IHI

Sustainability
Data Book
2020

Basic Information

IHI
Sustainability
Data Book
2020

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

CONTENTS
Editorial Policy............................................................................................... 2
Basic Information......................................................................................... 3
Sustainability Management
IHI Group Material Issues.......................................................................... 8
Sustainability Management....................................................................... 10
Sustainable Development Goals (SDGs) Initiatives................................. 13
Innovation Management............................................................................ 14

Principled Corporate Management
Corporate Governance............................................................................... 17
Compliance.................................................................................................. 25
Quality Compliance..................................................................................... 30
Risk Management....................................................................................... 32
Information Security................................................................................... 35

Materialize an Affluent Society
Human Rights.............................................................................................. 38
Customer Relationship Management....................................................... 40
Managing Human Resources.................................................................... 41
Diversity and Inclusion............................................................................... 43
Diversity and Inclusion (Human Resource Development)...................... 48
Labor Practice (Occupational Health and Safety).................................... 50
Supply Chain Management........................................................................ 55
Corporate Citizenship................................................................................. 58

Reduce Environmental Impact
Environmental Management..................................................................... 62
Reduction of the Environmental Impact of Products and Services...... 65
Climate Change........................................................................................... 67
Circular Economy........................................................................................ 72
Environmental Protection........................................................................... 74

Performance Objectives............................................................................ 76

Performance
Objectives001

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Editorial Policy
The IHI Sustainability Data Book 2020 is a comprehensive
annual report to share information such as oursustainability policies, approaches, frameworks, andperformance.
The IHI Sustainability website provides the most up todate information about our sustainability.

• Scope of Data Book

Main Sustainability Disclosure
The IHI Group responds to the requests of stakeholders and discloses information through several avenues.
Main Topics

Latest Information

Society and theEnvironment

IHI Corporation and its consolidated subsidiaries(However, the report includes some non-consolidated
information about IHI Corporation as well as details witha more specific scope.)• Reporting Period

Annual Report

Sustainability
Websitehttps://www.ihi.co.jp/csr/english/

Sustainability
Data Book

EconomyFY2019 (April 1, 2019 to March 31, 2020)
However, the report includes some information frombefore fiscal 2018 and forecasts of fiscal 2020 and later.

Integrated
Report• Annual Securities
Report• Corporate
Governance
Report• Publication Date

Investor Relations
Websitehttps://www.ihi.co.jp/en/ir/

September 2020
(The previous Sustainability Data Book was published in
September 2019, and the next Sustainability Data Book
will be tentatively set for release in 2021.)• Reference Guidelines• Scope of Data

• Disclaimer

Global Reporting Initiative (GRI) Sustainably ReportingStandards
Sustainability Accounting Standards Board (SASB)
Environmental Reporting Guidelines (2018), Ministry of
the Environment
Task force on Climate-related Financial Disclosures(TCFD)The scope of data covered in this report is as follows:
Principled Corporate Management and Materialize an
Affluent Society includes specific non-consolidated data
for each topic.
Reduce Environmental Impact: IHI Corporation and its
consolidated subsidiaries (However, some data have amore specific scope.)

The IHI Sustainability Data Book 2020 not only contains
facts about the past and present but also business plans
and forecasts as well as management plans and policies
in place at the time of publication. The projections are
assumptions and decisions made based on information
available at that time of publication. These forecasts,
plans and policies are subject to change as the results offuture business activities and circumstances change. The
reader should consider the factors above when reviewing
the information in this report.

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Basic Information
Information
Basic

Sustainability
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Basic Information
About IHI
Company NameIHI Corporation

Head Office

Toyosu IHI Building, 1-1, Toyosu 3-chome, Koto-ku,
Tokyo 135-8710, Japan

President

Hiroshi Ide, COO

Year of establishment

December 5, 1853

Capital107.1 billion yen

Net sales (Non-Consolidated)

620.2 billion JPY (Fiscal year 2019 ended March 31, 2020)

Net Sales (Consolidated)

1,386.5 billion JPY (Fiscal year 2019 ended March 31, 2020)

Employees (Non-consolidated)

7,741 (as of March 31, 2020)

Employees (Consolidated)

28,964 (as of March 31, 2020)

Works

6

Branches in Japan

8

Overseas Representative Offices

14Group Companies

Affiliated Companies in Japan
65 (47 Subsidiary companies and 18 affiliated companies)
Overseas Affiliates
151 (128 affiliated companies and 23 associated companies)

web

Business

web

Global Expansion

Principled Corporate
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Basic Information
Management Philosophy and Group Vision

Group Management Policies 2019

The IHI Group first and foremost acts as a good corporate
citizen that grows together with society. Our Group
Vision strives to fulfill our duty to society according to
two management philosophies.

The IHI Group launched the Group Management Policies
2019 in April 2019 as mid-term management policies.
The Group Management Policies 2019 aim to contributeto social sustainability from a long-term perspective as athree-year plan which will fully transform our Group into
an enterprise that creates new value by tackling customer
challenges and social issues.

Long-Term Approach Under Group Management Policies 2019
Tackle social and customer issues with customers and create new value

Management Philosophy

Enhance corporate
value“Contribute to the development ofsociety through technology”“Human resources are our single mostvaluable asset”

Contribute to social sustainability

Enhance customer value

The IHI Group seeks to solve the various
environmental, industrial, social, andenergy related problems of the 21st century,
through using engineering expertise
to focus on “Monozukuri” technology.
In striving towards these goals, IHI is
becoming a global enterprise offering thesafety and security for the benefit of boththe environment and humanity.
“Monozukuri” Technology means
the technology used to improve thecompetitiveness of products and services
offered, by strengthening the capabilities
required in development, design, supply,
manufacture and construction.

Earnings growth

IHI Group Vision

Contribute to society,primarily by supplying
hardwareGrowingsocialissues
2016

2013
2007

2010

Business scale growth

Further evolve initiatives of Group Management Policies 2016
to address increasing social issues

Group Management Policies 2016
Strengthen earnings foundations
Three transformative initiatives
Concentration and selection through new portfolio management
Boost profitability by reinforcing the project implementation structure
Employ common Group functions to transform business model

Initiatives Under Three Years of Group Management Policies 2019
Review of Group Management Policies 2016
Transformed hardware supply-centric businesses too slowly
Downturns persisted in certain projects
Continued to progress with concentration and selection

Business climate change
Accelerate technological innovations
Overall demand for infrastructure to materialize social
sustainabilityGroup Management Policies 2019
Reform businesses in earnest to tackle social and customer issues
Three initiatives
Strengthen businessfoundations

Accelerate aftermarket business developmentwith customers from lifecycle perspectives

Build a robust
operational structure

Create a lean andflexible operational structure

Accelerate preparations
for tomorrow

Transform our business model to create value

Cultivate human resources
as change drivers
Safety and quality

Risk management004Basic Information
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Basic Information
Basic Code of Conduct for the IHI GroupThe IHI Group knows living up to stakeholder expectations and earning their trust is vital to drive the sustainable growth of both customers and society.
The Basic Code of Conduct for the IHI Group defines the practices necessary to embody this belief.
Basic Code of Conduct for the IHI GroupWe at the IHI Group are committed to implementing
what is necessary to meet the expectations and gain
the trust of not only our customers, business partners,
shareholders and colleagues, but also the local andinternational communities, while maintaining an awarenessof global issues. By doing so, we aim to enhance ourexistential value as we move forward into the future andrealize our Group's management philosophies of “Contributeto the development of society through technology” and“Human resources are our single most valuable asset.”

Fundamental and Universal Principles of the
Entire IHI Group

Respect for the rule of law and ethical conduct
We strictly observe laws and ordinances based on a clear
understanding of their meaning. We also act sincerely andfairly and in accordance with high ethical standards so that we
do not violate social rules or international norms.

Respecting human rights
We fully recognize the importance of, and always strive torespect, human rights during our business activities.

Promotion of mutual understanding
In order to promote mutual understanding with those aroundus, we strive to disseminate information on our businessactivities, explain the effects of these activities on thesurrounding environment, and engage in an exchange of
opinions with our broader communities on a daily basis.

Responsibilities toward People, Society, and theEnvironment

Responsibilities toward people connected with the
IHI Group via our products and services❶ We establish relationships of mutual trust with the people

with whom we are involved in the course of our business,help solve social issues in a variety of fields by using ourabilities to the utmost, and develop and provide products
and services to assure more comfortable lives for people
around the world.
❷ We pay full attention to the safety of the products andservices we develop and provide and constantly strive
to raise the quality level of our products and services byconfirming whether they satisfy customers and users.
❸ We deal appropriately with other parties in our business
transactions and seek profit fairly, while at the sametime we strive to establish fair and mutually-productive
relationships with our customers and business partners.

Responsibilities toward those with whom wework
We strive to respect mutually the character and individualityof all people with whom we work and maintain a safe,
supportive, and comfortable environment in which we canwork easily.

Responsibilities toward local and international
communities❶ With an awareness that each one of us is a member ofsociety, we actively take part in initiatives to solve theproblems faced by society.
❷ No matter the region of the world where we conduct ourbusiness, we understand the value of the culture uniqueto each region and strive to meet the expectations of people
living there.
❸ We take a resolute attitude against organizations and forcesthat threaten social order and safety.

Responsibilities toward the global environment
Based on our recognition that the global environment provides
the foundation for the existence of all societies and cultures,
we take care so as not harm that which also will be needed by
future generations and strive to protect, and reduce theburdens on, the global environment, not only in the course of
our provision of products and services but also in all otheraspects of our business activities.

Roles and Responsibilities of Senior Management

Roles of Senior Management❶ Senior Management recognizes that their role is to ensure
the realization of this Code of Conduct and takes theinitiative to demonstrate leadership in order to put the
purposes of this Code of Conduct into practice.
❷ Senior Management ensures that this Code of Conduct isknown to all people with whom they work and constantly
strives to establish, maintain, and improve effective internal
systems and to enhance our corporate value.

Responsibilities of Senior Management
If a violation of this Code of Conduct occurs, Senior
Management will strive to take the initiative to solve theproblem, discover its cause, and prevent the recurrence ofsimilar violations. They also will promptly disclose accurate
information to society, clarify the responsibilities and scope of
the authority of the persons involved, and impartially takedisciplinary action even upon themselves.

IHI Group Code of Action
In order to comply with this Code of Conduct, we establish“IHI Group Code of Action” as the code prescribing how
directors, officers and employees of the IHI Group shouldmake decision and take action in their daily work.
P.25

IHI Group Code of Action

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Third-party Evaluation
S&P/JPX Carbon Efficient Index

Health & Productivity Companies 2020 (White 500)

The S&P/JPX Carbon Efficient Index selected the IHI
Group as a brand satisfying environmental information
disclosure and carbon efficiency (carbon emissions perunit of revenue) standards according to their constituent
selection and weighting process.

The Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi (Japan Health Council) launched theWhite 500 program to recognize excellence in employee
health management from a corporate management
standpoint. The White 500 program recognized ten IHI
Group companies as Health & Productivity Companies in
2020: IHI Corporation, IHI Scube, IHI Plant Services
Corporation, IHI Power Systems, IHI Jet Service, NICO
Precision, IHI Infrastructure Systems, IHI Aerospace, IHI
Castings, and IHI Finance Support.

CDP
Disclosure Insight Action (CDP) is a non-profit charity
established by responsible investors worldwide. The CDP
sends an annual questionnaire to companies and local
governments and releases the results in an effort toencourage more action on climate change.
The IHI Group responds to this questionnaire every year. In
2019, the CDP evaluated our Group with a B: Management
Level score.
Kurumin Certification
The Minister of Health, Labour and Welfare recognized
the IHI Corporation as a company that supports childraising and granted us the Kurumin certification.

Eruboshi Certification
The Minister of Health, Labour and Welfare certified the
IHI Corporation as an Eruboshi Company (2nd level) for
excellence in efforts to promote the participation andadvancement of women in the workplace.

Resilience Certification

DISCLOSURE INSIGHT ACTION

The IHI Group renewed the Resilience Certificationacquired in 2016 with the aim of improving its business
continuity as a company that supports social infrastructure.
Resilience Certification is a certification system of the
Association for Resilience Japan based on the guidelines
for the certification of organizations contributing to national
resilience. This certification certifies business operatorsthat endorse the ideas of strengthening national resiliencepublished by the Cabinet Secretariat's National Resilience
Promotion Office and proactively work to ensure theirbusiness continuity.
PRIDE Index Gold Award 2019
work with Pride (wwP) awarded the IHI Corporation the
PRIDE Index 2019 Gold Award, its highest honor, for thesecond consecutive year since 2018.
wwP is a private organization in Japan that advocatesand helps establish LGBT diversity management
practices. The goal of the PRIDE Index is to help build
working environments friendly to LGBT and othergender minorities. This index evaluates company
initiatives via categories for the code of conduct, genderminority communities, enlightenment programs,
personnel policies and programs, social contributions
and public relation practices.
wwP recognized the IHI Corporation for the second
consecutive year because of its human resource policies
for LGBT, launch of a consultation desk, expansion of anally program, and training to promote greater
understanding about gender minorities.

ReduceEnvironmental Impact

Performance
Objectives

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Sustainability Management
IHI Group Material Issues

008

Sustainability Management010

Sustainable Development Goals (SDGs) Initiatives

013

Innovation Management

014

007

Basic Information

Sustainability
Sustainability
Management
Management

IHI Group Material Issues
Approach• Identifying Material Issues
The IHI Group defined the Group Management Policy
2019 for the purpose of contributing to sustainable
society from a long-term perspective. We have identified
two material issues in these policies: pursuing material
issues as the foundation of business operations andpursuing material issues through business operations.

• Material Issues Identification Process
The IHI Group identifies material issues through thefollowing process in an effort to achieve a sustainable
society and sustainable Group growth.
Material Issues Identification Process
Step 1 Extract material issues
We meticulously extracted 51 issues fromthe guidelines on disclosure of non-financial
information such as the GRI Standards,
SDGs, and a variety of other resources.
Step 2 Assess relevance to our businesses
We aligned and refined issues based on
domestic challenges, various IHI Group
policies, and relevance to our businessactivities.
Step 3 Identify material issues
We categorized the issues refined in Step 2 into two
categories for consideration by the CSR Committee
led by the President as chairperson to identify IHI
Group material issues.
1. Pursuing material issues as the foundation of ourbusiness
2. Pursuing material issues through business activities

Principled Corporate
Management

Materialize an
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ReduceEnvironmental Impact

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Sustainability
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Management

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IHI Group Material Issues• Pursuing material issues as the foundation of
our business
The IHI Group divides 14 material issues into
environmental, social and governance categories as afoundation of our business. The IHI Sustainability Data
Book 2020 provides a breakdown of our activities toaddress each material issue.
Environment – Reduce Environmental Impact –

P.61

Climate change ��������������������������������������������������������P.67
Circular economy �����������������������������������������������������P.72
Environmental protection����������������������������������������� P.74
Society – Materialize an Affluent Society –The IHI Group set following nine issues and themes foreach issue to address though business. These themes
are updated as necessary as we strive to solve social
issues through our business activities.
web

Contributing to Solving Social Issues
Material Issues

P.16

Corporate governance ��������������������������������������������� P.17
Compliance ��������������������������������������������������������������P.25
Risk management ����������������������������������������������������P.32
Information security �������������������������������������������������P.35
Timely and proper disclosure ���������������������������P.12, P.40

Priority Activities

Climate change• Increase energy efficiency• Control and reduce consumption of fuels• Control and reduce greenhouse gas emissions, including CO2

Circular economy• Control and reduce consumption of natural resources

Environmental protection• Expand anti-pollution measures (seven types of pollution)• Prevent chemicals in products from being released into the atmosphere• Protect native species

Stable supply of energy and resources• Contribute to balancing of environmental consideration and stable energy
supply• Develop and utilize resources replacing fossil fuels and rare metals

Building and maintaining social
infrastructure• Renew and extend life of aged infrastructure• Disaster recovery support• Improve infrastructure of each country• Compact, functional urban development

Developing a mobility society• Optimize the mobility of people and materials

Strengthening and sophistication of“Monozukuri” (manufacturing andengineering)• Evolution of industrialization• Evolution of products and services• Utilization of IoT/ICT, AI

Utilization of aerospace• Efficient and reliable means of aerospace transportation• Utilization and application of acquired data

Securing safe and stable living• Alleviate safety and security issues

P.37

Human rights �����������������������������������������������������������P.38
Customer relationship management �����������������������P.40
Diversity and inclusion ���������������������������������������������P.43
Labor practice ����������������������������������������������������������P.50
Supply chain management ��������������������������������������P.55
Corporate citizenship �����������������������������������������������P.58
Governance – Principled Corporate Management –• Pursuing Material Issues Through Business009

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Objectives

Sustainability Management
Approach

Structure

The IHI Group defined our approach in the GroupManagement Policy 2019 that adapts to changes in thesocial environment from long-term perspectives. This
flexibility will contribute to a sustainable society. We will
also create new value by tackling social and customer
issues.

• Sustainability Promotion System• CSR Committee
The IHI Group established a CSR Committee led by the
President as chairperson and Officer in charge of CSR as
deputy chairperson with the presidents of business areasand corporate general managers serving as committee
members. The primary task of the Committee is to buildand operate a Sustainability Promotion System.
The CSR Committee convenes once a year for senior
management to discuss sustainability policies andmeasures based on social issues and stakeholder
expectations.
We share and promote specific policies and measures
put in place by the CSR Committee through a CSR
Liaison Group made up of managers from business areasand head office divisions.

Sustainability Promotion System
Board of Directors
Management Committee[Chairperson]
Chief Executive Ofﬁcer (CEO)CSR Committee
Business Areas

Head Ofﬁce Divisions

CSR Liaison Group(Oversees sustainability in each department)
Dialogue
Stakeholders
Chairperson

President

Deputy Chairperson Officer in charge of CSR

Members

Board directors, presidents ofbusiness areas, generalmanagers of headquarters,
general managers of head
office divisions, and generalmanagers of the head officenominated by the chairperson

Secretariat

Corporate Planning Division

Meetings convened
in 2019

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Sustainability Management
Initiatives• Dialogue with Stakeholders
The IHI Group deems customers, business partners,
shareholders, investors, government agencies, local
communities and employees with a large influence overongoing corporate activities as primary stakeholders. We
value and engage in a broad dialogue with thesestakeholders. The Integrated Report and Sustainability
Data Book act as tools for this dialogue. We report topics
thought particularly important to the Management
Committee and Board of Directors in order to reflect
these ideas in corporate strategy.

Results of Dialogue with Stakeholders
Stakeholders Main Purpose of Dialogue

Customers

Business
partners

Shareholders& investors• Contribute to solving social
issues and customer
challenges• Ensure product safety• Engage in fair and impartial
business dealings• Cultivate mutually beneficial
partnerships with ourbusiness partners• Disclose accurate
information in a timely
manner• Strengthen relationships
based on trust• Enhance corporate value

Governmentorganizations• Form partnerships withgovernment organizations

Local
communities• Recognize ourselves as amember of society• Contribute to solving social
issuesEmployees• Recruit and develop humanresources as the most vitalmanagement asset

Example of 2019 Engagement

Frequency•

Conduct customer satisfaction
surveys

As necessary•

Television commercials, newspaper
advertisements, and IHI websites

As necessary•

Provide product safety information

As necessary•

Make requests of business partners
based on the IHI Group
Regularly
Procurement Policy

P.40

•

Commend outstanding suppliers

Once per year•

Convene the General Meeting of
Shareholders

Once per year•

Hold financial results briefings andtelephone conferences

Four times
per year•

Hold business area briefings

Once per year•

Attend one-on-one meetings

As necessary•

Offer plant tours for shareholders

Two times per
year•

Participate in policy boards

As necessary•

Participate in joint development andprojects with government
As necessaryorganizations•

Hold community events
Hold school visits

As necessary•

Conduct employee training

As necessary•

Conduct employee-awarenesssurveysOnce per year•

Operate a compliance hotline

Regularly•

Reference

Customer RelationshipManagement

P.55
Supply Chain
Management

web

IR

P.14

Innovation Management

P.58

Corporate Citizenship
P.41
Managing
Human Resources
P.48
Diversity andInclusion (Human
Resource Development)
P.25

Compliance011

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Sustainability Management• Approach to IR and SR Activities
The IHI Group builds stronger relationships based on trustwith all shareholders and other investors by recognizing
accurate, timely disclosure of corporate information to
stakeholders as a core principle of a sound financial
instruments market. This is why we actively engage in
Investor Relations (IR) and Shareholder Relations (SR).
Our basic policy is to promote highly transparent
management throughout the entire Group. We always
disclose accurate and fair information on importantmanagement and business matters in a timely mannerfrom the perspective of investors in capital markets. The
IHI Group also sees honest Group accountability as abasic policy to define its management direction and main
businesses.

• Timely and proper disclosure
The IHI Group enhances the scope of various materials
distributed online and offline for active and fair
informational disclosure.
We are deeply involved with investor relations worldwide
to bring greater understanding about IHI Group businessactivities.
In 2019, we built on previous efforts to cultivate
opportunities for direct communication between our
executive officers and all local institutional investors inNorth America, Europe and Asia.
The investors visited by our executive officers
commented on how these meetings effectively conveyed
the position, competitiveness and potential future growthof the IHI Group. Many were also grateful to President for
carefully answering all of their questions.

2019 Results
Targets

Analysts and domestic
institutional investors

Main Topics

Summary

Financial results briefings (second quarterand year-end results announcements)

Nearly 100 people attended each of our briefings
and telephone conferences this year. We provided
a financial results breakdown for the term andprogress reports on Group Management Policy
2019 and other business plans.

Telephone conferences (first quarter andthird quarter financial results
announcements)

Business area briefings

These briefings provided summaries about thebusiness area strategies in the GroupManagement Policy 2019 from each businessarea president.

Overseas institutional
investors

One-on-one meetings, one-on-one
interviews, conferences, etc.

These provide us with chance to talk directly witha total of roughly 170 corporate investors.

Individual shareholders

Offered plant tours for shareholders thatjoined the information delivery service

Offered plant tours at Soma Works and Yokohama
Works. We also distributed the IHI Integrated
Report 2019.

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Management

Sustainable Development Goals (SDGs) Initiatives
Approach
The United Nations adopted the Sustainable
Development Goals (SDGs) in 2015. The IHI Group sees
the success of the SDGs as an expectation of society.
We identify and incorporate each target of the SDGs inGroup management as material issues.

The Group Management Policy 2019 is our mid-term
management policy that began in 2019. These policiesalign the direction of each business area with the targetsof the SDGs so that we may contribute to the success of
the SDGs through our businesses in the hope of realizing
a sustainable society.

IHI Group Business Area Direction

Create new value needed for social sustainability
Resources, Energy &Environment

Social Infrastructure &Offshore Facilities

Contribute to carbon-free and recycling
societies by providing optimal integrated
solutions for each region and customer

Contribute globally and across lifecycles
to materialize safe and secure social
infrastructures, centered on bridges andtunnels

Shared business goals

Contribute to industrial infrastructure
progress by thoroughly optimizing
operational lifecycles with customers

Leverage advanced technology to open newvistas for air transportation, defense
systems, and space utilization, and help
materialize social affluence and safety

Industrial Systems &General-Purpose Machinery

Aero Engine, Space &Defenseweb

Contributing to Solving Social Issues

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Innovation Management
Technology & Intelligence Integration

Education/Awareness Building• Industry-University Initiatives

Approach

The IHI Group nurtures innovative minds by incorporating
design thinking, service design, art thinking, liberal arts,
foresight, and other new approaches through ourrelationships with various universities. These partnerships
enhance new value creation.
In particular, we hold workshops underpinned by the
products and challenges of the IHI Group and cooperatebroadly in tasks that include the existing product andtechnical publication designs. The IHI Group also works to
examine multiple scenarios that anticipate various
societal changes.

• Public-Private Sector Initiatives

The IHI Group creates new value with greater speed
through technology and intelligence integration centered
upon social issues and customer challenges. We
anticipate various societal changes to evolve ourtechnology so that we can universally respond to any
change. The IHI Group promotes open innovation to build
a new ecosystem that integrates technology andintelligence and provide solutions quickly.

Structure
The IHI Group runs the IHI Tsunagu Lab. (opened 2014),
i-Base in IHI Group Yokohama Labs; i-Base (opened2019), and the IHI Launch Pad (opened 2018) as bases
for open innovation. These three facilities nurture sharedinspiration and co-creation.
We also accelerate development and commercializationof technology through industry-university partnerships
worldwide. These partnerships differ from conventional
industry-university partnerships. We place emphasis on
incorporating and commercializing technology from a
medium- to long-term perspective. The IHI Group also
enters into business partnerships with governmentorganizations for large projects which may be difficult tocommercialize independently. These partnerships
diversify risk—especially capital risk—and shorten
turnaround.
We have been partnering with start-up companies as wellthrough venture capital investments in Silicon Valley since2014. The IHI Group encourages collaboration that aims
to create new value through technology attaché activities
at each of our bases in the United States, Europe,
Singapore, and China.

Initiatives• Initiatives with Partner Companies
The IHI Corporation ensures ongoing sustainable growthby participating in international collaborative projects
particularly in aero-engine business as our key business.
As a result, we have been able to secure a 60% to 65%
market share of the aero-engine market in Japan.

• Initiatives with Startup Companies
The IHI Corporation and IHI Logistics & Machinery
Corporation partnered with American-based startup
Boston Dynamics (formerly Kinema Systems) to takeadvantage of logistics recognition technologies that use
Artificial Intelligence (AI). We were able to develop andstart sales of a depalletizing system that requires no prior
image data registration or teaching. This system canflexibly adapt to changes in logistic needs to enhance
processing performance by 30%.

In Japan, the IHI Corporation entered into acomprehensive industry-university partnership agreementwith Yokohama National University. As a part of thispartnership, we opened a joint AI research course in
Research Center for Artificial Intelligence, Yokohama
National University.
Overseas, we entered into comprehensive partnershipagreements with Tsinghua University and Shanghai Jiao
Tong University. Together, we are steadily advancing
various research and development projects.

The IHI Corporation partnered with the Advanced
Remanufacturing and Technology Centre of the Singapore
Agency for Science, Technology and Research to develop
leading-edge manufacturing technology.
We have also participated in a variety of other researchendeavors through multiple projects from metallaminated molding technology (additive manufacturing)and surface treatments to robotics and machining
technology. Our joint development project for automatedmasking solution joint development project adapted andimproved Sankei Eagle products to IHI needs. The
transition from manual to automated operations reduced
the amount of materials used for masking by 50%.
Our energy business participated in the Callide OxyfuelProject to shift toward a low-carbon, recycle-oriented
society. This large-scale Japan-Australia public-private joint
project took place at Callide coal-fired thermal power
station in Australia. This was the world's first project toverify the operation of a CO2 liquefaction and capture unit
in a thermal plant through oxygen combustion and aconsistent CO2 capture process.

014Basic Information

Sustainability
Sustainability
Management
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Innovation Management

Intellectual Property

Education/Awareness Building

Results

Policies• Intellectual Property Education

Change in Owned Patents by Region(Unit: Patents; Scope: IHI)

(Unit: People; Scope: IHI)

Item

2016

2017

2018

2019

STEP 1(First-year employees)

374

290

168

167

STEP 2(Second-year employees)

318

351

271

154

STEP 3(Third-year employees)

296

291

314

246

STEP 4(Fourth-year employees)

251

284

270

281

STEP 5(Fifth-year employees)

230

217

269

249

Item

2016

2017

2018

2019

Domestic
patents

4,157

3,915

4,120

4,150

Total

2,744

2,598

3,047

3,502

UnitedStates

535

539

591

724

Europe

936

792

1,037

1,240

China

439

437

499

561

Korea

225

174

193

199

BRICs

126

116

137

142

Other

483

540

590

636

Overseas patents

Training Participants

Owned Patents

The IHI Group promotes intellectual property activities asboth management policy and technological strategy. We
have a diverse business environment made up of IHI
divisions and affiliate companies. Each has uniqueintellectual property needs. Our Intellectual Property
Department drafts a Basic Policy on IHI Group Intellectual
Property each year. Each division and affiliated company
refers to this policy when establishing their own
intellectual property policies tailored to their uniquebusiness, technology and development environment.
The Basic Policy on IHI Group Intellectual Property in2019 emphasized measures to acquire intellectual
property for portfolio success, leverage intellectual
property in business, quickly discover and reduce
intellectual property risks, and provide comprehensive
intellectual property education.

The IHI Group uses e-Learning to teach first- to fifth-year
employees about intellectual property. Each businessdivision and affiliated company also provides all-inclusive
training on intellectual property that includes patent
audits and rights acquisition policies, copyrights andtrademark naming.
In 2019, we held a lecture on intellectual property for theentire group by inviting a guest speaker to share theirexpertise, which heighten our awareness about
intellectual property.

Initiatives• Protecting Intellectual Property
The IHI Group makes a strict distinction between rights
acquisition through patent filings and the confidentialityof knowledge through concealing when protecting
intellectual property. The IHI Group files necessary patentapplications worldwide based on global businessexpansion. We carefully select countries to file patentapplications through the forecasts in business,
technology and development plans.
We also respect third-party intellectual property rights.
We research the patent filings of other companies as wellas patent acquisition trends to reduce any business risks.

015

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Principled Corporate
Management
Corporate Governance017

Compliance025

Quality Compliance030

Risk Management

032

Information Security

035

016

Basic Information

Sustainability
Management

Corporate GovernanceCorporate GovernanceWe strive to further corporate governance according to
the following basic policies.

Basic Views
Our corporate governance system improves management
efficiency as a way to fully leverage our uniquecapabilities and in turn ensure sustainable growth andmaximize corporate value. As a means to this end, we
have separated management supervision and businessexecution functions, which heightens the efficiency andaptness of internal decision-making and lays a foundation
to draft and put internal rules into practice. This approachensures proper business conduct throughout the entire
Group.
IHI consistently enhances corporate governance to earn
long-standing trust and support from all or ourshareholders and other stakeholders.

(1) R espect shareholder rights and ensure equal
treatment.
(2) Strive to maintain proper working relationships
with shareholders and other stakeholders.
(3) P roactively disclose accurate corporate
information, ensure transparency, and remain
accountable to our stakeholders.
(4) C larify the roles and responsibilities of theBoard of Directors and Audit & Supervisory
Board to enable members to fulfill
management, audit, and supervisory
functions.
(5) E ngage in constructive dialogue withshareholders whose investment policy aligns
with medium- to long-term shareholderinterests.

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

017

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Governance
Structure

Delegation

Accounting
Auditors

The IHI Corporation has adopted an executive officer
system to strengthen decision-making and supervisory
functions of the Board of Directors, as well as improve
efficiency of business execution. The Company appoints
executive officers by resolution of the Board of Directors.
The Chief Operating Officer (COO) serves under the
Chief Executive Officer (CEO) to direct and supervise theduties of executive officers. The executive officers follow
the directions from the Chief Operating Officer to
execute their assigned duties. The CEO also appoints
members to the Management Committee to assist indecision-making and business execution.

Delegation

Audit & Supervisory Board(Audit & Supervisory
Board Members)• Executive Officer System

Management Monitoring/
Supervisory Functions

Delegation

General Meeting of Shareholders

The IHI Corporation has established an Audit &Supervisory Board by appointing five board members—
three of whom are outside auditors—to supervise
directors in the execution of their duties.
The Board of Directors is made up of 12 directors—fourof whom are outside directors—with the Chairman of theBoard serving as the chairperson. The Board of Directors
makes decisions on important management mattersconcerning the IHI Corporation and the Group, and it
oversees the business execution of directors. The IHI
Corporation nominates persons with extensive andmultifaceted experience, broad knowledge, and high-level
expertise as outside directors. These nominees cancontribute to the decision-making of the Board of
Directors from a standpoint independent of the
management involved in business execution.

Corporate Governance Management Structure

Board of Directors(Directors)
Audit

Reporting

Delegation of Authority

Chief Executive Officer (CEO)
Chief Operating Officer (COO)
Audit

Remuneration
Advisory Committee
Nomination
Recommendations Advisory Committee

Consultation

Business Execution
Functions

Instruction

Executive Officers
Headquarters andOperations/Group Companies

Management Committee
ReportAudit

Internal Audit
Division• Remuneration Advisory Committee andNomination Advisory Committee
We have established and convened a Remuneration
Advisory Committee and Nomination Advisory Committee
as independent committees.
The Remuneration Advisory Committee determines thesuitability and objectivity of the remuneration brought upby the Board of Directors. This six-person committee ismade up of three outside directors, one outside Audit &Supervisory Board member, the Director in charge ofhuman resources, and the Director in charge of financeand accounting with an outside director acting aschairperson.

The Committee convened five times with no absentees
in 2019.
The Nomination Advisory Committee oversees andadvises the Board of Directors on appropriate officer
nominations. This five-person committee is made up of
the President and four outside directors with the
President acting as chairperson.
The Committee convened five times with no absentees
in 2019.

018

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate GovernanceAppointment of Officers
Policies and Procedures
The Board has defined ideal officer attributes for the
Board of Directors. We have also drafted Independence
Criteria for Outside Officers in accordance with the Tokyo
Stock Exchange independent officer requirements toensure the independence of outside directors andauditors.
The Board of Directors has formulated a basic policy toappoint corporate officers who can best ensuresustainable growth and enhance medium- to long-term
corporate value throughout the IHI Group according tothese ideal attributes and the Independence Criteria for
Outside officers.
IHI strengthens the independence, objectivity, andaccountability of the Board of Directors through a processthat goes beyond the legal requirements for corporate
officer appointments. We have established a Nomination
Advisory Committee as a voluntary advisory bodycomprised of the President and all independent outside
officers to make sure outside Directors actively oversee
and advise on appointment procedures.
The Board of Directors also promptly determines whether
to dismiss a member of senior management or an
executive officer according to dismissal criteria.

• Ideal Officer Attributes
IHI nominates officers who are both sound in mind andbody and possess all the following attributes:• Deep understanding and empathy with the
management philosophy and vision• The ability to address social issues, foster sustainablegrowth and enhance medium- to long-term corporate
value in accordance with the IHI Group vision• Outstanding foresight, excellent insight, and the ability
to make proper IHI Group management decisions• A high ethical compass• Extensive management experience or expert
knowledge combined with broad global perspective anddiscernment• Independence Criteria for Outside Officers
IHI determines the independence of officers according to
the following criteria in addition to the Tokyo Stock
Exchange requirements for independent officers.
1. Major shareholders
An independent officer shall not hold 10% or morevoting rights in the IHI Corporation, or serve as adirector, audit and supervisory board member,
operating officer, executive officer or employee of amajor corporate shareholder.
2. Major business partners
An independent officer shall not have served as an
executive director, operating officer, or executive
officer in the past or currently serve as a director, audit
and supervisory board member, operating officer,
executive officer, or employee of a major IHI business
partner defined as:• A major client of the IHI Group whose businessequates to at least 2% of consolidated net sales in
the most recent fiscal year
• A major supplier of the IHI Group whose businessequates to at least 2% of consolidated net sales in
the most recent fiscal year

A lender to the IHI Corporation listed as a major
lender in the business report for the most recent
fiscal year
3. Special service providers
An independent officer shall not be a special service
provider, such as an attorney at law, certified public
accountant, or consultant, who receives 10 million yen
or more in money or other assets annually from IHI in
addition to the officer salary.
4. Accounting auditors
An independent officer shall not serve as arepresentative partner or employee of an IHI
accounting auditor.
5. Mutual exchange of officers, etc.
An independent officer shall not be assigned to acompany with a relationship of mutually exchanging
directors or auditors.
6. Close relatives
An independent officer shall not be a spouse or relative
within two degrees of kinship of a director, Audit &Supervisory Board member, executive officer or otherexecutive-level employee of the IHI Group. In addition,
an independent officer shall not be a spouse or relative
within two degrees of kinship of any person* in 1
through 4 above.
•*If a major shareholder or business partner is a corporate entity,
the above only applies to relatives of directors, audit andsupervisory board members, operating officers, executive
officers, and other executive-level employees of said company.
IHI also nominates candidates as outside officers withconsideration to age, concurrent positions, term of office, andother relevant criteria.

019

Sustainability
Management

Basic Information

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Governance• Members of the Board of Directors (as of July 1, 2020)
Name
Position at theCompany

TsugioMitsuoka
Chairman of the
Board

Hiroshi Ide
President

Takeshi
YamadaExecutive Vice
President

Tomoharu
Shikina
Executive Vice
President

Masafumi
NaganoDirector

Kouichi
Murakami
Director

Reasons for nomination

Tsugio Mitsuoka has lead IHI Group management sinceApril 2016, by actively carrying out the selection andconcentration of business operations and thetransformation of the business model in response to thechanging business environment. He has also built stronger
earnings foundations for the Group by bolstering risk
management and ensuring compliance.
Since April this year, he has been working to further
strengthen corporate governance as Chairman of theBoard. We believe his abundant experience and insight ascorporate manager will be utilized in the management of
the IHI Group.
Hiroshi Ide has accumulated a great deal of knowledge
mainly in the overseas marketing division for the energy
plant business. As Managing Director of an overseas
subsidiary and subsequently as the manager responsible
for a business area, he has formulated business strategies
and carried out business operations with a long-term
perspective for the realization of a carbon-free recyclingoriented society. Since April this year, he has led the IHI
Group management as Chief Operating Officer. We believe
his abundant international experience, accomplishments,
and insight will be utilized in the management of the IHI
Group.
Takeshi Yamada has accumulated a great deal ofknowledge mainly in the finance and accounting field aswell as corporate planning, and lead the Group finance andaccounting. Since April 2019, he has worked on Groupfinancial strategies and improvement in the financial
condition as Executive Vice President. We believe his highlevel of insight into overall Group business management
will be utilized in the management of the IHI Group.
Tomoharu Shikina has accumulated a great deal ofknowledge in the aero-engine technology development
field. He has been responsible for managing the global
aero engine, space, and defense business and striven togrow the business. We believe his abundantaccomplishments, experience, and insight will be utilized
in the management of the IHI Group.
Masafumi Nagano has accumulated a great deal ofknowledge mainly in human resources. He has worked on
the transformation of a business model centering on thelife-cycle business in the industrial systems andgeneral-purpose machinery business. Since April this year,
he has been involved in planning management strategies,
drawing on his experience in both corporate and businessdivisions. We believe his extensive experience,accomplishments, and insight will contribute to the growthof the IHI Group.
Kouichi Murakami gained experience in the research anddevelopment of materials as well as overall technologicalmanagement in technology and Intelligence integration.
After being the manager responsible for a businessdivision, he has led the technology and intelligence
integration as well as engaged in creating new businesses,
drawing on his high level of insight across all technologies.
We believe his extensive experience, accomplishments,
and insight will be essential for the growth of the IHI
Group.

Attendanceat Board of
Directors
meetings
in 2019

18 of 18–

18 of 18

Term in
office6 years

Since
June
2020

3 years

Appointments toadvisory committees

Name

Company
shareholding Remuneration Nomination
Advisory
Advisory
Committee Committee

10,400shares

1,300
shares

1,600
shares–Position at theCompany

TakeshiKawakami–

Director–

Committee
MemberYasuhiro
Shigegaki

Chairperson

Director

Taketsugu
Fujiwara–

Outside Director

KazuhikoIshimura

18 of 18

4 years

4,700
shares–**

Outside Director–

Yoshiyuki
Nakanishi*

Outside Director

18 of 18

2 years

4,100
sharesCommittee
Member–*ChiekoMatsudaOutside Director

18 of 18

2 years

4,600
shares––Appointments toadvisory committees

Reasons for nomination

Attendanceat Board of
Directors
meetings
in 2019

Term in
officeTakeshi Kawakami has accumulated a great deal ofknowledge mainly in the bridge design and construction
divisions. He served as the manager responsible for many
domestic and overseas projects, and subsequently as
President of a company formed through IHI acquisitions ofmajor operations in Japan, which engages in the bridge
and water gate business. He has striven to grow the social
infrastructure-related business within the Group. We
believe his abundant accomplishments, experience, andinsight will contribute to the growth in the social
infrastructure and offshore facilities business area and the
IHI Group as a whole.

–

Since
June
2020

1,400
shares––Yasuhiro Shigegaki has accumulated a great deal ofknowledge mainly in technology and intelligence
integration. In addition to having served as Chairman of
the Board of an overseas entity that IHI acquired for theheat and surface treatment business, he has actively
pursued global expansion by leading domestic andoverseas Group companies engaged in businesses toachieve growth. We believe his extensive experience,accomplishments, and insight will contribute to the growthof the IHI Group, including the industrial systems andgeneral-purpose machinery business.

–

Since
June
2020

1,400
shares––Taketsugu Fujiwara gained extensive experience and broad
insight at the helm of a general chemicals manufacturer,
where he implemented diversified management. We aim
for these qualities to be reflected in IHI management, andacknowledge his proven ability in performing management
oversight and monitoring functions from an independent
perspective.

17 of 18

5 years0
sharesChairperson

Committee
MemberKazuhiko Ishimura gained extensive experience and broad
insight at the helm of a comprehensive materials
manufacturer. We aim for these qualities to be reflected in
IHI management, and acknowledge his proven ability toperform management oversight and monitoring functions
from an independent perspective.

18 of 18

3 years

1,200
sharesCommittee
MemberCommittee
MemberYoshiyuki Nakanishi has gained extensive experience andbroad insight as the corporate manager of a global
chemical manufacturer by implementing various measures
to respond to the changes in the business environment.
We aim to reflect these qualities in IHI management, andexpect he can carry out management oversight andmonitoring functions from an independent perspective.

–

Since
June
2020

0
sharesCommittee
MemberCommittee
MemberChieko Matsuda has gained abundant knowledge inbusiness strategy and finance strategy through her
research and studies, and broad insight through her
experience as an outside director of several companies.
We aim for these qualities in IHI management, and expect
she can carry out management oversight and monitoring
functions from an independent perspective.

–

Since
June
2020

0
shares–Committee
MemberCompany
shareholding Remuneration Nomination
Advisory
Advisory
Committee Committee*Independent directors as stipulated by the Tokyo Stock Exchange, and directors satisfying IHI's'Independence Criteria for Outside Officers'(Unit : %)Average attendance of outside directors

2016

2017

2018

2019

Board of Directors meetings

96.2

95.3

98.6

98.1

020

Basic Information

Corporate Governance• Members of the Audit & Supervisory Board (as of July 1, 2020)
Attendance atBoard of Directors
meetings in 2019

Name

Reasons for nomination

Position at theCompany

Taizo Suga
Standing Audit &Supervisory
Board Member

TakashiNiimuraStanding Audit &Supervisory
Board Member

Tomomi
Yatsu*1

Outside Audit &Supervisory
Board Member*1

ToshioIwamotoOutside Audit &Supervisory
Board Member*1

Aiko Sekine

Outside Audit &Supervisory
Board Member

Attendance at
Audit & Supervisory
Board meetingsin 2019

Taizo Suga has accumulated a great deal of knowledge
mainly in the finance and accounting field since joining IHI.
He was appointed as the President and Chief Executive
Officer of IHI ASIA PACIFIC PTE. LTD. We believe his highdegree of specialist knowledge in financial management
and wide ranging business experience in overall business
management will be utilized in the effective auditing of the
IHI Group.
Takashi Niimura has accumulated a great deal of knowledge
in the sales and marketing field since joining IHI. As the
manager responsible for supervising domestic and overseas
branches and affiliated companies, he has carried out sales
strategies from a company-wide perspective, while globally
expanding operations and managing risks according to thesituation in each country. We believe his abundantaccomplishments, experience, and insight will be utilized in
the effective auditing of the IHI Group.
Tomomi Yatsu has accumulated extensive experience andinsight by responding to various corporate challenges as an
attorney at law and a certified public accountant and has
been carrying out the auditing functions of IHI managementfrom an independent perspective.
Toshio Iwamoto has gained extensive experience and broad
insight as a corporate manager. We expect he will
strengthen corporate governance and use these qualities
and his independent perspective in IHI management
auditing functions. As a company involved in transforming
the business model, we believe he will utilize his extensive
IoT knowledge and experience in system development andother operations.
Aiko Sekine has accumulated abundant experience andinsight as a corporate representative and President of
JICPA. We expect these qualities and her independent
perspective to be reflected in the management auditing
functions.
Although she has not been involved in company
management, we believe she will adequately execute her
duties as an outside Audit & Supervisory Board Member.

Appointments to advisorycommittees
Term in
officeRemuneration
Advisory
Committee

Nomination
Advisory
Committee

3 years

–

–

Since
June
2020

–

–

3 years––

1 yearCommittee
Member

–

Since
June
2020

–

–

18 of 18
13 of 13––18 of 18
13 of 13
14 of 14 *2
10 of 10*2––

*1 Independent directors as stipulated by the Tokyo Stock Exchange, and outside audit & supervisoryboard members satisfying IHI's 'Independence Criteria for Outside Officers'*2 Shows attendance status to the audit & supervisory board meetings held after appointment as audit &supervisory board member.

(Unit : %)Average attendance of outside Audit &Supervisory Board Members

2016

2017

2018

2019

Board of Directors meetings

92.3

96.0

92.6

100.0

Audit & Supervisory Board meetings

93.0

100.0

100.0

100.0

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

021

Sustainability
Management

Basic Information

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Governance

Remuneration for Officers
Policy on Determination of Remuneration for Officers• Basic Policy on Determining of Remuneration
for Officers

The IHI Corporation regularly reviews objective market
data on remuneration from a third-party research instituteto set appropriate levels of remuneration. We also
consider factors such as IHI business conditions and theeffectiveness of incentives and set remuneration
proportionately at 60%, 20% and 20% between the (1)base amount, (2) annual bonuses paid for meeting
performance targets, and (3) medium- to long-term
performance-based incentives.

• Remuneration of Outside Directors and Audit& Supervisory Board Members
IHI only provides a fixed amount to outside directors thattake into account their duties.
We also only provide fixed salary to outside Audit &Supervisory Board members based on their duty tooversee business execution throughout the entire IHI
Group. IHI determines the specific amount of
remuneration together with the Audit & Supervisory Board.

• Calculation Method for Incentives
We calculate incentives using consolidated ROIC and consolidated operating profit margin as performance evaluation
indicators because these are important management indicators under the Group Management Policy 2019.
Remuneration
types

Performancelinked stock
remuneration

Payment amount calculation method

No. of issued shares

=

Stock

Cash

Basic points
corresponding to
job title ranking

Performance evaluation

Percentage obtained bywith consolidated ROIC

enrollment by 12

× payout rate corresponding × dividing the months of

× 1/2

Fluctuation from 0 to around 150
Level of accomplishment at end of performance evaluation period(upcoming 3 business years)
Amount of monetary
payment=

No. of confirmed points*1− No. of issued shares× Current value of IHI shares on the day rights are finalized
1. 1 finalized point is equivalent to 1 IHI share.

In the case of representative director

Performance-based bonuses(Annual incentives)• Remuneration Standards and Payout Ratio

IHI determines the remuneration for directors andexecutive officers through deliberation andrecommendations from the Remuneration Advisory
Committee with the final decision made by the Board of
Directors. This process ensures fairness and objectivity.

Performance-based
share remuneration(Medium- to long-term incentives)

Officer remuneration provides powerful motivation for IHI
Officers to achieve specific management goals byencouraging business execution founded in theManagement Philosophy, Group Vision, and GroupManagement Policy for the purpose of fostering
sustainable growth and increasing medium- to long-term
corporate value of the IHI and IHI Group.
A fixed salary is only one part of officer remuneration. IHI
also sets appropriate annual bonuses linked to fiscal
performance in addition to medium- to long-term
performance-based incentives tied to the corporate value
and medium- and long-term performance. This ensuresofficers share the same risk and reward as our broad
range of stakeholders. This remuneration system acts asa driving force for sound entrepreneurship.
We know human resources are our single most valuableasset as stated in our Management Philosophy.
Therefore, we also determine salaries appropriate to IHI
officers in consideration of factors such as the
management environment as well as the social role andresponsibility of our Group.

• Procedures for Determining Remuneration

Performancebased
bonusesStandard
payment amount= corresponding to×

titles and positions

Performance
evaluation payout rate corresponding to
the current net income attributable toowners of parent 2

Performance
evaluation payout rate

× 50/100 + corresponding with consolidated × 50/100
operating profit margin 2

In the case of directors
Cash

Performancebased
bonusesStandard
payment amount= corresponding totitles and positions

×

Performance
evaluation payout rate
corresponding to the current
net income attributable toowners of parent 2

Performance
evaluation payout rate

× 30/100 + corresponding toconsolidated operating
profit margin 2, 3

Payout rate
based on× 50/100 + individual

performance
evaluation 2

× 20/100

2. Fluctuation from 0 to around 200
3. In the case of a director overseeing a business area, the performance evaluation payout rate corresponding
to the consolidated operating profit margin of the said business area is used.
2020 adds cash flows (consolidated cash flow and consolidated operating profit margin of business areas incharge) as one performance evaluation indicator for the purpose of securing future investment funds andbuilding a solid financial base. The consolidated cash flow is the sum of cash flows from operating activities
and investing activities.

022

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Governance
Results for 2019 Remuneration
Details of Director and Audit & Supervisory Board Members Remuneration
(Unit: Million yen)

Category

Number ofpeopleremunerated

Total remuneration by type
Basic
remuneration

Performancebased share
remuneration

Performancebased
bonusesTotal
remuneration

Directors

12

434

117

12

565

Audit &
Supervisory
Board Members

6

108

–

–

108

Total
(outside)

18
(8)

542
(75)

117
(–)

12
(–)

673
(75)

Note 1: Annual remuneration for directors is capped at 1,090 million yen, annual amount for audit &supervisory board members is capped at 120 million yen.
Note 2: The table includes one director and one audit & supervisory board member who retired at theconclusion of the Ordinary General Meeting of Shareholders held on June 20, 2019.
As such, the figures are different from the figures as of March 31, 2020 (11 directors and five audit& supervisory board members).

Targets, results, and other data of performance evaluation payout rates
Type ofremuneration

Performance
evaluation
indicator

Margin ofperformance
evaluation
payout rate

TargetResults

Performance
evaluation
payout rates

Performancebased share
remuneration

ConsolidatedROIC

0 - 150%

Maximum: 13%
Target:10%
Minimum: 3.5%

5.7%

50%

Current net
incomeattributable toowners ofparent0 - 200%

Maximum: 60.2
billion yen
Target:45.2
12.8
billion yen billion yen
Minimum: 30.2
billion yen

0%

Performance
evaluation
payout rate

0 - 200%

Maximum: 8.0%
Target:
6.0%
Minimum: 4.0%0%

Performancebased bonus

3.6%

023

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Governance

Board of Directors Evaluation

Others

Cross shareholdings

IHI has been evaluating the performance of the Board of
Directors annually in principles since 2015 to further its
effectiveness.
We evaluate the Board of Directors specifically by:• Conducting anonymous questionnaires for all directors
and Audit & Supervisory Board members through athird-party consulting company. The questions cover
everything from the Board composition and operation
to risk management and Board culture.
• Collecting and analyzing questionnaires through athird-party consulting company.
• Interviewing all relevant officers about thequestionnaire and result analysis. IHI also holds aninformal discussion for an exchange of ideas mainly
between outside directors.
We bundle this evaluation as a self-assessment of theBoard of Directors and identify areas where
improvements should be made.
The Board of Directors evaluation carried out in 2019 once
again independently verified the effectiveness of theBoard of Directors.
However, we were able to identify several new risk
factors from a broader view, including a need tostrengthen oversight and monitoring of businessexecution and prevent the spread of the COVID-19. IHI
affirmed these measures will deepen discussions andenhance the effectiveness of the Board of Directors evenfurther. We plan to carry out the next Board of Directors
evaluation during 2020.

• Corporate Governance Report

Approach

Please see our Corporate Governance Report for more
information about IHI corporate governance.
web

Corporate Governance Report• Purpose of cross shareholdings
IHI engages in substantial dialogue with companies who
have interlocking stockholding in an effort to reduce crossshareholdings. Although our policy does not limit holding
shares of strategic partners for business alliances, joint
research, or other purposes to increase our mid- tolong-term growth and corporate value.

• Management of cross shareholdings
The Board of Directors verifies the intention andeconomical rationality to hold shares in the medium- tolong-term based on its ownership policy described above
for all cross shareholdings every year and determines if
the share should be held or not.

Results
In 2019, out of the 57 cross shareholding stocks,
including 26 stocks funded to the retirement benefit trust,seven stocks were all sold and two stocks were partially
sold.

024

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Compliance
Compliance
Policies
The IHI Group strives for sound compliance founded on
the Basic Rules of Compliance for IHI Group and otherguidelines.
These activities conducted not only to address legal
compliance but also to respond to the needs of thesociety with having full grasp of the ever-changing values
and expectations of the society.
In response to a quality issue in 2019, we focused onstrengthened our compliance and quality assurance
systems as part of the risk management activities toprevent recurrence. For example, we established the IHI
Group Code of Action with reference to the Basic Codeof Conduct for the IHI Group as a guiding light for all IHI
Group employees in their day-to-day work in 2019.
We will continue to ensure uncompromising complianceand prevent recurrence by finding the root causes of thequality issue in an effort to rebuild trust.

IHI Group Code of Action• Tax Compliance
IHI Group Global Tax Policy

1. We truly understand and will comply with any
and all applicable rules.
2. We do not engage in any wrongdoing.
3. We respect human rights.
4. We make safety and quality for our customers
a top priority.
5. We enter into fair and legitimate transactions.
6. We never impair the safety of ourselves or ourcolleagues.
7. We strictly manage and control information.
8. If we discover an issue, we report it
immediately.

Basic Rules of Compliance for IHI Group
Compliance is the foundation for companies to
do business in society.
The IHI Group shall act as follows in accordancewith the Basic Code of Conduct for the IHI
Group:• Observing strictly all laws, internal rules, andother regulations.
• Act in a fair and responsible manner asbusiness people.

The IHI Group enacts the Global Tax Policy inaccordance with “Basic Code of Conduct for the
IHI Group”, for the purpose of developing global
tax compliance, and aims at growing sustainably
and enhancing corporate value over the future.
1. Respect for The rule of law
The IHI Group observes the laws and ordinances
on taxes of each country or region based on aclear understanding of their meaning. The IHI
Group also acts sincerely and fairly with highethical standards so that it does not violate social
rules or international norms.
2. Transfer pricing
The IHI Group, by assessing transfer pricing inaccordance with the laws and ordinances of eachcountry or region and The International Transfer
Pricing Guidelines, is committed to appropriately
allocating income commensurate with thecontribution of each Group company and to
making proper tax payment in each country andregion.
3. Tax planning
The IHI Group does not engage in tax planningfor the purpose of tax avoidance.
4. Relationships with The tax authorities
The IHI Group, by providing information in thecourse of tax administration procedures and tax
audits appropriately and in a timely manner,
strives to maintain a sound relationship with the
tax authorities of each country or region.

025

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Compliance• Compliance Hotline

Structure• Compliance Committee

Compliance Structure
Chief Operating Ofﬁcer (COO)
Management Committee
Compliance Committee
Head Ofﬁce Divisions
Compliance Ofﬁcer

Chairperson
Secretariat
Committee members
Meetings convened
in 2019

Business Areas

Compliance Ofﬁcer

Chief Compliance officer
Compliance Group of theLegal Division
Compliance officer of eachdivision
5

Framework of the Compliance Hotline

Whistleblower(IHI and affiliated company officer,
regular employee, part-time employee,
temporary employee, etc.)

TEL

FAX
(Japan)WEB(Online)Initial Report (external agency)
Provides reports with
content approved by
the whistleblower
Accepts reports eitherwith name oranonymously

Reports every issue as
is without alteration
Masks the name, source,
and any other identifiable
information for anonymous
reports

IHI Legal Division

Provides feedback on how the issue is handled(to named whistleblowers who request feedback)

The IHI Group established the Compliance Committee asa Group-wide committee on compliance. Made up ofcompliance officers from each division with the Chief
Compliance Officer acting as chair, the Compliance
Committee deliberates and drafts important policies oncompliance as well as promotes compliance activities.
Compliance Committee members roll out the decisions
made by the Committee to each division by adapting andimplementing the measures into compliance activities
according to each business category.
Compliance officers also use a PDCA cycle forcompliance activities and share the progress of eachdivision with the Compliance Committee.
The Legal Division acts as a secretariat to plan andexecute compliance activities in accordance with thepolicies set forth by the Compliance Committee while
also monitoring the progress of compliance activities ineach division to provide any necessary guidance andsupport.

The IHI Group runs the Compliance Hotline as an internalreporting system to prevent or quickly identify any actions
that violate or potentially violate laws, internal regulations,or internal and external rules by IHI officers or employees
in order to find and take the proper steps to rectify any
issues. This system prohibits unfavorable treatment or
harassment of whistleblowers, and violators will be
disciplined in accordance with its employment
regulations.
IHI officers and employees can directly report or consult
with third-party experts outside of their chain ofcommand via this hotline.
We also launched the Compliance Hotline in the UnitedStates in 2017 and in Asia Pacific, China, Taiwan, andKorea in 2018.
Preparations were already underway in 2019 to launchhotlines in Europe, Turkey and Russia. Anyone can file areport in the main language spoken in each country.

Strictconfidentiality

Compliance managers at IHI Divisions
and affiliated companies

026

Sustainability
Management

Basic Information

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Compliance
Education/Awareness Building

Number of Compliance Training Participants Item• Quality & Compliance Training
IHI Group Code of Action was newly established toensure that the entire IHI Group practices
uncompromising compliance as a basic rule in light ofinadequate inspection in the Civil Aero Engineer
Maintenance Business. We also conducted Quality &Compliance training and follow-up support to nurture aneven greater awareness about compliance in all IHI Group
directors, officers and employees.

• e-Learning
The IHI Group also provides compliance training withannual themes through an e-learning platform. In 2019,
our e-Learning program focused on a theme aiming torealize a workplace without harassment. We conducted
this training at IHI Group companies worldwide.

2016

2017

2018

Officer training

IHI and subsidiary companies
in Japan

55

50

47

Line Manager Training

IHI and subsidiary companies
in Japan

73

83

75

e-Learning

2019
–
72

IHI and subsidiary companies
in Japan–––

27,866

Affiliated companies overseas

–

–

–

1,774

Japan

IHI and subsidiary companies
in Japan

18,85918,02018,234

18,164

Overseas

Affiliated companies overseas

1,392

1,261

1,126

1,214

Quality & Compliance Training• Line Manager Training
The IHI Group provides compliance training to line
managers who lead our employees in day-to-day tasks.
The training in 2019 highlighted the key points to prevent
compliance violations, the importance of cultivating anorganizational climate with high occupational pride, andthe policies for management in the future. A total of 977
line managers have taken part in this training since its
inception in 2006.

(Unit: People)

Scope of Data

Results
Number of Compliance Hotline Reports (Unit: Reports)

Item

2016

2017

2018

2019

Reports

218

209

238

239

Scope of Data
2016: IHI and subsidiary companies in Japan
2017: IHI, subsidiary companies in Japan, and some affiliated companies overseas (USA and Brazil)
2018, 2019: IHI, subsidiary companies in Japan, and some affiliated companies overseas (USA, Brazil,
Asia, China, and Korea)

027

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Compliance

Competition Laws/Anti-corruption Laws

Management Framework

Results

Policies

The IHI Group promotes educational and monitoring
programs with the IHI Legal Division at the core of Group
compliance and risk management.
The IHI Group always examines potential violation ofcompetition and anti-corruption laws as well as othercompliance risks according to the above IHI Group rules.
Each IHI Group company conducts risk assessments
suitable to their area and business category andaddresses any issue found according to the level of risk
with the support of the IHI Legal Division.
We also identify and handle any competition law/anticorruption law violations or other compliance issues atthe earliest possible stage through the Compliance
Hotline.
If any major compliance issues are ever discovered, IHI
establishes a task force led by the CEO as the chief toquickly and flexibly handle the issue while leveraging theknowledge of internal and external experts. This task
force does not only address the issue but also introduces
and supports measures to prevent recurrence.

Legal Compliance Initiatives and Violations (2019)(Unit: Incidents, Scope: IHI and consolidated subsidiaries)• Preventing Corruption (Competition Laws/
Anti-corruption Laws)
More global and borderless corporate activities makecompliance with various competition laws in each country
indispensable to maintain and gain business opportunities
in international markets. International codes of actions
prohibit any form of illicit profit or other corruption.
We are fully committed to complying with competition
laws, anti-corruption laws, and all other laws andregulations as part of the code of action for all theemployees, officers and directors of the Group.
We strive to both expand and strengthen efforts toprevent violations of competition laws by defining
specifics of the code of action in the IHI Group
Competition Law Compliance Policy and other various
guidelines.
The IHI Group also adheres to anti-corruption laws. The
IHI Group Basic Policy Against Bribery of Public Officials
prohibits bribes, facilitation payments, and otherinappropriate or irrational payments and donations topublic officials. To increase the effectiveness of thispolicy, we have also drafted operating standards andappointed managers as well as put in place specificprocedures in each division.

Item

2016

2017

2018

2019

Competition laws

0

0

0

0

Anti-corruption
laws

0

0

0

0

Expenditure to political organizations, economic
organizations, other major industry organizations
(Unit: Millions of yen, Scope: IHI)
Item

2016

2017

2018

2019

Political
organizations

10

10

10

10

Economicorganizations

41

42

48

56

Other major industry
organizations

55

55

101

120

Education/Awareness Building• Employee Training and Monitoring
The IHI Group provides training to teach employees about
the various competition laws worldwide, such as theJapan Antimonopoly Act and Unfair Competition
Prevention Act, the United States Sherman Antitrust Act,and the European Union Competition Law.
We also educate employees about the United States
Foreign Corrupt Practices Act (FCPA) and the United
Kingdom Bribery Act 2010 while monitoring the risk ofviolating anti-corruption laws in Japan and overseas.
We gain feedback from participants about theseawareness-raising activities, and the IHI Legal Division
reviews the effectiveness of the program to help enhancecompliance education every year.

028

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Compliance

Security Trade Control

Security Trade Control Structure

Structure

President• IHI Security Trade Control Committee
The IHI Group has established internal security tradecontrol rules and set up the IHI Security Trade Control
Committee. Under these rules, the Committee works tomanage risk and ensure compliance with the Foreign
Exchange and Foreign Trade Acts.
The IHI Security Trade Control Committee is a Group-wide
body led by an Executive Vice President as chair with theLegal Division acting as secretariat. The members are
made up of managers selected from each division andbusiness area as well as review board members. The
Committee audits overseas business proposals from eachdivision internally, independently assesses the progressof security trade control, shares relevant legal andregulatory information, raises awareness, and provides
training.
We will continue to improve the business operations ineach division based on the points and issues raised inthese self-assessments in an effort to enhance thequality of our security trade control.

IHI Security Trade Control Committee
Chairperson: Executive Vice President
Secretariat

Observers

Head of Secretariat:
General Manager ofLegal Division
Security Trade Control
Group of Legal DivisionInternal Audit Division
Technology & Intelligence
Integration
Global Marketing & Sales
Headquarters
Corporate Group of Legal Division

Head of Management Section ofeach division and business area
Managers selected fromeach division and business area
Affiliated Companies

Review Board

Affiliated companies worldwide:
Led by division and business area
in charge

Chairperson: Appointed by Committee
Review Board Members:
Selected from each divisionand business area

Chairperson

Executive Vice President

Secretariat

Security Trade Control Group of Legal
Division

Committee members

Head of Management Section of eachdivision and business area

Meetings convened in
2019

1

029

Basic Information

Sustainability
Management

Quality ComplianceApproach• IHI Group Code of Action and Quality
Declaration

The IHI Group introduced the following Group-wide
quality measures in an effort to return to the core
principles of our corporate ethics after discovering
inadequate quality inspections in the Civil Aero Engine
Maintenance Business in 2019.
1. D raft and Deploy an IHI Group Code of Action andQuality Declaration
2. Strengthen the compliance structure

The IHI Group established the Code of Action in 2019 todefine standards that every officer and employee must
adhere to in daily tasks. Expanding on the Basic Code of
Conduct for the IHI Group, the Code of Action further
clarifies proper conduct and evaluation criteria.
We have also made safety and quality a top priority in the
IHI Group Quality Declaration. The Quality Declaration
reaffirms and clarifies the mindset and quality-oriented
actions that are the basis for our approach to
manufacturing.
We quickly deployed the Code of Action and Quality
Declaration across the entire IHI Group once drafted. Our
training program also helps raise awareness about thesepolicies and helps ensure proper daily business practices.

P.25

Compliance3. Strengthen the quality assurance and quality
management systems
4. Create workplaces where everyone has a voice
5. Strengthen risk management

P.25
P.32

IHI Group Code of Action

Risk Management
IHI Group Quality Declaration
We, the IHI Group shall:
1. Always put quality first.
2.	Continue improving quality via Sangen-Shugi
and communication.
3. Listen sincerely to issues, swiftly take Action
and share accurate Information.
4. Provide quality assurance through compliancewith rules and working appropriately.
5. All strive for the satisfaction of our customers.

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

030

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Quality Compliance
Structure

Quality Improvement Promotion System• Strengthening Quality Assurance and Quality
Management Systems
The IHI Group established the IHI Group Quality
Committee as a Group-wide committee on quality. The
Committee deliberated and drafted important quality
policies as well as promoted activities with the officer incharge of overall Group Quality Assurance as chair. The
members are made up of the President of a businessarea, Executive in charge of Quality for business area,
and Executive of Head Office Division.

Education/Awareness Building
P.27

Chief Operating Officer (COO)

Quality & Compliance Training

Initiatives
IHI Group Quality Committee

Business Area
President of Business Area
Executive in charge of Quality
General Manager of Quality Assurance Division

Business Unit/Affiliated Company
General Manager of Business Unit/President ofaffiliated company
Executive in charge of Quality
General Manager of Quality Assurance Division

Chairperson

Officer in charge of Overall
Group Quality Assurance

Secretariat

Monozukuri System Strategy
Planning

Committee
members

President of a business area,
Executive in charge of Quality
for business area, and Executive
of Head Office Division

Meetings convened
in 20191• Creating Workplaces Where Everyone Has a
Voice
Our president and other senior management visit
worksites to engage in a dialogue where top
management and employees have an equal standing foran active exchange of ideas.
In 2019, we launched Quality Assurance (QA) teams
made up of members from design, technology andquality departments at our plants in Japan to address any
problems or issues faced on-site. IHI promotes ideal
workplaces where employees can work in good health bysolving problems from a Quality Assurance (QA) rather
than Quality Control (QC) perspective based oncommunication and facts about the situation unique toeach site.

031

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Risk Management
Risk Management

Structure

Policies

The IHI Group established the Risk Management
Conference chaired by the CEO as a body to review
policy initiatives, annual plans, corrective measures andother matters important to overall risk management.
We formulated the IHI Group Key Risk Management
Policies to prioritize risks that need to be addressed. Each
IHI division and Group company worldwide move forwardwith independent risk management in accordance withthese policies.

The IHI Group considers and engages in risk
management as the top material issue of management.
The basic objectives of risk management are ensuringbusiness continuity, ensuring the safety of executives,
employees and their families, protecting managerial
resources, and maintaining public trust in IHI Group
companies. We manage risk in accordance with thefollowing action guidelines based on the Basic Code of
Conduct for the IHI Group.
1. E
 nsure the continuity of the IHI Group’s business
operations.
2. Improve the public reputation of the IHI Group.
3. Protect the IHI Group’s managerial resources.
4. Avoid jeopardizing stakeholders’ interests.
5. Achieve recovery from damage as soon as possible.
6. Take responsible action when an issue arises.
7. Meet public requirements regarding risks.

Some risks though are common throughout the entire IHI
Group. Therefore, the Group Risk Management Unit
made up primarily of head office divisions share
information and provide education to take advantage ofexpert knowledge and support risk management activitiesof each Group division. The Internal Audit Division also
strives to secure a suitable level of risk management byassessing the readiness and progress of the Group risk
management structure.

Risk Management Structure
Board of Directors
Risk Management Conference
Chairperson: CEO
Head Office Division* Business Units are affiliated with
Business Area.

Presidents of Business Area
Risk Management
Group

Group Risk
Management
Unit

Internal Audit Div.
Legal Div.
Human Resources Div.
Technology &Intelligence Integration…………………………
…………………………
…………………………
Divisions
Affiliated companies

GeneralManagers ofBusiness Unit *…

GeneralManagers ofBusiness Unit

Group Risk Management Unit supports the identificationand management of risks across the Group.

Divisions
Affiliated companies

Divisions
Affiliated companies

Divisions
Affiliated companies

Chairperson

Chief Executive Officer (CEO)Secretariat

Corporate Planning Division

Attendees

General Managers of each Group Risk Management Unit, Presidents of eachBusiness Area, and others nominated by the Chairperson

Meetings convened in 2019

4032

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Risk Management• Key Risk Management Policies in 2020

Initiatives
IHI built a three-level risk management structure in
FY2019 to realize uncompromising risk management
through multiple defensive lines. We have also been
conducting initiatives to strengthen risk management
along the key themes.
P.25

Compliance

P.30

Quality Compliance

Today, the business environment around the IHI Group ischanging significantly. To accelerate business
transformation while responding to the significant
change, IHI must thoroughly identify the risks
accompanied by the ever-evolving business climate,strengthen rapid response capabilities, and spearhead
uncompromising risk management through the PDCA
cycle. That is why our efforts emphasize the key risk
management themes included on the right.

Risk Management Framework

Risk Management Framework
Top-down Themes
1. Evolve compliance program
2. Settle quality assurance framework
3. Enhance risk management forimportant business risk

Risk
Management
Conference
Convened
QuarterlyContinually assess and verify
response plans and progress of
implementation for more than
100 business-related risks

Bottom-up initiatives

Three Levels of Risk Response
Defensive Lines

Level 3

Level 2

Level 1Division in Charge

Response

Internal Audit
Division

Audit of risk management
functions

Head office divisions

Evaluate and advise, issue alerts,
detect risks, and roll out measures

Business Area

Anticipate risks as well as
monitor and direct risk response

Business Division
Business Unit
Identify risks and respond directly
Affiliated Companies• Risk Management Initiatives to Plan and Promote
Risk Management Plans for Top-down Themes
1. Evolve compliance program
2. Settle quality assurance framework
3. Enhance risk management for important businessrisk• Risk Management Initiatives to Comprehensively
Identify Risks Inherent to Business Activities as wellas Plan and Promote Risk Management Plans
1. Thoroughly implement and strengthen safety
management.
2. Strengthen Compliance
3. Reform quality and operation systems
4. Respond to changes in management environments
and competitive environments, and promote
environmental management.
5. Properly respond to risks associated with theexecution of global strategy.
6. Transition to robust project implementation andrisk management structures.
7. Ensure information security.
8. Develop adequate Business Continuity Plans (BCP)in case of disasters/accidents.
9. Ensure the appropriateness of large-scale
investments.
10. Improve operational productivity through workstyle reforms and build workplaces where diverse
human resources can actively participate.
11. Prevent leaks of confidential business information,
personal information, and vital technicalinformation.
12. Maintain and improve trusting relationships withstakeholders.
13. Implement thorough measures against
harassment.
14. Promote further improvement of diversity
15. Promote education on human rights and activities
to raise awareness.

033

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Risk Management

Crisis Management

Initiatives

Approach• Preventing the Spread of the Novel
Coronavirus (COVID-19)

We have defined a crisis management structure,
response procedures, and Business Continuity Plans(BCP) for the entire IHI Group to respond to emergency
situations as part of the Basic Rules of Crisis
Management for IHI Group.
The IHI Group formed the Crisis Management
Headquarters to take the necessary steps to minimize
damage of an emergency situation with the potential togravely impact corporate management and businessactivities.

The IHI Group understands that responding to various
situations including state of emergency is vital as anorganization that supports social infrastructure. Therefore,
we ensure business continuity of the Group by flexibly
adapting to all social and economic changes.
We responded to the spread of the Novel Coronavirus(COVID-19) by urgently setting up a Crisis Management
Headquarters led by the President as chief. As wecontinue our business activities, the Headquarters takes
the steps necessary to prevent the spread of the virus byprioritizing the health and safety of our customers as well
as officers and employees and their families above allelse.
We have primarily taken the following steps:
1. Provide a work system to prevent infection.
Administrative departments have increased the ratio of
employees that work from home. Our works and otherproduction bases have taken steps to reduce the risk ofinfection as much as possible when commuting andwhile at work. These measures include fewer on-site
staff, alternative work schedules, and encouraging
employees to commute using personal vehicles rather
than public transportation. IHI also checks on the healthof not only officers and employees but also their families
every day and take measures such as instructing
employees that may be infected to not attend theworkplace.
2. Securing Items for Infection Prevention.
We have even secured stable procurement routes formasks, disinfectant alcohols, and other items for infection
prevention to distribute and stockpile at each site.
3. Examine new work styles.
We are revising traditional work processes and system
while considering new work styles to enable prevention
the spread of infection and continuing our business aswell as responding flexibly to the evolving businessenvironment.

• Disaster Prevention Initiatives
The IHI Group prepares for severe disasters and has built
a system to ensure both employee safety and business
continuity.
More specifically, we have formulated preparation
procedures and other internal rules as well as draftedBusiness Continuity Plan (BCP) for each representative
office, division and affiliated company. These efforts haveearned IHI the Resilience Certification from the Cabinet
Secretariat of Japan.
In addition to capital investments, such as earthquake
proofing of works and offices, the IHI Group enters into
disaster prevention and readiness agreements andsteadily builds other cooperative relationships with local
governments in case disaster strikes.

• Drafting and Strengthening BusinessContinuity Plans
The IHI Group not only reviews the BCP to maintain andstrengthen the effectiveness of the BCP but also
consistently updates the risk maps for each site andpromoting officers and employees to register to thesafety confirmation system.
Every March, IHI conducts Group response training forsevere disasters with the participation of the President
and other management executives. This training varies
the day, time, and estimated damage of a disaster eachyear to test the effectiveness of our BCP from various
angles. Our affiliated companies also conduct training totest their BCP in an effort to enhance disaster prevention
capabilities.

034

Basic Information

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Information Security
Policies
The IHI Group has put in place the IHI Group Information Security Policy and strives for proper information management while maintaining and improving information security in order tocertainly protect confidential information of customers and business partners as well as corporate management and technical information.
IHI Group Information Security Policy
The IHI Group hereby sets the following IHI Group
Information Security Policy for the purpose of
ensuring the security of information assets in its
possession and thereby further solidifying its trustbased relationship with customers, users and society.
(Basic Activities)
1. The IHI Group will take appropriate measures withtechnology, organization and employees, in order toprotect information assets against any leakage,theft, loss, destruction, illegal access, and disaster.
In the event of any security problem regarding thisinformation, the IHI Group will locate the cause as
quickly as possible, and exert every possible effort
to minimize the damage incurred.
(Information Assets)
2. “Information assets” refer to the information the
IHI Group handles in the course of businessactivities, regardless of the type of media, and theequipment, facilities and services necessary forhandling such information.
(Scope)3. This Information Security Policy applies to all thoseusing the information assets of the IHI Group,
including but not limited to officers and employeesof the IHI Group companies and temporary staff.
(Compliance with Laws, Regulations, etc.)
4. The IHI Group will strictly observe the laws,
regulations and codes pertaining to the protectionof information assets, and the requirements andobligations regarding information security provided
for in the agreements with the customers.
(Education)
5. The IHI Group companies will provide all thoseusing the information assets of the IHI Group with
the necessary education on information security toenhance and maintain their awareness thereof.
(Management of Information Security)
6. The IHI Group companies will establish amechanism of implementing and managing
information security by taking measures such as
establishing rules concerning information security
and appointing persons in charge of information
management, thereby conducting, maintaining andimproving information security activities on acontinual basis.
(Responsibilities of Senior Management)
7. The Senior Management of the IHI Group will set

the example of enforcing this Information Security
Policy. In the event of any infringement of thisPolicy, senior management will address thesituation properly by defining their authorities andresponsibilities, and do their utmost to resolve theproblems, diagnose their causes, and prevent theirrecurrence.
(Punishment)
8. Any action in violation of the rules of information
security will incur punishment according to theemployment regulations of IHI Group companies.
(Announcement)
9. This Information Security Policy will be announced
and notified to all those using the information
assets of the IHI Group as well as being announced
to the public.

035

Sustainability
Management

Principled Corporate
Principled
Corporate
Management
Management• Information Security Management System

Results

Basic Information

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Objectives

Information Security
Management Framework
The IHI Group has put in place an Information Security
Promotion Framework with a Chief Information Security
Officer (CISO) in charge of managing information securityof the IHI Group. We have established the Information
Security Subcommittee under the IoT/ICT Promotion
Committee as an organization to promote information
security activities. Each of Information Security General
Managers is appointed from IHI Head Office Divisions,
Business Areas, Business Units and group companies.
Information Security Promotion Framework
Chief Operating Officer (COO)
Management Committee
IoT/ICT Promotion Committee
Information Security
Subcommittee

The IHI Group convenes the Information Security
Subcommittee three times a year to plan, implement andevaluate information security measures in an annual
cycle.
In 2019, we built a three-stage auditing framework for
information security consisting of 3 types of audit bydifferent auditors as a means to strengthen checks (C) in
the PDCA cycle. We conducted internal audits by IHI
divisions and group companies, on-site audits by eachBusiness Area and document audit by the Information
Security Department. The on-site audits evaluated 6
affiliated companies while each Business Area provided
guidance on corrective actions for any issues that were
found.
We strive for a high level of information security. Divisions
and group companies involved in sensitive national
projects in the IHI Group must undergo annual reviews to
renew the ISO 27001 international information security
certification by an external expert agency.

Education/Awareness Building

Business Areas

Information Security Subcommittee
Chairperson

General Manager of Intelligent
Information Management
Headquarters

Secretariat

Information Security Department
of Intelligent Information
Management Headquarters

Subcommittee
members

Business Areas, Business Units
and Head Office Divisions

Meetings convened
3
in 2019

The IHI Group provides e-Learning every year designed tomaintain and raise information security awareness in aneffort to further officer and employee understanding
about the information security rules and tools.
Rate of Participation in e-Learning

The IHI Group takes steps to address information security
risks from three perspectives: rules, tools and education.
We have stipulated rules that include the IHI Group
Information Security Policy, Information Security
Countermeasure Standards and Information System User
Rules. We have adopted antivirus software and othersecurity tools, which are always kept up to date.

• Evaluation of Information Security Measures
We assess the information security measures of theentire IHI Group quantitatively every year based on thebenchmark for information security measures
implemented by companies offered by the Informationtechnology Promotion Agency, Japan (IPA).
The level of information security measures in 2019 was
3.2 out of 5. We will continue to improve our level of
information security in 2020 with the goal of achieving ascore of 4.
Evaluation of Information Security Measures(Unit: Score, Scope: IHI and consolidated subsidiaries)• Employee Education

Head Office
Divisions• Information Security Measures(Unit: %, Scope: IHI)

Item

2016

2017

2018

2019

Rate of
Participationin e-Learning

98.5

98.0

96.8

83.0

Item

2016

2017

2018

2019

Evaluation ofInformation Security
Measures (Out of 5)

–

3.0

2.9

3.2

036

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Materialize
an Affluent Society
Human Rights

038

Customer Relationship Management

040

Managing Human Resources

041

Diversity and Inclusion

043

Diversity and Inclusion (Human Resource Development)

048

Labor Practice (Occupational Health and Safety)

050

Supply Chain Management055

Corporate Citizenship

058

037

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Human Rights
ApproachManagement Framework

The IHI Group works to raise awareness about humanrights by taking a global Group perspective in line with
the United Nations Guiding Principles on Business andHuman Rights. We aim to nurture a corporate culture
which respects human rights as a basic guiding principle
in business activities. In 2020, as part of these initiatives,
we will declare an IHI Group Human Rights Policy.
We will respond to a wide range of human rights issues
in good faith, from various forms of harassment, thehuman rights of people who have contracted COVID-19
and those around them to the human rights of everyone
in online environments.

• IHI Group Human Rights Committee
We established the IHI Group Human Rights Committee
as a Group-wide committee. The Committee led by theofficer in charge of human rights as the chairperson withmembers from the Head Office Divisions and Business
Areas deliberates and plans important policies andpromotes initiatives related to human rights. This bodyreports on important human rights activities at theManagement Committee as a way to consistently instill
the importance of promoting human rights throughout
the Group.

Chief Operating Officer (COO)

Management Committee

IHI Group Human Rights Committee

Head Office
Divisions

Business Areas

Chairperson

Officer in charge of HumanrightsSecretariat

Human Resources Division

Members

President of each business area,
General Manager of Procurement
Strategy Planning, General Manager
of Technology & Intelligence
Integration, General Manager of
Global Marketing & Sales
Headquarters, General Manager ofSecretariat Div., General Manager
of Corporate Planning Div., General
Manager of Public Relations Div.,
General Manager of Legal Div.,
General Manager of Administration
Div., and General Manager of
Human Resources Div..

Meetings convened
in 2019

1

038

Basic Information

Sustainability
Management

Human Rights
Education/Awareness Building

Initiatives• Employee Education• Human Rights Due Diligence

The IHI Group promotes initiatives to raise awarenessabout human rights. Over 5,000 employees participatedin stratified training, on-site training, and external training
in 2019 to raise awareness about topics from humanrights and compliance to harassment.

The IHI Group began human rights due diligence to fully
understand the risks related to our businesses.
In 2019, we conducted a questionnaire on the progress ofhuman rights initiatives at 42 affiliated companies inJapan and 38 affiliated companies overseas.

Number of Human Rights Training Participants(Unit: People, Scope: IHI and affiliated companies in Japan)• Building an Inclusive Workplace Regardlessof Sexual Orientation or Gender Identity

Item

2016

2017

2018

2019

New and Third-year
Employee Training(Group Stratified Training)

715

686

624

569

Instructor andMain Participants(Group Stratified Training)

690

637

679

784

Leader andMiddle Manager Training(Group Stratified Training)

660

612

670

576

As part of support for LGBTQIA+, the IHI Group ensuresthat employment systems, welfare benefits, and various
other programs are not affected by the employee's sexual
orientation or gender identity. LGBT Ally Action
consistently recruits and distributes information to allies(supporters) of gender minorities. This initiative is working
to eradicate discrimination based on sexual orientation orgender identity.

• Installing Multipurpose Toilets
The IHI Group has installed Multipurpose Toilets that takeadvantage of a universal design to meet the special
needs of every employee regardless of whether a sexual
minority or person with a disability.

• Offering Harassment Consultation Services
The IHI Group has hired two to three harassment
counselors in each region. These counselors undergo
special training before being assigned to their post. IHI
also sets up investigative committees as necessary tolook into the facts of any incident. These inspectors andcounselors keep all matters of concerned parties strictly
confidential.

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

039

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Customer Relationship Management
Approach
The IHI Group fosters business growth through anapproach that provides safe products and services which
not only satisfy customer needs and earn trust but also
contribute to the development of society. The quality ofour products and services forms a bond of trust between
the IHI Group, customers, and society. Therefore, quality
assurance is a social mission and a fundamental
foundation of our existence.

Education/Awareness Building• Employee Education
The IHI Group has put in place quality management andassurance systems to improve customer satisfaction
according to our management philosophy that “humanresources are our single most valuable asset”. We
conduct stratified training mandatory for all employees as
education and training to heighten awareness about
product safety and improve skill level.
The new employee training program teaches theimportance of a customer-oriented perspective at an earlystage. Second-year employee training focuses on quality,
the PDCA cycle, and work procedures. Third-year
employee training emphasizes ethics, the environment,
and safety as a manufacturing company. IHI raises
awareness about internal rules and important laws andregulations through regular e-learning programs. Eachbusiness area also provides their own independent
training systems.
We have also designed systems to raise questions about
legal compliance for the purpose of raising employee
awareness. These systems also strive to mitigate risk.
In 2019, IHI conducted quality professional training tocultivate quality leaders.

Number of Training Participants(Unit: People, Scope: IHI and affiliated companies in Japan)
Item

2018

2019

Internal auditor training

105

74

Third-year employee training on
quality management and productsafety352

314

Training seminars for newly-appointed
foremen and assistant foreman of
manufacturing divisions focuses onsolving problems and achieving issues
in quality management

101

316

Quality and product safety training(Three courses with a total of six
classes)472

354

Professional quality training–

6

Initiatives• Surveying Customer Satisfaction
The IHI Group surveys customers' satisfaction throughquestionnaires and other avenues to gain customer
feedback. We determine and inquire about aspects
distinct to each business, and then analyze and share ourfindings with all relevant divisions. This information helps
us adapt efforts to improve in order to further heighten
customer satisfaction.

• Ensuring Product Safety
The IHI Group considers the product life cycle to adopt
systems that guarantee product safety. Through risk
assessment that takes into account the product life cycle
during development, we are able to build in measuresthat reduce risks as much as possible. Only then can we
provide customers with information about any residual
risk.

• Disclosing Product and Service Information
The IHI Group shares information about products andservices through various mediums, such as television andnewspaper advertisements and the company homepage.
This information helps familiarize the public at large about
IHI. We cooperate with all relevant internal departments
to provide accurate factual information in accordance withcopyrights, trademarks and all other relevant laws andindustry regulations. IHI evaluates the effectiveness ofthese campaigns to find opportunities to improve.
Number of Law Violations
(Unit: Incidents, Scope: IHI and consolidated subsidiaries)
Item

2016

2017

2018

2019

Laws/regulations relating
to PR activities

0

0

0

0

• Emerging Market Initiatives• Providing Products Tailored to Emerging Markets
The IHI Group has been working with the Tsinghua
Environmental Engineering Design & Research Instituteto develop water processing technology since 1999. Thisnew technology tackles water pollution in rivers, lakes,
and marshes, which has become a severe problem in
China. Research Institute for Environmental
Innovation(suzhou), Tsinghua was founded for the
purpose of spearheading practical applications ofenvironmental technology, and it is currently helping us in
our goal to commercialize this venture in the early 2020s.
In 2018, we established IHI SOLID BIOMASS MALAYSIA
SDN. BHD. (ISBM) in Malaysia to drive the manufacture,export and sale of EFB pellets—a solid biomass fuel—derived from palm Empty Fruit Bunches (EFB). In the twoyears since its founding, ISBM has striven to not only
provide a stable supply of solid biomass fuel but also
effectively use waste palm oil production processes andreduce the environmental impact.

040

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Managing Human Resources
Policies
The IHI Group recruits and trains human resources as themost vital management resource. Our management
philosophy ensures that we contribute to thedevelopment of society and states that human resources
are our single most valuable asset.
We strive to realize a healthy, safe, work-friendly
environment where everyone respects one another andprospers.

• Group Human Resource Management Policy
The Group Vision lays the foundation as a global company
to devise reliable and convenient solutions that bring
benefit to humanity and the environment. As a means tothis end, we must unify under common values to reform
corporate culture as well as build workplaces andsystems that empower people to reach their full potential.
We drafted the Group Human Resource Management
Policy to embed this basic approach to human resource
management in the entire Group. This management
policy expands various recruitment, assignment,
development, and evaluation measures according to keygroup, global and diversity attributes for ideal humanresources.

Group Human Resource Management Policy
The IHI Group aims to create customer value by
using engineering expertise to focus on
manufacturing technology in line with the
management philosophy and IHI Group Vision
through the following:
1. IHI will define and raise awareness about ideal humanresources shared by all Group employees to become anenterprise of professionals with excellent skills fromperspectives of global manufacturing and engineering
technologies as well as high quality products andservices renowned worldwide.

2. IHI will establish and carry out human resource
management measures based on ideal human resources
and provide Group employees with growth
opportunities.

3. IHI will provide a work environment where people ofdiverse backgrounds are in tune with the management
philosophy and Group Vision of IHI and can reach theirfull potential.

Ideal Human Resources

Keywords

Integrity and TrustGroup

For Customers and Society

GlobalInnovation and Creation

Diversity

Team WorkWorld-class Professional

Initiatives• Equal Wages for All New Employees
Worldwide
The IHI Group strives for fair and equal treatment
according to position and responsibilities. We will neverdiscriminate based on gender.

• Employee-awareness Surveys
The IHI Group conducts employee-awareness survey
targeting all employees once a year to grasp the status of
the employee engagement. Results of the survey are
analyzed for each department and employee status tohighlight the strengths and issues, reflect them in humanresource measures, and improvement of operational
processes.

041

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Managing Human Resources
Results
Number of Employees
Item
Consolidated Number of employees
Number of employees
Male
IHI
FemaleRatio of female employees(Unit: People, Scope: IHI and consolidated subsidiaries)

2016
29,659
8,630
7,625
1,005
11.6%

Number of Employees by Region
Item
Japan
Asia Pacific
USA
Europe, Middle East, and Africa

201622,752
3,856
1,166
1,885

2017
22,667
3,888
1,244
1,907

Under 30
30 to 39
40 to 49
50 to 59
60 and over2019
28,964
7,741
6,730
1,011
13.1%

2018
21,862
4,213
1,352
1,859

2019
21,700
4,141
1,292
1,831

(Unit: People, Scope: IHI and consolidated subsidiaries)

2016
7,744
2,493

2017
7,579
2,290

2018
6,467
2,359

2019
6,812
2,399

9,677

9,946

10,22010,079

6,348
2,406
991

6,463
2,458
970

6,660
2,619
961

6,684
2,014
976

Number of Employees by Age
Item

2018
29,286
8,011
6,994
1,017
12.7%

(Unit: People, Scope: IHI and consolidated subsidiaries)

Number of Employees by Business Area
Item
Resources, Energy & Environment
Social Infrastructure & Offshore Facilities
Industrial Systems &General-Purpose Machinery
Aero Engine, Space & Defense
Other
Entire company (common)

2017
29,706
8,256
7,245
1,011
12.2%

(Unit: People, Scope: IHI)

2016
2,073
2,296
2,432
1,252
577

2017
1,930
2,285
2,274
1,290
477

2018
1,780
2,277
2,171
1,389
394

2019
1,612
2,198
2,119
1,462
350

Number of Employees by Employment Status

(Unit: People, Scope: IHI)

Item

2016

2017

2018

2019

Regular employees

8,180

7,938

7,678

7,410

Re-hires

182

83

84

88

Second by other companies

268

235

249

243

Constants and contract employees

222

131

83

91

Part-time employees

472

470

498

496

Fixed-term employees

73

43

106

101

Temporary employees

1,307

1,322

1,325

1,330

Turnover Rate(Scope: IHI)

Item

2016

2017

2018

2019

Total turnover rate

3.9%

4.0%

4.3%

3.5%

Rate of retirement due to personalreasons

1.4%

2.0%

2.0%

2.0%

Turnover rate within 3 years of
joining the company

5.8%

5.7%

7.4%

6.8%

2016

2017

2018

2019

All employees

14.5

14.8

14.9

15.8

Male

14.8

15.1

15.1

16.0

Female

12.2

12.5

13.2

14.5

Average Years of Service
Item(Unit: Year, Scope: IHI)

Ratio of Answered Employee-awareness Surveys
Item
Ratio of answered employeeawareness surveys(Scope: IHI and affiliated companies)

2016

2017

2018

2019

87.6%

90.9%

91.7%

91.4%

042

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion
Approach
The IHI Group advocates diversity as one aspect of theGroup Human Resource Management Policy according to
the management philosophy that “human resources are
our single most valuable asset”.
A workplace where people with diverse backgrounds andvalues can reach their full potential cultivates anorganizational climate that embodies broad views andbrings about innovation and creation. A corporate climate
cultivating innovation and creation is essential in achieving
our management philosophy to contribute to thedevelopment of society through technology. We promote
diversity as one part of the IHI Group management
strategy.
Diversity involves everything from gender, ethnicity,
nationality, ability and disability to age, sexual orientation,
religion, values, career experience, and work style.
The IHI Group has always promoted the active
participation of women, foreign nationals, people withdisabilities, and employees past retirement age. We
continue to further advocate diversity from supporting
work-life balance for employees raising children or taking
care of sick family to the active participation of LGBTQIA+
gender minorities. We also help encourage opportunities
both inside and outside of the company as a way toprovide broader experiences and open minds.

Targets and results
KPI

Targets

Target Year2019 Results

Ratio of female
employees

University graduates: Total of 15% or more
(Approximately 10% or more female
engineers and 35% or more female
administrative staff)–

University graduates:
Total of 19.6%(4% female engineers and 47%
female administrative staff)

Ratio of female
managers

2.5 times the number of female managers(4.0%) compared to fiscal 2014(enactment of the General Employers
Action Plan)

2022

3.0%

Female officers

1 or more persons

2022

3

Ratio of employeeswith disabilities

More than 2.4%

2021

Steadily exceeds 2.3%

Promotion of male
employees to takechildcare leave

Acquisition of 2 or more weeks(including regular days off)

–

–

043

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion
New graduate recruitment results 
Item(Unit: People, Scope: IHI)

2016

2017

2018

2019

288

245

155

153

Male (Engineers)

208

174

110

95

Female (Engineers)

21

19

7

16

Male (Administrative)

40

36

25

28

Female (Administrative)

19

16

13

14

13.9%

14.3%

12.9%

19.6%

Total

Female recruitment rate

Female officers*2 
Item

2017

2018

2019

Total

18

19

17

16

Female officers(outside)

1
(1)

3
(3)

4
(3)

3
(2)

Ratio of female officers

6%

16%

24%

19%

*2 As of July 1 each year, members of the board of directors and audit & supervisory board.

Female managers*3 
ItemMid-career recruitment results 
ItemMid-career recruitment(Unit: People, Scope: IHI)

2016

2017

2018

2019

153

29

78

37

Recruitment ratio of people with disabilities*1 
Item
Ratio of employees withdisabilities(Scope: IHI)

2016

2017

2018

2019

2.14%

2.03%

2.21%

2.39%

2017

2018

2019

2,630

2,626

2,643

2,767

66

68

74

83

Ratio of female managers

2.5%

2.6%

2.8%

3.0%

Ratio of female general managers

0.7%

0.8%

0.8%

0.8%

Ratio of female section managers

1.8%

1.8%

2.0%

2.2%

Total
Female managers*3 As of April 1 each year

Re-employment rateRe-employment rate of employees
at retirement age(Unit: People, Scope: IHI)

2016

Ratio of employees from abroad *1 As of June 1 each year

Item

(Unit: People, Scope: IHI)

2016

(Scope: IHI)

2016

2017

2018

(Scope: IHI)

Item

2016

2017

2018

2019

Ratio of employees from abroad

1.0%

1.1%

1.0%

1.0%

2019
Local managers at overseas sites*4

84%

87%

84%

81%

Item

(Unit: People, Scope: China, Singapore, and USA)

2016

2017

2018

2019

20

23

22

23

China

1

1

4

4

Singapore

10

12

8

7

United States

9

10

10

12

Total

*4 As of April 1 each year044Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion
Participants in training to cultivate local managers at overseas sites
(Unit: People, Scope: China and Asia Pacific region)
Item
Participants

2016

2017

2018

2019

33

25

36

42

Training Participants (Unit: People, Scope: IHI and affiliated companies in Japan)

Leave Acquisition Rate 
Item(Unit: People, Scope: IHI)

2016

2017

2018

2019

Employees who haveused the reduced workhour program

149

159

158

161

Item

2016

2017

2018

2019

Employees who have taken
childcare leave

674

677

689

779

Return to work training for
employees taking
childcare leave

–

–

34

32

Employees who have taken
parental leave

89

111

113

132

Work-life balanceseminars for managers
raising children

100%

100%

100%

99.2%

–

–

–

102

Percentage of employees
who return to work afterparental leave

Gender diversity seminar

–

–

120

–

Employees who havetaken nursing care leave

11

18

6

7

Diversity
challenge seminar*

–

–

–

160

Network leader training

23

33

21

21

*Scope: Only IHI

Average Annual Paid Vacation Days Taken 
Item
Average annual paidvacation days taken(Unit: Days, Scope: Non-IHI)

2016

2017

2018

2019

16.50

17.63

18.36

19.40

Monthly Average Overtime (Unit: Hours, Scope: IHI)

Item

2016

2017

2018

2019

Monthly average overtime

23.90

22.90

22.50

21.10

045

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion
Initiatives
The IHI Group employs people regardless of nationality,
gender, and age to secure a diverse workforce.
We select candidates with aptitude and skills that fit theideal human resource attributes outlined in the Group
Human Resource Management Policy. IHI trains
employees involved with interviews and other
employment processes on fair and impartial recruitment
practices.

• Hosting a Diversity Challenge Seminar
IHI held a Diversity Challenge Seminar in 2019 at thelarge training room in the IHI Toyosu Head Office. Thisseminar was broadcast live to other offices with a total of
approx. 160 people from employees with disabilities totheir managers and general employees participating.
This diversity seminar provided an introduction to theAccessibility Consortium of Enterprises (ACE)*1, which IHI
is a member, a talk by Ayako Ozawa who has progressive
muscular dystrophy and works in the IBM Japan HR
department, an activity report from the Head Office
operational support team, and a UD Talk*2 overview.
Participants praised this experience as a great chance tolearn about the work of employees with disabilities aswell as ways to better interact with staff who havedisabilities.
*1 The ACE is a consortium of 32 major companies that aim toestablish new employment models for people with disabilities.
*2 Text-to-speech software for employees with hearing impairments.

• Recruiting Female Employees• Recruiting Foreign Nationals

IHI actively recruits women through publishing pamphlets
for women, featuring stories about female employees on
the recruiting homepage, and holding employment
seminars specifically for women.

The IHI Group recruits professionals from around theglobe to employ diverse human resources who can
actively participate anywhere in the world. We hire
foreign exchange students in Japan as well as seek out
potential candidates at schools abroad. To date, we haveheld recruitment seminars for people in the UnitedStates, the United Kingdom, Korea and Singapore.
IHI has extended its internship program to universities inemerging countries as well. We have concluded aMemorandum of Understanding (MOU) with the Bandung
Institute of Technology in Indonesia to welcome one to
two interns every year. We also joined the Shibaura
Institute of Technology Global Technology Initiative (GTI)
Consortium and have been offering plant tours tostudents from King Mongkut’s University of Technology
Thonburi in Thailand.

• Supporting Female Employees andCultivating Female Managers
IHI offers workshops, seminars and a variety of otheractivities to encourage the active participation of female
employees. A network leadership program is one
example used to provide a system that supports female
employees in each region.
In addition to raising awareness about developmenttraining by superiors, we also hold seminars taught byguest instructors every year to help forge a path forfemale managers. These seminars help female
employees develop their careers while considering major
life events. IHI employees have access to internal andexternal opportunities to broaden experience and open
minds. These include human resource assignments
throughout the entire Group and third-party training
programs.

• Recruiting Persons with Disabilities
IHI actively recruits persons with disabilities for the
purpose of fostering a workplace friendly to everyone.
We not only actively accept interns from schools and theemployment service center of Japan but also focus on
assigning persons with disabilities to a broader range oftasks once appointed to a position.

046

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion• Empowering Local Employees Overseas to
Cultivate Upper Management Candidates
The IHI Group is accelerating global expansion. Overseas,
we recruit and nurture human resources with roots in thecommunity according to the ideal human resource
attributes outlined in the Group Human Resource
Management Policy while considering the unique labormarket and practices of each country.
We also provide human resource development training tocultivate local managers as a way to help develop the
careers of our employees in emerging countries. Our
Group puts particular emphasis on training global
procurement officers. We are even furthering training
programs for local staff at overseas Group companies.
In 2019, we held training seminars in China as well as
Asia and Oceania regions. IHI strives to provide acomprehensive training curriculum in addition to humanresource policies that heighten the motivation of local
employees. This training includes educational
opportunities, such as training for local employees inJapan.

• Recruiting Mid-Career Candidates• Work-Life Balance

IHI actively pursues mid-career candidates. We consider
strategically appointing human resources that have therequired capabilities is crucial in the current ever changing
business environment. As such, in addition to the regular
recruitment, we recruit human resources withexperience, knowledge, and capabilities strategically andin a timely manner.

• Enhancing Programs
The IHI Group strives to provide comprehensive work-lifebalance programs to achieve a work-friendly environment
where every employee can find balance between theirpersonal and professional lives.
Some of these programs include a flextime policy, workfrom home long-term leave programs to use for annual
paid vacation, various policies to help support child andnursing care*, and no overtime days. The IHI Group has
also designated November as a month of diversity
promotion. We encourage everyone in the company totake advantage of these programs by distributing
information in many different forms. For instance, IHI
hands out leaflets to all Group employees about childcare
leave for men.

• Hiring Temporary Employees as Regular
Salaried Employees
IHI has put in place a system to hire temporary workers
as regular salaried employees. This program lays a pathfor temporary employees who satisfy certain criteria to
become regular salaried employees.

• Employing People Over 60
IHI provides a program for each employee to decide
when to retire between the ages of 60 to 65. We alsooffer a wide range of work-style seminars for employees
in their 50s to help sustain motivation in their 60s. Today,
more than 80% of our employees over the age of 60
have stayed actively involved in their current roles.

* These programs are available to both seasonal and part-time
employees.

• Managing Work Hours
The IHI Group has defined policies to manage annual
working hours in the hope of realizing a better work-lifebalance through work-hour reforms. We strive to promote
flexible work styles free from traditional approaches. For
example, each division drafts action plans to reform theway in which work is done, actively leverages ICT, andtakes full advantage of all employment programs. We
also work to encourage employees to take annual leave,
encourage male employees to take childcare leave, andensure enough rest between work days.

047

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

048

Diversity and Inclusion (Human Resource Development)
Approach

SeniorExecutive
Program

Executive
Manager
ProgramTraining by Level and Position

Selective Training

Education by Position and Job Category

Elective Training

Open Lectures (English/Global Communication and Cultural Competency)

Orientation Training
for New Employees
Basic Technical Skills Training

Open Lectures (Business/Technical Skills, etc.)

Junior
Employees

Technical
LeaderTraining

Open Lectures (Management Skills)

Second-year
Employee Training

Work-life Balance Training (Child/Nursing Care)

Junior Employees

Third-year
Employee Training

Assistant
ForemanTraining

Global Human Resource Training(Overseas Appointment, etc.)

Middle Level
Employee Training

ForemanTraining

Business English Lessons

Leader Training

Global Leader Training(On-site University Program)Manager Training

Overseas Appointment Training and Language Lessons

Middle Management
Training

Instructor Training

Education by Job Category and Department (Afﬁliated Companies)

Data Analyst Training

Senior
Employees

Senior
Employees

Business
Leader
Program(Basic)Design Strategist Training

Workplace Leaders

AssistantManagers

Project Training for Product Development

Managing Human Resources

Professional Quality Training

SectionManagers

Production Management Training

Business
Leader
Program(Advanced)

Executive
Manager
Programat
Afﬁliated
Companies

Professional Training

Professional Engineering Training

GeneralManagers

Training
for Newly
Appointed
Ofﬁcers
at AfﬁliatedCompanies(As of March 16, 2020)

Open
Global Human
Diversity
LectureResource Training
External Training (Senior and Section Management Training for Women [E Position] and Cross Industry Exchanges)

SeniorManagement

External Training (Executive and Liberal Arts Training, Cross Industry Exchanges, and Study Abroad Programs)

P.41

Management Training

Managers

The IHI Group believes professionals grow most throughday-to-day work. Human resource development requires
effort on the part of both the employee and company.
Each professional must work to better themselves in dailytasks while the company must strive to offer
opportunities for human resources to grow.
The IHI Group established the Group Human Resource
Development Policy with reference to the Group Human
Resource Management Policy. This policy divides humanresource development into responsibilities for employees
and the company while clarifying the role of superiors,
departments and HR divisions in providing development
opportunities to define an educational framework andtraining curriculum for employees as well as a uniquedevelopment path for each person in their department.

IHI Group Education and Training ProgramsBasic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Diversity and Inclusion (Human Resource Development)
Results

Initiatives

Participants in Main Training Courses and Total
Number of Training Hours
(Scope: IHI and affiliated companies in Japan)• Career Development Program (CDP)

Item

2016

2017

2018

2019

Stratified Training
Participants

3,300

2,900

3,300

3,276

Training Hours

112,000

101,000

112,000

106,208

Participants

5,800

5,800

6,200

3,343

Training Hours

46,00044,00047,00025,073

Open Lectures

Average Annual Training Hours per Employee
Training Hours

17.4

16.7

16.7

19.8

Employees Certified as Master Artisans(Unit: People, Scope: IHI)
Item

2016

2017

2018

2019

45

42

37

35*

Welding

6

5

2

–

Assembly

6

7

10

–

Machining

14

13

9

–

Testing/
Inspection

10

10

9

–

Maintenance

3

2

2

–

Other

6

5

5

–

Total

* As of June 30, 2020

IHI introduced a Group-wide Career Development
Program (CDP) in 2019 as a training system tailored to
the needs of each employee. This program encourages
independent career development, accelerated growth,and lifelong learning.
IHI considers interviews and coaching by superiors isimportant and issued coaching guide and hold seminars.
The purpose of coaching is to bring out employee
motivation and active participation in the organization. The
IHI Group regards coaching as one of the most importantskills for managers. In the future, we will take advantage
of our stratified training to improve coaching skills.

• Developing Human Resources
The IHI Group determines educational frameworks andcurriculum according to the ideal human resource
attributes laid out in the Group Human Resource
Management Policy. This becomes the foundation ofstratified training throughout the entire Group whether ajunior employee or newly appointed general manager. IHI
also provides other various training programs to groom
professional human resources at the core ofmanagement and business activities as well as cultivate
global human resources and female managers. We evenoffer elective open courses as a tool to heighten
operational expertise.
We ensure human resource development remains
consistent with evaluations and appointments by holding
interviews with all employees three times a year toprovide feedback about the assessment results from theperson who made the evaluation. These evaluators
indicate assessment and improvement points to help
build the skills of each individual.

• Developing Global Human Resources
The IHI Group is passionate about global human resource
development. We offer opportunities to systematicallyexperience major business activities at overseas
manufacturing sites and projects as well as various
training that complement them.
In 2019, we sent 7 trainees to Malaysia and 14 to India tolearn on-site overseas. This training aims to not only
provide trainees with better cultural and diversity
understanding but also teach independence, initiative,
and a global mindset.
Our training programs in Japan have also introduced
online foreign languages classes for employees toimprove their English or another chosen language. 176
people took part in these online language classes in 2019.
IHI also held six open seminars in 2019 to help build
language skills and cultural understanding.
We use the I-STEP Shonan IHI Human Resources
Development & Communication Center (Yokosuka City,
Kanagawa) which are joined by over 12,000 people fromaround the world each year. The Center is an active
communication and learning base where colleagues fromeach corner of the globe can come together to share ourcorporate philosophy and values.
• Passing Down Skills to Others
IHI strives to pass down welding, machining, and othercore skills at each plant, which are the foundation of ourmanufacturing expertise. Many of our employees areexperts in each of these fields. IHI has introduced amaster artisan program to encourage employees certified
as master artisans to pass on their skills to new up-andcomers.
In 2019, IHI expanded the scope of certification for that
program.

049

Basic Information

Sustainability
Management

Labor Practice (Occupational Health and Safety)
Policies
One extremely important management issue is ensuring
health and safety. Every month, IHI briefs all officers on
the progress of Group-wide occupational health andsafety as well as health management. We actively strive
to build a work-friendly environment where all Group
employees can reach their full potential.
The initiatives on the right are undertaken according to
the IHI Health and Safety Policy as a way to ensure a safeand healthy workplace for all employees.

IHI Health and Safety Policy
1. The "Five Safety Principles" will be taken as aprinciple shared throughout the Group andmanagers as well as all employees will engage
in safety and health activities to prevent
accidents.
[Five Safety Principles]– Safety is our first priority– Never do or let anyone else do anything
dangerous– Eliminate potential hazards– Strictly follow the rules– Make a real effort
2. We will endeavor to prepare facilities andprovide opportunities to promote and maintainthe mental and physical health of ouremployees, and create ideal workplaces inwhich employees can work in good health.
3. While complying with relevant laws andregulations on safety and health, we will givefull consideration to how our businessactivities affect local communities andendeavor to ensure safety and health as amember of society.

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

050

Basic Information

Sustainability
Management

Labor Practice (Occupational Health and Safety)
IHI Group Health Management Declaration
The IHI Group will implement management thatvalues the health of employees based on the
management philosophy of “Human resources are
our single most valuable asset”.
We will support the proactive improvement of
employee health and aim to energize the organization
by maximizing employee vitality and capabilities.
By doing this, we will contribute to the developmentof society through the growth of the IHI Group.

Specific Initiatives
The IHI Group will work on both corporate healthmanagement and work style reforms.
We will actively cooperate with labor unions andhealth insurance associations to spearhead the key
measures below.
IHI asks every employee to strive to better their own
health and take part in building an enthusiastic
working environment.

July 1, 2020
Hiroshi Ide
President and Chief Operating Officer
IHI Corporation

1. Reduce individual and organizational health risks.
(i)	Enforcement of working conditions according
to the results of medical check-ups.
(ii)	Ensure the implementation of reactive mental
healthcare measures.
(Improve the working environment through stresschecks and a clear response to illnesses.)(iii)	Encourage employees to stop smoking andprevent second-hand smoking.
2.	Improve individual and organizational health toinvigorate the working environment.
(i)	Assist each person to actively manage theirown health.
(ii)	Proactively implement active mental healthcare
measures.
(Build a working environment where enthusiasm
and professional growth is felt so that everyone
cultivates an enduring spirit.)
3.	Promote better health for both employees andtheir families.
(i)	Expand activities to better health of employees
and their families.
(ii)	Increase employee participation in medical
check-ups and health guidance.

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

051

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Labor Practice (Occupational Health and Safety)
Management Framework

Education/Awareness Building• IHI Group Health and Safety Committee• Employee Education

Chief Operating Officer (COO)

Management Committee

IHI Group Health and Safety Committee

Chairperson

Officer in charge of Health and
SafetyDeputyChairperson

President of Aero Engine, Space &Defense Business Area andPresident of Social Infrastructure &Offshore Facilities Business Area

Secretariat

Labor & Safety Group of Human
Resources Division

Meetings
convened in 20191

and safety at each stage of employment whether new
and senior employees or group leaders and management.
Employees who are candidates for construction site
director or supervisor undergo Site Manager Safety
Training (SMST) to learn about on-site health and safety.
We also provide follow-up training thereafter to expand
knowledge about health and safety.
The IHI Group also cultivates trainers for the SST, CSST,
and SMST programs.

IHI Group Health and Safety Training System
Position

On-site Work
Employees

Training Hours (Estimate)
New Employees

Senior Employees

Section Managers

General Managers, etc.

New Employee
Training

SST-I Assistant Foreman Healthand Safety Training
SST-II Foreman Health and
Safety Training, etc.

New Manager
Training

Managers
Follow-up Training,
etc.

CSST Senior Employee Training
CourseCSST Group Leader Training
CourseBasic CSSTManager Training
CourseCSST Business
Area President/
General Manager
Training Course

Basic SMST Training Course(Newly appointed foremen/inspectors)
Group-wide SMST Follow-up
Training Course(Basic training course taken thefollowing year)
SMST Follow-up Training Course(Once every one to three years)

Basic SMST Manager Training Course

Design,Development,
etc.
Construction

Members

President of Resources, Energy &Environment Business Area,
President of Industrial Systems &General-Purpose Machinery
Business Area, General Manager ofTechnology & Intelligence
Integration, General Manager of
Human Resources Division and otherpersons nominated by thechairperson

The IHI Group provides education on health and safety toeveryone from new employees to management in thestratified training program.
On-site work employees undergo Supervisor Safety
Training (SST) to learn about health and safety when
promoted to assistant foreman or foreman.
Design and development employees on construction
sites undergo Construction Safety Standard Training(CSST) to learn the ins and outs of construction healthDirector/supervisor(On-site)

New Employee
Training
CSST New
Employee Training
CourseNote: SST stands for Supervisor Safety Training.
CSST stands for Construction Safety Standard Training.
SMST stands for Site Manager Safety Training.

052

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Labor Practice (Occupational Health and Safety)
Training Participants(Unit: People, Scope: IHI and affiliated companies in Japan)
Item
Foreman training

Targets and Results
Occupational Health and Safety Targets

Item

2016

2017

2018

2019

30

33

26

48

Item

Targets

Target Year

Under 1.1

2019

Under 0.2

2019

Assistant foreman
training

69

85

83

103

Total injuries
frequency rate

Technical leader
training

–

–

33

165

Lost time injuries
frequency rate

Basic Site Manager
Safety Training (SMST)
Course (Graduates)

215

246

260

169

Supervisor Safety
Training (SST) and
SMST Training Course(Graduates)

Total Injuries Frequency Rate*3
(Unit: Incidents, Scope: IHI and 30 affiliated companies)

25

13

31

18

Health Management 

Total injuries
frequency rate

2016

2017

2018

2019

Participation rate of
medical check-ups

70%

69%

70%

71%

Participation rate ofstress checks

90%

Absenteeism(Employees who takethree or more monthsof leave)

0.9%

Presenteeism(Employees withrestricted hours)

2.1%

Smoking rate

29%

0.9%

0.9%

28%

1.7%
28%

2019

1.31

1.64

1.11

1.49

94%

1.0%

Item

2016

2017

2018

2019

Rate of occupational
diseases

–

–

0.165

0.165

*4 People suffering from occupational diseases per million working
hours

Occupational Accidents*5
(Unit: Incidents (figure inside parentheses indicates fatal incidents),

Scope: IHI and 30 affiliated companies)
Item
Total

1.6%

2018

Rate of Occupational Diseases*4
(Unit: Incidents, Scope: IHI and 34 affiliated companies)

Item

96%

2017

*3 Fatalities or injuries caused by occupational accidents per million
working hours(Scope: IHI and 34 affiliated companies)

91%

2016

2016

2017

2018

2019

68(1)

87(1)

55(0)

71(0)

1.6%

Employees

41(0)

52(0)

28(0)

42(0)

27%

Temporaryemployees

0(0)

4(0)

4(0)

4(0)

Partners

27(1)

31(1)

23(0)

25(0)

Lost Time Injuries Frequency Rate*1
(Unit: Incidents, Scope: IHI and 30 affiliated companies)
Item

2016

2017

2018

2019

IHI Group Average

0.33

0.57

0.26

0.40

National average inmanufacturingindustry*2

1.15

1.02

1.20

1.20

*1 Fatalities or injuries caused by occupational accidents per million
working hours (excluding injuries with no time lost)*2 Scope: Business sites with at least 100 people (sample survey)*5 Fatalities caused by occupational accidents

053

Basic Information

Sustainability
Management

Labor Practice (Occupational Health and Safety)
Employee Union Membership Rate(Unit: %, Target: IHI and 6 consolidated subsidiaries)
Item

2016

2017

2018

2019

Employees union
membership rate

73

74

73

73

Number of Labor Complaints Received
(Unit: Reports, Scope: IHI)
Item

2016

2017

2018

2019

Number of Labor
Complaints
Received

0

0

0

0

Initiatives• Extensive Health and Safety Management• Health Management
The IHI Group believes building a working environment
where employees can work with both motivation andenthusiasm helps improve personal productivity andinvigorates the workplace. We strive for both physical andmental health management.
Our mental health education takes both reactive
approaches, such as detailed follow-up with individuals
suffering from mental illness, programs to help
employees return to work, and reintegration programs, aswell as active approaches, such as education to teachmental toughness to improve motivation andperformance. These educational programs aim to build anenthusiastic workplace for everyone from new
employees to senior management.
We also provide additional health measures to improve
lifestyle habits and prevent metabolic syndrome, smoking
and other such lifestyle illnesses.

• Health and Safety Management
The IHI Group is committed to eradicating occupational
accidents through Five Safety Principles that act as aGroup-wide code of conduct.
We assess risk at our works and construction sites to
identify and mitigate potential hazards through strictverifiable countermeasures. We conduct regular safety
training for all of our employees to eradicate occupational
accidents. We give support to outside contractors atworks and construction sites to improve health and safety
management in a cooperative effort to ensure safe
working environments.
We carry out these health and safety initiatives as part ofthe occupational health and safety management system.

• Addressing Labor Complaints
IHI quickly and fairly responds to labor complaints from
employees. We established a committee in accordancewith labor agreements for the purpose of realizing
harmonious working environments.

• Preventing the Spread of the Novel
Coronavirus (COVID-19)
P.34

Crisis Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

054

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Supply Chain Management
Policies
The IHI Group Procurement Policy guides procurement
activities around three main pillars: practicing fair andimpartial procurement, establishing mutually beneficial
partnerships, and responding to legal compliance andsocietal needs.
The procurement of materials or equipment necessary
for our corporate activities involves not only legal
compliance but also awareness about human rights, theenvironment and conflict minerals*. IHI must respond tothese societal needs. We fully educate directors, officers
and employees on procurement matters and promote ourbusiness partners to adhere to legal and social norms aswell as ensure human rights, proper labor conditions, andoccupational health and safety. Our Group also strongly
encourages everyone involved with procurement toconsider Quality, Cost and Delivery (QCD) whilestrengthening competitiveness, respecting theenvironment, and disclosing appropriate information.
The IHI Group used the IHI Group Procurement Policy as
reference to define the Basic Rules on Procurement for
IHI Group. These rules define a basic procurement
philosophy, fundamental knowledge base and businesscriteria for each department involved in procurement.
* Conflict minerals refer to minerals from conflict regions which
may inadvertently fund armed insurgents and fuel regional
disputes.

IHI Group Procurement Policy
Basic Policy
1. Fair and Impartial Procurement
We provide business opportunities in an open
manner to business partners from around theworld, and welcome working with creative andcompetitive business partners.
We also evaluate and select business partners in acomprehensive and fair manner based on factors
such as quality, price, delivery schedule,
technology and financial conditions.
2. Mutually Beneficial Partnership with Our Business
Partners
We regard our business partners as value creators,
and through seeking to realize optimal levels for
quality, price and delivery, together withprocurement reliability, we aim to establish
relationships of trust with our business partners
and bring about the mutual enhancement ofcompetitiveness and prosperity with them.
3. Approach to Compliance and Social Needs
We comply with the related laws that govern our
local and global businesses. In addition, we
promote procurement activities that prioritize
factors such as the environment, human rights,
labor conditions, occupational safety and health,and information management.

Requests to Our Business Partners
The IHI Group works on the following values topromote our business activities. We ask for the
co-operation and understanding of our business
partners with regard to the promotion of thesevalues(1) Compliance(2) Paying Attention to Human Rights, Labor
Conditions, and Occupational Safety and Health(3) Ensuring Optimal Quality, Cost and Delivery
Conditions(4) Enhancement of Competitiveness(5) Respect for the Environment(6) Information Disclosure055

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Supply Chain Management• Prohibiting Conflict Minerals
The IHI Group formulated an IHI Group Policy on Conflict
Minerals as part of the IHI Group Procurement Policy toprohibit all conflict minerals in procurement activities.
We will never procure raw materials, parts, or productsthat contain conflict minerals from the Democratic
Republic of the Congo and neighboring countries.
IHI shares this policy with our major business partners
and asks for their cooperation in disclosing information on
conflict minerals with our clients.
• IHI Group Policy on Conflict Minerals
In the Democratic Republic of the Congo and neighboring
countries, armed groups engaged in conflict havecommitted grave human rights violations and acts ofenvironmental destruction. This serious issue has been
the subject of worldwide attention. It is understood thatcertain minerals (namely, tin, tantalum, tungsten, gold),which produced in this regions fund these groups(hereinafter, “Conflict Minerals”).
IHI Group policy is to avoid procuring raw materials, partsand products that contain Conflict Minerals. Based on
this policy, IHI Group is moving forward with initiatives toavoid becoming complicit in the human rights violations
and environmental destruction that result from the armed
groups profiting from trade in Conflict Materials. We willcontinue to tackle this issue together with our business
partners.

Education/Awareness Building• Developing Global Procurement
Professionals

The IHI Group prioritizes training and oversight related to
relevant procurement laws to continually strengthen
compliance.
We hold annual professional procurement training with22 courses on 13 subjects for both procurement divisions
as well as departments with a need to understandsubcontracting and construction laws.
We divide our e-Learning program into curriculum for all
Group directors, officers and employees and curriculumfor procurement staff to teach the knowledge necessary
for day-to-day tasks from subcontracting and construction
laws to import declarations and proper subcontracting
systems.
Each IHI Group procurement division voluntarily reviews
and verifies subcontracting laws and import declarations
to ensure proper practices and to improve. Internal audits
also provide guidance on areas where we can do better.

The IHI Group is cultivating relationships with new
suppliers worldwide to build the best possible supply
chain as business expands globally. Internally, IHI focuseson nurturing global procurement staff. We train Group
employees in Japan in overseas procurement and develop
employees from overseas Group companies as local
procurement managers through a core talent program.
Overseas Procurement Network

Tokyo, Japan
London, England
New York, United States
Shanghai and Dalian, China
Seoul, Korea
New Delhi, India
Bangkok, Thailand
Singapore, Singapore
Kuala Lumpur, Malaysia
Ho Chi Minh City and Hanoi, Vietnam

Participants in Procurement Training (2019)(Unit: People, Scope: IHI and affiliated companies in Japan)
Item
Professional procurement training

2019
643

056

Basic Information

Supply Chain Management
Initiatives• Responding to Anti-social Forces and Anticorruption
The IHI Group contractually requires business partners toprohibit any and all relationships with anti-social forces,
commit no acts of bribery whether toward government
officials overseas prohibited by the Penal Code and Unfair
Competition Prevention Act or against the laws enacted
in each country. We ensure any business partner foundguilty of such acts cooperates in the reporting andinvestigation process.

• Commending Outstanding Suppliers
The IHI Group commends suppliers who have shownparticular excellence to further strengthen theseoutstanding partnerships. In 2019, we presented an
Appreciation Award to the following company.
•Beipiao Shimamura Machinery, Co. Ltd. (China)
Beipiao Shimamura Machinery has high-level casting
capabilities and conducts consistent production andquality management from the molds and materials to themachining and pressure tolerance testing. The IHI Groupconsistently receives high-quality casted parts primarily
for compressors, motors and presses.

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

057

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Citizenship
Approach

Targets and Results

The IHI Group strives to contribute to society based on the belief that corporate social
responsibility means living up to the expectations of society.
The Group Management Policy 2019 sets targets selected from the Sustainable
Development Goals (SDGs) for each business area. These targets define the material
issues for social contribution activities in each region where the IHI Group has businessand construction sites. We encourage every directors, officers and employees to seethemselves as a member of society and to proactively respond to social expectations
through these social contribution activities.

Dedicate approximately 1% of ordinary income to social contribution activities.
The IHI Group invested a total of ¥5.19 million—approximately 1.61% of ordinary
income—into 2019 social contribution activities.

Coexistence withlocal communities

Relevance to Business
Establishing and maintaining good
relationships with local communities isessential for smooth businessexpansion.

Development of
next-generation
professionals

The development of the nextgeneration of professionals in
manufacturing and support of researchin future science and technology fields
are essential to solidify the foundation
for coming industries, drive IHI brandrecognition, and guarantee business
continuity.

Environmental
protection

Support of activities that preserve theecosystem, measures to combat
extreme climate change, cultivation ofnatural bounties and protection of ourplanet are essential to sustainablebusiness and helps raise employee
awareness about environmental
issues.

Sustainable
Development Goals(SDGs)(Unit: Millions of Yen, Scope: IHI and consolidated subsidiaries)

Item

Breakdown by
Activity

Material Issues of Social Contribution Activities
Material Issues

Social Contribution Expenses

Breakdown by
Expenditure
Reference

2018

2019

Coexistence with local communities

502

382

Development of next-generation
professionals

56

104

Environmental protection

16

16

Other

61

17

Cash Investment

113

115

Time Investment

162

187

Goods Donations and Site Costs

360

217

Membership fees for local organization

10

13

Operating Costs

121

109

Activity Results
Material Issues(Scope: IHI and consolidated subsidiaries)

Indicators
Business interests*

Visitors to events

Social/environmental
interests*

Investments in local
communities

Development of
next-generation
professionals

Business interests*
Social/environmental
interests*

Participants in science(manufacturing)classes

Environmental
protection

Social/environmental
interests*

Environment
protection area

Coexistence withlocal communities

2018

2019

9,129

7,977

5.02 million
JPY

3.82 million
JPY

2,664

1,628

11,605m2

3,860,000m2*The above indicators for business and social/environmental interests are defined by RobecoSAM as follows:Business interests: Factors directly related to product development, brand improvement, humanresource development and other such business interests
Social/environmental interests: Factors linked to Sustainable Development Goals (SDGs) and othersocial/environmental interests058

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

Corporate Citizenship
Initiatives• Coexisting with Local Communities• Wheelchair Basketball EventsThe IHI Group has been supporting the Japan Wheelchair
Basketball Federation since 2015. We host events tointroduce wheelchair basketball throughout Japan as well
as social gatherings with players.
IHI held nine events in 2019. One such event held invited
Nagano players to the Tatsuno Civic Center in the Kamiina
district for an exhibition match and hands-on visitor
experience. This exciting event attracted about 250
people from neighboring communities and the Kamiina
IHI Group office.
• Tomioka Rocket Festival
IHI Aerospace has held the Tomioka Rocket Festival since1998. Everyone from employees to local citizen take partin the festivities.
Upwards of 3,000 visitors came to the 22nd Tomioka
Rocket Festival in 2019. Everyone who came had an
opportunity to experience the world of rockets first handfrom building and launching plastic bottle and model
rockets to touring an exhibition of products andtechnologies used in space. This festival even hosted
performances by the Gunma Symphony Orchestra andthe local mascot for all to enjoy. The Tomioka Rocket
Festival succeeded in bringing the IHI Group and the local
community even closer together.

• Bonds of Tohoku Festival
In 2019, we held the Bonds of Tohoku festival in theatrium of the IHI head office building in Toyosu to
spotlight the Tohoku area and help support revitalizationof the region after the Great East Japan Earthquake. We
welcomed nearly 3,000 visitors to the two-day event,including employees and their families as well as people
from the local community.
This festival introduced the industrial and tourist
development of each Tohoku prefecture while providing
booths selling local goods and introducing traditionalcustoms. There was even a buffet offering a feast of foodmade using ingredients from Tohoku.
We also took this chance to share the deep bonds
between the IHI Group and the Tohoku region. Everyone
who came said the Bonds of Tohoku festival was awonderful chance to feel and enjoy Tohoku.
• Disaster Support Volunteer Activities
Typhoon Hagibis devastated Nagano City in October
2019. 60 employees from IHI Aero Manufacturing locatednear Nagano volunteered their time every weekend foralmost four months to support the disaster recovery.
These volunteers helped the local community as it
struggled with many flooded homes as well as power
and water outages during the typhoon, and help restore
the apple orchards. In the future, the IHI Group willcontinue to support disaster recovery efforts together
with local communities.

• IHI Atrium Concert
IHI uses the atrium at its head office in Toyosu to host avariety of orchestral concerts. These concerts are enjoyedby a broad audience young and old.
We held a spring and fall concert in 2019. We welcomedabout 500 of our neighbors to each concert. The fallconcert was the 10th in the IHI Atrium Concert series.

059

Basic Information

Sustainability
Management

Corporate Citizenship• Development of Next-generation Professionals• Environmental Protection• Providing Science Lessons at Elementary and JuniorHigh Schools
The IHI Group teaches classes at elementary and juniorhigh schools in the hope of sparking interest to nurture
the next-generation of science professionals. We holdthese classes jointly with Ochanomizu University througha curriculum that shares how science and technology
help society to evoke interest in the sciences andencourage science studies in school.
In 2019, the classes focused on jet engines as part of theeducational curriculum for five elementary and junior highschools near the head office. All of the students learned
about the construction and principles through a video
before conducting their own experiments. The survey
after the class showed higher student interest in thesciences.

• Aioi Works Initiatives
IHI Aioi Works is surrounded by a rich natural environment
from the mountain forests to Aioi Bay. In the lush green
grounds that make up 70% of our land area, we haveverified the potential for biodiversity through various
efforts up until now, including plant and animal surveys
and green infrastructure.
In 2019, we conducted surveys from detailed topographyof the mountain forest on our grounds to plant
distribution. As a result, IHI has been able to digitalizes
and centrally manage this information as cartographic
information to sustain and improve the naturalenvironment around Aioi Works.
In the future, we will use this data to create specificconservation plans and protect diverse and plentiful
forest resources.

• Toyosu Mirai Project
The Toyosu Mirai Project launched in 2019 as acooperative network of citizens, companies, anduniversities in Toyosu to build a bright future for the
Toyosu children.
Total of four program were held by SCSK Corporation,
Shibaura Institute of Technology, and IHI, which all base inToyosu, with the participation of about 100 children. The
program brought a deeper interest in science andtechnology through constant creation andexperimentation. We will continue to hold and expand
this program from 2020.

Principled Corporate
Management

Materialize an
MaterializeanAffluent Society
Affluent
Society

ReduceEnvironmental Impact

Performance
Objectives

060

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

ReduceEnvironmental Impact
Environmental Management

062

Reduction of the Environmental Impact of Products
and Services

065

Climate Change

067

Circular Economy

072

Environmental Protection

074

061

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Environmental Management
Policies
The IHI Group aims to create the new value pursued by asustainable society in its Group Management Policies
2019. We continue to work to reduce the environmental
impact on society at large in an effort to combat climatechange and address other social issues. The GroupManagement Policies further clarify the ideal direction ofenvironmental management to cultivate new business
opportunities and pioneer innovative business models.
Our Group will continue to comply with all environmental
laws and regulations as well as endeavor to reduce theenvironmental impact of our plants and offices in local
regions. We will also propose low-carbon and carbonneutral businesses using CO2 emissions throughout theentire life cycle of our products and services as a core
metric.

IHI Group Basic Environmental Policy
Article 1. Establishment of Environmental
Management System
To ensure continuous improvement ofenvironmental management, the IHI Groupestablishes an environmental management
system, sets specific objectives and executes anaction and a performance evaluation.
Article 2. Complying with Environmental Laws
and Regulations
The IHI Group complies with environmentalrelated laws and regulations/agreements,
policies/plans in related industries, and strives tostipulate and apply independent management
standards to enhance environmental
management.
Article 3. Provision of Environmentally-friendly
Products
The IHI Group provides the society with the
products and services that contribute to reduce
environmental burdens.
Article 4. R eduction in Environmental Burdens in
Business Activities
The IHI Group strives to preserve environmentand reduce the environmental burdens in its all
business activities.
Article 5. Environmental Education
The IHI Group, through environmental education,raises awareness of all people engaging inoperations, including officers, employees, andtemporary staff of IHI Group companies, thereby
they are able to act having concern withenvironmental problems on their own.

Article 6. Disclosure of Information
The IHI Group actively participates in the society,disclosure information, and communicates tocommune with local communities and preserve
regional environment.

062

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Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Environmental Management
Management Framework• Environment Committee
The IHI Group established the Environment Committee
to take the lead on environmental activities throughout
the entire Group. We promote and expand Environment
Committee decisions at all Environmental Liaison Groups
in each business area and business unit as well as withGroup companies worldwide.
Business areas and business units strive to reduce theirenvironmental impact through environmental capital
expenditures, legal compliance, energy saving, and waste
reductions to mitigate environmental risk, which is one
Group-wide risk management initiative. We draft actionplans at the beginning of the year in line with each ofthese material subjects and track progress as well as
provide support using a PDCA cycle.
The IHI Group strengthened the Environment Committee
in 2019 by separating reductions to its environmental
impact into offensive strategies related to products andservices and defensive strategies related to plants,
offices and other business establishments. The Corporate
Planning Division leads all offensives strategies while theEnvironment Group of the Administration Division takes
charge of all defensive strategies.
* Business Units are section under the umbrella of each businesssegment affiliated with Business Area.

this EMS certification. The system selects the review
board most suitable for the business activities of eachenvironmental management center to evaluate andcertify each EMS.
Environmental Management Systems
Chief Operating Officer (COO)
Management Committee
Environment Committee
Business Areas andBusiness Units

Environmental Management Environmental Management
Officers Liaison Group
Officers Liaison Group

Business Areas

Headquarters
Representative’s Offices

Chairperson

Officer in charge of
Administration

Secretariat

Environmental Group,
Administration Division andCorporate Planning Division

Members

General environmental officersof business areas, headquarters
representative’s offices, andHead Office divisions nominatedby the Committee chairperson

Meetings
convened in 20194

• ISO 14001 Environmental Management
SystemThe IHI Group has put in place Environmental
Management Systems (EMS) at primary production
plants and other environmental management centers tomanage environmental efforts with a PDCA cycle. Eachof these environmental management centers is acquiring
the ISO 14001 certification to ensure each EMS satisfies
international standards for environmental management.
To date, 75% of IHI Group environmental management
centers with a certain level of production have acquired

Headquarters
Representative’s Offices• ISO 14001 Internal and External Audits
The IHI Group always strives to enhance the level ofenvironmental management through regular internal andexternal audits of each environmental management
center. These audits evaluate the fitness andeffectiveness of each EMS in accordance with ISO 14001
standards.
External audits conducted in 2019 did not finddeficiencies at any of the ISO 14001-certified
environmental management centers and affirmed each
EMS complied with the all of the ISO 14001
requirements.

• Collecting Environmental Data
The IHI Group collects environmental data related to theenvironmental management at all consolidated Group
companies.
Each Group company appoints both a generalenvironmental officer and environmental management
officer to oversee the decision making and expansion ofenvironmental activities at their organization. As thesmallest unit of environmental activities at each company,
the environmental management centers appoint
environmental managers to take charge of particularenvironmental activities.
The Group companies encompassed by environmental
management engage in a variety of different businesses.
These entities include companies with production plants,
companies overseeing engineering, and on-site
construction work as well as companies focused on only
administration. Each environmental management center
verifies the flow of energy, water and other resources
and builds systems to efficiently collect environmental
data.
The environmental data for 2019 is current as of August
31, 2020.
ISO 14001 Certification Rate
(Scope: IHI and consolidated subsidiaries)
Item
ISO 14001 certification rate

2019
75%

063

Sustainability
Management

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Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Environmental Management
Education/Awareness Building

Targets• Providing Environmental Education

The IHI Group drafts environmental action plans every
three years and strives to engage in comprehensive
environmental initiatives.
The IHI Group Environmental Action Plan 2019 creates
three major pillars for environmental initiatives from 2019
to 2021: reduce the environmental impact of products
and services, reduce the environmental impact of plants,
offices, and other business establishments, and cultivate
human resources to promote environmental
management.

The IHI Group environmental education includes Groupwide education programs and training for everyone incharge of environmental management at eachenvironmental management center. The Head Officeleads and monitors these training and education
programs.
Group-wide education provides sustainability seminars
and offers e-Learning about combat climate change,
which is one of the most pressing issues. The Basics of a
Manufacturing Company (Environment) stratified training
program for employees up to their third year provides
e-Learning that reaffirms the IHI Group approach to global
environmental issues.
We also conduct training on energy efficiency and waste
management led by experts from outside the company
as part of education at environmental management
centers. This training enhances the expert knowledge of
qualified persons and person in charge of management
aiming to put efficient environmental activities into
practice through uncompromising legal compliance.
The IHI Group has also designated June as environmentmonth. Our employees participate in an environmental
quiz to heighten environmental awareness as well as
education founded in EMS at each environmental
management center.
Environmental Education and Training Participants (Unit: People; Scope: IHI Corporation and affiliated companies in Japan)
Eligible Participants
Employees
Environmental
Officers

Curriculum

2019

e-Learning*1

18,447

Environmental Quiz

5,820Group Energy
Efficiency Training*2

36*1 e-Learning participation rate is 83.4%*2 The number of participants excluding the secretariat andinstructors

IHI Group Environmental Action Plan 2019

Results

Action Plans
Reduce the environmental
impact of products andservices

2016

2017

2018

2019

Investments

864

713

696

652

Expenditures

73

79

143

78

Reduce the CO2 emissions of
products and services
No major violation of environmental
laws/regulations and environmental
accidents
Reduce CO2 emissions intensity by atleast 3% by 2021 compared to 2018

Reduce theenvironmental impact
in plants, offices, etc.

Reduce energy consumption
intensity by at least 3% by 2021
compared to 2018
Generate less waste than the amount
generated in 2018 in 2019 and 2021

Costs to Reduce the IHI Environmental Impact(Unit: Millions of yen; Scope: IHI Corporation)
Item

Targets

Use less water withdrawal* than theamount used in 2018 in 2019 and 2021
Cultivate human resources
to promote environmental
management

Develop professionals who can
carry out environmental
management* Changed from amount of water consumption to amount of water
withdrawal since 2019.

Environment-related Capital Investments

(Unit: Millions of yen, Scope: Non-consolidated IHI plants and offices)

Category

Amountinvested*1

Cost effect*2

Main items

Energy-saving/climate change
measures200

17Adoption of independent
air-conditioning systems
at plants, etc.

Environmental
risk measures445–

Renewal of aged
equipment, etc.

Total

645

17

Environmental
impact mitigation*3

Risk mitigation*3

Energyconsumption andCO2 emission
reductions

No major violationof environmental
laws/regulations orenvironmental
accident*1 Environmental-related capital investments for non-consolidated IHI plants and offices made in 2019
*2 Reductions in energy purchasing costs estimated over a year
*3 IHI Corporation will consider additional approaches and examine the effectiveness in the future064

Basic Information

Sustainability
Management

Principled Corporate
Management

Reduction of the Environmental Impact of Products and Services
Initiatives• Environmentally Friendly Products
Certification Program
The IHI Group uses an environmentally-friendly products
certification scheme to promote reductions in theenvironmental impact of its products and services.
This system certifies products and services as having
outstanding environmental performance. Such products
and services help protect the environment and reduce
our environmental impact.
Environmentally-friendly products and services also
contribute to reductions of the environmental impact onsociety at large, which in turn helps protect theenvironment.
• Certification Process
The Group-wide Environmental Committee evaluates theenvironmental performance of products and services
based on IHI guidelines. We only certify products andservices with outstanding environmental performance asenvironmentally friendly. This review process assesses
whether products and services incorporate environmental
performance measures throughout every stage of the life
cycle.

Propose certification planfor products and services

Evaluate environmental impact
of products and services

Energy efficiency

Reduced
GHG emissions

Enhance energy efficiency,
recover and use exhaust energy,
and level the energy load

Reduce, absorb, capture, store,
and break down greenhouse gas
emissions, generate renewableenergy, and reduce fluorocarbons

Reduce and recycle natural
resources necessary during
manufacture, use andResource saving maintenance
Reduce waste, air, water, soil,
noise, vibration, groundsubsidence, and odor pollution as
Reducedwell as monitor and measureenvironmental
environmental protection datarisks
Evaluate biomass resources andadapt installations to each location
Biodiversity
protection

Assessment and certification(IHI Environment Committee)

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

065

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Reduction of the Environmental Impact of Products and Services
Results

Certified Products
Evaluation Items• Environmentally Friendly Products
Products and services certified as environmentallyfriendly products are listed in the table to the right.
The website below also introduces both certified andnon-certified IHI products and services.
web

IHI-WORLD

Products and services

Energyefficiency

ReducedGHG
emissions

Resource
SavingReduced
Biodiversity
environmental
Protection
risks

●

Intake facility (Selective water withdrawal facility)
LRT (Light Rail Transit)

●

●

●

●

Automated People Movers

●

●

●

●

Active Noise Control System●

Silencer/Enclosure●

Noise/Vibration Consultation●

Diesel Engines●

Life Cycle Administrator (LC-A)

●

●

●

●

●

TF-Detector

●

●

●

MF-Detector

●

●

●

Energy-saving Parking System NPC24H Tachikawa
Midori-cho No.2 Parking Lot●

IHI IC Reactor

●

●

●

●

●

●

●

●

ORC Power Generator HEAT INNOVATOR®

LNG Smart Satellite●●

Industrial photovoltaic power system●

Technology for cleaning, chipping and cutting surfaces
without using water

●

●

●

●

Cycle Management Systems●

Turbochargers for Vehicles●●

ORC Power Generator Heat Recovery HR Series
IWV-34C Vacuum Degreaser●

Toyosu Foresia Environmentally Friendly Building

●

●

●

●

●

●

●
●

●

●

066

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Climate Change
ApproachManagement Framework

Climate change has an enormous social and economic
impact and is a vital social issue for companies to addressin order to realize sustainability.
The IHI Group sees climate change as one importantmanagement issue and is doing everything possible tocombat it.
Our products and services strive to reduce CO2 emissions
throughout the entire life cycle.
We monitor the environmental impact from businessactivities at our plants, offices and other businessestablishments to help us reduce CO2 emissions.
In May 2019, the IHI Group became a signatory to the
Task Force on Climate-related Financial Disclosures(TCFD) by resolution of the Board of Directors. This
framework plays a role as a tool to formulate strategies
able to strengthen risk management and cultivate
business opportunities.

The IHI Group engages in environmental initiatives that
include measures to combat climate change centered
upon the Environment Committee.
P.62

Environmental Management

The IHI Group has put in place a TCFD Task Force directly
under the President to fully utilize the framework as a
strategic planning tool for proper disclosure of information
as a TCFD signatory.
The TCFD Task Force is made up of members from thefour business areas, Technology & Intelligence Integration,and the Corporate Business Development & Solution
Headquarters with the Corporate Planning Division acting
as the Secretariat.
The IHI Group also conducts uncompromising risk
management to fully and rapidly respond to any risks
found by carefully identifying changes around business
operations. We are integrating TCFD Task Force activities
and the risk management systems to create a PDCA
cycle for climate change risks.
P.32

Risk Management

TCFD Disclosure
The disclosure items on the page below arerecommended by TCFD.

• Governancep.62-64 Environmental Management
p.67 Climate Change• Strategy
p.69-71 Climate Change• Risk Managementp.32-34 Risk Management
p.67 Climate Change• Metrics and Targets
p.68 Climate Change

067

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Climate Change
Targets and Results
The IHI Group aims to reduce CO2 emissions from plants,
offices and other business establishments in line with
the Japanese government's policy target of a 26%
reduction in 2030 (compared to 2013 levels) and an 80%
reduction by 2050.
The IHI Group Environmental Action Plan 2019, a threeyear plan for fiscal years 2019 to 2021, uses CO2
emissions intensity and energy consumption intensity as
indicators. The targets and results are indicated in thetable on the right.

Action Plans

Targets

KPI

2018 Results(Base Year)2019 Results

Reduceenvironmental
impact inplants, offices,
etc.

Reduce CO2 emissions intensity atleast 3% by 2021 compared to 2018

CO2 emissions intensity(t-CO2/100 million yen)

22.2

18.3

Reduce energy intensity at least 3%
by 2021 compared to 2018

Energy consumption
intensity(TJ/10 billion yen)

39.3

17.8



(Scope: IHI and consolidated subsidiaries)

Item
CO2

Energy

2016

2017

2018

2019

CO2 emissions (t-CO2)

316,914330,162

329,602254,227

Scope 1 (t-CO2)––

80,03264,724

Scope 2 (market-based) (t-CO2)––

249,570

189,503

CO2 emissions intensity (t-CO2/100 million yen)

21.3

20.8

22.2

18.3

Energy consumption* (TJ)

6,015

6,087

5,828

2,468

Fuel consumption (TJ)

–

–

–

1,044

Electricity consumption (TJ)

–

–

–

1,398

Steam consumption (TJ)

–

–

–

0

Renewable energy used (TJ)

–

–

–

26

40.5

38.3

39.3

17.8

Energy consumption intensity (TJ/10 billion yen)
* Changed the method of calculating energy consumption since 2019.

Initiatives• Reducing CO2 Emissions from Business
Activities
The IHI Group makes every effort to reduce CO2 emissions
from plants, offices and other business establishments
by both actively pursuing energy-efficient businesspractices and promoting the use of low-carbon energy.
Our energy-efficient initiatives not only enhance
operations but also make the necessary capital
investments. We have put in place energy management
standards to drive these operational improvements.

These standards aim to provide ideal operation conditions
and criteria to review operational management. Thesestandards also become a knowledge base to conduct
training on energy efficiency through guest experts in aneffort to heighten the management quality of the person
in charge.
Our capital investments systematically renew aged
equipment with energy-efficient equipment. Anotheraspect important to reducing CO2 emissions is shipping
and transport. The IHI Group strives to promote modal
shifts through greater load efficiency and active use ofmarine vessels.
We have added carbon intensity as a new evaluation
indicator to further promote low-carbon initiatives,
including a transition to fuels with a low CO2 emission
coefficient and the adoption of renewable energy.

068

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Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Climate Change• Climate Change Risks and Opportunities

Scenario Analysis Process
Step 1 Set independent scenarios.
The IHI Corporation referred to external
scenarios* to set independent Group scenarios
in anticipation of the world in 2050.
(1) High-transition risk scenario(2) High-physical risk scenario
Step 2 Identify risks and opportunities.

Step 3 Evaluate the business impact.

Step 4 Formulate countermeasures.
The IHI Corporation formulates measures to respondto these risks and opportunities to foster resilientbusinesses.
*External reference scenarios:
A carbon-neutral world
IPCC RCP 2.6, IEA 2DS Scenario, etc.
A world greatly impacted by climate change
IPCC RCP 8.5, etc.

Small

The IHI Corporation assigns point values forthe potential of occurrence and scale of impact
for each risk and opportunity identified in Step
2 The intersection between both defines theimpact and estimates the influence the risks
and opportunities have on our businesses.

Transition Risk

The IHI Corporation identifies risk andopportunities for the two scenarios set in Step 1

IHI Group scenarios:(1) High-transition risk scenario
This scenario presents (1) a carbon-neutral world
where society at large shifts to mitigate climatechange to stop all greenhouse gas emissions.
(2) High-physical risk scenario
This scenario presents (2) a world greatly impacted byclimate change that needs to adapt to the physicalimpact to directly confront drastic devastation by
natural disasters.
Large• TCFD Initiatives
The IHI Group set simple scenario analyses of fourbusiness domains with a significantly large impact on
climate change: the energy business, vehicle
turbocharger business, bridge and water gate business,and the civil aero engine business.
The first step set (1) a carbon-neutral world as the highest
transition risk and (2) a world greatly impacted by climatechange as the highest physical risk in our own
independent scenarios drafted with reference to external
scenarios drafted by the International Energy Agency(IEA) and Intergovernmental Panel on Climate Change(IPCC). The second step identified risks and opportunities
for all four business domains. The third step assessed theimpact each business has. The fourth and last stepdrafted countermeasures according to our findings.
In the future, we will expand the scope of businesses
included in these scenario analyses, review our scenarios,
and assess the financial impact of climate change. In thisway, the IHI Group will enhance its ability to leverage
scenario analyses in business strategy.
The IHI Group will proactively incorporate the concepts
pursued by TCFD signatories in management policies andbusiness strategies. These policies and strategies willcontribute to the development of a sustainable corporategroup and society at large.

(1) A carbon-neutralworld

The harshest world
A combinationof (1) and (2)A world withminimal risk

(2) A world greatly
impacted byclimate change

Small

Physical Risk

LargeCountermeasures set to address the two extreme worlds
anticipated by these IHI scenarios enhance the resilienceof IHI Group businesses against future risks.
The IHI Group can also reduce risks against the harshest
world facing both these scenarios at the same time byintegrating the countermeasures for each.

069

Sustainability
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Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Climate Change
The IHI Corporation divides the risks and opportunities identified for each of the four business domains and the countermeasures into two categories: 1. risks, opportunities, andcountermeasures specific to each business and 2. risks, opportunities, and countermeasures shared across all businesses.
Risks, opportunities, and countermeasures in 1. are shown in the table below while those in 2. are shown in the table on the next page.
1. Main risks, opportunities, and countermeasures specific to each business (four main business domains)
Energy business

Vehicle turbocharger business

Bridge and water gate business

Civil aero engine business(1) Risks, opportunities and main countermeasures in a carbon-neutral world
Risks

•

Opportunities

Main
Countermeasures•

Declining demand for large fossil fuelpower generation equipment•

Declining demand for combustion engine
vehicles unable to address carbon-neutral
requirements and a falling demand forexisting turbochargers••

Increasing demand for fuel conversion,
carbon capture and storage (CCUS) andother decarbonization technologies• Increasing demand for regulated power
supplies, storage energy, and Power-to-X
to provide a stable energy supply as
renewable energy becomes the standard•

Potential to secure market
competitiveness and leverage an increasein demand for turbochargers by being
first to market with new turbocharger
products (electric products in addition toexisting models) for carbon-neutralelectric vehicles (PHEV, HEV, FCV, etc.)•

Rapidly deploy carbon-neutral
technologies to society• Promote technological development tostabilize the energy supply• Expand the life cycle business throughremote monitoring and other Internet ofThings (IoT) technologies•

Rapid development andcommercialization of turbochargers forelectric vehicles that comply with carbonneutral requirement trends•

Increasing procurement costs (carbon
tax, etc.) for materials with high CO2emissions (concrete, steel, etc.)•

Declining demand for aircrafts due tocarbon-neutral requirements andstandardization of alternative high-speedmeans of transportation

Increasing demand for roads (bridges andtunnels) to provide a more efficienttransportation network• Increasing demand for railway
construction due to expansion of railway
systems overseas•

Increasing demand for the developmentof aircraft engines supporting carbonneutral requirements and opportunities
raise due to electrification of engines andutilization of advanced material
technologies.

Reduce construction schedules and laborcosts by labor-saving, remoteization, andimproving construction methods throughpromoting digital transformation (DX)•

Early commercialization of electricengines and advanced technologies suchas advanced composites.

•

Suspension of production due todisrupted supply chains caused byfrequent severe weather(2) Risks, opportunities and main countermeasures in a world greatly impacted by climate change
Risks

•

Opportunities•

Main
Countermeasures•

Extreme delays due to on-site
construction stoppages or disasters
caused by frequent severe weather•

Suspension of production due todisrupted supply chains caused byfrequent severe weather•

Extreme delays due to on-site
construction stoppages or disasters
caused by frequent severe weather

Contributing in early recovery ofequipment damaged in severe weather• Increasing demand for digitaltechnologies to promote labor saving andremote operation•

No opportunities unique to our business•

Increasing demand to build robust
national infrastructure• Contributing in early recovery of
infrastructure damaged in severe weather•

No opportunities unique to our business

Expand the life cycle business throughremote monitoring and other Internet ofThings (IoT) technologies•

Strengthen supply chains•

Expand business beyond lifecycle
business with wider perspective toinclude disaster prevention business• Create technologies and systems that
contribute to maintenance, disasterprevention, disaster mitigation, and quick
recovery of infrastructure.

•

Strengthen supply chains070

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Climate Change
2. Main risks and countermeasures shared across all businesses(1) Transition Risks and Countermeasures for a Carbon-neutral World
Category

Main Topics

Main Countermeasures and transitioning to Opportunities

Policies, Laws andRegulations

Introduction of carbon taxes, stronger industrial waste regulations, raisingcosts due to the adoption of renewable energy and energy-efficientequipment, etc.

Reduce costs in business activities through efficient production anddistribution as well as the proper management of energy consumption

Technologies

Rising costs due to research to realize carbon-neutral products andservices, failed technological development, etc.

Concentrate investments in technological development while staying
acutely aware of policies, technologies, markets, and other social trends

Markets

Declining demand for products and services with high CO2 emissions, etc.

Actively draft and promote business plans that always anticipate multiple
business scenarios to adapt to dramatic changes in market structures

Reputation

Lost opportunities due to poor evaluations of our response to climatechange, declining social credibility, etc.

Disseminate easy-to-understand information about products and services
that can help both mitigate and adapt to climate change(2) Physical Risks and Countermeasures in a World Greatly Impacted by Climate Change
Category

Main Topics

Main Countermeasures

Acute/Chronic

Ceased business activities due to damaged offices and plants caused bytyphoons, floods, or other natural disasters, etc.

Incorporate the response to climate change into the business continuity
plans of plants and offices to ensure the safety of officers and employees
and strengthen the supply chain

071

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Circular Economy
Approach
The IHI Group properly manages waste and water
resources and strives to enhance resource efficiency andreduce the environmental impact to realize a sustainable
society.
We advocate the reduction, reuse, and recycling (3Rs) ofwaste and properly manage and dispose of any waste
produced by each environmental management center.
Our water resource initiatives carefully manage water use
and work to prevent any pollutants from reaching water
resources through a deliberate water supply from stablewater resources and proper equipment maintenance.
The IHI Group has laid out chemical substance initiatives
in the Basic Policy on Chemicals Information
Management. We have identified prohibited andcontrolled substances regulated by both legal andcustomer requirements in each region and country where
our products and services are available. Our supply chain
also pinpoints and properly manages the chemical
substances contained in products for the purpose ofminimizing the impact IHI Group products and services
have on human health and the environment.

Management Framework
The IHI Group deliberates and decides on the approachand important matters of circular resources through theEnvironment Committee, a Group-wide body chaired by
the officer in charge of administration.
P.63

Environmental Management

Targets and Results
Action Plans
Reduce theenvironmental
impact inplants, offices,
etc.

KPI

2018 Results(Base Year)2019 Results

Waste generated(ton)

29,01027,564

Water
withdrawal*(1000 m3)

4,182

4,251

Targets
Generate less waste than the amount
generated in 2018 in 2019 and 2021
Use less water withdrawal* than the amountused in 2018 in 2019 and 2021

* Changed from amount of water consumption to amount of water withdrawal since 2019.



(Scope: IHI and consolidated subsidiaries)

Waste

Item

2016

2017

2018

2019

Waste generated (ton)30,531

28,69129,01027,564

Toxic waste generated*1 (ton)

–

–

–

164

Amount recycled (ton)

–

–

–

61,799Water withdrawal (1,000m3)

4,169

3,776

4,182

4,251

Public water (1,000m3)

–

–

–

750

Industrial water (1,000m3)

–

–

–

868

Groundwater (1,000m3)

–

–

–

1,948

Rainwater, rivers, lakes, etc. (1,000m3)

–

–

–

685

*2

Water

*1 Total of specified hazardous wastes and infectious wastes within specially-controlled industrial wastes*2 Waste turned in to valuable resources072

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Circular Economy
Initiatives• WasteThe IHI Group strives to reduce waste by improving
production yield at plants as well as sorting andrecovering resources from waste.
To ensure all waste is disposed of properly, our waste
management initiatives also review collection,transportation, and waste disposal contracts, verify final
disposal through digital manifests, and confirm
circumstances on-site at intermediate and final waste
disposal sites.

• Water Resources• Chemical Substances

The IHI Group creates deliberate plans for the use of
public water, industrial water, river water, groundwater,
and water from other stable resources at our plants,
offices and other business establishments. We also
monitor and manage the amount of water used fromeach water resource by these sites. Our maintenanceand renewal plans strive to keep underground piping andwaste water treatment systems up to date in order toprevent soil contamination caused by leak of waste wateror polluting public waters caused by leak of pollutants.
In 2019, the IHI Corporation audited the water usage
management progress and water risks at 13 different
sites.
Water risks in this report refer to risks of waste waterfrom our plants, offices and other businessestablishments contaminating public waters. These audits
verified proper water management by visiting each site,
interviewing the people in charge and conducting physicalon-site inspections. We also share the findings of theseaudits to raise awareness about water risks. In the future,
the IHI Group plans to audit whether plants which did notundergo on-site audits in 2019 present any risk to public
waters.

The IHI Group strictly complies with every law andregulation controlling the chemical substances containedin products. We aggregate data about the chemical
substances contained in products throughout the supply
chain and confirm whether use of any of these chemicals
is prohibited. The IHI Group is also furthering a system toprovide this same data to customers. Regulations tocontrol the chemical substances contained in products
are becoming more stringent than ever not only in the EU
but also North America and Asia. Our Group pays
extremely close attention and responds accordingly toregulations that apply to each product as one business
risk.

073

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

Environmental Protection
ApproachManagement Framework• Compliance with Environmental Laws andRegulations

The IHI Group has set compliance to environmental laws
and regulations and the prevention of environmental
accidents as the highest priorities of environmental
activities in business. We have also set the reduction of
the environmental impact from our business activities asa priority subject in our environmental targets designatedfor each Group site. We emphasize cooperation with thelocal communities in each region where IHI does
business to advance environmental conservation
activities according to the unique needs of each. These
efforts include agreements to prevent pollution with local
government agencies and residents.
Many of our offices, plants and other businessestablishments are located near water sources.
Therefore, initiatives to prevent any pollutants fromreaching these water sources are imperative. Measuresand proper disposal to prevent soil contamination fromoil, chemical and other leakage used at offices, plants,
and other business establishments are also vital.
The IHI Group is building an environmental management
system to sustain and manage these activities. We
constantly enhance environmental activities throughperiodic internal audits, environmental patrols, and thirdparty evaluations.

The IHI Group deliberates and decides on the approachand important matters of environmental conservation
through the Environment Committee, a Group-wide bodychaired by the officer in charge of administration. Eachoffice, plant and business establishment has set up anenvironment committee to draft policies tailored to theneeds of each region based on Group-wide policy.

The IHI Group properly investigates any environmental
incident that occurs on a Group site and evaluates theseverity and underlying factors to reduce environmental
accidents and legal violations as well as to prevent
recurrence.
In 2019, our Group had no major environmental incidents
or legal violations.

P.63

Environmental Management

Targets and Results
Action Plans

Targets

Reduce theenvironmental impact
in plants, offices, etc.

No major violationof environmental
laws/regulations
and environmental
accidents

2019
Results0(Unit: Incidents, IHI and consolidated subsidiaries)

Item

2016

2017

2018

2019

Significant
environmental accidents

0

0

0

0

Major violation ofenvironmental laws/
regulations

0

0

0

0

No. of cases IHI paidfines, penalties, etc.

0

0

0

0

074

Basic Information

Sustainability
Management

Environmental Protection
Initiatives• Preventing Water Pollution
The IHI Group monitors the quality of water discharged
from offices, plants and other business establishments
to sustain the water quality of oceans, rivers, and otherpublic waters in accordance with waste water standards.
We must not only maintain wastewater treatment
facilities but also regularly renew aged equipment,
devices, meters and other instruments.
The IHI Group also prioritizes measures to prevent leaks
from unseen underground pipes as a key issue. Our otherinitiatives include measurements of the amount of waterused in specific areas, creation of underground piping
blueprints, and periodic replacement of underground
piping.

• Preventing Soil Contamination
The IHI Group identified specific areas at offices, plants
and other business establishments that use hazardous
substances and other chemicals. We strive to prevent
leaks of chemical substances by establishing operational
procedures and periodic patrols. We manage 68 old
factory sites and production bases via a database
compiling survey results for the usage history of specificharmful substances* and oils. This survey data also acts
as a starting point for initial reviews when restructuring
plant operations.
*Harmful chemical substances refers to lead, hexavalent chromium,mercury and other substances listed in Article 2 of the Japan Soil
Contamination Countermeasures Act• Hazardous PCB Waste
The IHI Group is furthering its response to properly
dispose of hazardous PCB waste by organizing a
specialized team led by the Head Office.
As of March 31, 2020, we have successfully disposed of
99.8% of electrical equipment containing a highconcentration of PCBs and 95.6% with a lowconcentration of PCBs. However, the IHI Group currently
holds a large number of fluorescent lamps waiting for
disposal. To date, we have successfully disposed of
45.7%.

• Chemical Resources
The IHI Group identifies and manages emissions ofchemicals regulated by the PRTR Law into the air, public
waters, soil, sewers and waste. We are also suppressing
emissions of Volatile Organic Compounds (VOC) into theatmosphere in accordance with the Voluntary Action Planfor Establishing a Sound Material-Cycle Society by theJapan Society of Industrial Machinery Manufacturers.

• Biodiversity
The IHI Group strives to recover and preserve thesurrounding environment through environmental
protection activities driven by cooperation between
offices, plants and other business establishments andlocal communities. We also have set an environmentmonth for officer and employee enlightenment to raiseawareness about biodiversity conservation.
P.60

Environmental Protection

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact
Environmental
ImpactPerformance
Objectives

075

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Performance
Objectives
Objectives

Performance Objectives
Non-financial Summary

077

076

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Performance
Objectives
Objectives

077

Non-financial Summary
Material issues

Theme

Index

Scope of data

Results
2016

2017

2018

2019

Governance – Principled Corporate Management –Corporate governanceCorporate
governance

Average attendance
rate of outside
directors
Average attendance
rate of outside Audit &Supervisory
Boardmembers
Number of law
violations / Number of
guidance cases

Expenditure toorganizations

Compliance

Legal compliance

Number of Compliance
Hotline reports

Number of compliancetraining participants

Risk management

Intellectual
Patents held by region
property protection

Information security

Information
security measures

Board of Directors meetings (%)

IHI

96.2

95.3

98.6

98.1

Board of Directors meetings (%)

IHI

92.3

96.0

92.6

100

Audit & Supervisory Board meetings (%)

IHI

93.0

100

100

100

Competition laws

IHI and consolidated subsidiaries

0

0

0

0

Anticorruption laws

IHI and consolidated subsidiaries

0

0

0

0

Laws/regulations relating to PR activities

IHI and consolidated subsidiaries

0

0

0

0

Political organizations (Millions of yen)

IHI

10

10

10

10

Economic organizations (Millions of yen)

IHI

41

42

48

56

Other major industry organizations(Millions of yen)

IHI

55

55

101

120

Compliance Hotline reports

*1

218

209

238

239

Officer training

IHI and subsidiary companies in Japan

55

50

47

–

Line Manager Training

IHI and subsidiary companies in Japan

73

83

75

Quality & Compliance Training (Japan)

IHI and subsidiary companies in Japan

–

–

–

27,866

Quality & Compliance Training (Overseas)

Subsidiary companies overseas

–

–

–

1,774

e-Learning (Japan)

IHI and subsidiary companies in Japan

18,85918,02018,234

18,164e-Learning (Overseas)

Subsidiary companies overseas

1,392

1,261

1,126

1,214

Patents in Japan

IHI

4,157

3,915

4,120

4,150

Patents overseas

IHI

2,744

2,598

3,047

3,502

IHI and consolidated subsidiaries

–

3.0

2.9

3.2

Information security measures level evaluation (out of five) (score)72*1 IHI and affiliated companies in Japan in 2016. IHI, affiliated companies in Japan, and some affiliated companies overseas (USA and Brazil) in 2017. IHI, affiliated companies in Japan, and some affiliated companies
overseas (USA, Brazil, Asia Pacific, China, and Korea) in 2018 and 2019.

Basic Information

Sustainability
Management

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Performance
Objectives
Objectives

078

Non-financial Summary

Material issues

Theme

Index

Scope of data

Results
2016

2017

2018

2019

Society – Materialize an Affluent Society –Consolidated number of employees

IHI and consolidated subsidiaries

29,65929,70629,28628,964

Number of employees (IHI)

IHI

8,630

8,256

8,011

7,741

Male

IHI

7,625

7,245

6,994

6,730

Female

IHI

1,005

1,011

1,017

1,011

Ratio of female employees (%)

IHI

11.6

12.2

12.7

13.1

IHI

14.5

14.8

14.9

15.8

Male

IHI

14.8

15.1

15.1

16.0

Female

IHI

12.2

12.5

13.2

14.5

Number of
employees

Managing humanresources

Average years ofservice

All employees

Total turnover rate
Turnover rate

Employeeawareness surveys

Employment

Diversity and inclusion

IHI

3.9

4.0

4.3

3.5

Rate of retirement due to personalreasons (%)

IHI

1.4

2.0

2.0

2.0

Turnover rate within 3 years of joining
the company (%)

IHI

5.8

5.7

7.4

6.8

Ratio of answered employee-awareness surveys (%)

IHI and affiliated companies

87.6

90.9

91.7

91.4

Number of new graduate recruitment

IHI

288

245

155

153

Male

IHI

248

210

135

123

Female

IHI

40

35

20

30

Female recruitment rate (%)

IHI

13.9

14.3

12.9

19.6

Number of mid-career employment

IHI

153

29

78

37

Recruitment ratio of people with disabilities (%)

IHI

2.14

2.03

2.21

2.39

Re-employment rate of employees at retirement age (%)

IHI

84

87

84

81

Ratio of employees from abroad (%)

IHI

1.0

1.1

1.0

1.0

Local managers at overseas sites

China, Singapore, and United States

20

23

22

23

Number of female officers

IHI

1

3

4

3

Ratio of female officers (%)
Gender diversity

IHI

6

16

24

19

IHI

66

68

74

83

Ratio of female managers (%)

IHI

2.5

2.6

2.8

3.0

Ratio of female general managers (%)

IHI

0.7

0.8

0.8

0.8

Ratio of female section managers (%)

IHI

1.8

1.8

2.0

2.2

Number of female managers

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Performance
Objectives
Objectives

079

Non-financial Summary

Material issues

Theme

Work-life balance

Index

Diversity and inclusion

Occupational
health and safety

Social contribution
activities

2017

2018

2019

IHI

149

159

158

161

IHI

674

677

689

779

Employees who have taken parental leave

IHI

89

111

113

132

Percentage of employees who return to work after parental leave (%)

IHI

100

100

100

99.2

Employees who have taken nursing care leave

IHI

11

18

6

7

Average annual paid vacation days taken

IHI

16.50

17.63

18.36

19.40

Monthly average overtime (hours)

IHI

23.90

22.90

22.50

21.10

Participants

IHI and affiliated companies in Japan

3,300

2,900

3,300

3,276

Training hours

IHI and affiliated companies in Japan

112,000

101,000

112,000

106,208

Participants

IHI and affiliated companies in Japan

5,800

5,800

6,200

3,343

Training hours

IHI and affiliated companies in Japan

46,00044,00047,00025,073

Average annual training hours per employee

IHI and affiliated companies in Japan

17.4

16.7

16.7

19.8

Employees certified as master artisans

IHI

45

42

37

35

Participation rate of medical check-ups (%)

IHI and 34 affiliated companies

70

69

70

71

Participation rate of stress checks (%)

IHI and 34 affiliated companies

90

91

96

94

Absenteeism (Employees who take three or more months ofleave) (%)

IHI and 34 affiliated companies

0.9

0.9

0.9

1.0

Presenteeism (Employees with restricted hours) (%)

IHI and 34 affiliated companies

2.1

1.6

1.7

1.6

Smoking rate (%)

IHI and 34 affiliated companies

29

28

28

27

Lost time injuries frequency rate

IHI and 30 affiliated companies

0.33

0.57

0.26

0.40

Open lectures

Total injuries frequency rate

IHI and 30 affiliated companies

1.31

1.64

1.11

1.49

Rate of occupational diseases

IHI and 34 affiliated companies

–

–

0.165

0.165

Occupational accidents*2

IHI and 30 affiliated companies

68 (1)

87 (1)

55 (0)

71 (0)

IHI and 30 affiliated companies

41 (0)

52 (0)

28 (0)

42 (0)

Temporary employees

IHI and 30 affiliated companies

0 (0)

4 (0)

4 (0)

4 (0)

Partners*2

IHI and 30 affiliated companies

27 (1)

31 (1)

23 (0)

25 (0)

Employees union membership rate (%)

IHI and 6 consolidated subsidiaries

73

74

73

73

Number of labor complaints received

IHI

0

0

0

0

Social contribution expenses (Millions of yen)

*3

206

331

635

519

*2

Corporate citizenship2016

Employees who have taken childcare leave

Employees*2

Labormanagement
partnership

Results

Employees with reduced work hours

Stratified training
Human resource
development

Scope of data

Employee union
membership rate

*2 Figure inside parentheses indicates fatal incidents*3 IHI and affiliated companies in 2016 and 2017. IHI and consolidated subsidiaries in 2018 and 2019.

Sustainability
Management

Basic Information

Principled Corporate
Management

Materialize an
Affluent Society

ReduceEnvironmental Impact

Performance
Performance
Objectives
Objectives

080

Non-financial Summary

Material issues

Theme

Index

Scope of data

Results
2016

2017

2018

2019

IHI and consolidated subsidiaries

316,914330,162

329,602254,227

Scope 1 (t-CO2)

IHI and consolidated subsidiaries––

80,03264,724

Scope 2 (market-based) (t-CO2)

IHI and consolidated subsidiaries––

249,570

189,503

Environment – Reduce Environmental Impact –CO2 emissions (t-CO2)
CO2

CO2 emissions intensity*4 (t-CO2/100 million yen)

IHI and consolidated subsidiaries

21.3

20.8

22.2

18.3

Energy consumption*5 (TJ)

IHI and consolidated subsidiaries

6,015

6,087

5,828

2,468

Fuel consumption (TJ)

IHI and consolidated subsidiaries

–

–

–

1,044

Electricity consumption (TJ)

IHI and consolidated subsidiaries

–

–

–

1,398

Steam consumption (TJ)

IHI and consolidated subsidiaries

–

–

–

0

Renewable energy used (TJ)

IHI and consolidated subsidiaries

–

–

–

26

Energy consumption intensity*4 (TJ/10 billion yen)

IHI and consolidated subsidiaries

40.5

38.3

39.3

17.8

Evaluation of CDP climate change

IHI and consolidated subsidiaries

A(Leadership)

B(Management)

B(Management)

B(Management)

Waste generated (ton)

IHI and consolidated subsidiaries

30,531

28,69129,01027,564

Toxic waste generated (ton)

IHI and consolidated subsidiaries

–

–

–

164

Climate change
EnergyExternal evaluation

Waste

Circular economy

Amount recycled (valuable resources) (ton)

IHI and consolidated subsidiaries

–

–

–

61,799Water withdrawal*6 (1,000m3)

IHI and consolidated subsidiaries

4,169

3,776

4,182

4,251

Public water (1,000m )IHI and consolidated subsidiaries

–

–

–

750

Industrial water (1,000m3)

IHI and consolidated subsidiaries

–

–

–

868

IHI and consolidated subsidiaries

–

–

–

1,948

IHI and consolidated subsidiaries

–

3

Water

Groundwater (1,000m3)
Rainwater, rivers, lakes, etc. (1,000m )3

Environmental
protection

–

–

685

Compliance withenvironmental laws
and regulations

Significant environmental accidents

IHI and consolidated subsidiaries

0

0

0

0

Major violation of environmental laws/regulations

IHI and consolidated subsidiaries

0

0

0

0

Number of cases IHI paid fines, penalties, etc.

IHI and consolidated subsidiaries

0

0

0

0

Costs to Reduce the
IHI Environmental
ImpactInvestments (Millions of yen)

IHI

864

713

696

652

Expenditures (Millions of yen)

IHI

73

79

143

78

*4 Net sales as the denominator.
*5 Changed the method of calculating energy consumption since 2019.
*6 Changed from amount of water consumption to amount of water withdrawal since 2019.

Corporate Planning Division
Toyosu IHI Building, 1-1, Toyosu 3-chome, Koto-ku, Tokyo 135-8710, Japan
TEL : +81-3-6204-7800 FAX : +81-3-6204-8608
URL : https://www.ihi.co.jp/en/index.html