The earthquake and tsunami that struck Japan in March 2011 brought unprecedented destruction to the Tohoku and Kanto regions. We would like to express our deepest condolences to those affected by the disaster.

While no physical damages or personnel injuries/casualties were suffered by members of the JSR Group, the Kashima Plant in Ibaraki Prefecture sustained damage and was forced to suspend operations for approximately two months. As we travel the road to reconstruction, we will contemplate what we can do and what role we should take as a member of society to help, then transfer such thoughts into action.

For the JSR Group, FY2012 (April 1, 2011 to March 31, 2012) marks the start of a new mid-term business plan that covers the period until FY2014: JSR20i3 (“twenty thirteen”). We formulated this plan—which takes its i from innovation, the most important keyword at our Group—based on an analysis of our business environment until 2030 and with an aim to become the type of business our Group wants to be in 2020.

With regard to the structural business reforms we have been working on since 2002, we had to revise the original numerical targets due to the financial crisis and other factors, but I am confident that our general direction and strategy were no mistake. When developing the new plan, we modified parts that should be changed to match new conditions while keeping portions that should be continued.

The key phrase is “Activation Toward Growth.” In this turbulent age of uncertainty and diversification, we want the next three years to be a period in which we bring to commercial fruition the “investments for growth” we have made over the years and activate greater growth.

For JSR20i3 we revised our Corporate Mission for the first time in nine years and gave it a place within “JSR Group's Essential Elements” alongside our Corporate Mission, Management Policies and Course of Action. We did this because we believe that in order for our Group to continue to grow we need to communicate and share with all our employees what the JSR Group will always aspire to become, even when our business areas or managers change.

Our new Management Policies clearly express our management focus and the standards we set for our judgment of value, and proclaim the importance we place on responsibility to our stakeholders. We reorganized our Course of Action by adding Cultivation—the common growth of both managers and junior staff through bi-directional communication—to the original 3Cs (Challenge, Communication, Collaboration), making it the 4Cs.

We also revised our Principles of Corporate Ethics so that the same guidelines apply to all members of the JSR Group, even overseas sites. We have integrated the 10 principles of the United Nations Global Compact as a major component of this system, given their importance in the operation of our global business.

Accompanying the start of JSR20i3 this year will be the full-scale implementation of the E2 Initiative^TM. The E2 Initiative^TM seeks to create value for both Eco-innovation, the creation of new business opportunities, and Energy Management, which focuses on the reduction of CO₂ emissions. In other words, it seeks to create value on both aggressive (the products and services area of our business) and defensive (internal activities and processes) fronts.

On the aggressive creation front, we have already rolled out various products, such as rubber for fuel-efficient tires. A major advantage to aggressive measures is that by testing newly developed products at our plants before marketing, we can also unite them with our defensive measures and save energy in our own operations. We will ascertain emerging needs and ambitiously launch new businesses based on an understanding that the environment has a strong community element and requires lower priced, higher quality products than most markets.

In FY2013, we set a target to reduce CO₂ emissions by 6% from 1990 levels. While we need to determine the effects of the Great East Japan Earthquake, our strong commitment to achieving further reductions will remain the same. We will also ambitiously pursue energy management.

Additionally, from this year onward we will use lifecycle assessment (LCA) as well as economic performance as a basic consideration in all product development. Through repeated success in implementing LCA we hope to increase employee awareness.

Another new focus will be biodiversity conservation, which we have incorporated into our new Management Policies. The JSR Group uses naturally derived raw materials in its core products and also manufactures synthetic rubber with properties comparable to natural rubber. Therefore, we consider the conservation of biological diversity to be an issue intimately linked to our business that we should start tackling immediately.

Based on this understanding, we are in the process of collecting data to determine issues in our raw materials supply chain. Using this information, we intend to deploy concrete initiatives aimed at solving such issues and include them into our business plans.

Our Group sees diversifying our workforce as a key management issue, and as a first step has sought to employ more women. We believe these efforts have been fruitful, both in terms of female representation among new company hires and in terms of skill development.

We are not of the mindset, of course, that workplace diversity is simply about increasing the number of female employees. Given the global expansion of our business, we will focus on globalizing our human resources, for example by expanding our international exchange and training program with overseas sites.

My earnest desire is to create an environment in which our globally diverse workforce can develop and use their skills more freely. Based on the clear values set down in JSR Group's Essential Elements, we hope to develop a corporate climate—a corporate culture—that encourages two typically contradictory concepts: freedom and discipline.

This CSR Report presents the many new initiatives the JSR Group is activating at this present milestone in its development. We hope that you will take the time to read it and invite you to give us your frank opinions regarding its content.

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