Past Efforts and Future Policies and Plans

Transcription

1 CSR Activity Report: CSR Management CSR Management Through the medium-term consolidated business plan PEGASUS, the Showa Denko Group, with its evolving, individualized chemicals, pursues the goal to contribute to create a society where affluence and susutainability are harmonized. As part of its CSR (corporate social responsibility) activities, the Showa Denko Group makes every effort to ensure that each of its employees undertakes Group activities in good faith and meets the expectations of Group stakeholders. Past Efforts and Future Policies and Plans The medium-term CSR plan launched in 2006 ends in Summarized below are the activities pursued over the past five years. An overview of medium-term CSR policies and plans from 2011 is also provided. (1) Corporate ethics and compliance [Summary of efforts from 2006 to 2010] While activities to establish compliance structures and educational programs are advancing according to schedule, further improvements must be made with respect to response to unrecognized violations of laws and ethical awareness among organizations and individuals. (2) General risk management The PDCA cycle (plan-do-check-act management system) for enterprise risk management has taken a firmhold in the company. The company has also invested heavily to achieve progress in long-term measures and in risk countermeasures. We will have the Group's PDCA cycle for enterprise risk management serve as the foundations for PDCA cycles applied to production activities, financial affairs, personnel and labor affairs, and response to legislation. We will address further integration and streamlining of these cycles. (3) Dialogue with stakeholders The Group strengthened tools for communication with society and with communities by expanding the scope of its CSR Report and publishing the Report on our website. Other activities, including guided plant tours and education on chemistry and the environment, have improved mutual dialogue. In this area, efforts to continuously build mutual trust are the keys. We will focus on developing methods to communicate information on our CSR efforts in line with characteristics of each country, local community and our form of operation. Each worksite will pursue activities tailored to its specific locale. Other Group measures will seek to more clarify our course of action and strengthen each employee s motivation and awareness regarding CSR. CSR policies for the period from 2011 to 2015 are based on the results above. [Policies for 2011 to 2015] Contributing to create a society where affluence and sustainability are harmonized (1) All employees worldwide shall act in clear awareness of corporate ethics and compliance issues. (2) Companywide general risk management shall function effectively at all levels at each worksite. (3) Efforts will ensure effective mutual dialogue with stakeholders and establish mutual trust. (4) Efforts will ensure compliance with guidelines for social responsibility (ISO 26000) and the reliable application of the PDCA cycle to core issues. Basic action each employee should take: Good-faith implementation of the Code of Conduct and its Guidelines The following page provides a summary of the plans and achievements in 2010 and plans for 2011 for each of the abovementioned items. 8 SHOWA DENKO CSR REPORT 2011

2 CSR-related Achievements in 2010 and Issues to Be Addressed Corporate ethics, compliance General risk management CSR dialogue with stakeholders Customers, consumers Shareholders Employees Partners Local communities, society Fully achieved Achieved 80% or more 2010 plans 2010 achievements Evaluation 2011 plans Responding to individual laws; education Improved response to antitrust law Improved account processing levels of Group companies Reviewing and revising the Code of Conduct and its guidelines Expanding education on corporate ethics and compliance Extracting unrecognized risks Compliance risk follow-up Organizing compliance education system Providing ethics education through levelspecific training Thoroughly implementing general risk management Provided integrated education on CSR, corporate ethics, and compliance Promoted risk response actions among sales personnel and other staff Identifying unrecognized risks Extracted risks with checklists BCP Extracting general affairs risks Reducing overseas risks Revising the content of CSR Report Incorporated countermeasure investments against major earthquakes in next mediumterm business plan Risk measures pertaining to community relations strengthened Began providing support for internal controls in China Issued digest version; posted full report on website Issuing site CSR reports Issued reports of 18 worksites Maintaining lines of communication with customers through business transactions Reducing complaints Continued improving quality assurance activities Reduced claims Raising awareness through group discussions and e-learning Disseminating and promoting use of corporate ethics hotline Simplifying and integrating various management systems (PDCA cycles) based on general risk management Promoting countermeasures to major earthquakes Follow-up for extracted items Providing support for risk management and internal controls to overseas subsidiaries (including those in China and other Asian countries) Integrating stakeholder engagement (mutual dialogue) Setting KPI (key performance indicator) for CSR Report based on dialogue with major stakeholders Promoting risk communication Maintaining dialogue with customers through business transactions Reducing complaints Promoting IR (promoting overseas IR) Promoted as scheduled Continuing activities to promote IR (promotion of overseas IR) Responding to SRI (socially responsible investment) movement Promoting cooperation with labor union concerning CSR activities Promoting programs to support the career advancement of female employees Human rights Globalization Promoting CSR procurement Promoting interactive communication Continued posting on SRI lists such as FTSE and MS Continued dialogue with labor union Continued CO2 diet *1 activities Provided education and raised awareness Established thoroughly implementation and application of child support policies Expanded career opportunities for female employees Expanded employment of handicapped persons Providing human rights education groupwide Continued employment of foreign national employees Provided feedback to partners engaged in self-assessments of CSR procurement Commenced CSR visits Promoted community activities, including plant tours, classes-on-demand, instructor dispatch, and internships Addressing issues in link with general affairs risk reduction Continuing response to SRI Continuing response to SRI lists Examining and implementing new activities Promoting programs for the career advancement of female employees Strengthening human rights efforts as part of corporate ethics promotion Continuing groupwide human rights education Promoting globalization Beginning global CSR procurement Contributing to local communities through in-house resources: classes-on-demand, environmental education, plant tours, internships Promoting CSR and environmental public relations (inside and outside the company) Site or area CSR reports worldwide CSR Management Social Commitment report Environmental Efforts Safety Efforts *1 CO 2 diet : In 2008, the Showa Denko Group initiated carbon-dioxide diet efforts. The key point of these activities is to have each employee declare his or her own efforts to reduce carbon-dioxide emissions and to strengthen his or her efforts while keeping a monthly self-assessment log on the corporate intranet. Progress on these efforts will proceed through labor-management cooperative efforts. SHOWA DENKO CSR REPORT

3 CSR Management Corporate Governance Corporate governance Showa Denko works to ensure the soundness, effectiveness, and transparency of its management and to continually improve its corporate value. To this end, the Group is improving its corporate governance *1 based on the following strategies: Strengthening compliance Strengthening management supervision and oversight functions Clarifying management responsibilities Rapid, effective decision-making and task implementation Strengthening the information disclosure system Corporate governance structure Decision-making/supervision Board of Directors Business execution President & CEO CSR Committee Group management General meeting of shareholders Risk Management Committee Corporate Ethics Committee Security Export Control Committee Responsible Care Committee Safety Measures Committee IR Committee Internal Audit Office Corporate Officers Business sectors Management Committee R&D Committee Business audit Accounting audit Audit Board of Auditors Auditors Cooperation While maintaining respect for the independence of affiliated companies, the Showa Denko Group has established its Vision, Code of Conduct, medium-term consolidated business plans, management policies, and annual action plans. Group affiliates undertake business activities in cooperation with sections in charge of their businesses and report on the execution of their business activities in accordance with Group management rules. Risk management is carried out on a Group basis in accordance with Group's risk-management rules. The Group works to ensure thorough compliance throughout the entire Group by establishing guidelines for corporate conduct based on business type and conditions of affiliates. Showa Denko auditors and internal-audit sections audit and examine the performance of affiliates as necessary. In addition, auditors work to ensure coordination with corporate auditors of key affiliates in various ways, including periodic meetings. Accounting office The Corporate Vision and the Showa Denko Group Code of Conduct In 1998, Showa Denko established a Code of Conduct, which stipulates standards of behavior and basic goals for group companies, executives and employees. Positioning the Code of Conduct as the Group's principles for promoting CSR, we have abided by the Code of Conduct since its establishment. The Code of Conduct is now being revised in light of ISO (guidelines for social responsibility) published in The Showa Denko Group's Vision We at the Showa Denko Group will provide products and services that are useful and safe and exceed our customers' expectations, thereby enhancing the value of the Group, giving satisfaction to our shareholders, and contributing to the sound growth of international society as a responsible corporate citizen. Code of Conduct 1. We will develop and provide useful and safe technologies, products, and services to contribute to the sound growth of society. 2. We will observe the laws of Japan and of foreign countries in which we operate, abide by the company rules and strive to maintain the social order. 3. We will conduct business in Japan and abroad based on the principle of fair and free competition. 4. We will do our best to ensure safety and to protect the global environment. 5. We will make sure that we maintain good communications with the public, and disclose accurate information on our company in a timely manner. 6. We will respect human rights and create a cheerful and comfortable working environment. 7. We will act as a member of the international society and contribute to the development of the regions in which we operate. Guidelines for the Code of Conduct Established in 1999, the Guidelines for the Code of Conduct provide specific examples to make the Code of Conduct easier to understand. The Guidelines were revised in 2005 and 2008 in line with changes in social trends. Our employees use the Guidelines to confirm that their speech and behavior is in compliance with the Code of Conduct. Affiliated companies have also established their own Guidelines, based on their own specific circumstances. Study began in 2011 on revising the Guidelines to reflect revisions in the Code of Conduct. 10 SHOWA DENKO CSR REPORT 2011

4 Management Organizations Board of Directors At Showa Denko, the Board of Directors is responsible for important decision-making and supervisory functions, while corporate officers are responsible for business execution functions. The Board of Directors consists of 8 directors, including one outside director. Chaired by the Chairman of the Board, the Board both determines the company's fundamental policies and considers and makes decisions on matters stipulated in the Companies Act and the Articles of Incorporation, in addition to decisions related to key issues regarding the execution of business operations. The Board of Directors also oversees each Director's executive actions. Board of Auditors Showa Denko employs an auditor system. The Board of Auditors consists of five auditors, including three outside auditors. Auditors attend meetings of the Board of Directors and other important meetings within the company, offer opinions when needed, and audit the execution of business operations, offering suggestions and advice to ensure that the Company operates in a sound manner. Auditors also seek to strengthen consolidated Group management by enhancing the overall auditing of Group member companies. Corporate Officers To ensure swift decision-making in the execution of business operations and to invigorate such operations, Showa Denko has adopted a corporate officers system. CSR Committee Showa Denko has established a CSR Committee at the highest management level to oversee all management strategies from a CSR perspective. Chaired by the President & CEO, the CSR Committee's membership consists of members of the Management Committee. Management Committee and R&D Committee Business-sector structure To clarify its system of responsibility for implementing business operations, Showa Denko has adopted a structure based on business sectors. To ensure thorough performance evaluations that focus on results, we have also implemented a system for evaluating the performance of business sectors. Committees Showa Denko has established a number of committees to handle specific issues central to the undertaking of its business operations. These include the Risk Management Committee, the Corporate Ethics Committee, the Responsible Care* 2 Committee, the Security Export Control Committee, and the IR Committee. Each committee conducts in investigations, research, and deliberations related to its areas of responsibility. Internal Audit Office As an organization under the direct authority of the President, the Audit Office performs internal audits. The Audit Office investigates the status of execution of company business operations, including those of Group member companies, and verifies their accuracy, appropriateness, efficiency, compatibility with Group management policies and plans, and soundness. These measures also include assessment of internal control over financial reporting as well as the planning, drafting, and implementation of various steps to maintain and improve the quality of such reporting. Legal Advisor Showa Denko works to ensure compliance with laws, obtaining advice on legal matters from its Legal Advisor as needed. Accounting audits Showa Denko works to ensure the soundness of its accounting practices, undergoing periodic accounting audits by certified public accountants. CSR Management Social Commitment report Environmental Efforts Safety Efforts Meeting weekly in principle, the Management Committee consults and makes decisions on issues to be submitted to the Board of Directors and on important general issues related to company management. The R&D Committee deliberates and makes decisions on important issues related to research and development. *1 Corporate governance: In the narrow sense, this term refers to the relationship between the shareholders and the managers of a company and the mechanism or structure of decision making and business operations in the company. In the broad sense, it refers to the relationship between the company and its stakeholders and is also related to the question, For whom does the company exist? *2 Responsible Care: Responsible Care is the chemical industry s global voluntary initiative, representing a commitment to work together to continuously improve the environmental, health and safety performance of chemicals over their entire life cycles, namely, the development, production, distribution, use, final consumption and disposal. SHOWA DENKO CSR REPORT

5 CSR Management Risk management Risk management Showa Denko regards risk management as one of the most important aspects of company management. As such, the company seeks to improve, maintain, and promote its risk management system. The Company has established a Risk Management Committee to promote risk management groupwide. This Committee prioritizes risks that threaten company policies, plans, and the Group as a whole based on assessments of their potential impact and likelihood. It also provides support for promoting measures to circumvent such risks and to respond to them should they occur. Major topics affecting the entire Group are presented for discussion at the CSR Committee, where decisions are based on deliberations from a wide range of perspectives. In addition, specific risks involving matters such as environmental protection, security and disaster prevention, chemical substances, quality, intellectual property, fair trade, export controls, and contractual agreements are managed through a system of prior examination and decision-making, in accordance with internal regulations. Actions taken in the event of emergencies, including accidents and disasters, are implemented as stipulated in the emergency situation action guidelines and other internal regulations. The risk-management PDCA cycle The Group has taken risk inventories since 2007, assessing the importance of risks, proposing and promoting risk countermeasures, and implementing annual reviews to strengthen risk management. The results of these efforts are summarized and presented at meetings of the Risk Management Committee. The information is organized into specific topics to be addressed companywide. When necessary, cross-functional efforts based on these topics are implemented companywide. Examples of companywide efforts include preparation of the Business Continuity Plan (BCP) for the event of large-scale earthquakes and countermeasures against a new strain of influenza (H5N1) in 2007 and 2008, and responses to actual outbreak of new influenza (H1N1) in Japan and overseas in In the review undertaken in 2010, we provided information on various cases to other workplaces within the Group to help identify risks from a broad-ranging perspective, including viewpoints not previously recognized. We also organized information on the progress in safeguards and countermeasures against major earthquakes, along with information on BCP efforts. Business Continuity Plan (BCP) Since 2007, each business section has prepared its own BCP. After establishing a promotion structure and formulating basic policies, each section performs a business impact analysis (BIA) and takes other steps to identify key, high-priority measures. This is followed by process analysis, including identifying bottlenecks for priority measures and considerations of strategies and countermeasures. These activities are documented and implemented fully through training and drills. Countermeasures against new influenza strains Based on the basic plan for responding to new influenza strains (H5N1), established in 2008 as a fundamental policy for such measures, all Group member companies have prepared their own action plans and drafted specific countermeasures corresponding to various alert levels. Specific measures focus on steps to prevent employee exposure to new flu strains and the spread of such viruses and on the BCP. These measures are discussed in detail in action manuals and implemented firmly through training and drills. With the actual outbreak in 2009 of the new H1N1 influenza strain, we implemented these measures after ascertaining accurate information on various related issues both in Japan and around the world, based on plans developed for the H5N1 influenza. Information Security With the rapid growth of the internet, the quality and quantity of the information a company can handle and the speed at which it can do so have grown dramatically. At the same time, the risk of information-related crimes and accidents has never been higher, including the theft of personal information, leaks of internal company information, and unauthorized alteration of company The risk-management PDCA cycle Listing risks Implementing countermeasures Management review Proposing countermeasures Assessing the potential impact Reviewing companywide tasks Analyzing current conditions Implementing risk countermeasure plans Sector summaries Company summaries 12 SHOWA DENKO CSR REPORT 2011

6 websites. Showa Denko has established Basic Guidelines for Information Security, Information Security Regulations, as well as Personal Information Protection Guidelines, seeking to develop a system to prevent information security incidents and to minimize any resulting damage to its business while ensuring business continuity. We are also proceeding with activities intended to raise employee awareness through e-learning-based training. This will ensure a thorough understanding of these basic guidelines and regulations throughout the organization. As part of efforts to maintain the effectiveness of our information security systems, we take steps to prevent unauthorized access from outside the organization, to prevent information leaks, and to strengthen information security governance at each overseas Group member company. Especially in 2009, we strengthened measures to prevent infections by and the proliferation of computer viruses. As part of its BCP, Showa Denko in 2009 sought to secure stakeholders' confidence by enhancing the reliability of its information networks, establishing a system for allowing employees to work from home in the event of disasters, and enhancing its measures to protect information assets from various threats. Compliance The Showa Denko Group places adherence to societal norms and business ethics at the top of its management agenda and emphasizes compliance in all management activities. In January 2003, we established the Corporate Ethics Committee to ensure legally compliant management. Since 2005, we have strengthened compliance organizations and systems in each business sector and at each site. Other efforts include preparing lists of and ensuring thorough compliance with applicable laws and regulations. In 2010, we strengthened support for subsidiaries in China. In 1987, in the area of security-related trade controls, we established the Security Export Control Committee, which works to enhance compliance with these controls. Corporate Ethics Hotline Our Corporate Ethics Hotline serves employees of all Showa Denko Group companies. The purpose of this Hotline is to prevent or quickly correct violations of corporate ethics or of laws, regulations, or company rules. Under this system, employees can report any concerns directly to the Corporate Ethics Committee, through the company intranet or , telephone, or post. Anonymous reports are accepted, but measures are in place to ensure no disadvantages occur when employees provide names. Other measures also ensure employees filing reports receive feedback on the results and that this feedback is adequate. Since January 2006, in addition to their availability within the company, these services have been made available at outside law offices. Corporate Ethics Month Since January 2004, we have designated each January as Corporate Ethics Month. During Corporate Ethics Month, all Showa Denko Group executives and employees are encouraged to carefully review the Code of Conduct and its Guidelines and to reexamine his or her actions in that light. Each year, all executives and managers are required to sign and submit a declaration of compliance with the Code of Conduct and the corresponding Guidelines. From 2011, executives of Group companies are also required to sign and submit a declaration of compliance with the Code of Conduct and the corresponding Guidelines. Case-study-based learning continues as part of Corporate Ethics Month, drawing on the company intranet and other means. An e-learning program for managers, introduced in 2009, continues to provide required training for personnel promoted to management positions. Security Export Controls Tools for corporate ethics education In 2009, the Foreign Exchange and Foreign Trade Act was amended for the first time in 22 years in response to changing conditions, including advancing globalization and growing importance of information technologies, as well as the increasing incidence of improprieties. In particular, in the area of technology exports, all international transactions are now subject to regulations, including the provision of technologies from residents in Japan to residents staying overseas. Regulations have been tightened for transactions related to the buying and selling of goods involving their movements between foreign states, and the brokering of technology between foreign states. Corresponding penalties have also been increased. The Showa Denko Group will therefore review its own systems and internal rules to ensure even more rigorous compliance with security export controls. The Showa Denko Group strives to prevent illegal exports through careful, multistage inspections of all products and technologies targeted for export, focusing especially on the following major aspects of export control: 1) identifying whether the items are subject to export restrictions; 2) confirming the applications of the items to be exported; and 3) reviewing customers and consulting with the relevant authorities in case of doubt. Personnel in charge of export operations participate in inhouse training programs, e-learning activities, outside training sessions, and practical skills certification exams to raise awareness of security export controls. Due to rigorous export control measures and efforts by the personnel concerned, there was no violation of the Foreign Exchange and Foreign Trade Act in 2010 with regard to our security export controls. CSR Management Social Commitment report Environmental Efforts Safety Efforts SHOWA DENKO CSR REPORT

7 CSR Management Responsible Care management Responsible Care Action Guidelines Showa Denko enacted the Responsible Care Action Guidelines in March, 1995 as its corporate policy related to the environment, safety, and health and declared that it would implement Responsible Care. Since then, all business sectors of the Company have been engaged continuously in the relevant activities under these Guidelines. These activities also are being expanded throughout the entire Group. In 2005 we signed the Responsible Care Global Charter, which contains international guidelines to Responsible Care activities, declaring our support for and intention to implement Responsible Care. Responsible Care Action Guidelines Global Responsible Care Verification Certificate Responsible Care Action improvement Guidelines ❶ Throughout the entire life cycle of chemical substances, we shall make our best efforts to review and improve business activities from the viewpoints of ensuring safety and health and protecting the environment. ❷ In manufacturing activities, we shall make our best efforts to reduce the burden on the global environment not only through conventional approaches to environmental protection but also through promotion of switching raw materials, energy conservation, waste reduction and recycling, and reductions in the release of chemical substances. ❸ In the development of new products and businesses and in the establishment, enlargement, and renovation of facilities, we shall undertake our best efforts to ensure safety and health and to protect the environment. ❹ We shall promote R&D and develop technologies that will contribute to the improvement of safety and health and to the protection of the environment. We shall also promote the marketing of alternative or new products. ❺ We shall investigate the effects of the products and materials we handle on safety, health, and the environment, and we shall encourage our employees to develop a deep knowledge of safe use and handling and provide our customers with such information as well. ❻ In overseas business activities, technology transfer, and international trading of chemical products, we shall give full consideration to ensuring safety and health and to protecting the environment. ❼ We shall comply with international rules and domestic laws and regulations and make our best efforts to cooperate with the relevant international organizations and both foreign and domestic regulators. ❽ We shall participate proactively in various activities related to environmental protection and make our best efforts to communicate with society and local communities to achieve better understanding and trust. Responsible Care promotion system Responsible Care activities are promoted by the Responsible Care Committee, throughout the Showa Denko organization and throughout the Group. As of June 2011, the head office, six business sectors (13 business divisions and 15 sites), three branches, the Corporate R&D Center, and 15 Group companies *1 engaged in Responsible Care activities. In addition, as part of its efforts to strengthen the Group's Responsible Care activities, Showa Denko is expanding the scope of such activities by ascertaining performance and providing on-site guidance concerning Responsible Care for domestic and overseas Group member companies involved in manufacturing. Furthermore, the Responsible Care Committee and the Risk Management Committee were placed under the CSR Committee to promote Responsible Care as a core element of our CSR efforts. Responsible Care promotion system Risk Management Committee Security Export Control Committee Corporate Ethics Committee President & CEO CSR Committee Safety Measures Committee Accident Prevention Subcommittee Occupational Health and Safety Subcommittee Responsible Care Committee Responsible Care Planning Committee Chemical Substances Release Control Subcommittee Waste Reduction Subcommittee Secretariat (Environment & Safety Office) Resource Saving/Recycling Subcommittee Aluminum Can Recycling Promotion Committee Energy Saving/Global Warming Issue Subcommittee *1 15 Group companies which work together with Showa Denko in promoting Responsible Care (as of June 2011): Tsurusaki Kyodo Doryoku K.K., Tokyo Liquefied Oxygen Co., Ltd., Showa Titanium Co., Ltd., Shinshu Showa Co., Ltd., Showa Denko Packaging Co., Ltd., Showa Aluminum Can Corp., Showa Denko Sakai Aluminum Co., Ltd., Showa Denko Electronics K.K., Showa Denko Kenzai K.K., Union Showa K.K., Niigata Showa K.K., Showa Aluminum Can Recycling Center, HI-PACK CO., LTD., Showa Tansan K.K., and Clean-S Showa Co., Ltd. 14 SHOWA DENKO CSR REPORT 2011

8 The PDCA cycle Auditing structure The Showa Denko Group works to achieve continuous improvement in its Responsible Care activities through the plan-docheck-act (PDCA) cycle of formulating Responsible Care activity plans (plan), implementing these (do), auditing and evaluating the results (check), and reflecting these via management review in the next round of objectives and activity plans (act). The PDCA cycle A Management review C Internal audit, evaluation of results Formulating management policies and objectives Continual improvement D P Activity plans Implementation The Showa Denko Group carries out the following audits at each stage, to confirm that activity plans concerning Responsible Care are implemented according to plans. Self-auditing Using checklists, the workplaces of Showa Denko and major Group companies evaluate their own Responsible Care systems and the status of its implementation, promoting continuous improvements by reporting to the Safety Measures Committee on the results of these self audits and reflecting such results in objectives and activity plans of the following fiscal year. Workplace auditing The Safety Measures Committee performs on-site audits of the state of efforts at sites operated by Showa Denko and main Group companies. The Committee also performs quantitative evaluations based on the results of audits, identifying weaknesses. Furthermore, it provides needed guidance and reports audit results to the Responsible Care Committee. The Responsible Care Committee reviews these results and reflects them in companywide and groupwide policies, objectives, and plans. At manufacturing companies within the Group, both in Japan and overseas, other than the above companies, Responsible Care efforts are subject to onsite checking of their status and to on-site guidance. Overall auditing The Internal Audit Office audits the status of Responsible Care measures throughout Showa Denko and reports on the results of these audits to the Responsible Care Committee. Third-party verification CSR Management Social Commitment report Environmental Efforts Safety Efforts Showa Denko has undergone third-party verification *2 in such aspects as Responsible Care activities and the accuracy of data collection. The content of this CSR Report 2011 has been verified by SGS Japan Inc. In the future, we will continue to draw energetically on thirdparty verification to ensure continued improvements in our Responsible Care systems and in our performance. *2 Third-party verification: This term refers to the verification of the information or data in sustainability reports or environmental reports of a company or association when the verification is conducted by an organization independent from the company or association in concern. SHOWA DENKO CSR REPORT

9 CSR Management Responsible Care Activities Plan: Achievements in 2010 and Targets for 2011 Every two or three years, the Showa Denko Group establishes a medium-term Responsible Care activities plan, which is then used as the basis for annual action plans during the period covered. All workplaces promote Responsible Care and draft detailed action plans based on the comprehensive plan, tailored to local conditions and circumstances. The following table lists the policy, plans, achievements, and ratings for primary activities undertaken in 2010, together with the policy and plans for We will continue these efforts to achieve our goals. Environmental conservation 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans Environmental management [policy] Zero environmental problems Steady implementation and comprehensive awareness of Active Safty efforts (utilizing checklists to prevent environmental problems) Planning and implementing reductions in potential risks Global warming initiatives [policy] Achieving the unit energy consumption target of 80% or better Creating energy conservation measures [policy] Achieving Kyoto Protocol targets by the Showa Denko Group Implementing reduction plans at each site Reducing industrial waste [policy] Achieving zero emissions Eliminating landfill waste through efforts such as more effective use of sludge Showa Denko: 1,900 t or less Showa Denko Group: 3,100 t or less [policy] Contributing to a recycling-based society Promoting recycling Target of zero environmental problems achieved by Showa Denko Group. Using checklists to prevent environmental problems Implementing risk reduction measures at each site Unit energy consumption: 91.8% (compared to 1990 levels), down 0.3% from 2009 Implementing regular reporting Greenhouse gas emissions: 20% reductions at Showa Denko, 19% reductions across entire Showa Denko Group (compared to 1990 levels) Implementing the plan to achieve Kyoto Protocol targets in promise period (by Showa Denko) 2009 unit energy consumption as designated shippers and reduction plans for 2010 reported to authorities Landfill waste: 2,591 t (down 161 t from 2009) across Showa Denko Group; targets achieved Chemical-recycling production: up 4% from 2009 Paper-recycling rate (head office): 85% (up 2% from 2009) Aluminum can recycling: Group participation rate 94%, with each employee bringing in an average of 191 cans over a three-month period Fully achieved (100%) Achieved 80% or more Achieved less than 80% (Numerical data without range indications apply to Showa Denko only.) [policy] Zero environmental problems Steady implementation and comprehensive awareness of Active Safty efforts (utilizing checklists to prevent environmental problems) Planning and implementing reductions in potential risks Responding appropriately to revised laws [policy] Continuously reducing unit energy consumption Creating energy conservation measures [policy] Achieving Kyoto Protocol targets for the Showa Denko Group by itself; preparations for post-kyoto Protocol Implementing reduction plans at each site [policy] Achieving zero emissions Eliminating landfill waste through efforts such as more effective use of sludge Showa Denko (two sites added): 2,200 t or less Showa Denko Group: 2,500 t or less [policy] Contributing to recycling-based society Promoting recycling Security and fire prevention 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans Equipment safety [policy] Zero equipment incidents Holding and utilizing Active Safety study meetings Enhancing the engineering change management system Promoting voluntary safety initiatives Showa Denko: Two cases of leakage, one case of fire, one case of damage (one case in 2009) Group companies: Two cases of leakage, one case of fire (one case in 2009) Active Safety activities expanded to and implemented by affiliated companies and research facilities Function-specific personnel meetings (electric, instrumentation, machinery, process) planned Oita Complex: Certification as continuous high-pressure gas operation site renewed for fourth consecutive year [policy] Realizing zero equipment incidents Thoroughly implementing Active Safety activities Organizing and applying function-specific personnel meetings Thoroughly implementing HRM* 1 examination Promoting voluntary safety initiatives Occupational safety and health 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans Occupational safety and health [policy] Zero lost-time and non lost-time injuries Enhancing safety strength of worksites and personnel Addressing equipment and process deficiencies Improving safety management levels (expanding attainment of Occupational Safety and Health Management System accreditation) Lost-time injuries in Showa Denko: one case (three cases in 2009), losttime injuries in Showa Denko Group: One case (one case in 2009) Non lost-time injuries in Showa Denko: One case (three cases in 2009), Non lost-time injuries in Group companies: 0 cases (three cases in 2009) Rate of incidents resulting in lost-time injuries in Showa Denko Group: 0.14 (0.29 in 2009) Oita Complex, Shiojiri Plant, and Showa Denko Electronics K.K. win Accident-free Record Certification from the Ministry of Health, Labor and Welfare. Oita Complex and Ohmuta Plant of Showa Aluminum Can Corp. recognized by third-party safety awards Higashinagahara Plant, Shiojiri Plant and Kitakata Plant certified under the Occupational Safety and Health Management System (total of 11 sites now certified) [policy] Zero lost-time and non lost-time injuries at each site Establishing the chemical industry s strongest safety management system Enhancing safety strength of worksites and personnel Addressing equipment and process deficiencies Improving safety management levels Following up on special safety activities and strengthening measures to prevent similar incidents 16 SHOWA DENKO CSR REPORT 2011

10 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans Occupational health [policy] Zero work-related illnesses *2 Enhancing sanitation management structure Improving work environment and work methods Health management [policy] Promoting Showa Denko Group Health 21 Plan Enhancing health support system Mental-healthcare efforts at worksites Chemical substance safety Zero work-related illnesses Implemented preventive activities to reduce lifestyle-related diseases in accordance with Showa Denko Group Health 21 Plan Twenty-six sites, divided into five groups, presented examples of activities and exchanged opinions Policy for promoting Health 21 Plan activities for the next two years determined in general worksite meetings Promoted participation in third-party seminars for improving skills of public health nurses and other nurses Mental health care seminars planned by each worksite Provided stress check sheets to employees during National Industrial Hygiene Week [policy] Zero work-related illnesses Enhancing sanitation management structure Improving work environment and work methods [policy] Addressing common priority targets specified in Showa Denko Group Health 21 Plan Common priority targets (1) Preventing or improving incidence of lifestyle-related diseases (BMI, blood pressure, fat, blood glucose) (2) Enhancing mental healthcare efforts (3) Reducing smoking rates Effectively applying health management system 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans Chemical substance management [policy] Zero accidents/incidents involving chemical substances or violations of chemical substances legislation Comprehensive implementation of compliance, education, and management structures Collecting, assessing, and providing safety information (REACH compatibility, etc.) [policy] Reduced chemical emissions Developing and implementing reduction plans for each worksite Quality assurance Quality assurance Zero accidents/incidents involving chemical substances or violations of chemical substances legislation Revision to GHS* 3 -compatible MSDS* 4 promoted (completed for substances for which notification is required by Industrial Safety and Health Law) Chemicals Management Officer provided information on relevant legislation and follow-up training. Completed registration of substances under the REACH* 5 regulations before deadlines for substances that must be registered by 2010 Completed notification under the CLP regulation* 6 before deadlines and amended CLP compliant labels and MSDS Emission of PRTR-listed substances: 316 t, up 35 t from 2009 (increased number of target substances due to legal updates) Emission of toxic atmospheric pollutants: 33 t, down 28% from 2009, target achieved [policy] Appropriate response to revisions in domestic and overseas laws Comprehensive implementation of compliance, education, and management structures Collecting, assessing, and providing safety information Establishing comprehensive chemicals management database [policy] Reducing chemical emissions Thoroughly disseminating information on PRTR revisions Developing and implementing reduction plans for each worksite 2010 policy and plans 2010 results and progress Evaluation 2011 policy and plans [policy] Making products that offer total safety in use No product accidents, no major complaints Securing product safety (performing appropriate risk assessments for newly developed products and specified products; ensuring compliance with inspection standards for products subject to absorption by or contact with the human body) Thorough quality control (setting and pursuing challengingly high target values to achieve significant reductions in customer complaints) Product safety secured and zero product accidents maintained by performing appropriate risk assessments for newly developed products and specified products and by ensuring compliance with inspection standards for products subject to absorption by or contact with the human body Customer complaints reduced by 30% (compared to 2009 figures) by setting challengingly high reduction targets and thorough implementation of corresponding measures [policy] Making products that offer total safety in use No product accidents, no major complaints CSR Management Social Commitment report Environmental Efforts Safety Efforts *1 HRM: High Risk Material *2 work-related illnesses: Legally recognized work-related sickness by the Workers' Compensation Insurance Law. Appearing symptoms of illness caused by exposure to harmful factors under circumstances of employers' control. *3 GHS: (Globally Harmonized System of Classification and Labelling of Chemicals) This is a system for classifying the hazards and toxicity of chemical substances according to certain criteria, reflecting the results on labeling and MSDS, and using these to prevent accidents and protect human health and the environment. *4 MSDS: (Material Safety Data Sheet) This is a document provided by the supplier to the user (customer) of a chemical substance, covering such matters as its name, toxicity, and physical/chemical properties; cautions concerning its handling and storage; and emergency measures. *5 REACH Regulation: EU Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals *6 CLP Regulation: EU Regulation on Classification, Labeling, and Packaging SHOWA DENKO CSR REPORT