025 gloria blue nega

Theme 3 : Growing with Society

Our Suppot for Midori-kai member companies(Environment)

Environmental Impact of Suppliers

Our Suppot for Midori-kai member companies(Environment)

1. Green Procurement Guidelines

Komatsu established the Komatsu Earth Environment Charter in 1992 and declared that they would engage in environmentally conscious business activities to realize a sustainable society. However, social demand for the reduction of environmental burdens and responses to climate change is increasing. Considering this background, Komatsu has established and released the Green Procurement Guidelines, which supplement the environment-related issues described in the CSR Procurement Guidelines. By using these guidelines, we preferentially promote green procurement, which is conscious about the environment, and of the raw materials and procured components/parts, which are important elements in our production. It also prompts business partners to develop their own environmental management activities.

 

komatsu csr, env, Procurement Division

2. Support for Those Obtaining Environmental Management Certifications

We have requested all member companies of the Midori-kai in Japan and China to obtain certifications for environmental management systems (EMS), such as ISO14001 and Eco-Stage, and provided them with instructions and support for obtaining the certifications. In Japan, all 156 member companies have obtained the certifications, and we began to check the renewal status of the certifications in 2018. In China, 57 out of the 59 applicable companies have already obtained the certifications, and we expect that all the companies will obtain them by the end of FY2020. We are promoting the suppliers in U.S., Europe, and Asia that are among our 352 level-3 critical suppliers to obtain similar certifications, aiming to reach an 86% certification rate by the end of FY2022 (all the companies that perform manufacturing, excluding trade companies, are targeted).

Over ten years have already passed since the Midori-kai members in Japan obtained the certifications. Like in the case of the safety and health activities, it is important to follow-up the status of the certifications in each company's business activities. To realize this, we will start environmental audits, which we have conducted internally, mainly for the outsourcing companies of the Midori-kai from 2020. Through written surveys on compliance with environment-related laws and regulations, etc. and on-site inspections at each company's offices, we will inspect how EMS has taken root on site and link the results to our support for their improvement in the future.

Environmental audits

Number of Midori-kai Member Companies with EMS Certifications (as of the end of April 2020)

Region Number of member companies Number of companies which have obtained certification Percentage of companies with certification
FY2017 FY2018 FY2019 Progress Target
Japan

156

156

156 156

100%

100%
China

59

53

55 57

97%

North America

44

19

19 19

43%

86%
Europe

39

29

29 32

82%

komatsu csr, env, Procurement Division

3. Responding to Climate Change: Greenhouse Gas Reduction in the Supply Chain

In 2012, we began activities to reduce the power consumption of 96 Midori-kai members in Japan by setting a target reduction in electricity consumption of at least 15% compared to 2010. This target was achieved in FY2016, with an average reduction of 20%. As a result of the expansion of these activities thoroughly across all our suppliers, some suppliers have won the ECCJ Energy Conservation Grand Prize Award. Since 2017, we have worked to maintain the reduction level through independent improvements at each company. In the second half of FY2019, we set a target of reducing greenhouse gas emissions from all kinds of energy, including heavy oil, gas and electric power, by 15% (by the end of FY2024, compared to 2010). As a first step, we conducted a fact-finding survey of ten casting and forging companies and heat treatment companies, which emit large amounts of greenhouse gases, and began to provide them with information about the improvements that we had actually made. While providing concrete support to help these 10 companies to improve, we will also request that the 201 suppliers that fall under our Critical Suppliers-Level 2 set self-reduction targets in sequence and take tangible measures to reach those goals.

Independent Practitioner's Assuranceチェック

Changes in electric power consumption(Midori-kai 93 companies)

Changes in electric power consumption(Midori-kai 93 companies)
Corrected index of manufacturing index is not covered by independent practitioner's assurance.

Change in CO2 emissions(Midori-kai 93 companies)

Change in CO<sub>2</sub> emissions(Midori-kai 93 companies)
Corrected index of manufacturing index is not covered by independent practitioner's assurance.

Results of activities in Japan for reducing power consumption from 2012 to 2016 (reduction of electric power consumption rate calculated against the 2010 base unit)

Results of activities in Japan for reducing power consumption from 2012 to 2016 (reduction of electric power consumption rate calculated against the 2010 base unit)
komatsu csr, env, Procurement Division

4. Addressing Water Risks

We are inspecting 135 offices of 96 Midori-kai members in Japan to understand their general water risks, including the above-mentioned heavy rain and tsunami risks, locations, potential and actual water intake/discharge capacities, water quality, and how they address these issues. We also use Aqueduct in these analyses.
In response to these investigations, we have been conducting activities to reduce water consumption since FY2017. Establishing the companies that are the top ten users of large amounts of clean water as model companies, we are performing these activities by introducing Komatsu improvement examples and the providing guidance on improvement through on-site visits while setting a water reduction target of 15% by FY2021.

On-site investigation of water risks

Changes in clean water usage by the top 10 Midori-kai companies

komatsu csr, env, Procurement Division

5. Responding to Environmental Regulations in China

An example of measures to meet regulations in China (Daikyo Machinery Shandong Co., Ltd.: Installation of a welding fume dust collector and exhaust air ducts)

The basic goal of the environmental regulations in China is the elimination of three things: exhaust gases, discharged water, and solid waste. However, when operating under those regulations, the regulations and standards set forth by each local government have priority. Regarding discharged water from plants, to address the aggravated water pollution in rivers and lakes, the standards for BOD/COD (Biochemical Oxygen Demand/Chemical Oxygen Demand), which are indexes of amounts of organic substances in discharged water, are especially strict when compared to the country-wide standards in Japan, and there is an increasing number of cases where centralized water treatment systems for discharged water, etc. need to be installed.
Komatsu checks the regulatory compliance status of the Midori-kai members in China on a regular basis.

In addition, in China, extremely tough environmental regulations were imposed in 2015, mainly in the coastal areas, aiming to improve air pollution issues (PM2.5) drastically. As a result, companies engaging in businesses such as painting, welding, casting and plating are required to take thorough measures to reduce exhaust air, smoke and soot (including VOCs). Working together with member companies of the Midori-kai in China, we provide support for complying with the regulations, including the installation of facilities. As a result of measures taken by the companies, 14 companies had been certified as exempt from the regulations (as green companies) as of March 31, 2019. We will continue to work with each company to reduce risks to our business continuity.
 

komatsu csr, env, Procurement Division

えー24_Our Suppot for Midori-kai member companies(Environment)_Biodiversity

6. Dealing with Biodiversity

Cherry tree planting activity in China (Jining, Shandong Province)

In 2011, Komatsu established “the Declaration of Biodiversity by Komatsu”, a declaration that we will work for the reduction of environmental impact through our business activities and for the conservation of biodiversity through our social contribution activities. Receiving support for our policies from Midori-kai members in Japan and other countries, we are conducting community contribution activities in cooperation with them, such as environmental conservation.

Support for construction and environmental conservation of the Yusen-ji copper mine in Komatsu, Ishikawa prefecture

Progress of Construction at the Yusenji Copper Mine Site
komatsu csr, env, Procurement Division

えー24-2_Support Activities for Member Companies of the Komatsu Midori-kai in FY2019

The following explains our major support activities for the Midori-kai member companies in FY2019.
Field Content Result in 2019
Safety Safety patrols 101 companies in Japan and 35 companies in China
Subcommittee members’ mutual safety patrols 60 companies in Japan and 35 companies in China
Risk assessment training Total of 15 times for 12 companies
Participation in Komatsu safety and health meetings 101 companies
Reporting of safety activities at Komatsu safety and health meetings 5 companies in Japan and 1 company in China
Environment Environmental surveys (status of compliance with laws and regulations, and on-site checks) 4 companies
CO2 reduction workshops 10 companies
Activities for reducing water consumption 10 companies
Education Participation in middle management training 2 participants from 2 companies
Participation in Midori-kai managerial training 31 participants from 19 companies
Participation in Midori-kai leader training 68 participants from 34 companies
Participation in Midori-kai production engineer training 29 participants from 25 companies
People enrolled in the Komatsu Technical Institute 3 people from 3 companies
Participation in instructor training 15 participants from 10 companies
Participation in all Komatsu QC competition 7 companies
Participation in all Komatsu skills competition (Advanced Technique Contest) 28 participants from 18 companies
Productivity improvement Number of K-MICS PAD units mounted on the machine tools of Midori-kai member companies Total: 945 units
Number of welding robots at Midori-kai member companies that are connected to KOM-MICS Total: 178 units in Japan and 98 units overseas
BCP BCP workshops (3 venues) 143 participants from 98 companies
Compliance Compliance and risk audits 8 companies
Support for the establishment of compliance systems 32 companies
Check of the residency statuses of foreign workers 1,782 people at 97 companies
Internal Awareness-Raising Initiatives Training for updating knowledge about the Subcontract Act (e-learning) 100 participants from the Procurement Division
618 participants from related divisions and companies
Others Participation in Midori-kai general meetings with management 351 participants from 155 companies in Japan
74 participants from 39 companies overseas
komatsu csr, env, Procurement Division