This year’s Aichi Steel report focuses on defining materiality (priority issues) and responding to them fully. One of the report’s key features is that, based on clear management thinking, it transparently and systematically outlines how the company is engaging in CSR activities and why it is doing so.
Mr. Satoshi Chikami
Executive Officer and Professor,
Faculty of International
Nihon Fukushi University
Developments in how materialities are defined and responses to SDGs
Since last year, Aichi Steel has defined and responded to materialities based on SRI Guidance (G4). This year, however, the content of the report has been even more closely scrutinized and clearly denotes the core subjects pertaining to ISO 26000, as well as its relationship to SDGs targets.
Page 20 clearly shows how materialities correspond to key performance indicators, and which sections of the report they apply to. This increased integrity is particularly praiseworthy. The company’s approach to contributing to the realization of sustainable local communities is clear as a result.
With regard to SDGs, the five materialities have enabled Aichi Steel to cover 12 of the 17 targets defined by the UN. The company’s activities evidently have a significant inuence on societal sustainability.
The report has therefore evolved such that the goals of Aichi Steel’s various initiatives are easy to understand for stakeholders and readers. This is a development deserving of praise.
Increasing the value of the Aichi Steel brand
In his message on pages 7–10, the president calls for Aichi Steel to become “an ever-better company.” This is an extremely important and attractive message for raising the value of the company’s brand. It goes without saying that Aichi Steel products are used in various fields—including the automotive industry—the world over.
Consequently, both the development of even better products that cater to societal needs and improvements to product quality via proper manufacturing methods are essential conditions for raising brand strength. At the same time, however, it is critical that the company’s production bases located in Japan and overseas enhance their value to local societies. Such developments will not only increase the company’s estimation in the eyes of local communities, but also enable employees to remain motivated and proud of the fact that they work for Aichi Steel. I look forward to further improvements in this area.
Establishing new workstyles
The construction of the New Administration Building has engendered a significant shift in individual workstyles and attitudes. Supported by thorough earthquake countermeasures and advanced energy-efficient technologies, various initiatives have been implemented so that the company’s working environment and functions facilitate improvements in the employees’ intellectual productivity. Employees who utilize staircase encounters on the eight-story “communication stairs” have already been introduced earlier in this report. I expect the New Administration Building to foment employee creativity and exchanges of opinion, and become a place which provides the energy required to generate new products that cater to societal needs. For this reason, “Innovation through communication” (page 13) is an excellent title. The Visitor Center is scheduled to be completed next March; I hope that it will serve as a base at which new initiatives for harmonious coexistence with the local community will thrive.
Steadily continuing environmental initiatives
In fiscal 2016, Aichi Steel drew up a new five-year plan entitled “Aichi Environmental Initiatives Plan 2020.” Details can be found on the e-version of this report. The effects of the January 2016 accident mean that total CO2 emissions from the production process will fall just short of the 2020 targets. However, there have been steady gains in other fields: continuing 4S Re-engineering initiatives have resulted in major improvements to productivity, logistics have been optimized, and there have been reductions in byproducts from the production process.
The Aichi Environmental Initiatives Plan 2020 will form the policy and plan for the company’s environmental actions for the next five years. For this reason, while there are limits to what can be included in the paper version of this report, listing the targets for each component of the plan may well improve reader comprehension. Let us hope that such changes are implemented next year.
Aichi Steel has set a lofty goal of achieving consolidated operating income of 20 billion yen by 2020, and the company has introduced a new in-house company system this year in order to achieve it. As an organization with exible, high-quality governance functions, I have great hopes for further growth aimed at the generation of values that are shared by both company and society.
Note: This third-party view was written based on interviews with management and related parties.
Response to the Third-Party View
Professor Chikami has provided us with valuable insights and proposals since fiscal 2010, and we are extremely grateful for his support.
This fiscal year, we used the accident that occurred on January 8, 2016, as an opportunity to push forward new initiatives aimed at both realizing the New Aichi Steel, and at drastically strengthening our management structure by advancing our step-up plan and shifting to the new company system. We intend to consider those elements praised and criticized by Professor Chikami with the aim of continuing to grow sustainably. Professor Chikami praised our association of ISO 26000 and SDGs, the increase of the value of the Aichi Steel brand, and the successful implementation of new workstyles. We intend to further develop these aspects of our company, and we will work hard to ensure that the fruits of our new workstyles lead to societal contributions and annual growth.
The professor also indicated that, in order to increase the strength of the Aichi Steel brand, our production bases in Japan and overseas ought to improve their value to society. In addition, he proposed reporting the results of the Aichi Environmental Initiatives Plan 2020 in an easier to understand manner. In order to remedy both these failings, the relevant divisions will work together on any issues and discuss what can be done to improve next year’s report.
Finally, our Visitor Center will be completed next March. We intend to use the center to further strengthen communications with our stakeholders. Our aim is to become a company whose presence is cherished by locals and, from a CSV perspective, it is our intention to continue to contribute to local communities and the environment.
Senior Executive Officer
Corporate Communications Div.