• CSR
  • Third-party written opinion

Third-party written opinion

  • Naoko Hase

Naoko Hase
ESG Analyst
The Center for the Strategy of Emergence: ESG Research Center
The Japan Research Institute, Ltd.

I wish to submit a Third-Party Opinion on the Shindengen Group’s CSR activities and the information contained in the “Shindengen Group CSR Report 2018,” as well as comment on the site visit and opinion exchanges at the Higashine Shindengen Co., Ltd. factory.
This is the second site visit to the Higashine Shindengen Co., Ltd. factory as part of the “SPIS (Shindengen group Productivity Innovation System) activity.” The environmental, quality, productivity, and safety improvements developed throughout the Shindengen Group were progressing steadily. Especially in recent years, you have been promoting the use of the IoT, connecting the production facilities in the factory to the intranet, and monitoring the operation status of facilities at each factory, including overseas factories, in real time at the head office. Thereby, you are trying to improve productivity and efficiency of energy use. You are making efforts to efficiently deal with troubles occurring in various places by aggregating troubleshooting achievements of facilities to the headquarters. In addition to introducing such an IoT, it was impressive that the robotization of the production line was also advanced. Simple work is left to the robot as much as possible, and employees are able to engage in higher value-added work. Furthermore, we also evaluate that you are shifting from simple, automated robots to collaborative robots that can introduce safety fences without requiring safety fences and considering the safety of employees.
With respect to environment-conscious products, such as devices that contribute to the reduction of electricity consumption, electrical components for motorcycles that can comply with environmental regulations in each country, in-vehicle DC/DC converters for electric vehicles, large and fast chargers, non-contact chargers, etc., you are promoting advanced technology development in a wide range of fields. In IC products embedded in lighting equipment for facilities produced by Higashine Shindengen, you implemented weight saving by mounting two parts in one package, and
the “ECO・VC Gold Prize” was awarded for this measure by the Panasonic Corporation in November 2017. I believe that your enthusiasm for technological innovation has been reflected in this award. Through the provision of a wide range of products, we appreciate that you contribute to the reduction of CO2 emissions for society as a whole.
Regarding the introduction of renewable energy at the factory, which I pointed out last time, we evaluate that in February 2018, an action to conclude the “Citizens of Yamagata CO2 Reduction Value (J-credit) sales contract” derived from renewable energy was begun for the purpose of offsetting a CO2 discharge to affect the use of electricity at the Hanno factory of your company. As your products contain products that consume large amounts of energy during manufacturing, such as semiconductors, we believe that a stable supply will be the top priority, and it will be difficult to introduce re-energizers for in-house use. However, with regard to the initiative called “RE 100*,” which has been spreading mainly in Europe and the United States, numerical targets for promoting the introduction are set as a country in Japan, and the move toward the introduction of renewable energy is accelerating. Since it is expected that manufacturers will request suppliers to use re-energy electricity in the future, we are expecting your company to consider this as much as possible. For example, when establishing a new plant as scheduled in FY 2020, we regard it as one idea to develop power generation equipment such as solar power for in-house use.
As efforts to give consideration to employees, you are working on reducing overtime labor hours by means such as improving labor productivity and setting overtime limits. Regarding the acquisition of paid vacation, Higashine Shindengen has devised a plan such that one day is divided into four divisions and partial pay can be acquired. Also, while there is factory work taking place at night, it is difficult to hire female employees, and female employment is proactively promoted. In FY 2018, the female employment ratio was raised to 50% at Higashine Shindengen (30% even at Shindengen Industry). For the diversification of working styles, you have also started to introduce short-time work for nursing care. In the future, we are hopeful that you will continue your efforts to improve working environments so that everyone can work easily regardless of childcare or nursing care responsibilities. On the information disclosure side, we evaluate that you have disclosed information such as the acquisition rate of paid vacations and the number of acquirers of childcare leave or nursing care leave.

Finally, we appreciate that the CSR Report 2018 clearly states that it contributes to achieving targets in SDGs (Sustainable Development Goals) throughout business activities. Regarding SDGs, they have been disclosed since the last fiscal year, but in this fiscal year especially, each product specifies which product that is contributing to achieve. Furthermore, we evaluate the clear disclosure that you strive to contribute to achieving SDGs targets throughout your business activities, such as by showing employee-friendly initiatives, promotion of diversity, and efforts to consider human rights in the supply chain in relation to the goals of the SDGs. Hereafter, we think that it will become even more convincing if you will quantitatively understand and disclose as much as possible about how each initiative contributes toward the achievement of SDGs; for example, disclosing about the impact of the initiatives, the ripple effect, and the impact on the environment and society as much as possible.
(*) Initiative launched in 2014 by “The Climate Group” of international environmental NGOs to promote conversion to renewable energy throughout the international community. Companies that set the goal of procuring business operations with 100% renewable energy become members.

Commentary on the Third-Party Written Opinion

We thank Naoko Hase, an ESG Analyst from the Japan Research Institute, Ltd., for her valuable comments on, and suggestions for, our Group’s CSR activities.
Naoko Hase appreciated that, as a SPIC activity, we are making efforts to improve quality and productivity by considering the environment and safety, and promoting robotization by introducing the IoT and production line. About efforts in consideration of employees, Naoko Hase appreciated that we are promoting improvement of labor productivity, working on reduction of overtime work, and establishing a flexible system as a type of duty form for the acquisition and nursing care in the paid vacation.
In addition, we received valuable opinions on future actions in terms of the Paris Agreement and SDGs, which are international initiatives.
Based on the evaluation and advice received, the Shindengen Group will further strengthen our efforts in the future and make efforts toward social issues with the aim of becoming a valued company under the Mid-to-Long-Term Vision to earn the trust of all our stakeholders.
Thank you for your guidance and support

CSR Committee Secretariat
Shindengen Electric Manufacturing Co., Ltd.

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