TOYOBO GROUP SUSTAINABILITY REPORT 2023

SUSTAINABLE VISION 2030 >We launched our SUSTAINABLE
VISION 2030 in May 2022

• Corporate Philosophy Framework TOYOBO PWs• Dialogue with Stakeholders• TOYO BO Group Charter of Corporate Behavior• Dialogue with ESG I nvestors• Sustainable Vision 2030

• External Evaluat ion (ESG Factors)• Sustainability Management• Our Value Creation Process• Materiality• TCFD

Activity Report• Management Approach• Respect for Human Rights• Corporate Governance• Eco-Conscious Products• Safety, Disaster Prevention• Complian ce• Climate Change• Quality• Risk Management• Plastic Resource Circulation• Supply Chain Management• Tax Affairs Policy• Waste Reduction• Human Resource Management• Wat er Resources• Diversity & Inclusion• Chemical Substance Management a• Healt h and Productivity Managemend Reducing Environmental Im pactnt

• Biodiversity• Social Cont ribution

ESG Related Data

ESG Performance Data➔(

Report Library

External Assurance

T

(

➔

GR! Content Index

Editorial Policy

➔)
➔

(

TCFD Index

TOYOBO GROUP SUSTAINABILITY REPORT 2023
Contents
Message from the President
TOYOBO Group's Sustainability
Corporate Philosophy Framework

02

115

Respect for Human Rights

117

04

Safety, Disaster Prevention

124

05

Quality130

Supply Chain Management

136

Human Resource Management

143

Diversity & Inclusion

150

Promotion of Women's
Participation and Advancement

154

Health and Productivity
Management

158

Social Contribution

163

TOYOBO Group Charter of Corporate Behavior 07
Sustainable Vision 2030

09

Sustainability Management

14

Our Value Creation Process

24

Materiality

26

Contribution through Our Business

30

Contributing to Solving Social Issues
through Business Operations

32

Major Business Growth Strategies

42

Communication with Stakeholders

55

Dialogue with Stakeholders

56

Dialogue with ESG Investors

61

External Evaluation (ESG Factors)

62

Activity Report
Environment

SocialGovernance171

Corporate Governance

172

Compliance

186

Risk Management

192

Tax Aﬀairs Policy

200

ESG Related Data
ESG Performance Data

202
202

64

Environment

Management Approach

66

Social205

Eco-Conscious Products

73

Governance208

Climate Change

78

Plastic Resource Circulation

88

Waste Reduction

98

Water Resources

100

Chemical Substance Management andReducing Environmental Impact

104

Biodiversity

109

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GRI Content Index

209

TCFD Index

217

External Assurance

219

Editorial Policy

221

Message from the President~ Aiming to be a sustainable company that contributes to the sust ainability of society~To Our Stakeholders,
Our company celebrated 140 years of business in May 2022. I would li ke to express my sincere
g ratitude to all of our stakeholders for t heir understand ing and support over the years since
our founding.
With our corporate philosophy of '')un-Ri-Soku-YU' (adhering to reason leads to prosperity) as
its starting point, our Group's vision is to become a group t hat continues to create t hesolutions needed by people and the planet with our materials and science. In May 2022, weformulated our Sustainable Vision 2030, which aims to achieve sustainable growth. This
sustainable growth means that we contribute to the sustainability of t he planet and society
through our products, services and technolog ies, and thereby achieve sustainable g rowth forourselves.
In the recent global situation, geopolitical tensions triggered by Russia's invasion of Ukraine,
the prolonged impact of COVID-1 9, and the intensification and increase in the freq uency ofnatural d isasters due to climate cha nge, have all brought the sustainability of society into
further question. In addition, there is a growing demand for greenhouse gas reduction and various initiatives to achieve carbon neutrality
are accelerating around the world, wh ile there is an urgent need to respect human rights in o rder to eliminate huma n right s violations
such as forced labor and child labor.
To date, our group has taken numerous challenges and strived to provide products and services t hat respond to changes in t he social
environment surrounding us with the understand ing and support of our stakeholders. Now, at t his time, I am strong ly convinced that ourm ission is to address these pressing issues and contribute through our business to the realization of a sustainable society, that is, a"prosperous" society where people can live w ith peace of m ind, and that it is my m ission to lead t his endeavor. which w ill lead to asustainable increase in the corporate value of our group.
Our group will enter a new turning point in April 2023 with t he launch of Toyobo MC Corporation, a joint venture with M itsubishi
Corporation. The cutting-edge technologies and products that Toyobo has cult ivated over the yea rs and Mitsubishi Corporat ion's networkof operations in Japan and overseas. We will carve out a new future t hrough business innovation broug ht about by the " integ ration andfusion" of different cultures and strengths.
In order to continue to be a corporate grou p that is required by people and t he planet, the Toyobo Group will not be afraid to change, will
enjoy change and w ill create change.
We look forward to your continued support and encouragement.

April 1, 2023
President and Representative Director, CEO & Co-COO

A message from t he president is also posted here.
• Sustainable Vision 2030 (2.1 MB)§• CEO Message in the Integrated Repo rt 2023 (453KB)-2-§

< Related information >• Corporate Philosophy Framework TOYOBO PWs
https://www.toyobo-global.com/company/philosophy.html• 2025 Medium-Term Management Plan
https://i r.toyobo.co.j p/en/ir/library/plan. html
• Sustainable Vision 2030
https://www.toyobo-global.com/pdf/sustainability/topmessage/en sustainable visio n2030.pdf (2.1 MB) ~• 140th anniversary project
https://www.toyobo-global.com/140th/logo-and-monu ment/-3-

TOYOBO Group's Sustainability0~ PV\/s
Corporate Philosophy
Framework➔

TOYOBO Group Charter ofCorporat e Behavior➔

Sustainable Vision 2030➔

In March 2019, we established the corporate

We will act with high ethical standards and social

philosophy framework TOYOBO PWs. "PWs" is t hecommon sense based on the ten principles in order

f uture business environment and shows t he idealname of t he TOYOBO g roup's and philosophy

to continue being a corporation t hat people trust.

state we seek based on our corporate philosophy, as

framework and is a combination of the English

Sustainable Vision 2030 proj ects changes in thewell as our susta inability indices and action plans.

acronym s for "principle," "vision," and "values".

Sustainability Ma nagement➔

Our Value Creation Process➔

Mat eriality➔

We are instilling t he concept of sustainability along

Our value creat ion process t akes t he TOYO BO PWs

Our mat eriality is organized along t he two axes ofwith our cor porate philosophy into our businesscorporate philosophy framework as its start ing"mat eriality for stakehold ers" and "materiality for

approach and integrating susta inability into ourpoint, and demonst rates how we use various types

the grou p." We will also regu larly review the

management and business strategies as we seek toof capital to create value and increase value for allmaterial issues,fulfil I our long-term vision.

stakeholders.

TcFD ITASK FORCE ""CLIMATE- RELATEOFINANCIALDISCLOSURES

TCFD

➔

We announced our support for t herecommendations made by t he Task Force on
Climate-related Financial Disclosures (TCFD), andhave been working on init iat ives and disclosu resthat follow t hem.

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Corporate Philosophy Framework

PVVS

We systematized the TOYOBO Group philosophyof "Jun-Ri-Soku-Yu".

The TOYOBO PWs is the foundation on which we
actively seek to build a flourishing society while
also growing as a company.

Principle

VisionTOYOBO's
founding spirit
and beliefs

What kind of
added value
should we provide
to society?

Principle"J un-Ri-Soku-Yu"
Adhering to reason leads to prosperity"Jun-Ri""Soku-Yu"

Do what should be done (positive
standpoint)

Adhering to "Jun-Ri" leads to a prosperous

Don't do what should not be done (defensive

society while also realizing self-growthstandpoint)-5-

ValuesTOYOBO

SpiritThe standards
that we prize

VisionWe will continue to create
the solutions needed by people
and the earth with our materials
and science.
We aim to go beyond mere manufactu ring (providing materials) to create science, in ot her words: new va lue t hroughingenuity and ideas.
We aim to be a group t hat realizes uniq ue benefits (provides solutions) by combining materials and science.

Values
We welcome change, enjoy change, and create change.

TOYOBO Spirit
Challenge•

9 Commitments

Value t he courage to try reaching beyond conventional limits

Think Ahead

D•

CreateAccomplish

Constantly look fo r changes andneeds, and swiftly do w hat must be

Approach our d aily routines with aflexible m ind and devise better ways

Think of f easible ways to fulf il I ourwork w ithout compromising quality.

done

to carry out our jobs

Complete to the very end

itymRe) ia bi I

mValue a safe and secure workplace and solutions that surpass customers' expectations

Safety First

Customer Satisfaction•

Factual Basis

Priority on safety first for ourselves,

Do our utmost to discern precisely

Go to the actual worksite, verify the

our associates, and society

what the customer wants and always
stay one step ahead

actual conditions, an d identify t he

CollaborationIllactual issu e

Value individuality and d iverse viewpoints

Mutual Communication

Ill

Diversity

El

Providing Opportunities

Discuss issues with everyone involved

Recognize the value of people with

People grow by t rying, no matt er if

regardless of their posit ion in t heir
company, the organizat ional

different opinions and backgrounds
and work together to achieve hight hey succeed or fail. Provide
opportunities to the next g enerat ion

struct ure, or the client's company
until a mutually acceptable solution istargets

and learn for ourselves

found

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TOYOBO Group Charter of Corporate Behavior
This Charter of Corporate Behavior applies to all directors, corporate auditors, executive officers, and employees of the Toyobo Group(TOYOBO CO., LTD. and all of its affiliated companies). The term "Toyobo Group" as used in this chart er refers to all of these people.
We here at the Toyobo Group contribute to the realization of a susta inable society by aiming to become a Group that continues to create
the solutions needed by people and t he earth with materials and science. Also, in order to continue being a corporation that people trust,
we will act with high ethical standards and social common sense based on t he following ten principles.

1. Contribution to a sustainable society
We w ill contribute to sustainable economic g rowth and t he resolution of social issues by developing and providing products andservices that w il l create a safe and affluent f uture.

2. Fair business practices
We w ill maintain a sound relationship w ith society, including our customers and business partners, by engaging in fa ir competit ion andt ransactions, and responsible procurement.
2-1. We will appropriately use and manage trade secrets, personal data and other such forms of information.
2-2. We will engage in fair and unrestricted competit ion in adherence to laws and regulations relevant to fa ir competit ion such as
antitrust law.
2-3. We will establish proper transaction policies and engage in responsible procurement and log istics in a manner that supports
development of a sustainable society.
2-4. We will properly manage and declare cargo when importing and exporting, in adherence to relevan t laws and reg ulat ions.
2-5. We will not engage in corrupt practices such as offering gifts, hospitality, monies, or other benefits t o public officials, customers orbusiness partners, w hether locally or overseas, that would result in gaining unfair benefits, o r accepting offers of such gifts,
hospitality, monies o r other benefits.
2-6. We will build highly transparent relationships with those in politics and government.
2-7. We will protect and make effective use of o ur intellectua l property rights derived from results we have obtained t hrough researchand development, and w ill likewise respect the intellectual property rights of others. We will appropriately display our t rademarks
and otherwise take steps to height en t he brand value of t he Toyobo Group.
2-8. We will not engage in accounting practices that would result in erroneous financial statements.
2-9. We will make decisions based on our Jun-Ri-Soku-Yu (adhering to reason leads to prosper ity) corporate philosophy and adhere to
our in-house rules.

3. Communication with stakeholders
We w ill carry out fair and appropriate information d isclosure and enhance corporate value t hrough comm unicat ion with our
stakeholders.
3-1. We will appropriately d isclose information in a t imely manner and otherwise strive to maintain constructive dialogue w ith society.
3-2. We will ca refully handle information and w ill not engage in insider t rading.

4. Respect for human rights
We support the International Bill of Human Rights and Guiding Principles on Business and Human Rig hts and w ill conduct business
act ivities that respect the human rights of all persons.
4-1. We will conduct our business activities in a manner that shuns harassment and discrimination on grounds of race, religion, gender,
age, family origin, nationality, disability, sexua l orientation or ot herwise. Moreover, we w ill reject child and forced labor. We will also
respect collective ba rga ining rights and freedom of association based on the laws and regulations of the countries and regions inwhich we do business.

-7-5. Earn customers' trust and satisfaction
We will strive to ensure the quality and safety of our products and services and earn t he trust and satisfaction of customers andconsumers.
5-1 . We will take steps to ensure the qua lity and safety of our prod ucts and services by build ing appropriate Quality Management
System.
5-2. We will provide accu rate and precise information regarding our products and services in order to earn our customers' satisfaction
and trust .
5-3. We will engage the proper procedures in carrying out q uality inspections and other such testing, and will appropriately hand le dat aand other information.
5-4. We will strive to develop products t hat contribute to society. Moreover, we w ill appropriately manage and use external f unds
particularly t hose covering research expenses, and will strongly refrain from acts that involve fabrication or falsification of data
results.
5-5. We will sincerely address cust omer inquiries, complaints and other interactions and will strive to manufactu re products andprovide services in a manner that leverages such feed back.

6. Active employee participation
We w ill respect employee diversity and support work pract ices that allow employees to demonstrat e t heir individual skills. Also, we w ill
provide workplaces that are conducive to productive work while taking hea lth and safety into consideration.
6-1. We will work toward developing workplace environments that facilitate active participat ion among a d iverse range of humantalent.
6-2. We will prevent various types of harassment and other forms of mist reatment in our workplaces, and accordingly we will not
engage in d iscriminatory practices neither in regard to hiring nor terms of em ployment.
6-3. We will strive to create workplaces that are safe, hygienic and rewarding, and will work to prevent excessive w orkloads and reduce
overtime work.

7. Engagement in environmental issues
We w ill strive to improve energy conservat ion and reduce/ recycle the resources used by our business, and move forward w ith t hedevelopment of products and technologies that contribute to reducing t he burden o n the environment.
7-1. We will strive to improve energy conservation and reduce/reuse the resources used by our business, and will implement measuresthat address our environmental risks.

8. Social contribution
We will actively participate in society as a good corporate citizen and contribute to its development.

9. Thorough crisis management
We will conduct thorough crisis management in t he face of actions by antisocial forces, terrorism, cyber attacks, natural disasters andother crises that pose a t hreat to corporate activity.
9-1. We will st rive to prevent disasters and will also develop a crisis management framework for addressing emergency situations.
9-2. We will take a firm stand against ant isocial forces and otherwise fully reject any and all t ies therewith.
9-3. We will strive to ensure cyber-security.

10.Responsibilit ies of the management
Directors and the Board of Directors, operat ing under t he spirit of this Charter, shall st rive to resolve issues while wor king together w ith
the entire Group and shou ld also encourage behavior based on the principles of t his Charter wit hin the Group's supply chain. I n t heevent that the Group violates the spirit of this Charter and loses t he trust of society, directors and the Board of Directors shallproactively take responsibility to respond to the situat ion, including resolving the problem, invest igating the causes, and prevent ing the
problem from recurring.
Seiji Narahara

Representative Director, President and CEO, Co-COO
TOYOBO CO., LTD.

October 26, 2020-8-

Sustainable Vision 2030

Sustainable Vision 2030
In May 2022, Toyobo observed the 140th anniversary of its founding . We launched our Sustainable Vision 2030 and 2025 Medium-Term
Management Plan.
Sustainable Vision 2030 anticipates changes in the business environment of the future and shows the ideal state we seek based on our
corporat e philosophy, as well as our sustainability indicators and action plans. We want to be a sustainable company that helps promotesustainability, while changing our corporate cult ure to one oriented towa rd sustainable growth.

Realizing Sustainable Growth
Toyobo has formulated Sustainable Vision 2030 in May 2022 to achieve sustainable growth while moving away from surviva l thinking t hatoveremphasizes short-term results. Through innovation and the 3Ps (people, planet, and prosperity), we aim to usher in both a prosperous
society and the enhancement of corporate value by making contributions to solving social issues.

From survival thinking
Deficits are bad, surpluses are goodto sustainable-growth orientation- Contributing to social sustainability- Becoming a sustainable (growing) company

In formulating the vision
We have formulated this vision w ith a strong determination to make sustainability the cornerstone of our management. The subtit le of ourlong-term v ision is "Achieving Sustainable Growth". Going forward, we w ill make a maj or shift to a "sustainable g rowt h orientat ion,"moving away from the culture of "survival t hinking" that was fostered during the long-term struct ural reform period, in other words, awayfrom an emphasis on short-term results.
Our company 's "Sustainable Growth" has two meanings. The first is that our company itself is sustainable and sustainable. The second is toimprove t he sustainability of society. "Sustainable Growth" expresses our desire to realize t he former by contribut ing to t he latter.

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Our Vision for 2030
- Realization of a "prosperous" society where people can live with peace of mind anda spiral increase in corporate value From the perspective of sustainability, which is a global issue, we have clarified more specifically "in what areas and how we w ill cont ributeto sustainability."
The "idea l state" of our group in 2030 is a state of spira l improvement, in w hich we realize a "prosperous" society w here people can live
w ith peace of m ind by solving the following five social issues, and as a result, our corporate value will also increase.

"Jun-Ri-Soku-Yu": adheri ng to reason leads t o prosperity
Ideals we seek
to realize

Social change
and trends in
2030

Standaldiution in handling~fety, hu~n rights andsoclal justice Issues

Increased and diversified needs
concerning access to medical
ore/health promotion

Demographic changes,
humancentric innovation,
accelerated urbanization......

Oecarbonlzation,
resource circulation,
Umfted natural resources

PlanetI

Employee well-being and human rights inthe supply chain• People Rrst empk))'ff saftfy, companr l)(lde MCI rewaldlng WOiie• Respect fOf human lights Kross lhe enUre supply cl\aln

I
I

Social issues tobe solved
throughcommitment

Goals forthe future

A healthy lifestyle and health care

• Coolflbutlng to the field of epldtmlOlogy• contributing to 1mpr0Yf' qwlity of life

Smart communities and comfortable spaces• Contributing to the reatizatlon of a humancentric digital society• Creating cornfort.ible spKts

I

I

A decarbonized and circular society• Contflbutlng to c.arbon neut1.tlity• Est.abl~hing .an ec:~tem fordrculatlng "soure~

Clean water areas, air and soil, and t hepreservation of biodiversity• Improving the environment through soU11ons• Food loss reduction .and sustalNble food1) Contrbuting ,o solvlng social Issues through our business2) Sustainable growth: a 50lid foundation and trajectory for future growth3) People First: safa and se<:lKe workplaces, rewarding work emplo)'99S can be proud of, and the opportunity for personal development

Where we'dlike to be by■ Sustainability Indicators■ Financial Indicators

zero

Serious incidents

2030
Em~oyee engagement scoreover 70,,

GHG emissions cut (over FY2014)
Scopel and 2

over 46%
Ca rbon M"ulnility in FY20S1

Ratio of green materials In main business operations••lnreferel'ICeto
filmtx1smes,

-10-

ro.

Consolidated sales
Operating profit margin

600 billion yen
over 8.3'lb

ROE

over 9qf,

ROIC

over 7%

Challenges toward the future - Solving five social issues
With an eye on various environmental changes and issues, we forecast how the business environment will evolve in the next 10 years.
Based on these forecasts, we have established "five social issues" that t he group can contribute to solving, such as human rights
throughout t he supply chain, people's health, creating comfort able spaces, and rea lizing a decarbonized society. We will contribute tosolving these issues t hrough our own endeavors and by providing solutions.
"People: contributing to solutions for social issues in a humancentric way"

1. Employee well-being and human rights in the supply chain
2. A healthy lifestyle and hea lth care
3. Smart communities and comfortable spaces"Planet: contributing to solutions for social issues in consideration of the entire Earth"

1. A decarbonized and circular society
2. Clean water areas, air and soil, and the preservation of biodiversity

What society requires, what Toyobo can contribute,and t argets for FY2030 (478KB)

r-1,

~

Sustainability goals by social issue
Five Social Issues

FY2031 target- Zero industrial accidents in workplaces- Employee engagement score: over 70%- Respect for huma n rights across the entire supply chain- Expanding and improving ed ucational and training systems for employees• Human Resource Management• Health and Productivity Management• Diversity & Inclusion• Supply Chain Management-11-

- Number of tests conducted by the provision of infectious d isease diagnostics: 10 million peryear- Number of d ialysis patients provided with dialysis mem branes: 250,000- Share in the market of raw materials for biochemical and other tests: 30%- Number of patients provided with regenerative inducers: 100,000 per year
- Proliferation and expanded sales of 3D netw ork-structured fiber materials in the medical andnursing care fields- Sales volume of product groups support ing DX: 1.5-fold increase over FY2021- Total sales of car cabin air fi lters: 1.2 million units- Creation of a comfortable space inside electric vehicles through sound and heat management

A decarbonized society- Cutt ing emissions in Scope 1 & 2 by over 46% in FY2031 vs FY2014

Net zero in FY20S1 (Avoided emissions > Amount of GHG emissions throughout the entire value
chain)- Entry into new solution fields
Osmotic power generation, offshore cables and insulating resin for w ind power generation.
adhesive sheets for cells used in f uel cell vehicles, electrode materials for large storage batteries.
hydrogen-related materials, etc

A circular society- Achieve final d isposal rate from business activities: less than 1%- Ratio of green films: 60%- Join resource circulation ecosystem (R PLUSJAPAN)• Climate Change• Plastic Resource Circulation• Waste Reduction• Chemical Substance Management and Reducing Environmental Impact- Air volume treated by t he volatile o rganic compound recovery un it 7 billion Nm3 per year
- Desalinat ion of sea water by membrane: equiva lent to the volume of tap w ater for 10 million
people- Sales volume of highly functional films that contribute to reducing food loss: fourfold increaseover FY202 1- Entry into sustainable food field• Water Resources• BiodiversityNote) UEmployees' well-being a nd hu man rights in t he su pply chain" corresponds to the mater ialities of "human capital" and "safety and disaster prevention."
Others correspond to their similar ly named materialities.

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For achieving sustainable vision 2030 - the people at our worksites Being a company w here each and every person works with a sense of pride and purpose is fundamentally essential t o achieving
sustainable growth. The people at our worksites are naturally the central players in t he long-term vision. The long-term vision shows
clearly t he company what we want to be and t he areas we wa nt to cont ribute. Linking t he work in front of us to company's f uture gives
meaning to the work each of us is doing so we can all make t he visio n o ur own.

Fiscal 2023 initiatives that contribute to solving the five social issues

Fi ~I 2023 initiatives th-111 contribute to solving the fr,;c socil:II issues

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Fiscal 2023 initiatives t hat contribute to solving the five social
issues(143KB)---TOVOBO
Sust.linable Vision 2030~:r lt•=~-~'.~~~,.~.

'··=~--~----'SUSTAINABLE
VISION·-~ - -~~:';, :::::-- ..·- ;;.

2030-···- - ·-·-·~
Ushennc in boc:h a pro~
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whe~ people u n love with p,e.:e of mind,·1

ilnd the entu.ncement of corporate ~e·--"'~ ...--,_,, ______""'lJ>tl"" ........._. . J_ _ _ ..... _Sustainable Vision 2030 press release (2.1MB)

Sustainable Vision 2030 in the Int egra ted Report 2022 (1 .7MB)@!

• Medium-Term Management Plan

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@!

Sustainability Management._I, Our officer's commitment._I, Policy and approach._I, Participation in initiatives

Our officer's commitment

We accomplish sustainable growth by solving social issues through our business andwith steady advancement of our initiatives
Toyobo group has strengthened its sustaina bility initiatives since fiscal 2021 , and has achieved
definite results over t hese past three years. In Sustainable Vision 2030, the long-term vision
we announced in May 2022, we identifi ed five social issues t hat we can solve t hrough ourcontributions, given the society we envision for 2030, including climate change, biodiversity,and human rights.
Regarding measures against climate change, we revised our GHG Emissions Reduction Plan,raising the fiscal 203 1 reduction target for Scope 1 and 2 from 30% of the fiscal 2014 level to
46% or higher, and also setting a new reduction target for Scope 3. Our reduction target has
been recognized as adhering to t he levels stipulated by t he Paris Agreement, and was also
certified by the global Science Based Targets initiative in December 2022. As we w ork to
reduce GHG emissions throughout our supply chain, we w il l strengthen our collaboration with
our diverse stakeholders.
Nobuya Fujiwara
Managing Excutive Officer

Our biodiversity conservation efforts include j oining t he 30 by 30 Alliance for Biod iversity inNovember 2022, an initiative to conserve 30% or more of land and sea as hea lthy ecosystems

Head of Corporateby the year 2030. We also applied for OECM international certificatio n for forests owned byour g roup. We are implementing activities toward the (nature-positive) goal of stopping

Sustainability Division

biodiversity loss and effecting restoration.
Regarding business and human rights, in October 2020 we laid out Toyobo Group Human
Rights Policy, and have stated our "respect for human rights throughout our supply chain" at
the top of Sustainable Vision 2030. Having begun practicing due diligence in human right sfrom fiscal 2023, we place priority for our group on gaining a thorough understanding of theoperationa l status of non-Japanese technical t rainees. After start ing the effort in Japan, we w ill
implement a phased expansion to other countries in the future. Regarding our supply chain,
we have established CSR Procurement Guidelines for all suppliers, and are advancing efforts
to ensure our policies are understood, includ ing th roug h dialogue with su ppliers t hat haveissues.
Corporate sustainability consists of solving social issues through our business.
We have numerous products and solutions that contribute direct ly to solving social issues,
and wh ile expanding those prod ucts, we will generate new businesses by evolving andintegrating our stock of technologies accumulated in the past. We could, for example, expand
our products that bring about a reduction in carbon footprint th rough a com binatio n of Scope
1 and 2 reductions and the use of recycled and biomass raw materials, thinning ofcomponents, etc. We will expa nd products and solutions t hat contribute to measures against
climate change and to preservation of biodiversity, such as seawater desalination using lessenergy and renewable sources of energy, reuse of water, power generation using membranes,and devices t hat collect and reuse the volatile organic compounds used in the manufacture ofelectric vehicle batteries.

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Genetic test reagents for PCR tests are helping with measures against the spread of COVID-19
and other infectious diseases. Biomanufacturing, w hich combines polymer t echnology andbiomedical technology, the core technologies involved in genetic test reagents, can createbusinesses t hat solve issues in both climate change countermeasures and biodiversity
conservation. We have, for example, sta rted conducting basic research on uses for unutilizedbiomass. Future potential is t hus hidden in such raw materials as those produced by t hinning
our g roup-owned forests.
We have been operating businesses that cont ribute to solving t he social issues of the times
ever since our founding in 1882, and our business portfolio has therefore been chang ing . Oneof the mottoes of our company's founder, Eiichi Shibusawa, was ''.fun-Ri-Soku-Yu (Adhering toreason leads to prosperity)." With this as our corporate philosophy, we aim to be a group that
continues to creat e solutions needed by people and the earth.
Being oriented toward sustainable growth means becoming a company t hat achieves
sustainable growth throug h its contributions to the sustainability of society. Spreading andpromoting th is awareness is my duty.

Policy and approach

Policy:1. Management that takes the sustainability of society into consideration, and t hus management that increases the sustainability of ourcompany
2. Sustainability that builds a solid management foundation: the axis of our management foundation (ESG)
3. Sustainability t hat strengt hens our competitiveness and d rives growth: the axis of our business (CSV)

Conceptual Framework-Sustainability, CSV and ESG

Promoting positive
impacts

CSV

Having a plus(+)

impact on society

Sustainability...

lControlling negative
impacts

ESG

Not having a minus(-)

l

impact on society-15-

Approach:
Since being founded in 1882 as Japan's fi rst large-scale spinning m ill company in t he private sect or. Toyobo group has add ressed a range ofissues as a good member of society t hrough the supply of clot hing fibers. We have also expanded and grown with the t imes andcontributed to solving social issues w it h a focus on t he environment in our aim to realize better lives for people around the world.
In 2019, we redefined our corporate philosophy 'jun-Ri-Soku-Yu (adhering to reason leads to prosperity)." After many discussions based o n
it, we enhanced our corporate philosophy framework TOYO BO PWs. Through t his discussion process, we were convinced that the essenceofToyobo group's activities to date lies in maki ng a contribution to ensuring the sustainability of people and the earth.
We announced our Sustainable Vision 2030 (long-term vision) in May 2022.
• Sustainable Vision 2030
Contributing to the realization of a sustainable society is the embodiment of Toyobo group's vision "We w ill continue to create the solutions
needed by people and the earth with materials and science." This expresses Toyobo group's approach to sustainability.
At the same time, it is important to continually enhanci ng corporate value. Toyobo group's contribution to realizing a sustainable society
generates profits leading to enhancement of the group's corporate value. This enhancement of corporate va lue leads in t urn to the nextlevel of realization of a sustainable society through growth in the group's business. Maintaining this positive spiral is w hat Toyobo groupregards as sustainability.
To meet t he expectations of stakeholders, Toyobo group w ill further enhance its d issemination of information as well as taking active
initiatives so that all employees feel personally involved in sustainability in order to promote companywide activities as a united force.

Sustainability management structure
Toyobo group has established a Sustainability Committee, w ith our President serving as cha irperson. Committee meetings were held fourt imes in fiscal 2023, with deliberations covering themes including checking on company-w ide sustainability action, GHG emission reduction
targets, nature-positive matters, geopolit ical risk, and committee st ructure in consideration of t he requirements of ISSB, etc.
In April 2023, we reviewed our vision for our Sustainabil ity Committee as a component of t he sustainability management req uired by t he
Corporate Governance Code and by international sustainability standards. We reformed t he committee into a syst em for integrated
deliberations w ith a focus on med iumto long-term sustainability t hemes related to our company-wide long-term strategy. This new
structure transfers the roles of eight committees previously under t he Sustainability Committee umbrella to t he respect ive d ivisions incharge, which w ill be responsible for advancing their activities. We are continuing with the Risk Management Committee and Com pliance
Committee, w hich require company-wide cross-organizational discussions and tasks.and have established a new Climate Change andBiodiversity Committee. Meeti ng six t imes a year beg inning in fiscal 2024, the committee w ill advance sustainability init iatives that lead us
toward our envisioned ideal. It will engage in integrated d iscussions of priority issues (materia lities), deliberate on strategies, measures,and indicators from the perspect ive of risk and opportunity, and manage the progress.
We have also established a Corporate Sustainability Division, w hich is responsible for draft ing and promoting various specific measures,
communicating them externally, and encouraging dialogue.

Sustaina bilit y Promotion Structure
As of April 2023

ReportingBoard o f Corpora te Auditors

Susta1nab1l1ty Committee
Ch.lir:P r ~ t
Men,~: Heads ofOivisiorn,

offi<tts In charge of corpor,1teSecret,ut,1t: Corpon1te SusO,lnabi1ity Oepartment

Co,pot",te Pbnnlng ~rtmmt

Corporate Planning
Committee

Chair:Pr~idtnt
Mem~Hochof SolutionsOl~llons,
officen In ch.arge of corpor,t, d~tnwnts
Se<rewl,1t:Co,pomeSu1.t,1lnablityOepartme-nt

Chair:Officerin charge of sust.ll~bility

Mffllbtts:Offic,e,r In char~of rda1ed dt-part!'r'lfflts,,ppolnted by Chflr

Se<rttarl1t;Corpot1teSumlnabl ityd~rtm~1s.

Ent;iln«rlng DePM'tment

Chair. Officer In char~ of compli.wk:eMember,,:Headsol Divisions.

officenln cNrge of corpor,te cJep.rtmmts
Sttfflarial:CCl'po1.1te: ltgal and Compl~nce ~artmtt1t

Corpo,~te departments-16-

8us~s divisions

Financial Conltol
Committee

Our sustainability activities
Since our group's founding by Eiichi Shibusawa, we have taken the philosophy of one of his mottoes, ''jun-Ri-Soku-Yu (Adhering to reason
leads to prosperity)," as t he basis for our concept t hat we grow our own business by enrich ing society. By putting t his into practice, we haveanticipated modern CSV.
Since fiscal 2021, we have been moving ahead with activities under a full-fledged sustainability management orientation. Our effo rts havebeen particularly directed toward carbon neutrality, the circula r economy, human rights, human capital, and biod iversity, and upon
formulating these strategies, we have specified milestones.

PeriodInitiatives and their purpose

Jan. 2020

Became a signatory to the United Nations Global Compact and joined the Global Compact Network Japan.
Endorsed the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

Apr. 2020

Established the Corporate Sustainability Department. I ncorporated ESG elements into management and strategy, andstrengthened communication of information to stakeholders.
Established the Sustainability Committee (renamed the CSR Committee), chai red by the President.

Apr. 2021

Placed Corporate Sustainabi lity Department under direct control of the President.
Established the Risk Management Committee, chaired by the President.
Established a system to promote efforts toward carbon neutrality. Established the Carbon Neutral Strategies Council andthe Carbon Neutral Strategies Cross-Functional Team.

Apr. 2022

Established the Corporate Sustainability Division.

May 2022

Announced Sustainable Vision 2030
Formulated the GHG Emission Reduction Plan by 2050

Nov. 2022

Joined the 30 by 30 Alliance for Biodiversity

Dec.2022

Obtained Science based target(SBT) certification

Apr. 2023

Restructured the Sustainability Committee

Participation in initiatives

UN Global Compact (UNGC)
In January 2020, we became a signatory to t he United Nations Global Compact (UNGC) andjoined the Global Compact Network Japan, which comprises Japanese compan ies andorganizations that are UNGC signatories. We have done so because we agree w ith theprinciple of solving global issues and achieving sustainable growth as a responsible corporate
cit izen. Moreover, through participating in subcommittees of the Global Compact Network
Japan (on ESG, supply chains, environmental management, Kansai, reporting research, etc.),
we gather information that we apply in our day-to-day activit ies.
Moving forward, we will strengthen our efforts in keeping w ith t he Ten Principles of t he UNGC
as we contribute to the realization of a sustainable society.

-17-

The Ten Principles of UNGC

Human Rights

Principle 1:
Businesses should support and respect the protection of internationally proclaimed human rights; andPrinciple 2:
make sure that they are not complicit in human rights abuses.
LabourPrinciple 3:
Businesses should uphold the freedom of association and the effective recognition of the right tocollective bargaining;
Principle 4:
the el imination of all forms of forced and compulsory labou r;
Principle 5:
the effective abolition of chi ld labour; andPrinciple 6:
the el imination of discri mination in respect of employment and occupation.

Environment

Principle 7:
Businesses should support a precautionary approach to environmental challenges;

Principle 8:
undertake initiatives to promote greater environmental responsibility; andPrinciple 9:
encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption

Principle 10:
Businesses should work against corruption in all its forms, including extortion and bribery.

-18-

Task Force on Climate-related Financial Disclosures (TCFD)
Recognizing t he scale of the impact of climate change on our g roup and stakeholders, wehave identified a "decarbonized society and circular society" as one of our materialities. In
January 2020, we announced our support for the recommendations made by the Task Forceon Climate-related Financial Disclosures (TCFD), and have been working on initiatives andd isclosures that follow t hem.
Based on the below 2"C scenario and the 4"C scenario, we ident ified climate cha nge-specificrisks and opportunit ies for t he group. While we focused on t he films business in t he previous
fiscal year, we expanded t he scope to include all of the group's businesses in t he current fiscal
year. We compiled t he identified risks and opportunities and rearranged themin view ofchanges in society and then explored measures to add ress each of them.

-·~-

Disclosure based on TCFO recommendations....
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Disclosure based on TCFD Recommendat ions in t he Integrated
Report 2023 (308KB)

r.;i,
~

• Climate Change-19-

TASK FORCE ON
CLIMATE-RELATEDFINANCIALDISCLOSURESTc FD I

%JTDMPTVSFCBTFEPO5$'%SFDPNNFOEBUJPOTRecognizing the enormity of the impact that climate change has on our stakeholders and our group.
7R\RERJURXSKDVLGHQWL¿HGWKHUHDOL]DWLRQRIDGHFDUERQL]HGDQGFLUFXODUVRFLHW\DPRQJLWVLPSRUWDQW
sustainability goals.
In January 2020, we endorsed the Task Force on Climate-related Financial Disclosure (TCFD)
recommendations, and are moving forward with disclosure of our initiatives in keeping with therecommendations.
In May 2022, we published our Roadmap for Carbon Neutrality as
part of Sustainable Vision 2030.
In keeping with the levels sought by the Paris Agreement,
we aim to reduce emissions of greenhouse gases (GHGs) fromour business activities (Scope 1 and 2) by 46% or more from the¿VFDOOHYHOE\¿VFDODQGWRUHDFKQHW]HURHPLVVLRQV
E\¿VFDO
0RUHRYHUZHKDYHVHWDJRDOIRU¿VFDORIDYRLGHG
emissions in an amount that exceeds the GHG emissions of theentire value chain of Toyobo group.

Governance

We have established the Sustainability Committee, chaired by thepresident who has the highest seniority regarding issues related toclimate change. The committee deliberates the setting of high-level
policies and targets for solving these issues. The Board of Directors
receives the committee reports, approves important items such as
high-level policies and targets, and monitors progress of the relevant
activities.
We established the Carbon Neutral Strategies Council and theCarbon Neutral Strategies Cross-Functional Team (CN-CFT), andVLQFH¿VFDOKDYHWDVNHGWKHPZLWKIRUPXODWLQJDQGDGYDQFLQJ

Roadmap for Carbon Neutrality

3URPRWLRQVWUXFWXUH DIWHU¿VFDO
Transition (low-carbon)

26

Reduction
Reduction

121

10,000 tonnes

Production
increase

Reporting
Fuel
conversion
Renewableenergyadoption90

10,000 tonnes

FY2014

Board of Directors

Carbon neutral (decarbonization)

Energyconservation%

FY2021strategies toward realizing carbon neutrality. To steadily address
the realization of carbon neutrality, we also formed a working groupwithin the CN-CFT comprising members from an organizational crosssection of the whole company, and undertook initiatives including
formulation of a roadmap for carbon neutrality and the introduction ofinternal carbon pricing.
:HUHYLVHGRXUVWUXFWXUHLQ¿VFDOLQFOXGLQJHVWDEOLVKPHQW
of the Climate Change and Biodiversity Committee. As we
incorporate international sustainability standards, we are moving
ahead with a company-wide response to climate change.

President

46%

Supervision of progress

Reduction

Major GHG reduction policies

Carbon-neutral measures

Energy conservation (work improvements)

Conversion to carbon-free fuels(hydrogen, ammonia, etc.)

Enhancement of production efficiency
Introduction/procurement of renewableenergy (photovoltaics, micro-hydroelectric
power generation, etc.)

65.5

10,000 tonnes

Electrification of
production processes

Fuel conversion (coal-free)Procurement of carbon-freeelectric power

Examination of introduction ofcarbon-free fuels

Introduction of carbon offsets(CCUS, forest absorption, etc.)

Switching to lower carbon in purchased
electric power

Net zerozero
Net

FY2031

Climate Change
andBiodiversity Committee

Offset
FY2051-20-

Sustainability Committee(Chair: President)(Members: Officers sitting on the Board ofManaging Executive Officers andControlling Supervisors)*(Chair: Head of Sustainability Division)(Members: CTO, Deputy Head of Films Division,
General Manager ofIT and DX Planning Department)

 KHSUHVLGHQWYLFHSUHVLGHQWKHDGVRIGLYLVLRQVH[HFXWLYHRIÝFHUVLQFRQWUROOLQJVXSHUYLVRU\7
positions, the chairperson, and corporate auditors may express opinions.

%JTDMPTVSFCBTFEPO5$'%SFDPNNFOEBUJPOTRisk management,Q¿VFDORXUJURXSVHWXSD5LVN0DQDJHPHQW&RPPLWWHH
which performs uniform group-wide management of risks including
climate change issues. In addition to its overall administration of
ULVNPDQDJHPHQWDFWLYLWLHV LGHQWL¿FDWLRQDQDO\VLVDVVHVVPHQW
and response), the committee formulates policy related to risk
PDQDJHPHQWIRUWKHZKROHJURXSEXLOGVDQGRSHUDWHVHႇHFWLYH
sustainable organizations and systems by running the PDCA cycle,
and works to strengthen the risk management system.
As our point of departure for risk management activities, we
identify serious company-wide risks requiring intensive attention
from the results of evaluations in terms of the two axes of severity of
impact*1 and likelihood of occurrence*2 based on each risk scenario.
Toyobo group manages its important risks based on a companywide assessment of risks that include natural disasters such asÀRRGLQJ ÀRRGVVWRUPVXUJHVHWF ZKLFKDUHLQFUHDVLQJLQVHYHULW\
due to climate change.

Summary scenario analysis
6SHFL¿HGVFHQDULR

Description of society,Q6XVWDLQDEOH9LVLRQ7R\RERJURXSKDVLGHQWL¿HGWKH
realization of a decarbonized and circular society among its
important sustainability goals.
In keeping with the TCFD recommendations, we also analyzed
and compiled future risks and business opportunities under climatechange scenarios based on the Paris Agreement. After identifying
WKH¿QDQFLDODQGRWKHULPSDFWVRIWKHVHULVNVDQGRSSRUWXQLWLHVZH
intend to boost the resilience of our business strategy by specifying
countermeasures together with indicators and targets.

4°C scenario

Case example
Ɣ Introduction of a carbon tax and increased carbon prices
Ɣ 6KLIWWRYHKLFOHHOHFWULÝFDWLRQVSUHDGRIUHQHZDEOHHQHUJ\

Case example
Ɣ ,QFUHDVHLQÞRRGLQJGDPDJHGXHWRKHDY\UDLQV

Reference scenarios

Ɣ SDS (IEA WEO2021/ETP2020)
Ɣ NZE (IEA Net Zero by 2050 A Roadmap for the Global Energy Sector)
Ɣ RCP2.6 (IPCC AR5)
Ɣ SSP1-1.9 (IPCC AR6)

Ɣ RCP8.5 (IPCC AR5)
Ɣ SSP5-8.5 (IPCC AR6)
Ɣ STEPS (IEA WEO2022/ETP2020)

Risk and opportunity trends

In the transition, risks and opportunities emerge more readily

Physical risks and opportunities emerge more readily

Risks, opportunities, and their countermeasures under each scenario
Social change
and its impact

Risks and opportunities
Category

PeriodShort
Term*1 Scope of impact, duration of business operation stoppage, personal harm, reputation, andÝQDQFLDOVDUHHYDOXDWHGRQDWKUHHSRLQWVFDOHWKDWLQFOXGHVÆPDMRUGDPDJHHTXLYDOHQWÇ“moderate damage equivalent,” and “minor damage equivalent.”*2 Evaluations use a three-point scale including “occurs frequently,” “occurs occasionally,” and“occurs infrequently.”

Strategy

Under 2°C scenario

Sweeping policies and technological innovations are advanced in efforts to keep
Even with the implementation of intended nationally determined contributions
the average atmospheric temperature increase by the end of the century to withinestablished by Paris Agreement signatory countries in line with the agreement,
1.5°C, and to achieve sustainable development of society. We will have a society in average atmospheric temperature rises by as much as 4°C under business as
which social changes accompanying a shift to a decarbonized society will be highly usual by the end of the century. We will have a society in which changes in climate,
likely to impact business.
including rising temperatures, will be highly likely to impact business.

Details
Introduction of carbon pricing
Increases in raw material prices(carbon price pass-through, etc.)

Impacts of thetransition to a
decarbonizedsociety(sweeping changes
in policy, laws
and regulations,
technology,
markets, etc.)

Transition andrisk

Measures taken by the Toyobo groupƔ Advancement of GHG reduction plans
HQHUJ\FRQVHUYDWLRQEHWWHUSURGXFWLRQHIÝFLHQF\IXHOFRQYHUVLRQUHQHZDEOHHQHUJ\DGRSWLRQHWF
Ɣ Use of internal carbon pricing systems
Ɣ Appeals to and collaboration with suppliers (low-carbon raw material development, production technology
assistance, etc.)Ɣ 'LYHUVLÝFDWLRQRIUDZPDWHULDOSURFXUHPHQWPHWKRGV H[SDQGHGPXOWLSOHSXUFKDVLQJDQGORFDOSURFXUHPHQW

Increase in costs resulting from promotion Ɣ ,QQRYDWLRQLQSURGXFWLRQSURFHVVHVDQGSXUVXLWRIVXSHUHIÝFLHQF\
of energy conservation, adoption of highƔ *UHDWHUHIÝFLHQF\RISURGXFWLRQWKURXJKRXWWKHYDOXHFKDLQ DIÝOLDWHLQWHJUDWLRQVWURQJHUSDUWQHUVKLSV0 $HWFHIÝFLHQF\HTXLSPHQWHWF
Medium Cost increases due to adoption ofrenewable energy
tolong term
Cost increases due to requirements for
low-carbon and decarbonized productmanufacturing

Transition andopportunities

Mediumterm

Impacts from
Physical risks
progressive climatechange(direct damage
to assets,indirect impact
of supply chain
fragmentation,
Physicalchanges inopportunities
technology,
markets, etc.)

Short tomediumterm

Ɣ Renewable energy procurement method selection

Ɣ Expansion of renewable energy adoption and procurement
Ɣ 3URPRWLRQRIJUHDWHUHIÝFLHQF\DQGHQHUJ\FRQVHUYDWLRQLQSURGXFWLRQSURFHVVHVƔ Fuel conversion for (coal-free) in-house power generation
Ɣ Study of carbon-free fuel utilization (hydrogen, ammonia, etc.)
Ɣ Study of adoption of CCU/CCS or other innovative technologies
Increasing demand for petroleum-derived Ɣ Acceleration in the shift in raw materials toward recycled and biomass-derived materials
resource reduction and replacement
Ɣ Study of withdrawal from general-purpose materials business that relies on petroleum-derived resourcesƔ Acceleration in the shift in raw materials toward recycled and biomass-derived materials
Increase in demand for low-carbon and Ɣ Addressing of procurement issues (shortages) with raw materials (recycled and biomass-derived materials)
decarbonized materials and products
Ɣ Advancement of development and planning of products with low-carbon and decarbonized materials
Ɣ Enhanced production and quality control systems for low-carbon and decarbonized products
Ɣ Enhanced product development and planning in businesses related to renewable energy and storage batteries*
Expansion of markets related to2VPRWLFSRZHUJHQHUDWLRQPHPEUDQHVVWDWLRQDU\VWRUDJHEDWWHU\HOHFWURGHVVSHFLDOÝEHUVDQGÝOPVXVHGIRUÞRDWLQJRIIVKRUH
renewable energy and storage batteries wind power, VOC recovery equipment used at secondary lithium ion battery (LiB) plants, separation membranes used at LiB
UHF\FOLQJSODQWVVHSDUDWLRQPHPEUDQHVXVHGIRUOLWKLXPSXULÝFDWLRQHWF

Ɣ Scenario analysis
Although a wide range of scenarios are conceivable depending
on how global warming countermeasures are implemented, we
referenced the scenario shown in the diagram on the right as
being typical. We considered the impact on our business andnew opportunities for our group through 2050 under each of two
scenarios: One in which the average global temperature increase is
kept under 2°C, and one in which it rises by 4°C.

Mediumterm
Medium
term
Long
term

Stoppage of raw material supply due tonatural disasters

Ɣ Review of inventory levels and expansion of multiple purchasing

Ɣ BCP training implementation
Facilities damage and operational
VKXWGRZQVGXHWRÞRRGLQJ ÞRRGVVWRUP Ɣ Enhancement of durability of production and power facilities, relocating or elevating them to higher locations
surges, etc.)
Ɣ Production site dispersal, relocation, and consolidation
Increase in demand for civil engineering Ɣ Expansion of products used in disaster mitigation and restoration work
work
6DQGSURRÝQJVKHHWVFRQFUHWHGHODPLQDWLRQSUHYHQWLRQVKHHWVVRIWURDGEHGLPSURYHPHQWPDWHULDOVHWF
Ɣ Expanded sales of (RO/FO, etc.) membranes for seawater desalination
Increased demand for seawater
desalination due to water shortages and Ɣ Energy-conserving and high-durability development for RO/FO membranes, etc.
droughts
Ɣ Strengthening of production and quality control system for RO/FO membranes, etc.
Increased demand for (prevention andƔ Expanded demand for products related to food packaging
treatment) measures against infectious
diseases associated with temperatureƔ Promotion of research and development of products and technologies related to infectious diseases
increases-21-

%JTDMPTVSFCBTFEPO5$'%SFDPNNFOEBUJPOTƔ Determining risks and opportunities under each scenario
We worked out the group’s risks and opportunities focused on
climate change in the under-2°C scenario and the 4°C scenario.
2QO\WKH¿OPEXVLQHVVZDVXQGHUFRQVLGHUDWLRQLQ¿VFDOEXW
WKHVWXG\ZDVH[SDQGHGWRFRYHUDOOJURXSEXVLQHVVHVLQ¿VFDO
:HFRPSLOHGWKHVSHFL¿HGULVNDQGRSSRUWXQLW\LWHPVUHFODVVL¿HGWKHPIURPWKHVWDQGSRLQWRIVRFLDOFKDQJHVDQGWKHQ
considered countermeasures proposed for each (diagram: “Risks,
opportunities, and their countermeasures under each scenario”).
Risks and opportunities we recognize as being particularly
important upon evaluation along the two axes of severity of impact
and likelihood of occurrence are described as follows.
We recognize GHG emissions reduction throughout the
supply chain, including in raw material procurement, as a means of
ERWKUHGXFLQJULVNDQGFUHDWLQJRSSRUWXQLW\6SHFL¿FDOO\WKURXJKplanned Scope 1 and 2 reductions, we will lighten the future burdenof carbon pricing as we prepare to reliably meet our customers’
requirements for decarbonization. In addition, shifting to recycled
and biomass materials for our raw materials will lower our relianceon petroleum-derived resources, reduce future business risk, andlead us to obtain and expand business opportunities. With respect
to the water shortage issue, which poses a growing worldwide risk,
we intend to obtain and expand business opportunities throughsolving this social issue by selling membranes for seawater
desalination, which enables low-energy fresh water production.

Risks and opportunities recognized as particularly
importantƔ Important risk 1: Risk of damage to buildings and facilities
GXHWRÀRRGLQJ ÀRRGVVWRUPVXUJHVHWF
Our group’s primary plants at Tsuruga, Iwakuni, and Inuyama, are
all located near rivers and coastline and are situated in low-lying
DUHDVZKLFKSXWVWKHPDWULVNRIÀRRGGDPDJH,QWKHHYHQWWKDW
climate change progresses, we assume that rising sea levels and
FKDQJHVLQUDLQIDOOSDWWHUQVZLOOIXUWKHUKHLJKWHQWKHÀRRGGDPDJH
risk. Our estimate of asset decrease (the amount of damage
WREXLOGLQJVDQGHTXLSPHQW GXHWRÀRRGGDPDJHLQWKHV
calculated from book value, indicated a maximum total for all threeplants of approximately ¥50 billion. To obtain our estimate of theDPRXQWRIDVVHWGHFUHDVHIURPÀRRGGDPDJHDWWKHVHWKUHHSODQWV
we multiplied the book value of their buildings and equipment
E\WKHÀRRGGDPDJHUDWH SXEOLVKHGE\WKH0LQLVWU\RI/DQG
Infrastructure, Transport and Tourism.
%HFDXVHRXUJURXSXQGHUVWDQGVWKHÀRRGGDPDJHULVNWRRXU
plants to be an important climate-related risk, we are implementing
DSKDVHGUHLQIRUFHPHQWRIRXUÀRRGGDPDJHFRXQWHUPHDVXUHVWKDW
includes moving items such as our production and power facilities
to higher locations.
* “Flood Control and Economic Research Manual (Draft)” (April 2020), Ministry of Land,
Infrastructure, Transport and Tourism

Ɣ Important risk 2: Carbon pricing implementation
8QGHUDEXVLQHVVDVXVXDO %$8 VFHQDULRWDNLQJ¿VFDO
(actual 900,000 tonnes CO 2) as the base year, Scope 1 and 2
will increase to approximately 1.3 million tonnes CO 2LQ¿VFDO
2031 as sales expand. Assuming that the unit price for carbon is¥15,000 per tonne CO 2LQ¿VFDORXUDQQXDOFRVWZRXOGEH
approximately ¥20 billion under a BAU scenario.
Our group understands Scope 1 and 2 increases to be an
important climate-related risk, and published Sustainable VisionLQ¿VFDOZKLFKLQFOXGHVRXU5RDGPDSIRU&DUERQ1HXWUDOLW\WKURXJK¿VFDO:LWKWKHURDGPDSZHDUHWDUJHWLQJUHGXFWLRQVLQ6FRSHDQGLQ¿VFDOWRWRQQHV&2 2
or less through energy optimization measures that involve energy
FRQVHUYDWLRQ LQFOXGLQJLQFUHDVHGSURGXFWLRQHႈFLHQF\ IXHO
conversion, and adoption of renewable energy. In such a case, ourannual cost incurred from carbon pricing would be approximately
ELOOLRQUHVXOWLQJLQWKHFRVWUHGXFWLRQHႇHFWRIDSSUR[LPDWHO\¥10 billion compared to under the BAU scenario. We plan toinclude the cumulative amount of investments through 2025 under
our Roadmap for Carbon Neutrality in our investments in theenvironment, safety, and disaster prevention (approximately ¥33
billion).
* BAU: “Business as Usual,” indicating a case in which no particular GHG emission reduction
measures are taken.

-22-Ɣ Important risk 3: Increase in demand for reduction andreplacement of petroleum-derived resourcesƔ Important opportunity 1: Increase in demand for low-carbon
and decarbonized materials and products
2XUJURXS¶VFRUH¿OPVDQGIXQFWLRQDOPDWHULDOVEXVLQHVVHV
represent more than 40% of total group sales. Amid the change(transition) of society into future decarbonization, we can expect
to see increasing demands from society, including our customers,that we reduce or replace our use of petroleum-derived resources,
and we acknowledge that this is an important climate-related
risk. At the same time, we recognize that there are business
opportunities in the simultaneous increase in demand for lowcarbon and decarbonized materials and products.
2IRXUFXUUHQW¿OPEXVLQHVVVDOHVDSSUR[LPDWHO\RU
billion, depend on petroleum-derived resources. In Sustainable
9LVLRQZHKDYHGH¿QHGWKHWHFKQRORJLHVDQGLQLWLDWLYHV 
that bring about reductions in petroleum-derived resource use
DV³JUHHQLQJ´DQGKDYHVHWWKHJRDORIJUHHQLQJRIRXU¿OP
SURGXFWVE\¿VFDO)LOPSURGXFWVWKDWFXWGRZQRQSHWUROHXP
derived resource use are also low-carbon or decarbonized
SURGXFWVDQGE\SURPRWLQJWKHJUHHQLQJRIRXU¿OPSURGXFWVZH
intend to reduce risk while also obtaining and expanding business
opportunities.
2IRXU¿OPEXVLQHVVVDOHVWDUJHWIRU¿VFDORI
approximately ¥220 billion, approximately ¥130 billion is to comefrom obtaining and expanding these opportunities.
'HYHORSPHQWRIÝOPVXVLQJELRPDVVUDZPDWHULDOVDQGÝOPVRIWKLQOLJKWZHLJKWPDWHULDOVVWUHQJWKHQLQJ HQYLURQPHQWDOO\IULHQGO\GHVLJQIDFLOLWDWLQJSRVWXVHÝOPUHF\FOLQJ PRQRPDWHULDOL]DWLRQ GHYHORSPHQWRIÝOPVXVLQJUHF\FOHGUDZPDWHULDOVDQGRIUHF\FOLQJWHFKQRORJ\

%JTDMPTVSFCBTFEPO5$'%SFDPNNFOEBUJPOTƔ Important opportunity 2: Increase in demand for seawater
desalination
Our group recognizes that the advance of climate change will
increase the risks of water shortages and droughts worldwide.
Securing water will become an issue in many regions, not just forindustrial uses, but for domestic uses as well. This is expected tofurther intensify the demand for seawater desalination.
Our group’s HOLLOSEP®KROORZ¿EHUUHYHUVHRVPRVLV
membrane module has characteristics that include resistance tocontamination, giving it particular advantages in desalination ofseawater in enclosed sea areas (such as in the Middle East) thatare susceptible to proliferation of microorganisms. Since its superior
chlorine resistance enables HOLLOSEP® to supply chlorinated raw
water directly to the module, this controls microbial growth within themodule at a relatively low cost, while easy maintenance also helps
improve desalination plant operating rates.
As we work toward obtaining and expanding business
opportunities through solving societal issues, our group set thegoal in Sustainable Vision 2030 of using seawater desalination
with membranes to produce a volume of tap water equivalent to the
QHHGVRIPLOOLRQSHRSOHLQ¿VFDO

Indicators and targets
Category,QGLUHFWHPLVVLRQVRWKHUWKDQ6FRSHDQG7KLV6%7FHUWLÝFDWLRQFRQFHUQV*+*HPLVVLRQV
resulting from activities (manufacturing, etc.) related to the purchase of products and services,and to the use of sold products.

Target

Key measures)<UHGXFWLRQ 6%7(From FY2014: Equivalent to a 46% reduction)*Base year: FY2021

Ɣ ,PSURYHGHQHUJ\FRQVHUYDWLRQLPSURYHGSURGXFWLRQHIÝFLHQF\IXHOFRQYHUVLRQ
adoption of renewable energy, etc.

FY2051: Net zero

Ɣ Adoption of carbon-free fuels, renewable energy procurement, production process
innovation, etc.

FY2031: 12.5% reduction (SBT)**Base year: FY2021

Ɣ Category 1*: Acceleration in the shift in raw materials toward recycled and biomassderived materials* Emissions from activities (manufacturing, etc.) related to purchased raw materials andservicesƔ Category 11*: Energy conservation with VOC recovery equipment, etc.
*Emissions from the use of products sold

*UHHQUDWLRRIÝOPSURGXFWV
6SHFLÝHGDOVRDVDQLQGLFDWRUIRU
transition risk reduction)

FY2031: 60% or more

Ɣ Progress in material and chemical recycling,
GHYHORSPHQWDQGLQFUHDVHGDGRSWLRQRIELRPDVVUDZPDWHULDOVUHGXFWLRQRIÝOPthickness, etc.

Seawater desalination withmembranes

FY2031: Equivalent of tap water volume for 10
million peopleƔ Expansion of sales of (RO/FO, etc.) membranes for seawater desalination
Ɣ Energy-conserving and high-durability development for RO/FO membranes, etc.
Ɣ Strengthening of production and quality control system for RO/FO membranes, etc.

Capital allocation

Capital investment)<FXPXODWLYHWRWDOgELOOLRQ(Total capital investment for environment, safety,
and disaster prevention)

Ɣ Carbon reduction for in-house power generation facilities, adoption of renewableenergy facilities, etc.

Internal carbon
pricingíƔ 6HWDQLQKRXVHFDUERQSULFHRIgSHUWRQQH&22 (revised annually as needed)Ɣ Expansion of decision-making on capital investment and investment in development facilities which increase or decrease CO2 emissions

CompensationíƔ &RQVLGHUDWLRQRIRIÝFHUÅVFRPSHQVDWLRQVHWDFFRUGLQJWRWKHVWDWHRI*+*UHGXFWLRQ

Scope 1, 2

GHG

GHG emissions

Scope 3(Categories 1 and11)

Climate-related
opportunities

Indicators and targets

Our group has set targets with respect to climate change, and weare moving forward with measures for each of them. Our targets for
Scope 1 and 2, as well as for Scope 3*, are based on levels sought
E\WKH3DULV$JUHHPHQWDQGZHUHFHUWL¿HGDV6FLHQFH%DVHG
Targets under the SBT Initiative in December 2022.
Amid a 6.4% year-on-year increase in sales, we produced 894
thousand t-CO2XQGHU6FRSHDQGLQ¿VFDO DGHFUHDVH
from 903 thousand t-CO2WKHSUHYLRXV¿VFDO\HDU 

Indicator-23-

Our Value Creation Process
Our value creation process arises from TOYO BO PWs co,-porate philosophy framework and demonst rat es how we use various types ofcapital to create value and increase value for all stakeholders. Through this process, Toyobo group aims to accumulate and convert capital
to continue creating the solutions needed by people and the earth.
• Materiality

Value creation process----Value Creation Process in the Integrate Report 2023 (1.4MB)

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-24-

Value creation process
Business model

InputsBusiness that realizes Corporate Philosophy
Framework PVVs and Sustainable Vision 2030

Financial capital
Consolidated total assets ¥588.9 bn.
Cash flows from operating activities¥7.8 bn.

Social issues to be solved throughToyobo’s strength; materials and science

Digitaltransformation

Manufacturing capital
Production sites
Capital investment

Outputs
Business segments
through FY2023

Business segmentsfrom FY2024

Films andFunctional Materials

Films

Packaging films
Industrial films

22 sites¥42.7 bn.

Outcomes

p.33

Packaging films

Employee well-being andhuman rights in the supply chain
A healthy lifestyle andhealth care
Smart communities
and comfortable spaces

Industrial films

Functional materials

Life Sciencep.36

MobilityIntellectual capital
Major research anddevelopment sites
R&D Expenses

Engineering plastics

Innovation

3 sites¥14.1 bn.

Airbags fabrics●

Human capital
Number of employees
10,885
Ratio of women managers
4.7％
Number of employees engaged
in R&D
529●●

Biotechnology
Medical materials
Pharmaceuticals

Environmental andFunctional Materials

A marketing approach that views people and the earth as
the end customers

Lifestyle andEnvironment(mainly TOYOBO MC Corporation)

Science-based innovation through original refinements
and ideas grounded in materials and science

Environmental solutions

Functional materials

Co-creation of value through open innovation, etc. withdiverse partners

p.39

Nonwoven materials

Engineering plastics

High-performance fibers

Environmental solutions

TextilesNonwoven materials
High-performance fibers

Social capital
Strong relationships with customers
and suppliers
Collaborations with other companies
and universities
Participation in various initiatives

Natural capital

Materiality
Area of contributing to thesolving of social issues
through business
Area of human capital

Energy consumption
2,937GWh
Sales ratio of eco-conscious
products
35.2％

Life Science

p.15

Biotechnology

Area of environment
and manufacturing

Globalenvironmental
conservation

Poverty andhungerp.44

Airbags

Pharmaceuticals

TextilesA decarbonized andcircular society
Clean water areas, air,and soil, and the preservationof biodiversity

Real estate andother businessSocietal demands and issues
Climate change

Contributing to solvingsocial issues withawareness of the earth
as a whole

Functional Textiles
and Trading

Medical materials

Area of business bases

Contributing to solvingsocial issues with people
at the center

Human rights
and health-25-

Real estate andother businessMateriality

Toyobo group's materiality
Our group's mate rial issues are set on t he bas is of Susta inable Vision 2030, wh ich we announced in May 2022.
Wo rking fro m t he two axes of infl uence on stakeholders and influ ence on our grou p, we clarified high-priority targets and organ ize d t hem
int o fo ur areas: "contrib uting to t he solvin g of soc ial issues t hroug h business," "hu man ca pital," "enviro nment and man ufact urin g," an d"business bases."
As a res ult of t he discussions by t he Sustainability Co mmittee, we also dec ided to separa te quality agenda from comp liance an d add
ch em ica l su bsta nces ma nagement. We w ill review our goals and KP!s, including t hese ite ms, in fi sca l 2024.

Process of identifying material issues
With ref erence to ext ernal initiatives and 12 inte rnational gu ide lin es, including the GR! Standa rds, we se lect ed cand ida te it ems. The
positive and negative impact of t hese social issues were cla rifi ed th roug h internal question nai res and interviews, and , taking int o accountthe views of ext ernal parties such as institutional investors, we finally det ermined our mat eria l iss ues w it h approval by the Boa rd of
Directors .

Material ity map

Area of contnbuttng to the solving of socia l Issues through business• A decarbonized an d circ
• Smart communities and comfortable spaces
ular society•"""". ►

• A healthy li festyle and• Clean wa ter areas, air, and soil, an d the preser'V

health ca reation of biodivers ity

Area of huma n capital• Wel l-being or em ployees(diversity and inclusion, healt
hand prod uctivity managem

Area of environment and manufacturing• Safety and disaster preventi onent, occu pational safety andhealth)• Human cap ital
• Human rights(including in the supply chain)•

Influence on Toyobo group(pr esent t o 2030)•• A decarbonized and circula r society(environmental impact reduction)• Chemical substance management

Area of busin ess base
• Innovati on• Partnerships {supply ch ain, stakeholder engagement, social contri bution)• Di gital transforma tion
• Risk management, co mpliance-26-

Matorialit~.,_..,._ _ _ _,..,,_,.'"t___.,..,.,4,.,.i-,•a i,~ ~ •,......,.,_.. _... _ _t,·-·.,., .... _·-"~.,,.--...·-, _ _, _ _ ..,... ..., __...

1:ri~

~

~-

: ;a·r.:=.-_

Materiality in the Integrate Report 2023 (175KB) ~Targets and KPis
To steadily ensure the progress of our materiality initiatives, we have assigned officers in charge of each materiality and have for mulated
KP!s and targets.We report and share information on progress toward t he KP!s two t imes a year within t he Sustainability Committee, and,in accordance with progress status, work toward continuous enhancement of our efforts by reviewing KP!s and targets.
Toyobo group materiality/KP!s and Targets (As of April 1,2023) (222KB)~

Toyobo group materiality/KP! s and Targets (As of April 18,2022) (133KB) ~* Three year performance data is ava ilable. The data for the most recent yea r is in one file, and the data for the past two years is in another file.

-27-

.BUFSJBMJUZ
Materiality KPIs

Area of contributing
to the solving ofsocial issues throughbusiness

Category

April 1, 2023
Major items

RelatedSDGs

Taichi Sakai
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Safety and Disaster
Management Division

1) Scope 1, 2 greenhouse gas emissions (consolidated)
2) Expansion of ECO-PARTNER SYSTEM® products and services that contribute to the environment(TOYOBO CO., LTD. only)

1) 15 employees per year* gSHU\HDUKRXUV
3) 5.0% or above* 
5) 2.0% or lower (reduction of 20% from FY2020)*
6) At least 80% of eligible men employees taking
childcare leave, with average leave of 14 days ormore (20% increase from FY2021)*
 $FTXLVLWLRQPDLQWHQDQFH
8) Increase in the percentage of respondents agreeing
with this statement

Takehiko Inada([HFXWLYH2IÝFHU
Controlling Supervisor of HR,
Administration and Legal
Division

1) Implementation of human rights education and training
2) Employment ratio of people with disabilities

1) Once a year for 20% of non-consolidated*
employees2) 2.3%

Taichi Sakai
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Safety and Disaster
Management Division

1) No. of major accidents*
2) Frequency rate of workplace accidents resulting in lost workdays 1RRIÝUHVRUH[SORVLRQV
4) No. of spills

1) 0 accidents per year2) 0.25 or less
3) 0 accidents per year4) 0 accidents per year

6HWLQWHUQDOVWDQGDUGVEDVHGRQGHÝQLWLRQVVWLSXODWHGE\WKH0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH

Tabulated by calendar year

Masakazu Iwasaki([HFXWLYH2IÝFHU
Head of Quality Assurance
Division

1) No. of incidents related to products*
2) Implementation of product safety and quality assurance training

1) 0 accidents per year2) 100%

1) 0 accidents
2) 100%Taichi Sakai
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Safety and Disaster
Management Division

1) VOC emissions (total for operations in Japan)
2) Discharge of hazardous substances into water (total for operations in Japan)
3) Waste volume (consolidated) )LQDOGLVSRVDO ODQGÝOOGLVSRVDO UDWH WRWDOIRURSHUDWLRQVLQ-DSDQ1) 60% reduction from FY2015*2) 80% reduction from FY2015*3) 15% reduction from FY2016*4) Less than 1% every year

1) 60% reduction UHGXFWLRQ
3) 13% increase4) 0.4%S )VNBODBQJUBM

E  S  G 4BGFUZBOEEJTBTUFSQSFWFOUJPOS  G 2 VBMJUZ

E "EFDBSCPOJ[FEBOEDJSDVMBSTPDJFUZ

FY2023 results
1) 26.4% reductionWKRXVDQGW&22)
2) 35%

1) Number of core overseas personnel undergoing training in Japan2) Training investment per employee (and training time)3) Ratio of women managers
4) Ratio of annual paid leave taken 5HGXFWLRQLQDQQXDOWLPHZRUNHGRXWVLGHVSHFLÝHGZRUNLQJKRXUV QRRIHPSOR\HHVZRUNLQJPRUHWKDQ360 hours of overtime per year / total no. of employees)6) Ratio of men employees taking childcare leave &HUWLÝFDWLRQDVDÆ7RS&RPSDQ\ÇIRU2XWVWDQGLQJ+HDOWKDQG3URGXFWLYLW\0DQDJHPHQW
8) Improvement in how positive employees feel about their work, based on employee
engagement surveys
a. Percentage of respondents agreeing with the statement that they do not feel that their day-to-day work isGLIÝFXOWWRSHUIRUP
b. Percentage of respondents agreeing with the statement that the company respects the diverse views
and ideas of each individual employee

IFBMUIBOEQSPEVDUJWJUZNBOBHFNFOU 
PDDVQBUJPOBMTBGFUZBOEIFBMUIS )VNBOSJHIUT 5PZPCPHSPVQ

7DUJHWV VLQJOH¿VFDO\HDUWDUJHWV
1) Reduction of emissions by at least 46% comparedto FY2014*
2) Sales ratio of 40%***Target set in anticipation of increase in greenhousegas emissions associated with expansion of
WDUJHWHGVDOHVLQ)< DVVXPHGgELOOLRQLQ
FY2031)**FY2031 target

S &NQMPZFFXFMMCFJOH EJWFSTJUZBOEJODMVTJPO 
Area of human capital

ThemesE "EFDBSCPOJ[FEBOEDJSDVMBSTPDJFUZ

Takehiko Inada([HFXWLYH2IÝFHU
Controlling Supervisor of HR,
Administration and Legal
Division

Area of environment and manufacturing

KPIs: Timeframe for achievement set for each theme

2I¿FHULQFKDUJH* FY2026 target

1) Canceled because of
COVID-19 g KRXUV 
4) 80.2%5) 4.2%6) 104.3% of eligible men
employees; average leave
taken: 14.8 days
 &HUWLÝFDWLRQDVDÆ7RS
500 Company” for Outstanding
Health and Productivity
Management
8) a. 38% b. 50%

1) 48.0%
2) 2.3%* TOYOBO CO., LTD., TOYOBO STC CO., LTD., and
TOYOBO INFORMATION SYSTEM CREATE CO.,LTD.
* FY2026 target
1) 0 accidents
2) 0.55
3) 0 accidents
4) 0 accidents

6HWLQWHUQDOVWDQGDUGVEDVHGRQGHÝQLWLRQVVWLSXODWHGE\WKH0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\FOWJSPONFOUBMJNQBDUSFEVDUJPO* FY2031 target• In April 2023, the company merged with TOYOBO INFORMATION SYSTEM CREATE CO., LTD.

-28-

.BUFSJBMJUZ
Materiality KPIs

April 1, 2023

Category

Major items

G (PWFSOBODF

Related
SDGs

2I¿FHULQFKDUJHS  G 1BSUOFSTIJQTAreas of business Bases

TUBLFIPMEFSFOHBHFNFOUS  G 1BSUOFSTIJQT TPDJBMDPOUSJCVUJPOS  G %JHJUBMUSBOTGPSNBUJPOEBUBTFDVSJUZ QSJWBDZS  G $PNQMJBODF

S  G $PNQMJBODF

3% JOUFMMFDUVBMQSPQFSUZ

7DUJHWV VLQJOH¿VFDO\HDUWDUJHWVFY2023 results

Takehiko Inada([HFXWLYH2IÝFHU
Controlling Supervisor of
HR, Administration and
Legal Division

1) No. of meetings of the Board of Directors/committees
 $WWHQGDQFHUDWHRIRIÝFHUVDWPHHWLQJVLQ
3) Effectiveness evaluation of the Board of Directors, content disclosure1) Disclosure of results2) Disclosure of results3) Disclosure of details of effectiveness evaluation

1) 23 meetings2) Attendance by directors and corporate auditors at
meetings S
3) Evaluation of the effectiveness of the Board of
Directors S

Katsuya Ito([HFXWLYH2IÝFHU
Controlling Supervisor of
Innovation Division

1) Percentage of research themes that contribute to achievement of Sustainable
Vision 2030
2) Direct investment in open innovation (commercialization PoC with invested
companies, start of joint development, etc.)
3) No. of cases of intellectual property information analysis
4) No. of cases of business termination due to patent infringement
5) No. of intellectual property training sessions for employees (Toyobo andgroup companies) 3URÝWFRQWULEXWLRQWKURXJKWKHVHFXULQJRILQWHOOHFWXDOSURSHUW\ULJKWV
(expansion of intangible assets) 1RRILQGXVWU\DFDGHPLDJRYHUQPHQWFRPSUHKHQVLYHFRRSHUDWLYHSURMHFWV

1) At least 90% in FY2026
2) 4 cases or more per year3) 20 cases per year4) 0 accidents per year5) Toyobo: 13 times; group companies: 6 times6) Under review
 FDVHV

1) July 2023 evaluation
2) 2 cases FDVHV )<WDUJHWFDVHV
4) 0 accidents per year 7R\RERWLPHVJURXSFRPSDQLHVWLPHV6) ʊ FDVHV

Nobuya Fujiwara
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Corporate
Sustainability Division
Controlling Supervisor of
Procurement and Logistics
Department

1) Ratio of biennial CSR procurement surveys returned2) Ratio of reduction in CO2 emissions (basic unit) related to logistics (sales)

1) 90% or above(In years when survey is not implemented, we carry out
dialogue with business partners that had issues in past
surveys)2) Year on year reduction of 0.5%

1) Response and engagement following surveys
2) Year on year reduction of 5.3%

Nobuya Fujiwara
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Corporate
Sustainability Division
Controlling Supervisor of
Procurement and Logistics
Department

1) No. of press releases
2) No. of interviews with investors
3) Frequency of meetings with employees and labor unions
4) Frequency of engagement with stakeholders SHU\HDU
2) 150 per year*
3) At least 30 times per year
4) Twice a year

1) 1032) 124 WLPHV
4) 3 times

Nobuya Fujiwara
0DQDJLQJ([HFXWLYH2IÝFHU
Head of Corporate
Sustainability Division
Controlling Supervisor of
Procurement and Logistics
Department

1) Clean activities (outside company) 
(Non-consolidated + domestic group companies,
implementation rate at all sites)

1) FY2023: 93%

Ichiro Takai
Senior Managing Executive2IÝFHU
Controlling Supervisorof Corporate Planning
Division

1) No. of information security education sessions*2) No. of incidents (information leaks, service outages, etc.)*
3) Implementation of information security measures**1) 15 times per year2) 0 incidents per year3) 100% completion (FY2023-2025)

1) 51 times2) 0 incidents
3) Promotion of activities with the Cyber Security
Committee in central role

Takehiko Inada([HFXWLYH2IÝFHU
Controlling Supervisor of
HR, Administration and
Legal Division

1) Increase in awareness of compliance2) Awareness and use of Compliance Consultation Desks
3) No. of serious legal violations

1) Improvement in compliance questionnaire responses
a. Does the company emphasize compliance?
b. Awareness of case study reports, expansion of compliancestudy sessions and other trainingc. Frequency of compliance study sessions (managers) andother training
2) Improvement in compliance questionnaire responses
a. Awareness of Compliance Consultation Desksb. Ease of use of Compliance Consultation Desks
Disclosure of no. of cases handled
3) 0 cases

1) a. I feel that it does, or by and large I feel that it does:81%
b. I read every issue, or I sometimes read it, or I read
WKRVHDUWLFOHVWKDWDUHRILQWHUHVWWRPHc. Compliance study sessions:
20 times + video streaming to all employees
Other training: 38 times2) a. 90%b. I would like to try using it, or I can’t really say one
way or the other: 92%
FDVHV
3) 0 violations

Katsuya Ito([HFXWLYH2IÝFHU
Controlling Supervisor of
Innovation Division

1) No. of product safety or quality assurance violations in the R&D QA system
2) No. of violations of ministerial guidelines or of funding bodies’ rules
3) No. of violations of rules governing handling of research topics
4) No. of cease and desist orders received relating to display items

1) 0 violations per year2) 0 violations per year3) 0 violations per year4) 0 orders per year

1) 0 violations
2) 0 violations
3) 0 violations
4) 0 orders

E  S *OOPWBUJPOE  S 1BSUOFSTIJQT TVQQMZDIBJO

KPIs: Timeframe for achievement set for each theme
Themes* 2) covers the period from August 2022 to July 2023

* Scope is TOYOBO CO., LTD., TOYOBO STC CO., LTD., and TOYOBOINFORMATION SYSTEM CREATE CO., LTD.
6FRSHLVGLUHFWO\RULQGLUHFWO\KHOGJURXSFRPSDQLHV6SHFLÝFPHDVXUHVfor target group companies:• Roll-out of Information Security Policy• Implementation of education and training• Roll-out of IT reinforcement measures• Development of incident structure• In April 2023, the company merged with TOYOBO INFORMATION SYSTEM CREATE CO., LTD.

-29-

Contribution through Our Business,J,, Overview by Solution Business,J,, Features in the past

Cont ributing to Solv ing Social
I ssues through Business
Operations➔

Through our business, we w ill contribute to solving

Major Business Growth
Strategies➔

We launched the 2025 Medium-Term Management

the following four social areas.

Plan in April 2022.

- A healthy lifestyle and health care

We designate three businesses of film , life science,- Smart communities and comfortab le spaces

and environment and functional m aterials as• A decarbonized and circular society

businesses focusing on expansion.

- Clean water areas, air and soil, and thepreservation of biodiversity

Features in the past

FY2023________,·-----··-·------Polymerization of 100% bio-based
PET resin in t he Integrated Report
2022 (193KB)

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R&D is Creating

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ImmunoArrow ® SARS-CoV-2 (354KB)FY2020TOYOBO's Way of Manuf actu rin g (1.1MB)-31-

Integrating materials infor matics (269KB)-

Contributing to Solving Social Issues
through Business Operations--1, Contributing t hrough business operations--1, CSV examples {topics)--1, CSV exam ples {products)

Contributing through business operations
Through our business activities, we contri bute to solving the following four social issues.
The main goals for FY2031 are as fo llows.

The main goals for FY2031

Four social issues

PeopleA healthy
lifestyle andhealth care

• Contri buting to the field of
epidemiology• Contri but ing to improve quality oflife {QOL)• Number of tests conducted by th e provision of infectious
disease diagnostics: 10 million per year
• Number of dialysis patients provided with dialysis
membranes: 250,000• Number of patients provided w ith regenerative inducers:
100,000 per year
• Share in the market of raw materials for biochemical andother tests: 30%• Proliferation and expanded sales of 3D network-struct uredfiber mater ials in t he medical and nursing care fields• Contributing to the realization of ahumancentric digital society• Creating comfortable spaces• Sales volume of product groups supporting DX: 1.5-foldincrease over FY2021• Total sales of car cabin air fi lters: 1.2 million units• Creation of a comfortable space inside electric vehicles
through sound and heat management

Contributing tosolutions forsocial issues ina humancentric
way

Smart
communities
andcomfortable
spacesPlanetA
decarbonizedsociety• Contribut ing to carbon neutrality• Establishing an ecosystem forcirculating resou rces

Contributing to• Cutting emissions in Scope 1 & 2 by over 46% in FY2031 vs
FY2014• Ratio of green films: 60%• Entry into the market of osmotic power generation, wind
power generation offshore cable, insulat ing resin, adhesive
sheet for cells used in f uel cell vehicles, electrode materials
for large storage batteries, hydrogen-re lated materials, etc.
• Join resource circulation ecosystem (R PLUS JAPAN)

solutions forsocial issues inconsideration of
the ent ire Earth

Clean water
areas, air andsoil, and thepreservationof
biodiversity• Improving the environment
through solutions• Food loss reduct ion and sustainable
food

-32-

• Air volume treated by the volatile organic compoundrecovery unit: 7 billion Nm3 per year
• Desalination of sea water by membrane: equivalent to thevolume of tap water fo r 10 million people• Sales volume of highly functional films t hat contribute to
reducing food loss: fourfold increase over FY2021• Entry into sustainable food field

CSV examples (topics)

Films

11
11

Contributing to reducing plastic volume
New development of the world's th innest 20µm shrink film

Contributing to the proliferation of next-generation energy and a carbon-neutra l society
TEONEX® PEN film adopted for use in Toyota's fuel ce ll v ehicles-~ .. ____.. ,,..____. -··......
--·-·-..-·-·-~_......_____ - .... ..........
------.....-.
... ..__.,---------•___ _____ _-----------·--_.,,.__··•'_., ....,_"...•··', --~_,_,,._,

Product site (Packag ing fi lms) ➔Produ ct site (Indu stria l films) ➔-33-

Life Science

Ill
Ill

Contributing to measures against unknown infectious and other diseases that threaten humanity
GENECUBE® fully automated gene analysis system for PCR testing, and specialized reagentsContributing to both patients and the earth through high permeability
Cellulose-derived artificial kidney hollow fiber membrane unique to Toyobo...

---·-·--·----•··- ••·•• .......... ·........ ·--· .. ___..,,_--·,- - . .. . .. .

- - - - - - - • .. ,-,-~.o-, ...

________.,._____ ........,_,, ·-·.. ..-·-·••·-..

-· - ·-·-··--···· ..... .
=~=-=...::.~~- - -----::= ~-- =-_·•:~-.,-~ - --· __,___.,._--·· ..............

Product site (Biotechnology operating)➔

Environmental and Functional Materials

II
II
~

~

Contributing to enhanced performance and safety in lithium-ion batteries
HARDLEN® sustainable adhesive

Helping to bring on the 6G communication era
HARD LEN® leverages the strength of low dielectric properties.__·- - •·~• -··-·.......... ___._,,----.....,..__•••---------·______ .., __--~------- ...~--~--,_.._,'---- •··•-···-- ......

•.

Product site (VYLON®, HARDLEN®)•·· .. "-.....

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@

-34-

Functional Textiles and Trading

11
II
~

Contributing to the advancement of the domestic recycling mar ket through our technology
Taking on the upcycling of apparelContributing to the protection of lives and the environment
Successful development of airbag fabric technologies

Contributing to the prevention of damage to hea lth and reduction of environmental impacts
Development of adhesive-free waterproof sheets

11

Contributing to the reduction of environmental impacts t hrough high energy efficiency
Joint development of energy-saving air cond itioner components and materia ls together with
Panasonic

funclxlnllTulillNandn-adlng......________···--------~- .... ,,_. --..
......

------·.........
----~ .. .... _... ...... ..
-~---,~-•-,..,.,__<o~O.~..-••--w,,_··- ---~------TOYOBO TEXTILE CO. LTD.

B'

Japan Exlan Co., Ltd.

B'

-35-

CSV examples (products)~
0

Shortening o 'red ucln<i the ~c:atlon IImes andt rden on patients
•

.- •

e

e

e

SARS-CoV-2 Detection Kit

Ar tificial kidney hollow fiber
membranes of stable andreliable quality

Nerve regeneration conduit
Nerbridge®

Product site @Product site B'--

Three-dimensional cushion
mater ial BREATHAIR®, Electret
air filter ELITOLON'"Elect ret air filter Product site @BREATHAIR~ Product site @LCD film with more naturalcolo r reproduction

Airbag yarn and fabrics

Engineering plast ics

Manipularer® concept ca r

Product site B'

Product site @Elnmnating water shortages

Film of recycled PET resin CYCLE
CLEAN®

RO membranes for seawater
desalinat ion

Product site B'

Product sit e B'

Food loss reductionetet

VOC recovery equipment

Transparent vapor-deposited
film ECOSYAR®
Product site B'-36-

CSV examples

Films

Contributing to reducing plastic volume
New development of the world’s thinnest 20μm shrink film

Contributing to the proliferation of next-generation energy and a carbon-neutral society
TEONEX® PEN film adopted for use in Toyota’s fuel cell vehicles

Masahito Jinguji

Shigeto Yoshida

Hisato Ichimiya

Kenji Handa

Manager
Packaging Operating Department

Manager
Packaging Operating Department

Manager
Films New Business
Development
Operating Department

Industrial Films Operating
Department

Our TEONEX® high-durability and heat-resistant polyethylene naphthalate (PEN) film is positioned as a defacto global standard, finding wide use in automotive applications in recent years. Since the early 2000s,
we have proposed TEONEX® to the automotive market as a material that will contribute to innovation inhighly anticipated, next-generation technologies for fuel cells. In 2020, we developed a sealing material that
subjects TEONEX® to a proprietary adhesive coating and precision processing. This sealing material has
been adopted for use in the “MIRAI” fuel cell automobile for its high durability even in high-temperature orother harsh environments, and for its contribution to ensuring long-term reliability in fuel cells. Changing fromconventional vulcanized bonding to thermoplastic bonding with sealing material that uses TEONEX® hassignificantly improved cycle time from over 10 minutes to several seconds. This accomplishment earned the
product the “Toyota Group Technology & Development Award” in fiscal 2021.
Fuel cell vehicles are the ultimate “eco-cars,” emitting only water during operation. Fuel cell vehicles,
including large buses, trucks, and passenger automobiles, are expected to become widespread throughout
the mobility sector. In addition to bonding, TEONEX® provides functions including protection of power
generation surfaces, insulation, and retention of gas intake/exhaust shape, contributing to technologicalinnovation in fuel cells. The product is also expected to see use in water electrolytic hydrogen generators.
The use and evaluation of TEONEX® is advancing in hydrogen-related markets around the world. TEONEX®
holds potential as a key component
supporting the hydrogen society of the
future, and is indispensable as a material for
proliferation of next-generation energy andthe achievement of a carbon-neutral society.

Toyobo is a specialty manufacturer of PET films in the shrink film market. Our policy is to boost ourcompetitiveness through product development that is cutting-edge in terms of both performance andenvironmental consideration. Our production technology creates thinner films while maintaining strength,
an achievement that cannot be imitated by others. In 2012, we succeeded in developing and launching
SPACECLEAN® , a heat shrinkable PET film that significantly cuts the mainstream 40μm thickness toa world’s-thinnest 20μm. This product offers benefits not only in the environmental value of reducing
plastic volume but also in terms of productivity, and has found use with many customers, mainly beverage
producers.
In response to strong demands by customers, we will also start using recycled PET material frombottles to produce this 20μm film. In the past, the use of recycled raw materials yielded differing grades of
product. We will further expand this and contribute to achieving customers’ specific goals for sustainable
packaging.
Along with the reduction of plastics, the reduction in use of virgin raw materials is also a pressing
global issue. We plan to actively propose products made from recycled raw materials to our customers
overseas as well. As PET labels are easier to recycle
than polyvinyl chloride and polystyrene labels,
we aim to build a resource circulation network forrecycling containers that use shrink film, drawing
on cooperation from brand owners, converters, andrecycling business operators in overseas markets.

PET bottle labels made with SPACECLEAN® heat-shrinkable PET film

“MIRAI” fuel cell vehicle, an adopter of TEONEX®

-37-

CSV examples

Life Science

Contributing to measures against unknown infectious and other diseases that threaten humanity
GENECUBE® fully automated gene analysis system for PCR testing, and specialized reagentsContributing to both patients and the earth through high permeability
Cellulose-derived artificial kidney hollow fiber membrane unique to Toyobo

Toshihiro Kuroita

Kimihiro Mabuchi

General Manager
Biotechnology Operating Department

General Manager
Medical Materials Operating Department

Toyobo developed the GENECUBE® fully automated gene analysis system in 2011. The system’s combinationof fast-acting DNA amplification PCR enzyme KOD® DNA polymerase with a high-speed temperature control
system is able to return results as quickly as 25 minutes from the start of measurement. As COVID-19 beganrunning rampant across the globe in 2020, we leveraged our experience in the development of enzymes toaccelerate development of PCR testing drugs for SARS-CoV-2 tests, receiving regulatory approval in July ofthat year. At present, over 300 GENECUBE® units have been adopted by medical institutions in Japan, where
they contribute to society through use in daily testing.
About 70 years ago, Toyobo undertook the development of technology using microorganisms to treat
effluent generated from the manufacturing of pulp used as a raw material for rayon. We also investigated thepotential for industrial use of the enzymes created in the cells of microorganisms, and succeeded in applying
the enzymes to diagnostic drugs. Expanding the types of enzymes, about 40 years ago we moved into thefield of genetic research reagents, focusing on restriction enzymes for genetic engineering. Reagents using
the KOD® DNA polymerase PCR enzyme developed by our company, collected from unique microorganisms
inhabiting the undersea volcanic craters of Kodakara-jima Island in Kagoshima Prefecture, demonstrate aparticularly fast DNA amplification rate and accurate
replication. This has led to the reagents’ use in genetic
diagnosis and many other applications. Today, enzyme
technologies have become core technologies in the life
science business.
Unknown infectious diseases and other diseases
that threaten humanity are expected to occur again in
the future. By providing higher-performance products
to clinical testing and other markets, we will contributeto the health of people around the world and to greater
efficiency in treatment.

The life science business’s products are involved in the diagnosis and treatment of diseases, contributing
to patients and society. Hollow fiber membranes are a core product of the business. Since the late 1970s,
we have engaged in development of hollow fiber membranes for seawater desalination. We developed
artificial kidney hollow fiber membranes as one of the applications and launched full-scale production in
1984. For four decades years since then, we have provided artificial kidney hollow fiber membranes for everincreasing numbers of dialysis patients. The product features two main strengths. First, it boasts outstanding
waste removal performance with little change over time during dialysis, thanks to our proprietary film-forming
technology. Second, it features outstanding biocompatibility, with few cases of allergies. While general dialysis
membranes are made from petroleum-derived materials, our cellulose triacetate (CTA) membrane uses natural
cellulose from cotton as its starting material. This confers the advantage of very few patients experiencing
allergic reactions during treatment due to conversion of hydroxy groups that affect patients to acetate. Our
precise control of the membrane surface further prevents clogging and thus a lower likelihood of pressure
fluctuations during dialysis, letting patients undergo treatment with confidence.
We are now working with NIPRO Corporation to build a new plant capable of integrated production thatspans hollow fiber manufacturing to processing into
dialyzers (filtration devices) and commercialization, withthe start of operation scheduled for July 2024.
We have also extended our film-forming technology
to other treatments and developed concentrated ascites
reinfusion therapy (CART) membranes in 2020. These
membranes see application in treatment that filters ascites
accumulated due to conditions such as cancer andcirrhosis of the liver, then collects beneficial proteins witha concentrator and returns them to the patient’s body. We
are also advancing development of acute blood purification
membranes for patients with conditions including sepsis,
Illustration of Dialyzer using Toyobo’s CTA membranewith delivery to patients planned for fiscal 2024.

GENECUBE® fully automated gene analysis system-38-CSV examples

Environmental and Functional Materials

Contributing to enhanced performance and safety in lithium-ion batteries
HARDLEN ® sustainable adhesive

Helping to bring on the 6G communication era
HARDLEN® leverages the strength of low dielectric properties

Kenji Shiga

Koichi Sakamoto

Manager
TOYOBO MC Corporation

TOYOBO MC Corporation

Toyobo’s maleic anhydride modification technology and impurity removal production technology areboth without rival. Making use of these technologies, HARDLEN® boasts a strong advantage in themarketplace. We are currently conducting research and development into new applications. The terms“5G” and “6G” are commonly heard in the context of next-generation communication systems as an eraof ultra-high speed, ultra-low latency, and massively simultaneous connections rapidly approaches.
Technical hurdles remain, however, including those of materials. As an example, 6G makes use of evenhigher frequency electromagnetic waves than 5G does, but signal attenuation and delay problems arise
with the use of current materials. Prevention of these problems demands materials with lower dielectric
constants for use in components such as antennas. The key to technological innovation in this area is ourcompany’s impurity removal production technology. Adhesives designed around HARDLEN® are able toachieve a low dielectric constant. We are already supplying our low dielectric adhesives to printed circuitboard material manufacturers in the Asian region, and our development unit is rushing to develop ultra-low
dielectric adhesives for 6G that leverage the strengths of
HARDLEN® .
Multiple sensors and radar systems are also usedin autonomous driving systems and factory automation
systems, which are expected to proliferate in the future.
As high speed, high-capacity, and stable communication
infrastructure is indispensable for the safety of thesesystems, low dielectric properties are demanded of theadhesives used in this infrastructure. Under the belief
that our business will see use in many industrial andlifestyle scenarios and that it can broadly contribute to
the safety and security of society, we undertake our workwith enthusiasm every day.

The appearance of diverse electronic devices and the accelerated development of electric vehicles (EVs) arespurring ever greater demand for lithium-ion batteries (LiBs). The electrolytes in LiBs must be tightly sealed
to prevent internal leaks. As the batteries themselves become hot, however, high heat resistance is also
required for sealing materials and adhesives. Impurities must be thoroughly removed, as their presence in thematerials used in LiBs can result in degradation of battery performance and in fires. The HARDLEN® adhesion
promoter for polyolefin handled by TOYOBO MC Corporation is an adhesive that features excellent adhesion
to polypropylene (PP) resin. With its heat resistance enhanced through the application of maleic anhydride
modification technology, it has been adopted as an adhesive for LiB sealing materials. The company achieved
supply to customers from an early stage of the growing demand for LiBs thanks to its one-of-a-kind technologies
and manufacturing processes for removal of impurities, and boasts a high market share even now.
These technologies originate in the company’s textile dyeing technologies. About 50 years ago, the resin
known as PP faced a challenge in that while it was light and convenient, it did not dissolve in organic solvents
and was thus difficult to process and dye. Toyo Kasei Kogyo Co., Ltd.* developed a technology to chlorinate PP,
dissolve it in solvent, and dye it. The company also introduced maleic
anhydride modification technology that enables precise modificationof the chlorinated PP, for free control over its physical properties.
HARDLEN® which is able to freely bond PP to other polymers, has won
strong approval in the marketplace and has grown its market shareprimarily in automotive coating applications. As a further application,
the company developed the above-mentioned adhesive for LiB sealingmaterials and has been boosting production since 2017.
LiBs are indispensable not only for EVs but also for renewableenergy storage batteries, robots, IoT devices, and more. The stablesupply of HARDLEN® which aids battery performance and safety,
will contribute to the evolution and advancement of electronic
devices.
*Merged into TOYOBO CO., LTD. in 2010

New HARDLEN® manufacturing facility at the
Takasago Plant

Circuit board using HARDLEN ®

-39-

CSV examples

Functional Textiles and Trading

Contributing to the protection of lives
and the environment
Successful development of airbag fabric technologies

Contributing to the advancement of the domestic
recycling market through our technology
Taking on the upcycling of apparelEiichi Shimizu

Tadao Kuroki

President
TOYOBO TEXTILE CO., LTD.

General Manager
Airbag Operating Department

While the Toyobo group has established a variety of recycling
technologies, recycling related to apparel has been limited
to the reuse of fiber scrap in plants. One reason for this is thatthe development of a domestic recycling market in the field ofapparel is still a matter for the future. A considerable problem
has existed in that value creation supporting both the economy
and the environment cannot be achieved without the creation ofrecycled clothing with greater appeal to consumers. However,unlike general apparel manufacturers, our textile businessperforms integrated production that spans fiber to yarn making
and sewing. Accordingly, operating a recycling loop throughout
the supply chain will enable higher-value recycling. TOYOBOTEXTILE CO., LTD. isundertaking full-scale
upcycling of apparel,seeking to create amarket by providing highquality and compelling
recycled products inJapan.

For its heat resistance and other merits, nylon 66 has been widelyadopted as airbag fabric that protect lives in emergencies while driving.
However, the material faces issues including shortages of supply anddifficulty in recycling, leading to increased calls for polyester fabrics.
Compared to nylon, the use of polyester as a raw material is
expected to roughly halve CO2 emitted in the polymer resin production
process. A high percentage of recycled polyester materials can also
be used. Our company has undertaken the development of polyester
airbag fabric that features outstanding environmental compatibility.
The material achieves heat resistance and storability on par with nylon
66, and was adopted by automobile manufacturers in 2022.
We will continue advancing technological innovations aimed atcreating “the solutions needed by people and the earth.”Upcycled apparel products (hangers madefrom crushed and pelletized fiber scrap)

Varied types of airbags to secure greater safety-40-

CSV examples

Functional Textiles and Trading

Contributing to the prevention of damage to healthand reduction of environmental impacts
Development of adhesive-free waterproof sheets

Contributing to the reduction of environmental
impacts through high energy efficiency
Joint development of energy-saving air conditioner
components and materials together with Panasonic

Masahide Takemoto

Tatsuaki Sumitani

President
TOYOBO STC CO., LTD.

Director
Japan Exlan Co., Ltd.

The urethane coating film waterproofing and ventilation buffer method,a standard method used in rooftop waterproofing, makes use of
conventional chloroprene adhesives. This entails a major issue inatmospheric dispersion of toluene, xylene, and other chemicals containedin the adhesives. As these chemical substances are causes of damage
to site workers’ health and photochemical smog, posing a concern about
global warming impacts due to chemical changes in the smog, it is hopedthat use of the substances will be reduced or discontinued.
New asphalt self-adhering ventilation buffer sheets developed by
TOYOBO STC CO., LTD. can be directly affixed to rooftops with no use ofadhesives. This alleviates concerns
over air pollution and significantly
reduces construction work manhours as well, enabling reductionof both environmental impacts andconstruction costs compared toconventional products. Through thedevelopment of industrial materials
that take the global environment
into consideration, we will continue
contributing to both business andthe environment.
Applying waterproof material coating toJapan Exlan Co., Ltd. has developed a desiccant rotor using paper
coated with fine particles that absorb and desorb moisture throughacrylic material. Heat pump-type air conditioning is typically used inbuildings and plants. Absorbing moisture from air prior to intake by
the heat pump, followed by contact with the refrigerant, eliminates
discharge of drain water and enables highly energy-efficient cooling.
Providing humidity in winter also enables efficient heating, achieving
significant energy savings compared
to conventional heat pump-based air
conditioning.
Panasonic evaluated the desiccantrotor, which features quick regeneration
at lower temperatures and with low
energy usage and adopted for use in
its air conditioners in 2022. As a resultof achieving industry-leading energysaving performance through joint systemdesign by Panasonic Corporation andour company, Panasonic Corporation
was a recipient of the Energy
Conservation Grand Prize in fiscal 2022
and fiscal 2023.
Desiccant rotors adopted for use inventilation buffer sheets

Panasonic air conditioners-41-

Major Business Growth Strategies._I, Overview by business._I, Mitsubishi Corporation and Toyobo top management discuss the new joint vent ure

Overview by business
Please see the PDF for the overview by business(Films, Life Science, Environmental and Functional Materials, Functional Textiles andTrading), and TOYOBO MC Corporation Vice-President d ialogue.

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Overview by business

Overview by business: Films@!

Overview by business: Life Science@!

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Overview by business:
Environmental and Functional
Materials

Feature: Launch of TOYO BO MC
Corporation-42-

Overview by business: Functional
Textiles and TradingMitsubishi Corporation and Toyobo top management discuss the new joint
ventureMitsubishi Corporation and Toyobo are joining forces w ith a new company aimed at capturing the global market growth. Kotara
Tsukamoto, Mitsubishi Corporat ion Group CEO and head of the Industrial Materials Group, and Toyobo CEO Ikuo Takeuch i talked about theprocess leading t o t he pa rtnership and their vision of the new company's future.

,_,._

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Top management discuss the new joint venture in the
Integrate Report 2022 (504KB)• CSV examples (topics)• Sustainable Vision 2030
• Medium-Term Management Plan

-43-

Overview by business
Consolidated net sales
composition ratio

Films

Environmental
and Functional
Materials

Functional
Textiles andTrading

Main applications

Net sales

This consists of two fields: The industrial film business and the packaging film business.
Industrial films include films for liquid crystal polarizers, displays, synthetic paper, labels,
ceramic capacitors, etc. Packaging films include multifunctional films centered on foodpackaging, for which we maintain a leading share in Japan.

Life ScienceNet sales and operating profit(¥billion)

36.5%

146.1
Operating profit● Industrial films● Packaging films

1.6This consists of three fields: The bio business, medical materials business, andpharmaceutical contracting business. The bio business includes material enzymes
related to clinical testing, diagnostic reagents and drugs, and diagnostic systems. The
medical materials business includes materials related to treatment, such as dialysis
membranes. The pharmaceutical contracting business involves contract manufacturingof drugs.
Our high-value-added products, made possible through our proprietary technology,
include artificial kidney hollow fiber and diagnostic systems that halve the time required toobtain PCR testing results.

Net sales

9.5%

38.1

Operating profit

9.2

Net sales

TOYOBO MC Corporation launched in April 2023 as a joint venture with Mitsubishi
Corporation. Its businesses consist of the resin and chemical business and theenvironment and fiber business. Businesses that have migrated to the new company
include VYLON® ,HARDLEN® , photo functional materials, fine chemicals, engineering
plastics, aqua membranes, VOC recovery equipment, functional filters, spunbond,lifestyle materials, and super fibers.

27.7%

110.8
Operating profit4● Bio-related products● Cosmetics ingredients● Medical separation
membranes andmodules● Medical equipment● Pharmaceutical-related
products● Adhesion and coating
agents● Engineering plastics● Elastomers● Seawater desalination
membranes and modules●Environmental solution
equipment and filters● High-performance fibers● Lifestyle materials

Net sales
This consists of the airbag business, functional textile business, apparel textile business,and trading company functions (TOYOBO STC CO., LTD.). For overseas expansion, theairbag business operates under a tripolar structure in Thailand, China, and the U.S. The
textile business is advancing globally, including in Southeast Asia, China, and India.

23.1%

92.4

Operating profit

-

-44-

2.5

● A irbag fabrics and yarn● Sports, inner wear,
uniforms, and otherapparelExamples of products

Films
We will contribute to sustainability
for people and the earth
through our technologies
for high-performance films

The strengths of Toyobo

Business overview in fiscal 2023

●Films for packaging (a leading share in food packaging)● Industrial films (mold releasing films for MLCC,
polarizer protective films for LCDs, etc.)

Opportunities and risks

Muneo Hirooka
Managing Executive Officer

Opportunities● Expansion of demand for green films aimed
at a circular society and carbon neutrality● Expansion of need for reduction of plastics(increase in the value of technologies forthinner materials)● Expansion of demand for high-performancefilms as digital society advances

Risks● Rise of political instabilities around the worldand subsequent impacts on markets● Soaring costs of raw materials and fuels andincrease in procurement risks

Head of Films Division

In fiscal 2022, customers in many industries resumed production
activities, resulting in special demand. Consequently, a backlash
occurred in fiscal 2023, and the market overall remained sluggish
under multiple factors including an inventory adjustment phase.
Industrial films in particular were greatly affected by slumping
automotive production and let-up in demand for mold releasing films
for MLCC. In the area of earnings, prices of raw materials and fuelscontinued their sharp rise. Turmoil also occurred in procurement,
due to factors including withdrawal from business by domestic andoverseas manufacturers of crude raw materials and other materials.
In packaging films, our revisions of product prices were unable tokeep up with increases in raw material and fuel prices, leading to asignificant decrease in overall profit from the previous year.
Amid sluggishness in the overall market, environmentallyconsiderate films made with recycled resins, bioresins, and othermaterials are exhibiting growth beyond expectations, with demand
expected to continue growing. High-retardation LCD polarizer
protective film, an area in which Toyobo enjoys a technologicaladvantage, remained solid.
As a result of the above, net sales in the segment were ¥146.1
billion and operating profit was ¥1.6 billion (results for new segment).

Net sales and operating profit (¥billion)
Net sales(¥bn)

Operating profit-50000

146.1

FY

2023
1.6
COSMOSHINE SRF® LCD polarizer protective film

-45-FilmsGrowth strategy

We are advancing our growth strategy atop the two pillars of“progress of digital society” and “a decarbonized and circularsociety.” Our main strength lies in the polyester-based releasing
film used in the ceramic capacitor manufacturing process. Ourfilm is highly regarded for its functionality, and our capabilities
for integrated production and processing of film give us anadvantageous position in the market. We intend to undertake new
product development for this film as well as establish technology
for its recycling. We will also advance the development of new
products and applications for LCD polarizer protective film andhigh-durability and heat-resistant polyethylene naphthalate (PEN)
film for use as fuel cell sealing material.
In the area of reducing plastic waste, films stand at theforefront of environmental issues. We will reduce the thicknessof films and advance adoption of biomass-based raw materials
to help achieve a decarbonized society. Our new machinery
for biaxially-oriented polypropylene (OPP) films let us maintainstrength even in significantly thinner OPP films, contributing toa circular society through a shift to mono-materials. Films areindispensable materials in distribution and in people’s lives.
We are making efforts in individual products to increase ourenvironmentally considerate product lineup.

Capital investment and R&D investment

We plan to invest ¥80 billion under our 2025 Medium-Term
Management Plan (2025 MTP, FY2023 to FY2026), of which
about 80% is earmarked toward growth investments. We will firstcontinue increasing production and expanding sales in line withmarket recovery in high-performance films. Production capacity formold releasing film for ceramic capacitors will increase about 2.5fold through the combination of our new first and second coatingmachinery units, and production volume of COSMOSHINE SRF®
LCD polarizer protective film will increase about 1.2-fold. We will
also make active investments in the development of the highrigidity films noted earlier, in 100% bioresin films, and in films
made with recycled raw materials, as well as in the creation of
mechanisms for recycling processed films inside and outside ofour company.

(¥bn)

Net sales target of the film business
300.0

New manufacturing facilities at the Utsunomiya Plant (mold releasing film for ceramic capacitors)

250.0

220

150.0

Future initiatives

190

200.0

146.1

100.0
50.0
0

FY2023(results)

FY2026

FY2031

In fiscal 2024, we will first work to reset our pillars of earnings andrecover profitability. We will further undertake price revisions for
packaging films, a major issue remaining from fiscal 2023, andwill quickly undertake full-scale launches of new products and an
OPP film production line. Keeping a constant eye on the state ofrecovery in markets, we will meet customers’ expanded production
structures with our mold releasing film for MLCC and will proceedwith construction of a new production line. In LCD polarizer-46-

protective film, too, we will meet customers’ expanded production
structures while also carrying out price revisions.
Under the 2025 MTP, the film business is focusing its sight onthree of the five social issues of Sustainable Vision 2030. The firstof these is “employee well-being and human rights in the supply
chain.” With seven manufacturing sites in Japan and overseas,
the business considers the safety of employees, the fosteringof motivation, and the achievement of disaster prevention andzero disasters at worksites to be the most important issues for
its business bases. The next issue of focus is “a decarbonized
and circular society.” Here the business seeks to achieve Scope
1 and 2 carbon neutrality and to widely supply society with films
that contribute to the environment and resource recycling-oriented
films. Finally, with regard to the issue of “clean water areas, airand soil, and the preservation of biodiversity,” the business willcontribute to the reduction of food loss and waste through highperformance packaging films that maintain food freshness. In thisbusiness, we will set individual targets for these issues, make themknown throughout the company, and tackle them together.
On the theme of resource recycling, initiatives at the levelof the company or this business face limits in increasing theefficiency and efficacy of recycling. Accordingly, we are actively
taking part in resource circulation initiatives that span industries,
including the creation of mechanisms for the recycling of films forceramic capacitors with the involvement of electrical and electronic
products manufacturer customers, as well as a recycling project forlabel paper (KAMISHINE® mold releasing film) in cooperation withmedical manufacturer and printing industry customers. We hope to
expand our recycling technologies not only within Japan but also
into initiatives that cross national borders.

Life Science
Through our proprietary
technologies, we are aiming
for the top of our global niche
and will contribute tohealthy living and health carefor people worldwide

The strengths of Toyobo

Business overview in fiscal 2023

● Integrated development and manufacturing that spans raw
materials to end products in the diagnostic reagent and drug
domain; securing of dominance in quality●Film forming technology for hollow separation membranes(development began in the 1970s)● Exclusive position in the global market for CTA membranes fordialysis applications

Opportunities and risks

Opportunities● Expansion of demand for genetic testing (PCR)
amid the spread of infectious diseases●Acquisition of national policy-based
development support and subsidies for
antibody drugs and testing systems

Risks● Sharp exchange rate fluctuations● Soaring oil and coal prices due to shift awayfrom fossil fuels● Shortages of supplies of goods procured
overseas

Takahito Sagara
Managing Executive Officer
Head of Life Science Division

In the bio business, sales of PCR test reagents decreased ascases of COVID-19 infections fell significantly in the 4th quarter,
but sales of raw material enzymes for diagnostic drugs andgenetic testing reagents in overseas markets remained strong. To
expand the infection diagnosis solution business, in fiscal 2023
we introduced new products including in vitro diagnostics andreagents for simultaneous detection of whooping cough bacteria+ para whooping cough bacteria, SARS-CoV-2 + respiratorysyncytial virus, and SARS-CoV-2 + influenza virus.
In the medical materials business, sales of artificial kidney
hollow fibers remained strong but were affected by soaring pricesof raw materials and fuels. In policy measures, the business madepreparations for the implementation of market evaluations aheadof the market launch of continuous renal replacement treatment(CRRT) in the next fiscal year.
The contract manufacturing business of pharmaceuticals
ran up expenses related to dealings with the U.S. Food and Drug
Administration (FDA), but sales recovered as production andshipment of over-the-counter formulations resumed in turn.
As a result, net sales in the segment were ¥38.1 billion andoperating profit was ¥9.2 billion (results for new segment).

Net sales and operating profit (¥billion)
Net sales(¥bn)-50000Operating profit

38.1

FY

2023
9.2
Reagents for the GENECUBE® fully automated gene analysis system SARS coronavirus nucleic acid kit-47-

Life Science

Capital investment and R&D investment

In the bio business, we have invested about ¥6.5 billion in the
Tsuruga Biochemicals Plant to create new manufacturing facilities,
and are undertaking development of raw materials for PCR test
reagents and genetic diagnostic drugs along with strengthening ofour production system. A third cultivation and purification building
will be built in first-stage construction, going into operation in April
2024. A research reagent building and genetic testing building
will be built in second-stage construction, with completion andoperation expected during fiscal 2025. We plan to further continue
investments with the aim of tripling development and production
capacity.
In the medical materials business, we have invested about¥5 billion in the launch of an integrated production plant for dialysis
equipment together with NIPRO Corporation. As this business’s
hollow fiber membrane manufacturing site is located in Yamaguchi
Prefecture with assembly performed at a customer’s plant in Akita
Prefecture, issues have occurred in dealing with customers and therisks of long-distance transport. With the new investment, we areconstructing and readying manufacturing facilities in an integrated
production plant that connects our hollow fiber membranes and
NIPRO’s Odate Plant assembly lines, with the building structure
and other components already completed.
Full-scale shipment of products is scheduled for July 2024.
We have also been tackling the development of CRRT withthe aim of entering the field of acute blood purification therapy forconditions such as sepsis. In May 2023, we were granted approvalby the Pharmaceuticals and Medical Devices Agency (PMDA). We
will continue investing in a manufacturing and sales structure toachieve market launch in the near future.

meet strict standards, we are constructing a leading world-classquality management system (QMS) along with structures for drug
manufacturing management and quality control standards (GMP).
To deliver peace of mind and smiles to people worldwide, we have
put forth a business policy of seeking to maximize future value.
Nearly all of the main products of the bio business are used inclinical testing, but its product groups are largely unrelated to each

80

80.0
60.0
40.0

38.1

40

Realizing sustainable growth

20.0
0

FY2023(results)

FY2026Growth strategy

The Life Science Division is tackling innovation by generating
new chemical reactions, combining the cutting-edge technologies
that Toyobo has built up in the medical treatment, medicine, andpharmaceutical fields. As technologies and products related to
medicine cannot be supplied without production structures that(¥bn)

Net sales target of the life science business
100.0

other. Accordingly, we are working to concentrate resources in thefield of epidemiology, establish the Toyobo brand in the infectious
disease testing market, and provide value through one-stop
solutions for infectious disease.
In the medical materials business, we are focused on thedevelopment of applications other than membranes for dialysis,
including acute blood purification membranes and process
separation membranes that take our strengths in hollow fiber
membrane manufacturing technology as their starting point. In
the field of process separation membranes in particular, we havebegun supplying products to major overseas vendors and areengaged in sales promotions toward major manufacturers in every
market. We will also focus on our Bonarc ® bone regenerationinducing materials in the dental area, constructing a stable supply
structure to contribute to new dental treatments.

Integrated production plant for dialyzers-48-

FY2031This division is active in the areas of diagnosis and treatmentin the patient journey. While these areas largely go unseen by
the general public, they make great contributions to health andtreatment for people around the world. As one of the social issues
in Sustainable Vision 2030, we are focusing on “a healthy lifestyleand health care.” Our people involved in this business work withgreat pride.
To make a greater contribution to society by providing higherperformance products to the clinical testing market in the diagnostic
area, we are tackling two targets in the bio business: A yearly 10
million tests that contribute through the provision of diagnostic
drugs for infectious diseases, and a 30% market share in raw
materials for biochemical tests, etc.
In the medical materials business, we will take advantage
of our world-class hollow fiber development and manufacturing
technologies, as well as our materials development capabilities, toexpand into the area of treatment, thereby contributing to society
through products that medical professionals and patients can use
with confidence.

Environmental and Functional Materials
Contributing to solving
the world’s issues throughhighly functional materials

The strengths of Toyobo

Business overview in fiscal 2023

● A new corporate body created through a functional materials
manufacturer and a general trading company● Uniqueness of technology, development capabilities,
responsiveness, and ability to comprehend needs● G lobal expandability leveraging our network of overseas sites
and wide-ranging points of customer contact

Opportunities and risks

Chikao Morishige

Opportunities● The global trend toward a circular society andcarbon neutrality (holding of manytechnologies)● Overseas expansion through co-managementwith a general trading company

Risks● Soaring costs of raw materials and fuels andincrease in procurement risks● Alliances between textile and chemical
manufacturers● Intensification of market competition due tosignificant changes in business conditions

Representative Director & Co-COO
Head of Environmental and Functional
Materials Division
President & Representative DirectorCEO
TOYOBO MC Corporation

Net sales and operating profit (¥billion)
Net sales(¥bn)

Operating profit

110.8

FY

2023
4

-49-

In fiscal 2023, the final year of financial results under the previous
segment categories of Toyobo group, soaring prices of raw materials
and fuels and other significant changes in business conditions
yielded severe results.
In the environmental solution business, sales of VOC recovery
equipment for lithium-ion battery (LiB) separator plants andreplacement elements were strong under growing demand for LiBs
amid global adoption of electric vehicles (EVs). Non-woven materials
struggled as revisions of product prices were unable to keep up
with increases in prices of raw materials and fuels. In particular, thebusiness was unable to effect price pass-through in products forcivil engineering and construction while quantities did not recover in
automotive-related products, resulting in an operating loss. We plan
to advance reforms including a review of production capacity. Sales
remained strong for high-performance ZYLON® fiber, primarily forarchitectural reinforcement and bicycle tire applications. Sales of
IZANAS® remained strong, primarily for fishing line applications.
As a result, net sales in this segment were ¥110.8 billion andoperating profit was ¥4 billion (results for new segment).

Start of a new company

TOYOBO MC Corporation began operation in April 2023 as a joint
venture between our company and Mitsubishi Corporation. Our aim
is to grow the environmental and functional materials businesses
shouldered by the new company as a third pillar of the Toyobo
group, alongside the film business and life science business.
The businesses cover many functional, cutting-edge products
based on Toyobo’s proprietary technologies, including functional
resins and environmental solution systems. Looking back, however,net sales of these have been sluggish in terms of growth, withoverseas expansion in particular presenting challenges. In response,
we made the decision to create a new “manufacturer + general
trading company” framework, in order to grow the business throughToyobo’s commitment to technology combined with the overseas
expansion and marketing capabilities of Mitsubishi Corporation.
From the day the business launched, we began efforts to-50000Environmental and Functional Materials

enhance the solidarity of the employees. The initiatives haveincluded briefings on the Medium-Term Management Plan (MTP);
training camps for managers; Medium-Term Management Plan
caravans (dialogues with top management) for three divisions,domestic and overseas workplaces, and affiliated companies; anddialogues with vice presidents.

Growth strategy

To achieve target sales of ¥600 billion for the Toyobo group in
fiscal 2031 as set out in Sustainable Vision 2030, we believe thatthe achievements of the Environmental and Functional Materials
Division will be instrumental. In this business, we are aiming for net
sales of ¥250 billion in fiscal 2031, with ¥145 billion in fiscal 2026,
the final year of the Medium-Term Management Plan. To achieve
this high target, we will strategically roll out initiatives that take abird’s-eye view of the materials value chain and the industry overall.
Specifically, we are tackling individual businesses divided into
“growth,” “revenue enhancement,” and “business reform” categories,
and, through fiscal 2026, are making efforts aimed at expanding
applications in existing businesses while leveraging the information

Net sales target of the environmental and functional
materials businessnetwork of Mitsubishi Corporation. From fiscal 2026 onward, we will
broaden our development of new technologies to meet new needs
and speed the cycle overall, while advancing M&A and corporate
alliances.
This growth strategy represents a major challenge for Toyobo
group. We are committed to achieving significant business
transformation in terms of three points: Global penetration andexpansion of our customer base which has been centered onJapanese companies in Japan and overseas, acceleration of ourdevelopment cycle, and enhancement of production efficiency.
Positive evaluation from our customers will be indispensable inachieving this. We intend to grow TOYOBO MC Corporation into a
company that customers can trust to create things in responseto requests.

(¥bn)

300.0

250

250.0
200.0
150.0

145
110.8

100.0
50.0
0

VOC recovery equipment

FY2023(results)

FY2026

FY2031-50-

Future initiatives

Among the five social issues named in Sustainable Vision 2030,
we recognize that “a decarbonized and circular society” and “cleanwater areas, air, and soil, and the preservation of biodiversity” inparticular involve aspects to be shouldered by this business.
Within its Vision of “solving the world’s issues through highly
functional materials,” TOYOBO MC Corporation has put forth threematters to address as its Mission: (1) Ceaselessly transforming
itself, (2) Connecting material technologies to future needs, and (3)Engaging in co-creation to solve social issues. On this foundation,
the company will make every effort to enhance its corporate value
by solving social issues.
Materials that achieve lighter weight and greater functionality inthe field of mobility, along with components and materials required
for flexible printed circuits (FPCs) and for the LiBs vital to the shift
to EVs, are the core products of TOYOBO MC Corporation. In theenvironmental field, the company will be able to ably leverage aqua
membrane technologies and effluent treatment technologies in LiB
manufacturing, contributing to the effective use of water and otherresources and to the reduction of environmental impacts. Osmotic
power generation using aqua membranes, now at the stage ofpractical application in Denmark, is considered highly promising for
deploying high-performance fiber in offshore wind power generation.
These are technologies that will contribute greatly to carbon
neutrality. The business’s products bring together elements that canmake general contributions to the environment despite their differing
scopes. We believe that we will be able to expand the business on
the back of worldwide megatrends.

Feature

Launch of TOYOBO MC Corporation
TOYOBO MC Corporation (TMC), established by Toyobo
TOYOBO MC Corporation (TMC), established by Toyobo andand Mitsubishi
Corporation
new joint
ventureto
Mitsubishi
Corporation
as a new as
jointaventure
to plan,develop,manufacture,andmanufacture,sell functional materials,
operations
onplan, develop,
and sell began
functional
materials,
April 1, 2023. We spoke about TMC’s growth strategy with vicebegan
operations
on
April
1,
2023.
We
spoke
about
presidents from both parent companies, who have been involved inthe
new growthcompany’s
launch frompreparation
stage
onward.
TMC’sstrategy
withthevice
presidents
from
both
parent companies, who have been involved in the newcompany’s launch from the preparation stage onward.
The road to the launch of a new company
The fusion of the two companies will create a stronger, moreinteresting company
Fujii I was involved in preparations for the company for about two

years from the start of the project. From 2022, I served as the officer
in charge of establishing a new company. During the process, I
had many discussions with Mitsubishi Corporation. What I think
connected the two companies, in a word, is fate.
Toyobo’s environmental and functional materials business,
which the new company is succeeding, is an areathat enjoys cutting-edge technology, yet has not beenable to grow significantly. I sensed a risk that growth
could become even more problematic for the businessduring a phase of rising management costs
for reasons such as environmental
response. I wondered whether
insufficient marketing capabilities
in Toyobo, especially in terms ofoverseas marketing and deployment,
might underlie the inability tosignificantly expand thebusinesses. If it were amatter of just one business, working with manufacturers could yield
greater synergy. However, transferring 12 businesses and growing
them significantly definitely requires comprehensive strengths. The
partner who offered those strengths was Mitsubishi Corporation.
Baba I think there are two main things expected of Mitsubishi

Corporation.
One is marketing, a traditional strength of trading companies.
Mitsubishi Corporation has enormous contact area in regions andindustries around the world, which we will leverage to increase
opportunities for entry into customer bases, regions, and markets
that have eluded Toyobo so far.
Another expectation is for the knowledge and experience gained
from sending management teams to about 1,700 companies in which
Mitsubishi Corporation has invested. Incorporating the good partsof the company’s problem-solving know-how, including technicalsupport, overseas regulatory compliance, and governance measures,
into TMC should enable a stronger, more interesting company.
Fujii Mitsubishi Corporation has very compelling functions andassets, including a 110-site network, global information capabilities,
the intelligence functions to analyze that information, and planningcapabilities. Mitsubishi Corporation has also been investing heavily
in carbon neutrality, and is developing a lot of clean energy witha focus on wind power generation. I believe that this will makeconsiderable contributions to expanded use of Toyobo’s energyrelated materials, as well as to the advance of energy conversion at
production sites.
Trough our discussions, I’ve felt a difference between two
companies in terms of sense of speed and persistence, a weak
point for Toyobo. This sort of cross-cultural integration itself is a

Juro Baba

Dialogue

Executive Vice-president &Representative Director, COO
Controlling Supervisor ofPortfolio Management
TOYOBO MC Corporation

The strengths of TOYOBO MC Corporation
Meeting the needs of society with technology, information, andplanning capabilities
Baba TMC has already announced its medium- to long-term
management targets. Approaching those high targets will require
growing existing customers while also cutting into new customers
and markets not yet reached. Decarbonization has become alarge movement over the past few years, and we’ve arrived at
an era that demands a change from the passive environmental
response of the past to an aggressive environmental response.
Toyobo has many materials that are needed now, not only inJapan but across the world. These include engineering plastic
materials that contribute to weight reduction in electric vehicles(EVs) and low dielectric adhesive raw materials that are required
for the advance of digitalization. In talks with several companies
before the establishment of TMC, I heard many times that Toyobo
is a company that has the creation capabilities to properly meetcustomers’ detailed demands.

Fujii We had discussions with Mitsubishi Corporation about
how we want to make TMC a company with technology at its core.
Although the company’s materials all contribute in different forms,
they all hold the potential to be environmentally conscious. In the
coming era of providing solutions rather than materials
themselves, it will be important to use materials andtechnologies to solve the problems
customers face. I think that if we
can also uncover and suggest
issues that customers are notaware of, we can make evengreater contributions. I believe
Director, Vice President, Executive Officer,that we’ll be able to achieve
Assistant to the President, Special Mission
this by combining the strong
Officer, CCO
technical capabilities of

Naoki Fujii

TOYOBO MC Corporation-51-

major factor in growth. I have expectations that growth opportunities
for human resources, including experience at overseas sites, will
broaden.

Toyobo with the high-level information and planning capabilities ofMitsubishi Corporation.
Baba Mitsubishi Corporation has continued to think about where
the world’s needs lie, and what we can connect, and how, in order toaddress those. As long as we can learn where the needs are that callfor TMC, we can consider what to make and then execute on that,which is Toyobo’s area of expertise. This fusion is our greatest strength.
As an example, even as a circular society advances, there arestill many plastics that are thrown away without recycling. To recycle
these, their materials must be recyclable to begin with. It is also
important to create mechanisms for the recycling of these materials. If
we can participate in the creation of regulations and rules for countries
and industries to create such social mechanisms, and propose
materials to customers, I think that would be really interesting.

Reviewing organizational design
Going beyond the conventional boundaries of materials
manufacturers
Fujii In the organizational design of TMC, I thought it would be goodto review our organizations so far. In Toyobo, the growth potential
of individual businesses reached limits because of silos created inorganizations under the vertical divisions of the business division
structure. I thought that we should first change these vertical divisions.
Baba Right. I think that the business division structure, withbusinesses subdivided and with sales, production, and development
integrated, functioned extremely efficiently interms of quickly responding to customers’

needs. Since the 1990s in particular, with no large new products
appearing and sales stagnant, the company overcame difficult times
through solid earning in small units.
However, looking at what’s important in a phase where thecompany aims for further growth, I think there are two things. The
first is bold allocation of management resources. When verticaldivision is strong, maximizing its own return becomes the goal for
an individual organization, which leads to the encircling of humanresources and funds. Taking down such walls and creating afunctional division structure at TMC, capable of making concentrated
shifts of people and funds, was a major decision.
The other important thing is the achievement of co-creationthat goes beyond businesses and products. Until now, cooperation
among business departments has been weak, and we’ve been
unable to make multifaceted responses even when potential arises
to provide varied products and solutions. As the needs of the world
become increasingly complex, solving problems through a single
product will likely become difficult. A mindset of proposing solutions
that combine several businesses or different products, or of goinghorizontal and introducing other business divisions depending on theissue, will be important.
As information sharing is the key to functional organizations,to address adverse effects such as increased difficulty incommunicating, we established strategic planning departments
at three functional divisions to facilitate information sharing andoperations. These departments shoulder a big role in achieving
cooperation among divisions.
Fujii There is no correct answer to the question of what form
organizations should take. The answer naturally changes according
to goals and strategy. With the new company, I expect that a lot ofJuro Babathings will come to light through the change to function-specificorganizations.

A wonderful fusion
A shiny new company with a one-of-a-kind corporate culture
Baba I was surprised that the two companies, which both havelong histories, share a common corporate philosophy of viewing
contribution to a prosperous society as the purpose of their businessactivities, going back to our “Jun-Ri-Soku-Yu” and Mitsubishi
Corporation’s “The Three Corporate Principles,” corporate
philosophies set by our companies’ respective founders in the Meiji
era. I feel that, flowing beneath, there was something very common
to both companies. In terms of work, however, there’s a difference
akin to that of hunting people versus agricultural people. There’s astark contrast between Toyobo, which advances matters carefully
and accurately to avoid any mistake, and Mitsubishi Corporation,
which tends to first take action and think on the run. With thosecompletely different corporate cultures coming together, I want to
see the good parts of each merge, to create a company with a new
culture not seen before.
Fujii Yes. I think it’s a fusion of dissimilar things. One goal of TMC
is enhancing the mobility of people. This may be a brash thought,
but I want to implement human resource development that takes a
step forward to let employees grow through diverse experiences, bymeans such as creation of opportunities for inter-company learningthat includes Mitsubishi Corporation too, rather than interaction within
TMC alone. Creating a shiny, new company with a wonderful corporate
culture is what I see as my biggest
mission as a vice president.

Naoki Fujii

April 1990

Joined Mitsubishi Corporation

April 1987

Joined TOYOBO CO., LTD.

September 2001

Mitsubishi Corporation (Americas)

November 2007

General Manager, Procurement Department

April 2013

Corporate Planning Department

April 2022

Appointed Executive Officer

June 2011 	General Manager, Planning and Management Functional
Materials

July 2022	Senioir Vice President
Special Appointments
General Manager to Industrial Materials
Group CEO

April 2015

Manager, Iwakuni Production Center

April 2018

Manager, Corporate Planning Department

April 2021

Appointed Executive Officer-52-

Functional Textiles and Trading
Executing business portfolio
reform to arrive at what ourbusiness should be

The strengths of Toyobo

Business overview in fiscal 2023

● Know-how for deployment of biodegradable fibers, developed
as a synthetic fiber manufacturer, to airbags● A product lineup friendly to people and the earth● Polymerization and modification technology developed as
Japan’s first acrylic fiber manufacturer

Opportunities and risks

Opportunities● Expansion of business opportunities throughreplacement with environmental materials(biodegradation and recycling)● Restructuring of the environmental materials
industry, strengthening of corporate
constitution through alliances, and expansionof opportunities

Risks● Soaring prices due to monopolization anddiscontinuation of production of
biodegradable, recyclable, and other small-lot
raw materials● Risk of acceleration of business closures bydomestic subcontractors in the apparelindustry, and risk in securing labor in plants

Shigeo Nishiyama
Senior Managing Executive Officer
Head of Functional Textiles andTrading Division

In this business, we are making efforts to carry out a businessreform master plan for arriving at what our business portfolio shouldbe, based on the 2025 Medium-Term Management Plan.
In fiscal 2023, businesses were significantly affected by soaring
prices of raw materials and fuels, with exchange rate factors causedby sharp depreciation of the yen also having a negative impact.
Amid this, sales and profit were led by thobe, traditional Middle
Eastern apparel. We were able to pass along nearly all of theincrease in raw material prices but struggled significantly in passing
along fuel prices, with the result that performance declined otherthan in TOYOBO STC CO., LTD.
As a result, net sales in this segment were ¥92.4 billion andoperating profit was - ¥2.5 billion (results for new segment).
With the exception of cost increase factors, progress was madeaccording to schedule in addressing issues in each business. We
expect that exchange rate impacts will be mitigated throughnew contracts.

Net sales and operating profit (¥billion)
Net sales(¥bn)

Operating profit-50000

92.4

FY

2023
-2.5
Thobe, traditional Middle Eastern apparel-53-

Functional Textiles and Trading

Business strategy

Under its vision of creating small comfortable changes in living
through textile technologies, the business is working to develop
and commercialize distinctive technologies that find use in varied
lifestyle scenarios. The division’s business is diverse, covering
many products related to everyday living. To solve users’ concerns
and issues, we intend to leverage our technical and development
capabilities and use trading company functions to bring together
wide-ranging knowledge and skills, then commercialize andglobally deploy these. We will abandon the idea of continuing
through our own efforts, and will enhance our strategies throughalliances with other companies and other industries, including
industry restructuring. With regard to the social issues noted in
Sustainable Vision 2030, we are strengthening our initiatives related
to “employee well-being and human rights in the supply chain” and “adecarbonized and circular society” in particular.
Based on our master plan, we are working to achieve early
profitability, prioritizing “withdrawal from unprofitable businesses
and products,” “optimization of production scale and personnel,”“pass-through pricing to address cost increases,” and other items inorder to earn an appropriate marginal profit rate in each business.
We entered the airbag business through non-coated fabrics.
We also manufacture silicone coated fabrics at present, but inthe recycling society of the future, non-coated fabrics that do not
require removal of silicone will grow in importance. Our know-how
in the utilization and manufacturing of biodegradable fibers is also
a strength. We are steadily carrying out our roadmap for achieving
profitability and are moving forward with negotiations on base pricerevision, integration of product numbering, proper allocation, andreview of shared expenses. Toyobo Indorama Advanced Fibers Co.,
Ltd. (TIAF), a joint venture with Indorama Polyester Industries PCL(IPI) to manufacture airbag yarn, began operation in October 2022.
We are working to achieve stable operation as quickly as possible.
The functional textile business is carrying out improvements
to its human capital structure, with the start of a new structurescheduled for March 2024. Together with this, we are also
undertaking transfer of production technology to Toyobo Textile(Malaysia) SDN.BHD.
In the textile business, our founding industry in which we haveaccumulated over 140 years of technologies, we have carried out
integration and reorganization of group companies with the goal ofenhanced profitability and asset efficiency, and launched TOYOBOTEXTILE CO., LTD. in April 2022. Through the consolidation of threeplants and a return to profit through integrated business operations atoverseas sites, we aim to establish a foundation for profitability. The
greatest advantage of woolen menswear company Miyukikeori Co.,
Ltd. is its status as a luxury brand capable of integrated productionthat spans yarn, weaving, processing, and sewing. The company
is also developing the world’s finest, lightest class of fabrics using
ultra-strong yarn (Manerd® wool technical hybrid yarn). Whileachieving stable management through enhanced efficiency in the
textile business, we are engaging in selection and concentration ofbusiness partners (moving away from department stores and toward
high value-added apparel).
Responding to a sharp rise in construction steel materials andconstruction-related costs, acrylic fiber company Japan Exlan Co.,
Ltd. conducted a review of its original revitalization plan, and has
undertaken a new start. The company will shift to OEM for acrylic
raw cotton, improve the efficiency of its production processes,
and carry out sales strategies and sales expansion measures that
include external collaboration.
The trading company TOYOBO STC CO., LTD. will focus on the
expansion of new commercial flows with Toyobo group companies
and on expansion of proprietary technical products.

Completion of a nylon yarn production plant for TIAF’s airbags on the grounds of IPI-54-

Communication with Stakeholders

As a member of society, we meet the expectations

We engage in active communicat ion w ith ou r

The indexes in which we are included as well asof our stakeholders and contr ibute to t hestakeholders to enhance our corporate value.

evaluations from ESG rating agencies are as fol lows.

susta inable development of t he commun ity throughcollaboration w it h our partners to solve social issues
and cooperat ion in t he areas where we operate.

-55-

Dialogue with Stakeholders
Materiality
Related ESG : S G
Partnership: Stakeholder engagement'1, Policy and approach'1, Dialogue with stakeholders and investors

Policy and approach
Based on its corporate philosophy Jun-Ri-Soku-Yu (adhering to reason leads to prosperity), the TOYOBO Group Charter of Corporate
Behavior states "Communication with stakeholders: We w ill carry out fa ir and appropriate information disclosure and enhance corporate
value through communication with our stakeholders." In accordance with this basic approach, Toyobo group actively disseminates
information and engages in communication activities. The content of activities are also regularly reported to the management team. The
group strives to dissem inate information in a timely, appropriate, and accurate manner to society as a w hole, including our stakeholders
such as customers, suppliers, shareholders and investors, employees, and local communities.
In our com munication activities, w e aim to promote an accurate understanding ofToyobo group and continuously enhance t he Toyobo
brand and corporate value whi le bu ilding relationships of trust by striving for two-way communication with stakeholders and the w idersociety as a w hole.

Basic approach to information disclosure
Toyobo group endeavors to provide timely and appropriat e information disclosure w ith consideration g iven to fairness and impartiality inorder to continue to be a trusted company. The group also communicates actively with stakeholders, includ ing shareholders and investors,
to enhance its corporate value. These activities are based on the following approaches.
a. Information disclosure as a social responsibility (accountability)b. Communication to enhance corporate valuec. Communication to prevent damage to corporate value<Targets>
As a member of society, Toyobo group w ill meet the expectations of stakeholders and contribute to the sustainable development ofcommun ities th rough collaboration w it h pa rtners and cooperation in the regions where the g roup operates w ith t he aim of solving social
issues.

-56-

< KPis and results>
Initiatives• Active dissemination of information.
strengthening of disclosure

KPis

Results(FY2023)

Targets (FY2023)

1. No. of press releases

75 per year103

2. No. of interviews with investors

150 per year•

124

3. Frequency of meetings with employees
and labor unions

At least 30 times
per year77

4. Frequency of engagement withstakeholders

Twice a year3

• Dialogue with shareholders and investors• Dialogue with employees• Collaboration and dialogue with industry,
government, and academia• Coexistence with local communities* Target covers the period from August 2022 to July 2023

Dialogue with stakeholders and investors

Financial results
Every fiscal year, our company holds financial results briefings for financial institutions, includ ing for institutional investors and analysts.
The President personally provides briefings for full-year and second quarter financial resu lts, explaining t he details of the results andfuture management policy.
For first quarter and third quarter results, t he Executive Officer controlli ng IR operat ions conducts online briefings of resu lts.

IR information
Toyobo is enhancing and expedit ing information d isclosure in Japanese and English on the company's investor relations website.
Toyobo also provides its "Business Result Presentation", "Annual Securities Report", "Flash Report", "Integrated Report", "Fact Book".
"Investors Guide" on its investor relations website together w ith archives. Timely disclosure materials (financial results, etc.) are posted on
the investor relations website at the same t ime as public announcements are made.
In addition, Toyobo provides on-demand streaming of presentation videos for a certain period after the date of the financial resultspresentations. In FY2021, w e began d isclosing briefing scripts in addition to t he Q&A summaries. In FY2021 , we extended the posting
period of on-demand distribution, Q&A summaries, and briefing scripts from three months to one year, to promote fair informat ion
d isclosure.
Going forward, Toyobo w ill endeavor to enhance the materials and funct ions it provides to facil itate ease-of-use for all shareholders andinvestors.

-57-

Annual general meetings of shareholders
The Annual General Meeting of Shareholders is held each year in late June at Toyobo's Head Office in Osaka.

Number of shares and shareholders (As of March 31 , 2023)
Number of shares authorized for issue

200,000,000
89,048,792(Including 723,040 treasury shares)

Shares issued to date

66,591

Number of shareholders

Composition of shareholders (Based on number of shares held) (As of March 31, 2023)

Securities;;~;ies-.\

Other domestic, - - - - companies

4.05%

Fo: ~gn _,companies

and others

21.1 1 %Employees
Toyobo group communicates with employees by introducing the company's management policies and activities th rough various media
such as the group newsletter in t he booklet, the intranet, and the company-wide bulletin board.
The group has started an "organizational culture and j ob satisfaction survey" for all employees from 2021 .
• Human Resource Management> Employee engagement• Dialogue between management and labor
Meetings of the Central Management Council, attended by representatives of t he labor union headq uarters and of company management,
are held once a year. and meetings of the Branch Management Councils are held once a year at each of t he nine branches in Japan.
The labor union is represented at meetings of the Cent ral Management Council by staff from the union headquarters, and is represented
at Branch Management Council meetings by staff from the relevant union branch, while the company is represented by the President atmeetings of the Central Management Counci l, and by the business site manager or plant manager at Branch Management Council
meetings.

• KAERU activities
In April 2018, w ith the support of a maj ority of it s employees, Toyobo group started t he KAERU activities (kaeru means "to change")
throughout t he company w ith the participation of all officers and employees. Wit hin this activity, we hold presentations, talk sessions,d ialogue, and exchange workshops to deepen communication between officers and employees.
- Presentations and t alk sessions: FY2023: Conducted 3 times (t otal number of times conducted since FY2019: 25, with 1,470 part icipa nts)

* Number of participants is not noted for FY2023 due to v ideo streaming.
- Dialogue and exchange workshops: FY2023: Conducted 142 times, w it h 2,439 participants (total number of times conducted since
FY2019: 284, w ith 4,561 participants)-58-• Evening Learning
Lunchtime Learning, a program initiated in June 2022, was renewed as Evening Learning from FY2024, a program for employees of ourgroup held every month during after-work hours.
Changing the time of the program from lunch breaks to aft er work has enabled part icipation by a wider range of persons in the g roup.
It is intended to provide an opportu nity for employees to communicate w it h each other while lea rning about what kind of work is being
done at t he group company. In addition to participation at the venue, we also offer webcasts, which are attended by teleworkers andemployees outside the head office. The event s have been great successes, w ith many participants each time.
In FY2023, we conducted sessions 10 times, w it h attendance by 1,100 persons (including online sessions).

First "Evening Learning"session• In-house dissemination and awareness-raising activities related to sustainability
As a means of enhancing employees' awareness of susta inabi lity and putting sustainability into practice, ou r company regularly publishes"Sustainability News" to share up-to-date information on internal and external init iatives and other news concerning sustainability.
Every year in January and February, we hold a "Sustainability Week" to raise awareness among employees through events, dist ribution of
educational content, and more.

Overseas business sites
In response to the globalization of its business activities, Toyobo group engages in communicat ion with overseas business sites.
Each year, local staff of overseas business sites v isit Japan for training. The curriculum is available in Eng lish and Japa nese and has thet hree following objectives.
a. Deepening understanding of Toyobo;b. Deepening interaction with Japanese employees;c. Applying what learned in the home countries of trainees.

Toyobo also has an overseas business training system for selected young employees to spend six months out of a one-year program at an
overseas business site learning the basics of language, culture, and overseas business while interacting with local staff.
As cross-border mobility had been sharply restricted by the COVID-19 pandemic through t he previous year, we took care to shorten thed istance between ourselves and contacts overseas as much as possible using web conferencing and other digital technologies. This year,
the pandemic is finally subsiding, and travel restrictions have been eased . We have resumed on-site visits, and, using these in conj unction
w ith web conferencing, are making efforts to communicate more closely than ever w ith o ur overseas sites.
Our President is also resum ing overseas site visits, w ith plans to visit several group companies each year to d irectly encourage local staff
and staff stationed overseas.

-59-

Stakeholders
Toyobo carried out six cases of communication in FY2023 - FY2021 ( Position at that time ) :• In October 2020, " ESG as a demand of the times "Mr. Megumi Sakuramoto, Ch ief ESG Analyst, Investment Div. Responsible Investment Group, Asset Management One Co., Ltd.
• In January 2021, " Corporate sustainability initiatives at Mitsubishi Corporation "Mr. Takehiro Fujim ura, General Manager. Corporate Susta inability & CSR Department, Mitsubishi Corporat ion• In December 2021, "Mitsui Chemicals Group's approach to ESG promot ion"
Mr. Ken Migita, Genera l Manager, Corporate Sustainability Divisio n, Mitsui Chem icals, Inc.
• In June 2022, " Business and human rights ~ Human rights initiatives in the Corporate Sector"
Ms. Akiko Sato, Business and Human Rights Liaison Officer, United Nations Development Programme• In September 2022," BASF initiatives to accelerate sustainability management"
Mr. Hiroki Ishida, Representative Director and President, BASF Japan Ltd.
• In February 2023, "Practice of sustainabil ity and information disclosure • Initiatives based on the ISSB disclosure draft-"
Mr. Katsuya Kikuchi, Head of Responsible Investment Department.Tokio Marine Asset Management Co.,Ltd.

M r. Megumi Sa kuramoto

Mr. Takehiro Fuj imura

Mr. Ken Migita

Chief ESG Analyst, Investment Div.

General Manager; Corporate

General Manager, Corporate

Responsible Investment Grou p, Asset

Sustainab ility & CSR Department,

Sustainability Division, Mitsui

Ma nagement One Co., Ltd.

Mitsubishi Corporation

Chemicals, Inc.

M r. Hiroki Ishida

Mr. Katsuya Kikuchi

Representat ive Director and President,

Head of Responsible Invest ment

BASF Japan Ltd.

Departm ent,Tokio Mar ine AssetManagement Co.,Ltd.

Local communities
Please see the Social Contribut ion page for more deta ils.
• Social Contribution-60-

Ms. Akiko Sato
Liaison Officer; UNDP

Dialogue with ESG Investors
We are engaging in act ive communication with our stakeholders to enhance our corpo rate value.
Please see below for the contents of the dialogues.

I..__.,_.,...,_■ Dialogue with ESG Investors

Dialogue v.ith ESG Investors..

____ ..,,.________ _---···"'·-----·-·---- ----..~--

Uli"9 ~ - ' a TIN AllalH:ll MdlfN All«utn•q,.,ldottu,c,. . . . .~ ~ - " - ' » '--------.... ______..
~-~-···--·---.........
..
· -"•-· -._..
-~---___----_ _,..,____.. ..-·~-·..___ _···--·---·
.

~

,_

_,

_.

_· ______- ----- --·---~-=-~~-='~-·---··--··---....____.._____ .,,_,._,....

.-,,_,.

____, ......
====-=--=--===--__----~---.. ___...... -·----. ... ____--...---~_,

Toyobo President Ikuo Takeu chi sat down w ith M r. Megumi Sakuramoto, Executive

Toyobo President (At the time) Seij i Narahara sat down w ith M r. Ken Shibusawa,

ESG Analyst at Asset Management One Co., Lt d. to d iscuss t he sustainable growth offounder of Commons Asset Management and the great-great-grandson of Toyobo

the Toyobo group on May, 2022.

founder; Eiichi Shibusawa, to talk about sustainability within the Toyobo group on
May, 2020.

Dialogue with ESG Investors in t he Integrate Report 2022
(223KB)

Dialogue with ESG Investors in t he Integrate Report 2020
(699KB)-61-

External Evaluation (ESG Factors)-.J,, Inclusion in ESG Indexes-.J,, Other evaluations

Inclusion in ESG indexes
Toyobo is listed on the following ESG Indexes . as of June 2023.
I t has been selected as a constituent stock in all ESG indices of Japanese stocks adopted by t he Government Pension Investment Fund(GPIF).
- FTSE Blossom Japan Index- FTSE Blossom Japan Sect or Relative Index- MSC! Japan ESG Select Leaders Index- MSC!Japan Empowering Women Index (WIN)- Morningstar Japan ex-REIT Gender Diversity Tilt Index- S&P/JPX Carbon Efficient Index

FT SE Blossom
Japan

FTSE Blossom
Japan Sector
Relative Index

The FTSE Blossom Japan Index is designed to measure theperformance of Japanese companies that enj oy high reputations in
the area of ESG.

The FTSE Blossom Japan Sect or Relative Index is designed to be
sector-neut ral. reflecting the performance of Japanese companiest hat exhibit relatively outstand ing ESG actions in t heir sectors.

2022 CONSTITU ENT MSC I B7.I;;~
31:'liit ~t~~ (WIN)2022 CONSTITUENT MSC I1/ 't I t ;,,ESG-i::[/? I-· 1)-9"-;;(t~~The MSC! Japan ESG Select Leaders Index is an index of companies
that are among Japan's top 700 firms by market value and that

The MSC!Japan Empowering Women Index (WI N) is constructed on
the basis of disclosed information concerning gender diversity.

enjoy relatively outstanding ESG evaluations in t heir indust ries.
comprehensively taking into account the ESG-related risks in thoseCompanies that promote high-level gender diversity in theworkplace are considered more capable of adapting to the risk ofindustries.

talent shortages in a fut ure shr inking workforce. and thereby
better able t o yield sustainable earnings over t he long term.

-62-

Other evaluations
Toyobo has received the follow ing evaluations.

2023~11.tE.Ul;g~~~A

~

-- ~

-

-

Heol1h ond productivity;j<'J-0-500

The Cert ified Health & Product ivity Management Outstand ing

The Platinum Kurum in certification is awarded to companies that

Organizations Recogn ition Program is operated j ointly by the
Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi.
This prog ram recognizes companies of va ried size that practice
particu larly outstand ing health and productivity management,

have achieved a higher level of initiative, such as the introd uction
and use of systems to support a balance between childcare andwork, selected from among those t hat have received Kurum incertification as com panies t hat support the childcare of t heirbased on initiat ives rooted in community healt h issues and hea lth
promotion initiatives advanced by Nippon Kenko Kaigi.

employees in accordance with the Act on Advancement of
Measures to Support Raising Next-Generation Children.

Our company was awarded "Top 500" certification in t he 2023
Certified Health & Productivity Management Outstanding
Organizations Recogn ition Program, a designation given to top

In July 2023, w e were certified as a Platinum Kurum in in eva luationof our various initiatives.

corporations.

The Eruboshi Certification is awarded to companies that

Our com pany was selected as the highest-rated Supplierdemonstrate outstanding implement at ion of initiatives related toparticipation and advancement by women in t he company underEngagement Leader in t he CDP Supplier Engagement Rat ings.

the Act on Promotion of Women's Participation and Advancementin the Workplace.

The Supplier Engagement Ratings are based on responses toquestions in t he four areas of "Governance", "Targets", "Scope 3

Our company was recognized for ach ieving prescribed standards

emissions", and "Supply chain engagement" in a corporate survey
on climate change conducted by CDP. This evaluates climate

for items including "Employment","Continued Length of Employment",change initiatives throughout companies' entire supply chains.

"Working Hours and Work Styles", and "Diverse Career Paths",
receiving two out of a maximum of three stars.

• Health and Productivity Management• Promot ion of Women's Participation and Advancement• Climate Change-63-

【Activity Report】
Environment
These sections introduce our group's environmental policy, environmenta management structure, and related initiatives.

ECO PARTNER SVSTEM.

Management Approach➔➔

Em-Conscious Products■ A decarbonized and circular society
Toyobo group recognizes climate change as a very significant social issue that w ill have a significant impact on our business. We support
the "Glasgow Climate Pact" and aim to achieve carbon neutrality by the fiscal year 2051, which is consistent with the g lobal 1.S"C target.

--------- - - -Disclosure based on TCFD
Recommendations in t he
Integrated Report 2023 (310KB)[!!

Targets for FY2031
Sustainable Vision 2030~➔

Cutti ng emissions in Scope 1 & 2 by over 46% in FY2031 vs FY2014, Net zero in FY2051

Increasing consumption of natural resources and energy, and increasing generation of waste, are becoming serious problems throughout
the world. As a result, there is a global trend to realize a transition away from conventional uni-directional resource usage tow ard thecircular economy, in which resources are used in a sustainable manner.
Toyobo group is aiming to help realize the circular economy through its business activities by implementing initiatives to achieve thegreenification (i.e., utilization of biomass and recycled raw materials, and volume reduction) of plastic in the value chain, reduce waste, andconserve water resources.

-64-Plastic Resource Circulation➔= ·..:-:. ._ ~-.--- ".:-:. --::~ :....

~-•,i~~-~

a.C.. : • •-•·-·-- -- .
---..---,·----·-Polymerization of 100% bio-based
PET resin in t he Integrated Report
2022 (193KB)~

Clean water areas, air and soil, and preservation of biodiversity

Our daily lives and our economy are supported by the benefits that we receive from a wide range of living creatures and ecosystems, or inother words, from biodiversity.
Toyobo group handles a wide range of chemical products, and produces items such as textile products, containers and packaging, and raw
materials for pharmaceutical products. To minimize t he negative impact that our operations have on the global environment and on
ecosystems, w e are working t o conserve biodiversity, by implementing thorough management of chemical substances, as well as striving
to reduce our impact on the environment, including the atmosphere and on water area.

Chemical SubstanceManagement and Reduci ng
Environmental Impact

ESG Performance Data➔➔

Biodiversity

➔

-65-

Management Approach..!, Policy and approach..!, Structure..!, Environmental management system

Policy and approach
In 1992, we established our Global Environmental Charter and Action Guidelines, and in 1997, compiled our Environmental Philosophy,
Environmental Activity Policy, and Code of Conduct into the "TOYOBO Group Fundamental Policy on the Globa l Environment" and launched
a company-wide global environmental conservation initiat ive.
In addit ion to reducing the environmental impact of our business activities, we will contribute to society through people- and planetfriendly technologies.

TOYOBO Group Fundamental Policy on the Global Environment
1. Environmental philosophy
We are striving to contribute to society through technolog ies friendly to both people and the environment. protect the globa lenvironment, and to leave a better planet and a more prosperous society to f uture generations.

2. Environmental activity policy(1) Development of technologies
By devot ing all of our efforts, the Toyobo group is developing technologies (products and manufacturing processes) thatare friendly to both people and the environment, and we are promoting environmental measures.
(2) Environmental protection
At every stage, from product development through to design, manufacture, sale, disposal, and collection, we areforecasting, evaluating. and reducing their impact on the environment, working towards its protection.
(3) Contribute to societyWith the aim of bringing about a better global environment, as well as using our business activities, as a good corporate
citizen we will actively support and participate in environmental protection and biodiversity conservation activities
throughout society and in local regions.

3. Code of conduct(1) Think : Technical development and evaluation
In development and design, strive to develop environmental technology and evaluate environmenta l protections.
(2) Value: Environmental orotection and reuse
Strive to develop, improve, and reuse environmental technologies in the production, sales, distribution, and disposal
phases.
(3) Participate: Disclose technologies and share information
Strive to disclose developed environmental technologies and provide environmental information.
(4) Protect: Environmental compliance and auditing
Strive to set and maintain environmenta l regulations and self-management standards set by national and local
governments, etc., and carry out audits.
(5) Train: Internal and external systems
Strive to enhance our internal environment-related systems. and carry o ut education and awareness-raising activities.

-66-

Structure
Our environmental conservat ion activities (climate change, waste, water resources, biodiversity, etc.) are promoted by the Climate Change
and Biodiversity Committee under the Sustainability Committee. We also establish the Global environment Committee to promote specificinitiatives at our business sites and plants.
The Sustainability Committee deliberates on top-level policies and targets for overa ll susta inability activities, including climate change
response. Receiving the report on a regular basis, the Board of Directors approves top-level policies, targets, and other key matters, andsupervises the progress of its activities. In fiscal 2022, the Susta inability Committee met four times, and in response, the Board of Directors
were reported on five occasions, includ ing regular and extraordinary reports. In fiscal 2023, Susta inabi lity Committee is scheduled to meet
six times and report to the Board of Directors at least once every six months.
Thf' committf'f' ;ilso mil0ilCJf>S ;ictivitif's ;iimf'rl ;it ;ichif'ving ";i rlf'c;irhoni7f'rl ;inrl cirnil;ir socif>ty". w hich ilrf' onf' of thf' "fivf' soci;il issttf>s"
set forth in our "Sustainable Vision 2030".
The Global Environmental Committee is responsible for formulating and proposing policies and measures for global environment
conservation activities to Safety and Disaster Management Division manager and for managing the progress of these measures. The
committee is chaired by t he General Manager of environment Administration Department and is composed of General Manager andExecutive Officer from all business divisions and divisio ns. In principle, the committee meets once a year.
The Global Environmental Promotion Committee meets four times a year to discuss decisions and implements specific promotion items
based on the policy, and exchange information on global environment issues, and decide and implement measures to deal with issues
when problems occur. The committee is chaired by the Genera l Manager of environment Administration Department and is consists ofmembers selected by Executive Officer of business units and divisions. They also visit each of our offices, production sites, and groupcompanies to conduct "safety and environmen t assessment" activities, including supervision of compliance with local envi ronmental laws
and regulations.

Organizational Chart"President, Vice-president, Heads of Division, Exec1.1tive Officers in supervisory positions, Chairmen and Corporate A.1,1dito1s may state their opinions.

-67-

Environmental management system

Basic approach
In order to maintain and improve our environmental conservation efforts, w e have established an environmental management systemthat conforms to the I SO 14001 international standard and other environmental management systems at each of o ur production sites andlaborat ories.
In addit ion, to improve t he environmental level of t he group, we are continuously conducting "safety and environment assessm ent " andenvironmental education for both management and employees.

Certification status of Environmental Management System
As of March 31, 2023, 19 business sites (56% of all group production sites: 19 out of 34 production sites) have acqu ired external
certification for environmental management system standards.

Business Sites Acquiring ISO 14001 Certification
TOYOBO CO., LTD. Business Sites

Date of Certification

Research Center (Otsu, Shiga)

Dec. 1996

Tsuruga Research and Production Center (Tsuruga, Fukui)Dec. 1996

Inuyama Plant (I nuyama, Aichi)

Mar. 1998

Utsunomiya Plant (Utsunomiya, Tochigi)

Feb. 1999

Toyama Production Center, Shogawa Mill (Imizu, Toyama)Jui. 2001

Iwakuni Production Center (Iwakuni, Yamaguchi)

Nov. 2002-68-

Group Companies (consolidated subsidiaries)

Date of Certification

TOYOBO MC Corporation, Takasago Plant (Takasago, Hyogo)Mar. 1999

Toyo Cloth Co., Ltd., Tarui Plant (Sen nan, Osaka)

Dec. 1999

Japan Exlan Co., Ltd., Saidaiji Plant (Okayama, Okayama)Jun. 2001

PT. I NDONESIA TOYOBO FILM SOLUTIONS (Indonesia)

Jun. 2001

Miyukikeori Co., Ltd., Yokkaichi Plant (Yokka ichi. Mie)

Apr. 2002

Cosmo Electronics Co., Ltd., (Yokkaichi, Mie)

Jan. 2004

Kureha Limited (Ritto, Shiga)

Jun. 2005

Toyo Cloth Co., Ltd., Iwakuni Plant (Iwakuni, Yamaguchi)

Oct. 2005

Toyobo Photo Chemicals Co., Ltd., Saidaiji Factory (Okayama, Okayama)

Oct. 2017

Toyobo Saha Safety Weave Co., Ltd. (Thailand)

May. 2019

Toyobo Kankyo Tech no Co., Ltd. (Osaka, Osaka)Jun. 2019

Group Companies (Equity Method Affiliate)

Cast Film Japan Co., Ltd., Tsuruga Plant (Tsu rug a, Fukui)Date of Certification

Dec. 2000

Business Sites Acquiring "Eco Action 21*"
Group Companies (consolidated subsidiaries)

Date of Certification

Mitsumoto Chemicals Co., Ltd. (Nabari, Mie)

Nov. 2011

Japan Exlan Co., Ltd., Environment Engineering-analysis Center (Okayama, Okayama)

May 2007"Eco Action 21" is one of environmental management systems and was developed by Japanese government.

-69-

Safety and environment assessment
To improve the safety and environmental level of the group. the Safety and Disaster Management Promotion Committee and the Global
Environmental Promotion Committee conduct "safety and environment assessments" as an internal audit of all production sites, includinggroup companies, in accordance with our company's rules. The assessment includes confirmation of the status of various environmental
laws and regulations. environmental pollution risk management. and promotion of environmental conservation activities such as energysaving initiat ives.
In addition to annual self-assessments using a checklist. each site undergoes an on-site audit once every three years and takes corrective
action if any issues are pointed out. In this way, we are working to maintain and improve the level of management.

Items to be checked in the safety and environment assessment (partial)• Implement ing ident ification and compliance of legal requirements. meeting regulation values and notification, for factory operation• Manag ing the risk of environmental pollution (risk identification, risk assessment. and implementation of preventive measures)• Promoting environmental conservation activities (energy conservation, waste reduction. green purchasing. etc.)• Acquiring third-party certification for its environmental management system• Implement ing appropriate management of chemica l substances
In fiscal 2022, we carried out the audits at two business sites and three group companies. The audit results showed that all of these sites
and companies performed well in ter ms of safety and environmental management.

Locations at which Audits Have Been Performed in the Last Three YearsFY

TOYOBO CO., LTD.

Group Companies

Audit results

2021

1 business site

3 companies

All performed well2022

2 business sites

3 companies

All performed well2023

3 business sites

7 companies

All performed wellEnvironmental complianceIn addition to complying with applicable laws and regulations, such as the Air Pol lution Control Act and the Water Pollution Prevention Act
in Japan, the Toyobo group is committed to reducing emissions by not only complying with legal and regulatory standards, but by also
making continuous improvements in the prevention of air and water pollution. We will continue to further reduce our environmental
impact.
For fiscal 2021 to 2023, there were no environmental-related fines or penalties.
• ESG Performance Data for the number of violations in fiscal 2021-2023 (305KB) ~-70-

Environmental education
The Toyobo group promotes a variety of educational and awareness activ ities in order to improve the environmental awareness of theemployees and corporate officers, including the ma nagement level.
During Environment Month, we hold an annual environmental seminar with outside lecturers invited, in which many employees andcorporate officers, including the management level participate. In add it ion, at each business site, we hold environmental exhibitions
featuring panels that int roduce our group's environmental activities as well as exhibitions of em-conscious products, and these introduce
the Toyobo group's environmental activities to our employees and the local community.
In addition, we are promoting environmental education through a unique curriculum tailored for new employees.

Environmental seminars
In fiscal 2024, the Toyobo group held a seminar on the topic of biodiversity conservation and introduction of environment DNA methods.
Both face-to-face and online seminars were held, w it h a total of approximately 200 participants.

FY2024 Environm ental seminar

FY2023 Environm ental seminar

FY2022 Environm enta l seminar

FY202 1 Environm ental semina r

Past Seminar Themes
FY 2023: Domestic and overseas Initiatives for biodiversity and natural capital-conscious management
Biodiversity and human world (What is required of us?)
FY 2022: Policy Trends Toward Carbon Neutrality by 2050
FY 202 1: From CSR as Et hics to ESG as Strategy New Normal in t he Age of SDGs
FY 2020: Achieving the SDGs and corporate initiatives
FY 2019: A Changing World with t he Sustainable Development Goals (SDGs)
FY 2018: CSR and Corporate Environmental Activities

Environmental exhibition
Since 1996, the Toyobo group has held an annual environmental exh ibition on employee to deepen employees' understanding of thegroup's efforts to conserve the global environment (since fiscal 2022, the exhibition has also been held via the Internet). In fiscal 2024, theexhibition took up a special featu re entitled "Efforts by Business Sites and Plants for Preservation of the Global environment andCoexistence w ith Local Communities" and introduced the activities being carried out at business sites and plants throughout Japan topreserve and improve t he environment and coexist w it h local communities.

Past Seminar Themes
FY 2023: Action for "biodiversity conservation"

Environmental education on joining the company
Educat ion upon joining the company is provided not only to fresh hires, but also to mid-career employees at all locations, including atgroup companies. In addition to explaining plans and achievements regarding the global environmen tal conservation system andinitiatives, the training helps participants understand why environmental protection is important by linking it with the Toyobo Group
Charter of Corporate Behavior. and explains what is expected of employees of the Toyobo group.

Session for management
Twice in January and February 2023, we invited an outside lecturer to have sessions on the topic of the "Practice of Sustainability andDisclosure of Information" for Executive Officer. In part icular, we deepened our knowledge of new climate-related disclosure standards.

Past Seminar Themes
FY 2023: Carbon neutrality

Other Initiatives
Environmental Accounting
As an initiative to quantitatively evaluate our environmental protection activities, we conduct environmental accounting based on theEnvironment al Accounting Guidelines 200S issued by the Mi nistry of the Environment of Japan. In fiscal 2023, capital investment forenvironmental protection was ¥4 billion, and the amount spent for protection and maintenance was ¥2.9 billion. This primarily includes thecost of statutory environmental impact measurements, industrial waste disposal, various inspection, and associated personnel costs.

Green purchasing
For general purchases such as office supplies, the Toyobo group promotes green purchasing by specifying target items and utilizing"environmental labels."
In fiscal 2022, we purchased 11 out of 12 targeted items*, of which nine had a green purchasing rate of 100%. The other two items also
accounted for more than 9S%. We will continue to expand the range of items covered by the scheme, keeping an eye on the green
purchasing rate and trends in the world.
* Copy paper; toilet paper, files, tape for label printers, com puters, copy machines, printers, fax machines, lighting equipment, fire extinguishers, air conditioners (for home use},
work clothes and uniforms-72-

Eco-Conscious Products..!, Basic approach..!, Structure..!, Targets and results..!, Initiatives related to eco-conscious products..!, Initiatives related to LCA calculations

Basic approach
Under the "TOYO BO Group Fundamenta l Policy on the Global Environment," the Toyobo group promotes to reduce and improve t he
impact on environment by developing new technologies. At every stage, from product development through to design, manufacture, sale,disposal, and collect ion, we are forecasting, evaluating, and reducing their impact on the environment, and working towards its protection.
• TOYOBO Group Fundamental Policy on the Global Environment

Structure

Mechanism for certification of eco-conscious products
Since 1998, the Toyobo group has operated the "Eco-Review System" as a system for evaluating the environmental impact of our products.
This system evaluates and analyzes the following aspects at every stage in the product life cycle: preventing climate change, reduction ofchemical substance use, resource conservation, waste reduction, and Biodiversity Other. Products that meet these standards are certified
as ECO-PARTNER SYSTEM® products. Since the Eco-Review is carried out at every product life cycle - from R&D to commercialization issues that require improvement from an environmental protection perspective are identified and improved at an early R&D stage prior to
the subsequent review. As products and technologies are developed, they are improved to reduce their environmental impact andcontribute to the environment.

Eco-Review Evaluation Items

Review and Certification Process
Person in change of

Designing eco-conscious products

development~ Apply

Using recycled materials and alternative raw

materials to petroleum-based raw materials
Considering biodiversity

Secretariat

Using energy-saving and clean energy
Reducing water use and effectively using
raw materials
Reducing waste

Review

Biodegradability and recyclability

.....
■

Reducing resource consumption

Reducing hazardous chemical emissions•

Chair of Global Environment
Conservation Conference
Members of Global

Environment Conservation
Conference• General Manager of Business

Reducing transportation energy
Reducing packaging waste
Increasing lifespan

•

-

-73-

•

Approve.

Unit
Supervisor of Environmental
Safety Management at
Production Center
Implementation Officer·

Chair of Global Environment
Conservation ConferenceECO-PARTNER SYSTE M®
Products t hat meet or exceed certain standards in the Eco-Review System are designated as "ECO-PARTNER SYSTEM®" products that
contribute to reducing the burden on environment.
Evaluation standards for the ECO-PARTNER SYSTEM® comprise five categories, including items such as "resource conservation."
The life cycle of products are d ivided into six stages from raw materials through to disposal, and the environmental impact at each stage isevaluated and certified.

e~-Fl,eev~,otion••,,na,~,---ECO PARTNER SYSTEM,

Targets and results
We aim to increase t he ratio of sales of ECO-PARTNER SYSTEM® products to 40% of total sales by fiscal 2030 and 60% by fiscal 2050.
In fiscal 2023, sales of ECO-PARTNER SYSTEM® products accounted for 35.2% of the company's total sales. Going forward, w e will continue
to create eco-conscious products.
In addition, we are considering expanding the scope of application of the certification system to include group companies, and have begun
to identify issues in order to calculate the sales ratio held by ECO-PARTNER SYSTEM® products for the entire group.

I nit iatives

Targets (FY203 1)

Sales ratio held by ECO-PARTNER SYSTEM® products (TOYO BO CO., LTD. only)

40%

Results (FY2022)

35.2%

Sales by Evaluation Standard of ECO-PARTNER SYSTEM® Products
Five eva luation standards

Preventing climatechangeResource conservation

Waste reduction

Reduction of chemical
substance use

Other environmental
contributions¥ 50.6 billion¥32.6 billion¥56.2 billion¥50.3 billion¥30.3 billion

Note: Net sales in the figure include duplicates because they are determined based on multiple criteria.

-74-

Initiative

ECG-PARTNER SYSTEM® Products
Here are some of t he products t hat have been certified as "ECO-PARTNER SYSTEM®".

Major ECO-PARTNER SYSTEM® Products
Corresponding field/market

Usage

Materials used

Film of recycled PET resin

RESHINE®

Three-dimensional cushion material

BREATHAIR®

liquid water-holding agent

ESPECK®

Solvent recovery equipment

K-FILTER®

Bag filters for thermal power plants

PROCON®

Photosensitive water-wash nylon resin relief printing plate

Printight®

Transparent vapor-deposited film

ECOSYAR®

Reverse osmosis membranes for seawater desalination

HOLLOSEP®

Water purification UF membrane modules

DURASEP®

Modifier for recycled PET

VYLON® RF series

Recycled nylon resin for airbag scraps

ECOKURELEAF®

Recycled PET textile products

ECHORCLUB®

PET-based synthetic paper

Crisper®

Spun yarn using unused cotton

ECOT®

Recycled nonwoven fabrics

e-VOLANS®

Ultra-high-strength polyethylene fiber

IZANAS®

Climate change measures

Antipollution measures

Solving water resource problems

Recycling systems (recycling and resource reduction)

Other (environmentally friendly products)-75-

LCA Calculation Initiatives
We calculate LCA as appropriate by introducing MiLCA, a software for computing LCA.

Avoided emissions calculation
Beginning in fiscal 2022, we began calculating the contribution to CO 2 savings (avoided emissions) by compa ring baseline products w ithcLCA(carbon-Life Cycle Analysis of our products) and replacing them w ith our products. First. we calculated avoided emissions of reverse
osmosis membranes (RO membranes) and VOC (volatile organic compounds) recovery equipment as typica l techniques of our group. We
will continue to expand the number of products covered in the calculation.
We will reduce CO2 emissions generated when customers use our group's products and contribute to mitigating climate change
throughout the supply chain.

Case Q) VOC recovery equipment
Toyobo's VOC recove ry equipment is used around the world to control emissions of volatile organic compounds (VOC), which are feared toaffect the atmosphere and human health. Our VOC recovery equipment incorporates "K-FILTER®", an unique activated carbon fiber, and it
is used in various industries to recover dichloromethane used in the lithium battery separator manufacturing process and to control
emissions and recover ethyl acetate (which is used in dry lamination and adhesive processes). toluene, and IPA etc.
Assuming that the steam desorpt ion VOC recovery equipment sold by our group in fiscal 2023 operates for 15 years, the amount of VOC(m et hylene chloride, etc.) recovered will be approximately 6 million tons• . In addition, "K Filter®" makes it possible to recover high-quality
solvents and save energy because it is a high-performance adsorbent that has a faster adsorption rate than granular activated carbon andcontains fewer impurities. Our VOC recovery equipment can reduce carbon dioxide emissions by approximately 50 to 70% compared toconventiona l VOC combustion equipment when treating combustible VOC such as ethyl acetate and toluene (according to research by
Toyobo).
Furthermore, our group also sells the nitrogen desorption type "K Filter®" VOC recovery equipment , which is even more energy-saving.
Since nitrogen is purified and reused using a unique circulat ion method, it can be processed at low running costs, and it is also possible torecover and reuse water-soluble solvents and significantly reduce wastewater. Compared to conventional steam desorption methods, CO2
emissions during treatment are expected to be red uced by approximately 50 to 80%•.
Going forwa rd, to contribute toward the realization of the decarbonized society. we will expand applications of our VOC recovery
equipment and sales promotion of our nitrogen desorpt ion type VOC recovery equipment, which is more energy efficient.

* Our group calculations• VOC recovery apparatus (steam desorption type)

K·FILTER® B'• VOC recovery apparatus (nitrogen desorption type) K·FILTER® B'

VOC treatment equipment's CO 2 emissions compare (e.g.)C0

About 50~70%
reduction

~

!
N

0

u

····· · ···········i

Combustion
devicevoc recovery equipment(steam desorption type)■ ~~:::!~~~~ ■ manufacturing ■ transportation·····
About S0~80%
reduction

VOC recovery equipment(nitrogen desorption type)product use■ ;~~ ~:0sal ■ VOC combust ion
1

VOC recovery equipment

1* (Calculation Conditions: VOC Processing Capacity is calculated by setting thesame conditions for the combustion device and the recovery device(our group-wide calculation}.

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Case @ RO Membrane for seawater desalination
Globally, water shortages are becoming an increasingly serious problem. We provide ho llow fiber reverse osmosis (RO) membrane, whichenables desalination w ith low energy consumption, to countries throughout the world, especially in regions where there is inadequate
access to fresh water. By comparison with the conventional multi-stage flush (MSF) method, Toyobo's method using RO membrane makes
it possible to achieve a su bstantial reduction in CO 2 emissions.
Toyobo's RO membra ne is made mainly from biomass material, and it has a number of unique features, including long product lifespan ofeight years or more, and being able to produce high-purity fresh water. Additionally, the superior chlorine resistance of the membranematerial keeps maintenance costs down.
Assuming that the RO membrane elements sold by our group is used for eight years, freshwater production would be approximately
900million m 3, and avoided emissions (reducing CO 2 emissions) will be approximately 9 m illion tons (our group estimate).
Going forward, we will be expanding production of RO membra ne so that it can be used to meet the daily water needs of around 10 million
people through seawater desalination (this is the target for Sustainable Vision 2030).

I C-1::t~A~m,g~w : q:i ~*ffl
No.100002
Seawater desalination plants

Biomass Mark• for our hollow fiber membrane in HOLLOSEP®

* The Biomass Mark is allowed to be labeled on products and materials containing a certain percentage of biomass after the composition, proportion, quality, and safety of theraw biomass is verified by a third-party organizc1tion composed of academic experts.

-77-

Climate Change
Materiality
Related ESG : E
A decarbonized and circu lar society-.!, Basic approach-.!, Structure-.!, Targets-.!, Initiatives related to the entire value chain-.!, Results-.!, Initiatives related to our manufacturing business-.!, Strengthening climate change measures-.!, Collaboration with Stakeholders

Basic approach
The Glasgow Climate Pact was adopted at the 26th Conference of the Parties to the United Nations Framework Convention on Climate
Change (COP26) in 2021, with the aim of addressing the global issue of climate change. The Pact incorporates a commitment to strive tokeep the rise in average global temperatures within 1.5°(. which would have a less severe impact than t he earlier target of 2°(. by utilizingt he latest scientific know-how, and it thus set a de facto goal for the world t o work toward. The Pact confirmed that the next 10 years will
be vitally important for realizing this, and that it is important to reduce overall global CO2 emissions by 45% by 2030 compared to 2010,
and to cut emissions to net zero by 2050.
Toyobo group recognizes climate change as a very significant social issue t hat will have a critical impact on our business. We support the"Paris Agreement*" and "Glasgow Climate Pact" and aim to achieve carbon neutrality by the fiscal year 2051, consistent w it h the global
1.5°C target.
We also believe t hat it is important to collaborate with our customers, business partners, industries, local communities, the national
government, and society as a whole in order to resolve climate cha nge issues. Our group engages in discussions and dialogue with various
stakeholders and works collaboratively to realize the net zero emissions and t he goals of the Paris Agreements.
* The Paris Agreement is a global framework adopted in COP21 in 20 15 co reduce greenhouse gas emissions after 2020. For the first time in history, it is a fair agreement
involving all countries and including the goal of keeping temperature rise below 2 degrees Celsius, and preferably 1.5 degrees Celsius.

Structure
President & Representat ive Director, CEO & Co-COO has t he highest responsibility for climate change-related issues. The Board of Directors
receives regular reports on climate change policies and significant matters discussed by the Sustainability Committee and provides
supervision and guidance. The Sustainability Committee, chaired by the President & Representative Director, CEO & Co-COO, hand lescompany-wide issues and risks, including climate change issues. In fiscal 2023, the Sustainability Committee met four times, and in
response, t he Board of Directors was reported five times, including regular reports and extraordinary reports. Following a resolution at theBoard of Directors, we announced Sustainable Vision2030 in May 2022, and in April 2023, we officially joined the GX League, which wasestablished by the government of Ja pan.
• Structure on corporate environmental issue-78-

Targets
With regard to Scope 1 and 2*1 greenhouse gas (GH G) emissions associated with our business activit ies. we have set ourselves the targetof realizing net zero emissions by fiscal 2051. In response to the growing momentum toward the realization of a deca rbon ized society, theBoard of Directors passed a resolution to raise our intermediate-term target for fiscal 2031 to a target of reducing emissions by at least
46% compared to fiscal 2014 in May 2022.
In order to contribute toward realizing the decarbonized society. we are proceeding w it h efforts to reduce GHG emissions from t he entire
value chain deriving from activit ies that are related to our own business. while also working to expand t he contribution that we maketoward reducing GHG emissions t hrough our products and services.

Targets for Scope 1 and 2
Emissions Reductions from Business Activities
Fuel conversion promotion,.
production effldency

Targets for the Entire Value Chain(including contribution through products and solutions
for the target year FY2051)

Convefflon toca,bon-free fuels.
eie,ctrincatlon of production

I : ! : ~ ~ u, renewab&eprocesses.carbonoffs.el:~tc. IL<a1bon•M9atlve measur~

adoption, etc.

- -- - : , - Rcduct~ of at least

46~
I

)

() Prm•nt

'' ''
' '
'' ''
Ne'H ero' '''' '''
' '
2014

2031

2051

Reduction /·•,,~FV20S 1'/---• -\'\•',,,,,,

GHG emissions throughout thevalue chain<

Avoided emlulons

lfY)

Approved by SBTi
In December 2022. t he Toyobo group's targets of reducing GHG emissions by fiscal 2031 have been validated by the Science Based Targets(SBT* 2) initiative.

SCIENCEBASEDTARGETSDRIVING AMBITIOUS CORPORATE CLIMATEACTION
The targets approved by SBTi are as follows.

Category

TargetProgress {Results in FY2023)

Scope1, 2

27.0% reduction in GHG emissions by FY2031 over FY2021

0.9% reduction from FY2021 level

Scope3*3

12.5% reduction in GHG emissions by FY2031 over FY2021

107.2% increase from FY2021 level

The target for Scope 1 and 2 corresponds to a reduction of GHG emissions by at least 46% by fiscal 2031 compared with fisca l 2014.
*1 Scooe1: Direct emissions from owned or controlled sou rces

-79-

Results

Scope 1 and 2
The t hree site (Tsuruga, lwakuni and Inuyama) account for approximately 70% of GHG emissions from our business activities (Scope1 2).
As regards the results in fiscal 2023, total Scope 1 and 2 GHG emissions came to 894 thousand tonnes CO2 , 26.4% reduction from FY2014.
While sales increased by 6.4%, GHG emissions remained at roughly t he same level as in fiscal 2022 because we were implement ing energysaving activities and measures to enhance production efficiency.

Targets (FY2031 )Initiatives

Scope 1 and 2 GHG emissions(consolidated)

Results (FY2023)

Reduction of at least 46% (compared to fiscal
2014)

26.4% reduction (894 thousand tonnes
C02)

Consolidated: TOYOBO CO., LTD. and consolidated subsidiaries

GHG Emissions

Scope 1 and 2 ratios by business site

■ Scoptl ("-'wndlOMHCO~...

Scopt'J(~IOMHCOJ)

...

873

902

900

196

174

18A

182

Ot~rpl;;ints{overseu)
231

other plants(Japan)

709

2018

2019

...
2020

Total for three plants(Tsuruga, lwakunl, lnuyama)

2021

2022

lfYI

The highest rank in"Business Operator Classification Evaluation System"
The "Business Operator Classification Evaluation System" is an init iative led by the Ministry of Economy in Japan. It divides all
business operators, which submit regular reports under the Act on Rationalizing Energy Use, into four stages: S (energy saving is
excellent), A (general), B (stagnat ion), and C (requires attention).
Under t he system, four companies, including TOYOBO CO., LTD, TOYOSHINA FILM CO., LTD., TOYO CLOTH CO., LTD., and JAPANEXLAN COMPANY, LIMITED achieved energy-saving targets t hrough the introduction of energy-saving equipment and received Sclass evaluations.
TOYO BO CO., LTD
TOYOSHINA FILM CO., LTD.

: For four years in a row since FY2020: For four years in a row since FY2020

TOYO CLOTH CO., LTD.

: For five years in a row since FY2019

JAPAN EXLAN COMPANY, LIMITE D : FY2023-80-

Scope3
As regards the results in fiscal 2023, total Scope 3 GHG emissions came to 5,290 thousand tonnes CO 2, an increase of approximately 55%
compared t o t he previous year. The main reason for the rise is a leap in the category 1 and 11 emissions. The category 1 emissions
increased compared to fiscal 2022 due to t he impact of soaring raw material cost and raw fu el prices. The increment in categ ory 11 was
mainly caused by a big leap in emissions from VOC treatment equipment w hich TOYO BO group provided w orldwide. Sa les of t heequipment for Lithium-Ion Battery (LIB) separator plants were strong due to increased demand for LIB because of the glo bal sh ift to EV.
Accord ingly, t he emission of t he category 11 was increased.

Category

GHG emission Thousand tonnes-CO 2

1. Purchased goods and services

2,055

2. Capital goods

55

3. Fuel- and energy-related activities (not included in Scope 1 or
Scope 2)113

4. Upstream transportation and distribution

50

5. Waste generated in operations

53

6. Business travel

7

7. Employee commuting

6

8. Upstream leased assets

Not applicable to the company

9. Downstream transportation and distribution

GHG emissions of transpor tation to the shipping destination
includes in the category 4.

I-

10. Processing of sold products

11. Use of sold products

2,745

12. End-of-life treatment of sold products

207

13. Downstream leased assets

Not applicable to the company

14. Franchises

Not applicable to the company

15. Investments

Very low emissions
Total

l

-81-

5,290

Independent Ve rification by t hird party
To increase re liab ility of our info rmation , we have obta ined indepe ndent verifica t ion from KPMG AZSA Sustainabi lity Co., Ltd., that covers
ou r Scope l ,2, a portion of Scope3, and data on energy-consumption fo r fisca l 2023.
• Top > Sustainability > External Assurance

Initiatives re lated to our manufacturing business

Reduction of Scope 1 and 2 emissions
Formulating roadmap for Carbon Neutrality
We have formu lated a decar bon ization st rat egy with a roadmap for Scope 1 and 2 emissio ns reduction aimed at realiz ing carbon neu t ra lity.
Based on t he st rategy, we have rai sed our int ermed iate-term ta rget for fi sca l 2031 to a target of reducing em iss ions by at least 46%
compared to fiscal 20 14, and we are proceeding w ith em iss ions reduct ion act ivities. As w e expand our bus iness towa rd fisca l 2031, ourproduct ion volume wil l increase, and GHG em issions may increase in t he future under a bus iness-as-usual (BAU*) scenario. With t heroadmap, we are t argeting reductions in Scope 1 and 2 in fiscal 2031 by at least 46% compared t o fisca l 2014 through ene rgy optimization
measures t hat invo lve ene rgy conserva tion (including increased production effic iency), fuel conve rsion(away from coa l), and adoption ofrenewab le energy.

Key elements

Contribution

Fuel conversion

Approxi mately 40%

The others• energy conservation (including in creased production efficiency)• Introduction of renewable ene rgy

Approxi mately 60%* An acronym for "Business as Usual," indicating a case in which no particular GHG emission reduction measures are taken.

Roadmap for Carbon Neutrality
Transitional phase (low carbon)--- 6%FY 2014

FY 2021-----------------I•

Mam measures to cut GHG em1ss1ons

Measures for carbon neutrality*Energy saving (improved routine work)*Changing to carbon-free fuels*Enhance productivity(hyd rogen and ammonia , etc.)*Introduction/procurement of renewable*Electrification of the manufacturing

energy (solar energy, micro-hydro power)

process*Energy source change (no use of coal)*Consideration on introducing carbon-free*Procurement of carbon-free

fuelselectricity*Introduction of carbon offset*Low carbonization in purchased electricity

measures (CCUS, forest sink, etc.)

FY 2031-82-

FY 2051

Energy efficiency and conservation
TOYOBO CO., LTD. has set a sha red goal of imp rovi ng energy-effic iency* by 1.0% or more annually. In fi scal 2023, TOYOBO CO., LTD.
achieved the target through various energy-savi ng efforts. Specifica lly, th is was due to the addit ion of waste heat recovery systems at inhou se power plants and production li nes, and the introduction of energ y-saving equipment. Besides, the three si tes (Ts u rug a, Iw aku ni, andlnuyama), wh ich em it pa rt icularly la rge amount s of GHG in TOYOBO group, have set even higher targets and are actively wo rki ng t o
red uce thei r use of energy.
In addition, TOYOBO group hold mon t hly meetings of the Energy Use Efficiency Comm ittee. The comm ittee co nsists of members from ourmain business sites and plants. They monitor th e energy co nservation activities of ind ividual site and provides t rain ing on energy
conservat ion (sha ri ng knowhow, etc.). Add it iona lly, each committee member cond ucts simple aud its ("Energy-saving patrols") at eachfactory site as appropri ate to maintain and improve the level of activity.

* Energy con sumption per sales and production volume in accordance with Japan's act on ra tionalizing energy use

Fuel conversion (away from coal)
We are also implementing a transition towa rd low-ca rbon energy use, by switch ing to fuels w ith lower ca rbon contents fo r our in-houseelectricity generating equipment and install ing addi tional gas co-generation system• equipment. We w ill begin by renewi ng our in-house
the rmal power generation plant at t he Iwakun i Production Cen ter, converting th e fuel from coal to liquefi ed natural gas and RPF.* 2 Maj or
reductions in GHG em issions, approxi mat ely 80 thousand tonnes CO 2, are expected from the ope ration, schedu led for fi scal 2024. We also
added a gas co-generation system at Inuyama Plan t and started operation in August 2023. It has improved the energy-efficiency of
Inuyama Plant as a whole. We are carrying ou t GHG reduction measures includ ing fuel conversion at other business sites as we ll.

* Gas co-generation systems are systems that use natural gas to generate electricity, wi th the waste heat being harnessed to produce steam and hot water that are used in
manufacturing processes, for supplying hot water; fo r air condition ing, etc.

* An acronym fo r "Refuse -de rived Paper & Plast ics Densified Fuel," solid fuel made mainly from used paper and waste plastic

Introduction of renewable energy
We are proceed ing with the installation of photovolt aic power generati on at each of our business sites, ma king use of roof spaces andunused la nd. In March 2023, Inuyama Plan t began operating a photovolta ic power generation facil ity, wh ich generated approxi mately
S0MWh amounts of electricity in fisca l 2023. Utsu nomiya Plant is also sc heduled to beg in operations of sola r power generation faci lities
and other plants and offices are also consideri ng the introduction of t he system .

Solar power generation equipment installation at the Inuyama Plant
lnuyama Plant has proclaimed the slogan "Aiming for a Sustainable Plant" and is striving to
improve energy efficiency, adopt energy-con serving facilities, and put renewable energy to use.
In March 2023, the plant used a power purchase agreement (PPA') arrangementto install a newsolar power generation facility of approximately 500 kW. The factory also working to raiseawareness of our employee by installing monitors in our offices that allow us to check power use
and generation in real time. In the future, the plant is planning to implement other GHG reduction
measures such as fuel conversion, and will continu e to consider and introduce various initiatives
to realizing to bea sustainable plant.
*Businesses borrow roofs and idle land forfacilitieso wned by enterprises, etc., and install powe r generation
facilities free of charge. Electricity generated by enterprises, etc., is used in facilities, the reby reducing electricity
rates and C02 emissions.

Voice of the person in charge
This was the first time our company had tried a PPA, so we got the cooperation of a rangeof people, and the manufacturer of the solar power generation facilities, our company
headquarters and the manufacturing division within the plant all worked together. It was aparticular struggle connecting these facilities while giving consideration to the effect itwould have on our existing electrical system. When it started generating electricity
without a hitch , our hard work was paying off even more as it leads to reduced electriccharges which continu e to soar.

1,608 so lar panels (power output app roximately S00kW)
installed on t he rooftop of Inuyama Plant

Initiatives related to the entire value chain
Reduction of Scope 3 emissions
TOYOBO grou p aims to reduce Scope3 and is implementing reduction measures main ly for Category 1* 1 and Category 11• 2 emissions,w hich account for a particu larly large share of Toyobo grou p's Scope 3 em issions.
In Category 11 , we have introduced new tec hnolog ies and energy-saving technologies to VOC recovery equipment* 3 to reduce the use ofutilities (steam, electricity, etc.), thereby reducing GHG em issions and, at the same time, red ucing t he burden on enviro nment.

Scope3 •Other categories• Scope 3 emiss ion (305KB)@!

*1 Emissions from activities {such as manufacturing) rela ting to purchased goods and services*2 Emissions fro m use of sold products*3 Equipment t hat re moves VOC, Volat ile Organ ic Compo unds, by an adsorptive met hod, an absorpt ive method, or a chil ling met hod, and recovers VOC as a liquid organ ic
solvent. CO 2 em ission fro m VOC deco mposition is zero. Mo reover, t he recovered orga nic solve nt can be reu sed. VOC is a generic te rm for volatile organic co mpounds suchas toluene, ethyl acetate, and dich loro methane. It causes atmospheric pollut ion / air pollution and is res ponsible for asth matic and ot her health-related problems.

Expand ing our avo ided em issions
Most of t he Toyobo group's products are materia ls or intermed iate goods and many of these products co ntribute toward reducing GHG
emissions. Typ ica l examples of t hem include reverse-osmosis mem branes (RO membranes) used in seawa ter desa lination, and VOC
treatment equi pm ent, wh ich controls em issions ofVOC (volatile organic co m pou nds) that are feared t o have an adverse effect on
atmospheric pollution/ air pollution and t he human body. We are making ca lculations to quantitatively understand GHG avoided
emissions• of t hese products throughout their life cyc les.
In fi sca l 2023, in order to unify the intern al calculatio n ru les and ex pa nd t he range of products su bj ect to ca lcu lation, we developed ourown gu idelines that summa rize methods for calculating GHG avoided emissions, etc. We have formulated the guidelines in acco rdance
w ith the "Guidelines for Assessi ng the Contribu tion of Products to Avo ided Greenhouse Gas Emissions" of the Institute of Life Cycle
Assessment. Ja pan, and ca lcu late avoided em issio ns accordi ng to t he guidelines. We also refer to t he "Guideli nes fo r Quantifying GHG
emission reductions of goods or services through Globa l Va lue Chain" issued by the Min istry of Economy, Trade and Industry in Japan .
We wi ll expand our cont ribut ion t o reduc ing GHG emissions by increasing sa les of these products help to reduce GHG em issions.
For more information on avoided em iss ions ca lculati on, please refer to t he fo llowing sections.
• Eco-Conscious Prod ucts > LCA Ca lcu lat ion Initiatives* GHG emissions that can be redu ced by our customers' use of our products compared wi th conventional technologies.

Energy-saving initiatives in logistics
Our ann ua l goa l is a 0.5% yea r-on -yea r reduction in CO 2 em iss ions per unit of transportation in relat ion to log istics.
In t he Logistics Department, we lau nched the Green Logist ics Promotion Proj ect in 2006, and as we ll as working t o improve qua lity andcost ra tional ity, we are also co ntinuously worki ng on environmen tal conservation such as energy saving, resou rce saving, and preventionof globa l wa rming . Up until now, we have implemented a variety of measures in order to reduce the environmen tal impact of log ist ics.
These measures include shortening t ransporta tion distan ces by using the nearest port to our product ion sites, and using efficient sta cking
and bulk t ransport of cargo in order to reduce the number of ve hicles used . We are also actively promoting t he usage of ship and railtransportation which have lower specific energy co nsumption t han truck transportation, toget her with lower CO 2 emissio ns.
We have been introduc ing a logistics system since 2019. Based on dispatch simulations, we worked to furthe r improve load ing efficiency by
opt imizing the allocat ion of ve hicles and we were able to reduce CO 2 emi ssions.
As a resu lt of these efforts, we we re able to red uce CO 2 em issions per unit of transportation by approximately 5% in fisca l 2023 compared
to t he previous year.

Strengthening climate change measures

Structure to achieve carbon neutrality
In April 2021. Toyobo established the Carbon Neutral Strategies Council and the Carbon Neutral St rategies Cross-Functional Team (CN-CFT)
to formulate and promote strategies to achieve carbon neutrality.
In order to make steady progress towards the realization of carbon neutrality, we also established working groups (WGs). wit h members
from d ifferent units across the entire company. within the CN-CFT.
In fiscal 2023, the structure was reviewed, and a new Climate Change and Biodiversity Committee was established . We will promotecompanywide climate change responses wit h a view to internationally applicable sustainability standards.

WGs' main initiatives• Promotion of obtaining SBT certification• Formulation of the roadmap for Carbon Neutrality for Scope 1 and 2 emissions reduction (covering the period through to fiscal 20S1)• Introduction of internal carbon pricing system

Introduction of internal carbon pricing system
On April 1, 2022, we introduced an internal carbon pricing (ICP) system in which the company use its own standards to set a theoreticalprice on each tonne of GHG emissions for reference in making capital investment. By using the ICP system as a yardst ick for evaluating
invest ment decisions, we will accelerate making investments not only in low or net-zero emission facilities and energy-saving technologies,
but also in relevant equipment and facilities for research and development.

Outline of Toyobo's ICP system
Internal carbon pricingfee (tax)

10,000 yen for each tonnes of CO2

Targets of investment

Capital investment in facilities with fluctuating CO 2 emissions

How to use it

Based on the internal carbon pricing fee, calculating Co2 fluctuation by the proposed facilities (including facilities
for research and development) as costs. The calculations will be made in accordance with capital investment
plans.

Disclosure based on TCFD
Recognizing t he scale of the impact of climate change on our group and stakeholders, we have identified "a decarbonized and circularsociety" as one of our materialities. In January 2020, we announced our support for the recommendations made by the Task Force on
Climate-related Financial Disclosures (TCFD), and have been working on init iatives and disclosures t hat follow them.
In fiscal 2023, we expanded the scope of our scenario analysis to all our businesses. Based on the below 2°C scenario (decarbonization
scenario) and the 4°C scenario (warming progression scenario), we extracted the risks/opportunities of our group specializing in climatechange. We have estimated the financial impact of r isks and opportunities that we recognize as particularly important. For details, pleaserefer to the integrated report.
Disclosu re based o n TCFD Recom mendat ions in t he Integrated Report 2023 (31 OKB)~-85-

Development of technologies that contribute to the realization of a decarbonizedsociety
Turbine is rotated byincrease of salt water

salt water

FreshwaterF~h wa.er fbNs to near-s.aturaled salt water by FO

Osmotic power generation using high-salinity geot hermal water, a source of renewable energy, has been receiving public attention. Toyobo
has developed a forward osmosis (FO) membrane for t he power plant core used in this method, and it has been used in osmotic power
generation plants of Danish venture firm SaltPower.
In April 2023, it was installed at Nobians saltworks in Denmark and is now in operation.
Geothermal water osmosis power generation uses t he h igh osmotic pressure of geothermal water wit h high salt concent rat ions pumped
from underground. Compared with solar and wind power, t he weather and time of day does not affect geot hermal power ge neration. In
add ition, it does not emit harmful substances such as nitrogen oxides and sulfur oxides normally em itted during combustion.
Find more information about the other technologies here.
• Toyobo's hollow-fiber FO membrane used at osmotic power plant

Collaboration with Stakeholders
Toyobo group believes that it is important to collaborate with our customers, business partners, industries, local communities, the national
government, and society as a whole in order to resolve climate change issues. Our group engages in discussions and dialogue with various
stakeholders and works collaborat ively to realize the net zero emissions and the goals of the Paris Agreements.

Communication and Collaboration with business partners
Our group has established CSR Procurement Guidelines and asks our suppliers to cooperate in initiatives that support the development ofa sustainable society throughout the supply chain. At the guidelines, we ask our suppliers to maintain and strengthen their environment
activit ies, including initiatives aimed at solving the following climate change issues.
- To strive to reduce greenhouse gas (CO2 and other gases) emissions, and mitigate climate change- To strive for effective use of resources and energy savings such as improving the efficiency of water and energy use
In addit ion, our procurement department conducts CSR procurement survey based on the guidelines to monitor the status of efforts to
reduce GHG emissions and other initiatives. As a result of the survey, we ask suppliers to make improvements if they have any problems.
For the latest survey results and countermeasures (corrective measures), please refer to the following sections.
• Supply Chain Management> CSR procurement survey• CSR Procurement Guidelines-86-Involvement in organizations dedicated specifically to climate-related issues
GX League
We endorse t he Japanese government 's "GX League Basic Concept." GX refers to the transformation of the entire socioeconomic system
toward achieving carbon neutrality by 2050 and Japan's target of reducing greenhouse gas emissions by 2030.
In fiscal 2023, we participated in a forum for dialogue and rule-making organized by the Japanese government (Ministry of Economy, Tradeand Industry), where we exchanged opinions with the policy makers. As a result, the Board of Directors has decided to participate in GX
League, which will begin full-scale operat ion in April 2023. We will accelerate our internal efforts and work together with companies that
actively engage in GX, as w ell as government agencies, universities, fi nancial institutions, and other entities, with the aim of transforming
the ent ire economic and social system.

Green x Digital Consortium
We participate in the "Green x Digital Consortium", which aims to create a new society and market using digital technology to achievecarbon neutrality in society as a whole.

Keidanren Carbon Neutrality Action Plan
As a member of the Japan Chemical Industry Association (JCIA), our group participates in t he "Carbon Neutrality Action Plan" of t he Japan
Business Federation (Keidanren). Through the initiative, we confirm the Japanese government's cli mate change policy and reflect it in ourgroup-wide policy. We are working with the association on a variety of engagement activities related to climate change measures,
including the submission of comments on government policies, and are working to realize a decarbonized society.

Keidanren "Challenge Zero" initiative
In support of the "Challenge Zero" managed by the Japan Business Federation (Keidanren) in cooperation with the Japanese government,
we have announced specific initiatives for challenge innovation to create a decarbonized society.

-87-Plastic Resource Circulation
Materiality
Related ESG : E
Deca rbonized society and a recycling-oriented
society'1,, Basic approach'1,, Targets and results'1,, Initiatives'1,, Strengthening resource recycling measures'1,, Acquire ISCC PLUS certification (internationally sustainable carbon certification)'1,, Participating in initiatives

Basic approach
Plastic is an indispensable material for modern society, but it is also associated with issues such as the problem of waste, depletion ofnilttJrill rP<;otJrff'S, ;,nrl it<; imrilrt on r limiltP rh;ingP. Ag;i in<;t this; hilrkrlror, in 201 CJ RP<;otJrrP CirrtJlilt ion Str;itpgy for Pl;,s;tir<; Wil'>

formulated in Japan . The basic principles of 3R+Renewable • 1 and ambitious milestones up to 2030 • 2 were set out as directions to betaken. [n order to accelerate these efforts, the Act on Promotion of Resource Circulation for Plastics was enacted in April 2022.
TOYOBO group handles a large number of plastic products, including films, which are our mainstay products. We recognize that thetransition to a resource circulation society can be a maj or opportunity at the same t ime as business risks. In 2022, we clarified that ourgroup can contribute to a recycling-oriented society under the Sustainable Vision 2030 and set targets for 2030. We w ill begin bypromoting the use of green materials (biomass, recycled raw materials, volume reduction, and material conversion) from film-based • 3 _Having adopted the slogan "Catalyzing Circular Economy," Toyobo group is contributing toward the realization of the circular economy
through a wide range of initiatives, and by fulfilling our responsibility to future generations, we are aiming to realize sustainable growth.
* 1 Strea mlining (Reduce ·Reuse) the use of avoidable plastics. The essential use is switched to recycled materials and renew able resources (Renew able) and thorough recycli ng(Recyde).

* 2 Numerical targets from the perspectives of "Reduce," "Reuse ·Recycle," and "Recyclable Use • Bioplastics." "Effective use of used plastics by 100% reuse by 2035, th roughrecycling, etc." etc.

* 3 This excludes some products where safety or lifespan is an issue.

Targets and results
In May 2022, Toyobo group announced its Sustainable Vision 2030, which outlines its aspirations for the year 2030.
In this vision, we set a target of ra tio of green materials in main business operation for 60% in 2030.
Through this greening, we will contribute to reducing the use of pet roleum-derived resources and making them alternative.
In fiscal 2022, we studied the calculation method of the green ratio and calculated the actual resu lts.
Item

Percentage of green films•

FY2030 Target s

60%

Fiscal 2022 Results

11 %* Quantity ratio-88-Initiatives
Since the 1990s, our group has been engaged in recycling and the use of biomass raw materials, and has accumulated a variety oftech nologies and know-how. Since 1996, we have been developing a wide range of products and materials, including ECHORCLUB®, a PET
bottle recycled textile product. Going forward, we will aim to realize circular economy from 3R+Renewable perspective.
The following is an overview of initiatives from each view point.
The goal of "green" is to replace products that incorporate the following perspectives.

Our Group-wide Efforts for the Life Cycle of Plastics and resource circulation/ resource
recycling

Crude raw
matefia1s~
Through these initiatives,e are achieving the greeniftCation~

Raw
ma1enai1sof plastic products/ -(Ptomotion of lhe use of biomass and recycled
raw materials; reduction of thickr11us)

Used

~

plastic

Re-use- , • M~nufacturing

Consumption

Plastic
products

Waste~l(l'>fflll<bl•t<,<lil\O:™ft\lk'olulfdp&,,!.liC$llttr<htfflk..af)'btt.ioki~\JO,tMCIOwf'lif'ltO(f\ldt ,.....,tr'l.)t~i~"2M.ifflli•t<~The•t'UseGl°~pl4'!.liCs•srflins(,,wmalf•'-Ii.1•1~1hty1re~o,~Nt

ReduceDevelopment of thin. lightweight materials

Development of mono-materialization technologies and products

We reduce the amount of raw material used by reducing thickness
while retaining strength and functionality. When these kinds ofmaterials are used by customers, packaging can be simplified andthe amount of packaging materials used in the final product can be

We are reducing the amount of raw materials used while increasing
recyclability by replacing previous products consisting of several
different materials wit h t hose using a single material while
maintaining strength and functionality.

reduced.
Related technologies and products
Related technologies and products• ECOSYAR® VP Series- HAROEN®DN036• PYLEN EXTOP®

• SPACECLEAN"'-89-

Reuse -Recycle

Recycling in the manufacturing process

Chemical recycling•technology development

We collect scrap materials generated in the manufacturing process

In developing and practically applying chemical recycling(originating from airbags and film products) and reuse them astechnologies, we seek out technologies from around the world andmaterials for products in the same and other categories. In doing
so, we reduce waste generated in the production process.

collaborate proactively with external organizations and companies.
For example, we participate in the R Plus Japan project, actively

In addition to the manufacturing processes of our group, we also

pursuing development of chemical recycling technologies for

implement initiatives to advance recycling in the manufacturing

converting recycled plastic into raw matenal for the production ofprocesses of our customers.

high-quality recycled plastic.
• Chem,cal recychng: The reuse of used plastics after chem,cally breaking
them down into crude raw materials

Related technologies andproducts- ECOKURELEA~- ECOVYLOPE~

Collaborations and initiatives
Collaborations and initiatives- R PLUS JAPAN- Resource Recycling Project(KAMISHINE"' mold releasing film)- Anellotech, Inc.
- Japan Chemical Industry Association- COSMOSHINE SR~

Development of technology and products for material recycling•
We proactively develop and market products made of used plastics
as raw mat erials. We have also developed and are marketing
TOYO BO GS Catalyst®, a polymenzat,on catalyst for PET resin
designed to make resin recyclable after polymerization reactions.
Through efforts centering on the PET material to which thistechnology is applied, we are advancing the expansion of material
recycling technologies and materials in the global market.

* Material recycling: The reuse of used plastics as resms (raw materials)
after they are pulverized or melted

Related technologies andproducts

Collaborations and initiatives- Licensing of technology to- ECHORCLUB"'- Cnsper31

lndorama Ventures PublicCompany L1m1ted- TOYOBO GS Catalyst~

Other Initiatives

Renewable
Product development using biomass raw materials

Waste reduction
By reducing C02 emissions and reliance on petroleum-derived
resou rces, biomass raw materi al is expect ed to serve as a climatechange mitigation measure.
Our group is working for the conversion and expanded use of
biomass raw materials, and for t he practical applicat ion of biomass
plastics that remain highly functional.

Marine plastic and microplastic response
To help reduce marine plastic waste, we participate on the Clean
Ocean Material Alliance (CLOMA) established in Japan, as well as

Related technologies andproducts

other initiatives in our efforts to develop and advance alternative
Collaborations and initiatives

materials.

Collaborations and initiatives- BIOPRANA®

- PEF Resin Part nership (Avantium)- VYLOAMIDE'°- Partnership for PET resin madeusing 100% plant-derived raw- HOLLOSEP®
- Polyethylene furanoate (PEF)
resin (under development)• CLOMA

materials (Suntory group andAnellotech)

Waste reduction- Japan BioPlastics Association• THE JAPAN PLASTICS INDUSTRYFEDERATION- Waste reduction-90-

Examples of initiatives
ReduceReduceContributing to the reduction of plastic use in packaging by making thinner and using a single material
In line with Japanese policies such as the "Plastics resource circulation/ resource recycling Strategy," demand is increasing for film-based
products that contr ibute t o reducing the use of plastics in packag ing materials and making them suitable fo r recycling. However, packaging
materials such as foods that require a variety of performance, such as heat resistance and processing su itabi lity, are generally designed bylam ina ting severa l mat erials that have distinct characte ri stics. As a result, the number of raw ma t erials used increased, and it was difficult
to separate them separate ly. As a result. recycling was d ifficul t.
Our film-forming and other techniques have been cultiva ted over many yea rs t o enhance t he rig id ity and functiona lity of biaxially oriented
m polypropylene (hereinafter referred to as "OPP") film, which is a single mat erial, making the film 20% 2 thinner than conventional*

composites.
In additi on. the unique vapor deposi tion processing has enabled us t o achieve both high-heat resistance and high-ba rrier properties.
which have been cons idered difficu lt w ith OPP fi lms.
We are working to reduce the volume of packaging materials by rep lacing them wit h new OPP films. and to contribu te to t he realizat ion ofa recycling-orient ed society by promoting the use of ma terials.
• To develop a new ECOSYAR ® VP001 of transparent deposition OPP films, here.
* 1 Extending t he film in two axial directions (vertical and horizontal) during fi lm format ion* 2 For the PYLEN EXTOP® series of ultra -high-rigid ity OPP films

Reuse -Recycle

Material recycling

Material recycling of label boards
In KAMISHINE ® series of po lyester-based synthetic papers made from recyc led plastic bottles, we have developed a new recycling
technique fo r KAMISH INE NEO™ release film . wh ich is used in label moun t (release film/ separator) applica tions.
Unti l now. the label base paper is often made of paper coa te d w ith resin or the like on the surface. and it has been difficu lt to recyc le thematerial because it is a composite mat erial of resin and paper. In t he process of attaching labe ls to products, the label backing afte r thesurface substrate (sea l) was peeled off was generally discarded incinerated.
In 2022, we developed a new techno logy t o produce t he "KAMISHI NE ®" series.Th is techn ique uses the label backing paper (KAMISHIN E
NEO™ release fi lm) after use as part of the raw material to produce the same performance as conven tional products.
Resource Recycl ing Project was launched under the init iative of NEION Fil m Coatings Corp. a comprehensive manufacturer of adhes ive film
- coating techno logy, in order t o implement resou rce circu lation initiatives using this product and techno logy.

N:@&0@8 film using recycled r,ll'W mate,inls

M*l:i jj\j & Biom~uAdhesive
I Qfflttft &elusive recycling film
Entire la bel structure (i mage)

KAMISHINE NEO™ Release Film for label Backing Paper

By establ ish ing arteria l industry fun ctio ns and venous industry fun ctions,
we are achieving a circular recycling scheme.

Resource Recycling Project

Replace the label backing with ﬁlm (KAMISHINE NEOTM release ﬁlm) and collect used labelbacking from customers. Eﬀorts began in 2022 to recycle the collected used label backing as araw material for ﬁlm and recycle it as a resource. Since resource recycling initiatives are limited in
the case of companies on a non-consolidated basis, they are being promoted throughcollaboration among companies in diﬀerent industries with the expertise of their respective ﬁeld.
For more informa t ion about the Resource Recycling Project. please click here@ .

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Development of t he cata lyst that can increase the recyclability of PET

Material recycling

TOYOBO GS Catalyst®, a polymerization catalyst developed by Toyobo, is the world's first aluminum catalyst that does not contain any
heavy metals. PET degrades during repeated melting processes in recycling, but the PET obtained using this catalyst does not deteriorate
when melted, making it well suited to recycling.
In December 2022, we received the 71 st Chemical Technology Award in fiscal 2023 from the Japan Chemical Association, the largest
chemica l society in Japan, for developing and industrializing this polymerization catalytic converter. This award is awarded to those whohave achieved particularly remarkable achievements in Japan's chemical ind ustry.
Toyobo has already licensed t he technology to Thailand's Indorama Ventures Public Company Ltd., the world's largest PET resin
manufacturer. Toyobo also participated in The Packaging Conference 2022, an international conference which held in America, and held
exhibition and presentation. With the excellent recyclability of the prod uced PET resin, we will contribute to realize the circular economy incooperation with Indorama .
• Toyobo promotes global use of its aluminum catalyst technology t hrough polymerization technology licensing contract with world's large
st PET producer, Indorama Ventures Pel• Toyobo wins Chemical Society of Japan Award for Technical Development for 2022; helping realize a circular economy wit h an em-friendly
aluminum catalyst for polyester polymerization

TOYOBO GS Catalyst® (front) enables synt hesis of resins with

PE- bottles synthesized using TOYOBO GS Cata lyst®

higher transparency than other cata lysts

Recycling of used plastics beyond the industry

Chemical recycling

in June 2020 the joint venture company R Plus Japan, Ltd. was established by a group of 12 companies operating in Japan's plastics value
chain, which includes Toyobo. As of August 2023, t his number has grown to 40 companies, and together with Anellotech it is continuingwith the development of new technologies.

Anellotech's recycling techniques
Anellotech's new technology is a chemical recycling technology that uses used plastics as raw materials to produce crude raw
materials for common plastics. It is characterized by the ability to produce a variety of crude raw materials from the mixed state ofmultiple types of plastics, and by the low loss in the process. Because it can be processed by fewer processes than theconventional method, it is expected to reduce CO 2 emissions and energy-consumption. If this technology is established, it ispossible to return used plastics, which have been used in heat, to raw materials, and it is possible to add more value to usedplastics.
So that we can contribute to solving the common worldwide problem of plastics, we aim to have t his technology in practical use
by 2030. To do this, we are collaborating with companies in a range of industries, including those in sorting and processing ofcollected plastics, distribution, and production of monomers, polymers, packaging and containers, and beverages.
• R Plus Japan Ltd. @-92-

Renewable

Biomass feedstock

100% biomass plastic in film
Our focus is on furandicarboxylic acid (FDCA) as a biomass raw material. FDCA is polymerized using our proprietary technology to produce
polyethylene furanoate (PEF), a high-performance polyester. PEF is a 100% biomass plastic with excellent gas barrier properties, and whenformed into a film can help extend the shelf life of food contents, and thus reduce food losses. The world's first FDCA product ion plant isscheduled to be opened by Avantium in 2024. We plan to use this FDCA to produce PEF film.

Polymerization of 100% bio-based PET resin

Biomass feedstock

In December 2021, Suntory Group and Anellotech, Inc. jointly developed a prototype PET bottle made from 100% pla nt-derived raw
materials. Toyobo contributed to the development through its polymerization technology.

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Waste reduction Initiatives

Minimizing waste

Our manufacturing sites are working under TOYOBO Group Fundamental Policy on the Global Environment to reduce, reuse, and recycle
waste. We strive to minimize the amount of landfill waste by reducing the amount of waste generated by reusing non-standard products
and scrap materials, and by making the most effective use of waste generated.
• Waste reduction-93-Strengthening resource recycling measures

Renewable-resource business development
In April 2020, we established Renewable Resources Business Development Department in order to further accelerate our efforts related toplastic resource circulation and contribute to a sustainable society.
Renewable Resources Business Development Depa rtment is searching for technologies and collaborating with other companies topromote the conversion to biomass raw materials and the use of recycled raw materials.
We have drawn up a roadmap to 2030 - while also looking towards 2050 - based on government policies in Japan and overseas, as wel lindustry targets for the environment. In collaboration with our partners worldwide, we aim to shift to biobased products focused onpolyester resin, and to establish technologies related to mechanical and chemica l recycling. Working closely with each Solutions Division,
we will also adapt flexibly to changes in the business environment.

MissionEnsuring the supply of
renewable resources

Developing recycling-related
technologies

Expanding businessLong-term outlook

2040- 50
Realization of acircular economy

2030
Shift to biobased polyester
resin and establishment of
mechanical and chemical
recycling technologies

2020
Launch new department,
establish concrete development
themesAcquire ISCC PLUS certification (internationally sustainable carbon
certification)
Toyobo Co., Ltd. and Toyoshina Film K.K., a Toyobo Group company, have received ISCC (Internationa l Sustainability and Carbon
Certification) Plus certificat ion, an internat ional cert ification designed to confirm the sustainable content of products. Toyobo is scheduled
to start selling a bio-based, biaxially-o riented polypropylene (OPP) film as an ISCC Plus-certified product in autumn 2023. The properties ofbio-based raw materials in the OPP film to be manufactured by Toyoshina Film will be assigned to a portion of the product based on themass ba lance approach*.
ISCC Plus certification, which is pa rt of the ISCC certification system, is aimed at confirming that mainly bio-based feedstocks andrecyclables are properly managed in t he process of turning raw materials into final products in the entire supply chain using the massbalance approach.
• Toyobo obtains ISCC Plus certification; ready to sell bio-based, biaxially oriented polypropylene films based on mass balance approach* A method in which during the process of turning raw m aterials into final products and the distribution process, raw m aterials with certain properties (e.g., bio-based raw
m aterials) are mixed with raw materials that do not have the properties (e.g.,petroleum-based raw m aterials); the properties are thus assigned to a portion of the productaccording to the input of ct-e raw m aterials having those properties. (Source: M inistry of Environment, "Roadmap for Bioplastics I ntroduction.")-94-

Participating in initiatives
The Toyobo group is working closely w ith a variety of companies and organizations, and is active in a number of initiatives aimed atcontributing to the construction of a plastics value chain that is appropriate to the era of the circular economy.

Japan BioPlastics Association
This group was established in 1989 w ith the aim of promoting t he use of bioplast ics,* andestablishing a testing and eva luation system. An executive from Toyobo serves as the ViceA
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B*IH:t:15AT:;t?1'1,f::Japan BioPlastics Association

Chairman, and we are active in the association's activities including participation in executive
meetings and various committees.
* Collective ter m for biodegradable and biom ass plastics

CLOMA (Clean Ocean Material Alliance)
CLOMA is an organization established in Japan w it h the aim of increasing the effective use ofmarine plastic waste through reductions and recycling . Its members include more than 350
companies throughout the supply chain involved in the manufacturing, processing, and useof packaging and other materials. Toyobo has been a member of the all iance since it wasestablished in 2019.
Through collaboration w ith other CLOMA members, w hich includes manufacturers,
processors and users of packaging and other materials, we will work to develop and promotet he use of alternative materials.

~~)

CL OM A

J4CE (Recycling Economic Partnership)
This partnership was founded for t he purpose of strengt hening public and private
partnerships, wit h the aim of further fostering understanding of the circular economy amonga wide range of stakeholders, includ ing domestic companies, and promot ing in itiatives in
response to the accelerat ing g lobal trend toward a circular economy. We participated in J4CE
in September 2022.

C

J4CE
JAPAN PARTNERSHIPFOR CIRCULAR ECONOMYAPR(The Association of Plastic Recyclers)This is an internationa l industry organization that represents the recycling industry forplastics. We are supporting circular economy through unique certification programs to ensurehigh-quality recycled plastics, testing methods to evaluate recyclability, and educational
activit ies. We j oined in March 2023.

~ RECYCLERS

CEFLEX (Circular Economy for Flexible Packaging)
In August 2019, Toyobo group joined t he European consortium Circular Economy for Flexible
Packaging (CEFLEX). Established in 2017, CEFLEX is a consortium that promotes the realizationof a circular economy through the use of flexible packaging. This includes more t han 130
companies and organizations involved in the flexible packaging value chain, including leadingmaterials manufacturers and recycling companies. Its goals include establishing by 2025 a
Europe-wide collection, sorting, and reprocessing infrastructure for used flexible packaging .
While understanding t he latest information and trends regarding recovery systems andregulations, we will focus on developing and supplying em-friendly technologies andproducts to contribute to the realization of a circular economy.

-95-

00
CEFLEXA CIRCULAR ECONOMY FOR FLEXIBLE 'ACKAGING

Feature

Contributing to the Development of Prototype PET Bottles
Made from 100% Plant-Derived Raw Materials

Toyobo group is actively promoting the switch to biomass
raw materials and the utilization of recycled raw materials,
with its goal to increase the ratio of green film products1 to
60% by 2030. We have used our core technologies todevelop a variety of eco-conscious products.
In December 2021, Suntory Group and Anellotech,
Inc. jointly developed a prototype PET bottle made from
100% plant-derived raw materials (100% bio-based PET
bottles) using one of our core technologies,
polymerization.2 Generally, PET resin is produced by thepolymerization of terephthalic acid and ethylene glycol,
which are both derived from fossil fuel resources.
Anellotech’s technology enabled to produce terephthalicacid efficiently from plant-derived raw materials. The
group’s success in polymerizing 100% bio-based PET resin
from bio-based terephthalic acid and bio-based ethylene
glycol contributed significantly to the development of 100%
bio-based PET bottles.
1 Promotion of the use of biomass and recycled raw materials, and volume reduction
2 Chemical reactions to produce desired polymers

Manufacturing Flow of 100% Bio-Based PET Bottles
Utilizing our coreadvanced polymerization
technology

Bio-based terephthalic acid100% Bio-based
PET (polyethylene
terephthalate)

Bio-based ethylene glycol

100% Bio-based
PET bottles

Both traditionallyderived from fossil
fuels resources

Polymerization

Pellets

Polymerization of 100% bio-based PET resin

Key to success is a thorough preliminary examination leveraging cultivatedknowledge and technical capabilities

Yuichiro Matsuura
Polymers Development Center,
Tsuruga Research andProduction Center

Creating bio-based terephthalic acid has been considered difficult. While it was successfully
generated using Anellotech’s technology, it resulted in only a few dozen kilograms as apolymerization sample, which was much smaller quantity than anticipated. When
implementing polymerization, we normally expect some failures, but with such a small amount,
not even a single failure is acceptable. For this reason, after thoroughly analyzing andpreparing the raw materials and equipment, respectively, the team determined thepolymerization conditions after numerous discussions. The actual polymerization was repeatedmore than a dozen times in small quantities in order to disperse the risk and produce as much
100% bio-based PET resin as possible. However, the increased frequency requires anawareness of variations in quality. Each operation to adjust the temperature or pressure was
performed carefully step by step to avoid such variations, and then fine-tuned according todifferences among lots of raw materials and in the daily temperature and humidity. I remember-96-

always watching for any abnormalities in each and every process. As a result, we were able
to obtain the same quality. It was a true relief when all of the polymerization was completed.
I believe that the skills I cultivated since joining the company and the abundant
PET-related data and expertise that was accumulated over many experiences were key tothis success. In working on polymerization, I learned many things from my managers andthose in my department. I believe that it was this warm support that enabled us to succeed
even while being pressured not to fail.
I would like to continue engaging in various projects to further increase confidence in
Toyobo’s technological capabilities, and contribute to the development of products that
positively contribute to society.

Team members of 100% bio-based
PET resin project

Creating an organization that can pass on skills

Fostering a culture of nurturing young engineers throughout
Functional Materials Production and Technology Operating Department

Gaku Maruyama
General Manager of Tsuruga
Polymers Plant
and Manager of Polymers
Development Center,
Tsuruga Research andProduction Center

I am very happy to have contributed to the development of a 100% bio-based PET bottles
prototype with Toyobo’s technology, and I am proud of the members who accomplished this.
Toyobo’s facilities enable consistent technological development, from basic studies likethose in university laboratories to condition studies for commercial production in plants. Ourstrength lies in our extensive facilities and wealth of data and know-how based on many yearsof experience. We have earned the confidence of customers in our polymerization technology,
and they often entrust us with various polymerizations.
In such a privileged environment, our department actively assigns large projects to young
engineers in the second and third year of their careers in order to encourage them to grow as
professionals. We know that there is a lot of pressure and anxiety associated with “can’t-fail”
projects such as these, and we do our best to support them.
Throughout the projects, engineers deal with advanced technology in addition to thepolymerization work itself. As a result, I feel that the young engineers have learned andadapted the technologies that were inherited from predecessors at Toyobo.
I feel rewarded when I hear feedback such as, “I am glad I had this experience eventhough I made some mistakes,” or when I see young participants in this project using theirknowledge to help engineers who are less experienced.
The Functional Materials Production and Technology Operating Department as a whole
has this kind of “culture of nurturing young engineers.” I would like to continue to develop
human resources and contribute to the company’s growth by giving younger engineers work
they are responsible for, and providing them with the support to do so.

-97-

Waste Reduction
Materiality
Related ESG : E
A decarbonized and circu lar society--1, Basic approach--1, Targets and results--1, Environmental compliance11mm-.!, Initiatives

Basic approach
In line with the TOYOBO Group Fundamenta l Policy on the Global Environment, each of Toyobo group's production sites is implementing
initiat ives to reduce, reuse, and recycle waste. By reducing the amount of waste through measures such as recycling non-conforming
products and offcuts, and by finding ways to effectively utilize, as far as possible, the waste that we do generate, we are striving tom inimize the amount of waste sent to landfill.

Targets and results
We have set ourselves the goal of reducing waste by 15% (compared to fiscal 2016), and we will keep the final disposal (landfill disposal)
rate down to less than 1% while proceeding with waste reduction.

Initiatives

Targets (FY2031)

Waste volume (consolidated)

15% reduction (compared to FY2016)

Results (FY2023)

13% increase

Consolidated: TOYOBO CO., LTD. and consolidated subsidiaries

In fiscal 2023, the amount of waste increased by 13% compared to fiscal 2016. This was due to a limited increase in waste generated whencleaning tanks for treating process wastewater. On the other hand, we achieved a consolidated final disposal rate of 0.5%, continuing tosuccessfully meet our target in this regard.

Environmental complianceThree years from fiscal 2021 to fiscal 2023, there were no regulatory violations related waste permits, standards and regulations.

-98-

Initiatives
To reduce the amount of waste, we are collecting offcuts produced during manufacturing processes and reusing them as material for
producing either the same type of product or different products. We are also making effective use of items such as used plastic packaging
materials by recycling them in the form of pallets. Furthermore, when outsourcing the disposal of industrial waste, we select outsourcing
providers that are capable of implementing recycling.
With rega rd to polychlorinated b i phenyl (PCB) waste, we are proceeding with appropriate disposal in a systematic manner. We areproceeding wit h systematic renewal of electric facilities containing low-concentration PCBs that are currently still in use.

Achievement of Zero Landfill of Plastic Waste (Efforts of Mitsumoto Chemicals Co.,Ltd.)
In response to the enforcement of the Plastic Resource Circulation Act in 2022, Mitsumoto Chemicals Co., Ltd. made efforts to improve therecycling rate of waste (mainly products mixed with plast ics and different materials) and achieved zero landfill.
Specifically, t he following measures were taken.
(1) Separating materials until t hey can be recycled(2) Developing new recycling contractors(3) Continuing waste separation by raising awareness of employee through in-house training
In the future, we w il l expand t his initiative within the group to promote recycling.
Plastic Resource Circulation

➔

-99-

Water Resources
Materiality
Related ESG : E
A decarbonized and circu lar society,I, Basic approach,I, Structure,I, Initiatives related to risk reduction,I, Identifying risks,I, Results,I, Environmental compliance,I, Initiatives related to identifying opportunities,I, Initiatives related to expansion of opportunities

Basic approach
Water is a precious resource that keeps us alive and supports our lifestyles, and conserving water resources is an important global issue.
The Toyobo group has committed in t he TOYOBO Group Charter of Corporate Behavior to reduce and reuse resources used, including
water resources, and to take measures to address environmental risks. In the area of business activities, we are working to minimize theuse of water resources and conserve them by promoting water recycling.
Meanwhile, aiming to be a group that "continue to create the solutions needed by people and the earth w ith materials and science", ourgroup will cont ribute to the conservation of water resources in Japan and abroad through our seawater desalination business and otheractivit ies.
• TOYOBO Group Charter of Corporate Behavior

Structure
Global Environment Conservation Conference is responsible for formulating and monitoring policies and measures to conserve water
resources.
The content of deliberations at Global Environmen t Conservation Conference will be reported and shared as appropriate by Sustainability
Committee through Safety and Disaster Management Division Director.
Board of Directors receives regular reports on the content of discussions at Sustainability Committee, approves key issues such as seniorpolicies and targets, and oversees the progress of activities.
• Structure on corporate environmental issue-100-

Identifying risks
To identify water risks (water stress, drought, flooding, water quality, etc.) in t he operations of our business sites aro und the world, we uset he AQUEDUCT Water Risk Atlas pu blished by t he World Resources Institute (WR!) to conduct o ur annual period ic assessment. In addition,
if there is a change in t he planned construction of a plant, an ext raord inary assessment is conducted at that t ime to confirm t he risks prior
to the const ructio n of a new site.
As a result, our two business sites in Thailand and Saudi Arabia were assessed as having hig h risk in terms of t he amount of water available(existence of risk of droug ht occurrence and variation in t he amount of water available from year to year).
Based on these results, we d iscussed with the relevant depart ments and confirmed the following for t he two sites concerned.
- Located in an industrial park that is properly managed under t he regu lations of t he country where t he site is located, and m easures arein place to minim ize risk to an extent feasible (e.g., water supply backup system, etc.).
- Water consum ption is less t han 0.1% of t he Toyobo's total water intake.
The group t herefore does not current ly consider itself to be exposed t o any water risks that could have a significa nt financial or strategic
im pact.

Results
The following table shows t he water intake by region for fiscal 2023.
Despite a m ore t han 6% increase in sales in fiscal 2023 compared to the previous year, the group's water intake was kept at a slightincrease of about 0.3% over last year, as a result of ongoing water conservat ion efforts at each site to red uce the amount of water intake.
• Water intake by source and discharge by destination (305KB) ~Draw water volume by Region

Draw Water Volume by Region for FY2023(thousand m3 }FY2021

FY2022

FY202378

94

86

Low risk regions• 2

84,39485,83086,111

Total

84,47285,92486,197

High ri sk .-egions* 1

High risk
regions - -

0.1%

~

Low riskregions

99.9%■ High r isk regions■ Low risk regions* 1: Hig h-risk regions: Regio ns rated as high r isk in t er ms of t he amount of wat er available in t he AQUEDUCT Wat er Risk At las.
*2: Low-risk regions: Regio ns other than high-risk areas.

Environmental complianceThree years from fiscal 2021 to fiscal 2023, there were no regulato ry violations related water quant ity permits, standards and regulations.

-101-Initiatives

Risk reduction
Water resource management
Our group promotes appropriate management of water resources through improvements in manufacturing processes, water conservation
activit ies, and the use of recycled water.

SourceWater
supplyIndust rial
water

River
water

Ground
water

7

Usage

W a<tP watPr trPatmPnt

Releaseualit monitorin
Rivers, lakes, sea

Water reusing and recycling system
Our group's manufacturing facilities process includes the cooling process for plastic resin products. Water used as cooling water isrepeatedly used without being discharged.

Collaboration with local community
The Tsuruga Research and Production Center of our group participates in the "Tsuruga City Water Environment Improvement Roundtable,"which consists of loca l government officials, academics, residents, companies, and NGOs that have come together for the purpose ofgroundwater management. The report provides information on measures to achieve the reduction targets promised to the loca lgovernment and citizens, as well as the results of activities and future plans.

Identifying opportunities
Contributing to the elimination of water shortage through business operations
Almost all of the water covering the globe is seawater, with limited quantities of the fresh water that we use. As a result, regions where
fresh water is difficult to use are facing water shortages. The Middle East and the Gulf region in particular are seeing ongoing, remarkableeconomic development, with improved living standards and increased populations. As a result, securing water for both industrial anddomestic use has become problematic, and the introduction of desalination plants* is underway. The Toyobo group supplies t hemembranes used in seawater desalinat ion facilit ies, thereby helping to eliminate water shortages in these regions.

* Seawater desalination facilities: These removes the various salts present in seawater in order to produce fresh water, providing water for drinking and industrial use.

-102-

Expansion of opportunities.
HOLLOSEP® hollow fiber reverse osmosis membranes
The Toyobo group's hollow fiber type reverse-osmosis (RO) membrane element HOLLOSEP® is a membrane that contributes to desalinationof seawater. [t boasts high water recovery rate. offers superior chlorine tolerance, and can inhibit the proliferation of m icroorganisms
t hrough chlorine sterilization. We produce high quality drinking water in the Midd le East and Gulf countries t hat have high-temperature,highly saline seawater, harsh conditions for reverse osmosis membranes. With over 30 years' usage, these are highly acclaimed and hold ahigh market share. These are also used domestical ly, in Japan's largest seawater desalination plant.

-103-

Chemical Substance Management andReducing Environmental Impact
Chemical Substance Management-.J,, Basic approach-.J,, Structure-.J,, Initiatives

Reducing Environmental Impact-.J,, Basic approach-.J,, Targets and results-.J,, Environmental compliance-.J,, Initiatives

Chemical Substance Management

Materiality
Related ESG : E
Clean w ater areas, air and soil, and preservationof biodiversity

1111!111

Basic approach
In line with the TOYOBO Group Fundamental Policy on the Global Environment, Toyobo group endeavors to manage chemical substances
appropriately t hroughout the product lifecycle (research, development, design, manufacturing, sales, use, and disposal), in order to help
conserve the global environmen t, support d isaster prevention, ensure workers' health and safety, guarantee product safety, and ensure
conformity with each country's chemical substance regulations.

Structure
In order to promote appropriate management of chemical substances, Toyobo group has established a management structure at eachproduction site. Each Solutions Division supervises the activities of the production sites and g roup companies under their j urisdiction.
In addition, we have created the TOYOBO Chemical Substance Management Classification in compliance with relevant laws and regulations-both international and domestic-as well as client requests. This classifies the chemical substances we handle into five levels, and t he
management procedures are specified for each level or "rank." Use of substances in rank A and Bis permitted only when the risks arethoroughly assessed, m itigation measures are taken, and the risk is deemed tolerable. We are continuously making efforts to reduce theoverall usage volume of rank A and B substances by optimizing and replacing these substances.

-104-Chemical Substance Management Structure
Chemical SubstanceManagement Subcommittee
Secretariatt------< (QualityAssuranceManagement
Department)Groupcomp.imes

Manufacturing
Departments

Development
Departments

Technology
Department

Safety andDisasterManagement
Department /Environmental
Management
Department

Engineering
Departments

Environment&
SafetyOffke

Management at
Production sites

TOYOBO Chemical Substance Management Classification
Rank

Management Category

Notes (laws and regu lations, etc.)

A

Substances requiring particularly strict
management

Chemical Substances Control Law*1, Industrial Safety and Health Act, Poisonousand Deleterious Substances Control Act, Act on the Protection of the Ozone Layer
through the Control of Specified Substances, etc. and Other Measure, Act on theProhibition of Chemical Weapons and Control, of Specific Chemicals, POPs*2 , PIC*3 ,RoHS*4, REACH*5, etc.

B

Substances requiring strict
management

Chemical Substances Control Law, PRTR*6, Industrial Safety and Health Act,
Poisonous and Deleterious Substances Control Act, REACH, etc.

C

Substances requiring strict exposure
prevention measures

Chemical Substances Control Act, PRTR, Industrial Safety and Health Law,
Poisonous and Deleterious Substances Control Act, Fire Service Act, etc.

D

Substances requiring exposure
prevention measures

PRTR, Industrial Safety and Health Act, etc.

E

OthersOther than A-D* 1 Chemical Substances Control Law: Act on the Regu lation of Manufacture and Evaluation of Chemical Substances*2 POPs (treaty): Stockholm Convention on Persistent Organic Pollutants*3 PIC (t reaty): Rotterdam Convention on t he Prior Infor med Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade*4 RoHS: Restriction of the use of certain Hazardous Substances in electrical and electronic equipment*S REACH: Registrat ion, Evaluation, Authorisation and Restriction of Chemicals*6 PRTR: Pollutant Release and Transfer Register-105-

Initiatives
Recent years have seen new requirements to manage chemical substances wit hin the supply chain. In add ition to the European RoHS
Directive and REACH regulations, such requirements also apply in Japan, following the coming into effect of the Act on the Regulation of
Manufacture and Evaluation of Chemical Substances (Chemica l Substances Control Law), as well as other regulations relating to chemica lsubstance management. Additionally, the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) has been adopted
by the United Nations.
In v iew of this situation, Toyobo has introduced a chemical substance management system (TCAS* 1) covering every stage fromprocurement through to manufacturing and sales. We revise the content of chemica l substance surveys for our suppliers as necessary inaccordance with the laws and regulations of each country and revisions to the Japanese "chemSH ERPA®"* 2 and other regulations. This is torealize green procurement while providing accurate and prompt support to our customers. We employ this system to investigate the use ofregulated substances and carry out surveys regarding content in products.
* 1 Toyobo Chemical Administration System* 2 A scheme that facilitates sharing information on chemical substances in products led by the Ministry of Economy, Trade and Industry

Green procurement
We prioritize procurement of raw materials w it h a low environmental impact, and work with business partners who take a proactive
approach to protecting the environment. To this purpose, we have established our group-wide Green Procurement Standards (selection
standards for suppliers and selection standards for materials) in Green Procurement Guideli nes, which are made known to our suppliers
and w idely available on our website.
In particular, with regard to chemical substances management, we have established the following criteria for selecting materia ls, and wecomply with various chemical substances management regu lations, including the European RoHS Directive and REACH regu lations.
(1) Not containing any of our prohibited substances, Rank A and B in TOYOBO Chemica l Substance Management Classification.
(2) Identifying the content of the hazardous substances specified by our company, Rank A B, C. and Din TOYO BO Chemica l SubstanceManagement Classification.
• Green Procurement Guidelines

Supplier monitoring
Our group has established "CSR Procurement Guidelines", and we ask our business partners to cooperate in initiatives that support thedevelopment of a sustainable society t hroughout the supply chain. "CSR Procurement Guidelines" also includes the above-mentioned
promot ion of green procurement.
Our group conducts "CSR procurement survey" based on "CSR Procurement Guidelines" and monitors the status of CSR init iatives. As aresult of the questionnaire survey, we are asking our suppliers to make improvements. For the results of the latest questionnaire and thecountermeasures (corrective measures), please refer to the following items.
• Supply Chain Management> CSR Procurement Survey• CSR Procurement Guidelines

Participating in initiatives
We also participate in Joint Article Ma nagement Promotion-consortium (JAMP) for the smooth disclosure and transm ission of information
on chemical substances contained in products in supply chain.

-106-

Reducing Environmental Impact

Materiality
Related ESG : E
Clean w ater areas, air a nd soil, and preservationof biodiversity

lll!III

Basic approach
In line with the TOYOBO Gro up Fundamental Policy on t he Global Environment, wit h regard to chemical substances t hat are em itted into
the at mosphere or int o water areas, Toyobo group has set self-management standards st ricter t han t he statutory requirements andreduction targets. Based on these, w e implement rigorous management and are working to reduce emissions.

Targets and results
We have set ourselves the targets of red ucing emissions into the atmosphere of substances that have an impact on the environment by
60%, and of reducing such em issions into water area by 80%, compared to fiscal 2015, by fiscal 2031.

Category

Initiativ es

Targets {FY2031)

Results {FY2023)

Atmosphere

voc emissions (Japan total)

60% reduction (compared to FY2015)

60% reduction

Water

Discharge of hazardous substances into water (Japan total)

80% reduction (compared to FY2015)

71 % reduction

Japa n Total: TOYOBO CO., LTD. a nd dom estic consolidated subsidiaries

In fi scal 2022, we succeeded in reducing em issions into t he atmosphere by 60%, compared to fiscal 201 5. This was due to an operat ion of
VOC recovery equipment at several plants.
Emissions of environment pollutants into water also reduced by 71 % com pared to fiscal 2015.

Environmental compliance
There were no incidents of non-compliance with air pollut ion o r water quality permits, standards and regulations for the three years fromfi scal 2020 to 2022.

-107-

Initiatives
Compliance with the Pollutant Release and Transfer Register Act (PRTR Law}
Toyobo group estimates and reports the amount of emissions and amount t ransferred for chemical substances that are subject to PRTR
Law. Based on the overall results t hat are announced each year. we strive to utilize this information effectively in reducing the amount ofemissions and the amount t ransferred.
We are proceeding w ith the improvement and replacement of production equipment and installations. the improvement of operating
conditions, t he installing of equipment for removing relevan t substances, and the adoption of substitute raw materials and auxiliarymaterials, in order to reduce emissions.

Initiatives for preventing air and water pollution
Toyobo group complies with environmental regulations set by nationa l and local government authori ties and ru les set by environmental
conservation agreements. In addit ion, we implement management for air emission and water discharge from our production sites, bysetting self-management standards more rigorous than the statutory requirements in some cases.
We have installed monitoring systems within our production process, and remove harmful chemical substances from gases and water
emitted at our production site by utilizing a variety of environmental protection tech nologies. including in-house developed VOC treatment
equipment. We also strive to improve our manufacturing processes so as to minimize the amount of these substances that is used andemitted.

-108-

Biodiversity
Materiality
Related ESG : E
Clean water areas, air and soil, and preservationof biodiversity-.l, Policy and approach-.l, Identifying risks

1111!111-J,, Initiatives

Policy and approach
Toyobo Group Fundamental Policy on the Global Environment calls for the group to actively
support and participate in environmen tal protection and biodiversity conservation activities
throughout society and in local regions. as a good corporate citizen. In doing this. we strive tominimize the impact of our business activities on ecosystems and aim to realize a nature

Keidanren
Initiative for
Biodiversity

positive through conservation and maintenance activit ies in cooperation with local
communities. To strengthen the efforts for biodiversity conservation, we formulated the"Action Guidelines for Biodiversity Conservat ion" in November 2021 and endorsed t he"Initiative based on the Declaration of Biodiversity by Keidanren" in January 2022. We
participated in 30by30 Alliance for biodiversity in November of the same year. We arepromoting activities based on the following guidelines w ith respecting "Declaration of
Biodiversity, Guide to Action Policy" issued by Keidanren (Japan Business Federation). and" Guidelines for Private Sector Engagement in Biodiversity" formulated by the Ministry of theEnvironment.

Action Guidelines for Biodiversity Conservation
We recognize that biodiversity is an essential part of a sustainable society. As a group which continues to create the solutions
needed by people and the eart h, understanding the impact of our business activities on conservation of biodiversity, we w ill
endeavor to conserve the three types of biodiversity (species, genetic, and ecosystem diversity) through various activities.
• We will work to understand how the group's business activities depend on and affect biodiversity. and endeavor to avoid or
minimize negative impacts.
• We will strive to give consideration to biodiversity conservation throughout the entire value cha in.
• We will contribute to the conservation by promoting development of Biodiversity-conscious products and technology.
• We will support and promote conservation activities through the employee's participation, and cooperation and collaboration
w ith various stakeholders including local commun ities and NGOs.
• We will comply w ith domestic and overseas agreements on biodiversity.

• TOYOBO Group Fundamental Policy on the Global Environment-109-

Identifying risks

Toyobo group's business activities and its involvement in biodiversity
At all domestic and overseas production sites of our group, by using IBAT,*1 we will conduct surveys to determine whether there are any
rare species or natural environments such as the World Natural Heritage sites, IUCN*2 Protected Area Management Categories I-VI, andt he Ramsar Convention*3 that should be conserved within 1 km around t he site, and we have picked up t he following sites.
In addition, we will set up initiatives in accordance wit h each local situat ion at our sites as Biodiversity Action Plan (BAP). We confirm theirprogress at a company-wide meeting (Global Environment Conservation Conference) starting in fisca l 2024, along with t he promotion of
biodiversity conservation.
*1 The abbreviation of "Integrated Biodiversity Assessment Tool" refers to a dat abase of t he world's protected areas in which the United Nations Environment Programme(UNEP) and other organizations participate.
*2 The abbreviation of "International Union for Conservation of Nature" refers to an international nature conservation network consisting of national, governmental and nongovernmental agen cies.
*3 Official name is "Convention on Wetlands of International Importance Especially as Waterfowl Habitat". It aims to conserve wetlands, which are an important habitat for ava riety of organisms and a valuable resource for human life, through international cooperation and promote the wise use.

Sites with a Natural Environment to be Conserved
Site namel

IBAT assessment result

Explanation

Toyobo Jwakuni Production Center
TOYO CLOTH CO., LTD Iwakuni Plant(lwakuni, Yamaguchi)

Protected landscape areas
Resource conservation areas

Part of a national park or quasi-national park
Areas to be protected for the sustainable use ofnatural resources

Toyobo Research Center(Otsu, Shiga)

Species and habitat
management areas

Natural Habitat Conservation Areas, National
Wildlife Protection Areas

TOYO CLOTH CO., LTD Tarui Plant (Sennan,
Osaka)

Resource conservation areas

Areas to be protected for the sustainable use ofnatural resourcesJAPAN EXLAN COMPANY., Ltd.
TOYOBO PHOTO CHEMICALS CO., LTD.
(Okayama, Okayama)

Resource conservation areas

Areas to be protected for the sustainable use ofnatural resources

Toyobo Tsuruga Research and Production Center(Tsuruga, Fukui)Species and habitat
management areas

Natural Habitat Conservation Areas, National
Wildlife Protection Areas

Toyobo MC Takasago Plant (Takasago, Hyogo)

Resource conservation areas

Areas to be protected for the sustainable use ofnatural resources* Toy obo Tsuruga Research and Produ ct ion Center; and Toyobo M C Takasag o plant: A reas to be protected are located more than 1 km (but less than 2 km) from th e site, but areincluded in the scope of this activity-110-

Relationship between Business Activities and Biodiversity
Life cycle of business activ1t1es
the bu5'ness location

Crude oil / Natural gas, etc.

Energy Resources

tvletols /Input

Mineral Resources

Crude oil/ Iron, etc.

Renewable resources

Water / Plant-derived materials/ Wood/ Paper. etc.

Chemical substances

Chemical substances

Paper, etc.

Climote ch,:mge,
Environmental impact,
Habit at loss. Decrease inbiological resources,

Water, etc.

Invasion of foreig n

species
ExamplesPetrochemicals

of environmentally

Plastics etc.

consc1ous products

Products and services of each solution(Films, Life Science, Environment and Functional Materials, Functional Textiles and Treading)
Emissions into
the atmosphere
Dischorge i nto waters

Outputll

CO,, NOx, SOx, Dust and Soot, etc.
BOD, COD

BOO, COD

BOD, COD

etc.

etc .

etc.

SaltPoWaste

Discharge to soil

Waste generation

Waste

Climate change

Greenhouse gas generation

Impact (risk)

Environmental impact

Pollution of air. water and soil, Depletion of resources

Impact on

Habitat loss/ Decrease

ECOS'{stemContribution(opportunity)in biological resources

conMnatkm

power generation
adopting FO membranes

Resource recycling(recycling)

Habitat toss/
Decrease inbtologlCII resources

Habitat loss/ Decrease in biological resources
Invasion offoreign species

Invasion offoreign species

Invasion offoreign species

Climate change

Greenhouse gas reduction (Energy conversion / Energy conservation) ,Development of environmentally conscious products

Environmental impact

Resource recycling, Waste reduction, Appropriate chemical substance management
Use of renewable resources. Development of environmentally conscious products

Habitat 106S / Decreasein biologicalresources. etc.

(Above) activities to reduce emironmental impoct. Promotion of oworeness of CSR
Procurement Guidelines and White Logistics, Control of genetically modified organisms,
Social contribution activities, Forest conservation activities

Contribution to
btodiwrsity

Greenhouse gas
reduction

BREATHAIR•
Use of plant-derived
raw materials

BIOPRANAo ONY

Made with reference to t he "Map of Relationships between Corporations and Biodiversity" published by the Japan Business Initiative for
Biodiversity.

Initiatives

Risk reduction and increasing opportunities (risk control)
To minimize the negative impact on biodiversity, we are proceeding fol lowing activities.

Reduction of environmentally hazardous substances emitted from production sites and plants
Under TOYOBO Group Fundamental Policy on the Global Environment, we have established voluntary standards and reduction targets forchemical substances discharged into the atmosphere and water that are stricter than those required by law, and w e are working tot horoughly manage t hese substances and reduce their emissions.
For example, we utilize our in-house VOC treatment equipment and other environment conservation technologies to reduce the amount of
hazardous chemicals in wastewater and exhaust gas from our plants and plants. To prevent accidental spillage of hazardous chemical
substances, we have installed monitoring devices in t he manufacturing process and are wor king to improve the manufacturing process tominimize the use and discharge of these chemical substances.
Please see reduce impact on the environmen t section for targets and achievements for fiscal 2031.
• Chemical Subst ance Management-111-

Environment impact assessment (Eco-Review System} at development
Since 1998, we have been using the Eco-Review System to evaluate the impact of our products on environment from the viewpoint ofenvironment conservat ion. Under t his system, we evaluate our products/technolog ies from the viewpoints of "preventing climate change,""reducing chemical substances," "resource conservation," "waste reduction," "environment contributing," and "biodiversity" at every stage
from raw materials to disposal. Since t his system is implemented at each stage from R&D to commercialization, the themes that are
deemed necessary to be improved at the R&D stage will be improved by the time of the next Eco-Review. As a result, while developing
products and technologies, we are working to reduce the burden on environment and improve products that contribute to biodiversity
conservation and other.
• Eco-Conscious Products

Contributing through business processes and products
We are also contributing to reduce impact on the environment of our customers through the markets of waste fluids, drain, and exhaustgas treatment equipment, as well as water treatment membranes.

Forest conservation activities at "Toyobo Future Forest" in Wakayama prefecture
Forest has multifaceted functions such as conservation of biodiversity and the global
environment. We have worked on Forest Conservat ion Activities of "Toyobo Futu re Forest" in a
mountain forest in central Wa kayama prefecture. Since its inception in 2006, in cooperation
with the local Hidaka town and the forest association of Kichuu (or central Wakayama
prefecture), we have been working on tree planting and weeding, etc. In November 2021, we
supplementally planted broad leaf t rees such as w ild cherry, sawtooth oak, and maple.
Wild deers live in this area of the forest and sometimes eat the seedlings of the trees. For thecoexistence of deers and trees, t he area around the "Future Fo rest" is enclosed with nets
which use our material, IZANAS® to prevent animals from entering.
Putting covers preventing feeding damage by

Through forest conservation activities in Wakayama prefecture, we wil l contribute to issues
such as biodiversity and climate change.

deers on saplings (November 2021)

Participation in clean up activities to preserve the biodiversity of the Seto Inland Sea
The Seto Inland Sea is one of t he most important areas for biodiversity conservation. Our business sites and group compan ies (lwakuni
Production Center. Toyobo MC Takasago Plant, TOYO CLOTH CO., LTD., JAPAN EXLAN COMPANY, LIMITED, TOYOBO PHOTO CHEMICALS CO.,LTD.) are located in this surround ing area. These business sites, and com panies conduct cleanup activities at least once a year to pick up
litter along the coast and in rivers flowing into t he Seto In land Sea.

Cleanup activities at YUHO CO., LTD.

Cleanup activities at JAPAN EXLAN COMPANY, LIMITED

Cleanup activities at TOYOBO PHOTO CHEMICALS CO.,

LTD.

-112-

Engagement with governments, non-profit organizations and local community
At t he environmental seminar held every year as part of the group's environmental education, a study session was held in fiscal 2023
under the theme of "biodiversity conservation" with lecturers invited from the Ministry of the Environment (Office for Mainstreaming
Biodiversity) and an NPO (The Citizens Environmental Foundation).
A total of over 500 people from company-wide participated in each seminar, including on line participants, who deepened their knowledgeof biodiversity conservat ion by asking questions to the lecturers.
In June 2023, as part of biodiversity conservation act ivities of Toyobo Research Center, (Otsu City, Shiga Prefecture) we invited a professor
from Biodiversity Science Research Centre, Ryukoku University (Otsu City) to give a lecture on biodiversity conservation and its significance:
environment DNA analysis as an observat ion technology.
A total of about 200 participants studied cutting-edge science studies o n biodiversity conservation, with Toyobo Research Center as t heir
primary venue and company-wide on line.

Scenes of Environmental Seminars in FY2024

Collaboration with local community
Cooperative management of groundwater
Tsuruga Research and Production Center of our group participates in the "Tsuruga City Water Environment Improvement Roundtable",which consists of loca l government officials, academics. residents, companies, and NGOs that have come together for the purpose ofgroundwater management. The report provides information on measures to achieve the reduction targets prom ised to the local
government and cit izens, as well as t he results of activities and future plans.
The Toyobo group will continue to work with local communities to properly manage groundwater use in o rder to conserve biodiversity.

Lake Biwa day event: 100 sites eDNA survey
The Toyobo group has supported "Lake Biwa Challenge: 100 sites eDNA survey," a proj ect to research living organisms in Lake Biwa, Japan's
largest lake in Shiga Prefecture. The survey, conducted by Ryukoku University's Center for Biod iversity Science, is a sub-project of "Ryukoku
Lecture with Shiga Prefecture related to Lake Biwa Day," an open lecture of Ryukoku University.
"Lake Biwa Challenge: 100 sites eDNA survey," started in 2021, involves collecting water samples annually at 100 locations along the entire
lake by local citizens, organizations, and companies. The samples will be analyzed for environmental DNA• at the university's center, toobtain data essential for conserving biodiversity, such as the habitat distribution, and proliferation of invasive species.
The Research Center, a Toyobo resea rch hub also located in Shiga Prefecture, has participated in local environmenta l activities andlaunched its own campaigns to clean up t he lake with t he aim of conserving t he lake's biodiversity. As pa rt of its support for the latest
proj ect, Toyobo will regularly take its own water samples at a company site on the lakeside to obtain data over t ime in addition toparticipating in the annual lake water sampling. Toyobo will also consider conducting joint projects with the university center that use
technology to analyze environmen tal DNA.
* ONA expelled by living organisms, such as those originating in their body fluids and feces.
• Toyobo supports "Lake Biwa Challenge: 100 sites eDNA survey" to accelerate efforts for biodiversity conservation-113-

Realizing nature positive
30by30 has attracted attention as a global target for biod iversity, including an agreement reached in COP27 of 2022, with the goal ofprotecting at least 30% of its land and sea areas by 2030.
We have purchased forests since t he 1950s to ensure domestic self-sufficiency of chemical fiber raw materials. Since then, we have beenable to sell forests because of a change in the composition of chemical fiber business and other factors, and we are now holding only someforests for t he purpose of producing lumber.
In recent years, we have been reviewing ou r company-owned forests in response to rising concerns about environment issue. We believet hat properly managing forests contributes to the relaxation of climate change and the conservation of biodiversity.
As a control object ive of our company-owned forests, we will promote forestry activities while maintaining its function as a water source
conservation forest. We will also promote sustainable forest management with the aim of coexistence between people and nature byplacing emphasis on continuity with the abundant forests surrounding us. We will strive for activities that take into considerat ion limited
resources and biodiversity.
The amount of CO2 absorbed in the Company-owned forests currently owned is estimated to be approximately 6000 tons/year of 1,S00ha's
forest area absorbed in one yea r.

30by30 alliance
In November 2022, TOYOBO and Toyobo Real Estate Co., Ltd. joined 30by30 alliance forbiodiversity to promote activities aimed at halting and restoring biodiversity losses. (nature
positive).
In t his alliance, the Ministry of the Environment has begun to certify areas where biodiversity
conservation is being promoted through private sector initiatives, etc., as an initiative toestablish areas that contribute to the conservation other than protected areas (OECM: Other
Effective area-based Conservation Measures). Our company-owned forest in Aya town.
Miyazaki Prefect ure has been certified as a site for coexistence w ith nature.
• Toyobo joins 30by30 Alliance for Biodiversity

Conducting biological surveys
In fiscal 2023, we began a monitoring survey of company-owned forests located in Aya Town, Miyazaki Prefecture.
Through surveys, it was confirmed that rare organisms (e.g., domestic rare wild fauna and flora species, Ministry of the Environment Red
List 2020: endangered 1B species, and Miyazaki Prefectural Red List 2022: endangered I species) exist, and that deer and other foodhazards are caused by deer.
Regarding animal pollution, we have already implemented measu res such as insta lling a deer fence in the afforestation area, but this is thefirst t ime we have conducted a survey of the entire forest.
In t he future, we will continue monitoring surveys and consider new activities in collaboration with local communities and recovery fromanimal damage (nature positive).

Collaboration with local community
In June 2023, we concluded a comprehensive collaboration agreement with Aya town, Miyazaki Prefecture, where one of our group-owned
forests is located.
Aya town has one of the largest laurel forests in Japan, and has been registered as a UNESCO Eco Park by UNESCO (United Nations
Educational, Science and Cultural Organization) in 2012, receiving high praise worldwide for its efforts to create a community that coexists
wit h narure.
In t he future, we will work together to revitalize the Aya town area using our company-owned forests and to coexist with our susta inable
manufacturing and conservation of the natural environment.
• Toyobo signs a comprehensive partnership agreement with the town of Aya, Miyazaki Prefecture-114-

Social
Employee well-being and human rights in the supply chain

We are working to create workplaces ("People Fast") where employees feel safe secure and comfortable, and pride and rewarded, toensure the safety and health of employees (health and prod uctivity management), to enhance reskilling and recurrent educat ion, and torespect human rights throughout the supply chain.

Respect for Human Rights

Safety, Disaster Prevention➔

Quality➔

Supply Chain Management

Human Resource Management➔

Diversity & Inclusion➔

Social Contribution➔

Healt h and Productivity
Management

➔

-115-

Zero industrial accidents in workplaces

Respect for human rights across the ent ire supply chain

Employee engagement score:over 70%
Expanding and improving educational and training systems for employees reskilling and recurrent
education, etc.

ESG Perform ance Data

➔

-116-

Respect for Human Rights
Materiality
Related ESG :S,

Human rights in the supply chain-.J,, Management approach

,
1111
·
'
.
1111
1

I

1

I

e

-.J,, Init iatives

Management approach

Policy and approach
Respecting human rights is essential for Toyobo group to f ulfi ll its responsibilities as a member of society and continue as a trusted
company. In this regard. respecting the rights of employees and trading part ners. who are important stakeholders for t he group. is crucial
to enabling them to demonstrate their abi lities. and to w ork w it h vigor and energy. In recog nition of this. we have included "4. Respect for
Human Rights" and "6. Active Employee Participation" within the 10 principles of t he Toyobo Group Charter of Corporat e Behavior. We also
support and respect other international agreements relating to human rights, such as the Internat ional Bill of Hu man Rights, theInternationa l Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work, the Children's Rig hts and Business
Principles, and the UN Guiding Principles on Business and Human Rights.

< TOYOBO Group Human Rights Policy>
Over a history of almost 140 years, Toyobo g roup has developed business that addresses the needs and challenges of the times
through technology. based on the spirit ofJun-Ri-Soku-Yu (adhering to reason leads to prosperity). which is the cornerstone of thePWs corporate philosophy system.
At present, under our vision of "we will continue to create the solutions needed by people and the earth wit h materials andscience," we are working to evolve into a company that can "help society flourish and our company grow" by actively contributing
to solving social issues and continuously creating value for society.
We believe that respecting human rights is crucial to achieving t he group's vision. and in the TOYOBO Group Charter of Corporate
Behavior ("Charter") and the TOYO BO Group Employee Conduct Standards ("Code") we have stated t hat we respect human rights
and maximize the value that can be generated from diversity under the slogan "respect for human rights and diversity."
The TOYOBO Group Human Rights Policy ("this policy") outlines our policy for handling human rig hts based on the Charter andCode and it applies to all of t he g roup's directors. corporate auditors. executive officers. and employees.
Also. as a good corporate cit izen. the group recognizes t he importance of respecting human rights and w ill strive to respect thebasic human rights of all stakeholders. including officers and employees.

-117-1. Compliance with laws, regulations, and norms concerning respect for human rights
Toyobo group supports and respects international norms concerning human rights including the International Bill of Human
Rights, which stipulates the basic human rights that should be enj oyed by everyone in t he world, and the !LO Declaration on
Fundamental Principles and Rights at Work by the Internationa l Labour Organization (!LO) which st ipulates the fundamental
rights regard ing labor (freedom of associat ion and collective bargaining rights, the elimination of forced or compulsory labor.
the abolit ion of child labor, and the elimination of discrim ination in respect of employment and occupation).
Also, this policy was formulated in accordance w it h the UN's Guiding Principles o n Business and Huma n Rights.
The group complies with the laws and regulations in every country and region in which it does business. Furthermore, in cases
w here internationally recognized human rights and t he laws and regulations of a count ry or region are in conflict. we will
pursue a course of action that has maximum respect for international human rights principles.

2. Duty to respect human rights in all business activities
Toyobo group will not infringe on the human rights of another individual, w ill minim ize t he adverse effects on human rightsthat m ight occur t hrough its business activities, and will actively expand the practice of respect for human rig hts in its businessactivities.

3. Practicing human rights due diligence
Toyobo group recognizes the importance of practicing human rights due diligence to minimize any adverse effects of o urbusiness activities on human rig hts. Based on t his recognit ion, we will build a human rights due d iligence framework.
Additionally, w hile this framework has yet to be desig ned, it wi ll include identifying, preventing, and reducing actual andpotential adverse effects on human rights in our business activities and value chains, integrating internal processes formeasures related to the above, and publicizing our efforts.

4. Correction and relief
In cases where it is revealed that Toyobo group has had an adverse effect on human rights or f urt hered such an adverse effect ,it will take appropriate steps to correct this and provide relief. Also, even in cases where the group has not direct ly furthered anadverse effect on human righ ts, if a business partner of the group o r other related party has a direct connection to an adverse
effect on human rights t hrough their business, we will st rive to cooperate w ith stakeholders to make im provements, andensure that human rights are respected and not infringed upon.

5. Cooperation and dialogue with stakeholders
Toyobo group promotes respect for human rights through actions stipulat ed in its Charter. Code, and other policies andguidelines. Furthermore, we w ill respond to any actualized or potential adverse effects on human rights t hrough dialogue andcooperation with the relevan t stakeholders.

6. Education for officers and employees
Toyobo group will reflect this policy in the proced ures required to ensu re it is applied in all business act ivities and will provide
appropriate education and training for officers and employees to ensure implementation based on a correct understanding of
this policy.

7. I nformation disclosure
Toyobo group will report on various initiatives concerning respect for hu man rights based on this policy in a timely manner
through its website and various reports.

8. Selection of priority human rights issues
As changes in society and other sit uations can change the specific human rights issues t hat should be add ressed, Toyobo
group will revise its priority issues through d ialogue and cooperation with stakeholders and external experts.
Seiji Narahara
Representative Director, President and CEO, Co•COO

TOYO BO CO., LTD.
October 26, 2020

Related Policies• TOYOBO Group Charter of Corporate Behavior: 4. Respect for human rights, 6. Active employee participation-118-

Structure
The persons in charge of the group's employees are assigned to t he Human Resources Departm ent, and those in cha rge of the supply
chain are assigned to t he Procurement and Log istics Department, with the aim of emphasizing respect for human r ights in Toyobo g roupin a proactive, systematic manner. We are deepening our understand ing of international human rights related issues that companies need
to be aware of, and preparing for init iatives on human rights due diligence.
The Managing Executive Officer who is the Controlling supervisor of the Corporate Sustainability Division, Procurement and Logistics
Department has overall responsibility for matters relating to human rights.

Targets and KPis
<Targets>- Toyobo group will carry out initiatives to ensure respect for basic human rights and diversity th roughout t he ent ire group, including
providing t ra ining to foster such respect among employees.
- Through these initiatives, we will aim to be a fair company that is trusted by society.

< KPis and results>
Initiatives

KPI• Avoid human rights violations• Eliminate forced and child labor• Respond to human rights laws and regulations(Modern Slavery Act, etc.)• Ensure equality in recruitment and treatment of
employees

1. Implementation
status of humanrights education andtraining

I

Target (FY2026)

I

Once a year for 20% of
non-consolidated
employees.

Result (FY2023)

48.0%

l

* Subj ect com pa ny: TOYOBO CO., LT D., TOYOBO STC CO., LTD., and TOYOBO INFORM ATION SYSTEM CREATE CO., LTD.

Initiatives

Respect for human rights from a global perspective
In the countries and reg ions, w here Toyobo group has business sites, there are various human rights related issues t hat refl ect the specificpolit ical, economic and social circumstances. Such issues may include discrimination in regard to employment and work roles, unfair labor
practices, forced labor and child labor, infringement of t he human rights of foreign workers, and involvement in corruption. For each
Toyobo group business site, it is vitally important to give due consideration to these human rights related issues.
In order to identify the issues that Toyobo group needs to take into consideration, we are participat ing in the relevant sub committes of
Global Compact Network Japan, alongside ot her participant companies. We are aim ing to deepen our understanding of human rights bygathering information on international human rig hts issues and other issues t hat corporations need to pay attention to. Going forward, we
w ill continue to identify human rights related issues that we need to consider at each of Toyobo group's business sites.

-119-

ThemeDetails of initiatives

Prevention of child labor

We prohibit the employment of persons under the age of 15 years, or the age for completing
compulsory education, or the minimum age for employment in the country or region, whichever isthe highest in our business activities.

Prevention of forced labor

Our recruitment of talent is always premised on applications from persons responding to calls forapplicants. We notify successfu l applicants after one or more recruitment screenings. We present
information on working conditions when an applicant joins the company, and begin employment
with the consent of the applicant.

Support for living wages

We pay wages in compliance with laws and ord inances that stipulate minimum wages in the
countries and regions in which we operate.

Labor and human rights survey
At our domest ic (non-consolidated) business sites in FY2023, we conducted a Labor and Human Rights survey addressing matters includingchild labor, employment equality, and occu pational safety and health. Through t he survey, we were able to confirm the absence of any
violations of human right s laws and ordinances.
For technical intern trainees from overseas, we surveyed implementat ion and management of technical internships and compliance withlabor-related laws and ordinances at relevant business sites. Through the survey, we confirmed implementat ion and compliance in allcases.

Enhancing diversity and equal opportunities
Toyobo group believes that personal and organizational growth is achieved t hrough a process of mutual respect among our employees,
w ith their differing work styles, careers, gender, nationality, race, and beliefs, and through cooperation to achieve our shared objectives.
We respect different opinions and a wide range of values, and cooperate t o achieve ambitious goals together.
• Diversity & Inclusion

Respecting workers' rights
Respecting freedom of association and collective bargaining rights
Toyobo group respects freedom of association and collective bargaining rights.
We have set sha red targets for labor and management to realize TOYOBO PVVs and we strive to build constructive and stable relationships
between management and workers. Labor union activity at Toyobo is based on the union shop system,* and all employees that are eligible
to join a labor union under the labor-management agreement reached between labor and management join the labor union. Our u nions
represent all t heir members and the results of negotiations between management and labor are applied to all members w ithout
conditions. Additionally, based on an agreement between management and labor, employees at management level or above are noteligible to join, and 85.1% of all employees are union members (as of FY2023).
* The union shop system is a system whereby all workers employed at a particular w orkplace are required to join the labor union for that workplace.

-120-

Dialogue between management and labor
We arrange repeated opportunities for frank discussion between labor and management aimed at realizing the TOYOBO PWs, and we
promote the building of the foundations needed for every single employee to be able to work with energy and enthusiasm.
Meetings of the Central Management Council, attended by representatives of t he labor union headquarters and of company management,
are held once a year, and meetings of the Branch Management Councils are held once a year at each of the nine branches in Japan.
The labor union is represented at meetings of the Cent ral Management Council by staff from the union headquarters, and is represented
at Branch Management Council meetings by staff from the relevant union branch, while the company is represented by the President atmeetings of the Central Management Council, and by the business site manager or plant manager at Branch Management Council
meetings. Topics addressed during discussions between labor and management include t he operational stat us of t he company, changes in
the amount of pay rises, and the working environment.

Reducing excessive working hours
We are engaged in workstyle reform, so t hat our employees can work with renewed efficiency and ach ieve a good balance between workand personal life. We aim to ensure that our employees will take at least one day off every seven days in the future.
• Work-life balance

Handling of non-compliance wit h labor standards
Scope

Unit

FY2019FY2020

FY2021

FY2022

FY2023Major violations of laws, regulations, or rules

Incidents

Global

0

0

0

0

0

Serious non-compliance with labor standards

Incidents

Total in
Japan

0

0

0

0

0

Number of incidents of serious human rights violations

Incidents

Total in
Japan

0

0

0

0

0

Compliance-related incidents that resulted in a criminal
complaint

Incidents

Total in
Japan

0

0

0

0

0

Establishment of complaint handling and internal reporting systems
The Complaint Handling Committee and the Compliance Consultation Cent ers w ithin the internal reporting system provide consultations
and handle reports regarding human rights. At each business site, members representing bot h t he company and labor are elected to t heComplaint Handling Committee that handles requests for consultatio n from employees concerning issues related to the Equal Employment
Opportunity Law.
In order to ensure that employees can use these systems without concern, t he name and ot her details of employees making reports orreceiving consultations are kept private and we guarantee that these individuals w ill not be negatively affect ed by their act ion. We also
strive to detect and solve human rights issues at an early stage through compliance surveys.
• Compliance consultation desks• Initiatives to prevent harassment-121-

Internal education initiatives
Internal communication of our Code of Conduct and Compliance Manual
Toyobo group has created English and Chinese versions of t he TOYOBO Group Charter of Corpo rate Behavior in order t o implement
internal education t hat enables employees around the world to share the same vision.
We use our TOYOBO Group Compliance Ma nual t o fam iliarize employees w ith rules and case studies concerning respect for human rights,
prohibit ion of discriminat ion, prohibition of child labor and forced labor, and prot ection of personal information.
We also familiarize and educate hiring recruiters on human rights-related cautions to be observed in interviews.

Human rights-related training
We are making efforts to raise awareness of human rights among our employees throug h tra ining that includes the communication andunderstanding of our Human Rights Policy. In FY2020, we conducted education and awareness-raising for group company em ployees
concerning t he human rights of foreign workers, and affirmed o ur intent to request that business partners take action as well. In fiscal
2023, as in t he previous fiscal year, in each business site, we implemented t raining for new hires, grade-specific education, lectures, andt raining sessions for personnel appointed as promoters of human rights, w ith a total of 515 personnel participat ing in such activities.
In FY2024, the following seminars on t he topic of "business and human rights " were held for officers and em ployees.

Business and human rights study session in FY2024
MonthsInstructor

Participant

Oct. 2023

Ms. Mikiko Morimoto, Representative Director. karna ltd.

Persons in charge of labor affairs at thebusiness sites

Dec. 2023

Ms. Emi Sugawara, Professor, Osaka University of Economics and Law

Officers

Scheduled Feb.
2024

Persons in charge of the human resources and labor affairs, procurement
and log istics, and sustainability

Officers and employees

Study session for perso ns in charge of labor affairs at

Study session for officers in Dec. 2023

the b usiness sites in Oct. 2023

In October 2023, we began dist ributing 14 videos on "business and human rights" t o all officers and employees includ ing those of threemajor group companies, making them available to view on demand .
We have added "business and human right s" to t he theme of our compliance study sessions for managers since FY2024, and have held atotal of 14 sessions. We plan t o hold these sessions at 12 group companies, which hold them by t he end of the fiscal year.

Participation in the Global Compact Network Japan Subcommittee
In order to ident ify the issues t hat Toyobo group needs to take into consideration from among t he human rights related issues existing ineach region, we are participating in the relevant sub committes of Globa l Compact Network Japan, alongside human rights NGOs andother part icipant companies. We are aim ing to deepen our understanding of human rights by gathering information on international
human rights issues and ot her issues that corporations need to pay attention to and apply it to our awareness-raising activities.

-122-Respecting human rights in the supply chain
Revision and communication of the CSR Procurement Guidelines
To achieve the SDGs t hroughout our supply chain, in September 2022 we conducted a review with st rengthened consideration of respectfor human rights and the environmen t, and revised our CSR Procurement Guidelines.
We clearly state in the guidelines that we take matters involving human rights (including t he prohibit ion of child labor, forced labor, andd iscrimination against people of any attributes, including LGBTQ) into account in ou r selection of business partners, and we commun icate
these guidelines to them.

Human rights risk assessment based on the CSR procurement survey
Our company also conducts a CSR procurement survey based on our CSR Procurement Guidelines, directed at our major business partners.
From the human rights items in the survey, we evaluate partners' initiatives aimed at human rights. Using t he results of the questionnaire,
we conduct evaluations that take into consideration count ry and reg ion, industry, personnel composit ion, and other factors, and perfor m
appropriate follow-up through interviews and other means to address business partners t hat are judged to be at high risk.

Dealing with new and existing business partners
We ask new business partners to cooperate wit h our questionnaires when commencing new dealings with these, and periodica lly make t hesame request to existing business partners.
• Supply Chain Management• CSR Procurement Guidelines

Engagement with stakeholders
Engagement with local communities
To protect the human rights of stakeholders in local areas, in cooperation with government bodies we engage wit h issues t hat affecthuman rights in communities through information exchanges wit h neig hbo ring residents, community associat ions, cooperat ives, andother parties, as well as steadfast public relations activities. The resu lts of t his engagement are of aid in measu res to com bat noise, odors,
wastewater, and other issues.
As an example, our Tsuruga Research and Production Center conducts information exchanges wit h local com munity associations andcooperatives once a year. We also provide neighboring areas w it h advance notice when performing periodic inspections.

Engagement with overseas technical intern trainees
In our engagement with overseas technical intern t rainees, t he support we provide at relevant business sites includes the p reparation ofmaterials in t rainees' native languages, support for official proced ures, and accompaniment on hospital visits. We have also set up venues
for listening to trainees' everyday t roubles related to d ifferences in lifestyles, addressing t hese as needed.

Participation in initiatives
We participate in the labor subcommittee meetings of the ind ustry associations, Spinners' Association of Japan and Chemical Fibers
Association of Japan.The subcommittee discusses work-related issues (working hou rs, leave systems, personnel systems, retirement
benefits, etc.), includ ing labor standards, and labor issues (e.g ., measures against COVID-19, teleworking and other work styles).
In September 2023, we partcipated in the declaration for Responsible Bbusiness Conduct for t he Text ile and Clothing industry of Japa n by
the Japan Textile Federation. This declaration indicates t hat the company understands the purpose of the Gu ideli ne for Responsible
Business Conduct for the Text ile and Clothing Indust ry of Japan released by the Federation in 2022, and agrees to promote respect forhuman rights in accordance wit h the Guidelines (As of November 2023, 731 companies have declared).
In November 2023, the Chemical Fibers Associat ion of Japan established the "Human Rights OD Response Comm ittee" consisting of theregular members of the association, in which we are also participat ing. The committee members share information and exchange opinions
on human rights issues in t he supply chain, including trends of government policy and the Japan Textile Federation, as well as t he stat us of
responses at each company, and hold seminars and other events.

-123-Safety, Disaster Prevention
Materiality

Safety and industrial accident prevention-.J,, Management approach-.J,, Initiatives....11 ■·_.

II■ ' "'

Related ESG : E S G

...,

•

u:,:

:: :: ::-.J,, Fire prevention measures (FY2023)

Management approach

Policy and approach
Toyobo group recognizes that ensuring health and safety is a precondition for successful corporate act ivities. We have formulated t he
Toyobo Group Basic Policy on Health & Safety, w hich applies not o nly to our employees but also to the personnel of partner compa nies
(contractors), and we are striving to build a safe workplace environment. Our safety declaration for fiscal 2023 is "We will thoroughly
im plement 'putting safety first,' and we w ill emphasize labor safety, environmental safety, product safety, and equipment safety." Under
our slogan of "Protect yourself, protect your colleagues, and speak up when noticing something,"
Toyobo group designates September as "Disaster Preparedness Month" and September 6 as "Toyobo Grou p Disaster Preparedness Day,"and conducts awareness-raising activ ities related to preparedness for fires and other d isasters.
We do so out of a powerful determination to never forget t he fatal fires that occurred at the Tsuruga Research and Production Center (No.
2 Plant) on September 6, 2018 and the Inuyama Plant on September 27, 2020, and to never allow the lessons learned from these to fadeaway.
We are working to build workplaces and personnel t hat prevent fires, and to build disaster-resistant production sites t hat w ill let us regain
the t rust of the society.

< TOYOBO Group Basic Policy on Health & Safety>
1. Health & safety principle
Based on the concept that ensuring safety and sanitation is a major premise for business act ivit ies, we w ill actively work toensure the safety of employees, enhance t he cleanliness of working environments, and improve health under t he spirit ofrespect between people w ith the aim of creating cheerful, happy workplaces and a prosperous society.

2. Policy for health & safety activities(1) Ensuring workplace safety
Toyobo group works to enhance the safety and security of environments at its workplaces with the aim of achieving zeroaccidents.
(2) Enhancing environmental sanitation and improving health
Toyobo group is enhancing the sanitation of environments at its workplaces and working to improve the health of its
employees wit h the aim of realizing happy workplaces.
(3) Compliance with social norms
Toyobo group complies with social rules and works to realize a prosperous society and communit ies with which thecompany can coexist.

-124-

Structure
In order to achieve steady progress in initiatives relat ing to safety and d isaster prevention. w hich are the most important management
issues, we have established the Safety and Disaster Management Division, which is a body reporting directly to the President, w it h a hig hdegree of decision-making aut hority.
The Head of the Safety and Disaster Management Division (S&DM). who is Director and Managing Executive Officer, hosts t he Safety andDisaster Management Conference. which consists of experts in varied fi elds as its members. In this conference. t he members eva luate t heeffectiveness of safety and disaster management activities and draft and formulate company-wide policies, which are finally determined by
the Sustainability Committee. The conference reports on progress to t he Board of Directors as appropriate.
Under t he SD&M. the Safety and Disaster Management Department plans and advances safety and disaster management activit ies. It also
hosts the Safety and Disaster Management Promotion Conference. made up of representatives from each depart ment. This conference
manages discussions, decision-making, and progress related to specific matters based on policy. It also organizes teams of members and achairperson to v isit the company's business sites, factories, and group companies to conduct safety and environmental assessments andto inspect local activities. To address fire and explosion risks in particular. we perform period ic inspections of on-site management throught hird-party experts.
Furthermore, each production center, plant , and research center has its ow n Health and Safety Committee, w hich is composed of employee
representatives, managers and experts, and which investigates and deli berates on matters relating to employee safety, disaster prevention
and health. includ ing risk assessment status. at each w orkplace.
Labor union representatives also participate in the discussions of t he Safety and Disaster Management Promotion Conference and the
Health and Safety Committee.

Toyobo group structure for safety, disaster prevention, and the environment
Po~cy Formulation . , •2

Activity Planning I
Implementation/
Management
GeneralManager Envirorvnental
W.anagement Departmen t

Health and

SafetySafetyand01sane1 Management

Promot1onConference

Committee
Safety and Oiuster Management Department /Group compJnl.is

Environmental Man.agement Department

1 Deliberates and decides policy on safety and disaster prevent ion
2 Deliberates and decides policy on the global environment
3 Deli berates and decides specific m atters, and manages progress
4 Supports activities, provides information, and conducts interdepart mental coordination

Targets and KPis
<Targets>- We w il l strive to prevent d isasters and accidents by clarifying and t horoughly complying w it h basic safety throug hout the entire Toyobo
group.

-125-

< KPls and results>
Initiatives• Build a culture of safety• Prevent workplace accidents (make human-operated
equipment safer, promote security and disaster prevention)

Targets

KPls

Results(2022)

1. Number of major accidents*o accidents
per yearO accidents

2. Frequency rate of workplace
accidents resulting in lost workdays

0.25 or less

0.55

3. Number of fires or explosions

0 accidents
per yearO accidents

4. Number of spill accidents

0 accidents
per yearo accidents* Maj or accidents: Defined according to internal standards based on the definition stipulated by the M inistry of Health, Labou r and Welfare

Initiatives

Safety initiatives
Under t he TOYOBO Group Basic Policy on Healt h & Safety, we are implementing the following occupationa l safety init iatives.

Making people, equipment, and processes safer
We identify sources of serious hazards and enact measures to prevent major accidents. Specifically, we use risk assessments and work
research to assess on-site risks, then make improvements to equipment and work processes. We are also making efforts to prevent
accidents by incorporating those improvements in procedure manuals and by educat ing employees. When an accident occurs at othercompanies or workplaces, we review the incident as a case study to prevent the occurrence of similar accidents, while checking for andaddressing similar risks in our own workplaces.
We issue "Safety and Disaster Prevention News." Using the lessons from accidents and disasters that have actually occurred in the past , ithelps to spread awareness by providing easy-to-understand explanations, supported by illustrat ions, regard ing key points to note to
conduct operations safely, and how to respond in t he event of an accident. These are becoming widely used as tools for dialogue atworkplace safety meetings, and back issues of t he documents are available on our company intra net for viewing at any t ime.
In production centers where t he foreign technical training system (overseas t rainees) is in operation, we have assigned instructo rs toprovide Japanese language education and support for daily life to ensure the safety and livelihood (comm unication) of the t rainees.
As an example, for trainees to work safely, we devise ways to make it easier for them to understand, such as translat ing the standard
operating procedure (SOP) and using hiragana to w rite the reading kana.

Promotion of disaster prevention
In order to learn from the fire that occurred at our plants and empower employees to protect their own workplaces in the event of a fi re,
we revised the content of our fire drills to make them more practical and enabled participation in drills by all employees, including those ofcooperating companies, at least once a year. For g roup companies inside and outside of our business sites, we advance these act ivities
under our group policy and are grad ually expandi ng the number of targeted com panies.
Together with people at workplaces, we promote steady actions to strengthen d isaster prevention, wit h the aim of creat ing worksites thatprevent fires from occu rring and t hat, in the event a fire does occur, prevent personal harm and minimize other damage. Toward t hat end,
we have established g uidelines for fire prevention equipment and standards for disaster prevent ion management to reduce the risk offires. To address fire and explosion risks, we perform period ic inspections of on-site management t hrough third-party experts.
With regard to natural disasters, we will continue to implement disaster mitigation measures by reinforcing build ings against earthquakes,
improving office and plant infrastructure, and conducting emergency response drills.

-126-

3S activities and training
We undertake 35 (sort, sweep, and standardize) activit ies, which are the foundat ion for safety and disaster prevention activities, on acompany-wide basis. We have put in place a safety and disaster prevention training system that is shared throughout the company, and we
provide the safety and disaster prevention training that is needed at each level.
In addition, w ith the aim of realizing effective safety and d isaster prevention knowledge t raining, we have installed Disaster Prevent ion
Training Workshops- training spaces in which panel exhibit ion plays a central role- in all production centers, and we have established
Disaster Prevention Experience Training Facilities at key sites.

Establishment of a disaster prevention training center at the Iwakuni Production CenterWith the aim of looking back on and learning from accidents that have occurred in the past, and prevent ing the lessons frombeing forgotten, in August 202 1 a new Disaster Prevention Training Center was opened at the Iwakuni Production Center, where
personnel can experience the terrifying nature of accidents and make use of simulation equipment.
This is a train ing center, where, for example, besides being able to experience the awfulness of fi res and explosions, such as d ust
explosions and fires caused by static electricity, it is also possible to experience the horror of accidents that involve being pulled
into machinery. The center also shares case studies of accident s t hat have occurred in Toyobo group in the past.
To provide additional opportunities for personnel to enhance their knowledge of and awareness of fi res and smoke, and to pay
more attention to safety and d isaster prevention, we have started internal training and are promoting internal education. Training
at this center is offered on an application basis, and is also open to employees of group companies.

Frequency rate of lost workday injuries (Japan)•

Toyobo group
1.31
1.20

1.20

1.21

1.2

0.9

0.6

0.3
0.31

0

2018

2019

2020

2021

2022

(Year)

Toyobo group is striving to achieve zero accidents in accordance with the TOYOBO Group Basic Policy on Health & Safety. We place
importance on t he frequency ra te of workplace accidents resulting in lost workdays* 1 . This was 0.55 in 2022, includ ing affiliated businesses
at the same business site.
We have set a goal of zero major incidents* 2 as a KPI, w e achieved zero major accidents.
* 1: Frequency rate of workplace accidents resulting in lost workdays refers to the rate of accidents resulting in lost workday injuries per one million hours w orked*2: Major accidents: Defined according to internal standards based on the definition stipulated by the M inistry of Healt h, Labour and Welfare• Health and Productivity Management Efforts-127-

Acquisition of occupational safety and health management system certification(1SO45001)
We are working toward ISO4S001 certification of conformance w ith requirements for an occupational safety and health management
system, to reduce risks in our working environments. As of the end of March 2023, we have obtained certification at two sites, t he Iwakuni
Production Center and the Utsunomiya Plant. We plan to continue obtaining cert ificat ions at other production centers and pla nts.

Fire prevention measures (FY2023)
In the wake of the September 2018 fire accident at the Tsuruga Research and Product ion Center (No. 2Plant) and the Septem ber 2020 fire
accident at Inuyama Plant, Toyobo group is taking two ma in approaches to improving safety prevent ion. We are fostering a culture ofsafety by clearly establishing safety as the hig hest priority and revising our education structure. We are also fortifying our safety
infrastructure by formulating a plan to enhance our safety and disaster prevent ion equipment and management and by developing
specific PDCA cycles.

Fostering a culture of safety
We had always stated that worksite "safety is the highest priority," but we now recog nized t hat the problem was t hat management
involvement was insufficient. To foster a deeply imbedded culture of safety, in April 2022 we announced the New Safety Declarat ion. The
Safety Declaration clarifi es for all employee our management stance of placing t he hig hest priority on safety related to occu pationa l laborand condit ions, our products, and our equipment. Measu res to change our awareness of safety issues include reva mping the posit ionbased safety education system and introducing safety workshops and educat ion programs for management level employees led byexternal organizat ions. A safety workshop for management-level employees was held in December 2021 , with all of the participatingcompany executives having t he opportunity to study safety conditions at various companies. We held safety workshops for newly
appointed officers and group company presidents in FY2023, and plan to continue doing so.
In November 2022, we conducted a survey of safety awareness among top management, Toyobo employees, and em ployees ofcooperating companies involved in production to confirm the level of safety awareness in their respective organizat ions. The survey
targeted 7,525 persons, with a response rate of 93%. The strengths and weaknesses of every element of organizational struct ure, business
operat ions, and leadership with respect to safety were t urned into visual data. Drawing on t he results of the survey, we will advanceact ivities to overcome weaknesses (issues) in o rganizations and t hereby raise the level of t he o rganizations' safety culture.

Fortifying for safety infrastructure
We are also creating a foundation for implementing the PDCA cycle in safety and disaster prevention. In FY2021, we established t he Safety
and Disaster Management Division, which is under the direct supervision of t he President and w hich encompasses the Security andDisaster Department and the Occupat iona l Safety Department. To achieve more efficient operation, in April 2022 we reorganized t he
Division into the Safety and Disaster Management Division, w ith t he Safety and Disaster Management Department and Environmental
Management Department placed under it.
In FY2022, we launched the Disaster Management Project under w hich we are advancing t he creation of mechanisms for disasterprevention management. Specifically, we drew on t he knowledge of experts to formu late disaster prevention management standards forfire prevention t hat will apply across the group. In formulating the standards, we have taken into consideration t he aligning of disasterprevention management standards with actual conditions so t hat self-inspections can be conducted on-site. We have also built a system bywhich specialists perform periodic checks of operational status at workplaces.

-128-To address postponement of measures and funding necessary for safety and disaster prevention against an overemphasis on short-termbudgets in business operations, in FY2022 we formu lated the Medium-Term Management Plan for Safety and Disaster Prevent ion. Working
w ith external specialists. we created detailed risk maps for 29 sites including group companies and evaluated the natural disaster risks ateach. We are incorporating this information in future workplace concepts w hile advancing disaster count ermeasures. We furt her
cond ucted reviews of disaster prevention functions at all business sites and ident ified those t hat require containment measures to mitigate
the risk of fires spreading. As a result, we intend to invest an additional ¥18.6 billion across t he group, with measures scheduled forcompletion in FY2026.
We are also moving ahead wit h the installation of d isaster prevention training spaces at the group's primary production sites in Japan. At
the disaster prevention training space created in the Iwakuni Production Center in Aug ust 2021 , we have begun training aimed at raisingawareness of d isaster prevention and safety, t hrough sim ulated experiences and reviews of past accidents. We also plan t o set up ad isaster prevention and safety t raining center in the Inuyama Plant in September 2023. We w il l continue advancing t he establishment andactive use of these training centers.

Key issues in FY2024
In FY2024, we w ill advance initiatives w ith t he following set as key issues:• Deployment of safety and disaster prevention activities with participation by all employees• Enhancement of hierarchy-specific t raining• Reduction of fire and explosion risks

Steps to enhance our culture of safety
FY2022

FY2023

Mostly dependent stagel

Fostering a culture

Top management commitment statementof safety(employee behavior(Declaration of Action, on-site dialogues)

FY2024
Increasing independent stage 1

An expression of management commitment and action, and a demonstration of tangible leadershipand awarene ss)

Reestablish shared

Workshops for specific position levels (all levels 4 broaden to group companies and overseas sites)

value s andcommunications
352 activities (production innovation, small group)
Continuously improve ability to identify on-site risks, develop human resources capable of noticing and rectifying abnormalities* 1: This expression is a quote from the dss+ Bradley curve of the stages of safety culture development* 2: 3S:So rt, straighten, sweep-129-

FY2025

Quality
Materiality
Related ESG : S G

Quality-.J,, Management approach-.J,, Initiatives-.J,, Response to the quality-related misconduct incidents

Management approach

Policy and approach
Toyobo group is striving to ensure customer satisfact ion and win customers' t rust, not only t hrough the safety of our products andservices, demonstrating concern for the environment, and maintaining compliance wit h relevant laws and regulat ions, but also throughhigh quality standards. In order to achieve this, we have formulated the TOYOBO Group Basic Policy o n Quality Assurance and the TOYO BO
Group Basic Policy on Product Safety. To safeguard the q uality and safety of the products and services that w e provide, we have established
an appropriate management system, we perform quality inspections using suitable procedures, and we also strive to ensu re t hat data isproperly handled.

< TOYOBO Group Basic Policy on Quality Assurance>
1. Quality assurance principle
We w il l gain the trust and ensure the satisfaction of consumers and customers by always taking our customer's standpoint andensuring each ind ividual employee prioritizes qua lity as we develop and su pply products and services that are safe,
environmentally friendly, take into account the protection of information, and benefi t society.

2. Policy for quality assurance activities(1) Toyobo group anticipates the changing needs of customers and society to realize manufacturing that offers quality andsafety that enables us to share our joy w ith customers(2) Toyobo group complies w ith relevant laws, regulations, and standards concerning products and we voluntarily set our own
standards and conform to these.
(3) Toyobo Qua lity practices quality assurance throughout a product's lifecycle and throughout our supply chain-130-

< TOYOBO Group Basic Policy on Product Safety>
1. Safe product principle
We w il l make an even greater contribution to society by supplying even safer products using technolog ies that are considerateof people and t he environment with the aim of creating a prosperous society for the 21st century.

2. Policy for product safety activities(1) Toyobo group provides highly safe and reliable products and services that meet the changing needs and expectations ofsociety, customers, and consumers.
(2) In order to ensure product safety, Toyobo group nat urally complies with all relevant laws, regu lations, and st andards. We
also voluntari ly set safety standards that are higher than required and conform to t hese.
(3) Toyobo group plans safety that naturally takes into account the futu re application of a product and a deg ree of m istaken
use that can be rationally pred icted.
(4) Toyobo group plans the safety of a product throug hout its ent ire lifecycle, from development, design, manufactu ring, sale,and usage through to disposal.
(5) Toyobo group works to enhance the awareness of product safety of all its employees and participates in information
provision, educat ion, and awareness raising activit ies for stakeholders.

Structure
Our group has established a Qua lity Assurance Division Conference to oversee product liability (PL) and quality assu rance (QA). In thisconference, executives overseeing quality, the Quality Assurance Department General Manager in charge of business divisions, andmembers of the Quality Assurance Management Department meet every month. We also plan to convene the PL/QA Promotion
Committee, composed of members at the busi ness d ivision General Manager leve l, six times a yea r. and did so in FY2023.
We have established t he Quality Assurance Division as one of the measures to prevent recurrence of inappropriate conduct. Under thed ivision, we have placed the Quality Assurance Management Department, and also the Quality Assurance Departments which are in
charge of the division. By establishing the independence of the qua lity assu rance related departments, a function which was prev iously
im plemented in each business division, we have strengthened its control over t he business d ivisions. In addition, the Quality AssuranceManagement Department has been given t he authority to guide and suspend the development, production, and sales of t he company andgroup companies regard ing product safety (PS) and QA ofToyobo group, and we are working to construct an appropriate quality
management system and strengthen governance.

QA structure (As of April 2023)
Precident

Quality Assu rance Division
Quality Assurance Management Department
Films Quality Assurance Department
Functional Textiles and Trading Quality Assurance Department
Environmental and Functional Materials Quality Assurance Department
Life Science Quality Assurance Department

Targets and KPis
<Targets>- We w ill increase customer satisfaction by practicing q uality management throug hout our entire supply chain, including upstream areas,and ensuring quality t hat ca n be trusted.

-131-

< KPis and results>
Initiatives

KPis• Realize stable supply, contribute to solutions forcustomer issues, fulfill customer needs• Ensure product safety and quality

Targets

Results(FY2023)

1. No. of incidents related to products*

0 incidents per
year

0 incidents

2. Implemented status of products safety andquality assurance training

100%

100%

* Incidents related to prod ucts: Defined according to interna l standards based on t he defintion stipulated by the Ministry of Economy, Trade and Industry

Initiatives

QA activities
Employees have shared access to t he Qua lity Assurance Manual, w hich describes t he basic approach and code of conduct for all employees
when implementing Toyobo g roup's development. product ion and sales activit ies, and use it as the basic philosophy for Toyobo groupmanufacturing .
We make use of our Quality Assurance Manual globally, t ranslated into the local languages of countries w here we have sites. We also holdstudy sessions using the digest version to deepen understanding of manufact uring in our group.
We have furt her set out Qua lity Assurance Guidelines and are taking action to build systems t hat can guarantee quality.
From FY2023, we have conducted quality assurance reviews by the head of each d iv ision concerning business divisions' quality assurance
initiatives, wit h t he aim of strengt hening q uality assurance systems and quality governance.
We improved QA systems by product and service to ensure quality and product safety at every stage of t hese. In addition, our Quality
Assurance Guidelines undergo repeated checks by business managers. concerned part ies inside and outside the company, and specialists,
sparing no effort to prevent accidents or disruption in markets.
As a part of quality assurance with participation by all employees, we designate November of every year as Quality Month. During t his
mont h in FY2023, w e post quality assurance•related messages from the president and the heads of each d ivision, along w ith Quality Monthposters and dig ital signage at all sites. At individual workplaces, we also held PL/QA seminars and conducted reviews of quality·related
m isconduct as described in the Compliance Manual.

Overview of QA activities:········-------Eii::H&IIH:iPlan,._ Confirmation of action ._ Qualit~ :1nformat1on :and results

+

t

I

Markets

Customers

Customer
needs

Purchase

Other
companies'
trendsUse

Socialsituation

Enhancement of management
and technology

Qualityevaluations
Verification of quality evaluations-132-

Product safety promotion activities
For each department and group company, we conduct PL/QA assessments carried out by t he Quality Assurance Division, which has been
made independent of the business divisions, or by QA personnel from different departments, to verify and improve PS activities. Moreover,
we have established criteria for assessing PL and PS risk, and based on t hese criter ia, we carry out inspections at each stage, from productdevelopment to sales, striving to reduce risk.
All possible measures are taken to ensure PS, and train ing drills are also conducted on a regular basis at all business divisions based on PL
incident scenarios. PS remains a crucial theme throughout the whole of the group, and we w ill continue to m itigate risk as much as
possible and strive to fulfill our social responsibility.

PL response system
TOYOBO Group Basic Pohcy on Product Safety

Policy Approval

Deliberation anddetermination of
PS response measures
Deliberation anddetermination of

PS response measures
Confirmation and evaluationof the implementation of

Pfoduct safety measures

lmplementatM>n

BtOethlcs Revtew Committee(Chair : General Manager of Quality A5suranceManagement Department)of product safety
review

PS Review Board(Chair: General Manager of Quality
Assurance Management Department)

Implementationof PL response

PL Response Drill

Product safety and quality assurance training
We implement PS and QA training not only for new employees and new managers, but also for other employees at each level.
Name of seminar

Number of times held

Target/ purpose

Seminar on basics ofquality assurance

4 times per year

Education for new employees and department-specificeducation

Qace seminar*

4 times each in the firsthalf and the second halfof the year

Development of core human resources for quality control
and quality assurance, and construction of an in-househuman resource network for quality

Training in case studies
involving quality
irregularities

1Otimes per year

Training involving quality irregularities* "Qace" is an acronym for med from "Qa_assurance," "Qc_cont rol," and " Qe_ensurance."

-133-

Notes

Packaged into elearning format

Launched in

FY2023

Launched in

FY2023

Monthheld

Target/ purpose

PL/QA seminar

NovemberHeld as a component of quality assurance inwhich all employees participate

Basics of TQM and its support ing
statistical methods

Quality management
seminarJanuary

Held as an opportunity for top management
to consider quality management

Quality-centered management andprevention of quality irregularities

Chemical substancemanagement seminar

February

Held as a component of professional
education

Latest movements in chemical regulationsin China and Taiwan

Name of seminar

Theme in FY2023

ISO 9001 Certification Status• 1509001 Certification Status

Response to the quality-related misconduct incidents
Toyobo group is responding to the q uality-relat ed misconduct incidents d iscovered related to t he PLANAC® and ot her eng ineering plast ics
in 2020 by firmly establishing "manufacturing that fulfills our pro mise to provide safety and security from t he customer's perspective" andby fort ifying t he inspection and qua lity confirmat ion mechanisms in the group's risk management system.

Status of the engineering plastics department
Following the quality-related m isconduct incid ents to PLANAC® and other products, we have been in contact wit h our customers
individually and reacq uired cert ification from Underwriters Laboratories (UL) for some of our products.
We also proceeded to investigate the status of all of our product th rough quest ionnaires and other methods. Any quality-related matters int he Engineering Plastics Depart ment t hat were considered serious issues, such as violat ions of our agreements w it h cust omers, wereconsidered priority issues and reported individually to all associated customers.
As t he result of our investigat ions as well as customers' cooperation with checks, w e did not confi rm any serious defects in product safety
or in basic functions. By rebuilding proper quality control systems and enhancing governance, we are making every effo rt to resto re trustin our company.

-134-

Strengthening the quality risk management system
The company responded to the quality-related m isconduct incidents by adopting a "three lines of defense" structure at t he start of fiscal
2022. The multi-layered structu re for detecting and preventing quality-related m isconduct positions t he business d ivisions as the first lineof defense and the Quality Assurance Division and Internal Audit Department as the second and third lines of defense.
The Quality Assurance Division, which is t he second line of defense, identified im proper inspections and other item s as significant qualityrelat ed risks, and led and assisted risk assessments at each business unit. The division formulated m easures to reduce risk and has begun
assisting in the application of the measures.
The Internal Audit Depart ment, the third line of defense, created a Risk Management Audit Team to perform quality audits for t he first andsecond lines of defense. The department collects information on the operation status and current issues of t he Quality Assurance Divisionand t he business divisions, and exam ines the best approach to coord inating audits.
In the second half of fiscal 2022, the Internal Audit Department began a first line audit w ith t he Quality Assurance Division. The
depart ment also audited the Quality Assu rance Division and had a frank dialogue with the d ivision about expectat ions for its supervision ofeach business d ivision.
We also im plemented data integrity (DI) measures related to quality, including automating t he inspection report processes of eachbusiness d ivion' Qua lity Assurance Departments to reduce human error, among other init iatives.

The three lines model for quality control...

First line

Second line

Th ird line

Risk management by business divisions

Risk management by corporate departments

Audit by Internal Audit Department

Risk identification,
countermeasure creation,
monitoring

Internal audits
I

Role and responsibility• Responsible for responding and reducing to risk
during events and identifying and reducing with

Role and responsibility• Identify overall and group-wide risk and formulate
and apply countermeasures from a perspective

support and advice from Corporate Departments• Responsible for implementing and establishingdivisional risk countermeasures, and reviewing thestatus of the countermeasures

independent from business operations• Responsible for horizontal deployment of recurrence
prevention measures• Monitor the status of risk response and provide
support and advice

Business division/ production site

Quality Assurance Division-135-

Role and responsibility• Audit the application and status of first and se<ondline risk reduction measures from an independentand objective perspective• Responsible to management for assuring theeffectiveness of all processes

Internal Audit Departm ent

Supply Chain Management
Materiality
Related ESG : E S

1Partnership : Supply chain

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8

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Management approach

Policy and approach
In the recent context of rapid globalization and the expansion of social issues to be solved, t here is an even stronger demand for CSR
activities and risk management, as "cont ribution to the building and development of a sustainable society" is a corporate social
responsibility.
In this environment, it is imperative for us to promote procurement activ ities t hat place g reater emphasis than ever before on CSR factors
such as the natura l environment and labor environment, and human rights, in addit ion to the conventional quality, performance, price,
and delivery condit ions, w hen procuring products, materials, raw materials, and ot her items.
Toyobo group is contributing to achieve the SDGs, w hich support the development of a sustainable society, t hroughout our entire supply
chain by establishing an appropriate t rading policy and cond ucting procurement and logistics responsibly.
Based on the principle of "2. Fair business practices" in the TOYOBO Group Charter of Corporate Behavior, we pract ice fair competition anddeali ngs, responsible procu rements & logistics and, maintain sound relationships with society and stakeholders, including customers andbusiness partners.
We have formulated CSR Procurement Guidelines that deal with matters such as legal compliance, fair trade, consideration for theenvironment, and respect for human rights (includ ing t he prohibition of child labor or forced labor and discrimination based on gender
identity including LGBTQ), and Green Procurement Gu idelines that are considerate of the environment. In September 2022, we revised the
CSR Procurement Guidelines based on various recent global issues.

< Basic Policy on Transactions in Procurement and Logistics>
1. Compliance
We comply with t he laws and regulations of the countries and regions in which we operate, respect corporate ethics and social
norms, and behave conscientiously.

2. Securing fairness, equality and transparency
We open the door wide to all companies and make fa ir and impartial judgments to ensure t hat business t ransactions are
conducted in a highly t ransparent manner.

-136-

3. Partnership
We make efforts to build sustainable pa rtnerships w ith our business associates so that we can all grow by deepen ing mutua lunderstanding through active dialog ue.

4. Promotion of CSR-based procure ment
We promote business practices t hat meet our sta nda rd of corporate social responsibility, such as respect for human rights,
environmental protection, product safety, quality assurance, and indust ria l safety and health.
• Promote CSR and actively work toward social contribution• Maintain and strengthen legal and other compliance, fair business transactions, and corporate ethics• Maintain and strengthen environmenta l activities• Assure quality and safety in our supply of products• Respect human rights• Disclose information to stakeholders and engage in d ialogue in a timely and appropriate manner. and maintain andstrengthen information security measures

CSR procurement
We have formulated our CSR Procurement Guidelines and Green Procurement Guidelines w ith t he aim of fulfilling our social
responsibilities, such as ensu ring legal compliance, product quality and safety and respect for hu man rights, and enhancing value
throughout our entire supply chain throug h initiatives such as contribut ing to reg ional communities and environmental conservation. In
addit ion to sha ring t hese guidelines t hrough our website, we carry out CSR procurement surveys for business partners request ing t heir
understand ing and cooperation in actively advancing initiatives.
• CSR Procurement Guidelines• Green Procurement Guidelines

Ta rgets and KPis
<Targets>• Throughout its supply chain, Toyobo group aims to realize procurement and logist ics t hat involve fair and sincere t ransactio ns, respecthuman rights, are environmentally friendly, and consider impact on both society and the environment.
• We w ill reduce COz emissions by promoting g reen logistics, such as implementing a modal shift to rail and sea transportation and
im proving loading efficiency.

< KPis and results>
Initiatives

KP!s

Targets

Results (FY2023J

90% or above(In years when a survey is
not implemented, we carryout dialogue with business
partners that past surveys
have shown have issues)

93% (FY2022)
In FY2023, we implemented
corrective measures and areview of our CSR
Procurement Guidelines
based on the findings of thequestionnaire.

Year on year reduction of
0.5%

Year on year reduction of
5.3%

+-

1. Ratio of CSR• Realize sustainable, responsible
procurement and logistics

procurement surveys
returned• Carry out transactions that are fair andrespect human rights• Build a low-carbon society

2. Ratio of reduction in CO 2
em issions per unit oftransportation* inrelation to logistics* Co 2 emissions per unit of transportation (ln g-CO2/ t-km) represents the number of grams (g) of Co2 emitted per tonne of goods t ransported over one kilometer.

-137-

Initiatives

Fairness and transparency in trade
We take a rigorous approach to ensuring fairness and transparency, based on sound trad ing. We do not give or accept gifts orentertainment in order to secure unjust profit or preferential treatment from our business partners, and we have established a priorconsent system to strengthen our checking system to ensure t hat act ions that go beyond what is deemed socially acceptable do not occur.

Toyobo group CSR procurement seminar
In October 2023. we distributed a movie of the CSR procurement briefing to our approximately 500 major suppliers worldwide.
At the seminar, we explained the sustainability initiatives of Toyobo group, including carbon neutrality, respect for human rights, and CSR
procurement, and requested compliance with the Toyobo Group CSR Procurement Guidelines. We also expressed our commitment tocooperate with our suppliers and contribute to the development of a sustainable society t hroughout the supply chain.

* Theme for FY2024• Message from the officer in charge• Toyobo group's susta inability initiatives• Toyobo group's CSR Procurement Policy and w histleblower protection system• Request for responses to CSR procurement questionnaire

CSR procurement survey
Implementation of the CSR procurement survey and risk assessments
Our company communicates our CSR Procurement Guidelines to major busi ness partners worldwide and conducts risk assessments
concerning informat ion security and social issues such as the environment and safety, human rights, labor, and compliance (includ ing theprevention of graft, bribery, fraud, money laundering, and other corruption). In these risk assessments, we cond uct questionnaire surveys
aimed at major business partners worldwide, based on our CSR Procurement Guidelines. From the self-assessments returned in thequestionnaire, we connect improvement activities to the consideration of impacts o n society and t he environment and t he reduction ofrisks. In concert w ith both suppliers and buyers, we work to promote CSR procurement t hat enhances the sustainability of society.
We conduct the questionnaire every other year, with the most recent conducted in FY2022. In FY2023, we enacted correct ive measures
based on the results of the questionnaire, and revised our CSR Procurement Guidelines.

Engagement with new and existing business partners
We ask new business partners to cooperate with our questionna ires when we commence business w ith t hese, and periodically make t hesame req uest to existing business partners. We then perform risk assessments. We confirm that new business partners haveacknowledged our CSR Procurement Guidelines at the start of business w ith us.

-138-Collection of 1nformat1onconcerning CSR

Engagement with

Review of gu1del1nes

business partners\

and quest1onna1reContinually cycle through steps tocontribute to enhanced awarenessamong b usiness partners, and promote
the reduction of CSR risks
in the supply chain)

Implementation

Conducting of briefingsof quest1onna1reResults obtained in CSR procurement surveys in FY2022
CSR procurement surveys covers social issues such as the environment, safety, huma n rights, labor, and compliance (including prevent ionof bribery, embezzlement, and other forms of corruption), as well as information security. Through t hese surveys, we are able to evaluate
suppliers' risk in relation to social issues. We collaborate with suppliers to address the issues identified t hrough risk assessment, and we
strive to enhance t he overall level of CSR activit ies throughout the supply chain. When we begin doing business w ith a new supplier, we ask
t hem to assist us by responding to a survey, and we also ask existing suppliers to collaborate on surveys. If issues are identified through a
CSR procurement survey, we take corrective measures.
1. Survey overview• Aggregation scope and no. of suppliers covered 185 su ppliers representing 90% of overall t ransact ion volume• Breakdown of Suppliers

Raw materials
suppliers

Equipment andmachinery suppliers

60%

15%

Logistics
providersOutsourced
manufactures, etc.

19%

6%

• Survey content
The survey was drawn up based on the Toyobo group's CSR Procu rement Guidelines. The CSR Procurement Guidelines were compiled withreference to SDGs, the UN Global Compact. and the Charter of Corporate Behavior promoted by the Japan Business Federat ion(Keidanren).
• Survey items
Compliance and ethics/ Supply chain management/ Stakeholders/ Risk management/ Environmental activities/ Human rights andworking conditions/ Promotion structure/ Product safety
2. Aggregated results
The survey completion and return rate for tier-one suppliers was 93% (1 72 out of 185 companies).

Risk
assessment
rank

A

B

C

D

Points band

96 points or
higher80-95

points60-79

points40-59

pointsNo.ofcompanies

Share of
total

Content and response

116

67%

CSR measures implemented are excellent ➔ Feedback on survey results

51

30%

CSR measures implemented are adequate ➔ Feedback on survey results

42%

Response: engage in dialogue with the supplier1%

Response: engage in dialogue with the supplier and request
improvements-139-Less than
40 points

00%

Evaluation results of CSR procurement survey

Response: engage in dialogue with the supplier and request
improvements, and consider w hether to continue doing business withthat supplier

Evaluation scores of CSR procurement survey
Compliance and ethics

1%

2%-

1

Product safety

Supply chain
management

Y-4
A

Promotion system

Human rights andworking conditions
Environmental activities

3. Evaluation results
The survey results showed no compliance violations relating to matters such as the environmen t or product quality. With regard to supply
chain management, an area where evaluation performance tended to be quite low overall, we asked each company to prom ote measuresin this area, emphasizing its importance.
With respect to the five companies that were deemed to have relatively high risk (i.e., those companies ranked as C or D) based on theevaluation results, we undertook verification by engaging in dialogue with these companies. Through t his process, we confirmed that twoof the companies in question were actually implementing CSR measures w ithout any significant problems. The remaining three companies
had been unable to implement CSR measures properly because t hey did not have a CSR promotion structure in place. We provided them
wit h support and guidance by introducing case studies of measures t hat we had taken, and we asked t hem to put in place the necessary
systems and promote CSR.
Secondary suppliers (1 15 suppliers) were also surveyed, and no suppliers were identified as being at high risk.

Green procurement
In order to contribute to t he creation of a sustainable society, we carry out procurement from suppliers who actively work to conserve theenvironment and procure materials that have low environmental impact on a priority basis. Additionally, we have form ulated Green
Procurement Guidelines w ith t he aim of promoting environmentally friend ly procurement. We ask our business partners to understandour g reen procurement approach and provide the following information regarding chemical content.
(1) That the material does not contain any of t he prohibited substances specified by Toyobo.
(2) That the content of hazardous substances specified by Toyobo has been identified.
In fiscal 2022, we revised our "Chemical Content Information Sheet" based on t he information sharing scheme "chemSHERPA®", developed
by Japan's M inistry of Economy, and the 'Information Sheet on Chemical Substance Content' has been revised in accordance with
amendments to laws and regulations, and t he survey has been carried out among suppliers. For general purchased goods, we arepromoting g reen purchasing w it h the use of environmenta l labels.

* "chemSHERPA®" is a registered trad emark of the Japan Environmental M anagement Association for Ind ustry (JEMAI).
• Green Procurement Guidelines-140-

Educational activities for sustainable procurement
As training, we have all personnel (100%) with responsibilities for procuremen t and log istics read throug h the TOYOBO Grou p Complia nce
Manual -including the CSR Procurement Guidelines- t ogether on an annual basis. During these t raining activit ies, each Procurement andLogistics Department group manager ensures that relevant personnel are familiar with the CSR Procurement Guidelines.
We also guide and foster our procurement and logistics staff by setting "contribution to sustainable procurement (sta ble procurem ent)" asa target in their personnel performance evaluation and manag ing t heir progress.
We also incorporate goals related to contribution to sustainable procurement (stable procurement) into personnel eva luations ofprocurement and log ist ics staff, and conduct guidance and t raining on topics including management of progress toward t he goals.

Addressing conflict minerals
In our CSR Procu rement Guidelines, our g roup calls for the promotion of responsible procurement w ith respect to regulations on conflictminerals.
Using Specified Chemical Substances Data Sheets, we investigate whether conflict minerals are used in t he raw materials behind all of ourcompany's products.
In FY2023, we also investigated product s that contain tin, tantalum, tungsten, and gold am ong t heir raw materials. We also prepared aninternal survey and response system t hat lets us provide prompt and proper responses to survey requests from customers regarding
confl ict minerals.

Resolving social issues in logistics
To resolve social issues in log istics, we are pushing forward with initiatives to reduce the environmental impact and reform the work stylein logistics. To reduce our environmental impacts, we are working to shorten t ransport distances by utilizing t he ports closest to ou r
business sites, to make modal shifts to ships and railroads, and to enhance loading efficiency through vehicle allocation simulations using
logistics systems. We are also sharing logistics and storage w ith other companies (includ ing j oint shipment, making use of returningt rucks, securing j oint storage space), and are encouraging t he introduction of systems that ena ble v isualizat ion of the logistics situation.
Additionally, we formu lated a voluntary action declarat ion in support of the "White Log istics Movement"* advocated by Japan's Ministry ofLand, Infrastructure, Transport and Tourism, Ministry of Economy, Trade and Industry and M inistry of Agriculture, Forestry and Fisheries.
We d isclose our various init iatives, including " Logistics improvement proposals and cooperation," "Utilization of pallets, etc.," "Modal shift
to sea and rail t ransport," "Consideration of compliance w ith applicable legislation w hen selecting logistics operators," and "Safetymeasures for freight handling."* A movement in which all t he parties involved in logistics cooperate to propose and implement mutually beneficial improvements

Toyobo's voluntary action declaration in support of the "White Logistics Movement"
Details

ActionCooperation and proposed improvements regarding
logistics

We will deal sincerely with requests from business and logistics partners
concerning cooperation and proposed improvements regarding logistics.

Use of pallets, etc.

We will use pallets to transport some of our products, reducing the amount of work
hours required for transportation.

Modal shift to sea and rail transport

For long-distance transportation, we will shift from truck transport to ferry or rail.
Additionally, we will encourage the use of the ports closest to our plants.

Consideration of compliance when choosing
contractors

When selecting logistics contractors, we will consider their record of compliancewith relevant laws and regulations.

Safety measures during cargo handling

We will implement measures to prevent accidents during cargo handling work,
such as clearly demonstrating safe work procedures.

-141-

Response to natural disasters, etc.
In recent years, various areas have experienced significant damage from eart hquakes, typhoons, and sudden loca lized rainstor ms. We
have gained knowledge in the process of responding to these events, and aim to realize even more stable procurement and logist ics.
As part of our Business Continuity Plan (BCP), we strive to identify and manage risks throughout the supply chain. For procurement, we arelooking to procure raw materials from multiple regions, and for logistics, we are establishing alternative t ransportat ion means and routes
in collaboration with logistics operators.

Participation in initiatives
In January 2020, we joined the "Global Com pact Network Japan", and since FY2022, t hrough part icipation in its supply chain subcom mittee,
we have been gathering information and applying it to our daily activit ies.

Declaration of partnership building
In October 2020, we agreed with t he aims of the Council on Promoting Partnership Build ing for Cultivating the Fut ure promoted by the
Cabinet Office and the Small and Medium Enterprise Agency, and announced our "Declaration of Partnership Building".
In this decla ration, We expressed our commitment to contribute to solving social and environmental issues throughout our supply chain.
Based on the declaration, we w ill endeavor to add value with our entire supply chain.

Response to whistleblower protection system
We have established a consultation and contact point for businenss partners on our website.
It receives reports and inquiries for violations or suspected violations of laws and regulations, and corporate ethics. In compliance w it h thePrivacy Policy, we have established a system to prevent any d isadvantage to t he persons consulting with us as a resu lt of consultation orreporting .

Main items for consultation
1.Violations or suspected violations of laws and regulations, and corporate ethics, etc.
2.Acts v iolating respect for human rights
3.Acts v iolating our CSR Procurement Guidelines• Receiving reports from business partners (Japanese only)-142-

Human Resource Management
Materiality
Related ESG : S
Human capital'1, Management approach'1, Initiatives

Management approach

Policy and approach

Toyobo group aims to realize its corporate philosophy framework, "TOYOBO PVVs," and to become an organization that continues totransform itself to create new value.
We put into operation the new human resource system in July 2022. implements specific policies such as promot ing and supporting
capacity building, t reating and evaluating in accordance with job responsibilities, enhancing management skills, and encouraging theactive participation of diverse professional human resources, so that each of our employees can feel growt h, pride, and satisfaction.

Structure

The Executive Officer in charge of the HR Division is responsible for t he group's human resources management. Our operating
departments responsible for human resources and labor affairs create regular oppo rtunit ies for discussion and information sharing wit h
the departments responsible for human resources at each business site and affiliated company, which leads to t he form ulation andexecution of human resources management plans. Regarding key issues in the annual management plan, reports are made to the relevant
executive officer each quarter and the issues are also deliberated on by t he Sustainabil ity Committee. Important measures are alsod iscussed by the Board of Corporate Executive Officers and Controlling Supervisors and Board of Directors.

Targets and KPis

<Targets>
Toyobo group will build an organizational structure for the entire group t hat enables employees to work easily and feel sat isfaction with
their work, that ensures fairness and integrity, and t hat is considerate of diversity and human rig hts.

-143-

< KPis and results>
Initiatives

Targets

KPls

Results (FY2023)

t
1. Training core overseas personnel in Japan

15 employees per
year*

Canceled becauseof COVID-1 9

2. Training investment per employee (Time spent on
education)¥50,000 per year*,
21hrs¥50,000, 17.97hrs• Nurture human resources (build
careers, develop capabilities)

3. Ratio of annual paid leave taken• Promote work-life balance

4. Reduction of overtime work hours(No. of people over 360 hou rs per year/ No.oftarget persons)• Ensure equality in recruitment
and treatment of employees

80.2%
2.0% or less
(20% reduction
compared to FY2020)

4.2%

Increase of positive
response ratio(1)38%(2)50%(from theprevious survey)(1) I mproved by 5
points,(2) Improved by 8
points• Maintain people-friendly work
environments {promote health)

5. Positive response ratio on employee's "degree ofaffirmation for work style" based on engagement
surveys(1) "no difficulty in daily work"(2) "respect the diverse views and ideas of each
person"* Target s for FY2026

Initiatives

Human resources development
Systems, education, and training for human resources development
Toyobo group considers human resources to be our most important asset. We support the growt h of each and every one of ouremployees. while respecting their diversity. We believe that the continuat ion and development of t he group as a whole can be achieved bybuild ing an environment in which our employees can flourish both inside and outside the company and rea lize their own potent ia l.
Toyobo carries out human resource development based on a t raining program categorized by j ob level, type and object ive, from t he newly
employed to top management. Over our long history. we have fostered an approach of valuing "people"- our most important asset- andthis is shared t hroughout the group.
Based on this idea, under t he Executive Officer in charge of the HR Division and is responsible for the execution of human resourcesmanagement we have established a group specializing in human resource development and actively support training for employee skill
development.

-144-

Education & training system
As of April 2023

Standard Training

Job
level

Job Category.specific Training
Training
held atCareerDesignTraining by Level

OJT

Selectable
SeminarsN~<

Generation
Leader~ elo pment

Training for

Nehpositionto
acqul~themle

Global Response
Training

each

Sales

Te«:hnlcal/ResearchTraining for
all manag ers

M Position
Advancement
Train ing
(examination )S1

Production Technology

I

Innovation Course for
Section Chiefs 1

52

Quality
Assurance
Train ing

0

i1

S3

ij

Intermediate Business Tra ining

Basic Business Training

S4

Career Design Seminar
New employee training(firstsemester/second semester)

S4 Advancement Training

SS

S6

Required training

Ac:tvancement•related

Selection required

Education & training-related results
Results (FY2023)

Training hours per employee

17.97hrs

Training investment per employee¥50,000

Total training attendees

2,330
39,816hrs

Total training hours

Implementation status of training in career and skills

-145-

47%

plant

Main personnel systems

Personnel appraisal
system* 'We perform personnel appraisals for all employees, with evaluations annually in October and interim checks in
April. Employees and their supervisors together review the state of achievement toward goals, actions, and capacity
development, then connect this to medium- to long-term growth and capacity development for individual
employees.

Self-reporting system(Career Development
Sheet)

This is a system by which individuals use the Career Development Sheet during personnel appraisals to express
their career path-related wishes to the company. Individuals report to superiors their thoughts concerning their job
category, location of work, and career. The supervisors then consider placement and personal development
methods that will allow the employees to further grow and play active roles in the company.

Career challengesystem (in-house
recruitment)This system is implemented as a component of human resources development to encourage employees toindependently expand their careers and take on the challenge of new work.

Mirai Jinzai Juku

This in-house program for human resource development makes use of crowdfunding to promote the launch of new
businesses. Employees gain practical experience in processes spanning product planning and development tosales.

* 1 Addresses all employees, including managers.

Nurturing the next generation of management
For Toyobo group's initiative to train the next generation of management, the g roup plans to provide chosen personnel with internal andexternal management executive development training. In order to further broaden their experience, we wi ll also give them the opportunity
to undertake business operation and management duties to hone their management skills, which will help us achieve ou r succession plan.
In response, from FY2022, the group has operated a Human Resources Conference to discuss measures for t he development of nextgeneration management human resources. We divide this into a Company-Wide Human Resources Conference that mainly d iscusses
successors for management posts and a Departmental Huma n Resources Conference that mainly discusses successors for highly
specialized positions, and implement actions including policy support for the development of successor candidates as wel l as selection androtation of human resources. By linking these two conference bodies, we w ill uncover and develop human resources and increase theireffectiveness.
At the same time, we are promoting diversity and inclusion in order to increase our medium to long term capabilit ies. Besides promoting
the participation and advancement of women, we are actively taking on mid-career hires and staff from overseas so that we can bring in
more knowledge and experience.
Under our TOYO BO PWs corporate philosophy framework, we conduct company-wide t raining for all management positions to ensure
awareness of security and d isaster preparedness, occupational safety, quality, and compliance, and to advance organizational initiat ives.
Company-Wide Human
Resource Conference

Department Human
Resource Conference

Attended byAttended byPresiden t,
controlling

Controlling supervisors,operating department
heads2, etc.

supervisors1, etc.

All management personnel

Alignment

Department and staff'
personnel

AgendaAgendaSelection, training androtation of humanresources

Selection, training androtation of humanresources

1 Oversees each division and management and administration division
2 Oversees specific fields across multiple business divisions
3 "Corporate divisions"' including corporate planning, management andadministration, and human resources-146-

Developing global human resources
Toyobo implements "Short-term Overseas Business Training" in which around 10 employees in two separate groups from Japan are sent
overseas for tra ining each year (first and second half of the year). This motivat es younger and mid-career employees to participate in
Toyobo's globa l business. and also represents a major opportunity for them to further their careers.
In addition. local candidates for management from overseas offices are selected to undergo training in Japan twice each year. This aims toenhance their understanding of Toyobo and deepen interaction wit h employees who work in Japan.
Bot h programs were suspended due to the COVID-19 pandemic, but the "Short-term Overseas Business Training" will resumed in thesecond half of FY2023, and the t raining for local candidates for management from overseas offices is scheduled to resume in FY2024.

Initiatives for preventing harassment
Toyobo group st rives to mainta in harassment-free workplace environments and we are focusing on anti-harassment measures based on
an approach t hat providing work incentives and raising j ob satisfaction leads to the securement and cult ivation of excellent humanresources. As a preventat ive measure, we are implementing management training to deepen understanding within the organizat ion, andas a response measure. we carry out thorough internal reporting through the compliance consultation centers and the Complaint
Handling Committee, which includes labor union representatives, so that we can detect and solve issues at an early stage.
• Efforts for establishment of complaint handling and internal reporting systems• Compliance consultation desks

Employee engagement
Under a relationship of equality between t he company and individual employees. it is necessary that we align the vectors of organizational
goal achievement and personal growth. Towa rd t his end. in 2021 we launched a survey on organ izat ional climate and j ob satisfaction.
targeting all officers and employees.
These surveys will keep us periodica lly appraised of employee engagement, and create an environment in which they can proactively work
w ith a sense of pride and fulfi llment.

Engagement survey results
We conducted t he second Engagement Survey in September 2022. In addit ion to communicating an overview of t he survey results toemployees, we offer feedback on the survey results at the w orkplace level and are advancing dialogue and action plans w ithin w orkplaces.
(Year)

Increase in employee work satisfaction based on engagement
survey2021

2022(1) Percentage of positive responses to "No difficulty in performing
daily work"

33%

38%

(2) Percentage of positive responses to "Respects each individual's
diverse opinions and ideas"

42%

50%

Work-life balance
Measures for the reform of working style
Toyobo group is engaged in work style reform so that our employees can work with renewed efficiency and achieve a good balance
between wo rk and personal life. We also provide support such as the Childcare Shortened Work Hour Program, nursing care and flextime
system. and telecommuting. Building an environment that enables more flexible work styles tailored to each employee's life stage provides
an opportunity to enhance creativity. Letting each individua l do their best with confidence. pride, peace of m ind, and a forward-looking
m indset helps t o build a stronger foundation for the company.
The TOYOBO Group Cha rter of Corporate Behavior declares, "We w ill respect employee diversity and support work pract ices that allow
employees to demonstrate their ind ividual skills. Moreover. we will provide workplaces t hat are conducive to productive work while taking
health and safety into consideration."-147-

Development of systems
Toyobo has introduced schemes t hat go above and beyond t he legal requirements, including t he Childcare Shortened Work Hour Programand nursing care leave, and we also provide a flext ime system. Since fiscal 2020, five days of pa id leave has been offered as Childcare
Leave. In conjunction with t his change in the system, we are encouraging men to take childcare leave. Men employees who have a child arenotified of the system individually and are recommended to take this leave by their imm ediate supervisor. We w ill continue t hese
promotion efforts until it becomes normal for men employees to take childcare leave.
We introduced a 15-Minute Shortened Work Hour Program at head and branch offices in FY2018, and at the Research Center in FY201 9.
We are also increasing the number of days of leave at other offices and we are creat ing opportunit ies for employees to spend q uality
personal t ime together with family and friends, such as holding a No Overt ime Day at least once a m onth. In fiscal 2020, we introduced a
Teleworking scheme at head and branch offices, and have expanded to also include other offices in fiscal 2021.

Scheme usage
(FY)

2019

2020

2021

2022

2023

Women taking childcare leave

24

27

30

32

39

Ratio of women taking childcare leave (%)

100

100

100

100

100

Men taking childcare leave

50

69

58

98

Ratio of men taking childcare leave(%)

46

80

64

104.3

Employees taking childcare shortened work hour program

75

64

70

67

83

Annual paid leave utilization ratio(%)

68

73

64

72

80

206

2,045

2,413

2,520

Taking telecommuting systems

Childcare leave utilization■ No. of women•

No. of men
Utilization for women ♦ Utilization for men
(%:

180

120.0
104.3

100.0
80.0
60.0
40.0
20.0

2023

0
(FY)

-148-

Main support systems
Main system

Details+

Teleworking scheme

Employees can work outside the office, in principle at their home.
Can be used in conjunction wit h Half-Day Annual Leave, Childcare
and Nursing Care Shortened Work Hour Programs, and the Flextime
system.

Flextime system

Managed in one-month installments w ith core t ime set from 11:00 to
14:00. Introduced in 1990.

Half-day annual leave

Annual paid leave can be taken in half-day installments. Introduced
in 1990.

Volunteer leave

Applies to em ployees participating in the Japan Overseas
Cooperation Volunteers initiative. In principle, leave can be up to two
years and four months.

Childcare leave* Salary is paid from the first day for a period of up to five

Systems supporting diverse
work styles+

Can be taken up to the day the child turns two.
consecutive days

Systems supporting work-lifebalanceChildcare shortened
work hour program

One workday can be shor tened in 15-minute installments up to twohours. However, the period from 10:00 to 16:00 has to be worked(including designated breaks).
(Can be used up to the child finishes the third grade of elementary
school)Nursing care leave

Can be taken up to three times per case (same illness of the samefamily member) for a maximum of 366 days (which can be taken in
installments).

Nursing care shortened
work hour program

Designated work hours for a si ngle day can be shortened by up to
two hours for up to two times per case (same illness of the samefamily member).

No overtime day

Once a month, employees are able to spend quality personal time
together with family and friends as an opportunity to improve
motivation and enhance creativity.

Childcare facilities

I n April 2018, a nursery was established inside the Research Center.

Babysitters

When an employee is on a business trip, the company will pay thecost of a babysitter (but only in cases where another appropriate
care provider is not available). In principle, to be taken in three-hour
installments for children i n the sixth grade of elementary school or
below.

-149-

Diversity & Inclusion
Materiality
Related ESG : $Employee well-being: Diversity and inclusion-.J,, Management approach

''.
1111
'

'

e

-.J,, Initiatives

Management approach

Policy and approach
Toyobo group believes that personal and organizational growth is achieved t hrough a process of mutual respect among our employees,
w ith their differing work styles, careers, gender, nationality, race, and beliefs, and through cooperation to achieve ou r shared objectives.
We respect different opinions and a wide range of values, and cooperate t o achieve ambitious goals together.
The TOYOBO Group Charter of Corporate Behavior also contains the following declaration.
6. Active employee part icipat ion
We w ill respect employee diversity and support work practices that allow employees to demonstrate t heir individual skills. Also, we will
provide workplaces that are conducive to productive work while taking hea lth and safety into consideration.
6-1. We will work toward developing workplace environments t hat facilitate active part icipation among a d iverse range of human talent.
6-2. We will prevent va rious types of harassment and other forms of mist reatment in our workplaces, and accord ingly we w ill not engage
in d iscriminatory practices neither in regard to hiring nor terms of employment.
6-3. We will strive to create workplaces that are safe, hygienic and rewarding, and will work to prevent excessive workloads and reduce
overtime work.

Targets and KPis
< KPis and results>
Initiativevs

Realize diversity
and inclusion

Targets (FY2026)

KPis

Resu Its (FY2023)

1. Women manager ratio

5.0% or above

4.7%

2. Ratio of men employees
taking chi ldcare leave

Over 80% of eligible persons take absence
leave, averaging 14 or more days (20%increase from FY2021)

104.3% of t hose eligible for absence
leave, 14.8 days absence leave taken
on average

3. Employment ratio ofpeople with disabilities

2.5%

2.3%

-150-

Initiatives

Participation of women in the workforce
Toyobo group established the Diversity & Inclusion Group within the Labor Affairs
Department, and t he group has been engaged in activities to promote the em powerment of
women. We hold events such as presentations, seminars for managers, women leader
development seminars, and Women Empowerment Promotion Proj ect on a continuous basis,in order to realize a change of mentality among our employees.
We have also opened a nu rsery school w ithin in the Research Center in Otsu, Shiga
Prefecture, as a means of support for childcare. This enables ea rly return to work fromchildcare leave and planned return to work, and supports t he development of an environment
in which employees can approach childbirth with peace of mind.

~::::::::::J
Toyobo Nursery School at the Research Center• Promotion of Women's Participation and Advancement

External evaluation
Certified as an Eruboshi (second level) company based on the Law for Promotion of Women's
Activities
Toyobo recieved the second level Eruboshi certifi cation from the Min ister of Health, Labour and Welfare as a company t hat actively
promotes the advancement of women on December 14, 2021.
The "Eruboshi" certification is g iven to companies that have made excellent efforts to promote t he activities of women in accordance withthe "Act on Advancement of Women in Employment" (Women's Activity Promotion Act).
In 2015, we established a dedicated organization, the Women Empowerment Promotion Group (the Diversity & Inclusion Group, in April2023}, which has been active in creating an environment and organizational climate where women can play an active role.
Since then, we have hold seminars for managers and women employees and introduced a mentoring system. In 2018, we opened anursery within the company at the Research Center (Otsu City, Shiga Prefecture). We made revisions to the childca re leave syst em t oencourage men employees to take paternity leave, including setting five days of paid paternity leave. The rat e of men employees taking
paternity leave exceeded 80% in FY2021 and has remained high since.
We are certified as a "2-star" company, the second of three levels, based on the evaluation that the items of "recruitment," "continued
employment,"" work styles such as working hours," and "various career courses" have reached t he specified levels.

-151-

Acquisition of Platinum Kurumin certification
The Platinum Kurum in certification is awarded to companies that have achieved a higher level of init iative, such as the introduction anduse of systems to support a balance between childcare and work, selected from among those that have received Kurumin certificat ion ascompanies t hat support the childcare of t heir employees in accordance wit h the Act on Advancement of Measures to Support Raising NextGenerat ion Children.
In July 2023, we were certified as a Platinum Kurumin in evaluation of our various init iatives.

Active participation of diverse human resources
In addition to act ivities to promote the participat ion and advancement of women, we are also w orking to ensure that the assessment andtreatment of employees focuses on ability and is not influenced by d ifferences such as gender and nationality, and we are aiming t ocultivate a corporate cult ure in which diverse employees can participate actively and find job satisfaction.

Promotion of employment of persons with disabilities
In regard to raising the ratio of employees with disabilities, because it is crucia l that initiatives are carried out at a company-wide level, w eshare information and actively encou rage the recruitment of people with disabilities at meet ings of the managers of General
Administration Departments at each business sit e held four times a year.
As part of efforts to improve working environments, the Tsuruga Research and Production Center and t he lnuyama Plant have been madew ith a universal design and others are sequentially being upg raded.
In anticipation of future increases in the legally ma ndated employment rate, w e are actively conducting recruit ment, requesting theunderstanding of workplaces as we prepare jobs.

Ratio of employees with disabilities(%)+

Ratio of employees with disabilities -Ratio stipulated by law

2.4 ·· ........................................................ .
Changed March 1. 2021
2.3 •• • • • 2·.26

2.23

2.23

2.29

2.2 - - - - - - - - -

2.1

2.15

2.0
0----------------2019.3.1
2020.3.1
2021.3.1
2022.3.1
2023.3.1

Promotion of employment of senior employees
We have introduced a senior employee system to promote employment by rehiring employees who have ret ired at the retirement age of
60 and who w ish to continue working and are considered capable of working normally. The rehired senior employees actively help to train
younger employees and pass on skills.

-152-

Support system for employees on leave
To enable the smooth return to work by employees w ho have taken childcare leave, fam ily care leave, or mental healt h leave, we provide
the following support.

Details

Targets

Persons taking childcare or long-termcare leave• Hold interviews with supervisors when returning to work, and carry out support for a smoot hreturn to work
(Interviews are also obligatory before returning to work after childcare leave)• Hold lunch meetings before returning to work (suspended due to the COVJD-19 pandemic)• Send group newsletters during the leave period

Persons taking mental health leave• Conduct fol low-up after a leave through the "acclimatization work system" to enable a staged
return to work
• Send group newsletters during the leave period

To support employees raising children, we have introduced the following systems.

Details

SystemEstablishment of a nursery school in
the company

Baby-sitter support program

Opened in Research Center (Otsu, Shiga Prefecture)

The company covers all baby-sitter expenses during travel for business (through the 6t h grade ofelementary school)-153-

Promotion of Women's Participation andAdvancement'1, Progress so far, and the key issues'1, Targets and action plans'1, Message from manager

Progress so far, and the key issues
Promoting women 's participation and advancement from the three perspectives of recruitment, cultivation, andsupport for employment continuation
At the t ime of 2015, our company was men-centric and was not providing adequate opportunities for women's participation andadvancement.
Our group's activities to promote women's participation and advancement in the workplace started in earnest wit h the launch of the
Women Empowerment Promotion Group in 2015.
In our Phase one action plan that spanned FY2017 to FY2021, we set targets of doubling t he number of wo men in managerial positions
from the FY2016 level and raising the ra tio of women in career track posit ions•, to 15%. We have advanced a number of init iatives focusedon the three aspects of recruitment, development. and support for continued em ployment. As a result, by t he end of FY2021, we hadt ripled the number of women in managerial positions to 13 and raised the ratio of women in career track positions to 17.1%, achieving ourtargets.
For our Phase two action plan from April 2021 to the end of March 2026, we announced a plan to raise t he ratio of women in managerial
positions to at least 5% and the ratio of women in career t rack positions to at least 22%, as well as to raise the number of men employees
taking paternity leave to at least 80% and increase t he number of days of leave taken by 20% from the level in FY2021 . These numbers are
steadily improving at present as well.
A factor that contributed greatly towards the achievement of t hese goals was our sett ing a 40% ratio of women among recent graduate
hires on the g lobal career t rack* 2 as one of our recru itment policies. In parallel wit h this, we have also worked to expand t he range of wo rk
roles open to women and have substantially increased the number of women assigned to the sa les and manufact uring d ivisions, to wh ich
women in career track posit ions had not been assigned in the past. The actions have made t he issue of women's advancement more
d irectly relevant for many managers and have led to a change in attitudes and a transformation in the culture of the organization overall.
In addition to the continuation of these measures. t he ongoing issue that we face is that of making t he granting of equal o pportunities andresponsibilities without gender discrimination the norm. thereby doing away wit h the need for affirmat ive action. We believe t hat achieving
our Phase two action plan is a requisite for making t his ha ppen. and that raising t he sensitivity of employees w ith respect to d iversity
issues is important.
* 1 Defined as all employees on the managerial career track, including those who have only just joined the company.
*2 Including all women employees with the rank of section chief or higher.

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Ratio of women Managers■ No. of women managers•

Ratio of women managers
(%)

35

7.0

30

6.0

25

5.0

20

4.0

15

3.0

10

2.0

5

1.0

o - -_._-._....,__,..___,_...__..,__,__ __.__,..__ o
(FY)
2019
2020
2021
2022
2023

Main measures implemented- Women leader development seminars- Seminars for managers on managing women employees- Career development support programf- Women Empowerment Promotion Project:Activit ies implemented contin uously over a six-year period, wit h changing
participants- Mentoring system(for women up to t he second year after new graduate hiring or mid-career hiring)• Promotion of notification to superiors and leave-takers, and interviews before and after leave, to increase t he rate of men
employees taking paternity leave- Holding "cross-industry exchange meetings" wit h ot her companies to broaden the working perspectives of young employees
and women- Babysitter support system, childcare costs incurred while away on business t rips entirely covered by the company- Establishment of a nursery w ithin the company (at t he Research Center) enrollment capacity: 10 children-155-

Targets and action plans
In April 202 1, we started our Phase two action plan for promoting participation and advancement by women. We set numerical targets tobe achieved by FY2026 including at least 5% ratio of women managers* 3 . To meet t hese targets. we are advancing an initiative to increase
the ratio of women among recent g raduate hires o n the global ca reer track to 40%. In FY2023, our ratio of women managers was 4.7% andthe ratio of women among recent graduates hires on the global career track was 35%.
In addition, we introduced a new Career Development Support Program for women employees w ho are current ly on the regional careert rack*4 . Participants meet with their supervisor over a period of three years to d iscuss a career development cultivation plan t hat
incorporates a formal schedule for the acquisition of specialist technical know-how and ot her knowledge. for example through on-the-j ob
t raining, as well as self-development, etc., wit h an implementation cycle t hat includes an annual progress report and refresher tra ining .
We w ill present career development paths for women on the area ca reer t rack, which had been unclear in the past, and w ill support thesubsequent demonstration of capabilit ies by women employees.
Toyobo also has a policy of participating actively in external initiatives. The company has already expressed its support for 30% by 2030
Challenge* 5 goal announced by t he Japan Business Federation (Keidanren) to raise the ratio of women executives to 30% by 2030, and for
the Women's Empowerment Principles* 6, w hich outline a code of conduct for actively promoting women empowerment; Toyobo has signed
a statement committing itself to act in accordance w ith the WEPs.
Through these activities, we received the second level Eruboshi* 7 certificat ion from t he Minister of Health, Labour and Welfare in
December 2021.

Targets and Initiative Content[Target No.1] Raise the share of managers who are women to at least 5% by the end of fiscal 2026

April 2021 onwards:

Implement women leader cultivation training for women managers and women candidates for managerial
positions(continued implementation since August 2017)

April 2021 onwards:

Implement women leader cultivation training for women section chiefs and women candidates for section chief
positions(continued implementation since September 2019)

April 2021 onwards:

Implement mid-career hiring of women managers

September 2021
onwards:

Establish and implement women empowerment promotion action plans at the unit level-156-

[ Target No.2] Raise the share of women on the career track to at least 22% by the end of fiscal 2026

April 2021 onwards:

Maintain women's share of new graduate recruitment at a level of at least 40%

April 2021 onwards:

Actively promote mid-career hiring of women employees

April 2021 onwards:

Implement follow-up interviews for women employees (continued implementation since April 2015)

April 2021 onwards:

Establishment and operation of a three-year career development support program[Target No.3] Raise the percentage of eligible men employees taking childcare leave to at least 80%, and increase the number of days ofchildcare leave taken by at least 20% by the end of fiscal 2026

April 2021 onwards:

Make elig ible employees aware of the childcare leave system (continued implementation since April 2019)

April 2021 onwards:

Send eligible employees' supervisors details of the encouragement that should be provided to subordinates toencourage them to take childcare leave (continued implementation since September 2019)

October 2022 onwards:

To support trouble-free acquisition of leave and return to work, interviews between superiors and leave-takers
before and after taking childcare leave are mandatory*3 Ca reer t rack for employees who are expected to be active t hroughout the ent ire compa ny,*4 Ca reer t rack for employees whose career is expected to be confined to one specific b usiness site,* 5 This is one of the targets for promoting D&I to rea lize sustainable growth in line w ith". The NEW Growth Strategy'' announced by t he Keidanren in November; 2020.
*6 The Women's Empow erment Princip les were form ulated joint ly by UNGC and UN Women in 201 0.
*7 Eruboshi (2-star) criteria: Must meet 3- 4 of the specified criteria, and must demonstrate cont inued improvement for a period of at least two consecut ive years.

Message from manager
Our group's activities to promote women's participation and advancement in the workplacestarted in earnest w ith the launch of the Women Empowerment Promotion Group in 20 15.
In April 2023, t he department name was changed to Diversity & Inclusion Grou p. In addition
to the existing women empowerment promotion, we have broadened the scope to include
human rights issues and employment of people with disabilities, and we have started toaddress the foreign employees and LGBTQs.
Achieving innovation and growing the company sustainably require that we remain acompany t hat is able to acquire and utilize the skills and knowledge of d iverse huma nresources. For participation and advancement by women, it is important that every woman isaware of her own capabilit ies and works w here she ca n demonst rate those capabilities. Forsuperiors, the maturity to provide opportunit ies and responsibilities fairly and w it ho ut genderd iscrimination is vital.
Diversity & Inclusion Group Manager,

The purpose of achieving diversity is adding value to people and making them st rengths ofthe company.
Although we will continue affirmative action toward women due to its importance, we will go
beyond that to also emphasize t he importance of superiors realizing that attitudes and values
have changed significantly among young people, and taking a stance of addressing people asindividuals and providing opportunities fai rly. We believe t hat workplaces where opportunities
and responsibilities are provided regardless of personal attributes and where employees areable to grow will result in companies that are able to attract employees who have abundant
knowledge and play active roles. Based on this conviction, we w ill retain affirmative action for
women in t he f uture and provide support for women, while taking steps to bu ild workplaces
where women can participate and advance without gender consciousness.

-157-

Labor Affairs Department
Masako Tezuka

Health and Productivity Management
Materiality
Related ESG : $Employee well-being: Healt h and productivity
management'1, Management approach'1, Initiatives

Management approach

Policy and approach
Our group believes that investing in t he healt h of employees and vibrant workplaces where employees can work wit h motivation w ill leadto long-term growth for the company.
To create workplaces that are comfort able places to work and that take employees' health into account, w e are advancing initiatives for theoccupat ional safety and health underlying such workplaces. From FY2020, we have undertaken healt h and prod uctivity management t hat
strategically implements hea lth management considered from a managerial perspective.
Until now, the company and t he health insurance association have cooperated in supporting health. To continue those activit ies and topositively and systemat ically undertake even more health and productivity management, we built a syst em for its promot io n andformulated the TOYO BO Health & Productivity Management Declaration that was announced by the President in March 2020.
• Initiatives for occupational safety and health< TOYOBO Health & Productivity Management Declaration >Under t he group's corporate philosophy, Jun-Ri-Soku-Yu (adhering to reason leads to prosperity), we aim to become a com pany
which achieves sustainable growth.
We believe that in order to ensure strong, sustainable growth, we need the capabilities, effort, and energy of every employee, andthat t he growth of t he group is linked to the j ob satisfaction of our employees and t he feeling that they and t heir families arebeing enriched.
Health is t he source of our employees' energy and effort, and as a group we recognize t hat actively working to maintain andimprove em ployee healt h is an important management issue. At the same time, we believe t hat t his initiat ive will cont ribute torealizing a sustainable society.
It is also important that employees themselves realize the import ance of t heir health.
Therefore, we declare that we w ill actively engage in health and product ivity ma nagement.
Ikuo Takeuchi
Representative Director, President, and CEO
April, 2021

-158-

Key measures under the TOYOBO Health & Productivity Management Declaration
1. Initiatives for raising employees' hea lth awareness: education and t raining
2. Initiatives for improving employees' lifestyle habits: exercise, diet , support for quitting smoking, et c.
3. Initiatives for strengthening mental health, including improvement measures for high-stress employees and workplaces

Structure
Health management system
Aiming to positively and systematically address health and productiv ity management, Toyobo g roup is working on the above prio rity
measures in cooperation with the Labor Affairs Department, occupation physicians/ med ical care nurses, and healt h insurance union under
the Executive Officer supervising the HR Department, who serves as Chief Health Officer (CHO), w hile also hearing opinions fro m labor
union.

Health andproductivity
promotion
structure

Health management strategy (strategy map)
We have posit ioned health and productivity management as one of our management strategies. Under our "Sustaina ble Vision 2030"
announced in May 2022, we will work to solve issues, especially those related to "employee wellbeing" through t he health and productivity
management and contribute to the creation of a "company with pride and fulfillment" where employees are healthy, can play an active rolew ith peace of m ind, and can grow. Specifically, as an indicator, we aim to achieve an engagement score of 70% or hig her (target for
FY2031). To achieve this overall health and productivity management indicator target, we are organizing t he linkage of "management
issues to be solved ", "expected effect s", and "specific initiatives" throug h monthly meeting bodies for the promotion of healt h andproductivity management under t he above structure.

Ta rgets and KPis
< KPI and result >Initiative

KPI

Target(FY2026)

Maintain people-friendly work
enviroments (Promote health)

1. Certified as a top 500 for Outstand ing
Health and Productivity Management

Obtain /Maintain

Result(FY2023)

Certified as a top 500 for Outstanding
Health and Productivity Management

We set targets and check our performance over t ime for various ind icators related t o health management. By analyzing quant itative data,
we are able to understand our health issues and use the information to solve t hem.

-159-

Initiatives
In the area of health and productivity management initiatives. we organize and analyze issues from mu ltiple ang les. including healthcheck-up results and the use of scoring reports and index data over t ime in cooperation w ith insu rers. to put measures into pract ice.
We respond every year to the survey of health and product ivity ma nagement by the Ministry of Economy, Trade and Ind ustry, and use thefeedback we obtain from it to conduct annual reviews of our init iatives, which we t hen connect to our activities in the following fiscal year.
Through this continuous effort. issues calling for priority t reatment have come to light. We will resolve t hese issues t hrough health andproduct ivity management and be a company where people feel pride and motivation. which w ill ultimately cont ribute to the enhancementof corporate value and productivity.

Measures undertaken
In addition to the initiatives we have undertaken since beginning health and productivity management. we are implement ing the followi ng
as initiatives to improve employees' lifestyle habits.

First Certified as a top tier company for Outstanding Health and Productivity Management
Toyobo was certified as a t op t ier company for Out standing Health and Productivity Management, which is given to t he top-ranking
corporat ions in the "Cert ified Health & Productivity Management Outstanding Organizat ions Recognition Program" jointly coducted by the
Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi jointly.
Toyobo group established the "Health and Prod uctivity Management Declarat io n" in March 2020 to promot e health and productivity
management. Under t he Chief Health Officer (CHO), the Executive Officer controlling supervisor of the HR Division, the Labor Affairs
Department, the occupational physicians and nursing professionals and t he healt h insurance association wo rk in close coord ination toenhance healthca re consciousness of employees, improve their lifestyle habits and strengthen mental healt h-care m easures as part ofpriority programs. As a result, the company has been certified as a Hea lt h & Productivity Management Outstand ing Organ ization since
FY2020.
In FY2023, we enhanced our employee awareness activities, including a smoking cessation seminar to explain passive smoking andnicotine dependence. an online smoking cessation clinic. and seminars to promote understa nding of healt h issues unique to women. In
addit ion, information on the implementation of healt h management was d isseminated through the publication of hea lth indicators andindices such as the smoking rate and percentage of habit ua l exercisers over time on the company website.
We w ill continue aiming for "Top 500" certificat ion, and will f urther enhance our corporate value through greater strengthening andpromotion of healt h and product ivity management by means such as actively working to maintain and improve employee healt h.

2023

fit~iflI~~~5*J...
Health and productivity;t-'71'1--500

Activities to raise awareness among employees
It is important for all employees to review their lifestyle habits with an awareness of protecting and build ing their ow n health. and tocontinuously put initiatives for better living into practice.
Toward t his end. we hold sem inars to encourage employees to give thought to their own health and undertake health promotion fromtheir individual standpoints.
From 2022, we have set the first Thursday of every month as Health Day and dist ribute health seminar videos once a mont h.

-160-Implementation in FY2023
Number of times

Theme• Seminars on non-smoking
Seminars3• Seminars on women's issues• Seminars by occupational physicians on lifestyle-related diseases• Prevention of infectious diseases

Streamed seminars

3• Exercise and diet
• Women's health issues

Improvement of employees' lifestyle
As the new coronavirus outbreak has revolutionized working styles and lifestyles, forcing various restrict ions, we consider mental andphysical care to be a top priority. We will improve lifestyle habits while implementing measu res for exercise habits, smoking cessation, andproviding educat ional opportunities (e.g., holding seminars) to improve literacy.
In FY2022, we created and deployed our own proprietary application, "Tsunagaru Kenko TOYOBO Zukan," which can be operated with asmartphone. This application was created by the members of a subcommittee of t he "KAERU Project," an internal organizational climate
reform project, while incorporating a wide range of opi nions. The first installment of the "Flower Series" is an applicat ion that allows
employees to freely interact w ith each other by taking pict ures of flowers they see on their walks and posting them w ith comm ents.
We hope that this application will help employees make exercise a habit and connect with other employees, creating a positive chain of
events.
In FY2023, in conjunction wit h seminars on passive smoking and nicotine addiction, we provided information on online outpat ient clinics
for smoking cessation and implemented measures to partia lly subsidize the cost of outpatient smoking cessation t reatment for those who
successfully quit.

Support for employees' health maintenance and promotion through health checkups
Toyobo aims to have a (actual) 100% rate of healt h checkups by industrial health staff at each business site.
Our health checkups for lifestyle-related diseases, cancer, and other ailments are more comprehensive than required by law. In
cooperation with the health insurance association, we conduct cancer screenings for any staff (employees and t heir dependents) who wantthem, and we are working to ensure early detection and treatment of d iseases including in family members.
Our occupation physicians check the results of hea lth checkups for all employees, and in the event of any abnormal find ings, meet withand provide health guidance in cooperation w ith nursing professionals. If necessary, they also provide exam inations and treatment at
clinics, and referrals to specialized medical institutions. We also support t he ma intenance and improvement of employee healt h byproviding healt h consultation structures and environments. Furthermore, the health insurance association actively provides specific healthguidance on approaches to reduce risks faced by high-risk patients.
We improve structures and environments for health examinations and consultations, to support the maintenance and improvement of
employee health.

-161-

Improvement of implementation rate of specified health guidance
As an example of improvements made w ith respect to a specifi c issue, by undertaking a variety of measures and cooperating with insurers
on strengthening t he implementation rate for specific health guidance to raise awareness concerning exercise and eating habits, weachieved a decline in the number of persons targeted for specific health guidance by approximately 2% between FY202 1 and 2022.

Restricting long working hours
To curb long working hours, in management meetings we examine measures to prevent recurrence when employees (including
managerial staff) anywhere in the company exceed certain working hour standards for three consecutive months*. Managem ent andemployees at each business site have set a specific cutoff point, and keep tabs on work that leads to excessive hours in order to promote
their reduct ion . We have also set the number of employees doing overtime as a KPI, and have set a reduction of 20% as a target.
Management and employees at each business site have designated a no overt ime day, and we encourage employees to go home on tim eso they can enjoy personal and family time.
Furthermore, in order to prevent mental health issues caused by long working hours, we have put in place stricter standards t han legally
mandated, and we hold interviews w ith occupation physicians.
* Over 80 hours overtime in two consecutive months + over 45 hours in the third month

Mental healthcare initiatives
Toyobo provides annual mental health lectures to managers in order to increase their awareness and understand ing of mental healthcare.
Individual consultations are also given by industrial health staff (one to five) at each business site. We also provide personalized support toemployees suffering from high levels of stress, based on the results of a stress checkup. We are undertaking actions such as providing
feedback to managerial staff on the results of FY2023 group analysis.
With regard to mental healthcare when telecommuting, we have add ressed the importance of self-care and so-called "line care," careprovided by managers for the well being of the employees and measures to im prove the workplace, issuing information so as to maintainand support our employees' physical and mental wellbeing.

Health care support for expatriates
The number of group employees posted overseas is growing year by year in line with our accelerating global business expansion. For
employees and their families preparing for overseas assignments, we provide medical checkups, vaccinations recommended by the
Ministry of Health, Labour and Welfa re (hepatitis AB, measles/rubella, teta nus, etc.), local medica l system support in cooperation w ith
medical assistance services, information on travel destinations, and more. We recognize the impo rtance of the world's three major
infectious d iseases (tuberculosis, malaria, and HIV/AIDS), and will enact necessary measures against these as ou r business expands.
We provide follow-up med ical checkups after t raveling to the dest ination and support them in maintaining their health stat us wh ile
engaged in thei r work. We have a system in place to support the health management of expatriates and t heir families throughcollaboration among various internal organizations.

Countermeasures against COVID-19
As countermeasures against COVID-19, we are encouraging working from home and staggered working hours, ensuring employees
maintain social d istancing when working in the office, and provid ing information about infectio n prevent ion, among other m easures.
• Safety, Disaster Prevent ion

To our busin ess pa rtners
At our company, the labor department, healt h insurance union, and nursing staff play a central role in promoting healt h management incooperation with each other.
We may be able to help you with our efforts. We would like to support our business partners in their promotion of hea lth managem ent as
well.

If you are interested in our efforts, please contact us at the following address for information exchange, and so on .
For inquiries, please contact us at:
Human Resources Department
Health Management Secretariat
kento_miyazaki@toyobo.jp-162-Social Contribution
Materiality
Related ESG : E S
Partnership: Social contribution-.J,, Management approach-.J,, Initiatives

Management approach

Policy and approach
The TOYOBO Group Charter of Corporate Behavior declares that "we wi ll actively participate in society and contribute to its development asa good corporate citizen." It is our belief that fulfilling our responsi bilities as a good corporate cit izen and making investments for the
future is one way for us to put our corporate principle of "Jun-Ri -Soku-Yu (Adhering to reason leads to prosperity)" into practice.
To build and support a better society as a member of that society, we w ill engage in the promotion of science and techno logy,
environmental conservation, and communication w ith local communities, and will incorporate w hat we gain from these activit ies into our
corporate activities.
Through our website and ot her means. we will communicate information that allows people to learn about our group's thinking and its
businesses.

Related policies:• TOYOBO Group Charter of Corporate Behavior: 8. Social contribution• TOYOBO Group Basic Policy on Health & Safety• TOYOBO Group Fundamental Policy on the Global Environment

Structure
Based on the policies above. each business location works to communicate with its surrounding area.

-163-

Initiatives

Cultivating future generations
In order for our society to continue developing into t he future, it is vital that we foster t he human resources who w il l lead t hat future.
Toward that end, our group is undertaking promotion of science and technology through research g rants and other support via t he Toyobo
Biotechnology Foundation. We also offer internships to let st udents gain an image of work through actual workplace experiences.

Supporting science and technology
Toyobo group is contributing to the development of science and technology by su pporting young researchers through our foundation. We
are also contributing to the development of technology, industry, and society by part icipating in industry-academic-government
collaboration.

A foundation that contributes to t he biotechnology field by supporting young researchers
Advancing science and technology is important for Japan to develop socially and economically into t he fut ure. Toyobo group began tofocus on the life science such as biotechnology fields when these fields were still new t o Japan. In order to encourage scient ific research inthe biotechnology field and to contribute to society through the results of this resea rch, in May 1982 we celebrated the 100th anniversaryof the company by establishing the Toyobo Biotechnology Foundation (hereafter "the Foundation") and since then, we have been ho lding
study groups and symposiums, and providing research subsidies. Since t he esta blishment of the Foundat ion to the present day, its efforts
have been supported by academics working on the front li nes of this field, many of whom have served as directors and advisors. In recent
years, the biotechnology field has grown compared to the t ime when t he Foundation was established. We are concentrating activities on
research su bsidies for those studying abroad, as support for young researchers who will shoulder the f uture of the field.
One feature of t he Foundation's research grants is no restrictions on t he use of the f unds.
This is because we want to provide comprehensive support for young researchers w ho are venturing overseas for t he first tim e. From t hereports provided by the researchers we sponsor, we can see that they are vigorously engaging in t heir research activities.
In FY2023, six young researchers were gra nted long-term research subsidies totaling 33 m illion yen, w ith a presentation ceremony held on
December 13, 2023. With the current fiscal yea r included, a total of 220 researchers have received long-term resea rch subsidies. Recipientsare active on the front lines of the biotechnology and education fields and some of t hem want to contribute to t he cult ivat ion of the next
generation of researchers by serving as directors and advisors of t he Foundation.

Recipients of FY2023 long•ter m research subsidies and other people connected to the Foundation-164-

58th L-GRANT Research "Toyobo Polymer Science Award" selected
On February 22, 2023, t he Toyobo Polymer Science Award ceremony was held at t he Research Center.
Using t he mechanism of the Leave a Nest Research Fund operated by Leave a Nest Co., Ltd.* 1 , this award was established as an open
research grant system in FY2022 to support the research fields and personnel sought by Toyobo group. The current fiscal year marked thesecond year of the awards.
Based on our desire to change t he world w ith people who passionately advance steady materials research rather than just the applied
development that is often req uired by competitive research funds in recent years, we set basic and general-purpose research on polymer
materials as t he target field . There w ere over 40 entries, surpassing the 30 received in the previous fiscal year, and two were selected for
the Toyobo Polymer Science Award and one for the Encouragement Award.
The three award w inners were invited to the Research Center lectu re room for presentations on t he award-w inning themes and a Q&A
session w ith the many Center members in attendance, along with t he awarding of letters and plaques of commendation. A tour of t he
CPntPr ;inrl ;i rPCPfltioo flilrty f 1irthPr rlPPflPOPrl thf> Pxrh ;in~Jf>S.

Award winners and our compa ny's concerned
personnel

Support for initiatives such as the Shiga Tech Planter R&D startup support program and the Shiga Junior Research
Grant next generation cultivation project through the Shiga-based Growth Business Identification and Cultivation
Consortium
The Shiga-based Growth Business Identification and Cultivation Consortium (hereafter "the Consort ium") is an industry-academ icgovernment collaborative organization that aims to encourage industry in Shiga and revitalize the reg ion by creating a framework forgenerating a succession of industries that leverage the prefecture's strengths and help them grow. As Toyobo group has a Research Centerand t he Otsu Pharmaceuticals Plant in Shiga prefecture, we support t he aims of the consortium and we have been a partner com pany of
Shiga Tech Planter, an R&D startup support program for cult ivating t he next generation of researchers, engineers, and entrepreneurs, andthe Shiga Tech Plan Gran Prix, a business plan contest run by the program, since the start. We have been a partner of the consortium
lead ing t he "Shiga Junior Research Grant" since its inception, which aims to support the research activ ities of junior and senior high school
students in Shiga Prefecture. The Consortium supports the Grant aiming to develop human resources w ho will be leaders in the creation of
next-generation industry.

The Toyobo Prize for "DAC PLA" at the 8th Shiga Tech Plan Grand Prix
On 29 July 2023, the "8th Shiga Tech Plan Grand Prix" was held at the Otsu Prince Hotel in Otsu City, Shiga Prefect ure, as an event of 8t h
SHIGA TECH PLANTER.
This t ime, the Toyobo Prize was awarded to Behomal Co., Ltd . for the development of COz adsorption/desorption plastic " DAC* PLA".
Biomass-derived COz adsorption/desorption materials are kneaded into plastics and used in tableware and interior decorations to absorb
COz from the atmosphere. I deas such as releasing the absorbed COz during washing and drying and using the recovered COz to promote
the growth of planter plants were presented.
The Toyobo Prize was awarded in recognition of the fact t hat COz emissions reduction is a major issue for our com pany and t hat t heproposed solutions to social issues based on the fusion of biomass materials and plastic molding and processing technology are aligned
w ith our company policy.
* DAC (Direct Air Ca pturing): A technology to reduce CO 2 concentration by directly capturing CO2 in the atmosphere. La rge-scale demonstration fac ilit ies have already begun
operating in countries around the world.

-165-

Participants

Toyobo Pr ize was awarded.

The "Sth Shiga Junior Research Grant, Results Presentation " was held
On February 11, 2023, t he 5th Shiga Junior Resea rch Grant Results Presentation, hosted by t he Consortium for Discovery and Developmentof Growth Indust ries from Shiga, was held at Collabo Shiga 21 in Otsu, Shiga Prefecture. A member of our Corporate Research Center w ho
is also a third-term student of the Mirai Jinzai Juku. part icipated as a j udge.
Although research was suspended amid t he COVID-19 pandemic, t he schools' students delivered exciting presentations based on
painstaking resea rch, seeking answers to "w hy " questions inspired by t he activities of their sen iors. A poster session was also held, withj unior high and high school students holding wonderful discussions in front of the posters.
The Toyobo Prize was awarded to Moriyama Municipal Moriyama Junior High School for "Proving t he effectiveness of waterweed as afert iliser using hydroponics".

Award winners and our compa ny's concerned
personnel

Internships
We provide an internship program that lets students deepen their understanding of work, companies, and society through on-site working
experience.
Our one-day course for office work-related posit ions is a program that let s interns gain an image of work t hrough experiences such as
sales staff work and round-table discussions with our employees. Our 3- to 4-day course for eng ineering-related positions lets interns
interact with eng ineering-related employees at our business sites and laboratories and experience design and R&D work involving
production equipment.

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Contribution to local communities
As a manufacturer of materials, Toyobo group provides a variety of information for the peace of mind of local communities and engages in
educational and awareness-raising activities for residents. We undertake activit ies t hat support the creation of flourishing tow ns and cities,
advancing toget her wit h communities as a good corporate cit izen.
Toward t hat end, all of our business sites actively participate in cultural events to contrib ute to the vitalization of communit ies and holdopen house activities t hat let residents and employees' families learn about our group. Our business sites also work to employ local humanresources for the vitalization of regions where we operate.

Visiting lecture for elementary school students to learn in a fun atmosphere(Toyobo Packaging Operating Department)
On September 13, 2023, we cond ucted a visit ing lect ure entit led " How plastic films work" at t he private Teikyo University Elementary Schoolin Tokyo, Japan.
We introduced our business to 23 first grade elementary school students and explained in an easy-to-understand manner t he types andfeatures of plast ic films, especially the functions that only plastic films can perform. The students experienced t he difference between
straight-cut and regular films by cutting w ith their hands.
After receiving an explanation of "why it is better to cut straight," the students made their own o riginal bags using st raight -cut fi lm . They
enjoyed learning about plastic film, with comments such as, "I want to ma ke the same t hing at home," and "It was so much fun, and I wantto take the lesson again."(A similar lecture was held at Kouga i Elementary School in Tokyo in October.)Now in its fourth year. t his prog ram focuses on teaching classes t o lower elementary school students. The classes provide children w it h an
opportu nity to learn about the functions and roles of plast ic films in a fun at mosphere t hrough hands-on experience and workshops.

Visiting lecture at Teikyo Un iversity Elem entary School

Introducing our company history to High School at Komaba, University of Tsukuba, second-year students researching
the spinning industry of the Meiji period(Toyobo General Administration Department)
On May 16, 2023, five second-year students from High School at Komaba, University of Tsukuba, visited o ur main office t o interview
General Manager of the General Administration Depart ment.
Students in the high school's Comprehensive Exploration Time class set their own topics and conduct small-grou p research in t he Kansai
area . Choosing the spinning industry in the Meiji period as t heir topic, the five visitors had an interest in our com pany, the predecessor ofwhich was the spinning company Osaka Boseki.
General Manager explained the ideas of Eiichi Shibusawa, t he founder of Osaka Boseki and our company. The students asked questions
including why Osaka Boseki had an adva ntage over other spinning companies, why Japan's spinning industry was able to develop rapidly,
and w hat Toyobo intended as it branched out from spinning into related fields.

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On the following day, May 17, students were taken to
Mengyo Ka ikan, a cotton industry hall in Chuo-ku,
Osaka.

"Machi-Zemi" organized by the Tsuruga Chamber of Commerce and Industry: site tours conducted(Toyobo Tsuruga Research and Production Center)
On March 3, 2023, we conducted a plant tour under the Tsuruga Machi Sem inar* prog ram of the Tsuruga Cham ber of Commerce andIndustry.
This year, 13 general residents of the city of Tsuruga took part. After receiving an overview of t he worksite, part icipants toured t he N Room(exhibition room) and t he Tsuruga Film Plant , walking through t he premises.
Many participant s, who seemed to hold strong images of Toyobo as a company that ma kes t extiles, reported being surprised to learn how
items made at the Tsuruga Research and Production Center are in common use around them.
* Machi Seminar is a small-group free course in which store owners and companies in the city act as instructors to convey specialized know ledge and information to
pa11icipants. The project is held nationwide with the aim of building relationships of trust between business operators and loca l residents through communication in the
cou rse,Company tour by first-year students at Tsuruga High School(Toyobo Tsuruga Research and Production Center)
On November 1, 2022, we held a company tour for 29 first-year students from t he Department of Information Account ing at Tsuruga HighSchool. The students' purpose in the tour was to learn about t he faci lity's environment- and energy-relat ed init iatives. In addit ion to an
overview of t he site, they listened to a lecture on t he site's in-house power generation and on energy use around t he world. The students
showed g reat interest, asking questions such as why t he site requires in-house power generation.

Company tour by the Kotobuki Class at Nishi Kominkan civic hall(Toyobo Tsuruga Research and Production Center)
On October 11, 2022, the Tsuruga Resea rch and Production Center received a visit by 51 members of the Kotobuki Class, a prog ram ofcourses and classrooms held for elderly residents in the Nishi district of the city.
The visitors tou red the exhibition room "N Room" and on-site buses, and learned about t he products and the scale of the site. Even lo ngterm residents of Tsuruga commented that they had n't had a good idea of what was being made at t he site, and were finally able to find
out.

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"Career Passport" visiting lecture for elementary school students to learn in a fun environment(Toyobo Packaging Operating Department)
On September 14, 2022, we cond ucted a visiting lect ure entit led "The Role of Plastic Films and Environmenta l Responses" was held at theprivate Teikyo University Elementary School in Tokyo. Japan, as one of the "Career Passport ,.• programs.
We introduced our business to 24 second g rade elementary school students and explained in an easy-to-underst and manner the types andfeatures of plastic films, especially t he functions that only plastic films can perform . In addit ion, the student s experienced peeling off themulti-layered films and conducted an odor leakage experiment using d ifferent materials, and at t he end of the session, we called for"recycling instead of littering after use."
During the peeling experience, although the students strugg led to peel off the film, t hey were able to experience how mu ltiple layers offilm are combined to form a single bag. The students said, "I want to try this with other bags for snacks," and "I w ill teach this to mymother back home," and enj oyed learn ing about plast ic films.
(A similar lecture was held at Kouga i Elementary School in Tokyo in October.)* The "Career Passport" is a portfolio designed to enable students to self-evaluate their own transformation and growth by reviewing and reflecting on their own learning
status and career development through va rious ca reer education-related activities from elementary school to high school, w it h a focus on classroom and homeroom activitiesof special act ivities and back and forth with each subject.

Visit ing lecture at Teikyo University Elementary SchoolStudents experienced smell differences in an odor
leakage experiment.

Visiting lecture on technology related to semipermeable membranes, and science careers(Toyobo Corporate Sustainability Department, Environmental Solutions Operating Department, Iwakuni Membrane
Plant)On September 3, 2022, we conducted a visiting lecture for 23 students of Kobe Ryukoku Senior High School's Advanced Global Science
Course on technology related to semipermeable membranes and science careers.
In the lecture t itled "Osmosis Phenomenon with Semi permeable Membranes," the lecturers explained t he phenomenon of osmosis andthe function of sem i permeable membranes using experimental equipment and introduced a seawater desalination plant and thesemipermeable membrane man ufacturing process in operation in an area w here water is scarce. The students experienced how water is
extracted from seawater using semi permeable membranes by using our "Aqua Hum Hum" reverse osmosis experience machine. In thelatter half of the lecture, as part of their career educat ion, the lect urers introduced how they became interested in the field of science, t heir
student life, work at t he company, and experiences overseas.
In a cordial atmosphere, students listened to the lecturers' explanations w ith an enthusiastic gaze and asked questions to them during
breaks and after lecture. It was very impressive to see t he students pedaling the "Aq ua Humuhu mu" pedals w ith great effort and laughinghappily.
Students who took t he lecture commented, "I had been looking forward to the lecture and was 'excit ed' the whole t ime". "It gave me achance to imagine what kind of company I w ould like to work for in the future." "I t hought Toyobo is a wonderful company t hat cont ributes
to the environment and the world."
I t was also a very good opportunity for our company members w ho participated in the visiting lecture. We w ill continue to create learning
opportunities wit h the students who will lead the next generation.

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Held "Summer Vacation Junior Science Class"(Toyobo Iwa kuni Production Center)
On August 5, 2022, we held "Summer Vacation Junior Science Class" j ointly with Yamaguchi Indust rial Promotion Foundat ion, inviting
elementary and junior high school students from Yamaguchi Prefecture.
Yamaguchi prefecture holds "Summer Vacation Junior Science Classes" at various locations in t he prefectu re, asking universities andcompanies in the prefecture to hold these classes for the purpose of encouraging the development of human resou rces in the sciencefield. l waku ni Production Center also agreed w ith this program and held t his class.
There were many more applicants than the maximum number. On the day of the event, 19 elementary and junior high school students andtheir parents participated in the class. During t he experimenta l experience of osmosis using a semipermeable membrane, t he children
seemed relaxed thanks to the gentle and approachable talk of our employees w ho participated as instruct ors. Instructors, children, andparents cooperated w it h each other as they conducted the experiments, bringing the venue together. After the science class, we received
many pleasant comments from the participants, such as "it was f un," and "I am glad I could make more friends.

Click here to investigate our past activit ies regarding cont ribut ion to local communities.
• Activities in the past-170-

Governance➔Tax Affairs Policy

ESG Performance Data

➔

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Corporate GovernanceMateriality
Related ESG : G
Governan ce'1, Management approach'1, Structure'1, Progress in system enhancement'1, Outside Director message'1, Overview of boards and committees'1, Officer compensation systemII'1, Targets and KP!s

'1, Evaluating the effectiveness of the board of Directors'1, Cross-shareholdin gManagement approach

Policy and approach
Based on the corporate philosophy "Jun-Ri-Soku-Yu," the company believes t hat its purpose is to contribute to solving social issues throug hits proprietary technologies after ascertaining these issues from a long-term perspective.
The company, to respond to t he changing times and enhance sustainable corporate value in t he future as well, has established t he policiesof (1) ensuring timeliness and accuracy in decision-making, (2) ensuring tra nsparency in management, and (3) emphasizing fa irness, andw ill work to appropriately collaborate with all stakeholders, such as shareholders. Furthermore, by carrying out its fiduciary responsibility
and accountability to shareholders, the company w ill ensure t he effectiveness of corporate governance and continually work on its
im provement.
• Corporate Governance Report-172-

Structure
Toyobo is a company with Board of Corporate Aud itors and, under t his governance system, has adopted t he executive officer system. In
the execut ive officer system, which is defined in our Articles of Incorporation, t he Board of Directors oversees the business execut io n of
executive officers. Under Toyobo's governance framework, a clear separation is made between t he role of the Board of Directors- w hichoversees decision-making and performs management oversight- and the executive officers who are in charge of business execution. Thissystem enables rapid decision-making and efficient business execution.

Corporate governance structure (as of June 2023)

OutsideNommat,on andCompensation Advisory
Committee

tttting Auditor
Consultation

Reporting] o utside directors (67%) I
Chitir

Repo11ing

President ,.____,_.___;ng_ _ _~ - - - - - - ~Board of Managing Executive Officers
and Controlling Supervisors

Corporate Planning Committee
Financial Control Committee

Board of Executive Officers
Business
execution

Cooperation

Cooperation

Sustainability CommitteetR;sk Management Comm;nee

Climate Change and Btodiversity Comminee

Functional

Compliance Committee
Internal
aud1t;n9Internal Aud it Department

organization
Internal auditing
Auditing

Group Companies
Auditing

Each Group Company's
Corporate Auditors

Composition of the Board of Directors■ 0-3 years:• Independent

7 membersoutsidedirectors:

Smembers■

Insidedirectors:■

4---9 years:
2 members

lOyearsor

more:
1 member

Smembers

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■ Men

d irectors:
8members■ Womendirector:
2memberOverview of boards and committees* As of June 2023
Members* and roles

Members

Board of Directors

Number of meetings held in FY2023: 18

Role

1O members. The Board of Directors is
composed of five independent outside
directors, a director who is also an
executive officer, and the company
Chair, who serves as the chair of theBoard of Directors. The number of
directors on the Board of Directors is
set to 14 or fewer.

The Board of Directors receives reportson the prog ress of med ium- and longterm themes, including from theperspective of sustainability, and thestatus of business execution in eachbusiness, and conduct appropriate
supervision.
In addition, by taking our fiduciary
responsibility and accountability toshareholders into account, it works tobuild a corporate governance structurethat will enable us to sustainably
enhance corporate value.

Members

4 members, including 2 independent
outside corporate aud itors.

Role

The Board of Corporate Auditors
attends the Board of Directors
meetings and other important
meetings, states opinions whennecessary, and audits the execution
performance by directors t hroughaud its of each department's operation.
KPMG AZSA LLC has been appointed to
conduct accounting audits required
under Japan's Companies Act. The
Board of Corporate Auditors receive
reports on auditing plans and auditing
results from the account ing auditor,and meet w ith them to periodicallyexchange information. Information is
also exchanged with the Internal Audit
Department, which monitors theeffectiveness of internal control.

Board of Corporate Auditors

Number of meetings held in FY2023: 15

Main issues (FY2023)- Sustainable Vision 2030
- 2025 medium-term management
plan- Business strategy and management
issues- Safety, disaster prevention, andquality initiatives- Important investment projects- Human resource development- Matters related to establishment ofjoint ventures- Matters related to crossshareholdings- Matters related to R&D- Determination of auditing policy andauditing plans- Sharing the results of operational andaccounting audits, and visiting audit
to affiliate companies- Confirmation of the content ofproceedings at Board of Directors
meetings and other important
meetings- Sharing details of discussions withboard
- Confirming important documents- Confirmation of matters related toaccounting auditor+

Members

Nomination and Compensation
Advisory Committee

3 members, including 2 independent
outside directors and the Chair. The
Nom ination and Compensation
Advisory Committee is led by anoutside director. 1 outside corporate
auditor also participates as anobserver.

Number of meetings held in FY2023: 5

Role

Based on proposals from the President,
the Nomination and Compensation
Advisory Committee deliberates basic
policies and criteria on the nominationof officers and succession planning,
and reports to the Board of Directors.

-174-- Setting of company-wide
performance targets for the next
fiscal year
- Progress of the CEO and nextgeneration managerial humanresources development plan
- Recommendation of candidates for
Directors and Corporate Auditors;
appointment of management teamMembers

12 members, including those also
serving as directors. The Chair and 2
inside corporate auditors may also
participate and state their opinions.

Role

The Board of Managing Executive
Officers and Controlling Supervisors
deliberates in advance on matters to
be resolved by the Board of Directors,
and determines matters related tobusiness execution entrusted by the
Board of Directors. The Corporate
Planning Committee and the Financial
Control Committee have been
established under the Board ofManaging Executive Officers andControlling Supervisors to manage
risks related to management.

Members

13 members. The Sustainability
Committee consists of the Chair andthe members of the Boa rd ofManaging Executive Officers andControlling Supervisors, and thePresident serves as chair. 2 insidecorporate auditors may also participate
and state their opinions.

Board of Managing Executive Officers
and Controlling Supervisors

Number of meetings held in FY2023: 32

Same issues as the Board of Directors+

Sustainability Committee• Progress report on materiality and
KP!s• GHG emission reduction targets• Nature-positive

Number of meetings held in FY2023: 4

Role

The Sustainability Committee reviews
the progress of company-wide
sustainability activities each quarter.
and discuss new issues to beaddressed and company-wide risks.
The content of the Committee's
discussions is reported to the Board of
Directors on a regular basis.

Members

19 members. The Corporate Planning
Committee members are selected fromeach specialized field and businessdepartments. The Director in charge ofplanning serves as chair.

Role

The Corporate Planning Comm ittee
provides opinions and deliberates froma professional and managerial
perspective on strategic matters,
including important capital
investments, new businesses, newcompany establishment, technology
introduction, and business alliances,
based on the entrustment of the Boardof Ma naging Executive Officers andControlling Supervisors. This is toimprove the efficiency of deliberations
and resolutions by the Board ofManaging Executive Officers andControlling Supervisors and to ensure
the proper approval process, including
matters concerning affiliatecompanies.

• Geopolitical risk
• Committee structure based on ISSB
and other requirements+

Corporate Planning Committee

Number of meetings held in FY2023: 8-175-• Significant capital investment
projects• Matters regarding new businesses• Matters regarding the establishmentof new companies• Other important matters(invest ments, technology
introductions, business alliances,acquisitions, etc.)• Review of major Corporate Planning
Committee matters

Members

Financial Control Committee

Number of meetings held in FY2023: 17
Role

1 Chairperson, and 4 standing
committee members.
The Financial Control Committee
pursues improving the ef ficiency ofdeliberations and resolutions at theBoard of Managing Executive Officers
and Controlling Supervisors, and theappropriateness of the approval
process by expressing opinions anddeliberating from a professional andmanager ial perspective on important
individual investments, loans,guarantees, and other matters. In
addition, it seeks to streamline thedeliberation or resolution of matters
not subject to deliberation or
resolution at the meetings, as requi redby various rules and regulations.

The following matters of individual
importance:- I nvestments and lending- Guarantees and reservations ofguarantees (including managementawareness letters)- Collateral provision for third parties

Targets and KPis
<Targets>
Toyobo group is building a fair and highly transparent governance structure t hrough compliance w ith t he Corporate Governance Code andproactive information disclosure.

< KPis and results>
Initiatives• Strengthen corporate
governance• Strengthen information
disclosure

KPis

Targets

Results (FY2023)

1. No. of meeting of the Boardof Directors I committees•

1. Disclose results

1. 23

2. Attendance rate of officers at
meetings in 1.

2. Disclose results

2. Share on the company websi
te3. Disclosure of details of
evaluation of Board of
Directors' effectiveness3. Disclose details ofeffectiveness evaluation

3. Share on the company website* Nomination and Compensation Advisory Committee-176-

Progress in system enhancement
Toyobo group has worked continuously to strengthen corporate governance.

Initiatives to strengthen corporate governance
Year

1998

2004

Initiative & objective- Established the Ethics Committee (the current Compliance Committee)
To promote company-wide compliance activities as a key element of management- Appointed one outside director. shortened the term o f office for directors to one year
To clarify management accountability by strengthening the supervisory function and shortening the term of office- Established an Advisory Board on Officer Provisions, etc. (the current Nomination and Compensation Advisory Committee)
To ensure transparency and fairness in procedures for determining officer compensation

2005- Introduced a corporate officer system and reduced the number of directors
To split the decision-making/supervisory and executive functions- Increased number of outside directors to two
To strengthen the supervisory function by multiple appointments
2015- Established an outside officer liaison meeting
Held regular opportunities for sharing of understa nding and exchange of information by outside officers only
- Established the Nomination Committee (the current Nomination and Compensation Advisory Committee)
To ensure t ransparency and fairness in procedures for nominating/dismissing directors

2016- Made an analysis/evaluation of the overall effectiveness of the Board of Directors
Will annually identify issues and make improvements

2018- Increased number of outside directors to three, raising their ratio to one third of all directors
To ensure diversity among members of the Board of Directors, as well as strengthen governance2019- Increased number of outside directors to four (adding a female director)
To further promote diversity among members of the Board of Directors- Revised t he officer compensation system (introduced compensation in the form of restricted stock units)
To offer longer term incentives and realize greater sharing o f value with shareholders

2021

2022

- Established t he Nomination and Compensation Advisory Committee
Integrated advisory and compensation advisory bodies, and improved their functionality- Increased number outside directors to five
- Review of the executive compensation system (changes in the composition ratio of compensation and KPis)

2023- Increase in the number of female directors to two-177-Election and dismissal of top management and nomination of candidates for directors
and corporate auditors
PolicyThe election and dismissal of top management members (executive officers who also serve as directors) and t he nom ination of candidates
for directors and corporate auditors are based on whether they are outstanding individ uals who have the appropriate insight for theirrespective posts, while also taking into consideration the criteria for nominating directors and corporate auditors, and are decided by t he
Board of Directors after deliberation by t he Nomination and Compensation Advisory Committee.

(1 ) Stance on composition of the Board of Directors and Board of Corporate Auditorsa) Board of Directors

The Board of Directors is comprised of the Chair of the Board, outside directors, and directors who also serve as executive officers, in orderto have a balanced st ructure with the expertise and skills necessary to appropriately provide strategic direction and made decisio ns on
im portant business operations, and the independence necessary to strengthen supervision of management, w hile also ensuring diversity
in terms of professiona l background, gender, age, etc. Based on the concepts of (1) ensuring timeliness and accu racy in decision-making,(2) ensuring transparency in management, and (3) emphasizing fairness, t he Articles of Incorporation stipulat e t hat t he Board of Directors
must have no more than 14 members, and that the rat io of outside d irectors be at least one-t hird of members.
b) Board of Corporate Auditors

The Board of Corporate Auditors comprises human resources with expertise and skills in finance and accounting as well as knowledge ofthe group's business, from t he perspective of ensuring the effectiveness of auditing.

(2) Summary of criteria for nomination, etc.
a) Candidates for directors (excluding candidates for outside directors)

Candidates for directors should have knowledge, achievements, experience, and skills as a manager, as well as a company-wide
perspect iveb) Candidates for outside directors- Candidates for outside d irectors are expected to contribute to the enhancement of corporate value and the strengthening of supervision,
such as providing business suggestions and management support- Candidates for outside d irectors must meet separately specified independence criteria for outside directorsc) Candidates for corporate auditors- Candidates for outside corporate auditors are expected to have ability to make appropriate judgments from an independent andobjective standpoint in the auditing of the performance of duties, etc.
- Candidates for outside corporate auditors must meet t he independence criteria[Reference] Independence standards for outside officers
The company has deemed that if none of the attributes in t he following items apply, the outside Director or outside Corporate Aud itor (o rthe candidate for outside Director or outside Corporate Auditor) has a high deg ree of independence from t he com pany, and there are noconcerns of conflicts of interest with general shareholders.
(1) A maj or shareholder in the company (refers to a shareholder wit h a voting rights ownership ratio of 10% o r more; t he same applies
below) or an individual who executes business for the shareholder(2) An individual who executes business for a company of which the company is a major shareholder(3) A business partner of the company for which t he company is a major partner (refers to a party that provides products or services to thecompany for which the average annual transaction amou nt for the past three fiscal years is over 2% of that business partner's annual grosssales) or an individual who executes business for that company(4) A maj or business partner of the company (refers to a party that t he company provides products or services to for which t he averageannual transaction amount for the past three fiscal years is over 2% of the company's annual gross sa les) or an individual who executes
business for t hat company(5) An individual who executes business as an employee of a financial instit ution t hat is a maj or lender to the company (refers t o a lender
for which the loan balance amount is equivalent to over 2% of the company's total assets)(6) An individual who obtains over ¥10 m illion per year in cash or other assets in profit from the company as a specialist, such as aconsultant, accountant, or attorney at law, other t han officers' compensation (or an individual who belongs to a corporation, etc., thatobtains over ¥100 m illion per year in t his matter)(7) An individual for which any item in (1) to (6) above has applied w ithin the past three years(8) A relation within the second degree of an individ ual for which any item in (1) to (7) above applies
Note: Even if none of t he attributes above apply, in some cases it may be deemed that there is no independence in consideration ofmatters such as transaction volumes at a group company of t he company or a group company of a business partner.

-178-

Procedures for nominations, etc.
The Nomination and Compensat ion Advisory Committee, comprising a maj ority of o utside directors, has been established as an advisory
body to the Board of Directors to ensure fairness and t ransparency, and is chaired by an outside director.
The Committee deliberates and reports to the Board of Directors on basic po licies and criteria for nominating officers and succession
planning, etc., based on proposals from the President.

Dismissal policy and procedures
In the event of an act of misconduct, impropriety, o r act ions suggest ing a breach of trust, or of other reasons that make t he member
unsuitable to serve as an officer, aft er deliberation by the Nomination and Compensation Advisory Committee, a decision w ill be made by
the Board of Directors on their dismissal.

Attendance record at board of Directors and Corporate Auditors, skill matrix--.._____.....,...___ _.. ..--,·--- ... -·-.. ..,_~------~------------~-~-----------------~_.__ -..

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Training programs for officers
For our newly appointed d irectors and corporate audit ors, we provide orientation concerning their roles and duties, as t hey undergo an
external t raining program upon their appointment, in order to acquire the necessary knowledge.
In addition, new ly appointed outside directors and outside corporate auditors also attend orientations regarding the company's
operations, finances and organization, and more.
They are also encouraged to cont inue participating in external tra ining prog rams and lectures to continuously bu ild on t heir managerial
literacy.

-179-

Officer compensation system
Basic policy
Toyobo's system of officer compensation is designed as follows, in line with basic policy, within t he moneta ry amou nt resolved at t he
Annual General Meeting of Shareholders.
1) Provide incentives that lead to Toyobo group's sustained growth and enhance corporate value over the longer term2) Secure highly talented management personnel
3) Set determination procedures that are objective and highly transparent
Compensation structure and levels are reviewed based upon the company's business environment, levels of em ployee salaries, and othercompanies' levels based upon surveys conducted by specialized external organizations.

Monetary compensation (including performance-based amounts)(1) Composition of monetary compensation
Monetary compensation for d irectors (excluding outside d irectors) is a fixed monthly compensation, comprising the following two
components:
1) Basic compensation
2) Short-term incentive compensation(2) Short -t erm incentive compensation
1) Short-term incentive compensation reflects evaluat ions of company-w ide performance and t he performance of department undercharge, in accordance w it h position.
- Representat ive Director and Executive Director: company-wide performance only
- Director: company-wide performance 2; performance of department under charge 1- Executive Officer (full-t ime): company-wide performance 1; performance of department under charge 22) Ind ividual compensation reflecting company-wide performance and the performance of the department under charge is calculated andis determined by the Board of Directors.
3) The major management indicator EBITDA is used as a KPI for company-wide performance. It varies between 0% and 200%, according tot he degree of achievement with respect to the target value.
4) With regard to specific target values, the Nomination and Compensation Advisory Committee is consulted. Based on its report, theBoard of Directors makes decisions.
5) Performance of the depart ment under charge is evaluated on a 5-point scale that takes into account the degree of operating income
achieved, ROA, EBITDA, and other factors in the department under charge. It varies between 50% and 200%.

Stock compensation
In order to increase incentives to sustainably enhance corporate value and to promote more value sharing with shareholders, a certain
percentage of compensation is granted annua lly as non-monetary compensation for granting restricted shares (non-performance-based,
provided in advance).

Ratio of compensation
The ratio is designed to allow incentives for enhancement of corporate value to function appropriately. For basic compensation, short -t erm
incentive compensation, and long-term incentive compensation, a ratio of 6:3:1 is set as a guideline (when KPI ach ievement is 100%).

-180-Other(1) Compensation for outside directors is to be fixed monetary compensat ion in view of t heir role and independence.
(2) Compensation for corporate auditors is to be fixed monetary compensation in accordance with their duties and responsibilities, and is
to be decided by discussions with the corporate aud itors in view of t heir duties and responsibilit ies.
(3) The Nomination and Compensation Advisory Committee, com prising a majo rity of o utside direct ors as members, has been established
as an advisory body to the Board of Directors to ensure the transparency and obj ectivity of decisions regarding compensation. The
Nominat ion and Compensation Advisory Committee receives advice from the Board of Directors and deli berates on the system, level,
and calculation method of officer compensation, in add ition to t he targets set for the com pany-wide performance evaluations form ing
part of the compensation by position. The Board of Directors makes the fina l decision on t he amount of ind ividual com pensation based
upon the report from the Nomination and Compensation Advisory Committee.

Details of officer compensation (FY2023)* Including mid-period appointments and resignations
Total compensation by type

Position

Total
compensation,
etc.

Performancebased
compensation

Basic
compensation

Non-monetarycompensation(Compensation
for granting
restricted
shares)Number of officers*

(¥mn)

(¥mn)

(¥mn)

(¥mn)

Directors (Including
outside directors)

407 (50)275 (50)

10 1 (- )3 1 (- )12 (5)

Corporate Auditors(Including outside
corporate auditors)

70 (1 8)70 (18)-(- )- (- )

4 (2)Total (Including outsite
officers)

478 (68)345 (68)

10 1 (- )3 1 (- )16 (7)

Review of officer compensation system
In fiscal 2023, the Board of Directors partially revised the officer compensat ion system based on a study of social t rends
surrounding executive compensation and appropriate incent ives to improve performance. The main points of t he review are as
follows and were implemented sta rting in July 2022.

(1) Composition of compensation
The guideline for the ratio of base compensation, short-term incentive compensat ion, and long-term incentive compensation(restricted stock compensation) will be changed as follows.
Pre-change: 7:2:1 ; Post-change: 6 :3 :1(2) Composition of short-term incentive compensation
Pre-change: Calculated by multiplying evaluations of company-wide performance and depart mental performance.
Post-change: The ratios of company-wide performance and departmental performance reflected in short-term incent ive
compensation are as follows:• Representative directors and executive directors: company results on ly• Directors: company perfor mance = 2, Performance of t he department in charge= 1• Execut ive officers (full-t ime): company performance= 1, Performance of the department in charge = 2-181-

(3) Performance indicator for short-term incentive compensation
The KPI for company-wide performance will be changed from consolidated operating income to EBITDA*, linking it to t hetargets of the 2025 medium-term management plan.

* Earn ings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is an indicator t hat indicates a company's profit level.

Ratio of compensation

Basic compensation

Short-term incentive
compensation
Reflect the previous fiscal year's
composition of short-term incentive
compensation

Long-term incentive
compensation
Com position for granting restricted
shares= 6: 3: 1

In fiscal 2024, t he Board of Directors decided to incorporate sustainability indices into short-term incentives for execut ive
compensation from July 2024 as a mea ns of pursuing perspectives including susta inable growth and Environment, Society,
Governance (ESG).

Evaluating the effectiveness of the board of Directors
In order to fu rther enhance t he functions of the Board of Directors, the company carr ied out an overall analysis and evaluat ion of theeffectiveness of the Board of Directors in fiscal 2023 wit h t he support of an external organization. An outline of this evaluation is as follows.

Method of analysis and evaluation of effectiveness(1) Target: All d irectors and corporate auditors(2) Method: Conducted a survey with approximately 50 quest ions, and provided the responses directly to an external service provider.
(3) Analysis and eva luation: The Board of Direct ors conducted t he analysis and evaluation based on reports of aggregate results from t heservice provider.

Summary of evaluation results(1) Member numbers for the Board of Directors, the rat io of internal and ext ernal members, and the Chair's management of meet ings
procedures were evaluated as generally appropriate.
(2) It was confirmed that certain results and improvements were ach ieved as a result of addressing the five issues identified previously (1)strengthened risk management including of QA and of safety and disaster prevention, 2) Initiatives aimed at medium- to long-term
themes, 3) Initiatives for succession planning and appointment procedures, 4) Further stream lining of management of meeting
procedures, and 5) Strengthening of group governance]. However, some voices viewed the improvements as insufficient.
(3) The items 2), 3), and 5) above in particular received relatively low evaluat ions, and were identified as issues to be addressed along with
the newly identified issue of reviewing our business portfolio. In addition, t he item 1) above remained an issue to be addressed in orderto make further improvements through ongoing init iatives.

Issues and future initiatives
The Board of Directors is working to improve its own effectiveness as a whole through t he following init iatives.

(1 ) Risk management including of safety and disaster prevention, and QA
We w ill further enhance the risk management systems of our group as a w hole, by means including supervision of the status of ou r
initiatives for KPis and materiality targets.

(2) Revision of our business portfolio- We w ill set this as a priority theme in our annual plans, and will take it up at t he beginning and work to enhance discussions.
- We w ill engage in a review of ou r business portfolio, w ith group companies included.

-182-

(3) Strengthening of group governance• We w ill receive reports on risk management at group companies and on ot her topics from the Corporate Business Management
Depart ment. and w ill engage appropriately.
• We w ill ensure the effectiveness of internal audit functions t hroug h means including audit plans from the Internal Audit Department andreports on their outcomes. and will work to strengthen group governance.

(4) Initiatives for CEO succession planning and appointment procedures
We w ill further ensure t ransparency and fairness by means including act ivity reports from the Nomination and Compensation Advisory
Committee.

(5) Initiatives aimed at other medium- to long-term themes (DX, human capital, environmental action, etc.)
We w ill set this as a priority theme in ou r annual plans, and w ill take it up at the beginning and work to enhance discussions.

Feature: Outside Director message

Outside Director message't,\ewill .,...rcomeou,rnfM'dia11e

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Outside Director message in the Integrate Report 2023
(247KB)

Cross-shareholdings
The company shall period ically review cross-shareholdings from assorted perspectives, such as the impact on improving medium -to longterm corporate value and economic ra tionality. and sell any stock which is no lo nger meaningful as is appropriate. On the other hand. thecompany shall enter into cross-shareholdings with key business partners when judging that the maintenance and strengthening of st able
relat ionships with the business partners will contribute to sustainable growth and enha ncement of medium-to long-term corporate valueof the company.
The Board of Directors individually reviews cross-sha rehold ings every year, including f uture business strategies and operational
relationships. and determines whether or not to cont inue holding these shares.
Also. with regard to the exercise of voting rights in cross-sharehold ings. the company deeply considers the status of the business partner
and the content of the proposals, and as needed, discusses w ith the business partner. The company thereby confirms w het her t hese
holdings contribute to the sustainable growth and medium-to long-term enhancement of corporate value of the company and its business
partner. and makes a comprehensive decision.

-183-

Attendance Record at Board of Directors and Corporate Auditors, Skills (As of June 2023)
Attendance record (attendance percentage)
FY2023Nomination
OutsideIndependent

Age

GenderandCompensation
Advisory
Committee

Chair of Each
Committee

Board ofDirectors

Board of

Nomination
andCorporate
AuditorsCompensation
Advisory

Of the experience and background required by the company, skills that are
particularly beneficial

Corporate
Management

Production/
Technology/
Development

Marketing/

Finance/

Environment

Sales

Accounting/ Society

Committee

Seiji Narahara

D

66

Men

〇

Board of Directors

18/18（100％）

5/5（100％）

Board of Managing
Executive Officers andControlling Supervisors

18/18（100％）○○

Ikuo Takeuchi

60

Men

Chikao Morishige

63

Men

18/18
（100％）〇

Hiroshi Otsuki

62

Men

18/18
（100％）

〇

60

Men

74

Men

18/18
（100％）

18/18（100％）i

Taichi Sakair(Newly appointed)

○

○

○

○

○

○

○

○

Governance/
Risk
Management/Compliance

〇

〇

〇

○

〇

○

〇

Reason for Appointment

12 years

Based on his deep knowledge of finance, accounting, and other areas, Mr. Narahara has supported the long-term reform of
the company's business portfolio, and, acting as President and Representative Director from April 2014, has led the
management of the group, including the reworking of our corporate philosophy structure and the expansion of the film
business. He has made an effort to contribute to the enhancement of corporate value. He assumed the post of Chair of theBoard & Director in April 2021, and as the Chairman of the board, plays an appropriate role in decision-making on key
matters and in the oversight of execution.

3 years

After serving in key positions in corporate planning and overseas business sites of the company, Mr. Takeuchi was
appointed as Head of the Functional Membranes and Environment Division, a position from which he set a concrete path
toward growth of the business.
From April 2021, he undertook formulation of the 2025 medium-term management plan as President and Representative
Director, demonstrating strong leadership and steering the sustainable growth of the group.

2 years

Mr. Morishige has held key positions in the fields of R&D and production technologies in the company's core Films Division,and has contributed to the expansion of the Division's performance.
He assumed the post of Representative Director in June 2021 and has played a central role in management as an assistantto the President.

3 years

Mr. Otsuki has held key positions in the company's corporate departments, including in finance and accounting, corporate
planning, and corporate communications. Since June 2020, he has contributed to the strengthening of the group's financialbase and to corporate governance in the role of Director.

0 years

Mr. Sakai has held key positions in the company's Production Technology Division and core manufacturing sites and,drawing on his abundant experience and expertise in the field of production technology, contributes to initiatives aimed at
technological innovation.

5 years

Leveraging specialized knowledge and wide-ranging insights gained as an academic expert versed in the field of quality
control, Mr. Isogai made proactive statements from an independent standpoint at meetings of the Board of Directors. He
appropriately fulfills roles expected of him by the company, including those of supervising management through vitaldecision-making and providing counsel to management, advising management in areas including technology and R&D.

IT/DX

〇

〇

Term of
Office

〇

e
c
t
o
r

Takafumi Isogai

○

○

s

Kimie Sakuragi

○

○

64

Women

Masaaki Harima

○

○

72

Men

Hiroshi Fukushi

○

○

65

Men

○

○

58

Women

62

Men

63

Men

Shoko Takase(Newly appointed)

CoTakayuki Tabo○

5/5
（100％）○

17/18（ 94％）〇

14/14（100％）

18/18（100％）

15/15（100％）○〇

4 years

Leveraging her abundant experience and wide-ranging insights in fields including corporate ethics, compliance, andsustainability, Ms. Sakuragi made proactive statements from an independent standpoint at meetings of the Board of
Directors. She appropriately fulfills roles expected of her by the company, including those of supervising management
through vital decision-making and providing counsel to management, serving as a member of the Nomination andCompensation Advisory Committee.

○〇

3 years

Leveraging specialized knowledge and wide-ranging insights gained as an attorney, Mr. Harima made proactive statementsfrom an independent standpoint at meetings of the Board of Directors. He appropriately fulfills roles expected of him by thecompany, including those of supervising management through vital decision-making and providing counsel to management,
advising management with the aim of strengthening risk management and governance.

〇

〇

〇

〇

1 years

Leveraging specialized knowledge and wide-ranging insights gained as a business manager, Mr. Fukushi made proactive
statements from an independent standpoint at meetings of the Board of Directors. He appropriately fulfills roles expected ofhim by the company, including those of supervising management through vital decision-making and providing counsel tomanagement, drawing on his high-level expertise in the bio and digital fields to advise management.

〇

〇

〇

〇

0 years

In addition to extensive experience and wide-ranging insights as a business manager, Ms. Takase possesses high-level
expertise in the IT and digital fields. The company expects that she will appropriately fulfill roles including those of
supervising management through vital decision-making and providing counsel to management.

2 years

Mr. Tabo has a long involvement in the Accounting and Control Department of the company, possesses considerable
knowledge of finance and accounting, and has a deep understanding of the management and business operations of thegroup.

0 years

Mr. Ota has a long involvement in the field of research and development, and, after serving as head of the Research Center,has held key positions in the biochemical business and in corporate planning, contributing to new business development
and global expansion. He possesses abundant experience and a record of performance as a manager in charge of various
departments, and has a deep understanding of the management and business operations of the group.

2 years

Mr. Irie possesses abundant experience in auditing and has served as a corporate auditor at listed companies.

0 years

Mr. Shinmen possesses abundant experience in auditing as a certified public accountant.

〇

〇

○

〇

r
p
o
r
a
t

Yasuo Ohta
(Newly appointed)

〇

〇

○

e
A
u
d

Akihiko Irie

○

○

66

Men

○

○

66

Men

18/18
（100％）

15/15（100％）

〇

〇

〇

〇

i
t
o
r
s

Wakyu Shinmen(Newly appointed)

Observer

○

-184-

〇

Outside Director message
We will overcome our immediate
issues and difficulties to achievetransformation.
Look forward to
the future of TOYOBO!

Hiroshi Fukushi
Outside Director

Helping to overcome high hurdles to transform thebusiness portfolio

Management aiming for a high position in the long term
only makes sense in a harsh business environment

Toyobo is currently undertaking the reorganization of our businessportfolio, which is our biggest management challenge. It is aprocess that any long-established company must go through inorder to grow sustainably when changes in the times diminish thecompetitiveness of the businesses it has built, resulting in pressure
to transform the portfolio. Amid weakening growth potential at someof the businesses at Toyobo, excessive importance was placed on
immediate profits, which resulted in the occurrence of serious fire
accidents and quality problems, making it necessary to review thebusiness structure. I commend the group’s highly active initiatives
under President Takeuchi, first of all for the strengthening of its safetyand disaster readiness system that is a foundation of manufacturing
as well as the rebuilding of its quality assurance system, while taking
further steps to reorganize its business portfolio. Toyobo’s Boardof Directors has five outside directors with diverse backgrounds
including business operation, research and development, andcompliance, and engages in active discussions. Among these,
I have been in charge of managing a manufacturing company,
where I experienced a major business portfolio transformation.
Transformation is not easy, but we must achieve it for the sake of thecompany’s future survival and development. I will make the most of
my own experience toward Toyobo’s transformation, and I will backPresident Takeuchi and all of the executive officers in their efforts toovercome this high hurdle.
Most recently, our operating cash flow has dropped under
the impact of the economic disturbances during the COVID-19
pandemic and soaring raw materials and fuel prices, so wemust reclaim our earning power as we advance efforts to earn
unwavering trust in our safety, disaster prevention, and quality.
Although I think all chemical manufacturers are confronting thesame issue, the difficulty of raising prices on product lines thathave undergone commoditization is precisely what makes thisa critical moment. Toyobo must change its business structure to
one that generates cash flow by optimizing product prices andadvancing the shift to high value-added products.

In order for Toyobo to be a company that continues to envision a
growth trajectory through contributing to society while responding
to changing times, there is enormous significance to ourestablishment of the TOYOBO PVVs corporate philosophy system
and Sustainable Vision 2030. In addition to the major changes
currently taking place in the global and business environments,
we are also being rushed by a wave of digital transformation (DX).
In order to weather high seas like these, it is crucial that everyone
aim for a high position from a long-term perspective, and movetoward that goal step by step.
In Japan, DX tends to be understood as the introductionof digital technology, but the genuine meaning of DX is theapplication of digital technology to the transformation of society.
In looking at Amazon or Apple, we get a true sense of the powerof advanced DX companies. DX has the kind of speed and power
in which one equation can answer everything, so industrial andoccupational structures change, renewing everything having to dowith companies, lifestyles, and work. This kind of transformation
has already started everywhere throughout industry, so thatboth companies and individuals are all under pressure to make adecision and do something about whether to ride this rogue wave
or get swamped by it.
In order to realize the TOYOBO PVVs, it will be necessary for
Toyobo to review its existing businesses and operations from theground up and to rebuild the company, and DX will be essential
to that effort. Ten years from now, Toyobo’s business portfolio will
have undergone some enormous changes. Now is the time thatmanagement must exercise its leadership to transform Toyobo into
a company that will keep growing. As an outside director, I intend
to solidly advance that transformation.

-185-

Compliance
Materiality
Related ESG : S G
Complian ce,.j,, Management approach,.j,, Structure,.j,, Compliance and risk assessment,.j,, Targets and KPis,.j,, Initiatives

-

11111

,.j,, Education and awareness-raising activities,.j,, Anti-corruption initiatives

Management approach

Policy and approach
Based upon our corporate philosophy of Jun-Ri-Soku-Yu (adhering to reason leads to prosperity), at t he core ofToyobo group's complianceactivities is the idea of "Do what shoud be done" and "Don't do what shoud not be done."
Furthermore, based on t he fundamental principles stated in t he TOYOBO Group Charter of Corporate Behavior, the g roup has summarized
the ru les that employees must follow in the TOYOBO Group Compliance Manual in a specific and easy-to-understand manner and works topromote understanding and widespread awareness of the rules among group employees.

TOYO BO Group Compliance Manual/ TOYO BO Group Employee Conduct Standards (theme
excerpts only)(21th edition, October 1, 2022)
TOYOBO

1. Contribution to a sustainable society
2. Handling of company secrets
3. Handling of personal information
4. Engaging in fair t ransactions
5. Appropriate transactions with subcontractors
6. Responsible procu rement and logistics
7. Management of export/import cargo and prevention of undeclared exports and imports
8. Rules on security trade control (export management)
9. Handling of gifts and entertainment (prevention of bri bery)
10. Handling of polit ical donations, etc.
11. Intellectual property
12. Proper accounting
13. Conclusion of contracts
14. Rules on credit management
15. Timely and appropriate information disclosure-186-16. Prohibition of insider trading
17. Respect for human rights
18. Ensuring quality and safety
19. Provision of information on products and services
20. Appropriate handling of quality data, etc.
21. Rules on research and development act ivities
22. Customer service
23. Respect for diversity in t he workplace
24. Prevention of harassment
25. Safety and health
26. Appropriate working hours management
27. Business activities taking the global environment into consideration
28. Promotion of social contribution
29. Process safety and disaster prevention
30. Duty of care on overseas assignments and business trips
31. Response to anti-social forces, etc.
32. Ensuring cybersecurity
33. Social ru lesRelevant policies and guidelines, etc.
• TOYOBO Group Human Rights Policy• Toyobo Group Personal Information Prot ect ion Policy• Our Anti-Bribery Policy• Operation and management of public research funds and efforts to address research misconduct-187-

Structure
A Compliance Committ ee is comprised of members from the Board of Manag ing Executive Officers and Controlling Supervisors. The goal isto promote group-wide compliance from a management perspective. A Compliance Promotion Committee has also been established as a
sub-committee, which considers specific initiatives, and t he Legal and Compliance Department promotes compliance throughout thegroup as a whole.

Compliance promotion cycle
Formulation of compliancepromotion action plan
(1) Promotion structure(2) Implementation plan

A

p

~

Rectification of problems(1) Implementation ofsolutions andcountermeasuresfor problems(2) Company-wide
application(3) Reflection in plan forfollowing fiscal year

C

D

Identification of problems(1) 'Compliance checks"(2) "Compliance surveys"(3) "Compliance consultation
centers'(4) "Audits by internal audit
departments"/Rule dissemination and awarenessraising(1) Revision and distribution of'Compliance Manual"(2) Read through of "Compliance
Manual'(3) Compliance study sessions(4) Compliance training by job level(5) Information dissemination
through group newsletter(6) Awareness raising throughpublication of case study reports(7) ·compliance Enforcement Month'Targets and KPis
Targets
Each and every employee complies w it h laws, regulations, and rules and acts transparently and appropriately, fostering an ethicalcorporate environment and culture.

KPls and results
Initiatives

Targets

Results (FY2023)

Increase in awareness ofcompliance

Improvement in compliance questionnaire
responses

Expansion of compliance study sessions (Managers)
and various other trainings-188-- Does the company emphasize compliance?
I feel that it does, or by and large I feel that it does:
81% (up 2% YoY)
- Awareness of "Compliance Mini Study"
I read every issue, or I sometimes read it, or I readthose articles that are of interest to me: 78%(roughly the same as in the previous year)- Compliance study sessions: Held 20 times+ video
delivered to all employees- Various other trainings: Held 38 times

Awareness and use ofcompliance consultationdesks

No. of serious legal
violations• Awareness of compliance consultation desks: 90%(up3% YoY)

Improvement in compliance questionnaire
responses• Ease of use of compliance consultat ion desks
Other than "Do not wish to use" : 92% (down 1%
YoY)*

Disclosure of no. of cases handled

78 cases handled

O violations per year

Oviolations* The questionnaire offered three responses to items: "Want to use", "Do not know; can't say either way", and "Do not w ish to use".

Initiatives
In fiscal 2023, the Compliance Committee convened twice, and the Compliance Promotion Committee convened four times. Working withthe t heme of "treating an atmosphere of raising compliance awareness," t his worked toward enhancing the effectiveness of education,
training, and preventive measu res.

Compliance consultation desks
Our group has established various consultation desks shown below as the internal reporting and compliance consultatio n desks for all
employees. These desks receive reports and requests for consultation regarding legal violations, fraudulent acts, violations of competit ion
law, acts of corruption such as bribery and embezzlement, bullying, harassment, and other issues occurring in t he workplace, and work
toward t he early detection, correction, and prevention of these issues. To ensure worry-free use of these consultation desks, we guarantee
protection of privacy (including the names of people who seek consultations), ensure that there will be no disadva ntage for employees who
consult or report, and accept anonymous requests for consultation.
We are making efforts to raise awareness of these consultation desks through means including t he d istribution of stickers with informationon the desks' usage and the publication of monthly m ini-studies.

Topics for consultation
1. Legal violations and violations of internal regulations and rules
2. Acts t hat violate the Compliance Manual "Corporate Code of Conduct"
3. Workplace harassment
4. Consultation on other compliance issues that are difficult to judge, etc.

Types of compliance consultation desks
1. Internal consultation desk
2. External professional service company consultation desk (corporate ethics hotline)
3. External legal counsel desk
4. Corporate auditor's consultation deskIn fiscal 2023, there were a total of 78 consultations, four of which were made t hrough the external compliance consultation desk. The
most frequent breakdown was communication, personal relationships, harassment, followed by Labor relations (attendance, treat ment,etc.). Depending on the contents of the consultation, we implemented corrective measures, recommended disciplinary action, provided
advice to the consulting parties, and answered their questions.

Number of consultations for compliance consultation desks (including internal reporting service)
FY2019FY2020

FY2021

FY2022

FY2023

32

35

37

62

78

-189-

Details of consultations (FY2023)
Details of consultations

Incidents

Communication, personal relations, harassment

31

Labor-management relations (attendance, treatment, etc.)

12

Violations of work rules, etc.

9

Others

26

Total

78

• Our Establishment of Complaint Handling and Internal Reporting systems• Our Initiatives for preventing harassment

Education and awareness-raising activities
Revision and dissemination of compliance manual
Based on the principles declared in the TOYO BO Group Charter of Corporate Behavior. we created the TOYO BO Group Compliance Manual,
which explains in concrete and easily understood terms the rules t hat employees should follow.
Every year we revise and d istribute t he Manual (Japanese and English versions) during Compliance Enforcement Mont h, while overseas
sites create local versions with addit ional ed its. We familiarize all employees w ith the TOYOBO Group Charter of Corporate Behavior
throug h readings of the Ma nual during t raining at workplaces.
I tems covered in t he Compliance Manual include prevention of bribery, unfair competition, illegal bidding, falsification of fina ncial records,
and other corrupt acts, along with health and safety and proper management of working hours.

Awareness-raising activities during Compliance Enforcement MonthIn fiscal 2023, we distributed video messages from the President concerning compliance.
We also use posters and digital signage to communicate information about the consultation desk for compliance.

Holding compliance study sessions (training)
In fiscal 2023, we held 20 compliance study sessions (train ing) targeting management-level personnel (genera l manager s, managers,
section chiefs,etc.) from all Toyobo business sites including headqua rters, branches, product ion centers, and at affi liate companies. We also
held them face to face in conjunction wit h remot ely as a COVID-19 measure. With members of t he Compliance Department, HR and Labor
Department, and IT Depart ment serving as inst ructors, a tota l of 1,175 employees participated in these sessions, w hich covered topics
such as management's role in preventing misconduct, preventing harassment, and cyber security. We have also created a video of thestudy sessions (training) ed ited for general employees, and d istributed th is to group companies.

Various other trainings
As part of level-specific and occupation-specifi c t raining for managers, new employees, sales
staff, and personnel being sent on overseas assignments, compliance education is provided.
In fiscal 2023, a total of 38 various t raining sessions were held.
Also, we have implemented d iscussion-type training activities for managers, focusing on
topics that are of particular import ance to the company, such as safety, quality, andcompliance, from f iscal 2022 onwards.

Seminar on gift giving and entertaining-190-

Issuing case study reports
A "Compliance Mini Study," which educates employees about cases of violation in a case study format, is issued monthly, and heads-up
reports are issued irregularly based on cases that occurred w it hin Toyobo group.

Compliance and risk assessment
During Compliance Enforcement Month held each year, we hold an anonymous questionnaire. This includes a survey on employee
awareness of compliance including of ethics, safety, qua lity, confidential corporate information, harassment, the organizational culture,and use of the consultation desks. Through this, we confirm t he status of compliance risks in t he workplace.
In fiscal 2023, we received 6,566 responses from employees, and results of t he questionnaire are disclosed to all employees. Detai ls on
individual problems and issues are shared with related departments in a form that does not identify the respondent- this proves useful inimproving the situation and preventing problems.

Anti-corruption initiatives
Our group positions the prevent ion of corrupt practices, including coercion, bribery, unfair bidding, unfair competit ion, and falsification offinancial records, as a priority issue in compliance. Regard ing bribery in particular, along with policies and regulations we have also set
guidelines t hat detail specific rules covering matters such as judgments and monetary standards when giving g ifts and entertainment. We
work to make these known through inclusion in the Compliance Manual and explanat ions given d uring meetings and t raining.
Every year, we make a report to t he Board of Directors on the status of our corruptio n prevent ion initiatives and other com pliance activit ies
to enable effective supervision. To build fair and sound business relationships with partners, we have put in place rules for the receipt ofg ifts or entertainment. These include a requirement to refuse money or the equivalent, or gifts and entertainment that exceed sociallyaccepted norms, and we have introd uced a reporting system for t he receipt of gifts and entertainment.
In fiscal 2022, as part of our company-w ide risk management activities, we implement ed a legal compliance risk assessment. Based on avariety of risk scenarios, we performed assessment in terms of the two axes of the severity of impact and t he likelihood of a risk occurring.
The results obtained confirmed t hat the level of corruption risk, including bribery, was relatively low across all Sales and Marketing
Divisions.
In fiscal 2023, there were no legal v iolat ions, admi nistrative dispositions, employee dismissals, fines, surcharges, or other outcomes related
to acts of corruption.

Related Pages• Toyobo Group Anti-Bri bery Policy-191-

Risk Management
Materiality
Related ESG : E S G
Risk Management'1, Management approach'1, Data security, privacyII'1, Business continuity plan (BCP)

Management approach

Policy and approach
As well as establishing a "Risk Management Basic Policy" that outlines our fundamental stance on risk management act ivit ies,Toyobo groupis identifying various types of risk that could pose a threat across the entire range of our business activities, and are managing risk
appropriately according to the characteristics of each risk. In an emergency, we immediately set up a task force under the instruction of
the relevan t corporate officer, and bring the crisis under control through a swift response. By putting these systems in place andconducting the init iatives, we work hard to earn the trust of our customers, the local community, and our shareholders and otherstakeholders.

< Basic policy on business risk>

1. Toyobo group has a system for identifying the location of risks and the size of their impact (visualization)
2. Allocate resources appropriately to avoid o r reduce identified risks
3. We w ill deepen and upgrade our activities by continuing to run PDCA
4. Enhance sensitivity and responsiveness to risks by each individual through information sharing, training, etc (eliminate
ignorance)
S. All employees participate in risk management activities by personalizing them

-192-

Business risks
The main risks recognized that cou ld have a material impact on Toyobo group's operating results and fi nancial position are as listed below.
The list does not include all the risks related to Toyobo group.
Forward-looking statements were determi ned by the group as of fiscal 2023-end.

< Incurred or highly probable risks>(1) Occurrence of disasters, accidents, and infections(2) Further worsening of political and economic situations(3) Inappropriate behavior or similar in details of third-party certification reg istration< Medium- to long-term risks>(4) Purchase of raw materials(5) Product defects(6) Securing of human resources(7) Climate change(8) Environmental burden(9) Information security(10) Laws. regulations and compliance(1 1) Overseas business activities(12) Litigation< Financial risks>(13) Large forex movement(14) Large rise in interest rates(15) Sharp drop in share prices(16) Impairment loss of fixed assets• Annual Financial Report and the Business risks-193-

Structure
On April 1, 202 1, Toyobo group established a Risk Management Committee headed by the President for cent ralized management of risks
throughout t he group. The committee comprises members of the Board of Corporate Executive Officers and Controlling Supervisors aswell as members nominated by t he chair. and in fiscal 2023, it convened four times.
This Risk Management Committee brings together risk management activities (identification, analysis, evaluation, and response), as w ell as
formulating risk management policies for the group as a whole. It is wo rking to strengthen our risk management st ructure by aiming tobuild effective and sustainable organizations and approaches.

Management structures and processes~ --····..

Sustainability Comm ittee-

Climate Change and Brod1vers1ty

Risk Management Committeei

Committee_.)-~-________._

Partkipation /Reporting
Partk:ipation /ReportingCorporate Sustainability Oepartmttt1tCompltance Committee

C0tpora1e Governance Depanment

ReportingFollOW-\JPl

Sorrvnaryof
activities

Risk Management and Compliance FunctionslConsidering / Expanding / Monitoring measures

Risk owners

ExecuttOO of Measurement / Self Inspection

Initiatives
As part of our management policy, we seek to be a compa ny that is able to grow sustainably by shifting from t he survival-based t hinking of
the past to a sustainable growth o rientation. We establish self-directed management act ivities appropriate to business areas and ro les,assess company-w ide risks and work tow ard t heir prevention and early detection, and, united as a group, w ill bu ild a system to advancemeasures for preventing recu rrence of risks.
As a starting point for these activities, we conducted an assessment of com pany-w ide r isks. We identified serious risks from the results ofeva luations in terms of t he two axes of severity of impact and likelihood of occurrence, and monitor these risks regularly.
In FY2023, we surveyed qualitative and quantitative information concerning serious risks at all of our group companies, confirming thatthose risks were the same as the serious risks that we identified in FY2022 for Toyobo group. We also surveyed serious risks specific tosome group companies. Any detected items that are common across the group and that require attention are reported to the Risk
Management Comm ittee, and group-w ide risk red uction activit ies are undertaken.
The Risk Management Committee also confirmed measures for the reduction of serious risks and instructed group companies to deploy
these.

-194-

Data security, privacy

Materiality
Related ESG : S G
Digital transformation

Policy and approach
Today, as significance of information increasing ly grows, how a company utilizes necessary information, advances development of
products and technologies, and develops businesses in line w ith the times is a crucial factor in the company's survival.
The improper management of information can also have severe repercussions to a company from legal and social standpoints. As stated in
our TOYOBO Group Charter of Corporate Behavior, ou r group must properly ma nage information and prevent problems involving
information security from occurring if we are to contribute to society and remain a com pany that earns people's trust.
Restated, it is necessary that every one of our officers and employees recog nizes the importance of information secu rity and theinformation assets that are the key to corporate survival, and, while effectively utilizing our information assets t hroughout theorganization, maintains and secures the confidentiality, integrity, and ava ilabi lity of those information assets. Based on this t hinking, ourgroup has declared our basic policies as follows:< Information security policy (theme excerpts only} >- 1. Management system

We w ill establish an information security management system w ith responsible executives placed at top, and will strive forproper management in line with the importance of and risks to information.
- 2. Legal compliance and internal regu lations
We w ill establish internal rules in accordance w ith information security-related laws and ordinances, countries' nationalguidelines, and other social norms, and will take strict action against violators of these rules.
- 3. Education and training
We w ill conduct education and training for our employees on an ongoing basis to ensure that information assets are usedproperly, and w ill work to enforce compliance w ith rules.
- 4. Operation of information systems
We w ill enact appropriate measures and endeavor to operate information systems stably to prevent unaut horized intrusion andthe leak, falsification, loss, theft, destruction, obstruction of use, etc. of information assets.
- 5. Handling of incidents
In the event of a problem involving information security, we w ill enact measures to m inim ize the damage, promptly investigate
the cause, and strive to prevent recurrence.

-195-

Structure
Our group has established t he TOYOBO-CSIRT, led by a CISO appointed by top management, as an organization to promot e information
security measures and activities. TOYOBO-CSIRT assesses the status of informat ion security across the company, formulates basic pol icies,
maintains management systems, and implements and supervises specific measures.
To advance measures based on the decisions of TOYOBO-CSIRT, we have established a front-line operations team . We also convene
TOYOBO-CSIRT on a regular basis to evaluate risk countermeasures, each time also reporting on activities relat ed to information security.
By expanding the activities of TOYOBO-CSIRT throughout our entire group, we will work to instill understand ing of information security
and enforce the protection of information assets, creating a state across the group in which data, security, and privacy are secured andtrusted.
Our IT and DX Planning Department , which has acquired ISO 27001 * certification, undergoes a yearly external audit based on ISO 27001 to
confirm proper operation of information security management. The Department conducts on-duty management at five business sites of
the com pany (the head office, Research Center, Tsuruga Research and Production Center, Iwakuni Production Center, Inuyama Plant : 50%
of all business sites), and also performs comprehensive management of other business sites t hrough the Department's management
system.
* An international standard for information security management systems

Toyobo group information security management structure
We assign a person responsible for information security to each department and bu ilt a company-w ide information management system
to ensure the required information security level.

President
ReportingllAppointing

Chief Information Security Officer (CISO)
Formulating basic policy and plans

Information Security Sub< ommittee (TOYOBO-CSIRT) (Chair: CISO)
Fot111ationof/iftstrl.Kll0fl0fl~1stn11ctU1~, - - - - -~

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-

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c ~.iotlon- - - , Svppo<1(0,if(1ii'ft!ia / ~lnfornwion Security Offk«(Responsible Executive Officer,

leader or each group)

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1nfo«natioo iharing and cooperacion

External organizaoon ( JPCERT/CC, police, Nippon CSIRT Association. securnyveodcx)

Targets and KPis
< Targets >Toyobo group establishes a structure to ensure cyber security as well as deepen ing employee understanding of information security andthoroughly ensuring protection of information.

-196-

< KPis and results>
Initiatives

KP!s

Targets (FY2023)

Results (FY2023)

1. No. of times information
security education provided 1

1. 22 times per year

1. 51 times

2. No. of incidents (information
leaks, seNice outages, etc.)1

2. O incidents per
year

2. 0 incidents

3. Implementation of
information security
measures2

3. Disclosure ofpromotion
contents

3. Activities being promoted, wit h
the Cyber Security Committee
playing a central role
(Share on the company website)+• Ensure cyber security• Protect confidential corporate
information, personal information,and customer information

1 Scope is TOYOBO CO., LTD., TOYOBO STC CO., LTD., and TOYOBO INFORMATION SYSTEM CREATE CO., LTD.
2 Scope is consolidated su bsidiaries (determined while monitoring situation)
Specific measures aimed at consolidated subsidiaries• Application of I nformation Secur ity Policy• Roll out of m easures to strengthen IT/OT

Initiatives
Protection of personal information
Awareness of the protection of personal information is increasing worldwide. Toyobo group is revising our internal regulations to ensurehandling of personal information in compliance with Japan's Amendments to the Act on t he Protection of Personal Information and China's
Personal Information Protection Law (PIPL).
We w ill continue to strengt hen our systems for protection of t he personal information of customers, our business associates,
shareholders, and employees.
• Personal Information Protection Policy

Promotion of digitalization
Digitalization is advancing rapidly w ith t he development of IT. Amid this change, Toyobo group is advancing t he construction of an IT
system infrastructure that encompasses the ent ire value chain and is tackling the transformation of our business style and the creation of
new solutions, making full use of digital technologies. By doing so, we seek to not o nly improve the efficiency of work but also strengthen
our provision of value to society and to customers.
We have promoted t he d igita lization of business by actively incorporating IT in our operations, includ ing streamlining sales activities
throug h IT tools, using IT to enhance manufact uring cont rol, and enhancing the efficiency of intellectual property management t hroughAl.
In April 2020, we established a Dig ital Strategy Department as a dedicated department to advance such act ivit ies on a company-wide basis.
In April 2023, we integrated systems subsidiary Toyobo Information System Create Co., Ltd. with t his department to create the IT and DX
Planning Department. This established a system that is capable of quickly responding to changes in t he business environment, w ielding
d igital technology as a competitive advantage. Jn accordance w it h our reorganized road map to achieve our vision for 2030, we will
strengthen the group's internal IT system infrastructure and advance digital transformat ion.
The IT and DX Planning Department has become a "bridge" connecting digital and business, and has begun init iatives to implement
organizational and business transformation across t he enti re company and across its businesses. All of our group companies w ill
cooperate to increase the scope and degree of utilization of digitalization.

Status of major digitalization measures- Conducted company-wide cognitive activities for in-house DX- Planned and implemented the mig ration of legacy system adapt ed to DX- Developed DX human resources and strengthened promotion structure-197-

Education and awareness-raising activities
As a part of our education and awareness-raising activities, we deliver the "Cyber Security Communication" every month to all em ployees
at TOYOBO CO., LTD., TOYOBO MC Corporation, and TOYOBO STC CO., LTD. We also conduct testing of security comprehension twice a year
to let employees self-check and reflect on their understanding of our education and awareness-raising activities.
In conjunction with Compliance Enhancement Month in FY2023, we conducted t raining for managers and disseminated informat io n at all
workplaces on the theme of informat ion security, and conducted video-based ed ucation for all em ployees.

Information security measures
Cyber attacks are intensifying year by year, often targeting overseas sites and group companies. In response, we are working to raise theinformation security measures of our domestic and overseas affiliates to t he same level as t hat of our headquarters, and to strengthen
informat ion security across the group. Specific measures include support for comm unication and improvement of policies and regulations,
support for t he introduction of education for employees and managers, implementation of targeted email attack drills, deployment andinspect ion of IT reinforcement measures, and continuous strengthening of our contact system for secu rity and incident response.
We conduct biannual t argeted email attack drills, varying the level of difficulty and subject matter each t ime, for all employees at TOYO BO
CO., LTD., TOYOBO MC Corporation, TOYOBO TEXTILE CO.,LTD., and TOYOBO STC CO., LTD. To ensure t he safety of custom er informationand our internal information, including confidential information, we cont inua lly assess new t hreats and ta ke appropriate counter measures,
including strengt hened monitoring of both IT and OT*, patching of vulnerabilities, and prevention of unaut horized intrusions.
* IT (Informat ion Technology), OT (Operat iona l Tech nology)

Protection of information in outsourcing
When outsourcing information assets containing confidential information, t he company has established outsourcing management rules
for t he following procedures: (1) evaluation and contracting of outsourcing partners; (2) monitoring of operations after t he contract has
been concluded; and (3) handli ng of information assets after the contract has been terminated .
When newly implementing operations to be outsourced (hereinafter referred to as "specified operations"), the department outsourcing thespecified operations evaluates whether or not the candidate compa nies conform to t he "outsourcer evaluation criteria" in accordance withthese rules. After the selection, the department submits t he 'outsourcer eva luation results' to the head of the informat ion security
department for approval. In addition, it is also stipulated t hat the implementation status of specified operations is t o be reg ularly evaluatedby the head of the information security depa rtment.
The "outsourcer evaluation criteria" are clearly stated in the "Information Security Policy".

Initiative participation
Under t he idea that we must address cyber attacks not only in our group companies and supply chains but across society as a whole, we
engage in active information sharing in cooperation with t he JPCERT Coordination Center and the Nippon CSIRT Association.

Business continuity plan (BCP)

Policy and approach
Toyobo group has drawn up a BCP focused on combining both "fulfillment of our responsibility to supply products as a manufact urer" and"coexistence w ith the global environment and society," and we make cont inual improvements. The BCP clarifies t he chronological sequenceof the roles and functions of each department from when a crisis occurs, t hrough t o its resolution. It also contains specific details of
preparations during normal times.

-198-

Structure
Our Risk Management Committee, chaired by the President, assesses and confirms serious risks facing our group and, in the event of an
emergency, immed iately establishes a task force under t he direction of the responsible execut ive officer to swiftly contain t he crisis
through swift response.
• Sustainability Committee

Initiatives
Response to COVID-19
In addressing infectious diseases, our group places t he highest priority on the safety and well-being of our employees and their fam ilies
and makes the protection of society and the company our primary goal, under t he conviction t hat doing so leads to business continuity.
Compared to the turmoil at the beginning of 2020, response methods and directions have become standardized to a certain extent, andwe have made agile and flexible action our policy for responding to emerging infect ious diseases.
So that the experience gained from our responses can be applied to future emergencies other t han emerging infectious diseases, we haveestablished a system to enable such response.
Moreover, t hrough the activities of the Risk Management Committee, we will enhance our resilience with respect to crises and strengt hen
the continuity of our business.

< Ensuring employee safety >• Implemented robust infection prevention and control measures< Maintaining continuity of plants and production activities >• Operation under BCP procedures• Flexible inventory and production adjustments

Response to natural disasters. etc.
In recent years, various areas have experienced significant damage from earthquakes, typhoons and sudden localized rainstorms. We havegained knowledge in the process of responding to t hese events, and aim to realize even more stable business cont inuity.
Each of our main business sites have formulated a BCP, which is reviewed at irregular intervals. We recognize t hat a pressing issue is acompany-wide BCP review in light of the recent increasing complexity and d iversification of risks.
In terms of our emergency response, we have established an emergency response process in "Risk Management and Disaster Prevent ion,
etc.," a company-wide regulation, as well as setting out the systems for verifying damage and communication and the people with overallcommand, and structures and roles for carrying out recovery work. We have also established work procedures for recovery and the orderof priority for recovery work after a disaster. In add ition, we have introduced a safety confirmation system for employees and their fam ilies.
Buildings at our plants and business sites comply with the Act on Promotion of Seismic Retrofitting of Buildings. We also check hazard
maps for the locations of ou r production plant s, and each business site has formulated response procedu res for the d isaster risks(flooding, landslides, etc.). As part of our BCP, we strive to identify and manage risk throughout the supply chain. For procurement, we arelooking to procure raw materials from multiple countries and regions, and for log istics, we are establishi ng alternat ive t ransportationmeans and routes in collaboration w ith logistics operators.

-199-

Tax Aﬀairs Policy

Toyobo Group's Tax Policy
The Toyobo Group (hereafter the Group) is committed to contributing to society by providing solutions needed by people and t he earth
while trying to improve corporate values of the Group in a sustainable manner, based on the corporate philosophy of Jun-Ri-Soku-Yu(ad hering to reason leads to prosperity).
The Group is engaged in business activities in various countries and regions around the world. Therefore, the Group has a basic policy torespect t he taxation laws of all t he international tax jurisdictions it operates in, as well as international taxation rules, and to pay taxes
properly. At the same t ime, it wil l contribute to the development of those countries and regions to fulfilI its social responsibilit ies.

Compliance
The Group properly fi les corporate tax returns and pays taxes due, observing taxation laws applied in the countries/ regions where it isengaged in business, and internat ional taxation rules. Moreover, the Group uses its Toyobo Group Compliance Manual to maintain andenhance tax compliance by heightening awareness of compliance among its employees.

Governance
The Group is committed to establishing an effective tax governance system by appointing the CFO of Toyobo Co. Ltd., as the leader of t hetask, w ith Toyobo's Account ing and Control Department sharing information with t he accou nting division of each Group com pany.
If any tax issue arises, the accounting division is required to report it to t he Accounting and Control Department of Toyobo and if
necessary, the department w ill report it to the Board of Directors.
When improvement is required, Toyobo's Accounting and Control Depart ment w ill monitor such efforts and report t he result to t he
President, the CFO, Corporate Auditors and other parties concerned.

Tax Planning
The Group undertakes legitimate and proper tax planning to improve cash flow in it s business operations, but it is implemented incompliance w ith related laws and reg ulations and not for the purpose of avoid ing tax excessively.

Managing Tax Risk
If its tax position is uncer tain, the Group endeavors to m inimize tax risks by seeking t he advice of qualified external experts and consulting
w ith the tax aut horities in advance.

-200-Transfer Pricing
In transactions w ith foreign affiliated parties, the Group observes the OECD Transfer Pricing Guidelines; establishes prices in accordance
wit h the arm's length principle and transfer pricing taxation in each country; and distributes income appropriately among t he concerned
parties. The Group also prepares proper transfer pricing documentation based on transfer pricing taxation in each country.

Relationship with Taxation Authorities
The Group endeavors to build and maintain healthy and am icable relationships w ith t he taxation authorit ies by responding to requests
from them in good faith .

-201-

【ESG Performance Data】
ESG Performance Data
Environment

0 : Assured by an independent assurance provider(FYJ

Greenhouse gas ( GHG) emissions fromScope•

Scopel. Scope2

Unit

Japan □

Japan
Overseas

GlobalTOYOBO CO., LTD.
Group companies inThousandJapan □

Japan
tonnes-Co2
Overseas
GlobalTOYOBO CO., LTD.
Group companies in

Scope2

Japan □

GHG emissions reduction rate (base: FY2014)
GHG emissions reduction rate (base: FY2021)

Japan
Overseas
GlobalGlobalGlobal..,.,_.

GHG emissions intensity per u nit of sales%/million ven
TJ
GWh

GlobalScopelScope•

Energy-related GHG

CH•
SF6
NF3

Unit

Globalco,emissions
Non energy-related co,
N2 0
GHG emissions
HFC
PFC

ThousandTOYOBO CO., LTD.

2021

2022

767

tonnes-co,

-

2023
750

752

136

131

77

81

74

844
60
904
59 1

820
54
873
588

844
58
902
646

833
67
900
641

824
69
894
638

0

99

90

55

59

54

690
18
709
117

678
21
699
101

702
16
718
120

700
19
720
113

692
20
712
112

0

37

40

22

22

20

154
42
196
26

141
33
174
28

142
41
183
26

135
49
183
26
0.2

132
49
182
26
0.9

---- ------- ---- ---- ----%

Tonnes-C0 2

GlobalEnergy consumption

2020
689

708

TOYOBO CO., LTD.
Group companies in

Scopel

2019

0

2.7

2.6

2.7

2.4

2.2

12,221

11,942

13,166

13,216

13,048
0 2,937

2019

2020

2021

2022

2023

699.7

692.5

710.3

712.5

706.9

7.7
1.1
0.4
0.0
0.1
0.0
0.0

5.8
1.0
0.1
0.0
0.1
0.0
0.0

6.3
1.1
0.4
0.0
0.2
0.0
0.0

6.1
1.2
0.7
0.0
0.2
0.0
0.0

3.2
1.2
0.5
0.0
0.2
0.0
0.0

(FYJ

(FYJ
GHG e missions throughout t he value chain

Scope3
1. Purchased goods and services
2. Capital goods
3. Fuel- and energy-related

Scope•Unit

2019

I 2020

-

2021

3,415
1,707
115

54

115

55

52

50

35
1
5

49
2
5

53
7
6

activit ies(not included inThousandtonnes-co,Global_..

-TOYOBO CO., LTD.

transoortation in relation to locistics /vear on vear)

-202-

%

-I

5,290
2,055
55
113

0

..
..
..
- ••
.... - ....•• _......
-and distribution
10. Processing of sold products
11. Use of sold products
12. End-of-life treatment of soldoroducts
13. Downstream leased assets
14. Franchises
15. Investments
Rat io of reduction in C0 2 emissions per unit of
Uil,I

2023

2,714
1,028
104

Scope 1 or Scope 2)
4. Upst ream t ransportation anddistribut ion
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Upstream leased assets
9. Downstream transportat ion

2022

6 0.6

..
..
..

-

..
..
..

-

1,288

1,209 0

2,745

143

161

207

-

-

-

-

-

-

6 0.6

6 0.5

6 5.3

• • Data from fiscal 2018 through fiscal 2020 are not publid y available due to a revision of t he calculation method since fisca l 2021.
3 changed t he calculation met hod from FY2021 (see IDEAv2.3 informat ion).
8, 13, 14 are not applicable to the company.
9, the emissions up to the shipping destination are included in 4. Due to t he varying processing conditions of the products at the destination,
the t ransportation after the destination is excluded from the calculation as it is not possible t o make a reasonable calculat ion.
10The downstream of t he product destination has a large number of potential uses and it is not possible to determine all GHG profiles,
so a reasonable calculation is not possible. Therefore, a reasona ble calculation is not possible and is not disclosed.
12, the calculation method has been established and t he calculation is carried out retrospectively to 2020.
15 Is not disclosed due to very low emissions.
(FY)

Waste

Scope•

Amount of waste generation

I JapanI Overseas

Amount of waste emission

I JapanI Overseas

Amount recycled externally

I Japan

Unit

2019

GlobalGlobal***Thousand tonnes

I Overseas
GlobalI Japan

LandfillI
Landfill rate

l.i1ilI
I

Overseas

GlobalJapan
Overseas
Global

%

2020

108
4
113
99
4
103
93
3
96
0.6
0.0
0.6
0.6
0.0
0.6

2021

99
6
105
93
6
99
85
5
90
0.5
0.9
1.4
0.5
14.6
1.3

110
6
116
104
6
109
99
6
104
0.3
0.2
0.5
0.2
3.4
0.4

2022
109
11
120
103
11
114
98
11
109
0.2
0.2
0.5
0.2
2.2
0.4

2023
106
16
122
102
16
118
97
16
112
0.4
0.2
0.6
0.4
1.5
0.5

• • • Excluding the amount of construction waste from affiliated companies(FY)

Water intake

Scope•

Total water intake

I Japan

2019

2020

2021

2022

2023

86,406
1,162
87,569427

89,1391,410
90,549422
141
563
32,504669
33,173
2,564
546
3,110
0
6
6
53,65045
53,6950
46
46
66,268066,26883,411
1,061
84,472439
120
559
28,783450
29,233
2,551
452
3,003
0
0
0
51,63845
51,6830
38
3859,182
059,182

84,4941,430
85,924452
170
622
29,708565
30,273
2,700
639
3,339
0
0
0
51,634051,6340
56
56
57,527
057,52784,714
1,482
86,197442
509
951
28,841
684
29,526
2,894
289
3,183
0
0
0
52,537
052,53700053,44046
53,486

2019

2020

2021

2022

2023

82,775
1,055
83,830355
154
509
36,853901
37,75444,269044,26984,858892
85,750296
67
363
36,452773
37,22545,216
645,222I JapanI Overseas

-

-

-

-

GlobalJapan
Overseas
Global

-

-

1,298
0
1,298

2,894
46
2,940

80,267636
80,904324
76
400
35,473519
3 5,992
44,0204
44,024
0
0
0
450
38
488

82,611960
83,571377
167
544
35,968734
36,702
46,064
3
46,067
0
0
0
202
56
258

81,885
1,024
82,909164580
744
34,132
440
34,57247,384
4
47,388
0
0
0
205
0
205

I

Unit

Overseas

GlobalTap water

I JapanI

GroundwaterIndustrial water

I
I
I

I
SeawaterRiver water

other

-

31,376-

2,422-

Thousand mI
I Overseas
I
I
I
I
I

Recycled water-

Overseas

GlobalJapan
Overseas
GlobalJapan
Overseas
Global
Japan

I

-

3

0
-

GlobalJapan
Overseas
GlobalJapan
Overseas
GlobalJapan
Overseas
Global52,181-0-60,924-(FY)

Water discharge

Scope•

Total water discharge

I JapanI Overseas

Unit

GlobalSewage system

I JapanI Overseas
GlobalFreshwater

I JapanI Overseas

SeawaterI JapanGlobalThousand m 3

I Overseas
GlobalGroundwater

Other

I

I

-203-

(FY)

PRTR Substances

Scope•

Unit

Emissions

ED

2021

2022

2023

151
136

221
200

197
166

108
94

12

18

21

32

14

0
1,153
0
1,153

0
1,179
0
1,179

0
1,237
0
1,237

0
2,302
0
2,302

0
2,668
1
2,667

2019
176
883
1,018

2020
136
922
959

2021
200
1,251
968

2022
166
1,0 77
907

2023
94
1,361
1,033

2019
972
188
25

2020
1,009
161
25

2021
860
156
37

2022
1,0 22
200
35

2023
1,031
187
35

Unit

2019

2020

2021

2022

20 23

Billion yen

55.2

60.6

59.0

81.8

89.2

%

27.7

30.4

29.9

33.8

35.2

Tonnes

Japan

2020

188
176

Emissions to atmosphere
Emissions to rivers and otherwaterways
Emissions to soil

2019

Transfer volume
Transfer to public sewage system
Transfer to waste(FY)

Air emissions
VOC emissions
NOx emissions
SOx emissions

Scope•

Unit

U:.la
Tonnes

Japan

(FY)

Effluents

Scope•

COD, BOD emissions
Total nitrogen emissions
Total phosphorus emissions

Unit
Tonnes

Japan

( FY)

Visualizat ion of Environmental Contribution

Scope•ECG-PARTNER SYSTEM@products sales
TOYOBO CO., LTD.

ECG-PARTNER SYSTEM@products sales ratio

ED

(FY)

Environmental Accounting
Environmental preservation costs (invest ment)
Environmental preservation costs (expenditure)
Economic benefits of environmental preservation

Scope•Unit

TOYOBO CO., LTD.

Billion yen

2019

2020

1.1
2.3
2.6

2021

1.6
2.3
2 .0

2022

0 .6
2 .5
2 .0

2023

1.5
2.9
3.0

0.4
2.9
1. 7
(FY)

Compliance wit h Environmental Laws andRegulations
Environment-related accidents
Violations to environmental laws and regulations
Total fine

Scope•

Unit
Cases
cases
Yen

Global• Scope
TOYOBO CO., LTD.: TOYOBO CO., LTD. onlyGroup companies in Japan : domestic consolidated subsidiaries
Japan : TOYOBO CO., LTD. and domestic consolidated subsidiaries
Overseas: Overseas consolidated subsidiaries
Global: Whole Group in Japan and overseas- : No data

-204-

2019

2020
0
0
0

2021
0
0
0

2022
0
0
0

2023
0
0
0

0
0
0

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ESG Performance Data
GovernanceJuly 2023(FY)

Board of Directors

Scope*

2022

2023
10

Female

0

1

1

1

1

9

10

10

11

10

(3)

(4)

(4)

(4)

(5)

(3)

(4)

(4)

(4)

(5)

33

40

40

36

50

0

10

9

9

10

Male

4

4

4

4

4

Female

0

0

0

0

0

4

4

4

4

4

(2)

(2)

(2)

(2)

(2)

(2)

(2)

(2)

(2)

(2)

50

50

50

50

50

0

0

0

0

0

21

22

25

24

23

peopleTOYOBO CO.,LTD.

Ratio of outside directors%

Female ratio

Total

peopleTOYOBO CO.,Outside corporate auditors

Corporate Auditors

2021
9

Independent directors

Number of

2020
9Outside directors

Directors

2019
9

Total

Number of

Unit

Male

LTD.

Independent corporate auditors
Ratio of outside corporate auditors
Female ratio-

Number of meetings of the Board of Directors / committees**** Nomination and Compensation Advisory Committee

Research & Development

KPI
KPI

R&D expenses

Compliance

Number of consultations for compliance consultation desks(including internal report contact oﬃce)

TOYOBO CO.,

-=

cases

LTD.

Scope*

Unit

GlobalRatio of R&D expenses to net sales

Serious legal and regulatory violations

%

2019

2022

2023

11.0

11.7

12.7

13.8

14.1

%

3.3

3.5

3.8

3.7

3.5

Scope*

Unit

2019

GlobalRecommendations for exclusion by relevant authorities
Japan

Operational suspension due to misconduct

2021

Billion yen

KPI(including the Japan Fair Trade Commission)

2020

9

Criminal prosecution for compliance-related incidents and accidents
Exposure of price cartels

2020

2021

2022

2023

0

0

2

0

0

32

35

37

62

78

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Exposure of other violations

0

0

0

0

0

Violations and administrative disciplines relating to corrupt activities

0

0

0

0

0
0

Overseas

Exposure of bribery

Dismissal of employees relating to corrupt activities
Fines and penalties relating to corrupt activities

Number of Compliance study sessions for managers andvarious other trainings

KPI
KPI

Other
Political donations

cases

Global

0

0

0

0

0

0

0

0

24 + video
Globalー

Scope*Unit

TOYOBO CO.,LTD.

Million yen

I* Scope
TOYOBO CO., LTD.: TOYOBO CO., LTD. only
Japan: TOYOBO CO., LTD. and domestic consolidated subsidiaries
Overseas: Overseas consolidated subsidiaries
Global: Whole Group in Japan and overseas

-208-

2019

I

0.05

41

0
58 + video

distribution

distribution

distribution

for all

for all

for all

employees

employees

employees

2021

2022

2023

2020
0.05

31 + video

I

0.05

I

0.05

0.05

GRI Content Index
This content in dex shows t he GR! Guideline references on our websit e and ot her communicat ion channels.

._j,, General Disclosures._j,, Economic

GRI
Standards._j,, Environmental._j,, SociallDisclosures

References

GRl2 : General Disclosures 2021

1. The organization and its reporting practices

2-1

Organizational details• Corporate Data

2-2

Entities included in the organization's sustainability
reporting• Corporate Data

2-3

Reporting period, frequency and contact point• Editorial Policy

2-4

Restatements of information

Not applicable

2-5

External Assurance• External Assurance

2. Activities and workers

r
2-6

Activities, value chain and other business relationships• Corporate Data
• Products• Annual Securities Reports• Supply Chain Management

2-7

Employees

2-8Workers who are not employees• ESG Performance Data> Social

3. Governance

2-9• Corporate Governance

Governance structure and composition

2-10• Corporate Governance Report

Nomination and selection of the highest governance body

• Corporate Governance• Corporate Governance Report• Corporate Governance

2-11

Chair of t he highest governance body

2-12

Role of the highest governance body in overseeing themanagement of impacts• Corporate Governance Report• rnrpnratP GnvPrnanrP• Corporate Governance Report• Corporate Governance• Corporate Governance Report

Delegation of responsibility for managing impacts

2-13• Sustainability Management> Policy and approach> Sustain
ability management structure

l
-209-

2-14

Role of the highest governance body in sustainability
reporting• Sustainability Management> Policy and approach> Sustain
ability management structure

2-15

Conflicts of interest• Corporate Governance Report

2-16

Communication of critical concerns• Sustainability Management> Policy and approach> Sustain
ability management str ucture• Risk Management

2-17

Collective knowledge of the highest governance body

• Corporate Governance

2-18

Evaluation of the performance of the highest governancebody• Corporate Governance

2-19

Remuneration policies

2-20

Process to determine remuneration• Corporate Governance• Corporate Governance Report• Corporate Governance• Corporate Governance Report

Annual total compensation ratio

2-21

4. Strategy, policies and practices• Message from the President
2-22• Sustainability Management> Our officer's commitment

Statement on sustainable development strategy• Sustainable Vision 2030l
2-23

• TOYO BO Group Charter of Corporate Behavior

Policy commitments• Respect for Human Rights

T
2-24• Respect for Human Rights
Embedding policy commitments• Supply Chain Management• Compliancet
2-25• Respect for Human Rights> Initiatives> Establishment of c
omplaint handling and internal reporting systems

Processes to remediate negative impacts• Compliance> I nitiatives> Compliance consultation desks

2-26

Mechanisms for seeking advice and raising concernst• Compliance> Initiatives> Compliance consultat ion desks• Respect for Human Rights> Initiatives> Reducing excessiv
e working hours

2-27

Compliance with laws and regulations• Compliance> Ant i-corruption initiatives• ESG Performance Data> Governance• Japan Business Federation (Keidanren)• Kansai Economic Federation (Kankeiren)• Japan Chem ical Industry Association• Japan BioPlastics Association (JBPA)

2-28• Japan Chem ical Fibers Association (JCFA)

Membership associations• Japan Spinners' Association

I• Sustainability Management> Participation in initiaves• Plastic Resource Circulation> Participating in initiatives• External Evaluation (ESG Factors)-210-

5. Stakeholder engagement

2-29• Dialogue w ith Stakeholders

Approach to stakeholder engagement• Social Contributionf
2-30• Dialogue w ith Stakeholders> Dialogue with stakeholders a
nd investors> Employees> Dialogue between managemen
t and labor

Collective bargaining agreements• Respect for Human Rights> Initiatives> Respecting worker
s' rights
GRI3 : Material Topics 2021

3-1

Process to determine material topics• Materiality

3-2

List of material topics• Materiality• Corporate Governance> Management approach• Safety, Disaster Prevention> Management approach• Quality> Management approach• Respect for Human Rights> Management approach• Materiality• Environment> Management Approach

3.3• Supply Chain Management> Management approach

Management of material topics• Human Resource Management> Management approach• Diversity & Inclusion> Management approach• Health and Productivity Management> Management appr
oach
• Social Contribution> Management approach• Compliance> Management approach• Risk Management> Management approach-,J,. General Disclosures-,J,. Economic-,J,. Environmental-,J,. Social

GRI 201: Economic Performance 2016

• Annual Securities Reports• Financial Results

Direct economic value generated and distributed

201-1• ESG Performance Data > Social > Social contribution expen
diturel
201-2

Financial implications and other risks and opportunities due
to climate change

201-3

Defined benefit plan obligations and other retirement plans

201-4

Financial assistance received from government• Annual Securities Reports• Sustainability Management> Participation in initiatives> T
ask Force on Climate-related Financial Disclosures (TCFD)• Annual Securities Reports

GRI 202: Market Presence 2016

202-1

Ratios of standard entry level wage by gender compared to
local minimum wage

202-2

Proportion of senior management hired from the local
community

-211-

[

-

GRI 203: Indirect Economic Impacts 2016

203-1

Infrastructure investments and services supported

203-2

Significant indirect economic impacts

GRI 204: Procurement Practices 2016

204-1

l-

Proportion of spending on local suppliers

GRI 205: Anti-corruption 2016

205-1

Operations assessed for risks related to corruption

205-2

Communication and training about anti-corruption policies
and procedures

205-3

Confirmed incidents of corruption and actions taken• ComplianceI-

GRI 206: Anti-competitive Behavior 2016

Legal actions for anti-competitive behavior. anti-trust, andmonopoly practices

206-1

GRI 207: Tax 2019

207-1

Approach to tax

207-2

Tax governance, control, and risk management

207-3

Stakeholder engagement and management of concerns
related to tax

207-4

Country-by-country reporting-,!, General Disclosures-,!, Economic• Tax Affairs Policy-,!, Environmental-,!, Social

GRI 301: Materials 2016

301-1

Materials used by weight or volume301-2

Recycled input materials used

301-3

Reclaimed products and their packaging materials

GRI 302: Energy 2016

302-1

Energy consumption within the organization

302-2

Energy consumption outside of the organization

302-3

Energy intensity• ESG Performance Data > Environment• Management Approach> Environmental management system> Safety and envi ronment assessment
302-4

Reduction of energy consumption• Climate Change• ESG Performance Data > Environment

l
-212-

r
302-5

r
• Eco-Conscious Products> I nitiatives > LCA Calculation Initi
ativesReductions in energy requirements of products and services• Climate Change > Initiatives related to the entire value chain > Expanding our avoid ed emissions

GRI 303: Water and Effluents 2018

303-1

Interactions with water as a shared resource• Wat er Resources

303-2

Management of water discharge-related impacts• Chemical Substance Management and Reducing Environm
ental Impact> Reducing Environmental Impact> I nitiatives• Water Resources > Initiative > Risk reductionl• Wat er Resources
303-3

Water withdrawal

303-4

Water discharge

303-5

Water consumption• ESG Perfor mance Data > Environment

GRI 304: Biodiversity 2016

304-1

Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high b iodiversity value outside
protected areas• Biodiversity> Identifying risks

304-2

Significant impacts of activities, products, and services on
biodiver sity

• Biodiversity> Init iatives

304-3

Habitats protected or restored• Biodiversity> Init iatives

304-4

IUCN Red List species and national conservation list species
with habitats in areas affected by operations

GRI 305: Emissions 2016

305-1

• Climate Change

Direct (Scope 1) GHG emissions• ESG Performance Data > Environment

305-2

Energy indirect (Scope 2) GHG emissions

305-3

Other indirect (Scope 3) GHG emissions• Climate Change• ESG Performance Data > Environment• Climate Change• ESG Performance Data > Environment

305-4

GHG emissions intensity

305-5

Reduction of GHG emissions• ESG Perfor mance Data > Environment• Climate Change• ESG Perfor mance Data > Environment

305-6

Emissions of ozone-depleting substances (ODS)

305-7

Nitrogen oxides (NOx), sulfur oxides (SOX), and othersignificant air emissions• ESG Perfor mance Data > Environment

GRI 306: Waste 2020

• Waste Reduction
306-1

Waste generation and significant waste-related impacts-213-• ESG Perfor mance Data > Environment

306-2• Waste Reduction

Management of significant waste-related impacts• ESG Performance Data > Environment• Waste Reduction
306-3

Waste generated• ESG Perfor mance Data > Environment

306-4

Waste diverted from disposal• ESG Performance Data > Environment

306-5

Waste directed to disposal• ESG Performance Data > Environment

GRI 307: Environmental Compliance 2016

• Management App roach> Environmental management system> Environmental compliance
307-1• Chemical Substance Management and Reducing Environm
ental Impact> Reducing Environmental Impact> Environm
ental complianceNon-compliance with environmental laws and regulations• Water Resources> Environmental compliance• ESG Performance Data > Environment

GRI 308: Supplier Environmental Assessment 2016

• Supply Chain Management308-1

New suppliers that were screened using environmental
criteria• CSR Procurement Guidelines• Green Procurement Guidelines

308-2

Negative environmental impacts in the supply chain andactions taken'1,, General Disclosures'1,, Economic'1,, Environmental'1,, Social

GRI 401: Employment 2016

401-1

New employee hires and employee turnover

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

401-3

Parental leave• ESG Perfor mance Data > Social• Human Resource Management > I nitiatives> Work-life balance• ESG Perfor mance Data > Sociall
GRI 402: Labor/Management Relations 2016

402-1

Minimum notice periods regarding operational changesr-

GRI 403: Occupational Health and Safety 2018403-1

Occupational health and safety management system• Safety, Disaster Prevention

403-2

Hazard identification, r isk assessment, and incident
investigation• TOYOBO's Way of Manufacturing > Security and Disaster

Occupational health services• Safety, Disaster Prevention• Safety, Disaster Prevention

403-3

prevention Initiatives(1 .1MB) ~-214-

403-4

Worker participation, consultation, and communication on
occupational health and safety• Safety, Disaster Prevention

403-5

Worker training on occupational health and safety• Safety, Disaster Prevention

403-6

Promotion of worker health• Health and Productivity Management

403-7

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships• Safety, Disaster Prevention

403-8

Workers covered by an occupational health and safety
management system• Safety, Disaster Prevention

403-9

Work-related injuries

403-10Work-related injuries• Safety, Disaster Prevention• ESG Performance Data > Social• Safety, Disaster Prevention• ESG Performance Data > Social

GRI 404: Training and Education 2016404-1

• Human Resource Management> I nitiatives> Human reso
urces development

Average hours of training per year per employee• ESG Performance Data > Social

404-2

Programs for upgrading employee skills and transition
assistance programs• Human Resource Management> I nitiatives> Human reso
urces development

404-3

Percentage of employees receiving regular performance andcareer development reviews• Human Resource Management

GRI 405: Diversity and Equal Opportunity 2016

• Corporate Governance• ESG Performance Data > Governance
405-1• Human Resource Management

Diversity of governance bodies and employees• Diversity & I nclusion• ESG Performance Data > Social
405-2

Ratio of basic salary and remuneration of women to men• Annual Securities Reports

GRI406: Non-discrimination 2016406-1

Incidents of discrimination and corrective actions taken• Compliance> I nitiatives> Compliance consultation desks

GRI 407: Freedom of Association and Collective Bargaining 2016

407-1

Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk

• Resoect for Human Rights> I nitiatives> Respecting worke
r's right

GRI408: Child Labor 2016

408-1

Operations and suppl iers at signifi cant risk for incidents ofchild labor• Respect for Human Rights• Supply Chain Management

GRI 409: Forced or Compulsory Labor 2016409-1

Operations and suppl iers at signifi cant risk for incidents offorced or compulsory labor-215-• Respect for Human Rights• Supply Chain Management

GRI 410: Security Practices 2016

410-1

Security personnel trained in human rights policies orprocedures[-

GRI 411: Rights of Indigenous Peoples 2016

411-1

Incidents of violations involving rights of indigenous peoples

GRI 413: Local Communities 2016413-1

Operations with local community engagement, impact
assessments, and development programs

413-2

Operations with sign ificant actual and potential negative
impacts on local communities

GRI 414: Supplier Social Assessment 2016414-1

New suppliers that were screened using social criteria

414-2

Negative social impacts in the supply chain and actions
taken• Supply Chain Management• CSR Procurement Guidelinesl-

GRI 415: Public Policy 2016

415-1

Political contri butions• ESG Performance Data > Governance

GRI 416: Customer Health and Safety 2016

416-1

Assessment of the health and safety impacts of product andservice categories

416-2

Incidents of non-compliance concerning the health andsafety impacts of products and services• ESG Performance Data > Governance

GRI 417: Marketing and Labeling 2016

417-1

Requirements for product and service information andlabeling

417-2

Incidents of non-compliance concerning product and service
information and labeling

417-3

Incidents of non-compliance concerning marketing
communicationsl-GRl418: Customer Privacy 2016

418-1

Substantiated complaints concerning breaches of customer
privacy and losses of customer data

-216-

• Risk Management > Data security, privacy

TCFD Index
Disclosure based on TCFD Recommendations in the Integrated
Report 2023 (310KB)._I, Governance._I, Strategy._I, Risk management._I, Metrics and targets

Governance
Disclose the organization's governance around climate-related risks and opportunit ies.

Recommended disclosure content

Relevant sectionsa)The board's oversight of climate-related risks and opportunities• Environment> Management Approach> Structure• Environment> Climate Change> Structureb)Management's role in assessing and managing climate-relatedrisks and opportunities._I, Governance._I, Strategy._I, Risk management• Annual Securities Reports• Integrated Report._I, Metrics and targets

Strategy
DiscDisclose t he actual and potent ial impacts of climate-related risks and opportunities on t he organizat ion's businesses, strategy, andfinancial planning where such information is material.

Recommended disclosure content

Relevant sectionsa)The climate-related risks and opportunities the organization has
identified over the short.med ium, and long term.

• Sustainability> TOYOBO Group's Sustainability> Materialityb)The impact of climate-related risks and opportunities on theorganization's businesses, strategy, and financial plann ingc)The resilience of the organization's strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario• Environment> Climate Change> I nitiatives related to our manufact
uring business• Environment> Climate Change> I nitiatives related to the entire val
ue chain• Annual Securities Reports• Integrated Report-217-'1, Governance'1, Strategy'1, Risk management'1, Metrics and targets

Risk management
DiscDisclose how the organization ident ifies, assesses, and manages climate-related risks.

Recommended disclosure content

Relevant sectionsa)The organization's processes for identifying and assessing climaterelated ri sks• Governance> Risk Management• Environment> Management Approach> Structureb)The organization's processes for managing cl imate-related risks• Environment> Climate Change> Structure• Annual Securities Reportsc)How processes for identifying, assessing, and managing climaterelated risks are integrated into the organization's overall risk
management'1, Governance'1, Strategy'1, Risk management• Integrated Report'1, Metrics and targets

Metrics and targets
DiscDisclose t he metrics and targets used t o assess and manage relevant climate-relat ed r isks and opportunities w here such informat ion ismaterial.

Recommended disclosure content

Relevant sectionsa)The metrics used by the organization to assess climate-relatedrisks and opportunities in line w it h its strategy and risk management
process• Environment> Climate Change> Results• Environment> Climate Change> Targets• Environment> Climate Change> Strengthening climate change me
asures> Introduction of internal carbon pricing system• Plastic Resource Circulation> Targets and results• Sustainability> TOYOBO Group's Sustainability> Sustainable Vision
2030b)Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas(GHG) emissions and the related risks• Governance> Corporate Governance> Officer compensation system• Investor Relations> IR Library> Medium-Term Management Plan>
2025 Medium-Ter m Management Plan (FY3/23-FY3/26)c)The targets used by the organization to manage climate-relatedrisks and opportunities and performance against targets• ESG Performance Data> Environment• Annual Securities Reports• Integrated Report-218-

External Assurance

Independent assurance report
To enhance the reliability of the data disclosed, selected enviromental data has obtained independent assurance by KPMG Al.SA
Sustainabil ity Co., Ltd .. In the information given below, the 0 mark indicates fiscal year 2023 data t hat has obtained independent
assurance.

Independent Assurance Report
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Independent assurance report ~• Environmental data including items of independent assurance• ESG Performance Data-219-

-220-

Editorial Policy
Toyobo group endeavors to provide comprehensive and easy-to-understand information disclosure, w ith a focus on susta inability
information, to communicate initiatives for sustainable development of society and o ur grou p to our stakeholders on our sustainability
website.
We also d isclose basic company information on the About Toyobo website and information on financial results on the Investor Relations
website. In addition, since fiscal 2020, we have issued the Integrated Report which summarizes financial and sustainability information in
one publication as a tool for gaining understanding of our med ium- to long-term growth strategy.

Period covered by the report
Fiscal 2023 (April 1, 2022 to March 31, 2023)* Resu lts of some activit ies in fiscal 2024 are also included

Scope of the report
The scope of the report is TOYO BO CO., LTD. and its consolidated group companies. However, where it is difficult to gather information on
the consolidated basis, the report discloses information o n a non-consolidated basis or for group companies in Japan. Jn either of t hesecases, the scope of reporting is stated.

Updated
September 2023 (next update planned : September 2024)

Guidelines referenced- GRJ Standards (Japanese version)- VRF "International Integrated Reporting Framework"- Task Force on Climate-related Financial Disclosures (TCFD Recommendations)- Ministry of the Environment "Environmental Reporting Guidelines" (2018 versions)- Ministry of Economy Trade and Industry "Guidance for Collaborative Value Creation 2.0"

-221-

Disclosure of information

TOYOBO REPORT (Integrated Report)
This report outlines our company's value
creation-oriented growth strategy, and presents

TO\'OBOan overview of our business operations. We

actively utilize t his report as a tool fo r dialogue
wit h shareholders, investors and otherstakeholders.
https://www.toyobo-global.com/sustainability/report/

Our website

Our website

Investor Relations

Sustainability

Here, we bring together investor relations (IR) materials such

Here, we present information about Toyobo group's ESG-

as financial results, annual financial reports and businessresults presentations for the benefit of shareholders andrelated initiatives, along w ith relevant data.
https://www.toyobo-global.com/sustai na bi Iity/

investors. We also present an overview of t he company's
current financial status and business performance, stock

Sustainability Report

information, an lR calendar. and a FAQ, etc.
https://ir.toyobo.co.j p/en/i r.ht m I

PDF versions, compiled in November each year. ofsustaina bility-relat ed information posted on the company 's

Annual Financial Reportwebsite.
https://www.toyobo-global.com/sustai na bi Iity/report/

Prepared in accordance w ith the req uirements of Pa ragraph(1}, Article 24 of the Financial Instruments and Exchange Act,

Corporate Governance Report

the Annual Financial Report presents a summary of thecompany's current situation, details of its business areas, theThis report presents informat ion about Toyobo group's
approaches and systems, in accordance w ith Japan's

current state of its facilities, its operational status, and its
financial statements, etc.

Corporate Governance Code.
https://ir.toyobo. co.jp/en/ir/Ii brary/governance. html

https://ir.toyobo.co.j p/en/i r /Ii bra ry/secu rities. html

FACT BOOK

The FACT BOOK presents key financial data, for both thecompany as a whole and individual segments, covering aperiod of 11 years. It also presents non-financial data coveringa period of five years.
https://ir. toyobo.co.j p/en/i r /Ii bra ry/fact.htm I◄

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