Business Risks | Management Policy and Systems | Investor Relations

The Lion Group's management performance and financial status may be adversely affected by various risks as business activities are pursued in the future. Of these risks, the following items, in particular, may have a material impact on the decisions of investors.
Forward-looking statements are based on decisions made by the Lion Group.
Business risks are not limited to the items listed below.

Risk	Description	Main Initiatives
(1) Risks related to spanmarket and consumer change	Risks of being unable to supply superior roducts and services useful for everyday living due to delays in responding to changes in arkets, distribution or consumers	We analyze changes in markets and consumer lifestyles on an ongoing basis and develop products that offer new living habits.
(2) Product quality risks	Risks of problems with products, such as unforeseen product-related accidents, due to unforeseen product defects or mistaken use by customers	We ensure compliance with related laws and regulations and implement product development and other processes in line with our Product Management System based on the JIS Q 9000 family of standards.
(3) Raw material procurement risks	Risks of purchase price increases and supply-chain delays or breaks due to intensifying competition in procurement	We ensure stable raw material procurement through the use of interchangeable materials, purchasing from multiple sources and practicing global procurement and furthermore implement responsible procurement activities based on our Procurement Principles.
(4) Overseas business risks	Risks of incurring costs associated with response measures or limitations on business activities arising from political and economic developments or changes in or the tightening of laws and regulations in the countries and regions where we do business	We closely monitor developments related to political and economic conditions as well as laws and regulations in the counties and regions where we do business, continually gathering information and preparing for changes.
(5) Human resource risks	Risks of stagnation in corporate growth due to difficulty in securing and developing necessary human resources according to plans as a result of such factors as the decreasing working population and changes in the employment environment	We practice year-round hiring and are expanding our ranks of specialized human resources while implementing the Lion Professional Fulfillment Reforms.
(6) Information management risks	Risks of information leaks, system paralysis or other incidents due to such unforeseen events as computer virus infections or improper system access	We have designated countermeasures to system problems in the Information Security Regulations, which are updated as needed, and implement thorough information management, including that of business secrets, based on the Basic Policy on Information Management.
(7) Compliance risks	Risks of serious legal or regulatory violations due to the unforeseen establishment or abolition of relevant laws or significant regulatory changes or tightening	We have established the Lion Group Charter for Corporate Behavior and Behavioral Guidelines, which serve as a code of conduct, regarding which we implement periodic education for all employees.
(8) Reputation risks	Risks of inappropriate comments or messages on social networking services (SNSs) or other platforms quickly spreading and generating controversy or backlash	We have established the Lion Group Social Media Policy, implement education for all employees and strive to quickly detect inappropriate information through the ongoing monitoring of SNSs and other platforms.
(9) Exchange rate risks	Risks of yen conversions upon the preparation of consolidated financial statements affecting Group management performance and financial status	We carefully monitor the exchange rates of key currencies and strive to reduce risks presented by exchange rate fluctuations through hedging and other means.
(10) Major lawsuit risks	Risks of major lawsuits resulting in unfavorable decisions for the Group	We ensure thorough legal compliance, clearly explain and discuss contract terms before forming agreements, appropriately manage intellectual property and take other steps to prevent lawsuits.
(11) Novel influenza and other infectious disease risks	Risks of the emergence and prolongation of epidemics of novel strains of influenza or other infectious diseases resulting in restrictions on the movement of people and things	We implement thorough infection prevention measures under normal conditions and have designated epidemic response measures in the “Manual on Countermeasures against Novel Influenza and Other Infectious Diseases” in addition to creating a system to enable quick and appropriate action in the event of an outbreak.
(12) Major earthquake and other natural disaster risks	Risks of human damage, such as the death or injury of employees, as well as physical damage, such as damage to manufacturing facilities or warehouses, caused by a major earthquake, major typhoon or other natural disaster	We have prepared a system for implementing organizational responses based on the “Manual on Countermeasures for Earthquake Disasters,” conduct periodic drills, and have established a Business Continuity Plan (BCP) Framework to ensure business continuity and rapid recovery in the event of a disaster in order to fulfill our product supply responsibilities.
(13) Climate change and other environmental change risks	Risks related to responding to tightening regulations, rising raw material costs, other cost increases and reputational damage due to delays in responding arising from global temperature increases caused by climate change	Working to realize a sustainable society, we have established the LION Eco Challenge 2050, a new set of environmental objectives for 2050, and are ambitiously working to realize a decarbonized, resource-circulating society.