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Third-party Evaluation and Independent Reviews

Evaluation by Outside Organization, Third-Party Opinion, and Independent Review

1. Inclusion into International Indices and universe for international socially responsible investment
   (Current as of July 3, 2017)

JSR Group CSR activities have been evaluated by an outside organization. We have earned inclusion into the following socially responsible investment (SRI) indices and brands.

We have been a constituent of the FTSE4Good Index Series since 2004.
Euronext Vigeo World120 index
We were selected as one of top 120 global companies included in the EURONEXT Vigeo Eiris World 120 Index.
Ethibel Pioneer & Excellence Investment Registers
We were reconfirmed for inclusion in the Ethibel Pioneer & Excellence Investment Registers on June 30, 2017.
January 4, 2017

We have been selected as a member of the Morningstar Socially Responsible Investment Index, Japan's major SRI index, since 2009.

* The Morningstar Socially Responsible Investment Index represents 150 domestic companies selected as being exceptionally socially responsible. This stock index does not guarantee future performance nor does it assume any responsibility. Morningstar Japan K.K. and Morningstar, Inc. shall not bear any responsibility for damage that might result from use of the index. Copyright and all other rights rest with Morningstar Japan K.K. and Morningstar, Inc. Copies, reproductions, and citation without permission are prohibited.

Member of SNAM Substainability Index
We were selected by SNAM (Sompo Japan Nipponkoa Asset Management Co., Ltd.). as a brand for investment of the SNAM Sustainable Investment Fund in recognition of our standing as a company with a high ESG (Environment, Social, and Governance) evaluation.
In March of 2017, we were selected as an FY2016 Nadeshiko Brand initiative by the Ministry of Economy and Tokyo Stock Exchange in recognition of our efforts to support female employees.
White 500
"White 500" Enterprise of the Certified Health and Productivity Management Organization Recognition Program.
We were selected as a company practicing outstanding health and productivity management by the Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi.
FTSE Blossom Japan Index
We were selected as an investment brand of the "FTSE Blossom Japan Index" for being a Japanese company with excellent consideration for ESG (Environment, Social, and Governance)
MSCI Japan Empowering Women Index (WIN)
We were selected by MSCI as an investment brand of the "MSCI Japan Empowering Women Index (WIN)" for being a company with excellent gender diversity.

We were also ranked 90th in the 2016 Channel NewsAsia Sustainability Ranking. Additionally, the JSR Group has continually been ranked in the Global Compact 100 since FY2013.

2. Third-Party Opinion

Toshihiko Goto Chief Executive Officer Sustainability Forum Japan (specified non-profit organization)

Toshihiko Goto

Chief Executive Officer
Sustainability Forum Japan (specified non-profit organization)

The year 2016 was marked by events that went contrary to most predictions, among them the UK's exit from the European Union and the election of Mr. Donald Trump as the US president. It is possible that, in an age of uncertainty, we have become conservative, unable to find a new way forward. However, whatever is happening, the background of it is the fall of the middle class in developed countries.
Nonetheless, the Paris Agreement came into effect on November 4, 2016, less than 11 months after its adoption. Remembering that it took more than seven years for the Kyoto Protocol to come into force, I think this demonstrates just how much of a sense of crisis exists in the world.
In fact, India has declared that it will not sell cars that run on fossil fuels beginning in 2030. France has declared the same beginning in 2040. Reports indicate that China is also planning to make the production of new energy vehicles mandatory. These are proof that movement under a new paradigm—sustainable development within a finite global environment —has started.
It is said that, in general, Japanese society has a weak sense of crisis concerning climate change. Even so, I hope that JSR will persist in living up to its ideals when it says "Materials Innovation—We create value through materials to enrich society, people, and the environment." For example, natural rubber faces a great problem—namely, destruction of tropical rainforests. This is why we need to find alternatives. Apart from this, I would like you to also consider how to respond to the expanding social disparities in Japan, which is the second worst of the developed countries. Such expansion roughly corresponds to the fall of the middle class and poverty in single-mother households. As with your commitment to the idea that "business opportunities can be found in efforts to solve social problems," whether your products are materials business, or business model is B to B, you can find ways forward particularly by knowing needs within work-style reform (typically not limited to just the company) and on the upstream and downstream sides of the value chain. The eradication of poverty is an issue that underlies the "2030 Agenda for Sustainable Development (SDGs)."
Considerable attention has been given to IoT, AI, and other forms of digital innovation, and I get the sense that there has been a transition from last year to this year, as Japanese companies that had been slow to embrace digital innovation have begun to grapple with it as one. I applaud what you are doing in its Fine Chemicals Business and other areas.
I note with great appreciation that you have formulated an ideal vision of yourself in 2030, something that I recommended last year. I also note that, based upon it, you are committed to "having the young generation take the lead in setting our direction for the twenty years, and thirty years, that come after that." I look forward to seeing you assemble a team of young people to build this vision of the future.
The nurturing of producers and technologists and the promotion of diversity, women's involvement, and productivity are coaxial issues. A necessary element for achieving them is work-life management. I hope you will persist in tackling it as a material management item.
You have prepared a "Basic Philosophy for Occupational Health and Safety" and a "Course of Action," and have begun taking steps toward "becoming a "mutually enlightened organization." One way of getting there systematically is integration with ISO 14001, and so I think this is one item worthy of consideration. The switch to the ISO 14001:2015 will take place this year, and I expect that your stance of "active approach = eco innovation = opportunity" will become increasingly apparent. As for measures to combat the climate change, I think they are helpful both for the risk management and opportunity creation in terms of not only "mitigation" but also "adaptation."
I had the feeling that, although you consider everything earnestly throughout the entirety of your business, your perspectives and challenges tend to be somewhat internalized. Given the great possibility that your businesses will continue changing in the years ahead, and considering that you cannot achieve sustainability without change, I think you must take more of an "outside-in" perspective whereby you view yourself from outside. One of the first steps is to do more to encourage each employee to become involved in volunteering and outside study to increase his or her social capital (which roughly translates into "richness of personal networks").
Finally, I feel that you would do well to make greater use of numerical data. I would suggest considering the compilation of a separate data collection.


Chief Executive Officer, Sustainability Forum Japan (specified non-profit organization)
Chairman, Sustainable Management Forum of Japan, Japan Sustainable Investment Forum (JSIF) ;
Director, Green Finance Organization ; Board Member, Global Compact Network Japan etc.
Serves as chair and member of multiple committees, including Member of the working group studying revision of the Ministry of the Environment project EA21; Convener of the working group to develop a platform for disclosing environmental information; Member of the judging committee for the Environmental Communication Awards; Chair of the committee to study the Eco-CRIP project; and Head of the Tripartite Roundtable on Environmental Business (TREB) attached to the Tripartite Environmental Ministers Meeting among Japan, China, South Korea (TEMM). An expert in ISO/TC 207. Former Board Member of GRI. Graduate of Faculty of Law, The University of Tokyo.

Upon Receiving the Third-Party Opinion

Thank you for your feedback on the JSR Group's CSR report.
We strive to resolve social issues based on the view that management that fulfills our corporate mission of "Materials Innovation - We create value through materials to enrich society, people and the environment" and CSR are indistinguishable. This fiscal year, we arranged priority issues for the JSR Group into three axes. At the same time, we have drawn up a vision of ourselves as a company and given greater clarity to our stance and targets for each priority issue.
We have begun work toward executing your proposal of "assembling a team of young people to build our vision of the future." As for "increasing the social capital of each employee," we intend to consider this issue within the contexts of increasing opportunities for outside interaction for employees and our approach to social contribution. We will also consider system-based responses and the preparation of a data collection as part of an effort to improve our safety culture.

CSR Department, JSR Corporation

3. Independent Review

The JSR Group has been independently reviewed by the Responsible Care Verification Center of the Japan Chemical Association regarding the content found in the printed and online versions of the JSR Group CSR Report 2017.