Contributions to society through innovation and corporate value enhancement

■ Financial capital
■Manufactured capital
■ Intellectual capital
■ Social and rela-tionship capital

■ Growth of the semiconductor industry and intensification of competition in global markets and rising strategic importance
■ Response to increasing geopolitical risks and supply chain disruptions, and the creation of new business opportunities and
ecosystems
■ Expansion of the role of semiconductors in innovation and the resolution of social and environmental issues
■ Technological advances and market expansion in innovative fields both in the miniaturization and stacking of semiconductors and
expansion of applications for legacy fields
■ Expansion of applications and social need for semiconductor technologies (such as life science-related materials, functional
materials, and optical materials)
■ Risk reduction and long-term stable growth through the diversification of the business and regional portfolios and multiplication of
target markets
■ Emergence of optical semiconductor and quantum computing markets and the increasing demand for new material development

■ Increase the global market share of innovative photoresists
■ Anticipate technology trends and customer needs through long-term research and development
■ Thoroughly implement customer-oriented strategies through the trifecta of development,
manufacturing, and marketing
■ Continue to develop and strengthen commercial viability in building businesses in new fields
(high-functional films, life science-related materials, and optical materials)

■ Expand adoption of EUV photoresists and high-purity chemicals for cutting-edge nodes

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■ Record-high consolidated net sales: 23.8% increase year-over-year > Global semiconductor market
growth rate: 19.7% (Source: WSTS)

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■ Increase in power consumption due to evolution and increased use of generative AI and rising demand for new energy-efficient semiconductors
■ Increase in the customer’s need for further advances, complexity, and ultrahigh purification of semiconductor materials
■ Coexistence of supply shortage areas and oversupply areas in semiconductor markets, and the resulting complexity of silicon cycles

■ Provide materials that use world-leading microprocessing and high purity processing technology and stacking technology
■ Establish advanced technology and stable mass production systems that respond to customers as soon as possible
■ Improve detection sensitivity for metal impurities that comply with customer development roadmaps
■ Strengthen global marketing system coordination to deliver innovation that impresses customers

■ Expanded sales of semiconductor device materials for generative AI

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■ Electronics functional materials consolidated net sales: 22.5% increase year-over-year

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■ High-purity chemicals consolidated net sales: 27.1% increase year-over-year

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■ R&D efficiency: 309% (46-point increase year-over-year)

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■ Improve detection sensitivity for metal impurities that comply with customer development roadmaps

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■ Increasing importance of materials informatics (MI) and computational chemistry as a means of innovation creation
■ Creation of better development environments through conversion to databases and automation and the promotion of a digital
transformation

■ Focus on developing digital talent and enhancing digital literacy within the company
■ Accelerate further growth of the TOK Group by using digital technology
■ Promote digital transformation that flexibly responds to changing market environments
■ Create new value through DX (material development using MI and shift to smart factories)

■ Sequentially deploy advanced production systems at new factories

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■ Promote the sophistication of development work through automation of material data and
experimental result accumulation

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Pursuit of happiness by human capital

■ Financial capital
■ Intellectual capital
■ Human capital

■ Intensification of cross-border competition for recruitment of human capital in semiconductor-related industries
■ Development and strengthening of global human capital in conjunction with an increase in overseas sales
■ Increase in the importance of the happiness of employees and society (well-being)
■ Creation of better working environments through business efficiency improvement and burden reduction for workers through digital transformation
■ Improvement of work-life balance

■ Employee engagement*: Objective for 2027: Improve by 5.4 points (vs. 2024)
* Employee engagement = average of employee engagement and environment that utilizes employees
■ Provided management education and 360-degree evaluations of division heads
■ Continue to implement Self-Career Dock (SCD) training to promote career autonomy
■ Support voluntary reskilling
■ Expand welfare benefit systems
■ Reduce the prescribed working hours
■ Childcare leave user rate among male employees: Maintain at 70% or more
■ Implement measures based on different surveys
■ Continue the appropriate operation of internal reporting system
■ Enhance the internal reporting system (addition of internal reporting routes)
■ Number of internal reports and the promotion and penetration of internal reporting system and whistleblowing system/counseling section (contact information)
■ Establish a reporting desk from business partners (Supplier Hotline)

■ Employee engagement: Improve by one point (vs. 2021)

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■ Employee-friendly environment: Improve by four points (vs. 2021)

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■ Implemented management education and 360-degree evaluations of division heads

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■ Implemented and completed career (SCD) training for managers and continuing career (SCD) training for middle senior layers (ages 45-54)

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■ Implemented DX Readiness training on a volunteer basis with over 500 participants, including executives

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■ Expansion of various welfare benefit systems

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■ Childcare leave user rate among male employees: 74.3%

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■ Creation of innovation and increase of competitiveness through the leveraging of diverse human capital
■ Utilization of “know-why” accumulated by senior talent

■ Strengthen new graduate recruitment and mid-career hires
■ Continue to implement roundtable discussions with female employees for students
■ Implement panel discussions with current managers on career themes for management candidate pool
■ Organize TOK Group global grading and visualize careers achievable within the TOK Group
■ Implement unity building and philosophy penetration programs
■ Appropriately operate the retirement age extension and Elder Meister system aimed at supporting senior talent activities

■ Number of hires: 113 (new graduate recruitment: 53/mid-career hires: 60)

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■ Mid-career hires ratio: 53.1%

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■ Implemented roundtable discussions with female employees for students

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■ Percentage of female new graduates hired: 32.1%

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■ Implemented panel discussions with current managers on career themes for management candidate pool

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■ Overseas management localization rate: 60.8%

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■ Implemented roundtable discussions with locally hired managers and locally hired employees at overseas subsidiaries

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■ In addition to extension of the retirement age from 60 to 65, introduced the Elder Meister employment system for those 65 and older on an application basis (effective from January 2025)

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Evolution of sustainability governance

■ Financial capital
■ Human capital
■ Social and relationship capital

■ Increase in the potential risks and opportunities associated with business growth and the increase of stakeholders
■ Rapid changes in the business environment in the era of VUCA
■ Increase in business opportunities directly linked to sustainability issues inside and outside the company, domestically and internationally
■ Upgrades to monitoring, supervisory, and control functions to directly link business growth to the enhancement of corporate value
■ Maintenance and enhancement of social trust and brand power in communities in Japan and overseas
■ Increase in tail risks that include pandemics and extremely severe natural disasters and conflicts
■ Strengthening of risk tolerance to continue fulfilling supplier responsibilities and strengthening the response to laws and regulations (ordinances)

■ Continue to thoroughly operate the PDCA cycle to improve the effectiveness of the board of directors (assess effectiveness once a year)
■ Implement a continuous review of the decision-making authority
■ Continue activities to instill compliance
■ Implement regular reviews and dissemination of the CSR Policy Manual
■ Continue the periodic checks of laws and regulations (four times annually) and review the list of applicable laws and legal management procedures
■ Discussion and consultation by the TOK Group Risk Management Committee

■ Deepened discussions of company-wide management issues and checked the progress of resolved issues

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■ Reviewed the decision-making authority and granted appropriate authority

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■ Conducted compliance education and explained compliance in the CSR education program

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■ Revised and disseminated the CSR Policy Handbook

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■ Continued major risk reduction activities under the leadership of the newly established ERM Department

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■ Build a system to confirm employee safety status within 24 hours and confirm effectiveness through drills and other means

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■ Monitoring of human rights issues throughout the value chain (human rights due diligence)

■ Continue efforts to prevent harassment
■ Implement human rights education

■ Continue efforts to prevent harassment

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■ Implement human rights education

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Contributions to the global environment for a sustainable future

■ Financial capital
■ Natural capital

■ Cost increases for responding to carbon pricing introduction and policies, laws, and regulations
■ Cost increases for process and product temperature management, water stress, and water procurement difficulties from rising temperatures
■ Contributions to lower power consumption of semiconductors through miniaturization
■ Rising demand for power semiconductors

■ Reliable operation of a comprehensive management system for environment-related data
■ Active information disclosure: publication of the Integrated Report and environmental information disclosure on the website
■ Energy-derived CO2 emissions: 30% reduction by 2030 compared to 2019
■ Expand sales and stably supply i-Line photoresists for power semiconductors

■ Reliable operation of a comprehensive management system for environment-related data

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■ Active information disclosure: publication of the Integrated Report and environmental information disclosure on the website

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■ Energy-derived CO2 emissions: 39.2% reduction (vs. 2019)

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■ Stably supply i-Line photoresists for power semiconductors

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■ Increase in interest in the marine plastics issue
■ Expansion of a circular economy

■ Reduce water consumption by renewing the equipment
■ Domestic water usage: 15% reduction by 2030 (vs. 2019)
■ Industrial waste emission intensity: 15-point reduction by 2030 (vs. 2019)

■ Each site formulated and implemented water usage reduction plans

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■ Domestic water consumption: Increased by 19% compared with 2019

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■ Industrial waste generation (per base unit): Increased by 13 points compared with 2019

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■ Tighter emissions regulations in major developed countries
■ Further risk reduction by satisfying standards stricter than the regulatory requirements

■ Excess of operational thresholds: None
■ Managed CFC leakage volume through the proper management of equipment
■ Examined the introduction of non-CFC equipment when renewing facilities
■ Environmental accidents: No major accidents

■ Excess of operational thresholds: None

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■ Managed CFC leakage volume through the proper management of equipment

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■ Examined the introduction of non-CFC equipment when renewing facilities

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■ Environmental accidents: No major accidents

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■ Increased risk of global biodiversity loss
■ Risk reduction through initiatives that address biodiversity and water resources as a single issue

■ Implement ongoing employee training
■ Participate in forest conservation activities

■ Implemented CSR training for all employees and all directors and auditors: 100% participation rate

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■ Participated in environmental conservation activities at each site

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Development of the semiconductor ecosystem

■ Financial capital
■ Natural capital
■ Social and relationship capital

■ Tighter chemical substance control regulations in major developed countries
■ Increased product value through comprehensive action prior to legislation before and during the early stages of material development

■ Consider the modification and expansion of a chemical substance information management system
■ PCB waste (low concentration): Formulate and promote an equipment renewal plan based on the roadmap toward the deadline for disposal in 2027

■ Established chemical substance information management system

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■ Formulate and promote an equipment renewal plan based on the roadmap toward the deadline of the disposal of PCB waste (low concentration) in 2027

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■ Increased risks of accidents due to the increase in production sites, production volume, and operating hours
■ Escalation of human rights risks resulting from the expansion of the supply chain and increases in the importance of lifecycle assessments
■ Further risk reduction through RBA audits and ISO 45001 certification

■ Stable supply of high-quality products
■ Establishment of occupational safety culture
■ Promotion of effective occupational safety activities
■ Implementation of effective emergency response training that functions during emergencies, reducing unexpected situations as much as possible
■ Workplace environment creation in compliance with the RBA Code of Conduct
■ Continuation of workplace safety training and hazard experience education

■ Implemented 5S activities based on common procedures for 5S implementation toward establishing autonomous 5S activities

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■ Confirmed progress management and the effectiveness of safety measures based on safety inspection results from all sites, including overseas, toward eliminating occupational accident risks

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■ Implemented response training with different assumed scenarios for different emergencies (environmental accidents that could not be responded to as assumed: 1)

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■ Achieved zero accidents resulting in lost workdays
Lost workdays accidents: 5, without lost workdays accidents: 7

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