REPORT2020
2020
DIC レポート
The DIC Group Integrated ReportComplete Version

The DIC WAY
MissionThrough constant innovation, the DIC Group strives
to create enhanced value and to contribute tosustainable development for its customers and society.

MissionVisionVisionSpiritSpiritColor & Comfort by Chemistry

Drive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorful

Innovation throughCompounding
DIC brings innovation to society through its corecompounding technologies

Specialty Solutions
DIC draws on its expertise and comprehensive
strengths to offer solutions

DIC Report 2020

1

Contents&RQQHFWLQJWKH',&*URXSDQGLWV6WDNHKROGHUV',&*URXS&RPPXQLFDWLRQV7RROVThe DIC Group uses a variety of tools to promote communication withits many stakeholders to encourage greater awareness of the Group’s
activities. More detailed sustainability-related information and data canbe found on the DIC website.

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

Reports on activities',&5HSRUW',&5HSRUW VXPPDU\YHUVLRQ FRPSOHWHYHUVLRQ',&5HSRUW)LQDQFLDO6HFWLRQThe DIC Group: A Global Powerhouse

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Fiscal Year 2019 DIC Group Topics

19

7KH',&*URXS·V%XVLQHVV3RUWIROLR
Packaging & Graphic
Color & Display
Functional Products

21
23
25

Special Feature3URGXFW'HYHORSPHQW'HVLJQHGWR&UHDWH1HZ9DOXH
Summary integrated
report (published annually)(printed publication)

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

Thermoresponsive Cell Cultureware that Facilitates the Harvest of
Cells Without Enzyme Treatment or Damage (Cepallet™)
Fast-Curing Solvent-Free Adhesive DUALAM™

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

28

32

Activities',&*OREDO:HEVLWH

Sun Chemicalʼs Activities
DIC Asia Pacificʼs Activities
DIC (China)ʼs Activities

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

36
38
39

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50

In previous years, the DIC Group published a combined corporate
profile and sustainability report with the aim of presenting a clear,easy-to-understand picture of the Group and its sustainability
initiatives. Since 2017, the Group has published the DIC Report as an
LQWHJUDWHGUHSRUWZKLFKFRPELQHV¿QDQFLDOLQIRUPDWLRQHQFRPSDVVLQJ
consolidated operating results and corporate strategies, andQRQ¿QDQFLDO VXVWDLQDELOLW\ LQIRUPDWLRQ7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW SULQWHG ZKLFKIRFXVHVRQ
key highlights, and a more detailed complete version (PDF), whichcontains extensive quantitative data.

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52

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

https://www.dic-global.com/en/csr/annual/Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

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

/LQNZLWKWKH',&:HEVLWH
The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.

',&5HSRUWDQGWKH*5,6WDQGDUGV',&JOREDOZHEVLWH WEB https://www.dic-global.com/en/

7KLUG3DUW\9HULÀFDWLRQ
7KLUG3DUW\2SLQLRQ5HJDUGLQJ',&5HSRUW

6FRSHRI5HSRUWLQJIn principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC website.
WEB https://www.dic-global.com/pdf/csr/environment/dic_report_scope_en_2020.pdf',&*URXS0LOHVWRQHV

58
62
64
111
114
131
134
136
139
143
149
154
156
157

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56

C1-46

Fiscal year 2019 (January 1–December 31, 2019)&RYHU'HVLJQ'DWHRI3XEOLFDWLRQ
June 2020 (The next report is scheduled for publication in June 2021.)

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

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

DIC Report 20202

The DIC Group: A Global Powerhouse
Net Sales

Corporate Data
Registered name:

Number of subsidiaries
and affiliates:(

174 Domestic: 32
Overseas: 142

768.6

’15

’16

’17 ’18 ’19 （FY）

400

805.5

789.4

600

751.4

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

800

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,513(Nonconsolidated: 3,321)820.0

Corporate headquarters:(Billions of yen)

1,000

200
0

Operating Income(Billions of yen)

60

)

50

41.3

’15

’16 ’17 ’18 ’19 （FY）

20

48.4

54.2

Note: Corporate data is as of December 31,
2019. Net sales and operating income
are for fiscal year 2019.

51.1

30
Corporate headquarters (Tokyo)

56.5

40

10
0

Sun Chemical Corporation
headquarters (United States)

Global Network
DIC has 174 companies in 64 countries andterritories around the world.

Europe
pee

51

14

32
Asiaa

North, Central andSouth America

57

Sun Chemical Group and others

Japan

Europe and Africa

Japan

Sun Chemical Groupand others

Net sales¥175.0 billion

Operating income

Asia and Oceania

AfricaAfA
f iiccafrica
fr

Net sales

2¥305.5 billion

Operating income¥134.7 billion

Operating income¥4.2 billion

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

Net sales
Operating income

13¥23.0 billion(Excluding Japan)¥153.4 billion

Oceania
Oceani
O
Oce
cean
ce
cean
eeaaniania
ia¥12.9 billion

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

Net sales

DIC Corporation, DIC Graphics
Corporation and others

5¥9.1billion

North
America

DIC Asia Pacific Pte Ltd (Singapore)

DIC Report 2020

3

Central & SouthAmerica

Breakdown of Fiscal Year 2019 Net Sales by Segment

Breakdown of Fiscal Year 2019 Operating Income by Segment

Functional
Products

Functional
Products

33.5%￥768.6billionColor &
Display

Packaging &Graphic

39.1%

￥41.3
billion

52.0%

Packaging &Graphic

39.0%

Color &
Display

14.5%

21.9%

Note: Fiscal year 2019 net sales and operating income as used here include intersegment transactions. For this reason, and because of the existence of transactions classified as “others,” which are not attributable to reportable segments, these figuresdiffer from reported net sales and operating income.

Breakdown of Fiscal Year 2019 Operating Income by Region

Breakdown of Fiscal Year 2019 Net Sales by Region
Asia and Oceania

Asia and Oceania

20.0%

26.3%

North, Central andSouth America￥768.6billion

17.5%

Japan

North, Central andSouth America

39.7%

￥41.3

8.6%

Europe and Africa

billion

Japan

46.7%

Europe and Africa

22.8%

18.4%

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

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

Cincinnati (United States)

Polymer Technical Center —China
Qingdao DIC Finechemicals(PRC)

Rochdale(United Kingdom)

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

Gallarta(Spain)Eurolab(Germany)

Solid Compound
Technical Center—
Asia Pacific (Malaysia)

Central ResearchLaboratories (Japan)

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

Printing Inks Technical Center—
Asia Pacific (Thailand)

DIC Report 2020

4

DIC/Earthrise Algae ResearchCenter (United States)

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

Operating income

Cash Provided by Operating Activities and Free Cash Flow
(Billions of yen)

820.0
800

751.4
6.2%

805.5

789.4

7.2%

768.6

5.4%

600

62.5

80

60

70

50

54.2

6.0%

7.2%

70

Operating income(Billions of yen)

900

700

Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

51.0

50.6

60
40

500

50

400

40

300

30

200

20

29.1

30

51.1

54.2

56.5

48.4

41.3

0

2015

2016

2017

2018

(FY)

2019

25.8

20

19.1
10

10

100

30.3

12.6

0

-4.7

-5

0

2015

2016

2017

2018

(FY)

2019

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DFWLYLWLHVLQFUHDVHGLQ¿VFDO\HDUNet Income Attributable to Owners of the Parent and ROE

Capital Expenditure and Investment

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

70

(Billions of yen)

62.4

50

60

40

38.6

37.4

50

34.8

32.0

（%）

30

45.1
37.5

40

30

34.0

23.5

32.1

30

20

20

14.6%

12.9%

13.0%

20

10.4%
7.7%

10

10

10
0

2015

2016

2017

2018

(FY)

2019

0

0
2015

2016

2017

2018

(FY)

2019

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

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

Net assets

D/C ratio (%)

Interim dividend

Payout ratio (%)

Year-end dividend（%）(Billions of yen)

45

400

36.9%

（%）

40

40.3%

70

35

300

265.7

259.5

264.5

60

252.6

241.3

27.3%

50
200

47.2%

44.0%

43.6%

44.7%

20.5%
30

100

289.9

307.0

344.0

327.3

20
50

2015

2016

2017

2018

2019

(FY)

0

0

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120

125

60

65

40

60

40

40

2015

2016

20

100

100

100

80

343.5

10
0

25

(Yen)

150

40

42.4%

30

29.4%

60

60

60

2017

2018

2019

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5

15

40

10
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(FY)

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Global CO2 Emissions and CO2 Emissions per
Unit of Production (DIC Group)
CO 2 emissions

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

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

1,000,000

400

14,000700,000(GJ/tonne)(Thousands of GJ)

900,000
800,000

6

5.343

13,000316
657,000305
659,000

311
659,000

296

292

635,000

618,000

12,000300

270Energy consumption per unit of production

11,00011,127

5.144

5.360

5.155

5.142

5.014

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

10,7175

10,000600,000

4

9,000

577,000

500,000

8,000

200

3

7,000

400,000

6,000
5,000

300,000

2

4,000

100
200,000

3,000

100,000

2,000

1

1,000
0
2014

2015

2016

2017

2019 (FY)

2018

0

0
2014

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2015

2016

2017

2018

2019 (FY)0* (QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\** 2ZLQJWRWKHUHYLVLRQRISURGXFWLRQYROXPHVRIFHUWDLQRYHUVHDV',&*URXSFRPSDQLHVWKHSHUXQLWRISURGXFWLRQ¿JXUHIRU¿VFDO\HDUKDVEHHQDPHQGHG

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

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

（%）

DIC

1.50

100

Subsidiaries in Japan

90

1.00
80
70
60

0.50

52%

53%

56%

56%

58%

57%

50

0.00
2011

2012

2013

2014

2015

2016

2017

2018

2019 (FY)40

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

30
20Frequency rate ＝

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

10
0

2014

2015

2016

2017

2018

2019

× 1,000,000

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

(FY)

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Average Years of Employment (DIC Corporation)

Female Employees in Management Positions (DIC Corporation)(Number of people)
60

Male employees(Years)

7

52
48

50

Average years of employment in fiscal year 2019
Male employees:（%）

Female employees

18.3 years Female employees:19.8 years Overall:18.6 years

41

5.5%

40

25

24
15
20

4.4%

28

30

5

5.1%

33
20

6

4

3.7%

3

3.1%
2.6%
2

10
10

5
0
1994

2011 2012 2013 2014 2015 2016 2017 2018 2019

0

(FY)

DIC Report 2020

6

1

2015

2016

2017

2018

2019

2020 (FY)0A Message fromthe President

Future vision:“Become a unique global company
that is trusted by society
by providing value (safety andpeace of mind, color and comfort)”
Representative Director,
President and CEO
DIC Corporation

Kaoru InoIn February 2020, we celebrated DIC’s 112th anniversary. One of the world’s leading diversified chemicals companies, DIC
is also the core of the DIC Group, a multinational organization comprising 174 companies in 64 countries and territories. In
addition to commanding the top share of the global market for printing inks, a core business since our establishment, the DIC
Group has succeeded in growing pigments and polymers—both derived from printing inks—into prosperous components ofour business portfolio. Amid rising environmental concerns, including climate change and marine plastics, falling birthrates,
longer lifespans, and the evolution of social structures with the rapid spread of digital technologies, the DIC Group continues
to marshal its capabilities to address increasingly urgent social imperatives toward a sustainable society.

1. DIC111 Progress Report and a Review of Fiscal Year 2019
In fiscal year 2019, we kicked off our DIC111 Medium-Term Management Plan—with the two basic strategies of Value
Transformation and New Pillar Creation—toward a business structure less vulnerable to macroeconomic factors. Unfortunately,
shipments of epoxy resins, polyphenylene sulfide (PPS) compounds and other highly profitable products expected to showhigh growth were hampered by reduced demand in the semiconductor, electrical and electronics equipment, and automobile
sectors, due to slower global economic growth amid trade friction between the United States and the People’s Republic ofChina (PRC). Consequently, consolidated net sales slipped 4.6%, to ¥768.6 billion, and operating income declined 14.6%, to¥41.3 billion.
While we acknowledge that our efforts to maximize the benefits of Value Transformation fell short, we made significant
headway in eliminating the gap between costs and sales prices—a temporary difference resulting from delays in revisingsales prices to reflect fluctuations in raw materials prices—which had hampered our performance in fiscal year 2018. We also
benefited from cost reductions achieved through rationalization, one result of which was the Southeast Asia operating income
recovery to fiscal year 2018 levels.

2. Promoting Businesses Focused on Social Imperatives and Business Portfolio Transformation
We have traditionally recognized the impact of macroeconomic conditions, including factors affecting raw materials prices andsupplies, and exchange rates, on DIC Group operating results as a major structural issue. Guided by the two basic DIC111VWUDWHJLHVZHDUHWKXVZRUNLQJWRFUHDWHDPRUHUREXVWRSHUDWLQJIRXQGDWLRQE\WUDQVIRUPLQJRXUEXVLQHVVSRUWIROLR²VSHFL¿FDOO\by building a sophisticated portfolio focused on environment, safety and health (ESH)-related issues and social change byadvancing qualitative reforms in existing core businesses, and creating new businesses with the potential to become mainstays.
We define Value Transformation as clarifying competitive advantages and shifting to products capable of withstanding theimpact of changes wrought by macroeconomic and other external factors. For example, given the changes in demand resulting
from digitalization, for the past several years we have sought to modify our business portfolio, reducing the weighting of
publication inks and increasing that of inks and other materials for packaging. Grouping various businesses together under
Packaging will bring together common issues such as food safety and food loss, positioning us to develop comprehensive
proposals for packaging materials, including by forming partnerships across the value chain and revamping business models.
Simultaneously, we will promote the establishment of standards for withdrawal to review and perhaps replace certain businesses
dealing with commoditized products.
We seek to become a unique and trusted global company generating value in safety and serenity, color and comfort.

DIC’s future vision
Social Value• Environmental
impact reduction• Social contribution

Two Strategies for Business
Portfolio Transformation● Build a wide range of global No. 1 businesses thatevoke our Color & Comfort brand slogan

Target Areas● Deliver corporate value through diversity, earning
respect and admiration from the global community● Work with employees, customers and stakeholders tocreate value and enhance the DIC brandEconomic Value• Growth• Profitability• Capital efficiency

To facilitate New Pillar Creation, we established the New Business Development Headquarters to oversee efforts to create new
growth-driving businesses and develop them into mainstays in four priority areas in which social imperatives and DIC competitive
strengths overlap. We will accelerate this process by making extensive use of corporate venture capital (CVC) and by seeking
advantageous mergers and acquisitions (M&As).

DIC Report 2020

8

The four priority areas outlined in DIC111 as the focus of portfolio transformation are areas that offer potential for enhancing
both social value and economic value. To underpin this transformation, we recently established the DIC Sustainability Index, aproprietary index that will allow us to measure the social value of our products. This index will be used in all DIC Group businesses
to assess the environmental impact of products from raw materials procurement through disposal and social contribution, andwhen customers use our products, from shipment until the end of their useful lives. This index will be incorporated into future
product development, procurement, sales and distribution. We will also use the Sustainability Index to communicate these efforts
to stakeholders in an easy-to-understand manner, thereby allowing us to identify activities we should pursue.
For example, our ability to successfully grow our packaging businesses depends on us effectively confronting such challenges
as the need to reduce plastics and eliminate marine plastics. So, how do we go about doing this? The key to how much our
packaging business contributes to society will be our ability to provide packaging solutions that help increase social value by
advancing the reduction, reuse, and recycling of materials. In the past, improving convenience was our principal concern, but
our focus now must be on balancing convenience and environmental impact. Chemical companies have always been expected
to provide convenience, but today our sales and our survival hinge on our ability to deliver both convenience and lower
environmental impact.
8VHRIWKH',&6XVWDLQDELOLW\,QGH[FRPPHQFHGLQ¿VFDO\HDU *RLQJIRUZDUGZHZLOOFRQWLQXHWRFDSLWDOL]HRQWKLV
index to ensure we maintain a healthy awareness of the social value created by addressing social imperatives and in so doing
reinforce our long-term management direction.

3. BASF SE’s Colors & Effects Business Acquisition and Outlook
Even before launching of our Value Transformation strategy, we had begun looking to reinforce our functional pigments
business, a key strategic product area. We have long manufactured highly profitable ultraviolet (UV)-curable functional
pigments, earning recognition in the market for high-value-added specialty pigments, including those for cosmetics, opticalequipment, and color filters—all small in terms of production volume but delivering exceptionally high value. In our search
for ways to expand operations, we became aware of a BASF plan to divest from its Colors & Effects business. After carefully
assessing its regional strengths and product portfolio, we determined that integrating Colors & Effects functional pigments
could yield significant synergies. Although closing is not expected until late 2020, we anticipate the total cost of this acquisition
will be approximately ¥120 billion, well within the ¥250 billion earmarked for strategic investments under DIC111, making
it a highly attractive proposition. To date, stakeholder evaluations of this acquisition are generally positive, thanks to thecomplementary nature of our geographic business sites and product portfolios, as well as the rationality of the acquisition froma monetary perspective.
Given the PRC’s 2019 economic slowdown and the global COVID-19 health crisis, we must assume global economic growth
ZLOOZHDNHQWRDFHUWDLQGHJUHHLQ¿VFDO\HDU$OWKRXJKLWLVGLI¿FXOWWRSUHGLFWWKHIXOOLPSDFWRIWKLVSDQGHPLFHQVXULQJthe health and safety of our worldwide members remains our priority. I call on all DIC Group members to join forces to promotemeasures within and across regions to help us overcome this challenge.
Looking at materials for electrical and electronics equipment, for example, we largely cleared intermediate material inventories
and saw improved shipments of high-performance resins in January and February. However, as COVID-19 has disrupted global
automobile industry supply chains, there is no way to accurately project what will happen. While the negative impact of thecurrent situation is impossible to accurately gauge, we know what we must do. The task immediately ahead of us is to accelerate
the implementation of our Value Transformation and New Pillar Creation strategies.
Looking at the challenges we faced between the Great East Japan Earthquake and the COVID-19 pandemic, it is absolutely
essential for us to ensure the effective management of DIC Group supply chains. Accordingly, we have established a Supply
Chain Management Unit. Until now supply chain management was the responsibility of individual product divisions. Moving
IRUZDUGZHVHHWKLVQHZXQLWIXQFWLRQLQJ*URXSZLGHOLQNHGWRWKHQHZJOREDOPDQDJHPHQWFRQ¿JXUDWLRQWREHSXWLQSODFHRQFH
we complete the acquisition of BASF Colors & Effects.
In terms of business continuity planning (BCP), the Great East Japan Earthquake exposed risks associated with highly
fragmented supply chains. A solid grasp of supply chain–related issues and the ability to swiftly enact post-pandemic or majordisaster BCPs are both critical. Recognizing that both also depend on a company’s competence, we will continue working toformulate effective BCPs tailored to our supply chains.

4. Building a Stronger Management Infrastructure and Addressing ESG-Related Issues
1 Digital Transformation
Conscious of the many implications of digitalization, we recently established the DX Promotion Department, a dedicateddepartment charged with advancing digital transformation (DX). I see the importance of digital transformation as a process formodifying a company’s corporate structure and a business model, rather than simply advancing systems capabilities throughdigitalization—a way to fundamentally transform a business or company. Of course, we also understand the importance ofdigital marketing and materials informatics—the use of material properties databases and artificial intelligence (AI) in theselection and deployment of materials—and we will continue to promote efforts to apply both to various processes.

DIC Report 20209

However, in this era of social change, the most important
thing for us is to determine what corporate reforms
are necessary to ensure we achieve our vision for the
DIC Group. We are combining two approaches to thischallenge. The first uses backcasting—working back fromour vision to determine actions to be taken to achievethat goal—and the second uses forecasting—analyzing
and extrapolating trends to determine appropriate
actions—and leveraging digitalization to facilitate efficient
implementation. In the area of production, for example, wehave identified two key themes: Ensuring operating safety
and increasing productivity. Rather than simply treatingthese themes as an extension of existing efforts, we arelooking at what reforms we need to implement to realize
unattended and smart production facilities and clarifying
what can be done at present. Digital transformation willallow us to translate such ideas into execution.
2 Human Resources Management

Under DIC111, we are promoting a human resources management strategy centered on four core themes called WING. As a global
entity, we will continue to leverage the fact that approximately 60% of our labor force is overseas as a key competitive advantage.
To facilitate more strategic human resources management in fiscal year 2019, we established the Human Resources Strategy
Department. To date, we have taken active steps to empower women in the workplace and reform workstyles by introducing telework,
ÀH[WLPHDQGV\VWHPVWRVXSSRUWPHPEHUVVWULYLQJWREDODQFHFDUHHUZLWKIRUH[DPSOHWUHDWPHQWIRUDQLOOQHVV$WSUHVHQWZHDUH
working to take such initiatives a step beyond structural changes by emphasizing efforts to foster a new corporate culture.
7KHFKDOOHQJHRIVKLIWLQJIURPDZRUNVW\OHSUHGLFDWHGRQOLIHWLPHHPSOR\PHQW¿[HGUHWLUHPHQWDJHDQGVHQLRULW\EDVHGSURPRWLRQWR
new workstyles is not the sole responsibility of human resource departments. Changes to systems are simply a means to an end. It’s
important to secure increasingly talented human resources. When anticipating future social changes, it is also important to consider
what sort of key reforms are necessary. For example, while our telework infrastructure is now in place, we still have many jobs thatcannot be done remotely. There is still ample scope for ingenuity to make operations more conducive to telework by integratingprocedures. If such efforts are successful, telework will truly become something that helps resolve the issue of overwork by eliminating
commuting time.
7KURXJKHIIRUWVWR³UHIRUPZRUNVW\OHVWRFDSLWDOL]HRQGLYHUVL¿HGLQGLYLGXDOLW\´²DFRUH:,1*WKHPH²ZHVKDOOVWULYHWRFUHDWHDQ
environment that accepts varied perspectives and encourages active discussion. In so doing, we will endeavor to marshal the diverse
individuals who make up our labor force, drive organizational dynamism and create new value by bringing together people withdiverse views and ideals.
3 Safety

DIC Group management and members approach their responsibilities recognizing operational safety as the cornerstone of our
EXVLQHVVDFWLYLWLHVDVDPDQXIDFWXUHURI¿QHFKHPLFDOV1RQHWKHOHVVLQ$XJXVWZHH[SHULHQFHGDVHULRXV¿UHDWRXU6DLWDPD
3ODQWWKDWUHJUHWIXOO\FDXVHGFRQVLGHUDEOHLQFRQYHQLHQFHDQGFRQFHUQWRUHVLGHQWVLQWKHYLFLQLW\RIWKHSODQWDQGRWKHUVLWHV5HÀHFWLQJ
on the shortcomings that led to this sad incident, and reminding ourselves that our ability to locate sites and manufacture products
depends on the understanding of local residents, we have renewed our pledge to act as a responsible corporate citizen, take part inthe community, and, in the event an issue arises, immediately take steps to provide reassurance. In addition to independent efforts
DLPHGDWIXO¿OOLQJRXUREOLJDWLRQWRHQVXUHRSHUDWLRQDOVDIHW\DQGLPSURYHWKHHIIHFWLYHQHVVRIVDIHW\DXGLWVLWLVLPSRUWDQWIRUDOO
departments involved in manufacturing to work together to increase awareness, and, through full member participation, to promote
SURGXFWLRQXQGHUDPHWLFXORXVFRQ¿JXUDWLRQLQDPDQQHUWKDWUHÀHFWVDFRPPLWPHQWWRHQVXULQJVDIHW\ZKLOHPDLQWDLQLQJSULGHLQRXU
capabilities as a manufacturer.
4 Climate Change,Q¿VFDO\HDUZHGHFODUHGRXUVXSSRUWIRUWKH7DVN)RUFHRQ&OLPDWHUHODWHG)LQDQFLDO'LVFORVXUHV 7&)' DFNQRZOHGJLQJ
that responding to climate change and disclosing climate-related information is critical to advancing our business strategies. We are
FRPPLWWHGWRIXO¿OOLQJRXUUHVSRQVLELOLW\WRDQDO\]HDQGSURYLGHLQYHVWRUVZLWKUHOLDEOHQRQ¿QDQFLDOUHSRUWLQJDQGWRFODULI\LPSDFWVRQ¿QDQFLDOLQIRUPDWLRQ7KH',&*URXSLVDJOREDOHQWLW\ZLWKRSHUDWLRQVLQFRXQWULHVDQGWHUULWRULHV$VVXFKZHXQGHUVWDQGWKH
importance of all Group companies responding to climate change issues in an integrated manner, aggregating pertinent data and
FRQYHUWLQJLWLQWR¿QDQFLDOGDWDWRDVFHUWDLQWKHLPSDFW ULVNVDQGRSSRUWXQLWLHV RIFOLPDWHFKDQJHRQRXURSHUDWLRQV,Q¿VFDO\HDU
2019, we attempted scenario analysis, which the TCFD encourages. We shall continue to expand this effort to prove the resilience ofGroup strategies for responding to risks and maximizing opportunities related to climate change.

DIC Report 2020

10

5. An Integrated Global Management Team

Meeting with regional headquarters’ top executives

As overseas markets provide 60% of DIC Group consolidated net sales, we are highly conscious of the importance of effective
global communication, and not just as it pertains to the TCFD. Thanks to steady efforts to enhance communication capabilities
in recent years, when I issue statements as president and CEO they are instantly transmitted to core Group companies in
64 countries and territories and posted the next day, together with my image, for Group members in all these countries andterritories to see.
Since our 1986 acquisition of the Sun Chemical Group—mainly based in the United States and Europe—DIC has worked
steadily to build an integrated global management team. Today, Group members across the globe use the term “global one
entity” extensively. Looking ahead, the integration of the Colors & Effects business acquired from BASF will amplify our
expectations of members in terms of their ability to function on a global stage. For example, we need to rethink our official
language of business and advance a more forward-thinking concept of global operations, including businesses and humanresource management. While defining what constitutes global operations may present its own difficulties, I believe it is accurate
to say that operations are global when governed by a unified global strategy. There are many ways to view global management:
Do you treat Group operations management and product-specific management as independent responsibilities or as partsof a greater whole? Is the current format of corporate (Japan) and regional headquarters best or should we create a global
corporate headquarters configuration? We must consider all of these issues over the next two to three years.
The integration of Colors & Effects in late December 2020 should further expand the DIC Group’s global presence. Although
uncertainty persists worldwide due to COVID-19, we will continue seeking ways to apply chemistry to resolve challenges andworking to become a unique and trusted global company generating value in safety and serenity, color and comfort. In theseand all our endeavors, I look forward to ongoing stakeholder support.

DIC Report 202011

12-Year Summary
Key Financial Data
Period

111

112

113

114

115

116

117

118

119

120

121

122

2014

2015

2016

2017

2018

2019

2008

2009

2010

2011

2012

Net sales (Billions of yen)

932.3

757.8

779.0

734.3

703.8

784.0

830.1

820.0

751.4

789.4

805.5

768.6

Operating income (Billions of yen)

25.4

27.8

37.2

35.0

38.5

44.1

41.1

51.1

54.2

56.5

48.4

41.3

Operating margin (%)

2.7

3.7

4.8

4.8

5.5

5.6

4.9

6.2

7.2

7.2

6.0

5.4

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

32.2

27.1

26.3

23.7

23.0

19.8

25.3

26.8

26.2

27.4

28.4

27.9

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

17.4

12.4

11.0

9.1

8.8

8.8

10.9

12.2

11.2

12.4

12.9

12.5

Ordinary income (Billions of yen)

15.2

19.1

31.7

30.8

35.1

40.9

39.9

49.0

55.8

57.0

48.7

41.3

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

2.6

2.5

15.8

18.2

19.1

28.8

25.2

37.4

34.8

38.6

32.0

23.5

EBITDA (Billions of yen)

55.2

48.8

63.7

61.5

65.2

69.1

77.0

94.0

82.6

86.1

81.4

67.4

EBITDA margin (%)

5.9

6.4

8.2

8.4

9.3

9.8

9.3

11.5

11.0

10.9

10.1

8.8

Total assets (Billions of yen)

738.5

749.9

703.8

675.1

693.0

761.7

803.7

778.9

764.8

831.8

801.3

803.1

Net assets (Billions of yen)

108.9

122.8

130.4

124.5

160.7

218.9

276.7

289.9

307.0

344.0

327.3

343.5

Fiscal year

2013

*3

IncomeFinancial Position

Equity ratio (%)

12.9

13.5

15.3

15.1

19.8

25.6

31.1

33.7

36.4

37.9

37.3

38.9

Interest-bearing debt
(Billions of yen)

387.1

377.7

337.6

328.5

315.6

299.1

274.2

259.5

241.3

265.7

264.5

252.6

D/C ratio (%)

78.0

75.5

72.1

72.5

66.3

57.7

49.8

47.2

44.0

43.6

44.7

42.4

Net cash provided by operating
activities (Billions of yen)

37.0

39.5

30.9

31.2

41.4

33.9

46.4

29.1

62.5

54.2

51.0

50.6

Net cash used in investing activities(Billions of yen)(35.7)(12.5)(12.3)(17.6)(23.7)(9.8)(27.4)(10.0)(32.2)(58.9)(38.4)(24.9))UHHFDVKÀRZ %LOOLRQVRI\HQ

1.4

27.0

18.6

13.7

17.7

24.0

19.0

19.1

30.3

(4.7)

12.6

25.8

Net cash provided by (used in)¿QDQFLQJDFWLYLWLHV %LOOLRQVRI\HQ

6.5(16.0)(26.3)(7.1)(26.6)(32.8)(26.1)(24.8)(26.9)

11.4(11.8)(26.8)Cash and cash equivalents(Billions of yen)

20.1

29.5

22.9

29.6

22.5

15.0

16.4

15.1

16.7

17.7

18.6

16.7

Cash FlowsPer Share Information*2
Earnings per share (Yen)

33.47

32.11

175.96

197.90207.98292.26267.81

389.40366.72407.56338.40248.29Price earnings ratio (PER)(Times)

43.0

62.9

11.0

8.4

9.5

10.9

10.9

8.5

9.7

10.5

10.0

12.2

Dividends per share (Yen)

60

40

40

40

60

60

60

80

100

120

125

100

179.3

124.6

22.7

20.2

28.8

20.5

22.4

20.5

27.3

29.4

36.9

40.3

Payout ratio (%)

Other Indicators
Return on equity (ROE) (%)

1.6

2.6

15.1

17.3

16.0

16.1

11.3

14.6

12.9

13.0

10.4

7.7

Capital expenditure(Billions of yen)

44.0

23.6

20.8

27.0

26.6

27.1

33.6

32.1

31.3

33.6

32.1

35.0

Depreciation and amortization(Billions of yen)

40.6

35.4

33.0

29.7

27.4

25.9

33.8

32.9

32.4

31.5

32.8

33.1

Overseas sales ratio (%)

62.6

58.2

57.3

58.2

56.7

66.6

63.4

65.1

62.4

63.4

63.6

63.5

Average exchange rate (¥/US$)

103.68

93.51

87.69

79.77

79.93

97.06

106.32120.85109.96112.33110.46109.11

Average exchange rate (¥/EUR)

153.45130.91116.63110.88103.11129.25141.41134.14122.06127.03130.46122.13

Number of employees

23,613

22,583

21,572

20,455

20,273

20,034

20,411

20,264

20,481

20,628

20,62020,513*1 Technology-related expenses are for DIC and DIC Graphics Corporation*2 Per share information is adjusted for stock splits.
*3 (IIHFWLYHIURP¿VFDO\HDU',&DQGLWVGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVFKDQJHGWKHLU¿VFDO\HDUHQGIURP0DUFKWR'HFHPEHU$VDFRQVHTXHQFHUHSRUWHGUHVXOWVUHÀHFWWKHIDFWWKDWIRUWKHVHFRPSDQLHV¿VFDO\HDUZDVDWUDQVLWLRQDOLUUHJXODUQLQHPRQWKSHULRG)RUWKHSXUSRVHRIFRPSDULVRQ¿VFDO\HDU¿JXUHVKHUHKDYHEHHQDGMXVWHGWRUHSUHVHQWWKHPRQWKVIURP-DQXDU\±'HFHPEHU

DIC Report 2020

12

A Message from the CFO
The DIC Group seeks to ensure an appropriate balanceof financial health, strategic investments and returns
to shareholders and is expediting business portfoliotransformation to maximize cash flow.
Head of Finance and Accounting Unit
CFO

FinancialhealthShuji Furuta
2XUDSSURDFKWR¿QDQFLDOPDQDJHPHQWFHQWHUVRQHQVXULQJDEDODQFHDPRQJWKUHH
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SD\RXWUDWLRWRPHDVXUHUHWXUQVWRVKDUHKROGHUVDQGUHFHQWO\HDUQLQJVEHIRUH
LQWHUHVWWD[HVGHSUHFLDWLRQDQGDPRUWL]DWLRQ (%,7'$ 2WRMXGJHRXUDELOLW\WR
JHQHUDWHFDVKDQGPD[LPL]HVKDUHKROGHUYDOXH

Strategic
investments

Returns toshareholders

D/C ratio

Strategic investments

Dividend payout ratio

50%¥250 billion

30%| Sound Financial Health
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+DYLQJDOVRFKRVHQ52(DVDQLQGLFDWRUIRUFDSLWDOHIILFLHQF\ZHDUHDGYDQFLQJWKHWUDQVIRUPDWLRQRIRXUEXVLQHVVSRUWIROLRE\
UHRULHQWLQJRXUIRFXVWRKLJKO\SUR¿WDEOHEXVLQHVVHV7RWKLVHQGLQDGGLWLRQWRSURPRWLQJVWUDWHJLFLQYHVWPHQWVWRJHQHUDWHQHZFDVKÀRZVZHKDYHHVWDEOLVKHG*URXSZLGHFULWHULDIRUZLWKGUDZLQJIURPEXVLQHVVHVZLWKORZJURZWKSRWHQWLDODQGSUR¿WDELOLW\8QGHU',&ZHKDYHDGGHG(%,7'$WRRXUH[LVWLQJFRQYHQWLRQDOSUR¿WDELOLW\FHQWHUHGSHUIRUPDQFHLQGLFDWRUVXQGHUVFRULQJRXU
FRPPLWPHQWWRFRQGXFWLQJPDQDJHPHQWZLWKDJUHDWHUDZDUHQHVVRIFDVKÀRZDQGWKHQHHGWRLQFUHDVHVKDUHKROGHUYDOXH

Financial HealthInterest-bearing debt (Billions of yen)
Net assets (Billions of yen)
D/C ratio (%)

Target for FY2018(D/C ratio of 50%)
achieved four years early
344.0

328.5

315.6

299.1
274.2 276.7

72.5
66.3

289.9
259.5

218.9
160.7

49.8

264.5

43.6

44.7

252.6

47.2
44.0

2012

265.7
241.3

57.7

124.5

2011

343.5

327.3

307.0

2013

2014

2015

2016

Improve D/C ratio

2017

2018

42.4

2019

Maintain D/C ratio at around 50%

DIC Report 2020

13

Target for adjusted
D/C ratio: Around 50%

2020 (FY)(Forecast)A Message from the CFO

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

ROE

EBITDA(Billions of yen)

ROE (%)
12.9

13.0

86.1

82.6

81.4

10.4
34.8

2016

38.6

72.9

67.4
7.7

7.4

23.5

23.5

32.0

2017

2018

2019

2020 (FY)2016(Forecast)

2017

2018

2020 (FY)(Forecast)2019| Strategic Investments to Accelerate Growth',&RXWOLQHVWZREDVLFVWUDWHJLHVIRUWUDQVIRUPLQJRXUEXVLQHVVSRUWIROLR9DOXH7UDQVIRUPDWLRQZKLFKHPSKDVL]HVZRUNLQJWREROVWHUWKH
FRPSHWLWLYHQHVVRIEXVLQHVVHVDQGJHQHUDWHVXVWDLQDEOHFDVKÀRZDQG1HZ3LOODU&UHDWLRQZKLFKFDOOVIRUFUHDWLQJQHZEXVLQHVVHVWKDWUHVSRQGWR(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHV3UHYLRXVLQYHVWPHQWVWKDWFRQWULEXWHGWR9DOXH7UDQVIRUPDWLRQLQFOXGHWKHFDSLWDODQGEXVLQHVVDOOLDQFHZHFRQFOXGHGZLWK7DL\R+ROGLQJV&R/WGLQZKLFKZDVLPSOHPHQWHGXQGHU',&¶VSUHGHFHVVRU',&DQGSRVLWLRQHGXVZHOOWRGHYHORSDQGRIIHUSURGXFWVIRUWKHHOHFWURQLFVVHFWRU0RUHUHFHQWVXFKLQYHVWPHQWVLQFOXGHRXUDFTXLVLWLRQLQ¿VFDO\HDURIDPDQXIDFWXUHURIVHFXULW\
LQNVZKLFKDUHXVHGLQWKHSULQWLQJRIEDQNQRWHVDQGRIEXVLQHVVHQJDJHGLQWKHSURGXFWLRQRIKLJKSXULW\R[LGHSLJPHQWVZKLFKDUH
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Total capital expenditure
Total strategic investments
Investments(Billions of yen)
DFFHOHUDWLQJJURZWK7KLVLVLQDGGLWLRQWRELOOLRQIRURUGLQDU\LQYHVWPHQWV ,Q$XJXVW  ZH DQQRXQFHG WKDW ZH KDG140
130
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RI%$6)IRUDQHVWLPDWHG¼PLOOLRQ DSSUR[LPDWHO\
70
ELOOLRQ RXUODUJHVWHYHUDFTXLVLWLRQDPRYHXQGHUWDNHQZLWK60
WKHDLPRIGULYLQJRXUJURZWKDVDOHDGLQJJOREDOPDQXIDFWXUHU50RIKLJKJURZWKKLJKYDOXHDGGHGVSHFLDOW\SLJPHQWV
40
35.0
33.6
32.1
31.3
28.8
8QGHUWKH1HZ3LOODU&UHDWLRQEDQQHUZHKDYHHVWDEOLVKHG
3020
WKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVDQGFRQWLQXH
13.0
10WRDGYDQFHLQYHVWPHQWYLD&9&DQGRWKHUHIIRUWVGHVLJQHGWR
2.5
0.8
0
H[SHGLWHQHZEXVLQHVVFUHDWLRQDQGJDLQDFFHVVWRDGYDQFHG
2016
2017
2018
2019
2020 (FY)(Forecast)
WHFKQRORJLHVWRIDFLOLWDWHRSHQLQQRYDWLRQ
Interim (Yen)
Year-end (Yen)
Payout ratio (%)

Returns to Shareholders*| Stable Returns to Shareholders',&ZLOOFRQWLQXHWRSD\GLYLGHQGVWKDWDUHLQNHHSLQJZLWKSURILWJURZWKLQOLQHZLWKLWVFRPPLWPHQWWRHQVXULQJVWDEOH
UHWXUQVWRVKDUHKROGHUV',&VHWVDWDUJHWIRURXUGLYLGHQG
SD\RXW UDWLR RI  ZKLFK ZLOO VHUYH DV D JXLGHOLQH IRUGLYLGHQGVRYHUWKHPHGLXPWHUP:HDUHSURSRVLQJWRSD\D\HDUHQGGLYLGHQGIRUILVFDO\HDURISHUVKDUH
$VDFRQVHTXHQFHGLYLGHQGIRUWKHIXOOWHUPZKLFKLQFOXGHVDSHUVKDUHLQWHULPGLYLGHQGZLOOEHDGHFUHDVH
RI  IURP ILVFDO \HDU  ,Q ILVFDO \HDU  ZH
DQWLFLSDWHDQLQFUHDVHLQDQQXDOGLYLGHQGRISHUVKDUH

36.9
28.8
20.5

20.2

22.4

27.3

120

125

60

65

100

100

55

60

60

55

2017

2018

2019

2020 (FY)(Forecast)

2.8

3.7

3.3

60

60

30

30

30

30

30

40

40

60

2011

2012

2013

2014

2015

2016

Dividend
yield (%)** 2.1

3.6

1.9

2.1

2.4

2.8

20
20

40

110

40

60
30

40

44.3

29.4

20.5
80

40.3

60

* Figures have been adjusted to reflect the impact of the consolidation of shares.
** Dividend yield: Annual dividend payments / Closing share price at fiscal year-end
In fiscal year 2015, DIC purchased ¥5.0 billion worth of its own stock. If this is factored in, theactual dividend yield and dividend payout ratio would have been 4.0% and 34.1%, respectively.

1RWHV
'&UDWLR,QWHUHVWEHDULQJGHEW ,QWHUHVWEHDULQJGHEW1HWDVVHWV
(%,7'$ 1HWLQFRPHDWWULEXWDEOHWRRZQHUVRIWKHSDUHQW7RWDOLQFRPHWD[HV ,QWHUHVWH[SHQVHV±,QWHUHVWLQFRPH 'HSUHFLDWLRQDQGDPRUWL]DWLRQ
7KH¿JXUHJLYHQIRUWKHFRVWRIWKLVDFTXLVLWLRQLVGHULYHGE\DGMXVWLQJWKHHQWHUSULVHYDOXHRIWKHWDUJHWEXVLQHVV ¼PLOOLRQ WRUHÀHFWFDVKDQGGHEWDVRI'HFHPEHU

DIC Report 2020

14

The DIC Group’s Approach to
Value Creation
Delivering

Business Portfolio
Transformation Under DIC111

Environmental
issuesManagement capital(Inputs)

Funds essential tothe provision of products
and services

Integrate technologies
and make use ofopen innovation

Organic molecular
designOptics and
color

Basic
technologies

Applicability
assessment(Coating/printing/molding/adhesion)

Polymer
designDispersion

ies

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

lut

on

ti o

Evo

i

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

ls
de
mo

Value Transformationlog

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

bu
sin
es
s

Strengthen DIC’s corporate structure throughqualitative reforms of businessesof techno

Human capital

Overh
aul
of

ips
rsh
e
rtn
a
P

r a ti o n

Accumulated technologies
and know-how

Climate change

Break free of
reliance on
independent efforts

In t
eg

Intellectual capital

Cyber threats

Diverse social imperatives

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

Human rights
issuesnFinancial capital

Health-related
issuesResource
depletion

of

org

a ni

zati

onal

capa bi lit i e s

D igitra
al t

Marshal individual
strengths to createorganizational dynamism

Social capital
Cooperation with stakeholders
and local communities

Reinforce ESG initiatives
The DIC WAYDIC Report 2020

15

ns

f

m
or

a

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

Outcomes

Segment

Outputs

Packaging & Graphic

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

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

Functional Products

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

Business area

Electronics

Automotive

Healthcare

Packaging materials
that bring safety andpeace of mind

Outputs

Outcomes

Technologies andfunctional materials
that support the spreadof digitization

Provide functional materials that
contribute to a digital society

Technologies andfunctional materials that
underpin efforts to transformthe automotive industry

Provide composite materials that
contribute to a mobility society

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

DIC Report 2020

16

SDGs

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

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

Sustainability Index
Promoting Business Portfolio Transformation:
Balancing Social Value and Economic Value
The basic concept of DIC111 is to transform the DIC Group’s businessportfolio by focusing on businesses that deliver both social value andeconomic value, an approach it sees as central to realizing its future vision,
which is to become a unique global company that is trusted by society byproviding value (safety and peace of mind, color and comfort). With social
Social Valueimperatives related to concerns such as climate change and marine plastics • Environmental
becoming increasingly urgent, the Group is reinforcing efforts to develop impact reduction• Social contribution
distinctive solutions that contribute to social value and to the realization of asustainable society.
Through DIC111’s two basic strategies, Value Transformation and New
Pillar Creation, the DIC Group will continue to accelerate efforts to transform
its business portfolio in a manner that ensures its ability to balance social
value and economic value.

Transforming DIC into a Socially
Conscious Business Organization

Target Areas

Economic Value• Growth • Profitability • Capital efficiency

Formulating the DIC Sustainability Index to Express Social ValueTo accelerate its transformation, the DIC Group formulated a proprietary sustainability index with the aim of clarifying the social valuethat the Group provides. To draft the index, DIC established the cross-business Sustainability Strategy Working Group, which held
discussions with departments in charge of the manufacturing and sales of Group products.

Expressing Social Value on Two Axes: Environmental Impact
Reduction and Social Contribution

Sustainability Index

The procurement of essential raw materials and the manufacture of products
inevitably has an effect on the environment. The DIC Sustainability Index’s
vertical axis (environmental impact reduction) expresses evaluation of the
LPSDFWRIDEXVLQHVVRUSURGXFWRQWKHHQYLURQPHQWDQGWKHEHQH¿WVRIHIIRUWV
to devise effective countermeasures. The horizontal axis (social contribution)
expresses evaluation of a business’ or product’s contribution to the resolutionof key challenges, as well as to the realization of a sustainable society. The
Group will continue to use this index to clarify the environmental impact andcontribution to markets of its businesses and products, enhancing its ability todeliver social value.

Assess product/business using graph below
indicates ideal direction

Vertical Axis:
Environmental
impact reduction

Product
B

Product
C

ProductA

Horizontal Axis: Social contribution(Resolving social issues/improving social wealth)Approach through the Value Chain
Vertical Axis

Value
Chain

Horizontal Axis

Environmental Impact Reduction

Social Contribution

Impact from Raw Materials Production
and Finished Goods

Value from Market Processes
and ConsumptionRawmaterials

Suppliers

Manufacturing

DIC
products

Logistics

Processing

DIC

Finished
goods

Customers

DIC Report 2020

17

Use

Productlife

Consumers

Disposal/
Recycle/Reuse

The planet

Sustainability Index

The DIC Sustainability Index’s vertical axis (environmental impact) expresses evaluation of the impact of a product on the environment overits entire life cycle (life cycle assessment1). This means assessing not only energy used in and waste generated during production but also
environmental impacts in the production of raw materials (crude oil production, mining, cultivation). The index also evaluates hazardous
substances and substances designated under Japan’s Pollutant Release and Transfer Register (PRTR), thereby clarifying the DIC Group’s
responsibility in supplying products, as well as its duty to formulate and implement countermeasures. The horizontal axis (social contribution)
expresses evaluation of a product’s contribution to the resolution of key challenges during processing by customers, use by consumers andend-of-life disposal. The index also assesses risks associated with the raw materials procured and products supplied by the DIC Group, as
well as opportunities (contributions to society) that leverage its unique capabilities.
Containers that prevent
damage to food duringtransportation

Food in retortable pouches(for long-term storage)

Food for long-term storage
SDGs Goals 2, 3, 12 and 13

SDGs Goals 2 and 3

Reduce food loss

Prepare for
emergencies

Easy-peel film
SDGs Goals 3 and 13

Promote dietary
diversification andbarrier-free food

The DIC Group:
Contributing toSociety in the
Area of Food

SDGs Goals 3 and 13

Enjoy eating
Packaging colors thatenhance the joy of foodSDGs Goals 9, 12 and 14

Microwavable(heats quickly)

Eliminate single-use plastics

Recyclable plastics
Recyclable containers(filmless paper)

Reusable personal foodstorage containers

VOICE The DIC Sustainability Index will help us identify risks and opportunities across the entire value chain.
From the perspective of realizing a sustainable society, it is essential to look at the entire value chain. The DIC Sustainability Index
ZLOOHQDEOHXVWRFODULI\SURGXFWDQGEXVLQHVVVSHFL¿FULVNVDQGRSSRUWXQLWLHV7KLVZLOOPDNHLWSRVVLEOHWRLQYHVWLJDWHULVNVLQWHUPV
of whether they can be resolved and/or transformed into opportunities. Of course, we will also continue to reassess opportunities
in light of global trends to ensure there is no chance of them turning into risks. Use of this index to identify product- and businessVSHFL¿FULVNVDQGRSSRUWXQLWLHVDQGLPSOHPHQWHIIHFWLYHFRXQWHUPHDVXUHVZLOOEHFUXFLDOWRDFKLHYLQJRXUIXWXUHYLVLRQRIEHFRPLQJD
unique global company that is trusted by society.
Manager, Sustainability Department, DIC Corporation

DIC Report 202018

Nobuo Kobayashi

Fiscal Year 2019 DIC Group Topics
DIC Reaches Agreement to Acquire the Shares and Assets of the Colors & Effects
Business of Germany’s BASF and Transform the Business into a Subsidiary,Q¿VFDO\HDU',&UHVROYHGWRDFTXLUHWKHVKDUHVDQGDVVHWVRI%$6)
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0DQDJHPHQWUHSUHVHQWDWLYHVIURP',&6XQ&KHPLFDODQG%$6)&RORUV (IIHFWVBackground

Value Transformation,Q¿VFDO\HDU',&NLFNHGRIILWV',&PHGLXPWHUPPDQDJHPHQWSODQWRJXLGHLWVDVSLUDWLRQVWREHFRPHDXQLTXHJOREDOFRPSDQ\WKDWLVWUXVWHGE\VRFLHW\E\SURYLGLQJYDOXH VDIHW\DQGSHDFHRIPLQGFRORUDQGFRPIRUW WKURXJKWKHSURPRWLRQRILQLWLDWLYHVLQOLQHZLWKWZRNH\VWUDWHJLHV7KH¿UVWRIWKHVH9DOXH7UDQVIRUPDWLRQIRFXVHVRQVWUHQJWKHQLQJWKH&RPSDQ\¶VFRUSRUDWH
VWUXFWXUHWKURXJKTXDOLWDWLYHUHIRUPVLQH[LVWLQJEXVLQHVVHVZKLOHWKHVHFRQG1HZ3LOODU&UHDWLRQHPSKDVL]HVWKHFUHDWLRQRIQHZ
EXVLQHVVHVLQUHVSRQVHWR(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHV',&KDVEXGJHWHGIRUVWUDWHJLFLQYHVWPHQWVLQOLQHZLWKWKHVH
VWUDWHJLHVDQGLVVWULYLQJWRDFFHOHUDWHJURZWKE\VHHNLQJDGYDQWDJHRXV0 $V

Define target areas inline with the strategic
direction of each segment
Expand lineup of
high-value-added
products andaccelerate growth

Packaging & Graphic

Expand specialty inks businesses(jet inks and security inks)

Color & Display

Expand functional pigments business

Functional Products

Expand environment-friendly products globally

DIC’s Market Position
7RKDVWHQWKHTXDOLWDWLYHWUDQVIRUPDWLRQRILWV&RORU 'LVSOD\EXVLQHVV',&LVZRUNLQJWRH[SDQGLWVIXQFWLRQDOSLJPHQWVEXVLQHVVZLWKWKHDLPRIGULYLQJLWVJURZWKDVDOHDGLQJJOREDOPDQXIDFWXUHURIKLJKJURZWKKLJKYDOXHDGGHGVSHFLDOW\SLJPHQWVLQFOXGLQJWKRVHIRUGLVSOD\VFRVPHWLFVDQGDXWRPRELOHV7KHDQQXDOJOREDOSLJPHQWVPDUNHWLVHVWLPDWHGDWDSSUR[LPDWHO\WULOOLRQ',&LV
DOHDGLQJPDQXIDFWXUHURIRUJDQLFSLJPHQWVDQGDYDOXHGPDQXIDFWXUHURIHIIHFWSLJPHQWV LQFOXGLQJDOXPLQXPSLJPHQWV 

About BASF’s Colors & Effects Business%$6)¶V&RORUV (IIHFWVEXVLQHVVZKLFKLVEDVHGLQ(XURSHDQGKDVVLWHVDURXQGWKHZRUOGKDVHVWDEOLVKHGLWVHOIDVDSURPLQHQWJOREDOPDQXIDFWXUHURIKLJKSHUIRUPDQFHRUJDQLFSLJPHQWVHIIHFWSLJPHQWV LQFOXGLQJSHDUOHVFHQWSLJPHQWV DQGVSHFLDOW\LQRUJDQLF
SLJPHQWV7KHSURGXFWSRUWIROLRVJHRJUDSKLFSUHVHQFHDQGDSSOLFDWLRQVRIWKH&RORUV (IIHFWVEXVLQHVVDQG',&DUHKLJKO\FRPSOHPHQWDU\ZLWKOLWWOHRYHUODSDIC Report 2020

19

Profile

A manufacturer of high-value-added products inthe areas of niche and specialty pigments
High-performance organic pigments■ Name: BASF Colors & Effects GmbH
■ Date of establishment: 2016
(Carved out of BASF’s pigments business into 18 companies)■ Location: Ludwigshafen am Rhein, Germany■ Representative: Alexander Haunschild■ Net sales: Approx. €1 billion(Year ended December 31, 2018)■ Consolidated EBITDA: Approx. €120 million(Year ended December 31, 2018)■ Number of employees: Approx. 2,600■ Manufacturing facilities: 11■ R&D laboratories: 4■ Description of business: Manufacture and sale of pigments
and related products■ End markets: Cosmetics, plastics, construction, automobiles,
printing, agriculture and others

DIC

Effect pigments (for cosmetics)

Specialty inorganic pigments

A global pigments production configuration focused on
Europe and North America

Europe6

North
America
4
Asia
1

BASF’s Colors & Effects business
Organic pigments
for displays

High-performanceorganic pigments

Metallic pigments

Effect pigments(for cosmetics)

High-purity ironoxide pigments

Specialty
inorganic pigments

Operations centered in
North America and Asia

Applications

Operations centered inEurope and North America

DIC

1

Little product overlap will maximize
the unique qualities of both

2

Highly complementary geographic presence
will ensure regional compatibility

3Highly complementary product portfolios will
yield synergies in target niche and specialty
pigments markets

BASF’s Colors &Effects business

Displays
Automobiles
Cosmetics
Specialty applications
Product portfolios

Printing

Narrow

Broad

Benefits of Acquisition
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7KH&RPSDQ\KDVFRPPLWWHGLWVHOIWRDFKLHYLQJVXVWDLQDEOHJURZWKIRULWVFRORUPDWHULDOVEXVLQHVVE\H[SDQGLQJLWVIXQFWLRQDOSLJPHQWVEXVLQHVVUHFRJQL]LQJWKLVDVFUXFLDOWREROVWHULQJLWVFRUSRUDWHYDOXH
1RWH7KH¿JXUHJLYHQIRUWKHFRVWRIWKLVDFTXLVLWLRQLVGHULYHGE\DGMXVWLQJWKHHQWHUSULVHYDOXHRIWKHWDUJHWEXVLQHVV ¼PLOOLRQ WRUHÀHFWFDVKDQGGHEWDVRI'HFHPEHU7KHDFWXDOFRVWPD\YDU\GHSHQGLQJRQactual netFDVKDQGGHEWDVZHOODVGLIIHUHQFHVLQZRUNLQJFDSLWDODPRQJRWKHUVDWFORVLQJ$GYLVRU\DQGRWKHUIHHVZLOOGHSHQGRQIHHVUHODWHGWRSURFHGXUHVWRGHWHUPLQHFRPSOLDQFHZLWKWKHDQWLWUXVWODZVRIWKH8QLWHG6WDWHVDQG(XURSHDVZHOODVRIRWKHUUHOHYDQWFRXQWULHVDQGWHUULWRULHV$FFRUGLQJO\VXFKH[SHQVHVDUHQRWLQGLFDWHG

DIC Report 202020

Packaging & Graphic
3DFNDJLQJ0DWHULDOVWKDW%ULQJ
6DIHW\DQG3HDFHRI0LQG
3UHVLGHQW3DFNDJLQJ *UDSKLF%XVLQHVV*URXSSDGs Goals 12, 13 and 14

Masamichi Sota

Main Products
7KLVVHJPHQWLQFOXGHVQRWRQO\
SULQWLQJLQNVEXWDOVRDGKHVLYHVPDWHULDOVDQGRWKHUSURGXFWVDQG
VROXWLRQVIRUSDFNDJLQJDSSOLFDWLRQVWKHPDUNHWVIRUZKLFKFRQWLQXH
WRVHHUREXVWJURZWKLQHPHUJLQJ
HFRQRPLHVLQ$VLDDQGHOVHZKHUH

［Printing Materials］*UDYXUHLQNVÀH[RLQNVRIIVHWLQNVQHZVLQNVMHWLQNVFDQFRDWLQJVVHFXULW\LQNVSULQWLQJSODWHVSULQWLQJVXSSOLHV［Packaging Materials］
3RO\VW\UHQHFRH[WUXGHGPXOWLOD\HU¿OPVSDFNDJLQJDGKHVLYHVSegment Operating Results
Net Sales

Operating Income
and Operating Margin(Billions of yen)

434.7

71.1

73.3
0.1

68.7

FY2018Japan

FY2019The Americas
and Europe

Asia and
Oceania

19.7

19.2

6.8

6.4

6.1

10.0

8.2

8.9

3.2

4.5

4.6

258.9

244.3

255.3

19.9

116.8

114.7

120.3

(Billions of yen)

437.7

416.4

FY2020 (Forecast)

FY2018Eliminations

FY2019Japan

The Americas
and Europe

FY2020 (Forecast)
Asia and
Oceania

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Product News
Efforts to Develop Printing Inks, Adhesives and Films with a Reduced Environmental Impact,QWKHDUHDRISDFNDJLQJLQNVWKH',&*URXS¶VELRPDVVEDVHGSURGXFWVKDYHHDUQHGRI¿FLDOFHUWL¿FDWLRQ
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Business Strategies Under DIC111
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Publication inks

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

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

73%

76%

85%

Fiscal Year 2019 Highlights
1. Luminescence Sun Chemical Security Participates in Currency
Conference in Dubai/XPLQHVFHQFH6XQ&KHPLFDO6HFXULW\WKHVHFXULW\LQNVGLYLVLRQRI6XQ&KHPLFDOWRRNDGYDQWDJH
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2. Sun Chemical Joins Europe’s CEFLEX Consortium,QILVFDO\HDU6XQ&KHPLFDOMRLQHG&()/(;DFROODERUDWLYH(XURSHDQFRQVRUWLXPRIFRPSDQLHVDQGDVVRFLDWLRQVLQWKHSDFNDJLQJLQGXVWU\WKHQDPHRIZKLFKLVDQDFURQ\PIRU&LUFXODU(FRQRP\IRU)OH[LEOH3DFNDJLQJ5HSUHVHQWLQJWKHHQWLUH(XURSHDQSDFNDJLQJYDOXHFKDLQIURPPDWHULDOVSURGXFHUVWRFRQYHUWHUVDQGSULQWHUVEUDQGRZQHUVUHWDLOHUVDQGVSHFLDOL]HGUHF\FOLQJFRPSDQLHVPHPEHUVRI&()/(;FXUUHQWO\QXPEHUPRUHWKDQ6XQ&KHPLFDOLVIXOO\FRPPLWWHG
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DIC Report 2020

22

6XQ&KHPLFDO6HFXULW\DOVRZRQWKHFRQIHUHQFH¶V([SHULHQFH$ZDUG

Color & Display&RORUDQG'LVSOD\0DWHULDOVWKDW
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Masami Hatao

Main Products
3URGXFWVLQWKLVVHJPHQWLQFOXGHDZLGH
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［Color Materials］(IIHFWSLJPHQWVSLJPHQWVIRUFRORU¿OWHUVSLJPHQWVIRUFRVPHWLFVSLJPHQWVIRUSULQWLQJLQNVSLJPHQWVIRUFRDWLQJVDQGSODVWLFVKHDOWKIRRGV［Display Materials］
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OLTXLGFU\VWDO 671/& PDWHULDOVSegment Operating Results
Net Sales(Billions of yen)

Operating Income
and Operating Margin

124.1

34.5

(Billions of yen) 15.0

121.1

116.4

13.1

7.0

31.7

29.7

10.8
7.4

4.8
99.2

95.8

101.4

7.9
5.7

6.0

FY2018FY2019Japan

Overseas-9.9

FY2018FY2020 (Forecast)Eliminations

FY2019Japan

FY2020 (Forecast)

Overseas

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Product NewsDIC Group Natural Colorants Earn Certification Under COSMOS
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Value Transformation

Generalpurpose
pigments

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

50%

58%

62%

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

Fiscal Year 2019 Highlights
1. DIC Collaborates with Warehouse TERRADA’s PIGMENT TOKYO in the Pigments Business,Q1RYHPEHU',&SDUWQHUHGZLWK3,*0(1772.<2DQDUWPDWHULDOVODERSHUDWHGE\VWRUDJHFRPSDQ\:DUHKRXVH7(55$'$WRSURYLGH',&SLJPHQWVIRUFRVPHWLFVWUDGLWLRQDOO\PDUNHWHGWRFRVPHWLFVPDQXIDFWXUHUVWRLQGLYLGXDOFRQVXPHUVZLWKDYLHZWRH[SDQGLQJWKHIRFXVRIPDUNHWLQJWRLQFOXGHDUWDSSOLFDWLRQV3,*0(1772.<2LVDFRPSUHKHQVLYHIDFLOLW\IRUFUHDWLYLW\IXQFWLRQLQJVLPXOWDQHRXVO\DVDQDUWPDWHULDOVODEIRUH[SORULQJ³H[SUHVVLRQLQFRORU
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2. DIC Resolves to Acquire BASF’s Colors & Effects Business,Q$XJXVW',&UHVROYHGWRDFTXLUHWKHVKDUHVDQGDVVHWVRIWKH&RORUV (IIHFWVEXVLQHVVRI*HUPDQ\¶V%$6)(XURSH¶VODUJHVWFKHPLFDOVPDQXIDFWXUHU )RUPRUH
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DIC Report 202024

Functional Products)XQFWLRQDO3URGXFWVWKDW$GG&RPIRUW
3UHVLGHQW)XQFWLRQDO3URGXFWV%XVLQHVV*URXSSDGs Goals 6, 12 and 13

Kazuo Hatakenaka

Main Products［Performance Materials］

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FRPSRVLWHPDWHULDOVZLWKGLYHUVH
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VWDWHRIWKHDUWHOHFWURQLFVSURGXFWV6\QWKHWLFUHVLQVIRULQNVDQGFRDWLQJVHOHFWURQLFVSURGXFWVPROGHGSODVWLFSURGXFWVDQGDGKHVLYHV
SRO\HVWHUUHVLQVHSR[\UHVLQVSRO\XUHWKDQHUHVLQVDFU\OLFUHVLQVSODVWLFL]HUV ÀXRURFKHPLFDOVSDSHUPDNLQJFKHPLFDOVPHWDOFDUER[\ODWHVDON\OSKHQROVVXOSKXUFKHPLFDOV OXEULFDQWDGGLWLYHV［Composite Materials］
3RO\SKHQ\OHQHVXO¿GH 336 FRPSRXQGVSODVWLFFRORUDQWVLQWHULRUKRXVLQJSURGXFWVSODVWLFSDOOHWVFRQWDLQHUVLQGXVWULDODGKHVLYHWDSHVKROORZ¿EHUPHPEUDQHPRGXOHVVKHHWPROGLQJFRPSRXQGV 60&V GHFRUDWLYHERDUGV

Segment Operating Results
Net Sales(Billions of yen)

Operating Income
and Operating Margin

282.1
199.3

208.3

100.4

Japan

20.8

21.4

19.2

205.9

91.9

FY2018(Billions of yen)

279.4

268.6

14.0

11.6

12.9

6.7

7.5

8.5
0.1

95.2

FY2019-21.7

Overseas

Eliminations

FY2018FY2020 (Forecast)

FY2019Japan

Overseas

FY2020 (Forecast)Eliminations

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Product NewsDIC Develops 100% Biomass-Derived Polyester Plasticizer,Q¿VFDO\HDU',&DQQRXQFHGWKDWLWKDVGHYHORSHGDQHZSRO\HVWHUSODVWLFL]HUGHULYHGHQWLUHO\IURPELRPDVVUHVRXUFHVWKDWKDV
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ELRPDVVGHULYHGSRO\HVWHUSODVWLFL]HUBusiness Strategies Under DIC111
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Generalprocessed
products
Solvent-based
products

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

59%

63%

75%

• Environment-friendly products
Waterborne resins, polyurethane resins, UV-curable resins• High-value-added products
Epoxy resins, PPS compounds, industrial adhesive tapes,
hollow-fiber membrane modules

Fiscal Year 2019 Highlights
1. DIC Acquires Mid-Tier Coating Resins Manufacturer in India,Q$SULO',&DFTXLUHGPLGWLHU,QGLDQFRDWLQJUHVLQVPDQXIDFWXUHU,GHDO&KHPL3ODVW
3YW/WGZKLFKSURGXFHVDYDULHW\RIV\QWKHWLFUHVLQVIRUXVHLQDPRQJRWKHUVDXWRPRWLYHILQLVKLQJVFRLOVDQGZRRGFRDWLQJV+DYLQJGHWHUPLQHGWKDWIXVLQJLWVDELOLW\WRGHYHORSKLJKHQGUHVLQVZLWK,GHDO&KHPL3ODVW¶VNQRZKRZDQGVXSSO\FKDLQLQ,QGLDZRXOGVZLIWO\HOHYDWHLWVSRVLWLRQLQWKH,QGLDQPDUNHW',&UHVROYHGWRPDNHWKLVDFTXLVLWLRQ',&VHHV,QGLDDVDQLPSRUWDQWDUHDIRUDFFHOHUDWLQJWKHH[SDQVLRQRILWVJOREDORSHUDWLRQVDQGZLOOOHYHUDJH,GHDO&KHPL3ODVW¶VPDUNHWSRVLWLRQWRSURPRWHMRLQWHIIRUWVZLWK*URXSFRPSDQLHVLQQHLJKERULQJFRXQWULHVWRIXUWKHUEURDGHQLWVUHJLRQDOEXVLQHVVVFDOH

2. DIC Boosts Production Capacity for Large Degassing Modules Used for Water Treatment by 1.5 Times,Q¿VFDO\HDU',&UHLQIRUFHGSURGXFWLRQIDFLOLWLHVDW',&*URXSFRPSDQ\',&.DNR,QF¶V,FKLKDUD3ODQWWRH[SDQGLWVSURGXFWLRQFDSDFLW\IRUODUJHGHJDVVLQJPRGXOHV²XVHGIRUZDWHUWUHDWPHQWDPRQJRWKHUV²LQWKHSEPAREL®VHULHVRIKROORZ¿EHUPHPEUDQHPRGXOHVIRUFRQWUROOLQJÀXLGGHJDVL¿FDWLRQ
DQGDHUDWLRQ:LWKWKHVWDUWRIRSHUDWLRQVRQDQHZSURGXFWLRQOLQHDWWKHSODQW',&¶VRYHUDOOSURGXFWLRQFDSDFLW\IRUWKHVHPRGXOHVLQFUHDVHGE\WLPHV',&¶VODUJHGHJDVVLQJPRGXOHVZKLFKDUHXVHGIRUUHPRYLQJGLVVROYHGJDVHVVXFKDVQLWURJHQDQGR[\JHQIURPZDWHUDUHLQFKHV FHQWLPHWHUV 
RUPRUHLQGLDPHWHU3DVVLQJZDWHUWKURXJKDPHPEUDQHRIEXQGOHGKROORZILEHUVUHPRYHVGLVVROYHGLPSXULWLHVWKHUHE\LQFUHDVLQJWKHSXULW\RIWKHZDWHU3ULQFLSDODSSOLFDWLRQVLQFOXGHXOWUDSXUHZDWHUSURGXFWLRQV\VWHPVXVHGLQWKHIDEULFDWLRQRIVHPLFRQGXFWRUV/&'VDQG
HOHFWURQLFVFRPSRQHQWV',&DOVRSURYLGHVKROORZILEHUPHPEUDQHVWRDGGR[\JHQWRWKHEORRGLQH[WUDFRUSRUHDOPHPEUDQHR[\JHQDWLRQ (&02 ZKLFKLVFXUUHQWO\EHLQJXVHGZRUOGZLGHWRWUHDWFULWLFDOO\LOO
SDWLHQWVZLWKDFXWHUHVSLUDWRU\GLVWUHVVV\QGURPH $5'6 DVDUHVXOWRIWKH&29,'SDQGHPLF
',&ZLOOFRQWLQXHGRLQJLWVEHVWWRHQKDQFHSURGXFWLRQRILWVKROORZILEHUPHPEUDQHVWRKHOSHQVXUHDVWHDG\VXSSO\RILQGLVSHQVDEOHPHGLFDOHTXLSPHQWDIC Report 202026

Special Feature

Product Development Designed to Create New Value

The DIC Group is providing distinctive
solutions that respond to evolving needs
related to safety, peace of mind and theenvironment arising from social changes.
The realization of a sustainable society depends on our ability to respond to needs
related to safety, peace of mind and the environment. The DIC Group is capitalizing ontechnologies honed over 112 years to develop distinctive solutions that directly addresscritical challenges, including the issue of marine plastics and the need to reduce use of
substances harmful to the environment.

P

28

Thermoresponsive Cell Cultureware that Facilitates the Harvestof Cells Without Enzyme Treatment or Damage (Cepallet ®)P
Fast-Curing Solvent-Free Adhesive
DUALAM™

DIC Report 2020

27

32

Special Feature: Product Development Designed to Create New Value

Healthcare
Thermoresponsive Cell Cultureware that Facilitates the Harvest of
Cells Without Enzyme Treatment or Damage (Cepallet ®)SDGs Goal 3

Providing Novel Cell Cultureware that Enhances Cell Detachment
6LPSO\E\/RZHULQJWKH7HPSHUDWXUH7KHUHE\6LJQLÀFDQWO\
Shortening the Harvest Process
Value Creation

Development of revolutionary cell cultureware that minimizes damage to iPS and ES cells during harvest

Reduced survival rates for cultured cells owing to damage from enzyme treatment and scraping
for cell proliferation. To harvest the cultured cells, it is necessary to
use an enzyme treatment to detach the cells and then to employ ascraper to lift them from the base. However, enzyme treatment andscraping results in some cells dissolving, while scraping causes
physical stress, reducing survival rates and impeding efficient
KDUYHVW7KHVHLVVXHVKDYHSRVHGVLJQL¿FDQWFKDOOHQJHVWRHQVXULQJthe quality of cultured cells.

Research in induced pluripotent stem (iPS) and embryonic stem (ES)cells, which hold promise in such fields as regenerative medicine
and drug discovery, continues to gain momentum worldwide.
Demand for the culture of high-quality cells for use in research is
driving the need for sophisticated iPS and ES cell culture processes.
Conventional cell culturing begins with the attachment of adherent
cells to the base of cultureware that has been coated with an
extracellular matrix. A culture medium provides nutrients necessary
Detachment and Harvest Using Enzyme Treatment
After culturing

Cell harvest

Removal of
Wash with
culture medium saline solution

Removal ofsaline solution

Enzymetreatment

Heat
treatment

EnzymeremovalAddition of
mediumScraping andsuction processing

3URFHVVLVGLIÀFXOWDQGGHWDFKHGFHOOVHDVLO\UHDWWDFKVRFHOOKDUYHVWUDWHGHFUHDVHVDIC Report 202028

Special Feature: Product Development Designed to Create New Value

Development of the revolutionary Cepallet ® series of thermoresponsive cell cultureware that enhances cell detachment,Q¿VFDO\HDU',&VXFFHHGHGLQGHYHORSLQJWKHCepallet ® series ofrevolutionary cell cultureware that facilitates harvest without the use of
HQ]\PHVRUDVFUDSHU7KLVJUHDWO\VLPSOL¿HVWKHSURFHVVLQFUHDVLQJERWKWKHHI¿FLHQF\RIKDUYHVWDQGFHOOVXUYLYDOUDWHV
The base of DIC’s newly developed cell cultureware is coated with aproprietary thermoresponsive polymer that shows hydrophobic–hydrophilictransition—i.e, changes from promoting attachment to promoting release—upon cooling to a certain temperature (transition temperature). Accordingly,
replacing the 37ºC culture medium after culturing with fresh and cold
(below room temperature) medium lowers the temperature, encouraging
cells to detach gently from the base (thermoresponsive release), thereby
minimizing damage during harvest. Because thermoresponsive release
eliminates the need for scraping, the Cepallet ® series is suited forautomated cell culture systems. Going forward, Cepallet ® cell cultureware
is thus expected to contribute to the more efficient culturing of higherquality cells in the research laboratories of pharmaceuticals manufacturers,
universities and public research organizations.

Cepallet® cell cultureware

Thermoresponsive Release with Cepallet ®
Culture temperature (37°C )Lower post-culture temperature
Replacement withcold medium

Hydrophobic (Cells adhere)

Hydrophilic (Cells do not adhere)

A Greatly Simplified Harvest Process
After culturing

Cell harvest

Reduction oftemperature encourages
cells to detach

Examples of Applicable Cells
・iPS stem cell–derived differentiated cells
・Mesenchymal stem cells
・Fibroblasts
・Cell lines

Removal ofculture medium

Addition of cold
culture medium

Pipetting・Neurons
・Macrophages

Detachment and harvest in three simple steps

DIC Report 202029

・Primary cells

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

Capitalizing on proprietary polymer technologies to develop high-performance containers for culturing cells in laboratories

Leveraging DIC know-how to address needs for laboratory research
DIC embarked on the development of Cepallet ®LQWKH\HDUWKDW-DSDQintroduced a new national revitalization plan, a strategic priority of which is
to advance regenerative medicine. Recognizing the existence of both market
needs and research seeds in this area that would allow DIC to capitalize on
its expertise and experience as a chemicals manufacturer, sales and R&D
personnel worked together to gather information, visiting pharmaceuticals
manufacturers, universities and public research organizations, among
others. This led to the recognition of a need for industrial quality control forcell culturing in laboratories conducting research related to regenerative
medicine and drug discovery, which use multiple different types of equipment
and devices.

Many laboratories use plastic containers to culture cells. DIC thus saw potential
to leverage its specialized high-performance polymer design technologies
and industrial know-how to develop high-value-added products for use in thisarea. This led to the formation of a project team made up of R&D and technicalpersonnel. The team began by identifying issues affecting the cell culturing
SURFHVVUHVROYLQJWRKHOSLPSURYHSURFHVVHI¿FLHQF\DQGLQFUHDVHWKHTXDOLW\RI
cultured cells by developing revolutionary high-performance cell cultureware.
'XULQJWKLVSHULRG',&ODXQFKHGLWV',&PHGLXPWHUPPDQDJHPHQW
plan, which positioned healthcare as a key focus of its efforts to cultivate nextgeneration businesses. As a result, expectations were high for the Company to
HQWHUWKHOLIHVFLHQFHV¿HOG

A thermoresponsive polymer coating and the debut of the Cepallet ® series
A detailed analysis of cell culture processes prompted the team to focus theirefforts on the structural design of the polymer used to coat the base. Whatfunctional features were needed? What did the polymer need to do? Team
members sifted through DIC’s vast accumulation of basic research data to
determine a course of action for designing a new polymer. “In a process oftrial and error, we narrowed the focus of our research to thermoresponsive
polymers,” explains one member of the team. “Damage to cells during harvest
from cultureware is caused by the use of enzymes to detach the cells anda scraper to lift them from the container base,” he continues. “We realizedthat if we could develop a polymer the adhesive properties of which wouldchange according to temperature, it would bring us significantly closer tocommercialization.” Technical and R&D departments thus commenced work
toward realizing something that originally seemed impractical.

“Setting the temperatures for culture and detachment at, respectively, thetemperature at which cells can be cultivated (37°C) and the temperature at which
they can be harvested (below room temperature), thereby designing a polymer
with adhesive properties that could be controlled within that range to encourage
detachment, was the central challenge we faced,” recalls the leader of the
project. “Even if we achieved positive results in a laboratory setting, designinga container that delivered stable results on an industrial scale was difficult.
By capitalizing on accumulated technologies and expertise, we succeeded incommercializing a new thermoresponsive polymer coating. This achievement
led to the development of the Cepallet ® series, which features a surface that has
been coated with this proprietary polymer using nanolevel coating technology.
This eliminates the need for enzyme treatment and scraping, minimizing damage
to cultured cells and dramatically improving the harvest process.

Thermoresponsive Detachment of Activated Macrophages*1 (THP-1 cells)
Harvest Rate for Macrophages

Replacement withcold medium

100
90

CulturePipetting

Cell culture conditions
Treated with Phorbol 12-myristate 13-acetate (PMA) (50 ng/ml)

Harvest rate (%)

80
70
60
50
40
30
20

Culture medium: Roswell Park Memorial Institute (RPMI) 1640,
10% fetal bovine serum (FBS), Gentamicin

100With thermoresponsive detachment, activated macrophages detach gently from the base.
Moreover, the harvest rate is significantly higher than when treatment with trypsin*2 is used.
*1 A macrophage is a type of white blood cell of the immune system.
*2 Trypsin is an enzyme that breaks down proteins.

DIC Report 2020

30

Thermoresponsive
detachment(W-type)

Trypsintreatment

Special Feature: Product Development Designed to Create New ValueKEY PERSON from DIC

We are entering a new era of personalized healthcare, in which order-made treatments will be mainstream.

Progress in the area of regenerative medicine has ushered in an era of personalized healthcare, in which treatments are order-made, that is,
WDLORUHGWRWKHLQGLYLGXDO¶VXQLTXHFHOOXODUDQGJHQHWLFWUDLWV$NH\IRFXVIRU',&WRGD\LVSURYLGLQJEUHDNWKURXJKSURGXFWVLQWKHKHDOWKFDUH¿HOGE\integrating expertise accumulated in such areas as pharmaceuticals, agrichemicals and health foods with industrial technologies cultivated in thedevelopment and production of polymers. Cepallet ®LVWKH¿UVWVXFKSURGXFWWRUHDFKFRPPHUFLDOL]DWLRQ*RLQJIRUZDUGZHZLOOFDSLWDOL]HRQWKLV
groundbreaking product to promote a wider understanding of DIC’s development capabilities and to deepen collaboration with people in various¿HOGVZLWKWKHDLPRIDGGLQJDQHZGLPHQVLRQWRWKLVH[FLWLQJPDUNHW
Product Manager, Health Care Foods Product Group, Color Material Products Division, DIC Corporation

KEY PERSON from DIC

Taro Ichimoto

The sense of achievement when we announced Cepallet ® at an academic conference on regenerative
medicine and commenced sales was extraordinary.

A wide range of cells are used in regenerative medicine and drug discovery, and various factors including the condition of cells, type of culture
medium used and nutrients provided vary from one pharmaceuticals manufacturer, public research organization or university laboratory to another.
Accordingly, even when we reached the point where prospects for commercialization were clear, it took another full year to have the new container
evaluated by various laboratories. I think this is why when we announced Cepallet ® at an academic conference on regenerative medicine and
FRPPHQFHGVDOHVLQZHZHUHRYHUZKHOPHGZLWKSULGHWKDWRXUQHZSURGXFWKDGHDUQHGJOREDOUHFRJQLWLRQ
Project Manager, H-2 Project, Health Care Business Unit, New Business Development Headquarters, DIC Corporation

KEY PERSON from DIC

Yoshinobu Sakurai:HVRXJKWWROHYHUDJHNH\',&WHFKQRORJLHVVSHFLÀFDOO\WRLPSURYHWKHHIÀFLHQF\RIFHOOFXOWXUHSURFHVVHVCell culturing demands delicate, seasoned skills. While robots are used for some processes, the fact is that many processes still rely on humanhands. The full automation of these processes would facilitate the culture of high-quality cells uniformly and in large volumes. This is an opportunity
for DIC, which to date has capitalized on its synthesis technologies to industrialize and automate complex manufacturing processes. Cepallet ®
PDNHVXVHRIVXFKXQLTXHO\',&WHFKQRORJLHVDQGNQRZKRZWRUHDOL]HWKHKLJKO\HI¿FLHQWFXOWXUHRIKLJKTXDOLW\FHOOV:HZLOOWDNHDGYDQWDJHRI
the foothold we have established in this area to promote product development that contributes to the further automation of cell culture processes.
Group Manager, Health Care Products Business Development Group, Color Material Products Division, DIC Corporation

KEY PERSON from DIC

Hiroyasu Asakura

Underscoring high marks from laboratory personnel, Cepallet ®ZDVÀUVWDGRSWHGE\DXQLYHUVLW\UHVHDUFKODERUDWRU\$SURIHVVRUVWXG\LQJUHJHQHUDWLYHPHGLFLQHYLVLWHG',&¶VERRWKDWDQDFDGHPLFFRQIHUHQFHRQPHGLFLQHKHOGLQDXWXPQ,JDYHKLPDVDPSOH
of Cepallet ® , which his assistants, who are in charge of culturing cells, promptly tried out. Their verdict was that the container was easy to work
ZLWKHI¿FLHQWDQGPRVWLPSRUWDQWO\JUHDWO\LPSURYHGWKHFHOOVXUYLYDOUDWH7KLVSURIHVVRUZKRZRUNVFORVHO\ZLWKFXOWXUHGFHOOVDQGLVZHOODZDUH
RIWKHGLI¿FXOW\RIFXOWXULQJPDGHWKHGHFLVLRQWRSXUFKDVHCepallet ® on the spot. Looking ahead, we will continue to actively introduce such
examples of organizations that have decided to use Cepallet ® and of efforts to help improve culturing processes.
Manager, Health Care Products Business Development Group, Color Material Products Division, DIC Corporation

DIC Report 2020

31

Satoko Mimura

Special Feature: Product Development Designed to Create New Value

Packaging & Graphic
Fast-Curing Solvent-Free Adhesive
DUALAM™

SDGs Goals 3, 9, 12 and 13

DUALAM™: Inaugurating a New Era in Solvent-Free
Lamination that Will Revolutionize the World of Packaging
Value Creation

Reduced emissions of VOCs and CO2 attributable to lamination

Issues with conventional solvent-free adhesives, which boast a low environmental impact but have limited applications
7KH IDEULFDWLRQ SURFHVV IRU PXOWLOD\HU SDFNDJLQJ ILOPV²ZKLFKLQYROYHVODPLQDWLQJWZRRUWKUHHOD\HUVRIILOPWRJHWKHUSULQWLQJDUWZRUN RQ WKH UHYHUVH VLGH RI WKH WRS OD\HU FRDWLQJ WR LPSDUWPRLVWXUH OLJKW JDV DQG RWKHU EDUULHU SURSHUWLHV DQG VHDOLQJ²
has come into widespread use worldwide. The common approachWRODPLQDWLRQLVWRFRDWWKHVXUIDFHRIRQHOD\HUZLWKDQDGKHVLYH
substance dissolved in solvent and then pressure bond it to
DQRWKHUOD\HUDIWHUWKHUPDOO\HYDSRUDWLQJWKHDGKHVLYH¶VVROYHQW
component. Nonetheless, the use of solvent-based adhesives
LV QRW ZLWKRXW SUREOHPV QRWDEO\ QHJDWLYH HQYLURQPHQWDO

impacts such as emissions of pollution-causing volatile organic
compounds (VOCs) and CO 2WKHODWWHUFDXVHGE\WKHEXUQLQJRI
fossil fuels.
Solvent-free adhesives are also popular, but present issues
VXFK DV SRRU GHVLJQDELOLW\ DIWHU ODPLQDWLRQ DQG LQFRPSDWLELOLW\ZLWK FRQWLQXRXV ODPLQDWLRQ²NH\ WR KLJK SURGXFWLYLW\²GXH WR
VORZFXULQJVSHHGVZKLFKOLPLWVSRVVLEOHSDFNDJLQJDSSOLFDWLRQVDIC recognized that resolving such issues would both facilitate
the expansion of applications and help reduce the environmental
LPSDFWRIWKHSDFNDJLQJLQGXVWU\Development of the versatile fast-curing solvent-free adhesive DUALAM™
Having created a project aimed at surmounting the issues associatedwith solvent-free adhesives, DIC hit on the idea of coating the main
DJHQWDQGFXULQJDJHQWRQWKH¿OPVXUIDFHVHSDUDWHO\UDWKHUWKDQthe conventional approach of mixing the two component agents of
the adhesive together prior to laminating, and began developmentof a new adhesive. Through trial and error with various component
combinations and coating amounts, in 2019 the project succeeded indeveloping DUALAM™, an innovative solvent-free adhesive boastinga curing speed several times higher than existing offerings.
DUALAM™ VXSSO\XQLWDIC Report 202032

Special Feature: Product Development Designed to Create New Value

aging time; a longer adhesive pot life (the length of time an adhesive
remains processable); and significantly improved designability.
Lamination using DUALAM™ and existing machines retrofitted with
the new lamination system also substantially reduces emissionsof VOCs and CO2 compared with lamination using solvent-based
adhesives and the same equipment.

Partnering with a leading laminating machine manufacturer, DIC also
developed a dedicated supply unit for DUALAM™, which was launched
as a lamination system that can be retrofitted onto existing laminators.
DUALAM™ enjoys a number of key performance advantages.
These include facilitating the production of previously impossible
two-layer laminates and the continuous processing of laminatedstructures with three or more layers; rapid curing, which shortens

DUALAM™ Lamination System

Laminator

Retrofittable DUALAM™ supply unit

Benefit of retrofitting 400 solvent-based
adhesive laminating machines with retrofittable
DUALAM™ supply units:

80,000

Annual CO2 emissions
reduction after five years: Approx.

tonnesEquivalent to annual CO2 emissions from approximately 50,000 private-use passenger vehicles(Source: Ministry of Land, Infrastructure, Transport and Tourism data for 2017)
Calculation
CO2 emissions per unit for solvent-based adhesive laminators (approx. 200 tonnes) × Number of units retrofitted with DUALAM™ supply units (400)(Reference: Approximately 6,000 solvent-based adhesive lamination systems are currently in operation around the world (DIC estimate).)A Distinctively
DIC Response

Providing packaging solutions that contribute to sustainability for the global environment

An innovative solvent-free adhesive that contributes to reduced air pollution and improved work environments
for environment-friendly solvent-free adhesives would increase andso he proposed the creation of a dedicated project.
Refusing to be constrained by the conventional notion ofpremixing the adhesive’s components, the project’s technical teamexperimented with various approaches, arriving at the idea of
coating the two components of the adhesive separately onto eachfilm layer to be bonded and initiating curing only after the layers
come together. However, a number of obstacles to the realization ofa viable product were still ahead.

It was a DIC adhesives marketing manager in the PRC who first
noted a slowdown in sales of solvent-free adhesives for film
lamination, the adoption of which had risen sharply during thesecond decade of the 21st century against a backdrop of tighter
environmental regulations. Examining contributing factors, hedetermined that the principal causes were that designability after
processing was inferior to film laminated with solvent-based
adhesives and curing was too slow to support continuous lamination.
This, together with rising pressure to reduce environmental impact,
convinced him that if performance could be improved then demand

DIC Report 202033

Special Feature: Product Development Designed to Create New Value

7KHTXHVWWRFRQWUROFXULQJVSHHGDQGÀQGWKHRSWLPXPFRPELQDWLRQRIDGKHVLYHFRPSRQHQWVFeatures demanded of new adhesives include a softness thatPDNHVFRDWLQJHDV\FXUDELOLW\WKDWGRHVQRWLPSDLUGHVLJQDELOLW\DQG
DFXULQJVSHHGFRPSDWLEOHZLWKFRQWLQXRXVODPLQDWLRQ0RUHRYHUWKHVHIHDWXUHVPXVWEHGHPRQVWUDWHGLQDWKLQILOPZHLJKLQJRQO\a few grams per square meter. The technical team marshaledaccumulated expertise, testing a wide range of new materials in
DELGWR¿QGWKHRSWLPXPFRPELQDWLRQRIDGKHVLYHFRPSRQHQWV,W
SURYHGSDUWLFXODUO\GLI¿FXOWWRFRQWUROFXULQJVSHHGDQGDGMXVWLQJWKH
GHOLFDWHFRPSRVLWLRQZDVWULFN\EXWWKHVHHIIRUWVHYHQWXDOO\\LHOGHG
DUALAM™, a solvent-free adhesive that cures several times fasterthan comparable conventional adhesives.

The challenge did not end there.
'HYHORSLQJDVXSSO\XQLWWKDWPDGHit possible to use DUALAM™ withexisting laminating machines was
crucial. DIC partnered with a leading
laminating machine manufacturer to
SHUIHFWDXQLWWKDWWKLQO\DQGHYHQO\coats the new adhesive onto film
VXUIDFHV:LWKWKLVDFKLHYHPHQWWKH&RPSDQ\ZDVILQDOO\UHDG\WR
launch DUALAMWKHUHE\IXO¿OOLQJLWVSOHGJHRISURYLGLQJSDFNDJLQJVROXWLRQVWKDWFRQWULEXWHWRVXVWDLQDELOLW\IRUWKHJOREDOHQYLURQPHQWExternal Surface after Lamination (Improved Decorative Properties)
Adhesive

Orange peel

Bubbles

DUALAM™
Good

Good

Poor

Poor

Conventional
solvent-free adhesive

Value Provided

Competitiveness

Good

Superior production
efﬁciency

DUALAM TM

Outstanding applicability

Solvent-based adhesives

Optimal Environmental
throughput load reduction

Productiveness

DIC Report 2020

34

Adhesive costs

Utility costs

Reduction of VOCs

Number of laminatedstructure layers

Appearance

Laminate strength

Continuous
processability

Aging time

Short delivery time

Poor

Inventory

Conventional solvent-free adhesives

Effective cost
reduction

Exceptional environmental
performance
Cost advantage

Special Feature: Product Development Designed to Create New ValueKEY PERSON from DIC

This is worthwhile for DIC precisely because it’s something no other company is doing.

:KHQ,ZDVZRUNLQJLQWKH35&,UHFRJQL]HGWKDWWKHUHZHUHLVVXHVZLWKVROYHQWIUHHDGKHVLYHVIRU¿OPODPLQDWLRQDQGSURSRVHGWKDWZHGHYHORSD
QHZDGKHVLYH,QSDUWLFXODUWKHODPLQDWLRQRIVWUXFWXUHVZLWKWKUHHRUPRUHOD\HUVZDVH[WUHPHO\LQHI¿FLHQWEXWWKHUHZHUHQRFRPSDQLHVORRNLQJWR¿[WKLVSUREOHP3UHFLVHO\IRUWKLVUHDVRQ,WKRXJKWLWZDVDZRUWKZKLOHFKDOOHQJHIRU',&WRWDNHRQ6ROYHQWIUHHDGKHVLYHVDUHHVVHQWLDOWRUHGXFH
WKHHQYLURQPHQWDOLPSDFWRISDFNDJLQJ¿OPSURGXFWLRQVRZHZHUHFRQ¿GHQWWKDWGHPDQGZRXOGLQFUHDVHLIDSSOLFDWLRQVFRXOGEHH[SDQGHG0DQ\EUHDNWKURXJKVZHUHQHHGHGWRUHDOL]HDYLDEOHSURGXFWEXWWKDQNVWRWKHDVVLVWDQFHRIPDQ\SHRSOHZHVXFFHHGHGLQEULQJLQJDUALAM™ into
EHLQJ,WZDVGH¿QLWHO\DSURXGPRPHQW
Manager, Packaging & Graphic Business Development Group, Packaging & Graphic Business Group, DIC Corporation

KEY PERSON from DIC

Chouichi Takada

We are working to provide more value to customers by developing new technologies.

Performance features required of adhesives are diverse and include ease of application, rapid bonding and strong adhesion. The
GH¿QLQJFKDUDFWHULVWLFRIDUALAMLVWKDWLWFXUHVUDSLGO\ZKLFKKHOSVLQFUHDVHFXVWRPHUV¶SURGXFWLYLW\+RZHYHULILWERQGVWRRTXLFNO\WKHTXDOLW\RIWKH¿QLVKZLOOEHSRRUDQGWKHTXDOLW\ZLOOGHWHULRUDWH)RUWKLVUHDVRQZHWHVWHGUHSHDWHGO\WRGHWHUPLQHWKHRSWLPXPERQGLQJVSHHGDSURFHVVRIWULDODQGHUURUWKURXJKZKLFKZHHYHQWXDOO\DFKLHYHGRXUJRDO*RLQJIRUZDUGZHZLOOFRQWLQXHWDNLQJEROGVWHSVWRDGGUHVVWKHFKDOOHQJHRIUHGXFLQJHQYLURQPHQWDOLPSDFWE\GHYHORSLQJLQQRYDWLYHODPLQDWLQJDGKHVLYHVOLNHDUALAM™.
Manager, Adhesives Technical Group 1, Adhesives Technical Division, DIC Corporation

KEY PERSON from DIC

Koji Akita

Since the launch of DUALAMTM, many customers from Japan and overseas have come to see us.

Since the launch of DUALAMLQZHKDYHUHFHLYHGPDQ\LQTXLULHVIURPFXVWRPHUVERWKLQ-DSDQDQGRYHUVHDVDQGDVWHDG\VWUHDPRIUHTXHVWVWRWRXURXUIDFLOLWLHV3URPRWLRQDOHIIRUWVFXUUHQWO\FHQWHURQ-DSDQDQG$VLDQPDUNHWVEXWZHSODQWRH[SDQGRXU
IRFXVWRLQFOXGH(XURSHHDUO\LQVXPPHU%\¿VFDO\HDUZHDLPWRDFKLHYHDQQXDOJOREDOVDOHVRIELOOLRQ:HZLOODOVRZRUNWRH[SDQGWKHUDQJHRISDFNDJLQJDSSOLFDWLRQVIRUDUALAMDQGRXUOLQHXSRIODPLQDWLRQV\VWHPVZLWKWKHDLPRIUHDOL]LQJ
LQQRYDWLYHSDFNDJLQJPDWHULDOVWKDWFRQWULEXWHWRVDIHW\DQGSHDFHRIPLQGDVVHWIRUWKLQ',&
Project Manager, P-2 Project, Next-Generation Packaging Business Unit, New Business Development Headquarters, DIC Corporation

DIC Report 2020

35

Susumu Nishimura

Sun Chemical’s Activities
Sun Chemical, which oversees the DIC Group’s operations in Europe and the Americas, is one of the world’s leading manufacturers ofprinting inks. The company develops and supplies a broad range of products that address diverse social imperatives.

As the world shifts to become more environmentally conscientious, consumer
packaged goods companies and their converter partners are constantly working tomeet consumer demands. Studies show that consumers prefer sustainable packaging
over packaging that is not eco-friendly.
Meanwhile, some countries and world organizations are taking it upon themselves to make the world
more sustainable. The United Nations (UN), for instance, introduced its initiative, Transforming our World:the 2030 Agenda for Sustainable Development, a plan that highlights 17 UN goals for decreasing thecarbon footprint.
Recognizing these marketplace and regulatory trends, many brands have explored ways to integrate
more sustainable solutions into their packaging. One option has been the development of biorenewable
inks based on renewable natural resources. These biorenewable inks can be derived from plant materials,
including gums, resins, waxes, solvents, oils and other polymer building blocks, according to the National
Association of Printing Ink Manufacturers (NAPIM).
SocialImperative

Sun Chemical s
Response

Sun Chemical has aligned several of its sustainability goals with those of the UN’s agenda for sustainable
development to drive sustainability in the packaging industry. Furthermore, Sun Chemical is supporting the goalof lowering CO 2 emissions by developing biorenewable inks that will help to reduce the carbon footprint of theprinting industry.
By partnering with HAVI, a global company that innovates, optimizes, sources and manages the packaging
and supply chains of leading foodservice brands, Sun Chemical has introduced SunVisto ® AquaGreen to themarket. The line of water-based inks, formulated with significantly higher levels of biorenewable resin content
compared to other previous market offerings, offers a natural, cleaner, green option for food packaging.
Sun Chemical’s SunVisto ® AquaGreen biorenewable inks have been certified and specified by HAVI to be arecommended natural-based ink solution, ensuring that foodservice brands and manufacturers receive truly
renewable packaging ink.
HAVI’s extensive global network and relationships with package developers on all continents means that Sun
Chemical’s natural-based inks could be used by any of HAVI’s global partners anywhere in the world.
SunVisto ® AquaGreen inks can be blended with varnishes and standard water-based pigment dispersions,and do not compromise end-use or on-press performance. They also offer outstanding print fidelity andink resolubility on press, quick setting for in-line converting and high levels of resistance properties to rub,abrasion, water and grease.
The aim of Sun Chemical’s sustainability initiatives relating to raw materials used and its manufacturing
processes is to increase the plant-based biorenewable content (BRC) and/or recycled content in Sun Chemical
products. Sun Chemical is moving on from using fossil-based raw materials, which are limited resources, toutilizing sustainable plant-based raw materials.

DIC Report 202036

Sun Chemical’s Activities

Striving to foster a circular economy, McDonald’s teams up with partners like Sun Chemical and HAVI totransition all of its packaging to be 100% renewable, recycled or certified by 2025. Updates include packaging topopular menu items like hamburger clam shells, and commonly used bagging such as the small McDonald’s bag.
Sun Chemical’s SunVisto ® AquaGreen water-based flexo inks are an example of a biorenewable ink being
used on McDonald’s packaging as displayed on various samples that will be shown at Interpack 2020 in
Düsseldorf, Germany.
In addition to SunVisto ® AquaGreen, both Sun Chemical and DIC will exhibit a full range of sustainableproducts with the goal of showing converters and brand owners the Power of Sustainable Packaging. This
theme will show the market the commitment of Sun Chemical and DIC to sustainable product development
across all packaging markets and applications.

SunVisto® AquaGreen is being used to create more sustainable fast food packaging.

VOICE We are building a comprehensive support system to achieve sustainable goals for customers.
Sun Chemical understands that today’s environment requires more than just change—it demands
transformation. At Sun Chemical, we are passionate about sustainability within the industry and will continue
to develop our products and market approach to drive transformation. We’re teaming up with like-minded,environmentally friendly brands to develop many other solutions designed to reduce global CO 2 emissions
and increase the use of biorenewable and recyclable raw materials throughout the entire supply chain.
Vice President, Global Marketing, Inks & Global Communications, Sun Chemical Corporation

DIC Report 2020

37

Penny Holland

DIC Asia Pacific’s Activities
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of fast-growing business opportunities. This is our business domain. As we have seen in COVID-19, the use of digital tools is eminent as
we see the emergence of a “new normal.” Businesses that adapt fast to the new digitalization movement will be successful as aspiring
companies reposition themselves to leverage these business opportunities. Change is the only constant in this dynamic millennium economy.

The Drive Toward the “3Ss”)RUWXQDWHO\',&$VLD3DFL¿FHPEUDFHGGLJLWDOWUDQVIRUPDWLRQHDUO\RQ8VLQJLQQRYDWLYHGLJLWDOWRROVZKLOHOHYHUDJLQJDFWLYLWLHVDFURVVDOOIURQWV
the region was able to drive a total solutions-based approach supporting our customers (as a group) in the Value Transformation pillar.
,QOLQHZLWK',&WKH$VLD±3DFL¿FUHJLRQZLOODFFHOHUDWHLWVGULYHWRIRFXVRQWKHFRQFHSWRIWKH³3Ss,” i.e., Support, Specializationand Sustainability. This entails the drive toward Support and strengthening of the functional and specialist organization. We will introduce
more structured e-learning initiatives to further build competencies, while enhancing and effectively growing DIC’s human capital base. To
complement organic growth potential, the region will establish a professional and quick response team to support the merger and acquisition
activities in the region.
Through Specialization, and working effectively, DIC Asia Pacific envelopes the “One DIC” concept by creating a functional network
spanning the region to resolve issues and fostering a border–transcendent collaborative mindset. This approach drives Value Transformation
DQG1HZ3LOODU&UHDWLRQLQLWLDWLYHVDVH[SODLQHGLQ',&',&$VLD3DFL¿FLVFRPPLWWHGWRDFWLYHO\VXSSRUWLQJFXVWRPHUV’ value creation.
The product specialist team is accelerating support through the introduction of “Tool Box/Kits.” Conversely, on the marketing front, theregional managers are working with the local sales team to drive coordinated and targeted sales campaigns while capitalizing on data
analytics for a more focused sales approach.
On the Sustainability front, the region is focused on driving these programs targeted at the three major stakeholders, i.e., customers,
EXVLQHVVSDUWQHUVDQGRXUYDOXHGHPSOR\HHV',&$VLD3DFL¿FKDVHVWDEOLVKHGDVXVWDLQDEOHRUJDQL]DWLRQE\SURDFWLYHO\LQWURGXFLQJ
sustainable products coupled with a sustainable procurement system through a
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policies and training programs to improve skills necessary for a sustainable working
environment balancing work and life in a new digital economy.
',&$VLD3DFL¿FIRFXVHVRQFULWLFDODFWLYLWLHVDQGFRQWLQXHVWRUROORXWSODQVWRHQKDQFH
DQGGULYHVXVWDLQDEOHGHYHORSPHQWLQWKH$VLD±3DFL¿FUHJLRQ7KHVHZLOOEHGRQHWKURXJKstrong and active collaboration with Group resources to drive value to all our customers
and society under the “One DIC” banner.
DIC Asia Pacific Pte Ltd office

The Drive Toward the “3Ss”
SupportSpecialization

Sustainability

Strengthen Specialized Expertise

Capitalize on Core Expertise

Focus on Three Major Stakeholders- Learning and development initiatives- Grow human capital and maximize
talent bench strength- Establish talented task force forstrategic projects and supporting
M&A activities- Talent scouting and grooming- Introduce a collaborative regional framework- Instill a, “One DIC” mindset- Create creative and innovative ways
of working to create and enhancevalue- Achieve results by collaboration
to gain synergies- Value creation with customers,
business partners and our
employees via innovative process
and delivery of services- Develop products that are sociallyacceptable and valued- Promote work–life balance- Diversity and transparency- Talent development

Supported by functional accountability and responsibility
DIC Report 2020

38

DIC (China)’s Activities
In the PRC, the DIC Group operates some 30 companies employing more than 2,000 employees. These companies are responsibly
GHOLYHULQJH[FHOOHQWSURGXFWVDQGVHUYLFHVZKLOHDOVRFRQWULEXWLQJWRWKHLUFRPPXQLWLHV,Q¿VFDO\HDU',&FRQGXFWHGPDQ\community activities, a few of which are introduced here.

Ties with Society

DIC (Guangzhou) Co., Ltd.
On April 28, 2019, DIC (Guangzhou), which is involved in the sale of DIC products,
sponsored a tree-planting event with the aim of contributing to environmental protection.

Qingdao DIC Liquid Crystal Co., Ltd.
Qingdao DIC Liquid Crystal, which manufactures base components for LC materials,
held an environmental protection event that included cleaning and collecting waste in
the area around its plant on May 5, 2019. On July 14, the company held Family Day,an event for the families of employees, which welcomed 126 people (44 employees, 35
adult family members and 47 children).

DIC Synthetic Resins (Zhongshan) Co., Ltd.
On August 10, 2019, synthetic resins and metal carboxylates manufacturer DIC Synthetic
Resins (Zhongshan) held an environmental education event for children titled “Hand-inHand Green Mountaineering.” The event earned high marks from participants.

DIC Zhangjiagang Chemicals Co., Ltd.
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and textile colorants, and synthetic resins, held a unique Family Day event designed
to demonstrate its management philosophy and express its appreciation to employees
and their families, the stated theme of which was to leverage the power of the family to
IXO¿OOWKHFRPSDQ\¶VGUHDPV2Q'HFHPEHUWKHFRPSDQ\SDUWLFLSDWHGLQWKH³:DON
for Love, Walk in City” jogging event in an effort to reinforce its reputation as a good
corporate citizen.

DIC Graphics (Guangzhou) Ltd.
From September through October 2019, DIC Graphics (Guangzhou), a
PDQXIDFWXUHURISULQWLQJLQNVVRXJKWWRIXO¿OOLWVUHVSRQVLELOLW\DVDFRUSRUDWHFLWL]HQ
E\FRQGXFWLQJDWUDI¿FVDIHW\SURJUDPIRUFKLOGUHQXQGHUWKHWKHPHRI³SURWHFWLQJ
children with love and support” in collaboration with a local volunteer organization.

Qingdao DIC Finechemicals Co., Ltd.
Each year, Qingdao DIC Finechemicals provides assistance to areas affected by
GLVDVWHUVRUSRYHUW\,Q¿VFDO\HDUHPSOR\HHVXVHGWKHLUFRPSDQ\WULSWRYLVLW
primary schools for Miao and Yi children in Guoquanyan Township, part of Nayong
County, in the city of Bijie, Guizhou Province, to donate winter clothes to children.
Ties with Stakeholders,Q$SULO',& &KLQD FUHDWHGDQRI¿FLDODFFRXQWRQ:H&KDWWKH35&¶VODUJHVWPXOWLSXUSRVHVRFLDOPHGLDDSSZKLFKboasts 1.1 billion users. The company will use its new WeChat account to enhance communications with stakeholders. The
company invites people to scan the QR code to the right to follow the account and access the latest information on DIC (China).
DIC Report 202039

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

| Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its corporate website.
Policy on Corporate Governance WEB https://www.dic-global.com/pdf/ir/management/governance/governance_en.pdf| Corporate Governance Organization$FRPSDQ\ZLWKLQWHUQDODXGLWRUV',&PDLQWDLQVD%RDUGRI'LUHFWRUVDQGDQ$XGLW 6XSHUYLVRU\%RDUG',&KDVDOVRLQVWLWXWHGDQH[HFXWLYHRI¿FHU
system and has established a Nomination Committee, a Remuneration Committee, an Executive Committee and a Sustainability Committee.
General Meeting of Shareholders

Corporate Governance Organization

Appointment

Appointment

Audit

Board of Directors
Nomination Committee
Remuneration Committee

Accounting
audit

President and CEO

Audit & Supervisory Board

Independent auditors

Sustainability Committee

Executive Committee

Internal Control Department

Business groups, New Business Development Headquarters,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative units, sites

Group companies

Internal audit

1

Board of Directors

To accelerate decision making and reinforce corporate governance, eight directors have been elected to the Board of Directors. Of the eight,
three are outside directors (one of whom is female). In principle, the Board meets once monthly. The Board of Directors is responsible formaking decisions on matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval, as
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2Nomination Committee

The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the
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by an independent outside director.
3

Remuneration Committee

The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining the
VDODULHVDQGERQXVHVRIGLUHFWRUVDQGH[HFXWLYHRI¿FHUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGH
directorsZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLVDOVR¿OOHGE\DQLQGHSHQGHQWRXWVLGHGLUHFWRUDIC Report 202040

Corporate Governance

4

Executive Committee

The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets twice
PRQWKO\&RPPLWWHHPHPEHUVDUHGLUHFWRUVDQGH[HFXWLYHRI¿FHUVGHVLJQDWHGE\WKH%RDUGRI'LUHFWRUV0HHWLQJVDUHDOVRDWWHQGHGE\RQH$XGLW& Supervisory Board member as part of the auditing process. Details of deliberations and resolutions are reported to the Board of Directors.
5

Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies and
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Board of Directors. As part of audit activities, one Audit & Supervisory Board member also attends Sustainability Committee meetings. The
committee reports the matters upon which it deliberates and the results of its deliberations to the Board of Directors.
6

Audit & Supervisory Board

The Audit & Supervisory Board comprises four members, including two outside Audit & Supervisory Board members (one of whom is female).
In principle, the Audit & Supervisory Board meets once monthly. Board activities include debating and determining auditing policies and auditing
plans. Board members also report on the results of audits conducted, as well as attend important meetings, including those of the Board of
Directors, the Executive Committee and the Sustainability Committee, meet with representative directors on a periodic basis to exchange
LQIRUPDWLRQDQGRSLQLRQVDQGFROOHFWEXVLQHVVUHSRUWVIURPGLUHFWRUVH[HFXWLYHRI¿FHUVDQGHPSOR\HHV,QDGGLWLRQ',&KDVHVWDEOLVKHGDQ$XGLW6XSHUYLVRU\%RDUG0HPEHUV¶2I¿FHWRZKLFKLWDVVLJQVGHGLFDWHGSHUVRQQHOWRDVVLVWWKHPHPEHUVLQWKHLUGXWLHV
Full-time Audit & Supervisory Board member Hiroyuki Ninomiya oversaw corporate accounts at the Company for many years and previously
served as general manager of the Accounting Department and Head of the Finance and Accounting Unit. DIC’s two outside Audit & Supervisory%RDUGPHPEHUVDOVRKDYHH[WHQVLYHH[SHULHQFHLQDQGNQRZOHGJHRI¿QDQFHDQGDFFRXQWLQJZKLFKWKH\DUHDEOHWROHYHUDJHLQWKHSHUIRUPDQFH
of their duties as outside directors of DIC. Outside Audit & Supervisory Board member Katsunori Takechi provides tax accounting services
SXUVXDQWWR$UWLFOHRIWKH&HUWLILHG3XEOLF7D[$FFRXQWDQW$FWDQGKDVEURDGH[SHULHQFHLQWKHILHOGRIFRUSRUDWHODZ2XWVLGH$XGLW 
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7

Internal Auditing Department

The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at DIC anddomestic DIC Group companies. For DIC Group companies in Asia, Oceania, the PRC, the Americas and Europe, internal auditing is the
responsibility of local internal auditing teams.
8

Accounting Auditors

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

Meeting Data
Number of and attendance at meetings of the Board of Directors, Nomination Committee andRemuneration &RPPLWWHHLQ¿VFDO\HDU%RDUGRI'LUHFWRUV1XPEHURIPHHWLQJVDWWHQGDQFH
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5HPXQHUDWLRQ&RPPLWWHH1XPEHURIPHHWLQJVDWWHQGDQFH

| Rationale Behind Current Corporate Governance Organization',&KDVLQVWLWXWHGDQH[HFXWLYHRI¿FHUV\VWHPDPRYHDLPHGDWVHSDUDWLQJGHFLVLRQPDNLQJDQGLPSOHPHQWDWLRQDQGWKHUHE\DFFHOHUDWLQJ
business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to its Board of Directors,
the Company has taken steps to reinforce its monitoring of business execution. DIC also has a Nomination Committee and a Remuneration
Committee, which include the three outside directors, to ensure objectivity in the nomination of, and in determining remuneration for, directors
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outside members, liaises with the accounting auditors and the internal auditing department. This structure ensures the effective functioningof DIC’s corporate governance system.

DIC Report 202041

Corporate Governance| System of Internal Controls
1

Status of the System of Internal Controls

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To this end, DIC has prepared and operates a system of internal controls, key components of which are summarized below, based upon
the Companies Act of Japan and the Financial Instruments and Exchange Act of Japan. The Board of Directors hears annual reports on
WKHVWDWXVRIWKHV\VWHPRILQWHUQDOFRQWUROVDV\QRSVLVRIZKLFKLVLQFOXGHGLQWKH&RPSDQ\¶VRI¿FLDOUHSRUWRQLWVEXVLQHVVDFWLYLWLHV7KH
following is summary of the synopsis:❶ The Company shall work to set forth the DIC Group Code of Business Conduct as the standard regarding compliance, which directors
and employees of the DIC Group shall comply with, and to disseminate the same.
❷ The Company shall establish an internal notification system as a channel available for the employees of the DIC Group and set up
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❸ In order to ensure the duties of directors are performed properly and efficiently within the DIC Group, the Company shall establish
regulations regarding company organization and authority.
❹ The Company shall formulate medium-term management plans and the annual budget based on management policies and management
strategies, and, through dissemination of the same, ensure common goals are shared within the DIC Group. The Company shall makeprogress reports to the Board of Directors.
❺ Information pertaining to the performance of duties by directors shall be recorded, retained and managed appropriately based on theregulations for document management. The Company shall establish regulations for systems of information management and shall
SUHSDUHDV\VWHPIRUSUHYHQWLQJOHDNDJHRIFRQ¿GHQWLDOLQIRUPDWLRQRIWKH',&*URXS❻ The Company shall formulate a risk management policy and shall identify, assess, prioritize and address properly any risks that may
KDYHDVLJQL¿FDQWLPSDFWRQPDQDJHPHQWRIWKH',&*URXS❼ The Company shall determine an administrative department for each subsidiary from the standpoints of the conduct of business andbusiness management, and shall supervise business affairs by dispatching a director to each subsidiary.
❽ 7KH&RPSDQ\VKDOOFODULI\LPSRUWDQWPDWWHUVSHUWDLQLQJWRVXEVLGLDULHVWKDWUHTXLUHUHSRUWLQJWRWKH&RPSDQ\2

Basic Policy Toward Eliminating Demands by Antisocial Elements',&¶VEDVLFSROLF\DVRXWOLQHGLQWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLVWRVWDQG¿UPO\DJDLQVWDQWLVRFLDOHOHPHQWVDQGLQQRZD\
to acquiesce to demands presented by such elements. The General Affairs and HR Department is responsible for coordinating efforts to
respond to extortion or other demand presented by antisocial elements, while individuals have been put in charge of efforts at each site andwithin each Group company. These individuals work in close collaboration with lawyers and the police to ensure the Company’s responses
are resolute. DIC has also prepared and distributed a manual on appropriate responses to such demands, with the aim of raising awarenessamong employees.

| Outside Directors and Outside Audit & Supervisory Board Members
1

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

DIC currently has three outside directors and two outside Audit & Supervisory Board members. In addition to attending meetings of theBoard of Directors, the outside directors—who have extensive experience in corporate management—serve as members of the Nomination
Committee and the Remuneration Committee, enabling them to provide supervision with an independent point of view, thereby helping toreinforce DIC’s corporate governance. The two outside Audit & Supervisory Board members—one an attorney specializing in corporate
law and the other a certified public accountant—advise management of the DIC Group from an expert, multifaceted and independent
perspective, thereby helping to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Audit & Supervisory Board Members

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside Audit &Supervisory Board member, which are shown below. DIC’s outside directors and outside Audit & Supervisory Board members are individuals
ZKREDVHGRQWKHVHVWDQGDUGVDUHXQOLNHO\WRKDYHFRQÀLFWVRILQWHUHVWVZLWKRUGLQDU\VKDUHKROGHUVDQGZKRFRPSO\ZLWKFULWHULDIRUWKH
independence of directors/audit & supervisory board members set by the Tokyo Stock Exchange.

DIC Report 202042

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

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

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

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

To enable the Board of Directors to resolve major operations-related issues, as well as
to facilitate the effective oversight of management, the Board of Directors comprises
outside directors, who maintain independence, and other individuals having a thoroughknowledge of the businesses of the DIC Group, with consideration given to ensuring abalance among necessary knowledge, experience and capabilities. In light of the DIC
Group’s global operations, DIC also strives to ensure diversity in the Board’s composition.
One member of the Board of Directors is female, as is one member of the Audit &Supervisory Board.

Composition of the Board of Directors

41.7%
58.3%

Composition of the Board of Directors and the Audit & Supervisory Board
In-house

Outside

Total

Percentage of outside
members

Directors

5

3

8

37.5%

Audit & Supervisory
Board members

2

2

4

50.0%

Total

7

5

12

41.7%

DIC Report 2020

43

Directors of DIC

Outside directors

Corporate Governance2

Remuneration for Executives

Remuneration for directors is determined by the Remuneration Committee, which takes into account prevailing market rates, and consists
RIEDVLFUHPXQHUDWLRQERQXVHVZKLFKDUHOLQNHGWRFRQVROLGDWHGRSHUDWLQJUHVXOWVDQGWKHGHJUHHRIDFKLHYHPHQWRILQGLYLGXDOWDUJHWVDQG
VWRFNFRPSHQVDWLRQZKLFKLVEDVHGRQPHGLXPWRORQJWHUPRSHUDWLQJUHVXOWV'LUHFWRUVZKRVHUYHFRQFXUUHQWO\DVH[HFXWLYHRI¿FHUVDUH
eligible for bonuses and stock compensation. Other directors and outside directors are eligible for basic remuneration only. Remuneration
for Audit & Supervisory Board members consists of basic remuneration only and is determined through discussion involving all Audit &Supervisory Board members, in accordance with internal rules established by the Audit & Supervisory Board, with consideration given to
ensuring a balance with remuneration for directors and to prevailing market rates.
Remuneration for Directors and Audit & Supervisory Board Members in Fiscal Year 2019
Total remuneration
0LOOLRQVRI\HQ

Composition of remuneration
0LOOLRQVRI\HQ
Basic salary

Bonus

Stock
compensation

Number of directors and Audit& Supervisory Board members

Directors(excluding outside directors)

269

219

34

16

6

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

60

60

―

―

3

2XWVLGHRI¿FHUV

60

60

―

―

7

Notes:
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0HHWLQJRI6KDUHKROGHUVKHOGRQ0DUFK
7KHWRWDODPRXQWRIVWRFNFRPSHQVDWLRQLVWKHWRWDOPRQHWDU\YDOXHRIVKDUHVFRUUHVSRQGLQJWRWKHSRLQWVJUDQWHGIRU¿VFDO\HDUEDVHGRQWKH&RPSDQ\¶VSHUIRUPDQFHEDVHGVWRFNFRPSHQVDWLRQSODQ

3

Evaluation of the Board of Directors’ Effectiveness

DIC conducts an analysis and evaluation of the effectiveness of the Board of Directors annually via a self-evaluation conducted by the
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Supervisory Board members regarding, among others, self-evaluation and Board administration, responses to which were analyzed andHYDOXDWHGE\WKH%RDUGRI'LUHFWRUV$VDUHVXOWWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVFRQ¿UPHGTo further improve the Board’s effectiveness, DIC recognizes the enhancement of discussion regarding corporate strategy, including
FRQ¿UPLQJWKHVWDWXVRIWKHPHGLXPWHUPPDQDJHPHQWSODQDVDNH\FKDOOHQJHDQGZLOOFRQWLQXHZRUNLQJWRSURPRWHLPSURYHPHQWVDIC Report 202044

Directors, Audit & Supervisory Board Members and Executive Officers（ 2019 年 0 月現在）
(As of May 2020)| Directors

1

Chairman of the Board of Directors

Yoshiyuki Nakanishi

3

Representative Director

Masayuki Saito
Director

5 Director

7

Toshifumi Tamaki

Yoshiaki Tamura

2 Representative Director

4

Kaoru Ino

Yoshihisa Kawamura Kazuo Tsukahara Kuniko Shoji

6

Director*

Director*

8

7

5

6

8

Director*
3

1

2

4

* Outside| Audit & Supervisory Board Members
1

Audit & Supervisory Board Member

Hiroyuki Ninomiya
2

Audit & Supervisory Board Member

Akihiro Ikushima
3

Audit & Supervisory Board Member*

Katsunori Takechi
4

Audit & Supervisory Board Member*Michiko Chiba* Outside3

2| 2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHU3URÀOHV

| 2XWVLGH'LUHFWRU3URÀOHV
Kazuo Tsukahara

1

Katsunori Takechi

Kuniko Shoji

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

April
2000 Public Prosecutor, Civil Affairs Bureau, Ministry of Justice
October 2003 Joined Anderson Mori & Tomotsune
July
2011 Managing Partner, Takechi & Partners

Yoshiaki Tamura

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

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

DIC Report 2020454

| ([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Masami Hatao

Toshifumi Tamaki

Naoyoshi Furuta

Assistant to President and CEO
Chairman of the Board, Sun Chemical
Corporation
Chairman of the Supervisory Board,
Sun Chemical Group Coöperatief U.A.

President, Color & Display BusinessGroup
General Manager, Display Material
Products Div.

Head of Corporate Strategy Unit
In Charge of Kawamura Memorial DIC
Museum of Art

General Manager, Production
Management UnitManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Kiyotaka Kawashima

Rudi Lenz

Shinsuke Toshima

Head of General Affairs and Legal Unit
In Charge of Diversity

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

General Manager,
Technical Management Unit

Vice Chairman of the Board,
Sun Chemical Corporation

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

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Taihei Mukose

Paul Koek

Myron Petruch

Takeshi Asai

Koji Asada

Head of Purchasing and Logistics Unit
Head of ESG Unit
General Manager, Purchasing DeptManaging Director,
DIC Asia Pacific Pte Ltd

President and CEO,Sun Chemical Corporation

General Manager,
Corporate Planning Dept.
In Charge of Osaka Branch andNagoya Branch, Integration Promotion

Head of SCM Unit

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masahiro Kikuchi

Masamichi Sota

Yuji Morinaga

Shuji Furuta

Kiyofumi Takano

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

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

General Manager,
Packaging Material Products Div.

Head of Finance and Accounting Unit
CFO

General Manager,
New Business
Development Headquarters

Executive Officer

Executive Officer

Executive Officer

Yoshinari Akiyama

Toshiro Ariga

Takashi Ikeda

General Manager,
Color Material Products Div.

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

General Manager,
Composite Material Products Div.

DIC Report 2020

46

Overview of Sustainability
In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an accurate
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Sustainability Report
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges, including rising awareness of the need to achieve sustainability in a manner that takes into account the environment,
ecosystems and socioeconomic issues. The DIC Group launched its corporate social responsibility (CSR) program in fiscal year 2007. Having
IXUWKHUFODUL¿HGWKHRYHUDOOGLUHFWLRQRIUHODWHGLQLWLDWLYHVDV³VXVWDLQDEOHJURZWK´HIIHFWLYHIURP¿VFDO\HDUWKH*URXSFKDQJHGWKHGHVLJQDWLRQ
XVHGDFURVVLWVSURJUDPIURP³&65´WR³VXVWDLQDELOLW\´,Q¿VFDO\HDU',&HVWDEOLVKHGWKH(6*8QLWDVSHFLDOL]HGGHSDUWPHQWWRIXUWKHUH[SDQG
*URXS(6*LQLWLDWLYHVZRUOGZLGH,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSSURPRWHVDYDULHW\RIVXVWDLQDELOLW\LQLWLDWLYHVZRUOGZLGHDQGZRUNVWRPDLQWDLQDQDFFXUDWHJUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHVBasic Sustainability Policy（3DUWLDOO\UHYLVHGLQ0DUFK）The DIC Group is dedicated to conducting its business while retaining a strong commitment to five key concepts: preserving safety
and health, managing risks, ensuring fair business practices and respect for diversity and human rights, maintaining harmony withthe environment and advancing its protection, and creating value for society through innovation and contributing to ongoing economic
growth. DIC Group employees will continue working to deliver the value that its stakeholders—including its customers, suppliers, local
FRPPXQLWLHVVKDUHKROGHUVDQGLQYHVWRUVDQGHPSOR\HHV²H[SHFWVKRZLQJLQJHQXLW\DQGDVHQVHRIUHVSRQVLELOLW\7KH*URXSLWVHOIZLOOVWULYHWRUHPDLQDQRUJDQL]DWLRQWKDWFRQWULEXWHVWRVXVWDLQDELOLW\IRUVRFLHW\DVZHOODVWRWKHFRQVHUYDWLRQDQGLPSURYHPHQWRIWKHJOREDOHQYLURQPHQWE\FDSLWDOL]LQJRQLWVEXVLQHVVHVWRDFKLHYHXQIDOWHULQJJURZWKWKHUHE\HQKDQFLQJLWVRZQVXVWDLQDELOLW\
Notes: :LWKWKHDLPRIHQVXULQJWKDWLWUHPDLQVDJOREDOO\WUXVWHGFRUSRUDWHFLWL]HQZLWKDSURXGUHSXWDWLRQLQ'HFHPEHUWKH',&*URXSEHFDPHDVLJQDWRU\WRWKH81*&7KH*URXSDOVRWDNHVWKHJXLGHOLQHVSURYLGHGE\,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUVRFLDOUHVSRQVLELOLW\LQWRDFFRXQWLQFRQGXFWLQJLWVRSHUDWLRQV 7KH JOREDO FRPPXQLW\ WRGD\ UHFRJQL]HV WKH SURPRWLRQ RI (6* PDQDJHPHQW ZKLFK VHHNV WR EDODQFH VXVWDLQDEOH HFRQRPLF JURZWK DQG WKH UHVROXWLRQ RI VRFLDO
LPSHUDWLYHVDVFULWLFDO7KLVLVHYLGHQFHGE\WKHIDFWWKDWFRXQWULHVZRUOGZLGHKDYHUDWLILHGWKH3DULV$JUHHPHQWDQGWKH6'*VERWKRIZKLFKZHUHDGRSWHGLQ

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

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

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

Deployment,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSKDVIRUPXODWHGPHGLXPWHUP ILVFDO\HDUV± SROLFLHVDQGFUHDWHVDQQXDODFWLYLW\SODQVIRUHDFKRIWKHVHWKHPHV7KH*URXSPDNHVXVHRIWKHSODQ±GR±FKHFN±DFW 3'&$ F\FOHLQSURPRWLQJLQLWLDWLYHVDQGUHSRUWVRQLWV
achievements annually in the DIC Report. Individual product divisions, business groups, sites, and overseas and domestic DIC Group companies
DUHFKDUJHGZLWKSXUVXLQJHIIHFWLYHVXVWDLQDELOLW\SURJUDPVE\IRUPXODWLQJWKHLURZQDQQXDODFWLYLW\SODQVEDVHGRQWKH*URXS¶VSODQDVZHOODVZLWKHQVXULQJWKDWWKH*URXS¶VSROLFLHVSHUPHDWHWKHLURUJDQL]DWLRQVDQGODERUIRUFHVDQGOLQNLQJVXVWDLQDELOLW\LQLWLDWLYHVWREXVLQHVVWDUJHWVDIC Report 202047

| System for Promoting Sustainability Initiatives

Members of the Sustainability Committee

7KH',&*URXS¶VV\VWHPIRUSURPRWLQJVXVWDLQDELOLW\LQLWLDWLYHVFHQWHUVRQWKH
6XVWDLQDELOLW\&RPPLWWHHZKLFKDQVZHUVGLUHFWO\WRWKHSUHVLGHQWDQG&(2DQGZKLFKPHWIRXUWLPHVLQ¿VFDO\HDU7KHFRPPLWWHHLVWDVNHGZLWKUHSRUWLQJ
on the status of sustainability themes, as well as with proposing policies andprograms for advancing sustainability and deliberating on critical related matters.
(IIHFWLYHIURP-DQXDU\WKHFRPPLWWHHLVFKDLUHGE\WKHSUHVLGHQW,Q-DQXDU\',&HVWDEOLVKHGWKH6XVWDLQDELOLW\6WUDWHJ\:RUNLQJ*URXS
which is responsible for formulating and advancing the implementation of
concrete strategies for promoting sustainability.

([HFXWLYH9LFH3UHVLGHQW+HDGRIWKH)LQDQFHDQG$FFRXQWLQJ8QLW+HDGRI
WKH&RUSRUDWH6WUDWHJ\8QLW+HDGRIWKH*HQHUDO$IIDLUVDQG/HJDO8QLW+HDG
RIWKH(6*8QLW3UHVLGHQWVRIWKHEXVLQHVVJURXSV+HDGRIWKH3XUFKDVLQJ
DQG/RJLVWLFV ,QIRUPDWLRQ6\VWHPV8QLW*HQHUDOPDQDJHUVRIWKHSURGXFWGLYLVLRQV*HQHUDO0DQDJHURIWKH3URGXFWLRQ0DQDJHPHQW8QLW*HQHUDO
0DQDJHURIWKH7HFKQLFDO0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH5 '
0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUV*HQHUDO0DQDJHURIWKH&RUSRUDWH3ODQQLQJ'HSDUWPHQW&(2VRIUHJLRQDOKHDGTXDUWHUVDQG0HPEHUVRIWKH$XGLW 6XSHUYLVRU\%RDUG
As of May 2020żFormulates Groupwide targets and activity plansżDeliberates medium-term policies and key sustainability–related mattersżEvaluates sustainability initiatives

Board of Directors

Sustainability Committee
Sustainability
Strategy
Working Group

Sustainability
Working Group

President and CEO

Departments/
divisions in chargeżFormulates practical activity plansżPromotes sustainability themes

Sustainability
Department

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

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

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

Applying the Ten Principles of the UNGC
The DIC Group Code of Business Conduct conforms with the
7HQ3ULQFLSOHVRIWKH81*&7KH*URXSLVFDSLWDOL]LQJRQLWV
participation in this program to advance its operations around theworld, while at the same time giving ever-greater consideration
to the environment and human rights, with the aim of ensuring
sustainability for global society.

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

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

3ULQFLSOH

Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2

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

Principle 3

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

3ULQFLSOH

the elimination of all forms of forced and compulsory labour;

3ULQFLSOH

the effective abolition of child labour; andPrinciple 6

the elimination of discrimination in respect of
employment and occupation.
Businesses should support a precautionary approach toenvironmental challenges;
undertake initiatives to promote greater environmental
responsibility; andencourage the development and diffusion ofenvironmentally-friendly technologies.
Businesses should work against corruption in all its forms,
LQFOXGLQJH[WRUWLRQDQGEULEHU\Principle 7

Environment

3ULQFLSOH
3ULQFLSOH

Anti-corruption

DIC Report 2020

48

3ULQFLSOHThemes

DIC Sustainability Themes

Relevant UN SDG Icons

Business models that respond tosocial imperatives

Themes that
demonstrate unique
FDSDELOLWLHV $SDGs

Goals 8, 9 and 11

SDGs

Goals 9 and 12

SDGs

Goals 3 and 4

SDGs

Goal 17

SDGs

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

SDGs

Goals 3, 4, 5, 8 and 10

SDGs

Goal 12

SDGs

Goal 16

New technology development andvalue creation

Harmony with the community andsocial contributions

Communication with stakeholders

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

Sustainable procurement

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

The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHU
DSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH
$JHQGDIRU6XVWDLQDEOH'HYHORSPHQW´ODWHUVXPPDUL]HG
as the Sustainable Development Goals (SDGs), was
DGRSWHG ZLWK WKH SDUWLFLSDWLRQ RI PRUH WKDQ  81
member states. The agenda, which succeeded the
0LOOHQQLXP'HYHORSPHQW*RDOV 0'*V HQFRPSDVVHVJRDOVDQGWDUJHWV$OO81PHPEHUVWDWHVDUHH[SHFWHG
WR PRELOL]H HIIRUWV WR DWWDLQ WKH  JRDOV HVVHQWLDO WR
sustainable development for the planet, by 2030. The DIC
Group pledges to contribute through its business activities
to the success of the SDGs.

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

DIC Report 2020

49

Materiality Analysis
Identifying Priority Materiality Themes*XLGHGE\LWV',&PHGLXPWHUPPDQDJHPHQWSODQODXQFKHGLQ¿VFDO\HDUWKH',&*URXSRQFHDJDLQDEVWUDFWHGDQGDQDO\]HGPDWHULDOLVVXHVWKDWLVLVVXHVZLWKWKHSRWHQWLDOWRQHJDWLYHO\DIIHFWLWVSHUIRUPDQFHIURPZKLFKLWLGHQWL¿HGIRXUWKHPHVRISULPDU\LPSRUWDQFHWRWKH*URXS
which it designates priority materiality themes.

The DIC Group’s Materiality Matrix
Strengthening of partnerships
Reduction of environmental impact(emissions into air and water)●
Digital transformation●
Food safety●
Response to a circular economy●
Communication with customers and markets●
Response to pandemics●●

Importance to stakeholders

Very
high

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

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

●

●

●

●

●

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

High
High

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

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

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

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

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

Very highImportance to DIC Group businesses

Process for Abstracting Material Issues
Members of the Sustainability Committee and its various working groups, site general managers and senior management from Group companies
DURXQGWKHZRUOGDVVHVVHGDEVWUDFWHGLVVXHVEDVHGRQDPRQJRWKHUVWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHVVRFLDOLPSHUDWLYHVULVNPDQDJHPHQWDQGLVVXHVGHOLQHDWHGLQ',&%DVHGRQWKHUHVXOWVRIWKLVSURFHVVDQGRIH[WHQVLYHVXEVHTXHQWGHOLEHUDWLRQVLVVXHVRISULPDU\importance were determined.

Priority Materiality Themes
1

Transformation to a sustainable business structure

Reason for
identification

Shifting from businesses that are vulnerable to changes in the macroenvironment to more differentiated high-value-added businesses is essential. There is also aneed to shift to businesses that create social value, i.e., businesses that take into account factors such as value to customers and markets, as well as sustainability.

Targets/KPIs

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EHQH¿WVRIHDFKPHDVXUHRQDUHJXODUEDVLVXVLQJWKH3'&$F\FOH

Status0HDVXUHVIRUPXODWHGIRU¿VFDO\HDUZHUHLPSOHPHQWHG,Q¿VFDO\HDUFRQVLGHUDWLRQZLOOEHJLYHQWRWKHIXUWKHUFRQFHQWUDWLRQRIUHVRXUFHVLQ
PDUNHWVH[SHFWHGWRVHHIXUWKHUJURZWKZLWKUHJDUGWRPHGLXPDQGORQJWHUPPDUNHWWUHQGVDIC Report 202050

2 Product stewardship

Reason for
identification&ROODERUDWLRQZLWKRWKHULQGXVWULHVZLOOEHLQFUHDVLQJO\LPSRUWDQWWRWKHDSSURSULDWHPDQDJHPHQWRIFKHPLFDOVRYHUWKHLUHQWLUHOLIHF\FOHV5HFRJQL]LQJWKDWthe creation of a global operating system that facilitates the disclosure of product safety information and ensures smooth communication with customers is thefoundation of product stewardship*. DIC has established a chemical substance information management system that facilitates the management of chemical
VXEVWDQFHLQIRUPDWLRQDQGKDVEHJXQXVLQJDSURSULHWDU\VXVWDLQDELOLW\LQGH[RQHSXUSRVHRIZKLFKLVWRHYDOXDWHLWVHIIRUWVWRPLQLPL]HWKHHQYLURQPHQWDO
impact of products from the design stage.

Targets/KPIs

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 D )LVFDO\HDU%HJLQXVLQJWKHQHZFKHPLFDOVXEVWDQFHLQIRUPDWLRQPDQDJHPHQWV\VWHPDW',&*URXSFRPSDQLHVLQ-DSDQ E )LVFDO\HDU([SDQGGHSOR\PHQWWRRYHUVHDV*URXSFRPSDQLHVRWKHUWKDQ6XQ&KHPLFDO
&RPSOHWHDQGLQWURGXFHWKHSURSULHWDU\VXVWDLQDELOLW\LQGH[ )RUPRUHLQIRUPDWLRQSOHDVHVHHSDJH D )LVFDO\HDU%HJLQXVHDW',&RQDWULDOEDVLV E )LVFDO\HDU3URPRWHIXOOVFDOHGHSOR\PHQWDW*URXSFRPSDQLHVStatus,PSOHPHQWDWLRQRIWKH*&,3,Q¿VFDO\HDUDSURMHFWWHDPZDVFUHDWHGDQGHIIRUWVWRUHYLHZEXVLQHVVSURFHVVHVDQGGH¿QHFRQGLWLRQVIRUQHZSURFHVVHVFRPPHQFHG
&RPSOHWLRQDQGLQWURGXFWLRQRIDSURSULHWDU\VXVWDLQDELOLW\LQGH[
Individual categories for reduction of environmental impact and contribution to markets were determined and parameters were created.

3URGXFWVWHZDUGVKLSLVDSKLORVRSK\WKDWHPSKDVL]HVDVVHVVLQJSURGXFWVSHFL¿F(6+ULVNVDQGVKDULQJ¿QGLQJVWRJHWKHUZLWKLQIRUPDWLRQRQDSSURSULDWHKDQGOLQJZLWKVWDNHKROGHUVZLWKWKHDLPRI UHGXFLQJWKH(6+LPSDFWRISURGXFWVRYHUWKHLUHQWLUHOLIHF\FOHVLHIURPWKHSURFXUHPHQWRIUDZPDWHULDOVWKURXJKSURGXFWLRQVDOHDQGGLVSRVDO

3

Response to climate change

Reason for
identification

7KH',&*URXSUHFRJQL]HVWKDWUHVSRQGLQJWRFOLPDWHFKDQJHLVLQFUHDVLQJO\LPSRUWDQWWRDFRPSDQ\¶VDELOLW\WRFRQGXFWEXVLQHVVDQGZLOOZRUNWRUHGXFH&22
HPLVVLRQVDWWULEXWDEOHWRSURGXFWLRQSURPRWHORZFDUERQEXVLQHVVHVDQGVDWLVI\7&)'UHTXLUHPHQWV

Targets/KPIs

5HGXFWLRQLQ&22 emissions attributable to production: IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
 6FRSH6FRSHUHGXFWLRQRYHUWKHWKUHH\HDUVRI',&
2. Promotion of low-carbon businesses

LQFUHDVHLQVDOHVIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU

5HVSRQVHWRWKH7&)'&RQGXFWVFHQDULRDQDO\VLVDQGGLVFORVHLQOLQHZLWKWKHUHFRPPHQGDWLRQVRIWKH7&)'+HOSPLQLPL]HDQGUHVSRQGWRFOLPDWHFKDQJH
1RWH&UHDWLRQRIDQHQHUJ\VDYLQJDQGGHFDUERQL]DWLRQIUDPHZRUN→ Introduction of internal carbon pricing and strengthening of efforts to address Scope 3 emissions

Status3
4

To achieve its target for reducing CO 2HPLVVLRQVWKH',&*URXSLPSOHPHQWVPRUHWKDQLQLWLDWLYHVDQQXDOO\DWVLWHVDQGLVLQYHVWLQJDFWLYHO\LQUHQHZDEOHHQHUJ\DWVLWHVLQ-DSDQDQGRYHUVHDV&2 2HPLVVLRQVDUHFXUUHQWO\GHFOLQLQJDWDSDFHWKDWH[FHHGVWDUJHWVDWVLWHVLQ-DSDQDQG
RYHUVHDVZLWK¿VFDO\HDUHPLVVLRQVGRZQDSSUR[LPDWHO\IURPWKH¿VFDO\HDUOHYHO:RUNLQJJURXSVEHJDQFRQGXFWHGVFHQDULRDQDO\VLVLQOLQHZLWKWKH7&)'LQ¿VFDO\HDUDQGZLOOUHSRUWWKHLU¿QGLQJVLQWKH',&5HSRUWLQ¿VFDO\HDU,Q¿VFDO\HDUWKH*URXSEHJDQFRQVLGHULQJWKHLQWURGXFWLRQRILQWHUQDOFDUERQSULFLQJ DV\VWHPIRUSODFLQJDPRQHWDU\YDOXHRQCO2HPLVVLRQVZKLFKFDQWKHQEHIDFWRUHGLQWRHVWLPDWHVRIHFRQRPLFULVNDQGWKHEHQH¿WVRIHPLVVLRQVUHGXFWLRQLQLWLDWLYHV PDNLQJLQYHVWPHQW
decisions easier.

Efforts to strengthen product development capabilities and create new businesses

Reason for
identification

7KH',&*URXSYLHZVDUHDVDWWKHLQWHUVHFWLRQRI(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHVDQGLWVFRUHFRPSHWHQFLHVDQGQHZEXVLQHVVHVWKDWFRQWULEXWHWRWKH
resolution of as priorities.

Targets/KPIs

2SHUDWLQJLQFRPHRIELOOLRQLQ¿VFDO\HDU

Status,Q¿VFDO\HDU',&LQWHJUDWHGLWVRZQSRO\PHUGHVLJQDQGRWKHUEDVLFWHFKQRORJLHVZLWKH[WHUQDOSURFHVVLQJWHFKQRORJLHVWRGHYHORSDQGODXQFKDQ
LQQRYDWLYHVROYHQWIUHHSDFNDJHODPLQDWLRQV\VWHPWKDWLVH[SHFWHGWRFRQWULEXWHWRWKHUHGXFWLRQRICO2 emissions.

DIC Report 202051

Support for the TCFDIn May 2019, the DIC Group declared its support for the Task Force on Climate-related Financial Disclosures (TCFD). Recognizing climate change as a critical factor
affecting its businesses, the Group pledges to disclose related information in line with TCFD recommendations going forward.

| Disclosures in Line with TCFD Recommendations:LWKWKHDLPRIKHOSLQJLQVWLWXWLRQDOLQYHVWRUVJUDVSFOLPDWHUHODWHGULVNVDQGRSSRUWXQLWLHVDQGPDNHLQYHVWPHQWGHFLVLRQVWKH7&)'KDVVWUXFWXUHGLWVUHFRPPHQGDWLRQVDURXQGIRXUWKHPDWLFDUHDVWKDWUHSUHVHQWWKHFRUHHOHPHQWVRIRUJDQL]DWLRQDOPDQDJHPHQW²JRYHUQDQFHVWUDWHJ\ULVNPDQDJHPHQWDQGPHWULFVand targets.
+DYLQJDFNQRZOHGJHGWKHGLVFORVXUHRILQIRUPDWLRQRQHIIRUWVWRDGGUHVVFOLPDWHFKDQJHDVDQLPSHUDWLYHIRUFRPSDQLHVWRGD\WKH',&*URXSKDVUHVROYHGWR
GRVRLQOLQHZLWKWKH7&)'¶VUHFRPPHQGDWLRQV$FFRUGLQJO\WKH*URXSLVHQKDQFLQJLWVHIIRUWVWRUHVSRQGDSSURSULDWHO\WRULVNVDQGFDSLWDOL]HRQRSSRUWXQLWLHV
DVVRFLDWHGZLWKFOLPDWHFKDQJHZLWKWKHREMHFWLYHRIHDUQLQJWKHWUXVWRIVWDNHKROGHUVWKURXJKLPSURYHGUHVLOLHQFHDQGWKHSURDFWLYHGLVVHPLQDWLRQRILQIRUPDWLRQTCFD Recommendations for Financial Disclosures
Governance

Strategy$FWXDODQGSRWHQWLDOLPSDFWVRIFOLPDWH
*RYHUQDQFHDURXQGFOLPDWHUHODWHGULVNV UHODWHG ULVNV DQG RSSRUWXQLWLHV RQ
and opportunities
EXVLQHVVHV VWUDWHJ\ DQG ILQDQFLDOplanning
1

Risk Management

Metrics and targets

3URFHVVHVXVHGWRLGHQWLI\DVVHVVDQGPDQDJHFOLPDWHUHODWHGULVNV

0HWULFVDQGWDUJHWVXVHGWRDVVHVVDQGPDQDJHUHOHYDQWFOLPDWHUHODWHGULVNVDQGRSSRUWXQLWLHV

Governance

7KH',&*URXSUHFRJQL]HVFOLPDWHFKDQJHDVDNH\PDQDJHPHQWFKDOOHQJH,PSRUWDQWPDWWHUVLQFOXGLQJWKHVHWWLQJRIPHGLXPDQGORQJWHUPWDUJHWVIRUWKHUHGXFWLRQRI&2
HPLVVLRQVDUHGHOLEHUDWHGDQGGHWHUPLQHGE\WKH6XVWDLQDELOLW\&RPPLWWHHZKLFKPHHWVDPLQLPXPRIWKUHHWLPHVDQQXDOO\DQGDQVZHUVGLUHFWO\WRWKHSUHVLGHQWDQG&(2
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'LUHFWRUVRQDOORILWVGHOLEHUDWLRQV $V\VWHPLVWKXVLQSODFHWKDWHQVXUHVDSSURSULDWHVXSHUYLVLRQRIWKH6XVWDLQDELOLW\&RPPLWWHHLVSURYLGHGWKH%RDUGRI'LUHFWRUV7RDSSURSULDWHO\DVVHVVDQGPDQDJHFOLPDWHFKDQJH±UHODWHGULVNVDQGRSSRUWXQLWLHVWKHUHE\HQVXULQJWKHHIIHFWLYHPDQDJHPHQWRILWVRSHUDWLRQVWKH6XVWDLQDELOLW\&RPPLWWHHFRQVLVWVRIWKHSUHVLGHQWDQG&(2WKHJHQHUDOPDQDJHUVRIWKH3URGXFWLRQ0DQDJHPHQW8QLWDQG7HFKQLFDO0DQDJHPHQW8QLWDQGWKHKHDGVRIWKH&RUSRUDWH
6WUDWHJ\8QLW*HQHUDO$IIDLUVDQG/HJDO8QLW)LQDQFHDQG$FFRXQWLQJ8QLWDQG(6*8QLWDVZHOODVWKHSUHVLGHQWVRIWKHEXVLQHVVJURXSVDQGWKHJHQHUDOPDQDJHUVRIWKH
SURGXFWGLYLVLRQVAs of January 2020żFormulates Groupwide targets and activity plansżDeliberates medium-term policies and sustainability–related mattersżEvaluates sustainability initiatives

Board of Directors

Sustainability Committee

Sustainability
Working Group

President and CEO

Departments/
divisions in chargeżFormulates practical activity plansżPromotes sustainability themes

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

Sustainability themes
Principal Issues Deliberated by the Sustainability Committee in Recent Years
Fiscal year

Issues deliberated

2018

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・6HWWLQJRIWDUJHWIRUWKHUHGXFWLRQRI&2 emissions
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2019

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・$QQXDOVXVWDLQDELOLW\DFWLYLW\SODQVDQG.3,VIRU¿VFDO\HDU
・Report on progress of efforts to determine priority materiality themes

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DIC Report 202052

Support for the TCFD

2

Strategy',&LVSURPRWLQJVXVWDLQDEOHEXVLQHVVVWUDWHJLHVUHFRJQL]LQJWKHLPSRUWDQFHRIULVNVDQGRSSRUWXQLWLHVDVVRFLDWHGZLWKFOLPDWHFKDQJH%HFDXVHWKHLPSDFWVRIFOLPDWHFKDQJH
DUHOLNHO\WRVXUIDFHRYHUWKHPHGLXPWRORQJWHUPWKH&RPSDQ\LVZRUNLQJWRHQKDQFHLWVXQGHUVWDQGLQJRIWKHSULQFLSDOFOLPDWHUHODWHGULVNVDQGRSSRUWXQLWLHV WUDQVLWLRQDVZHOODVSK\VLFDO WKDWDUHOLNHO\WRKDYHD¿QDQFLDOLPSDFWRYHUWKHPHGLXPWRORQJWHUP',&KDVFRPPHQFHGVFHQDULRDQDO\VLVXVLQJPXOWLSOHFOLPDWHFKDQJHVFHQDULRVZLWK¿VFDO\HDUDVWKHWDUJHW\HDU7KURXJKWKLVSURFHVVWKH&RPSDQ\ZLOOZRUNWRUDLVHLWVDZDUHQHVVRIIRUHVHHDEOHRSSRUWXQLWLHVDQGULVNVIURPDPHGLXPWRORQJWHUPSHUVSHFWLYHDQGDWWKHVDPHWLPHWRIRUPXODWHDQGH[HFXWHHIIHFWLYHVWUDWHJLHVRQDQDSSURSULDWHWLPHOLQH

Principal Climate-Related Risks
Type

Description

Emerging regulations (Transition)

7KHUHLVDULVNWKDWHPHUJLQJUHJXODWLRQV HJWKHLQWURGXFWLRQRIFDUERQSULFLQJ UHVXOWLQJIURPFOLPDWHFKDQJHZLOOLQFUHDVHGLUHFWFRVWVDQGLPSDFWRQWKHRSHUDWLQJHQYLURQPHQW
SUR¿WDELOLW\ HJIDFLOLW\FRVWVDQGUDZPDWHULDOVSULFHV 

Technology (Transition)$PLGLQQRYDWLRQVLQFOLPDWHFKDQJH±UHODWHGWHFKQRORJLHVWKHUHLVDULVNWKDWUHOLDQFHH[FOXVLYHO\RQH[LVWLQJWHFKQRORJLHVZLOOUHVXOWLQSURGXFWVDQGVHUYLFHVEHFRPLQJREVROHWHDQG
GHPDQGGHFOLQLQJMarket (Transition)

7KHUHLVDULVNWKDWDQLQVXI¿FLHQWJUDVSRIHYROYLQJFXVWRPHUFRQVXPHUSUHIHUHQFHV²HJVKLIWWRORZFDUERQEXVLQHVVPRGHOVFKDQFHWKDWFHUWDLQH[LVWLQJEXVLQHVVHVZLOOEHDYRLGHG²ZLOOPHDQWKHORVVRIPDUNHWRSSRUWXQLWLHV

Reputation (Transition),I',&¶VDWWLWXGHWRZDUGDQGDELOLW\WRUHVSRQGWRFOLPDWHFKDQJHDUHVHHQE\H[WHUQDOREVHUYHUVDVLQVXI¿FLHQWIRUDPDQXIDFWXUHURI¿QHFKHPLFDOVWKHUHLVDULVNWKDWLWVUHSXWDWLRQZLOOVXIIHUDIIHFWLQJLWVPDLQWHQDQFHRIUHODWLRQVKLSVZLWKFXVWRPHUV

Acute (Physical)

6KRXOGH[WUHPHZHDWKHUHYHQWV HJUDSLGZHDWKHUFKDQJHVVXFKDVW\SKRRQVDQGKXUULFDQHVDQGQDWXUDOGLVDVWHUV EHFRPHPRUHIUHTXHQWWKHUHLVDULVNWKDWWKHRSHUDWLRQVRIFRDVWDOSURGXFWLRQVLWHVZLOOEHDIIHFWHG

Chronic (Physical),IWHPSHUDWXUHVUHPDLQSHUVLVWHQWO\KLJKWKHUHDUHULVNVRILQFUHDVHGSURGXFWLRQVLWHPDLQWHQDQFHDQGRSHUDWLQJFRVWV HJFRVWVIRUIDFLOLW\PDLQWHQDQFHDQGFRROLQJ DQG
damage to health.

Upstream (Physical)

7KHUHLVDULVNRIXQFHUWDLQW\UHJDUGLQJWKHVXSSO\RIPRQRSRO\PDWHULDOV PDWHULDOVRIZKLFKVXSSOLHVDUHFRQFHQWUDWHGDPRQJVSHFL¿FVXSSOLHUV DQG%&3ULVNV HJLPSDFW
RIIDLOXUHRIUDZPDWHULDOVVXSSOLHUVWRUHVSRQGWRFOLPDWHFKDQJH 

Principal Climate-Related Opportunities
Type

Description

Emerging regulations (Transition):LWKHPHUJLQJUHJXODWLRQVWKHUHLVDQRSSRUWXQLW\WRHVWDEOLVKQHZEXVLQHVVPRGHOVWKDWGHPRQVWUDWHWKHVXSHULRULW\RI',&¶VEXVLQHVVHV

Technology (Transition)

7HFKQRORJLFDOLQQRYDWLRQSURYLGHVRSSRUWXQLWLHVWRFUHDWHQHZORZFDUERQGHFDUERQL]HGEXVLQHVVHVWKDWUHVSRQGWRFOLPDWHFKDQJHDQGWRLQFUHDVHSURGXFWFRVWFRPSHWLWLYHQHVVWKURXJKWKHXVHRIUHYROXWLRQDU\WHFKQRORJLHVWRLPSURYHSURFHVVHV

Market (Transition/physical)$FFXUDWHO\JUDVSLQJHYROYLQJFXVWRPHUFRQVXPHUSUHIHUHQFHV²HJVKLIWWRORZFDUERQEXVLQHVVPRGHOVFKDQFHWKDWFHUWDLQH[LVWLQJEXVLQHVVHVZLOOEHDYRLGHG²SURYLGHVWKHRSSRUWXQLW\WRGHYHORSQHZSURGXFWVDQGVHUYLFHVWKDWDQWLFLSDWHOLIHVW\OHFKDQJHV

Upstream/downstream(Transition/physical)$GGUHVVLQJFOLPDWHFKDQJH DGDSWDWLRQDQGPLWLJDWLRQ RYHUSURGXFWV¶HQWLUHOLIHF\FOHVWKURXJKRUJDQLFFROODERUDWLRQZLWKFXVWRPHUVDQGVXSSOLHUVSURYLGHVWKHRSSRUWXQLW\WRFUHDWHQHZEXVLQHVVHVDQGV\VWHPV

Scenario Analysis
6FHQDULRDQDO\VLVLVSRVLWLRQHGDVWKHPRVWLPSRUWDQWFRPSRQHQWRIWKHVWUDWHJ\IRUPXODWLRQSRUWLRQRIWKH7&)'DQGPDNHVLWSRVVLEOHWRHYDOXDWHFOLPDWHFKDQJHDQGLWVLPSDFWRQEXVLQHVVXVLQJPXOWLSOHIXWXUHVFHQDULRVDVVHVVULVNVDQGRSSRUWXQLWLHVDQGFRQVLGHUFRXQWHUPHDVXUHVWKDWLPSURYHUHVLOLHQFH
9DULRXVLQWHUQDWLRQDORUJDQL]DWLRQVKDYHSUHSDUHGFOLPDWHFKDQJHVFHQDULRV7KH',&*URXSXVHVWKH&DQG&VFHQDULRVDVRXWOLQHGEHORZZKLOHDOVRUHIHUHQFLQJYDULRXVRWKHUVDQGKDVFRQGXFWHGVFHQDULRDQDO\VLVIRUDOORILWVSULQFLSDOEXVLQHVVHVScenario information

2ºC Scenario

4ºC Scenario

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5HSUHVHQWDWLYH&RQFHQWUDWLRQ3DWKZD\ 5&3 ,PSOLFDWLRQVIRUVRFLHW\,QWKH&VFHQDULRWKHLPSOHPHQWDWLRQRIEROGSROLFLHVDQGLQQRYDWLRQVNHHSVWKHLQFUHDVHLQJOREDOPHDQWHPSHUDWXUHRYHUWKHFRXUVHRIWKHVWFHQWXU\WREHORZ&DERYHSUHLQGXVWULDOOHYHOVIDFLOLWDWLQJVXVWDLQDEOHGHYHORSPHQW,QWKH&VFHQDULRWKHJOREDOPHDQWHPSHUDWXUHRYHUWKHFRXUVHRI
WKHVWFHQWXU\LQFUHDVHVWR&DERYHSUHLQGXVWULDOOHYHOVZLWKKRWWHU
WHPSHUDWXUHVSK\VLFDOO\WUDQVIRUPLQJWKHEXVLQHVVHQYLURQPHQW

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DIC Report 202053

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Results of Scenario Analysis

2SSRUWXQLW\

Implications for society andthe business environment

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6WUHQJWKHQLQJRISROLFLHVand regulations

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lifestyles attributable to risingtemperatures

Risk and opportunity assessment

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GHPDQGIRUSODVWLFDOWHUQDWLYHVZLOOPHDQRQO\DQHJOLJLEOHLPSDFWRQPDWHULDOVVXLWDEOHIRUDSSOLFDWLRQVRWKHUWKDQSODVWLFV,QFUHDVH LQ SURGXFWLRQ DQG VDOHV RI
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opportunities.

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Support for the TCFD

Scenario Analysis: A Message from the Head of the ESG Unit
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3

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

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Environmental Targets Set Forth in DIC111

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

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

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55

Compliance

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Objectives of initiatives

Goals for fiscal year 2019

Achievements in fiscal year 2019

Evaluation

Goals for fiscal year 2020

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| The DIC Group Code of Business Conduct
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10 Principles Essential to Professional Conduct❶ <RXU5LJKWVDVDQ(PSOR\HH5HVSHFW'LJQLW\3ULYDF\❻ <RXU5HODWLRQVKLSZLWK&XVWRPHUV6XSSOLHUVDQG([WHUQDO7KLUG3DUWLHV❷ (QYLURQPHQW6DIHW\and Health❼ 0RQH\/DXQGHULQJDQG$QWL7HUURULVP❸ <RXU5HVSRQVLELOLW\WR$YRLG3RWHQWLDO&RQÀLFWVRI,QWHUHVWDQGWR3URWHFW*URXS3URSHUW\❽ )RUFHG/DERU&KLOG/DERU&RQÀLFW0LQHUDOV❹ $QWL&RUUXSWLRQDQG$QWL%ULEHU\3ROLF\❾ ,QVLGHU7UDGLQJ❺ <RXU5HODWLRQVKLSZLWK*RYHUQPHQWVDQG*RYHUQPHQW2I¿FLDOV❿ 3URSHU$FFRXQWLQJDQG,QWHUQDO&RQWUROV5HODWLQJWR)LQDQFLDO5HSRUWLQJ| Initiatives to Promote Compliance
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DIC Report 2020

56

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Sun Chemical
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Director in charge of compliance, Legal Department
External legal firm

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Whistle-Blowing Committee

Whistleblowing
hotlines

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Whistle-Blowing Committee

General manager, Legal Department,
CEO, CFO| Antitrust and Anti-Corruption Legislation
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DIC Report 2020

57

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Japan

Overseas¥5,281

Total¥7,869（Millions of yen）

¥2,588

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

Goals for fiscal year 2019

Achievements in fiscal year 2019 Evaluation
・Efforts to create a global crisis
management configuration were
strengthened. In Japan, the ability oftask forces to respond in the event ofa crisis was reinforced, thereby
fortifying crisis response capabilities.

・ Strengthen efforts to create a global crisis management configuration.

Ensure the continuity of
DIC Group businesses.

Global : Promote the development of safety measures overseas through local
assessments and other efforts. Work to collect global risk information andaccumulate know-how.
Japan: Fortify crisis response capabilities by reinforcing the ability of task forces to
respond in the event of a crisis.
・ Revise BCPs periodically and reinforce cooperation among product divisions and sites.
Global and Japan: Revise BCPs annually and encourage the ongoing sharing of
information related to BCP initiatives. Promote various awareness-enhancing
measures designed to strengthen cooperation among product divisions and sites.
・ Reinforce awareness of the basic risk management policy and the risk management system.
Global and Japan: Encourage awareness of the risk management policy and the risk
management system. Continue to support efforts to improve the risk management
system and identify priority risks and formulate/implement response measures.
Support efforts by Group companies to promote risk management.

1. Periodically revise BCPs andreinforce/expand cooperation amongproduct divisions and sites.

・The periodic revision of BCPs was

conducted as scheduled andcooperation among product divisions
and sites was reinforced. In Japan, theannual revision of BCPs was carried out.

Goals for fiscal year 2020★★

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

・Training and seminars wereconducted to reinforce awarenessof the basic risk management
policy.

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

Basic sustainability policy
Risk management policy

Rules for managing
emergency supplies

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

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

Task force manuals

BCM system manuals

Production division–specificGroup company–specific

Product division
BCP manuals

Group company
BCP manuals| BCM in Fiscal Year 2019
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DIC Report 2020

58

BCM and Crisis Management| Preventing BCPs from Becoming Empty Formalities
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7DVNIRUFHPDSEDVHGVLPXODWLRQH[HUFLVH%&3WUDLQLQJDWFRUSRUDWHKHDGTXDUWHUV| Crisis Management
Efforts to Reinforce Safety Measures Overseas
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DIC Report 2020

59

6DIHW\KDQGERRNIRU&RPSDQ\
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Comment We are working to realize truly functional initial response and business continuity support systems.
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FRUSRUDWHKHDGTXDUWHUV¶FDIHWHULD| DIC Corporate Headquarters’ Emergency Pocket Books$SSUR[LPDWHO\HPSOR\HHVRIWKHSDUHQWFRPSDQ\DQGYDULRXVGRPHVWLF*URXSFRPSDQLHVZRUNDW
WKHFRUSRUDWHKHDGTXDUWHUVLQ7RN\R',&KDVSUHSDUHGEmergency Pocket BooksSRFNHWVL]HGERRNOHWVWKDW SURYLGH LQVWUXFWLRQV RQ DSSURSULDWH DFWLRQV²ERWK DXWRQRPRXV DQG LQ FRRSHUDWLRQ ZLWK RWKHUV²
LQWKHHYHQWRIDGLVDVWHUIRUGLVWULEXWLRQWRWKHVHHPSOR\HHVDQGWKHLUIDPLOLHV7KHERRNOHWVDOVRGHWDLOFRUSRUDWHKHDGTXDUWHUV¶RYHUDOOHPHUJHQF\UHVSRQVHIUDPHZRUNDQGWKHUHVSRQVLELOLWLHVRILQGLYLGXDOIORRUVDQGGHSDUWPHQWVLQDQHPHUJHQF\VLWXDWLRQDVZHOODVSURYLGHVSDFHIRUHPSOR\HHVDQGWKHLUIDPLOLHVWRSURYLGHFRQWDFWLQIRUPDWLRQ7KHFRPSDFWVL]HRIWKHERRNOHWVHQVXUHVSRUWDELOLW\Emergency Pocket Books| Community Efforts to Cope with Major Disasters-DSDQZKLFKLVRQHRIWKHPRVWHDUWKTXDNHSURQHFRXQWULHVLQWKHZRUOGKDVEHHQVWUXFNPXOWLSOHWLPHVE\GHYDVWDWLQJVHLVPLFDFWLYLW\$VDFRQVHTXHQFHHQVXULQJHDUWKTXDNHUHDGLQHVVWKDWLVWKHDELOLW\WRSUHYHQWDQGPLWLJDWHWKHLPSDFWRIHDUWKTXDNHVLVUHFRJQL]HGDVDFULWLFDO
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EXLOGLQJV(YHU\\HDUDFRPSUHKHQVLYHFRPPXQLW\GLVDVWHUGULOOLVFRQGXFWHGRQDQHPSW\ORWQHDUWKH',&%XLOGLQJ$SSUR[LPDWHO\SHRSOHWRRNSDUWLQWKHGULOOKHOGLQ6HSWHPEHU*XLGHGE\SHUVRQQHOIURPWKH1LKRQEDVKL)LUH6WDWLRQSDUWLFLSDQWVUHFHLYHGWUDLQLQJLQILUVWDLG $('XVH
DQGKHPRVWDVLV SUDFWLFHGXVLQJILUHK\GUDQWVWRSXWRXWILUHVDQGWRXUHGWKH7RN\R)LUH'HSDUWPHQW¶VYLUWXDOUHDOLW\ 95 ±EDVHGGLVDVWHUSUHYHQWLRQWUDLQLQJDQGHDUWKTXDNHVLPXODWLRQYHKLFOHVWKURXJKZKLFKWKH\H[SHULHQFHGVLPXODWHGHDUWKTXDNHVDQGILUHVDQGOHDUQHGHIIHFWLYHHPHUJHQF\UHVFXHDQGILUHH[WLQJXLVKLQJWHFKQLTXHVDIC Report 2020

60

BCM and Crisis Management

The DIC Building, designed with state-of-the-art earthquake-resistant technologies, has been designated as a temporary shelter for people
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a community disaster drill| Responding to Pandemics',&SUHSDUHVSURGXFWVSHFLILFSDQGHPLF%&3VLQQRQHPHUJHQF\WLPHVWRJXDUDQWHHLWLVIXOO\SUHSDUHGWRUHVSRQGWRSDQGHPLFVZKHQWKH\RFFXU7RHQVXUHSUHSDUHGQHVVIRUWKHFRQFXUUHQWLQIHFWLRQRIPXOWLSOHHPSOR\HHVWKH&RPSDQ\KDVDOVRGHYHORSHGUHVSRQVHSODQVIRULQGLYLGXDOSURGXFWLRQOLQHVDWHDFKRILWVSURGXFWLRQVLWHV,QUHVSRQVHWRWKHHPHUJHQFHRI&29,'LQ-DQXDU\',&KDVIRFXVHGRQFDUU\LQJRXWDFWLRQVGHVLJQHGWRKHOSWKZDUWWKHIXUWKHUVSUHDGRIWKHYLUXVDQGWRSUHYHQWHPSOR\HHVIURPEHFRPLQJLQIHFWHG7KHVHLQFOXGHSURKLELWLQJEXVLQHVVWULSVZRUOGZLGHHIIHFWLYHIURP)HEUXDU\LQVWLWXWLQJ
WHOHZRUNIRUDOOHPSOR\HHVLQFOXGLQJQRUPDOO\LQHOLJLEOHWHPSRUDU\VWDIIVWDJJHULQJZRUNLQJKRXUVPDQGDWLQJHPSOR\HHVUHPDLQDWKRPHZKHQWKH\
RUDQ\RIWKHSHRSOHZLWKZKRPWKH\OLYHIHHOXQZHOODQGHQFRXUDJLQJWKHDYRLGDQFHRIPHHWLQJVDQGHYHQWVThe DIC Group remains keenly aware of the potential significant impact of risks related to pandemics and other large-scale disasters in terms of
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Information Security
Initiatives to Ensure Information Security
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Establish a global information
security framework.

Goals for fiscal year 2019・Fortify response to the expanded use ofdigital technologies.
・Create a new information infrastructure
conducive to work style reform, the further
use of mobile devices and the expansion of
global collaboration.
・Formulate and strengthen information
security rules and frameworks, provide
training and encourage awareness in amanner that responds to new information
security threats and risks.

Achievements in fiscal year 2019
・Efforts to ensure security by standardizing plant
control system networks were promoted incollaboration with production departments.
・Cloud-based security solutions were introduced
as a countermeasure against increasingly diverse
internet-based threats.
・In line with the revision of guidelines for the
management of personal information and thetightening of password rules, regulations for
managing confidential information, information
management guidelines and global guidelines for
ICT use were amended.
・E-learning focused on both information security andthe protection of personal information was provided.

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

Evaluation★★

Goals for fiscal year 2020

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

Strengthening of
measures tocombat targetedcyber attacks

Further
improvements

Response to the
expanded use ofdigital technologies

Response to the shift tocloud computing

Basic Policy on Information Security
Basic policy
Confidential information management regulations
Preparation of
response measures
Information management guidelines
Implementation proceduresInternal audits| Globally Maintaining and Enhancing Information Security
The DIC Group’s approach to information security management rests on four pillars: Regulations and guidelines, management framework, infrastructure,
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Americas and Europe.
Regulations and Guidelines
The DIC Group continues to update its Basic Policy on Information Security, created in 2010, confidential information management regulations, andinformation management guidelines regularly and as required to ensure its ability to address new security risks in a timely manner. The Group is also
implementing new regulations as appropriate in response to the increasing prevalence of digital technologies. In addition, the Group has establishedseparate rules for handling personal information and customer information in its information management guidelines, which it is working to disseminate
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The Information Security Committee meets twice annually to determine policies and procedures for information security in each area of the DIC Group’s
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management and handling of important everyday information. To ensure it is prepared in the unlikely event of an information security–related incident, theGroup has created a task force operational manual and periodically conducts training to ensure effective initial responses to incidents when they occur.

DIC Report 202062

Information Security

Infrastructure
Recognizing the importance of being prepared before and when incidents occur, and of responding promptly and appropriately in the aftermath, the DIC*URXSWDNHVGHFLVLYHVWHSVWRIRUWLI\LWVLQIRUPDWLRQVHFXULW\LQIUDVWUXFWXUH,Q¿VFDO\HDUWKHVHLQFOXGHGIRUPXODWLQJDQHZ,7LQIUDVWUXFWXUHSODQWKDW
encompasses cloud access security broker (CASB), mobile application management (MAM), endpoint detection and response (EDR), security informationand event management (SIEM) and other new technologies, based on requirements for IT, including the active use of cloud computing, the functional
evolution of smart devices, work style reform, as well as the direction of advances in these areas. During the period, the Group also sought to addressincreasingly diverse internet threats by introducing new cloud-based security solutions and expanding the use of the Windows 10 operating system, as wellas updating security systems designed to strengthen the endpoint security of other computers.
Employee Education and Training
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Comment We are promoting efforts to enhance information security in production departments.
In recent years, the rapid spread of AI and the Internet of Things (IoT) has resulted in an increasing diverse range of devices being connected
via networks. Companies have traditionally collected and analyzed a variety of data, which has enabled them to address labor shortages by
increasing factory automation, as well as to enhance the stability of product quality and increase added value. However, the momentous changes
in the environment surrounding networks for directly controlling and monitoring production facilities has also brought a dramatic increase in thedanger of cyber attacks and many companies have suffered considerable damage as a result.
7RGDWHZHKDYHVRXJKWWRSURPRWHSDUWLDORSWLPL]DWLRQRIUHVSRQVHVRQDVLWHVSHFL¿FEDVLVEXW*URXSZLGHHIIRUWVKDYHEHHQLQVXI¿FLHQWRQFHUWDLQIURQWV$JDLQVWWKLVEDFNGURSLQ6HSWHPEHUZHHVWDEOLVKHGJXLGHOLQHVIRUVHFXULW\IRUFRQWUROV\VWHPVXVHGLQSURGXFWLRQ,Q¿VFDO\HDUZHEHJDQRIIHULQJDQHOHDUQLQJSURJUDPRQFRQWUROV\VWHPVHFXULW\IRUSODQWJHQHUDOPDQDJHUVDQGJURXSPDQDJHU±OHYHOHPSOR\HHVIn addition to strengthening administration, we are collaborating with the Information Systems Unit to standardize plant control networks with theaim of ensuring safe and secure environments and transforming our plants into smart manufacturing facilities.
General Manager, Production Planning Department, DIC Corporation

Kazuyuki Okuya

Promoting Digital Transformation
Guided by its DIC111 medium-term management plan, the DIC Group is actively promoting digital transformation. Having completed preliminary preparations,
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Corporate Strategy Unit and stepped up initiatives in individual departments. Technical and production departments are promoting the use of AI technologies in
product development and efforts to improve productivity. On the technical side, AI technologies
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fast-developing novolac resin for use in the production of resists for packaging applications. In
production, AI technologies have been introduced into the manufacturing processes for someproducts to identify factors influencing quality not discernible using conventional methods.
Going forward, production departments will also begin looking at the creation of a model
factory system with the goal of realizing smart production facilities. These departments will
also seek to boost labor productivity beyond current levels by conducting remote monitoringand preventative maintenance of production equipment using sensors and apply VR andaugmented reality (AR) in new employee training and the passing on of technologies.

DIC Report 2020

63

Environment, Safety and Health (ESH)

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

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

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

DIC is a signatory to the International Council of
Chemical Associations’ Responsible Care Global Charter

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

| Responsible Care Management System
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improvements, while also conducting annual internal audits and management reviews.
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Responsible Care programs with the goal of helping achieve a society that supports efforts to address ESH-related initiatives.

DIC Report 2020

64

ESH

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Audits andreviews
conducted
bymanagement

Act

Check

Responsible Care
Initiatives
Improve

Do

Plan

Implement/
manageFormulateplans| Introduction of the DECS,Q¿VFDO\HDUWKH*URXSLQWURGXFHGWKH',&(6+'DWD&ROOHFWLRQ6\VWHP '(&6 DV\VWHPIRUUHFRUGLQJDQGVWRULQJWKLVGDWDLQWKHFORXGWR
facilitate centralized management. In addition to accelerating collection of data pertaining to environmental conservation, occupational safety and
KHDOWKDQGVDIHW\DQGGLVDVWHUSUHYHQWLRQPRUHHI¿FLHQWDQGPDNLQJLWOHVVODERULQWHQVLYHWKH'(&6ZLOOKHOSLPSURYHWKHUHOLDELOLW\RIGDWDIRU
H[WHUQDOWKLUGSDUW\YHUL¿FDWLRQLQFOXGLQJH[WHUQDODXGLWVRI5HVSRQVLEOH&DUHHIIRUWVVOICE We have introduced an information management system to enhance our Responsible Care program.
Global companies today disclose a variety of sustainability-related information, including on the environment and energy. Previously,
the Responsible Care Department would receive necessary data by email from site environmental officers, which it would thenaggregate and release. However, because DIC has regional headquarters in the PRC and the Asia–Pacific region, as well as
LWVFRUSRUDWHKHDGTXDUWHUVLQ-DSDQDQGPRUHWKDQVLWHVZRUOGZLGHWKHYROXPHRIGDWDZDVPDVVLYHDQGPDQDJHPHQWZDVFRPSOLFDWHG)RUWKLVUHDVRQZHLQWURGXFHGDFORXGEDVHGVHUYLFHIURPD-DSDQHVH,7YHQGRUDQGDGRSWHGDPHWKRGZKHUHE\Responsible Care officers at each site input data into a common database, making it easily accessible to the Responsible Care
Department, as well as by regional headquarters. This centralized data management and streamlined aggregation.
,QLQWURGXFLQJWKLVV\VWHPZHWRRNFDUHWRFDUHIXOO\H[SODLQREMHFWLYHVWR5HVSRQVLEOH&DUHRI¿FHUVDWHDFKVLWHDQGSUHSDUHGDQLOOXVWUDWHGXVHUPDQXDOLQ-DSDQHVH&KLQHVHDQG(QJOLVKVRDVWRPLQLPL]HWKHEXUGHQRQLQGLYLGXDORI¿FHUV:HDOVRGHYHORSHG
a new program and standards for data collection, making it possible to amass more detailed data than in the past. Currently, theV\VWHPLVXVHGWRFROOHFWGDWDLQOLQHZLWKHLJKWLQGLYLGXDOWKHPHVLQWKHWKUHHFDWHJRULHVRI³HQYLURQPHQW´³HQHUJ\´DQG³RFFXSDWLRQDOVDIHW\DQGKHDOWK´:HLQWHQGWRLQFUHDVHWKHQXPEHURIWKHPHVZLWKWKHDLPRIKHOSLQJWRIXUWKHUHQKDQFHWKHHIIHFWLYHQHVVRIRXU
Responsible Care program.
Assistant Manager, Safety and Environment Group, Responsible Care Department, DIC Corporation Masayuki Iwakubo| Framework for Promoting Responsible Care

Framework for Promoting Responsible Care

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

Sustainability Committee

Production
Management Unit

Technical
Management Unit

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

Product division
Individuals in charge of
Responsible Care

Product division
Individuals in charge of
Responsible CareDIC Report 2020

65

Technical

Individuals in charge of
Responsible Care

Production

Product division

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

The DIC Group’s Responsible Care Activity Plans for Fiscal Year 2019
❶ Management system

Promote compliance with laws, regulations and agreements pertaining to ESH, chemical substance management and security export
control. Make use of the PDCA cycle in promoting Responsible Care activities. Advance the creation of an information management
V\VWHP5HLQIRUFHWKH(6+PDQDJHPHQWV\VWHPVRIUHJLRQDOKHDGTXDUWHUV *UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ ❷ Occupational safety and healthIn line with the DIC Group’s fundamental objective, which remains the achievement of an accident-free workplace, set regional
WDUJHWVIRUUHGXFLQJWKHLQFLGHQFHRIRFFXSDWLRQDODFFLGHQWVLQ¿VFDO\HDU❸ Disaster prevention

Promote the horizontal deployment of lessons learned from major disasters and work to prevent the recurrence of such
accidents. With the aim of reducing process safety accidents, start calculating such accidents in accordance with International&RXQFLORI&KHPLFDO$VVRFLDWLRQV ,&&$ JXLGHOLQHV
❹ Environmental protection

With the aim of achieving the DIC global target for reducing CO2HPLVVLRQV 6FRSHDQG  IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU SURPRWHHQHUJ\VDYLQJLQLWLDWLYHVDQGWKHXVHRIORZFDUERQHOHFWULFSRZHU6WULYHWRHQVXUHDJUDVSRI&22 emissions over the
HQWLUHOLIHF\FOHRISURGXFWV 6FRSH 0DLQWDLQORZHUWKHLPSDFWRISURGXFWLRQDFWLYLWLHVRQDLUDQGZDWHUTXDOLW\6WHSXSHIIRUWVWRPDLQWDLQincrease the industrial waste recycling rate.
❺ Safety in logistics

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

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

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

| Message from the President
DIC’s president prepares a message for employees for Environment Month and National Safety Week.

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

|$FTXLVLWLRQRI&HUWLÀFDWLRQ8QGHU,62
$VRI'HFHPEHU',&*URXSFRPSDQLHVUHVSRQVLEOHIRURIWKH*URXS¶VSURGXFWLRQYROXPHKDGDFTXLUHGFHUWLILFDWLRQXQGHU
,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUHQYLURQPHQWDOPDQDJHPHQWV\VWHPV
Year

2017

2018

2019

2020 (Forecast)Acquisition rate
(%)

74

75

79

81

DIC Report 2020

66

ESH

| Principal Initiatives in Fiscal Year 2019

Initiatives in Japan,Q-DSDQDODFNRIVXFFHVVLQUHGXFLQJRFFXSDWLRQDODFFLGHQWV DQGGLVDVWHUVFRQWLQXHVWRXQGHUVFRUHWKHQHHGWRIXUWKHUUHLQIRUFH
the Group’s domestic Responsible Care framework and step up preventative measures. DIC and DIC Graphics Corporation hold GM
FRQIHUHQFHVZKLFKDUHJDWKHULQJVRI(6+RI¿FHUVIURPSULQFLSDOVLWHVZKRKDYHEHHQDSSRLQWHGJURXSPDQDJHUV *0V *0FRQIHUHQFHV
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various conferences facilitate the discussion of efforts to prevent accidents and disasters, share information on environmental challenges
and ensure common awareness of Groupwide rules.

Initiatives in the Asia–Pacific Region',&KDVLQVWDOOHG(6+FRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI(6+LQLWLDWLYHV LQ
FRXQWULHVDQGWHUULWRULHVLQWKHUHJLRQXQGHUWKHVXSHUYLVLRQRIDUHJLRQDO(6+
director in Singapore and has also dispatched an ESH manager for the region from
corporate headquarters. An Asia–Pacific region conference is held periodically,
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conference was held in November in Singapore, with participants including regional
ESH country heads, site ESH officers and regional directors and Responsible&DUHRI¿FHUVZKRPHWWRGLVFXVV(6+SROLFLHVWDUJHWVDQGFKDOOHQJHVDVZHOODVHQHUJ\VDYLQJLQYHVWPHQWVIRUWKHIROORZLQJ¿VFDO\HDU

Regional ESH Director for Asia‒Paciﬁc
Regional ESH Manager for Asia‒Paciﬁc

DIC Asia Paciﬁc Pte Ltd

ESH
country head

ESH
country head

ESH
country head

ESH
country head

ESH
country head

India

Oceania
Australia
New
ZealandThailand

Malaysia

Indonesia

Philippines
VietnamSingapore
Sri Lanka
Pakistan)UDPHZRUNIRU3URPRWLQJ(6+LQWKH$VLD²3DFLÀF5HJLRQRegional OHSAS Certification

7KH',&*URXSLQWKH$VLD±3DFL¿FUHJLRQFRPSULVHVFRPSDQLHVZLWKVLWHVLQFRXQWULHVDQGWHUULWRULHV,QDGGLWLRQWRGLYHUVHFXVWRPVand languages, a key challenge from an operations perspective is differences in awareness regarding occupational safety. To resolve suchdifferences, it was crucial for the Group to establish common occupational safety standards and work to ensure the effective implementation
thereof at all regional Group companies. DIC Asia Pacific, which oversees regional Group operations, has acquired certification under
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RFFXSDWLRQDOVDIHW\DQGKHDOWK$VRI'HFHPEHU*URXSVLWHVLQWKH$VLD±3DFL¿FUHJLRQKDGHDUQHGFHUWL¿FDWLRQXQGHUERWK,62DQG2+6$6JLYLQJLWDUHJLRQDOFHUWL¿FDWLRQUDWHRI$FTXLVLWLRQRI&HUWLÀFDWLRQ8QGHU%RWK,62DQG2+6$6 $VLD²3DFLÀF5HJLRQ
Year

2017

2018

2019

2020 (Forecast)Acquisition rate
(%)

88

88

91

100

Initiatives in Greater China
Steps have been taken recently to tighten the PRC’s environmental laws, regulations and standards. Some of the country’s standards
are now among the most world’s most rigorous. Increasingly stringent safety standards have also been applied since the explosions that
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from corporate headquarters to serve as regional ESH director and assigning ESH coordinators to oversee efforts in the southern andeastern parts of the country. Teleconferences involving pertinent corporate and regional headquarters, staff are also held regularly tofacilitate the prompt resolution of issues.
2QFHDQQXDOO\ORFDOSODQWJHQHUDOPDQDJHUVDQG(6+RI¿FHUVDQGH[HFXWLYHVIURPFRUSRUDWHKHDGTXDUWHUVLQ-DSDQPHHWIRUDUHJLRQDO
(6+DQGHQHUJ\FRQVHUYDWLRQFRQIHUHQFH,Q1RYHPEHUWKHFRQIHUHQFHZDVKHOGDW',&=KDQJMLDJDQJ&KHPLFDOVZLWKSDUWLFLSDQWVFRQ¿UPLQJWKHSURJUHVVRI5HVSRQVLEOH&DUHLQLWLDWLYHVDQGGLVFXVVLQJFKDOOHQJHVDQGIXWXUHGLUHFWLRQVDIC Report 2020

67

ESH

VOICE Our team is responsible for promoting ESH in the PRC.
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DOVRHDUQHGYDULRXVTXDOL¿FDWLRQVUHTXLUHGRILQGLYLGXDOVLQ(6+UHODWHGSRVLWLRQVLQFOXGLQJUHJLVWHUHGVHFXULW\HQJLQHHUDQGVDIHW\VWDQGDUGL]DWLRQDXGLWRUFHUWL¿FDWLRQ,Q',&=KDQJMLDJDQJ&KHPLFDOVUHFHLYHGDFRPPHQGDWLRQDVWKHWRS',&*URXSFRPSDQ\in terms of ESH management at the ninth annual ESH and energy conservation conference for DIC Group sites in the PRC, while I
received a commendation as an excellent ESH manager. These honors recognize our outstanding ESH management performance,
ZKLFKUHÀHFWVWKHHIIRUWVRIDOOHPSOR\HHVZKRKDYHZRUNHGDVRQHRYHUPDQ\\HDUVWRUHLQIRUFHFDSDELOLWLHVAs an ESH manager, I have always carried out my day-to-day responsibilities with a keen awareness of the importance of safety, paying
close attention to safety management on the front lines of production and of the importance of not overlooking near-miss incidents. I also
constantly review work procedures from the perspective of ESH with the goal of improving safety management.
Going forward, we will continue to enhance ESH by reinforcing efforts to promote awareness and training programs, as well as todeepen understanding of the philosophy of sustainability, which emphasizes safety, the environment and health. By doing so, we willseek to encourage all employees to voluntarily addresses the challenge of safety management.

ESH manager Yin Yin accepts commendation from',& &KLQD ¶VFKDLUPDQ6KLQVXNH7RVKLPD

ESH manager, DIC Zhangjiagang Chemicals Co., Ltd. Yin Yin

TOPIC
DIC (China) Conducts Training Program to Improve Safety Management Across Greater China,Q-XQH',& &KLQD ¶V(6+WHDPFRQGXFWHGDVDIHW\PDQDJHPHQWLPSURYHPHQWWUDLQLQJSURJUDPLQ*UHDWHU&KLQD7KHSURJUDPZDVDWWHQGHGE\LQGLYLGXDOVLQFOXGLQJ(6+RI¿FHUVDQGUHSUHVHQWDWLYHVRISURGXFWLRQDQGIDFLOLW\GHSDUWPHQWVIURPWKH35&DQG7DLZDQ7KHSURJUDPEHJDQZLWKWKHUHDGLQJRIDPHVVDJHSUHSDUHGE\',&¶VSUHVLGHQWDQG&(2IRUWKH35&¶VQDWLRQDOVDIHW\ZHHNDQGIRFXVHGRQWKH
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the International Organization for Standardization’s standard for occupational safety and health, in the PRC and an explanation of the standard by aresearcher in the country’s occupational safety and health management framework and an
individual involved in the standard’s creation. ESH safety trainer instruction, conducted byhighly experienced coaches, emphasized training skills, the preparation of study materials
and safety training–related R&D.
7KHOHFWXUHVZHUHIROORZHGE\DQH[DPLQDWLRQWRHDUQ,62DXGLWRUTXDOL¿FDWLRQAll participants received passing marks. Looking ahead, these individuals will apply thebasic expertise gained through this program to initiatives implemented at their respective
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enhancing safety management across the region.

Europe, the Americas and Africa
The Sun Chemical Group oversees all Responsible Care initiatives by Group companies in Europe, the Americas and Africa. With the aim of
VKDULQJRYHUDOO',&*URXS5HVSRQVLEOH&DUHSROLFLHVDQGYDOXHDQGIDFLOLWDWLQJFORVHFRRSHUDWLRQZLWKWKH6XQ&KHPLFDO*URXS(6+RI¿FHUVat DIC corporate headquarters in Tokyo hold periodic ESH conferences.

ESH Auditing| Framework for Promotion
The DIC Group regularly audits Responsible Care initiatives at Group companies, plants
and R&D facilities. Audits are conducted by Responsible Care Department specialists
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of production, site administrators and employee union–endorsed members. Using selfassessment checklists, auditors assess the progress of remedial measures implemented
in response to issues cited during previous audits. DIC’s president and CEO also
participates in ESH audits, underscoring top executives’ commitment to playing an activerole in ensuring the effectiveness of ESH-related initiatives. Overseas, Responsible Care
Department specialists and regional headquarters’ ESH officers use self-assessment
checklists to ascertain the progress of efforts with the aim of enhancing Responsible Careinitiatives at individual sites.
DIC Report 2020

68

(6+DXGLWFRQGXFWHGE\',&¶VFKDLUPDQ FHQWHU DQG&(2 ULJKWESH| Principal Initiatives in Fiscal Year 2019

On-Site Audits Conducted at Sites to Enhance Safety,Q-DSDQ5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVKDYHFRQGXFWHG5HVSRQVLEOH&DUHDXGLWVDWGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVVLQFH
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principal sites and DIC Graphics’ three sites. In addition, third-party safety audits were conducted at the Chiba and Tatebayashi plants as an
objective way to identify issues. Owing to a lack of success in reducing occupational accidents and disasters, the Group has also conducted
DXGLWVXVLQJVHOIDVVHVVPHQWFKHFNOLVWVDWDOPRVWDOOVLWHVEHORQJLQJWRGRPHVWLF*URXSFRPSDQLHVRWKHUWKDQ',&*UDSKLFV,Q¿VFDO\HDUDXGLWVFHQWHULQJRQULJRURXVVLWHLQVSHFWLRQVZHUHFRQGXFWHGDWVLWHVEHORQJLQJWRQLQHGRPHVWLF*URXSFRPSDQLHVZLWKWKHDLPRI
improving the level of safety and environmental management.
6LPLODUHIIRUWVDUHDOVRSURPRWHGRYHUVHDVZLWKDXGLWVEHFRPLQJPRUHVWULQJHQWHYHU\\HDU,Q¿VFDO\HDUWKH*URXSFRQGXFWHG
5HVSRQVLEOH&DUHDXGLWVDWVLWHVEHORQJLQJWRFRPSDQLHVLQWKH$VLD±3DFLILFUHJLRQFRQILUPLQJVWHDG\LPSURYHPHQWVWKURXJKDSSOLFDWLRQRIWKH3'&$F\FOH$XGLWVDWIRXUVLWHVLQ0DOD\VLDZHUHXQDQQRXQFHGPDNLQJLWSRVVLEOHWRFRQ¿UPVWHDG\SURJUHVVIn Greater China, Responsible Care audits were conducted at 15 sites belonging
WRFRPSDQLHV,QDGGLWLRQWKLUGSDUW\DXGLWVZHUHFRQGXFWHGDWVLWHVEHORQJLQJWR&KDQJ]KRX+XDUL1HZ0DWHULDO&R/WG',&=KDQJMLDJDQJ&KHPLFDOVDQG1DQWRQJDIC Color Co., Ltd., with steps taken to increase the stringency of checks. In Europe,
WKH$PHULFDVDQG$IULFD5HVSRQVLEOH&DUHDXGLWVZHUHFRQGXFWHGDWVLWHVEHORQJLQJ
WR6XQ&KHPLFDO*URXSFRPSDQLHVDQGVLWHVEHORQJLQJWRVXEVLGLDU\6HLNR30&
Corporation, which manufactures chemicals for paper production and resins for printing
inks and reprographic products, with audit results and the progress of subsequent
remedial measures communicated to DIC. The Group reported one violation of
Responsible Care–related regulations overseas in the period under review. Prompt
steps were taken to make improvements.

$XGLWFRQGXFWHGE\DQH[WHUQDORUJDQL]DWLRQDW',&=KDQJMLDJDQJ&KHPLFDOV

9LRODWLRQZLWKDSHQDOW\H[FHHGLQJ

Audits Conducted at Subsidiaries’ Sites
in Fiscal Year 2019

Outline of ESH Audits Implemented in Fiscal Year 2019
Japan

Overseas

DIC

DIC Graphics

Other domestic
Group companies

Greater China

Asia–Pacific region

9 sites

3 sites

11sites

15 sites

20 sitesTotal

23 sites

Total

Sun Chemical Group

Seiko PMC Group

37sites

10 sites

35 sites

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Occupational Safety and Health/Disaster Prevention
Occupational Safety and Health
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2019

Ensure occupational safety and health.

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.80
Asia–Pacific region:
2.00
Greater China:
1.50
Americas and Europe: 8.00
(Global DIC Group:
4.44)

Prevent disasters.

• Prevent major accidents (e.g., fires resulting
in the gutting of structures).
• Start calculating process safety accidents.

Achievements in fiscal year 2019

Evaluation

Goals for fiscal year 2020★

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

★

• Continue working to prevent major accidents.
• Further promote the calculation of process
safety accidents in accordance with ICCA guidelines.

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

2.95
2.80
0.98
4.76
3.82)

• Number of major accidents:
DIC Group in Japan: 1
Asia–Pacific region: 1(Global DIC Group: 2)• The calculation of process safety accidents
in accordance with ICCA guidelines.

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

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

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

TOPIC
Management’s Commitment%HOLHYLQJWKDWLWLVLPSRUWDQWIRUPDQDJHPHQWWRWDNHWKHOHDGLQSURPRWLQJWKHLGHDRI³6DIHW\)LUVW´PDQDJLQJH[HFXWLYH
RI¿FHU1DR\RVKL)XUXWDSUHSDUHVDPRQWKO\PHPRIRUGLVWULEXWLRQWRHDFKLQGLYLGXDOHPSOR\HHDVSDUWRIDFDPSDLJQGXEEHG
“Learning from the Past and Implementing Practical Solutions.” Each memo presents a recent actual occupational accident or
LQWURGXFHVRFFXSDWLRQDODFFLGHQWVWKDWDUHOLNHO\WRRFFXUDWVSHFL¿FWLPHV²HJKHDWVWURNHLQVXPPHURUVWDWLFHOHFWULFLW\±UHODWHGDFFLGHQWVLQZLQWHU²DQGEDVHGWKHUHXSRQVXJJHVWVSRVVLEOHFRXQWHUPHDVXUHV7KLVPHPRLVDOVRUHDGRXWRQFHDmonth at a morning assembly at each site to promote awareness among employees and encourage a common understanding.

| Principal Initiatives in Fiscal Year 2019
Status of Occupational Accidents
The DIC Group sets targets for occupational accidents and promotes a variety of initiatives around the world with the aim of eliminating
VXFKDFFLGHQWV2ISDUWLFXODUQRWHWKH*URXSVHWVGRPHVWLFDQGRYHUVHDVWRWDOUHFRUGDEOHLQMXU\UDWH 75,5 WDUJHWV,Q¿VFDO\HDUWKH
*URXS¶VGRPHVWLF75,5ZDVXSIURPWKHSUHYLRXVWorkdays Lost Due to Occupational Accidents (FY2017–2019)
ILVFDO\HDUDQGH[FHHGLQJLWVWDUJHWIRUWKHSHULRG7KH
DIC
DIC Group (Japan)
DIC Group (Global)',&*URXSUHSRUWHGDFFLGHQWVUHVXOWLQJLQZRUNGD\VORVW
2017 2018 2019 2017 2018 2019 2017 2018 2019
GXULQJWKHSHULRG2YHUVHDVWKH*URXS¶V75,5ZDVGRZQ
Number ofDQGEHWWHUWKDQLWVWDUJHW*URXSVLWHVRXWVLGH-DSDQ
2
6
2
3
8
11
70
91
78
workdays lost
UHSRUWHGDFRPELQHGWRWDORIDFFLGHQWVUHVXOWLQJLQZRUNGD\VFrequency 0.360 1.071 0.363 0.331 0.848 1.200 1.752 2.211 1.963
lost. Looking ahead, the Group will continue working to analyze
rate
the causes of occupational accidents resulting in workdays lost---Severity rate 0.054 0.021 0.003 0.028 0.013 0.038
DQGUHÀHFWLWV¿QGLQJVLQFRQFUHWHLPSURYHPHQWVZLWKWKHJRDORI
preventing such accidents in the future.
TRIR*

75,5  1XPEHURIRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQZRUNGD\V lost + 1XPEHURIRFFXSDWLRQDODFFLGHQWV* 7RWDOUHFRUGDEOHLQMXU\UDWH
not resulting in workdays lost) / Million work hours

1RWH',&DJJUHJDWHVDQGUHSRUWVGDWDRQIXOOWLPHSDUWWLPHDQGFRQWUDFWHPSOR\HHV

Frequency Rate

Severity Rate

1.50

0.15

1.00

0.10

0.50

0.00

2.16 2.50 1.63 2.65 2.86 2.95 3.98 4.83 3.82

0.05

11

12

13
DIC

14
JCIA

15

16

17

18

Overall manufacturing industry

0.00

19

11

(FY)

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

13
DIC

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

12

14
JCIA

15

16

17

18

Overall manufacturing industry

19

(FY)

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

× 1,000,000

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

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

× 1,000

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

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| Efforts to Foster a Safety-Conscious Corporate Culture,QOLQHZLWKWKHLWV³6DIHW\)LUVW´SKLORVRSK\WKH',&*URXSZRUNVWRIRVWHUDVDIHW\FRQVFLRXVFRUSRUDWHFXOWXUH,Q¿VFDO\HDUSHUVRQQHOin charge of safety at plants belonging to DIC and subsidiary DIC Graphics created Safe Corporate Climate Cultivation working groups. In
DGGLWLRQWRPHHWLQJUHJXODUO\WRGLVFXVVDQGH[FKDQJHSURSRVDOVUHJDUGLQJVDIHW\SROLFLHVDQGPHDVXUHVWKHVHZRUNLQJJURXSVDGYLVHWKH
Sustainability Committee and other bodies and promote a variety of key initiatives.
Fiscal year

Working group initiatives

2012

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

2013

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

2014

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

2015

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

2016

Working groups in the PRC began reading out key passages from Principles of Safe Conduct to foster a culture of safety.

2017

Working groups updated Principles of Safe Conduct.

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

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

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

・Total work hours

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

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

Monthly report

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Conducting Risk Assessments
By understanding potential risks in production processes, facilities and devices, and the hazards of chemical substances, the DIC Group systematically prepares
initiatives to prevent accidents and occupational injuries. In Japan, the Group has formulated guidelines for conducting risk assessments when deploying new or
PRGL¿HGHTXLSPHQWRUFKDQJLQJSURGXFWLRQSURFHVVHVWRLGHQWLI\DQGHYDOXDWHWKHLPSDFWRQHPSOR\HHVDQGWKHFRPPXQLW\IURPGHVLJQWKURXJKWRRSHUDWLRQ:LWKWKHDLPRIUHGXFLQJULVNVDVVRFLDWHGZLWKFKHPLFDOVXEVWDQFHVLQ-DSDQVLQFH¿VFDO\HDUWKH',&*URXSKDVFUHDWHGDIUDPHZRUNWRIDFLOLWDWHWKH
PHWKRGLFDOLPSOHPHQWDWLRQRIULVNDVVHVVPHQWVLQOLQHZLWKWKHSROLF\VHWIRUWKE\WKH0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH2ISDUWLFXODUQRWHLQ¿VFDO\HDUWKH
*URXSIRUPXODWHGSURSULHWDU\DVVHVVPHQWJXLGHOLQHVLQFOXGLQJIRUDVVHVVPHQWSURFHGXUHVDQGLVFRQVLGHULQJPHDVXUHVWRHYDOXDWHKD]DUGVDQGWR[LFLW\DQGORZHU
risks associated with chemicals set forth in Japan’s Poisonous and Deleterious Substances Control Act, such as modifying and improving practices for handling such
substances. Individual sites have created risk assessment frameworks and developed three-year plans to govern initiatives. The progress of these risk assessments
LVFRQ¿UPHGWKURXJK(6+DXGLWVTOPIC
DIC’s Yokkaichi Plant Receives Award as Excellent Safety Site from the Mie Federation of Labor Standards Associations,Q2FWREHU',&¶V<RNNDLFKL3ODQWORFDWHGLQ<RNNDLFKL0LH3UHIHFWXUHUHFHLYHGDQDZDUGDVDVLWHZLWKDQH[FHOOHQWRFFXSDWLRQDOVDIHW\SHUIRUPDQFHIURPWKH0LH)HGHUDWLRQRI/DERU6WDQGDUGV$VVRFLDWLRQV+LJKPDUNVZHUHJLYHQWRWKHSODQW¶VPRUHWKDQFRQVHFXWLYH\HDUVRIDFFLGHQWDQGGLVDVWHUIUHHRSHUDWLRQV GD\VDVRI6HSWHPEHU
   DQG LWV H[WHQVLYH UHFRUG RI RFFXSDWLRQDO VDIHW\ DQGhealth initiatives, which include conducting occupational safety andhealth patrols and implementing safety education and assessing
risks associated with facilities and chemical substances based on
DQ DQQXDO HGXFDWLRQDO SODQ *RLQJ IRUZDUG WKH<RNNDLFKL 3ODQW
will continue to promote purposeful occupational safety and healthinitiatives with the aim of serving as a model for the DIC Group, as
well as the chemicals industry as a whole.

| Education and Training
Promoting E-Learning–Based Training for Employees
To enhance its ESH and disaster prevention capabilities, the DIC Group recognizes the importance of ensuring that all of its employees gain
DEURDGXQGHUVWDQGLQJRIFKHPLFDOVXEVWDQFHVSURGXFWLRQSURFHVVHVDQGSHUWLQHQWODZVDQGUHJXODWLRQV,Q¿VFDO\HDUWKH*URXSLQWURGXFHGDQHOHDUQLQJSURJUDPKDYLQJYHUL¿HGWKHDSSURSULDWHQHVVRIHGXFDWLRQDOPDWHULDOVIURPWKHSURJUDPIURPWKHSHUVSHFWLYHRI
5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVVLWH(6+RI¿FHUVDQGSURGXFWLRQGHSDUWPHQWV7KHSURJUDPZKLFKLVVWUXFWXUHGDURXQGODZVand regulations pertinent to the operation of production facilities, including the Fire Service Act, the Air Pollution Control Law and the High
3UHVVXUH*DV6DIHW\$FWZDVLQWURGXFHGIRUPDOO\IRU',&*URXSFRPSDQLHVLQ-DSDQLQ¿VFDO\HDUZLWKHPSOR\HHVUHJLVWHULQJWR
WDNHSDUW3DUWLFLSDQWVFDQWDNHXSWRFODVVHVDQGPXVWVFRUHDERYHSRLQWVWRHDUQFHUWL¿FDWLRQ$WRWDORIHPSOR\HHVWRRNSDUWLQ
¿VFDO\HDUZKLOHLQ¿VFDO\HDUSDUWLFLSDQWVQXPEHUHG

Training Skilled Safety Personnel
To foster skilled safety personnel, the DIC Group provides regular safety education and training on how to handle chemical substances using
online resources such as the Principles of Safe Conduct guidebook and the Group’s Occupational Accident Case Studies database, as well as
its Environment and Safety Guidelines for the R&D Department and safety data sheets (SDSs). Principles of Safe Conduct has been translated
LQWRVHYHUDOODQJXDJHVIRUXVHE\RYHUVHDV*URXSFRPSDQLHVDQGLVXVHGZLGHO\LQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ7KH¿IWKHGLWLRQRIWKHJXLGHERRNZKLFKLVXSGDWHGHYHU\\HDUVZDVSXEOLVKHGLQ¿VFDO\HDU$QDQLPDWHGYHUVLRQEDVHGRQWKH¿IWKHGLWLRQZDVDOVR
launched in the same year, the Chinese- and English-language versions of which are currently being used as educational tools overseas.
7KH',&*URXSDOVRIRFXVHVRQ.LNHQ<RFKL7UDLQLQJ .<7  ³KD]DUGSUHGLFWLRQWUDLQLQJ´ DQGKDQGVRQVDIHW\WUDLQLQJRQDJOREDOEDVLV,Q
DGGLWLRQWRH[SDQGLQJXVHRI.<7DFRQVWUXFWLYHWHFKQLTXHWRIXUWKHULQFUHDVHVDIHW\DZDUHQHVVWRDOO*URXSFRPSDQLHVLQ-DSDQWKH*URXSLVDFFHOHUDWLQJGHSOR\PHQWLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ

Web-based animated version of Principles of Safe Conduct

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Hands-On Safety Training
7KH',&*URXS¶VIXOOÀHGJHGKDQGVRQVDIHW\WUDLQLQJSURJUDPEHJDQLQZLWKWKHLQWURGXFWLRQRIDPRELOHLQLWLDWLYHXVLQJHTXLSPHQWWUDQVSRUWHGIURPVLWHWRVLWH6LQFH¿VFDO\HDUWKH*URXSKDVLQVWDOOHGSHUPDQHQWWUDLQLQJHTXLSPHQWLQ-DSDQ VL[VLWHV WKH35& WKUHH
sites), Taiwan, Malaysia, Indonesia, India and Thailand. Over the past few years, these and other initiatives have helped to almost halve
the occupational accident frequency rate* at DIC Group sites in Japan. The Group’s hands-on safety training simulates common productionÀRRUDFFLGHQWV²LQFOXGLQJWKRVHLQYROYLQJHQWDQJOHPHQWLQURWDWLQJGHYLFHVIDOOVIURPKLJKSODFHVDQGLQFLVHGZRXQGVFDXVHGE\FXWWLQJHTXLSPHQW²EDVHGRQDFWXDOSUHYLRXVH[DPSOHVZLWKWKHDLPRIUHGXFLQJHPSOR\HHV¶ZLOOLQJQHVVWRDFFHSWULVNVDQGIRVWHULQJWKHLUDELOLW\WR
recognize danger. In doing so, the Group seeks to transform the mindset of employees by encouraging them to think and act on their own toprotect themselves and each other from latent risks.
7KHIUHTXHQF\UDWHH[SUHVVHVWKHIUHTXHQF\RIDFFLGHQWVUHVXOWLQJLQworkdays lost, calculated as the number of deaths or injuries per million work hours.

Disaster Prevention| Policies and Organization
Basic Approach$Q\¿UHH[SORVLRQRUOHDNRIKD]DUGRXVVXEVWDQFHVIURPDFKHPLFDOVSODQWFRXOGKDYHDWUHPHQGRXVLPSDFWRQORFDOUHVLGHQWVDQG
the rest of the community and damage the health of employees, including those of partner companies. In addition to establishinga security management system to prevent such accidents, the DIC Group operates and maintains its facilities in line with pertinent
laws and regulations. The Group regularly conducts emergency drills and has earthquake and other response measures in place.
To ensure the safety of production equipment, the DIC Group undertakes risk assessments at every stage, from development
WKURXJKWRGLVSRVDO,QWKH*URXSDOVRIRUPXODWHGWKH',&3URFHVV5LVN0DQDJHPHQW 350 *XLGHOLQHV ZKLFKFRQVLVWRIIRXU
assessment techniques and implementation timetables for each and is used to facilitate risk assessments at individual sites. Since
LGHQWLI\LQJSULRULW\ULVNVLQ¿VFDO\HDUWRDLGLQHIIHFWLYH%&3WKH',&*URXSKDVWDNHQVWHSVWRUHLQIRUFHHPHUJHQF\UHVSRQVH
drills and other initiatives.
* The guidelines outline timetables and implementation frameworks for assessing the handling of chemical substances, production processes, production formulas, machinery and work practices with theaim of comprehensively identifying and steadily reducing risks associated with production and R&D processes.

| Framework for Promotion
Under the supervision of the Sustainability Committee chair (currently the president and CEO), the Responsible Care Department and the
Safety and Environment groups of Group companies, plants and research laboratories collaborate to promote a variety of initiatives. The
5HVSRQVLEOH&DUH'HSDUWPHQWKROGVPHHWLQJVUHJXODUO\ZLWKVLWH6DIHW\DQG(QYLURQPHQWJURXSVWRH[FKDQJHLQIRUPDWLRQDVZHOODVWRFRQ¿UPWKHVWDWXVRISULRULW\LVVXHVDQGDFKLHYHWDUJHWVDQGPDQDJHWKHSURJUHVVRIUHODWHGHIIRUWV| Principal Initiatives in Fiscal Year 2019
Status of Facility Accidents
2Q$XJXVW',&UHSRUWHGDQDFFLGHQWDWWKH6DLWDPD3ODQWLQYROYLQJDPDMRU¿UHLQZKLFKDKD]DUGRXVPDWHULDOVZDUHKRXVHEXUQHG
to the ground. Regrettably, this accident–the cause of which remains under investigation–caused a major disruption to the local community.
7KHUHZDVDOVRRQHDFFLGHQWLQYROYLQJD¿UHDWD',&*URXSVLWHLQ0DOD\VLDRQ6HSWHPEHU)RUWXQDWHO\QRFDVXDOWLHVUHVXOWHGIURPHLWKHURI
these accidents, To prevent recurrence, the Group is currently reviewing its disaster prevention equipment and safety management systems.

Process Safety Management
6LQFH¿VFDO\HDU',&KDVFDOFXODWHGSURFHVVVDIHW\DFFLGHQWVDW',&*URXSVLWHVLQ-DSDQLQDFFRUGDQFHZLWK,&&$JXLGHOLQHV7KH
*URXSUHSRUWHGVL[SURFHVVVDIHW\DFFLGHQWVLQ-DSDQLQ¿VFDO\HDU7KHSURFHVVVDIHW\DFFLGHQWIUHTXHQF\UDWH²WKHQXPEHURIVXFKDFFLGHQWVSHUZRUNKRXUV²ZDV
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| Facility Safety Assessment
Assessment Procedures',&*URXSSURGXFWLRQIDFLOLWLHVKDYHDQDUUD\RIDSSOLFDWLRQVSHFL¿FHTXLSPHQWUDQJLQJIURPXQLWVZKHUHFKHPLFDOUHDFWLRQVDUHFRQGXFWHG
to machine presses and other processing equipment. When modifying processes or upgrading/replacing equipment, the Group assesses
VDIHW\DWHYHU\VWDJHIURPSURFHVVGHVLJQDQGFRQVWUXFWLRQWKURXJKWRRSHUDWLRQPDLQWHQDQFHDQG¿QDOGLVSRVDOLQOLQHZLWKULVNDVVHVVPHQWJXLGHOLQHVIRUUHDFWLRQIRUPXODVSURFHVVHVDQGHTXLSPHQWWRHQVXUHKLJKHUVDIHW\OHYHOVIRUQHZSURFHVVHVDQGIDFLOLWLHV,Q¿VFDO\HDU
DIC revised risk assessment guidelines for machinery and equipment and prepared educational materials to prevent electrostatic accidents.

Accident and Disaster Analysis and Timely Information',&FROOHFWVDQGFRPSLOHVLQIRUPDWLRQRQLQWHUQDODQGH[WHUQDODFFLGHQWVGLVDVWHUVDQGSUREOHPVLQWRLWV2FFXSDWLRQDO$FFLGHQW&DVH6WXGLHV
and Accident Case Studies databases. After identifying the causes of accidents or problems, establishing points to be checked and formulating
countermeasures, the Company incorporates database information into safety education for DIC and DIC Group companies in Japan and overseas.

Assessment by the Safety Competency Enhancement Center$FRPSDQ\¶VVDIHW\FRPSHWHQF\FDQEHGH¿QHGDVLWVDELOLW\WRPDLQWDLQVDIHW\OHYHOVDWLWVYDULRXVVLWHV,Q¿VFDO\HDU',&LQWURGXFHG
an assessment system* as a means of objectively evaluating and enhancing its safety competency. This system was developed by the Japan
Society of Safety Engineering (JSSE) and engineers in the chemicals industry as a common benchmark and is currently used by companies
in Japan that are members of the Safety Competency Enhancement Center.
7RDGYDQFHXVHRILWVDVVHVVPHQWV\VWHPLQILVFDO\HDUWKH6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHUIRUPXODWHGDYHUVLRQIRU
SURFHVVLQJVLWHVDQGDSULRULWL]HGYHUVLRQWKDWVWUHDPOLQHVHYDOXDWLRQV,Q¿VFDO\HDUWKHFHQWHUUHYLHZHGDQGUHYDPSHGFULWHULDIRU
DVVHVVLQJVDIHW\LQIUDVWUXFWXUHDVDUHVXOWRIZKLFKDSSOLFDWLRQRIWKHV\VWHPKDVH[SDQGHGWRLQFOXGHQRQFKHPLFDOVLQGXVWU\FRPSDQLHV
6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHULQVSHFWLRQVZHUHFRQGXFWHGDWWKH<RNNDLFKLDQG6DLWDPDSODQWVLQ¿VFDO\HDUWKH.RPDNLDQG6DNDLSODQWVLQ¿VFDO\HDUDQGWKH&KLEDDQG7DWHED\DVKLSODQWVLQ¿VFDO\HDUZLWKHDFKIDFLOLW\XVLQJDVVHVVPHQWUHVXOWVWRLPSOHPHQWIXUWKHULPSURYHPHQWV,Q'HFHPEHU',&DVNHGWKHFHQWHUWRSURYLGHWKH&RPSDQ\¶VSUHVLGHQWDQG&(2ZLWKDQRYHUDOOUHSRUWRQWKHUHVXOWVRIWKHVL[LQVSHFWLRQVFRQGXFWHGWRGDWHIDFLOLWDWLQJWKHVKDULQJRILQIRUPDWLRQUHJDUGLQJVDIHW\DQGGLVDVWHUSUHYHQWLRQ
across the management team.
* The assessment system encompasses questions about safety infrastructure (technical considerations) and culture of safety (operation and management of organizational culture).

TOPIC
Initiatives to Prevent Electrostatic Accidents
5HFRJQL]LQJWKDWVWDWLFHOHFWULFLW\LVDNH\FDXVHRI¿UHVIRUFKHPLFDOFRPSDQLHVWKH',&*URXSKDVRUJDQL]HGVWDWLFHOHFWULFLW\VDIHW\VHVVLRQVJXLGHGE\DQH[SHUWLQ
WKLV¿HOGDWVLWHVLQ-DSDQVLQFH¿VFDO\HDU,Q¿VFDO\HDUWKH*URXSH[SDQGHGWKLVLQLWLDWLYHWRLQFOXGHWKHRYHUVHDV',&*URXS,Q0DUFKVHVVLRQV
were held at multiple sites in Indonesia, led by the same instructor that has a solid track record of leading sessions in Japan.
2YHUVHDVVHVVLRQVLQ¿VFDO\HDUZHUHGLYLGHGLQWRWKUHHSDUWV$QLQVSHFWLRQRIVLWHHOHFWURVWDWLFDFFLGHQWSUHYHQWLRQPHDVXUHVDOHFWXUHRQVWDWLFHOHFWULFLW\DQG
FRQ¿UPDWLRQRIDUHDVLGHQWL¿HGGXULQJWKHLQVSHFWLRQDVUHTXLULQJUHPHGLDOPHDVXUHV,QDGGLWLRQWRDQDFDGHPLFFRPSRQHQWWKHVHVHVVLRQVLQFOXGHGDGHPRQVWUDWLRQRIVWDWLFHOHFWULFLW\ZKLFKHQDEOHGSDUWLFLSDQWVWRH[SHULHQFHWKHUHODWLRQVKLSEHWZHHQWKHVWUHQJWKRIDQHOHFWULFVSDUNWKDWFDQEHIHOWE\KXPDQVDQGWKHPLQLPXPHQHUJ\UHTXLUHGIRULJQLWLRQ7KHGHPRQVWUDWLRQDOVRLQFOXGHGDWDUJHWHGH[SODQDWLRQDERXWJURXQGLQJDQGVSHFL¿FJURXQGLQJSURFHGXUHVWKDWDUHHIIHFWLYHLQSUHYHQWLQJ
electrostatic accidents. The combination of academic study and on-site demonstration focused on measures to prevent electric sparks enabled participants to gain
valuable knowledge about static electricity beyond what is possible with video-based training.
DIC Group Sites in Indonesia Where Static Electricity Safety Sessions Were Held・ PT. DIC Graphics’ Pulogadung Plant (Manufacture and sale of printing inks)
・ PT DIC ASTRA Chemicals (Manufacture and sale of plastic colorants and compounds,
among others)
・ PT. DIC Graphics’ Karawang Plant (Manufacture and sale of organic pigments)
・ P.T. Pardic Jaya Chemicals (Manufacture and sale of synthetic resins)

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| Emergency Response Drills
In addition to daily security patrols and periodic
equipment checks, the DIC Group conducts
regular emergency response drills based on
BCPs, particularly at production sites in Japanand overseas.

Comprehensive disaster drill at the Sakai Plant, a designatedspecial disaster protection area

Comprehensive disaster drill at the Tokyo Plant

TOPIC
DIC’s Sakai Plant Conducts Comprehensive Disaster Drill Using Nankai Trough Megathrust Earthquake Scenario,Q6HSWHPEHU',&¶V6DNDL3ODQWKRVWHGDFRPSUHKHQVLYHGLVDVWHUGULOOIRUWKH6DNDL±6HQERNXFRDVW $SSUR[LPDWHO\LQGLYLGXDOVSDUWLFLSDWHGLQFOXGLQJHPSOR\HHVRI
companies belonging to the Sakai–Senboku Coast Special Disaster Protection Area Council and the Osaka prefectural government.
7KHVFHQDULRGHYHORSHGIRUWKHGULOOZDVWKDWD1DQNDL7URXJKPHJDWKUXVWHDUWKTXDNHZLWKDVHLVPLFLQWHQVLW\RIFORVHWRKDVRFFXUUHGWULJJHULQJDPDVVLYHWVXQDPLDQG
GDPDJLQJSODQWWDQNVFDXVLQJVROYHQWVWROHDNIURPWDQNVSHQHWUDWHWKHRLOEDUULHUDQGFDWFK¿UH'ULOOH[HUFLVHVZHUHGLYHUVHDQGLQFOXGHGPHDVXUHVWREHWDNHQLPPHGLDWHO\DIWHUDPDMRUWVXQDPLDGYLVRU\FRQ¿UPLQJWKHVDIHW\RIDQGVXVSHQGLQJRSHUDWLRQVRIHTXLSPHQWJXLGLQJHPSOR\HHVWRVDIHW\UHSRUWLQJFLUFXPVWDQFHVWRWKH¿UHGHSDUWPHQWUHVFXLQJLQMXUHGLQGLYLGXDOVDQGH[WLQJXLVKLQJ¿UHV7KLVDOORZHGSDUWLFLSDQWVWRGHPRQVWUDWHVNLOOVDFTXLUHGWKURXJKHYHU\GD\SUDFWLFH
7KHGULOOZDVRUJDQL]HGE\WKH6DNDL±6HQERNX&RDVW6SHFLDO'LVDVWHU3URWHFWLRQ$UHD&RXQFLOLQOLQHZLWKWKH$FWRQWKH3UHYHQWLRQRI'LVDVWHULQ3HWUROHXP,QGXVWULDO&RPSOH[HVDQG2WKHU3HWUROHXP)DFLOLWLHV| Hands-On Safety Training',&FRQWLQXHVWRGHSOR\KDQGVRQVDIHW\WUDLQLQJLQ-DSDQDQGRYHUVHDV6LQFH¿VFDO\HDUSHUPDQHQWWUDLQLQJHTXLSPHQWKDVEHHQLQVWDOOHG
DWVL[VLWHVLQ-DSDQDQGWKUHHVLWHVLQWKH35&DVZHOODVLQ7DLZDQ0DOD\VLD,QGRQHVLD,QGLDDQG7KDLODQG$VRIWKHHQGRI¿VFDO\HDUWKHFXPXODWLYHQXPEHURI',&*URXSHPSOR\HHVSDUWLFLSDWLQJLQKDQGVRQVDIHW\WUDLQLQJUHDFKHGLQ-DSDQDQGFORVHWRRYHUVHDV

Number of Hands-On Safety Training Participants (Fiscal Year 2019)
DIC Group in Japan
FY2019Cumulative total(FY2012–2019)

DIC Group overseas (Greater China: 4 companies;$VLD²3DFLÀFUHJLRQFRPSDQLHV

Total

316

1,456

1,772

9,121

5,850

14,971

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

Training for new employees at the Saitama Plant

DIC Report 202076

Hands-on safety training simulating an accident involving a fall

ESH

VOICE I participated in a program to foster employee hands-on training instructors.
Having previously taken part in hands-on training at the Kashima Plant, this year I participated in a program to foster employee hands-on training instructors
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SUDFWLFHLQFRQGXFWLQJWUDLQLQJVHVVLRQV7KHODWWHULQSDUWLFXODUZDVD¿UVWIRUPH,IRXQGWKHZKROHH[SHULHQFHH[WUHPHO\YDOXDEOHLQWKDWLWIXUWKHUKHLJKWHQHGP\DZDUHQHVVRIVDIHW\²WKHXOWLPDWHJRDORIKDQGVRQWUDLQLQJ²DQGJDYHPH
DQDSSUHFLDWLRQRIWKHGLI¿FXOW\RIWKHDSSURDFKXVHGLQWKLVWUDLQLQJZKLFKLVWRJLYHSDUWLFLSDQWVKLQWVWKDWHQFRXUDJHWKHPWRWDNHZKDWWKH\OHDUQEDFNWR
their workplaces to discuss with their colleagues and come up with answers themselves. I look forward to polishing my ability to conduct hands-on training in a
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Safety and Environment Group, Kashima Plant, DIC Corporation

Tetsuya Ishikawa

Initiatives at Overseas Group Companies
Group companies overseas are also deploying hands-on safety training. In Greater China, hands-on safety training equipment has been
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&RUSLQ7DLZDQ,QWKH$VLD±3DFL¿FUHJLRQHTXLSPHQWKDVEHHQLQVWDOOHGDW',&&RPSRXQGV 0DOD\VLD 6GQ%KG',&$675$&KHPLFDOV
LQ,QGRQHVLD7KDLODQG¶V6LDP&KHPLFDO,QGXVWU\&R/WGDQG',& ,QGLD /WG¶VSODQWLQ1RLGD7KHVHFRPSDQLHVSURYLGHKDQGVRQVDIHW\WUDLQLQJIRUHPSOR\HHVDFURVVWKHLUUHVSHFWLYHUHJLRQVDVZHOODVHGXFDWLRQIRUVDIHW\LQVWUXFWRUV,Q¿VFDO\HDUWKHFXPXODWLYHQXPEHU
RISDUWLFLSDQWVLQKDQGVRQVDIHW\WUDLQLQJDFURVVWKHJOREDO',&*URXSVXUSDVVHG

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

| Initiatives Aimed at Preventing Global Warming
Recognizing climate change as an issue of the utmost importance to society and a critical factor affecting its businesses, the DIC Group is
working as one to reduce energy consumption and promote decarbonization and in its DIC111 medium-term management plan, announced in¿VFDO\HDUKDVSOHGJHGWRUHGXFHJUHHQKRXVHJDVHPLVVLRQVIURPLWVVLWHV$VDPDQXIDFWXUHURI¿QHFKHPLFDOVZLWKDJOREDOSUHVHQFH
the Group is also leveraging its technological capabilities to develop products that will contribute to the realization of a low-carbon society.
$WWKH8QLWHG1DWLRQV&OLPDWH&KDQJH&RQIHUHQFH WKHDQQXDOVHVVLRQRIWKH&RQIHUHQFHRIWKH3DUWLHV &23 WRWKH8QLWHG
1DWLRQV)UDPHZRUN&RQYHQWLRQRQ&OLPDWH&KDQJH 81)&&& SDUWLFLSDQWVDGRSWHGWKH3DULV$JUHHPHQWDPRYHDLPHGDWDFFHOHUDWLQJHIIRUWVWRWDFNOHWKLVXUJHQWFKDOOHQJH,Q0D\WKH',&*URXSGHFODUHGLWVVXSSRUWIRUWKH7&)'ZKLFKZDVHVWDEOLVKHGXQGHUWKHDXVSLFHVRIWKH)LQDQFLDO6WDELOLW\%RDUG )6% DQGDQQRXQFHGLQ-XQHSOHGJLQJWRGLVFORVHFOLPDWHUHODWHGLQIRUPDWLRQLQOLQHZLWK7&)'UHFRPPHQGDWLRQVJRLQJIRUZDUG

| Initiatives Aimed at Preventing Global WarmingWith global warming, a principal cause of climate change, an increasingly pressing issue for the entire world, the DIC Group is actively
promoting related initiatives as outlined below.
❶ 8QGHUWDNHHQHUJ\VDYLQJLQLWLDWLYHVZRUOGZLGH❷ Deploy effective strategies through working group activities❸ 2SHUDWHHQHUJ\VDYLQJFRJHQHUDWLRQV\VWHPV FRPELQHGKHDWDQGHOHFWULFSRZHUJHQHUDWLQJIDFLOLWLHV ❹ (PSOR\HQHUJ\IURPUHQHZDEOHVRXUFHV ELRPDVVERLOHUVZLQGSRZHUDQGVRODUSRZHU DWVXLWDEOHVLWHV❺ Extend energy-saving initiatives to DIC Group companies overseas❻ :KHQLQVWDOOLQJRUH[SDQGLQJIDFLOLWLHVSXUSRVHIXOO\VHOHFWHQHUJ\HI¿FLHQWHTXLSPHQWDQGIRUPXODWHUHODWHGUXOHV LQYHVWPHQWLQHQYLURQPHQWDOYDOXH
1RWH$WRWDORIRIWKH',&*URXS¶VVLWHVDQGRI¿FHVDQGUHVHDUFKIDFLOLWLHVLQ-DSDQKDYHHDUQHGFHUWL¿FDWLRQXQGHUWKHFRXQWU\¶V'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\V\VWHP

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

Reduce emissions of
CO2 at sites (Scope 1 and 2).

Goals for fiscal year 2019

Achievements in fiscal year 2019

Evaluation

DIC Group (global):
Reduce CO2 emissions at DIC
Group sites (Scope 1 and 2) by
30% from the fiscal year 2013
level by fiscal year 2030 (averageannual decrease of 2.1%).

CO2 emissions: 577,056 tonnes• Down 6.6% from fiscal year 2018 (617,964 tonnes)• Down 20.2% from fiscal year 2013 (722,955 tonnes)

★★★
★★★

DIC Group (Japan):
In line with the global target,
reduce CO2 emissions at DIC
Group sites (Scope 1 and 2) by
30% from the fiscal year 2013
level by fiscal year 2030 (averageannual decrease of 2.1%).

1. CO2 emissions: 220,776 tonnes• Down 4.8% from fiscal year 2018 (231,820 tonnes)• Down 9.7% from fiscal year 2013 (244,377 tonnes)
2. Energy consumption per unit of production: 3.706 GJ/tonne• Down 5.1% from fiscal year 2018 (3.094 GJ/tonne)• Down 11.1% from fiscal year 2013 (4.170 GJ/tonne)

Reference:
CO2HPLVVLRQVSHUXQLWRISURGXFWLRQ JOREDO',&*URXS LQ¿VFDO\HDUNJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH• 'RZQIURP¿VFDO\HDU NJWRQQH
CO2HPLVVLRQVSHUXQLWRISURGXFWLRQ ',&*URXSLQ-DSDQ LQ¿VFDO\HDUNJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH
'RZQIURP¿VFDO\HDU NJWRQQH
DIC Report 2020

78

★★★

Goals for fiscal year 2020

Reduce CO2 emissions at DIC Groupsites (Scope 1 and 2) by 30% from thefiscal year 2013 level by fiscal year
2030 (average annual decrease of 2.1%).

1. In line with the global target, reduce CO2
emissions at DIC Group sites (Scope 1
and 2) by 30% from the fiscal year 2013
level by fiscal year 2030 (average annual
decrease of 2.1%).
2. Reduce energy consumption per unit ofproduction by 17% from the fiscal year 2013
level by fiscal year 2030 (average annual
decrease of 1.0%). (Comply with Japan’s
Act on the Rational Use of Energy.)

ESH| Framework for Promotion',&DQG',&*URXSFRPSDQLHVLQ-DSDQKDYHHVWDEOLVKHGDQ(QHUJ\6DYLQJ3URPRWLRQ&RPPLWWHHDWHDFKVLWH&RPPLWWHHDFWLYLWLHVLQFOXGHFRQ¿UPLQJWKHSURJUHVVRILQLWLDWLYHVHQJDJLQJLQGLVFXVVLRQVDQGFRQGXFWLQJSDWUROV',&KDVDOVRVHWXSDQ(QHUJ\6DYLQJ:RUNLQJ*URXSDWHDFKVLWHFRPSULVLQJ
members chosen by the site, to foster the exchange of information and research pertaining to new items and to promote the horizontal deployment ofeffective measures across the Group. This combination of site- and Group-level initiatives forms the framework under which the DIC Group endeavors to
reduce its CO2HPLVVLRQV2YHUVHDV',&*URXSFRPSDQLHVSURPRWHDZLGHUDQJHRILQGHSHQGHQWHQHUJ\VDYLQJLQLWLDWLYHVWKDWDOLJQZLWKWKH*URXS¶VSROLF\
7KH3URGXFWLRQ0DQDJHPHQW8QLWSURYLGHVVXSSRUWRQPXOWLSOHIURQWVLQFOXGLQJWKHGHSOR\PHQWRIPDQDJHPHQWV\VWHPVDQGWKHWUDLQLQJRIHPSOR\HHV&ULWLFDOLQLWLDWLYHVDUHGHEDWHGE\DQGWKHSURJUHVVWKHUHRILVUHSRUWHGRQE\WKH6XVWDLQDELOLW\&RPPLWWHHZKLFKDQVZHUVGLUHFWO\WRWKHSUHVLGHQWDQG&(2| Principal Initiatives in Fiscal Year 20191

Energy Consumption and CO2 Emissions by the Global DIC Group(QHUJ\FRQVXPSWLRQE\WKHJOREDO',&*URXSLQ¿VFDO\HDUHGJHGGRZQIURP¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU&22
HPLVVLRQVE\WKHJOREDO',&*URXSDPRXQWHGWRWRQQHVGRZQIURP¿VFDO\HDUDQGIURP¿VFDO\HDU*OREDO&22 emissions per unit of
SURGXFWLRQ²H[SUHVVHGLQWHUPVRINLORJUDPVSHUWRQQH²ZHUHNLORJUDPVGRZQIURP¿VFDO\HDUDQGIURPWKHEDVH\HDU
7KH',&*URXS¶VGLYHUVHSURGXFWSRUWIROLRLQFOXGHVSULQWLQJLQNVSRO\PHUVSLJPHQWV/&VHQJLQHHULQJSODVWLFVDQGFRPSRXQGV5HFHQW\HDUVKDYHVHHQDQXSWUHQG
LQWKHRXWSXWRIHQHUJ\LQWHQVLYH¿QHFKHPLFDOVDQGDGRZQWUHQGLQWKHRXWSXWRIJHQHUDOSXUSRVHLWHPVWKHSURGXFWLRQRIZKLFKLVFRPSDUDWLYHO\HQHUJ\HI¿FLHQW$JDLQVWWKLVEDFNGURSWKH*URXS¶VVXFFHVVLQDFKLHYLQJDUHGXFWLRQLQWKHYROXPHRI&22 it emits worldwide in excess of its target for the year included efforts by
FRPSDQLHVZRUOGZLGHWREUHDNGRZQWKHWDUJHW²DQDQQXDODYHUDJHGHFUHDVHRIIURP¿VFDO\HDUVHWIRUWKLQWKH',&PHGLXPWHUPPDQDJHPHQWSODQWRHQVXUHDFKLHYHPHQWRILWVORQJWHUPWDUJHWRIDUHGXFWLRQIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU²DQGWRSURPRWHHQHUJ\VDYLQJDQGGHFDUERQL]DWLRQLQLWLDWLYHVEH\RQGZKDWKDGEHHQQHFHVVDU\WRDFKLHYHLWVSUHYLRXVDQQXDOUHGXFWLRQWDUJHWRI6RPHRIWKHVHLQLWLDWLYHVDUHRXWOLQHGEHORZ*RLQJIRUZDUGWKH*URXSZLOOFRQWLQXHWRLPSOHPHQWDYDULHW\RIHQHUJ\VDYLQJPHDVXUHVLQFOXGLQJLQWURGXFLQJKLJKO\HI¿FLHQWIDFLOLWLHVSURPRWLQJSURFHVV
improvements and improving capacity utilization rates, while at the same time further advancing its use of renewable energy by shifting to biomass and otherclean fuels and installing solar power facilities.

Global CO2 Emissions: Results, Forecasts andTarget for Fiscal Year 2030
Emissions(Tonnes)
800,000

3,500,000

700,000

3,000,000

600,000(Tonnes)

400,000

1,500,000

300,000

0Japan

0
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (FY)

2013

2014

2015

2016

2017

2018

2019 (FY)

year 2013

100,000

500,000

Americasand Europe

Greater Asia–PacificChinaregionOther

DIC Group Global
overseas DIC Group

Reduction of CO2
emissions (target)-17.4%

Global CO2 Emissions per Unit of Production
(Kg)

2017

200,000

1,000,000

CO2 emissions

2016

500,000

2,000,000

300,000

Production
volume2015

700,000

400,000

100,000

2014

600,000

2,500,000

200,000

2013

800,000

500,000

0-20.2%
from fiscal

Global CO2 Emissions
Production volume(Tonnes)

20182019 (FY)from fiscal
year 2013-14.2%
from fiscal

Global Energy Consumption
TJ (Terajoules)

year 2013

2013

2014

2015

2016

2017

2018

2019 (FY)14,000600

12,000500

10,000

400

8,000

300

6,000

200

4,000

100

2,000

0
Japan

Americasand Europe

Greater
China

Asia–PacificregionDIC Group
overseas0

GlobalDIC GroupJapan

DIC Report 2020

79

Americasand Europe

Greater Asia–PacificChinaregionOther

DIC Group Global
overseas DIC GroupESH

Factors Contributing to Change in Global CO2 Emissions

DIC Group in Japan

Factors

Impact on CO2 emissions (tonnes)

Decline in production volume (-3.2% from fiscal year 2018)
Decrease in incineration of waste oil and waste plastics (particularly at the Chiba Plant)
Implementation of 551 energy-saving initiatives at sites, including expansion of solar power facilities (1,277 kW)
Purchase of low-carbon electric power (including from existing electric power companies with improved CO2 emissions factors)
Decrease attributable to other efforts to increase efficiency
Increase in power generated using renewable energy (Hokuriku Plant)
Change in product mix (increase in output of energy-intensive products)
Decrease in power generated using renewable energy (Kashima Plant) (decline in wind power generated, among others)
Asia–Pacific region: Decline in production volume (-3.2% from fiscal year 2018) (Karawang Plant (pigments): -10.0%)
Asia–Pacific region: Energy-saving initiatives and increased productivity-5,079-4,674-3,748-3,183-1,094
-370
5,429
1,675
-7,499-2,079Asia–Pacific region: Change in CO2 emissions factor of electric power used overseas, from 0.530 to 0.4853(Source: Emissions Factors 2019, IEA)

-3,696

DIC Group overseas

Asia–Pacific region: Change in product mix and in energy consumption not directly attributable to production
Asia–Pacific region: Other factors
Greater China: Level production volume (-0.1% from fiscal year 2018)
Greater China: Energy-saving initiatives and increased productivity
Greater China: Change in CO2 emissions factor of electric power used overseas, from 0.530 to 0.4853
Greater China: Change in product mix and in energy consumption not directly attributable to production
Greater China: Other factors
Sun Chemical Group: Decline in production volume (-2.4% from fiscal year 2018)
Sun Chemical Group: Impact of energy-saving initiatives and increased productivity
Sun Chemical Group: Installation of solar power facilities in North America (generating capacity: 800 kW)
Sun Chemical Group: Change in CO2 emissions factor of electric power used overseas, from 0.530 to 0.4853
Sun Chemical Group: Change in product mix and in energy consumption not directly attributable to production
Sun Chemical Group: Other factors
Other: Changes in energy sources used at U.S. subsidiary Earthrise Nutritionals, LLC
Other: Change in CO2 emissions factor of electric power used overseas, from 0.530 to 0.4853
Change in CO2 emissions (tonnes)
Decline in CO2 emissions (%)
CO2 emissions in fiscal year 2018
CO2 emissions in fiscal year 2019

2,304
-1,589-61-2,934-2,736
1,229-2,153-3,165-2,066-405-11,522
4,632
1,302
762
-189

(%)

Wind power

50,0008

1,765 tonnes

45,0007

Solar power

62,956 tonnes

12,87911,94630,00025,000

11,637

15,00010,00021,971

28,51824,06327,29633,286

3

27,833

2

17,1172013

2014

Heat generated using
renewable energy

2015

2016

Electric power generatedusing renewable energy

Electric power
generatedusing biomass

7,848 tonnes

1

5,000
0

2017

2018

-6,655

4 .8 %-11,223

573

Solar power and others

209 tonnes

5
4

10,49720,00012,777

11,152

13,390-12,559-40,908
6.6%
617,964
577,056(Tonnes)

35,000

1.8 %Breakdown of Reduction in Global CO2 Emissions Attributable to
the Use of Renewable Energy in Fiscal Year 2019 (40,611 Tonnes)

Reduction in Global CO2 Emissions Attributable to
the Use of Renewable Energy

40,000-11,044

Decrease (%)

2019 (FY)0

Impact of use of renewable energy(Contribution to reduction in CO2 emissions (%))

In fiscal year 2019, the use of renewableenergy accounted for a reduction in CO2emissions by the global DIC Group of 6.6%,
or 40,611 tonnes, to 577,056 tonnes.
[40,611 / (577,056 + 40,611)]

DIC Report 2020

80

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

40,611tonnes
Heat generatedusing biomass

27,833 tonnes

ESH

Reduction in Global CO2 Emissions Attributable to the Use of Renewable Energy (Tonnes/%)
2013

2014

2015

2016

2017

2018

2019

Reduction attributable to the use of heat generated using biomass

21,971

28,51824,063

17,117

27,29633,286

27,833

Reduction attributable to the use of electric power generatedusing biomass

11,037

11,946

13,39010,497

11,152

12,87912,777

Total reduction attributable to the use of renewable energy

33,00840,46437,453

27,61438,44846,166

40,611

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

4.4％

5.8%

5.4％

4.0％

5.7％

7.0％

6.6％

722,955

657,456

658,811659,378

634,741

617,964

577,056

2018

2019

Change fromprevious fiscal year

Reduction attributable to the use of heat generated using biomass

33,286

27,833-16.4％

Reduction attributable to the use of electric power generatedusing biomass

7,936

7,848

-1.1％

Reduction attributable to the use of solar power

1,984

2,956

49.0％

Reduction attributable to the use of wind power

2,690

1,765

-34.4％

Reduction attributable to the use of small hydroelectric power

270

209

-22.4％

Total reduction attributable to the use of renewable energy

46,166

40,611-12.0％

Total global CO2 emissions

2

Energy Consumption and CO2 Emissions by the DIC Group in Japan(QHUJ\FRQVXPSWLRQE\WKH',&*URXSLQ-DSDQ²WKHVLWHVLQ-DSDQRSHUDWHGE\',&DQGGRPHVWLF*URXSFRPSDQLHV²LQ¿VFDO\HDUHGJHGGRZQIURP¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU(QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQWRWDOHG
*-WRQQHGRZQIURP¿VFDO\HDUDQGIURPWKHEDVH\HDU,QFRQWUDVW&22HPLVVLRQVE\WKH*URXSLQ-DSDQDPRXQWHG
WRWRQQHVGRZQIURP¿VFDO\HDUDQGIURP¿VFDO\HDUZKLOH&22 emissions per unit of production amounted toNLORJUDPVGRZQIURP¿VFDO\HDUDQGIURPWKHEDVH\HDU
3ULQFLSDOIDFWRUVEHKLQGWKHGHFOLQHLQ&22HPLVVLRQVE\WKH*URXSLQ-DSDQLQFOXGHGWKHLPSOHPHQWDWLRQRIHQHUJ\VDYLQJLQLWLDWLYHV
DWVLWHVDVZHOODVWKHVWDUWRIRSHUDWLRQVRIVRODUSRZHUIDFLOLWLHVDW¿YHVLWHVLQFOXGLQJWKH7DWHED\DVKL3ODQWZLWKDFRPELQHGDQQXDOJHQHUDWLQJFDSDFLW\RIN:$VRI'HFHPEHUWKHWRWDOJHQHUDWLQJFDSDFLW\RIVRODUSRZHUIDFLOLWLHVDW',&*URXSVLWHVLQ-DSDQZDVN: DOOIRULQWHUQDOFRQVXPSWLRQ 
Other contributing factors included the fact that the change in CO 2 emissions attributable to a decrease in production volume was
HVVHQWLDOO\OHYHOGHVSLWHDGHFOLQHLQSURGXFWLRQYROXPHRZLQJWRDQLQFUHDVHLQWKHSURGXFWLRQRIFRPSDUDWLYHO\HQHUJ\LQWHQVLYH
SURGXFWV,QDGGLWLRQDWWKH&KLED3ODQWDGHFUHDVHLQWKHLQFLQHUDWLRQRIZDVWHRLODQGZDVWHSODVWLFVXVLQJDURWDU\NLOQUHVXOWHGLQDGHFOLQH
LQHPLVVLRQVDWWULEXWDEOHWRWKHLQFLQHUDWLRQRIZDVWHHTXLYDOHQWWRRIWKH*URXS¶V¿VFDO\HDUSURGXFWLRQYROXPH
7KH',&*URXSLQ-DSDQSXUFKDVHVDWRWDORIPLOOLRQN:KRIHOHFWULFSRZHUIURPGRPHVWLFHOHFWULFSRZHUFRPSDQLHVDQQXDOO\ FRQWUDFWYROXPHN:K and when renewing annual electric power supply contracts selects suppliers based not only on costs but also low CO2
HPLVVLRQVIDFWRU,Q¿VFDO\HDUWKH*URXSZDVDEOHWRSXUFKDVHDJUHDWHUDPRXQWRIORZFDUERQHOHFWULFSRZHUWKDQLQWKHSUHYLRXVSHULRGZKLFKDFFRXQWHGIRUDGHFUHDVHLQGRPHVWLF&2 2HPLVVLRQV/RRNLQJDKHDGWKH*URXSZLOOFRQWLQXHZRUNLQJWRH[SDQGLWV
purchases of low-carbon electric power.

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

Factors
Decline in production volume
Decrease in incineration of waste oil and waste plastics (particularly at the Chiba Plant)
Implementation of 551 energy-saving initiatives at sites, including expansion of solar power facilities (1,440 kW)
Purchase of low-carbon electric power (including from existing electric power companies with improved CO2 emissions factors)
Decrease attributable to other efforts to increase efficiency
Increase in power generated using renewable energy (Hokuriku Plant)
Change in product mix (increase in output of energy-intensive products)
Decrease in power generated using renewable energy (Kashima Plant)
Change in CO2 emissions (tonnes)
Decline in CO2 emissions (%)
CO2 emissions in fiscal year 2018
CO2 emissions in fiscal year 2019

DIC Report 2020

81

-5,079-4,674-3,748-3,183-1,094
-370
5,429
1,675

Impact on CO2emissions (%)
-2.2%
-2.0%
-1.6%
-1.4%
-0.5%
-0.2%
2.3%
0.7%
-11,0444.8%
231,820
220,776

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

2014

2015

2016

2017

2018

2019 (FY)

120

110

100

90

89

90

80

70

CO2 emissions

Energy consumption
per unit of production

84
CO2 emissions
per unit of production

Key Energy-Saving Initiatives in Japan in Fiscal Year 2019No

Production Production floor
facility
Production process1

Tatebayashi

Energy-saving initiative

Reduction in
Reduction in
Category annual energy annual CO2
consumption (GJ) emissions (tonnes)

Details of initiative
A solar power system with generating capacity of 1,250 kW
was installed.
A 1,300-tonne electric injection molding unit was introduced,
replacing a hydraulic unit.

Electric
powerElectric
power

1,817

87

Optimization of dryer 15 airflow

The volume of steam used was reduced.

Heat

2,967

151

Utility control group

Improvement of steam trap management

Defective traps were replaced, reducing steam loss.

Heat

2,135

108

Kashima

DIC EP (J-3)

Increase in waste heat recovery

The temperature range of the waste heat recovery heat source was adjusted.

Heat

1,309

68

6

Kashima

Functional additives
production team 2

Shortening of production process times

Reduction of process time.

Electric
power

1,072

52

7

Chiba

J production floor

Change of steam branch line

The steam line for the P-34 tank yard was changed.

Heat

1,668

93

8

Chiba

D production floor

Stoppage of refrigerator 130

The refrigerator was shut down when not in use.

Electric
power

1,832

86

9

Chiba

C production floor

Optimization of methanol rectifying tower operation

The distillation rate was doubled, reducing steam use.

Heat

1,128

63

1,074

50

Utility control group

Installation of solar power system

2

Tatebayashi

DIC Plastics

Introduction of electric injection molding unit

3

Komaki

PPS compounds
production team4

Kashima

512,573597

Utility control group

Decrease in operation of electric IG compressors

Aged IG compressors were replaced.

11 Chiba

Utility control group

Installation of solar power system

A solar power system with generating capacity of
100 kW was installed on the roof of a laboratory.

Electric
powerElectric
power

986

46

12 Saitama

Coating team 1

Review of deodorizing system operation

The catalytic deodorizer was shut down when not in use.

Heat

1,824

91

1,686

82

830

41

10 Chiba

LC production teamReplacement of air-cooled chiller

The existing unit was replaced with a high-efficiency air-cooled module chiller.

Electricpower

14 Sakai

Utility control group

Replacement of flue boiler economizer

The aged economizer was replaced to improve waste heat recovery.

Heat

15 Hokuriku

Production team 3,
J production floor

Improvement of steam trap management

Leaking steam traps were replaced.

Heat

16 KJ Chemicals

M-5 plant

Replacement of two chillers

Two aged chillers were replaced with high-efficiency models.

17 Seiko PMC

Chiba ResearchLaboratory

Improvement of air conditioning system

Air conditioners were replaced, double-sash windows were
installed and the roof was insulated.

Electric
powerElectricpower

13 Saitama

3 Efforts to Promote the Use of Renewable Energy in Japan

632

31

1,243

58

1,610

76

Subtotal (17 key initiatives)

36,377

1,777

Others (539 initiatives)

38,224

1,971

Total (all initiatives in Japan)

74,601

3,748

Renewable Energy as a Percentage of Total Energy Used in Japan: 11.0%
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,Q¿VFDO\HDU',&FRPSOHWHGWKHLQVWDOODWLRQRIVRODUSRZHUV\VWHPVDW¿YHVLWHVLQ-DSDQ WKH7DWHED\DVKL&KLED6DLWDPDDQG<RNNDLFKLSODQWVDQG
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WRN:KIURPN:KLQ¿VFDO\HDU
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IURPWKHSUHYLRXV¿VFDO\HDU
,Q¿VFDO\HDU',&ZLOOLQVWDOOVRODUSRZHUIDFLOLWLHVDWDQDGGLWLRQDOVL[VLWHVLQ-DSDQ WKH6DNDLDQG.RPDNLSODQWVWKH&HQWUDO5HVHDUFK/DERUDWRULHVDQG*URXSFRPSDQLHV',&.\XVKX3RO\PHU&R/WGDQG',&.LWDQLKRQ3RO\PHU&R/WG WKH+RNNDLGRDQG7RKRNXSODQWV ZKLFKZLOODGGN: DOOIRULQWHUQDOFRQVXPSWLRQ WRWKH
*URXS¶VGRPHVWLFVRODUSRZHUJHQHUDWLQJFDSDFLW\EHJDQRSHUDWLQJLQ-DQXDU\*RLQJIRUZDUG',&ZLOOFRQWLQXHWRWDNHGHFLVLYHVWHSVWRDGYDQFHLWVXVHRIUHQHZDEOH
energy with the aim of achieving its long-term target for reducing emissions of CO2IURP',&*URXSVLWHVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
DIC Report 2020

82

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

40,00016

35,00010,616

11,46011,773
12,941

10,0001,840 tonnes

10

9,988

15,00021,937

24,78820,471

20,6942014

Reduction attributable to theuse of heat generated using
renewable energy

2015

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

7,847 tonnes

432,146 tonnes

2

0
2013

6

24,921

15,093

5,000

Electric power
generatedusing biomass

8

20,412

1,765 tonnes

12

11,453

10,46520,000Wind power

Solar power

14

30,00025,000

Breakdown of Reduction in CO2 Emissions in Japan Attributable to
the Use of Renewable Energy in Fiscal Year 2019

2017

2016

Reduction attributable to theuse of electric power generatedusing renewable energy

2018

0

2019 (FY)

Total reduction attributable to theuse of renewable energy(contribution to reduction in CO2 emissions (%))

Heat generatedusing biomass

In fiscal year 2019, the use of renewable energy accounted
for a reduction in CO2 emissions by the DIC Group in Japan of
12.7%, or 32,146 tonnes, to 220,776 tonnes.
[32,146 / (220,776 + 32,146)]

20,694 tonnes

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

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

2013

2014

2015

2016

2017

2018

2019

21,937

24,78820,412

15,093

20,471

24,921

20,694

10,616

11,46012,941

9,988

10,465

11,773

11,453

Total reduction attributable to the use of renewable energy

32,552

36,24833,35325,08130,936

36,69332,146

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

11.8%

12.4%

11.7%

9.4%

11.2%

13.7%

12.7%

244,377

255,114250,720

242,194

244,395

231,820

220,776

2018

2019

Change fromprevious fiscal year

Reduction attributable to the use of heat generated using biomass

24,921

20,694-17.0%

Reduction attributable to the use of electric power generatedusing biomass

7,936

7,847

-1.1%

Reduction attributable to the use of solar power

1,147

1,840

60.5%

Reduction attributable to the use of wind power

Total CO2 emissions by the DIC Group in Japan

2,690

1,765

-34.4%

Reduction attributable to the use of small hydroelectric power

0

0

-

Total reduction in attributable to the use of renewable energy

36,69332,146-12.4%Up to and including
fiscal year 2017

Fiscal year 2018

Biomass boiler

Kashima Plant

Hokuriku Plant

・Heat generated in fiscal year 2019:
452,000 GJ (generated using heat:
66%; generated using electric power: 34%)
・Electric power generating capacity
in fiscal year 2019: Approx.
4,000 kW (electric power generated:
15,695,000 kWh)・Steam produced: Maximum of 30 tonnes/hour

・ Steam produced: Maximum of 2.5
tonnes/hour
・ All steam produced used in
production processes(wood chip–fired)Wind power

・Approximately 70% of steam generated
used in production processes
・Remainder of steam produced used to power turbine
generating electric power for internal consumption
・Generating capacity: 4,000 kW

Fiscal year 2020

-

-

-

-

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

Kashima Plant

・Generating capacity: 4,600 kW
Electric power generating capacity infiscal year 2019: Approx. 4,600 kW ・Facility: Two 2,300 kW–capacity wind turbines(electric power generated: 3,530,000 kWh)

Kashima Plant
・Generating capacity: 100 kW

Solar power

Fiscal year 2019

DIC Decor

Electric power generating capacity in ・Generating capacity: 20 kW
fiscal year 2019: Approx. 4,495 kW(electric power generated: 3,364,000 kWh)-

Tatebayashi Plant

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

・Generating capacity: 1,270 kW

Chiba Plant

DIC Kyushu Polymer

・Generating capacity: 310 kW

・Generating capacity: 100 kW

DIC Kitanihon Polymer Hokkaido Plant

Central Research Laboratories

・Generating capacity: 250 kW

Saitama Plant

・Generating capacity: 200 kW

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

Yokkaichi Plant

・Generating capacity: 20 kW

DIC Report 202083

Sakai Plant

・Generating capacity: 325 kW

Total: 1,500 kW

Note: All facilities commenced
operation in January 2019.

DIC Kitanihon Polymer Tohoku Plant
Komaki Plant

・Generating capacity: 132 kW

Central Research Laboratories

・Generating capacity: 60 kW

Total: 1,277 kW

Note: All facilities commenced
operation in January 2020.

ESH

Installation of Solar Power Facilities in Japan(Fiscal Years 2017–2019)
Installed: Fiscal year 2017
(Start of operation: Fiscal year 2018)

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

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

1,277 kW

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

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

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

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

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

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

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

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

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

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

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

Sakai Plant
Location: Warehouse roof
Panels: 1,058
Generating capacity: 325 kW
Start of operation: January 2020

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

Building No. 6

Building No. 3

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

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

Warehouse 1

288 panels

216 panels

Warehouse 6③180 panels②180 panels
144 panels
Warehouse 4

Warehouse 972 panels

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

①69 panels

DIC Report 2020

84

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

ESH

4 Independent Electric Power Generation in Japan,Q¿VFDO\HDUHOHFWULFSRZHUFRQVXPSWLRQE\WKH',&*URXSLQ-DSDQGHFOLQHGIURPWKHSUHYLRXV¿VFDO\HDUWRN:K
DSSUR[LPDWHO\RIZKLFKZDVJHQHUDWHGLQGHSHQGHQWO\ZLWKHOHFWULFSRZHUJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\DFFRXQWLQJIRUDQG
WKDWJHQHUDWHGXVLQJFRJHQHUDWLRQV\VWHPVUHSUHVHQWLQJ:KLOHLQGHSHQGHQWO\JHQHUDWHGVRODUSRZHUZDVXSIURP¿VFDO\HDU
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Electric Power Used by the DIC Group in Japan by Energy Source(Thousand kWh)

300,000

Electric power generatedusing renewable energy
200,000

8%
Electric power generated
through cogeneration

17%

100,000

Purchased electric power

Breakdown ofElectric Power Used by
the DIC Group in Japanin Fiscal Year 2019by Energy Source

75%
0

2013

2014

2015

2016

2017

2018

2019 （FY）

Electric power generated using renewable energy (e.g., solar power and wind power)
Electric power generated through cogeneration
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established with the aim of encouraging the introduction of new energy and promoting awareness by commending particularly excellent initiatives.
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energy. These facilities also contributed to a reduction in annual CO 2HPLVVLRQVLQILVFDO\HDURIPRUHWKDQWRQQHV/RRNLQJDKHDGWKH
GHSDUWPHQWUHVSRQVLEOHIRUWKHSODQW¶VHQHUJ\VXSSO\ZLOOFRQWLQXHZRUNLQJWRHQKDQFHWKHFRPEXVWLRQHI¿FLHQF\RIJHQHUDWLQJIDFLOLWLHVLQFOXGLQJELRPDVVand methane gas boilers, by upgrading maintenance and management technologies and accumulating know-how.
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DIC Report 2020

85

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Leaks of Fluorocarbons by the DIC Group in Japan (CO2 Equivalent)(Tonnes of CO2)
1,000

(%)
200

900

180

800

160

700

140

600

120

500

100

400

80

300

60

200

40

100

20

0

2015
DIC

2017

2016

2018

DIC Group companies in Japan

2019

(FY)

0

Change from fiscal year 2015

6 Energy Consumption and CO2 Emissions by the DIC Group Overseas:LWKSURGXFWLRQYROXPHE\WKH',&*URXSRYHUVHDVLQ¿VFDO\HDUGRZQIURP¿VFDO\HDU&22HPLVVLRQVGHFOLQHGRU
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emissions reduction targets and promote decarbonization initiatives, the installation of solar power facilities with an annual generating capacity of
DSSUR[LPDWHO\N:E\6XQ&KHPLFDOLQWKH8QLWHG6WDWHVDQGWKHLPSURYHPHQWRIWKH&22 emissions factors of electric power consumed by
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and CO2 Emissions per Unit of Production Overseas Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019 (FY)

CO2 Emissions by Region(Tonnes)

2013

120

300,000

110

250,000

100

2014

2015

2016

2017

2018

2019 (FY)

200,00090
150,000
80

93

70

100,000

85

74

60

50,000050
CO 2 emissions

Energy consumption
per unit of production

Americas and Europe

CO 2 emissions
per unit of production

DIC Report 2020

86

Greater China

Asia–Pacific region

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overseas Group companies through energy-saving analyses and support for individual projects.
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energy management manual and best practice case study materials to establish management practices and promote horizontal deployment; and launching andproviding support for energy-saving and carbon-reduction projects at suitable sites.
Changes in CO2 Emissions, Energy Consumption per Unit of Production and
CO2 Emissions per Unit of Production in the Asia–Pacific Region Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019 (FY)

120
110
100
90
80

102
90

92

70
60
50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production

DIC Report 2020

87

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Energy-Saving Analysis Radar Chart (DIC Epoxy (Malaysia) Sdn. Bhd.)
1 Energy management
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

11 Power leveling

10 Boilers

2 Energy consumption

3 Substation

4 Light fixtures

9 Compressors

8 Electric motors

Full marks
TargetRoom for improvement
Average performance

5 Air conditioning
equipment
7 Cleaning towers 6 Refrigerationequipment(QHUJ\VDYLQJDQDO\VLVDW',&(SR[\ 0DOD\VLD

Energy-Saving Analysis Radar Chart (DIC Compounds (Malaysia) Sdn. Bhd.)
1 Energy management
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

11 Power leveling

10 Boilers

2 Energy consumption

3 Substation

4 Light fixtures

9 Compressors

8 Electric motors

5 Air conditioning
equipment
7 Cleaning towers 6 Refrigerationequipment(QHUJ\VDYLQJDQDO\VLVDW',&&RPSRXQGV 0DOD\VLD

Full marks
TargetRoom for improvement
Average performance*UHDWHU&KLQD
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GHFOLQHGIURP¿VFDO\HDURUIURP¿VFDO\HDU7KHIDFWWKDWHQHUJ\FRQVXPSWLRQGHFOLQHGGHVSLWHDKLJKHUSURGXFWLRQYROXPHZDVDWWULEXWDEOHSULPDULO\WRVLJQL¿FDQWLPSURYHPHQWVLQHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQDWPDQXIDFWXUHUV1DQWRQJ',&&RORUSLJPHQWVDQGLQNV DQG&KDQJ]KRX+XDUL1HZ0DWHULDO V\QWKHWLFUHVLQV ERWKRIZKLFKRSHUDWHODUJHVFDOHSURGXFWLRQIDFLOLWLHVLQWKHUHJLRQ
underpinned by the implementation of energy-saving measures.
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$VLQWKH$VLD±3DFL¿FUHJLRQWKH',&*URXSKDVFRQGXFWHGHQHUJ\VDYLQJDQDO\VHVLQ*UHDWHU&KLQDVLQFH¿VFDO\HDU,Q¿VFDO\HDU
DQHQHUJ\VDYLQJDQDO\VLVZDVFRQGXFWHGDW',&6\QWKHWLF5HVLQV =KRQJVKDQ ORFDWHGLQWKHVRXWKHUQSDUWRIWKH35&
Energy-Saving Analysis Radar Chart(DIC Synthetic Resins (Zhongshan) Co., Ltd.)

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

2014

2015

2016

2017

2018

1 Energy management

2019 (FY)

11 Power leveling

120
110

10 Boilers

100
90

5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

2 Energy consumption

3 Substation

4 Lighting

9 Compressors

80

96

70

99

89
8 Electric motors

60
50

CO2 emissions

Energy consumption
per unit of production

5 Air conditioning
equipment
7 Cleaning towers 6 Refrigerationequipment

CO2 emissions
per unit of production

DIC Report 202088

Full marks
TargetRoom for improvement
Average performanceESH(QHUJ\VDYLQJDQDO\VLVDW',&6\QWKHWLF5HVLQV =KRQJVKDQ$PHULFDVDQG(XURSH
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while CO2HPLVVLRQVGHFOLQHGIURP¿VFDO\HDUDQGIURPWKHEDVH\HDU',&*URXSFRPSDQLHVLQWKH$PHULFDVDQG(XURSHSURPRWHDYDULHW\RIPHDVXUHVZLWKWKHDLPRIORZHULQJ&22 emissions. These include making
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,QILVFDO\HDUWKH*URXS¶VUHJLRQDOKHDGTXDUWHUV6XQ&KHPLFDOLQVWDOOHGVRODUSRZHUIDFLOLWLHVZLWKDQDQQXDOJHQHUDWLQJFDSDFLW\RIDSSUR[LPDWHO\N:ZLWKWKHJRDORIH[SDQGLQJLWVXVHRIUHQHZDEOHHQHUJ\*RLQJIRUZDUGFRPSDQLHVLQWKH$PHULFDVDQG(XURSHZLOOFRQWLQXH
to implement ambitious initiatives that contribute to the reduction of its global CO2 emissions.
Changes in CO2 Emissions, Energy Consumption per Unit of
Production and CO2 Emissions per Unit of Production in theAmericas and Europe Since Fiscal Year 2013
2013

2014

2015

2016

2017

2018

2019 (FY)

120
110
100
90
80
70

73

60

80

74

50

CO2 emissions

Energy consumption
per unit of production

CO2 emissions
per unit of production

Sun Chemical’s Approach to Sustainability
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awareness of environmental impact. The company strives to use manufacturing processes that demonstrate environmental excellence throughreduced waste generation, lower energy and water use, and a strong safety performance as measured using key metrics such as greenhouse
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strategic direction.
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global framework for addressing the challenge of dealing with greenhouse gas emissions. This level, if implemented across all industries, would limit
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89

ESH

Sun Chemical Steps Up Investment in Renewable Energy by Introducing Solar Panels
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MWh of power, reducing CO2HPLVVLRQVE\DQHVWLPDWHGSRXQGV WRQQHV RYHU
the same period.

6RODUSDQHOVLQVWDOOHGRQWKHURRIRIWKH&DUOVWDGW5 'VLWH¶VSDUNLQJVWUXFWXUH| Adoption of Renewable Energy by DIC Group Companies Overseas$JDLQVWDJOREDOWUHQGWRZDUGGHFDUERQL]DWLRQLQFOXGLQJE\SRSXODUL]LQJWKHXVHRIUHQHZDEOHHQHUJ\',&*URXSFRPSDQLHVLQWKH$VLD±
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expand its solar power generating facilities worldwide.
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¿VFDO\HDUGRZQIURP*-LQ¿VFDO\HDU7KHXVHRIUHQHZDEOHHQHUJ\DFFRXQWHGIRUDUHGXFWLRQLQWKH*URXS¶V
global CO2HPLVVLRQVRIWRQQHVThe DIC Group’s Global Solar Power Generating Capacity(For Internal Consumption)(kW)

Energy Mix
DIC Group Overseas

DIC Group in Japan

As of January 31

13,00013,0001,277

11,00011,000

9,000

9,000

7,000
6,000

3,000

1,500

2,000
1,000
0

300

1,128
300

1,428

2016

2017

2018

Capacity as of the end of the previous fiscal year

5,168
2,928
2019

(Thousands of GJ)

2,240

4,000

(Thousands of GJ)

5,000

7,000

5,000

7,000

5,000

2020
3,000

3,000

1,000

1,000

Capacity added during the fiscal year

-1,000-1,0002013 2014 2015 2016 2017 2018 2019 (FY)2014 2015 20162017 2018 (FY)

Purchased heat (steam + cold/hot water)

Purchased electric power

Purchased heat (steam + cold/hot water)

Natural gas

Petroleum-based fuels

Natural gas

Petroleum-based fuels

Coal

Renewable energy (heat)

Coal

Renewable energy (heat)

Renewable energy (electric power)

DIC Report 2020

90

2013

Purchased electric power

Renewable energy (electric power)

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RI(QHUJ\FRQVXPSWLRQE\WKHHLJKWRIILFHVDQGUHVHDUFKIDFLOLWLHVRI',&*URXSFRPSDQ\6HLNR30&&RUSRUDWLRQGHFOLQHGRZLQJSULPDULO\WRWKHUHSODFHPHQWRIDLUFRQGLWLRQLQJHTXLSPHQWDQGOLJKW¿[WXUHVDWLWV&KLED5HVHDUFK/DERUDWRU\ZLWKKLJKHI¿FLHQF\XQLWV3ULQFLSDOHQHUJ\VDYLQJLQLWLDWLYHVLPSOHPHQWHGLQFOXGHUHSODFLQJDJHGOLJKW¿[WXUHVDQGDLUFRQGLWLRQLQJHTXLSPHQWZLWKQHZHUKLJKHI¿FLHQF\PRGHOVWKDWVDWLVI\VWDQGDUGVVHWE\WKH(QHUJ\&RQVHUYDWLRQ&HQWHU-DSDQ (&&- IRULWV7RS5XQQHUSURJUDPWXUQLQJRIIOLJKWVZKHQQRWQHHGHGDQGLPSOHPHQWLQJPDQGDWRU\&ZLQWHUDQG&VXPPHUDLUFRQGLWLRQLQJVHWWLQJVZRUNLQJZLWKIDFLOLW\PDQDJHPHQWFRPSDQLHVWRLPSOHPHQWGLOLJHQWHQHUJ\VDYLQJPHDVXUHVDQGSURPRWLQJHIIRUWVLQOLQHZLWK-DSDQ¶V&RRO%L]DQG:DUP%L]FDPSDLJQV

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

Emissions (Including Scope 3) in Fiscal Year 2019
7.3 %
0.1%
0.2%
0.7%
2.4%
3.4%
3.7%

40.0%
9.2%
CO2 Emissions
by the DIC Group(Including Scope 3)

33.1%(Total 3,565,705 tonnes)

DIC Report 2020

91

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

ESH

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

Reduce VOC emissions into the air.

Goal for fiscal year 2019

Achievement in fiscal year 2019

Evaluation

Goal for fiscal year 2020

DIC Group (Japan): 366 tonnes (essentially level with fiscal year 2018)

DIC Group (Japan):・Emissions attributable to normal activities
totaled 345 tonnes, down 6% from fiscal
year 2018.
・Owing to an accident involving a major fireat the Saitama Plant total emissions climbed
48%, to 541 tonnes.

★

DIC Group (Japan): 345 tonnes (essentially level with emissions attributable tonormal activities in fiscal year 2019)| Policies and Organization

Basic Approach
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5DWLRQDO8VHDQG3URSHU0DQDJHPHQWRI)OXRURFDUERQVDQGWKH/DZ&RQFHUQLQJ6SHFLDO0HDVXUHVIRU3URPRWLRQRI3URSHU7UHDWPHQWRI3&%:DVWHV²DQGRIVXEVWDQFHVWDUJHWHG
XQGHUDYROXQWDU\VFKHPHFUHDWHGE\WKH-DSDQ&KHPLFDO,QGXVWU\$VVRFLDWLRQ -&,$ 2WKHU',&*URXSFRPSDQLHVLQ-DSDQKDYHGRQHWKHVDPHVLQFH¿VFDO\HDU
7KH-&,$LVDJHQHUDOLQFRUSRUDWHGDVVRFLDWLRQ$VRQHRI-DSDQ¶VPDMRULQGXVWU\RUJDQL]DWLRQV-&,$LVDPHPEHURIWKH,QWHUQDWLRQDO&RXQFLORI&KHPLFDO$VVRFLDWLRQV ,&&$ DQGSXUVXHVWKHKHDOWK\GHYHORSPHQWRIWKHFKHPLFDOLQGXVWU\ZLWKRWKHUFKHPLFDO±LQGXVWULDORUJDQL]DWLRQVDURXQGWKHZRUOG| Framework for Promotion
7KHFKDLURIWKH6XVWDLQDELOLW\&RPPLWWHH SUHVLGHQWDQG&(2 RYHUVHHVWKHSODQQLQJDQGSURPRWLRQRIHQYLURQPHQWDOFRQVHUYDWLRQLQLWLDWLYHVE\WKH5HVSRQVLEOH&DUH'HSDUWPHQWDQGSURGXFWLRQDQG5 'VLWH6DIHW\DQG(QYLURQPHQWJURXSV7RHQVXUHFRPSOLDQFHZLWKSHUWLQHQWODZVDQGUHJXODWLRQVWKH5HVSRQVLEOH&DUH'HSDUWPHQWPRQLWRUVOHJDODQGUHJXODWRU\WUHQGVZRUOGZLGHWRHQVXUHVLWHVDUHDEOHWRFRPSO\SURPSWO\DQGHIIHFWLYHO\| Principal Initiatives in Fiscal Year 2019
1 Reducing Emissions of VOCs

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HPLVVLRQVPDQDJHPHQW
,Q¿VFDO\HDU',&UHSRUWHGHPLVVLRQVRI92&VDWWULEXWDEOHWRQRUPDODFWLYLWLHVRIWRQQHVEXWRZLQJWRDQDFFLGHQWLQYROYLQJDPDMRU¿UH
DWWKH6DLWDPD3ODQWLQ$XJXVWWKDWUHVXOWHGLQWKHLQFLQHUDWLRQRISURGXFWVDQGWKHUHOHDVHRI92&VLWVWRWDOHPLVVLRQVRI92&VDPRXQWHG
WRWRQQHVFOLPELQJIURP¿VFDO\HDU2ZLQJWRWKLVDFFLGHQWWRWDOHPLVVLRQVRI92&VE\WKH',&*URXSLQ-DSDQLQ¿VFDO\HDU
DPRXQWHGWRWRQQHVXSIURP¿VFDO\HDUGHVSLWHHPLVVLRQVDWWULEXWDEOHWRQRUPDODFWLYLWLHVEHLQJRQO\WRQQHV2YHUVHDV*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFRQWLQXHGWRSURPRWHHIIRUWVWRUHGXFHHPLVVLRQV,QWKH35&LQSDUWLFXODUWKH*URXSLVXSGDWLQJHTXLSPHQWDQGVWHSSLQJXSHPLVVLRQVPDQDJHPHQWSUDFWLFHVLQUHVSRQVHWRWKHWLJKWHQLQJRISHUWLQHQWORFDOUHJXODWLRQVEmissions of Targeted Chemical Substances into the Air(551 Substances, Including those Designated by the PRTR*, and One Substance Group)

Emissions of VOCs into the Air in Fiscal
Year 2019（Tonnes）
1,000

00
DIC

12

13

14

15

16

17

541

18

371

366

192

371

177

385

189

382

208

354

189

261

0

466

555
283

500

561

DIC

19

DIC Group (Japan)* -DSDQ¶V3575/DZUHTXLUHVUHSRUWLQJRQFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGXQGHUWKHFRXQWU\¶V3575VFKHPH

DIC Report 2020

92

(FY)

DIC Group (Japan)+ 93％
IURPÀVFDO\HDU+ 48％
IURPÀVFDO\HDUESH,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQPRQLWRUHGGLVFKDUJHVRIFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\WKHFRXQWU\¶V3575DQGRI3575
GHVLJQDWHGFKHPLFDOVXEVWDQFHV RWKHUWKDQFODVV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGE\WKH-&,$'XULQJWKHSHULRG',&DQG',&*URXSFRPSDQLHVLQ-DSDQSURGXFHGDQGRUXVHGDQGRIWKHVHVXEVWDQFHVUHVSHFWLYHO\LQXQLWVH[FHHGLQJWRQQH
Number of Targeted Chemical Substances Used
and/or Produced in Japan in Amounts Exceeding
1.0 Tonne in Fiscal Year 2019DIC

DIC Group (Japan)

103

117

Targeted Chemical Substances for Which Emissions
Exceeded 10.0 Tonnes in Fiscal Year 2019

Environmental Emissions of Targeted Chemical Substances(551 Substances, Including those Designated by Japan’s
PRTR, and One Substance Group) in Japan in Fiscal Year 2019

Emissions into the air
Emissions into water
Emissions into soil
Total

DIC

DIC Group(Japan)371tonnes
30tonnes
0tonnes
401tonnes

541tonnes
31tonnes
0tonnes
572 tonnes

DIC

DIC Group (Japan)

Emissions
into the environment

Emissions
into the environment

Ethyl acetate

137 tonnes

191 tonnes

Toluene98 tonnes

104 tonnes

Methyl ethyl ketone

69 tonnes

85 tonnes

Acetone18 tonnes

41 tonnes

Styrene7 tonnes

33 tonnes

Propyl alcohol

4 tonnes

17 tonnes

N-methylpyrrolidone

16 tonnes

16 tonnes

Butyl acetate

0 tonnes

13 tonnes

n-hexane

10 tonnes

13 tonnes

Substance

2 Reducing SOx, NOx and COD

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WKHTXDOLW\RIZDVWHZDWHU,Q¿VFDO\HDU',&¶VHPLVVLRQVRI62[DQG12[DPRXQWHGWRWRQQHVDGHFUHDVHRIIURP¿VFDO\HDUDQGWRQQHVGRZQ7KHGHFUHDVHLQ62[HPLVVLRQVUHÀHFWHGDVKLIWWRKLJKHUJUDGHIXHOVIRUELRPDVVERLOHUV7KDQNVWRWKHVHGHFOLQHVHPLVVLRQVRI62[DQG12[E\WKH
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SOx and NOx Emissions Volumes in Japan¿VFDO\HDUOHYHO+RZHYHURZLQJWRFKDQJHVWR
（Tonnes）
300
204
SURGXFWSRUWIROLRV',&¶V&2'LQFUHDVHGWR
202 183
186
185
186
202
177
200
WRQQHVZKLOHWKDWRIWKH',&*URXSLQ-DSDQURVH
156
150
168
142
147
137
127
144
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100
44 58 36 46
35 38
33 42
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8 12 2 8
10 14
0
ZDWHUTXDOLW\PDQDJHPHQW
90
13
14
15
16
17
18
19 (FY)SOx emissions
DIC
DIC Group (Japan)
2YHUVHDV',&*URXSFRPSDQLHVDUHVZLWFKLQJNOx emissions
DIC
DIC Group (Japan)
IXHO IURP GLHVHO WR QDWXUDO JDV DQG GLHVHO DQGKHDY\RLO±ILUHGERLOHUVWRELRPDVVERLOHUVDWVLWHV
COD in JapanZLWKDSSURSULDWHLQIUDVWUXFWXUH7RUHGXFH&2'WKH
*URXSLVSURPRWLQJWKHUHXVHRIZDWHUDQGLQVWDOOLQJ
1,000
HQYLURQPHQWIULHQGO\ FORVHGORRS UHF\FOLQJ DQGZDVWHZDWHUWUHDWPHQWV\VWHPVWKDWSXULI\ZDVWHZDWHU
500WRDOHYHOWKDWH[FHHGVWKDWPDQGDWHGE\ODZ
850

697

810

675

571

783

831

590

655

530

527

495

491

745

844

(Tonnes)

0

90
DIC

13
DIC Group (Japan)

DIC Report 2020

93

14

15

16

17

18

19

(FY)

ESH

3 Complying with Regulations Governing Emissions of Dioxins,Q-DSDQWKH',&*URXSPRQLWRUVHPLVVLRQVRIGLR[LQVIURPZDVWHLQFLQHUDWRUVWKDWSURGXFHWKHVHE\SURGXFWVDJURXSRIFRPSRXQGVZLWKYDU\LQJ
WR[LFLWLHV$WSUHVHQWWKH*URXSKDVVL[VXFKIDFLOLWLHV&RQWLQXRXVHIIRUWVWRUHGXFHHPLVVLRQVOHYHOVKDYHHQDEOHGWKH*URXSWRDFKLHYHUHVXOWVWKDWJUHDWO\VXUSDVVVWDQGDUGVVSHFL¿HGLQWKH$FWRQ6SHFLDO0HDVXUHV$JDLQVW'LR[LQV

Dioxins in Waste Gas and Wastewater Emissions from DIC Group Incinerators in Japan

Site

Chiba Plant (DIC)
Hokuriku Plant (DIC)

Scale of facility(Incinerating
capacity)

Waste gas

WastewaterStandard(ng-TEC/Nm3)

Emissions reported inÀVFDO\HDU QJ7(&1P3)

3.0 tonnes/hr

5

0.88

10

0.07

0.28 tonne/hr

5

0

10

0.01

Approx.

Standard(ng-TEC/l)Emissions reported inÀVFDO\HDU QJ7(&O

DIC Interior Co., Ltd.

Approx.

0.1 tonne/hr

10

0.3

NA

‒

Hokkaido Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 tonne/hr

10

0

NA

‒

Tohoku Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 tonne/hr

10

0.43

NA

‒

Harima Plant(Seiko PMC Corporation)

Approx.

0.2 tonne/hr

10

0.1

NA

‒

4

Ensuring the Appropriate Collection and Storage of PCBs

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5Responding to Asbestos Risks

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-DSDQ7KHVHPDWHULDOVZHUHGLVSRVHGRILQDFFRUGDQFHZLWKWKH2UGLQDQFHRQWKH3UHYHQWLRQRI+HDOWK,PSDLUPHQWGXHWR$VEHVWRV 0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH2UGLQDQFH1RRI 

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FKHPLFDOVGLVWULEXWLRQDQGUHWDLOLQGXVWULHV',&LVDPHPEHURIERWK-D,0(DQG&/20$ZKLFKHQVXUHVLWKDVDFFHVVWRWKHPRVWXSWRGDWHLQIRUPDWLRQ7KH&RPSDQ\KDVDOVRRUJDQL]HGSURMHFWVLQYROYLQJYDULRXVGHSDUWPHQWVFRQFHUQHGZLWKWKHFLUFXODUHFRQRP\WRSURPRWH
WKHFROOHFWLRQRISODVWLFVDQGVKLIWWRDOWHUQDWLYHDQGRUELRGHJUDGDEOHPDWHULDOVDIC Report 2020

94

ESH

Managing Industrial Waste
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives• Reduce industrial waste disposedof as landfill (“zero emissions”).
• Reduce industrial waste generated
by production facilities.

Promote recycling.

Goals for fiscal year 2019

Achievements in fiscal year 2019

• Reduce industrial waste disposed of as landfill.
DIC Group (Japan): 196 tonnes (-5% fromfiscal year 2018)• Reduce industrial waste generated by production facilities.
DIC Group (Japan): 31,689 tonnes (-2% fromfiscal year 2018)

Promote recycling at DIC Group companies.

Evaluation• Industrial waste disposed of as landfill
DIC Group (Japan): 217 tonnes (+6%from fiscal year 2018)• Industrial waste generated byproduction facilities
DIC Group (Japan): 34,586 tonnes(+7% from fiscal year 2018)• Impact of fire at Saitama Plant:+51,673 tonnes (+60% from fiscal
year 2018)★

• DIC Group (Japan) resource
recycling rate: 95% (+2.0 percentage points from fiscal year 2018)• A target was set for the resource
recycling rate.

★★

Goals for fiscal year 2020

• Reduce industrial waste disposed of as landfill.
DIC Group (Japan): 206 tonnes (-5% fromfiscal year 2019)• Reduce industrial waste generated byproduction facilities.
DIC Group (Japan): 33,894 tonnes (-2% fromfiscal year 2019)

Promote recycling at DIC Group companies
in Japan.

| Policies and Framework for Implementation
Basic Approach
In addition to recycling and reuse of materials, the DIC Group works to minimize the impact of its industrial waste disposal practices.
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| Principal Initiatives in Fiscal Year 2019
The DIC Group works to fully grasp and manage industrial waste from generation at production facility through to discharge, intermediate
WUHDWPHQWDQG¿QDOGLVSRVDODVODQG¿OO7KH*URXSZRUNVDFWLYHO\WRUHGXFHLWVGLVSRVDORILQGXVWULDOZDVWHDVODQG¿OOE\UHF\FOLQJFLQGHUVdust and sludge, among others, into roadbed materials and raw materials for cement, using thermal recycling to recover waste heat andminimizing production losses by increasing throughput yields.
Initiatives by the DIC Group in Japan,Q¿VFDO\HDUWKHWRWDOYROXPHRILQGXVWULDOZDVWHJHQHUDWHGE\',&*URXSSURGXFWLRQIDFLOLWLHVLQ-DSDQDVDUHVXOWRIQRUPDODFWLYLWLHVDWDPRXQWHGWRWRQQHVDQLQFUHDVHRIIURP¿VFDO\HDU$QDFFLGHQWRFFXUUHGDWWKH6DLWDPD3ODQWRQ$XJXVW
LQYROYLQJDPDMRU¿UHWKDWOHGWRWKHGLVFKDUJHRIDVLJQL¿FDQWYROXPHRIZDVWHZDWHUDQGVOXGJH$VDFRQVHTXHQFHWKHWRWDOYROXPHRILQGXVWULDOZDVWHJHQHUDWHGE\',&*URXSSURGXFWLRQIDFLOLWLHVLQ-DSDQFOLPEHGIURP¿VFDO\HDUWRWRQQHV,QFRQWUDVWEHFDXVHWKHJUHDWHUSRUWLRQRIZDVWHUHVXOWLQJIURPWKH¿UHZDVUHF\FOHGWKHWRWDODPRXQWRILQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OOE\*URXSFRPSDQLHVLQ-DSDQURVHRQO\WRWRQQHV*RLQJIRUZDUGWKH*URXSZLOODFFHOHUDWHHIIRUWVWRUHGXFHWKHYROXPHRILQGXVWULDOZDVWH
JHQHUDWHGE\VLWHVWKDWLVGLVSRVHGRIDVODQG¿OOLQOLQHZLWKLWVJRDORIDFKLHYLQJ]HURHPLVVLRQV
',&*URXSFRPSDQLHVLQ-DSDQDOVRFRQWLQXHGZRUNLQJWRHQVXUHWKHDSSURSULDWHGLVSRVDORI3&%V,QDGGLWLRQWKHVHFRPSDQLHVSURPRWHG
the rigorous management of unprocessed waste, including transformers, capacitors and stabilizers, through proper collection and storage indedicated warehouses.

DIC Report 2020

95

ESH

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

（Tonnes）
9,000

7,981

Industrial Waste Generated by Production
Facilities in Fiscal Year 2019
DIC Group (Japan)

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

97
183

97
148
100
204
75
217

1,288
312
991

tonnesFiscal year 2019

128
537
125
320

03

3,000

217

tonnesFiscal year 2019

1,560
2,296
02

75
537

IURPÀVFDO\HDU

4,190

+

3,426
4,326

5,581

60％

6,000

DIC Group(Japan)

DIC

07

09

16

17

0

00

01

04

05

06

08

10

11

12

13

14

15

18

19（FY）（Base year）

DIC

DIC Group (Japan)

Deployment of a Comprehensive Industrial Waste Management System

Comprehensive Industrial Waste Management System,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQUHVROYHGWRLQWURGXFH*(1(6<6(&2DFRPSUHKHQVLYHLQGXVWULDO
waste management system for use with the country’s(OHFWURQLF0DQLIHVW H0DQLIHVW V\VWHP7KHH0DQLIHVW
system manages the movement of industrial waste
by facilitating the electronic transmission of manifest
information and tracking of the flow of waste from
JHQHUDWLRQWR¿QDOGLVSRVDO8QOLNHSDSHUPDQLIHVWVWKH
H0DQLIHVWV\VWHPRIIHUVHDV\GDWDLQSXWDQGHOLPLQDWHV
the need for administrative reporting and storage by
JHQHUDWRUV,QILVFDO\HDU',&FRPSOHWHGWKH
GHSOR\PHQWRI*(1(6<6(&2DWDOORIWKH*URXS¶VPDQXIDFWXULQJVLWHVLQ-DSDQ,QDVXEVHTXHQWVXUYH\individuals using the new system gave it a generally
positive review.

Groupwide management ofwaste by typeManagement in accordancewith specific rules

System provider

DIC Group in Japan
Generators（JWnet）
Disposers

Corporate headquarters
Substances of value

Sites

Industrial waste

General waste

Sites

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

Management of permits and contracts

VOICE GENESYS ECO has helped to both save labor and ensure legal compliance.
2ZLQJWRWKHSDUWLDOUHYLVLRQRI-DSDQ¶V:DVWH0DQDJHPHQWDQG3XEOLF&OHDQVLQJ/DZ-DSDQHVHFRPSDQLHVZLWKVLWHVWKDWGLVFKDUJHWRQQHVRUPRUHRIZKDWLVFODVVL¿HGDV³VSHFLDOO\FRQWUROOHGLQGXVWULDOZDVWH´DUHREOLJHGWRLQWURGXFHWKHH0DQLIHVWV\VWHPE\$SULO
',&WRRNVZLIWVWHSVWRFRPSO\ZLWKWKLVUHTXLUHPHQWDFKLHYLQJIXOOVFDOHLQWURGXFWLRQLQ¿VFDO\HDU7KHIROORZLQJ\HDUZHH[SDQGHG
deployment to include Group companies and systematized manifest notification, thereby lowering the risk of legal violations. Further,simplifying procedures for issuing manifests and automating annual reporting to authorities has helped us to both save labor and ensurecompliance. However, because the timing of deployment has varied, the capabilities of pertinent personnel vary from one site to another.
$FFRUGLQJO\ZHZLOOWDNHVWHSVWRIXUWKHUVWDQGDUGL]HSURFHGXUHVDQGFRUUHFWGLVSDULWLHVLQVNLOOOHYHOV
Manager, Safety and Environment Group, Sakai Plant, DIC Corporation

Eiji Ishii

Initiatives by the DIC Group Overseas,QDGGLWLRQWRHQVXULQJWKHGLVSRVDORILQGXVWULDOZDVWHLQDPDQQHUWKDWFRPSOLHVZLWKQDWLRQDODQGUHJLRQDOOHJDODQGUHJXODWRU\UHTXLUHPHQWVWKH',&
Group’s overseas production facilities work to minimize industrial waste through the voluntary recycling and reuse of materials.
3URGXFWLRQEDVHVLQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQDUHLQWURGXFLQJQHZZDVWHWUHDWPHQWIDFLOLWLHVDQGSURPRWLQJWKH
horizontal deployment of best practices, including those aimed at improving production processes, with the aim of achieving reductions in industrial waste
JHQHUDWHG,Q¿VFDO\HDULQGXVWULDOZDVWHJHQHUDWHGE\',&*URXSSURGXFWLRQVLWHVRYHUVHDVGHFOLQHGWRWRQQHVRZLQJSULPDULO\WRWKHUHGXFWLRQRILQGXVWULDOZDVWHJHQHUDWHGLQWKH$PHULFDVDQG(XURSHDQGLQ*UHDWHU&KLQD7KHVDPHIDFWRUZDVEHKLQGDGHFUHDVHLQWRWDOYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OOE\WKH',&*URXSRYHUVHDVWRWRQQHV/RRNLQJDKHDGWKH',&*URXS¶VUHJLRQDOKHDGTXDUWHUVLQWKHVHUHJLRQV
will focus on further reinforcing compliance with local laws and regulations, while at the same time cooperating with DIC’s Responsible Care and production
PDQDJHPHQWGHSDUWPHQWVWRIXUWKHUFXUEWKHJHQHUDWLRQRILQGXVWULDOZDVWHDQGWKHGLVSRVDORIVXFKZDVWHDVODQG¿OOE\WKH',&*URXSRYHUVHDVDIC Report 2020

96

ESH

| Industrial Waste Generated by the Global DIC Group in Fiscal Year 2019
7KHGH¿QLWLRQRI³LQGXVWULDOZDVWH´²LQFOXGLQJZKHWKHULWHQFRPSDVVHVERWKWR[LFDQGQRQWR[LFVXEVWDQFHVDQGERWKKD]DUGRXVDQGQRQKD]DUGRXVVXEVWDQFHV²YDU\LQ
different countries and regions, as does the methods used to dispose of such waste. The DIC Group works to ensure the management of industrial waste in a manner
appropriate for the degree of danger posed and in accordance with the laws of the countries and regions in which its sites are located. The Group also grasps and manages
SURFHVVHVIRUPDQDJLQJLQGXVWULDOZDVWHRQDJOREDOEDVLVIURPJHQHUDWLRQWRGLVFKDUJHE\SURGXFWLRQIDFLOLWLHVLQWHUPHGLDWHWUHDWPHQWDQG¿QDOGLVSRVDODVODQG¿OO
7KHWDEOHEHORZSURYLGHVGHWDLOHGGDWDRQLQGXVWULDOZDVWHJHQHUDWHGE\WKH',&*URXSLQ-DSDQDQGRYHUVHDVLQ¿VFDO\HDU7KH*URXSFROOHFWVGDWDIRUYROXPH
JHQHUDWHGYROXPHGLVFKDUJHGE\SURGXFWLRQIDFLOLWLHVYROXPHUHF\FOHG PDWHULDOUHF\FOLQJ ZDVWHKHDWUHFRYHUHG LQFOXGLQJERLOHUUHFRYHU\RIZDVWHKHDWERLOHUIURPLQFLQHUDWLRQ ZDVWHKHDWQRWUHFRYHUHG LQFOXGLQJVLPSOHLQFLQHUDWLRQ DQGYROXPHGLVSRVHGRIDVODQG¿OOIRULQGXVWULDOZDVWHZKLFKLWFDWHJRUL]HVDV³WR[LF´RU³QRQWR[LF´Volume discharged
Volume generated
by production facilities(Tonnes)(Tonnes)Waste heatrecovered(Tonnes)Volume recycled(Tonnes)Waste heat notrecovered(Tonnes)Volume disposedof as landfill(Tonnes)Japan

55,085

45,10336,285

15,6882,911

201

Overseas

39,194

39,11916,341

2,535

2,657

17,661

Nontoxic

Japan

8,116

6,570

3,152

4,667

281

16

Overseas

29,92523,7098,631

10,691

8,031

2,572

Japan

63,202

51,67339,437

20,356

3,192

217

Overseas

69,11962,82824,972

13,226

10,687

20,233132,320

114,50164,40933,582

13,87920,450

Toxic

Aggregate

Total| Environmental Impact of Groupwide Environmental Initiatives

Production
volumeTotal energy consumption(crude oil equivalent)

4,184,000 GJ

OUTPUTDIC Group(Japan)INPUT

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

*Emissions into the air
CO2 emissions

tonnes from fiscal year 2018

Atmospheric emissions of targeted substances(551 substances and one substance group)-1.7

tonnestonnes from fiscal year 2018

* Renewable energy is not included in the above figure.

（-3.4％）

Wastewater discharged

26,235,000

27,925,000 ㎥

Production
volume1,008,000
tonnes（-2.1％）%
from fiscal year 2018

OUTPUT

INPUT

6,553,000 GJ -1.7

CO2 emissions

Wastewater
discharged

from fiscal year 2018

0

Emissions into soil

356,000 -7.7%

tonnes from fiscal year 2018

9,166,000 +8.9
tonnesfrom fiscal year 2018

Soil-related emissions of targeted substances(551 substances andone substance group)
tonnes+12.7

Emissions into water+6.2 %+6.4 %

tonnes(Toxic industrial waste included: 16 tonnes)

Emissions into the air

Total water
consumption

11,087,000 ㎥

217

Aquatic emissions of targeted substances(551 substances and%one substance group)
tonnes from fiscal year 201831

fiscalyear 2018-31.0 % from

Industrial waste disposedof as landfill-4.2%

m from fiscal year 20183

fiscalyear 2018-9.5% fromEmissions into soil

COD in+6.0 %
wastewater 850 tonnes from fiscal year 2018

fiscal-4.6 % fromyear 2018

DIC Group(Overseas)

tonnesEmissions into water

Total water
consumption

Total energy consumption(crude oil equivalent)

tonnesSOx emissions

541 +48.0% 7.9

from fiscal% year 2018

892,000

NOx emissions

221,000 -4.8% 183

Industrial waste
disposed of as landfill

20,233tonnes-19.0 %

the fiscal year 2018%from fiscal year 2018

(Toxic industrial waste
included: 2,572 tonnes)

 $ 3575 LV D VFKHPH IRU DVVHVVLQJ DJJUHJDWLQJ DQG GLVVHPLQDWLQJ GDWD RQ WKH VRXUFH RI KD]DUGRXV FKHPLFDOV DPRXQWV UHOHDVHG LQWR WKH HQYLURQPHQW DQG DPRXQWVtransferred off-site from industrial establishments via waste products.
 7KH³VXEVWDQFHVDQGRQHVXEVWDQFHJURXS´FRPSULVHVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\-DSDQ¶V3575DQG3575GHVLJQDWHGVXEVWDQFHV RWKHUWKDQFODVV DQGRQHVXEVWDQFHJURXSFKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGIRUVWXG\E\-&,$

DIC Report 2020

97

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

Goals for fiscal year 2019

Achievements in fiscal year 2019

Maintain a firm grasp of water
risks relevant to DIC Group
operations and ensure theeffective use of water resources.

・Further advance efforts to centralize data for
fresh water withdrawn, water used andwastewater discharged.
・Promote the conservation and effective useof water resources.

・The scope and accuracy of data collection
were enhanced.
・Steps were taken to promote the conservation and effective use of water resources.

Evaluation★★
★★

Goals for fiscal year 2020

・Enhance the accuracy of water management
and fully grasp the impact of water risks
relevant to DIC Group operations.
・Promote the conservation and effective useof water resources.

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

| Principal Initiatives in Fiscal Year 2019
8VDEOHIUHVKZDWHUDFFRXQWVIRURQO\DURXQGRIWKHHDUWK¶VWRWDOIUHVKZDWHUUHVRXUFHV$FFRUGLQJO\¿QGLQJHIIHFWLYHZD\VWRFRQVHUYHDQG
manage water resources is a crucial global challenge. The DIC Group withdraws fresh water (tap water and industrial water) for use in production
SURFHVVHVDQGDLUFRQGLWLRQLQJDQGIRUGULQNLQJDPRQJRWKHUV7KH*URXSDOVRGLVFKDUJHVZDVWHZDWHU²DIWHUSXULI\LQJLWLQDFFRUGDQFHZLWKLQWHUQDOVWDQGDUGVWKDWH[FHHGRI¿FLDOVWDQGDUGVLQWKHFRXQWULHVDQGWHUULWRULHVLQZKLFKLWKDVRSHUDWLRQV²LQWRULYHUVDQGRWKHUIUHVKZDWHUERGLHV,Q-DSDQ
WKH&HQWUDO5HVHDUFK/DERUDWRULHVLQ&KLED3UHIHFWXUHUHFRYHUVSXUL¿HGZDVWHZDWHU JUD\ZDWHU DQGUHXVHVLWRQVLWHLQUHVHDUFKDVDUHVXOWRIZKLFKLWFXUUHQWO\GLVFKDUJHVQRZDVWHZDWHUWKHUHE\UHGXFLQJLWVLPSDFWRQZDWHUUHVRXUFHV7KH*URXSDOVRSURPRWHVWKHUHF\FOLQJDQGUHXVHRIZDWHU
,Q¿VFDO\HDUWKH',&*URXSRQFHDJDLQXVHGWKH*5,¶VJXLGHOLQH 1WRFROOHFWGDWDRQZDWHUZLWKGUDZQDQGGLVFKDUJHG)UHVKZDWHUZLWKGUDZQE\WKHJOREDO',&*URXSLQWKHSHULRGDPRXQWHGWRP3DGHFOLQHRIIURP¿VFDO\HDU7KLVWRWDOFRPSULVHGZLWKGUDZDOVE\WKH',&*URXSLQ-DSDQRIP3GRZQDQGE\*URXSFRPSDQLHVRYHUVHDVRI
P3XS:DVWHZDWHUGLVFKDUJHGE\WKHJOREDO',&*URXSLQWKHSHULRGDPRXQWHGWRP3GRZQIURPWKHSUHYLRXVSHULRG
7KH*URXSKDVDOVRXVHGWKH$TXHGXFW  water risk assessment tool to map and
DQDO\]HLQLWLDOZDWHUULVNDWVLWHVZRUOGZLGHZKLFKDFFRXQWIRURILWVJOREDOSURGXFWLRQ:LWKWKHDLPRIHQKDQFLQJLWVDELOLW\WRPDQDJHZDWHUUHVRXUFHVWKH
*URXSDOVRUHYLHZHGWKHVWDWXVRIZDWHUUHF\FOLQJHIIRUWV/RRNLQJDKHDGWKH*URXS
will continue working to enhance initiatives designed to help protect and ensure theeffective use of precious water resources.
7KLVJXLGHOLQHLVLQFOXGHGLQWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV',&XVHVWKH:RUOG5HVRXUFHV,QVWLWXWH :5, $TXHGXFW:DWHU5LVN$WODVWRPDSZDWHUULVNVVXFKDVVWUHVVGURXJKWVDQGÀRRGVDWVLWHVZRUOGZLGH

Water risk map

Closed System Installed at the Central Research Laboratories$W',&¶V&HQWUDO5HVHDUFK/DERUDWRULHVJURXQGZDWHULVXVHGWRVXSSO\WKHDSSUR[LPDWHO\P3
RIZDWHUFRQVXPHGE\WKHVLWHGDLO\RIZKLFKLVIRU³GRPHVWLF´ JHQHUDO XVHDQGLVIRU
³UHVHDUFK´ LQGXVWULDO XVH'RPHVWLFZDVWHZDWHU JUD\ZDWHU LVUHFRYHUHGWUHDWHGXVLQJDFRPELQHG
VHSWLFV\VWHPDQGUHXVHGDVQRQSRWDEOHZDWHUIRUÀXVKLQJWRLOHWVZKLOHLQGXVWULDOZDVWHZDWHULVELRORJLFDOO\RUSK\VLFDOO\FKHPLFDOO\WUHDWHGSXULI\LQJLWWRDOHYHOFRPSDUDEOHZLWKWDSZDWHUDQG
WKHQUHXVHGLQUHVHDUFKIRUDPRQJRWKHUVFRROLQJDQGWKHZDVKLQJRILQVWUXPHQWV5HVLGXDOZDWHU
LVGLVSRVHGRILQWRWKHDWPRVSKHUHXVLQJDQHYDSRWUDQVSLUDWLRQGHYLFHWKH¿QDOFRPSRQHQWRIDIXOO\FORVHGV\VWHPWKDWPHDQVDOOZDWHULVWUHDWHGUHXVHGRUGLVSRVHGRIRQVLWH/RRNLQJDKHDGWKH
Central Research Laboratories will continue working to reduce the amount of water it withdraws by
SURPRWLQJWKHLQWURGXFWLRQRISXUL¿FDWLRQHTXLSPHQWWRLPSURYHWKHTXDOLW\RIUHXVHGZDWHUDIC Report 2020

98

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| Scope of Reporting for the Management of Water Resources(IIHFWLYHIURP¿VFDO\HDUWKH',&*URXSDGRSWHGDQHZIRUPDWIRUJDWKHULQJGDWDRQWKHPDQDJHPHQWRIZDWHUUHVRXUFHVEDVHGRQ
the GRI Guidelines that calls for collecting data on the withdrawal of fresh water by source and the discharge of wastewater by destination.
:LWKWKLVFKDQJHWKH*URXSDOVREHJDQFDOFXODWLQJZDWHUUHF\FOHGEXWYDULRXVGLI¿FXOWLHVSUHYHQWHGDFDOFXODWLRQRIWKHWRWDOYROXPH*RLQJ
IRUZDUGWKH*URXSZLOOFRQWLQXHWRWDNHVWHSVWRHQVXUHWKHDFFXUDF\RIWKLVFDOFXODWLRQ

Correction of Water Management Data for Fiscal Year 2018
6RPHRIWKHGDWDIRUIUHVKZDWHUZLWKGUDZQDQGZDVWHZDWHUGLVFKDUJHGE\WKH',&*URXSLQ-DSDQDQGWKHJOREDO',&*URXSSXEOLVKHGLQ',&5HSRUWZDVLQFRUUHFW7KHFRUUHFWHGGDWDLVVKRZQEHORZFresh Water Withdrawn and Wastewater Discharged by the DIC Groupin Fiscal Year 2018 (Data Published in DIC Report 2019)Fresh water withdrawn in fiscal year 2018 (1,000 m3)

Fresh Water Withdrawn and Wastewater Discharged by the DIC Groupin Fiscal Year 2018 (Corrected Data)

Wastewater discharged in fiscal year 2018 (1,000 m3)

DIC Group in Japan

Global DIC Group

Surface water

15,24819,790Rivers

18,871

21,139Groundwater

6,116

7,844

Oceans

7,077

7,078

0

0

External treatment
facilities

3,731

10,377

2,178

3,335

0

3

Rainwater
Wastewater generated byother organizations
Tap water/industrial water
Others
Total
Total in fiscal
year 2017
Change fromprevious fiscal year

7,458

24,05722

72

31,02255,09832,32741,308

-4.0%

33.4%

Fresh water withdrawn in fiscal year 2018 (1,000 m3)

DIC Group in Japan Global DIC Group

Below ground
Third parties
Others
Total
Total in fiscal
year 2017
Change fromprevious fiscal year

0

0

14

4,451

29,69443,04931,02538,822-4.3%

Wastewater discharged in fiscal year 2018 (1,000 m3)

DIC Group in Japan Global DIC Group
Surface water

15,24819,867

Rivers17,10919,377Groundwater

6,116

8,003

Oceans

7,077

7,078

External treatment
facilities

3,185

4,636

0

3

Rainwater00

Wastewater generated byother organizations

2,178

2,180

Below groundTap water/industrial water

5,697

9,575

Third parties

22

72

29,261

39,697

Others
Total
Total in fiscal
year 2017

10.9%

DIC Group in Japan Global DIC Group32,32741,308-9%-4%

Change fromprevious fiscal year

Others
Total
Total in fiscal
year 2017
Change fromprevious fiscal year

0

0

14

4,707

27,38535,802

31,02538,822-12%-8%

Fresh Water Withdrawn and Wastewater Discharged by the DIC Group in Fiscal Year 2019
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P 3 RI ZDVWHZDWHU D GHFUHDVH RI
 ,Q FRQWUDVW WKH ',& *URXS RYHUVHDVZLWKGUHZP3 RIIUHVKZDWHUXS
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DQ LQFUHDVH RI  +RZHYHU RZLQJ WR WKHVXEVWDQWLDO GHFOLQHV LQ -DSDQ IUHVK ZDWHUZLWKGUDZQE\WKHJOREDO',&*URXSVOLSSHG
WRP3ZKLOHZDVWHZDWHUGLVFKDUJHG
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Wastewater discharged in fiscal year 2019 (1,000 m3)

Fresh water withdrawn in fiscal year 2019 (1,000 m3)
DIC Groupin Japan

DIC Group
Overseas

GlobalDIC Group

Surface water

13,754

5,353

19,107Groundwater

6,214

1,776

7,990

0

3

3

2,295

0

2,295

5,642

3,926

9,555

20

29

49

27,925

11,08739,012

29,261

10,436

39,697

-5%

6%

-2%

Rainwater

Wastewater generated byother organizations
Tap water/industrial water
Others
Total
Total in fiscal
year 2018
Change fromprevious fiscal year

DIC Groupin Japan

DIC Group
Overseas

GlobalDIC GroupRivers

15,684

2,253

17,937

Oceans

6,882

2

6,884

External treatment
facilities

3,665

1,579

5,243

Below ground

3

8

11

Third parties

0

0

0

Others

0

5,326

5,326

26,235

9,166

35,401

27,3858,416

35,802

-4%

9%

-1%

Total
Total in fiscal
year 2018
Change fromprevious fiscal year

| Soil and Groundwater Pollution-DSDQ¶V:DWHU3ROOXWLRQ&RQWURO$FWZDVUHYLVHGLQWRWLJKWHQVWUXFWXUDOVWDQGDUGVJRYHUQLQJHTXLSPHQWLQVWDOOHGWRSUHYHQWJURXQGZDWHUFRQWDPLQDWLRQ
E\WR[LFVXEVWDQFHV,QDGGLWLRQWRFRPSO\LQJVWULFWO\ZLWKWKLV$FWDQGZLWKWKH6RLO&RQWDPLQDWLRQ&RXQWHUPHDVXUHV$FWWKH',&*URXSLQ-DSDQLPSOHPHQWV
soil and groundwater surveys and countermeasures as necessary and assesses related environmental and safety risks.

TOPIC

Installation of Wastewater Odor Scrubber at Qingdao DIC Liquid Crystal,QODWH2FWREHU4LQJGDR',&/LTXLG&U\VWDOLQYHVWHGDSSUR[LPDWHO\5P%WRLQVWDOODQRGRUVFUXEEHUDWLWVZDVWHZDWHUWUHDWPHQWIDFLOLW\LQDQHIIRUWWRSUHYHQWUHOHDVHLQWRWKHDWPRVSKHUHDQGPLQLPL]HHQYLURQPHQWDOLPSDFWDQGDOVRORZHUWKHULVNRIFRPSODLQWVIURPQHLJKERULQJFRPSDQLHV7KHVFUXEEHUFDSWXUHVRGRUVE\VHDOLQJWKHEDVLQVDQGWDQNVIURPZKLFKWKH\RULJLQDWH
LQFOXGLQJR[LGDWLRQVHGLPHQWDWLRQSLWVDQGIUHVKZDWHUSLWVDQGFROOHFWLQJIRXODLUYLDSLSHZRUNDQGIDQV0LFURRUJDQLVPVDUH
used to biologically remove odors from the collected air and the treated gas is discharged through an existing chimney. The
VFUXEEHUFRPPHQFHGRSHUDWLRQLQ-DQXDU\DVDUHVXOWRIZKLFKRGRUVKDYHEHHQHVVHQWLDOO\HOLPLQDWHGJUHDWO\LPSURYLQJWKH
environment in the vicinity of the company.

DIC Report 2020

99

Graywater pit after sealing and treatment to remove odors

ESH

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

| Preserving Biodiversity
Protecting Satoyama* Areas
The DIC Group recognizes the preservation of biodiversity as a critical challenge. As part of DIC Management School, the Group’s training module for senior management inJapan, in January 2011 a lecture was given by an outside expert on the relationship between corporate activities and biodiversity. The lecture was attended by 85 executives
from corporate headquarters, as well as from plants and Group companies across the country, and prompted the launch of a wide range of related initiatives. For example,
the same year brought the launch of an initiative designed to ensure an effective grasp of the relationship between the Group’s operating activities and biodiversity at allstages of its products’ life cycles, from R&D and the procurement of raw materials through to end-of-life
disposal or recycling. In April 2011, experts from the Chiba Biodiversity Center, a prefectural governmentorganization, observed the 30-hectare natural forest and gardens in Sakura, Chiba Prefecture,occupied by the Central Research Laboratories and the Kawamura Memorial DIC Museum of Art, giving
DIC’s biodiversity management efforts high marks and offering advice for future initiatives.
From the beginning, DIC has used a closed system for circulating and reusing groundwater for the&HQWUDO5HVHDUFK/DERUDWRULHVDQGKLUHGDZDVWHSURFHVVLQJ¿UPWRHQVXUHQRZDVWHZDWHUHVFDSHGIURP
the site. The site’s satoyamaODQGVFDSHPDNHVLWDQLGHDOKRPHIRUWUHHDQGÀRZHUYDULHWLHVDV
well as for an abundance of other wildlife, including birds and insects. Loved by the local community, thesite has welcomed approximately 200,000 visitors annually since the opening of the Kawamura Memorial
DIC Museum of Art in 1990.
The forest and gardens of the site occupied by the Central Research Laboratories

and Kawamura Memorial DIC Museum of Art is always alive with seasonalÀRZHUVDQGIROLDJH

* SatoyamaLVD-DSDQHVHWHUPDSSOLHGWRWKHDUHDEHWZHHQPRXQWDLQIRRWKLOOVDQGDUDEOHÀDWODQG

Establishment of a Biodiversity Satellite
The lush greenery of the Central Research Laboratories boasts a diverse range of naturally growing trees, including cedar, sawtooth
oak and Japanese chinquapin. To preserve the natural environment, visitors to the site are prohibited from collecting plants and wildlife
and are instead encouraged to enjoy the pristine natural scenery as is. In cooperation with the Chiba Biodiversity Center, the Kawamura
Memorial DIC Museum of Art established a biodiversity satellite, a special display area in a small rest cabin on the site. Designedwith the aim of fostering greater understanding of the importance of biodiversity, the satellite features permanent exhibits, including
information panels and other materials related to biodiversity prepared by the organization, as well as introduces rare species native to
Chiba and provides information on prefectural biodiversity initiatives.
Biodiversity satellite

DIC Report 2020

100

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

Goal for fiscal year 2019

Achievements in fiscal year 2019

Reduce CO2 emissions attributable
to logistics.

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

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

Evaluation★
★

Goal for fiscal year 2020

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

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

',&·V/RJLVWLFV&RQÀJXUDWLRQ

DIC’s Logistics
Department

Overseas
Group companies
SupporteﬀortsRegular safety
and environment
meetings

Conﬁrmation of
execution(Policy/initiatives/
discussions)Ɣ Loading and unloadingƔ Transport between production facilities
Ɣ Delivery of products(Ɣ Transport of purchased materials)
Others࡛ Domestic planning࡛ Overseas planning࡛ Global trading group(Exports/imports)

Product divisions

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

DIC Report 2020

101

ESH

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CO2(PLVVLRQVDQG(QHUJ\&RQVXPSWLRQSHU
8QLWRI3URGXFWLRQ$WWULEXWDEOHWR/RJLVWLFV(Tonnes)(GJ/10,000 tonne km)(%)

30,00030

25,00025

20,00020

CO2 emissions(tonnes)

15,00015

Energy consumption(GJ/10,000 tonne km)

10,00010Modal shift rate (%)

5,000

5

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0

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07

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11

12

13

14

15

16

17

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19 (FY)| Safety Management in Logistics
Safety Management Initiatives
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accident occurs. They provide contact details to ensure proper responses by transportation companies, firefighters and police officers if an
accident occurs during the transport of chemical substances. Transport personnel must carry these cards at all times.

DIC Report 2020

102

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Regular shipments of products usually involve issues such as damage and the soilingof packaging during transport. In response, DIC has explored the implementation of ameasures to counter such issues, including the use of cushioning and nonslip materials
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Company plans to expand the range of eligible products in the future.

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goal is to transform the Logistics Department into an entity that can respond swiftly to
VOICE Mychanges in the operating environment.
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DIC Report 2020

103

Kenichi Tsuruta

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Ensuring the Safety of Chemical Substances
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objectives of initiatives

Goals for fiscal year 2019

Achievements in fiscal year 2019

• Enhance functions of the comprehensive system for managing information
on chemical substances.
• Continue to expand deployment of theWercs at DIC Group companies overseas.

• Start creating a new global system that
integrates the functions of the comprehensive• A project was inaugurated and efforts to startsystem for managing information on chemicalcreating a new global system began.
substances for domestic products and the SDS• Deployment of the Wercs at Group companies
and label creation systems for export products.
in Greater China was completed as planned.
• Deploy the Wercs at DIC Group companies inGreater China.

• Review efforts to comply with regulations in Japan.
• Comply with regulations overseas• Thanks to efforts to revise the process for• Promote compliance with the revision of chemical gathering information and modify thesubstance volume reporting requirements in Act system for aggregating data, complianceon the Evaluation of Chemical Substances and was achieved by the deadline.
Regulation of Their Manufacture, etc.
• Advance registration of required chemical• Complete advance registration of chemical substances substances was completed.
to which K-REACH applies.
• Steps were taken to appropriately confirm• Promote compliance with Taiwan’s TCSCCA.
developments such as the issue of
guidance by local authorities.

Evaluation

★★★

★★

Goals for fiscal year 2020

• Continue working to create a new comprehensive
global system for managing information on
chemical substances.
• Deploy the Wercs at DIC Group companies
in the Philippines.

• Commence review of business flows between sites.
• Maintain status of chemical substances for which
advance K-REACH registration was completed and★★★
prepare to reregister existing chemical substances.
• Promote compliance with Taiwan’s TCSCCA.
★ ★
★★★

| Policies and Organization
Basic Approach
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| Managing Chemical Substances
1

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DIC Report 2020

104

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3

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105

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the WSSD goal for 2020, our priority will be to address the SDGs and other
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106

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107

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108

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VOICE We are working to expand legal compliance training.
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Manager, Chemical Management Group, Responsible Care Department, DIC Corporation

Hirofumi Higashino| Assessing and Managing Risks
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products.

| Socially Responsible Procurement,QOLQHZLWKWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\',&IRUPXODWHGWKH',&*URXS*UHHQ3URFXUHPHQW*XLGHOLQHVZKLFKSURKLELWWKH
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| Position on the Use of Animals in Testing,QOLQHZLWKWKH³5V´RIDQLPDOXVHLQUHVHDUFK ³5HSODFHPHQW5HGXFWLRQ5H¿QHPHQW´ ZKLFKDUHJXLGHOLQHVGHVLJQHGWRHQVXUHWKHPRUHHWKLFDOXVHRIDQLPDOVLQWHVWLQJWKH',&*URXSDFWLYHO\SURPRWHVVDIHHYDOXDWLRQXVLQJTXDQWLWDWLYHVWUXFWXUH±DFWLYLW\UHODWLRQVKLS 46$5 
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DIC Report 2020

109

ESH

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

| Information Disclosure and Engaging with Society
The DIC Group strives to increase the transparency of its activities through the active disclosure of information and at the same time
promotes dialogue with stakeholders by, among others, providing safety- and environment-related data through Group websites, the DIC
Report and other media, as well as by holding environmental presentations for local residents at production facilities.
The DIC Group also promotes a variety of efforts to deepen its engagement with society. In Japan, such efforts include preparing site
reports, inviting junior and senior high school students in for hands-on lab lessons, participating in community disaster drills and providing
assistance for local festivals and other local events. Overseas Group sites seek to advance dialogue and interaction with local communities
by participating in tree plantings and other activities aimed at helping prevent global warming and preserve biodiversity.

Bon odori event at DIC Graphics’ Tokyo Plant

Site reportComprehensive disaster drill for the Sakai–Senboku Special DisasterProtection Area hosted by the Sakai Plant

TOPIC
Responsible Care Regional Town Hall Meeting Is Conducted
In February 2019, the Komaki Plant conducted the 9th Responsible Care Aichi Regional Town Hall Meeting. The event was attended by approximately 70 individuals,
LQFOXGLQJJRYHUQPHQWRI¿FLDOVDQGUHSUHVHQWDWLYHVRIRWKHUFRPSDQLHVZLWKRSHUDWLRQVLQWKHDUHD,QKLVRSHQLQJUHPDUNV.RPDNL3ODQWJHQHUDOPDQDJHU.D]X\XNL2NXWDQLVDLG³6DIHW\DQGHQYLURQPHQWDOLQLWLDWLYHVDUHFULWLFDOIRUFKHPLFDOVPDQXIDFWXUHUV,QUHFHQW\HDUVGHPDQGVWKDWFRPSDQLHVDGGUHVV(6*UHODWHGLVVXHVKDYHLQWHQVL¿HGOur goal in holding today’s town hall meeting is to encourage a broad understanding of our efforts by regional stakeholders with the aim of ensuring peace of mind.”Responsible Care town hall meetings, which are sponsored by the JRCC, with the support of the JCIA, are held to provide details on chemicals manufacturers’
environmental conservation and disaster prevention initiatives with the aim of deepening understanding between manufacturers and stakeholders in the communities
where they have production facilities. The 2019 event was the ninth held by DIC in Aichi Prefecture. As an active proponent of Responsible Care, DIC will continue to
conduct town hall meetings as a way of engaging with local stakeholders.

9th Responsible Care Aichi Regional Town Hall Meeting

Town hall meeting participants

DIC Report 2020110

Quality
Enhancing Product Quality and Customer Satisfaction

Goals and Achievements of Major Initiatives
Objective of initiatives

Secure product quality.

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

Goals for fiscal year 2019

Achievements in fiscal year 2019

Reinforce the quality assurance framework by, among others, modifying thecorporate culture and improving employee ethics, and continue to implement
quality audits to prevent quality issues
from arising.

Three slogans were formulated to increaseawareness, which employees were encouraged
to repeat as a way to boost morale. Guidelines
for the creation of delivery specifications wererevised and put into use.

Ensure a level of quality that fulfills the DIC
Group’s corporate social responsibility. Collectand organize information on raw materials
pertinent to safety, compliance with laws andregulations, and environmental protection andprovide appropriate product information.

Efforts to maintain the provision of appropriate product information proceeded apace,including through the use of CIRIUS to
manage information on raw materials andprovide appropriate product information.

Evaluation

Goals for fiscal year 2020★★

Prevent quality problems from arising bystrengthening the quality assurance
framework and conducting quality auditsthat reflect a strong awareness of thecustomer’s perspective.

★★★

Provide products and services that delivera level of quality that matches the expectations and meets the needs of both customers and society.

Basic Approach
Along with its Environment, Safety and Health Policy, the DIC Group views the improvement of product quality as a theme that is essential to upholding a sound operating foundation.
Accordingly, the Group seeks to ensure every employee shares the sentiment conveyed in its Quality Policy and works continuously to enhance quality and ensure customer satisfaction.

DIC’s Quality Policy

Contribute to the prosperity of customers and society by consistently providing reliable products (Updated in May 2015)| Framework for Promotion
To better leverage its agility and comprehensive capabilities, DIC has established a matrix-like quality
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Unit and Production Management Unit on the horizontal axis. DIC introduced this configuration in fiscal
year 2015, establishing the Quality Assurance Department within the Production Administration Division(today’s Production Management Unit) and quality assurance groups within individual product divisions. This
framework enables swift and effective responses to quality issues.
Based on the Group’s quality management system (QMS) for product divisions, the quality assurancegroups oversee product-specific quality management, while the Quality Assurance Department provides
external monitoring of production facilities, ensuring that those plant certified under ISO 9001, theInternational Organization for Standardization’s benchmark for quality management systems, maintain aconsistent level of quality management by conducting regular audits of the status of the product divisions’
QMS. In addition to facilitating prompt and appropriate quality management, this division of Groupwide andSURGXFWVSHFL¿FTXDOLW\PDQDJHPHQWHQFRXUDJHVFORVHFRPPXQLFDWLRQDPRQJGHSDUWPHQWVEnhancequality

Product
divisions’
QMS

Ensurecustomersatisfaction

Production facilities certified under ISO 9001

Production Management Unit
andTechnical Management Unit

| Quality Assurance and Quality Improvement Initiatives
The Quality Assurance Department conducts regular product quality audits of production facilities and Group companies in Japan and extends advice regarding
corrective measures. Monitoring helps to ensure that plant QMS are functioning effectively, while support is extended to lift product quality levels, thereby further
improving customer satisfaction. Overseas, DIC Group companies work with the Quality Assurance Department and the product division quality assurance groups to
SURPRWHDYDULHW\RIHIIRUWVDLPHGDWDFKLHYLQJIXUWKHULPSURYHPHQWV,Q¿VFDO\HDUDSURGXFWTXDOLW\DXGLWZDVFRQGXFWHGDWRQHRYHUVHDV*URXSFRPSDQ\LQWKH
eastern part of PRC. The implementation of corporate product quality audits as well as internal plant and Group company audits prevents issues from being overlooked.
7KH4XDOLW\$VVXUDQFH'HSDUWPHQWLVFXUUHQWO\ZRUNLQJWRFUHDWHDFRPPRQ406IRU*URXSZLGHXVH,Q¿VFDO\HDUWKHGHSDUWPHQWWRJHWKHUZLWKWKHTXDOLW\
DVVXUDQFHJURXSVDQGWKH,QIRUPDWLRQ6\VWHPV'HSDUWPHQWEHJDQWDNLQJVWHSVWRGHYHORSDV\VWHPIRUYHULI\LQJVWDQGDUGVZKHUHE\EDVHGRQGHOLYHU\VSHFL¿FDWLRQVVHWIRUWKLQFRQWUDFWVZLWKFXVWRPHUVTXDOLW\DVVXUDQFHSHUVRQQHOZLOOYHULI\WHVWLQJPHWKRGDQGWHVWUHSRUWVSHFL¿FDWLRQVDQGYDOXHVDVZHOODVWHVWSURGXFWVDQGUHSRUW
results as contractually required. The Group began using the new system in March 2020.
DIC Report 2020111

Quality

1

Initiatives Aimed at Increasing Customer Satisfaction

DIC’s system for ensuring
customer satisfaction

Aspects visible
to customers

To provide high-quality products that customers feel secure using, DIC promotes a variety of quality improvement initiatives during product planning,
design and development, the procurement of raw materials, production and sales, giving consideration to the need for effective product stewardship.
Relevant product division quality assurance groups participate in design reviews from the initial stages of development, conducting rigorous
HYDOXDWLRQVDWHDFKVWDJHZLWKWKHJRDORIGHOLYHULQJWKHTXDOLW\WKDWFXVWRPHUVVHHNDQGPDNLQJQHFHVVDU\PRGL¿FDWLRQV$IWHUSURGXFWVDUHVROGFXVWRPHUDQGPDUNHWDVVHVVPHQWVDUHJDWKHUHGDQGIHGEDFNWRGHYHORSPHQWGHSDUWPHQWVWRIDFLOLWDWHIXUWKHUTXDOLW\LPSURYHPHQWV,Q¿VFDO\HDU
2019, DIC conducted quality audits of seven raw materials suppliers.

Requests from customers/markets and society
Information from customers
Requirements

Output from DIC
Products

Sales
strategies
Planning
andproposals

Qualityassurance
Design anddevelopment

Marketing

Production

Contents/composition
Container/mode of packing
Consideration of environment
Workability and conveniencein handling
Disposal after use
Safety level of raw materials
Conformity to laws and regulations
Productivity and capacity
Safety and stability of processes
Costs/stable supply

SDSs
Technical
documents

Labeling
Packaging
Sample for
evaluation test

Design review
Validation
Control of changes

Product evaluation
Trial production
Mass trial production

Contract /delivery
specifications
COAs (Certificates of analysis)
SDSs
Catalogs
Products

Production/quality
confirmation Products

DIC website
Customer
お客様 相consultation
談 情報
information
Technical service
Quality validation

Requests for improvement
Requests for cost reduction
Dealing with customer
information
Top management diagnosis/
internal audit
Market requirements
Self-regulation of industry

Business activities of DIC aimed at delivering high-quality products that are safe and reliable(QVXULQJD/HYHORI4XDOLW\WKDW)XOÀOOVWKH',&*URXS·V&RUSRUDWH6RFLDO5HVSRQVLELOLW\
To provide SDSs based on appropriate, up-to-date product information, the Quality Assurance Department collaborates with technical and purchasing
departments to collect and organize information on raw materials pertinent to safety, compliance with laws and regulations, and environmental
SURWHFWLRQ',&KDVHVWDEOLVKHG&,5,86WRPDLQWDLQVXFKLQIRUPDWLRQZKLFKLWUHÀHFWVLQLWV6'6V2

3

Efforts to Enhance Product Quality–Related Educational Initiatives

Committed to providing safe, secure products that satisfy its customers, DIC recognizes the importance of ensuring that employees maintain a highawareness of quality, as well as a constant commitment to achieving further quality improvements and upholding high quality standards. To this end, theCompany provides education regarding product quality as part of training for newly hired and newly promoted employees and at production facilities aspart of annual training plans.
6LQFH¿VFDO\HDU',&KDVRIIHUHGWUDLQLQJOHGE\H[WHUQDOH[SHUWVLQWKH¿HOGIRUHPSOR\HHV
involved in quality management. Approximately 40 individuals participate in such training annually,
ZLWKDFXPXODWLYHWRWDORIWDNLQJSDUWWRGDWH6LQFH¿VFDO\HDUWKH&RPSDQ\KDVDOVRKHOG
meetings for individuals responsible for quality assurance on the front lines to facilitate communication,
thereby helping resolve issues encountered in everyday work and improving motivation. Going forward,',&ZLOOFRQWLQXHWRLPSOHPHQWLQLWLDWLYHVWRVWUHQJWKHQWKHDELOLW\QRWRQO\RITXDOLW\DVVXUDQFHRI¿FHUV
but also of all plant employees to see things from the customer’s perspective. The Company will also
work to foster a mindset that quality is the foundation of effective management by, among others,
encouraging the reading of DIC’s Quality Policy during plant morning assemblies and meetings.
4*OREDO4XDOLW\,QLWLDWLYHV &HUWLÀFDWLRQ8QGHU,62

DIC Group companies in Japan, Greater China and the Asia–Pacific region are working to earn
certification under ISO 9001 and establish a global product quality assurance framework, thereby
ensuring a level of quality that meets customers’ demands. Group companies are also taking active
VWHSVWRFRPSO\ZLWK,62LQGXVWU\DQGSURGXFWVSHFL¿FVHFWRUVWDQGDUGV/RRNLQJDKHDG*URXS
companies will continue to collect information on market quality requirements, while DIC will provide
support for efforts reinforcing the quality assurance framework.

DIC Report 2020

112

Percentage of DIC Group Companies with
3URGXFWLRQ&DSDELOLWLHV&HUWLÀHG8QGHU,62
DIC

100%

DIC Group Companies
in Japan and Overseas

93%Quality

5

3UHYHQWLQJWKH5HFXUUHQFHRI4XDOLW\3UREOHPVIn line with its risk management policy, the DIC Group has established procedures for responding to serious quality-related issues, enabling
it to respond effectively in emergency situations. To uncover the causes of everyday quality problems when complaints and criticisms arereceived, the Group employs “why-why analysis” (“naze-naze bunseki”) to examine problems logically and from multiple perspectives, which
not only uncovers direct causes but also illuminates underlying issues, making it possible to take corrective actions to prevent recurrence.
The Group has also adopted statistical process control (SPC), a quality monitoring and control methodology based on the analysis of data, toimprove the stability of product quality and avert related issues. From design and development through to sales, thanks to the cooperation ofcustomers when processes are revised, the Group places a high priority on monitoring quality changes.

&KDQJHLQWKH1XPEHURI4XDOLW\3UREOHPV&KDQJHLQWKH1XPEHURI3URGXFW5HWXUQV&KDQJHLQWKH1XPEHURI&RPSODLQWV5HFHLYHG(Base year: Fiscal year 2011)
0
ー10

（%）

-10

ー20

ー10

-32
-57

ー30

(Base year: Fiscal year 2011)
0-56 -62-59 -51

-58

（%）

-10

ー20

-27

ー30

ー40

ー40

ー50

ー50

-46

-45

-37

-36

-37

-50

14

15

16

17

18

19 （FY）

ー60
ー70
12

13

14

15

16

17

18

19 （FY）

12

13

Why-why analysis (“naze-naze bunseki”)

VOICE 2XUIRFXVLVRQPRQLWRULQJTXDOLW\FKDQJHVThe Composite Material Products Division provides a broad range of highly functional processed products that integrate core DIC Group technologies,
which it supplies customers in niche markets in such diverse sectors as electronics, home appliances, automobiles, construction and housing. TheseLQFOXGHLQGXVWULDODGKHVLYHWDSHVKROORZ¿EHUPHPEUDQHPRGXOHVGHFRUDWLYHERDUGVDQGLQWHULRUKRXVLQJSURGXFWVGHFRUDWLYHVKHHWVDQGGHFRUDWLYH
¿OPV60&VDQGPROGHGSODVWLFSURGXFWV)RUDOORIWKHVHSURGXFWVZHPXVWEHDEOHWRGHOLYHUDOHYHORITXDOLW\WKDWPHHWVWKHVSHFL¿FDQGH[DFWLQJ
needs of customers, as well as to ensure stable quality. Accordingly, it is critical that every individual involved in production approaches their work fromtheir own unique perspective with a sophisticated understanding of the importance of quality and a sense of responsibility, to ensure robust quality
management across the entire supply chain, from planning and development through to procurement, production, sale, use and disposal or recycling.
The Composite Material Products Division’s quality assurance group will continue working to ensure compliance with rules and procedures andWRNHHSWKHSURPLVHVZHKDYHPDGHWRFXVWRPHUVZKLFKDUHUHÀHFWHGLQSURGXFWGHOLYHU\VSHFL¿FDWLRQVDVZHOODVWRSURPRWHTXDOLW\DVVXUDQFH
LQLWLDWLYHV7KURXJKVXFKHIIRUWVZHZLOOVWULYHWRHQVXUHWKDWFXVWRPHUVFDQXVHRXUSURGXFWVZLWKSHDFHRIPLQGDQGFRQ¿GHQFHLQWKHLUUHOLDELOLW\Group Manager, Composite Material Quality Assurance Group 1, Composite Material Products Division, DIC Corporation

DIC Report 2020

113

Shinichi Ichihara

Human Resources Management

SDGs Goals 3, 4, 5, 8 and 10

Working to Enhance Job Satisfaction

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

Evaluation

Goals for fiscal year 2020★★

• Promote awareness of global trends in human rights.
• Conduct human rights due diligence and take steps
to reduce the risks that human rights–related
issues pose.
• Ensure a grasp of differences in the status of efforts
to protect human rights at Group companies.

• A human resources database for management-level(i.e., manager or higher) employees was created forJapan, the Asia–Pacific region and Greater China.
• The Group continued to offer global humanresources development programs.

★★★

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

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

• The Group continued to offer the GCD Program.
• The Group continued to provide training aimed at
fostering global human resources at multiple levels.

★★

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

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

• Continue to implement the program to foster
female leaders.
• Use roundtable discussions for directors tomanage the progress of efforts to promote
career opportunities for female employees.
• Introduce leave for employees to accompany
spouses overseas.

• The Group continued to offer a program tofoster female leaders.
• The Group continued to conduct roundtablediscussions for directors.
• Leave for employees to accompany spouses
overseas and a system that allows employees to take paid leave in hourly increments
were introduced.

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

Work with the Japanese government’s Hello
Work public employment security offices, aswell as special needs schools and otherorganizations, to promote the hiring ofindividuals with disabilities, to maintain theemployment rate for individuals with disabilities at 2.4% of DIC’s total labor force.

• Steps were taken to strengthen cooperation withspecial needs schools, including introducing aninternship program.
• DIC promoted the exchange of information withother companies hiring individuals with disabilities.
• As of December 31, 2019, individuals with disabilities accounted for 2.6% of DIC’s total labor force.

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

Goals for fiscal year 2019

Achievements in fiscal year 2019

• Reinforce awareness of the human rights policy.
• Use ESG human rights training to encourageawareness of the policy among executives
and other pertinent individuals.
• Provide tailored guidance based on the
results of voluntary human rights inspections.

Steps were taken to disseminate the DIC
Group’s human rights policy and self-checks
using a human rights checklist were conducted
at 57 Group companies around the world.

Announce and begin implementing WING, a
new strategy designed to rally diverse
human resources as the source of DIC’s
competitiveness as a global organization.

★★★

★★★

• Use roundtable discussions for directors toensure a grasp of the status of efforts topromote diversity in each department andconsider measures.
• Promote work style reforms.

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

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

| Strategies for a Stronger Management Infrastructure
In line with The DIC WAY, which represents its fundamental management policy, the DIC Group has established a global human resources management
IUDPHZRUNXQGHUZKLFK*URXSFRPSDQLHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDUHRYHUVHHQE\',&ZKLOHWKRVHLQ1RUWK$PHULFD(XURSH
Central and South America, and Africa are overseen by Sun Chemical of the United States. The DIC111 medium-term management plan, which was
LQWURGXFHGLQ)HEUXDU\VHWVIRUWKDVWUDWHJ\GXEEHG:,1*WKDWLVGHVLJQHGWRUDOO\WKH*URXS¶VGLYHUVHKXPDQUHVRXUFHVDVDVRXUFHRILWV
FRPSHWLWLYHQHVVDVDJOREDORUJDQL]DWLRQ:,1*FHQWHUVRQIRXUFRUHWKHPHVVXPPDUL]HGDV³ZRUNVW\OHUHIRUP´³+5LQIUDVWUXFWXUHUHIRUP´³QH[WPDQDJHPHQWVHOHFWLRQ´DQG³JOREDOWDOHQWGHYHORSPHQW´

DIC Report 2020114

Human Resources Management

WING: DIC111 Strategies for Human Resources Management

Work Style Reform

HR Infrastructure Reform

Reform work styles to capitalize on diversified individuality

Adopt a global human resources system and unify Group system■

Reform jobs with digital tools.

■

Consolidate employee qualification systems globally.

■

Reform working conditions by introducing a telework and flexible working hours.

■

Unify qualification standards and assessment formats for management-level employees.

■

Shift focus of evaluation from quantity to quality.

■

Develop IT system for global human resources platform.

■

Support employees who have childcare or nursing care responsibilities or suffer illness, etc.

Global Talent Development

Next Management Selection

Develop global human resources

Establish system to appoint the next management team■

Clarify requirements for employees in key positions.

■■

Establish selection and monitoring processes for high-potential employees.

■■

Use talent review to optimize combination of positions and employees.

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

Progress in Fiscal Year 2019
① Work style reform,QWURGXFHGOHDYHIRUHPSOR\HHVWRDFFRPSDQ\VSRXVHVRYHUVHDVDQGVKRUWWHUPSDLGOHDYHSURJUDPVDQGLPSOHPHQWHGLQLWLDWLYHVWRSURPRWHWHOHZRUNV\VWHPDQGDZDUHQHVVRIÀH[LEOHZRUNLQJRSWLRQV② HR infrastructure reform
・%XLOWKXPDQUHVRXUFHVGDWDEDVHIRUPDQDJHPHQWOHYHODQGKLJKHUHPSOR\HHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ・&UHDWHGJOREDOXQL¿HGDVVHVVPHQWV\VWHPIRUHPSOR\HHVLQNH\SRVLWLRQV③ Next management selection
Reinforced approach to selecting new management candidates by enhancing training for such candidates and expanded scope of human resources assessments④ Global talent development
Augmented existing development programs for global human resources by considering a method of assessing language ability, including conversational prowess

Basic Personnel Statistics (DIC)

Male
Number of
employees

FemaleTotal
Male

Average age

FemaleTotal

Averageyears ofemployment

New
graduates
hired

Male
FemaleTotal
Male
FemaleTotal

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

2,618
655
3,273
42.2
41.3
42.0
18.2
19.2
18.4
39
11
50

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

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

Retention rate
(after three
years)
Separations(voluntary)(number ofindividuals)

Male
FemaleTotal
Male
FemaleTotal
Male

Separation rate(voluntary)

FemaleTotal

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

(Fiscal year 2014 hires)(Fiscal year 2015 hires)(Fiscal year 2016 hires)

79.2%
100%
83.5%
35
11
46
1.3%
1.7%
1.4%

87.8%
81.0%
86.3%
55
15
70
2.1%
2.3%
2.1%

97.2%
76.9%
91.8%
45
16
61
1.7%
2.3%
1.8%

| Respect for Human Rights
The DIC Group actively supports global codes governing human rights*1LQOLQHZLWKZKLFKLQ¿VFDO\HDULWIRUPXODWHGWKH',&*URXS+XPDQ5LJKWV3ROLF\DQGEHJDQSURPRWLQJUHODWHGLQLWLDWLYHV7KH',&*URXS&RGHRI%XVLQHVV&RQGXFWZKLFKRXWOLQHVVWDQGDUGVWKDW',&
Group employees are expected to observe, lays down provisions prohibiting human rights violations and requiring respect for diversity, two
SKLORVRSKLHVWKDWDUHWKHIRXQGDWLRQRIWKH*URXS¶VFRUSRUDWHDFWLYLWLHV',&*URXSHPSOR\HHVDUHREOLJHGWRXQGHUVWDQGDQGSURYLGHZULWWHQ
pledges to abide by the code.
,Q¿VFDO\HDU',&EHFDPHDVLJQDWRU\WRWKH81*&SOHGJLQJLWVVXSSRUWIRUWKH7HQ3ULQFLSOHVRIWKH81*&ZKLFKLQFOXGHVWHQHWVUHJDUGLQJ
human rights and labor. The Company continues to implement related initiatives in all areas of its corporate activities to reinforce respect for human rights
in the human resources management practices of all Group companies and prevent the occurrence of violations.

DIC Report 2020115

Human Resources Management

In response to the Modern Slavery Act 2015*2, DIC is reinforcing training regarding human rights due diligence*3, cognizant of the issue of human
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H[HFXWLYHVDQGHQKDQFHVFRUSRUDWHKHDGTXDUWHUV¶LQVSHFWLRQDQGPRQLWRULQJVWUXFWXUHDVSDUWRIDQRQJRLQJHIIRUWWREROVWHU*URXSPDQDJHPHQWFDSDELOLWLHV
*1 7KH,QWHUQDWLRQDO%LOORI+XPDQ5LJKWVFRPSULVLQJWKH8QLYHUVDO'HFODUDWLRQRI+XPDQ5LJKWVDQGWKH,QWHUQDWLRQDO&RYHQDQWVRQ+XPDQ5LJKWV WKH,QWHUQDWLRQDO&RYHQDQWRQ(FRQRPLF6RFLDODQG&XOWXUDO5LJKWVDQGWKH,QWHUQDWLRQDO&RYHQDQWRQ&LYLO
DQG3ROLWLFDO5LJKWV WKH,QWHUQDWLRQDO/DERXU2UJDQL]DWLRQ ,/2 ¶V'HFODUDWLRQRQ)XQGDPHQWDO3ULQFLSOHVRI5LJKWVDW:RUNWKH8QLWHG1DWLRQV¶*XLGLQJ3ULQFLSOHVRQ%XVLQHVVDQG+XPDQ5LJKWVDQGWKH7HQ3ULQFLSOHVRIWKH81*&
*2 8QGHUWKH0RGHUQ6ODYHU\$FWDQ$FWRIWKH3DUOLDPHQWRIWKH8QLWHG.LQJGRPFRPSDQLHVZLWKRSHUDWLRQVLQWKH8QLWHG.LQJGRPPXVWUHSRUWRQWKHH[LVWHQFHQRQH[LVWHQFHRIVODYHU\KXPDQWUDI¿FNLQJRURWKHUFULWLFDOYLRODWLRQVRI
KXPDQULJKWVLQWKHLUVXSSO\FKDLQVUHODWHGULVNVDQGVWHSVWKH\DUHWDNLQJWRDGGUHVVVXFKSUDFWLFHV³0RGHUQVODYHU\´HQFRPSDVVHVGHEWERQGDJHIRUFHGODERUDQGVHUYLWXGHKXPDQWUDI¿FNLQJDQGH[SORLWDWLRQ LQFOXGLQJVH[XDOH[SORLWDWLRQ
and forced organ donation).
*3 +XPDQULJKWVGXHGLOLJHQFHLVDQRQJRLQJULVNPDQDJHPHQWSURFHVVWKDWDFRPSDQ\QHHGVWRIROORZLQRUGHUWRLGHQWLI\SUHYHQWPLWLJDWHDQGDFFRXQWIRUKRZLWDGGUHVVHVLWVDGYHUVHKXPDQULJKWVLPSDFWV| Initiatives in Fiscal Year 2019
$WRWDORI',&*URXSFRPSDQLHVLQ-DSDQDQGRYHUVHDVLPSOHPHQWYROXQWDU\KXPDQULJKWVDQGODERUSUDFWLFHVLQVSHFWLRQV)RUWKHVHFRQGFRQVHFXWLYH\HDU
LQ¿VFDO\HDUWKH*URXSFRQGXFWHGLQVSHFWLRQVEDVHGRQDUHYLVHGTXHVWLRQQDLUHGLVWULEXWHGWRFRPSDQLHVIRUWKLVSXUSRVH+DYLQJDQDO\]HGDQGYHUL¿HGWKHUHVXOWVRILQVSHFWLRQVWKH*URXSLPSOHPHQWVIROORZXSLQTXLULHVLQNH\DUHDVDQGXVHVLWV¿QGLQJVWRSURPRWHLQLWLDWLYHVDLPHGDWHQKDQFLQJDZDUHQHVV| The DIC Group Human Rights Policy
As a member of society that recognizes the importance of respect for human rights and respects the basic human rights of all stakeholders, including
LWVFXVWRPHUVVXSSOLHUVDQGHPSOR\HHVWKH',&*URXSLVFXUUHQWO\IRUPXODWLQJDKXPDQULJKWVSROLF\DGUDIWRIZKLFKLVSURYLGHGEHORZ%DVHGRQ
this policy, DIC will work to increase the human rights awareness of its executives and employees and to conduct its business activities in a mannerthat shows respect for human rights.
１．Positioning

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２．Scope of application

This policy applies to all executives and employees of the DIC Group. The Company shall also encourage its business partners andsuppliers to adhere to this policy and cooperate with them to advance respect for human rights.
３．Responsibility to respect human rights
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of the human rights of stakeholders, as well as by preventing human rights abuses in the course of its business. In the event that its business
partners or suppliers cause adverse human rights impacts through their businesses, products and services, the Company—while not directly
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４．Human rights due diligence
7RIXO¿OOLWVUHVSRQVLELOLW\LQUHJDUGWRUHVSHFWIRUKXPDQULJKWVWKH&RPSDQ\KDVFUHDWHGDKXPDQULJKWVGXHGLOLJHQFHV\VWHPZKLFKLW
shall employ on an ongoing basis to identify and address human rights risks.
５．Corrective/remedial actions
Should the Company cause adverse human rights impacts or should it become evident that it has been complicit in causing suchimpacts, the Company shall take appropriate corrective/remedial actions in response.
６．Compliance with applicable laws
The Company shall comply with applicable laws in the countries and territories in which it operates. The Company shall also respect
international human rights principles and work actively to promote these principles.
７．Disclosure and education/training
The Company shall periodically report publicly on the progress of initiatives implemented in line with this policy. To ensure theeffectiveness of this policy, the Company shall also provide appropriate training to its executives and employees.
８．Dialogue and discussion
The Company shall engage with stakeholders regarding initiatives implemented in line with this policy by creating opportunities for
dialogue and promoting discussion in good faith.
９．Identifying principal human rights challenges
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as appropriate. Recognizing this as an ongoing process, the Company shall also continue to revise and amend these challenges toUHÀHFWVRFLDOFKDQJHEXVLQHVVWUHQGVDQGRWKHUIDFWRUVDIC Report 2020116

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

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

１）Commit

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

Demonstrate the Group’s
human rights policy and views

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

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

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

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

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

To ensure that its extended supply chain functions in a socially responsible manner, the Company established the DIC Group Universal Purchasing Policy inEDVHGRQZKLFKLWDOVRIRUPXODWHGSXUFKDVLQJPDQDJHPHQWUHJXODWLRQVDQGWKH',&*URXS&653URFXUHPHQW*XLGHOLQHV²ODWHUUHQDPHGWKH',&*URXS
Sustainable Procurement Guidelines—which clarify issues it expects suppliers to address, in 2009. Using the policy and guidelines, the Company promotes
sustainable procurement by ensuring that all suppliers implement improvements and initiatives necessary to ensure sustainable procurement, as well as advances
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2. Initiatives to help realize a sound, viable mica mining industry in India
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founding member of the Responsible Mica Initiative, a unique global collaboration established in February 2017 to eradicate child labor in the mica mines of India.
Through participation in this initiative, materials producers and cosmetics companies around the world are working to contribute to the realization of a sound,viable mica mining industry.
3. Establishment of whistle-blowing hotlines and corrective measures by the compliance team
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KXPDQULJKWV±UHODWHGUHSRUWVWKURXJKWKLVV\VWHP+RZHYHULQWHUQDOLQYHVWLJDWLRQVUHYHDOHGQRVHULRXVYLRODWLRQV$SSURSULDWHFRUUHFWLYHPHDVXUHVZHUH
implemented in the receipt of reports.
4. Contact procedures and responses to comments and complaints
The Company has established procedures for suppliers, customers, local communities and other stakeholders to report issues by telephone or through its corporate
ZHEVLWHDQGVWULYHVWRUHVSRQGVZLIWO\ZKHQFRPPHQWVRUFRPSODLQWVDUHUHFHLYHG1RFRPSODLQWVSHUWDLQLQJWRKXPDQULJKWVLVVXHVZHUHUHFHLYHGLQ¿VFDO\HDU

DIC Report 2020117

Human Resources Management| Building Trust with the DIC Employees’ Union',&¶VPDQDJHPHQWDQGUHSUHVHQWDWLYHVRILWVHPSOR\HHV¶XQLRQPHHWUHJXODUO\ZLWKWKHJRDORIHQVXULQJKHDOWK\LQGXVWULDOUHODWLRQVEDVHGRQ
mutual trust. In addition, through labor–management councils and casual management conferences, DIC shares management informationand its vision for the future with union representatives and encourages the frank exchange of opinions. A total of 67.2% of parent company
HPSOR\HHVEHORQJWRWKH',&(PSOR\HHV¶8QLRQ RIHOLJLEOHHPSOR\HHV | Diversity Promotion and Work Style Reform
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to such considerations as gender,
nationality, physical limitation or age. The Group works to foster a corporate culture that draws on its understanding and respect fordiversity to produce creative ideas and to incorporate the concept of diversity into management, thereby creating workplaces that enhance
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LQGLYLGXDOVWKDWPDNHXSRXUODERUIRUFHZLOOHQDEOHXVWRUHVSRQGWRVRFLDOLPSHUDWLYHVRUHYHQWRFKDQJH',&LWVHOI´7RWKLVHQG',&KDV
identified introducing alternative working arrangements that leverage digital tools, including telework and flextime; shifting the focus ofevaluations from quantity to quality; and providing support for employees who have childcare or nursing care responsibilities or suffer illness
as the key themes of the human rights strategy set forth in its DIC111 medium-term management
plan. DIC is also promoting ESG management to strengthen its management infrastructure, with
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occupied by female employees, the percentage of its overall labor force accounted for by foreign
nationals, and the number of female employees and foreign nationals on its management team.

Targets: Percentage of female employees in management positions in Japan: 5.1% (FY2019) ⇒ 8.0% (FY2021) ⇒ 20.0% (FY2025)
Percentage of labor force in Japan accounted for by foreign nationals: 1.0% (FY2019) ⇒ 5.0 % (FY2021) ⇒ 10.0% (FY2025)
Percentage of executives who are female and/or foreign nationals: 15.0% (FY2018) ⇒ 20.0% (FY2021) ⇒ 30.0% (FY2025)

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

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

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

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

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

Japan
Maximizing Groupcapabilities

Male Japanese national

Male foreign national

Female Japanese national

Female foreign national

DIC Report 2020

118

Greater China

Human Resources Management

1

Hiring Diverse Human Resources

With the objective of securing talented individuals with advanced specialized capabilities,
global perspectives and language capabilities, DIC actively promotes the hiring of international
students completing undergraduate or graduate studies at Japanese universities; Japaneseand foreign nationals completing undergraduate or graduate studies at overseas universities;
and experienced mid-career candidates with extensive experience and expertise. At present,
approximately 50 foreign nationals are employed in various capacities at DIC.
Number of Foreign Nationals Currently Employed by DIC
Sales
positionsTechnical
positions

Department/
divisionadministration

Postedoverseas

Production

Total

3

30

1

7

6

47

Nationalities of Foreign Employees

1
1
1

1
1
2
2
2
Breakdown by 21
Nationality
3
3
9

PRC
ROK
United States
Malaysia
ThailandIndonesia
TaiwanIndia
CanadaSpain
Germany
France

VOICE DIC is a company that evolves constantly to respond to the needs of the times.
DIC is a company that is bold in its pursuit of dreams and innovations and evolves constantly to ensure its ability to respond to the needs of thetimes. In recent years, we have seen a substantial increase in the number of female managers and employees who are foreign nationals, bothof which are the result of practical efforts to promote diversity. Employees with diverse backgrounds, strengths and weaknesses work together
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commitment to diversity in all its forms, which is one factor that makes it stand out among companies that have been in business for more thana century. I am proud to be a member of the DIC family.
SC Project, Kashima Plant, DIC Corporation

Siong Wan Foo

TOPIC
DIC Executives Participate in Diversity Roundtable Discussion
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discussion on the theme of diversity at corporate headquarters in Japan. Designed to enable participants
to share information on initiatives in various departments with the aim of improving the effectiveness of
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focused on efforts to promote career opportunities for female employees and activities conducted in line
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the importance of creating work environments that are conducive to diverse human resources, as well as toencourage collaboration and foster a sense of solidarity among diverse employees.

Roundtable discussion

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

DIC Report 2020

119Human Resources Management

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

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

TOPIC
President and CEO Kaoru Ino and W-LDP Participants Hold Lunchtime Roundtable Discussion,Q0D\',&SUHVLGHQWDQG&(2.DRUX,QRSDUWLFLSDWHGLQ',&¶V:RPDQ/HDGHU'HYHORSPHQW3URJUDP :/'3 OXQFKWLPHURXQGWDEOHGLVFXVVLRQ,QDGGLWLRQWRD
SUHVHQWDWLRQE\0U,QRRQ',&¶VHIIRUWVWRSURPRWHGLYHUVLW\WKHHYHQWIHDWXUHGDGLVFXVVLRQWKDWFRYHUHGDYDULHW\RIPDWWHUVLQFOXGLQJPRGLI\LQJZRUNHQYLURQPHQWVWR
accommodate aging societies with declining birthrates and an increasing number of two-income households, approaches to helping the next generation of employees
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Lunchtime roundtable discussion

DIC Report 2020

120

Human Resources Management

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

2007
2017

Encourage the drive and determinationof female employees
Expand opportunities for female
employees
Establish systems to supporta healthy work–life balance forfemale employees and encourage
the use thereof● Message from the president● Seminars to promote awareness● Identical uniforms for male and female employees●Training for employees in administrative positions● Seminars to promote awareness among female employees● Introduction of role models● Assignment of female employees to production and sales positions● Inclusion of female employees in regular system of transfers, reassignments and job rotations● Increase in number of women hired● Establishment of systems to support a healthy work–life balance● Publication of the Libra work–life balance support guide and introduction of e-learning

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

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

2018 and beyond

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

DIC Recognized as Nadeshiko Brand for Fiscal Year 2019, Earning Selection for the Second Consecutive Year
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women in the workplace as attractive stocks for investors who emphasize medium- to long-term improvements in corporate value with the objectiveof accelerating such efforts. The initiative assesses approximately 3,600 companies across all TSE sections based on what they do to promote
GLYHUVLW\FRQVFLRXVPDQDJHPHQWDQGWKHLUGLVFORVXUHRIUHODWHGLQIRUPDWLRQDQGVHOHFW1DGHVKLNREUDQGVLQHDFKLQGXVWU\FDWHJRU\With the goal of being an organization that enables a broad range of individuals to reach their full potential, DIC has positioned expanding
RSSRUWXQLWLHVIRULWVIHPDOHHPSOR\HHVDVWKH¿UVWVWHSLQLWVGULYHWRSURPRWHGLYHUVLW\6LQFH¿VFDO\HDUWKH&RPSDQ\KDVDFWLYHO\SURPRWHG
a variety of initiatives in line with four key themes: Stimulate an appropriate employee mindset and corporate culture, support career-building,
SURPRWHZRUNVW\OHUHIRUPVDQGFRPPXQLFDWHSXEOLFO\,QLWLDWLYHVLQ¿VFDO\HDUIHOOLQWRWKUHHFDWHJRULHV0HDVXUHVWRHQKDQFHPDQDJHPHQW¶V
commitment to career advancement for female employees, notably holding diversity roundtable discussions for executives for the third consecutive
year; front-line efforts, namely, appointing department-specific diversity officers, promoting
networking efforts for female employees at sites across Japan and conducting web seminars; andthe creation of work environments conducive to flexible work styles and continuous service forfemale employees, including making it possible to take paid vacation time in hourly increments
and introducing leave for employees to accompany spouses overseas. These initiatives were cited
DVUHDVRQVIRU',&¶VVHOHFWLRQDVD1DGHVKLNR%UDQGIRU¿VFDO\HDUDVZHUHLWVDGRSWLRQRIÀH[WLPHDQGWHOHZRUNV\VWHPVDQGPDQGDWRU\³QRRYHUWLPHGD\V´

DIC Report 2020121

Human Resources Management

3

Advancing the Employment of Individuals with Disabilities

DIC is committed to creating inclusive work environments that help
individuals with disabilities enjoy active and fulfilling careers. One
initiative, which began in fiscal year 2015, is an internship program,organized in collaboration with a special needs school, that is designed
WRWUDQVLWLRQLQWRIXOOWLPHHPSOR\PHQW,Q¿VFDO\HDURQHSURJUDP
participant was offered a full-time clerical position, with three expected to
EHRIIHUHGSRVLWLRQVDWFRUSRUDWHKHDGTXDUWHUVLQ¿VFDO\HDU
As of December 31, 2019, individuals with disabilities accounted forRI',&¶VWRWDOODERUIRUFHH[FHHGLQJ-DSDQ¶VOHJDOO\PDQGDWHG
quota of 2.2%. Going forward, DIC will continue working with the-DSDQHVHJRYHUQPHQW¶V+HOOR:RUNSXEOLFHPSOR\PHQWVHFXULW\RI¿FHV
as well as special needs schools and other organizations, to promote thehiring of individuals with disabilities, and will take further steps to enhance
work environments and increase workplace accessibility.

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

2.58%

2.60%

2.41%

2.50%

2.40%

2.30%

2.20%

Percentage of totallabor force accounted forby individuals with disabilities
as of December 31, 2019

2.22%

2.58%

2.14%

2.20%

2.06%
2.10%

(Legally mandated quota revised)

2.04%

Percentage of totallabor force accounted
for by individuals
with disabilities(Legally mandated quota revised)

2.00%

1.90%

1.94%

Japan’s legally mandated quota

1.80%

1.70%

12

13

14

15

16

17

18

19 (FY)VOICE Words of gratitude from colleagues are a great encouragement and give me a sense of satisfaction.
,MRLQHG',&(VWDWHRQ$SULODQGZDVDVVLJQHGWRWKHPDLOURRPZKLFKLVSDUWRIWKH%XVLQHVV6XSSRUW'HSDUWPHQW0\UHVSRQVLELOLWLHVLQFOXGHFROOHFWLQJDQG
delivering mail, coordinating courier services and maintaining employee-use tea dispensers. Each requires paying close attention to key priorities. When collecting and
GHOLYHULQJLQWHURI¿FHDQGUHJXODUPDLOZHQHHGWRHQVXUHWKDWHDFKLWHPLVGHOLYHUHGWRWKHDSSURSULDWHGHSDUWPHQWQRWRQO\FRUUHFWO\EXWDOVRVDIHO\,QFRRUGLQDWLQJ
courier services, we must ensure packages can be carried safely by keeping a close eye on weight and number. When maintaining tea dispensers, it is important not tomiss water droplets and dirt so that the machines are always pristine.
Words of gratitude from colleagues when I am at work are a great encouragement and give me a sense of satisfaction in doing a good job. My goal is to be like the mailroom team leaders, that is, someone who can discern what needs to be done and act swiftly and who is thoughtful and considerate of everyone around them.
Business Support Department, DIC Estate Co., Ltd.

Ryo Nakagawa

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

Number of Reemployed Individuals

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

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

Fiscal year 2018

Fiscal year 2019

126
104
97
77.0％

108
92
91
84.3％

69
55
55
79.7％

89
74
70
78.7％

96
81
77
80.2％

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

DIC Report 2020122

Human Resources Management

1Enhancing Programs that Help Employees Balance the Demands of Work and Home

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

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

Promoting Measures to Retain Employees with Nursing Care Responsibilities,Q-DSDQRQHRIWKHVRFLDOUDPL¿FDWLRQVRIIDOOLQJELUWKUDWHVDQGOHQJWKHQLQJOLIHVSDQVLVDQLQFUHDVHLQWKHQXPEHURISHRSOHUHTXLULQJQXUVLQJFDUHDVDUHVXOWRIZKLFKPRUHSHRSOH¿QGWKHPVHOYHVKDYLQJWROHDYHWKHLUMREVWRWDNHFDUHRIIDPLO\PHPEHUVSteps taken by the government to help address these issues include revising the Child Care and Family Care Law in 2016 to make
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promote knowledge of its related leave programs, in June 2017 DIC began distributing the Childcare and Nursing Care Handbook.
DIC has also revised the rules of these programs, including making it possible to break up nursing care leave, as well as to extend theperiod over which they may shorten their workday from one year to three years, thereby making them easier for employees to use.
Major Expansion of the Flextime System
7RIDFLOLWDWHÀH[LEOHZRUNVW\OHVLQ¿VFDO\HDU',&UHVROYHGWRVLJQL¿FDQWO\H[SDQGLWVÀH[WLPHV\VWHPDQGLQ$SULOPDGHWKHV\VWHPDSSOLFDEOHWRDOODUHDVRIRSHUDWLRQVRWKHUWKDQSURGXFWLRQÀRRUV7KHV\VWHPPDNHVLWSRVVLEOHIRUHPSOR\HHVWRGHWHUPLQHWKHWLPHDWZKLFKWKH\HQGWKHLUZRUNLQJGD\WRWKHH[WHQWWKDWLWGRHVQRWKLQGHUEXVLQHVVHI¿FLHQF\DVZHOODVWRVLPXOWDQHRXVO\PDNHXVHRIWHOHZRUNZLWKWKHJRDORISURPRWLQJWKHLQGHSHQGHQWH[HFXWLRQRIGXWLHVDQGHQKDQFLQJVHOIPDQDJHPHQWFDSDELOLWLHV
Promoting Telework,Q¿VFDO\HDU',&EHJDQH[SORULQJWKHSRWHQWLDORIWHOHZRUNDÀH[LEOHZRUNDUUDQJHPHQWWKDWHQDEOHVHPSOR\HHVWRZRUNDWKRPHRUDQRWKHUUHPRWHORFDWLRQXVLQJLQIRUPDWLRQDQGFRPPXQLFDWLRQVWHFKQRORJLHV ,&7 WKXVHOLPLQDWLQJWKHWLPHDQGORFDWLRQFRQVWUDLQWVRIWUDGLWLRQDOZRUNDUUDQJHPHQWV7KHIROORZLQJ\HDUHPSOR\HHVDQGPDQDJHPHQWFRQGXFWHGH[WHQVLYHWDONVWRLURQRXWGHWDLOV$IWHUDQDO\]LQJDQGHYDOXDWLQJWKHUHVXOWVRIDWULDOLQYROYLQJHPSOR\HHVLQ-DQXDU\
the Company launched the DIC Telework System, which is available to all employees regardless of position of workplace. As of December 2019, approximately 1,000
employees had registered to use the system.
In response to the emergence of COVID-19 in January 2020, DIC implemented telework in principal for the entire DIC Group to help prevent the further spread of theYLUXV:KHQDVWDWHRIHPHUJHQF\ZDVGHFODUHGLQ-DSDQLQ$SULOPRUHWKDQRIRI¿FHZRUNHUVFHQWHULQJRQWKRVHLQVDOHVDQGPDQDJHPHQWUHODWHGGHSDUWPHQWV
were able to continue performing their jobs without commuting to their normal place of work.
Looking ahead, DIC will continue to create systems that make it possible for employees to choose a work style that suits the type of work they do, as well as theirown personal needs, with the aim of helping encourage a healthy work–life balance. The Company will also further promote the independent execution of duties toreinforce self-management capabilities, thereby accelerating efforts to galvanize employees and encouraging them to give full play to their creativity.
Establishment of a System to Help Employees Balance Medical Treatment and WorkIn January 2020, DIC introduced a system to support employees undergoing medical treatment who wish to continue working. To guarantee this system functions effectively,
the Company formulated guidelines to ensure employees making use of this system receive the ongoing support necessary to balance medical treatment and work through jobrelated accommodations and considerations.

DIC Report 2020123

Human Resources Management

Programs that Help Employees Balance the Demands of Work and Home
Childcare Leave Program

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

Leave to Assist with Parenting Program

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

Economic support system

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

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

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

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

1XUVLQJFDUHOHDYHV\VWHP

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

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

Employees not wishing to take leave while providing nursing care can shorten their workday by up to two hours for a
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without restriction.

Leave to accompany spouse overseas

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

Relocation limitation system

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

System to help employees balance
medical treatment and work

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

Use of the Childcare Leave and Leave to Assist with Parenting Programs
Owing to the introduction of various programs to help employees in balancing the demands of work and home and the creation of an environment thatencourages employees to take advantage of such thereof, the percentage of DIC employees who return to work after making use of the Childcare Leave
Program is currently 100%. In addition, the number of individuals using the Leave to Assist with Parenting Program, which enables male employees totake time off in the weeks after the birth of a child to assist their partner, has risen.
Thanks to efforts to enhance these systems, the average years of employment for female employees has increased and continues to exceed theaverage for male employees.
Fiscal year 2014 Fiscal year 2015 Fiscal year 2016 Fiscal year 2017 Fiscal year 2018 Fiscal year 2019
1XPEHURIHPSOR\HHVXVLQJthe Childcare Leave Program
1XPEHURIHPSOR\HHVXVLQJ
the Leave to Assist with Parenting Program

28
63

29
64

35
62

Average Years of Employment(Including Individuals Seconded to Group Companies)
Average years of employment in fiscal year 2019
Male employees(Years)Female employees Overall

18.3 years 19.8 years 18.6 years

25
20
15
10
5
0

94

09

10

Male employees

11

12

13

14

15

16

17

18

19 (FY)

Female employees

DIC Report 2020

124

35
77

21
81

28
86

Human Resources Management

2

Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave

DIC has deployed an electronic system to manage on-site hours, working hours and approved overtime hours. As a measure to prevent extreme overwork,
LIDQHPSOR\HHDSSHDUVOLNHO\WRH[FHHGWKHDJUHHGXSRQRYHUWLPHOLPLW KRXUVPRQWK KLVRUKHUVXSHUYLVRUDQGWKHVHQLRUH[HFXWLYHLQFKDUJHDUHDXWRPDWLFDOO\QRWL¿HG7KHVXSHUYLVRULVUHTXLUHGWRVXEPLWDUHSRUWRXWOLQLQJWKHHPSOR\HH¶VZRUNUHVSRQVLELOLWLHVDQGIDFWRUVEHKLQGWKHH[FHVVLYHKRXUVDQGSUHVHQWLQJVSHFL¿FPHDVXUHVWRDPHOLRUDWHWKHVLWXDWLRQZKLFKLVDOVRVKDUHGZLWKWKH',&(PSOR\HHV¶8QLRQDSURFHVVGHVLJQHGWRFXUEDQGUHGXFH
excessively long working hours.
,QDGGLWLRQWKH&RPSDQ\KDVLQVWLWXWHGDPDQGDWRU\*URXSZLGH³QRRYHUWLPHGD\´HYHU\:HGQHVGD\DQGRQSD\GD\ZKLFKLQ-DSDQLVRQFHDPRQWKDWPRQWKHQGLQDELGWRHQFRXUDJHHI¿FLHQWZRUNSUDFWLFHVDQGIXUWKHUEROVWHUSURGXFWLYLW\ 6LWHVFDQFKDQJHWKHVHGD\VDVDSSURSULDWH (PSOR\HHVDUHDOVR
encouraged to take annual paid leave, with sites recommending appropriate timing for leave and having employees plan dates for such leave.

Average Monthly Overtime Hours Worked and Annual Paid Leave Taken

Average monthly overtime hours
worked per employee
Average annual paid leave granted
Average annual paid leave used
Usage rate for annual paid leave

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

Fiscal year 201912.2 hours
19.1 days
11.0 days
57.6％

12.1 hours
18.8 days
11.2 days
59.6％

12.3 hours
19.1 days
12.0 days
62.8％

12.2 hours
18.8 days
12.0 days
63.8％

12.0 hours
18.6 days
12.5 days
67.2％

10.8 hours
18.7 days
13.3 days
70.9％| Human Resources Infrastructure Reform
With the rapid expansion of its global operations, DIC recognizes that securing and fostering human resources around the world and creating an
HQYLURQPHQWWKDWHQFRXUDJHVFURVVERUGHUFDUHHUDGYDQFHPHQWDQGPRELOLW\LVHVVHQWLDOWRLQFUHDVLQJFRUSRUDWHYDOXH7RWKHVHHQGVVLQFH¿VFDO\HDU2015 the Company has sought to develop harmonized promotion, personnel evaluation and remuneration systems, the cornerstone of the global human
UHVRXUFHVPDQDJHPHQWIUDPHZRUNIRURYHUVHDV',&*URXSFRPSDQLHVXQGHULWVMXULVGLFWLRQ,Q-DQXDU\',&DQG',&*UDSKLFVXQL¿HGTXDOL¿FDWLRQVWDQGDUGVIRULWVDSSUR[LPDWHO\PDQDJHPHQWOHYHO LHPDQDJHUDQGDERYH HPSOR\HHVUHSODFLQJWUDGLWLRQDODELOLW\EDVHGVWDQGDUGVZLWKUROHEDVHG
standards. As a consequence, consistent duty- and role-based standards are now used for the majority of such employees in the Americas, Europe, the$VLD±3DFL¿FUHJLRQWKH35&DQG-DSDQThe Group has also integrated its evaluation systems for Group company presidents and other executives in Japan and overseas with the goal of
encouraging management approaches that are optimal for the Group as a whole from both a medium- and a long-term perspective. In addition, the Grouphas integrated its global personnel policies to ensure that remuneration is in keeping with local market levels and individual job responsibilities.
Under DIC111, in fiscal year 2019 the Group began advancing efforts to consolidate employee qualification systems worldwide, unify assessment
standards and formats for management-level employees, and develop an IT system to facilitate the construction of a global human resources platform.
Through such efforts, the Company will strive to realize consistent Groupwide global human resources and personnel management systems.

| Securing and Fostering Human Resources
1

Ensuring Fair and Consistent Treatment

7RHQVXUHWKDWWKHHIIRUWVDQGDFKLHYHPHQWVRIDOOHPSOR\HHVDUHUHÀHFWHGDSSURSULDWHO\LQWKHLUWUHDWPHQW',&KDVFRQVROLGDWHGLWVQXPHURXVHPSOR\HHTXDOL¿FDWLRQV\VWHPVLUUHVSHFWLYHRIMREFODVVL¿FDWLRQDQGHGXFDWLRQDOFUHGHQWLDOV7KHVHOHFWLRQRIHPSOR\HHVWRUHFRPPHQGIRU
TXDOL¿FDWLRQLVGRQHWKURXJKVFUHHQLQJEDVHGRQREMHFWLYHVWDQGDUGVWKHUHE\JXDUDQWHHLQJHTXDORSSRUWXQLWLHVIRUSURPRWLRQWRDOOPRWLYDWHG
capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction and ensure that individual employees’ abilities
DQGDFKLHYHPHQWVDUHDVVHVVHGDSSURSULDWHO\DQGUHIOHFWHGLQDWLPHO\PDQQHU2IQRWHWKH&RPSDQ\KDVLQWURGXFHG0%2²DJRDO
setting management tool that promotes both corporate growth and employee development—into its personnel evaluation system. Resultsof individual evaluations are fed back in full to employees, including reasoning behind determination, in a transparent process that ensures
HPSOR\HHVDUHODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWVDIC Report 2020

125

Human Resources Management

Settingofdivisiontargets

Setting ofindividual
targets

Interview

ExecutionofdutiesProcess
evaluation

Careerdevelopment
sheet

Individual

2

Results
evaluation

Semiannual
evaluation

Superior

Annualevaluation

Feedback

Bonus

SalaryPromotion

Skillsdevelopment
Appropriate
appointment

Establishment of the Next Management Selection Process,QOLQHZLWKDVWUDWHJ\RXWOLQHGLQ',&WRHVWDEOLVKDSURFHVVIRUVHOHFWLQJWKHQH[WPDQDJHPHQWWHDPLQ¿VFDO\HDUWKH&RPSDQ\
HPEDUNHGRQDWULDODLPHGDWUHDOL]LQJWKHPHFKDQLVPIRUVXFKDV\VWHP7KH+XPDQ5HVRXUFHV6WUDWHJ\'HSDUWPHQWFUHDWHGLQ-DQXDU\ZRUNVWRFODULI\TXDOL¿FDWLRQVIRUNH\SRVLWLRQVDVZHOODVWRH[SORUHSURFHVVHVIRUVHOHFWLQJDQGPRQLWRULQJSURPLVLQJKXPDQUHVRXUFHV
and for the Talent Management Committee to match candidates to positions.
3

Fostering Human Resources to Reinforce Front-Line Capabilities and Accelerate Change+DYLQJUHFRJQL]HGIRUWLI\LQJ*URXSRUJDQL]DWLRQDOFDSDELOLWLHVDQGHQKDQFLQJWKHVNLOOVRILWVSHRSOHDVLPSRUWDQWFKDOOHQJHV',&KDVGHFODUHG
the medium-term focus of its human resources development program as being to nurture human resources capable of reinforcing front-line
capabilities and accelerating change.
This program, which is divided into six categories, is based on curricula that emphasize a systematic approach to helping each employee
DFTXLUHFULWLFDOVNLOOV6LQFH¿VFDO\HDUWUDLQLQJKDVHPSKDVL]HGWKHFRQFHSWVRI³JOREDO´DQG³GLYHUVLW\´ZLWKDUHDVHPSKDVL]HGLQFOXGLQJ
training to improve English-language skills and Japanese-language training for non-native speakers.

Medium-Term Focus of DIC’s Human Resources
Development Program
1XUWXUHKXPDQUHVRXUFHVZLWKWKHDLPRIUHDOL]LQJ
sustainability and achieving the targets of DIC111

Accelerate change
Reinforce front-line
capabilities

Fundamental
capabilities as a
DIC employee

DIC Report 2020

126

Foster human resources with the skills
necessary to promote the steady growth ofbusinesses, maintaining awareness of theimportance of sustainability• Step up efforts to nurture young employees• Reinforce leadership skills• Strengthen management capabilities• Enhance department- and job-specific skills

Foster human resources with the skills
necessary to drive change in businesses toensure DIC is always ahead of the times• Propose solutions that respond to changing business styles• Develop products that leverage compounding technologies• Give full play to comprehensive skills• Accelerate globalization

Human Resources Management

DIC Training Programs
Managementlevel training

Promote globalization, strengthen/foster the ability of management-level
employees to deal with risks

DIC Management School, media training

Global human resources
development

Systematic efforts to foster managers and employees of overseas Group companies,
enhance the skills of Japanese employees assigned to overseas posts, improve theJapanese-language abilities of employees who are non–native speakers

3UHSDUDWRU\WUDLQLQJIRUHPSOR\HHVDVVLJQHGWRRYHUVHDVSRVWV1H[W*OREDO+XPDQ5HVRXUFHV'HYHORSPHQW3URJUDP7DUJHW*OREDO3URJUDP WUDLQLQJto enhance English-language communication skills), Effective E-Mailing
WUDLQLQJLQKRZWRFRPSRVHHPDLOVLQ(QJOLVK -DSDQHVHODQJXDJHWUDLQLQJfor employees who are non–native speakers, Area studies/HYHOVSHFLÀFWUDLQLQJ(GXFDWLRQDQGWUDLQLQJWRHTXLSHPSOR\HHVZLWKWKHVNLOOVWRIXO¿OOUHVSRQVLELOLWLHVDWHDFKOHYHO4XDOL¿FDWLRQVSHFL¿FWUDLQLQJ -06VHQLRU WUDLQLQJWDLORUHGWR
different management ranks

Department- and
MREVSHFLÀFWUDLQLQJ

Education and training to enhance capabilities required by different departments
and jobs+XPDQUHVRXUFHVGHYHORSPHQWSURJUDPVWDLORUHGWRSURGXFWLRQGHSDUWPHQWV.DL]HQ6NLOO,PSURYHPHQW7UDLQLQJ3URJUDPRWKHUV WHFKQLFDOGHSDUWPHQWVWUDLQLQJWRVXSSRUWWKHDELOLW\WRSURSRVH5 'WKHPHVRWKHUV VDOHVGHSDUWPHQWVWUDLQLQJWRFXOWLYDWHSURSRVDOGHYHORSPHQWFDSDELOLWLHVRWKHUV DQGVXSSRUWGHSDUWPHQWV ³ZK\ZK\DQDO\VLV´WUDLQLQJRWKHUVOn-the-job training+DQGVRQWUDLQLQJLQWKHZRUNSODFHWRIRVWHUHPSOR\HHVDQGFXOWLYDWHVNLOOVWorkplace-specific on-the-job training, domestic technical department trainee
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Self-development

Support for employees seeking to enhance their skills

Correspondence courses, e-learning courses, in-house seminar courses,
Skype-based English conversation courses, preparatory courses for the TOEIC,QVWLWXWLRQDO3URJUDP ,3 7HVW

Training to Enhance Proposal Development Capabilities
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with its goal of reinforcing front-line capabilities. In the advanced course, which primarily targets senior manager–level employees, groups of¿YHRUVL[LQGLYLGXDOVIURPVDOHVDQGWHFKQLFDOGHSDUWPHQWVIRUPFURVVGHSDUWPHQWSURMHFWWHDPVZKLFKVHOHFWSUDFWLFDOFXVWRPHUFHQWHUHG
themes, and work to formulate solutions to pertinent hypothetical issues and further hone their ability to prepare and present proposals. The
course, which lasts nine months, encompasses approaches to development of innovative proposal themes and angles, problem solving andpersuasive presentations, among others, with professional business consultants offering advice and guidance at each stage.
&RXUVHZRUNLVLQDGGLWLRQWRUHJXODUUHVSRQVLELOLWLHVVRSDUWLFLSDQWVKDYHDORWRQWKHLUSODWHVEXWWKH\¿QGWKDWWKH\DUHDEOHWRDSSO\
newly acquired skills almost immediately, greatly improving front-line capabilities. Participants have also used their selected themes to make
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| Global Talent Development
DIC has positioned the fostering of global human resources as a key theme of DIC111. Accordingly, the Company is taking steps to, among
RWKHUVGH¿QHWKHOHYHORIDQGVHWUHTXLUHPHQWVIRUJOREDOKXPDQUHVRXUFHVDVZHOODVWRV\VWHPDWL]HWUDLQLQJ (QJOLVKODQJXDJHDELOLW\competency and work experience) programs.
Offering the Overseas Trainee and GCD Programs
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Under the GCD Program, employees from overseas Group companies are sent to work at DIC Group companies in Japan. Positioned as
SDUWRIWKH*URXS¶VHIIRUWWRIRVWHUJOREDOKXPDQUHVRXUFHVDQGSURPRWHGLYHUVLW\WKLVSURJUDPJLYHVIXWXUHEXVLQHVVOHDGHUVDFKDQFHWROHDUQ
new skills and Japanese business techniques and to network with Group
Overseas Trainee Program Destination Country of Origin and Number
FROOHDJXHVDVZHOODVWRGHHSHQWKHLUXQGHUVWDQGLQJRI-DSDQ¶VFXOWXUH and Number of Employees Dispatched of Participants in the GCD Programin Fiscal Year 2019
in Fiscal Year 2019and commercial practices. This program also brings domestic employees
in contact with other cultures and provides an opportunity for them toUnited StatesIndonesia21polish their English-language skills and acquire a global perspective.
Malaysia
PRC
1
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Singapore22
Program participants to spend between three months and one year at
Austria1
sites in Japan. Through the Overseas Trainee and GCD programs, DIC
PRC
2
seeks to advance the globalization of the overall DIC Group, as well as toVietnam1
encourage smooth cooperation between Group companies in Japan andtheir counterparts overseas.

DIC Report 2020

127

Human Resources Management

Encouraging Understanding of Islamic Culture)RVWHULQJDQXQGHUVWDQGLQJRIUHOLJLRQEDVHGGLIIHUHQFHVLQHYHU\GD\OLIHVW\OHVLVDQLPSRUWDQWDVSHFWRI',&¶VHIIRUWVWRSURPRWHGLYHUVLW\In February 2017, prior to the arrival of GCD Program participants from Indonesia, managers and assistant managers at the Kashima
Plant, in Ibaraki Prefecture, attended a lecture designed to give them a basic knowledge of Islamic culture, during which they learned about
SUDFWLFHVWKDWKDYHGHYHORSHGDURXQGWKHUHOLJLRQRI,VODPZKLFKLVWKHUHOLJLRQRIRI,QGRQHVLDQVLQFOXGLQJSUD\LQJ¿YHWLPHVDGD\eating halalIRRG IRRGWKDWFRQIRUPVZLWK,VODPLFGLHWDU\ODZV DQGIDVWLQJGXULQJWKHPRQWKRI5DPDGDQ7KHOHFWXUHKHOSHGWKHSODQWPDNH
necessary preparations for its visitors, including setting aside a space for prayer during the day and giving consideration to working hours,
food choices and other factors after they arrived. Despite a certain amount of initial bewilderment on the part of both plant employees and
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WKHWZR,QGRQHVLDQHPSOR\HHVFRPSOHWHGWKHLUDVVLJQPHQWDQGUHWXUQHGKRPH,QIRUPDWLRQRQWKH,QGRQHVLDQHPSOR\HHV¶H[SHULHQFHVDWWKH
Kashima Plant were shared with other Group production facilities in Japan, helping ensure a welcoming environment for new recruits from
0DOD\VLDZKRMRLQHG',&LQ¿VFDO\HDU

Next Global Human Resources Development Program
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enhance global business skills. Each year, 20 individuals in their 30s and 40s are selected to take part in the program, which includes
language classes taught by native English speakers that focus on improving presentation, negotiation, debate and other skills. The Company
also provides individual training designed to improve English-language capabilities, including one-on-one Skype-based training focused on
improving conversational skills and TED talk* listening and dictation classes. At the conclusion of the 11-month program, in April, participants
divide into six teams, each of which is tasked with discussing their vision for DIC 10 years in the future and giving a presentation on the
topic in English to the president and executive officers, as well as to their own boss and colleagues. All individuals who complete the
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generation of executives.
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1H[W*OREDO+XPDQ5HVRXUFHV'HYHORSPHQW3URJUDPDIC Report 2020128

Human Resources Management| Caring for Mental and Physical Health
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health supervisors and other experts inspect workplaces to manage employee health.

Promoting Mental Health Care
DIC takes steps to create environments in which employees feel physically and mentally supported and works to ensure that its labor management practices comply with relevant
laws. The Company places a high priority on caring for psychological and emotional well-being and has established a comprehensive mental health program, highlights of which
include engaging an in-house occupational psychologist, promoting initiatives aimed at warding off mental health problems and extending support to ensure a smooth return
to work for employees taking leave. In particular, access to counseling provided by an occupational psychologist has had a considerably positive impact in terms of ensuring
employees get treatment and are able to return to work as quickly as possible.
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certain level in voluntary stress checks and provided counseling aimed at helping employees improve communications with supervisors, colleagues and family members. The
Company will promote the ongoing, systematic implementation of these initiatives.

Mental Health Initiatives• Guidance from an in-house occupational psychologist
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• Internal and external help desks• Line-care training* for supervisors• Mental health self-checks as a part of training for new employees• Distribution of Kokoro no Kenko ³3V\FKRORJLFDO+HDOWK´ VHOIFKHFNKDQGERRNWRDOOHPSOR\HHV• Flexible process to support employees returning to work after taking leave* Line-care training: Training for supervisors to help them recognize promptly when an employee is unwell and respond appropriately by, for example,
recommending guidance or counseling or making workplace improvements.
Kokoro no Kenko
self-check handbook

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3URJUDP GXEEHGWKH³:KLWH´ ZKLFKLVRUJDQL]HGE\0(7,DQG1LSSRQ.HQNR.DLJL 1. This is the third consecutive year
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advance health and productivity management, creating an environment that ensures such enterprises gain enhanced public
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employee health and productivity from a management perspective and promote strategic initiatives.
In addition to looking at whether enterprises stipulate health management in their corporate mission and disclose pertinent information, the White 500 program assesses performance based on three criteria, namely,
grasp of employee health-related issues and consideration of actions, establishment of a foundation for the practical implementation of health and productivity management measures and work engagement*2, and
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prolong the healthy life expectancy of citizens and to ensure sound medical services in Japan.
*2 $FRQFHSWXVHGWRPHDVXUHHPSOR\HHV¶PHQWDOKHDOWKZRUNHQJDJHPHQWLVGHVFULEHGDVDSRVLWLYHIXO¿OOLQJZRUNUHODWHGVWDWHRIPLQGWKDWLVFKDUDFWHUL]HGE\YLJRUGHGLFDWLRQDQG
DEVRUSWLRQ³9LJRU´LVWDNLQJSULGHDQGH[SHULHQFLQJDVHQVHRIVDWLVIDFWLRQLQRQH¶VZRUN³GHGLFDWLRQ´LVIHHOLQJVWURQJO\LQYROYHGLQDQGIRFXVHGRQRQH¶VZRUNDQG³DEVRUSWLRQ´LV
EHLQJDFWLYHO\HQJURVVHGLQRQH¶VZRUN

Initiatives to Support Employee Health',&KDVDOZD\VDQDO\]HGWKHUHVXOWVRIHPSOR\HHV¶DQQXDOSK\VLFDOVDQGSURYLGHGDVVLVWDQFHWRHPSOR\HHVIRUZKRP
lifestyle improvements have been recommended by providing introductions to hospitals and clinics. The Company has
also sought to contribute to good health for employees by encouraging the use Spirulina—a noted superfood* that is
manufactured by a DIC Group company—as an ingredient in cooking.
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&RORUIXO&DUH´ ZDVODXQFKHGLQ)HEUXDU\EHJLQQLQJZLWKWKHFDIHWHULDDWWKH&RPSDQ\¶VFRUSRUDWHKHDGTXDUWHUVLQ7RN\RZLWKGLVWLQFWLYHVLJQDJHXVHGWRSURPRWHUHFRJQLWLRQDQGDFOHDUH[SODQDWLRQSURYLGHGRIWKHEHQH¿WVRIPHQX
selections, including reduced calories and low sodium content, to encourage use.
DIC will continue implementing measures designed to help ensure the physical and mental health of its employees aspart of its commitment to creating a work environment in which all employees can fully exercise their abilities.
7KHWHUP³VXSHUIRRG´LVXVHGWRGHVFULEHVWDQGDUGIRRGVZLWKDQH[FHOOHQWEDODQFHRIQXWULHQWVWKDWSURYLGHKHDOWKEHQHILWVDQGIRRGVFRQWDLQLQJVSHFL¿FQXWULHQWVDQGRULQJUHGLHQWVJRRGIRUKXPDQKHDOWKDIC Report 2020

129

A new healthy cafeteria menu selection

Human Resources Management',&*URXS6LWH(PSOR\HH&DIHWHULDV(DUQ6PDUW0HDO&HUWLÀFDWLRQ
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DVVRFLDWLRQVLQFOXGLQJWKH-DSDQHVH6RFLHW\RI1XWULWLRQDQG'LHWHWLFVDQGWKH-DSDQHVH6RFLHW\RI1XWULWLRQDQG)RRG6HUYLFH0DQDJHPHQWZDVHVWDEOLVKHGWRUHFRJQL]HUHVWDXUDQWVFRUSRUDWHIDFLOLWLHVDQGRWKHUHVWDEOLVKPHQWVWKDWSURPRWHWKHFRQWLQXRXVSURYLVLRQRIQXWULWLRQDOO\EDODQFHGPHQXRSWLRQV²LH³VPDUWPHDOV´²LQKHDOWK\HDWLQJHQYLURQPHQWVUnder the Smart Meal Program, restaurants, corporate sites and other establishments that satisfy essential requirements, which include a menu that meets Smart
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6PDUW0HDO3URJUDPFHUWLILFDWLRQLVGLYLGHGLQWRWZRFODVVHV³:KROHVRPH´ ±NFDO DQG³+HDUW\´ ±NFDO ',&¶VFRUSRUDWHKHDGTXDUWHUVZDVFHUWL¿HGLQERWKFODVVL¿FDWLRQVZKLOHWKH2VDND%UDQFK2I¿FHDQGWKH6DNDL3ODQWZHUHFHUWL¿HGLQWKH³:KROHVRPH´FODVV$WFRUSRUDWHKHDGTXDUWHUVWKHVHHIIRUWVIRFXVRQGHYHORSLQJPHQXVWKDWWDNHLQWRDFFRXQWWKHUHVXOWVRIDQQXDOHPSOR\HHKHDOWKFKHFNXSV$WWKH2VDND%UDQFK2I¿FHWKHIRFXVLVRQSURPRWLQJKHDOWKFRQVFLRXVQHVVE\SURYLGLQJFOHDUDJHVSHFL¿FLQIRUPDWLRQRQHQHUJ\FRQVXPSWLRQZKLOHDWWKH6DNDL3ODQWWKHHPSKDVLVLVRQFUHDWLQJPHQXVWKDWUHÀHFWWKHUHVXOWV
of employee polls and make use of regional ingredients.

TOPIC',&(DUQV7RN\R0HWURSROLWDQ*RYHUQRU·V$ZDUGIRU1XWULWLRQDO,PSURYHPHQWDQG6SHFLÀF0HDO6HUYLFH)DFLOLWLHV,Q¿VFDO\HDU',&ZDVSOHDVHGWRDFFHSWD7RN\R0HWURSROLWDQ*RYHUQRU¶V$ZDUGIRU1XWULWLRQDO,PSURYHPHQWDQG6SHFL¿F0HDO6HUYLFH)DFLOLWLHVIURPgovernor Yuriko Koike. Each year, this program evaluates the implementation of dietary guidelines and application thereof to menu items, as well as the status of
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establishments received none of the 11 awards conferred in fiscal\HDUEXWDFFRXQWHGIRUWKUHHRIWKHJLYHQLQ¿VFDO\HDU
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&RPSDQ\¶VFRUSRUDWHKHDGTXDUWHUVDQGWKHFRQWULEXWLRQRIKHDOWK\PHQXLWHPVVXFKDVWKHQXWULHQWULFK³6XSSOHPHQW%RZO´DQG³&RORUIXO'HOL®´developed with attention to the color of ingredients, which prompted the&KXRNXSXEOLFKHDOWKGHSDUWPHQWWRUHFRPPHQGWKHFDIpIRUDQDZDUG

Comment I look forward to continuing to devise distinctively DIC menu options and provide meals
that support employee health.

7KHHPSOR\HHFDIHWHULDDW',&¶VFRUSRUDWHKHDGTXDUWHUVRIIHUV6PDUW0HDO±VWDQGDUG',&,URGRUL&DUH6XSSOHPHQW%RZODQG
other healthy, nutrient-rich menu options. Our efforts to contribute to employee health also include making cafeteria meals moreenjoyable by introducing new choices and organizing a variety of events. In October 2019, for example, we held a blood vessel
age calculation clinic, which attracted quite a few participants. This provided an opportunity for employees to think about the
LPSRUWDQFHRIQRWRQO\GLHWEXWDOVRDZDUHQHVVRIRQH¶VRZQERG\
I look forward to continuing to support employee health by devising attractive menu options and organizing events, as well as
by promoting new initiatives.
Registered dietitian, Aim Services Co., Ltd.

DIC Report 2020

130

Makoto Sanpei

Sustainable Procurement

SDGs Goal 12

Promoting Socially Responsible Procurement Across the Supply Chain
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Promote sustainableprocurement.

Goals for fiscal year 2019

Achievements in fiscal year 2019

For Greater China–based suppliersof materials (including primary raw
materials) for which the DIC Groupdepends heavily on suppliers in the
PRC, reduce procurement-relatedrisks by closely inspecting
sustainabilit y ef for ts, including
responses to environmental
regulations, and implementing
countermeasures to address issues.

The sustainability efforts—including
responses to environmental
regulations—of 21 suppliers of key
materials based in the PRC were
inspected and measures to reducerisks were formulated that included
expanding procurement fromsuppliers in other countries andincreasing inventories.

Reduce procurement-related risks byseeking out supply sources other thanGreater China from the perspective ofESG, among others, to diversif y
supply sources.

Various options were explored withthe aim of ensuring stable supplies.
These included procur ing fromJapanese suppliers and cultivating
new suppliers in India.

Evaluation

Goals for fiscal year 2020★★

Reduce procurement-related risks byclosely inspecting the sustainability
ef for ts — including responses to
e nv i r o n m e nt a l r e g u l at i o n s — o f
suppliers of key materials for which
the DIC Group is heavily dependent
on the PRC and India.

★★

Continue to seek out new suppliersand conduct on-site inquiries using
the newly revised DIC Sustainability
Procurement Guidebook.

Basic Approach to Sustainable Procurement
Having recognized the increasing importance of addressing global issues related to human rights, climate change and water risk, among others, as social
imperatives, the DIC Group promotes socially responsible procurement practices. To ensure its extended supply chain functions in a socially responsible
manner, in 2008 the DIC Group established the DIC Group Universal Purchasing Policy, based on which it later formulated purchasing management
UHJXODWLRQVZKLOHLQLWGHYHORSHGWKH',&*URXS&653URFXUHPHQW*XLGHOLQHVZKLFKFODULI\LVVXHVLWH[SHFWVVXSSOLHUVWRDGGUHVV PRGL¿HGDQGUHQDPHG
the DIC Group Sustainable Procurement Guidelines in February 2020). Using the policy and guidelines, the Group promotes sustainable procurement acrossits supply chain by ensuring that all suppliers implement improvements and initiatives necessary to ensure the sustainability of Group procurement. GroupFRPSDQLHVLQ-DSDQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFROODERUDWHWRHQVXUHVXVWDLQDEOHSURFXUHPHQWRQDJOREDOEDVLVFor more information, please visit WEB https://www.dic-global.com/en/csr/stakeholder/partner.html

The DIC Group Universal Purchasing Policy
Guided by an action policy established to realize the DIC Group’s basic sustainable procurement
principles, the Purchasing Department adheres to the following guidelines in dealing with suppliers:

The DIC Group Sustainable
Procurement Guidelines❷ An appropriate purchasing process and the building of relationships of mutual trust❶ Compliance with laws/social norms❷ Human rights and work environments❸ Safety and health❹ Consideration for the environment❺ Information security❻ Appropriate quality and safety and technological

The DIC Group, as a good partner for suppliers, will build long-lasting, mutually trusted relationships with
VXSSOLHUVDQGZRUNWRJHWKHUZLWKWKHPIRUPXWXDOKDUPRQ\DQGEHQH¿WZKLOHFRPSO\LQJZLWKUHOHYDQWregulations/social norms, domestic and overseas, and pursuing adequate quality and prices.

❼ 6WDEOHVXSSOLHVDQGÀH[LEOHUHVSRQVHVWRFKDQJH❽ Promotion of sustainability and sustainable❶ Fair and transparent business practices

The DIC Group will implement fair and open purchasing activities with suppliers based on global
perspectives, without the constraints of conventional commercial customs.

❸ Satisfying environmental/safety needs

The DIC Group will take responsibility as an exemplary corporate citizen for environmental affairs,
occupational safety, human health and product quality, always take into account changes in society andimplement environment-friendly purchasing activities.
❹ Challenge the creation of new value

In order to respond at a high level to a new value sought by society, the DIC Group will proactively
challenge the creation of such value together with suppliers, with whom the same goal can be shared,
and strive to grow together with them in a sustainable manner.

DIC Report 2020

131

improvements

procurement initiatives

Sustainable Procurement| Encouraging Sustainable Procurement
Based on the DIC Group Universal Purchasing Policy and incorporating requirements contained in guidebooks put out by external organizations, including the Japan
Electronics and Information Technology Association (JEITA), in 2010 DIC formulated the DIC Group CSR Procurement Guidelines. To address increasingly urgent and
HYROYLQJH[SHFWDWLRQVUHJDUGLQJWKHVXVWDLQDELOLW\RIFRPSDQLHV¶SURFXUHPHQWSUDFWLFHVWKHVHJXLGHOLQHVZHUHUHFHQWO\PRGL¿HGDQGUHQDPHGWKH',&*URXS6XVWDLQDEOH
Procurement Guidelines. Notable revisions were made to sections on the formulation of a human rights policy, the management of chemical substances, minimization of
LPSDFWRQWKHHQYLURQPHQWWKHHI¿FLHQWXVHRIZDWHUUHVRXUFHVDQGHQHUJ\WKHHVWDEOLVKPHQWRIPHGLXPWHUPWDUJHWVIRUUHGXFLQJJUHHQKRXVHJDVHPLVVLRQVDQGWKH
formulation of BCPs to guarantee stable supplies. With the aim of compelling suppliers to observe these guidelines, the Group has prepared the DIC Group Sustainable
Procurement Guidebook (previously titled the DIC Group Supply-chain CSR Deployment Guidebook), version 3 of which was published in February 2020.
The Group uses the guidebook to conduct assessments and on-site inquiries and promote awareness among suppliers worldwide. A separate mechanism exists
for taking the results of sustainability assessments into account when selecting new suppliers. The Group has also formulated the DIC Group Green Procurement
Guidelines, in line with which it obliges suppliers to ensure the stringent management of chemical substances. In addition, the Group entreats suppliers to develop andrelease products that have less of an impact on the environment, promote green procurement and lower the environmental impact of the materials they procure—and the
packaging and transport, production and engineering thereof—by reducing resources and energy used, decreasing the weight and expanding the useful lifespan of, andreducing CO2 emissions from such materials.

| The DIC Group Green Procurement Guidelines
In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurement ofmaterials containing hazardous substances in seven categories*17KHJXLGHOLQHVPDQGDWHWKHVXEPLVVLRQRID',&5DZ0DWHULDOV6XUYH\DQ6'6DQG
a chemSHERPA*2, as well as a DIC Group Green Procurement Guidelines Survey, when purchasing raw materials, thereby creating a system for eliminating
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*1  6XEVWDQFHVWKHSURGXFWLRQRIZKLFKLVSURKLELWHGDVRXWOLQHGLQ$UWLFOHRI-DSDQ¶V,QGXVWULDO+HDOWKDQG6DIHW\$FW  6XEVWDQFHVGHVLJQDWHGDVFODVVVSHFL¿HGFKHPLFDOVXEVWDQFHV
LQ-DSDQ¶V$FWRQWKH(YDOXDWLRQRI&KHPLFDO6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF  6XEVWDQFHVGHVLJQDWHGIRUPRQLWRULQJXQGHU-DSDQ¶V$FWRQWKH(YDOXDWLRQRI&KHPLFDO
6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF  &KHPLFDOVXEVWDQFHVWKHSURGXFWLRQRIZKLFKLVDOUHDG\SURKLELWHGDVGHWDLOHGLQ-DSDQ¶V$FWRQWKH3URWHFWLRQRIWKH2]RQH/D\HU
7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHV R]RQHGHSOHWLQJVXEVWDQFHVOLVWHGLQWKH0RQWUHDO3URWRFRO   6SHFL¿HGSDUWLFXODWHVGHQRWHGLQ-DSDQ¶V$LU3ROOXWLRQ&RQWURO$FW  6SHFL¿HGSRLVRQRXVVXEVWDQFHVLQGLFDWHGLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FWDQG  6SHFL¿HGVXEVWDQFHVGHWDLOHGLQWKH6WRFNKROP&RQYHQWLRQRQ
Persistent Organic Pollutants.
*2 FKHP6+(53$LVDVFKHPHGHVLJQHGWRIDFLOLWDWHWKHDFFXUDWHDQGHI¿FLHQWVKDULQJRILQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVLQSURGXFWVDFURVVWKHHQWLUHVXSSO\FKDLQ',&EHJDQXVLQJFKHP6+(53$LQODWH¿VFDO\HDU

| Advance Assessment of New Suppliers,QDGGLWLRQWRUHTXLULQJVXEPLVVLRQRIWKHIRXUPDQGDWRU\GRFXPHQWVOLVWHGDERYHDVZHOODVD&RQÀLFW0LQHUDOV6XUYH\',&FRQGXFWVFRPSUHKHQVLYH
advance assessments of major new suppliers, including from a CSR perspective.

| Supplier Self-Evaluations
In accordance with the DIC Group Sustainable Procurement Guidebook, the DIC Group asks suppliers to evaluate themselves by completing aquestionnaire, which it uses to ascertain the status of suppliers’ sustainable procurement practices. The questionnaire further segments the Group’s eightSURFXUHPHQWJXLGHOLQHVLQWRLVVXHVDIC Group Sustainable Procurement Guidebook (Version 3, published in February 2020) (English):WEB

https://www.dic-global.com/pdf/about/purchase/dic_sc_csr_en.pdf| Analyzing the Results of Questionnaires,Q¿VFDO\HDUWKH',&*URXSFRQGXFWHGDVVHVVPHQWVIRUQHZ
and continuing suppliers using version 2 of the DIC Group Supplychain CSR Deployment Guidebook (as it was then called), which was
published in July 2013. This brought the total number of suppliers
DVVHVVHGEHWZHHQ1RYHPEHUDQG'HFHPEHUWRDFFRXQWLQJIRUSOXVRILWVSURFXUHPHQWVSHQGLQJ,QDGGLWLRQWR
analyzing and assessing questionnaire responses, the Group provided
feedback and where necessary requested corrective measures for
significant issues through on-site inquiries or written comments. In¿VFDO\HDUWKH*URXSZLOOEHJLQFRQGXFWLQJDVVHVVPHQWVXVLQJ
version 3 of the guidebook.
Cumulative Number ofSuppliers Assessed(November 2013–December 2019)

Assessment Distribution Chart (764 Suppliers)
500

Number of suppliers

450

418

400
350
300
250
200

147

150
100
50
0

1

Below 2.0

Low

Feedback sheet

Equivalent to 90%-plus ofprocurement spending

764
DIC Report 2020132

26 39 5182

2.0〜2.5 2.6〜2.9 3.0〜3.5 3.6〜3.9 4.0〜4.5 4.6〜5.0

ScoresHigh

Note: Based on DIC’s analysis of questionnaire responses, RIVXSSOLHUVDVVHVVHGWRGDWHVFRUHGRU
higher on the Group’s 5.0-point scale.

Sustainable Procurement| Conducting On-Site Inquiries)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSSURYLGHGIHHGEDFNWKURXJKRQVLWHLQTXLULHVRUZULWWHQFRPPHQWVWRVXSSOLHUV,QDQRQ
VLWHLQTXLU\WKH*URXSDQGWKHVXSSOLHUFRQ¿UPWKHVHOIHYDOXDWLRQSURYLGHGYLDWKHTXHVWLRQQDLUHDQGGLVFXVVFRUUHFWLYHPHDVXUHV2WKHUHIIRUWVLQFOXGH
introducing examples of Group ESG initiatives to assist the efforts of suppliers to realize sustainability.

| Global Procurement Initiatives,Q¿VFDO\HDUSURFXUHPHQWRI¿FHUVLQ-DSDQDQG*UHDWHU&KLQDFRRSHUDWHGWRFRQGXFWRQVLWHLQTXLULHVIRUVXSSOLHUVLQNH\EXVLQHVVHVLQWKH35&EDVHG
on suppliers’ questionnaire responses. DIC also worked with these suppliers to fortify understanding of environmental issues in the supply chain related to
local legal and regulatory compliance, as well as to formulate corrective measures. In addition, DIC and Sun Chemical exchanged views on future sustainable
SURFXUHPHQWLQLWLDWLYHVDWDPHHWLQJRIWKH6XVWDLQDELOLW\&RPPLWWHH,Q¿VFDO\HDU',&*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ
plans to conduct on–site inquiries for suppliers using other newly revised Group Sustainable Procurement Guidebook.

| Ensuring the Sustainable Procurement and Use of Raw Materials
The DIC Group promotes the sustainable use of raw materials from a medium- to long-term perspective. This includes giving consideration to a wide
UDQJHRIIDFWRUVLQFOXGLQJFOLPDWHFKDQJHDQGUHVRXUFHFRQVHUYDWLRQZKHQXVLQJUHF\FODEOHPDWHULDOV/RRNLQJDKHDGWKH*URXSZLOOH[SDQGWKHJOREDO
application of its sustainable raw materials initiatives.

| &RQÁLFW0LQHUDOV,QFRPSOLDQFHZLWKWKH866HFXULWLHVDQG([FKDQJH&RPPLVVLRQ 6(& ¶VUHTXLUHPHQWIRUOLVWHGFRPSDQLHVWRUHSRUWRQWKHLUXVHRIFRQÀLFWPLQHUDOVWKH
',&*URXSKDVSUHSDUHGLWV%DVLF3ROLF\&RQFHUQLQJ&RQÀLFW0LQHUDOV7KLVSROLF\RXWOLQHVWKH*URXS¶VSOHGJHWRUHIUDLQIURPXVLQJJROGWDQWDOXPWXQJVWHQDQGWLQZKLFKDUHFODVVL¿HGDVFRQÀLFWPLQHUDOV²WKDWLVPLQHUDOVPLQHGLQFRQGLWLRQVRIDUPHGFRQÀLFWDQGDEXVHLQWKH'HPRFUDWLF5HSXEOLFRI&RQJRDQG
LWVQHLJKERULQJFRXQWULHV²DQGVWDWHVWKDWVKRXOGDQ\UDZPDWHULDOVSXUFKDVHGIURPWKLUGSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH',&*URXSZLOOLPPHGLDWHO\WHUPLQDWHWKHSURFXUHPHQWWKHUHRI7KLVSROLF\LVSXEOLVKHGRQWKH',&JOREDOZHEVLWH7KH',&*URXSXVHVWKH&RQÀLFW0LQHUDOV5HSRUWLQJ
7HPSODWHSUHSDUHGE\WKH5HVSRQVLEOH%XVLQHVV$OOLDQFH 5%$ DQGWKH5HVSRQVLEOH0LQHUDOV,QLWLDWLYH 50, WRFRQGXFWFRQÀLFWPLQHUDOVDXGLWVDFURVVLWVHQWLUHVXSSO\FKDLQ$VRI'HFHPEHUUHVSRQVHVKDGEHHQUHFHLYHGIRUPRUHWKDQRIWKHLWHPVFXUUHQWO\SURFXUHGE\*URXSSXUFKDVLQJGHSDUWPHQWV,Q¿VFDO\HDUWKH*URXSEHJDQFRQGXFWLQJDXGLWVXVLQJWKH&REDOW5HSRUWLQJ7HPSODWH &57 ZKLFKDGGUHVVHVFREDOWLQWKHVXSSO\FKDLQ

| Promoting Awareness In-House
The DIC Group regularly provides regular training for in-house purchasing personnel, including at point of hire, when transferred and prior tomeetings with suppliers.

VOICE We promote sustainable procurement by implementing continuous improvement.
I work for at DIC Synthetic Resins (Zhongshan), where I am in charge of procuring raw materials for metal carboxylates used in tires.
The supply chain for these metal carboxylates depends on leading global brand owners and supplies of raw materials from a limited
number of suppliers. Accordingly, we view each supplier as an indispensable business partner and work to build relationships basedon mutual trust while striving to ensure sustainable procurement.
To improve quality and promote sustainability across the supply chain, we regularly survey suppliers using questionnaires, whilepurchasing, quality assurance and production staff conduct audits to deepen mutual understanding of the status of efforts to comply
with laws and regulations, ensure occupational safety and health, and protect the environment. We provide feedback to suppliers on
audit results and request corrective actions when standards are not met while at the same time providing related information to support
improvements. As part of our efforts to ensure responsible procurement of minerals, we collaborate with corporate headquarters to
conduct surveys of companies supplying processed cobalt products jointly and share information.
,Q$XJXVW',&6\QWKHWLF5HVLQV =KRQJVKDQ ZDVDZDUGHGDVLOYHUPHGDOE\(FR9DGLVIRULWV(6*LQLWLDWLYHV5DWKHUWKDQEHLQJVDWLV¿HGZLWKZKHUHZHDUHQRZKRZHYHU,ORRNIRUZDUGWRZRUNLQJDFWLYHO\ZLWKVXSSOLHUVWRIXUWKHUDGYDQFHWKHVXVWDLQDELOLW\RIRXU
procurement practices.
Oﬃcer, Procurement Department, DIC Synthetic Resins (Zhongshan) Co., Ltd.

DIC Report 2020

133

Yu Fang Zhou

Business Models that Respond to Social Imperatives

SDGs Goals 8, 9 and 11

Cultivating Next-Generation Businesses
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Propose solutions - or iented
businesses that respond to social
imperatives.

Goals for fiscal year 2019

Achievements in fiscal year 2019

Evaluation

Goals for fiscal year 2020

Bolster collaboration with external organizations and promote prompt commercialization with the aim of advancing thecreation of next-generation businesses
that enhance sustainability and reinforce
the Group’s ability to propose supply
chain–oriented solutions.

The DIC Group established a new business thatwill help enhance the sustainability of customers by developing a new solvent-free adhesive,
which is expected to reduce CO2 emissions
attributable to the production of packaging films,
and is sold together with an adhesive supply
unit that facilitates efficient coating.

★★★

Contribute to the realization of a sustainable society by fostering next-generation businesses that anticipate technological changes.

Participate in trade shows for key customer industries in Japan and overseas tostrengthen the DIC brand and promote
digitization to improve efficiency.

The DIC Group participated in major
trade shows such as the 2019 Smart
Building Expo in Tokyo.

★★★

Participate in trade shows for key customer industries in Japan and overseas tostrengthen the DIC brand and promote
digitization to improve efficiency.

| New Pillar Creation: Promoting New Businesses that Respond Accurately to the Changing Needs of Society
The DIC Group sees one of its key missions as being to achieve sustainable growth both for itself and society by helping to address social
imperatives related to climate change, the digitization of society, urbanization and longevity by identifying key business domains andproviding products that respond to such imperatives.
With the goal of swiftly realizing this mission, DIC has outlined two basic business development strategies in its new medium-term
management plan, DIC111: “Value Transformation” and “New Pillar Creation.” In line with the strategy of Value Transformation, the Groupwill advance qualitative reforms in existing core businesses by shifting to businesses with differentiated high-value-added products and withmore of a focus on social value. New Pillar Creation emphasizes creating new businesses by identifying areas where ESH-related issues andsocial changes intersect with the DIC Group’s competencies. This strategy continues to guide a number of key initiatives, several of which
are described on page 135.

| Designing a Framework for New Pillar Creation
7KH',&*URXS¶VVXFFHVVLQSURYLGLQJQHZSURGXFWVDQGVHUYLFHVWKDWEHQH¿WVRFLHW\DQGFUHDWLQJQHZ
Priority Areas of the New
businesses will depend on how well it understands the sources of its competitiveness and whether it canBusiness Development
Headquarters
swiftly and accurately identify social imperatives and needs. The ability to take responsibility for seeing
the development process through to commercialization is particularly crucial. Accordingly, rather than
① Electronics
depending on a conventional marketing-led approach to development, the Group has designed a framework② Automotive
centered on a deployment team that is charged with facilitating the design of new businesses by overseeing③ Next-generation packaging
everything from planning and development through to production and sales, thereby ensuring that efforts to④ Healthcare
create new businesses optimize overall capabilities and are strategically effective.
+DYLQJHVWDEOLVKHGWKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVWRVHUYHDVWKHGHSOR\PHQWWHDPDQGLGHQWL¿HGIRXUSULRULW\EXVLQHVV
areas, the DIC Group will leverage its ingenuity to advance the creation of new products that are useful to society and next-generation
businesses with the potential to become mainstays.
The DIC Group will also bring together people from technical and sales backgrounds with detailed understanding of these business areasand people with experience in related industries with the aim of enhancing expertise and communications capabilities, as well as make active
use of open innovation—including through participation in initiatives involving collaboration between industrial concerns and academia andE\FDSLWDOL]LQJRQH[WHUQDOUHVRXUFHV²WRSURPRWHWKHWLPHO\GHYHORSPHQWDQGFRPPHUFLDOL]DWLRQRISURGXFWVWKDWEHQH¿WVRFLHW\

DIC Report 2020

134

Business Models that Respond to Social Imperatives| Examples of New Pillar Creation
1

Focus on packaging materials

Developing and Providing Sustainable Products and Solutions in the Packaging Field

In addition to reducing emissions of CO 2, a key cause of global warming, the DIC Group has
positioned the issue of marine plastics, which impacts the environment and ecosystems, asa pressing issue and has established a project aimed at reinforcing its efforts to address thischallenge that involves multiple departments dealing with packaging materials. The project is
promoting the development of materials and technologies in line with the “4Rs” (“Recycle, Reduce,
Reuse and Redesign”) of packaging with the goal of deploying new bio-derived raw materials andcircular packaging. Looking ahead, the Group will also seek to address this challenge by broadening
its approach to include the entire packaging materials supply chain, advancing the development of
products suitable for monomaterials, easily peelable ink solutions and technologies to prevent thedeterioration of recyclable plastics, among others, thereby contributing to the realization of moresophisticated recycling.
2

Raw materials

Films for printing

Packagingmaterials
supply chain■ Develop technology which

can use chemically recyclable
materials and bioderived
raw materials■ Develop films suitable forrecycling, such as easily
separable multilayer materials
and monomaterials

Consumption

Recovery and sorting■ Develop easily peelable inks

and adhesives■ Develop technologies to

Recycling

prevent deterioration ofrecyclable plastics/HYHUDJLQJ%LRUHÀQHU\7HFKQRORJLHVWR+HOS5HDOL]H'HFDUERQL]DWLRQWKURXJKWKH'HYHORSPHQWRID%LRGHJUDGDEOH6$3%LRUH¿QHU\WHFKQRORJLHVZKLFKPDNHLWSRVVLEOHWRXVHELRPDVVDUHQHZDEOHUHVRXUFHUDWKHUWKDQSHWUROHXPGHULYHGUDZPDWHULDOVLQWKH
production of chemicals, are attracting increasing attention around the world. Since summer 2019, the DIC Group and Tokyo-based biotech
startup Green Earth Institute Co., Ltd. (GEI) have promoted joint research aimed at developing a naturally derived aspartic acid–based
biodegradable waterborne superabsorbent polymer (SAP). In this initiative, GEI—which boasts outstanding expertise in the development ofgreen chemicals—is charged with developing naturally derived aspartic acid using an innovative fermentation technology that absorbs CO2.
DIC’s role is to create a process for polymerizing the new aspartic acid and to explore ways to scale
up the production system.
3ULQFLSDODSSOLFDWLRQVIRUFRQYHQWLRQDO6$3VLQFOXGHSDSHUGLDSHUVVRLOPRGL¿HUVDQGFRVPHWLFVHowever, because such SAPs are petroleum-derived, they are a major cause of marine plastics andwaste plastic. The SAP under development by the DIC Group and GEI is made with a recyclable
material, making it biodegradable, and is thus expected to contribute to both the realization ofenvironment-friendly products that help resolve these issues as well as to decarbonization and the
reduction of waste plastic.
Aspartic acid–based biodegradable waterborne SAPTOPIC
DIC Provides Hollow-Fiber Membranes for Use in ECMO',&SURYLGHVKROORZ¿EHUPHPEUDQHVWRDGGR[\JHQWRWKHEORRGLQH[WUDFRUSRUHDOPHPEUDQHR[\JHQDWLRQ
(&02 ZKLFKLVFXUUHQWO\EHLQJXVHGZRUOGZLGHWRWUHDWFULWLFDOO\LOO&29,'SDWLHQWV2[\JHQDWRUV
replace the function of the patient’s own lungs, temporarily drawing low-oxygen venous blood from theSDWLHQW¶VERG\WRDOORZDUWL¿FLDOR[\JHQDWLRQDQGWKHQUHWXUQLQJLWWRWKHERG\A hollow-fiber membrane is a bundle of hollow fibers that oxygenates blood by flowing it across theouter surface of the gas permeable bundle while passing oxygen through the inside. DIC’s hollow-fiber
PHPEUDQHVIRUWKLVDSSOLFDWLRQDUHPDGHZLWKDVSHFLDOSRO\ROH¿QUHVLQWKDWHIIHFWLYHO\PLQLPL]HVWKHULVN
of thromboembolic complications and have earned a solid reputation for reliability over the three decades
VLQFH¿UVWEHLQJDGRSWHGIRUXVHDVR[\JHQDWRUJDVVHSDUDWLRQPHPEUDQHVLQ*LYHQWKHLQFUHDVLQJ
number of patients worldwide with acute respiratory distress syndrome (ARDS) as a result of the COVID-19
pandemic, DIC will continue working to help ensure a steady supply of indispensable medical equipment.
(&02LVDQH[WUDFRUSRUHDOWHFKQLTXHIRUSURYLGLQJUHVSLUDWRU\DQGFLUFXODWRU\VXSSRUWWRSDWLHQWVZLWK$5'6XVLQJDSXPSDQGDQR[\JHQDWRUDIC Report 2020

135',&¶V+ROORZ¿EHUPHPEUDQHXVHGLQ2[\JHQDWRURI(&02New Technology Development and Value Creation

SDGs Goals 9 and 12

Proposing Solutions that Leverage Core Technologies
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2019

Achievements in fiscal year 2019

Enhance ability to develop products
and technologies that facilitatecontribution to a sustainable society.

• Accelerate collaboration among global
technology bases in the development ofstrategic products and new technologies.
• Make use of compounding technologies, open
innovation and AI to hasten the developmentof technologies that create added value.

• Various facilities collaborated to promote R&D.
• The use of AI helped accelerate the developmentof resists for packaging applications and othernew products.

Accelerate efforts to develop productsthat contribute to sustainability.

• Efforts led to the development of a new 100%
biomass-derived plasticizer and the expansionof DIC’s lineup of biomass-derived gravure
inks, offset inks and other products.
• Environment-friendly products accounted for
58% of overall product sales.

Promote the development ofenvironment-friendly products
and services.

Evaluation★★

★★

Goals for fiscal year 2020
• Accelerate collaboration among global
technology bases in the development ofstrategic products and new technologies.
• Make use of compounding technologies,
open innovation and AI to hasten thedevelopment of technologies that create
added value.

Accelerate efforts to develop productsthat contribute to sustainability.

| Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including
those in the areas of optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies in suchareas as polymer synthesis, compounding and formulation, and surface treatment, to develop high-value-added products that contribute toa sustainable society. The Group is also building a portfolio of next-generation products and new technologies by integrating technologicalresources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

| 6SHFLÀF,QLWLDWLYHVDQG$FKLHYHPHQWVThe DIC Group is promoting the development and use of clean technologies. The Group is shifting toward materials—with reduced
environmental impact, notably energy–saving, water-based and solvent-free materials, as well as materials for the electronics, automotive,
packaging and graphics, and other customer industries—that improve the environmental performance of the products in which they are used,which it has positioned as environment-friendly products. In Japan, the Group devotes approximately 50% of its technological resources tothe development of such products.

Development of New Technologies, Products and Solutions to Support Business Portfolio Transformation
Segment
Value
Transformation

Core Technologies
Polymer synthesis

Organic
molecular
designColoring
Opticsand color

Adhesion
Molding

Resin curing
Polymer
designLiquid/liquid dispersion

Basic
Technologies

Dispersion

Applicability
assessment(Coating/printing/molding/adhesion)

Film formation

Compounding and formulation

Solid/liquid dispersion
Rheology

Surface treatment

Composite
technology
×Open innovation
×Thorough use ofIT (AI, MI)

Packaging &Graphic

Next-generation packaging inks and coatings,
functional packaging adhesives,
industrial-use jet inks, others

Color &
Display

Pigments for color filters, pigments for cosmetics,
effect pigments, natural colorants, LC materials,
next-generation display materials, others

Functional
Products

Sustainable polymers, environment-friendly PPS
compounds for automotive components,
high-performance industrial adhesive tapes, others

Business Area

New Pillar
Creation

Organic synthesis
Crystallization

Creating and Adding Depth to Basic Technologies
Development of sustainable technologies and high-performance materials

DIC Report 2020

136

TargetTargetElectronics

Technologies and functional materials that support
the spread of digitization

Automotive

Technologies and functional materials that underpin
efforts to transform the automotive industry

Next-Generation
Packaging

Packaging materials that help reduce food loss
and support sustainability

Healthcare

Microorganism and cell culture technologies
with applications extending from food safety toadvanced medical care

New Technology Development and Value Creation

Products for Use in Electronics Equipment
The DIC Group continued to see expanded sales of epoxy resin–curing agents with superior dielectric properties for use as smartphone basestations, thin adhesive tapes with outstanding adhesiveness and bondability for smartphones and thick adhesive tapes that can be stretched
and removed for televisions. The Group also leveraged AI to dramatically shorten the time needed to develop a highly heat-resistant, fastdeveloping novolac resin for use in the production of resists for packaging applications. In products for LCDs, the Group is working to develop
new pigments for color filters and is shipping samples of polymer sustained alignment (PSA) LCs that boast outstanding transparency,
response time and sensitivity, for 8K televisions. In next-generation display materials, the Group continued to promote development of inks
XVHLQWKHSURGXFWLRQRILQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V 
Products for Packaging and Graphics Applications
In the area of gravure inks, the DIC Group earned certification under Japan’s Biomass Mark program for products for reverse printing,
VXUIDFHSULQWLQJDQGSULQWLQJRQVKULQN¿OPDPRQJRWKHUVIXUWKHUH[SDQGLQJLWVOLQHXSRIELRPDVVEDVHGSURGXFWV,QRIIVHWLQNVWKH*URXS
also obtained Biomass Mark certification for UV-curable inks for use in printing on packaging that employs conventional LED-UV lamp
curing. In adhesives, the Group developed a new fast-curing solvent-free packaging adhesive that reduces emissions of VOCs and CO 2
WRJHWKHUZLWKDVROYHQWIUHH¿OPODPLQDWLRQV\VWHP,QSDFNDJLQJPDWHULDOVWKH*URXSFRQWLQXHGWRVHHH[SDQGHGVDOHVRIHDV\SHHOVHDODQW¿OPOLGPDWHULDOVIRUFRQWDLQHUVXVHGIRUVDODGVVROGDWFRQYHQLHQFHVWRUHVWKDWH[WHQGSURGXFWV¶VKHOIOLIHWKHUHE\UHGXFLQJIRRGORVV| $*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
DIC’s R&D organization in Japan comprises the Technical Management Unit, which is responsible for R&D connected directly to businesses;
the R&D Management Unit, which is responsible for adding depth to existing and fostering new basic technologies; and the New Business
Development Headquarters, which is charged with creating strategic new businesses and commercializing business units’ next-generation
product groups. These entities promote the global development of products and technologies in collaboration with the R&D componentsof DIC Group companies around the world. These include DIC Graphics; the Sun Chemical Group’s research centers in the United States,
the United Kingdom and Germany; Qingdao DIC Finechemicals, which conducts comprehensive R&D tailored to market needs in the PRC;
printing inks technical centers, polymer technical centers, solid compound technical centers and pigment technical centers in the PRC and the$VLD±3DFL¿FUHJLRQWKH)LQH&KHPLFDO7HFKQLFDO&HQWHU±.RUHDDQGDQDOJDHUHVHDUFKFHQWHULQWKH8QLWHG6WDWHV

| Promoting Environment-Friendly Products
The DIC Group is committed to effective stewardship of the products it provides. (For more information, please see page 51.) Conscious always of the importance of ensuring its products
are environment-friendly, DIC promotes the development of products and new technologies that are useful to society and works to increase the weighting of environment-friendly products
in its portfolio, by reducing the volume of hazardous substances it uses, focusing on products that are less hazardous and products that facilitate recycling, and realizing safer production
processes that generate less waste and use less energy. The Group has established internal rules for designating products “environment-friendly” and works to increase the weightingof products that have earned this designation in their portfolio. In fiscal year 2019,
Evaluation Sheet for Environment-Friendly Products
environment-friendly products accounted for 58% of all products put out by DIC and
Department:
Prepared by:
Prepared on:
subsidiary DIC Graphics. The Group also strives to maintain a solid grasp of laws
Product to be Evaluated:
Evaluation
and regulations in different countries and territories, and of trends in environmental
Description
Certifying Standards
Item
Energymeasures—thereby ensuring its ability to design products that comply with diverse
Reduction of energy inConsumption
production, transportation, etc.
regulations governing the use of chemical substances in different markets—and
Reduction of use of nonMaterials to
renewable materials, nonconducts environmental assessments on a continuous basis.
be Usedrecyclable materials, etc.
For printing inks, adhesives and other products used in food packaging, which theHazards
Product with lower toxicity, etc.
Group supplies to customers around the world, the DIC Group has established a global
Amount ofReduction of environmentally
Waste
product stewardship team. The team shares information on regulations and relevant
concerned substances, etc.
Generated
topics from different markets, as well as promotes awareness thereof and provides
Remarks:
Evaluator
education. Knowledge thus gained is incorporated into product design and used to
produce compliance certificates across the supply chain, which are essential for
Since 2003,
Si
2003 DIC hhas usedd a proprietaryi ta systemt
forf designatingd iti environment-friendlyit f i dl products
d t andd
customers worldwide.
uses a proprietary sheet to evaluate products based on energy consumption, materials to be used,
Average offhazards and waste generated, as well as to conduct life cycle assessments.

DIC Report 2020

137

Coefficient

Subtotal

New Technology Development and Value Creation

Introducing the DIC Sustainability Index
To ensure that stakeholders understand the true worth of DIC Group products and solutions that address social imperatives, in addition to
being environment-friendly, the Group introduced a proprietary sustainability index. The Group began using the DIC Sustainability Index in¿VFDO\HDU

Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean technologies designed to help resolve critical global
environmental issues. Product divisions promote the development of clean technology–related products for individual target markets thatleverage distinctive DIC capabilities. Overall annual sales of such products currently amount to approximately ¥159.2 billion.
The DIC Group is conscious of the need to promote the “3Rs” (“Reduce, Reuse, Recycle”) for resources. The Group is working to help
UHGXFHPDWHULDOVXVHGE\LWVFXVWRPHUVLQVXFKDUHDVDV¿OPIRUEUHDGSDFNDJLQJE\PDNLQJSURGXFWVWKLQQHUZKLOHPDLQWDLQLQJVWUHQJWK7R
enhance the recyclability of plastic packaging, the Group is developing and launching deinking agents and other innovative products. The
Group is also taking active steps to help reduce waste plastic and marine plastics, recognizing these as challenges that, as a manufacturer of¿QHFKHPLFDOVLWKDVDUHVSRQVLELOLW\WRDGGUHVV| Innovation through Compounding
Building on its fundamental pigment and resin dispersion and formulating technologies, realized through the production of printing inks, DIC
has succeeded in combining materials with different properties and performance characteristics to develop groundbreaking products andcreate new value. Recent achievements in the area of materials for automotive applications include the launch of a new super-tough PPS
compound and various types of colorants for engineering plastics that leverage carbon black ultrahigh dispersion technologies to deliver
outstanding surface smoothness and a high level of jetness for molded parts. The Group will continue to harness its distinctive compounding
capabilities to transform its diverse technologies into competitive advantages into competitive advantages with the aim of driving innovation.

| Protecting Intellectual Property
Recognizing the effective use of intellectual property as indispensable to new technology development and value creation, a key management
challenge, business groups and technical and intellectual property teams are working as one to advance intellectual property strategies.
Capitalizing on this approach, the DIC Group is actively employing an open and closed strategy to build a robust patent portfolio. The Groupis also focusing efforts on the use of patent search and analysis and the gathering of highly precise information with the aim of capitalizing on
patent landscapes and other intellectual property information as key management assets.
',&¶VHIIRUWVWRUHLQIRUFHSURWHFWLRQRILWVLQWHOOHFWXDOSURSHUW\DUHDOVRDWWUDFWLQJQRWLFHRXWVLGHRIWKH&RPSDQ\)RUH[DPSOHLQ¿VFDO
year 2019, DIC was 4th in a ranking of companies in the chemicals industry in Japan in terms of patent assets owned conducted by anindependent firm*. DIC registers an average of 400 new patents annually. While this is small compared to leading chemicals firms, the&RPSDQ\UHFHLYHGDKLJKVFRUHIRUWKHRYHUDOOVFDOHRILWVSDWHQWDVVHWVUHÀHFWLQJWKHTXDOLW\DQGKLJKSUR¿OHRIWKHSDWHQWVLWKROGV',&ZLOO
continue to actively protect its intellectual property portfolio with the aim of ensuring sustainable growth in the years ahead.
* Patent Result Co., Ltd.

VOICE We developed a 100% biomass-derived polyester plasticizer.
2XUJURXSKDVGHYHORSHGDQH[WHQVLYHUDQJHRISRO\PHUPRGL¿HUVWKDWLQFOXGHVSODVWLFL]HUVVWDELOL]HUVDQGKLJKO\IXQFWLRQDOPRGL¿HUV,QUHFHQW\HDUVZHKDYHZRUNHGWRDGGYDOXHWRWKH',&*URXS¶VPRGL¿HUVZLWKWKHDLPRIFRQWULEXWLQJWRWKHUHDOL]DWLRQRIWKH6'*VDQGWRVXVWDLQDELOLW\,Q¿VFDO\HDUZHVXFFHHGHGLQGHYHORSLQJPolycizer W-1810-BIODSRO\HVWHUSODVWLFL]HUWKDWVDWLV¿HVDOOWKHEDVLFSHUIRUPDQFHUHTXLUHPHQWVRISRO\HVWHU
plasticizers yet is derived entirely from biomass resources. This product earned Biomass 100% Biomass MarkFHUWL¿FDWLRQIURPWKH-DSDQ2UJDQLFV5HF\FOLQJ$VVRFLDWLRQ -25$ 7KHUHDFWLRQWRWKLVQHZSURGXFWKDVEHHQ
extremely positive and it has earned solid marks in a variety of applications.
Assistant Manager, Polymer Technical Group 10, Polymer Technical Division 2, DIC Corporation

DIC Report 2020

138

Takafumi Noguchi

Harmony with the Community and Social Contributions

SDGs

Goals 3 and 4

Adding Color & Comfort to Lifestyle

Basic Approach to Social Contribution
Based on its Guidelines for Social Contribution Activities, established in fiscal year 2009, the DIC Group works to ensureharmony with local communities and individuals through activities aimed at building a strong relationship with society.

The DIC Group’s Guidelines for Social Contribution Activities
In line with its Color & Comfort by Chemistry management vision, the DIC Group will promote social contribution initiatives inthree areas: Business activities, culture and education, and communities and society.

Business activities
The DIC Group will offer products and services that contribute to the development of a sustainable society and protection of
the global environment from the viewpoint of “CSR through business activities.”

Culture and education
The DIC Group will engage in activities that will contribute to the development and promotion of culture, the arts, science andeducation, including fostering next-generation human resources in areas such as the culture of color and chemistry.

Communities and society

The DIC Group will strive to coexist harmoniously with local communities to develop a relationship of mutual trust. Moreover, the Group will
provide an environment that enables employees to engage in voluntary contribution activities in their respective local communities.

| Principal Initiatives
Publication of the Guidebook for the Color Universal Design–Recommended Color Set
The DIC Group is actively involved in R&D in the area of color universal design (CUD), as well as in expanding public awareness and understanding of CUD’s importance. In 2007, theGroup, in cooperation with the Japan Paint Manufacturers Association, the Industrial Research Institute of Ishikawa and the Color Universal Design Organization, embarked on a project tocreate the Color Universal Design–Recommended Color SetXQGHUWKHVXSHUYLVLRQRIWKH8QLYHUVLW\RI7RN\R,QGHYHORSLQJWKHFRORUVHWWKHRUJDQL]DWLRQVFRQGXFWHGUHSHDWHGYHUL¿FDWLRQ
tests using study participants with various types of color vision to adjust proposed colors, a process that facilitated the creation of a set of colors that are relatively easy to distinguish
UHJDUGOHVVRIDELOLW\WRVHHFRORUVDQGFDQEHUHSURGXFHGXVLQJSULQWLQJLQNVFRDWLQJVDQGGLJLWDOLPDJLQJ7DNLQJLQWRDFFRXQWQHDUO\DGHFDGHRIXVHLQ¿VFDO\HDUWKHSURMHFW
members revised the set’s color values to further enhance usability. The organizations also published a guidebook on effective use of the set and has worked to promote understanding
and awareness.
)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSSDUWLFLSDWHGLQDMRLQWLQGXVWU\±DFDGHPLFUHVHDUFKSURMHFW'XULQJWKLVSHULRG&KLED8QLYHUVLW\WKH&HQWUDO5HVHDUFKLaboratories and DIC Color Design, Inc., gave presentations on issues to consider in printing warnings and other important information on packaging and the results of joint research on
the color appearance of red spot colors and on the use of color in an aging society at academic conferences in Japan and overseas.
,Q',&EHJDQFROODERUDWLQJZLWKWKH8QLYHUVLW\RI7RN\RDQGDUFKLWHFW.HQJR.XPDWRGHYHORSQHZWDFWLOHSDYLQJWKDWHQVXUHVKLJKYLVLELOLW\IRUYLVXDOO\LPSDLUHGLQGLYLGXDOVDQG
LVLQKDUPRQ\ZLWKWKHODQGVFDSH,Q¿VFDO\HDUWZRQHZFRORURSWLRQV DZDUPRUDQJH\\HOORZDQGDFRRO\HOORZLVKJUHHQ ZHUHLQWURGXFHGIRUWKHQHZSDYLQJ7KHFRRO\HOORZLVKJUHHQZDVDGRSWHGIRUXVHLQWKH¿UVWÀRRUDWULXPRI-5<RNRKDPD7RZHUZKLFKRSHQHGLQDIXQFWLRQDOO\EHDXWLIXOFKRLFHWKDWKDUPRQL]HVZHOOZLWKWKHDWULXP¶VPRGHUQGHVLJQ'DUN
lines have been placed on both sides of the space’s tactile paving to realize a high luminance contrast to adjoining surfaces, ensuring they can be easily detected and effectively used.
,QDQRWKHUNH\LQLWLDWLYHLQ¿VFDO\HDU',&WRRNSDUWLQSURMHFWWRUHYLVHWKH-DSDQ,QGXVWULDO6WDQGDUGV -,6 VWDQGDUGIRUVDIHW\FRORUV -,6= ZLWKWKHJRDORIFKRRVLQJFRORUVWKDWFDQEHGLVWLQJXLVKHGE\SHRSOHZLWKGLYHUVHFRORUYLVLRQ$VDPHPEHURIWKHRULJLQDOGUDIWLQJFRPPLWWHH',&ZDVLQYROYHGLQVHWWLQJUHFRPPHQGHG&0<.YDOXHVIRUSURFHVVSULQWLQJZKLFKKDGQRWSUHYLRXVO\EHHQSURYLGHG7KH&RPSDQ\FRQWLQXHVWRFRRSHUDWHLQLQLWLDWLYHVDLPHGDWSURPRWLQJDZDUHQHVV%HJLQQLQJLQ',&LVSDUWLFLSDWLQJDVDQH[SHUWLQWKH¿HOG
RIFRORULQWKHYHUL¿FDWLRQRIVDIHW\UHODWHGFRORUVFKHPHVIRUDSSOLFDWLRQVVXFKDVGLVDVWHUSUHYHQWLRQLQIRUPDWLRQ
Used extensively in signage and infrastructure, CUD is playing an increasingly important role in everyday life. The broader application of CUD is also expected to enhance safety and convenience.

-5<RNRKDPD7RZHUÀUVWÁRRUDWULXP
Owner: JR East Railway Company
Architects/supervision: JR East Design Corporation
Photograph: JR East

DIC Report 2020139

Harmony with the Community and Social Contributions

Visiting Science Lab Program
In line with the Japanese government’s efforts to promote career education initiatives, as well as
to help curb a decline in the popularity of science among children, DIC and DIC Graphics conduct
visiting science labs at public elementary schools. Through this program, the Group seeks tospark children’s interest in science and encourage them to realize the close relationship between
science and their everyday lives. Designed with the aim of making science fun for children and
KHOSLQJWKHPXQGHUVWDQGKRZWKHVWXG\RIVFLHQFHEHQH¿WVVRFLHW\WKHODEHQWDLOVH[SHULPHQWV
in synthesizing pigments and planographic printing, that is, printing from a flat surface. Since
ODXQFKLQJWKLVLQLWLDWLYHLQWKHWZRFRPSDQLHVKDYHSURYLGHGFODVVHVDWHOHPHQWDU\VFKRROVIRUDSSUR[LPDWHO\VL[WKJUDGHUV,Q¿VFDO\HDUWKH',&*URXSDOVRFRQGXFWHGDYLVLWLQJVFLHQFHODEIRUHOHPHQWDU\VFKRRO
students as part of the Tohoku University Graduate School of Engineering’s Science Campus
project. The lab was well received by both participating children and their parents. The Grouppledges to continue offering visiting science labs in the years ahead.

Visiting science lab

Comment This is an initiative that makes one aware of the satisfaction of being a leader in the advancement ofsociety through chemistry.

Engineers and researchers from various companies serve as instructors for hands-on classes conducted as part of the Tohoku
University Graduate School of Engineering’s Science Campus program, an initiative that seeks to provide children with an opportunity togain an understanding of craftsmanship, which plays an important role in everyday life, as well as to actually experience manufacturing
DQGFRQGXFWH[SHULPHQWVFORVHO\OLQNHGWRWKHODWHVWVFLHQWL¿FDQGWHFKQRORJLFDODGYDQFHVIn addition to fueling children’s interest in manufacturing, and in science and technology, this initiative seeks to cultivate a new
JHQHUDWLRQRIHQJLQHHULQJWDOHQWE\HQDEOLQJWKHPWRLQWHUDFWGLUHFWO\ZLWKLQGLYLGXDOVLQUHODWHG¿HOGVJLYLQJWKHPDQLGHDRIWKHFDUHHU
paths available to them in the future. We believe it is important to provide children with stimulation in various forms, and the DIC visiting
science lab was particularly valuable in that regard. We also received positive comments from parents. One expressed that the lab had
given children a renewed appreciation of the role of chemistry in their everyday lives, while another felt that encouraging children to see
FKHPLVWU\DVVRPHWKLQJIDPLOLDUZRXOGPDNHWKHPOLNHVFLHQFHEHWWHU<HWDQRWKHUFRPPHQWHGWKDWH[SHULHQFLQJWKHSRZHURIFKHPLVWU\
to add color and enrich life would encourage children to see it as something they would like to do professionally in the future.
Associate Professor, Graduate School of Engineering and Vice-Director, Innovation Plaza, School of Engineering, Tohoku University

Hajime Nakamura

Initiatives Led by the Central Research Laboratories
DIC’s Central Research Laboratories supports education by offering a variety of programs for local high schools that leverage DIC’s unique
FDSDELOLWLHV,Q-XO\WKH&HQWUDO5HVHDUFK/DERUDWRULHVSDUWLFLSDWHGLQWKH&KLED6FLHQFH+LJK6FKRRO)HVWLYDORUJDQL]HGE\KLJKVFKRROVLQ&KLED3UHIHFWXUHWKDWKDYHHDUQHGWKH6XSHU6FLHQFH+LJK6FKRRO GHVLJQDWLRQZLWKWKHDLPRIIRVWHULQJVWXGHQWV¶LQWHUHVWLQ
VFLHQFHDQGLQ'HFHPEHULQYLWHGVWXGHQWVIURP6HLVKLQ*DNXHQ+LJK6FKRROD6XSHU6FLHQFH+LJK6FKRROLQ,EDUDNL3UHIHFWXUHWRWDNHSDUWLQDOHFWXUHRQWKHXVHRIXVLQJWHVWLQJHTXLSPHQWWRHYDOXDWHDQGDQDO\]HFKHPLFDOVXEVWDQFHV,Q-XO\WKHIDFLOLW\DOVR
dispatched young researchers to conduct summer vacation mini lectures at the request of a local elementary school and welcomed students
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extraction using Spirulina as part of a visiting lab lesson for elementary school children offered as a component of the Chiba Prefectural(GXFDWLRQ$JHQF\¶V'UHDP&KDOOHQJH+DQGV2Q6FKRRODQGLQYLWHGVWXGHQWVIURP&KLED3UHIHFWXUDO6DNXUD+LJK6FKRROWRWDNHSDUWLQD
fashion design workshop. In addition to experiments, each of these events allocated time for the young employees who served as instructors
to talk about how they became interested in science and the challenges and rewards of research, thus enabling them to contribute to career
education as well as to help students enjoy science.
³6XSHU6FLHQFH+LJK6FKRRO´LVDGHVLJQDWLRQDZDUGHGE\-DSDQ¶V0LQLVWU\RI(GXFDWLRQ&XOWXUH6SRUWV6FLHQFHDQG7HFKQRORJ\WRVHQLRUKLJKVFKRROVWKDWLPSOHPHQWFXUULFXODIRFXVHGRQWKHVFLHQFHVDQG
PDWKHPDWLFVWKDWJRHVEH\RQGWKH0LQLVWU\¶VRI¿FLDOJXLGHOLQHVZLWKWKHDLPRIIRVWHULQJWKHQH[WJHQHUDWLRQRIWDOHQWHGHQJLQHHUVDQGVFLHQWLVWVDIC Report 2020

140

Harmony with the Community and Social Contributions

Initiatives Led by the Kashima Plant,Q'HFHPEHU',&¶V.DVKLPD3ODQWLQ,EDUDNL3UHIHFWXUHFRQGXFWHGDYLVLWLQJVFLHQFHODEDWORFDO6XSHU6FLHQFH+LJK6FKRRO Seishin
Gakuen¶V6XSHU6HPLQDUDVRFLDOFRQWULEXWLRQLQLWLDWLYHWKDWDOVRLQYROYHGWKUHHRWKHUFRPSDQLHVZLWKRSHUDWLRQVLQ.DVKLPDDVZHOODVJuntendo University. The lab featured a presentation titled “Learning About the Colors Around Us,” which covered such topics as the propertiesof color and light, products that leverage these properties, the names given to colors, primary colors and examples of pigment synthesis.
7KHODEDOVRLQFOXGHGDQH[SHULPHQWLQH[WUDFWLQJWKHQDWXUDOEOXHSLJPHQWIURP6SLUXOLQD$WRWDORIVWXGHQWVSDUWLFLSDWHGLQWKHODE7KH
.DVKLPD3ODQWZLOOFRQWLQXHWRWDNHSDUWLQLQLWLDWLYHVGHVLJQHGWRFRPPXQLFDWHWKHMR\RIFKHPLVWU\WRVWXGHQWVDWVFKRROVLQLWVFRPPXQLW\³6XSHU6FLHQFH+LJK6FKRRO´LVDGHVLJQDWLRQDZDUGHGE\-DSDQ¶V0LQLVWU\RI(GXFDWLRQ&XOWXUH6SRUWV6FLHQFHDQG7HFKQRORJ\ 0(;7 WRVHQLRUKLJKVFKRROVWKDWLPSOHPHQWFXUULFXODIRFXVHGRQWKHVFLHQFHV DQGPDWKHPDWLFVWKDWJRHVEH\RQGWKH0 LQLVWU\¶VRI¿FLDOJXLGHOLQHVZLWKWKHDLPRIIRVWHULQJWKHQH[WJHQHUDWLRQRIWDOHQWHGHQJLQHHUVDQGVFLHQWLVWV

Kawamura Memorial DIC Museum of Art
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intrinsically involved in color. The museum’s extensive collection spans numerous genres, encompassing works by Rembrandt; Impressionists
such as Monet and Renoir; modern European artists such as Picasso and Chagall; early modern, modern and postwar Japanese artists; andluminaries of late-20th century American art, including Mark Rothko, Cy Twombly and Frank Stella. In addition to a standing exhibit from its
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literary works and other artifacts that evoke the cultural atmosphere at the time works were created to help visitors better understand thecollection. The museum also offers free-of-charge guided tours every afternoon beginning at 2:00 pm.
$QRWKHUDSSHDOLQJDVSHFWRIWKHPXVHXPLVLWVORFDWLRQRQDOXVKO\IRUHVWHGKHFWDUHVLWHDOLYHZLWKVHDVRQDOÀRZHUVDQGIROLDJHWKDWKDV
EHHQRSHQWRWKHSXEOLFVLQFHWKHPXVHXP¶VHVWDEOLVKPHQW$WRWDORIFKHUU\WUHHV²YDULHWLHVLQWRWDO²EORVVRPHYHU\VSULQJZKLOHLQ
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of Art has established an annex gallery on the museum site that serves as an exhibition space for local amateur artists and is also madeavailable to elementary and junior and senior high schools in the Sakura area for an exhibition of local students’ works. The museum was also
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led by elementary or junior high school teachers.
In the future, the museum will continue to hold exhibitions associated with the collection and promote social contribution activities with anawareness of communication with the local community.

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Museum entrance hallOutdoor terrace

DIC Report 2020141

Harmony with the Community and Social Contributions

Social Contribution Initiatives by Overseas Group Companies
Initiatives at PT. DIC Graphics
Indonesian subsidiary PT. DIC Graphics, which is engaged in the manufacture and sale of printing inks and organic pigments, promotes active social
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students by introducing scholarships, as well as established internships for students of vocational schools in the vicinity of its production facility. The
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the creation of an infrastructure for the maintenance of community health by building public bathhouses equipped with showers and toilet facilities.

Initiatives at DIC India
In India, education is the focus of social contribution initiatives by DIC India Ltd., which
manufactures and sells printing inks. With the aim of helping increase the practical knowledge
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varnish and inks” and “using rheometers to conduct research into the rheological performance of
LQNV´IRUVWXGHQWVRISURPLQHQWHQJLQHHULQJLQVWLWXWHVDQGXQLYHUVLWLHVLQ.ROWDNDDQG,QRGDDIC India’s headquarters

Matching Gift Program

DIC has a matching gift program whereby it matches the total amount collected through an annual year-end
IXQGUDLVLQJGULYHVSHDUKHDGHGE\LWVHPSOR\HHV¶XQLRQ)XQGVUDLVHGWKURXJKWKHGULYHDQGPDWFKLQJJLIWSURJUDPZHUHGRQDWHGWRFKLOGUHQ¶VKRPHVDQGIDFLOLWLHVSURYLGLQJVXSSRUWIRUGLVDEOHGLQGLYLGXDOVContributing to Efforts to Address the COVID-19 Pandemic,QOLJKWRIDFULWLFDOVKRUWDJHRIPDVNVDWKHDOWKFDUHIDFLOLWLHVLQ-DSDQDVDUHVXOWRIWKHUDSLGVSUHDGRI&29,'
LQ-DSDQ',&FRQWULEXWHGKLJKSHUIRUPDQFHPDVNVIURPLWVVWRFNSLOHWRVXFKIDFLOLWLHVFRPSULVLQJ
1PDVNVZKLFKZHUHGRQDWHGWKURXJKWKH.HLGDQUHQ -DSDQ%XVLQHVV)HGHUDWLRQ WRWKH0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUHZKLFKGLVWULEXWHGWKHPDVNVWRSUHIHFWXUHVDQGRVWULFKDQWLERG\PDVNV ZKLFK
were donated to healthcare facilities suffering particularly desperate shortages. DIC also resolved to provide
approximately 7,000 bottles of Linagreen ®([WUDFW.DQXWULWLRQDOGULQNPDQXIDFWXUHGE\D',&*URXSFRPSDQ\WRVXSSRUWWKHKHDOWKRIIURQWOLQHPHGLFDOSURIHVVLRQDOVZRUNLQJWRSUHYHQWWKHVSUHDGRI&29,'and treat patients with the disease. This easy-to-consume drink is made by combining Spirulina extract, which
is derived from the edible blue-green algae using proprietary technology, with propolis, ginseng and echinacea
extract, and fortifying the mixture with water-soluble vitamins. Going forward, DIC will continue to provide support
IRUHIIRUWVWRFRQWDLQ&29,'DVZHOODVLWVUHJXODUVRFLDOFRQWULEXWLRQLQLWLDWLYHVZLWKWKHJRDORIHQVXULQJWKDWDIC remains a company that is loved and respected worldwide.
2VWULFKDQWLERG\PDVNVDUHQRQZRYHQPDVNVWKDWXVHILOWHUVWKDWKDYHEHHQLPSUHJQDWHGZLWKDQWLERGLHVIURPRVWULFKHVZKLFKDUHKLJKO\UHVLVWDQWWRYLUDOLQIHFWLRQVThe ostrich antibodies bind to and neutralize viruses that come into contact with the masks, as a result of which they are significantly more effective than ordinary masks
in protecting wearers against viruses.

DIC Report 2020

142

Linagreen ®([WUDFW.

Communication with Stakeholders

SDGs Goal 17

Promoting Disclosure and Communication

Basic Approach to Disclosure and Communication
The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trustfrom stakeholders, shall timely and appropriately disclose information relating to matters such as the DIC Group’s
management philosophy, management policies, business plans, financial condition and sustainability activities.
Guided by this policy, the DIC Group promotes communication with stakeholders through television advertisements,
participation in exhibitions, websites and events. By communicating effectively with stakeholders, the Group strives to ensure
an adequate understanding of stakeholder expectations and to reflect such expectations in its business activities. The Groupis also expanding its awareness of the concept of stakeholder engagement, a key requirement under ISO 26000.

Ties withshareholders
and investors

Ties withbusiness
partners

Ties with society

Ties with employees

Ties with the media

Build trusting relationships. By
incorporating the demands ofcustomers, seek to develop
products that enhancecustomer satisfaction.

Ensure appropriate
disclosure and build
trusting relationships withshareholders and investors,
encouraging both toevaluate DIC as an attractive
investment.

Promote socially responsible
procurement across the
supply chain and build solid
relationships that will facilitatesustainable procurement.

Operate in harmony withthe community and build
positive relationships withlocal residents that will
underpin the long-termsustainability of operations.

Provide workplaces that are
conducive to job satisfactionand enable all employeesWRIXO¿OOWKHLUSRWHQWLDO2YHU
the long term, achieve true
diversity.

Deepen understanding
through effective publicity,
advertising and othercommunications efforts.

● Websites● Product pamphlets● Digital marketing● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results● DIC Group Sustainable Procurement● DIC Plaza● Press conferences● Interviews with

●Yuka Shoken Hokokusho● Supplier sustainable procurement● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Ties with customers

Basic approach

Communications
tools

announcements(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Timely disclosure● Notice of Convocation of WKH$QQXDO*HQHUDO0HHWLQJ
of Shareholders● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V

Guidelines● DIC Group Green Procurement

Guidelines

questionnaires● Feedback sheets● &RQÀLFW0LQHUDOV5HSRUWLQJ

Template● DIC Report(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film
● News releases● Television
advertisements● Global linkage● Branding questionnaire

journalists● DIC Report● News releases● Television

advertisements● DIC Report● News releases● Television advertisements● Sales activities● Participation in

Opportunities forcommunication

exhibitions● Lectures on the SDGs

for customers● General shareholders’meetings● Results presentations● IR conferences● IR meetings● DIC IR Day● ,QGLYLGXDOLQYHVWRUEULH¿QJV● On-site inquiries

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring● Plant Bon Odori

DIC Report 2020

143

for employees● Presentations on the DIC Group

Code of Business Conduct● Sustainability presentations● DIC Family Day● Plant tours for employee families● Caravan workshops● Newspapers● Economic publications● Industry publications

Communication with Stakeholders| Ties with Customers
With the aim of becoming a unique global company that is trusted by society, the DIC Group prioritizes and works to strengthen communications with its
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year 2019, the Group participated in numerous trade shows in Japan and overseas. In Japan, the Group took part in exhibitions that demonstrated the new
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FRORUDQWVGHYHORSHGIRUXVHLQFRVPHWLFVDQG6$03( 6RFLHW\IRUWKH$GYDQFHPHQWRI0DWHULDODQG3URFHVV(QJLQHHULQJ -DSDQ 6HSWHPEHU ZKHUH
it introduced state-of-the-art resins that help reduce the weight of vehicles. Overseas, the Group took part in Chinaplas 2019, Asia’s leading exhibition for the
SODVWLFVDQGUXEEHULQGXVWULHV 0D\ DQGLQOHDGLQJJOREDOFRDWLQJVLQGXVWU\WUDGHVKRZ&+,1$&2$7 1RYHPEHU ERWKLQWKH35&6XQ&KHPLFDOZKLFKRYHUVHHV',&*URXSRSHUDWLRQVLQ(XURSHDQGWKH$PHULFDVDOVRSDUWLFLSDWHGLQH[KLELWLRQVLQNH\PDUNHWVLQ(XURSHWKH0LGGOH(DVWDQG6RXWK$PHULFDIn November 2019, DIC held a value-creation seminar comprising lectures and a workshop for individuals involved in product planning and product designon the theme of Kansei materials—materials designed to evoke a psychological or emotional reaction—as part of the DIC Colorial Project, an initiative
developed to give form to the DIC Group’s “Color & Comfort” brand slogan. In addition to introducing unique initiatives embodying “Color & Comfort,” theHYHQWSURYLGHGDQRSSRUWXQLW\IRUSDUWLFLSDQWVWRFUHDWHQHZYDOXHE\¿QGLQJFRPPRQJURXQGZLWKSHRSOHLQRWKHULQGXVWULHV',&DOVREHJDQRIIHULQJD
new lecture and workshop event focusing on the Group’s sustainability initiatives and the SDGs for business partners. This new event was in response to arequest for such a seminar from a company that had attended
a presentation on the SDGs.
On another front, DIC continued employing a dedicatedsystem in operation since 2013 to measure the portion of sales
accounted for by repeat customers, using this as a measureof customer satisfaction based on sales data for the last three
years. The Company thus works unceasingly to bolster its
grasp of and improve customer satisfaction.
CITE Japan 2019

CHINACOAT 2019

Digital Marketing
The DIC Group actively promotes digital marketing activities. With the increasing dominance of electronic communications, including email,social media and websites, the focus for communication with customers has rapidly shifted to these media. Accordingly, the DIC Group has
introduced marketing automation designed to more effectively utilize electronic communications channels with the aim of responding swiftly
WRFXVWRPHUUHTXHVWV7RHQVXUHLWVDELOLW\WRDGGUHVVLQTXLULHVLQDWLPHO\PDQQHULQ¿VFDO\HDUWKH*URXSZLOOEHJDQLQWURGXFLQJVDOHVIRUFHDXWRPDWLRQ 6)$ ,QWKHFXUUHQW¿VFDO\HDUWKH*URXSZLOOVLJQL¿FDQWO\H[SDQGWKHVFRSHRIDGRSWLRQLQ-DSDQDQGRYHUVHDVSRVLWLRQLQJit to adapt to the advance of the digital age.

| Ties with Shareholders and Investors
The DIC Group has established a policy for promoting constructive dialogue with shareholders and strives to ensure fair, appropriate and timely
disclosure and to communicate closely with shareholders and investors, as well as to raise awareness of its ESG initiatives. Views and concerns
expressed are shared with management and incorporated into operations as appropriate.
,Q¿VFDO\HDUWKH*URXSVRXJKWWRHQKDQFHFRPPXQLFDWLRQZLWKWKHLQYHVWPHQWFRPPXQLW\LQ-DSDQE\KROGLQJWZRUHVXOWVSUHVHQWDWLRQV
for institutional investors and securities analysts, as well as by participating in investor relations (IR) conferences and small meetings organized
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in the context of the basic strategies of its DIC111 medium-term management plan. Overseas, the Group held IR meetings and took part in IR
conferences organized by securities companies in North America, Europe and Asia to encourage familiarity with its business strategies. Active
efforts to advance communication with overseas investors also included 120 one-on-one meetings conducted in person or by telephone.
7RSURYLGHLQIRUPDWLRQWRLQGLYLGXDOLQYHVWRUV',&SDUWLFLSDWHGLQ¿YHFRPSDQ\SUHVHQWDWLRQVLQ-DSDQZKLFKZHUHDWWHQGHGE\DSSUR[LPDWHO\
400 individuals, to further understanding of the DIC Group’s businesses and ESG initiatives. DIC also participated in a securities company–
sponsored investment fair for individual investors that welcomed a total of 12,000 visitors over two days, giving it the opportunity to deepen
understanding of the Group’s businesses for investors ofdiverse ages and earning an award for best presentation,
which was voted on by visitors. The Group also continued
to actively provide information for individual investors
via the DIC global website and mass media, as well as
through social media. In addition, since fiscal year 2018
WKH*URXSKDVSXEOLVKHGWUDQVFULSWVRILWV¿QDQFLDOUHVXOWV
presentations twice annually.
Investment fair for individual investors

DIC Report 2020

144

Presentation following the announcement of DIC’s acquisition of
BASF’s Colors & Effects businessCommunication with Stakeholders| Ties with Society
In addition to the business community, the DIC Group strives to communicate effectively with ordinary consumers, including students.

Communication in the Field of Education
In July 2019, the Central Research Laboratories sponsored a booth at the 9th Chiba Science School Festival, held at the Tsudanuma campus of the Chiba
Institute of Technology. This is the second consecutive year that the Central Research Laboratories has taken part in this event, which is sponsored by Chiba
6FLHQFH6FKRRO1HWDQGLWKDVGRQHVRZLWKWKHJRDORIVXSSRUWLQJWKHVFLHQWL¿FUHVHDUFKHIIRUWVRIVHQLRUKLJKVFKRROVWXGHQWVDQGHQFRXUDJLQJHOHPHQWDU\and junior high school students to take a greater interest in science. Organized under the theme of “Isolating Natural Colorants,” the DIC booth at the 2019
festival offered students the chance to conduct experiments in the extraction of Spirulina’s natural blue colorant. The response from the 30 participating
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The following month, the DIC Group once again hosted the Chiba Prefectural Dream Challenge Hands-On School, a popular program for elementary
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',&0XVHXPRI$UW7KLVSURJUDPLQYLWHVFKLOGUHQDQGWKHLUSDUHQWVWRFRPSDQ\DQGXQLYHUVLW\UHVHDUFKODEVLQ&KLED3UHIHFWXUHWRFRQGXFWH[SHULPHQWVDQG
tour facilities. Students and family members participating in the 2019 program conducted experiments in the extraction of colorants from Spirulina and paper
chromatography using aqueous felt-tipped pens.
In October 2019, for the second consecutive year the Central Research Laboratories and the.DZDPXUD0HPRULDO',&0XVHXPRI$UWLQYLWHG¿UVW\HDUVWXGHQWVLQ&KLED3UHIHFWXUDO6DNXUD(DVWHigh School’s fashion design program for a program titled “Colors and Chemicals,” which included
lectures and practical training, as well as a museum tour. The Central Research Laboratories’
convention hall hosted the lectures, which focused on the basics of colors and were led by DIC
employees, as well as the practical training, during which participants were asked to collaborate increating a color scheme on the theme of “Tokyo” using the DIC Color Guide ®, an exercise that all
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of Art, during which they listened intently to the explanations given by museum staff that appeared to
Chiba Science School Festival
capture their interest.

Kawamura Memorial DIC Museum of Art)URPODWH0DUFKWKURXJKPLG-XQHWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UWKHOGDQH[KLELWLRQWLWOHG³-RVHSK&RUQHOO&ROODJH 
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works by media artist Katsuhiro Yamaguchi, and “Painting into Sculpture—Embodiment in Form,” an exhibition of sculptures by painters
and the paintings that inspired them. Beginning in June, the museum also exhibited newly acquired works, including Black Curve (1994)
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opening, will continue to welcome guests to enjoy its extensive collection of art, beautiful natural setting and outstanding architecture.

Calendar
DIC’s original calendar for 2020, titled simply “Calendar 2020 Frank Stella,” was honored with a silver award (category 1) in the 71st All Japan
Calendar Competition, sponsored by the Japan Federation of Printing Industries and Fuji Sankei Business-i, a well-known Japanese business
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organizations, as well as publishers and printing companies, among others, in terms of printing technology, planning, design, functionality andcreativity. The Company will continue to plan, design and produce attractive, useful original calendars that appeal to stakeholders.

Corporate Advertising,Q¿VFDO\HDU',&GHFODUHGDQHZEUDQGVORJDQ³&RORU &RPIRUW´DQGODXQFKHGDQDPELWLRXVEUDQGLQJSURJUDP,Q¿VFDO\HDU
the Company produced the fourth installment of its brand advertisement for television, Sekai wo Iro de Kaeteiku (“Changing the world throughcolor”), as well as a series of print and transport advertisements.

Website and Social MediaDIC continues to make use of social media to bolster name recognition in the PRC. The Company also revamped the Chinese-language
version of its corporate website, an undertaking that included introducing a new section titled “Vivid China.” This led to an increase in website
access within the PRC, contributing to record-high use in terms of both sessions and visitors.

DIC Report 2020145

Communication with Stakeholders

Communication with Local Communities
The DIC Group promotes a variety of community-focused initiatives, including deploying the DIC Color Guide ® Event Pack, which originated
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year 2019, such an event was held at a commercial facility in Nagoya. DIC also held an evening bon odori (Bon Festival dance) on the site ofits Tokyo Plant, creating an opportunity to interact with nearby residents. The Group will continue to promote events on its sites, as well as incommunities and at schools, to advance communication with local communities.

| Monetary Contributions and Other Expenditures
The DIC Group conducts its operations while maintaining relationships with a broad range of external industry and other organizations.

Monetary Contributions
The DIC Group’s monetary contributions in fiscal year 2019 amounted to approximately ¥32 million. In Japan, monetary contributions
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corporations. The Group made no monetary contributions to political organizations during this period.

Participation in Industry Organizations
In its capacity as a manufacturer of fine chemicals, the DIC Group participates in a variety of activities as a member of key industry
organizations, including providing specialized information, conducting investigations and collecting materials. In Japan, the Group is amember of organizations ranging from the JCIA, the Keidanren, the Japan Dyestuff and Industrial Chemicals Association (JDICA), the Japan
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global DIC Group amounted to approximately ¥167 million.

| Ties with Employees
The DIC Group promotes a variety of initiatives to facilitate active communication with its employees around the world.

Global Communication
DIC and wholly owned subsidiary Sun Chemical, based in the United States, have established a global communications committee with the
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initiatives to expand global communication. Of note, the Group promoted further awareness of The DIC WAY, which underpins the branding
initiatives of DIC Group employees worldwide, and introduced a method for evaluating brand value designed to accelerate efforts to promote
brand recognition. In addition, DIC revamped the DIC Group corporate website, which can be viewed in Japanese, English and Chinese.

Caravan Sustainability and Branding Workshop
In fiscal year 2019, the Sustainability Department and Corporate Communications
Department collaborated to stage a workshop, designed to encourage awareness of the
DIC Group’s sustainability and branding initiatives, at the Central Research Laboratories;
the Saitama, Kashima, Chiba, Sakai, Komaki and Yokkaichi plants; and the Osaka and
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activities, facilitated an active exchange of views, with participants expressing an
understanding of the importance of sustainability initiatives and a desire for an increased
focus on communications within the DIC Group. Overseas, the departments explained
procedures for implementing this initiative to Group companies with a view to expanding
implementation to include overseas sites in the future.

DIC Report 2020

146

Caravan workshop

Communication with Stakeholders

In-House Newsletter
The DIC Group publishes a quarterly internal newsletter, DIC Plaza, with the aim of enhancing communication with
DIC Group employees around the world and fostering solidarity. DIC Plaza has earned high marks for its content,
which seeks to advance awareness of management policies and showcase DIC Group technologies, products,
businesses, people and corporate culture, as well as for its vibrant design and use of color. The Group’s intranet isanother way for DIC to share information on the activities of employees worldwide, with more than 100 such items
posted annually.

DIC Plaza| Ties with the MediaDIC is reinforcing its publicity activities as a means of communicating with its many
stakeholders, including its customers, shareholders, investors and local communities.
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coverage is vital to securing stakeholders’ understanding of the Group and its operations
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releases regarding new products, capital investments, operating results and sustainability,
among others. By proposing and accepting interviews on key topics such as its efforts toprotect its intellectual property rights, DIC has also succeeded in bringing forward issues ofconcern not only to the Company but also to the chemicals industry as a whole.

Press conferences held
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56

60| External Assessments
In fiscal year 2019, DIC was selected for inclusion in the Dow Jones Sustainability Indices Asia Pacific Index, a leading benchmark for sustainability
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WKH06&,-DSDQ(PSRZHULQJ:RPHQ,QGH[ :,1 ERWKGHYHORSHGE\86EDVHG06&,,QFIRUWKHWKLUGFRQVHFXWLYH\HDUDQGWKH)76(*RRG,QGH[DQG
WKH)76(%ORVVRP-DSDQ,QGH[IRUWKHVHFRQGFRQVHFXWLYH\HDU,QDGGLWLRQ',&ZDVVHOHFWHGIRULQFOXVLRQLQWKH6 3-3;&DUERQ(I¿FLHQW,QGH[ZKLFKZHLJKWVFRQVWLWXHQWVXVLQJGLVFORVXUHRIHQYLURQPHQWDOLQIRUPDWLRQDQGFDUERQHI¿FLHQF\ FDUERQHPLVVLRQVSHUXQLWRIUHYHQXH ZLWKLQDQLQGXVWU\JURXSDIC earned a top-level “1” rating for the latter factor. As a consequence, the Company is now included in all four of the ESG investment indices targeting
Japanese equities used by Japan’s Government Pension Investment Fund (GPIF), which seeks stock indices comprising companies with outstanding ESGSHUIRUPDQFHV 06&,-DSDQ(6*6HOHFW/HDGHUV,QGH[:,1)76(%ORVVRP-DSDQ,QGH[DQG6 3-3;&DUERQ(I¿FLHQW,QGH[ ',&¶V(6*SHUIRUPDQFH
DOVRUHVXOWHGLQLWEHLQJVHOHFWHGIRULQFOXVLRQLQWKH61$06XVWDLQDELOLW\,QGH[LQ¿VFDO\HDUDFRQVWLWXHQWLQGH[WKDWLVUHYLVHGDQQXDOO\DQG
XWLOL]HGE\6RPSR-DSDQ1LSSRQNRD$VVHW0DQDJHPHQW&R/WG 61$0 ¶66XVWDLQDEOH,QYHVWPHQW)XQG',&DOVRUHSRUWVWRWKH&'3DJOREDOQRQSUR¿WRUJDQL]DWLRQWKDWZRUNVRQEHKDOIRILQVWLWXWLRQDOLQYHVWRUVWRFROOHFWDQGDQDO\]HLQIRUPDWLRQRQFRUSRUDWH
initiatives to address climate change and other environmental issues. In fiscal year 2019, DIC earned a score of B, ranking in the CDP program’s
0DQDJHPHQW/HYHO,QUHFRJQLWLRQRILWVVXSHUEHIIRUWVWRH[SDQGFDUHHURSSRUWXQLWLHVIRUZRPHQ',&ZDVVHOHFWHGDVD1DGHVKLNREUDQGIRU¿VFDO\HDUWKHVHFRQGVWUDLJKW\HDULWZDVKRQRUHGXQGHUWKLVSURJUDPZKLFKLVVSRQVRUHGE\0(7,DQGWKH76(With the aim of driving sustainable growth, the DIC Group also participates in a number of UNGC working groups (SRI/ESG, GC Internal Promotion,
6XSSO\&KDLQ+XPDQ5LJKWV'XH'LOLJHQFH'LVDVWHU5LVN5HGXFWLRQ6'*VDQG&UHDWLQJ6KDUHG9DOXH &69 ,Q¿VFDO\HDU',&KRVWHGPHHWLQJVRI
the SRI/ESG and Supply Chain working groups at corporate headquarters in Tokyo.

DIC Report 2020147

Communication with Stakeholders

DIC Report 2020

148

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147 (External Assessments)

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146 (Participation in Industry Organizations)

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57 (Establishing and Operating a Whistle-Blowing System)—

6.2
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23–24 (Color & Display),
25–26 (Functional Products)

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48 (System for Promoting Sustainability Initiatives)

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144 (Ties with Shareholders and Investors)

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6.2

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official corporate governance report

6.2
6.2
6.2

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6.2

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DIC Report 2020

149

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143 (Communication with Stakeholders)

6.2

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Japan: 67.72% of employees belong to a labor union (for eligible employees,
the rate is close to 100%).
Overseas: Employees have collective bargaining rights as allowed for by the laws
and regulations of the country/territory in which they are employed (as of the end of
fiscal year 2018).

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50–51 (Materiality Analysis), 134 (Business Models that Respond to Social Imperatives)• Product stewardship
51 (Materiality Analysis), 64 (ESH), 111 (Quality), 131 (Sustainable Procurement)• Response to climate change• Reduction of environmental impact (emissions into the air and water)
51 (Materiality Analysis), 52–55 (Support for the TCFD), 64 (ESH)• Response to changes in environmental laws and regulations
58 (BCM and Crisis Management)• Promotion of sustainable procurement• Strengthening of partnerships
131 (Sustainable Procurement)• Governance at subsidiaries
56 (Compliance)• Information security
62 (Information Security)• Ability to maximize capital efficiency• Digital transformation• Food security
7 (A Message from the President)• Communication with customers and markets
143 (Communication with Stakeholders)

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6.8
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6.8.7
6.8.9

201-2

)LQDQFLDOLPSOLFDWLRQVDQGRWKHUULVNVDQGRSSRUWXQLWLHVGXHWRFOLPDWHFKDQJH

52–55 (Support for the TCFD)

6.5.5

201-3

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87 of the Yuka Shoken Hokokusho

—

201-4

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202-2

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203-1,QIUDVWUXFWXUHLQYHVWPHQWVDQGVHUYLFHVVXSSRUWHG

139 (Harmony with the Community and Social Contributions)Global corporate website (Home page > Sustainability >Harmony with the Community and Social Contributions)

6.3.9
6.8
6.8.3
6.8.4
6.8.5
6.8.6
6.8.7
6.8.9

203-2

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139 (Harmony with the Community and Social Contributions)Global corporate website (Home page > Sustainability >Harmony with the Community and Social Contributions)

6.3.9
6.6.6
6.6.7
6.7.8
6.8
6.8.5
6.8.6
6.8.7
6.8.9

12 of the Yuka Shoken Hokokusho
—

6.4.4
6.8
6.8
6.8.5
6.8.7

DIC Report 2020

150

GRI 204:

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56–57 (Compliance)

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56 (Compliance), NA

6.6
6.6.3

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56 (Compliance), NA

6.6
6.6.5
6.6.7

GRI 207:

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207-1

Approach to tax

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Sustainability Program > Tax)

207-2

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207-3

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Sustainability Program > Tax)
57 (Taxation compliance)

—

6.6.6
6.8
6.8.5
6.8.7

56–57 (Compliance)

6.6
6.6.3

131 (Sustainable Procurement)

6.6
6.6.3

207-4

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6.5.4

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—

6.5.4

301-3

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—

6.5.3
6.5.4
6.7.5

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6.5.4

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6.5.4

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6.5.5

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—

6.5.4
6.5.5

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98–99 (Managing Water Resources)

6.5.4

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93 (Reducing SOx, NOx and COD)

6.5.4

303-3

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98–99 (Managing Water Resources)

Regarding water withdrawal in water-stressed areas, initial water
risks were assessed at 189 sites using a water risk assessment
tool. Data will now be collected.

6.5.4

303-4

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98–99 (Managing Water Resources)

6.5.4

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98–99 (Managing Water Resources)

6.5.4

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6.5.6

304-2

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6.5.5

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6.5.5

305-4

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6 (Nonfinancial information),
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6.5.5

305-5

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78–91 (Climate Change)

6.5.5

305-6

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86 (Protecting the Ozone Layer)

6.5.3
6.5.5

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92 (Preventing Environmental Pollution),
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6.5.3

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92 (Preventing Environmental Pollution)

306-2:DVWHE\W\SHDQGGLVSRVDOPHWKRG

95–97 (Managing Industrial Waste)

6.5.3

306-3

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74 (Status of Facility Accidents),
95 (Initiatives by the DIC Group in Japan)

6.5.3

306-4

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NA

306-5

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RUUXQRII

100 (Biodiversity)
100 (Biodiversity)

6.5.6
6.5.6

100 (Biodiversity)

98–99 (Managing Water Resources)

6.5.6

6.5.3
6.5.4

6.5.3
98–99 (Managing Water Resources)

DIC Report 2020

151

6.5.3
6.5.4
6.5.6

GRI 307:(QYLURQPHQWDO&RPSOLDQFH

307-1

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308-1

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4.6

131–133 (Sustainable Procurement)

6.3.5
6.6.6
7.3.1

131–133 (Sustainable Procurement)

The number of suppliers and negative impacts identified cannot be
disclosed because of confidentiality concerns.

6.3.5
6.6.6
7.3.1

115 (Basic Personnel Statistics (DIC))

119 (Hiring Diverse Human Resources)

6.4
6.4.3

114–130 (Human Resources Management)

6.4
6.4.3
6.4.4

400

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401-1

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64–69 (ESH),
70–77 (Occupational Safety and Health/Disaster Prevention)

6.4
6.4.6

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6.4
6.4.6

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65 (Introduction of the DECS),
72 (Basic Initiatives Aimed at Preventing Occupational Accidents),
73–74 (Education and Training),
74–77 (Disaster Prevention)

6.4
6.4.6
6.8
6.8.3
6.8.4
6.8.8

403-4

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6.4
6.4.6

403-5

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68 (Our team is responsible for promoting ESH in the PRC.),
73–74 (Education and Training),
76–77 (Emergency Response Drills, Hands-On Safety Training)

6.4
6.4.6

403-6

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129 (Caring for Mental and Physical Health)403-7

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69–77 (Occupational Safety and Health) (All employees are covered by occupational
health and safety management system.)

6.4
6.4.6

403-9

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6.4
6.4.6

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64–77 (ESH),
111–113 (Quality),
114–130 (Human Resources Management)

6.4
6.4.7
6.8.5

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125 (Securing and Fostering Human Resources) (All DIC employees, regardless of gender,
job or rank, receive performance and career development reviews twice annually.)

6.4
6.4.7

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118–119 (Diversity Promotion and Work Style Reform)

405-2

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—

6.3.7
6.3.10
6.4
6.4.3
6.4.4

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—

6.3
6.3.6
6.3.7
6.3.10
6.4.3

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407-1

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124 (Use of the Childcare Leave and Leave to Assist with Parenting Programs)

6.4
6.4.3

A minimum notice period is provided as specified in labor agreements.

6.4
6.4.3
6.4.4
6.4.5

64–65 (ESH),
129–130 (Initiatives to Support Employee Health)

6.4
6.4.6
6.4
6.4.6

71 (Status of Occupational Accidents),
74 (Disaster Prevention)

118 (Building Trust with the DIC Employees’ Union)

129 (Caring for Mental and Physical Health)

6.4
6.4.6

127 (DIC Training Programs)

6.4
6.4.7

45–46 (Directors, Audit & Supervisory Board Members andExecutive Officers),
122 (Reemployment after Retirement and Support for Retirement
Planning),
122 (Advancing the Employment of Individuals with Disabilities),
127–128 (Global Talent Development)

48 (Ensuring DIC Remains a Globally Trusted Corporate Citizen witha Proud Reputation),
131 (Sustainable Procurement)

DIC Report 2020

152

6.3.7
6.3.10
6.4
6.4.3

6.3
6.3.3
6.3.4
6.3.5
6.3.8
6.3.10
6.4.3
6.4.5

GRI 408:&KLOG/DERU

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409-1

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413-1

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413-2

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414-1

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131–133 (Sustainable Procurement)

—

414-2

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DFWLRQVWDNHQ

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disclosed because of confidentiality concerns.

—

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111–112 (Quality)

6.3.9
6.6.6
6.7
6.7.4
6.7.5

113 (Preventing the Recurrence of Quality Problems)

6.3.9
6.6.6
6.7
6.7.4
6.7.5

117 (Principal Human Rights Challenges Facing the DIC Group)

48 (Ensuring DIC Remains a Globally Trusted Corporate Citizen witha Proud Reputation),
131–133 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10117 (Principal Human Rights Challenges Facing the DIC Group)

48 (Ensuring DIC Remains a Globally Trusted Corporate Citizen witha Proud Reputation),
131–133 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10

—

6.3
6.3.5
6.4.3
6.6.6

NA

6.3
6.3.6
6.3.7
6.3.8
6.6.7

114–117 (Human Resources Management)

6.3
6.3.3
6.3.4
6.3.5
114–117 (Human Resources Management)

—

6.3
6.3.5
6.3
6.3.3
6.3.5
6.6.6

143–148 (Communication with Stakeholders)

—

6.3.9
6.6.7
6.8
6.8.5
6.8.7
6.3.9
6.5.3
6.5.6
6.8.9

415-1

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416-1

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417-1

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104 (Ensuring the Safety of Chemical Substances),
112 (Initiatives Aimed at Increasing Customer Satisfaction)

6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9

417-2

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NA

6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9

417-3

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NA

6.7
6.7.3
6.7.6
6.7.9

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NA

6.7
6.7.7

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419-1

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WKHVRFLDODQGHFRQRPLFDUHD

NA

6.6
6.6.3
6.6.7
6.8.7

NA

DIC Report 2020

153

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 2020

154

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 2020

155

Third-Party Opinion Regarding DIC Report 2020

Counselor,
The Japan Research Institute, Limited

Eiichiro Adachi
In his current capacity, Eiichiro Adachi
conducts industry research andassesses corporate per formance fromthe perspective of social responsibility.
A member of the Market Evolution
and Corporations in the 21st Centur yworking group organized by the Keizai
Doyukai (Japan Association of Corporate
Executives), Mr. Adachi was involved in the
preparation of The 15th Corporate White
Paper on “‘Market Evolution’ and CSRManagement: Toward Building Integrity
and Creating Shareholder Value.” From
March 2005 to May 2009, he also served
as a national expert within the Japanesedelegation to the ISO 26000 working group.
In March 2019, he was appointed a national
expert within the Japanese delegationt o t h e I S O / TC 3 2 2 , t h e I nt e r n at i o n a l
Organization for Standardization’s technicalcommittee for sustainable finance. Mr.
Adachi is also known as the author ofseveral books, including Environmental
Management: A Beginners’ Guide, ESG
Handbook for Investors and Businesses
and The Business Person’s Guide to the
SDGs (published in Japanese).

This third-par ty opinion ref lects my viewof the sustainability initiatives and related
d i s c l o s u r e o f D I C a n d i t s c o n s o l i d at e d
subsidiar ies in Japan and over seas, as
understood from reading this report, from myperspective as an individual who provides
corporate information to financial institutions
nec essar y for ESG investment. It is notintended as a comment on whether or not
the information herein has been measured
and calculated accurately to conform with
commonly accepted standards for the
preparation of environmental or other reports
or as a judgment on whether the repor tcovers relevant important matters in full.

Once again this year, I had the honor of reviewing the DIC Report. Reading last year’s
report, I understood that DIC and its consolidated subsidiaries in Japan and overseas
were strongly conscious of the importance of responsiveness to change. The firstthing that caught my eye this year was the explanation of DIC’s focus under DIC111
to transform its business portfolio by focusing on businesses that deliver both social
value and economic value. Accordingly, I think that the Company’s use of a new
proprietary sustainability index, which commenced in 2020, is particularly worth noting.
I was inspired by the president and CEO’s message and particularly by the following
comment: “Going forward, we will continue to capitalize on this index to ensure
we maintain a healthy awareness of the social value created by addressing social
imperatives and in so doing reinforce our long-term management direction.”
Reading through DIC Report 2020, it is clear that the DIC Group has arrived at a newstage in its evolution in which environmental measures, diversity promotion and work
style reform are integrated comprehensively as aspects of management. Overall, I
found the content extremely impressive. That said, there were a few parts in there that
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taken to incorporate the DIC Sustainability Index into management. The framework of
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Group’s responsibility in supplying products and a horizontal axis (social contribution)that assesses risks associated with the raw materials procured and products suppliedby the Group. Looking ahead, the use of business and/or product mapping to theextent possible would enhance persuasiveness.
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DIC’s acquisition of BASF’s Colors & Effects business. Today, consideration for ESGrelated issues is required not only of investors and fund managers but also of companies
contemplating M&A transactions. It is thus important to communicate how DIC evaluatedthis acquisition from an ESG perspective. Insofar as DIC has earmarked ¥250 billion forstrategic investments, I hope that they will create a benchmark for Japanese companies
for the incorporation of ESG considerations into investment decisions.
It is also evident that DIC continues to promote steady efforts to reinforce its
corporate governance organization, the practical guidance regarding the role ofoutside directors published by the Ministry of Economy, Trade and Industry in July
2020 contains the following statement: “For a company to achieve sustainable growthand bolster their corporate value over the medium to long term they must conduct
management with an awareness of ESG, the SDGs and other global trends. It is thus
hoped that a company’s outside directors are able to adopt perspectives that areeasily missed by insiders and to offer opinions that help ensure the company’s ability
to ensure sustainable management.” From this standpoint, improving accountability
will be another challenge. The use and disclosure of a skills matrix is an idea worth
considering.
Third, I am concerned that disclosure in DIC Report 2020 is to a certain degree
unduly weighted toward climate change. Product stewardship, especially the
management of chemical substances and efforts to address such issues as waste
plastic and marine plastics should be given equal attention. For example, the European
Union is currently in the process of formulating what it calls a “chemicals strategy
for sustainability.” I think it is important for DIC to emphasize communication on
this topic. As a manufacturer of fine chemicals, I believe that the most critical task
facing DIC is to outline how it plans to shift away from fossil-based raw materials andtoward biorenewable plant-derived raw materials. In recent years, the concept of aregenerative economy has attracted increasing attention overseas. It is my hope that
DIC continues to expand its disclosure in key areas such as these.

DIC Report 2020156

112 Years of Achievement

DIC Group Milestones

1908
Established as

1957

1925

Enters the market for helmets andother molded plastic products

Begins production of organic pigments
Develops production method for organic pigments
and begins production for its own use, the first step inits evolution as a fine chemicals manufacturer.

Kawamura Ink
Manufactory
Established by Kijuro Kawamura
as Kawamura Ink Manufactory;
adopts the dragon as its
product trademark and begins
manufacturing inks.

1940
Dragon product trademark

Commences production ofwater-based gravure inks

Enters the plastic products business with the aim of becoming an
integrated manufacturer with operations encompassing productionof everything from plastic raw materials to finished products.

1962

Changes Company nameto Dainippon Ink and Chemicals

Amid wartime restrictions on use of volatile oils, develops
water-based gravure inks—one of several achievementsthat would later facilitate expansion into synthetic resins.

Embarks on a new chapter in its history by absorbing
Japan Reichhold Chemicals Inc., and changes Company
name to Dainippon Ink and Chemicals Incorporated (DIC).

1952

Makes full-scale entry into thesynthetic resins business
Establishes Japan Reichhold Chemicals Inc., then thesecond-largest joint venture with an overseas firm in thehistory of the Japanesechemicals industry,
and makes a full-scale
entry into the synthetic
resins business.

DIC’s previous
corporate symbol

1968

Commences sales of the
DIC Color Guide ®

DIC’s founder, Kijuro Kawamura

Launches the DIC Color Guide®, which becomes the defacto standard for color selection in numerous industries,
bolstering recognition of the DIC name.

Reichhold Chemicals’
San Francisco plant

1915

Commences production of offset printing inks
Becomes one of the first companies to conduct
research in the area of offset printing inks and succeeds
in producing a viable product in only one year.

1973

Establishes theEnvironment and Safety
Response Department
Creates department under the directsupervision of DIC’s president to oversee
safety and environmental initiatives(today’s Responsible Care Department);
creates Environment and Safety
Management Regulations and Interim
Emergency Countermeasures Department
and begins promoting decisive efforts,
including the implementation of plantsafety inspections.

Diversiﬁes operations by building onbase in printing inks, organic pigments
and synthetic resins

1990

Opens Kawamura
Memorial Museum of Art
Located in Sakura, Chiba Prefecture,adjacent to the Central ResearchLaboratories; established to exhibit works
of art collected by DIC and DIC Group
companies and now called the
Kawamura Memorial DIC Museum of Art.

Actively introduces technologies
from overseas and promotes
further diversification

1995

Declares intention to uphold theprinciples of Responsible Care

Takes an active role in the Responsible
Care movement since the start as one of
74 founding members of the Japan
Responsible Care Council (JRCC);
reinforces efforts to, among others, reduce
negative environmental impact ofoperations and lower energy consumption.

2006

Becomes signatory to the
Responsible Care Global Charter
Signs the CEO’s Declaration of Support for
the Responsible Care Global Charter,
established by the International Council of
Chemical Associations (ICCA), as befits its
status as a member of the global communityof fine chemicals manufacturers.

Certiﬁcation of DIC as signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

DIC Report 2020

157

1970

1999

Establishes Crown Zellerbach Packaging Materials Japan
Co., Ltd., in a joint venture with Crown Zellerbach
Corporation of the United States and Nippon Kakoh Seishi
Co., Ltd., and enters the multilayered films business.

Establishes presence in India, Central and South America
and elsewhere by acquiring the Coates Group fromTOTALFINA S.A., France’s largest oil company.

Enters the multilayered films business

2008

1973

Enters themarket for LCs
Develops revolutionary
h i g h - p e r f o r m a n c e,
long-lasting nematicLCs, commencing its
evolution into one of
the world’s foremost
manufacturers of LCs.

Acquires Coates, the printing inks
division of France’s TOTALFINA

Changes Company nameto DIC Corporation
Marks centennial anniversary by changing Company name to
DIC Corporation and adopting a new corporate symbol.

Acquires the graphic arts materials division of
Sun Chemical Corporation of the United States
Becomes world’s largest
manufacturer of printing
inks in terms of market
share and a leading namein the graphic arts materials
business.

DIC’s new corporate symbol

In May 2015, completes thereconstruction of its corporate
headquarters—the DIC
Building—in Nihonbashi,Tokyo, the role of which was
expanded to include oversightof the global DIC Group.

DIC Building

2016

Introduces branding program

Brand advertisement for television

2009

2017

In October 2009, establishes a joint venture with Dai Nippon Printing
Co., Ltd., subsidiary The Inctec Inc. and integrates its domestic
printing inks business with the printing inks business of The Inctec.

Concludes capital and business alliance with Taiyo Holdings Co., Ltd., one of
the world’s leading manufacturers of solder resist for printed wiring boards.

Establishes DIC Graphics Corporation

Sun Chemical’s headquarters

Completes
reconstructionof corporate
headquarters
in Nihonbashi

Introduces new branding
program based on theGroup’s “Color & Comfort”
brand slogan, which sets
f o r t h t h r e e c o r p o ra t evalues, and in Octobera i r s a new television
advertisement.

Nematic LCs

1986

2015

Enters capital and business alliancewith Taiyo Holdings

1999

2010

2019

Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

Develops the G58 series of green pigments for use in color filters forliquid crystal displays (LCDs), which deliver marked increases inbrightness and contrast compared with previous products andcontribute substantially to reduced energy consumption by LCDs.

Clarifies strategies for transforming the DIC Group’s businessportfolio, that is, for building a sophisticated portfolio focused on
ESH-related issues and social changes by advancing qualitativereforms in existing core businesses and creating new businesses
with the potential to become mainstays.

Succeeds in developing 100% soybean
oil–based printing ink

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters

Launches DIC111 medium-term
management plan

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2007

2010

2014

Begins promoting CSR initiatives;
identifies fulfilling its responsibilities as amember of society through its businessactivities and contributing to the evolutionof society as the cornerstones of CSR.

In December 2010, becomes a participant in
the United Nations Global Compact (UNGC),
with the aim of maintaining its reputation asa socially responsible corporate entity.

Clarifies its overall policy of achieving sustainability
in a manner that takes into account, among others,
the environment, ecosystems and socioeconomic
issues, and changes the designation used across its
program from “CSR” to “sustainability.”

Joins United Nations
Global Compact

2015

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Launches CSR program

DIC Report 2020

158

Selected for inclusion in the
Dow Jones Sustainability
Indices Asia Pacific Index
Included for the first time in the DJSI
Asia Pacific Index, a global family of
indices for socially responsible investing
and a benchmark of global sustainability.
As of 2019, has been included in theindex for five consecutive years.

DIC Report 2020
Financial Section

Year ended December 31, 2019

O ne of the world’s leading diversified chemicals companies, DIC Corporation is also the core of the DIC Group, a multinationalorganization with operations in more than 60 countries and territories worldwide. Established in 1908 as a manufacturer of printing
inks, DIC has capitalized on its extensive technologies, know-how and experience in the years since to build a broad business portfolioof materials and finished products, enabling it to provide innovative solutions to customers in diverse industries and transforming it
into a global powerhouse in its key fields of endeavor.
Now in its second century in business, DIC is redoubling its efforts to develop and market innovative, high-performance productsthat respond to the needs of customers in markets around the world, in line with its “Color & Comfort by Chemistry” vision.
A responsible corporate citizen, DIC is also committed to helping realize environmental and social sustainability.

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

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

Values• CoreEnterprising
Lead with a passion for excellence that is evident in the solution-focused actions
taken each day to drive value through innovation.
Integrity
Be honest, forthright and ethical in all dealings with customers, suppliers, andcoworkers.
Dedication & Loyalty
Take responsibility for one’s performance in the office, laboratory, and plant, bydemonstrating commitment to customers, suppliers, and coworkers.
Diversity
Respect other viewpoints and work collaboratively while valuing collective goals
over personal interests to achieve excellence; foster communication and cooperation with people from all backgrounds.
Social Responsibility
Go beyond compliance to promote products and activities that achieve socially
responsible and sustainable development that protects the environment.

Contents

Consolidated Five-Year Summary 1
Management’s Discussion and Analysis 2
Consolidated Balance Sheet 4
Consolidated Statement of Income 6
Consolidated Statement of Comprehensive Income 7
Consolidated Statement of Changes in Net Assets 8
Consolidated Statement of Cash Flows 9
Notes to the Consolidated Financial Statements 10
Management’s Report on Internal Control 43
Independent Auditor’s Report 44
Investor Information and Corporate Data 46

MissionVisionCore Values

1Consolidated Five-Year Summary
DIC Corporation and Consolidated Subsidiaries
Years ended December 31, 2019 to 2015

Thousands of
U.S. dollars,
except for per
share information(Note 7)
Dec. 2019

Dec. 2019

Dec. 2018

Millions of yen,
except for per share information
Dec. 2017
Dec. 2016
Dec. 2015

Net sales
Percent increase (decrease)
Operating income
Net income attributable to owners of
the parent¥768,568(4.6)%
41,332¥805,498
2.0%
48,385¥789,427
5.1%
56,483¥751,438(8.4)%
54,182¥819,999(1.2)%
51,068$7,051,083(4.6)%
379,193

23,50032,02838,60334,76737,394

215,596

Equity (Note 3)
Total assets (Note 8)

312,740
803,083

298,896
801,296

315,129
831,756

278,535
764,828

262,467
778,857

2,869,174
7,367,734¥3,304.34
248.29¥3,158.05
338.40¥3,329.60
407.56¥2,938.12
366.72¥2,768.41
389.40$30.322.28

100.00125.00120.00

64.00

8.00

0.92

36.4%
12.9%

33.7%
14.6%

38.9%
7.7%

Equity per share (Notes 1, 4 and 6)
Earnings per share (basic) (Notes 2, 4 and 6)
Cash dividends per share applicable tothe period (Note 5)

38.9%
7.7%

Equity ratio to total assets (Note 8)
ROE (return on equity)

37.3%
10.4%

20,513

Number of employees

37.9%
13.0%

20,62020,62820,481

20,513

20,264

Notes: 1. The computation of equity per share has been based on the number of shares issued as of the balance sheet date.
2. The computation of earnings per share has been based on the weighted-average number of shares issued during each fiscal year.
3. Equity comprises “Total shareholders’ equity” and “Total accumulated other comprehensive income.”
4. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Earnings per share (basic)
and equity per share are calculated respectively based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended
December 31, 2015.
5. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Cash dividends per share
applicable to the period for the fiscal year ended December 31, 2016, comprises interim dividends of ¥4.00 (before the consolidation) and year-end dividends of¥60.00 (after the consolidation). If the consolidation had been taken into consideration, cash dividends per share applicable to the period for the fiscal year ended
December 31, 2016, would be ¥100.00.
6. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets
as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity pershare includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the
fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.
7. Yen amounts have been translated, for readers’ convenience only, at the rate of ¥109 to US$1, the approximate rate of exchange at December 31, 2019.
8. The Company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No.
28, issued on February 16, 2018), etc., since the beginning of the fiscal year ended December 31, 2019. The figures as of December 31, 2018, are based on retrospective application.
Operating Income

Net Sales

ROE(Billions of yen)(Billions of yen)
1,000.0

(%)

75.0

820.0
800.0

789.4 805.5 768.6
751.4

60.0

20.0

51.1

54.2

56.5

16.0

14.6
12.9

48.4
41.3

600.0

45.0

400.0

30.0

8.0

200.0

15.0

4.0

13.0
10.4

12.0

7.7

0.0

Dec.
2015

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

Net Income Attributable to Owners of the Parent(Billions of yen)

37.4

38.6
34.8

Dec.
2015

Dec.
2016

Dec.
2015

Dec.
2016

60

40.3

40

40

0

Dec.
2015

Dec.
2016

Dec.
2019

40

60

30

Dec.
2018

65

40

10.0

Dec.
2019

50.0

36.9

40.0

90

Dec.
2018

(%)

End of 2nd quarter
Year-end

60

Dec.
2017

Dec.
2017

Dividend Payout Ratio

(Yen)

20.0

Dec.
2016

0.0

Dec.
2019

32.0
23.5

Dec.
2015

Dec.
2018

120

30.0

0.0

Dec.
2017

Cash Dividends per Share
150

50.0

40.0

0.0

27.3

30.0

29.4

20.5
20.0

60

60

60

Dec.
2017

Dec.
2018

Dec.
2019

* These figures have been adjusted to account for the impactof a consolidation of shares of common stock by a factor of
10 to 1 with July 1, 2016, as the effective date.

10.0

0.0

Dec.
2015

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

2

Management’s Discussion and Analysis

This document presents the consolidated results for fiscal year 2019, comprising the accounts for the year ended
December 31, 2019, of DIC and its domestic and overseas subsidiaries.

Overview ofOperatingResults

In fiscal year 2019, consolidated net sales slipped 4.6%, to ¥768.6 billion. On a local currency basis, however,the decrease was only 1.3%. Owing to the impact of slowing global economic growth, shipments sank in a wide
range of businesses, centering on materials used in electrical and electronics equipment and in automobiles.
Operating income was down 14.6%, to ¥41.3 billion, or 8.7% on a local currency basis. In addition to falling shipments, particularly of high-value-added products, these results reflected flagging sales prices for someproducts. A decline in results overseas after translation, a consequence of yen appreciation, also pushed operating income down. Thanks to the impact of raw materials price decreases and of cost reductions achieved
through rationalization, the decline narrowed after bottoming out in the first quarter. Of particular note, operating income in the People’s Republic of China (PRC) and Southeast Asia turned positive in the second quarter. Ordinary income was down 15.2%, to ¥41.3 billion. Net income attributable to owners of the parent fell
26.6%, to ¥23.5 billion. This reflected an extraordinary loss arising from efforts to improve business efficiency,
as well as one-time disaster- and acquisition-related expenses. Earnings before interest, taxes, depreciation andamortization (EBITDA) declined 17.2%, to ¥67.4 billion. Factors behind this included the drop in net income
attributable to owners of the parent.

Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent
EBITDA*FY2019Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)¥768.6
41.3
41.3
23.5
67.4

¥805.5
48.4
48.7
32.0
81.4

(4.6)%(14.6)(15.2)(26.6)(17.2)(1.3)%(8.7)———* EBITDA = Net income attributable to owners of the parent + Total income taxes + (Interest expenses – Interest income) + Depreciation
and amortization

Average exchange rate (¥/US$)
Average exchange rate (¥/EUR)

Segment
Results

FY2019Yen
FY2018¥109.11122.13¥110.46130.46

Packaging & Graphic
Segment sales slipped 4.2%, to ¥416.4 billion. Although sales edged up 0.6% on a local currency basis, the depreciation of the euro and emerging economy currencies led to a decrease after translation into yen. In the areaof materials for food packaging, sales of packaging inks rose, particularly in emerging economies in Asia andSouth America. In contrast, sales of polystyrene languished, despite an increase in shipments, as raw materials
price decreases prompted the reduction of sales prices. Sales of publication inks, which center on publishinginks and news inks, were down, owing to an ebb in overall demand. Sales of jet inks for digital printing rose.
Segment operating income slipped 3.6%, to ¥19.2 billion. On a local currency basis, operating income rose
8.0%, benefiting from the positive impact of an improved product mix and rationalization efforts, as well asfrom a decrease in raw materials prices, particularly in the PRC and Southeast Asia. As with segment sales,
however, this translated into a decline on a yen basis.

Net sales
Operating income

Billions of yen
FY2019Change (%)

Change calculated inlocal currency (%)¥416.419.2(4.2)%
(3.6)

0.6%
8.0

3

Management’s Discussion and Analysis

Color & Display
Segment sales, at ¥116.4 billion, were down 6.2%. In the area of color materials, shipments of pigments forcosmetics and general-purpose pigments flagged, hampered by trade friction. In display materials, shipmentsof pigments for color filters were firm, although sales of thin-film transistor liquid crystals (TFT LCs) sank, hindered by sagging sales prices, a consequence of intensifying competition.
Segment operating income plunged 28.0%, to ¥10.8 billion. Contributing factors included sales price reductions for TFT LCs and waning shipments of general-purpose pigments. Operating income was also constrainedby the tightening of environmental regulations in the PRC, as well as by increases in prices for pigments raw
materials attributable to trade friction.

Net sales
Operating income

Billions of yen
FY2019Change (%)

Change calculated inlocal currency (%)¥116.4
10.8(6.2)%(28.0)(3.8)%(25.4)

Functional Products
Segment sales decreased 4.8%, to ¥268.6 billion. While applications for polyphenylene sulfide (PPS) compounds
continue to expand thanks to the trend toward lighter and increasingly electrified vehicles, shipments remained
low, reflecting a downtrend in automobile production worldwide. Flagging economic conditions pushed down
sales of epoxy resins and industrial tapes, the principal applications for which are smartphones and semiconductors. Sales of synthetic resins remained sluggish overall, despite bottoming out in the first quarter.
Segment operating income was down 7.6%, to ¥19.2 billion. Despite this decrease, which stemmed fromdwindling shipments overall, the operating margin improved gradually, as shipments of epoxy resins and otherhigh-value-added products picked up after bottoming out in the first quarter and raw materials prices decreased.

Net sales
Operating income

Analysis ofCash Flows

Billions of yen
FY2019Change (%)

Change calculated inlocal currency (%)¥268.619.2(4.8)%(7.6)(3.6)%(6.6)

Cash and cash equivalents as of December 31, 2019, totaled ¥16.7 billion, a decrease of ¥1.9 billion from
December 31, 2018.
Operating Activities
Net cash provided by operating activities amounted to ¥50.6 billion, compared with ¥51.0 billion provided bysuch activities in fiscal year 2018. Income before income taxes and non-controlling interests was ¥34.7 billion,
while the adjustment for depreciation and amortization was ¥33.1 billion. Income taxes paid totaled ¥7.1 billion, while working capital increased ¥8.2 billion.
Investing Activities
Net cash used in investing activities came to ¥24.9 billion, down from ¥38.4 billion used in such activities in
the previous fiscal year. A net total of ¥1.3 billion was applied to the purchase of shares and investments incapital of subsidiaries resulting in change in scope of consolidation, while proceeds from shares and investments in capital of subsidiaries resulting in change in scope of consolidation amounted to ¥900 million.
Financing Activities
Net cash used in financing activities amounted to ¥26.8 billion, up from ¥11.8 billion used in such activities infiscal year 2018. A net total of ¥12.6 billion was applied to the repayment of interest-bearing debt, while cash
dividends paid came to ¥11.8 billion.

4

Consolidated Balance SheetDIC Corporation and Consolidated Subsidiaries
December 31, 2019

Assets

2019

Millions of yen
2018

Cash and deposits (Notes 7, 12 and 20)¥ 16,786¥ 19,782

Notes and accounts receivable—trade (Notes 12, 20 and 21)

211,232

209,763

Merchandise and finished goods (Note 12)91,555

94,611Work in process (Note 12)

9,566

9,403

Raw materials and supplies (Note 12)58,61061,937

Other (Note 20)

21,60723,878

Allowance for doubtful accounts(9,437)(9,722)

Total current assets (Note 5)

399,919

409,652

Buildings and structures

88,54088,892

Machinery, equipment and vehicles

70,86770,951Tools, furniture and fixtures

11,191

11,395

Land

51,961

48,985Construction in progress

9,616

7,928

232,176

228,151

Current assets:

Non-current assets:
Property, plant and equipment (Notes 10, 11 and 12):

Total property, plant and equipment

Intangible assets:
Goodwill

762

34

Software

2,585

2,887

Customer-related assets

2,674

3,359

Other

5,782

7,502

11,804

13,782

Investment securities (Notes 8, 9 and 20)

59,31367,523

Deferred tax assets (Notes 5 and 17)

33,19233,313Net defined benefit asset (Note 13)

44,33925,089Other (Notes 8 and 20)

23,02023,947

(680)

(161)

Total investments and other assets (Note 5)

159,184

149,711

Total non-current assets (Note 5)403,164

391,644

Total assets (Note 5)¥803,083¥801,296

Total intangible assets

Investments and other assets:

Allowance for doubtful accounts

See notes to the consolidated financial statements.

5

Consolidated Balance Sheet

Liabilities andNet Assets

2019

Millions of yen
2018¥108,562¥118,554

Short-term loans payable (Notes 12 and 20)

20,13929,986

Current portion of long-term loans payable (Notes 12, 20 and 21)

23,456

49,792

Lease obligations (Notes 12 and 20)

1,244

667

Income taxes payable (Notes 17 and 20)

2,556

2,843

Provision for bonuses

5,724

6,283

Other (Note 20)

48,44547,476210,126

255,601

Bonds payable (Notes 12 and 20)

80,00060,000Long-term loans payable (Notes 12, 20 and 21)

122,602

119,791

Lease obligations (Notes 12 and 20)

5,191

4,229

Deferred tax liabilities (Notes 5 and 17)

8,768

2,807

Net defined benefit liability (Note 13)

21,377

20,519Asset retirement obligations

1,696

1,482

Current liabilities:
Notes and accounts payable—trade (Notes 20 and 21)

Total current liabilities (Note 5)
Non-current liabilities:

9,826

9,533

Total non-current liabilities (Note 5)

249,459

218,361

Total liabilities (Note 5)

459,585473,962

Capital stock (Note 15)

96,55796,557

Capital surplus

94,456

94,445Retained earnings

218,209

207,421

Treasury shares (Note 16)(1,823)(1,823)

Total shareholders’ equity

407,398

396,600

1,676

1,407

683

14

Foreign currency translation adjustment(72,671)(67,617)

Remeasurements of defined benefit plans (Note 13)(24,346)(31,508)

Total accumulated other comprehensive income(94,658)(97,704)

Non-controlling interests

30,75728,438Other

Net assets:
Shareholders’ equity (Notes 14 and 24):

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total net assets

343,497

327,334

Total liabilities and net assets (Note 5)¥803,083¥801,296

6

Consolidated Statement of Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 20192019

Millions of yen
2018

Net sales
Cost of sales
Gross profit¥768,568
603,199
165,369¥805,498
629,850
175,648

Selling, general and administrative expenses (Note 18)
Operating income

124,037
41,332

127,263
48,385Non-operating income:Interest income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income

2,420
414
2,475
1,692
7,001

3,781
425
3,845
1,631
9,682

Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

3,724
811
2,496
7,031

5,114
828
3,423
9,365

Ordinary income

41,302

48,702Extraordinary income:Gain on sales of subsidiaries and affiliates securities
Insurance income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income

1,624
1,409
1,401
—
4,435

679
237
431
3,270
4,617

Extraordinary loss:
Impairment loss (Note 11)
Loss on disposal of non-current assets
Acquisition-related expenses
Loss on disaster
Severance costs
Provision of allowance for doubtful accounts
Amortization of past service costs
Loss on sales of subsidiaries’ and affiliates’ securities
Total extraordinary loss

3,078
2,399
1,914
1,520
840
551
443
316
11,061

—
2,535
—
409
1,539
—
—
—
4,483

34,676

48,836

7,869
1,461
9,330

11,015
4,019
15,03425,346
1,846¥ 23,500

33,802
1,774¥ 32,028

Income before income taxes and non-controlling interests
Income taxes (Note 17):
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Earnings per share (Note 2):
Basic
DilutedWeighted-average number of shares issued during the period,
excluding treasury shares (in thousands)
Cash dividends per share applicable to the period (Note 2)
See notes to the consolidated financial statements.

¥ 248.29—¥ 338.40—

94,646

94,647¥ 100.00¥ 125.00

7

Consolidated Statement of Comprehensive Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 20192019

Millions of yen
2018¥25,346¥ 33,802

Valuation difference on available-for-sale securities

327(6,502)

Deferred gains or losses on hedges

669

17

Foreign currency translation adjustment(4,394)(20,203)

Remeasurements of defined benefit plans, net of tax (Note 13)

7,269(9,413)

Share of other comprehensive income of associates accounted for using
equity method(744)(1,545)¥ 3,127¥(37,646)¥28,473¥ (3,844)

Comprehensive income attributable to owners of the parent¥26,546¥ (4,863)

Comprehensive income attributable to non-controlling interests

1,927

1,019

Net income
Other comprehensive income:

Total other comprehensive income (Note 23)
Comprehensive income
Comprehensive income attributable to:

See notes to the consolidated financial statements.

8

Consolidated Statement of Changes in Net Assets
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2019

Millions of yen
Shareholders’ equity

Balance at January 1, 2018
Dividends from surplus,¥120.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,642 shares
Disposal of treasury shares—
3,900 shares
Net changes of items other thanshareholders’ equity (Notes 9 and 14)
Balance at December 31, 2018
Cumulative effects of changes inaccounting policies (Note 3)
Restated balance
Dividends from surplus,¥125.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,187 shares
Disposal of treasury shares—
1,600 shares
Change in scope of consolidation
Change in ownership interest of
the parent due to transactions
with non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 9 and 14)
Balance at December 31, 2019

Issuednumber ofcommon stock(thousands)

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity95,157¥96,557¥94,445¥186,768¥(1,828)¥375,942

95,157(11,375)(11,375)

32,02832,028
(10)

(10)

15

15

96,557

94,445

207,421(1,823)396,600—
96,557—
94,445(774)
206,647—(1,823)(774)
395,826(11,849)(11,849)

23,50023,500

(90)

(7)

(7)

6

6
(90)

11
95,157¥96,557¥94,456

11¥218,209¥(1,823)¥407,398
Millions of yen

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedges¥ 7,874¥ (3)Balance at January 1, 2018
Dividends from surplus,¥120.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,642 shares
Disposal of treasury shares—
3,900 shares
Net changes of items other thanshareholders’ equity (Notes 9 and 14)
Balance at December 31, 2018
Cumulative effects of changes inaccounting policies (Note 3)
Restated balance
Dividends from surplus,¥125.00 per share (Note 14)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,187 shares
Disposal of treasury shares—
1,600 shares
Change in scope of consolidation
Change in ownership interest of
the parent due to transactions
with non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 9 and 14)
Balance at December 31, 2019
See notes to the consolidated financial statements.

Foreigncurrency Remeasurements
translationof definedadjustment
benefit plans¥(46,462)¥(22,222)

Total
accumulated
othercomprehensive
incomeNon-controllinginterests

Total
net assets¥(60,813)¥28,822¥343,951(11,375)
32,028(10)
15(6,467)
1,407

17
14

(21,155)(67,617)(9,286)(31,508)(36,891)(97,704)(384)
28,438(37,275)
327,334

—
1,407

—
14

—
(67,617)—(31,508)—(97,704)—
28,438(774)
326,560(11,849)
23,500
(7)
6
(90)
11

269
¥ 1,676

670¥683(5,055)¥(72,671)

7,161¥(24,346)

3,046¥(94,658)

2,320¥30,757

5,365¥343,497

9Consolidated Statement of Cash FlowsDIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2019

Net cash provided by (used in) operating activities:
Income before income taxes and non-controlling interests
Adjustments for:
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income
Equity in (earnings) losses of affiliates
Interest expenses
Loss (gain) on sales and retirement of non-current assets
Impairment loss
Loss (gain) on sales of subsidiaries and affiliates securities
Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares and investments in capital of subsidiaries resulting inchange in scope of consolidation
Proceeds from purchase of shares and investments in capital of subsidiaries
resulting in change in scope of consolidation
Proceeds from sales of shares and investments in capital of subsidiaries
resulting in change in scope of consolidation
Purchase of subsidiaries and affiliates securities
Proceeds from sales of subsidiaries and affiliates securities
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Purchase of shares and investments in capital of subsidiaries that does not resultin change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period (Note 7)
Cash and cash equivalents at end of the period (Note 7)
See notes to the consolidated financial statements.

2019

Millions of yen
2018¥ 34,676¥ 48,836

33,12799
559(561)(2,834)(2,475)
3,724
997
3,078
(1,308)—(3,054)4,614(9,802)(3,543)57,298
4,335(3,865)(7,132)
50,63732,825
156
(263)
(782)
(4,206)(3,845)
5,114
2,104
—
(679)
(3,270)
6,897(14,516)
3,966(9,524)62,813
6,307(5,050)(13,080)
50,990(3,685)4,740(34,042)
1,613
(919)

(3,832)
2,893(31,343)
1,336
(741)

(1,558)(11,524)

235

—

900
—
9,508
(350)
134
(96)
(1,363)(24,884)

679
(157)
671
(509)
4,150
(690)
679
(38,388)(9,383)40,250(63,513)
20,000(11,849)(767)(1)(29,689)
60,627(39,204)
10,000(11,375)(1,348)5(186)(1,351)(26,799)(895)(1,941)
18,631¥ 16,690

(62)
(735)
(11,781)159
980
17,651¥ 18,631

10

Notes to the Consolidated Financial Statements
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2019

Note 1:
Basis ofPresenting
Financial
Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions
set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of the International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which DIC Corporation (the “Company”) is incorporated.

Note 2:
Summary of
Significant
Accounting
Policies

Consolidated financial statements
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated and those companies over which the Company has theability to exercise significant influence are accounted for by the equity method.
The consolidated financial statements include the accounts of the Company and its significant subsidiaries:
Sun Chemical Group Coöperatief U.A., DIC (China) Co., Ltd., DIC Asia Pacific Pte Ltd, SEIKO PMC CORPORATION, DIC INVESTMENTS JAPAN, LLC., DIC Graphics Corporation and 145 other companies in the fiscal year
ended December 31, 2019 (141 other companies in the fiscal year ended December 31, 2018). All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Company and its consolidated subsidiaries (the“Group”) is eliminated.
Investments in 22 affiliates in the fiscal year ended December 31, 2019 (26 in the fiscal year ended December 31, 2018), are accounted for by the equity method.
Accounting period of consolidated subsidiaries
The closing date of the consolidated subsidiaries is the same as the consolidated closing date.
Cash and cash equivalents
Cash and cash equivalents consist primarily of cash on hand, certificates of deposit and short-term investmentswith original maturities of three months or less that are readily convertible to known amounts of cash andhave insignificant risk of changes in value.
Investment securities
Investment securities are classified and accounted for, depending on management’s intent, into available-forsale securities. Available-for-sale securities are carried at fair value as of the balance sheet date, with unrealized
gain and loss, net of applicable taxes, reported in a separate component of net assets. Available-for-sale securities whose fair values are not readily available are carried at cost. The cost of securities sold is calculated by themoving-average method.
Allowance for doubtful accounts
Allowance for doubtful accounts of the Company and its domestic consolidated subsidiaries is provided mainly
based on historical experience for normal receivables and on an estimate of collectability of receivables fromcompanies in financial difficulty.
Allowance for doubtful accounts of foreign consolidated subsidiaries is provided mainly based on an estimate of collectability of receivables.
Inventories
Inventories are principally stated at cost, cost being determined by the first-in, first-out (FIFO) method, which
evaluates the amount of the inventories shown in the balance sheet by writing them down based on their decrease in profitability.
Property, plant and equipment (excluding leased assets)
Property, plant and equipment are carried at cost. Significant renewals and additions are capitalized; maintenance and repairs, and minor renewals and improvements, are charged to income as incurred.
Depreciation of buildings (other than facilities attached to buildings) of the Company and its domestic consolidated subsidiaries is calculated principally by the straight-line method. Besides, depreciation of facilities

11

Notes to the Consolidated Financial Statements

attached to buildings and structures acquired on or after April 1, 2016, is also calculated by the straight-line
method. Other property, plant and equipment are calculated by the declining-balance method.
Depreciation of property, plant and equipment of foreign consolidated subsidiaries is calculated principally by
the straight-line method. The range of useful lives is principally from 8 to 50 years for buildings and structuresand from 3 to 11 years for machinery, equipment and vehicles.
Intangible assets (excluding leased assets)
Intangible assets are carried at cost less accumulated amortization, and are amortized by the straight-line
method. Goodwill is amortized by the straight-line method over a reasonable period not exceeding 20 years.
Leased assets
For the Company and its domestic consolidated subsidiaries, leased assets related to finance leases that do nottransfer ownership of the leased property to the lessee are depreciated on a straight-line basis, with the lease
periods used as their useful lives and no residual value.
Foreign consolidated subsidiaries account for lease transactions in accordance with either the accounting
principles generally accepted in the United States of America (“U.S. GAAP”) or IFRS.
Retirement and pension plans
Net defined benefit assets/liabilities are recognized for employees’ and executive officers’ retirement benefits.
Pension assets are deducted from retirement benefit obligations and the net amount is recognized based on
the estimated amount of payment as of the balance sheet date. In calculating retirement benefit obligations,the Company applies a method of attributing expected retirement benefits to each period on a benefit formulabasis. The Company and its domestic consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by the straight-line method over stated years that do not exceed the average remaining
service period of the eligible employees (14 to 16 years). Past service costs are amortized in the accounting periods when they accrue.
Foreign consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by thestraight-line method over stated years that do not exceed the average remaining service period of the eligible
employees (8 to 28 years). Past service costs are amortized over 1 to 28 years.
Unrecognized actuarial gains and losses and unrecognized past service costs are recorded in “Remeasurements of defined benefit plans” in net assets after adjusting income tax effect.
Asset retirement obligations
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future
asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate canbe made. If a reasonable estimate of the asset retirement obligation cannot be made in the period in which
the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of theasset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period.
Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows arereflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of therelated asset retirement cost.
Income taxes
The provision for income taxes is computed based on the pretax income (loss) included in the consolidated
statement of income.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferredtaxes are measured by applying currently enacted tax laws to the temporary differences.
Research and development costs
Research and development costs are charged to income as incurred.

12

Notes to the Consolidated Financial Statements

Basis of translation of financial statements of foreign consolidated subsidiaries
The financial statements of foreign consolidated subsidiaries included in the consolidated financial statements
are translated into Japanese yen based on the following procedures:(1) Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen at the exchange
rates as of the balance sheet date.
(2) Income and expenses are translated into Japanese yen at the average rate during the year.
The differences of translation are included in foreign currency translation adjustment and non-controlling interests, which are presented as separate components of net assets.
Translation of foreign currency account
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates as of the balance sheet date and any difference arising from the translation is recognized in the consolidated statement of income if hedge accounting is not applied.
Derivatives and hedging activities
To hedge risks associated with the fluctuations of exchange rates, interest rates and commodity prices, theGroup uses foreign currency forward contracts, currency swaps, interest rate swaps and commodity swaps.
To hedge a part of the risks associated with the fluctuations of exchange rates for investments in foreign entities, the Company uses loans denominated in foreign currencies. The Group does not enter into derivatives for
trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:
1) all derivatives are recognized as either assets or liabilities and measured at fair value, with gains or losses
recognized in the consolidated statement of income and 2) for derivatives used for hedging purposes,
if derivatives qualify for hedge accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
Receivables and payables denominated in foreign currencies are translated at the contracted rates if theforward contracts qualify for hedge accounting. Gains and losses related to qualifying hedges of firm commitments or anticipated transactions are deferred and recognized in income when the hedged transaction occurs.
If interest rate swaps qualify for hedge accounting and meet certain specific matching criteria, they will not bemeasured at market value, rather the differential paid or received under the swaps will be recognized in interest expenses or interest income.
Per share information
Earnings per share (basic) is computed by dividing net income attributable to owners of the parent available tocommon shareholders by the weighted-average number of shares issued for the period.
Earnings per share (diluted) reflects the potential dilution that could occur if securities were exercised or converted into common stock. Earnings per share (diluted) assumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends
applicable to the respective years, including dividends to be paid after the end of the year.
From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The
shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity per shareincludes the number of shares held by the trust. The number of treasury shares excluded from the weightedaverage number of shares issued during the fiscal year used for the calculation of earnings per share includes
the number of shares held by the trust.
The number of treasury shares held by the trust excluded from the calculation of equity per share as of December 31, 2019 and 2018, is 146,200 shares and 147,800 shares, respectively. The number of treasury shares
held by the trust excluded from the calculation of earnings per share as of December 31, 2019 and 2018, is146,323 shares and 148,377 shares, respectively.

13

Notes to the Consolidated Financial Statements

Note 3:
Accounting
Changes

IFRS 16 Leases
The consolidated subsidiaries that prepare accounts under IFRS have applied IFRS 16 Leases (issued in January2016) (IFRS 16) for the fiscal year ended December 31, 2019. In applying IFRS 16, they have adopted a methodof recognizing the cumulative effects of applying this standard on the date of initial application, which is accepted as a transitional measure. With regard to leases that the Group as lessee previously classified as operating leases by applying IAS 17, these leases were recognized as right-of-use assets and lease liabilities on thedate of initial application.
The impact of this change on consolidated profits and losses for the fiscal year ended December 31, 2019
was immaterial. Furthermore, a description of the impact of this change on per share information was omitted
on the grounds of immateriality.
Accounting Standards Update (ASU) 2016-16 Corporate Income Tax “Intra-entity transfers of assets
other than inventory”
The consolidated subsidiaries that adopt U.S. GAAP have applied ASU 2016-16 Corporate Income Tax “Intraentity transfers of assets other than inventory” (ASU 2016-16) from the beginning of the fiscal year ended
December 31, 2019. ASU 2016-16 requires recognition of the income tax consequences of an intra-entity
transfer of assets other than inventory when the transfer occurs. Previously, under U.S. GAAP, the income tax
consequences for asset transfers other than inventory could not be recognized until the asset was sold to athird party. ASU 2016-16 is required to be applied on a modified retrospective basis through a cumulativeeffect adjustment to retained earnings as of the beginning of the period of adoption.
Accordingly, it resulted in decreasing retained earnings brought forward as of January 1, 2019, by ¥774 million. The impact of this change on consolidated profits and losses for the fiscal year ended December 31, 2019
was immaterial. Furthermore, a description of the impact of this change on per share information was omitted
on the grounds of immateriality.

Note 4:
New Accounting
Pronouncements• Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for Consolidated Financial Statements (Practical Issues Task Force (PITF) No. 18, revised on June 28, 2019)• Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using
the Equity Method (PITF No. 24, revised on September 14, 2018)(1) Overview
The ASBJ has revised PITF No. 18 “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries, etc. for Consolidated Financial Statements” and PITF No. 24 “Practical Solution on Unification of
Accounting Policies Applied to Associates Accounted for Using the Equity Method.”
The major amendments are as follows:
For foreign subsidiaries etc., that elect to present subsequent changes in fair value of investment in equity
instruments in other comprehensive income, when investments in the equity instruments are sold, an adjustment shall be made to recognize the difference between the acquisition cost and sales price as gain or loss forthe corresponding fiscal year as a consolidation process, in accordance with the Tentative Practical Solution of“Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for the Consolidation Process.”
For foreign subsidiaries etc., that need to recognize any asset impairment, an adjustment shall be made torecognize the valuation difference as loss for the corresponding fiscal year as a consolidation process.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt these revised PITFs from the beginning of
the fiscal year ending December 31, 2020.
(3) Impact of the adoption of the revised PITFs
The Company is in the process of measuring the effects of applying these revised PITFs in future applicable periods.

14

Notes to the Consolidated Financial Statements

Accounting Standard for Revenue Recognition• “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued on March 30, 2018)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30,
issued on March 30, 2018)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB)
jointly developed a comprehensive accounting standard for revenue recognition and issued “Revenue fromContracts with Customers” in May 2014 (IFRS 15 by IASB, and ASU 2014-09 by FASB).
IFRS 15 was applied for annual reporting periods beginning on or after January 1, 2018, and ASU 2014-09
was also applied from annual reporting periods beginning after December 15, 2017. Based on such a situation,
the ASBJ developed the comprehensive accounting standard for revenue recognition and the implementation
guidance and issued them together.
The basic objective of the ASBJ in developing the accounting standard for revenue recognition was to enhance comparability between financial statements, which is one of the points of convenience of interfacingwith IFRS 15. Accordingly, the accounting standard fundamentally incorporates the basic policies of IFRS 15.
Also, where there are items that should be considered to reflect the business practices in Japan, alternative
policies will be added to the extent that comparability is not lost.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the issued accounting standard and implementation guidance from the beginning of the fiscal year ending December 31, 2022.
(3) Impact of the adoption of the accounting standard and implementation guidance
The Company is in the process of measuring the effects of applying the accounting standard and implementation guidance in future applicable periods.
Accounting Standard for Fair Value Measurement• “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019)• “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, issued on July 4, 2019)• “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, issued on July 4, 2019)• “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31,
issued on July 4, 2019)(1) Overview
The IASB and the FASB have provided detailed guidance of almost the same contents for fair value measurement (IFRS 13 Fair Value Measurement by IFRS, and ASU 2018-13 Fair Value Measurement (Topic 820) by U.S.
GAAP). Based on such a situation, the ASBJ issued “Accounting Standard for Fair Value Measurement,” etc.,
as a result of initiatives mainly concerning promoting the consistency between Japanese and international accounting standards regarding guidance for fair value measurement and required disclosures.
The basic objective of the ASBJ in developing the accounting standard for fair value measurement was toenhance comparability between financial statements of domestic and foreign entities, through a unified measuring method. Accordingly, the accounting standard fundamentally incorporates the basic policies of IFRS 13.
Also, where there are items that should be considered to reflect the business practices in Japan, exceptional
treatments have been established for certain items to the extent that comparability is not lost significantly.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the issued accounting standard and implementation guidance from the beginning of the fiscal year ending December 31, 2022.
(3) Impact of the adoption of the accounting standard and implementation guidance
The Company is in the process of measuring the effects of applying the accounting standard and implementation guidance in future applicable periods.

15

Notes to the Consolidated Financial Statements

ASU 2016-02 Leases
ASU 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815)
and Leases (Topic 842): Effective Dates(1) Overview
These accounting standards require lessees to recognize a right-of-use asset and a lease liability in the statement of financial position. There are no significant changes for lessors in these accounting standards.
The FASB has issued ASU 2019-10, which amends the effective dates for three major accounting standards.
The ASU defers the effective dates for the credit losses, derivatives and hedging, and leases standards for certain companies.
(2) Date of adoption
Foreign consolidated subsidiaries will adopt ASU 2016-02 from the beginning of the fiscal year ending December 31, 2021.
(3) Impact of the adoption of the accounting standards
The Company is in the process of measuring the effects of applying the accounting standards in future applicable periods.

Note 5:
Changes in
Presentation(Consolidated
Balance Sheet)

Changes due to application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”
The Company has been applying “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, issued on February 16, 2018) from the beginning of the fiscal year ended December
31, 2019, and changed the presentation of deferred tax assets and liabilities (that is, classified deferred tax assets and deferred tax liabilities as “Investments and other assets” and “Non-current liabilities,” respectively).
As a result, the Company has changed the presentation of the consolidated balance sheet for the fiscal year
ended December 31, 2018. More specifically, “Deferred tax assets” classified as “Current assets” decreased¥8,891 million, and “Deferred tax assets” classified as “Investments and other assets” increased ¥4,701 million. Also, “Deferred tax liabilities” classified as “Current liabilities” decreased ¥325 million, and “Deferred tax
liabilities” classified as “Non-current liabilities” decreased ¥3,865 million.
In addition, deferred tax assets and liabilities of the same tax-paying entities were offset for presentation
purposes. As a result, total assets decreased ¥4,190 million in comparison with the amount before the change.
Furthermore, in Note 17 “Income Taxes,” we added the contents described in the annotation (Note 8) (excluding total valuation allowance) and the annotation (Note 9), both for the “Accounting Standard for Tax
Effect Accounting,” stipulated in Paragraph 3 through Paragraph 5 of “Partial Amendments to AccountingStandard for Tax Effect Accounting.” However, information concerning the previous fiscal year is not provided
pursuant to the transitional treatment stipulated in Paragraph 7 of “Partial Amendments to Accounting Standard for Tax Effect Accounting.”

Note 6:
Additional
Information

Board Benefit Trust (BBT)
With regard to the compensation for executive officers, as well as directors who concurrently serve as executive
officers (the “Target Officers”), the Company introduced a performance-based stock compensation plan called
BBT (the “Plan”) from the fiscal year ended December 31, 2017. The purpose of the Plan is to further clarify
the linkage between the compensation of the Target Officers, and corporate performance and the value of theCompany’s shares. The intended result is strengthening the Target Officers’ awareness of their contributions to
the medium- to long-term improvement of corporate performance and value.
Accounting treatment related to the trust agreement is in accordance with “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc. through Trusts” (PITF No. 30, issued on March 26, 2015).

16

Notes to the Consolidated Financial Statements(1) Outline of the transactions
The trust established under the Plan acquires the Company’s shares by cash contributed by the Company. The
trust provides shares of the Company and the cash equivalent to the market price of the shares of the Company(the “Company’s Shares and Cash Benefits”) to the Target Officers, in accordance with the Rules of Officer Share
Benefit established by the Company. The Target Officers shall in principle receive the Company’s Shares and Cash
Benefits upon their retirement.
(2) The Company’s shares remaining in the trust
The shares remaining in the trust are recorded under net assets as treasury shares at the book value in the trust(excluding incidental costs). The book value and the number of such treasury shares are ¥577 million and 146
thousand as of December 31, 2019, and ¥584 million and 148 thousand as of December 31, 2018, respectively.
Acquisition of the shares and assets of a pigments business from BASF SE and transformation of thebusiness into a subsidiary
On August 29, 2019, the Company resolved to acquire the shares and assets of the Colors & Effects businessof BASF SE, Europe’s largest chemicals manufacturer, and entered into the master sale and purchase agreement. This transaction is subject to regulatory approval by pertinent U.S., European and other authorities aswell as other customary conditions.
(1) Objectives of the acquisition of shares and assets
To hasten the qualitative transformation of its Color & Display business, the Company is working to expand its
functional pigments business with the aim of driving growth as a leading global manufacturer of high-growth,high-value specialty pigments, including those for displays, cosmetics and automobiles. The annual global pigments market is estimated at approximately ¥2.3 trillion. The Company is a leader in organic pigments and avalued manufacturer of aluminum effect pigments. The target business, which is based in Europe and has sitesaround the world, has established itself as a prominent global manufacturer of effect pigments (for pearl pigments) and for specialty inorganic pigments. Accordingly, the product portfolios of the Company and the target business are highly complementary, with little product overlap. Through this acquisition, the Company will
add a functional pigments product portfolio which is highly regarded by customers. The Company has committed itself to achieving sustainable growth for its color materials business by expanding its functional pigments
business, recognizing this as crucial to bolstering its corporate value.
(2) Name of the seller of the target business
BASF SE(3) Profile of the target businessThis acquisition involves obtaining the pigments business-related assets—including technologies, patents andother intellectual property, as well as goodwill not included in the share purchase—and the shares of 18 individual companies.
(4) Schedule of the acquisition of the target business
By the end of 2020
(Notes)1. This transaction is subject to regulatory approval by pertinent U.S., European and other authorities—including under the antitrust laws of the relevant countries—as well as other customary conditions.
2. Owing to regulatory review timing and other closing conditions, the effective date of the transfer of shares
and assets may change.

17

Notes to the Consolidated Financial Statements(5) Cost of acquisition (Reference)€985 million (¥116.2 billion)(Notes)1. The figure above is derived from adjusting cash and debt as of December 31, 2018, from the enterprisevalue (€1,150 million) of the target business. The actual cost of acquisition may vary depending on actual
net cash/debt and differences in working capital, among others, at closing.
2. Advisory and other fees will depend on fees related to procedures to determine compliance with the antitrust laws of the United States and Europe, as well as of other relevant countries. Accordingly, such expenses
are not included.
3. The exchange rate used is ¥118.00/€1.00. This figure has been rounded.
(6) Plans for raising funds
With regard to the method of procuring funds for this acquisition, the Company planned to choose an approachthat would avoid a decline in capital efficiency due to stock dilution and enable it to maintain financial soundness. Having since explored hybrid financing, the Company made the decision to use a subordinated term loan.
In addition, the Company currently has no plans to raise funds through the issue of new shares (equity financing).
Please see Note 24 “Subsequent Events” for more information regarding financing through a subordinatedterm loan.

Note 7:
Cash and Cash
Equivalents

Cash and cash equivalents as of December 31, 2019 and 2018, include the following:

Cash and deposits
Less: time deposits and short-term investments which mature over three months after
the date of acquisition
Cash and cash equivalents

2019

Millions of yen
2018¥16,786¥19,782(95)(1,151)¥16,690¥18,631

Note 8:Investments in
Unconsolidated
Subsidiaries andAffiliates

Investments in unconsolidated subsidiaries and affiliates as of December 31, 2019 and 2018, include the following:

Investments in stock of unconsolidated subsidiaries and affiliates
Investments in equity of unconsolidated subsidiaries and affiliates
Total

2019

Millions of yen
2018¥44,505¥53,498

653

1,053

¥45,158¥54,551

Note 9:Investment
Securities

The carrying amounts and aggregate fair values of available-for-sale securities as of December 31, 2019 and2018, are as follows:
Millions of yen
2019
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,330¥3,147¥(501)¥10,976

Total¥8,330¥3,147¥(501)¥10,976

Available-for-sale securities:

Millions of yen
2018
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,338¥2,865¥(718)¥10,485

Total¥8,338¥2,865¥(718)¥10,485

Available-for-sale securities:

18

Notes to the Consolidated Financial Statements

Note 10:
Property, Plant
and Equipment

Accumulated depreciation on property, plant and equipment as of December 31, 2019 and 2018, is ¥563,939
million and ¥555,347 million, respectively.

Note 11:
Impairmentof Long-Lived
AssetsImpairment losses on long-lived assets for the fiscal year ended December 31, 2019, for each asset group are
as follows:
Millions of yen
2019
Used status

Category of assets

Location

Allocated impairment loss

Factory assets in use Buildings and structures and Land

Hirakata, Japan¥1,463

Kawaguchi, Japan

925

China

690

Factory assets in use
Factory assets in use

Buildings and structures,
Machinery, equipment andvehicles, Land, and Other
Buildings and structures,
Machinery, equipment andvehicles, Land, and Other

Total¥3,078In reviewing the impairment of long-lived assets, the Group categorizes its operating assets mainly by eachconsolidated company or product group.
The carrying amount of factory assets in use was reduced to its recoverable amount because the recoverable
amount is less than the carrying amount.
For domestic consolidated subsidiaries, the recoverable amount was measured as value in use. Value in useof relevant assets was calculated by discounting future cash flows at a rate of 6.0%. For foreign consolidated
subsidiaries, the recoverable amount was measured as value in use and was evaluated as zero.

Note 12:
Short-Term
Loans Payable
and Long-Term
Loans Payable

Information with respect to short-term loans payable as of December 31, 2019 and 2018, is as follows:
The average interest rate for the fiscal years ended December 31, 2019 and 2018, is 2.26% and 1.92%, respectively, for short-term loans payable, and -0.01% and -0.01%, respectively, for commercial papers.
Bonds payable, long-term loans payable and lease obligations as of December 31, 2019 and 2018, comprisethe following:
2019

Millions of yen
2018

0.53% Japanese yen notes due 2022

¥ 10,000¥ 10,000

1.00% Japanese yen notes due 2025

10,00010,000

0.95% Japanese yen notes due 2036

5,000

5,000

0.36% Japanese yen notes due 2026

5,000

5,000

0.42% Japanese yen notes due 2027

10,00010,000

0.15% Japanese yen notes due 2022

10,00010,000

0.15% Japanese yen notes due 2023

10,00010,0000.19% Japanese yen notes due 2024

10,000—0.28% Japanese yen notes due 2029

10,000—Loans due 2020–2031, with an average interest rate of 1.30%

146,058

169,583

6,435

4,896

232,493234,479(23,456)(49,792)

Lease obligations
Subtotal
Less: current portion of long-term loans payable
Less: current portion of bonds
Less: lease obligations—current
Total

—

—

(1,244)(667)¥207,793¥184,020

19

Notes to the Consolidated Financial Statements

The annual maturities of bonds payable, long-term loans payable and lease obligations for the fiscal years
subsequent to December 31, 2019, are as follows:
Millions of yen

2020¥ 24,700

2021

27,881

2022

61,7912023

18,2802024

24,648Thereafter

75,193

Total¥232,493

The amounts of assets pledged as collateral and secured borrowings and loans as of December 31, 2019,
comprise the following:
Millions of yen

Assets pledged as collateral:¥

Cash and deposits

14

Notes and accounts receivable—trade

3,141

Inventories

1,505

Property, plant and equipment

2,702

Total

¥7,362

Secured borrowings and loans:¥ 79

Short-term loans payable
Current portion of long-term loans payable74

Long-term loans payable

686

Total

¥838

Note 13:Retirement andPension Plans(1) Overview of adopted retirement and pension plans
The Company and a number of domestic consolidated subsidiaries have defined benefit pension plans such asa cash balance–style pension plan and retirement plans, and defined contribution pension plans. Some foreign
consolidated subsidiaries maintain defined benefit pension plans and defined contribution pension plans. The
Company contributes certain available-for-sale securities to the employee retirement benefit trust.
(2) Defined benefit pension plans (including multi-employer plan)
Changes in defined benefit obligations

As of January 1, 2019

Domestic plans

Millions of yen
Foreign plans¥91,678¥135,066

Service cost

2,184

549

Interest cost

729

4,082

Actuarial gains and losses
Benefits paid
Past service cost
Exchange translation differences
Other
As of December 31, 2019(405)

16,658(4,691)(6,805)

306

153

—

549

(102)

729

¥89,699¥150,981

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

20

Notes to the Consolidated Financial Statements

Domestic plans

Millions of yen
Foreign plans¥93,561¥153,835

As of January 1, 2018
Service cost

2,211

693

Interest cost

739

3,918

Actuarial gains and losses(106)(9,072)(4,727)(6,148)—(69)

Exchange translation differences—(8,386)

Other

—

295

¥91,678¥135,066

Benefits paid
Past service cost

As of December 31, 2018

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

Changes in plan assets
Domestic plans

Millions of yen
Foreign plans¥114,309¥117,005

Expected return on plan assets

3,086

5,800

Actuarial gains and losses

12,834

12,995Contributions by the employer

4,333

3,719

Benefits paid

(4,593)(6,782)—951

As of January 1, 2019

Exchange translation differences

—

(15)

¥129,969¥133,673

Domestic plans

Millions of yen
Foreign plans¥ 125,464¥ 132,566

3,206

6,163

Other
As of December 31, 2019

As of January 1, 2018
Expected return on plan assets
Actuarial gains and losses(11,247)(12,992)

Contributions by the employer

1,537

4,703

Benefits paid

(4,651)(5,964)—(7,515)

Exchange translation differences
Other
As of December 31, 2018—44

¥ 114,309¥ 117,005

Reconciliation of defined benefit obligations and plan assets on retirement benefits recognized in
the consolidated balance sheet

Domestic plans

Millions of yen
2019Foreign plans

Funded defined benefit obligations¥

88,562¥ 149,637

Plan assets(129,969)(133,673)

Subtotal(41,407)

15,964

1,137

1,344

Unfunded defined benefit obligations
Net amount of liabilities and assets recognized in consolidated balance sheet¥ (40,270)¥

17,308

Liabilities (net defined benefit liability)¥¥

20,184

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,193(41,463)¥ (40,270)(2,876)¥

17,308

21

Notes to the Consolidated Financial Statements

Domestic plans

Funded defined benefit obligations¥

Millions of yen
2018
Foreign plans

90,473¥ 134,098

Plan assets(114,309)(117,005)

Subtotal(23,836)

17,093

Unfunded defined benefit obligations

1,205

968

Net amount of liabilities and assets recognized in consolidated balance sheet¥ (22,631)¥

18,061

Liabilities (net defined benefit liability)¥¥

18,889¥18,061

1,630

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet(24,261)¥ (22,631)(828)

Retirement benefit expenses and its breakdowns

Domestic plans

Millions of yen
2019Foreign plans

Service cost

¥ 2,184

Interest cost

729

4,082

(3,086)(5,800)

431

1,408

Expected return on plan assets
Recognition of actuarial gains and losses

549

306

Amortization of past service cost
Total

¥

¥

563

153
¥

392

Notes: 1. Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.
2. ¥443 million of losses from amortization of past service cost has been recognized in extraordinary loss as a result of the amendment
to the retirement benefit plans of the Company and a number of consolidated subsidiaries during the fiscal year ended December
31, 2019.

Domestic plans

Service cost

¥ 2,211

Interest cost

¥

693

739

3,918

(3,206)(6,163)

(678)

1,303

—

(69)

¥ (934)¥ (318)

Expected return on plan assets
Recognition of actuarial gains and losses
Amortization of past service cost
Total

Millions of yen
2018
Foreign plans

Note: Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.

Past service cost and actuarial gains and losses
The past service cost and actuarial gains and losses recognized in accumulated other comprehensive income asremeasurements of defined benefit plans (amount before income tax effect) for the fiscal years ended December 31, 2019 and 2018, are as follows:

Past service cost

Domestic plans

Millions of yen
2019Foreign plans¥¥

Actuarial gains and losses
Total

10

(2,919)¥13,669¥(2,909)

Domestic plans

Millions of yen
2018
Foreign plans

Total

Past service cost—
13,669Actuarial gains and losses¥—¥ (876)(11,819)(278)¥(11,819)¥(1,154)

22

Notes to the Consolidated Financial Statements

Unrecognized past service cost and unrecognized actuarial gains and losses
The unrecognized past service cost and unrecognized actuarial gains and losses recognized in accumulated
other comprehensive income as remeasurements of defined benefit plans (amount before income tax effect)
for the fiscal years ended December 31, 2019 and 2018, are as follows:

Domestic plans

Unrecognized past service cost¥

Unrecognized past service cost
Unrecognized actuarial gains and losses

¥

(737)

11,874(47,746)¥11,874¥(48,483)

Domestic plans

Millions of yen
2018
Foreign plans

Unrecognized actuarial gains and losses
Total

—

Millions of yen
2019Foreign plans

¥

—

¥

(747)

(1,795)(44,827)¥(1,795)¥(45,574)

Domestic plans

2019
Foreign plans

Equity securities

55.9%

21.2%

Debt securities

22.5%

63.0%

Total

Major breakdown of plan assets

Other
Total

21.6%

15.8%

100.0%

100.0%

Note: 29.7% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Domestic plans

2018
Foreign plans

Equity securities

49.6%

24.8%

Debt securities

24.9%

56.3%

Other

25.5%

18.9%

100.0%

100.0%

Total

Note: 23.5% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Actuarial assumptions
Domestic plans

2019
Foreign plans

Discount rate

0.8%

0.4%–3.2%

Expected return rate on plan assets

3.0%

4.6%–5.5%

Expected rate of increase in salary

3.1%

1.7%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

Domestic plans

2018
Foreign plans

Discount rate

0.8%

1.3%–4.4%

Expected return rate on plan assets

3.0%

4.9%–6.0%

Expected rate of increase in salary3.1%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

(3) Defined contribution pension plans
The required contributions borne by the Company and a number of consolidated subsidiaries in relation to thedefined contribution pension plans for the fiscal years ended December 31, 2019 and 2018, are ¥2,001 millionand ¥1,940 million, respectively.

23

Notes to the Consolidated Financial Statements

Note 14:Net Assets

Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria suchas: (a) having a board of directors, (b) having independent auditors, (c) having a board of corporate auditorsand (d) the term of service of the directors being prescribed as one year rather than the two years of a normal
term by its articles of incorporation, the board of directors may declare dividends (except for dividends in kind)at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends in kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury shares. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.
(2) Increases/decreases and transfer of common stocks, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus)
depending on the equity account charged upon the payment of such dividends until the total of the aggregate
amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus and retained earnings can be transferred among the accounts under certain conditions upon resolutionof the shareholders.
(3) Treasury shares and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury shares and dispose of such treasury
shares by resolution of the board of directors. The amount of treasury shares purchased cannot exceed theamount available for distribution to the shareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights, which were previously presented as a liability, are now
presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury shares. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights.

Note 15:
Capital Stock

The total amount of capital stock authorized as of December 31, 2019 and 2018, is 150,000,000 shares.
The total amount of capital stock issued as of December 31, 2019 and 2018, is 95,156,904 shares.

24

Notes to the Consolidated Financial Statements

Note 16:
Treasury Shares

The number of treasury shares as of December 31, 2019 and 2018, is follows:
Shares2019
Decrease in As of December 31,
FY20192019

As of January 1,
2019

Increase in
FY2019Common stock

511,035

2,187

1,600

511,622

Total

511,035

2,187

1,600

511,622

Treasury shares:

Notes: 1. The shares held by the BBT (146,200 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (2,187 shares) was due to the purchase of odd-lot shares.
3. The decrease of treasury shares of common stock (1,600 shares) was due to the benefit of the Company’s shares by the BBT.

As of January 1,
2018

Increase in
FY2018

Shares2018
Decrease in As of December 31,
FY20182018

Treasury shares:
Common stock

512,293

2,642

3,900

511,035

Total

512,293

2,642

3,900

511,035

Notes: 1. The shares held by the BBT (147,800 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (2,642 shares) was due to the purchase of odd-lot shares.
3. The decrease of treasury shares of common stock (3,900 shares) was due to the benefit of the Company’s shares by the BBT.

Note 17:
Income Taxes

The differences between the normal effective statutory tax rate in Japan and the actual effective tax rate forthe fiscal years ended December 31, 2019 and 2018, are as follows:
2019

2018

30.6%

30.9%

Valuation allowance change

2.5%(0.6)%Tax rate differences(6.4)%(4.6)%

Equity in earnings of affiliates(2.1)%(2.4)%

Entertainment and other non-deductible expenses

3.0%

2.4%

Elimination of intercompany dividends income

9.7%

12.0%

Dividends income and other non-taxable income(15.2)%(9.8)%

Normal effective statutory tax rate in Japan
Adjustments:

State, provincial, municipal and local taxes

0.8%

0.8%

Tax credit for research and development and others(1.3)%(1.7)%Tax credit for the Special Tax Law for the March 11 Earthquake(0.1)%(0.8)%

Other

5.4%

4.6%

26.9%

30.8%

Actual effective tax rate

The tax effects of significant temporary differences and loss carryforwards, which resulted in deferred tax assets and liabilities, as of December 31, 2019 and 2018, are as follows:

25

Notes to the Consolidated Financial Statements

2019

Millions of yen
2018

Deferred tax assets:¥

Inventories

3,381

¥

3,407

Property, plant and equipment

4,777

4,155

Intangible assets

4,863

4,470

Research and development costs

4,693

4,736

Allowance for doubtful accounts

1,685

1,788

Provision for bonuses

1,717

1,917

Net defined benefit liability

5,733

5,464

Unrealized gain
Net operating loss carryforwards (Note)

799

900

18,19818,974

Other

8,481

9,176

Subtotal

54,32654,987

Less: valuation allowance for tax loss carryforwards(8,315)—

Less: valuation allowance for temporary differences(4,023)—

Valuation allowance(12,338)(12,084)

41,98942,903

Property, plant and equipment(2,475)(3,120)Net defined benefit asset(6,852)(1,728)Contribution of securities to employee retirement benefit trust(1,277)(1,277)

Deferred income taxes related to gains from property, plant and equipment(2,683)(2,791)

Total
Deferred tax liabilities:

Valuation difference on available-for-sale securities
Other

(812)

(665)

(3,466)(2,816)

Total(17,565)(12,397)

Net deferred tax assets¥ 24,424¥ 30,506

Note: The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred tax assets as of December 31,
2019, were as follows:

2020

2021

2022

2023

2024

Thereafter

Total

Tax loss carryforward (*a)

¥ 191

¥ 746

¥1,260¥1,476¥ 182¥14,344¥18,198

Valuation allowance

(179)

(123)

(252)

(171)

(153)

(7,437)(8,315)Net deferred tax assets

11

623

1,008

1,305

29

6,907

(*b) 9,883(*a) Tax loss carryforward shown in the above table is after multiplying by the statutory tax rate.
(*b) Deferred tax assets of ¥9,883 million was recognized for tax loss carryforward of ¥18,198 million. No valuation allowance is recognized
for tax loss carryforward since the amount was determined to be recoverable based on expected future taxable income.

Note 18:
Research andDevelopment
Costs

Research and development costs charged to income for the fiscal years ended December 31, 2019 and 2018,are ¥12,505 million and ¥12,923 million, respectively.

26

Notes to the Consolidated Financial Statements

Note 19:
LeasesOperating leases
Future minimum rental payments under non-cancellable operating leases as of December 31, 2019 and 2018,
are as follows:

Due within one year
Due after one year
Total

2019

Millions of yen
2018¥1,932¥ 2,570

6,379

7,663

¥8,311¥10,233

Note: The consolidated subsidiaries that adopt IFRS began applying IFRS 16 Leases from the fiscal year ended December 31, 2019. With regard
to leases of the consolidated subsidiaries as lessee previously classified as operating leases, was included only in the figures as of December 31, 2018.

Note 20:
Financial
Instruments

Group policy for financial instruments
The Group manages funds with safe and secure financial assets. Means of financings include direct financing
such as the issuance of bonds and commercial papers and liquidation of receivables, as well as indirect financing such as short- and long-term bank borrowings, the terms of which are determined based on financial market conditions and account balances at the time.
Nature and extent of risks arising from financial instruments
Receivables such as trade notes and accounts receivable are exposed to customer credit risk. In addition, someof such receivables are denominated in foreign currencies and are exposed to the market risk of fluctuation inforeign currency exchange rates. Investment securities, mainly the stocks of customers and suppliers, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and accounts payable, are less than one year. In addition,some of such payables are denominated in foreign currencies and are exposed to the market risk of fluctuation
in foreign currency exchange rates.
Funds needed for operations are mainly procured as short-term loans payable, whereas funds needed forcapital expenditure and investment are mainly procured as long-term loans payable, bonds payable and leaseobligations with regard to finance lease transactions. A part of such bank loans, bonds and lease obligations
are exposed to market risks from changes in variable interest rates. Trade accounts payable and loans payableof the Company are also exposed to liquidity risk that the Company cannot meet its contractual obligations infull on maturity dates.
Risk management for financial instruments
The Company manages its credit risk from trade notes and accounts receivable on the basis of internal guidelines, which include the monitoring of payment terms and balances of customers by the sales and businessadministration departments to identify the default risk of customers at an early stage. The consolidated subsidiaries of the Company manage the exposure to credit risk on their own in accordance with their internal guidelines. Investment securities are managed by monitoring market values, the financial position of issuers andconsidering the relationship with customers and suppliers on a regular basis. The Group also tries to mitigate
liquidity risk by arranging lines of credit with financial institutions, along with adequate financial planning.
Fair values of financial instruments
The following tables present the carrying amounts and the fair values of financial instruments as of December 31, 2019 and 2018. Financial instruments whose fair values are not reliably measured are excluded fromthe tables below.

27

Notes to the Consolidated Financial Statements

Carrying amount

Fair value

Millions of yen
2019
Difference

Cash and deposits¥ 16,786¥ 16,786¥

Notes and accounts receivable—trade211,232

211,232—

26,72331,574

4,851

Assets:—Investment securities
Stocks of subsidiaries and affiliates
Other

10,976

10,976—

Total¥265,717¥270,568¥4,851¥108,562¥108,562¥

Short-term loans payable

20,13920,139—Current portion of long-term loans payable

23,456

23,645

189

Lease obligations (current)

1,244

1,244

—

Income taxes payable

2,556

2,556

—

Liabilities:
Notes and accounts payable—trade—

Bonds payable

80,00080,640640Long-term loans payable

122,602

123,014

412

5,191

5,514

323

¥363,750¥365,314¥1,564

¥

(106)

¥

(106)

¥

¥

879

¥

879

Lease obligations (non-current)
Total
Derivative financial instruments: (Note)
Hedge accounting—not applied

985

Hedge accounting—applied
Total

985

—
—

¥

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

—

28

Notes to the Consolidated Financial Statements

Millions of yen
2018
Difference

Carrying amount

Fair value

Cash and deposits¥ 19,782¥ 19,782

Notes and accounts receivable—trade209,763

209,763—

27,49725,120(2,377)

Assets:¥—Investment securities
Stocks of subsidiaries and affiliates
Other

10,485

10,485—

Total¥267,527¥265,150¥(2,377)¥118,554¥118,554¥

Short-term loans payable

29,98629,986—

Current portion of long-term loans payable

49,79249,81725

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

667

667

—

2,843

2,843

—

Bonds payable

60,00060,648648

Long-term loans payable

119,791

120,091

300

Lease obligations (non-current)
Total

4,229

4,565

336

¥385,862¥387,171¥ 1,309

¥

152

¥

152

¥

¥

171

¥

171

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

19

19

—
—

¥

—

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

The valuation techniques used to estimate the fair values of financial instruments and information on themarketable securities and derivative financial instruments are as follows:
AssetsCash and deposits and notes and accounts receivable–trade
The fair values of cash and deposits and notes and accounts receivable–trade approximate their carrying
amounts as these amounts are settled in a short period of time.
Investment securities
The fair values of investment securities are measured at the quoted market price on the stock exchange.
Liabilities
Notes and accounts payable–trade, short-term loans payable and income taxes payable
The fair values of these accounts approximate their carrying amounts as these amounts are settled in a shortperiod of time.
Current portion of long-term loans payable and long-term loans payable
For long-term loans payable bearing a floating interest rate, the fair values of those subject to special treatment
of interest rate swaps are based on present value by totaling the amount of principal and interest, together
with related interest rate swaps, discounted by the interest rate that would apply if equivalent long-term loans
were newly entered into. The fair values of other long-term loans payable for which a floating interest rate isapplied approximate their carrying amounts, due to the fact that the market rate of interest is quickly factored
in while credit status of the Company remains unchanged.
On the other hand, the fair values of long-term loans payable for which a fixed interest rate is applied aredetermined by discounting the cash flows related to the long-term loans payable. The discount rate applied forthe calculation above is the interest rate that may be currently available to the Group for loans payable withsimilar terms and conditions.

29

Notes to the Consolidated Financial Statements

Lease obligations (current) and lease obligations (non-current)
The fair values of these accounts are determined by discounting the cash flows related to the lease obligations.
The discount rate applied for the calculation above is the interest rate that may be currently available to theGroup for lease obligations with similar terms and conditions.
Bonds payable
The fair values are measured at the quoted market prices.
Derivative financial instruments
Please see Note 21 “Derivative Financial Instruments” for more information.
Financial instruments whose fair value is not reliably measured
There are no market prices for non-listed stocks and others (carrying amounts as of December 31, 2019 and2018, are ¥21,614 million and ¥29,541 million, respectively) whose future cash flows cannot be estimated.
The fair values of such non-listed stocks and others are not reliably determinable and thus excluded from investment securities.
Redemption schedule for financial assets and securities
The redemption schedules for financial assets and securities with contractual maturities as of December 31,
2019 and 2018, are summarized as follows:

Notes and accounts receivable—trade
Total

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2019
Due after
10 years¥211,232

¥—

¥—

¥—

¥211,232

¥—

¥—

¥—

Due after 5 years
through 10 years

Millions of yen
2018
Due after
10 years

Due in 1 year
or less

Notes and accounts receivable—trade
Total

Due after 1 year
through 5 years¥209,763

¥—

¥—

¥—

¥209,763

¥—

¥—

¥—

Repayment schedule for bonds payable, long-term loans payable and other interest-bearing debt
The repayment schedules for bonds payable, long-term loans payable and other interest-bearing debt with
contractual maturities as of December 31, 2019 and 2018, are summarized as follows:

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2019
Due after
10 years¥¥¥

Short-term loans payable¥20,139

Current portion of long-term loans payable

23,456———

Lease obligations (current)

1,244

—

—

—

Bonds payable—

40,00035,0005,000

Long-term loans payable—

90,03932,495

68

Lease obligations (non-current)
Total

—

—

—

—

2,561

2,062

568

¥44,839¥132,600¥69,557¥5,636

30

Notes to the Consolidated Financial Statements

Due in 1 year
or less

Short-term loans payable¥29,986

Current portion of long-term loans payable

49,792

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2018
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

Lease obligations (current)

667

—

—

—

Bonds payable—

30,00025,0005,000

Long-term loans payable—

94,82324,968—

Lease obligations (non-current)

—

2,431

1,798

—

¥80,445¥127,254¥51,766¥5,000Total

Note 21:
Derivative
Financial
Instruments

The Group has entered into various foreign currency forward contracts, currency options and swaps, interest
rate swaps and commodity swaps.
Foreign currency forward contracts and currency options and swaps are entered into to hedge the effects of
exchange rate changes on receivables and payables or anticipated transactions denominated in foreign currencies. Interest rate swaps are entered into to hedge the effects of interest rate changes and to reduce financing cost. Commodity swaps are entered into to hedge the effects of commodity price changes of fuel. Loansdenominated in foreign currencies are entered into to hedge a part of risks associated with the fluctuations of
exchange rates for investments in foreign entities.
The Group does not use derivative instruments for trading or speculative purposes. Derivative transactions
performed by the Group have risks due to fluctuations of exchange rates, interest rates and other factors.
Because these transactions are executed with creditworthy financial institutions, the Group does not anticipate the likelihood of any losses resulting from default by the counterparties to these agreements.
Internal regulation for managing derivative transactions has been established for the purpose of risk control
in the Company, and all derivative transactions are performed under this regulation.
The execution of derivative transactions is carried out by the Company’s finance department, and the management of risk is monitored by the Company’s accounting department. Transactions are periodically reported
to the board of directors by the officer in charge of the Finance and Accounting Division.
Consolidated subsidiaries execute transactions in accordance with their regulations for derivative management and periodically report the results of those transactions to the Company.

31

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is not applied as of December 31, 2019 and 2018
(1) Currency related
Millions of yen
2019
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss¥ 1,067¥—¥ (24)¥ (24)

315

—

(5)

(5)

Russian ruble

3,272

—

(21)

(21)

U.S.$

3,172

—

3

3

Colombian peso

1,512

—

(18)

(18)

Canadian $

1,322

—

(14)

(14)

550

—

(2)

(2)

1,829

—

(27)

(27)

Currency swaps: (Note 1)(Payment in Australian $ andreceipt in U.S.$)
Other
Foreign currency forward contracts: (Note 2)
Selling

Other
Buying
U.S.$
Other
Total

779

—

1

1

¥13,817¥—¥(106)¥(106)

Notes: 1. The fair values of currency swap contracts are measured using the quoted price obtained from financial institutions.
2. The fair values of foreign currency forward contracts are measured using the forward quotation.

Millions of yen
2018
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss¥ 1,205

¥—

¥(14)

¥(14)

U.S.$

1,252

—

37

37

Euro

865

—

4

4

Russian ruble

2,736

—

106

106

Colombian peso

1,549

—

18

18

Canadian $

1,273

—

20

20

380

—

(8)

(8)

3,878

—

(14)

(14)

Currency options: (Note 1)
SellingEuro
BuyingForeign currency forward contracts: (Note 2)
Selling

Other
Buying
U.S.$
Other
Total

394

—

3

3

¥13,532

¥—

¥152

¥152

Notes: 1. The fair values of currency options are measured using the quoted price obtained from financial institutions. Currency options used
are called collar options, which effectively limit the risk arising from the changes in exchange rate by the combination of buying call
options and selling put options, or selling call options and buying put options.
2. The fair values of foreign currency forward contracts are measured using the forward quotation.

32

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is applied as of December 31, 2019 and 2018
(1) Currency related
Millions of yen
2019
Hedged item

Contract/notionalamount due after
one year

Fair value

359

¥—

¥ (1)

Contract/notionalamountForeign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction

¥

168

—

(2)

Forecasttransaction
and Accounts
payable—trade23,553

—

994

92

—

0

2,593

—

275

—

10,871—¥37,909¥—

BuyingEuro
Other
Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other

Accounts
receivable—trade

Currency swaps: (Notes 1 and 3)(Payment in Japanese yen and receipt in
U.S.$)
Total

Loans payable¥991

Notes: 1. The fair values of foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts appropriated to specific debts and credits are settled together with either accounts receivable–trade or accounts
payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflected in accounts receivable–trade or accounts payable–trade.
3. Currency swaps appropriated to specific credits are settled together with loans payable subject to hedged transaction. Accordingly,
the fair values of such currency swaps are reflected in loans payable.

Millions of yen
2018
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥ 391

¥—

¥ 9

338

—

7

78

—

(1)

2,552

—

540

—

¥3,899¥—Foreign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction

BuyingU.S.$

Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other
Total

Accounts
receivable—trade¥15

Notes: 1. The fair values of foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts appropriated to specific debts and credits are settled together with either accounts receivable–trade, loans payable or accounts payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflectedin accounts receivable–trade, loans payable or accounts payable–trade.

33

Notes to the Consolidated Financial Statements(2) Interest related
Millions of yen
2019
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥66,306¥66,306¥66,306¥66,306¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair values of such interest rate swaps is reflected in loans payable.

Millions of yen
2018
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥62,596¥62,596¥46,559¥46,559¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair values of such interest rate swap is reflected in loans payable.

(3) Commodity related
Millions of yen
2019
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥42

¥—

¥(6)

¥42

¥—

¥(6)

Note: The fair values of commodity swap is measured using the quoted price obtained from the exchange.

Millions of yen
2018
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥153

¥42

¥4

¥153

¥42

¥4

2019

Millions of yen
2018

Note: The fair values of commodity swap is measured using the quoted price obtained from the exchange.

Note 22:
Commitments
and Contingent
Liabilities

Contingent liabilities as of December 31, 2019 and 2018, are as follows:

Trade notes discounted with banks
Liabilities for guarantee and other
Total

¥ —

¥

9

583

637

¥583

¥646

In the opinion of management, the eventual settlement of pending lawsuits in which any of the companies
in the Group is the defendant will not have a material effect on the consolidated financial position or consolidated results of operations of the Group.

34

Notes to the Consolidated Financial Statements

Note 23:
Other
Comprehensive
IncomeEach component of other comprehensive income and related tax effects (including those on non-controllinginterests) for the fiscal years ended December 31, 2019 and 2018, comprises the following:
2019

Millions of yen
2018

564

¥ (6,160)

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year¥

Reclassification adjustments to profit (loss)(73)(3,118)Amount before income tax effect491(9,278)

Income tax effect

(164)

2,776

Total

327

(6,502)

1,008

6

(42)

17

Amount before income tax effect

966

23

Income tax effect

(297)

(6)

Total

669

17

(4,394)(20,112)—(91)

Deferred gains or losses on hedges:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)

Foreign currency translation adjustment:
Adjustments arising during the year
Reclassification adjustments to profit (loss)
Amount before income tax effect(4,394)(20,203)

Total(4,394)(20,203)

Adjustments arising during the year

8,892

(13,529)

Reclassification adjustments to profit (loss)

1,868

556

Amount before income tax effect

10,760(12,973)

Income tax effect(3,491)

3,560

Total

7,269

(9,413)(1,298)(1,547)554

2

Remeasurements of defined benefit plans:

Share of other comprehensive income of associates accounted for using
equity method:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)
Total
Total other comprehensive income(744)(1,545)¥ 3,127¥(37,646)

Note 24:Subsequent
Events(Dividends)
At the Company’s annual general meeting of shareholders held on March 26, 2020, the shareholders approved
the following appropriations of retained earnings:
Millions of yen

Cash dividends, ¥40.00 per share
Total¥3,792¥3,792

Note: The total amount of dividends resolved at the annual general meeting of shareholders held on March 26, 2020, includes dividends of ¥6
million for the Company’s shares held by the BBT.

(Financing through a Subordinated Term Loan)
Procurement of a total of ¥60 billion through a subordinated term loan (“the subordinated loan”) was approved at a meeting of the Company’s Board of Directors held on March 24, 2020.
1. Purpose and significance of the subordinated loan
The Company had resolved to acquire the shares and assets of the Colors & Effects business of German firm
BASF SE on August 29, 2019.

35

Notes to the Consolidated Financial Statements

With regard to the method of procuring funds for this acquisition, the Company planned to choose an approach that would avoid a decline in capital efficiency due to stock dilution and enable it to maintain financial
soundness. Having since explored hybrid financing, the Company made the decision to use a subordinated loan.
Also, the Company currently has no plans to raise funds through the issue of new shares (equity financing).
2. Characteristics of the subordinated loan
A subordinated loan is a type of hybrid financing midway between equity and debt. Accordingly, while classified as debt, it has characteristics similar to equity. As a result, the subordinated loan will be eligible for recognition by credit rating agencies as having equity credit attributes to a certain extent, enabling the Company tostrengthen its financial base without causing stock dilution. Specifically, the Company expects 50% of the total
amount procured to be assessed as having equity credit attributes by the Japan Credit Rating Agency, Ltd.
3. Summary of the subordinated loan
Total amount procured¥60 billion

Contract date (scheduled)

March 31, 2020

Drawdown date

Any date within one year of the contract date

Use of funds procured

Business acquisitionDue date

60 years from the drawdown date

Early repayment*

Applicable interest rate

The Company may repay before the due date all or part of the principal oneach interest payment date five years from the drawdown date or later, or incertain other specified circumstances.
From drawdown date up to the 10th year, at base floating interest rate plus
the initial spread.
From the 10th year up to the 25th year, at base floating interest rate plus a
0.25% step-up from the initial spread.
From the 25th year on, at base floating interest rate plus a 1.00% step-up
from the initial spread.

Interest deferral clause

The Company may defer payment of interest.

Subordination clause

The creditors of the subordinated loan shall have a claim subordinated to thatof other senior debt creditors in the event of the Company’s liquidation, bankruptcy, corporate reorganization or civil rehabilitation proceedings under Japanese law or any equivalent proceedings under any laws other than Japaneselaw. Any provisions stipulated in the subordinated loan agreement shall not be
amended in any manner detrimental to any of the Company’s creditors otherthan the creditors of the subordinated loan.

Lenders

MUFG Bank, Ltd., Mizuho Bank, Ltd., etc.

Assessment of equity credit
attributes (expected)

Japan Credit Rating Agency: Medium / 50%* In the case of early repayment of the subordinated loan, the Company anticipates procuring funds through the issue of common stock or
debt (refinancing securities) approved by rating agencies as having equity credit attributes equivalent to or higher than the subordinatedloan. However, if the Company satisfies certain financial requirements when early repayment is made five years after the drawdown date orlater, it may defer the procurement of funds through refinancing securities.

Note 25:
Segment
Information(1) Segment information
New corporate organization introduced
Effective from January 1, 2019, the Company revised its segmentation to coincide with the launch of its medium-term management plan, DIC111. Accordingly, figures for the fiscal year ended December 31, 2018, havebeen restated.
Description of reportable segments
The reportable segments of the Group are components for which discrete financial information is available andwhose operating results are regularly reviewed by the board of directors to evaluate their performance and determine the allocation of management resources.
The Group has six product divisions, namely “Printing Materials,” “Packaging Materials,” “Color Materials,”“Display Materials,” “Performance Materials” and “Composite Materials,” and each product division conducts
its business.

36

Notes to the Consolidated Financial Statements

The product divisions are aggregated into three reportable segments, namely “Packaging & Graphic,” “Color & Display” and “Functional Products,” based on the similarity of the products and services.
“Packaging & Graphic” mainly consists of gravure inks, flexo inks, offset inks, news inks, jet inks and polystyrene. “Color & Display” mainly consists of organic pigments, liquid crystal materials and health foods. “Functional Products” mainly consists of synthetic resins, such as acrylic, polyurethane, epoxy resins, PPS compounds
and industrial adhesive tapes.
Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2 “Summary of
Significant Accounting Policies.”
Segment profits are based on operating income.
Intersegment sales are mainly based on market price or cost of goods manufactured.
Information about sales, profit (loss), assets, liabilities and other items
Millions of yen
2019
Packaging &Graphic

Color &
Display¥416,377¥ 86,500

Reportable Segments
Functional
Products
Total

OthersTotal

443¥768,568

Sales:
Sales to customers
Intersegment sales
Total sales¥265,248¥768,125¥—

29,912

3,342

33,253—33,253416,377

116,411

268,590

801,378443

801,821

Segment profit

19,178

10,784

19,23449,196433

49,629Segment assets¥358,108¥ 93,475¥320,720¥772,303¥31,367¥803,670

Others:12,9105,099

13,51531,524552

32,076

Amortization of goodwill

21

—

78

99

—

99

Investments in affiliates

5,379

652

35,16941,2003,958

45,158

Increase in property, plant andequipment and intangible assets

12,384

5,840

15,34533,569413

33,982

Depreciation and amortization

Millions of yen
2018
Packaging &Graphic

Color &
Display¥434,679¥ 91,440

Reportable Segments
Functional
Products
Total

OthersTotal

600¥805,498

Sales:
Sales to customers
Intersegment sales
Total sales¥278,779¥804,898¥—

32,673

3,337

36,010—36,010434,679

124,113282,116

840,908600

841,508

Segment profit

19,887

14,97720,80955,673417

56,090

Segment assets¥355,044¥ 95,079¥320,453¥770,576¥33,884¥804,460

Others:Depreciation and amortization

13,334

4,662

13,381

31,377343

31,720

Amortization of goodwill

22

1

103

126

30

156

Investments in affiliates

5,231

1,184

44,55750,972

3,579

54,551

Increase in property, plant andequipment and intangible assets

11,551

6,616

13,50331,670243

31,913

37

Notes to the Consolidated Financial Statements

Reconciliation between reportable segment total and amounts disclosed in consolidated financial
statements
2019

Millions of yen
2018¥801,378¥840,908

443

600

Sales:
Reportable segment total
Sales in “Others”
Elimination of intersegment transactions(33,253)(36,010)

Sales in consolidated financial statements¥768,568¥805,498

2019

Millions of yen
2018¥49,196¥55,673

433

417

Profit:Reportable segment total
Profit in “Others”
Corporate expenses(8,297)(7,705)

Operating income in consolidated financial statements¥41,332¥48,385

Note: Corporate expenses consist substantially of R&D expenses incurred by the DIC Central Research Laboratories to develop new products,
which are not included in any reportable segment.

2019

Millions of yen
2018¥772,303¥770,576

Assets:Reportable segment total
Assets in “Others”

31,36733,884

Elimination between segments(45,235)(40,964)

Corporate assets
Assets in consolidated financial statements

44,64837,800¥803,083¥801,296

Note: Corporate assets consist of deferred tax assets and assets of the DIC Central Research Laboratories and Kawamura Memorial DIC Museumof Art, which are not included in any reportable segment.

Other items are as follows:
Millions of yen
2018

2019

Depreciation and amortization

Reportable
Segments

Others Adjustments Consolidated

Reportable
Segments

Others Adjustments Consolidated¥31,524¥ 552¥1,051¥31,377¥ 343¥1,105¥33,127¥32,825

99

—

—

99

126

30

—

156

Investments in affiliates

41,2003,958—

45,15850,972

3,579—

54,551

Increase in property,
plant and equipment andintangible assets

33,569413

980

34,962

31,670243

171

32,084

Amortization of goodwill

Notes: 1. The adjustments for depreciation and amortization are mainly depreciation and amortization related to the DIC Central ResearchLaboratories that cannot be allocated to any reportable segment.
2. The adjustments for increase in property, plant and equipment and intangible assets are mainly capital investments of the DIC Central Research Laboratories that cannot be allocated to any reportable segment.

(2) Related information
Information about geographical areas

Japan

USA

OthersMillions of yen
2019
Total

Net sales (Note)¥280,147¥96,654¥391,767¥768,568

Property, plant and equipment

125,932

28,68577,559232,176

Note: Net sales is based on customer location and is classified by country.

38

Notes to the Consolidated Financial Statements

Japan

USA

OthersMillions of yen
2018
Total

Net sales (Note)¥292,857¥97,682¥414,959¥805,498

Property, plant and equipment

127,257

28,89871,996228,151

Note: Net sales is based on customer location and is classified by country.

Information about major customers
Not applicable for the fiscal years ended December 31, 2019 and 2018, because there is no single customer
which accounts for more than 10% of net sales shown on the consolidated statement of income.
(3) Impairment loss of assets by reportable segment
Millions of yen
2019

Impairment loss

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated¥2,388

¥690

¥—

¥—

¥—

¥3,078There was no impairment loss of assets for the fiscal year ended December 31, 2018.
(4) Amortization and unamortized balances of goodwill by reportable segment
Millions of yen
2019

Amortization
Unamortized balances

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated

¥21

¥—

¥ 78

¥—

¥—

¥ 99

7

—

755

—

—

762
Millions of yen
2018

Packaging &Graphic

Color &
Display

Functional
Products

OthersCorporate andeliminations

Consolidated

Amortization

¥22

¥ 1

¥103

¥30

¥—

¥156

Unamortized balances

34

—

—

—

—

34

39

Notes to the Consolidated Financial Statements

Note 26:
Related-Party
Transactions(1) Related-party transactions with the Company
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2019 and 2018, are as follows:
Millions of yen
2019Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)459 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

192

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

67 Tradenotes andaccounts
receivable

16

Purchase of raw
materials andothers (Note 7)

6,936 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

1,720

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

3,803 Accounts
receivable–
trade andaccounts
receivable–
other

1,480

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

2,232 Security
deposit

1,832

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

40

Notes to the Consolidated Financial Statements

Millions of yen
2018Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

2,206

Security
deposit

1,833

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

525

Trade
notes,
accounts
payableand otheraccounts
payable217

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

61

Trade
notes andaccounts
receivable

31

Purchase of raw
materials andothers (Note 7)

6,038

Trade
notes,
accounts
payableand otheraccounts
payable1,665

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

4,435

Trade
accounts
receivableand otheraccounts
receivable

1,408

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
Nissei Real-Estate Co., Ltd., Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. transferred all the Company’s shares to SHOEI INC.
and do not own voting rights of the Company as of the balance sheet date.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

41

Notes to the Consolidated Financial Statements(2) Related-party transactions with the consolidated subsidiaries
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2019 and 2018, are as follows:
Millions of yen
2019Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

15 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)790 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

333

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

59 Tradenotes andaccounts
receivable

25

Purchase of raw
materials andothers (Note 7)

1,381 Electronicallyrecordedobligations,accounts
payable–trade, andaccounts
payable–
other

238

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

638 Accounts
receivable–
trade andaccounts
receivable–
other

223

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

42

Notes to the Consolidated Financial Statements

Millions of yen
2018Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

15 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

754 Tradenotes,
accounts
payableand otheraccounts
payable339

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

57 Tradenotes andaccounts
receivable

24

Purchase of raw
materials andothers (Note 7)

1,485 Tradenotes,
accounts
payableand otheraccounts
payable267

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

539 Trade
accounts
receivableand otheraccounts
receivable

191

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
Nissei Real-Estate Co., Ltd., Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. transferred all the Company’s shares to SHOEI INC.
and do not own voting rights of the Company as of the balance sheet date.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

43

Management’s Report on Internal Control

44

Independent Auditor’s Report

45

Independent Auditor’s Report

46

Investor Information and Corporate Data
(As of December 31, 2019)

Investor Information
Common Stock

Corporate Data
DIC common stock is listed and traded on the Tokyo
Stock Exchange. There were 38,885 shareholdersof record on December 31, 2019. On the Tokyo Stock
Exchange, the high and low prices for each quarter ofthe years 2019 and 2018 were as follows:

Jan.–Mar.
Apr.–Jun.
Jul.–Sept.
Oct.–Dec.

2019
High
Low

2018
High
Low

¥3,635 ¥3,170
3,545 2,587
3,130 2,534
3,290 2,894¥4,525 ¥3,360
4,020 3,380
4,135 3,340
4,125 3,150

Independent Public Accountants

100 shares¥96,556,692,787 (95,156,904 shares)
Deloitte Touche Tohmatsu LLC

Distribution of Shareholders

Japanese financial institutions

Paid-in Capital

40.2%

24.2%

Financial instruments business operators: 4.5%

Corporate Headquarters
DIC Building, 7-20,
Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3000
http://www.dic-global.com/
Principal Domestic Offices, Plants
and Laboratories (Nonconsolidated)

Number of Employees

Other
ForeignJapanese
corporations
corporations
17.4%

35-58, Sakashita 3-chome, Itabashi-ku,
Tokyo 174-8520, Japan

Number of Branch Offices: 2
Number of Plants:
9
Number of Laboratories:
1

Total Number of Shares Authorized 150,000,000 shares
Number of Unit Shares

Registered Address

Japanese
individual
investors
and others
13.3%

Treasury stock: 0.4%

20,513
Date of Foundation
February 15, 1908
Date of Incorporation
March 15, 1937

Number of
Shares Owned Percentage(Thousands)of Total

Major Shareholders

Transfer Agent

Meeting of Shareholders
For Further Information, Contact:

SHOEI INC.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
The Dai-ichi Life Insurance Company,
LimitedJP MORGAN CHASE BANK 385632
Japan Trustee Services Bank, Ltd.
(Trust Account 4)
SMBC Nikko Securities Inc.
Aioi Nissay Dowa Insurance Co., Ltd.
NIPPON LIFE INSURANCE COMPANY
Japan Trustee Services Bank, Ltd.
(Trust Account 7)

12,694 13.39%
6,893

7.27

5,009

5.28

3,500
2,851

3.69
3.01

2,619
2,258
2,020
1,900

2.76
2.38
2.13
2.00

1,733 1.83
41,477 43.74%

Mitsubishi UFJ Trust and Banking Corporation
10-11, Higashisuna 7-chome, Koto-ku, Tokyo
137-8081, Japan
Our annual meeting of shareholders is held in March.
Corporate Communications Dept.
DIC Corporation
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3033
E-mail: prir@ma.dic.co.jp

（Contact）

Corporate Communications Dept.
Sustainability Dept.
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8233, Japan
Tel: +81-3 - 6733 - 3034

Fax: +81-3 - 6733 - 3038

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

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Innovation through Compounding
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