Third-party View

This year’s Aichi Steel report again accurately describes the company’s strategic and proactive CSR management based on the clear commitment of the president.

Mr. Satoshi Chikami
Executive Officer and Professor, Faculty of International
Welfare Development, Nihon Fukushi University

Clearly taking a proactive stance to changes in the business environment

As the president mentioned at the beginning of his message, there is a paradigm shift occurring as the environment surrounding the automotive industry undergoes great change. The in-house company system adopted in April 2017, consisting of the Hagane Company, Kitaeru Company, and Smart Company, is a clear example of this proactive stance. In their messages, Company presidents show their commitment to generating high profitability on the back of the exceptional technical capabilities they have built up. The new Corporate Office as well, consisting of the Corporate Planning Headquarters, Marketing & Sales Headquarters and Manufacturing and Future Planning Headquarters, forms a framework providing groupwide checks and balances of the three Companies, which is a commendable system assuring reliable governance.

Synergies between company transformation, employee awareness and workstyle reform

One of the goals of Aichi Steel’s 2020 Medium-term Management Plan is to build a company of contented employees, while the Aichi Way, established in January 2018, also clearly positions the concepts of Densho/Sustain, Souzou/Create and Kansha/Appreciate as a spiritual guide to achieving the goals, which is particularly praiseworthy. In response to the groupwide transformation that came with adoption of the in-house company system, and as described in the president’s message and Special Feature 2, it is clear that the company has launched comprehensive efforts toward workstyle reform for its employees. The report describes implementation of workplace-based ideas for smooth reform of employee workstyles, such as the introduction of work finish time boards and time management duty persons, while at the same time making efforts to transform management styles for key managers with the adoption of a team system. Raising awareness among key managers about the need to both develop and appreciate workers, should also contribute greatly to improving work-related pride and motivation of every employee. It is possible that the significant yearly increases in the number of participants in volunteer activities is an outcome of these efforts to change the way people think.

Clearly setout priority issues (materiality) and systematic descriptions based on them

The six priority issues (materiality) established in fiscal 2016, the setting of important management indices to resolve them, and a systematic CSR plan were clearly described. As a result, the contributions that Aichi Steel is attempting to make toward realizing a sustainable society were accurately expressed throughout the report, which was highly commendable.
The report contains three special features in the first half that clearly describe the areas that Aichi Steel is focusing on, the directions it is taking and how it aims to get there.

Steady achievements of the 2020 Environmental Action Plan

The 2020 Environmental Action Plan included a list of 15 action items. However, there was a slight deterioration in slag generation base units and the company failed to achieve internal targets for reducing by-products during production and reducing CO2 emissions, which had been set at higher levels, due to issues such as increased production volumes over the previous two years. The report shows that despite this, all other action items were steadily achieving results. Because the company is continuing existing efforts to reduce environmental burden, through initiatives such as 4S Re-Engineering, there might not be much more room for improvement, but I hope the company will continue working toward its goals.

Easier to read, easier to understand

This year’s report implements many ideas for improving its appeal to readers, including ongoing efforts to link to the online version, a much more detailed examination of each priority issue, an improved layout and emphasis on important numbers. The result is commendable for its accurate presentation of information that needs to be conveyed, and the highly balanced ease of reading and understanding for readers.

Conclusion

In the company’s 114th Term, operating income made considerable improvements toward targets in the 2020 Medium-term Management Plan. I look forward to seeing the further effects that adoption of an in-house company system has on driving strategic management and workstyle reform for employees, and seeing the contribution it makes to further expansion of shared value between the Aichi Steel and society.

* 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 year, we have been implementing new initiatives toward creating a New Aichi Steel, including strengthening our business capabilities through an in-house company system and workstyle reform, to help achieve our newly established 2020 Medium-term Management Plan. In January 2018, we also established the Aichi Way, a spiritual guide shared by all employees of the Aichi Steel Group.

High praise for these initiatives from such an expert encourages us and gives us confidence in our continuing efforts. To live up to these expectations, we will further our endeavors and contribute to society through the results while working to achieve steady growth for the company.

Regarding the issues Professor Chikami noted of internal targets in our Environmental Action Plan for reducing by-products during production and reducing CO2 emissions, which had been set at higher levels, we failed to reach those targets this time due to increased production in response to the current high rate of orders. However, we will continue to make a concerted effort to reuse steel scrap as raw materials in our products as a resource-recycling corporation, and work toward becoming a globally valued enterprise.

Finally, the Visitor Center in our new administration building was completed in March 2018. We intend to use the center to welcome many more people on plant tours and to otherwise strengthen communications with local residents and other 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

Ichiro Murakami
Senior Executive Officer
Corporate Communications Div.