Kyodo Printing Co. , Ltd.

Due to the declining birthrate and changes in the employment environment, securing, developing, and retaining diverse human resources suited to the business environment is becoming increasingly difficult. If there is a shortage of necessary human resources or insufficient utilization of capabilities, corporate growth may be hindered by a decline in competitiveness, which could affect business performance. The Group is working on establishing mechanisms and environments to secure and strengthen value-creating human resources.

If employees, facilities, or equipment suffer damage beyond expectations due to large-scale natural disasters or the spread of infectious diseases, product supply disruptions and significant costs associated with equipment restoration may occur, which could affect business performance. The Group is strengthening its business continuity framework through the formulation of its BCP basic policy, acquisition of ISO22301 certification, establishment of a production cooperation system with partner factories, and implementation of fire prevention and earthquake resistance measures.

If the Group violates legal regulations due to the abolition, enactment, or revision of application standards for regulations such as environmental laws, product liability laws, and antitrust laws, or due to the formalization (in name only) of the governance framework, business performance could be affected. The Group is committed to thorough legal compliance through employee education and internal audits, proper operation of internal whistleblowing channels, and integrated company-wide management of compliance risk.

If information is lost, tampered with, or leaked intentionally or through negligence, including via cyberattacks, business performance could be affected due to loss of trust and increased costs for post-incident response. The Group continuously works to improve its information security management level and strengthen its response capabilities through the maintenance and operation of Privacy Mark and ISO27001 certifications, as well as unauthorized access prevention measures centered on TOMOWELL-CSIRT.

If digitalization, the declining birthrate, technological innovation, and changes in consumer behavior progress at a pace exceeding expectations and the Group's response significantly lags, business performance could be affected due to a contraction in business scale and a decline in competitiveness. Similar risks also exist if changes in trade policies in various countries lead to major shifts in the business strategies of business partners. In the information-related businesses, the Group is shifting its focus toward content and solutions, while in the living and industrial materials-related businesses, it is strengthening the development of environmentally conscious products and high-performance packaging materials.

If the Group fails to appropriately address the risks associated with the transition to a decarbonized society, business performance could be affected by increased costs from the introduction of carbon taxes or emissions trading systems, a decline in stock price due to exclusion from investment targets, and difficulty in raising funds. The Group is working to build a resilient management framework that can flexibly respond to multiple climate change scenarios.

If cost reductions and appropriate pass-through to sales prices are insufficient amid soaring prices of major raw materials due to intensified procurement competition, or if procurement delays occur due to supply chain disruptions caused by disasters or other factors, business performance could be affected. In addition to a procurement framework based on diversified purchasing and consideration of alternative suppliers, the Group has established the "Group Procurement Basic Policy" and "Group Sustainable Procurement Standards" to promote mutual development across the entire supply chain.

If issues such as discrimination, excessive or unfair labor practices, or harassment occur within the Group or its supply chain, business performance could be affected by health damage due to deteriorating working conditions or by the suspension of business relationships following the discovery of human rights violations. The Group is promoting the implementation of human rights due diligence based on the "Group Human Rights Policy" and the establishment of remedy contact points, striving to develop a human rights management framework.

If defects occur in products or services due to deficiencies in design or manufacturing processes, business performance could be affected by damage compensation claims and declining sales. Under the "Group Quality Policy," the Group has obtained external certifications such as ISO9001 and implements thorough quality control through a product safety promotion framework centered on the Product Safety Committee and a chemical substance management scheme for products (chemSHERPA).