Basic Concept
The Nisshinbo Group's basic concept to risk management is clearly stated as action guidelines in the "Risk Management Regulations."
Action Guidelines for Risk Management
The Nisshinbo Group aims to fulfill its social responsibility, secure trust, and achieve lasting development by accurately addressing management risks that may have a significant impact on the smooth operation of its business. All officers and employees shall recognize the importance of risk management, set risk management targets, and strive to implement and improve them, while complying with the following items.
- ① Comply with laws, regulations, and rules, and conduct business activities in accordance with socially accepted norms.
- ② Protect the health, lives, and safety of its Group's officers, employees, and related parties.
- ③ Protect the activities and assets of its Group's stakeholders, shareholders, and customers.
- ④ Enhance the reputation of the Group in society by accurately responding to fair and reasonable social demands.
While the main objective of its Action Guidelines for Risk Management is to minimize losses in the event of management risk, the Group will also consider it important to view management risk as an opportunity for sustainable growth. To this end, the Nisshinbo Group will create new growth opportunities by understanding and analyzing various changes in the business environment and contributing to society based on business policies derived from the Group's corporate philosophy.
Promotion System
The Nisshinbo Group has established a risk management system, shown in the diagram below, to appropriately address business risks and minimize any losses associated with those risks.
The President and the Director of Nisshinbo Holdings Inc. serves as chief risk management officer, and the Chief Risk Officer has appointed the Executive Officer in charge of the Risk Management Department as the head of the department. The Risk Management Secretariat is located in the Risk Management Department.
The Risk Management Committee, consisting of the chief executive officer, the general manager, and members that include the presidents of each core company, meets annually in January. The committee reports on the previous year's review and deliberates on the formulation of plans for the new fiscal year (priority management risks for each business, etc.).
Risk Management Structure
For an overview of our organizational structure for promoting sustainability, please see "Promotion System for Sustainability Activity".
Risk Management
Taking into account the economic impact of identified risks, the Nisshinbo Group strives to respond by category to any of the four types of risk that can be avoided, mitigated, transferred, and held.
Risk-based response
Risk Mitigation Through the Risk Management Cycle
The Nisshinbo Group strives to address the risks that can be mitigated by implementing an annual risk management cycle in accordance with the procedures outlined in the "Risk Management Policy."
Risk Identification
At the end of each fiscal year, the Group identifies management risks across each business unit using a group-wide standardized format that covers the categories of operations, finance and banking, and hazards.
Risk Assessment
For each business unit, the Nisshinbo Group rates the impact and probability of occurrence for each identified risk on a five-point scale, then assigns a score by multiplying the impact score by the probability score. The Group selects several high-scoring risks from the scored business risks in consideration of their importance to each business unit in order to prioritize monitoring for the coming fiscal year.
Developing Countermeasures
The Nisshinbo Group will develop countermeasures for the risks identified in each project and report the results to the secretariat.
Adjustment and Leveling
For the reported business risks, the Secretariat confirms the details with the risk management officers of each business unit and adjusts the business risk items as necessary in consideration of the overall risk trends of the Group. Once the adjusted business risks are approved by the heads of each business unit (the presidents of the core companies), the Secretariat finalizes the business risks to monitor in the new fiscal year. The Secretariat reports these business risks to the Risk Management Committee, which meets in January, marking the start of risk management activities for the new fiscal year.
Implementation of Risk Mitigation Measures
The Nisshinbo Group will integrate the measures that have been planned and decided into the daily operations of each business unit in accordance with the implementation plan, and Nisshinbo will continue its efforts to reduce risks by carrying out the necessary preparations, raising awareness, establishing rules, and providing training.
Monitoring
Each project includes a report on risk management activities as part of its monthly report. The Secretariat reviews these reports and conducts interviews as necessary to discuss progress and other matters. Midway through the fiscal year, the Secretariat holds individual meetings with each project to review progress and exchange views on resolving issues.
Year-End Review
At the end of each fiscal year, each business unit reviews its activities over the past year, assesses whether the impact and probability of occurrence have decreased, and aligns its understanding of the assessment results with the Secretariat. By repeating this process annually, Nisshinbo works to mitigate risks.
Major Risks and Opportunities
The followings are the major risks and opportunities that management perceives as having the potential to seriously affect the consolidated company's financial position, operating results, and cash flows, among other matters related to business conditions and accounting conditions.
Specific Initiatives of The Nisshinbo Group
6th Sustainability Promotion Plan (to be achieved by FY2027)
Operating a risk management system that responds to the environment
In the 6th Sustainability Promotion Plan, which targets FY2027, the Nisshinbo Group will continue to focus on promote risk management activities and will set the above qualitative target. The Nisshinbo Group will strive to enhance the level of its activities.
In an increasingly complex business environment, establishing a risk management framework that adapts to environmental changes has become necessary. In FY2025, the Nisshinbo Group commissioned an external consultant to evaluate the Group’s risk management framework. While the evaluation generally concluded that the framework and the design of ongoing activities were appropriate, several areas for improvement were identified, including revisions of the risk identification matrix to reflect changes in the environment and implementation of risk mitigation measures within the Nisshinbo Holdings Corporate Division. Going forward, Nisshinbo will work to enhance its activities by implementing measures to address these areas for improvement.
Please refer to "Sustainability Promotion Plan and KPIs" for details regarding of the "Sustainability Promotion Plan."
Activities Related to Risk Management
Nisshinbo will introduce several topics from the content reported to the Risk Management Committee in January 2026.
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Cyber Risk Countermeasures
Against the backdrop of advancing digitalization, the widespread adoption of AI, and heightened geopolitical risks, cyber risks are increasing globally. The Nisshinbo Group is also working to reduce cyber risks, mainly through its Information Systems Department and with the cooperation of external experts, in order to prepare for attacks involving unauthorized access from outside the Company. As part of our risk management activities for FY2026, the Nisshinbo Group will prioritize the monitoring of information security and cyber risks across the majority of our business groups. The Group will implement a range of measures, starting with employee education and awareness campaigns, conducting targeted email simulation exercises, transferring risks through insurance coverage, and further strengthening our systems. -
Confirmation of BCP/BCM operational status
In FY2025, in addition to the survey conducted in FY2024 on the status of the possession and operation of BCP/BCM regulations and manuals, the Nisshinbo Group conducted a survey in questionnaire form on the status of BCP/BCM drills to verify the BCP/BCM frameworks of each company within the Group. Going forward, Nisshinbo will continue to work to ensure that its business continuity framework is maintained through the development of effective BCP/BCM documentation and the conduct of BCP/BCM drills across the Group.
Identification of Emerging Risks
In accordance with the Nisshinbo Group’s policy of "bad news first," whenever an event that may affect the business occurs, the president, executive officers, and department managers of relevant departments receive reports by sending the information at the same email address.
In the risk management regulations, Nisshinbo Group established standards by listing specific examples of risks that should be reported. Although the number of risks reported in FY2025 was 27, a decrease of 9 from the previous fiscal year, the number of reported information security incidents increased. Fortunately, there were no incidents that significantly impacted business continuity.
Nisshinbo Group will continue to ensure that the Group is well informed of this so that it can be used effectively as a tool to inform the first responders of risks that have emerged.