D IC REPO RT 2014
The DIC Group’s Corporate Profile & Sustainability Report

DIC REPORT 2014
The DIC Group’s Corporate Profile & Sustainability Report

English Version

Contents
The DIC Group A Global Po erhouse

R e p or t on S u s t a ina bilit y T h e m e sCompliance

A essa e from the President

Risk Management

The DIC Group s Sustainability Pro ram

Information Security

The DIC Group s Business Portfolio

Human Resources Management

Special eature Creatin e alue that
Responds to Evolvin Social Imperatives

Business Models that Respond to Social Imperatives

Ceranate ® Hybrid Resin for Coatings
Hybranch® Hyperbranched Polystyrene
Solar Cells Materials for Solar Cells
ithium Ion Batteries Materials for Lithium-Ion Batteries
Printed Electronics Materials for Printed Electronics

Harmony with the Community and Social Contributions

Environment, Safety and Health (ESH) and Quality
Supply Chain Management
New Technology Development and Value Creation
Communication with Stakeholders
DIC Report 2014 and ISO 26000: A Comparison

DIC istory
Corporate Data

Topic 1Sun Chemical Revamps its Website

T h ir d - P a r t y O p inion

Topic 2®

DIC Expands Supply Capabilities for Linablue NaturalBlue Food Coloring

Corporate Governance
Sustainability Report
Goals and Achievements of Major Sustainability Initiatives
Goals and Achievements of Major Responsible Care Initiatives

About this Report

Scope of Reportin

Effective from fiscal year 2014, the DIC Group has combined
its corporate profile and its sustainability report, previously
independent documents, with the aim of presenting a clear,easy-to-understand picture of the Group and its sustainability
initiatives.

Reportin Period

inks ith the DIC ebsite
The WEB mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC website.
DIC website WEB http://www.dic-global.com/en

In principle, this report provides information on DIC Corporation and consolidated DIC Group companies
in Japan and overseas. For information on the scope of reporting for ESH-related initiatives, please visit
the pertinent page of the DIC website.
WEB

http://www.dic-global/en/csr/pdf/dic_csr_scope_ja_2014.pdf

This report provides information on domestic Group companies for fiscal year 2013 (April 1–December 31,2013), a transitional irregular nine-month period, and on overseas Group companies for 2013 (January 1–
December 31, 2013).
ESH information is for domestic and overseas Group companies for 2013 (January 1–December 31, 2013).

Date of Publication
June 2014 (The next report is scheduled for publication in June 2015.)

Guidelines Referenced
Guidelines referenced in the preparation of this report were ISO 26000, the International Organization forStandardization’s standard for social responsibility, released in 2010, and Japan’s Responsible Care Code.

Established in 1908 as a manufacturer of printing inks, DIC has expanded its mainstay organic pigments andsynthetic resins businesses while at the same time cultivating world-class related core technologies.
Since then, DIC has leveraged these technologies to build a broad portfolio encompassing materials
and finished products. This has enabled the Company to respond to market needs by providing
customers in the automotive, electronics, food packaging, housing and other industries withsolutions that bring “color” and “comfort” to people’s lives.
Looking ahead, DIC—today a multinational corporate group with operations in morethan 60 countries and territories—will redouble its efforts to contribute toenvironmental protection and to the realization ofa safe and sustainable society.

DIC Report

Annual Report

Combined report onsustainability initiatives
and corporate profile

Report on operations
and financial condition
PD -form publication

published annually
Printed and PD -form
publications

Real-time information
DIC ebsite

The DIC Group uses a variety of tools to promote
communication with its many stakeholders toencourage greater awareness of the Group’s activities.
More detailed sustainability-related information anddata can be found on the DIC website.

Reports on activities
Printed PD -form publications

DIC Group
Communications Tools

DIC

ebsiteWEB

http://www.dic-global.com/en

mbrella ebsite providin information
to the lobal public about the DIC Groupand reportin on its various activities
updated as necessary

The DIC Group: A Global Powerhouse
Corporate data is as of December 31, 2013. Net sales and operating income results are consolidated results for fiscal year 2013.

Corporate Data

※ The consolidated results for fiscal year 2013 comprise the accounts for the nine months ended December 31,
2013, of DIC and its domestic subsidiaries but one and the 12 months ended December 31, 2013, of its overseas
subsidiaries and one domestic subsidiary.

Reportable Segments

Printing Inks

Fine Chemicals

Offset inks, gravure inks, flexo inks,
can coatings, news inks, packaging
adhesives, presensitised (PS) plates,
printing supplies

Organic pigments for printing inks, organic
pigments for coatings and plastics, organic
pigments for color filters, thin-film transistor(TFT) liquid crystals (LCs), supertwisted nematic(STN) LCs, alkylphenols, metal carboxylates,
sulphur chemicals (lubricant additives)

Net sales ••••••••••••••••• ￥373.6 billion

Net sales ••••••••••••••••• ￥116.9 billion

Operating income •••••• ￥18.4 billion

Global Network
DIC has 176 subsidiaries in 61 countries and territories around the world.

3

The DIC Group: A Global Powerhouse

Operating income •••••• ￥11.4 billion

The DIC Group has leveraged its distinctive organic pigments
and synthetic resins, essential to the manufacture of printing inks,
to build an extensive business portfolio.

Share of Operating
IncomeShare of Net Sales
Application
Materials

Application
Materials

14.3%

13.5%

￥705.6￥40.2

billionPolymers

Application Materials

Synthetic resins for inks and coatings,
molded products, adhesives andt e x t i l e s ( p o l y u r e t h a n e , e p o x y,p o l y s t y r e n e , p o l y e s t e r, a c r y l i cand phenolic resins, plasticizers),
papermaking chemicals

Ultraviolet (UV)-curable coatings and bonding
adhesives for optical discs, jet inks, plastic
colorants, polyphenylene sulfide (PPS)
compounds, high-performance compounds,
coextruded multilayer films, decorative boards,
industrial adhesive tapes, specialty magnetic
foils, hollow-fiber membranes and modules

Net sales ••••••••••••••••• ￥141.2 billion

Net sales •••••••••••••••• ￥105.2 billion

Operating income••••••••••• ￥9.2 billion

Operating income •••••••••• ￥6.1 billion

Polymers

19.2%

billionPrinting Inks

50.7%

Polymers

20.4%

Fine Chemicals

Printing Inks

40.8%

Fine Chemicals

15.9%

25.3%

Note: The aggregates of net sales and operating income by region on page 3 and below do not correspond toreported net sales and operating income, as the former includes income not attributable to reportablesegments and eliminations (¥4.3 billion).

Breakdown of Net Sales by Region
Asia and Oceania

19.9%

North, Central andSouth America¥705.6

18.0%

Japan

35.7%

billionNorth America
Europe and Africa

26.4%

15

Breakdown of Operating Income by Region
Asia and Oceania

23.8%

12
Central and SouthAmerica
North, Central and South America¥40.2

North, Central andSouth America

billion

11.4%

Japan

48.7%

Europe and Africa

16.0%

Notes:
1. Operating income as used here includes eliminations (approximately ¥3.5 billion).
Accordingly, these percentages do not represent shares of reported operating income.
2. The consolidated results for fiscal year 2013 comprise the accounts for the nine months
ended December 31, 2013, of DIC and its domestic subsidiaries but one and the 12 months
ended December 31, 2013, of its overseas subsidiaries and one domestic subsidiary.

Sun Chemical Group and others

Net sales •••••••••• ¥126.9 billion

Operating income ••••••••¥5.0 billion

The DIC Group: A Global Powerhouse4

A Message from the President

Representative Director,
President and CEO
DIC Corporationoshiyuki akanishi

In line ith the slo an of DIC
Step Beyond
e ill concentrate our allocation of mana ement
resources in business domains ith the aim of ensurin
sustainable ro th
The DIC Group in iscal ear
I n A p r i l 2 013 , w e e m b a r ke d o n a n e w m e d i u m - t e r mmanagement plan, DIC105, which will guide our efforts throughfiscal year 2015. This plan is the first phase of a longer-term
initiative that sets clear, concrete objectives for fiscal year
2018.
With signs of a gradual global economic recovery evident
in 2013, Japanese government economic policies—dubbed“Abenomics” after the current prime minister, Shinzo Abe—5

essa e ro

the President

continued to support a weak yen and strong share prices.
Against this backdrop, results in core industries, notably
automobiles, civil engineering and construction, were firm. We
also saw a significant improvement in operating results, with
operating income rising to ¥40.2 billion, Our operating margin
reached a record-high 5.7%, underscoring the effectivenessof restructuring initiatives and the global expansion of ouroperations. On the balance sheet, our debt-to-capital ratio*1
declined to 57.7%, as we achieved our DIC105 target for
fiscal year 2015 (58%) a full two years ahead of schedule.

Ceremony to mark the opening of DIC’s new printing inks mother plant in the PRC (May 2013)

While many challenges remain, I think it is fair to say that we
succeeded in laying a solid foundation for the implementationof measures that will ensure we meet all the targets we have
set under DIC105.

Implementin the Central Strate y of
Our edium-Term ana ement Plan
We have positioned the expansion of businesses that will drive
growth in the years ahead as the central strategy of DIC105.
Accordingly, we are promoting bold, global initiatives to growsuch businesses.
One business that will drive growth going forward is TFTLCs* 2 . Demand for TFT LCs, currently the dominant format
used in liquid crystal display (LCD) televisions, continues toexpand rapidly in the People’s Republic of China (PRC). In
addition to expanding the scope of our TFT LCs business, weare also in the process of building a new production facility in
the PRC, a move that will further increase sales. In the areaof pigments for color filters, another such business, we have
expanded our product range beyond our highly rated green
pigments, modifying technologies to facilitate the production ofblue pigments for color filters that deliver superior brightness
and contrast. In PPS products, a third growth-driving business,
we are working to expand our global production capacity
worldwide. We will also press forward with assertive efforts tofurther bolster sales of these products, including localizing our
production of PPS compounds.
In these and all of our businesses, our success depends on
our ability to build a strong corporate structure that enables
us to compete in global markets. I will make every effort toenhance awareness of the importance of further cementing
our position as a leading global player and of reinforcing ourcompetitiveness across the DIC Group.

Takin DIC

to the e t Sta e

To facilitate the concentration of our allocation of management
resources in key areas, we are also advancing decisive

Visit to subsidiary Earthrise Nutritionals, LLC., in the United States (September 2013)

restructuring initiatives. Of note, we have completed aroadmap for optimizing our printing inks businesses inNorth America and Europe and are steadily implementing
measures delineated therein. These include reengineering our
publishing inks business by taking necessary steps—including
closing plants—to streamline production configurations andsignificantly increase operating rates for mother plants. We
expect such initiatives to begin contributing to income in fiscal
year 2015.
Another focus of DIC105 is the creation of next-generation
businesses. We will continue to conduct R&D in line withthemes of impor tance to the sophisticated, informationoriented society of the future, including materials for printed
electronics*3 , as well as to advance the development of hybrid
chemicals*4 by combining organic and inorganic materials to
realize superior performance features.

DIC s Approach to Sustainability
We launched our corporate social responsibility (CSR)
program in fiscal year 2007, in line with “The DIC WAY”— anarticulation of our basic management approach—and havepromoted efforts that reflect our belief in the importance offulfilling our responsibilities as a member of society throughour business activities. Having acknowledged the need topursue sustainable growth in a manner that takes into accountthe environment, ecosystems and socioeconomic issues, inJanuary 2014 we changed the designation we use across ourprogram from “CSR” to “sustainability.”
We are committed to remaining an organization that
contributes to sustainable development for society and theglobal environment, as well as ensures our own sustainability.
To do so, we must ensure our ability to effectively manage
risks, as well as to achieve unfaltering growth in global
markets. We will approach this challenge with a long-term
perspective, promoting consistent initiatives that reflect our
fundamental philosophy of engaging in businesses that enable
us to create value for society.

*1 Debt-to-capital ratio is calculated as interest-bearing debt / (interest-bearing debt + net assets).
*2 For more information on DIC’s TFT LCs, see page 12.
*3 A next-generation production process for electronic circuits that employs printing technologies, printed electronics continues to attract attention for, among others, its suitability to mass production, ability
to reduce fabrication costs and solid environmental credentials.
*4 The term “hybrid chemicals” describes technological areas and related product groups that combine DIC’s specialized basic technologies with inorganic materials, thereby realizing sophisticated and/or
multiple performance capabilities.

essa e ro

the President

6

Sustainability A Global Commitment
We have declared 10 DIC Group sustainability themes andtheme-specific medium-term targets, in line with which we arepromoting a variety of initiatives aimed at a broad range ofissues, from resources to value creation.
As a manufacturer of fine chemicals, we have a particularresponsibility toward issues related to operational safety and
ESH. We work tirelessly to reinforce our safety infrastructure
and conduct safety training programs for employees worldwide
that are designed to heighten individuals’ ability to recognize
danger, thereby enhancing safety across our diverse rangeof production activities and creating a Groupwide culture ofsafety.
The issues that threaten the earth’s natural environment area global challenge. Mindful of the importance of ensuring we
operate in a manner that is in harmony with the environment,
we conduct stringent environmental assessments and work
diligently to develop products that balance exceptional
performance and consideration for the environment and torealize environment-friendly production processes, as well as
to enhance our R&D configuration and marketing practices tobetter respond to the needs of society.
We also acknowledge that the globalization of our personnel
will be crucial to supporting sustainable growth for the DIC

Group. Accordingly, we have resolutely shifted the emphasis of
our efforts to optimize human resources from regional to global
and will continue to focus on cultivating employees with theskills to compete on a global stage in a fast-changing businessenvironment. To this end, we have created a comprehensive
human resources database that provides access to a broader,deeper pool of talent and are promoting measures aimed
at fostering a new generation of employees with leadershipcapabilities.
Through initiatives such as those I have outlined here, we
remain committed to thriving in an increasingly complex anddiverse global environment as a corporate entity deserving of
the trust of our many stakeholders. In these and all our efforts,
we look forward to our stakeholders’ ongoing support andguidance.

Yoshiyuki Nakanishi
Representative Director,
President and CEO
DIC Corporation

Basic ana ement Approachn ebruarycelebrated its centennial anniversary.
aking advantage of t e opportunity provided by t is ilestone t e o pany c anged its o cial na e toorporation and introduced a new corporate sy bol. rior to e barking on its second century in businessadoptedean articulation of its new anage ent approac for t e entire
roup.
e
co prises t ree ele ents na elysanage ent vision corporate values andprinciples of conduct.
ese t ree ele ents are supported byeS.

MANAGEMENT VISIONMANAGEMENTVISIONCORPORATE VALUES
Through unceasing innovation, the DIC Group strives to create newvalue directed at sustainable development for its customers, society
and the environment.

The DIC SPIRITEnterprise
Integrity
Diligence

PRINCIPLES OFCONDUCT7

essa e ro

the President

CORPORATEVALUES

PRINCIPLES OF CONDUCTWe shall hone our sensitivity to changes in society and be aware of
our mission to always be ahead of the times.
We pledge to incorporate the concepts of social and environmental
sustainability into our corporate activities.
We vow to strive constantly to hone “The DIC SPIRIT.”
We shall respect the autonomy and initiative of each individual employee
in applying his or her talents to the pursuit of our values and therealization of our vision.

The DIC Group’s Sustainability Programrom CSR to Sustainability
http://www.dic-global.com/en/csr/

The DIC Group launched its corporate CSR program in fiscal year 2007.
In line with The DIC WAY, DIC has identified fulfilling its responsibilities
as a member of society through its business activities and contributing
to the evolution of society as the cornerstones of CSR.
In recent years, the need to achieve sustainability in a manner thattakes into account, among others, the environment, ecosystems andsocioeconomic issues, including global warming and the depletion ofnatural resources, has gained increased recognition worldwide. The
DIC Group has consistently promoted a program of initiatives thatreflect its awareness of these and other key imperatives.
Having clarified its overall policy, effective from fiscal year 2014 the
DIC Group changed the designation used across its program from “CSR”

to “sustainability,” which it feels is more appropriate for a globally active
corporate entity.
The DIC Group remains dedicated to conducting its businesses while
retaining a strong commitment to five key concepts: preserving safety
and health, ensuring fair business practices and respect for humanrights, maintaining harmony with the environment and advancing its
protection, managing risks, and creating value for society throughinnovation. Through the unceasing implementation of initiatives alignedwith these concepts, the Group will strive to remain an organizationthat contributes to sustainable development for society and the global
environment, as well as ensures its own sustainability, thereby earning
the trust of stakeholders.

Sustainability rame ork and Themes
As a framework for implementing our sustainability program,the DIC Group has developed 10 sustainability themes andintroduced a system whereby these are categorized as
basic themes, themes that demonstrate unique capabilities
and themes that combine elements of the previous twoclassifications. Each fiscal year, the Group formulates targets
and activity plans for each of these themes.
Note: Details of themes and activities and achievements in fiscal year 2013 can befound in the “Report on Sustainability Themes” section of this report (pages 27–53).

Themes that demonstrateunique capabilities (A)Business models focused on social issues
New technology development and value creation
Harmony with the community and contributions to society
Communication with stakeholders

Themes that combine
elements of (A) and (B)ESH and quality
Human resources management
Supply chain management

Basicthemes (B)Compliance
Risk management, including business continuity management (BCM)
Information security

To guide its efforts to promote sustainability as an integral part of its business activities, the DIC Group formulates a basic sustainability policy,
theme-specific medium-term targets and an annual activity plan. Accordingly, individual sales and technical administrative divisions, product divisions,sites and domestic and overseas DIC Group companies are charged with pursuing effective sustainability programs by formulating their own annual
activity plan, ensuring the basic sustainability policy and targets permeate their organizations and labor forces, and linking sustainability activities tobusiness targets.

System for Promotin Sustainability
As of January 2014

Board of Directors
Sustainability Committee

Corporate Communications
Department

President and CEO

Sales administrative divisions, product divisions,
Production Administrative Division, Technical Administrative Division,
Corporate R&D Division, back-office divisions, sites,
domestic and overseas DIC Group companies

Sustainability themes

Initiatives related to themaintenance and improvement ofinternal control systems

The DIC Group’s system for promoting
sustainability centers on the Sustainability
Committee, which answers directly to thepresident and CEO and is tasked with reportingon the status of sustainability themes, as wellas with proposing policies and programs foradvancing sustainability and deliberating related
matters as a vital component of corporate
management.

Ensurin DIC Remains a Globally Trusted Corporate Citi en ith a Proud Reputation
In December 2010, the DIC Group became a participant in the United Nations Global Compact (UNGC). The Group also operates in a manner that is consistent
with ISO 26000, released in November 2010, which provides businesses and organizations with global guidelines for operating in a socially responsible manner.

The DICro p sstaina i ity Pro ra

8

The
DIC Group’s Business Portfolio
Corporate profile
An Efficient Corporate Organization that Leverages DIC Group Strengths
Target Markets and Business Development
The DIC Group has capitalized on its capabilities in organic pigments and synthetic resins, the principal material for printing inks, to build a broad portfolio. Today, theGroup classifies its products in four business segments: Printing Inks, Fine Chemicals, Polymers and Application Materials. Through its Advanced Technology Sales
Administration Div., Life & Living Sales Administrative Div. and Packaging & Graphics Sales Administrative Div.—three sales administrative divisions organized in linewith three key market categories—and its affiliated companies, the DIC Group works to provide products that respond to the needs of society and its customers.

The DIC Group’s Basic Technologies
The DIC Group strives constantly to contribute to a materially and spiritually affluent society through the development and provision of environment-friendly
technologies and products. To this end, the Group is leveraging its basic technologies in the areas of optics and color, organic molecular design, polymer design,
dispersion and applicability assessment to promote the development of products in key target markets.

9

The DIC Group's Business Portfolio

to Respond Swiftly and Accurately to Evolving Social Imperatives
A Matrix-Like Corporate Organization that Leverages Comprehensive Capabilities
With the aim of facilitating concentrated efforts to grow core products, as well as a shift toward market-focused business development, the DIC Group has createda matrix-like corporate organization. This organization centers on seven product divisions, which are responsible for spearheading the implementation of global
product strategies, and three market-oriented sales administrative divisions. The DIC Group is confident that this format will enhance agility—enabling it to respondswiftly to evolving social imperatives—and improve the internal sharing of information, thus underpinning efforts to leverage its comprehensive capabilities.

Product divisions
Categorized at the process chain level; responsible for spearheading theimplementation of global product strategies for each constituent product group

Business segments

Sales administrative divisions
Organized by core market; charged with providing the distinctive value thatpermeates all DIC Group products to customers and with implementing marketing
initiatives in line with forward-looking themes that reflect the customer’s perspective

The DIC Group's Business Portfolio

10The DICro p ssiness Port o io

The DICro p ssiness Port o ioPolymers
DIC’s second core business
Capitalizing on DIC’s world-class resin
engineering capabilities, this segment provides
synthetic resins and resin-related products to awide array of industries.

Polymers
Alkyd resins
Polyester resins
Unsaturated polyester resins
Plasticizers
Waterborne resins
Acrylic resins
Methacrylate resins
Amino resins
Phenolic resins
Polystyrene
Processed sheet molding compounds (SMCs)
Epoxy resins
UV-curable resins
Polyurethane resins
Fluorochemicals

Surface protection fora wide variety of applications
UNIDIC series(UV-curable hard coat materials)
The UNIDIC series comprises UV-curable resins thatleverage DIC’s distinctive resin engineering
capabilities to satisfy diverse needs in terms of
hardness, flexibility, viscosity, refractive index andother properties. Applications for these products are
wide-ranging and include protective coatings for
optical films, touch screens and other components
for electronics equipment. DIC has established abroad lineup of hard coat materials that respond to
customer needs not only for substrate surface
protection but also for fingerprint resistance andflexibility, among others.
DIC is also promoting its hard coat materials for avariety of new applications, including flexible
displays.

Exceptional heat resistance facilitates use in precision instruments
EPICLON series(Epoxy resins for electronics substrates)
Epoxy resins are UV-curable synthetic resins that cure when combined with curing agents, achieving
exceptional moldability, heat resistance, electrical insulating properties and adhesive properties. These
resins are used by manufacturers of electronics substrates and in a broad range of other industries.
As Japan’s largest manufacturer of epoxy resins, DIC supplies the EPICLON series ofenvironment-friendly, high-performance epoxy resins, which combine outstanding heat and flame
resistance. Applications for EPICLON epoxy resins are diverse and include smartphones andcomputers.

13

The DIC Group's Business Portfolio

The DICro p ssiness Port o ioSpecial eature

Creatin e alue that Responds to
Evolvin Social Imperatives
hile increasin ly convenient and comfortable, our lives also
face comple and diverse challen es The DIC Group is levera inits technolo ies to address these issues, deliverin ne value tohelp create a sustainable society

Ceranate®

ybrid
Resin for Coatin s

Shieldin houses and otherstructures fromrays and air pollution
Social Imperative

DIC s Response

Develop stain-resistant Ceranate a ueous resin

Promote market acceptance ofa coatin that resists pollution
and reduces operator orkloads

One problem with common fluorinated resin coatings is that although they
are impervious to water and UV rays, their high affinity with oil results instains from car and factory emissions. In 2008, DIC developed Ceranate ®, awaterborne hybrid acrylic–polysiloxane (organic–inorganic) resin that uses
nanotechnology to control dispersion. Hybrid molecules fuse together withthe evaporation of moisture to form an exceptionally durable coating film thatboasts not only superior gloss retention but also excellent resistance to oily

Coatings for housing, public structures,
iron bridges, roads, automobiles and otherobjects must provide protection against
rain and UV rays, as well as oily or acidic
par ticulates from vehicle and factor yemissions. Coatings made with organic
solvents contain VOCs, so there is a risk ofdamage to the health of operators. Manyemerging economies are experiencing
vigorous construction demand, but have yet
to address air pollution issues.
Contamination is a particular concern
in these nations, which require coatings
that offer superior resistance to weather,pollutants and wear.

stains and a self-cleaning capability
whereby it uses rainwater to wash off
dirt. As an aqueous resin, Ceranate ®
requires no organic solvents, thus
reducing the health risks to operators.

Acrylic resin

Ceranate ®

Self-cleanin capability ensures e cellent stain resistanceK E Y

P E R S O N

o f

D I C

This is an optimal coatin for the environmental and structural needs of emer in economies
Hybrid organic–inorganic molecules were made possible by DIC’s high-precision molecular design
and nanoparticle dispersion technologies. Construction is still booming in many emerging economies,
which suffer from worsening air pollution, making Ceranate ® a choice that delivers true value. It is worth
noting that there is a theory that urban appearances affect social order. We are promoting Ceranate ® byhighlighting its diverse benefits, including its contribution to aesthetic appearances, in emerging economies.
i

5

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ar

a
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Social Imperative

ch ica

i

ar

i
i i

a

Ad

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Ener yConservation

i

A

Rs

hi

i a a iA in
Society

DIC booth at Painted India 2014

SafetyReliabilityuman
Ri htsHybranch®

yperbranched Polystyrene

Enhancin the environmental performance of food containers,
electrical appliance components and insulatin materials
Social Imperative

Provide superior resins that help reduce use of resources and ener y in and increase the recyclability of containers
Polystyrene and clear plastic containers that keep food products fresh are essential to food sanitation, preventing contamination duringtransportation and storage and the deterioration of quality due to changes in temperature and humidity. Plastic containers are also lightand strong, thus consuming little energy during transportation, and in Japan theContainer and Packaging Waste in Overall Waste
materials therein can be recycled and reused in various products in line with
the Containers and Packaging Recycling Act.
Nonetheless, the plastics are made with petroleum and a considerable
amount of energy is used in their production. Moreover, plastic containers
account for a significant volume of household container and packaging waste.
From the perspective of helping to prevent global warming and resource
depletion, the development and promotion of more resource-efficient materials
is a crucial challenge.

DIC s Response

Develop revolutionary thin polystyrene that resists tears and breaks
In 2006, DIC succeeded in developing a revolutionary polymer forwhich it became the first in the world to establish a mass production
technique, called hyperbranching. This technique takes performanceto new heights by creating multiple branches, or small molecules,
through a polymerization reaction with the core monomer. DIC has
used this technique in the production of polystyrene—a popularmaterial for containers and packaging—to achieve a material that islighter and thinner, yet more resistant to breaks, than conventional
polystyrene, and has greater tear resistance than conventionallaminated films. Containers and films made with DIC’s Hybranch ®
polystyrene are thus thinner and lighter, require less energy to
produce thanks to lower rejection rates and can be molded at low
temperatures. Other benefits include high recyclability and quality
even after recycling. In addition to food containers, applicationsfor Hybranch ® polystyrene include refrigerator trays and housing
insulation.

K E Y

P E R S O N

o f

D I C

The establishment of an industrial technolo y is a deeply si nificant achievement
DIC’s proprietary polymer design, mixing and polymerization technologies enabled us to overturn the accepted notion that theflowability of a polymer necessarily decreases as its molecular weight increases. I believe it is very significant that DIC was the first in
the world to establish a viable industrial technology that facilitates stable mass production of a hyperbranched polystyrene. This was
possible thanks to an environment that encourages close collaboration between basic and developmental research groups. Goingforward, we intend to further strengthen the framework for in-house collaboration in development efforts.
adarch roi hly InformationOriented Societyrch icaro

Comfortableifestyles

o

r

i

o hi

Resource
Conservation

CO
Reduction

ch icai aImprovement ofConveniencepe ia

eat re6

Social Imperative

DIC s Response

evera e the outstandin
eatherability of DIC adhesives
to increase back sheet durability

Enhance eatherability to encoura ereater use of rene able ener y

Solar Cells
aterials for Solar Cells

Seekin to e tend
the lives of solar
cell modules

Degradation as a result of UV rays,
heat, humidity, wind and rain lowers
the generating efficiency and shortens
the lifespan of solar cell modules* 1 .
Accordingly, enhancing the weatherabilityof these modules is a key challenge.
To encourage use of solar power, it isessential to safeguard modules’ vital solar
cells from natural damage and to extend
replacement cycles, thereby enhancing
resource efficiency and enabling users to
swiftly recoup their investment. Anotherchallenge is to lower the weight of solar
cell modules, thereby reducing the burden
on structures that have had solar cell
modules installed.

Back sheets for solar cells, which
provide protection against heat, UV
rays and humidity, are made fromthree layers of film bonded together
with an adhesive. However, generalpurpose adhesives weaken quickly
after use, negatively affecting boththe per formance and lifespan ofsolar cell modules. DIC overcame
this problem in 2009 by developinga highly weather-resistant adhesivethat leverages its hydrolysis-inhibiting
resin design and additive-mixing
technologies.

Social Imperative

DIC s
Response

Increase the ener y density andreliability of lithium-ion batteries

Lithium–
Ion
Batteries
aterials for ithium-Ion
Batteries

Contributin to theevolution of hi hperformance batteries
is essential in a smart
technolo y-basedsociety❶

Develop active materials
that increase lithium ion
stora e capacity

In addition to being smaller and lighter andoffering higher capacity and voltage than othersecondary batteries, lithium–ion batteries(LiBs) charge quickly. For these reasons, LiBs
are expected to play an important role in theyears ahead in everything from smartphones,
tablet computers and PCs to electric vehicles
and aircraft, as well as in smart cities andother energy-conscious infrastructuresof the future. Challenges facing battery
manufacturers include making LiBs thinnerand lighter by achieving higher energy
density, as well as prolonging battery lifespan,
shortening charge time and increasing safety.

LiB charges drain quickly because of
the limited ion absorption capacity of theactive material (graphite) used for theanode, to which lithium ions move fromthe cathode during discharge. To date,
this has prevented further increases inenergy density.
Employing its distinctive synthesis
technologies for nanolevel composites*2,
DIC is currently developing an advanced,
high-capacity alternative active material
for anodes that if commercialized will
make it possible to use mobile devices
longer and drive electric vehicles further
on a single charge.

E tendin the duration of iB char es

Active material raphite*2 Composite materials, or composites, are materials made from two or more different constituent materials
that when combined deliver a performance that is superior to that of either of the materials used alone.

7

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Ener yConservation

Rs

A in
Society

SafetyReliabilityuman
Ri htsKEY PERSON of DIC

This adhesive is used in many solar cell modules, having performed well over more than
3,000 hours in testing at 85°C and 85% humidity. In 2013, DIC developed a weatherresistant coating that absorbs UV rays and a highly heat- and moisture-resistant sealant.
Used together, the coating and sealant enhance back sheet durability and help extend
the lifespan of solar cell modules.
Structure of typical solar cell module

e are acceleratin development
efforts ith the aim of enhancin
thinness and reducin costs
If we can develop a coating and sealantoffering the same weatherability as film,
it would enable us to reduce the numberof film layers to two or even one. DIC hasdeveloped multifunctional packaging andconstruction material coatings that havecontributed to weight reduction while also
lowering costs. We arepressing forward with R&D
aimed at realizing similarinnovations for solar cells.
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*1 Solar cell modules are panels comprising solar cell sheets connected in a series to obtain the required voltage and current.

KEY PERSON of DIC

DIC s
Response❷

KEY PERSON of DIC

e are ma imi in key
DIC Group syner ies torevolutioni e iB technolo ies

Develop an adhesive for iB packcontainers that offers outstandin
electrolyte resistance

DIC s reatest stren th
is its sophisticatedlaminatin technolo ies

Although there is plenty of research being conducted
into the use of silicon and tin as active materials toincrease the capacity of LiBs, the fact is that it isdifficult to control expansion and contraction. Byleveraging its core technologies, DIC has succeededin precisely controlling nanoparticle distribution, apotential solution to this issue. Going forward, we
will strive to contribute to technological innovation inthis area by maximizing synergies
with our multiple other coretechnologies.

Laminated multilayer film is steadily replacing
conventional metal as the preferred material
for the containers used to hold LiB packs.
Advantages offered by laminated containers
include low electrical resistance, high heatdissipation and formability.
In 2013, DIC drew on the vast pool of composite
materials formulation technologies it has
accumulated in the area of food packaging todevelop a new adhesive for laminated LiB packcontainers. Adhesives used to bond films toaluminum foil substrates must remain strong,even when immersed in highly acidic electrolyte
solution. DIC responded by greatly enhancing
adhesiveness, thereby realizing excellent
shielding properties and productivity.

These laminated films were not createdsimply by bonding together aluminum foil
substrates and films. We dramaticallyincreased electrolyte resistance byinterposing a newly developed adhesive
between two substrates with significantly
different properties. Made possible by our
proprietary resin mixing
technologies, this adhesiveis a solution that we canoffer with confidence.

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ch icaar ioia o a aActive material alternative to raphite

i hly InformationOriented Society

Comfortableifestyles

Resource
Conservation

CO
Reduction

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Printed Electronics

aterials for
Printed Electronics

akin today s advanced information society
easier to navi ate and more environment-friendly
Social Imperative

Simplify patternin processes for electronic circuits to reduce
consumption of resources and ener y and production costs

Photolitho raphy vs printed electronics

Photolithography is the process most commonly used to form patterns
on electronic circuits, which are what make electrical appliances work.
Nonetheless, photolithography has a number of downsides, notably the factthat it is a multistage process requiring substantial capital investment andthat it uses significant volumes of raw materials, including rare metals, andenergy and emits substances that negatively affect the environment. Suchconsiderations have prompted great interest in printed electronics, whichuses printing technologies to create devices, as a viable alternative that
greatly simplifies patterning, reducing facility needs, energy consumption
and the emission of environmentally damaging substances.

DIC s Response

Develop inks for printed electronics that deliver hi h resolution and facilitate lo -temperature bakin
The printing of circuit patterns demands conductive inks that deliver high resolution. Quality determines the reliability of a circuit or device. DIC
has leveraged its proprietary dispersion technologies to develop inks for printed electronics that accommodate the need for increasingly finelines. A low baking temperature means that these inks can be used to print patterns on substrates made of plastics and other materials that areless resistant to heat. Potential applications for these inks are diverse and include electronic paper, displays, solar cells and organic TFTs*.
Inks for printed electronics
Accommodatin the need forincreasin ly fine lines

Patternin

Comparison bet een photolitho raphy and printin
Printinith DIC inks

ith DIC inks

Photolitho raphy

Production costs

o

High

Infrastructure required
Environment

Small to medium

Large

Process

Air

VacuumeMany, complex

o to medium

Low to highProduction processes
Baking temperature
Takt time

Short to medium

Long

Environmental impact

inimalSignificant

Precision

edium to hi h

High

K E Y

P E R S O N

o f

D I C

e are drivin chan e by capitali in on DIC s innovative
materials technolo ies and printin ink desi n capabilities
Our inks for printed electronics were made possible by the integration of DIC’s raw materials
technologies, compounding technologies—which determine the properties of ink—and mass
production technologies. However, there are numerous key factors besides conductive inks that need
to be considered in printed electronics, including insulators and semiconductors, meaning that it is
crucial for us to take into account overall systems. We look forward to capitalizing further on our design
capabilities for materials and printing inks and our expertise in matching inks to printing equipment
needs to contribute to the realization of next-generation technologies for printed electronics.
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DIC’s inks for printed electronics wereawarded an Outstanding Achievement
Pr ize at FPD I nter nat i o nal 2 013(Yokohama, Japan).

* Organic TFTs—thin transistors that use organic semiconductors for the active layer—are under development with the aim of facilitating the low-cost production of large electronics products.

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Sun Chemical Revamps its ebsite
The Sun Chemical Group, a core member of the DIC Group with operations in North America and Europe,
recently revamped its website, improving search capability and simplifying navigation.

http://www.sunchemical.com

Sun Chemical introduces a ne

ebsiteBy monitoring and measuring website traffic, Sun Chemical will
gain insights into the needs of current and prospective customers,
enabling it to modify content in-house and giving it the flexibility tomake online updates in the event of business or industry changes.

In October 2013, Sun Chemical launched a new global websitethat can be utilized by both current and prospective customers—from printers using flexographic, sheetfed or web offset printing
to packaged goods brand owners, cosmetics formulators andautomotive coatings manufacturers—to gain more information
about Sun Chemical products, services and innovations. Createdto help customers discover solutions that suit their businessneeds, the new website features a bold new design, an improved
search capability, content that has been optimized to take fulladvantage of search engines and simplified navigation. The
website is also socially connected.

Providin diverse value
The improved functionality and search capability makes it easierfor customers to find solutions designed for various market
segments and customer applications, making it a place where
customers can find what they want and discover innovations thatwill add new value to their businesses. For the first time, Sun
Chemical also included an “Innovation” section that highlights new
Sun Chemical products and services, ranging from electronics
materials, special effect coatings and low-migration inks to brandprotection and brand color management.

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ith customers

The new website gives Sun Chemical an improved platform for communicating with current and prospective corporate
customers, as well as with employees. Making the site more intuitive and interactive has also made it more useful.
The most challenging part of the project was sifting through more than 10,000 pages of existing content to narrow
down information pertinent to customers while at the same time being mindful of the importance of improving searchcapability, optimizing content to take advantage of search engines and simplifying navigation.
We learned through this experience that less is more. The volume of content had to be reduced to avoid
overwhelming customers. Navigation had to be easy and relevant to site visitors. The information available had toenable readers to make informed decisions and to contact Sun Chemical directly.
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Topic2

DIC E pands Supply Capabilities
for Linablue atural Blue ood Colorin
Rising concern for the health benefits and safety of food is accelerating a shift toward using natural, rather than synthetic, coloringsin the food products industry. As the world’s largest manufacturer of one of the few natural blue colorants in existence, the DIC Groupintends to bolster its supply capabilities by building a new plant in the United States.

Linablue A natural blue colorant e tracted
from edible al ae

aintainin safety and uality by inte ratin manufacturin tocover ra materials throu h production

The DIC Group’s Linablue® natural blue food coloring is made from phycocyanin,a vivid blue colorant extracted from Spirulina grown under special conditions.
Having begun research into Spirulina after noting its role as a high-quality
nutrient in traditional diets in Africa, in 1977 DIC became the first in the world todevelop commercially viable technologies for managed Spirulina cultivation. In
the years since, DIC has manufactured and marketed Spirulina-based nutritional
supplements as well as become the world’s leading supplier of natural blue foodcoloring, which it supplies for use in confectionery and desserts, among others.

To ensure premium-quality products, it is vital to manage quality at all stages of the
production process, from the cultivation of high-grade algae on strictly managed farms to theprocessing of the algae into powder. Quality thus remains a core focus in all processes, fromphycocyanin extraction to refining and concentration, color modification and sterilization. Thisstrong commitment to safety and quality underscores the market dominance of Linablue®. It
is also worth noting that algae absorbs carbon dioxide and produces oxygen as it grows, forevery 800 tons of Spirulina cultivated 1,200 metric tons of carbon dioxide are absorbed.

Linablue natural blue
food colorin

Frozen desserts
U.S. - b a s e d E a r t h r i s e
Nutritionals, LLC., is currently
building a new p lant for
Linablue ® in California.

Macarons
Candy-coated chocolate

apan s role as a drivin force behind theshift to ard natural food colorin s
Consumer awareness of the potential health hazards of artificial food colorings
has long been high in Japan. Accordingly, the trend toward natural food colorings
is well established.
In Europe and North America, where popular dislike of synthetic food colorings is
said to have begun around 2008, the shift to natural food colorings has accelerated
in recent years. It was against that backdrop that in September 2013 Spirulina
became the first natural blue food coloring to be approved by the U.S. Food andDrug Administration, while in Europe the European Commission presented natural
color guidelines that authorized sales of Linablue ®, achievements that served
to reconfirm Linablue ®’s reputation for outstanding safety. Looking ahead, DIC
expects demand for Linablue ®, already strong in Japan, the Republic of Korea(ROK) and the PRC, to expand in Europe, North America and Southeast Asia.

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In the future, e ill also e tract and commerciali ecolorants other than blue from Spirulina

In addition to blue, Spirulina is a source of a green colorant (from chlorophyll) and an orange colorant(from carotenoids), as well as of a number of useful active ingredients. We are currently working toward thecommercialization of products based on these other Spirulina-derived colorants, which will enable us to expand our
supply of safe, attractive products to people worldwide.
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Corporate Governancehttp://www.dic-global.com/en/about/governance.html

Basic Approach to
Corporate Governance
The DIC Group identifies the purpose of corporate governanceas being to ensure effective decision making pertaining to its
management policy of achieving sustainable corporate growthand expansion through sound and efficient management, whileat the same time guaranteeing the appropriate monitoring andassessment of and motivation for management’s execution ofbusiness activities. With the aim of achieving a higher level of truston the part of shareholders, customers and other stakeholders
and enhancing corporate value, DIC promotes ongoing measures
to reinforce its management system and ensure effective
monitoring thereof.

Corporate Governance Organization
A company with internal auditors, DIC maintains a Board of
Directors and a Board of Auditors. As well as appointing two highly
independent outside directors, DIC has instituted an executive
officer system, a move aimed at separating decision making andimplementation and thereby accelerating business execution andCorporate Governance Organization

clarifying responsibilities. DIC also has a Nomination Committee
and a Remuneration Committee, which include the two outside
directors, to ensure objectivity in the nomination and selectionof, and determining remuneration for, directors and executive
officers. The four-member Board of Auditors, which includes two
attorneys as outside auditors, liaises with the accounting auditors
and the internal auditing department.

System of Internal Control
To ensure fair business practices, the Board of Directors has
set a basic policy on internal control that encompasses, among
others, compliance with laws and regulations and DIC’s Articles ofIncorporation, risk and information management and the creationof systems to foster business efficiency. Specific initiatives todate have included formulating a code of business conduct thatencompasses a whistle-blowing system, various risk management
initiatives implemented by the Sustainability Committee, theestablishment of various internal rules and monitoring (internal
controls audits and environment and safety audits). The Board of
Directors also hears annual reports on the measures implemented
in line with the policy on internal control.

Meeting of Shareholders

Audit

Board of Directors
Nomination Committee

Accounting
audit

President and CEO

Remuneration Committee
Sustainability Committee

Internal Control Department

Board of Auditors

Accounting auditors

Executive Committee

Sales administrative divisions, product divisions, Production Administrative Division,
Technical Administrative Division, Corporate R&D Division,
headquarters’ administrative divisions, offices

Group companies

Internal audit

Leveraging its Position as a Global Manufacturer ofFine Chemicals to Support the UNGC
http://www.dic-global.com/en/csr/philosophy/management/gc.html
Seeking to fulfill its responsibilities as a member of the international community in a more proactive manner, in
December 2010 the DIC Group pledged its support for 10 principles put forward by the United Nations (UN),as well as for the UN’s Millennium Development Goals (MDGs), and became a signatory to the United Nations
Global Compact (UNGC).
Initially proposed in 1999, the UNGC is a voluntary initiative for companies that seeks to achieve sustainable
development worldwide. More than 8,000 companies and organizations have pledged their support for the
UNGC in the belief that global sustainable development is possible if companies align their business practices
with 10 globally accepted principles in the areas of human rights, labor, the environment and the prevention ofcorruption, and fulfill their social responsibilities.

Corporate Governance22

Sustainability Report
Goals and Achievements of a or Sustainability Initiatives

oa s andhie e ents oa orstaina i ity Initiati es

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

oa s andhie e ents oa orstaina i ity Initiati es

Goals and Achievements of a or Responsible Care Initiatives* Japan Chemical Industry Association (a general incorporated association): As one of the Japan’s major industry organizations, JCIA is a member of the International
Council of Chemical Associations (ICCA) and pursues the healthy development of the chemical industry with other chemical-industrial organizations around the world.

5

oa s andhie e ents oa oresponsie Care Initiati es

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

oa s andhie e ents oa oresponsie Care Initiati es

6ComplianceCentral Themes

To ards air and Transparent
Corporate Activities
WEB

http://www.dic-global.com/en/csr/philosophy/management/compliance.html

System to Ensure Respect for Compliance

Basic Approach toCompliance

The DIC Group has established a global compliance promotion
system led by DIC Corporation (Japan), Sun Chemical
Corporation. (Europe and the United States), DIC (China) Co., Ltd.
(PRC), and DIC Asia Pacific Pte Ltd (Asia and Oceania) as thecore members. In addition, the DIC Group established a whistleblowing system. In cases where there is an issue or question
regarding compliance, one can directly report the matter to thecompliance division. We have also established external whistleblowing hotlines that can handle reports in the languages ofmore than 160 countries. When a report is received, we respondswiftly and appropriately with due consideration for pertinent laws
while also incorporating internal and external opinions with theaim of identifying and correcting misconduct or other complianceviolations as quickly as possible.

Compliance in the DIC Group encompasses not only obeying
laws but also acting properly and in keeping with social norms.
With the aim of ensuring sustainable growth of businesses thatare both fair and transparent, DIC formulated The DIC WAY Codeof Business Conduct, a unified set of guidelines the adherence
to which it considers to be the foundation of compliance. DIC
compels all DIC Group employees to conduct themselves inaccordance with the code.

rame ork for
Promotin Compliance
The DIC WAY Code of Business Conduct embodies principles
of conduct based not only on compliance with national laws andinternational rules but also on principles essential to the businesspractices of DIC Group employees. The DIC Group promotes
the understanding and entrenchment of the code not only byholding explanatory seminars but also through e-learning. To
enhance awareness of compliance, the Group also provides
training focused on legal issues for new employees, as well as for
employees who have been promoted and transferred overseas.

Basic Outline of the DIC A Codeof Business Conduct
Basic business practices
Employee ri hts to respect, di nity and privacy
Environment, safety and health ES
Avoidin conflicts of interest responsibility to protect
DIC Group assets
5 The DIC Group s policy re ardin the prevention ofcorruption and bribery
6 Relationships ith customers, suppliers, third parties
and public officials
oney launderin and the prevention of terrorism
7
orced labor, child labor and conflict minerals
8
9 Insider tradin
0 Internal controls to ensure the appropriateness ofaccountin and financial reportin

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Our oal is to enhance lobal le al services

I serve as General Counsel and Secretary of Sun Chemical. In this role I am responsible on a global basis for Sun
Chemical’s legal, intellectual property, real estate, regulatory compliance, and environmental, health and safetyfunctions. I am proud of the work performed by each of these areas and of the collaborative working relationship that
we have with DIC. As an example of the exceptional work performed Sun Chemical employees, our Legal Group wasrecently named the “Legal Department of the Year” by the New Jersey Law Journal. This award is in recognition of thegroup’s outstanding work in providing legal services to the Sun Chemical organization and in managing relationships
with outside counsel located around the world.
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ana ement

Central Themes

Reducin Business Risks andPreventin Recurrences of Incidents
WEB

http://www.dic-global.com/en/csr/philosophy/management/bcm.html

Risk ana ement in the DIC Group

Business Continuity ana ement

Risk management is a key theme of the DIC Group’s overallsustainability policy. The Risk Management Conference
spearheads efforts to manage all types of risks, abstracting,identifying, appropriately evaluating with the potential toundermine the Group’s sustainability and taking steps to ensure
their reduction or elimination. The conference also promotes
ongoing efforts to build, maintain and operate systems andprocedures to facilitate swift responses in crisis situations.
Having defined risk management as maximizing returns andcontinuously enhancing corporate value by managing risks froma Companywide perspective using rational, optimal methods,
DIC recognizes risks in three principal categories: risks arisingfrom natural events or social circumstances that are beyond its
control; risks that affect all Group business activities and should
be dealt with by specialized departments; and risks that affect theactivities of individual businesses and should be handled by therelevant departments. The Company has strengthened measuresfor high-priority and urgent risks that are beyond its control,
notably by producing crisis management manuals and conducting
emergency drills to ensure preparedness for disasters. The Risk
Management Conference is also enhancing responsiveness bycustomizing solutions and promoting initiatives related to various
risks that must be addressed by specialized departments.

A key business continuity management (BCM) initiative within the
DIC Group was to list major products for which no alternatives areavailable and for which any interruption of supplies would have asignificant negative impact on society and to formulate business
continuity plans (BCPs) for these products in collaboration with
relevant production, technical, sales and purchasing departments.
The Group has also prepared lists that include products for which
requests for BCPs have been received from customers, which it
draws on as part of its ongoing effort to promote practical solutions
by promoting measures aimed at, among others, facilitating substituteproduction at other plants in the event of a disaster and resolving
concerns over raw material supplies.

Reinforcin

easures to iti ate Disaster Risk

The Great East Japan Earthquake damaged several of the DIC
Group’s business sites, with restoration in some cases a timeconsuming process. One outcome from this experience was thatit pushed DIC to revise emergency procedures to ensure that theGroup’s ability to respond effectively in the event not only of anearthquake but also of a major accident or a pandemic. To thisend, DIC is reinforcing its contingency plans by upgrading various
tools and systems. One example is a system that enables DIC toquickly and efficiently confirm the safety of individual employees.
This system was originally deployed in 2007, primarily at DIC’s
headquarters in Tokyo. Use of the system has since expanded
steadily to Group companies, augmenting regular emergency
drills and enhancing the speed and accuracy of response
capabilities, including personnel safety checks, in the immediate
aftermath of a disaster.

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e are promotin application of the PDCA cycle throu h solid collaboration bet een departments

I work in the Liquid Compounds Product Division, which manufactures products that apply key basic DIC technologies
and are developed to address the needs of customers for, among others, coloring capability and adhesive performance.
With the aim of contributing to society through our business activities, we promote ongoing efforts to differentiate andadd value to our products. From the perspective of risk management, customers increasingly seek effective responses tothe need for effective BCM. To foster BCM organically within DIC, I worked with relevant technical, production and sales
departments to prepare lists for core products that include specific response measures. These lists are held jointly by all
pertinent departments and the plan–do–check–act (PDCA) cycle is used to promote continuous improvement.
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Information Security

Central Themes

Initiatives to Ensure
Information SecurityWEB

http://www.dic-global.com/en/csr/philosophy/management/security.html
use in the Asia–Pacific region and Greater China in cooperation
with regional administrative companies with the aim of formalizing
information security systems at local Group companies. In fiscal year
2014, DIC will provide support for efforts to establish regulations
and guidelines as part of an overall initiative aimed at further
strengthening the information security responsiveness of overseas
DIC Group companies. DIC will strive to optimize the managementof information by planning and issuing a global security policy andrelated guidelines.

Basic Approach toInformation Security
The DIC Group has positioned information security as a key
management priority and established its Basic Policy on
Information Security, which is founded on its recognition that
protecting information assets that belong to or are managed by
the DIC Group is essential to its ability to conduct business.
In line with by this policy, the DIC Group has formulated
management regulations for confidential information, information
management guidelines and individual guidelines. These
were prepared to ensure that each director and employee fully
understands the importance of information assets, manages them
responsibly and uses them effectively. DIC will strive to further
improvements by conducting internal audits and confirming
current issues.

Reinforcin Information Security
DIC will replace its existing firewall and quarantine system
and launch a next-generation firewall to shield its system fromtargeted cyber attacks. Concurrently, DIC is implementing a
new quarantine system to enhance the security of IT devices
connected to its internal network, DIC-NET.

Promotin Information Security
In fiscal year 2013, DIC prepared the English- and Chinese-language
versions of its confidential information management regulations for

Topic

DIC Earns apan Institute of Information Technolo y A ard

The Japan Institute of Information Technology (JIIT) recently awarded DIC an IT Management Award for fiscal year 2013,
in recognition of its move to absorb its information systems subsidiary with the aim of ensuring effective IT governance.
DIC accepted the award at JIIT’s 2014 IT Management Conference, which was held February 6–7, 2014. A representative of DIC also gave
a lecture at the conference.
In Japan, it is common for companies to use information systems subsidiaries to create
IT systems. The downside of this is that many companies that have spun their IT systems
development departments off as affiliates now face a challenge in implementing effective IT
governance groupwide. Acknowledging that realizing effective IT governance would requireelevating the position of information systems operations within corporate management, DIC took
the decision to absorb its information systems subsidiary and refocus resources on systems
planning and engineering. The IT Management Award was in recognition of these efforts.
IT Management Award certificate

Notes:
1. The Japan Institute of Information Technology (JIIT) is a public interest association established in July 1981 that conducts R&D on corporate
applications of IT, as well as disseminates and promotes the practical implementation of its findings.
2. JIIT sponsors the Information Technology Awards (named the OA Awards until 2000), which recognize companies, institutions, operations, divisions andindividuals for outstanding efforts and results in using IT to revamp operations. One of these is the IT Management Award, given to entities that haveleveraged IT as an innovation tool to effect management transformation or achieve a dramatic increase in productivity.

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Environment, Safety and ealth ES and uality

Core and Cate ory-Specific Themes

To ard the Achievement ofa Sustainable SocietyWEB

http://www.dic-global.com/en/csr/environment/

Promotin Responsible Care
Basic Philosophy
As a company that handles chemical substances, DIC sets
standardized safety regulations for ESH initiatives. The Company
is working to exceed regulatory standards and fully disclose
results.
DIC established its Principle and Policy for the Environment,
Safety and Health in 1992 and in 1995 pledged to implement theprecepts of Responsible Care. Since reaffirming its support for
Responsible Care management in January 2006 by signing theCEO’s Declaration of Support for the Responsible Care Global
Charter, the Company has promoted constant improvements. In
2014, DIC renamed its Principle and Policy for the Environment,
Safety and Health the Core Policy for the Environment, Safety
and Health.

Annual Policy
The DIC Group sets an annual policy for Responsible Care initiatives,
which it also translates into English and Chinese to facilitate
dissemination and encourage initiatives Groupwide. The Group has also
developed a slogan to guide these initiatives: “Working to create a safe
global environment through Responsible Care initiatives that facilitate
personal growth for each individual employee.” In line with this slogan,
the Group pledges to pursue corporate activities that contribute to thepreservation and enhancement of society and the environment.

Policy for 2014 Responsible Care Initiatives● Promote Responsible Care activities across the global network of DIC Corporation.
● Establish a safety culture oriented toward “zero accidents.”● Set targets to reduce environmental impact through business activities and openly report performanceand achievements.
● Manage chemical substance information in an appropriate manner and provide it to customers and to
be used in DIC Group activities.

Core Policy for the Environment, Safety and ealthAs a responsible corporate citizen, and as a company that manufactures andsells chemical substances, DIC recognizes that care for the environment,
safety and health is fundamental to the management of the Company.
DIC is committed to the concept of sustainable development in all aspectsof its businesses and contributes to the global environment, including
biodiversity, by creating environmentally sound products and technologies.
❶ We take responsibility for the environmental, safety and health implicationsof products throughout their life cycles.
❷ We continuously set goals and targets for environmental, safety and healthimprovements.
❸ We comply strictly with laws, regulations and agreements relative to safety,
the environment and health. For countries lacking such laws, we prioritize
safe operations and protection of the environment.
❹ We systematically provide education and training on the environment,
safety and health.
❺ We prepare systems and audit internally to benefit the environment, safety
and health.
We disclose these policies internally and externally and ask that all
DIC Group companies observe them. The abovementioned “safety” also
encompasses security and disaster prevention.

rame ork for Promotin Responsible Care
Each year, DIC identifies priority issues to be addressed andpromotes use of the PDCA cycle for each Group business-,company-, plant- or R&D facility-driven initiative. While striving
on various fronts to ensure that initiatives progress well, theResponsible Care Department conducts regular audits to maintaincompliance and improve/upgrade environmental, safety andquality standards.

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Support for Group Company Initiatives

The Responsible Care Department provides a wide range of
support for both domestic and overseas DIC Group companies,
regardless of size, with the aim of enhancing Responsible Careinitiatives Groupwide.

Occupational Safety and ealth,Security, and Disaster Prevention

Occupational Safety and ealthPrioriti in Safe Operations

Information Disclosure and Dialo ue ith Stakeholders

The DIC Group strives to increase the transparency of its
activities through the active disclosure of information while atthe same time promoting dialogue with stakeholders by, among
others, presenting safety- and environment-related data on the
DIC website, in reports and through other media. The Group also
undertakes initiatives aimed at promoting communication withsociety, including through community meetings.

Responsible Care Auditin
Basic Approach

Responsible Care Department specialists with expertise,
experience and auditing capabilities regularly visit DIC Group
companies to assess the status of Responsible Care initiatives. In
addition, top management ESH audits, which include participation
by DIC’s President and CEO, as well as by senior executives
and executive officers, are conducted at multiple sites each yearwith the aim of enhancing Responsible Care performance levels
across the domestic DIC Group.
Overseas, Responsible Care Department specialists andregional Responsible Care officers assess the progress ofefforts at production sites and work together to enhance theeffectiveness of Responsible Care initiatives.

DIC recognizes that operational safety is fundamental to its operations,as well as a core component of Responsible Care. Accordingly, theCompany undertakes occupational safety and health, security, anddisaster prevention measures to foster a “safety first” philosophy
Groupwide and in the mind of every employee.
Because its manufacturing operations span diverse fields, DIC hasnumerous production processes that use hazardous and toxic materials
and rotating devices, including ones that do not involve chemical reactions.
Any accident involving such materials or devices has the potential tosignificantly impact society in general and damage the health of DIC andpartner company employees and of local residents.
With the aim of preventing such accidents, DIC places a high priority on
reducing risks in the workplace by reinforcing awareness of Principles of
Safe Conduct and training safety personnel. Through efforts to reinforce
the Group’s safety infrastructure and create a safety-oriented corporate
culture, DIC strives to enhance safety Groupwide.

Basic Philosophy

As a responsible member of society and a manufacturer thatsells chemical substances, the DIC Group recognizes that properconsideration for ESH is fundamental to its operations and works
to incorporate this awareness into all of its business activities.
Guided by this philosophy, the DIC Group analyzes accidents
and communicates information thus derived, based on which
it undertakes risk assessment in order to protect occupationalsafety and health.

Initiatives in iscal ear

１）DIC s President and CEO Appears in Posters

Promotin Principles of Safe orkplace Conduct

DIC’s President and CEO appeared in posters highlighting theimportance of safe workplace conduct, underscoring DIC’s
commitment to reinforcing its safety infrastructure and creating aculture of safety. These posters were prepared in three languages(Japanese, English and Chinese) and hung at production sites
and offices in all countries and territories where the DIC Grouphas operations.

(Above) DIC President and CEO Yoshiyuki Nakanishi
participates in a top management ESH audit(Below) Audit at Shanghai DIC Ink Co., Ltd.

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Status of Occupational Accidents

In 2013, the number of occupational accidents at DIC and DIC Group
companies in Japan declined, although the DART rate * for the global
DIC Group increased. Since fiscal year 2008, the Group has deployed
the DART rate, a common indicator used in various countries, to bolster
safety activities.

Safety posters featuring DIC President and CEO Yoshiyuki Nakanishi* DART rate: DART = N/EH x 200,000
N = total days away from work. EH = total annual hours worked by all employees. The 200,000 hours in the formula
represents the equivalent of 100 employees working 40 hours per week for 50 weeks per year.

a2）Risk Reductionsor

By understanding potential risks in production processes, facilities anddevices, and the hazards of chemical substances, DIC systematicallyalso prepared initiatives to prevent accidents and occupational injuries.
DIC creates risk assessment guidelines when deploying new or modified
equipment or changing production processes, informs business sites
about its guidelines and conducts training workshops.

3）Trainin Skilled Safety Personnel to Predict Risksocca io a Accid

60i(Numbers in parentheses are for fiscal year 2012)

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77

Note: Data for 2013 is for January–December.

DIC regularly educates skilled safety personnel on how tohandle chemical substances, using materials such as its Principles
of Safe Conduct and Environment and Safety Guidelines for the R&D
Department, as well as safety data sheets (SDSs) and Occupational
Accident Case Studies. In recent years, DIC has focused especially ona risk prediction training technique called Kiken Yochi Training (KYT)(“hazard prediction training”) and on hands-on safety training among
Group companies in many regions.

4）Promotin

ands-On Safety Trainin

Hands-on safety training is an effective alternative to classroom-basedlearning that uses actual equipment to simulate potential risks in theworkplace, thereby heightening employees’ awareness of the importanceof proper safety. In fiscal year 2013, DIC added five new categories ofhands-on training that use three types of equipment to the program,which is currently a mobile initiative that travels from site to site. In fiscal
year 2014, DIC intends to reinforce the program by setting up the Saitama
Hands-on Safety Training Center on a site adjacent to its Saitama Plant.
The Group recently began
deploying similar hands-on
safety training in Greater
China and the Asia–Pacificregion.

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Safe Corporate Climate Cultivation

orkin Groups

Safe Corporate Climate Cultivation Working Groups comprise personnel
in charge of safety at plants belonging to DIC and subsidiary DIC Graphics
Corporation. These groups have been active since fiscal year 2010.
Members meet regularly to discuss and exchange proposals regarding
safety policies and measures.
In fiscal year 2013, the working groups prepared safety posters andproposed the reading out of key passages from Principles of Safe Conduct
in the workplace as a measure to enhance employee awareness.

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Security and Disaster Prevention
Basic Philosophy and Or ani ation

Any fire, explosion or leak of hazardous substances froma chemical plant could have a tremendous impact on local
residents and the rest of the community and damage the health of
employees, including those of partner companies.
In addition to establishing a security management system toprevent such accidents, the DIC Group operates and maintains
its facilities in line with pertinent laws and regulations. The Groupregularly conducts emergency drills and has earthquake andother response measures in place.
DIC also undertakes risk assessments to ensure its ability toconstruct safe production facilities. In 2013, the Group formulated
the DIC Process Risk Management (PRM) Guidelines*1, which
consist of four assessment techniques and implementation
timetables for each. The Group uses these tools to conduct
regular risk assessments at each of its sites.

culture). DIC introduced its safety assessment system in fiscal
year 2013 with the goal of objectively evaluating and enhancing
its safety capabilities. This system was developed by the Japan
Society for Safety Engineering, a common benchmark forengineers in the petrochemicals industry. The system is currently
used by the 19 major corporations in Japan that collaborated toestablish the Japan Safety Competency Center.
In fiscal year 2013, DIC tested the system at three plants,
feeding back the results of voluntary assessments of safety
infrastructure and safety culture to Group sites. In fiscal
year 2014, DIC plans to evaluate one plant after renewing its
assessment system, and will consider further expanding its use.
ioara r c r

DIC PRM Guidelines outline timetables and implementation frameworks for assessing the*1 Thehandling of chemical substances, production processes, production formulas, machinery andwork practices with the aim of comprehensively identifying and steadily reducing risks associatedwith production and R&D processes.

acility Safety Assessments

１）Evaluation of Safety
DIC Group production facilities have a vast array of equipment,
ranging from chemical reaction plants to machine presses andother processing equipment. When modifying processes or
upgrading/replacing equipment, safety is assessed at every
stage from process design and construction through to operation,
maintenance and final disposal, in line with risk assessment
guidelines for reaction processes and for equipment and facilities,
to ensure higher safety levels for new processes and facilities.

Implementin Emer ency Response Drills
DIC augments daily security patrols and periodic equipment
checks with regular emergency response drills, especially at
production sites in Japan and overseas, to prepare for emergency
situations.

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

3）Initiatives to Enhance Safety Competency
A company’s ability to enhance safety competency can be defined
as its ability to maintain safety levels at its various sites. DIC’s
safety assessment system encompasses questions about safety
infrastructure (technical considerations) and the Company’s
culture of safety (operation and management of organizational

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Training in the use of fire extinguishers

Firefighting skills

In-house firefighting squad drill

Safety ana ement in o istics
Initiatives in iscal ear

To handle emergencies during transport, DIC requires transportpersonnel to carry Yellow Cards* 2 . When transporting our
products, we use containers that comply with the Fire Service Act
and other transportation laws and with UN standards.
*2 Yellow Cards are part of activities recommended by the Japan Chemical Industry Association (JCIA).

The cards contain information about the right actions to take if accidents occur and provides contact details
to ensure proper responses of transportation operators, firefighters and police officers if accidents occur
when transporting chemical substances. Transportation personnel must carry these cards at all times.

CO Emissions and Ener y Consumption Inde per nit of Production

Safe uardin the Environment

Preventin Global armin
Basic Philosophy

In light of public expectations regarding the implementation of measures tohelp prevent global warming, DIC has included initiatives aimed at reducing
greenhouse gas emissions from its production facilities within its overallsustainability policy. The Company is currently implementing a variety of
initiatives to reduce its consumption of energy—and its emissions of CO2 —asoutlined below, as well as promoting the active disclosure of related data.

Ener y Consumption Crude Oil E uivalentand Ener y Consumption Inde per nit of Productionndertake ener y-savin initiatives Group ide
Deploy effective measures throu h orkin roup activities
Operate ener y-savin co eneration systems heat and po er eneratin facilities
Employ ener y from rene able sources biomass, ind and solar po er as appropriate
at suitable sites

In fiscal year 2013, DIC inaugurated conservation efforts at overseas DIC
Group companies, which consume approximately 1.8 times more energy thandomestic counterparts.
rame ork for promotin Ener y-Savin Initiatives

In Japan, DIC has established energy-saving promotion committees
at each of its production and R&D facilities. Committee activities
include confirming the progress of initiatives, engaging in discussions
and conducting patrols. DIC has also set up an energy-saving
working group with members chosen from each production facility.
The working group fosters the exchange of information, researchpertaining to new items and the deployment of effective measures toreduce CO2 emissions. The Production Control Department provides
international support from various perspectives. This includes theoperation of management systems and human resource education,
as well as independent initiatives in each country and region.
Principal Initiatives in iscal ear

１）Initiatives in apan
Ener y Consumption and CO Emissions
In fiscal year 2013, energy consumed by the DIC Group in Japan amounted to113,500 kiloliters, calculated in kiloliters of crude oil, down 0.2 percentage pointfrom fiscal year 2012, while energy consumption per unit of production declined
1.5%, reflecting the utilization of oil byproducts from production processes
thanks to the recovery and use of waste heat, as well as to other initiatives.
As a consequence, the Group attained its target for reducing domestic energy
consumption for the period..
In Japan, the Group’s CO2 emissions in fiscal year 2013 increased 6.4% from theprevious fiscal year, to 244,377 metric tons. A major factor behind this result was ajump in consumption of electric power, as the country’s nuclear power generating
facilities remained offline, increasing dependency on thermal power and pushing up
the emissions factor for CO2 emissions from the use of electric power. In fiscal year
2014, DIC looks to further cut CO2 emissions by improving its energy efficiency.

Note: Data for 2013 is for January–December.

Promotin Ener y-Savin Initiatives

Savin the e uivalent of ,ener y-savin activity

drums of oil throu h

Energy savings from activity at DIC Group production and R&D facilities
in Japan in fiscal year 2013 were equivalent to 3,300 kiloliters of crudeoil, or 16,500 200-liter drums of oil. This represented 2.9% of total energy
consumption by domestic DIC Group companies throughout fiscal year 2012.

sin Rene able Ener y Application and Co eneration
In Japan, the DIC Group actively promotes the use energy from renewablesources (biomass, wind and solar power) at suitable sites. In fiscal year 2013,
DIC dramatically improved the generating capacity of biomass boilers (2,000
kW and 20 tons of steam per hour) and wind power generation (4,600 kW).
DIC built an 80-kilowatt solar power plant at the Kashima Plant in Ibaraki
Prefecture, as a result of which renewable energy output increased 6.1% fromfiscal year 2012. Renewable energy accounted for 7% of domestic DIC Groupenergy consumption. As a result, we reduced CO 2 emissions by 32,989
metric tons in calendar 2013.

CO Emissions Reductions at ashima Plant

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Indirect CO Emissions in the Supply Chain Scope
In fiscal year 2012, DIC reported indirect emissions in one
category of Scope 3, “upstream transportation and distribution.”
In fiscal year 2013, the number of categories increased to six(including “capital goods” and “waste generated in operations”).

E iro
i c di２）Initiatives Overseas
In fiscal year 2013, energy consumption by overseas DIC Group
companies amounted to 208,700 kiloliters, equivalent to 700
kiloliters of crude oil (up 15% from fiscal year 2012). CO2 emissions
were 478,579 tons (up 16% from fiscal year 2012). The increases
reflected the addition of production companies in the Asia–Pacificregion as a result of acquisitions.
While laws and regulations on infrastructure differ between
countries and regions, DIC strives to save energy and conduct
efficient operations wherever it is active and to set precedents
for the chemical industry. In fiscal year 2013, the Company
implemented 65 emissions reduction initiatives overseas. These
initiatives achieved reductions in annual energy consumption of
2,229 kiloliters (equivalent to 1.2% of overseas energy consumption
in fiscal year 2012) and in CO2 emissions of 5,018 tons (equivalent
to 1.2% of overseas CO2 emissions in fiscal year 2012).
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a voluntary scheme created by the Japan Chemical Industry
Association (JCIA) since fiscal year 2005.
In fiscal year 2013, DIC introduced management by objectives(MBO) at DIC Group companies in the PRC and the Asia–Pacificregion with the aim of further encouraging emissions reductions.

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３）E ternal Assessments
DIC has been reporting to the Carbon Disclosure Project (CDP) since2010. The CDP requests disclosure regarding corporate activities andenvironmental information relating to climate change. The CDP has
recognized DIC’s consistent environmental initiatives, increasing its
performance and disclosure scores for an overall score of 88B.

Reducin Emissions of Chemicals
into the Environment
Basic Philosophy

Because chemicals companies handle a considerably greater
volume and more diverse range of chemical substances thancompanies in other industries, they must be extremely vigilant
in handling to prevent discharges of such substances into theenvironment.
DIC and DIC Group companies in Japan have worked to reduce
emissions into the air, water and soil of substances designatedunder the Pollutant Release and Transfer Register (PRTR) since
fiscal year 2000 and of substances targeted for study undera E i io od i a d

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Decrease of 18%(101 tons) fromfiscal year 2012

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Principal Initiatives in iscal ear

In fiscal year 2013, the DIC Group’s principal initiatives focusedon 462 PRTR-designated class-1 chemical substances and 105
chemical substances (excluding class-1 substances) and one
substance group—chain hydrocarbons with 4 to 8 carbons—targeted for study by the JCIA. During the period, DIC and DIC
Group companies in Japan used and/or produced 93 substancesin the first category and 108 substances in the second category inamounts exceeding 1.0 ton. DIC Group companies in Japan met
their emissions targets through thorough effective management offacilities, including VOC combustion facilities.
Overseas, DIC Group companies studied emissions of targeted
substances and reported findings to regulators in line with pertinent
national and regional regulations. In fiscal year 2013, DIC Group
companies in the PRC and the Asia–Pacific region introduced MBO
using pertinent national targets and guidelines, thereby reinforcing
their commitment to such efforts. DIC will continue working to attainboth facility and operational reductions targets.
Reducin Environmental Impact on the Air, ater and Soil

１）Addressin

OC Re ulations

Having succeeded in achieving a voluntary target—set in fiscal
year 2007—of reducing atmospheric VOC emissions 30% by
fiscal year 2010 (using fiscal year 2000 as the base year) for the
DIC Group in Japan, domestic Group continue to pursue steadyannual reductions through facility improvements and emissions
management.
Chan es in Atmospheric Emissions of Substances Tar eted for Study OCs
substances, includin PRTR-desi nated substances, and one substance roup

Note: Data for 2013 is for January–December.

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2）Soil and Ground ater Pollution Studies
In Japan, the DIC Group strictly observes the Soil Contamination
Countermeasures Act, Water Pollution Control Act and other relevant
laws. The Group implements soil and groundwater surveys andcountermeasures as necessary and assesses environmental andsafety-related risks.

surpass standards specified in the Law Concerning Special
Measures Against Dioxins.

Chemical O y en Demond3）Reducin SO , O and COD
Taking fiscal year 1990 as the base year, DIC Group companies inJapan have worked to reduce sulfur oxide (SOx) and nitrogen oxide(NOx) emissions from boilers.
These are a key cause of acid rain. The DIC Group is alsoachieving steady results in the reduction of chemical oxygen demand(COD), an indicator of water quality deterioration in wastewater.

SO and O Emission olumes

Note: Data for 2013 is for January–December.

Reducin Industrial aste
Basic Approach

Note: Data for 2013 is for January–December.

4）Compliance ith Re ulations

for Dio in Emissions

In Japan, the DIC Group currently has incinerators and other such
equipment at six facilities. Continuous efforts to reduce emissions
levels have enabled the Group to achieve results that greatly

Topic

The DIC Group aims to minimize industrial waste by recycling andreusing materials. Since fiscal year 2001, DIC has been involvedin a zero-emissions initiative aimed at reducing industrial waste
disposed of as landfill.
DIC has deployed zero-emissions initiatives at DIC Group
companies in Japan since fiscal year 2008. With the aim of
expanding efforts across the global DIC Group, in fiscal year 2013
DIC began to introduce MBO at overseas Group companies.
DIC subcontracts the treatment of industrial waste to bedisposed of as landfill. The Company ensures waste is properly
treated by promoting strict compliance and on-site confirmation
by designated departments at each of its production facilities.

Advanced Initiatives in the PRC Earn DIC Green Enterprise Certification

The PRC is reinforcing regulations pertaining to chemical substances with the aim of balancing economic
growth and environmental protection. It is against that backdrop that 20 DIC Group companies in the PRC
have promoted improvements in their own practices for handling chemical substances based on the Group’s
environmental management system to reduce chemical substance emissions, water intake and discharge,
waste disposal and energy consumption and have submitted data annually to the relevant authorities.
These highly transparent initiatives have garnered considerable praise. In June 2012, Nantong DIC Color
Co., Ltd., which manufactures organic pigments and printing inks, was certified as a Green Enterpriseby the Nantong City Environmental Protection Committee, a designation recognizing companies withenvironment-friendly business practices. As a consequence, Nantong DIC Color is now seen as a model
chemicals plant.

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Principal Initiatives in iscal ear

Chan es in Industrial

sin the ETSITE Responsible Care
Data ana ement Systemaste Disposed of as andfill

In fiscal year 2012, the DIC Group in Japan introduced a Responsible Caredata management system called ETSITE to ensure rational management
and effective usage of management data for industrial waste. ETSITE is
an Excel-based data management system that provides information oncompanies that dispose of industrial waste, looking at their disposal routes
and flows, and reports to Japan's prefectural governments. In fiscal year
2013, the ETSITE system helped DIC improve the efficiency of various
practices and of progress management.
Note: Data for 2013 is for January–December.

Reducin Disposal of Industrial aste as andfill
In fiscal year 2013, DIC worked to reduce the disposal of industrial waste as landfill by recycling cinders, dust and sludge, among others, into
cement and other resources. As a result, the total volume of waste disposed of as landfill for the DIC Group in Japan in fiscal year 2013 was
19.3% lower than in the previous fiscal year.

Overvie of Environmental Impact of DIC Group Business Activities

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Product Chemical Substance ana ement

Promotin Chemical Substanceand Product Safety
Basic Approach and Implementation rame ork

In 2003, the UN Economic Commission for Europe issued thefirst edition of the Globally Harmonized System of Classificationand Labeling of Chemicals (GHS), the idea behind which was toreduce hazards through an internationally harmonized approach toclassification of chemicals by type and toxicity, the clear display of
information on labels for better understanding and the provision ofsafety data sheets (SDSs).
To respond swiftly to requests to reduce risks by providing
customers with complete information on hazardous substances,
DIC introduced the CIRIUS (Chemical Substance Information
Comprehensive Management System) for domestic products in 2009.
CIRIUS centralizes the management of raw materials and information
to facilitate the provision of reliable SDSs. The system automaticallychecks various laws and regulations, including security export
control rules; the Act on the Evaluation of Chemical Substances
and Regulation of Their Manufacture, etc; the Industrial Safety and
Health Act and the Poisonous and Deleterious Substances Control
Act. In 2013, DIC began using the Wercs (a global SDS/label creation
system developed with know-how from DIC) for products for export.

The Wercs logo

DIC now has a structure that enables it to compile SDSs for over
250,000 products that comply with national and regional laws andregulations and is accessible in all local languages. In April 2014,
DIC began using the Wercs to issue SDSs and labels for all exported
products.

Trainin in Chemical Substance ana ement

DIC endeavors to improve employee awareness and knowledge ofchemical substance regulations in Japan and abroad. This includes
providing specialized training for individuals involved in exportingchemical substances in line with the Foreign Exchange and Foreign
Trade Act, and for individuals involved in importing substances in linewith the Act on the Evaluation of Chemical Substances and Regulationof Their Manufacture, etc; the Industrial Safety and Health Act and the
Poisonous and Deleterious Substances Control Act, among others.
DIC only licenses employees who have completed designatedtraining and passed in-house examinations. Licenses permit these
individuals to engage in import and export operations. To renew theirlicenses, they must retake classes and pass the subsequent exams.
As of March 31, 2014, 1,272 employees held export licenses and 224
employees held import licenses.

Topic

Global armin Prevention
Initiatives in the PRC
In November 2013, the energy officers of 16 sites in the
PRC gathered to report on the results of global warming
prevention initiatives in 2013. They confirmed the progressof energy-saving plans and discussed useful deployments.
Authorities in the PRC are encouraging companies toswitch from light oil to a town gas that is an active biodiesel
refined from vegetable matter. Shanghai DIC Ink Co., Ltd.,
which manufactures printing inks in Shanghai, started
using biodiesel in 2013. The company plans to replace
90% of its boiler fuel with biodiesel in fiscal year 2014.

Collectin , Analy in and Communicatin the atest Information

DIC collects the latest information on chemical substances throughinternational consultants and experts, news wire services andchemicals industry associations to ensure its ability to respond swiftlyand effectively to revisions in laws and regulations.
In fiscal year 2013, DIC switched to using Wercs for the creation of
SDSs and labels for existing products for export.
In response to the May 2013 announcement by authorities in the
ROK regarding the introduction of the Act on the Registration and
Evaluation of Chemicals (K-REACH), DIC is currently analyzing
information and taking steps to prepare for implementation in 2015.

Energy management conference in Changzhou

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Supportin the Activities of DIC Group
Companies orld ide
Topic 1

To promote Responsible Care activities globally, DIC is providing leadershipto assist a variety of initiatives by Group companies worldwide. DIC also
confirms the progress of initiatives by conducting Responsible Care audits
and sharing information by identifying new issues and areas in need of
improvement. DIC focuses particularly on its 20 sites in Greater China and17 sites in the Asia–Pacific region with the aim of facilitating the eventual
establishment of independent management systems, emphasizing theimportance of:Asia Pacific DIC Safety Officers
Conference eld
Asia–Pacific region safety officers meet biannually for a conference aimed
at supporting initiatives among DIC Group companies in the region. In
February 2014, 24 representatives from 16 companies, including fromJapan, gathered at DIC Compounds (Malaysia) Sdn. Bhd. in Penang.
The gathering featured reports on accidents within the DIC Group in
fiscal year 2013 and progress on safety initiatives, as well as a discussion
on ways to deploy effective safety measures at individual sites. There werereports from all participating Group companies on their own safety results
and management system deployment. Participating officers also presented
safety initiative case studies and exchanged opinions about enhancing theeffectiveness of safety training and education and about environmental
protection activities. Safety officers at the conference thereafter attended
a hands-on training session led by DIC Compounds (Malaysia)'s safety
officers. The meeting proved so valuable for sharing information that many
participants indicated that they would like the gathering to be held annuallyinstead of every two years.

Buildin a culture of safety throu h hands-on trainin
Improvin the skills of operators at each site
Providin information on safety measures for production e uipment
Reinforcin mana ement of ha ards static electricity, rotatin
machinery and chemical substances

In line with efforts to drive activities, local safety officers in the PRC
gathered at Nantong DIC Color Co., Ltd., in Nantong, Jiangsu Province, inMarch 2013 to report on progress at their companies and participate in risk
prediction and hands-on safety training. In the Asia–Pacific region, safety
officers from relevant companies gathered for a safety conference in Penang,
Malaysia in February 2014 to confirm the progress of initiatives, share up-tothe-minute safety information and exchange opinions.
In fiscal year 2012, DIC began selecting sites with equipment andoperations similar to its sites in Greater China and the Asia–Pacific region
from its Occupational Accident Case Studies and Accident Case Studies
databases in Japan and preparing English- and Chinese-languagetranslations of case study descriptions to use in training designed to prevent
accidents. In addition, employees in Greater China and the Asia–Pacificregion have voluntarily translated Principles of Safe Conduct into English,
Chinese, Korean and Malay.
To date, the Sun Chemical Group, which focuses on the European and U.S.
markets, has pursued independent safety and environmental improvement
initiatives. In fiscal year 2013, DIC and Sun Chemical began sharing
information and resolved to promote more effective improvements with thegoal of facilitating the creation of common target benchmarks for the global
DIC Group in fiscal year 2015.

Attending DIC Compounds (Malaysia)’s hands-on training session

VOICE

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e are providin multifaceted support for Responsible Care Activities at each DIC site in Greater China
I am responsible for providing support for the Responsible Care efforts of 20 DIC Group companies in the PRC, aswell as in Taiwan. The PRC has capitalized on recent major events such as the 2008 Beijing Olympics and the 2010
Shanghai World Expo to raise the bar for safety and environmental laws and regulations. Regional governments
have now started to implement their own regulations. While keeping tabs on such moves, I am striving to improve myskills so that I am able to advise and instruct sites handling different chemical substances and products and help toenhance their Responsible Care initiatives.
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Topic 2

Qingdao City Honors Qingdao DIC
Finechemicals for Safety Excellence
In January 2014, the Qingdao People’s Government recognized Qingdao DIC
Finechemicals Co., Ltd., for firefighting and safety excellence. The city government,
which has recently reinforced local firefighting and safety capabilities following an
accidental explosion, praised the site’s daily security and disaster prevention efforts,
naming it a model company.

Citywide firefighting conference

Topic 3

Sun Chemical Group ESH Initiatives
Sun Chemical Group andDIC Enhance Collaboration

Solar Panels Installedin Wavre, Belgium

The Sun Chemic al Group, which
oversees DIC Group businesses in
Europe and North America, works
tirelessly to promote ESH initiatives tosupport its dynamic business activities.
In fiscal year 2013, Sun Chemicalbegan stepping up collaboration with
DIC on initiatives aimed at contributing
to global sustainability.

Sun Chemical has implemented a solar panel
production system in Wavre, Belgium, with a
total installed capacity of 203 kWp. The solar
panels, which have been positioned on theroof of the main building and on an adjacentparking lot, are expected to generate a totalof 175 MWh of renewable energy annually.
More than 50% of this renewable energy
will be consumed inside the plant, while theexcess will be sold to the grid to benefit otherenergy users. Solar panel-based electrical
power production at Sun Chemical’s Wavre
facility will thus allow for greater reliance on
renewable energy resources.

ESH conference in Parsippany, New Jersey, U.S.,in February 2014

New Web-Based Data
Collection System Developed
Since 2005, Sun Chemical has
collected data for key sustainability
metrics using a spreadsheet-based

EcoTrack screen

reporting system. To further enhance
the quality of reporting, Sun Chemical
recently developed a new internal Webbased data collecting system called
EcoTrack. Rolled out in 2013, EcoTrackenables continuous monitoring, gives
more transparency and improves data
quality check capabilities. It will be a key
tool moving forward in Sun Chemical’sroad map objective to review target
improvement opportunities. Historical
data collected since 2005 will also
be uploaded into the system to keep
continuity in data reporting.
All of Sun Chemical's production
sites will report into EcoTrack, raising
the internal standard for sustainability
key metrics tracking, improving quality
and enabling continuous monitoring
throughout the year.

Solar panels in Wavre, Belgium

Report on Sustainability Themes（ESH and Quality）

40

uality ana ement Customer Satisfaction

orkin to Enhance uality ana ement
and Customer Satisfaction
Basic Approach

Along with its Core Policy for the Environment, Safety and Health, the DIC
Group views the improvement of quality as a theme that is essential toupholding a sound operating foundation. Accordingly, the Group seeks toensure every employee shares the sentiment conveyed in its Quality Policy
and works continuously to enhance quality and ensure customer satisfaction.
DIC s uality Policy“Contribute to the prosperity of customers and society
by consistently providing reliable products.”

uality ana ement System

To better leverage its agility and comprehensive capabilities, in April 2012 DIC realigned
its overall quality management system (QMS), establishing a matrix-type organizationthat positions product divisions on the vertical axis and sales administrative divisions, theProduction Administrative Division and the Technical Administrative Division on the horizontal
axis. In line with this change, the Group introduced a QMS based on ISO 9001, the International
Organization for Standardization’s standard for such systems, and subsequently earned ISO
9001 certification for all of its production facilities. The Group capitalizes on this QMS and on
its overall system to promote ongoing efforts toenhance quality.
The DIC Group also uses periodic quality
audits to promote quality improvements. By
sharing customer feedback and other information
within its matrix-like quality management
organization, and promoting close cooperation
among product divisions, the Group works
tirelessly to achieve customer satisfaction.

1）Initiatives Aimed at Increasin Customer Satisfaction
Close cooperation among relevant divisions and departments from product planning through to shipment enables DIC to develop and manufacture products with high added
value, while rigorous process and identification management ensure product quality. Meticulous risk evaluation is conducted at the design review stage to guarantee safety.
Moreover, after products have been sold customer and market assessments are gathered and fed back to development departments to facilitate further quality improvements.

2）Redefinin and Promotin A areness of DIC s Distinctive uality ana ement Systems
DIC has developed a distinctive QMS that focuses on constant quality improvements through ISO-based quality audits, launched in April 2012, and quality management
assessment (QMA)-based quality initiatives conducted by product divisions. Recognizing that improving internal quality audit capabilities was crucial to raising the effectivenessof product divisions’ quality improvement initiatives, DIC provides training designed to upgrade the skills of internal auditors. Beginning in fiscal year 2013, audits are also
attended by internal auditors from other sites. Going forward, DIC will continue to focus on firmly establishing and promoting awareness of its QMS.

3）Preventin the recurrence of problems
Information on quality problems (complaints and criticisms) that arise is collated and analyzed and then shared across the Group to prevent recurrence. To
discover the causes of such problems, the Group employs naze-naze bunseki (“why why analysis”).
Naze-naze bunseki involves repeatedly asking “why” to encourage people to not jump to conclusions, but rather to investigate and identify actual root
causes, thereby making it possible
to ensure problems do not recur.
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Chan e in the umber of Product Returns
Chan e in the umber of Complaints Received
DIC also applies naze - nazebunseki in determining the causesof accidents, an approach that
continues to yield solid results.
Group exercise using examples of actual
accidents to analyze causes

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Core and Cate ory-Specific Themes

orkin to Enhance ob Satisfaction
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http://www.dic-global.com/en/csr/stakeholder/staff.html

Ob ectives of DIC s uman
Resources ana ement System
With the aim of being a company where employees can fully
exercise their abilities, DIC strives to support a healthy work–
life balance and create a work environment conducive to job
satisfaction. DIC also fosters local human resources in markets
around the world, which it recognizes as essential to ensuring
sustainable corporate growth.

Respect for uman Ri hts
The DIC WAY Code of Business Conduct, which outlines
standards DIC Group employees are expected to observe, lays
down provisions prohibiting human rights violations and requiring
respect for diversity, philosophies that are the foundation of the
DIC Group’s corporate activities. All DIC Group employees are
obliged to provide written pledges to abide by The DIC WAY Codeof Business Conduct and to conduct themselves as stipulated
therein.

Promotin Diversity

E pandin Career Opportunities foromen

DIC is implementing a variety of initiatives to promote career
opportunities for women in line with its commitment to creating awork environment in which motivated employees can fully exercise
their abilities. In addition to measures designed to transform themindset of employees and the corporate culture of the DIC Group,
the Group has undertaken various steps to heighten the drive anddetermination of female employees, including providing education
aimed at enhancing awareness and broadening the range of jobs
open to women. DIC also continues to offer specialized training
for female employees that have been tapped for management
positions and one-on-one training designed to expand job
opportunities.
Thanks to these and other efforts, the number of female
employees who have qualified as candidates for management
positions continues to increase steadily. As well as increasing thenumber of female employees appointed to management positions,
DIC will continue promoting initiatives focused on boosting theoverall number of female employees in its labor force. As well, DIC
continues working to boost the number of new female graduates it
recruits from Japan’s universities, a key source of talented humanresources.

Advancin the Employment of Individuals ith Disabilities

The DIC Group is working to create human resources systems
that enable it to foster local employees of its affiliated companies
around the world—people who will be crucial to the success of
its current medium-term management plan—and to encourage
oppor tunities for individuals based on business-related
considerations, without regard for nationality. Having createda human resources system and introduced specialized training
for the next generation of local senior management at Group
companies in the PRC, DIC took similar steps for affiliates inSoutheast Asia. DIC is also promoting the establishment of global
human resources databases and the development of, among
others, systematic training programs.
In Japan, DIC not only endorses global training for Japaneseemployees but also actively includes foreign nationals among new
university graduates and mid-career candidates recruited.

eport on

As of March 31, 2014, individuals with disabilities accounted
for 2.22% of DIC’s total labor force, exceeding Japan’s legally
mandated quota of 2.0%. Going forward, DIC will continue striving
to exceed its legal obligation by creating a work environment that
increases retention rates and by enhancing workplaces to ensure
equal access for disabled employees.

Encoura in Reemployment after Retirement

In addition to establishing a system that facilitates the
reemployment of individuals up to 65 years of age, in compliancewith the Law Concerning Stabilization of Employment of Older
Persons, DIC works to secure reemployment opportunities
through the use of work sharing. This framework ensuresreemployed individuals are able to maximize their experience andmake full use of their accumulated technological capabilities andspecialized expertise.

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Initiatives that Support a ealthy
ork ife Balance

umber of Employees sin DIC s Childcare eave System

In 1986, DIC blazed a trail for chemicals manufacturers inJapan by implementing a childcare leave program. Since then,the Company has introduced a number of other systems andprograms designed to assist employees balancing the demandsof work and childcare, as well as introduced flexible working
styles that make it easier for employees to make use of thesesystems, thereby ensuring that its overall Work and Childcare
Balance Support Program, established in 2007, exceeds legal
requirements. As a consequence, there is currently very little
difference in the average years of employment for male andfemale employees.

Work and Childcare Balance Support Programs

Avera e ears of Employment

Childcare eave
Pro ram

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

Childcare hileorkin Pro ram

This program encompasses two flexible working systems. One enables
employees to shorten their daily working hours by up to three hours until the endof the child’s third year of elementary school, while the other allows employees
to stagger their working hours to accommodate childcare schedules.

Rules concernin returnin
to one s previousor an e uivalent position

These rules specify that employees returning from childcare
leave will return to their original position or an equivalent
position.

Economic support
systemThis system enables employees on unpaid childcare leave toborrow a portion of their bonus in advance. Employees may also
use this system to obtain an internal loan to cover major expenses
for, among others, fertility treatments or the cost of daycare facilities
for children, thereby relieving financial concerns.

Information sharin
to promote pro ram
participation

DIC’s views on support for work and childcare balance,
as well as a guide to its various available systems and to
make use of them, are posted on internal websites and theCompany’s intranet.

* Calculated based on the years of employment of individuals employed at the time.

Since 2002, DIC has also offered an option where regular
employees can choose between career courses that either
include or exclude transfers to other locations that would also
require them to move house. In fiscal year 2012, the Company
introduced a system that allows management-level employees
to limit the locations to which they will accept transfers, making it
possible for employees who are unable to accept transfers thatinvolve relocating because of childbirth, childcare or nursing care
responsibilities to effectively balance the responsibilities of theircareers and their private lives.

Acquisition of the Kurumin Marki ca
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Balancin a career and childcare is a challen e, but I feel happy and fulfilled

When I first joined DIC as a salesperson, I was a bit taken aback by the attention given to the fact that I am a woman, but it was neveruncomfortable in any way. The biggest test came after I became pregnant, had my baby and then returned to work after taking maternity
leave and childcare leave. First, there were all the unexpected and bewildering changes that come with pregnancy. Then I was up to my ears
looking after a new baby, a situation that was compounded by anxiousness about being away from work for so long. Since coming back towork, the limits of being a working mother have been a source of some pressure, but everyone in my department and family has been reallyencouraging. Balancing a career and childcare is certainly a challenge, but it’s one I took on readily and I feel happy and fulfilled in bothroles. I’m really grateful to have such support, and I will continue to do my very best both at work and at home.
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a ai aCarin for ental ealthTrainin System

Addressing mental health issues in the workplace is a challenge that has
attracted increasing attention in recent years. DIC works to correct problems thathave been shown to negatively affect psychological well-being, implementing
measures to combat harassment and digitizing the management of work hours
to prevent extreme overwork to ensure its labor management practices are incompliance with legal requirements. DIC has also established a mental healthprogram under the direction of an in-house occupational health psychologist,
under which it is promoting comprehensive efforts to address mental health careissues, including providing ongoing training to facilitate effective line care* andequip employees with self-management skills, installing an internal help deskand providing access to outside counselors, and providing support to ensure asmooth return to work for employees taking leave.

DIC’s training system comprises programs in six categories: managementlevel training, global human resources development, level-specifictraining, department and job-specific training, on-the-job training and selfdevelopment. These programs are based on practical curricula and focus
on enhancing workplace skills and accelerating change in line with businessstrategies. DIC is currently in the process of restructuring its departmentspecific training programs to create a framework that meets the requirementsof departments and jobs. In fiscal year 2013, we systematically createda human resources development framework for sales departments andimplemented training, having previously done the same for production andtechnical departments.
In the area of global human resources development, DIC continues
to expand the number of trainees it sends from Japan to overseas Group
companies. In fiscal year 2013, a total of 20 individuals were dispatchedto eight countries and territories, including the United States, the PRC andSingapore. DIC also operates a reverse trainee program under which it
welcomes trainees from overseas Group companies to Japan. These two
programs together comprise a global personnel exchange system thatenables DIC to foster global human resources with practical skills. DIC alsooffers the Global Challenge Program, which targets young employees inJapan, featuring a curriculum that encompasses not only language instruction
but also training aimed at, among others, cultivating a global perspective,
understanding other cultures and developing mental toughness.

* Line-care training: Training for supervisors to help them recognize promptly when an employee isunwell and respond appropriately by, for example, recommending guidance orcounseling or making workplace improvements.

Securin and osterin

uman Resources

Ability-Oriented ualification System and air and Impartial Treatment

To enable all employees to fulfill their potential in jobs suited to theirabilities, and to ensure that their efforts are reflected appropriately in theirtreatment, DIC has consolidated its numerous employee qualification
systems irrespective of job classification and educational credentials.
The selection of employees to recommend for qualification is done
through screening based on objective standards, thereby guaranteeing
equal opportunities for promotion to all motivated, capable employees.
Personnel evaluation and remuneration systems designed to enhance
job satisfaction ensure that abilities and achievements are assessed
appropriately and reflected in a timely manner in their treatment. Of note,
DIC has introduced management by objectives (MBO) into its personnel
evaluation system, a goal-setting management tool that promotes both
corporate growth and employee development. Results of individual
evaluations are fed back in full to employees, including reasoning behinddeterminations, a transparent process that ensures employees arelargely satisfied with evaluation results.

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DIC s Personnel Evaluation System

Green arrows indicate processes that are implemented via the intranet
Target setting, evaluation, feedback and preparation of career development
sheets are implemented via the intranet.

The e perience you accumulate in your day-to-day ork is the key to
becomin someone ho can function any here in the orld

I took part in the Global Challenge Program because I was looking for an opportunity to improve my English, which wasn’t very
good. It was a little naïve to think that “global” skills equaled language ability. I remember our instructor saying, “When you encounter
another culture, can you accept and enjoy it or is your automatic reaction to reject it as ‘foreign’?” Over the course of my career,
I’ve met a wide range of people and as a result have had the opportunity to encounter a variety of different cultures. The Global
Challenge Program taught me that it’s important not to let your job take up all your energy. It’s important to be interested in newthings and willing to continue learning. I look forward to applying the practical global skills I’ve accumulated to continue growing in
my career and to become someone who can function effectively anywhere in the world.
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Supply Chain

ana ementCore and Cate ory-Specific Themes

Global Supply Chain ana ement
http://www.dic-global.com/en/csr/stakeholder/partner.html
assess the CSR procurement status of suppliers, including the
newly added items, as well as to visit certain suppliers to conduct
on-site inquiries, enabling it to confirm the progress of initiatives
to promote CSR procurement, as well as to encourage awarenessof related concerns.

Basic Supply Chain ana ement
Philosophy

DIC Group Supply-chain CSR Deployment Guidebook

With the aim of fulfilling its responsibilities to society throughout its
supply chain, from the production of intermediate materials to thesale of DIC Group products, the DIC Group has formulated the
DIC Group CSR Procurement Guidelines. The Group promotes
CSR procurement across the entire supply chain by ensuring thatall suppliers understand and agree to abide by these guidelines.

DIC Group CSR Procurement Guidelines
Compliance ith la s and social norms
Respect for human ri hts and consideration for ork environments
Safety and hy iene
Promotion of sound business mana ement
Consideration for the environment
Information security
Appropriate uality and safety and improved technolo ies
le ible attitude to ensure stable supplies and respond to chan eContribution to local communities and society
Promotion of CSR deployment of CSR in the supply chain

Global Perspectives

Promotin CSR Procurement

To broaden awareness of the DIC Group CSR Procurement
Guidelines among suppliers, in 2013 DIC held CSR procurement
briefings at Group companies in the PRC and began assessing
the CSR procurement status of local suppliers. In Southeast
Asia, where supplier assessments commenced in 2012, theGroup provided feedback to suppliers outlining its findings andsuggesting improvements.
The DIC Group continues to promote efforts to eliminate
conflict minerals from its supply chain. The Group has completed
traceability surveys worldwide regarding most commonly mined
conflict minerals in both the production and the transport ofmaterials it purchases from suppliers.

Since 2010, DIC has assessed the CSR procurement status ofand provided feedback to more than 400 suppliers, acting in linewith the DIC Group Supply-chain CSR Deployment Guidebook. In
fiscal year 2013, we revised the guidebook, including a number of
new items to be checked in relation to issues attracting increased
concern in recent years, including biodiversity preservation andmeasures for dealing with conflict minerals, thereby expanding thescope of assessment. DIC currently produces Japanese-, Englishand Chinese-language versions of the guidebook. In fiscal year
2014, the Company will use the revised guidebook to once again

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DIC and its suppliers areorkin to ether to promote CSR procurement

DIC provides a broad range of products that supply a diverse range of customer needs. Accordingly, we also require a wide variety of materials. In recent years, thenumber of overseas suppliers we use in overseas markets has grown, with a particularly large proportion of them located in the PRC. I have been in charge of CSR
procurement since 2010. Since then, we have conducted assessments of and provided feedback to suppliers, in some cases visiting suppliers directly to conduct on-siteinquires and exchange views, a process that has yielded valuable insights. With general understanding of CSR procurement having increased in Japan in recent years, ourinitiatives have succeeded in bolstering supplier awareness. Going forward, we will conduct CSR procurement assessments of our suppliers—including those in overseas
markets—in line with version 2 of the DIC Group Supply-chain CSR Deployment Guidebook, which has been revised to include a number of sustainability-related items.
Through these and other efforts, we will continue working to ensure our ability to provide stable supplies of environment-friendly, socially responsible products.
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Business odels that Respond to Social Imperatives

Themes that evera e Our ni ue Capabilities

Establishin a Solutions BusinessWEB

http://www.dic-global.com/en/csr/stakeholder/customer/satisfaction.html
of information networks, continued to drive the developmentof materials for printed electronics. In addition to automobiles,
information and communications and other fields that necessitate
advanced technologies, DIC is also responding to social
imperatives in such areas as packaging, graphics and the field theCompany has dubbed “life and living.”

Capitali in on Chan es in theeeds of Society
The DIC way of doing business starts with listening to what ourcustomers say. The cornerstone of our approach is to swiftly
grasp the concerns of our customers and, by identifying concerns
shared by multiple customers, to gain insights into evolving social
imperatives and offer appropriate solutions. While our starting
point is the voice of our customers, we also pay heed to issuesof global significance, such as global warming, with the aim ofpredicting trends and anticipating the future needs of society.

Enhancin Brand Stren th
Established as a printing inks manufacturer, DIC has expanded
its business by leveraging its capabilities in organic pigments andsynthetic resins. The Company’s wealth of elemental technologies
is what makes these products possible. To encourage broader
customer awareness of its distinctive products and technologies,
DIC publishes market-oriented product guidebooks (editions forelectronics and automotive products, packaging products andBusiness Activities ith Rootsin Societal Issues
Forces propelling the increased presence of electric vehicles
include the need to reduce emissions of greenhouse gases
and promote the use of renewable energy, both critical toresolving such crucial issues as global warming and fossil fueldepletion. However, a number of technological challenges
must be addressed to further expand use of electronics insuch vehicles. Of particular note, it is necessary to increase
the capacity of storage batteries and to reduce the size andweight of powertrains*1. With the goal of responding to social
imperatives, DIC will continue to promote extensive research
aimed at addressing these challenges, based on which we willdevelop technologies that facilitate concrete, viable solutions,
including innovative materials that boost battery capacity andimprove the performance of power devices*2. In the informationand communications field, the growing trend toward wearable*3
and flexible*4 devices, bolstered by the increased sophistication

products for the life andliving field). DIC also
strives to enhance thestrength of the DIC brandthrough par ticipationin trade shows such as
FINETECH JAPAN andTokyo Pack.

*1 In a motor vehicle, the powertrain is the group of components that transform stored energy into kinetic
energy for the purpose of propulsion. The engine generates power and transfers it via the transmission
to driveshaft, differentials and final drive.
*2 A power device is a semiconductor used as a switch or rectifier in power electronics.
*3 Wearable devices are incorporated into accessories such as watches and glasses and worn on the
body rather than carried like traditional mobile devices such as smartphones and tablet computers.
*4 Flexible devices are bendable, rollable and more durable than conventional devices made with glass orother stiff, breakable materials.

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e be in by analy in social needs

Our team is charged with analyzing global megatrends from four perspectives: the environment; economic and political
implications; legal implications and standardization; and technology, and using our findings to predict what sorts of
new markets future social needs will bring about. The emergence of any new market almost always brings a hostof technological challenges. We work with R&D departments to promote the development of new technologies that
address such challenges. Looking forward, I'm excited to be helping DIC provide solutions to social imperatives in suchareas as resources and energy, transport vehicle, construction, and healthcare and medical devices.
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e Technolo y Development and alue Creation

Themes that evera e Our ni ue Capabilities

Proposin Solutions that evera e
DIC s Elemental Technolo iesWEB

http://www.dic-global.com/en/csr/technology_development.html

Developine Technolo ies and CreatinalueWith the aim of achieving its Color and Comfort by Chemistry management vision, the DIC Group is leveraging its core technologies, including
those in the areas of optics and color, organic molecular design and polymer design, as well as its elemental technologies in such areas assynthesis, compounding and formulation, and surface treatment, to develop high-value-added products. The Group is also building a portfolioof next-generation products and new technologies that will support sustainable growth for such key applications as LCDs, electronics, digitalprinting and packaging, by integrating technological resources originating across the Group.

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In addition to promoting the use of water as a base material and the elimination of solvents, the DIC Group is advancing the developmentof environment-friendly products that will help enhance the environmental performance of the LCDs, electronics and electrical equipment,
automobiles, printing inks and other finished products in which they are used.

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Promotin Environmentriendly Products

Products sed in CDs

In the area of organic pigments for the color filters used in LCDs,
DIC recently launched a new blue pigment. The Company is also
working to further enhance the performance of its green pigments
for color filters, which are renowned for delivering excellent
brightness and contrast. In the area of LC materials, DIC is taking
steps to further improve the capabilities of its products for use
in large-screen LCD televisions and continues to promote thedevelopment of new LCs for next-generation devices.

Conscious always of the importance of ensuring its products areenvironment-friendly, DIC promotes the development of products andnew technologies that are useful to society and works to increase theweighting of environment-friendly products in its portfolio, by reducing
the volume of hazardous substances it uses, focusing on productsthat are less hazardous and products that facilitate recycling, andrealizing safer production processes that generate less waste anduse less energy. DIC also conducts environmental assessments
on a continuous basis and strives to maintain a solid grasp of laws
and regulations in different countries and territories and of trends
in environmental measures, thereby ensuring its ongoing ability toengineer products that comply with diverse regulations governing theuse of chemical substances in different markets. In fiscal year 2013,environment-friendly products accounted for 57% of all products put
out by DIC and subsidiary DIC Graphics.

Products sed in Electronics and Automotive Applications

In PPS compounds, DIC previously developed a molding
compound that delivers improved thermal resistance and vapor
barrier properties and is increasingly favored for use in electricalcomponents for hybrid vehicles. In industrial adhesive tapes,
recent development efforts yielded a number of products thathave improved the performance of smartphones. These include
an antiscattering adhesive film, which leverages DIC’s exclusive
hard coat technologies to prevent shards of glass from scatteringin the event of screen breakage and also offers increased
fingerprint resistance, as well as a waterproof double-sided
adhesive tape and an ultrathin adhesive tape.

ife Cycle Assessments
Currently nder Consideration
In recent years, manufacturers have been required to quantify
their consumption of nonrenewable resources and their emissionsof substances that negatively affect the environment. In responseto this and other trends driven by common concerns, DIC iscurrently considering the introduction of life cycle assessment(LCA) initiatives to ensure it fully grasps the various environmental
impacts of all DIC Group products, as well as the adoption of theGreenhouse Gas Protocol’s*1 Scope 3*2 standard.

Printin Inks

In the area of offset inks, recent efforts focused on UV-curable
inks that deliver outstanding sensitivity and printability andrespond to the use of UV printing systems that use weaker UV
radiation or LED lamps, thereby reducing consumption of electric
power. In gravure inks, DIC commenced full-scale sales of a newline of inks for food packaging that maintains the superb image
quality and suitability for the high speed of gravure printing anddelivers an improved performance in terms of environmental
and food safety, thereby responding to the needs of customers
seeking to market their products worldwide.

*1 The Greenhouse Gas Protocol, or GHG Protocol, is a suite of standards for calculating and reporting ofgreenhouse gas emissions.
*2 Scope 3 is the GHG Protocol’s standard for calculating indirect greenhouse gas emissions resulting
from production, transport, business travel and commuting, among others, across an entire supply chain.

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e are developin PPS compounds for use in ne t- eneration automotive components

The outstanding heat resistance, electrical properties, chemical resistance and other performance features of PPS
compounds have made them a popular alternative to metal materials for components used in automobiles, hot water
heaters and lithium–ion batteries (LiBs), among others. With the remarkable rise in popularity of next-generation hybrid,electric and fuel cell vehicles, the need to reduce vehicle weight has accelerated efforts to shrink component size andincrease motor output, underscoring the importance of developing new materials and mass production technologies.
Our team will continue to address these challenges by capitalizing on the comprehensive strengths of the DIC Group.
We look forward to helping expand the Group's share of the global market for PPS compounds.
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armony ith the Community and Social Contributions

Themes that evera e Our ni ue Capabilities

Addin Color and Comfort to ifestyles
WEB

http://www.dic-global.com/en/csr/society/

Basic Approach toSocial Contribution

Guidelines for Social Contribution Activities
In line with its Color and Comfort by Chemistry management
vision, the DIC Group will promote social contribution initiatives
in three areas: business activities, culture and education, and thecommunity and society.

Based on its Guidelines for Social Contribution Activities,
established in fiscal year 2009, the DIC Group promotes harmony
with local communities and individuals through activities aimed atbuilding a strong relationship with society.

http://www.dic-global.com/en/csr/society/guideline.html

WEB

E amples of Recent Social
Contribution Initiatives
Publication of the Guidebook for the Color Universal Design–
Recommended Color Set

The DIC Group is actively involved in R&D in the area of color
universal design (CUD), as well as expanding public awarenessand understanding of CUD’s importance. In November 2013,
research conducted by the Group—in cooperation with theJapan Paint Manufacturers Association, the Industrial ResearchInstitute of Ishikawa and the Color Universal Design Organization
and under the supervision of the University of Tokyo—publishedthe Guidebook for the Color Universal Design–Recommended
Color Set. In developing this color set, participating organizations
capitalized on their par ticular exper tise in color vision
characteristics to verify and adjust proposed colors, a processthat facilitated the creation of a set of colors that are relatively
easy to distinguish regardless of ability to see colors and canbe reproduced using printing inks, coatings and digital imaging
devices. The set encompasses 20 easy-to-distinguish colors: nine
high-saturation accent colors suitable for publications design,
printed text and other comparatively small surfaces; seven colors
appropriate for broader surfaces such as directories and maps;
and four achromatic colors easily distinguished from the preceding
16 colors, thereby ensuring information is conveyed accurately,
and usable in printing inks, coatings and digital imaging devices.
(Two additional alternative colors are included for coatings.)
WEB

http://www.dic-graphics.co.jp/navi/color/ud.html (Japanese only)

C O M M E N T

Our oal as to make C D a desi n system that everyone can use
We've had many people say to us that they want to apply CUD to their design work, but that they don't know what
colors are easy to distinguish and need some sort of guide. These are the people we had in mind when we produced
the Color Universal Design–Recommended Color Set. We developed the set by taking colors that are commonly foundin everyday life and for each chose the tones that were easiest to discern. This color set has been adopted for a wide
range of applications, including publications and choosing colors for information on signs. We've received a great dealof positive feedback from people who have found the set useful in design work. DIC's new Guidebook for the Color
Universal Design–Recommended Color Set provides information on where and how the color set should be used, as
well as advice on things designers need to be mindful of, all presented in an easy-to-understand format. Looking ahead,
we will continue to modify and improve the Color Universal Design–Recommended Color Set in response to feedbackon actual examples of use, as well as to advances in coating and printing technologies.
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Science ab Pro ram

Initiatives ed by the Central Research aboratories

In line with the Japanese government’s effort to promote career
education initiatives for students, as well as to help curb a decline in the
popularity of science among children—an issue of increasing concern
in Japan—the DIC Group provides employee-taught visiting sciencelabs at public schools with the aim of encouraging children to realize theclose relationship between science and their daily lives. Drawing on its
distinctive capabilities, DIC conducted a visiting science lab program in2013 that focused on simple experiments in pigment synthesis and offset
printing. Evaluated highly for its curriculum, as well as for the consistencyof its activities, this program was among the top finishers in the 2013
CSR Initiative Award in Education*1, sponsored by Tokyo-based Leavea Nest Co., Ltd., winning in the Award for Visiting Labs and Lectures
for Elementary School Children category and placing in the Award for
CSR Initiatives in Education Selected by Junior and Senior High SchoolStudents category.
*1 The CSR Initiative Award in Education
comprises the Award for Visiting Labs andLectures for Elementary School Children
and Award for CSR Initiatives in Education
Selected by Junior and Senior HighSchool Students, which are voted on by,respectively, teachers and junior and seniorhigh school students from across Japan.

The Central Research Laboratories offers a variety of visiting science labs
and classes on uniquely DIC themes such as chromatics for nearby schools.
In May 2013, employees from the facility served as lecturers for a science lab
titled “Experiencing Science through Household Items” at Chiba Prefectural
Funabashi High School, a designated Super Science High School*2. Led
by researchers from the Central Research Laboratories, the lab included
experiments in extracting the natural colorant from Spirulina and rheology (thestudy of the deformation and flow of matter) experiments using mayonnaise
and honey. Lecturers also incorporated a career education component to thelab, taking time after the lecture and experiments to talk to interested students
about the challenges and rewards of being a researcher.
*2 Super Science High School is a designation awarded by Japan’s Ministry of Education, Culture,
Sports, Science and Technology (MEXT) to senior high schools that implement curricula focusedon the sciences and mathematics that goes beyond the Ministry’s official guidelines with the aimof fostering the next generation of talented engineers and scientists.

a amura emorial DIC useum of Art

The Kawamura Memorial DIC Museum of Art, located adjacent to
the Central Research Laboratories in Sakura, Chiba Prefecture,
was established in 1990 to publicly exhibit works of art collectedby DIC Corporation and its affiliates. In May 2014, the museum
will celebrate its 25th anniversary. The museum exhibits works
from a collection that spans numerous genres, with a focus
on 20th century American art, and encompasses works by
Rembrandt; Impressionists such as Monet and Renoir; modern
European artists such as Picasso and Chagall; and early modern,modern and postwar Japanese artists.
In 2014, the museum will hold a special exhibition showcasing
works from its permanent collection that will include a numberof seldom-shown pieces. Also on the calendar is a retrospective
exhibition of works by much-talked-about young Japanese artist
Tomoo Gokita, scheduled to begin in September.
Another appealing aspect of the Kawamura Memorial DIC
Museum of Art is its location on a lushly forested 10-hectaresite that has been open to the public since the museum’s
establishment. In 2013, the museum established a flower garden

Science lab

DIC’s 2013 CSR Initiative
Award in Education
certificatesC O M M E N T

e strive to build brid es that enable children to connect ith today s fast-chan in

orld

DIC's visiting science lab program in 2013, the theme of which was “Chemistry's Ability to Bring Color to Life,” wonin the Award for Visiting Labs and Lectures for Elementary School Children category and placed in the Award for
CSR Initiatives in Education Selected by Junior and Senior High School Students category in the 2013 CSR Initiative
Award in Education, which we sponsor. Voters were particularly impressed by the choice of subjects familiar tochildren—pigments, which are used to color most industrially manufactured products, and offset printing, used forschool textbooks and other printed materials—to convey the close links between science and everyday life, as well
as by the fact that DIC employees actually went to schools. Many of the teachers who voted this time commented
that the value of the program was that it not only encouraged children to take an interest in science but also enabled
them to connect with the outside world through communication with DIC employees. This is the true potential of CSR
initiatives in education.
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in one area of the site containing more than 100 species offlowering plants and trees that enables visitors to enjoy the colorsof seasonal flowers and foliage. Active in efforts to preserve
woodlands and biodiversity, the museum has also established abiodiversity satellite, a special biodiversity-themed display area, in
cooperation with the Chiba Biodiversity Center.

are currently conducting production and technological feasibility
studies in Zambia with the aim of facilitating local cultivation of
Spirulina for local consumption. In addition to maintaining existing
programs, which include the donation of bulk powdered Spirulina,
the DIC Group has broadened the scope of its efforts to encourageawareness and consumption of Spirulina in Zambia. Currently, theGroup also welcomes Zambian engineers to Japan for training andprovides production and technological support through assistancewith selecting locations for cultivation and providing information on
raw materials.
The DIC Group is also engaged in a variety of other initiatives
designed to promote the nutritional value of Spirulina. In fiscal year
2013, these included a nutritional education program for private
elementary schools in the Nagoya area.
* The AFF is an NGO established in 1985 in California by current Chairman of the Board George
Hara. The goals of the AFF include supporting the advancement of developing countries.

undraisin Efforts in Support of Social

elfare Initiatives

DIC has a matching gift program whereby it matches the total
amount collected through an annual year-end fundraising drive
spearheaded by its employees’ union. Funds raised through the

Biodiversity satellite2013 drive and matchinggift program were donatedto 19 children’s homes andfacilities providing support
for disabled individuals.

Nature trail

Spirulina Promotinarmony ith Society

DIC employees visiting Hifumi Gakuen in Machida,
Tokyo, to present a donation

The DIC Group is the world’s largest supplier of Spirulina, acyanobacteria rich in more than 50 nutrients, including vitamins,
minerals and essential amino acids. In line with a support agreement
concluded in 2009 with the Alliance Forum Foundation (AFF)*, aJapan-based nonprofit organization (NPO), the Group provides
assistance to the Spirulina Project, an AFF initiative that seeks toalleviate hunger and improve nutrition in the Republic of Zambia.
In June 2012, with the purpose of contributing to the well-beingof the people of Zambia, we
implemented a projec t toassess the impact of Spirulina
on human health. This project
verified a reduced incidence ofmalnutrition among children who
regularly consumed Spirulina.
Encouraged by these findings,
the DIC Group and the AFF

Support for Reconstruction ollo in the Great East apan
Earth uake and Other Disasters

Since 2011, DIC has provided support for reconstruction in areas
devastated by the Great East Japan Earthquake as a participant
in the IPPO IPPO NIPPON project, an initiative organized for thispurpose. In fiscal year 2013, DIC also donated funds to assist
recovery efforts in the Philippines following Typhoon Haiyan,a super typhoon that struck in November 2013. Funds were
given to the Philippine Red Cross
via DIC Philippines, Inc., with DIC
Philippines’ general manger Mario
Estrada visiting the Red Cross
directly to present DIC’s donation.

IPPO IPPO NIPPON project logo

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Communication ith Stakeholders

Themes that evera e Our ni ue Capabilities

Promotin Disclosure and CommunicationWEB

http://www.dic-global.com/en/csr/stakeholder/

Basic Approach toPromotin Communication
The DIC Group places a priority on communication withstakeholders, which it promotes actively through, among
others, direct dialogue, websites and events. By communicating
effectively with stakeholders, the Group strives to ensure anadequate understanding of stakeholder expectations to ensure
such expectations are reflected in its business activities. The
DIC Group is also expanding its awareness of the concept of
stakeholder engagement, a key requirement under ISO 26000.

Ties ith Customers
In fiscal year 2013, the DIC Group promoted a number of
initiatives aimed at enhancing communication with customers
in Japan. In August 2013, we redesigned the showroom at theCentral Research Laboratories in Sakura, Chiba Prefecture,enabling us to provide a better experience for visitors to thefacility. The revamped showroom features displays that illustrate
the key role DIC products play in everyday life, a format designed
to stimulate interaction between visitors and staff.

Topic

Responsible Care Dialo ue eetin

As an organization with a global presence, the DIC Group works
continuously to strengthen its ties with customers in overseas
markets. In fiscal year 2013, the Group introduced a number ofadvanced technologies at electrical- and electronics-themed
trade shows in Asia, including major flexible panel display (FPD)themed trade shows in Taiwan and the PRC in August and October,
respectively, and the International Meeting on Information Display(IMID) in the city of Goyang, in the ROK, in October.

Ties ith Shareholders
and Investors
The DIC Group strives to ensure fair, appropriate and timely
disclosure and to communicate closely with investors andincorporate their opinions and requests into its management
and operating activities. In fiscal year 2013, the Group sought
to enhance communication with domestic investors by holding
two results presentations for institutional investors and securities
analysts, as well as by participating in investor relations (IR)conferences and small-group meetings. Overseas, the Group
held IR meetings in North America, Europe and Asia, encouraging
greater understanding of the Group’s strategies throughpresentations by senior executives.

eld at Sakai Plant

In February 2014, DIC’s Sakai Plant hosted the ninth Sakai–Senboku region Responsible Care dialogue meeting.
This meeting, which is sponsored by the RC Committee of the Japan Chemical Industry Association (JCIA) andfive committee member companies with operations in the Sakai–Senboku region (Mitsui Chemicals, Inc., Lion
Corporation, Ube Industries. Ltd., Sakai Chemical Industry Co., Ltd., Kyowa Hakko Kirin Co., Ltd. and DIC) andheld biennially with the aim of deepening local understanding of the activities of member companies, focuses on
introducing the operations of the companies and panel displays describing the companies’ Responsible Careinitiatives. The 2014 meeting welcomed 80 stakeholders, including local government and other officials, municipal
employees and teachers.
DIC’s presentation touched on the Sakai Plant’s earthquake safety measures and tsunami countermeasures, bothareas of particular concern, and succeeded in increasing local awareness of the Sakai Plant’s emergency shutdown
system, emergency shutdown training program and tsunami evacuation plan and emergency supply stockpile.
Following the presentation, DIC took participants on a tour of the Sakai Plant and held a session to exchange views.
Response to DIC’s efforts was positive, with participants commenting that they had learned a lot about the history
and operations of DIC and of the Sakai Plant, and that they recognized DIC as a Company that would put safety andrespect for human life first in the event of an earthquake or a tsunami.

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The general manager of the Sakai Plant greets participantsParticipants listen intently to DIC’s presentation

ni ationith

ta eho ders5For individual investors in Japan, the DIC Group provided
tailored information via its corporate website and through anarticle in IR Magazine, with theaim of improving understandingof the Group and its businessactivities.

PAWW participants touring the Sakai Plant’s wastewater treatment facility

Because the Sakai Plant’s wastewater treatment facility is
jurisdictionally located in the Seto Inland Sea region, it is subject
to numerous restrictions governing impurity concentrations andvolumes and wastewater discharge. In response to these stringent
regulations, in 1973 the plant brought a new current wastewater
treatment facility on line. Since then, the facility has operated
without incident, a factor that in DIC’s view has contributed
to its outstanding reputation. In addition to the facility, praise
has been given to the technological skills of facility operators.
Facility operators also provide training for DIC Group companies
worldwide, underscoring the importance DIC places on ensuring
its technologies are passed down to successive generations of
employees.
Looking ahead, the Sakai Plant pledges to continue
contributing to environmental protection by ensuring the water it
returns to the sea is clean and safe.

Results presentation (February 2014)

Ties ith Society
In addition to the business community, the DIC Group took steps toenhance communication with students and other consumers in fiscal year
2013. In October, subsidiary DIC Color Design, Inc., participated in Tokyo
Designers Week 2013, taking part in an exhibit focusing on Asian color
use and aesthetics that enabled it to convey the DIC Group’s role as anorganization that helps bring color to life to a variety of stakeholders.
In December, DIC participated in Eco-Products 2013, marking its first
appearance in this annual event, which is noted for attracting a broad
range of ordinary consumers. DIC’s Eco-Products 2013 booth included
environment-friendly printing inks; PPS resin, which plays a key role
in reducing the weight of automobiles; and a presentation on how theGroup’s technologies for cultivating Spirulina are aiding research in thearea of biofuels.

DIC’s booth at Eco-Products 2013

Ties ith Employees
The DIC Group promotes a variety of initiatives to encourage
active communication with its employees. DIC Plaza, the Group’s
in-house newsletter, which is published in Japanese and English,
as well as a Group intranet and various portal sites enable DIC toshare information with employees and enhance understanding of
its activities. DIC also makes use of an in-house social networking
service dubbed CoCoT, and various other media to facilitate theexchange of information among employees.
Recently, the Group launched a new initiative comprising
operating results presentations for employees given by
the president and CEO, the goal of which is to enhance
understanding of the Group’s current operating and financial
status and of management strategies. In fiscal year 2013, DIC’s
corporate headquarters in Tokyo hosted two such presentations.
Presentations were also held at 15 other key sites over the courseof the year.
To advance awareness of CSR, training for new employees
includes a group work-based component
that focuses on social imperatives,
providing an opportunity for participants
to learn about the links between such
issues and business activities.

Tokyo Designers Week 2013

E ecutives from Southeast Asia Tour Sakai Plant s
aste ater Treatment acility

In November 2013, 20 participants in the Program on Industrial WasteWater Treatment Technologies for Asia (PAWW), an initiative hosted
by the Overseas Human Resources and Industry Development
Association (HIDA) in collaboration with Osaka Prefecture, toured thewastewater treatment facility at DIC’s plant in Sakai, Osaka. PAWW
program participants are executives and management-level employees
from Thailand and other parts of Southeast Asia. The inclusion of the
Sakai Plant’s wastewater treatment facility in the program reflects thesolid marks accorded its performance over the years by the Osakagovernment’s Environment Bureau, which has endorsed the plant as amodel for such facilities.
After visitors were greeted by the general manager of the Sakai Plant,
the leader of the plant’s Environment, Safety and Quality Group gave abrief outline of the plant’s wastewater treatment facility. Participants werethen taken to see the facility in action.

DIC Plaza, the DIC Group’s in-house newsletter

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Corporate Data

Third-Party Opinion
Counselor, ead of ESG Research Center
The apan Research Institute, imited

Eiichiro Adachi

In his current capacity, Eiichiro Adachi conducts industry research and assesses corporate
performance from the perspective of social responsibility. He also provides financial institutions withcorporate information for socially responsible investing (SRI). A member of the Market Evolution andCorporations in the 21st Century working group organized by the Keizai Doyukai (Japan Associationof Corporate Executives), Mr. Adachi was involved in the preparation of The 15th Corporate White
Paper on “Market Evolution” and CSR Management: Toward Building Integrity and Creating
Shareholder Value. He also served as a national expert for Japan to the ISO 26000 working group.

From this year’s edition, DIC has combined its previously
independent CSR report and corporate profile to create a newkind of report. Care has been taken to present information on
business activities and sustainability initiatives in an efficient,easy-to-understand manner.
I found “The DIC Group’s Business Portfolio,” special
feature, “Creating New Value that Responds to Evolving
Social Imperatives” and “DIC History” sections very effective
in conveying how the DIC Group evolved over a century-plus
from its beginnings as a manufacturer of products as ordinary
as inks used in letterpress, woodblock and lithographic printing,leveraging its related core technologies to expand continuously
into new markets, and developing a broad range of innovativeand industrially viable technologies. At the same time, I also
thought that the report was very effective in portraying DIC as
a company that while very much a technology-driven entity
is also highly aware of issues that affect society. The style ofthe special feature, with each section presenting a specificsocial imperative and then describing DIC’s response thereto,appears to have become a regular fixture of the report. Thistime, I was particularly interested in the section describing how
DIC has long worked to respond to growing global needs fornatural food coloring by, among others, capitalizing on business
opportunities for the natural blue colorant extracted from
Spirulina. I look forward to seeing the Company develop new
and different Spirulina-based products.
Last year, I stated that I would like to see DIC significantly
expand the inclusion of information based on overseas examples
in the report. Unfortunately, this year’s report again falls shortin this area. From the information contained in the “Important
Facilities” section of DIC’s Yuka Shoken Hokokusho (annual

financial report filed by publicly traded companies in Japan), one
can assume that half of the DIC Group’s production activities
are based overseas. Accordingly, improving use of the PDCA
cycle overseas and disclosing information on related efforts
must be regarded as crucial aspects of the Group’s initiatives
to help prevent global warming, manage waste, minimize use ofhazardous chemical substances and ensure occupational safety
and health.
The section titled “Business Models that Respond to Social
Imperatives” makes reference to “analyzing global megatrends…
and using our findings to predict what sorts of new markets
future social needs will bring about.” I see this as a particularly
forward-looking way of thinking for a materials manufacturer. I
would like to see DIC take this one step further by discussing
and identifying what it sees as the ideal society of the future andactively communicating its views to external audiences.
In closing, I read the account of DIC’s decision to change thedesignation across its program from “CSR” to “sustainability”
with particular interest. The explanation of DIC’s move to clarify
the direction of its initiatives and choose a designation that ismore suitable to a globally active corporate entity is clear andpersuasive. I also find the decision to set forth 10 incremental
Group sustainability themes commendable. However, it isimportant for them to keep in mind that when stakeholders heara company use the word “sustainability,” they naturally expectthat the company is referring to both its own sustainability andthat of society. Based on the understanding that it’s not possible
to ensure the health of business activities without ensuring thehealth of society and the earth, I would like to see DIC takefurther steps to reduce the negative impacts of its operations
and reconfigure, among others, its social contribution program.

This third-party opinion reflects my view of CSR activities and information disclosure of the DIC Group, as understood from reading this report, from myperspective as an individual who provides corporate information to financial institutions to assist SRI. It is not intended as a comment on whether or not
the information herein has been measured and calculated accurately to conform to commonly accepted standards for the preparation of environmental orother reports or a judgment on whether the report covers relevant important matters in full.

Third-Party Opinion60:
http://www.dic-global.com/en: