In FYE2022, we made significant progress in further embedding sustainability across our business and strengthening our impact globally by offering environmentally friendly products that cater to the needs of diverse consumers. In line with the revision of the Corporate Governance Code in Japan, we reviewed the composition and governance of our Impact Strategy Committee, which has led to more substantive and active discussions on sustainability as part of management strategy.

Enhancing the Protection of Human Rights

During the past year we have also revised our Human Rights Principles. LIXIL is committed to respecting the human rights of all stakeholders and regularly update our policy to become a better protector of human rights. Last year’s revisions include more detailed descriptions of the governance structure overseen by the executive officer in charge of legal and compliance matters, the key areas of LIXIL’s human rights issues identified in FYE2021, the human rights due diligence process, the commitment to reducing human rights risks through this process, and the concern-raising system.

Furthermore, to identify potential human rights risks at LIXIL, we conducted a company-wide human rights survey (including indirect employees) and obtained a response rate of approximately 60%. We also identified trends by region, organization, age, and other factors, as well as trends by human rights issue.

Global Sanitation & Hygiene

Our social business SATO continues to gather momentum. SATO product shipments exceeded 1 million units globally for the third consecutive year. We are thus on track to deliver on our ambitious goal of improving the lives of 100 million people through safe sanitation and hygiene by 2025.

To tackle the global sanitation challenge, in FYE2022, we focused on corporate partnerships to facilitate change at scale. The new Partnership for Better Living with United States Agency for International Development (USAID) aims to accelerate the implementation of SATO and impact at least 2 million more people in the next five years. The scope of activities and regions of our MAKE A SPLASH! global partnership with UNICEF was expanded to three of the world’s most populous countries: India, Indonesia, and Nigeria. SATO products are now in homes, schools, and public institutions in more than 45 countries worldwide.

In the EMENA region, we expanded coverage of GROHE’s Energy for Life CRM campaign to 13 countries, driving further contribution to the MAKE A SPLASH! global partnership. We also opened 12 additional schools in 2021 under the GROHE Installer Vocational Training and Education (GIVE) program. The program also helps develop skilled installers who can solve local sanitation problems and improve the living conditions of many.

Even in the US, over 2 million people lack access to basic sanitation. LIXIL has provided an innovative and sustainable wastewater treatment solutions to tackle the sanitation challenges in Lowndes County in Alabama. The Alabama model has the potential to be scaled and help those who lack basic plumbing across the US.

Water Conservation & Environmental Sustainability

LIXIL is committed to being a leading company in reducing environmental impact. To achieve our Environmental Vision 2050, we are focusing on Climate Change Mitigation and Adaptation, Water Sustainability, and Circular Economy.

To mitigate climate change, we are increasingly switching to renewable energy and reducing overall energy consumption in our plants, logistics centers, and sales offices. We also launched our high-performance window TW and fully remodeled all our sashes for new construction in Japan, as solutions to support Japan’s Green Growth Strategy for achieving CO₂ neutrality by 2050 through reducing emissions from housing.

To ensure water sustainability, we are monitoring and tracking our overall production consumption without compromising performance across all brands to reduce water and energy consumption. We are also expanding our line-up of touchless faucets, water-saving toilets, and other products equipped with water- and energy-saving and water-purification technologies that enhance environmental value of water across our global water brands.

Pursuing a circular economy, we continue to expand our Cradle to Cradle Certified® product portfolio. We are also working on a “product passport” in the form of a standardized Environmental Product Declaration (EPD), which increasingly are being requested in several markets in Europe (i.e. France and Nordics).

We recognize that environmental issues can be both risks and opportunities for us, and our environmental divisions, business units, and management are working together to promote our strategies and measures effectively. To further strengthen our efforts, we established the Environmental Strategy Committee in November 2021 and plan to announce our Environmental Strategy that highlights our medium-term strategy and sets a clear direction towards achieving our Environmental Vision 2050 in FYE2023.

Diversity & Inclusion

We have been on a journey to embed D&I within the organization not only because it’s the right thing to do but also for its strategic value to strengthen our long-term competitive advantage. By pursuing inclusion as our goal, we believe diversity will be the natural outcome. Driving inclusion will allow us to integrate more diverse knowledge and perspectives, better catering to the needs of our diverse customer base.

To effect this change, we have enhanced our global people policies, adding talent acquisition guidance to ensure that bias is removed from the hiring process and attract more diverse talent. Our talent management has been strengthened with mentoring programs, D&I training, and the identification of female talent through our People and Organizational Development (POD) process.

Listening to our employees is another critical element for LIXIL. We updated our employee survey, LIXIL VOICE, to be able to track critical drivers of Employee Experience.

We also launched five Employee Resource Groups targeted to strengthen links amongst employees based on shared characteristics, backgrounds, or life experiences and implemented a fully flexible working arrangement. Such initiatives to build an inclusive environment have also contributed to driving inclusion in our workforce.

At LIXIL, our Impact Strategy is core to delivering on our corporate purpose. We are confident that we can live our purpose and create a positive impact for our stakeholders through executing our strategy.