CSR Report 2013 Digest

Creed

1. We strongly believe that the customer comes first and that we are obligated to be an innovative partner to society. 2. We base our activities on honesty, harmony, and a clear distinction between public and private life. 3. We shall strive for innovative management and technological development from an international perspective.

Reason for Instituting the Creed (Issued June 1, 1970)

In Japan there are many enterprises with their own “creeds” company, the mental attitude of employees, and the future which simply represent their management concept. directions of the company. Mitsubishi Heavy Industries, Ltd. has a creed of this The reason for instituting the present creed is so that all type, also. It was instituted in 1970 on the basis of the policy of us can call to mind our one hundred years of tradition and advocated by Koyata Iwasaki, president of Mitsubishi Goshi strive for further development in the future. Kaisha in the 1920s, to indicate the essential attitude of the

Editorial Policy

MHI uses its website for the comprehensive disclosure of Scope of this Report information related to the MHI Group’s CSR initiatives. MHI Target organization: also produces a CSR Report digest version (brochure) to The information contained in this report pertains to Mitsubishi succinctly convey the activities that are the target of great Heavy Industries, Ltd. and its Group companies (110 in Japan interest from society and are also highly important to MHI. and 126 overseas). Some articles, however, only include de- In 2013, with a greater awareness of dialogues with our scriptions of MHI’s activities. stakeholders, we have included an interview of our president conducted by an outside expert, and dialogues with outside Target period: experts on human rights issues. The brochure is kept concise From April 1, 2012 to March 31, 2013 for ease of reading, while the website includes more detailed (includes information on some activities after March 31, 2013) information to offer a greater understanding of matters introduced. In addition, MHI reports on its representative efforts Guidelines and Other Reference Material with the aim of resolving issues on a global scale through a • Global Reporting Initiative (GRI) wide range of business ﬁelds such as Energy & Environment, “Sustainability Reporting Guidelines (G3.1 version)” Transportation, and Aerospace. • Japanese Ministry of the Environment “Environmental Reporting Our website contains detailed information — focusing Guidelines (2012 edition)” on “Management,” the “Environmental Report,” and the • ISO 26000 “Social Contributions Report” — that is not included in the NOTE: A “Guideline Comparison List” will be posted on our website. brochure. In the future we will continue to improve these reports in response to your feedback. Date of Issuance June 2013 (previous issue: June 2012) Structure of CSR information disclosure Recent efforts are included under “CSR” on the MHI website.

High MHI CSR activity reports

Detailed version (website)

Disclaimer In addition to objective information on the past and present status of Digest version (brochure) Mitsubishi Heavy Industries, Ltd. and its Group companies, this report also URL contains plans, perspectives and forecasts based on business plans and

Stakeholder interest http://www.mhi.co.jp/en/csr/ other materials. These forecasts are made using information available at the time of publication and therefore the actual outcome of future business activities may differ from these forecasts. Importance for MHI High

1 Mitsubishi Heavy Industries, Ltd. MHI Social and Environmental Report Digest Corporate Social Responsibility Report 2013

CONTENTS

page Commitment by Management — Interview with the President 3 Leveraging our comprehensive strengths in manufacturing to help realize a sustainable society

What should MHI do to help realize a sustainable society through manufacturing? Mayumi Matsumoto—former newscaster and guest associate professor of the College of Arts and Sciences at The University of Tokyo, currently active as an expert in the energy and environment field—interviews President and CEO Shunichi Miyanaga.

page 5 CSR of the MHI Group

page 7 Feature Towards an Assured Future for Mankind and Earth page Large-Scale Offshore Wind Power page MEGANINJA: A Solution to Energy Demands 9 Generation: One Solution to Energy Issues 11 for Distributed Power Generation Systems

page Delivering New Urban Transportation Systems that Are page Contributing to International Space Activities 13 Safer, More Comfortable, and Friendlier to the Environment 15 by Enhancing Launch Capability and Reliability

©JAXA

page page Employees Introduce Our CSR Activities 17 Stakeholder Dialogue 19 MHI will strive to identify adverse human rights impacts of our business activities and take appropriate steps to respect human rights MHI held a stakeholder dialogue on human rights issues with Makoto Teranaka and Hiroshi Ishida, two experts who are also members of the Nippon CSR Consortium page Highlights of CSR Activities in FY2012 21 page CSR Medium-Term Action Plan and 23 Results of Promotion page 29 Company Profile page Third-Party Opinions / 30 Acting on Valuable Opinions

CSR Report 2013 2 Commitment by Management — Interview with the President

Shunichi Miyanaga Mayumi Matsumoto President and CEO, Visiting Assistant Professor, Special Division Mitsubishi Heavy Industries, Ltd. for Energy and Environmental Sciences, Komaba Organization for Educational Excellence (KOMEX), College of Arts and Sciences, The University of Tokyo Leveraging our comprehensive strengths in manufacturing to help realize a sustainable society

This approach is reflected in our Miyanaga: Yes. In today’s world, as Promote CSR aligned to corporate identity statement, “Our economies grow in newly developing management strategy Technologies, Your Tomorrow.” countries and populations increase, At the same time, we want to problems stemming from energy and increase earnings in each of MHI’s resource depletion, environmental Matsumoto: To begin, could you tell businesses in order that our diverse degradation, and food and water us about MHI’s basic approach stakeholders — particularly customers, shortages are rising. Consequently, to CSR? shareholders, business partners, and there are urgent needs throughout Miyanaga: Our most important social employees — also benefit to the fullest many regions of the world to responsibility is to provide a wide extent possible. provide for various industrial and range of products benefiting social Matsumoto: So, for MHI, business social infrastructures, starting with and industrial infrastructures in ways strategies and CSR are integrally lifeline utilities. that help create a sustainable society. related? To effectively respond to these global-scale issues, we reorganized the MHI Group’s businesses into four business domains: “Energy & Environ- Profile ment,” “Commercial Aviation & Trans- Born in Fukuoka Prefecture, Japan, on April portation Systems,” “Integrated 27, 1948. Graduated from the University of Defense & Space Systems,” “Machin- Tokyo Faculty of Law and joined MHI in 1972. Appointed President of MHI-HITACHI Metals ery, Equipment & Infrastructure.” By Machinery, Inc. in 2000 (renamed Mitsubishi- Hitachi Metals Machinery, Inc. in 2002). capitalizing on the synergies of these Appointed as Member of the Board and business domains and leveraging our Executive Vice President of MHI, as well as Head of Machinery & Steel Structures comprehensive strengths in advanced Headquarters in 2008. Served as Member of manufacturing, or monozukuri, we the Board, Senior Executive Vice President and Head of the Presidential Administration intend to help realize a sustain- Office from 2011. Appointed President and CEO on April 1, 2013. able society. That is the mission of the MHI Group.

3 Mitsubishi Heavy Industries, Ltd. For more detailed information regarding the Interview with the President, please refer to the MHI website. http://www.mhi.co.jp/en/csr/csrreport/message.html

Commitment essential to promoting CSR in Profile Born in Kumamoto Prefecture, Japan, Mayumi communities around Matsumoto graduated from the Faculty of the world Foreign Studies at Sophia University. After graduating, she worked as a newscaster for TV Asahi and contributed numerous features as a Matsumoto: Could you give some reporter. From there, she joined the Japan examples of how CSR has been Broadcasting Corporation’s NHK BS 1 channel as a newscaster and was in charge of connected to business activities? its World News programs for six years. Matsumoto is active in environment- and Miyanaga: As one example, MHI has energy-related NPOs and joined the University of Tokyo’s Research Center for Advanced been a participant in the United Science and Technology as a specially Nations Global Compact since 2004 appointed researcher in May 2009. Her current position commenced in April 2013. and abides by its 10 principles across the four areas of human rights, labor, the environment and anti-corruption. In addition, MHI began incorporating these rules and guidelines, I empha- capabilities are indispensable. the seven core subjects of ISO 26000 size that compliance ultimately Previous accidents at nuclear in its business plans from fiscal 2012. leads to a happier society. Hence power plants stemmed from individu- Matsumoto: What aspects of those company-wide compliance is essen- ally unique factors, and the industry initiatives are especially important in tial in promoting CSR. has learned from past mistakes. your view? International observers are calling on Miyanaga: Safety and quality are the MHI’s aspirations for Japan to improve its nuclear power most important considerations from energy and environment capabilities by learning from the the standpoint of a manufacturing endeavors accident in Fukushima, and I hope company. They form the starting that MHI can help the country meet points for all MHI operations, particu- Matsumoto: I would like to ask you these expectations. Incidentally, MHI larly in design and manufacturing a few questions regarding MHI’s is involved in the International stages. Accordingly, we place great business activities in the energy and Thermonuclear Experimental Reactor importance on employee training and environment field, which is my area of (ITER) project, which is conducting in the handing down to the next research. Firstly, what is your objective research on nuclear fusion. generation of workers lessons learned for integrating MHI’s thermal power At MHI, our mission is to contrib- from serious incidents in the past. I generation systems with Hitachi, Ltd.? ute to ensuring a stable supply of believe that the most valuable way of Miyanaga: With the growing world- power and the sustainable develop- supporting society is to continuously wide demand for energy, combining ment of society. Therefore, we are refine technologies with a dedication forces with Hitachi, which has a long committed to improving nuclear to ensuring public safety and security. track record in this industry, will safety and developing better Matsumoto: As a global company, enable us to create an even better technologies. MHI has business partners all around business by complementing our Matsumoto: Finally, what are your the world. I would assume that this respective fields of expertise. visions for MHI’s energy and environ- results in new challenges for CSR. Ultimately, our aim is to become a ment business endeavors in the future? Miyanaga: That’s exactly right. The world-leading company. Miyanaga: I want to make the most number of our overseas business Matsumoto: I understand. And what of the technologies, products and partners has increased in line with our is your view on nuclear power, given the expertise in our energy and environ- growing global procurement activities. critical nature of public opinion today? ment businesses as well as our We expanded the scope of the Supply Miyanaga: I believe that nuclear thermal power generation systems, Chain CSR Promotion Guidelines power is a necessary source of with the goal of creating “smart originally established in 2010 to encom- electricity over the long term because communities” that comprehensively pass our new partners and requested it generates power efficiently and manage the energy and environmen- all to adhere to our regulations covering stably. In a country with an advanced tal operations of entire cities. By compliance, human rights and labor industrial base, an efficient and stable pursuing this goal, we will help solve practices in line with our growing global supply of electricity is essential, and social issues through business, procurement activities. We plan to from that perspective, nuclear power products and technologies. carry out initiatives covering CSR procurement in the future. In addition, we introduced Guide- lines for the Prevention of Bribery Involving Foreign Civil Servants in 2005, recognizing the need to ensure that no bribes or other irregular trans- actions occur in social infrastructure- related operations, as many of our overseas customers are governmen- tal bodies. Likewise, we have stepped up efforts to fight corruption, creating Anti-Bribery Rules and Procedural Guidelines in 2012. Integrated coal Gasiﬁcation Combined Cycle (IGCC) plants When justifying the importance of make signiﬁcant contributions to securing stable supply of energy

CSR Report 2013 4 CSR of the MHI Group

MHI Group CSR Action Guidelines (formulated July 2007)

In order to ensure a secure future for the Earth, we will establish and maintain: Close ties with the Earth Safeguard an abundantly green Earth through environmental technologies and environmental awareness; Close ties with Society Build a relationship of trust with society through proactive participation in society and trustworthy actions; A bridge to the next Generation Contribute to the cultivation of human resources who can shoulder responsibility in the next generation through technologies that can realize dreams.

Promoting CSR through resolution of global issues. statement, “Our Technologies, Your manufacturing as Furthermore, MHI believes the Tomorrow,” the MHI Group has also an innovative contributor basis of corporate social responsibility instituted CSR Action Guidelines to to society (CSR) is to engage in business activi- serve as collective standards for all In accordance with the three principles ties that take its diverse range of Group employees when conducting that define the spirit of our creed, the stakeholders into consideration and business activities centered on the MHI Group serves as a manufacturing return profits to all stakeholders in principles of CSR. corporation that contributes to societal optimum fashion, while at the same progress through its business endeav- time providing excellent products and Promoting more ors of delivering products and technologies to realize a sustainable business-integrated CSR technologies in support of social and society and a secure future for people In October 2006, the company set up industrial infrastructure worldwide. In and the planet. the CSR Committee, chaired by the this way MHI is contributing to the Based on our creed and CI President, and the CSR Department, which reports directly to the President, in order to strengthen CSR-oriented management. Following further MHI Group involvement with society organizational reforms in April 2011, in October 2012 these functions were moved to the Corporate Communica- MHI Group tion Department of the Presidential Production Activities Administration Office in order to Dividends, share price, Labor consolidate CSR, public relations, Shareholders, interest Retained earnings advertising, IR, and other stakeholder Investors and (capital investment, Value Financial R&D investment, Customers communication functions and thus Capital Profit allocation, Expansion of customer Institutions risk countermeasures) sense of achievement benefit through product promote more business-integrated through valuation differentiation CSR activities. Business-integrated Materials Sales functions Employees CSR activities are those that not only Profit allocation Profit allocation use products and technologies to contribute to the resolution of environ- Business Offices Sales mental and other social issues but Partners Companies (Suppliers) Job creation, also prevent or reduce negative minimization of environmental load, local Tax payment, contributions provision of products supporting Legal compliance the world’s infrastructure as well as ecological, economic and Laws Local Communities energy needs and ReRegulationsgulations Japanese Society

Global Society The 13th Session of the CSR Committee, December 2012

5 Mitsubishi Heavy Industries, Ltd. impact and increase positive impact of 10,812 people have now received they were commenced. Each year, on society via efforts to address social the sessions. employees’ understanding of CSR is issues in all business processes. CSR sessions consist primarily of improving as a result of improvements The CSR Committee, which holds lectures and group discussions. in areas of poor performance and sessions twice yearly, sets policies for Lectures are designed to provide a efforts made in the continuation and tackling social issues and also sets basic introduction to CSR, present the development of activities. and focuses on six themes regarding latest trends in CSR on a global level, important activity initiatives in areas and explain initiatives taking place in such as the globalization of CSR the MHI Group. Group discussions activities and Funds for Community encourage employees to approach Engagement. their day-to-day work from a social Going forward, we will work to responsibility perspective. build a more effective organizational To clarify the issues of CSR activi- framework and further promote CSR ties and ascertain employees’ under- activities through their integration with standing of CSR, a survey was business management. conducted based on the CSR Action Guidelines of employees who have CSR sessions at Kobe Shipyard & Sustained promotion of PDCA participated in CSR sessions since Machinery Works based on the CSR Action Plan The CSR Committee set the CSR Action Plan for fiscal 2008 to 2010 and strove to embed CSR efforts in company by following a PDCA (plan– do–check–action) cycle. In fiscal 2011, the committee formulated a new CSR Action Plan (for fiscal 2011 to 2013) and MHI Environmental Vision 2030 supported activities in six priority Our Technologies, Your Tomorrow areas: CSR promotion, compliance, the environment, human rights/labor, product responsibility, and risk The future of our planet rests management. However, in fiscal 2012 the CSR Action Plan framework was in the sustained evolution of humankind while caring, revised and these areas reorganized with love and responsibility, for all life forms that inhabit it. to match the seven core subjects of MHI will continue to be a company indispensable to ISO 26000: organizational gover- ensuring that future. nance, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development. This global standard was Sustainability adopted with the intention of introducing the perspective of the international community. Going forward, through stakeholder dialogue and the collection of feedback, we hope to identify the types and relative seriousness of social issues the MHI Group should tackle and revise our activities to reflect those findings. The MHI Group will pursue Cultivating CSR awareness energy security while carrying forward environmental protection through CSR sessions — not only of the earth but of space also — CSR sessions aimed at deepen- through its ability to develop new technologies and products, ing employees’ awareness of CSR to achieve a secure future that is kind to the earth. were held successfully at 12 sites and at a number of Group companies in fiscal 2012 and 657 people participated. CSR sessions for new employees were held at all works, including The MHI Group formulated the MHI Environmental Vision 2030 in the Head Office, and 655 people June 2012, and promotes activities with an aim of achieving the 3Es participated in fiscal 2012. CSR (energy security, environmental protection and economic growth) sessions and CSR sessions for new through business. employees have been taking place for six years since fiscal 2007 and a total

CSR Report 2013 6 Feature Towards an Assured Future for Mankind and Earth

Large-Scale Power Generation through Efﬁcient Conversion Immediate Power Generation in Response to of Sea Winds Regional Power Demands Large-Scale Container-Conﬁgured Offshore Wind Power Generation Power Generation System MEGANINJA

P9 P11

Global expectations for offshore wind power This mobile power plant provides generation are rising. MHI responds to the a distributed energy supply to challenges and demands of increased meet the diversiﬁed expectations output with technologies that efﬁciently of people waiting for stable convert sea wind into energy. A vast power power supplies. generation project is unfolding offshore.

Geothermal Power Plants

Seismic Vessels Patrol Vessels

Steel Bridges Environmental & Chemical Plants

Machine Tools Gas Engine Plants

Forklift Trucks Electronic Road Pricing Systems

EV Charging Stations & Lithium-ion Batteries

Radiation Therapy Equipment Residential Use Air-conditioners

7 Mitsubishi Heavy Industries, Ltd. Through manufacturing, MHI addresses social issues and responds to expectations across a wide range of social and everyday situations. Among the many problems facing today’s world are environmental pollution, global warming and the energy crisis. Moreover, as societies mature and technologies advance, people around the globe have come to expect lives that are comfortable, safer and more secure. MHI is a manufacturing company that provides social and industrial infrastructure for land, sea, air and even space environments. Through its lines of business, products and technologies, the company responds to expectations and helps to resolve diversifying social issues, contributing to an assured future.

Launching the World’s Dreams into Space Comfortable Travel for All H-IIB Launch Vehicle New Urban Transportation Systems with Greater Launch Capabilities

P13 P15

©JAXA

The ﬁrst domestically produced, With its enhanced launch capabili- people-friendly, “barrier-free” cars, ties, the H-IIB contributes to delivering a method of urban space development, mankind’s transportation that can be used gateway to the future. comfortably by more people.

Aircraft

LNG Carriers

Nuclear Energy Power Plants Passenger Ships

Thermal Power Generation Plants Printing Machinery

Centrifugal Chillers Centrifugal Heat Pumps Turbochargers

Vibration & Isolation Systems Automated People Movers Mechanical Parking Systems

CSR Report 2013 8 Feature Towards an Assured Future for Mankind and Earth 1 In Hunterston, United Kingdom Large-Scale Offshore Wind Power Generation: One Solution to Energy Issues Hunterston United KingKingdomdom MHI is developing the world’s ﬁrst large-scale offshore wind turbine generator to utilize a Digital Displacement® hydraulic drive train. Its success will support an ambitious plan to generate around one-third of the electricity consumed in the United Kingdom from renewable sources and will also contribute to the UK’s legally binding carbon reduction target. This project is a great example of MHI’s contribution to the wider challenge of helping society move to a more sustainable low carbon footing.

Fixed foundation large-scale offshore wind turbines for the UK and continental Europe (conceptual image)

Development of new 7MW*1 offshore wind turbine generator by 2015

Wind turbines are attracting attention generator. In January 2013, test operations around the world as a source of of the world’s ﬁrst multi-megawatt wind renewable energy. With an abundance of turbine with hydraulic drive train began at strong constant winds, offshore turbines Yokohama Dockyard & Machinery Works. are expected to generate more electricity In late 2013, MHI will erect an than onshore turbines, an opportunity onshore demonstration unit with a rotor that industry is responding to. diameter of 167m and a rated output of Wind power generation in the EU is 7MW at Hunterston in Scotland, UK. The highly developed: new wind power Hunterston project will form part of a facilities account for over a third of the Nacelle (housing for generator and other wider program of demonstration and capacity of all power plants. The UK is equipment) of large-scale wind power validation scheduled to run until 2015. moving forward with plans to take generation facility that began test operations A production version of the wind turbine in January 2013 advantage of its strong offshore winds by will then be released to the market. installing several thousand offshore wind turbine market. 1 MW: Megawatt, or 1,000,000W. Amount of turbine generators by 2020. In the future, * electrical power consumed by approximately the country intends to use wind turbines Offshore construction and main- 640 average households in the UK. 2 to generate over 40GW* , a third of the tenance costs are higher than those *2 GW: Gigawatt, or 1,000,000,000W. The electricity it consumes domestically. for onshore turbines, therefore higher generating capacity of an average nuclear power plant is 1GW. In February 2010, MHI signed a reliability during operation and greater 3 NEDO: New Energy and Industrial Technology memorandum of understanding with turbine yield and rated output will drive * Development Organization. the UK Government to cooperate on future value for customers. MHI and An Incorporated Administrative Agency under jurisdiction of Japan’s Ministry of Economy, offshore wind turbine development. subsidiary company Artemis Intelligent Trade and Industry. Power, with support from NEDO*3 MHI’s approximately 4,000 previous 4 UK BIS: Department for Business, Innovation 4 onshore wind turbine deliveries and its and the UK’s BIS and TSB* , brought * & Skills. A UK government department. achievements with thermal power forward a game-changing engineering TSB: Technology Strategy Board, the UK’s innovation agency. generation plants earned it the honor solution, developing a substitute for the Digital Displacement® Transmission is a of being the ﬁrst Japanese corporation conventional turbine design: a hydraulic * registered trademark of Artemis Intelligent to enter the European offshore wind drive train that powers the synchronous Power, Ltd., a group company of MHI. 9 Mitsubishi Heavy Industries, Ltd. Larger models sought as Hydraulic drive train resolves issues of larger-sized units turbines move offshore In lieu of a step-up gear, the new digitally the pump and motor, allowing a standard From onshore to off: Although expectations for controlled hydraulic drive train (hydraulic pump synchronous generator. This new design was offshore wind power may be focused in Europe, and motor) used for wind power generation developed with the superior digitally controlled interest is spreading around the world. At the same facilitates larger-sized models and delivers high hydraulic technologies of Artemis Intelligent time, there is a demand for developing larger reliability. In addition, the need for an inverter is Power, Ltd., an MHI-affiliated company in the UK. offshore wind turbines with a rated output of 6 to eliminated through separate digital control of 8+MW, as opposed to current turbines of 3 to 5MW.

Total offshore wind power generating Conventional gear drive train Hydraulic drive train capacity (projected) North America Asia Paciﬁc Europe Blades (MW) Three-stage step-up gear (fixed-speed increasing ratio) 100,000 Doubly fed induction generator Oil Accumulator 80,000 Step-up transformer 60,000

40,000 Inverter Converter 20,000 Hydraulic Hydraulic Shaft Shaft pump Oil motor 0 201320122016 2019 2022 2025 Source: IHS Emerging Energy Research Market study 2012

Offshore wind power generation incorporates multiple MHI technologies Demonstration testing of floating offshore wind power generation In addition to the technology and expertise gained Providing both fixed foundation begins in Japan through production of onshore wind turbines, MHI and floating types will apply its comprehensive technologies and Japan’s topography limits the size of onshore experience in thermal power generation, steel Onshore wind Offshore wind wind turbine equipment that can be transported, structures, aerospace, and shipbuilding and turbine turbine and its marine coastal areas are generally not ocean development in its production of shallow enough to accommodate fixed foundation large-scale offshore wind turbines. offshore wind turbines. For these reasons, floating offshore wind power is being viewed as the next Large-scale offshore wind turbine stage in Japanese wind power generation. MHI Land Ocean with 167m rotor diameter is participating in the Ministry of Economy, Trade Fixed foundation and Industry’s floating offshore wind farm demonstration research project, one purpose of Floating foundation which is the implementation of this technology. MHI will provide the project with large-scale 7MW-class wind turbines and floating structures, with test Rotor diameter Aerospace technology operations for the MHI machines scheduled to begin 167m off the coast of Fukushima Prefecture in late 2014. Hub height Blades for the 7MW hydraulic drive train wind turbine, currently under development, utilize Approx. 110m technologies applied in aerospace, including Jumbo passenger jet carbon materials and lightning protection. length Lightning protection Wind tunnel Approx. 70m test test

width Approx. 80m Floating offshore wind farm research project in Fukushima Prefecture (conceptual image)

Voice ExpectationsExpectations of MHI of MHI Toward low carbon society with our ideal partner MHI

“In 2009, SSE was in the early stages of thinking about potential partnerships for offshore wind and Mitsubishi Power Systems Europe (MPSE) (MHI’s power systems business for EMEA) was a good strategic fit for us not only in offshore wind but across the low carbon generation space. SSE, MPSE & MHI then signed a Low Carbon Partnership agreement in 2010.” “Successful project delivery is critically important, success breeds success. Together we have completed HVAC and Lithium-ion battery projects and we are now delivering a GTCC project, and the SeaAngel 7 MW prototype at SSE’s Hunterston test site.” “There has always been a close cultural and historical alignment between the Scots and the Japanese, right back to Thomas Glover. This, in parallel with Mitsubishi’s reputation for technology and Jim McPhillimy (Second from right) quality, makes us feel there’s something special and unique that will help sustain a long and prosperous Managing Director, future for SSE and Mitsubishi.” Scottish and Southern Energy (SSE)

CSR Report 2013 10 Feature Towards an Assured Future for Mankind and Earth 2 In Guangzhou, China MEGANINJA: A Solution to Energy Demands

for Distributed Power Generation Systems China

Sales of MEGANINJA, MHI’s container-conﬁgured gas engine power generation system, began in June 2012. MEGANINJA can begin generating power within 24 hours of delivery, Guangzhou and — as a distributed power generation system — is attracting attention for its ability to rapidly meet power supply demands in regions with insufﬁcient power generation infrastructures and emergency power supply demands in developed countries.

“Quick mobility, quick installation, quick commissioning!” for regions with insufﬁcient power generation infrastructures

Many emerging countries still have accommodate cogeneration systems regions where power grids and other through simultaneous use of a 20-foot infrastructure are unable to keep pace container for waste heat recovery, and with growing demands for power. In with its quick transport, quick China, the government has announced installation and quick commissioning, plans to introduce distributed power is able to promptly respond to power systems with a total output of 50GW* by and heat demands in any area. 2020. Meanwhile, developed nations are In July 2012, the first two MEGANINJA working to popularize distributed power units were delivered to a Chinese gas systems, which are energy efficient and company, Dongguan Xinao Gas, where disaster resistant, and are working A mobile power plant: all the equipment they are being used as backup power towards the construction of smart necessary for power generation packaged sources during interruptions in the power in an ISO 40-foot container. communities in which such systems supply. There is also growing interest are a prerequisite. from regions in other countries with Looking to raw materials and fuels, developed the MEGANINJA, a distributed insufficient infrastructures, and from the soaring price of crude oil, vast natural power system run on natural gas, and corporations in developed countries gas reserves identified in Africa, and the began marketing it in June 2012. The examining countermeasures for power extraction of shale gas in the U.S., all seem MEGANINJA, a package product peaks as part of their BCPs (business to forecast the further popularization of consisting of a 1.5MW gas engine, continuity plans). natural gas. In addition, natural gas is generator, oil tank and control console well-suited for cogeneration systems – loaded into an ISO 40-foot (approx. 12m) the high-efficiency energy systems that container, is capable of generating power * GW: Gigawatt, or 1,000,000,000W. use heat and steam as well as electricity. soon after being transported to its The generating capacity of an average nuclear In response to these factors, MHI installation site by trailer. It can also power plant is 1GW.

11 Mitsubishi Heavy Industries, Ltd. Power generation within 24 hours, maintenance within 24 hours High power generation efficiency (42.6%), Installation of conventional gas engine power Conventional gas engine power generation systems takes approximately 30 days generation facility low NOx concentration before the system is operable. With the MEGANINJA, (200ppm and less than 200ppm) all necessary equipment has been packed into the container in advance, and simple coupling units A Miller cycle gas engine, in which the expansion are used for wirings and pipings. Even if several ratio is larger than the compression ratio, enables containers are being installed, this configuration the achievement of a 42.6% power generation makes it possible to “just set them down” and efficiency rating. In addition, electronic control results begin power generation within 24 hours of delivery. in optimal mixing of fuel and air, maintaining NOx In addition, when a unit requires major repairs, density within 200ppm without after treatment. it may be exchanged with another unit, and this process takes merely 24 hours. Heart of the MEGANINJA: a high-efficiency Miller cycle Quick setup method –“just set it down” MEGANINJA’s all-in-one configuration gas engine structure Gas piping connections Oil tank Radiator Gas piping connection simplified with camlock fittings

Generator Generator control panel Miller cycle gas engine

20-foot container waste heat recovery unit

40-foot container power generation system Responding to diverse global needs for distributed gas Cable connections Wiring connections simplified power generation systems with quick connector Stable power supplies are in demand around the world, including China and Southeast Asia. MHI responds to these diverse global needs with its distributed gas engine power generation systems. June 2012: MOU signed with China Huadian Corporation on development of advanced technology for distributed power generation systems and their commercialization. July 2012: First and second MEGANINJA units Cogeneration raises total energy efﬁciency to 74.6% delivered to China’s Dongguan Xinao Gas. Power loss July 2012: Delivered a sample GS16R2-PTK Total energy generator set to Russia. Power generation system efﬁciency (40-foot container) Power 42.6% October 2012: Gas Engine Distributed Power Fuel: Generation Engineering Center established Natural in Shanghai, China. gas 74.6% Waste heat recovery unit Cooling water waste heat 14.6% April 2013: Stationary gas engine generator set 100% delivered to Dongguan Xinao Gas. (20-foot container) Exhaust gas waste heat 17.4% July 2013: MEGANINJA installation at MHI’s Machine Tool Headquarters (Ritto) for electricity peak-cut during summer. Intercooler cooling water heat loss Heat loss Exhaust gas heat loss

Voice Expectations of MHI Expectations for MHI’s continued contributions to natural gas power generation in Dongguan City, China

We supply natural gas to China’s Dongguan City, a city famous for its manufacturing industry. In China, environmental problems caused by coal use are worsening, and clean natural gas power generation, which is gentle on the environment, is seen as promising. Power demands in Dongguan City are on the rise due to economic development, while planned power cuts are being implemented because of chronic power supply Left: Director Ying of China Huadian insufficiencies. As a result, I found the MEGANINJA appealing; it runs on Electric Research Institute natural gas and can be promptly installed in areas where power is Right: (Then) MHI Executive Vice President insufficient. I feel that MHI is putting its total strength into the natural gas Dai Wen De Tsukuda power generation business in Dongguan City, and I look forward to Former CEO, Signing of MOU with China Huadian Corporation on Guangdong Dongguan continuing our partnership with them in the future. XinaoGas distributed power generation systems in June 2012

CSR Report 2013 12 Feature Towards an Assured Future for Mankind and Earth 3 In Hiroshima, Japan Delivering New Urban Transportation

Systems that Are Safer, More Comfortable, Japan

and Friendlier to the Environment Hiroshima

Urban transportation systems are being reviewed in countries around the world against a backdrop of chronic trafﬁc congestion, exhaust air pollution and a rapidly aging society. To help resolve these issues, MHI has developed advanced transportation systems like the Automated People Mover (APM) Systems, and 100% low ﬂoor Light Rail Vehicle (LRV), and so on.

Hiroshima’s highly advanced tram system — the most widely used in Japan — features the ﬁrst domestically produced barrier-free 100% low ﬂoor LRV called “JTRAM”

It’s an easy means for people to get “User-friendly” and “Urban.” The around. It produces no exhaust gas conventional step down from the tram and is extremely energy efficient. The to the platform was eliminated, resulting LRT (Light Rail Transit) is currently in a more accessible transportation drawing attention worldwide for raising means for senior citizens, parents with convenience to new heights, while baby strollers, and individuals in leveraging the unique characteristics wheelchairs. of trams. In February 2013, the U3 Project One important player in the delivered the “JTRAM R” (called transition to LRT is the people-friendly 1000-series vehicles in Hiroshima) that LRV (Light Rail Vehicle). Barrier-free, maintains the barrier-free design of the First domestically produced 100% low ﬂoor Green Mover max while adopting a more step-less LRV cars are designed to LRV, Green Mover max (5100-Series) allow passengers to board or alight compact design and shorter car length. directly from or to station platforms, Shortening the overall length made it but were not manufactured in Japan MHI together with Kinki Sharyo Co., possible for the 100% low floor LRVs to until recently. Ltd. and Toyo Denki Seizo K.K., run on all lines in the city, including those Japan had long hoped for an LRV delivered the Green Mover max, the where station platform lengths had suited to its climate, topography and first domestically developed 100% low previously made introduction difficult. unique urban structure, and in 2005, MHI floor LRV to Japan’s largest domestic In the future, MHI will continue to developed a bogie with an independent tramway operator, Hiroshima Electric provide transportation systems that are wheel system, an essential component Railway Co., Ltd. easy to use and reflect the needs of of the LRV and the first of its kind in The development concepts of the U3 the times. Japan. In the consortium U3 Project, Project were defined as “Ultimate,”

13 Mitsubishi Heavy Industries, Ltd. Safe and pleasant boarding with a ﬂoor height of 33cm

Comparison of ease of access and bogie structure Newly developed axle-less cars 100% low ﬂoor LRV In conventional cars, the left and right wheels are “JTRAM” series Conventional car connected by an axle, which determines the floor (3950-Series) (5100-Series and new 1000-Series) height. The newly developed, independent wheel bogie makes it possible to considerably lower Boarding Boarding floor height of the car by eliminating the axle and bringing the door threshold to within 33cm of the ground.

33cm Automated people movers and 78cm rail transit systems at work Bogie structure Bogie structure around the world

MHI also provides rail transit systems that Floor Motorized bogie Motor-less bogie contribute to the safe operation of railways, and 88cm Motor 112cm APM (Automated People Mover) systems with Axle Floor Floor fully automated cars running on rubber tires that Bogie frame Bogie frame are used in airports and urban areas. By taking regional issues and characteristics into account and comprehensively providing everything from car manufacture to administration systems, Improving comfort, safety and environmental performance MHI is contributing to the resolution of urban transportation issues around the world. Conserving greater energy Safety demonstrated on dedicated with car control test line As a means of transportation, trams are MHI has a large-scale test rail track at its Wadaoki environmentally friendly. Using advanced control Plant (Hiroshima Prefecture, Mihara City) that technology to run the motorized bogies on the U3 was used to thoroughly verify the safety and 100% low floor LRV “JTRAM” makes travel more comfort quality of the cars. In addition, with an eye comfortable while keeping power consumption on global development, MHI plans to establish low and energy savings high. Japan’s first comprehensive railway transportation system verification facility in the same area Singapore Changi Airport (APM) CO2 emissions per passenger-kilometer (in 2014), with the aim of making the facility by modes available to other corporations and public and (g-CO2/pkm) private groups.

Private car 188 Existing Railway System Test Track Existing APM Test Track Public bus 94 Maglev Test Track (Schematic) River Station LRT, Operation Control Center Trams 36 Above-ground and Tokyo, Yurikamome (APM) Overhead Installation Training Line Source: Ministry of Land, Infrastructure, Transport and Tourism, 2002 white paper Maintenance Facility Station Wadaoki Plant CCTV Reduced noise and vibration (Surveillance Cameras) Railway Test Track – Elevated Section In comparison to conventional cars, the new bogie, Improvements in safety and comfort to be low center of gravity, light car body and other undertaken at the MIHARA Test Center, Japan’s features of the U3 100% low floor LRV “JTRAM” ﬁrst comprehensive railway transportation system contribute to a reduction in noise and vibration. veriﬁcation facility Dubai Metro (Rail Transit System)

Voice Expectations of MHI Admiration for development of domestically produced LRV and high hopes for expansion abroad

Vehicle comfort as a living space stands alongside vehicle performance as one of the desirable elements in the development of LRVs in Japan. Other differentiating elements from those of overseas include pleasant climate control, adequate number of seats, aisle width that allows for unimpeded movement inside the train, and the necessary facilities for correcting fares. MHI has developed an LRV that specifically meets Japan’s uniqueness. In the future, I hope the company will further refine safety and comfort by expanding the test tracks. In addition, I would like to see the expansion Hideki Fujimoto New compact 18m 1000-series LRV began of this LRV, in which Japan’s meticulous consideration is given full play, Group President, commercial operations in February 2013. and would like MHI to expand its system coordination and operation Tram Company, Hiroshima Electric services to areas overseas as well. Railway Co., Ltd.

CSR Report 2013 14 Feature Towards an Assured Future for Mankind and Earth 4 In Tanegashima, Japan Contributing to International Space Activities by Enhancing Launch Capability JAPAN

and Reliability Tanegashima

A reliable launch vehicle is essential for space development. MHI has developed the H-IIB Launch Vehicle to meet the growing demand of heavier satellites from global users. MHI is also contributing to international space activities by transporting supplies to the International Space Station using the H-II Transfer Vehicle, “KOUNOTORI,” launched by the H-IIB Launch Vehicle.

Lift off of H-II B Launch Vehicle ©JAXA

Providing assured access to space by our reliable launch vehicle

One of MHI’s business activities is Over nearly 40 years of rocket launch services. In this “space shipping” development and manufacturing role, the company is entrusted with experience, MHI has amassed a wealth satellites (freight) by customers (satellite of knowledge and improved its launch manufacturers and operators) and success rate. A string of successful delivers the cargo by a launch vehicle to on-schedule launches is testament to a designated place at a predetermined the world-class reliability of MHI’s date and time. MHI entered this launch services.

business in 2007 with the launch of the ©JAXA / NASA MHI, as a launch services provider, JAXA*1 lunar orbiter “KAGUYA” on will continue to leverage its technologies H-II A Launch Vehicle No. 13. All Earth as seen from KOUNOTORI3 launched and expertise to secure a reliable by the H-II B launch vehicle in July 2012 subsequent launches up to and access to space that can meet a including H-II A No. 22 in January 2013 variety of needs from our global have been successful. H-II B launch services beginning with customers. MHI will continue to fulfill With H-IIA Launch Vehicle No. 21, No. 4, scheduled to launch the expectations for space development, MHI was commissioned by KARI*2 to “KOUNOTORI4” on its way to the paving the way for mankind’s future. launch its first non-Japanese satellite by International Space Station. *1 JAXA: Japan Aerospace Exploration Agency. MHI’s launch services. Moreover, Although several European and An independent administrative agency in charge of Japan’s space science research, following the successful launch of the American companies are involved in aerospace technology research, and space H-II B Launch Vehicle No. 3 – built to the satellite launch business, there are development research. transport larger satellites as well as the few that can match MHI’s ability to *2 KARI: Korea Aerospace Research Institute. A II government agency that handles the Republic H- Transfer Vehicle known as implement the entire process from of Korea’s aerospace and space development “KOUNOTORI” – MHI will also handle all vehicle manufacture to launch. research.

15 Mitsubishi Heavy Industries, Ltd. Utilizing advanced and comprehensive space technologies Transporting roughly 6 tons of cargo into space MHI coordinates the entire process of launch services from launch vehicle manufacture to interface coordination between the spacecraft and launch vehicle, program management, The administration of the International Space and execution of the launch campaign. Station (ISS) is shared by 15 nations. MHI is in charge of the system coordination and MHI implements the entire process of the launch services from vehicle manufacture of the large H-II Transfer Vehicle manufacture to launch “KOUNOTORI,” which delivers food, clothing, and experimental equipment of all types to the ISS. Customer II Launch Services H- Transfer Vehicle “KOUNOTORI,” Contract Interface Coordination a supply vehicle to the International Space Station MHI’s Japan Aerospace Launch Services Exploration Agency (JAXA) • Program Management • Mission Integration • Range Safety Operations • Launch Vehicle Manufacturing • Ground Station Operations • Mission Modification, Technical Support • Launch Facility Maintenance • Launch Campaign, etc. ©JAXA

Launch-Related Manufacturing of Ofﬁcial Insurance Subsystems and Procedures Components

Space-Related Government and Insurance Company Manufacturers Related Authorities

Doubling the launch capability: From 4 tons of H-II A to approximately 8 tons of H-II B Meeting diverse launch needs ©JAXA / NASA “KOUNOTORI” delivers supplies in space

Development of a new launch vehicle The H-II B Launch Vehicle was jointly developed by JAXA and MHI utilizing the technology and experience cultivated during the development of the H-II A. The three H-IIB launches to date all served to successfully launch the H-II Transfer The new logo of MHI’s launch services, Vehicle “KOUNOTORI,”which can transport established when H-II B was added to approximately six tons of supplies to the ISS. our lineup in 2013

H-II A Launch H-II B Launch Parameters H2A202 H2B Standard Heavy Lift Height (m) 53 56.6 Gross Mass (excluding satellite mass) (t) 289 531 GTO 4.0 about 8 Maximum Launch ©JAXA Capacity (t) Orbit for HTV – 16.5 Manufacture of core fuselage for H-IIB Launch Illustration by JAXA Vehicle No. 3

Voice Expectations of MHI Becoming an asset to Japan’s space development by facing the world’s needs directly

As joint developer of the H-IIB Launch Vehicle, MHI’s contributions have been tremendous. In space development, even a small error can drastically affect the entire project, but MHI firmly supported JAXA activities, and it did so from a project management standpoint as well as from a technical viewpoint. Takumi Ujino Chief Engineer, ©JAXA Last year, we transferred the H-IIB launch services to MHI as we did II Senior Chief Officer of before with the H- A. In the future, I hope that MHI promotes its launch Technology Strategy of Space Control room at JAXA Tanegashima Space Center services to meet not only national demands but also global customer Transportation Program, where launches and ground facilities are controlled. needs because I believe that MHI’s launch services activities will Space Transportation benefit Japan’s space development as well. Mission Directorate, Japan Aerospace Exploration Agency (JAXA)

CSR Report 2013 16 Employees Introduce Our CSR Activities Harnessing the Passion of Individuals through CSR Activities

Commercial ship well received for achieving reduction in environmental footprint and improving work environment Eiichiro Uchino (photo: far left) Deputy Director, Nagasaki Ship & Ocean Engineering Department, Ship & Ocean Engineering Division, Shipbuilding & Ocean Development

World’s largest Our company completed construction of the world’s largest roll-on/roll-off (RO/RO) RO/RO ship “TØNSBERG” ship, the “TØNSBERG” in March 2011. Its high transport efﬁciency and outstanding environmental compatibility were recognized by it being awarded “Ship of the Year 2011” from the Japan Society of Naval Architects and Ocean Engineers. The “TØNS- BERG” is the ﬁrst in a series of four vessels ordered by a shipping group based in Norway and Sweden. I was in charge of project management, as well as external negotiations and internal coordination. Going forward, I hope to continue providing high value-added ships like the TØNSBERG, which improve the work environment of the cargo room and reduce environmental impact during loading, unloading and Wheeled vehicles are directly driven sailing. I also hope to support the streamlining of global logistics. on and off as on a ferry

Remote-controlled robot developed to aid work in high radiation environments

Tatsuya Hashimoto Equipment Designing Section, Nuclear Plant Component Designing Department, Nuclear Plant Production Division, Nuclear Energy Systems

I developed the platform module for a remote-controlled robot capable of working up MHI employees and colleagues to signiﬁcant heights in areas where people cannot enter, such as the high radiation involved in environment at TEPCO’s Fukushima Daiichi Nuclear Power Station. With a limited the project budget and a time frame of just nine months, many employees fully dedicated themselves to developing the new robot, starting from nothing, to meet demand speciﬁca- tions. As a result, we received high praise from our customers at an achievement presentation they hosted. In the future, I plan to look beyond my main area of machine development, working on my skills as a robotics technician, in order to Valve opening and contribute to the restoration of the Fukushima Power Station. closing operated by remote-controlled robot

Continuing the rescue of photos swept away in the tsunami and their return to the disaster region Makiko Takenaka Group A, International Sales & Marketing Department, Power Systems

After volunteering to work in the affected areas of the Great East Japan Earthquake, what I felt Venue for returning memorable items most strongly about was that relief efforts should not end after just a few days of volun- (Rikuzentakata-shi, Iwate) teer activities. Commencing in August 2011, the Power Systems business headquarters organized the “MM (Minato Mirai) Memory Restoration Brigade,” a group of volunteers who clean and return to the disaster region photographs that were swept away in the tsunami and whose owners are unknown. Over 1,500 people from inside and outside the company have participated in this project at MHI’s Yokohama Building, Shinagawa Building and Kanazawa Factory, cleaning over 100,000 photographs. Each and every photograph represents a precious memory of our time on earth and acts as evidence of the lives we and our families have led. I began this activity to save as many photos as possible, but ultimately gained so Cleaning photographs one by one much in my life through this relationship between the people of Tohoku and Yokohama. according to their condition

17 Mitsubishi Heavy Industries, Ltd. Employee participation, including efforts listed on this page, are published in the CSR Report (MHI Social and Environmental Reports) online at the following. http://www.mhi.co.jp/en/csr/csrreport/index.html

The MHI Group values the passion of individuals and supports employee participation in CSR activities. With the shared desire to contribute to regional communities and society through our work, all of our employees are involved in a wide range of CSR activities.

Developing talented resources to develop Vietnam’s aircraft industry Takatsugu Nagahama MRB Team, 787 Design Section, Commercial Airplanes Engineering Department, Commercial Airplanes Division, Aerospace Systems

MHI Aerospace Vietnam Co. (MHIVA) was established as a subsidiary of MHI in Hanoi, Awarding scholarships to 12 students the capital of Vietnam. In conjunction with its establishment, MHI has been working with the Hanoi University of Science and Technology to provide courses and scholarships with the aim of developing talented individuals who can serve in active roles as aircraft production engineers in the future. MHI has conducted three yearly lectures and an annual workshop, in addition to providing scholarships to 12 people every year since 2009. I gave a presentation at the workshop held in October 2012 on the use of 3D CAD (CATIA) technology in the manufacturing process. The students there have great enthusiasm for learning, and if the opportunity arises, I would also love to offer them ﬁeld experience in ﬂying gliders, which is one of my hobbies. Presentation at workshop

All visitors excited by sheer force of live rocket launch images

Asami Usuki Mitsubishi Minatomirai Industrial Museum

Mitsubishi Minatomirai Industrial Museum is a facility where you can closely examine Large-screen display captivated visitors and learn about state-of-the-art science, technology and MHI manufacturing. This includes MHI’s participation in the development, manufacture and launch of the H-IIA and H-IIB Launch Vehicles and KOUNOTORI3, a cargo transfer vehicle to the Interna- tional Space Station. In July 2012, we held a public viewing of a live feed from a JAXA’s rocket launch, which was projected onto a large-screen display at the entrance of the museum. The dynamic live images excited all visitors, and it also served as a great learning experience for me. We will continue to host events that spread dreams and hopes and generate public interest in science. Live feed of rocket launch

Working on support projects aimed at educating India’s next generation of technicians Tomoe Nagasawa Corporate Social Responsibility Group, Corporate Communication Department, Presidential Administration Office

“India Scientific Laboratory Support Project” was launched in collaboration with Plan Interacting with Japan, an international NGO. As part of its philanthropic activities in India, the project will elementary school take place from March 2013 until February 2014. I am responsible for conducting field children in India surveys and coordinating with NGOs. In November 2012, I visited a local junior high school that has already set up science laboratories. I listened to a presentation on the effects these laboratories have had on children’s learning and examined the potential for teach- ing materials we plan on donating. Careers in the scientific fields are popular in India, but the reality is that there is a low completion rate of compulsory education, narrowing Performing scientific students’ choices in their careers. Through this project, we hope to contribute to the experiments improvement of education quality and train the next generation of technicians in India. with children

CSR Report 2013 18 Stakeholder Dialogue MHI will strive to identify adverse human rights impacts of our business activities and take appropriate steps to respect human rights MHI has worked to identify human rights impacts of business activities at the Nippon CSR Consortium with other members including representatives of companies and NGOs/ NPOs, academics and experts.

MHI has joined the Human Rights Due Diligence Workshop at the Nippon CSR Consortium, in which MHI worked to identify, prevent, and mitigate adverse human Participants in the Nippon CSR Consortium rights impacts of business activities with other members including representatives of companies and NGOs/ NPOs, academics and experts. The Nippon CSR Consortium NGO / NPOs is a platform to which different actors bring knowledge and expertise, and where they •ACE (Action against Child Exploitation) can work together to improve CSR activities in Japan. It is organised by the Caux •Change Fusion Round Table Japan*1, and aims to increase the contribution of Japanese companies •CSO Network Japan •Amnesty International Japan to global society by facilitating communications with the global society as well as with •Ek Sathe different stakeholders. •Oxfam Japan Through the workshop, we have learned differences in awareness level between •Polaris Project Japan Total 11 Japan and overseas, as well as how other companies address human rights issues. We have also deepened our understandings of human rights and business Companies (Sectors) Heavy Industry, Electric Equipment, through lively discussion on sector-specific human rights issues. On the basis of the Information Equipment, Chemistry, sector-specific human rights issues identified as “Human Rights Issues by Sector,” Automobile, Food, Information MHI will strive to take appropriate steps to identify adverse human rights impacts of Communication, Logistics, Textiles and Apparel, Retail, Finance, Trading, our business activities, while assessing existing activities and examining how the Think-tank, etc. issues can be addressed. Total 39

5 steps to identify human rights impacts of corporate activities

STEP Dialogue between Through dialogue with different stakeholders, including human rights organizations, participants have deepened companies and understanding of human rights issues in business, and clarifying what can actually be an “issue.” A stakeholders at the Human Rights Due •Hearing of what NGOs and experts think about human rights (Sep 21, 2012). Diligence Workshop •Discussion between corporate members about business and human rights (Sep 26, 2012). •Exchanging opinions and clarifying human rights issues between NGOs. Experts and corporate members (Oct 11, 2012).

STEP Identification and Sector-specific human rights issues are identified through discussion, examination and assessment carried intra-sector sharing out by sectorial groups, based on the UNEP FI*2 Human Rights Issues by Sector issued 2011. B of main human rights issues by sector at •Learning about human rights due diligence (Nov 2, 2012) the Human Rights •Discussing on what could be potential human rights issues in sector groups (Nov 15, 2012) Due Diligence •Identifying human rights issues by sector (Dec 14, 2012) Workshop

On March 2013, we conducted STEP Mapping of existing Mapping existing activities concerning human rights issues, a stakeholder dialogue activities at the assessing the company’s (current) management strategy and examining how the issues to move to the next C individual company can be addressed. step, step C to D.

Company and experts exchange ideas regarding the human rights issues and measures STEP Stakeholder dialogue at the individual in order to prioritize the issues. D company

STEP Determination of Determining policy and plan by reﬂecting comments from stakeholders, implementing that plan, and policy and plan, and monitoring the progress. E implementation at the individual company

1 Caux Round Table Japan: Caux Round Table was founded in 1986 by business leaders from Europe, the U.S. and Japan, and has been working to promote corporate * responsibility in reducing social and economic threats to world peace and stability. Since its establishment in 2000, CRT Japan has been providing support to Japanese companies for integrating social responsibility into corporate strategies and activities. 2 UNEP FI (United Nations Environment Programme Finance Initiative): UNEP FI is a global partnership between UNEP and the financial sector. Over 200 institutions, * including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance.

19 Mitsubishi Heavy Industries, Ltd. MHI held a stakeholder dialogue to discuss the main human rights issues in the manufacturing sector.

MHI held a stakeholder dialogue on March 13, 2013 to learn from stakeholders in order to identify and prioritize addressing adverse human rights impacts of our business activities. Inviting two experts, Mr. Makoto Teranaka and Mr. Hiroshi Ishida, we exchanged ideas on the main human rights issues in the manufacturing sector.

•It is expected that MHI will set forth clear policies regarding human resource management, to which appropriate human rights consideration is given. Working hours

•It is necessary to consider differences in culture and business Possible Human practices. In order to ensure full compliance with anti-corruption laws Health and Rights Issues in Bribery and and regulations of each country. safety the Manufacturing corruption •It is essential to explain the reason Sector why the company deals with Issue A •It is crucial to take preventive measures against and not Issue B both inside and health and disaster risks. Potential human rights issues outside of the company. that would have signiﬁcant impacts in the •Identifying mental health problems is the ﬁrst step manufacturing sector. These issues will be prioritized to addressing these issues. Continuous by assessing their impacts. improvement of existing programs is expected.

•It is difﬁcult for a company to monitor thousands of suppliers in Non-state •Basic policies to prevent payments to armed the upstream of the supply chain by itself. Collaboration with groups and other institutions, such as governments and NGOs, should be Child labor forces should be established. explored as an effective method for future activities. security •Disclosure on policies and agreements related •Sharing policies both inside and outside of the company is essential. payments to arms export is expected.

Comments and suggestions from experts

Identiﬁcation of human rights issues and I look forward to MHI’s participation in global the establishment of clear policies will be an effective rule-making on human rights measure for addressing human rights risks. Makoto Teranaka Hiroshi Ishida Visiting Professor, Faculty of Caux Round Table Japan Contemporary Law, Tokyo Keizai University Executive Director of Caux Round Table Japan, Visiting Professor at Tokyo Keizai University, and Global CRT Senior Advisor, Professor at Institute of former Executive Director of Amnesty International Business and Accounting, Kwansei Gakuin Japan (2001-2011). Area of specialization: Human University, Part-time Lecturer Kyushu University rights, Criminology and International Criminal Law. Business School. Publications (co-author): “Heiwa Jinken NGO” and “Kaishain no tameno CSR Nyumon.”

Human rights issues naturally involve the entire supply chain, To address human rights issues, it is essential to know the real including suppliers and clients. Since it would be almost impos- conditions. Taking child labor as an example, by conducting sible to manage the entire supply chain, it is crucial to begin with in-house audits to the best of your abilities, MHI should deliver the identification of human rights issues related to the MHI a strong message to their business partners that “we are not Groups, and to establish clear policies in relation to them. Disclo- involved with child labor, and we do not permit you to be involved sure of such policies would also help the company to prevent with child labor either.” I look forward to MHI’s participation in human rights risks. I hope that MHI will set clear policies on CSR the global discussion on human rights and its positive contribu- and take initiatives in this field as a leading and influential tion to global rule-making as a member of UN Global Compact. Japanese company.

Endorsement Statement of Human Rights Due Diligence Status Check Caux Round Table Japan herewith conﬁrms that Mitsubishi Heavy Industries (MHI) has participated in a series of Human Rights Due Diligence Workshops at the Nippon CSR Consortium. At the workshop, MHI has contributed to identifying human rights issues related to the manufacturing sector, while joining in discussion, and shared expertise with other members from different sectors. In addition, MHI has mapped existing activities concerning human rights, and conducted a dialogue with stakeholders. I look forward to seeing further progress being made by MHI, including prioritization of the Hiroshi Ishida identiﬁed issues by placing them in the value chain, and determining policy, in order to integrate human rights into the Executive Director, company’s strategy, culture, and day-to-day operations. Caux Round Table Japan

CSR Report 2013 20 Highlights of CSR Activities in FY2012

Herein we will mainly describe new initiatives related to the environment and social contributions from among the CSR activities undertaken by MHI Group in ﬁscal 2012, or initiatives which saw marked progress. We will continue to fulﬁll our responsibility as a manufacturer providing social and industrial infrastructure in Japan and overseas.

The Air-Conditioning & Refrigeration Systems business headquarters donated prefabricated MHI storage refrigeration units to the Shichiga- hama branch office of the Japan Fisheries Cooperative in Miyagi Prefecture. The region had a vigorous seaweed cultivation and fishing industry, however the cultivation and processing equipment, as well as fishing vessels, suffered severe damaged from the tsunami Donating storage refrigeration caused by the Great East Japan Earthquake. The donated storage refrigeration units are units to local fisheries cooperative indispensable for the pollination of seaweed in the summer, and are expected to be of assis- for reconstruction support tance in the restoration efforts. Promoting conservation of regional biodiversity through forest cultivation and elimination of invasive fish species The Machine Tool business headquarters together with the Konze Production Forestry Cooperative and Ritto City Commercial and Industrial Association, undertakes a volun- teer project for forest cultivation known as “Megumi no Mori.” The initiative took advantage of MHI’s “Funds for Community Engagement,” and was attended by 60 employees. We also took part in a competition to eliminate invasive fish such as the black bass and bluegill from Lake Biwa, as part of our efforts to protect the biodiversity of the region.

21 Mitsubishi Heavy Industries, Ltd. Full details of our CSR activities in fiscal 2012, including those reported on this page, are published in the CSR Report (MHI Social and Environmental Reports) online at the following URL. http://www.mhi.co.jp/en/csr/csrreport/index.html

Holding Business Partner Conferences for the ﬁrst time for suppliers in India and China MHI held its ﬁrst overseas Business Partner Confer- ences in Bangalore, India in February 2013, and in Shanghai, China in March 2013. The conference in India was attended by 13 business partners.

Winning an Environmental Business Award in 2012 with environmentally friendly CO2 Recovery Plant MHI received an Environmental Business Award for its carbon dioxide (CO2) Recovery Plant in the “eco japan cup 2012,” an environmental business contest sponsored primarily by Environ- mental Business Women and the Ministry of the Environment.

Declaring Basic Policy Opening the Safety Concerning Conflict Minerals In April 2013, MHI published its Basic Transmission Center, Policy Concerning Conflict Minerals on its website, declaring that the company has a safety education facility, no intention of abetting human rights abuses or environmental destruction by at Nagasaki Shipyard & procuring raw materials, parts or products Machinery Works which contain the conflict minerals. This is a facility opened in October 2012 at the Naga- saki Shipyard & Machinery Works to encourage sensi- Continually implementing tivity to, and a culture of, safety. The facility enables users to learn important points and countermeasures measures to improve safety for the prevention of accidents through videos of reenactments and information panels. The facility also of nuclear power plants offers study on the causes of human error and training Nuclear Energy Systems business headquarters is deploying in anticipating danger. safety improvement measures for the pressurized water reactor (PWR) plants in Japan in the wake of the station blackout accident at the Fukushima Daiichi Nuclear Power Station operated by Tokyo Electric Power Co., Inc. Furthermore, since July 2012, we have provided comprehensive support for the restart of Ohi Nuclear Power Station Units 3 and 4 operated by Kansai Electric Power Co., Inc., contributing to the first restart of a nuclear power station in Japan since the Great East Japan Earthquake. Selection by Eco-funds and SRI indicators In fiscal 2012, MHI was again included in the eco-funds, formed based upon surveys of companies conducted by corporate rating agencies in Japan and overseas, and MS-SRI, a socially responsible investment index coordinated by Morningstar Japan K.K.

CSR Report 2013 22 CSR Medium-Term Action Plan and Results of Promotion To advance the global promotion of CSR activities, activity areas were reorganized in ﬁscal 2012 according to the seven core subjects of ISO 26000.

Area Priority item Medium-term targets (FY2011-2013) CSR Action Plans for FY2012

1 (1) Continue to hold brieﬁngs for overseas Group companies (2) Consider and implement global measures for penetration • Penetration of global awareness towards CSR including of corporate culture reforms and CSR Broadened CSR overseas locations and Group companies awareness 2 (1) Publish CSR report in Japanese and English • Global information dissemination of status of CSR activities (2) Consider creating a CSR website in Chinese, and updating it alongside publication of the CSR report

1 • Commonizing a consciousness for important risks among all Proactive response through auditing for “Processes to departments and sections and establishing a risk management strengthen business” Risk management 2 PDCA cycle through efﬁcient and effective audits Implement auditing including at corporate regulatory Organizational departments for “Compliance consolidation” governance

• Improve timely and accurate information dissemination capabilities as per the needs of investors and strengthening 1 Hold more investor events at sites both in Japan and Promotion of IR activities in-house feedback on information to be used as reference overseas material by management

• Embedding understanding and consciousness about human rights issues company-wide 1 Hold meetings of the Committee for Raising Awareness of • Development of sexual harassment and “power harassment” Human Rights (workplace bullying & harassment) prevention efforts 2 Introducing human rights issues in each training program • Establish a workplace and corporate culture where human and continuing implementation Raising awareness of rights issues do not arise 3 Strengthening awareness of sexual harassment and “power Human rights • Company-wide penetration of understanding and human rights harassment” (workplace bullying & harassment) prevention consciousness regarding the expansion of employment of 4 Continuously implementing positive employment actions so the differently-abled people as to achieve the target of a hiring rate of 2.1% for 1. Achieve company-wide employment rate of 2.2% by the end differently-abled people. of FY2013 2. Plan to increase employment in all divisions

1 Fully implement global education in accordance with G-MAP 2 Strengthening mental health promotion systems and Creating a better initiatives in the whole company to reduce absence due to workplace • Strengthening global human resource development based on mental health disorders 1 Enriched education the road map for cultivation of global human resources (1) Promoting increased awareness of mental health Labor (G-MAP) initiatives among employees, and promoting effective 2 Strengthening • Conduct effective measures to combat mental health problems mental health care practices mental health from prevention to return to work (2) Providing a mental health advice system that is easy for 3 Nurturing the next • Continue to maintain the next-generation accreditation mark employees to use 3 Accelerate penetration of knowledge and understanding generation among employees about next-generation development and work-life balance support

Number of recipients of CSR sessions/ Breakdown of employees by age CSR sessions for new employees* (FY2012) Number of new graduates hired 60 and over People 527 1.7% Under 30 People (44 females) 1,312 (19) 452 (People) CSR Sessions 8,410(753) (People) University 3,000 CSR Sessions for New Employees 50~59 1,200 Vocational school and junior college, high school, other 2,571 5,093 16.4% 2,260 27.0% 900 2,000 2,117 (450) Total 1,726 1,726 31,111 634(60) 1,463 600 1,490 1,312 (people) 452(44) 1,000 940 23.1% (females in 286 655 brackets) 300 167

797 845 627 786 657 348 285 0 40~49 31.8% 30~39 0 2008 2009 2010 2011 2012 7,202 9,879 2012 2013 (Year) (FY) (805) (808) * Including some Group companies (females in brackets)

23 Mitsubishi Heavy Industries, Ltd. For more information on fiscal 2012 CSR activities, including the results of activities shown on this page, see the detailed version in the CSR Report 2013 on the MHI website. http://www.mhi.co.jp/en/csr/csrreport/index.html

• Results of other activities related to the priority item

Results from CSR activities in FY2012 CSR Action Plans for FY2013

1 Continued to hold CSR sessions at all 12 MHI works and selected Group companies, and session 1 Continue to hold CSR sessions at all locations, including the Head Ofﬁce, and participants were again asked to complete a survey consider expanding these sessions to overseas Group companies 2 Continued to publish a CSR Report (brochure and website) in Japanese and English, and posted 2 Continue to publish a CSR Report in Japanese and English and expand Chinese CSR-related content in Chinese to the Mitsubishi Heavy Industries (China) Co., Ltd. website content

1 Established a risk management policy and organization. Identified major risks through discussions between general managers of each department and the general manager of the Management Audit Department 2 Conducted audits of business segments, administration departments and Group companies, and supported 1 Manage and implement measures for major risks in accordance with the risk development and improvement of risk management processes management policy 2 Conduct effective, efficient audits of risks and challenges in business segments, administration departments and Group companies, and provide flexible support • Identified and reorganized risks to MHI, and assigned risk control managers of each risk • Identified major risks to each department and organized processes for managing those risks

1 Hosted plant tours in Japan and the U.S. for institutional investors and financial analysts. Continued to hold company briefings at MHI facilities across Japan for individual investors, and also plant tours for shareholders 1 Continue to hold IR events at sites in Japan and overseas 2 Promote in-house feedback through two-way communication with stock market • Developed a smartphone app that allows users to read the MHI Annual Report (Japanese only) affiliates • Provided an online version of the Annual Report • Continued to host business briefings and presentations to announce financial results and business plans

1 Continued to hold Committee for Raising Awareness of Human Rights meetings (integrated the Committee 1 Hold meetings of the Committee for Raising Awareness of Human Rights for the Promotion of Employment of Differently-Abled People into this committee) 2 Introducing human rights issues in each training program and continuing 2 Continued to hold human rights training session and other awareness-raising activities using printed implementation materials throughout the Group 3 Conduct more effective sexual harassment and power harassment education and 3 Conducted awareness education on “power harassment” (workplace bullying & harassment) prevention for awareness activities based on analysis of factors that contribute to harassment senior managers at all MHI works, and continued e-learning curriculum for power harassment prevention 4 Continuously implementing positive employment actions so as to achieve the target 4 Reached hiring rate of 2.1% for differently-abled people by using recruiting websites, actively participating of a hiring rate of 2.2% for differently-abled people. in recruitment events and making other recruiting efforts, and following-up on employees in each division

1 In FY2012, roughly 1,750 employees attended group training and 48 young employees undertook MHI Global Training (MGT) in accordance with G-MAP 2 Held an industrial medicine conference for the entire company and sectional meetings to explore and implement an organization and actions to promote mental health 3 Hosted MHI’s first lecture by a non-Japanese, female external director, and periodically held round-table meetings for employees who are on or have taken childcare leave 1 Follow the PDCA cycle in advancing global education in accordance with G-MAP 2 Continue FY2012 activities • Actively worked to find overseas training opportunities for young employees (since beginning the program in 3 Strengthen other methods for accelerating penetration of knowledge and 2012, around 100 young employees were sent abroad in accordance with G-MAP by April 2013) understanding among employees • Produced curriculum (Starter Kit) presenting the company’s history, management philosophy, and business overview to impart essential knowledge to employees and cultivate in each individual a sense of connection with the MHI Group. The Starter Kit was distributed to 187 Group companies (84 overseas companies, 103 Japanese companies) • Around 560 Group company employees in Japan attended stratified education (such as training for division managers) , skill-oriented training, English skill enhancement, and other types of training

Number of female managers* Number of rehired employees* Industrial accident frequency rate* 293 People 4,794 People 0.11 (People) (People) 320 6,000 0.40 288 293 266 4,794 0.31 240 248 4,500 4,488 0.30 0.29 0.27 219 4,065 0.23 3,311 160 3,000 0.20 2,492 0.11 80 1,500 0.10

0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 (Year) (Year) (FY) * section manager and above; excluding medical staff * excluding those from Group companies * Mitsubishi Heavy Industries, Ltd. non-consolidated

CSR Report 2013 24 Area Priority item Medium-term targets (FY2011-2013) CSR Action Plans for FY2012

1 Promoting CO2 reduction measures (introduction of or • Average CO2 emission between FY2008 and FY2012 to be upgrade to energy-saving equipment), implement upgrades reduced by 6% compared to 1990 level based on In-house Air-Conditioner Upgrade Plan 2 Reduced CO emissions • Establish CO2 emission reduction target until FY2020 2 Expand the monitoring system to the whole company (including Group companies) and promote reduction activities 3 Implement regular follow-ups for reduction plans of individual works and their actual reduction performances

Environment

1 Promote acquisition of environmental ISO standards, etc. for • Increase the Group’s environmental performance data domestic and overseas Group companies collection rate both in Japan and overseas 2 Promote the setting of environmental targets for overseas Group environmental • Encourage the acquisition of certiﬁcations of environmental Group companies management ISO standards and others to Group companies in Japan and 3 Hold the domestic Group company environmental meetings, overseas that are consolidated and hold the Environment Liaison Conferences at each overseas regional supervising ofﬁce

Results of Promotional Efforts of Medium- to Long-Term Environmental Targets In fiscal 2002, MHI established its Medium- to Long-Term Environmental Targets, earlier than other heavy industry companies, and has made efforts to carry out environmental preservation activities. Moreover, in fiscal 2010 we extended the target for our activities to the end of fiscal 2012 with the aim of establishing environmental targets for the following period, based on the MHI Environmental Vision 2030 (which was established in June 2012). As a result we have been able to achieve our targets for many items, including the realization of a low-carbon society and formation of a recycling-based society. We were unable to achieve our targets related to total generated waste, landfill disposal amount, chemical substance emissions, and energy conservation and reduced CO2 emissions from product transportation. However, we will continue working to achieve these targets through initiatives such as incorporating them into environmental targets for the next period.

Results of Promotional Efforts of Medium- to Long-Term Environmental Targets (as of the End of Fiscal 2012) =target achieved =target partially achieved =requires further efforts Item Goals Progress (as of the end of FY2012) Evaluation

CO2 emissions: 452,000 tons (average) 6% reduction of the average CO2 emission amount for the five years from FY2008 to 2012 (from 4.1% reduction from FY1990 level Realization of FY1990 level): to be achieved through reduction efforts at all production plants The amount that has not been achieved will be allocated Reduced CO2 as emission credits. a low-carbon emissions from society CO2 emissions: 13,500 tons (average of Head Office business activities More than 13% reduction of the average CO2 emission amount for the five years from FY2008 to [Shinagawa and Yokohama combined] from FY2008 to 2012 (from FY2005 level): to be achieved through reduction efforts at offices and operations FY2011) Energy savings divisions (Head Office, domestic offices and research & development centers) (global warming 16.1% reduction on FY2005 level measure) Reduced energy usage More than 5% reduction of unit energy consumption in transportation in FY2012 (from FY2008 FY2012 unit energy consumption: 51.0 and CO2 emissions from level) by promoting efforts to reduce transportation energy (unit energy consumption of FY2008: 11.6% increase on FY2008 level product transportation 45.7 to 43.4 by FY2012)

Reduced waste By FY2012, reduce total generated waste by 40% of FY1992 level : to be achieved by conserving Total emissions:132,000 tons generation and resources and reducing the purchase of materials 39.0% reduction from FY1992 level Form a recycling- emissions based society Reducing reliance By FY2012, cut landfill waste disposal volume by 98% relative to FY2000 landfill waste disposal volume cut by 97.5% (waste and water on landfill The landfill waste disposal ratio in FY2012 will be below 1% landfill waste disposal ratio 0.5% resource countermeasures) More efficient Water consumption in FY2012 will be cut to 9.35 million tons, a reduction of 2% relative to Water consumption reduced to 7.02 million tons water usage average consumption of 9.54 million tons in the period FY2005 to FY2007 26.3% reduction Ongoing consignment of processing of high concentrations Detoxification of high concentration PCB waste in storage (transformers, condensers, oils) to be — Elimination of PCB waste to JESCO (Japan Environmental Safety completed by FY2015 (including ballasts and smaller equipment) (To be equipment using PCBs Corporation) Management of and detoxification evaluated chemical treatment Analysis and confirmation of low PCB devices (low concentration) to be finished by FY2012, Testing and analysis of machines and devices containing in FY2015) substances complete detoxification by FY2015 low or trace concentrations of PCBs is underway at all works More than 30% reduction of atmospheric emission of VOCs with focus on xylene, toluene and Total VOCs emissions 1,782 tons (control of chemical Reduced VOCs ethylbenzene (reduced by 704 tons from 2,268 tons in FY2000 to 1,564 tons in FY2012) 21.4% reduction from FY2000 level substances) emissions Aim for zero atmospheric emissions by FY2012 of VOC organochlorinated hazardous air pollutants: Total combined emissions of dichloromethane, dichloromethane, trichloroethylene and tetrachloroethylene trichloroethylene and tetrachloroethylene = 8.8 tons Consolidated Continued ISO 14001 certification renewal at domestic Ongoing ISO 14001 renewal by domestic works, Head Office, branch offices and research & environmental production bases along with research & development development centers management system centers, Head Office, and domestic branch offices. Collecting and disclosing of Collecting environmental information (environmental data and environmental accounting) from Collected environmental information (environmental data environmental environmental management information systems and disclosing information through CSR Reports and environmental accounting) through the database Group management and other releases system and disclosing information through this CSR Report. environmental information management Promotion of Promoting the purchase of environmentally friendly products based on the company’s own green 95.0% by quantity green purchasing purchasing guidelines: (Purchasing ratios 90% by volume and 95% by value) 97.2% by value Development and Development and provision of new products and technology based on our Basic Guideline on provision of Production of Environmentally Friendly Products (formulated in 2005) to help reduce society’s MHI supplied environmental products designed to combat environmentally environmental burden global warming, such as high-efficiency generators (wind friendly technologies In particular, we will work to develop technology and provide products that are revolutionary and power generators, etc.) and CO2 recovery systems and products contribute to solving global warming and building a low-carbon society Revegetation activities coordinated with various local Form a society that We will continue revegetation, alien fish removal, building biotopes and breeding Japanese municipal authorities across Japan, as well as biotope and coexists with nature Promote activities for honeybees, among other activities relating to biodiversity and examine the possibilities for Japanese honeybee breeding programs were continued the protection of evaluating the effect of our business activities on the preservation of biodiversity as necessary in (Preserving Performed evaluations of MHI’s degree of initiatives in biodiversity and nature light of global trends biodiversity) consideration of biodiversity in its current corporate activities. (Note) In principle, all the data represents data of Mitsubishi Heavy Industries, Ltd. non-consolidated.

25 Mitsubishi Heavy Industries, Ltd. • Results of other activities related to the priority item

Results from CSR activities in FY2012 CSR Action Plans for FY2013

1 Upgraded a total of 1,893 air conditioning units based on the plan 2 Introduced monitoring systems at ﬁve works, including small-scale introductions 3 Achieved 9.8% reduction of CO2 emissions (FY2012 results) compared with FY1990 level 1 Upgrading of air conditioning units based on the In-house Air-Conditioner Upgrade Plan • Promoted CO2 emissions reduction at production plants 2 Expanding introduction of monitoring systems • Acquired approximately 130,000 tons of CO2 emission credits from a CDM project 3 Establishing a project with the goal of energy conservation, and implementing • Reduced greenhouse gas emissions excluding CO2 emissions from energy use energy-conservation activities • Utilizing one million kWh of green power annually thanks to wind power generation • Promotion of energy conservation in transport through modal shift and load ratio improvement

1 Acquired certifications of environmental ISO standards and others to 83 domestic and 28 overseas Group companies 2 Established the MHI Group 2nd Environmental Targets, including targets for overseas Group companies 3 Held Environmental Meetings at six domestic Group companies 1 Support the acquisition of certifications of environmental ISO standards and others to domestic and overseas Group companies • Promoted the preservation of biodiversity in accordance with the Environmental Policy and CSR Action 2 Comprehend environmental data for domestic and overseas Group companies Guidelines 3 Holding Environmental Meetings, for domestic Group companies • Promoted the reduction of waste landfill disposal volumes • Reduced water usage during production • Promoted the reduction of chemical substance usage (VOCs, etc.)

CO2 emissions Gross energy input Electricity purchases 425,000t 9,745TJ* 712,456MWh (10,000tons) (TJ) (MWh) 60.0 12,000 900,000 857,030 Standard value 11,145 10,065 10,022 9,950 9,745 757,335 766,802 731,045 712,456 47.2 44.9 43.5 43.7 40.0 42.5 8,000 600,000

20.0 4,000 300,000

0 0 0 1990 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 (FY) (FY) (FY) * 1TJ (terajoule) = 1 trillion joules (1,000,000,000,000 J)

Landfill disposal volume/ratio Total generated waste Waste generation by material

Landfill disposal Landfill disposal volume ratio Waste paper Sludge 4.3% 602t 0.5% 132,000t 4.4% Other 1.3% (t) (%) (1,000t) Waste oil 25,000 14 300 4.6% Waste 3,000 12.6 12 225 216 plastic 97.5% reduction 5.4% 2,000 from FY2000 level 8 150 131 133 129 132 Slag Standard 6.1% 1,000 value 1,030 4 75 Scrap 714 602 Waste 23,884 0.8 0.6 wood 7.0% metal 0 0.5 0 0 Acid and 59.6% 2000 2010 2011 2012 1992 2009 2010 2011 2012 (FY) (FY) alkali wastes 7.3%

Paper usage* Water usage* and reduction ratio Atmospheric emissions of organochlorides 2,563t 7,020,000t 8.8t (t) (10,000 tons) (t) 4,000 1,200 Standard 260 153.0 19.6% 24.2% 26.3% 3,536 value 54.2 reduction reduction reduction 3,000 2,950 900 952 Standard 2,718 2,719 2,563 40 value 262.2 35.8 2,000 600 766 722 702 30 1,000 27.3 300 11.5 55.0 6.6 20 0.6 0 0 2.1 18.7 2008 2009 2010 2011 2012 2005-2007 2010 2011 2012 9.1 11.4 (FY) average (FY) 10 23.7 * including Head Office usage amount 18.6 0.7 8.8 * The above is the total of water supply, industrial water, 9.9 8.4 and groundwater usage 8.9 0.9 0.0 0 0.6 0.4 1996 2008 2009 2010 2011 2012 (FY) Dichloromethane Trichloroethylene Tetrachloroethylene

(Note) In principle, all graphs have shown the production sites data of Mitsubishi Heavy Industries, Ltd. non-consolidated.

CSR Report 2013 26 Area Priority item Medium-term targets (FY2011-2013) CSR Action Plans for FY2012

• Decrease matters in need of improvement even at Group companies 1 Strengthen support for overseas Group companies Thorough compliance • Early comprehension and improvement of matters in need of 2 Strengthen collaboration for crisis and risk management improvement

1 • Continuation of zero policy for violations to the Anti-Monopoly Act Conﬁrm the implementation status of rules of conduct and • Penetration of order compliance activities compliance checks 2 Order compliance • Establishment of order compliance consciousness through Implement efﬁcient and effective special monitoring 3 awareness and educational activities Promote instructional/educational activities for order compliance

Fair 1 Implement drafting of measures for detecting problems in • Establishment of a self-compliance system (compliance Compliance with maintenance of Installation Organizational Chart Registers activities incorporated in daily tasks) operating 2 Monitor current status of Group company compliance the Construction • Enhancing compliance at Group companies 3 Formulate measures to deal with compliance issues in practices Business Act • Enhancing contract compliance with business partners contracts with business partners

• Strengthening the export control management systems and Compliance with 1 Continuously implement internal training at all levels fostering experts in export control management 2 Promote further acquisition of export control expert qualiﬁcations export-related laws and • Further continuous supports for Group companies to 3 Continuously audit Group companies implement regular training regulations strengthen their export control management systems

• Sharing values regarding the promotion of CSR activities with 1 Reexamine scope and implementation method of surveys business partners and avoiding procurement risks with key conducted at business partners partners 2 Monitoring of procurement-related laws and regulations and CSR procurement • Effect extensive compliance and adherence to laws and effecting improvement follow-ups regulations with regard to procurement tasks 3 Reducing transportation energy • Continuous compliance to environmental regulations

1 Integrate product safety activities and development work into • Developing product safety activities within quality management quality management • Steady development of product safety activities Product safety 2 Continually develop foundation for product safety activities • Maintaining the infrastructure for product safety activities (developing human resources, maintenance of standards)

1 Continually strive for better safety and quality through • Reﬁne and continually improve QMS (Quality Management initiatives taken by the “Managing Board for Innovation in the System) with an eye on global business development Nuclear Business” • Exhibit our comprehensive technological strengths and Consumer Ensuring quality and 2 Reﬂect lessons learned from Fukushima and effective enhance customer satisfaction safety of nuclear business countermeasures for accident prevention to the PWR design issues • Enhance the attitude of compliance with laws and rules and in order further improve nuclear safety cultivate a strong nuclear safety culture 3 Continually strive to cultivate a strong nuclear safety culture

Enhancement of • Acquiring broad recognition as a global company and 1 Promoting a global advertisement strategy by building brand value increasing the number of MHI fans an integrated corporate image

1 Evaluate activities with affiliated NGO/NPOs and formulate • Proactive development of social contribution activities with plans for the next fiscal year. Begin collaboration with Community Socially beneficial the cooperation of various stakeholders an NGO/NPO for the management of the fund for social activities • Examining possibilities for the globalization of social contributions involvement contribution activities and development of social business 2 Improve/expand the system for the following year, based on and the performance of the fund

development Improvement of • Establish its role as a facility that provides opportunities for 1 Responding systematically to both the intangible (staff children to develop an interest in science by showing them the Mitsubishi Minatomirai training) and tangible (exhibit refurbishment) aspects Industrial Museum the pleasure of manufacturing

Participation rates for compliance promotion training Change in expenditures on social contribution activities (million yen) FY2009 FY2010 FY2011 FY2012 95.1% Academic research 339 247 164 177 (%) Education 537 633 596 503 100 Community activities 158 141 180 153 Sports 114 149 133 173 96.8 96.4 96.5 96.8 Other 507 440 1,023 474 95.1 90 Total 1,655 1,610 2,096 1,480 Percentage of ordinary profit 6.89% 2.36% 2.39% 1.00% (Note 1) Figures include cash donations, payments in kind, activities by employees, free use of 80 company facilities, etc., converted into monetary equivalents; activities privately performed by employees are not included. 2008 2009 2010 2011 2012 (FY) (Note 2) Includes group companies under consolidated accounting. (Note 3) Social contribution expenditures in FY2010 do not include those related to the Great East Japan Earthquake (donations, fund-raising, etc. during March 11-31, 2011). These expenditures were included in FY2011. (Note 4) Social contribution expenditures in FY2012 are currently being calculated.

27 Mitsubishi Heavy Industries, Ltd. • Results of other activities related to the priority item

Results from CSR activities in FY2012 CSR Action Plans for FY2013

1 Visited each Group company in the U.S., Europe and India, to confirm current situations in detail and to exchange opinions with local management 2 Centralized the management of internal audits, risk management, crisis management and compliance, 1 Strengthen support for overseas Group companies comprehended and analyzed each issue. Confirmed the effectiveness of measures to hedge and/or moderate 2 Tighten linkage with crisis and risk management risk, and built a system to organically promote measures, including those to prevent reoccurring risk • Reorganized the Compliance Committee into the Risk Compliance Committee 1 Expanded target to include government, public and private demand both in Japan and overseas. Revised the rules of conduct with the expansion of targets 2 Continued to implement special monitoring for order compliance 1 Confirm the implementation status of rules of conduct and compliance checks 3 Held seminars at MHI and Group companies in Japan, Europe, the U.S., and China on compliance with 2 Implement efficient and effective special monitoring competition laws 3 Promote instructional/educational activities for order compliance • Clearly defined function of the secretariat for the Order Compliance Committee 1 Revised a standardized company-wide form to record the social insurance enrollment of specified constructors and subcontractors into the Installation Organizational Chart Register, in line with revisions to 1 Implement drafting of measures for detecting problems in maintenance of ministerial ordinances Installation Organizational Chart Registers 2 Implemented regime monitoring at 19 Group companies and construction site monitoring for 16 companies 2 Monitor current status of Group company compliance 3 Continued to conduct seminars on Construction Business Act for business partners 3 Formulate measures to deal with compliance issues in contracts with • Implemented regime and construction site monitoring for 9 business segments business partners • Continued to conduct seminars on Construction Business Act at all our bases of operation 1 Continued to implement e-learning for all employees engaging in export operations and also training sessions for managers of each division 1 Continuously implement internal training at all levels 2 Continued to promote acquisition of the expert qualification 2 Promote further acquisition of export control expert qualifications 3 Created an English version of e-learning materials to provide support for export control activities at its 3 Continuously audit Group companies implement regular training overseas bases 1 Implemented surveys for all five points (quality, price, delivery, technology, and management) at around 2,300 companies and had these companies evaluate themselves on the extent to which they are engaging in CSR 1 Reexamine scope and implementation method of surveys conducted at 2 Applied results and examples of improvement from monitoring of procurement-related laws and business partners regulations at each office to similar processes 2 Monitoring of procurement-related laws and regulations and effecting 3 Transportation energy (FY2008 unit energy consumption: 100 attained out of 111.6) improvement follow-ups 3 Reducing transportation energy • Continued to hold business partner conferences in Japan and also hold similar conferences in India and China

1 Deploy product safety activities into quality management companywide 1 Incorporated product safety activities into quality management using model products 2 Continually develop foundation for product safety activities (developing human 2 Developing basic product safety activities (developing human resources, maintenance of standards) resources, maintenance of standards)

1 Implemented activities under a new organization by replacing the “Managing Board for Innovation in the 1 Make further advancements and continuous improvement in QMS from a global Nuclear Business” with the “Managing Board for Safety Promotion in the Nuclear Business” as the main perspective body for promoting related activities under the direction of a steering committee 2 Grasp social trends and customer needs to provide products and services with a 2 Proactively responded to anticipated changes in nuclear regulations from Fukushima; implemented caliber of safety and reliability, while leveraging the MHI Group’s comprehensive countermeasures for accident prevention and nuclear safety capabilities 3 Promoted “Safety First” culture to further improve nuclear safety by sharing issues throughout the company 3 Further cultivate a strong nuclear safety culture and enhance attitude for and determining actions for resolution, continuing efforts to improve quality management system, and accountability fostering a strong nuclear safety culture 1 In Japan, undertook activities that utilize TV commercials, advertisements in newspapers and public transportation, websites, and radio commercials to introduce manufacturing technologies. As a part of 1 Promoting a global advertisement strategy by building an integrated corporate image an overseas campaign, in the U.K., launched a series of product advertisements in newspapers

1 Planned and implemented social contribution activities at each MHI ofﬁce. As a result, provided support to 16 organizations with the earmarked budget 2 Examined the results of CSR activities carried out in FY2012 and compiled a budget and an outline of 1 Continue to promote those activities implemented in FY2012 (rename the fund for activities for FY2013. Also taking into account our reorganization, decided upon the allocation of budget to social contributions as Funds for Community Engagement, as this more accurately those business segments that are mainly in charge of the particular activity describes the system) • Continued support for reconstruction after the Great East Japan Earthquake • Carried out science classes at each MHI ofﬁce

1 Held a commemorative ceremony to celebrate the 2 millionth visitor. Engineers from MHI Nagoya Guidance 1 Responding systematically to both the intangible (staff training) and tangible & Propulsion Systems Works conducted science classes. Revamped the Environment / Energy Zone (exhibit refurbishment) aspects

CSR Report 2013 28 Company Proﬁle

Company Proﬁle Businesses and Products

Trade Name: Mitsubishi Heavy Industries, Ltd. Shipbuilding & Shipbuilding Head Ofﬁce: 2-16-5 Konan, Minato-ku, Tokyo Ocean •Cruise ships •Ferries •LNG carriers •LPG carriers •Tankers •Container carriers •RO/RO ships •Car carriers •Destroyer •Patrol vessels Development President and CEO: Shunichi Miyanaga Marine development •Deep submergence research vehicle •Oceanographic research ships Foundation: July 7, 1884 Engineering business •Shipbuilding engineering •Marine solution provider Establishment: January 11, 1950 Overseas Shipbuilding Business Capital: 265.6 billion yen Power Systems Thermal power generation plants and other facilities •Combined cycle power plants •Steam turbines •Gas turbines (as of March 31, 2013) •Boilers •Pump Employees: 68,213 consolidated, Renewable energy generation, etc. •Wind turbine plants •Geothermal power plants •Water turbine plants 31,111 non-consolidated •Solar thermal generation systems •Lithium-ion secondary batteries Nuclear power plants and other facilities (as of March 31, 2013) •PWR nuclear power plants •Advanced reactor plants •Nuclear fuel cycle plants Marine and others •Water jet propulsion units •Pumps for industrial plants CI Statement Machinery & Environmental and chemical plants Steel •Flue gas desulfurization systems •Flue gas CO2 recovery plants •Fertilizer plants •Methanol plants •Petrochemical plants Structures •Oil & gas production plants Our Technologies, Your Tomorrow Environment preservation •Wastes treatment plants •Electrostatic precipitators •Biomass utilization systems •Water treatment systems This CI statement represents our intention to Transportation systems and ITS •Automated people mover •Rail transit •Air brake equipment “continuously provide an assured future where people •Toll collection systems (ETC, etc.) •Intelligent transport systems (ITS) can live safe, secure and enriched lives through •Passenger boarding bridge •Platform screen door system Advanced mechanical systems technologies that can excite people and passion as a •Particle accelerator •Laser welding equipment •Radiation therapy equipment •OLED manufacturing equipment •OLED panels for lighting application manufacturer for the sustainability of the earth and Machineries •Iron & steel manufacturing machinery •Compressors & mechanical turbines humankind.” •Rubber & tire machinery •Crane & material handling equipment Basic facilities & steel structures for infrastructure CI(Note1) statement logo •Steel bridges & chimneys •Gate facilities •Mechanical parking systems •Tunnel boring machine •Vibration and isolation systems Printing and packaging machinery •Sheet-fed offset presses •Commercial web offset presses •Newspaper offset presses •Paper converting machinery Industrial machinery & mechatronics systems •Injection molding machine •Food & packaging machinery •Packaging machinery •Mechatronics system equipment

Aerospace Aviation •Commercial airplane •Aeroengines •Jet ﬁghters •Helicopters (Note1) CI: Corporate Identity Systems Space systems •H-IIA launch vehicle •H-IIB launch vehicle •Space transporter •Rocket engines General Engine generation equipment Machinery & •Gas engine generator sets •Diesel engine generator sets •Co-generation systems Orders Received (Consolidated) Special •Portable gas engine generator/Portable gasoline engine generator Vehicles Engines & equipment •For agricultural use (Agricultural machinery and small-sized industrial machinery): (Billions of yen) Air-cooled gasoline engines/water-cooled diesel engines 4,000 •For industrial use (Construction machinery, generators and power units): Water cooled diesel engines/water cooled gas engines •For marine use (Main propulsion and auxiliary generating set): 3,268.7 3,188.8 Water cooled diesel engines 2,995.4 3,032.2 3,000 Physical distribution equipment 2,476.2 •Forklift trucks •Heavy cargo carriers Turbochargers 2,000 •For passenger & commercial vehicles •For trucks & buses •For industry use and marine use

1,000 Construction machinery Defense •Earthmoving and grading machinery •Special vehicles Others Air-conditioners 0 2008 2009 2010 2011 2012 (FY) •Commercial use air-conditioners •Residential use air-conditioners •Automotive thermal systems •Applied refrigeration use machinery •Transport refrigeration units •Centrifugal chillers •Air/Water to water heat pumps Industrial machinery •Machine tools Net Income (Consolidated)

(Billions of yen) 120 Net Sales by Industry Segment (Consolidated) 97.3 (Billions of yen) 90 Shipbuilding & Ocean Development Others 245.7 225.8

30.1 General Machinery & 30 24.2 24.5 Special Vehicles 389.1 14.1 Power Systems 988.7

0 Aerospace Systems 485.8 2008 2009 2010 2011 2012 (FY) Machinery & Steel Infrastructure Systems 482.5

29 Mitsubishi Heavy Industries, Ltd. Third-Party Opinions

Mariko Kawaguchi Toshihiko Fujii Senior Analyst, Visiting Professor, ESG Research Department, Graduate School of Economic Science, Daiwa Institute of Research Saitama University

Scanning the breadth of the MHI Group’s business I realize that MHI 1. Effective communication on social contribution is not only deeply involved in the infrastructure that supports the cities This report, particularly the Special Feature articles explaining and industries upon which our lives and livelihoods are based but was President Miyanaga’s commitment to social sustainability and also a key player in the modernization and development of Japan specific projects, comprehensibly communicates MHI’s social since the Meiji Restoration. Yet in a time like today, when the role in society across a wide spectrum of fields including energy distortions brought about by 20th century-style growth—global and transportation. environmental problems such as climate change and biodiversity loss, 2. Product and service initiatives that go beyond CSR and social challenges such as aging populations and the widening Addressing social issues not only through products and technolo- gap between the rich and the poor, to name a few—threaten the gies but also by changing one’s business practices is a core part of sustainability of human civilization, the business models that drove CSR. Supply chain problems are particularly important given their growth in the 20th century must be caught up to the 21st century. global nature. While MHI has already begun this effort by, for From this perspective, that MHI has delegated CSR management example, expanding the Supply Chain CSR Promotion Guidelines responsibilities to the Presidential Administration Office, which reports to overseas business partners, I hope to see an acceleration of directly to the President, established a CSR Liaison Conference made such efforts, particularly with regard to conflict minerals. up of groups of managing members for more comprehensive 3. Improve diversity CSR promotion, and drew up an environmental vision for the year Building a workplace where women as well as people from 2030—these actions can be seen as a crucial step in this “catching diverse nationalities and cultural backgrounds can live up to their up.” The energy and transportation systems initiatives highlighted in full potential is an issue that all Japanese companies share. MHI the Special Feature articles are good examples of this work. And, as should make a stronger effort to diversify its workforce based the President articulated, promoting socially responsible procurement on the perspective that doing so contributes to sustainable across the supply chain based on the UN Global Compact and ISO social growth. 26000 and with a special focus on human rights is evidence of MHI’s 4. Clearer targets responsibility and commitment as a global corporation representing I applaud MHI for reorganizing its CSR Medium-Term Action Plan Japan. I hope these reforms will be put to maximum use in carrying according to the seven core subjects of ISO 26000. However, the out activities from the boardroom to the factory floor. actions described in certain subjects such as human rights and I also think it is a responsible attitude that MHI clearly stated its labor are somewhat vague. Setting more concrete targets for policy for nuclear power and how this clarifies senior management’s actions in each subject should give readers a clearer idea of what position on the issue. However, with the accident at TEPCO’s MHI envisions with regard to fulfilling its social responsibility. Fukushima Daiichi Nuclear Power Station still unresolved (as recent reports of radioactive water leaks attest) and top management The above primarily conveys my expectations with regard to future foreign nuclear related competitors are now becoming negative on CSR efforts at MHI. In closing, I would like to emphasize that CSR nuclear power, a great deal of discussion and scientific testing is starts with understanding social issues from a global perspective. still needed to determine the safety and future viability of nuclear For example, poverty is just as important an issue as the environ- power. Please take extra care and risk management to ensure ment. What can MHI do to help solve or reduce poverty? I believe transparency and accountability. In the environmental field, where that the way companies think in terms of prioritizing the various energy conservation and efficiency efforts predominate, I would like challenges facing different regions and deciding how to contribute to see increased efforts to conserve water resources, which are to their solution is in itself an important tool for enhancing competi- especially valuable for building smart cities, and biodiversity. tiveness over the long term. Lastly, anecdotes of employee activities are an effective communication tool for making MHI more accessible to consumers who only know air conditioners among the many MHI products that support daily living.

Acting on Valuable Opinions

Based on feedback from past years, in this year’s expectations. As for Mr. Fujii’s thoughtful explanation of report we tried more than ever to present information CSR starting with an understanding of social issues visually in order to communicate our pride and respon- from a global perspective, we will work to deepen our sibility in manufacturing more clearly to our diverse understanding through dialogue with the various stake- stakeholders. holders of our global operations and in accordance with We are pleased to hear Ms. Kawaguchi’s and Mr. Fujii’s our corporate creed. comments that this year’s report is a more accessible and Encouraged by your valuable feedback, we will effective communication tool, as such improvements are continue to ramp up CSR efforts across our business and no doubt a result of the efforts we made. by providing various products and technologies that Masahiko At the same time, we see the transparency and support social and industrial infrastructure, pursuing all the Arihara accountability that Ms. Kawaguchi mentioned as while a more sustainable society and sure future for Executive Vice President necessary not only in our nuclear power business but humankind and the earth. Executive Ofﬁcer also for ensuring safety and peace of mind in manufac- in Charge of CSR turing in general, and will do our best to meet your

CSR Report 2013 30