Objectives & Achievements

Material issues	ESG fields	Key initiatives	Risks and opportunities	Issues, qualitative objectives, and KPIs for FY 2023/12	Main achievements, progress, and KPI in FY 2023/12	Evaluation	Issues, qualitative objectives, and KPIs for FY 2024/12
Contribution to innovation and the creation of social value	Society (S)	Increase the global market shares of cutting-edge photoresists	■ Intensification of global competition in the semiconductor industry and increased strategic importance ■ Response to geopolitical risks and supply chain disruptions, and creation of new business opportunities ■ Expansion of the role of semiconductors in innovation and the resolution of social issues ■ Increase in power consumption due to the spread of generative Al and rising demand for new energy-efficient semiconductors ■ Increasingly complex silicon cycle ■ Technological advances and market expansion in cutting-edge fields, both in the miniaturization and in the 3D packaging of semiconductors; expansion of applications for older generations (legacy fields)	■ Provide technologies, quality, environment, and added value that contribute to the value creation process of customers ■ Continue development and improvement from a thoroughly customer-oriented perspective ■ Ambitiously develop the technologies required for 5G, IoT, and other innovations	■ Consolidated net sales: Decreased by 7.5% year over year due to a market downturn (<Semiconductor market: 8.2% decrease year over year) Source: World Semiconductor Trade Statistics (WSTS) ■ Suppressed the decrease in sales by improving market share in advanced photoresists	○	■ Provide technologies, quality, environment, and added value that contribute to the value creation process of customers ■ Continue development and improvement from a thoroughly customeroriented perspective ■ Ambitiously develop the technologies required for 5G, IoT, and other innovations
		Acquire and create core technologies for electronic materials and new 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 diversifi- cation of the business and regional portfolios and multiplication of the target markets	■ Continue to develop and strengthen commercial viability in new business fields (high-functional films, life science-related materials, and optical materials) ■ Expand collaborative projects with other companies and groups	■ Number of collaborative projects promoted with other companies and groups: Increased by approximately 14% year over year	○	■ Continue to develop and strengthen commercial viability in new business fields (high-functional films, life science-related materials, and optical materials) ■ Expand collaborative projects with other companies and groups
		Secure stable supplies of high-quality products and establish an optimal production system for the Group	■ Increase in the need for further advances, complexity, and ultra- high purification of semiconductor materials ■ Mixed presence of fields with a tight supply and fields with an oversupply in the semiconductor market	■ Improve detection sensitivity for metal impurities in compliance with customer development roadmaps ■ Create new value through DX (material development utilizing materials informatics and shift to smart factories)	■ Improve detection sensitivity for metal impurities that comply with customer development roadmaps ■ Promote sophistication of development work through automation of material data and experimental result accumulation ■ Sequentially deploy advanced production systems at new factories	○	■ Improve detection sensitivity for metal impurities that comply with customer development roadmaps ■ Create new value through DX (material development utilizing materials informatics / shift to smart factories)
Pursuit of happiness by human capital		Improve employee engagement and promote people-oriented management	■ Intensification of cross-border competition for recruitment of human capital in semiconductor-related industries ■ Global human capital development in conjunction with the increase in the overseas sales ratio ■ Increase in the importance of the happiness of employees and society (well-being)	[2024 targets] ■ Employee engagement: Improve by three points (vs. 2021) ■ Employee-friendly environment: Improve by seven points (vs. 2021) ■ Continue promoting a good work-life balance ■ Childcare leave user rate among male employees: Maintain at 30% or more ■ Flex time expanded to more departments and work from home introduced as an official system ■ Introduce a new personnel system and appropriately establish and operate the system ■ Continue to implement training for department heads ■ Promote health and productivity management	■ Employee engagement: Declined by two points (vs. 2021) Employee-friendly environment: Improved by two points (vs. 2021) ■ Ratio of paid leave taken: 87.1%*¹ ■ Increased childcare leave taken (male employees: 12 in 2022 to 24 in 2023 with the user rate increasing to 66.7%) ■ Introduced new award system TOK Shinka Award ■ Considered the introduction of retirement age extension and internal job posting system ■ Introduced e-learning system allowing Web-based training according to individual needs ■ Provided management education and 360-degree evaluations of division heads ■ Conducted career training for managers and planned career training for middle-senior layer (45–54 years old) ■ Continued implementation of health management promotion activities	△	■ Employee engagement: Achieve objective for 2024: Improve by three points (vs. 2021) ■ Employee-friendly environment: Achieve objective for 2024: Improve by seven points (vs. 2021) ■ Maintain childcare leave user rate among male employees ■ Introduction of retirement age extension system: Aiming for introduction by January 2025 ■ Introduction of internal job posting system: Aiming for introduction by January 2025
		Diversity and inclusion	■ Creation of innovation and increase in competitiveness by leveraging diverse human capital ■ Aging of employees and use of “know-why" of senior human capital	■ Continue to promote corporate activities that leverage diversity ■ Promote human capital exchanges within the Group	■ Measured job value in positions across the entire group ■ Ratio of non-Japanese employees: 24.3% ■ Ratio of local hires in overseas management positions (consolidated basis): 56.3%	△	■ Establish a foundation to promote human capital exchanges within the Group ■ Design systems to promote human capital exchanges based on job value
		Diversity and inclusion		■ Continue to promote women in the workplace ■ Implement training for female employees pursuing management positions ■ Ratio of women in senior and middle management: Aim to increase to twice the level by 2030 (vs. 2020)	■ Held two career roundtable discussions for female employees targeting students in August ■ Ratio of women in senior and middle management: 4.5% (vs. 3.2% in 2020) ^１ ■ Ratio of female new graduates hired: 22.4%^１	△	■ Plan to hold panel discussions and seminars to enhance the attractiveness of managerial positions for potential managerial candidates ■ Continue career path seminars for female employees targeting students
		Respect for human rights and fair working conditions	■ Constraints on human mobility due to rising geopolitical risks	■ Continue efforts to prevent harassment ■ Implement human rights education	■ Implement anti-harassment and human rights education	○	■ Continue efforts to prevent harassment ■ Implement human rights education
Establishment of resilient organization	Governance (G)	Build a sound, efficient management foundation	■ Increase in the potential risks involved in business growth and the increase of stakeholders ■ Rapid changes in the business environment in the era of VUCA	■ Streamline operation of the Information Management Committee ■ Strengthen cybersecurity measures	■ Reviewed information security standards in line with the introduction of new technologies and new systems, such as AI ■ Considered introducing security systems to strengthen cybersecurity and conduct desktop drills assuming actual cyber incidents	○	■ Continue strengthening of cybersecurity measures and review internal leakage countermeasures
		Strengthen the effectiveness of governance	■ Increase in sustainability requirements in governance ■ Upgrading of supervisory and control functions to directly link business growth to the enhancement of corporate value	■ Continue to thoroughly operate the PDCA cycle to improve the effectiveness of the Board of Directors (assess effectiveness once a year) ■ Enhance internal control functions ■ Continue to check the approval authority and approval request operations ■ Establish new CSR and sustainability governance structures	■ Shifted to a company with an Audit and Supervisory Committee ■ Deepened discussions on company-wide managerial requirements ■ Checked progress of resolved matters ■ Checked the approval authority and approval request operations	○	■ Continue to thoroughly implement the PDCA cycle to improve the effectiveness of the Board of Directors (assess effectiveness once a year)
		Strengthen the effectiveness of governance		■ Review the manufacturing transfer process and the OEM process ■ Establish a risk transfer analysis process	* From May 1, 2024, began establishment and operation of OEM flow including overseas subsidiaries ■ Collected information and considered risk management systems to unify and visualize risk management	○	■ Identify and grasp group-wide issues related to governance, risk, and compliance ■ Develop a rational and effective risk management system by reviewing risk management methods in parallel with consideration of the introduction of a risk management system
		Compliance	■ More stringent laws and regulations (ordinances) based on global initiatives for sustainability and decarbonization ■ Maintenance and enhancement of social trust and brand power in local communities overseas	■ Continue activities to instill compliance ■ Continue periodic checks of laws and regulations (four times annually) and review the list of applicable laws and legal management procedures	■ Conducted compliance education and explain compliance in CSR education ■ Raiseed awareness of compliance (caution regarding drinking alcohol and reporting when receiving entertainment or gifts) ■ Reviseed and disseminated the CSR Policy Handbook ■ Performed checks on compliance with laws and regulations (four times annually), and reviewed the list of applicable laws and legal management procedures	○	■ Continue activities to instill compliance ■ Regular review and dissemination of CSR Policy Handbook ■ Continue periodic checks of laws and regulations (four times annually) and review the list of applicable laws and legal management procedures
		Compliance		■ Continue appropriate operation of the internal reporting system ■ Further enhance and disseminate the whistleblowing system	■ Reports to the whistleblowing system: 4 Consultations with other counseling sections: 19 ■ Started operation of internal reporting procedure manual, built storage system for internal reporting response records ■ Provided education for whistleblowing response personnel and explain the internal reporting system through in-house education	○	■ Continue the appropriate operation of the internal reporting system ■ Further enhance the internal reporting system and promote awareness and penetration of the internal reporting system and whistleblowing system
		Risk management	■ Increase in tail risks that include pandemics and extremely severe natural disasters ■ Strengthening of risk resilience to continuously fulfill the supplier's responsibility	■ Reduce risks previously and newly identified through risk assessments ■ Continue to hold drills to increase awareness with the aim of maintaining a high response rate ■ Conduct desktop drills anticipating actual damage	■ Extracted 13 risks that include the technological innovation risk as major risks for the TOK Group and respond intensively ■ Discussed at the Board of Directors for creating a specialized department to control company-wide risks ■ Conducted regular drills and achieved high response rates ■ Conducted desktop drills assuming earthquake fires at the Utsunomiya plant	○	■Continuation of major risk reduction activities under the leadership of the newly established ERM Department ■ Build a system to confirm employee safety status within 24 hours and confirm effectiveness through drills and other means ■ Expand desktop drills assuming actual damage considering risks specific to each site

*1 Unconsolidated

Material issues	ESG field	Key initiatives	Risks and opportunities	Issues, qualitative objectives, and KPIs for FY 2023/12		Main achievements, progress, and KPI in FY 2023/12	Evaluation	Issues, qualitative objectives, and KPIs for FY 2024/12
Global environmental conservation considering future generations	Environment (E)	Initiatives toward achieving carbon neutrality	■ Cost increase for responding to carbon pricing introduction and policies/laws and regulations ■ Cost increase for process/product temperature management, water stress, and water procurement difficulties due to rising temperatures ■ Contribution to lower power consumption of semiconductors through miniaturization ■ Rising demand for power semiconductors	Develop, manufacture, and market environment- friendly products	■ Stably supply i-Line photoresists for power semiconductors ■ Increase sales of plasma ashing systems for power semiconductors	■ Stably supply i-Line photoresists for power semiconductors *Regarding plasma ashing systems for power semiconductors, the related business was transferred to Aimechatec Co., Ltd., in March 2023	○	■ Stably supply and increase sales of i-Line photoresists for power semiconductors
				Proactive response to new environmental regulations	■ Start full-scale operation of a comprehensive management system for environment-related data	■ Start full-scale operation of a comprehensive management system for environment-related data	○	■ Reliable operation of a comprehensive management system for environment-related data
				Proactive disclosure of environmental information	■ Proactive information disclosure through the Integrated Report and on the website	■ Proactive information disclosure Publish the Integrated Report and disclose environmental information on the website	○	■ Proactive information disclosure Publish the Integrated Report and disclose environmental information on the website
				Improve energy-related CO2 emissions per base unit* [Medium-term target] Reduce energyrelated CO2 emissions (per base unit) by 15 points by 2030 compared with 2019	■ Reduce energy-related CO2 emissions (per base unit) by 15 points by 2030 compared to 2019	■ Reduced energy-related CO2 emissions (per base unit) by 72 points compared with 2019	○	■ [New interim target] 30% reduction compared with 2019 (Group’s emissions) by 2030
					■ Reduce energy-related CO2 emissions (per base unit) by 1 point compared with the previous year	■ Reduced energy-related CO2 emissions (per base unit) by 35 points compared with 2022	○	■ [New interim target] 30% reduction compared with 2019 (Group’s emissions) by 2030
				Improve energy consumption per base unit* [Medium-term target] Reduce energy consumption (per base unit) by 15 points by 2030 compared with 2019	■ Reduce energy consumption (per base unit) by 15 points by 2030 compared to 2019	■ Reduced energy consumption (per base unit) by 15 points compared to 2019	○	■ Reduce energy consumption (per base unit) by 15 points by 2030 compared with 2019
					■ Reduce energy consumption (per base unit) by 1 point compared with the previous year ■ Measures against the aging of equipment and the introduction of new energy conservation systems	■ Increased energy consumption (per base unit) by 6 points compared with 2022	×	■ Reduce energy consumption (per base unit) by 1 point compared with the previous year ■ Measures against the aging of equipment and the introduction of new energy conservation systems
				Improve energy consumption per base unit in distribution*	■ Reduce energy consumption (per base unit) by 1 point or more compared with the previous year ■ Achieve efficient transportation by improving the loading rates of vehicles	■ Increased energy consumption (per base unit) by 4 points compared with 2022	△	■ Reduce energy consumption (per base unit) by 1 point or more compared with the previous year ■ Achieve efficient transportation by improving the loading rates of vehicles and visualizing transportation
				Measures to prevent global warming at overseas manufacturing sites	■ Promote production activities considering energy conservation	■ Renewed equipment considering energy conservation	○	■ Promote production activities considering energy conservation
		Promote resource recycling	■ Increase in interest in the marine plastics issue ■ Expansion of a circular economy	Initiatives to address water risk*	■ Reduce water consumption by renewing equipment ■ Promote the cyclic use of water	■ Propose and implemented plans at each site Example: Full-scale operation of pure water production building (Koriyama)/Introduction of new circulation cooling equipment (Utsunomiya)/Improvement of water circulation rate of existing cooling equipment (Aso)	△	■ Reduce water consumption by renewing equipment ■ Promote the cyclic use of water
				Initiatives to address water risk*	■ Reduce water consumption in Japan by 15% by 2030 compared with 2019 ■ Continue measures against flooding risks	■ Water consumption in Japan: Increased by 7.1% compared with 2019*Decreased by 12.3%(year over year) ■ Continue measures against flood risks	×	■Reduce water consumption in Japan by 15% by 2030 compared with 2019 ■ Continue measures against flooding risks
				Reduce industrial waste* [Medium-term target] Reduce (per base unit) by 15 points by 2030 compared with 2019	■ Reduce (per base unit) by 15 points by 2030 compared with 2019	■ Industrial waste generation (per base unit): Increased by 19 points compared with 2019	×	■ Reduce (per base unit) by 15 points by 2030 compared with 2019
					■ Industrial waste disposed in landfills: Less than 1%, achieving zero emissions	■ Industrial waste disposed in landfills: Less than 1%, achieving zero emissions	○	■ Industrial waste disposed in landfills: Less than 1%, achieving zero emissions
		Conserve air, water, and soil environments	■ Tighter emissions regulations in major developed countries ■ Further risk reduction by satisfying standards stricter than the regulatory requirements	Prevent air, water, and soil pollution	■ Excess of operational thresholds: None	■ Excess of operational thresholds: None	○	■ Excess of operational thresholds: None
				Countermeasures against ozone-depleting substances	■ Manage CFC leakage volume through the proper management of equipment ■ Examine the introduction of non-CFC equipment when renewing facilities	■ Manage CFC leakage volume through the proper management of equipment ■ Examine the introduction of non-CFC equipment when renewing facilities	○	■ Manage CFC leakage volume through the proper management of equipment ■ Examine the introduction of non-CFC equipment when renewing facilities
				Eradicate environmental accidents that affect external parties	■ Environmental accidents: No major accidents	■ Environmental accidents: No major accidents	○	■ Environmental accidents: No major accidents
		Preserve biodiversity	■ Increased risk of global biodiversity loss ■ Risk reduction through initiatives addressing biodiversity and water resources as a single issue	Improve awareness of biodiversity based on TOK Biodiversity Protection Declaration and encourage participation in related activities	■ Implement ongoing employee training ■ Continue activities to preserve forests	■ Implemented CSR training for employees as well as all directors and auditors (100% participation rate) ■ Dispatched employees to participate in activities at the Kanagawa Trust Midori Foundation	○	■ Implement ongoing employee training ■ Continue activities to preserve forests
Supply chain sustainability		Precisely address laws and regulations	■ Tighter chemical substance control regulations in major developed countries ■ Increased product value by taking thorough action prior to legislation from before and during the early stages of material development	Carry out appropriate and reliable management of chemical substances	■Establish chemical substance information management system ■Strengthen chemical substance management system of the TOK Group	■Consideration of modification and expansion of a chemical substance information management system ■ Revisions and started of operationof Chemical Management Standards	○	■ Established chemical substance information management system ■ Strengthen chemical substance management system of the TOK Group
		Precisely address laws and regulations		Properly comply with the PCB Special Measures Act	■ Formulate and promote equipment renewal plan based on the roadmap toward the deadline of the disposal of PCB waste (low concentration) in 2027	■ Formulated equipment renewal plan based on the roadmap toward the deadline of the disposal of PCB waste (low concentration) in 2027	○	■ Formulate and promote equipment renewal plan based on the roadmap toward the deadline of the disposal of PCB waste (low concentration) in 2027
	Social (S)	Occupational health and safety/ Reduction of risks posed by chemical substances	■ Increased risks of accidents due to the increase in production sites, production volume, and operating hours ■ Escalating human rights risks resulting from expanding the supply chain and increasing the importance of lifecycle assessment ■ Further risk reduction through RBA audits and ISO 45001 certification	Foster a safety culture	■ Completed the acquisition of ISO 45001 certification at all sites in Japan ■ Setting 5S activities in place	■ Completed the acquisition of ISO 45001 certification at all sites in Japan ■ Implemented 5S activities at each site	○
							○	■ Establish autonomous 5S activities
					■ Strengthening risk management with safety first	■ Conducted safety inspections at all sites including overseas	△	■ Eliminate workplace accident occurrence risks
					■ Strengthen emergency response drills	■ Conducted emergency response drills with changed scenario assumptions	△	■ Strengthen emergency response drills for various emergencies
					■ Achieved zero accidents resulting in lost workdays	■ One accident with lost workdays and 13 accidents without lost workdays	X	■ Achieved zero accidents resulting in lost workdays

* Unconsolidated basis and consolidated subsidiaries in Japan