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2018

Sustainability Report 2018

Creating New Valuefor Sustainability
Founded in the very early days of the automotive industry,
the Calsonic Kansei Group this year marked the 80th
anniversary of its founding.
The automotive industry is in the midst of aonce-in-a-century transformation.
Since our re-invention as an independent Monozukuri
company and global manufacturer of automotive
components, we have continued to pursue reform withindependence and initiative under our new leadership.
With total solutions supported by outstanding technology
and Monozukuri, we aim to bring new value to the mobility
market and to realize a sustainable society.
It’s time for a new departure.
The Calsonic Kansei Group will continue to embracechallenges.

Table of Contents
02

Vision, Mission, Value

03-04

Top Commitment

05-06

CK at a Glance

07-08

Sustainable Value Creation Process

09-10

Calsonic Kansei Medium-term Business Plan Compass 2021

11-14

Domains of Focus

15-16

Employee Workshop

17

CSR Policy and Key Issues

18-31 2017 in Review
18

01

Major Achievements in Fiscal 2017

19-22

Our Initiatives Across the Globe

23-31

Highlights

32

Third-party Opinion / Response to Third-party Opinion

33

Company Overview / Editorial Policy

34

Financial Highlights / Global Network

Sustainability Report 2018

Corporate Vision
A global automotive company, inspired to beworld-leading in innovation and Monozukuri, while
contributing to a sustainable society.
Mission Statement
Global
We create the strongest world-wide automotive supplier brand by cohesively blending
our diverse cultures into one dynamically agile team.
Inspired
We are persistent to invest in the CK core values generating pride, passion, and loyalty
in all of our team members.
World Leading Innovation
We harness creativity and a Monozukuri spirit from our team members to be
first-to-market with high quality products and processes for our customers.
Sustainable Society
We are committed to be a socially responsible corporate citizen that brings value to ourshareholders, communities, and team members.

Value: CK WAY
Task
1. Fact-Driven
2. Continuous
3. Commitment & Target

Individual
1. Challenge
2. Independence
3. LearningTeam
1. Cross Function / Cross Region
2. People Oriented
3. Diversity
4. Transparency

VISIONMISSION

BEST

VALUE
CKLC
CK WAYCKPSCOMPLIANCE

02

Sustainability Report 2018

Top Commitment

Further Integration and
Deepening of CSR and Management
for the Next 80 Years
Beda Bolzenius
President and CEO
Calsonic Kansei Corporation

In April 2018, I was appointed as President and CEO of CalsonicKansei Corporation. I am honored to have received such an
opportunity in this milestone 80th anniversary year since thefoundation of the company.
Respond Speedily to Market Environment Changes andCreate New Innovation Using the Technologies We Have
Accumulated Over Our 80-year History
The Calsonic Kansei Group and the environment of the markets
we are involved in have entered an era of great change.

03

At the end of March 2017, the Calsonic Kansei Group underwent
a major transformation, moving out from under the umbrella of
the Nissan Motor Group to become an independent manufacturerof automotive parts.
The automotive industry is in the midst of bewildering change.
The major pillars of that change are the trends known as ACES
(A: Autonomous; C: Connected; E: Electronic; S: Shared).
In 2017, Calsonic Kansei announced its new Medium-term
Business Plan “Compass 2021.” Focusing on the domains ofCabin Innovation and Energy Management, our aim is to be asystem solution provider using our DNA for technologicalinnovation and our passion for Monozukuri (→p.9-10)
These focus domains are closely connected to the ACES trends.
We will respond to these trends by, for example, building
integrated CPM (cockpit modules) by leveraging a wide range oftechnologies gained through developing diverse products and byleveraging electrical power management and heat management
technologies, to provide systems for optimizing the energy flows
of electrically-powered vehicles.
The market environment is in a constant state of flux and newSustainability Report 2018

demands are always being created. We must continue to provide
outstanding technologies of high quality. Standing still is not an
option.
Meanwhile, to survive against cutthroat competition, instead oftrying to cover all bases, we need to focus strategically on
specific products and solutions.
Leveraging my own experience in the automotive industry andthe technologies that Calsonic Kansei has built up over the years,
I will help to create innovation and contribute to the further growthof the Calsonic Kansei Group.
Fiscal 2017, the Year We Took a Giant Step Toward the NextStage
For our consolidated performance in Fiscal 2017, which was thefirst year of the new Medium-term Business Plan “Compass
2021”, despite the tough market environment we managed tomaintain one trillion yen, which is the same level as the previous
term, through a range of sales promotion activities andmanagement efforts. We aim to further increase revenue andsales based on the three growth strategies defined in “Compass
2021”.
In the area of the environment, with the objective of strengthening
our environmental activities on a global scale, we revised ourenvironmental policy in March 2018 and renamed it the CK
Green Policy.
Further, in Compass 2021, we established targets for reducing
Scope 1 and Scope 2 CO² emissions, founded on science-basedtargets (SBT). In Fiscal 2017, we made steady progress in our
preparations for achieving those targets. (→p.27-28)
In terms of society, we placed emphasis on social issue
responses that also encompass our supply chains, andproceeded with initiatives jointly with our suppliers and otherpartners.
Specifically, we conducted due diligence of our major suppliers
regarding compliance and CSR overall, and made progress on
the revision and penetration of purchasing and other guidelines.
In Fiscal 2018, we will take the outcomes of these activities andconnect them to concrete action, including identifying problems
and conducting explanatory briefings. (→p.29)
Our efforts in social contribution activities are centered on thefour domains of next-generation support, safety, environment,
and community. Moving forward, we will share best practice ineach region with the aim of realizing globally integrated activity inthis area. (→p.31)

foundation for achieving a single, united team. By pursuing
initiatives for operational efficiency improvements andestablishing a variety of systems to facilitate diverse working
styles, we will strive to create more satisfying workplaceenvironments. (→p.26)

Pursuing Sustainable Management from a Long-term
Perspective that Combines CSR and Management
The Calsonic Kansei Group systematized its CSR activities in
Fiscal 2015. In addition to raising awareness about CSR
activities, we contributed to finding solutions to social issues
through our business.
In Compass 2021, we declared CSR as one of the foundations ofour business management. We will now respond flexibly to global
economic and social developments with a long-term perspective
and, using our management resources efficiently, aim for thefurther integration and deepening of CSR activities andmanagement. To this end, we will continue to engage proactively
with our stakeholders.
Further, in Fiscal 2017, we incorporated the United Nations’Sustainable Development Goals (SDGs)* into our review of key
CSR challenges. In addition to linking them to our 15 key CSR
challenges, we established focus objectives in our businessactivities that will contribute to achieving these global goals.
(→p.7-8)* In September 2015, more than 150 members of the United
Nations attended the UN Sustainable Development Summit at
UN Headquarters in New York and adopted the agenda, whichcontains a declaration and goals that serve as a plan of action forthe prosperity of the planet and people. These are the 17
Sustainable Development Goals and 169 targets, known as theSDGs.
So we can continue to grow and develop in perpetuity for the next
80 years and beyond, the Calsonic Kansei Group will embracechallenge and pursue our operations as a single, united team. I
look forward to the continued, unwavering support andcooperation of our stakeholders.

Accelerating Growth as a Single, United Team that is BothDiverse and Cohesive
Because Calsonic Kansei handles a large variety of products, ourorganization must inevitably be multi-faceted. However, I believe
firmly in the importance of each and every employee working
cohesively so we can grow as a single, united team.
To expand our business globally, we will promote diversity in our
team. While valuing the diversity of our people in terms ofgender, nationality, and ability, and the diversity of our expert
technology and know-how gained by handling many different
types of products, we will unite through close communication.
We are actively engaged in reforming working styles as the04

Sustainability Report 2018

CK at a Glance

RUSSIAU.K.

GERMANYFRANCESPAIN

ROMANIA

KOREA

JAPAN

CHINA

INDIA

MYANMAR
THAILANDMALAYSIA

Regional Head Offices

Development

R&D / Global HQ

Testing and Research / Production Engineering

Number of Employees (Consolidated)

22,67805

Offices, etc.

Production

Number of Employees by Region (Consolidated)
Americas
Asia

6,183
7,070

2,372
Japan
7,053
EuropeR&D Bases

8 13Countries

BasesSustainability Report 2018

Consolidated Sales

Share of Consolidated Sales by Region

35.8 ％
Americas 30.6 ％Asia
21.8 ％
Europe 11.8 ％
Japan

998.6
Billion Yen

U.S.A.

MEXICOBRAZIL

Production Sites

Consolidated R&D Expenditures

15 80 32.89
Countries

Sites

Billion Yen

Customer Auto Manufacturers

18

Companies

06

Sustainability Report 2018

Sustainable Value Creation Process

Population growth
Heat exchange technology

Fuel economy
improvements
Resource
depletion

Air purification

Exhaust technology

Air pollution

ClimatechangeAutonomous
driving vehicles

Population aging

Compressor technology

Electrification

Electronics technology

Urbanization
Connectivity

Climate control technology

Population concentrationin cities
Mobility
services

CPM / Interiors technology

Advancedcomputerization

Social Issues

07

Major Trends in Mobility Market

Calsonic Kansei’s Technology Domains

Sustainability Report 2018

Top Priority CSR Issues
Climate change action

Create social values through innovations

Promoting diversity

ESG risk management

Prevention of resources

Respecting human rights

Human resource development

Strengthening compliance

Effective use of resources

Occupational health and safety

Improve customer satisfaction

Strengthening information security

Improve ESG in supply chain

Promoting work-life balance

Quality improvement

Calsonic Kansei Medium-term Business Plan
p.09

s
So teml
Pr utioov n
iderCompass 2021

Sy

We will contribute to the reduction ofgreenhouse gases and to the efficient use ofresources through efficiency improvements,
weight reductions, reuse and recycling.

Environmental Burden
Mitigation
We will contribute to the mitigation of theenvironmental burden of cities with air
purification technologies.

Safety and Security

Energy Management (Energy efficiency / Environmental performance)• Environmental technology• Integrated energy management• Thermal energy management technology• New-generation power electronics• Electric energy management technology• Power-saving systems

Cabin Innovation (Cabin space / Human-machine interface)• HMI / Utility• Intelligent HMI• Interior design• Interior value products• Cabin environmental control• Connected systems• Inside/Outside communication technology• Cyber security

Domains of Focus

OutputWe will provide a comfortable, convenientmobility environment to contribute to
freedom of movement and to improving thequality of life.

p.11

p.13

Comfort andConvenience

We will create safe and reliable cabin
spaces to contribute to reduction in traffic
accidents.

SDGs Targeted in
Business Strategies

Value Provision

Business Foundation

5C Promotion
CSR, Compliance, Customer Satisfaction, Corporate Governance, CK WAY

Management Assets
Intellectual Property

Human Resources

R&D expenditures

Number of
consolidated employees

32.89 Billion Yen 22,678

Customer Assets
Degree of penetration of
CK WAY* among employees
Global ave:

Customer auto
manufacturers

3.16 / 4 Points 18 Companies 3.43

* Survey of degree of penetration ofvalues that all CK employees should
hold to achieve the corporate vision

Production Sites

Capital Expenditures

80 Sites

29.94 Billion Yen

Customersatisfaction

08

Sustainability Report 2018

Medium-term Business Plan

Calsonic Kansei aims to be a “System Solution Provider” focusedon cabin innovation and energy management with the DNA oftechnology innovation and a passion for Monozukuri.

Calsonic Kansei Medium-term
Business Plan

Financial target: Value-added sales of 750 billion yen

manufacturers）
Sales excluding parts specified by and supplied from completed vehicle manufacturers（Sales

Sy
st
So em
lu
Pr tioov niderCompass 2021

SystemProducts

Human Machine Interface

Electric Power Management

Cockpit Module

Thermal Management

Climate Control System

Control System

Heat Exchange, Climate Control

Displays

Electronics

Energy Regeneration /Conversion

Network / Communication

ExhaustExhaust Purification /Restriction Compliance

Safety Evaluation

Technology

Optimal Temperature Control

Interior

Usability
SensingReliability Evaluation

Traction Control

CAE / MBE

High Voltage System Design

Mechatronics
Circuit / Software Development

Energy Balance Prediction

Domains of Focus

Cabin
Innovation(Cabin space / Human-machine interface)&

EnergyManagement(Energy eﬃciency / Environmental performance)

Ideal Form and Domains of Focus

09

In July 2017, the Calsonic Kansei Group implemented our new

automotive parts, we set our focus on the two domains of cabin

Medium-term Business Plan titled Compass 2021. This is our firstinnovation (cabin space / human-machine interface) and energy

mid-term management plan after becoming independent from the

management (energy efficiency / environmental performance). We

Nissan Motor Group. Compass 2021 defines our ideal form (ourwill continue to further refine our competitiveness at each level of“to be”) as a “System Solution Provider”. Utilizing our inherent

technology, products, and systems, and provide our customers

strengths with a wide range of technologies and products forwith systems that anticipate future value.

Sustainability Report 2018

Growth Strategy: 3 Pillars

We have set the following three core strategies.

Business Foundation: CSR Activities
To address social issues through our business and realize asustainable society, we have set a CSR vision and the priority

Develop
new products
unique to “CK”

areas "Improving employee awareness", "Coexisting with society",and "Improving corporate value" to realize our CSR vision.

CSR Vision

Developnew customers

Realize
Dantotsu
Monozukuri

Toward the goal of remaining an honest and trusted
company, we strive to create a rewarding workplace,develop CSR-aware employees who tackle social issues,build a resilient company, and contribute to theachievement of a sustainable society.

Priority Areas
1. Develop new customers
In addition to promoting the maintenance and expansion ofbusiness with Nissan Motor, our main customer, we will also
diversify our customer base and expand sales. We will create a
specialized team for expanding sales and steadily advance stepby step based on concrete milestones.

2. Develop new products unique to “CK”
We established a future product planning office for the purpose ofstrengthening our two domains of focus and will promote thedevelopment of new products that have appeal unique to CK. We
will actively propose products and technologies that anticipate the▼Improving Employee Awareness• Creating a rewarding workplace (decent work)• Improving employee awareness about tackling social issues▼Coexisting with Society• Support for international norms• Resolution of social issues through business operations• CO² emission reduction activities based on SBT▼Improving Corporate Value• Achieving the Medium-term Business Plan
• Strengthening our CSR activities

market and customer needs.

3. Realize Dantotsu* Monozukuri

Applying ISO 26000(International guidance on social responsibility)

Our aim is a production system that realizes the value of products
and services that satisfy customer needs at the highest level ofRegarding “Coexisting with society”, we set a target for reducing

efficiency. Specifically, we will promote automation and in-house

our CO² emissions based on SBT. We will achieve this target

production that increases cost competitiveness, on-site manage-

through thorough energy conservation activities and introducing

ment that brings stability to quality, and initiatives for new

renewable energy. Based on our CO² emissions in Fiscal 2016, ourproduction technologies.

goals are a 35% reduction by Fiscal 2030 and a 90% reduction by*Best-in-class

Fiscal 2050, and we will strive to for a reduction of 7% by Fiscal
2021, which is the final year of Compass 2021 and a passing pointon the way to the Fiscal 2030 and Fiscal 2050 goals.

MindsetThe Calsonic Kansei Group became independent from the
Nissan Motor Group at the end of March 2017. We set "Indepen-

As an activity to prevent global warming CK will promote
CO² emission reduction activities based on SBT.
CO² emission reduction target in scope 1 and 2 (vs FY16 amount)

FY16=100dence and Initiative" as the Monozukuri mindset for all employees in order to grow going forward as a manufacturing company

7%

without capital ties with any specific automobile company andachieve Compass 2021.
FY16

Independence & Initiative

FY21

35%
FY30

FY50

90%

With intensive energy-saving activities & introduction of reusable energy,
we aim to reduce CO² emission.

10

Sustainability Report 2018

Products in the Energy Management Domain

Domains of Focus● Exhaust Systems
Exhaust systems, Mufflers, Exhaust manifold converters, Spinning

Domain of Focus: Energy Management

valves, Sheet metal turbine housing CK-SMiTH● Heat Exchange Products

Radiators, Condensers, Motor fans, EGR coolers, Built-in oil coolers

The energy management domain makes wide-ranging contributions toenvironmental footprint reduction through electric and thermal energy
management. This domain also includes drive and power control
technologies, heat-related devices and related technologies, and climate
control system technologies built up through our long track record of mass
production in the area of electric vehicles.

Front-runner in Electrification[Electric Energy]

Toshikatsu Miyaji
General Manager
Green Technology Development Dept.,
Global Technology Division
Calsonic Kansei Corporation

With Our Wide Range of Technologies
and Products as Our Strength, We Will
Strive to Improve the Energy Efficiency of
the Entire Vehicle
In the energy management domain, toreduce greenhouse gas emissions andcontribute to air purification, we are pursuingthe development of technology in thefollowing three areas: Electric Energy –systems for the safe, efficient extraction,
supply, and use of electric energy;
Power-Train Thermal Energy – suction andexhaust energy management for the
improvement of engine-warming efficiency;
and Climate Control Energy –high-efficiency, power-saving climate control
systems.

Calsonic Kansei has been supplying
numerous important components since theearly days of electric vehicles. In particular,
we have produced more than 367,000
inverters, which are used to convert battery
power from direct current to alternating
current (April 2018 figures).
We have a similar track record in battery
controllers, which, along with our proprietarystate estimation technology, enables the
management of electric energy to a highly
efficient level.
The knowledge we have obtained in electricvehicles is being put to use in
new-generation power electronics, such as
regenerative energy storage.
Creation of Products and Systems thatContribute to the Improvement of Engine
Heat Exchange Efficiency[Power Train Thermal Energy]
While there is a growing number of electricvehicles on our roads, it is expected to takesome considerable time before theconversion from internal combustion engine
vehicles is complete.
We are continuing to pursue thedevelopment of products for internal
combustion engine vehicles that will help
reduce their burden on the environment.
Because internal combustion engine
vehicles convert the energy from combustion
into rotational motion to obtain driving force,(BOC), Charge air coolers● Climate Control Systems

Climate control units, Evaporators, Heater cores, Cool boxes● Compressors

Fixed displacement compressor CR series, Variable displacement
compressors● Electronic Products
Power electronics: Inverters
Body electronics: Lithium ion battery controllers (LBC)

the emission of CO² and other greenhousegases is unavoidable.
The key point is how far those emissions canbe reduced by improving the engine’s
combustion efficiency.
Calsonic Kansei handles a broad range ofheat-related technologies and products
besides engines. Our challenge is thedevelopment of devices and vehicle-level
heat systems that will contribute to theimprovement of the engine’s thermal
efficiency.
Changes to engines involve complex
interactions between a variety of factors.
For example, if the engine’s combustion
efficiency increases, the temperature of
exhaust gases falls.
Making exhaust gas purification catalysts
react requires a temperature of a certain
level. If the temperature falls, the quantity ofrare metal catalyst needs to be increased.
To avoid this, devices that maintain thetemperature are required.
Our Sheet Metal Turbine Housing
CK-SMiTH (→p.27), which won the HighestAward in the 17th Japan Stainless Steel
Association Prize in March 2018, meets
those needs by improving catalyst heating
performance.
We are currently looking into other ways ofusing exhaust gases as an effective heatsource, in addition to the activation of
exhaust gas purification catalysts.

Connection to SDGs
7: We will leverage thermal energy management technologies to contribute to energy efficiency improvements.
9: We will actively promote open innovation for the pursuit of further environmental performance.
We will create new technologies and products.
11: We will contribute to the mitigation of the environmental footprints of cities with the air purification technologies inour exhaust systems.
12: We will promote CO² reductions and waste management throughout the full life cycle of our products.

13: All of our employees will be aware of the environment and put that awareness to use in product development.

11

Sustainability Report 2018

Building More Energy-saving Climate
Control Systems[Climate Control Energy]
Climate control systems are essential to all
automobiles, including electric vehicles.
However, these systems expend the mostenergy, and as such, are closely related toenvironmental footprint.
In October 2018, Japan will move to
WLTP*¹, the global harmonized standard for
determining fuel or energy consumption andemissions of atmospheric pollutants.
Until recently, climate control systems had
not been included in the fuel consumption
figures published in vehicle catalogs. Now,
under the WLTP, the energy used by climate
control will be included in the calculation offuel consumption.
With more emphasis than ever before being
placed on reducing climate control energy
consumption, we believe that CalsonicKansei will be able to provide much value tosociety with the technologies for climate
control systems and compressors it has built
up over the years.
For example, our CR series of fixed
displacement compressors, which are small
and lightweight, as well as being highly
energy efficient, boast industry-leading
performance.
Instilling Environmental Awareness in All
Employees
Calsonic Kansei’s Environmental
Management Meeting is a body that
promotes environmental activities across theentire group. Product environmental
committees operate under this Meeting.
These committees set targets in areas suchas the development of products andtechnologies that are effective in reducing
CO² emissions, promoting the expansion of
applications, and education regarding
product-related environmental laws, which
are incorporated into the various divisions.
Further, in Input Seminars, which are held
when formulating development strategies,
these committees provide information about
the market climate, customers, andtechnologies, as well as trends inenvironmental issues and legislative
systems concerning the environment andsafety.
All of our employees possess an awarenessof environmental protection and put thatawareness to use in product development.
As a System Solution Provider
Because we have a full range of climate
control systems, exhaust systems, heatexchanger products, compressors, andelectronic products in our energy
management domain, we have a majoradvantage in that we are able to offer totalenergy management across the entire
vehicle.
For example, as mentioned above, the heatfrom exhaust gas could be used for cabinheating and to warm up the engine. This
could cut down on the amount of energy
used by the vehicle as a whole.
The area we want to strengthen going
forward is technology for pipes, water pumps

and various types of valves that connect thevehicle’s products and systems.
If we are to propose total systems more
efficiently, we need to give consideration tobringing these technologies in-house.
Promotion of Open Innovation
Vehicle systems develop at a bewilderingpace and they are becoming more complex
every year.
Because we have many automotive
manufacturers who consult with us from thespecifications deliberation stage, we need toelevate our organizational abilities andtechnological capabilities even further.
To achieve this, as well as in-houseresearch and development, open innovationis also important.
At the moment, in terms ofindustry-government-academic projects, weare participating in NEDO’s*² Research andDevelopment into Technologies for theInnovative Use of Un-used Thermal Energy,
and about 40 joint research projects withleading universities.
You can look forward to us continuing toleverage our proprietary technologies tocreate world-first products for the creation of
new social value.
*1: Globally harmonized method for testing of
exhaust gases and fuel consumption inpassenger cars and other vehicles(Worldwide harmonized Light vehicles Test
Procedure[WLTP])*2: New Energy and Industrial Technology
Development Organization

Electric Energy

Power source management technology

Climate Control Energy
High-efficiency climate control technology

Inverters

CR series of fixed displacement compressors

PT Thermal Energy
PT efficiency-improving thermal
management technology

Sheet Metal Turbine Housing CK-SMiTH

12

Sustainability Report 2018

Domains of Focus

Domain of Focus: Cabin Innovation

Products in the Cabin Innovation Domain● Cockpit Module / Interior
Instrument panels, Consoles, Decorative finishers, Cross car beams● Electronic Products

In the cabin innovation domain, we will bring added value to the new mobility
society and realize cabin environments that are safe, secure, and comfortableby combining the technologies that we have cultivated in our wide range ofcabin-related products with new technologies.

Mitsuaki Hagino
General Manager
Growth Technology Development Dept.,
Global Technology Division
Calsonic Kansei Corporation

Creating “New Value” by Being the First
to Capture Changes in the Market
Environment, Including
Autonomous-driving and In-vehicle
Infotainment
In the cabin innovation domain, to realize
safe, secure, and very comfortable cabin
spaces, we are developing cockpit modules
and human-machine interfaces that are easy
to see and use based on our knowledge ofergonomics.

importance.
With our long history of manufacturing
meters, Calsonic Kansei has accumulated awealth of know-how regarding safety interms of visibility and line-of-sightmovement. We also have our own
verification standards for internal
protrusions, and by complying with thosestandards, we are contributing to the global
target of halving the number of fatalities andinjuries caused by traffic accidents.
Further, making products that will not
impede human characteristics and that offer
high operability is a challenge that iscommon to all regions and all automotive
manufacturers.
Populations in Japan and other countries are
aging at a rapid rate. We believe that making
products that senior citizens will find easy to
use will mean products that will be easy touse for all generations.
Human-Max REAL, which we havedeveloped with the aim of commercializationin 2020, is a cockpit module that takes
advantage of the safety know-how we haveaccumulated to date and our knowledge
about creating comfortable cabin spaces.
In addition to displaying approachingvehicles, hazards, and area information on
the screen in easy-to-understand ways, thismodule has achieved a design layout thatemphasizes driving enjoyment.

Balancing Safety and Security withOperability
It goes without saying that, as amanufacturer of automotive components,
safety and security are of paramountPower electronics: LIN communication motor actuators for HVAC,
Blower motors
Body electronics: Body control modules (BCM), Keyless systems,
Gateway
Human-machine interface: Meters, Integrated switches, Climate
control switches, Occupant detection systems

Anticipating Commercialization ofAutonomous-driving Vehicles
Development is underway around the worldin anticipation of the commercialization ofautonomous-driving vehicles. It is certainthat the form of vehicles and how they are
made will undergo major changes.
Leveraging the knowledge we have acquired
to date, we will also make safe, secure andcomfortable interfaces and cockpits forautonomous driving vehicles.
For the safety of autonomous-driving
vehicles, as well as considerations forconventional vehicles, we will need to think
about matters that are peculiar toautonomous driving vehicles.
For example, Calsonic Kansei is pursuingthe development of systems that will
guarantee functional safety, to ensure thatthe driver is not put into danger even in theunlikely event of a systems failure.
Further Drilling-down of Needs
In March 2017, Calsonic Kansei became an
independent Monozukuri company.
Going forward, as well as developing
products to meet the needs of specificautomotive manufacturers, we also need todevelop products that can be used by any
manufacturer.
Established in Fiscal 2017, our Future
Product Planning Office formulates productstrategies and, as well as planning how to
respond to manufacturers’ requests,
explores manufacturers’ needs proactively,
and also drills down to end users’ needs.

Connection to SDGs
3: We will contribute to halving the number of fatalities and injuries caused by traffic accidents by leveraging our
know-how in visibility and line-of-sight movement and our proprietary safety verification standards for interior products.
9: We will actively promote open innovation for the further pursuit of safety.
12: We will pursue CO² reductions and chemical substance management through consideration of the environment in
our materials.

13

Sustainability Report 2018

Human-Max REAL
Graphic meters and bird’s-eye images warnof approaching vehicles.
Ambient illumination positioned on bothsides will flash according to the degree of
danger to alert the driver.

” A car is approaching”

Response to Computerization andEnhancement of Cyber Security

Toward Monozukuri that Will not Burden
the Environment

other materials used in the manufacturing
process.

With the next-generation
telecommunications system, 5G, scheduled
to launch in 2020, the developments in theadvancement of computerization in themobility space are growing in intensity.
Meanwhile, with connectivity, one of the big
trends in the mobility market, social issues
such as cyber terrorism are being
highlighted.
In July 2017, Calsonic Kansei established
WHITE MOTION in a joint venture withFrance’s Quarkslab. This new company willconduct software development and offer
consulting on automotive cyber security tostrengthen responses to this challenge.
Calsonic Kansei already possesses a
product called Gateway*, and with this new
joint venture, it has established frameworks
for the control of connections in the cabin
and connections with outside the car.
Very few companies have such frameworks,
so we believe that this will be a majoradvantage for us.

Calsonic Kansei is a comprehensive supplierof automotive parts with a wide range of
products. As such, production efficiency
across our entire supply chain is one of ourstrengths.
In particular, because efficiency
improvements in complex assembly
processes lead to carbon footprint mitigation,
we will continue to work with the automotive
manufacturers to improve efficiency in thisarea.
In the area of materials, CPM and interior
products use a great deal of plastic
materials. We are considering adopting
cellulose nanofiber, a new plant-derived
material that is strong and light, for some ofthese products.
When adopting a new material, we conduct
careful analysis to confirm that the newmaterial will not change into harmful
substances as it degrades with age. Of
course, we also confirm that it complies withthe legal requirements of the various
countries and regions.
We also do this for adhesives, solders, andFusing of Technologies in Two Domains
for Even More Advances*CAN communications data transmission unitthat links on-board network domains

One of Calsonic Kansei’s greatest strengths
is the fact that it possesses outstanding
technologies in both the cabin innovation andenergy management domains. Even from a
global perspective, there are very few
companies who have this.
Currently, in the area of energy conservationof climate control systems that the energy
management domain needs, the cabininnovation domain could, for example,
develop interior materials that do notaccumulate heat, which would cut down onenergy consumption in climate control. We
believe the synergy effects that could beachieved are limitless.
Going forward, we will take advantage of thisfeature to fuse the technologies of the twodomains to pursue new product development
and make comprehensive system proposals
that are uniquely Calsonic Kansei.

14

Sustainability Report 2018

Employee Workshop

Toward the Creation of Sustainable Value

Held on Monday, March 5, 2018 at Calsonic Kansei Headquarters
For details: www.calsonickansei.co.jp/en/csr/social/stakeholder-engagement/employee/

15

Sustainability Report 2018

Young Employees Think About Sustainable Value
Creation

What Innovations Are Necessary for the CalsonicKansei Group?

OutlineFor the Group to unite as one to create sustainable value, a change
in the consciousness of each and every employee is essential.
To create an opportunity to think about how to reflect sustainability
perspectives in corporate management and how to connect it to one's
own work, 15 young employees, in whose hands the future lies, werechosen from development, production, sales, and administration toattend a workshop on this topic.
After listening to a lecture from Peter D. Pedersen, Executive Directorof The Academy for Corporate/Collaborative/Creative Leadership(TACL) on “trade-on”*, which is a mega-trend in sustainability, theworkshop participants divided into groups to discuss what kinds ofinnovations their own companies needed and come up with ideas.
The workshop concluded with all of the participants presenting to thegroup on what they had learned through the lecture and workshop.
It is hoped that these 15 participants will become influencers andspread what they have learned throughout their respective divisions.

Main ideas that emerged from the workshop

Putting Sustainability into PracticeLearnings from the workshop
Comments from the participants included that, through discussions of
the benefits for the company of sustainable value creation anddiscussions from different perspectives from their regular work, theygained a true sense of the company’s expectations for the future andthe value that will be expected of them when the time to manage thecompany arrives.
‘The question of how to set the social issues for the company is an
important one. I think that this will be our greatest challenge.’(Kohei Kato, Production Engineering Development Group, Production
Engineering Center)‘I hope to be more conscious of what parts of my own work arecontributing to sustainability in the future.’(Noriyuki Omichi, Exhaust Systems Production Engineering Group,
Exhaust Systems Business Unit)‘I got the sense that, over the medium to long-term, what is being
expected of us is that we take a position of proactively creating
sustainability trends.
The Calsonic Kansei Group is a Monozukuri company, so there is atendency to think about business in terms of how we respond to ourcustomers’ requests. However, I felt that we also needed to think
about what kinds of innovations are needed in light of themegatrends.’(Juri Nagashima, Development Resources Management & Warrent
Group, Global Technology Division)‘Because I work in the sales department, I cannot develop or produce
products directly myself, but being in a division that is directly
connected to our customers, I plan to bring back the expectations andrequests of our stakeholders, organize them, think about how to realize
them within the company, and link them to action.’(Miyu Okumura, 1st Customer Group, Global Sales Division)(The groups and divisions listed are as of the end of March, 2018.)● In light of megatrends such as climate change, population aging,and urbanization, work with local communities to develop theinfrastructure (take charge of building, maintenance, etc. of
car-sharing infrastructure) for small, inexpensive single-seater
electric vehicles.
Also, make cars that can be driven perpetually, such as customizing
four-seater cars into single-seater cars.
● As well as actively working to introduce renewable energies,
motivate the plants by tallying up their energy emissions and givecommendations to those that have improved the most.
● Recover the heat generated in plant processes such as welding anduse it for other services, to give back to the community.

Expectations of Contributions to
Improving Sustainability Performance
After the workshop
The workshop produced many constructive ideas
about what kind of initiatives the Calsonic KanseiGroup should pursue from a sustainability
perspective.
The participants seemed to have developed a new
affinity for the concept of “Sustainable Management,”
something that they had previously struggled toconnect to their own day-to-day duties.
Going forward, I hope that the company will establish
an environment for the workshop participants to put
the ideas that came out of the workshop into concrete
action, and that the participants themselves will
actively network both within and outside thecompany. By doing this, I hope they will contribute toimproving the sustainability of the entire automotive
industry.

Peter D. Pedersen
Executive Director, The Academy for
Corporate/Collaborative/Creative
Leadership (TACL)
Co-representative, NELIS - Next
Leaders’ Initiative for Sustainability &Network for Leadership andInnovation in Sustainability*Trade-on
A concept in which, instead of corporate profit and social value creation being ina dichotomous relationship (a trade-off relationship), the more a company
contributes to the creation of social value, the more the company’s value
increases.
Alternatively, the more good companies grow and prosper, the more healthysocial and natural environment activities will be encouraged.
(Peter D. Pedersen’s definition)

16

Sustainability Report
Report 20182018
Sustainability

CSR Policy
CSR Policy

Key CSR Issues

Responsibilities to Stakeholders and Society

The Calsonic Kansei Group has identified its key CSR issues and
KPIs as a concrete action plan for the CSR Medium-term Plan, and is
striving to reliably implement the PDCA cycle to achieve them.
In Fiscal 2017, with the announcement of the new Medium-term
Business Plan in September 2017 titled Compass 2021, we
conducted a review of the key CSR issues that we identified in Fiscal
2015, and aligned them with the rapidly-changing expectations ofsociety and with the new management plan.

Calsonic Kansei’s CSR Policy outlines the responsibilities andpolicies Calsonic Kansei promises to fulfil for its stakeholders, with aview to achieving its “Corporate Vision.”
Based on this policy, each employee contributes to the achievementof a sustainable society by conducting their daily operations with anawareness of social responsibilities and with well-balanced business
management based on environmental, social, and economic aspects.

Responsibilities to Customers

Calsonic Kansei Group’s Materiality

We aim to be the most trusted parts supplier by responding to thediversified needs and expectations of society and providing
high-quality products and services that satisfy our customers.

In the review of our key CSR issues that we performed in Fiscal 2017,
we first confirmed the latest trends in social expectations before
carefully examining the contents of our initiatives. We then conducted
an assessment based on the two axes of (1) stakeholder
expectations, and (2) impact on business, based on which we
identified 23 key issues for the Calsonic Kansei Group to address, 15of which we identified as top priority issues.
We also set KPIs for each of those issues, and we are implementing
the PDCA cycle based on their respective degree of priority.

Responsibilities to Business Partners
We will collaborate with our business partners, who provide us withcomponents and services, as equals, and aim to create mutual
improvement and sustainable growth through fair and ethicalbusiness practices.

Responsibilities to Employees

Materiality Map

Based on the basic principle “the health and safety of employees
takes precedence over all,” we are committed to creating the safest
and most appropriate workplace in the auto-parts industry through theparticipation of all employees.

Responsibilities to ShareholdersHigh

We aim to improve our profitability by continuously developing
competitive products, and, at the same time, we aim to enhance thecompany’s corporate value by conducting fair business trade andproactive information disclosure in order to meet the expectations of
our shareholders.

Top Priority Issues

Stakeholder Expectations

Responsibilities to Employees’ Health and Safety

Extremely highWe respect the diversity and value of each employee and provide
opportunities for them to develop talents that contribute to the company
and to society, as well as securing a healthy and safe workplaceenvironment. With this approach, we will create a company in which
every employee can enjoy a rich life of hope, passion, and pride.

High

Responsibilities to Society
Monozukuri

We will contribute to the automotive society through our products byfocusing on three key technologies: Environment, Safety and Comfort

Top Priority Issues

Environment: Technologies for developing eco-friendly-vehicles
Safety: Technologies for creating an automotive society without car accidents
Comfort: Technologies for developing vehicles that drivers can drive with comfort

Environment

Climate change action
Prevention of pollution
Effective use of resources

Environment

SocialImprove ESG in supply chain
Create social values through innovations
Respecting human rights
Occupational health and safety
Promoting work-life balance
Promoting diversity
Human resource development
Improve customer satisfaction
Quality improvement

Governance

ESG Risk management
Strengthening compliance
Strengthening information security

We will contribute to creating an enriched society by each employee
always being aware of the importance of nature and putting effort into
conserving the environment through intellectual innovation gained fromthe integration of new technologies.
Participation in Social Activities / Social Contributions

We will contribute to the sustainable development of society as good
corporate citizens by proactively participating in social activities of local
communities through our business activities.

17

Extremely highImpact on Calsonic Kansei Group Businesses

Sustainability Report 20182017
in Review

Major Achievements in Fiscal 2017

Water Use Intensity

Ratio of Female Managers ★

Number of Suppliers Who Were
invited to Participate in the Due
Diligence Survey

FY2017 target: 2% reduction
from previous fiscal year

FY2017 target: 220 companies

Up

TargetAchieved
FY2017Companies

TargetAchieved%

FY2016225

0.1

FY2017

2.3

%

2.4

FY2016FY2017

4.8

2.2

%

%
Reduction%
Reduction[Water use intensity: total water consumption/sales revenue]

Percentage of Code of Conduct
Education Undertaken
and Pledges Collected

Percentage of Annual Leave Taken ★
FY2017 target: 16 days*

FY2017 target: Japan: 20.5% reduction
Overseas: 15.8% reduction

FY2017 target: 100%

[Compared to Fiscal 2005]

FY2016FY2017%FY2016

100

%

CO2

Up

TargetAchieved

100

Rate of Reduction of CO² Emissions
During Production ★★

FY201777%

6TargetAchieved%

83

FY2016Japan%

FY2017%32.3
Reduction

26.7

Overseas%
Reduction

Japan
Overseas%
31.2
Reduction

21.1%
Reduction[Emission intensity: Emissions/sales revenue]

Customer Satisfaction
FY2017 target: 3.38 [Maximum 5 points]

Calsonic Kansei Group KPIs (Key Performance Indicators)
TargetAchieved
FY2016FY2017

3.36

3.43

KPIs, targets, and responsible divisions have been set for each key
CSR issue, and the PDCA cycle is being implemented according to thedegree of priority of key CSR issues. Self-assessments will be
conducted every year.

* Because the number of annual leave days granted to employees differs depending on the number of years of service (16 days in the first year of employment), annual targets were set for thenumber of days' leave actually taken per person in a year.
Boundaries: ★= Calsonic Kansei only; ★★= Japan: Calsonic Kansei and domestic Group companies; Overseas: Group companies overseas
The remainder are global.

18

Sustainability Report 2018

Our Initiatives Across the Globe[China Region]

To Create a Working Environment
Where Diverse People Can Work with Vitality
China is a massive country with the world’s 2nd largest GDP*¹, a populationthat exceeds 1.3 billion*², and more than 17 million live births*³ a year.
To contribute to the realization of a sustainable society, the Calsonic KanseiGroup is pursuing a range of CSR activities. They include making
improvements to the workplace environments in each of its China locations,and environmental management across the entire supply chain.
*1, *2: China Statistical Yearbook 2017, National Bureau of Statistics of China website*3: Press Release of February 28, 2018 (Statistical Communiqué of the People's Republic ofChina on the 2017 National Economic and Social Development), National Bureau of Statistics ofChina website

Workplaces Where Mothers Can Work
With Peace of Mind While Still Nursing

Environmental Monitoring of Suppliers

In China, the government-mandated maternity leave period is 98 days*,
but there is no parental leave scheme.
At Calsonic Kansei (Guangzhou) Corporation (CKGH), about 10% of
our female workers return to work before their child’s first birthday.
A major concern for working mothers is whether to wean their smallchildren before returning to work or to continue nursing by expressing
breast milk in restrooms or elsewhere during work hours.
In Fiscal 2017, to allow female workers to work with peace of mind whilestill nursing, CKGH established a special room where they can express.
The room is equipped with a refrigerator, where the women can store
their expressed breast milk to take home after work.
With the aim of creating a workplace environment in which its
employees can balance work and raising children, CKGH will continue
to listen to our employees and pursue a range of activities.

At Calsonic Kansei China Holding Company (CKC), in addition toactivities in our own company to mitigate our own environmental
burden, in recent years, we have extended the scope of these activities
to our suppliers, in the pursuit of the environmental management of ourentire supply chain.
In the Purchasing Department, in Fiscal 2017, we commenced regularenvironmental monitoring of our supplier’s production plants.
We rotate the PDCA cycle on an annual basis and we have confirmedthat the plants have obtained the required approvals related to environmental protection mandated by the Chinese government.
China’s environmental regulations are becoming stricter by the year,
and there have even been cases of companies that have violated thoseregulations having their operations suspended.
This monitoring initiative not only raises environmental awarenesswithin CKC, it also helps to ensure stable supply of products.

*Varies according to province

Zhang Jie

Sun Qingqing

Human Resources and General Affairs Department
Calsonic Kansei (Guangzhou) Corporation

Purchasing Department
Calsonic Kansei China Holding Company

My CSR Declaration
Here are some of the personal declarations made by CalsonicKansei Group employees around the world regarding their own
CSR activities.

19

Kang Xudong
I am using a program called “Ant Forest,” in which you can register theenvironmental activities you are undertaking in your own daily life, and, when
you reach a certain target, apply to have trees planted. In 2017, I was able toplant five trees in Inner Mongolia and Gansu Province. In 2018, I will pursue
daily environmental activities with a target of planting six trees.

Sustainability Report 2018[Europe Region]

Address the Gender Pay Gap
and Cultivate the Next Generation
In Europe, a range of CSR-related laws have been enacted, particularly in
the UK. These include the Modern Slavery Act and GPG legislation, whichaims to address the gender pay gap.
Compliance with these laws is a given, but we will also strive to pursue
activities that go beyond that. In Romania, where a second production plantis under construction, we are pursuing initiatives aimed at cultivating thenext generation.

Addressing the Gender Pay Gap

Nurturing the Next Generation ThroughFactory Training

In the United Kingdom, under The Equality Act 2010 (Gender Pay Gap
Information) Regulations 2017, companies with 250 or more employees
are obligated to release data on the gender pay gap every year.
The Calsonic Kansei Group has set role-based wages at all levels of theorganization and does not differentiate between men and women.
In Fiscal 2017, the average gender pay gap was 3.63% at CalsonicKansei Sunderland Limited (CKSU) and 3.65% at Calsonic Kansei UK
Limited (CKUK). This was well below the average for British
companies, but the fact remains that there are still few women at thesenior management level.
We will continue to review our personnel evaluation systems, bethorough in determining and disclosing pay gaps, and cultivate
leadership and technical capabilities, regardless of gender.

At Calsonic Kansei Romania S.R.L. (CKRO), we have partnered witheducational institutions to offer educational programs such as workshops forstudents, in order to support their future development.
In Fiscal 2017, we conducted factory training for students aged 14-18 years.
This program was an excellent opportunity for students to put into practicethe theory they have learned at school, using CKRO’s actual factoryequipment.
Comments from the students included, ‘I was able to increase my awarenessof the work processes,’ and ‘I hope to work at CKRO in the future.’
In Romania, where many citizens have to travel to other countries to findwork, policies are being put in place on a nation-wide basis to increase therate of employment in the country.
Going forward, we will further enhance our programs in partnership witheducational institutions around the country to cultivate the next generation, as
well as pursuing activities that will help to create jobs in Romania. We wish to
give something back to society and contribute to its sustainable growth.

Amanda Parry

Daniela Ionescu

Senior Manager
Human Resources
Calsonic Kansei Europe plc.

Manufacturing Trainer
Production Management & Support
Calsonic Kansei Romania S.R.L.

Sian Phillips
Working with the Welsh government, other companies, universities, colleges andtraining organizations, we participate in technical conferences and strive to engage
pupils to study Science, Technology, Engineering and Mathematics (STEM)
subjects.

Teruhisa Fujinuma
Our French office is active in community engagement as a Japanese company withbases in France. We will continue with these contributions in Fiscal 2018 to embed
our image in the community as a company that can be trusted.

20

Sustainability Report 2018

[Americas Region]

Engaging in
Community Contribution Activities With PrideIn the Americas, as a company with roots in the community, we
participate in a variety of community events.
We are actively engaged in the cultivation of the next generation,in partnership with government and others.

Promoting Locally-oriented Social
Contribution Activities

Providing Educational Programs forChildren and YouthAt Calsonic Kansei Mexicana, S.A. de C.V (CKMX), we haveconducted a wide range of social contribution activities, such as
disaster-readiness training in collaboration with the fire department,
distributing Christmas presents to sick and disadvantaged children,
donations to hospitals, clean-up activities in the area around the plant,
and traffic safety campaigns.
In 2017, our locally-oriented social contribution activities wererecognized with our accreditation as a “socially responsible enterprise(ESR) by CEMEFI*.
This accreditation is valid for one year, so we will continue to pursue
these kinds of initiatives with the aim of receiving it again this year.

Calsonic Kansei North America, Inc. (CKNA) has partnered with local
schools in an educational support activity called Partners in Education.
CKNA supports individual STEM* activities and Career Day programs,
in which children are given the opportunity to think about their future,
as a way of showing them how enjoyable and rewarding working canbe and teaching them about society’s expectations.
The program has been so successful, that we have received requests
from other schools in the area to conduct similar activities, so we plan
to expand the scope of our activities going forward.
*STEM
Collective term for science, technology, engineering and mathematics education*CEMEFI(Centro Mexicano para la Filantropía)
Established in December 1988. A nongovernmental, not-for-profit organization that aims
to promote a culture of philanthropy and corporate social responsibility and to encouragecommunity engagement.

Ricardo Ponce de Leon

Jason Jones

Director
Human Resources & Compliance
Calsonic Kansei Mexicana, S.A. de C.V

Calsonic Kansei Production System Coordinator
Calsonic Kansei North America, Inc.

Tanya Snoddy
In Fiscal 2017, CKNA established the Americas Risk Management Committee andis pursuing CSR activities. We conducted training on ISO 26000 in Fiscal 2017, in
which we explained the certification’s connection to CKNA’s CSR activities. We willcontinue to raise awareness within the company about those activities.

21

Shelly Bowers
We recently exhibited at a CKNA booth at a job fair for high school students. As
well as presenting our education programs, we showed visitors to the booth the funof Monozukuri with activities such as a build-your-own mousetrap car. We hope tocontinue our involvement in activities to support the next generation.

Sustainability Report 2018

[Asia Region]

Raising Awareness of CSR Across the Entire Supply Chain
and Contributing to the Local Community ThroughEnvironmental Protection Activities
Thailand is one of the Calsonic Kansei Group’s major production bases in Asia.
By sharing our CSR Vision not only with our own employees, but also with our
suppliers, we aim to raise awareness of CSR across the entire supply chain.
We are also contributing to the local community through a range ofenvironmental protection activities, such as tree-planting activities.

Sharing Our CSR Vision with Suppliers

Promoting Local Environmental Protection
Through Tree-planting

Calsonic Kansei (Thailand) Co., Limited is strengthening its ties with
its suppliers through its annual supplier meetings.
For the further pursuit of solutions to social issues through business,collaboration with our suppliers is essential. Based on that thinking, atthe supplier meeting for Fiscal 2017, we conveyed the CalsonicKansei Group’s thinking on CSR and discussed CSR trends.
Looking ahead, we plan to pursue concrete collaborative actions
through our sales, purchasing, and other business divisions.
To raise motivation, we are considering establishing an awards
scheme for suppliers that pursue particularly impressive activities.

Through its business of manufacturing automotive components, theCalsonic Kansei Group is deeply connected to emissions of CO² andother greenhouse gases.
As well as making our products in ways that produce fewer CO²
emissions, we are also promoting environmental protection throughtree-planting activities in the various regions.
CKT is conducting tree-planting activities in the Chonburi region andsurrounding areas.
In Fiscal 2017, our employees, together with other companies in theregion of the plant, our customers, and our suppliers, we planted
4,000 trees.
These local environmental protection activities, particularly thetree-planting, received high praise and, in March 2018, we received
the Environment and CSR Good Governance Award 2017.
In Fiscal 2018, we aim to plant 10,000 trees.

Chalavalai Wutthikornkriengkrai

Employees Representative Group

Vice President
Organization Promotion Division
Calsonic Kansei (Thailand) Co., Limited

Calsonic Kansei (Thailand) Co., Limited

Nadchaya Teansaguan
Chonburi Province, where CKT is located, has many very popular beaches.
In order to the beautiful beaches, Fiscal 2018, we will engage in clean-up activities
on the beaches and around our own homes. Even though each individual’s actions
may only be small, I believe that the accumulation of all those small actions willlead to big impacts.

Kanchana Inborisuth
By participating in a range of volunteer activities, I am raising my own awarenessand deepening my engagement with the local community. In Fiscal 2018, together
with my CKT colleagues, I will engage in activities to support disadvantaged
schools in Thailand. We plan to fix up the schools’ playgrounds and donate books
and other supplies to the schools.

22Sustainabilit y Report 20182017 in Review: Highlights

Japan = Calsonic Kansei Corporation and Group companies in Japan
Global = Calsonic Kansei Corporation and Group companies in Japan and overseas
CK = Calsonic Kansei only

[Organizational Governance]

Establishing the Foundations for Responsible Management
The Calsonic Kansei Group believes it is vital to contribute to creating a prosperous society
through our business activities and to have excellent relationships with all of our stakeholders.
To remain a trusted company in society, we have established corporate governance policies with astrong focus on CSR.
With a commitment to law-abiding and ethical management, we are enhancing risk management
and building systems able to achieve stable product supply in emergency situations.

Highlights
Corporate Governance Structure
General Shareholders’ Meeting

CK

Changes to Corporate Governance Structure
to Speed up Decision-making

Appointment/dismissal

Appointment/dismissal
Reports

Audit

On May 8, 2017, Calsonic Kansei withdrew its listing from the First Sectionof the Tokyo Stock Exchange.
With the objective of realizing speedier decision-making by Calsonic Kansei
Corporation, Calsonic Kansei established a corporate governance structure
consisting of a Board of Directors, with three directors who concurrently
serve as executive officers, and one auditor.
Also, in terms of Calsonic Kansei’s relationship with its controllingshareholder, as a wholly-owned subsidiary of CK Holdings (CKH), an entity
wholly owned by Kohlberg Kravis Roberts (KKR), Calsonic Kansei isworking to increase the diversity of its Board of Directors membership,
under the supervision of the CKH Board of Directors.
The auditor monitors the performance of Directors in carrying out theirduties, and also works with the auditors of CKH to audit the execution ofbusiness related to all aspects of the Group’s management.
In addition, outside auditors conduct accounting audits, in which they verify
the appropriateness and legal compliance of accounts and of internal
controls related to the accounts from an independent standpoint.
The current structure has been chosen because we believe thesemeasures will ensure the effectiveness of our corporate governance.

Auditors

Accounting Auditors

Audit

Accounting Audit

Internal Control Committee
Risk Management Committee

Chief Executive Officer(CEO)・Compliance Risk Management
Committee
・Information Security Committee
・Others

Global Executive
Committee (GEC)[CK-DOA Committee /Health and Safety Committee /Environmental Management Meeting /Export Control Committee /J-SOX Steering Committee]

Internal Audit
OfficeReports

Audit

Each division/business unit
and Group Company

BCP Procedure

GlobalBusiness Continuity Planning (BCP) for
Entire Value Chain in Preparation for Emergencies
As part of its business continuity planning (BCP), the Calsonic KanseiGroup has established the Disaster Management Regulations, in
preparation for disasters such as earthquakes and typhoons. Based onthese regulations, we have also developed the Company-Wide Disaster
Prevention Manual, which is an action guide for employees to follow.
With 80 production sites in 15 countries manufacturing numerous
automotive components, in the event of a disaster, the task of ensuring the
supply chain amid production recovery operations will take on immense
importance.
To achieve this, we have established a BCP Procedure.
In addition, even in normal times, for certain electronic parts we are using a“multi-fab”system where we order the same part from multiple plants.
In Fiscal 2017, we began considering ways of further strengthening ourcollaborative structures with suppliers in the area of BCP.
Specifically, we implemented automation of product information linking
between customers, suppliers and ourselves, and confirmed the status of
supplier BCP implementation, including at overseas plants.

Vicki Manghan
We provide skills training programs for local students to increase theiremployability in the future.

23

Reports

Board of Directors
Reports
Appointment/dismissal/
supervision

Reports

Appointment/dismissal

Normal production

Disaster strikes
Emergency production

Launch of Central Disaster-ReadinessResponse Headquarters

Consider alternative products /prepare change plan

Affected products identified

Adjustment of delivery times
for products to customer

Products for delivery to customer identified

Application and approval proceduresfor process changes

Unified management of inventory/
requirements information

Confirmation and allocation of global
requirements/inventory

Jessica Truss
As a Production Technician, I was fortunate to participate in a special activity
centered around Genba Kanri and how it works. The biggest impact for me was thesafety training which helped me understand the importance. I’m truly grateful forthe experience and the training I’ve received.

Sustainability Report 2018

[Human Rights]

Fostering a Corporate Culture of Respect for Human Rights
In the Calsonic Kansei Code of Conduct, the Calsonic Kansei Group clearly states that it respects
diversity and human rights.
We established the Basic Policy for Human Rights and the Human Rights Priority Policy. Throughthese concrete policies, we are thoroughly promoting human rights and labor considerations
among employees, and accelerating Group-wide actions that will encourage more respect forhuman rights in the supply chain.

Highlights
GlobalEncouraging More Respect for Human Rights
In April 2016, the Calsonic Kansei Group published the Basic Policy for
Human Rights and the Key Policy on Human Rights.
To ensure that our operations can be pursued with respect for ethnicity,
culture, and other factors in diverse countries and regions, we conduct

education and raise awareness to thoroughly instill our human rights
policies in all employees of the Group.
In Fiscal 2017 also, we adopted a variety of approaches, including thosedescribed below, to instill these policies throughout the Group.

CSR NEWS

Information published in company
CSR newsletter

Information published in CSR Handbook
read by all employees

Human rights training as part of
new employee induction training
Approx. 220 trainees★★

Notices on company electronic
noticeboards on Human Rights Day★

★= Calsonic Kansei only; ★★= Japan: Calsonic Kansei and domestic Group companies; Overseas: Group companies overseas

GlobalHuman Rights Due Diligence in the Supply Chain

Due Diligence Survey
Rolled out to

We are conducting due diligence of our suppliers using a survey whichcontains questions about human rights.
In Fiscal 2017, we rolled out surveys to our 225 major suppliers.
After analyzing the opinions, questions, and survey responses received,
we will provide feedback to the suppliers and reflect the results in the CSR
Medium-term Business Plan and other plans.

225

Suppliers*As of March 19, 2018

GlobalResponse to UK Modern Slavery Act
Calsonic Kansei Europe plc. (CKEU) published its first annual statement inresponse to the UK Modern Slavery Act* in Fiscal 2016.
In Fiscal 2017, CKEU again prepared and published an annual statement.
In addition to activities to raise awareness within the company, CKEU also
made efforts to raise awareness among its suppliers by conducting due
diligence and distributing the Calsonic Kansei CSR Guidelines for
Suppliers.
For the prevention of forced labor, human trafficking, illegal child labor, andother similar acts, these initiatives will be extended globally beyond theUnited Kingdom. We will continue in our endeavors to fulfil our
responsibility to respect human rights across the entire supply chain.

Yuko Nakagawa
As a nurse engaged by the Yoshimi Plant, I support the health of the plant’s
employees. I want to create a culture in which everyone supports each other andworks happily.

* UK Modern Slavery Act 2015
Legislation that requires enterprises to prepare and publish an annual statementon the actions they have taken to guarantee that they have not been involved inslave labor or human trafficking.
For-profit organizations and companies that are engaged in business activity in the
UK and that have annual sales of over GBP 36 million, are subject to thisobligation.

Wu Haijun
In Fiscal 2017, I donated blood on two occasions. I hope to continue participatingin blood donation in the spirit of helping one another and to make society better.

24

Sustainability Report 2018

[Labor Practices]

Creating an Organization that Values the Individual and Diversity
The Calsonic Kansei Group has established the CK WAY, common action guidelines for all
employees, and the CK Leadership Competencies (CKLC), which serve as the basis for all theactivities of those in managerial positions. These guidelines provide a common set of values
throughout the entire Group and are put into practice in our workplaces.
Our aim is to promote diversity and work/life balance and to create workplaces in which all
employees can work with energy and vitality. At the same time, we are striving to enhance ourevaluation programs and human resources development programs so we can take advantage ofthe skills and diversity of every individual.

Highlights
Japan

Fair Treatment and Evaluation that Takes Advantage of Individual Skills and Diversity
The Calsonic Kansei Group and its Group companies in Japan revise
annual salaries and wages based on competency evaluations, using the CKWAY and CKLC as evaluation parameters, and provide incentives andbonuses based on individual performance evaluations.
There is no difference in base salary or total compensation between maleand female employees on the same labor rank.
Competency evaluations are held once a year, while individual performance
evaluations are held twice a year in the form of a face-to-face interview
between employee and supervisor. During these interviews, evaluation
feedback is provided and individual career development is also discussed.

Japan/Global

Promoting Occupational Health and Safety
Every year, Calsonic Kansei and its Group companies in Japan set certain
challenges and strive to raise the level of their performance in occupational
health and safety.
In Fiscal 2017, in response to the Top Safety Declaration at each businesslocation, a review was performed of the previous year and each businesssite engaged in improving its individual weaknesses.
Other action in Fiscal 2017 included the publication of an Occupational
Health and Safety Manual and the establishment of audit criteria.
Further, with the objective of PDCA confirmation, it was decided to conduct
once-yearly audits of each business site going forward.
There were no serious incidents or fatal accidents in Fiscal 2017. The
Frequency Rate* for the entire Group fell from 1.49 in Fiscal 2016 to 1.42 in
Fiscal 2017.

3.0
2.5
1.88
2.0
1.49

1.5

1.42

1.0
0.5
0

2015

2016

2017

* Frequency Rate: Number of fatalities and injuries due to workplace accidents per 1,000,000 hours worked

Monozukuri Human Resources Development

GlobalHuman Resources Development to
Expand Individual Capabilities
The Calsonic Kansei Group believes that, above all else, it is its people whoare instrumental in the company’s sustainable growth. The Calsonic KanseiGroup is committed to the development of its human resources, with apriority on “Monozukuri ” and “global” perspectives.

13

Global Human Resources Development
Skills Meisters

Introduction of the Skills Meister System (CK only)
At a meeting of the Meister Certification Committee held in February 2018, one new
Meister was certified, bringing the total to 13.

Emi Odajima
As a member of the diversity promotion team, shine.net, I aim to create
environments that employees find pleasant to work in.

25

To further improve the Monozukuri capabilities that have been strengthened
through global competition and roll out these capabilities on a global level,
we conduct training for the acquisition of knowledge and skills in a planned
manner. This training includes CKPS (Calsonic Kansei Production System)
training, which forms the foundation for Monozukuri at Calsonic Kansei, as
well as various specialized technical training programs.
Also, to clarify the necessary skills for Monozukuri, we have introduced a
Skills Meister System.

For the purpose of developing the next generation of global businessleaders, each year, we conduct Global Business Leader Training (GBLT), a
group training program conducted in English for leader candidates from eachcountry and region, including Japan.
Further, to develop global Monozukuri human resources, we conduct Global
Factory Manager Training for factory managers and factory manager
candidates from each country and region.

Nuchjaree Jailak
I will get involved in charity activities to support disadvantaged children and people
with disabilities. For example, I would like to conduct a campaign to collect ring-pulltabs and donate them to a prosthetics organization.

Sustainability Report 2018

CK

GlobalEmployee Data

Promotion of Diversity
In the belief that creating new innovations through healthy conflict between
employees with diverse values will lead to the growth of the company and thegrowth of the individual, the Calsonic Kansei Group considers promoting
diversity as an important management strategy for the entire Group.
Japan

A company Where Women Can Shine
Calsonic Kansei aims to create workplaces and working styles that make itpossible to maximize the capabilities of women at various life stages, such as
childbirth and childcare. Accordingly, we listen to our employees’ voices
through employee opinion surveys and through the Working Style Improvement
Committee and Diversity Promotion Team.
The results of such activities are reflected in our various diversity promotion
measures. We have set a goal of at least doubling the number of female
managers from 2016 (15 as of March 31, 2016) by the end of March 2021. Thisis part of the General Employer Action Plan that we were required to create
under the Act on Promotion of Women’s Participation and Advancement in the
Workplace.
Number of employees returning
to work after maternity leave100%

Eruboshi Mark
Calsonic Kansei obtained the highest
level of certification under the Eruboshi
Mark scheme in 2016. This scheme
recognizes companies with an excellent
record in terms of implementing
initiatives to promote women’s
advancement in the workplace.

2015

2016

2017

Number of
regular employees

3,643

3,741

4,056

Male

3,352

3,419

3,657

Female

291

322

399

Average age (years)

44.4

44.2

43.7

Length ofcontinuous
employment (years)

19.4

18.3

17.5

Turnover rate (%)

1.0

1.3

1.2

6,237,718

6,394,249

6,293,193

1.93

2.07

1.99

13

14

18

0

1

1

Average yearlysalary (yen)Kurumin Mark
Calsonic Kansei obtained the Kurumin
Mark, a certification granted to“corporations that support childcare” in2015, under the Act on Advancementof Measures to Support Raising
Next-Generation Children.

Rate of employmentof people withdisabilities (%)

Company that Practices Diverse
Working Styles (Saitama Prefecture)
In 2012, Calsonic Kansei was chosen
as a certified company under the
Saitama Prefectural Government’s
Scheme for Certification of Companies
That Practice Diverse Working Styles.

Number of employees
taking childcare leave
Number of employees
taking nursing
care leaveJapan

Encouraging a Good Work-life BalanceCalsonic Kansei and its group companies in Japan have put systems in place to support the different lifestyles of our employees, which are becoming
increasingly diverse every year as the structure of society changes. The systems we have put in place under the Act on Advancement of Measures to Support
Raising Next-Generation Children exceed the standard required by the legislation.
ChildbirthNursing Care

Pre-and post-birth maternity leave

Measures for health examinations, etc.

Nursing care leave scheme

Flextime scheme

Expectant mothers are entitled to 6 weeks’maternity leave or, in the case of a multiple
pregnancy, 14 weeks, dating back from the duedate, and to 8 weeks’ leave counted from the day
after the child is born.

On request, pregnant women and new mothers may
be excused from work for the time required toreceive health guidance or undergo healthexaminations during pregnancy and up to one year
after the child’s birth.

Employees with less than one year’s service may
also take nursing care leave (under the legislation,
employers may exempt employees of less than one
year from such leave).

A flextime scheme has been introduced that has nocore time requirements, with the exception that
employees work at least one hour between 8:30
a.m. and 5:30 p.m.

Child care leave

Regular consultation scheme

Shorter working hours to care for children

Employee welfare programs

Employees may take child care leave up to the April
after the child turns two years of age.
(The legislative requirement is for up to eighteenmonths of age.)

Consultations are set up for employees on childcare leave to make it easy for them to return towork.

Employees may work shorter hours until the child
graduates from elementary school.
(The legislative requirement is up to third grade ofelementary school.)

A scheme under which employees may choose
from approximately 20,000 programs to best suit
their lifestyle will be introduced in Fiscal 2018(available for employees and their families.)

Child Care

GlobalWork-style Reform
With the objective of creating highly satisfactory workplace environments byraising operational productivity, achieving higher added value, and realizing
diverse working styles, the Calsonic Kansei Group has been engaged in thereform of working styles in earnest since Fiscal 2017.
Specific initiatives include setting specific times when meetings with

Employee Representative Group,
Calsonic Kansei North America
CKNA participated in Relay For Life, an event that supports cancer patients andtheir families, and donates to the cause. This event is an all-night marathon relay.
Cancer patients, even though they may be exhausted, cannot rest. By running therelay, we can experience what they are feeling, if only for one night. We willcontinue to participate in this event, in the hope that we can provide support to as
many people as possible.

overseas locations may be held and thorough implementation of rules for
conduct of meetings, active use of ICT, thorough operational efficiency
improvements, particularly in indirect divisions, and the systemization ofvarious procedures and processes.

Katina McCoy
The Madison, MS near-site plant, which began operating in May 2017, with the goal
to be environmentally compliant and sustainable from the beginning. The Plant is
operating in ways that are considerate of the local community and the environment.
This includes the establishment of methods for recycling cardboard and plastic, andobtaining a Certificate of No Exposure from the state’s Department of Environmental
Quality for its initiatives to prevent outflows of contaminated storm water. Our goal is
to be a good neighbor to those around us as well as to the environment.

26

Sustainability Report 2018

[The Environment]

Environmental Initiatives
The Calsonic Kansei Group recognizes the importance of contributing to the realization of asustainable society through environmental protection initiatives.
To respond to the demands for consideration of the environment imposed on companies by theinternational community, including the Paris Agreement, we strive to raise environmental awareness in each and every one of our employees. We are also engaged in the development ofenvironmentally friendly products and the continued reduction of the environmental impact of ourbusiness activities.

Highlights
CK Green Policy (Environmental Policy)

GlobalCK Green Policy (Environmental Policy)
To further enhance its initiatives to protect the environment through its global
corporate activities, Calsonic Kansei revised its Environmental Policy
established in 2000, relaunching it in Fiscal 2017 as the CK Green Policy,
which comprises the Basic Environmental Policy and Environmental Action
Guideline.
Based on this Policy, we will all engage in environmental activities as one
team and contribute to the realization of a sustainable society, as declared in
the Calsonic Kansei Vision.

Basic Environmental Policy
To contribute to build a sustainable society, each individual shall strive to protect the environment at
every stage of our business activities.

Environmental Action Guideline• Continuously improve current target-achieving activities and environmental management
systems globally by setting annual plan based on compliance, social demands, and long-term vision.
• Promote development of environmentally friendly products, with consideration to the lifecycle.
• In addition to making efforts to prevent pollution and complying with laws and regulations, etc.,
promote reduction of environmental impact caused by corporate activities.
• Enhance communication with stakeholders. Promote coordination, cooperation and involvementwith local communities, governments, and municipalities regarding environmental protection.
• Build coordination and cooperation not only with affiliates but with customers and business
partners towards reduction of environmental impact on the overall supply chain.

GlobalPromoting Innovations in Energy Management
In our six-year Medium-term Business Plan CK GX4 T10, which covered
Fiscal 2011 to 2016, we declared “Green” as one of the keys to our growthstrategy, and aimed to create at least ten types of next-generation
environmental technologies or products that would lead the world. By theend of Fiscal 2016, we had succeeded in the commercialization of those
products.
From Fiscal 2017, under our new Medium-term Business Plan Compass
2021, we have declared our goal of pursuing energy management as one ofthe pillars of our core domains.
Boasting the world’s largest track record in mass production of inverters andbattery management systems, we are leveraging our power management
and heat management technologies to provide comprehensive energy
management.
We have also stepped up our approaches to the development oftechnologies to bring mobility with minimal environmental impact, such as
electric vehicles, closer, and to the development of products that willcontribute to purifying exhaust gases and improving fuel efficiency.
Cabin Innovation

Energy Management

Safety /comfort technologies

Environmental
technology
CO₂ reductions
Fuel efficiency
improvement / Energy
efficiency
Contribution to
popularization ofelectrification

Development of
comfortable cabin
environments
Development ofenvironments forappropriate
recognition, judgment,
and operation

Innovations in Thermal
Energy Management
Innovations in Electric
Energy Management

Alexandra Kirsanova

27

We are reducing the use of mercury lights. Previously, many of the lights used on
the factory floors and in our offices were mercury lights. Replacing mercury lights
for LED lights will reduce wastage and mitigate the impact on the local
environment. At the same time making the production lines much brighter.

Products in the Energy Management Domain
Sheet metal turbine housing CK-SMiTH
Improvement of exhaust gas purification andfuel efficiency performance[Purpose]This is a turbine housing of a turbocharger for engines forautomobiles. It suppresses the exhaust gas temperaturedrop and improves the temperature rise performance of
catalysts. In addition, by reducing weight, it improves not only
exhaust gas purification performance but also fuelconsumption performance, contributing to significant
environmental improvement.

[Strengths]

CK-SMiTH uses pressed components made from thinstainless steel. This is used to make the gas passage andthermos-like double-wall structure.
In addition to the design of the double-layer exhaust manifoldof the exhaust part, testing, and production engineering(pressing and welding techniques), the mass production ofthis product was realized by integrating high-precision
machine molding techniques and measuring techniques
required by turbocharger products.
Vane-rotary compressor with fixed displacement: CR Series of
fixed displacement compressors

Small and light with high energy efficiency (→p.12)
Inverters
Alternative to gasoline for vehicle power(contributing to the popularization of electrification)

Li XiaOn Arbor Day in March, we all engaged in tree-planting and volunteer activities
under the principle of contributing to the local community. We will continue these
initiatives in Fiscal 2018.

Sustainability Report 2018

GlobalApproaches to Climate Change
We are engaged in a “carbon minimum” activity to reduce environmental
impact, with the goal of realizing a low-carbon society.
Our total CO² emissions in Fiscal 2017 came to 199,000 t-CO².

In terms of emission intensity (total CO2 emissions/sales revenue), thepursuit of activities aimed at respective reduction targets of 20.5% forJapan and 15.8% for overseas compared to Fiscal 2005 resulted in
reductions of 31.2% in Japan and 21.1% overseas in Fiscal 2017, well
above target.

Calsonic Kansei Group CO² Emissions by Region

Trends in Calsonic Kansei Group CO² Emissions
and Emissions Intensity[Unit: Thousand t-CO²][Thousand t-CO²]
300

Asia

[t-CO²/million yen]
0.3

0.285

36

0.24

18%
Japan 73CO2

13%199,000

0.232

0.222

0.219

0.206

0.204

0.215

200

37%
Europe 25

0.225

0.2

80

111

117

124

126

125

126

127

126

103

81

82

74

74

70

67

71

73

100

0.1

Americas 65
32%

0

t-CO2

2005

2010

2011

2012

CO² emissions in Japan (left axis)
CO² emissions intensity (right axis)

Global

2013

2014

2015

2016

2017

0.0

CO² emissions overseas (left axis)

GlobalPromoting Resource Recycling /3R (Reduce, Reuse, Recycle)

Strengthening Approaches to
Reduction of Water Use

With an emphasis on the effective use of resources, we are engaged ininitiatives to reduce waste and achieve zero landfill.
In Fiscal 2017, we began recycling and re-using plastic containers used forin-house logistics, leveraging Calsonic Kansei’s plastics processing
technology.
Through the in-house recycling of these plastic containers, which previously
would have been discarded, we are not only reducing waste, but also
helping to improve technologies for the use of recycled plastics.
Globally, through the continuation of initiatives for the reduction of process
defects and conservation of resources at each plant, we were able to reachour medium-term targets in Fiscal 2017 as well.

We are engaged in the reduction of water use, from the perspective of theprotection of water resources.
Through the monitoring system established globally in Fiscal 2014, we havebeen able to identify those production sites with high volumes of water use
and problematic equipment.
In Fiscal 2017, we put a variety of initiatives in place at our global sites,
including replacing equipment to contribute to reduced water usage andadopting efficient water use systems in flushing toilets. As a result, we wereable to reduce water use intensity by 4.8%.

Waste Intensity[Waste / Sales revenue]

Japan

Water Use Intensity

Japan

Fiscal 2017[Landfill volumes /Waste volumes]

-24.8
-16.9

FY2017 target: -6.9%[Compared to Fiscal 2010]%

Target continuously achieved since FY2006

Overseas%[Usage volume /Sales revenue]

0%

FY2017 target: -19.7%[Compared to Fiscal 2005]

Overseas

Zero Landfill

0

4.8

%

FY2017 target: Maintain zero landfill

Komina Murakami
I try to be conscious of environmental protection in my daily work, by pursuing areasonable level of energy conservation and separation of trash.

% Reduction

FY2017 target: Global: -2.0%[Compared to Fiscal 2016]

Tomoya EmoriI strive to make improvements on the factory floor by bringing together theknowledge and experience of related departments, to realize a safe workplace andcreate high-quality products. I pick up information about near misses from thefactory floor on a regular basis and aim to eliminate unsafe situations and behavior.
I will also continue to embrace the challenge of creating a workplace that is safe
and comfortable for everyone.

28

Sustainability Report 2018

[Fair Operating Practices]

Practicing Compliance Based on the Code of Conduct
The Calsonic Kansei Group recognizes the importance of all employees practicing compliance,
based on a strong sense of ethics.
Since the establishment of the Global Code of Conduct for the Calsonic Kansei Group in 2003, wehave conducted exhaustive education and awareness-raising of employees, with the goal ofstrengthening our global compliance regime.
We have also strengthened communications with our suppliers and are pursuing initiatives acrossthe entire supply chain.

Highlights
GlobalGlobal Roll-out of Compliance Education
Every year, the Calsonic Kansei Group conducts training on the Code of
Conduct, which has been prepared in the respective languages of eachregion, and collects pledges in order to strengthen awareness aboutcompliance.
In Fiscal 2017, 100% of our employees in Japan and overseas, including
corporate executives, signed pledges.
As part of our education on the Code of Conduct, we also provide education
as necessary on the global risks of anti-trust law and anti-bribery law.
For these risks, we have established basic policies and rules regardingthese two risks – global (group-wide), for our Japanese locations, and for ouroverseas locations, and conducted communication and awareness-raising
activities across the entire Group.
In Fiscal 2017, in addition to total-participation education programs, we also
conducted anti-trust law training for our executives in Japan.

Anti-trust law training for executive members in Japan

Anti-bribery Training Participants (FY2017)

Number of Whistleblowing Cases (FY2017)
Participants

347

cases

Japan

4,863

Americas362

EuropeChina

107

Thailand99

67

Malaysia

373

Total

5,871

Due to the thorough communication of the internal
whistleblowing system and careful handling to ensure thatthe whistleblower is not put at a disadvantage, thenumber of internal whistleblowing cases has been
increasing every year since 2015.

GlobalPromoting CSR in the Supply Chain
With the expansion of the Calsonic Kansei Group’s business, its supply
chain is also expanding globally. To promote CSR activities, we aim to
improve our CSR management by sharing our ideas and policies with our
suppliers.
In Japan, with the roll-out of the Calsonic Kansei CSR Guidelines for
Suppliers, we have asked our suppliers to be thorough in theircommunication of compliance, including the prevention of bribery. We arealso making efforts to ascertain the state of approaches to key CSR issues
established by the Calsonic Kansei Group by conducting CSR due diligencesurveys.
In Fiscal 2017, we rolled out a revised version of the CSR Guidelines for
Suppliers (Japanese and English), which includes the addition ofrequirements regarding handling of conflict minerals, to 364 companies andentered into a “Confirmation of Agreement” with them.
We also conducted a Supplier Due Diligence Survey, comprising 80
questions in seven categories, of 225 companies.
We will continue to promote CSR activities that include our supply chain.

Suvimon Lamaimuang
I am involved in a charity project to improve the lives of disadvantaged children
who have few educational opportunities.

29

CSR Guidelines
for Suppliers(364 companies)

Calsonic Kansei Group

Suppliers

Confirmation of
Agreement

Yang Huanhuan
I participated in tree-planting activities with my family.
This time, the three of us planted three seedlings. I am happy I was able to makemy own small contribution to environmental protection and I plan to continue withthis activity in the future.

Sustainability Report 2018

[Consumer Issues]

Providing Safe, Quality Products
The Calsonic Kansei Group is focused on quality as an essential element required to meet the
expectations of various customers, from improving performance to ensuring safety and reliability
and achieving comfort.
Based on this approach, we consider quality to be one of the most important key issues for thecompany as a whole, and continue to provide high quality in all processes, including development,
sales, purchasing, design, production, and logistics.
We also focus on improving our customer responsiveness through such activities as ongoingcustomer satisfaction surveys.

Highlights
GlobalFirst to Comply With New International
Quality Standards

The Calsonic Kansei Group is taking the lead in the improvement oftechnological capabilities in quality and reliability.
With the amendment of ISO/TS 16949, the international standard for quality
management systems for the automotive industry, we are pursuing activities
to bring our quality management systems into compliance with the newstandard, IATF 16949, and to obtain certification for all of our global sites.
In Fiscal 2017, we obtained certification for 16 sites, and we are scheduled
to complete certification of all sites by September 2018.
Further, we have investigated the global market environment and replicatedthe market environment through state-of-the-art equipment and experimental
evaluation technologies, and conducted product development in the fourstages of vehicles, systems, components, and elements/materials, thus
ensuring a high level of development quality.
We ensure that our Development Quality Assurance Process is carried out
without fail, in pursuit of developing products that are safe, durable, and thatsatisfy our customers.
DesignExperimentation and verification

Vehicle compatible
designSystem compatible
designSystemevaluation

Systems

Component
designComponent
evaluation

Components

Elements/materials
design

EMC Test, a type of verification test at the “vehicle” stageof the Quality Assurance Process (right)

Vehicle performance
evaluation

VehiclesElements/materials
evaluation

Elements/
materials

Development Quality Assurance Process on Four Levels

GlobalReflecting Customers' Opinions Opinions in Improvements
The Calsonic Kansei Group hopes to be an industry leader in Monozukuri in automotive
society and to continue to provide a range of values.
To push forward vigorously in Monozukuri that is of high quality, competitive, and that meetsthe needs of our customers, we are dedicating efforts to our customer service capabilities.
To this end, we have been conducting Customer Satisfaction Surveys since 2005.
The Customer Satisfaction Survey asks respondents to evaluate Calsonic Kansei on a
five-point scale in the individual categories of Quality, Cost, Delivery, Development,
Management, and Sales (QCDDMS). It also seeks comments from respondents on specificrequests for improvement.
In Fiscal 2017, we received 724 responses to the survey. The overall grade, at 3.43 points(of a maximum of 5 points), was the highest on record.
With this survey as a point of connection, we will further enhance our communication withour customers and aim to improve customer satisfaction.

Shunji Kikuchi
I pursue my work with the motto of “providing safe, reliable products and services.”
I conduct ample confirmation of equipment safety prior to shipment and provide
meticulous support after installation.

3.43
3.35
3.28

3.30

3.36

3.31
3.26
674

715

711

705

724

2014

2015

2016

2017

581
469

2011

2012

2013

Number of responses received

Score

He Yunfei
Fans of outdoor sports in the company came together to combine a hike with amountain clean-up activity. The walk also served as a health promotion activity.

30

Sustainability Report 2018

[Community Involvement and Development]

Contribution to Local Communities
From the perspective of creating a sustainable society, companies are being called on to build
relationships of co-existence and co-prosperity with the diverse communities that they come into
contact with through their business.
As a corporate citizen, the Calsonic Kansei Group is actively involved in activities for the support
of future generations and community activities in local communities. We engage in social contribution from multiple angles, leveraging the Group’s characteristics and know-how.

Highlights
GlobalStrengthening Social Contribution Activities in Our Global Operations
The Calsonic Kansei Group is expanding its social contribution activities, so that it may
contribute to a better society on a global scale, with a focus on four domains.
In the expansion of these activities, we place importance on the expectations ofstakeholders and on communicating with them, with the aim of contributing to regional
development and solving social issues.

Supporting the next generation

SafetyEnvironment

CommunityJapan

Support for the Monozukuri Human Resources of the Future
Team SKETT, a team of volunteers whose members are drawn from an
open call for participants from within Calsonic Kansei and its Group
companies in Japan, conducts a wide range of activities to give elementary
schoolchildren hands-on experience of Monozukuri.
Team SKETT has exhibited at Kids Engineer, a hands-on exhibition forelementary school pupils organized by the Society of Automotive Engineersof Japan, Inc., every year since the inaugural event in 2008.
In Fiscal 2017, at Kids Engineer 2017 in Nagoya and at Mini Kids Engineer
in Tohoku, held in Sendai, more than 3,000 people participated in achallenge to assemble a cockpit module, where they learned the enjoymentof Monozukuri.
We also exhibited at the Parent-and-Child Kids Engineer event held by the
Automobile Business Association of Japan, where more than 300 people
participated in a hands-on building experience.
In our Traveling Classrooms for Elementary Schools program, which began
in 2012, we conveyed the fun of science to more than 800 elementary
school pupils at more than 16 school in Fiscal 2017.

Number of Participants Attending Kids Engineer (Fiscal 2017)

More thanTraveling Classrooms for Elementary Schools

Traveled to more than16

elementary schools

Kaythirat Lerddararatsamee

31

Together with some colleagues, I participate in the “Friends Helping Friends
Project,” which gives support to disadvantaged children. I want to collect moremoney in Fiscal 2018 so we can build new toilets in schools and fix up theirschoolyards.

3,000

over

800
pupils participatedJia Lixin
I have donated blood twice a year for the past five years. So far, I have donated a
total of 4,000 ml of blood! I intend to keep up this blood donation activity.

Sustainability Report 2018

Third-party Opinion

Kumi Fujisawa
Co-Founder, Think Tank SophiaBank

Evolution into a Committed Report that
Considers its Readers
Continuing from last year, I have had theopportunity to read this Sustainability Reportagain this year. I was impressed by the effort thatits authors have put into achieving even moreinnovative contents and their attention to detail. I
can see they have remained conscious of theirdiverse readers in various parts of the world.
In addition, the key points of the Medium-term
Business Plan were incorporated in the graphs
and tables showing the Sustainable Value
Creation Process, enabling an awareness of thevalue process in day-to-day work. Thisevolution is worthy of praise.
A Real Sense of Instilling the Mindset
What most drew my eye in this year’s report was
the fact that, throughout the report, one can gaina real sense that the mindset of “independence
and initiatives” is taking shape within thecompany.
As the company has welcomed new top
executives, it has declared a goal of sustainable
management that looks toward the next 80
years.
Another highly impressive aspect of the report
was that it not only discusses what the company
needs to do to realize that goal from individual
perspectives such as CSR and SDGs, but it also
ties them in with the company’s business.
Whether it was the explanations of each domainby the people in charge of them, or thepresentation of initiatives being undertaken invarious parts of the world, the pride that they
have in their company’s business, and the factthat they are engaged in it with autonomy and on
the basis of the elements and perspectives ofsustainability really shone through in the report.
Through these individual initiatives, the reporthas been made easy even for people with little
knowledge of Calsonic Kansei to understand,and the relationship between the business andsustainability is very clear.
A Playing Field for Fair Participation by
Everyone Around the WorldAs with last year’s report, this year’s reportfeatured comments from employees from thevarious countries about their own approaches to
CSR, around the theme of My CSR Declarations.
These short comments show how these
individual initiatives are being conductedautonomously, based on the culture andcustoms of each region. They also provide an
opportunity for employees from the various
countries to share their wisdom with theircolleagues around the world through this report.
I hope that they will lead to the further evolutionof initiatives in each region.
If next year’s report conveys how employees’
actions and approaches have changed andevolved, I believe it will add to the enjoyment ofcontinued readership of the report.
As I read the messages from people around theworld and read about the various company
schemes and programs, one thing thatconcerned me a little was that comparatively
more space was devoted to explanations of

I would like to thank Ms. Fujisawa for once again
providing her valuable observations about ourGroup’s Sustainability Report.
We have made significant changes to the reportbased on her suggestions from last year, and weappreciate her words of support andacknowledgement of the improvements made.

Response to Third-party Opinion
Hideaki Watanabe
Executive Vice President and Chief Strategy Officer
Calsonic Kansei Corporation

In Fiscal 2017, we became independent from
Nissan Motor and launched our new Medium-term
Business Plan, named Compass 2021.
As part of Compass 2021, we have positioned
CSR as one of the fundamentals of how we run
our business, and we will aim to further
strengthen the fusion between management ofour business and CSR. This ensures ourbusiness is sustainable for the long term.
The Sustainable Value Creation Process is theembodiment of the values our Group offers andJapan-only schemes than to explanations ofoverseas schemes.
I realize that this is a Japanese company with its
headquarters in Japan, but as a company withcolleagues around the world that professes
diversity, I hope that these company schemes
could be reviewed to eliminate any regional
disparity, so that common global initiatives canbe given central position and the individual
initiatives of each country can be presented inequal proportion.
I hope that, after reading the summary report,
more readers will be motivated to access the fullreport on the website.
I hope that your employees will use even more
fulfilling initiatives and ideas in their daily work,and I look forward to seeing these commentsfrom on the ground taking center stage in thereport next year, to give readers a real sense ofchange.

Kumi Fujisawa
After having worked for Japanese and foreign investment
fund management companies, Kumi Fujisawa founded
the first investment trust evaluation company in Japan.
She later sold that company to a global credit-rating firm,
and helped establish the think-tank, SophiaBank.
She has interviewed over 1,000 business owners and,through the Davos Conference and other partners, isengaged in creating mutually beneficial bonds between
the public and private sectors in Japan and overseas.

our contributions to the SDGs.
This year marks our 80th anniversary of thecompany’s foundation. As we continue torespond to social requirements, such as fostering
innovation, protection of the environment, andethical corporate activity, we will maintain ourefforts to be a company that will develop in asustainable way, together with society, for the
next 80 years.
Regarding Ms. Fujisawa’s comments about“reviewing company schemes to eliminate any
regional disparity,” we will make further
improvements in this regard so we can become“one team” as Global CK.
We value the opinions of each and every one of
our employees around the world and we willcontinue to strive to be a company that acts as aforce for good in order to make all our
stakeholders proud.

32

Sustainability Report 2018

Company Overview
Company

Editorial Policy
About this Report

Calsonic Kansei Corporation

Address

2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama, Japan

Main Products

Cockpit modules, Front-end modules, Exhaust systems,
Air conditioning units, Compressors, Meters, Radiators

Number ofGroup Companies

Consolidated: 34*¹

Total Numberof Employees

Consolidated: 22,678*²

Major Clients(Alphabetical order)

Audi AG, Daihatsu Motor Co., Ltd., Daimler AG, Geely
Automobile, General Motors Corporation, Hino Motors, Ltd.,
Honda Motor Co., Ltd., Isuzu Motors Limited, Jaguar Land
Rover Limited, Mazda Motor Corporation, Mitsubishi Motors
Corporation, Nissan Motor Co., Ltd., Peugeot S.A., Renault
S.A.S., Subaru Corporation, Suzuki Motor Corporation, UD
Trucks Corporation, Volkswagen AG*1: As of May 31, 2018
*2: As of March 31, 2018

The Calsonic Kansei Group published its first Sustainability Report in2014, reporting on its ideas and various initiatives as a communication tool
for stakeholders and as part of its efforts to release information aboutsustainability. The report is published in Japanese and English.
From the 2017 edition, to communicate information in a timely manner andto provide our stakeholders with better access to the information theyrequire, we have compiled detailed information on the website.
We have also produced a summary version of the report in the form of thisbooklet. It provides a digest of the contents of the report to familiarize even
first-time readers with the Group’s sustainability endeavors.
A new feature in the Sustainability Report 2018 is the inclusion of the
Calsonic Kansei Group’s Sustainable Value Creation Process, which
integrates the concept of sustainability into management and creates newvalue.
Together with the new Medium-term Business Plan, the report clarifies ourcontributions to the SDGs in our domains of focus to give readers a deeper
understanding of the relationship between business and sustainability.
We look forward to receiving the honest opinions of our stakeholders toassist us in the further progress of our sustainability endeavors.

Website CSR Page
https://www.calsonickansei.co.jp/en/csr/

Applicable Scope
Calsonic Kansei Corporation and Group companies
Applicable Term
Mainly Fiscal 2017 (April 1, 2017–March 31, 2018)
Publication Date
September 2018 (previous report: September 2017; next report: September 2019(scheduled) )Reference Guidelines
GRI Sustainability Reporting Standards
Environmental Reporting Guidelines of the Ministry of the Environment of Japan, 2012
EditionSupport for various principles, etc. concerning the environment, society, andmanagement
Calsonic Kansei is in agreement with the initiatives laid out in policies such as the UN
International Bill of Human Rights, the UN Guiding Principles on Business and Human
Rights, the UN Global Compact, the ILO Declaration on Fundamental Principles andRights at Work, ISO 26000 (Guidance on social responsibility) and the Keidanren(Japan Business Federation) Charter of Corporate Behavior, and implements initiatives
to help achieve these important management indicators.
Third-Party Assurances and Opinions
No third-party assurances were obtained for this report.
A third-party opinion of a noted CSR and ESG (environmental, social, and governance)expert is included in the summary version and is published on the website of the
Sustainability Report 2018.

We look forward to receiving your opinions and comments about this report.
CSR/Public Relations & IR Department,
Global Corporate Planning Division
Calsonic Kansei Corporation
2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japan
Online Contact Form
https://www.calsonickansei.co.jp/en/csr/opinion/

Please Note:
This report contains forward-looking statements. Please be aware that actual results
may differ due to various industry-related factors.

33

Sustainability Report
Report 2018
2018
2017
Sustainability

Financial Highlights
Consolidated Sales

Share of Consolidated Sales by Region (Fiscal 2017)(Fiscal year)

998,6172017

1,012,596

2016

1,053,318

2015
0

Japan

35.8%

Americas

30.6%

Asia

21.8%

Europe11.8%

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,0001,000,000 (million yen)

Number of Employees by Region (Consolidated)

Consolidated R&D ExpenditureJapan(Fiscal year)

32,8912017

2017

30,392

2016

2016

29,239

2015
0

5,000

10,00015,00020,00025,00030,000Americas(Fiscal year)2015
35,000(million yen)0

Europe

Asia

7,053

6,183

2,372

7,070

6,756

6,277

2,476

6,915

6,676

6,024

2,398

6,889

22,67822,42421,9872,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000(People)Global Network
Major Overseas Locations

Major Locations in JapanAMERICAS

CHINA

Centers

Calsonic Kansei North America, Inc.

Calsonic Kansei China Holding Company

R&D Center, Headquarters

Calsonic Kansei (Wuxi) Corporation

Testing Research Center

Calsonic Kansei (Shanghai) Automotive Technology R&D Co., Limited

Production Engineering Center

MEXICO
Calsonic Kansei Mexicana, S.A. de C.V

Calsonic Kansei (Shanghai) Corporation
Calsonic Kansei (Guangzhou) Corporation
Calsonic Kansei (Xiang Yang) Corporation
Calsonic Kansei (Wuxi) Components Corporation

BRAZIL

Calsonic Kansei (Guangzhou) Components Corporation

Calsonic Kansei do Brasil Industria e Comercio Ltda.

Calsonic Kansei (Haimen) Car Air-Conditioning Compressor Corporation

CK KS Engineering (Guangzhou) Tooling Center Corporation
CK Electric Machinery Development (Shanghai) Co., Limited

THE UNITED KINGDOM
Calsonic Kansei Europe plc.
Calsonic Kansei UK Limited

SPAIN
Calsonic Kansei Spain, S.A.

Offices
Utsunomiya OfficeHamamatsu Office
Nagoya Office
Kurashiki Office
Hiroshima Office

KOREA

Atsugi OfficeSuzuka Office

Calsonic Kansei Korea Corporation

MALAYSIA
Calsonic Kansei (Malaysia) Sdn. Bhd.

Manufacturing Plants
Gunma Plant
Yoshimi Plant

ROMANIATHAILAND

Calsonic Kansei Romania S.R.L.

Calsonic Kansei (Thailand) Co., Limited

FRANCE
Calsonic Kansei Europe plc. France Branch Office

GERMANY
Calsonic Kansei Europe plc. German Branch Office

RUSSIA
Calsonic Kansei RUS LLC

Kodama Plant
Oppama Plant

Siam Calsonic Co., Limited

Group Companies
MYANMARCalsonic Kansei Engineering Yangon Co., Ltd.

Calsonic Kansei Fukushima Corporation
Calsonic Kansei Kyusyu Corporation
Tokyo Radiator Mfg. Co., Ltd.

INDIA
Calsonic Kansei Motherson Auto Products Limited

Calsonic Kansei Tochigi Corporation
Calsonic Kansei Utsunomiya Corporation
Calsonic Kansei Machine Works Corporation
Calsonic Kansei Yamagata Corporation
Calsonic Kansei Iwate Corporation
Calsonic Kansei Business Expert Corporation
CK SALES Co., Ltd.

As of May 31, 201834

Calsonic Kansei Corporation
R&D Center, Headquarters
CSR / Public Relations & IR Department, Global Corporate Planning Division
2-1917 Nisshin-cho, Kita-ku, Saitama City, Saitama 331-8501, Japanwww.calsonickansei.co.jp/en/