Former Mid-Term CSR Management Plan and Results

In keeping with the Sumitomo Forestry Group Mid-Term CSR Management Plan formulated in fiscal 2015, we defined quantitative targets each year for both environmental and societal issues to be addressed by fiscal 2020. In undertaking specific measures, we have incorporated these targets into the CSR budget, and subjected them to PDCA cycles. Results through fiscal 2018 are explained below.

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

We conduct regular inspections of all of our suppliers of direct import timber and timber products to ensure legality. The volume of domestically produced timber and log exports is increasing year by year, particularly with respect to China. And the recent increase in demand at biomass power generation plants has caused an increase in the volume of fuel wood chips handled.

Relevant SDGs:12, 13, 15

Current awareness of issues and basic strategies Indicators for Evaluation FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Environmentally responsible society Increase volume of sustainable wood handled, and utilize sustainable forest resources by verifying legal compliance Percentage of certified timber among all imported timber sold (%) 10.9 12.8 11.0Independent assurance 12.0 12.0
Volume of exported Japanese timber (thousand m³) 70 120 160Independent assurance 183 200
Volume of plantation timber, certified timber, and Japanese timber handled at distribution hubs overseas (thousand m³) 812 1,163 629 626 783
Volume of fuel wood chips handled*1 (1,000m³) 812 847 1,132Independent assurance 1,316 1,380
Volume of certified timber (by SGEC) handled at distribution hubs in Japan (thousand m³) 68 78 78Independent assurance 68 85
Volume of unused wood resource handled from Japanese timber (kt) 191 286 338Independent assurance 236 236
Percentage of Japanese timber used for new custom-built detached housing (Housing and Construction Division) Multi-Balance Construction Method 70.9 71.0 71.0Independent assurance 71.0 75.0
Big-Frame Construction Method 50.0 50.0 50.0Independent assurance 50.0 55.0
Percentage of reviews conducted for wood product suppliers who handle directly imported timber and wood products with verified legal compliance (%)
(Timber and wood product department)
100 100 100 100 100
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 (%) 100 100 100 100 100
Number of native species planted at new detached housing sites (trees) 30,614 31,248 30,101Independent assurance 36,000 210,000
/6 years

*1 Quantity including imported PKS and pellets, from FY2018 targets and results.

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

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

Office segment CO2 emissions volumes have been trending downward year by year. Since the initial 7% reduction target was achieved early, the target was adjusted upward in April 2018 to a 16% reduction. Gasoline consumption volume has been cut through the phasing in of hybrids in the company-owned vehicle fleet, while electric power consumption has been cut by switching to LED lighting and reducing overtime work by having personal computers shut down at preset times, all of which have helped reduce CO2.

In non-office segment, meanwhile, increases in electricity consumption volume resulted from the introduction of new equipment, while declining sales resulted in a failure to reduce per-unit CO2 emissions volumes as planned at some overseas manufacturing plants.

Regarding the ZEH specification ratio, we did not reach our target level of 45%, although the ratio is increasing year by year. We will continue to bring up the ZEH specification ratio by actively showcasing the appeal of first-rate insulation performance compared to other major housing builders.

Relevant SDGs:7, 12, 13, 15

Current awareness of issues and basic strategies Indicators for Evaluation FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Low-
carbon society
Reduction of CO2 emissions in the Group In the office segment (consolidated company within and outside Japan) Change in CO2 emissions compared to FY2013 (%) -7.8 Total emissions 33,660 t-CO2 -10.1 Total emissions 31,871 t-CO2 -14.1 Total emissions 30,454 t-CO2 -11.4 Total emissions 31,407 t-CO2 -16.0 or more
Sumitomo Forestry (offices in Japan) -13.9 -18.7 -25.2 -19.4 -
Affiliated companies in Japan (offices) -0.9 -4.6 -6.1 -1.8 -
Affiliated companies outside Japan (offices) -0.7 +14.0 +14.1 -3.0 -
Kutai Timber Indonesia (Indonesia) Change in CO2 emissions per production volume compared to the previous year (%) +3.1 -10.8 +4.3 +0.8 At least 1.0% reduction per year on average per production volume in FY2015 - 2020
Vina Eco Board (Vietnam) -5.4 +38.0 -10.6 -23.9
AST Indonesia (Indonesia) +16.0 +9.0 +20.6 -4.1
Nelson Pine Industries (New Zealand) -0.7 -5.8 +0.2 +23.7
Rimba Partikel Indonesia (Indonesia) +15.8 -9.6 -1.2 -0.5
Reduction of CO2 emissions outside the Group (products, service recipients) 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)
61.6 69.4 72.1Independent assurance 73.0 At least 80.0
Percentage of ZEH type houses (%)
(Number of ZEH type houses / total number of houses ordered)*1
32 33 40Independent assurance 45 At least 80.0

*1 Excludes Hokkaido, Okinawa.

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

The amount of industrial waste such as construction debris generated at new housing construction sites was reduced and the recycling rate was increased through the efforts of the Company's working group that included changing the standard dimensions of sub-floor plasterboard to reduce the amount of non-recyclable waste generated, and adopting reusable packing materials for flooring, etc.

Expansion of the area subject to inter-region recovery and recycling certification also helped reduce industrial waste.

Relevant SDGs:11, 12

Current awareness of issues and basic strategies Indicators for Evaluation FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Recycling society Achieve zero emissions Recycling rate at new housing construction sites (%)*1 92.5 92.5 94.1Independent assurance 93.9 98.0
Recycling rate at renovation sites (%)*2 76.2 76.2 77.7Independent assurance 77.6 80.0
Reduce volume of industrial waste generated Reduction in industrial waste generated at new housing construction sites compared to FY2013 (%) -8.8 -15.5 -31.9 -20.6 -30
Change in industrial waste per sales cost*3 compared to FY2014 (%) -2.6 +5.2 +14.4 +1.9 At least 2%

*1 New housing construction sites under the Housing and Construction Division

*2 Includes housing-related materials sales by the Renovation Business, Lifestyle Service Business and Chip manufacturing plants.

*3 Cost of in-house sales for manufacturing facilities in Japan

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

Economic Effect Seen by Promoting the Reduction of the Environmental Impact of Our Business Activities

Regarding energy consumption volumes, gasoline was reduced by 4.4% and electric power was reduced by 4.0%, although a 9.8% increase in gasoline unit cost meant that no cost-cutting effect was achieved.

Effects Value (million yen)
Income Profit on sold for value 46
Cost Reduction Cost Reduction Amount saved as a result of energy-saving efforts
* Include the fluctuation of petroleum price
-41
Amount saved as a result of waste reduction efforts 124
Total 129

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

Measures aimed at changing employee awareness regarding work responsibilities helped reduce overtime working hours. These measures included encouragement of tablet terminal device use and direct commuting to and from home to increase operational efficiency, while setting work PC shut-off times and revising employee evaluation methods.

The rate of paid vacation / leave use was improved by hiring supplemental personnel and establishing planned vacations.

Relevant SDGs:3, 5, 8

Current awareness of issues and basic strategies Indicators for Evaluation FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Promote fair employment and treatment Female employees in management positions (%) Sumitomo Forestry 2.8 3.2 3.7Independent assurance At least 3.8 At least 5.0
Consolidated in Japan 5.0 4.6 6.0 Target set by each company - -
Female employees including contract employees (%) Sumitomo Forestry 20.0 20.4 21.0Independent assurance At least 20 At least 20
Consolidated in Japan 25.4 31.6 32.0 Target set by each company - -
Ratio of Disabled Employees (%)*1 Sumitomo Forestry 2.12 2.14 2.32 At least 2.2 At least 2.2
Consolidated in Japan 1.45 1.75 1.76 Target set by each company -
Promote work-life balance Paid leave usage Sumitomo Forestry (days) 6.9 9 10.1 At least 10 At least 10
Consolidated in Japan (%) 40 43.9 50.5 Target set by each company - 50
Overtime working hours (Reduction from the average overtime working hours in FY2013) (% reduction) Sumitomo Forestry -7.5 -20.7 -24.9 -25.2 -30
Strengthen occupational health and safety Number of occupational injuries in Company-owned forests (incidents)*2 Sumitomo Forestry 3 1 3 0 Zero
Number of occupational injuries at new construction sites (incidents)*3 Sumitomo Forestry 12 9 7Independent assurance 0 Zero
Number of occupational injuries in other places (incidents)*3 Consolidated in Japan 8 2 10 Target set by each company - Zero

*1 Data as of June 2018

*2 Number of occupational injuries involving contractors at work sites in Company-owned forests

*3 Number of cases covered by temporary absence with work compensation benefits under the Industrial Accident Compensation Insurance Act

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

Material Issue 4: Strengthen and promote risk management and compliance mechanisms

Regarding the 45 prioritized risk items, quarterly meetings were held by the Risk Management Committee to check on the state of progress as we worked to strengthen our risk management system.

Current awareness of issues and basic strategies FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Strengthen risk management framework Reviewed target items and shared case reports on emerging risks at the monthly Board of Executive Officers meetings. Reviewed target items and shared case reports on emerging risks at the monthly Board of Executive Officers meetings. Items shown at right were implemented. Manage risks by using prioritized risk items set by the Risk Management Committee. Manage risks by using prioritized risk items set by the Risk Management Committee.

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

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

Among new custom-built detached houses, the implementation ratios of design performance evaluations, of construction performance evaluations, and of Excellent Long-term Housing certification were all at nearly 100%. We achieved our changed target for fiscal 2020 earlier than planned for the implementation ratio of design performance evaluations.

At the same time, the rate at which new custom-built detached houses were completed and handed over earlier than planned fell by 4% compared to the previous year.

Relevant SDGs:3, 11, 12

Current awareness of issues and basic strategies Indicators for Evaluation FY2016 result FY2017 result FY2018 result FY2018 target FY2018 value FY2020 target
Improve safety and quality Ratio of design performance evaluations implemented for new custom-built detached housing (%) 98.8 98.9 99.0 99.0 99.0
Ratio of construction performance evaluations implemented for new custom-built detached housing (%) 97.8 97.9 98.4 99.0 99.0
Ratio of houses certified as Excellent Long-term Housing for new custom-built detached housing (%) 93.3 93.3 93.8 97.0 97.0
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)
100 100 100 100 100
Ratio of early completion of handing the as-built drawing for new custom-built detached housing (%) 77.0 83.0 79.0 85.0 90

* Rating
〇: Achieved △: Not achieved but improved from previous year ✕:Not achieved and declined compared to previous year

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