Over the years, the Komatsu Group has made proactive ESG efforts, namely environmental, social and corporate governance. We believe the importance of ESG efforts will steadily become stronger into the future. In our new mid-range management plan, we will maintain focused efforts as we place emphasis on the environment, on society and on corporate governance.
The reduction of CO2 emissions is our important task for environmental conservation. Construction equipment in operation accounts for about 90% of the total amount of CO2 emissions produced throughout its lifecycle (chart on the right). We will help our customers reduce CO2 emissions from their machines by considering environmental performance and applying ICT to improve fuel consumption, when we develop new products.
We at the Komatsu Group have set our basic principle to make CSR efforts through core businesses. Based on this principle, we would like to engage in social contribution activities that make the best use of our strengths to fulfill our responsibilities to society.
As part of our CSR efforts, under the leadership of different Komatsu Group companies around the world, we engage in support activities to solve local problems.
For example, in Japan we provide support to Japan's agriculture business, which is facing serious problems of aging and no newcomers, by capitalizing on our manufacturing expertise.
We will continue to pay close attention to the needs of local communities around the world in order to deeply anchor the social contribution activities of Komatsu Group companies.
Komatsu maintains the basic management policy of commitment to Quality and Reliability to maximize its corporate value. Komatsu believes that its corporate value is the total sum of trust given to it by society and all its stakeholders.
To increase the total sum of trust, Komatsu needs to not only improve business results but also enhance the soundness and transparency of management.
We, at Komatsu, believe our corporate value is the total sum of trust given to us by society and all stakeholders. To become a company which enjoys even more trust from shareholders and all other stakeholders, we are working to strengthen corporate governance, improve management efficiency, advocate corporate ethics and ensure sound management on a group-wide basis.
In April 2016, we appointed top management officers of Komatsu Group's overseas subsidiaries to the posts of Global Officers in order to strengthen globally consolidated management. To further improve the transparency of management for our shareholders and investors, we disclose information in a fair and timely manner and actively engage in investor relations' activities by holding meetings with shareholders and investors.
As the importance of corporate social responsibility is growing today, it is indispensable for all companies to respond to social trust by ensuring that each and every employee not only fully understands corporate responsibility but also complies with the Rule of the Business Community, not limited to laws and regulations in a narrow sense.
In addition, the Komatsu Group is strongly conscious of its slogan of SLQDC, i.e., Safety and Law take priority over Quality, Delivery and Cost, as it works to ensure compliance.
The Komatsu Group recognizes all uncertainties that could threaten the Group's sustained growth as risks, particularly compliance issues, environmental issues, product quality concerns, accidents, information security problems, and antisocial forces. The company has adopted the following measures to counter these risks.
In addition to the basic policy for risk management to ensure business continuity and stable development, Komatsu has established Risk Management Rules to correctly recognize and manage risks.
Komatsu has established a Risk Management Committee to devise relevant policies for the entire Group, review the risk management system, and evaluate and improve upon response measures in place for each risk, as well as to take control of risks when they arise. The Committee regularly reports on its deliberations and activities to the Board of Directors.
Komatsu will establish an emergency headquarters when serious risks occur and implement appropriate measures to minimize damage.
Our compliance risk audits cover not only Komatsu Ltd. in Japan but also Komatsu Group companies around the world, and sales and service distributors as well as suppliers with strong business relationship in Japan. Since FY2008, we have internally audited to confirm and evaluate compliance conditions and identify potential risks. The scope of audits extends to 1) safety, 2) environmental affairs, 3) labor conditions, 4) accounting, 5) quality assurance and recalls, 6) vehicle inspection and specified voluntary inspection, 7) export control, 8) information security and 9) antimonopoly law.
In addition to indentifying potential risks, compliance risk audits are also designed to further enhance the level of management and awareness for compliance at respective divisions and companies. We believe repeated audits are useful to prevent risk problems from occurring.