1. Social responsibility
a. Compliances
The IHI Group believes that in order to achieve sustainable growth together with society and its customers, it is important to meet the expectations of its stakeholders and earn their trust. Based on this belief, the Group has summarized what the Group should do in "Basic Code of Conduct for the IHI Group", which the Group expects its officers and employees to follow. In addition, to instill the importance of compliance, the President and other senior executives have been persistently addressing messages to seek ensuring implementation of compliance on occasions such as "Compliance Day" on May 10th each year and the President's New Year Greeting.
In terms of organizational structure, the Group has established the Compliance Committee, a company-wide organization under the Risk Management Conference, to deliberate on and formulate important compliance-related policies and promote activities.
Furthermore, the IHI Group operates "IHI Group Compliance Hotline" as an internal reporting system to prevent or promptly identify violations or potential violations of laws, regulations, internal rules, and internal and external rules by all officers and employees, and to take appropriate corrective measures.
However, in the event of a violation of laws or regulations by some officers or employees, the Group's business performance and financial position may be adversely affected due to losses resulting from fines, surcharges, or additional taxation, lost opportunities resulting from administrative penalties such as suspension of business, or a decline in social reputation resulting from such violations.
At its consolidated subsidiary, IHI Power Systems Co., Ltd., the cases were found to have made improper alterations in the test operation records for marine engines and land-use engines. Based on the investigation findings and recommendations from a special investigation committee composed of outside experts, including lawyers, recurrence prevention measures were formulated and announced as IHI Corporation and IHI Power Systems Co., Ltd. on October 30, 2024.
At its consolidated subsidiary, Niigata Transys Co., Ltd., the cases were found that certain snowplows manufactured and sold to customers with specifications differed from those presented to. Based on the investigation findings into the facts and causes, the comprehensive performance tests of the subject snow removal models have been conducted, and then the Group respond to customers and formulated recurrence prevention measures of such behavior.
Furthermore, regarding the mechanical parking system business of IHI Transport Machinery Co., Ltd., which was subject to an on-site inspection by the Japan Fair Trade Commission (hereinafter “JFTC”) in September, 2023, it was determined to had engaged in a violation of the Antimonopoly Act on March 24, 2025. IHI Transport Machinery Co., Ltd. voluntarily reported the violation to JFTC by applying for leniency program, and consistently cooperated with the JFTC’s investigation, which resulted in the exemption from surcharges and a cease-and-desist order.
In response to the above misconducts, the Group has been fully committed to preventing recurrence by implementing measures such as communication from top managements, revising internal regulations, strengthening compliance training, enhancing personnel rotation, and conducting dialogue activities in workplace. The Group have also worked on building a system to prevent misconduct behavior and reevaluating of organizational culture. The Group will continue to make sincere efforts as one to establish compliance as a true corporate culture and to regain the stakeholders' trust.
b. Environmental conservation
Within its manufacturing process, the IHI Group has business offices, subsidiaries, and other entities using substances that could cause adverse effects including pollution of the atmosphere, water, or soil. The Group takes the utmost care in managing these substances, and even in the unlikely event of substances leaking outside the Group’s facilities, the Group has measures in place to minimize their spread. However, an unanticipated situation could arise, leading to deterioration in the Group’s reputation within society, as well as liability for damages. If this risk materializes, the Group's business performance and financial position could be adversely affected.
c. Human rights and diversity
In order to maintain the IHI Group's business foundation and link it to future growth, the Group respects human rights throughout its business activities (e.g., by establishing a whistleblower contact point as a grievance mechanism for stakeholders in the value chain). The Group strives to foster an organizational culture in which individuals with diverse personalities and values can play an active role. However, if an event that violates or disrespects human rights occurs in the Group's business activities, the Group may lose social credibility or be liable for suspension of transactions with customers or compensation for damages. In addition, a lack of diversity in the decision-making process in management could have a negative impact on the Group's business performance and financial position.
d. Control of affiliated companies
The IHI Group is committed to providing high value to its customers through group management. To this end, each company in the Group must not only conduct its business in accordance with the laws and social norms of each country and region but must also promote appropriate group management. However, inappropriate responses or independent management decisions by affiliated companies in response to other risks may cause damage or loss of reputation among customers, resulting in adverse effects on its group's business performance and social credibility.
e. Health and safety
The IHI Group takes all possible measures to manage health and safety at its business offices and construction sites. However, in the unlikely event of an unexpected accident, disaster, or other incident, production activities could be impeded, leading to an adverse effect on the Group's business performance and financial position. The Group maintains a range of property and casualty insurance policies, among other measures, but if a major accident or disaster were to occur, the Group may not be able to claim insurance to cover all its losses.