Communication BOOK 2016 CSR Communication BOOK 2016

210mm 背幅：2mm（フル版） 208mm CSR Communication BOOK 2016 CSR Communication BOOK 2016

Make Your Dreams http://www.kaneka.co.jp/kaneka-e/ Osaka Head Of ce Happen 2-3-18, Nakanoshima, Kita-ku, Osaka 530-8288, Japan Tel: +81-6-6226-5050 Fax: +81-6-6226-5037 Tokyo Head Of ce 1-12-32, Akasaka, Minato-ku, Tokyo 107-6028, Japan Tel: +81-3-5574-8000 Fax: +81-3-5574-8121

About the cover design: We at Kaneka pursue the power of science based on our customers' dreams. We have been making each dream a reality through communication with our customers and society.

This printed matter is using FSC® certi ed paper includes The cover of this book shows a scene KANEKA CORPORATION sources from responsibly managed forests. The environment-friendly vegetable oil ink is used for printing. in Osaka, Japan, where Kaneka started its businesses hoping to express those brimming dreams. We will continue to focus on communication, which we believe provides us an opportunity to make your dreams happen. 200mm 200mm

Dream Accelerate R&D to enable 1 practical use of Make regenerative medicine Your Dreams and cell therapy! Dream Happen Is it possible to further reduce CO2 2 emissions from homes Communication Is Our Start Line for the global environment? True to our goal of leveraging science to "make your dreams happen" we at the Kaneka Group have strived to ful ll people's dreams Dream through our diverse range of businesses. In the process, we highly value communication with all our stakeholders. Do you have any rough proactive discussions, we draw out people's desires and needs to provide them with new values. eﬀective 3 fertilizers Kaneka Group CSR Communication Book 2016 for agricultural produce? 2 Communication Is Our Start Line 8 Top Commitment Dream 10 Special Feature Ⅰ Food Production Support Power of science to enrich life with food worldwide 15 Special Feature Ⅱ Health Care We want to support women to Making Smiles in Africa 20 KANEKA at a Glance 22 Our Corporate Philosophy and CSR explore their 24 Our Initiatives for Social Responsibility 4 26 Corporate Governance and Compliance 28 CSR Topics 2015 future with a 32 Kaneka CSR Activities: Achievements and Evaluations 33 Kaneka Group Pro le Third Party Comment smile! 34 35 Response to Third Party Comment 200mm 208mm 208mm 200mm

Dream 1 Dream 3 Accelerate R&D to enable practical use Do you have any e ective fertilizers of regenerative medicine and cell therapy! for agricultural produce?

Health Care Food Production Support Kobe Molecular Imaging R&D Programmable closed circuit cell KANEKA PEPTIDE, a Responding to farmers expectations Center, the hub of regenerative culture system, for simple and high-performance fertilizer containing by integrating our technologies medicine and cell therapy safe cell culture yeast-derived oxidized glutathione Centers Integrating Development of Testing KANEKA PEPTIDE Around the World in All Kinds Regenerative Medicine and Cell erapy Project of Climates, Crops and Soils At the R&D centers, we focus our work "Directly overseen by Kaneka's a New High- A KANEKA PEPTIDE pilot study "In China, we are promoting its use with R&D Divisions on cell preparation for disease treatment, president, the Regenerative Medicine conducted in Hebei Province, China the recognition and support of the relevant drug discovery technologies using and Cell Therapy Project was launched in enabled many farmers to experience its government authorities in charge of In November 2015, Kaneka Group set up R&D induced pluripotent stem (iPS) cells, and April 2016 to further speed up our Performance Fertilizer effectiveness rst-hand. Conventional fertilizer registration. KANEKA PEPTIDE's centers for regenerative medicine and cell therapy in devices for cell separation and cell activities. Kaneka has a wealth of chemical fertilizers require application by success will not only bring higher income the Kobe MI R&D Center and Kobe International culture. Situated at the hub of knowledge cultivated from our business KANEKA PEPTIDE is a new high-performance the ton, while overuse degrades the soil. to farmers, it will also mean more food regenerative medicine and cell therapy, in pharmaceuticals and medical devices. fertilizer that integrates various Kaneka Business Center. Both centers are now fully In contrast, environmentally conscious supply to communities experiencing food Takayuki Miyamoto (right) we aim to contribute to healthcare and We will continue our efforts to help technologies. With the anticipated food shortage operational, and the previously scattered R&D Ran An KANEKA PEPTIDE does not leave shortages. Promoting its use with medicine in the future by developing advance regenerative medicine by from the growing global population, Kaneka divisions have been integrated to allow us to Tomohisa Kato (left)(at that time) Food Production Support Group unnecessary residue in the soil. con dence, I also hope to contribute to technologies in collaboration with RIKEN developing and applying our life science Group has set food production support as one of conduct work all the way from basic research to Regenerative Medicine and New Business Development Division the development of my home country, and other related medical institutions. technologies." its key strategic domains. commercialization. Cell Therapy Project China." For more details, see Special Feature I in our CSR Report 2015. For more details about Kaneka Peptide, see Special FeatureⅠ.

Environment and Energy ・Climate change ・Energy issues Contributing through Business Ful lling dreams to Key Strategic Domains Environment and Energy Make With the 2009 long-term Declaration of Kaneka Information and United, Kaneka Group established four key Health Care Communications Health Information ・Smarter, integrated strategic domains that embody our corporate ・Emergence of Care and industries Your Dreams aging societies Communications Communication ・Digital divide philosophy as pillars of growth and initiatives for ・Intractable society. diseases spreading Happen worldwide Food Production Support We at Kaneka Group will confront societal Is Our Start Line challenges using our products and technologies that create new value. Focusing on innovation and Food Production Support growth, we will contribute to society through our ・Surging global population businesses. ・Food shortages Previous CSR reports are available on our website. Kaneka CSR Search Dream 2 Dream 4 Organic EL lighting panels Photovoltaic Is it possible to further reduce CO2 emissions modules We want to support women to explore from homes for the global environment? their future with a smile!

Exterior insulation and double ventilation construction Thermal Exhibit at the Eco House and Storage Kaneka Africa Liaison Of ce Earning strong brand recognition system insulator Environment and Energy Eco Building Expo, March 2016 Kaneka products utilized in ZEH Health Care established in Ghana to meet from local wig stores local needs Our ZEH Solution as a Measure to Address Climate Change Providing High Value to Our Stakeholders Materials for the Beauty, Health and in Beauty Product Market Kaneka manufactures and sells materials "ZEH design entails expertise and necessary for ZEHs, such as thermal complicated documentation, which is Independence In the African market where ammable, "Kanekalon's ideal is to provide safe Net Zero Energy House insulators and photovoltaic modules, as why it is not making headway in the cheap and inferior wig products are sold, and high-quality beauty to women. well as organic EL lighting. We also offer housing industry. Kaneka began offering Kaneka Group has been providing safe Collaborating with associations of To reduce CO2 emissions from homes, the the Solar Circuit construction method, speci c ZEH solutions for the housing to Women in Africa beauty products while strengthening beauty salons, as well as our direct Japanese government is promoting the net which has superior environmental industry. We believe that our efforts to relationships with wig manufacturers, local customers such as wig makers, we zero energy house (ZEH), with a vision to make it performance, and in scal 2016, we help build more ZEHs will lead to less Kaneka Group has been operating the Kanekalon wig beauty salons and female consumers. Ms. stay abreast of market needs and nd business in the African market for more than 30 years. Hiroshi Seko (right) Grace Amey-Obeng (photo center), president dif culties that even consumers do the standard for newly built houses by 2020. Jun Ikegami began selling storage batteries for CO2 emissions, which will bene t Kaneka manufactures and sells diverse materials residential use. We also launched the society." We have achieved a high brand value by providing Charlotte Kumi (left) of the Professional Cosmetologists and not realize from our perspective as a Administration of J-Project Beauticians Association of Ghana, is maker. Our goal is to serve Africa by that are necessary for ZEHs. Corporate Planning Department cross-divisional J-Project in 2015, and safe beauty products in partnership with wig Kaneka Africa Liaison Of ce actively develop Group-wide solutions. manufacturers, beauty salons and female consumers. involved with evaluation of our products. developing higher quality products." For more details about Kanekalon wigs, see Special FeatureⅡ. 200mm 208mm 208mm 200mm

Dream 1 Dream 3 Accelerate R&D to enable practical use Do you have any e ective fertilizers of regenerative medicine and cell therapy! for agricultural produce?

Responding to Environmental Changes Contributing to Society through Business Providing Solutions and Technological Innovation in Key Strategic Domains for the Global Environment On December 12, 2015, a historic global climate deal In fiscal 2016, Kaneka began implementation of a was adopted by 196 countries at COP21 in Paris, new mid-term plan. and Improving France, that is a framework of measures against Kaneka Group is making every effort to promote global warming beyond 2020. This Paris Agreement projects that can help address environmental and Quality of Life indicates each country's strong sense of crisis for energy problems by bringing a solution to zero energy increasing disasters of climate change worldwide. houses using combination of our products such as through New Value Creation Global businesses such as ours must further advance thin-film silicon photovoltaic module, insulation initiatives addressing environmental issues within our materials and storage batteries that serve to reduce future businesses. the weight of vehicles and airplanes. In addition to Meanwhile, technological innovation continues to such a solution, we offer new value such as grow at an ever-accelerating pace, as we see biopolymers to conserve ecosystem. advances that were once thought likely to take Kaneka is also making a concerted effort to utilize our several years start to materialize before our very eyes. expertise in the business, where human health care People's lifestyles and workstyles are being and food production are concerned, through bio- redesigned while their needs are profoundly pharmaceuticals, regenerative medicine and cell changing. therapy, and plant supplements. We believe that an environment where diverse people Through these products, we at Kaneka are carrying can work proactively will be the foundation of our out our corporate philosophy: With people and competitiveness. We must endeavor to make this a technology growing together into creative fusion, we reality. will break fresh ground for the future and tie in to explore New Values. We are also committed to Achieving the Declaration of Kaneka challenge the environmental issues of our planet and United contribute to upgrade the quality of life. As set forth in our long-term vision formulated in 2009, the Declaration of Kaneka United for the future, “Safety First” is our Top Priority Kaneka is focusing on “innovation and growth”, Based on our belief that “safety is a competitive positioning research and development (R&D) and a strength in itself” for manufacturers, Kaneka's global network as the driving force behind our growth. management policy for all operations is “safety is our In fiscal 2015, we went ahead with plans to top priority.” To achieve our goal of zero accidents, commercialize organic EL lighting, biopolymers and we will further raise safety awareness and strengthen protein A resins. We are also strengthening our R&D disaster prevention through continuous initiatives in the medium to long term by establishing a together with top management, including facility regenerative medicine and cell therapy R&D center in inspections by Board of Directors and CSR safety Kobe. Creating new social value through R&D enables and quality inspections. us to raise our corporate value and fulfill our social responsibility, resulting in our growth and Kaneka Group joined the United Nations Global development. By developing technologies and Compact in 2015. We are working on sharing our products that protect the environment and improve corporate philosophy to gain the trust of our energy efficiency, we are moving forward in our stakeholders worldwide by implementing corporate businesses with environmentally responsible initiatives in line with the Ten Principles of the UN management. Global Compact in the four areas of human rights, In terms of a global network, after establishing our labour, the environment and anti-corruption. regional headquarters in Asia and America in April We sincerely welcome your continued support. 2012, we established a European regional headquarter in Belgium last year. Utilizing this headquarter, we will further promote our business operations in Europe as well as in Africa and the Middle East. It is essential for us to understand the customs and culture of the countries and regions Mamoru Kadokura where we operate, and offer products that suit local President customer needs. Kaneka Corporation

08 09 Special Feature Ⅰ Food Production Support Source of Kaneka

Power of science to enrich life with food worldwide

With its dedication to addressing social issues profile of fertilizers. through business, Kaneka Group has been GSSG is a natural ingredient commonly found in expanding its core technologies. As one of its core plants and animals, including human cells. Kaneka technologies since its establishment, the Group’s developed the technology to efficiently produce fermentation technology has created functional naturally existing GSSG. Moreover, in collaboration Material foods such as bread yeast and coenzyme Q10. We with the Research Institute for Biological Sciences, Source of Kaneka are further expanding into products that contribute Okayama Prefectural Technology Center for to increasing food supply, such as KANEKA Agriculture, Forestry, and Fisheries, which has been PEPTIDE, a new type of fertilizer that helps address studying the effect of GSSG on plant growth, we food scarcity, and an anti-freeze ingredient that are developing effective plant fertilization methods. helps reduce food waste by retaining the quality of “We use fermentation technology for glutathione Story frozen foods, in collaboration with universities and production and pharmaceutical technology for the research institutes. purification process, both of which are Kaneka 食 Group's core strengths.” (Taku Mohri, Bioproducts Research Group, Biotechnology Development Food Laboratories)

Pilot Studies All Over the World Find 10% - 40% Yield Increase New fertilizer for agriculture Effective technology will further benefit society KANEKA PEPTIDE when it is used widely. Anticipating the global Technology to Efficiently Produce market, Kaneka Group has begun pilot studies of Oxidized Glutathione (GSSG) Based KANEKA PEPTIDE on various crops in collaboration on Fermentation with universities, agricultural experiment stations and large-scale farms in countries such as Vietnam, KANEKA PEPTIDE is a new high-performance Thailand, India, China, Canada and the U.S. fertilizer containing oxidized glutathione (GSSG), Remarkably, 10% - 40% increases in yield have which provides nutrients to plants. GSSG works as a fertilizer to make plants grow effectively. It causes corn kernels, for example, to grow larger even as the number of kernels increases. Heavy use of conventional chemical KANEKA PEPTIDE fertilizers has reached the limit of their ability to We are targeting more increase yield, while some have also been known than 10 billion yen in sales in 2020 by to cause soil degradation. GSSG, on the other accelerating our global hand, stimulates the innate power of plants to business development further increase yield while improving the ecological

The Effect of KANEKA PEPTIDE

Application Around 800 million or approximately one in nine people in the world today are Plant growth Crop harvest on plants starving. Meanwhile, in developed countries such as Japan, Europe and the U.S., ● GSSG contained in KANEKA PEPTIDE ● Spray KANEKA provides nutrients to plants roughly one-third of food is wasted. Food wasted by consumers, from leftovers PEPTIDE on leaves

and passed expiration dates, amounts to around 222 million tons each year. ● Mix KANEKA CO2 This is comparable to the total food production of sub-Saharan Africa (see note 1). PEPTIDE into the soil CO2 Kaneka Group has initiated efforts to increase global agricultural production and reduce food waste. Expected Note 1: Sub-Saharan Africa's total food production is 230 million tons. Source: Global food losses and food waste－Extent, causes and prevention, FAO, 2011. harvest is bigger than usual

10 11 Special Feature Ⅰ Food Production Support Source of Kaneka

been confirmed in potato, cassava, sweet potato, corn, onion, eggplant and other crops. Preserving the Quality of Frozen Food Another key to gaining more customers is its simple application. A method of integrating the product Anti-freeze Ingredients into existing fertilization systems has to be devised, Successful Natural Extraction Anti-freeze Protein Discovered in and Mass Production with Open since even a single spraying can become costly in Antarctic Fish countries such as the U.S., where efficient farming Innovation is practiced over vast land areas. Furthermore, In subzero temperatures, water freezes in the In 2008, Kaneka Group collaborated on R&D with when we expand the product's range to small- bodies of ordinary living organisms and destroys a joint venture company and Kansai University, scale farms and regions where people are suffering the cells. Fish, plants, insects, mushrooms and which was promoting open innovation; in 2012, from starvation, it is crucial that we implement other life forms living in the Antarctic and other cold anti-freeze protein was successfully mass- awareness programs and create fertilizer formulas regions can survive because they have anti-freeze produced from radish sprouts. Since it allows for spray amounts and timing. We are conducting proteins in their bodies that protect them from defrosted food to be savored without losing such pilot studies to resolve each of these issues. freezing. Anti-freeze protein was first discovered in its taste, smell and physical properties by just “Even with the limited workforce available for R&D, an Antarctic fish in 1969. adding a tiny amount of 0.02% - 0.2% to the the food issue is such a pressing one that we are There are many benefits in applying anti-freeze food, our product has earned an excellent testing various methods for crops in various protein to food products. For instance, “freezing reputation from many food manufacturers countries. We need to launch this product damage,” which leads to a decline in the food’s of frozen sushi, udon noodles, kamaboko simultaneously worldwide for timely widespread taste and texture, does not occur, and the quality (steamed fish paste), rolled eggs, gyoza (fried adoption. With its power to enhance plant growth, of the frozen food after thawing is maintained ground meat dumplings) and others so far. In GSSG has the potential to expand agricultural land Developing formulations while studying easier since it can inhibit the growth of ice crystals during 2015, we launched another new product: anti- to areas with poor soil or those prone to cold dispersion and irrigation for farmers storage. Moreover, products that were once freeze polysaccharide extracted from enoki weather damage.” (Taku Mohri) difficult to freeze can now be stored frozen, which mushrooms. It is tolerant to heat and acid as it lengthens their shelf life and reduces food waste. is not a protein, and is used with hamburger and Encouraging Agriculture through The challenge was determining which organisms deep-fried chicken. Kaneka Group currently has unknown. “That's why I believe we can still make Materials R&D for Plants have anti-freeze protein that can be extracted and over 100 products using anti-freeze ingredients. great strides with plants. We hope to encourage how to extract it. A stable industrial production “I think Kansai University chose us as its partner As the pilot studies progress in various parts of the agriculture by developing ingredients that are useful method for anti-freeze protein did not exist. in open innovation because, as a B2B company world, an agricultural experiment station staff to plants.” (Taku Mohri) Taku Mohri Kaneka Group began dealing with many provided the Group with an important insight: the Moving forward, Kaneka will continue to Bioproducts communicating with one of the food manufacturers human body has been extensively studied in the Research Group concentrate on technologies acquired from world's foremost authorities in Japan, they course of developing therapeutic drugs and Biotechnology advanced research for food production support, Development on ice crystals,CO2 Professor believed that we supplements, while many aspects of plants are still Laboratories one of our key strategic domains. CO2 Hidehisa Kawahara of Kansai can make anti- University's Department of Life freeze ingredients Science and Biotechnology. more widespread. Atsushi Anti-freeze protein For this project, Stakeholder Message Takaragawa Kaneka Group Exploring uses in frozen New Business facilitated the "I hope more young people will work in agriculture. noodles, processed egg Planning Group Kaneka and I share the same motto: For the farmers." products, cooked rice, fish Strategic Planning commercialization paste products and desserts Department of the university’s The Okayama Prefectural Technology I began collaborating with Kaneka their career. KANEKA PEPTIDE will Foods Division Center for Agriculture, Forestry, because we share the same motto certainly help increase agricultural and Fisheries works on developing and goal: For the farmers, providing income; actually witnessing this Ice crystals grow, The Expected Benefit causing tissue damage and promoting technologies that products at reasonable prices. themselves will make (Frozen udon noodles with anti- and decline in quality freeze protein added) support agriculture, forestry and Further agricultural development more young people of Anti-Freeze Ingredients fisheries, while fostering their future requires products to be available at aspire to work in No anti-freeze protein added leaders. At the Research Institute affordable prices to everyone. Also, agriculture. Water for Biological Sciences, we conduct I look forward to Kaneka’s efforts Freezing basic, fundamental research in to promote the effective use of Ken'ichi Ogawa Storage biotechnology that promotes KANEKA PEPTIDE. Dr. Sci. (Kyoto Univ.) Surface is white and desiccated Director, Plant Redox Ice crystals Anti-freeze substance agriculture, manufacturing and As Japan’s agricultural population Regulation Research Group form from prevents ice crystals frozen water industries in the environmental field. declines and ages, the key to raising Research Institute for from growing Biological Sciences Anti-freeze protein added I have studied GSSG, an ingredient our food self-sufficiency rate is to Okayama Prefectural in KANEKA PEPTIDE that carries improve profitability, so that young Technology Center for Agriculture, an important function. people will consider farming as Forestry, and Fisheries

Anti-freeze substance added Quality preserved No milky surface

12 13 Special Feature Ⅰ Food Production Support

research seed.” (Atsushi Takaragawa, Manager, New Business Planning Group, Strategic Planning Department, Foods Division) With the growing Research on New Ingredients to need for frozen Reduce Global Food Waste foods, we are developing simple In April 2015, our anti-freeze protein was awarded products for the the 2015 Commendation for Science and expanding market Technology Prize by the Minister of Education, Culture, Sports, Science and Technology (Development Category). This prize honors the achievements of those who have invented or will allow us to get closer to nearly zero waste.” researched and developed groundbreaking work (Atsushi Takaragawa) that is actually used or applied to improve people's “A long time ago, people used to throw food out.” lives, society and the economy. We believe the time will surely come when we will “I believe reducing food waste is a really worthwhile look back and say this. Kaneka Group will continue project for society. Shelf life will be extended exploring and spreading the use of new anti-freeze dramatically if all kinds of food can be frozen. This ingredients. Wigs Stakeholder Message Made of "The new frontier in Japanese confectionery. Freeze while still delicious; enjoy by natural thawing." Special Feature Ⅱ Health Care Kanekalon Kanekalon is a modacrylic fiber closely Kagetsudo makes and sells fresh taste after the natural thawing when they have time. While playing resembling the texture of human hair. Currently capturing the largest market Japanese confectionery, such as process. And because it is a natural sport, they can then easily get their share in Africa, wigs made of 100% freshly pounded soft rice cakes and ingredient, I can proudly inform the supply of energy just by thawing the Kanekalon are widely known for their sweets using finely ground green customer, “This is the new frontier in product naturally. high quality. tea powder, named after Sakai, the Japanese confectionery.” With such safe ingredients provided birthplace of the famous master of Our first product using the anti- by Kaneka, we hope to devote all Making the Japanese tea ceremony, Sen no freeze ingredient is the One Charge our efforts into Rikyu. S, which was developed for athletes. expanding and We sell soft rice cakes using We wanted to create a product that introducing new Kaneka's anti-freeze ingredient. can easily supply energy to people rice cake desserts Japanese confectionery such as participating in sport, who lead busy in the future. rice cakes are best eaten fresh, as lives with work and so forth. With their flavor quickly deteriorates. this product, people can stock up Smiles in However, when they are frozen with the anti-freeze ingredient, they retain their freshly made flavor, and our customers can enjoy this Africa Masahiro Maeda Over 30 years have passed since Kaneka Group started exporting fiber for hair accessory Kagetsudo The rice cake dessert One Charge S products. We are not just another raw materials manufacturer. We have built a relationship based on trust by being deeply involved with the market and offering products that fit our customers' needs. P.16～17 We have also been donating part of our sales to the school meal program of the World Food Programme (WFP) since 2013, thereby helping improve school attendance rates of children in Africa. P.18～19

14 15 4

Special Feature Ⅱ Health Care Improving Women’s Quality of Life in Africa

6 7 1 8 Kanekalon, a Brand for Women Exploring Their Future

“When I was fitting a young girl with a wig for the first time in her life, her face lit up the moment she saw herself in the mirror, as if she was saying: I can't believe this is really me! It was also a wonderful moment for me. Kanekalon is a brand that makes a 4 difference to women exploring their future.” (Yukiyo Oda, Technology Africa’s 2 Management Department, Kanekalon Hair Goods Market Division) Women in Nigeria and other countries Kanekalon’s wigs can be styled in in sub-Saharan Africa generally enjoy various ways, because they are light, dressing up by adorning their heads with easy to braid and is naturally beautiful. colorful cloths, or adding hair extensions and wigs. Kaneka Group has helped The hairs of African women are difficult improve women’s quality of life through 17Yukiyo Oda and Koshi Imazu visiting local stores to explore to comb through because of their curls; safe and high quality beauty products market trends 236Miss Kanekalon beauty pageant. Over wigs enable them to realize their offered in partnership with wig manufacturers, 700 people from the hair industry and corporate partners attended, including hairdressers 4 Local hairdressers holding gorgeous and elegant self. In the spirit beauty salons and our women end-users. a Kanekalon product 5 A lively Ghana market 8 Smiling local woman wearing a Kanekalon wig of helping women working hard toward 3 5 their dreams, we held the Miss Kanekalon beauty pageant in Nigeria in 2015. The winners, a Senegalese buying large quantities of Kanekalon wigs, and important to send out to the world more hairdressers with the Stakeholder Message was prompted to fly to Africa to study the market. Confirming right knowledge and skills. Training professionals in who were chosen based on the two selection criteria of inner "Kaneka is like family to us, and outer beauty, gave speeches about their ideas on that there was a potential market in Africa, we entered the hairdressing schools also supports job creation and economic spreading high-quality hair goods together." African beauty and their dreams. “Forming the women’s Senegalese market together with our business partner in the independence for the youth.” (Yukiyo Oda) The FC Group of Companies provides safe and U.S. Today, we cover the market over the whole of sub- Kaneka is also planning to start initiatives that are more self-identities is the same as creating a culture. In the future, high-quality beauty to Ghanaian women through the we plan to expand the Miss Kanekalon beauty pageant to Saharan Africa in partnership with various wig deeply rooted in Africa as soon as possible. “In 2016, management of beauty salons and hairdressing schools, cover the whole of Africa.” (Koshi Imazu, Marketing Group II, manufacturers. Kaneka Group will establish the Kaneka Africa Liaison and production and sales of related products. Also, the beauty salon association, which I chair, is composed of Kanekalon Division) Kanekalon’s business model is unique, as we have built our Office. With the new base close to our partners and end- about 100 salons, and endeavors From among more than 3,000 applicants, the top three own value chain instead of just being upstream as a raw users, we can further collaborate with various stakeholders to maintain and improve the winners are expected to actively work in many fields as materials manufacturer. For hairdressers working in beauty and capture the constantly changing trends in Africa to meet standards of the beauty industry. Kanekalon brand ambassadors for one year. salons, we hold training seminars on correctly assessing people’s and community's various needs.” (Koshi Imazu) Kaneka’s wigs do not just provide a variety of styles to quality and new styling methods, and styling beauty We will further strive to be trusted by our stakeholders Ghanaian women; they also Taking Root in African pageants. For wig manufacturers, we have introduced new through new job creation and other have a high-quality feel and Countries, Supporting the styles in the African market by providing advice on quality efforts for the community while do not easily fade and discolor Value Chain control and proposing plans for marketable products based strengthening our value chain by under light. We trust Kaneka like family; they train local Kaneka Group started cultivating on our market research. offering products and creating staff well and share useful the African market more than 30 frameworks to meet local needs. information with us. We are Ms. Grace Supporting Job Creation looking forward to Kaneka’s Amey-Obeng years ago, in the future products and services CEO, FC Group of Companies Kaneka Group is joining hands with a group partner, a wig Yukiyo Oda early 1980s. An that will contribute to African President, Professional manufacturer in Kenya, who has been assisting local Cosmetologists Technology employee, staying Koshi Imazu women’s health and beauty. and Beauticians Association Management at New York for a hairdressing schools for many years. “To deliver the message of Ghana Department Marketing Group Ⅱ Kanekalon Division business trip, saw of Kanekalon’s quality and attractiveness to end-users, it is Kanekalon Division

16 17 Special Feature Ⅱ Health Care

Stakeholder Dialogue As a WFP Corporate Partner Since 2013, Kaneka has been supporting the World Food Programme (WFP) school meal program in Africa, where Kanekalon business operates.

©WFP/Rein Skullerud

Improving People's Living Standards Leads to Steady Business Growth

As a WFP corporate partner, Kaneka supports the school meal program in Sierra Leone, one of Kanekalon’s markets. At the Japan Association for the World Food Programme, The World Food Programme (WFP) February 26, 2016 The World Food Programme (WFP) is the world's largest By donating part of our sales of Kanekalon to this program, Sixth Stakeholder humanitarian agency fighting hunger worldwide, which is we supplied school meals to about 700,000 elementary part of the United Nations, and is voluntary funded. The school children in total from 2013 to 2015. We decided to (Summary) Japan Association for the World Food Programme is a Dialogue certified nonprofit organization supporting it in Japan. ©WFP continue our support for this program from 2016 until 2018. Kaneka holds dialogues with various WFP is in charge of logistics and telecommunication; In areas where the elementary school dropout rates of girls stakeholders to exchange different in emergencies, aiming to bring food and other relief are high, we are also providing rice and vegetable oil to girls supplies to the field within 48 hours, with 70 airplanes, perspectives and opinions to deepen mutual 5,000 trucks and 20 ships for this purpose. whose families lack food. understanding, and collaborate by sharing common issues. We received the following feedback from a child in the On February 26, 2016, we held a dialogue elementary school supported by the program: “(Because of with the Japan Association for the World the WFP school meal program,) I can eat breakfast and Food Programme to discuss the importance lunch at school every day. I can concentrate in class and of continuing support and their expectations ©WFP/Hukomat Khan ©WFP/Lou Dematteis actively take part in the discussions. My grades are also from corporate support. better and I don’t get sick. I am thankful for the WFP and its supporters.” "Solving social problems "We hope Kaneka will teach takes a long time. children about the situation Continuous support is needed." on global food and hunger." ©Mayumi.Rui Enjoying lives at school, studying and gaining knowledge WFP works toward a world without At an event held by one of our sponsor allows the children to dream of their future. Dreams support hunger in Africa and various other companies in Japan, we conducted a food children to grow up to play key roles in helping develop a regions. Almost none of its tasting of the corn-based porridge supplied future society. As a WFP corporate partner, Kaneka will programs end in a single year. We to the local people in Africa. Through the continue to help improve the living standards in communities Kunio Suzuki are truly grateful to Kaneka for its Yuji Kotera event children’s attitude toward food Executive Officer long-term commitment to help the General Manager changed: They had more appreciation for we operate, which will lead to steady growth of our Japan Association Business Development communities of Sierra Leone for a their food. I believe talking about the businesses. for the World Food Japan Association Programme total of six years. for the World Food global food situation at corporate events Programme also educates the children about food.

We will continue our commitment to support the At our 65th anniversary event held in 2014, we From development of African countries in our own way, From introduced the school meal program and conducted Kaneka which we believe will strengthen the communities' Kaneka fund-raising activities. We will continue working on trust on us and support our business growth. awareness programs in the future.

©WFP/Rein Skullerud Further information on our dialogue with the Japan Association for the World Food Programme (JAWFP) is available on our website. Kaneka CSR Search

18 19 Further information on the data is available on our website. KANEKA at a Glance Kaneka CSR Search The results of our major CSR activities in fiscal 2015 are presented below.

Participants in Start-of-Day Emergency Drills Support after the Kumamoto Earthquake We summarized the resources and materials used and the emissions and (FY2015) Materials Balance products that resulted from manufacturing at all four parent plants in fiscal 2015. JPY INPUT MAIN OUTPUT All 4 parent millions plants Raw 10 Donated to aid people affected by the April 2016 Materials 1,143,000 t CO2 t-CO NOx t 1,115,000 2 856.2 Kumamoto earthquake in their recovery efforts. , We also donated 1,000 sheets of Kanelite Foam 6Implemented emergency143 drills especially for the insulation in response to a request from the area. Energy safety confirmation sequence, calling out the kl COD t SOx t names of participants and examining emergency (crude oil equivalent) 425,000 263.4 71.9 hotlines. ▶Safety and Disaster Preparedness

PRTR Final law-designated Landfill Water 3 t t 21.4 million m substances 77.1 Amount 4.1 ISO 9001 Certification Consolidated Payout Ratio For the period ended on March 31, 2016, targeting a stable, consistent consolidated payout ratio of 30%. divisions and ▶Dividend Policy and Information Disclosure group companies Energy Intensity Environmental Investments % 41Obtained the international certification for JPY quality management to improve customer 28.6 satisfaction. ▶Parent and Group Company Certification Initiatives for the Global Community Six-year Participants in CSR Briefings Since fiscal 2014, CSR 83.5Energy saving efforts combined Briefings have included participation in with increased production Group companies in allowed us to reach our goal. Japan. In fiscal 2015, We achieved an overall we held briefings at TFT 16 locations of six decrease of 2.9% from the Since 2010 we have previous year. millions companies. ▶Promoting Corporate participated in the Table for ▶Measures to Combat Breakdown: Air quality: 44.8%, Work Social Responsibility Two (TFT) program, with Climate Change 752environment: 23.8%, Water quality: 19.6%, (CSR) 20 yen per meal from each 320 of the cafeterias at four Final Landfill Disposal Rates Noise reduction: 6.8%, Dust: 2.7%, Odor reduction: 2.3% business operation sites going to support school Total: 12.8 billion yen (FY2000-FY2015) lunches in Africa. ▶Environmental Accounting ▶Initiatives for Local and Global Communities

CO2 Emissions Intensity Safety improvements in potential unsafe areas %

Of the 67,856 tons of total waste generated, only 0.0074.7 tons were disposed of in landfill. This marks the tenth consecutive year of reaching our zero For all four parent plants. We achieved emissions goal. 77.8 our fiscal 2015 goal, far exceeding ▶Reducing Waste and Preventing Pollution our fiscal 2020 goal of 74. % ▶Measures to Combat Climate Change The Osaka Plant worked on logistics safety 90.6improvement, resulting in improvements in 48 out of 53 potential unsafe locations. ▶Enhancing Sustainable Procurement

20 21 Kaneka Group defines its Basic CSR Policy as a guideline for action for each employee and the foundation of its management philosophy, the Declaration of Kaneka United. Guided by this policy, we strive to improve our social responsibility performance as well as our corporate value Our Corporate Philosophy and CSR to further improve the satisfaction of our key stakeholders—employees, society, customers, the environment, shareholders and investors, and vendors.

Implementing CSR Kaneka Group established its CSR Management Philosophy Structure Kaneka Group’s Stakeholders Committee (chaired by the president) “Declaration of Kaneka United” to strengthen our strategies to fulfill our social responsibilities in a more Expresses our raison d’être and our social mission coordinated manner. The committee formulates and updates our Basic CSR With people and technology growing together into creative fusion, Employees Policy, develops action plans for the we will break fresh ground for the future and tie in to explore New Values. Our employees include the entire Group, and assesses progress. We are also committed to challenge the environmental issues of our planet people who work for the Kaneka Under supervision of the Committee, the and contribute to upgrade the quality of life. Group, as well as their families. following four subcommittees promote Kaneka Group’s We offer employees appropriate and implement our initiatives: the Safety CSR Activities treatment, remuneration, and Human Health Subcommittee, Earth self-ful llment, and safe working Environment Subcommittee, Product Group CSR activities Customers environments. Society aim to increase Safety Subcommittee, and Compliance Our customers are Including citizens and stakeholder Subcommittee. 1 the people who consumers. satisfaction through In fiscal 2015 the CSR Committee met Describes our key values business activities, purchase Kaneka We can increase Corporate Philosophy twice, while the Safety & Human Health thereby boosting Group products. enterprise value by enterprise value. subcommittee met once and each of the Toward an Even More Impressive We provide them with Employees ful lling our social and Productive Future quality products and responsibilities. Earth Environment, Product Safety, and the Hold in your hands the future services, ensure We consider such Compliance Subcommittees twice. you have always dreamed of. product safety, and factors as plant 2 Customers Society We are a highly perceptive and disclose information. operational safety from collaborative value-creating Corporate Ideals the perspectives of social contributions, group or, as we like to say, a Management “Dreamology Company. Kaneka welfare, and community President (see note)” Group engagement. ※Note: "Dreamology" is Policy, Measures, and Inspection Committees an expression coined from Shareholders The 'dream' and 'logy' (science). 3 Shareholders and The Our "Dreamology Company" Environment CSR Committee is a "highly perceptive Investors and Environment Chairperson: President and collaborative Basic CSR Policy value-creating group." Investors By this we mean the They recognize the Vendors global environment. Administration Office CSR Committee value of our corporate We ful ll our social Promotes and supports CSR initiatives Provides an action agenda for each employee for brand and own our responsibilities by materialization of our Corporate Philosophy shares. considering the Safety & Human Health Subcommittee We offer appropriate environment in our Focuses on occupational and process safety The Kaneka Group will ful ll our corporate social responsibility through the returns and disclose business activities, Vendors including raw materials materialization of our corporate philosophy with the earnest and timely information so Earth Environment Subcommittee procurement, forward-looking efforts of each employee. we can increase Raw materials suppliers and Concentrates on global environmental issues overall trust in the contractors. manufacturing, and 1. We will strive to fully understand the cultural backgrounds, manners and customs of Group. We build mutually bene cial transportation. the countries and regions where we do business as a means of actively contributing Product Safety Subcommittee relationships with vendors, Oversees product safety and quality assurance to local societies and communities. ensuring that transactions 2. We will abide by all relevant laws and regulations and, in undertaking our business are fair and that we offer activities, conduct ourselves in a fair manner based on free competition. equal opportunities to do Compliance Subcommittee Focuses on corporate ethics and compliance 3. We will place high priority on communicating with all our stockholders and business. stakeholders, and will disclose all pertinent information. 4. We will respect the personalities and individuality of all our employees to support and encourage the development and utilization of their abilities. 5. We will uphold safety as the top-priority concern of management as we dedicate our best efforts to securing a sound and safe workplace environment, offering safe products, and working to protect the global environment.

22 23 Through our CSR efforts, Kaneka aims to contribute to society as a corporate citizen. We have identified four key strategic domains through which we leverage our strengths, such as through our research Our Initiatives for and development efforts, to help solve societal challenges by offering new technologies and products. We are also guided by the goals of the United Nations Global Compact, which we joined in March 2015, and the Fourth Social Responsibility Edition of the Global Reporting Initiative (GRI) guidelines.

Process1 Establish our vision, Evaluation and develop our action plan Action Plan Feedback The CSR Committee chaired by the president

Key Strategic Domains Business Clusters in 2020

Brand Concept Existing Business Units ＊ Climate change Realizing Sustainable a Society ＊ Energy issues PVC & chemicals High-performance Plastic foam ＊ Smarter, integrated industries plastics products Environment and Energy ＊ Digital divide Global environment Health care solution Electronic Information Food products Kanekalon materials Health Care and Communications Integrate with sustainable business operations and Better Food and food Medical devices Quality of life Solar energy Food Production technology development quality production Support of life support

＊ Emergence of aging ＊ Surging global population societies Information ＊ Food shortages and ＊ Intractable diseases Communications Process 3 spreading worldwide Gather evaluations and feedback Process Stakeholder dialogue, third-party comment, 2 and questionnaires conducted both inside and outside the Group Evaluate initiatives to identify problems Information Disclosure (CSR Report) Safety & Human Health Subcommittee, Earth Environment Editorial Committee Subcommittee, Product Safety Subcommittee, and Compliance Subcommittee

Support for the United Nations Area Global Compact Human Social Concerns and The UN Global Compact is a voluntary code rights of conduct for corporations. Seeking to have a Labour global impact through our business operations Social Demands and CSR efforts, Kaneka Group actively shares United Nations Global Compact, information on our views and activities with our Environment Network Japan Global Reporting Initiative (GRI) Guidelines; WE SUPPORT stakeholders and the international community, Anti- while continuing to contribute to sustainable corruption Responsible Care Global Charter, and others growth for our world. Responded to global social responsibility 2016 trends and growing social demands Renewed the CSR website 2015 Provided a wider range of information to stakeholders Joined the UN Global Compact Disclosed information Collected evaluations and comments Introduced initiatives to implement the Global History of Our CSR Efforts to stakeholders from direct stakeholders 2013 Compact's Ten Principles in four key areas 1999 2009 2010 2011 Renamed the digest version of the CSR Established the CSR Division Report to the CSR Communication Book Further strengthened activities through direct Started publication Created our long-term vision Commenced publication of CSR Reports Started Stakeholder Dialogues Strengthened the role of the publication as supervision of the president of Responsible Care "Declaration of Kaneka United" Convened the CSR Editorial Committee Dialogues held with local governments, regional councils, a tool for communication with stakeholders Reports Established the CSR Committee Began conducting internal and external questionnaires university students (Kobe University), and others

表紙についてカネカが追究するカガクのチカラとは、「あったらいいな」という子どもたちの自由な発想が原点です。その瞬間を表紙で表現してみました。 CSR Communication Book 2013 3 つのはカネカで、常に子どもたちのそばにいて未来を支えています。 corporate social responsibility また、3つのは特集の色とも連動しています。 In March 2015, Kaneka Group became a signatory to the UN Global Compact. ? Since fiscal 2015, we have participated What’s CSR? corporate social responsibility in the working groups of the Global ! Compact, which enables us to gather Joined the UN a wealth of information about CSR for Global Compact our new initiatives through enhanced

CSR Committee meeting CSR Editorial Stakeholder dialogue held in 大阪本社〒530-8288 大阪市北区中之島2-3-18（中之島フェスティバルタワー） Learning Forum Tel.06（6226）5050 Fax.06（6226）5037 ® communication with other companies. この印刷物は責任ある管理がされた森林からの材を含むFSC 認証紙を使用しています。東京本社インキは環境負荷の少ない植物油インキを使用しています。〒107-6025 東京都港区赤坂1-12-32（アーク森ビル） Committee meeting November 2012 at Kobe University Tel.03（5574）8000 Fax.03（5574）8121 The first CSR Report CSR Communication Book CSR Website The first RC Report 24 25 Guided by our Corporate Vision, we at Kaneka aim to fulfill our corporate social responsibility and achieve good corporate governance, which will allow us to provide shareholders and investors with sustained corporate growth and improved corporate value over the medium and long term, while maintaining good relationships with our stakeholders, Corporate Governance and Compliance including our customers, the communities where we operate, our business partners, and our employees.

with the Accounting Auditor and the CSR Division's all of whom are required to submit a pledge. Additionally, Corporate Governance Structure Internal Control Department. Auditors are given a space to Compliance CSR evaluation audits were carried out for all Group ❶ Basic Principles of Corporate Governance periodically exchange views with the president, and monitor Compliance with relevant laws and regulations is companies in Japan, the U.S. and Europe. We also The Board of Directors, on behalf of the shareholders, is the state of business operations at least once a year, by important to our corporate management as well as to all started site visits of Group companies in Japan for responsible for the company's sustainable growth and attending key meetings of the Board of Directors and those directors and employees at the Kaneka Group. antitrust-related training. for increasing corporate value in the medium to long term of the Management Committee, which decides on the Our corporate Intranet provides ready access to Moreover, we set up compliance consultation hotlines through efficient and effective corporate governance. The implementation of important matters, and division head our Compliance Guidebook, which provides a clear both internally and with outside law firms in order to Board of Directors exercises its oversight functions on meetings. explanation of our Ethical Code of Conduct as well answer inquiries from those within the Group. We strive overall management to ensure fairness and transparency, Moreover, independent external director's meetings are as the laws and regulations to be observed by all of to respond quickly to provide a rapid resolution to any as well as appoint management positions, evaluate held and an appointment and remuneration advisory our directors and employees. Additionally, a variety of concerns that may arise. and determine remuneration, evaluate serious risks and committee will be created as an ad-hoc committee to make training sessions and meetings, and activities of the determine strategies to counter them, and make the best full use of independent external directors. Compliance Subcommittee ensure that we strictly adhere decisions on important business operations. Kaneka has adopted the executive officer system to to our compliance policies. ❷ Corporate Governance Structure separate the oversight function of directors from the The compliance online course for all employees, We currently have two independent external directors implementation function of business operations, which also launched in 2014, was also conducted during fiscal and two independent external auditors. Since both the facilitates decision-making and clearly defines roles. The 2015, and in fiscal 2016 it will be extended to Group overseeing of business operations by the Board of Directors Board of Directors decides on key management strategies companies in Japan. and auditing by the Board of Auditors are functioning and business operations of the entire Kaneka Group, while Training sessions on the Antimonopoly Act are well, Kaneka has chosen to be a Company with Board of executive officers handle business operations in their conducted regularly with all of our managerial officers Auditors under the Companies Act. respective areas of responsibility. involved in sales, purchasing, and business development, The Board of Directors makes resolutions on important Division heads, as well as executive officers appointed A compliance training session matters related to the management of the Kaneka Group by the Board of Directors, exercise extensive authority Basic Policy on Our Internal Control System after deliberation by the Management Committee, which over daily operations. However, directors handle several Systems for ensuring proper execution of duties by the Board of Directors and includes the president. There are at most 13 board divisions to ensure overall coordination and hold monthly employees adherence with laws, regulations and articles of incorporation. members. Of these, two are independent external directors division head meetings to enable the directors and auditors We disclose Appointment of a minimum of two independent external directors to strengthen to strengthen the oversight function. Directors serve to directly hear progress reports from each division head. 1 the supervisory function of the Board of Directors. information about for a period of one year to clearly define management The Internal Control Department of CSR Division evaluates Establishment of an Appointment and Remuneration Advisory Committee as our corporate responsibilities. the effectiveness of internal control and conducts an 2 an advisory committee to the Board of Directors in order to ensure sound ❸ Internal Audit internal audit. corporate governance practices. governance on our Auditors and the Board of Auditors, on behalf of the ❹ Corporate Governance and CSR Facilitation of an independent external director's meeting, comprised of website. shareholders, are responsible for ensuring healthy and Chaired by the president, the CSR Committee was independent external directors and independent external auditors, to discuss sustainable corporate growth, and for establishing a established to ensure that we adhere to laws and 3 corporate governance-related matters, and to report to the Chair of the Board structure with good corporate governance that can gain regulations, are accountable to our stakeholders, and are of Directors any issues and improvement measures. Establishment of the CSR Committee, chaired by the president, to lead our social trust by checking on the performance of directors engaged in activities that contribute to sustainable social 4 in regard to their duties. The Board of Auditors comprises progress. The CSR Division was created in April 2015 as CSR efforts and Responsible Care activities. four members, two of whom are independent external a division that directly reports to the president to reinforce General responsibility of the Compliance Subcommittee, which falls under auditors in principle, and performs audits in coordination CSR initiatives. the CSR Committee, to oversee the Group's corporate ethics and compliance 5 programs and procedures; including coordinating programs; monitoring progress; verifying business compliance, establishing and operating appropriate consultation and creating a whistleblowing mechanism. Corporate Governance Structure Basic policy Corporate Consolidation of special bodies to oversee programs to address company-wide on corporate governance General Meeting of Shareholders issues, including the subcommittees under the CSR Committee, namely the governance report Appointment 6 Safety & Human Health Subcommittee, the Earth Environment Subcommittee, and the Product Safety Subcommittee. Chair of Board of Independent External Director's Meeting Directors Report Relevant internal regulations to ensure compliance with laws; and education Appointment Appointment and 7 and training programs, self-checks and audits to ensure such regulations are Board of Directors Remuneration fully understood and complied with. Report Advisory Committee President Appointment Implementation of strict measures to ensure that the Group as a whole has Audit absolutely no relationship with any anti-social elements, as well as to reject any illegal or improper demands. In addition, we established an in-house office that Management Committee Board of Auditors 8 is responsible for the collection and management of relevant information and Cooperation that cooperates with external organizations, including the police, to undertake Independence Basic policy CSR Committee and strengthen measures to prevent the influence of any anti-social elements. standards for on our internal external control system Cooperation Divisions including Operation, Internal Control Undertaking of the necessary monitoring activities by the Internal Control directors Production, R&D, General Department, Department to ensure the reliability of financial reporting, as well as put in Administration; and Group Company Internal Audit, Internal CSR Division Accounting Auditor 9 Control Evaluation Accounting Audit place internal controls over financial reporting.

26 27 CSR Topics 2015 KANEKA GROUP TOPICS ［Acting on Report on the Kaneka Climate Group's CSR initiatives in Change fiscal 2015. ］ The red areas show TOPICS 02 where Kaneka products are used Group of (bumper, dashboard and seat core Soil Blocks work behind the scenes. Although unseen, they support roads and reclaimed land as embankment material Materials Help material) Lighten Vehicles

Amid the trend for tackling climate For example, the engineering resin for toughness of epoxy resin, Kane Ace change, automakers' efforts to reduce injection molding, Kaneka Hyperite JP, MX, and other modifier to improve the vehicle weight are increasing as is used widely for its low liner thermal moldability of polypropylene-based

they strive to cut CO2 emissions by expansion (elasticity) properties and resin for further lighten vehicles. improving fuel efficiency. The use of dimensional stability to lighten the In January 2016, we showcased our plastics for auto parts is one such exterior parts such as slide rail covers, unique technological solutions at the example. rear spoilers and pillar garnish. Also, Automotive Lightweight Technology Kaneka's resin products have been a molding method for polypropylene Expo in Japan. We will continue the used to make plastic for various auto foam made using the bead method, material development to satisfy the parts because of their exceptional Eperan PP, was successfully sophisticated needs of customers heat resistance, strength and developed to achieve high strength and to contribute to the sustainable moldability. Recently, they have also while being lightweight, and is now society. been noted as excellent lightweight used for lighter interior seats. We also materials. developed a modifier to enhance the TOPICS ［Support

In areas affected by the 2011 by saving a lot of time and effort for for Raising earthquake and tsunami in Tohoku, repair. We have supplied Soil Blocks 3 the Next Children make their "one and only eraser in Japan, many roads are still waiting for up to 100,000 m of reconstructed the world," listening closely to the explanation TOPICS to be restored. In such cases, it is roads, particularly those on soft Generation］of the staff important to quickly restore strong, ground. 03 ［Tohoku resilient roads economically. Road reconstruction helps disaster- This was the third show held in the Kaneka Kentech Co., Ltd. affected areas by providing routes Participating Kansai region, with the first two Recovery supplies Soil Blocks to these road for emergency evacuation and shows held in 2014. reconstruction projects. Soil Blocks goods transport, and creating tourist in the 2015 Around 4,300 people attended the Support］ are large polystyrene foam blocks routes. Through such products two-day event, with approximately made for civil engineering works. and technology, we look forward to Children's 330 children visiting Kaneka's booth 01 They are water resistant and strong contributing more to the recovery for eraser making. The children were enough to withstand structural loads efforts. given 25 minutes each to experiment Supplying while being light, and are particularly Chemistry Show with creating their "one and only effective for embankment works eraser in the world" in three different Polystyrene on soft ground and steep slopes. The Children’s Chemistry Show, colors. Drawing on the assistance Formed by expanding 1-mm diameter a Chemistry Day event for from the staff, the children and their Foam to particles to 50 times their size, they experimenting with chemistry, was parents were absorbed in making are also environmentally friendly. held at the Kyocera Dome in Osaka their very own eraser. With the use of lightweight Soil on October 24 and 25, 2015, and was We will continue to show children Reconstruct Blocks, road subsidence due to heavy sponsored by the Dream Chemistry the power of science through the weight can be avoided. They are also 21 Committee. Chemistry Week wonders of chemistry. We look Roads in Tohoku easy to work with, making it possible celebrations are held annually during forward to continuing our support for the week of October 23, the date of to shorten the construction period. Kazuhiko Kurobe educating the next generation at the Chemistry Day, which commemorates In the long term, Soil Blocks enable Soil Environment Division next Children’s Chemistry Show to be an economical construction method Kaneka Kentech Co., Ltd. the Avogadro constant (see note 1). held in Kansai in fiscal 2016. Letting children experience the "wonders of science" Note 1: The proportionality factor that relates the amount of substance in one mol and the number of constituent particles (molecules, atoms, ions, etc.) it contains. It is named after the Italian chemist Amedeo Avogadro.

28 29 Employees of Your Health Care Co., Ltd., a mail-order company selling functional food items (from left: Aiming to increase sales in the Middle East and Africa with regional hub Hiromi Tomioka, Ikuko Miyake and Ayako Yoneda) establishment

licorice root, extracted using our own unique technology, to produce the functional food item licorice extract TOPICS containing 3% Glabridin (product name: Kaneka Glavonoid). This ［Providing Global product helps consumers maintain a healthy lifestyle; it has been Product Technology scientifically demonstrated to assist with improvements in BMI (see note 1) Reflecting Local by reducing excess visceral fat, which Needs is known to contribute to various 06 ］ diseases. As a mail-order sales company Establishing a Three-Hub In recent times consumers have of dietary supplements such as been increasingly seeking products reduced foam of coenzyme Q10, Structure from America TOPICS to improve their health and quality of Your Health Care aims to further life. In support of this trend, in April promote a healthy society in the ［Contributing 2015, Consumer Affairs Agency, future by increasing its product line of and Asia to Europe Government of Japan introduced a scientifically reliable FFC products. to Improved new labelling system for Foods with Function Claims (FFC), in addition to Kaneka Group recognizes the human resources, legal affairs and structure. This brings us steadily Quality the existing programs for Foods for importance of global businesses governance, and to enhance those closer to realizing our Basic CSR of Life］ Specified Health Uses and Foods with rooted in local communities. In functions and promote our business Policy to strive to fully understand the 04 Nutrient Function Claims. October 2015, the Group established operations in the region. cultural backgrounds, manners and In September 2015, Your Health Care Kaneka Europe Holding Company N.V. Before this, we have established customs of the countries and regions Functional Food Co., Ltd., a Group company, began in the Belgian capital of Brussels, as Kaneka Americas Holding, Inc. in where we do business as a means of The functional food its regional hub for Europe, Africa and the U.S. and Kaneka Asia Co., Ltd. actively contributing to local societies mail-order sales of Glavonoid as a Glavonoid, available since Products to Help Foods with Function Claims product. 2011, was recently re- the Middle East. The hub is mainly in China as regional hubs in 2012. and communities. Glavonoid is a supplement containing labeled as a Foods with engaged in studying and planning With this current addition in Europe, Lower BMI fat-soluble polyphenols derived from Function Claims product regional business strategies, R&D, we now have a three-hub global

Note 1: Body Mass Index (BMI) is a numerical value used to indicate the degree of obesity: BMI = (body weight [in kg]) ÷ (height [in m])² The Japan Society for the Study of Obesity defines a standard BMI as being between 18.5 ~ 25, with a value of 25 or higher indicating obesity.

Kaneka Eperan (Suzhou) employees learn first hand the danger of an accident on a device to experience a hand becoming caught TOPICS TOPICS ［Helping Innovate ［Toward a Safe Digital Device Manufacturing Site］ 05 Technology］ 07Expanding Sensory Polyimide Film Wins the 47th Learning to Group Ichimura Prize Companies in China Kaneka Group conducts R&D on Sensory learning is a safety-training impressed in me that 'always' staying materials to meet the growing need program to improve danger sensitivity safe is important. Carelessness is the for enhanced performance and by safely experiencing accidents enemy of safety." (Shu Jing, HiHua smaller and slimmer information and hazards in the workplace. The Fiber) "I learned the importance of devices arising from the evolution of danger of accidents and hazards are keeping safe." (Ya Yun Feng, Kaneka electronic products. High-performance film boasting physically felt by trainees through (Foshan)) "Safety means protecting One such material is our ultra-heat- top performance in heat (400℃) simulating a hand accident using yourself. Avoiding injuries due to resistant polyimide film, Pixeo, which and cold (-180℃) resistance among commercially available plastic films a gloved dummy arm at the end of inattentiveness means protecting was developed using our unique a stick or showing experiments on the company." (Niu En Ling, Kaneka manufacturing process. Widely used Foundation (see note 1), in High-Tech Materials, Inc. receiving the accident mechanisms of dust particle Eperan (Suzhou)) primarily in flexible printed circuit recognition of their development of 61st Award of the Society of Polymer explosions. Repeated training is important boards (FPC) for smartphones a groundbreaking technology and Science, Japan. From 2015, we began sensory to improve and maintain safety and tablets, it is more reliable than its commercial success. In addition, As one of our key strategic domains, learning at three company sites in consciousness. We are committed previous FPC and makes slimmer the product was developed using we will continue actively pursuing China: HiHua Fiber Co., Ltd., Kaneka to creating a culture of safety by devices possible. Pixeo and Apical, with the European research and product development Eperan (Suzhou) Co., Ltd., and continuous sensory learning in the The three engineers involved in Organization for Nuclear Research related to the information and Kaneka (Foshan) High Performance future. developing Pixeo were awarded the (CERN) from Kaneka and then Kaneka communications field. Materials Co., Ltd. "It deeply 47th Ichimura Prize in Industry from Note 1: The Ichimura Prize is awarded to technological developers for achievement in developing outstanding technology HiHua Fiber employees experience the New Technology Development in Japan that contributes to the advancement of science and technology, industrial growth, improving culture and national welfare and safety. the danger of falling

30 31 Kaneka CSR Activities:Achievements and Evaluations The achievements and evaluations of our CSR activities are displayed below. (Further information is available on our website).

◎ Well above target ○ Achieved/almost achieved CSR Achievements, and Evaluations △ Not achieved × Significantly underperformed Key Stakeholder Item Fiscal 2015 Achievements Evaluation Key Stakeholder Item Fiscal 2015 Achievements Evaluation

· Conducted the CSR audit at Kaneka and Group companies in Japan, the U.S. and · Sent 50 employees to training courses for future women leaders. The newly created Employing, Training, and day-care cost subsidies scheme was used by 22 employees, and the temporary Europe. ○ · Studied potential systems to set up a Group-wide e-learning program in Japan. Recruiting Diverse People leave system for staff accompanying spouses assigned overseas was used by one Bolster Governance and · Responded to five cases reported to the Kaneka consultation desk. employee. ○ Compliance · Started a training program related to the Anti-Monopoly Act for the Group companies · To encourage a good balance between work and nursing care, work-at-home program in Japan. to include a broader range of circumstances, and extension of the shorter working ○ · Increased the number of independent external directors from one to two. Emphasis on Work-life Balance hours system. Lights are switched off at 19:00 at Osaka Head Office to encourage · Prepared a basic policy on corporate governance and made the required disclosure. Diversity shorter working hours.

· Held two CSR Committee meetings and meetings of the four subcommittees as Labor and Management · Discussions were held in central labor and management meetings, management conferences, meetings of representatives, and workplace labor and management ○ All CSR planned. Relationships · Renewed the intranet system. Enhanced employees’ understanding of CSR by gatherings toward agreeing on a common goal for labor and management. Stakeholders Management ○ CSR Implementation sending out information regularly and using the CSR Handbook. · Conducted training on human rights targeting new employees and newly promoted Respect for Human Rights ○ · Conducted 17 training courses. Held briefings for 6 Group companies (16 sites) in executives. Employees Japan. · The number of occupational accidents was 13, which was lower than fiscal 2014, although it remained more or less steady over the five-year period. Management CSR Safety and · Conducted CSR safety and quality inspections by management for all parent plants, one research center, 16 Group companies in Japan (16 plants), and 6 Group ○ · Produced good practice case studies on safety activities and distributed within the Quality Inspection companies outside Japan as planned. Occupational Safety Group companies in Japan. △ Reinforcing · Conducted hands-on training and group discussions on safety. · Prepared and distributed a simple handbook within the Group. · Training courses were held at 11 Group companies in Japan (with 761 participants) Reinforce Risk Management · Held a company-wide drill to check the procedures for safety confirmation and ○ Occupational focusing on accidents caused by being caught in machines. communication. Safety and · Set up a stress check mechanism for the Group. Occupational Health ○ · Reduced the energy intensity index (see note 1) to 83.5, down 2.9% from fiscal 2014. Health · Prepared a manual for employees returning to the workplace after extended leave. Achieved the reduction target on a five-year average basis by scoring 1.5%. ○ · Conducted CSR safety and quality inspections by applying quantitative assessment · CO emissions intensity index: 77.8 (target achieved). methods. 2 ○ Prevention of Global Warming Management Systems · Conducted specialized internal environmental safety audits by applying the process · Reduced the transport-related energy intensity index (see note 2) by 11.1% from fiscal auditing method in one section each of the all four parent plants. 2014 (target achieved). Also achieved the target on a five-year average basis (3.4% ○ Environmental reduction). *1. Energy intensity index is a numeral value calculated by dividing the energy used in manufacturing by the active mass and indexing it against the baseline year of fiscal 1990 as 100. *2. The transport related energy intensity index is a value indexed against the energy intensity of fiscal 2006, the baseline year (=100). Protection · Achieved a final landfill rate of 0.007% (target achieved). The figure for Group The Improvement ○ companies in Japan also declined to 0.06% from 0.07% in fiscal 2014. Net Sales (Consolidated) Consolidated Sales by Business Segment Environment (reducing Reduction of Industrial Waste environmental · Checked the compliance status of contractors and confirmed the absence of (Millions of yen) (Fiscal 2015) ○ Kaneka Group Profile impact) problems. 600,000 555,227 Synthetic fibers 552,189 Reduction of Volatile Organic 500,000 and others Chemicals · Actual volume was 1,702 tons, which was within the target figure of 1,800 tons. ○ Corporate Profile 524,785 Electronic 8.2% Compound (VOC) Emissions 18.6% 400,000 476,462 products · Implemented initiatives as part of community initiatives, mainly at the Takasago and 469,289 7.1% Preservation of Biodiversity ○ Name KANEKA CORPORATION Osaka Plants. 300,000 Head Office 2-3-18, Nakanoshima, Kita-ku, · Prepared and widely shared the Technological Transfer Guidelines. Life science ○ Osaka Head Office 200,000 Customer Quality Management · Checked and confirmed proper management of product certifications. Osaka 530-8288, Japan products Satisfaction Tel: +81-6-6226-5050 10.6% Net Sales · Completed Phase 1 registration of existing substances in Taiwan. Shared information 100,000 Customers (ensuring quality Fax: +81-6-6226-5037 ¥555.2 and product Chemical Substance to respond to amendments to the Industrial Safety and Health Act. ○ Tokyo Head Office 0 billion safety) Management · Continued developing the chemical substances database and set up two workflows 1-12-32, Akasaka, Minato-ku, 2011 2012 2013 2014 2015 within the system. Tokyo 107-6028, Japan (Fiscal year) · Formulated the plan to conduct tests to check the contamination of prohibited Tel: +81-3-5574-8000 substances in the order of priority and covering all raw materials, and initiated the Fax: +81-3-5574-8121 Net Income (Consolidated) Proper Green Procurement activities based on the plan. ○ (Millions of yen) Procurement Date of Establishment September 1, 1949 20,985 Functional · Revised the Green Procurement Standards twice in line with amendments of laws and 20,000 Foodstuffs plastics regulations. 18,033 17.7% Paid-in Capital 33,046 million yen (as of March 31, 2016) products Expandable · Conducted site patrol with transportation companies to: check whether Yellow Cards 26.1% plastics and 15,000 Vendors are being carried (Takasago Plant); and to identify unsafe aspects and propose Facilities in Japan Sales Office Nagoya 13,650 products ○ improvements in cargo handling (Osaka Plant). Plants Takasago (Hyogo Prefecture) 11.7% · Jointly conducted compliance checks and voluntary inspections of mobile tanks. (Osaka Prefecture) Bolstering Distribution Safety Osaka 10,000 9,325 Shiga (Shiga Prefecture) · Together with transportation companies, reconfirmed the emergency contact networks Consolidated Overseas Sales by Area (Ibaraki Prefecture) (Kashima Plant), and conducted product-specific training concerning risks involved in ○ Kashima 5,402 (Fiscal 2015) transportation (Takasago Plant). 5,000 Research Institutes Frontier Materials Development Others Asia Shareholders · Issued securities reports, financial results, interim reports for shareholders and Laboratories, Medical Device 12.5% 41.8% Timely and Appropriate Disclosure ○ and Investors investors, and other investor relations materials as planned. Development Laboratories, 0 2011 2012 2013 2014 2015 Biotechnology Development · Issued the CSR report and posted it on our website. (Fiscal year) Laboratories, Photovoltaic & Thin Film · Issued booklets on the Kaneka Group’s environmental and social activities and shared ○ Device Research Laboratories, Molding Number of Employees (Consolidated) Improving Communication with Society them within the group in Japan. Posted the booklets on our website. · Held stakeholder dialogues and youth events. & Processing Development Center, 8,907 9,376 Thin-Film Process Technology 9,000 8,489 8,600 8,529* Overseas Sales · All parent plants issued site reports, which were posted on our website. ○ Development Center, and Process 8,000 ¥217.4 Society · Conducted seven training sessions on chemical risk assessment. Technology Laboratories 7,000 billion · Conducted site-specific risk assessments at the all four parent plants. 6,000 Europe Reinforcing Process Safety and Disaster · Evaluated reaction hazards in the all four parent plants. Overseas Facilities U.S.A., Belgium, Singapore, Malaysia, △ 5,000 25.6% · Conducted safety checks in regard to powder dust explosions, static ignition, and China, India, Taiwan, Korea, Australia, Prevention 4,000 other risks. Brazil, and others · Fire incidences occurred at Takasago and Kashima Plants. 3,000 North America Kaneka Group 104 subsidiaries 2,000 20.1% (including 40 (in Japan) and 35 (outside Japan) 1,000 consolidated subsidiaries) 0 *From fiscal 2014, we changed the basis on which 2011 2012 2013 2014 2015 we calculate the number of employees at Group (Fiscal year) companies (excluding temporary employees). 32 33 Third Party Comment Suggestions and From the Editorial Team Third Party Comment on the Improvements from the Response to Third Party 2015 Version Comment 2016 CSR Report We made the following improvements in response to Professor Minami's suggestions for the 2015 version. In the 2016 CSR Report, Chieko Minami the structure of the 1 digest version was Professor of Marketing, Graduate School of Business Administration, modified to strengthen Kobe University communication with Kaneka needs to explain its criteria Personal talk with the CSR Committee head Graduated from the Faculty of Letters, Kobe University. stakeholders. Completed a Master's Degree in Communication from Michigan State for establishing its CSR activity In particular, near the beginning of the report, we University. targets and self-assessments. highlighted special features on food production support Completed a Master's Degree at the Graduate School of Business and health care as our social contribution through Administration, Kobe University. business activities from among our various key strategic Withdrew from the Doctoral Course. domains. These articles contain the concept for and Formerly an associate professor at the Faculty of Economics and Business We endeavored to present the context for our significance of each initiative, together with messages Administration, Yokohama City University before assuming current post. target criteria by adding more quantitative from stakeholders. Doctor of Commerce. Specializes in the field of marketing. assessments in the report, particularly for Through dialogues and discussions, we drew out people's data related to human resources and our wishes and needs, and made an effort to present them in Responsible Care initiative. the section "Fulfilling dreams."

“I look forward to a more accessible CSR Report to provide In addition to commending some of our initiatives, Professor Minami also provided advice on several full disclosure to stakeholders.” 2 areas for improvement, such as including additional content on high-profile social issues, and providing the Ten years have passed since Japanese businesses environmental data (the full report is available on the Kaneka needs to show how it implication and corresponding evaluation of numerical data presented for our CSR activities. We will implement formally adopted corporate social responsibility (CSR). website). Manufacturing industries inevitably have an engages with the international these recommendations in the next report to better As a concept that originated overseas, CSR is still impact on the environment at every step of the production community as a signatory to the UN communicate our efforts. experiencing difficulties in taking root in corporate process, from raw material procurement to production and Our goal is to continue reporting specific CSR initiatives Japan as few companies can fully visualize its ideal distribution. Kaneka is to be commended for continually Global Compact. through business activities to all our stakeholders, and implementation. disclosing activities that reduce its environmental impact to address their concerns by producing a CSR report The report clearly directs the Kaneka Group’s CSR using well-organized data through the "Materials Balance that provides full disclosure. We would appreciate any comments, suggestions, corrections or other feedback on activities toward social contribution through its business in Production Activities." Going forward, I hope to see The Kaneka Group’s commitment to the any information contained in this report. operations, and explicitly shows this by focusing on Kaneka continue to present to stakeholders its sustained UN Global Compact is integrated into Finally, thank you to all our stakeholders for taking the key strategic domains where the Group can exhibit its efforts on CSR initiatives together with precise evidence the Group's CSR activities as described time to read this report. strength. This is particularly evident in the accessibility and based on data. in the section "Our Initiatives on Social readability of the digest version, the CSR Communication Responsibility", and is further reported in the Administration Office CSR Committee Improvements to Enhance Communication main initiatives for fiscal 2015. Book. Kaneka Corporation The discussion on regenerative medicine and cell therapy Special Features that Go Straight to the Heart on the first section is somewhat lacking. Given that this is The special feature on food production support in a very high-profile social issue, there will certainly be more particular, presents the familiar topic of food, which is also interest on the topic from stakeholders. This article would ◎ From the Editorial Team its consolidated subsidiaries both in Japan ◎ Published of great concern to society. Obscure scientific technology, have benefited from a more comprehensive approach to This Communication Book was prepared to and other countries. The data on Responsible September 2016 such as how the new fertilizer promotes higher crop yield, addressing the topic. communicate to our stakeholders around the Care activities encompass the parent and world the highlights of Kaneka’s CSR activities. all 43 Group production subsidiaries. In this ◎ Publication of the Previous Report or how anti-freeze ingredients retain the quality of frozen In "KANEKA at a Glance" there is an emphasis on The opening section describes how we strive report, “Kaneka” refers specifically to Kaneka September 2015 foods, are explained with illustrations and combined with data relating to the year's CSR activities. However, the to respond to our stakeholders' expectations Corporation. “Kaneka Group” encompasses feedback from employees, all of which clearly convey implication and corresponding evaluation of these figures based on communication with them, and our Kaneka Corporation and Group companies ◎ Next Report unique approach to offer new value. (its consolidated subsidiaries). References to Scheduled for September 2017 Kaneka's contributions to the food industry. was not evident in the article. It was an interesting way of Many of our employees appear in the Special “Group company/companies” do not include In the special feature on Kanekalon business, which has expressing data visually but there is room for improvement Features and Topics sections to highlight each Kaneka Corporation. ◎ Reference Guidelines valued local community ties in Africa for more than 30 in terms of the presentation. key role they play in communication. The G4 Sustainability Reporting Guidelines The Two Special Features present how we at ◎ Languages of the Global Reporting Initiative (GRI) and years, the Group's support and dialogue on the WFP Although CSR reports from various corporations can be the Kaneka Group are working on food This report is available in Japanese and the Environmental Reporting Guidelines school meal project for local children demonstrates a obtained, people refrain from reading reports that are too production support and health care―two of English. (2012 edition) issued by the Ministry of the regional community engagement that goes beyond mere voluminous or contain too much information. Whatever the our four key strategic domains―in our core Environment of Japan. businesses. ◎ Third-Party Verification and Opinions donation and is grounded in local needs. The positive medium, these reports will not be effective if they are not The section on Our Initiatives for Social The Japan Chemical Industry Association ◎ Inquiries effects on the wig culture there and women's self worth read. Addressing stakeholder interests and making more Responsibility shows how we have verified the Responsible Care data in this Kaneka Corporation are also visually and concretely expressed through the accessible reports are crucial in information disclosure. implemented our CSR activities focusing on report. Professor Chieko Minami of the Administration Office CSR Committee the businesses in the Group’s key strategic Graduate School of Business Administration of 2-3-18, Nakanoshima, Kita-ku, Osaka 530- Miss Kanekalon contest and other initiatives. All of these Along with more substantial content, I look forward to domains as well as the history of our CSR Kobe University provided a third-party opinion 8288, Japan create a favorable impression of the Kaneka Group’s CSR Kaneka's ongoing efforts to improve its CSR report from efforts. on the overall content of the CSR Reports, Tel: +81-6-6226-5091 All disclosed information is available on our following the 2015 version. Fax: +81-6-6226-5127 activities. this perspective. website. For more information, please visit: http://www.kaneka.co.jp/kaneka-e/ I would also like to give special mention to Kaneka's http://www.kaneka.co.jp/kaneka-e/csr/ ◎ Period Covered Fiscal 2015 (April 1, 2015 to March 31, 2016). ◎ We have included a questionnaire form with this report ◎ Organizations Covered in This Report In some cases, reporting covers activities and invite you to record your opinions and impressions to help us improve our initiatives and disclosure in the years This report covers Kaneka Corporation and before or after fiscal 2015. ahead.

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