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Message from the CEO

Kinya SetoAs a global citizen, we are committed to creating a positive impact on society through responsible business operations and sustainable innovation.
I have always been motived by the opportunity to make a contribution to society, and it was this passion that moved me to become an entrepreneur and corporate leader.
I believe that a strong commitment to corporate responsibility is core to LIXIL's long-term success, and that our CR strategy should align with our business strategy.

The LIXIL Group has been a signatory of the United Nations Global Compact (UNGC) initiative since July 2013. In addition to supporting and implementing the ten principles of the UNGC in the areas of human rights, labor, the environment and anti-corruption, we are also taking action towards accomplishing the Sustainable Development Goals (SDGs) established by the UN, with a target date of 2030. These goals include aims such as to "ensure healthy lives and promote wellbeing for all at all ages" and "ensure access to sanitation for all".

Even today, approximately 2.3 billion people, one third of the global population, live without access to proper sanitation. To help resolve this sanitation and hygiene crisis, we have been developing a range of solutions to improve sanitary conditions. For example in 2013, we developed our first product under the SATO brand, an innovative toilet pan for developing countries, and in 2016, established a dedicated business unit to promote the broader use of SATO products and allow us to respond to local demand. To date, over 6 million people in more than 15 countries are using SATO. We will accelerate these initiatives to meet our target of providing improved access to sanitation and hygiene for 100 million people by the year 2020.

We also consider environmental challenges, such as water conservation and environmental protection, to be critical to today's business agenda. As a company that provides products, materials and solutions for people's everyday living spaces, LIXIL pledges to provide environmental solutions through our products and services.

To mitigate global climate change, the Paris Agreement set a long-term ambition to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

In order to contribute to this carbon-neutral future, LIXIL Group created a new Environmental Vision. By 2030, the positive environmental contribution from our products and services will surpass the environmental footprint from our entire business process, thus achieving a Net Zero environmental footprint. We will achieve this through innovative technologies, such as low-carbon and water-efficient technology, and also by reducing environmental impact in every process of the business, including procurement, production, product use and disposal.

Furthermore, to foster an organizational culture in which diversity is valued, we announced our LIXIL Diversity and Inclusion Declaration, a revised version of the LIXIL Diversity Declaration published in 2013, and clarified the importance of open, honest dialogue and entrepreneurial values. To achieve sustainable growth in a market where customer needs are increasingly diverse, it is vital to encourage a diverse workforce to apply and optimize their individual capabilities. Under our new Declaration, we will empower employees to maximize their skills by encouraging mutual respect, and foster a corporate culture that instills a desire to constantly tackle challenges with a true entrepreneurial spirit.

We remain committed to engaging on global issues by leveraging our global network, expertise and experience, and contributing to improving people's comfort and lifestyles.

October 2017
Director, Representative Executive Officer, President & Chief Executive Officer (CEO),
LIXIL Group Corporation
Kinya Seto

Message from the Corporate Responsibility (CR) Committee Chairperson

Hwa Jin Song MontesanoCorporate Responsibility (CR) is core to our business philosophy. Given the environmental and social considerations facing our communities and our planet, we firmly believe that sustainable and responsible operating practices not only enhance our competitiveness for the short and long term, but such practices make LIXIL a more trusted contributor to the communities in which we work and live.

FY2016 was a significant year for LIXIL's progress on CR. It was the first year following the launch of both our global CR strategy and, by coincidence, the UN's Sustainable Development Goals (SDGs). We welcome the collaborative approach outlined in the SDGs between government, business and civil society and our CR strategy is well-aligned with these goals.

This year, we made steady progress against the three pillars outlined in our CR strategy. On improving Global Sanitation & Hygiene, we see it as an age-old challenge whose time has come for some new thinking and new solutions. We launched a dedicated business unit within LIXIL to scale up and accelerate new product development for communities without access to safe sanitation, and expanded SATO business operations and the SATO line of products, a range of simple and innovative toilet solutions for rural communities. We are also actively engaged in advocacy to enhance awareness globally of the urgency to improve sanitation for the estimated 2.3 billion people today who lack a clean and safe toilet for daily living.

On Water Conservation and Environmental Sustainability, we developed a robust global EHS management system that keeps us on track toward our goal of being "Net Zero" by 2030. To increase our environmental contribution through products, we successfully launched a variety of innovative energy-saving products globally, such as ultra-high-efficiency toilets H2Option and H2Optimum in North America and ERSTER S, the top-level insulation resin window, available in Japan.
On Diversity and Inclusion, in addition to launching universal design products worldwide, we launched our first contract-based facility management business for serviced retirement homes, Premio Kawaguchi, reflecting the needs of the rapidly aging Japanese population.

One year after its launch, our CR strategy influences the decisions we make and ensures that sustainable and responsible ways of operating are properly embedded within LIXIL. With a strong foundation built in FY2016, LIXIL will continue to accelerate our CR initiatives in FY2017.

October 2017
Executive Officer and Senior Managing Director, Public Affairs, Investor Relations, External Affairs, and Corporate Responsibility,
LIXIL Group Corporation
Jin Song Montesano

Commitment to the UN Global Compact

The LIXIL Group signed the United Nations Global Compact (UNGC) in July 2013 in full support with the principles set out in the framework.
Our corporate philosophy is to contribute to improving people's comfort and lifestyles. To fulfill that aim through our operational activities, we are driving a range of R&D and various initiatives to help resolve global sanitation and hygiene problems as well as other social and environmental issues.
To meet and exceed society's expectations for the LIXIL Group, we must take active leadership as a comprehensive living and housing solutions company. We will not only put the UNGC's 10 Principles into practice, but also assist the UN efforts towards achieving the Sustainable Development Goals by providing our expertise in areas of sanitation to help create a safe living space for all.

The Ten Principles

Human Rights

Principle 1:   Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2:   make sure that they are not complicit in human rights abuses.

Labour

Principle 3:   Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4:   the elimination of all forms of forced and compulsory labour;

Principle 5:   the effective abolition of child labour; and

Principle 6:   the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7:   Businesses should support a precautionary approach to environmental challenges;

Principle 8:   undertake initiatives to promote greater environmental responsibility; and

Principle 9:   encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Sustainable Development Goals

The United Nations Sustainable Development Goals (SDGs) is a concrete plan of action outlined in the Transforming our World: The 2030 Agenda for Sustainable Development results-oriented document adopted by the United Nations General Assembly in September 2015, consisting of 17 global goals and 169 targets related to sustainable development.
The LIXIL Group reflects the SDGs approach in its corporate responsibility strategy and uses the goals as a broad guideline when forming management decisions.

Sustainable Development Goals

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