2023

KAWAI Report2023
Sustainability
Environment
SocialGovernanceManagement Philosophy

In order to make the Corporation more creative and likeable...
We create a rich, pleasant environment for living.
We provide our products and services with our customer’s satisfaction as the ﬁrst priority.
We carry out our corporate activities toward the future.
We take good care of our employees and aim to make the Corporation fair and open.

Code of Conduct

Always have pioneering spirit without satisfaction with the status quo

Act aggressively without worrying about failure
Constantly improve yourself with aspiration
Demonstrate great creativity and challenge yourself in this era of change
Focus on living in harmony with nature and actively take action to contribute to society
Behave with pride and conﬁdence as a player to promote the music culture

Siince the foundation of the company, we have been continuing our business activities
with the purpose of manufacturing quality instruments and making contributions to
the music cu
culture.
In today’ss world where society and industrial structure are dramatically changing, Kawai strives to continue our corporate activities pursuant to the management
philosophy and the code of conducts described above in order to further contributein wider areas to peop
ple’s lives and culture.

1

KAWAI Report 2023

Contents
About Kawai GroupManagement Philosophy and Code of Conduct …………………………… 1
Top message…………………………………………………………………………………… 3
Company history …………………………………………………………………………… 4
Overview of The 7th Medium-Term Management Plan
“Resonate 2024” …………………………………………………………………………… 5

Sustainability
Sustainability Principles ………………………………………………………………… 7
Addressing environmental and social issues ……………………………… 8
SDGs related to each activity policy ……………………………………………… 9

Environmental activities
Reduction of environmental load ……………………………………………… 11
Resources recycling …………………………………………………………………… 15
Afforestation/tree planting ………………………………………………………… 16
Climate change …………………………………………………………………………… 17

Social activities
Contributions to culture promotion …………………………………………… 19
Education/training ……………………………………………………………………… 21
Human capital development ……………………………………………………… 24
Diversity………………………………………………………………………………………… 25
Work-life balance ………………………………………………………………………… 26
Health & Productivity Management …………………………………………… 27
Contribution to society ………………………………………………………………… 28
Quality and customer satisfaction ……………………………………………… 29

Corporate governance activities
Corporate governance ………………………………………………………………… 30
Risk management ……………………………………………………………………… 33
Compliance…………………………………………………………………………………… 34

Reference material
Company outline and main business ………………………………………… 35
Resources and energy input and disposal
and emission amount ………………………………………………………………… 36
Environmental load data……………………………………………………………… 37
Third party comment…………………………………………………………………… 38

Editorial policy Information in this report ---------------------------------------------As of FY2022, the title of this report has been changed
from “Environmental and Social Report” to “KAWAI Report.”
In addition to the existing topics of the “Environmental and Social Report”, information about “our activities in
rela
lati
tion
on to sustainability” is also provided in this report.
We tried to conv
nvey
ey Kawai Group’s activities to readers inan eassyy-to
to-understand wayy by clarifying each item’s policy and their rela
l ti
tion
on to SDGs.
For detailed informatiionn on the business off Ka
Kawa
w i
Group, please refer to the company web
ebsi
site
te..

 Intended readers -----------------------------------------------------------------This report is intended for various stakeholders, including customers, partner companies, employees, shareholders and investors, local residents and NGOs, administrative organizations and international organizations.

 Period covered by the report ------------------------------------This report mainly covers the ﬁscal year 2022 (April 2022
to March 2023)2023). However
However, some important information
includes data from outside this period. Additionally, certain items and ﬁgures have been revised and included in
the report due to a review of the aggregation methodsused.

 Organizations subject to the report ---------------------Kawai Musical Instruments Manufacturing Co., Ltd.,
Headquarters and Ryuyo Factory
Kawai Precision Metals Co., Ltd.
Kawai Casting Co., Ltd.
Kawai Hyper Wood Co., Ltd.
Kawai Acoustic System Co., Ltd½ This report also includes the activiti
ttiies ofo somome otheheer Grourouppcompanies.

KAWAI Report 2023

2

TOP MESSAGE
Setting out the long-term vision “Establishing a 100-year brand”,
we endeavor to improve our corporate value and brand quality,and promote sustainable growth aiming at continuing evolution
for 100 years and beyond.

Chairman, President & CEO

Three years has already passed since the outbreak of the
COVID-19 disease. The pandemic has ﬁnally begun to subside,and now individuals have the choice of whether or not to wear
a face mask. I would like to express our renewed appreciation
to medical service personnel for their day-to-day endeavors toprevent its spread.

Activities under the 7th Medium-Term Management
Plan “Resonate 2024”
The last year was a year of instability characterized by consumer price increases in Japan due to rising resource prices
and the rapid depreciation of yen, and by the slowdown ofoverseas economic activity due to the long-running Ukrainiancrisis and worldwide monetary tightening. In this management environment, Kawai Group’s consolidated performance
grew in the ﬁrst year of The Seventh Medium-Term Management Plan thanks to the sound worldwide sales of our mainstay keyboard musical instruments, but operating proﬁt declined due to changes in the currency exchange environment
and increases in material costs.
This April marked the beginning of the second year of thethree-year plan toward the 100th anniversary of our foundation. Setting out the long-term vision “Establishing a 100-year
brand,” and aspiring to continuous development for 100 years
and beyond, we strive to increase our corporate value andbrand quality and realize constant growth. This will beachieved by reinforcing the strength of each business, pursuing and increasing customer satisfaction and contributing to
the development of music culture, with the aim of becoming
the world’s leading brand in piano manufacturing, which has
been our core business since our foundation.

 Accomplishments in international competitions
In the piano category of the 8th Sendai International Music
Competition held in June last year, all the ﬁnalists chose ourfull concert piano SK-EX, and all of the top three winners used
SK-EX. It was a great honor that I will never forget. I would liketo thank all the contestants, including those who used our piano exclusively throughout the competition from the prelimi-

3

KAWAI Report 2023

nary to the ﬁnal. In the 5th Takamatsu International Piano
Competition, held last February, three contestants chose SKEX and won the second, third, and fourth prizes. I visited thecompetition hall and listened to their wonderful performances, and I was convinced anew that our piano is constantly
evolving.
Our sponsored 4th Shigeru Kawai International Piano
Competition will be held at the end of this July after postponements for various reasons, including the COVID-19 disease.
Through this competition, we would like to discover and foster
next-generation pianists, promote international exchange, andcontribute to the promotion and development of musical culture in the world.

 Sustainability initiatives
We believe that ESG (environment, society, and governance)
initiatives lead to the enhancement of corporate value throughthe solution of social issues. Pursuant to our sustainability
principles, we established a sustainability committee to promote sustainability activities across the group. We will address various issues, including reducing CO2 emissions as anenvironmental initiative, raising the percentage of women in
management positions as a diversity initiative, and enhancing
corporate governance.
Global warming is becoming increasingly grave year by
year, and it is a great risk to our company as we use woodmaterials that are susceptible to climate change. We disclose
information in accordance with the recommendations of the
TCFD (Task Force on Climate-related Financial Disclosures).
We will analyze and assess the impact of climate change on
our business activities and set ourselves goals for our climate
actions, in order to realize the transition to a decarbonized society and avoid the physical effects of global warming.
As always, we are incredibly grateful for your ongoingsupport.

Company history
1927 – 1951
1927

Koichi Kawai established the Kawai Musical Instruments
Research Laboratory.
Started manufacturing and selling pianos.

1929

Company name changed to Kawai Musical Instruments
Manufacturing Company.

1935

Corporate structure expanded to partnership basis.

1951

Company reorganized into a joint-stock company, Kawai
Musical Instruments Manufacturing Co., Ltd.

1930

1940

In 1927, Koichi Kawai established the Kawai MusicalInstruments Research Laboratory.

1955 – 1986
1950

1955

Shigeru Kawai appointed president.

1956

Kawai Music School established.

1961

Maisaka Factory completed as a main assembly plant.
Kawai Piano Technicians School (current Kawai Academy ofMusic) opened.

1963

Kawai America Corporation established in U.S.A.

1989 – 1998

1967

Physical training program, Kawai Gymnastic School
established.

1989

Hirotaka Kawai appointed president.

1975

Kawai Canada Music established in Winnipeg, Canada.

1994

Global Environment Committee, a company-wide organization
to promote environmental activities established.

1976

Kawai Deutschland GmbH established in Haan, West
Germany.

1996

Constituted the new Business Principal and Code of Conduct.

1979

Kawai Europa GmbH established.

1997

Hamamatsu office of Kawai Precision Metals Co., Ltd. receives
ISO9002 certification.
Ryuyo Facility receives ISO14001 certification which is thefirst in the instrument industry.

1980

Kawai Precision Metals Co., Ltd. of metal rolling established.
Ryuyo Factory established as grand pianos factory exclusively.

1981

Kawai Australia Pty. Ltd. established in Sydney, Australia.

1960

1970

1980

1990
1998

Kawai Hyper Wood Co., Ltd. established.

1985

Kawai Business Software Co., Ltd. established.

1986

Kawai UK Ltd. established in Bournemouth, U.K.

1999 – 2011

2000

2010

1999

“Shigeru Kawai” series of luxury grand piano instruments
launched.

2012 –

2001

Luxury full concert piano “SK-EX” introduced.
PT. Kawai Indonesia established in Indonesia.

2012

2002

Kawai Trading (Shanghai) Co. Ltd. established in Shanghai,
China.

2003

Hamamatsu office of Kawai Precision Metals Co., Ltd. received
ISO9001 certification.

2004

Kawai Precision Metals Co., Ltd. expanded the registration of
ISO9001 certification to the whole company.
Kawai Musical Instruments (Ningbo) Co., Ltd. established.

2005

Ryuyo Factory receives ISO9001 certification.

2007

First Kawai Music School in China established in Shanghai.
“Kawai Forest” the tree planting activities in Indonesia started.

2008

Kawai Musical Instruments (Ningbo) Co., Ltd. received
ISO9001 certification.
PT. Kawai Indonesia’s Factory No.3 received ISO9001
certification.

2009

Domestic piano manufacturing processes integrated into
Ryuyo Factory.
PT. Kawai Indonesia’s Factories No.1 and No.2 received
ISO9001 certification.

2011

PT. Kawai Music Indonesia established in Indonesia.
PT. Kawai Indonesia’s Factories No.1 and No.2 received
ISO14001 certification.

2013

Shanghai Kawai Emi Co., Ltd. received ISO9001 certification.

2014

Zen-On Music Company Limited acquired as subsidiarycompany.
Kawai Piano (Russia) LLC established in Moscow, Russia.

2015

2020

Shanghai Kawai Emi Co., Ltd. established in China.
Kawai Casting Co., Ltd. established in Hakui city, Ishikawa
prefecture.
Kawai Musical Instruments (Ningbo) Co., Ltd. received
ISO14001 certification.

2016

First overseas directly managed showroom opened in
Houston, Texas, U.S.A.
Kawai Precision Metals Co., Ltd. received ISO14001
certification.
“Kawai Forest” the tree planting activities for Tohoku
reconstruction support started in Higashi-matsushima city.
“Basic Agreement on Piano Tecnical Service Business”
concluded with China Musical Instrument Association.
Kawai Musical Instruments (China) Co., Ltd. established in
Beijing, China.
Kawai Hyper Wood Co., Ltd. received ISO14001 and ISO9001
certification.

2017

The 1st Shigeru Kawai International Piano Competition held.
Second overseas directly managed showroom opened in
Dallas, Texas, U.S.A.
Kawai Acoustic System Co., Ltd. made Declaration ofConformity with ISO14001.
PT. Kawai Indonesia’s Factory No.3 received ISO14001
certification.

2018

Kawai France SAS established in Courbevoie, France.
(Relocated to Paris in 2020).
Third overseas directly managed showroom opened in
Hamburg, Germany.

2019“Shigeru Kawai series” marked 20th anniversary.

2020

Ryuyo Factory marked 40th anniversary.
Shanghai Kawai Emi Co., Ltd. received ISO14001 certification.

In 1955, Shigeru Kawai was appointed president,
inheriting Koichi’s ambition.
KAWAI Report 2023

4

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Overview of The 7th Medium-Term Management Plan “Resonate 2024”
Long-term vision
Establishing a 100-year brandAspiring to continuous development for 100 years and beyond, we strive to increase our corporate value and brand quality andrealize constant growth by reinforcing the strength of each business, pursuing and increasing customer satisfaction and contributing to the development of music culture, with the aim of becoming the world’s No.1 brand of piano manufacturing, which is thecore business continuing since our foundation.

The 7th Medium-Term Management Plan “Resonate 2024” (FY2022 to FY2024)
2027 - the 100th anniversary

100-year brand½ At the time of the previousiMMedium-Term-Management-PlandiTMt Pl iin 20192019, we positioneditid th
the upcoming
i ththree years startingt ti ffrom A
April 2022 as “Acceleration of growth” which was changed to “Stable growth in new business environment” because our company proﬁts have increased substantially aheadof the original plan due to as a result of the effect of stay-at-home demand. We are also taking into consideration the uncertainty in demand for
keyboard musical instruments after stay-at-home demand declines, ongoing disruption in the supply chain, and other factors.

Basic principles
Build a rock-solid system to mark the centenary by growing steadily, compatible with the new business environment, with the aim ofestablishing a 100-year brand. Draw the future that KAWAI wishes to bring into reality by seeing “far beyond” the centenary.

Important strategies

 Evolution of contacts with customers
Implement promotional measures tailored to changes in customer purchasing behavior. Communicate the value of products and services to “as many target customers as possible” in a way that is “as easy to understand as possible” by fusing real and digital measures.

 Strengthening areas of growing demand
Broaden the lineup of product categories in particular whose demand has grown as a result of lifestyle changes (hybrid products anddigital pianos) and expand and reinforce their production system.

 Responding to increasing costs
Improve productivity and set appropriate prices in order to address rising costs, resulting from surges in the cost of materials, such as
semiconductors, and overseas transportation fees.

5

KAWAI Report 2023

Basic strategies (musical instruments and education related business)

 Enhancement of brand strength• Further enhancement of KAWAI brand in preparation for becoming “a 100-year brand”

 Reinforcement of sales ability• Musical instrument manufacturing and sales
Pursuing high-value-added products and increasing the share in each market• Musical education
Promotion and dissemination of the music culture aimed to send a brand message andcreate demand for keyboard instruments

 Reinforcement of product and service strength• Relentless pursuit of “customer satisfaction” applying bespoke techniques unique to a piano
manufacturer

 Strengthening of production power• Strengthening QCDF½ in the global production structure(efficiently produce quality products and supply them at the right time in a stable manner)½ Quality, Cost, Delivery, Flexibility

 Building up of organizational strength• Reviewing the organization from the perspective of functionality before establishing an organizational structure and carrying out personnel assignment, which are necessary for the expansion of the company

Basic strategies (Material processing business)

 Metal product business Acoustic product business• Increasing orders received for new in-vehicle products andbuilding up a structure for production increase• Horizontal expansion of existing products and order receiving
for new products• Acceleration of asset investments to increase productivity• Expanding application for individuals and developing a corporate user market• New product development in pursuit of comfortable acoustic space• Establishing a production structure to accommodate sales increase

Consolidated business result index[Unit: million yen]
Sales

Operating proﬁt

Recurring proﬁt

Current term net
proﬁt ½1

Operating proﬁt
ratio

ROE

Resultsfor FY March 2023

87,771

5,045

5,639

3,672

5.7%

10.3%

Plan
for FY March 2025 ½2

90,000

6,800

6,800

4,400

7.6%

10% or more

½1 Current term net proﬁt attributable to owners of parent company½2 These are planned ﬁgures as of March 2022. (Exchange rates assumed for plan: 115 JPY/US$, 125 JPY/euro, 18 JPY/yuan)

Return to shareholders
We have established a basic policy to ensure stable dividend payments to our shareholders while maintaining sufficient internal reserves
to stabilize our management foundation. This policy takes into account the business performance of the relevant ﬁscal year, the future
management environment, and our business development. We aim to ﬂexibly adjust our shareholder returns based on the nature of ourconsolidated business results.
[Notice regarding the future forecasts]
Information shown on this page includes forecasts based on the assumptions, outlook, and plans depicting the future as of March 25, 2022. Actual
measures taken and business results may differ from those aforementioned forecasts depending on uncertain factors, including the world economy,competitive conditions, technological innovation and ﬂuctuation of exchange rates.
KAWAI Report 2023

6

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Sustainability Principles
To realize our management philosophy to “become a favored company withh great creativity…,”
we endeavor to make sustainable developments as a corporation by ensu
uring harmony
between the global environment and society as well as healthy manage
ement
through our business activities to manufacture instruments of higher quality
and make contributions to the development of musical culture.
And at the same time, we are committed to contribute to realization of a sustainable society
in collaboration with our customers and all other stakeholders.

———————————————————————

Environment ————————————————————We are committed to the protection of global environment and resources from a global standpoint inour business ﬁelds, and the realization of true richness of mind and society.

——————————————————————————

Social —————————————————————————As a company in the “manufacturing industry of inspiration” that delivers moving experiences andsatisfaction to people through music, we aim to realize an enriched society with enjoyment, and build
good relationships with all our stakeholders.

————————————————————————

Governance —————————————————————

We strive to operate sound and transparent business management in compliance with laws and regulations and other rules in order to continuously enhance our corporate value.

Kawai Group has set its sustainability principles to devote efforts on enhancing the corporate value
in the medium- to long-term.

 Measures to contribute to SDGs
“The 2030 Agenda for Sustainable Development” was adopted in the “United Nations Sustainable Development Summit”
held in September 2015, and the SDGs (Sustainable Development Goals) stated in this agenda consist of 17 goals and 169
targets which are aimed to be accomplished by 2030.
In this report, pages that describe SDGs initiatives aremarked with the relevant SDGs icons.
Kawai Group is committed to taking additional actions toaccomplish all of its goals, including the relevant ones,
through its business activities.

7

KAWAI Report 2023

Addressing environmental and social issues
We address sustainability issues focusing on thosein relation to environment and society,and strive to ensure sustainable growth of the company.

Activities for global environment

 Tree planting projects in Japan and overseas• Planting seedlings in Indonesia (Since 2007; A total number of trees planted so far is 800,000 as of March 2023.)• Performing afforestation/raising to support regrowth of the forest for coastal disaster prevention in the northeastern districts(since 2015)

 Reduction of environmental load
• Prevention of global warming (reduction of CO2 emission)• Effective use of resources (reduction of waste)

Promotion of diversity• Striving to help realize work-life balance centering around the activity to promote female participation (Love it!)• Setting a basic policy and numerical targets to ensure diversity of human capital playing central roles

Numerical targets
Female managers ratio

12.5%

Female supervisors ratio

20.0%

Number of employees of foreign nationality

15

Number of mid-career-hired employees

50¼ To be accomplished by the end of March 2025

Musical culture promotion• Since 1971, we have invited various musicians to Japan and held Kawai Concerts over 2,000 times in many places throughout
Japan.
• Since 2017, we have been holding the Shigeru Kawai International Piano Competition for the purpose of fostering next generation pianists.

©D.Golik/The Fryderyk Chopin Institute

KAWAI Report 2023

8

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

SDGs related to each activity policy
Category

Indicatorz CO2 emissionz CO2 emissions intensity

Ez Environment management system introducedz Renewable energy introduced{ 26,453 tons-CO2{ Compared to 2021 -8.2%(234.2 kg-CO2/million yen)
{ Compared to 2021-8.8%(4,477.4 MJ/million yen)
{ Compared to 2021 -1.7%(23.8 kg/million yen){ 10 offices (5 in Japan and 5 overseas){ Solar power generation system introducedz Recycling ratioz Reuse ratio of pianos taken as a trade-in{ 90%{ 100%z Number of trees planted
z Afforestation area

{ Accumulating total number: 800,000{ Accumulating total area: 750 ha

z Information disclosure{ Information disclosure pursuant to the TCFD
recommendationsz Supporting musical organizations{ Support for The Frédéric Chopin Society ofJapan, The Leonid Kreutzer Memorial Society
and The Karol Szymanowski Society of Japan{ Holding Kawai Premium Concertsz Energy amount intensity

Environmental load reduction

Resource recycling

Environment

S

Afforestation/tree-planting

Climate change

Contribution to musical culture
promotion

FY 2022 resultsz Amount of waste intensity

z Presenting concertsz Holding recitals and competitions{ Holding KAWAI Music Competition,
overseas online competitions,
Kawai Cup National Rhythmic Gymnastics Competition,
Kawai Cup Artistic Gymnastics Competition,
Kawai Cup National Football Championshipz Providing training{ Training for newly hired, Annual training, Training
for new supervisors, Training for new managers

z Female managers ratio / Female supervisors ratioz Number of foreign national employees{ Managers: 6.7% / Supervisors: 14.2%{ 12

z Ratio of taking childcare leavez Ratio of taking spouse maternity leave{ Female: 100% / Male: 39%{ 53%

z Implementation of health promotion activities
z Evaluation of health and productivity managementby outside organization{ Holding physical function measuring meetings{ Health & Productivity Management
Outstanding Organization 2023

Contribution to societyz Participation and support for activities forsociety{ Participating in clean-up activities, Holding
factory tours, Cooperating on permanent
exhibitions in Hamamatsu Science Museum

Quality and customer
satisfactionz Holding quality meetingsz Quality management system introduced{ Monthly{ Nine facilities (four in Japan, ﬁve outside Japan)z Number of outside directors /Number of outside auditors{ Director: 2 /Auditor: 2z Risk Management Committee meetingz Holding safety conﬁrmation drills{ Periodical{ Periodicalz Compliance education{ Enlightening during corporate ethics month,
Issuing monthly corporate ethics news,
Training

Education/training

HC development

Diversity

Work-life balance
Health and productivity
management

SocialG
Corporate governance

Governance9

Risk management

Compliance

KAWAI Report 2023

Policy/activity

Related SDGs

Pages

z Implementing environment preservation activities based on the Kawai Earth Environment Charter{ Establishing Kawai Earth Environment Charter { Setting Global Environment CommitteeE

z Striving to increase the environmental management level{ Establishing Environmental Principles { Introducing environmental management systemz Implementing procurement of raw materials and resources that have less environmental load
{ Establishing Green Procurement Guidelines { Establishing Wood Materials Procurement Guidelines
z Implementing activities to reduce environmental load
{ Calculation of greenhouse gas emissions{ Taking action pursuant to the Energy Conservation Act

11-14{ Prevention of global warming
15

z Addressing afforestation/tree-planting activities{ Afforestation project in Indonesia{ Regrowth and preservation of the forest for coastal disaster prevention in disaster-hit areas{ Promotion of Ryuyo Factory greening activity

16

z Taking actions to combat climate change{ Establishment of Sustainability Committee { Scenario analysis of climate change risks and opportunities

17, 18z Supporting and fostering next generation pianists{ The 8th Sendai International Music Competition { The 4th Shigeru Kawai International Piano Competition
19, 20

Environmentz Implementing activities for resource recycling{ Reduction of industrial wastes { Recycling of wastes { Refurbishing of pianos taken as a trade-inSz Kawai’s contribution towards musical culture promotion{ Holding Kawai Premium Concerts { Supporting various musical organizationsz Develop and enrich personality through educational activities{ Kawai Music School { KAWAI Music Competitionz Promoting musical culture overseas{ Promoting musical education overseas { Kawai Music School Piano Competition

21-23

z Support for overall health promotion at every stage{ Gymnastics and Sports School { Sports community24

z Working on creating workplace environment where diversiﬁed talents can work actively{ Promotion of female participation { Development of global human capital{ Mid-career recruitment { Employment of people with disabilities

25

z Providing support for striking a balance between work and private life
{ Promotion of work-life balance { Promotion of taking childcare leave

26

z Promoting health of our employees and their families{ Promotion of health & productivity management27

z Working on activities to contribute to society for the beneﬁt of local community{ Participation in local activities { Collaboration with local communities { Factory tours

28

z Providing secure and safe services{ Promotion of quality and service improvement { Improvement of customer satisfaction

29

z Establishing a sound corporate management system{ Establishing Corporate Governance Basic Policy{ Establishing basic policy for building internal regulationsz Striving to secure transparency and impartiality in business management{ Establishment and maintenance of corporate governance systems { Setting Corporate Governance Committee

Socialz Valuing our human capital{ Training by class { Training by job { Self-development support

G
30-32

z Striving to make the Board of Directors more effective{ Securing the expertise and diversiﬁcation of directors { Board effectiveness assessment
33

z Striving to establish corporate ethics and comply with laws
{ Setting Corporate Ethics Committee { Provision of Corporate Ethics Hotline { Compliance education

34

Governancez Working on risk management level enhancement{ Setting Risk Management Committee { Development of BCP (Business Continuity Plan)

KAWAI Report 2023

10

About Kawai Group

Environment

Sustainability

Society

Governance

Information materials

Reduction of environmental load

Implementing environmental preservation activities
based on the Kawai Earth Environment Charter
Kawai Earth Environment Charter
Kawai Group understands that comprehensive and ongoing efforts are necessary to ensure that the wonderful global environment
should be handed down to future generations.
We have established our “Kawai Earth Environment Charter” in 1994 to pursue the right way for us to be able to earn trust andsympathy of society through provision of quality products of ours that are friendly to people and the global environment while striving topreserve the environment as a good corporate citizen of the world.

Aiming to become a company friendly to the globe and people
 Basic Philosophy
Setting a motto of “manufacturing industry of inspiration”, we, as a global citizen, protect the environment and resources as wellas endeavor to realize true richness of mind and society. We are also committed to behave from a global standpoint and become acompany friendly to the global environment.
Create great humanity and a comfortable living environment
Create excellent research, technology and products
Create environment-friendly production, distribution and sales activities

 Code of Conduct
1. We establish good relationships between people and sound in various business ﬁelds in the music culture industry.
2. We evaluate the impact on the environment using a scientiﬁc method in various aspects and take necessary countermeasures
to preserve the environment and protect people’s health.
3. We promote effective use of resources and energy conservation.
4. We aim to recycle and reduce the amount of waste generated from the stage of R&D and design of products.
5. In response to requests in and outside Japan with regard to the environmental preservation activities, we will be actively involved
for the purpose of living in harmony with local communities in the implementation of measures against environmental protection.

Environmental management organization
Global Environment Committee was established in 1994 as an environmental management organization led by the officer in charge ofenvironmental management serving as chairman of the committee. The committee has since been engaged in activities by setting out
the company-wide environmental principles and goals in relation to environmental preservation.
In addition, specialized working group meetings are held every other month and the progress of environmental management goals
is reported on each website and we also exchange information on our activities.

President

Global Environment Committee
Chairman: Officer in charge ofenvironmental management

specialized working group

CS Environment Section,
Corporate Planning Office

Each website
environmental management organization

11

KAWAI Report 2023

Reduction of environmental load

Striving to increase the environmental management level
Environmental Principles
Kawai Global Environment Committee established “Environmental Principles” based on the “Kawai Earth Environment Charter”.
The whole company is committed to the promotion of <discovery of useful environmental aspects>, <prevention of global warming>,<cyclic use of resources>,<effective use of resources> and <green procurement>.

We implement our business activities in musical instruments manufacturing and various other businesses, taking into accounttheir impact on the environment, and we are committed to ongoing improvements for preservation of the global environment andprevention of pollution.
1. We set our objectives to carry out reduction of environmental load and discovery of useful environmental aspects using
the environmental management system. At the same time
we review the objectives on a regular basis according to the
expectation from society and appropriate scale.
1) We work on “provision of products and services” and “development of technology”, taking into account the expectation from society and environmental load.
2) We address “prevention of global warming”, “cyclic use ofresources” and “effective use of resources” in many different divisions including development, production, distribution, sales and service.
2. We procure and purchase materials, parts and products thathave less environmental load by priority whenever such resources are required. (green procurement)

3. We comply with laws and regulations in relation to the environment and set self-standards as well, taking into consideration other requirements to improve the environmental
management to a higher level.
4. We raise all employees’ awareness through the environmental education and enlighten and support them so that each
employee can have a wider view on society and be involved involuntary contributions in day-to-day business and daily life.
5. To achieve these Environmental Principles, we establish anenvironmental management organization led by the officer
in charge of environmental management serving as a general manager, put its operation system in place, and clearlydeﬁne the goal, plan, measures and responsibilities in theorganization in order to perform environmental preservation activities.

Environmental management system
Kawai Group is promoting introduction of the environmental management system ISO14001.
Currently in Japan, Ryuyo Factory, Kawai Hyper Wood Co., Ltd. and Kawai Precision Metals
Co., Ltd. have received the ISO14001 certiﬁcation and Kawai Acoustic System Co., Ltd has
made self-declaration of conformity with the standards. In overseas countries, PT. Kawai
Indonesia Plants No.1, No.2 and No.3, Shanghai Kawai Emi Co., Ltd. and Kawai Musical Instruments (Ningbo) Co., Ltd. have received the certiﬁcation.
These facilities mentioned above conduct an internal audit on a regular basis to checkthe state of progress and for any items to be remedied in order to ensure the operation of
PDCA cycle (repeating a cycle of Plan, Do, Check and Action) for ongoing improvement whichis required in the environmental management system.
In addition, those facilities that have the ISO14001 certiﬁcation are subject to an annual
surveillance as well as a regular renewal evaluation conducted by an external certifying
organization to check whether the environmental management system in the facilities functions effectively.
We will continuously address the Group-wide introduction of an environmental management system to further reduce the environmental load.

PLAN

DO

ACTION

CHECK

List of facilities which introduced the environment management system
Year of introduction

Facility

1997

Ryuyo Factory (received ISO14001 certiﬁcation)

2011

PT. Kawai Indonesia’s Factories No.1 and No.2 (received ISO14001 certiﬁcation)

2012

Kawai Musical Instruments (Ningbo) Co., Ltd. (received ISO14001 certiﬁcation)

2015

Kawai Precision Metals Co., Ltd. (received ISO14001 Certiﬁcation)

2016

Kawai Hyper Wood Co., Ltd. (received ISO14001 Certiﬁcation)

2017

Kawai Acoustic System Co., Ltd. (made Declaration of Conformity with ISO14001)
PT. Kawai Indonesia’s Factory No.3 (received ISO14001 certiﬁcation)

2020

Shanghai Kawai Emi Co., Ltd. (received ISO14001 certiﬁcation)

KAWAI Report 2023

12

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Reduction of environmental load

Implementing procurement of raw materials andresources that have less environmental load
Green Procurement Guideline
Kawai Group is actively promoting the Group-wide implementation of green procurement in which those materials, parts and productsthat have less environmental load should be procured or purchased by priority whenever such resources are required in accordance withthe “Environmental Principles” established by Kawai Global Environment Committee.
We implement green procurement in accordance with the basic principle of green purchasing method and green purchasing network (GPN) to decrease the total environmental load, and engage actively and continuously in contributions to preservation of biodiversity and establishing a recycle-based society.

 Basic Principles
1. Fully reviewing the necessity of procurement,
2. taking into consideration the environmental aspect in addition to quality and price, those products and services that have lesser
environmental load should be purchased
3. by priority from such suppliers that are making efforts to reduce environmental load.

 Scope of Application
All goods and services procured by Kawai Group, including office supplies, parts, raw materials and equipments.
• General goods used in office, etc. (paper, stationery, computers and other devices, workwear, printed matters, etc.)• Parts and raw materials (including packing materials and accessories) used for Kawai products (including OEM)
• Services, etc. (communications and other services)

In addition to compliance with laws, standards set by related organizations and internal standards which are essential, it is also prescribed as the procurement standards that environment-friendly measures should be taken in all phases from natural resources preservation to resource savings, energy conservation, disposal and recycling.
Items taken into consideration for selecting suppliers are also set out, including state of environmental management, measures ofresource savings and energy conservation, and disclosure of environmental information. All our partner companies are requested by apurchasing division to follow these standards.
X The Kawai Green Procurement Guideline (Japanese text)
https://www2.kawai.co.jp/company/activity/pdf/kg_20040130.pdf

Wood Materials Procurement Guideline
We understand that wood materials are important for manufacturing pianos and other musical instruments. We stipulated the Kawai
principles on sustainable wood materials procurement.

 Basic Philosophy
Kawai implements green procurement of wood in which we value and take good care of trees and use wood materials effectively
that are sustainable resources we receive from protected and managed forests.

 Basic Principles
1. Kawai procures wood materials by priority that are produced in the forests under the sustainable management.
2. In wood materials procurement, Kawai takes into account the environmental management measures to be taken and compliancewith related laws to preserve, protect and regrow forests.
3. Kawai promotes appropriate and efficient utilization of procured wood materials.
4. Kawai procures products manufactured by using recycled materials by priority.
5. Kawai procures forest products, etc. that are certiﬁed by the forest certiﬁcation system by priority.

13

KAWAI Report 2023

Reduction of environmental load

Implementing environmental load reduction
activities
Calculation of greenhouse gas emissions pursuant to the GHG Protocol
Kawai has a long history of calculating and announcing the amount of
CO2 emissions from its business operations, both in and outside Japan.
In the current ﬁscal year, Kawai also began to determine theamount of greenhouse gas emissions in each GHG Protocol scope(GHG emissions). Accordingly, Kawai recalculated its emissions inprior years by the same methodology.
This calculation covers our domestic facilities and overseas producing facilities, which account for more than 95% of total emissions
from the entire group.

ton-CO2

Scope 1

Scope 235,00030,00025,00020,00015,00010,000
5,000
0
2016

2017

2018

2019

2020

2021

FY

Measures to comply with the energy conservation law and reduce environmental load
The Energy Conservation Act (or the Act on the Rational Use of Energy) requires business operators who use a certain amount of energy or more (speciﬁed operators) to rationalize their energy use.
In Kawai Group, Kawai Musical Instruments ManufacturingCo., Ltd., Kawai Precision Metals Co., Ltd. and Kawai Casting Co.,
Ltd. are the speciﬁed operators, and Ryuyo Factory, the Headquarters/Hamamatsu factory of Kawai Precision Metals Co., Ltd.
and Kawai Casting Co., Ltd. are speciﬁed as Class 2 energy management factories.
In FY2022, Kawai Musical Instruments Manufacturing Co., Ltd.
received for the seventh year in a row and Kawai Precision Metals
Co., Ltd. for the third year in a row, Class S½ evaluation as an excellent operator according to the operator evaluation system by classiﬁcation that is provided for in the Energy Conservation Act.
FYThe Global Environment Committee worked on reducing theamount of domestic CO2 emissions and waste per unit of sales forsuch purposes as “compliance with the Energy Conservation Act,”“prevention of global warming,” and “resources recycling and effective use of resources.” Its goal for three years from FY2022 is
to achieve a 1% reduction every year from the level of FY2021 as
the reference.
In FY2022, the amount of CO2 emissions per unit of sales was
reduced by 8.2% from the FY2021 level and met the goal, whereas
the goal for the amount of waste per unit of sales was not achieved
because it increased by 1.7% due to increased production.
½ Class of operator who achieved the goal of reducing ﬁve-year averageof energy consumption intensity by 1% or more year on year

2018

2019

2020

CO2 emissions intensity(kg-CO2/million yen)

331.1

305.7

Amount of waste intensity(kg/million yen)

28.4
5,890.9

Index

Energy amount intensity(MJ/million yen) ¾ Reference value

2021

Increase/decrease(Reference)

2022

294.6

255.2

234.2

−8.2%

26.2

25.0

23.4

23.8

1.7%

5,654.6

5,635.7

4,907.3

4,477.4−8.8%

Evaluation: Achieved

Evaluation—: Not achieved

Global warming prevention activities
Kawai Group regards the initiatives of global warming prevention
as important item of its environmental management and theGroup is promoting the reduction of CO2 emissions caused by using energy through implementation of the energy conservation
measures described below.
z Introducing plant facilities with due considerations to energy
conservationz Replacing existing lights with LED lighting systems
z Introduction of renewable energyz Performing an energy conservation evaluation regularly with
an electric companyz Launching “Cool Biz” and “Warm Biz” campaigns in offices

Ryuyo Factory, where a solar power generation system was introduced

 Solar power generation system introduced
In December 2022, we introduced a solar power generation system into
Ryuyo Factory, where grand pianos and upright pianos are manufactured.
This solar equipment can generate approximately 781 MWh per year,
which covers approximately 18% of the factory’s power consumption. By
this, CO2 emissions will be reduced by approximately 245 tons per year.

Kawai introduces solar power generation system
at Ryuyo piano factory. (News release)https://www.kawai-global.com/news/20231223/

KAWAI Report 2023

14

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Resources recycling

Implementing resources recycling activities
Reduction of industrial waste emissions
Kawai Group’s (domestic) amount of waste once increased to3,203 tons because a large amount of slag was generated as industrial waste from cast production by Kawai Casting Co., Ltd.
engaged in piano frame manufacturing which came on board as amember of the Group in FY2012. Since then, Kawai Casting Co.,
Ltd. has been committed to reducing waste emissions by taking
measures to streamline its production lines and improve production efficiency.
In FY2022, the total amount of industrial waste generated
within Japan increased by 4.3% to 2,088 tons from the level of theprevious year (reference year) due to production volume increase,
but it was a 34.8% reduction as compared with the level of FY2012.

Amount of industrial waste
Kawai Casting only

ton

Kawai Group except Kawai Casting

2,500
2,000
1,500
1,000
500
0

2018

2019

2020

2021

2022 FY

Resources recycling activity
Although the resources recycling ratio of Kawai Casting Co., Ltd. was low at 39% in FY2012, the measure of reusing slag as roadbed
material implemented by the company was effective to improve its recycling ratio to 79% in FY2022. Accordingly, Kawai Group’s overall
domestic waste recycling ratio also increased from 57% in FY2012 to 90% in FY2022.
Ryuyo Factory is the largest industry waste generator in the Kawai Group, but it is taking various measures to achieve a 100% recycling ratio. These measures include reusing waste such as wood chippings and wood ﬂour as materials for papermaking, board, compost
and fuel; reusing felt waste for compost; and solidifying coating waste into harmless stone-like material.
Kawai Group’s recycling ratio

Kawai Casting’s recycling ratio

Ryuyo Factory’s recycling ratio

90%

79%

100%

FY2022

FY202257%

39%

FY201299%

FY2012FY2012

Recycle and reuse activities

Reproduction of piano by manufacturer

Based on the concept of the extended producer responsibility topromote creation of a recycle-based society, our Group is implementing reproduction and reuse of pianos. A group in the Domestic Business Division that is in charge of second-hand pianos iscurrently responsible for this project operated in Ryuyo Factory.
Those pianos taken as a trade-in are reproduced and delivered to
new customers.
In FY2022, about 700 units of piano were reproduced or reused in Japan, 28.5% of which were exported and are currently
used in many places in the world.

There is speciﬁc workthat can be done properly
only by the manufacturer.
Experienced technicians
who are experts and wellversed in piano making
are able to fully overhaul
old pianos. We reproduce
pianos according to theneeds of customers from exchanging strings, hammers and actions to overall coating.
Reproduction of pianos is a concerted work performed bymany technicians with experience in piano manufacturing formany years who are experts with skills in speciﬁc ﬁelds such as
coating, woodworking, and tuning. The ﬁnished quality of reproduced pianos are well received by many customers. Furthermore,another advantage for customers of Kawai pianos is that the piano can be repaired or reproduced by using its original parts.

Reproduction and reuse of pianos taken as a trade-in (FY2022)

Exported

Disposed
0.0%

28.5%

Repaired and soldby Ryuyo Factory 9.9%15FY2022

KAWAI Report 2023

Repaired and soldby sales officein Japan 61.6%

Afforestation/tree planting

Implementing afforestation/tree planting projects“Kawai Forest” the tree planting activities in Indonesia

09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22

20

07

20

20

08

Accumulating total number of trees planted
A large amount of wood materials are used for piano. Thanks to1000 plantsha
Accumulating total area of afforestation
900
900
the contribution of voluntary employees, Kawai Group, which handles wood materials, established Kawai Forest Project (Chairman
800
800
Hirotaka Kawai) in 2007 as a commemorative project to celebrate
700
700
the 80th anniversary of its foundation.
600
600
Pursuant to the basic philosophy of the Kawai Earth Environ500
500
ment Charter, the Forest Project engages in activities of planting
400
400
trees such as falcata, teak and mahogany in Indonesia where we
300
300
have our overseas production facility in collaboration with PT.
200
200
Kawai Indonesia and the Indonesian forest public corporation for
100
100
the purpose of ensuring CO2 absorbing sources, regeneration of00
forests on deforested areas and securing sustainable wood reFY
sources. In 2017, the project also started working on the regeneration of mangrove forests that have been destroyed at a rapid pace for purposes including aquaculture.
These activities are favorably received by Karawang Regency and West Java Province of Indonesia, and CSR awards have been
granted every year since 2018.
In FY2022, we planted trees in Karawang and Purwakarta Regency, and the cumulative total planted area reached approximately 750
ha and the cumulative total number of planted trees approximately 800,000 trees. Most of those trees have been growing quickly without
problem and when the trees continue to grow enough to become “Kawai Forest”, it will have an effect of absorbing CO2 of about 11,500
tons annually, and it is estimated that about 40% of a total CO2 emission generated by Kawai Group will be absorbed.

Karawang

Purwakarta“Kawai Forest” afforestation areas in Indonesia

Tree planting in Karawang

Support for regrowth of the forest for coastal
disaster prevention in disaster-hit areas
We participated in “Midori no Kizuna” regeneration project from 2015
to 2019 and engaged in afforestation in the Tohoku region.
Japanese black pine trees that we planted in Yamoto, Higashimatsushima City, Miyagi Prefecture in 2015 are growing steadily,and in November 2022, Kawai volunteers weeded the location withthe cooperation of the Ishinomaki Forestry Cooperative.
We will continue to be involved in the regeneration and growing of the forests for coastal disaster prevention, taking care of
the growing conditions of the trees.

Award from West Java Province“Workshop in the Woods” Ryuyo Factory
In 2020, Ryuyo Factory commemorated the 40th anniversary of
its establishment.
The Factory obtained ISO14001 certiﬁcate in 1997, which
was the ﬁrst in the piano industry. The factory sets a goal in its
environmental policy to expand green areas at the factory, which
the factory has been promoting since its foundation. At present,
an area of about 50% of the premises has been afforested with
about 30,000 trees planted by the employees at the factory whichhave fully grown over the years, allowing the factory truly become
a “Workshop in the Woods”.

KAWAI Report 2023

16

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Climate change

Taking actions to combat climate change
Information disclosure pursuant to the TCFD¿ recommendations“In order to make the Corporation more creative and likeable ...,” Kawai Group is vigorously committed to protecting the global environment and resources and realizing true richness of mind and society. Environmental issues related to the Earth, such as climate change
and the loss of biodiversity, among other environmental issues, are becoming increasingly grave year by year, and we understand that
greater importance is being placed on business operators’ roles. We disclose information in accordance with the TCFD guidelines, believing that the identiﬁcation of climate change risks and opportunities using the TCFD framework and the development and integration of
combat measures into our business strategies will contribute to our sustainable growth and enhance our corporate value. We will continue with information disclosure pursuant to the TCFD framework and contribute to the goal of carbon neutrality in 2050 by mitigatingclimate change through reduction of CO2 emmissions and waste generation, and planting activities.
½ TCFD is an abbreviation of Task Force on Climate-related Financial Disclosures and was established by the FSB (Financial Stability Board) to disclose
climate-related information and examine what actions ﬁnancial institutions should take to combat climate change.

 GovernanceOne of Kawai Group’s perceived management issues is sustainability. Kawai Group aims to contribute to solving various issues
related to sustainable business management, including climatechange (sustainability issues). Important sustainability matters
are to be deliberated upon by the Sustainability Committee andreported periodically (at least once a year) to the Board of Directors. The Board of Directors will discuss how to address Kawai
Group’s sustainability issues and action plans, and give directions and supervision. Issues related to climate change, among
others, are handled by one of the Sustainability Committee’s subordinate organizations, the environmental working group. We will
establish a system under which speciﬁc activities by business administration departments and group companies will be deﬁned andimplemented pursuant to committee decisions so that board decisions will be reﬂected appropriately in the organization.

Board of Directors
ReportSupervision

Sustainability Committee

Sustainability promotion working group

E

Environmental working group

S

Society working group

G

Governance working group

ReportDirection

ReportSupervision

Risk Management
Committee
Committees for
speciﬁc types of risk
Global Environment
Committee
Central Disaster
Prevention Committee

ReportDirection

Business administration departments and group companies

 Risk management
Kawai Group’s management systems and processes for addressing various issues related to sustainability, including climate change, areto be generally supervised by the Sustainability Committee. For risk identiﬁcation purposes, the Sustainability Committee identiﬁes andassesses risks of great importance based on reports from various divisions, social trends and third-party requests related to sustainability, and ﬁxes plans and goals related to sustainability activities. Sustainability activities are promoted in accordance with these plans andgoals, and speciﬁc activities by business administration departments and group companies are directed and monitored so that the risks
will be prevented and their impact will be mitigated. The risks identiﬁed through these processes are shared with the Risk Management
Committee. The Risk Management Committee takes short-term and immediate actions in the light of their urgency and so on, and if
necessary, performs individual risk management.

 Strategies
Kawai Group examines and assesses the impact of climate change upon its business management through scenario analysis in order toensure that actions to address important issues are reﬂected in its management strategies. In our study and analysis of the impact ofclimate change and actions to combat it, we study risks and opportunities related to its impact on Kawai Group in 2030 and 2050, basedon the following hypotheses about the world’s future and the scenarios reported by the Intergovernmental Panel on Climate Change(IPCC) and the International Energy Agency (IEA).

17

4˚C scenario

1.5˚C scenario

A scenario assuming that the world’s average temperature around theend of the 21st century would be 4˚C higher than in the Industrial
Revolution. Climate change policy measures would not be strengthened
from those in force as of 2021 and transition to decarbonization would
not be promoted, with the result that the impact of global warming
would increase, so would the scale and frequency of disasters.

A scenario assuming that the world’s average temperature around theend of the 21st century would be less than 2˚C higher than in the
Industrial Revolution. Proactive environmental policy measures would
be promoted to realize carbon neutrality, with the result that the
impact of transition risk would increase.

(Reference scenario)
IPCC:RCP8.5
IEA2022:STEPS(Reference scenario)
IPCC:RCP2.6
IEA2022:APS / NZE2050

KAWAI Report 2023

In the 4˚C scenario, we assume that extreme weather conditions would be aggravated to a catastrophic level where our facilities
would be more likely to suffer direct damage, suppliers would be damaged and the supply chain would be disrupted, and wood materials
resources, which are important for our products, would decrease. Given constantly expanding demand for fossil fuel, other concerns
might include higher transportation costs due to the soaring prices of raw materials derived from petroleum, especially increased expenditure and losses on the part of upstream players in the supply chain. In the meantime, we recognize that greater demand frompeople spending more time at home due to a higher average temperature might be a driving factor of demand for musical instrument
products which people can enjoy indoors.
In the 1.5˚C scenario, we assume that the introduction of carbon pricing for decarbonization and changeover to electric power derived from renewable energy might increase our operation costs and affect our ﬁnancial conditions. We also assume that these effects
would also be experienced by our suppliers, and there is concern that the prices of products and raw materials, such as metal materials,
would soar. In the meantime, we assume that it would be an opportunity for us to stimulate eagerness to buy among customers withgreater ethical commitment through the development of products with limited environmental load, and we believe that enhancing theenvironmental performance of our products will not only contribute to society but also bring us business opportunities.
Impact in 2030
Item

Assessment
4˚C
scenario

1.5˚C
scenario

Present initiatives and policies

Impact of transition to decarbonized society
Physical impact of global
warming

FactorEvent

Type ofimpactCarbon pricing• Increased business operation costs due to theintroduction of a carbon tax• Increased expenditure due to the reduction ofgreenhouse gas emissions

Risk

Small

Large

• Set and work toward CO2 emissions reduction
goals.
• Use renewable energy (solar panels) in
manufacturing equipment.

Change inpower price• Higher power prices due to changeover to power
generated with renewable energy etc.
• Increased transportation costs due to changes indemand for fossil fuel

Risk

MediumMedium• Use periodical energy conservation diagnosis
services from power companies.
• Replace lighting apparatus with LED types.
• Introduce energy-saving factory equipment.

Change inraw material price• Wood material price increases due to forest
resource regulations and behavioral change• Metal price increases due to the price pass-throughof the impact of transition to decarbonization etc.

Risk

Small

Large

• Establish and apply a Kawai green procurement
guideline.
• Reduce waste and raise the recycling rate.

Change incustomer behavior• Greater need for environmental requirements
fulﬁllment due to the expansion of orientation
toward ethical consumption

Opportunity

Small

Medium• Develop and apply environmental policies pursuant
to the Kawai Earth Environment Charter.
• Consider products using recycled materials ﬁrst in
procurement operations.

Catastrophic disasterdue to extreme
weather conditions• Loss from damage to business facilities(business places, offices, research facilities)• Supply chain disruption• Damage to forests due to region-speciﬁc risks
such as ﬂooding, drought and forest ﬁre, andtheir impact on the procurement of raw woodmaterials

Risk

Large

Large

• Develop and strengthen BCP.
• Establish a central disaster prevention measurescommittee.

Rise in averagetemperature• Poor wood growth in speciﬁc regions and their
quality deterioration• Greater need for indoor entertainment due tooutdoor activity restriction and demand frompeople spending more time at home

Risk
Opportunity

Medium• Tree planting activities by Kawai Forest Project• Develop and apply a Kawai wood materials
procurement guideline.
• Diffuse musical education overseas online andotherwise.

Large<Impact assessment methodology>
Large: 3% or more of the operating proﬁt is affected. Medium: Less than 3% of the operating proﬁt is affected. Small: Impact on the operating proﬁt is negligible or there is no impact.
½ For items that are difficult to assess in quantitative terms, we perform qualitative impact scale analysis based on the threshold values speciﬁed in the impact assessment
methodology and on reference parameters and literature.

Based on these results, we will enhance our resilience in relation to the impact of climate change and, at the same time, continue tostrengthen and promote our initiatives toward the goal of business management decarbonization and carbon neutrality. Our present
initiatives include establishing the Kawai Earth Environment Charter, working toward the goal of sustainable resources procurement
speciﬁed in the Kawai Green Procurement Guideline and the Kawai Wood Materials Procurement Guideline, both of which are already inforce. They also include setting CO2 emissions and waste reduction goals, and monitoring progress toward these goals.

 Indicators and goals
As part of its commitment to SDGs, Kawai Group uses the reduction of the amount of CO2
emissions per million yen of sales as one of its business management goals, and keeps trackof progress toward this goal as an indicator for assessing the status of its climate change
initiatives. One of our previous initiatives was the three-year plan from FY2019 to FY2021 forreducing the amount of emissions per unit of sales by 1% year on year from the level of
FY2018 as the reference. We introduced energy-saving factory equipment, replaced lighting
apparatus with LED types, considered using renewable energy, and promoted the Cool Biz andWarm Biz campaigns, with the result that the amount in FY2021 was 15.8% lower than in
FY2018, meaning that the goal was achieved. We will set and disclose medium-term and longterm goals in order to attain carbon neutrality by 2050. The actual amount of CO2 emissions is
described in the table.

Scope of aggregation

Actual emissions(ton-CO2)
FY2021

Scope1
Comprising

6,131.4
Domestic
facilities

5,688.3

Overseas
facilities

443.1

Scope2Comprising

Scope1+2

22,623.4
Domestic
facilities

16,442.6

Overseas
facilities

6,180.9
28,754.8

KAWAI Report 2023

18

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Contributions to culture promotion

Supporting and fostering next generation pianists
The 8th Sendai International Music Competition
The 8th Sendai International Music Competition was held in Sendai City, Miyagi Prefecture from June 11th until June 26th, 2022. In the
piano category, the top three winners selected Kawai’s SK-EX full concert grand piano throughout the competition, from the preliminary
to the ﬁnal, with Mr. Luo Jiaqing, Mr. Jonas Aumiller, and Ms. Shion Ota receiving the ﬁrst, second, and third place prizes respectively.
This competition was established in 2001 by the Sendai City government to commemorate the four hundredth anniversary of thestart of the Edo period and has since been held every three years. No parallels can be found anywhere in the world for this competition
as its main pieces are basically concertos. Our piano has been an official one since the ﬁrst competition.

Second place winner Mr. Jonas Aumiller

First place winner Mr. Luo Jiaqing

Third place winner Ms. Shion Ota

Above photographs reproduced withpermission from the Sendai International
Music Competition Secretariat.

The 4th Shigeru Kawai International Piano Competition
Shigeru Kawai International Piano Competition was created in2017, commemorating the 90th anniversary of the company’s
foundation, for the purpose of discovering and fostering next generation pianists, promotion of international exchange and the development of musical culture in the world.
The 4th competition originally scheduled for 2022 was postponed temporarily after the preliminaries were conducted fromFebruary to March, 2022, due to changes in the international situation. A decision has been made to resume the competition in
2023.
Many concerts and competitions have been canceled or postponed because of the spread of the COVID-19 disease. We are taking steps to ensure that this competition will be a good opportunity for next-generation pianists to express themselves.

Lottery for ﬁxing the order of appearance

July 28, 2023 (Friday)

First elimination round

From July 29 (Saturday) to July 31 (Monday), 2023

Semiﬁnal

August 1 (Tuesday) and August 2 (Wednesday), 2023

Kawai Omotesando Concert Salon “Pause”

Final

August 5, 2023 (Saturday)

Shibuya Cultural Center Owada “Sakura Hall”

Concert by the prize winners

August 6, 2023 (Sunday)

Kawai Omotesando Concert Salon “Pause”

X The 4th Shigeru Kawai International Piano Competition
https://skipc.jp/en/

19

KAWAI Report 2023

Contributions to culture promotion

Kawai’s contribution towards musical culture
promotion
Kawai Music Association
Kawai Music Association was established in 1963, aiming at enhancing musical culture in Japan. The association plans and implements
wide-ranging events such as Kawai Concerts, recitals and open seminars by outstanding Japanese musicians. It also invites prominent
players and educators from overseas.
The association will also support numerous musical and cultural activities to contribute towards enriching society through music.
Under its motto “Music for All”, the association will continue to deliver high quality music through its activities.
X Kawai Music Association (Japanese text)
http://kawai-kma.com/

Kawai Premium Concert
On November 27, 2022 (Sunday), we held “Kawai Premium Concert in Toranomon —Performances by contestants of the 8th Sendai International Music Competition—” in
BELLESALLE Toranomon Hall. We invited four pianists who participated in the piano category of the 8th Sendai International Music Competition.
Prize winners Ms. Shion Ota, and Ms. Asaki Iwai, Ms. Yuna Tamogami and Mr. Takumi
Kurosaki played pieces of their own choice on Kawai full concert piano “SK-EX,” touching
the hearts of the audience.

Ms. Shion Ota

Ms. Asaki Iwai

Ms. Yuna Tamogami

Mr. Takumi Kurosaki

Supporting various musical organizations

 Support for The Frédéric Chopin Society of Japan

 Support for The Leonid Kreutzer Memorial Society

The Frédéric Chopin Society of Japan was established as the fruitof interchange with the Fryderyk Chopin Society in Poland to celebrate the composer’s 150th anniversary of birth in August 1960.
Mr. Shigeru Kawai (then President of Kawai) became the Honorary President and the society set the administrative office within
the premises of Kawai, providing various support including for theInternational Chopin Piano Competition.

Professor Leonid Kreutzer was active in Germany and Japan. The
Leonid Kreutzer Memorial Society was established by his pupils
and concerned parties to commemorate his virtue in March 1962.
The society established “The Kreutzer Award” in 1971 to commemorate Professor Kreutzer’s work for the Japanese music circle. The society has been organizing annual recitals with The
Kreutzer Award winners since 1976.

X The Frédéric Chopin Society of Japan (Japanese text)
http://chopin-society-japan.com/

X Leonid Kreutzer Memorial Society (Japanese text)
http://kawai-kmf.com/kreutzer/

 Support for The Karol Szymanowski Society of JapanThe Karol Szymanowski Society of Japan was established in 1981, the year before the composer’s 100th anniversary of birth. The society’s activities are focused on introducing his works widely in Japan that express profound understanding of Polish national characteristics and local customs. The society also organizes concerts in audition format and open seminars.
X Karol Szymanowski Society of Japan (Japanese text)
http://kawai-kmf.com/szymanowski/

KAWAI Report 2023

20

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Education/training

Develop and enrich personality through educational activities
Kawai Music School
Kawai is developing wide-ranging educational activities for children, respecting their individual interests to help them learn how to express themselves naturally.

 Education philosophy
The Kawai Music School believes that pupils “do not learnmusic” but “learn through music”. It endeavours to provide
courses where the pupils can develop and enrich their personality through activities to express themselves, rather thanbeing taught techniques to simply improve playing skills.

Kawai will bring out irreplaceable personality fromeach pupil through music, and create the joy ofcommunicating and harmonizing with others while
respecting each other’s personality.

 Kawai Music School Kawai Music School for adults

Kawai Music School started in 1956
(Showa 31) with the aim of disseminating the music culture. We have deployed
more than 4,000 schools throughout Japan, providing a wide variety of courses
developed through Kawai’s experiencesin music education, which are helping a
lot of pupils take interest in music anddevelop their potential.

We have various courses to learn music
ranging from piano, vocal to string andwind instruments in response to increasing needs of middle and aged people for life-long learning and leisure activities. These courses attract lots ofstudents since they can learn to play any
music pieces they like according to individual’s level and pace.

 Kawai English School Drawing and Modelling SchoolStudents can learn practical English
from instructors of great personality
while enjoying songs and games by following the curriculum of IMA (Imagination, Music, Action) method developed by
Kawai. The school also encourages students to understand the culture behindthe language to become a true cosmopolitan.

The school develops and enriches children’s originality and creativity while respecting different abilities of individuals
and the learning process instead of giving standardized instructions. Students
engage themselves freely in creative activities using a variety of materials suchas paper, clay and pieces of wood that is
unique to Kawai.
X Kawai Music School (Japanese text)
https://music.kawai.jp/

KAWAI Music Competition
KAWAI Music Competition started in 1968 under the philosophy to “positively
appreciate spontaneous musical expression rather than technical superiority.”
The Competition consists of three categories: “Kawai Piano Competition”,“Kawai Piano Competition for Children”, and “Kawai Vocal Competition for Children”. It has been fostering many pianists for over a half-century.
In August 2022, the 55th Kawai National Piano Competition (duet and solo
categories) was held. Due to the spread of the COVID-19 disease, we had tocancel this competition two years ago and had to make it an online event lastyear. However, this year, we were able to hold it in the Concert Hall of ACT CITY
Hamamatsu, with effective disease control measures in place. The hall was
ﬁlled with music played by next-generation pianists who continued training
every day.
Grand prize winners in the solo category are granted various educational opportunities, including special lessons given by prominent
pianists in Japan and other countries or music college professors as a way of support for their further growth as musicians.

21

KAWAI Report 2023

Education/training

Promoting musical education overseas
Operating music schools overseas
Kawai operates music schools not only in Japan, but also throughout other Asian countries, especially Indonesia. In China, Kawai is
actively promoting musical culture by partnering with the Soong
Ching Ling Foundation on the development of music schools. We
also promote the development of local teachers by holding musiceducation seminars and training programs for instructors.

Overseas music schools not only provide ordinary lessons, butalso hold grade tests for proﬁciency evaluation and various
events. They endeavor to promote musical education through various events, including competitions designed for particular ages, experience levels and objectives, concerts to demonstrate the beneﬁts
of lessons, pre-enrollment lesson trials, and brieﬁngs for parents.

China

TaiwanThailand
VietnamIndonesia

X KAWAI MUSIC SCHOOL GLOBAL (English website)
https://musicschool.kawai-global.com/

Kawai Music School Piano Competition
The Kawai Music School Piano Competition was established to promote and spread musical education in Asia.
Held for the students of Kawai music schools in Indonesia, China, Thailand, Taiwan, and Vietnam, this competition has nine categories under the solo division and the duet division based on
Kawai’s original education method called Sound Tree. Contestants who have won regional preliminaries will participate in the ﬁnal round. The panel of judges includes Japanese staff members andfocuses not only on techniques, but also on whether the contestants are expressing themselves andexhibiting the beneﬁts of their lessons.
129 pianists participated in the ﬁnal selection of the 1st competition from Indonesia, China,
Thailand and Taiwan, and for the 2nd competition, the number increased to 239 participants, including those from Vietnam, demonstrating the increasing popularity of the competition.

KAWAI Report 2023

22

About Kawai Group

Environment

Sustainability

Society

Information materials

Governance

Education/training

Support for overall health promotion at every stage
Gymnastics and Sports School
In addition to develop athletic ability and improve athletic techniques, Kawai aims to provide education to harmonize “body”, “mind”, and“intelligence” to enrich their humanity in its gymnastic courses and sport courses. Kawai will nurture children’s sociability through working towards the goal by collaborating with each other and encouraging each other in group lessons.

Body
Developing physical strengthand athletic ability

Mind
Developing feelingand sociability

Intelligence
Developing ability
to think

3 important elements
for Kawai Gymnastic School Gymnastics courses

 Sports courses

The course provides different classes including
2-years-old class andInfant class targetingsmall to older children
to help children acquire
their athletic ability
while enjoying experiences of playful exercises suitable to children’s growth and development at each age. It nurtures children’s athletic creativity, enthusiasm for sports andpleasure of accomplishment.

The course gives instructions to acquirebasic skills of sports including artistic gymnastics, rhythmic gymnastics and soccer. It helps
children learn not only
techniques, but also rules and how to communicate with other people by teaching them,taking into consideration individuals’ abilities
and the levels of physical growth and development.

 Kawai Health Promotion Support System
Kawai has over 50 years’ history of supporting health promotion such as gymnastic schools all over Japan. Kawai
believes it is its mission to offer its accumulated skills and knowhow widely to the society.
Kawai has implemented the “Kawai Health Promotion Support System” to support health promotion at every
stage for infant to the elderly. The system provides enjoyment and scientiﬁc support for them to maintain and improve their health using measurement data and latest devices.

Sport community
Kawai Gymnastic School is committed to healthy education of children who will be playing active roles in the future by developing a“sports community” as the opportunity for them to meet top level athletes.

 Kawai Cup
In August 2022, Kawai Cup National Rhythmic Gymnastics Competition was held in Hamamatsu Arena for the ﬁrst time in three
years, after a series of cancellations due to the spread of the
COVID-19 disease. With rhythmic gymnastics class chief advisor
Yukari Kawamoto present as an observer, Kawai Gymnastic
School students exhibited the fruits of their training.
In September, Kawai Cup Artistic Gymnastics Competition
was held in Hamamatsu Arena, and school students participatedin mat and vaulting horse events.

A scene from the Rhythmic
Gymnastics Competition

A scene from the Artistic
Gymnastics Competition

Kawai Gymnastic School staff
Mr. Hisashi Mizutori

Ms. Yukari Kawamoto

Chief Advisor

Chief Advisorof the Rhythmic Gymnastics ClassHe was the gold medalist of artistic gymnastic men’s team competition at 2004
Summer Olympic in Athens. He took theposition of the Chief Advisor of the Kawai
Gymnastic School as he retired.
He has been giving talks and demonstrations at various locations to widely
propagate the joy of sports. He is also supervising sport programs for developing
physical ﬁtness of infants and children, andhealth improvement of adults.
23

KAWAI Report 2023

She performed at the 1992 Summer Olympics in Barcelona. She has been developing
curriculums and training instructors as thechief advisor of the Rhythmic Gymnastics
Class of the Kawai Gymnastic School. She
is also participating in the running of theSport Community.

Human capital development

Valuing our human capital
Basic principles of human capital development
Kawai Group regards human capital as the greatest asset of the company under the belief that “Each and every employee’s making
the best of their ability will lead to the growth of Kawai Group”, and positions the development of human capital as an important
strategic issue to address in order to become a company capable of responding to changes of the times.
We will create a mechanism and environment in which each and every employee can demonstrate their abilities, by which we aim
to achieve sustainable growth as a corporation.

Human capital development system
Under the basic principles, we work on human capital development to bring about our employees’ motivation to create their own careersand proactively pursue their growth.
Training by class

Training by job (led by each division)

Support for
self-development

CommonNewly appointed directors
training

Executives

Newly appointed operating
officers training
Next generation
executive candidates
selection anddevelopment

Managers

Diversity training

Women’s career
improvement training

Newly appointed managers
training
Inheritance of techniques(Development of successors to play the core role of piano manufacturing)(research course/advanced course/MPA)

Follow-up training
Newly hired employees training

Piano technician skills

6th year training
3rd year training(quality, multiskilled worker development, etc.)

Generalemployees

Support forcareer development

Reinforced young
generation development• Sales division (marketing, etc.)• Production division

Newly appointed supervisors
training• Music/gymnastics• Staff division• Technology/development

Supervisors

Manager candidates
training

Correspondence
education/e-learning
Compliance training

My life plan training Training by class
We provide training for different classes from general employees to executives with the objectives to acquire fundamental knowledge
required in each class and deepen understanding about their roles. We especially focus on the development of young employees by providing annual training until their 6th year of service, as well as providing them with career-creating support to expand the range of theirjob functions through job rotation, which in turn enhances corporate strength.

 Training by job
Education for improving skills is provided on a regular basis, as training by job is provided under the leadership of each division to enhance employees’ expertise in the job they engage in.

 Others
As support for self-development, we introduced e-learning in addition to correspondence education. We also provide diversity training toensure diversity and women’s career improvement training, which are commonly available to all classes. The purpose of this type of
education is to enable the entire company to acquire the ability to respond to changing times.
KAWAI Report 2023

24

About Kawai Group

Environment

Sustainability

Society

Governance

Information materials

Diversity

Promoting creation of workplace environment
where diversified talents can work actively
Basic diversity principles
Kawai Group believes that ensuring diversity in human capital including women, foreign people and mid-career-hired employees
having different job experiences will lead to enhancement of our corporate value. We strive to develop corporate culture that contributes to creating new value by actively hiring diversiﬁed human capital and appointing various talents to the core roles, and creating workplace environment where employees can demonstrate their individuality and abilities to the fullest extent.

Diversity promotion results and targets by year
FY2018FY2019FY2020

FY2021

FY2022

FY2025 end of March (target)

Female managers ratio (%)

1.6

2.4

2.1

3.3

6.7

12.5

Female supervisors ratio (%)

9.6

10.9

11.7

12.9

14.2

20.0

Number of employees of foreign nationality

6

7

8

9

12

Hired

0

1

1

1

3

Enrolled

6

6

7

8

9

Number of mid-career-hired employees

30

39

42

46

55

Hired

1

9

3

4

9

Enrolled

29

30

39

42

46

15

50

½ Targets shown above are only for Kawai Musical Instruments Mfg. Co., Ltd., excluding Group companies.

Promotion of women’s participation
Kawai Group established a project to promote women’s participation called “Love it! (Rabitto)” in 2019 and has been working
on activities to realize work-life balance, aiming to create aworkplace where all employees can work comfortably.
Providing training to support employees in striking a balance between work and child care/family care and Iku-Bosstraining (to enlighten managers to consider well-balanced
work and private lives for their subordinates), encouraging
male workers to take child care leave, issuing a work-life balTraining for female managers
ance guide book, and newly introducing a life support leavesystem. In addition, a supporter team that consists of cross-division members engages in a variety of activities including making proposals for women’s participation promotion, holding symposiums and training sessions by female managers, and issuing a periodical newsletter on the topics of female activities.
Our company was recognized for these activities and was granted “Eruboshi Certiﬁcation (2-Star)” in January 2021.
½ Eruboshi Certiﬁcation: A system in which the Minister of Health, Labour and Welfare certiﬁes excellent companies for their commitment to promote
active participation by females pursuant to the Act on the Promotion of Female Participation.

Global human capital development and reinforcement of mid-career recruitment
We are reinforcing global human capital recruitment, training and appointment in the offices in Japan. Outside of Japan, we also have 13
overseas subsidiaries around the world in which locally-hired staff are working actively. We plan to dispatch our employees, especially
young workers, to overseas subsidiaries for a short-term training, aimed to develop candidates to be stationed overseas in the future. We
will exert Group-wide efforts to build a foundation to this end.
Kawai has also been actively promoting mid-career recruitment in these years, and the number of mid-career-hired employees increased by 25 in the past ﬁve years from FY2018 to FY2022. It includes recruitment of talents for supervisory positions and the core roles
and we have some employees hired mid-career, who were work-ready as having professional skills and are now working energetically.

Employing people with disabilities
Thanks to assistance from local special needs schools, Kawai Group has been able to continuously employ suitable workers through thework experience program. Kawai has been employing more people with disabilities than the statutory employment rate for eight years
in a row since FY2015. In FY2022, the employment rate of people with disabilities in Kawai was 2.51% exceeding the statutory rate of
2.30%.
Kawai is determined to fulﬁll social responsibility as an enterprise while valuing relationships with local organizations.
25

KAWAI Report 2023

Work-life balance

Supporting good balance between work and private life
Promotion of work-life balance
At Kawai Group, based on our management philosophy of “Valuing our employees andstriving to be a bright company,” we have established various systems to support diverse
ways of working and promote a comfortable working environment for our employees.
Furthermore, through the women’s empowerment project called “Love it!,” we are
actively working on expanding and promoting systems that support the work-life balanceby providing a Work-Life Balance Guidebook that clearly explains the available programs
and support for various life events.

Support system for good balance between work and private life
SystemSpecial leave

Family care support

Description

Memorial leave

Can be taken 1 day per year on an employee’s birthday

Life support leave

Can be taken 2 days per year for a life event of an employee and the family

Refreshing leave

Can be taken for 5 days in a row in every 5 years of service

Lay judge leave

Can be taken for appearance in a court as a lay judge or lay judge candidate

Family care leave

Can be taken for family care for a period of 1 year at the maximum

Shorter work hours for family care

Can work for shorter hours per day for family care for 3 years at the maximum

Overtime work exemption system/
limitation

Exemption of overtime work / Overtime work exceeding 24 hours per month and
150 hours per year will be exempted

Limitation of midnight work

Midnight work from 10:00 p.m. to 5:00 a.m. will be exempted

Family care leave

Can be taken 5 days per year for family care

Leave for maternity healthmanagement, etc.

Systems can be used for commutation relief, staggered or shorter working hours,
hospital visit during work hours, prolonged break time, alleviation of work load,
shorter working hours, etc.

Maternity leave

Can be taken from 42 days before to 56 days after childbirth

Spouse maternity leave

Can be taken for up to 2 days in the period from the date of notiﬁcation of the
spouse’s pregnancy to one week after childbirthChildcare leave upon childbirth
Support for pregnancy/ Childcare leavechildbirth/childcare
Shorter working hours for childcare

Can be taken for up to 4 weeks within 8 weeks after childbirth
Can be taken for childcare until a child reaches the age of 2
Can work for shorter working hours for a reason of childcare

Overtime work exemption system/
limitation

Exemption of overtime work / Overtime work exceeding 24 hours per month and
150 hours per year will be exempted

Limitation of midnight work

Midnight work from 10:00 p.m. to 5:00 a.m. will be exemptedChild nursing care leave

Can be taken for childcare in case of injury or illness and for vaccination and healthcheck-up of a childChildcare hour

Other than regular break time, certain time can be taken for childcare twice a day

Promotion of taking childcare leave
Childcare leave system was introduced in 1992 as a system to support employees in their child rearing while working. The leave usage
ratio among female workers remained 100% from FY2018 until FY2022. The ratio among male workers increased remarkably to 39%
from 21% in the previous year. The spouse maternity leave usage ratio was 53%, almost unchanged from 57% in the previous year. We
continue our efforts to increase the ratio of using childcare leave and to create a workplace environment in which all employees can work
comfortably.
Ratio of female workers
taking childcare leave

Ratio of male workers
taking childcare leave

Ratio of workers
taking spouse maternity leave

100%

100%

100%

75%

75%

75%

50%

50%

50%

25%

25%

25%

0%

0%

0%
FY2020

FY2021

FY2022

FY2020

FY2021

FY2022

FY2020

FY2021

FY2022

KAWAI Report 2023

26

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Health and productivity management

Promoting health improvement for employees and theirfamilies
Health and Productivity Management Declaration
Kawai Group established the “Health and Productivity Management Declaration” to strategically promote “health and productivity management”, considering the health management of our employees from a management point of view.
Kawai Group believes that physical and mental health of employees and their families is an important asset for the Group and society since it is the foundation to realize our management philosophy to “make the Corporation more creative and likeable”.
To this end, our company and the Society-Managed Health Insurance strive to work together closely to proactively support theactivities to ensure maintenance and improvement of the health of our employees and their families, so that each and every employee can demonstrate their abilities to the fullest extent as a “key player in the music culture”, as well as ﬁnding their jobs rewarding
and contributing to the promotion of the music culture as Kawai has been continuously doing since its foundation.
We hereby declare that Kawai is committed to making contributions in wide areas to people’s lives and culture as well as themusic culture through our business activities with our employees working energetically to the fullest extent of their abilities.

Health and productivity management promotion structure
Industrial health staff

All people working
in Kawai Groupand their families

Society-Managed
Health Insurance

Personnel and labor division

Health and productivity
management officer

Management meeting, etc.

Under the Health and Productivity Management Declaration, Director in
charge of personnel and labor division acts as the “health and productivity management officer” to lead health and productivity management. Personnel and labor division play a central role in promoting
health improvement for employees and their families, in liaison with
the Central Safety and Health Committee, which includes the heads ofbusiness branches and labor union representatives, as well as industrial health staff and Society-Managed Health Insurance.
The status of the employee health management is to be reported periodically in management meeting, etc. and the health improvement for
employees is ensured through combined efforts of the whole company.

Central safety andhealth committee

Health and productivity management and industrial safety initiatives
We are implementing a fall risk improvement program through our
Gymnastics Division to enhance the health and well-being of our employees, establish and improve exercise habits, and reduce the risk ofoccupational accidents. In the ﬁscal year 2022, we conducted a physicalfunction measurement event at our Ryuyo factory.
We will continue to organize measurement events at each factory toraise awareness of physical functions and strive for occupational safety.
Scenes from a physical function measuring meeting in Ryuyo Factory
Furthermore, we believe that promoting employee physical and mental
health is crucial for achieving sustainable corporate growth through health management. By setting various indicators, implementing measures, and evaluating and verifying through the PDCA (Plan-Do-Check-Act) cycle, we are addressing employee health issues and working
towards their maintenance and improvement.
Detailed information on various indicators related to health management is available on our company website.
X Promotion of health and productivity management (Japanese text)
https://www.kawai.co.jp/csr/health_mgnt/

Certiﬁed Health & Productivity Management Outstanding Organization
Our company has been certiﬁed as the “Health & Productivity Management Outstanding Organization (The Large Enterprise Category) 2023”
for consecutive years since 2020, which are selected jointly by the Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi.
Health & Productivity Management Outstanding Organization is asystem of recognizing large and small- to medium-sized corporations
for their outstanding practices of health and productivity management
through activities addressing local health issues or working on thehealth improvement measures promoted by Nippon Kenko Kaigi.

27

KAWAI Report 2023

Contribution to society

Working on activities to contribute to society for the
benefit of the local community
Contribution to the local community
As a member of the local community, Kawai Group works on increasing interaction with local people and engages in activities to contribute to society for the beneﬁt of the local community.

 Participation in local community activities

 Cooperation with Hamamatsu Science Museum

Facility members participate in various activities for deeper interaction with local residents.

On September 13, 2022, we renewed our permanent exhibitionbooth in Hamamatsu Science Museum. Children can play andlearn the movement and structure of the piano keyboard.

Cleaning the Enshu Sea coast (Operation “Welkame Clean”)
Kawai Musical Instruments’ booth “Piano Action”
in Hamamatsu Science Museum
X Renewed our exhibition booth inHamamatsu Science Museum. (News release)(Japanese text)
https://www.kawai.co.jp/news/20220907/

 Factory tour
Cleaning areas around Lake Hamana (“Hamanako Cleaning Operation”)

 Collaboration with local communities
We participate in Hamamatsu City’s road and river foster parent
program, by cleaning roads around our head office. We also workon the maintenance of disaster prevention forests under anagreement with Shizuoka Prefecture.

Due to the spread of the COVID-19 disease, we limited the participation of factory tours. However, we started to accept bookings
without limitation from May 2023. People who join the tour canobserve the assembly process of a grand piano.
We received positive feedback from elementary school students after factory tours.

Feedback from factory tour participants
Cleaning roads around our head office

X Queries concerning the factory tour
Ryuyo Factory (Piano Division, Administrative Office)Address: 252 Tobihiramatsu, Iwata-shi, Shizuoka, Japan
TEL: 0538-66-5111 FAX: 0538-66-5919
You can book a factory tour from our company’s website.
(Japanese text)
https://www.kawai.jp/ryuyofactory/

Maintaining sea embankment and disaster prevention forests on the
Enshu Sea coast

KAWAI Report 2023

28

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Quality and customer satisfaction

Providing secure and safe services
Promotion of quality and service improvement
The Kawai Group believes that not only complying with laws and regulations, but also further upgrading its products and services through continuous quality improvement are essential for “providing our products and services with our customer’s satisfaction on ﬁrst priority” as stated in its management philosophy.
Major factories in and outside Japan have ISO9001-certiﬁed quality management systems andhold quality meetings every month to share information within the organizations and take prompt
actions to prevent quality-related nonconformities and abnormalities.

Plan
Do

 Quality management system
Kawai promotes the introduction of ISO9001-certiﬁed quality management systems in order tomaintain and improve quality and services. We endeavor to improve quality and services continuously by repeating the required PDCA cycle under quality management systems.
Present certiﬁcation holders include Ryuyo Factory, Kawai Hyper Wood Co., Ltd., Kawai Precision
Metals Co., Ltd. in Japan, PT. Kawai Indonesia Plants No.1, No.2 and No.3, Shanghai Kawai Emi Co.,
Ltd. and Kawai Musical Instruments (Ningbo) Co., Ltd.

Check
Action

List of facilities with quality management systems
Year ofintroduction

Facility

1997

Hamamatsu facility, Kawai Precision Metals Co., Ltd. (ISO9002-certiﬁed)

2003

Hamamatsu facility, Kawai Precision Metals Co., Ltd. (ISO9001-certiﬁed)

2004

Kawai Precision Metals Co., Ltd. (ISO9001-certiﬁed for the entire company)

2005

Ryuyo Factory (ISO9001-certiﬁed)

2008

Kawai Musical Instruments (Ningbo) Co., Ltd. (ISO9001-certiﬁed)
PT. Kawai Indonesia Plant No.3 (ISO9001-certiﬁed)

2009

PT. Kawai Indonesia Plants No.1 and No.2 (ISO9001-certiﬁed)

2013

Shanghai Kawai Emi Co., Ltd. (ISO9001-certiﬁed)

2016

Kawai Hyper Wood Co., Ltd. (ISO9001-certiﬁed)

Initiatives for improving customer satisfaction

 Customer Help Desk
There is a customer help desk that receives and responds quickly and in good faith to various inquiries from customers, including inquiries about musical instruments they are interested in buying, how to use musical instruments they have bought, the quality of our products, and the like. Staff members who are also big lovers of music endeavor to serve customers sincerely, hoping to become their valuable partners.
Feedback from customers are analyzed from various angles and forwarded to internal divisions for product quality and service
improvement.

 Customer Support Site
The Kawai customer support site is a website that provides piano repairing and tuning services, product repair services and other after-sale services, catalogs and user manuals, and data downloads such as program updates, and receives catalog requests and trial
bookings for Kawai pianos and digital pianos, requests for quotation, etc.
X Customer support (Japanese text)
https://www.kawai.jp/support/

29

KAWAI Report 2023

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Corporate governance

Establishing a sound corporate management system
Basic principles of corporate governance Objectives and basic principles of corporate governance
Kawai Musical Instruments Mfg. Co., Ltd. established its basic principles of corporate governance based on the “Management Philosophy” to achieve sustainable enhancement of corporate value, and the Group is committed to continuously improve our corporate
governance.

These basic principles prescribe our corporate governance in six chapters focusing on different topics, including the basic concept, relationship with our stakeholders, and the corporate governance system.
X Basic principles of corporate governance (Japanese text)
https://www.kawai.co.jp/company/governance/

Basic principles of internal regulations
Kawai has the “Management Philosophy” and “Code of Conduct” established as business management guidelines and strives to build astructure in which different organizations play their predeﬁned roles and fulﬁll corporate strategies efficiently in compliance with laws,
regulations and by-laws. With respect to legal issues, we ensure legitimacy through consultation contracts concluded on a continual
basis with multiple legal ﬁrms in each ﬁeld.
In relation to internal regulations, we are working on its establishment pursuant to the “Basic Principles of establishing Internal
Regulations”, which was resolved in the Board of Directors held on May 12, 2006, recognizing the importance of such system as part ofthe corporate governance to increase our corporate value.

Basic principles for elimination of antisocial forces
Eliminating antisocial forces from society is important in terms of security measures and it is necessary for companies to take action
from a viewpoint of CSR. Such action is also required to defend corporations, considering that antisocial forces would cause tremendous
damage on any company including its employees. Based on these principles, our company strives to build and maintain a corporate
structure to tackle this issue to prevent any damage caused by antisocial groups as part of our compliance structure and internal regulations.

About Kawai’s corporate governanceOur company established the Basic Principles of Corporate Governance based on the “Management Philosophy” to achieve sustainable growth and the enhancement of corporate value. We built our corporate governance system pursuant to those principles
and have been addressing faster decision-making and the increase of soundness and transparency of the management.
As the Corporate Governance Code was revised in June 2021 which requires corporations to make harder efforts on theirgovernance, we need to strengthen our governance on this occasion of our company’s transition to the Prime Market. We will
endeavor to pursue higher standard of corporate governance by addressing a wide range of issues to ﬁnd solution.

Chairman, President & CEO

KAWAI Report 2023

30

About Kawai Group

Environment

Sustainability

Society

Information materials

GovernanceCorporate governance

Striving to secure transparency and impartiality inbusiness management
Corporate governance structure
Based on our fundamental principles regarding corporate governance, we strive to enhance internal controls, establish a robust compliance framework, and ensure transparency and fairness in management. By doing so, we aim to achieve sustainable growth and continuous improvement in corporate value.

General meeting of shareholders
Reply

Appointment/
dismissal

Appointment/
dismissal

Consultation

Corporate
GovernanceCommittee

Audit

Board ofDirectors

Board of Auditors
ReportReportAppointment/
dismissal/
supervision

Direction/
supervision
ReportDirection/
supervision

Representative
director
Risk Management
Committee

Sustainability
Committee

Appointment/
dismissal

ReportInternal audit
offce

Appointment/
dismissal
Appointment/
dismissal

ReportDirection

Cooperation

ReportAccounting
auditor

Deliberation,
management and decision
on important matters

Cooperation

Board of managing
directors
ReportDirection
ReportDirection
Direction

Internal audit

Submission/report ofimportant matters

Operating offcer

Business operation

 Board of Directors

 Corporate Governance Committee

The Board of Directors consists of directors, including external
directors. External directors provide advice and oversight to theBoard of Directors from an objective standpoint regarding the validity of decision-making and the execution of duties, enhancing
the transparency of management. In addition, we revised the Executive Officer system introduced in April 2002 in June 2005 toallow directors to concurrently hold executive officer positions.
This structure strengthens our ability to address company-wide
challenges, clariﬁes responsibilities in business execution, andenhances the command hierarchy.

As an advisory body to the Board of Directors, we have established the Corporate Governance Committee. The committee discusses matters related to the selection of director candidates,
director compensation, and other improvements in corporate
governance. It submits recommendations and reports to theBoard of Directors.

 Audit and Supervisory Board
The Audit and Supervisory Board is composed of auditors, including external auditors. The board establishes audit policies andassignments, and each auditor conducts regular audits of various
business divisions and group companies in accordance withthese policies. Auditors attend important meetings, including theBoard of Directors, to accurately grasp the situation and provide
opinions, thereby enhancing the auditing function of the directors’
duties.

31

KAWAI Report 2023

 Management Meetings
We have established various steering committees, strategic conferences for business units and regions, such as the Steering
Committee, to deliberate on company-wide issues. These committees evaluate and discuss the performance of executive officers, as well as the production and sales status of each department, ensuring strategy monitoring and control.

 Internal Audit
We have established an Internal Audit Department to audit theoverall business activities of the Kawai Group. The department
conducts audits to ensure that business operations are conducted
legally, properly, and reasonably. It also audits the utilization ofcompany resources and compliance with laws, regulations, andinternal rules.

Corporate governance

Striving to make the Board of Directors more effective
Board of Directors’ Expertise and Diversity
In order to swiftly respond to global growth, enhance competitiveness, and adapt to signiﬁcant changes in the business environment, we
strive for diversity among our directors and auditors. As a whole, the Board of Directors aims to possess a balanced combination ofknowledge, experience, and capabilities in “Corporate Management,” “Legal and Risk Management,” “Finance and Accounting,” “Manufacturing and Technology,” “Sales and Marketing,” “Global,” as well as “Industry Knowledge (Music and Musical Instruments).” This ensures
our ability to promptly and accurately respond to the rapidly changing management environment and make swift decisions.

Evaluation of the Effectiveness of the Board of Directors
As part of our efforts to enhance the effectiveness of corporate governance, we conduct annual evaluations of the Board of Directors’
operations with the aim of improving and enhancing its functionality. Here is an overview of the effectiveness evaluation conducted in
March 2023:

 Implementation
We conducted a survey in questionnaire format targeting the directors and auditors (a total of 14 individuals) comprising the Board of
Directors. In order to verify its effectiveness in a neutral and objective manner, we employed an external organization to conduct thesurvey and based the analysis and evaluation on the aggregated results.

 Evaluation Items
Evaluation of the effectiveness of the Kawai Board of Directors for the ﬁscal year ending in March 2023 (total of 38 questions).
• Composition of the Board of Directors• Operations of the Board of Directors• Discussions within the Board of Directors• Support system for directors and auditors• Others

 Response Method5-point scale evaluation and free-form responses

 Analysis and Evaluation
Responses were aggregated by an external organization, and the analysis results were examined by our Corporate Governance Committee. The evaluation was then conducted by the Board of Directors.

 Analysis and Evaluation Results• Overall, we have received generally positive evaluations, indicating that the Board of Directors is effective.
• Speciﬁcally, the operations aspects such as preparation of materials, scheduling, and ensuring sufficient deliberation time received
high evaluations. However, there were recognized challenges in providing training opportunities for executives and promoting open andconstructive discussions and exchange of opinions.
• Regarding the issues identiﬁed in the previous effectiveness evaluation, such as the increase in external directors and the appointmentof female directors, the evaluations remained low as before. However, there is an expectation for improvement following the resolution
on the appointment of directors at the regular shareholders’ meeting in June of this year.

 Future Initiatives for Enhancing EffectivenessBased on this effectiveness evaluation, we will promptly address the identiﬁed challenges. This includes providing opportunities for directors and auditors to acquire the necessary knowledge to fulﬁll their roles and responsibilities and further improving the operations of
the Board of Directors to enhance the vitality of deliberations. We will continue our ongoing efforts to enhance the functionality of theBoard of Directors by thoroughly considering and promptly implementing measures.

KAWAI Report 2023

32

About Kawai Group

Sustainability

Environment

Society

Governance

Information materials

Risk management

Working on risk management level enhancement
Risk management structure
The main purpose of Kawai’s risk management structure is to prevent risks associated with business operations from occurring. If any
risk becomes obvious, measures to minimize the effects on society and management will be taken ﬂexibly by addressing the risk systematically based on the organization of the office in some cases, or, in other cases, by setting up a committee, etc. to deal with the risk
to protect the entire Group if necessary.

Risk Management Committee
To deal with risks involving the entire Kawai Group, Risk Management Committee is responsible for establishing rules and regulations,checking the operation status, training of workers, planning and providing training programs, as well as reporting regularly to the Boardof Directors on the company-wide risk management status.
Under the Risk Management Committee, subcommittees are established in the following ﬁelds and in the event of emergency,“Emergency Headquarters” will be promptly established to take quick actions and prevent expansion of damage.

 Global Environment Committee Overseas Safety Measures Committee

The Committee has set out “Kawai Earth Environment Charter,”“Kawai Environment Principles,” “Green Procurement Guideline,”and “Wood Materials Procurement Guideline.” It also strives to ensure compliance with laws and regulations related to the environment as well as reducing the risks of environmental pollution by
setting objectives and goals for environmental preservation.

This Committee is responsible for the risk management for overseas subsidiaries, expatriates and workers on overseas businesstravel.

 Product Safety Measures Committee
In the event that any safety deﬁciency is found in our products inthe market which caused or is deemed likely to cause any injury
to customers’ lives or bodies, the Committee will take immediate
actions including notice to customers, report to a relevant administrative organization, recall of such products, and also carry out
all activities to minimize the damage to customers.

 Central Disaster Prevention Measures Committee
This Committee establishes preventive measures against disasters that may occur in Kawai Group including ﬁre, damage bywind and ﬂood and so on, and is responsible for all range of activities to minimize damage in the event of a disaster.

 Information Security Committee
This Committee is in charge of the management from a company-wide perspective to ensure and maintenance conﬁdentiality,
integrity and availability of the information assets.

 Central Safety and Health Committee
This Committee strives to arouse attention of the employees in
Kawai Group about their safety and health, and engages in various activities to prevent disasters and diseases.

 Corporate Ethics Committee
The Committee deliberates to decide on the basic principles ofcompliance, checks the status of practices of those principles,and engages in establishing regulations and manuals in relation
to compliance. In addition, in case of any violation with regard tocorporate ethics, it discusses the measures to deal with it andsubmits them to the executives.

BCP (Business Continuity Plan)
In preparedness for a large-scale earthquake or other emergency situation that may occur, Kawai has a BCP (Business Continuity Plan)
that summarizes various measures and methods to take in normal circumstances and in case of emergency so that Kawai will be able
to secure the safety of employees, minimize damage to its business assets, continue to be operational, and achieve full recovery of theentire operation quickly. The most important thing in implementing the BCP is to secure and conﬁrm thesafety of people’s lives. For this end, we have introduced a safety conﬁrmation system and distributed adisaster prevention handbook.

 Safety conﬁrmation system
It is important to conﬁrm the safety of employees immediately upon occurrence of a disaster. We have asafety conﬁrmation system that automatically sends broadcast email messages and aggregates safety
information upon occurrence of a large-scale earthquake or other disaster. Employees receive regulartraining to be able to respond promptly to emergency events.

 Disaster Prevention Handbook
We issued a disaster prevention handbook summarizing knowledge and information related to disasters,
preparedness, and necessary actions so that employees will be prepared for large-scale earthquakes andother disasters. This handbook also provides easy-to-understand explanations about the BCP, to ensurethat it will be fully understood by all employees.
33

KAWAI Report 2023

Compliance

Striving to establish corporate ethics and comply with laws
Basic principles regarding compliance
The Kawai Group’s deﬁnition of compliance is not limited to compliance with laws and regulations, but also encompasses observing internal rules etc. and acting in accordance with social norms and codes of ethics to earn trust in society. It is committed to compliancemanagement that involves all-out efforts by all employees. To be more speciﬁc, we established “Kawai Code of Ethics” and “Standards ofEthical Conduct”, and established Corporate Ethics Committee that includes outside expert members (lawyers).

 “Kawai Code of Ethics” and “Standards of Ethical Conduct” (summary)• Compliance with laws and regulations,and internal rules• Action in accordance with highstandards of morality and ethics• Prohibition of illegal and unethicaltransactions• Clear line between business and private
activities• Respect for fundamental human rights
and individuals’ dignity• Prohibition of discrimination andharassment• Prohibition of anti-social conduct• Preservation of the global environment• Enhancement of customer satisfaction• Free competition and fair trade• Fair transactions with suppliers,
partners, and dealers• Prohibition of bribery and corrupt
conduct• Prohibition of untruthful advertising• Appropriate disclosure of corporate
information• Prohibition of insider trading• Management and proper use ofcompany property• Protection of intellectual property rights

Compliance promotion structure
In fulﬁllment of compliance management, Kawai established the Corporate Ethics Committee as a consultative and advisory organizationin the area of compliance. The Corporate Ethics Committee determines basic policies related to compliance issues, keeps track of pertinent measures, discuss the course of action to take in connection with serious law violations, submit reports to the President and theBoard of Directors, and give directions to the Corporate Ethics Section.
The Corporate Ethics Section, which supervises corporate ethics, operates the “Corporate Ethics Hotline” to detect and correct violations etc. promptly, and organizes and conducts compliance programs to raise awareness among employees.

Corporate Ethics Hotline
Kawai has a “Corporate Ethics Hotline” to receive reports from whistleblowers and discover and solve violations immediately. Reports
must be submitted under real names in principle, and the “Corporate Hot Line Standards” stipulate that no unfavorable treatment isgiven to the whistleblowers.
Information/consultation
regarding illegal act, etc.
Feedback of results½ Informants will notreceive any prejudicial
treatment.

To Chairman of Corporate Ethics Committee
via Corporate Ethics Section Manager

Postal documents
Undisclosed

z Under real name in principle
for investigation

Corporate Ethics Section

Human
Resource
Department

Request to
considerdisciplinary
actionCorporate Ethics
Committee
ReportDirection

Investigation team

Advice ororder
to stopillegal act

Relevant
divisions(sales, factory)(department, company)

Investigation

Compliance education and enlightenment
The Corporate Ethics Section makes efforts to arouse employees’ awareness of compliance through education and enlightenment activities, including “enlightenment during Corporate Ethics Month (October),” “issuance of monthly corporate ethics news,” “self-check using
a check list for identifying compliance risks”, and “compliance training.”

KAWAI Report 2023

34

About Kawai Group

Sustainability

Environment

Society

Information materials

Governance

Company outline and main businessCompany outline

Ordinary proﬁt (consolidated)

Company Name: Kawai Musical Instruments Manufacturing Co., Ltd.
Company Headquarters: 200 Terajima-cho Naka-ku, Hamamatsu
City, Shizuoka Prefecture
Established: August 9th, 1927
Reorganized: May 15, 1951
Company President: Hirotaka Kawai, Chairman, President & CEO
Capital: 7,122 million JPY (as of end of March 2022)

Million yen
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2018

2020

2021

2022

Sales
(Million yen)

Non-consolidated

48,48759,35962,338

Consolidated

67,52085,70387,771Million yen
100,000

No. ofemployees

Non-consolidated

1,302

1,280

1,286

80,000Consolidated

2,868

2,969

2,977

60,000

2019

2020

2021

2022

FY

2022

FY

Sales (consolidated)

40,00020,0000
2018

Main business

2019

2020

2021

 Musical instruments and education related business

83.1%
Sales composition
ratio

Sales of pianos, electronic instruments, wind, string, and percussion instruments, musical instrument accessories, and musical instrument toys, as well as providing services for instrument tuning and repair.
Operation of music schools and physical education schools, sales of educational materials, sheet music,
music education software, manufacturing and sales of cast iron products.
z Domestic salesz Domestic instrument manufacturing
Kawai Musical Instruments Manufacturing Co., Ltd.
Kawai Musical Instruments Manufacturing Co., Ltd.
Zen-On Music Company Limited
Zen-On Music Company Limitedz Overseas sales
Kawai America Corporation
Kawai Europa GmbH
Kawai Canada Music
Kawai Australia Pty. Ltd.
PT. Kawai Music Indonesia
Kawai Musical Instruments (China) Co., Ltd.½
Kawai Trading (Shanghai) Co., Ltd.½
Kawai UK Ltd.
Kawai France SAS
Kawai Piano (Russia) LLC
z Instrument technical service and repair
Kawai Musical Instruments Manufacturing Co., Ltd.

z Overseas instrument manufacturing
PT. Kawai Indonesia
Kawai Musical Instruments (Ningbo) Co., Ltd.
Shanghai Kawai Emi Co., Ltd.
z Domestic music schools and physical-training
schools operation
Kawai Musical Instruments Manufacturing Co., Ltd.
z Overseas music schools operation
PT. Kawai Music School Indonesia
z Manufacturing and selling cast iron products
Kawai Casting Co., Ltd.
z Other
Kawai Tomo-no-Kai

 Material processing business

11.9%
Sales composition
ratio

Metal material processing for electric and electronic parts, material processing for automobile parts, manufacturing and selling sound-proof chamber and acoustic components
z Manufacturing and selling sound-proof chamz Manufacturing deformed rolled metal parts
ber and acoustic componentsparts
Kawai Precision Metals Co., Ltd.
Kawai Acoustic System Co., Ltdz Manufacturing materials for automobile parts
Kawai Hyper Wood Co., Ltd.

 Other business

5.0%
Sales composition
ratio

35

KAWAI Report 2023

z Information-related business, ﬁnancial business, insurance agent business and others
Kawai Business Software Co., Ltd.
Kawai Assist Co., Ltd.

½ Effective January 31, 2023, Kawai Trading (Shanghai) Co., Ltd. carried out an absorption-type merger with Kawai
Musical Instruments (China) Co., Ltd. in which the former survived and the latter disappeared. Its trade name waschanged to Kawai Musical Instruments (China) Co., Ltd. on March 28, 2023.

Resources and energy input and disposal and emission amountMaterial balance
The amount of energy, chemicals and other materials inputted into, and the amount of CO2, waste water, chemical substances and waste
outputted from, domestic operations in FY2022 are shown below.

INPUT

OUTPUT

Energy (GJ)Electric power

392,988

Greenhouse gas (ton- CO2)

340,620

Waste water (1000 m³)

Fuel oil A

3,079

LPG

19,628

Kerosene

4,689

Coal coke

24,972

Water (1000 m³)

192

Chemical substances (ton)16

Emissions in the atmosphere

Development and design

240

11

Waste

5

Containers and packaging (kg)7,008

Waste (ton)2,090

Well water

66

Incineration/landﬁll

Tap water

111

RecycleIndustrial water

63

Chemical substances (ton)20,552

223
1,867

72

Containers and packaging (kg)16,060

Paper

3,735

Plastic

12,325Gasoline

17,227light oil

742

Fuel (GJ)

Procurement and manufacturing

17,969Transportation
Energy input
Fuel (GJ)

GJ
500,000

CO2 emissions
ton–CO2
30,000Electricity (GJ)

25,000400,000

20,000300,000

15,000200,000

10,000100,000
0

Sales and service
2018

2019

2020

2021

5,000
0

2022 FY

2018

Water consumption
ton
2500

250

2000

200

2021

2022 FY

Incineration/landﬁll

Recycle1500

150

Customer

100

1000
500

50
2018

2019

2020

2021

0

2022 FY

Chemicals input

2018

2019

2020

2021

2022 FY

Chemicals emissions
ton
40

ton
100
75

Reuse/recycle

30

50

20

25

10

0

2020

Amount of waste(1000 m3)
300

0

2019

2018

2019

2020

2021

2022 FY

0
2018

2019

2020

2021

2022 FY

KAWAI Report 2023

36

About Kawai Group

Sustainability

Environment

Society

Information materials

Governance

Environmental load data

List of environmental loads by site
Reference
year
2016

Iwata City, Shizuoka Prefecture

Site area: 168,218 m²

Shinmiyakoda, Kita-ku, Hamamatsu City,
Shizuoka Prefecture

Site area: 26,817 m²

Sasaga, Matsumoto City, Nagano
Prefecture

Site area: 14,612 m²

Yanaidamachi, Hakui City, Ishikawa
Prefecture

Site area: 41,000 m²

Nakagori-cho, Higashi-ku, Hamamatsu
City, Shizuoka Prefecture

Site area: 15,074 m²

Sasagase-cho, Higashi-ku, Hamamatsu
City, Shizuoka Prefecture

Site area: 2,972 m²

Terajima-cho, Naka-ku, Hamamatsu City,
Shizuoka Prefecture

Site area: 6,784 m²

37

KAWAI Report 2023

OUTPUT

Business: Headquarters function,
research and development

INPUT

Headquarters

OUTPUT

Business: Manufacturing and sellingsoundproof chamber and acoustic
components

INPUT

Kawai Acoustic System Co., Ltd

OUTPUT

Business: Manufacturing automobileinterior parts

INPUT

Kawai Hyper Wood Co., Ltd.

OUTPUT

Business: Manufacturing and selling pig
iron castings

INPUT

Kawai Casting Co., Ltd.

OUTPUT

Business: Manufacturing metal parts

INPUT

Kawai Precision Metals Co., Ltd.
Matsumoto Factory

OUTPUT

Business: Manufacturing metal parts

INPUT

Kawai Precision Metals Co., Ltd.
Hamamatsu Factory

OUTPUT

Business: Manufacturing pianos

INPUT

Ryuyo Factory

2017

2018

2019

2020

2021

2022

Compared toreference year

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

57,78755,62755,29254,54948,95055,62356,678

1.9%

17,861

18,032

16,876

16,66814,98914,894

13,720

-7.9%

35.6

38.1

45.2

48.5

48.6

51.9

47.1

-9.2%

36.8

39.1

44.6

46.1

38.6

54.0

52.2

-3.3%

3,691

3,585

3,465

3,310

2,847

2,873

2,837

-1.3%

9.1

10.1

12.3

13.8

10.1

13.4

12.8

-4.5%

0.3

0.2

0.2

0.0

0.0

0.0

0.0

823.2

836.0

854.5

921.5

764.6

945.7

935.4

-1.1%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

63,386

68,52667,822

63,834

59,11865,141

57,932-11.1%

21.9

22.7

29.1

29.4

22.0

23.6

21.1

-10.6%

28.5

30.0

31.4

28.4

23.6

23.8

20.4

-14.3%

3.0

1.8

3.0

0.0

0.0

0.0

0.0

3,069

3,305

3,216

2,898

2,528

2,480

2,258

3.0

1.1

2.6

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

58.3

57.0

64.0

54.7

32.3

32.6

26.3

-19.3%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

42,74848,971

49,62746,43645,62950,56645,079-10.9%

5,393

5,473

4,194

3,417

4,024

3,867

3,258

-15.7%

72.3

79.6

67.0

69.1

79.0

74.5

65.5

-12.1%

39.5

33.5

15.2

0.4

0.5

0.4

0.4

0.0%

2,449

2,747

2,649

2,314

2,191

2,154

1,950

-9.5%

30.6

26.1

8.6

0.0

0.0

0.0

0.0

2.2

2.1

1.8

1.9

1.1

7.2

8.7

20.8%

19.4

29.9

16.5

8.2

15.3

8.4

9.5

13.1%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

70,17865,77659,15954,35454,47264,01764,741

1.1%

33,656

28,84723,87521,442

20,354

28,79628,727

-0.2%

-9.0%

22.8

19.5

14.6

13.9

12.8

18.2

19.4

6.6%

7,807

7,080

5,499

4,975

4,991

6,976

6,682

-4.2%

1.9

1.7

2.5

2.7

2.0

2.6

2.6

0.0%

349.7

345.1

298.5

212.6

237.9

197.7

208.9

5.7%

854.6

611.9

622.9

531.9

500.9

659.9

774.7

17.4%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

15,084

14,134

16,415

13,174

11,235

9,531

7,546

-20.8%

3,595

2,885

2,771

2,517

2,147

2,210

1,250

-43.4%

3.6

3.0

3.4

2.7

2.3

2.8

1.9

-32.1%

16.1

13.8

14.8

9.9

7.2

1.5

0.3

-80.0%

982

887

974

775

631

517

382

-26.1%

2.8

2.4

2.6

2.1

1.5

0.3

0.1

-66.7%

0.0

0.0

0.0

0.0

0.0

0.0

0.0

117.6

79.7

91.6

77.1

47.6

46.0

36.4

-20.9%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

920

871

865

881

1,066

1,119

1,248

11.5%

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.0%

51

48

48

47

55

50

58

16.0%

Electricity
GJ
Fuel
GJ
Water
1000 m³
Chemical substances
ton
CO2 emissions
ton-CO2
Chemical substances
ton
Waste incineration/landﬁllton
Waste recycle
ton

3.3

0.0

0.0

0.0

0.0

0.0

0.0

11.4

7.1

11.0

15.0

18.0

27.0

30.8

5,827

6,207

5,751

5,574

5,710

5,660

5,285

-6.6%

26

140

102

160

166

136

15

-89.0%

3.6

3.6

3.4

3.7

3.8

3.2

2.9

-9.4%

296

320

289

281

275

246

224

-8.9%

4.5

4.2

5.5

3.7

11.1

0.0

0.0

24.1

22.9

78.9

56.8

55.8

75.9

54.5

14.1%

-28.2%

Third party comment

Kiyohiko Nakasaki
Professor Emeritus at Tokyo Institute of Technology

This report begins with a review of the company’s “7th Medium-term Management Plan,” which started last year. According to
the report, the company suffered a proﬁt decrease in the ﬁrst year
partially due to changes in the international situation although its
sales increased steadily; hence, the company’s overall performance was good. The sales increase should be attributed to awider recognition of the excellence of Kawai’s products that embody its advanced technology. The excellence of its products wasproved by the fact that top prize winners at the “8th Sendai International Music Competition,” the “5th Takamatsu International Piano Contest,” and other international competitions used Kawai’s
full concert piano SK-EX.
Then the company reports that it established the Sustainability Committee to promote the company’s environmental, socialand governance (ESG) initiatives, which are indispensable for corporate value enhancement, and sustainability activities throughout the group. The company’s sustainability action policy and pertinent SDGs are presented in an easy-to-understand manner overtwo pages; just reading those two pages will give you a good overview of the group’s initiatives.
New topics contained in this year’s report are “Information
disclosure pursuant to the TCFD (Task Force on Climate-related
Financial Disclosures) recommendations” on the environmental
front, “Quality and customer satisfaction” on the social front, and“Board effectiveness assessment” and “BCP (Business ContinuityPlan)” on the governance front.
Kawai is a forerunner of information disclosure as evidenced
by the disclosure of its ESG initiatives in its prior reports. In thisreport, however, Kawai is deeply conscious of the TCFD recommendations and made it clear, in line with the format of thoserecommendations, that ESG initiatives are reﬂected in its management strategies. With regard to quality and customer satisfaction, it is reported that Kawai has been promoting the introductionof ISO9001-certiﬁed quality management systems in order tomaintain and improve quality and services and that it has been
trying to raise customer satisfaction through “Customer HelpDesk” and “Customer Support Site.” With regard to governance,
this report mentions the Board of Directors effectiveness assessment for the purpose of improving the board’s administration andcapabilities, and the company’s continued commitment to enhancing the board’s capabilities. In addition, it describes the company’s BCP that summarizes various measures and methods related to a large-scale earthquake or other emergency that may
occur so that Kawai will be able to secure the safety of employees, minimize damage to its business assets, continue to be operational, and achieve full recovery of the entire operation immediately.
As discussed above, this report tells us that Kawai has
evolved its already industry-leading ESG initiatives into a form
suitable for disclosures pursuant to a world standard (TCFD). This
reﬂects growing global concern about environmental issues andconsequently growing weight of non-ﬁnancial considerations indetermining an enterprise’s value. Kawai is expected to develop
further as an attractive enterprise “in order to make the Corporation more creative and likable.” In appreciation for the third party comment
We express our deep gratitude to Professor Nakasaki for giving us valuable evaluation and comments continuously for this ﬁscal year.
The FY2023 report discloses four items, “Governance,” “Risk management,” “Strategies,” and “Indicators and goals,” under “Information disclosures pursuant to the TCFD (Task Force on Climate-related Financial Disclosures) recommendations.” It is a great honor toreceive a high rating for our stance on climate change, and we will stay committed to climate change initiatives.
The fact that in the “8th Sendai International Music Competition” and the “5th Takamatsu International Piano Contest,” top prize
winners and many other contestants used our full concert piano SK-EX, was taken as proof of excellence of Kawai’s technology andquality, and this word is a great encouragement to us.
We will continue to cherish harmonious coexistence with nature, further promote our cultural contribution, and endeavor to contribute to the realization of “a 100-year brand” and a sustainable society.
(Kawai Global Environment Committee Office)

KAWAI Report 2023

38

Kawai Musical Instruments Manufacturing Co., Ltd.
Contact:
Kawai Global Environment Committee
CS Environment Section, Corporate Planning Office200, Terajima-cho, Naka-ku, Hamamatsu City, Shizuoka Prefecture, 430-8665
TEL: 053-457-1252 FAX: 053-457-1300
URL: https://www.kawai.co.jp/