Basic policy regarding labor issues

The Asahi Kasei Group believes that all of the human resources working at the Group are the source of new value creation based on their diversity and capability to change.

As a signatory to the UN Global Compact, the Asahi Kasei Group supports and respects the labor-related principles set forth therein. We also endorse the United Nations Guiding Principles on Business and Human Rights and the Children's Rights and Business Principles, and we will use these frameworks to grasp and appropriately address labor issues in our business.
The United Nations Global Compact stipulates the following labor principles.

• Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining
• Businesses should uphold the elimination of all forms of forced and compulsory labor
• Businesses should uphold the effective abolition of child labor
• Businesses should uphold the elimination of discrimination in respect of employment and occupation

Furthermore, the Asahi Kasei Group Code of Conduct clearly states that the Group, as well as its suppliers, does not allow inhumane practices such as child and forced labor, prohibits discrimination for any reason including employment status, respects human rights and diversity, and carries out its business with sincerity and a sense of responsibility.

Based on the above approach, we will not only comply with domestic and international labor laws and regulations on the following labor issues, but also strive to create a work environment where employees can reach their maximum abilities while working with safety and peace of mind.

• Prevention of child and forced labor
• Reduction of excessive working hours
• Formulation of working conditions based on consultation between labor and management

  We will maintain a certain standard of living for our employees through compliance with locally stipulated minimum wages and the payment of fair wages.
  

• Guarantee of freedom of association and collective bargaining rights

  We guarantee the freedom of association and collective bargaining rights for the employees we hire.

The Group's working conditions are formulated and implemented based on consultation and agreement between labor and management.

Management framework

General Affairs and the Human Resources and Organizational Development Group at Human Resources oversee initiatives related to personnel and labor management and human resource development. Each Group company operates its own personnel system and strives for human resource development. The Group-wide status is confirmed through regular audits to ensure there are no violations of laws and regulations or improprieties.

Initiatives for compliance with labor standards and work style reform

Consultation between labor and management regarding labor standards

We strive to ensure legal compliance through such means as sharing information on topic and amendments to labor-related laws with Group companies in order to ensure Group-wide legal compliance.
In fiscal 2017, our Group also established an expert committee for the labor union and company to examine work style reform, and measures such as a telecommuting system have been implemented.
Moreover, we have promoted the use of annual leave days to reduce working hours. In addition to this, we monitor workplaces that have comparatively long working hours with the aim of preventing excessive working hours at the level of each organization.

Specific work style reform initiatives (adopted in fiscal 2019)

• Work from home program
• Availability of paid annual leave in one-hour units
• Increase in number of annual leave days by one day, etc.

Promoting diverse work styles (July 2022 onward)

In response to the COVID-19 pandemic, we temporarily expanded the work from home program and other provisions, but this was changed from a temporary measure to a permanent system starting July 2022. In addition, we introduced work-from-home assistance. Specifics are as follows:

In fiscal 2021, there was one violation of the Labor Standards Law. The amount of overtime and holiday work exceeded the monthly limit (80 hours).
Immediately after the violation occurred, the labor union and human resources held a hearing with the supervisor of the organization in question to confirm the cause of the violation and the organization’s measures to prevent any recurrences. In addition to the workload being adjusted and the workplace support system being reviewed, compliance training was conducted to raise awareness. Moreover, the Human Resources Department shared the case with other organizations, alerted the entire company, and conducted work-time management training in the affected area. To further strengthen company-wide management of working hours, we plan to provide e-learning focused on work-time management.

Improving Employee Work Engagement

We aim to create an organization that can enhance vitality and spur the growth of both individuals and the organization. In fiscal 2020, our Group reviewed the content of our existing employee awareness survey and introduced KSA (Vitality and Growth Assessment), a new survey that aims to confirm work engagement and behaviors conducive to growth. The survey is provided once a year to all employees in Japan, and the report is provided to line managers as a reference for understanding the current state of their organizations. We also promote activities aimed at creating a better workplace through dialogue with employees. At the same time, we conduct stress checks to identify health risks and create an environment in which each employee can achieve sustainable growth while maintaining good physical and mental health.
In addition, the Group as a whole is also working to promote diversity in work styles, expand the Group Masters system to recognize employees with high levels of expertise, and cultivate the next generation of leaders. We aim to be a company where a diverse array of human resources can take on challenges, play active roles, and develop even in a time of rapid change.

• Group Masters

Overview of KSA (Vitality and Growth Assessment)

Reference: KSA Index "Behavior Leading to Growth" Average

Note: Answers on a scale of 1 to 5.
These figures are disclosed internally and externally in the Medium-term Management Plan.

Communication between management and labor

The Asahi Kasei Group supports employees' freedom of association and right to collective bargaining and strives to maintain a constructive partnership between management and labor.
Discussions on the overall management of the Asahi Kasei Group are held on a regular basis between the management of Asahi Kasei Corp. and the labor union, and separate discussions are periodically held at each business unit and operating site. In addition, regular meetings with the federation of labor unions are held to provide the venue to enhance open communication between management and labor.
We have concluded a union shop agreement with the Asahi Kasei Labor Union (an agreement under which all employees, except managers and supervisors, are members of the union), and the union has 9,693 members (as of June 1, 2022).

Creating Regional Employment

In the regions where our Group‘s businesses operate, we will contribute to local communities through employment and procurement activities in those communities.

Policy

Our human resources policies are focused on the maintenance and reinforcement of a corporate culture emphasizing our characteristics, the personal growth of each employee, and the creation and expansion of business through superior people and organizations, based on the understanding that the source of our competitive strength is the exceptional power of our people and organizations.
The Human Resources Principles established in March 2006 outlines the values and behavioral guidelines that should be shared by each employee. By ensuring that our employees act in accordance with these principles, we aim to establish it as part of our corporate culture and achieve both growth for each and every employee and development for our Group.

In accordance with these principles, our human resources development is focused on the mutual growth of individuals and organizations. As part of the medium-term plan beginning in fiscal 2019, efforts for human resources are focused on the growth of management and leaders, growth of professional groups and line managers who manage them, and growth of global personnel.

• Human resource training-related data

Creating a foundation for a diverse array of individuals to play an active role

Based on the idea that everything starts with people, our Group has been working to develop our human resources infrastructure and implementing a variety of measures. In addition, we aim to improve the well-being and job satisfaction of our employees and the competitiveness of our Group by achieving independent career development and growth, improving management skills to help individuals and teams realize their strengths, and utilizing joint creativity that makes the most of diversity.
In this era of rapid change, it is important for employees from all generations, from the youngest to the most experienced, to continue to develop their expertise and grow. We will take concrete measures to achieve lifelong growth going forward.

Human resource development

A wide range of training programs

We utilize a combination of training based on job level and purpose to help employees develop their skills and perform their duties, improve their fundamental skills as they proceed with their work, develop personnel who can work globally, support line management, and develop next-generation management leaders.
Starting fiscal 2020, we are also taking a proactive approach to implementing digital learning, and we are working to develop an effective training system and curriculum that will allow employees to take advantage of high-quality learning opportunities on their own, regardless of their work location or work hours.

Reference: Our Group's investment in training per employee (actual)

Developing digital human resources to promote Digital Transformation (DX)

In 2021, the Group formulated DX Vision 2030 to promote the development of DX as a pillar of its growth strategy. We will strive to achieve a sustainable society a reality by maximizing the benefits of digital technology.
The most important factor in promoting DX is digital human resources. While enhancing DX training by employee level, we are working to increase the number of digital professionals who can promote advanced digitalization to 10 times as many as in fiscal 2021 by the end of fiscal 2024. As part of our DX training for all employees, in April 2021 we launched an internal “Open Badge System” to promote the acquisition of fundamental digital knowledge, and we are also developing a DX training program for business managers.

Group Masters

For the Asahi Kasei Group to achieve sustainable growth amid dramatic changes in the business environment, we must seek growth and win in the global market. Human resources hold the key for doing this.
In this situation, our Group employs a "Group Masters" program to broaden the segment of human resources with expertise that holds universal value through the appointment, training, and treatment of human resources expected to be actively involved and participating in creating new business and strengthening existing business as "Group Masters."
Under the program, we have defined five categories of Group Masters. We have clarified the respective roles of each Group Master category and enhanced treatment to create a mechanism that encourages the growth of human resources while securing outstanding external human resources at the same time.
We have also formulated a succession plan for Group Masters in each field, and have linked the succession plan to business reinforcement and human resource development, which will strengthen our competitive edge.

Categories and roles of Group Masters

Target areas

To achieve the objectives of creating new business and expanding our businesses through the Group Masters system, we have been reviewing and enhancing our specialization fields every year in line with our business policy.
In fiscal 2022, in addition to changes in appointment requirements, the following new fields were established, and a review of appointment requirements was conducted.

• To enhance our sustainability-related technologies, we are integrating the previously separate core technology fields of “Fibers” and “Polymers” and will advance our sustainability-related technologies through further connectivity.
• To innovate management in the Group’s digital creation phase, the digital innovation field will be changed from a core technology field to a core platform field, and the scope of digital Group Masters will be expanded to encompass all employees across all job areas, organizations, and regions by accelerating the development and securing of human resources to lead management innovation. This includes improving management, reforming business models, and creating intangible asset value by utilizing digital technology to the fullest.
• In the core platform field of ESH, we established a new "machinery safety" field and adopted requirements for appointment as a Group Master to raise awareness about the concept of machinery risk assessment within the company and eliminate serious accidents through equipment design and improvements.
• In business unit-specific areas, Asahi Kasei Pharma, in the Health Care sector, has actively utilized the Group Masters system to achieve its medium- to long-term strategy. Following the establishment of the Pharmaceutical Licensing field, Pharmaceutical Business Development field, and others in fiscal 2021, the Pharmaceutical Marketing field and China Pharmaceutical Business field were newly established in fiscal 2022.
• In addition to the establishment of these new specialization fields and domains, there were also major changes in appointment requirements in the Internal Audit and Trade & Customs fields.

We define fields of technology to be strengthened business-wide as "core technologies" and appoint engineers to lead each core technology field as Group Masters.
As a result of organizing the core technologies, production technologies, know-how, business platforms, diverse market channels and business models, which have been cultivated as the source of the Asahi Kasei Group's competitiveness, we defined the 12 fields below as business-wide core technologies. We will also define the fields and occupational categories to be cultivated internally as experts for business-specific fields and key Group-wide functions (core platform fields) and will appoint human resources to lead those areas as Group Masters.

Number of Group Masters and Targets