWDLQDEOHEXVLQHVVVWUDWHJLHVUHFRJQL]LQJWKHLPSRUWDQFHRIULVNVDQGRSSRUWXQLWLHVDVVRFLDWHGZLWKFOLPDWHFKDQJH%HFDXVHWKH
impacts of climate change are likely to surface over the medium to long term, the Company is working to enhance its understanding of the principal climateUHODWHGULVNVDQGRSSRUWXQLWLHV WUDQVLWLRQDVZHOODVSK\VLFDO WKDWDUHOLNHO\WRKDYHD¿QDQFLDOLPSDFWRYHUWKHPHGLXPWRORQJWHUP
%DVHGRQVFHQDULRDQDO\VLVFRQGXFWHGLQ¿VFDO\HDUWKH&RPSDQ\ZLOOZRUNWRUDLVHLWVDZDUHQHVVRIIRUHVHHDEOHRSSRUWXQLWLHVDQGULVNVIURPDPHGLXPWRORQJWHUPSHUVSHFWLYHDQGDWWKHVDPHWLPHWRIRUPXODWHDQGH[HFXWHHIIHFWLYHVWUDWHJLHVRQDQDSSURSULDWHWLPHOLQH,Q¿VFDO\HDU',&
DOVRHVWDEOLVKHGWKH&OLPDWH&KDQJH:RUNLQJ*URXSZKLFKLVWDVNHGZLWKKHOSLQJIDFLOLWDWHWKHDFKLHYHPHQWRIQHW]HUR&2HPLVVLRQVE\¿VFDO\HDU
7KHDFWLYLWLHVRIWKHZRUNLQJJURXSDUHUHSRUWHGWRDQGGHEDWHGE\WKH6XVWDLQDELOLW\&RPPLWWHH
Type

Description

Emerging regulations (Transition)

7KHUHLVDULVNWKDWHPHUJLQJUHJXODWLRQV HJWKHLQWURGXFWLRQRIFDUERQSULFLQJ ZLOOLQFUHDVHGLUHFWFRVWVDQGLPSDFWRQWKHRSHUDWLQJHQYLURQPHQWSUR¿WDELOLW\ HJ
facility costs and raw materials prices).

Technology (Transition)

With technological innovations, there is a risk of products and services becoming obsolete and demand declining.

Market (Transition)

7KHUHLVDULVNWKDWDQLQVXI¿FLHQWJUDVSRIHYROYLQJFXVWRPHUFRQVXPHUSUHIHUHQFHVZLOOPHDQWKHORVVRIPDUNHWRSSRUWXQLWLHV

Reputation (Transition),I',&¶VDWWLWXGHWRZDUGDQGDELOLW\WRUHVSRQGWRFOLPDWHFKDQJHDUHVHHQE\H[WHUQDOREVHUYHUVDVLQVXI¿FLHQWIRUDPDQXIDFWXUHURI¿QHFKHPLFDOVWKHUHLVDULVNWKDWLWV
reputation will suffer.

Acute (Physical)

6KRXOGH[WUHPHZHDWKHUHYHQWVEHFRPHPRUHIUHTXHQWWKHUHLVDULVNWKDWWKHRSHUDWLRQVRISURGXFWLRQVLWHVZLOOEHDIIHFWHG

Chronic (Physical)

If temperatures remain persistently high, there are risks of increased production site maintenance and operating costs and of damage to health.

Upstream (Physical),QDGGLWLRQWRDULVNRIXQFHUWDLQW\UHJDUGLQJWKHVXSSO\RIUDZPDWHULDOVPRQRSROL]HGE\FHUWDLQVXSSOLHUVWKHUHDUH%&3ULVNVDIC Report 2021

56

Support for the TCFD

Principal Climate-Related Opportunities
Type

Description

Emerging regulations (Transition)

With emerging regulations, there is an opportunity to establish new business models that demonstrate the superiority of DIC’s businesses.

Technology (Transition)

Technological innovation provides opportunities to create new low-carbon/decarbonized businesses that respond to climate change and to increase product cost competitivenessthrough the use of revolutionary technologies to improve processes.

Market (Transition/physical)

Accurately grasping evolving customer/consumer preferences—e.g., shift to low-carbon business models, chance that certain existing businesses will be avoided—provides
the opportunity to develop new products and services that anticipate lifestyle changes.

Upstream/downstream(Transition/physical)

Addressing climate change (adaptation and mitigation) over products’ entire life cycles through organic collaboration with customers and suppliers provides the opportunity
to create new businesses and systems.

Scenario Analysis,Q¿VFDO\HDUWKH',&*URXSFRQGXFWHGVFHQDULRDQDO\VLVXVLQJERWKWKH&VFHQDULRDQGWKH&VFHQDULRIRUFRUHEXVLQHVVHVDVVKRZQLQWKHIROORZLQJWDEOH
Scenario information

2ºC scenario

4ºC scenario

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5HSUHVHQWDWLYH&RQFHQWUDWLRQ3DWKZD\ 5&3 Time frame

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Carbon price assumptionWRQQH—

Results of Scenario Analysis

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Implications for society andthe business environment

Risk

Risk and opportunity assessment

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6WUHQJWKHQLQJRISROLFLHVand regulations

Introduction of carbon pricing (direct
implications for manufacturing and the
procurement of raw materials)

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3RVVLEOHLPSDFWRQSURFXUHPHQWFRVWVELOOLRQ $QQXDO&2 emissions
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Global movement to minimize use of oneway plastics and efforts by brand owners
seeking to reduce packaging

Demand for some plastics (one-way plastics) will decrease, but increased
demand for plastic alternatives will mean only a negligible impact onmaterials suitable for applications other than plastics.

Increase in production and sales ofrecycled plastics

While it is unclear what will happen vis-à-vis demand changes, a failure
to launch commercial distribution will mean the loss of future market
opportunities.

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Changes in demand attributableto circular economy

DIC Group countermeasures• Take steps to maintain cost competitiveness, assuming global
introduction.
• Promote enhanced functionality to minimize the impact ofcarbon pricing in key businesses, including products forautomotive, electronics and display applications and for
healthcare, as well as pigments for cosmetics.
• 8VHWKH',&6XVWDLQDELOLW\,QGH[WRSURPRWHSURGXFWVWKDWKHOSUHGXFH&2 emissions (i.e., are sustainable).
• &DSLWDOL]HRQULVLQJGHPDQGIRU336FRPSRXQGVXQGHUSLQQHG
by expanded automobile production and the shift to EVs.
• Promote core products as appropriate for use with both plastics
and plastic-alternative materials; differentiate with barrier and otherfunctions.
• Foster businesses that respond to demand for materials thatare biodegradable and/or use bioderived raw materials.

• 6HHNWLHXSVZLWKFXVWRPHUVDQGVWHSXSH[SORUDWLRQRIFKHPLFDOV
and materials recycling.

• Focus on adding value, including by advancing innovations inmaterials and formulations that enhance recyclability.

Introduction of energy-saving and renewable
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5HGXFWLRQRI&2 emissions
attributable to manufacturing

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Risk that operations at
production facilities will beinterrupted due to an increase
in climate-related disasters

2QJRLQJHIIRUWVWRUHGXFH&2 emissions attributable to production will
also be necessary.

• Continue investing in energy-saving and renewable energy
HTXLSPHQWZLWKWKHDLPRIDFKLHYLQJWKHWDUJHWIRUUHGXFLQJ
6FRSHDQGHPLVVLRQVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
 7KHUHGXFWLRQRI&2 emissions is expected to reduce costs
E\DQDYHUDJHRIELOOLRQDQQXDOO\EHWZHHQ¿VFDO\HDUV DQG  HVWLPDWHG DQQXDO HPLVVLRQV UHGXFWLRQWRQQHV (IIRUWV WR UHGXFH &2  emissions enough to keep the increase in
JOREDODYHUDJHWHPSHUDWXUHRYHUWKHFXUUHQWFHQWXU\WR&IURPWKH
preindustrial level are already underway. There is an increased risk that
this target will be imposed across entire supply chains.

• Consider the setting of a new science-based target conducive to
NHHSLQJWKHLQFUHDVHLQJOREDODYHUDJHWHPSHUDWXUHWR&• Apply internal carbon pricing system to increase investment in
HQHUJ\VDYLQJVDQGLPSURYH&2 emissions reduction performance.

 6WDEOHSURFXUHPHQWULVNVDIIHFWFHUWDLQEXVLQHVVHVLHWKRVHGHSHQGHQW
on raw materials procured overseas or monopolized by certain suppliers.
• For most products, coordination among departments will facilitate the useof alternative raw materials.

• For key raw materials, promote two-company shared procurement in
PXOWLSOHUHJLRQVDQGHQKDQFH%&3UHVSRQVHV• For key products, ensure ample inventories of raw materials
and products.

Depletion of groundwater resources• Production sites are scattered across the globe, so impact onoverall operations is limited. Certain products for which production isconcentrated at certain facilities may be affected.
 &RXQWHUPHDVXUHVDUHUHTXLUHGLQDUHDVZKHUHWKHUHDUHFRQFHUQVWKDW
water-related risks will increase.

• Locate printing inks and other production facilities around the world
to ensure complementary capabilities and cooperate with othercompanies to minimize the impact in the event port facilities are
GDPDJHGGXHWRVWRUPVXUJHVRUÀRRGLQJ
 6WUHQJWKHQPHDVXUHVIRUVLWHVORFDWHGLQFRDVWDODUHDV5HLQIRUFH
WKHHIIHFWLYHQHVVRI%&3VE\SURYLGLQJUHODWHGWUDLQLQJ• Implement measures to address water-related risks.

Increases in non-life insurance fees

Insurance premiums may increase.

• %ROVWHU SURILWDELOLW\ E\ UHLQIRUFLQJ DQG H[SDQGLQJ SRUWIROLR RI
sustainable products.

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]HUR&2HPLVVLRQVE\ILVFDO\HDU

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Risk that supply chains will beinterrupted due to an increase
in climate-related disasters$QQXDOLQYHVWPHQWLQHQHUJ\VDYLQJDQGUHQHZDEOHHQHUJ\HTXLSPHQWLV
HVWLPDWHGDWELOOLRQ GLUHFWLPSDFWRQPDQXIDFWXULQJFRVWV 

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disasters
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raw materials

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57

Support for the TCFD

Results of Scenario Analysis

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Response to changes inlifestyles attributable torising temperatures

2SSRUWXQLW\

Risk

Implications for society andthe business environment

Risk and opportunity assessment

DIC Group countermeasures

Changes in lifestyles and consumption
patterns attributable to rising temperaturesand resulting changes in demand• Demand for certain products may be affected by changing consumption
patterns attributable to rising temperatures, but because demand sources
are diverse the risk to overall business is low.
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lifestyles attributable to rising temperatures is high.

• Rising temperatures present an opportunity in the form of increased
demand for thermal barrier–related products.
• Given that dietary preferences are also expected to change,
capitalize on expanding demand from beverage manufacturers andfor materials used in frozen foods.
• Take advantage of higher demand in the health foods and life
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1RWH)LJXUHVDUHEDVHGRQUHVXOWVDWWKHWLPHRIVFHQDULRDQDO\VLV$V&2HPLVVLRQVLQ¿VFDO\HDUDPRXQWHGWRWRQQHVWKHLPSDFWRIFDUERQSULFLQJXQGHUWKLVFRQGLWLRQZRXOGEHDVPXFKDVPLOOLRQ

Initiatives for Fiscal Years 2020 and 2021 (Following Scenario Analysis)• Introduce internal carbon pricing.
4XDQWLI\FOLPDWHFKDQJHULVNDQGSURYLGHHFRQRPLFLQFHQWLYHVIRUUHGXFLQJ&2 emissions to accelerate the promotion of investments and innovations to further advance emissions reductions.
,Q¿VFDO\HDULQWURGXFHLQWHUQDOFDUERQSULFLQJIRUQHZLQYHVWPHQWSURMHFWVDVDQLQWHUQDOIUDPHZRUNIRUIDFWRULQJWKHFRVWRIUHODWHG&2HPLVVLRQVLQWRHVWLPDWHVRILQYHVWPHQWEHQH¿WV
• 3URPRWHIXOOVFDOHFROODERUDWLRQZLWK)3&RUSRUDWLRQ )3&2 LQWKHSUDFWLFDOLPSOHPHQWDWLRQRIDFORVHGORRSUHF\FOLQJV\VWHPIRUSRO\VW\UHQHXVHGLQSODVWLFFRQWDLQHUVIRUIRRGSURGXFWVDPRQJRWKHUV(VWDEOLVKWKH&OLPDWH&KDQJH:RUNLQJ*URXSDQGVHWQHZWDUJHWVIRUDFKLHYLQJFDUERQQHXWUDOLW\E\¿VFDO\HDUDQGUHGXFLQJ&2HPLVVLRQVE\IURPWKH¿VFDO\HDUOHYHO E\¿VFDO\HDU
3

Risk Management

Processes used to identify and assess climate-related risks
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adaptation and mitigation.
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becoming impossible or being delayed due to the suspension of operations at production facilities and the instability of raw materials supplies, there is a
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recognized as being in one of two categories, namely, externally caused risks that are beyond the Group’s control or business risks that should be handled
by the relevant divisions/departments.

Processes used to manage climate-related risks
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4Metrics and Targets

The DIC Group’s DIC111 medium-term management plan includes a commitment to reducing emissions of greenhouse gases from its sites. The GroupGLVFORVHVWKHUHVXOWVRIVXFKLQLWLDWLYHVDQGREWDLQVWKLUGSDUW\YHUL¿FDWLRQRILWV&2 emissions data.

Environmental Targets Set Forth in DIC111

Environment■ Reduce CO2 emissions attributable to production.
■ Supply products and solutions that contribute to sustainability.

Target: Reduce CO2 emissions 30% from the fiscal year 2013 level by fiscal year 2030.
● Install solar power systems and implement energy-saving measures.
● Introduce a proprietary sustainability index based on environmental impact reduction
and social contribution.
● Utilize recycled materials and adopt biomass-derived raw materials.

DIC Report 2021

58

Overview of Sustainability
In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an accurate
JUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHV

Sustainability Program
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges, including rising awareness of the need to achieve sustainability in a manner that takes into account the environment,
HFRV\VWHPVDQGVRFLRHFRQRPLFLVVXHV7KH',&*URXSODXQFKHGLWV&65SURJUDPLQ¿VFDO\HDU+DYLQJIXUWKHUFODUL¿HGWKHRYHUDOOGLUHFWLRQRIUHODWHGLQLWLDWLYHVDV³VXVWDLQDEOHJURZWK´HIIHFWLYHIURP¿VFDO\HDUWKH*URXSFKDQJHGWKHGHVLJQDWLRQXVHGDFURVVLWVSURJUDPIURP³&65´WR³VXVWDLQDELOLW\´,Q¿VFDO\HDU',&HVWDEOLVKHGWKH(6*8QLWDVSHFLDOL]HGGHSDUWPHQWWRIXUWKHUH[SDQG*URXS(6*LQLWLDWLYHVZRUOGZLGH
In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an accurate
JUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHVBasic Sustainability Policy（3DUWLDOO\UHYLVHGLQ0DUFK）The DIC Group is dedicated to conducting its business while retaining a strong commitment to five key concepts: preserving safety
and health, managing risks, ensuring fair business practices and respect for diversity and human rights, maintaining harmony withthe environment and advancing its protection, and creating value for society through innovation and contributing to ongoing economic
growth. DIC Group employees will continue working to deliver the value that its stakeholders—including its customers, suppliers, local
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Notes: :LWKWKHDLPRIHQVXULQJWKDWLWUHPDLQVDJOREDOO\WUXVWHGFRUSRUDWHFLWL]HQZLWKDSURXGUHSXWDWLRQLQ'HFHPEHUWKH',&*URXSEHFDPHDVLJQDWRU\WRWKH81*&7KH*URXSDOVRWDNHVWKHJXLGHOLQHVSURYLGHGE\,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUVRFLDOUHVSRQVLELOLW\LQWRDFFRXQWLQFRQGXFWLQJLWVRSHUDWLRQV 7KH JOREDO FRPPXQLW\ WRGD\ UHFRJQL]HV WKH SURPRWLRQ RI (6* PDQDJHPHQW ZKLFK VHHNV WR EDODQFH VXVWDLQDEOH HFRQRPLF JURZWK DQG WKH UHVROXWLRQ RI VRFLDO
LPSHUDWLYHVDVFULWLFDO7KLVLVHYLGHQFHGE\WKHIDFWWKDWFRXQWULHVZRUOGZLGHKDYHUDWLILHGWKH3DULV$JUHHPHQWDQGWKH6'*VERWKRIZKLFKZHUHDGRSWHGLQ

| Sustainability Framework and Themes
Themes7RIRVWHUFRQFUHWHPHDVXUHVLQ¿VFDO\HDUWKH',&*URXSLGHQWL¿HGNH\WKHPHVDVDIUDPHZRUNIRULPSOHPHQWLQJLWV&65SURJUDP
6XEVHTXHQWO\WKH*URXSSDUWLDOO\UHYLVHGWKHVHWKHPHVLQUHVSRQVHWRFKDQJHVLQWKHH[WHUQDOHQYLURQPHQWDQGWKHSURJUHVVRILWVHIIRUWV
7RGD\WKH*URXS¶VVXVWDLQDELOLW\IUDPHZRUNFRPSULVHVNH\WKHPHVZKLFKDUHFDWHJRUL]HGDVEDVLFWKHPHVWKHPHVWKDWGHPRQVWUDWHXQLTXHFDSDELOLWLHVDQGWKHPHVWKDWFRPELQHHOHPHQWVRIWKHSUHYLRXVWZRFODVVL¿FDWLRQV7KH*URXSLPSOHPHQWVDEURDGUDQJHRIJOREDOLQLWLDWLYHVWKDW
WDNHLQWRDFFRXQWLWVUHVSRQVLELOLW\WRHQVXUHSURSHUSURGXFWVWHZDUGVKLSDVZHOODVLWVSRVLWLRQDVDOHDGLQJPDQXIDFWXUHURI¿QHFKHPLFDOVThemes that demonstrateunique capabilities (A)Business models that respond to social imperatives
New technology development and value creation
Harmony with the community and social contributions
Communication with stakeholders

Core and category-specific themes
Themes that combine
elements of (A) and (B)Environment, safety and health
Quality
Human resources management
Sustainable procurement

Basic
Basic
(B))
themes(BthemesComplianceBusiness continuity management (BCM) and crisis management
Information security()

Deployment,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSKDVIRUPXODWHGDPHGLXPWHUP ¿VFDO\HDUV± SROLF\DQGFUHDWHVDQDQQXDODFWLYLW\plan for each of its key sustainability themes. The Group makes use of the PDCA cycle in promoting initiatives and reports on its achievements
annually in the DIC Report. Individual business groups, product divisions, sites, and overseas and domestic DIC Group companies are charged withSXUVXLQJHIIHFWLYHVXVWDLQDELOLW\SURJUDPVE\IRUPXODWLQJWKHLURZQDFWLYLW\SODQVEDVHGRQWKH*URXS¶VSODQDVZHOODVZLWKHQVXULQJWKDWWKH*URXS¶VSROLFLHVSHUPHDWHWKHLURUJDQL]DWLRQVDQGODERUIRUFHVDQGSURPRWLQJVXVWDLQDELOLW\LQLWLDWLYHVWKDWDOLJQZLWKEXVLQHVVWDUJHWVDIC Report 2021

59

Overview of Sustainability| System for Promoting Sustainability Initiatives

Members of the Sustainability Committee

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an advisory body, and is responsible for formulating responses to key social
imperatives. The Sustainability Committee is also tasked with reinforcing
VXVWDLQDELOLW\LQLWLDWLYHVDQGGHOLEHUDWLQJRQFULWLFDOUHODWHGPDWWHUV(IIHFWLYH
IURP-DQXDU\WKHFRPPLWWHHLVFKDLUHGE\WKHSUHVLGHQW
,Q-DQXDU\',&HVWDEOLVKHGWKH6XVWDLQDELOLW\6WUDWHJ\:RUNLQJ*URXS
which is responsible for formulating and advancing the implementation of
concrete strategies for promoting sustainability, and oversees the activities of
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3UHVLGHQWDQG&(2([HFXWLYH9LFH3UHVLGHQW+HDGRIWKH)LQDQFHDQG
$FFRXQWLQJ8QLW+HDGRIWKH&RUSRUDWH6WUDWHJ\8QLW+HDGRIWKH*HQHUDO$IIDLUVDQG/HJDO8QLW+HDGRIWKH3XUFKDVLQJDQG/RJLVWLFV8QLW+HDGRI
WKH(6*8QLW+HDGRI6&08QLW3UHVLGHQWVRIWKHEXVLQHVVJURXSV*HQHUDO
managers of the product divisions, General Manager of the Production
0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH7HFKQLFDO0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH5 '0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH1HZ
%XVLQHVV'HYHORSPHQW+HDGTXDUWHUV*HQHUDO0DQDJHURIWKH&RUSRUDWH
3ODQQLQJ'HSDUWPHQW&(2VRIRYHUVHDVUHJLRQDOKHDGTXDUWHUVSUHVLGHQWVRI
key domestic Group companies, and Members of the Audit & Supervisory Board$VRI0D\

Board of DirectorsżDeliberates medium-term policies and key sustainability-related matters

Sustainability Committee
Sustainability
Strategy
Working GroupżSustainability Index SubcommitteeżClimate Change SubcommitteeżMarine and Waste Plastics SubcommitteeżInformation Management Subcommittee

President and CEO

Sustainability
Working Group

Departments/
divisions in chargeżFormulates Groupwide targets and activity plansżEvaluates sustainability initiativesżFormulates practical activity plansżPromotes sustainability themes

Sustainability
Department

Product divisions,
New Business Development Headquarters,
Production Management Unit,
Technical Management Unit,
R&D Management Unit,
headquarters’ administrative units, sites,
domestic and overseas Group companies

Sustainability themesżPromotes sustainability(Coordinates and supports initiatives)żAdvances awareness of sustainabilityżServes as secretariat to the Sustainability CommitteeżServes as secretariat to the Sustainability Working Group| Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation

Leveraging its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
6HHNLQJWRIXO¿OOLWVUHVSRQVLELOLWLHVDVDPHPEHURIWKHLQWHUQDWLRQDOFRPPXQLW\LQDPRUHSURDFWLYHPDQQHULQ'HFHPEHU
WKH',&*URXSEHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& DQGSOHGJHGLWVVXSSRUWIRUWKH
7HQ3ULQFLSOHVRIWKH81*&,QDXJXUDWHGLQWKH81*&LVDYROXQWDU\LQLWLDWLYHIRUFRPSDQLHVWKDWVHHNWRDFKLHYHVXVWDLQDEOHGHYHORSPHQW&RPSDQLHVDQGRUJDQL]DWLRQVZRUOGZLGHKDYHSOHGJHGWKHLUVXSSRUWIRUWKH81*&LQWKHEHOLHIWKDWJOREDOVXVWDLQDEOH
GHYHORSPHQWLVSRVVLEOHLIFRPSDQLHVDOLJQWKHLUEXVLQHVVSUDFWLFHVZLWKDQGIXOILOOWKHLUVRFLDOUHVSRQVLELOLWLHVLQ
globally accepted principles in the areas of human rights, labor, the environment and the prevention of corruption.

Applying the Ten Principles of the UNGC
The DIC Group Code of Business Conduct conforms with the
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participation in this program to advance its operations around theworld, while at the same time giving ever-greater consideration
to the environment and human rights, with the aim of ensuring
sustainability for global society.

7HQ3ULQFLSOHVRIWKH81*& 2IÀFLDO9HUVLRQHuman rights

LabourComplying with ISO 26000
The DIC Group operates in a manner that is consistent with ISOUHOHDVHGLQ1RYHPEHUZKLFKSURYLGHVEXVLQHVVHV
DQG RUJDQL]DWLRQV JXLGHOLQHV IRU RSHUDWLQJ LQ D VRFLDOO\
responsible manner.

3ULQFLSOH

Businesses should support and respect the protection ofinternationally proclaimed human rights; and3ULQFLSOH

make sure that they are not complicit in human rights abuses.

Principle 3

Businesses should uphold the freedom of association and effective
recognition of the right to collective bargaining;

3ULQFLSOH

the elimination of all forms of forced and compulsory labour;

3ULQFLSOH

the effective abolition of child labour; and3ULQFLSOH

the elimination of discrimination in respect of
employment and occupation.
Businesses should support a precautionary approach toenvironmental challenges;
undertake initiatives to promote greater environmental
responsibility; andencourage the development and diffusion ofenvironmentally-friendly technologies.
Businesses should work against corruption in all its forms,
LQFOXGLQJH[WRUWLRQDQGEULEHU\

3ULQFLSOH

Environment

3ULQFLSOH
3ULQFLSOH

Anti-corruption

DIC Report 2021

60

3ULQFLSOHThemes

DIC Sustainability Themes

Relevant UN SDG Icons

Business models that respond tosocial imperatives

Themes that
demonstrate unique
FDSDELOLWLHV $SDGs

Goals 8, 9 and 11

SDGs

Goals 9 and 12

SDGs

Goals 3 and 4

SDGs

Goal 17

SDGs

Goals 3, 6, 7, 12, 13, 14 and 15

SDGs

Goals 3, 4, 5, 8 and 10

SDGs

Goal 12

SDGs

Goal 16

New technology development andvalue creation

Harmony with the community andsocial contributions

Communication with stakeholders

Environment, safety and healthCore andFDWHJRU\VSHFLÀF
themes(Themes that combine
HOHPHQWVRI $ DQG %Quality
Human resources management

Sustainable procurement

Compliance%DVLFWKHPHV %BCM and crisis management
Information security

The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHU
DSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH
$JHQGDIRU6XVWDLQDEOH'HYHORSPHQW´ODWHUVXPPDUL]HG
DV WKH 6XVWDLQDEOH 'HYHORSPHQW *RDOV 6'*V  ZDVDGRSWHG ZLWK WKH SDUWLFLSDWLRQ RI PRUH WKDQ  81
member states. The agenda, which succeeded the
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WR PRELOL]H HIIRUWV WR DWWDLQ WKH  JRDOV HVVHQWLDO WR
VXVWDLQDEOHGHYHORSPHQWIRUWKHSODQHWE\7KH',&
Group pledges to contribute through its business activities
to the success of the SDGs.

)RUPRUHLQIRUPDWLRQRQWKH SDGs, please visit:https://www.un.org/sustainabledevelopment/development-agenda/

DIC Report 2021

61

Compliance

SDGs Goal 16

Toward Fair and Transparent Corporate Activities
Goals and Achievements of Major Initiatives(YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ 6DWLVIDFWRU\★ = Still needs work

Objectives of initiatives

Goals for fiscal year 2020

Achievements in fiscal year 2020

Evaluation

Goals for fiscal year 2021

(QKDQFHDZDUHQHVVRIFRPSOLDQFH

• $FKLHYH W DUJHW IRU SHUF HQW DJH RI
employees participating in the e-learning
SURJUDP  
• ,PSOHPHQWOHJDOWUDLQLQJIRU',&H[HFXWLYHV
RQFH H[HFXWLYHVRI*URXSFRPSDQLHVLQ
Japan (once) and at DIC Group companies
LQVL[FRXQWULHVRYHUVHDV• Excluding regions where people were
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SHUFHQWDJHRIHPSOR\HHVSDUWLFLSDWLQJLQ
HOHDUQLQJH[FHHGHG• /HJDOWUDLQLQJZDVLPSOHPHQWHGLQ-DSDQIRU
DIC executives and employees assigned to
RYHUVHDVSRVWV★★

 $FKLHYH W DUJHW IRU SHUF HQW DJH RI
employees participating in the e-learning
SURJUDP  
• ,PSOHPHQWOHJDOWUDLQLQJ,I&29,'
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★★

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DQWLWUXVWDQGDQWLFRUUXSWLRQODZVBasic Approach to Compliance&RPSOLDQFHLQWKH',&*URXSHQFRPSDVVHVQRWRQO\REH\LQJODZVEXWDOVRDFWLQJLQDPDQQHUWKDWLVLQNHHSLQJZLWKVRFLDOQRUPVDQGWKHH[SHFWDWLRQVRIFXVWRPHUVFRPPXQLWLHVDQG
RWKHUVWDNHKROGHUV:LWKWKHDLPRIHQVXULQJVXVWDLQDEOHJURZWKIRUEXVLQHVVHVWKDWDUHERWKIDLUDQGWUDQVSDUHQW',&IRUPXODWHGWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWDXQL¿HGVHWRIJXLGHOLQHVWKHDGKHUHQFHWRZKLFKLWFRQVLGHUVWREHWKHIRXQGDWLRQRIFRPSOLDQFH',&FRPSHOVDOO',&*URXSHPSOR\HHVWRFRQGXFWWKHPVHOYHVLQDFFRUGDQFHZLWKWKHFRGH

| The DIC Group Code of Business Conduct
7KH',&*URXSFRPSOHWHGWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLQ-XO\7KHFRGHQRWRQO\PDQGDWHVFRPSOLDQFHZLWKQDWLRQDOODZVDQG
LQWHUQDWLRQDOUXOHVEXWDOVRSUHVHQWVSULQFLSOHVHVVHQWLDOWRWKHSURIHVVLRQDOFRQGXFWRI',&*URXSHPSOR\HHV7KH*URXSKHOGSUHVHQWDWLRQVIRUDOO
H[LVWLQJ*URXSHPSOR\HHVDWWKHWLPHRIUHOHDVHZKLOHQHZHPSOR\HHVUHFHLYHWUDLQLQJDWSRLQWRIKLUH7KHJRDORIVXFKWUDLQLQJLVWRHQVXUHHPSOR\HHVZRUOGZLGHVKDUHYDOXHVFKHULVKHGE\WKH*URXSDQGDSSURDFKWKHLUUHVSRQVLELOLWLHVZLWKDVHQVHRIUHVSRQVLELOLW\DQGDFRPPLWPHQWWRGRLQJWKHULJKWWKLQJ',&*URXS&RGHRI%XVLQHVV&RQGXFW WEB https://www.dic-global.com/pdf/csr/philosophy/compliance/code_of_business_conduct_en.pdf

10 Principles Essential to Professional Conduct❶ <RXU5LJKWVDVDQ(PSOR\HH5HVSHFW'LJQLW\3ULYDF\❻ Your Relationship with Customers, Suppliers, and External Third Parties❷ Environment, 6DIHW\and Health❼ Money Laundering and Anti-Terrorism❸ <RXU5HVSRQVLELOLW\WR$YRLG3RWHQWLDO&RQÀLFWVRI,QWHUHVWDQGWR3URWHFW*URXS3URSHUW\❽ )RUFHG/DERU&KLOG/DERU&RQÀLFW0LQHUDOV❹ $QWL&RUUXSWLRQDQG$QWL%ULEHU\3ROLF\❾ Insider Trading❺ <RXU5HODWLRQVKLSZLWK*RYHUQPHQWVDQG*RYHUQPHQW2I¿FLDOV❿ Proper Accounting and Internal Controls Relating to Financial Reporting| Initiatives to Promote Compliance
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❶ 7UDLQLQJIRFXVHGRQOHJDOLVVXHVWRLPSURYHFRPSOLDQFHDZDUHQHVVLVSURYLGHGIRUHPSOR\HHV

DWSRLQWRIKLUHZKHQSURPRWHGDQGEHIRUHWUDQVIHURYHUVHDV,QDGGLWLRQWRSURPRWH
DZDUHQHVVRIWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWDQGFRPSOLDQFHLQ¿VFDO\HDU
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/HJDOWUDLQLQJIRFXVHGRQJRYHUQDQFHUHODWHGLVVXHVZDVDOVRLPSOHPHQWHGLQ-DSDQWZLFHIRU',&H[HFXWLYHVRQFHIRUWKHSUHVLGHQWVRI*URXSFRPSDQLHVLQ-DSDQDQGRQFHIRU
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DIC Report 2021

62

Compliance E-Learning Program
Preventing corruption and bribery (2017)
International antitrust legislation (2018)$YRLGLQJFRQÀLFWVRILQWHUHVW Preventing harassment (2020)
Insider trading (2020)
Trademarks and intellectual property (2020),QIRUPDWLRQVHFXULW\DQGWKHSURWHFWLRQRISHUVRQDOLQIRUPDWLRQ Adhering to laws and regulations pertaining to compliance (2020)
The DIC Group’s whistle-blowing system (2020)

Compliance❷ &RPSOLDQFHRI¿FHUVDUHDSSRLQWHGDWDOOUHJLRQDOKHDGTXDUWHUV²',& -DSDQ 6XQ&KHPLFDO WKH$PHULFDVDQG(XURSH ',& &KLQD  WKH35& DQG',&

$VLD3DFL¿F $VLDDQG2FHDQLD ²WRVSHDUKHDGJOREDOFRPSOLDQFHHIIRUWV7KH',&*URXSYRZVWKDWLWZLOOQRWYLRODWHWKHSULQFLSOHVRIWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWHYHQLIVXFKDYLRODWLRQZRXOGDSSHDUWRSUR¿W
WKH*URXS$VDFRUSRUDWHFLWL]HQWKH*URXSDOVRSOHGJHVWRUHVSHFWVRFLDOQRUPVDQGDFWLQDVRXQGDQGVRFLDOO\DFFHSWDEOHPDQQHU,Q¿VFDO\HDUWKHUHZHUHQRVHULRXVYLRODWLRQVRIFRPSOLDQFHODZV| Establishing and Operating a Whistle-Blowing System
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:KHQDUHSRUWLVUHFHLYHGWKH*URXSUHVSRQGVVZLIWO\DQGDSSURSULDWHO\JLYLQJGXHFRQVLGHUDWLRQWRSHUWLQHQWODZVZKLOHDOVRLQFRUSRUDWLQJLQWHUQDODQG
H[WHUQDORSLQLRQVWRLGHQWLI\DQGFRUUHFWYLRODWLRQVDQGZKHUHQHFHVVDU\WRWDNHGLVFLSOLQDU\DFWLRQ'HWDLOVRIUHSRUWVDQGVWHSVWDNHQLQUHVSRQVHDUHUHSRUWHGWRWKH%RDUGRI'LUHFWRUV7KH*URXSZLOOFRQWLQXHWRXVHLWVZKLVWOHEORZLQJV\VWHPWRHQVXUHWKHSURPSWGLVFRYHU\DQGFRUUHFWLRQRIPLVFRQGXFW,Q¿VFDO\HDUDSSUR[LPDWHO\UHSRUWVZHUHUHFHLYHGRQFRPSOLDQFHLVVXHVDQGODERUPDWWHUVVXFKDVSRZHUKDUDVVPHQWDQGGLVFULPLQDWLRQEXWQRQH
ZHUHMXGJHGWREHVHULRXV',&EHJDQSURYLGLQJHOHDUQLQJIRFXVHGRQWKH*URXS¶VZKLVWOHEORZLQJV\VWHPLQ'HFHPEHU

DIC Group
employees
Japan, other countries/
territories, regionsAsia–Pacific region

Greater China

Sun Chemical
Corporation

Director in charge of compliance, Legal Department
External legal firm

Legal Department
Whistle-Blowing Committee

Whistleblowing
hotlines

Legal Department
Whistle-Blowing Committee

General manager, Legal Department,
CEO, CFO| Antitrust and Anti-Corruption Legislation
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| Promoting Compliance with Legislation Regarding the Timely Payment of Subcontractors:LWKWKHDLPRIHQKDQFLQJXQGHUVWDQGLQJRIWKHLPSRUWDQFHRIDSSURSULDWHDQGIDLUWUDQVDFWLRQVZLWKVXEFRQWUDFWRUVWKH/HJDO8QLWKHOGSUHVHQWDWLRQVRQOHJLVODWLRQUHJDUGLQJWKHWLPHO\SD\PHQWRIVXEFRQWUDFWRUVLQFRUSRUDWLQJFDVHVWXGLHVIRUWKHSXUFKDVLQJGHSDUWPHQWVRIGRPHVWLF',&*URXSFRPSDQLHV
DQGRIIHUHGHOHDUQLQJSULQFLSDOO\IRUHPSOR\HHVLQFKDUJHRIVXEFRQWUDFWRUV,QDGGLWLRQ',&KDVSUHSDUHGWKH0DQXDOIRU,QWHUQDO$XGLWLQJRIWKH',&*URXS¶V&RPSOLDQFHZLWK-DSDQ¶V$FW$JDLQVW'HOD\LQ3D\PHQWRI6XEFRQWUDFW3URFHHGV(WFWR6XEFRQWUDFWRUVDQGFUHDWHGDIUDPHZRUNIRUFRQGXFWLQJDXGLWVLQDPRUHHI¿FLHQWPDQQHU7KH*URXSDOVRHQFRXUDJHVHPSOR\HHVLQUHODWHGSRVLWLRQVWRSDUWLFLSDWHLQSURJUDPVVSRQVRUHGE\H[WHUQDORUJDQL]DWLRQVLQFOXGLQJDZRUNVKRSSURPRWLQJDGKHUHQFHWRWKH$FWVSRQVRUHGE\WKH-DSDQ)DLU7UDGH&RPPLVVLRQDQGWKH6PDOODQG0HGLXP(QWHUSULVH$JHQF\| Taxation ComplianceAccrued Taxes in Fiscal Year 2020

,Q1RYHPEHUWKH',&*URXSIRUPXODWHGDQRI¿FLDODSSURDFKWRWD[$VDQRUJDQL]DWLRQZLWKJOREDORSHUDWLRQVWKH*URXSHQJDJHVLQIDLUDQGDSSURSULDWHWD[SODQQLQJWKDWUHÀHFWVWKHQDWXUHRILWVEXVLQHVVHV7KH*URXSLVDOVRDZDUHRIULVNVDVVRFLDWHGZLWKWUDQVIHUSULFH
WD[DWLRQDQGWKHXVHRIWD[KDYHQVDQGRILWVREOLJDWLRQWRSD\DSSURSULDWHWD[HVLQWKHSURSHUMXULVGLFWLRQVDVDSSURSULDWHIRULWVRSHUDWLRQV7KHFKDUWWRWKHULJKWVKRZVDEUHDNGRZQRIWD[HVLQ-DSDQDQGRYHUVHDVLQ¿VFDO\HDU
The DIC Group’s Approach to Tax

WEB

https://www.dic-global.com/en/csr/philosophy/management/tax.html

DIC Report 2021

63

Overseas

6,497

Japan
Total

¥10,336
million

3,839

BCM and Crisis Management
Reducing Business Risks and Preventing the Recurrence of Incidents
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Goals for fiscal year 2020

1. Periodically revise BCPs and reinforce/expand
cooperation among product divisions and sites.
Ensure the continuity of
DIC Group businesses.

2. Strengthen efforts to create a global crisis management
configuration and promote BCP initiatives.

Achievements in fiscal year 2020

Evaluation• A periodic revision of BCPs was conducted, asscheduled.
• The decision was made to introduce a system for sharing
information in the event of an accident or disaster toreinforce cooperation among the headquarters task
force, product divisions and sites. A demonstration of
the use of this system in joint initial response training
with sites was conducted as part of training for theheadquarters task force.
• The preparation of eight risk-specific manuals for
Company representatives assigned to overseas posts(including a revised version of the manual on responses
to infectious diseases incorporating responses to
COVID-19) was completed.

Goals for fiscal year 2021

1. Periodically revise BCPs and reinforce/expand
cooperation among product divisions and sites.
2. Strengthen efforts to create a global crisis
management configuration and promote BCP
initiatives.

★★

Basic Approach to BCM and Crisis Management
The DIC Group accounts for all risks with the potential to interrupt business continuity through BCM, including those related to natural disasters such as major
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Common across the DIC Group

Basic sustainability policy
Risk management policy

Rules for managing
emergency supplies

Rules for crisis management in
the event of a major naturalor other disaster

Site and subsidiary rules/
regulations, firefighting plans, etc.
Site-specific

Task force manuals

BCM system manuals

Production division–specificGroup company–specific

Product division
BCP manuals

Group company
BCP manuals| BCM in Fiscal Year 2020
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64

BCM and Crisis Management

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| Preventing BCPs from Becoming Empty Formalities
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Efforts to Reinforce Safety Measures Overseas
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65

BCM and Crisis Management

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66

Information Security
Initiatives to Ensure Information Security
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Establish a global information
security framework.

Goals for fiscal year 2020

Achievements in fiscal year 2020

Evaluation

Goals for fiscal year 2021

・Prepare and reinforce guidelines for the use ofcloud-based services and cloud computing.
・Strengthen the security environment formobile devices and investigate and assess
technologies for integrating information andexecution network technologies.
・Formulate and strengthen information security
rules and frameworks, provide training andencourage awareness in a manner that
responds to new information security threats
and risks.
・Create emergency response system toaddress incidents when they occur.

・ A thorough evaluation was conducted anddirections were prepared to guide decisions
regarding the use of cloud-based services.
・Standard mobile devices were provided andthe communications infrastructure improvedto accommodate the rapidly expanding useof telework arrangements.
・Endpoint security systems for computers andother devices was updated.

★★

・Reinforce the security infrastructure and set
or update various standards in preparation
for the full-scale transition to a cloud-based
information system.

Basic Approach to Information Security
The DIC Group has positioned information security as a key
management priority and established a Basic Policy on Information
Security, which is founded on its recognition that protecting
information assets that belong to or are managed by the Group isessential to its ability to conduct business. In line with this policy,
DIC has formulated and implemented confidential information
management regulations and information management guidelines.
The DIC Group works to ensure that directors and employees
use the Group’s information assets appropriately in the courseof business and appropriately handle confidential information.
The Group also pursues continuous improvements by conducting
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Employeetraining/
drillsStrengthening of
measures tocombat targetedcyber attacks

Further
improvements

Response to the
expanded use ofdigital technologies

Response to the shift tocloud computing

Basic Policy on Information Security
Basic policy
Confidential information management regulations
Preparation of
response measures
Information management guidelines
Implementation proceduresInternal audits| Globally Maintaining and Enhancing Information Security
The DIC Group’s approach to information security management rests on four pillars: Regulations and guidelines, management framework, infrastructure,
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Americas and Europe.
Regulations and Guidelines,QOLQHZLWKLWV%DVLF3ROLF\RQ,QIRUPDWLRQ6HFXULW\WKH',&*URXSXSGDWHVLWVFRQ¿GHQWLDOLQIRUPDWLRQPDQDJHPHQWUHJXODWLRQVZKLFKVWLSXODWHWKHVFRSHRI
management, related standards, rules and responsibilities, as well as its information management guidelines, which outline implementation procedures, on aregular basis and as required to ensure its ability to address new security risks in a timely manner.
The Group also creates new and revises existing rules as appropriate in response to the increasing prevalence of digital technologies and the shift tocloud-based computing. In addition, the Group has established separate rules for handling personal information and customer information in its information
PDQDJHPHQWJXLGHOLQHVZKLFKLWLVZRUNLQJWRGLVVHPLQDWHDPRQJHPSOR\HHV,Q¿VFDO\HDUWKH',&*URXSUHSRUWHGQREUHDFKHVRIFXVWRPHUSULYDF\or losses of customer data.

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67

Information Security

Management Framework
The Information Security Committee, which is led by the chief information officer (CIO), meets regularly (twice annually) as part of a system tofacilitate the timely update of rules and guidelines to accommodate new technologies and risks, and to ensure changes are communicated effectively
across the DIC Group. The committee formulates annual targets and initiatives for strengthening information security with the approval of the
Sustainability Committee and manages the progress of related efforts.
To ensure it is prepared in the unlikely event of an information security–related incident, the Group has created a task force operational manual toensure effective initial responses to incidents when they occur.
Infrastructure,QSUHSDUDWLRQIRUWKHIXOOVFDOHWUDQVLWLRQWRDFORXGEDVHGLQIRUPDWLRQV\VWHPDQGWKHH[SDQGHGXVHRIWHOHZRUNDUUDQJHPHQWVLQILVFDO\HDU
the DIC Group took steps to reinforce its internet security infrastructure and updated endpoint security systems. The Group also proceeded with theconstruction of a maintenance system to promptly detect information security risks and address incidents when they occur in collaboration with an
external partner.
On another front, the DIC Group continued to conduct inspections of its information security management system, regulations, infrastructure,
maintenance measures, and employee education and training, from a third-party organization. This helps to clarify issues and challenges and ensure
they are reflected in remedial measures.
Employee Education and Training
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WUDLQLQJGHDOLQJZLWKWDUJHWHGHPDLODWWDFNVVLQFHILVFDO\HDUZRUNLQJFRQWLQXRXVO\WRHQVXUHPRUHSUDFWLFDOFRQWHQWWRLQFUHDVHHPSOR\HHV¶awareness of security. The Group has offered employee training in both information security and in dealing with targeted email attacks in the$PHULFDVDQG(XURSHVLQFHILVFDO\HDU
,QUHVSRQVHWRWKHHPHUJHQFHRID³QHZQRUPDO´LQILVFDO\HDUDQGWKHH[SDQGHGXVHRIWHOHZRUNDUUDQJHPHQWVWKH',&*URXSLVFXUUHQWO\formulating guidelines that accommodate various work styles, which it will work to disseminate across the Group.

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68

Environment, Safety and Health (ESH)

SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Toward the Achievement of a Sustainable SocietyManagement System
Basic Approach
The DIC Group promotes a broad range of ESH initiatives through its Responsible Care program.

| Initiatives to Date
As a global organization that manufactures and sells chemical substances, the DIC Group promotes abroad range of ESH initiatives through its Responsible Care program. Having established its Principle andPolicy for the Environment, Safety and Health in 1992, in 1995 DIC pledged to implement the precepts
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by signing the CEO’s Declaration of Support for the Responsible Care Global Charter, the Company has
promoted constant improvements. Today, the Group manages its Responsible Care program in a uniform
manner using standardized codes, guided by its Environment, Safety and Health Policy, and works to
implement initiatives that exceed regulatory requirements, in line with annual Responsible Care activity
plans, and to fully disclose the results thereof.
Note: Responsible Care describes voluntary management initiatives undertaken by companies that manufacture or otherwise handle chemical
substances, in line with the principles of autonomous action and self-assessment, pledging in their management policies to protecting theenvironment and ensuring health and safety across the entire life cycle of products, from development to manufacturing, distribution, use
and end-of-life disposal, as well as to disclosing related information and promoting improvements.

DIC is a signatory to the International Council of&KHPLFDO$VVRFLDWLRQV ,&&$ ¶V5HVSRQVLEOH&DUH
Global Charter.

Environment, Safety and Health Policy
As a responsible corporate citizen and as a company that manufactures and sells chemical substances, DIC recognizes that care for the environment,
safety and health is fundamental to the management of the Company. DIC is committed to the concept of sustainable development in all aspects of its
businesses and contributes to the global environment, including biodiversity, by creating environmentally sound products and technologies.
❶ We take responsibility for the environmental, safety and health implications of products throughout their life cycles.
❷ We continuously set goals and targets for environmental, safety and health improvements.
❸ We comply strictly with laws, regulations and agreements relative to the environment, safety and health. For countries lacking suchlaws, we prioritize safe operations and protection of the environment.
❹ We systematically provide education and training on the environment, safety and health.
❺ :HSUHSDUHV\VWHPVDQGDXGLWLQWHUQDOO\WREHQH¿WWKHHQYLURQPHQWVDIHW\DQGKHDOWK:HGLVFORVHWKHVHSROLFLHVLQWHUQDOO\DQGH[WHUQDOO\DQGDVNWKDWDOO',&*URXSFRPSDQLHVREVHUYHWKHP7KHDERYHPHQWLRQHG³VDIHW\´also encompasses security and disaster prevention.

| Responsible Care Management System
7KH',&*URXSPDQDJHVLWV5HVSRQVLEOH&DUHSURJUDPLQDFFRUGDQFHZLWKVHYHQFRGHV 7KH¿UVWVXPPDUL]HGDV³PDQDJHPHQWV\VWHP´DLPVWRIDFLOLWDWHWKHXQLIRUPDGPLQLVWUDWLRQRIVL[RWKHUFRGHV³RFFXSDWLRQDOVDIHW\DQGKHDOWK´ SURWHFWLRQRIWKHVDIHW\DQGKHDOWKRIHPSOR\HHV ³GLVDVWHUSUHYHQWLRQ´ SUHYHQWLRQRIILUHVDQGH[SORVLRQVDQGWKHGLVFKDUJHRIFKHPLFDOV ³HQYLURQPHQWDOSURWHFWLRQ´ FRQWLQXRXVUHGXFWLRQRIFKHPLFDOHPLVVLRQVDQGWKHGLVFKDUJHRIZDVWH ³VDIHW\LQORJLVWLFV´ UHGXFWLRQRIFKHPLFDOULVNVDVVRFLDWHGZLWKWKHGLVWULEXWLRQRIFKHPLFDOV ³FKHPLFDODQGSURGXFWVDIHW\´ PDQDJHPHQWRIULVNVDVVRFLDWHGZLWKFKHPLFDOV DQG³GLDORJXHZLWKVRFLHW\´ FRPPXQLFDWLRQZLWKORFDOFRPPXQLWLHVUHJDUGLQJ(6+ 7KH*URXSKDVDXJPHQWHGWKHVHFRGHVZLWKDQDGGLWLRQDOLQWHUQDOO\GHYLVHGFRGHDQGDSSOLHVWKH3'&$F\FOHWRHQVXUHRQJRLQJ
improvements, while also conducting annual internal audits and management reviews.
7KHVHYHQ5HVSRQVLEOH&DUHFRGHVZHUHGHYHORSHGE\WKH-DSDQ5HVSRQVLEOH&DUH&RXQFLO -5&& ZKLFKLVSDUWRIWKH-DSDQ&KHPLFDO,QGXVWU\$VVRFLDWLRQ -&,$ DVDIUDPHZRUNIRU
Responsible Care programs with the goal of helping achieve a society that supports efforts to address ESH-related initiatives.

DIC Report 2021

69

ESH

❶ 0DQDJHPHQWV\VWHP IRUXQLI\LQJWKHIROORZLQJFRGHVDVDV\VWHP 

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Audits andreviews
conducted
bymanagement

Act

Check

Responsible Care
Initiatives
Improve

Do

Plan

Implement/
manageFormulateplans| Introduction of the DECS
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occupational safety and health, climate change, water resources, waste and other pertinent data to facilitate centralized management. The system
WDUJHWVPRUHWKDQ*URXSVLWHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ,QDGGLWLRQWRPDNLQJWKHFROOHFWLRQSURFHVVPRUHHI¿FLHQWDQGOHVVODERULQWHQVLYHWKH'(&6KHOSVLPSURYHWKHUHOLDELOLW\RIGDWDVXEPLWWHGIRUWKLUGSDUW\YHUL¿FDWLRQ| Framework for Promoting Responsible Care

Framework for Promoting Responsible Care

The Sustainability Committee, which answers directly to thepresident and CEO, is responsible for setting Responsible Careinitiatives. Currently chaired by the president and CEO, thecommittee includes business group presidents, administrative
unit heads, CEOs of regional headquarters and members of the
Audit & Supervisory Board. The committee formulates Groupwide
sustainability targets and policies, as well as deliberates andevaluates medium-term sustainability policies and annual
sustainability initiatives. The PDCA cycle is used to evaluate
voluntary Responsible Care initiatives implemented by Group
companies, plants and R&D facilities in collaboration with the
Safety and Environment Group. The Responsible Care Department
provides support to ensure the smooth progress of these initiatives
and conducts audits to ensure compliance and improve safety andenvironmental performance.

Sustainability Committee

Production
Management Unit

Technical
Management Unit

Responsible Care Department
Support for ESH audits
Production and R&D facilities
Safety and Environment Group

Product division
Individuals in charge of
Responsible Care

Technical

Individuals in charge of
Responsible Care

Production

Product division

Product division
Individuals in charge of
Responsible Care

| Annual Activity Plans
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through production activities to the realization of an environment-oriented society.

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70

ESH

| The DIC Group’s Annual Responsible Care Activity Plans for Fiscal Year 2020

❶ Management system

・Raise environmental and safety management levels Groupwide.
・Promote environment- and safety-related education.
・Reinforce the ESH management systems of regional headquarters (Greater China and Asia–Pacific region) andprovideVXSSRUWIRUHQJLQHHULQJHIIRUWV $VLD±3DFL¿FUHJLRQ ・Utilize the new system for collecting Responsible Care data.
❷ Occupational safety and healthIn line with the DIC Group’s fundamental objective, which remains the achievement of an accident-free workplace, set regional
WDUJHWVIRUUHGXFLQJWKHLQFLGHQFHRIRFFXSDWLRQDODFFLGHQWVLQ¿VFDO\HDU❸ Disaster prevention

Promote the horizontal deployment of lessons learned from major disasters and work to prevent recurrence.
  $GYDQFHPHDVXUHVWRFRSHZLWKVWDWLFHOHFWULFLW\DQGPDQDJHGDQJHURXVJRRGV LQFOXGLQJLQVWDOOLQJ¿UH¿JKWLQJDQGVHFXULW\HTXLSPHQW   3URPRWHPDQDJHPHQWVXEFRQWUDFWRUDQGSURMHFWPDQDJHPHQWLQLWLDWLYHV
❹ Environmental protection

・Respond to climate change–related challenges (prevent global warming).
(1) Achieve target for the reduction of CO emissions. Implement the following measures with the aim of achieving the DIC global target for
the reduction of COHPLVVLRQV 6FRSHDQG  IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU (a) Step up the promotion of energy-saving initiatives at sites.
(b) Promote the use of energy from renewable sources.
  6WULYHWRHQVXUHDJUDVSRI&2HPLVVLRQVDFURVVWKHVXSSO\FKDLQ 6FRSH   &RQGXFWVFHQDULRDQDO\VLVWRIRUPXODWHFOLPDWHFKDQJHVWUDWHJLHV
・Maintain/lower impact of production activities on air and wastewater quality.
・Maintain/increase industrial waste recycling rate.
・Promote the management of water risks affecting production activities.
  $GYDQFHXQGHUVWDQGLQJRIPDWHULDOÀRZVUHODWLQJWRZDWHUXVH LQFOXGLQJZDWHUUHF\FOLQJ   ([SORUHPHWKRGVIRUGHWHUPLQLQJULVNVUHODWHGWRWKHZLWKGUDZDORIIUHVKZDWHUDQGWKHGLVFKDUJHRIZDVWHZDWHU
❺ Safety in logistics

Continue to promote the provision of information pertinent to the safe transportation of chemicals.
❻ Chemical and product safety

Promote the creation of a new global system for managing information on chemical substances.
❼ Dialogue with society

Continue to publicize the results of the DIC Group’s Responsible Care activities.

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71

1RWH$FWLYLW\SODQVDUHDVRI'HFHPEHUESH| Message from the President
DIC’s president prepares a message for employees for Environment Month and National Safety Week.

| Responsible Care Education
As a company that manufactures and sells chemical substances, DIC incorporates education regarding the importance of Groupwide
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■ Deployment at DIC Group Companies| Support for Group Company Responsible Care Initiatives
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VFDOH DWRWDORIVLWHV ZLWKWKHJRDORIHQKDQFLQJ5HVSRQVLEOH&DUHLQLWLDWLYHV*URXSZLGH2ISDUWLFXODUQRWHWKHGHSDUWPHQWDVVLJQVUHSUHVHQWDWLYHVWRDVVLVWUHJLRQDOKHDGTXDUWHUVRYHUVHHLQJ*URXSRSHUDWLRQVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFLILFUHJLRQDVZHOODV
supports local initiatives to foster human resources.

|$FTXLVLWLRQRI&HUWLÀFDWLRQ8QGHU,62
$VRI'HFHPEHU',&*URXSFRPSDQLHVUHVSRQVLEOHIRURIWKH*URXS¶VSURGXFWLRQYROXPHKDGDFTXLUHGFHUWLILFDWLRQXQGHU
,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUHQYLURQPHQWDOPDQDJHPHQWV\VWHPV| Principal Initiatives in Fiscal Year 2020
Initiatives in Japan,Q-DSDQDODFNRIVXFFHVVLQUHGXFLQJRFFXSDWLRQDODFFLGHQWVDQGGLVDVWHUVFRQWLQXHVWRXQGHUVFRUHWKHQHHGWRIXUWKHUUHLQIRUFHWKH
Group’s domestic Responsible Care framework and step up preventative measures. DIC and DIC Graphics hold GM conferences, which are
JDWKHULQJVRI(6+RI¿FHUVIURPSULQFLSDOVLWHVZKRKDYHEHHQDSSRLQWHGJURXSPDQDJHUV *0V *0FRQIHUHQFHVZHUHKHOGIRXUWLPHVLQ¿VFDO\HDU2WKHU*URXSFRPSDQLHVLQ-DSDQSDUWLFLSDWHLQWZLFHDQQXDO5HVSRQVLEOH&DUHFRQIHUHQFHV7KHVHYDULRXVFRQIHUHQFHV
facilitate the discussion of efforts to prevent accidents and disasters, share information on environmental challenges and ensure common
awareness of Groupwide rules.

Initiatives in the Asia–Pacific Region',&KDVLQVWDOOHG(6+FRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI(6+LQLWLDWLYHV LQFRXQWULHVDQGWHUULWRULHVLQWKH$VLD±3DFLILFUHJLRQ
under the supervision of a regional ESH director in Singapore and has also dispatched an ESH manager for the region from corporate
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DVXVXDO(6+FRXQWU\KHDGVVLWH(6+RI¿FHUVWKHUHJLRQDO(6+GLUHFWRUDQG5HVSRQVLEOH&DUH'HSDUWPHQWVWDIIFRQJUHJDWHGRQOLQHWRGLVFXVV(6+SROLFLHVWDUJHWVDQGFKDOOHQJHVDVZHOODVHQHUJ\VDYLQJLQYHVWPHQWVIRU¿VFDO\HDU
)UDPHZRUNIRU3URPRWLQJ(6+LQWKH$VLD²3DFLÀF5HJLRQRegional ESH Director for Asia‒Paciﬁc
Regional ESH Manager for Asia‒Paciﬁc

DIC Asia Paciﬁc Pte Ltd

DIC Report 2021

72

ESH
country head

ESH
country head

ESH
country head

ESH
country head

ESH
country head

India

Oceania
Australia
New
ZealandThailand

Malaysia

Indonesia

Philippines
VietnamSingapore
Sri Lanka
Pakistan

ESH

Regional OHSAS and ISO Certification

7KH',&*URXSLQWKH$VLD±3DFL¿FUHJLRQFRPSULVHVFRPSDQLHVZLWKVLWHVLQFRXQWULHVDQGWHUULWRULHV,QDGGLWLRQWRGLYHUVHFXVWRPVand languages, a key challenge from an operations perspective is differences in awareness regarding occupational safety. To resolve suchdifferences, it was crucial for the Group to establish common occupational safety standards and work to ensure the effective implementation
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WKHLQWHUQDWLRQDOO\DFFHSWHGVWDQGDUGIRURFFXSDWLRQDOKHDOWKDQGVDIHW\PDQDJHPHQWV\VWHPVDQGSURYLGHVHQFRXUDJHPHQWDQGVXSSRUWIRUFRPSDQLHVLQWKHUHJLRQVHHNLQJWRREWDLQFHUWL¿FDWLRQ6LQFHWKHLQWURGXFWLRQRI,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶V
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Initiatives in Greater China
DIC’s efforts to reinforce its ESH framework in Greater China include dispatching an ESH manager from corporate headquarters to serve as
regional ESH director and assigning ESH coordinators to oversee efforts in the southern and eastern parts of the country. Teleconferences
LQYROYLQJFRUSRUDWHKHDGTXDUWHUVDQGWKHUHJLRQDOKHDGTXDUWHUVDUHKHOGIUHTXHQWO\WRIDFLOLWDWHWKHSURPSWUHVROXWLRQRILVVXHV7KHHGLWLRQRI*UHDWHU&KLQD¶VDQQXDOUHJLRQDO(6+DQGHQHUJ\FRQVHUYDWLRQFRQIHUHQFHZDVKHOGLQ1RYHPEHU3DUWLFLSDQWVLQFOXGLQJJHQHUDOPDQDJHUVIURPUHJLRQDO*URXSFRPSDQLHVDQGSURGXFWLRQIDFLOLWLHV(6+RI¿FHUVDQGWKHGLUHFWRULQFKDUJHRI5HVSRQVLEOH&DUHDWFRUSRUDWH
KHDGTXDUWHUVJDWKHUHGRQOLQHWRFRQ¿UPWKHSURJUHVVRI5HVSRQVLEOH&DUHLQLWLDWLYHVDQGDOVRGLVFXVVFKDOOHQJHVDQGIXWXUHGLUHFWLRQVTOPIC
DIC (China) Conducts Seminar to Improve Safety Management Across Greater China,Q$XJXVW',& &KLQD ¶V(6+WHDPFRQGXFWHGDVHPLQDURQDGYDQFHGVDIHW\PDQDJHPHQWSULQFLSOHVDQGVDIHW\PDQDJHPHQWWRROVDW4LQJGDR',&)LQHFKHPLFDOV%HFDXVHRI&29,'UHSUHVHQWDWLYHVIURP+RQJ.RQJDQG7DLZDQSDUWLFLSDWHGRQOLQH/RFDOSDUWLFLSDQWVQXPEHUHGDQGLQFOXGHG(6+RI¿FHUVDQGPDQDJHUVIURPWKH
production and facility, equipment and ESH departments, underscoring increasing interest in safety management.
The seminar focused on the philosophy of advanced safety management, deciphering theelements of process safety management and mechanical integrity, as well as best practices ofleading PRC-based chemicals companies and related safety management tools and methods.
Lecturers included Shi Honglin, senior expert and deputy chief engineer at the China Chemical
Safety Association; Li Zhuxing, a global partner of sustainability consultancy ERM, who had
served as general manager of the risk management department of DNV GL in the PRC; a veteran
manager from DuPont; and safety management training specialists from prominent local chemicals
FRPSDQLHV',& &KLQD ¶V(6+WHDPZLOOFRQWLQXHWRPRQLWRUWKHOHYHORIVDIHW\PDQDJHPHQWDFURVV
the DIC Group in Greater China and plans to conduct seminars aimed at improving capabilities in 3DUWLFLSDQWVLQWKHVHPLQDUDW4LQJGDR',&)LQHFKHPLFDOV
this area on a periodic basis.

Initiatives in the Americas, Europe and Africa
The Sun Chemical Group oversees all Responsible Care initiatives by Group companies in the Americas, Europe and Africa. With the aimof sharing overall DIC Group Responsible Care policies and values, and to facilitate close cooperation with the Sun Chemical Group, ESH
RI¿FHUVDW',&FRUSRUDWHKHDGTXDUWHUVLQ7RN\RKROGSHULRGLF(6+FRQIHUHQFHVESH Auditing| Framework for Promotion
The DIC Group regularly audits Responsible Care initiatives at Group companies, plants and R&D facilities. Because of COVID-19, auditing
WHDPVLQ¿VFDO\HDUZHUHOLPLWHGWRFRUSRUDWHKHDGTXDUWHUV¶5HVSRQVLEOH&DUHVSHFLDOLVWVDQGVLWHDGPLQLVWUDWRUV$XGLWVDVVHVVHG
DYDULHW\RIIDFWRUVLQFOXGLQJWKHSURJUHVVRIUHPHGLDOPHDVXUHVLPSOHPHQWHGLQUHVSRQVHWRLVVXHVFLWHGLQDXGLWV2YHUVHDV5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVDQGUHJLRQDOKHDGTXDUWHUV¶(6+RI¿FHUVXVHVHOIDVVHVVPHQWFKHFNOLVWVWRDVFHUWDLQWKHSURJUHVV
of efforts with the aim of enhancing Responsible Care initiatives at individual sites.

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| Principal Initiatives in Fiscal Year 2020
On-Site Audits Conducted at Sites to Enhance Safety,Q-DSDQ5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVFRQGXFWDXGLWVQRWRQO\DW',&EXWDOVRDWGRPHVWLF',&*URXSFRPSDQLHVVLQFH¿VFDO\HDUWRYHULI\LQLWLDWLYHVDQGVXSSRUWLPSURYHPHQWDFWLYLWLHV$VXVXDOLQ¿VFDO\HDUDXGLWVZHUHFRQGXFWHGDW',&¶VQLQHSULQFLSDO
sites and DIC Graphics’ two sites. These included a third-party safety audit at one facility and a legal inspection by a third-party consulting¿UPDWWZRIDFLOLWLHVDVDQREMHFWLYHZD\WRLGHQWLI\LVVXHV,QDGGLWLRQDXGLWVFHQWHULQJRQULJRURXVVLWHLQVSHFWLRQVZHUHFRQGXFWHGDWVLWHV
belonging to nine other domestic Group companies with the aim of improving the level of environmental and safety management.
6LPLODUHIIRUWVDUHDOVRSURPRWHGRYHUVHDVZLWKDXGLWVEHFRPLQJPRUHVWULQJHQWHYHU\\HDU,Q¿VFDO\HDUWKH*URXSFRQGXFWHG
5HVSRQVLEOH&DUHDXGLWVDWVLWHVEHORQJLQJWRFRPSDQLHVLQWKH$VLD±3DFL¿FUHJLRQ2ZLQJWR&29,'WKHVHDXGLWVZHUHFRQGXFWHG
by the sites themselves. In Greater China, audits were conducted at 15 sites belonging to 14 companies, including third-party audits at threesites in Taiwan. The audits in Taiwan were conducted by the sites because of COVID-19. In the Americas, Europe and Africa, Responsible
Care audits were conducted at 22 sites belonging to Sun Chemical Group companies and 12 sites belonging to the SEIKO PMC Group,
which manufactures chemicals for paper production and resins for printing inks and reprographic products, although unlike in other years the6(,.230&DXGLWVZHUHDOVRLPSOHPHQWHGRQOLQHRZLQJWR&29,'7ZRYLRODWLRQVRI5HVSRQVLEOH&DUH±UHODWHGUHJXODWLRQVZLWK¿QDQFLDO
penalties* were reported overseas in the period under review, in response to which prompt remedial measures were swiftly implemented.
3HQDOWLHVLQH[FHVVRI

Outline of ESH Audits Implemented in Fiscal Year 2020
Japan

Audits Conducted at Subsidiaries’ Sites
in Fiscal Year 2020

Overseas

DIC

DIC Graphics

Other domestic DIC
Group companies

Greater China

Asia–Pacific region

9 sites

2 sites

11sites

15 sites

24 sitesTotal

22 sites

Total

Sun Chemical GroupSEIKO PMC Group

22 sites

12 sites

39 sites

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Occupational Safety and Health/Disaster Prevention
Occupational Safety and Health
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2020

Ensure occupational safety and health.

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.80Greater China:
1.20
Asia–Pacific region:
2.00
Americas and Europe: 8.00
(Global DIC Group:
4.51)

Prevent disasters.

• Continue working to prevent major accidents(e.g., fires resulting in the gutting of structures).
• Further promote the calculation of process
safety accidents in accordance with ICCA
guidelines.

Achievements in fiscal year 2020

Evaluation

Goals for fiscal year 2021★

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.80Greater China:
1.00
Asia–Pacific region:
1.50
Americas and Europe: 8.00
(Global DIC Group:
4.35)

★★

• Continue working to prevent major accidents.
• Further promote the calculation of process
safety accidents.

Reductions achieved:
DIC Group in Japan:
Greater China:
Asia–Pacific region:
Americas and Europe:(Global DIC Group:

2.51
2.29
1.13
5.63
3.56)

• Number of major accidents: 0• Process safety accidents in Japan were calculated.

| Policies and Organization
Basic Approach
Viewing the prioritization of operational safety as a core management tenet, the DIC Group works tirelessly to prevent accidents anddisasters and to boost the level of ESH initiatives.
The DIC Group recognizes operational safety both as fundamental to its businesses and the core component of Responsible Care. The Company thus
promotes active occupational safety and health, security and disaster prevention measures to foster a “Safety First” philosophy Groupwide and on the part ofevery employee.
%HFDXVHLWVRSHUDWLRQVVSDQGLYHUVH¿HOGVWKH',&*URXSKDVQXPHURXVSURFHVVHVWKDWXVHKD]DUGRXVDQGWR[LFPDWHULDOVDQGURWDWLQJGHYLFHVLQFOXGLQJRQHVWKDWGRQRWLQYROYHFKHPLFDOUHDFWLRQV$Q\DFFLGHQWLQYROYLQJVXFKPDWHULDOVRUGHYLFHVKDVWKHSRWHQWLDOWRVLJQL¿FDQWO\LPSDFWVRFLHW\LQJHQHUDO
and damage the health of Group and partner company employees and local residents. With the aim of preventing such accidents, the Group has earned
WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶V2FFXSDWLRQDO6DIHW\DQG+HDOWK0DQDJHPHQW6\VWHP 26+06 FHUWL¿FDWLRQDQGEDVHGRQWKHUHVXOWV
of stringent risk assessments, places a high priority on reducing risks in the workplace by enhancing awareness of Principles of Safe Conduct and training
highly perceptive safety personnel. The Group also strives to enhance safety through efforts to reinforce its safety infrastructure and create a safety-oriented
corporate culture.

Workplace safety posters featuring DIC’s president and CEO in three languages for use at sites in Japan and overseas

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| Framework for Promotion
Under the supervision of the Sustainability Committee chair (president and CEO), the Responsible Care Department and the Safety andEnvironment groups of Group companies, plants and research laboratories collaborate to promote a variety of initiatives. The Responsible&DUH'HSDUWPHQWKROGVPHHWLQJVUHJXODUO\ZLWKVLWH6DIHW\DQG(QYLURQPHQWJURXSVWRH[FKDQJHLQIRUPDWLRQDVZHOODVWRFRQ¿UPWKHVWDWXV
of priority issues and achieve targets and manage the progress of related efforts. To ensure the continuous improvement of occupational
VDIHW\DQGKHDOWKRYHUVHDVWKH5HVSRQVLEOH&DUH'HSDUWPHQWDQGUHJLRQDOKHDGTXDUWHUVZRUNWRJHWKHUWRFRQGXFW*URXSFRPSDQ\±VSHFL¿Frisk assessments, analyze occupational accidents and promote remedial measures.

TOPIC
Management’s Commitment
Believing that it is important for management to take the lead in promoting the idea of “Safety First,” managing executive
RI¿FHU1DR\RVKL)XUXWDSUHSDUHVDPRQWKO\PHPRIRUGLVWULEXWLRQWRHDFKLQGLYLGXDOHPSOR\HHDVSDUWRIDFDPSDLJQGXEEHG
³/HDUQLQJIURPWKH3DVWDQG,PSOHPHQWLQJ3UDFWLFDO6ROXWLRQV´(DFKPHPRSUHVHQWVDUHFHQWDFWXDORFFXSDWLRQDODFFLGHQW
RULQWURGXFHVRFFXSDWLRQDODFFLGHQWVWKDWDUHOLNHO\WRRFFXUDWVSHFL¿FWLPHV²HJKHDWVWURNHLQVXPPHURUVWDWLFHOHFWULFLW\±
related accidents in winter—and based thereupon suggests possible countermeasures. This memo is also read out once amonth at a morning assembly at each site to promote awareness among employees and encourage a common understanding.

| Principal Initiatives in Fiscal Year 2020
Status of Occupational Accidents
The DIC Group sets targets for occupational accidents and promotes a variety of initiatives around the world with the aim of eliminating such accidents. Of particular note, theGroup sets domestic and overseas targets for total recordable incident rate (TRIR), calculated as the number of casualties (i.e., persons injured or killed) due to occupational
accidents—both those resulting in workdays lost and those not resulting in
Occupational Accidents Resulting in Workdays Lost (FY2018–2020)ZRUNGD\VORVW²SHUPLOOLRQZRUNKRXUV,Q¿VFDO\HDUWKH*URXS¶VGRPHVWLF
DIC
DIC Group (Japan)
DIC Group (Global)
75,5ZDVGRZQIURPWKHSUHYLRXV¿VFDO\HDUDQGH[FHHGLQJLWVWDUJHW
2018
2019
2020
2018
2019
2020
2018
2019 2020
RIIRUWKHSHULRG7KH75,5IRUWKHJOREDO',&*URXSZDVGRZQ
Number of
DQGVLJQLILFDQWO\EHWWHUWKDQLWVWDUJHW7KHQXPEHURIFDVXDOWLHVGXHWR
accidents resulting
6
2
1
8
11
5
91
78
70
in workdays lost
occupational accidents resulting in workdays lost at Group sites outside Japan
Frequency 1.071 0.363 0.180 0.848 1.200 0.545 2.211 1.963 1.793
ZDV1RQHRIWKHRFFXSDWLRQDODFFLGHQWVUHSRUWHGE\WKH',&*URXSVLWHVLQ
rate-DSDQDQGRYHUVHDVLQ¿VFDO\HDULQYROYHGIDWDOLWLHV/RRNLQJDKHDGWKH
Severity rate 0.015 0.003 0.000 0.009 0.032 0.026---Group will continue working to analyze the causes of occupational accidents
UHVXOWLQJLQZRUNGD\VORVWDQGWRUHÀHFWLWV¿QGLQJVLQFRQFUHWHLPSURYHPHQWV
TRIR*
2.50 1.63 1.44 2.86 2.95 2.51 4.71 3.82 3.56
with the goal of preventing such accidents in the future.
1RWHV',&DJJUHJDWHVDQGUHSRUWVGDWDRQIXOOWLPHSDUWWLPHDQGFRQWUDFWHPSOR\HHV75,5ZDVSUHYLRXVO\GH¿QHGDVWKHQXPEHURIRFFXSDWLRQDODFFLGHQWVSHUPLOOLRQZRUNKRXUV,Q¿VFDO\HDUWKHGH¿QLWLRQZDVUHYLVHGWRWKHQXPEHURIFDVXDOWLHVGXHWRRFFXSDWLRQDODFFLGHQWVSHUPLOOLRQZRUNKRXUV)LJXUHVIRU¿VFDO\HDUVDQGLQWKHDFFRPSDQ\LQJ
table have been restated.

75,5LVFDOFXODWHGDV 1XPEHURIFDVXDOWLHVGXHWRRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQZRUNGD\VORVW1XPEHURI
casualties due to occupational accidents not resulting in workdays lost) / Million work hours
1RWH%HFDXVHWKHGH¿QLWLRQRI³VHYHULW\UDWH´YDULHVGHSHQGLQJRQWKHFRXQWU\WHUULWRU\RYHUDOOUDWHVIRUWKHJOREDODIC Group are not given.

Frequency Rate

Severity Rate

1.50

0.15

1.00

0.10

0.50

0.05

0.00

12

13

14
DIC

15
JCIA

16

17

18

19

Overall manufacturing industry

0.00

20

12

(FY)

Note: The frequency rate expresses the frequency of accidents resulting in workdays lost in a
fiscal year, calculated as the number of deaths or injuries per million work hours.
Frequency rate ＝

Number of deaths or injuries due to occupational accidents
Total work hours

13

14

15

DIC

JCIA

16

17

18

19

Overall manufacturing industry

20

(FY)

Note: The severity rate expresses the number of workdays lost due to occupational accidents per
1,000 work hours.

× 1,000,000

Severity rate ＝A frequency rate of 1.00 means one occupational accident resulting in workdays lost in one
year at a site with 500 employees.

Total number of workdays lost due to occupational accidents
Total work hours

× 1,000

A severity rate of 0.10 means 100 workdays lost in one year at a site with 500 people.

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| Efforts to Foster a Safety-Conscious Corporate Culture,QOLQHZLWKWKHLWV³6DIHW\)LUVW´SKLORVRSK\WKH',&*URXSZRUNVWRIRVWHUDVDIHW\FRQVFLRXVFRUSRUDWHFXOWXUH,Q¿VFDO\HDUSHUVRQQHOin charge of safety at plants belonging to DIC and subsidiary DIC Graphics created Safe Corporate Climate Cultivation working groups. In
addition to meeting regularly to discuss and exchange proposals regarding safety policies and measures, these working groups advise theSustainability Committee and other bodies and promote a variety of key initiatives.
Fiscal Year

Working Group Initiatives

2012

Working groups presented recommendations on safety policies and produced warning stickers to enhance awareness of workplace hazards.

2013

Working groups prepared safety posters featuring the president and CEO and started reading out key passages from Principles of Safe
Conduct in workplaces with the aim of making the practices therein routine.

2014

Working groups prepared an illustrated version of Principles of Safe Conduct for reading out in workplaces.

2015

Working groups edited Principles of Safe Conduct into a tear-off calendar version for distribution at all workplaces. The calendar version wastranslated into English and Chinese.

2016:RUNLQJJURXSVLQWKH35&EHJDQUHDGLQJRXWNH\SDVVDJHVIURPPrinciples of Safe Conduct to foster a culture of safety.

2017

Working groups updated Principles of Safe Conduct.

2018:RUNLQJJURXSVSXEOLVKHGWKH¿IWKHGLWLRQRIPrinciples of Safe Conduct.

2019:RUNLQJJURXSVFRPPHQFHGSURGXFWLRQRIDYHUVLRQRIWKH¿IWKHGLWLRQRIPrinciples of Safe Conduct for workplace reading circles.

2020

7KHSXEOLFDWLRQRIDYHUVLRQRIWKH¿IWKHGLWLRQRIPrinciples of Safe Conduct for workplace reading circles was scheduled, but was postponed
XQWLODVDUHVXOWRI&29,'

3DJHVIURPDQLOOXVWUDWHGYHUVLRQRIPrinciples of Safe Conduct for workplace reading circles (available inJapanese, English and Chinese)
Reading out passages from Principles of Safe Conduct| Basic Initiatives Aimed at Preventing Occupational Accidents
Aggregating and Publishing Occupational Safety and Health Data as a Monthly Report
The DIC Group conducts its diverse businesses in accordance with a wide range of national and regional legal systems, working conditions andpractices. The risk of accidents and disasters varies from one industry to another because of differences in the facilities, machinery and raw
materials used. For the entire Group to work as one to improve occupational safety and health, it is therefore crucial to establish appropriate
benchmarks for each region.
DIC promotes the sharing of statistical data on accidents, disasters and reporting procedures for each region, as well as the gathering andsharing of statistical information related to occupational safety. This approach makes it possible to objectively compare and evaluate the operationalsafety of individual Group companies, establish precise targets for individual countries and regions, and formulate improvement programs.
,Q¿VFDO\HDUWKH',&*URXSHVWDEOLVKHGDV\VWHPIRUDJJUHJDWLQJSHUWLQHQWRFFXSDWLRQDOVDIHW\DQGKHDOWKGDWDIRULQGLYLGXDO*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQDQGLVSXEOLVKLQJLWDVDPRQWKO\UHSRUW7KLVPDGHLWHDVLHUWRPRUHVZLIWO\LGHQWLI\DQG
compare working hours, the number of accidents resulting in workdays lost, occupational accident frequency rate and other monthly data for these
UHJLRQVWKHUHE\IXUWKHUHQKDQFLQJ*URXSZLGHPDQDJHPHQWDQGUHJLRQDOSHUIRUPDQFH,Q¿VFDO\HDUWKH*URXSLQWURGXFHGWKH'(&6D
V\VWHPIRUUHFRUGLQJDQGVWRULQJWKLVGDWDLQWKHFORXGWRIDFLOLWDWHFHQWUDOL]HGPDQDJHPHQW )RUPRUHLQIRUPDWLRQSOHDVHVHHSDJH
Statistical Occupational Safety and Health Data
・1XPEHURIHPSOR\HHV

・Total work hours

・1XPEHURIRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQ
workdays lost and not resulting in workdays lost・1XPEHURIZRUNGD\VORVW
・Occupational accident frequency rate

・1XPEHURIDFFLGHQWVLQYROYLQJ¿UHVH[SORVLRQV・Workdays lost before restart of operations
・Occupational accident severity rate

Monthly report

DIC Report 2021

77

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Conducting Risk Assessments
By understanding potential risks in production processes, facilities and devices, and the hazards of chemical substances, the DIC Group systematically
prepares initiatives to prevent accidents and occupational injuries. In Japan, the Group has formulated guidelines for conducting risk assessments when
GHSOR\LQJQHZRUPRGL¿HGHTXLSPHQWRUFKDQJLQJSURGXFWLRQSURFHVVHVWRLGHQWLI\DQGHYDOXDWHWKHLPSDFWRQHPSOR\HHVDQGWKHFRPPXQLW\IURPGHVLJQ
through to operation.
:LWKWKHDLPRIUHGXFLQJULVNVDVVRFLDWHGZLWKFKHPLFDOVXEVWDQFHVLQ-DSDQVLQFH¿VFDO\HDUWKH',&*URXSKDVFUHDWHGDIUDPHZRUNWRIDFLOLWDWH
WKHPHWKRGLFDOLPSOHPHQWDWLRQRIULVNDVVHVVPHQWVLQOLQHZLWKWKHSROLF\VHWE\WKH0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH2ISDUWLFXODUQRWHLQ¿VFDO\HDUWKH*URXSIRUPXODWHGSURSULHWDU\DVVHVVPHQWJXLGHOLQHVLQFOXGLQJIRUDVVHVVPHQWSURFHGXUHVDQGLVFRQVLGHULQJPHDVXUHVWRHYDOXDWHKD]DUGVDQG
WR[LFLW\DQGORZHUULVNVDVVRFLDWHGZLWKFKHPLFDOVVHWIRUWKLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FW

TOPIC
DIC Graphics’ Kyushu Production Group Wins Special Prize in the JCIA Safety Awards
7KH.\XVKX3URGXFWLRQ*URXSRI',&*UDSKLFV¶7RN\R3ODQWZRQDVSHFLDOSUL]HIRUVDIHW\H[FHOOHQFHLQWKHWK-&,$6DIHW\$ZDUGV7KH-&,$JDYHKLJKPDUNVWRWKH.\XVKX3URGXFWLRQ*URXS¶VGHGLFDWHGHIIRUWVWRHQVXUHRFFXSDWLRQDOVDIHW\DVDUHVXOWRIZKLFKDWWKHWLPHRIWKHDZDUGLWKDGDFKLHYHG\HDUVDQGQLQHPRQWKVRI
accident-free operations and expressed its hope that the unit would maintain this record going forward.
Accident-Free Operations
6WDUWRIRSHUDWLRQV'HFHPEHU
$FFLGHQWIUHHRSHUDWLRQV+RXUVKRXUV <HDUV\HDUVDQGQLQHPRQWKV(PSOR\HHVRIWKHDZDUGZLQQLQJ.\XVKX3URGXFWLRQ*URXSComment by Kyushu Production Group Representative
We are delighted to have received this award for safety excellence from the JCIA. This award is evidence of the
GHWHUPLQHGHIIRUWVRIHYHU\RQHZKRKDVZRUNHGLQWKH.\XVKX3URGXFWLRQ*URXSWRHQVXUHRFFXSDWLRQDOVDIHW\In addition to expressing our gratitude to those who came before us for their dedication, which has made it
SRVVLEOHIRUXVWRDFKLHYHSOXV\HDUVRIDFFLGHQWIUHHRSHUDWLRQVWKLVDZDUGSURYLGHVDQRSSRUWXQLW\IRUDOORIXVWRUHDI¿UPRXUXQGHUVWDQGLQJRIWKHLPSRUWDQFHRIRFFXSDWLRQDOVDIHW\DQGRXUFRPPLWPHQWWR³6DIHW\)LUVW´in all we do to maintain accident-free operations going forward.

| Education and Training
Promoting E-Learning–Based Training for Employees
To enhance its ESH and disaster prevention capabilities, the DIC Group recognizes the importance of ensuring that all of its employees gain
DEURDGXQGHUVWDQGLQJRIFKHPLFDOVXEVWDQFHVSURGXFWLRQSURFHVVHVDQGSHUWLQHQWODZVDQGUHJXODWLRQV,Q¿VFDO\HDUWKH*URXSLQWURGXFHGDQHOHDUQLQJSURJUDPKDYLQJYHUL¿HGWKHDSSURSULDWHQHVVRIHGXFDWLRQDOPDWHULDOVIURPWKHSURJUDPIURPWKHSHUVSHFWLYHRI
5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVVLWH(6+RI¿FHUVDQGSURGXFWLRQGHSDUWPHQWV7KHSURJUDPZKLFKLVVWUXFWXUHGDURXQGODZVDQGUHJXODWLRQVSHUWLQHQWWRWKHRSHUDWLRQRISURGXFWLRQIDFLOLWLHVLQFOXGLQJWKH)LUH6HUYLFH$FWWKH$LU3ROOXWLRQ&RQWURO/DZDQGWKH+LJK
3UHVVXUH*DV6DIHW\$FWZDVLQWURGXFHGIRUPDOO\IRU',&*URXSFRPSDQLHVLQ-DSDQLQ¿VFDO\HDUZLWKSDUWLFLSDQWVDEOHWRWDNHXSWRFODVVHVDQGUHTXLUHGWRVFRUHDERYHSRLQWVWRHDUQFHUWL¿FDWLRQ$VRI'HFHPEHUWKHFXPXODWLYHQXPEHURIHPSOR\HHVSDUWLFLSDWLQJLQWKHSURJUDPKDGUHDFKHG,Q¿VFDO\HDUWKHSURJUDP¶VIRFXVZDVH[SDQGHGWRLQFOXGHVWDWLFHOHFWULFLW\DIC Report 2021

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Training Skilled Safety Personnel
To foster skilled safety personnel, the DIC Group provides regular safety education and training on how to handle chemical substances using
online resources such as the Principles of Safe Conduct guidebook and the Group’s Occupational Accident Case Studies database, as well as
its Environment and Safety Guidelines for the R&D Department and safety data sheets (SDSs). Principles of Safe Conduct has been translated
LQWRVHYHUDOODQJXDJHVIRUXVHE\RYHUVHDV*URXSFRPSDQLHVDQGLVXVHGZLGHO\LQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ7KH¿IWKHGLWLRQRIWKHJXLGHERRNZKLFKLVXSGDWHGHYHU\\HDUVZDVSXEOLVKHGLQ¿VFDO\HDU$QDQLPDWHGYHUVLRQEDVHGRQWKH¿IWKHGLWLRQZDVDOVR
launched in the same year, the Chinese- and English-language versions of which are currently being used as educational tools overseas.
The DIC Group also focuses on Kiken Yochi Training (KYT) (“hazard prediction training”) and hands-on safety training on a global basis. In
addition to expanding use of KYT, a constructive technique to further increase safety awareness, to all Group companies in Japan, the Group is
DFFHOHUDWLQJGHSOR\PHQWLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ

Web-based animated version of Principles of Safe Conduct

Disaster Prevention| Policies and Organization
Basic Approach$Q\¿UHH[SORVLRQRUOHDNRIKD]DUGRXVVXEVWDQFHVIURPDFKHPLFDOVSODQWFRXOGKDYHDWUHPHQGRXVLPSDFWRQORFDOUHVLGHQWVDQG
the rest of the community and damage the health of employees, including those of partner companies. In addition to establishinga security management system to prevent such accidents, the DIC Group operates and maintains its facilities in line with pertinent
laws and regulations. The Group regularly conducts emergency drills and has earthquake and other response measures in place.
To ensure the safety of production equipment, the DIC Group undertakes risk assessments at every stage, from development
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assessment techniques and implementation timetables for each and is used to facilitate risk assessments at individual sites. Since
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drills and other initiatives.
7KH',&350*XLGHOLQHVRXWOLQHWLPHWDEOHVDQGLPSOHPHQWDWLRQIUDPHZRUNVIRUDVVHVVLQJWKHKDQGOLQJRIFKHPLFDOVXEVWDQFHVSURGXFWLRQSURFHVVHVSURGXFWLRQIRUPXODVPDFKLQHU\DQGZRUN
practices with the aim of comprehensively identifying and steadily reducing risks associated with production and R&D processes.

| Framework for Promotion
Under the supervision of the Sustainability Committee chair (president and CEO), the Responsible Care Department and the Safety andEnvironment groups of Group companies, plants and research laboratories collaborate to promote a variety of initiatives. The Responsible&DUH'HSDUWPHQWKROGVPHHWLQJVUHJXODUO\ZLWKVLWH6DIHW\DQG(QYLURQPHQWJURXSVWRH[FKDQJHLQIRUPDWLRQDVZHOODVWRFRQ¿UPWKHVWDWXV
of priority issues and achieve targets and manage the progress of related efforts.

| Principal Initiatives in Fiscal Year 2020
Process Safety Management
6LQFH¿VFDO\HDU',&KDVFDOFXODWHGSURFHVVVDIHW\DFFLGHQWVDW',&*URXSVLWHVLQ-DSDQLQDFFRUGDQFHZLWK,&&$JXLGHOLQHV7KH*URXSUHSRUWHGIRXUSURFHVVVDIHW\DFFLGHQWVLQILVFDO\HDU7KHSURFHVVVDIHW\DFFLGHQWIUHTXHQF\UDWH²WKHQXPEHURIVXFKDFFLGHQWVSHU
ZRUNKRXUV²ZDV

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| Facility Safety Assessment
Assessment Procedures',&*URXSSURGXFWLRQIDFLOLWLHVKDYHDQDUUD\RIDSSOLFDWLRQVSHFL¿FHTXLSPHQWUDQJLQJIURPXQLWVZKHUHFKHPLFDOUHDFWLRQVDUHFRQGXFWHG
to machine presses and other processing equipment. When modifying processes or upgrading/replacing equipment, the Group assesses
VDIHW\DWHYHU\VWDJHIURPSURFHVVGHVLJQDQGFRQVWUXFWLRQWKURXJKWRRSHUDWLRQPDLQWHQDQFHDQG¿QDOGLVSRVDOLQOLQHZLWKULVNDVVHVVPHQWJXLGHOLQHVIRUUHDFWLRQIRUPXODVSURFHVVHVDQGHTXLSPHQWWRHQVXUHKLJKHUVDIHW\OHYHOVIRUQHZSURFHVVHVDQGIDFLOLWLHV,Q¿VFDO\HDU
DIC revised risk assessment guidelines for machinery and equipment and prepared educational materials to prevent electrostatic accidents.

Accident and Disaster Analysis and Timely Information
DIC collects and compiles information on internal and external accidents, disasters and problems into its Occupational Accident Case Studies
and Accident Case Studies databases. After identifying the causes of accidents or problems, establishing points to be checked and formulating
countermeasures, the Company incorporates database information into safety education for DIC and DIC Group companies in Japan and overseas.

Assessment by the Safety Competency Enhancement Center$FRPSDQ\¶VVDIHW\FRPSHWHQF\FDQEHGH¿QHGDVLWVDELOLW\WRPDLQWDLQVDIHW\OHYHOVDWLWVYDULRXVVLWHV,Q¿VFDO\HDU',&LQWURGXFHG
an assessment system* as a means of objectively evaluating and enhancing its safety competency. This system was developed by the Japan
Society for Safety Engineering (JSSE) and engineers in the chemicals industry as a common benchmark and is currently used by companies
in Japan that are members of the Safety Competency Enhancement Center. Assessments have been conducted at all DIC plants—the.DVKLPD3ODQWLQ¿VFDO\HDUWKH<RNNDLFKLDQG6DLWDPDSODQWVLQ¿VFDO\HDUWKH.RPDNLDQG6DNDLSODQWVLQ¿VFDO\HDUWKH
&KLEDDQG7DWHED\DVKLSODQWVLQ¿VFDO\HDUDQGWKH+RNXULNX3ODQWLQ¿VFDO\HDU ²ZLWKHDFKIDFLOLW\XVLQJDVVHVVPHQWUHVXOWVWRLPSOHPHQWIXUWKHULPSURYHPHQWV,Q'HFHPEHU',&DVNHGWKH6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHUWRSURYLGHWKH&RPSDQ\¶V
president and CEO with an overall report on the results of the seven inspections conducted to date, facilitating the sharing of information
regarding safety and disaster prevention across the management team.
* The assessment system encompasses questions about safety infrastructure (technical considerations) and culture of safety (operation and management of organizational culture).

TOPIC
DIC Graphics’ Gunma Plant Receives Award as Excellent Hazardous Materials–Related Site
,Q-XQH',&*UDSKLFV¶*XQPD3ODQWUHFHLYHGDQDZDUGDVDQ([FHOOHQW+D]DUGRXV0DWHULDOV±5HODWHG6LWH
IURPWKH-DSDQ$VVRFLDWLRQIRU6DIHW\RI+D]DUGRXV0DWHULDOV$WRWDORIIDFLOLWLHVDFURVV-DSDQZHUHUHFRJQL]HGZLWK',&*UDSKLFV¶SODQWEHLQJWKHRQO\RQHLQ*XQPD3UHIHFWXUH7KHDZDUGLVRQHRIVHYHUDOJLYHQRXWDWDQDWLRQDO
FRQIHUHQFHGHYRWHGWRKD]DUGRXVPDWHULDOVVDIHW\HYHU\-XQH7RSUHYHQWWKHVSUHDGRI&29,'KRZHYHUWKH
-XQHFRQIHUHQFHZDVFDQFHOHG,QVWHDGWKHDZDUGZDVSUHVHQWHGE\&KLHI)XNXFKLRIWKH*XQPD3UHIHFWXUDOTatebayashi Fire Department. This award underscores the solid evaluation given the safety protocols of the Gunma
3ODQWZKLFKKDQGOHVDODUJHYROXPHRIKD]DUGRXVPDWHULDOVHQFRXUDJLQJHPSOR\HHVWRFRQWLQXHZRUNLQJDVRQHWR
further enhance the site’s ability to handle hazardous materials safely.

| Emergency Response Drills
In addition to daily security patrols and periodic
equipment checks, the DIC Group conducts
regular emergency response drills based on%&3VSDUWLFXODUO\DWSURGXFWLRQVLWHVLQ-DSDQ
and overseas.
&RPSUHKHQVLYHGLVDVWHUGULOODWWKH6DNDL3ODQWDGHVLJQDWHG
special disaster protection area

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ESH| Hands-On Safety Training
7KH',&*URXS¶VIXOOÀHGJHGKDQGVRQVDIHW\WUDLQLQJSURJUDPEHJDQLQZLWKWKHLQWURGXFWLRQRIDPRELOHLQLWLDWLYHXVLQJHTXLSPHQWWUDQVSRUWHG
IURPVLWHWRVLWH6LQFH¿VFDO\HDUWKH*URXSKDVLQVWDOOHGSHUPDQHQWWUDLQLQJHTXLSPHQWLQ-DSDQ VL[VLWHV WKH35& WKUHHVLWHV 7DLZDQMalaysia, Indonesia, India and Thailand. Over the past few years, these and other initiatives have helped to almost halve the occupational accident
IUHTXHQF\UDWHDW',&*URXSVLWHVLQ-DSDQ7KH*URXS¶VKDQGVRQVDIHW\WUDLQLQJVLPXODWHVFRPPRQSURGXFWLRQÀRRUDFFLGHQWV²LQFOXGLQJWKRVH
involving entanglement in rotating devices, falls from high places and incised wounds caused by cutting equipment—based on actual previous
examples with the aim of reducing employees’ willingness to take risks and fostering their ability to recognize danger. In doing so, the Group seeks
to transform the mindset of employees by encouraging them to think and act on their own to protect themselves and each other from latent risks.
$OWKRXJKDWUDLQLQJVHVVLRQZDVKHOGIRULQVWUXFWRUVLQ)HEUXDU\WKHSDQGHPLFIRUFHGWKH*URXSWRFDQFHOKDQGVRQVDIHW\WUDLQLQJLQ¿VFDO\HDU/RRNLQJDKHDG',&ZLOODOVRH[SORUHWKHSRVVLELOLW\RISUHSDULQJDYLGHRYHUVLRQRIWKHSURJUDP$VRI'HFHPEHUWKHFXPXODWLYH
QXPEHURIHPSOR\HHVSDUWLFLSDWLQJLQKDQGVRQVDIHW\WUDLQLQJKDGH[FHHGHGLQ-DSDQDQGDSSUR[LPDWHO\RYHUVHDV
Number of Hands-On Safety Training Participants

Cumulative total(FY2012–2020)

DIC Group in JapanDIC Group overseas(Greater China: 4 companies,$VLD²3DFLÀFUHJLRQFRPSDQLHV

9,121

5,850

Total

14,971

Initiatives in Japan,Q¿VFDO\HDUWKH',&*URXSRSHQHGWKH6DLWDPD+DQGV2Q6DIHW\&HQWHUDIDFLOLW\ERDVWLQJHTXLSPHQWWKDWDOORZVWKHVLPXODWLRQRI
an array of accidents, with the goal of fostering skilled safety personnel by incorporating hands-on safety training in new employee and rankVSHFL¿FWUDLQLQJSURJUDPV,QWKHVDPH\HDU',&DQG',&*UDSKLFVEHJDQLQFOXGLQJKDQGVRQVDIHW\WUDLQLQJDQG.<7LQWKHWUDLQLQJFXUULFXOD
for new employees. The Chiba, Sakai, Hokuriku, Saitama, Kashima and other plants have also established their own hands-on safety training
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on training equipment for lending to individual sites as part of a mobile training initiative. The Responsible Care Department places a highemphasis on fostering employee hands-on training instructors for this initiative and has established an instructors licensing system.

7UDLQLQJIRUQHZHPSOR\HHVDWWKH6DLWDPD3ODQW

Hands-on safety training simulating an accident involving a fall

Initiatives at Overseas Group Companies
Group companies overseas are also deploying hands-on safety training. In Greater China, hands-on safety training equipment has been
LQVWDOOHGDW1DQWRQJ',&&RORU&R/WG',&*UDSKLFV *XDQJ]KRX /WGDQG&KDQJ]KRX+XDUL1HZ0DWHULDOVLQWKH35&DQG',&*UDSKLFV&KLD/XQJ&RUSLQ7DLZDQ,QWKH$VLD±3DFL¿FUHJLRQHTXLSPHQWKDVEHHQLQVWDOOHGDW',&&RPSRXQGV 0DOD\VLD 6GQ%KG37',&$675$
&KHPLFDOVLQ,QGRQHVLD7KDLODQG¶V6LDP&KHPLFDO,QGXVWU\DQG',&,QGLD¶VSODQWLQ1RLGD7KHVHFRPSDQLHVSURYLGHKDQGVRQVDIHW\WUDLQLQJfor employees across their respective regions, as well as for instructors.

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Climate Change
Basic Philosophy
The DIC Group works to reduce CO2 emissions over the entire life cycle of its products and, through its business activities, to lower
risks associated with climate change.

| Initiatives Aimed at Preventing Global Warming
Recognizing climate change as an issue of the utmost importance to society and a critical factor affecting its businesses, the DIC Group is working as one to reduce energy
FRQVXPSWLRQDQGSURPRWHGHFDUERQL]DWLRQDQGLQLWV',&PHGLXPWHUPPDQDJHPHQWSODQDQQRXQFHGLQ¿VFDO\HDUKDVSOHGJHGWRUHGXFHJUHHQKRXVHJDVHPLVVLRQVIURPLWVVLWHV$VDPDQXIDFWXUHURI¿QHFKHPLFDOVZLWKDJOREDOSUHVHQFHWKH*URXSLVDOVROHYHUDJLQJLWVWHFKQRORJLFDOFDSDELOLWLHVWRGHYHORSSURGXFWVWKDWZLOOFRQWULEXWHWR
the realization of a low-carbon society.
$WWKH8QLWHG1DWLRQV&OLPDWH&KDQJH&RQIHUHQFH WKHDQQXDOVHVVLRQRIWKH&RQIHUHQFHRIWKH3DUWLHV &23 WRWKH8QLWHG1DWLRQV)UDPHZRUN&RQYHQWLRQRQ&OLPDWH&KDQJH 81)&&& SDUWLFLSDQWVDGRSWHGWKH3DULV$JUHHPHQWDPRYHDLPHGDWDFFHOHUDWLQJHIIRUWVWRWDFNOHWKLVXUJHQWFKDOOHQJH,Q0D\WKH',&*URXSGHFODUHGLWVVXSSRUWIRUWKH7&)' ZKLFKZDVDQQRXQFHGLQSOHGJLQJWRGLVFORVHFOLPDWHUHODWHGLQIRUPDWLRQLQOLQHZLWK7&)'UHFRPPHQGDWLRQVJRLQJIRUZDUG
7KH7&)'ZDVHVWDEOLVKHGXQGHUWKHDXVSLFHVRIWKH)LQDQFLDO6WDELOLW\%RDUG )6% DQGDQQRXQFHGLQZLWKWKHDLPRIPLWLJDWLQJFOLPDWHFKDQJH±UHODWHGLQVWDELOLW\DQGULVNLQ¿QDQFLDOPDUNHWVZKLFKKDVWKHSRWHQWLDOWR
affect performance over the medium to long term.

| Basic Approach to Preventing Global Warming*OREDOZDUPLQJ²DSULQFLSDOFDXVHRIFOLPDWHFKDQJH²LVDQLQFUHDVLQJO\SUHVVLQJLVVXHIRUWKHHQWLUHZRUOG%HOLHYLQJWKDWPHDVXUHVWRSUHYHQWJOREDOZDUPLQJDUHFULWLFDOWR
effective management for a chemicals manufacturer, the DIC Group is actively promoting a variety of efforts, as outlined below.
❶ 8QGHUWDNHHQHUJ\VDYLQJLQLWLDWLYHVZRUOGZLGH❷ Deploy effective strategies through working group activities❸ 2SHUDWHHQHUJ\VDYLQJFRJHQHUDWLRQV\VWHPV FRPELQHGKHDWDQGHOHFWULFSRZHUJHQHUDWLQJIDFLOLWLHV❹ (PSOR\HQHUJ\IURPUHQHZDEOHVRXUFHV ELRPDVVERLOHUVZLQGSRZHUDQGVRODUSRZHU DWVXLWDEOHVLWHV❺ Conduct energy-saving analyses and deploy energy-saving initiatives at DIC Group companies, including those overseas❻ :KHQLQVWDOOLQJRUH[SDQGLQJIDFLOLWLHVSXUSRVHIXOO\VHOHFWHQHUJ\HI¿FLHQWHTXLSPHQWDQGIRUPXODWHUHODWHGUXOHV LQYHVWPHQWLQHQYLURQPHQWDOYDOXH
1RWH$WRWDORIRIWKH',&*URXS¶VVLWHVDQGRI¿FHVDQGUHVHDUFKIDFLOLWLHVLQ-DSDQKDYHHDUQHGFHUWL¿FDWLRQXQGHUWKHFRXQWU\¶V'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\V\VWHP

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Reduce CO2 emissions atsites (Scope 1 and 2).

Goals for fiscal year 2020

Achievements in fiscal year 2020

Evaluation

Goals for fiscal year 2021

DIC Group (global):
Reduce CO2 emissions at DIC Groupsites (Scope 1 and 2) by 30.0% fromthe fiscal year 2013 level by fiscal
year 2030 (average annual decreaseof 2.1%).

CO2 emissions: 552,123 tonnes• Down 4.3% from fiscal year 2019(577,057 tonnes)• Down 23.6% from fiscal year 2013
(722,955 tonnes)★★★

Reduce CO2 emissions at DIC Groupsites (Scope 1 and 2) by 30.0% from thefiscal year 2013 level by fiscal year 2030
(average annual decrease of 2.1%).

★★★

1. In line with the global target, reduce CO2
emissions (Scope 1 and 2) at DIC Groupsites in Japan by 30.0% from the fiscal
year 2013 level by fiscal year 2030
(average annual decrease of 2.1%).

★★

2. Reduce energy consumption per unit ofproduction by 17.0% from the fiscal year
2013 level by fiscal year 2030 (averageannual decrease of 1.0%). (Comply withJapan’s Act on the Rational Use ofEnergy.)DIC Group (Japan):
1. In line with the global target, reduce
CO2 emissions (Scope 1 and 2) at
DIC Group sites in Japan by 30.0%
from the fiscal year 2013 level by
fiscal year 2030 (average annual
decrease of 2.1%).

1. CO2 emissions: 194,364 tonnes• Down 12.0% from fiscal year 2019
(220,776 tonnes)• Down 20.5% from fiscal year 2013
(244,337 tonnes)

2. Reduce energy consumption per unitof production by 17.0% from thefiscal year 2013 level by fiscal year
2030 (average annual decrease of
1.0%). (Comply with Japan’s Act on
the Rational Use of Energy.)

2. Energy consumption per unit of production:
3.733 GJ/tonne• Up 0.8% from fiscal year 2019(3.705 GJ/tonne)• Down 10.5% from fiscal year 2013(4.170 GJ/tonne)

Reference:
CO2HPLVVLRQVSHUXQLWRISURGXFWLRQ JOREDO',&*URXS LQ¿VFDO\HDUNJWRQQH
8SIURP¿VFDO\HDU NJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH
CO2HPLVVLRQVSHUXQLWRISURGXFWLRQ ',&*URXSLQ-DSDQ LQ¿VFDO\HDUNJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH
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82

ESH

| Framework for Promotion',&DQG',&*URXSFRPSDQLHVLQ-DSDQKDYHHVWDEOLVKHGDQ(QHUJ\6DYLQJ3URPRWLRQ&RPPLWWHHDWHDFKVLWH&RPPLWWHHDFWLYLWLHVLQFOXGHFRQ¿UPLQJWKHSURJUHVVRILQLWLDWLYHVHQJDJLQJLQGLVFXVVLRQVDQGFRQGXFWLQJSDWUROV',&KDVDOVRVHWXSDQ(QHUJ\6DYLQJ:RUNLQJ*URXSDWHDFKVLWHFRPSULVLQJ
members chosen by the site, to foster the exchange of information and research pertaining to new items and to promote the horizontal deployment ofeffective measures across the Group. This combination of site- and Group-level initiatives forms the framework under which the DIC Group endeavors to
reduce its CO2HPLVVLRQV2YHUVHDV',&*URXSFRPSDQLHVSURPRWHDZLGHUDQJHRILQGHSHQGHQWHQHUJ\VDYLQJLQLWLDWLYHVWKDWDOLJQZLWKWKH*URXS¶VSROLF\
7KH3URGXFWLRQ0DQDJHPHQW8QLWSURYLGHVVXSSRUWRQPXOWLSOHIURQWVLQFOXGLQJWKHGHSOR\PHQWRIPDQDJHPHQWV\VWHPVDQGWKHWUDLQLQJRIHPSOR\HHV&ULWLFDOLQLWLDWLYHVDUHGHEDWHGE\DQGWKHSURJUHVVWKHUHRILVUHSRUWHGRQE\WKH6XVWDLQDELOLW\&RPPLWWHHZKLFKDQVZHUVGLUHFWO\WRWKHSUHVLGHQWDQG&(2| Principal Initiatives in Fiscal Year 2020
1Energy Consumption and CO2 Emissions by the Global DIC Group(QHUJ\FRQVXPSWLRQE\WKHJOREDO',&*URXSLQ¿VFDO\HDUGHFOLQHGIURP¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU&22 emissions
E\WKHJOREDO',&*URXSDPRXQWHGWRWRQQHVGRZQIURP¿VFDO\HDUDQGIURP¿VFDO\HDUZKLOH&22 emissions per unit of production,
DWNJWRQQHHGJHGXSIURP¿VFDO\HDUEXWIHOOIURPWKHEDVH\HDU
7KH',&*URXS¶VGLYHUVHSURGXFWSRUWIROLRLQFOXGHVSULQWLQJLQNVSRO\PHUVSLJPHQWV/&VHQJLQHHULQJSODVWLFVDQGFRPSRXQGV5HFHQW\HDUVKDYHVHHQDQXSWUHQGLQWKHRXWSXWRIHQHUJ\LQWHQVLYH¿QHFKHPLFDOVDQGDGRZQWUHQGLQWKHRXWSXWRIJHQHUDOSXUSRVHLWHPVWKHSURGXFWLRQRIZKLFKLVFRPSDUDWLYHO\HQHUJ\HI¿FLHQW$JDLQVWWKLVEDFNGURSWKH*URXS¶VVXFFHVVLQDFKLHYLQJDUHGXFWLRQLQWKHYROXPHRI&22 it emits worldwide in excess of its target for the year included a
GHFOLQHLQSURGXFWLRQYROXPHGXHWR&29,'DVZHOODVHIIRUWVE\FRPSDQLHVZRUOGZLGHWREUHDNGRZQWKHWDUJHW²DQDYHUDJHDQQXDOGHFUHDVHRIIURP¿VFDO\HDU²VHWIRUWKLQWKH',&PHGLXPWHUPPDQDJHPHQWSODQWRHQVXUHDFKLHYHPHQWRILWVORQJWHUPWDUJHWRIDUHGXFWLRQIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU7KLVDFKLHYHPHQWDOVRUHÀHFWHGWKHSURPRWLRQRIHQHUJ\VDYLQJDQGGHFDUERQL]DWLRQLQLWLDWLYHVEH\RQGZKDWKDGEHHQQHFHVVDU\WRDFKLHYHLWV
SUHYLRXVDQQXDOUHGXFWLRQWDUJHWRI6RPHRIWKHVHLQLWLDWLYHVDUHRXWOLQHGEHORZ
Going forward, the Group will continue to implement a variety of energy-saving measures, including introducing highly efficient facilities, promoting process
improvements and boosting capacity utilization rates, while at the same time further advancing its use of renewable energy by shifting to biomass and other clean
fuels and installing solar power facilities.

Global CO2 Emissions: Results, Forecasts andTarget for Fiscal Year 2030

-23.6%
from fiscal

Global CO2 Emissions

year 2013

Production volume(Tonnes)

Emissions(Tonnes)
800,000

3,500,000

700,000

3,000,000(Tonnes)

2013

2014

2015

Japan

Americasand Europe

2016

2017

2018

2019

2020 (FY)

800,000
700,000

600,000

600,000
500,000

2,500,000

400,000

500,000
2,000,000

300,000

400,000

200,000

1,500,000
300,000

100,000
1,000,000

200,000
100,000
0

Greater Asia–PacificChinaregionOther

DIC Group Global
overseas DIC Group0

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (FY)

Production
volumeCO2 emissions

Reduction of CO2
emissions (target)-16.9%
from fiscal

Global CO2 Emissions per Unit of Production(Kg)

0

500,000

2013

2014

2015

2016

2017

2018

2019

2020 (FY)-16.9%
from fiscal

Global Energy Consumption

year 2013

year 2013

TJ (Terajoules)
14,000600
500

12,000400

10,000

2013

2014

2015

Japan

Americasand Europe

2016

2017

2018

2019

2020 (FY)

8,000

300

6,000

200

4,000

100

2,000

0
Japan

Americasand Europe

Greater
China

Asia–PacificregionDIC Group
overseas0

GlobalDIC Group

DIC Report 2021

83

Greater Asia–PacificChinaregionOther

DIC Group Global
overseas DIC GroupESH

Factors Contributing to Change in Global CO2 Emissions
Impact on CO2 emissions (tonnes)

Factors

DIC Group overseas

DIC Group in Japan

Decline in production volume
Decrease in incineration of waste oil and waste plastic (particularly at the Chiba Plant and DIC Decor)
Implementation of 468 energy-saving initiatives at sites, including installation of new solar power facilities (1,277 kW)
Decrease attributable to other efforts to increase efficiency
Impact of change in electrical power supplier
Stoppage of cogeneration system at the Gunma Plant
Asia–Pacific region: Decline in production volume (-10.0% from fiscal year 2019)
Asia–Pacific region: Energy-saving initiatives and increased productivity
Asia–Pacific region: Change in product mix and in energy consumption not directly attributable to production
Asia–Pacific region: Other factors
Greater China: Decline in production volume (-4.8% from fiscal year 2019)
Greater China: Energy-saving initiatives and increased productivity
Greater China: Change in product mix and in energy consumption not directly attributable to production
Greater China: Other factors
Sun Chemical Group: Decline in production volume (-3.3% from fiscal year 2019)
Sun Chemical Group: Impact of energy-saving initiatives and increased productivity
Sun Chemical Group: Change in product mix and in energy consumption not directly attributable to production
Sun Chemical Group: Other factors
Other: Changes in energy sources used at two overseas sites (operated by Group companies in the PRC and Taiwan, respectively)
Change in CO2 emissions (tonnes)
Decline in CO2 emissions (%)
CO2 emissions in fiscal year 2019
CO2 emissions in fiscal year 2020

Reduction in Global CO2 Emissions Attributable to
the Use of Renewable Energy-10,852-5,218-4,489-20,745
2,145
-829
2,053
9,501
-994
1,095

-1,954
4,179
1,280
2,531

50,0004.3%
577,057
552,123

13,741

10,00021,971

28,51824,063

5

11,152

27,296

Electric power
generatedusing biomass

433,286403 tonnes

3,574 tonnes

6

12,777

Solar power and others

Solar power

7

10,497

2,531-24,933

2,025 tonnes

11,637-654

Breakdown of Total Reduction in Global CO2 Emissions Attributable to
the Use of Renewable Energy in Fiscal Year 2020 (49,319 Tonnes)

8

20,000- 0. 3%-4,160Wind power

13,390-1,102

1,426

911,946705-2,629(%)

30,000

4 .6%-10,02060,00012,879-26,412

12,746(Tonnes)

40,000Decrease (%)

335,57827,833

2

17,117

7,739 tonnes

1

Decrease in CO2 Emissions
Attributable to the Use ofRenewable Energy (Global)

49,319 tonnes

0

0
2013

2014

2015

Reduction attributable to theuse of heat generated using
renewable energy

2016

2017

2018

Reduction attributable to theuse of electric power generatedusing renewable energy

20192020 (FY)

Total reduction attributable tothe use of renewable energy(Contribution to reduction in CO2 emissions (%))

1RWH)RUPRUHLQIRUPDWLRQRQWKHVH¿JXUHVSOHDVHVHH³5HGXFWLRQLQ*OREDO&2 2 Emissions Attributable toWKH8VHRI5HQHZDEOH(QHUJ\ 7RQQHV ´RQSDJHDIC Report 2021

84

Heat generatedusing biomass

35,578 tonnes

ESH

Reduction in Global CO2 Emissions Attributable to the Use of Renewable Energy (Tonnes/%)

Reduction attributable to the use of heat generatedusing renewable energy
Reduction attributable to the use of electric power
generated using renewable energy
Total reduction attributable to the use ofrenewable energy
Total reduction attributable to the use ofrenewable energy (%)

2013

2014

2015

2016

2017

2018

2019

2020

21,971

28,51824,063

17,117

27,29633,286

27,83335,578

11,037

11,946

13,39010,497

11,152

12,87912,777

13,74133,00840,46437,453

27,61438,44846,166

40,611

49,319

4.4％

5.8%

5.4％

4.0％

5.7％

7.0％

6.6％

8.2%

722,955

657,456

658,811659,378

634,741

617,964

577,057

552,123

2018

2019

2020

Change fromprevious fiscal year

33,286

27,83335,578

27.8%

7,936

7,847

7,739

-1.4%

Reduction attributable to the use of solar power

1,984

2,956

3,574

20.9%

Reduction attributable to the use of wind power

2,690

1,765

2,025

14.7%

Total global CO2 emissions

Reduction attributable to the use of heat generatedusing biomass
Reduction attributable to the use of electric power
generated using biomass

Reduction attributable to the use of small hydroelectric power

270

209

403

92.4%

Total reduction attributable to the use of renewable energy

46,166

40,611

49,31921.4%

2

The use of renewable energy in fiscal year 2020 accounted foran 8.2% reduction in CO2 emissions by the global DIC Group.
This is calculated by dividing the total reduction in CO2 emissions
attributable to the use of renewable energy by the aggregate of global
CO2 emissions plus the total reduction in CO2 emissions attributable
to the use of renewable energy, or 49,319 tonnes / (552,123 tonnes+ 49,319 tonnes).

Energy Consumption and CO2 Emissions by the DIC Group in Japan(QHUJ\FRQVXPSWLRQE\WKH',&*URXSLQ-DSDQ²WKHVLWHVLQ-DSDQRSHUDWHGE\',&DQGGRPHVWLF',&*URXSFRPSDQLHV²LQ¿VFDO\HDUZDVGRZQ
IURP¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU(QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQWRWDOHG*-DQLQFUHDVHRIIURP¿VFDO\HDUEXWDGHFOLQHRIIURPWKHEDVH\HDU&22HPLVVLRQVE\WKH*URXSLQ-DSDQDPRXQWHGWRWRQQHVDGHFUHDVHRIIURP¿VFDO\HDUDQG
IURP¿VFDO\HDUZKLOH&22HPLVVLRQVSHUXQLWRISURGXFWLRQDPRXQWHGWRNJWRQQHGRZQIURP¿VFDO\HDUDQGIURPWKHEDVH\HDU3ULQFLSDOIDFWRUVEHKLQGORZHU&22HPLVVLRQVE\WKH*URXSLQ-DSDQLQFOXGHGDGHFOLQHLQSURGXFWLRQYROXPHDWWULEXWDEOHWRWKH&29,'SDQGHPLFDVZHOODVWKH
LPSOHPHQWDWLRQRIHQHUJ\VDYLQJLQLWLDWLYHVDWVLWHVDQGVWDUWRIRSHUDWLRQVRIVRODUSRZHUIDFLOLWLHVDWVL[VLWHVLQFOXGLQJWKH6DNDL3ODQWZLWKDFRPELQHGDQQXDOJHQHUDWLQJFDSDFLW\RIN:$VRI'HFHPEHUWKHWRWDOJHQHUDWLQJFDSDFLW\RIVRODUSRZHUIDFLOLWLHVDW',&*URXSVLWHVLQ-DSDQZDVN:
2WKHUFRQWULEXWLQJIDFWRUVLQFOXGHGDGHFUHDVHLQWKHLQFLQHUDWLRQRIZDVWHRLODQGZDVWHSODVWLFXVLQJDURWDU\NLOQDWWKH&KLED3ODQWDQGE\*URXSFRPSDQ\',&
Decor, Inc., which resulted in a decline in CO2HPLVVLRQVDWWULEXWDEOHWRWKHLQFLQHUDWLRQRIZDVWHHTXLYDOHQWWRRIWRWDOHPLVVLRQVDWWULEXWDEOHWRWKH*URXSLQ
-DSDQLQ¿VFDO\HDU

Factors Contributing to Change in CO2 Emissions in Japan
Impact on CO2emissions (tonnes)

Factors
Decline in production volume
Decrease in incineration of waste oil and waste plastic (particularly at the Chiba Plant and DIC Decor)
Implementation of 468 energy-saving initiatives at sites, including the expansion of solar power facilities (1,277 kW)
Decrease attributable to other efforts to increase efficiency
Impact of change in electrical power supplier
Stoppage of cogeneration system at the Gunma Plant
Change in CO2 emissions (tonnes)
Decline in CO2 emissions (%)
CO2 emissions in fiscal year 2019
CO2 emissions in fiscal year 2020

Changes in CO2 Emissions, Energy Consumption per Unit of Production
and CO2 Emissions per Unit of Production in Japan Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019

2020 (FY)

120
110
100
90
80
70

80

90

82

60
50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production

DIC Report 2021

85

-10,852-5,218-4,489-20,745
12,7462,145

Impact on CO2emissions (%)
-4.9%
-2.4%
-2.0%
-9.4%
5.8%
1.0%
-26,41212.0%
220,776
194,364

ESH

Renewable Energy as a Percentage of Total Energy Used in Japan: 15.2%
7KHEXONRIUHQHZDEOHHQHUJ\XVHGE\',&*URXSFRPSDQLHVLQ-DSDQLVQDWXUDOHQHUJ\JHQHUDWHGE\DELRPDVVERLOHUDQGZLQGDQGVRODUSRZHUIDFLOLWLHVDWWKH.DVKLPD3ODQW,Q¿VFDO\HDU',&*URXSFRPSDQLHVLQ-DSDQXVHG*-RIUHQHZDEOHHQHUJ\ HTXLYDOHQWWRNORIFUXGHRLO XSIURP¿VFDO\HDUDQGUHSUHVHQWLQJRIWRWDOHQHUJ\ VWHDPDQGHOHFWULFSRZHU FRQVXPHGE\WKHVHFRPSDQLHV7KHLQFUHDVHLQUHQHZDEOH
HQHUJ\XVHZDVDWWULEXWDEOHWRDYDULHW\RIIDFWRUVLQFOXGLQJWKHIDFWWKDWHOHFWULFSRZHUJHQHUDWHGE\WKH.DVKLPD3ODQW¶VZLQGSRZHUV\VWHP WZR
N:±FDSDFLW\ZLQGWXUELQHV IHOOVKDUSO\LQ¿VFDO\HDUDVDUHVXOWRIUHSDLUVZKLFKUHTXLUHGFORVHWRWKUHHPRQWKVWRFRPSOHWHDQGDQLQFUHDVHLQWKH
positive impact of biomass boiler performance.
,Q¿VFDO\HDU',&FRPSOHWHGWKHLQVWDOODWLRQRIQHZVRODUSRZHUIDFLOLWLHVDWVL[VLWHVLQ-DSDQ WKH6DNDLDQG.RPDNLSODQWVWKH&HQWUDO5HVHDUFK/DERUDWRULHVDQG*URXSFRPSDQ\',&.\XVKX3RO\PHU&R/WGDQG*URXSFRPSDQ\',&.LWDQLKRQ3RO\PHU&R/WG¶V+RNNDLGRDQG7RKRNXSODQWV ZLWKDFRPELQHGDQQXDOJHQHUDWLQJFDSDFLW\RIN:$VDFRQVHTXHQFHWKHWRWDOJHQHUDWLQJFDSDFLW\RIVRODUSRZHUIDFLOLWLHVDW',&*URXSVLWHVLQ-DSDQDV
RI'HFHPEHUZDVN:ZKLOHVRODUSRZHUJHQHUDWHGE\WKH',&*URXSLQ-DSDQGXULQJWKHSHULRGURVHWRN:KIURPN:K
LQ¿VFDO\HDU
7KHXVHRIUHQHZDEOHHQHUJ\E\',&*URXSFRPSDQLHVLQ-DSDQLQ¿VFDO\HDUDFFRXQWHGIRUUHGXFWLRQLQ&22HPLVVLRQVRIWRQQHVRU
IURPWKHSUHYLRXV¿VFDO\HDU*RLQJIRUZDUG',&ZLOOFRQWLQXHWRWDNHGHFLVLYHVWHSVWRDGYDQFHLWVXVHRIUHQHZDEOHHQHUJ\ZLWKWKHDLPRIDFKLHYLQJLWV
long-term target for reducing CO2HPLVVLRQVIURP',&*URXSVLWHVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
Breakdown of Reduction in CO2 Emissions in Japan Attributable to
the Use of Renewable Energy in Fiscal Year 2020 (43,526 Tonnes)

Reduction in CO2 Emissions in Japan Attributable to the Use of Renewable Energy(Tonnes)(%)

50,00020

Solar power

45,00018

2,479 tonnes

40,00016

12,24335,00030,00025,00010,616

11,46011,773
12,941

10,46520,00015,00010,000
5,000
0

2013

2014

Reduction attributable to theuse of heat generated using
renewable energy

15,093

2015

2016

Electric power
generatedusing biomass

10
8

9,988
21,937 24,788 20,412

14
12

11,453

20,471

24,921Wind power

2,025 tonnes

31,283
20,694

7,739 tonnes

6

Decrease in CO2 Emissions
Attributable to the Use ofRenewable Energy (Japan)

43,526 tonnes

4
2

2017

Reduction attributable to theuse of electric power generatedusing renewable energy

2018

2019

2020 (FY)0

Total reduction attributable tothe use of renewable energy(Contribution to reduction in CO2 emissions (%))

Heat generatedusing biomass

31,283 tonnes

1RWH)RUPRUHLQIRUPDWLRQRQWKHVH¿JXUHVSOHDVHVHH³5HGXFWLRQLQ&2 2(PLVVLRQVLQ-DSDQ$WWULEXWDEOHWRWKH8VHRI5HQHZDEOH(QHUJ\ 7RQQHV ´EHORZReduction in CO2 Emissions in Japan Attributable to the Use of Renewable Energy (Tonnes/%)

Reduction attributable to the use of heat generatedusing renewable energy
Reduction attributable to the use of electric power
generated using renewable energy

2013

2014

2015

2016

2017

2018

2019

2020

21,937

24,78820,412

15,093

20,471

24,921

20,69431,283

10,616

11,46012,941

9,988

10,465

11,773

11,453

12,243

Total reduction attributable to the use of renewable energy

32,552

36,24833,35325,08130,936

36,69332,146

43,526

Total reduction attributable to the use of renewable energy (%)

11.8%

12.4%

11.7%

9.4%

11.2%

13.7%

12.7%

18.3%

244,377

255,114250,720

242,194

244,395

231,820

220,776

194,364

2018

2019

2020

Change fromprevious fiscal year

Total CO2 emissions by the DIC Group in Japan

Reduction attributable to the use of heat generated using biomass

24,921

20,69431,283

51.2%

Reduction attributable to the use of electric power
generated using biomass

7,936

7,847

7,739

-1.4%

Reduction attributable to the use of solar power

1,147

1,840

2,479

34.7%

Reduction attributable to the use of wind power

2,690

1,765

2,025

14.7%

0

0

0

36,69332,146

43,526

Reduction attributable to the use of small hydroelectric power
Total reduction attributable to the use of renewable energy

DIC Report 2021

86

‒
35.4%

The use of renewable energy in fiscal year 2020 accounted foran 18.3% reduction in CO2 emissions by the DIC Group in Japan.
This is calculated by dividing the total reduction in CO2 emissions
attributable to the use of renewable energy by the aggregate of CO2
emissions in Japan plus the total reduction in CO2 emissions attributable
to the use of renewable energy, or 43,526 tonnes / (194,364 tonnes+ 43,526 tonnes).

ESH

Up to and including
fiscal year 2017
Biomass boiler(wood chip–fired)Kashima Plant

Hokuriku Plant

・Steam produced: Maximum of 30 tonnes/hour

・ Steam produced: Maximum of 2.5
tonnes/hour
・ All steam produced used in
production processes

・Heat generated in fiscal year 2020:
451,000 GJ (generated using heat: 75%; ・Approximately 70% of steam generated
used in production processes
generated using electric power: 25%)
・Electric power generating capacity ・Remainder of steam produced used to power turbine
in fiscal year 2020: Approx. 4,000 kW
generating electric power for internal consumption(electric power generated: 15,478,000 kWh)・Generating capacity: 4,000 kW

Wind power

Fiscal year 2018

Fiscal year 2020

-

-

-

-

・ No electric power generating function
・ Commenced operation in January 2018

Kashima Plant

・Generating capacity: 4,600 kW
Electric power generating capacity in・Facility: Two 2,300 kW–capacity wind turbines
fiscal year 2020: Approx. 4,600 kW(electric power generated: 4,050,000 kWh)-

Tatebayashi Plant

Kashima Plant

Kashima Plant

・Generating capacity: 1,600 kW
・Number of panels: 5,588 (each 278 W)
・Commenced operation in January 2018

・Generating capacity: 100 kW

Solar power

Fiscal year 2019

DIC Decor

Electric power generating capacity in ・Generating capacity: 20 kW
fiscal year 2020: Approx. 4,341 kW(electric power generated: 4,619,000 kWh)

Sakai Plant

・Generating capacity: 325 kW・Generating capacity: 1,250 kW

DIC Kyushu Polymer

Chiba Plant

・Generating capacity: 310 kW

・Generating capacity: 100 kW

DIC Kitanihon Polymer (Hokkaido Plant)

Central Research Laboratories

・Generating capacity: 250 kW

Saitama Plant

・Generating capacity: 200 kW

・Generating capacity: 40 kW
・Generating capacity: 30 kW

Yokkaichi Plant

・Generating capacity: 20 kW

DIC Kitanihon Polymer (Tohoku Plant)

Total: 1,440 kW

Komaki Plant

・Generating capacity: 132 kW

Note: All facilities commenced
operation in January 2019.

Central Research Laboratories

・Generating capacity: 60 kW

Total: 1,277 kW

Note: All facilities commenced
operation in January 2020.

Installation of Solar Power Facilities in Japan(Fiscal Years 2018–2020)
Installed: Fiscal year 2017
(Start of operation: Fiscal year 2018)

1,600 kWInstalled: Fiscal year 2018
(Start of operation: Fiscal year 2019)

1,440 kWInstalled: Fiscal year 2019
(Start of operation: Fiscal year 2020)

1,277 kW

Tatebayashi Plant(Location: Idle land; capacity: 1,250 kW)

DIC Kitanihon Polymer(Hokkaido Plant)(Location: Idle land; capacity: 250 kW)

DIC Kitanihon Polymer(Tohoku Plant)(Location: Idle land; capacity: 200 kW)

Saitama Plant(Location: New administrative building;capacity: 30 kW)

Komaki Plant(Location: Idle land; capacity: 120 kW)

Kashima Plant(Location: Idle land;
capacity: 1,600 kW)

DIC Kyushu Polymer(Location: Idle land; capacity:
309.5 kW)

Chiba Plant(Location: Laboratory roof;
capacity: 100 kW)

Central Research Laboratories(Location: Laboratory roofs;
capacity: 60 kW)

Yokkaichi Plant(Location: New administrative building;capacity: 20 kW)
Sakai Plant(Location: Warehouse roof; capacity: 324.8 kW(for charging EVs)DIC Report 2021

87

Central Research Laboratories(Location: Laboratory roofs;
capacity: 40 kW)

ESH

Solar Power Facilities Installed in Japan in Fiscal Year 2020
Sakai Plant
Location: Warehouse roof
Panels: 1,058
Generating capacity: 325 kW
Start of operation: January 2020

DIC Kyushu Polymer
Location: Idle land
Panels: 1,008
Generating capacity: 310 kW
Start of operation: January 2020

Building No. 6

Building No. 3

Central Research Laboratories
Location: Laboratory 3 and 6 roofs
Panels: 216
Generating capacity: 60 kW
Start of operation: January 2020

Komaki Plant
Location: North of the plant parking lot
Panels: 429
Generating capacity: 132 kW
Start of operation: January 2020

Warehouse 1

288 panels

216 panels

Warehouse 6

DIC Kitanihon Polymer (Hokkaido Plant)
Location: Idle land
Panels: 819
Generating capacity: 250 kW
Start of operation: January 2020

③180 panels②180 panels
144 panels
Warehouse 4
DIC Kitanihon Polymer (Tohoku Plant)
Location: Warehouse roofs
Panels: 720
Generating capacity: 200 kW
Start of operation: January 2020

Warehouse 972 panels①69 panels

3 Independent Electric Power Generation in Japan,Q¿VFDO\HDUHOHFWULFSRZHUFRQVXPSWLRQE\WKH',&*URXSLQ-DSDQGHFOLQHGWRN:KDSSUR[LPDWHO\RIZKLFKZDVJHQHUDWHGLQGHSHQGHQWO\ZLWKWKDWJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\DFFRXQWLQJIRUDQGWKDWJHQHUDWHGXVLQJFRJHQHUDWLRQV\VWHPVUHSUHVHQWLQJ'HVSLWHDQLQFUHDVHLQLQGHSHQGHQWO\JHQHUDWHGVRODUSRZHUWRWDOLQGHSHQGHQWO\JHQHUDWHGSRZHUHGJHGGRZQRZLQJWRWKHWHPSRUDU\VWRSSDJHRIWKH*XQPD3ODQW¶VFRJHQHUDWLRQV\VWHPElectric Power Used by the DIC Group in Japan by Energy Source(Thousand kWh)

300,000

Electric power generatedusing renewable energy
200,000

9%
Electric power generated
through cogeneration

16%

100,000

Purchased electric power

Breakdown ofElectric Power Used by
the DIC Group in Japanin Fiscal Year 2020
by Energy Source

75%
0

2013

2014

2015

2016

2017

2018

2019

2020（FY）

Electric power generated using renewable energy (e.g., solar power and wind power)
Electric power generated through cogeneration
Purchased electric power| DIC Wins New Energy Foundation Chairman’s Award in the Adoption and Application Category of the 2018 New Energy Awards,Q'HFHPEHU',&ZRQD1HZ(QHUJ\)RXQGDWLRQ&KDLUPDQ¶V$ZDUGLQWKH$GRSWLRQDQG$SSOLFDWLRQ&DWHJRU\RIWKH1HZ(QHUJ\$ZDUGVLQUHFRJQLWLRQRIWKHH[SDQGHGXVHRIUHQHZDEOHHQHUJ\DWWKH.DVKLPD3ODQW7KHDZDUGVSURJUDPZKLFKZDVSUHVHQWHGE\WKH1HZ(QHUJ\)RXQGDWLRQZDV
established with the aim of encouraging the introduction of new energy and promoting awareness by commending particularly excellent initiatives.
7KH.DVKLPD3ODQWKDVLQVWDOOHGPXOWLSOHUHQHZDEOHHQHUJ\±SRZHUHGJHQHUDWLQJIDFLOLWLHVLQFOXGLQJELRPDVVDQGPHWKDQHJDVERLOHUVDVZHOODVZLQG
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energy. These facilities also contributed to a reduction in annual CO 2HPLVVLRQVLQILVFDO\HDURIPRUHWKDQWRQQHV/RRNLQJDKHDGWKH
GHSDUWPHQWUHVSRQVLEOHIRUWKHSODQW¶VHQHUJ\VXSSO\ZLOOFRQWLQXHZRUNLQJWRHQKDQFHWKHFRPEXVWLRQHI¿FLHQF\RIJHQHUDWLQJIDFLOLWLHVLQFOXGLQJELRPDVVand methane gas boilers, by upgrading maintenance and management technologies and accumulating know-how.
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LQ-DSDQDQGRYHUVHDVZLWKWKHDLPRILQFUHDVLQJLWVXVHRIUHQHZDEOHHQHUJ\DQGUHGXFLQJLWVHPLVVLRQVRIJUHHQKRXVHJDVHVDURXQGWKHZRUOGDIC Report 2021

88

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Reductions in Annual CO2 Emissions Attributable to the Use of Renewable Energy at the Kashima Plant
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WKHWK0HHWLQJRIWKH3DUWLHVLQ.LJDOL5ZDQGDKHOGLQ2FWREHUWKH3DUWLHVWRWKH0RQWUHDO3URWRFRORQ6XEVWDQFHVWKDW'HSOHWHWKH2]RQH/D\HUUHDFKHG
DQDJUHHPHQWWRSKDVHRXWWKHSURGXFWLRQDQGXVHRI+)&V WKH.LJDOL$PHQGPHQW -DSDQVXEVHTXHQWO\DPHQGHGLWV$FWRQWKH3URWHFWLRQRIWKH2]RQH/D\HU
7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHVLQOLQHZLWKWKHDPHQGPHQWZKLFKDVRI2FWREHUKDGEHHQUDWL¿HGE\3DUWLHV +DYLQJ
VXUSDVVHGWKHFRQGLWLRQRIUDWL¿FDWLRQE\DWOHDVW3DUWLHVWKH.LJDOL$PHQGPHQWHQWHUHGLQWRIRUFHRQ-DQXDU\
,Q$SULO-DSDQDOVRUHYLVHGLWV)OXRURFDUERQV5HFRYHU\DQG'HVWUXFWLRQ/DZ7KHVDPHPRQWKWKH$FWRQ5DWLRQDO8VHDQG3URSHU0DQDJHPHQWRI)OXRURFDUERQVHQWHUHGLQWRIRUFHFRPSHOOLQJVWDNHKROGHUVWRDVFHUWDLQDQG
Leaked Fluorocarbons by the DIC Group in Japan (CO2 Equivalent)
UHSRUWOHDNVRIÀXRURFDUERQVIURPFRPPHUFLDOHTXLSPHQWDQGIDFLOLWLHV
(Tonnes of CO )(%)
,Q¿VFDO\HDUOHDNHGÀXRURFDUERQVIURP',&VLWHVZHUHHTXLYDOHQWWR
1,000
200
WRQQHVRICO2 /HDNVLQH[FHVVRIWRQQHVSHUVLWHRUSHUFRPSDQ\
900
180
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800
160
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700
140
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600120
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500
100ZHUHORZHUWKDQLQDQDYHUDJH\HDUDVDFRQVHTXHQFHRIWKHUHSODFHPHQW
400
80
RIIHZHUFKLOOHUV /HDNHGIOXRURFDUERQVDUHFDOFXODWHGDVWKHGLIIHUHQFH
30060
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20
not negatively impact the environment with the aim of reducing the amount of
0
0
2015
2017
2018
2019
2020 (FY)2016
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2

DIC

DIC Group companies in Japan

Change from fiscal year 2015

5 Energy Consumption and CO2 Emissions by the DIC Group Overseas

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IURPWKH¿VFDO\HDUEDVH\HDUZKLOH&22HPLVVLRQVSHUXQLWRISURGXFWLRQURVHEXWZHUHGRZQIURP¿VFDO\HDU(QHUJ\FRQVXPSWLRQHGJHGXSEXWGHFOLQHGIURPWKHEDVH\HDU)DFWRUVFRQWULEXWLQJWRWKHLQFUHDVHLQ&22HPLVVLRQVLQFOXGHGWKHIDFWWKDWHIIRUWVE\LQGLYLGXDO',&*URXSFRPSDQLHVWREUHDNGRZQWKH*URXS¶VHPLVVLRQVUHGXFWLRQWDUJHWVDQGSURPRWHGHFDUERQL]DWLRQLQLWLDWLYHVZHUHFRXQWHUHGE\WKHLQFOXVLRQEHJLQQLQJLQ¿VFDO\HDURISURGXFWLRQIDFLOLWLHVRSHUDWHGE\DI¿OLDWHVLQWKH35&DQG7DLZDQChanges in CO2 Emissions, Energy Consumption per Unit of Production
and CO2 Emissions per Unit of Production Overseas Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019

2020 (FY)120

CO2 Emissions by Region
2013(Tonnes)

2014

2015

2016

2017

2018

2019

2020 (FY)

300,000

110

250,000

100

200,00090
150,000
80

93

70

100,000

86

75

60

50,000050
CO 2 emissions

Energy consumption
per unit of production

CO 2 emissions
per unit of production

Americas and Europe

DIC Report 2021

89

Greater China

Asia–Pacific region

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wherever it is active and in so doing sets precedents for the global chemicals industry. DIC Group companies overseas continue to implement a broad range ofenergy-saving initiatives, including improving production efficiency, reducing base load energy consumption, choosing high-efficiency models when replacing
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As part of its effort to ensure achievement of the CO2HPLVVLRQVWDUJHWVHWIRUWKHJOREDO',&*URXSFRUSRUDWHKHDGTXDUWHUVDVVLVWVUHJLRQDO*URXSFRPSDQLHVE\IRUPXODWLQJDQGLPSOHPHQWLQJHQHUJ\VDYLQJSODQVSURPRWLQJRQJRLQJHQHUJ\VDYLQJDQDO\VHVWRVXSSRUWWKHLGHQWL¿FDWLRQRIHQHUJ\VDYLQJWKHPHVDQGWKH
implementation of remedial measures; deploying a practical energy management manual and best practice case study materials to establish management practices
and promote horizontal deployment; and launching and providing support for energy-saving and carbon-reduction projects at suitable sites.
Changes in CO2 Emissions, Energy Consumption per Unit of Production and
CO2 Emissions per Unit of Production in the Asia–Pacific Region Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019

2020 (FY)

120
110
100
90

109

80

98

93

70
60
50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production*UHDWHU&KLQD
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Changes in CO2 Emissions, Energy Consumption per Unit of Production
and CO2 Emissions per Unit of Production in Greater China Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019

2020 (FY)

120
110
100
90
80

94

70

102

92

60
50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production

DIC Report 2021

90

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to advance the reduction of energy consumption, and promoting the integration of production facilities alongside measures to boost production
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,QILVFDO\HDUWKH*URXS¶VUHJLRQDOKHDGTXDUWHUV6XQ&KHPLFDOLQVWDOOHGVRODUSRZHUIDFLOLWLHVZLWKDQDQQXDOJHQHUDWLQJFDSDFLW\RIDSSUR[LPDWHO\N:ZLWKWKHJRDORIH[SDQGLQJLWVXVHRIUHQHZDEOHHQHUJ\*RLQJIRUZDUGFRPSDQLHVLQWKH$PHULFDVDQG(XURSHZLOOFRQWLQXH
to implement ambitious initiatives that contribute to the reduction of its global CO2 emissions.
Changes in CO2 Emissions, Energy Consumption per Unit of
Production and CO2 Emissions per Unit of Production in theAmericas and Europe Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019

2020 (FY)

120
110
100
90
80
70

72

60

83

76

50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production| Sun Chemical’s Approach to Sustainability
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awareness of environmental impact. The company strives to use manufacturing processes that demonstrate environmental excellence throughreduced waste generation, lower energy and water use, and a strong safety performance as measured using key metrics such as greenhouse
JDVHPLVVLRQVHQHUJ\DQGZDWHUFRQVXPSWLRQFDUERQIRRWSULQWDQGVDIHW\UHFRUG6XQ&KHPLFDOLVDOVRFRPPLWWHGWRPHHWLQJORFDOUHJXODWRU\UHTXLUHPHQWVLQWKHFRXQWULHVDQGWHUULWRULHVLQZKLFKLWRSHUDWHVDQGWRZRUNLQJSURDFWLYHO\ZLWKJRYHUQPHQWLQGXVWU\RUJDQL]DWLRQVDQGEXVLQHVVSDUWQHUVLQLWVYDOXHFKDLQWREHWWHUGH¿QHPHDVXUHDQGSURPRWHVXVWDLQDELOLW\3URGXFWVWHZDUGVKLSDQGULVNPDQDJHPHQWDUHLPSRUWDQWFRPSRQHQWVRI6XQ&KHPLFDO¶VVXVWDLQDELOLW\SROLF\7KHFRPSDQ\FRQWLQXHVWRWDNHDUHVSRQVLEOHDQDO\WLFDOO\EDVHGDSSURDFKWRIXO¿OOLQJLWVUROHDVDVWHDGIDVWOHDGHULQWKLVDUHD7KURXJKVXFKRQJRLQJHIIRUWVWKHFRPSDQ\LQFUHDVHVHQYLURQPHQWDOHI¿FLHQF\E\KHOSLQJLWVFXVWRPHUVHQKDQFHWKHVXVWDLQDELOLW\RIWKHLUPDQXIDFWXULQJSURFHVVHVDQGSURGXFWV6XQ&KHPLFDO¶VORQJ
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strategic direction.
$ORQJZLWK',&6XQ&KHPLFDOKDVFRPPLWWHGWRDORQJWHUPVWUDWHJLFWDUJHWIRU&22HPLVVLRQVZKLFKLVWRDFKLHYHDUHGXFWLRQRIDWOHDVW
E\¿VFDO\HDUZLWK¿VFDO\HDUDVWKHEDVH\HDUIROORZLQJWKH3DULV$JUHHPHQWZKLFKVXFFHHGHGWKH.\RWR3URWRFRO ± DVWKH
global framework for addressing the challenge of dealing with greenhouse gas emissions. This level, if implemented across all industries, would limit
WKHLQFUHDVHLQJOREDODYHUDJHWHPSHUDWXUHGXHWRFOLPDWHFKDQJHWREHORZ&DERYHSUHLQGXVWULDOOHYHOV7RDFKLHYHWKLVWDUJHW6XQ&KHPLFDOZLOOIRFXVRQLQYHVWPHQWVLQVXVWDLQDEOHHQHUJ\DVZHOODVRQPHDVXUHVWRLPSURYHWKHHI¿FLHQF\RILWVPDQXIDFWXULQJSURFHVVHV| Adoption of Renewable Energy by DIC Group Companies Overseas
Against a global trend toward decarbonization, DIC Group companies overseas are working to popularize the use of renewable energy. Companies
LQWKH$VLD±3DFL¿FUHJLRQ*UHDWHU&KLQDDQGWKH$PHULFDVDQG(XURSHDUHPDNLQJXVHRIJRYHUQPHQWVXEVLGLHVDQGVXSSRUWWRIRUH[DPSOHLQVWDOOELRPDVVERLOHUVDQGVRODUSRZHUIDFLOLWLHV,Q¿VFDO\HDUQHZVRODUSRZHUIDFLOLWLHVZLWKDFRPELQHGDQQXDOJHQHUDWLQJFDSDFLW\RIN:
FRPPHQFHGRSHUDWLRQ$VRI-DQXDU\WKH*URXS¶VJOREDOVRODUSRZHUJHQHUDWLQJFDSDFLW\ IRULQWHUQDOFRQVXPSWLRQ ZDVN:FRPSULVLQJN:LQ-DSDQDQGN:RYHUVHDV7KH',&*URXSZLOOFRQWLQXHWRSURPRWHHIIRUWVWRH[SDQGLWVVRODUSRZHUJHQHUDWLQJIDFLOLWLHVZRUOGZLGH,Q¿VFDO\HDUWKH*URXSSODQVWRLQVWDOOQHZVRODUSRZHUJHQHUDWLQJIDFLOLWLHVZLWKDWRWDOJHQHUDWLQJFDSDFLW\RI0:ZRUOGZLGH,Q¿VFDO\HDUWKHJOREDO',&*URXSXVHGDWRWDORI*-RIUHQHZDEOHHQHUJ\DQLQFUHDVHRIIURP*-LQ¿VFDO\HDU7KHXVHRIUHQHZDEOHHQHUJ\DFFRXQWHGIRUDUHGXFWLRQLQWKH*URXS¶VJOREDO&22HPLVVLRQVRIWRQQHVDIC Report 2021

91

ESH

The DIC Group’s Global Solar Power Generating Capacity in Fiscal Year 2020(For Internal Consumption)

2,500
1,277
2,240

300

1,128
300

2016

2017

1,500
1,428

2,928

2018

2019

Capacity as of the end of the previous fiscal year

5,168

2020

6,445

(Thousands of GJ)

10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

As of January

DIC Group Overseas

DIC Group in Japan

13,00013,00011,00011,000

9,000

9,000

(Thousands of GJ)(kW)

Energy Mix

7,000

5,000

7,000

5,000

2021
3,000

3,000

1,000

1,000

Capacity added during the fiscal year

-1,0002013 2014 2015 2016 2017 2018 2019 2020

-1,000(FY)2013 2014 2015 2016 2017 2018 2019 2020 (FY)

Purchased electric power

Purchased heat (steam + cold/hot water)

Purchased electric power

Purchased heat (steam + cold/hot water)

Natural gas

Petroleum-based fuels

Natural gas

Petroleum-based fuels

Coal

Renewable energy (heat)

Coal

Renewable energy (heat)

Renewable energy (electric power)

Renewable energy (electric power)| ,QLWLDWLYHVLQ$UHDV2WKHUWKDQ3URGXFWLRQ 2IÀFHVDQG5HVHDUFK)DFLOLWLHV,QILVFDO\HDUHQHUJ\FRQVXPHGE\WKH',&*URXS¶VSURGXFWLRQDQGUHVHDUFKVLWHVLQ-DSDQ H[FOXGLQJWKH&HQWUDO5HVHDUFK/DERUDWRULHV GHFOLQHG2ISDUWLFXODUQRWH',&¶VKHDGTXDUWHUVWKHPRVWHQHUJ\LQWHQVLYHRIWKHGRPHVWLFVLWHVDFKLHYHGDGHFUHDVH
RI3ULQFLSDOHQHUJ\VDYLQJLQLWLDWLYHVLPSOHPHQWHGLQFOXGHUHSODFLQJDJHGOLJKW¿[WXUHVDQGDLUFRQGLWLRQLQJHTXLSPHQWZLWKQHZHUKLJKHI¿FLHQF\PRGHOVWKDWVDWLVI\VWDQGDUGVVHWE\WKH(QHUJ\&RQVHUYDWLRQ&HQWHU-DSDQ (&&- IRULWV7RS5XQQHUSURJUDPWXUQLQJRIIOLJKWVZKHQQRWQHHGHGDQGLPSOHPHQWLQJPDQGDWRU\&ZLQWHUDQG&VXPPHUDLUFRQGLWLRQLQJVHWWLQJVZRUNLQJZLWKIDFLOLW\PDQDJHPHQWFRPSDQLHVWR
LPSOHPHQWGLOLJHQWHQHUJ\VDYLQJPHDVXUHVDQGSURPRWLQJHIIRUWVLQOLQHZLWK-DSDQ¶V&RRO%L]DQG:DUP%L]FDPSDLJQV

CO2 Emissions (Including Scope 3) in Fiscal Year 2020

| Grasping CO2 Emissions Across the Supply Chain
Regarding CO 2 HPLVVLRQV DFURVV LWV VXSSO\ FKDLQ 6FRSH  
HPLVVLRQV  LQ ILVFDO \HDU  ',& SDUWLFLSDWHG LQ D OHFWXUH RQ
WKH6FLHQFH%DVHG7DUJHWV 6%7 LQLWLDWLYHRUJDQL]HGE\-DSDQ¶V
0LQLVWU\RIWKH(QYLURQPHQW$VDFRQVHTXHQFH',&QRZUHSRUWVJOREDOGDWDIRUDOOFDWHJRULHVRI6FRSH7KH&RPSDQ\DOVRREWDLQVWKLUGSDUW\YHUL¿FDWLRQIRULWVGDWDIRUZDVWHJHQHUDWHGLQRSHUDWLRQV6FRSHHPLVVLRQVDUHLQGLUHFWHPLVVLRQVIURPSURGXFWLRQWUDQVSRUWEXVLQHVVWUDYHO
commuting and other activities in the supply chain.

7.3%
0.1%
0.3%
0.7%
1.9%
2.4%
3.5%

40.7%
9.5%
CO2 Emissions
by the DIC Group(Including Scope 3)

33.6%(Total 3,369,193 tonnes)

DIC Report 2021

92

Purchased goods and services
End-of-life treatment of sold goods
Capital goods
Upstream transportation and distribution
Waste generated in operations
Fuel- and energy-related activities(not included in Scope 1 or 2)
Employee commuting
Business travel
Scope 1
Scope 2

ESH

Preventing Environmental Pollution
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Goal for fiscal year 2020

Achievement in fiscal year 2020

Reduce VOC emissions into the air.

DIC Group (Japan): 345 tonnes (essentially level with fiscal year 2019)

DIC Group (Japan): 327 tonnes

Evaluation

Goal for fiscal year 2021★★

DIC Group (Japan): 345 tonnes (essentially level with fiscal year 2020)| Policies and Organization

Basic Approach
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HQYLURQPHQWDOIRRWSULQW7KH*URXSDOVRDGYDQFHVHIIRUWVDLPHGDWSUHYHQWLQJHQYLURQPHQWDOSROOXWLRQ
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5DWLRQDO8VHDQG3URSHU0DQDJHPHQWRI)OXRURFDUERQVDQGWKH/DZ&RQFHUQLQJ6SHFLDO0HDVXUHVIRU3URPRWLRQRI3URSHU7UHDWPHQWRI3&%:DVWHV²DQGRIVXEVWDQFHVWDUJHWHG
XQGHUDYROXQWDU\VFKHPHFUHDWHGE\WKH-&,$ 2WKHU',&*URXSFRPSDQLHVLQ-DSDQKDYHGRQHWKHVDPHVLQFH¿VFDO\HDU
7KH-&,$LVDJHQHUDOLQFRUSRUDWHGDVVRFLDWLRQ$VRQHRI-DSDQ¶VPDMRULQGXVWU\RUJDQL]DWLRQVWKH-&,$LVDPHPEHURIWKH,&&$DQGSXUVXHVWKHKHDOWK\GHYHORSPHQWRIWKHFKHPLFDOLQGXVWU\ZLWKRWKHUFKHPLFDO±LQGXVWULDORUJDQL]DWLRQVDURXQGWKHZRUOG| Framework for Promotion
7KHFKDLURIWKH6XVWDLQDELOLW\&RPPLWWHH SUHVLGHQWDQG&(2 RYHUVHHVWKHSODQQLQJDQGSURPRWLRQRIHQYLURQPHQWDOFRQVHUYDWLRQLQLWLDWLYHVE\WKH5HVSRQVLEOH&DUH'HSDUWPHQWDQGSURGXFWLRQDQG5 'VLWH6DIHW\DQG(QYLURQPHQWJURXSV7RHQVXUHFRPSOLDQFHZLWKSHUWLQHQWODZVDQGUHJXODWLRQVWKH5HVSRQVLEOH&DUH'HSDUWPHQWPRQLWRUVOHJDODQGUHJXODWRU\WUHQGVZRUOGZLGHWRHQVXUHVLWHVDUHDEOHWRFRPSO\SURPSWO\DQGHIIHFWLYHO\| Principal Initiatives in Fiscal Year 2020
1 Reducing Emissions of VOCs
+DYLQJVXFFHHGHGLQDFKLHYLQJDYROXQWDU\WDUJHW²VHWLQ¿VFDO\HDU²IRUUHGXFLQJHPLVVLRQVRI92&VLQWRWKHDLURIIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU',&*URXSFRPSDQLHVLQ-DSDQFRQWLQXHWRSXUVXHVWHDG\DQQXDOUHGXFWLRQWKURXJKIDFLOLW\LPSURYHPHQWVDQG
HPLVVLRQVPDQDJHPHQW
,Q¿VFDO\HDU',&UHSRUWHGHPLVVLRQVRI92&VRIWRQQHVDGHFUHDVHIURP¿VFDO\HDU)DFWRUVEHKLQGWKLVUHVXOWLQFOXGHGWKHDEVHQFH
RIDQDFFLGHQWLQYROYLQJDZDUHKRXVH¿UHDWWKH6DLWDPD3ODQWZKLFKKDGFDXVHGDVKDUSLQFUHDVHLQHPLVVLRQVLQWKHSUHYLRXVSHULRGDQGDGHFUHDVHLQSURGXFWLRQDFWLYLWLHVRZLQJWR&29,'$VDFRQVHTXHQFHWRWDOHPLVVLRQVRI92&VE\WKH',&*URXSLQ-DSDQDPRXQWHGWRWRQQHVGRZQIURP¿VFDO\HDU2YHUVHDV*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFRQWLQXHGWRSURPRWHHIIRUWVWRUHGXFHHPLVVLRQV,QWKH35&
LQSDUWLFXODUWKH*URXSLVXSGDWLQJHTXLSPHQWDQGVWHSSLQJXSHPLVVLRQVPDQDJHPHQWSUDFWLFHVLQUHVSRQVHWRWKHWLJKWHQLQJRISHUWLQHQWORFDOUHJXODWLRQVEmissions of Targeted Chemical Substances into the Air
6XEVWDQFHV,QFOXGLQJWKRVH'HVLJQDWHGE\-DSDQ·V3575 DQG2QH6XEVWDQFH*URXS 2)

Emissions of VOCs into the Air in Fiscal
Year 2020（Tonnes）
1,000

00
DIC

13

15

16

17

19

DIC Group (Japan)

-56％

327

162

541

18

371

366

192

371

177

385

189

382

354

14

208

0

189

466
261

500

561

DIC

20

IURPÀVFDO\HDU

-40％
IURPÀVFDO\HDU(FY)

DIC Group (Japan)

 $ 3575 LV D VFKHPH IRU DVVHVVLQJ DJJUHJDWLQJ DQG GLVVHPLQDWLQJ GDWD RQ WKH VRXUFH RI KD]DUGRXV FKHPLFDOV DPRXQWV UHOHDVHG LQWR WKH HQYLURQPHQW DQG DPRXQWVWUDQVIHUUHGRIIVLWHIURPLQGXVWULDOHVWDEOLVKPHQWVYLDZDVWHSURGXFWV7KH³VXEVWDQFHVDQGRQHVXEVWDQFHJURXS´FRPSULVHVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\-DSDQ¶V3575DQG3575GHVLJQDWHGVXEVWDQFHV RWKHUWKDQFODVV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGIRUVWXG\E\WKH-&,$

DIC Report 2021

93

ESH

,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQPRQLWRUHGGLVFKDUJHVRIFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\WKHFRXQWU\¶V3575DQG3575
GHVLJQDWHGFKHPLFDOVXEVWDQFHV RWKHUWKDQFODVV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGIRUVWXG\E\WKH-&,$
'XULQJWKHSHULRG',&DQGWKH',&*URXSLQ-DSDQXVHGDQGRUSURGXFHGDQGRIWKHVHVXEVWDQFHVUHVSHFWLYHO\LQXQLWVH[FHHGLQJWRQQH
Number of Targeted Chemical Substances Used
and/or Produced in Japan in Amounts Exceeding7RQQHLQ)LVFDO<HDUDIC

DIC Group (Japan)

112

130

Targeted Chemical Substances for Which Emissions([FHHGHG7RQQHVLQ)LVFDO<HDU

Substance(WK\ODFHWDWH
Toluene0HWK\OHWK\ONHWRQH
AcetoneEnvironmental Emissions of Targeted Chemical Substances6XEVWDQFHV,QFOXGLQJWKRVH'HVLJQDWHGE\-DSDQ·V
3575DQG2QH6XEVWDQFH*URXS LQ-DSDQLQ)LVFDO<HDUDIC

6W\UHQH
3URS\ODOFRKRODIC Group(Japan)NPHWK\OS\UUROLGRQH%XW\ODFHWDWHEmissions into the air

162 tonnes 327 tonnes
Emissions into water
25 tonnes
27 tonnes
Emissions into soil
0 tonnes
0 tonnes
Total
187 tonnes 354 tonnes

DIC

DIC Group (Japan)

Emissions
into the environment

Emissions
into the environment

57 tonnes
3 tonnes
122 tonnes
0 tonnes
11 tonnes
32 tonnes
7 tonnes
6 tonnes

102 tonnes
17 tonnes
130 tonnes
11 tonnes
11 tonnes
40 tonnes
32 tonnes
32 tonnes

2 5HGXFLQJ62[12[DQG&2'

DIC

DIC Group (Japan)

DIC Report 2021

94

723

570

850

697

810

675

571

783

831

590

655

530

527

745

844

7DNLQJ¿VFDO\HDUDVWKHEDVH\HDU',&*URXSFRPSDQLHVLQ-DSDQKDYHZRUNHGWRUHGXFHVXOIXUR[LGH 62[ DQGQLWURJHQR[LGH 12[ HPLVVLRQV²NH\FDXVHVRIDFLGUDLQ²IURPERLOHUV7KH*URXSKDVDOVRZRUNHGWRUHGXFHFKHPLFDOR[\JHQGHPDQG &2' DQLQGLFDWRURI
WKHTXDOLW\RIZDVWHZDWHU,Q¿VFDO\HDU',&¶VHPLVVLRQVRI62[DQG12[LQFUHDVHGZLWKWKHIRUPHUGRXEOLQJWRWRQQHVDQGWKH
ODWWHUULVLQJWRWRQQHV$VDFRQVHTXHQFHHPLVVLRQV RI 62[ DQG 12[ E\ WKH ',& *URXS LQ SOx and NOx Emissions Volumes in Japan（Tonnes）
300-DSDQ ZHUH  WRQQHV XS  DQG  WRQQHV204
202 183
185
186
182
202
OHYHOZLWK¿VFDO\HDUUHVSHFWLYHO\',&¶V&2'
177
200
156
168
142
147
137
127
GHFUHDVHG  WR  WRQQHV ZKLOH WKDW RI WKH
144
155
100
36 46
35 38
33 42
',& *URXS LQ -DSDQ IHOO  WR  WRQQHV DV
8 12
4 12
10 14
2 8
0
&29,' SXVKHG GRZQ SURGXFWLRQ YROXPH 7KH
90
14
15
16
17
18
19
20 (FY)*URXSZLOOFRQWLQXHWDNLQJVWHSVWRUHGXFH&2'E\SOx emissions
DIC
DIC Group (Japan)
HQKDQFLQJZDWHUTXDOLW\PDQDJHPHQWNOx emissions
DIC
DIC Group (Japan)
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16
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Dioxins Concentrations in Waste Gas and Wastewater Emissions from DIC Group Incinerators in Japan
Waste gas

Wastewater

Site

6FDOHRIIDFLOLW\(Incinerating
FDSDFLW\

Standard(ng-TEC/Nm3)

Emissions reported inÀVFDO\HDU QJ7(&1P3)&KLED3ODQW ',&1.920 tonnes/hr

10

0.95

10

0.06

Hokuriku Plant (DIC)

0.28 tonnes/hr

5

0.00

10

0.00

0.1 tonnes/hr

10

1.40

NA

‒

Hokkaido Plant',&.LWDQLKRQ3RO\PHU&R/WG Approx. 0.2 tonnes/hr

10

0.00

NA

‒

10

0.43

NA

‒

10

0.00

NA

‒

',&,QWHULRU&R/WG

Approx.

Tohoku Plant',&.LWDQLKRQ3RO\PHU&R/WG Approx. 0.2 tonnes/hr
Harima Plant(SEIKO PMC CORPORATION) Approx. 0.2 tonnes/hrStandard(pg-TEC/l)Emissions reported inÀVFDO\HDU SJ7(&O )RU WKH &KLED 3ODQW GLR[LQ FRQFHQWUDWLRQVLQ ZDVWHZDWHU WR GDWH ZHUH FDOFXODWHG IRUZDVWHZDWHUHPLVVLRQVIURPLQFLQHUDWRUVRQO\+RZHYHUWKHUHDUHZDVWHZDWHUHPLVVLRQVRWKHUWKDQIURPLQFLQHUDWRUVWKHGLR[LQFRQFHQWUDWLRQLQ ZKLFK ZDV  SJ7(&OLWHU LQ ILVFDO \HDU 'LR[LQ FRQFHQWUDWLRQV LQ ZDVWHZDWHURWKHU WKDQ WKDW IURP LQFLQHUDWRUV KDYH EHHQUHSRUWHGWR&KLED3UHIHFWXUHIRUSULRU\HDUVJRLQJ EDFN WR ILVFDO \HDU  7KHVH UDWHV
UDQJHGIURPSJ7(&OLWHUWRSJ7(&
OLWHUDOOEHORZWKHVWDQGDUG SJ7(&OLWHU 

4 Ensuring the Appropriate Collection and Storage of PCBs

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DIC Report 2021

95

ESH

Managing Industrial Waste
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2020

Achievements in fiscal year 2020

• Reduce industrial waste disposed ofas landfill (“zero emissions”).

• Reduce industrial waste disposed of as landfill.
DIC Group (Japan): 206 tonnes(-5% from fiscal year 2019)• Industrial waste disposed of as landfill
DIC Group (Japan): 167 tonnes• Reduce industrial waste generated
by production facilities.

Promote recycling.

• Reduce industrial waste generated byproduction facilities.
DIC Group (Japan): 33,894 tonnes(-2% from fiscal year 2019)

Maintain and later increase theresource recycling rate* at DIC Group
companies in Japan. Target: 90%.

• Industrial waste generated byproduction facilities
DIC Group (Japan): 32,564 tonnes

Resource recycling rate at DIC Group
companies in Japan: 90%

Evaluation

Goals for fiscal year 2021

• Reduce industrial waste disposed of as landfill.
DIC Group (Japan): 206 tonnes (same as forfiscal year 2020)★★

★★

• Reduce industrial waste generated byproduction facilities.
DIC Group (Japan): 33,894 tonnes (same as
for fiscal year 2020)

Maintain and later increase the resource
recycling rate at DIC Group companies inJapan. Target: 90%.

* Resource recycling rate: (Volume of industrial waste recycled (material recycling) + waste heat recovered) / volume of industrial waste generated| Policies and Framework for Implementation
Basic Approach
In addition to recycling and reuse of materials, the DIC Group works to minimize the impact of its industrial waste disposal practices.
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| Principal Initiatives in Fiscal Year 2020
The DIC Group works to fully grasp and manage industrial waste from generation at production facility through to discharge, intermediate
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rigorous management of unprocessed waste, including transformer, capacitors and stabilizers, through proper collection and storage in warehouses.

DIC Report 2021

96

ESH

,QGXVWULDO:DVWH'LVSRVHGRIDV/DQGÀOO

（Tonnes）
9,000

7,981

Industrial Waste Generated by Production
Facilities in Fiscal Year 2020
DIC Group (Japan)

tonnes

89
232
90
207
104
158
48
106
44
86
49
80
116
139

97
183

97
148
100
204
75
217

45
167

Fiscal year 2020

128
537
125
320

03

3,000

167

tonnesFiscal year 2020

537
1,288
312
991

02

45
1,560
2,296

IURPÀVFDO\HDU

3,426
4,326

5,581

-

4,190

37％

6,000

DIC Group(Japan)

DIC

07

09

16

17

20（FY）

0

00

01

04

05

06

08

10

11

12

13

14

15

18

19

（Base year）

DIC

DIC Group (Japan)

Deployment of a Comprehensive Industrial Waste Management System

Comprehensive Industrial Waste Management System,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQUHVROYHGWR
introduce GENESYS ECO, a comprehensive industrial
waste management system for use with the country’s(OHFWURQLF0DQLIHVW H0DQLIHVW V\VWHP7KHH0DQLIHVW
system manages the movement of industrial waste
by facilitating the electronic transmission of manifest
information and tracking the flow of waste from
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the need for administrative reporting and storage
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helped to both save labor and ensure legal compliance.

Groupwide management ofwaste by typeManagement in accordancewith specific rules

System provider

DIC Group in Japan
Generators（JWnet）
Disposers

Corporate headquarters
Substances of value

Sites

Industrial waste

General waste

Sites

Groupwide
management of information
Management of paper manifests and e-manifests

Management of permits and contracts

Initiatives by the DIC Group Overseas
In addition to ensuring the disposal of industrial waste in a manner that complies with national and regional legal and regulatory requirements, the DIC
Group’s overseas production facilities work to minimize industrial waste through the voluntary recycling and reuse of materials. Production facilities in the$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQDUHLQWURGXFLQJQHZZDVWHWUHDWPHQWIDFLOLWLHVDQGSURPRWLQJWKHKRUL]RQWDOGHSOR\PHQWRI
best practices, including those aimed at improving production processes.
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RIDVODQG¿OOE\WKHVHFRPSDQLHVGHFUHDVHGWRWRQQHV/RRNLQJDKHDGWKH*URXS¶VRYHUVHDVUHJLRQDOKHDGTXDUWHUVZLOOIRFXVRQIXUWKHU
reinforcing compliance with local laws and regulations, while at the same time cooperating with the Responsible Care and production management
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97

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| Industrial Waste Generated by the Global DIC Group in Fiscal Year 2020
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7KHWDEOHEHORZSURYLGHVGHWDLOHGGDWDRQLQGXVWULDOZDVWHJHQHUDWHGE\WKH',&*URXSLQ-DSDQDQGRYHUVHDVLQ¿VFDO\HDU7KH*URXSFROOHFWVGDWDIRUYROXPH
JHQHUDWHGYROXPHGLVFKDUJHGE\SURGXFWLRQIDFLOLWLHVYROXPHUHF\FOHG PDWHULDOUHF\FOLQJ ZDVWHKHDWUHFRYHUHG LQFOXGLQJWKDWIURPLQFLQHUDWLRQERLOHUV ZDVWHKHDWQRWUHFRYHUHG LQFOXGLQJWKDWIURPVLPSOHLQFLQHUDWLRQ DQGYROXPHGLVSRVHGRIDVODQG¿OOIRULQGXVWULDOZDVWHZKLFKLWFDWHJRUL]HVDV³WR[LF´RU³QRQWR[LF´Volume discharged
Volume generated
by production facilities(Tonnes)(Tonnes)Volume recycled(Tonnes)Waste heatrecovered(Tonnes)Waste heat notrecovered(Tonnes)Volume disposedof as landfill(Tonnes)Japan

36,73026,981

16,412

16,3083,866

144

Overseas

31,01430,972

10,180

1,943

2,023

17,012

Nontoxic

Japan

7,170

5,583

2,623

4,291

234

22

Overseas

33,832

28,82014,415

11,515

5,878

2,046

Japan

43,90032,564

19,034

20,5984,100

167

Overseas

64,846

59,792

24,595

13,458

7,901

19,058

108,745

92,355

43,63034,057

12,001

19,224

Toxic

Aggregate

Total| Environmental Impact of Groupwide Environmental Initiatives

Production
volumeTotal energy consumption(crude oil equivalent)

3,827,000 GJ-8.5

825,000
tonnesEmissions into the air

OUTPUTDIC Group(Japan)INPUT

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7KHFKDUWEHORZLVDFRPSUHKHQVLYHLOOXVWUDWLRQRIWKHHQYLURQPHQWDOLPSDFWRIWKH',&*URXS¶VRSHUDWLQJDFWLYLWLHVLQ-DSDQDQGRYHUVHDVLQ¿VFDO\HDU7KHFKDUWVKRZVHQYLURQPHQWDOLPSDFWIRUWZRLQSXWLWHPV WRWDOHQHUJ\FRQVXPSWLRQDQGWRWDOZDWHUFRQVXPSWLRQ DQGWKUHHRXWSXWLWHPV HPLVVLRQVLQWRWKHDLUHPLVVLRQVLQWRZDWHUDQGHPLVVLRQV
LQWRVRLO LQWKHIROORZLQJFDWHJRULHV&2HPLVVLRQVZDVWHZDWHUGLVFKDUJHGLQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OOHPLVVLRQVRIWDUJHWHGVXEVWDQFHVLQWRDLU FKHPLFDOVXEVWDQFHV²LQFOXGLQJWKRVHGHVLJQDWHGXQGHU-DSDQ¶V3575 1²DQGRQHVXEVWDQFHJURXS   -DSDQRQO\ HPLVVLRQVRI12[HPLVVLRQVRI62[DQG&2'LQZDVWHZDWHU

CO2 emissions

tonnes from fiscal year 2019*

Atmospheric emissions of targeted substances(551 substances and one substance group)

327 -39.5%

from fiscal% year 2019

Wastewater discharged

25,220,000

26,902,000 ㎥

Production
volume1,002,000
tonnes（-0.6％）%
from fiscal year 201927

9,621,000 ㎥

from fiscal year 2019167

CO2 emissions

Soil-related emissions of targeted substances(551 substances andone substance group)
tonnes0

Emissions into soil%

tonnes from fiscal year 2019

Emissions into water
Wastewater
discharged

7,717,000 -15.8
tonnesfrom fiscal year 2019

(Toxic industrial waste included: 16 tonnes)-14.3

358,000 +0.4

-23.3 %

tonnesEmissions into the air

Total water
consumption-13.2 %

Industrial waste disposedof as landfill-3.9%
m from fiscal year 20193

Aquatic emissions of targeted substances(551 substances and%one substance group)
tonnes from fiscal year 2019OUTPUT

INPUT

6,552,000 GJ +0.3

fiscalyear 2019+51.8 % fromtonnesEmissions into soil

COD in-15.0 %
wastewater 723 tonnes from fiscal year 2019fiscal
-3.7% fromyear 2019

DIC Group(Overseas)

12

Emissions into water

Total water
consumption

Total energy consumption(crude oil equivalent)fiscalyear 2019-0.2% fromtonnesSOx emissions

tonnes from fiscal year 2019

* Renewable energy is not included in the above figure.

（-7.6％）NOx emissions

194,000 -12.0% 182

Industrial waste
disposed of as landfill

19,058tonnes-5.8 %

the fiscal year 2019%from fiscal year 2019

(Toxic industrial waste
included: 2,572 tonnes)

 $ 3575 LV D VFKHPH IRU DVVHVVLQJ DJJUHJDWLQJ DQG GLVVHPLQDWLQJ GDWD RQ WKH VRXUFH RI KD]DUGRXV FKHPLFDOV DPRXQWV UHOHDVHG LQWR WKH HQYLURQPHQW DQG DPRXQWVWUDQVIHUUHGRIIVLWHIURPLQGXVWULDOHVWDEOLVKPHQWVYLDZDVWHSURGXFWV7KH³VXEVWDQFHVDQGRQHVXEVWDQFHJURXS´FRPSULVHVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\-DSDQ¶V3575DQG3575GHVLJQDWHGVXEVWDQFHV RWKHUWKDQFODVV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGIRUVWXG\E\WKH-&,$

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Managing Water Resources
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Promote the management of water
risks relevant to DIC Group production
activities.

Goals for fiscal year 2020

Achievements in fiscal year 2020

・A consistent global framework was established・Determine a method for assessing water
for assessing water risks (Japan, the PRC andrisks and apply it to water risk management.
the Asia–Pacific region).
・Promote the conservation and effective use
・Steps were taken to promote the conservationof water resources.
and effective use of water resources.

Evaluation★★
★★

Goals for fiscal year 2021

・Continue promoting the management ofwater risks based on a consistent global
framework.
・Promote the conservation and effective useof water resources.

| Policies and Organization
Basic Approach
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WRHQVXUHWKHHIIHFWLYHXVHRIZDWHUUHVRXUFHV:DWHUUHVRXUFHVDUHHVVHQWLDOLQWKHSURGXFWLRQRIWKH',&*URXS¶VEURDGUDQJH
RI¿QHFKHPLFDOV)RUH[DPSOHLQPDQXIDFWXULQJSURFHVVHVZDWHULVXVHGLQKHDWLQJDQGFRROLQJZDVKLQJFKHPLFDOUHPRYDODQG
ZDVWHZDWHUGUDLQDJHV\VWHPV7KH*URXSPDLQWDLQVD¿UPJUDVSRIULVNVDVVRFLDWHGZLWKFUXFLDOZDWHUUHVRXUFHVDQGSURPRWHVYDULRXVLQLWLDWLYHVGHVLJQHGWRHQVXUHWKHLUHIIHFWLYHXVH

| Principal Initiatives in Fiscal Year 2020
8VDEOHIUHVKZDWHUDFFRXQWVIRURQO\DURXQGRIWKHHDUWK¶VWRWDOIUHVKZDWHUUHVRXUFHV$FFRUGLQJO\¿QGLQJHIIHFWLYHZD\VWRFRQVHUYHDQG
manage water resources is a crucial global challenge. The DIC Group withdraws fresh water (tap water and industrial water) for use in production
processes and air conditioning and for drinking, among others. The Group also discharges wastewater—after purifying it in accordance with internal
VWDQGDUGVWKDWH[FHHGRI¿FLDOVWDQGDUGVLQWKHFRXQWULHVDQGWHUULWRULHVLQZKLFKLWKDVRSHUDWLRQV²LQWRULYHUVDQGRWKHUIUHVKZDWHUERGLHV,Q-DSDQ
WKH&HQWUDO5HVHDUFK/DERUDWRULHVLQ&KLED3UHIHFWXUHUHFRYHUVSXUL¿HGZDVWHZDWHU JUD\ZDWHU DQGUHXVHVLWRQVLWHLQUHVHDUFKDVDUHVXOWRIZKLFKit currently discharges no wastewater, thereby reducing its impact on water resources. The Group also promotes the recycling and reuse of water.
6LQFH¿VFDO\HDUWKH',&*URXSKDVXVHGWKH*5,¶VJXLGHOLQH 1 to collect data on water withdrawn and discharged at each site. In recognition
RIWKHIDFWWKDWZDWHUULVNVZKLFKLQFOXGHGURXJKWÀRRGLQJDQGZDWHUTXDOLW\YDU\JUHDWO\IURPUHJLRQWRUHJLRQFRPSDQLHVKDYHEHHQUHTXLUHGWR
VHWFRQWH[WEDVHGZDWHUWDUJHWVLHWDUJHWVWKDWWDNHLQWRDFFRXQWORFDOZDWHUFRQGLWLRQVDQGVLWHRSHUDWLRQV$FFRUGLQJO\',&KDVHVWDEOLVKHGD
FRQVLVWHQWJOREDOIUDPHZRUNIRUDVVHVVLQJZDWHUULVNVDQGVFUHHQHGVLWHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQWRVHWDSSURSULDWHWDUJHWV7KLVLQYROYHGFODVVLI\LQJZDWHUULVNVLQWRFDWHJRULHVVXFKDVGURXJKWÀRRGLQJDQGZDWHUTXDOLW\DQGPDSSLQJUHJLRQDOZDWHUULVNVXVLQJWZRVFDOHVQDPHO\³UHJLRQDOZDWHUULVNV´DQG³RSHUDWLRQDOZDWHUULVNV´5HJLRQDOZDWHUULVNVDUHPDSSHGXVLQJWKH$TXHGXFW  water risk assessment tool, while operational
ZDWHUULVNVDUHPDSSHGXVLQJDTXHVWLRQQDLUHGHYHORSHGLQKRXVH,Q¿VFDO\HDUVFUHHQLQJLGHQWL¿HGIRXUVLWHVDVULVNFDQGLGDWHV6XEVHTXHQW
LQYHVWLJDWLRQVUHYHDOHGWKDWULVNVDWDOOIRXUVLWHVZHUHORZDQGRUWKDWSURSHUFRXQWHUPHDVXUHVKDGEHHQLPSOHPHQWHG/RRNLQJDKHDGWKH*URXSZLOOFRQWLQXHZRUNLQJWRHQKDQFHLQLWLDWLYHVGHVLJQHGWRKHOSSURWHFWDQGHQVXUHWKHHIIHFWLYHXVHRISUHFLRXVZDWHUUHVRXUFHV

Operational water risks

7KLVJXLGHOLQHLVLQFOXGHGLQWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV
',&XVHVWKH:RUOG5HVRXUFHV,QVWLWXWH :5, $TXHGXFW:DWHU5LVN$WODVWRPDSZDWHUULVNVVXFKDVVWUHVVGURXJKWDQGIORRGVDWVLWHVZRUOGZLGH

Regional water risks
Production site

Regional water risk assessment

Mapping of regional water risks and operational water risks

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Closed System Installed at the Central Research Laboratories$W',&¶V&HQWUDO5HVHDUFK/DERUDWRULHVJURXQGZDWHULVXVHGWRVXSSO\WKHDSSUR[LPDWHO\P3
RIZDWHUFRQVXPHGE\WKHVLWHGDLO\RIZKLFKLVIRU³GRPHVWLF´ JHQHUDO XVHDQGLVIRU
³UHVHDUFK´ LQGXVWULDO XVH'RPHVWLFZDVWHZDWHU JUD\ZDWHU LVUHFRYHUHGWUHDWHGXVLQJDFRPELQHGVHSWLFV\VWHPDQGUHXVHGDVQRQSRWDEOHZDWHUIRUIOXVKLQJWRLOHWVZKLOHLQGXVWULDOZDVWHZDWHULVELRORJLFDOO\RUSK\VLFDOO\FKHPLFDOO\WUHDWHGSXULI\LQJLWWRDOHYHOFRPSDUDEOHZLWKtap water, and then reused in research for, among other, cooling and the washing of instruments.
5HVLGXDOZDWHULVGLVSRVHGRILQWRWKHDWPRVSKHUHXVLQJDQHYDSRWUDQVSLUDWLRQGHYLFHWKH¿QDOFRPSRQHQWRIDIXOO\FORVHGV\VWHPWKDWPHDQVDOOZDWHULVWUHDWHGUHXVHGRUGLVSRVHGRIRQVLWH
Looking ahead, the Central Research Laboratories will continue working to reduce the amount of
ZDWHULWZLWKGUDZVE\SURPRWLQJWKHLQWURGXFWLRQRISXUL¿FDWLRQHTXLSPHQWWRLPSURYHWKHTXDOLW\of reused wastewater.

Fresh Water Withdrawn and Wastewater Discharged by the DIC Group in Fiscal Year 2020
,QILVFDO\HDUWKH',&*URXSLQ-DSDQZLWKGUHZP3 of fresh water, a decline
RIIURPILVFDO\HDUDQGGLVFKDUJHG
P3RIZDVWHZDWHUDOVRGRZQ,QFRQWUDVWWKH',&*URXSRYHUVHDVZLWKGUHZP3 of fresh water and discharged m 3 of wastewater, representing
GHFUHDVHVRIDQGUHVSHFWLYHO\$V
DFRQVHTXHQFHIUHVKZDWHUZLWKGUDZQE\WKH
JOREDO',&*URXSLQ¿VFDO\HDUDPRXQWHG
WRP3GRZQZKLOHZDVWHZDWHU
discharged by the global DIC Group totaledP3DGHFOLQHRI

Wastewater discharged in fiscal year 2020 (1,000 m3)

Fresh water withdrawn in fiscal year 2020 (1,000 m3)
DIC Groupin Japan

DIC Group
Overseas

GlobalDIC Group

Surface water

9,168

5,195

14,364Groundwater

6,585

1,799

8,383

0

129

129

Rainwater

Wastewater generated byother organizations
Tap water/industrial water
Others
Total
Total in fiscal
year 2019
Change fromprevious fiscal year

DIC Groupin Japan

DIC Group
Overseas

GlobalDIC GroupRivers15,371

2,013

17,384

Oceans

6,763

0

6,763

Wastewater treatment
plants

3,084

832

3,915

0

0

0

Below ground

2

6

8

11,134

2,427

13,562

Third parties

0

0

0

15

70

85

0

4,867

4,867

26,902

9,621

36,52425,2207,717

32,93727,925

10,08739,012

26,235

9,166

35,401-3.7%-14.6%

-6.4%

-3.9%

-15.8%-7.0%

Others
Total
Total in fiscal
year 2019
Change fromprevious fiscal year

| Soil and Groundwater Pollution-DSDQ¶V:DWHU3ROOXWLRQ&RQWURO$FWZDVUHYLVHGLQWRWLJKWHQVWUXFWXUDOVWDQGDUGVJRYHUQLQJHTXLSPHQWLQVWDOOHGWRSUHYHQWJURXQGZDWHU
contamination by toxic substances. In addition to complying strictly with this Act and with the Soil Contamination Countermeasures Act, the DIC Group
LQ-DSDQLPSOHPHQWVVRLODQGJURXQGZDWHUVXUYH\VDQGFRXQWHUPHDVXUHVDVQHFHVVDU\DQGDVVHVVHVUHODWHGHQYLURQPHQWDODQGVDIHW\ULVNVDIC Report 2021

100

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Biodiversity
Basic Approach
The DIC Group works to grasp the impact of its operating activities on biodiversity and to use land and natural capital in asustainable manner.

| Preserving Biodiversity
Protecting Satoyama* Areas
The DIC Group recognizes the preservation of biodiversity as a critical challenge. As part of DIC Management School, the Group’s training module forsenior management in Japan, in January 2011 a lecture was given by an outside expert on the relationship between corporate activities and biodiversity. The
lecture was attended by executives from corporate headquarters, as well as from plants and Group companies across the country, and prompted the launchof a wide range of related initiatives. For example, the same year brought the launch of an initiative designed to ensure an effective grasp of the relationshipbetween the Group’s operating activities and biodiversity at all stages of its products’ life cycle, from R&D and the procurement of raw materials through to
end-of-life disposal or recycling. In April 2011, experts from the Chiba Biodiversity Center,a prefectural government organization, observed the natural forest and gardens on the
30-hectare site in Sakura, Chiba Prefecture, occupied by the Central Research Laboratories
and the Kawamura Memorial DIC Museum of Art, giving DIC’s biodiversity management
efforts high marks and offering advice for future initiatives.
From the beginning, DIC has used a closed system for circulating and reusing groundwater
for the Central Research Laboratories and hired a waste processing firm to ensure no
wastewater escaped from the site. The site’s satoyama landscape makes it an ideal home for
QXPHURXVWUHHDQGÀRZHUYDULHWLHVDVZHOODVIRUDQDEXQGDQFHRIRWKHUZLOGOLIHLQFOXGLQJ
birds and insects. Loved by the local community, the site has welcomed approximately 200,000
visitors annually since the opening of the Kawamura Memorial DIC Museum of Art in 1990.
The forest and gardens of the site occupied by the Kawamura Memorial DIC
0XVHXPRI$UWLVDOZD\VDOLYHZLWKVHDVRQDOÀRZHUVDQGIROLDJH

* SatoyamaLVD-DSDQHVHWHUPDSSOLHGWRWKHDUHDEHWZHHQPRXQWDLQIRRWKLOOVDQGDUDEOHÀDWODQGTOPIC
Biodiversity Initiatives at the Kawamura Memorial DIC Museum of Art
At the Kawamura Memorial DIC Museum of Art, located adjacent to the Central Research Laboratories on the same expansive site, 300 broadleaf tree seedlings
were recently planted in a corner originally occupied by a cedar forest. This effort was undertaken as part of a three-year plan (continuing until 2023) to create athicket of trees, with attention given to ensuring an ecosystem that would support coexistence with wild birds and small animals.
In this originally satoyama area, grafting was historically used to grow cedars for processing into lumber. While grafting leads to swift growth, the resulting trees
can be prone to disease. After this part of the site became the property of the Kawamura Memorial DIC Museum of Art, these grafted cedars were not harvested
for lumber and simply left to grow for much longer thanthey would otherwise have been, as a consequence of
which the trunks of many weakened from within. For the
past several years, the museum has been thus forced
to cut the trees down to prevent them falling, leaving
an area of unsightly stumps. In fiscal year 2020, themuseum planted 100 seedlings, including sawtooth oak,beech, Chonowski’s hornbeam, kobus magnolia andyamazakura, a variety of wild cherry.
Museum staff take part in planting seedlings

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Safety in Logistics
Responsible Logistics
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Goal for fiscal year 2020

Achievements in fiscal year 2020

Reduce CO2 emissions attributable
to logistics.

Reduce energy consumption per unit ofproduction attributable to logistics by 1%
by promoting modal shift and improving
transport efficiency.

1. Energy consumption per unit of production
attributable to logistics was level.
2. CO 2 emissions attributable to logistics
declined 3%.

Evaluation★★
★★

Goal for fiscal year 2021

Reduce energy consumption per unit ofproduction attributable to logistics by 1%
by promoting modal shift and improving
transport efficiency.

Basic Approach
7KH',&*URXSZRUNVZLWKORJLVWLFVSDUWQHUVWRPLQLPL]HULVNVLQFOXGLQJE\VXSSO\LQJLQIRUPDWLRQQHHGHGIRUWKHVDIHVKLSSLQJWUDQVSRUWRILWVSURGXFWV| Policies and Framework for Promotion
Having positioned the reduction of CO2 emissions attributable to the transport of its products as a key aspect of its commitment to promoting Responsible Care,',&VHWVDQQXDOWDUJHWVDQGSURPRWHVUHODWHGLQLWLDWLYHVRQDQRQJRLQJEDVLV',&¶VORJLVWLFVFRQ¿JXUDWLRQ²FRPSRQHQWVRIZKLFKLQFOXGHWUDQVSRUWEHWZHHQSURGXFWLRQIDFLOLWLHVWKHWUDQVSRUWRISURGXFWVWRFXVWRPHUVDQGLQWHUQDWLRQDOORJLVWLFV²SUHYLRXVO\FHQWHUHGRQDGHGLFDWHGVXEVLGLDU\HVWDEOLVKHGLQZKLFKRSHUDWHGXQGHUWKHGLUHFWVXSHUYLVLRQRI',&,QDELGWRUDWLRQDOL]HDQGLQFUHDVHWKHHI¿FLHQF\RIORJLVWLFVLQ',&WUDQVIHUUHGRZQHUVKLSRIWKHVXEVLGLDU\WRDSDUWQHU¿UPDQGEHJDQWRRXWVRXUFHLWVORJLVWLFV6LQFHWKHQWKH&RPSDQ\KDVZRUNHGFORVHO\ZLWKWKLVDQGRWKHUSDUWQHU¿UPVWRLPSURYHWKHVDIHW\RI
and reduce CO2HPLVVLRQVDWWULEXWDEOHWRORJLVWLFV:LWKWKHDLPRIUHVSRQGLQJEHWWHUWRVRFLDOLPSHUDWLYHVDVVRFLDWHGZLWKWKHWUDQVSRUWRIFKHPLFDOVRYHUWKH
PHGLXPWHUPLQ-DQXDU\',&FRPELQHGWKHORJLVWLFVFRPSRQHQWVRILWVYDULRXVGHSDUWPHQWVWRFUHDWHDQLQGHSHQGHQW/RJLVWLFV'HSDUWPHQW
7KH/RJLVWLFV'HSDUWPHQWZKLFKFRQVLVWVRIWKH'RPHVWLF3ODQQLQJ*URXSDQGWKH2YHUVHDV3ODQQLQJ ,QWHUQDWLRQDO7UDGH$GPLQLVWUDWLRQ*URXSLVFKDUJHGZLWKDGYDQFLQJLQLWLDWLYHVWRHQKDQFHWKHVDIHW\DQGUHGXFHWKHHQYLURQPHQWDOLPSDFWRIORJLVWLFV7KH'RPHVWLF3ODQQLQJ*URXSDVDFRQVLJQRUFRRUGLQDWHVZLWKORJLVWLFVSDUWQHUV²WKLUGSDUW\ORJLVWLFV 3/ ¿UPV²WRIRUPXODWHORJLVWLFVSROLFLHVDQGSURPRWHSODQVGHVLJQHGWRHQKDQFHWKHHI¿FLHQF\RIGRPHVWLFORJLVWLFV
7KH2YHUVHDV3ODQQLQJ ,QWHUQDWLRQDO7UDGH$GPLQLVWUDWLRQ*URXSLVFKDUJHGZLWKSODQQLQJDQGGHYLVLQJPHDVXUHVWRRSWLPL]HORJLVWLFVDFURVV$VLDSURPRWLQJ*URXSZLGHHIIRUWVWRFDSLWDOL]HRQIUHHWUDGHDJUHHPHQWV )7$V *2 and implementing proposals for reducing import–export costs.
3/VDUH¿UPVWKDWSURYLGHSDUWLDORUFRPSOHWHRXWVRXUFHGORJLVWLFVVHUYLFHV)7$VDUHDJUHHPHQWVEHWZHHQWZRRUPRUHFRXQWULHVRUFXVWRPVWHUULWRULHVWRHOLPLQDWHWUDGHEDUULHUVIRUDVHWSHULRGRIWLPHWKHUHE\HQFRXUDJLQJWUDGH

',&·V/RJLVWLFV&RQÀJXUDWLRQRegular safety
and environment
meetings

DIC’s Logistics
Department

Overseas
Group companies
SupporteﬀortsConﬁrmation of
execution(Policy/initiatives/
discussions)Ɣ Loading and unloadingƔ Transport between production facilities
Ɣ Delivery of products(Ɣ Transport of purchased materials)
Others࡛ Domestic Planning Group࡛ Overseas Planning & International
Trade Administration Group

Product divisions

Logistics partners
Principal DIC production facilities(Health and safety committees)

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| 5HGXFLQJ(QYLURQPHQWDO,PSDFWDQG6XSSRUWLQJ:KLWH/RJLVWLFV,Q-DSDQWKH',&*URXSSURPRWHVWKHWUDQVSRUWRISURGXFWVXVLQJPRGHVRIWUDQVSRUWTXDOLI\LQJDV³PRGDOVKLIW´ZLWKWKHDLPRIUHGXFLQJWKHLPSDFWRILWVORJLVWLFVDFWLYLWLHVRQWKHHQYLURQPHQW,Q¿VFDO\HDUWKHYROXPHRISURGXFWVWUDQVSRUWHGLQ-DSDQE\WKH*URXSGHFOLQHG7KLVDQGRWKHUIDFWRUVXQGHUVFRUHGDGHFOLQHLQERWKDQGHQHUJ\consumption and CO2 emissions attributable to logistics.
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07 08 09 10 11 12 13 14 15 16 17 18 19 20(FY)| Safety Management in Logistics
Safety Management Initiatives
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designated as incidents for priority attention and targets, number of incidents, causes and countermeasures
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aimed at preventing accidents. In addition, members of plant health and safety committees attend each
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* <HOORZ&DUGVDUHSDUWRIDFWLYLWLHVUHFRPPHQGHGE\WKH-&,$7KHVHFDUGVFRQWDLQ information about the correct actions totake if an accident occurs. They provide contact details to ensure proper responses by transportation companies, firefighters
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cards at all times.

DIC Report 2021

103

5HJXODUPHHWLQJVZLWKORJLVWLFVSDUWQHUV<HOORZ&DUGFDUULHGE\WUDQVSRUWSHUVRQQHO

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TOPIC
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WDNHHQYLURQPHQWVDIHW\DQGTXDOLW\PHHWLQJVZLWK3/VORFDWHGRQVLWHDWLWVmain domestic production facilities online. Despite the restrictions of the online
format for safety training, the Company reiterated the importance of robust safety
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shipments of our products are not delayed, even given the current global situation. I am grateful to the cooperation and efforts of our partnercompanies to respond to our expectations.
General Manager, Logistics Department, DIC Corporation

DIC Report 2021

104

Kenichi Tsuruta

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Ensuring the Safety of Chemical Substances
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objectives of initiatives• Enhance functions of comprehensive
chemical substance information management
systems.
• Continue to expand deployment of theWercs and Atrion at DIC Group companies
overseas.

Goals for fiscal year 2020

Achievements in fiscal year 2020

• Work proceeded toward the advance launch• Continue working to create a new comprehensive in Japan in 2021. A team was established at a
global system for managing chemical substance Group company in the PRC to promote
deployment in the PRC.
information.
• Deploy the Wercs at DIC Group companies in • Preparations for deployment in the Philippines
proceeded, but was not completed because of
the Philippines.
COVID-19.

• The review process was completed and a new
business flow was drafted.
• Commence review of business flow across sites.
• A process was established for maintaining advance• Maintain status of chemical substances to which
K-REACH registration status and a policy was set• Review efforts to comply with regulations in Japan.
advance K-REACH registration applies and prepare
regarding the consecutive reregistration of existing• Comply with regulations overseas.
to reregister existing chemical substances.
chemical substances.
• Promote compliance with Taiwan’s TCSCCA.
• Attention was focused on steps taken by local
authorities.

Evaluation

Goals for fiscal year 2021★★★

• Launch the new comprehensive global chemical
substance information management system in Japan.
• Promote deployment of the Wercs and Atrion
at DIC Group companies overseas.

★

★★★
★★★
★★★

• Verify new business flow and make necessary
amendments.
• Address revisions to China REACH.
• Promote compliance with Taiwan’s TCSCCA.

| Policies and Organization
Basic Approach
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| Managing Chemical Substances
1

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DIC Report 2021

105

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Outlook for Principal Initiatives in Fiscal Year 2021

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7KH',&*URXSZLOOFRQWLQXHWRJDWKHULQIRUPDWLRQDQGWDNHVWHSVWRUHJLVWHUFKHPLFDOVXEVWDQFHVWRHQVXUHFRPSOLDQFHZLWKQHZO\LQWURGXFHGUHJLVWUDWLRQV\VWHPVLQRWKHUFRXQWULHVDQGWHUULWRULHV$GGLWLRQDOO\WKH*URXSZLOONHHSDEUHDVWRIGHYHORSPHQWVVXUURXQGLQJ,QGLD¶VPRYHWRPDQGDWH*+6FRPSOLDQFH
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VOICE We gather information on laws and regulations governing chemical substances
overseas with the aim of increasing public trust in the DIC Group.

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UHJXODWLRQV&RPSDQLHV¶UHVSRQVHVKDYHQHFHVVDULO\H[SDQGHGDQGEHFRPHLQFUHDVLQJO\FRPSOH[7KH',&*URXSZKLFKFRQWLQXHVWREURDGHQLWV
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LPSOHPHQWDWLRQRIUHVSRQVHVE\LQGLYLGXDOFRPSDQLHV,WU\WRH[SODLQFRPSOH[ODZVDQGUHJXODWLRQVDVZHOODVWRVXJJHVWDSSURSULDWHUHVSRQVHVDVVLPSO\DQGFOHDUO\DVSRVVLEOHWRKHOSGHHSHQHPSOR\HHV¶XQGHUVWDQGLQJ:HEHOLHYHWKDWWKLVDSSURDFKLVLPSRUWDQWWRJDLQLQJWKHFRQ¿GHQFHDQG
WUXVWRIFXVWRPHUVDQGVRFLHW\DWODUJH:HZLOOFRQWLQXHWRSURPRWHDYDULHW\RIUHODWHGLQLWLDWLYHVWKDWFRQWULEXWHWRLQFUHDVHGWUXVWLQWKH',&*URXSManager, Chemical Management Group, Responsible Care Department, DIC Corporation

DIC Report 2021

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Masato InoueESH| Training and Systems
In line with the principles of product stewardship, DIC recognizes the importance of greater employee awareness and knowledge to ongoing efforts to improve thesafety of chemicals and manufactured products. The Company places considerable importance on training for individuals involved in the manufacture, import andKDQGOLQJRIFKHPLFDOVXEVWDQFHVLQDFFRUGDQFHZLWKDSSOLFDEOHODZVDQGUHJXODWLRQVDQGHQGHDYRUVWRLPSURYHHPSOR\HHV¶DZDUHQHVVDQGNQRZOHGJHRIDSSOLFDEOH
laws and regulations in Japan and overseas, which it provides through its program to foster experts and its proprietary licensing system.

Fostering Experts
As a comprehensive global chemicals manufacturer, DIC recognizes legal and regulatory compliance as central to risk management and promotes training designed to foster
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%HJLQQLQJLQ¿VFDO\HDU',&ZLOOVZLWFKWRDQRQOLQHIRUPDWWRPDNHLWHDVLHUIRUHPSOR\HHVLQWKHWDUJHWJURXS²PDLQO\HPSOR\HHVDWVLWHVZLWKWHFKQLFDOGHSDUWPHQWV²
to participate in training. The Company is also currently working to redesign courses and prepare study materials to facilitate the creation of a practical program focused on
various chemicals-related laws and regulations and a high-level program that will impart advanced knowledge about key laws and regulations such as the Act on the Evaluationof Chemical Substances and Regulation of Their Manufacture, etc., and the Poisonous and Deleterious Substances Control Act in Japan.

Licensing System in Japan
Under its proprietary licensing system, DIC provides mandatory specialized training for individuals in Japan engaged in the export and import of chemical substances
and issues licenses to employees who have completed training and passed in-house examinations. Licenses are valid for two or three years, depending on the particularbusiness. Training for individuals involved in exporting and importing chemical substances focuses on the Foreign Exchange and Foreign Trade Act, while that for individuals
involved exclusively in importing centers on the Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc., the Industrial Health and Safety Act
and the Poisonous and Deleterious Substances Control Act. To renew a license, an employee must once again go through training and pass the in-house examination. In¿VFDO\HDUWUDLQLQJZDVQRWSURYLGHGEHFDXVHRI&29,'$FFRUGLQJO\WKHQXPEHURIHPSOR\HHVKROGLQJOLFHQVHVZDVXQFKDQJHGIURP¿VFDO\HDU
%HJLQQLQJLQILVFDO\HDU',&ZLOOFRQWLQXHWRGHHSHQWKHKLHUDUFK\RIH[SRUWExport Licenses
Import Licenses
licenses, and review the content of its training. In particular, the Company will establish
a special qualification for individuals involved in the preparation of certificates of nonClass A licenses
Advancedapplicability, an important part of export control. The Company is also currently creating alicenses
OLFHQVLQJV\VWHPIRUHPSOR\HHVZKRSUHSDUHFHUWL¿FDWHVRIRULJLQZKLFKKDYHFRPHWRSOD\a more important role in international free trade agreements in recent years with, among
Class B licenses
others, the signing of the Regional Comprehensive Economic Partnership (RCEP) and thecoming into force of the UK–Japan Comprehensive Economic Partnership Agreement.

1,527

84

318

183

Training at Overseas Group Companies
The PRC has taken decisive steps to reinforce chemical substance management in that country, underscoring its increasing importance to business
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through training focused on, among others, trends in related laws and regulations, using e-learning and other formats.

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DIC Report 2021

109

ESH

VOICE I will continue to provide training aimed at ensuring legal compliance.
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VSHHGZRUOGZLGH7KLVKDVOHGWRWKHDPHQGPHQWRIODZVDQGUHJXODWLRQV)RUWKH',&*URXSZKLFKKDVRSHUDWLRQVZRUOGZLGHLWLVFUXFLDOWKDWZHHQVXUHDFFHVVWRWKHODWHVWOHJDODQGUHJXODWRU\LQIRUPDWLRQDQGWKHDELOLW\WRUHVSRQGSURPSWO\DQGGHFLVLYHO\7RWKLVHQGLWLVQHFHVVDU\WKDWHDFKHPSOR\HHKDVDSURSHUJUDVSRIODZVDQGUHJXODWLRQVDQGWKDWSHUWLQHQWLQIRUPDWLRQLVVKDUHGDPRQJUHODWHGGHSDUWPHQWV,QP\FDSDFLW\DVDOHJDODQGUHJXODWRU\RI¿FHU,ZLOOFRQWLQXHWRSURPRWHWUDLQLQJDLPHGDWHQVXULQJHPSOR\HHVXQGHUVWDQGWKHUHODWLRQVKLSEHWZHHQ',&*URXSSURGXFWVDQGODZVDQGUHJXODWLRQVJRYHUQLQJFKHPLFDOVXEVWDQFHVWKDWKHOSHQVXUHHIIHFWLYHFRPSOLDQFH
Manager, Chemical Management Group, Responsible Care Department, DIC Corporation

Chisato Kuriyama| Assessing and Managing Risks
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| Position on the Use of Animals in Testing,QOLQHZLWKWKH³5V´RIDQLPDOXVHLQUHVHDUFK ³5HSODFHPHQW5HGXFWLRQ5H¿QHPHQW´ ZKLFKDUHJXLGHOLQHVGHVLJQHGWRHQVXUHWKHPRUHHWKLFDOXVHRIDQLPDOVLQWHVWLQJWKH',&*URXSDFWLYHO\SURPRWHVVDIHHYDOXDWLRQXVLQJTXDQWLWDWLYHVWUXFWXUH±DFWLYLW\UHODWLRQVKLS 46$5 
PRGHOVZKLFKGRQRWHPSOR\DQLPDOVDQGDOWHUQDWLYHVWRDQLPDOWHVWLQJ| Safe Product Transport
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DIC Report 2021

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ESH

Engaging with Society
Basic Approach
DIC actively discloses information and publicizes its Responsible Care initiatives, as well as endeavors to disseminate knowledge
regarding ESH-related issues and respond appropriately to public concerns.

| Information Disclosure and Engaging with Society
The DIC Group strives to increase the transparency of its activities through the active disclosure of information and at the same time
promotes dialogue with stakeholders by, among others, providing safety- and environment-related data through Group websites, the DIC
Report and other media, as well as by holding environmental presentations for local residents at production facilities.
The DIC Group also promotes a variety of efforts to deepen its engagement with society. In Japan, such efforts include preparing site
reports, inviting junior and senior high school students in for hands-on lab lessons, participating in community disaster drills and providing
assistance for local festivals and other local events. Overseas Group sites seek to advance dialogue and interaction with local communities
E\SDUWLFLSDWLQJLQWUHHSODQWLQJVDQGRWKHUDFWLYLWLHVDLPHGDWKHOSLQJSUHYHQWJOREDOZDUPLQJDQGSUHVHUYHELRGLYHUVLW\,Q¿VFDO\HDU
many of these efforts were suspended as a consequence of COVID-19. The Group looks forward to resuming active engagement withsociety as soon as possible.

Bon Odori HYHQWDW',&*UDSKLFV¶7RN\R3ODQW Site reportComprehensive disaster drill for the Sakai–Senboku Special Disaster
3URWHFWLRQ$UHDKRVWHGE\WKH6DNDL3ODQW TOPIC
DIC Plastic Contributes Helmets to Town in Saitama Prefecture
As part of its effort to contribute to the local community, Group company DIC Plastics donatedKHOPHWVWRWKHWRZQRI,QDLQ6DLWDPD3UHIHFWXUHRIZKLFKZHUHSUHVHQWHGWRWKHWRZQKDOODQGWRWKHORFDO¿UHGHSDUWPHQW',&3ODVWLFGHFRUDWHGWKHGRQDWHGKHOPHWVZLWKWKH
WRZQ¶VRI¿FLDOHPEOHPZKLFKIHDWXUHVVW\OL]HGKLUDJDQDFKDUDFWHUVIRUWKHQDPH³,QD´OLQNHG
together around a circle like the petals of a flower, symbolizing residents unified to create a
EHDXWLIXOFRPPXQLW\$YLGHRRIWKHSUHVHQWDWLRQZDVXSORDGHGWRWKHWRZQ¶VRI¿FLDOZHEVLWH

DIC Plastics director Takashi Kanno with mayor of Ina Kiyoshi Oshima

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111

Quality
Enhancing Product Quality and Customer Satisfaction

Goals and Achievements of Major Initiatives
Objective of initiatives

Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Goals for fiscal year 2020

Achievements in fiscal year 2020

Prevent major quality problems from arisingby strengthening the quality assurance
framework.

T h e m an a g e m e nt st at u s of c a li b r at i o nequipment was audited and steps were taken to
maintain/improve the reliability of testing
parameters.

Provide products and services that deliver alevel of quality that matches both customer
expectations and market requirements.

Design reviews and inspections of the
management of changes were conducted
and improvements were made inadministration of the Group’s QMS. (ISO
9001 certification was temporarily suspended
for two production facilities where past
improprieties were discovered.)

Secure product quality.

Evaluation

Goals for fiscal year 2021★★★

Reinforce the quality management process
to prevent improprieties, as well as major
quality defects and criticisms.

★★

Provide products and services that deliver alevel of quality that matches both customer
expectations and market requirements.

Basic Approach
In line with The DIC Way and its basic sustainability policy, the DIC Group positions its Environment, Safety and Health Policy and its Quality Policy
as two inseparable aspects of its operations. Accordingly the Group works continuously to provide products and services that respond to the needsof customers and society at large.

DIC’s Quality Policy

Contribute to the prosperity of customers and society by consistently providing reliable products (Updated in May 2015)| Framework for Promotion

Product divisions

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the vertical axis and the Technical Management Unit and Production Management Unit on the horizontal axis. The Company recently conducted a review of the
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FRQ¿JXUDWLRQLQZKLFKWKHSURGXFWGLYLVLRQTXDOLW\DVVXUDQFHJURXSVKDYHEHHQDEVRUEHGLQWRWKH3URGXFWLRQ0DQDJHPHQW8QLWThis realignment also involved creating the position of deputy general manager in charge of quality control within the Production Management Unit and integrating
the quality assurance groups, which had formerly been divided among the product divisions. The goals here were to ensure the independence of the framework for
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function while monitoring the other; and position the Quality Assurance Department and the newly inaugurated Quality Control Department, using their respective
reporting lines, to identify issues facing sites and product divisions and devise the most effective measures in response.
DIC also established a new Quality Committee to enable the president to be directly involved in quality management. In principle, the Quality Committee meetsonce each quarter. The committee formulates DIC Group quality policies and important quality management measures. At committee meetings, the product division
general managers are responsible for reporting on the status and progress of quality management measures and summarizing related activities.

Customersatisfaction

Trust

Expectations

Quality Assurance Department
Quality Control Department
Peace of
mind

Sites

QMS
administration

Satisfaction

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Quality| Quality Assurance and Quality Improvement Initiatives
8QGHUWKHQHZTXDOLW\PDQDJHPHQWFRQ¿JXUDWLRQWKH4XDOLW\$VVXUDQFH'HSDUWPHQWDQGWKH4XDOLW\&RQWURO'HSDUWPHQWLPSOHPHQWPHDVXUHVdeliberated by the Quality Committee and in their respective roles work to improve the overall level of quality management. In the event an issue of
nonconformance arises, the departments take corrective measures to prevent recurrence and improve customer satisfaction.
1

Initiatives Aimed at Increasing Customer Satisfaction

The Quality Assurance Department’s principal responsibilities are to❶ deploy the DIC Group’s Quality Policy,❷ promote measures to improve customer satisfaction,❸ ensure the appropriate management and auditing of the Group’s quality management system (QMS),❹ provide and assist in the appropriate management of information on quality-related
ODZVDQGUHJXODWLRQVDQGFHUWL¿FDWLRQXQGHUGRPHVWLFDQGRYHUVHDVVWDQGDUGVDQG❺ foster a customer- and compliance-focused mindset.

In addition to conducting regular internal quality audits, the Quality Assurance Department repeatedly monitors and inspects domestic sites toensure that the QMS is administered effectively while ensuring that favorable relations are maintained with other related departments, thereby
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Owing to the spread of COVID-19, in fiscal year 2020 the Quality Assurance Department checked the implementation status of inspection
equipment calibration and of design reviews while also combining information from prior confirmations implemented using check sheets andonline audits, as well as audited design reviews. In calibrating inspection equipment, efforts focused on ensuring the accuracy of inspection values
reported to customers. Managers from the product division quality assurance groups, and from the production and sales groups, participated indesign reviews developed by technical groups with the aim of instilling an awareness that all are crucial to quality assurance.
In the area of systems development, in March 2020 the Quality Assurance Department began using a new system for verifying standards. Under
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customers. The department will step up use of this system going forward.
2

Initiatives Aimed at Enhancing Product Quality

The Quality Control Department’s principal responsibilities are to❶ improve the level of quality control (enhance product competitiveness),❷ enhance the reliability of quality inspections,❸ advance the horizontal deployment of best practices, and❹ promote DX for business processes related to quality control and quality inspections

To provide high-quality products that customers feel secure using, the DIC Group promotes a variety of quality improvement initiatives during
product planning, design and development, the procurement of raw materials, production and sales, giving consideration to the need for effective
product stewardship.
Management of changes to maintain compliance with quality requirements is necessitated by the expansion of facilities to accommodate
production expansion, the replacement of aged equipment or the transition to new, more cost-competitive products. For this reason, it is necessary
to prevent the discharge of nonconforming products, a key concern, and to fortify efforts to respond to complaints and criticisms.
The DIC Group currently uses statistical process control (SPC), a quality monitoring and control methodology. Looking ahead, the Group will
promote DX to improve the stability of product quality by further enhancing its ability to utilize raw materials information and manufacturing process
data, and to monitor quality trends on a daily basis.
To uncover the causes of nonconformance when complaints and criticisms are received, the DIC Group uses “why-why analysis” (“naze-nazebunseki”) to examine issues from multiple perspectives, which not only uncovers direct causes but also illuminates underlying issues, making it
possible to take corrective actions to prevent recurrence. The results of such analysis are shared across related groups. This approach continues tobe successful in averting related issues. The Group will work to further enhance the effectiveness of efforts to prevent the recurrence of issues, aswell as to counter the risk of these efforts encouraging negative thinking, by advancing the recognition of a common vision for the future.

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Quality

3

Compliance: The DIC Group’s Top Priority

Committed to providing products that satisfy its customers and contribute to society, DIC believes that a corporate climate in which each employee
works to ensure quality is essential. Owing to the discovery of improprieties pertaining to the quality of a foam fire extinguishing agent, the&RPSDQ\UHFRJQL]HGWKHQHHGWRUHYLHZWKHQDWXUHRITXDOLW\PDQDJHPHQWWUDLQLQJ,Q¿VFDO\HDUWKH*URXSFUHDWHGDSURJUDPWRSUHYHQWsuch improprieties for managers involved in quality assurance, who participated from their respective workplaces. The program, which also
employed case studies, focused on raising awareness of compliance. Through such efforts, the Group will continue working to improve awarenessof improprieties and prevent the discharge of nonconforming products.
A program dubbed ISO 9001 Top Management Training was also implemented for organizational leaders, including site general managers, the
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importance of their own leadership in ensuring the effective functioning of the Group’s QMS.
Additionally, an e-learning program on quality compliance was conducted for domestic DIC Group employees, with 100% of eligible employees
taking part. Going forward, the Group will expand training designed to give employees a greater sense of ownership over their own work.
4

Mechanisms for Dealing Appropriately with Issues

In the DIC Group’s new quality management configuration, the deputy general manager in charge of quality control conducts Group quality
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Product division quality conferences, which focus on customer satisfaction, are also held. The product divisions, which spearhead the
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as likely to occur, product division general managers take the lead in communicating with customers and seeking to resolve issues. In contrast,
the role of site quality conferences, which are conducted by site general managers, is to ensure the appropriate functioning of the Group’s QMS
and promote improvements. Should an issue of nonconforming products arise, site quality conferences investigate causes, implement corrective
measures and take steps to prevent recurrence. Both the Quality Assurance Department and the Quality Control Department participate in these
conferences and respond swiftly and appropriately to issues as required. In the event of a more serious problem, measures are implemented in linewith the headquarters task force manual for addressing major improprieties, and quality defects and criticisms.

| Improprieties in Type Testing of a Foam Fire Extinguishing Agent
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agent MEGAFOAM IH-101-5 had been discovered and, as a consequence, approval of the product had been rescinded. Two months later, on
November 19, DIC published a notice of measures to be taken to determine the cause of this incident and prevent recurrence on its global website.
Through the steady implementation of various measures, the Company is currently taking all possible steps to ensure such an episode is neverrepeated. DIC is currently in the process of replacing this product with a new type-approved alternative to avoid causing undue inconvenience tocustomers and other related parties.
In connection with this incident, a special audit of DIC’s Chiba and Hokuriku plants was conducted by Lloyd’s Register Quality Assurance Ltd.
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these two plants effective March 18, 2021.
DIC takes these audit results seriously and is taking corrective actions to improve its QMS, as well as to prevent recurrence, to ensure the
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regrets for any anxiety or trouble caused to customers or other related parties.

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Human Resources Management

SDGs Goals 3, 4, 5, 8 and 10

Working to Enhance Job Satisfaction
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2020

Achievements in fiscal year 2020

• Promote awareness of global trends inhuman rights.
• Conduct human rights due diligence andtake steps to reduce the risks that humanrights–related issues pose.
• Ensure a grasp of disparities in the statusof efforts to protect human rights at Group
companies in different countries.

• Steps were taken to disseminate the DIC
Group Human Rights Policy and recent
human rights–related initiatives.
• Human rights due diligence was conducted in
two countries where there was a potential
risk of human rights violations (three companies in Indonesia), which confirmed that
there were no violations.

• Continue promoting talent management with theaim of discovering future management candidates.
• Consider the creation of a global humanresources database for the entire DIC Group,
including Sun Chemical.

• The DIC Group continued to promote talentmanagement and reviewed criteria for discovering
human resources and plans for providing training.
• Consideration was given to the creation of a global
human resources database for the entire DIC
Group, including Sun Chemical.

• Continue offering the GCD Program.
• Continue providing practical training aimed at
fostering global human resources at multiple levels.

• Two individuals participated in the GCD Program.
• Practical training aimed at fostering global humanresources at multiple levels was provided remotely.

Encourage women in the workplacewith the aim of securing a diverse
labor force and supporting diverse
work styles.

• Use roundtable discussions for directors to ensure
a grasp of the status of efforts to promote diversity
in each department and consider measures.
• Promote work style reforms.

• Roundtable discussions for directors wereconducted.
• Steps were taken to advance use of teleworkarrangements, including increasing workplaces
and individuals qualifying for flextime.
• A system was introduced to help employees
balance medical treatment and work, and related
guidelines were published.

Promote the hiring of individuals withdisabilities with the aim of securing adiverse labor force and supporting
diverse work styles.

• Further strengthen cooperation with special needs
schools to expand internships.
• Promote the exchange of information with othercompanies hiring individuals with disabilities.
• Maintain the percentage of DIC’s total labor force
accounted for by individuals with disabilities at 2.6%.

• The decision was made to recruit new employees
from special needs schools.
• As of December 31, 2020, individuals with disabilities accounted for 2.65% of DIC’s total labor force.

• Prevent mental health disorders by taking steps
to ensure the prompt identification of issues.
• Implement measures aimed at improving
health literacy.

• Stress checks were conducted and follow-up
online training was offered.
• An occupational psychologist used the DIC
Group portal site to provide guidance on
dealing with stress arising from work stylechanges necessitated by COVID-19.
• A training session on health management
was offered for female employees.

Foster and endorse the advancementof local staff overseas with the aim ofadvancing global management.

Enhance labor productivity by promoting various measures to provide
support for the physical and mental
health of employees and the creationof comfortable workplaces.

Evaluation★★

Goals for fiscal year 2021
• Grasp global trends in human rights–related
issues and measures promoted by the UN
and individual countries and territories toaddress such issues. Provide guidance to
DIC Group companies worldwide to ensure
they do not commit human rights violations.
• Conduct human rights due diligence incountries where there is a potential risk ofhuman rights violations and provide tailoredguidance to reduce the risks that humanrights–related issues pose.

★

Consider building a framework for optimizing
the allocation of executives with a view toshifting to a global management system.

★★

Increase the number of individuals
par ticipating in the GCD Program andpractical training aimed at fostering global
human resources at multiple levels to 10.

★★

• Explore and implement measures to advanceunderstanding of diversity.
• Develop new personnel systems that lead to higher
productivity by facilitating work style reforms.
• Redesign measures to foster human resources
with the aim of improving job satisfaction.

★★★

• Continue working to reinforce relations with special
needs schools.
• Exchange information with other companies on thecreation of special-purpose subsidiaries.
• Maintain the percentage of DIC’s total labor force
accounted for by individuals with disabilities at 2.65%.

★★

• Prevent mental health disorders and take steps
to ensure the prompt identification of issues.
• Implement measures aimed at improving
health literacy.

Basic Approach to Human Resources Management
With the aim of being an organization that empowers all employees to reach their full potential, the DIC Group is committed to respecting human rights
and eliminating all forms of discrimination and to creating a work environment that embraces diversity. The Group also strives to support a healthy
work–life balance for each employee and create a work environment conducive to job satisfaction, as well as to foster human resources in markets
around the world, which it recognizes as essential to ensuring sustainable corporate growth under its current medium-term management plan.

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115

Human Resources Management| Strategies for a Stronger Management Infrastructure
In line with The DIC Way, which represents its fundamental management policy, the DIC Group has established a global human resources management
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Central and South America, and Africa are overseen by Sun Chemical of the United States. The DIC111 medium-term management plan, which
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WING: DIC111 Strategies for Human Resources Management
Work Style Revolution

HR Infrastructure Reform

Next Management Selection

Global Talent Development

Reform work styles to capitalize on diversified individuality■ Reform jobs with digital tools.
■ Reform working conditions by introducing
telework and flexible working hours.
■ Shift focus of evaluation from quantity to quality.
■ Support employees who have childcare or
nursing care responsibilities or suffer illness, etc.

Adopt a global human resources system
and unify Group system■ Consolidate employee qualification systems globally.
■ Unify qualification standards and assessment
formats for management-level employees.
■ Develop IT system for global human resources platform.

Establish system to appoint the nextmanagement team
■ Clarify requirements for employees in key positions.
■ Establish selection and monitoringprocesses for high-potential employees.
■ Use talent review to optimize combinationof positions and employees.

Develop global human resources■ Define level of and set requirements for
global human resources.
■ Systematize global human resources
development programs(English-language ability, competency, work
experience, etc.).

Progress in Fiscal Year 2020
① Work style revolution,QWURGXFHGOHDYHIRUHPSOR\HHVWRDFFRPSDQ\VSRXVHVRYHUVHDVDQGVKRUWWHUPSDLGOHDYHSURJUDPVDQGLPSOHPHQWHGLQLWLDWLYHVWRSURPRWHWHOHZRUNV\VWHPDQGDZDUHQHVVRIÀH[LEOHZRUNLQJRSWLRQV② HR infrastructure reform
・%XLOWKXPDQUHVRXUFHVGDWDEDVHIRUPDQDJHPHQWOHYHODQGKLJKHUHPSOR\HHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ・&UHDWHGJOREDOXQL¿HGDVVHVVPHQWV\VWHPIRUHPSOR\HHVLQNH\SRVLWLRQV③ Next management selection
Reinforced approach to selecting new management candidates by enhancing training for such candidates and expanded scope of human resources assessments④ Global talent development
Augmented existing development programs for global human resources by considering a method of assessing language ability, including conversational prowess| Inauguration of the WSR 2020 Project
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systems and modify employee conduct.
Outline of the Project● Workplaces that inspire job satisfaction/revising human resources systems
・Creation of workplaces that encourage enthusiasm about taking on various challenges, where performance is evaluated fairly and personal value is recognized・(VWDEOLVKPHQWRIV\VWHPVWKDWHQVXUHHPSOR\HHDFKLHYHPHQWVDUHUHÀHFWHGDSSURSULDWHO\LQWUHDWPHQWDQGFUHDWLRQRIHQYLURQPHQWVLQZKLFKRUJDQL]DWLRQDOJURZWKLVOLQNHGWRHPSOR\HHJURZWK● Smart employees
・Formulation of rules for new work styles and improvement of employee digital literacy● 6PDUWRIÀFHV
・Creation of environments in which individuals and groups can exercise their abilities anytime and anywhere● Smart processes
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Basic Personnel Statistics (DIC)

Male
Number of
employees

FemaleOverallMale

Average age

FemaleOverall

Averageyears ofemployment

New
graduates
hired

Male
FemaleOverallMale
FemaleOverallFiscal year 2018

Fiscal year 2019

Fiscal year 2020

2,628
662
3,290
42.5
41.9
42.4
18.4
19.7
18.6
43
19
62

2,640
681
3,321
42.6
42.1
42.5
18.3
19.8
18.6
44
22
66

2,669
691
3,360
42.7
42.5
42.7
18.3
20.1
18.6
56
22
78

Retention rate
(after three
years)

Mid-career hires(percentage of
total new hires)
Separations(voluntary)(number ofindividuals)

Male
FemaleOverallMale
FemaleOverallMale
FemaleOverallMale

Separation rate(voluntary)

FemaleOverall

DIC Report 2021

116

Fiscal year 2018

Fiscal year 2019

Fiscal year 2020

(Fiscal year 2015 hires)(Fiscal year 2016 hires)(Fiscal year 2017 hires)

87.8%
81.0%
86.3%
62
5
51.9%
55
15
70
2.1%
2.3%
2.1%

97.2%
76.9%
91.8%
71
10
44.9%
45
16
61
1.7%
2.3%
1.8%

92.3%
100%
94.0%
52
3
41.4%
33
16
49
1.2%
2.3%
1.5%

Human Resources Management| Respect for Human Rights
The DIC Group actively supports global codes governing human rights,*1LQOLQHZLWKZKLFKLQ¿VFDO\HDULWIRUPXODWHGWKH',&*URXS+XPDQ5LJKWV3ROLF\DQGEHJDQSURPRWLQJUHODWHGLQLWLDWLYHV7KH',&*URXS&RGHRI%XVLQHVV&RQGXFWZKLFKRXWOLQHVVWDQGDUGVWKDW',&
Group employees are expected to observe, lays down provisions prohibiting human rights violations and requiring respect for diversity, two
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pledges to abide by the code.
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human rights and labor. The Company continues to implement related initiatives in all areas of its corporate activities to reinforce respect for human rights
in the human resources management practices of all Group companies and prevent the occurrence of violations.
In response to the Modern Slavery Act 2015,*2 DIC is reinforcing training regarding human rights due diligence,*3FRJQL]DQWRIWKHLVVXHRIKXPDQWUDI¿FNLQJ
and the risks it poses to companies with operations in the United Kingdom. The Company also promotes awareness among DIC Group company executives
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KXPDQULJKWVLQWKHLUVXSSO\FKDLQVUHODWHGULVNVDQGVWHSVWKH\DUHWDNLQJWRDGGUHVVVXFKSUDFWLFHV³0RGHUQVODYHU\´HQFRPSDVVHVGHEWERQGDJHIRUFHGODERUDQGVHUYLWXGHKXPDQWUDI¿FNLQJDQGH[SORLWDWLRQ LQFOXGLQJVH[XDOH[SORLWDWLRQDQGIRUFHGRUJDQGRQDWLRQ *3 +XPDQULJKWVGXHGLOLJHQFHLVDQRQJRLQJULVNPDQDJHPHQWSURFHVVWKDWDFRPSDQ\QHHGVWRIROORZLQRUGHUWRLGHQWLI\SUHYHQWPLWLJDWHDQGDFFRXQWIRUKRZLWDGGUHVVHVLWVDGYHUVHKXPDQULJKWVLPSDFWV| Initiatives in Fiscal Year 2020
$WRWDORI',&*URXSFRPSDQLHVLQ-DSDQDQGRYHUVHDVLPSOHPHQWYROXQWDU\KXPDQULJKWVDQGODERUSUDFWLFHVLQVSHFWLRQV,Q¿VFDO\HDULQLWLDWLYHVIRFXVHGRQ
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| The DIC Group Human Rights Policy
As a member of society that recognizes the importance of respect for human rights and respects the basic human rights of all stakeholders, including its customers, suppliers andemployees, the DIC Group has formulated a human rights policy. Based on this policy, DIC works to increase the human rights awareness of its executives and employees and to
conduct its business activities in a manner that shows respect for human rights.

１．Positioning
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２．Scope of application
This policy applies to all executives and employees of the DIC Group. The Company shall also encourage its business partners and suppliers toadhere to this policy and cooperate with them to advance respect for human rights.
３．Responsibility to respect human rights
7KH&RPSDQ\VKDOOVWULYHWRIXO¿OOLWVUHVSRQVLELOLW\WRUHVSHFWKXPDQULJKWVE\HQVXULQJWKDWLWVEXVLQHVVDFWLYLWLHVGRQRWUHVXOWLQYLRODWLRQVRIWKHKXPDQrights of stakeholders, as well as by preventing human rights abuses in the course of its business. In the event that its business partners or suppliers cause
adverse human rights impacts through their businesses, products and services, the Company—while not directly complicit—shall use its influence toencourage the responsible parties to cease the practices responsible for such impacts.
４．Human rights due diligence
7RIXO¿OOLWVUHVSRQVLELOLW\LQUHJDUGWRUHVSHFWIRUKXPDQULJKWVWKH&RPSDQ\KDVFUHDWHGDKXPDQULJKWVGXHGLOLJHQFHV\VWHPZKLFKLWVKDOOHPSOR\on an ongoing basis to identify and address human rights risks.
Corrective/remedialactions５．
Should the Company cause adverse human rights impacts or should it become evident that it has been complicit in causing such impacts, theCompany shall take appropriate corrective/remedial actions in response.
６．Compliance with applicable laws
The Company shall comply with applicable laws in the countries and territories in which it operates. The Company shall also respect international
human rights principles and work actively to promote these principles.
７．Disclosure and education/training
The Company shall periodically report publicly on the progress of initiatives implemented in line with this policy. To ensure the effectiveness of thispolicy, the Company shall also provide appropriate training to its executives and employees.
８．Dialogue and discussion
The Company shall engage with stakeholders regarding initiatives implemented in line with this policy by creating opportunities for dialogue andpromoting discussion in good faith.
９．Identifying principal human rights challenges
7KH&RPSDQ\KDVVHSDUDWHO\LGHQWL¿HGSULQFLSDOKXPDQULJKWVFKDOOHQJHV,QOLQHZLWKWKLVSROLF\WKH&RPSDQ\VKDOOXVHGXHGLOLJHQFHDVDSSURSULDWH
5HFRJQL]LQJWKLVDVDQRQJRLQJSURFHVVWKH&RPSDQ\VKDOODOVRFRQWLQXHWRUHYLVHDQGDPHQGWKHVHFKDOOHQJHVWRUHÀHFWVRFLDOFKDQJHEXVLQHVVtrends and other factors.

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117

Human Resources Management| Principal Human Rights Challenges Facing the DIC Group%DVHGRQNH\JOREDOVWDQGDUGVUHJDUGLQJKXPDQULJKWVWKH',&*URXSKDVLGHQWL¿HGWKHIROORZLQJDVWKHSULQFLSDOKXPDQULJKWVFKDOOHQJHVLWIDFHVDQG
promotes appropriate due diligence in accordance with its human rights policy. The Group will review these challenges on a regular basis, taking into
consideration factors such as social change and business trends.
（1）Eliminate discrimination

The DIC Group prohibits all types of discrimination, harassment and other practices that undermine the dignity of any individual.
（2）Prevent child labor and forced labor
7KH',&*URXSSURKLELWVWKHXVHRIFKLOGODERUIRUFHGODERUVODYHODERUDQGODERUUHVXOWLQJIURPDQ\IRUPRIKXPDQWUDI¿FNLQJ
（3）Respect basic labor rights
7KH',&*URXSUHVSHFWVEDVLFODERUULJKWVLQFOXGLQJIUHHGRPRIDVVRFLDWLRQDQGHPSOR\HHV¶ULJKWVWRRUJDQL]HDQGWRHQJDJH
in collective bargaining.
（4）$GGUHVVWKHLVVXHRIFRQÁLFWPLQHUDOV
7KH',&*URXSSURKLELWVWKHXVHRIFRQÀLFWPLQHUDOV6KRXOGDQ\UDZPDWHULDOVSXUFKDVHGIURPWKLUGSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH*URXSZLOOUHVSRQGE\DPRQJRWKHUVLPPHGLDWHO\WHUPLQDWLQJWKHSURFXUHPHQWWKHUHRI| The DIC Group’s Human Rights Due Diligence System
The DIC Group has created a human rights due diligence system, which it employs on an ongoing basis.
1）Commit

2）Identify andevaluate impacts3）Implement corrective/remedial
measures, provide training andgauge effectiveness

Demonstrate the Group’s
human rights policy and views

Identify and evaluate human rights risks in theGroup’s business and across its supply chain

Implement measures andgauge effectiveness・Formulate a human rights policy.
・Introduce section on human rights into the
DIC Group Sustainable Procurement Guidelines.
・Reinforce awareness of the policy.

・Encourage voluntary human rights inspections ・Implement corrective/remedial measures.
at Group companies.
・Plan and provide human rights training.
・Identify and evaluate the impact of human・Gauge the eﬀectiveness of measures.
rights risks.

4）Disclose information
Report periodically onhuman rights initiatives
・Provide information via the DIC global website.
・Include information in the DIC Report.
・Publicize using conventional mass media.

| Due Diligence Initiatives to Address Principal Human Rights Challenges
1. Promotion of supply chain due diligence by the Purchasing Department

To ensure that its extended supply chain functions in a socially responsible manner, the Company established the DIC Group Universal Purchasing Policy inEDVHGRQZKLFKLWDOVRIRUPXODWHGSXUFKDVLQJPDQDJHPHQWUHJXODWLRQVDQGWKHDIC Group Sustainable Procurement Guidebook—version 3 of which was
SXEOLVKHGLQ)HEUXDU\²ZKLFKFODUL¿HVLVVXHVLWH[SHFWVVXSSOLHUVWRDGGUHVVLQ8VLQJWKHSROLF\DQGJXLGHOLQHVWKH&RPSDQ\SURPRWHVVXVWDLQDEOH
procurement by ensuring that all suppliers implement improvements and initiatives necessary to ensure sustainable procurement, as well as advances respect for
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2. Initiatives to help realize a sound, viable mica mining industry in India
0LFDKDVDEURDGUDQJHRILQGXVWULDODSSOLFDWLRQVLQFOXGLQJFRDWLQJVFRVPHWLFVHOHFWURQLFVPDWHULDOVDQGFXWWLQJÀXLGVDQGLVPLQHGDURXQGWKHZRUOG7KHXVHRIFKLOGODERULQWKHPLQLQJRIPLFDLQ,QGLDDOHDGLQJSURGXFHUKDVEHHQLGHQWL¿HGDVDFULWLFDOLVVXHIRUXVHUV',&*URXSFRPSDQ\6XQ&KHPLFDOZKLFKRYHUVHHVWKH*URXS¶VSULQWLQJLQNVUHVLQVDQGSLJPHQWVIRUFRVPHWLFVRSHUDWLRQVLQWKH$PHULFDVDQG(XURSHLVD
founding member of the Responsible Mica Initiative, a unique global collaboration established in February 2017 to eradicate child labor in the mica mines of India.
Through participation in this initiative, materials producers and cosmetics companies around the world are working to contribute to the realization of a sound,viable mica mining industry.
3. Establishment of whistle-blowing hotlines and corrective measures by the compliance team
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UHSRUWVRISRZHUKDUDVVPHQWGLVFULPLQDWLRQDQGRWKHULVVXHVWKURXJKWKLVV\VWHP+RZHYHULQWHUQDOLQYHVWLJDWLRQVUHYHDOHGQRVHULRXVYLRODWLRQV$SSURSULDWH
corrective measures were implemented in the receipt of reports.
4. Contact procedures and responses to comments and complaints
The Company has established procedures for suppliers, customers, local communities and other stakeholders to report issues by telephone or through its global website
DQGVWULYHVWRUHVSRQGVZLIWO\ZKHQFRPPHQWVRUFRPSODLQWVDUHUHFHLYHG1RFRPSODLQWVSHUWDLQLQJWRKXPDQULJKWVLVVXHVZHUHUHFHLYHGLQ¿VFDO\HDU

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Human Resources Management| Building Trust with the DIC Employees’ Union',&¶VPDQDJHPHQWDQGUHSUHVHQWDWLYHVRILWVHPSOR\HHV¶XQLRQPHHWUHJXODUO\ZLWKWKHJRDORIHQVXULQJKHDOWK\LQGXVWULDOUHODWLRQVEDVHGRQ
mutual trust. In addition, through labor–management councils and casual management conferences, DIC shares management informationand its vision for the future with union representatives and encourages the frank exchange of opinions. A total of 72.0% of parent company
HPSOR\HHVEHORQJWRWKH',&(PSOR\HHV¶8QLRQ RIHOLJLEOHHPSOR\HHV | Diversity Promotion and Work Style Revolution
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to such considerations as gender,
nationality, physical limitation or age. The Group works to foster a corporate culture that draws on its understanding and respect fordiversity to produce creative ideas and to incorporate the concept of diversity into management, thereby creating workplaces that enhance
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LQGLYLGXDOVWKDWPDNHXSRXUODERUIRUFHZLOOHQDEOHXVWRUHVSRQGWRVRFLDOLPSHUDWLYHVRUHYHQWRFKDQJH',&LWVHOI´7RWKLVHQG',&KDV
identified introducing alternative working arrangements that leverage digital tools, including telework and flextime; shifting the focus ofevaluations from quantity to quality; and providing support for employees who have childcare or nursing care responsibilities or suffer illness
as the key themes of the human rights strategy set forth in its DIC111 medium-term management
plan. DIC is also promoting ESG management to strengthen its management infrastructure, with
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occupied by female employees, the percentage of its overall labor force accounted for by foreign
nationals, and the number of female employees and foreign nationals on its management team.

Targets: Percentage of female employees in management positions in Japan: 5.1% (FY2019) ⇒ 5.9% (FY2021 January achievements) ⇒ 20.0% (FY2025)
Percentage of foreign employees in Japan: 1.0% (FY2019) ⇒ 1.1% (FY2021 January achievements) ⇒ 10.0% (FY2025)
Percentage of executives who are female and/or foreign nationals: 15.0% (FY2018) ⇒ 15.0% (FY2021 January achievements) ⇒ 30.0% (FY2025)

Diversity Road Map
DIC’s future vision, set forth in DIC111: Become a unique global company that is trusted by society• DIC seeks to be a company that realizes corporate value through the promotion of diversity, thereby earning respect
and admiration from the global community. By advancing diversity, DIC is thus advancing value creation and increasing
corporate value, bringing it closer toward achieving the future vision it is working toward under DIC111.

Stage 2 (fiscal years 2019–2021)
Efforts to ensure diverse human resources
are in the right places and creation of work
environments that enable employees tomaximize their capabilities*

Stage 1 (up to and including fiscal year 2018)
Official kick-off, initiatives aimed at promoting
awareness and acceptance of diversity,
promotion of career opportunities for female
employees, work style reform measures andestablishment of a frameworkStage 3
Realization of a diverse management teamcapable of driving innovation and creating value

During this stage, the focus of initiatives
has expanded from solely gender tobecome more broader, encompassing
the many characteristics that makepeople unique.

Putting the right people in theright places around the world
In-house directors and executive officers
Sun Chemical
Asia–Pacific region

Japan
Maximizing Groupcapabilities

Male Japanese nationals

Male foreign nationals

Female Japanese nationals

Female foreign nationals

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119

Greater China

Human Resources Management

1

Hiring Diverse Human Resources

With the objective of securing talented individuals with advanced specialized capabilities, global
perspectives and language capabilities, DIC actively promotes the hiring of international students
completing undergraduate or graduate studies at Japanese universities; Japanese and foreign
nationals completing undergraduate studies at overseas universities; and experienced mid-career
candidates with extensive experience and expertise. At present, approximately 45 foreign nationals
are employed in various capacities at DIC. To support the careers of employees who are foreign
nationals, DIC translates key in-house materials into English. The Company has also begun
providing support related to personnel systems, treatment and improved workplace environments,and has sought to encourage understanding through training and other efforts.

Nationalities of Foreign Employees

1
1
1

1
1
2
2
Breakdown by 18
3
Nationality

3

Number of Foreign Nationals Currently Employed by DIC

4

Sales
positionsTechnical
positions

Department/
divisionadministration

Postedoverseas

Production

Total

2

28

1

8

6

45

8

PRC
ROK
United States
Malaysia
Indonesia
TaiwanThailandIndia
CanadaSpain
Germany
FranceAs someone helping to drive further diversity at DIC, I look forward to contributing to the evolution

VOICE of both the Company and society.

I began looking for a job in Japan while I was working to complete my doctorate here, but not many companies were actively hiring students whose Japanese-language
skills were not particularly good. DIC was one of the few keenly promoting the recruitment of students from overseas. This is truly an outstanding company, with a wide
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allowing me to learn from experts with a variety of backgrounds and grow in my role. I also think DIC is one of the best companies in terms of creating work environments
FRQGXFLYHWRFRQWLQXRXVVHUYLFHIRUIHPDOHHPSOR\HHV,EHOLHYH',&¶VGLYHUVLW\LVZKDWKDVHQDEOHGLWWRUHVSRQGÀH[LEO\WRWKHGUDPDWLFFKDQJHVVZHHSLQJWKHZRUOGFor example, in addition to swiftly reinforcing measures in the workplace to prevent the spread of COVID-19, DIC also quickly embarked on the development of a variety
of products with antiviral functions. As someone helping to drive further diversity at DIC, I look forward to contributing to the evolution of both the Company and society.
Color Materials Technical Division, Central Research Laboratories

Thimthong Narumon

TOPIC
Networking Conference for Non-Japanese Employees
In December 2020, DIC held a networking conference to foster ties among non-Japanese employees. The Company
will continue to organize these conferences on a periodic basis with the idea that it may be constructive for people
who feel alienated or lonely to know they have colleagues with the same concerns.
2QWKHGD\RIWKHFRQIHUHQFHSUHVHQWDWLRQVZHUHJLYHQRQ-DSDQ¶VSXEOLFDQGSULYDWHSHQVLRQV\VWHPVDVZHOODVRQIUHTXHQWO\DVNHGTXHVWLRQVDERXW',&¶VSHUVRQQHOV\VWHPDIWHUZKLFKWKHÀRRUZDVRSHQHGIRUDIUHHGLVFXVVLRQ
Feedback was largely positive, with participants commenting that the event had given them an understanding ofpension systems and enabled them to build networks, and that they looked forward to learning about the career plansof other non-Japanese colleagues.

Expanding Career Opportunities for Women
In line with its commitment to promoting diversity, DIC implements a variety of initiatives to expand career opportunities for female employees.
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2016 the Company has pushed ahead with measures to transform employee mindsets and its corporate culture, as well as to provide training
designed to encourage the drive and determination of female employees and broaden the range of jobs open to women.
2Creating a Framework for Initiatives,Q¿VFDO\HDU',&HVWDEOLVKHGWKHSRVLWLRQRIGLYHUVLW\RI¿FHULQHDFKRILWVEXVLQHVVXQLWVWRFUHDWHDIUDPHZRUNIRULQLWLDWLYHVLQHDFKEXVLQHVVXQLWWKDWUHÀHFWVWKHDFWXDOVLWXDWLRQRQWKHJURXQG7KHLQGLYLGXDOLQFKDUJHRIGLYHUVLW\IRUWKH*URXSDQGWKHEXVLQHVVXQLWGLYHUVLW\RI¿FHUVPHHW
periodically to exchange information, among others, with the aim of raising the standard of initiatives implemented Companywide.

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120

Human Resources Management

Transforming Employee Mindsets and the DIC Corporate Culture
In October 2016, DIC held the Women in DIC Forum, which addressed the issue of career opportunities for female employees and welcomed female
H[HFXWLYHVIURPPXOWLSOH',&*URXSFRPSDQLHVDWLWVFRUSRUDWHKHDGTXDUWHUVLQ7RN\R$SSUR[LPDWHO\HPSOR\HHV²VSOLWHYHQO\EHWZHHQIHPDOHHPSOR\HHVDQGPDOHPDQDJHPHQWOHYHOHPSOR\HHV²SDUWLFLSDWHGLQWKHIRUXP,QWKH¿UVWVHVVLRQIRXUIHPDOHH[HFXWLYHVIURPRYHUVHDV*URXSFRPSDQLHVgave presentations, while in the second session three female employees in senior positions in Japan joined the four speakers in a panel discussion on
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as such is well versed in diversity management.
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-DSDQ/WGDQGH[HFXWLYHRI¿FHUDQGH[HFXWLYHYLFHSUHVLGHQWRI/,;,/*URXS&RUSRUDWLRQ0U<DJL¶VOHFWXUHWRXFKHGRQDYDULHW\RISRLQWVLQFOXGLQJWLSVIRUEULQJLQJRXWWKHEHVWIURPSHRSOHDQGRUJDQL]DWLRQVWKDWKHDFWXDOO\SXWLQWRSUDFWLFHDW/,;,/DQGDERXWXQFRQVFLRXVELDVHVWKDWLPSHGHWKHFDUHHUVRIIHPDOHHPSOR\HHV7KHVHFRQGSDUWRIWKHHYHQWZDVDGLVFXVVLRQEHWZHHQ0U<DJLDQG',&SUHVLGHQWDQG&(2.DRUX,QRWLWOHG³'LYHUVLW\DW',&7KH1H[W&KDOOHQJH´ZKLFKZDVPRGHUDWHGE\<XNLR,VKL]XNDRI1LNNHL,QF,QDGGLWLRQWRDQH[FKDQJHRIYLHZVRQWKHUHVXOWVRI',&¶VGLYHUVLW\DZDUHQHVVVXUYH\WKH
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male employees, and introducing case studies from other companies.
In September 2019, an executive roundtable was held during which reports on developments and achievements from 2016 through 2019 were given and
IXWXUHGLYHUVLW\SURPRWLRQDFWLYLWLHVZHUHGLVFXVVHG'HSDUWPHQWVSHFL¿FDFWLYLWLHVUHSRUWHGRQLQFOXGHGDQHWZRUNLQJPHHWLQJKHOGIRUIHPDOHHPSOR\HHVDQG
an interview with newly appointed female managers in the Production Planning Department, which has a lower percentage of female employees than otherdepartments.

Women in DIC Forum'LYHUVLW\OHFWXUH People First CEO Yosuke Yagi

The Expanding Scope of Positions for Female Employees
6LQFH¿UVWDVVLJQLQJIRXUIHPDOHHPSOR\HHVWROLQHVKLIWMREVDWWKH&KLED3ODQWLQ',&KDV
gradually increased the number of female employees in production and utility control groups
DFURVV-DSDQ$WSUHVHQWWKHUHDUHIHPDOHHPSOR\HHV²LQFOXGLQJ¿YHSHUIRUPLQJVKLIWMREV²
on 14 production lines at seven sites.

Female Employees in Production andUtility Control Groups at DIC Sites
Site
Chiba Plant
Saitama Plant

2008
4 at 1 site

2015
12 at 2 sites

2018
8 at 2 sites

2020
24 at 6 sites

2021
30 at 7 sites

Female employees on the corporate ladder at production sites: Management level: 2, assistant manager: 4,
team leader: 6 (As of April 1, 2021; parent company only)

Sakai Plant
Komaki Plant
Kashima Plant
Hokuriku Plant
Yokkaichi Plant
Total

DIC Report 2021

121

$VRI$SULO

Production Group Utility Control Group

9
8
3
3
1
0
1
25

2
0
0
0
1
2
0
5

Human Resources Management

Initiatives Aimed at Expanding Career Opportunities for WomenTransform corporate culture andthe mindset of management-level
employees

2007
2017

Encourage the drive and determinationof female employees
Expand opportunities for female
employees
Establish systems to supporta healthy work–life balance forfemale employees and encourage
the use thereof● Message from the president● Seminars to promote awareness● Identical uniforms for male and female employees●Training for employees in administrative positions● Seminars to promote awareness among female employees● Introduction of role models● Assignment of female employees to production and sales positions● Inclusion of female employees in regular system of transfers, reassignments and job rotations● Increase in number of women hired● Establishment of systems to support a healthy work–life balance● 3XEOLFDWLRQRIWKH/LEUDZRUN±OLIHEDODQFHVXSSRUWJXLGHDQGLQWURGXFWLRQRIHOHDUQLQJ

program for employees taking leave● Introduction of system allowing management-level employees to limit the locations to which

they will accept transfers● Women in DIC Forum● Diversity seminar for directors and line supervisors● Executive-led lunch seminars for female employees

2018 and beyond

Further expand support
to measures and promoteawareness● Roundtable discussion for directors● Awareness seminars for female employees● Career support seminars for female employees● :RPDQ/HDGHU'HYHORSPHQW3URJUDP :/'3● /DXQFKRIWHOHZRUNV\VWHP● Joint leadership development program with companies in other sectors● ([SDQVLRQRIHOLJLELOLW\IRUÀH[WLPHV\VWHP

DIC Recognized as Nadeshiko Brand for Fiscal Year 2020, Earning Selection
for the Third Consecutive YearIn recognition of its superb achievement in expanding career opportunities for women, DIC was
VHOHFWHGDVD1DGHVKLNR%UDQGIRUILVFDO\HDUWKHWKLUGWLPHLWZDVKRQRUHGXQGHUWKLVSURJUDPZKLFKLVVSRQVRUHGE\-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\DQGWKH7RN\R
6WRFN([FKDQJH 76( 7KH1DGHVKLNR%UDQGLQLWLDWLYHDLPVWRLQWURGXFH76(OLVWHGFRPSDQLHVMXGJHGWREHRXWVWDQGLQJin terms of efforts to empower women in the workplace as attractive stocks for investors whoemphasize medium- to long-term improvements in corporate value with the objective of acceleratingsuch efforts. The initiative assesses approximately 3,600 companies across all TSE sections
based on what they do to promote diversity-conscious management and on their disclosure of
UHODWHGLQIRUPDWLRQDQGVHOHFWV1DGHVKLNREUDQGVLQHDFKLQGXVWU\FDWHJRU\,Q¿VFDO\HDU
FRPSDQLHVZHUHVHOHFWHGDV1DGHVKLNREUDQGVLQFOXGLQJIRXUIURPWKHFKHPLFDOVVHFWRU
3

Advancing the Employment of Individuals with Disabilities

DIC is committed to creating inclusive work environments that help
LQGLYLGXDOVZLWKGLVDELOLWLHVHQMR\DFWLYHDQGIXO¿OOLQJFDUHHUV2QHLQLWLDWLYH
is an internship program, organized in collaboration with special needs
VFKRROVWKDWLVGHVLJQHGWRWUDQVLWLRQLQWRIXOOWLPHHPSOR\PHQW,Q¿VFDO
year 2020, both regular hiring in April as well as needs-based hiring at
individual sites met with success. As of December 31, 2020, individuals
ZLWKGLVDELOLWLHVDFFRXQWHGIRURI',&¶VWRWDOODERUIRUFHQRWLFHDEO\DERYH-DSDQ¶VOHJDOO\PDQGDWHGTXRWDRI
Going forward, DIC will continue working with the Japanese
JRYHUQPHQW¶V+HOOR:RUNSXEOLFHPSOR\PHQWRIILFHVDVZHOODVZLWK
special needs schools and organizations that promote the hiring ofindividuals with disabilities, and will take further steps to enhance work
environments to increase workplace accessibility.

Percentage of DIC’s Total Labor Force Accounted
for by Individuals with Disabilities
2.70%

2.65%
2.58%

2.60%
Percentage of totallabor force accounted forby individuals with disabilities
as of December 31, 2020

2.41%

2.50%

2.65%

2.40%

2.30%

2.20%

Percentage of total labor force accounted
for by individuals with disabilities

2.14%

2.20%

2.06%
2.10%

(Legally mandated quota revised)

2.04%(Legally mandated quota revised)

2.00%

1.90%

1.94%

Japan’s legally mandated quota

1.80%

1.70%

DIC Report 2021

122

13

14

15

16

17

18

19

20 (FY)

Human Resources Management

VOICE I look forward to sharing the basic principles of safe workplace conduct that I have learned with new employees and interns.
,MRLQHG',&(VWDWHLQ$SULODQGZDVDVVLJQHGWRWKH%XVLQHVV6XSSRUW'HSDUWPHQW+RZHYHUDV&29,'VSUHDGQRUPDORSHUDWLRQVLQWKHPDLOURRP
EHFDPHLQFUHDVLQJO\FKDOOHQJLQJ1RQHWKHOHVVGHVSLWHIHHOLQJVRPHZKDWXQHDV\DERXWWKHIXWXUHHDFKWLPHDQLQFUHDVHLQLQIHFWLRQVZDVUHSRUWHGZHKDYHFRQWLQXHGWRFROOHFWDQGGHOLYHUPDLODVZHOODVWRFRRUGLQDWHFRXULHUVHUYLFHV,QWKLVHQYLURQPHQW,KDYHWULHGWRNHHSWZRWKLQJVLQPLQG7KH¿UVWLVWREHVXUH
to always greet colleagues with a smile and a cheerful greeting. The words of gratitude from colleagues in response are a great encouragement. The second
LVWRHPSOR\³SRLQWLQJDQGFDOOLQJ´WKDWLVJHVWXULQJDQGYHUEDOL]LQJLPSRUWDQWLQGLFDWRUVZKLFKLVDNH\SULQFLSOHRIZRUNSODFHFRQGXFWIRUDYRLGLQJPLVWDNHV
that helps ensure the accurate sorting and delivering of internal and regular mail. This means carefully checking the name and department or company of thesender and receiver, and the address for each piece of mail, taking responsibility for preventing erroneous or delayed deliveries.
My goal going forward is to properly convey to new employees and trainees what I have learned over the past year about basic principles of safe workplace
conduct. I will also continue observing these principles in my own work.
Business Support Department, DIC Estate Co., Ltd.

Ryosuke Maruyama

TOPIC
Tokyoto Business Service Reports on the DIC Group,Q',&DQG',&(VWDWHZHUHSUR¿OHGE\7RN\RWR%XVLQHVV6HUYLFH&R/WGRQLWVFRUSRUDWHZHEVLWH7KH
company is a civic-sector entity in which the Tokyo metropolitan government has a 49% stake. In addition to
IHDWXULQJWKH',&*URXS¶VDFWLYHHIIRUWVWRKLUHLQGLYLGXDOVZLWKGLVDELOLWLHVWKHZHEVLWHUHSRUWWRRNDORRNDWWKH
PDLOFROOHFWLRQDQGÀRRUE\ÀRRUGHOLYHU\FRXULHUVHUYLFHFRRUGLQDWLRQDQGWHDGLVSHQVHUPDLQWHQDQFHVHUYLFHVDW
',&¶VFRUSRUDWHKHDGTXDUWHUVLQ7RN\RSURYLGHGE\',&(VWDWHHPSOR\HHV)LOPLQJDQGLQWHUYLHZVZHUHFRQGXFWHG
on-site to show employees with disabilities on the job.

Tea dispenser maintenance

Reemployment after Retirement and Support for Retirement Planning',&KDVGHSOR\HGDV\VWHPWKDWIDFLOLWDWHVWKHUHHPSOR\PHQWXQWLODJHRILQGLYLGXDOVUHDFKLQJUHWLUHPHQWDJH  DQGZLVKLQJWRUHPDLQZLWKWKH
organization. With available options including full-time work, short-time work and work sharing, this system enables reemployed individuals to maximize theirexperience and make full use of their accumulated technological capabilities and specialized expertise, thereby contributing to sustainable growth for the DIC
Group and the training of subsequent generations.
DIC also offers classes for employees within a year of retirement that helps them prepare for life after their careers. These classes provide assistance withretirement planning and education regarding the national pension system, as well as offer retirement lifestyle simulations.
4

Number of Reemployed Individuals

1XPEHURIUHWLUHHV $Individuals seeking
reemployment
1XPEHURILQGLYLGXDOVreemployed B
Reemployment rate B / A

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

Fiscal year 2020

108
92
91
84.3％

69
55
55
79.7％

89
74
70
78.7％

96
81
77
80.2％

92
80
79
85.9％

DIC Report 2021

123

Human Resources Management| Work Style Revolution Initiatives that Support a Healthy Work–Life Balance
DIC views a healthy work–life balance as essential to both self-realization and sustainable corporate growth. Accordingly, from the standpoint of corporate healthmanagement,* the Company continues to expand systems intended to facilitate such a balance.
In response to falling birthrates and lengthening life spans, the Japanese government has launched a drive to promote work style revolution, in line with its belief
that positive workplaces lead to higher productivity, with the aim of helping individuals balance the demands of a career and childcare or nursing care and improving
SURGXFWLYLW\6LQFHZHOOEHIRUHWKLV',&KDVSURPRWHGLQLWLDWLYHVDLPHGDWHQDEOLQJDOOHPSOR\HHVWRUHDOL]HERWKDVDWLVI\LQJZRUNOLIHDQGDIXO¿OOLQJOLIHRXWVLGHZRUN
* An approach to employee health management that emphasizes a corporate management perspective and the implementation of strategic measures.

1

Enhancing Programs that Help Employees Balance the Demands of Work and Home

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program. Since establishing a program to support employees in balancing the demands of a careerand childcare in 2007, the Company has continued promoting measures that make it easier for
HPSOR\HHVWRPDNHXVHWKHUHRI,Q¿VFDO\HDU',&DFTXLUHGWKH.XUXPLQ0DUNZKLFKUHFRJQL]HV
companies that promote initiatives designed to assist employees in raising children. The Company has
also deployed a system that gives regular employees the option to accept or refuse transfers requiringrelocation and, since 2012, a system that allows management-level employees to limit the locations towhich they will accept transfers, making it easier for individuals who are unable to accept transfers thatinvolve relocation because of childbirth, childcare, nursing care or other responsibilities.

.XUXPLQ0DUN&HUWLÀFDWLRQ,Q  ',& ZDV DFFRUGHG
t he Kur umin M ar k, w hic hrecognizes companies that
actively promote initiatives
designed to assist with child
UHDULQJE\-DSDQ¶V0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH

Promoting Measures to Retain Employees with Nursing Care Responsibilities,Q-DSDQRQHRIWKHVRFLDOUDPL¿FDWLRQVRIIDOOLQJELUWKUDWHVDQGOHQJWKHQLQJOLIHVSDQVLVDQLQFUHDVHLQWKHQXPEHURISHRSOHUHTXLULQJQXUVLQJFDUHDVDUHVXOWRIZKLFKPRUHSHRSOH¿QGWKHPVHOYHVKDYLQJWROHDYHWKHLUMREVWRWDNHFDUHRIIDPLO\PHPEHUV
6WHSVWDNHQE\WKHJRYHUQPHQWWRKHOSDGGUHVVWKHVHLVVXHVLQFOXGHUHYLVLQJWKH&KLOG&DUHDQG)DPLO\&DUH/DZLQWRPDNH
LWHDVLHUIRULQGLYLGXDOVWRWDNHOHDYHRUWLPHRIIDQGLQFUHDVLQJEHQH¿WVIRUWHPSRUDU\DEVHQFHVIURPZRUN7RHQFRXUDJHXVHDQG
promote knowledge of its related leave programs, in June 2017 DIC began distributing the Childcare and Nursing Care Handbook.
DIC has also revised the rules of these programs, including making it possible to break up nursing care leave, as well as to extend theperiod over which they may shorten their workday from one year to three years, thereby making them easier for employees to use.
Major Expansion of the Flextime System
7RIDFLOLWDWHÀH[LEOHZRUNVW\OHVLQ¿VFDO\HDU',&UHVROYHGWRVLJQL¿FDQWO\H[SDQGLWVÀH[WLPHV\VWHPDQGLQ$SULOPDGHWKHV\VWHPDSSOLFDEOHWRDOODUHDVRIRSHUDWLRQVRWKHUWKDQSURGXFWLRQÀRRUV7KHV\VWHPPDNHVLWSRVVLEOHIRUHPSOR\HHVWRGHWHUPLQHWKHWLPHDWZKLFKWKH\HQGWKHLUZRUNLQJGD\WRWKHH[WHQWWKDWLWGRHVQRWKLQGHUEXVLQHVVHI¿FLHQF\DVZHOODVWRVLPXOWDQHRXVO\PDNHXVHRIWHOHZRUNZLWKWKHJRDORISURPRWLQJWKHLQGHSHQGHQWH[HFXWLRQRIGXWLHVDQGHQKDQFLQJVHOIPDQDJHPHQWFDSDELOLWLHV

Promoting Telework,Q¿VFDO\HDU',&EHJDQH[SORULQJWKHSRWHQWLDORIWHOHZRUNDÀH[LEOHZRUNDUUDQJHPHQWWKDWHQDEOHVHPSOR\HHVWRZRUNIURPKRPHRUDQRWKHUUHPRWH
ORFDWLRQXVLQJLQIRUPDWLRQDQGFRPPXQLFDWLRQVWHFKQRORJLHV ,&7 WKXVHOLPLQDWLQJWKHWLPHDQGORFDWLRQFRQVWUDLQWVRIWUDGLWLRQDOZRUNDUUDQJHPHQWV7KH
following year, employees and management conducted extensive talks to iron out details. After analyzing and evaluating the results of a trial involving 57
HPSOR\HHVLQ-DQXDU\WKH&RPSDQ\ODXQFKHGWKH',&7HOHZRUN6\VWHPZKLFKLVDYDLODEOHWRDOOHPSOR\HHVUHJDUGOHVVRISRVLWLRQRUZRUNSODFH,QUHVSRQVHWRWKHHPHUJHQFHRI&29,'LQ-DQXDU\WKH',&7HOHZRUN6\VWHP¶VOLPLWRIWZRGD\VSHUZHHNZDVDEROLVKHGDQGWHOHZRUNLPSOHPHQWHGLQSULQFLSOHIRUWKHHQWLUH',&*URXSLQ-DSDQWRKHOSSUHYHQWWKHIXUWKHUVSUHDGRIWKHYLUXV:KHQ-DSDQ¶V¿UVWVWDWHRIHPHUJHQF\ZDV
declared in April, more than 90% of Group office workers, centering on those in sales and management-related departments, were able to continue
performing their jobs without commuting to their normal place of work. This was maintained even after the state of emergency was lifted, in recognition of thereality of COVID-19 as a permanent part of life.
/RRNLQJDKHDG',&ZLOOFRQWLQXHWRFUHDWHV\VWHPVWKDWPDNHLWSRVVLEOHIRUHPSOR\HHVWRFKRRVHDZRUNVW\OHWKDWVXLWVWKHW\SHRIZRUNWKH\GRDV
well as their own personal needs, with the aim of helping encourage a healthy work–life balance. The Company will also further promote the independent
execution of duties to reinforce self-management capabilities, thereby accelerating efforts to galvanize employees and encouraging them to give full play totheir creativity.
Establishment of a System to Help Employees Balance Medical Treatment and WorkIn January 2020, DIC introduced a system to support employees undergoing medical treatment who wish to continue working. To guarantee this system functions effectively,
the Company formulated guidelines to ensure employees making use of this system receive the ongoing support necessary to balance medical treatment and work through jobrelated accommodations and considerations.

DIC Report 2021

124

Human Resources Management

Programs that Help Employees Balance the Demands of Work and Home
&KLOGFDUH/HDYH3URJUDP

The maximum length of leave is until the child reaches the age of 2 years and 6 months, which is one year longer thanthe legally mandated leave period.

/HDYHWR$VVLVWZLWK3DUHQWLQJ3URJUDP

0DOHHPSOR\HHVFDQWDNH¿YHGD\VRISDLGOHDYHGXULQJWKHHLJKWZHHNVIROORZLQJWKHLUFKLOG¶VELUWKWRDVVLVWZLWKSDUHQWLQJ

Childcare While Working Program(PSOR\HHVFDQVKRUWHQWKHLUZRUNGD\E\XSWRWKUHHKRXUVXQWLOWKHHQGRIDFKLOG¶VWKLUG\HDURIHOHPHQWDU\VFKRRO
Employees can also stagger their working hours to accommodate childcare schedules.

Economic support system

This system enables employees on unpaid childcare leave to borrow a portion of their bonuses in advance to pay for,among others, fertility treatment or infant care facility fees.

5HWXUQWRSUHYLRXV RUHTXLYDOHQW SRVLWLRQ

Employees returning from childcare leave must be allowed to return to their previous position or to a position equivalent thereto.

Information sharing topromote program participation',&¶VYLHZVRQVXSSRUWIRUZRUNDQGFKLOGFDUHEDODQFHDVZHOODVDJXLGHWRLWVYDULRXVDYDLODEOHV\VWHPVDQGKRZWRPDNH
XVHRIWKHPDUHSRVWHGRQWKH&RPSDQ\¶VZHEVLWHDQGLQWUDQHW

1XUVLQJFDUHOHDYHV\VWHP

Employees can take such leave for up to one year, exceeding the statutory maximum of 93 days. $VRI-DQXDU\HPSOR\HHV
may also break up leave without restriction.

1XUVLQJ&DUH:KLOH:RUNLQJ3URJUDP

Employees not wishing to take leave while providing nursing care can shorten their workday by up to two hours for a
PD[LPXPSHULRGRIWKUHH\HDUV$VRI-DQXDU\HPSOR\HHVPD\DOVRUHTXHVWWREHH[FXVHGIURPGRLQJRYHUWLPH
without restriction.

/HDYHWRDFFRPSDQ\VSRXVHRYHUVHDV

Employees can take leave in the form of a temporary overseas assignment to accompany a spouse who is scheduled to
be abroad for more than one year. The period of the leave must be more than one year, with a maximum length of three
years. Employees may make use of this system once during their careers.

Relocation limitation system

Management-level employees may limit the locations to which they will accept transfers that involve relocating becauseof childbirth, childcare, nursing care or other responsibilities.

System to help employees balance
medical treatment and work

Employees undergoing medical treatment who wish to keep working can access necessary support in the form of job-related
accommodations and considerations.

+RXUO\DQQXDOSDLGOHDYHV\VWHP(PSOR\HHVPD\WDNHXSWR¿YHGD\VRIDQQXDOSDLGOHDYHLQRQHKRXUXQLWV

Saved paid leave system

Expiring annual paid leave can be saved for up to 30 days and used for a variety of purposes, including nursing care for afamily member, care for a sick child and fertility treatment

Use of the Childcare Leave and Leave to Assist with Parenting Programs
Owing to the introduction of various programs to help employees in balancing the demands of work and home and the creation of an environment that encourages employees
WRWDNHDGYDQWDJHRIVXFKWKHUHRIWKHSHUFHQWDJHRI',&HPSOR\HHVZKRUHWXUQWRZRUNDIWHUPDNLQJXVHRIWKH&KLOGFDUH/HDYH3URJUDPLVFXUUHQWO\,QDGGLWLRQWKH
QXPEHURILQGLYLGXDOVXVLQJWKH/HDYHWR$VVLVWZLWK3DUHQWLQJ3URJUDPZKLFKHQDEOHVPDOHHPSOR\HHVWRWDNHWLPHRIILQWKHZHHNVDIWHUWKHELUWKRIDFKLOGWRDVVLVWWKHLU
partner, has risen.
Thanks to efforts to enhance these systems, the average years of employment for female employees has increased and continues to exceed the average for male employees.
Fiscal year 2015 Fiscal year 2016 Fiscal year 2017 Fiscal year 2018 Fiscal year 2019 Fiscal year 2020
1XPEHURIHPSOR\HHVXVLQJ
WKH&KLOGFDUH/HDYH3URJUDP
1XPEHURIHPSOR\HHVXVLQJ
WKH/HDYHWR$VVLVWZLWK3DUHQWLQJProgram

29
64

35
62

35
77

Average Years of Employment (Including Individuals Seconded to Group Companies)
Average years of employment in fiscal year 2020
Male employees(Years)Female employees Overall

19.8 years 21.0 years 20.0 years

25
20
15
10
5
0

94

10

11

Male employees

12

13

14

15

16

17

18

19

20 (FY)

Female employees

DIC Report 2021

125

21
81

28
86

22
84

Human Resources Management

2

Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave

DIC has deployed an electronic system to manage on-site hours, working hours and approved overtime hours. As a measure to prevent extreme overwork, if
DQHPSOR\HHDSSHDUVOLNHO\WRH[FHHGWKHDJUHHGXSRQRYHUWLPHOLPLW KRXUVPRQWK WKHLUVXSHUYLVRUDQGWKHVHQLRUH[HFXWLYHLQFKDUJHDUHDXWRPDWLFDOO\QRWL¿HG7KHVXSHUYLVRULVUHTXLUHGWRVXEPLWDUHSRUWRXWOLQLQJWKHHPSOR\HH¶VZRUNUHVSRQVLELOLWLHVDQGIDFWRUVEHKLQGWKHH[FHVVLYHKRXUVDQGSUHVHQWLQJ
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working hours.
,QDGGLWLRQWKH&RPSDQ\KDVLQVWLWXWHGDPDQGDWRU\*URXSZLGH³QRRYHUWLPHGD\´HYHU\:HGQHVGD\DQGRQSD\GD\ZKLFKLQ-DSDQLVRQFHDPRQWKDWPRQWKHQGLQDELGWRHQFRXUDJHHI¿FLHQWZRUNSUDFWLFHVDQGIXUWKHUEROVWHUSURGXFWLYLW\ 6LWHVFDQFKDQJHWKHVHGD\VDVDSSURSULDWH (PSOR\HHVDUHDOVR
encouraged to take annual paid leave, with sites recommending appropriate timing for leave and having employees plan dates for such leave.

Average Monthly Overtime Hours Worked and Annual Paid Leave Taken

Average monthly overtime hours
worked per employee
Average annual paid leave granted
Average annual paid leave used
Usage rate for annual paid leave

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

Fiscal year 2020

12.1 hours
18.8 days
11.2 days
59.6％

12.3 hours
19.1 days
12.0 days
62.8％

12.2 hours
18.8 days
12.0 days
63.8％

12.0 hours
18.6 days
12.5 days
67.2％

10.8 hours
18.7 days
13.3 days
70.9％

10.1 hours
18.7 days
11.8 days
63.1％| Measures to Prevent the Spread of COVID-19%HWZHHQ)HEUXDU\DQG'HFHPEHUDWRWDORILQWHUQDOQRWL¿FDWLRQVZHUHVHQWXQGHUWKHKHDGLQJ³0HDVXUHVWRSUHYHQWWKH
VSUHDGRI&29,'´(IIRUWVUDQJHGIURPSURPRWLQJLQWHUQDOLQLWLDWLYHVWRSUHYHQWLQIHFWLRQWRGHWDLOHGLQVWUXFWLRQVUHJDUGLQJLQGLYLGXDO
employee behavior.

| Human Resources Infrastructure Reform
With the rapid expansion of its global operations, DIC recognizes that securing and fostering human resources around the world and creating an
HQYLURQPHQWWKDWHQFRXUDJHVFURVVERUGHUFDUHHUDGYDQFHPHQWDQGPRELOLW\LVHVVHQWLDOWRLQFUHDVLQJFRUSRUDWHYDOXH7RWKHVHHQGVVLQFH¿VFDO\HDU2015 the Company has sought to develop harmonized promotion, personnel evaluation and remuneration systems, the cornerstone of the global human
UHVRXUFHVPDQDJHPHQWIUDPHZRUNIRURYHUVHDV',&*URXSFRPSDQLHVXQGHULWVMXULVGLFWLRQ,Q-DQXDU\',&DQG',&*UDSKLFVXQL¿HGTXDOL¿FDWLRQVWDQGDUGVIRULWVDSSUR[LPDWHO\PDQDJHPHQWOHYHO LHPDQDJHUDQGDERYH HPSOR\HHVUHSODFLQJWUDGLWLRQDODELOLW\EDVHGVWDQGDUGVZLWKUROHEDVHG
standards. As a consequence, consistent duty- and role-based standards are now used for the majority of such employees in the Americas and Europe, the$VLD±3DFL¿FUHJLRQWKH35&DQG-DSDQThe Group has also integrated its evaluation systems for Group company presidents and other executives in Japan and overseas with the goal of
encouraging management approaches that are optimal for the Group as a whole from both a medium- and a long-term perspective. In addition, the Grouphas integrated its global personnel policies to ensure that remuneration is in keeping with local market levels and individual job responsibilities.
Under DIC111, in fiscal year 2019 the Group began advancing efforts to consolidate employee qualification systems worldwide, unify assessment
standards and formats for management-level employees, and develop an IT system to facilitate the construction of a global human resources platform.
Through such efforts, the Company will strive to realize consistent Groupwide global human resources and personnel management systems.

| Securing and Fostering Human Resources
1

Ensuring Fair and Consistent Treatment

7RHQVXUHWKDWWKHHIIRUWVDQGDFKLHYHPHQWVRIDOOHPSOR\HHVDUHUHÀHFWHGDSSURSULDWHO\LQWKHLUWUHDWPHQW',&KDVFRQVROLGDWHGLWVQXPHURXVHPSOR\HHTXDOL¿FDWLRQV\VWHPVLUUHVSHFWLYHRIMREFODVVL¿FDWLRQDQGHGXFDWLRQDOFUHGHQWLDOV7KHVHOHFWLRQRIHPSOR\HHVWRUHFRPPHQGIRU
TXDOL¿FDWLRQLVGRQHWKURXJKVFUHHQLQJEDVHGRQREMHFWLYHVWDQGDUGVWKHUHE\JXDUDQWHHLQJHTXDORSSRUWXQLWLHVIRUSURPRWLRQWRDOOPRWLYDWHG
capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction and ensure that individual employees’ abilities
and achievements are assessed appropriately and reflected in a timely manner. Of note, the Company has introduced MBO—a goalsetting management tool that promotes both corporate growth and employee development—into its personnel evaluation system. Resultsof individual evaluations are fed back in full to employees, including reasoning behind determination, in a transparent process that ensures
HPSOR\HHVDUHODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWVDIC Report 2021

126

Human Resources Management

Settingofdivisiontargets

Setting ofindividual
targets

Interview

ExecutionofdutiesProcess
evaluation

Careerdevelopment
sheet

Individual
2

Results
evaluation

Semiannual
evaluation

Superior

Annualevaluation

Feedback

Bonus

SalaryPromotion

Skillsdevelopment
Appropriate
appointment

Establishment of the Next Management Selection Process,QOLQHZLWKDVWUDWHJ\RXWOLQHGLQ',&WRHVWDEOLVKDSURFHVVIRUVHOHFWLQJWKHQH[WPDQDJHPHQWWHDPLQ¿VFDO\HDUWKH&RPSDQ\
HPEDUNHGRQDWULDODLPHGDWUHDOL]LQJWKHPHFKDQLVPIRUVXFKDV\VWHP7KH+XPDQ5HVRXUFHV6WUDWHJ\'HSDUWPHQWFUHDWHGLQ-DQXDU\ZRUNVWRFODULI\TXDOL¿FDWLRQVIRUNH\SRVLWLRQVDVZHOODVWRH[SORUHSURFHVVHVIRUVHOHFWLQJDQGPRQLWRULQJSURPLVLQJKXPDQUHVRXUFHV
and for the Talent Management Committee to match candidates to positions.
3

New Human Resources Development Policies and a Dramatic Overhaul of the Human Resources Development Programs+DYLQJUHVROYHGWRGUDPDWLFDOO\UHYDPSLWVRYHUDOOSHUVRQQHOFRQ¿JXUDWLRQORRNLQJRUHYHQ\HDUVLQWRWKHIXWXUHLQ¿VFDO\HDU
DIC discontinued its human resources development programs, with the exception of new employee training, global talent development andnew manager training. The Company then commenced a process of verifying the effectiveness of its existing approach to human resources
development, formulating new basic policies and creating new programs.

| New Human Resources Development Policies
DIC recognizes that a critical prerequisite for sustainable growth going forward is having employees—the source of its competitiveness—who demonstratestrong leadership and continuously create new value while responding proactively to changes in the operating environment. Accordingly, the Company has
formulated four new basic policies for human resources development, around which it structured its new human resources development programs.
7KH¿UVWSROLF\LVWREXLOGDV\VWHPDWLFOHDGHUVKLSSLSHOLQH7KLVZLOOHQDEOH',&WRLGHQWLI\IXWXUHPDQDJHPHQWFDQGLGDWHVDQG\RXQJSURVSHFWLYHOHDGHUV
and to make focused investments in the training of such individuals. The second is to promote the global standardization of job skills. The Company will
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to expertly perform a diverse range of jobs. This platform will facilitate the formulation of an individually optimized learning environment that enables
employees to take as many courses as they need. The third policy is to support individual career realization, whereby DIC will work with employees to help
them visualize their own careers and provide crucial related support, including by ensuring the right people are in the right places. The fourth is to cultivate
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positions who understand what is expected of them and are able to routinize responsibilities, and by empowering them to make changes.
New Human Resources Development Programs
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Outline

DIC Leadership Program

Comprehensive program for selected leadership candidates who are critical to ensuring
sustainable growth for DIC in the future; seeks to cultivate advanced management andglobal business skills through training and projects

・Management training
・Prospective leader training

DIC Skills Improvement Program

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learning platform to support the acquisition of advanced skills by motivated individuals

・Global skills training
・Job skills training
・Business skills training
・DIC knowledge training

DIC Career Development Program

Enables individual employees to independently build their careers, helping them improveskills and capabilities while providing access to support from mentors both within andoutside the Company

・³6HOIFDUHHUGRFN´WUDLQLQJ

DIC Action Learning Set

Cultivate self-sufficient employees who are capable of acting on their own and driving
change, and who understand what is expected of them and are able to routinize
responsibilities

・5DQNVSHFL¿FWUDLQLQJ・Action learning set for domestic Group company presidents
・Action learning set for employees assigned to overseas posts

DIC Report 2021

127

CoursesHuman Resources Management| $FFHOHUDWLQJ(IIRUWVWR5HFRQÀJXUH7UDLQLQJ3URJUDPVWR3UHYHQWWKH6SUHDGRI&29,'
Beginning in February 2020, all training for new employees, as well as training to foster global human resources, were moved online to prevent the spreadof COVID-19. While there were challenges in doing this for training usually conducted face-to-face, and programs such as hands-on safety training had to
EHFDQFHOHGIRUWKH\HDUPDQ\SURJUDPVZHUHUHFRQ¿JXUHGWRHQKDQFHWKHLUVXLWDELOLW\IRUDUHPRWHIRUPDWDQGFRQGXFWHGVXFFHVVIXOO\A survey of participants revealed that remote training offers a number of benefits, including elimination of the need to travel to the training venue;
accessibility from a variety of locations accommodates different work styles; each participant gets a front-row seat and can clearly see the faces of othertrainees and the instructor; it is easier to focus on lectures; and use of the chat function makes it easy to ask questions. Drawbacks cited included thatYRLFHVDQGLPDJHVDUHHDVLO\DIIHFWHGE\QHWZRUNHQYLURQPHQWVWKHUHDFWLRQVDQGFRQGXFWRIRWKHUWUDLQHHVLVGLI¿FXOWWRDVFHUWDLQYLVXDOIDWLJXHPDNHVFRQFHQWUDWLRQGLI¿FXOWWKHHQHUJ\DQGDFWLRQVRILQVWUXFWRUVGRQRWWUDQVODWHZHOODQGLWLVGLI¿FXOWWRQHWZRUNZLWKRWKHUWUDLQHHV
'HVSLWHGLI¿FXOWLHVDVVRFLDWHGZLWKKDQGVRQVDIHW\WUDLQLQJDQGRWKHUVLPLODUSURJUDPV',&ZLOOFRQWLQXHZRUNLQJWRPD[LPL]HWKHEHQH¿WVRIWKHUHPRWH
format by, for example, offering pre-training preparation, dividing multi-hour remote training into one-hour blocks, and interspersing remote training sessions
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| Global Talent Development
DIC has positioned the fostering of global human resources as a key theme of DIC111. Accordingly, the Company is taking steps to, among others,
GH¿QHWKHOHYHORIDQGVHWUHTXLUHPHQWVIRUJOREDOKXPDQUHVRXUFHVDVZHOODVWRV\VWHPDWL]HWUDLQLQJ (QJOLVKODQJXDJHDELOLW\FRPSHWHQF\DQGZRUNH[SHULHQFH SURJUDPVThe Overseas Trainee and GCD Programs
DIC has established the Overseas Trainee Program to foster global human resources. Owing to COVID-19, the Company had no choice but to
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shortly thereafter. Under the GCD Program, employees from overseas DIC Group companies are sent to work at Group companies in Japan. Two
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of these programs as soon as possible once the pandemic situation has improved.

Redesigned Remote-Format Global Human Resources Training
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ranges from global standard English-language training to business model creation and design thinking. The third edition of the program, which lasts
approximately one year, was originally scheduled to run from May 2019 through April 2020, but owing to COVID-19 March and April 2020 training
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rather than before a live audience in a large conference room. Virtual presentations require different skills than those given in person, including theability to speak to a camera and the use of effective body language. Team members also found having to present from different remote locations
FKDOOHQJLQJEXWSURJUDPSDUWLFLSDQWVDJUHHGWKDWWKH¿QDOSUHVHQWDWLRQVEURXJKWDQH[WUDOD\HURISDVVLRQ| Health Management,Q OLQH ZLWK LWV +HDOWK 0DQDJHPHQW 'HFODUDWLRQ
the DIC Group works actively to support thephysical and mental health of its employees, aswell as to create a work environment conducive
WRMREVDWLVIDFWLRQ/RRNLQJDKHDGWKH*URXSZLOO
continue to promote imaginative and original healthmanagement measures, recognizing that the healthof its employees is essential to the realization ofsustainable growth.

Health Management Declaration
The DIC Group recognizes that the achievement of its mission to create enhanced
value and utilize innovation to introduce socially responsible and sustainable products
depends on the creation of working environments conducive to the physical and mental
health of the employees responsible for the implementation of related initiatives.
The DIC Group declares that it will work as one to maintain or improve the health of its
employees, as well as to create a work environment conducive to job satisfaction.
Representative Director, President and CEO
DIC Corporation
Kaoru Ino

DIC Report 2021

128

Human Resources Management

Framework for Promoting Health Management
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the supervision of the president and CEO. Going forward, the Group will step up efforts to work with related organizations and promote effective initiatives
across the DIC Group.

Framework

Director, Health management
Representative Director, President and CEO

Manager, Health management
Director in charge, General Affairs and HR Dept.

Supervisor, Health management promotion

Healthcare professionals
Industrial physicians
Infirmary and other medical staff

Health management promotion team

General manager, General Affairs and HR Dept.
ReportJudgment

ProposalApproval

Cooperation

Site general affairs departments
Cooperation

DIC Employees’ Union

Health management promotion organization
Internal and external counselors

General Affairs and HR Dept.

Site health and safety committees
DIC welfare fundCollaboration

DIC Health Insurance Society

Key Health Management Initiatives
No.

Initiative

Details1

Follow-up after annual employee physicals

Based on the results of annual physicals, industrial physicians and nurses extend guidance on health maintenance,
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diseases.

2

Collaboration with company responsible for operating
employee cafeterias to improve employee eating habits

Active efforts are made to support employee health by offering healthy menu choices and providing dietary education,
including information on improving eating habits.

3

Dissemination of health-related information throughhealth-focused newsletters

1XUVLQJVWDIIIURP',&¶V+HDOWKFDUH2I¿FHDQGLQ¿UPDU\LVVXHKHDOWKIRFXVHGQHZVOHWWHUVDQGZRUNWRGLVVHPLQDWHKHDOWKPDQDJHPHQWLQIRUPDWLRQWKDWUHÀHFWVWKHXQLTXHFKDUDFWHULVWLFVRIHDFKVLWH

4

Education aimed at the prevention and early detectionof mental health issues,QGXVWULDOSK\VLFLDQVDFWLYHO\FRQGXFWUDQNVSHFL¿FWUDLQLQJDQGVHOIFDUHWUDLQLQJDLPHGDWSUHYHQWLQJDQGVZLIWO\GHWHFWLQJ
mental health issues.

5

Efforts to prevent lifestyle-related diseases in collaboration
with the DIC Health Insurance Society%DVHGRQWKHUHVXOWVRIDQQXDOHPSOR\HHSK\VLFDOVWKH',&+HDOWK,QVXUDQFH6RFLHW\DQG',&FROODERUDWHWRPDNH
recommendations to those requiring guidance.

6

Systematic stress checks and the provision of follow-up guidanceStress checks are conducted even at Group companies not legally required to do so. Following checks, individuals
discovered to have a high level of stress meet with doctors and where appropriate participate in training provided by industrial
physicians specializing in mental health, among others.

7

Physician-led interviews with extremely overworked employees

Efforts are ongoing to prevent the onset of brain and heart disorders by implementing more stringent management of
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DQG+HDOWK$FW

8

Staging of various events

Various events are staged to promote health maintenance and improvement, including sports tournaments, vascular age
measurement events, walks and family site tours.

9

Promotion of use of annual paid leave

Efforts are ongoing to create an environment that makes it easy for employees to take annual paid leave, and include
recommending appropriate timing for leave and having employees plan leave dates.

10

Reduction of overtime hours through the institution of a “noovertime day”

$PDQGDWRU\³QRRYHUWLPHGD\´KDVEHHQLQVWLWXWHGHYHU\:HGQHVGD\DQGRQSD\GD\ RQFHPRQWKO\DWPRQWKHQGLQ-DSDQ with the aim of curbing overtime and encouraging a physical and mental reset.

11

Efforts to encourage use of childcare and nursing careleave systems

Efforts are ongoing to acquire the next-generation Kurumin Mark and to publish and distribute a handbook on balancing workand nursing care responsibilities, among others.

12

Establishment of a system to help employees balance
medical treatment and work

A system has been established to support employees undergoing medical treatment who wish to continue working, along
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13

Initiatives to prevent the transmission of infectious diseases

Efforts are ongoing to prevent the transmission of infectious diseases, including the implementation of mass influenza
vaccination clinics and the provision of a related e-learning program.

14

Establishment of help desks to provide follow-up services

Permanent internal and external help desks have been set up that enable employees to report or seek advice on mental
health, harassment or other issues and actively follow up on reported matters.

DIC Report 2021

129

Human Resources Management

Promoting Mental Health Care
DIC takes steps to create environments in which employees feel physically and mentally supported and works to ensure that its labor management practices comply
with relevant laws. The Company places a high priority on caring for psychological and emotional well-being and has established a comprehensive mental healthprogram, highlights of which include engaging an in-house occupational psychologist, promoting initiatives aimed at warding off mental health problems and extending
support to ensure a smooth return to work for employees taking leave. In particular, access to counseling provided by an occupational psychologist has had aconsiderably positive impact in terms of ensuring employees get treatment and are able to return to work as quickly as possible.
',&KDVDOVRRIIHUHGYROXQWDU\VWUHVVFKHFNVVLQFH¿VFDO\HDUDQGSURPRWHVDFWLYHV\VWHPDWLFHIIRUWVZLWKWKHJRDORISUHYHQWLQJPHQWDOKHDOWKGLVRUGHUVLQDFFRUGDQFHZLWKUHODWHGOHJLVODWLRQSDVVHGLQ-DSDQLQ¿VFDO\HDU',&DOVRFRQGXFWVVHPLQDUVOHGE\DQLQKRXVHSK\VLFLDQDWVLWHVWKDWKDYHVFRUHGDERYH
a certain level in stress checks and offers counseling aimed at helping employees improve communications with supervisors, colleagues and family members. In
December 2020, online self-care training was provided by specialists to help employees deal with anxiety and uncertainty caused by restraints on social lives andchanges in work styles arising from the protracted COVID-19 pandemic, as well as to strengthen the prevention and early detection of mental health disorders. DIC
will pursue the continued systematic promotion of these initiatives going forward.

Mental Health Initiatives• Guidance from an in-house occupational psychologist
 HQJDJHGDVDQRFFXSDWLRQDOSK\VLFLDQVLQFHILVFDO\HDU
• Internal and external help desks
/LQHFDUHWUDLQLQJ IRUVXSHUYLVRUV• Mental health self-checks as part of training for new employees• Distribution of the Kokoro no Kenko ³3V\FKRORJLFDO+HDOWK´ VHOIFKHFNKDQGERRNWRDOOHPSOR\HHV• Flexible process to support employees returning to work after taking leave
/LQHFDUHWUDLQLQJ7UDLQLQJIRUVXSHUYLVRUVWRKHOSWKHPUHFRJQL]HSURPSWO\ZKHQDQHPSOR\HHLVXQZHOODQGUHVSRQG
appropriately by, for example, recommending guidance or counseling or making workplace improvements.

TOPIC

Kokoro no Kenko
self-check handbook',&(DUQV:KLWH&HUWLÀFDWLRQ',&HDUQHGFHUWLILFDWLRQLQWKHODUJHHQWHUSULVHFDWHJRU\RIWKH+HDOWK 3URGXFWLYLW\2XWVWDQGLQJ(QWLWLHV5HFRJQLWLRQ3URJUDP GXEEHGWKH³:KLWH´ ZKLFKLVRUJDQL]HGE\WKH0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\DQG
1LSSRQ.HQNR.DLJL 17KLVLVWKHIRXUWKFRQVHFXWLYH\HDUWKH&RPSDQ\KDVEHHQFHUWL¿HGXQGHUWKLVSURJUDPZKLFKseeks to shine a spotlight on outstanding enterprises working to advance health and productivity management, creating
an environment that ensures such enterprises gain enhanced public recognition—i.e., from employees, jobseekers,
UHODWHGFRPSDQLHVDQG¿QDQFLDOLQVWLWXWLRQV²DVRUJDQL]DWLRQVWKDWDSSURDFKHPSOR\HHKHDOWKDQGSURGXFWLYLW\IURPD
management perspective and promote strategic initiatives.
In addition to looking at whether enterprises stipulate health management in their corporate mission and disclose pertinent information, the White 500 program assesses performance based on threecriteria, namely, grasp of employee health-related issues and consideration of actions, establishment of a foundation for the practical implementation of health and productivity management measures
and work engagement,*2 and promotion of efforts to help ensure the physical and mental health of employees.
DIC will continue to implement measures designed to promote physical and mental health as part of its commitment to creating work environments that empower employees to reach their full potential.
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prolong the healthy life expectancy of citizens and to ensure sound medical services in Japan.
*2 $FRQFHSWXVHGWRPHDVXUHHPSOR\HHV¶PHQWDOKHDOWKZRUNHQJDJHPHQWLVGHVFULEHGDVDSRVLWLYHIXO¿OOLQJZRUNUHODWHGVWDWHRIPLQGWKDWLVFKDUDFWHUL]HGE\YLJRUGHGLFDWLRQDQG
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EHLQJDFWLYHO\HQJURVVHGLQRQH¶VZRUN

Initiatives to Support Employee Health',&DQDO\]HVWKHUHVXOWVRIHPSOR\HHV¶DQQXDOSK\VLFDOVDQGSURYLGHVDVVLVWDQFHWRHPSOR\HHVIRUZKRPOLIHVW\OHLPSURYHPHQWVKDYHEHHQUHFRPPHQGHG
by providing introductions to hospitals and clinics, and individual guidance on lifestyle improvements. With the aim of promoting healthy eating, the employee
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*HQHUDO$IIDLUVDQG+5'HSDUWPHQWWKH+HDOWKFDUH2I¿FHDQGWKHFRPSDQ\UHVSRQVLEOHIRUWKHRSHUDWLRQRI
the cafeteria collaborated to develop this menu based on the health needs of employees, as well as to devise
innovative ways of presentation, including producing distinctive signage that encourages recognition and
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ORZFKROHVWHURO',&,URGRUL&DUHDOVRPDNHVXVHRIIDPLOLDUPHDOFRPSRQHQWVVXFKDVkobachi VPDOOERZO 
VLGHGLVKHVWUDQVIRUPHGLQWRDQXWULHQWSDFNHG³6XSSOHPHQW%RZO´WRSURPRWHJUHDWHUDZDUHQHVVRIIRRG¶Vrole in improving overall health.
7KHFRUSRUDWHKHDGTXDUWHUV¶HPSOR\HHFDIHWHULDDOVRXVHV6SLUXOLQD²DQRWHGVXSHUIRRG PDQXIDFWXUHGE\a DIC Group company—as a core cooking ingredient.
DIC will continue implementing measures designed to help ensure the physical and mental health of its employees
as part of its commitment to creating work environments in which all employees can fully exercise their abilities.
7KHWHUP³VXSHUIRRG´LVXVHGWRGHVFULEHVWDQGDUGIRRGVZLWKDQH[FHOOHQWEDODQFHRIQXWULHQWVWKDWSURYLGHKHDOWKEHQHILWVDQGIRRGVFRQWDLQLQJ VSHFL¿FQXWULHQWVDQGRULQJUHGLHQWVJRRGIRUKXPDQKHDOWKDIC Report 2021

130

A healthy cafeteria menu selection

Human Resources Management

COVID-19 Countermeasures Implemented by the Corporate Headquarters’ Employee Cafeteria
The employee cafeteria at corporate headquarters in Tokyo took a variety of steps to prevent the spread of COVID-19 and ensure peace of mind for users.
Examples of Employee Cafeteria Countermeasures● Installed acrylic partitions, in line with public health standards, to separate patrons● Provided sanitizer at tables and encouraged the cooperation of patrons in disinfecting before use● Promoted staggered use time to prevent congestion due to crowding● Insisted patrons wash and sanitize their hands before entering the cafeteria● Temporarily closed the self-serve deli corner● Attached antiviral tape to high-touch points such as buttons on tea dispensers

TOPIC',&*LYHV3UHVHQWDWLRQDW&RQIHUHQFHRI6SHFLÀF0HDO6HUYLFH)DFLOLWLHV:LWKWKHDLPRILPSURYLQJWKHQXWULWLRQDOPDQDJHPHQWFDSDELOLWLHVRIVSHFL¿FPHDOVHUYLFHIDFLOLWLHV GH¿QHGDVFDIHWHULDVRUUHVWDXUDQWVZLWKDPD[LPXPVHDWLQJFDSDFLW\RISHRSOH WKH7RN\RPHWURSROLWDQJRYHUQPHQWVWDJHVDFRQIHUHQFHLQWURGXFLQJFDVHVWXGLHVRIVXFKIDFLOLWLHV',&ZKLFKUHFHLYHGD¿VFDO\HDU
7RN\R0HWURSROLWDQ*RYHUQRU¶V$ZDUGIRU1XWULWLRQDO,PSURYHPHQWDW6SHFL¿F0HDO6HUYLFH)DFLOLWLHVJDYHDSUHVHQWDWLRQRQLWVLQLWLDWLYHVDWWKH)HEUXDU\
FRQIHUHQFHKHOGDW7RPLQ+DOOLQ6KLQMXNXUHSUHVHQWLQJWKH¿VFDO\HDUDZDUGZLQQHUV',&¶VSUHVHQWDWLRQWLWOHG³+HOSLQJ,PSURYHWKH+HDOWKRI(PSOR\HHV´
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³6XSSOHPHQW%RZO´

Comment The corporate headquarters’ employee cafeteria has taken a variety of steps during the
COVID-19 pandemic to improve operations and prevent the spread of infection.

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EHHQZHOOUHFHLYHGDQGDVRI)HEUXDU\ZHZHOFRPHGDSSUR[LPDWHO\JXHVWVDGD\DQGRIIHUHGVHYHQGDLO\PHQXVHOHFWLRQVLQFOXGLQJRQH³KHDOWK\VHW´RSWLRQ+RZHYHUZLWKWKHHPHUJHQFHRI&29,'DQGVRFLHW\¶VJHQHUDOVKLIWWRWHOHZRUNLQJWKHQXPEHURIJXHVWVDWWKHHQGRI0DUFKZDVKDOIWKDWRIWKH
SUHYLRXVPRQWK:KHQWKH¿UVWVWDWHRIHPHUJHQF\ZDVGHFODUHGLQ7RN\RWKHQXPEHUGURSSHGWRURXJKO\DGD\*LYHQWKHVHPDVVLYHFKDQJHVZHKDGQRFKRLFHEXWWRDOVRFXWFDIHWHULDVWDIIE\DERXWKDOI7KLVRIFRXUVHZDVDGLI¿FXOWGHFLVLRQEXWLQVRIDUDVZHKDYHEHHQ
given the responsibility of running this place, we did not have a choice. But when I see our remaining staff going about their work with a smile, I am encouraged.
Despite the harsh environment, after multiple meetings with the people responsible on the DIC side, the decision was made to keep the cafeteria open—
a nod to its importance to the health and energy of DIC employees. We were also able to agree on a reduced menu of four choices, which changed daily. In
addition, we implemented a number of decisive measures to prevent the spread of the pandemic.

● 7HPSRUDULO\FORVHGWKHGHOLFRUQHUZKHUHHPSOR\HHVVHUYHWKHPVHOYHVXVLQJDVLQJOHVHWRIWRQJV WKHGHOLFRUQHULVSRSXODUEXWJLYHQWKHSRWHQWLDOULVNVZHPRYHGHDUO\WRVKXWWKLVGRZQ● Eliminated some seating to help patrons maintain a proper social distance● Installed plastic sheeting to prevent droplet infection on the meal service line
● ,QVWDOOHGVRFLDOGLVWDQFLQJÀRRUPDUNLQJVZKHUHSDWURQVOLQHXSWRFROOHFWPHDOV● Switched to individually packaged condiments● Actively put up proprietary posters highlighting infection prevention and hygiene practices to foster greater awareness of theimportance of safety and security● 3UHSDUHGDQRSHUDWLQJPDQXDOWKDWFRPSOLHVZLWK',&UXOHVIRUGHDOLQJZLWKLQIHFWLRQVDPRQJ$LP6HUYLFHV¶HPSOR\HHVRUFRUHVLGHQWIDPLO\PHPEHUV$FFXUDWHO\SUHGLFWLQJWKHQXPEHURIPHDOVWKDWZLOOEHQHHGHGHYHU\GD\KDVEHFRPHGLI¿FXOWXVLQJFRQYHQWLRQDOPHWULFVEXWZHDUHZRUNLQJWRDGMXVWÀH[LEO\
on a daily basis by asking the Company to let us know each morning how many employees are on-site that day. This has helped us reduce food loss andunnecessary processes as much as possible.
7KDQNVWRWKHXQGHUVWDQGLQJDQGFRRSHUDWLRQRIPDQ\SHRSOHZHVXFFHHGHGLQDGMXVWLQJWKHIRUPDWRIWKHFRUSRUDWHKHDGTXDUWHUV¶HPSOR\HHFDIHWHULD:H
will continue to increase measures taken to prevent the spread of COVID-19 to ensure employees are able to dine safely and with peace of mind. We will also
continue exploring new offerings that will ensure a delicious and enjoyable dining experience even with the current limited menu.
Manager, Aim Services Co., Ltd.

DIC Report 2021

131

Emi OtaSustainable Procurement

SDGs Goal 12

Promoting Socially Responsible Procurement Across the Supply Chain
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Promote sustainableprocurement.

Goals for fiscal year 2020

Achievements in fiscal year 2020

Reduce procurement-related risks byclosely inspecting the sustainability
ef for ts — including responses to
e nv i r o n m e nt a l r e g u l at i o n s — o f
suppliers of key materials for which
the DIC Group is heavily dependent
on the PRC and India.

In the PRC, risks to business
continuity of inspections of the needfor major suppliers to acquire
environmental emissions permits*1
and information on the consolidationof chemical industrial parks wereassessed. Inspections in India werep o s t p o n e d t o f i s c a l ye a r 2 0 21
because of COVID-19.

Continue to seek out new suppliersand conduct on-site inquiries using ther ev i s e d D I C G r o u p S us ta i na b l e
Procurement Guidebook.

The revised DIC Group Sustainable
Procurement Guidebook was publishedin February 2020 in Japanese, English
and Chinese. On-site inquiries based on
the revised version were conducted for
major suppliers.

Evaluation

Goals for fiscal year 2021★★

Reduce procurement-related risks byclosely inspecting the impact of thetightening of regulations andconsolidation of chemical industrial
p a r ks i n t h e PRC a n d I n di a o nmanufacturers of key raw materials,
as well as the status of suchmanufacturers’ sustainability efforts.

★★

Use the revised DIC Group Sustainable
Procurement Guidebook (DIC) and the
Ec oVadis* 2 tool (Sun Chemic al) to
conduct on-site inquiries and ensure agrasp of suppliers’ overall ESG initiatives.

*1 These permits are nationwide standard authorizations that all companies were required to achieve by the end of fiscal year 2020.
*2 EcoVadis maintains an information platform providing ESG ratings and a performance improvement tool for global supply chains.

Basic Approach to Sustainable Procurement
Having recognized the increasing importance of addressing global issues related to human rights, climate change and water risk, among others, as social
imperatives, the DIC Group promotes socially responsible procurement practices. To ensure its extended supply chain functions in a socially responsible
manner, in 2008 the Group established the DIC Group Universal Purchasing Policy, based on which it later formulated purchasing management regulations
DQGFODUL¿HGLVVXHVLWH[SHFWVVXSSOLHUVWRDGGUHVV8VLQJWKHDIC Group Sustainable Procurement Guidebook, revised in February 2020, the Group promotes
sustainable procurement across its supply chain by ensuring that all suppliers implement improvements and initiatives as necessary. Group companies in-DSDQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFROODERUDWHWRHQVXUHVXVWDLQDEOHSURFXUHPHQWRQDJOREDOEDVLVFor more information, please visit WEB https://www.dic-global.com/en/csr/stakeholder/partner.html

The DIC Group Universal Purchasing Policy
Guided by an action policy established to realize the DIC Group’s basic sustainable procurement
principles, the Purchasing Department adheres to the following guidelines in dealing with suppliers:

The DIC Group Sustainable
Procurement Guidelines❷ An appropriate purchasing process and the building of relationships of mutual trust❶ Compliance with laws/social norms❷ Human rights and work environments❸ Safety and health❹ Consideration for the environment❺ Information security❻ Appropriate quality and safety and technological

The DIC Group, as a good partner for suppliers, will build long-lasting, mutually trusted relationships with
VXSSOLHUVDQGZRUNWRJHWKHUZLWKWKHPIRUPXWXDOKDUPRQ\DQGEHQH¿WZKLOHFRPSO\LQJZLWKUHOHYDQWregulations/social norms, domestic and overseas, and pursuing adequate quality and prices.

❼ 6WDEOHVXSSOLHVDQGÀH[LEOHUHVSRQVHVWRFKDQJH❽ Promotion of sustainability and sustainable❶ Fair and transparent business practices

The DIC Group will implement fair and open purchasing activities with suppliers based on global
perspectives, without the constraints of conventional commercial customs.

❸ Satisfying environmental/safety needs

The DIC Group will take responsibility as an exemplary corporate citizen for environmental affairs,
occupational safety, human health and product quality, always take into account changes in society andimplement environment-friendly purchasing activities.
❹ Challenge the creation of new value

In order to respond at a high level to a new value sought by society, the DIC Group will proactively
challenge the creation of such value together with suppliers, with whom the same goal can be shared,
and strive to grow together with them in a sustainable manner.

DIC Report 2021

132

improvements

procurement initiatives

Sustainable Procurement| Encouraging Sustainable Procurement
Based on the DIC Group Universal Purchasing Policy and incorporating requirements contained in guidebooks put out by external organizations, including the Japan Electronics
and Information Technology Association (JEITA), in 2010 DIC formulated the DIC Group CSR Procurement Guidelines. To address increasingly urgent and evolving expectations
UHJDUGLQJWKHVXVWDLQDELOLW\RIFRPSDQLHV¶SURFXUHPHQWSUDFWLFHVWKHVHJXLGHOLQHVZHUHUHFHQWO\PRGL¿HGDQGUHQDPHGWKH',&*URXS6XVWDLQDEOH3URFXUHPHQW*XLGHOLQHVNotable revisions were made to sections on the formulation of a human rights policy, the management of chemical substances, minimization of impact on the environment, theHI¿FLHQWXVHRIZDWHUUHVRXUFHVDQGHQHUJ\WKHHVWDEOLVKPHQWRIPHGLXPWHUPWDUJHWVIRUUHGXFLQJJUHHQKRXVHJDVHPLVVLRQVDQGWKHIRUPXODWLRQRI%&3VWRJXDUDQWHHVWDEOH
supplies. With the aim of compelling suppliers to observe these guidelines, as well as to comply with social imperatives outlined by the Responsible Business Alliance (RBA) andthe TCFD, the Group has also prepared the DIC Group Sustainable Procurement Guidebook, version 3 of which was published in February 2020.
The Group uses the guidebook to conduct assessments and on-site inquiries and to promote awareness among suppliers worldwide. A separate mechanism exists for taking
the results of sustainability assessments into account when selecting new suppliers. The Group has also formulated the DIC Group Green Procurement Guidelines, in line withwhich it obliges suppliers to ensure the stringent management of chemical substances. In addition, the Group entreats suppliers to develop and release products that have less ofan impact on the environment, promote green procurement and lower the environmental impact of the materials they procure—and the packaging and transport, production andengineering thereof—by reducing resources and energy used, decreasing the weight and expanding the useful lifespan of, and reducing CO2 emissions from, such materials.

| The DIC Group Green Procurement Guidelines
In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurement ofmaterials containing hazardous substances in seven categories.*17KHJXLGHOLQHVPDQGDWHWKHVXEPLVVLRQRID',&5DZ0DWHULDOV6XUYH\DQ6'6DQG
a chemSHERPA,*2 as well as a DIC Group Green Procurement Guidelines Survey, when purchasing raw materials, thereby creating a system for eliminating
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*1  6XEVWDQFHVWKHSURGXFWLRQRIZKLFKLVSURKLELWHGDVRXWOLQHGLQ$UWLFOHRI-DSDQ¶V,QGXVWULDO+HDOWKDQG6DIHW\$FW  6XEVWDQFHVGHVLJQDWHGDVFODVVVSHFL¿HGFKHPLFDOVXEVWDQFHV
LQ-DSDQ¶V$FWRQWKH(YDOXDWLRQRI&KHPLFDO6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF  6XEVWDQFHVGHVLJQDWHGIRUPRQLWRULQJXQGHU-DSDQ¶V$FWRQWKH(YDOXDWLRQRI&KHPLFDO
6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF  &KHPLFDOVXEVWDQFHVWKHSURGXFWLRQRIZKLFKLVDOUHDG\SURKLELWHGDVGHWDLOHGLQ-DSDQ¶V$FWRQWKH3URWHFWLRQRIWKH2]RQH/D\HU
7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHV R]RQHGHSOHWLQJVXEVWDQFHVOLVWHGLQWKH0RQWUHDO3URWRFRO   6SHFL¿HGSDUWLFXODWHVGHQRWHGLQ-DSDQ¶V$LU3ROOXWLRQ&RQWURO$FW  6SHFL¿HGSRLVRQRXVVXEVWDQFHVLQGLFDWHGLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FWDQG  6SHFL¿HGVXEVWDQFHVGHWDLOHGLQWKH6WRFNKROP&RQYHQWLRQRQ
Persistent Organic Pollutants.
*2 FKHP6+(53$LVDVFKHPHGHVLJQHGWRIDFLOLWDWHWKHDFFXUDWHDQGHI¿FLHQWVKDULQJRILQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVLQSURGXFWVDFURVVWKHHQWLUHVXSSO\FKDLQ',&EHJDQXVLQJFKHP6+(53$LQODWH¿VFDO\HDU

| Advance Assessment of New Suppliers,QDGGLWLRQWRUHTXLULQJVXEPLVVLRQRIWKHIRXUPDQGDWRU\GRFXPHQWVOLVWHGDERYHDVZHOODVD&RQÀLFW0LQHUDOV6XUYH\',&FRQGXFWVFRPSUHKHQVLYH
advance assessments of major new suppliers, including from a CSR perspective.

| Supplier Self-Evaluations
In accordance with the DIC Group Sustainable Procurement Guidebook, the DIC Group asks suppliers to evaluate themselves by completing aquestionnaire, which it uses to ascertain the status of suppliers’ sustainable procurement practices. The questionnaire further segments the Group’s eightprocurement guidelines into 45 issues, including consideration for human rights and work environments, acquisition of certification under ISO 14001,
implementation of green procurement and promotion of sustainable procurement to secondary suppliers.
DIC Group Sustainable Procurement Guidebook (Version 3, published in February 2020) (English)
WEB

https://www.dic-global.com/pdf/about/purchase/dic_sc_csr_en.pdf| Analyzing the Results of Questionnaires
Between June 2020 and February 2021, the DIC Group
used version 3 of the DIC Group Sustainable Procurement
Guidebook, which was published in February 2020, to
conduct assessments for 198 suppliers, accounting for
more than 81% of its procurement spending. In addition
to analyzing and assessing questionnaire responses, theGroup provided feedback and where necessary requested
corrective measures, using written comments or remoteinterviews because of COVID-19.

Assessment Distribution Chart (198 Suppliers)
1,000
900

Number of suppliers

800

Cumulative Number ofSuppliers Assessed(June 2020–February 2021)

600

56

500
400
300

25

200
100
0

Note: Between November 2013 and December 2019, assessments were conductedusing version 1 and then version 2 of this guidebook for a cumulative total of
764 companies, accounting for 90%-plus of procurement spending.

73

700

2

21

10 11

Below 2.0 2.0〜2.5 2.6〜2.9 3.0〜3.5 3.6〜3.9 4.0〜4.5 4.6〜5.0

ScoresFeedback sheet

Equivalent to more than 81% ofprocurement spending

Low

Note: Based on DIC’s analysis of questionnaire responses,
88% of suppliers assessed to date scored 3.0 or
higher on the Group’s 5.0-point scale.

198
DIC Report 2021

133

High

Sustainable Procurement| Conducting On-Site Inquiries)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSSURYLGHGIHHGEDFNWKURXJKRQVLWHLQTXLULHVRUZULWWHQFRPPHQWVWRVXSSOLHUV,QDQRQ
VLWHLQTXLU\WKH*URXSDQGWKHVXSSOLHUFRQ¿UPWKHVHOIHYDOXDWLRQSURYLGHGYLDWKHTXHVWLRQQDLUHDQGGLVFXVVFRUUHFWLYHPHDVXUHV2WKHUHIIRUWVLQFOXGH
LQWURGXFLQJH[DPSOHVRI*URXS(6*LQLWLDWLYHVWRDVVLVWWKHHIIRUWVRIVXSSOLHUVWRDFKLHYHVXVWDLQDELOLW\,Q¿VFDO\HDURQVLWHLQTXLULHVZHUHQRW
conducted due to COVID-19.

| Global Procurement Initiatives,Q¿VFDO\HDUWKH',&*URXSFRQWLQXHGZRUNLQJWRIRUWLI\XQGHUVWDQGLQJDPRQJFHUWDLQ*URXSFRPSDQLHVXVLQJYHUVLRQRIWKHDIC Group Sustainable
Procurement Guidebook and conduct on-site inquiries for certain key suppliers. Sun Chemical began to survey suppliers using the EcoVadis tool. Goingforward, DIC and Sun Chemical will continue to exchange views on future sustainable procurement issues at meetings of the Sustainability Committee.
Group company Siam Chemical Industry once again achieved a silver medal in the EcoVadis assessment for the second consecutive year.

| Ensuring the Sustainable Procurement and Use of Raw Materials
The DIC Group promotes the sustainable use of raw materials from a medium- to long-term perspective. This includes giving consideration to a wide range
RIIDFWRUVLQFOXGLQJFOLPDWHFKDQJHDQGUHVRXUFHFRQVHUYDWLRQDQGFRQWLQXLQJWRVHDUFKIRUELRGHULYHGDQGUHF\FOHGUDZPDWHULDOV/RRNLQJDKHDGWKH
Group will expand the global application of its sustainable raw materials initiatives.

| Responsible Procurement of Minerals
7KH',&*URXSKDVIRUPXODWHGD%DVLF$SSURDFKWRWKH5HVSRQVLEOH3URFXUHPHQWRI0LQHUDOVUHFRJQL]LQJWKHLPSRUWDQFHRISURFXULQJWKHVHFULWLFDO
resources in a responsible manner and engaging with suppliers to address this challenge throughout its supply chain.

Basic Approach to the Responsible Procurement of Minerals
To avoid any complicity in the funding of armed groups, or in child labor or other human rights abuses, in areas of conflict—including the
Democratic Republic of Congo and its neighboring countries—or high-risk areas,* the DIC Group surveys suppliers of minerals such as tin,tantalum, tungsten and gold to ensure the responsible procurement thereof across its entire supply chain. Should it discover the use of minerals
PLQHGLQFRQGLWLRQVRIFRQÀLFWRUDVDUHVXOWRIKXPDQULJKWVDEXVHVWKH*URXSZLOOWDNHLPPHGLDWHFRUUHFWLYHDFWLRQV
7KH(8&RQÀLFW0LQHUDOV5HJXODWLRQGH¿QHV³KLJKULVNDUHDV´DVDUHDVLQDVWDWHRIDUPHGFRQÀLFWIUDJLOHSRVWFRQÀLFWDUHDVRUDUHDVZLWKZHDNRUQRQH[LVWHQWJRYHUQDQFHDQGVHFXULW\such as failed states, all of which are characterized by widespread and systematic violations of international law, including human rights abuses.

,QOLQHZLWKWKLVDSSURDFKWKH*URXSXVHVWKH5HVSRQVLEOH0LQHUDOV,QLWLDWLYH 50, ¶V&RQÀLFW0LQHUDOV5HSRUWLQJ7HPSODWH &057 WRVXUYH\suppliers of tin, tantalum, tungsten and gold, and the Cobalt Reporting Template (CRT) to survey suppliers of cobalt, across its entire supply
chain. Going forward, the Group will take additional steps, including further expanding the scope of surveys, in response to evolving social
imperatives. As of December 2020, responses had been received for more than 90% of the items currently procured by the Group in Japan.
This initiative is ongoing.

| Promoting Awareness In-House
The DIC Group provides regular training for in-house purchasing personnel, including point of hire, when transferred and prior to meetingwith customers. In February 2020, the Group posted the revised version of the DIC Group Sustainable Procurement Guidebook on the DIC
intranet to promote awareness and held related presentations at overseas Group companies.

VOICE We are working to build partnerships with suppliers through sustainable procurement.
In addition to manufacturing and selling inks, DIC Graphics provides solutions that encompass the proposal and sale of products
VRXUFHGIURPRWKHUPDQXIDFWXUHUV0\GHSDUWPHQWLVLQFKDUJHRISURFXULQJVXFKSURGXFWVZKLFKDUHGLYHUVHLQQDWXUHDQGLQFOXGH
VROYHQWVXVHGLQLQNVSULQWLQJSODWHVDQGFKHPLFDOFOHDQLQJDJHQWVXVHGRQSULQWLQJÀRRUVDVZHOODVHTXLSPHQWWKDWKHOSVFXVWRPHUV
reduce labor requirements. We currently work with approximately 300 suppliers. Sustainable procurement initiatives are essential tobuilding effective partnerships with these companies. Supplier inquiries have traditionally focused on considerations such as quality,
price and stable supply capabilities, but we recognize the increasing importance of sustainable procurement, which incorporates ESGSHUVSHFWLYHVWRRXUHIIRUWVWR¿QGLQJDQGEXLOGLQJSDUWQHUVKLSVZLWKSURPLVLQJVXSSOLHUVManager, Raw Materials Management, Supply Chain Management Group, DIC Graphics Corporation

DIC Report 2021

134

Kazunori Karasawa

Business Models that Respond to Social Imperatives

SDGs Goals 8, 9 and 11

Cultivating Next-Generation Businesses
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2020

Achievements in fiscal year 2020

Contribute to the realization of asust ainable soc iet y by foster ing
nex t- generation businesses that
anticipate technological changes.

Through participation in a national project
seeking to advance the recycling ofplastics with the aim of achieving adecarbonized, circular economy, the DIC
Group formulated a vision for anext-generation packaging business.

Pa r t i c i p ate i n t r a d e s h o w s f o r key
customer industries in Japan andoverseas to strengthen the DIC brand andpromote digitization to improve efficiency.

The DIC Group participated in major
trade shows that were held virtually, as
well as held online seminars, making
use of digital technologies to create
opportunities to strengthenc om m uni c at i o ns w i t h c usto m e r s
despite COVID-19.

Propose solutions - or iented
businesses that respond to social
imperatives.

Evaluation

Goals for fiscal year 2021★★★

Capitalize on core competencies toincrease the probability of success fornext-generation businesses from theperspective of both social value andec onomic value. Contr ibute to thecreation of a new social ecosystem withthe goal of realizing a circular economy.

★★★

Par ticipate in trade shows for key
customer industries in Japan andoverseas and make use of digitaltechnologies to identif y potential
issues and propose solutions-oriented
business ideas.

| New Pillar Creation: Promoting New Businesses that Respond Accurately to the Changing Needs of Society
The DIC Group sees one of its key missions as being to achieve sustainable growth both for itself and society by helping to address social
imperatives related to climate change, the digitization of society, urbanization and longevity by identifying key business domains andproviding products that respond to such imperatives.
With the goal of swiftly realizing this mission, DIC has outlined two basic business development strategies in its medium-term management
plan, DIC111: Value Transformation and New Pillar Creation. In line with the strategy of Value Transformation, the Group will advancequalitative reforms in existing core businesses by shifting to businesses with differentiated high-value-added products and with more of a
focus on social value. New Pillar Creation emphasizes creating new businesses by identifying areas where ESH-related issues and socialchanges intersect with the DIC Group’s competencies.

| Designing a Framework for New Pillar Creation
7KH',&*URXS¶VVXFFHVVLQSURYLGLQJQHZSURGXFWVDQGVHUYLFHVWKDWEHQH¿WVRFLHW\DQGFUHDWLQJQHZ
Priority Areas of the New
businesses will depend on how well it understands the sources of its competitiveness and whether it canBusiness Development
Headquarters
swiftly and accurately identify social imperatives and needs. The ability to take responsibility for seeing
the development process through to commercialization is particularly crucial. Accordingly, rather than
① Electronics
depending on a conventional marketing-led approach to development, the Group has designed a framework② Automotive
centered on a deployment team that is charged with facilitating the design of new businesses by overseeing③ Next-generation packaging
everything from planning and development through to production and sales, thereby ensuring that efforts to④ Healthcare
create new businesses optimize overall capabilities and are strategically effective.
+DYLQJHVWDEOLVKHGWKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVWRVHUYHDVWKHGHSOR\PHQWWHDPDQGLGHQWL¿HGIRXUSULRULW\EXVLQHVV
areas, the DIC Group will leverage its ingenuity to advance the creation of new products that are useful to society and next-generation
businesses with the potential to become mainstays.
The DIC Group will also bring together people from technical and sales backgrounds with detailed understanding of these business areasand people with experience in related industries with the aim of enhancing expertise and communications capabilities, as well as make active
use of open innovation—including through participation in initiatives involving collaboration between industrial concerns and academia andE\FDSLWDOL]LQJRQH[WHUQDOUHVRXUFHV²WRSURPRWHWKHWLPHO\GHYHORSPHQWDQGFRPPHUFLDOL]DWLRQRISURGXFWVWKDWEHQH¿WVRFLHW\

DIC Report 2021

135

Business Models that Respond to Social Imperatives| Examples of New Pillar Creation
1

Flake Alumina Filler that Imparts Outstanding Strength and Heat Dissipating Properties and Is
Expected to Contribute to the Proliferation of CASE Vehicles and 5G-Enabled Devices

The growing importance of the CASE (Connected, Autonomous, Shared and Electric)* concept and thedeployment of the 5G cellular telecommunications standard continue to drive the trend toward eversmaller components with more sophisticated performance features in both the automobile and electronics
industries. As a consequence, the dissipation of heat generated inside equipment is an increasingly
important consideration. Alumina fillers, which offer superb thermal stability, are used to impart heatdissipating properties to automotive and electronics equipment components. DIC recently developed a
GLVWLQFWLYHDOXPLQD¿OOHUV\QWKHVL]HGXVLQJDQRULJLQDOSURFHVVWKDWXQOLNHFRQYHQWLRQDODOXPLQD¿OOHUV²ZKLFKFRPSULVHVSKHULFDORULUUHJXODUSDUWLFOHV²ERDVWVH[FHOOHQWFU\VWDOOLQLW\DQGKLJKDVSHFWUDWLRÀDNHshaped particles. Accordingly, greater strength can be achieved with the addition of a smaller amount,
thereby helping reduce weight. As a result, use of this filler not only improves the performance ofcomponents but also reduces energy use and CO emissions arising from their production.

CeramNexTM $3ÀDNHVKDSHGDOXPLQD¿OOHU

7KHZRUGVIURPZKLFKWKHDFURQ\P&$6(LVIRUPHGGHVFULEHIRXUNH\DUHDV²YHKLFOHFRQQHFWLYLW\DXWRQRPRXVGULYLQJVKDUHGPRELOLW\DQGHOHFWUL¿FDWLRQ²LQZKLFKQH[WJHQHUDWLRQWHFKQRORJLHVDQGVHUYLFHVDUHGH¿QLQJWKHIXWXUHRIWKHDXWRPRELOHLQGXVWU\2

Development of Thermoplastic Composites with Antiviral and Antibacterial Properties for Use with 3D Printers

Owing to technological innovations in modelling, together with the increasing diversification and sophistication of materials, 3D printertechnologies, applications for which have expanded from prototypes to finished products, have been attracting considerable attention inrecent years. With the spread of COVID-19 driving consumer concern for proper sanitization, calls have increased for the use of antiviral andantibacterial products in all locations, not only in hospitals and public facilities. The DIC Group recently succeeded in developing thermoplastic
composites with antiviral and antibacterial properties for use with 3D printers. These materials—the effectiveness of which has been provenin tests conducted in accordance with the ISO’s standard for antiviral and antibacterial activity—suppress the growth of certain viruses andbacteria on the surface of products in which they are used. Moreover, these composites are made with polyurethane resin, which boasts
RXWVWDQGLQJÀH[LELOLW\DQGDEUDVLRQUHVLVWDQFHDQGWKXVRIIHUSURPLVHIRUXVHLQSURWHFWLYHJHDUIRUPHGLFDOQXUVLQJFDUHDQGSXEOLFK\JLHQH±
related applications, including face shields and plastic masks. In addition, these composites are expected to be used in molded products that
require antiviral treatment and that must be customized to the needs of individual customers. Looking ahead, DIC will continue working tocontribute to the realization of a safe, secure and comfortable society by expanding its marketing focus to include such diverse industries aselectronics and electrical appliances, sports equipment, household goods, housing and building materials, and automobiles.
3

R&D Aimed at Developing Advanced Plastic Materials Recycling Technologies and Helping Realize a Circular Economy

7KH',&*URXSKDVLGHQWL¿HGDQXPEHURIVRFLDOLPSHUDWLYHVUHODWHGWRZDVWHSODVWLFDQGPDULQHSODVWLFV²LVVXHVRIPDMRUFRQFHUQZRUOGZLGH²DV
challenges that it has a responsibility to address under its sustainability strategy and is stepping up pertinent initiatives. Recently, DIC commenced
demonstration testing as part of the New Energy and Industrial Technology Development Organization (NEDO) to develop materials recycling
SURFHVVHVDVSDUWRI1('2¶V,QQRYDWLYH3ODVWLF5HVRXUFH&LUFXODWLRQ3URFHVV7HFKQRORJ\'HYHORSPHQW3URMHFWIRU¿VFDO\HDU7KH&RPSDQ\is participating in the development of materials regeneration processes and conducting basic research on the impact of packaging materials such
DVLQNVDQGDGKHVLYHVRQWKHSURSHUWLHVRIUHF\FOHGSODVWLF',&ZLOODOVRXVHWKHUHVXOWVRIVXFKUHVHDUFKWRSURPRWHWKHGHYHORSPHQWRIORZ±
HQYLURQPHQWDOLPSDFWLQNVDGKHVLYHVDQGRWKHUSURGXFWV3DUWLFLSDWLRQLQ1('2¶VSURMHFWZLOOHQDEOHWKH&RPSDQ\WRFRQWULEXWHVLPXOWDQHRXVO\WR
resolving the issue of plastic waste and achieving the practical implementation of advanced plastic resource recycling.

TOPIC
Leveraging CVC to Work to Build a Sustainable Future,Q',&HVWDEOLVKHGDFRUSRUDWHYHQWXUHFDSLWDO &9& XQLWWKDWLVFKDUJHGZLWKVHDUFKLQJWKHJOREH
for start-ups boasting unique technologies, compelling business models or disruptive innovations that may
contribute to society and to the longevity of the DIC Group. Or particular note, the unit looks for start-ups
positioned to strive in the age of sustainable business. One such example is Checkerspot, Inc., in which DIC
LQYHVWHGLQZKLFKXVHVPLFURDOJDHDVDGLUHFWUHSODFHPHQWIRUSHWUROHXPEDVHGUHVRXUFHVWRFUHDWH
materials that facilitate the production of more sustainable high-performance products. From its approachto product design, which incorporates considerations for end-of-life disposal, to its use of social media to
JDXJHFRQVXPHUV¶DI¿QLW\IRUHFRORJ\WKHHQYLURQPHQWDQGVXVWDLQDELOLW\DVZHOODVWRWUDFNWKHLUUHDFWLRQVCheckerspot has created a business model that is revolutionary on many fronts. In line with its New Pillar
Creation strategy, DIC will continue to actively leverage CVC as a route to open innovation with the aim ofbuilding partnerships with companies to create new businesses that help address key social imperatives.

DIC Report 2021

136

Skis made from algae-derived polyol produced by Checkerspot

New Technology Development and Value Creation

SDGs Goals 9 and 12

Proposing Solutions that Leverage Core Technologies
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2020

Achievements in fiscal year 2020

Enhance ability to develop products
and technologies that facilitatecontribution to a sustainable society.

• Accelerate collaboration among global
technology bases in the development ofstrategic products and new technologies.
• Make use of compounding technologies, open
innovation and AI to hasten the developmentof technologies that create added value.

Accelerate efforts to develop productsthat contribute to sustainability.

Promote the development ofenvironment-friendly products
and services.

Evaluation

Goals for fiscal year 2021

• Various facilities collaborated to promote R&D.
• Steps were taken to foster specialists in AI
and to promote collaboration with specialized
third-party AI firms.

★★

• Accelerate collaboration among global
technology bases in the development ofstrategic products and new technologies.
• Make use of compounding technologies,
open innovation and AI to hasten thedevelopment of technologies that create
added value.

• Efforts led to the development of flexible
packaging materials made from recovered
PET bottles, as well as of biomass inks andquick-acting cobalt-free driers for coatingsand printing inks.
• Environment-friendly products accounted for
59% of overall product sales.

★★

Accelerate efforts to develop productsthat contribute to sustainability.

| Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including
those in the areas of optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies in suchareas as polymer synthesis, compounding and formulation, and surface treatment, to develop high-value-added products that contribute toa sustainable society. The Group is also building a portfolio of next-generation products and new technologies by integrating technologicalresources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

| 6SHFLÀF,QLWLDWLYHVDQG$FKLHYHPHQWVThe DIC Group is promoting the development and use of clean technologies. The Group is shifting toward biomass and other materials with
reduced environmental impact—notably energy-saving, water-based and solvent-free materials, as well as materials for the electronics,
packaging and graphics, and other customer industries—that improve the environmental performance of the products in which they are used,which it has positioned as environment-friendly products. In Japan, the Group devotes approximately 50% of its technological resources tothe development of such products.

Development of New Technologies, Products and Solutions to Support Business Portfolio Transformation
Segment
Value
Transformation

Core Technologies
Polymer synthesis
Organic synthesis
Crystallization

Organic
molecular
designResin curing
Polymer
designCompounding and formulation

Composite
technology
OpticsDispersion
×
and
color
Solid/liquid dispersion
AdhesionOpen innovation
Applicability
×
assessment
Molding
Rheology
Thorough use of(Coating/printing/molding/adhesion)
IT (AI, MI)
BasicTechnologies

Film formation

Liquid/liquid dispersion

Surface treatment

Packaging &Graphic

Next-generation packaging inks and coatings,
functional packaging adhesives,
industrial-use jet inks, others

Color &
Display

Pigments for color filters, pigments for cosmetics,
effect pigments, natural colorants, LC materials,
next-generation display materials, others

Functional
Products

Sustainable polymers, environment-friendly PPS
compounds for automotive components,
high-performance industrial adhesive tapes, others

Business area

New Pillar
Creation

Coloring

Creating and Adding Depth to Basic Technologies
Development of sustainable technologies and high-performance materials

DIC Report 2021

137

TargetTargetElectronics

Technologies and functional materials that support
the spread of digitization

Automotive

Technologies and functional materials that underpin
efforts to transform the automotive industry

Next-Generation
Packaging

Packaging materials that help reduce food loss
and support sustainability

Healthcare

Microorganism and cell culture technologies
with applications extending from food safety toadvanced medical care

New Technology Development and Value Creation

Products for Use in Electronics Equipment
In the area of displays, the DIC Group has recently developed a variety of new products, including green and blue pigments for color¿OWHUVXVHGLQKLJKGH¿QLWLRQQH[WJHQHUDWLRQ2/('VDQGKLJKO\UHOLDEOH36$/&VWKDWERDVWRXWVWDQGLQJUHVSRQVHWLPHIRU.WHOHYLVLRQV
Achievements to advance applications for LC technologies include the development of smart windows and LC antennas. Newly developed
synthetic resins include a highly heat-resistant novolac resin for use in resists that are compatible with development using mildly alkaline
solutions. In industrial tapes, the Group recently developed an ultrathin tape for smartphones that offers excellent adhesiveness and easy
removability.
Products for Packaging and Graphics Applications
5HFHQWDFKLHYHPHQWVLQWKHDUHDRISDFNDJLQJPDWHULDOVLQFOXGHDVHULHVRIGU\ODPLQDWLQJDGKHVLYHVIRUÀH[LEOHSDFNDJLQJPDGHXVLQJUDZ
materials derived from chemically recycled post-consumer PET bottles and a series of visually appealing Nashiji (pear-skin textured) matte¿OPVZLWKDVXUIDFHUHPLQLVFHQWRIWUDGLWLRQDO-DSDQHVHSDSHUWKDWDUHPDGHZLWKELRPDVVSODVWLF7KH*URXSDOVRSUHVVHGIRUZDUGZLWKPDUNHWLQJHIIRUWVIRUHDV\SHHOVHDODQW¿OPOLGPDWHULDOVIRUFRQWDLQHUVXVHGWRKROGVDODGVVROGDWFRQYHQLHQFHVWRUHVWKDWKHOSVUHGXFH
IRRGORVV,QWKHDUHDRIJUDYXUHLQNVWKH*URXSREWDLQHGFHUWL¿FDWLRQXQGHU-DSDQ¶V%LRPDVV0DUNSURJUDPIRUUHYHUVHSULQWLQJRQJHQHUDOSXUSRVH¿OPVDQGSULQWLQJRQVKULQN¿OPDQGSDSHUDVZHOODVSURPRWHGWKHH[SDQVLRQRILWVOLQHXSRIHQYLURQPHQWIULHQGO\SURGXFWV,Q
the area of ultraviolet (UV)-curable inks, DIC developed several new series that comply with the Japan Printing Ink Makers Association’s
1HJDWLYH/LVW 1/  YROXQWDU\VWDQGDUGVIRULQNVXVHGRQIRRGSDFNDJLQJ 2YHUVHDVWKH6XQ&KHPLFDO*URXSH[SDQGHGLQWRVXFKDUHDVDV
compostable adhesives, food-contact inks, deinking agents and products with a high biomass content.

| $*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
DIC’s R&D organization in Japan comprises the Technical Management Unit, which is responsible for R&D connected directly to businesses; the R&D
Management Unit, which is responsible for adding depth to existing and fostering new basic technologies; and the New Business Development Headquarters,
which is charged with creating strategic new businesses and commercializing business units’ next-generation product groups. These entities promote the global
development of products and technologies in collaboration with the R&D components of DIC Group companies around the world. These include DIC Graphics;
the Sun Chemical Group’s research centers in the United States, the United Kingdom and Germany; Qingdao DIC Finechemicals Co., Ltd., which conducts
comprehensive R&D tailored to market needs in the PRC; printing inks technical centers, polymer technical centers, solid compound technical centers and
SLJPHQWWHFKQLFDOFHQWHUVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQWKH)LQH&KHPLFDO7HFKQLFDO&HQWHU±.RUHDDQGDQDOJDHUHVHDUFKFHQWHULQWKH8QLWHG6WDWHV
,Q¿VFDO\HDU',&HVWDEOLVKHGWKH'DWD6FLHQFH&HQWHUWRKRXVHLWVKLJKO\WUDLQHGGDWDVFLHQWLVWVDQG$,HQJLQHHUV7KLVQHZIDFLOLW\ZLOOVWUHQJWKHQWUDLQLQJIRUKXPDQUHVRXUFHVLQWKHDUHDVRI$,DQG0,FROODERUDWHZLWKVSHFLDOL]HGWKLUGSDUW\$,¿UPVDQGDFFHOHUDWHHIIRUWVWRLPSURYHWKHHI¿FLHQF\RI5 '

| Promoting Environment-Friendly Products
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its products are friendly to the environment, DIC promotes the development of products and new technologies that are useful to society and works to increase the weightingof environment-friendly products in its portfolio, by reducing the volume of hazardous substances it uses, focusing on products that are less hazardous and products thatfacilitate recycling, and realizing safer production processes that generate less waste and use less energy. The Group has established internal rules for designating products“environment-friendly” and works to increase the weighting of products that have
Evaluation Sheet for Environment-Friendly Products
HDUQHGWKLVGHVLJQDWLRQLQLWVSRUWIROLR,QILVFDO\HDUHQYLURQPHQWIULHQGO\Department:
Prepared by:
Prepared on:
products accounted for 59% of all products put out by DIC and subsidiary DIC
Product to be Evaluated:
Evaluation
Graphics. The Group also strives to maintain a solid grasp of laws and regulations
Description
Certifying Standards
Item
Energyin different countries and territories, and of trends in environmental measures—
Reduction of energy inConsumption
production, transportation, etc.
thereby ensuring its ability to design products that comply with diverse regulations
Reduction of use of nonMaterials to
renewable materials, nongoverning the use of chemical substances in different markets—and conducts
be Usedrecyclable materials, etc.
environmental assessments on a continuous basis.
Hazards
Product with lower toxicity, etc.
For printing inks, adhesives and other products used in food packaging, which theAmount ofReduction of environmentally
Waste
Group supplies to customers around the world, the DIC Group has established aconcerned substances, etc.
Generated
global product stewardship team. The team shares information on regulations andRemarks:
Evaluator
relevant topics from different markets, as well as promotes awareness thereof andprovides education. Knowledge thus gained is incorporated into product design
6LQFH  ',& KDV XVHG D SURSULHWDU\ V\VWHP IRU GHVLJQDWLQJ HQYLURQPHQWIULHQGO\ SURGXFWV DQGDQGXVHGWRSURGXFHFRPSOLDQFHFHUWL¿FDWHVDFURVVWKHVXSSO\FKDLQZKLFKDUH
uses a proprietary sheet to evaluate products based on energy consumption, materials to be used,hazards and waste generated, as well as to conduct life cycle assessments.
essential for customers worldwide.
Average off

DIC Report 2021

138

Coefficient

Subtotal

New Technology Development and Value Creation

Introducing the DIC Sustainability Index
To ensure that stakeholders understand the true worth of DIC Group products and solutions that address social imperatives, in addition to
being environment friendly, the Group introduced a proprietary sustainability index. The Group will begin using the DIC Sustainability Index in¿VFDO\HDU

Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean technologies designed to help resolve critical global
environmental issues. Product divisions promote the development of clean technology–related products for individual target markets that
OHYHUDJHGLVWLQFWLYH',&FDSDELOLWLHV2YHUDOODQQXDOVDOHVRIVXFKSURGXFWVFXUUHQWO\DPRXQWWRDSSUR[LPDWHO\ELOOLRQ
7KH',&*URXSLVFRQVFLRXVRIWKHQHHGWRSURPRWHWKH³5V´ ³5HGXFH5HXVH5HF\FOH´ IRUUHVRXUFHV7KH*URXSLVZRUNLQJWRKHOSUHGXFHPDWHULDOVXVHGE\LWVFXVWRPHUVLQVXFKDUHDVDV¿OPIRUEUHDGSDFNDJLQJDQGPDNLQJSURGXFWVWKLQQHUZKLOHPDLQWDLQLQJVWUHQJWKTo enhance the recyclability of plastic packaging, the Group is developing and launching deinking agents and other innovative products. The
Group is also taking active steps to help reduce waste plastic and marine plastics, recognizing these as challenges that, as a manufacturer of¿QHFKHPLFDOVLWKDVDUHVSRQVLELOLW\WRDGGUHVV| Innovation through Compounding
Building on its fundamental pigment and resin dispersion and formulating technologies, realized through the production of printing inks,
DIC has succeeded in combining materials with different properties and performance characteristics to develop groundbreaking products
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IRU3(7¿EHUVDQGWKHUPRSODVWLFUHVLQV7KH*URXSZLOOFRQWLQXHWRKDUQHVVLWVGLVWLQFWLYHFRPSRXQGLQJFDSDELOLWLHVWRWUDQVIRUPLWVGLYHUVH
technologies into competitive advantages with the aim of driving innovation.

| Protecting Intellectual Property
Recognizing the effective use of intellectual property as indispensable to new technology development and value creation, a key management challenge,
business groups and technical and intellectual property teams are working as one to advance intellectual property strategies. Capitalizing on this approach,
the DIC Group is actively employing an open and closed strategy to build a robust patent portfolio. The Group is also focusing efforts on the use of patent
search and analysis and the gathering of highly precise information with the aim of capitalizing on patent landscapes and other intellectual property
information as key management assets.
',&¶VHIIRUWVWRUHLQIRUFHSURWHFWLRQRILWVLQWHOOHFWXDOSURSHUW\DUHDOVRDWWUDFWLQJQRWLFHRXWVLGHWKH&RPSDQ\,Q¿VFDO\HDU',&ZDVVL[WKLQDUDQNLQJ
RIFRPSDQLHVLQWKHFKHPLFDOVLQGXVWU\LQ-DSDQLQWHUPVRISDWHQWDVVHWVRZQHGFRQGXFWHGE\DQLQGHSHQGHQW¿UP ',&UHJLVWHUVDQDYHUDJHRIQHZ
SDWHQWVDQQXDOO\:KLOHWKLVLVVPDOOFRPSDUHGWROHDGLQJFKHPLFDOV¿UPVWKH&RPSDQ\UHFHLYHGDKLJKVFRUHIRUWKHRYHUDOOVFDOHRILWVSDWHQWDVVHWVUHÀHFWLQJWKHTXDOLW\DQGKLJKSUR¿OHRIWKHSDWHQWVLWKROGVDIC is also emphasizing the improvement of employees’ intellectual property literacy to bolster respect for intellectual property rights, in line with its basic
policy on compliance, and offers e-learning programs for all employees designed to protect against intellectual property risk. DIC will continue to actively
protect its intellectual property portfolio with the aim of ensuring sustainable growth in the years ahead.
3DWHQW5HVXOW&R/WG

VOICE We developed an adhesive for packaging materials made from recovered PET bottles.
With companies’ growing awareness of the need to contribute to the achievement of the SDGs, the importanceof actively promoting environmental protection and reducing the waste they generate have taken on greater
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friendly DICDRY LX-RP series of adhesives, which are made from recovered post-consumer PET bottles. This
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design, which was a process of trial and error, we worked to improve product value from a customer perspective
through meticulous inspections of PET bottle recycling processes, safety and recycling facilities. Looking forward,
we will apply technologies developed in this effort to further expand our product lineup.
Packaging Materials Technical Group 1, Packaging Materials Technical Division, DIC Corporation

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Tsukiko Takashima

Harmony with the Community and Social Contributions

SDGs

Goals 3 and 4

Adding Color & Comfort to Lifestyle

Basic Approach to Social Contribution
Based on its Guidelines for Social Contribution Activities, established in fiscal year 2009, the DIC Group works to ensureharmony with local communities and individuals through activities aimed at building a strong relationship with society.

The DIC Group’s Guidelines for Social Contribution Activities
In line with its Color & Comfort by Chemistry management vision, the DIC Group will promote social contribution initiatives inthree areas: Business activities, culture and education, and communities and society.

Business activities
The DIC Group will offer products and services that contribute to the development of a sustainable society and protection of
the global environment from the viewpoint of “CSR through business activities.”

Culture and education
The DIC Group will engage in activities that will contribute to the development and promotion of culture, the arts, science andeducation, including fostering next-generation human resources in areas such as the culture of color and chemistry.

Communities and society

The DIC Group will strive to coexist harmoniously with local communities to develop a relationship of mutual trust. Moreover, the Group will
provide an environment that enables employees to engage in voluntary contribution activities in their respective local communities.

| Principal Initiatives
Publication of the Guidebook for the Color Universal Design–Recommended Color Set
The DIC Group is actively involved in R&D in the area of color universal design (CUD), as well as in expanding public awareness and understanding of CUD’s importance. In 2007, the Group,in cooperation with the Japan Paint Manufacturers Association, the Industrial Research Institute of Ishikawa and the Color Universal Design Organization, embarked on a project to create theColor Universal Design–Recommended Color SetXQGHUWKHVXSHUYLVLRQRIWKH8QLYHUVLW\RI7RN\R,QGHYHORSLQJWKHFRORUVHWWKHRUJDQL]DWLRQVFRQGXFWHGUHSHDWHGYHUL¿FDWLRQWHVWVXVLQJ
study participants with various types of color vision to adjust proposed colors, a process that facilitated the creation of a set of colors that are relatively easy to distinguish regardless of ability to
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values to further enhance usability. The organizations also published a guidebook on effective use of the set and has worked to promote understanding and awareness.
)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSSDUWLFLSDWHGLQDMRLQWLQGXVWU\±DFDGHPLFUHVHDUFKSURMHFW'XULQJWKLVSHULRG&KLED8QLYHUVLW\WKH&HQWUDO5HVHDUFKLaboratories and DIC Color Design gave presentations on joint research on the color appearance of red spot colors used in printed warnings and other important information on packaging
and on the use of color in an aging society at academic conferences in Japan and overseas.
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LQKDUPRQ\ZLWKWKHODQGVFDSH,Q¿VFDO\HDUWZRQHZFRORURSWLRQV DZDUPRUDQJH\\HOORZDQGDFRRO\HOORZLVKJUHHQ ZHUHLQWURGXFHGIRUWKHQHZSDYLQJ$OVRLQ¿VFDO\HDU
',&WRRNSDUWLQDSURMHFWWRUHYLVHWKH-,6VWDQGDUGIRUVDIHW\FRORUV -,6= ZLWKWKHJRDORIFKRRVLQJFRORUVWKDWFDQEHGLVWLQJXLVKHGE\SHRSOHZLWKGLYHUVHFRORUYLVLRQ$VDPHPEHU
RIWKHRULJLQDOGUDIWLQJFRPPLWWHH',&ZDVLQYROYHGLQVHWWLQJUHFRPPHQGHG&0<.YDOXHVIRUSURFHVVSULQWLQJZKLFKKDGQRWSUHYLRXVO\EHHQSURYLGHGDQGFRQWLQXHVWRFRRSHUDWHLQ
initiatives aimed at promoting awareness.
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5HFHQWO\WKH&RPSDQ\WRRNSDUWLQYHUL¿FDWLRQIRUWKHVHWWLQJRI5*%YDOXHVIRUVFUHHQGLVSOD\VIRUDFRORUVFKHPH ¿YHFRORUV GHYHORSHGWRFRQYH\KHDY\UDLQZDUQLQJOHYHOVLQDQHDV\WRXQGHUVWDQGPDQQHUDQGDQQRXQFHGLQ0D\E\-DSDQ¶V&DELQHW2I¿FH,QWKHIRUPXODWLRQRI&0<.YDOXHVIRUWKHVDPHFRORUVFKHPHZKLFKZHUHDQQRXQFHGLQ0DUFK',&*UDSKLFVFRRSHUDWHGQRWRQO\E\YHULI\LQJFDQGLGDWHFRORUVEXWDOVRE\SULQWLQJDFRORUFKDUWIRUXVHLQWKHYHUL¿FDWLRQSURFHVV
Used extensively in signage and infrastructure, CUD is playing an increasingly important role in everyday life. Its broader application is also expected to enhance safety and convenience.

Color scheme developed to convey heavy rain warning levels in an easy-to-understand manner
6RXUFH&DELQHW2I¿FH-DSDQZHEVLWHKWWSZZZERXVDLJRMSLQGH[HKWPODIC Report 2021

140

&RORUFKDUWIRUXVHLQYHUL¿FDWLRQHarmony with the Community and Social Contributions

Visiting Science Lab Program
In line with the Japanese government’s efforts to promote career education initiatives, as well as to help curb a decline in the popularity of science among children,
DIC and DIC Graphics conduct visiting science labs at public elementary schools. Through this program, the DIC Group seeks to spark children’s interest inscience and encourage them to realize the close relationship between science and their everyday lives.
Designed with the aim of making science fun for children and helping them understandhow science benefits society, the lab entails experiments in synthesizing pigments andplanographic printing, that is, printing from a flat surface. Since launching this initiative inWKHWZRFRPSDQLHVKDYHSURYLGHGFODVVHVDWHOHPHQWDU\VFKRROVIRUDSSUR[LPDWHO\VL[WKJUDGHUV,Q¿VFDO\HDUVDQGWKH*URXSDOVRFRQGXFWHGYLVLWLQJVFLHQFHODEVIRUHOHPHQWDU\school children as part of the Tohoku University Graduate School of Engineering’s Science
Campus project. The labs were well received by both participating children and their parents.
,Q¿VFDO\HDUWKH',&*URXSPDGHWKHGHFLVLRQWRSRVWSRQHYLVLWLQJVFLHQFHODEVWRKHOSSUHYHQWWKHVSUHDGRI&29,'7KH*URXSORRNVIRUZDUGWRUHVWDUWLQJWKLVLQLWLDWLYHRQFH
the pandemic has subsided.

Visiting science lab

Initiatives Led by the Central Research Laboratories
DIC’s Central Research Laboratories supports education by offering a variety of programs for local high schools that leverage DIC’s unique capabilities,
including lectures for Seishin Gakuen High School in Ibaraki Prefecture, Chiba Prefectural Sakura High School and Chiba Prefectural Funabashi HighSchool, all of which have earned Super Science High School* designation, as well as fashion design workshops for students from Chiba Prefectural Sakura+LJK6FKRRO,Q¿VFDO\HDUWKLVSURJUDPZDVSDXVHGDVDFRQVHTXHQFHRI&29,'7KH&HQWUDO5HVHDUFK/DERUDWRULHVDOVRSURYLGHVDVVLVWDQFHWR
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High School and Chiba Prefectural Funabashi High School.
,QDQHZLQLWLDWLYHLQ¿VFDO\HDUWKH&HQWUDO5HVHDUFK/DERUDWRULHVDOVRH[WHQGHGVXSSRUWIRUWKHWK$QQXDO0HHWLQJRQ6FLHQWL¿F5HVHDUFKE\+LJK
School Students, which is sponsored by Chiba University’s Section of Collaboration with High Schools. This event, which features research presentations
by high school students from across the country, was originally scheduled to be held at Chiba University in September 2020, but to avoid the risk of
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seeking a career in the sciences who took part and gave presentations.
* “Super Science High School” is a designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology to high schools that implement curricula focused on the sciences andmathematics that goes beyond the Ministry’s official guidelines with the aim of fostering the next generation of talented engineers and scientists.

Initiatives Led by the Kashima Plant
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programs participated in lectures on product knowledge, as well as on safety and compliance, and in practical training at the plant, from
October through December.

Kawamura Memorial DIC Museum of Art
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anniversary. The museum’s extensive collection spans numerous genres, encompassing an oil portrait by Rembrandt, a rarity in Japan, as
well as works by impressionists such as Monet and Renoir; modern European artists such as Picasso and Chagall; early modern, modern andpostwar Japanese artists; and luminaries of late-20th century American art, including Mark Rothko, Cy Twombly and Frank Stella. In addition
to a standing exhibit from its permanent collection, the museum stages special exhibitions several times a year.
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comfortable for humans as an effective way to protect biodiversity.
,Q¿VFDO\HDUWKHPXVHXPZDVIRUFHGWRFORVHWHPSRUDULO\DQGSRVWSRQHVSHFLDOH[KLELWLRQVSODQQHGIRULWVWKDQQLYHUVDU\+DYLQJWDNHQH[WHQVLYHVWHSVWRSUHYHQWWKHVSUHDGRI&29,'LQIHFWLRQDQGLQWURGXFHGDZHEEDVHGUHVHUYDWLRQRQO\V\VWHPWKHPXVHXPZDVable to reopen safely in June 2020.

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Harmony with the Community and Social Contributions

,Q¿VFDO\HDUWKHPXVHXPZLOOEHFORVHGXQWLO-XO\IRUUHSDLUVWRWKHHQWUDQFHKDOODQGWKHUHSODFHPHQWRIVLWHVLJQDJHDOWKRXJKWKH
garden remains open to the public. During this period, the museum will prepare to restart guided tours, as well as to reopen the annex gallery
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efforts, the museum will work to ensure a beautiful, safe environment that ensures safety and peace of mind for visitors.
/RRNLQJDKHDGWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UWZLOOFRQWLQXHWRSODQDQGVWDJHH[KLELWLRQVFHQWHUHGDURXQGZRUNVIURPLWV
collection. The museum will promote social contribution activities with a view to encouraging communication with the community.

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Museum entrance hallOutdoor terrace

Social Contribution Initiatives by Overseas Group Companies
DIC Health Packs Preparation Day Events Held Across Southeast Asia
As a component of a CSR project in Southeast Asia, DIC Group companies in the region livestreamed simultaneous events for employees to prepare DIC+HDOWK3DFNVNLWVFRQWDLQLQJDYDULHW\RI&29,'SURWHFWLYHLWHPVLQFOXGLQJ',&6SLUXOLQD DKHDOWKIRRG KDQGVDQLWL]HUDQGPDVNVEHDULQJWKH',&
logo. This initiative, in which employees acted as one to help combat the pandemic, perfectly embodied the “One DIC” concept, uniting people from acrossthe region and instilling a sense of solidarity in the face of this challenging crisis. The DIC Health Packs were donated to senior care facilities and charitableorganizations. DIC looks forward to this experience motivating more employees to engage further in social contribution activities.

Matching Gift Program
DIC has a matching gift program in Japan whereby it matches the total amount collected
through an annual year-end fundraising drive spearheaded by its employees’ union. Funds
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homes and facilities providing support for disabled individuals.

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Harmony with the Community and Social Contributions

Contributing to Efforts to Address COVID-19,QOLJKWRIDFULWLFDOVKRUWDJHRIPDVNVDWKHDOWKFDUHIDFLOLWLHVLQ-DSDQDVDUHVXOWRIWKHUDSLGVSUHDGRI&29,'LQ-DSDQ',&FRQWULEXWHGKLJKSHUIRUPDQFHPDVNVIURPLWVVWRFNSLOHWRVXFKIDFLOLWLHVFRPSULVLQJ1PDVNVZKLFKZHUHGRQDWHGWKURXJKWKH.HLGDQUHQ -DSDQ%XVLQHVV)HGHUDWLRQ WRWKH0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUHZKLFKGLVWULEXWHGWKHPDVNVWRSUHIHFWXUHVDQGRVWULFKDQWLERG\PDVNV 
which were donated to healthcare facilities suffering particularly desperate shortages. DIC also provided approximately 7,000 bottles of Linagreen ®([WUDFW.DQXWULWLRQDOGULQNPDQXIDFWXUHGE\D',&*URXSFRPSDQ\WRVXSSRUWWKHKHDOWKRIIURQWOLQHPHGLFDOSURIHVVLRQDOVZRUNLQJWRSUHYHQWWKH
VSUHDGRI&29,'DQGWUHDWSDWLHQWVZLWKWKHGLVHDVH7KLVHDV\WRFRQVXPHGULQNLVPDGHE\FRPELQLQJ6SLUXOLQDH[WUDFWZKLFKLVGHULYHGIURPthe edible blue-green algae using proprietary technology, with propolis, ginseng and echinacea extract, and fortifying the mixture with water-soluble
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supplied to healthcare facilities in Chiba, Saitama, Ibaraki and Osaka prefectures, where it has production facilities. Going forward, DIC will continue
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company that is loved and respected worldwide.
* Ostrich antibody masks are nonwoven masks that use filters that have been impregnated with antibodies from ostriches, which are highly resistant to viral infections. The ostrich antibodies bind to andneutralize viruses that come into contact with the masks, as a result of which they are significantly more effective than ordinary masks in protecting wearers against viruses.

Linagreen ®([WUDFW.

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Communication with Stakeholders

SDGs Goal 17

Promoting Disclosure and Communication

Basic Approach to Disclosure and Communication
The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trustfrom stakeholders, shall timely and appropriately disclose information relating to matters such as the DIC Group’s
management philosophy, management policies, business plans, financial condition and sustainability activities.
Guided by this policy, the DIC Group promotes communication with stakeholders through television advertisements,
participation in exhibitions, websites and events. By communicating effectively with stakeholders, the Group strives to ensure
an adequate understanding of stakeholder expectations and to reflect such expectations in its business activities. The Groupis also expanding its awareness of the concept of stakeholder engagement, a key requirement under ISO 26000.

Ties withshareholders
and investors

Ties withbusiness
partners

Ties with society

Ties with employees

Ties with the media

Build trusting relationships. By
incorporating the demands ofcustomers, seek to develop
products that enhancecustomer satisfaction.

Ensure appropriate
disclosure and build
trusting relationships withshareholders and investors,
encouraging both toevaluate DIC as an attractive
investment.

Promote socially responsible
procurement across the
supply chain and build solid
relationships that will facilitatesustainable procurement.

Operate in harmony withthe community and build
positive relationships withlocal residents that will
underpin the long-termsustainability of operations.

Provide workplaces that are
conducive to job satisfactionand enable all employeesWRIXO¿OOWKHLUSRWHQWLDO2YHU
the long term, achieve true
diversity.

Deepen understanding
through effective publicity,
advertising and othercommunications efforts.

● Websites● Product pamphlets● Digital marketing● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results● DIC Group Sustainable Procurement● DIC Plaza● Press conferences● Interviews with

●Yuka Shoken Hokokusho● Supplier sustainable procurement● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Ties with customers

Basic approach

Communications
tools(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Timely disclosure● Notice of Convocation of WKH$QQXDO*HQHUDO0HHWLQJ
of Shareholders● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● Sales activities● Participation in

Opportunities forcommunication

announcements

exhibitions● Lectures on the SDGs
for customers● General shareholders’meetings

Guidelines● DIC Group Green Procurement

Guidelines

questionnaires● Feedback sheets● &RQÀLFW0LQHUDOV5HSRUWLQJ

Template● DIC Report● On-site inquiries● Results presentations● IR conferences● IR meetings● DIC IR Day● ,QGLYLGXDOLQYHVWRUEULH¿QJV

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring● Plant Bon Odori

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144

(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film
● News releases● Television
advertisements● Global linkage● Branding questionnaire

for employees● Presentations on the DIC Group
Code of Business Conduct● Sustainability presentations● DIC Family Day● Plant tours for employee families● Caravan workshops

journalists● DIC Report● News releases● Television

advertisements● Newspapers● Economic publications● Industry publications

Communication with Stakeholders| Ties with Customers
With the aim of becoming a unique global company that is trusted by society, the DIC Group prioritizes and works to strengthencommunications with its customers. Principal avenues of communication include participating in exhibitions, events and lectures, and holding
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presentations and other events online, as well as to take part in global exhibitions that shifted to an online format, including CAD RETEC 2020,
a global technical conference on plastics, in September and International Plastic Fair (IPF) Japan 2020 in November. Sun Chemical, which
oversees Group operations in the Americas and Europe, also participated in online events suchas FlexoTech magazine’s FlexoTech Talk in October and held webinars for customers. In Japan,
the PRC and the Asia–Pacific region, DIC Group companies made use of their websites toenhance the provision of information to customers and post videos introducing new products.
2QDQRWKHUIURQW',&FRQWLQXHGHPSOR\LQJDGHGLFDWHGV\VWHPLQRSHUDWLRQVLQFHWR
measure the portion of sales accounted for by repeat customers, using this as a measure of
Sun Chemical webinar
customer satisfaction based on sales data for the last three years. The Company thus works
unceasingly to bolster its grasp of and improve customer satisfaction.

Digital Marketing
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*URXSVLJQL¿FDQWO\H[SDQGHGXVHRIHOHFWURQLFFRPPXQLFDWLRQVLQFOXGLQJHPDLODQGVRFLDOPHGLDDVZHOODVHQKDQFHGZHEVLWHVLQFOXGLQJE\building landing pages to handle requests and inquiries from potential customers. The DIC Group also continued to expand digital efforts to
UHDFKFXVWRPHUVLQFOXGLQJKROGLQJZHELQDUVDQGSDUWLFLSDWLQJLQRQOLQHH[KLELWLRQV,QWKHFXUUHQW¿VFDO\HDUWKH*URXSLVIXUWKHUH[SDQGLQJthe scope of its digital marketing activities both in Japan and overseas, adapting its approaches to the advance of the digital age.

| Ties with Shareholders and Investors
The DIC Group has established a policy for promoting constructive dialogue with shareholders and strives to ensure fair, appropriate andtimely disclosure and to communicate closely with shareholders and investors, as well as to raise awareness of its ESG initiatives. Views andconcerns expressed are shared with management and incorporated into operations as appropriate.
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the DIC Group worked to secure opportunities for remote dialogue. Notable steps included increasing the number of financial resultspresentations held annually for institutional investors and securities analysts from two to four, an achievement made possible by the use of
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successful in enhancing communication with the investment community.
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encourage greater familiarity with its business strategies. Active efforts to advance communication with domestic and overseas investors
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activities and ESG initiatives.
The DIC Group also continued to actively provide information for individual investors with whom direct communication was not possible via
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transcripts. Indicative of the high marks given these efforts, DIC won a grand prize in Daiwa Investor Relations Co., Ltd.’s 2020 Internet IR
Awards and was included in Nikko Investor Relations Co., Ltd.’s Ranking of Japanese Listed Companies’ Websites.

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Logo of the Ranking of Japanese Listed Companies’ Websites

DIC Report 2021

145

2020 Internet IR Awards

Communication with Stakeholders| Ties with Society
In addition to the business community, the DIC Group strives to communicate effectively with ordinary consumers, including students.

Communication in the Field of Education
Nutrition Education Classes for Children,Q0DUFK',&/LIHWHFKHOGDPLQXWHQXWULWLRQHGXFDWLRQFODVVDWWKH6KLEX\D&KLOGUHQ¶V
Science Center Hachi Lab, a facility in Tokyo providing a variety of extracurricular science, technology
DQGPDWKSURJUDPV7RSURWHFWDJDLQVW&29,'SDUWLFLSDWLRQLQWKHFODVVZKLFKZDVWLWOHG³([SORULQJ
WKH6HFUHWVRIWKH&RORURI6ZHHWV´ZDVOLPLWHGWRFKLOGUHQVHOHFWHGE\ORWWHU\$KDQGVRQHYHQWfocused on Spirulina edible algae—the source of a natural blue food coloring commonly used inhealth foods and sweets—the class was designed to foster children’s curiosity about food. Activities
included studying food labels used on the packages for sweets currently on the market, taking partin a colorant extraction experiment and observing Spirulina under a microscope. Feedback from thechildren was positive, with many indicating that the class had deepened their interest in both food andfood labeling, saying that they had enjoyed the experience and wanted to learn more about the foodthey eat.

Nutrition education class

Tours for Parents and Guardians
In January 2020, DIC Estate invited the parents and guardians of students at Ichikawa Ohno School for Special Needs Education High School to tour its
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of the company’s mail room and tea dispenser maintenance section. The president of DIC Estate, which actively promotes the hiring of graduates of special
needs schools, gave a short address to participants before the tour. “All people are unique and different from one another. A disability is just one part of whatmakes a person who they are,” he said, explaining that the company works with new employees after they are hired to set and achieve goals on an ongoingbasis with the objective of encouraging continued personal growth and ensuring their development as working, contributing adults.
The general manager of the Business Support Department then spoke about some of the areas in
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also explained that the company promotes a variety of initiatives, including encouraging non-disabled
employees to take training in the provision of support for individuals with intellectual or developmental
disabilities, and seeks to provide greater career opportunities for such individuals.
DIC Estate conducts such tours throughout the year, as well as offers internships to students from
special needs schools. In addition to conveying a true picture of the DIC Group, the company seeks toencourage interest in DIC Estate as a career path based on a full and accurate understanding.
DIC Estate presentation

Kawamura Memorial DIC Museum of Art,QFHOHEUDWLRQRILWVWKDQQLYHUVDU\WKH.DZDPXUD0HPRULDO',&0XVHXPRI$UWVWDJHGDFRPPHPRUDWLYHH[KLELWLRQWLWOHG³2YHUODSSLQJ&LUFOHV$UWLVWV&ROODERUDWHZLWKWKH&ROOHFWLRQ´$VFDQEHVHHQIURPWKHFHLOLQJOLJKW¿[WXUHDQGVWDLQHGJODVVLQWKHPXVHXP¶VHQWUDQFHKDOOWKHPXVHXPLQFRUSRUDWHV
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and architect Ichiro Ebihara, this motif also symbolizes interactions between museum visitors and the works of art on display. As suggested by the reference
WRWKLVPRWLILQLWVWLWOHWKHH[KLELWLRQVSRWOLJKWHGWKHHQFRXQWHUVEHWZHHQ¿YHZHOONQRZQFRQWHPSRUDU\DUWLVWVZLWKZRUNVIURPWKHPXVHXP¶VFROOHFWLRQ'XULQJWKH\HDUDVSHFLDOSDJHZDVDOVRDGGHGWRWKH-DSDQHVHYHUVLRQRI',&¶VJOREDOZHEVLWHWLWOHG³7KH5RWKNR5RRP9LHZ´WKDWSURYLGHVDSDQRUDPLFORRNRIWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UW¶VEHDXWLIXOQDWXUDOVHWWLQJDVZHOODVDORRNLQVLGHWKHPXVHXP¶V5RWKNR5RRPZKLFKGLVSOD\VVHYHQSDLQWLQJVIURP0DUN5RWKNR¶VSeagram Murals series.

Calendar',&¶VRULJLQDOFDOHQGDUIRUWLWOHGVLPSO\³&DOHQGDU7KH5RWKNR5RRP´ZDVKRQRUHGZLWKDVLOYHUDZDUG FDWHJRU\ LQWKHQG$OO
Japan Calendar Competition, sponsored by the Japan Federation of Printing Industries and Fuji Sankei Business-i, a well-known Japanese
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IRUSUR¿WRUJDQL]DWLRQVSXEOLVKHUVDQGSULQWLQJFRPSDQLHVDPRQJRWKHUVLQWHUPVRISULQWLQJWHFKQRORJ\SODQQLQJGHVLJQIXQFWLRQDOLW\DQG
creativity. The Company will continue to plan, design and produce attractive, useful original calendars that appeal to stakeholders.

Corporate Advertising',&FRQWLQXHGWRSURPRWHDFWLYHEUDQGLQJLQLWLDWLYHVLQOLQHZLWKLWV³&RORU &RPIRUW´EUDQGVORJDQ7KH&RPSDQ\SURGXFHGD¿IWKLQVWDOOPHQWRI
its brand advertisement for television featuring actress Riho Yoshioka that focused on the DIC Group’s products, the value it provides to society
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146

Communication with Stakeholders

Website and Social MediaIn fiscal year 2020, DIC redesigned and reorganized its global website with the aim of enhancing
communication with stakeholders. To further improve convenience for visitors, the Company also
introduced a tool for analyzing user behavior when on the website. To enhance awareness of the DIC*URXSRQWKHSDUWRIJOREDOVWDNHKROGHUV*URXSFRPSDQLHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQXQL¿HGWKHGHVLJQVRIWKHLUUHVSHFWLYHZHEVLWHV

Communication with Local Communities

DIC’s global website:KLOH&29,'UHVWULFWHGWKHKROGLQJRIFRPPXQLW\IRFXVHGHYHQWV',&*URXSFRPSDQLHVDURXQGWKHZRUOGSURPRWHGDYDULHW\RILQLWLDWLYHV
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from its stockpile, approximately 7,000 bottles of nutritional drink Linagreen ® ([WUDFW .DQGGURSOHWLQIHFWLRQ±SUHYHQWLQJIDFHVKLHOGVPDQXIDFWXUHGXVLQJSURSULHWDU\WHFKQRORJLHVWRKHDOWKFDUHIDFLOLWLHV,QWKH$VLD±3DFL¿FUHJLRQ',&*URXSHPSOR\HHVSUHSDUHG',&+HDOWK3DFNVNLWVFRQWDLQLQJDYDULHW\RI&29,'SURWHFWLYHLWHPVZKLFKZHUHGRQDWHGWRVHQLRUFDUHIDFLOLWLHVDPRQJRWKHUV| Monetary Contributions and Other Expenditures
The DIC Group conducts its operations while maintaining relationships with a broad range of external industry and other organizations.

Monetary Contributions
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service promotion corporations and for other social contribution–related purposes. The Group also made monetary contributions totaling
approximately ¥200,000 to political organizations during this period.

Participation in Industry Organizations,QLWVFDSDFLW\DVDPDQXIDFWXUHURI¿QHFKHPLFDOVWKH',&*URXSSDUWLFLSDWHVLQDYDULHW\RIDFWLYLWLHVDVDPHPEHURINH\LQGXVWU\RUJDQL]DWLRQVLQFOXGLQJ
providing specialized information, conducting investigations and collecting materials. In Japan, the Group is a member of organizations ranging from the-&,$WKH.HLGDQUHQWKH-DSDQ'\HVWXIIDQG,QGXVWULDO&KHPLFDOV$VVRFLDWLRQ -',&$ WKH-DSDQ7KHUPRVHWWLQJ3ODVWLFV,QGXVWU\$VVRFLDWLRQ -73,$ 
DQGWKH-DSDQ3ULQWLQJ,QN0DNHUV$VVRFLDWLRQ -3,0$ WRWKH*OREDO&RPSDFW1HWZRUN-DSDQ *&1- ,Q¿VFDO\HDUH[SHQGLWXUHVIRUSDUWLFLSDWLRQLQYDULRXVVXFKH[WHUQDODFWLYLWLHV PHPEHUVKLSGXHV DFURVVWKHHQWLUHJOREDO',&*URXSDPRXQWHGWRDSSUR[LPDWHO\PLOOLRQ| Ties with Employees
The DIC Group promotes a variety of initiatives to facilitate active communication with its employees around the world.

Site Meetings
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)HEUXDU\DQRQOLQHVLWHPHHWLQJZDVKHOGDWWKH.DVKLPD3ODQWZLWKWKHSUHVLGHQWDQGYLFHSUHVLGHQWRI',&DQGWKHJHQHUDOPDQDJHURIWKH3URGXFWLRQ0DQDJHPHQW8QLWSDUWLFLSDWLQJUHPRWHO\DQGHPSOR\HHVIURPSURGXFWLRQHQJLQHHULQJDQGPDQDJHPHQWGHSDUWPHQWVLQWKHVLWH¶VFRQIHUHQFHURRP7KH
meeting provided an opportunity for the frank exchange of opinions on the themes of work styles that inspire job satisfaction and what an ideal production
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PDNHZRUNPRUHUHZDUGLQJDQGWKHLUYLVLRQIRU',&\HDUVLQWKHIXWXUH6LWHPHHWLQJVLQYROYLQJPDQDJHPHQWDQGHPSOR\HHVZHUHVXEVHTXHQWO\KHOGPRQWKO\KRVWHGE\WKH&KLED3ODQW',&.\XVKX3RO\PHUWKH7RN\R3ODQWDQGWKH.RPDNL3ODQW7KLVLQLWLDWLYHLVH[SHFWHGWRFRQWLQXHJRLQJIRUZDUG

Global Communication

Site meeting

With the objective of facilitating active global communication among employees and other stakeholders worldwide, DIC and wholly
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Group’s fundamental management philosophy, to enhance understanding among DIC Group employees overseas. These companies alsocollaborated to produce and distribute videos and handbooks to ensure The DIC Way permeates the entire organization, as well as toencourage a sense of unity. To verify the effectiveness of these efforts, the Group expanded its annual in-house survey of global Group
employees, conducted using an online survey, to include questions aimed at gauging awareness of The DIC Way.
DIC Report 2021

147

Communication with Stakeholders

Caravan Sustainability and Branding Workshops
Having successfully staged Caravan workshops at core DIC Group facilities in Japan as part
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to include overseas sites. In Greater China, where a local Corporate Communications
Department was recently established, a Caravan workshop for local Group employees wasstaged using an e-learning format to enhance understanding of Group branding initiatives.
Caravan branding workshop

In-House Newsletter

The DIC Group publishes a quarterly internal newsletter, DIC Plaza, with the goal of enhancing communication with
DIC Group employees around the world and fostering solidarity. DIC Plaza has earned high marks for its content,
which seeks to advance awareness of management policies and showcase DIC Group technologies, products,
businesses, people and corporate culture, as well as for its vibrant design and use of color. The Group’s intranet is
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posted annually.

| Ties with the MediaDIC is reinforcing its publicity activities as a means of communicating with its many
stakeholders, including its customers, shareholders, investors and local communities.
This reflects its conviction that promoting active disclosure that facilitates objective
media coverage is vital to securing stakeholders’ understanding of the DIC Group and its
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put out news releases regarding new products, capital investments, operating results andsustainability, among others. The Company also put out information about the Group’s
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manufacturer to helping provide safety and peace of mind for people everywhere.

DIC Plaza

Press conferences held
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Interviews withjournalists
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77

61| External Assessments,Q¿VFDO\HDU',&ZDVVHOHFWHGIRULQFOXVLRQLQWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV$VLD3DFL¿F,QGH[DOHDGLQJEHQFKPDUNIRUVXVWDLQDELOLW\LQLWLDWLYHVLQWKH$VLD±3DFL¿FUHJLRQDQGSDUWRIWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, DJOREDOIDPLO\RILQGLFHVIRUVRFLDOO\UHVSRQVLEOH
investment (SRI). This was the sixth consecutive year that DIC was selected for inclusion.
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the FTSE4Good Index and the FTSE Blossom Japan Index for the third consecutive year. In addition, DIC was selected for inclusion in the S&P/JPX&DUERQ(I¿FLHQW,QGH[ZKLFKZHLJKWVFRQVWLWXHQWVXVLQJGLVFORVXUHRIHQYLURQPHQWDOLQIRUPDWLRQDQGFDUERQHI¿FLHQF\ FDUERQHPLVVLRQVSHUXQLWRI
revenue) within an industry group, earning the second-highest “2” rating for the latter factor.
DIC was thus once again included in the four ESG investment indices targeting Japanese equities used by Japan’s Government Pension,QYHVWPHQW)XQG *3,) ZKLFKVHHNVVWRFNLQGLFHVFRPSULVLQJFRPSDQLHVZLWKRXWVWDQGLQJ(6*SHUIRUPDQFHV 06&,-DSDQ(6*6HOHFW/HDGHUV
Index, WIN, FTSE Blossom Japan Index and S&P/JPX Carbon Efficient Index). DIC’s ESG performance also resulted in it being selected for
LQFOXVLRQLQWKH61$06XVWDLQDELOLW\,QGH[LQILVFDO\HDUDFRQVWLWXHQWLQGH[WKDWLVUHYLVHGDQQXDOO\DQGXWLOL]HGE\6RPSR-DSDQ1LSSRQNRD$VVHW0DQDJHPHQW&R/WG 61$0 ¶V620326XVWDLQDEOH,QGH[DIC reports to the CDP, a global nonprofit organization that works on behalf of institutional investors to collect and analyze information on
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the CDP program’s climate change and water security sectors.
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Exchange (TSE).
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6.2
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150

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6.4.3
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62 (Compliance), 64 (BCM and Crisis Management), 67 (Information Security),
69 (ESH), 75 (Occupational Safety and Health/Disaster Prevention),
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6.3.9
6.8
6.8.3
6.8.4
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6.8.7
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6.3.9
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11 of the Yuka Shoken Hokokusho

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6.8
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151

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6.5.4
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101 (Biodiversity)

6.5.6

101 (Biodiversity)

6.5.6

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6.5.3

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152

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6.3.5
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The number of suppliers and negative impacts identified cannot
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6.3.5
6.6.6
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116 (Basic Personnel Statistics (DIC))

120 (Hiring Diverse Human Resources)

6.4
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115–131 (Human Resources Management)

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6.4
6.4.6

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6.4.6

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78–79 (Education and Training),
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6.4
6.4.6
6.8
6.8.3
6.8.4
6.8.8

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6.4
6.4.6

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78–79 (Education and Training),
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6.4
6.4.6

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128–131 (Health Management)

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employees are covered by an occupational health and safety management system.)

6.4
6.4.6

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6.4.6

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6.4
6.4.7
6.8.5

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126 (Securing and Fostering Human Resources) (All DIC employees, regardless ofgender, job or rank, receive performance and career development reviews twice annually.)

6.4
6.4.7

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—

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6.3.10
6.4
6.4.3
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6.3.6
6.3.7
6.3.10
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125 (Use of the Childcare Leave and Leave to Assist with Parenting Programs)

6.4
6.4.3

A minimum notice period is provided as specified in labor agreements.

6.4
6.4.3
6.4.4
6.4.5

69–70 (ESH)

6.4
6.4.6
6.4
6.4.6

76 (Status of Occupational Accidents),
79 (Disaster Prevention)
130 (Promoting Mental Health Care, Initiatives to Support
Employee Health)

6.4
6.4.6

127 (New Human Resources Development Programs)

6.4
6.4.7

48–49 (Directors, Audit & Supervisory Board Members and Executive Officers),
122 (Advancing the Employment of Individuals with Disabilities),
123 (Reemployment after Retirement and Support for Retirement Planning),
128 (Global Talent Development)

6.3.7
6.3.10
6.4
6.4.3

119 (Building Trust with the DIC Employees’ Union)

60 (Ensuring DIC Remains a Globally Trusted Corporate Citizen
with a Proud Reputation),132 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.8
6.3.10
6.4.3
6.4.5

118 (Principal Human Rights Challenges Facing the DIC Group)(Human rights due diligence showed that there are no DIC Group sites at significant
risk for incidents of child labor or hazardous labor for young workers.)

60 (Ensuring DIC Remains a Globally Trusted Corporate Citizen
with a Proud Reputation),
132–134 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10DIC Report 2021

153

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132–134 (Sustainable Procurement)

―

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DFWLRQVWDNHQ

The number of suppliers and negative impacts identified cannot be
disclosed because of confidentiality concerns.

―

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6.3.9
6.6.6
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417-1

118 (Principal Human Rights Challenges Facing the DIC Group)(Human rights due diligence showed that there are no DIC Group sites at significant
risk for incidents of forced or compulsory labor.)

60 (Ensuring DIC Remains a Globally Trusted Corporate Citizen
with a Proud Reputation),
132–134 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10

―

6.3
6.3.5
6.4.3
6.6.6

NA

6.3
6.3.6
6.3.7
6.3.8
6.6.7

115–118 (Human Resources Management)(Voluntary human rights and labor practices inspections have been conducted
at all eligible DIC Group sites.)

6.3
6.3.3
6.3.4
6.3.5
115–118 (Human Resources Management)

6.3
6.3.5
6.3
6.3.3
6.3.5
6.6.6

―

144–149 (Communication with Stakeholders)

6.3.9
6.6.7
6.8
6.8.5
6.8.7
6.3.9
6.5.3
6.5.6
6.8.9

―

147 (Monetary Contributions)

114 (Improprieties in Type Testing of a Foam Fire Extinguishing Agent)

6.3.9
6.6.6
6.7
6.7.4
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105 (Ensuring the Safety of Chemical Substances),
113–114 (Quality Assurance and Quality Improvement Initiatives)

6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9

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6.7.4
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114 (Improprieties in Type Testing of a Foam Fire Extinguishing Agent)

6.6
6.6.3
6.6.7
6.8.7

DIC Report 2021

154

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 2021

155

Third-Party Verification

DIC Report 2021

156

Third-Party Opinion Regarding DIC Report 2021

Counselor,
The Japan Research Institute, Limited

Eiichiro Adachi
In his current capacity, Eiichiro Adachi
conducts industry research andassesses corporate per formance fromthe perspective of social responsibility.
A member of the Market Evolution
and Corporations in the 21st Centur yworking group organized by the Keizai
Doyukai (Japan Association of Corporate
Executives), Mr. Adachi was involved in the
preparation of The 15th Corporate White
Paper on “‘Market Evolution’ and CSRManagement: Toward Building Integrity
and Creating Shareholder Value.” From
March 2005 to May 2009, he also served
as a national expert within the Japanesedelegation to the ISO 26000 working group.
In March 2019, he was appointed a national
expert within the Japanese delegationt o t h e I S O / TC 3 2 2 , t h e I nt e r n at i o n a l
Organization for Standardization’s technicalcommittee for sustainable finance. Mr.
Adachi is also known as the author ofseveral books, including Environmental
Management: A Beginners’ Guide, ESG
Handbook for Investors and Businesses
and The Business Person’s Guide to the
SDGs (published in Japanese).

This third-par ty opinion ref lects my viewof the sustainability initiatives and related
d i s c l o s u r e o f D I C a n d i t s c o n s o l i d at e d
subsidiar ies in Japan and over seas, as
understood from reading this report, from myperspective as an individual who provides
corporate information to financial institutions
nec essar y for ESG investment. It is notintended as a comment on whether or not
the information herein has been measured
and calculated accurately to conform with
commonly accepted standards for the
preparation of environmental or other reports
or as a judgment on whether the repor tcovers relevant important matters in full.

Once again this year, I had the honor of reviewing the DIC Report. Reading the 2021 report, it was clearthat despite the many challenges presented by the spread of COVID-19, DIC and its Group companies inJapan and overseas worked actively to advance ongoing efforts and launch new initiatives.
,ZRXOG¿UVWOLNHWRPHQWLRQDIHZWKLQJVWKDWFDXJKWP\DWWHQWLRQ2QHZDVWKHVSHFLDOIHDWXUHRQWKH
Food with Functional Claims (FFC) made with phycocyanin, derived from Spirulina edible blue-green
algae, which was launched in October 2020. Close to half a century has passed since DIC succeeded in
the mass cultivation of Spirulina in 1977. The existence of algae and its enormous potential are attracting
attention now more than ever before. In addition to conventional uses such as food products and livestock
feed, algae is expected to find applications in such areas as pharmaceuticals, dietary supplements,
biofertilizers, biofuels and biostimulants, as well as in biorestoration, an environmental remediation
WHFKQLTXHWKDWXVHVOLYHRUJDQLVPV7KHFRQFHSWRIXVLQJDOJDHWR¿[&22 in water and in the atmosphereis also drawing considerable interest. I think we can say with certainty that recognition of algae’s critical
UROHLQWKHUHDOL]DWLRQRIJOREDOVXVWDLQDELOLW\ZLOOLQFUHDVHLQWKH\HDUVDKHDG,DPFRQ¿GHQWWKDWWKH
various related technologies and expertise that DIC has accumulated over the years will prove invaluable.
Another aspect of the report I found particularly noteworthy was DIC’s efforts to advancedecarbonization. To date, the Company has exceeded its targets for the reduction of CO2 emissions.
That said, its decision to introduce ambitious new targets, namely, to achieve carbon neutrality by¿VFDO\HDUDQGEHIRUHWKDWWRUHGXFHLWVHPLVVLRQVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDULVODXGDEOH,ZDVDOVRLPSUHVVHGE\LWVODXQFKRILQWHUQDOFDUERQSULFLQJLQ-DQXDU\2021, which I see as evidence of its strong motivation.
I was also impressed by DIC’s new undertaking in the area of chemical recycling. I found the special
feature on DIC’s initiative with FP Corporation (FPCO) extremely interesting. The name “FPCOmethod” circular recycling burst into the limelight as a groundbreaking business model when it was
launched in the 1990s and has yielded steadily positive results ever since. Even so, from what I’ve
KHDUGWKHUHFRYHU\UDWHIRUSRVWFRQVXPHU)3&2WUD\VLVRQO\ZKLOHWKHXVDJHUDWHIRUUHFRYHUHG
UDZPDWHULDOVLVOHVVWKDQLIZHFDOFXODWHXVLQJWKHYROXPHRIIRDPHGVW\UHQHWUD\VVKLSSHG
and the volume recovered. If DIC and FPCO succeed in developing technologies for depolymerizing
polystyrene back into styrene monomer that can be recycled into trays that deliver the same
performance as those made with petroleum-derived virgin raw material, it will truly be a landmark
achievement. I look forward with excitement to the success of this project.
I also have two requests that I hope will be given consideration in preparing next year’s report. The¿UVWKDVWRGRZLWKGLVFORVXUHSHUWDLQLQJWRWKH',&6XVWDLQDELOLW\,QGH[,QP\WKLUGSDUW\RSLQLRQODVW
year, I praised the Company’s move to introduce this index. I was also inspired by the declaration inthis year’s report that the index will be used to assess all DIC Group products to determine whether
WKH\DUHVXVWDLQDEOHRUQRW7KLVDOLJQVZLWKWKHLGHDRID³JUHHQWD[RQRP\´WKDWLVDFODVVL¿FDWLRQDQG
HQXPHUDWLRQV\VWHPWKDWFODUL¿HVZKDWHFRQRPLFDFWLYLWLHVDUHMXGJHGWRFRQWULEXWHWRVXVWDLQDELOLW\which is finding application globally. In Japan, I often hear people say that “green” or “not green”
is a dualism that does not properly recognize the steady initiatives of companies to improve their
SHUIRUPDQFHRQWKLVIURQWEXW,ZRXOGOLNHWRFRPPHQG',&IRUWDNLQJDSURDFWLYHVWHSWKDWUHÀHFWV
global trends. In future reports, I would like to see information on the criteria DIC uses to assesssustainability, as well as on products and businesses that have been determined to be sustainable, andthe progress of efforts to transform its business portfolio.
The second pertains to disclosure regarding biodiversity. In June 2021, we saw the launch of theTaskforce on Nature-related Financial Disclosures (TNFD), a new global initiative that proposesa framework for companies to report on nature-related financial risks and opportunities with theSRWHQWLDOWRDIIHFWWKHLU¿QDQFLDOFRQGLWLRQ)RU',&WKHULVNRIFKHPLFDOVGDPDJLQJWRELRGLYHUVLW\LV
an issue that must always be given consideration. At the same time, given the potential of algae to
FRQWULEXWHWRWKHUHVWRUDWLRQDQGUHJHQHUDWLRQRIELRGLYHUVLW\',&¶VRSHUDWLRQVDOVRLQYROYHVLJQL¿FDQW
nature-related opportunities. DIC Report 2021 provides only a brief commentary on biodiversity,
but it is my hope that reports in the coming years will offer more in-depth analysis, including on its
connection with DIC’s operations.

DIC Report 2021

157

113 Years of Achievement

DIC Group Milestones

1908

1957

1925

Enters the market for helmets andother molded plastic products

Begins production of organic pigments

Established as
Kawamura Ink
Manufactory

Develops production method for organic pigments
and begins production for its own use, the first step inits evolution as a fine chemicals manufacturer.

Established by Kijuro Kawamura
as Kawamura Ink Manufactory;
adopts the dragon as its
product trademark and begins
manufacturing inks.

1940
Dragon product trademark

Commences production ofwater-based gravure inks

Enters the plastic products business with the aim of becoming an
integrated manufacturer with operations encompassing productionof everything from plastic raw materials to finished products.

1962

Changes Company nameto Dainippon Ink and Chemicals

Amid wartime restrictions on use of volatile oils, develops
water-based gravure inks—one of several achievementsthat would later facilitate expansion into synthetic resins.

Embarks on a new chapter in its history by absorbing
Japan Reichhold Chemicals Inc., and changes Company
name to Dainippon Ink and Chemicals Incorporated (DIC).

1952

Makes full-scale entry into thesynthetic resins business
Establishes Japan Reichhold Chemicals Inc., then thesecond-largest joint venture with an overseas firm in thehistory of the Japanesechemicals industry,
and makes a full-scale
entry into the synthetic
resins business.

DIC’s previous
corporate symbol

1968

Commences sales of the
DIC Color Guide ®

DIC’s founder, Kijuro Kawamura

Launches the DIC Color Guide®, which becomes the defacto standard for color selection in numerous industries,
bolstering recognition of the DIC name.

Reichhold Chemicals’
San Francisco plant

1915

Commences production of offset printing inks
Becomes one of the first companies to conduct
research in the area of offset printing inks and succeeds
in producing a viable product in only one year.

1973

Establishes theEnvironment and Safety
Response Department
Creates department under the directsupervision of DIC’s president to oversee
safety and environmental initiatives(today’s Responsible Care Department);
creates Environment and Safety
Management Regulations and Interim
Emergency Countermeasures Department
and begins promoting decisive efforts,
including the implementation of plantsafety inspections.

Diversiﬁes operations by building onbase in printing inks, organic pigments
and synthetic resins

1990

Opens Kawamura
Memorial Museum of Art
Located in Sakura, Chiba Prefecture,adjacent to the Central ResearchLaboratories; established to exhibit
works of art collected by DIC and DIC
Group companies and now called the
Kawamura Memorial DIC Museum of Art.

Actively introduces technologies
from overseas and promotes
further diversif ication

1995

Declares intention to uphold theprinciples of Responsible Care

Takes an active role in the Responsible
Care movement since the start as one of
74 founding members of the Japan
Responsible Care Council (JRCC);
reinforces efforts to, among others, reduce
negative environmental impact ofoperations and lower energy consumption.

2006

Becomes signatory to the
Responsible Care Global Charter
Signs the CEO’s Declaration of Support for
the Responsible Care Global Charter,
established by the International Council of
Chemical Associations (ICCA), as befits its
status as a member of the global communityof fine chemicals manufacturers.

Certiﬁcation of DIC as signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

DIC Report 2021

158

DIC Group Milestones

1970

1999

Establishes Crown Zellerbach Packaging Materials Japan
Co., Ltd., in a joint venture with Crown Zellerbach
Corporation of the United States and Nippon Kakoh Seishi
Co., Ltd., and enters the multilayered films business.

Establishes presence in India, Central and South America
and elsewhere by acquiring the Coates Group fromTOTALFINA S.A., France’s largest oil company.

Enters the multilayered films business

2008

1973

Enters themarket for LCs
Develops revolutionary
h i g h - p e r f o r m a n c e,
long-lasting nematicLCs, commencing its
evolution into one of
the world’s foremost
manufacturers of LCs.

Acquires Coates, the printing inks
division of France’s TOTALFINA

Changes Company nameto DIC Corporation
Marks centennial anniversary by changing Company name to
DIC Corporation and adopting a new corporate symbol.

Acquires the graphic arts materials division of
Sun Chemical Corporation of the United States
Becomes world’s largest
manufacturer of printing
inks in terms of market
share and a leading namein the graphic arts materials
business.

DIC’s new corporate symbol

In May 2015, completes thereconstruction of its corporate
headquarters—the DIC
Building—in Nihonbashi,Tokyo, the role of which was
expanded to include oversightof the global DIC Group.

DIC Building

2016

Introduces branding program

Brand advertisement for television

2009

2017

In October 2009, establishes a joint venture with Dai Nippon Printing
Co., Ltd., subsidiary The Inctec Inc. and integrates its domestic
printing inks business with the printing inks business of The Inctec.

Concludes capital and business alliance with TAIYO HOLDINGS CO., LTD.,
one of the world’s leading manufacturers of solder resist for printed wiring boards.

Establishes DIC Graphics Corporation

Sun Chemical’s headquarters

Completes
reconstructionof corporate
headquarters
in Nihonbashi

Introduces new branding
program based on theGroup’s “Color & Comfort”
brand slogan, which sets
f o r t h t h r e e c o r p o ra t evalues, and in Octobera i r s a new television
advertisement.

Nematic LCs

1986

2015

Enters capital and business alliancewith TAIYO HOLDINGS

1999

2010

2019

Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

Develops the G58 series of green pigments for use in color filters forliquid crystal displays (LCDs), which deliver marked increases inbrightness and contrast compared with previous products andcontribute substantially to reduced energy consumption by LCDs.

Clarifies strategies for transforming the DIC Group’s businessportfolio, that is, for building a sophisticated portfolio focused on
ESH-related issues and social changes by advancing qualitativereforms in existing core businesses and creating new businesses
with the potential to become mainstays.

Succeeds in developing 100% soybean
oil–based printing ink

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters

Launches DIC111 medium-term
management plan

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2007

2010

2014

Begins promoting CSR initiatives;
identifies fulfilling its responsibilities as amember of society through its businessactivities and contributing to the evolutionof society as the cornerstones of CSR.

In December 2010, becomes a signatory to
the United Nations Global Compact (UNGC),
with the aim of maintaining its reputation asa socially responsible corporate entity.

Clarifies its overall policy of achieving sustainability
in a manner that takes into account, among others,
the environment, ecosystems and socioeconomic
issues, and changes the designation used across its
program from “CSR” to “sustainability.”

Joins United Nations
Global Compact

2015

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Launches CSR program

DIC Report 2021

159

Selected for inclusion in the
Dow Jones Sustainability
Indices (DJSI) Asia Pacific Index
Included for the first time in the DJSI Asia
Pacific Index, a global family of indices forsocially responsible investing and abenchmark of global sustainability.
As of 2020, has been included in the index
for six consecutive years.

DIC Report 2021
Financial Section

Year ended December 31, 2020

O ne of the world’s leading diversified chemicals companies, DIC Corporation is also the core of the DIC Group, a multinationalorganization with operations in more than 60 countries and territories worldwide. Established in 1908 as a manufacturer of printing
inks, DIC has capitalized on its extensive technologies, know-how and experience in the years since to build a broad business portfolioof materials and finished products, enabling it to provide innovative solutions to customers in diverse industries and transforming it
into a global powerhouse in its key fields of endeavor.
Now in its second century in business, DIC is redoubling its efforts to develop and market innovative, high-performance productsthat respond to the needs of customers in markets around the world, in line with its “Color & Comfort by Chemistry” vision.
A responsible corporate citizen, DIC is also committed to helping realize environmental and social sustainability.

The DIC Way

Contents

Consolidated Five-Year Summary 1
Management’s Discussion and Analysis 2
Consolidated Balance Sheet 5
Consolidated Statement of Income 7
Consolidated Statement of Comprehensive Income 8
Consolidated Statement of Changes in Net Assets 9
Consolidated Statement of Cash Flows 10
Notes to the Consolidated Financial Statements 11
Management’s Report on Internal Control 45
Independent Auditor’s Report 46
Investor Information and Corporate Data 50

1Consolidated Five-Year Summary
DIC Corporation and Consolidated Subsidiaries
Years ended December 31, 2020 to 2016

Thousands of
U.S. dollars,
except for per
share information(Note 7)
FY2020Millions of yen,
except for per share information
FY2018FY2017FY2016FY2020FY2019Net sales
Percent increase (decrease)
Operating income
Net income attributable to owners of
the parent¥701,223(8.8)%
39,663¥768,568(4.6)%
41,332¥805,498
2.0%
48,385¥789,427
5.1%
56,483¥751,438(8.4)%
54,182$6,807,990(8.8)%
385,078

13,23323,50032,02838,60334,767

128,476

Equity (Note 3)
Total assets

318,492
817,950

312,740
803,083

298,896
801,296

315,129
831,756

278,535
764,828

3,092,155
7,941,262¥3,364.92
139.81¥3,304.34
248.29¥3,158.05
338.40¥3,329.60
407.56¥2,938.12
366.72$32.671.36

100.00100.00125.00120.00

64.00

0.97

36.4%
12.9%

38.9%
4.2%

Equity per share (Notes 1, 4 and 6)
Earnings per share (basic) (Notes 2, 4 and 6)
Cash dividends per share applicable tothe period (Note 5)
Equity ratio to total assets
ROE (return on equity)

38.9%
4.2%

Number of employees

38.9%
7.7%

20,242

37.3%
10.4%

20,513

20,62037.9%
13.0%
20,62820,481

20,242

Notes: 1. The computation of equity per share has been based on the number of shares issued as of the balance sheet date.
2. The computation of earnings per share has been based on the weighted-average number of shares issued during each fiscal year.
3. Equity comprises “Total shareholders’ equity” and “Total accumulated other comprehensive income.”
4. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Earnings per share (basic)
and equity per share are calculated respectively based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended
December 31, 2016.
5. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Cash dividends per share
applicable to the period for the fiscal year ended December 31, 2016, comprises interim dividends of ¥4.00 (before the consolidation) and year-end dividends of¥60.00 (after the consolidation). If the consolidation had been taken into consideration, cash dividends per share applicable to the period for the fiscal year ended
December 31, 2016, would be ¥100.00.
6. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets
as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity pershare includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the
fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.
7. Yen amounts have been translated, for readers’ convenience only, at the rate of ¥103 to US$1, the approximate rate of exchange at December 31, 2020.
8. The Company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement
No. 28, issued on February 16, 2018), etc., since the beginning of the fiscal year ended December 31, 2019. The figures as of December 31, 2018, are basedon retrospective application.
Operating Income

Net Sales
1,000.0
800.0

ROE(Billions of yen)(Billions of yen)

(%)

75.0

789.4 805.5 768.6
751.4

701.2

60.0

20.0

54.2

56.5

16.0

48.4
41.3

39.7

600.0

45.0

400.0

30.0

8.0

200.0

15.0

4.0

12.9

13.0
10.4

12.0

7.7
4.2

0.0

2016

2017

2018

2019

2020 (FY)Net Income Attributable to Owners of the Parent(Billions of yen)
50.0
40.0

38.6
34.8

20.0

2019

2019

2020 (FY)

0.02020 (FY)

2016

2017

2018

2019

65

100.0

40

50

60

71.5

60.0
40.0

30

40

0

2016

(FY)

(%)

80.0

60

2020

Dividend Payout Ratio

End of 2nd quarter
Year-end

60

10.0

2018

2018

(Yen)

90

13.2

2017

2017

120

32.0
23.5

2016

2016

Cash Dividends per Share
150

30.0

0.0

0.0

60

60

60

2017

2018

2019

50

20.0

2020 (FY)

0.0* These figures have been adjusted to account for the impactof a consolidation of shares of common stock by a factor of
10 to 1 with July 1, 2016, as the effective date.

27.3

29.4

2016

2017

36.9

2018

40.3

2019

2020

(FY)

2

Management’s Discussion and Analysis

This document presents consolidated results for fiscal year 2020, comprising the accounts for the year ended
December 31, 2020, of DIC and its domestic and overseas subsidiaries.

Overview ofOperatingResults

In fiscal year 2020, consolidated net sales declined 8.8%, to ¥701.2 billion. Despite the protracted COVID-19
pandemic, economic activity recovered in multiple areas in the fourth quarter (October 1–December 31, 2020),
as a result of which shipments of many products, notably materials for use in automobiles and publication
inks, recovered. Nonetheless, full-term sales shrank in all segments. Net sales were 9.6% higher in the fourth
quarter than in the third quarter (July 1–September 30, 2020).
Operating income slipped 4.0%, to ¥39.7 billion. Cost reductions, prompted by falling raw materials prices,
reduced activity expenses and rationalization measures, combined with a recovery in shipments in diverse businesses in the fourth quarter to boost operating income 1.5% on a local currency basis. However, operating
income was pushed down by a weakening of results overseas after translation, a consequence of the depreciation of emerging economy currencies, among others. Ordinary income, at ¥36.5 billion, was down 11.7%.
Net income attributable to owners of the parent fell 43.7%, to ¥13.2 billion. The principal factors behind thisresult were one-time costs and an extraordinary loss associated with the acquisition of BASF SE’s Colors & Effects business, which was announced on August 29, 2019. Earnings before interest, taxes, depreciation andamortization (EBITDA) decreased 17.5%, to ¥55.6 billion.

Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent
EBITDA*FY2020Billions of yen
FY2019Change (%)

Change calculated inlocal currency (%)¥701.2
39.7
36.5
13.2
55.6

¥768.6
41.3
41.3
23.5
67.4

(8.8)%(4.0)(11.7)(43.7)(17.5)(6.2)%
1.5———* EBITDA = Net income attributable to owners of the parent + Total income taxes + (Interest expenses – Interest income) + Depreciation
and amortization

Average exchange rate (¥/US$)
Average exchange rate (¥/EUR)

Segment
Results

FY2020Yen
FY2019¥106.37
121.43¥109.11122.13

Packaging & Graphic
Segment sales declined 6.7%, to ¥388.4 billion. In the area of materials for food packaging, sales of packaging inks advanced in Asia, as well as in the Americas and Europe, as firm demand bolstered shipments, but
decreased in Japan as COVID-19 led to sluggish sales to convenience stores, among others. Although demandfor print advertisements and commercial printing improved from the third quarter forward, full-term sales ofpublication inks—which center on publishing inks and news inks—dwindled in all regions as shipments, havingslumped as a result of the pandemic, failed to recover completely. Sales of jet inks for digital printing were up
as demand rebounded after flagging in the third quarter, underpinning firm shipments.
Segment operating income rose 13.5%, to ¥21.8 billion. Factors contributing to this significant increase
included higher demand for food packaging, a consequence of the pandemic, which led to firm full-term shipments of packaging inks in Asia, and in the Americas and Europe, and of multilayer films in Japan, as well as
to cost-cutting efforts, which focused on rationalization.

Net sales
Operating income

Billions of yen
FY2020Change (%)

Change calculated inlocal currency (%)¥388.421.8(6.7)%
13.5(2.9)%
23.3

3Management’s Discussion and Analysis

Color & Display
Segment sales, at ¥105.8 billion, were down 9.1%. Sales of color materials fell sharply, owing to declining
shipments, particularly of pigments for cosmetics, as mask-wearing became an ingrained part of life worldwide, as well as to persistently weak sales of pigments for use in inks. In display materials, full-term sales roseas increased time spent by consumers at home led to robust demand in the market for liquid crystal displays(LCDs), pushing up shipments of pigments for color filters and of thin-film transistor liquid crystals (TFT LCs).
Full-term sales of effect pigments also advanced, buttressed by higher demand in Europe for autoclaved aerated concrete for construction-related applications.
Segment operating income dropped 21.7%, to ¥8.4 billion. Despite increased shipments of products for thehigh-value-added area of displays in the fourth quarter, operating income plunged as production adjustments
prompted the cutting of operating rates at certain production facilities in the Americas and Europe amid stagnant shipments of pigments for cosmetics, making it impossible to absorb fixed and other costs.

Net sales
Operating income

Billions of yen
FY2020Change (%)

Change calculated inlocal currency (%)¥105.88.4(9.1)%(21.7)(6.7)%(19.7)

Functional Products
Segment sales decreased 12.1%, to ¥236.0 billion. Shipments of epoxy resins, the principal application forwhich is semiconductor devices, were brisk as demand for use in onboard equipment rallied in the fourth quarter.
Shipments of industrial-use tapes, used primarily in smartphones, were also up. Although shipments ofenvironment-friendly resins* recovered strongly, thanks to demand for use in automobiles, full-term sales waned.
Shipments of polyphenylene sulfide (PPS) compounds—uses for which continue to expand, underpinned by
the trend toward lighter and increasingly electrified vehicles—also rose sharply in the fourth quarter, bolsteredby a recovery in the automobile market across all regions, but full-term sales declined.
Segment operating income was down 11.1%, to ¥17.1 billion. This result was despite a recovery in sales ofhigh-value-added epoxy resins and was attributable to the fact that lower raw materials prices and cost reductions were insufficient to offset the decline in full-term shipments of products for diverse industrial applications, including automobiles and building materials.

Net sales
Operating income

Billions of yen
FY2020Change (%)

Change calculated inlocal currency (%)¥236.017.1(12.1)%(11.1)(11.6)%(10.6)* DIC uses the term “environment-friendly resins” to describe strategic resins designed to improve both environmental performance and functionality. These include waterborne, ultraviolet (UV)-curable, polyester, acrylic and polyurethane resins.

4Management’s Discussion and Analysis

Analysis ofCash Flows

Cash and cash equivalents as of December 31, 2020, totaled ¥41.4 billion, an increase of ¥24.7 billion from
December 31, 2019.
Operating Activities
Net cash provided by operating activities amounted to ¥54.5 billion, compared with ¥50.6 billion provided bysuch activities in fiscal year 2019. Income before income taxes and non-controlling interests was ¥25.1 billion,
while the adjustment for depreciation and amortization was ¥32.6 billion. Income taxes paid totaled ¥7.4
billion, while working capital increased ¥8.5 billion.
Investing Activities
Net cash used in investing activities came to ¥33.0 billion, up from ¥24.9 billion used in such activities in theprevious fiscal year. A net total of ¥2.8 billion was applied to the purchase of shares and investments in capitalof subsidiaries resulting in change in scope of consolidation, while proceeds from sales of property, plant andequipment amounted to ¥5.9 billion.
Financing Activities
Net cash provided by financing activities amounted to ¥6.3 billion, up from ¥26.8 billion used in such activities
in fiscal year 2019. A net total of ¥17.9 billion was applied to the proceeds from interest-bearing debt, while
cash dividends paid came to ¥8.5 billion.

5

Consolidated Balance SheetDIC Corporation and Consolidated Subsidiaries
December 31, 2020

Assets2020

Millions of yen
2019

Cash and deposits (Notes 6, 12 and 20)¥ 44,885¥ 16,786

Notes and accounts receivable—trade (Notes 12, 20 and 21)

197,595

211,232

Current assets:

Merchandise and finished goods (Note 12)78,27391,555Work in process (Note 12)

9,065

9,566

Raw materials and supplies (Note 12)55,05858,610

Other (Note 20)

24,294

21,607

Allowance for doubtful accounts(9,171)(9,437)399,997

399,919

Buildings and structures

86,88588,540Machinery, equipment and vehicles

67,38670,867

Tools, furniture and fixtures

10,468

11,191

Land

51,362

51,961

Construction in progress

11,977

9,616

228,078

232,176

Goodwill

819

762

Software

2,963

2,585

Customer-related assets

2,853

2,674

Other

4,877

5,782

11,512

11,804

Investment securities (Notes 7, 8 and 20)

57,201

59,313

Deferred tax assets (Note 17)

32,40733,192

Net defined benefit asset (Note 13)

63,78444,339Other (Notes 7 and 20)

25,70523,020

(734)

(680)

Total investments and other assets

178,363

159,184

Total non-current assets

417,953

403,164

Total assets¥817,950¥803,083

Total current assets

Non-current assets:
Property, plant and equipment (Notes 9, 11 and 12):

Total property, plant and equipment

Intangible assets:

Total intangible assets

Investments and other assets:

Allowance for doubtful accounts

See notes to the consolidated financial statements.

6

Consolidated Balance Sheet

Liabilities andNet Assets

2020

Millions of yen
2019¥ 95,263¥108,562

Short-term loans payable (Notes 12 and 20)

10,275

20,139Current portion of long-term loans payable (Notes 12, 20 and 21)

27,09623,456

Current liabilities:
Notes and accounts payable—trade (Notes 20 and 21)

Lease obligations (Notes 12 and 20)

1,061

1,244

Income taxes payable (Notes 17 and 20)

4,985

2,556

Provision for bonuses

5,480

5,724

Other (Note 20)

53,022

48,445

197,181210,126

Bonds payable (Notes 12 and 20)

100,000

80,000Long-term loans payable (Notes 12, 20 and 21)

Total current liabilities
Non-current liabilities:

123,766

122,602

Lease obligations (Notes 12 and 20)

4,543

5,191

Deferred tax liabilities (Note 17)

12,525

8,768

Net defined benefit liability (Note 13)

17,071

21,377

Asset retirement obligations

1,691

1,696

Other

9,809

9,826

Total non-current liabilities

269,405

249,459

Total liabilities

466,586

459,585

Capital stock (Note 15)

96,55796,557

Capital surplus

94,46894,456

Retained earnings

219,778

218,209

Treasury shares (Notes 5 and 16)(1,800)(1,823)409,003407,398

Valuation difference on available-for-sale securities

2,903

1,676

Deferred gains or losses on hedges

2,468

683

Foreign currency translation adjustment(82,321)(72,671)

Remeasurements of defined benefit plans (Note 13)(13,562)(24,346)

Total accumulated other comprehensive income(90,511)(94,658)

Non-controlling interests

32,87330,757

Net assets:
Shareholders’ equity (Notes 14 and 24):

Total shareholders’ equity
Accumulated other comprehensive income:

Total net assets

351,364

343,497

Total liabilities and net assets¥817,950¥803,083

7

Consolidated Statement of Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2020

2020

Millions of yen
2019

Net sales
Cost of sales
Gross profit¥701,223
544,430
156,793¥768,568
603,199
165,369

Selling, general and administrative expenses (Note 18)
Operating income

117,130
39,663

124,037
41,332Non-operating income:Interest income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income

1,263
416
771
2,066
4,516

2,420
414
2,475
1,692
7,001

Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

2,225
1,384
4,117
7,726

3,724
811
2,496
7,031

Ordinary income

36,452

41,302Extraordinary income:Gain on sales of non-current assets
Gain on bargain purchase
Insurance income
Gain on sales of subsidiaries’ and affiliates’ securities
Total extraordinary income

5,226
1,295
531
—
7,052

1,401
—
1,409
1,624
4,435

Extraordinary loss:
Loss on business liquidation (Note 10)
Acquisition-related expenses
Loss on disposal of non-current assets
Impairment loss (Note 11)
Severance costs
Loss on disaster
Provision of allowance for doubtful accounts
Amortization of past service costs
Loss on sales of subsidiaries’ and affiliates’ securities
Total extraordinary loss

8,762
4,563
2,903
1,251
924
—
—
—
—
18,403

—
1,914
2,399
3,078
840
1,520
551
443
316
11,061

25,102

34,676

10,336(1,651)
8,685

7,869
1,461
9,330

16,417
3,184¥ 13,233

25,346
1,846¥ 23,500

Income before income taxes and non-controlling interests
Income taxes (Note 17):
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Earnings per share (Note 2):
Basic
DilutedWeighted-average number of shares issued during the period,
excluding treasury shares (in thousands)
Cash dividends per share applicable to the period (Note 2)
See notes to the consolidated financial statements.

¥ 139.81—¥ 248.29—

94,651

94,646¥ 100.00¥ 100.00

8

Consolidated Statement of Comprehensive Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2020

2020

Millions of yen
2019¥16,417¥25,346

Valuation difference on available-for-sale securities

1,175

327

Deferred gains or losses on hedges

1,785

669

Foreign currency translation adjustment(9,827)(4,394)Remeasurements of defined benefit plans, net of tax (Note 13)

10,689

7,269

158

(744)

¥ 3,980¥ 3,127¥20,396¥28,473

Comprehensive income attributable to owners of the parent¥17,368¥26,546

Comprehensive income attributable to non-controlling interests

3,028

1,927

Net income
Other comprehensive income:

Share of other comprehensive income of associates accounted for using
equity method
Total other comprehensive income (Note 23)
Comprehensive income
Comprehensive income attributable to:

See notes to the consolidated financial statements.

9Consolidated Statement of Changes in Net Assets
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2020

Millions of yen
Shareholders’ equity

Balance at January 1, 2019
Cumulative effects of changes inaccounting policies
Restated balance
Dividends from surplus,¥125.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—2,187 shares
Disposal of treasury shares—1,600 shares
Change in scope of consolidation
Change in ownership interest of
the parent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 14)
Balance at December 31, 2019
Dividends from surplus,¥90.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—1,900 shares
Disposal of treasury shares—7,200 shares
Change in scope of equity method
Change in ownership interest of
the parent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 14)
Balance at December 31, 2020

Issuednumber ofcommon stock(thousands)

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity95,157¥96,557¥94,445¥207,421¥(1,823)¥396,600—
96,557—
94,445(774)
206,647—(1,823)(774)
395,826(11,849)
23,500(90)(11,849)(7)
6

11
95,15796,557

94,456

11
218,209(1,823)(8,531)
13,233(3,133)¥96,557¥94,468

407,398(8,531)(5)28

12
95,15723,500(7)
6(90)

13,233(5)
28(3,133)12¥219,778¥(1,800)¥409,003
Millions of yen

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at January 1, 2019
Cumulative effects of changes inaccounting policies
Restated balance
Dividends from surplus,¥125.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—2,187 shares
Disposal of treasury shares—1,600 shares
Change in scope of consolidation
Change in ownership interest of
the parent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 14)
Balance at December 31, 2019
Dividends from surplus,¥90.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—1,900 shares
Disposal of treasury shares—7,200 shares
Change in scope of equity method
Change in ownership interest of
the parent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 14)
Balance at December 31, 2020
See notes to the consolidated financial statements.

¥1,407—
1,407

Deferred gains
or losses onhedges¥Foreigncurrency Remeasurements
translationof definedadjustment
benefit plans

Total
accumulated
othercomprehensive
incomeNon-controllinginterests

Total
net assets

14¥(67,617)¥(31,508)¥(97,704)¥28,438¥327,334—
14—(67,617)—(31,508)—(97,704)—
28,438(774)
326,560(11,849)
23,500
(7)
6
(90)
11

269
1,676

670
683

(5,055)(72,671)

7,161(24,346)

3,046(94,658)

2,320
30,7575,365
343,497(8,531)
13,233(5)
28(3,133)12

1,227¥2,903

1,785¥2,468(9,650)¥(82,321)

10,784¥(13,562)

4,147¥(90,511)

2,116¥32,873

6,262¥351,364

10Consolidated Statement of Cash FlowsDIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2020

Net cash provided by (used in) operating activities:
Income before income taxes and non-controlling interests
Adjustments for:
Depreciation and amortization
Amortization of goodwill
Gain on bargain purchase
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income
Equity in (earnings) losses of affiliates
Interest expenses
Loss (gain) on sales and retirement of non-current assets
Impairment loss
Loss on business liquidation
Loss (gain) on sales of subsidiaries’ and affiliates’ securities
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares and investments in capital of subsidiaries resulting inchange in scope of consolidation
Proceeds from purchase of shares and investments in capital of subsidiaries
resulting in change in scope of consolidation
Proceeds from sales of shares and investments in capital of subsidiaries
resulting in change in scope of consolidation
Payments for sales of shares and investments in capital of subsidiaries resulting
in change in scope of consolidation
Proceeds from sales of subsidiaries’ and affiliates’ securities
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Purchase of shares and investments in capital of subsidiaries not resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period (Note 6)
Cash and cash equivalents at end of the period (Note 6)
See notes to the consolidated financial statements.

2020

Millions of yen
2019¥ 25,102¥ 34,676

32,581143(1,295)(548)(124)(1,679)(771)
2,225(2,324)
1,251
8,762
—
10,781
10,158(12,453)(10,847)
60,963
3,249(2,385)(7,366)54,462

33,127
99
—
559
(561)
(2,834)(2,475)
3,724
997
3,078
—
(1,308)(3,054)4,614(9,802)(3,543)57,298
4,335(3,865)(7,132)
50,637(8,024)
4,589(32,719)
5,895(1,280)(3,685)4,740(34,042)
1,613
(919)

(2,817)(1,558)

—

235

890

900

(16)
226
(51)
352
(78)
(3)
(33,037)

—
9,508
(350)
134
(96)
(1,363)(24,884)(8,866)
42,105(35,325)
20,000(8,531)(782)
23(9,383)40,250(63,513)
20,000(11,849)
(767)
(1)

(114)
(2,173)
6,338(3,100)24,663
16,690¥ 41,354(186)(1,351)(26,799)(895)(1,941)
18,631¥ 16,690

11

Notes to the Consolidated Financial Statements
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2020

Note 1:
Basis ofPresenting
Financial
Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions
set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of the International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which DIC Corporation (the “Company”) is incorporated.

Note 2:
Summary of
Significant
Accounting
Policies

Consolidated financial statements
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated and those companies over which the Company has theability to exercise significant influence are accounted for by the equity method.
The consolidated financial statements include the accounts of the Company and its significant subsidiaries:
Sun Chemical Group Coöperatief U.A., DIC (China) Co., Ltd., DIC Asia Pacific Pte Ltd, SEIKO PMC CORPORATION, DIC INVESTMENTS JAPAN, LLC., DIC Graphics Corporation and 146 other companies in the fiscal year
ended December 31, 2020 (145 other companies in the fiscal year ended December 31, 2019). All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Company and its consolidated subsidiaries (the“Group”) is eliminated.
Investments in 20 affiliates in the fiscal year ended December 31, 2020 (22 in the fiscal year ended December 31, 2019), are accounted for by the equity method.
Accounting period of consolidated subsidiaries
The closing date of the consolidated subsidiaries is the same as the consolidated closing date.
Cash and cash equivalents
Cash and cash equivalents consist primarily of cash on hand, certificates of deposit and short-term investmentswith original maturities of three months or less that are readily convertible to known amounts of cash andhave insignificant risk of changes in value.
Investment securities
Investment securities are classified and accounted for, depending on management’s intent, into available-forsale securities. Available-for-sale securities are carried at fair value as of the balance sheet date, with unrealized
gain and loss, net of applicable taxes, reported in a separate component of net assets. Available-for-sale securities whose fair values are not readily available are carried at cost and calculated using the moving-averagemethod. The cost of securities sold is calculated by the moving-average method.
Allowance for doubtful accounts
Allowance for doubtful accounts is provided mainly based on historical experience for normal receivables andon an estimate of collectability of receivables from companies in financial difficulty.
Inventories
Inventories are principally stated at cost, cost being determined by the first-in, first-out (FIFO) method, which
evaluates the amount of the inventories shown in the balance sheet by writing them down based on their decrease in profitability.
Property, plant and equipment (excluding leased assets)
Property, plant and equipment are carried at cost. Significant renewals and additions are capitalized; maintenance and repairs, and minor renewals and improvements, are charged to income as incurred.
Depreciation of buildings (other than facilities attached to buildings) of the Company and its domestic consolidated subsidiaries is calculated principally by the straight-line method. Besides, depreciation of facilities
attached to buildings and structures acquired on or after April 1, 2016, is also calculated by the straight-line
method. Other property, plant and equipment are calculated by the declining-balance method.

12

Notes to the Consolidated Financial Statements

Depreciation of property, plant and equipment of foreign consolidated subsidiaries is calculated principally by
the straight-line method. The range of useful lives is principally from 8 to 50 years for buildings and structuresand from 3 to 11 years for machinery, equipment and vehicles.
Intangible assets (excluding leased assets)
Intangible assets are carried at cost less accumulated amortization, and are amortized by the straight-line
method. Goodwill is amortized by the straight-line method over a reasonable period not exceeding 20 years.
Leased assets
Leased assets related to finance leases that do not transfer ownership of the leased property to the lessee aredepreciated on a straight-line basis, with the lease periods used as their useful lives and no residual value.
Right-of-use assets
Right-of-use assets are depreciated by the straight-line method, with no residual value from the commencement date to the earlier of the end of the lease term or end of the useful life of the right-of-use asset.
Retirement and pension plans
Net defined benefit assets/liabilities are recognized for employees’ and executive officers’ retirement benefits.
Pension assets are deducted from retirement benefit obligations and the net amount is recognized based on
the estimated amount of payment as of the balance sheet date. In calculating retirement benefit obligations,the Company applies a method of attributing expected retirement benefits to each period on a benefit formulabasis. The Company and its domestic consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by the straight-line method over stated years that do not exceed the average remaining
service period of the eligible employees (14 to 16 years). Past service costs are amortized in the accounting periods when they accrue.
Foreign consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by thestraight-line method over stated years that do not exceed the average remaining service period of the eligible
employees (7 to 25 years). Past service costs are amortized over 22 to 25 years.
Unrecognized actuarial gains and losses and unrecognized past service costs are recorded in “Remeasurements of defined benefit plans” in net assets after adjusting income tax effect.
Asset retirement obligations
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future
asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate canbe made. If a reasonable estimate of the asset retirement obligation cannot be made in the period in which
the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of theasset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period.
Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows arereflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of therelated asset retirement cost.
Income taxes
The provision for income taxes is computed based on the pretax income (loss) included in the consolidated
statement of income.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferredtaxes are measured by applying currently enacted tax laws to the temporary differences.
Consolidated taxation system
The Company and some of its consolidated subsidiaries have adopted the consolidated taxation system, with
the Company registered as the consolidated taxation parent company.
Tax effect accounting for the transition from the consolidated taxation system to the Grouptax sharing system
Concerning items which transitioned to the Group tax sharing system and those for which the nonconsolidated tax payment system were reviewed in line with the transition to the Group tax sharing system, which

13

Notes to the Consolidated Financial Statements

was established under the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 8 of 2020), theCompany and some of its domestic consolidated subsidiaries have not applied the provisions stipulated in
Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on
February 16, 2018) in accordance with the treatment set out Paragraph 3 of the “Practical Solution on theTreatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax
Sharing System” (PITF No. 39, issued on March 31, 2020). Instead, they have applied the provisions of the tax
regime before the revision to calculate the amounts of deferred tax assets and deferred tax liabilities.
Research and development costs
Research and development costs are charged to income as incurred.
Basis of translation of financial statements of foreign consolidated subsidiaries
The financial statements of foreign consolidated subsidiaries included in the consolidated financial statements
are translated into Japanese yen based on the following procedures:(1) Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen at the exchange
rates as of the balance sheet date.
(2) Income and expenses are translated into Japanese yen at the average rate during the year.
The differences of translation are included in foreign currency translation adjustment and non-controlling interests, which are presented as separate components of net assets.
Translation of foreign currency accounts
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates as of the balance sheet date and any difference arising from the translation is recognized in the consolidated statement of income if hedge accounting is not applied.
Derivatives and hedging activities
To hedge risks associated with the fluctuations of exchange rates, interest rates and commodity prices, theGroup uses foreign currency forward contracts, currency swaps, interest rate swaps and commodity swaps.
To hedge a part of the risks associated with the fluctuations of exchange rates for investments in foreign entities, the Company uses loans denominated in foreign currencies. The Group does not enter into derivatives for
trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: 1) all derivatives are recognized as either assets or liabilities and measured at fair value, with gains
or losses recognized in the consolidated statement of income and 2) for derivatives used for hedging purposes, if derivatives qualify for hedge accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
Receivables and payables denominated in foreign currencies are translated at the contracted rates if theforward contracts qualify for hedge accounting. Gains and losses related to qualifying hedges of firm commitments or anticipated transactions are deferred and recognized in income when the hedged transaction occurs.
If interest rate swaps qualify for hedge accounting and meet certain specific matching criteria, they will not bemeasured at market value, rather the differential paid or received under the swaps will be recognized in interest expenses or interest income.
Per share information
Earnings per share (basic) is computed by dividing net income attributable to owners of the parent available tocommon shareholders by the weighted-average number of shares issued for the period.
Earnings per share (diluted) reflects the potential dilution that could occur if securities were exercised or converted into common stock. Earnings per share (diluted) assumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends
applicable to the respective years, including dividends to be paid after the end of the fiscal year.
From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The
shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity per share14

Notes to the Consolidated Financial Statements

includes the number of shares held by the trust. The number of treasury shares excluded from the weightedaverage number of shares issued during the fiscal year used for the calculation of earnings per share includes
the number of shares held by the trust.
The number of treasury shares held by the trust excluded from the calculation of equity per share as of December 31, 2020 and 2019, is 139,000 shares and 146,200 shares, respectively. The number of treasury shares
held by the trust excluded from the calculation of earnings per share as of December 31, 2020 and 2019, is
140,038 shares and 146,323 shares, respectively.

Note 3:
Accounting
Changes

Adoption of the Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries, etc. for Consolidated Financial Statements and other standards
The “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for Consolidated Financial Statements” (Practical Issues Task Force (PITF) No. 18, issued on June 28, 2019) and “Practical
Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method”(PITF No. 24, issued on September 14, 2018) have been applied from the beginning of the fiscal year. As aresult of this application, in the event that foreign subsidiaries that adopt IFRS 9 “Financial Instruments” haveelected to present subsequent changes in fair value of equity instruments in other comprehensive income, theamounts of gain or loss on sale or impairment losses of such equity instruments will be adjusted as a gain orloss for the period for consolidated accounting.
As a result, the application of PITF No. 18 has no material impact on consolidated financial statements andper share information for the fiscal year.

Note 4:
New Accounting
Pronouncements

The Company and its domestic consolidated subsidiaries:• “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued on March 31, 2020)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.
30, issued on March 31, 2020)• “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued on March 31, 2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB)
jointly developed a comprehensive accounting standard for revenue recognition and issued “Revenue fromContracts with Customers” in May 2014 (IFRS 15 by the IASB, and Accounting Standards Update (ASU) 201409 by the FASB).
IFRS 15 was applied for annual reporting periods beginning on or after January 1, 2018, and ASU 2014-09
was also applied from annual reporting periods beginning after December 15, 2017. Based on such a situation,
the ASBJ developed the comprehensive accounting standard for revenue recognition and the implementation
guidance and issued them together.
The basic objective of the ASBJ in developing the accounting standard for revenue recognition was to enhance comparability between financial statements, which is one of the points of convenience of interfacingwith IFRS 15. Accordingly, the accounting standard fundamentally incorporates the basic policies of IFRS 15.
Also, where there are items that should be considered to reflect business practices in Japan, alternative policies will be added to the extent that comparability is not lost.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt these revised PITFs from the beginning of
the fiscal year ending December 31, 2022.
(3) Impact of the adoption of the revised PITFs
The Company is in the process of measuring the effects of applying these revised PITFs in future applicable periods.
• “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019)• “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, issued on July 4, 2019)• “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, issued on July 4, 2019)15

Notes to the Consolidated Financial Statements• “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, issued on July 4, 2019)• “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued on March 31, 2020)(1) Overview
The IASB and the FASB have provided detailed guidance of almost the same contents for fair value measurement (IFRS 13 Fair Value Measurement by the IASB, and ASU 2018-13 Fair Value Measurement (Topic 820) by
the FASB). Based on such a situation, the ASBJ issued “Accounting Standard for Fair Value Measurement,” as aresult of initiatives mainly concerning promoting the consistency between Japanese and international accounting standards regarding guidance for fair value measurement and required disclosures.
The basic objective of the ASBJ in developing the accounting standard for fair value measurement was toenhance comparability between financial statements of domestic and foreign entities, through a unified measuring method. Accordingly, the accounting standard fundamentally incorporates the basic policies of IFRS 13.
Also, where there are items that should be considered to reflect business practices in Japan, exceptional
treatments have been established for certain items to the extent that comparability is not lost significantly.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt these revised PITFs from the beginning of
the fiscal year ending December 31, 2022.
(3) Impact of the adoption of the revised PITFs
The Company is in the process of measuring the effects of applying these revised PITFs in future applicable periods.
• “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Correction”(ASBJ Statement No. 24, revised on March 31, 2020)(1) Overview
The ASBJ has amended certain accounting standards, and issued “Accounting Standard for Accounting Policy
Disclosures, Accounting Changes and Error Correction” to reflect recommendations for enhancing footnote
information related to accounting principles and procedures if the related accounting standards are not definitive. In addition, Paragraph 1-2 of annotations on generally accepted accounting principles continue tobe effective when enhancing footnote information in notes regarding accounting principles and procedures
adopted if the related accounting standards are not definitive, in order not to conflict with current accounting
practices where related accounting standards are definitive.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the issued accounting standard from theend of the fiscal year ending December 31, 2021.
• “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31, issued on
March 31, 2020)(1) Overview
The IASB issued International Accounting Standard 1, “Presentation of Financial Statements,” in 2003, andParagraph 125 of this accounting standard requires disclosures of key sources of estimation uncertainty. As
such information is required for the convenience of users of financial statements in Japan, the ASBJ issued“Accounting Standard for Disclosure of Accounting Estimates.” The ASBJ presents the principles and the
purposes of disclosure of key sources of estimation uncertainty, and the items to be disclosed should be determined by management in a way that helps users of the financial statements understand the judgments
applied. The nature and extent of the information to be disclosed will vary according to the nature of theassumptions and the other circumstances. This accounting standard was developed based on Paragraph 125
of “Presentation of Financial Statements.”(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the issued accounting standard from theend of the fiscal year ending December 31, 2021.

16

Notes to the Consolidated Financial Statements

Foreign consolidated subsidiaries:
ASU 2016-02 Leases
ASU 2019-10 Financial Instruments–Credit Losses (Topic 326), Derivatives and Hedging (Topic 815)
and Leases (Topic 842): Effective Dates(1) Overview
These accounting standards require lessees to recognize a right-of-use asset and a lease liability in the statement of financial position. There are no significant changes for lessors in these accounting standards.
The FASB has issued ASU 2019-10, which amends the effective dates for three major accounting standards.
The ASU defers the effective dates for the credit losses, derivatives and hedging, and leases standards forcertain companies.
(2) Date of adoption
Foreign consolidated subsidiaries will adopt ASU 2016-02 from the beginning of the fiscal year ending December 31, 2022.
(3) Impact of the adoption of the accounting standards
The Company is in the process of measuring the effects of applying the accounting standards in future applicable periods.

Note 5:Additional
Information

Board Benefit Trust (BBT)
With regard to compensation for executive officers, as well as directors who concurrently serve as executive
officers (the “Target Officers”), the Company introduced a performance-based stock compensation plan called
BBT (the “Plan”) from the fiscal year ended December 31, 2017. The purpose of the Plan is to further clarify
the linkage between the compensation of the Target Officers, and corporate performance and the value of theCompany’s shares. The intended result is strengthening the Target Officers’ awareness of their contributions to
the medium- to long-term improvement of corporate performance and value.
Accounting treatment related to the trust agreement is in accordance with “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc. through Trusts” (PITF No. 30, issued on March 26, 2015).
(1) Outline of the transactions
The trust established under the Plan acquires the Company’s shares by cash contributed by the Company. The
trust provides shares of the Company and the cash equivalent to the market price of the shares of the Company(the “Company’s Shares and Cash Benefits”) to the Target Officers, in accordance with the Rules of Officer Share
Benefit established by the Company. The Target Officers shall in principle receive the Company’s Shares and Cash
Benefits upon their retirement.
(2) The Company’s shares remaining in the trust
The shares remaining in the trust are recorded under net assets as treasury shares at the book value in the trust(excluding incidental costs). The book value and number of such treasury shares are ¥549 million and 139 thousand as of December 31, 2020, and ¥577 million and 146 thousand as of December 31, 2019, respectively.
Acquisition of the shares and assets of a pigments business from BASF SE and transformation of thebusiness into a subsidiary
On August 29, 2019, the Company resolved to acquire the shares and assets of the Colors & Effects businessof BASF SE, Europe’s largest chemicals manufacturer, and entered into the master sale and purchase agreement. This transaction is subject to regulatory approval by pertinent U.S., European and other authorities aswell as other customary conditions.
(1) Objectives of the acquisition of shares and assets
To hasten the qualitative transformation of its Color & Display business, the Company is working to expand its
functional pigments business with the aim of driving growth as a leading global manufacturer of high-growth,high-value specialty pigments, including those for displays, cosmetics and automobiles. The annual global
pigments market is estimated at approximately ¥2.3 trillion. The Company is a leader in organic pigments anda valued manufacturer of aluminum effect pigments. The target business, which is based in Europe and has

17Notes to the Consolidated Financial Statements

sites around the world, has established itself as a prominent global manufacturer of effect pigments (for pearl
pigments) and for specialty inorganic pigments. Accordingly, the product portfolios of the Company and thetarget business are highly complementary, with little product overlap. Through this acquisition, the Company
will add a functional pigments product portfolio which is highly regarded by customers. The Company has
committed itself to achieving sustainable growth for its color materials business by expanding its functional
pigments business, recognizing this as crucial to bolstering its corporate value.
(2) Name of the seller of the target business
BASF SE(3) Profile of the target businessThis acquisition involves obtaining the pigments business–related assets—including technologies, patents andother intellectual property, as well as goodwill not included in the share purchase—and the shares of 18 individual companies.
(4) Schedule of the acquisition of the target business: In the first quarter of 2021
(Notes)1. This transaction is subject to regulatory approval by pertinent U.S., European and other authorities—including under the antitrust laws of the relevant countries—as well as other customary conditions.
2. Owing to regulatory review timing and other closing conditions, the effective date of the transfer of shares
and assets may change.
3. The closing of this transaction is pending approval by the U.S. Federal Trade Commission. As such, there is apossibility that execution will be rescheduled to the first half of 2021 as a consequence of ongoing approval
procedures.
(5) Cost of acquisition (Reference): €985 million (¥116.2 billion)(Notes)1. The figure above is derived from adjusting cash and debt as of December 31, 2018, from the enterprisevalue (€1,150 million) of the target business. The actual cost of acquisition may vary depending on actual
net cash/debt and differences in working capital, among others, at closing.
2. Advisory and other fees will depend on fees related to procedures to determine compliance with the antitrust laws of the United States and Europe, as well as of other relevant countries. Accordingly, such expenses
are not included.
3. The exchange rate used is ¥118.00/€1.00. This figure has been rounded.
(6) Plans for raising funds
The Company intends to raise funds in a manner that avoids a decline in capital efficiency due to stock dilution
and which maintains financial soundness. Thus, the Company decided to finance through a subordinated termloan. DIC has no plans to raise funds using equity financing.
Financing through a subordinated term loan
Procurement of a total of ¥60 billion through a subordinated term loan (“the subordinated loan”) was approved at a meeting of the Company’s Board of Directors held on March 24, 2020.
(1) Purpose and significance of the subordinated loan
The Company had resolved to acquire the shares and assets of the Colors & Effects business of German firm
BASF SE on August 29, 2019.
With regard to the method of procuring funds for this acquisition, the Company planned to choose an approach that would avoid a decline in capital efficiency due to stock dilution and enable it to maintain financial
soundness. Having since explored hybrid financing, the Company made the decision to use a subordinated loan.
Also, the Company currently has no plans to raise funds through the issue of new shares (equity financing).
(2) Characteristics of the subordinated loan
A subordinated loan is a type of hybrid financing midway between equity and debt. Accordingly, while classified as debt, it has characteristics similar to equity. As a result, the subordinated loan will be eligible for recognition by credit rating agencies as having equity credit attributes to a certain extent, enabling the Company tostrengthen its financial base without causing stock dilution. Specifically, the Company expects 50% of the total
amount procured to be assessed as having equity credit attributes by Japan Credit Rating Agency, Ltd.

18

Notes to the Consolidated Financial Statements(3) Summary of the subordinated loan
• Total amount procured: ¥60 billion• Contract date: March 31, 2020
• Drawdown date (*1): Any date up to and including June 30, 2021
• Use of funds procured: Business acquisition• Due date: 60 years from the drawdown date
• Early repayment (*2): The Company may repay before the due date all or part of the principal on each interest payment date five years from the drawdown date or later, or in certain other specified circumstances.
• Applicable interest rate: From drawdown date up to the 10th year, at base floating interest rate plus the initial spread.
From the 10th year up to the 25th year, at base floating interest rate plus a 0.25% stepup from the initial spread.
From the 25th year on, at base floating interest rate plus a 1.00% step-up from theinitial spread.
• Interest deferral clause: The Company may defer payment of interest.
• Subordination clause: The creditors of the subordinated loan shall have a claim subordinated to that of othersenior debt creditors in the event of the Company’s liquidation, bankruptcy, corporate
reorganization or civil rehabilitation proceedings under Japanese law or any equivalent
proceedings under any laws other than Japanese law. Any provisions stipulated in thesubordinated loan agreement shall not be amended in any manner detrimental to anyof the Company’s creditors other than the creditors of the subordinated loan.
• Lenders: MUFG Bank, Ltd., Mizuho Bank, Ltd., etc.
• Assessment of equity credit attributes
Japan Credit Rating Agency: Medium / 50%*1 As described in “Acquisition of the shares and assets of a pigments business from BASF SE and transformation of the business into a subsidiary,” there is a possibility that execution will be rescheduled to the first half of 2021. Therefore, there is a possibility that the drawdown
date will be rescheduled to any date up to and including June 30, 2021. Accordingly, on March 5, 2021, the Company resolved to reschedulethe drawdown date.
*2 In the case of early repayment of the subordinated loan, the Company anticipates procuring funds through the issue of common stock or
debt (refinancing securities) approved by rating agencies as having equity credit attributes equivalent to or higher than the subordinatedloan. However, if the Company satisfies certain financial requirements when early repayment is made five years after the drawdown dateor later, it may defer the procurement of funds through refinancing securities.

Accounting estimates associated with the spread of COVID-19
Owing to the COVID-19 pandemic, global economic growth slowed in the second quarter (April 1–June 30,2020) and the third quarter (July 1–September 30, 2020), as a result of which shipments fell in multiple areas.
However, shipments of many products, notably materials for use in automobiles and publication inks, recovered in the fourth quarter (October 1–December 31, 2020). Although the impact of the spread of COVID-19
varies by region and business, the Company has made accounting estimates such as impairment of noncurrent assets and recoverability of deferred tax assets based on the assumption that economic conditions will
gradually recover in fiscal year 2021 and has assumed that an impact on the estimates would not be significant
as of December 31, 2020.
However, due to uncertainties in the application of such assumption to the estimates above, unexpectedchanges in the recovery time for COVID-19 or its impact on the economic environment may affect the financial
position, operating results and cash flows of the Company in the future.

19

Notes to the Consolidated Financial Statements

Note 6:
Cash and Cash
Equivalents

Cash and cash equivalents as of December 31, 2020 and 2019, include the following:

Cash and deposits
Less: time deposits and short-term investments which mature over three months after
the date of acquisition
Cash and cash equivalents

2020

Millions of yen
2019¥44,885¥16,786(3,531)(95)¥ 41,354¥16,690

Note 7:
Investments in
Unconsolidated
Subsidiaries andAffiliates

Investments in unconsolidated subsidiaries and affiliates as of December 31, 2020 and 2019, include the following:
2020

Millions of yen
2019

Investments in stock of unconsolidated subsidiaries and affiliates¥40,756¥44,505

Investments in equity of unconsolidated subsidiaries and affiliates

678

653

¥41,434¥45,158

Total

Note 8:Investment
Securities

The carrying amounts and aggregate fair values of available-for-sale securities as of December 31, 2020 and
2019, are as follows:
Millions of yen
2020
Cost

Unrealized
gains

Unrealized
lossesFair value

Available-for-sale securities:
Stocks¥8,508¥5,379¥(1,028)¥12,859

Total¥8,508¥5,379¥(1,028)¥12,859
Millions of yen
2019

Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,330¥3,147¥(501)¥10,976

Total¥8,330¥3,147¥(501)¥10,976

Available-for-sale securities:

Note 9:Property, Plant
and Equipment

Accumulated depreciation on property, plant and equipment as of December 31, 2020 and 2019, is ¥567,341
million and ¥563,939 million, respectively.

Note 10:
Loss on Business
Liquidation

In relation to the divestiture of a high-performance pigments business based in the United States, the Company
recognized a loss on business liquidation, which it expects to incur on the disposal of assets. The Company hasentered into an agreement with the German company BASF to acquire the shares and assets of the latter’sColors & Effects business, and is currently working with BASF to close this transaction in the first quarter of2021. The divestiture is being undertaken to ensure compliance with relevant antitrust laws.

20

Notes to the Consolidated Financial Statements

Note 11:
Impairmentof Long-Lived
AssetsImpairment losses on long-lived assets for the fiscal year ended December 31, 2020, for each asset group are
as follows:
Millions of yen
2020
Used status

Factory assets in use
Idle assets
Factory assets in use
Idle assets

Category of assets

Machinery, equipment andvehicles, and Other
Buildings and structures,
Machinery, equipment andvehicles, and Other
Machinery, equipment andvehiclesBuildings and structures,
Machinery, equipment andvehicles, and Other

Location

Allocated impairment loss

Australia¥ 478

Ina, Japan

383

Singapore

379

Others12

Total¥1,251

In reviewing the impairment of long-lived assets, the Group categorizes its operating assets mainly by eachconsolidated company or product group.
The carrying amount of factory assets in use was reduced to its recoverable amount because the recoverable
amount is less than the carrying amount.
The carrying amount of idle assets was reduced to its recoverable amount because of production stopand others.
For foreign consolidated subsidiaries, the recoverable amount was measured as value in use. Value in use of
relevant assets was calculated by discounting future cash flows at a rate from 10.0% to 10.5%. For idle assets,
the recoverable amount was measured as value in use and was evaluated as zero because an estimate of future cash flows is zero.
Impairment losses on long-lived assets for the fiscal year ended December 31, 2019, for each asset groupare as follows:
Millions of yen
2019
Used status

Factory assets in use
Factory assets in use
Factory assets in use

Category of assets

Location

Allocated impairment loss

Buildings and structures, and Land

Hirakata, Japan¥1,463

Kawaguchi, Japan

925

China

690

Buildings and structures,
Machinery, equipment andvehicles, Land, and Other
Buildings and structures,
Machinery, equipment andvehicles, Land, and Other

Total¥3,078In reviewing the impairment of long-lived assets, the Group categorizes its operating assets mainly by eachconsolidated company or product group.
The carrying amount of factory assets in use was reduced to its recoverable amount because the recoverable
amount is less than the carrying amount.
For domestic consolidated subsidiaries, the recoverable amount was measured as value in use. Value in useof relevant assets was calculated by discounting future cash flows at a rate of 6.0%. For foreign consolidated
subsidiaries, the recoverable amount was measured as value in use and was evaluated as zero.

21

Notes to the Consolidated Financial Statements

Note 12:
Short-Term
Loans Payable
and Long-Term
Loans Payable

Information with respect to short-term loans payable as of December 31, 2020 and 2019, is as follows:
The average interest rate for the fiscal years ended December 31, 2020 and 2019, is 0.99% and 2.26%,
respectively, for short-term loans payable, and -0.00% and -0.01%, respectively, for commercial papers.
Bonds payable, long-term loans payable and lease obligations as of December 31, 2020 and 2019, comprisethe following:
2020

Millions of yen
2019

0.53% Japanese yen notes due 2022

¥ 10,000¥ 10,000

1.00% Japanese yen notes due 2025

10,00010,000

0.95% Japanese yen notes due 2036

5,000

5,000

0.36% Japanese yen notes due 2026

5,000

5,000

0.42% Japanese yen notes due 2027

10,00010,000

0.15% Japanese yen notes due 2022

10,00010,000

0.15% Japanese yen notes due 2023

10,00010,0000.19% Japanese yen notes due 2024

10,00010,0000.28% Japanese yen notes due 2029

10,00010,0000.05% Japanese yen notes due 2023

20,000—Loans due 2020–2031, with an average interest rate of 1.30%

150,862

146,058

5,604

6,435

Lease obligations
Subtotal
Less: current portion of long-term loans payable
Less: current portion of bonds
Less: lease obligations—current
Total

256,466

232,493(27,096)(23,456)——(1,061)(1,244)¥228,309¥207,793

The annual maturities of bonds payable, long-term loans payable and lease obligations for the fiscal years
subsequent to December 31, 2020, are as follows:
Millions of yen

2021

¥

—

2022

20,0002023

30,0002024

10,0002025

10,000

Thereafter

30,000Total¥100,000

22

Notes to the Consolidated Financial Statements

The amounts of assets pledged as collateral and secured borrowings and loans as of December 31, 2020,
comprise the following:
Millions of yen

Assets pledged as collateral:
Cash and deposits¥

14

Notes and accounts receivable—trade

2,597

Inventories

1,447

Property, plant and equipment

907

Land

2,200

Total

¥7,166

Secured borrowings and loans:
Short-term loans payable¥

Current portion of long-term loans payable—75

Long-term loans payable

620

Total

¥ 695

Note 13:Retirement andPension Plans(1) Overview of adopted retirement and pension plans
The Company and a number of domestic consolidated subsidiaries have defined benefit pension plans such asa cash balance–style pension plan and retirement plans, and defined contribution pension plans. Some foreign
consolidated subsidiaries maintain defined benefit pension plans and defined contribution pension plans. The
Company contributes certain available-for-sale securities to the employee retirement benefit trust.
(2) Defined benefit pension plans (including multi-employer plan)
Changes in defined benefit obligations

As of January 1, 2020

Domestic plans

Millions of yen
Foreign plans¥89,699¥150,981

Service cost

2,132

589

Interest cost

708

3,106

Actuarial gains and losses

2,342

11,947

Benefits paid

(4,594)(6,217)

Past service cost—

27

Exchange translation differences—(4,523)Other
As of December 31, 2020

(50)

295

¥90,237¥156,205

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

As of January 1, 2019
Service cost

Domestic plans

Millions of yen
Foreign plans¥91,678¥135,066

2,184

549

Interest cost

729

4,082

Actuarial gains and losses(405)

16,658Benefits paid

(4,691)(6,805)

Past service cost

306

153

Exchange translation differences

—

549

Other
As of December 31, 2019

(102)

729

¥89,699¥150,981

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

23

Notes to the Consolidated Financial Statements

Changes in plan assets
Domestic plans

Millions of yen
Foreign plans¥129,969¥133,673

As of January 1, 2020
Expected return on plan assets

3,286

5,965

Actuarial gains and losses

15,45912,009Contributions by the employer

3,519

4,242

Benefits paid

(4,446)(6,053)—(4,450)Exchange translation differences
Other

—

(18)

¥147,788¥145,368

Domestic plans

Millions of yen
Foreign plans¥114,309¥117,005

As of December 31, 2020

As of January 1, 2019
Expected return on plan assets

3,086

5,800

Actuarial gains and losses

12,834

12,995Contributions by the employer

4,333

3,719

Benefits paid

(4,593)(6,782)—

951

Exchange translation differences
Other
As of December 31, 2019

—

(15)

¥129,969¥133,673

Reconciliation of defined benefit obligations and plan assets on retirement benefits recognized in
the consolidated balance sheet

Domestic plans

Funded defined benefit obligations¥

Millions of yen
2020
Foreign plans

89,173¥ 154,740

Plan assets(147,788)(145,368)

Subtotal(58,614)

9,372

Unfunded defined benefit obligations

1,064

1,465

Net amount of liabilities and assets recognized in consolidated balance sheet¥ (57,550)¥

Liabilities (net defined benefit liability)¥¥

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,112(58,662)¥ (57,550)

Domestic plans

Funded defined benefit obligations¥

10,837
15,959(5,122)¥

10,837

Millions of yen
2019Foreign plans

88,562¥ 149,637

Plan assets(129,969)(133,673)

Subtotal(41,407)

15,964

1,137

1,344

Unfunded defined benefit obligations
Net amount of liabilities and assets recognized in consolidated balance sheet¥ (40,270)¥

Liabilities (net defined benefit liability)¥¥

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,193(41,463)¥ (40,270)

17,30820,184(2,876)¥

17,308

24

Notes to the Consolidated Financial Statements

Retirement benefit expenses and its breakdowns

Domestic plans

Service cost

¥ 2,132

Interest cost

Millions of yen
2020
Foreign plans

¥

589

708

3,106

(3,286)(5,965)

Recognition of actuarial gains and losses

464

1,514

Amortization of past service cost

—

27

18

¥ (729)

Expected return on plan assets

Total

¥

Notes: 1. Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.
2. Other than these retirement benefit expenses,¥65 million of losses on termination of the retirement benefit plans has been recognized in non-operating expenses as a result of the termination of the retirement benefit plans of a consolidated subsidiary during the
fiscal year ended December 31, 2020.

Domestic plans

Millions of yen
2019Foreign plans

Service cost

¥ 2,184

Interest cost

729

4,082

(3,086)(5,800)

431

1,408

Expected return on plan assets
Recognition of actuarial gains and losses
Amortization of past service cost
Total

¥

549

306
¥

563

153
¥

392

Notes: 1. Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.
2. ¥443 million of losses from amortization of past service cost has been recognized in extraordinary loss as a result of the amendment
to the retirement benefit plans of the Company and a number of consolidated subsidiaries during the fiscal year ended December
31, 2019.

Past service cost and actuarial gains and losses
The past service cost and actuarial gains and losses recognized in accumulated other comprehensive income asremeasurements of defined benefit plans (amount before income tax effect) for the fiscal years ended December 31, 2020 and 2019, are as follows:

Past service cost

Domestic plans

Millions of yen
2020
Foreign plans¥¥

Actuarial gains and losses
Total

Past service cost
Actuarial gains and losses
Total

—

45

13,582

1,883¥13,582¥1,928Domestic plans

Millions of yen
2019Foreign plans

¥

¥

—

10

13,669(2,919)¥13,669¥(2,909)

25

Notes to the Consolidated Financial Statements

Unrecognized past service cost and unrecognized actuarial gains and losses
The unrecognized past service cost and unrecognized actuarial gains and losses recognized in accumulated
other comprehensive income as remeasurements of defined benefit plans (amount before income tax effect)
for the fiscal years ended December 31, 2020 and 2019, are as follows:

Domestic plans

Unrecognized past service cost¥

Unrecognized actuarial gains and losses
Total

Unrecognized past service cost
Unrecognized actuarial gains and losses—

Millions of yen
2020
Foreign plans

¥

(692)

25,456(45,863)¥25,456¥(46,555)

Domestic plans

Millions of yen
2019Foreign plans

¥

—

¥

(737)

11,874(47,746)¥11,874¥(48,483)

Domestic plans

2020
Foreign plans

Equity securities

54.8%

27.4%

Debt securities

20.4%

59.2%

Total

Major breakdown of plan assets

Other
Total

24.8%

13.4%

100.0%

100.0%

Note: 36.6% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Domestic plans

2019
Foreign plans

Equity securities

55.9%

21.2%

Debt securities

22.5%

63.0%

Other

21.6%

15.8%

100.0%

100.0%

Total

Note: 29.7% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Actuarial assumptions
Domestic plans

2020
Foreign plans

Discount rate

0.8%

0.3%–2.5%

Expected return rate on plan assets

3.0%

4.6%–5.0%

Expected rate of increase in salary3.1%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

Domestic plans

2019
Foreign plans

Discount rate

0.8%

0.4%–3.2%

Expected return rate on plan assets

3.0%

4.6%–5.5%

Expected rate of increase in salary

3.1%

1.7%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

(3) Defined contribution pension plans
The required contributions borne by the Company and a number of consolidated subsidiaries in relation to thedefined contribution pension plans for the fiscal years ended December 31, 2020 and 2019, are ¥1,916 millionand ¥2,001 million, respectively.

26

Notes to the Consolidated Financial Statements

Note 14:Net Assets

Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria suchas: (a) having a board of directors, (b) having independent auditors, (c) having a board of corporate auditorsand (d) the term of service of the directors being prescribed as one year rather than the two years of a normal
term by its articles of incorporation, the board of directors may declare dividends (except for dividends in kind)at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends in kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury shares. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.
(2) Increases/decreases and transfer of common stocks, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus)
depending on the equity account charged upon the payment of such dividends until the total of the aggregate
amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus and retained earnings can be transferred among the accounts under certain conditions upon resolutionof the shareholders.
(3) Treasury shares and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury shares and dispose of such treasury
shares by resolution of the board of directors. The amount of treasury shares purchased cannot exceed theamount available for distribution to the shareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights, which were previously presented as a liability, are now
presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury shares. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights.

Note 15:
Capital Stock

The total amount of capital stock authorized as of December 31, 2020 and 2019, is 150,000,000 shares.
The total amount of capital stock issued as of December 31, 2020 and 2019, is 95,156,904 shares.

27

Notes to the Consolidated Financial Statements

Note 16:
Treasury Shares

The number of treasury shares as of December 31, 2020 and 2019, is as follows:
Shares2020
Decrease in As of December 31,
FY20202020

As of January 1,
2020

Increase in
FY2020Common stock

511,622

1,900

7,200

506,332

Total

511,622

1,900

7,200

506,332

Treasury shares:

Notes: 1. The shares held by the BBT (139,000 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (1,900 shares) was due to the purchase of odd-lot shares.
3. The decrease of treasury shares of common stock (7,200 shares) was due to the benefit of the Company’s shares by the BBT.

Shares2019
Decrease in As of December 31,
FY20192019

As of January 1,
2019

Increase in
FY2019Common stock

511,035

2,187

1,600

511,622

Total

511,035

2,187

1,600

511,622

Treasury shares:

Notes: 1. The shares held by the BBT (146,200 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (2,187 shares) was due to the purchase of odd-lot shares.
3. The decrease of treasury shares of common stock (1,600 shares) was due to the benefit of the Company’s shares by the BBT.

Note 17:
Income Taxes

The differences between the normal effective statutory tax rate in Japan and the actual effective tax rate forthe fiscal years ended December 31, 2020 and 2019, are as follows:
2020

2019

30.6%

30.6%

Valuation allowance change

15.9%

2.5%

Tax rate differences(6.0)%(6.4)%

Equity in earnings of affiliates(1.0)%(2.1)%

Entertainment and other non-deductible expenses

1.2%

3.0%

Normal effective statutory tax rate in Japan
Adjustments:

Elimination of intercompany dividends income

8.2%

9.7%

Dividends income and other non-taxable income(6.8)%(15.2)%

State, provincial, municipal and local taxes

0.6%

0.8%

Tax credit for research and development and others(3.2)%(1.3)%Tax credit for the Special Tax Law for the March 11 Earthquake(1.5)%(0.1)%

Other(3.4)%

5.4%

34.6%

26.9%

Actual effective tax rate

The tax effects of significant temporary differences and loss carryforwards, which resulted in deferred tax assets and liabilities, as of December 31, 2020 and 2019, are as follows:

28

Notes to the Consolidated Financial Statements

2020

Millions of yen
2019

3,630

¥ 3,381

Property, plant and equipment

4,391

4,777

Intangible assets

5,095

4,863

Research and development costs

4,500

4,693

Allowance for doubtful accounts

1,523

1,685

Provision for bonuses

1,667

1,717

Net defined benefit liability

4,666

5,733

Deferred tax assets:
Inventories¥

Unrealized gain

758

799

Net operating loss carryforwards (Note 2)

19,252

18,198Other

13,1998,481

Subtotal

58,68254,326

Less: valuation allowance for tax loss carryforwards (Note 2)(12,699)(8,315)

Less: valuation allowance for temporary differences(3,980)(4,023)

Valuation allowance (Note 1)(16,679)(12,338)

42,002

41,989Total
Deferred tax liabilities:
Property, plant and equipment(2,720)(2,475)Net defined benefit asset(9,597)(6,852)Contribution of securities to employee retirement benefit trust(1,255)(1,277)

Deferred income taxes related to gains from property, plant and equipment(2,560)(2,683)

Valuation difference on available-for-sale securities(1,343)

(812)

Other

(4,645)(3,466)

Total(22,120)(17,565)

Net deferred tax assets¥ 19,882¥ 24,424

Notes: 1. The valuation allowance decreased significantly for the fiscal year ended December 31, 2020. A major reason for this is a decrease invaluation allowance for tax loss carryforwards of the Sun Chemical Group.
2. The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred tax assets as of December
31, 2020, were as follows:

2021

2022

2023

2024

2025

Thereafter

Total

Tax loss carryforward (*a)¥ 689

¥ 1,197¥ 1,631

¥ 169

¥ 148

¥15,418¥ 19,252

Valuation allowance(571)(1,010)(1,345)

(151)

(103)

(9,519)(12,699)

Net deferred tax assets

119

187

286

18

45

5,900

(*b) 6,553(*a) Tax loss carryforward shown in the above table is after multiplying by the statutory tax rate.
(*b) Deferred tax assets of ¥6,553 million was recognized for tax loss carryforward of ¥19,252 million. No valuation allowance is recognized
for tax loss carryforward since the amount was determined to be recoverable based on expected future taxable income.

Note 18:
Research andDevelopment
Costs

Research and development costs charged to income for the fiscal years ended December 31, 2020 and 2019,are ¥12,029 million and ¥12,505 million, respectively.

29

Notes to the Consolidated Financial Statements

Note 19:
LeasesOperating leases
Future minimum rental payments under non-cancellable operating leases as of December 31, 2020 and 2019,are as follows:

Due within one year
Due after one year
Total

2020

Millions of yen
2019¥1,883¥1,932

6,105

6,379

¥7,988¥8,311

Note 20:
Financial
Instruments

Group policy for financial instruments
The Group manages funds with safe and secure financial assets. Means of financings include direct financing
such as the issuance of bonds and commercial papers and liquidation of receivables, as well as indirect financing such as short- and long-term bank borrowings, the terms of which are determined based on financial market conditions and account balances at the time.
Nature and extent of risks arising from financial instruments
Receivables such as trade notes and accounts receivable are exposed to customer credit risk. In addition, someof such receivables are denominated in foreign currencies and are exposed to the market risk of fluctuation inforeign currency exchange rates. Investment securities, mainly the stocks of customers and suppliers, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and accounts payable, are less than one year. In addition,some of such payables are denominated in foreign currencies and are exposed to the market risk of fluctuation
in foreign currency exchange rates.
Funds needed for operations are mainly procured as short-term loans payable, whereas funds needed forcapital expenditure and investment are mainly procured as long-term loans payable, bonds payable and leaseobligations with regard to finance lease transactions. A part of such bank loans, bonds and lease obligations
are exposed to market risks from changes in variable interest rates. Trade accounts payable and loans payableof the Company are also exposed to liquidity risk that the Company cannot meet its contractual obligations infull on maturity dates.
Risk management for financial instruments
The Company manages its credit risk from trade notes and accounts receivable on the basis of internal guidelines, which include the monitoring of payment terms and balances of customers by the sales and businessadministration departments to identify the default risk of customers at an early stage. The consolidated subsidiaries of the Company manage the exposure to credit risk on their own in accordance with their internal guidelines. Investment securities are managed by monitoring market values, the financial position of issuers andconsidering the relationship with customers and suppliers on a regular basis. The Group also tries to mitigate
liquidity risk by arranging lines of credit with financial institutions, along with adequate financial planning.
Fair values of financial instruments
The following tables present the carrying amounts and the fair values of financial instruments as of December 31, 2020 and 2019. Financial instruments whose fair values are not reliably measured are excluded fromthe tables below.

30

Notes to the Consolidated Financial Statements

Millions of yen
2020
Difference

Carrying amount

Fair value

Cash and deposits¥ 44,885¥ 44,885

Notes and accounts receivable—trade197,595

197,595—

22,31834,322

12,004

Assets:¥—Investment securities
Stocks of subsidiaries and affiliates
Other

12,85912,859—

Total¥277,658¥289,662¥12,004¥ 95,263¥ 95,263¥

Short-term loans payable

10,275

10,275—Current portion of long-term loans payable

27,09627,096—

Lease obligations (current)

1,061

1,061

—

Income taxes payable

4,985

4,985

—

Bonds payable

100,000

100,314314

Long-term loans payable

123,766

123,918

152

Liabilities:
Notes and accounts payable—trade

Lease obligations (non-current)
Total

—

4,543

4,783

¥366,989¥367,695

¥

240
706

¥

¥

¥

—

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

21
3,565

¥

3,586

21
3,565

¥

3,586

—
¥

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

—

31

Notes to the Consolidated Financial Statements

Carrying amount

Fair value

Millions of yen
2019
Difference

Cash and deposits¥ 16,786¥ 16,786¥

Notes and accounts receivable—trade211,232

211,232—

26,72331,574

4,851

Assets:—Investment securities
Stocks of subsidiaries and affiliates
Other

10,976

10,976—

Total¥265,717¥270,568¥4,851¥108,562¥108,562¥

Short-term loans payable

20,13920,139—Current portion of long-term loans payable

23,456

23,645

189

Liabilities:
Notes and accounts payable—trade—

Lease obligations (current)

1,244

1,244

—

Income taxes payable

2,556

2,556

—

Bonds payable

80,00080,640640Long-term loans payable

122,602

123,014412

Lease obligations (non-current)
Total

5,191

5,514

323

¥363,750¥365,314¥1,564

¥

(106)

¥

(106)

¥

—

¥

879

¥

879

¥

—

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

985

985

—

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

The valuation techniques used to estimate the fair values of financial instruments and information on themarketable securities and derivative financial instruments are as follows:
AssetsCash and deposits and notes and accounts receivable–trade
The fair values of cash and deposits and notes and accounts receivable–trade approximate their carrying
amounts as these amounts are settled in a short period of time.
Investment securities
The fair values of investment securities are measured at the quoted market price on the stock exchange.
Liabilities
Notes and accounts payable–trade, short-term loans payable, lease obligations (current) and income
taxes payable
The fair values of these accounts approximate their carrying amounts as these amounts are settled in a shortperiod of time.
Current portion of long-term loans payable and long-term loans payable
For long-term loans payable bearing a floating interest rate, the fair values of those subject to special treatment
of interest rate swaps are based on present value by totaling the amount of principal and interest, together
with related interest rate swaps, discounted by the interest rate that would apply if equivalent long-term loans
were newly entered into. The fair values of other long-term loans payable for which a floating interest rate isapplied approximate their carrying amounts, due to the fact that the market rate of interest is quickly factored
in while credit status of the Company remains unchanged.
On the other hand, the fair values of long-term loans payable for which a fixed interest rate is applied aredetermined by discounting the cash flows related to the long-term loans payable. The discount rate applied forthe calculation above is the interest rate that may be currently available to the Group for loans payable withsimilar terms and conditions.

32

Notes to the Consolidated Financial Statements

Lease obligations (non-current)
The fair values of these accounts are determined by discounting the cash flows related to the lease obligations.
The discount rate applied for the calculation above is the interest rate that may be currently available to theGroup for lease obligations with similar terms and conditions.
Bonds payable
The fair values are measured at the quoted market prices.
Derivative financial instruments
Please see Note 21 “Derivative Financial Instruments” for more information.
Financial instruments whose fair value is not reliably measured
There are no market prices for non-listed stocks and others (carrying amounts as of December 31, 2020 and
2019, are ¥22,023 million and ¥21,614 million, respectively) whose future cash flows cannot be estimated.
The fair values of such non-listed stocks and others are not reliably determinable and thus excluded frominvestment securities.
Redemption schedule for financial assets and securities
The redemption schedules for financial assets and securities with contractual maturities as of December 31,
2020 and 2019, are summarized as follows:

Notes and accounts receivable—trade
Total

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2020
Due after
10 years¥197,595

¥—

¥—

¥—

¥197,595

¥—

¥—

¥—

Due after 5 years
through 10 years

Millions of yen
2019
Due after
10 years

Due in 1 year
or less

Notes and accounts receivable—trade
Total

Due after 1 year
through 5 years¥211,232

¥—

¥—

¥—

¥211,232

¥—

¥—

¥—

Repayment schedule for bonds payable, long-term loans payable and other interest-bearing debt
The repayment schedules for bonds payable, long-term loans payable and other interest-bearing debt with
contractual maturities as of December 31, 2020 and 2019, are summarized as follows:

Due in 1 year
or less

Short-term loans payable¥10,275

Current portion of long-term loans payable

27,096

Lease obligations (current)

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2020
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

1,061

—

—

—

Bonds payable—

70,00025,0005,000

Long-term loans payable—

82,41541,32328

Lease obligations (non-current)
Total

—

2,387

1,577

578

¥38,432¥154,802¥67,900¥5,606

33

Notes to the Consolidated Financial Statements

Due in 1 year
or less

Short-term loans payable¥20,139

Current portion of long-term loans payable

23,456

Lease obligations (current)

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2019
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

1,244

—

—

—

Bonds payable—

40,00035,0005,000

Long-term loans payable—

90,03932,495

68

Lease obligations (non-current)

—

2,561

2,062

568

¥44,839¥132,600¥69,557¥5,636

Total

Note 21:
Derivative
Financial
Instruments

The Group has entered into various foreign currency forward contracts, currency options and swaps, interest
rate swaps and commodity swaps.
Foreign currency forward contracts and currency options and swaps are entered into to hedge the effects of
exchange rate changes on receivables and payables or anticipated transactions denominated in foreign currencies. Interest rate swaps are entered into to hedge the effects of interest rate changes and to reduce financing cost. Commodity swaps are entered into to hedge the effects of commodity price changes of fuel. Loansdenominated in foreign currencies are entered into to hedge a part of risks associated with the fluctuations of
exchange rates for investments in foreign entities.
The Group does not use derivative instruments for trading or speculative purposes. Derivative transactions
performed by the Group have risks due to fluctuations of exchange rates, interest rates and other factors.
Because these transactions are executed with creditworthy financial institutions, the Group does not anticipate the likelihood of any losses resulting from default by the counterparties to these agreements.
Internal regulation for managing derivative transactions has been established for the purpose of risk control
in the Company, and all derivative transactions are performed under this regulation.
The execution of derivative transactions is carried out by the Company’s finance department, and the management of risk is monitored by the Company’s accounting department. Transactions are periodically reported
to the board of directors by the officer in charge of the Finance and Accounting Division.
Consolidated subsidiaries execute transactions in accordance with their regulations for derivative management and periodically report the results of those transactions to the Company.

34

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is not applied as of December 31, 2020 and 2019(1) Currency related
Millions of yen
2020
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss

Russian ruble¥2,546

¥—

¥ 58

¥ 58

Colombian peso

2,269

—

5

5

Canadian $

1,226

—

1

1

83

—

(0)

(0)

U.S.$

1,865

—

(44)

(44)

Other

129

—

1

1

¥8,119

¥—

¥ 21

¥ 21

Currency options: (Note 1)
Foreign currency forward contracts: (Note 2)
Selling

Other
BuyingTotal

Note: The fair values of foreign currency forward contracts are measured using the forward quotation.

Millions of yen
2019
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss¥ 1,067¥—¥ (24)¥ (24)

315

—

(5)

(5)

Russian ruble

3,272

—

(21)

(21)

U.S.$

3,172

—

3

3

Colombian peso

1,512

—

(18)

(18)

Canadian $

1,322

—

(14)

(14)

550

—

(2)

(2)

1,829

—

(27)

(27)

Currency options: (Note 1)(Payment in Australian $ andreceipt in U.S.$)
Other
Foreign currency forward contracts: (Note 2)
Selling

Other
Buying
U.S.$
Other
Total

779

—

1

1

¥13,817¥—¥(106)¥(106)

Notes: 1. The fair values of currency swap contracts are measured using the quoted price obtained from financial institutions.
2. The fair values of foreign currency forward contracts are measured using the forward quotation.

35

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is applied as of December 31, 2020 and 2019(1) Currency related
Millions of yen
2020
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥62,891¥—¥3,668

65

—

(0)

1,328

—

¥64,284¥—

Foreign currency forward contracts: (Note 1)
BuyingEuro
OtherForecasttransaction
and Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
SellingU.S.$

Accounts
receivable—tradeTotal¥3,668Notes: 1. The fair values of foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts appropriated to specific debts and credits are settled together with either accounts receivable–trade or accounts
payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflected in accounts
receivable–trade or accounts payable–trade.

Millions of yen
2019
Contract/notionalamount due after
one year

Fair value

359

¥—

¥ (1)

168

—

(2)

23,553

—

994

92

—

0

Accounts
receivable—trade

2,593

—

275

—

Loans payable

10,871Hedged item

Contract/notionalamountForeign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction¥

BuyingEuro
OtherForecasttransaction
and Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other
Currency swaps: (Notes 1 and 3)(Payment in Japanese yen and receipt
in U.S.$)
Total¥37,909¥—¥991

Notes: 1. The fair values of foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts appropriated to specific debts and credits are settled together with either accounts receivable–trade or accounts
payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflected in accounts
receivable–trade or accounts payable–trade.
3. Currency swaps appropriated to specific credits are settled together with loans payable subject to hedged transaction. Accordingly,
the fair values of such currency swaps are reflected in loans payable.

36

Notes to the Consolidated Financial Statements(2) Interest related
Millions of yen
2020
Hedged item

Interest rate swaps: (Note 1)(Fixed rate payment, floating rate receipt)(Note 2)Loans payable

Total

Contract/notionalamountContract/notionalamount due after
one year¥ 2,579
65,470¥ 2,579
65,470¥(101)¥68,049¥68,049¥(101)

Fair value

Notes: 1. The fair values of interest rate swaps are measured using the quoted price obtained from financial institutions.
2. If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payablesubject to hedged transaction. Accordingly, the fair values of such interest rate swaps are reflected in loans payable.

Millions of yen
2019
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year¥66,306¥66,306¥66,306¥66,306

Fair value¥—¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair values of such interest rate swaps are reflected in loans payable.

(3) Commodity related
Millions of yen
2020
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥89

¥—

¥(2)

¥89

¥—

¥(2)

Note: The fair values of commodity swaps are measured using the quoted price obtained from the exchange.

Millions of yen
2019
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥42

¥—

¥(6)

¥42

¥—

¥(6)

2020

Millions of yen
2019

¥560

¥583

¥560

¥583

Note: The fair values of commodity swaps are measured using the quoted price obtained from the exchange.

Note 22:
Commitments
and Contingent
Liabilities

Contingent liabilities as of December 31, 2020 and 2019, are as follows:

Liabilities for guarantee and otherTotal

In the opinion of management, the eventual settlement of pending lawsuits in which any of the companies
in the Group is the defendant will not have a material effect on the consolidated financial position or consolidated results of operations of the Group.

37

Notes to the Consolidated Financial Statements

Note 23:
Other
Comprehensive
IncomeEach component of other comprehensive income and related tax effects (including those on non-controllinginterests) for the fiscal years ended December 31, 2020 and 2019, comprises the following:
2020

Millions of yen
2019

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)¥ 1,706

¥

564

(0)

(73)

1,706

491

Income tax effect

(531)

(164)

Total

1,175

327

2,566

1,008

14

(42)

Amount before income tax effect

Deferred gains or losses on hedges:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)
Amount before income tax effect

2,580

966

Income tax effect

(795)

(297)

Total

1,785

669

(9,827)(4,394)——Foreign currency translation adjustment:
Adjustments arising during the year
Reclassification adjustments to profit (loss)
Amount before income tax effect(9,827)(4,394)

Total(9,827)(4,394)

13,504

8,892

Remeasurements of defined benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit (loss)

2,005

1,868

Amount before income tax effect

15,51010,760

Income tax effect(4,821)(3,491)

Total

10,689

7,269

Gains (losses) arising during the year159

(1,298)

Reclassification adjustments to profit (loss)

(1)

554

Share of other comprehensive income of associates accounted for using
equity method:

Total
Total other comprehensive income

158

(744)

¥ 3,980¥ 3,127

Note 24:Subsequent
EventsDividends
At the Company’s annual general meeting of shareholders held on March 30, 2021, the shareholders approved
the following appropriations of retained earnings:
Millions of yen

Cash dividends, ¥50.00 per share
Total¥4,739¥4,739Note: The total amount of dividends resolved at the annual general meeting of shareholders held on March 30, 2021, includes dividends of¥7 million for the Company’s shares held by the Board Benefit Trust (BBT).

38

Notes to the Consolidated Financial Statements

Note 25:
Segment
Information(1) Segment information
Description of reportable segments
The reportable segments of the Group are components for which discrete financial information is available andwhose operating results are regularly reviewed by the board of directors to evaluate their performance and determine the allocation of management resources.
The Group has six product divisions, namely “Printing Materials,” “Packaging Materials,” “Color Materials,”“Display Materials,” “Performance Materials” and “Composite Materials,” and each product division conducts
its business.
The product divisions are aggregated into three reportable segments, namely “Packaging & Graphic,”“Color & Display” and “Functional Products,” based on the similarity of the products and services.
“Packaging & Graphic” mainly consists of gravure inks, flexo inks, offset inks, news inks, jet inks and polystyrene. “Color & Display” mainly consists of organic pigments, liquid crystal materials and health foods. “Functional Products” mainly consists of synthetic resins, such as acrylic, polyurethane, epoxy resins, PPS compounds
and industrial adhesive tapes.
Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2 “Summary of
Significant Accounting Policies.”
Segment profits are based on operating income.
Intersegment sales are mainly based on market price or cost of goods manufactured.
Information about sales, profit (loss), assets, liabilities and other items
Millions of yen
2020
Reportable Segments
Functional
Products
Total

Packaging &Graphic

Color &
Display¥388,423¥ 79,404¥232,979¥700,806

26,3983,014

29,413

105,803

235,993730,218

OthersTotal

417¥701,223—

29,413417

730,636

Sales:
Sales to customers
Intersegment sales
Total sales

388,423¥

Segment profit

21,766

8,443

17,10347,312427

47,739Segment assets¥356,273¥ 87,727¥331,773¥775,773¥35,800¥811,573

12,4304,515

14,116

31,060521

31,581Others:Depreciation and amortization
Amortization of goodwill

33

—

110

143

—

143

Investments in affiliates

5,505

678

35,251

41,434—

41,434

Increase in property, plant andequipment and intangible assets

14,0393,229

15,54232,810235

33,045

39

Notes to the Consolidated Financial Statements

Millions of yen
2019
Packaging &Graphic

Color &
Display¥416,377¥ 86,500

Reportable Segments
Functional
Products
Total

OthersTotal

443¥768,568

Sales:
Sales to customers
Intersegment sales¥265,248¥768,125¥—

29,912

3,342

33,253—33,253

Total sales

416,377

116,411

268,590

801,378443

801,821

Segment profit

19,178

10,784

19,23449,196443

49,629Segment assets¥358,108¥ 93,475¥320,720¥772,303¥31,367¥803,670

Others:12,9105,099

13,51531,524552

32,076

Amortization of goodwill

Depreciation and amortization

21

—

78

99

—

99

Investments in affiliates

5,379

652

35,16941,2003,958

45,158

Increase in property, plant andequipment and intangible assets

12,384

5,840

15,34533,569413

33,982

Reconciliation between reportable segment total and amounts disclosed in consolidated financial
statements
2020

Millions of yen
2019¥730,218¥801,378

Sales:
Reportable segment total
Sales in “Others”

417

443

Elimination of intersegment transactions(29,413)(33,253)

Sales in consolidated financial statements¥701,223¥768,568

2020

Millions of yen
2019¥47,312¥49,196

427

433

Profit:Reportable segment total
Profit in “Others”
Corporate expenses(8,076)(8,297)

Operating income in consolidated financial statements¥39,663¥41,332

Note: Corporate expenses consist substantially of R&D expenses incurred by the DIC Central Research Laboratories to develop new products,
which are not included in any reportable segment.

2020

Millions of yen
2019¥775,773¥772,303

Assets:Reportable segment total
Assets in “Others”

35,80031,367

Elimination between segments(48,404)(45,235)

Corporate assets
Assets in consolidated financial statements

54,78144,648¥817,950¥803,083

Note: Corporate assets consist of deferred tax assets and assets of the DIC Central Research Laboratories and Kawamura Memorial DIC Museumof Art, which are not included in any reportable segment.

40

Notes to the Consolidated Financial Statements

Other items are as follows:
Millions of yen
2019

2020
Reportable
Segments

Others Adjustments Consolidated

Reportable
Segments

Others Adjustments Consolidated¥31,060

¥521

¥999

¥31,524¥ 552¥1,051

Amortization of goodwill

143

—

—

143

99

—

—

99

Investments in affiliates

41,434——

41,434

41,2003,958—

45,158

Increase in property,
plant and equipment andintangible assets

32,810235

954

33,99933,569413

980

34,962

Depreciation and amortization¥32,581¥33,127

Notes: 1. The adjustments for depreciation and amortization are mainly depreciation and amortization related to the DIC Central ResearchLaboratories that cannot be allocated to any reportable segment.
2. The adjustments for increase in property, plant and equipment and intangible assets are mainly capital investments of the DIC
Central Research Laboratories that cannot be allocated to any reportable segment.

(2) Related information
Information about geographical areas

Japan

USA

OthersMillions of yen
2020
Total

Net sales (Note)¥247,062¥90,996¥363,164¥701,223

Property, plant and equipment

124,247

24,94078,892228,078

Note: Net sales is based on customer location and is classified by country.

Japan

USA

OthersMillions of yen
2019
Total

Net sales (Note)¥280,147¥96,654¥391,767¥768,568

Property, plant and equipment

125,932

28,68577,559232,176

Note: Net sales is based on customer location and is classified by country.

Information about major customers
Not applicable for the fiscal years ended December 31, 2020 and 2019, because there is no single customer
which accounts for more than 10% of net sales shown on the consolidated statement of income.
(3) Impairment loss of assets by reportable segment
Millions of yen
2020

Impairment loss

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated

¥479

¥383

¥389

¥—

¥—

¥1,251Millions of yen
2019

Impairment loss

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated¥2,388

¥690

¥—

¥—

¥—

¥3,078(4) Amortization and unamortized balances of goodwill by reportable segment
Millions of yen
2020
Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated

Amortization

¥ 33

¥—

¥110

¥—

¥—

¥143

Unamortized balances

229

—

590

—

—

819

41

Notes to the Consolidated Financial Statements

Millions of yen
2019
Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated

¥21

¥—

¥ 78

¥—

¥—

¥ 99

7

—

755

—

—

762

Amortization
Unamortized balances(5) Gain on bargain purchase by reportable segment
There was no gain on bargain purchase for the fiscal year ended December 31, 2019.
Millions of yen
2020

Gain on bargain purchase

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated¥1,295

¥—

¥—

¥—

¥—

¥1,295

Note: Gain on bargain purchase comes from the acquisition of a subsidiary.

Note 26:
Related-Party
Transactions(1) Related-party transactions with the Company
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2020 and 2019, are as follows:
Millions of yen
2020
Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Rental ofbuildings andothers (Note 4)

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

413 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

182

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

43 Tradenotes andaccounts
receivable

15

Purchase of raw
materials andothers (Note 7)

6,300 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

1,245

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

3,375 Accounts
receivable–
trade andaccounts
receivable–
other

1,380

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

2,217 Security
deposit

1,832

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

42

Notes to the Consolidated Financial Statements

Millions of yen
2019Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Rental ofbuildings andothers (Note 4)

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)459 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

192

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

67 Tradenotes andaccounts
receivable

16

Purchase of raw
materials andothers (Note 7)

6,936 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

1,720

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

3,803 Accounts
receivable–
trade andaccounts
receivable–
other

1,480

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

2,232 Security
deposit

1,832

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

43

Notes to the Consolidated Financial Statements(2) Related-party transactions with the consolidated subsidiaries
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2020 and 2019, are as follows:
Millions of yen
2020
Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Rental ofbuildings andothers (Note 4)

16 Security
deposit7

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)728 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

290

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

56 Tradenotes andaccounts
receivable

25

Purchase of raw
materials andothers (Note 7)

1,168 Electronicallyrecordedobligations,accounts
payable–trade,
accounts
payable–other, andadvancepayments to
suppliers

256

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

535 Accounts
receivable–
trade andaccounts
receivable–
other

173

Purchase of raw
materials andothers (Note 7)

229 Accounts
payable–trade

19

NissinTradingCo., Ltd.

SHANGHAINISSINTRADING
CO., LTD.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Shang- US$200 Sale, importand export ofhai, PRC
petrochemicalrelated products——

Purchaseof rawmaterials
and others

Purchaseof rawmaterials

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
SHANGHAI NISSIN TRADING CO., LTD. is fully owned by Nissin Trading Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

44

Notes to the Consolidated Financial Statements

Millions of yen
2019Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Rental ofbuildings andothers (Note 4)

15 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)790 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

333

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

59 Tradenotes andaccounts
receivable

25

Purchase of raw
materials andothers (Note 7)

1,381 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

238

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

638 Accounts
receivable–
trade andaccounts
receivable–
other

223

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

45

Management’s Report on Internal Control

1. Basic framework for internal control over financial reporting
Kaoru Ino, Representative Director, President and CEO, and Shuji Furuta, Director, Executive Officer, Head of Financeand Accounting Unit and CFO of DIC Corporation (the “Company”), are responsible for designing and operating internal control over the Company’s financial reporting and have designed and operated internal control over financial
reporting in accordance with the basic framework for internal control set forth in “On the Revision of the Standards
and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting(Council Opinions),” issued by the Business Accounting Council of the Financial Services Agency of Japan.
Internal control aims to achieve its objectives to a reasonable extent with the organized and integrated function of basic individual elements of internal control as a whole. Accordingly, due to the inherent limitations, there is a possibility
that misstatements may not be completely prevented or detected by internal controls over financial reporting.
2. Scope of assessment, the basis date of assessment and assessment procedures
The assessment of internal control over financial reporting for fiscal year 2020 was conducted as of December 31,
2020, which is the end of this fiscal year. The assessment was performed in accordance with relevant assessment standards generally accepted in Japan for internal control over financial reporting.
In conducting this assessment, we began by evaluating internal control which may have a material impact on overall
consolidated financial reporting (“company-level controls”) and, based on the results of this assessment, business processes to be assessed were selected. We then analyzed these selected business processes to identify key controls therein that may have a material impact on the reliability of the Company’s financial reporting, after which we examinedthe design and operation of these controls. These procedures thus allowed us to accurately evaluate the effectivenessof the Company’s internal control.
We determined the required scope of assessment of internal control over financial reporting for the Company and its
consolidated subsidiaries and equity-method affiliates from the perspective of materiality or the degree to which it may
affect the reliability of financial reporting. Materiality of the impact which may affect the reliability of financial reporting is determined based on potential quantitative and qualitative impact on financial reporting. In light of the resultsof assessment of company-level controls, we reasonably determined the scope of assessment of process-level controls.
Consolidated subsidiaries and equity-method affiliates which were concluded as immaterial taking into account thedegree of quantitative and qualitative impact are not included in the scope for assessment of company-level controls.
With regard to the process-level controls, significant locations and business units to be tested were selected based on
the changes in the scope of consolidation during the year, as well as on net sales for the previous year, with locations
and business units the combined sales volume of which reached approximately two-thirds of consolidated net sales being defined as “significant.” The scope of assessment at these locations and business units encompassed business processes relevant to net sales, accounts receivable-trade, accounts payable-trade, inventories and manufacturing facilities
included in property, plant and equipment as significant accounts that may have a material impact on the business objectives of the Company. In addition, business processes relating to (i) greater likelihood of material misstatements, and/or (ii) significant accounts involving estimates and management’s judgment, were also identified as business processes
having greater materiality, taking into account their impact on financial reporting, and were included in the scope.
3. Results of the assessment
Based on the results of the assessment, we concluded that as of the end of the fiscal year ended December 31, 2020,
the Company’s internal control over financial reporting was effectively maintained.

Kaoru Ino
Representative Director, President and CEO
DIC Corporation

46

Independent Auditor’s Report

47

Independent Auditor’s Report

48

Independent Auditor’s Report

49

Independent Auditor’s Report

50

Investor Information and Corporate Data
(As of December 31, 2020)

Investor Information
Common Stock

Corporate Data
DIC common stock is listed and traded on the Tokyo
Stock Exchange. There were 41,443 shareholdersof record on December 31, 2020. On the Tokyo Stock
Exchange, the high and low prices for each quarter ofthe years 2020 and 2019 were as follows:

Jan.–Mar.
Apr.–Jun.
Jul.–Sept.
Oct.–Dec.

2020
High
Low

2019
High
Low

¥3,130 ¥1,833
2,936
2,170
2,798
2,456
2,722
2,520

¥3,635 ¥3,170
3,545
2,587
3,130
2,534
3,290
2,894

Independent Public Accountants

100 shares¥96,557 million (95,156,904 shares)
Deloitte Touche Tohmatsu LLC

Distribution of Shareholders

Japanese financial institutions

Paid-in Capital

42.6%

23.4%

Financial instruments business operators: 2.8%

Corporate Headquarters
DIC Building, 7-20,
Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3000
https://www.dic-global.com/en/
Principal Domestic Offices, Plants
and Laboratories (Nonconsolidated)

Number of Employees

Other
ForeignJapanese
corporations
corporations
16.7%

35-58, Sakashita 3-chome, Itabashi-ku,
Tokyo 174-8520, Japan

Number of Branch Offices: 2
Number of Plants:
9
Number of Laboratories:
1

Total Number of Shares Authorized 150,000,000 shares
Number of Unit Shares

Registered Address

Japanese
individual
investors
and others
14.1%

Treasury stock: 0.4%

20,242
Date of Foundation
February 15, 1908
Date of Incorporation
March 15, 1937

Number of
Shares Owned Percentage(Thousands)of Total

Major Shareholders

Transfer Agent

Meeting of Shareholders
For Further Information, Contact:

SHOEI INC.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd.
(Trust Account)
The Dai-ichi Life Insurance Company,
LimitedJP MORGAN CHASE BANK 385632
Custody Bank of Japan, Ltd.
(Trust Account 4)
Custody Bank of Japan, Ltd.
(Trust Account 7)
Aioi Nissay Dowa Insurance Co., Ltd.
NIPPON LIFE INSURANCE COMPANY
JP MORGAN CHASE BANK 380072

12,694 13.39%
8,348

8.81

5,799

6.12

3,500
3,267

3.69
3.45

2,441

2.58

2,031 2.14
2,020 2.13
1,900 2.00
1,705 1.80
43,709 46.11%

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
100-8212, Japan
Our annual meeting of shareholders is held in March.
Corporate Communications Dept.
DIC Corporation
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3033
E-mail: prir@ma.dic.co.jp

（Contact）

Corporate Communications Dept.
Sustainability Dept.
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8233, Japan
Tel: +81-3 - 6733 - 3034

Fax: +81-3 - 6733 - 3038

https://www.dic-global.com/en/

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