Basic Philosophy

The Sanki Engineering Group’s Enterprise Risk Management system consists of two pillars. Daily risk management is undertaken by the Risk Management Committee based on the Risk Management Rules, while the Business Continuity Management System safeguards the effectiveness of business continuity planning in the event of contingencies, including crisis management.

Risk Management Promotion System

We set up the Risk Management Committee, chaired by a risk management officer, to centrally manage Group-wide risks and implement an organized response. The committee monitors important risks throughout the Group, formulates a control plan, and monitors risks reported by subcommittees and divisions. To enhance the effectiveness of our risk assessment and control, we have set up the Risk Management Subcommittee to address specific risks under the Risk Management Committee.

Framework of the Risk Management System (as of June 23, 2023)

Risk Management Activities

Each fiscal year, the Risk Management Committee identifies risks that affect business activities and stipulates priority risk items for the next fiscal year. The committee receives reports from the risk management subcommittees to monitor risks and consider necessary countermeasures, provides instructions, and confirms the status of progress.

Major Risk Countermeasures in Fiscal 2020

• ● Business Operation Risks
  • - Common to all construction businesses
    • 　・Securing human resources
    • 　・Increase in materials and labor costs and delays in delivery of materials and equipment
    • 　・Overseas business risks
    • 　・Accidents and disasters during construction
    • 　・Unprofitable construction
  • - Facilities Construction Business
    • 　・Overabundance of planned projects and response to global challenges
    • 　・Increase in property size
  • - Machinery Systems Business
    • 　・Decrease in capital investment
    • 　・Decline in competitiveness
  • - Environmental Systems Business
    • 　・Changes in market conditions
    • 　・Long-term business risks
  • -Real Estate Business
    • 　・Rent fluctuations
    • 　・Decline in occupancy rate
• ● Financial and Other Risks
  • Customer credit risk
  • Stock market fluctuations
  • Interest rate fluctuations
  • Risks related to litigation, etc.
  • Seasonal fluctuations in business performance
  • Legal violations
  • War, terrorism, and natural disasters
  • Climate change
  • Infectious disease epidemic
  • Data security breach
  • System failure

Business Continuity Management System (BCMS)

To prepare against risks that could hinder business continuity, we have formulated and put into place a business continuity plan (BCP) to ensure the safety of all related persons, including employees, through the integrated efforts of all executives and employees. In fiscal 2021, we began preparing to establish a BCMS as a mechanism for the effective maintenance and management of the BCP, and began operating the system in fiscal 2022.
Under the BCMS, we laid out an annual plan to periodically review the BCP through PDCA activities (business impact analysis, education, training, internal audits, management review, review, and improvement) and by coordinating with risk management undertaken by the Risk Management Committee. During the review process, we conduct a business impact analysis, from the perspectives of risk assessment and impact evaluation, to investigate and analyze the degree to which each target operation will be impacted in the event a risk materializes and to take concrete measures to strengthen corporate resilience.
Furthermore, to realize a system for rapid business recovery and maintenance, we formulated risk-specific response guidelines based on the BCP Common Version, which describes our basic response policy. The guidelines address the seven risks of natural disasters, infectious diseases, industrial accidents, cyberattacks, terrorism, misconduct, and communication failure. Since fiscal 2023, the scope of the BCMS has been expanded to include domestic Group companies. In addition, to prepare forcontingencies, we continue to provide BCMS training for directors and employees, conduct periodic drills, and add to our emergency supplies. In particular, we began conducting new drills for industrial accidents, cyberattacks, and misconduct, in addition to drills for natural disasters, to strengthen our response capabilities.

Major Issues Discussed by the Risk Management Committee

• Recognize large-scale communication failures as a new risk and guide the development of countermeasures in coordination with the Business Continuity Management System (BCMS)
• Reinforce the monitoring of rising materials and equipment costs and delays in delivery
• Reinforce the monitoring of work conditions in response to Japan’s revised Labor Standards Act
• Guide the development of risk control measures related to specific construction projects and monitor progress
• Coordinate with special discussions on risk governance conducted by the Board of Directors
• Continue monitoring risks associated with COVID-19