Corporate Social Responsibility Information

CSR Material Issues and CSR Mid-Term Plan

Identifying Sumitomo Forestry Group CSR Material Issues

Following changes in the economic, environmental and social situation, in March 2015, the Sumitomo Forestry Group identified new CSR material issues to replace the ones specified in 2008.
The Group surveyed both internal and external stakeholders as well as outside experts, receiving responses from about 2,700 people. In preparing the questionnaire, 27 issues most closely related to the Sumitomo Forestry Group were specified, based on the Sumitomo Forestry Group’s Corporate Philosophy and Action Guidelines, and taking into account such matters as ISO 26000, the international standard on the social responsibility of organizations, and evaluation points linked to socially responsible investment (SRI).
After incorporating management perspectives, the survey results were mapped out against axes of “management” and “stakeholders,” before determining the materiality of each issue. 12 of these issues were identified as being highly material, and rearranged into 5 issues for the Sumitomo Forestry Group CSR Material Issues.

Sumitomo Forestry Group CSR Material Issues

Continue to procure wood and materials that take sustainability and biodiversity into consideration

Promote the reduction of the environmental impact of our business activities

Promote the development of workplaces where diverse personnel can work with vigor and enthusiasm, demonstrating their abilities and individuality

Strengthen and promote risk management and compliance mechanisms

Promote the development and sales of products and services that are safe, reliable and environmentally conscious

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Formulating the Sumitomo Forestry Group Mid-Term
CSR Management Plan

In March 2015, the Sumitomo Forestry Group formulated the Sumitomo Forestry Group Mid-Term CSR Management Plan with fiscal 2020 as its target year.
The Plan sets basic strategies and specific targets aimed at resolving the five “Sumitomo Forestry Group CSR Material Issues” which were mapped out based on “management” and “stakeholders” perspectives. Regarding social and environmental issues to be accomplished by fiscal 2020, each Group company and department has commenced initiatives starting in fiscal 2015 aimed at achieving targets segmentalized for each fiscal year.
A PDCA cycle is steadily followed, with progress and attainment of the annual targets based on the Sumitomo Forestry Group Mid-Term CSR Management Plan being regularly checked twice a year by the Executive Committee, which is attended by those directors who also serve as executive officers as well as by senior statutory auditors.
The Sumitomo Forestry Group aims to promote CSR management even further.

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CSR Material Issues and CSR Mid-Term Plan

Material Issue 1  Continue to procure wood and materials that take sustainability and biodiversity into consideration.

As the world’s forests continue to decrease in size as a consequence of illegal logging, excessive slash-and-burn farming and other practices, various countries are proceeding to introduce laws and strengthen regulations to eliminate illegally logged timber from the market. Meanwhile, in Japan, maintenance of forests, and of planted forests in particular, has halted in part because of an aging and declining forestry workforce, and there are growing concerns about some forests becoming devastated.
Amid this situation, the Sumitomo Forestry Group is engaged in business centered around wood, and is promoting sustainable forest management and sustainable procurement of wood both in Japan and overseas.
Furthermore, since its fields of business are directly linked to forests that nurture biodiversity, the Group has positioned conserving biodiversity as one of its key CSR themes.

Sales of “KIKORIN-PLYWOOD,” the environmentally-friendly plywood

Sales of “KIKORIN-PLYWOOD,” the environmentally-friendly plywood

Greenery of a home mainly with indigenous plant species

Greenery of a home mainly with indigenous plant species

Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result R
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FY2016 target FY2020 target
Environ-mentally responsible society Increase volume of sustainable wood handled, and utilize sustainable forest resources by verifying legal compliance Percentage of certified timber among all imported timer sold 11% 8%
symbol for Independent assurance
9% 12%
Volume of exported Japanese timber 117 thousand ㎥ 104 thousand ㎥
symbol for Independent assurance
158 thousand ㎥ 200 thousand ㎥
Volume of plantation timber, certified timber, and Japanese timber handled at distribution hubs overseas 659 thousand ㎥ 706 thousand ㎥ 781 thousand ㎥ 783 thousand ㎥
Volume of fuel wood chips handled 758 thousand ㎥ 777 thousand ㎥
symbol for Independent assurance
773 thousand ㎥ 800 thousand ㎥
Volume of certified timber (by SGEC) handled at distribution hubs in Japan 43 thousand ㎥ 35 thousand ㎥
symbol for Independent assurance
55 thousand ㎥ 85 thousand ㎥
Volume of unused wood materials handled from Japanese timber 88 thousand tons 119 thousand tons
symbol for Independent assurance
181 thousand tons 185 thousand tons
Percentage of Japanese timber used for new custom-built detached housing in the housing business Multi-Balance Construction Method 72% 71%
symbol for Independent assurance
72% 75%
Big-Frame Construction Method 52% 50%
symbol for Independent assurance
51% 55%
Percentage of reviews conducted for timber product suppliers who handle directly imported timber and timber products with verified legal compliance 100% 100% 100% 100%
Establish forestry management that enables conservation of biodiversity, and value as natural capital Percentage of certified (by SGEC) forests in newly acquired forests managed by the Group 100% 100% 100% 100%
Number of native species planted at new detached housing sites 38,800 trees 36,050 trees
symbol for Independent assurance
40,000 trees 210,000 trees
/6 yrs
  • Rating
  • ○:Achieved △:Achieved at least 70% of the target ×:Achieved less than 70%

Material Issue 2  Promote the reduction of the environmental impact of our business activities

As the impact of climate change becomes more urgent globally, companies are being asked to reduce their emissions of greenhouse gases as a measure to counter global warming.

Being engaged in the housing business and in the timber, building materials and sawn wood businesses, the Sumitomo Forestry Group is considerate of its impact on the environment, and is committed to reducing the volume of greenhouse gases emitted from its business activities.

Furthermore, in an effort to reduce its environmental impact and to use resources effectively, the Group promotes the reduction, recycling and reuse of industrial waste.

Promoting switching to fuel efficient vehicles

Promoting switching to fuel efficient vehicles

Operation of the Metropolitan Area Recycling Center, capable of undertaking the advanced sorting of waste

Operation of the Metropolitan Area Recycling Center, capable of undertaking the advanced sorting of waste

Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result R
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FY2016 target FY2020 target
Low-carbon society Reduce CO2 emissions in the Group In the office segment (consolidated company within and outside Japan) Change in CO2 emissions compared to FY2013 3.1% reduction Total emissions 34,345 t-CO2 6.7% reduction Total emissions 33,055 t-CO2 4.5% reduction Total emissions 33,746 t-CO2 7% reduction Total emissions 32,859 t-CO2
Sumitomo Forestry (offices in Japan) 4.9% reduction 10.6% reduction 8.1% reduction
Affiliated companies in Japan (offices) 2.1% reduction 3.3% reduction 2.2% reduction
Affiliated companies outside Japan (offices) 2.4% increase 1.2% increase 5.6% increase
Kutai Timber Indonesia (Indonesia) Change in CO2 emissions per production volume compared to the previous year 1.4% reduction 5.9% increase 1.9% reduction At least 1% reduction per year on average per production volume in FY 2015 - 2020
Vina Eco Board (Vietnam) 0.9% increase 5.7% reduction 2.2% increase
AST Indonesia (Indonesia) 2.6% reduction 7.3% increase 0.9% increase
Alpine MDF Industries (Australia) 4.5% reduction 5.5% increase 4.6% increase
Nelson Pine Industries (New Zealand) 2.4% increase 5.2% reduction 0.4% reduction
Rimba Partikel Indonesia (Indonesia) 12.8% reduction 53.1% increase 18.3% reduction
Reduce CO2 emissions outside the Group (products, service recipients) Solar power generation systems (sets) handled by distribution hubs in Japan 2,400 sets 2,140 sets
(10,700 kW)
1,900 sets
(8,930 kW)
2,330 sets
(10,951 kW)*1
Percentage of Green Smart houses
Number of Green Smart houses when an order is placed for new custom-built detached housing / total number of houses ordered
68.0% 58.2%
symbol for Independent assurance
70.0% 80.0%
Percentage of Green Smart・ZEH type Number of Green Smart・ZEH type when construction started / total number of houses that started construction 12.0% 2.0%
symbol for Independent assurance
*2 6.0% At least 50%
  • *1. Starting fiscal year 2016, the unit of evaluation will be changed to kW to examine the level of contribution to the environment
  • *2. The fiscal year 2015 result is not evaluated because the product definition was revised
  • Rating
  • ○:Achieved △:Achieved at least 70% of the target ×:Achieved less than 70%
Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result R
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FY2016 target FY2020 target
Recycling society Achieve zero emissions Recycling rate at new housing construction sites 93.3% 90.8%
symbol for Independent assurance
91.5% 98.0%
Recycling rate at remodeling sites 76.3% 70.2%
symbol for Independent assurance
74.1% 80.0%
Reduce volume of industrial waste generated Reduction in industrial waste generated at new construction sites compared to fiscal 2013 14.7% reduction 2.5% reduction 17.6% reduction 30% reduction
Change in industrial waste per sales cost*3 compared to FY2014 2% reduction 4.3% increase 3.7% increase At least 2% reduction
  • *3 Cost of in-house sales for manufacturing facilities in Japan
  • Rating
  • ○:Achieved △:Achieved at least 70% of the target ×:Achieved less than 70%
Economic Effect Seen by Promoting the Reduction of the Environmental Impact of Our Business Activities
Effects Value (million yen)
Income Profit on sales of securities 31
Cost Reduction Cost Reduction Amount saved as a result of energy-saving efforts
*Include the fluctuation of petroleum price
266
Amount saved as a result of waste reduction efforts 62
Total 359

Material Issue 3  Promote development of workplaces where diverse personnel can work with vigor and enthusiasm, demonstrating their abilities and individuality

The Sumitomo Forestry Group aims to foster a safe and healthy workplace environment where motivated employees can be actively involved irrespective of gender, age, nationality, race, religion or disability.
In an endeavor to actively engage female employees in particular, the Group released the “Sumitomo Forestry Group Declaration on Empowering Women.” It was issued to the entire Group under the name of the President, and has been the basis for subsequent efforts.

Brainstorming for  the “Development through Women’s Perspective Project”

Brainstorming for the “Development through Women’s Perspective Project”

Safety inspection at a building construction site

Safety inspection at a building construction site

Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result R
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FY2016 target FY2020 target
Promote fair employment and treatment Female employees in management positions Non-consolidated 2.6% 2.8%*1
symbol for Independent assurance
2.9% At least 5%
Consolidated in Japan 3.2%*1
Female employees Non-consolidated 19.2% 19.9%*1
symbol for Independent assurance
19.5% At least 20%
Consolidated in Japan 23.3%*1
Employees with disabilities (Achieve mandatory employment rate) Non-consolidated 2% 2.12% At least 2% At least 2%
Consolidated in Japan 1.48%*2
Promote work-life balance Paid leave usage Non-consolidated 7 days 6.3 days 8 days At least 10 days
Consolidated in Japan Target set by each company 7.1 days Target set by each company
Overtime working hours (Reduction from the average overtime working hours in FY2013) Non-consolidated ▲10% ▲2.5% ▲14.8% ▲30%
Strengthen occupational health and safety Number of occupational injuries in Company-owned forests*3 Non-consolidated 0 1 0 0
Number of occupational injuries at new construction sites*4 Non-consolidated 0 6
symbol for Independent assurance
0 0
Number of occupational injuries in other places*4 Consolidated in Japan 10 Target set by each company 0
  • *1. Data as of April 1, 2016
  • *2. Data as of June 2015
  • *3. Number of occupational injuries involving contractors at work sites in Company-owned forests
  • *4. Number of cases covered by temporary absence with work compensation benefits under the Industrial Accident Compensation Insurance Act
  • Rating
  • ○:Achieved. △:Did not achieve but improved from the previous year. ×:Did not achieved and no improvement or worse performance.

Material Issue 4  Strengthen and promote risk management and compliance mechanisms

We are working to reinforce the mechanism for managing business risk—which also encompasses Group companies—by constantly managing prioritized risks through the Risk Management Committee.

Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result Rating FY2016 target FY2020 target
Strengthen risk management framework Check the progress on the 39 prioritized risk items at the quarterly Risk Management Committee meeting. In addition to discussions on the target items, case reports on emerging risks were started at the monthly Executive Committee meeting. Check the progress on the 36 prioritized risk items at the quarterly Risk Management Committee meeting. Manage risks by using prioritized risk items set by the Risk Management Committee.
  • Rating
  • ○:Achieved △:Achieved at least 70% of the target ×:Achieved less than 70%

Material Issue 5  Promote the development and sales of products and services that are safe, reliable and environmentally conscious

Sumitomo Forestry believes that popularizing durable, high-quality houses as social assets plays an important role in creating a prosperous society. In addition, Sumitomo Forestry actively promotes the use of the Excellent Long-term Housing Certification and the Japanese Housing Performance Indication System for customer’s peace of mind and safety and in order to enhance property value.

Sumitomo Forestry Home houses set the standard specification to meet “Excellent Long-term Housing” standards

Sumitomo Forestry Home houses set the standard specification to meet “Excellent Long-term Housing” standards

Current awareness of issues and basic strategies Evaluation metrics FY2015 target FY2015 result R
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FY2016 target FY2020 target
Improve safety and quality Ratio of design performance evaluations implemented for new custom-built detached housing At least 90% 98.6% At least 90% At least 90%
Ratio of construction performance evaluations implemented for new custom-built detached housing At least 90% 97.3% At least 90% At least 90%
Ratio of houses certified as Excellent Long-Term Housing for new custom-built housing At least 90% 92.8% At least 90% At least 90%
Improve communication with customers Pass rate for after-sales maintenance advisors and housing inspectors (All persons assigned to Sumitomo Forestry Home Tech Co., Ltd. in charge of maintenance) 100% 100% 100% 100%
Ratio of early completion of handing the as-built drawing for new custom-built detached housing 80% 69% 80% 90%
  • Rating
  • ○:Achieved △:Achieved at least 70% of the target ×:Achieved less than 70%

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CSR Report 2016