Sumitomo Heavy Industries Group Environmental Sustainability Report 2016 Environmental Management Division ThinkPark Tower, 1-1, Osaki 2-chome, Shinagawa-ku Tokyo, Japan 141-6025 Phone: +81-3-6737-2325 http://www.shi.co.jp Printed on paper made with wood from forest thinning. “Morino Chonai-kai” (Forest Neighborhood Association)—Supporting sound forest management. Editorial Policy CONTENTS This report is intended to present our stakeholders with an organized summary of the measures and conceptual approaches taken by Message from the President 02 Sumitomo Heavy Industries Group in our environmental activities and Outline of Sumitomo Heavy Industries Group 03 social contribution activities. At present we are taking measures toward achieving the objectives of Relationship between Sumitomo Heavy Industries the 4th Medium-Term Environmental Plan (FY2014-2016). Group and Society 05 We hope to give our readers an understanding of an overview of the 4th Medium-Term Environmental Plan. HIGHLIGHTS 07 To that end, we have sought to make the report accessible by using plain and concise language and by making frequent use of graphs, Environmental Initiatives illustrations and photographs. Further, when issuing this report, we consulted the Environmental Sumitomo Heavy Industries Group 4th Medium-Term Reporting Guidelines (2012) and the Environmental Accounting Environmental Plan 09 Guidelines (2005) from the Ministry of the Environment. Environmental Management System 11 Environmental Objectives (Medium-Term Plan) and Scope of the report Sumitomo Heavy Industries, Ltd. and its group companies Results 12 Period covered by this report Global Warming Prevention Activities 14 April 1, 2015 – March 31, 2016 Activities Directed Toward Creating a Society Based on Recycling 16 Previous issue: October 2015 Activities for Managing Chemical Substances 17 Current issue: September 2016 Strengthening Environmental Management Activities Disclaimer at Factories Outside Japan 18 This report contains not only facts relating to the past and present of Sumitomo Heavy Industries Group but also plans, forecasts, and Environmental Impact Data 21 projections based on management plans and management policy at the time of publication. These plans, forecasts and projections are assumptions and judgments based on available information at the time Relations with Society of writing, and results or matters pertaining to future business activities may differ materially from the descriptions due to changing conditions. Social Contribution Activities 27 Additionally, further examination of past data may lead to results that differ from values given in past Environmental Sustainability Reports. 1 Sumitomo Heavy Industries Group Environmental Sustainability Report 2016 Message from the President With our foundation in the Sumitomo Business Spirit, we will go on providing “first-class products” and services that contribute to the realization of a sustainable society. I would like to say thank you to all our stakeholders: Your long- In fiscal year 2016, which is the plan's final fiscal year, we standing support and understanding of our Group's corporate will take steps to pursue these policies and further promote activity are greatly appreciated. environmental activities at Group companies, including those The Sumitomo Heavy Industries Group established the in other countries. Corporate Governance Basic Policy of Sumitomo Heavy The business environment for the Sumitomo Heavy Industries Industries in November 2015. Regarding initiatives to address Group is changing moment by moment, and societal demands environmental problems, this Basic Policy specifies that: are also changing day by day. Under these circumstances, and in light of the management situation and changes in the “By formulating a Medium-Term Environmental Plan in business environment, we took steps in 2015 to revise the addition to establishing the Sumitomo Heavy Industries Group management philosophy for the first time in 16 years. Group Environmental Policy, we will take positive, active As we go forward, we will take this management philosophy as measures to resolve environmental problems.” the focal point for our business activities as well as the starting position for Sumitomo Heavy Industries Group employees. All members of the Group are acting as one to this end. The environmental programs we have been pursuing in the As to our specific activities, these have been promoted in Group, including our activities to prevent global warming, have the 4th Medium-Term Environmental Plan (FY2014-2016). The always been in response to important societal demands. They 4th Medium-Term Environmental Plan sets forth the following have also always been in accord with the “Sumitomo Business basic policies: Spirit” as well as with our new management philosophy, which declares, “Taking integrity as our principle, we will earn the ● Promote environmental risk management high regard and trust of all our stakeholders and contribute to ● Contribute to achievement of a low-carbon society society.” I myself have a very keen awareness of the importance of ● Realize a resource-recycling society environmental activities. Therefore I will conscientiously and ● Contribute to local communities and take measures steadfastly make every effort to see that the top management for biodiversity in each business division and every Group company as well as all the Sumitomo Heavy Industries Group employees engage in specific implementation of these activities. In furthering the various environmental activities of the Sumitomo Heavy Industries Group described in the FY2016 edition of our Environmental Sustainability Report, I will base our approach on the recently revised management philosophy. I intend to communicate the 4th Medium-Term Environmental Plan to employees in simple, readily understandable terms so that we can elicit the maximum energy and capacity from every individual. Here at the Sumitomo Heavy Industries Group, we hope that our efforts will result in even more of our stakeholders gaining an awareness of the Group's activities. We will then hear more of your opinions to incorporate into various of our activities, furthering our ceaseless efforts to reform ourselves, as we steadily move toward realization of the Group's objectives. We appreciate your opinions and advice, and we will be very pleased to draw on them for our future initiatives. President and CEO Sumitomo Heavy Industries Group Environmental Sustainability Report 2016 2 Outline of Sumitomo Heavy Industries Group Since its foundation as a repair shop for the Besshi Copper Mine in 1888, the Sumitomo Heavy Industries Group has The Sumitomo Heavy Industries Group moved in step with social and industrial development. With a manufacturing technology nurtured by a tradition spanning more than 100 years, we make use of proven technologies that “actuate and control” devices from the world contributes to building an afuent society with of nanotechnology to gigantic structures to realize original ideas and dreams. “manufacturing” technology (as of March 31, 2016) Company name Sumitomo Heavy Industries, Ltd. Capital 30,871,650,000 yen Company Founded November 20, 1888 Number of Consolidated: 18,491 employees Outline Incorporated November 1, 1934 Overseas Locations Net sales Consolidated: 700,838 million yen Head Office 1-1 Osaki 2-chome, Shinagawa-ku, Tokyo Machinery Component Precision Machinery Construction Machinery Industrial Machinery Ships Environmental Facilities & Plants Machinery Component Precision Machinery Asia Europe America Main Products Main Products Power transmission Plastic injection molding equipment, Inverters machines, ion accelerators, laser processing systems, cryogenic equipment, precision positioning equipment, transfer molding press machines, precision forgings, defense equipment We handle speed reducers, which are devices for lowering the number of motor We handle injection molding machines for making plastic products, and devices for revolutions and raising torque. Taking part in a broad range of markets, speed reducers manufacturing liquid crystal and semiconductors. Among injection molding machines, are used in conveyance lines at factories, in robotic joints and in the drive systems of a products that require precision machining are one of our particular specialties. range of machines. Net sales 125.6 billion yen Net sales 66.6 billion yen Net sales 137.3 billion yen Construction Machinery Industrial Machinery Afliated Afliated Afliated companies 29 companies companies 17 companies companies 23 companies Main Products Main Products Number of Number of Number of Hydraulic excavators, Cyclotrons for medical employees people employees people employees 1,730 people mobile cranes, use, ion accelerators, 4,592 1,743 road machinery plasma coating systems, forging presses, material handling systems, logistics & handling systems, turbines, pumps Changes in net sales Changes in operating income Changes in net income (100 million yen) 8,000 (100 million yen) (100 million yen) 7,008 6,671 600 400 6,241 6,153 6,000 5,859 506 331 471 460 300 An extremely fuel-efficient product, our hydraulic excavator was the first construction The products include devices for diagnosing and curing cancer, forging presses for 400 343 243 4,000 313 machinery to win the Energy Conservation Grand Prize. Featuring outstanding producing components for automobile engines, large cranes for shipyards and ports, 200 195 179 maneuverability, the Good Design Award is another stellar achievement