ESG Library

Risk Management

The DOWA Group engages in risk management to prevent situations that could have a major impact on its business and to prevent or mitigate damage in the unlikely event such a situation comes to pass. Specifically, we will continue efforts to enhance our risk management process, which involves identifying apparent and potential risks at each operating company, implementing countermeasures, monitoring, and conducting audits.

Promotion Framework

We have broadly classified risks that could have a significant impact on business as strategic risks, economic risks, operational risks, and hazard risks. The Corporate Strategy Committee and the Business Management Committee monitor all business risks, with a particular focus on strategic risks. In addition, the Sustainability Committee assesses and identifies risks classified as economic risks, operational risks, and hazard risks and then examines and discusses countermeasures.

Additionally, necessary items based on deliberations at each meeting are reported to and supervised by the Board of Directors. The Board therefore regularly evaluates the effectiveness of risk management and internal controls.

In October 2020, we implemented a complete revision of our Corporate Mission, Vision, Values, and Code of Conduct with approval from the Board of Directors.

Our Sustainability Committee evaluates and identifies ESG risks and investigates and discusses countermeasures for these risks. Items deemed important in Sustainability Committee meetings are reported to the Board of Directors and receive regular supervision.

System for Promoting Risk Management

Risks That May Affect the DOWA Group’s Operating Results, Share Price, and Financial Position

Classification Description Specific Risks Response
Strategic Risks Market Fluctuation Risks
  • The economy may deteriorate in major markets where our products are utilized and in areas of demand.
  • Industrial frameworks could change, leading to a drop in demand.
  • Diversify risks throughout the Group and ensure stable business results by building a unique business portfolio comprising multiple businesses with differing market risks and risks involving changes to business structure
Climate Change Risks
  • Severe weather events could cause plants to shut down and raise facility management costs.
  • Carbon taxes and other forms of carbon pricing may be introduced.
  • The institutionalization of information disclosure related to climate change may impact the investment environment.
  • Formulate the DOWA Group’s Climate Change Policy and set long-term targets aimed at realizing carbon neutrality by 2050
  • Set FY 2030 targets to reduce greenhouse gases
  • Disclose information and consider countermeasures in line with TCFD recommendations, which have been endorsed by the Group
  • Upgrade to energy-conserving equipment and convert to renewable energy at major manufacturing plants
  • Establish a system headed by the Board of Directors for deliberating climate change and other sustainability issues
Economic Risks Price Fluctuation Risks
  • Prices of nonferrous metals could drop or the yen may continue to appreciate for an extended period of time
  • Avoid and mitigate the risks of fluctuating metal prices and foreign exchange rates through derivative contracts, including nonferrous metal forward contracts and foreign exchange forward contracts
Operational Risks Operational Risks
  • Natural disasters, power outages, accidents, or infectious diseases could cause a significant drop in production
  • Develop a business continuity plan for natural disasters and states of emergency
  • Formulate standardized facility design rules for accident prevention
  • Implement thorough safety guidance and facility inspections and establish a system for sharing information related to safety and operations
Environmental Risks
  • Business activities could generate environmental pollution.
  • Develop environmental management systems at major domestic and overseas plants
  • Implement monitoring using internal standards stricter than those put forth in environment-related laws and regulations
  • Implement periodic inspections to maintain stable conditions at suspended or closed mines and related facilities
  • Prevent environmental pollution stemming from mine wastewater, cave-in, landslides, and other mine-related damage
Quality Risks
  • There could be serious quality defects or abnormalities.
  • Obtain ISO 9001 certification at major manufacturing plants
  • Maintain compliance with the quality assurance guidelines established by the Japan Mining Industry Association and other groups
  • Ensure quality of procured products through supplier surveys and audits
Labor Shortage Risks
  • There may be labor shortages at manufacturing bases in Japan due to a drop in the domestic working population as a result of the declining birth rate and aging population and greater competition in hiring.
  • Extend the age of retirement and establish a motivating work environment by implementing workstyle reforms and establishing and enhancing systems that enable diverse and flexible workstyles
  • Promote Group-wide business efficiency and labor savings by utilizing digital technology
  • Improve the ability of each employee by enhancing the Group’s human resource development system
Regulatory Risks
  • Environment- and recycling-related laws in Japan and overseas, antitrust laws, or other laws and regulations could be introduced, which cannot be predicted at the present time.
  • Preserve rights in Japan and overseas through legal means
Hazard Risks Information Security Risks
  • Confidential or personal information possessed by DOWA could be leaked, falsified, or destroyed, leading to a loss of trust, claims for damages, and other penalties.
  • Sign nondisclosure agreements and comply with information regulations
  • Introduce and implement malware countermeasures, multifactor authentication, and other information security systems
  • Enhance employee training