CSR Report

Practicing CSR activities to achieve a sustainable society while recognizing today's new evaluation standard for corporate value.

Companies are gradually adopting "ESG" as the new evaluation standard

"ESG" stands for Environment, Social and Governance. Since the introduction of the United Nations Environment Programme Finance Initiative (UNEP FI) in 2006, the momentum in financial markets to evaluate corporate value from the viewpoint of ESG has continued to build.
At Kanamoto, we believe the orientation of our CSR activities should reflect this background. Harmony between the environment and society, and communications with stakeholders – we are striving to accomplish our social responsibilities on each of these fronts and increase Kanamoto's corporate value.

Kanamoto's efforts concerning ESG

Environment

"Equipment rentals" are an environmentally-conscious business

Rental is a service that enables customers to use equipment through "time sharing." So we might say rentals are an environmentally-friendly business, because the more rentals are used, the more effective the use of a resource. Consequently, rental equipment is linked to energy savings and resource conservation by society, and can be viewed as one solution to environmental problems.
As described below, Kanamoto strives to maintain an ample inventory of environment-friendly construction equipment. Using Kanamoto, in other words, might be called an effective environmental protection measure.

Helping to preserve the environment while meeting customers' needs. That's Kanamoto's green activity.

At Kanamoto, we view consideration of the global environment as an important obligation for fulfilling our social responsibilities as a corporation. For many years, we have been implementing a systematic shift of rental assets to models that clear anti-pollution statutes for gas, noise and other emissions. As of 2010, 99% of the Company's rental construction equipment portfolio consists of the latest environmentally-friendly models that clear anti-pollution regulations. Kanamoto will fulfill its responsibility to protect the environment even as we meet user needs. This is just one part of Kanamoto's green actions. In the years ahead, Kanamoto will actively continue to upgrade its inventory to equipment that utilizes "green technologies."

Aggressive introduction of fuel-efficient, low-emission vehicles, even for corporate automobiles

At Kanamoto we have actively introduced automobiles certified as fuel-efficient, low-emission vehicles for the Company's own fleet, in addition to our inventory of rental construction equipment.
Kanamoto selected hybrid automobiles as its corporate vehicles soon after the start of mass production in 1998. As a result of continuing to upgrade our existing fleet to these fuel-efficient, low-emission vehicles, since 2004 nearly all of Kanamoto's automobiles for corporate use have been environmentally friendly models offering reduced environmental loads.

Example of environmental friendly equipment introduced by Kanamoto

Social

An all-out commitment to fair, prompt disclosure

Kanamoto has always practiced fair, highly transparent and prompt information disclosure. To release information on a timely basis, Kanamoto posts information on the Tokyo Stock Exchange TDnet system, while also reporting it promptly on Kanamoto's website, where English translations of the documents disclosing the information are also made available. All documents and pamphlets communicating information about the Company and the Kanamoto Group, including videos of the Company's financial statement briefings and briefing materials distributed to participants, the Kanamoto Examiner quarterly issued to shareholders and the Annual Report, can be viewed on the Company's website.

Wide-ranging, in-depth IR activities emphasizing dialogue with our stakeholders

Kanamoto also considers direct conversations with its stakeholders to be an important aspect of its disclosure efforts. Kanamoto actively exhibits at IR events, including the Tokyo Stock Exchange IR Fair for individual investors, Sapporo Stock Exchange individual investor briefing meetings and the Nikkei IR Fair for individual investors, and holds company briefings throughout Japan each year. Kanamoto also holds quarterly briefings with securities analysts and domestic institutional investors, who serve as an information source, and implements IR activities overseas.

Bolster proper control and security of personal information

Kanamoto handles a vast amount of personal information pertaining to clients, shareholders and investors and other stakeholders. Accordingly, the Company formulated a Privacy Policy (Personal Information Protection Policy) to ensure appropriate management of this data. We also have a reliable system in place for responses and countermeasures in the event personal data is leaked outside the Company.
One example of Kanamoto's commitment to personal data protection is its use of the latest encryption technologies to strengthen Internet security and protect information sent to individuals making inquiries via the Company's website.

Measures to upgrade safety and health systems

One effort on which Kanamoto concentrates is safety training, and we have prepared a system for the prevention of worker accidents that is spearheaded by the Safety and Health Office. This body regularly implements in-house training courses and audits, and works to raise safety and health awareness, and during the Business Period ended October 2011 covered all of Kanamoto's offices in combination with the safety patrols operated by the safety and health working groups at 79 offices.
These activities to strengthen Kanamoto's safety and health systems and eliminate accidents have proven successful, and as a result, the number of branches that have achieved a zero accident rate for a continuous period of at least three years has increased to 122 branches. The best record is held by 18 branches that have not suffered any accidents for a period of at least 20 years.

Emphasizing personnel training for Kanamoto's future

Kanamoto considers well-trained personnel who possess high-level knowledge and skills to be the force driving sustained growth. Kanamoto therefore concentrates on creating an organization that encourages and nurtures the capabilities of each employee to the maximum extent, by implementing personnel training and development programs attuned to individuals with management duties and those responsible for maintenance and repair.
Given the need for employees to have numerous qualifications for technical work and maintenance and repairs in particular, Kanamoto works diligently to train individuals engaged in these areas. In addition to providing in-house maintenance and repair training, Kanamoto has expanded its training system to support the acquisition of maintenance technology through participation in manufacturer-sponsored maintenance and repair training, and encourages employees to obtain advanced qualifications.

Number of Repair Qualified Technicians and Operation Qualified Technicians (As of February 2012)

Governance

Actively implementing legal compliance training activities with the goal of spreading a compliance outlook

Earnestly adopting a stance on compliance is an absolute requisite if a firm is to fulfill its social responsibility. Even if it does not work continuously to strengthen its employee training and compliance system, or take special steps to heighten compliance awareness, it is essential for a firm to establish an organization to ensure compliance is implemented. Kanamoto is undertaking various activities aimed at instilling compliance awareness.

[Creating and strengthening the compliance promotion organization]

The Company has prepared ethical rules to serve as a standard for compliance, established a Compliance Committee headed by Kanamoto's president and taken steps to strengthen observance of laws and ethics regulations throughout the entire company. The Company works to ensure every individual is thoroughly familiar with these guidelines, and manages its organization in accordance with these rules.

[Issuing a compliance handbook and communications]

To enable all executives and regular employees to act with the same compliance outlook, the Company has prepared and distributed a handbook summarizing Kanamoto's employee conduct standards. In addition, we've published the contents on Kanamoto's Intranet and carried out efforts to increase compliance awareness in every employee, including creating an environment to promote further information sharing.
Another measure taken by the Company includes publication of compliance bulletins mailed from the Compliance Committee Secretariat to each company in the Kanamoto Group, to enlighten employees concerning legal compliance.

[Setting up a compliance helpline]

As a channel for receiving internal reports and consultations concerning violations of the law or employee misconduct, we've set up a helpline within the Company and are actively moving to strengthen our compliance system. Employees use this system if they are hesitant about making a judgment themselves, or if they have suspicions of a compliance violation by another employee's conduct, when performing their activities in accordance with Kanamoto's code of appropriate practices. Naturally, we pay careful attention to the handling of information to ensure individuals who report information cannot be identified.

Strengthening Kanamoto's corporate governance system to improve sound management

Kanamoto recognizes that corporate governance is the foundation for increasing the value of Kanamoto's operations to society, and is working aggressively to improve the efficiency and soundness of its management.
For management decision-making, we further increased management transparency by introducing the outside director system, and clarified supervisory authority and responsibilities for the execution of Company activities through the introduction of a corporate officer system in 2001. In addition, in January 2006 Kanamoto created a more flexible management organization by shortening the term of office for directors to one year from two years. To audit its management activities, the Company has adopted an Audit Committee system. The Audit Committee is comprised of seven members (four of whom are outside auditors). This committee fulfills an important role in strengthening Kanamoto's corporate governance organization. It regularly participates in meetings of the Board of Directors, gathers information as a liaison between the Auditing Office and an outside auditing firm, conducts internal audits on all aspects of the Company's businesses, and audits the legality and appropriateness of directors' duties throughout the Group.

Kanamoto's corporate governance organization

Enhancement and operation of a company-wide internal control system

To respond appropriately and implement measures to prevent a recurrence if unforeseen circumstances that will have a serious effect on the Company's operations have occurred or might occur, the Company has prepared an Emergency Response Manual (Contingency Plan). One measure for clarifying these activities further is Kanamoto's internal controls reporting system, which all of the Company's employees have been united in supporting since the system was placed into full-scale operation in the Business Period ended October 2009. The Internal Control Promotion Office, which has been the primary body to implement enhancements to the internal control system to-date, is implementing operations and assessments.
Moreover, to ensure the effectiveness of the company-wide internal controls and each activity process, during the Business Period ended October 2011, guidance and training programs were conducted by the Internal Control Promotion Office at 59 offices, and internal controls similar to Kanamoto's were also established and put into operation at 11 Kanamoto Group companies. Through future operation of the internal control reporting system, we aim to ensure an unfaltering response throughout the Company, step up organizational operations fortified with thorough compliance, and further boost corporate value.