Shin-Etsu Chemical Co., Ltd.

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Message from Management

The Shin-Etsu Group (the Group) achieved its highest profit ever and recorded its eighth consecutive year of increased profit in the fiscal year ended March 2018 (FY2017).
At the same time, we were able to strongly move forward towards realizing our targets of making "Contributions to the Earth's Future."
In this message for our CSR Report 2018, I would like to introduce our management objectives and the CSR activities that we are carrying out to accomplish these objectives.

Yasuhiko Saitoh, President

President
Yasuhiko Saitoh
Yasuhiko Saitoh

> Chairman's Message
Chihiro Kanagawa

Realizing Business Principle

The Group's Business Principle is to "contribute to people's living, society and industry through value creation in materials and technologies, while observing all laws and regulations as well as conducting fair corporate activities." With these Business Principle as a foundation, each and every one of the people working in our group is conscientiously carrying out their daily work with the objectives "to supply key materials that meet society's needs" and "to contribute to the solution of the various issues that the Earth on which we are living is facing." Having these two objectives propelling us forward, our company is working to enduringly develop. In order to work to realize these objectives, in FY2017, we carried out the following activities.

Strengthening ESG Activities

In recent years, an increasing amount of attention is being given by investors to companies' ESG1 activities. In August 2017, we reorganized former CSR Promotion Committee and formed an ESG Promotion Committee to further promote company-wide ESG activities in all aspects of our corporate activities. This committee is now chaired by myself, as the president of Shin-Etsu Chemical, and is comprised of 40 persons, including the members of Shin-Etsu Chemical's Board of Directors, the people in charge of relevant divisions and departments and the people in charge of CSR at a Group company, and it also has a secretariat. In this way, we are moving ahead with the strengthening of our Group's ESG activities.

Contributing to Achieving UN Sustainable Development Goals (SDGs)

Since 2010 the Group has been a participant in the United Nations Global Compact (UNGC) and has been voluntarily supporting and practicing in our business operations and strategies the UNGC's Ten Principles with regard to the four fields of human rights, labor standards, the environment and the prevention of corruption. Furthermore, we are also concentrating our efforts on achieving the United Nation's SDGs. In the process of considering the making of investments in our existing businesses as well as the development of new products and new businesses, we always assess their compatibility and suitability with regard to SDGs. Upon clearly explaining their congruence with SDGs, proposals of investment ideas are then submitted for consideration at our Board of Directors Meeting. In this connection, more than 90% of the investment proposals made during FY 2017 were those contributing to SDGs.

At this point, I would like to briefly introduce just some of our company's products that are contributing towards the achieving of SDGs. PVC based resin window frames, silicones that are used in such areas as automobiles, construction and solar panels, and rare earth magnets that are used in motors and generators in such areas as hybrid cars, electric vehicles and wind-power generators are contributing to the achievement of Goal 13 to "take urgent action to combat climate change and its impacts." Activities such as recycling of water, recycling of rare earths in the manufacturing process and waste reduction are contributing to Goal 12 to "ensure sustainable consumption and production patterns." In this manner, our contributions to SDGs lead to the making of "Contributions to Earth's Future" that our Group's is pursuing, and at the same time, it also leads to our company's business expansion and growth and the development of new products.

Tokyo Principles for Strengthening Anti-Corruption Practices

As I explained earlier, right at the start of the statement of our Business Principle it emphasizes that we observe all laws and regulations as well as conducting fair corporate activities. In February 2018, we were the first company to agree to sign onto the Tokyo Principles for Strengthening Anti-Corruption Practices pursuant to that established by the Global Compact Network Japan2. Assenting to these Tokyo Principles also contributes to the achievement of Goal 16: to "promote just, peaceful, and inclusive societies." We have notified all of the Group's companies of the decision we made to sign the Tokyo Principles, and we are endeavoring to further raise awareness of the fundamental importance of corruption prevention in our corporate activities, as we go about carrying out our daily work.

Totally Committed to Responsible Care

The Group signed and put into practice the Responsible Care®3 Global Charter of the International Council of Chemical Associations (ICCA) in 2006, Furthermore, in 2014, we also signed the revised Responsible Care® Global Charter issued by the ICCA. In accordance with this Charter, we are continuously striving to further contribute to the role of chemicals in improving the quality of life as well as in sustainable development by working to make continuous improvements in and achieve the highest levels of excellence in occupational safety and health, process safety and prevention and environmental conservation. In FY 2017, a total of 21 Group offices, globally, carried out their business activities in compliance with the Charter through such means as carrying out audits of environmental and safety management.

As I stated above, I am introducing only some aspects of the Group's CSR activities that we are presently working on. These activities are explained in greater detail in each chapter of this CSR Report.

All of us working in the Group are aiming to continue to grow together with society through all of our corporate activities. Going forward, we will continue to strive towards new value creation that responds to the needs of society, and we will steadily fulfill our corporate social responsibilities, as we work towards making "Contributions to the Earth's Future." We sincerely ask for your continued understanding and support in the future as well.

June 2018
Yasuhiko Saitoh, President,

  • 1 ESG
    Environment, Social and Governance (ESG) refers to the three central CSR factors expounded on by investors and others that are used to evaluate a company's CSR endeavors.
  • 2 Global Compact Network Japan (GCNJ)
    Global Compact Network Japan (GCNJ) is the local Global Compact network branch that has been set up to actively work as a CSR platform in Japan in order to disseminate the United Nations Global Compact's mission and various key principles to management levels within companies and organizations through such means as CSR education and the activities of study groups with different themes as well as the holding of various symposiums. As of June 2018, more than 260 Japanese companies/groups are participating in GCNJ.
  • 3 Responsible Care®
    Activities whereby each company that handles chemical materials on a voluntary basis commits itself to improve health, safety and environmental performance in all the life-cycle processes from the development of chemical materials through manufacture, distribution, usage, final consumption and disposal up to recycling, and then making public the results of its activities and continuously engaging in dialogue with the local community and the public, while striving to maintain good communication with society.