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Project Risk Management

Approach

The IHI Group believes that initial planning is important to the success of both large-scale projects and investments that could significantly impact business management. Therefore, the Group manages risk through established screening processes and systems before accepting orders and pursuing investments. In particular, the impact of the initial plan is particularly significant in the case of projects including new elements or elements that have not been implemented for a long time, and the Group manages these aspects with careful consideration.

Policy

Basic Rules for Order Acceptance Screening for Large-Scale Projects

The IHI Group’s Basic Rules for Order Acceptance Screening for Large-Scale Projects outlines the basic principles for order acceptance screening, which is conducted to ensure fair decisions on whether or not to accept orders.

Basic Rules for Investment Review

The IHI Group’s Basic Rules for Investment Review strengthen the checking and monitoring function across the entire Group and improve the accuracy of planning and risk management in the divisions that propose and carry out investment projects by creating Group-wide guidelines for large-scale investments that could significantly impact management.

Governance

As a pre-order and pre-investment review, we check the appropriateness and risks in the initial plan, verify no experience and inexperienced factors, and conduct a review by internal and external experts, as well as a multilateral and comprehensive review by the review department.
After ordering and investment is underway, we monitor the progress to ensure things are going according to the initial plan, if new issues or risks are handled appropriately in cooperation with the corporate review department and the department in charge of risk management of each business area. Post-order and post-investment monitoring results are regularly reported to the Management Committee and Board of Directors.

Project Risk Management System

Risk Management

In continuation from fiscal 2023, during fiscal 2024 the IHI Group has been especially focused on post-order monitoring, including on-site audit, for large-scale projects by affiliated companies overseas, which are on the rise. By utilizing a mechanism launched in fiscal 2022, the Group is continuously reviewing and monitoring social trends and other factors regarding procurement-related risks, such as increases in prices and disruptions to logistics, that may affect the profits and schedules of large-scale projects.
As it continues to invest in growth and development-focused businesses, in addition to current steps to prevent downward revisions, the IHI Group will gather information from the project formulation stage for highly novel projects, the number of which is likely to increase, to identify risks at an early stage.
The number of downward revisions for large-scale projects is decreasing, indicating a certain degree of success in project risk management. The Group believes that the effects of improving the accuracy of its estimates by strengthening its estimate system as well as enhancing the resource management of key members involved in project execution and other initiatives have become apparent.
The IHI Group is conducting Project Manager Training for employees who plan to work as Project Managers in the future as part of strengthening the project management capabilities of the Group.

Project Management Course Participants (total)

(Unit: People, Scope: IHI and affiliated companies in Japan)

Item FY2021 FY2022 FY2023 FY2024
Participants 101 108 76 36

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