Governance Risk Management

We develop and promote a risk management system to prevent the occurrence of any risks surrounding the business of the Company and Group companies, and to minimize the impact of these risks when they do occur.

If significant impact to the Group’s business activities is projected, we take proper, systematic measures to minimize the impact.

The Group conducts risk management to prevent any risks from materializing and to minimize losses when risks do materialize. To prevent risks from materializing, we have established a Risk Management Committee chaired by the director in charge of risk management with the President and Representative Director as the chief executive in accordance with Risk Management Regulations. The committee sets out policy and plans for operating the risk management system in addition to identifying and assessing the adequacy of countermeasures for risks that could have a significant impact on the Group. Accordingly, we have a system in place to minimize damage and loss when risks materialize—that is, when crises occur—based on Crisis Management Regulations.

Risk Management System Chart

The Group’s Risk Management / Compliance Committee identifies and assesses risks, prioritizes those to be addressed first, and takes steps to ensure a common awareness of risks throughout the Group. Risks that have a particularly major impact on management and a high likelihood of occurring are selected as priority risks to be addressed ahead of all others. The Company-wide Risk Management / Compliance Committee meets five times a year to check progress and issues on a quarterly basis, reinforcing the PDCA cycle that contributes to risk reduction activities.

Risk Management Cycle

Priority Risks

We take various measures to mitigate risks that could have a significant impact on the financial position, business performance, and cash flows of the Group, which we define as follows.

• Business Risks

Climate Change Risks

Climate change is a problem with global impact, and rising temperatures, extreme weather events, and the associated natural disasters and other subsequent developments may make it impossible to procure enough materials and equipment, drive up costs, suspend construction work, and otherwise interrupt business activities. Additionally, if laws and regulations such as rationalization of energy consumption and global warming countermeasures are strengthened in Japan and overseas to curb climate change, they could impose new burdens, change the materials and equipment used in business activities, and otherwise increase costs, negatively impacting the Group’s business, financial position, and business performance.

Although events caused by climate change and other ramifications are difficult to project in detail, the Group will continue to examine the long-term effects of climate change within its existing risk management system. Additionally, in the summer of 2020, we announced our endorsement of the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). We will continue to proactively disclose financial information pertaining to climate change.

• Presumed
  climate-related risks

Business Continuity Plan (BCP)

In April 2014, we established a Business Continuity Plan (BCP) for major earthquakes that sets out initial response and recovery procedures to establish a system for business continuity within the target timeframe in the event of a major earthquake. Accordingly, we have put in place a system for fulfilling the social responsibilities expected of the construction industry during disasters, for example supporting the recovery of hospitals and other important public facilities as well as customers’ supply chains.

We are also working on BCM^* to enhance the effectiveness of our BCP. In response to the outbreak of Covid-19, we formulated a BCP manual for infectious diseases to prepare for possible outbreaks of infectious diseases in the future.

• BCM: Business continuity management. Conducting drills, strengthening important business resources, and other activities to enhance the effectiveness of the BCP (a plan for continuing to conduct business in the event of disasters).