Sustainability

Sustainability Top

Risk Management

Basic approach

Our group recognizes that it is an important issue to understand risks that may affect business continuity and respond quickly and appropriately to minimize the impact of risks, and we are proceeding with initiatives. .

In order to achieve the goal of "sustainable growth" set by artience group (hereinafter referred to as "our group"), we must appropriately respond to the various risks surrounding our group, operate our organization stably, and operate our business. I believe that we must carry out our activities. By effectively controlling unforeseen damages and losses caused by risks that occur in various aspects of business activities at the lowest cost, stabilizing profits, and preventing losses that may be incurred by society, we can contribute to society's benefit. In order to earn the trust of our members, we have established a "Basic Policy on Risk Management" (hereinafter referred to as the "Basic Policy") and strive to appropriately implement risk management.

  1. Scope of application
    This basic policy applies to all companies and all organizations that make up our group. Furthermore, all officers, advisors, employees, contract employees, part-timers, temporary employees, and other persons engaged in the business of the Group (hereinafter referred to as "officials, employees, etc.") of the Group are required to comply with this basic policy.
  2. Compliance with laws and respecting international norms
    Our group believes that compliance with laws and regulations and respecting international norms is the basis of risk management, and we act in accordance with the laws and regulations of the countries or regions where our group operates, as well as the international code of conduct. . Furthermore, we will firmly uphold the ideas and spirit enshrined in our group's code of ethical conduct and internal regulations and policies. However, if some parts of this basic policy cannot be applied due to local laws, etc., we will comply with local laws, etc. while pursuing methods that maximize respect for international codes of conduct.
  3. Building and operating a risk management system
    The Group has established a group risk management system in which the highest decision-making body is Group Management Committee which is a group discussion and decision-making body similar to Board of Directors, and promotes risk management activities for company-wide risks. On the other hand, in order to deal with the risks hidden in the daily lives of individual departments and organizations, each department and organization operates a system for the purpose of preventing risks and mitigating damage when risks occur, while sharing risk information company-wide. I will try my best.
  4. Normal response and emergency response
    The Group recognizes that normal activities to prevent risks are important in risk management, and strives to prevent risks by incorporating appropriate crisis elimination functions into the risk management system. At the same time, we plan and formulate countermeasures in advance for emergencies such as risks arising, and prepare to smoothly respond to emergencies through education and training.
  5. Risk analysis and evaluation
    Our group analyzes and evaluates known risks, and strives to understand the types of risks, the degree and breakdown of their impact on business activities, and the costs required to prevent them. Furthermore, regarding new risks arising from changes in the social environment, we will increase our risk sensitivity through education and awareness-raising activities, identify company-wide risks that need to be addressed as a group, and share them with the entire group.
  6. Implementation of education and training
    The Group will provide appropriate education and training to ensure that all officers and employees are fully aware of risk management, and that they comply with this basic policy and related rules and regulations. We will strive to maintain and improve our ideas and ways of thinking.
  7. Revision, abolition and management
    The amendment or abolition of this basic policy will be decided by Board of Directors of artience Co., Ltd.
    In addition, the department in charge of amending or abolishing this basic policy will be the department that oversees artience Co., Ltd. 's risk management activities.

Established on November 1, 2004
Revised on January 1, 2024 (Resolved at Board of Directors on December 8, 2023)

Based on our Group Corporate Philosophy Philosophy, Brand Promise, and Our Principles, we aim to contribute to the realization of a sustainable society through our business, and to In order to achieve sustainable growth, we will conduct our business activities in accordance with the Sustainability Charter and related policies, as well as the Code of Ethics and Conduct.
Our company considers the establishment of systems necessary to ensure the appropriateness of business operations (hereinafter referred to as "internal control systems") as a process necessary for sound business continuity and the formation of social trust, and that Recognizing that this system should be actively utilized to achieve our goals, we have established the following internal control system and amended it in response to changes in the business environment. We will conduct management that suits our interests.

  1. Director System to ensure that the execution of duties by officers and employees complies with laws, regulations, and the Articles of Incorporation
    The Company shall establish a Group Philosophy System that describes the ideal image that the Group should aspire to and the basic ideas and actions required of the Group's officers and employees, and a Code of Ethical Conduct that describes the rules to be observed by all officers and employees as members of the Group, and shall make these known to all officers and employees in an effort to spread awareness of the Group's corporate ethics and compliance. We will strive to spread awareness of the Group's corporate ethics and compliance.
    In addition, as a good corporate citizen, the Company aims to be a corporate group trusted by society based on its Sustainability Charter, which clearly defines its stance on corporate social responsibility and its contribution to improving the sustainability of society.
    The Company has established Sustainability Committee, which is responsible for promoting the Group's company-wide sustainability activities under the supervision of the representative Director. Sustainability Committee The Company has established Risk Management Committee, Compliance Committee and ESG Promotion Subcommittee as specialized subcommittees under Compliance Committee In addition, through Compliance Office (Internal / External Hotline), the Company will enhance the system for early detection and correction of violations of laws and regulations and the Code of Ethical Conduct.
    Board of Directors The President Director confirms the legality of the execution of the duties of and makes decisions on important matters affecting the Company and Group Companies as a whole in accordance with laws, regulations, and the Articles of Incorporation. The representative Director shall represent the Company in the execution of its duties in accordance with the resolution of Board of Directors.
    Audit and Supervisory Committee The Director (hereinafter referred to as the "Representative Independent Outside Director"), the majority of which shall consist of , shall conduct legality and appropriateness audits of the execution of the duties of and report the results obtained through audit activities to Board of Directors from time to time. In addition, Director shall report to Audit and Supervisory Committee the status of the execution of duties upon request from the audit committee members selected by Audit and Supervisory Committee (hereinafter referred to as "selected audit committee members").
    The Group Audit Office, the internal audit department, reports directly to the Representative Director and audits whether the Company's operations are in compliance with laws and regulations and the Articles of Incorporation and whether the internal control system is functioning effectively, and reports the audit results to the Representative Director and Director in charge of internal control, as well as to Audit and Supervisory Committee, in coordination with Audit and Supervisory Committee.
  2. System for storing and managing information related to the execution of duties by Director
    The Company will appropriately store and manage information related to the execution of duties by Director in accordance with laws and regulations, the Articles of Incorporation, Board of Directors regulations, and the Information Security Management Regulations.
    Additionally, Director can view this information when necessary.
  3. Regulations and other systems for managing the risk of loss
    In accordance with our risk management regulations that comply with our Code of Ethics and Conduct, we use a system under the control of the executive officer in charge of risk management to identify company-wide risks related to the entire Group through Risk Management Committee, and strive to maintain sound business continuity and maintain social trust. We will promote a risk management system that takes risk countermeasures for the formation of
    As a means of educating people about risk management, we incorporate Risk Management Committee issues into annual plans for each company and department, and implement management methods that include them as one of the evaluation criteria. Focus on activities during normal times that prevent risks by planning and responding.
    In order to respond to emergencies, we have established an emergency communication system in which each site that recognizes the occurrence of a risk immediately reports it to the Company's representative Director, and in the event that the materialized risk has a significant impact on management, we will establish an emergency response headquarters, etc. We will develop a business continuity system that can quickly respond to emergencies.
  4. System to ensure that Director' duties are executed efficiently
    In order to ensure that Director execute their duties efficiently, the Company holds regular Board of Directors once a month, as well as extraordinary meetings as necessary. We will speed up and operate our business efficiently.
    In addition, as a discussion and decision-making body regarding the Group's management issues and business strategies, we hold regular monthly meetings consisting of executive Director and Operating Officers to share Group management issues and strategies, and Strive to achieve goals efficiently. In addition, selected Audit and Supervisory Committee members attend these meetings and provide opinions necessary for auditing, thereby strengthening the supervisory function over the performance of Director' duties.
    In order to improve the flexibility of business execution, the board Board of Directors directors will be able to delegate some important business execution decisions to Director who execute business based on laws and regulations, the articles of incorporation, and Board of Directors regulations.
  5. System to ensure the appropriateness of operations within the corporate group consisting of the Company and its subsidiaries
    Our company shares the group philosophy system as a group, makes maximum use of the management resources within the group, and strives to maximize the corporate value of the entire group.
    In order to promote proper group management, we have established affiliated company management regulations, and while respecting the autonomy of each group company, each group company is required to report to the Company regarding the execution of important matters in accordance with the regulations. Regarding execution matters that may have a significant impact on the performance of the Group, the Company will ensure the appropriate operation of group management with its involvement, such as requiring a resolution by the Company's Board of Directors.
    In addition to applying the risk management system and emergency response described in ③ above to each group company, we also regularly hold a legal subcommittee meeting at our company for directors selected from among Director of each group company, and discuss legal risks related to group management. We will strive to share this information and optimize group management. In addition, each group company regularly holds meetings consisting of Director and others to strive to efficiently achieve management and business goals, and regularly reports to the Company.
    The corporate auditors of each group company will conduct legality and appropriateness audits of the execution of duties by Director of each company, and report the results to each company's Board of Directors and the Company's Audit and Supervisory Committee as appropriate.
    Additionally, the scope of audits by the Group Audit Office in ① above shall include each group company.
    In addition, as a system to ensure the reliability of financial reporting, under an organizational structure under the direct control of our representative Director, we conduct evaluations of internal controls related to financial reporting published by the Business Accounting Council, in consultation with the accounting Accounting Auditors as appropriate. We will ensure the development and operation of an effective internal control system in accordance with the basic internal control framework set out in auditing standards and implementation standards. In addition, in addition to establishing a system to collect and share information from each group company, we will also ensure that operations are carried out appropriately at locations that are not considered important business locations based on sales standards, etc., taking into account risks specific to the location. Conduct education and internal audits as appropriate.
  6. Matters regarding employees when Audit and Supervisory Committee requests the appointment of employees to assist in its duties.
    If Audit and Supervisory Committee requests an employee to assist in its duties, the Company will appoint an employee to assist in the duties of Audit and Supervisory Committee after consultation with Audit and Supervisory Committee. In addition, in order to strengthen the system for carrying out audit practices through collaboration between Audit and Supervisory Committee and the Group Audit Office, which is the internal audit department, an information liaison meeting has been established between Audit and Supervisory Committee and the Group Audit Office, and an internal Strengthen the audit function of Audit and Supervisory Committee by enhancing the audit function.
  7. Directors of employees who assist the duties of the Audit and Supervisory Committee (Directors who are members of the Audit and Supervisory Committee) Except. Matters related to independence from the Company and matters related to ensuring the effectiveness of instructions to the employee
    In the event that an employee is assigned to assist the duties of the Audit and Supervisory Committee in (6) above, the Company shall appoint or transfer such employee Conducted with the consent of the Audit and Supervisory Committee, and the command and evaluation of the employee concerned shall beThe Audit and Supervisory Committee shall conduct the meeting.
  8. System for Director and employees to report to Audit and Supervisory Committee and for Director, auditors, employees of our Group Companies, or persons who receive reports from these people to report to our Audit and Supervisory Committee system, other systems for reporting to Audit and Supervisory Committee and systems to ensure that those who report are not treated disadvantageously.
    Director and Operating Officers of the Company shall report on the status of execution of their respective duties at important meetings attended by Board of Directors of Directors.
    Director, auditors, Operating Officers, and employees of the Company and each group company shall promptly report the following facts to Audit and Supervisory Committee in accordance with risk management regulations, etc.
    • Important facts about compliance
    • Facts that cause or are likely to cause significant damage to the company
    • Other matters determined as reportable matters after consultation with Audit and Supervisory Committee
    In addition, the maximum consideration shall be given to protection and confidentiality in accordance with the Compliance Office operational rules for those who have reported.
    The Appointed Audit & Supervisory Board Members shall request Director of the Company and each Group company to report the aforementioned facts to Audit and Supervisory Committee, attend various important meetings necessary for auditing, and inspect information that has a significant impact on business operations, such as approval documents.
    In addition, Director and Operating Officers and employees of the Company and each Group company shall report on the status of the Company's operations and assets upon the request of the selected Audit Committee members.
  9. Matters concerning procedures for prepayment or reimbursement of expenses incurred in connection with the performance of duties by Audit Committee members (limited to those related to the performance of Audit and Supervisory Committee duties) Matters concerning procedures for advance payment or reimbursement of expenses incurred in connection with the performance of duties by Audit and Supervisory Board Members (limited to those related to the execution of duties by Audit and Supervisory Board Members ()) and other policies concerning the treatment of expenses or liabilities incurred in the performance of their duties
    If any Audit Committee member requests expenses incurred in the ordinary course of auditing, the Company shall promptly dispose of such expenses. In addition to ordinary audit expenses, the Audit Committee members shall give prior notice to the director in charge in the event of emergency audit expenses or new research expenses using specialists.
  10. Other systems to ensure that audits by Audit and Supervisory Committee are conducted effectively
    The Company's Audit and Supervisory Committee, representative Director, and Director regularly exchange opinions on management issues and other important issues related to business operations, and the Company strives to create an environment in which Audit and Supervisory Committee can conduct effective audits. I will try.
    In addition, Audit and Supervisory Committee receives reports on planned internal audits conducted by the Group Audit Office, which is the internal audit department, and regularly exchanges opinions with the corporate auditors and Audit and Supervisory Committee Accounting Auditors of each group company. ensure that audits are conducted efficiently and effectively;
  11. System for eliminating anti-social forces
    In our Code of Ethics and Anti-Social Forces Regulations, we take a resolute stance against anti-social forces that threaten the order and safety of citizens' lives, and we will never respond to unreasonable or illegal demands. We have stipulated that we will not respond to such requests, and we will not have any relationships with them, including business relationships. In addition, we will collect and manage information regarding anti-social forces in cooperation with external specialized organizations.

Established on May 15, 2006 (Resolved at Board of Directors on May 15, 2006)
Revised on January 1, 2024 (Resolved at Board of Directors on December 8, 2023)

  • (Emergency response) Develop response plans and systems in the event of an emergency situation that may affect the entire group.
  • (Prevention of risk manifestation, loss reduction/relocation measures) Identify and extract existing risks that may affect the entire group, and confirm and disseminate countermeasures.
  • (Awareness activities) Promote improved ability to perceive new risks.

Risk management system

Under the direction of the executive officer in charge of risk management (Risk Management Committee), Risk Management Committee, with General Affairs Department as its secretariat, manages risks for the entire group in a comprehensive and comprehensive manner. In addition, each company and department within the Group identifies, evaluates and considers risks hidden in changes in the social environment and daily operations, and implements countermeasures.
Risk Management Committee creates and shares risk maps that evaluate the risks of each company and department based on frequency and severity. Regarding major risks, subcommittees check the progress and degree of achievement of risk reduction activities, and company-wide risks that need to be addressed as a group are reported to Group Management Committee and Board of Directors. If a new problem that could pose a serious risk arises, we will report it to Board of Directors and set up a task force to take action.

Risk management system (FY2023)
Risk management system (FY2023)

Internal control

The Group recognizes that developing and operating an internal control system is an important management issue, and Board of Directors has resolved on the "Basic Policy for Internal Control Systems" to ensure the appropriateness of business operations. We are working to improve our business execution system and audit system.

Main activities in 2022

In fiscal 2022, we will review the functions of Risk Management Committee and rebuild the risk management system, as well as (1) analyze and share anticipated issues in accidents, disasters, and quality assurance, and (2) implement disaster countermeasures in the event of an earthquake directly beneath the Tokyo metropolitan area. We reconfirmed the manual and BCP system, and (3) considered and shared information on new issues such as raw material price fluctuations and cyber attack countermeasures.
Educational and awareness-raising activities include (1) safe driving seminars for sales employees at all domestic bases, and (2) safety education on chemical injuries and low-frequency work using e-learning at production bases, including temporary and part-time employees. The seminar was held twice (approximately 2,000 people attended each session).

Risks and responses of representative businesses, etc.

Typical risks that we recognize as having the potential to have a significant impact on our group's financial condition, operating results, and cash flow status are listed below, but are not limited to these. Furthermore, in fiscal 2022, there were no new risks that would have a significant negative impact on the Group.

Risk items Typical risks Examples of responses to risks
① Potential risks of overseas activities ・Changes in laws, regulations, and tax systems that may have an adverse impact
- Negative impact on corporate activities due to underdeveloped social common capital
- Occurrence of unfavorable political factors
・Social chaos caused by terrorism, war, infectious diseases, etc.
・Unpredictable rapid changes in the working environment
- Promote business development in countries around the world and improve the balance of business fields in order to create an earnings structure that is less susceptible to economic trends and other risks in each country.
・Building a supply chain management that can respond flexibly to risks ・Reducing variable costs such as fixed costs and raw material costs
② Information leakage, loss, or damage
risks related to
- Information leakage, loss, or damage due to cyber attacks or security breaches such as computer viruses
- Loss of social trust due to information leakage, loss or damage, violation of non-disclosure agreements, and decline in competitiveness due to leakage or loss of know-how.
- Strengthen the information security management system and reduce risks through employee education and awareness activities by a dedicated information security department
・ Implementation of security measures and formulation and implementation of operational rules related to the promotion of telework
③ Quality and product liability
related risks
・ Occurrence of accidents or complaints due to product quality - Thoroughly comply with legal regulations related to quality and safety, and implement activities to strengthen quality assurance.
- Enhance and strengthen quality assurance throughout the group using international quality standards such as ISO 9001
④Risks related to natural disasters, epidemics, etc. ・Difficulty in procuring raw materials, disruption to production activities, stagnation in global consumption activities, and supply chain logistics functions due to natural disasters such as large-scale earthquakes and heavy rains, and pandemics of infectious diseases both domestically and internationally. Inability to supply due to stagnation, etc. ・Development of various manuals according to risks and implementation of regular training
・Implementation of infection prevention measures against infectious diseases such as the new coronavirus, development of guidelines and operational systems, and implementation of workplace vaccinations for the new coronavirus.
・Development of a disaster countermeasure system using BCM (Business Continuity Management) and establishment of a domestic and overseas production complement system
⑤Risks related to raw material procurement - Rising raw material prices and inventory shortages due to market fluctuations, natural disasters, accidents, government policies, etc.
・Suspension of raw material supply from suppliers
・Incurrence of compensation for damages due to failure to supply to business partners
・Procure raw materials at appropriate prices by improving the accuracy of market price forecasts and demand forecasts
・Securing inventory according to the characteristics of raw materials through a wide range of suppliers
・Promotion of procurement based on basic procurement policy
⑥Risks related to exchange rate fluctuations ・Rapid exchange rate fluctuations ・Reducing foreign exchange rate fluctuation risks through foreign exchange contracts and balancing foreign currency-denominated receivables and debts
⑦Risks related to general legal regulations ・Changes in domestic and international laws and regulations and associated market changes
・Litigation disputes that have a significant impact on the Group's business, including environmental issues, product liability, and patent infringement
・Collecting information on domestic and international laws and regulations and implementing responses
・Review of compliance-related policies and implementation of countermeasures by Compliance Committee
・Improve group-wide management and effectiveness through internal control systems
⑧Risk of environmental impact ・Changes in domestic and international environmental laws and regulations and associated market changes
・Increase in costs due to delays in responding to environmental load reduction
・Additional investment and changes in business format in response to social environmental demands (elimination of plastics, carbon neutrality, etc.)
・Environmental response (CO 2 reduction of emissions, elimination of VOC (volatile organic compounds) from products, material recycling, etc.)
・Strengthening and systematizing the management of chemical substances
⑨Risks related to climate change ・Changes in domestic and international climate change regulations and associated market changes
・CO 2 Increased costs due to delays in responding to social demands such as emissions reductions
・Disclosure of information based on TCFD (Task Force on Climate-related Financial Disclosures) recommendations
・Continuous efforts to reduce the environmental impact of manufacturing (CO 2 (reducing emissions and promoting carbon neutrality)
⑩Risks related to general debt collection ・Difficulty in collecting trade receivables due to deterioration in customer business conditions ・Regular review of customer credit risk
・Implement credit protection measures and strengthen credit management
⑪Risks related to impairment of fixed assets ・Impairment of fixed assets due to changes in economic conditions, etc. ・Review of criteria for examining the validity of investment plans
・Consideration of measures to avoid and reduce risks

*Details of “Business Risks” are listed in the securities report.

information security

BCM (Business Continuity Management)

The Group targets risks that may hinder business continuity, such as natural disasters such as earthquakes, typhoons, and floods, pandemics such as infectious diseases, explosions, fires, and leaks at factories, and cyber attacks, which may hinder business continuity. , we are working on risk countermeasures. We also believe it is important to build a recovery and product supply system in case of an accident at a chemical company, including our own, and are moving forward with the development of BCM.

BCM (Business Continuity Management)

  • Establishing an emergency system
  • Strengthening equipment earthquake resistance
  • Response to weather disasters
  • Stable procurement of raw materials
  • Establishment of production supplementary system
  • Expansion to overseas bases