GLOBAL SANITATION SOLUTIONS. Investing In A Better Future

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1 GLOBAL SANITATION SOLUTIONS Investing In A Better Future

2 THE ISSUES 2.3 BILLION PEOPLE LACK ACCESS TO BASIC SANITATION APPROXIMATELY 900 MILLION PEOPLE DEFECATE IN THE OPEN ON A DAILY BASIS UNICEF/UN055381/Romana 800 CHILDREN UNDER FIVE DIE EVERY DAY FROM DIARRHEAL DISEASES ECONOMIC LOSSES ESTIMATED AT US$223 BILLION IN 2015 An estimated 2.3 billion people one out of every three in the world today live without access to basic sanitation, of which approximately 900 million still defecate in the open on a daily basis. These are figures with a devastating human cost: an estimated 800 children under five years of age die every day from diarrheal diseases caused by a lack of hygienic water and sanitary living conditions. Lack of basic sanitation in schools can cause girls to fall behind because they do not have anywhere to dispose of sanitary pads, forcing them to stay home during their menstrual cycles. This often causes girls to drop out of education, forming a vicious cycle that makes it difficult to break out of poverty. Not only is it embarrassing to defecate in the open, but having to find a place away from school or home to relieve themselves also puts women and children at risk of harassment and assault. This sanitation crisis cripples opportunities for growth and development in nations across the globe. According to research conducted by LIXIL in collaboration with Oxford Economics, global economic losses from poor sanitation were estimated at US$223 billion in 2015, an increase of over 20 percent from five years earlier. In the same year, poor sanitation cost the Asia-Pacific region an estimated $172 billion, Latin America and the Caribbean $22.2 billion, and Africa $19.3 billion. Global sanitation is an issue we can no longer afford to ignore. 1

3 LIXIL'S APPROACH DRIVING SCALE THROUGH STRATEGIC PARTNERSHIP To effectively tackle the sanitation crisis and contribute to the SDGs, LIXIL is focused on driving scale through building partnerships around shared goals with governments, NGOs, and other types of organizations. In July 2018, LIXIL and UNICEF announced Make a Splash! Toilets for All, a new, international partnership that will contribute to global efforts to UNICEF/UN /Sokhin improve access to basic sanitation for 250 million people around the world by LIXIL. Both partners bring years of of sanitation markets involving the knowledge and expertise to the table: development of enabling environments, LIXIL'S APPROACH Since 2013, the two organizations have collaborated on several projects in Africa to provide people in need of LIXIL as a maker of pioneering water and housing products, and UNICEF with its track record of improving improving product supply and skills, and supporting opportunities for affordable finance. LIXIL and UNICEF Every person on the planet dreams which are currently undergoing field which presents vast potential for global toilets with access to locally-adapted water, sanitation, and hygiene (WASH) encourage other companies and of a better home, and LIXIL s higher tests; and its Green Toilet System, economic growth while addressing sanitation products designed by practices in over 100 countries. organizations to enter and expand this purpose is to help them achieve that which has been installed in a refugee one of the most urgent and grand This new partnership seeks to market to help improve the future of all dream whether it is by renovating camp and which LIXIL plans to transfer challenges of our time, achieving provide people with access to quality children, families, and communities. their kitchen in Tokyo or by installing to a local company in East Africa to universal access to improved and sanitation products, putting an end their first toilet in Nairobi. increase its impact and reach even safely-managed sanitation (SDG6). to the health-threatening practice of In response to the global sanitation further. Through these activities, LIXIL The Sanitation Economy monetizes open defecation. Joint programs in crisis, LIXIL has pledged to provide is building sustainable businesses toilet provision, products and services, Ethiopia, Tanzania, and Kenya aim to better sanitation to 100 million rooted in local communities, helping biological resources, and data and showcase the business opportunities people by As a global leader to solve social problems, all while information to provide benefits across associated with demand for toilets in sanitary products, LIXIL is taking the technology and expertise it has contributing to the long-term growth of the company. the economy and society. According to research by the and other sanitation products and provide lessons for the development Note: UNICEF does not endorse any company, brand, product, or service. developed in global markets and To ensure we can expand scale as Toilet Board Coalition, a Geneva- applying it to the sanitation challenge. To address the world s complex, quickly as possible and that these activities are sustainable, LIXIL treats based partnership in which LIXIL is a founding member, the Sanitation SUSTAINABLE DEVELOPMENT GOALS multifaceted sanitation problems, SATO like any other business, the Economy in India alone is estimated The United Nations Sustainable like poverty, hunger, sanitation, and LIXIL is providing multiple solutions only difference being that the SATO to be a $62 billion per year market by Development Goals (SDGs) is a concrete gender equality, which lay the path for tailored to the unique circumstances business has both financial and social plan of action outlined in Transforming sustainable development around the and market needs of individual targets to achieve. Our World: The 2030 Agenda for world. regions. This includes its SATO range This approach of treating SATO Sustainable Development, which was LIXIL reflects the SDGs approach in of toilet products, which has been as a business, not as CSR, also adopted by the UN General Assembly its corporate responsibility strategy and commercialized; its Micro Flush Toilet demonstrates LIXIL s belief in the in The 17 goals outline over uses the goals as a broad guideline when System and Portable Toilet System, prospects of the Sanitation Economy, 100 global targets for important issues forming management decisions. 2

4 SATO TOILET SYSTEM Having to defecate in the open, into To deliver sustained improvements an open pit, or over an inadequate to sanitary conditions for as many pit latrine exposes millions of people people as possible, LIXIL is focused to odors and disease. To combat this on developing SATO operations in a problem, LIXIL has developed the tailored way to meet local needs. SATO series of products, the first Producing SATO toilets locally keeps model created with funding from the costs down and facilitates broader Bill and Melinda Gates Foundation and distribution. Selling SATO toilets through launched in Bangladesh in local partners creates employment Users pour in a small amount of and more concrete and entrenched water to flush away waste, after which local operations. By establishing a local a counterweighted trap door closes Make, Sell, Use cycle, individual regions to keep insects and odors away. can independently and consistently SATO products are safe for children, improve their own sanitary conditions. easy to clean, and affordable. Each *This is calculated by assuming an average of five one is designed to suit the needs users for every SATO unit shipped as of March and preferences of users in different regions. More than 1.8 million SATO units have been shipped, enabling improved sanitation for approximately 9 million people so far.* THE SATO V-TRAP CONNECTION SYSTEM In November 2017, LIXIL launched the SATO V-Trap Connection System (SATO V-Trap), a new product specially developed to meet the needs of the Indian market. The Indian government s Swachh Bharat Mission policy aims to eliminate open defecation in India by 2019, and approximately 80,000 toilets are being constructed across the country every day to reach this goal. Particularly in areas that lack underground sewage systems, the Indian government is promoting the adoption of Twin-Pit Pour-Flush (TPPF) latrine systems. However, traditional systems can be prone to clogging, and masonry work is required in order to switch the direction of human waste between the two pits. LIXIL s new SATO V-Trap has been specially developed to meet the needs of the Indian market. While retaining the original SATO design with a self-closing trap door, which helps to conserve water, minimize odor, as well as keep out disease-carrying insects, the SATO V-Trap is designed so users can switch the flow of human waste between pits easily. GREEN TOILET SYSTEM The Green Toilet System offers a compost-based system to treat waste. By separating solid and liquid waste, the toilet enables maintenance workers to easily collect waste from tanks and transport it to a treatment facility. Once turned into fertilizer and soil conditioner, it can be used for farming. The Green Toilet System also requires People that have actually used our product say that they can use the toilet throughout the year because they don t require as much water, while their children can go to the bathroom by themselves now, safely and without fear. Daigo Ishiyama, Director of Marketing and Technology, SATO business no water to transport human waste, circumventing the need for a traditional sewage system while protecting groundwater from contamination. With the help of the United Nations Human Settlements Programme (UN-Habitat), LIXIL was able to install the Green Toilet System in a refugee camp in Kenya, which will enable the local community to safely treat human waste and recycle it as fertilizer. In October 2018, LIXIL announced plans to transfer the technology to a Kenyan company, ACE Environmental Consultancy, to facilitate its widespread use with local expertise and infrastructure. 4

5 SATO TOILET SYSTEM SATO TOILET SYSTEM MORE THAN 1.8 MILLION SATO PRODUCTS WERE SHIPPED FOR USE AROUND THE WORLD, ENABLING IMPROVED SANITARY CONDITIONS FOR APPROXIMATELY 9 MILLION PEOPLE. UNHCR/Roger Arnold CASE STUDY: ROHINGYA REFUGEE SETTLEMENTS infrastructure in place that is more durable and can support thousands of people and meet humanitarian standards. SATO was chosen as one of for All project in Japan, to UNHCR to distribute in the refugee settlement areas where it operates as a focal agency. This helped to improve sanitary More than 730,000 Rohingya escaped the settlements standard toilet models conditions in preparation for the to the Cox s Bazar area in Bangladesh because of its affordable price and monsoon season. As of August 2018, since violence broke out in Myanmar s ability to minimize insects and odors. UNHCR and its partners constructed Rakhine State in August The This allowed humanitarian partners to more than 6,000 latrines, benefiting Each product in the SATO series is designed for the needs and preferences of its local users. Some toilets are made for regions that do not use concrete when building latrines, while other toilets are made for cultures that prefer sitting on a toilet to squatting over one. SATO toilets are currently used by local communities in over 20 In September 2017, SATO was chosen to receive funding through Grand Challenges Canada s Urban Sanitation Challenge. The SATO business is currently developing new production systems in several countries to reach LIXIL s goal of bringing safe sanitation to 100 million by It uses less water and is clean. It has a lid that opens and closes for odor control. That is good because you don t mind having a toilet in your home. vast majority reaching Bangladesh are women and children, and more than 40% are under the age of 12. Now that several months have passed since the attacks, it is now time to put TOILETS FOR ALL In 2017, LIXIL began its Toilets for All initiative in collaboration with UN organizations and international NGOs. create a standardized infrastructure and give the community an efficient way to maintain hygiene and remove waste. In December 2017, LIXIL donated 5,000 SATO toilets, raised through its Toilet and Africa totaling 208,805 toilets. The aim of this initiative is not only to donate SATO products to regions 125,000 refugees. countries, including Haiti, Mauritania, Ghana, Nigeria, Zambia, Malawi, Sanjay Patel, Home owner Buliya Khedi, Madhya Pradesh, India For every LIXIL shower toilet sold in Japan between April and September where there is an urgent need for them but also to raise awareness of global Rwanda, Uganda, Kenya, India, Nepal, 2017, one SATO toilet will be donated to sanitation issues within Japan. Bangladesh, Indonesia, and the developing countries, primarily in Asia Philippines. 6 7

6 MICRO-FLUSH TOILET SYSTEM Using far less water per flush than a regular toilet, and recycling sewage water to assist the flow in outside pipes, the Micro Flush Toilet System significantly reduces the consumption of precious clean water. It is particularly aimed at mitigating problems related to scarce or unreliable water resources in urban environments where the population is rapidly increasing. Suitable for both stand-alone homes and multi-unit buildings, the system avoids clogging of the sewage system and features a comfortable sitting-type toilet that is easy to clean and maintain. A flapper valve in the toilet bowl is operated with a handle, and the valve and accumulated water prevent odors from entering the room. A steeply angled pipe connected to the toilet and sewage water system assists the overall flow of waste. Drain Sanitary sewage storage tank Pump 1L 1L 1L Re-uses sewage water to carry waste PORTABLE TOILET SYSTEM PLANNING FOR THE FUTURE WaterAid/ Tom Greenwood The Portable Toilet System is an inhome sanitation product designed for urban slums that lack proper sanitation infrastructure. It is now being developed and field-tested to offer disadvantaged households a virtually Collection Station odorless toilet from which human waste can be collected and treated hygienically and efficiently. The system contains a compact stand-alone toilet and a collection station. The toilet is designed to Treatment Site minimize odors and can be easily placed in any household. Its removable cartridge can be transported from individual homes to a designated collection station, where the waste inside the cartridge is deposited and the cartridge cleaned. Professional waste treatment companies collect waste from the station and transport it to an offsite treatment center. The Portable Toilet System was recently tested in the Philippines with the cooperation of local public and private organizations, and feedback from people who used the system is now being reflected in product development. In response to the global sanitation crisis and its devastating effect on the world s people, LIXIL will continue leveraging its scale and expertise to deliver useful toilet solutions to developing communities. The challenges are complex, local, and enormous. No single organization can solve them alone. What we can achieve with partners is so much greater than what we can do alone, said Jin Montesano, Executive Officer and Senior Managing Director, Public Affairs, Investor Relations, External Affairs, Corporate Responsibility, LIXIL Group Corporation Our activities will also demonstrate the business opportunities evident in the sanitation economy, with the intention of encouraging more players to enter and expand this market, ensuring its sustainability. Most importantly, these activities will demonstrate that innovative partnerships between members of the public and private sector can and will improve the quality of life for people and build safer, happier futures for all. 8

7 LIXIL Group Corporation 36F, Kasumigaseki Building, Kasumigaseki, Chiyoda-ku, Tokyo , Japan *XW8700 * XW December