JSR Group believes that preventing major crises from occurring and minimizing their impacts on business activities is a key part of management. In response to these issues, the Group has formulated the JSR Group Risk Management Regulations and established a Risk Management Committee through which it actively pursues risk management activities.

The JSR Group Risk Management Regulations was established in November 2023 after reviewing and reorganizing the current regulations, such as the previous Risk Management Regulations that stipulated the identification of risk as well as the selection and management of material risks and the BCM Regulations, which summarize the BCM/BCP^* system in normal times and emergencies in light of the drastic changes in the business environment surrounding the JSR Group due to the globalization of the Group's businesses, changes in values since the COVID-19 pandemic, and heightened tensions in international relations such as the US-China and the Russia-Ukraine situations.
We will advance risk management activities globally in response to new and increasingly complex risks, and strive to visualize risks throughout the Group and strengthen countermeasures.

* BCM: Business Continuity Management/BCP: Business Continuity Plan
A BCP defines activities to be conducted in anticipation of emergencies that could threaten a company’s survival (such as a large-scale natural disaster, explosion/fire, or terrorist attack), judgment criteria and action guidelines that enable business continuity in the event of such emergencies, and other matters necessary for ensuring the continuity and early restoration of important businesses. BCM is a management system that operates and continuously improves the BCP through the PDCA (plan-do-check-act) cycle.

• Basic Views and Policies Related to JSR’s Corporate Governance

JSR Group has established a Risk Management Committee under the Sustainability Promotion Committee. We have put into place a system whereby the Risk Management Committee comprehensively manages important risks that have materialized or could potentially materialize within the Group.

The Risk Management Committee advances the Group's risk management by taking the lead in identifying important risks and supporting the formulation of policies for responding to such risks and the planning and execution of risk management plans by related committees or departments in charge.
For important risks that were identified, the progress of countermeasures is reported to the Sustainability Promotion Committee and the Board of Directors.

The risk management system forms part of the Group’s internal control system. The status of the internal control system’s execution is reported regularly to the Board of Directors. JSR’s Corporate Audit Department continuously verifies and evaluates the preservation and operation of internal control for the entire JSR Group as required by the Companies Act and Financial Instruments and Exchange Act. It also ensures that risk in existing business does not exceed permissible levels. Furthermore, the department additionally strives to maintain and strengthen internal control levels for the entire Group and conducts internal audits to ensure the appropriate and efficient execution of operations.

Under the initiative of the Risk Management Committee, each division of JSR Group companies in and outside of Japan identifies risks on a regular basis. We strive to comprehensively manage risks, including potential serious risks, by combining the identification of risks related to management strategies and the foundation of business continuity by management along with the identification of operational risks from all divisions using a bottom-up approach.

The identified risks are classified in terms of the degree of impact on management and the frequency of occurrence through the use of the risk map. Risks that could potentially have a significant impact on business continuity are organized into JSR Group Risk Factors. In addition, we have designated a department in charge to lead the planning and implementation of countermeasures for each material risk, while the Risk Management Committee checks the progress of these measures as appropriate to manage risks.

Click on the following link for information on the risks that could impact on JSR Group's business performance, financial standing, cash flow, etc.

• JSR Group Business and Other Risks (PDF: 107KB)

The JSR Group Risk Management Regulations stipulate the umbrella organization and operational structure of BCM/BCP in normal times and emergencies, as well as the criteria for activating and terminating the BCP. In addition, we have formulated a manual for each business for the resumption of business activities after a crisis has been resolved.

Moreover, we maintain a stable supply of funds on hand to allow us to manage our businesses flexibly if a major crises arise. We also acquire issuer ratings and commercial paper ratings from rating agencies each year. JSR's ratings are available on rating agencies' websites as well as the JSR website.

In preparation for a large-scale earthquake with an epicenter in the Nankai Trough off the coast of Enshu Sea and Kumano Sea, we are systematically strengthening our countermeasures. Based on the results of a seismic performance diagnosis, we systematically promoted safety measures, including strengthening seismic strength and tsunami countermeasures, with a focus on high-pressure gas facilities in our plants, and completed a series of measures in FY2020. In addition, based on the thought of putting human life first, we have installed an earthquake early warning system at all business sites.

• Occupational Safety, Security and Accident Prevention

Once a year since 2004, JSR holds crisis management training with the participation of “headquarters for accident and crisis control” members.
In FY2023, using a blind scenario format, we conducted crisis management drills based on the scenario that a Tonankai Earthquake (a large-scale earthquake with an epicenter in the Nankai Trough off the coast of the Enshu Sea and Kumano Sea) occurred and the Yokkaichi Plant, our main plant, suffered damages.

Approximately 50 people, including the CEO, President who leads the HQ response team, participated in the drill and confirmed the actions that the head office should take, such as gathering information and determining response policies, in response to fires, injuries, and other possible events on the day of a disaster.

By conducting drills that anticipate a variety of potential disasters, we will continue to make the preparations needed to ensure safety, control damage, maintain business continuity.

JSR Group conducts disaster management, fire suppression, evacuation, and notification training and drills on a regular basis. We will continue working to minimize the impacts of emergencies and improve our ability to ensure business continuity.

In FY2009, JSR introduced a safety verification system that uses employees’ mobile phones and smartphones. The system can promptly ascertain the safety of employees in the event of a large-scale earthquake or other disasters. In FY2011, we began expanding the system's coverage to include domestic Group companies and the families of JSR employees.

We stockpile masks in preparation for epidemics of various infectious diseases. In addition, before the influenza season, we invite doctors and nurses to JSR's head office and Yokkaichi Plant to provide influenza vaccinations to employees who request one.

Click on the following link for information on our responses to legal risks and compliance risks.

• Compliance

JSR Group endeavors to manage information in an appropriate and secure manner by establishing Information Security Policy and by thoroughly disseminating the policy to its employees.

JSR established the Cybersecurity Management Office in an effort to maintain and manage information security and strengthen our response in the event of an incident. The Cybersecurity Management Office works alongside outside experts on information security management including Group companies, employee training and education, and strengthening our response capabilities to cyberattacks or other incidents.

In FY2014, we published the Information Security Handbook so as to further increase employee sensitivity toward information leakage risks and to ensure their actions are in compliance with company rules at all times. We make employees aware of this handbook through our company intranet, e-learning, and workplace discussions.
In FY2023, we conducted a cyberattack response drill targeting members of HQ emergency response team, including the CEO, President, using a scenario that JSR and overseas Group companies were hit by a ransomware attack.