Risk Management

Basic Approach

The DNP Group strives to create new value that enhances the sustainability of the global environment and realizes a healthy society and economy, and comfortable and fulfilling lives for people, thereby achieving sustainable growth for DNP itself. As the factors that affect management, such as sudden changes in the social environment, become increasingly diverse and widespread, we believe that appropriately assessing and analyzing risks across the company, reflecting them in our medium- to long-term management strategies, and strengthening the process of converting them into business opportunities will help build a more sustainable society and lead to the future standards that we advocate.

Sustainability Management

Materialities

Promotion Structure

Based on the basic principles, the Representative Director and President chairs the Sustainability Committee, which is responsible for managing medium- to long-term risks, identifying business opportunities, and reflecting them in management strategies. In addition, the BCM Promotion Committee works to maintain production activities while ensuring employee safety in the event of a natural disaster or other emergencies, thereby supporting business continuity. The Corporate Ethics Committee aims to raise employee awareness of compliance, which is an essential foundation for for business continuity, and reduce risks. These three committees work together to build a system that covers company-wide risks and promote integrated risk management.

The Board of Directors also receives reports and recommendations on matters discussed and resolved by each committee, and deliberates on and oversees the DNP Group's risk management response policies and action plans.

Sustainability Committee

The Sustainability Committee will meet four times a year, and as needed, to appropriately reflect the DNP Group's approach to sustainability in its management strategy. The Committee will discuss the following matters and report and make recommendations to the Board of Directors.

Managing mid- to long-term sustainability-related corporate risks, identifying business opportunities and reflecting them in management strategies
Formulating sustainability action policies and overseeing their implementation in each division
Identifying sustainability issues, formulating goals and plans, evaluating, correcting, and improving plan implementation and activity status

Corporate Ethics Committee

The Corporate Ethics Committee is an organization that aims to improve employee awareness of compliance, which is the basis for the continuity of the company, and to reduce risks, and is responsible for overseeing internal controls. The committee meets at least once a month to discuss the following matters and report and make recommendations to the Board of Directors.

Formulation and approval of policies related to the group-wide compliance system and implementation plans for various activities
Comprehensive inspection, guidance and review of the system construction and operation based on the implementation plan

Fair Operating Practices

BCM Promotion Committee

The BCM Promotion Committee ensures the continuity of the company by responding to business continuity risks, ensuring the safety of employees and maintaining production activities even in the event of a natural disaster or other emergencies. The committee meets four times a year as a rule, and as needed, to discuss the following matters, and reports and makes recommendations to the Board of Directors.

Building a business continuity management system
Promoting disaster prevention activities

Business Continuity Planning (BCP/BCM)

Risk Management

DNP promotes integrated risk management to minimize the negative impact of variable factors and to expand business opportunities. For risks that are particularly important or of high priority, a risk management division is designated, and after discussions at the Management Committee, these risks are reflected in business strategies and plans. For business opportunities, the DNP Group identifies the businesses on which to focus its efforts, thereby driving strategic business development.

Business Risks

We strive to reduce risks by appropriately assessing and analyzing them and reflecting them in our medium- to long-term management strategies, and we are promoting initiatives to convert these risks into business opportunities. In particular, we are strengthening our response to "information and cybersecurity threats and strengthened regulations" and "promotion of digital transformation and expanded use of AI" as emerging risks.

また、DNPが事業活動を継続していくためには、法令を遵守することはもとより、全社員が社会倫理に基づいた誠実な行動をとることが重要であると考えています。これらの社員の行動のあり方を定めた「DNPグループ行動規範」を基本とする当社の視点と、国際規範をはじめとする社会全体の視点の両面から重要性を分析し、「公正な事業慣行」「人権・労働」「環境」「責任ある調達」「製品・サービスの安全性と品質」「情報セキュリティ」「企業市民」を重点テーマとし、サプライチェーン全体を通じたリスクマネジメントの徹底を図っています。

Major Risks

Risks	Initiatives to reduce adverse impact and transform risks into business opportunities
Human rights risks	Initiatives based on the DNP Group Human Rights Policy Implement human rights due diligence Strengthen the effectiveness of reporting channels available to each stakeholder Dialogue with stakeholders, etc. 人権の取り組み
Occupational safety risks	Initiatives based on the DNP Group Health and Safety Charter and the DNP Group Declaration on Health Review our basic plan every three years and strengthen and promote specific activities to prevent occupational accidents Continue to implement "Tsuki-ichi Kyoiku Activity (an activity to set aside an hour each month for TAIWA and education)" at all manufacturing divisions Identify and visualize risk areas in all equipment, and implement safety measures in accordance with DNP's proprietary standards in all workplaces 労働安全の取り組み
Risks related to the safety and quality of products and services	Initiatives based on the DNP Group Quality and Product Safety Policy Identify and evaluate risks for all products and services from the design stage, and reduce adverse impact of detected risks The Head Office's Quality Assurance Supervisory Division conducts a quality system inspection once a year, and the results of the inspection are reported to the DNP Group Quality Assurance and Product Safety Committee and the Corporate Ethics Committee, after which improvements are made based on instructions 製品・サービスの安全性と品質の取り組み
Information security risks	Initiatives based on the DNP Group Information Security Policy Establish the Information Security Committee and the Information Security Headquarters at the head office as a company-wide umbrella organization, and conduct inspections and provide guidance to business divisions and group companies Establish DNP CSIRT (Computer Security Incident Response Team) at the head office as a cybersecurity response organization to maintain and strengthen business continuity in the event of an incident Promote information security-related measures based on the pillars of "organizational measures," "personnel measures," and "physical and technical measures" 情報セキュリティの取り組み
Risks related to compliance with laws, regulations, and internal rules	Establishment and periodic review of the DNP Group Code of Conduct Education and awareness promotion through level-specific training and Autonomous Corporate Ethics Training for all Group employees in Japan and overseas Establishment of Open Door Room and a global internal whistle-blowing contact for consultations and reporting コンプライアンスの徹底の取り組み
Supply chain risks	Initiatives based on the DNP Group Sustainable Procurement Guidelines, etc. Conclude a basic transaction agreement with a business partner that stipulates initiatives in accordance with our company guidelines as one of the clauses Regular assessments of business partners' compliance with our company guidelines and feedback on the results, and various explanatory meetings Conduct the above compliance assessments and risk assessments every year for critical suppliers*, and require them to submit improvement plans if any risks are identified, provide document guidance, and hold individual interviews Suppliers accounting for the top 90% of annual purchase amounts, and suppliers critical to business continuity Supply Chain Management
Risks related to natural disasters, etc. (Water risks due to climate change, large-scale earthquakes, new infectious diseases, etc.)	Establish the BCM Promotion Committee at the head office and the Division Group BCM Promotion Committee in each division and group to promote appropriate preventive measures Formulate business continuity plans (BCP) to minimize production stoppages and disruptions in product supply, and promoting their management (BCM) Implement fire prevention, earthquake resistance, and flood prevention measures, diversify manufacturing bases and raw material suppliers, and transfer risks through various insurance policies As part of our disaster prevention system, establish the Central Disaster Prevention Council at the head office , the Division/Group Company Disaster Prevention Council in each business division and group, and the District Disaster Prevention Council in each region Thorough implementation of disaster prevention measures based on the DNP Group Basic Disaster Regulations, etc., in preparation for unforeseen events such as disasters 事業継続計画（BCP/BCM）

Risks that require particular response in the medium to long term

Variable factors	Initiatives to reduce adverse impact and transform risks into business opportunities
Variable factors that pose environmental risks and opportunities More frequent and severe natural disasters due to climate change, increasing water risks Accelerating plastic pollution and biodiversity loss Accelerating the transition to a nature-positive, carbon-neutral, and circular economy, and strengthening regulations Expanding environmentally positive markets and accelerating technological innovation etc.	Initiatives to realize the DNP Group Environmental Vision 2050 Set mid-term goals targeting 2030 and reduce environmental impact Initiatives to resolve environmental issues through both value creation and foundation strengthening 環境関連の取り組み
Variable factors that pose social risks and opportunities Human capital related Advances in global business (global population growth) Declining domestic working-age population, declining birthrate and aging population, and labor shortages Changes in awareness regarding people's dignity (human rights and working conditions) Economic imbalance Supply chain related Expanding geopolitical and country risks Risks arising from differences in culture, systems, and rules The growing importance of corporate social responsibility and ethical behavior etc.	Initiatives to accelerate the strengthening and maximization of human capital based on the Human Capital Policy Recruitment, personnel placement, and reskilling to build a robust business portfolio, as well as diversity and inclusion initiatives that combine diverse strengths Activities based on the DNP Group Sustainable Procurement Guidelines (compliance surveys, various information sessions, etc.) Employee training, such as support for purchasing staff to obtain professional qualifications 社会関連の取り組み
Variable factors that pose economic risks and opportunities Economic activity-related Globalization of markets and supply chains Geopolitical factors causing shifts in the balance and disruption of supply chains Sudden fluctuations in economic indicators Strengthening of various regulations Technological trends related Promotion of DX and expansion of AI utilization Changes in lifestyles and work styles due to innovations in digital technology, and the acceleration of global networks, etc. Information and cybersecurity threats, strengthened regulations Widening digital divide and privacy etc.	Build a strong and stable business foundation through diverse business activities with tens of thousands of companies, not limited to a specific industry or business type Build a strong business portfolio that will not waver even in the face of changes in the business environment Promote appropriate and effective use of AI based on the DNP Group AI Ethics Policy Strengthen information security systems, employee training, and recruitment of security personnel Appropriate protection of intellectual property and know-how held by the company through information security initiatives Procurement from multiple manufacturers both domestically and internationally to ensure stable supply and maintain optimal procurement prices 情報セキュリティサプライチェーンマネジメント

Variable factors

Initiatives to reduce adverse impact and transform risks into business opportunities

Variable factors that pose environmental risks and opportunities

More frequent and severe natural disasters due to climate change, increasing water risks
Accelerating plastic pollution and biodiversity loss
Accelerating the transition to a nature-positive, carbon-neutral, and circular economy, and strengthening regulations
Expanding environmentally positive markets and accelerating technological innovation

etc.

Initiatives to realize the DNP Group Environmental Vision 2050
Set mid-term goals targeting 2030 and reduce environmental impact
Initiatives to resolve environmental issues through both value creation and foundation strengthening

環境関連の取り組み

Variable factors that pose social risks and opportunities

Human capital related
- Advances in global business (global population growth)
- Declining domestic working-age population, declining birthrate and aging population, and labor shortages
- Changes in awareness regarding people's dignity (human rights and working conditions)
- Economic imbalance
Supply chain related
- Expanding geopolitical and country risks
- Risks arising from differences in culture, systems, and rules
- The growing importance of corporate social responsibility and ethical behavior

etc.

Initiatives to accelerate the strengthening and maximization of human capital based on the Human Capital Policy
Recruitment, personnel placement, and reskilling to build a robust business portfolio, as well as diversity and inclusion initiatives that combine diverse strengths
Activities based on the DNP Group Sustainable Procurement Guidelines (compliance surveys, various information sessions, etc.)
Employee training, such as support for purchasing staff to obtain professional qualifications

社会関連の取り組み

Variable factors that pose economic risks and opportunities

Economic activity-related
- Globalization of markets and supply chains
- Geopolitical factors causing shifts in the balance and disruption of supply chains
- Sudden fluctuations in economic indicators
- Strengthening of various regulations
Technological trends related
- Promotion of DX and expansion of AI utilization
- Changes in lifestyles and work styles due to innovations in digital technology, and the acceleration of global networks, etc.
- Information and cybersecurity threats, strengthened regulations
- Widening digital divide and privacy

etc.

Build a strong and stable business foundation through diverse business activities with tens of thousands of companies, not limited to a specific industry or business type
Build a strong business portfolio that will not waver even in the face of changes in the business environment
Promote appropriate and effective use of AI based on the DNP Group AI Ethics Policy
Strengthen information security systems, employee training, and recruitment of security personnel
Appropriate protection of intellectual property and know-how held by the company through information security initiatives
Procurement from multiple manufacturers both domestically and internationally to ensure stable supply and maintain optimal procurement prices

情報セキュリティ
 サプライチェーンマネジメント

事業等のリスク（有価証券報告書）

Business Continuity Plan (BCP/BCM)

If an emergency occurs that threatens the continuation of a business and business activities are interrupted, it will have an impact not only on the company itself, but also on various stakeholders, including customers, business partners, and the people working there. In preparation for such an event, DNP has established the BCM Promotion Committee at its headquarters to promote countermeasures, and has also established the Business Division Group BCM Promotion Committee in each business division. Utilizing this structure, we are constantly aware of disaster risks and are promoting appropriate preventive measures, based on the principles of "giving top priority to human safety measures in the event of a disaster" and "enhancing the company's disaster response and recovery capabilities."

Specifically, we are working to build a strong corporate structure that can quickly restore business activities even in the event of an emergency by implementing fire, earthquake, and flood prevention measures for manufacturing equipment and other major facilities, diversifying manufacturing bases and raw material suppliers, formulating a business continuity plan (BCP) to minimize production stoppages and disruptions to product supply, and promoting appropriate management of that plan (BCM).

Disaster prevention system in preparation for unforeseen circumstances

DNP has established the Central Disaster Prevention Council to develop and promote basic disaster prevention measures for the entire group, the Business Division/Group Company Disaster Prevention Council to promote specific disaster prevention measures suited to the characteristics of each business, and the Regional Disaster Prevention Council to promote disaster prevention measures by deepening cooperation between regions and areas, and is formulating disaster prevention plans and promoting preventive measures. For unforeseen circumstances such as disasters, we have established basic policies and promotion systems as the DNP Group Basic Disaster Regulations, and are promoting a variety of disaster prevention measures to ensure the safety of employees, their families, and related parties, and to reassure various stakeholders.

	Head Office	Each Business Unit / Group Company
Permanent Disaster Prevention Organization	Central Disaster Prevention Committee at the DNP Group Chairperson Deputy chairperson Secretariat Subcommittee · Human resources subcommittee · Facilities subcommittee · Asset preservation subcommittee · Business activities subcommittee · Public relations subcommittee · Community subcommittee	Business Unit and Group Affiliate Disaster Prevention Councils Chairperson Deputy chairperson Secretariat Coordinator · Human resources coordinator · Facilities coordinator · Asset preservation coordinator · Business activities coordinator · Public relations coordinator · Community coordinator Fire protection and disaster prevention manager (DNP's own firefighting organization) *Individually established for each business unit / group company In areas composed of multiple organizations, area-specific disaster prevention committees are also set up to promote disaster prevention measures across the organization.
Functions and roles	Development and promotion of comprehensive and systematic disaster preparedness measures throughout the DNP Group	Promotion of practical disaster preparedness measures considering business content and regional characteristics
Maintenance of regulations, plans, etc.	Basic regulations for disaster countermeasures at the DNP Group · Basic plan for disaster prevention at the DNP Group · Large-scale earthquake response plan at the DNP Group Regulations for fire protection / disaster prevention management at the DNP Group	· Disaster response work plans · Business Continuity Plan (BCP) · Firefighting plan
Countermeasures organization in times of disaster	Central Disaster Response Headquarters at the DNP Group *The DNP Group’s Central Disaster Prevention Committee will be transferred as is, to promote and otherwise take overall control of company-wide disaster emergency measures, disaster recovery / reconstruction and other necessary measures in the time of a disaster.	Disaster Response Headquarters for each Business Unit and Group Company *The disaster committee in each business unit / group company will be transferred as is, to promote and coordinate disaster emergency measures, disaster restoration / reconstruction and other necessary measures at a specific disaster site.

Related Measures

Employee Training

DNP has established the DNP Group Code of Conduct, which outlines the behavior that all employees should adopt in their corporate activities, and is working to instill this in employees through level-specific training and Autonomous Corporate Ethics Training that is provided to all Group employees both in Japan and overseas. Furthermore, recognizing the importance of responding to risks throughout the supply chain, we encourage employees and business partners to understand and agree with the DNP Group's human rights policy, environmental policy, sustainable procurement guidelines, etc., thereby promoting their implementation.

"All employees" refers to Directors, Audit & Supervisory Board members, Corporate Officers, and Advisers of DNP Group companies, as well as those employed by each company and dispatched employees under labor dispatch contracts.

Fair Operating Practices

Supply Chain Management

コーポレート・ガバナンス報告書 (226 KB)