Message from CR Committee Chairperson

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Jin Song Montesano

Jin Song Montesano
Director, Executive Officer, Executive Vice President, Human Resources and General Affairs, Public Affairs, Investor Relations, External Affairs, and Corporate Responsibility, and Chief People Officer

The COVID-19 pandemic has highlighted the importance for businesses to do the right thing and consider the needs of their most important stakeholders, including employees, customers, suppliers, business partners and society at large. At LIXIL, our commitment to Corporate Responsibility (CR) is stronger than ever.

LIXIL’s corporate purpose is to make better homes a reality for everyone, everywhere. CR forms an integral part of our Value Creation Process to deliver on this purpose, and we execute our CR Strategy through our business activities. This approach of embedding CR within our core business strategies is not only necessary to demonstrate our ESG credentials but has also generated two clear benefits. The first is the sense of pride it instills in our employees, who are motivated by being a part of LIXIL. The other is the growth in opportunities to collaborate with customers and partners with Sustainable Development Goals (SDGs) as the common language.

Our strong commitment to CR has continued to gain global recognition. LIXIL has been listed in the respected Dow Jones Sustainability World Index for two consecutive years and Dow Jones Sustainability Asia Pacific Index for four years. We also have continued to be included in FTSE4Good and MSCI Japan Empowering Women Select indices. We are honored to receive these recognitions, which represent the progress we have made toward becoming a global leader in sustainability.

Refining Material Issues

To focus our efforts on realizing our corporate purpose effectively while fully utilizing our resources, we reviewed and updated our material issues in FYE2021. Factoring in the latest sustainability trends and the current social and business environment, we defined 20 issues that matter most to LIXIL and our stakeholders. Through the review process, we reaffirmed that the priorities in which LIXIL can play a significant role by using our unique expertise are reflected in our three strategic pillars of Corporate Responsibility.

Global Sanitation and Hygiene

I am delighted to report that we are on track to meet our ambitious goal to improve the lives of 100 million people through safe sanitation and hygiene by 2025, through the tremendous growth of our SATO social business. This venture is truly unique to LIXIL, and we are very proud of the progress we are making.

Amid the urgent need for handwashing as the first line of defense against COVID-19, we launched SATO Tap, an affordable off-grid handwashing station, in 2020 and started production in India and Tanzania. This simple and functional product, designed for more than 40% of the global population who do not have access to a handwashing facility with soap and water, has proved to be a practical solution to help improve hygiene and fight the spread of diseases. SATO Tap was named one of TIME’s best inventions of 2020 as an innovation that facilitates effective handwashing.

SATO’s focus now is to expand the product lineup to meet specific local needs and challenges worldwide. Harnessing the power of collaboration, we work closely with valued partners such as UNICEF, USAID, JICA, the Toilet Board Coalition, and local NGOs to strengthen local sanitation ecosystems as well as engage in advocacy to advance the importance of and appreciation for the value of improved sanitation. We are also continuing to build on the momentum in raising awareness of our MAKE A SPLASH! partnership with UNICEF among our consumers through successful campaigns under the GROHE brand in Europe and the LIXIL Owners Club campaign in Japan.

Water Conservation & Environmental Sustainability

The world’s consumption of energy, water, and natural resources continues to rise dramatically every year. Against this backdrop, countries worldwide have pledged to accelerate their drive to reach net-zero carbon emissions by 2050.

At LIXIL, we believe that it is imperative we recognize and fulfill our responsibility to help protect the planet. Our Environmental Vision 2050 aims for LIXIL to achieve net-zero carbon emissions and preserve water and natural resources in operations, housing and lifestyle solutions for future generations to become a leading company in environmental sustainability by 2050. To achieve these goals, we are focusing on climate change mitigation and adaptation, water sustainability, and circular economy, through which we seek to reduce the environmental impact of the entire value chain and also capture opportunities to improve the environmental value of our products and services.

As a part of our drive to contribute to the realization of a circular economy, we established the LIXIL Plastics Action Statement in October 2020. The group-wide commitment is a further step forward for LIXIL in pursuing responsible use of plastics and other resources through innovation. We will be implementing measures to reduce single-use plastics, promote recycling, accelerate research and development of renewable materials, and actively use eco-friendly alternatives in all our business processes, products, and services.

To ensure that we have a clear roadmap ahead to deliver on our 2050 vision, we are currently formulating environmental milestones for 2030, including specifying a target reduction of CO2 emissions. We will be using the TCFD framework to monitor and disclose our climate action progress, analyze risks and opportunities, formulate strategies, and reflect them in our business plans.

Diversity & Inclusion

As a maker of pioneering water and housing products, LIXIL serves a consumer base as diverse as society itself. To become a company that can achieve sustainable growth and deliver on our purpose, we must become a truly consumer-centric organization that can understand our users and offer innovative products and solutions in anticipation of their needs. D&I is fundamental to achieving this cultural transformation, as new ideas and technologies can only come to life in a truly inclusive working environment.

At LIXIL, we are accelerating our transformation to foster a corporate culture in which our employees want to work and thrive. In March, we renewed our D&I Strategy and goals for 2030, focusing on inclusion as our goal, with the belief that achieving inclusion will lead to sustainable diversity. The enterprise-wide D&I strategy includes ambitious new gender equity targets, which we believe serves as a proxy for measuring our progress toward a more inclusive culture. Our goals include achieving 50:50 gender parity in Board of Directors and Executive Officer roles and females in 30% of managerial positions across the organization by 2030. Specific targets have also been set to reflect regional priorities, such as maintaining equal gender ratio for all new graduate hires in Japan.

The challenges that COVID-19 has imposed on the world reinforces our belief that we can contribute to society by delivering on our corporate purpose. Last year, we were proud to see our employees swiftly come together to support the needs of the communities as they faced the global pandemic.

With a clear purpose and engaged employees, LIXIL is uniquely placed to play an important part in society. We still have a long way to go and there is much more we can and should engage in going forward. I am, however, excited about the progress we are making and will continue to seek ways to accelerate our CR initiatives in a strategic and agile manner.

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