1. Social responsibility
a. Compliances
The IHI Group believes that in order to achieve sustainable growth together with society and our customers, it is important to meet the expectations of our stakeholders and earn their trust. Based on this belief, the Group has summarized what the Group do in "Basic Code of Conduct for the IHI Group", which the Group expects our officers and employees to follow. In addition, 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. On September 12, 2023, our subsidiary's mechanical parking system business was subjected to an on-site inspection by the Japan Fair Trade Commission on suspicion of violation of the Antimonopoly Act. The Group solemnly accepts the fact that The Group was subjected to the on-site inspection and are fully cooperating with the investigation by the Japan Fair Trade Commission. In the event that any administrative action is ordered as a result of the inspection, the Group's business performance may be affected. In addition, on April 24, 2024, it was discovered that inappropriate corrections had been made to the trial operation records of marine and land engines at a subsidiary of our company, and this was announced publicly. The Group takes the occurrence of this situation very seriously and have established a special investigation committee consisting mainly of outside experts, including lawyers. The entire group will take strict measures based on the findings and recommendations of the special investigative committee.
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 operating results 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 our 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 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 our 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 operating results 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.