TOKYO OHKA KOGYO CO., LTD. (TOK) provides chemical products, such as photoresist, and equipment for semiconductors and displays.

Environmental Activities

Promotion of recycling, managing chemical substances,
and approaches toward energy saving.

Environmental Activities

mprove Energy Consumption per Base Unit and CO2
Emissions

Basic Concept

The TOK Group quantitatively measures the environmental impact of its value chain, and works to reduce environmental burden with a full understanding of the impact our production activities have on the environment.
We aim to achieve sustainable development alongside society through the development of products that help conserve resources and energy.

Improve Energy Consumption per Base Unit and CO2 Emissions

We conduct rigorous operational management of equipment and make improvements to achieve more efficient operations. In addition, when updating aging equipment, we look at optimizing the overall configuration, actively consider and install equipment with better energy efficiency.

In 2019, energy consumption increased 6 points year on year. The increase reflects a higher rate of ventilation than other buildings at the new R&D Building in the Sagami Operation Center because it handles hazardous substances, and the new construction of a warehouse at the Ebina Logistics Center. Efforts to reduce energy consumption included renewal of aging air conditioning equipment and boilers at our sites, and improved operation of heat source equipment.

Energy consumption per base unit decreased more than 1 point compared with the previous year, reflecting a significant increase in the total floor area used to calculate energy con­sumption per base unit following the rebuilding of the Sagami Operation Center.

Energy-related CO2 emissions per base unit decreased by 4 points compared with the previous year, even as energy consumption increased. This reflects efforts such as reviewing the operation of the power generator at the Koriyama Plant and the switching of boiler fuel to natural gas at the Gotemba Plant in 2018. In 2019, the final fiscal year for our medium-term targets, we achieved a 16 point reduction in energy consump­tion per base unit compared with 2009, achieving our target*1. However, we reduced energy-related CO2 emissions per base unit by only 6 points compared with 2009, which did not reach the target*2.

The Company has set a medium- to long-term target of reducing energy consumption and CO2 emissions (per base unit) by 11 points (1 point per year) compared with 2019 from 2020 to 2030. We will continue working to achieve our target.

*1 Reduce energy consumption (per base unit) by 10 points by 2019 compared with 2009 (reduction of 1 point annually)

*2 Reduce energy-related CO2 emissions (per base unit) by 10 points by 2019 compared with 2009 (reduction of 1 point annually)

Improve Energy Consumption in Distribution

The Company agrees with the White Logistics Movement and is taking steps to realize sustainable logistics, while working with partner logistics companies to improve energy consumption. We are taking proactive measures such as using lighter product containers and packaging materials, mixed loading of raw materials, intermediates and finished products on transportation trucks to reduce the overall number of trucks, and to improve loading efficiency. In addition, we have been actively encouraging efforts to have our own delivery trucks pick up products from suppliers that lie on our regular routes.

In 2019, we made further progress with activities designed to reduce energy in procurement logistics, internal logistics, and sales logistics, such as concentrating stored products to reduce the distances travelled by trucks. As a result, we reduced fuel consumption 4% compared with the previous year, while transportation ton-kilometers remained at the same level.

Participation in White Logistics Promotion Movement (in Japanese)

Measures to Prevent Global Warming at Overseas Manufacturing Sites

The overseas ratio of energy consumption continued its increasing trend, owing to expansion in production facilities and growth in items produced at overseas sites. However, in 2019, the ratio decreased from the previous year as a result of an increase in energy consumption in Japan and a review of equip­ment operations. Going forward, TOK will continue to engage in production activities with a focus on energy conservation through a PDCA cycle for environmental management systems.

Environmental Accounting*

TOK has been using environmental accounting since 2000. This allows the Company to conduct environmental management while monitoring the expenses and effects of environmental programs. In 2019, environmental conservation expenses totaled ¥659 million, mainly for the prevention of pollution and recycling of resources.

* Environmental accounting: A system for understanding environmental conservation related investments made by, and expenses incurred by, businesses and other organizations, as well as the effects of such investments, in quantitative terms (currency or physical quantity) and communicating such information to stakeholders

(Millions of yen)

※January 2019 to December 2019

Economic Benefits Associated with Environmental Conservation Measures

(Millions of yen)

* January 2019 to December 2019
*1 Scope of environmental accounting covers production facilities in Japan and distribution centers, excluding the headquarters and marketing offices. Reference used is the Environmental Accounting Guidelines 2005, published by the Ministry of the Environment.

*2 Amounts of less than one million yen have been rounded off.

Emissions of Greenhouse Gases

As climate change has become more serious in recent years, companies are expected to measure their greenhouse gas emissions from not only their own properties, but also across their entire value chain. The TOK Group measures and calculates its greenhouse gas emissions based on the Ministry of the Environment’s Basic Guidelines on Accounting for Greenhouse Gas Emissions throughout the Supply Chain within the context of emissions from business activities (Scope 1, Scope 2) and indirect emissions from non-business activities (Scope 3). TOK will advance initiatives toward the realization of a sustainable society, identifying issues throughout its value chain where its corporate activities can have an impact.

Protection of natural resources

Initiatives to Address Water Risk

Amid increasing public attention to the social issue of water resources, the Group’s products and manufacturing processes use water as an indispensable resource. We therefore make a concerted effort to minimize the amount of water consumed by production activities and to maintain and improve the quality of wastewater. We aim to contribute more in this regard through business activities that consider the global water risk.

Water Usage Volume

Water usage volume changes when manufacturing processes and output change. TOK works to reduce usage by constantly monitoring the state of industrial water and city water usage, and reviewing related equipment. In 2019, water usage volume in Japan was about the same level with the previous year at 366,000m3. Overseas, we managed to reduce water usage volume by 196,000m³ year on year to 343,000m³ by reviewing our production methods.

Water Risk Management

Water risk is widely recognized as a serious worldwide risk, always ranking high among the largest risks since 2012 in the Global Risks Report published by the World Economic Forum. To better understand water usage volume at all of its sites around the world, the TOK Group has clarified risks at each stage of water supply, raw materials supply, manufacturing processes, and wastewater emissions from plants.

Set a Medium- to Long-Term Target

The Company has aggressively pursued measures to reduce water risk since 2018. In 2019, we conducted a status check of each site and revised wastewater routes, etc., while examining countermeasures for the future, such as activities for reducing the pollution risk from pipes and equipment, etc., and water use management methods. Based on the results, we set a medium- to long-term target for 2030. For 2020, we set a new target of reducing water usage by 3% compared with 2017, and we are now working to achieve it through activities to reduce usage.

TOK Group's "Water Risk Map"

Air, Water and Soil/Biodiversity

Prevent Air, Water and Soil Pollution

· Reducing emissions of air-polluting substances

TOK has been converting its boilers to use natural gas to reduce emission of sulfur oxide (SOx) and nitrogen oxide (NOx), which are major contributors to air pollution. Boilers at all plants now use low-emission natural gas as fuel, with the exception of plants without access to city gas supplies. In 2019, SOx emissions related to business activities decreased by 0.5 tons year on year. NOx emissions decreased by 3.7 tons year on year, mainly due to improvements in the method of operation of the electric power generator at the Koriyama Plant.

· Monitoring soil pollution

The TOK Group manages the risk of soil and underground water pollution with the recognition of concerns that such pollution could threaten the safety and health of local residents and employees. In the event that surveys discover soil or underground water pollution, the Company will rapidly disclose information and take remedial actions to ensure the health and safety of local residents.

In 2019, a leakage accident occurred at the Koriyama Plant (see "Integrated Report 2019" page 99). TOK handled the matter appropriately, reporting to the relevant government agencies the status of pollution and measures being taken to prevent the pollution from spreading. To prevent soil and underground water pollution, etc. from spreading to nearby areas, we will continue activities to avoid pollution risk by properly conducting soil surveys in accordance with laws and regulations.

· Reducing emissions of water-polluting substances

TOK has set its own management standards for treating wastewater from its sites that are stricter than regulations in laws and local ordinances for purifying wastewater, such as activated sludge processing, at its process wastewater treatment facilities. Only water that satisfies standards for cleanliness is released into the public water system.

The Company also periodically evaluates water quality for compliance with its own standards as well as laws and regulations. In 2019, there were zero incidents where water quality did not meet its own standards or required values set by laws and regulations. TOK will continue its efforts to reduce emissions by maintaining and managing its process wastewa­ter treatment facilities so water can be released after satisfying applicable standards.

BOD emissions in the water discharged into public waters in 2019 were approximately 0.3 tons, while COD emissions were 0.4 tons.

SOx/NOx/BOD/COD Emissions

Countermeasures against Ozone-Depleting Substances

The TOK Group uses ozone-depleting chlorofluorocarbons, such as CFC-11 and CFC-12, as coolants for refrigerators and freezers. The entire Group is working to reduce equipment that uses these, and to switch to alternative substances and green coolants (non-CFC). The revised Act on Rational Use and Proper Management of Fluorocarbons mandates regular inspections and reporting leakage volume, and TOK is updating its environ­mental system for the proper management, filling, and disposal of CFCs. As a result of taking appropriate measures, TOK’s estimated leakage of CFCs in 2019 was approximately 216t- CO2 based on the Act. TOK will continue to conduct group-wide inspections such as periodically replacing fire extinguishing equipment that uses ozone-depleting substances with the aim of further strengthening management to prevent any CFC leakage from occurring.

* Data collection period: April 2019 to March 2020

Comply with PRTR Law

Under the Japanese Pollutant Release and Transfer Register (PRTR) Law, companies are obligated to manage and report to the government the production, release and transfer of designated chemical substances. To accurately calculate and report these figures, TOK relies on its chemicals and PRTR management system.

Of the Class I Designated Chemical Substances, a list of 462 substances defined by the PRTR Law, TOK handled 41 substances (a total of 1,120 tons) in 2019, and the Company estimates 3 tons were released into the atmosphere and public water systems. TOK works to measure emissions of VOCs and harmful air-polluting substances through PRTR surveys with the Japan Chemical Industry Association, of which it is a member.

* Data collection period: April 2019 to March 2020

_{*The date on Distribution Control Center includes date on all product stock points.
*Carbon dioxide emission factor is continue to use the emission factor for fiscal 2009.
*General administrative waste:Unneeded items (office refuse) other than industrial waste generated by offices
*General Industerial waste:Industrial waste that does not require special controls (Industrial waste is defined as waste produced in conjunction with business activities and includes cinders, sludge, used oils, used acids, used alkalines, used plastics and certain other materials.)
*Specially controlled industrial waste:Industrial waste that requires special management due to its explosivity, toxicity, infectious properties or other hazards}

Preserve Biodiversity

The TOK Biodiversity Protection Declaration guides the TOK Group’s activities to preserve biodiversity. In 2019, 731 employ­ees participated in biodiversity training and seven employees were dispatched to help with afforestation projects alongside local residents through theKanagawa Trust Midori Foundation. We will continue to conduct these basic activities to preserve biodiversity with the intention of starting a ripple effect inside and outside the Company, spreading them throughout society.

TOK Biodiversity Protection Declaration

Regarding Soil Pollution at the Koriyama Plant

In June 2019, we discovered soil pollution caused by leakage of 1,4-dioxane at the Koriyama Plant. We responded promptly and appropriately, making a report to the Koriyama City Environmental Conservation Center and holding several consul­tations with it, then repairing our equipment and so forth. The polluted soil has been removed and disposed of, and replaced with non-polluted soil. Furthermore, pollution of underground water, which had been a concern, was contained within the site of the plant. We pumped this water up to the surface to treat it and installed an observation well to undertake regular monitoring of the status of pollution. We will continue to vigilantly monitor the underground water and cooperate closely with the government to prevent the pollution from spreading while completing the clean-up process.

Management of industrial waste

We conduct 3R activities (reduce, reuse, recycle) for effective use of limited natural resources. By
restricting the volume of waste generated, thoroughly sorting the waste by type and increasing the volume that’s recycled, we are working to make more effective use of resources. We strive to maintain zero emissions* by working to reduce landfill disposal volume by processing waste products through combustion or crushing, called intermediate treatment, and through stabilization and volume reduction initiatives.

Reduce Industrial Waste Emissions

In 2016, TOK set a new medium-term target for reducing indus­trial waste (per base unit) by 5 points by 2020 compared with 2015 (reduction of 1 point annually). With this target in mind, TOK has been advancing activities to reduce various industrial waste, such as by refining and reusing process effluents, internal effluent processing, internal recovery, and converting waste into items of value.

In 2019, our efforts to reuse process effluents by refining them and to proactively convert waste into items of value succeeded in reducing our waste emissions per base unit by 9 points compared with the previous year. This represented a 26 point reduction compared with 2015, the base year of our Medium-Term Plan.

Achieved Zero Emissions

In 2019, industrial waste subject to landfill disposal after intermediate treatment stood at less than 1% of total waste, so we have achieved zero emissions for six consecutive years.

Techniques for Recycling Organic Solvent Effluents

TOK makes concerted efforts to effectively use waste emitted from its own plants. Waste oil is sorted by each type of recycla­ble solvent, a rating for impurities is assigned, and is analyzed whenever it is emitted. By strengthening management in this way, we are able to reuse waste oil that was previously treated as industrial waste and disposed. Waste oil with a mixture of organic solvents is blended with other waste oil of differing calories and water content to create combustion improvers. In addition, at our Utsunomiya Plant, we recovered highly purified solvents from our distillation equipment, and reused only the portion of them that meets our own rigorous standards in the production process to recycle them. TOK will continue efforts to reduce emissions of industrial waste by effectively utilizing resources.