• 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 Group-wide 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, completed reporting by the end of March, and reflected in upcoming fiscal year measures (Japan-based companies with a compliance committee and companies with accountable managers)
• Established compliance committees or alternative meeting structures in all business units worldwide. Distributed compliance guidelines, including fundamental rules
• Held each committee meeting between two to four times a year. Built a framework for timely reporting of meeting results to the Group compliance committee
• LIXIL Group compliance committee met four times a year

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

• Basic training completion and acknowledgement rate: 96.1%
  96% in Japan and 96.3% outside Japan (LWT EMENA: 90.8%, Americas: 94%, APAC: 100%, LIXIL Africa: 88%, LBT: 94.5%, four LHT companies (G2J*): 99.8%)

  * G2J is the abbreviation for Global to Japan. G2J factories are manufacturing facilities located outside Japan that manufacture products for the Japanese market

• Not achieved due to variation in training completion rates by region and employee level. Continue to implement in FYE2020

• Ensure 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%. Number of concerns raised: 187 in Japan and 191 outside Japan (Total: 378)
• Conducted compliance events in each region in October and November to promote education and build awareness
• Currently preparing an internal system to summarize internal concerns raised. Therefore, 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, the risk management department, and the audit department to cooperate in the promotion of risk countermeasures to control enterprise risks on a daily basis

• Risk management systems developed in all Group companies
• Group Internal Audit Committee performed quarterly monitoring of response of risk owners to significant Group-wide risks
• Intend to review a list of Group risks in the upcoming fiscal year, and conduct risk assessments of major businesses and regional operations worldwide. Based on the results, we plan to identify significant management risks and conduct regular monitoring in the appropriate committee

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 established in the previous fiscal year, crisis events that occurred in Japan and overseas were escalated in a timely manner to Group headquarters
• Created a handbook for local companies to ensure thorough initial response and Group-wide acknowledgement 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

• Revised our information security regulations and reworked a number of detailed rules
• Conducted assessments of eight Group companies in Japan
• Detailed information security rules were implemented at LJSS, LIXIL Housing Research Institute, and LIXIL REALTY, and are now being compiled at LIXIL VIVA
• Conducted two training sessions for 30,000 people on how to respond to targeted mail attacks
• Implemented an information security pledge
• Information security incidents: 2 malware infections (VINAX and TTC) and 8 ID impersonations
• Formed a system to help strengthen security on a global scale, and decided security strengthening initiatives and implementation schedule for FYE2020

• Maximize the value of the Group’s intellectual property by conducting PDCA for the global IP governance structure and processes
• Hold IP Committee meetings quarterly

• Drew up a draft Group IP Management Guideline. Specified the establishment of the IP Committee
• Selected a global IP platform in discussion with all regional operations
• Held three global IP Committee meetings with IP Department managers from each region

• Determine global IP strategy based on the growth strategies of each technology business
• Prepare a system for implementing global IP strategy

• Launched a new pilot project
• Started planning the forming of a global IP operation platform

• Scope of compliance policy coverage (%)
• Completion rate of compliance education and training (%)
• Number of compliance violations (incidents)
• Adoption rate of global policy and guidelines (%)
• Establish a standard program for minimizing corruption risks of our supply chain and agents etc.

• Achieved 100% coverage of global compliance policy and guidelines (adoption rate by company unconfirmed)
• Not achieved due to variation in training completion rates by region/specific compliance policy
• Number of compliance violations: 0
• Determined global guidelines for implementing business partner due diligence. Plan to conduct training in the FYE2020 and beyond

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): 33.2%

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

• Ratio of women among managers: 5.72%
• Implemented policy to register at least 30% of highly qualified regular employees for planned successor training in order to increase the number of potential female manager candidates

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

Participation in talent acceleration program stage 3 (selective training for young employees): 29.2%

Achieve engagement index of 39% (10% higher than in previous survey)

• With the exception of a few organizations (LWT EMENA and H&S), no opinion surveys were conducted in FYE2019
• Next survey scheduled for FYE2020

Achieve work-life balance score of 46% (10% higher than in previous survey)

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

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 100% fulfillment of the plan (200 people recruited, incl. 1 university graduate, 23 specialist high school graduates, 16 junior college (two-year college)/technical college graduates, 160 high school graduates)
• Regularly visited schools in each area and took part in job fairs to help achieve the target

Achieve 1,300 participants in the talent acceleration program (TAP) for next-generation leaders (Japan only)

Number of participants to date: 1,195

Achieve 100% uptake of initial 3-year basic education (Japan only)

Percentage uptake of first to third year employees: 100%
first year follow-up training: 218, second year communication training: 183,
third year communication training: 139

Formulate next-generation leader training plans for the Group’s 200 major positions

Achieved 100% coverage of the 160 major positions across the Group (reduced from 200 after reconfirming the actual necessary number of positions), for which lists of potential emergency interim managers and potential next and future successor candidates were created, training plans formulated, and discussions held with management on the plans

Provide common learning opportunities for the Group’s 800 next-generation leader personnel

Provided leadership e-learning opportunities using common Group contents for 1,200 employees across the Group. Target achieved in FYE2019, so no training to be conducted in FYE2020

Achieve 100% Group-wide coverage of EHS management system

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

100% coverage of Group-wide EHS management system

• Achieved 100% acquisition of environmental performance data (offices covered)
• Conducted regular internal audits of each business’s environmental management system and its operation
• Application for ISO14001 certification of environmental management systems for all LWT Americas production facilities is proceeding as planned

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

• CO2 emission reduction attributable to products and services: improved by 1.21 times (Amount of CO2 emissions reduced: 61,577 thousand t-CO2)
• Strengthened sales activities for SAMOS X hybrid insulating window, and PR for PRESEA-H hybrid thermal windows for communal residential buildings

• Reduce total CO2 emissions from operational processes across the Group by 8% v. FYE2016
• Reduce CO2 emission intensity from transportation carried out in Japan by LIXIL as the consigner by 5%
• Improve water usage efficiency at high-water risk bases
• Raise waste recycling ratio from places of business to at least 95% in Japan and Europe, 66% in Asia and 40% in North America

• CO2 emissions from places of business: increased by 3.2% (Reduced by 4.5% on basis of emission intensity per unit of output)
• CO2 emissions from transportation: reduced by 1.1%
• Set targets for reducing water used and discharged and extending use cases of recycled water at six high-water risk bases, and promoted related activities
• Waste recycling rates: 95% (Japan and Europe), 62% (Asia), and 34% (North America)

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

Redrafted the existing global expansion plan and formulated a new plan, which will be gradually extended from Japan to other regions worldwide in the upcoming fiscal year

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 existing compliance hotline
• Maintained the existing framework for deciding human rights survey contents and processes, which is driven by the Human Rights Due Diligence Task Force composed of managers from compliance, risk management, human resources and purchasing departments

Offer the benefit of our solutions to a total of 100 million people

• Shipped over 2.5 million units of our products (over 12.5 million beneficiaries in total)
• Shipped to more than 25 countries so far, including ten new destinations added this year

Conduct ten research activities using digital and other technologies

• Conducted five research activities using digital and other technologies
• Made a conference presentation on bathroom accidents among seniors (Presented at the Japanese Society of Biometeorology, etc. in cooperation with universities)
• Conducted verification testing of night-time monitoring at nursing homes (Conducted using dedicated sensors since January 2019 in cooperation with Z-Works under our accelerator program), etc.

CR survey of Group-wide suppliers

• Achieve 90% global coverage ratio (based on purchased amount)
• Achieve 90% conformity rate
• Achieve 100% improvement rate

• Coverage ratio: top 90% of suppliers in terms of purchased amount (483 companies in Japan)
• Average conformity rate: 93.5% (Japan)
• Visited low-rated suppliers and achieved 100% improvement rate

Maintain zero cases of serious product accidents across the Group

• Critical product-related accidents: 8
  (Single gas stove: 2, warm-water electronic toilet seat: 2, oil- fueled water heater: 1, small electric water heater: 2, bathroom ventilator/dryer/heater: 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 survey and expanded the scope to:
  1) product quality
  2) showrooms
  3) call centers
  4) after-sales maintenance
  5) sales representatives
• Customer satisfaction level: 70.6%