Risk Management

Approach to Risk Management

The AGC Group is united in its efforts regarding risk management, and has established the AGC Group Enterprise Risk Management Basic Policies on the basis of its Corporate Policy over Internal Control, formulated by the Board of Directors. Under this basic policy, the Group has designated risks that could significantly hinder achieving various objectives of the AGC Group, dividing risk management into 1) a management level intended to control the appearance of risks and 2) a response level when such risks have manifested, and managing them accordingly.

Reducing the impact and probability of risk occurrence

The AGC Group assesses the status of its risk management each year, and reports are presented to the Group Management Committee and the Board of Directors for deliberation. Furthermore, divisions responsible for risks formulate action plans for responding to risks, and continuously enhance and improve the level of risk management by implementing the Plan-Do-Check-Act (PDCA) cycle.

Responding effectively in the event a risk occurs

To prepare for a crisis that could have a serious impact on its business activities, the AGC Group has established reporting and response procedures in its AGC Group Crisis Management Guidelines, and set up a framework designed to minimize the impact of such a crisis. To respond to the occurrence of accidents and disasters in particular, accident prevention measures are undertaken at each business site, business continuity plans (BCP) have been established, and improvement measures are continually implemented to increase the Group’s ability to quickly restore and resume operations.

Examples of risks managed by the AGC Group as a whole include those related to the following:

  • Natural disasters such as earthquakes
  • Procurement of resources
  • Overseas business development
  • Serious legal violations
  • Environmental regulations
  • Market conditions with regard to product demand
  • Occupational accidents
  • Product liability

Reporting Line During a Crisis Situation

Reporting Line During a Crisis Situation

Business Continuity Management (BCM) Structure

The AGC Group began formulating its business continuity plan (BCP) in 2008 to prepare for a large-scale accident or disaster. Additionally, in March 2011, the Group issued the AGC Group Business Continuity Plan (BCP) Development Guideline as guidelines for use by divisions and business sites when formulating BCPs for each type of risk. The Group’s BCP is continuously maintained and improved upon based on the business continuity management (BCM) process.

As an example, given the danger of global outbreaks of infectious diseases, such as pandemic influenza and the Ebola virus, the Group has put a system in place for flexibly responding to each type of pandemic and associated epidemic outbreaks throughout its operations worldwide. Under this system, the Group is promoting broad countermeasures and disease prevention measures appropriate for each In-house Company and site.

Formulating a BCP in Accordance with the AGC Group Basic Policy to Cope with Natural Disasters

Hazard map

Hazard map

A BCP drill was carried out at headquarters in October 2015

A BCP drill was carried out at headquarters in October 2015

Recognizing that a large-scale natural disaster could seriously impact its business activities, the AGC Group has set four concepts to respond effectively: human life and safety first, prevention of secondary disasters, contribution to and co-existence with society, and business continuity.

Based on these concepts, the Group has assessed risks related to earthquakes, wind damage, flooding and other natural disasters at its major business sites (about 200 around the world). It has produced hazard maps that color-code hazard risks by degree and formulated business continuity plans (BCP) for business sites that face high hazards and risks.

At every major business site in Japan and Asia, where there is a high risk of earthquakes, BCPs for earthquakes are fully developed. Furthermore, simulation drills are held every year at AGC Asahi Glass’s headquarters, with participation by the Group CEO, the heads of each division and major interested parties. These drills ensure the BCP is understood by all participants, while augmenting its effectiveness.  

In 2015, the Group ran a drill for a scenario in which an earthquake hit the Tokyo metropolitan area during work hours and the headquarters experienced a full power outage. During this drill, procedures for safety confirmation at the headquarters, reporting the overall damage situation, and examining countermeasures were confirmed, while all potential issues were observed. Additionally, according to the AGC Group’s business continuity plans (BCP), in the event of a major disaster in the Tokyo metropolitan area, the Kansai Plant will manage the initial response as the acting Group Taskforce Headquarters for Group countermeasures. During the drill, it checked procedures for gathering information and ascertaining the safety and damage situation at business locations throughout the disaster area.

In addition, since 2009, the AGC Group (Japan) has been using a safety confirmation system for confirming the safety of employees and their families in the event of a disaster, and practices such drills across the Group twice annually. In addition, Group companies in Southeast Asia conduct drills for responding to power outages caused by a natural disaster.

The AGC Group intends to repeat these drills in the future in order to verify how effectively the established BCP can be carried out and to continuously make improvements to the plan.

AGC Group

Highest BCM Rating Acquired from the Development Bank of Japan

Demonstrating fire hydrant operation methods at a competition

Demonstrating fire hydrant operation methods at a competition

In 2013, the AGC Group received a BCM (Business Continuity Management) rating of A—the highest rank—from the Development Bank of Japan (DBJ).

Derived from an original evaluation system developed by DBJ, the BCM rating provides a comprehensive assessment of a corporation’s business continuity in a disaster situation, including its disaster prevention measures, and strategies and systems for dealing with the aftermath of a crisis.

The AGC Group received a high evaluation for its formulation of Business Continuity Plan (BCP) Development Guideline, its audits of their operation conditions, its BCP drills on undisclosed scenarios for executives and its BCM for targets including its supply chain. In addition, in 2009, the Group also received the highest possible environmental rating from the DBJ, as well as a special award.

In the future, the AGC Group will continue working to improve its BCM and to promote the steady implementation and continuous improvement of its BCPs.

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