CSR REPORT 2004 Report on Corporate Social Responsibility Activities What Is Toppan’S Social Responsibility?

S eot2004 Report CSR

CSR REPORT 2004 Report on Corporate Social Responsibility Activities What is Toppan’s Social Responsibility?

What exactly is Corporate Social Responsibility (CSR)? This is a question with no easy answers. The size, values, and industry in which a company operates all have a bearing on its CSR.

For Toppan, the question becomes: What is the social responsibility of a leading company in the information communications industry? During fiscal 2003 Toppan reviewed its past activities and defined the roles it should play and social responsibilities it should fulfill in the future.

This CSR Report 2004 provides an overview of Toppan’s independent vision of social responsibility and current endeavors to fulfill this responsibility. The company welcomes the comments and views of readers. Contents

Executive Message ------2

Business Activities and Social Responsibility------4

Toppan’s History and Value System ------4

Business Fields and Society ------6

Corporate Governance and CSR Activities------8

Comprehensive Corporate Governance------10

CSR Activity Highlights------12

Topics 2003------12

Roundtable Discussion: What We Expect from CSR ------17

Social Report------23

Compliance ------24

Improving Customer Satisfaction ------30

Respecting and Leveraging Human Assets------36

Activities for Society and Culture------42

Social Activity Highlights------46

Environmental Report------47

Toppan’s Environmental Vision ------48

Environmental Management Activities ------54

Eco-protection Activities------58

To the Readers Eco-creativity Activities ------64 This CSR Report 2004 is a communication tool to disclose information to Environmental Communication Activities ------70 stakeholders and solicit their comments. The report was prepared with the following points in mind. Environmental Activity Highlights ------73 (Please refer to P. 79 for an explanation of the scope of the report and other details.) Independent Review/Third-party Opinion ------74

IReadability Independent Review ------74 To identify the requirements of prospective readers, Toppan referred to a set of reporting guidelines issued by the Ministry of Economy, Trade and Industry in Third-party Opinion------76 2001 (Environmental Reporting Guidelines 2001—With Focus on Stakeholders). Clarity and readability were foremost considerations in planning out the orga- Data Report------77 nization of the material, layout, color schemes, typeface, and font sizes. Basic Reporting Data ------78 IReliability AZSA Sustainability Co., Ltd. (formerly the Environmental Management Depart- Social Performance Data------80 ment of Asahi & Co) has provided an annual independent review of Toppan reports on the environment and social responsibility from fiscal 2000 onward Environmental Management Data------84 (starting with the 2001 report). This year, Toppan also sought the opinions of an authority in the CSR field and held a roundtable discussion with experts in several Eco-protection Data ------86 industries. Eco-creativity Data------90 ICompleteness and Materiality ------The contents of this report were strictly chosen on the basis of Toppan’s busi- Environmental Communication Data 91 nesses, the following sets of guidelines, and feedback returned from surveys ------on socially responsible investment: GRI Guidelines Reference Index 92 •Environmental Reporting Guidelines (fiscal year 2003 version) of the Ministry of the Environment •Environmental Performance Indicators for Businesses (fiscal 2002 version) of the Ministry of the Environment •Environmental Accounting Guidelines (2002 version) of the Ministry of the Environment •Sustainability Reporting Guidelines 2002 from the GRI (Global Reporting Initiative) Publication Dates In addition to appearing in print once yearly, this report is available on the Published in December 2004 (Toppan published the Environmental Report from Toppan website, along with environmental performance data on each site, the 2000 to 2003). Toppan plans to publish the next report in December 2005. latest information on ISO 14001 certification throughout the company, and other timely data. The Toppan website is regularly updated. Inquiries on Content and Contact Information Toppan Printing Co., Ltd. (Tokyo, Japan) URL for CSR Report Compliance Department, Legal Affairs Division http://www.toppan.co.jp/english/corporate/csr/index.html E-mail: [email protected]

1 Toppan’s Mission for Society

Since the founding of the Toppan Printing Limited Partnership in 1900, its printing-based businesses have been closely tied with the development of Japan’s information culture. Working in partnership with its customers, shareholders, business partners, local communities, and stakeholders in every field, Toppan has grown together with Japan. When Gutenberg invented the printing press some 500 years ago, he created a medium to spread information and human emotions with an efficiency and speed previously unknown. With the birth of printing, people on different continents could see the same information at the very same time. Within a matter of decades, printing became a crucial medium for communication in the development of society and industry. Wherever there has been printing, culture has flourished. Our company was founded by a group of printing engineers from the Printing Bureau of the former Finance Ministry who wanted to contribute broadly to society through printing technology. Nowadays, more than a century later, printing plays the same role in society and the company serves the very same purposes that its founders intended. The change has come in the technologies: with the rapid emergence of IT, digitalization, and new media, the techniques used to convey and express information through printing have evolved dramatically. The social mission of the Toppan Group of today is to convey information, foster culture, and contribute to fulfilling lifestyles through its printing-focused businesses. We envision a day when our products and services help all members of society lead rich and rewarding lives. The Toppan Group transmits information and culture that link people to people, people to companies, and companies to companies.

Contributing to Fulfilling Lifestyles

Keeping the Trust of Society

To benefit society most, the Toppan Group must continue to earn the trust of the people around it. Economic goals must be aligned with a tremendous range of activities to conserve the environment, uphold human rights, and benefit society in other ways. We recognize that a voluntary commitment to defining a path to co-exist with society and the environment is indispensable. In 2000, as Toppan reached the centenary of its founding, we defined our vision of the future in Toppan Vision 21. In the years to come, every activity that Toppan undertakes will be in some

2 Executive Message

way directed towards this vision. Toppan Vision 21 is made up IImproving Customer Satisfaction: We will strive to see things from of a number of core components that interrelate in important the customer’s perspective. Through our work with knowledge ways. At the top of the hierarchy are the Corporate Structure and and technology, we will devote ourselves to the creation of Business Fields. The former includes a Corporate Philosophy, a products that bind us to our customers in a relationship of trust Corporate Creed, and a set of Conduct Guidelines that express based on responsibility, passion, and skill. our most important values and standards. The latter, the Business IRespecting and Leveraging Human Assets: Through our strict Fields, directly reflect the foregoing. commitment to human asset development and respect for indi- The Corporate Creed is a set of five fundamental principles viduals, we will foster employees that continue to expand their based on the Toppan Corporate Philosophy. Each of these serves abilities and meet their full potential. The people within the as a standard for the corporate activities that Toppan undertakes Toppan Group will share both their work and enjoyment within on a group-wide level. a corporate atmosphere that is gratifying and rewarding to When translated into action, the Corporate Creed places the inhabit. utmost importance on the following: IActivities for Society and Culture: As a leader in the information 1. Building a relationship of trust with customers. communications industry, we will develop activities to promote 2. Developing our business with a global perspective and rein- social and cultural progress. We will also work to create a rich forcing our strengths in marketing and technology. cultural environment in partnership with local communities. 3. Recognizing our social responsibilities as a corporate citizen, ICommitment to the Environment: Under the initiatives set forth particularly in bettering the environment and upholding cor- in Toppan’s Declaration on the Global Environment (1992), we porate ethics. will continue to alleviate the environmental burden of our operat- 4. Creating a corporate atmosphere in which individual abilities ing activities by proposing, developing, and providing environ- are respected and leveraged as a strength for the whole team. mentally-friendly products and services that coexist in balance 5. On the basis of the foregoing, striving to increase the value of with our irreplaceable global environment. our company, pursuing possibilities, and becoming a company that all of our shareholders and other stakeholders value. In our ongoing efforts to clearly define our Corporate Social Responsibility (CSR), we have established a new framework for our On the Publication of This Report corporate commitment by rethinking our activities from the past, To explain our commitment fully, this year we decided to publish particularly those closely shaped by our Corporate Philosophy and this CSR Report in place of the environmental report that Toppan Corporate Creed. This framework will become even more impor- has been publishing annually since 1998. Through reading this tant for the management of the company as we push ahead in report, we hope that a great many customers and others will come our efforts to earn unqualified trust as a corporate citizen. to understand and appreciate the activities of the Toppan Group. The Toppan Group will continue to shape and reshape its activities to meet the priorities described above in an ongoing effort to The Six Major Themes of Toppan’s CSR build a Toppan that society recognizes as a true and worthy corporate citizen. The details of our progress will be fully reported in Toppan has compiled a list of six overriding themes to guide its a document like this each year. activities in the realms of economy, society, and the environment. We hope to merit the unwavering support and guidance of our Through this approach, the Toppan Group will be renewing its customers, stakeholders, and society as a whole in the coming years. commitment to return greater rewards to stakeholders based on its Corporate Creed. September 2004 ICorporate Governance: We will perform our management activities rapidly and efficiently with a robust commitment to forming clear managerial strategies, strengthening our supervisory and auditing capabilities in corporate management, and improving the transparency of our managerial activities. ICompliance: We will conduct our corporate activities in strict Naoki Adachi President & CEO observance of corporate ethics and all applicable legislation and Toppan Printing Co., Ltd. regulations. All employees will follow our corporate Conduct Guidelines with an unwavering sense of ethics and morality.

3 Toppan’s History and Value System Since its founding in 1900, Toppan has fostered the advancement of society with its printing-focused businesses. As Toppan reached its centenary at the turn of the millennium, it devised a new system of values to define its roles and contributions as one of Japan’s leaders in information communications in the 21st century. We call these values Toppan Vision 21.

Toppan’s History progress of civilization; thirdly, it was used to publish translations, novels and magazines that enlightened the populace and encour- Toppan was founded in 1900 by a group of printing engineers aged the establishment of the modern state. from the former Finance Ministry who wanted to build an industry Over the 100 years since its beginnings, Toppan has expanded around the most advanced steel-based printing machine of the its operations and worked for the betterment of society in many time, the Erhört Letterpress. The age was one of flourishing tech- new areas while maintaining its focus on printing. Toppan has nology and industry. The Europeans of the day were flocking continued to advance our information culture by printing books, to the International Paris Exhibition, while Japan was steadily magazines, pamphlets, calendars, food packages, wallpaper, and building up its modern industries in the aftermath of the Meiji countless other items essential to daily life. In the field of electron- Restoration. ics, Toppan enriches lifestyles by manufacturing products such as Japan’s printing industry of the early 20th century contributed photo-masks and color filters. to society in three significant ways. Firstly, printing was used to In the second half of the 1990s, the information technology create banknotes, bonds and securities, important ingredients in revolution gained momentum and accelerated the dismantling of the establishment of modern capitalism; secondly, it was used to borders between markets. With the increased diversification of publish newspapers, the medium for public discussion on the information media and migration from analogue to digital technologies in the printing industry, the information processing technologies used in printing became highly sophisticated. The result was a flourish of new activity in the printing industry in the much broader context of information communications. To continue growing and fulfilling its social responsibilities as a leader in the information communications industry in the 21st century, Toppan created Toppan Vision 21, a declaration of the company’s vision, at its centenary in 2000.

The Erhört Letterpress— the origin of the company’s name (letterpress = Toppan)

Corporate Philosophy

Head office and factory of the newly founded company (1900) Each of us shall

reciprocate our customers’ continued trust,

create dedicated products by

harnessing our vibrant knowledge and technology,

and contribute to a fulfilling lifestyle as

New and reprinted magazines from the postwar a mainstay of information and culture. period (1945–1948)

Banknotes issued just after the war

4 Business Activities and Social Responsibility

Toppan’s History and Value System

Toppan’s Ideas IRecognize the universal role of printing as a medium for information and culture. The Toppan Vision 21 declaration is based on Toppan’s new ICreate fulfilling lifestyles within society by giving shape to the Corporate Structure and Business Fields. The Corporate Structure, in aspirations to communicate both on individual and corporate turn, is made up of three elements: Toppan’s Corporate Philosophy, levels. its Corporate Creed, and its Conduct Guidelines. These elements specify the complete system of values and standards of the Corporate Creed and Conduct Guidelines Toppan Group. The Corporate Creed expresses standards that Toppan applies to its activities. The Conduct Guidelines build on the Corporate Corporate Philosophy Philosophy, elaborate the Corporate Creed, and express the The Corporate Philosophy underpins Toppan’s corporate activities behavioral norms for individual employees on the basis of compli- and defines its most important values and thinking. Each of the ance and corporate ethics. six lines of the Corporate Philosophy has the following meaning: Under no circumstances will any member of the Toppan Group engage in an operational activity that infringes the rules of society Toppan and all of its members shall: or poses any risk of environmental or social harm. Further, the IShare these values and bear the responsibility of upholding group understands that any faltering in the development of its them. operational activities may make it difficult to guarantee a prof- INurture and develop a relationship of trust with customers. itable return for society. IContinue and strengthen its operations through the ever more The Conduct Guidelines are to be closely observed by every skillful use of color (the property crucial for creativity, detail, and employee if Toppan is to fulfill its social obligations as a corporate faithful reproduction in printing), knowledge (marketing and citizen. The strict enforcement of these guidelines will continue planning), and techniques (technology). indefinitely. ITake pride in its products and services and recognize their importance as creations for the customer.

Corporate Creed Conduct Guidelines

Chapter 1 To build our customers’ trust through Basic Principles sincerity, enthusiasm, and creativity 1. Respecting basic human rights in all our corporate endeavors. 2. Maintaining public order and standards of To strive for total innovation from a global decency perspective by conducting marketing and 3. Complying with laws and ethics technological development rich in originality. 4. Conducting fair business operations To conduct fair and open business operations 5. Appropriate disclosure of information while acknowledging our social 6. Environmental and safety considerations responsibilities and aspiring for harmony with our global environment. Chapter 2 To create a positive working environment by Outline of Conduct Guidelines maximizing our individual talents and strengths as a team. Section 1 Building customer trust Section 2 Reforming operations To enhance our corporate standing and Section 3 Fulfilling corporate responsibilities promote the continual development of the Toppan Group through Section 4 Creating a positive work the exploration of new possibilities. environment Section 5 Developing the Toppan Group

5 Business Fields and Society Toppan has developed a rich array of technologies to enable printing on diverse materials and to expand the applications of information communications in this new information age. Toppan strives to enrich society by disseminating its vibrant knowledge and technology.

Expanding Fields of Business IEstablishing independence and originality IPromoting software or service-based businesses Through ongoing research and development to meet customer ITransformation into a global company needs, Toppan continues to conceive new products and services, As a first step in forming Toppan Vision 21, Toppan has recon- to produce them with ever greater technical skill, and to market sidered its six main areas of business and allocated them into them with increasing efficiency. In parallel with its work to develop three new fields: Information & Networks, Living Environment, new printable metals, plastics, and other materials, Toppan is creat- and Electronics. In addition, the company added Personal Services ing printing technologies for a growing range of electrical compo- and Next-generation Products, as two entirely new fields to be nents, holograms, and other innovative applications. And with expanded in the coming years. In all five of these newly defined each new product Toppan develops, the services to accompany fields, the company introduced the concepts of “soft” and “ser- them have developed into new business activities. To take one vice-based” businesses to its range of operations and laid down example, the planning, special processing, and filling of food plans to strengthen them. Personal Services consists of services packaging have grown into important operations for the company. that Toppan offers directly to individuals, while Next-generation Toppan’s original businesses, the printing of cigarette papers Products refer to the development of functional industrial materi- and textbooks, have expanded into six business areas over the last als that link with the next generation. With the establishment of 100 years: securities and cards, commercial printing, publications these five business fields, Toppan seeks to become a global leader printing, packaging, industrial materials (building materials), and in the information communications industry. electronics. IInformation & Networks: supporting the businesses of our customers with services to process, manage, and administer con- Restructuring Toppan’s fields of business tent such as images, text, and acoustics; and enabling the Toppan Vision 21 is a vision of Toppan positioned to thrive as it efficient creation of new value through the use of this content. moves further into the 21st century in an environment of global- ILiving Environment: providing products and services that con- ization, advancing information technology, evolving industry tribute to comfortable lifestyles while meeting the needs of structures, environmental plight, diversifying lifestyles and value both individuals and society from environmental and other systems, and a dramatically changing business climate. Three standpoints. strategies form the core of this vision.

Toppan’s Business Fields

Next- generation Products

Electronics

Vibrant Packaging Living Knowledge Electronics Environment and Technology Personal Services

Information & Networks

Industrial materials Optronics

Securities and cards Commercial printing Publications printing E-business

6 Business Activities and Social Responsibility

Business Fields and Society

IElectronics: providing high-performance parts and electronics The Relationship with Stakeholders products and services in the fields of semiconductors and displays. IPersonal Services: providing valuable information, products, and Without strong ties to stakeholders, Toppan’s businesses would services to individual users by leveraging our information tech- quickly cease. The company recognizes the importance of main- nologies, digital and security technologies, and marketing skills. taining good communications and building closer relationships of INext-generation Products: developing high-performance indus- trust with stakeholders. In a structured approach to these ends, trial materials for markets with large growth potential based on Toppan has defined five categories of stakeholders upon whom technologies such as coding and photo-lithography. its business activities deeply depend: customers, business partners, communities, employees, and shareholders. Transformation into a global company Toppan has operated and staffed locally incorporated companies Giving shape to ideas: a company that realizes possibilities and representative offices in Asia, the Americas, Europe, and The Toppan of the 21st century serves a customer base of more Oceania for many years. As a next step, the company plans to than just companies: Toppan serves people, finds the possibilities strengthen the functionality of this industrial network in ways that in every customer’s ideas, and realizes them one by one. By open- enable these overseas sites to interact more organically. Toppan is ing up new worlds of possibility for customers, the company also actively pursuing information exchanges on the latest tech- delights and surprises society itself. Internally, Toppan also strives nologies by forming technology partnerships and joint operations to realize the ideas of its own employees and the possibilities they with strong overseas enterprises. Toppan is leveraging its business hold. This is a corporate stance that Toppan is already taking. activities in a globalizing market with plans to evolve into a global corporation that can surmount the barriers of country, language, and geographical distances as borders are dismantled in markets for technology, human assets, capital and other business resources.

Relationships between Toppan and Stakeholders

Customers Toppan’s customers are not just the enterprises with which Toppan does business, but all individuals in society. Toppan strives to merit the trust of its customers by satisfying their requirements, staying attuned to the latest changes in the environment, and adapt- ing to the trends of the times with sincerity, enthusiasm, and creativity.

Shareholders Business Partners A complete and accurate understanding of Toppan’s activities is crucial to Another crucial ingredient in strong shareholders and investors. Toppan customer trust is a steady relationship understands this and goes to great of trust and cooperation with the sup- lengths to disclose its corporate infor- pliers that provide the raw materials, mation and explain its activities in the plants that manufacture products a timely and appropriate manner. By in tie-ups with Toppan, and the other developing its businesses and increas- companies with which Toppan does ing its corporate value, Toppan aims business. Toppan is building a system to be appreciated by shareholders and to foster good trading relationships by society alike. conducting business on an equal foot- ing with its partners in a fair and open manner.

Employees Communities The efforts of its employees are the sin- The business conducted by Toppan gle largest resource for Toppan’s busi- affects local communities and the ness. Toppan strives to create a lively, global environment in many ways. energizing workplace and cultivate the Toppan strives to conserve the envi- individual abilities of its employees as ronment, win the trust of communi- a token of its respect for them and ties, and benefit society as a corporate gratitude for their contributions. citizen.

7 Corporate Governance and CSR Activities Toppan’s social responsibilities multiply as its business activities expand. In response, Toppan is pushing to strengthen its corporate governance system and completely rethink its relationship with society and the issues to be addressed. Toppan’s system to promote CSR activities is rapidly evolving.

Toppan Corporate Governance sion-making process that pursues efficiency via the work of a Management Committee made up of executives from the head A central part of Toppan’s business strategy is to continuously office. In addition, Toppan has established a Center Head Com- develop, increase its corporate value, and win the approval of mittee made up of division chiefs and executives from the head shareholders, customers, and ultimately, society as a whole. To office to directly implement activities and review them from vari- succeed at this strategy, Toppan’s management has embraced an ous perspectives. extremely serious commitment to the strengthening of corporate governance. Corporate Auditors and auditing firms Toppan has adopted an audit system in accordance with Toppan has adopted an audit system that requires regular inspec- Japanese Commercial Law. The company has strengthened its tions to assess whether all aspects of company operations are car- corporate governance system by establishing an Internal Auditor’s ried out smoothly and properly from a preventative perspective in Office and Compliance Department to fortify its system of internal accordance with the company’s overall strategy and the legal regulation. A corporate governance system must be compatible compliance of all directors and departments. Two of the four with the details of a company’s business activities and scale. Corporate Auditors appointed at Toppan are external. In addition Toppan believes that it can most effectively align its corporate to meetings of the Board of Corporate Statutory Auditors every governance system compatibly with its businesses by imposing a three months, the meetings of the Board of Directors and meet- regimen of internal audits. ings on the environment and other important issues are also attended by a corporate auditor. The Corporate Auditors are addi- Board of Directors tionally responsible for inspecting plants and other operating sites, Toppan’s Board of Directors consists of 31 directors, including one as well as auditing and appraising management. outside director (as of the end of March 2004). Meetings of the The Corporate Auditors regularly receive advice from a financial Board of Directors are held regularly each month, and whenever auditor, KPMG AZSA & Co. (formerly Asahi & Co), on methods to pressing business requires action or deliberation. With regard to improve company administration based on the results of financial important business matters, the company applies a business deci- audits.

Toppan’s Corporate Governance System Toppan’s System for Promoting CSR

Meeting of Shareholders President & CEO

Appointment or dismissal Appointment or dismissal Appointment or dismissal Administration Office

Legal Affairs Division

Board of Corporate Statutory Auditors Board of Directors Management Secretary Department Internal auditors Directors Committee Working External auditors Outside directors together Information & Publicity Division IConsiders issues prior to board of

Audit Firms director meetings Corporate Planning Division Working together IMeetings attended by full-time corporate statutory Personnel & Auditing auditors Labor Relations Division

Finance & Accounting Division Administrative Internal Auditor’s Departments Compliance Office Department Corporate Manufacturing Supervising directors Technology & Research Division

IInvestigates and IPromotes strict audits the legality observance of laws Purchasing Division and appropriateness and regulations and of operational the establishment of activities ethical business International Division practices

8 Business Activities and Social Responsibility

Corporate Governance and CSR Activities

System for Promoting CSR Six Major Themes

To promote CSR on a wider scale, the President & CEO of Toppan To heighten the impact and effectiveness of its CSR activities in is leading the move to develop activities through collaboration the future, Toppan has reviewed its social responsibilities and between related departments. The first step in this effort has been identified the important issues to be addressed. Toppan knows of to begin emulating the Corporate Structure described in the many ways that its business activities contribute to society. In Toppan Vision 21 declaration, the conceptual framework that keeping with the provisions of its Corporate Philosophy, Corporate defines what CSR is for the company and enables further consid- Creed, and Conduct Guidelines to enhance these contributions, eration of its meanings. Next, on the basis of this Corporate the company has identified six issues that should be addressed: Structure, Toppan has reconsidered its commitment to every Toppan Corporate Governance, Compliance, Improving Customer Satis- activity from a CSR perspective. Lastly, to enable greater efficiency faction, Respecting and Leveraging Human Assets, Activities for and internal transparency regarding the company’s commitments, Society and Culture, and Commitment to the Environment. the company has reviewed each of the current approaches from Toppan has identified specific issues within each of these six the perspectives of each of the related departments. topics and focused on their relative significance for the economy, To further promote the environmental activities on which society, and the environment—the three “bottom lines” that help Toppan has long focused, Toppan set up an Ecology Center under the company verify the adequacy of each of the issues identified. the Corporate Manufacturing Technology & Research Division in Through these commitments, Toppan will seek to maintain the 1991. In April 1992, Toppan established the Toppan Declaration sustainability of its business operations and pursue its goal of cre- on the Global Environment as its fundamental environmental phi- ating value. This is how Toppan aims to continue growing and losophy. To realize these goals through action, the company earning the trust of society as a solid corporate citizen. embarked on environmental activities involving all employees. Toppan’s commitment to CSR will continue to grow in the future.

Six Major Themes and Measures to Accomplish Them

Major Themes Measures Related Pages

IStrengthening audit and control functions Corporate Governance IPreparing a risk management system P. 10– IIncreasing the transparency of management activities

IEducation regarding the Conduct Guidelines and strict enforcement Compliance IInformation risk management P. 24– IApproach to the supply chain

IStrengthening quality assurance for products Improving Customer Satisfaction IResearch and development aimed at value creation P. 30– IProducts and services developed with society in mind

IDevelopment and training of human assets Respecting and Leveraging Human Assets IHealth and safety, health management P. 36– IWelfare system

IAdvancement of printing culture and its traditions ISharing of impressions Activities for Society and Culture P. 42– ITree planting activities IGreater symbiosis with local areas

IEnvironmental management activities IEco-protection activities Commitment to the Environment P. 47– IEco-creativity activities IEnvironmental communication activities

9 Comprehensive Corporate Governance Toppan is striving to meet its social responsibilities promptly and thoroughly by strengthening the auditing function of its business operations, maintaining a risk management system, and improving both the compliance and transparency of its corporate activities.

Strengthened Auditing and Corporate Oversight Functions Risk Management System

Auditing by the Internal Auditor’s Office Companies nowadays are vulnerable to new types of crises as The Internal Auditor’s Office assesses every site and plant in oper- advances in information technology have ushered in a new wave ation, principally through audits of management and operations. of computer-related crimes, as well as issues to do with intellec- Management auditing is conducted to verify and evaluate compli- tual property rights and the ownership of technologies. The press- ance with business goals, the effectiveness of risk controls, and a ing concerns of the environment also continue to weigh more variety of other management areas with an emphasis on process. heavily nowadays, and the pressures of compliance demand the Operational auditing confirms the status of compliance with laws constant attention of management. As these issues grow in and internal regulations, mechanisms to prevent improper activities, importance, the establishment of outstanding crisis management and the absence of outstanding problems with efficiency or accuracy policies becomes all the more urgent. in company operations. Proposals for improvement are issued when From 1993, a newly established Company-wide Crisis Manage- necessary. The audit results are reported to the President & CEO ment Committee at Toppan began setting up a regimen of crisis of Toppan and the directors in charge of the audited departments. management measures. Later, in 2002, the company launched a Crisis Management Project to correct inadequacies that it per- Thorough compliance ceived in its crisis-prevention measures. Toppan is now reformu- The Compliance Department, created in April 2003, spearheads lating a comprehensive risk management system that incorporates Toppan’s efforts to ensure compliance with laws and to firmly the functions of both crisis management and risk management. establish corporate ethics systems throughout the company. The department also takes charge of accurately determining the level Managing and understanding risks of conformance with regulations on compliance and suggesting In creating its comprehensive risk management system, Toppan improvements. Systematic training and education based on the began by identifying the most threatening risks to the company— Conduct Guidelines are continuously provided to Toppan employ- the risks that require tight and absolute control. As shown in the ees and Group companies. Toppan has also established the chart below, Toppan has instituted a systematic method of risk Toppan Helpline, an internal reporting system already proving management that allots the responsibility of risk response to spe- effective as a reinforcement for the compliance function. cific departments based on the types of risks involved.

Risks to be Managed and the Divisions in Charge of Risk Response Risk to be managed Division Accidents involving products/ Accidents or complaints related to products Corporate Manufacturing product liability Technology & Research Accidents or disasters related to Accidents related to a basic process Business Innovation company operations Accidents at the workplace, traffic accidents, other accidents involving employees Personnel & Labor Relations Debt-related incidents Finance & Accounting Legal problems with orders received Legal Affairs Leakage of personal information or internal confidential information Legal Affairs Leakage of personal information or internal confidential information through a computer E-business network Damage to the company’s computer system for customers due to cyber terror, illegal E-business access, illegal usage, etc. Accidents or disasters related to fires or explosions Corporate Manufacturing Technology & Research Illegal activity related to the storage of solvents, management of hazardous chemicals, etc. Corporate Manufacturing Technology & Research Defamation, slander, or other Damage to the company’s internal computer system due to cyber terror, illegal access, Business Innovation criminal damages illegal usage, or leakage of personal information or internal confidential information Crimes against the company (threats, bribery, theft) Personnel & Labor Relations Natural disasters Material losses or personal accidents sustained by customers or the company due to Personnel & Labor Relations earthquakes, wind or water damage, lightning, etc. Unlawful activities related to Violations of Subcontract Act, illegal activity with suppliers Corporate Planning external contracts Infringement of intellectual property Infringement of patents, trademarks, copyrights Legal Affairs Environmental problems Violations of environmental laws or standards, illegal disposal of industrial waste Corporate Manufacturing Technology & Research Risks related to overseas operations Accidents involving products, sexual harassment, environmental problems, fires, natural International disasters, etc. Material or personal losses sustained by customers or the company due to international strife, terror, etc.

10 Business Activities and Social Responsibility

Comprehensive Corporate Governance

Improving the Transparency of Management

Toppan is working to improve the transparency of its management activities in order to earn the ongoing the trust of society. Much of this effort focuses on the active disclosure of information. From its very beginnings, Toppan has actively created and distributed communication tools to satisfy the needs of its stakeholders and uphold its priority of communicating with society. With these tools, Toppan reliably fulfills its duty of explaining its IR website operations with timely and appropriate information. http://www.toppan.co.jp/ir* *Information also available in English: http://www.toppan.co.jp/english/ir/index.html Strengthening IR activities Many of the IR activities undertaken at Toppan focus on communication and information disclosure to shareholders. In keeping with its Basic IR Policy, Toppan uses its websites to ensure fairness Basic IR Policy and transparency in its disclosure of IR information. In April 2004, 1. Standard for Information Disclosure Toppan complies fully with the Tokyo Stock Exchange’s rules on timely dis- Toppan began providing a rich and easily accessible source of com- closure. With regard to information not covered under the rules on timely pany information by launching a website devoted to IR activities. disclosure, Toppan maintains a policy of actively and fairly disclosing all Toppan has been announcing its financial results on a quarterly information of potential use to shareholders and investors in understand- basis since fiscal 2003. Public meetings with institutional investors ing Toppan’s businesses. The principal channel for disclosure is the company website. and analysts are also held in May and November to explain the company’s interim and full year results. All documents distributed 2. Methods of Information Disclosure at the meetings are posted on the company website for the bene- As stipulated under the Tokyo Stock Exchange’s rules on timely disclosure, information required to be released will be posted on the TDnet network fit of those unable to attend. Toppan also publishes a quarterly operated by the Exchange. All information released through TDnet will newsletter for shareholders, Toppan Story, and an annual report also be promptly posted on the company website. in English.

Toppan’s Information Tools for Stakeholders

For All Stakeholders For Customers Corporate guide Various reports on business CSR report operations Various reports on business fields Various brochures on products Website, etc. Various newsletters, etc.

For Shareholders For Business Partners Shareholder newsletter Toppan Procurement guidelines website Story Purchasing Guidelines, etc. Recent financial data Annual report (in English), etc.

For Employees For Communities Internal newsletter CONVEX Plant guides Overseas internal newsletter Operational site report Interlink Annual report Printing Museum, Pamphlets on welfare benefits, etc. etc.

11 CSR Activity Highlights

Topics 2003

Topic 1 CSR Communication Fair

CSR is now becoming a key corporate issue. Many firms are publishing CSR reports and establishing CSR promotion departments, but by their own admission, the choice of appropriate CSR activities can often be confusing. As a leader in information technology, Toppan has helped clarify CSR to others in the industry by holding a CSR Communication Fair.

Day 2: Audiences had the opportunity to review lifestyles and work habits as speakers discussed issues that influence the quality of work. Discussion topics ran the gamut from working environments for employees to the importance of the population problem in creating sustainable societies.2 Day 1: Speakers described the many benefits Day 3: The focus of discussions turned to of CSR in raising corporate value. Their presen- environmental reports. Environment goo, an tations covered many of the latest develop- organization that operates a portal site relat- ments in Europe, the region most actively pro- ing to environmental issues, fielded ques- moting CSR, and developments in socially tions from corporate managers in charge of responsible investing (SRI), another area of producing these reports. considerable interest13 for many companies.

Tackling CSR together Raising the “receptiveness” of Toppan held a weeklong CSR Communi- Environmental Reports, Advertising and companies and reinforcing the cation Fair from January 26 to January 30, Public Relations, and Relationships. trust of stakeholders 2004, at the PLAZA21 showroom on Other events included an exhibition of As companies strive to build trust with the 2nd floor of the Toppan Koishikawa CSR reports from inside and outside Japan, their stakeholders and raise their corporate Building. The goals of the event were to as well as a panel presentation entitled value through communications, Toppan emphasize the importance of communi- “The Concept and Function of CSR Com- believes that they must embrace the cation with stakeholders in the promo- munication from the Toppan Perspective.” opinions of their stakeholders. To improve tion of CSR activities and to convey this Many visitors expressed a growing inter- their ability to do so—or what Toppan importance to as many people and com- est in CSR issues and carefully read actual calls “receptiveness”—companies must panies as possible. reports in a hands-on workshop. distribute information through CSR com- Seminar audiences had the opportunity munication and actively collect feedback to exchange frank opinions with represen- from stakeholders with a full recognition tatives from NPOs, academics, and other of the value of stakeholder opinions and experts on CSR heading up the seminar the intention to use them as a guideline programs. As many as 11 programs were for improvement. held under the five core themes that The process is very similar to the PDCA companies must address in promoting (Plan-Do-Check-Action) management cycle CSR: Management, Quality of Works, used for environmental activities, but with

12 CSR Activity Highlights

Topics 2003

CSR Communication Fair Overview Theme of CSR Communication Fair Dates: January 26 (Mon.) – January 30 (Fri.), 2004 “CSR Communication = Creating a Network of Trust and Quality” Organizer: Toppan Printing Co., Ltd. Cooperating Organizations: Environment goo, Nikkei Ecology, Nikkei Eco Management Forum Site: Toppan Koishikawa Building, 2F PLAZA21

Main Programs of CSR Communication Fair

January 26 (Monday): Management • Employability January 29 (Thursday): Advertising and Public • CSR Progress in the EU CSR involves far more than just management Relations Latest information from the EU (presented by the mechanisms • Messages to Society through Public Service KPMG Group) The importance of raising the quality of the indi- Announcements • CSR & SRI vidual worker The history and meaning of public service What do fund managers think about CSR? announcements January 28 (Wednesday): Environmental Reports The power of their message. Distinctions from January 27 (Tuesday): Quality of Works • Feedback Meeting on the Environment goo advertisements for products • Nurturing the Next Generation and New Directions Awards • CC Tool Relationship and 2003 Report Analysis for Corporate Measures The future of environmental communication The future of corporate public relations The corporate responsibility to nurture the next through interactive media generation • Environmental Report Symposium 2003 January 30 (Friday): Relationships • Global Compact—Human Rights and Labor The Environment goo survey and its bearing on • Community Communication Practices future environmental reports The importance of community communication The corporate vision under the Global Compact *The Wednesday program was organized by based on corporate-NPO collaborations The difference between legal compliance and Environment goo • Communication with Stakeholders human rights problems Open discussion CSR communication means creating a network of trust and quality

Day 4: The theme shifted to advertising and Visitors to the 1st floor lobby of the Toppan public relations, two key aspects of CSR Koishikawa Building perused panel displays on strategy. Ad creators led a discussion on Toppan’s CSR Initiatives and The Concept and communication methods that resonate with Function of CSR Communication from the stakeholders.4 Toppan Perspective. Day 5: Participants explored the ways that companies build relationships with stakeholders and the types of CSR communication that can raise trust5 to a higher level.

CSR booklet published an important difference. In the “Check” In July Toppan published CSR Communi- component of the cycle, CSR places far cation, a booklet reporting the contents greater importance on the tasks of disclos- of the seminars at the CSR Communica- ing information to stakeholders, receiving tion Fair. feedback, and making reforms. One of the goals of Toppan’s CSR Toppan intends to use the many opin- activities is to share the benefits of the ions generated by the CSR Communica- fair with as many people as possible. tion Fair as a resource to increase its knowledge and technology in the information communications industry. Mean- while, Toppan will continuously support companies to raise their “receptiveness” —the single-most important quality for any enterprise seeking to develop its CSR communication activities, build a network Title: CSR Communication of trust and quality with its shareholders, Published: July 15, 2004 and enhance its corporate value through Publisher: Toppan Printing Co., Ltd. Binding: A5 size, 228 pages the CSR approach. Copies published: 3,000

13 Topics 2003

Topic 2 Award for Distinction as a Corporate Citizen from Bunkyo Ward

In January 2003, Bunkyo Ward of Tokyo highly praised for its comprehensive activ- project in honor of Ichiyo Higuchi, a local conferred Toppan its Award for Distinc- ities, particularly its hands-on learning authoress from the Meiji Era. tion as a Corporate Citizen in recognition workshops for elementary school stu- of the company’s exemplary social contri- dents and others from Bunkyo Ward. butions as a widely trusted partner in the Toppan Hall, meanwhile, fosters inter- local community. est in classical music and nurtures young The award was presented principally talent in the community by hosting musi- to honor Toppan for the social contribu- cal events. The Hall holds about 40 events tions of the Toppan Hall and the Printing each year, drawing interest from all over Museum, Tokyo, two facilities located in Japan and even overseas. the Toppan Koishikawa Building in Bunkyo In keeping with its function as a venue Ward. for communication with the local com- Through visits to the Printing Museum, munity, the Toppan Koishikawa Building a great many people in the community has abundant public space. Toppan is have learned about the role and signifi- also working in cooperation with local cit- cance of printing in the development of izens in Bunkyo Ward to support the Toppan President & CEO Adachi receiving a plaque and certificate from the Bunkyo Ward human civilization. The museum has been “Fumi no Miyako—Ichiyo Monogatari” chief Kemuriyama

Topic 3 Institution for Digitization of the Palace Museum Heritage

Toppan has joined hands with the Palace Museum, the largest national museum in China, in a project to preserve and circu- late cultural artifacts using digital technologies. On October 23, 2003, the Palace Museum opened a new institution, the Institution for Digitization of the Palace Museum Heritage, and announced plans to present a large-scale virtual reality presentation entitled “The Palace VR: The Forbidden City—the Emperor’s Palace.” The institute will be engaging in the following activities in the coming years: IRecording and storing three-dimensional measurements of the palace buildings and artifacts A VR reproduction of the Hall of Supreme Harmony as it stood in the 18th century © 2003 The Palace Museum Digital Institute IVisually rendering the palace buildings and artifacts The institute will also be fostering expertise on the use of digital technology at the Palace Museum.

The Digital Institute completed on the palace High-definition VR theater with giant screen grounds (4.2 × 13.5 m)

14 CSR Activity Highlights

Topics 2003

Topic 4 GX Film Wins Kinoshita Award

With the help of its advanced thin-film conferred the film its 28th Kinoshita manufacturing and coating technologies, Award in the R&D Category in May 2004. Toppan has developed an advanced GX Each year, the Kinoshita Award goes out film that forms a unique barrier layer over to outstanding achievements in the world film substrates. of packaging technology R&D, in memory The environmentally-friendly GX film of its namesake, Matasaburo Kinoshita, shields against moisture with the same the late chairman of the association. outstanding effectiveness as aluminum foil, but requires less energy to incinerate. The non-metallic transparent materials composing the film make it possible to verify the contents of packages with the naked eye and perform content analyses with a metal detector. The film offers a highly stable packaging solution for food, household articles, pharmaceuticals, and electronic parts. In recognition of the superior properties Highly functional GX film Toppan receives an award for its GX film of GX film, the Japan Packaging Institute from the Japan Packaging Institute

Topic 5 Reducing the Use of Toluene

Toppan is promoting activities to reduce to this effort. These measures, in combi- geted a 90% reduction in atmospheric the use of toluene, a Class I designated nation with the improved processing effi- toluene emissions compared to the fiscal chemical substance under the PRTR Law, ciency of the installed equipment, led to 2001 level by the end of fiscal 2005. by setting environmental targets for all far better emission control. Toppan will strive to meet all of its targets the companies in the Group. For fiscal 2004, Toppan targets a reduc- by developing more new technologies, For fiscal 2003, the company set the tion in atmospheric toluene emissions of introducing more equipment, and pro- goal of reducing atmospheric emissions around 1,500 tons from the fiscal 2003 moting new activities to reduce environ- of toluene by 40% compared to the level. To help achieve this target, waste mental burden. emission level of fiscal 2002. The actual gas processing equipment will be installed result was a 38.8% reduction, or a 98% at four more plants. achievement rate. The goal would have Toppan plans to sustain these efforts been easily achieved had it not been for over the medium and long term. Starting delays in approvals for the installation of from fiscal 2003, the company has tar- waste gas processing equipment in certain plants. As a result, operation of the equipment had to be postponed to fiscal 2004. While Toppan fell about 1% short of reaching the target, the reduction of more than 2,000 tons of toluene emissions represents a major achievement in reducing an environmental burden. The expanded use of non-toluene ink and the introduction of new toluene emission Non-toluene ink Waste gas processing equipment installed processing equipment contributed greatly at the Gunma plant

15 Topics 2003

Topic 6 Trading Greenhouse Gas Emissions

Trading greenhouse gas emissions: The 54 companies taking part in the trial ness—targets stricter than actual condi- a trial business business include 31 companies with indi- tions—but it compensated for the sur- Reducing the emissions of greenhouse vidually set emissions targets for green- plus by emission trading. gases requires significant financial re- house gases, 11 companies undertaking sources. When acting individually, com- in-house emission-control projects, and Future measures panies face limits in the scope of emis- 12 companies working to verify emission The trial business to trade emissions has sion-control activities they can pursue. To amounts, monitor emission reductions, already demonstrated the value of green- surmount this problem, some enterprises and trade the emissions. Project partici- house gas reduction as an economic have taken up the practice of trading pants are developing optimal methods to investment that provides further incentive emission allowances. Through the mech- calculate emission levels, verify emissions to implement energy-saving measures. anisms of market economics, companies directly, trade emission allowances, and Toppan will be incorporating the trading in various industries pool their efforts to confirm the status of targets. mechanism in its overall strategy for the meet the emission targets collectively ongoing reduction of greenhouse gas with minimal economic sacrifice on an Overview of the trial business emissions. The government/industry col- individual basis. Companies have also To survey the emission sources for the laboration in trading emissions and reduc- teamed up with the Japanese Ministry of six greenhouse gases stipulated in the ing greenhouse gases has provided a the Environment to form a trial business Kyoto Protocol, Toppan investigated five learning opportunity that will lead to the for the trading of greenhouse gas emis- plants engaged in Toppan’s Information development of better emission-control sions through fiscal 2003 and 2004. & Networks, Living Environment, and systems in the future. Toppan researchers Toppan is taking part in this trial. Electronics businesses. Of the 64 emission will be studying all the issues arising from sources tested, the survey found that its the current project, as well as new issues. An Overview of Trading in emission research was applicable to 26. Greenhouse Gas Emissions The largest emission sources were con- Trading of emission amounts firmed to be related to fuel oil and elec- Trading of emission tricity usage, and nearly all of the green- Reduction amount allowances Reduction amount house gas emitted was carbon dioxide. Through its participation in the trial Emission amount allowance allowance Emission Emission Emission amount business, Toppan has mastered the basic Overall Greenhouse Gas Emissions methods to calculate the levels of green- (by Gas Type) house gases discharged from its facilities. Greenhouse gas % of total

Company A Company B From this point forward, Toppan is ready Carbon dioxide CO2 99.6%

Company A can purchase the emission allowance to begin the trading of emission allow- Methane CH4 0.21% of Company B, a trading partner that has reduced ances. Toppan failed to meet the strict its emissions to below the level targeted. Nitrogen dioxide N2O 0.17% emission targets set under the trial busi- Hydrofluorocarbons HFCs below 0.1% Perfluorocarbons PFCs below 0.1% Sources of Greenhouse Gas Emissions: Examples Sulphur hexafluoride SF below 0.1% Emitted greenhouse gas 6 Source CO2 CH4 N2O HFCs PFCs SF6 Greenhouse Gas Emission Ratio Fuel oil usage (gas, heavy oil, kerosene, gasoline, etc.) A (by Emission Source) Electricity usage A Incineration of industrial waste 6.5% Other 0.3% Home generator usage A A Dryer usage A A Use of household appliances (stove, kettle, etc.) A A Driving car A A Wastewater processing to prevent water pollution A A Incineration of industrial waste A A A Use of air-conditioner and refrigerator A

Use of transformer equipment with SF6 A Use of cleanser containing PFCs A Fuel oil usage Electricity usage 39.2% 54.0% Note: CO2 emissions from the use of electric power are not direct emissions at the place of use, but indirect emissions caused by fuel consumption in electricity generation. Note: Covers the five plants surveyed for trial business.

16 CSR Activity Highlights

Roundtable Discussion What We Expect from CSR

On July 27, 2004, five speakers from the CSR Communication Fair were invited to the Toppan Koishikawa Building for a roundtable discussion on public expectations of Toppan’s CSR efforts. After a tour of the Printing Museum and PLAZA21 showroom, Hideto Kawakita opened the discussion as moderator. The participants expressed many valuable opinions from their various standpoints.

CSR is something created by to fulfill a common CSR standard. Too independently select the measures it each company many different conditions apply. needs to take. We can’t dismiss standard- Each person, each company, should ization unless we meet our corporate Hideto Kawakita: To start off this round- establish its own framework of social responsibilities in the ways best for us. table discussion, I would like to hear your responsibility. That’s the opinion I think Kawakita: Mr. Kumon, can we hear your views on the exact meaning of CSR. Mr. Japanese companies should voice on this perspective as an executive in charge of Shibusawa, what do you think? issue. CSR? Ken Shibusawa: The standardization of Masayasu Ishida: I agree completely. Masato Kumon: At my company we’ve CSR has recently been an issue of con- Take corporate governance as an exam- been having detailed discussions on what siderable debate. Some are even asking ple. Some Japanese companies use a CSR actually is. The reports, GRI guidelines, whether social responsibility should be committees system while others conduct and other standards are certainly useful incorporated into ISO and other standards. audits. It would be unfair to pressure the benchmarks, but we often encounter This push to standardize is basically com- latter to switch to the committees system items that don’t apply to our company or ing out of the West, and most Japanese as a standardized form for CSR. That to what we do. We also spend a lot of companies oppose it. While I certainly see would be a great mistake. time trying to decide which of our activi- the need for standardized CSR and SRI, I This doesn’t mean that companies ties can be considered “CSR activities.” It think the current efforts are fraught with should have an easy time of it. Every cor- would be helpful to have specific exam- dangers. Two companies working in poration must carefully arrange its own ples of what CSR means for companies in entirely different fields cannot be expected CSR issues, its own CSR concepts, and different industries.

17 Roundtable Discussion What We Expect from CSR

I would like to see Toppan clearly artic- Inform readers of results rather companies are embarrassed to skip. For ulate what CSR means to Toppan. than systems departments that administer operations Tsutomu Iijima: To create something that go beyond products and systems, it’s original, a first and vital step is to find out Kawakita: Ms. Furuya, what items do insufficient to profess P without pressing what hasn’t yet been recognized. Our you think should be included in a CSR ahead to the stages of D (do), C (check), company is taking that step now. We’re report? and A (action). I’d like to see more effort asking: What haven’t we yet identified? Yukiko Furuya: CSR reports should focus in these areas. Kawakita: I think of the contents of a on the issues being addressed, the mea- Ishida: And we hope to make more effort. CSR report as a corporate philosophy. A sures being taken to address them, the Kawakita: I think it’s helpful to write company’s corporate philosophy and objective disclosure of information, and about mistakes, as well. Companies some- declarations summarize its social respon- the advantages and disadvantages of times fail at what they attempt due to sibilities. If a company defines its original those measures. It’s important that peo- insufficient effort or poor understanding. position in its philosophy, the most ple don’t perceive CSR as a kind of PR tool. A company that frankly discloses its fail- important point is the actual effort to live Ishida: We have tried hard to fill Toppan’s ures but reaffirms its commitment to suc- by that philosophy. This is especially true Environmental Reports with just that kind ceed in the future will gain people’s trust. in the areas of compliance and the envi- of content. With our CSR Report we’ll That’s something easy to understand in ronment: every company must choose a need to go even further. a report. level of commitment, describe it in its Kawakita: The CSR reports should inform conduct guidelines, and follow through. readers of results rather than systems. Instilling the corporate I try to learn the concrete measures People would find it tedious to read philosophy in every individual companies take to fulfill their corporate through long descriptions of the various declarations. systems and policies put into effect. People Shibusawa: I often ask myself, who is This is one reason why I value Toppan’s want to know what the company is actu- the corporation? When people talk about CSR report so highly. It derives its major ally accomplishing with its various systems CSR, sometimes they’re just reciting the themes from the contents of Toppan’s and policies. words. How deeply do employees actu- Corporate Philosophy, Corporate Creed, I’d like to see the company do more in ally consider the “social responsibility” of and Conduct Guidelines. the areas of personnel and corporate their corporation? I don’t want to see Ishida: Thank you. ethics. All too often Toppan’s explana- “CSR” become just another slogan trum- tions of its PDCA cycle end at the P (plan- peted by the CEOs. ning) stage. PDCA shouldn’t be touted as Ishida: The employees of a corporation a kind of “theme”; it should be a process should be universally aware of their cor-

Ken Shibusawa Yukiko Furuya Hideto Kawakita CEO and founder of Shibusawa & Co., offering Representative of the Compliance CEO of IIHOE: International Institute for consulting services on alternative investments. Management Research Group in the East Human, Organization and the Earth. Previously with JP Morgan, Goldman Sachs, Japan Branch of the Nippon Association of Formally worked as international recruiting and Moore Capital Management. Director of Consumer Specialists. Began consulting officer, as secretary for Diet members, Chief Keizai Doyukai and Director of Shibusawa on CS management and compliance Representative of Operation Raleigh Japan. Eiichi Memorial Foundation. management in 1997. Founded IIHOE in 1994, to support nonprofit A frequent writer and lecturer. management and corporate environmental/ social management.

18 CSR Activity Highlights

Roundtable Discussion: What We Expect from CSR

porate philosophy. If they’re not, their Ishida: This is a very serious issue for management has failed. Together with stakeholders Toppan. You’re right that our business is Iijima: The corporate philosophy, social set up as a B2B structure. But we have to responsibility, and so forth are more than Iijima: A skillful facilitator is very helpful in understand the situation of C, the con- just individual topics for in-house semi- instilling a corporate philosophy through- sumer, to maintain trust in developing nars. Every employee must understand out the ranks of a company. Facilitators our business with other businesses. the importance of these issues as expres- don’t have to be employees. A good And as a printing company we must sions of corporate value that protect the approach would be to hold stakeholders respond carefully to CSR issues that way they live and even give them pride. meetings and create the CSR report in col- involve the end user—the consumer— If this awareness can be instilled, then laboration with stakeholders. and we must directly bear the burden of the corporate philosophy takes on a life Most companies have tried to address our social responsibility. of its own. CSR management from within the scope With this in mind, we completely This isn’t about memorizing the corpo- of corporate governance. This approach understand the importance of creating a rate values, but living them. CSR should- is far too narrow. When you consider CSR structure in which we can obtain feed- n’t be taught directly, but incorporated in activities from the viewpoint of the whole back from consumers. a system of active study for the employ- of society, the most important point is to Furuya: The “customer first” principle no ees. Management and study should be create activities that everyone can do. A longer sets companies apart. So many enjoyable from the outset, and the con- CSR report functions as one index of this. companies nowadays tout “customer tents should be well considered. Courses First, we need to design a model study first” as a public relations slogan. I’d like outside of the company, courses for program based on careful considerations to see more specific management mecha- employees when they’re on their own, of the learning content we need. Next, nisms and measures that meet standards. are ideal. we have to consider the scheduling, the Slogans alone don’t build trust. Ishida: You’ve talked about “enjoyable venue, and the ways we can apply the study.” This year at Toppan we’ve insti- program to people. tuted an e-learning course to study the Kumon: What mechanisms does Toppan Who is the CSR report for? Conduct Guidelines, or the company’s apply to absorb the opinions of its con- CSR. sumers and stakeholders? It must be chal- Shibusawa: Who are the CSR reports lenging for a company with a B2B struc- for? Many companies seem to use them ture and customers with overlapping for public relations, but I wonder about interests. Do concerns about Toppan’s their audiences. Are they for investors? position make this difficult? End consumers?

Tsutomu Iijima Masato Kumon Masayasu Ishida President of CO-WORKS. Environmental Executive General Manager of the Senior Managing Director of Toppan Printing strategist and planner. Worked as a develop- Environmental Affairs Department of Suntory, Co., Ltd., in charge of Information & Publicity ment adviser to Matsushita Electric Works, Ltd. Responsible for promoting the environ- and Legal Affairs divisions. Formerly worked in Ltd., Nissan Motor Co., Ltd. and other compa- mental conservation activities of the Suntory the Secretary Department, in the International nies in different industries. Participated in Group, including the education of the next Business Law Center, and as President of environmental development and design for generation on water source cultivation and Toppan Co., Ltd., President of Toppan Hall basic framework policies on regional develop- other environmental measures. Actively serves Co., Ltd., and President of Toppan Character ment projects. as a council member in the Global Reporting Production Co., Ltd. Currently manages CSR Initiative Japan and as a supporter of several promotion activities. other industrial organizations.

19 Roundtable Discussion What We Expect from CSR

Ishida: We produce our Environmental report could easily surpass 100 pages. Complete protection of Report for a wide segment of society, Ishida: That’s actually happened. The CSR consumers including all Toppan’s stakeholders. For Report for 2004 is about 100 pages. our CSR Report and other major publica- Kumon: There’s a limit to what the aver- Kawakita: I’d now like to turn the dis- tions, we take a more focused approach, age consumer can absorb. It will be diffi- cussion to the specific CSR activities reconsidering our purposes and carefully cult to make the report both comprehen- expected of Toppan. Ms. Furuya? defining target readerships. Should we sive and readable. Furuya: How does Toppan realize the distribute our annual report exclusively to “customer first” principle? investors? Should we write up our finan- Toppan needs concrete policies, guide- cial results exclusively for the analysts? A report worthy of Toppan lines, or standards in this area. Your Toppan has assessed the current situation Conduct Guidelines state that the com- and is now making a new start. Kumon: Back in the showroom we saw pany will respect “the rights and interests Shibusawa: If I gave last year’s Environ- an exhibit on on-demand printing and of others,” but you make no mention of mental Report to my wife, an average single-copy books. What would it be like “consumer rights.” The Basic Consumer consumer, she wouldn’t be able to under- to create an on-demand CSR report tai- Protection Law was passed in 1968, and stand it. The contents are too specialized. lored for the target reader? A service like the Basic Consumer Law revised this Wouldn’t it be better, after you’ve that would give Toppan the chance to year makes direct mention of the “rights done all these good things, to write up show off its advanced capabilities and of consumers” for the first time ever in the report in simpler terms that everyone worthiness as a corporate citizen. this country. Consumers have become can understand? Today, for example, we Ishida: That’s an interesting idea. important. toured the Printing Museum and corpo- Iijima: I just visited an exhibit on the Corporations like to think in terms of rate showroom. The clearly presented dis- dawn of printing in Japan at the Printing “customer needs” instead of “customer plays showed me how interesting the Museum. It gave me a sense that printing rights,” a concept that strikes them as printing industry really is. can be used to bring more fairness to slightly aggressive. But however you Ishida: Up until recently, Toppan devel- society as an equitable form of communi- phrase it, the thinking is changing. oped its business under a B2B structure. cation. It also seemed to be a good repre- Kawakita: Mr. Kumon, what do you We’re now placing more of an emphasis sentation of CSR at Toppan—a represen- think? on C with plans to widen the scope of tation I couldn’t easily find before. The Kumon: Above all else, it’s about safety our B2C business in the future. To do so exhibit also gave me a powerful sense of and trust. Besides packaging materials, we need to think much more about the the visions that the very first printers had, our company frequently asks Toppan to average consumer. hundreds of years ago. If you can some- manufacture custom products in small Kumon: Now that you’ve evolved from how express those same visions in your lots. Internal and external regulations the Environmental Report to the CSR CSR Report, I think readers will easily apply to the raw materials for these prod- Report and adopted the triple-bottom- grasp Toppan’s CSR. ucts, as well. I’d like to see greater trace- line approach, you have so much material The tumultuous expansion of the print- ability of foreign procurement. When to cover. With everything included, the ing industry is important, and the chal- Toppan holds product campaigns, I want lenge to enter new areas to see the company take scrupulous care is appealing. But more in protecting personal information and important for Toppan’s information on customers. CSR are the roots of Ishida: Of course these are all very impor- Toppan’s business, tech- tant issues to Toppan. Personal informa- nological innovation in tion should never be leaked; materials printing, and the estab- should never be untraceable. As a com- lishment of fair and equi- pany that provides products and services table communication in in food, apparel and housing industries, society. Toppan places special emphasis on food safety and the security of personal information. Unless a company has been Privacy Mark certified, it won’t be entrusted with

20 CSR Activity Highlights

Roundtable Discussion: What We Expect from CSR

the business of handling personal infor- store information, we try mation. And that’s not all. We’ve reached to build as much trust as an era in which transactions begin with possible. We gain part of companies taking technical, systematic that trust by developing and consistent measures to meet their technologies that guard responsibilities. against inadvertent leaks. When a company considers introduc- We also create many ing a new technology, it has to incorpo- rules to ensure that the rate a mechanism for foresight in its busi- procedures taken com- ness model. Take the introduction of RFID plement the security pro- tags for the traceability of food as an vided by the technology. example. Before introducing the technol- There are also official ogy, Toppan must anticipate its effects on certifications that further the market many years into the future. complement our efforts, Iijima: I’d like to hear more comprehen- as well as in-house rules that apply exclu- Toppan is doing a great deal to sive communication on Toppan’s efforts sively to Toppan. enlighten the public on the company’s to guarantee safety for all of its customers. We also realize that top management role in society. Even so, I don’t think con- This process of guaranteeing safety for needs a sharp awareness of the issues it sumers have a clear picture of how individuals hasn’t been widely discussed seeks to instill through the ranks of the Toppan’s businesses work. This is proba- in Japan. As I’m given to understand, the company through in-house training. At bly significant in terms of your manage- process begins with the guarantee of Toppan we send our top executives ment strategy, too. bodily safety, which in turn leads to around the country to witness the activi- Kawakita: This brings us to the topic of the assurance of freedom of thought, ties of all of our plants firsthand and share social contribution. Mr. Kumon, what can which in turn leads to freedom of action. their own knowledge on quality issues you tell us about social contribution from Complete bodily safety creates a trust with the workforce of 30,000 men and your perspective as an executive of a that enables a person to think freely, and women in the Toppan Group. company that operates a major concert the ability to think freely enables a person hall? to act freely. In the case of the consumer, Social contributions are a social Kumon: Now we’re in the process of freedom of action leads to consumer responsibility changing our corporate slogan to “Living activity. with water. Suntory.” This is a declaration With regard to food products, some Furuya: A few points on consumer edu- of the entire Suntory Group. We actively sort of project that allows all of the stake- cation. We talked before about e-learn- support organizations in both water and holders to confirm the assurance of safety ing, but I don’t see how this relates to forestry fields and undertake our own would help people understand. the consumer outside the company. programs to cultivate water resources. Kawakita: There are also issues of secu- Educating consumers through e-learning Naturally there’s an element of self inter- rity with newly developed technologies, would be an outstanding social contribu- est here, as well. We have very good rea- universal design, and so on. Some new tion. Providing know-how and informa- son to invest considerable management technologies are harder to use but give tion to consumers would be one type of resources in the conservation of our the consumer the satisfaction of being CSR activity. biggest resource, water. safe and secure. How closely should we For me, CSR in a word is “symbiosis.” Having declared our commitment to consider security when developing a new Take the environment as an example. All conserving forests and cultivating water technology? Can the security itself proof us are responsible for the environment, resources as a routine part of our busi- vide amenity? Does the security itself companies and consumers alike. But con- ness, we consider these activities not just allow consumers to use products free sumers lack the know-how and informa- a social contribution, but a social respon- from worry, just as they do with universal tion to help form environmental mea- sibility of the entire Suntory Group. That’s design products? sures. If companies were to provide this our current thinking. But if society sees Ishida: Our preparations for storing per- know-how, consumers could fulfill their these activities as a social contribution, of sonal information are a good example of responsibility in collaboration with com- course that’s fine with us. how we develop security for a new tech- panies. This is another type of CSR As I’m sure you know at Toppan, a nology. When we work out systems to Toppan should consider. commitment to forestry-related activities

21 CSR Activity Highlights Roundtable Discussion What We Expect from CSR

it seems the concept is often only taken meet their legal obligations. For a corpo- halfway. To go further, we need a solid ration to reach the “excellent” level world- on the concept. So let me recap. wide, it must go to great lengths to achieve To reach the first level of CSR, compa- universal good in many areas. Just to nies must “respond to requests” and fol- give one example, its senior management low guidelines. To reach the second level, must actively encourage its employees to the “commendable” level, companies use their welfare benefits. I hope to see must broaden their CSR approach to Toppan provide depth and aspire to reach include not just consolidated subsidiaries the “excellent” level worldwide. makes much more sense. Cultivating tim- in Japan, but overseas subsidiaries and ber resources isn’t just a social contribu- marketing affiliates. To reach the third tion, but a responsibility to society. level, the “excellent level,” companies must provide depth. Taking the challenge to a global While a good many companies have level striven to reach the “commendable” and “excellent” levels on the environmental Kawakita: I’d like to finish off this round- front, regrettably few have done so with table discussion with a few comments on activities focused on human resources the concept of CSR. Many companies and compliance. In these areas, it would have been taking an interest in CSR, but seem, companies are satisfied merely to

Conclusion

I’d like to thank the participants of this brief recap of the views expressed. into earnest consideration as it forms its roundtable discussion for their valuable To start off the discussion, Mr. future CSR activities. opinions on the concept of CSR as it Shibusawa pointed out that CSR is not an Finally, Mr. Kawakita, the moderator of applies to Toppan. Our company will be issue that can end in the top ranks of the discussion, pointed out that the deeply considering the views expressed company management. Toppan posts its objective of a CSR report is not to explain here today as it promotes its CSR activi- CSR in company-wide bulletins and takes systems, but to explain results. As we ties in the future. many other steps to instill the concepts of compile our CSR Report we will not only Through its focus on its core business CSR in all of its people. In the future, explain our results, but also report on the of printing, Toppan has advanced the Toppan plans to create an educational progress and process of verification of development of information and culture. venue where employees can study CSR in our CSR activities. Our corporate mission is to facilitate the greater depth. I would like to sincerely thank everyone dissemination and exchange of informa- Ms. Furuya discussed the rights of con- for attending this roundtable discussion tion and ideas as the nurturer of a fulfill- sumers. The protection of consumer rights and sharing their opinions with Toppan. ing society. To achieve this mission we is part of our basic thinking, along with must continue to pursue efficient man- society and the environment. Toppan Masayasu Ishida agement and symbiosis with society and will continue to do everything within its the environment under the guidance of power to maintain safety and trust in its our many stakeholders. products. The content and design of our approach Mr. Iijima explained the notion of guar- to CSR activities have been set down anteeing safety of individuals. The ideal in our Corporate Philosophy, Corporate of “living together with society” can be Creed, and Conduct Guidelines. To pro- accomplished through fairness in com- mote CSR activities effectively, Toppan municating with society, and Toppan will understands the importance of satisfying continue to pursue this ideal through its the ground rules. CSR measures. The opinions from the roundtable par- Mr. Kumon explained the difference ticipants will be of great value as we between social contributions and social design our future CSR activities. Here is a responsibility. Toppan will take this view

22 Social Report

The Corporate Creed is a clearly defined specification of the form Toppan should assume as a social enterprise. This section describes four activities Toppan is undertaking to meet its social responsibilities and put the Corporate Creed into action—Compliance, Improving Customer Satisfaction, Respecting and Leveraging Human Assets, and Activities for Society and Culture.

Information management measures and initiatives for ———————————————— Compliance P. 24 thorough compliance with laws and corporate ethics

Product development activities and mechanisms Improving Customer Satisfaction ———— P. 30 to guarantee the quality, safety, and functionality of products and services

Policies to nurture and effectively use human assets, Respecting and Leveraging ——————— P. 36 and measures to create a safe and pleasant work Human Assets environment

Social and cultural contributions that reflect Toppan’s ———— Activities for Society and Culture P. 42 business activities and Corporate Philosophy

Customers

Business Shareholders Partners

Employees Communities Social Report Compliance

Toppan has set down rules and established firm positions to ensure that its employees, management, and business partners abide by laws and social standards in the day-to-day conduct of business.

Basic Stance on Compliance

To Toppan, compliance means more than simple compliance with the law. Rules Corporate Articles of Compliance requires that manage- Philosophy Incorporation ment and employees observe all legal Corporate Board of Director rules standards, social standards, and inter- Creed Work rules Conduct nal corporate rules in their actions Compensation rules Guidelines as individuals and citizens. In short, Labor agreements, etc. Philosophy/ Organization Toppan sees compliance as faithful Polices Administration adherence to the company’s Conduct Regulations Guidelines. (common nationwide regulations, etc.) Toppan and its employees never Concerning information security management Concerning insider trading prevention management, etc. engage in actions that contravene the Conduct Guidelines. If ever requested Detailed Regulations to act improperly or illegally in the (standards, manuals, etc.) course of business, Toppan responds Manual on observing the Antimonopoly Act with an emphatic “No.” With these Manual on observing the Subcontract Act, etc. Conduct Guidelines, Toppan is building a company trusted by society.

Business

I Conduct Guidelines

Chapter 2 Outline of Conduct Guidelines

Section 1 Building customer trust Section 3 Fulfilling corporate responsibilities Section 4 Creating a positive work 1. Doing our best for the customer 1. Compliance with antitrust laws environment 2. Maintaining customer trust 2. Fair treatment among support companies 1. Striving for a lively and vibrant workplace 3. Appropriate management of customer 3. Unlawful acts against corporate competitors 2. Striving for a safe and clean workplace property 4. Non-solicitation or provision for personal gain 3. Following company rules 4. Protecting information about customers or rebate 4. Protecting corporate property 5. Appropriate management of information on 5. Prohibition of bribery 5. Avoiding conflicts of corporate interests our customers’ clientele 6. Appropriate entertainment practices 6. Prevention of discriminatory practices 7. Prohibition of illegal political contributions and 7. Prevention of sexual harassment Section 2 Reforming operations donations 8. Prohibition of private activities 1. Acting in accordance with international rules 8. Prohibition of providing unjust benefits 9. Appropriate use of the Internet 2. Striving to improve knowledge, skills, and 9. Prohibition to support antisocial activities 10. Appropriate management of information and technology 10. Prohibition of insider trading records 3. Fulfillment of work responsibilities 11. Prohibition of unlawful export transactions 11. Prevention of participation in illegal conduct, 4. Protecting confidential corporate information 12. Prohibition of child labor false reports, and concealment 5. Securing and utilizing intellectual property 13. Curtailment and reduction of environmental 12. Protection of identity or person who reports 6. Respecting the rights and interests of others impact misconduct 14. Promotion of environmentally friendly activities Section 5 Developing the Toppan Group 1. Taking pride in the Toppan brand 2. Developing the Toppan brand 3. Strengthening cooperation between group companies 4. Appropriate disclosure of information 5. Appropriate relationship with shareholders

Established on June 2, 2000 Revised on July 1, 2003

24 Social Report

Compliance Awareness and Thorough Implementation of Conduct Guidelines For a company to fulfill its social responsibility, every one of its employees must fully comply with corporate ethics in the areas in which it does business. Toppan continually reviews its guidelines for corporate ethics— the Conduct Guidelines—and endeavors to instill them universally throughout its workforce.

Establishing a System for Legal Henceforth the Conduct Guidelines will mechanisms to respond to possible viola- Compliance be reviewed once a year. tions of the law. The Toppan Helpline is open not only to regular employees, but In April 2003, Toppan established a A Structure to Promote the contract employees and temporary work- Compliance Department within its Legal Conduct Guidelines ers as well. Employees can also report Affairs Division as an instrument to pro- questionable activity using a dedicated mote compliance with laws and corporate Conduct Guidelines Promotion e-mail address set up for that purpose. ethics. In addition to ensuring universal Leaders Toppan strictly safeguards the privacy compliance with the Conduct Guidelines, In establishing its structure to promote of persons reporting questionable activ- the Compliance Department manages the observance of laws and corporate ity. As the Conduct Guidelines state, shareholder meetings and other stock- ethics, Toppan has carefully endeavored whistle-blowers have every protection of related matters, guarantees information to ingrain its Conduct Guidelines into the the company. security, and oversees employee educa- daily work environment. In 2004, the tion on laws and regulations. As the company newly appointed a “Promotion Company-wide education main promoter of CSR activities within Leader” at every operational site to As another step towards the realization the company, this section reviews social supervise the promotion of the Conduct of Toppan Vision 21, Toppan holds basic responsibility measures undertaken in ear- Guidelines. compliance training for employees with a lier years, reshapes them to fit the current In their capacity as champions of ethical focus on instilling the Conduct Guide- definitions of CSR and issues facing the awareness at Toppan workplaces, these lines. The training is provided at all stages company, and launches them anew to Promotion Leaders will draw attention of an employee’s career based on rank. further advance CSR. to guideline-related issues and launch Some is incorporated into the company’s various strategies to raise awareness. A routine education for newly appointed higher awareness of the Conduct Guide- supervisors and managers; some is pro- The Role of Conduct Guidelines lines throughout the company ranks will vided periodically to address important foster a clearer understanding of Toppan’s themes such as information security and As a code of conduct based on the position on ethical issues. recent revisions of laws. Corporate Philosophy and Corporate Creed, the Conduct Guidelines ensure Toppan Helpline that the employees of Toppan universally To earn the ongoing trust of society, respect the law and corporate ethics in Toppan must quickly identify any illegal their day-to-day actions. The scope of the activity related to its business and respond Conduct Guidelines covers all of Toppan’s with action. The Toppan Helpline and the business activities. The company is also Toppan Internal Reporting System estab- considering measures to promote com- lished in August 2003 are important new pliance with the Corporate Guidelines among all employees of the Group. I Summary of Conduct Guidelines Promotion Activities

Revision of Conduct Guidelines Continual development While the Corporate Philosophy and Corporate Creed encompass universal Maintaining the trust of society values, the Conduct Guidelines must be continuously reshaped to fit the latest IEstablishing a Conduct changes in the business environment. In IInstituting measures to Guidelines promotion plan prevent recurrence Action Plan (annual plan; medium- and July 2003, three years after introducing long-term plans) its Conduct Guidelines, Toppan added a Conduct series of new provisions to strengthen Guidelines compliance and align the guidelines more ICreating education tools IComprehensive education closely with the Corporate Philosophy IQuestionnaires Check Do (specialist training) IAwareness surveys and Corporate Creed. Ie-learning Following revision, the guidelines were Conduct Guidelines Promotion Supervisor/ published in a booklet and distributed to Conduct Guidelines Specialist training Promotion Leader Conduct Guidelines Promotion Leader all company employees. Toppan also held (systematic seminars for about 2,200 managers at all foundation) Employees e-learning 21 of the company’s operational sites.

25 Information Risk Management Toppan has established an Information Security Management Committee, a Personal Information Management Committee, and Information Management Policy to improve the management of information security laterally across the company. Toppan also introduced a system for the auditing of information security in 2003, with plans to expand the system for complete coverage of the company in the future.

Obligations in the Information Instituting a management structure Information Security Communications Industry and developing it laterally The Information Security Management As part of the information communica- Committee and Personal Information Information security policy tions industry, Toppan appreciates the Management Committee have been In April 2001, Toppan instituted its Infor- extreme importance of information man- established as decision-making bodies to mation Management Policy as a compre- agement for securing customer trust. deliberate policies, rules, and other major hensive revision and improvement of the Information leaks, theft, and loss are just issues laterally across the company. The Rules on the Management of Confidential some of the risks associated with this committees meet regularly twice a year Information established in May 1991. industry. To manage customer informa- and on an as-needed basis to ensure the I Information Management Policy tion and internal confidential information effective sharing and thorough manage- 1. Employees shall comply with all internal rules safely and properly, the company adheres ment of information. on information management and manage information appropriately in full observance to an ongoing management cycle of estab- of the law and social order. lishing information-management policies, A unified management stance 2. Employees shall collect information for appropriate purposes using appropriate methods. laying down rules, educating the work- Toppan is establishing a unified system for 3. Employees shall recognize the value of infor- force, auditing operations, and reviewing information risk management that reduces mation as an asset and use information management policies and processes on a the burden on individual departments by safely and efficiently for the stated purpose of use. regular basis. eliminating procedural redundancies in 4. Employees shall safely manage information the information-security protocols for the handled on behalf of customers to secure customer trust. Stance on Information protection of personal information, for 5. To ensure the appropriate management of compliance with the Privacy Mark stan- information at all times, the company and Management its employees shall improve its information dards, and for Toppan’s web-related busi- management system based on periodic Toppan has publicly released its Infor- ness. The company has also introduced a reviews of social circumstances, technology trends, and the latest revisions in informa- mation Management Policy (Information daily routine for the handling of infor- tion systems. Security Policy) for employees and other mation management to raise the level of interested parties to peruse. The scope of security and thereby streamline the audit- Systemization of rules on information Toppan’s risk management system has ing function. security been considerably expanded through the Rules on information security have been establishment of a new system of rules established in layers. The current struc- on information management and the ture is made up of eight company-wide procurement of the ISMS (Information rules (including the Rules on Information Security Management System) and Privacy Handling) and four rules applied to spe- Mark certifications. When changes in cific businesses. In addition, every opera- the business environment require, Toppan tional site has established an independent reviews and revises all aspects of its infor- set of rules to raise the level of security mation risk management system, includ- management. ing the relevant policies and rules.

I Rules on Internal Information Management

Information Rules on the procurement, development, and protection of information systems Management Policy Rules on the security of computer rooms and information-processing devices

Rules on the management of e-mail operations

Rules on information handling Rules on Information Rules on the use of electronic mail Security Management Rules on the security of information regarding hiring and resignation

Rules on the security of information regarding the outsourcing of information systems Rules on the Management of Rules on the security of information regarding connections with outside systems Personal Information Rules on Internet usage

Rules on information security auditing Rules to Prevent Rules on information security education Insider Trading Rules on the operation of individual services

26 Social Report

Compliance

Obtaining and maintaining ISMS After this incident, Toppan began certification for information security Protecting Personal Information launching measures to obtain Privacy management Mark certification universally throughout In December 2001, Toppan’s TOPICA Personal information protection policy the company. The Nishinihon and Chubu website hosting environment was con- In February 1999, the Information Security Divisions applied for the certification in ferred the very first ISMS certification to Management Committee laid down the March and July of 2004, and all of the be awarded in the Japanese printing following information security policy. other Toppan divisions are expected to industry. Among the Group companies, follow suit by the end of the year. I The Personal information protection Toppan Forms Co., Ltd. obtained the cer- Policy of Toppan Printing Co., Ltd. I Privacy Mark tification for two of its data centers in 1. We hold great respect for the dignity of the individual and shall fully comply with our February 2003. Toppan and its affiliates internal rules, all relevant laws, and the prin- will continue to reinforce their informa- ciples of social order as we endeavor to protect the personal information entrusted to tion security systems. our company. 2. We are acutely aware of the risks that Regular auditing of information threaten the personal information entrusted to our company and shall take all reasonable security measures to protect it from wrongful In December 2003, Toppan began a series access, loss, destruction, manipulation, leakage, and all other forms of damage. of information security audits mainly at its 3. We shall only collect personal information head office using an auditing manual and for the purposes of the company’s business, checklist as tools. From the second half of excluding all information not required for Personal information management the company’s business. The collection, use, fiscal 2004, the company and its head and disclosure of personal information by in web businesses: results of three office plan to begin independent auditing our company shall be fair and appropriate at surveys all times. of all operational sites in a concerted 4. When customers entrust our company with Companies face a growing risk of infor- effort to further improve the security of personal information, our thorough information leakage from networks, especially mation management will secure their confi- information management. dence that the information is fully protected. through websites. Between November 5. We shall create an internal corporate system 2002 and September 2003, Toppan con- Awareness and understanding to protect personal information, operate this ducted three company-wide caravans and system effectively, and reform it as needed. through e-learning surveys on the guidelines for handling Toppan has also developed its own e- personal information for web business as learning program to educate employees Obtaining and maintaining Privacy a way to instill awareness among employ- on information security online. Since the Mark certification for the ees and confirm the status of compliance. company-wide launch in July 2004, the management of personal information Each of the surveys focused on a major program has been closely monitored In 2000, Toppan’s Securities Printing policy: the conclusion of contracts with using surveys, tests and other tools to Division became the first business in the subcontracting partners (first survey), the gauge the level of employee awareness. Japanese printing industry to attain confirmation of website safety using The information collected is used to revise Privacy Mark certification. The certifica- checklists (second survey), and the docu- the learning materials and operation tion has since been awarded to Toppan’s mentation of work histories (third survey). methods. Commercial Printing Division (certified in According to the results of the third 2001), ten operational sites of Toppan survey, the average implementation of Forms Co., Ltd. (June 2001 onward), and Toppan’s major policies, including the Toppan NSW Co., Ltd. (February 2004). conclusion of contracts and safety confir- In July 2003, a faulty adhesive used in a mation using checklists, rose consider- batch of return envelopes for credit card ably. Toppan is now preparing for an application forms resulted in a loss of audit of the company’s personal infor- documents containing personal customer mation management system from the information at post offices. The design of second half of fiscal 2004. Preparations return envelopes usually has no bearing include ongoing work, current initiatives,

Screenshot: e-learning in action (in Japanese) on the handling, processing, and storage and the development of new auditing of personal information. In this case, manuals and checklists based on the however, it had a very important bearing. know-how so far collected. The incident prompted a thorough re- evaluation of the way personal information is handled at Toppan, with a focus on employee education and measures to prevent a recurrence.

27 Measures on the Supply Chain A great many business partners and suppliers collaborate with Toppan to ensure that business and trade are conducted fairly over the entire supply chain. In 2003, Toppan held an Outside Creator Training course with business partners and revised its Procurement Guidelines from a CSR perspective.

including those at Group companies. These Relationship with Suppliers Fair Outsourcing measures are helping to build strong trading relationships between Toppan and its Toppan must build trusting relationships Compliance with Subcontract Act business partners. and cooperative systems with its raw Toppan depends on the support of a materials suppliers and other business great many companies—trusted partners Basic trade contract partners to carry out its businesses. One with whom business must be conducted Toppan is concluding basic trade con- strategy Toppan uses to build this trust with high transparency. Among the regu- tracts with its longstanding partners in is to form a comprehensive perspective lations governing subcontracting opera- business as another means to preserve on fair and equitable trade from the sup- tions, Toppan takes particular care to fairness in its dealings. Each contract plier’s position. comply with the Act against Delays in clearly lays out the basic items for trade Toppan also believes that CSR must Payment of Subcontract Fees, etc. to and the rights and obligations of both apply to the entire supply chain if the Subcontractors (Subcontract Act). Toppan and its partners. The objectives company is to be trusted by its customers. In March 2004, however, Toppan are to prevent problems in trade and sup- A CSR failure on the part of just one com- received a warning from the Fair Trade port highly transparent business for both pany can do tremendous harm. Just one Commission that a part of its subcon- parties. bad link in the supply chain will result in a tracting dealings were illegal. The com- In April 2003, Toppan revised the con- loss of trust among customers and society. pany acted swiftly to reform the areas of tract to include more items on legal com- To prevent this from happening, the noncompliance and prevent recurrence. pliance and the protection of personal supply chain itself runs in parallel with a Soon afterwards, following the revision of information protection from a CSR stand- chain of CSR assurance. Toppan actively Subcontract Act in April 2004, Toppan point. As of this writing, the new contract fulfills its CSR responsibilities with the conducted a thorough awareness cam- has been concluded with about 12,000 first-tier suppliers with whom it trades paign on the main points of the revised companies. The mutual respect for this directly. The first-tier suppliers, in turn, do law. Over the span of several months, basic trade contract will ensure the fair- the same with the second-tier suppliers, around 2,240 Toppan employees in charge ness of business. and the process continues down the sup- of subcontracting attended 22 seminars ply chain. across Japan. Outside creator training Toppan also published a Subcontract Toppan outsources design and other Act Compliance Manual with detailed types of work to a great many outside descriptions of the sections of the law creators. In doing so, the company takes that have a strong bearing on the care to prevent the infringement of intel- company’s business. The manual was lectual property rights by screening the distributed to all concerned employees, work of outside creators as thoroughly as it screens work created in-house. If an outside creator infringes the copyrights of I Overview of Supply Chain Management Based on CSR a third party, Toppan’s holds itself directly accountable to the end customers incon- CSR CSR CSR venienced by the infringement. From September 2003, outside creators were invited to a joint study campaign to Supplier analysis learn about intellectual property rights and Subcontract Act Survey compliance Management other issues with Toppan employees in Request Training for Request charge of outsourcing. Altogether, about outsourcing companies 500 participants attended 18 sessions. Request Toppan will continue holding awareness campaigns on new themes of social

Order OrderFirst-tier Order Second-tier importance in an effort to maintain fair supplier supplier outsourcing based on the mutual enlight- Customer Supplier Supplier enment of both Toppan and outside Business Business creators. partner partner Supplying products Raw materials supply Raw materials supply and services Supply of outsourced work Supply of outsourced work

28 Social Report

Compliance

dards in the areas of legal compliance, Supplier Analysis Fair Procurement Activities confidentiality, and the environment. To Toppan evaluates supplier candidates this end, Toppan has publicly released a based on the Basic Procurement Policy Basic Procurement Policy and Supplier set of Procurement Guidelines based on and Supplier Selection Standards. Besides Selection Standards its Basic Procurement Policy and Supplier the crucial factors of cost, quality, and Each year, Toppan’s purchasing depart- Selection Standards. By understanding delivery, the social responsibility measures ment purchases some 260 billion yen and cooperating with these guidelines, of candidates are duly considered in the worth of materials and equipment from Toppan’s suppliers fulfill their social evaluation process. In the case of major about 3,400 suppliers. Printing paper, ink, responsibilities as partners. suppliers, this evaluation is regularly metals, glass, and petrochemical products repeated through a process Toppan refers are procured in vast quantities, as are to as Supplier Analysis. The results of the printing machines and an abundance of analysis promote improvements in qual- other production equipment. As an exten- ity, cost reductions, and shorter delivery sion of the Conduct Guidelines, Toppan schedules, enabling Toppan to meet the has set down a set of Purchasing Rules to demands of its customers while continu- ensure that it fulfills its social responsibili- ally improving its cooperation with suppli- ties in the field of procurement. ers fulfilling social responsibilities. In addition, all employees involved in procurement activities are trained in areas Basic Procurement Policy website such as fair trade, legal compliance, confi- http://www.toppan.co.jp/aboutus/tech_info/ Conducting Fair Trade policy/index.html (in Japanese) dentiality, and environmental approaches in an effort to support supply chain com- Toppan provides an internal elective train- pliance. ing program on legal basics for employ- As a premise to conducting business ees in charge of sales, planning, and with suppliers, partners that do business promotion activities. The training aids the with Toppan must meet Toppan’s stan- employees in carrying out fair and prompt business dealings, as well as responding appropriately to customers with ques- I Procurement Guidelines tions about transactions. The same pro-

Basic Procurement Policy gram is provided at Group companies. IToppan will provide procurement opportunities in a fair manner to suppliers that meet its Supplier The main training topics include the Selection Standards. basics of intellectual property rights, legal IToppan will conduct its procurement activities fairly in keeping with the principles of fair trade and knowledge needed for contracts, the in full compliance with both domestic and international laws. Antimonopoly Law and its role in sup- IToppan will strictly manage Information acquired in the course of procurement and make every reasonable effort to maintain confidentiality. porting fair trade in the company, the Act IToppan will make every effort, in conducting its procurement activities, to protect and preserve against Delays in Payment of Subcontract resources and the environment. Proceeds, etc. to Subcontractors, and the Act against Unjustifiable Premiums and Supplier Selection Standards Toppan provides fair and equal business opportunities to suppliers that meet the following standards. Misleading Representations. Actual cases Once suppliers are selected, Toppan continually assesses their performance based on its original within the company and recent court selection standards in a cooperative effort to realize an even better trading relationship. decisions are reviewed using easy-to- Legal Compliance Fulfills social responsibilities and complies with both domestic and international law understand teaching methods and stu- Quality Meets Toppan’s standards and provides stable quality dent exercises. By nurturing a workforce Price Offers products at prices equal to or lower than those of competitors well versed in fair trade issues and recent Supply Meets Toppan’s delivery requests and provides a stable supply of products legal cases, this ongoing legal training Toppan reviews the performance and management stance of its suppliers by evaluating the following program will be encouraging fair trade in items. the company for years to come. Management Foundation Maintains a sound corporate financial base Technical Ability Actively improves conventional technologies and develops new products and technology Information Supply Ability Provides necessary and effective information in a timely and appropriate manner Confidentiality Strictly manages information acquired through trade and maintains confidentiality Concern for Environment Conducts business with sufficient concern for resource protection and environmental preservation CSR Measures Takes CSR measures and discloses them

29 Social Report Improving Customer Satisfaction

Toppan believes in the concept of Complete Quality Assurance—the total guarantee of quality in every operation, from research and development to planning, design, manufacture, sales, and service. In keeping with this approach, Toppan seeks to satisfy its customers as a company that creates new demand and proposes new ideas while considering society and sustainability.

Customer Satisfaction at Toppan

For companies that gain the bulk of Customer Needs IQuality assurance their business from customer orders, the highest achievement is to satisfy customers by meeting their demands

with good products at good prices. For Improving Customer Satisfaction Toppan, a B2B supplier, the goals are SalesPlanning/ Manufacture Shipment/ Design Service slightly different. As declared in its Corporate Philosophy, Toppan defines a “good product” as “a product created with dedication.” A “work” can be a service created “Work” through investment of passion and ideas or some form of software created through an investment of intelli- gence and skill. With this in mind, Toppan encourages customers to Society Needs IDemand creation/Idea proposal apply their marketing expertise by cooperating in product development, and innovates technologies by harnessing their technological develop- ITEnvironmental Security Universal ment strengths. As mentioned before, consideration design Toppan’s uses these approaches to “Create New Demand” and “Propose New Ideas” that benefit both society and the future.

I Quality Assurance in Toppan’s Business Activities

ICan we accurately understand the customer’s demands? Planning IDo we ever discover needs that don’t occur to the customers themselves?

I ➝ Do we conduct accurate and appropriate cost Quote Order calculations?

IDoes the manufacturing order to the plant satisfy quality Manufacturing Order (Q), cost (C), and delivery (D) requirements?

Improving IDo we have the technological development ability to Product Planning Customer generate new manufacturing methods? Satisfaction

IAre we effectively meeting the levels of quality required Manufacture to satisfy the customer?

Inspection IAre we conducting our inspections properly?

Shipment IDo we deliver the product on schedule?

30 Social Report

Improving Customer Satisfaction Strengthening Quality Assurance Toppan strives to deliver trusted products of the highest quality to its customers on a consistent basis. To do this, the company is promoting a set of unique TPM activities that consolidate the latest approaches to zero loss in production systems, quality management, process reform, and quality assurance.

system is now deployed in all of Toppan’s certification, are soon to follow along the Quality Assurance at Toppan plants. Successful results will require the same track. synergistic energies of all departments, The latest information on certification To build a deeply trusting relationship including manufacturing, development, of operational sites is available on the com- with customers, a company must provide and management, as well as all employ- pany website. superior products and services that the ees, from top management down through I ISO 9000s certification status information customer can trust. The very existence of the company ranks. http://www.toppan.co.jp/aboutus/tech_info/iso/ a company hinges on “Complete Quality Of the 40 domestic plants operated (in Japanese) Assurance”—a failsafe system to ensure by Toppan and its affiliates* in fiscal the prompt delivery of secure and func- 2003, 29 have been conferred the TPM IE activities tional products at a fair price. Award by the Japan Institute of Plant IE activities use technical solutions to The manufacturing and quality assur- Maintenance. In addition, four of those improve productivity. More efficient pro- ance departments are by no means the 29 plants have received the Award for duction systems are achieved through only parts of Toppan involved in quality Excellence in Consistent TPM Commit- the elimination of redundant and ineffi- assurance. In fact, the efforts are shared ment as a commendation for their further cient practices in the areas of human by many departments, with all employees progress in plant maintenance. resources, equipment, and information. cooperating as a team to firmly establish As part of its TPM effort, Toppan is pro- Note: Subsidiaries that receive management guid- Complete Quality Assurance. ance from Toppan Printing Co., Ltd. moting IE to establish a firm regime of efficiency at all of its workplaces. Mecha- nisms to manage the flow of goods make TPM Promotion ISO 9000s certification up an important part of the effort, as do Toppan was among the first companies quality assurance methods such as the In a company-wide bid to return to the in the Japanese printing industry to begin ISO standards and efficient work proce- roots of product creation, all of Toppan’s working towards the ISO 9000s certifica- dures to keep costs down. departments are collaborating in TPM. tion. Quality management has been built TPM—Total Productive Maintenance—is up gradually, and the management sys- a proprietary system that targets zero tems in use at the certified sites have Activities in the Food Business production loss through a fusion of qual- been introduced laterally to as many ity management, IE (Industrial Engi- other operational sites across the com- As a major packager of foods, Toppan neering), and ISO 9000s standards. TPM pany as possible. handles two very important steps in the dramatically improves production effi- In the near future, Toppan plans to assurance of food safety: preventing the ciency through modifications in equip- earn the certification at all of its opera- adherence of foreign matter to the con- ment and human resources. With those tional sites. The sites now in the process tainers that it produces, and preventing improvements Toppan can reform its cor- of establishing the necessary systems will foreign matter from entering supplier- porate structure and improve its competi- be certified in fiscal 2005 at the latest. provided ingredients when food products tiveness in quality, cost, and delivery. The Other sites, those that have yet to obtain are being packaged. Special audits are conducted to ensure I Quality Assurance at Toppan the preventative control of foreign matter at all of Toppan’s food packaging and container manufacturing plants, as well as the plants of business partners. Rigorous TPM controls are applied to prevent contami- (Total Productive Maintenance) nation from bacteria and foreign matter such as insects, metal particles from man- Continual Fostering employees management of who focus on ufacturing equipment, and debris from Toppan’s stable equipment equipment employees and their clothing. own TPM and quality High-quality products created by people and equipment ISO 9000s IE Safe and clean (Industrial Engineering) work environment

31 Creating Value through Research and Development As an avid proponent of the “customer first” principle, Toppan offers a host of high added-value products, systems and services geared to meet future needs. To accomplish this, the company continually works to strengthen ties outside the company while advancing independent research on cutting-edge ideas.

Basic Stance on Research and orating in technical tie-ups and technol- way in the technologies used to incorpo- Development ogy export programs inside and outside rate resistors, capacitors, and other pas- the country. sive parts into the substrates of smaller Working through its Technical Research cellular phones and other devices. Institute, Toppan takes an ambitious and Progress in Electronics free-thinking approach to research in Technology uncharted fields and the development of new products geared to meet future Basic technology for liquid crystal needs. Product development begins with displays joint surveys by the R&D, sales, and sales Toppan holds a large share of the market promotion departments to determine the for color filters used in liquid crystal dis- latest market trends and customer needs. plays for thin-screen televisions and per- Efforts to enhance performance and cre- sonal computers. To meet the market Semiconductor photomask ate new product systems culminate in demand for higher quality, larger, and the development of next generation prod- more reasonably priced filters, Toppan ucts with high value added and environ- has developed a slit application method New Media mentally-friendly features. In the field to make the application process for the of production technology, manufacturing color resistors more efficient. Electronic paper departments cooperate in developing auto- Other new developments include a Electronic paper is a completely new form mated and labor-saving production line permeable screen and the application of of reflective display that combines the technologies while reforming the manu- a low-cost and high quality micro-display virtues of electronic displays and paper. facturing process. These efforts have led method for rear-projection television Toppan teamed up with E Ink Corpora- to cost reduction, shorter delivery times, screens with fine pitch and high contrast. tion of the U.S. to develop a frontplate and higher quality. laminate, a key part of the electronic All of these initiatives depend on strong Research and development of paper display. Later, in April 2004, Sony cooperation within the company and with semiconductor materials Corporation adopted the frontplate lami- partners outside the company. Toppan In the field of semiconductors, the rapid nate for its e-Book reader, a move that collaborates in research projects with gov- miniaturization of circuit patterns and positioned Toppan as the world’s first ernment research bodies such as the New other elements requires the constant printing company to mass-produce elec- Energy and Industrial Technology Devel- development of more precise patterning tronic paper. opment Organization, as well as labora- technologies. Toppan has successfully tories in universities such as the University developed photomasks and stencil masks of Tokyo, Tokyo Institute of Technology, for the fabrication of circuit patterns for Tohoku University, Yamagata University, state-of-the-art semiconductor products and Hiroshima University. Outside Japan, in the 65-nm and lower range (one nano- Toppan is now involved in projects with meter is one billionth of a meter). These the Massachusetts Institute of Technology advances will contribute to the further and Oxford University. miniaturization of devices such as house- Toppan harnesses the benefits of its hold electronic appliances.

technologies for society by actively collab- Toppan has also been making head- e-Book reader from Sony Corporation

I Main Examples of Technology Export 25GB paper disc Optigraphics Corp. (Texas)...... Three-dimensional printing technology Toppan and Sony Corporation have Siam Toppan Packaging Co., Ltd. (Samutprakarn, Thailand) .....Paper container manufacturing technology invented a 25GB paper disc, a read-only recording medium composed of more Telstra Corp. Limited (Melbourne) ...... Prepaid card manufacturing technology than 51% paper. The large capacity of Blue Ridge Paper Products, Inc. (Virginia)...... Large-sized stopper manufacturing technology for paper containers for liquids these discs reduces the material usage per unit of stored information. The discs Weaver Popcorn Co., Inc. (Indiana)...... Technology for microwavable packaging materials can also be cut with scissors when no Balzers Process Systems GmbH (Alzenau, Germany) ...... Technology for a membrane-forming longer needed, providing an advantage process from the standpoint of information secu- Allied Material Technology Corp. (Taipei) ...... Liquid crystal color filter manufacturing rity. Commercial development of these technology discs is now underway. Avery Dennison Corporation (California) ...... Manufacturing technology for low- resistance conductive membranes

32 Social Report

Improving Customer Satisfaction

Virtual Reality

Virtual reality (VR) is already being applied for military simulations and aircraft pilot training, as well as industrial design and other areas. Toppan began developing VR applications to digitally preserve art- works and other cultural assets in fields VR presentation during the Mayan Civilization exhibit 25GB paper disc such as education. In 1997, the company Creator and copyright: National Institute of launched research on a new VR creation Information and Communications Technology Cooperation: Honduran Institute of Anthropology and expression technology capable of and History Forging into New Fields creating virtual duplicates of cultural artifacts with the extreme accuracy and reso- Applications for school study DNA biochips lution to be expected from one of the Scalable VR is also being used for educa- In recent years, the medical industry world’s top printing companies. The new tional testing. In one testing environment has started to make use of cellular-level technology has already been used to for students in elementary school, large- biotechnology, the foremost example create VR representations of the Sistine screen presentations were combined with being DNA technology. Toppan is meeting Chapel, Toshodai-ji temple, Nijo-jo Castle, specialized terminals for individual study the challenge with research and develop- and the Forbidden City Palace. groups in the same room. The combina- ment into biotech applications for its tion of two VR environments in a single technologies in the printing, electronics, Joint development of scalable VR area encouraged study groups working and packaging fields. When VR technology and networking separately to observe each other’s activi- As one example, Toppan is conducting technology eventually fuse, the applica- ties and absorb information peripherally joint R&D with a U.S. firm on a DNA tions of VR are expected to multiply. through a new channel. The result was a analysis chip that searches for the causes Before this becomes possible, however, a rich form of learning distinct from that of disease. DNA analysis using the new good many technological roadblocks will provided in conventional educational pro- chip will provide physicians with a more have to be cleared. grams using VR technology. detailed understanding of drug effects on Toppan and others are now overcom- individual patients. The company expects ing some of the challenges. In fiscal 2001, Future research goals the technology to lead to rapid advances the company commenced joint research VR research will provide applications in a in patient-tailored drug regimens admin- on scalable VR with the National Institute great many fields besides education. istered with optimal safety and efficacy. of Information and Communications Entertainment and social welfare are just Technology, the University of Tokyo, and two areas with nearly limitless possibili- Other measures Tsukuba University. This project will soon ties. All of society will benefit from the In other fields, Toppan is collaborating move past elemental research into the rich and intelligent living environments to with universities and manufacturers to networking of actual VR content. be created with VR technologies. find potential applications for new gener- Based on its current CG and VR tech- ations of IC tags and similar devices that VR applications at museums nologies, Toppan plans to research and can be attached to goods as sensors. In 2003, Toppan tested its scalable VR develop a next-generation “expression Toppan researchers are also studying technology in a virtual exhibit on Mayan technology” that can be used to convey energy-related technologies and effective Civilization at the National Science information. The foundations of this tech- ways to harness power from sunlight and Museum, Tokyo. In one part of the exhibit, nology will be developed in the near other natural sources. virtual artifacts from ancient Mayan future through active collaborations with Civilization were projected onto a large- the University of Tokyo, Tsukuba University, screen VR display that created a sense of Waseda University, and other research intimacy between audience and artifact. institutions strong in basic technology. Close by, visitors interfaced with a series of networked PCVR terminals with interactive displays of lifelike environments from the days of the Mayans.

33 Products and Services that Reflect Social Concerns Toppan is creating products and services that contribute to society, particularly in the fields of security technology and universal design.

Passport business basic resident cards. This is one way that Secure Communication Since 1996, Toppan has been providing Toppan is providing comprehensive sup- the U.S. and other countries with passport for the independent use of IC cards Toppan’s printing business got its start in port-issuing machines and holograms to and other applications. the printing of securities, an operation prevent forgery and manipulation. These that requires sophisticated anti-counter- products have won renown for their feiting technology. Now, many decades superb forge-proof technologies, and Total Solutions Using IC Tags later, counterfeiting and the illegal use of many clients appreciate the added secu- securities have grown into major social rity of having all phases of production— People think of IC tags as an enabling problems. Clients require ever higher levels from the development and manufacture technology working at the core of society of security, demanding the development of equipment and ink to the design of in the future. While this is certainly true, of ever more robust security technologies. holograms and plate-making and print- IC tags have the potential to contribute in Toppan has always been active in ing—performed exclusively in-house at many other ways, as well. The attach- developing new anti-counterfeiting tech- Toppan. ment of IC tags to manufactured goods, nologies. These technologies, together As passports adopt more IC technolo- for example, makes the goods easier to with new forms of highly secure printing, gies and visas adopt RFID, the integration recycle and separate at disposal. IC tags are crucial at the Toppan plants responsi- of Toppan technology will lead to further are already employed in the pedestrian ble for the printing of securities and improvements in security for both individ- ITS systems installed in cities to help the cards. The technologies are also flexible uals and nations. visually challenged navigate their way enough for application in other areas in around public spaces. the securities business besides printing. Information management operation Thanks to its strengths in the develop- business ment of leading technologies and appli- Brand protection The outsourcing of operations to third- cations, Toppan is now able to provide Products distributed outside of Japan are party firms is now accepted as an effective total IC tag solutions with its Tjunction frequent targets of brand counterfeiting. way to enhance management efficiency. and TesStar tags developed in-house. The To neutralize this danger, Toppan pro- For a company that handles and processes IC tags of the future will be built into the vides various industries with anti-counter- important information for other compa- infrastructure of the society as cohesive feiting technologies based on holographic nies, however, secure outsourcing is only tools that strengthen the ties between technologies and other strategies. feasible with strict information manage- companies and consumers and align the Toppan’s robust security technologies ment. Toppan solves this issue by provid- economic and environmental goals of combine sophisticated techniques in ing clients with Cert@id, an affordable communities and corporations. Toppan papermaking, plate-making, printing, and and user-friendly outsourcing service plans to accelerate the development of IC processing that are highly resistant to secured by Public Key Infrastructure (PKI) tags outside the company by taking part fraudulent reproduction, even as counter- encryption. This is just one of Toppan’s in various governmental tests. feiting technology itself advances. Toppan many total support solutions now simpli- also continues to develop compound fying life for the customer. security methods that combine technologies easily recognized by consumers IC card business along with hidden technologies difficult Society, corporations, and individuals for counterfeiters to detect. have suffered huge losses from card- related crimes such as forgery, manipulation, and identify theft. To meet the growing demand for security, a new gen- TesStar IC tag and reader eration of IC cards is spreading through the market. Toppan developed its first IC card ahead of competitors as far back as 1983. As a leader in the field, the company has proposed a succession of businesses based on this technology in the

Crystagram hologram years since. With the inauguration of the Basic Resident Registers Network System in Japan, Toppan has endeavored to streamline resident services and simplify operations by developing and manufacturing

34 Social Report

Improving Customer Satisfaction

and printed matter, as well as in consult- Promoting the wider acceptance of Universal Design ing work. universal design Toppan introduced its activities to pro- Amidst rising concern over the “graying” mote universal design as a printing com- of society and the infrastructural barriers pany at its well-received “Idea” exhibition restricting the socially disadvantaged in on universal design held in September– Japan, Toppan launched its ongoing Uni- October 2001. Later, the company set up versal Design Project in April 2001, well in a universal design page on the Toppan advance of similar projects organized by website to publicize its the measures out- other companies. Toppan practices uni- side the company. An interactive “pack- versal design to maximize its benefits as a aging clinic” was added to the page in discipline that identifies barriers in con- April 2004. ventional designs and provides alternative designs suitable for use by all. The company has laid down six principles based on the universal design concept and promotes measures to incorporate universal design more extensively in its products, spaces, environments, services, The picture changes with age: a comparison of views seen from young (upper photo) and elderly and information-delivery methods. eyes (lower photo)

I Toppan’s Six Principles on Universal Design Universal design of packaging Toppan universal design website 1. Design products and services that are more Toppan uses its Universal Design Diagnos- http://www.toppan.co.jp/ud/index.html responsive to people with different physical (in Japanese) abilities and perceptions. tic System for Packaging (PAT.P) to for- 2. Facilitate communication using multiple chan- mulate new proposals. The system is a nels for communication, including visual, oral, tool to create optimal packaging from the and tactile channels. 3. Make products easier to use by making user’s perspective by diagnosing the use them easier to understand. and handling of packages during the 4. Make products that are easier to move, easier to approach, and require less strength phases of the “package life cycle” from (remove the physical burdens). the purchase of the packaged product to 5. Design products that are safe to use proce- the use, storage, and disposal of the durally, functionally, structurally, materially, and environmentally. package. Toppan also provides indepen- 6. Provide products at a reasonable price and dently developed packaging. in the amounts required by society. Universal design packaging clinic website http://www.toppan.co.jp/ud/clinic/index.html (in Japanese) Creating color change models to reflect aging In the years leading up to 2001, Toppan affiliate Toyo Ink Mfg. Co., Ltd. teamed up with Katsunori Okajima, Assistant Professor of the National Defense Acad- emy (currently at Yokohama National

University), to research changes in color UD SELECTION standing pouch vision with aging. Scientists used to believe that the crystal lens of the eye yellows with age and ultimately bathes the visual fields of elderly people in a faint yellow hue. However, according to recent research by Toppan and Professor Okajima, elderly subjects with healthy eyes suffer no yellowing, but rather a dif- ficulty in perceiving blues and other colors under low-brightness conditions. The results of this research are now being used in the universal design of packaging

35 Social Report Respecting and Leveraging Human Assets

Toppan employees regard themselves as “human assets”—a pool of people who keep constant sight of their goals, solve problems, and take the initiative to act independently without awaiting instructions from others. Toppan’s core structure relies on its people as its most precious asset. The optimal system for respecting and leveraging human assets requires a safe and healthy work environment, thorough management of employee health, and comprehensive systems for employee compensation, benefits, and welfare.

Basic Thinking on Human

Assets IDesigning a compensation and benefits system that rewards “accomplishment” Employee •Redesign the basic structure of the personnel employee structure The skills and abilities required for Compensation •Create a new employee evaluation program that links compensation not only to an employee’s “Action,” but “Goals and Results” as well the various job categories at Toppan •Revise the retirement pay system to provide more incentives for long-term are carefully systemized, and policies employment are in place to nurture important IRaise corporate competitiveness by optimizing human assets and human assets. Human development organization with clear standards at Toppan is a process closely tied Optimum •Base the hiring, placement, and development of human assets on a firmly

Labor-related Policies grounded system for developing “ability and skill” Organization with the company’s extended person- •Clarify the “role and action” of an employee along with an employee’s “ability and skill”; achieve balance in compensation and benefits on nel system. As soon as employees join that basis the company they are given ample opportunities to improve their abili- IStrengthen business competitiveness through human assets ties and skills—opportunities extend- Human Asset development ing far beyond mere training and Development •Strengthen the function of the Personnel Development Center •Provide practical training on a continual basis education. •Maintain an environment that encourages personnel development Toppan also recognizes the importance of ensuring a safe and pleasant work environment and continuously Environment reviewing its systems for employee Global Service Maintenance compensation, benefits, and welfare.

Approach for Maintain the working Strengthen the service global personnel and living environments function of the Personnel & of employees Labor Relations Division

I Toppan Vision 21 and the Human Assets Education Cycle

Toppan Vision 21 Corporate Philosophy Corporate Creed Conduct Guidelines Business fields

Accomplishments

Results Goals Action Improvement Strength of Individual

Management Creating Value through Actions policies Realizing a positive IEarning the trust of customers cycle between individual IStrengthening business foundations and organization Business I policies Fulfilling corporate responsibility IStrengthening organization IImproving corporate value Medium-term Strength of plan Abilities and Skills Organization IKnowledge and information skills Term plan ITechniques and know-how ICommunication and learning abilities IAbility to identify and formulate tasks Department I Ability to accomplish tasks Maintaining the Work Environment plan IBasic skills

36 Social Report

Respecting and Leveraging Human Assets Training and Developing Human Assets Human assets at Toppan are developed over a multi-staged process linking hiring, assignment, training, utilization, and treatment. In each stage, Toppan implements a new set of policies tailored to maintain and nurture its human assets to the maximum benefit for all. The aim is to enhance the abilities and skills of employees while improving the results of the company.

I Basic Thinking on Human Flow of Human Asset Development and Measures Assets Development •Hiring opportunities are being expanded, including year-round Hiring hiring and global hiring. •Working environments are opened to non-employees through The tremendous forces of globalization, internships and other programs. the “graying” of society, and rapid tech- •Physically challenged employees make up 1.97% of the workforce, surpassing the legally mandated quota of 1.8%. nological progress continue to reshape the environment in which companies do •New hires are interviewed at the time of hiring, time of business. A properly functioning company Assignment assignment, and one year after assignment to ensure that they are (organization), meanwhile, is an aggrega- placed in the most suitable positions. •Employees are also interviewed and asked to provide feedback to tion of employees (individuals) who cre- ensure optimal assignment when they are being moved within the ate an environment in which improved company. individual abilities improve the results of •Education programs utilize rank-based training, division/ the organization, and vice versa. To attain Training department-based training, elective training (Toppan Business this condition, a good company works School), and special needs training. actively to enhance the individual skills and abilities of its employees, while good employees strive to bring value to them- •Systems provide for regular job rotation, the Challenge Job System selves and to the company as human Utilization (self-declaration), internal recruiting, the creation of internal assets. The company must maintain an venture firms, and other measures. environment to make this possible through various management systems. At Toppan, the human assets who bring value to the company are the most •From goals to action to results—the pathway to “Accomplishment.” Compensation The company is redesigning its compensation system and other precious assets of all. From hiring to systems to reward accomplishment and encourage the desire to the later stages of assignment, training, work. development, and compensation, Toppan takes steps to maintain a workplace envi- subsidiary for the physically challenged. ronment that instills employees with a Hiring As a result, physically challenged employ- deep and eager commitment to work. ees make up 1.97% of Toppan’s work-

Creating Value through Actions for Toppan offers employment opportunities force, surpassing the legal quota. Toppan in spring, autumn, and also at other times I Earning the trust of customers of the year. The largest influx of new Measures for Personnel IStrengthening business foundations employees comes during the hiring sea- I Assignment Fulfilling corporate responsibility son in April. IStrengthening organization IImproving corporate value Candidates for employment at Toppan Internships are interviewed at least three times Abilities and Skills Toppan Needs Toppan introduced an internship system before the company makes a hiring deci- IKnowledge and information skills in fiscal 2001 to give students a taste of sion, with most of the interviews taking ITechniques and know-how real working environments. Each year the place during the regular hiring. Employees ICommunication and learning abilities company hires from 120 to 150 students are encouraged to discuss their place- IAbility to identify and formulate tasks IAbility to accomplish tasks to work as temporary interns in the ment in the company on a formal basis IBasic skills research and development, planning and three times: once during the actual hir- design, and other departments (about 20 ing, once during the initial training after Reformulating the employee to 25 interns per department). Toppan entering the company, and once after the compensation and benefits system also holds business seminars for people employee is assigned to a division. Toppan is designing a new system for com- who miss the opportunity to serve as After the first year of employment, pensation and benefits that encourages interns. new hires are interviewed once more greater productivity. “Accomplishments,” to determine whether they are suitably as Toppan defines them, are the “goals” Employment for the physically placed in their current divisions. If the and “actions” that ultimately improve the challenged employees and company are both satis- company results. These goals and actions Toppan began hiring people with physical fied, the placements are formally decided. are concrete manifestations of the Corpo- challenges early on through Tokyo Metro- rate Philosophy, Corporate Creed, Conduct politan Prepress Toppan Co., Ltd. a third- Guidelines and Business Fields laid out in sector business mandated by the Tokyo the Toppan Vision 21 statement. Metropolitan Government as a special

37 Measures to Nurture Human Rank-based education teaches employ- This new system ensures that Toppan’s Assets ees to “create value through actions” training programs respond to the imme- with an enlightened awareness of their diate needs of each department. Toppan supports its endeavors to train roles, responsibilities, and obligations to human assets with systems that nurture the organization. Toppan’s department- An environment for human assets “skilled and able” employees who can based and election training programs development “create value through actions.” One such focus on practical abilities and skills. In July 2004, the newly established system, a series of human assets develop- Toppan Training Center commenced oper- ment programs, has been established to Human Assets Development ations as an employee training base geared clearly show the skills and abilities that Committee for intensive and integrated training. The employees can acquire. These programs Formerly, each division at Toppan con- center is annexed with a lodging wing are divided into rank-based training, ducted its own human assets develop- and located conveniently near Tokyo at department-based training, elective-based ment to strengthen its competitiveness. the head office plant of Toppan Graphic training at the Toppan Business School, The Toppan of today is building its Co., Ltd. in Kawaguchi City, Saitama Pre- and training for special needs. strengths comprehensively through the fecture. Toppan expects that the inaugu- enhanced functions of its Head Office ration of this new facility will expand and Ability Development Department. enhance human asset activities across the The management structure overseeing entire Toppan Group. human assets development has also been significantly changed. Functions formerly placed under the exclusive control of personnel departments are now managed by the Human Assets Development Com- mittee, a relatively new entity made up of

Toppan Business School Guide representatives from each department.

I Toppan’s Human Assets Development Programs

Training center with lodging wing Rank-based Training

INew department Management Measures to Leverage Human manager training development training INew manager training Assets INew supervisor training Selective department IOJT Brother/Sister manager and assistant The optimal environment for using human training department manager Creating Value INew employee training training assets at Toppan is partly the outcome of through Actions IRecruit training the company’s system for appropriate job IEarning the trust of Executive business school rotation on an as-needed basis. customers IStrengthening business Understanding, learning, and acquiring the requisite skills In 2002, Toppan introduced a system and abilities for each rank (including roles, responsibilities, foundations and obligations) to dynamically rotate highly capable IFulfilling corporate responsibility employees among different business divi- I Department-based Strengthening organization Special Needs Training sions. The objective of this “phase rota- IImproving corporate value Training IAssistant manager IEnvironmental tion” system is to train a new breed of training at each education, information highly versatile employees capable of Abilities and Skills department security handling various tasks outside of their Toppan Needs IMid-career training at IOverseas study each department home divisions. This effort is expected to I Knowledge and INew employee training information skills at each department aid in the establishment of a comprehen- ITechniques and know-how sive order-receiving system that can bet- ICommunication and Toppan Business School Individual Training learning abilities ter respond to the company’s demands. I Ability to identify and ILearning programs for ITraining in each division At manufacturing facilities, job rotation formulate tasks different skills and and at each work site I Ability to accomplish tasks abilities helps employees gain work experience in I Basic skills ITechnical, research all the various manufacturing processes. training for manufacturing departments The promotion of multi-skilled employees ITraining for sales benefits both productivity and the employ- departments ees themselves. Acquiring the skills and abilities required at each business division and department Human assets training in other work environments at Toppan adopts a goal-

38 Social Report

Respecting and Leveraging Human Assets

based approach and encourages employ- employees had submitted 40 proposals work-shift schemes to suit the scheduling ees to take advantage of a growing range for new ventures. Of these proposals, one demands of their tasks. Monthly working of work experiences. has been adopted as an internal product, hours are determined in advance by a two have been turned into internal busi- Manufacturing Committee made up of Challenge Job System nesses, and a fourth has evolved into representatives from management and To encourage the optimal use of human a new subsidiary, Toppan Character labor. All working schedules are rigor- assets, Toppan invites employees to Production Co., Ltd. ously controlled. declare the positions they want. Under its Employees in sales and production Challenge Job System introduced in fiscal Use of female employees management departments sometimes 2003, Toppan interviews and surveys Toppan recognizes its utilization of female need to work long hours to respond to employees in the sales, technical, and employees as an important issue in the the demands of customers. Among its administration departments and provides development of human assets. Currently, various steps to cope with this issue, them with tools to help them form their as many as 40 women occupy top man- Toppan has appointed a special commit- own careers. Information gleaned from agerial and supervisory positions within tee of representatives from management the employee surveys is used for the plan- Toppan. As existing systems are refined, and labor for the express purpose of ning of job rotations. the company will be introducing new shortening working hours. mechanisms and considering more active Providing various employment forms of preferment for female employees. opportunities Labor-management Relations Toppan introduced its Senior Employee System and Specialist Employee System Holiday/Working Systems Toppan has established a Management early on as mechanisms to improve its use Conference as a forum for discussion of human assets. To encourage employees to take time off, between labor and management, as well Under the Senior Employee System, vet- Toppan is implementing a Memorial as a number of specialized committees to eran employees past the retirement age Holiday System that recognizes anniver- discuss the compensation system, working of 60 are reemployed as senior employ- saries and other important days. In fiscal hours, welfare benefits, and other issues. ees in departments that have a need. 2003, the ratio of paid holidays taken to On October 1, 2001, independent labor Under the Specialist Employee System, overall paid holidays granted was 38.2%. unions for the Hokkaido, Tohoku, and Toppan hires employees with highly spe- Nishinihon Divisions merged with the cialized knowledge on a contract basis for Working systems Toppan Labor Union (Parent company fixed periods of time. The benefits of spe- Toppan introduced flexible working hours only) to create a single nationwide union. cialist employees are determined based in 1988 to accommodate the company’s on a combination of work abilities and special requirements as an extended- results. hours business. The R&D department and several other departments have since Mobile use of human assets adopted “Super Flex,” a new working Toppan Human Information Services Co., system with no fixed times for starting Ltd.—THIS—is a personnel subsidiary ded- and ending work. icated to the management of personnel Workers at the manufacturing depart- information from Toppan and affiliates, ments at plants and other sites work as well as payroll and other personnel- late-night shifts and use various other related tasks. THIS also manages a personnel dispatch service to help Group employees find new positions. This new I Long-term Holiday and Work Leave Systems operation, the rapid dispatch of required Stock Holiday Under normal circumstances, paid holidays left unused for two years are no longer valid. However, Toppan’s employees can accumulate up to 50 days of personnel to Toppan work sites, is leading paid leave for recuperation from an illness, the care of an ailing spouse, to the establishment of a mobile system of nursing, or recovery from an unexpected crisis. human assets management. Childcare Leave Toppan grants parents an extended childcare leave for up to one year (up to a child’s first birthday), with the choice of working a shortened workday upon their return to work. Forty-eight Toppan employees took advantage of the Internal Venture System system in fiscal 2003, including one male. In fiscal 2001, Toppan launched an Nursing Leave Employees with ailing relatives can take optional nursing leave for up to one year, or opt to shorten their workday by as much as two hours. Internal Venture System to support the Volunteer Leave Under special circumstances, employees working for socially redeeming creation of next-generation businesses causes are permitted to take up to one year of volunteer leave with partial and encourage employees with entrepre- compensation. Employees used this system to participate in overseas youth neurial drive. By the end of fiscal 2003, activities in fiscal 2003.

39 Health and Safety, Health Management, Welfare Toppan goes to great lengths to provide safe work environments in which employees can function comfortably and securely. Employees and their families can also expect outstanding health and welfare benefits through the ongoing efforts of the Toppan Group Health Insurance Society and Toppan Group Welfare Organization.

Service Co., Ltd. responds together with Health and Safety fire response squads to ensure optimal Health Management disaster control at each operational site. Health and Safety Committee The fire-response squads take part in Regular health and lifestyle illness The Health and Safety Committee dis- a competition sponsored by local fire checkups cusses the issues of labor safety, health, departments and regularly win champi- All Toppan employees undergo regular and accident prevention at the work- onships and other honors during exercise health checkups once a year as part of place. Once a month, labor and manage- competitions. the health management program (twice ment come together to review hazardous a year for employees handling organic operations and hazardous work sites in solvents). Employees under 35 years old an effort to improve the work environ- undergo general checkups, and those ment based on internal standards and the 35 and older undergo a comprehensive stipulations of the Industrial Safety and screening for lifestyle-related diseases. Health Law. Thorough efforts by site managers to pro- Toppan’s factories and plants also con- mote the health examinations led to vene independent committees to discuss 100% participation in fiscal 2003. specific aspects of their working envi- Toppan and its health insurance society

ronments and measures to meet legal Competition for fire-response squads also subsidize health examinations for requirements. employees’ spouses aged 35 years or Labor accident status above. Fire and disaster prevention In fiscal 2003, Toppan employees were Toppan takes a vigilant stance against involved in nine labor accidents that Mental health fires and disasters. Flammable materials resulted in injuries requiring time off from Toppan recognizes that mental health is are handled with extreme care, electrical work. On a company-wide basis, this as important as physical health. With this machinery and production equipment are translated into a frequency rate of 0.30 in mind, the company provides a free closely inspected on a daily basis, and fire and severity rate of 0.01. The company consultation service with employees via drills are carried out several times a year will press forward with its endeavors to telephone and the website in cooperation to boost preparedness. In the event of eliminate accidents and improve labor with the Toppan Group Health Insurance an actual emergency, Toppan Security safety. Society. The system allows employees to

I Toppan Group Health Insurance Society The Toppan Group Health Insurance ees and their families through activities association reduces healthcare costs for Society, one of the oldest organizations to promote health and prevent illness. employees, funds its own operation, of its type in Japan, was formed in 1926 As side benefits of these efforts, the and enhances productivity for Toppan. after the enactment of the Health Insurance Law. The association now serves about 80,000 members, includ- I Main Activities of Toppan Group Health Insurance Society ing 37,000 employees from the Toppan Medical treatment facilities Directly operates 60 medical treatment offices nationwide to provide regular checkups and screenings for lifestyle-related Group and 43,000 dependents. diseases for employees. The principal function of the associa- Supports health promotion Supports health promotion activities at operational sites to achieve tion is to improve the health of employ- efforts at operational sites a healthy working atmosphere. Supports family health Subsidizes and supports sports events and medical exams to improve the QOL of the insured and their dependents. Develops health solutions Supports comprehensive activities to promote health at operational sites by collecting and analyzing health data. Health public relations Expands knowledge on health-related issues through public relations activities, with a focus on the newsletter HOKEN and the Association website. Home treatment support Supports programs for elderly members covered under the association’s medical care plan and their families. The association cooperates with 50 other health associations in sponsoring a nursing education program that seeks to raise awareness about nursing insurance and encourage participation. As of this writing, 3,721 participants have taken part in 35 sessions held in major cities across Japan. Recreation facilities Directs the operation of four recreation facilities and membership contracts with 31 others to promote employee health and leisure. Association newsletter HOKEN

40 Social Report

Respecting and Leveraging Human Assets

freely consult on relationship problems, and nurture health promotion managers established. In other areas, Toppan offers childcare concerns, difficulties in nursing at the workplace. employees various forms of financial sup- their elderly relatives, and any other issues port while contributing to the Toppan that may be troubling them. Group Employees Shareholding Associa- tion, Toppan Group Insurance and other Preventing secondhand smoke benefit systems. As a company that relies heavily on the use of organic solvents at its operational sites, Toppan has long established separate smoking areas at its plants and factories to ensure safety. And with the enactment of the Health Promotion Law Training for Health-up Leaders in May 2003, more stringent measures to separate smoking areas are now been imposed at the head office and all other Welfare operational sites. Henceforth Toppan will Tennis tournament on the grounds of be adopting a zero tolerance policy Toppan operates a number of systems to the Technical Research Institute towards secondhand smoke. provide welfare benefits to employees. The Toppan Group Welfare Organization, Other health promotion activities in turn, offers welfare programs for the Toppan works with the health insurance benefit of employees and their families. society to plan and hold health promotion All Toppan employees are free to use lectures and other events at each opera- sports centers and recreation facilities tional site. The company also appoints either operated directly or contracted by “Health-up Leaders” to provide informa- the company. In the area of social insur- tion, train employees on a regular basis, ance, all systems required have been fully

I Toppan Group Welfare Organization In keeping with its philosophy of “coop- on the philosophy of mutual aid the health and enrich the lifestyles of erative creation,” Toppan and its employ- between the members and their fami- members and their families. The orga- ees have created the Toppan Group lies, supporting programs to stabilize life nization is particularly active in “life Welfare Organization, another source and enrich the lifestyles of members of design” activities for members. of welfare benefits offered in addition every age. In the future, the organization plans to the standard benefit packages pro- Benefits include compensation pay- to put more effort into life stage sup- vided by the company itself. Founded ments, loans, and other forms of financial port and add to the compensation and in April 1996, the organization operates support, as well as services to promote loan benefits being offered.

I Life Design Support Programs Life plan support system Holds life planning seminars for employees aged 53 and over and their spouses. Study support system Creates tie-ups with culture schools and partially subsidizes school fees for employees and their families. Housing introduction Offers discount prices to employees purchasing, moving, or system rebuilding their homes. Second life support system Offers various information for retirees to promise employees healthy and happy retirements. Post-retirement medical aid A savings plan to encourage employees to save more once they system reach the age of 50 and build up adequate cash reserves to fund necessary medical care during their early years of retirement (up to the age of 70). The welfare organization contributes a part of the medical aid savings on behalf of employees who switch to the post-retirement medical aid system. Good living support system A consultation system to provide timely advice to employees on Toppan Group Welfare everyday life issues such as marriage, housing, the law, taxes, Organization guidebook nursing, funerals, and ceremonies. TOPPIA GUIDE BOOK

41 Social Report Activities for Society and Culture

Many of Toppan’s social and cultural activities contribute to a fulfilling lifestyle. Besides operating cultural facilities such as the Printing Museum and Toppan Hall, the company supports various cultural events and promotes cultural activities in local communities. As one of the world’s largest printing companies, Toppan actively fulfills its social responsibility to protect forests.

Basic Thinking on Activities for Society and Culture

The Corporate Philosophy exhorts the IContributing to the Traditions and company “to contribute to a fulfilling Development of Printing Culture •Operating the Printing Museum

lifestyle as a mainstay of information Toppan •Operating The Textbook Library (Tosho Bunko) and culture.” Social and cultural activ- •Developing industry groups, etc. ities are some of the most important ’ measures the company takes. s Activities for Society and Culture ISharing Emotions The Toppan Koishikawa Building is •Operating Toppan Hall •Cultivating aesthetic appreciation in young the hub of culture at Toppan Printing people, etc. Co., Ltd. The many cultural activities held there in the Printing Museum and Toppan Hall typify the company’s efforts to interact with local commu- IProtecting Forestry Resources •Promoting tree plantation businesses, etc. nities and share its facilities. These endeavors receive high praise from society. ILiving in Harmony with Local As a major consumer of paper, Communities Toppan fully appreciates its social •Plant tours •Sponsoring and participating in local mission to protect forests. To fulfill community events this mission, Toppan actively under- •Opening company facilities to the public, etc. takes numerous forestry protection activities.

I Cultural Facilities in the Toppan Koishikawa Building

1–21F Offices

Printing Museum: Library Toppan Hall

Printing Museum: Printing Museum: Prologue Exhibition Zone Main Exhibition Room (General Exhibition Zone)

B1F

Printing Museum: VR Theater Printing Museum: Printing Workshop

42 Social Report

Activities for Society and Culture Contributing to the Traditions and Development of Printing Culture Toppan was founded to make printing technology useful for all of society and continues to expand its businesses based on this principle. As one of the largest printing companies in the world, Toppan is entrusted with the social mission of disseminating the culture of printing and supporting the progress of the printing industry.

Preserving Textbooks for The Development of Printing Museum Posterity the Printing Industry

In October 2000, Toppan opened the The Textbook Library, an institution As an industry leader, Toppan has always Printing Museum, Tokyo as a way of shar- opened by Tokyo Shoseki Co., Ltd. in striven to modernize the printing industry ing the historical significance of printing 1936, now houses about 150,000 text- and promote information culture in and the tremendous contributions of books, the largest collection in Japan. Japan. Toppan Chairman & Represen- printing to the development of human Every variety of textbook is represented, tative Director Hiromichi Fujita has spear- civilization. The public can visit the General from the very newest editions to antique headed efforts to develop the industry Exhibition Zone in the Main Exhibitions teaching materials from the public district through his activities as the chairman of Room year round, as well as Temporary schools and private temple schools of the the Japan Federation of Printing Indus- Exhibitions held several times annually. Edo Period. Researchers, students, and tries*1 as a keynote speaker at the 2001 The museum also includes the Printing the general public are all free to browse World Print Congress*2 (since 1995) and Workshop, VR Theater, specialized library, the collections. No admission is charged. as a co-chairman of the 2002 COM- and museum shop. The library contains The Textbook Library also undertakes PRINT*3 conference. books and magazines on printing and activities to support progress in education, The decision to hold the 1st World printing-related fields, with a document including the annual Tosho Education Printing Technicians Conference*4 of search corner and reading room. By the Award commenced in 1984. Every year, September 2003 in Japan was based on a end of the third year of operation in the library selects the best essay on teach- proposal by Chairman Fujita. Printing September 2003, more than 100,000 ing from among many outstanding sub- technicians gathered from around the visitors had visited the museum. missions and honors the author at the world to forge a vision of the printing award ceremony. The winning essay, industry in the 21st century from a global General study for students together with the other submissions, are viewpoint. The conference encouraged a Local elementary and middle schools use published in an annual collection for the free exchange of ideas, along with the the Museum Printing Workshop for new teaching community. The library also opportunity to showcase the tremendous learning programs (general study), while cosponsors the Nursery Rhyme Culture potential of the Japanese printing indus- companies use it as a venue for training Award with The Association of Children’s try to the rest of the world. classes on printing. Starting from 2001, a Song Writers in Japan to nurture the tra- year before the general study program dition of nursery rhymes. began, the Kanatomi Elementary School in Bunkyo Ward, Tokyo commenced a series of hands-on learning programs at the workshop for its students. The programs offer classes on the history and technology of printing, as well as socio- cultural topics such as the role of poster 1st World Printing Technicians Conference art. Students are encouraged to experience the entire printing process, from the The Textbook Library first stage of creative conception to the choosing of paper and inks, ink preparation, and the printing itself. All told, more than 150 companies, specialist schools, and other organizations make use of the workshop. *1 Japan Federation of Printing Industries *3 COMPRINT Founded in 1985 by 10 printing companies as a In keeping with its name, a hybrid of “Communi- vehicle to raise the printing industry to a higher cation” and “Print,” this international conference level and improve lifestyle culture. The federation addresses the status and outlook of the com- undertakes various activities to address the mission munications industry with a focus on printing and tasks of the industry as a creator of infor- and the debate of strategic policies. The meeting mation value in the 21st century. was merged into the WPC after 2002.

*2 World Print Congress (WPC) *4 World Printing Technicians Conference (WPTC) Jointly organized by printing federations from A conference proposed by Toppan Chairman around the world every four years to address Hiromichi Fujita at the 7th World Print Congress issues directly facing the industry and discuss the in Beijing in 2001. As Chairman Fujita proposed, important topics to do with marketing, technology, the WPTC serves as a forum for technical discus- and management in the 21st century. The next sion among the world printing industry on three congress will be held in South Africa in January fronts: 1) further implementation of IT, 2) more General study program for Kanatomi Elementary 2005. aggressive action to solve environmental problems, School in Bunkyo Ward, Tokyo and 3) the standardization of printing technology.

43 Sharing Emotions As a leader in the information communications industry, Toppan believes that the communications of the future must have the power to stir human emotion. This makes Toppan’s support for music and the visual arts all the more crucial.

The hall has been constructed with a Toppan Hall barrier-free design, including wheelchair- accessible areas. Among the many arts that stir human emotion, music is one of the most ubiqui- tous and beloved. Toppan Hall is a meeting place where classical musicians come together with the audience to share emotion. Toppan opened the hall in 2000

to commemorate its 100th anniversary. Calendar of award-winning submissions for the Today it serves as a kind of cultural retreat: Book Report Drawing Contest a place for soothing refuge in the highly

advanced and often chaotic information Barrier-free design society of the present. Choral Groups Co-sponsoring the Book Report A hall opened to the public Drawing Contest In 1959, Froebel-Kan Co., Ltd. organized Since its opening, Toppan Hall has hosted the Froebel Boys Choir to foster young some 40 events a year. The concerts con- Since 1989, Toppan has assisted The men with refined sensibilities in a country tribute to the local community, nurture Mainichi Newspapers Co., Ltd. and Japan where boys choirs were relatively rare. young artists, and spread the apprecia- School Library Association as a co-spon- Since its founding, as many as 1,000 boys tion of classical music among younger sor of their annual drawing contest to have passed through its distinguished fans. The Toppan Hall impresarios sup- encourage youths to express their impres- ranks. The choir now has about 80 young port up-and-coming young musicians at sions of books through drawing. The con- vocalists, ranging from 3-year-olds to sec- the free Lunchtime Concerts and similar test accepts submissions from students in ond-year students in middle school. events. More than 140,000 people have the lower and higher grades of elemen- The boys give one annual performance, now attended performances in the hall. tary school, middle school, and high as well as special concerts, recitals in pre- Thousands among them have praised the school. About 430,000 submissions from fectural culture centers, and studio outstanding acoustic design, as have the more than 7,000 schools were received recitals for TV commercials. Concert audi- many artists from Japan and the rest of for the 15th contest in 2003. The young ences praise them lavishly. the world who have performed there. creators of the prize-winning drawings The hall has also garnered attention out- are conferred the Toppan Printing Co., side of Japan for its superb acoustics dur- Ltd. Award, a reproduction of a famous ing performances of chamber music. painting printed using Toppan’s new Primagraphie technology. The top 12 submissions from the winners of the Excellence Awards are reprinted in a calendar distributed free of charge to schools and other institutions

nationwide. Froebel Boys Choir

Toppan Hall

The 15th Book Report Drawing Contest

Lunchtime Concert

44 Social Report

Activities for Society and Culture Tree Planting and Harmony with Local Communities As a major consumer of paper, Toppan works vigilantly to protect and nurture forests through direct and indirect initiatives. In addition, all of Toppan’s operational sites in Japan are involved in communication activities with their local communities.

Investment in PPT of Australia Harmony with Local Tree-planting Businesses In fiscal 2004, Toppan plans on taking Communities a capital stake in Plantation Platform of Funding for GPFL in Australia Tasmania Pty. Ltd. (PPT), a plantation busi- All of Toppan’s operational sites organize In 1997, Oji Paper Co., Ltd. and Nissho ness in the State of Tasmania, Australia. activities to deepen their ties with the Iwai Corp. (now Sojitz Corp.) jointly PPT was founded in 1999 as a joint ven- local communities in which they operate. formed the Green Triangle Plantation ture of Daio Paper Corporation and seven Most of the sites invite neighbors from Forest Company of Australia Pty. Ltd. other Japanese companies seeking to the community to take on-site tours, and (GPFL), a tree-planting business focused establish a hardwood plantation in north- many hold annual beer festivals in July on the production of hardwood chip east Tasmania in collaboration with the or August. Others organize get-togethers in the State of Victoria, Australia (The Tasmanian Forestry Commission. The ven- between employees and neighbors to Hokkaido Electric Power Co., Inc. joined ture aims to plant 7,500 hectares of nurture friendships. These and other activ- the joint-venture in the year 2000). With trees by the end of 2014. The first 2,000 ities have made the sites popular destina- more than 5,990 hectares of new forest hectares were planted between 2000 and tions for local people seeking relaxation already planted as of the end of 2003, 2003. and recreation. Needless to say, the men the company continues to make good and women of Toppan also take part in progress towards its target plantation of Japan Overseas Plantation Center for community events outside the company. 10,000 hectares by 2006. From 2007, the Pulpwood venture will begin felling trees and replant- In fiscal 1999, Toppan became a sup- Public space at the Toppan ing saplings to maintain the plantation. porting member of the Japan Overseas Koishikawa Building From 2001, Toppan also began partici- Plantation Center for Pulpwood, an orga- The Toppan Koishikawa Building (Bunkyo pating in a project to develop methods to nization promoting sound economic devel- Ward, Tokyo), completed in May 2000, 2 monitor the amounts of CO2 absorbed by opment and environmental preservation features an approximately 3,000 m forests, in cooperation with the National in local communities around the world. expanse of “public green space” lushly Institute for Environmental Studies, The center actively surveys and researches planted with some 5,500 trees and Mitsubishi Research Institute, Inc., and Oji commercial tree plantations overseas. shrubs. Employees and the public are Paper Co., Ltd. GPFL contributes to this encouraged to visit. project by providing a research field for data measurement in Australia.

I Tree Planting Sites in Australia

Public space at the Toppan Koishikawa Building

Multipurpose facilities and gymnasiums open to the public The gymnasium at the Itabashi plant (Itabashi Ward, Tokyo) and multipurpose

Plantation of GPFL Plantation of PPT facility “Yuai Fraternity Plaza” at Toppan’s Asaka plant (Niiza City, Saitama Prefec- ture) are open to the local communities as well as Toppan employees. The facilities are used to host local sports events, rehearsals for musical ensembles (including employee groups), and other functions that require community spaces of these types and are much appreciated.

45 Social Activity Highlights

Instilling the Corporate Philosophy with the CONVEX Newsletter Toppan uses an internal newsletter as another medium to encourage the fulfillment of CSR.

Bringing the Corporate Corporate Philosophy Philosophy Closer to Employees , shall Each of us shall reciprocate the continued trust of , The corporate philosophy Toppan Vision create dedicated by reciprocate our customers’ continued trust, 21 is the embodiment of Toppan’s most harnessing , create dedicated products by and contribute to a fulfilling lifestyle important values and the future direc- as a member of Toppan, tions of Toppan’s businesses. Beginning harnessing our vibrant knowledge and technology, a mainstay of information and culture. from October 2001, Toppan’s newsletter “Work” for me and contribute to a fulfilling lifestyle as CONVEX has been running “Think! Toppan a mainstay of information and culture. Vision 21 is for Everybody!”, a special Important parts of the Corporate Philosophy are feature on the Corporate Philosophy. The left blank so that employees can apply the statement to their own working situations and ponder aim is to encourage employees to live the their roles more deeply. philosophy with a profound understanding of its purposes and beneficiaries. Guest contributors—employees from different divisions, positions, work types, ranks, and genders—write out what Toppan calls “My Mission” statements, detailed descriptions of how they infuse the Corporate Philosophy into their own work. Over the past two and a half years, CONVEX has published the My Mission statements of 175 employees. The authors of the statements strengthen their own resolutions by committing them to paper, while readers discover how the corporate mission extends into the day-to-day activities of every type of employee within the company.

Feature Articles on CSR

CONVEX runs feature articles on CSR topics in the hope of deepening the involvement of the Toppan workforce in CSR activities. In the October 2003 issue, for example, readers learned about the Toppan Helpline and the importance of compliance in an article on “Expanding the Conduct Guidelines.” Later, in the March 2004 issue, readers were updated on the latest news from the Compliance Department and special reports from the authorities on compliance in an 8-page feature article on “Understanding Corpo- rate Social Responsibility and Toppan’s Measures.” Toppan will continue using its internal communications tools to bring CSR closer to its employees.

CONVEX newsletters (in Japanese)

46 Environmental Report

Living in harmony with the environment is clearly stated as one of the goals of the Corporate Creed. A Declaration on the Global Environment has been made, and specific measures to meet the company’s environmental responsibilities are being carried out in the four fields of Environmental Management, Eco-protection, Eco-creativity, and Environmental Communication Activities.

An overview of the environmental impacts of business activities, Toppan’s environmental action plan based Toppan’s Environmental Vision ————— P. 48 on the Declaration on the Global Environment, and major results

The systems forming the foundation of all Environmental Management —————— P. 54 environmental activities, and the organizational Activities creation of environmental measures

Activities to reduce environmental burdens at plants, ————————— Eco-protection Activities P. 58 offices, and logistics departments

Environmentally-friendly products, technologies, Eco-creativity Activities —————————— P. 64 and services to contribute to the realization of a recycling-oriented society

Communications activities creating relationships Environmental Communication ————— P. 70 among a wide range of interested parties both inside Activities and outside the company Environmental Report Toppan’s Environmental Vision

Toppan has set forth a Declaration on the Global Environment on the basis of its Corporate Philosophy and Corporate Creed. The declaration forms the foundation of the Environmental Action Plan, the company’s framework for the promotion of specific environmental activities from fiscal 2004 onward.

I Input/Output Data Toppan’s Environmental Burden and Environmental Impact INPUT OUTPUT Energy Atmosphere To effectively reduce the burden it Total energy consumption CO emission (t-CO ) 853,359 18,423 2 2 places on the environment, a com- (1,000 GJ) Emission of substances pany must accurately understand the Electric energy (1,000 GJ) 13,544 destructive to the ozone layer 5 Fossil fuel energy (1,000 GJ) 4,879 (ODP-t) impacts imposed by all of its processes Information NOx emission (tons) 224 & and operations. Toppan compiles an SOx emission (tons) 67 Networks Emission of dioxins (g-TEQ) 0.013 Eco-balance sheet on the input (use of materials, energy, etc.) and output Water Water system and soil (emissions created by production) of Water consumption (1,000 m3) 14,698 Total water discharge (1,000 m3) 12,011 3 3 every production plant, and the sites Industrial-use water (1,000 m ) 1,418 Public water system (1,000 m ) 8,721 Municipal water (1,000 m3) 3,145 Living Sewage system (1,000 m3) 3,290 themselves conduct multifaceted envi- 3 Environment Groundwater (1,000 m ) 10,135 Underground penetration 62 (Utilization of rainwater) (1,000 m3) ronmental assessments. Environmental 15 (1,000 m3) On-site evaporation (1,000 m3) 2,099 targets are set based on the results, (Utilization of water circulated BOD discharge (tons) 245 787 priority activities are decided, and the on premises) (1,000 m3) COD discharge (tons) 125 results of activities are verified. Nitrogen discharge (tons) 44 Phosphorous discharge (tons) 3 As a company operating highly Electronics diverse businesses, Toppan impacts the

environment in a variety of ways. To Main raw materials Waste track these impacts accurately, the Paper, plastic film (1,000 tons) 1,645 Waste discharge (tons) 464,038 company compiles and analyzes data Ink (1,000 tons) 32 Recycling (tons) 449,304 Solvents (1,000 tons) 18 Final landfill waste (tons) 14,734 separately in its three core businesses of Information & Networks, Living Notes: *The input and output data cover the Toppan Group (see P. 78). Besides the three core businesses, data from Environment, and Electronics. non-manufacturing sites are also included in Toppan’s total. *Main raw materials values from overseas subsidiaries and independent subsidiaries are partially excluded.

Information & Networks Information & Networks INPUT Offset Printing Process Energy The text and images to be printed are Operations in the Information & Networks edited on a computer through digital Total energy consumption (1,000 GJ) 6,699 are based on information technology and Editing processing. A mockup is printed out by Water a proof-use printer and reviewed (proof- include commercial printing, publications Water consumption (1,000 m3) 2,237 read) before the print data are sent on printing, and the securities and card busi- to the plate-making process.

nesses. The main business activity is offset A printing plate is created from the print printing, and the main equipment used data. Text from the print data is com- OUTPUT Plate- bined with digital images in a prescribed for this operation is the offset rotary press. making layout and output (printed and devel- Atmosphere On the input side, the large-scale oped) on four separate plates, one for CO2 emission (t-CO2) 315,782 each basic color. consumption of paper indirectly impacts Emission of substances destructive to 3 the environment by depleting resources the ozone layer (ODP-t) Four colored plates (yellow, magenta, NOx emission (tons) 102 through the felling of forests. In the book- cyan, and black) are placed in the offset SOx emission (tons) 1 Printing printing machine and the inks are printed binding operations after printing, waste onto the paper and dried. A large vol- Emission of dioxins (g-TEQ) 0.009 ume of materials can be printed. paper is generated as an output when Water system and soil the paper is cut to form books. Total water discharge (1,000 m3) 1,673 In terms of energy, power motors and Underground penetration (1,000 m3) 12 The printed material is bound by the On-site evaporation (1,000 m3) 522 bookbinding process, cut, or treated ink drying machines consume large Finishing by a surface-processing treatment, etc. BOD discharge (tons) 130 according to specifications. amounts of electricity and gas as inputs COD discharge (tons) 21 and discharge gas emissions as an output. Nitrogen discharge (tons) 8 Phosphorous discharge (tons) 1 Printed and processed products such as Waste magazines, books, catalogs, pamphlets, Total waste discharge (tons) 224,643 Delivery flyers, securities, and gift certificates are to the delivered to the customer. Recycling (tons) 222,229 customer Final landfill waste (tons) 2,413

48 Environmental Report

Toppan’s Environmental Vision

Living Environment Living Environment INPUT Gravure Printing Process Energy The text and images to be printed are Operations in the Living Environment field edited on a computer through digital Total energy consumption (1,000 GJ) 5,181 include packaging and the manufacture Editing processing. A mockup is printed out by Water a proof-use printer and reviewed (proof- of materials for industrial use. The busi- Water consumption (1,000 m3) 2,064 read) before the print data are sent on ness itself is focused on the development to the plate-making process. of products that can contribute to more A printing plate is created from the print comfortable lifestyles. A major area of data by corrosion or engraving. Text OUTPUT Plate- from the print data is combined with operations in this field is gravure printing, making digital images in a prescribed layout and Atmosphere a process mainly involving the coating of output (printed and developed) on sepa- CO2 emission (t-CO2) 262,015 rate plates, one for each color. printing plates with copper and chrome Emission of substances destructive to 2 plating. While the water discharge from the ozone layer (ODP-t) Once the color plates are placed in the the plating process can be easily rendered NOx emission (tons) 86 printing machine, inks of four different SOx emission (tons) 49 Printing colors are layered on top of one another, harmless, the liquid discharge from the printed onto films or paper, and dried. A Emission of dioxins (g-TEQ) 0.004 large volume of materials can be printed. maintenance equipment and the sludge Water system and soil produced after the wastewater treatment Total water discharge (1,000 m3) 1,530 Underground penetration (1,000 m3) 44 The printed films or papers are either com- both burden the environment. In the bined with other films and processed, or 3 printing that follows, the ink is diluted by On-site evaporation (1,000 m ) 395 treated by surface-processing treatment to BOD discharge (tons) 20 Finishing add strength and required properties. In organic solvents, printed on paper, and the final stage, the printed matter is cut, COD discharge (tons) 20 stamped, and processed as required to dried by vaporation using hot air. The Nitrogen discharge (tons) 10 meet the specifications of the end product. heat energy needed for the drying is an Phosphorous discharge (tons) 1 The printed and processed products Waste input; the gas emissions from drying are include films and paper for various types Total waste discharge (tons) 174,075 Delivery of packaging products, containers, wall- an output. to the Recycling (tons) 169,073 customer papers, and cosmetic sheet metal used as building materials. Paper and plastic are also consumed Final landfill waste (tons) 5,002 and discharged during these operations.

Electronics Electronics INPUT Color Filter Production Energy A black matrix made of a low-reflection In the Electronics field, Toppan supports Formation chrome or resin is formed on a glass Total energy consumption (1,000 GJ) 5,819 of the substrate (the black matrix improves the the IT industry by producing parts for black matrix Water display contrast, making it easier to read). semiconductors and displays. The com- Water consumption (1,000 m3) 10,062 pany designs and manufactures a host Color resist is applied to the substrate. of electronic components and devices, Resist deposition including photomasks used in the manu- OUTPUT The color resist is dried. facture of semiconductors, LSI (large- Low-pressure Atmosphere scale integrated circuit) package-related drying CO2 emission (t-CO2) 245,185 products, color filters for liquid crystal Emission of substances destructive to 0 A part of the pattern is exposed and displays, and printed wiring boards for the ozone layer (ODP-t) Exposure insolubilized. various electronic units. Production facili- NOx emission (tons) 31 SOx emission (tons) 17 ties for these precision products require All film is removed except the exposed Emission of dioxins (g-TEQ) 0.000 Development pattern. extremely clean environments. Among the Water system and soil inputs is the consumption of energy for Total water discharge (1,000 m3) 8,518 The remaining pattern is baked and air-conditioning to maintain the plant Underground penetration (1,000 m3) 5 Baking attached to the substrate. (The five steps On-site evaporation (1,000 m3) 1,128 from resist deposition to baking are humidity and temperature at a fixed level. repeated for each RGB three color). BOD discharge (tons) 86 Among the outputs, the discharge of COD discharge (tons) 80 Formation of Transparent electrodes are formed. chemicals for processing and the waste- Nitrogen discharge (tons) 22 transparent water generated from repeated washings Phosphorous discharge (tons) 1 electrodes account for most of the environmental Waste burden in the Electronics business. Total waste discharge (tons) 62,152 A transparent photo spacer is formed to Recycling (tons) 54,933 Formation of improve the uniformity of the liquid crys- photo spacer tal layer, if necessary. Final landfill waste (tons) 7,219

49 Environmental Targets under the Declaration on the Global Environment Based on its Environmental Action Plan, Toppan specifies a concrete action to realize the goals of its Declaration on the Global Environment. The company has also reviewed and established Medium-term Environmental Targets, Long-term Environmental Targets, and Environmental Targets for the current fiscal year.

Declaration on the Global of the Ecology Center. Environmental Action Plan and Environment In September 2000, areas of the Toppan Environmental Targets Declaration on the Global Environment In 1991, Toppan established the Ecology were revised to reflect reformed manage- Based on its Environmental Action Plan, Center and assigned it the role of over- ment policies. The Environmental Action Toppan specifies concrete policies for all seeing environmental activities. The fol- Plan is reviewed on a regular basis, and of its businesses to achieve the targets lowing April, the company laid out the the Environmental Targets are treated as of the Declaration on the Global Environ- Toppan Declaration on the Global Envi- an index of Toppan’s environmental man- ment. The Environmental Action Plan ronment, a comprehensive environmental agement as the company forges ahead specifies Medium- and Long-term Envi- philosophy appended with explanations with its ongoing reforms. ronmental Targets and Environmental of methods to be used to translate that The Toppan Declaration on the Global Targets for the current fiscal year. The philosophy into action. Since then, the Environment will be completely revised Declaration on the Global Environment declaration has guided the efforts of all whenever social attitudes on the global provides the company with a road map employees of the Group as they work environment undergo a significant change. for expanding its environmental activities together to advance Toppan’s environ- The Company’s environmental activities will and encouraging employees to take an mental activities under the leadership be continuously improved on every front. active role.

I Toppan’s Environmental Action Plan Toppan Declaration on the Global Environment Activities Medium- and Long-term Environmental Targets Employee education & •Enhance employee awareness on environmental issues and promote development corporate-wide activities to preserve the environment 1. Each of our employees recognizes •Participate voluntarily in social activities and actively contribute to Social contributions the importance of global the cause of environmental conservation environmental issues and endeavors •Raise the environmental burden improvement ratio (net sales/ Energy/resource CO emissions) by 20% (over the level in fiscal 2000) to conserve the global environment. conservation 2

Reduction of greenhouse gases 2. We actively promote energy/ resource conservation and recycling •Reduce final landfill waste disposal by 90% by fiscal 2010 (from as means of conserving the global the level in fiscal 2000) Sorting waste & environment. recycling •Realize zero-emissions target in all domestic operational sites by fiscal 2010 through the effective use of industrial waste generated in production Prevention of •Comply with in-house control standards that embody the legal environmental regulations 3. We abide by the law and social order, pollution •Communicate appropriately with stakeholders striving to prevent environmental •Reduce VOC atmospheric emissions by 90% by fiscal 2005 (from the pollution. level in fiscal 2001) (for the 12 sites emitting large amounts of VOC) •Reduce toluene atmospheric emissions by 90% by fiscal 2005 (from the Management of level in fiscal 2001) (for the 12 operational sites emitting large amounts chemicals of toluene) •Realize zero-emission of dichloromethane by the end of fiscal 2005 4. Through our business operations, we actively support our customers’ •Expand proposals on environmentally-friendly printing technologies, activities to conserve the global products, and services environment. Commitment to Eco- creativity Activities •Expand environmental communication activities

5. In our research, we endeavor to develop products and technologies •Participate in and operate the Green Standard Guideline for the Printing that help conserve the global Planning, research, Industry and development of environment. •Develop environmentally-friendly products and disclose environmental environmentally- information friendly products and technologies

6. We implement corporate activities •Comply with local regulations, international conventions, etc. designed to further global Conservation of the conservation in the context of global environment at overseas an international society. operational sites •Establish environment management systems in overseas production plants *Partially applicable to overseas subsidiaries. Not applicable to independent subsidiaries.

50 Environmental Report

Toppan’s Environmental Vision

The company considers one fiscal year Evaluation and Review of Toppan’s Medium- and Long-term Environmental as one cycle for its environmental activi- Progress in Achieving Its Targets Targets and 20 Environmental Targets to ties and reviews its environmental activi- pursue throughout the year. ties within that time frame. Once the Toppan laid out a total of 20 environ- As an added mechanism to realize the Ecology Center collects records on the mental targets for fiscal 2003 and under- sustainable development of its business activities for the year, the Chief Environ- took various programs and activities to through environmental management, mental Manager evaluates the results, attain them. As of the end of the year, 11 Toppan has introduced an Environmental reviews the Medium- and Long- term of the targets were reached and nine Efficiency Index to measure its progress Environmental Targets, and sets up spe- have not yet been achieved. towards this goal from this fiscal year. cific Environmental Targets for the follow- The Environmental Action Plan for fis- Verifications of environmental efficiency ing fiscal year. cal 2004 has been reconsidered based on will be based on yearly changes in results. the level of achievement of the fiscal The environmental burden improvement 2003 targets. Specifically, two medium- index will help Toppan set its environ- and long-term environmental targets mental targets by clarifying the progress were reformulated and one target was of environmental management. newly established, completing a set of 17

Evaluation criteria S: Achievements significantly above target A: Target fully accomplished B: Tackled actively, but did not achieve target C: Insufficient effort Environmental targets for fiscal 2003 Evaluation Environmental targets for fiscal 2004 •Educate 5,000 employees via the e-learning system •Educate some 5,600 employees for basic environmental education B via the e-learning system •Continue funding of forestation activities and participation in forest •Continue funding forestation activities and participation in the forest protection fund A protection fund •Basic unit of sales to energy consumption: Maintain fiscal 2000 levels •Raise the company’s environmental burden improvement ratio *Review Medium- and Long-term Environmental Targets by December B (net sales/CO2 emissions) by 9% over the level in fiscal 2003 2003 (internal amount ➝ sales amount) *Reduce the basic unit of internal production at plants by 5% from the level in fiscal 2003 •CO2 emissions: Maintain fiscal 2000 levels ➝ measures by energy- saving activities and fuel replacement B *Review Medium- and Long-term Environmental Targets by December 2003 (absolute figure ➝ basic unit) •Final landfill waste disposal: 10% reduction from the level in fiscal 2002 •Reduce by 10% (from the level in fiscal 2003) S

•Increase the number of zero-emission sites recognized to 20 •Increase the number of zero-emission sites recognized to 20 B

•Comply with and review in-house control standards in all operational •Comply with and review of in-house control standards in all operational A sites ➝ checked by in-house environmental audit sites •Plants publishing site reports: Expand to 9 A •Plants publishing site reports: Expand to 12 •Atmospheric emissions of VOC: Reduce by 80% (from the level in fiscal — — 2001) •Atmospheric emissions of toluene: Reduce by 40% •Atmospheric emissions of toluene: Reduce by 45% (from the level in (from the level in fiscal 2002) B fiscal 2003)

•Atmospheric emissions of dichloromethane: Reduce by 10% •Atmospheric emissions of dichloromethane: Reduce by 40% (from the S (from the level in fiscal 2002) level in fiscal 2003) •Sales from Environmental Business: Increase to 53.5 billion yen •Sales from Environmental Business: Increase to 57.0 billion yen (10% B (10% over the level in fiscal 2002) over the level in fiscal 2003) •Sales from Environmental Activities: Increase to 115.0 billion yen •Sales from Environmental Activities: Increase to 136.0 billion yen (10% S (10% over the level in fiscal 2002) over the level in fiscal 2003) •Promote environmental communication by participating in Eco-Products •Promote environmental communication by participating in Eco-Products A 2003 2004 •Deploy recycling systems for Cartocan (paper-based beverage •Deploy recycling systems for Cartocan (paper-based beverage A containers) in plants located in Tokyo region containers) in 15 plants in Japan •Relevance ratio to Toppan’s Green Procurement Standard: Increase by •Relevance ratio to Toppan’s Green Procurement Standard: Increase by 5 points (over the ratio in fiscal 2002) B 5 points (over the ratio in fiscal 2003) •Develop an LCA evaluation for environmentally-friendly products in •Improve LCA education and develop the LCA evaluation of three business fields (Information & Networks, Living Environment, B environmentally-friendly products in the Information & Networks, Living Electronics) Environment, and Electronics businesses •Register 3 more environmentally-friendly products (total: 60 products) S •Register 3 more environmentally-friendly products (total: 73 products) •Conduct in-house environmental audits in 3 plants in Asia and 2 plants •Conduct in-house environmental audits in 3 plants in Asia and 2 plants in the U.S. B in the U.S. •Comply with local regulatory standards, prepare monthly reports •Comply with local regulatory standards and prepare monthly reports A on environment-related information on environment-related information •Introduce and operate environmental management systems at •Introduce and operate environmental management systems at 11 overseas production plants A 11 overseas production plants

51 Environmental Achievements in Fiscal 2003 Toppan set a total of 20 Environmental Targets for fiscal 2003 and undertook various programs to attain them. This section describes and evaluates the company’s achievements and activities for this year.

Atmospheric emissions of toluene Major Achievements Major Issues The 38.8% reduction in toluene emissions in fiscal 2003 was below target, but Major achievements in Eco-protection Major Issues in Environmental toluene emissions fell by more than 2,000 Reducing final landfill waste disposal Management tons. Thanks to the promotion of zero-emis- Environmental education via In fiscal 2004, the installation of new sions, the company was able to reduce e-learning gas-emission-processing equipment at final landfill waste disposal by 25.4% Toppan provides environmental educa- four plants is expected to reduce toluene compared to the previous fiscal year. This tion to its employees via an e-learning emissions by about 1,500 tons and meet well exceeded the targeted reduction. system. The company fell slightly short of the targeted 45% reduction from the training a targeted 5,000 employees under level in fiscal 2003. Reducing atmospheric emissions of the program during fiscal 2003 (4,878 dichloromethane employees trained). A follow-through will Major Issues Concerning Dichloromethane is used at printing plants be conducted in fiscal 2004 for the 406 Eco-creativity mainly as a cleanser. Efforts by the com- employees who did not complete the Environmental Business pany to switch to other cleansers led to training. Toppan fell short of its target of a 10% a 23.0% reduction in the atmospheric Some 5,500 have completed the train- increase in sales in Environmental Busi- emissions of dichloromethane in fiscal ing over the past two years, and the com- nesses over the previous fiscal year. Results 2003 compared with the previous fiscal pany plans to educate another 5,600 in were nonetheless favorable: increased year. This well exceeded the targeted fiscal 2004 alone. orders for environmentally-friendly prod- reduction. ucts boosted sales by 7.0%, to 52.0 bil- Major Issues in Eco-protection lion yen. Major achievements in Eco-creativity Energy usage Toppan aims to meet its goal of a 10% Promotion of Environmental Business Toppan adopted widespread energy-effi- year-on-year increase in fiscal 2004 by Sales from environmental activities in fis- ciency measures in an attempt to main- speeding up the development of environ- cal 2003 jumped by 18.1% to 123.5 bil- tain its basic unit of energy usage at the mentally-friendly products. lion yen year on year, well exceeding the fiscal 2000 level. Despite these efforts, targeted increase of 10%. This success the result was a 14.9% increase in fiscal Toppan Green Procurement Standard can be mainly credited to expanded 2003, mainly due to the opening of new These procurement standards are being orders of printed matter made from envi- production plants and renovation of exist- applied to offset printing operations. The ronmentally-friendly raw materials. ing facilities. With the rise in the basic compliance ratio for paper rose by 4.4%

unit of energy usage, emissions of CO2 in fiscal 2003, short of the 5-point Wider lineup of environmentally- also increased by 6.5% compared with increase targeted for the year. As the friendly products the fiscal 2000 level. compliance ratio for ink is already high Toppan introduced 13 new environmen- In fiscal 2004, Toppan will be bolster- (94.2%), the company is aiming to main- tally-friendly products in fiscal 2003, far ing its energy management system in tain this rate. surpassing its target of three. As of March order to improve energy efficiency and Toppan hopes to achieve a 5-point 2004, Toppan had 70 environmentally- ensure conformance with the company’s improvement in the compliance ratio in friendly products on the market. energy-efficiency standards when new fiscal 2004 by pressing ahead with its cur- facilities are introduced. rent activities and promoting environ- I Sales of Environmentally-friendly mentally-friendly printing services. Products Zero-emission sites

(million yen) Operational sites with a recycling rate of Promoting Life Cycle Assessment 60,000 98% or above are candidates for zero- (LCA) 51,968 50,000 48,578 emission certification. Of the 23 candidates The LCA method was used to assess inte- 44,597 for fiscal 2003, 17 satisfied the zero-emis- rior housing materials in the Living Envi- 40,058 40,000 sion criteria in the categories of recycling ronment field and LCD color filters in the maintenance and reformed sorting stan- Electronics field. No assessments have yet 30,000 dards. been completed in the Information & 20,000 In fiscal 2004, the 29 sites that achieved Networks field. recycling rates of 98% or better in fiscal In fiscal 2004, Toppan plans to complete 10,000 2003 will be subjected to internal envi- an LCA in the Information & Networks

0 ronmental audits as part of the certifica- field and expand the number of products 2000 2001 2002 2003 (fiscal year) tion review. covered in all of its assessments.

52 Environmental Report

Toppan’s Environmental Vision Environmental Accounting Toppan introduced environmental accounting in fiscal 1998 as a tool for effective decision-making in environmental management. The company began to include overseas subsidiaries in its environmental accounting from fiscal 2001 in order to expand the scope of the accounting and disclose more detailed information to stakeholders.

and-drying processes in the Living Envi- business was as high as 544 million yen Results for Fiscal 2003 ronment field. (+7.3%) in fiscal 2003, thanks chiefly to The increase in environment conserva- increased sales of environmentally-friendly Environmental conservation cost tion expenses in fiscal 2003 mainly stems products. Compared to the previous fiscal year, the from the introduction of environmental The environmental conservation effects aggregated results for fiscal 2003 show conservation equipment over the past for the year were dramatic. Emissions of an investment increase of 2,769 million several years. At the same time, compre- dioxins were reduced by 94% from fiscal yen and an expense increase of 570 mil- hensive measures to separate waste gen- 2003, down to 0.19 g-TEQ, through the lion yen. erated from production processes have remodeling and shutdown of Toppan A major part of the increased invest- dramatically cut the expenses associated Group incinerators. Emissions of NOx and ment was used to fund the introduction with waste processing and boosted the SOx were reduced by 45 tons and 15 of wastewater processing equipment at recycling ratio. tons, respectively. Toppan’s efforts to newly completed production plants in the reduce the emissions of these substances Electronics field. Toppan also outlaid new Economic benefit and environmental will continue in the future. investments to install processing equip- conservation effect ment for gas emissions from the printing- The economic benefit of environmental

I Toppan Group’s Environmental Accounting for Fiscal 2003 Environmental Conservation Cost (unit: millions of yen) Change (current term– Current term previous term) Item Description of major contents Investment Expenses Investment Expenses

(1) Total internal cost 5,113 9,609 2,638 777 1. Pollution prevention cost Cost for pollution prevention, such as atmospheric pollution 3,629 4,018 1,931 774 prevention 2. Global environmental Cost for global environmental conservation, such as global 708 624 493 88 conservation cost warming prevention 3. Waste treatment and Cost for adequate treatment and recycling of waste materials 775 4,967 213 86 recycling cost (2) Upstream/downstream cost Cost for green procurement, containers/packages recycling, etc. — 453 — 20

(3) Administration cost Cost for obtaining certification for environmental management 229 875 156 52 systems, maintenance, tree-planting at sites, etc. (4) R&D cost Cost for research and development of environmentally-friendly 132 767 24 119 products, etc. (5) Social activity cost Cost for donations, support, etc. for environmental conservation — 9 — 1 organizations, etc. (6) Environmental damage Cost for restoring damage such as soil pollution, and others — 0 — 54 remediation cost Total 5,474 11,712 2,769 570

Total investment for the period covered 85,108 1,796

Economic Benefit (unit: millions of yen) Environmental Conservation Effect Description of Current Change Environmental Item (current term– Item Description of major contents Reduction burden for major contents term previous term) fiscal 2003 (1) Energy-saving Reduced amount related 26 80 Energy Total energy consumption (1,000 GJ) 975 18,423 to energy-saving Water Water consumption (1,000 m3) 571 14,698 (2) Sales of Sales amount of the 1,782 269 Atmosphere CO2 emission (1,000 t-CO2) 35 853 commodities waste from plants Emission of substances destructive to 0.55 4.63 (3) Environmental Profit amount related to 7,991 544 the ozone layer (ODP-t) business sales of environmentally- friendly products NOx emission (tons) 45 224 (4) Subsidies Subsidies related to 4 4 SOx emission (tons) 15 67 environmental Emission of dioxins (g-TEQ) 0.19 0.013 countermeasures Water system Total water discharge (1,000 m3) 708 12,011 Notes : *Entities covered: Toppan Group (see P. 78) and soil Underground penetration (water) 10 62 *Period covered: April 2003 to March 2004 (January 2003 to December 2003 for 3 overseas subsidiaries) (1,000 m ) *Total values may not match, as decimals were rounded up or down. On-site evaporation (water) (1,000 m3) 325 2,099 *The “ ” symbol denoting a negative value indicates an increase from the previous year. Discharge of water-polluting 71 417 substances (tons) Waste Total generation (1,000 tons) 56 464

53 Environmental Report Environmental Management Activities

Toppan has created an environmental management system to enhance the efficiency of its environmental activities and promote the use of the PDCA cycle as an underpinning to environmental action. This section gives a detailed overview of Toppan’s environmental management system.

Summary of the Environmental Management System Plan Environmental targets for Toppan’s environmental management plants relies on the operation of an established management system that cov- Action Do Review by plant Environmental ers the sales, sales promotion, and management activities R&D departments in addition to the actual production plants. At one level, Plant executives conduct ongoing environ- Check mental management reviews to ensure Environmental that the PDCA cycle, a core part of auditing this system, continues to improve the efficiency of environmental measures. Plan Plan Meanwhile, data on the actual results Environmental Environmental targets for targets for of environmental measures are col- department department lected by the Ecology Center in the head office, evaluated and verified by Action Action Review by Do Review by Do the Chief Environmental Manager, department Environmental department Environmental and reported to top management. management activities management activities After further reviews, the improve- Sales and Sales R&D Department Promotion ments to the system are promoted Departments throughout the entire company. Check Check Environmental Environmental auditing auditing

I Overview of Environmental Management Eco-protection Activities Production plants/Research centers Legal Environmental requirements National policy Eco-protection Environmental Eco-protection Promotion Eco-protection Eco-protection Environmental Environmental Activity Plan activities Committee Achievement Meeting aspects objectives Report Chaired by Environmental Toppan Environmental Environmental Progress review the Chief impact targets management Declaration on Achievement Environmental review by top Manager the Global evaluation/review management Environment Review (semiannually) Eco-creativity Activities Sales/SP and R&D departments LCA (As required) Development R&D of environmentally- Development system for evaluation National targets friendly products environmentally-friendly products Meeting on Revision of Medium- Green Progress review and Long-term Subject of Review Eco-creativity Medium- and purchasing research Achievement evaluation/review Data Environmental Long-term collection Chaired by Environmental Targets the Chief Promotion system for Environmental Targets Targeted Sales activities for Eco-creativity Activities Manager sales Environmental Business Sales management (semiannually) Communication Activities Environmental All departments Revision of Environmental Consciousness Information Internal communication activities Environmental Targets sharing survey National Communication External communication activities Eco-protection Targets Cohabitation targets Activities with local communities Data Meeting with local Social contribution activities Environmental collection community PR National Eco-creativity Meeting (semiannually)

54 Environmental Report

Environmental Management Activities Environmental Management Structure and Promotion System Toppan is building up an ISO 14001-based environmental management system as a framework for its Eco-protection and Eco-creativity Activities. The company also started the Toppan Group Environmental Meeting in fiscal 2003 to reinforce the environmental management structure of the Toppan Group.

The internal Eco-protection Promotion Environmental Management Systems to Promote System and internal Eco-creativity Pro- Structure Environmental Activities motion System have been established to Features of Toppan’s environmental move the Eco-protection and Eco-creativ- Many of Toppan’s Eco-protection Activities management ity Activities at Toppan efficiently forward. are launched independently at the plant In every Toppan production plant, R&D These systems are advancing various envi- level. Toppan plants convene their own department, sales department, and sales ronmental activities under the direction of Eco-protection Promotion Committees, promotion department inside and outside the Ecology Center. each with its own subcommittees to of Japan, the company has set up an envi- address specific issues. The company’s ronmental management system under the Reinforcing the comprehensive strong focus on energy-saving activities control and leadership of the President strength of the Group has led to a considerable strengthening & CEO and the Chief Environmental Toppan reviewed its environmental man- and review of the Energy Subcommittees Manager. The Ecology Center, a part of agement structure as a corporate group since the beginning of fiscal 2003. the Corporate Manufacturing, Technology and organized the Toppan Group Environ- With regard to Toppan’s Eco-creativity & Research Division at the head office, is mental Meeting in June 2003 under the Activities, each division has established directly responsible for operating the sys- auspices of the Meeting with Heads an Eco-creativity Promotion System to tem. The center works to instill the envi- of Affiliated Companies. The executives develop environmentally-friendly products ronmental policies and environmental heading Toppan’s affiliated companies and environmental support businesses. targets among the employees of the vari- gather semiannually at this meeting to ous divisions and production plants, as discuss their shared environmental issues well as to convey environmental informa- and develop measures to harness their tion from the divisions and production comprehensive strengths. plants back to top management.

I Environmental Management Structure

Naoki Adachi President & CEO

Meetings with Heads of Affiliated Companies

Toppan Group Environmental Meeting Corporate auditor Toppan Group Eco Products Meeting Hideaki Kawai Chief Environmental Manager Directors at head office and Senior Managing Director

Corporate Manufacturing Technology & Research Division Related departments Ecology Center at head office

Domestic and overseas Sales and sales R&D departments production plants promotion departments

IFrequency: Biannually IFrequency: Biannually National Eco-protection MeetingIMajor Objectives: Reporting and discussing National Eco-creativity Meeting IMajor objectives: Reporting and achievements of environmental activities discussing achievements of environmental activities I Tokyo Eco-protection IFrequency: Whenever necessary Tokyo Eco-creativity Frequency: Biannually I I Meeting Function: Advisory meeting on Meeting Function: Advisory meeting on company-wide environmental measures company-wide environmental measures Environmental ISO IFrequency: Annually Secretariat Meeting IFunction: Strategy meeting on management of ISO 14001 IFunction: Promotion of Eco-creativity Promotion System Eco-protection IFrequency: Monthly in principle Eco-creativity of divisions I Promotion Committee Function: Operational administration of environmental management system Environmentally-friendly Product IFunction: Planning, development IFrequency: Monthly in principle Development System at each division and evaluation, registration, Energy Subcommittee IFunction: Streamlining of energy use qualification of environmentally- friendly products IEstablished at each site, depending on IFunction: Execution of LCA of Other Subcommitteessite-specific environmental features LCA Working Group products (type, scale, etc.) Note: Excluding overseas subsidiaries and independent subsidiaries.

55 Environmental Management System Toppan’s environmental management system proposes environmental activities at each production plant. In addition, Toppan promotes comprehensive in-house environmental auditing covering all operational sites of the company. In fiscal 2003, six domestic and two overseas production plants were awarded ISO 14001 certification.

Toppan’s Environmental In-house Environmental improvement measures on 121 items at Management System Audit System 11 operational sites through an in-house environmental audit review. Toppan’s environmental management sys- Toppan’s in-house environmental audit Local hearings and inspections are car- tem is uniquely structured. At every oper- system follows a two-stage screening ried out every other year at overseas pro- ational site, the company’s PDCA Cycle process: a document audit and an on-site duction plants in the Americas and Asia. concept is put into practice irrespective of audit. The in-house environmental audit In fiscal 2003, local environmental audit- ISO 14001 certification. Forty-eight pro- team consists of provisional auditors of ing was carried out at three production duction plants and two research centers the Environmental Management System plants in Asia. The company examined in Japan are pressing ahead with their and internal environmental auditors. This the status of environmental management environmental activities to achieve the tar- team begins by inspecting and evaluating and operations with respect to: 1) the gets set under the Eco-protection Activities the structural status of systems, the com- understanding, operation, and confirma- Plan. pliance with environment-related rules tion of compliance with local environ- Once each year, management confirms and regulations, and the compliance with ment-related laws and regulations; 2) the and reviews the company’s environmen- in-house standards at all the operational environmental impact on atmosphere tal activities to ensure their continual sites audited. Next, the team compiles the and water; and 3) the daily control of improvement. The basic data collected in In-house Environmental Audit Reports, a waste materials. The inspection identified the review help Toppan formulate its Envi- report specifying any necessary improve- 23 items requiring further improvement. ronmental Policy, Environmental Objec- ments pointed out during the audit, and To improve the operational conditions, tives, and Targets for the following year. submits it to the director in charge. The in- the overseas plants have used the same house environmental audits are reviewed procedures employed under the Improve- Status for obtaining ISO 14001 within the same fiscal year in order to ment Plan for domestic plants. certification raise the level of compliance for the fol- The 22 operational sites awarded ISO lowing fiscal year. 14001 certification by the end of fiscal In fiscal 2003, the in-house environ- 2003 included nine sites in the Infor- mental audit team audited 50 operational mation & Networks business, nine sites in sites in Japan and compiled a list of 390 the Living Environment business, and four areas in need of improvement. To correct sites in the Electronics business. With the these deficiencies, each operational site new ISO certifications in fiscal 2003, the is now following an Improvement Plan number of Toppan employees (including that lists the required improvements

subsidiaries engaged in production activ- and schedules deadlines for completion. In-house environmental audit inspection ity) working under ISO 14001 certification Toppan has confirmed the progress of reached about 15,000. Among the Toppan Group companies, I Review of the In-house Environmental Audit Toppan Forms Co., Ltd. has obtained two To ensure compliance with about 200 items for in-house environmental In-house Environmental certifications, one at its Fussa plant and auditing specified by the head office, a summary of activities conducted Audit Report throughout the year is submitted to the head office in June of the one at its R&D Center. Outside of Japan, following fiscal year, in principle. Toppan Chunghwa Electronics Co., Ltd., A review of the in-house environmental audit report is conducted prior to Document audit the implementation of an on-site audit to clarify environmental aspects at and Toppan Printing Co., (Shenzhen) Ltd. each site. obtained the certification in fiscal 2003. (1) Hearings with executives and staff in charge of environmental matters This brings the tally up to five certified at the operational site, based on the Manual on Hearings for the In- production plants overseas. house Environmental Audit. On-site audit (2) Four-point evaluation (0, 1, 2 and 3) on applicable items, based on Evaluation Standards for the In-house Environmental Audit. (3) Verification of the state of environmental management via an inspection within and around the operational site, based on the Manual on Inspections for the In-house Environmental Audit.

Summary and evaluation Summary of issues in need of improvement, along with an evaluation results of the in-house score and general comments. Returned to the operational site for environmental audit feedback.

Description of a specific improvement plan in response to issues in need of Improvement Plan for improvement, as pointed out by the audit. Submitted to the head office Specified Issues upon confirmation by executives at the operational site.

Delivered to the Auditor and the Chief Environmental Manager. In-house environmental audit hearing In-house Environmental Audit Reports

Conducted to assess progress and give appropriate guidance on issues Review of In-house found in the audit to be in need of improvement. Environmental Audit 56 Environmental Report

Environmental Management Activities Environmental Education, Environmental Compliance, and Emergency Response Toppan provides a comprehensive curriculum on environmental education to maintain and improve the scope and quality of its environmental activities. The curriculum focuses closely on environment compliance, i.e., compliance with all laws and regulations related to the environment. The company also provides emergency training and carries out drills to ensure that its workforce can cope with accidents that threaten the environment.

program by constantly reviewing its envi- Response to Stakeholder Environmental Education ronmental education system. Requests

To maintain and improve the quality and Approach to Environmental The communities around Toppan’s plants scope of its environmental activities, Compliance filed a total of 40 complaints and inquiries Toppan believes that its employees need in fiscal 2003, inconveniencing many to reach a new level of awareness. For Compliance with environment- stakeholders. The complaints dealt mainly this purpose, the company provides a related laws and regulations with noise and odors, two forms of urban systematic range of educational opportu- Toppan’s production plants comply with pollution. While most of the problems nities to raise the environmental con- all environmental laws, regulations and were promptly solved, several require fur- sciousness of its entire workforce, from agreements set by national and local gov- ther efforts. Toppan will continue to new recruits to top managers. ernments. The plants also comply with make capital investments in efforts to Toppan provides its recruits with various Toppan’s anti-pollution guidelines, which improve facilities and deepen communi- environmental education opportunities are usually stricter than those set by gov- cation with local residents. to enlighten them on the relationships ernment. between the printing industry and envi- The compliance status at domestic ronment. Regular employees and newly operational sites is reported to the head Emergency Response appointed supervisors can also learn office in Eco-protection Achievement about specialized environmental issues by Reports every April. Overseas operation Chemical solvents are handled and used taking elective training programs or the sites, meanwhile, submit Monthly Overseas on a daily basis at each operational site. supervisor’s training course. At the site Operational Site Reports, and compliance Some types of accidents that occur dur- level, employees receive environmental at both domestic and overseas sites is ing handling and use pose the risk of soil training focused on the environmental confirmed by in-house environmental and water pollution, particularly those burden of the specific production activi- audits. that occur when the solvent is being ties in which they engage. This training In a fiscal 2003 review of compliance transferred from tank trucks to tanks. also encompasses countermeasures to status, all of Toppan’s Japanese produc- Toppan is now installing pollution-pre- deal with environmental burden under- tion plants were found to be fully compli- ventive devices and preparing oil fences, taken by the company to heighten ant with the standards on atmospheric sandbags, and other measures to prevent the environmental consciousness of the emissions. the outflow of solvents in the event of Toppan workforce. Each educational pro- The biological oxygen demand (BOD) leaks or similar accidents at sites suscepti- gram is reviewed on a regular basis. In fis- of wastewater from two sites exceeded ble to environment impact. cal 2004, the elective education program the legal limit, but corrective measures Periodic drills are carried out to prepare will be opening a course to improve the quickly brought these levels back within the workforce for emergency action. The skills of internal ISO 14001 auditors. the standard. procedural manuals are also regularly The environmental standards for soil evaluated and updated to ensure that they e-learning were exceeded in two cases in fiscal remain effective for actual emergencies. Mindful of the importance of enhancing 2001, one case in fiscal 2002, and one education across the entire company, case in fiscal 2003. Toppan is now deal- Toppan introduced an e-learning system ing with the problem by soil remediation supported by web-based training in fiscal (excavation and backfilling), and further 2002. This system offers educational remediation and surveys will be con- opportunities for all employees without ducted in fiscal 2004. any constraints on time or place, and Toppan received administrative notifi- the network platform supports two-way cations for exceeding the noise standards communications for Q&A and other forms twice in fiscal 2002. Both cases were of dialog-based learning. Thanks to this caused by malfunctions in outdoor facili- Leakage monitoring well at base of solvent tank system, employees can learn environmen- ties. Toppan immediately installed noise- tal issues effectively within a short time. insulation materials and reported the Some 5,500 employees have been improved status to the relevant local gov- educated through the e-learning system ernments. No administrative notifications in the past two years, and the company were issued for noise in fiscal 2003. plans to educate another 5,600 by the No lawsuits, penalties, or civil fines same method in fiscal 2004. were filed or imposed in fiscal 2003. Toppan will continue to review and strengthen its environmental education

57 Environmental Report Eco-protection Activities

The efforts at Toppan to reduce the environmental burden of business activities are called Eco-protection Activities. At every logistics department, every plant, and every office, the people of Toppan aspire to conserve the global environment and foster a recycling-oriented society.

Overview of Eco-protection Activities Green Purchasing of office supplies Green Procurement of raw materials

IProduction plants To reduce the environmental burden generated by production activities, every Toppan production plant has Improvement of environmental performance

set up its own Eco-protection Promo- Energy-savingResource- Waste Pollution Management tion Committee in conformity with saving management prevention of chemical substances the company’s Eco-protection Com- mittee Operational Policies to reduce the environmental burden at the site level. Every office at Toppan conducts Green Purchasing and active Office Eco-protection measures focused on recycling and energy-saving. Many IOffices ILogistics department office sites have also introduced systems to effectively use rainwater. Toppan Logistics Co., Ltd., the logis-

tics specialist in the Group, promotes Recycling, Protective Improvement of Measures Measures eco-driving by encouraging the intro- energy-saving, measures for distribution adopted in adopted in etc. offices and systems operations facilities duction of low-emission vehicles and equipment other environmentally-friendly practices in the transportation operations of the Group.

I Activities of the Eco-protection Promotion Committee

National Eco-protection Management Meeting (semiannually)

Data collection and reporting Company-wide Ecology Center environmental targets Reporting Conveying Guidance and Reporting information support Eco-protection Promotion Committee Verification of environmental activities in regular Eco-protection Eco- Specific Promotion Meetings protection targets at Achievement production Items subject to verification Report plants 1. Reporting of activity achievements and measures taken for (annually) Eco-protection issues 2. Information on environmental concerns outside the company Revision of 3. Progress of the Eco-protection Activity Plan (Environmental targets if Management Program) necessary 4. In-house nonconformities and irregularities in environmental conservation 5. Reporting on other environment-related information Analysis of 6. Reporting on the environmental management system Recording of measures 7. Other issues specific to production plants, such as ecological activity status conservation of the premises and/or the surrounding areas

Issues requiring modification

58 Environmental Report

Eco-protection Activities Energy-saving and Prevention of Global Warming

Toppan’s use of energy and emissions of CO2 both increased in fiscal 2003. Fortunately, however, improvements in Toppan’s energy management system during the year are certain to strengthen the company’s ability to implement energy-saving policies and analyze the causes of fluctuations in energy usage. Efforts to advance Toppan’s reform activities and build up the foundations of its management system will continue.

saving Activities. Equipment management environmental results for the year. Midway Energy-saving Activities activities are also being reviewed at each through the year, however, the comple- production plant to ensure compliance tion of plant construction substantially Basic policy on energy-saving activities with the Energy-saving Law. Part of this reduced the environmental burden, and Toppan is constantly striving toward effort includes the Energy-saving Review, in the last six months of fiscal 2003, more effective ways to use energy in an a specialized review to identify and correct Toppan improved its index and cleared effort to reduce greenhouse gas emis- any problems. the fiscal 2000 level. sions, including CO2 (carbon dioxide) Environmental management at Toppan emissions. Toppan has established the fol- is implemented through ISO protocols Approach to reducing greenhouse lowing medium- and long-term environ- and measures to cut costs and render gas emissions mental targets: other improvements through total pro- The Kyoto Mechanisms are a set of three IBy fiscal 2010, Toppan seeks to increase ductivity maintenance (TPM). In the same mechanisms designed to help countries its environmental burden improvement way, Toppan’s energy-saving activities meet their greenhouse gas reduction tar-

index (sales/CO2 emissions) by 20% rel- will be implemented through the appli- gets under the Kyoto Protocol: joint ative to the level in fiscal 2000. cation of the PDCA cycle by the Energy implementation, clean development, and This targeted reduction is tied to Japan’s Subcommittee for continual reform. emissions trading. target for reduced CO2 emissions under Toppan embarked on the use of the the Kyoto Protocol. The company also set Fiscal 2003 achievements Kyoto Mechanisms by participating in a targets for each fiscal year based on the Toppan set the following targets for energy government trial project on the trading of medium- and long-term targets. To meet consumption and CO2 emissions in fiscal greenhouse gas emissions between fiscal Toppan’s overall targets for the year, 2003: 2003 and 2004. Toppan has studied and every production facility sets individual IBasic unit of sales to energy consumption: exchanged opinions on the project in targets per basic unit of production value Maintain the fiscal 2000 level cooperation with the Ministry of the and per basic unit of production volume. ICO2 emissions: Environment and other participating com- In fiscal 2003, Toppan reviewed its man- Maintain the fiscal 2000 level panies with a view towards eventual agement system for the rationalization of Actual results for the year fell short of implementation. The trading of green- energy use. As first steps to reinforce targets: house gas emissions will allow trading its rationalization efforts, the company IBasic unit of sales to energy consump- between companies that have failed to has overhauled its Energy Management tion: 14.9% increase compared to the meet their targets and companies that Policy, appointed personnel to handle level in fiscal 2000 have reduced their emissions beyond energy management at each production ICO2 emissions: 6.5% increase com- their targets. plant, and scheduled regular meetings pared to the level in fiscal 2000 Judging from the outlook on national of the Energy Subcommittee, a newly Difficult business conditions limited the energy policies, Japan cannot be sure formed committee overseeing the Energy- growth of sales for Toppan in fiscal 2003. of achieving the Kyoto Protocol targets. The company responded by opening new From fiscal 2004, Toppan will introduce plants to provide new products and ser- various measures to reduce greenhouse vices. The inputs consumed and outputs gas emissions. generated in the construction of these plants heavily impacted the company’s

I Energy Consumption I CO2 Emissions (1,000 GJ) (1,000 t-CO ) 18,000 800 2

16,000 700 683 14,607 15,090 652 669 13,921 14,152 641 Energy-saving inspection at site 14,000 600 12,000 500 10,000 400 8,000 300 6,000 4,000 200 2,000 100

0 0 2000 2001 2002 2003 2000 2001 2002 2003 (fiscal year) (fiscal year)

Note: Excluding certain overseas subsidiaries and independent subsidiaries. For calculating energy consumption and CO2 Energy-saving review emissions, the company referred to the Ministry of the Environment’s Guidelines for Greenhouse Gas Emissions Calculations from Businesses.

59 Managing Waste Through its skillful management of waste materials, Toppan has reduced its final landfill waste disposal amount by 25.4% compared to the previous fiscal year and increased the number of zero-emission sites to 17. Toppan will continue to actively promote the reuse of waste as a recycled resource.

Development of Zero-emissions Reuse of Waste as Recycled Waste Reduction Activity Target Resources

Waste paper, a waste product derived In a move to standardize its approach to Two important tasks in the work towards primarily from Toppan’s Information & waste reduction, Toppan launched activi- zero-emission efforts are to use wastes Networks and Living Environment fields, ties to achieve zero-emission targets at a more effectively in-house and to develop comprises 66.1% of the total waste dis- number of plants selected as “zero-emis- recycling through external communica- charged from Toppan’s operational sites. sion models” in 1999. Based on the results tion. Toppan is committed to reusing the Waste acids (such as waste etchant achieved at these model plants, Toppan waste from each process throughout the from plants in the Electronics field) and began certifying “zero-emission plants” company. waste plastics (from plants in the Living in November 2001. In fiscal 2003, Toppan reused 7,086 Environment field) also make up substan- Toppan encountered obstacles in achiev- tons of waste solvent and harnessed the tial portions of the total waste discharge. ing its zero-emission targets when exter- heat from the incineration of 13,660 tons As an incentive for improved waste nal factors beyond the company’s control of waste collected in-house. The com- management performance, the company began dictating the regeneration-and- pany consigns the recycling of acids to has set a target to reduce its final landfill reuse rate (recycling rate). As a solution, third parties and distributes the recycled disposal (direct landfill disposal amount + Toppan reviewed its certification criteria acid to suppliers. In fiscal 2003, 7,775 landfill disposal amount of residues from and redefined zero-emission plants as tons of acid was recycled and put back intermediate treatment) by 90% in fiscal plants with a regeneration-and-reuse rate into circulation. 2010, relative to the level in fiscal 2000. of 98% or more. The Ecology Center in In fiscal 2003, company-wide efforts to the head office certified 17 sites on the thoroughly sort and recycle wastes led to basis of these new criteria at the Toppan a 25.4% reduction in final landfill dis- National Eco-protection Meeting held in posal relative to the fiscal 2002 level. This November 2003. far surpassed the 10% reduction targeted for the year.

I Waste Disposal Flow

Sorting and Total waste generation intermediate processing

Heat Recycled (97.1%) Sorted waste collection areas at Toppan recovery Electronics Fuji Co., Ltd. Incinerated on site Heat Regeneration release (78.5%) I Total Waste Discharge and Final Landfill Waste/Recycling Rate Cinders Total waste discharge Final landfill waste Wastepaper, plastics, etc. Heat Recycling rate (recycling amount/ recovery total waste discharge) Total amount of and others (1,000 tons) (%) 97.1 waste discharge (18.6%) 500 92.9 95.1 96.0 100 Others 0.3% Waste acid, waste alkali, 400 80 Glass chips 0.3% metal chips, etc. 355.0 337.2 344.7 350.1 Wooden chips 0.6% Cinders 0.8% 300 60 Heat release Metal chips 1.4% Waste alkali 2.3% 200 40 Cinders, sludge, etc. Sludge 2.7% Waste oil 5.7% 100 20 Waste acid 6.4% Landfill (2.9%) 24.0 16.8 14.0 10.5 Waste plastic 13.4% 0 0 2000 2001 2002 2003 Wastepaper 66.1% Waste plastics, (fiscal year) metal chips, etc. (% by weight ratio) Note: Past data have been adjusted based on a revision of the scope of coverage.

60 Environmental Report

Eco-protection Activities Pollution Prevention and Chemical Substance Management Toppan is working to reduce its burden on the environment and prevent pollution by complying with legal regulations and establishing more stringent control standards of its own. Based on the PRTR Law, Toppan is actively promoting the management of chemical substances.

Preventing water pollution Achievements in fiscal 2003 Pollution Prevention Activities Toppan reduces water pollution at its The atmospheric emissions of 11 of the 21 plants by installing wastewater treatment specified chemical substances monitored Toppan is now developing activities to facilities designed to ameliorate the envi- by the company in fiscal 2003 declined prevent pollution and minimize the environmental burden imposed by specific from their levels the year before. Emissions ronmental burden of its production activi- production processes. of toluene and dichloromethane, two ties. Through these efforts, the company In December 2003, the company intro- substances subject to environmental tar- will acquire an accurate picture of the duced a fully closed wastewater treatment gets, plunged by 38% and 23%, respec- actual state of the various environmental system at a plant newly commissioned to tively. Emissions of seven of the substances burdens at each operational site. The fabricate color filters in Mie Prefecture discharged into waterways were reduced. company is working actively to reduce its (Seki Town, Suzuka County). The system Three of them were almost completely burden on the environment and prevent recycles 2,500 m3 of wastewater per day, eliminated. pollution by complying with in-house reducing the overall amount of waste- Toppan will continue its planning for control standards (established by the Eco- water discharged and ensuring the effi- ongoing reductions in the use and emis- protection Promotion Committee for each cient use of water resources. The Mie sion of the chemical substances specified operational site) even more stringent than plant also operates monitoring devices by the PRTR. the legal regulations. 24-hours a day to ensure that BOD (biological oxygen demand) and COD (chemi- Preventing atmospheric pollution and cal oxygen demand) levels never rise protecting the ozone layer above the acceptable ceilings established To prevent atmospheric pollution, Toppan by the company and the local municipal- controls smoke-producing facilities such ity. The daily pollution levels of COD, as boilers and incinerators by switching nitrogen, and phosphorous are reported fuels and managing operations under to Seki Town once a month. appropriate combustion conditions. At I Toluene Emission into the same time, the company has intro- the atmosphere (tons) duced waste gas processing equipment 8,000 for the thorough control of atmospheric 6,676 pollution prevention. Substantial progress has been achieved 6,000 5,349 5,763 in ozone protection. In March 1994, Toppan abolished the use of specific 4,000 3,296 CFCs (chlorofluorocarbons) and 1,1,1- trichloroethane, two ozone-depleting sub- Wastewater recycling facilities at Mie plant 2,000 stances mainly used in cleaning processes. Toppan regularly updates and replaces Preventing soil pollution 0 the remaining refrigerating machines that Toppan’s principal safety concern in man- 2000 2001 2002 2003 2004 2005 still use CFCs throughout the company aging its chemical solution storage tanks (fiscal year) (two units abolished in fiscal 2003, 15 is to prevent the leakage of fluids. Walls Note: Covers operational sites that handle at least 1.0 ton annually. units currently in use). Another solid have been constructed around the storage achievement in ozone-protection for fis- tanks, and workers regularly inspect the I Dichloromethane Emission into cal 2003 was a 28% reduction in the tanks and piping to detect cracks and the atmosphere emissions of HCFCs (hydrochlorofluoro- other flaws before soil pollution can occur. (tons) 60 carbons), a family of CFC-substitutes used 49.9 in cleaning processes. 50 Managing Chemical Substances 40

Toppan has managed its chemical sub- 30 32.3 stances in conformity with the PRTR Law 25.6 since the law went into force in July 20 19.8 2000. Management systematically studies 10 the status of chemical usage and explores the feasibility of introducing alternatives 0 2000 2001 2002 2003 2004 2005 to improve compliance with environmen- (fiscal year)

Waste gas combustion facility at Sendai plant tal targets. Note: Covers all sites with data on handling.

61 Office Eco-protection Activities As the name suggests, the “Office Eco-protection Activities” are the recycling, energy-saving, and resource- saving measures undertaken at Toppan’s offices. Office Eco-protection starts with environmental awareness among office people. Toppan offices have also been practicing Green Procurement since fiscal 2002.

Office Eco-protection Green Purchasing Green Procurement

The amount of scrap paper recycled at If Toppan is to contribute meaningfully to Since April 2002, the Toppan Group has offices increased in fiscal 2003, but the the achievement of a recycling-oriented introduced a Green Procurement system recycling rate actually declined to 56.0%, society, the company believes that as a that conforms to the Green Standard for reverting back to pre-fiscal 2002 levels. purchaser it must place priority on envi- Offset Printing Services established by the This sharp drop was mainly due to a major ronmentally-friendly products. Manage- Japan Federation of Printing Industries. restructuring operation that required the ment established its Basic Policy on Green The compliance rate for paper used by incineration of many tons of documents Purchasing in January 1999 and promptly the company rose from 18.3% in fiscal to protect confidential information. initiated Green Purchasing throughout the 2002 to 22.7% in fiscal 2003, falling corporation. Under the Green Purchasing slightly short of target. Toppan aims for a policy, Toppan continually selects and 5-point increase in fiscal 2004 through purchases products that meet its in-house continued promotion of these activities. Green Purchasing standards, especially in The compliance rate for ink was 94.2% in the designated product categories of fiscal 2003, and the company intends to office paper, copiers and printers, per- maintain this high rate. sonal computers, stationery, office supplies, and toilet paper.

I In-house Green Purchasing Standards and Achievements Paper sorting station in Hiroshima Sales Building Designated Rate achieved Purchase standards products Fiscal 2002 Fiscal 2003 Office Must be made of 70% or more recycled paper, with a white- 98.6% 98.3% paper sheen of 80% or less. Copiers and Must have an automatic sleep or shutdown function after 97.9% 90.8% printers remaining idle for a specified period. I Personal Must have a fully incorporated automatic sleep or shutdown 100.0% 100.0% Waste Paper Recycling Rate computers function after remaining idle for a specified period, with in Office Buildings limited electricity consumption in sleep mode. (%) Toilet paper Must be made of 100% recycled paper, with a white-sheen 100.0% 100.0% 100 of 80% or less. Stationery Must bear an appropriate certification (Eco-Mark, Green Mark, 86.6% 92.6% 80 and office etc.) or classification as an environmentally-friendly product in 69.4 67.0 supplies the manufacturer’s catalog. 61.9 56.0 60 I Toppan’s Green Procurement Standard Paper 40 Level 1 Level 2 Remarks 1. Use of recycled Must be made of Must be made of at Tree-free paper and paper 20 paper 100% recycled paper least 70% recycled made from tree-thinnings paper are included in the calculated percentage of recycled paper 0 2000 2001 2002 2003 2. Consideration of Must be approximately Must be approximately Excluding high quality colored (fiscal year) white-sheen 70% or less 80% or less paper and special paper (up to + 4%) (up to + 4%) I Utilization of Rainwater 3. Consideration of Must be 12 g/m2 or Must be 30 g/m2 or coating less (8 g/m2 max. for less (17 g/m2 max. Honjo GC Building (m3) one side) for one side) 10,000 Toppan Koishikawa 9,391 Building 8,716 Offset printing ink* 8,000 7,701 Level 1 Level 2 Remarks 1. Non-use of Must conform to the NL (Negative List) designated by 6,000 substances harmful the Japan Printing Ink Manufacturers’ Association to human body 4,651 2. Non-use of Must not include chlorinated resin 4,000 3,704 chlorinated resin 3,258 3,223 2,754 3. Consideration of Consideration of PRTR- Must identify the PRTR- PRTR-designated designated substances designated substances used 2,000 substances (MSDS to be prepared) 4. Limitation of VOC The proportion of petroleum Must be aroma-free ink, 0 (Volatile Organic solvent is 15% or less soy ink, or recycled vegetable 2000 2001 2002 2003 Compound) (except for rotary press ink) oil ink (fiscal year) emission *Note: Excluding gold, silver and pearl inks.

62 Environmental Report

Eco-protection Activities Efforts in Logistics Toppan Logistics Co., Ltd. handles the distribution and logistics of the Toppan Group. The main environmental challenge in logistics is to reduce the environmental burden caused by transportation. Among other activities, this Group is actively introducing low-emission vehicles, eco-driving, and management systems.

Issues and Efforts in Improving fuel efficiency Distribution Departments The Toppan Group targets a 20% improvement in fuel efficiency over the fiscal The logistics departments of the Toppan 2001 level. An improvement of 13.3% Group are undertaking and developing was obtained in fiscal 2003. various activities to reduce atmospheric Eco-drive activities remain the focus of pollutants, including CO2, NOx, and PM the Group’s efforts in fiscal 2004. The emitted from company trucks. Group is now building on its success with its own vehicles by promoting lateral eco-

Utilizing the environmental drive activities at 10 cooperating trans- Eco-drive seminar management system port companies. Each of these companies The efforts by Toppan Logistics Co., Ltd. will set its own targets and use its own to reduce atmospheric pollutants and methods for management. From fiscal protect the environment center on the 2005, the program will be adopting stan- operation of its environmental manage- dardized methodologies and gradually ment system. expanded to other transport companies. The Kawaguchi site earned ISO 14001 I Measures for Improving Fuel Efficiency certification in October 2002 and the 1. Hold eco-drive seminars (semiannually) Nishigaoka area is preparing to obtain 2. Hold training sessions (semiannually) this certification in fiscal 2005. The trans- Trainees drive the test course before and after training by a professional driver. Upon Eco-drive road training portation departments obtained the Green completion of the second driving trial, they Management certification from the EcoMo compare data on their driving performance Introducing low-emission vehicles before and after the training to learn how Foundation in October 2004. they improved (Effect Realization Training) Vehicles owned by Toppan Logistics Co., 3. Driving monitoring (daily) Ltd. are being converted to low-emission The actual driving techniques being used are CO2 reduction results determined from tachograph analysis of vehicles (adapted to the standards of The Toppan Group continuously operates idling stops, sudden braking, sudden accel- eight municipalities surrounding Tokyo) eration, etc. its Environmentally Balanced Logistics throughout the company. The introduc- 4. Feedback on problem areas (as needed) Management system in order to further Instructors meet with drivers and coach them tion rate in fiscal 2003 was 100%, includ- on the techniques they need to improve reduce CO2 reduction. ing CNG (compressed natural gas) vehicles. 5. Disclosure of achievements (monthly) As an initial goal for fiscal 2010, the Improvements in fuel efficiency are posted Group targets a 10% reduction of CO2 monthly for individual drivers (Achievement by unit energy consumption compared to Confirmation) 6. Roll-call chart (daily) the fiscal 2002 level. Consumption in fiscal 2003 dropped by 4% year on year. As specific measures to cut CO2 emissions, the Group is reducing the number of vehicles, shortening transport distances, and adopting alternative transport energies.

Consolidated shipments of different Low-emission vehicle types of goods from multiple production plants in a certain area have markedly I Fuel Efficiency reduced the number of vehicles used. The 4.0 (km/R) CNG vehicle mark Group is also shortening transport dis- 3.91 3.9 3.84 tances by running daily transport simula- Waste reduction 3.8 tions to determine the most efficient The main types of waste generated in the 3.7 routes. logistics departments are wastes used in 3.6 the transport of goods and office-related 3.5 scrap paper. The Kawaguchi site has 3.42 3.42 3.50 3.4 achieved 100% recycling of its waste and 3.39 3.3 is making headway towards its goal of 3.2 converting most of its waste into com- 3.1 modities. In fiscal 2003, the amount of 2001 2001 2002 2002 2003 2003 first second first second first second waste converted into commodities rose half half half half half half (fiscal year) by 75.7% over the fiscal 2002 level.

63 Environmental Report Eco-creativity Activities

Toppan’s “Eco-creativity Activities” are an array of environmental businesses that provide environmentally- friendly products, technologies, and services. The product life cycle from production to disposal is classified into 14 steps, each with its own environmentally-friendly features.

Overview of Eco-creativity Activities IDevelopment of environmentally- friendly products •Product assessment The Environmental Business (Eco-busi- •LCA (Life Cycle Assessment) ness) at Toppan is designed to help •Environmental Labeling Type II create a recycling-oriented society through the supply of environmen- IPromotion of environmentally- tally-friendly products, technologies, friendly printing services and services based on environmen- •GPN’s Order Guidelines for Offset tally-friendly business activities con- Printing Services •JFPI’s Green Standard for Offset Support for ducted by the company globally. Each Printing Services environmental division actively promotes this busi- •Environmentally-friendly ink, waterless printing methods activities of customers ness by undertaking what Toppan through the supply of calls Eco-creativity Activities. environmentally- friendly products I Eco-creativity Activities are broadly Support for environmental and services businesses categorized into two different areas. •Organization of environment- The first covers research and develop- related events •ecollable Net ment of environmentally-friendly prod- •Support for the preparation of ucts. Product developers begin by environmental reports preparing Evaluation Standards (guidelines) that take full account of product IEfforts to build up a recycling- oriented society lifecycles. The second area encompasses •Waste paper recycling system environmental support businesses to •Packaging material recycling system support environmental initiatives in collaboration with customers, NPOs, and other organizations.

I Environmentally-friendly Product Management Flow

Division Planning and development of environmentally-friendly products Evaluation Standards (guidelines) Evaluation of environmentally-friendly products Labeling Resource-saving (reduced use of materials) Use of raw materials is reduced, and Application the packing material is incorporated in Application for registration as for the display. Recyclable as cardboard. environmentally-friendly products Registration Pamphlet

Ecology Center Pamphlet Verification of the division’s evaluation Manufacture of the products Registration of environmentally-friendly products Database entry of registration data Approval of the Approval of the Toppan Label for Product sample Toppan Label for Environmentally-friendly Products Environmentally- Environmentally-friendly products (Type-II label) friendly Products

64 Environmental Report

Eco-creativity Activities Development of Environmentally-friendly Products Toppan has established an original set of evaluation standards based on the concepts of the ISO 14021 self-declaration labeling system for planning and development. The products developed on the basis of these standards have been highly praised in the market.

I Toppan’s Basic Thinking on Toppan’s 14 Environmental Claims and Environmental Features Toppan’s 14 Life ISO 14021 Environmentally-friendly Products Environmental Claims Cycle Environmental Toppan’s Standards for its Environmentally- Stage Labeling Type II 14 Environmental Claims for planning friendly Products and development 1. Use of safe materials The company will not use substances banned by industry organizations or substances that may result Toppan plans and develops its environ- in the contamination of any of the materials used in mentally-friendly products in accordance the company’s products with environmental hormones.

rdcinaddistribution and Production Recycling rate 2. Use of recycled Toppan will not produce products from recycled materials with the environmentally-friendly product materials that do or may contain environmental hormones or management flow described on P. 64. substances banned by industry organizations. The design and development proce- Resource 3. Resource-saving The consumption of resources is reduced during reduction the materials production and logistics processes. dures conform with a set of 14 Environ- 4. Reduced energy The consumption of energy and water is reduced mental Claims in the Evaluation Standards consumption in during the production and logistics processes. (guidelines) developed independently by production (newly set from fiscal 2004) Toppan based on ISO 14021 standards. Recovered 5. Use of recovered Products are manufactured with surplus energy or Each division carries out its own evalua- energy energy energy recovered from waste materials. tion, and the Ecology Center performs a Reduced solid 6. Reduced solid waste The generation of solid waste is reduced through waste modifications of the production process, product final inspection to ascertain whether the design, and packaging. (By-products reused in developed products meet all the criteria processes are not included in this category.) for registration as environmentally-friendly Energy-saving 7. Energy-saving Energy consumption is reduced during product operation. products. Only products that pass the Use 8. Reduced release of The products release the lowest possible levels of chemical substances chemical substances. final inspection can be registered as envi- Long-life 9. Long product life Product lifetimes are extended by improving durability ronmentally-friendly products. products and adopting scalable designs. In addition to adding environmental Reusable/ 10. Reusability The products can be reused or refilled for their original Refillable or related purposes. Systems and infrastructures are labels to clarify the features of its environ- provided for collection and reuse. mentally-friendly products, Toppan has Recyclable 11. Recyclability Systems and facilities are provided for product recycling. publicly disclosed its 14 Environmental Recyclable parts are indicated as such. fe use After 12. Suitability for The materials used discharge the lowest possible levels Claims to ensure accountability. Seventy disposal of harmful gas during incineration. Landfill waste is environmentally-friendly products were carefully treated to prevent all forms of soil pollution. registered as of the end of March 2004. Easy 13. Easy separation and Product designs enable easy separation and detachment disassembly disassembly. The parts and materials used support design product recycling. Separability 14. Biodegradability The biodegradable or photodegradable materials contained in the products break down naturally and are assimilated back into the environment.

Recycled Long-life Safe Suitability materials materials for disposal

Recycled vegetable-oil ink Rewritable paper and printer PURE ALL (kitchen cabinets)

Resource-saving Suitability for disposal Resource-saving

Eco Pack Stand (round type) Low-halogen printed wiring board Double-wall barrier cups

65 Evaluation of Environmentally-friendly Products Toppan’s environmentally-friendly products are evaluated quantitatively by life cycle assessment (LCA) in accordance with ISO 14040 standards.

Quantitative evaluation using LIME Toppan’s LCA Activities Toppan is now researching a method to Product Assessment quantitatively evaluate the environmental Quantitative evaluation based on impact of its products using the Japanese Control and evaluation of ISO 14040 version of LIME (Life-cycle Impact assess- environmental impact Every good company takes steps to ment Method based on Endpoint model- Toppan had developed its own method understand the impact of its products on ing) developed under the national LCA to evaluate the environmental burden of the global environment. Toppan does so project. Though LIME is still less familiar its catalogs and POP displays qualitatively quantitatively by performing environmen- than LCA, it makes the environmental using radar charts. tal evaluations utilizing LCA in compli- burden easier to grasp by expressing it as Evaluation ance with ISO 14040. a pecuniary sum (yen). Material Conventional Toppan performed two major LCAs in In fiscal 2003, Toppan used LIME to 1.00 type fiscal 2003. The first was performed to calculate the environmental impacts of 0.80 Theoretical Recycling/ 0.60 maximum calculate the waste processing burden in vinyl chloride sheets and non-vinyl chlo- disposition 0.40 0.20 the life cycles of Ecofoil products, a family ride sheets (Toppan Ecofoil) for housing Manufacturing 0.00 of interior housing materials in the Living interiors. The calculations covered two process Environment field. The second was per- different methods of disposal: landfill formed in the Electronics field to quantify waste disposal and incineration. In both Use Distribution the CO2 emissions throughout the life cases, Ecofoil was confirmed to have a cycles of the color filters used in LCD dis- lighter impact on the environment than plays. No LCAs have yet been completed the conventional vinyl chloride sheets. Efforts by Toppan Group in the Information & Networks field, but The calculations also revealed that the Companies the process is continuing and the com- incineration of the vinyl chloride sheets pany is preparing to expand the assess- has an extremely high impact on the envi- Products based on original standards ments to other products. ronment. Toppan Group companies are also work- Toppan has been conducting LIME for ing to achieve a sustainable society other environmentally-friendly products, through productive activities that con- as well. serve the global environment. Each Group company is committed to the develop- I Comparison of Disposal Methods ment of environmentally-friendly prod- I LCA Standards Sheet Using LIME ucts based on original standards in its

20,000 Disposal (yen/1,000 m) field of operation. Waste product transport 18,494 Establishing purpose Use Product transport Suitability for and scope 16,000 disposal Assembly Material production 12,000 Interpreting Analyzing inventory results 8,000

4,000 2,442 2,610 2,900

Evaluating impact 0 Ecofoil Ecofoil Vinyl Vinyl landfill incineration chloride chloride landfill incineration Easily detachable label from Toppan Label Co., Ltd.

Recycled materials

LCA data and report Toppan Ecofoil (door material) Nursery Woody Chair from Froebel-Kan Co., Ltd.

66 Environmental Report

Eco-creativity Activities Promoting Environmentally-friendly Printing Services Toppan provides its environmentally-friendly printing services to respond to the demands of society. Every process is approached from an environmentally-friendly stance, from the initial design and selection of environmental inks and papers to the latter stages of printing, binding, and processing.

Introducing GPN’s Order Examples of Cutting-edge Toppan’s environmentally-friendly Guidelines for Offset Printing Environmentally-friendly paper Services Printing Services Printing paper is a commodity made from forest resources. Three types of printing Environmentally-friendly from paper Design and plate-making paper in use today help conserve forest to production Toppan’s “Perfect Digital Process” employs resources: recycled paper, tree-free paper, As a member of the Green Purchasing the most sophisticated plate-making and and paper made from tree-thinnings. Network (GPN), Toppan minimizes the printing techniques in the industry. This environmental impact of printing and relatively new technology takes conven- Waterless printing system provides printing services based on the tional DTP (desktop publishing) to the In lieu of water, the waterless printing Guidelines for Ordering Offset Printing next level in terms of saving resources system uses a silicone layer that repels Services. The company applies environ- and labor. ink. This eliminates the need for dampen- mentally-friendly technologies at every ing water containing Toppan’s Advanced Technology step in the process, from the selection of IPA (isopropyl alcohol), IColor Management System (CMS): A com- designated inks and papers to surface puter-based color management technology an organic solvent, and processing, binding, and packaging. for printing the resulting discharge Many local governments and companies IDigital photography technology: A photo- of liquid waste. involved in green purchasing activities graphic technology that requires no film IDDCP (Direct Digital Color Proof): A color have adopted these services. Environmental-friendly bookbinding proof technology that generates far less film at the plate-making stage and finishing processes ICTP (Computer to Plate): A plate technology Fragmentation-resistant hot-melt is an that sends digital data directly to the print- adhesive suitable for use on paper to be ing plate recycled. Besides offering strong cohe- sion, it can be completely removed from Using environmentally-friendly inks printed materials without fragmenting Toppan has developed a soybean oil ink during recycling. Toppan has also devel- that contains virtually no aromatics, a oped Eco-binding and other bookbinding I Green Purchasing Network (GPN) class of organic compound thought to be and manufacturing processes that confer A nationwide network founded in 1996 to harmful to both life and the atmosphere. outstanding recyclability to bound printed promote Green Purchasing. As of July 1, 2004, membership totaled 2,803 organizations, The company has also commercialized a materials by eliminating the use of stitch- including 2,184 companies, 356 administra- recycled vegetable oil ink made from used ing (wire). tive organizations, and 263 private organizations. The network announced its Order soybean oil collected from school cafete- Guidelines for Offset Printing Services (GPN- rias, restaurants and other such sources. GL14) in December 2001.

I Environmental Considerations in Producing this Report Toppan actively applies various envi- I Environmental Considerations in the Toppan CSR Report 2004 ronmentally-friendly technologies and Process Specific measures Environmental consideration methods in the printing of the Toppan Photography Use of digital photography whenever Elimination of filming and CSR Report. The printing of this year’s possible development processes (photographs used in data form) main section on 100% recycled paper Design and Digital processes by DTP Reduction of mid-process materials markedly expanded Toppan’s experi- editing ence in collecting used paper from Plate-making Plate-making by CTP Elimination of films for plate-making the market. The Data Report is made Printing Sheet-fed press waterless printing Reduction of IPA use Elimination of waste fluids exclusively from paper made from Paper Cover: 70% recycled paper, 30% non- Forest resource-saving and 10% tree-thinnings and 90% recycled chlorine bleached pulp paper encouragement of forest nurturing paper collected from the market. The Main section: 100% recycled paper Data Report: Printing paper made 10% use of paper made from tree-thin- tree thinnings and 90% nings nurtures the forests of Japan. recycled paper Ink Recycled vegetable oil ink made for waterless Resource-saving, use of recycled printing materials Bookbinding Fragmentation-resistant Hot-Melt (EVA-base) Improved recycling efficiency and finishing

67 Environmental Support Business The Eco-Workshop, the ecollable Net, and Toppan’s services to support the preparation of CSR and environmental reports provide rich solutions for customers seeking to expand their own environment activities. Toppan bases its customer solutions on its extensive experience in communicating with customers over the years.

Support in Preparing CSR/ Eco-Workshop ecollable Net Environmental Reports

In Toppan’s unique Eco-Workshops for In the late 1990s, the environmental Toppan’s ecollable Net is a network- children, 12 artists renowned for their use report emerged as an important commu- based environmental monitoring system of natural and recycled materials teach nication tool to promote dialog on the designed to bridge the gaps separating lessons on nature and the environment environment between companies and businesses, administrative departments, through craft-making each year. At Eco- stakeholders. The number of companies and Green Consumers (consumers who Products 2003, visitors learned how to publishing such reports has since been take an interest in environmental activi- create Christmas ornaments from scrap steadily growing. From around 2003, ties) by soliciting the latter to respond to poster paper at the Toppan Booth (instruc- many companies began replacing their polls on the web. The ecollable Net was tor: Eriko Teranishi). environmental reports with reports on developed in collaboration with Chubu In the Eco-Workshops held so far in Corporate Social Responsibility (CSR), Recycle, an environmental NPO that con- shopping centers and event halls, partici- expanding the scope of coverage from tinues to work with Toppan in the opera- pants have learned how to create stone the environment to social and economic tion of the network. art paintings, “objet” art from driftwood, issues. This evolution stems naturally The support and approval from Green and sculptures using recyclable milk car- from the globalization of business and Consumers help Toppan achieve balanced tons. The workshops are popular among the emergence of economic, social, and growth in its environmental activities. whole families as enjoyable “eco events.” environmental issues that require new relationships among companies and stakeholders, including all entities in the supply chain. Toppan has built up a wealth of experience in five years of running its environmental-report support business. Recent research on CSR trends and guidelines has been especially useful to Toppan in its

Making Christmas work to assist companies creating their ecollable Net website ornaments own CSR reports. http://ecollable.eal.or.jp/ (in Japanese)

I Spreading the Circle! FSC-certified Products Toppan’s Commercial Printing Division Among processed wood products, was awarded the Chain of Custody Toppan has completed testing of display (CoC) certification by the Forest Stew- stands for exhibition booths and estab- ardship Council (FSC), an international lished a system for taking orders from environmental NGO, in May 2002. This customers. was the first such authorization awarded Toppan will be widening this circle in the printing business sector in Japan. of FSC-certified products once its sales The Commercial Printing Division was activities are fully underway. also awarded the FSC certification in wooden processing in February 2003. With this certification, Toppan is autho- *FSC Forest Certification System rized to affix the FSC logo on both A certification system for well-managed forests printed matter (paper) and a variety of based on the 10 principles and standards of forestry management set down by the Forest Stewardship products made entirely of wood, includ- Council. Wood processing and wood manufacturing sites have also adopted systems to separately man- ing POP displays, display stands, and age wood materials from FSC-certified forests and novelty items. More and more compa- indicate the amounts of FSC-certified materials contained in their final products. This FSC CoC (Chain FSC-certified display stand nies are adopting FSC-certified paper for of Custody) certification gives assurance that FSC- their corporate communications tools, certified products are made at well-managed manufacturing sites. The age of forest “traceability” has especially environmental reports. finally arrived.

68 Environmental Report

Eco-creativity Activities Efforts to Create a Recycling-oriented Society Toppan is fully aware of the importance of taking the initiative in reducing, reusing, and recycling to achieve a sustainable society, and undertakes a host of activities in these areas.

Establishment of a Printed Activities in the Chubu region Cartocan Recycling Material Recycling System The Chubu Division of Toppan is presently operating the printed material recycling In-house paper recycling Recycling printed materials into system in collaboration with the Tokai Toppan understands the importance of original printing paper Co-op Consumers’ Co-operative Federa- reducing waste by converting used prod- Recycling must be earnestly adopted in tion, along with its member co-ops: Meikin ucts into materials for new products. The every part of life before a truly recycling- Coop, Co-op Gifu, Mikawa Citizens’ Co- Packaging Division developed a recycling oriented society can be achieved. Toppan op, and Co-op Mie. During fiscal 2003, system to manufacture toilet paper from has been promoting a self-completing the system recovered 2,878 tons of used used Cartocans in January of 2002. The recycling system for printed materials that paper, an approximately 22% increase company engages in production and fill- encourages activities conducive to resource over the previous fiscal year. ing operations for Cartocan, one of its conservation. main packaging products. Yet this is a system that can only bear The Cartocan recycling system salvages fruit if the paper manufacturers share I Catalog Recovery at the Tokai the paper from unwashed Cartocans and Toppan’s goal of creating a recycling-ori- Co-op re-commercializes the recycled material. ented society. Discarded printed materials (tons) 3,000 2,878 ECO-GREEN, an environmentally-friendly recovered from consumers by paper man- toilet paper, is made from about 50% ufacturers are recycled into Toppan’s 2,500 2,352 used Cartocans. Toppan purchased 1,473 original printing paper and redelivered to 2,086 2,000 cases (60 rolls a case) of ECO-GREEN in consumers in the form of new printed 1,796 fiscal 2003, making it the nation’s largest materials. 1,500 user of the product. The company has promoted the collection of catalogs and is now studying 1,000 whether it can promote the collection of 500 other printed materials in other businesses as well. 2000 2001 2002 2003 (fiscal year)

I Recycling System I Used-paper Recycling System

Sorting for disposal

Old catalogs Customers’ Collection sales offices Automatic vending Used Cartocan Product delivery machine recycling bin Customers’ sales offices trucks collect old at the office collect old catalogs when catalogs from distributing new catalogs Office each sales office Users

Paper Distribution Regenerated as Delivered to manufacturer New catalogs toilet paper for the customers’ re-commercialization logistics centers

Toppan prints on New catalogs delivered the recycled paper to the customer and uses it for new catalogs Gathered by used-paper (Recycled paper) collectors Processed in the recycling plants of paper makers

Cartocans and ECO-GREEN

69 Environmental Report Environmental Communication Activities

To add substance to its environmental activities, Toppan must develop an awareness of environmental practices not only among its employees, but also among the many people outside the company with whom it does business. Toppan’s communication activities are geared to raise environmental awareness both inside and outside the company and stimulate environmental communication activities at a variety of levels in the wider community.

Overview of Environmental Communication Activities

Communication Communication Social contribution Environmental Communication Activi- outside the company inside the company activities ties play a major role in Toppan’s environmental management. Desired ICustomers results hinge on close cooperation within the company, as well as active collaboration between Group companies. Assuredly, however, the effects of Toppan’s environmental communi- Disclosure of information Lectures and seminars cation must extend far beyond the Forestation project Participation in expositions Group. As a responsible corporate cit- Forestation fund izen, Toppan uses its activities to Support for NPOs forge a unified commitment towards ILocal communities Logos the building of a sustainable, recy- Awareness-raising cling-oriented society among citizens, Award system industry, government, and academia. A great many of Toppan’s commu- Disclosure of information nication activities are conceived as Community-friendly plant drivers for environmental manage- Participation in local events ment.

I Categories of Environmental Communication Activity

IEstablished Toppan Declaration on IIssued the Environmental Report the Global Environment and Site Reports IEstablished the Ecology Center IEnvironmental declaration IStructure and operation of the through the Toppan Label for environmental management STAGE 1 Environmentally-friendly Products system Environmental IProduction Phase for IEnvironmental accounting, Environmental Communication environmental education, Corporatization IRisk communication environmental compliance Initiatives to develop IActivities for symbiosis with local IEco-protection Activities at environmentally-friendly communities production sites products and technologies, IEcosystem-saving activities IOffice Eco-protection Activities and reduce environmental IIntroduced low-emission vehicles; burden promoted eco-driving IDeveloped Toppan STAGE 2 Environmentally-friendly Products Environmental Citizenship I Evaluated products based on LCA Environmental activities in local and prior product assessments communities based on I I Promoted environmentally-friendly collaboration with citizens Exhibitions at Eco-Products 2003 printing service IOperated the Environmental IPromoted a support business for monitoring system, ecollable Net preparing environmental reports STAGE 3 IOperated the Tokai Co-op catalog IAdopted Toppan’s Environmental Environmental Socialization recycling system Logo IOperated the Cartocan recycling IIntroduced the Toppan Forming a system for system Environmental Link a sustainable, recycling-oriented IDonated to the Forest Fund IEstablished the President’s Ecology society (forest-saving and environmental Awards education funds) IInvested in a joint forestation venture in Australia

70 Environmental Report

Environmental Communication Activities Communication Inside the Company The information-sharing system on the Toppan intranet raises employee awareness of environmental issues and the environmental philosophy of the company. The President’s Ecology Awards recognize outstanding environmental activities.

Adoption of Toppan’s gan for the month, two outstanding slo- and launch new Group-wide initiatives to Environmental Logo gans, and five exemplary slogans. improve environmental performance. During energy-saving month, each oper- Environmental awareness of every ational site posts inspirational posters and Eco-creativity Hearing employee slogans to promote energy-saving activi- The Eco-creativity Hearing was formed Every employee within Toppan must ties. When the month comes to an end, in fiscal 2003 as a venue to share infor- share an awareness of environmental each site publishes details of its energy- mation on Eco-creativity Activities. The issues if the company is to fully under- saving measures in activity reports distrib- Ecology Center holds the hearing with stand its own impacts and promote com- uted throughout the entire company. each division on a rotating basis to dis- prehensive environmental activities. The seminate important and useful informa- Toppan environmental logo adopted in tion throughout the company. The 1999 is now printed on in-house publica- hearing is expected to stimulate Eco-cre- tions, business cards, stationery, and other ativity Activities by enabling prompt sup- materials to remind employees of the port in each division and the lateral constant need for environmental action. Poster for Earth Month expansion of the most effective activities throughout the company. I Toppan’s Environmental Logo Toppan Environmental Link The Toppan Environmental Link website President’s Ecology Awards was set up on the in-house intranet in May Toppan newly incorporated the Ecology 2001 as a channel for sharing environ- Awards in its biannual lineup of Presi- mental information and raising employee dent’s Awards as a strategy to stimulate awareness on the environment. Links to the environmental efforts of employees. environmental information and data on The award recognizes individuals or groups environmentally-friendly products inside of employees who make distinguished Toppan aspires to devote increasing attention and outside the company are provided. contributions to environmental conser- to the global environment through its Eco-pro- Toppan began reviewing the system in vation. Some employees are awarded tection and Eco-creativity Activities. The Envi- ronmental Logo expresses both the Corporate fiscal 2003 and has provided interactive for proposing innovative environmental Philosophy and Conduct Guidelines. Toppan’s input to stimulate in-house communica- reforms that lead to tangible benefits in environmental efforts and actions are symbol- ized as a seed that will germinate and grow. tion activities. other areas of the company. Others are The stalk shooting out of the seed symbolizes honored for taking out patents or devel- the “E” of ecology, and its two leaves repre- sent Toppan’s Eco-protection and Eco-creativ- oping utility models and other inventions ity Activities. that advance environmental conservation technologies and products. Principal In-house Ecology Awards have been conferred Communication Activities in recognition of a cost-cutting program based on the introduction of solid fuel Earth Month and energy-saving production (RPF) and an effort to enhance months the Toppan brand image by assuring that

Three months of the year have been Toppan Environmental Link (in Japanese) Toppan became the first company in the accorded environmental themes to mobi- printing industry to earn FSC-CoC certifi- lize the involvement of the entire Toppan Environmental Meetings of cation. Toppan’s environmental activities workforce: June is “Earth Month”; the Toppan Group progressed considerably in fiscal 2003, February and August are “energy-saving Toppan holds regular environmental meet- but none stood out sufficiently to merit months.” ings with Group companies to ensure a an Ecology Award for the year. The To prepare for the various activities common approach to environmental momentum behind Toppan’s environ- conducted during Earth Month, Toppan issues. The largest of the meetings are mental efforts is nonetheless mounting. selects environmental slogans submitted the National Eco-Protection Meeting and by Group members in a company-spon- National Eco-creativity Meeting. Others sored contest. The No. 1 slogan is printed include the Tokyo Eco-protection Meeting, on posters and distributed for display Tokyo Eco-creativity Meeting, Environ- throughout the month. The creators of mental ISO Secretariat Meeting, Energy the winning slogans receive cash prizes, Subcommittee, and Toppan Group Envi- as well. In the fiscal 2004 contest, Toppan ronmental Meeting. Participating mem- chose eight winning slogans from among bers from the Group share information, 4,392 submissions sent in: the No. 1 slo- collaboratively develop effective activities,

71 Communication Outside the Company Toppan actively discloses its environmental information through its Environmental Report, Site Reports, the Toppan Label for Environmentally-friendly Products, and other means. The company is also participating in seminars and exhibitions on environmental themes and developing new systems for risk communication in accordance with the PRTR Law.

Environmental Information I Toppan Label for Environmentally- Risk communication policy Disclosure friendly Products Until recently, Toppan had each of its sites Non-chlorine-based respond to inquiries from local residents. materials Ongoing publication of the The card emits extremely low levels of The newly enforced PRTR law requires noxious gas when incinerated for disposal Environmental Report after use. companies to account for the environ- Toppan has been disclosing environment- mental impacts imposed by their business related information in its Environmental activities more transparently. Toppan now Report since 1998. The same report has Seminars meets this requirement in two ways: also been available in English since 2000. To promote a fuller understanding of the firstly, through environmental assessments Both the Japanese and English versions environmental efforts outside the com- to elucidate the current status of its envi- are posted on the company website. pany, Toppan participates in a great many ronmental activities; secondly, through The Environmental Report 2003 received lectures and seminars, including its own reviews of its risk-communication meth- the Excellence Award at the 7th Environ- programs and the seminars and confer- ods to keep people outside of the com- mental Report Awards held by Toyo ences of trade and industrial organizations. pany informed. Keizai Inc. in recognition of its superior Toppan will continue to inform people disclosure of information. Environment-related exhibitions in local communities through the disclo- Toppan is a frequent sponsor of environ- sures in its Site Reports and events such mental trade fairs, as well as an active as its environmental seminars. participant. In July 2004, the company held the Communication & Environmental Exhibi- tion at its PLAZA 21 KANSAI showroom in Osaka. The exhibition was divided into two parts: the “Nature and Environment” pavilion focusing on the global environ-

Environmental Report 2003 conferred the ment, and the “Living Environment” show- Excellence Award at the 7th Environmental casing people-friendly products. Visitors Report Awards learned about Toppan’s many environ- Environmental seminar for local residents I URL for previous Environmental Reports mental initiatives, near-term environmen- http://www.toppan.co.jp/english/corporate/ environmental/index.html tal trends within the company, and the I URL for CSR Report comprehensive strengths of the Toppan http://www.toppan.co.jp/english/corporate/ Group in this field. csr/index.html

Issuance of Site Reports Since fiscal 2000, Toppan’s ISO 14001- I Exhibiting at Eco-Products 2003 certified operational sites have been Toppan was an exhibitor at Eco-Products issuing Site Reports, periodic communica- 2003 in December 2003. Four major tions directed to municipalities and resi- companies within the Group—Toppan dents in surrounding areas. Forms Co., Ltd., Toppan Label Co., Ltd., I Contact address for Site Reports Froebel-Kan Co., Ltd., and Tokyo Shoseki [email protected] Co., Ltd.—exhibited their own environmentally friendly products and explained Adoption of the Toppan Label for Toppan’s Group-wide environmental Environmentally-friendly Products approach to interested visitors. In fiscal 2000, the company began apply- The Toppan booth, known then as ing its Label for Environmentally-friendly “Eco House,” showcased three “lifestyle Products to all products that meet scenes,”—a kitchen, study, and living Toppan’s in-house standards for environ- room furnished with Toppan’s environmental friendliness. These labels explain mentally-friendly products and con- the company’s environmental efforts in structed from Toppan’s environmen- plain language. tally-friendly materials. The company By the end of March 2004, as many also hosted a number of environmental as 70 products were internally qualified events at a mini “Eco Plaza” in the exhi- to bear the Toppan Label for Environ- bition hall. mentally-friendly Products.

72 Environmental Activity Highlights

Cartocan Drink Containers—a Gift from the Forest Toppan seeks to create fully recyclable products made from environmentally-friendly materials— in other words, products friendly to the environment in every way.

Association to Promote Forest- Cartocan, a product made from wood Tree-thinning Product Mark friendly Paper Beverage Containers biomass resources such as tree-thinnings and waste wood, is the only drink con- In April 2004, Toppan joined with 30 Cartocan is now authorized to bear the tainer in Japan to display the tree-thin- companies from the beverage, paper, and tree-thinning product mark, an eco- ning product mark. other industries to form the Association friendly mark that broadens awareness to Promote Forest-friendly Paper Beverage on tree-thinnings, encourages their use, Containers. The association works to con- and helps consumers make the best envi- Cartocan Recycling serve Japan’s environment by expanding ronmental choices. both the demand for, and supply of, Cartocans are made mostly from paper Like paper milk cartons, Cartocans are Cartocan paper drink containers. materials. At first thought, the use of made of high quality paper, a constituent Toppan’s Cartocan is an eco-friendly paper materials for containers may seem that makes them highly recyclable. They container composed of more than 30% to conflict with the goal of nurturing also can be collected and combusted as a paper materials from Japanese forests, forests. However, the wider use of tim- thermal resource. including tree-thinnings and waste timber, a raw material for paper-based con- ber. The sale of containers made from tainers, brings in the funds needed to Material recycling these materials helps secure the funds support a sound and smooth cycle of IHome route: After use as a drink con- needed to maintain forestry domestically. planting, nurturing, and felling in Japanese tainer, consumers rinse the pack thor- Wide adoption of the Cartocan is seen as forests. Most of the timber resources oughly, cut it open, allow it to dry, and one way to nurture the forests of Japan. consumed in Japan are procured at low drop it off at a collection point at a The association also supports aware- prices from forests overseas. Without supermarket or local government office. ness campaigns for the wider usage of more funds flowing into the Japanese IBusiness route: Working in collabora- paper drink containers through tie-ups lumber industry, a sound cycle of forest tion with drink producers and recycled between the Forestry Agency and related management will be impossible to achieve. paper manufacturers, Toppan has estab- organizations and companies. The associ- lished a model recycling system for the ation will be actively collecting and dis- Kanto region. seminating information for its campaigns and promoting support businesses to Thermal recycling expand demand and supply. IThermal incineration: The heat generated during incineration is collected and reused as an energy source for room or water heating. Incineration of Cartocan’s tree-thinning product mark Cartocans produces only about 2.2% ash by weight. ISolid fuel: Waste paper left over from the production of Cartocans is turned into solid fuel for heating, electricity generation, and other uses. The Sagami- I Cartocan’s Place in the Wood Production Cycle hara plant commenced operations as a solid fuel pilot plant in April 1999. Planting

Cost Purchase of saplings, etc. Cost Tree-thinning operations, etc.

Income Income Use of tree-thinnings Use of timber Nurturing

Cartocan

Felling

The Cartocan also combats the greenhouse effect. The use of Japanese tree-thinnings and waste wood preserves and nurtures Japan’s forests. When forests expand over a wider area, they absorb greater volumes of CO2, the principal manmade source of global warming.

73 Independent Review AZSA Sustainability Co., Ltd., an independent auditing firm, was commissioned to review the CSR Report 2004 to help Toppan improve its clarity, accessibility, and relevance for readers.

In 2000, Toppan proclaimed its Toppan sites inside and outside of Japan. To lations. This strict approach in the mea- Vision 21 statement, a detailed vision of maintain uniform standards throughout surement of environmental burden is also the Toppan of the future. The embodi- this network, Toppan has developed a reflected in Toppan’s data calculations in ment of this vision is laid out in the CSR set of common environmental perfor- environmental accounting. When budget- Report in the form of the Corporate mance indexes, environmental accounting for environmental activities, Toppan Philosophy, Corporate Creed, and Conduct ing indexes, easy-to-use guidelines, and earmarks the environmental conservation Guidelines. Toppan’s frequent pledges to procedural handbooks on data-collection ratio and strictly defines a range of main- reciprocate the trust of its customers and (with examples using data from actual tenance costs for environmental conser- fulfill its social responsibility as a good sites) for use in both the in-house audit- vation facilities and their maintenance. corporate citizen express the gist of this ing of sites worldwide and the specialized The CSR Report published from this vision. Toppan continues to recognize the auditing of sites to collect information to year combines all of the content previ- importance of the links between its busi- be disclosed in the Environmental Report. ously issued in its Environmental Reports nesses and society. These materials and the in-house audits with detailed explanations of Toppan’s A string of corporate abuses in recent by Toppan have been very helpful for other activities as a corporate citizen. The years has stirred an unprecedented inter- AZSA in developing its review procedures CSR Report includes in-depth explana- est in corporate social responsibility and reviewing the sites that it cannot visit tions of the approaches and policies that among stakeholders and society. Toppan physically. led to its creation, as well as general has responded by aligning its many activi- The Air Pollution Control Law of Japan descriptions of Toppan’s CSR activities ties with the principles of its Corporate requires companies to disclose a desig- in every business field. The goal is to Philosophy and outlining the details of its nated set of regulated atmospheric pollu- comprehensively disclose information and activities in the CSR Report 2004. tants from certain types of facilities. The inform readers of Toppan’s policies and AZSA Sustainability Co., Ltd. (formerly disclosure efforts by Toppan go well systems. the Environmental Management Depart- beyond meeting this legal requirement. ment of Asahi & Co) has provided an Each year, the company calculates and independent review of Toppan’s environ- discloses the emissions of SOx, NOx, and mental reports since the 2001 issue. Over all major atmospheric pollutants. each of the past four years, AZSA has Turning to the subject of soil pollution, rated Toppan highly for its cooperation Toppan targets a 90% reduction in the with AZSA’s review and commitment to generation of final landfill waste by 2010 sincerely disclose the details and results of in comparison with the fiscal 2000 level. its environmental conservation activities. The Company includes landfill waste gen-

The scope of the report covers an erated both directly and via intermediate Review at Asaka plants immense network of some 100 operating processes (e.g., via recycling) in its calcu-

I Independent Review Procedure

A hearing to review improvements from the previous year; examination of methods and scope of IDiscussion and planning Planning aggregation; determination of the schedule and the sites to be reviewed

Implementation The President & CEO gives his Executive Message in the CSR Report 2004; Toppan’s basic thinking on ITop management interview Corporate Social Responsibility (CSR) is confirmed; the evolution of the Environmental Report into the CSR Report is fully described IExamination at head office Toppan Printing Co., Ltd. A hearing on data-collection methods, including internal rules; examination of analytical methods and (Nonconsolidated) and Group evidence (with questions and answers); examination of the calculation accuracy and appropriateness companies in and outside Japan of methods; examination of consistency among data (including descriptions) Asaka plants/Securities Printing Division/Commercial Printing Division/Electronics Division/ I One-site review Tamapoly Co., Ltd.

Final review of the script IReview at head office Confirm data on the entire Group and perform a final check on the CSR Report content

Before submitting the independent review, AZSA reviewers uninvolved in the Toppan review examine Internal review at AZSA IInternal review meetings the review procedure, examine the review results, and draw up their conclusions about the CSR Sustainability Co., Ltd. Report 2004

Submitting the Independent ISubmission of the Independent The independent reviewer submits the Independent Review Report to Toppan Review Report Review Report

IBriefing on the findings in the Meeting the examiner independent review The independent reviewer reports the findings of the review to Toppan

74 As the very first CSR Report from Toppan, this year’s report takes a more comprehensive form than it will in the future. From 2005 onward, the content will be much more selectively focused on the most important issues facing the company. Many of reports will cover activities at the site level, with news about the people who actually put the company’s policies into action. Toppan may also add overviews of economic performance in terms of the relationship between the direct and indirect economic actions of the company and stakeholders, as suggested in the GRI guidelines. In the past, Toppan has relied exclusively on reader surveys and independent reviews to collect feedback on its reports. From this year the company has also held roundtable discussions to sample third- party opinions from experts and others. These external views should help the company improve its reports yearly.

Maho Yao Manager AZSA Sustainability Co., Ltd.

I Toppan’s Response Toppan began publishing the Environ- environmental areas as well. The CSR activities in its business operations. mental Report in 1998. A few years later, activities now underway are a realization Going forward, Toppan aims to serve just after the publication of the Environ- of Toppan Vision 21, the statement on society as an ideal corporate citizen by mental Report 2001, Asahi & Co (currently the shape of the company in the future. establishing an independent approach to AZSA Sustainability Co., Ltd.) began an The disclosure of these activities gives our CSR, actively undertaking measures to independent review of the environmental stakeholders a fuller picture of Toppan as fulfill its social responsibilities, and disclos- performance and environmental account- a corporate citizen. ing those efforts in this report. As always, ing indices used to quantify the results of On the environmental front, the the issues pointed out in the independent Toppan’s environmental activities. Toppan Declaration on the Global Environ- review will be reflected in the planning of AZSA Sustainability Co., Ltd. has also ment is the basis on which the company future activities. reviewed this first CSR Report. sets independent standards for measur- With this year’s CSR Report, Toppan ing environmental burden and disclosing sought to combine the environmental its results—standards that go well beyond content covered in its earlier Environ- those required by law. Toppan will con- mental Reports with a complete overview tinue to strictly manage these activities of the company’s social activities in non- and strengthen the roles of its overall CSR

75 Third-party Opinion A new horizon for Japanese-style CSR

Amidst the current CSR boom, many company spend more time describing ment to take the lead and evolve into a companies are proudly proclaiming their measures that “do no harm,” or measures major benefactor of society. This step commitment to “social responsibility” and that “contribute to society” and “do advances CSR to an unprecedented level. turning out reports on their CSR endeav- good”? Social responsibility tends to be Toppan has created a Japanese-style CSR ors. A close reading of these reports is defined narrowly by terms such as “legal destined to gain strong recognition in the probably the best way to appraise their compliance,” “corporate ethics,” “human world’s capital markets. actual resolve. In reading the CSR Report rights,” and “environmental protection.” Behind this advancement are the 2004, I was once again impressed by the The CSR Report 2004 frames “social “human assets” of Toppan. The people of remarkable resolve of Toppan in this new responsibility” in a more positive light. Toppan are the company’s truest creation realm of CSR. The ultimate purpose of CSR activities for and its ultimate “social contribution.” How can we distinguish between a Toppan is to “create a fulfilling society.” company with a strong resolve and a The third point is how the company August 2004 company without one? Here I can sug- actually realizes its “social contributions.” gest three points check. Back during the philanthropy boom, First, what reasons does the company companies set aside shares of their profits cite for taking an interest in CSR? If the to sponsor cultural activities. While cer- company explains that CSR is crucial for tainly helpful to society, their efforts rep- its survival or investor recognition, its resented just one of many forms of motivations are likely to be focused inward, “social contribution.” A company wholly on its own interests. A company with committed to social contribution will do resolve and a clear corporate philosophy so through its business activities; through meets its social responsibilities without the very products and services that it pro- having to be reminded. Within a com- vides to society. The notion that this Professor, pany truly committed to the social good, should begin with Japanese-style man- Tama University Graduate School words like “responsibility” and “obliga- agement is reiterated throughout this President, tion” evolve into words like “principle” report. The same notion sits at the heart Thinktank SophiaBank and “mission.” The Corporate Philosophy of Toppan’s Corporate Philosophy and Hiroshi Tasaka introduced at the beginning of the CSR the tenet that Toppan employees “create Took his doctorate from The University of Tokyo in 1981. Awarded a Doctor of Engineering. Fellow Report 2004 and the frequent use of dedicated products.” Under the ideal form of The Japan Research Institute, Limited. Professor the word “mission” throughout its pages of Japanese-style management, employ- at Tama University Graduate School. President of convey the company’s resolve. ees pour their hearts into the products The Thinktank SophiaBank. President of The Japan Social Entrepreneur Forum (JSEF). Outside director The second point is how the company they create. and advisor to companies in the fields of informa- defines “social responsibility.” Does the This report reflects Toppan’s commit- tion, logistics, finance, education, and environment.

I Toppan’s Response Hiroshi Tasaka, a professor at the Tama basic policy behind the promotion of them as the ultimate creation and contri- University Graduate School and President CSR activities is to realize this Corporate bution to society. Toppan holds precisely & CEO of The Thinktank SophiaBank, Philosophy. this view. As the creators of Toppan’s Limited, has provided valuable feedback Professor Tasaka pointed out three independent CSR initiatives, the employ- on the CSR Report 2004. signs of a company’s resolve to fulfill CSR, ees of Toppan must be driven by a strong CSR has seen something of a boom namely awareness of social responsibility, desire to carry out CSR. Toppan also fully among companies these days. As a leader making positive contributions, and con- understands that the success of its CSR in the printing industry, Toppan makes it tributing through business activities. hinges on a positive working environ- its mission “to facilitate the dissemination Toppan makes these an essential part of ment for its employees. and exchange of information and ideas as its CSR measures as it works to become a Toppan would like to sincerely thank the nurturer of a fulfilling society. To fulfill true benefactor of society. Professor Tasaka for offering his construc- this mission, the company serves society Professor Tasaka also touched on the tive opinions on this CSR Report. by “creating dedicated products.” The importance of human assets, describing

76 Data Report

Toppan’s Corporate Creed asserts that the company will undertake fair and open corporate activities. This Data Report presents the internal standards and quantitative data compiled based on reporting guidelines issued by the Ministry of the Environment and GRI and corporate social responsibility questionnaires produced by a number of research organizations.

Corporate profile, the scope of the report, ——————————— Basic Reporting Data P. 78 and other basic details on the reporting process

Data on the economic and social aspects of the report, ————————— Social Performance Data P. 80 including data on finances, ethics, and personnel

Detailed information on environmental management, Environmental Management Data ——— P. 84 environmental accounting, and other management systems

Information on environmental performance, ———————————— Eco-protection Data P. 86 including data on various environmental burdens

Eco-creativity Data/ Status of environmental communication activities and —— Environmental Communication Data P. 90 environmentally-friendly products

Chart showing conformity with GRI (Global Reporting ————— GRI Guidelines Reference Index P. 92 Initiative) Sustainability Reporting Guidelines 2002 Basic Reporting Data

Corporate Profile Corporate name Toppan Printing Co., Ltd. Head office 1, Kanda Izumi-cho, Chiyoda-ku, Tokyo 101-0024 Japan Phone +81-3-3835-5111 Established January 17, 1900 President & CEO Naoki Adachi Number of employees (Nonconsolidated) 11,512 (end of March 2004) Number of employees (Consolidated) 32,178 (end of March 2004) Capital (Nonconsolidated) 104.9 billion yen

Group Profile The Toppan Group comprises Toppan Printing Co., Ltd. and 143 related companies (122 subsidiaries and 21 affiliates) engaged in a wide scope of businesses in the three fields of Informa- tion & Networks, Living Environment, and Electronics. The position of Toppan and its affiliated companies with respect to these business fields is out- lined below.

Toppan Group Structure Toppan Printing Co., Ltd.

Information & Networks Living Environment Manufacturing Companies Manufacturing Companies Toppan Display Co., Ltd. Toppan Plastic Co., Ltd. Toppan Graphic Co., Ltd. Toppan Kansai Packs Co., Ltd. 19 other companies Toppan Graphic Communications Co., Ltd. 16 other companies Tama Processing Co., Ltd. 3 other companies ∗ Hino Offset Printing Co., Ltd. 2 other companies Manufacturing and Sales Companies Hamamatsu Toppan Forms Co., Ltd. 10 other companies Toppan Label Co., Ltd. T. F. Company, Ltd. 7 other companies Toppan Containers Co., Ltd. ∗ Korea Toppan Forms Co., Ltd. 8 other companies Tamapoly Co., Ltd. Manufacturing and Sales Companies ∗ Toyo Ink Mfg. Co., Ltd. 2 other companies Toppan Forms Co., Ltd. 2 other companies P. T. Toppan Sampoerna Indonesia ∗ Tosho Printing Co., Ltd. Toppan Interamerica Inc. 5 other companies ∗ Tokyo Magnetic Printing Co., Ltd. Sales Companies Toppan Printing Co. (America), Inc. Toppan Cosmo, Inc. 1 other company Toppan Printing Co., (H. K.) Ltd. Toppan Printing Co., (Shenzhen) Ltd. Electronics Toppan Printing Co., (Shanghai) Ltd. 3 other companies Manufacturing Companies Sales Companies Niigata Toppan Printing Co., Ltd. Froebel-Kan Co., Ltd. Toppan Shiga Seimitsu Co., Ltd. 4 other companies Total Media Development Institute Co., Ltd. Manufacturing and Sales Companies Toppan Travel Service Co., Ltd. NEC Toppan Circuit Solutions, Inc. Toppan Multisoft Ltd. 16 other companies Toppan CFI (Taiwan) Co., Ltd. 3 other companies ∗ Toppan M & I Co., Ltd. Sales Companies ∗ Tokyo Shoseki Co., Ltd. 2 other companies Toppan Electronics (Taiwan) Co., Ltd. 3 other companies Toppan Printing Co. (Australia) Pty. Ltd. 1 other company

Notes: •No symbol: subsidiary—122 companies; ∗(asterisk): affiliate—21 companies (March 31, 2004) •While Toppan’s business operations activities are divided into five fields, only three main categories are adopted for consolidated environmental accounting. This decision was made on the basis of the scale of sales. •Among Toppan’s subsidiaries, Toppan Forms Co., Ltd. is listed on the First Section of the Tokyo Stock Exchange.

78 Data Report

Basic Reporting Data

Scope of the Report The scope of the environmental performance data and environmental accounting is determined based on the importance of each subsidiary in the field of environmental conservation. The main financial data cover consolidated subsidiaries. In principle, personnel-related data cover only Toppan Printing Co., Ltd.

Locations of Production Plants (plants of Toppan Printing Co., Ltd. and its affiliates*1) *1 Subsidiaries that receive management guidance from Toppan Printing Co., Ltd. Plant Location Plant Location Plant Location Sapporo plant Hokkaido Matsuzaka plant Mie NEC Toppan Circuit Solutions, Inc. Niigata Chitose plant Hokkaido Shiga plant Shiga Toppan Printing Communications Saitama Co., Ltd. Sendai plant Miyagi Kansai plant (Commercial Printing) Osaka (Osaka) Toppan Graphic Co., Ltd. Saitama Gunma plant Gunma Kansai plant (Commercial Printing) Hyogo Toppan Plastic Co., Ltd. Saitama Kashiwa plant Chiba (Takino) Toppan Packaging Service Co., Ltd. Saitama, Satte plant Saitama Takino plant (Securities) Hyogo Chiba Ranzan plant Saitama Takino plant (Packaging) Hyogo Toppan Seihon Co., Ltd. Tokyo Asaka plant (Securities) Saitama Fukusaki plant Hyogo Toppan Electronics Fuji, Co., Ltd. Shizuoka Asaka plant (Commercial Printing) Saitama Itami plant Hyogo Mikkabi Toppan Printing Co., Ltd. Shizuoka Asaka plant (Electronics) Saitama Fukuoka plant No.1 Fukuoka Osaka Toppan Display Co., Ltd. Osaka Itabashi plant Tokyo Fukuoka plant No.2 Fukuoka Toppan Harima Products Co., Ltd. Hyogo Sagamihara plant Kanagawa Kumamoto plant Kumamoto Kannabe Toppan Co., Ltd. Hiroshima Niigata plant Niigata Toppan Saga Yoki Co., Ltd. Saga Nagoya plant Aichi Kumamoto Toppan Co., Ltd. Kumamoto

Overseas Production Plants (plants of overseas subsidiaries) Plant Location Plant Location Plant Location Toppan Printing Co., (Shanghai) Ltd. Shanghai Siam Toppan Packaging Co., Ltd. Samutprakarn, Toppan Chunghwa Electronics Taiwan Thailand Co., Ltd. Toppan Printing Co., (Shenzhen) Ltd. Shenzhen Toppan Printing Co. (America), Inc. New Jersey Toppan PAP (Taiwan) Co., Ltd. Taiwan Toppan Printing Co., (H. K.) Ltd. Hong Kong Toppan Interamerica Inc. Georgia Toppan CFI (Taiwan) Co., Ltd. Taiwan P. T. Toppan Sampoerna Indonesia Jawa Barat, Indonesia Toppan Optical Products, Inc. California

79 Social Performance Data

Main Financial Data Sales Ordinary Income Net Income Consolidated Nonconsolidated Consolidated Nonconsolidated Consolidated Nonconsolidated (100 million yen) (100 million yen) (100 million yen) 14,000 800 350 12,938 12,961 12,973 12,516 731 312 12,000 700 300 291 635 620 278 600 10,000 9,693 9,602 250 9,117 9,146 507 500 484 207 214 8,000 411 200 183 189 400 344 348 6,000 150 147 300 4,000 100 200

2,000 100 50

0 0 0 2001/3 2002/3 2003/3 2004/3 2001/3 2002/3 2003/3 2004/3 2001/3 2002/3 2003/3 2004/3 (term) (term) (term)

Sales by Segment (consolidated) Number of Employees (million yen) Consolidated Nonconsolidated Electronics (employees) 229,280 35,000 33,292 Information & 32,163 32,178 Networks 31,610 739,850 30,000

25,000

20,000

15,000 13,026 12,748 12,053 11,512 10,000

5,000 Living Environment 0 2001/3 2002/3 2003/3 2004/3 328,225 (term)

Hiring and Employment Human Asset Development Number of Employees Supporting employees in career planning Number of Average Turnover Toppan provides its employees with the opportunity to declare their employees tenure rate career plans and the types of work they want to perform. A number of Fiscal 2002 12,053 15.5 years 3.7% career paths are offered. Career development and career training pro- as of end of March 2003 (8.1% women) grams are also established under the company’s career planning sys- Fiscal 2003 11,512 15.5 years 3.6% as of end of March 2004 (7.9% women) tem. Employees are free to access information on skill development and self-awareness. Employees by Type (persons) Educational opportunities to support independent study Management class Supervisor (assistant manager (supervisory, Temporary, The Toppan Business School provides elective group training in some Executives and above, including part-time including contract contract 60 courses, distance learning through the Toppan Challenge School, employees) employees) and a video library. The company covers half of the program fees for Fiscal 2002 29 1,977 2,465 782 employees enrolled at The Toppan Challenge School and supports as of end of independent study. March 2003 (0.8% women) Fiscal 2003 31 1,897 2,334 849 as of end of Results and Plans in Human Asset Development (1.0% women) March 2004 Fiscal 2003 Fiscal 2004 Recruits (regular hiring, including the hiring of new graduates) Funds spent on training per employee 29,000 yen 45,000 yen (estimated) Sales, Technical % women Average training days per employee 0.89 day — administration (Results for fiscal 2002 were not compiled for either of the above) Fiscal 2002 105 120 23.1% Fiscal 2003 105 120 23.6% Personnel evaluation system Salary revisions, bonuses, and promotions are decided through a merit review process. Employees and superiors discuss the results of the merit reviews and future goals in feedback interviews. 80 Data Report

Social Performance Data

Respecting and Supporting Human Assets Workplace Health and Safety Policy on providing equal employment opportunities and General health and safety managers are appointed to take responsibil- eliminating discrimination ity for health and safety. Their responsibilities are clearly set forth in The policy on providing equal employment opportunities and eliminat- the health and safety rules of each operational site. The Health and ing discrimination is clearly set down in writing and disclosed publicly. Safety Committee plans education for the workforce as needed, The policy applies to the entire Group, including foreign and domestic including training for new recruits. subsidiaries. Clear goals are set for each operational site, and health managers Special items: respect for human rights; compliance with laws and and industrial health staff conduct regular checks to confirm the exis- ethical standards; prohibition of child labor; prohibition of discrimina- tence of safeguards at hazardous areas and risk points. Toppan regu- tion on the basis of ethnicity, race, nationality, gender, physical cir- larly monitors and collects information on labor accidents. cumstances, or other reasons; prohibition of sexual harassment. Fiscal 2002 Fiscal 2003 Employment of women Deaths from work accidents 0 0 Toppan sets specific quantitative targets for the employment of women Frequency rate*1 0.55% 0.30% at an annual forum devoted to this issue. A sexual harassment consul- Severity rate*2 0.02% 0.01% tation office has also been established. *1 Frequency rate: number of employees injured in labor accidents per 1 million working hours (reflects the frequency of labor accidents) *2 Severity rate: number of workdays lost per 1,000 working hours (reflects the severity of Work Holiday and Leave Systems labor accidents) Maternity leave Both contract and part-time employees can take up to six weeks of leave before childbirth and another eight weeks after.

Childcare leave Regular, full-time employees can take up to 12 months of childcare leave. In fiscal 2003, one male employee also used the system. Employees receive a small portion (10%) of their regular salary during the leave. Employees can also apply to shorten or extend the leave. Toppan subsidizes some childcare costs and provides information through its consultation office. Employees can consult with the company to discuss their career plans before they return to work.

Nursing care leave Regular, full-time employees can take up to 12 months of nursing care leave. Leave can be taken once per family member needing care. The company subsidizes some nursing costs and provides information through its consultation office.

Emergency care leave Employees can take up to five days of unpaid leave a year.

Other systems Reduced working hour systems are available to support childcare and nursing. All employees can take advantage of the flextime work system and the company’s “refresh holiday” system.

Status of Work Holiday and Leave Systems Fiscal 2002 Fiscal 2003 Average ratio of annual paid holiday used 38.6% 38.2% Employees using the maternity leave system 32 35 Employees using the childcare leave system 37 48

81 Information Risk Management Privacy Mark Certification Company Operational site Date obtained/applied for Certification type Toppan Printing Co., Ltd. Securities Printing Division March 2000 (obtained) A190005 (03) Commercial Printing Division May 2001 (obtained) A190018 (02) Nishinihon Division March 2004 (applied for) — Chubu Division July 2004 (applied for) — Toppan Forms Co., Ltd. General Production Division June 2001 (obtained) A190019 (02) IMS Business Division July 2003 (obtained) A190050 (01) Kansai Business Division November 2002 (obtained) A190027 (01) Chubu Business Division April 2003 (obtained) A190039 (01) Nishinihon Business Division April 2003 (obtained) A190040 (01) Toppan Forms Operation Co., Ltd. August 2002 (obtained) A820089 (01) Toppan Forms Logistics and Services Co., Ltd. August 2002 (obtained) A450002 (01) Toppan Forms Services (Kansai) Co., Ltd. Entire company August 2002 (obtained) A190028 (01) Toppan Forms Process Co., Ltd. Entire company June 2003 (obtained) A190047 (01) Toppan Forms (Hamamatsu) Co., Ltd. Shizuoka plant No. 2 August 2002 (obtained) A190029 (01) Toppan NSW Co., Ltd. February 2004 (obtained) A820186 (01) (as of September 2004)

ISMS Certification Company Operational site Date obtained Certification type Toppan Printing Co., Ltd. E-business Division (TOPICA service) June 2002 (Ver. 1.0) CR-I0001 Toppan Forms Co., Ltd. Tokyo Data Center February 2003 (Ver. 1.0) JQA-IM0049 Kansai Business Division, Kansai Data Center January 2004 (Ver. 1.0) JQA-IM0137

Strengthening Quality Assurance Basic Stance on Product Safety Management

1. Basic philosophy on product safety management 5. The head office and all of the company’s divisions actively collect information on the Product Liability Law. The head office disseminates Toppan prevents product-related accidents and protects the health and safety information to the divisions as a central information source. of the users of its products through the following steps: 6. Prevention of product-related accidents is a fundamental corporate • Recognize the importance of product safety. policy. Toppan closely adheres to this policy throughout all stages of • Promote measures to improve Toppan’s product safety management. operation, starting from development and design, in all if its work with • Contribute to society through Toppan’s product safety management. affiliates, business partners, customers, and others. 7. Quality assurance activities are carried out from the user’s viewpoint as the company strives to prevent the production of defective products. 2. Guidelines on product safety management 8. The company cooperates actively and sincerely with the product safety 1. The entire company and all of its departments individually recognize the management activities of customers as part of its social responsibility. importance of product safety and carry out safety management from 9. The company responds appropriately and sincerely to the opinions, their own standpoints. complaints, and requests from users in its capacity as a “protector of 2. Efforts to manage the safety of products are automatically incorporated the user.” into TQC, TPM, ISO and other activities to strengthen quality management 10. The company creates an overall quality assurance structure through and quality assurance while improving the nature of the activities. cooperative activities between the existing Crisis Management 3. In regard to the maintenance of product quality and other systems, the Committee and Confidential Information Management Committee. company acts efficiently and effectively by incorporating the ISO 9000 series and other approaches to quality assurance. 4. The head office and all of the company’s divisions cooperate in building consistent quality assurance measures. The head office assumes responsibility for comprehensive measures (basic approach to product safety, collection of information on specific cases, establishment and implementation of corporate-wide policies on product management, external affairs, etc.) and the divisions assume responsibility for specific measures (design standards for each product, etc.).

82 Data Report

Social Performance Data

ISO 9001 Certification within the Toppan Group Registration date Division Operational site Registrar (Revision date) Electronics Division Asaka plant, Shiga plant JQA 1993.11 (2003. 6) Interior Decor Materials Division Kashiwa plant, Satte plant JQA 1994.12 (2001.12) Optronics Division JQA 1995. 3 (2003. 4) Electronics Division Kumamoto plant JQA 1995. 4 (2003.11) Packaging Division, Kansai Division Takino packaging plant, Fukusaki plant, Itami plant JQA 1995. 4 (2003.10) Chubu Division Matsuzaka plant, Mikkabi Toppan Printing, JQA 1997. 7 (2003.10) Nagoya plant Information & Publications Division Compact Disk Manufacturing Department JQA 1998. 6 (2002. 9) Nishinihon Division, Kyushu Division Fukuoka plant No. 2, Securities Department JQA 1999. 3 (2003. 7) Hokkaido Division JQA 2000.11 (2003.11) Securities Printing Division Asaka plant (Securities), Ranzan plant, Kansai JQA 2002. 4 (2003.10) Securities Printing Division, Takino plant (Securities), Securities Printing R&D Department Electronics Division, Display Department Shiga plant No. 2, Niigata plant, Mie plant JQA 2002. 6 Kyoto sales office, Yaesu sales office JQA 2002. 6 Nishinihon Division, Kyushu Division Amagi plant JQA 2004. 6

Registration date Group company Operational site Registrar (Revision date) Toppan Graphic Communications Co., Ltd. QCB JAPAN 2004. 3 Toppan Electronics Fuji Co., Ltd. JQA 1993.12 (2003. 5) NEC Toppan Circuit Solutions, Inc. Reliability Center for Electronic 1993. 4 (2003.12) Components of Japan Kumamoto Toppan Co., Ltd. JQA 1997.11 (2003.11) Toppan Plastic Co., Ltd., Kansai Branch Fukusaki plant, Wakayama Manufacturing Department JQA 2001.10 (2003.12) Toppan Prosprint Co., Ltd. Mito plant JQA 2001.11 (2004. 4) Toppan Technical Design Center Co., Ltd. JQA 2003. 1 Toppan Display Co., Ltd. Quality Certification Bureau Inc. 2004. 2

Registration date Overseas subsidiary Registrar (Revision date) Toppan Printing Co., (Shenzhen) Ltd. SQCC 1995.11 (2001.10) Toppan Printing Co. (America), Inc. DNV 2000. 7 Toppan Printing Co., (Shanghai) Ltd. TÜV Anlagentechnik GmbH 2001. 9 Toppan Chunghwa Electronics Co., Ltd. RWTUV 2002. 5 Toppan Printing Co., (H. K.) Ltd. DNV 2002. 5 P. T. Toppan Sampoerna Indonesia LRQA 2002. 9 Toppan CFI (Taiwan) Co., Ltd. SGS 2003.12

83 Environmental Management Data

Organizational Structure Toppan Group Environmental Verification of Environmental Major Environment-related Laws Meeting Activities in Eco-protection Involving the Printing Industry in Toyo Ink Mfg. Co., Ltd. Promotion Meetings Japan Tosho Printing Co., Ltd. 1. Reporting of activity achievements and Basic Stance and Rules P. 48–P. 57 measures taken for Eco-protection issues The Basic Environment Law Tokyo Shoseki Printing Co., Ltd. (1) Results in waste disposal and recycling Law for Promotion of Nature Restoration Toppan Forms Co., Ltd. (2) Results in energy saving The Basic Law for Establishing the Recycling- Tokyo Magnetic Printing Co., Ltd. Based Society (3) Status of observance of in-house standards Toppan Label Co., Ltd. on atmosphere, water, and others Legislation to Implement a Basic Law on Energy Toppan Logistics Co., Ltd. Policy 2. Information on environmental concerns Law Concerning Increasing the Desire for Tamapoly Co., Ltd. outside the company Environmental Conservation and Promoting NEC Toppan Circuit Solutions, Inc. (1) Information on the establishment and Environmental Education Toppan Printing Co., Ltd. revision of environment-related laws and Law Concerning the Promotion of regulations Environmentally Conscious Activities of 10 companies overall (2) Information on contractors for industrial Specified Businesses through the Promotion of waste disposal consignment the Provision of Environmental Information Eco-protection Fields P. 58–P. 63 Toppan Group Eco-products Meeting (3) Guidelines, requests, and information from Air Pollution Control Law Toyo Ink Mfg. Co., Ltd. government administrations, including local municipalities Water Pollution Control Law Tosho Printing Co., Ltd. (4) Complaints, requests, and feedback from Sewerage Law Tokyo Shoseki Printing Co., Ltd. local residents and others Septic Tank Law Toppan Forms Co., Ltd. 3. Progress of the Eco-protection Activity Plan Law Concerning Special Measures for Toppan Cosmo, Inc. (Environmental Management Program) Conservation of the Environment of the Seto Inland Sea Toppan Label Co., Ltd. 4. In-house nonconformities and irregularities in environmental conservation Soil Contamination Countermeasures Law Tokyo Magnetic Printing Co., Ltd. Offensive Odor Control Law (1) Reporting on troubleshooting analyses and Total Media Development Institute Co., Ltd. recommendations on improvement plans Noise Regulation Law Toppan Logistics Co., Ltd. (correction or prevention) for cases in Vibration Regulation Law Toppan Multisoft Ltd. question Industrial Water Law Tamapoly Co., Ltd. (2) Disseminating information on problems Law Concerning the Rational Use of Energy common to different departments Froebel-Kan Co., Ltd. Law Concerning the Promotion of the 5. Reporting on other environment-related Development and Introduction of Alternative NEC Toppan Circuit Solutions, Inc. information Energy Toppan Printing Co., Ltd. (1) Adopting or changing the use of chemical Law Concerning the Promotion of the Use of 14 companies overall substances New Energy Waste Disposal and Public Cleaning Law (2) Changing or newly installing production processes and facilities Law for the Control of Export, Import, and Eco-creativity Promotion System Others of Specified Hazardous Wastes and 6. Reporting on the environmental Other Wastes Securities Printing Eco-creativity Project management system Division Construction Materials Recycling Act (1) Content of in-house environmental Law Concerning Special Measures against PCB Commercial Printing Commercial Printing auditing Division Eco-Project waste (2) Content of internal environmental auditing Law Concerning Reporting, etc. of Releases to Kansai Commercial Eco-creativity Promotion the Environment of Specific Chemical Printing Sub-division Committee 7. Other issues specific to the production plant, such as ecological conservation of Substances and Promoting Improvements in their Management Electronics Division Eco-creativity Promotion the premises and/or the surrounding areas (Electronics) Law Concerning Special Measures against Information & Eco-promotion Project Dioxins Publications Division Registered In-house Environmental Law Concerning Special Measures for Total Emission Reduction of Nitrogen Oxides from Packaging Division Package and Environment Auditors Automobiles in Specified Areas 2000 Project Position Personnel Law Concerning the Protection of the Ozone Interior Decor Eco-creativity Promotion Managers 151 Layer through the Control of Specified Materials Division Committee Substances and Other Measures Supervisors 109 Optronics Division Eco-creativity Promotion Law Concerning the Promotion of the Committee Employees 68 Measures to Cope with Global Warming Chubu Division Chubu Eco-Project Total 328 Factory Location Law Nishinihon Division Nishinihon Eco-creativity (as of June 30, 2004) Landscape Law Committee City Planning Law Tohoku Division Tohoku Eco-creativity Urban Green Law Project Law Concerning the Improvement of Pollution Hokkaido Division Eco-creativity Committee Prevention Systems in Specific Factories Eco-creativity Fields P. 64–P. 69 E-business Division Eco-creativity Promotion Project Law Concerning the Promotion of Procurement of Eco-Friendly Goods and Services by the State Technical Research Research Institute and Other Entities Institute Eco-creativity Promotion Law for the Promotion of Effective Utilization Committee of Recyclable Resources Law for the Promotion of Sorted Collection and Recycling of Containers and Packaging Law for the Conservation of Endangered Species of Wild Fauna and Flora

84 Data Report

Environmental Management Data

Environmental Accounting Breakdown of Environmental ISO 14001 Certification Conservation Investment for Registration date Fiscal 2003 Division Operational site Main product Registrar (Revision date) Management Research & Electronics Division Shiga plant Electronics products JQA 1998. 7 activities: 4.2% development: 2.4% Electronics Division Kumamoto plant Electronics products JQA 1998.11 Global Pollution (2001.12) environmental prevention: Interior Decor Materials Satte plant/Kashiwa plant Wallpapers, decorative JQA 2000. 3 conservation: 66.3% 12.9% Division paper/film for furniture, (2000.6)

decorative sheets Total Electronics Division Niigata plant, and NEC Electronics products JQA 2000. 4 investment: Toppan Circuit Solutions, (2002.10) 5.474 Inc. Niigata plant billion yen Commercial Printing Toppan Printing Books, magazines, JQA 2000.10 Division Communications Co., Ltd. catalogs (2002.12) Securities Printing Division Ranzan plant Credit cards, IC cards JQA 2000.11 Packaging Division Akihabara office/ Planning, development, JQA 2001. 3 Ebie office design, sales, prepress of packages Waste treatment and recycling: 14.2% Information & Itabashi plant/ Books, magazines JQA 2002. 2 Publications Division Toppan Seihon Co., Ltd. Packaging Division Fukusaki plant Soft packaging materials, JQA 2002. 7 Breakdown of Environmental paper cups, plastic Conservation Cost for Fiscal 2003 products Global environmental Upstream & Information & Toppan Graphic Co., Ltd. Books, magazines JQA 2002. 8 conservation: 5.3% downstream cost: 3.9% Publications Division Kawaguchi plant/Oji plant (2004.7) Research & Social activities: 0.1% Commercial Printing Takino plant Commercial printed JQA 2002.10 development: 6.5% Environmental damage Division/Securities materials, securities, remediation: 0.0% Printing Division/ paper containers for Packaging Division liquids Packaging Division Gunma plant Soft packaging materials JQA 2003. 7 Total: Securities Printing Asaka plant Securities, commercial JQA 2003.12 11.712 Division/Commercial printed materials, billion yen Printing Division/ electronics products Electronics Division Management Electronics Division Toppan Electronics Fuji Electronics products JQA 2004. 6 activities: Co., Ltd. 7.5% Waste treatment Registration date Pollution Group company Operational site Main product Registrar and recycling: (Revision date) prevention: 42.4% 34.3% Total Media Entire company Consulting for museums JSA 2001. 3 Development Institute and related facilities (2002.4) Co., Ltd. Calculation Standards for Environmental Toppan Forms Co., Ltd. Hino plant Business forms JQA 2001. 6 Accounting for Fiscal 2003 Toppan Label Co., Ltd. Fukushima plant Self-sealing labels JQA 2001.11 1. Reference guidelines Toppan Logistics Kawaguchi site Storage and JQA 2002.10 Ministry of the Environment Environmental Co., Ltd. transportation of products (2003.10) Accounting Guidelines (2002 version) Toppan Forms Co., Ltd. Fussa plant Business forms JQA 2004. 2 2. Calculation standards for environmental conservation cost Toppan Forms Co., Ltd. R&D Center R&D JQA 2004. 3 a) Investment: Based on the prices of the Toppan Containers Saitama plant/ Cardboard and JQA 2004. 4 environmental protection facilities obtained Co., Ltd. Miyagi plant cardboard boxes in fiscal 2002. b) Cost: Depreciation of environmental Registration Overseas subsidiary Main product Registrar protection facilities (according to ordinary date accounting), operational costs (including Siam Toppan Packaging Co., Ltd. Paper cartons and fine cardboard MASCI 2002. 4 electricity, fuel and repairs), and other Toppan Printing Co., (H. K.) Ltd. Books, magazines, commercial DNV 2002. 5 maintenance costs. printed matter c) Composite cost: For more detailed Toppan Printing Co. (America), Inc. Commercial printed matter DNV 2002.12 information related to environmental works, the percentage related to Toppan Chunghwa Electronics Co., Ltd. Electronics parts SGS 2003.10 environmental conservation is defined in Toppan Printing Co., (Shenzhen) Ltd. Books, paper containers, cards SSCC 2003.12 the in-house guidelines for aggregation. (26 systems/35 sites as of July 31, 2004) 3. Calculation standards for economic benefit The economic benefit (effect on business) is Number of Issues Highlighted under ISO 14001 (Fiscal 2003) based solely on the actual effect and does not Number of issues include surmised effects. Item Contents highlighted a) Energy-saving: energy savings (converted to annual amount) × unit price Minor nonconformance Partial conformance with the standard 14 b) Environmental business: sales of Point for observation Efforts may be required for full conformity with the environmentally-friendly products × profit standard 152 margin Excellent point Notable achievement through actions performed in 4. Calculation standards for environmental the field of environmental management 17 conservation effect Note: Excluding certain overseas subsidiaries and independent subsidiaries. The environmental conservation effect is a value calculated by comparing the amount of business activities quantified during a stable period (a period with average fluctuation in business) with the amount quantified during the targeted period.

85 Eco-protection Data

Energy Type Ratio and Consumption (excluding certain overseas subsidiaries and independent subsidiaries) Energy Used by Type for Fiscal 2003 (converted into heating values) Electricity Consumption City Gas Consumption (GWh) (1,000 m3) LPG 1% Light oil and gasoline 1,200 90,000 Less than 1% 1,091 82,307 A-grade heavy oil 2% 78,597 1,011 1,010 1,042 80,000 Kerosene 3% 1,000 71,201 70,000 61,088 800 60,000 50,000 600 40,000

400 30,000 20,000 200 City gas Electricity 10,000 22% 71% 0 0 2000 2001 2002 2003 2000 2001 2002 2003 (fiscal year) (fiscal year)

Kerosene Consumption A-grade Heavy Oil Consumption LPG Consumption (kR) (kR) (tons) 18,000 18,000 6,000 5,570 16,000 16,000 15,892 5,261 14,536 5,000 4,550 14,000 13,179 13,275 14,000 13,690 12,599 12,000 12,000 4,000 11,228 3,596 10,000 10,000 3,000 8,000 8,000 7,787 6,000 6,000 2,000 4,000 4,000 1,000 2,000 2,000 0 0 0 2000 2001 2002 2003 2000 2001 2002 2003 2000 2001 2002 2003 (fiscal year) (fiscal year) (fiscal year)

Managing Waste Plants Certified for Zero-emissions (certified in November of 2003) Total waste Total recycled Recycling ratio Plant generated (tons) waste (tons) (%) Fiscal 2002 Fiscal 2002 Fiscal 2002 Asaka plant (Commercial Printing) 12,562.9 12,426.1 98.91 Toppan Printing Communications Co., Ltd. 24,358.5 24,305.3 99.78 Kumamoto plant (Electronics) 17,531.1 17,236.7 98.32 Itabashi plant (Publications Printing) 18,593.2 18,361.4 98.75 Toppan Graphic Co., Ltd. 50,206.3 50,133.5 99.85 Toppan Seihon Co., Ltd. 32,823.1 32,688.9 99.59 Oji plant (Toppan Graphic Co., Ltd.) 3,806.0 3,793.6 99.67 Sano plant (Toppan Containers Co., Ltd.) 3,306.8 3,295.0 99.64 San-ei Shiki Ltd. 254.7 254.4 99.90 Sagamihara plant (Packaging) 23,306.6 22,908.4 98.29 Sodegaura beverage plant (Toppan Packaging 652.9 643.8 98.61 Service Co., Ltd.) Sagamihara plant (Toppan Plastics Co., Ltd.) 110.0 110.0 100.00 Oyodo plant (Osaka Toppan Display Co., Ltd.) 4,098.2 4,086.0 99.70 Itami plant (Packaging) 9,311.8 9,275.0 99.61 Kansai commercial printing plant (Takino site) 10,048.9 9,952.6 99.04 (Commercial Printing) Takino packaging plant (Packaging) 3,927.0 3,923.6 99.91 Fukuoka plant No. 2 (Nishinihon) 5,440.0 5,360.0 98.53

86 Data Report

Eco-protection Data

Prevention of Pollution and Management of Chemical Substances Summary of PRTR Investigation Results at Toppan Fiscal 2003 (unit: kg/year) Transferred Transferred Released PRTR No. Chemical substances amount in amount for amount 1. Atmosphere 2. Water 3. Soil sewerage system disposal 1 Zinc compounds (water-soluble) 11 0 11 0 0 1,792 16 2-aminoethanol 0 0 0 0 373 692 24 n-alkylbenzensulfonic acid and its salts 0 0 0 0 0 12,394 40 Ethylbenzene 60,377 60,377 0 0 0 13,174 43 Ethylene glycol 0 0 0 0 0 28 44 Ethylene glycol monoethyl ether 350 350 0 0 0 1,282 46 Ethylenediamine 0 0 0 0 0 1,104 63 Xylene 75,012 75,012 0 0 0 15,147 64 Silver and its water-soluble compounds 0 0 0 0 0 0 68 Chromium and chromium (III) compounds 49 0 49 0 6 20,183 69 Chromium (VI) compounds 0 0 0 0 5 4,914 108 Inorganic cyanide compounds 0 0 0 0 0 101 132 1,1-dichloro-1-fluoroethane (HCFC-141b) 17,378 17,378 0 0 0 4,448 145 Dichloromethane 18,090 18,090 0 0 0 4,658 172 N,N-dimethylformamide 0 0 0 0 0 31,000 179 Dioxins — (10.3 mg) (0.062 mg) — — (1,339.8 mg) 207 Copper salts (water-soluble) 338 0 338 0 288 305,563 224 1,3,5-trimethylbenzene 4,305 4,305 0 0 0 7,002 227 Toluene 3,295,938 3,295,938 0 0 218 1,878,396 230 Lead and its compounds 17 0 17 0 0 1,239 231 Nickel 0 0 0 0 0 80 232 Nickel compounds 85 0 85 0 0 806,084 254 Hydroquinone 57 57 0 0 1,641 12,159 270 Di-n-butyl phthalate 0 0 0 0 0 89 272 Bis (2-ethylhexyl) phthalate 0 0 0 0 0 1,207 304 Boron and its compounds 210 0 210 0 0 2,342 309 Poly (oxyethylene) = nonylphenyl ether 6,565 6,565 0 0 0 3,091 310 Formaldehyde 119 119 0 0 0 262 311 Manganese and its compounds 459 0 459 0 0 9,914 313 Maleic anhydride 0 0 0 0 0 0 Notes: *Period of computation: April 1, 2003 to March 31, 2004. *Subjects of notification: 30 substances above. *Operational sites covered: Operational sites that handle 1.0 t/year or more of specified class I designated chemical substances annually (and 0.5 t/year or more of class I designated chemical substances). Excluding certain overseas subsidiaries and independent subsidiaries. *The amount transported out from the operational sites as wastes (including inverse onerous contract and charge-free recycling) is accounted for as a transferred amount for disposal.

Atmospheric Emissions (excluding certain overseas subsidiaries and independent subsidiaries) Ratio of Greenhouse Gases Breakdown of Greenhouse Gas NOx and SOx Emissions (unit: ratio: % total: t-CO2) Emissions by Source NOx SOx (tons) (unit: ratio: % total: t-CO2) 300 Fiscal CO2 CH4 N2O Total Fiscal Electricity Fuel Waste year Total year use use incineration 250 237 244 243 2000 99.89 0.00 0.11 641,227 201 2000 60 35 5 641,227 200 2001 99.89 0.00 0.11 652,256 2001 59 36 5 652,256 2002 99.90 0.00 0.10 668,964 150 2002 59 36 5 668,964 2003 99.91 0.00 0.09 682,959 2003 60 35 5 682,959 100 Note: Ratio by CO2 conversion 76 Note: Ratio by CO2 conversion 68 59 50 45

0 2000 2001 2002 2003 (fiscal year)

87 Input/Output Data by Site INPUT Asaka Site Sapporo Sendai Gunma TPC*1 Ranzan plants Sapporo City, Sendai City, Ora County, Sakado City, Hiki County, Niiza City, Location Overall Hokkaido Miyagi Gunma Saitama Saitama Saitama Securities, Catalogs, Books, Main product Catalogs Packaging Securities catalogs, packaging catalogs electronic parts

Total energy consumption (1,000 GJ) 18,423 94 194 687 864 157 1,098

Energy Electric energy (1,000 GJ) 13,544 69 139 500 558 90 858

Fossil fuel energy (1,000 GJ) 4,879 25 55 187 306 67 240

Water consumption (1,000 m3) 14,698 14 37 559 169 38 782

Industrial-use water (1,000 m3) 1,418 — 11 243 — — —

Municipal water (1,000 m3) 3,145 7 26 108 169 38 26 Water Groundwater (1,000 m3) 10,135 7 — 208 — — 756

(Utilization of rainwater) (1,000 m3) 15 — — — — 2 —

(Utilization of water circulated on 787 — — 34 — — — premises) (1,000 m3)

OUTPUT

CO2 emission (t-CO2) 853,359 3,943 8,174 45,373 37,133 7,458 45,525

Emission of substances destructive 5 — 0 0 0 0 1 to the ozone layer (ODP-t)

Atmosphere NOx emission (tons) 224 1 2 25 8 11 17

SOx emission (tons) 67 0 — 7 — 0 0

Emission of dioxins (g-TEQ) 0.013 — — 0.002 — — 0.002

Total water discharge (1,000 m3) 12,011 10 27 463 66 17 543

Public water system (1,000 m3) 8,721 — — 463 — — 7

Sewage system (1,000 m3) 3,290 10 27 — 66 17 536

Underground penetration (1,000 m3) 62 — — — — — 16 Water system On-site evaporation (1,000 m3) 2,099 3 9 95 103 23 224 and soil BOD discharge (tons) 245 — 2 5 10 — 50

COD discharge (tons) 125 — — — — — —

Nitrogen discharge (tons) 44 — — 8 — — 11

Phosphorous discharge (tons) 3 — — 0 — — 1

Waste discharge (tons) 464,038 2,440 3,883 6,186 25,254 446 16,187

Waste Recycling (tons) 449,304 2,428 3,370 5,687 25,253 320 16,093

Final waste landfill (tons) 14,734 12 513 499 0 126 94

*1 TPC: Toppan Printing Communications Co., Ltd. *2 On April 1, 2004, the Itabashi plant became Toppan Printing Itabashi Co., Ltd. Note: Items marked “—” are not covered under the laws and ordinances governing the site. A zero indicates a negligible measured value (close to zero). Fifteen major sites in Japan are included.

88 Data Report

Eco-protection Data

Takino Fukuoka Satte Kashiwa Itabashi*2 Nagoya Shiga Fukusaki Kumamoto plants No. 1 Satte City, Kashiwa City, Itabashi Nagoya City, Yokaichi City, Kanzaki Kato County, Koga City, Tamana City, Saitama Chiba Ward, Tokyo Aichi Shiga County, Hyogo Hyogo Fukuoka Kumamoto Others 75 sites Decorative Securities, Wallpaper, papers for Electronic Electronic Books Catalogs Packaging catalogs, Packaging optical parts building parts parts interiors packaging

465 493 1,145 162 1,086 536 524 338 689 9,891

282 232 485 118 941 497 430 165 550 7,630

183 261 660 44 145 39 94 173 139 2,261

98 223 405 80 1,930 148 47 72 1,875 8,221

— — 338 — — 130 — — — 696

98 21 67 — 27 18 47 16 — 2,477

— 202 — 80 1,903 — — 56 1,875 5,048

— — — — — — — — — 13

— — — — 341 — — — — 413

20,797 23,599 52,506 7,133 46,058 36,948 22,394 15,247 30,487 450,584

— — 1 — — 0 0 — — 3

7 6 34 1 9 13 4 6 2 78

0 2 — 0 0 3 0 0 17 38

— — — 0.005 — 0.001 — — — 0.003

37 147 342 72 1,567 125 28 57 1,833 6,677

37 110 — 72 1,567 125 4 31 1,833 4,472

— 37 342 — — — 24 26 — 2,205

— — — — — — — 0 — 46

61 76 63 8 363 23 15 15 42 976

0 3 46 1 10 1 — — 8 109

0 — — 2 13 1 — — — 109

0 1 — 1 5 — — — 11 7

0 0 — 0 0 — — — 0 2

4,767 4,011 18,096 4,164 8,549 6,208 15,721 4,858 17,620 325,649

4,222 3,605 18,085 4,137 6,709 5,093 15,615 3,777 17,410 317,500

545 406 11 27 1,840 1,115 106 1,081 210 8,150

89 Eco-creativity Data/Environmental Communication Data

Development of Environmentally-friendly Products List of Environmentally-friendly Products (as of end of March 2004)

Business Toppan’s environmentally- Business Toppan’s environmentally- Main environmental claims Main environmental claims field friendly product field friendly product

Securities Ecothrough Card Suitability for disposal Packaging TT Paper Can Easy separation and Printing Paper IC Card Use of recycled materials disassembly BE Card Biodegradability Neovert Use of recycled materials Eco Holosticker Biodegradability Ecotainer Resource-saving (reduced use of exhaustible resources) Bulky Waste Processing Sticker Resource-saving (reduced amount of materials used) TL-PAK Resource-saving (reduced use of exhaustible resources) Recycleco Gift Card Use of recycled materials EP-PAK (EP-GL) Resource-saving (reduced Card for ETC Suitability for disposal energy usage in logistics) Hanshin Expressway Public Use of recycled materials EP-PAK (Al) Resource-saving (reduced Corporation Mutlipass energy usage in logistics) Rewritable Paper Long-life products Stand up Laminated Tube Resource-saving (reduced Commercial Toppan Green Paper 100 Use of recycled materials amount of materials used) Printing Toppan Green Paper Bagasu Use of recycled materials Recyclen Cap Easy separation and Eco Pack (life-size POP display) Resource-saving (reduced disassembly amount of materials used) AP Cartons Resource-saving (reduced Aiba Environmentally-friendly Reusability energy usage in logistics) Exhibit System Micro-Flute Resource-saving (reduced Paper Desk Calendar Use of recycled materials energy usage in logistics) Ecology Calendar Use of recycled materials TP-Tray Recyclability Eco POP Use of recycled materials, Corrugated Absorber Recyclability Suitability for disposal, AD-Case Resource-saving (reduced Energy-saving amount of materials used) Eco Pack Stand Resource-saving Cartocan Recyclability Eco Pack Multipanel Reusability Paper Cup made from recycled Use of recycled materials Eco Floor Sticker Suitability for disposal paper Cerap Suitability for disposal Cup made from Tree Free Resource-saving (use of paper by-products) Eco Pack End Panel Resource-saving Biodegradable Package Biodegradability Eco Pack Stand, Round-type Resource-saving Cylindrical Paper Containers Resource-saving (reduced Publications Recycled Vegetable-Oil Ink Use of recycled materials energy usage in logistics) Printing Polyurethane Reactive-Hot Easy separation and Coated Barrier Film Suitability for disposal Melt disassembly GL-C Bottle Resource-saving Non-Vinyl Chloride Lenticular Suitability for disposal Lens GX Film Resource-saving Electronics Low-halogen Printed–wiring Suitability for disposal Jar Plus Resource-saving board Tray All Easy separation and Interior Toppan Ecowall Reduced release of chemical disassembly Decor substances Gl Film Lined Paper Cup Resource-saving Materials Toppan Ecofoil Reduced release of chemical Double-Wall Barrier Cup Resource-saving substances Oil-Proof Paper Use of safe materials, Functional Ecofoil (Airfeel, Suitability for disposal Suitability for disposal Mirrafeel, Purefeel) Functional Coated Paper Recyclability NaturArt Reduced release of chemical In-Mold Barrier Cup Resource-saving substances Tamper Evident Recyclen Cap Easy separation and Coordination Floor Reduced release of chemical disassembly substances, Long-life products Optronics Lenticular Screen Resource-saving, Use of safe PURE ALL Use of safe materials, materials Suitability for disposal Antireflection Film Resource-saving Packaging GL Family Suitability for disposal Standing Pouch for Refill Resource-saving (reduced amount of materials used) Bottled Pouch Resource-saving (reduced amount of materials used) Thin-Wall Bottle Resource-saving (reduced amount of materials used) Plastic Container made from Use of recycled materials Recycled Materials Ecogloss (environmentally Resource-saving (reduced use friendly gloss finishing) of exhaustible resources), Use of recycled materials Recording Media Packaging Resource-saving (reduced use of exhaustible resources)

90 Data Report

Eco-creativity Data/Environmental Communication Data

Experimental LIME Data Ecofoil Outside Cost Comparison by Process Vinyl Sheet Outside Cost Comparison by Process Material production 55% Incineration 38% Landfill disposal Material production Material production 40% 32% 8% Landfill disposal Material production 34% 51% Assembly 3%

Landfill Landfill Incineration Incineration disposal disposal

Waste Waste product product transport transport 2% Assembly 7% 3% Assembly Product transport 2% 22% Product Product transport 2% Assembly 7% Waste product transport 2% transport 3% Incineration 89%

Environmental Communication Prizewinning Slogans in Fiscal 2004 Main Awards Received for Toppan’s Environmental No. 1 Slogan Conservation Activities Awards “Save energy your way. Cool down Seiji Yanagisawa (Securities the overheated Earth” Printing Division) July 1991 Minister of International Trade and Industry’s Award for Plants Outstanding Slogans Distinguished in Greening Activities—Fukusaki plant “Foster an environmental culture. Hiroshi Ueno (Toppan Containers February Director’s Award, Kanto Bureau of International Trade and Leave a pleasant Earth for the future” Co., Ltd.) 1992 Industry for Plants Distinguished in Energy Management— Itabashi plant “Making products means making the Yasumitsu Araki (Information & environment: An Eco company that Publications) February Encouragement Award, Saitama Prefecture Global supports the Earth” 1995 Environmental Awards—Toppan Graphic Co., Ltd. Exemplary Slogans April 1996 Fuji Sankei Group Award, the 5th Global Environment Awards “Recycle more. Keep the Earth Nobuaki Nishioka (Packaging February The Highest Award, Chairman’s Awards, Committee on the natural for the future” Division, Kansai Division) 1999 Rationalization of Energy Consumption in the Kanto Region— Toppan head office, Akihabara “Understanding is not enough. Hiroaki Toyama (Kansai Compliance with environmental rules Commercial Printing Sub-division) December The Excellence Award at the 5th Environmental Report Awards produces new value” 2001 2001 “Each person who makes an Minoru Hatano (Toppan Hokkaido March Kanagawa Prefecture Pollution Prevention Service Award environmental improvement is a Insatsukako Co., Ltd.) 2003 (Sagamihara plant) champion of the Earth” May 2004 Excellence Award at the 7th Environmental Report Awards “A will to protect the environment Kazuki Yoshino (Packaging and the knowledge to nurture it: Division, Manufacturing and A little effort goes a long way” Technology Division) Toppan’s Participation in Environment-related Organizations “Conserve electricity, save energy, Taichi Sato (NEC Toppan Circuit Organization Organization and recycle: It all goes together. Solutions, Inc.) Green Marketing Association Network for Sustainability One day, one ecology.” WWF (the World Wide Fund for Communication Nature) Japan Collect-and-Use Recycling President’s Awards (Ecology Awards) Nikkei BP Eco Management Forum Association Green Purchasing Network Environmental Management and Fiscal year Title Communication Study Group UNU Zero Emissions Forum 1999 IThe planning, creation, production, and sales of Toppan Special Project on Eco-Efficiency brand paper TOPPAN GREEN PAPER 100 Global Reporting Initiative Forum and Eco-Design IIntroduction of environmental accounting and publishing of Japan Japan for Sustainability Environmental Report Society for Chemical Risk 2000 IEnhancement of the company’s environmental brand image Japan LCA Forum through the holding of the environmental communication exhibition IDevelopment of environmentally-friendly Ecogloss products Number of Environmental Reports Published (copies) ILowering costs through the introduction of solid fuel Fiscal 1999 2000 2001 2002 2003 2004 production (RPF) year (planned) IIntroduction and stable operation of new wastewater Japanese 20,000 20,000 20,000 15,000 15,000 15,000 processing system during the move of Toppan Gravure English — 2,000 5,000 3,000 3,000 3,000 Prepress Co., Ltd. Note: Became the CSR Report from 2004. 2001 IEnhancement of environmental management through the publication of Environmental Report 2001 2002 IIntroduction of an environmentally-friendly gravure printing Number of Site Reports Published (operational sites) system at the Matsuzaka plant 2004 IEnhancement of the company’s environmental brand image Fiscal year 2000 2001 2002 2003 (planned) by the acquisition of the printing industry’s first Chain of 2 5 7 9 12 Custody (CoC) certification from the Forest Stewardship Council (FSC) 2003 INo awards presented

91 GRI Guidelines Reference Index

Vision and Strategy Economic Performance Indicators Social Performance Indicators 1.1. P. 2–3 Core Indicators Additional Indicators Core Indicators Additional Indicators 1.2. P. 2–3 Customers Employment EC1. P. 80 LA1. P. 80 LA12. P. 39–40, 81 Profile EC2. — LA2. P. 80 2.1. P. 78 Suppliers Labor/Management Relations 2.2. P. 4, 6–7 EC3. P. 29 EC11. — LA3. P. 39 LA13. — 2.3. — EC4. — LA4. — 2.4. P. 78 Employees Health and Safety 2.5. P. 78–79 EC5. — LA5. P. 40, 81 LA14. — 2.6. P. 8 Providers of Capital LA6. P. 40 LA15. P. 40, 81 2.7. P. 6–7 EC6. — LA7. P. 81 2.8. P. 78–80 EC7. — LA8. — 2.9. P. 7 Public Sector Training and Education 2.10. P. 1 EC8. — EC12. — LA9. P. 80 LA16. P. 38–39, 80 2.11. — EC9. — LA17. P. 38–39, 80 2.12. — EC10. — Diversity and Opportunity 2.13. P. 79 Indirect Economic Impacts LA10. P. 36–39, 80–81 2.14. — EC13. — LA11. P. 80 2.15. — Human Rights: Strategy and Management 2.16. — Environmental Performance Indicators HR1. P. 5, 24–25, 81 HR8. P. 5, 24–25, 36–38 2.17. P. 1 Core Indicators Additional Indicators HR2. P. 28–29 2.18. P. 1, 85 Materials HR3. P. 28–29 2.19. — EN1. — Non-discrimination 2.20. P. 1 EN2. P. 60, 62 HR4. P. 5, 24–25, 81 2.21. P. 1 Energy Freedom of Association and Collective Bargaining 2.22. P. 1 EN3. P. 48–49, 59, 86, 88–89 EN17. P. 59–63 HR5. P. 39 EN4. — EN18. — Child Labor Governance Structure and EN19. — HR6. — Management Systems Water Forced and Compulsory Labor 3.1. P. 8 EN5. P. 48–49, 88–89 EN20. — HR7. — 3.2. P. 8 EN21. — Disciplinary Practices 3.3. P. 55 EN22. P. 48, 62 HR9. — 3.4. P. 8–10 Biodiversity HR10. P. 25 3.5. — EN6. — EN23. — Security Practices 3.6. P. 8, 55 EN7. — EN24 — HR11. — 3.7. P. 2–5, 24, 50 EN25. — Indigenous Rights 3.8. — EN26. — HR12. — 3.9. P. 7 EN27. — HR13. — 3.10. — EN28. — HR14. — 3.11. — EN29. — Community 3.12. — Emissions, Effluents, and Waste SO1. P. 56, 72 SO4. P. 14–15, 91 3.13. P. 10, 24–29, 56–57 EN8. P. 16, 48–49, 59, 63, 86, 88–89 EN30. P. 16, 48–49, 59, 63, 86, 88–89 Bribery and Corruption 3.14. — EN9. P. 16, 48–49, 59, 63, 86, 88–89 SO2. P. 5, 24–25, 28–29 3.15. P. 43, 67, 73, 91 EN10. P. 16, 48–49, 59, 63, 86, 88–89 Political Contributions 3.16. P. 28–29, 82 EN11. P. 48–49, 60, 88–89 EN31. — SO3. P. 24 SO5. — 3.17. — EN12. P. 48–49, 88–89 EN32. — Competition and Pricing 3.18. — EN13. — SO6. — 3.19. P. 25, 36–37, 54, 56, 58, 64 Suppliers SO7. P. 24, 28–29 3.20. P. 27, 31, 56, 80–81, 85 EN33. — Customer Health and Safety Products and Services PR1. P. 30–31 PR4. — EN14. P. 66–67 PR5. — EN15. — PR6. P. 27, 64–67, 71–73, 82, 90 Compliance Products and Services EN16. P. 84 PR2. — PR7. — Transport PR8. P. 30–31 EN34. P. 63 Advertising Overall PR9. — EN35. P. 53, 85 PR10. — Respect for Privacy PR3. P. 26–27, 82 PR11. —

Note: The above reference index indicates pages containing information relating to required items under the GRI guidelines. These references are not to be construed as guarantee that the information is based on the guidelines.

92 CSR Report 2004 Questionnaire on the CSR Report 2004

Thank you for reading Toppan’s CSR Report 2004. We would appreciate it if you could answer the following questions and fax the completed questionnaire to the number below. All feedback received will be helpful in the production of the next CSR Report.

Compliance Department, Legal Affairs Division, Toppan Printing Co., Ltd. FAX +81-3-3835-1447

Q1. What did you think about the readability of the CSR Report? Toppan’s stance on social responsibility Easy to understand Average Hard to understand Very hard to understand Descriptions of Toppan’s activities Easy to understand Average Hard to understand Very hard to understand

Q2. What was your impression of the contents of the report? Very comprehensive Comprehensive Somewhat inadequate Completely inadequate

Q3. Which of the following topics in the CSR Report made a strong impression? (Please circle all that apply.) 1. Executive Message 2. Business Activities and Social Responsibility 3. Topics 2003 4. Roundtable Discussion: 5. Compliance 6. Improving Customer Satisfaction What We Expect from CSR 7. Respecting and Leveraging Human Assets 8. Activities for Society and Culture 9. Toppan’s Environmental Vision 10. Environmental Management Activities 11. Eco-protection Activities 12. Eco-creativity Activities 13. Environmental Communication Activities 14. Other ( )

Q4. How do you rate Toppan’s social responsibility efforts? Please tell us the reason for your rating. Excellent Good Average Mediocre Poor Reason(s):

Q5. Please let us know what other kinds of information you would like to see in this report. Do you have any other ideas on ways to improve the report?

Q6. From what perspective did you read this CSR Report? As a CSR specialist As a corporate employee in charge of CSR activities As a civil servant in public administration As a shareholder or investor As a student As a journalist As a resident living near Toppan facility As a member of an environmental NPO, etc. Other ( )

Q7. How did you first learn about this CSR Report? Toppan’s website Newspaper Magazine Toppan sales representative Friend or acquaintance Other ( )

Q8. Did you have any other impressions or opinions about this report? Please let us know.

Thank you very much for your cooperation. Please tell us about yourself. Name Address

Gender Age Telephone number E-mail address Male Female Occupation/Company name Dept./Title