Sustainability Issues and Goals

OMRON Sustainability

Sustainability Issues and Goals

Sustainability issues identified through decision process, FY2020 goals, and OMRON's initiatives

Sustainability Issues and Goals

In fiscal 2017, OMRON set key sustainable issues based on it sustainability policy, which are made up of two main areas. The first are social issues OMRON should solve through the focus business domains defined in its VG2.0 medium-term management plan. The second are issues that should be addressed by building a strong platform to carry our VG2.0 to meet the expectations of stakeholders. OMRON set fiscal 2020 goals and is working since fiscal 2017 to achieve the goals. By aligning visions and directions of sustainability initiatives with VG2.0, OMRON is working toward sustained enhancement of corporate value.

Issues to solve through business
Response to social needs Factory Automation: Respond to labor shortages and diversifying manufacturing practices Healthcare: Zero brain and cardiovascular diseases, respiratory diseases Social Solutions: Contribute to secure, safe, and pleasant lifestyles for people around the world
Issues to respond to stakeholder expectations
Human Resource Management Talent Attraction and Development Diversity and Inclusion Wellness Management Occupational Health and Safety Respect for Human Rights and Labor Practices	Manufacturing Product Safety and Quality Reduction of Greenhouse Gas Emissions Appropriate Management and Reduction of Hazardous Substances Supply Chain Management	Risk Management Fair Business Practices Privacy and Data Security

Factory Automation

Details: Solving social issues through our businesses Factory Automation

Social Issues	Shrinking labor force, as an issue in global manufacturing Shortage of skilled workforce on production floors and requirements of increasingly advanced & diversifying manufacturing processes
2020 Goals	Generate applications to embody the concept of innovative-Automation^*1 in our four focused industries, establish control technologies, and develop new products—Generate Control Technologies for Manufacturing Innovation—
2019 Progress	More than 170 applications embodying innovative-Automation Responded flexibly to changes in product models and setups, and generate new value through improved operating capacity, "Flexible Production Line" that contributes to manufacturing innovation, and "Cell-Line Control System", that fosters harmony between humans and machines
Achievement	[integrated] Developed 3D image sensing technology that incorporates the fastest robot hands in the industry https://www.omron.com/global/en/media/2019/11/c1111.html [intelligent] Launched efforts to expand solutions in collaboration with partners, including proof-of-concept tests using 5G, proof-of-concept tests for cloud-based IoT services, etc. https://www.omron.com/global/en/media/2019/09/c0910.html Partnership with Siemens related to i-BELT^*2 (data utilization service to improve manufacturing productivity and quality) and the Siemens "MindSphere" Iot platform Developed defect extraction AI that reproduces the sense of humans and the experience of skilled engineers https://www.omron.com/global/en/media/2019/11/c1113.html
Social Value	Contribute to economic development by improving social productivity

*1: innovative-Automation is the unique OMRON concept to bring innovations to production floors. This comprises three concepts: (1) Evolution in control (integrated); (2) Intelligence developed through ICT (intelligent); and (3) New harmonization between humans and machines (interactive).
*2: i-BELT is OMRON’s proprietary collaborative data utilization service that (1) collects and stores data, (2) provides data visualization and analysis, and (3) optimally controls equipment/machine.

[Applications and products embodying innovative-Automation]

integrated (Evolution in Control)
Intelligent (Intelligence developed through ICT)
interactive (New harmony between humans and machines)

Examples embodying innovative-Automation were showcased at "IIFE2019" held during November 27-29, 2019, Tokyo Big Sight

Healthcare

Details: Solving social issues through our businesses Healthcare

Social Issues	Increased incidence of brain and cardiovascular diseases attributable to high blood pressure Increased worldwide prevalence of asthma and other respiratory diseases
2020 Goals	Blood pressure monitor sales: 25 million units/year Development of analytical technologies to continuously track blood pressure fluctuations Nebulizers and wheeze detector sales: 7.65 million units/year
2019 Progress	Blood press monitor sales: 20.01 million units/year Completed clinical evaluation of wearable blood pressure monitor (relationship between hidden hypertension and underlying causes related to lifestyle activities; evaluation of accuracy during daily measurements) Nebulizer and wheeze detector sales: 3.44 million units/year
Case Studies	Launched the world’s first wearable blood pressure monitor offering constant measurements in Japan and Europe (Launched in 2018, USA) Launched blood pressure monitor with EKG in the U.S. OMRON Academy (educational program for doctors) held in 12 locations including India, Germany, Turkey, etc., conducted blood pressure monitoring sessions at stores in 10 cities Completed development of a low-cost nebulizer+ wheeze sensor, aiming for widespread adoption
Social Value	Contribute to healthy lives by extending healthy life expectancies and reducing medical expenses (initiatives to expand blood pressure monitoring at home and achieve vision of zero heart attacks and strokes; early detection and treatment of asthma via nebulizers and wheeze sensors)

[Initiatives in areas in which a sufficient global market scale is forecast, and in which we can demonstrate our strengths]

As well as aiming for zero events (preventing the onset of serious disorders (events) such as strokes and myocardial infarctions that are caused by high blood pressure) and zero asthma attacks, we are aiming to solve social issues by achieving personalized medicine.

Information campaigns in Turkey (OMRON Academy)

Social Solutions

Details: Solving social issues through our businesses

Social Issues	Increase in traffic accidents and traffic jam Global warming from CO₂ emissions Slow expansion of the renewable energy market
2020 Goals	[Transport] Creation of safe driving support systems and technologies [Energy] Cumulative shipped capacity of solar power/storage battery systems:11.2GW Build an energy resource aggregation business using solar power/storage battery systems (Japan)
2019 Progress	[Transport] Introduced tailgating detection function [Energy] Solar power system: Cumulative shipping capacity 9.6GW Storage battery system: Cumulative shipping capacity 438MWh
Case Studies	Launched joint research with Kinki University regarding the detection of senior driver-related risks Examined technology applications for efficient battery control in a building and power system stability of a local area. OMRON announced in 2020 that ”Ene-Supli”, our new energy management service for low-rise housing complexes, will be launched in 2021.
Social Value	Contribute to a safe, secure, comfortable, and clean society for all Contribute to build a sustainable society by prevailing renewable energy

Goals to Respond to Stakeholder Expectations

Human Resource Management

Under VG2.0, our human resources strategy calls for creating a strong company where employees grow, enjoy their work, and improve performance continually. OMRON envisions an organization in which individual members of a diverse workforce can put their unique talents to use and achieve personal growth on their own initiatives. By so doing, these workforce members drive the growth of OMRON by contributing to customers and society as a whole, through improvements of productivity and added value.

Talent Attraction and Development

OMRON’s Initiatives	＜Human Resources Strategy＞ Securing and training of next-generation leaders (candidates for important positions) Providing of a workplace environment that can attract and empower the diverse talent necessary for business growth Fostering of self-motivated employees who can achieve self-transformation and development
2020 Goals	Continued evolution of TOGA* towards meeting OMRON Principles Ratio of non-Japanese in managerial positions overseas: 66% Accelerate PDCA implementation through employee engagement surveys
2019 Progress	TOGA has taken root as a process to share and recognize voluntary employee initiatives in practicing the OMRON Principles Ratio of non-Japanese in managerial positions overseas: 70% (+8% pt vs. prior year) Implemented improvement measures in response to organizational issues identified in our engagement survey
Case Studies	A total of 52,780 employees (1.7 times entire employee base) engaged in 6,405 projects, continuing to share best practices Used periodic talent reviews in the selection of successors, and in localized positions. Systematic provision of opportunities for rotating roles and responsibilities as well as training aimed at the appointment of selected successors. To create a work environment in which employees can fully express their abilities, we strengthened workplace communications between superiors and subordinates, simplified rules, adopted systems for more flexible work styles, and leveraged IT infrastructure
Social Value	OMRON is creating leaders who can drive innovation and both acquire and train diversely talented employees to solve social issues through our businesses.

*TOGA: an abbreviation for The OMRON Global Awards, a participation-type approach for employees worldwide to foster a challenge-oriented corporate culture that uses our business activities to put into practice the OMRON Principles. Through these activities, each and every employee seeks to voluntarily take on the challenges of solving social issues, and of creating value.

Diversity and Inclusion

OMRON’s Initiatives	<Diversity and Inclusion> Promoting career advancement for women (OMRON Group in Japan) Promoting career advancement for the disabled
2020 Goals	Ratio of women in managerial roles: 8%^*1 (OMRON Group in Japan) Ratio of employees with disabilities: Increase number of such employees to above the legally-mandated ratio (OMRON Group in Japan)
2019 Progress^*2	Ratio of women in managerial roles: 5.9% (OMRON Group in Japan) Ratio of employees with disabilities: 2.8% (OMRON Group in Japan)
Case Studies	Promoting career advancement for women Provided leadership training, career counseling, and networking opportunities for female employees Trained managers in employee development skills Female management mid-career hires Enhanced systems that enable flexible work styles Employment of employees with disabilities Supported the activities of Group companies, and confirming that reasonable consideration taken Established a consultation system and support for activities using professional counselors Expanded duties aimed at increasing employment opportunities Implemented heart barrier-free — an awareness amongst everyone of accessibility issues
Social Value	Achieving a workplace in which diverse human resources can play an active role, regardless of the presence of limitations such as gender or disabilities.

*1: Ratio of women in managerial roles — April 2021 Goal/KPI
*2: (1) is for April 2020, (2) is for June 2019

Wellness Management

OMRON’s Initiatives	＜Wellness management＞ Issuing of employee health management declaration Implementation of employee education Implementation of initiatives towards ameliorating factors that inhibit good health
2020 Goals	Improve awareness of wellness management (spread activities based on Boost5* globally)
2019 Progress	[Within Japan] Created a Japan-wide network of medical staff and health supervisors supporting Boost5 Selected as a Health and Productivity Company (recognition by the Ministry of Economy, Trade and Industry and Tokyo Stock Exchange) for the second consecutive year [Overseas] Established unique area activity targets, actively developing health measures according to local community needs in each country
Case Studies	[Within Japan] Published the OMRON White Paper, and made employees aware of the relationship between Boost5 and employee health and performance. As one measure to support smokers in quitting tobacco, the Quit Smoking Marathon was held to offer them team support. (In FY2020, OMRON Group companies in Japan adopted a policy prohibiting smoking during work breaks while in the office) [Overseas] Established Boost5 in each region and implemented activities (10,000 steps-per-day challenge to all employees, weight-loss competition, kickboxing classes, health seminars, mental health counselors, smoking cessation support by specialists, etc.)
Social Value	Promoting employee health management and fitness increases productivity and employee creativity, as well as contributing towards job satisfaction and a sense of meaning for all employees. This is also effective in reducing medical costs.

*Boost5: Five areas of physical and mental health: Exercise, Sleep, Mental Health, Nutrition, Smoking

Occupational Health and Safety

OMRON’s Initiatives	＜Health and Safety related Management System and Improvement Activities＞ Promote the acquisition of international health and safety standards at major production centers Ensure personnel for promotion, and carry out education
2020 Goals	Number of major production centers acquiring international health and safety standards: Acquisition at centers comprising 80% of production Continue assignments of promotion personnel: All covered sites
2019 Progress	Obtained OSH certification at facilities representing 68% of total production (new certifications: 4 locations) Completed assignments of OSH promotion personnel in overseas
Case Studies	Introduced an OSH management system to investigate occupational risks; pursuing measures to improve processes for self-directed recurrence prevention at each location Identified and prioritized regions/facilities requiring more personnel; implemented appropriate personnel assignments
Social Value	While ensuring compliance with laws and regulations concerning workplace occupational health and safety, we are creating a work environment to ensure the wellbeing of all employees at the OMRON Group and to maximize their abilities, by striving to create workplaces at which employees can work safely and healthfully — both physically and mentally.

Respect for Human Rights and Labor Practices

OMRON’s Initiatives	＜Human Rights related Management System and Improvement Activities＞ Establishment of management system (human rights policy and organizational structure) Human rights risk analysis and corrective actions at production sites
2020 Goals	Define and adopt due diligence process Implemented analyses and corrective actions regarding human rights risks at all production sites
2019 Progress	Initiatives to respect the human rights of not only own employees, but also those from service providers (employee dispatch companies and contractors) (OMRON Group in Japan) Established and began operations to protect the human rights of all persons working at our business locations Completed management design and trial operations of a human rights risk management system for employee dispatch companies and contractors Expanded the number of production facilities conducting human rights risks analysis/corrective actions: Total 19 locations
Case Studies	Developed training content for employees of contractors working at our locations; implemented human rights training for representatives of the said employees; provided access to relief measures for employees of contractors Communicated our policies to employee dispatch companies and contractors Implemented risk assessments at 19 production locations using RBA SAQ (self-assessment questionnaire); confirmed all locations qualified as Low Risk
Social Value	Achieving a better work environment in which the human rights of all people working in the OMRON Group are respected.

Manufacturing

By putting the OMRON Principles into practice in a way that complies with its Manufacturing Policy*, OMRON will create social value and strives to contribute to sustainable manufacturing. In conformance with OMRON’s Purchasing Policy, OMRON also seeks to achieve sustainable procurement together with suppliers through purchasing practices that conform to our guidelines.

*OMRON’s manufacturing policy comprises three principles-Quality First, 3F (Front-loading, Flowing & Flexible), and H&E (Human-oriented & Eco-manufacturing). The "3F" policy refers to the creation of the value sought by customers in the upstream of the development process. This value is built into products and services so that we can deliver what customers require in the needed quantities and at the needed times. In this way, the policy addresses the creation and delivery of customer value. The H&E policy aims to achieve the best match between people and machines and promote humanity-focused, environmentally friendly manufacturing to use limited resources.

Product Safety and Quality

OMRON’s Initiatives	＜Advancing Group-Wide Product Quality Management＞ Conducting group-wide product quality management reform Reducing product safety risk
2020 Goals	Ratio of newly developed products undergoing safety assessment: 100% Improve product safety assessments
2019 Progress	Ratio of newly developed products undergoing safety assessment: 100% Completed establishment of assessment evolution processes for all business companies according to the OMRON Group Rules* revised guidelines
Case Studies	Expanded assessment details for the application of latest safety standards, laws, and regulations and to improve market and customer usability, and apply this to assessment processes in each business.
Social Value	Incorporating quality, safety, environmental, and human rights into products and services, to bring about sustainable manufacturing.

*OMRON Group Rules: Internal rules established as a foundation for management in order to ensure transparency, fairness, and globality of management, and to ensure appropriate and prompt decision-making. These encompass 24 separate topics, including ethical conduct, risk management, unauthorized control, information security, safety assurance business management, IT controls, accounting and funding, labor and occupational health, environmental management, procurement, and brand logo management.

Supply Chain Management

OMRON’s Initiatives	＜Engagement with Partners＞ Holding of Global Partner Conference Promotion of sustainability self-assessment for important suppliers^¹ Introduction of management compliant with RBA^², and initiatives to maintain and improve this
2020 Goals	Sustainability self- assessment for important suppliers (Partner Suppliers): 100% implementation ratio Sustainability self- assessment: Achieved RBA score of 85 or more
2019 Progress	Completed sustainability self checks for all critical suppliers Of the 12 companies scoring less than 85 points, we received plans from 11, agreeing on the details of the initiatives proposed
Case Studies	At the Global Partner Conference, requested that Partner Suppliers conduct sustainability assessments and improvements Used individual meetings to dialogues with these suppliers, and to further communicate that sustainability is an issue for business Visited suppliers who have not implemented sustainability self-assessment, and requested their cooperation Conducted individual dialogues with suppliers with less than 75 points, and conducted follow-up to improve understanding (Based on the improvement plans, we verified the consistency of initiatives between the person in charge at the critical supplier and our CSR manager, completing the self-check)
Social Value	By solving social issues in the supply chain in cooperation with suppliers, achieving a society capable of sustainable production and consumption.

*1: Sustainability self-assessment: Supplier self-evaluation of their own initiatives into labor, safety, and health, using a questionnaire.85 points or above is considered low risk, whereas 65 points or less is considered high risk. Compliant with RBA (Responsible Business Alliance)
*2 RBA: abbreviation of Responsible Business Alliance. Global CSR alliance centered around the electronics industry.

Reduction of Greenhouse Gas Emissions

OMRON’s Initiatives	＜Advancement of Green OMRON 2020＞ Reduction in greenhouse gas emissions by improving the efficiency of power usage, and by introducing renewable energy Provision of products and services that contribute to the spread of clean energy
2020 Goals	Reduce total GHG emissions by 4% (vs. fiscal 2016) Environmental contribution exceeds CO₂ emissions from production centers
2019 Progress	Reduce total GHG emissions by 34% (vs. fiscal 2016) Environmental contribution: 971kt-CO₂ > Production location CO₂ emissions: 135kt-CO₂
Case Studies	PV installation: 4 locations in Japan Renewable energy procurement: 6 locations in Japan Energy reduction through equipment upgrades and optimized operations (Shenzhen, China, production factory) On-site inspection to plan measures for energy conservation and use of renewable energy at production factory in Indonesia
Social Value	Making sustainable manufacturing a reality by reducing greenhouse gas emissions, and bringing about a low-carbon society.

Appropriate Management and Reduction of Hazardous Substances

OMRON’s Initiatives	＜Advancement of Green OMRON 2020＞ Build a framework for chemical substance management s used in production processes Stop use or reduce the use of harmful chemical substances, responding to high social demand
2020 Goals	Reduce mercury through prevalent usage of digital thermometers and blood pressure monitors: 69 tons/year Stop use of CFCs in FY2018. Also stop use of HCFCs and mercury (fluorescent lamps) in FY2020
2019 Progress	57 tons/year (thermometers: 12.27 million units; electronic medical-use blood pressure monitors: 880,000 units) Eliminated all substances one year ahead of plan by working ahead of schedule Devices using CFCsCompletely eliminated Devices using HCFCsCompletely eliminated Fluorescent lightsCompletely eliminated
Case Studies	Exhibits at trade shows and academic societies for ongoing educational activities for doctors
Social Value	Realization of a low-carbon society that is in harmony with nature, by reducing negative impacts of chemical substances on people, organisms, and the environment

Risk Management

OMRON promotes risk management that integrates all risk-related activities at the global level, in order to ensure business continuity and the achievement of goals, while also fulfilling its social responsibilities. By disseminating the polices and rules established in-house, OMRON seeks to build long-term relationships of trust with stakeholders while helping employees engage in work and business with pride and a sense of security.

Fair Business Practices

OMRON’s Initiatives	＜Enhanced compliance program＞ Periodic reviews of OMRON Group Rules for Ethical Conduct on a regular basis in order to reflect laws and regulations, and social demand of countries around the world Offer continuous, periodic and necessary training and education in order to maintain awareness of compliance and instill stipulated in rules Assess issues using the whistle-blower system and promptly take corrective actions
2020 Goals	Continuous evolution of group governance Instilling OMRON Group Rules (OGR)^* at locations worldwide Offer global training regarding the OMRON Group Rules for Ethical Conduct
2019 Progress	Completed construction of group governance system [Self-checking, monitoring, and auditing] OGR self-check: Established structure of self-inspections by management at 105 group companies Visualized and optimized audit/monitoring activities Initiated governance discussions at board meetings of each company (Japan, Americas, Europe, China, Asia, Korea) [Education] Implemented governance training for management at group companies Compliance training for all employees
Case Studies	Governance training for newly appointed directors (Japan), Ethics Meeting (Americas) CEO message (translated into 25 languages; delivered to all global company employees) E-learning for all employees during Global Corporate Ethics Month (bribery prevention, etc.) Use promotion videos and posters, etc., to encourage understanding of the internal whistleblowing system (Europe)
Social Value	Implementing appropriate anti-corruption measures taking into account the political, economic, and cultural circumstances of each country, and contributing to the maintenance of an orderly and healthy society based upon the rule of law. Ensuring fair business practices in conformance with applicable laws of respective countries and global rules, thereby contributing to the realization of the society that allows fair and free competition.

*OMRON Group Rules (OGR): Internal rules established as a foundation for management in order to ensure transparency, fairness, and globality of management, and to ensure appropriate and prompt decision-making. These encompass 24 separate topics, including ethical conduct, risk management, unauthorized control, information security, safety assurance business management, IT controls, accounting and funding, labor and occupational health, environmental management, procurement, and brand logo management.

Privacy and Data Security

Details: Compliance and Risk Management

OMRON’s Initiatives	＜Rebuilding an Information Security Management System＞ Support for revised and newly enacted laws worldwide concerning the protection of personal information Strengthened technical measures to counter the sharply increasing cyber attacks Implement revisions in education on information security, and continue with education
2020 Goals	Build a new information security system
2019 Progress	Improved security level of IT networks at global major sites
Case Studies	Survey into personal information protection laws in each country, and updated OMRON Group Rules (OGR) ^* Improved training of employees in personal information security (cyber attack training, etc.) Globally conducted website vulnerability assessment and management monitoring
Social Value	Enable appropriate management of confidential data and personal information to help conduct business safely and securely in a digitized society

< Sustainability Management

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