DRIVEN BASE

Stakeholder Dialogue Fiscal 2016

Date: In the afternoon of Wednesday, August 19, 2015

Place: DENSO Head Office (Kariya, Aichi)

Dialogue themes

(1) Business: Exchange opinions about DENSO’s activities to solve social issues

(2) Environment: Exchange opinions based on the next EcoVision

(3) Employees: Exchange opinions based on the 2018 Mid-term Plan

Participants
Experts

Eiichiro Adachi

(Counselor, The Japan Research Institute, Limited)

DENSO

Theme (1) Business (Technology Planning Div., New Business Promotion Dept.)

Theme (2) Environment (Safety & Environment Promotion Div.)

Theme (3) Employees (Human Resources Div., DP-Diversity & Inclusion Promotion Dept.)

Main opinions, proposals, etc.

Mr. Adachi’s main opinions, proposals, etc. and DENSO’s comments etc. are presented below.

Theme (1) Business: Exchange opinions about DENSO’s activities to solve social issues

(●: Experts, ♦: DENSO)

● It is hard to expect that the popularization of vehicles will continue at the current pace for the next 50 years. To seek its next business area, DENSO should establish a system for promoting innovation to shift from the automotive components business to new fields. DENSO needs a system or culture that allows engineers to propose new applications of their technologies and take on challenges.

♦ There are many social issues that need to be addressed. We wish to make contributions using our technologies as much as possible. We will allow some of our engineers to spare time for such research etc. while ensuring effective resource management and respecting their motivations. Such a process enabled us to launch the algae research and develop the EcoCute heat pump system (CO2 water heater).

Innovations can arise in the process of daily work. Each employee is expected to keep issues in mind and take on challenges. It is essential to create such a culture.

● In the capital market, investors focus on how companies consider business growth from a long-term perspective, by reflecting upon their faults. I was impressed to learn that DENSO has an R&D roadmap to link social trends, new regulations, and values with systems, components, and technologies. DENSO should actively disseminate information about this roadmap.

♦ We will issue an integrated report from FY2016. We will seek ways to better present the contribution of DENSO’s products.

● What basic approach does DENSO take when generating ideas for new businesses?

♦ We wish to help create a society where services are available as needed and when needed from the viewpoint of “Just in time.” We also attach importance to thinking from the viewpoint of users. We gain more experience and improve our ability to generate ideas, while keeping the public’s viewpoints in mind.

● Recently, some experts point out that Japanese companies have reached a deadlock because they have focused too much on a self-initiated approach. To be more persuasive, DENSO should publicize that it promotes its new businesses created through partnerships, joint ventures, etc. with other companies.

♦ We wish to actively promote partnerships with other companies. However, this is the first time for us to work in these new fields. Even if it takes time, we will connect with users, deepen our understanding about conventional practices, and acquire knowledge of different industries. We will then define the tasks to be performed with partners and promote collaboration.

● DENSO should showcase new businesses to the public to connect business with society. In this context, it is effective to reflect the viewpoint of “getting closer to end users” during in-house operations. DENSO should also publicize the process.

♦ As in the case of the automotive components business, we will conduct a review so that we can deliver appropriate messages to stakeholders in the integrated report to be issued in FY2016.

Theme (2) Environment: Exchange opinions based on the next EcoVision

(●: Experts, ♦: DENSO)

● Manufacturers in the automobile industry should take a step away from monozokuri (manufacturing). There may be objections, but I get the impression that almost everything has been tried to improve fuel efficiency. DENSO should promote mitigation of traffic congestion in collaboration with society. More specifically, DENSO should popularize eco-driving, work with government to mitigate traffic congestion, and review road planning, among other ideas. Very few companies incorporate these activities in their plans.

♦ From a global perspective, many vehicles are still powered by old engines. We will do everything we can do in this field before considering how far we should commit ourselves to a new step.

As has been pointed out, we understand the need to take a step away in anticipation of future changes.

● Japanese companies work on CSR activities only in-house; they must overcome this common issue. For example, “employees” take the initiative in DENSO’s “eco-friendly” activities. The scope should be expanded to the communities. In particular, in emerging countries multinational corporations are expected to play a significant role.

♦ We keep communities in mind. We will gradually start activities involving communities.

Theme (3) Employees: Exchange opinions based on the 2018 Mid-term Plan

(●: Experts, ♦: DENSO)

● The social sensitivity of employees underlies the social sensitivity of a company. Does DENSO have a system to increase its employees’ social sensitivity? Through discussions with companies, I found that there are many unique arrangements for increasing employee sensitivity about social issues. Some companies support employees in their voluntary social contribution activities; others help employees who participated in social contribution activities share their ideas and experience in-house.

♦ At DENSO, the Corporate Planning Div. regularly issues “CSR Newsletter” to share information about activities at workplaces and group companies. Last year, we started to issue an abridged version of the CSR report to share information with employees.

We will review measures to continuously raise employees’ awareness about social issues.

A message from the secretariat

In this dialogue, we identified three priority fields. A one-on-one dialogue was held between a representative from a CSR-related department (from three fields in total) and an expert to facilitate an in-depth discussion. We were able to hold an extensive dialogue on each theme, though we could not deeply discuss all the topics.

Mr. Adachi’s comments revealed that our information disclosure to external stakeholders is inadequate in all the fields. A review is underway in collaboration with relevant departments to issue an integrated report. We will make arrangements so that the report showcases the attractive features of DENSO. Verification of DENSO’s vision and activities requires dialogues with external stakeholders. We will continuously enhance the activities to achieve business growth as “a truly global company” and “a trustworthy company in harmony with society.”

Corporate Planning Div., DENSO Corporation