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Management and CSR of the Osaka Gas Group

Risk Management

The Osaka Gas Group identifies risks that can affect its business as a whole and risks specific to each core business. The internal regulations of the Group clarify the organizational structure for promoting and confirming the effectiveness of risk management.

        In addition, the management organization for risk management common to the Group supports the implementation of risk management tasks within each division and business unit across the entire Group.

Organizational Risk Management Structure

The basic unit for risk management in the Osaka Gas Group is each business division, subsidiary or affiliate. The head of each unit is responsible for managing the risks of loss and conducts relevant checks on a regular basis.

Regular Reviews and Monitoring

Operating G-RIMS, Our Own Self-Assessment System

To perform risk management properly, it is necessary to first identify risks faced by each business division (division within Osaka Gas and subsidiary/ affiliate) and then assess the current status of risk management and remaining risks, and determine actions to take.

        The Osaka Gas Group has developed and used G-RIMS (Gas Group Risk Management System) as a common platform for identifying and managing risks since fiscal 2007. Following the annual self-assessment by each division, the secretariat (Auditing Department, Compliance Department, Corporate Strategy Department and Affiliated Business Dept.) holds discussions with each division to monitor implementation. In the course of this process, the results of reviews are analyzed to identify issues requiring a response while important risks unique to the individual divisions are distinguished from those common to the Group. The results of G-RIMS and issues identified are reported to the management.

G-RIMS (Gas Group Risk Management) Check List

1.Financial risks

  • Financial statement risk due to inaccurate accounting or delays
  • Risk of incurring financial losses due to inappropriate investment operations or management
  • Financial losses due to inappropriate trading in derivatives

2.Credit management and Accounts Receivable risks

  • Risk regarding credit limits or loan guarantees for clients
  • Risk due to credit management and accounts receivable management

3.Purchase, accounting, tax risks

  • Embezzlement by employees (individual misconduct)
  • Risks due to inappropriate purchasing (organizational or structural misconduct)
  • Risks due to inappropriate accounting
  • Taxation notifications due to inappropriate accounting for taxation

4.Risks in electronic banking*

  • Embezzlement by employees (related to electronic banking)

5.Information management risks

  • Security risk due to the lack of policies/systems for information management
  • Security risk due to inadequate operation or management
  • Risk due to inadequate categorization or management of information property
  • Theft, alteration, or destruction of information by third parties

6.Personal information management risk

  • Risks due to inadequate management of personal information

7.Information disclosure management risk

  • Credibility loss due to deficiency in information disclosure management

8.Personnel management risks

  • Risks due to incomplete compliance with labor laws
  • Risks due to inappropriate employment/contracts
  • Risks due to inappropriate labor management
  • Sexual harassment risks
  • Power harassment risks
  • Human rights violation risks
  • Personnel and labor-related risks

9.Disaster damage prevention and safety risks

  • Risks related to disaster damage prevention and safety
  • Risks due to industrial vehicle operation

10.Product safety risks

  • Risks due to defects in products/construction/services including product liability

11.Report-related risks

  • Risks regarding the Whistleblower Protection Act

12.Lawsuit risks

  • Lawsuit risks

13.Environmental problem risks

  • Environment-related issues

14.Risks related to unfair trading and subsidies

  • Violation of the Antimonopoly Law by conducting unfair trading
  • Risks regarding subsidy procedures

15.Risk of inappropriate contact

  • Inappropriate association with clients/business partners

16.Risk of insider trading

  • Insider trading

17.Risk of compliance violation in business execution

  • Violation of industry laws and regulations

18. Business risks

  • Risk regarding decision making on management/operation
  • Failure to respond to the business environment
  • Failure of new businesses
  • Losses due to investment activities (investments, partnerships, etc.)
  • Round-trip trading

19.Other risks on business practices

  • Risk of inappropriate asset mismanagement

20.Intellectual properties management risks

  • Establishment of infrastructure
  • Appropriate actions

21.Risks concerning internal control

  • Risk of deficient internal control
  • *Electronic banking
  • Financial services carried out over the Internet or via telephone

Ongoing Improvement and Regular Reviews

Reinforcing Internal Management Initiatives

Each division head and manager is responsible for taking action on problems identified in the course of risk management reviews and for providing periodic follow ups on the improvement processes. In addition, the auditor in each business unit and major affiliated company serves as a focal point for discerning issues for internal audit and promotes managers' self assessment to reinforce internal risk management initiatives. We ensure an effective PDCA cycle (plan, do, check, act) through these risk management activities across the entire Group.