• Restructure governance system as a company with nominating committee, and adopt and embrace global best practices.

• To ensure transparent processes and deliberation, we revised our existing regulations and implemented some new ones after reviewing our corporate governance guidelines and regulations concerning the Board of Directors in October and December 2019.
• Established Governance Committee as a voluntary and permanent committee under the Board of Directors.
• Announced plans to merge LIXIL Group Corporation and LIXIL Corporation, which will strengthen monitoring and supervision.
• Revised and clarified Nomination Committee’s systems and operations.

• Rebuild governance rules and procedures for all Group companies, clarify their execution, regulation, and approval.

• Held governance seminars for Group companies in Japan.
• Revised jurisdiction rules to suit organizational changes in overseas Group companies.

• Establish a system for conducting compliance reviews of appropriately defined business units at a frequency determined using a risk-based approach (annual or biennial).
• Establish an effectively functioning system by creating a framework to operate and improve our Groupwide compliance system and allocating appropriate resources (budget and human resources).
• Establish a system for holding compliance committee meetings or alternative meetings for each appropriately defined business unit at least twice a year, and reporting the results in a timely manner to the Group compliance committee.

• Conducted the specified number of compliance reviews (at each overseas business unit), completed reporting by March, and reflected the results in FYE 2021 measures.
• Established compliance committees or alternative meeting structures in all overseas business units. Distributed compliance guidelines, including fundamental rules.
• Held meetings for each committee two to four times a year, submitted meeting agenda and minutes to each compliance committee, and built a framework for timely reporting of meeting results to the Group compliance committee.
• LIXIL compliance committee met four times a year.

• Maintain and improve Group Code of Conduct basic training and pledge mechanism.
• Create a central framework for planning and tracking history of compliance education and training.
• Basic training completion and pledge rate: 100%
• Training completion rate by region and employee level: 100%

• Basic training completion and pledge rate: 77.6%
  98% in Japan, 53.7% overseas (LWT EMENA: 45.6%, Americas: 85.6%, APAC: 10.7%, LIXIL Africa: 99.5%, LBT: 3.1%, four LHT companies (G2J): 99.3%)
  * G2J is the abbreviation for Global to Japan. G2J factories are manufacturing facilities located outside Japan that manufacture products for the Japanese market.
  * Overseas data incomplete as pledge was delayed due to COVID-19 pandemic.
• Training completion rates by region and employee level were uneven; targets not achieved. Continue to implement in FYE 2021.

• Ensure LIXIL Compliance Hotline — Speak Up! is well known and used as a common system across the Group to track and manage concerns raised.
• Use Speak Up! as a point of contact for customers and business partners to raise compliance-related concerns.
• Disclose important compliance indicators, including number and summary of concerns raised.

• Familiarity with the internal concern-raising system in Japan: 63.3% (from compliance survey conducted FYE 2019). Number of concerns raised: 240 in Japan, 145 overseas (Total: 385)
• Conducted compliance events in each region principally in October and November to promote education and build awareness.
• Regarding number and summary of internal concerns, we are currently preparing the internal communication of concerns lodged outside Japan, and external disclosure is still pending.

• Foster a culture in which risks are owned by respective executives (risk owners) in all global organizations. Encourage risk owners and the risk management, financial, and audit functions to cooperate in the promotion of risk countermeasures to control enterprise risks on a daily basis.

• Developed risk management systems in all Group companies.
• Reassessed important Group risks at the beginning of the year, evaluating them by region on a quarterly basis, and monitoring response.

• Cultivate a risk management culture across all global organizations to ensure timely escalation of incidents, and formulate timeline-driven action plans to ensure appropriate initial countermeasures.

• Crisis management systems developed in all Group companies.
• Based on the crisis management system, crisis events that occurred in Japan and overseas were escalated in a timely manner to the Group HQ.
• Created a handbook for local companies to ensure thorough initial response and Group-wide implementation of the escalation rules. Distributed this to local managers via the risk manager stationed in each region worldwide.

• Ensure the ability to manage and measure activities formulated under the Group Information Security Policy.
• Ensure the security incident response framework is functioning across the Group.
• Ensure prompt responses to changes in security-related environments.
• Ensure an up-to-date and fully acknowledged policy that complies with all local laws and suits individual company circumstances.
• Update the content of security training for employees to reflect changes in the surrounding environment.
• Implement an auditing and improvement PDCA cycle as a means of assessing security.

• Reworked a number of detailed information security rules.
• Currently conducting information security assessments of five Group companies in Japan.
• Currently performing security assessments of overseas Group companies. GROHE assessment completed.

• Completed outline for LJSS incident response framework.
• Targeted email attack training: conducted twice for 20,000 employees*
• Information security pledge: 30,000 employees*
• Information security awareness training (e-learning): conducted for 30,000 employees*

* Targets: LIXIL Corporation, Group companies in Japan, Dalian factory, TOSTEM Thailand, and LIXIL Vietnam

• Information security incidents: 0 incidents that caused real harm, 7 incidents of ID fraud
• Set and agreed to common rules to encourage stronger global security.
• Strengthened cyberattack surveillance; Introduced managed security services (MSS) in APAC and Africa.

• Maximize the value of the Group’s intellectual property by conducting PDCA for the global IP governance structure and processes.
• Hold Global IP conferences to share strategies (at least twice a year).

• Clarified global systems for IP functions and strengthened coordination framework.
• Determined and launched management policy for domain names and power brands.
• Conducted two global IP conferences with senior overseas IP managers (August 2019, February 2020).

• Determine a global IP strategy based on the growth strategies of each technology business.
• Prepare an IT infrastructure for implementing the global IP strategy.

• Implemented an IP strategy pilot project.
• Decided to introduce a global IP administration platform, launched introduction project (February 2020).

• Create, communicate, and implement regional and national policies for areas that require them based on global policies and guidelines.
• Establish appropriate review and application frameworks for procedures based on regional and national policies.
• Establish frameworks for conducting compliance reviews by technology business or other appropriate operational unit at the annual or biennial interval determined using a risk-based approach. Uncover, analyze, and respond to risks in corresponding policy areas.
• Establish fixed programs to help minimize the risk of corruption in the supply chain and distributors.

• Achieved 100% coverage of global compliance policies and guidelines. Coverage ratios by overseas business unit were uneven; targets not achieved. Continue to implement in FYE 2022.
• Training completion rates were uneven by region/specific compliance policy; targets not achieved
• Number of compliance violations: 0
• Conducted compliance reviews of overseas business units at the required interval, completed reporting by March, and reflected the results in FYE 2021 measures.
• Determined global guidelines for implementing

• Achieve at least 30% ratio of women among regularly recruited new hires (LIXIL Corporation, Japan only).

• Ratio of female new graduates employed (incl. those who completed graduate studies): 30.5%

• Achieve at least 8% ratio of women among managers (LIXIL Corporation, Japan only).

• Ratio of women among managers: 5.7%

• Achieve female participation rate in leadership training programs of at least 20% (LIXIL Corporation, Japan only).

• Female participation rate in stage 3 of the Talent Acceleration Program (selective training for young employees): 33.3%

• Achieve engagement index of 39% (10% increase on the 35% score achieved in FYE 2018).

• Engagement index: 35%
• Decided to conduct a different survey from the one illustrated on the left (see below) from now on.
  Achieved engagement score of 56% (+10% y/y) in Japan telecommuting survey (response rate: 62%, with sales offices, HQ, and divisions accounting for 64% of responses).
• Plan to conduct a Group-wide employee opinion survey at the end of July 2020. We seek to accelerate the cycle of improvements by increasing the frequency of the survey from once every two years to four times a year from FYE 2021.

• Achieve favorable response rate in the work-life balance category of 46% (10% increase on the 42% score achieved in FYE 2018)

• Favorable response rate: 44%

• Hold nine meetings of the Central Labor Relations Committee annually (LIXIL Corporation, Japan only).

• Maintain cooperation by promoting regular communication between the union and the company.
• Held nine meetings of the Central Labor Relations Committee over the year.

• Achieve 100% fulfillment of our recruitment plan that aims to increase the number of local factory employees (LIXIL manufacturing subsidiaries).

• Achieved 94% fulfillment of the plan (216 people recruited, incl. 1 university graduate, 25 specialist high school graduates, 17 junior college (two-year college)/technical college graduates, 173 high school graduates).

• Achieve 1,300 participants in the Talent Acceleration Program (TAP) for next-generation leaders (Japan only).

• TAP-1/2/3 participants: 70
• Number of participants to date: 1,265

• Achieve 100% uptake of initial three-year basic education (Japan only).

• Percentage uptake: 100%
  First year follow-up training: 192, second year communication training: 217, third year communication training: 161

• Achieve 100% coverage of the occupational health and safety management system across the Group.

• Achieved 100% acquisition of the occupational health and safety performance data (based on number of employees).
• Conducted regular internal audits of occupational health and safety management frameworks and their operation at each business unit.

• Achieve 100% coverage of the environmental management system across the Group.

• Achieved 100% acquisition of environmental performance data (offices covered).
• Conducted regular internal audits of environmental management frameworks and their operation at each business unit.
• In process of obtaining certification of the environmental management system (ISO 14001) for all LWT Americas factories.

• CO2 emissions reduction attributable to Group products and services: expand by 1.36 times v. FYE2016
• Pursue environmentally-conscious designs that consider the entire product lifecycle.
• Promote the sales expansion of environment-conscious products and services.

• CO2 emissions reduction attributable to products and services: expanded by 1.29 times (amount of CO2 emissions reduced: 65,868 thousand t-CO2)
• Benefitted from environment-conscious EMENA faucet business.
• Achieved solar-panel installation targets early with LTSP’s Tatetoku Value service.

• CO2 emission intensity from places of business across the Group: reduce by 8% v. FYE 2016
• CO2 emission intensity from transportation carried out in Japan by LIXIL as the consigner: reduce by 5%
• Improve water usage efficiency at high-water risk bases.
• Achieve waste recycling ratio from places of business of at least 95% in Japan and Europe, 66% in Asia, and 40% in North America.

• CO2 emission intensity from places of business: reduced by 14.3% (Total volume down 6.3%)
• CO2 emission intensity from transportation: reduced by 2.8%
• Achieved targets in three high-water risk bases.
• Waste recycling ratios: 96.2% in Japan and Europe, 90.4% in Asia, and 26.6% in North America
• Began procuring 100% renewable energy at LIXIL WING campus and all GROHE factories.
• Achieved a great improvement in waste recycling at LWT Asia (Rangsit and Rayong in Thailand).

• Implement human rights due diligence globally, and define and reduce LIXIL business-related human rights risks for customers, employees, business partners, and other stakeholders.

• Introduced various means focusing especially on surveys by Human Rights Due Diligence Task Force to facilitate a better understanding and handling of potential human rights risks.
• Complemented existing measures by planning a survey of all employees focusing on LIXIL’s key human rights issues and potential future human rights risks.
• Conducted compliance education and training directed at all employees.
• Conveyed information on human rights on internal social media that all employees can access.

• Respond swiftly and sincerely to any human rights violations and instigate improvements, regularly review human rights due diligence frameworks, and ensure highly transparent disclosure of due diligence activities and processes.

• Employed the existing concern-raising system.
• Maintained the Human Rights Due Diligence Task Force’s process decision-making approach and exchanged opinions at least once a year.
• Determined seven key human rights issues requiring a focused effort to reduce potential human rights risks.

• Improve the sanitary environments of 100 million people.

• Shipped 3.8 million units of our SATO Toilet Systems to over 38 countries, reaching 18.6 million people.
• Goal to reach 100 million people extended to FYE 2026 (from FYE 2021).

• Conduct 10 or more research activities using digital or other technologies.
• Contribute to society by publicly announcing some of our research results.

• Conducted five research activities.
• Made two external announcements.
• Exhibited News from the Toilet, an AI-driven defecation management system for residents in elderly care facilities, as a reference technology at the International Home Care and Rehabilitation Exhibition 2019 and Combined Exhibition of Advanced Technologies (CEATEC) 2019.
• Conducted Cool Peace Project, an awareness-raising initiative aimed at spreading knowledge on how to prevent indoor heatstroke (monitoring indoor temperatures in regular houses, including elderly households, and investigating the benefits of Style Shade sun blinds).

• CR survey of Group-wide suppliers
  Achieve coverage ratio of 90% in Japan, 90% overseas (based on purchased amount).
  Achieve 90% conformity rate.*
  Coverage area: Suppliers to LIXIL Corporation and its subsidiaries
  Japan: Procurement at domestic operations, overseas: procurement at overseas operations

* Overseas data undetermined as coverage area undergoing review

• Coverage ratio
  97% in Japan, 90% overseas*
  Greatly expanded Japan survey coverage ratio in FYE 2020.
• Average conformity rate
  89% in Japan, 87% overseas*
  Will continue follow-up activities, and expect to achieve the targets as planned in FYE 2021

* Exclude American Standard Brands

• Maintain zero cases of serious product accidents across the Group.

• Serious product-related accidents: 7
  (single gas stove: 2, side-hinged outward-opening window: 1, gate doors: 1, double-sliding windows:
  1, sliding shutters: 1, general-purpose door: 1)
• Conducted product-related crisis management meetings to make reports and discuss corrective actions.
• Filed information on accidents in the database and reviewed them one by one to determine if any corrective actions were necessary. Carried out product improvements and awareness-raising on safe use as necessary.

• Conduct customer satisfaction surveys on products and services across the Group, and continuously monitor and disclose results.

• Continued to conduct the surveys and expanded the scope to:
  1) product quality
  2) showrooms
  3) call centers
  4) after-sales maintenance
  5) sales representatives
• Customer satisfaction level: 73.5%