CSR Concepts and Key Performance Indicators

Basic CSR Concepts

Shimizu has adopted the Analects and the Abacus (Ethics and Economics) as its basic management principles. As we consider these basic principles, we believe it is important to practice corporate social responsibility (CSR) in a manner that utilizes the special characteristics of the construction industry to meet the needs of society in the future, amid changes in the social environment in which our company and the construction industry exist.

Shimizu pursues CSR as an integral part of our business and continually pursues innovation to meet the needs of a changing society. The company has adopted the following three concepts as the cornerstones that provide a stable foundation for working to resolve the problems of society as a good corporate citizen.

• Fairness and Transparency in Business
• Creating Value Surpassing the Expectations of Customers and Society
• The Pursuit of Business Activities that Coexist with Society

Conceptual Diagram of CSR

CSR Promotion Structure

Shimizu carries out CSR activities through business activities to meet the needs and expectations of the community.

Matters Explored in Working Groups

Shimizu has four working groups (WG) comprised of members from divisions involved with the CSR Promotion Subcommittee. These working groups consider and make proposals on the following matters in regard to CSR activities. These are then deliberated decided on by the CSR & Global Environment Committee.

• Decisions on importance
• Key strategies
• Medium- and long-term plans
• Fiscal year plans
• Indicators (quantitative and qualitative) and goals
• Corporate Report

Key CSR Topics & KPI

Process for Selecting Key CSR Topics and Determining KPI

Shimizu specifies key CSR topics and establishes KPI (Key Performance Indicators) that align with our business policies as we continually assess the changing needs and expectations of society. We implement these through our business activities. We disclose information on the degree to which we have attained our goals and solicit input from a broad range of stakeholders and reflect their feedback in our business activities. This enables us to make ongoing contributions to the sustainable development of society.

Step 1:Key CSR Topics

Key CSR topics are selected from the social issues and the Midterm Management Plan 2014 currently in progress. An analysis of materiality is simultaneously performed based on GRI standards, and the response on Key CSR Topics and Material Topics is coordinated. ISO 26000 (Guidance on Social Responsibility) and the general principles of the United Nations Global Compact (Shimizu joined in 2013) are referenced in the course of selection.

Step 2:Selecting KPIs and other Performance Indicators

KPIs and other quantifiable performance indicators are then chosen for the Key CSR Topics selected in Step 1. Internal cross-organizational working groups are formed for the selection process. They hold workshops with relevant divisions to verify the appropriateness of the indicators.

Step 3:Approval by the CSR & Global Environment Committee

The KPIs and other performance indicators are selected and approved in the CSR & Global Environment Committee, which is chaired by the president, and the committee also discusses indicators that the company should evaluate in the future.

Step 4:Implementation of and Revisions to CSR Activities

The company carries out its CSR activities while considering the results from analysis of KPIs and other performance indicators approved by the CSR & Global Environment Committee.

Step 5:Ongoing Revisions

The Key CSR Topics and performance indicators are revised as social conditions and the business environment change. New KPIs are also considered.

The Three Cornerstones of CSR Activities

For Fair and Transparent Business Activities

For Creating Value that Surpasses the Expectations of Society and Customers

For Co-existence with Society

GRI Materiality Analysis

Shimizu performed an analysis of materiality based on GRI standards to extract key CSR topics. The analysis was performed from two perspectives: The impact on stakeholder evaluation and decision-making, and the degree of economic, environmental, and social impact the organization has.

Results of materiality analysis as follows:

The impact on stakeholder evaluation and decision-making on the vertical axis shows the impact on shareholders and investors, recruits, and customers. The degree of economic, environmental, and social impact the organization has on the horizontal axis shows the impact on employee motivation (corporate culture), economic aspects, and medium- to long-term risks.

Management Approach

At Shimizu, the initiatives on each key CSR topic are undertaken by the division in charge of each of the functions. The contents of the policies, goals, responsibilities, specific measures, and other information for each key CSR topic is provided at the respective link destinations in  the Corporate Report and on the website (ESG Data and Disclosures（Reference for the GRI Standards）See the Management Approach of Material Topics ). These divisions also implement the activities aimed at achieving the specific numerical goals of the KPI (Key Performance Indicators) and other performance indicators for each respective topic.

ESG Data and Disclosures

Stakeholder Relations

Shimizu believes that it is important to engage in dialog with customers and all other stakeholders and build a relationship of trust in order to ensure high standards in ESG (Economic, Social, and Governance) performance in our business. We work to ascertain the problems of the company through customer feedback, shareholder and investor engagement, dialog with subcontractors, and communication with employees. We also take care to communicate key information to shareholders and stakeholders and issue press releases to disclose sufficient information to all stakeholders in a timely manner.

Stakeholder	Main Activities	Description
Customers	Business activities	Provide value that exceeds the customer's expectations, rather than simply accurately assessing the customer's needs
	Customer satisfaction survey	Meet directly with the customer three months and again two years after construction has been completed and listen to what they have to say
	Website	Provide information on a timely basis
Shareholders and Investors	General Meeting of Shareholders	Held annually in June
	Financial results meetings	Future forecasts, etc. explained to analysts
	IR events	Offer tours of job sites, the Institute of Technology, and other locations in Japan and overseas
	Meetings for overseas institutional investors	Hold meetings with institutional investors in Europe, U.S., and Asia (23 times in 2016)
Employees	Internal reports	Published monthly
	Informal social gatherings with the president	Direct dialog between the president and employees nationwide every year
	Union activities	Discuss labor relations and work environment
	Family Day event	An event held for the family members of employees
Subcontractors	Kaneki-kai	A conference for Shimizu subcontractors in 12 regions nationwide
	Successor education & training	An initiative to develop the next generation of leaders
Members of the Local Community	Briefings to explain construction projects to local residents	Held to explain construction projects before construction begins
	Job site tours	To report the status of progress on construction
	Social contribution activities	Local events and active volunteer participation
Government and Administrative Agencies	BCP response	Rapid response to government requests during an emergency
External Organizations	Activities in collaboration with NPOs and NGOs	Work together to solve social problems

Participation in the United Nations Global Compact

Reference for the ISO 26000(Guidance on Social Responsibility)

This index lists the main requirements of the ISO 26000 (Guidance on Social Responsibility) Standard and the initiatives of Shimizu Corporation that relate to these requirements.

Main Requirements	Topics	Activities (Web links)
Organizational Governance	―	Corporate Governance
		Establishing a business environment
Human Rights	Due diligence	Management Principles Corporate Governance Being a Company that Values People Things We Request of Our Suppliers
	Critical situation on human rights
	Avoidance of complicity
	Resolving complaints
	Discrimination and the socially vulnerable
	Civil and political rights
	Economic, social, and cultural rights
	Basic labor principles and rights
Labor Practices	Employment and employment relationships	Being a company that Values People Promoting Diversity Initiatives in Health and Safety
	Labor conditions and social protection
	Social dialog
	Labor safety and health
	Human resource development and training in the workplace
Environment	Pollution prevention	Resource Recycling, Pollution Prevention, and Water Use Ecological Mission 2030-2050 Biodiversity
	Use of sustainable resources
	Mitigating and adapting to climate change
	Environmental protection, biodiversity, and restoration of natural habitats
Fair Business Practices	Anti-corruption	Corporate Governance CSR Procurement
	Responsible political involvement
	Fair competitio
	Promoting social responsibility in the value chain
	Respect for property rights
Consumer Issues	Fair marketing; factual, unbiased information and fair contract practices	Delivering Customer Satisfaction through Optimal Quality (only in Japanese) Initiatives in Safety and Reliability (only in Japanese)
	Protecting consumer health and safety
	Sustainable consumption
	Consumer service, support, and complaint and dispute resolution
	Consumer data protection and privacy
	Access to necessary and indispensable services
	Improving education and awareness
Community Participation and Development	Community participation	Contributing to Society
	Education and culture
	Job creation and skills development
	Development of and access to technolog
	Wealth and income creation
	Health
	Social investment