Kaneka Integrated Report 2020

Kaneka Integrated Report 2023

Sustainable Solutions for an Evolving World.

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Kaneka Integrated Report 2023

K ane ka I n t

The Dreamology Company—Make your dreams come true—
Trial & Error experiment driven company
KANEKA thinks “Wellness First.”
Kaneka contributes to the sustainability of the earth,develops its business in a “wellness-first” direction,energizes people, adds vibrancy to business, and helps build ahappier society.
To make the world more wellness-first.
Kaneka takes an innovative approach to science,and seeks to fulfill people’s dreams by offering a wide variety
of solutions.

Contents
Ⅰ Top Message
Ⅱ Management Philosophy

Management Philosophy Structure “Declaration of Kaneka United”
Management System

Purpose Management and Three Value Drivers

Value Creation Process

Advancement of Kaneka’s Value Creation Process(Based on Creative Fusion of People and Technology)

Ⅲ Management Strategies
The Path of Hybrid Management
R2B Strategies

DiscoverHuman Resource Strategies

FutureGlobal Strategies
Manufacturing Strategies

Ⅳ Business Foundation● List of Directors● Corporate Governance● Business Risks and Uncertainties● Intellectual Property● Environment● Supply Chain Management

Ⅴ Appendices● Safety● Quality● Communication with Stakeholders● Consolidated Financial Statements● Corporate Profile● ESG Promotion● Compliance● Financial and Nonfinancial Highlights● Investor Information● Editorial Policy

Top Message“I Wake Up Every
Morning to Dream”*1

I. “I Wake Up Every Morning to Dream”*1
Creating Your Own Story
The caption at the beginning
was borrowed from the title of a book containing interviews with Haruki Murakami.
How awe-inspiring.
His works are full of paradoxes and metaphorsthat stimulate the imagination.
Some of you may be surprised,
but I chose it because I was stimulatedby the paradox of this phrase.
Perhaps it’s because people are always looking for a little fairy tale (dream)in their mundane daily life,
whether at work or in their everyday lives?
I chose it because I felt thatdreaming (and living)
is about creating your own story.

Feeling Is Missing
There is something I am very concerned about at this moment.
That is, to look at the origin of our purpose,“KANEKA The Dreamology Company—Make your dreams come true.”
Quite some time has passed since we entered the era of a surplus of goods.
During that time, even though functions and performance have improved dramatically,
have they been able to meet the diversified needs of people with different tastes?
What I think is that no matter how great
the quality of new products are,they will not scale well if
another value-added “feeling” is missing.

Kimikazu Sugawara

Because to “feel” is to have someone say, “I love it!”

Chairman and Representative Director

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Top Message

P. 14 IV. Discover Future

Convenience and efficiency can be managed quickly with the latest digital technology.

Let’s Remove the Rust of Our Five Senses.

If you communicate your objectives, the computer will gather information from all over the world.

We have become so accustomed to being given things

The wide range of media keeps us soaked with information.

that we have somehow forgotten how to feel with our bodies

We have all become side-by-side holders of information.

and think with our five senses.
Our five senses (sight, hearing, smell, touch, and taste)

Idea Craftsman

are our identity, our originality, and our very essence.

However, I believe that the future

The clues to our work are outside of the company.

belongs to those who have acquired

Let’s thoroughly watch the“unspeakable wisdom” such as “intuition,” “tips,”“changes and diversity of the times.” Let’s venture out of our area of expertise.

“inspiration,” “technique,” and “a sixth sense.”
Step out into town, see, touch, and smell the sites.
I refer to those who use this wisdom

And dig deep into things to find their essence.

to make a difference or solve a problem as“idea craftsman.”

When we speak of the “Kaneka Way” or “Kaneka Spirit,”

Rather than just technical theories or how-to’s,

we are referring to a way of working

the information and knowledge they possess will ferment within themthat removes the rust of the five senses and transforms “knowing” into “feeling.”

and mature into great wisdom.

“Kaneka 1-on-1” is a training program for “idea craftsman.”
Uniqueness and originality are born

I believe this is wherefrom refining one’s own sensitivity.

“idea craftsman that can make your dreams come true” can shine.
Our associates who “feel” this way are our pride and joy.
Pattern recognitions (stereotyped ways of seeing things)
that rely on past patterns
do not last forever and will mutate at some point.
If we let things be given to us,“something new” and “something different”
will never be born.
We live in an age of idea craftsman, where “feeling” is more important than “knowing.”

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Top Message“I Wake Up Every Morning to Dream”*1

II. Life Focus Management —Limitless Adventure—

In “I Wake Up Every Morning to Dream,”

Before We Are No Longer Able to Live on the Earth

Haruki Murakami says,“For a writer, writing is just likedreaming while

I would like to talk about the “roots” that we value,or in other words, our purpose management,“KANEKA The Dreamology Company—Make your dreams come true.”

waking up.
It’s an exorbitant experience

The Earth’s life, our lives, they are all chemical reactions.

that doesn’t always allow

This is the root.

logic to intervene.
I wake up every morning to dream.”*2

If we go back in history to 4.6 billion years ago,
we can trace the birth

To make an analogy in my own unique way,of the Earth and all life on it to a single source.

I believe

Life phenomenathat business,

can be described almost exclusively in the common language of chemical reactions.

like a story written by a writer,

The reason why Kaneka’s management policy

is actually a work of empathy and emotion thatis to research the “mysteries of life” and support a society that nurtures life

wanders between dreaming (vision) and awakening (critical thinking).

is precisely because our universal understanding that“life is a chemical reaction” is at its very origin.

The strategic story line
begins with tossing a few questions and scenarios

This is why

into the sky,animals, plants, and the Earth are featured in our integrated reports

and the disparate concepts
gradually take shape and come down.
Irony and paradoxes are common languages.
Sometimes we need the help of metaphors
to understand certain complex situations.
“Business ideas” are similar to the feeling of waking up and chasing a dream.

However, cruelly, it is said that the root causes of the problems that humanity is facing
have undoubtedly been sown by humans.
The global population has already exceeded 8 billion,
and the explosion in population has now
reached the point where it isdevastating the entire biosphere with the“footprints” that humans continue to carve.
The natural world is becoming
increasingly overburdened.

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Top Message

P. 28 The Path of Hybrid Management
P. 34 R2B Strategies

Chemistry of Life

They are all “new frontiers paved by chemistry”

If the “critical point” is exceeded,that Kaneka is taking up as a challenge.

the situation could lead todangerous climate change and mass extinctions.
Unless we reduce the risks, future generations will be left
with a depleted, emaciated world.
Life and the Earth are connected as one.

Kaneka will drive the transformation of its portfolio
by taking on the challenge of “R2B”
in the life science area.
We will aggressively expand “life sciences for a healthier planet”
and work to transform our business into a new, highly profitable structure.

In order for humans to survive as a “species,”
we require a “chemistry of life”

Hybrid Management of the Toy Box

that changes our thinking patterns, zooms out,

Innovation isand reexamines the entire “Earth and all life on it”“a new combination that does things in a different way.”from the perspective of life on Earth.

Combining different things in different business fields in a new way.

We must further our understanding of natureand rapidly deploy appropriate technology
before we are no longer able to live on the Earth.
This perspective is our purpose management,“KANEKA The Dreamology Company —Make your dreams come.”
Each research may appear different, but they are allconnected to the big “life,” that is, life on Earth.
This is the new frontier created by chemistry.

Shift in Emphasis to Life Sciences
The definition of “life science” is the technologies and creative activities
that use chemistry to make life on Earth healthier.

We call this “hybrid management.”
Kaneka has a wide variety of different technologies.
Just like a “toy box.”
The surprising combination of themcreates creative and valuable solutions.
Through this “hybrid management,”
we will contribute to solving social problems.
Kaneka has created countless new combinations,
including Green PlanetTM, a biodegradable polymer
that combines biotechnology and polymer technology,
and “Watashi no Chikara (My Energy)TM Q10 Yogurt,”
which combines supplement products with food products.
More products, technologies, and businesses

Kaneka’s “biomanufacturing,”

will continue to emerge from our hybrid management.

such as the biodegradable polymer Green PlanetTM,

Please look forward to the hybrid management of the toy box.

genome editing technology, biopharmaceuticals, regenerative andcell medicine, organic dairy products business, supplements,and fermentation culture process technology,
PV technology, and medical devices are
all connected to the big “life,” that is, life on Earth.

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Top Message

P. 44 Human Resource Strategies
P. 54 Global Strategies

Limitless Adventures of a Human Driven Company

Diversity: Creating New Value and Women’s Participation

Kaneka is a human driven company.

“Wow, I never thought of it that way!”

It’s all about people.

“Your perspectives are unique and always moving.”

We will increase corporate value and drive growth through the growth of people.

Diversity of ideas!

Leadership and followership are important.

I want to fill Kaneka with such “idea craftsman.”

The captain of a ship unites the feelings

I want to amaze the world with their creativity and human magic.

of the crew to create a winning momentum.

I work with this in mind.

“Kaneka 1-on-1” lighting a fire in people’s hearts.

My job is to bring out their unhindered performance as a stage director.

The progress of plans and the career and skill development of subordinates
are facilitated by frequent dialogue between supervisors and subordinates.
Kaneka is a pioneer of the 1-on-1 system in Japan.
Today, society is surrounded by an atmosphere where communication is lacking withouteven realizing it.
The aftereffects of the COVID-19 pandemic have weakened the connections between people.

Unbound by gender, age, nationality, and other circumstances.
I want you to leap out of the box.
I want the hands of different and diverse employees to create new value.
This is what Kaneka considers diversity.
Diversity of DNA.
Only a company that attracts a diversity of human resources that cause change - can survive.

Trust People & Mutual Respect“Trusting colleagues and respecting differences” has been a Kaneka tradition spanning 70 years.
We will revitalize a culture in which customers and colleagues
work together as one team with a sense of trust and respect.

“Be different” is the keyword.
We actively promote the hiring and promotion of women.
The reason we wish to expand opportunities for women is because we want to inspire theworld with the diversity of our ideas.

I can’t do it, it’s impossible for me.
Say goodbye to such negativity.

A Network Connecting Global and Local

Limitless adventure is our new theme.

The place where our diverse employees can thrive is, of course, global.

Let’s remove limits with positive thinking.

When I think of domains on a global scale, I feel that the adventure is like putting my foot in
someone else’s shoe.
There are countless different shapes and sizes of shoes in the world,
and when you step into those shoes,
you are able tosee the world throughsomeone else’s eyes.
Only when you walk in those shoes
will your business start moving.

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Top Message

P. 56 Manufacturing Strategies

Carbon Neutral/DX Initiatives

We want to be a value-creating company that

We aim to reduce GHG emissions by 30% by 2030.

contributes to people’s health and the enrichment of society.

Our goal is to achieve carbon neutral by 2050.

We will contribute to building a “sustainable society.”

We aim to reduce GHG emissions mainly in Scope 1

It’s not “what will the future look like” but “what will we do with the future?”by reducing energy consumption through fuel conversion

The key is not to forecast the future,of in-house power generation facilities and process innovation.

but to plan it.

We are also considering the introduction

We must act proactively to anticipate changes in the global environment.

of an internal carbon pricing system.

The highest adaptability is the creativity

As for DX, we will continue to advance the sophisticationof our digital platform by making full use of digital technology

to create a sustainable future for oneself.
This is also where the idea craftsman come in.

and materialize the concept of carbon-neutral production technology.
We are also working on a company-wide digital platform concept using theIII. Gratitude and Prayers

latest digital technology to promote operational

Management is the field.

innovation in research and development, sales, SCM, and back-office operations.

The god of management lives in the details.

Through these efforts,

Each and every thing that happens in the field,

we will create new values such as “creation of new businesses”

each and every change in each and every person in the fieldand “transformation of work culture.”

is management itself.

As for human resources, there will be a major shift to creative work throughthe automation and streamlining of routine basic work through digitalization.
Our goal is to achieve 50% creative work by 2025
and 70% by 2030.

Management is about shining a light on the details
and moving the whole thing forward.
I believe that it means to go back and forth between the entirety and the parts,and to adapt to change.
Nothing would make me happier

Human-Driven Health Management —Wellness First

than for you to read this report and understand the

Kaneka aims to transform its portfolio with life science as the core,

relationship between the entirety and the parts of management.

focusing on the three crises of global life:

Each one is a philosophy or policy itself.

“environment and energy,” “food,” and “Wellness” as domains.

Over the past year, we have also been engaged“Wellness First —Human-Driven Management,” which aims to make the worldin “Human-Driven Management.”

healthier by addressing ESG issues, is an island that we are striving to create.

I am reporting this withgratitude and prayers for all of you.

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Top Message
IV. Discover Future

Always doing what others don’t do and making new proposals.

—My Thoughts on the “Plan: The Three-Year Initiative” 2024—

I believe the fundamental source of Kaneka’s strength is our

The Three-Year Initiative
1. We ended the Mid-term Plan.
We are transforming the Mid-term Plan
into “Plan: The Three-Year Initiative.”
A plan is a management initiative,
and we set out to fulfill what we have set as a goal.

youthfulness in creating new things. I believe it is our duty as
managers to pass this source down to the next generation, andeven generations after that.
However, teamwork is vital for managing a hybrid company like
Kaneka, with such a diverse range of business areas, over the
next 50 years.

Acting on and realizing the goal.

Management team members must share a common awarenessAnd, above all,of the current condition (Status Quo) as well as our vision.

the “Plan: The Three-Year Initiative” is a creative mechanism.

Furthermore, I believe communicating this clearly to all

When it comes to Mid-term Plans, the implicit assumption that the present moment
can be postponed always arises.
Nothing starts. The present moment doesn’t change.
A plan, in the first place, is to decide on the present by looking ahead at tomorrow, and thenmoving quickly in the present moment (towards tomorrow).
But the present moment is frozen within the confines of the Mid-term Plan.
So, let’s demolish the “Mid-term Plan” box and throw it away.

employees is most important.
So that all of Kaneka’s employees become one team.
Communicate with each other.
Therefore, today, we have chosen a flag (catch phrase) for all of
us to share a common understanding and vision that is essential
for Kaneka to continue shining in the next era.
Discover Future: Leap towards tomorrow

Stay Positive, Stay Hungry: The only option for survival is to change now
It is a limitless treasure box filled with curiosity and dreams.

Change & Create New: Discard courageously and create a new tomorrow“Plan: The Three-Year Initiative” is about this transformation.

2. Putting Culture Front and Center in Management.
I believe that Kaneka’s culture, with our free and open
atmosphere and spirit of challenge, known as “Kaneka Way,
Kaneka Spirit,” is what we must value most.

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Top Message
3. Sorting Out Issues Is Hypothetical Thinking

4. Plans Are Options for the Future

Technological innovation is astounding, with new things

Humans are creatures that are bent on maintaining the status quo.

emerging one after the other.

A sense of helplessness when under pressure, or naive wishful thinking (that we can figure it

What we thought would remain stable isout), is not enough to ignite a team’s passion. They are just excuses to escape reality.

changing dramatically.
With the given business assumptions quickly
crumbling, the standard way of thinking that we can predict the
future is no longer viable for planning.
In most planning,
despite the future being unknown,
numbers and scenarios are set as assumptions and strategies are implemented
as though the future will remain unchanged.

It is important to identify the factors that will be the source of choice(market growth, market prices, competitor response, customer response, etc.)
when uncertainty is high, and to act first to the extent that the risk does not
become too great after hypothesizing about these futures.
That marks the start of the options for the future.
If the hypothesis is correct and it swings upward,
we will move to invest in additional resources.
On the other hand, if there is a downturn, we can change the policy.

The key is to think about what success means

Even though there is much uncertainty about the future, if we don’t start anything, we will

and to work backwards from the final goal.

never have a chance.

Backcast how things should be in order to achieve the desired results,

Let’s zoom out and zoom in on the situation, organize the issues, and stay ahead of theand then write out the initiative as a hypothesis.

changes while on the move.

Also consider what some checkpoints might be

Take the first step with hypothetical thinking.

to make them more concrete.
Even so, if there is a gap between your assumptions and reality,
you can consider alternative hypotheses. Sorting out issues is hypothetical thinking.

We are at the crossroads of a strategic shift.
Think about shifting strategies from a meta-perspective.
Make 2024 a remarkable breakthrough year.
We will discuss Kaneka’s unique management strengths,
which are unique to Kaneka in light of the changing times.
Discover Future!
Choose your own future based onyour sense of mission and values.
Let’s design
a future unique to Kaneka from a meta-perspective.
Exciting: Does the image of the future make your heart dance?
Unique : Is Kaneka’s character tightly woven in?
Can do : Do you and those around you want to do it and believe it is possible after
hearing about it?

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Top Message
Draw Your Own Plot

1. The workplace will not only adhere to the “forms,” but will also normalize

What do you want to do?

new initiatives that transcend their boundaries. Exactly what Shu-Ha-Ri

Imagine all you want to create.

recommends (out of the box).

I believe that creation is the combination or rearrangement

By doing so, I want to build an organization culture that encourages innovation.

of two or more unexpected elements.
Creating something new.
And making it useful.
That is all.
It is very simple.
Innovation, Schumpeter says, is an example of creativity.

2. Next, the innovations generated in the field are made into new “forms.”
This will enable expansion across the organization.
3. Finally, I want to replace old “forms”
and wisdom with new ones.
I want to establish a new algorithm for the 21st century.

Let’s be frank.

Closing Remarks

How many people spend years or decades

First, ask yourself these questions.

following someone else’s plan,Is the current approach working?

despite having only one life to live?

Is my current way of living and working alright?

We are too caught up.
With a limited mindset.

If we always strive to express ourselves,

In walking a well-worn path.

we will naturally be able to live,
work, and be as creative as we envision.

Shu-Ha-Ri
Shu-Ha-Ri is a term originally used in Kabuki, martial arts, and tea ceremonies to describe theprocess of passing down the master’s craft in training.

The “Plan: Three-Year Initiative” plan
is a creative mechanism
to progress toward
the goal.

Learn the forms in “Shu,” break them in “Ha,”and transcend to new heights in “Ri.”
I would like to establish such an algorithm in Kaneka
that scales the “craftsman” of creativity
to a “mechanism” of routine.
The new Kaneka Way/Kaneka Spirit.

*1 Haruki Murakami, “I Wake Up Every Morning to Dream: Haruki Murakami Interview Collection 1997-2011,” Bungeishunju (Bunshu Bunko), 2012
*2 Same as above, P.165

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Management Philosophy

Management
Philosophy Structure“Declaration of Kaneka United”

1

With people and technology growing together into creative
fusion, we will break fresh ground for the future and tie in to
explore New Values. We are also committed to challenge theenvironmental issues of our planet and contribute to upgrading
the quality of life.

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Toward an Even More Impressive and Productive Future

Corporate
Philosophy

Corporate
IdealsFive“ties”

1. Tie to the future

As a research and development company brimming with creative energy and passion, we will
create future-oriented businesses that leap beyond current market needs and back them up
with new product development, thus protecting the global environment and contributing to thequality of life.

2. Tie to the world

We are determined to become a truly global enterprise with diverse human resources working
together on a global scale. Our presence will be felt in markets around the world, including
newly emerging ones.

3. Tie with value

We are proud of our unity and identity as the Kaneka Group and will take on the challenges ofvalue creation and business innovation through close collaboration.

4. Tie forinnovation

We will never cease to pursue innovation, fusing wisdom from both internal and externalsources without getting caught up in organizational compartmentalization and conventional
ways of doing things.

5. Tie withpeopleWe in the Kaneka Group believe that the wellspring of corporate growth resides in humanresources and will continue to seek innovation as we cultivate and nurture our valued
employees.

In 2018, Kaneka Group established the ESG Charter, aiming to evolve its ESG management.

3

Putting the Corporate Philosophy Into Practice
1. We offer solutions characterized byvalue to global markets and contributeto the evolution of lifestyles and theenvironment through innovative
chemistry.
① We bring innovation to lifestyles and theenvironment by harnessing the unlimited
potential of chemical materials to help
communities achieve sustainability.
(Earthology Chemical Solution)② By adopting a unified approach to food andmedicine that is defined by a focus on
chemistry, we provide innovative solutions
that empower people to live healthier lives.
(Active Human Life Solution)

2. We fulfill our social responsibility by empowering individual
employees to put our corporate philosophy into practicethrough serious, forward-looking effort.
① We actively contribute to our communities by cultivating understanding of
the cultures and customs of the countries and regions where we dobusiness and by pursuing corporate activities that are deeply rooted inthose communities.

Customers

Kaneka Integrated Report 2023

Society

We provide quality products,
services and value aimed atcreating a sound society,ensure product safety, anddisclose information to those
who purchase our products aswell as potential customers.

Our business is rooted in local
communities, promotingsocial contributions andcommunity engagement. We
also contribute to creating awell (sound) community andsociety, ensuring safe operation of plants and disclosureof information.

Shareholders andInvestors

We offer appropriate returns
and disclose timely information
to those who recognize ourcorporate stance and brand value
and who own our shares, so that
we can increase overall trust in
the Group seeking to ensure a
company culture and a society
characterized by wellness.

KanekaGroup

Employees

The Environment

We make efforts to reduce
environmental burden in raw
material procurement, manufacturing and transportation
processes. We also fulfill social
responsibilities by developing
cutting-edge materials andunique technologies to enhance the wellness of the
global environment.

Vendors

We conduct fair transactions
with suppliers and contractors
focusing on compliance andbuild mutually beneficial andwell (sound) relationships oftrust with them, offering equal
opportunities to do business.

Bearing in mind Kaneka Group
employees and their family
members, we offer a workplace environment of wellness — job satisfaction,
appropriate treatment andremuneration, and safe
working environments — andrespect their diversity.

② We operate our businesses in a fair and impartial manner based on theprinciples of free competition and legal compliance.
③ We’re committed to communicating with shareholders and other stakeholders and to making information about our operations available in a timely
and appropriate manner.
④ We strive to foster an organizational culture that respects the personalities
and uniqueness of all employees so that they can enjoy good health, feel
motivated, and make the most of their abilities.
⑤ Reflecting a commitment to make safety the top priority in our operations,
we work to create safe and healthy workplaces, ensure product safety, andprotect and preserve the environment.

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Based on the “Declaration of Kaneka United,”
we provide valuable solutions through our mission of Kaneka thinks “Wellness First.”

Hold in your hands the future you have always dreamed of.
We are a highly perceptive and collaborative value-creating group or, as we like to say, a“Dreamology Company.*”
We want to look at the future from the same perspective as our customers. The future that
Kaneka visualizes is one that connects us with our customers.
* “Dreamology” is an expression coined from ‘dream’ and ‘ology’ (science). Our “Dreamology Company” is a“highly perceptive and collaborative value-creating group.”

ESG CharterAs good citizens, we look towards the same future
as all stakeholders from the same viewpoint.

Support for the United Nations Global Compact
In March 2015, Kaneka Group became a signatory to the United Nations Global Compact.
The UN Global Compact is a voluntary code of conduct through which the top management of signatorycompanies commit themselves to take action aimed at achieving ten principles in the four areas of
Human Rights, Labour, Environment, and Anti-Corruption. As Kaneka Group with a global network, we
actively share information about our commitment to global sustainable growth as a responsible corporate citizen with our stakeholders and the international community.

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Management Philosophy

Management System

Purpose Management and Three Value Drivers

Trial & Error experiment driven company
We try new things without fear of failure.
We enjoy answers produced from accumulated
experiments.
We continue to be a “Trial & Error experiment
driven company,” creating unique solutions.

The backbone of our innovation consists of
two management systems: “Kaneka Tower” and“Triple package as management system transformation.”Management System

Kaneka Tower

Triple package as management system transformation

Key basic structure of our management model– Its viewpoint and perspective (what is valued) –【Purpose】
Ability to grow tall

[Value②]
Outward strengths

Kaneka as a “Trial & Error experiment
driven company”
ESG management“Wellness First” health management

Further accelerate transformation to a solution provider
based on a new management system[Value①]
Inner strengths
1. Diversity
Broad business domains / Diverse
range of technologies / Global corporate activities / Diverse workforce

Management
Innovation

4. A leader who will face challenges(a person with an edge)
A leader who will influence people
A team that will unite to tackle issues

Large Actione
Scop

4. From small to big

Business
Creation

MarketDevelopment[Value③]
Frontline execution
1. E
 very value is created on
the frontline
Think by seeing, hearing, andtouching on the frontline to
make decisions
2. Emphasize Value Communication to link the frontlines
together

Where we are

The 4 SUs
The 10 SVs

Large Goal

Kaneka1-on-1

Goal

Speed &
Scale

What, When, How
to complete

What to do

Management System
Transformation

SU Visioner
Driv

Ambition
Strategy

ActionTechnologicalInnovation &Driving Force

5. Open innovation

3. Serve as an interface between
markets and technology

5. “Kaneka 1-on-1”
Facilitate personal growth throughemployees’ job performance

Our
Ambition

3. Ask “Are we playing a useful role?”
Solution provider that provides solutions by structuring customers needs

2. Shift from materials to solutions

Start small and grow big
Cell division through clustering
Born small, Grow Big!!

Management Hardware

1. Advance transculturation froma global perspective
2. Bring out uniqueness

FuturePerspective

Design of the Housing

Large Domain[Problem]

Plan: The ThreeYear Initiative

Change and
Growth Trianglecerman p（3Ss ）
o
f
r
e
P
ar
・Sh
cale
d・S

Spee

Leadership that lights a fire in people’s hearts

Plan: The Three-Year Initiative《 Management Software》

Growth strategy fromthe viewpoint of the Change
and Growth Triangle

Implementation of the new
personnel system (Kaneka 1-on-1)
Growth of people and work

Work Culture Innovation
Operational Excellence

Effective use of time, information, and people
Maximization of organizational productivity- Renaissance (Recovering Our Humanity) -Don’t Forecast the Future, Plan It
Demonstrate Adaptability
22

Kaneka Integrated Report 2023

Kaneka Integrated Report 2023

23

Management Philosophy

Value Creation Process

Advancement of Kaneka’s value creation process (based on creative fusion of people and technology)
Kaneka’s Meaning of Existence
Purpose

Providing solutions through innovative material development across our global network
through the repeated creative fusion of people and our breakthrough technology

Consider with the
B to C & S concept

Globalsystem

M&A

Source-in/
Source-out

Creative fusion of people andtechnology

Combine technologies fromdifferent industries

Environment / Energy

Trial & Error experiment
driven company

Value DriverOpen
innovation

Challenge on
a global scale

Resolution of Social Issues
KANEKA thinks “Wellness First.”– Active learning to promotedissimilar connection –Brainstorm
various ideas

Feel, perceive,and find

We realize a society where everyone can enjoy nature’s bounty, using
clean and sustainable resources and energy.

Food
Strength of our people
and organization2 1 sites across the worldA pproximately 11,500
employees

Strength in connectingwith nature
Using resources efficiently

Strength in production

Source of CompetitivenessV alue Communication2 1 sites across the world

Solid foundation of people and technology

Strength of collecting,storing, and usingS hareholders’ equity ratioC ash creation capability

Strength of
our technology

Strength in connectingwith societyO nly One and Global No.1
diverse technology baseP
 artnerships for a healthyworldA pproximately 800
research techniciansT rust from customers andcommunities

We realize a society where safe, secure and highly nutritious food isavailable to everyone and where food producers are also satisfied.

Wellness

Human Driven Company
Declaration of Kaneka United
24

Kaneka Integrated Report 2023

We realize a society where everyone has access to leading-edge
medical services and can continue to live a healthy and vibrant life.

Kaneka Integrated Report 2023

25

Management
Strategy System

Top
Message
Management
Strategies

Basic Management Policy

Priority Strategies

Aiming for the goal of making the world healthy—“Wellness First” (Human-Driven Management)
Trust & Respect

Trial & Error Experiment Driven Company

Trust People & Mutual Respect is a tradition that has continued
since Kaneka’s founding

The limitless adventure of repeated renewals
for a new portfolio

Discover Future:
Designing a future that is “exciting,” “unique,” and “can do”
P. 28

Strengthening the Management Platform

Selection and Concentration

Innovate and upgrade operations throughdigital transformation (DX)A new personnel system for increasing employee
motivation and productivity

Tackling the three crises with a focus on Life Science
Active investment in research and development
Targeting rapid growth by investing resourcesin leading-edge businesses and new large-scale businesses

The Path of Hybrid Management
Promoting Portfolio Transformation
Earthology Chemical Solution
Active Human Life Solution

P. 34

Three Focal Points

R2B Strategies
R2B+P—A Support for Hybrid Management
Accelerating Hybrid Management with R2B × DX
R2B Intellectual Property Strategies

SX
Restoring life-nurturing humanity “SX”
(sustainability + DX)

P. 44
Accelerate transformation and growth

M&A

Human Resource Strategies
Human Resource Development
Development of human resources and leaders centered on Kaneka
1-on-1
Promotion of Diversity
Going beyond differences to a diversity nurtures individuality

Diversity

Promoting structural reform through open

Promoting diversity through diverse people,

innovation and M&A

business areas, regions, and technologies.

Promotion of Wellness
Employees who thrive on taking on challenges; organizations andgroups that are connected by bonds

P. 54

Five Initiatives

Global Strategies
Think Global, Act Local
Our global network enabling business development deeply rooted inlocal communities

Strengthening the Asian Strategy
Advancing Digital Transformation (DX)
Advancing Carbon Neutrality
Alliances and M&As
Diversity Committee

26

Kaneka Integrated Report 2023

P. 56

Manufacturing Strategies
Carbon Neutrality
Digital Transformation (DX)

Kaneka Integrated Report 2023

27

The Path ofHybrid Management

Management Strategies

Promoting Portfolio Transformation

Fiscal 2025 + X

30%
Material

We will accelerate the transformation of our business portfolio through hybrid management.
We aim to create unique and valuable new solutions, combining a wide variety of different

15%
Nutritiontechnologies and solutions to help solve social issues.

60%
Leading-edge
Businesses

Operating Income Ratio by Solutions Unit (SU)26%
Health Care

Fiscal 2022

11%
Nutrition

Operating income

100 billion yen

49%
Leading-edge
Businesses

40%

24%
Health Care

Foundation
Businesses

Operating income

29%

35.1 billion yen

Quality of Life

Investment Plan

51%

We will accelerate the process of selection and concentration in our investments, expanding the domainof “life science for a healthier planet.”
We will strategically invest resources (people, goods,
and money) to develop unique and differentiatedtechnologies that cannot be copied. We will expand

Foundation
Businesses

41%

24%

Material

Quality of Life

Capital Return Indicators
ROE

ROIC
10.0

(%)

(%)

10

the business of our leading-edge business groups.
Our foundation businesses will also work to bolster
their business foundations by thoroughly strengthening differentiation capabilities and making capital
investments to enhance supply capabilities.

Nutrition SU

Material SU● Construct new dairy product plant● Increase biodegradable polymer capacity● Construct new probiotics product plant● Increase MS capacity● Increase coenzyme Q10 capacity● Increase PVC capacity● Increase overseas food plant capacity

10
8.5
7.8

8

6

8

7.1
5.7

6.3

CAPM
6

4.6

6.1

4

2

2020

2021

2022

2023

2024

Kaneka Integrated Report 2023

2025

(Fiscal year)

0

Health Care SU● Construct new catheter plant● Increase blood purification device capacity

2(Plan)

28

5.5

5.1

Fiscal 2023-2025
Investment plan

7.5

WACC

4

0

7.7

2020

2021

2022

2023

2024

2025

(Fiscal year)

300 billion yen

Quality of Life SU● Increase high-performance polyimide film

capacity● Increase biopharmaceutical capacity● Increase optical film resin capacity● Increase mRNA capacity● Increase PV heterojunction cell capacity● Increase in small molecule● Increase modacrylic fiber capacity

pharmaceutical capacity(Plan)

Kaneka Integrated Report 2023

29

The Path ofHybrid Management

Management Strategies

We bring innovation to lifestyles and the environment by harnessing the unlimited
potential of chemical materials to help communities achieve sustainability.

Earthology Chemical Solution
Material Solutions Unit

Quality of Life Solutions Unit

To support the advancement of life and the environment by drawing out the richness of materials

To produce the leading edge of the enhancement of the quality of life through the power of materials

Material Value Creator

Quality of Life PathfinderSocial issues to be solved

AchievingsustainablemobilitySocial issues to be solved

Improving
convenienceand comfort

Solutions provided by the Material Solutions Unit
[Automotive] Lightweighting and increased fuel efficiency[Aerospace] Lightweighting and increased functionality

Major productlines by
Solutions
Vehicle (SV)[Social infrastructure]
Infrastructure development in response to global
population growth and urbanization

KanevinylTM

Kanevinyl™

(Billions of Yen)

600

0

36.4

45
27.4

■ Segment net sales

30

60

49.0

2021

333.9

2022
Operating income (right scale)

Kaneka Integrated Report 2023

Major productlines by
Solutions
Vehicle (SV)Foam & Residential Techs SV

PV & Energy management SV

Processing aids/Specialty
additives

Polypropylene foam made withthe bead method

Roof-integrated photovoltaics

TM

TM

450.0

●

30
15

2025＋X (Fiscal year) 0●

Kane Ace PA

Eperan-PP[Transportation solutions]
Products requiring temperature control,
such as pharmaceuticals

Polystyrene foam made with thebead method

KanepearlTM

VISOLATM, others[New functional textiles]
Textiles that make living spaces
more vivid

Photovoltaic power generation systems
for public and industrial installations

GRANSOLATM

Performance Polymers (MS) SV

E & I Technology SV

Performance Fibers SV

Silyl-terminated polyether

Super heat-resistantpolyimide film

Materials for hair accessory
products

KANEKA MS POLYMERTM,
KANEKA SILYLTM●(Billions of Yen)

150

Kane AceTMB,
Kane AceTMM

PVC-PVAc polymers

Segment Net Sales/Operating Income

299.9[Digital devices]Lightweight, compact, wearable,high performance

Impact modifiers

Kaneka XELTM,
KanevinylTM

300[Energy saving]ZEH/ZEB design and construction

Chemicals

Cross-linked PVC

450[Environmental issues]
Solving the marine microplastics
pollution problem

Performance Polymers (MOD) SV

Polyvinyl chloride

Contributing to arich life

Solutions provided by the Quality of Life Solutions Unit

Vinyls and Chlor-Alkali SV

Caustic soda,
sodium hypochlorite,hydrochloric acidContributing to
the development ofsociety throughtemperature control
technology

Contributing
to a smarter
society andsmarter lifestyles

Contributing to
comfortablelivingProtecting
the Earth’s
Environment

Acrylic silicon polymer

KANEKA GEMLACTM

Strengthening the glocal supply
system of local production for local
consumption
Developing new products andproviding solutions that meet the needsof each market.
Shifting to high-value-added areas

Optical acrylic resin

Kaneka optical acrylic
resin

PixeoTM, ApicalTM

KANEKALONTM

Performance fibers eco fur

KANECARONTM

Segment Net Sales/Operating Income(Billions of Yen)

(Billions of Yen)
60

400
47.0

300

360.0

200
100
0

16.9

169.1

2021

■ Segment net sales

16.1
172.8
2022

●

Providing a wide range of solutions
using the power of superior materials
and unique services●

Business expansion leveraging
breakthrough technologies

45
30
15

2025＋X (Fiscal year) 0

Operating income (right scale)

Kaneka Integrated Report 2023

31

The Path ofHybrid Management

Management Strategies

By adopting a unified approach to food and medicine that is defined by a focus on chemistry,
we provide innovative solutions that empower people to live healthier lives.

Active Human Life Solution
Health Care Solutions Unit

Nutrition Solutions Unit

To create a world where advanced medical means are available to as many people as possible

To re-innovate food and health

Medical Edge Explorer

Nutrition Value Chain Innovator
Social issues to be solved

Social issues to be solved

Contributing to
the fields of
drug discovery
and pharmaceuticals

Early applicationand promotionof regenerative
medicine andcell therapy

Advancing
medical care

Contributing to
the reduction ofhealthcare
costs

Solutions provided by the Nutrition Solutions Unit

Solutions provided by the Health Care Solutions Unit
[Leading-edge pharmaceuticals]
Chromatography resin for purification of
monoclonal antibody, biopharmaceuticals,
nucleic acid pharmaceuticals[Regenerative medicine and cell therapy]
Early application and promotion of regenerative medicine and cell therapy
Automated cell culture system, drug discovery support

Major productlines by
Solutions
Vehicle (SV)

Medical SV[Leading-edge medical devices]Drug-coated balloon[Small molecule pharmaceuticals]
Active pharmaceuticalingredients, generics

Balloon catheter for
vessel stenosis dilatation

Adsorption type blood
purification device

Rheocarna

TM

Regenerative medicine and cell therapy Genetic diagnostic

Cell washing concentration products
system(Billions of Yen)
43.0

50

200
150

30

50
0

15.7

2021

160.0
70.8

58.9

Segment net sales

32

●

40

12.7

2022
Operating income (right scale)

Kaneka Integrated Report 2023

Pharma & Supplemental Nutrition
SV (Supplemental Nutrition)

Foods & Agris SV

Affinity chromatography resin for
purification of monoclonal antibody
KANEKA KanCapTM series

Dietary ingredients

Dietary supplements

Milk/Milk beverages“Milk for Bread” series

Watashi no ChikaraTM
Q10 yogurt

Products and services
for biopharmaceuticals

Transdermal medicine

Dietary ingredients

Dietary ingredients

Margarine/Shortening

Whipping cream/Cream forkneading and other uses

(AB-Biotics probiotics)(Licorice glabra polyphenol)

Kaneka UbiquinolTM

Watashi no ChikaraTM
Supplement series

FloradaptTM series

Kaneka GlavonoidTM

Segment Net Sales/Operating Income(Billions of Yen)

100

Major productlines by
Solutions
Vehicle (SV)20
102025＋X (Fiscal year) 0●[Food production support]
High-performance fertilizer, fish meal
substitute feed

APIs and intermediates
for small molecule
pharmaceuticals

Segment Net Sales/Operating Income
250[High-value-added foods]
Functional oils and fats, antifreeze materials[Dietary supplements and health foods business]
Dietary supplements that help maintain andimprove healthPharma & Supplemental Nutrition
SV (Pharma)

Medical device

Solving the
problem of foodshortages

Aiming for
better food

Improving QoL

Accelerating R2B and promoting the useof external resources through activities
such as M&A and open innovation
Delivering unique, cutting-edge medical
solutions to global markets(Billions of Yen)

Delivering solutions that contributeto production in the fields of fooddiversification, food enrichment, disease
prevention, wellness, agriculture,
livestock, and fishery●

Using digital technology to strengthen
customer contact points and brands

45
280.0

200

24.0
162.6

100
5.1
0

2021

Segment net sales

177.3
7.6
2022

30

15

2025＋X (Fiscal year) 0

LACHENTETM/FRANJETM●(Billions of Yen)300

NOVATM, EMPERORTM/
EVER LIGHTTM

YogurtOperating income (right scale)

Kaneka Integrated Report 2023

33

Management Strategies

R2B Strategies

Accelerating the Flowfrom Research to Business● Impactful● Innovative

Three Crises● Implementable

Resolution of Social Issues

Environment /EnergyKaneka has delivered value to society through “hybrid management.”
This approach involves fusing the functions of research and business to create uniqueproducts and services, implementing them and expanding their scale.

Social Implementation of
New Materials and Systems

We will promote this fusion of research and business and further strengthen this mindset,
which is an evolution from R&D to R&B.
We will further accelerate the flow from research to business, from “R&B” to “R2B.”

Key Technologies and
Key Drivers for the Future

Actions to embody the concept of Kaneka as“Trial & Error experiment driven company”
Promoting innovation
through three “I”s

Open Innovation
Self-developed
Technologies with
Introduced Technologies● Impactful● Innovative● Implementable

A group of individuals who believe in serendipity andset
Mindset”
setthethestagestageforforhappenstance
happenstancewith
with“Scientifi¬c“Scientific Mindset”

From R&D to R&B,
and on to R2B

Drug-coated balloon
technology

Clustering
domains

Microbial biopharmaceuticalproduction technology

Born small and grow big● Social implementation

Precision polymerization technology

Heat-resistantcomposite materials

Biodegradable
polymerSuper heat-resistantpolyimide film

Aerospace andaircraft materials

Biodegradable polymer

Energymanagement

OLED Lighting
devices

Next-generation
breeding technology

WellnessResin foaming technology

Bioorganic synthesis technology

Roof-integrated
photovoltaics

Organic LED lighting

Genome edited crop

Food production
supportCatheters

Regenerative medicine
and cell therapy

High-performance
fertilizer

Drug-coated balloon
catheter

iPS cells / Stem cells

Biotechnology

Adsorption separation technology

Macromolecular technology

Polyimide resin

Cell separation and culturing technology● Global research network● Solution provider

Food

Functional film processing technology
OLED device designingtechnology

Powder granulation technology
Resin modification / blending technology

Self-developed
Technologies
Fermentation technology

34

Kaneka Integrated Report 2023

Spinning technology

Metal microfabrication technology

Thermosetting resin
compounding / processing technology

Thin-film formation technology

Kaneka Integrated Report 2023

35

Management Strategies

R2B Strategies

R2B+P
A Support for Hybrid Management
Hybrid management in various technologies and fields has been key to our growth.
Focusing on the concept of “life science for a healthier planet,”
we drive innovation that uses business at scale to change society.

Evolution of Green PlanetTM Biomanufacturing Technology
Advances in Green PlanetTM Molding Technology
A key challenge in terms of promoting the use ofGreen PlanetTM has been the difficulty in the molding
process. Amid developments in cultivation andcompounding technology and in processing technology, solutions are now emerging to technical challenges in our functional product groups such as
thin-walled deep-drawn blisters, films, and fibers.

Kaneka’s Biomanufacturing
Kaneka is an advanced biomanufacturing company
that started out with technologies for yeast andother fermentation. We have accumulated biomanufacturing technologies that have garnered attention
in various fields such as pharmaceuticals,

agriculture, and environmental fields.
We are enhancing our R2B system to expand ourstrengths and accelerate research and developmentin the life sciences field.

Increasing Production Capacity
We have made progress in joint development andproduct launches with major brand holders in Japan,
the U.S., and Europe. Construction of the new
15,000 ton capacity facility at the Takasago Manufacturing Site is progressing as planned toward launch.
We have also begun studies focusing on our next
phase of overseas expansion.

Kaneka’s Biomanufacturing
Contributes to Three Strategic Areas
Medical & Pharmaceutical

Food & Agriculture
Enhanced R2B
Division

Dietary supplements andlactic acid bacteria

Bio-Pharma ResearchLaboratories

Biopharmaceuticals
Regenerative medicine
and cell therapy

Regenerative Medicine
and Cell Therapy
Laboratories

Green Planet Technology
Laboratories

36

Kaneka Integrated Report 2023

Supplement & Probiotics
Research Laboratories

Organic dairy products
Food production support
Food Production Support
Strategic Unit

Green PlanetTM
Biodegradable polymer

CO2 Innovation
Laboratory

Green PlanetTM Manufacturing Process Using CO2 as a Raw Material
In our research and development to produce Green
PlanetTM using CO2 as a direct raw material, we aremaking progress in developing technology based on
gas fermentation. This research and development
was selected for the Green Innovation Fund Project
promoted by the Japanese government, and we areworking toward the construction of a demonstration
plant.
Furthermore, we are developing biomanufacturing
technology using CO2 as a raw material. We willfurther accelerate research and development with aview to combining it with our health and food technology.

Environment

Kaneka Integrated Report 2023

37

Management Strategies

R2B Strategies

A Hybrid of Food and Health

Deploying Energy Solutions

Providing Coenzyme Q10 in a Variety of Forms

Expansion to Diverse Applications

We are developing new healthy foods by combining
our food processing technology with functional foodingredients. “Watashi no Chikara (My Energy)™
Q10 Yogurt” is a food application that combines
technologies to enable the intake of coenzyme Q10
in a “reduced form” even in food.

In the photovoltaic business, we offer unique products for the architectural and automotive fields,delivering high-efficiency power generation performance and design characteristics.
Applications of these products to building exterior
walls and windows have earned strong recognition
for their contribution to mitigating climate change.

Development of Next-Generation Perovskite
Solar Cells
To increase power generation performance andexpand the range of applications, we are also focusing on developing perovskite solar cells. By combining polymer technology accumulated in the resin
area with existing silicon-type solar cell technology,
we are also developing tandem products that
achieve new levels of high efficiency in electric
power generation.

Combining Dairy Farming and Chemistry in a New Organic Dairy Farming Process
At Betsukai Wellness Farm, we are building a new
dairy farming process by combining chemical plant
operation and design technology with dairy farming.
Positioning the barn as a kind of production plant,
we provide an environment that is favorable for thecows. We then use data on each cow to maintainconsistent quality and production volume.

T-GreenTM Multi Solar, a photovoltaic power generation system
integrated with building external walls and windows, receives
the Fiscal 2023 Minister of the Environment Award for Climate
Action from Japan’s Minister of the Environment“T-GreenTM” is a registered trademark of Taisei Corporation.
(Courtesy of Taisei Corporation)

Developing the Medical Device Business through Open Innovation

Use of Data in Organic Dairy Farming
Vital data
Milking
volume/frequency

38

Kaneka Integrated Report 2023

Consistent quality
and high productivity

Acquired data

Activity level

Feeding
volumeFeeding plan

Signs of illness

Our medical device business is backed by best-inclass processing technology. A key strength ismanufacturing that targets the precise needs ofphysicians.
We are combining external technologies and tacklingchallenges in new areas as we strive to advancesolutions to meet growing demand for extending
healthy life expectancy.
In the area of catheters for intravascular treatment,
for example, we acquired Japan Medical Device
Technology Co., Ltd. (“JMDT”), making it a wholly
owned subsidiary. By integrating JMDT’s bioresorbable stents technology, we aim to expand our business in the stent treatment area.

Bioresorbable stents developed by Japan Medical Device
Technology Co., Ltd.*(Above: stent before expansion, below: stent after expansion)* A stent is a small, expandable, and tubular metal mesh that is used as a
medical device to treat narrowed or occluded coronary arteries. A catheter
loaded with a stent is transported to the treatment site where the stent is
implanted to restore blood flow. Bioabsorbable stents are taken up by the
body a certain period of time after implantation, ensuring that they do notinterfere with treatment after recurrence.

Kaneka Integrated Report 2023

39

Management Strategies

R2B Strategies

Accelerating Hybrid Management with
R2B × DX
Digital transformation in R2B

Elevating and Expanding Our Use of Digital
We are developing our human resources for eachlevel of digital use. Personnel with advanced
technical skills are responsible for leading theresolution of issues facing the entire Company
and influencing the organization as a whole.
We are advancing our development of personnel

skilled in digital technologies. To routinize theaccumulation of data and enable a large pool ofresearchers to use advanced analysis techniques,
we are building an environment for digital technologies and hold workshops promoting their use.

LEVEL 4: Driving Company-wide impact

LEVEL 3: Using for departmental challenges

We are pursuing a company-wide strategy of digital transformation aimed at creating newvalue. As we work toward transforming R2B, we are incorporating cutting-edge simulationand data analysis technologies and routinizing the use of digital infrastructure.

R2B DX leader personnel

Transforming R2B with Digital

ExperimentR2B DX Liaison Meeting (*)

2023

2025 targets

Material
Informatics (MI)3

8Process Informatics

5

14

Ensure that the number of personnel who are assigned to
specialized teams and who lead digital transformation initiatives on key issues for the Company corresponds to thenumber of research and development departments

Data continues to begenerated 24 hours a day,allowing researchers to carryout their intended actions
without any time constraints

Participation by R2B personnel
2023

2025 targets

10%

20 %

* Online exchange meeting to share use cases and technical issues

Aim to have several personnel embedded within each department who are assigned to each team and work with digitaltransformation leaders to apply analysis technology

LEVEL 2: Seeing the results of applying data
Results of using electronic lab notebooks

Analysis

Qualitative data is also
accumulated as digital data
and used for creating
intellectual property andplanning the next experiment

Advanced analysis technology
is used to obtain insights evenfrom limited data, so that thesecan be directed toward the next
experiment

Number of times analysis program used

Accumulation(Times/ month)
4,000

Routinize data accumulation
We have also put in place a mechanism for importing analog data, increasing the number of electronic
lab notebooks registered.

25 target

3,000

2,000

Promoting data analysis
In fiscal 2023, we started a workshop for mastering
the MI program.
Use by participants has helped to increase use of
the analysis program.

23 2H (forecast)
1,000

23 1H
20FY 21

0

0

200

22

400

600

800

1,000

Number of registrations of data using electronic lab notebooks (Items/month)

Research and development timeframe shortened to 1/3
LEVEL 1: Understanding the value of using data

Accelerate value
creation40

Kaneka Integrated Report 2023

Scale up to the next production and business phase
Develop applications for other fields
Creation of intellectual property rights,

etc.

Attendance of e-learning course on DX fundamentals
2022

2025 targets

80 %

100 %
Kaneka Integrated Report 2023

41

Management Strategies

R2B Strategies

R2B Intellectual Property Strategies

Intellectual Property × DX: Upgrading Our Operations through DX
Using AI in Patent Searches

We steadily capture the output of our activities and secure intellectual property rights,
striving to acquire intellectual property such as results and know-how.
In addition, non-research employees also understand the importance of intellectual
property and use it in their work.

We have started using AI tools in patent searches.
For example, in our pre-application technology
survey in fiscal 2022, about 20% of the survey was
carried out using AI tools. We have also introduced
AI tools to the patent search work done by R2B
members, which has reduced the labor hours

required for the search. By combining the know-how
of the Intellectual Property Department with AI
tools, we maintain the quality of investigations andcontribute to improving the efficiency of researchand development.

Basic Policy of Intellectual Property
Number of Japanese Patents Held

Number of Overseas Patents Held(No. of patents)(No. of patents)

4,000

4,000
3,319
888

3,000

2,000

860

867

1,608

1,582

1,638

539

558

575

274 11

267 12

269

2,000

1,000

0

2020

Material SU

2021

1

2022 (Fiscal year)

Quality of Life SU

0

Health Care SU

3,379

923

956

3,000

1,000

10

3,473

3,467

3,354

3,285

862

1,463

1,520

1,565

580

587

607

467 2

441 2

343

2020

Nutrition SU

2021

2022 (Fiscal year)

OthersIn fiscal 2022, we were newly granted 305 Japanese patents and 243
overseas patents.
At the same time, we actively abandoned unused patents to manage
our intellectual property expenses
efficiently. At the end of fiscal 2022,
the number of patents held was
3,354 Japanese patents and 3,379
overseas patents, roughly level withthe previous fiscal year.
In 2019, we established an employee
invention reward system for patentapplications to incentivize R2B members to apply for patents. This has led
to a rise in the number of patentapplications filed, helping to expand
our intellectual property portfolio.

Developing Human Resources for Intellectual Property
In promoting education on intellectual property, we
create content tailored to each level, from new hires
to leader roles. We are working to encourage thediscovery of inventions by investing in training for
researchers and engineers. The training aims tofoster awareness of how results obtained through

R2B+P activities can yield Intellectual Property
rights that can then be used in business. We also
provide sales employees with training on topics suchas trademarks and copyrights, as well as expanding
the range of programs aimed at using market information.

Overview of IP Education Program
SearchLeadershiplevel

Creation of rights

Management
Analysis of data use

Mid-level

Application

New hires andjunior staff

Foundation

Tool operation

Handling screening
Invention discovery

Strategy

Creation of themes
Use of market
information

Brands, contracts,
copyrights

The Intellectual Property Department’s
・Patent search know-how
・Accumulation of survey results by department

Importance

Relevance

Researchers
Engineers

AI tools
Published patent
information

Noise

Using Intellectual Property Information in Business Development
We are promoting information analysis and information utilization initiatives such as IP landscape™. In
fiscal 2022, we strengthened our efforts by establishing a new group within the Intellectual Property
Department that specializes in analyzing and using
information. This group coordinates with each business division to develop strategies for a range of

research and development and business issues. By
understanding customer value and analyzing thecompetitive environment, we aim to improve ourbusiness competitiveness.
IP landscape™ is a registered trademark of Masayuki Shobayashi, patent
attorney at Shobayashi International Patent & Trademark Office.

Using Patent Scores
We use patent analysis tools to review our patentportfolio, referencing the value of our patents. We
conduct a portfolio review that focuses on the valueof each patent, conducting an inventory check of therights we hold. In determining whether we need tomaintain the rights to registered patents, we tap
into the insights of the Company’s technology andbusiness leaders, assess the cost of maintenance,and check the objective patent score.

Contract
Trademarks andbrandsCopyright

Understanding ofsystem* Program whose scope of attendance includes sales employees

42

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43

Human Resource
Strategies

Management Strategies

Human Driven Company

The Three Pillars of Human Resource Strategies

A lean, high-quality team and merit-based appraisal➡ Our philosophy since our founding

Our growth is driven by the willingness of each employee to take on challenges.
We will achieve change by creating an environment of openness to challenges,
providing opportunities to employees and fostering their growth.

Since its founding in 1949, Kaneka has been guided by the philosophy that utilizing the

Our human resource strategy is based on The Three Pillars: Human Resource

talents of each employee is essential for business growth. We develop our people,

Development, Promotion of Diversity, and Promotion of Wellness.

assigning, promoting, and rewarding them based on their abilities. That approach has been
key to the growth of our business.
Today, as employee attributes and values diversify, it is becoming ever more important to

Human Resource Development

develop human resources in a way that encourages individuality.

Development of human resources and leaders
centered on Kaneka 1-on-1
Since 2018, we have been carrying out Kaneka 1-on-1,
a system that aims to drive company growth throughpersonal growth by “lighting a fire in people’s hearts.”

Ambition
A company whose uniquetalents tell a story

Trust & Respect
Kaneka Group Employees and Consolidated Net Sales(No. of employees)(Billions of yen)

16,000800

12,000

600

8,000

400

4,000

200

0

2000

2005

Kaneka (non-consolidated)
Group companies in Japan● Consolidated net sales (right scale)

44

Kaneka Integrated Report 2023

2010

2015

2020

2022

Promotion of Diversity

Promotion of Wellness

By going beyond attributes and tapping into
diversity, we bring forth new ideas. In this way,
we aim to continue delivering unique Kaneka valuethat amazes the world.

We are working to improve the wellness of each
employee and of our organization. At the heart ofthis are the ties between our employees.

(Fiscal year) 0

Overseas Group companies

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45

Human Resource
Strategies

Management Strategies

Human Resource Development
Development of human resources and leaders centeredon Kaneka 1-on-1

Training Content Renewal and Change
Training for Newly Appointed Executives
We provide opportunities for new executives to learn about leadership and management, mainly in the first year
following their promotion.

Examples of Specific Initiatives

Kaneka 1-on-1
We introduced Kaneka 1-on-1 in 2018 with the aimof using personal growth to drive the Company’s
growth.
A pillar of our human resource development is theidea that “people grow through their work, while
companies grow through their people.” Our
personnel system, which evaluates goal setting andpersonal growth, is based on this concept.

Adding Further Depth
We are continuing efforts to enhance the quality of dialogue so that we can add further depth to Kaneka 1-on-1.

Examples of Specific Initiatives
Holding workshops for business division heads
By allowing business division heads to reaffirm the aims of Kaneka 1-on-1, these workshops help toanchor the system in the organization.
Ongoing 1-on-1 training for executives
We provide training for supervisors to enable them to improve their coaching skills and enhance thequality of their dialogues (a total of 594 people have undergone the training).
Various forms of 1-on-1 experiments tailored to different workplace situations
We are experimenting with 1-on-1s tailored to different workplace situations. For example, in addition to
the usual 1-on-1s between supervisors and direct reports, department heads conduct 1-on-1s with all
members who are not direct reports. Going forward, we will expand our success stories horizontally toother workplaces so that we can raise the quality of our 1-on-1 dialogues across the entire organization.

Developing the Next Generation of Leaders through Hitotsubu-no-Tane Momi Juku
Hitotsubu-no-Tane Momi Juku, our training program
led by top management, aims to train the next
generation of management leaders. The chairman,
president, and executive vice president join all
sessions, a total of 13 days (about 100 hours) over a
period of 8 months, directly giving advice. We areworking to increase the participation of women in
executive positions and to develop candidates who
could become female leaders. Since the program
began, a total of 26 division heads have been chosen from among the participants.

Workshops on creating a rewarding workplace
Held to ensure that executives understand their roles
and responsibilities and direct them toward creating a
positive workplace culture.
Leadership Challenge Training
Aims to teach leadership fundamentals that can be put
into practice to establish conduct.
Lecture for newly appointed executives by
Independent member of the board Yuko Sasakawa
Independent member of the board Yuko Sasakawa
gave a lecture on the perspective and mindset
required of a leader.

Expanding Learning
Opportunities
We have expanded our training
curriculum with language training(English and Chinese) and e-learning so that we can meet thediverse learning needs of ouremployees.
We plan to ramp up our investment in areas such as digital
education and global humanresource development by 1.5
times over the next five years.

Results of Company-wide Training in Fiscal 2022
Others2%

Leadershipdevelopment27%

e-learning
17%

Total amount:
200 million yen
Kaneka 1-on-1
and career design
training
8%
Level- andfunction-specifictraining
29%

Language training(English and Chinese)17%

Number of Participants in Hitotsubu-no-Tane Momi Juku

46

Fiscal year

2019

2020

2021

2022

2023

Cumulative total since
start of course

Number of participants

12

12

12

12

12

109

Of which, female

0

0

3

3

3

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Human Resource
Strategies

Management Strategies

Promotion of Diversity
Going beyond attributes to a diversitythat nurtures individuality
We are promoting diversity with the aim of making Kaneka an organization

Acquiring Diverse Experiences and Expertise
Mid-career Hires by Field(Persons)

(%)

49

100

38

80

40

72
34

60

25

51

100100
100
100

40

100
84

Percentage of female
executives (target):Fiscal 2026 11%

80

80

12
11.4
64

44 43

42
40
29

20

0

9

9.1

36

33

6

4.9
4.1

3.8

2021

6.8

3

2022

The first level of assistant managers

2023(Forecast)

2024

2025
(Plan)

Executives● Percentage of female executives (right scale)

2026

10

28
19

2019

17

2020

Research and development

2021

16
2022

Manufacturing and engineering(Fiscal year) 0

We are steadily increasing the number of female executives and female
first level assistant managers (executive candidates). We are promoting
the active participation of women
through our systems and also by
raising awareness. Such initiatives
include providing systems to supporta healthy work-life balance, facilitating communication with women insenior ranking positions, and efforts
to encourage male employees totake childcare leave.

2023(Fiscal year) 0(Forecast)

Sales, management, etc.

Merit-based Promotion
Since Kaneka was founded, we have promoted
people to executive positions based on their ability
and regardless of their educational background. The
same applies to the number of years of service.

About 20% of our executive positions are now heldby mid-career hires. We will continue to appoint
people from diverse backgrounds to executive
positions.

Composition of Executive Team by

Percentage of Executive and First Level Assistant Manager

Educational Background(Executive Candidate) Positions That Are Held by
Mid-Career Hires

5%(Fiscal year)

11%
6%

rehired at retirement age.
Every year, more than 90% of Kaneka’s senior
employees choose to be rehired.

37%
Fiscal 2022

2022
742 persons

176

2010
672

The ﬁrst level ofassistant managers

Promoting the Active Involvement of Senior Employees

High school
Technical college/
Junior college
University/
Four-year college
Master’s degree
PhD

Executive
position41%

In 2021, we introduced a job-based system forsenior employees. The system matches departmental recruitment needs with the duties and work
styles desired by senior employees when they are

13

3● Percentage of career hires (right scale)

60

60

2

9
0

20

31
13

5

15

24

34

20

(%)

43

22

28

(Persons)

In recent years we have recruited
mid-career hires across a wide rangeof fields such as research and development, manufacturing, engineering,sales, and management. The numberof mid-career hires is continuing on
an upward trend.
We will continue to aim for over 40%
mid-career hires each year as wework to diversify the experience andexpertise of the members of theorganization.

30

42

Female Executives and Candidates

Percentage of career hires(approximate):
Over 40% each year86

where diverse employees with different talents can create new value.

Active Participation of Female Employees

50

46

93

2022
485

163

2010
0

New graduate hires

20

521
40

Mid-career hires

60

80

117

100
（%）

Reflecting Diversity Efforts into Evaluations of Executives
From fiscal 2023, we added diversity (diversificationof human resources in one’s own organization) as a
new evaluation item in evaluations for executive
positions. At Kaneka, we see diversity as encompassing not only promoting the advancement of48

Kaneka Integrated Report 2023

women, but also creating a supportive workplace
and the promoting diverse human resources. With
this in mind, we encourage the promotion of diversity in each organization from an evaluation standpoint
also.

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49

Management Strategies

Human Resource
Strategies

Promotion of Wellness

Sports × Kizuna Challenge

Employees who thrive in taking on challenges;
organizations and groups that are connected by ties
At its core, the promotion of wellness focuses on enabling each coworker
in the Kaneka Group to work with energy and enthusiasm.

With the theme of forming ties through sports, we provide opportunities to take on challenges toward big goals.

Training Plan

The Hokkaido Marathon

The participants who gathered had a wide range ofgoals from improving their health by addressing alack of exercise to completing a full marathon. They
enjoyed socializing while working up a sweat under
the guidance of a professional coach.

Kaneka sponsored this event as a Premier Partner.
Around 100 runners from the Kaneka Group took
part, while many other employees turned out tocheer them on.

Promotion System
The Engine of Sustainability Management will lead a company-wide task force.

Goals of Our Vision for Health
Coworkers

Organization

Employees who spend their healthy andvibrant lives, and work on their jobs

A workplace where everyone can work healthy and freely as
one team, and each person can develop and show the fullpotential of one’s unique character and ability

Measures for Maintaining and Promoting HealthThose in goodThose with somehealthabnormality
Human Resources Dept. /Personnel at each site / LC

Measures for Maintaining and Promoting HealthPrevention of lifestyle-related
and other diseases

Run, Run, Run. Kaneka

Mental health

Ties

Environmental improvement

Collaboration of personal health activities and those on an organization basis
Rules of Employment

Various health promotion seminars

Welfare measures
Stress care
Consultation service
Thorough examination

Labor management support

Specific health guidance

Follow-up by nursing staff

Programs that help
employees improvetheir health while
enjoying being together
Programs that help
employees feel
connected to each other

Working hours

Aimed at strengthening ties throughout the Group,
this is the largest sporting event in Kaneka. A record
number of around 3,500 people gathered at the
Nagai Stadium for the event in 2023. For the firsttime in four years, we welcomed visitors from ouroverseas Group companies (242 people from 14
countries). The program included a group Ekiden andother activities, and a great time was had by all.

Smart work
Workplace environment
Encouragementof certification

A Casual Approach to Health Promotion
We provide opportunities for all employees to engage in health promotion in a casual way.

Wellness Promotion System
The Engine of Sustainability
Management
Discussion and determinationof Company-wide policies
General Manager: Executive
Vice President

Approval/
Instructions

Global Safety Integrity Center
Global CSV (Quality Environment) Center

Monitoring/
Improvement
guidance andsupport

Improving occupational safety and healthAll organizations
In charge of managing health
Leader of each organization

Reporting/Consultation

Human Resources Department/Work Departments
Occupational health staff

Walking Project
Walking Challenge 30
・Ahead of the day, each participant set a goal for the Ekiden event with the aim of improving their physicalstrength and health. (Participants: 720)
・On the day of the event, participants walked 3.3 km (about 40 minutes) along the same course as the Ekiden runners.
(Participants: 128)

Consultation
Each employee

Managing health of people and organization

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51

Human Resource
Strategies

Management Strategies
Work Culture Transformation
Kaneka’s goal in work culture transformation is toenable smart work. We foster an environment andculture where employees can refine their imagination,

creativity, and intuition, to work more efficiently andproductively.

Creating a Workplace that Fosters Creativity and Enhances Efficiency
At our head offices in Tokyo and Osaka, we haveswitched to a free address system. By encouraging
people to gather and move around, we aim to provide a workspace where communication that had
become fragmented can be restored. We plan to rollout this system to other locations such as officebuildings at our manufacturing sites so that we can
improve the work environment.

Shifting to Creative Work through the Use of Digital
By using AI and data, we will not only enhance
operational efficiency and digitalization, but also
create new value and transform our corporate
culture.
As well as developing a digital infrastructure, we will
Enhancing overall
operational efficiency

foster a digital usage culture. In fields other thanmanufacturing and research and development, suchas sales, marketing, and logistics, we will work topromote work culture transformation.

Concept of Work Culture Transformation

Shifting from basic work tocreative work

(%)

100

Streamlining

Fiscal 2020

Fiscal 2030

30 % reduction

20 %

70 %

Workload

Fiscal 2030

Basic work

(Compared to Fiscal 2020)

We are promoting
automation throughthe use of real-timedata and AI in planningsystems to optimize
the entire value chain.
We are also developing a data platform tosupport self-service
digital transformationin each division.

Shift tocreative work

0

2020

2030

(Fiscal year)

Future Image of the Value Chain
Sales and marketing

Product development/
technology services

Customer management system

Development/
technology services

Order digitization

MI simulation

Digital services

Manufacturing
受注

Orders received

Logistics

Shipping and delivery
systems

Supply and demand
production management
Process management

Fields where AI is being adopted

Generative AI

Customer needs analysis

Trend analysis

Profit structure analysis

Production/sales/inventory
data analysis

Data platforms

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Management Strategies

Global Strategies

Think Global, Act Local
Our global network enabling business development deeply
rooted in local communities
We aim to become a company that delivers unique technologies and products all over theworld, in order to save human lives and resolve social issues. To do so, we promote
activities deeply rooted in local communities worldwide. We advance transculturation froma global perspective. There is no border in chemistry, and when we do business in foreignland, we focus on conducting local-based business (glocal business) by overcoming
cultural differences. Our goal is to become a company with a global presence by offeringvaluable solutions to the world market in a timely manner.

Global Network Strategies
Globally, our regional headquarters take the lead in
drawing up and executing growth strategies withscale and speed. Tapping into the strengths of ourGroup companies with their local characteristics

enables us to create business models matched tomarket needs. Through this interlocking of our regional and local operations, we are accelerating therealignment and growth of our global business.

Function of Headquarters in Each Region
EuropeAsia

The Americas

Within Europe, target environment and wellness as business
opportunities, working to expand
the biopharmaceutical businessand develop environment-related
products.

Strengthen local marketing system and map out a market-out
type growth strategy that matches growing and expanding market
trends.

Use M&A, alliances, etc., mainlyin the healthcare and electronics
fields, to develop large-scalebusiness.

Kaneka Europe Holding N.V.

Kaneka Asia Co., Ltd.

Kaneka Americas Holding, Inc.

Reinforcement of
production / sales systems
with deep local roots

Research anddevelopment,
open innovation

 cceleration of business development
A
based on local perspectives
Market expansion in
emerging countries
Production systems
based on local
characteristics

E stablishment of R2B bases
focused on local needs
Creation of new globally competitive
businesses
Use of outside technology in addition to
Kaneka technology

Discontinuous growth driven
by the fusion of new technologies
Realization of technology and value
chain synergies
Collaboration with partners capable ofsharing value on a global scale

Kaneka’s
GlobalStrategies

Group Companies with Distinctive Strengths

M&A,
reinforcement ofalliancesTraining of personnel
with global skills
T raining of people with enhanced
international skills
Evolution as a multinational company

We establish a headquarter in each region in order to make speedy business development that makes muchcloser connection with the local community.
Each of 4 “Solutions Units” draws up a global strategy for products and services it handles that incorporates
both domestic and overseas subsidiaries, and develop business activities based on such strategy.

AB-Biotics, S.A.

Kaneka Eurogentec S.A.

AB-Biotics sells unique probiotic products that haveeffects such as reducing the risk of disease.
It is the center of our global probiotic business due
to its robust research and development capabilities,
which use original probiotic strains owned by theCompany.

This biopharmaceuticals CDMO has world-classpharmaceutical production technology. Kaneka
Eurogentec provides drug discovery companies
around the world with plasmid DNA and proteins as
active pharmaceutical ingredients for biopharmaceuticals.
Kaneka Eurogentec, as the core of our biopharmaceuticals business, is leading the strengthening ofdifferentiated technology and driving businessexpansion.

We have approximately 50 overseas subsidiaries, as well as 2 research institutes in 20 countries overseas. The
consolidated number of employees is approximately 11,500, and among them, 3,000 are working in overseas sites.

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Management Strategies

Manufacturing Strategies

From Practical Applications at the
Manufacturing Site,
We Will Create the Future

Manufacturing Means Applying R2B+P
Enhancement of four planning functions and capabilities

Customers

The Manufacturing Site Is a Value Center

Marketing & Planning

Marketing & Technology(Planning (A))(Planning (C))

We will build up a Kaneka’s unique manufacturing site by fusing
the creativity of technology and innovation with digital technology.
With a manufacturing-first approach based on the concept ofa safe and reliable plant, we will focus on maximizing and monetizing our business.

Business
Growth Plans(Planning (D) Center)– Sales and profit
expansion –Realizing a Plant that Creates New Value and
Embodies Sustainability
We will speed up our efforts in digital transformation,
incorporating cutting-edge technology to evolve our production plants,
and increase the speed and scale of our commercialization of new products.

Sales

Productions
Marketing & Technical Service

To achieve carbon neutrality, we are tackling the challenge ofcompany-wide efforts and advancing each theme ahead of schedule.
With our energy solution technology, we will also contribute to decarbonizing society,starting with local governments.

Integration of Manufacturing and R2B+P
By strengthening our R2B+P initiative, which strongly integrates R2B
and manufacturing, and scaling up our creativity as part of our routine,
we will quickly and competitively implement new technologies.

(Planning (B))
Designing of Production
Designing of Functionality
Designing of Costs

Planning (D) (Center) ≧ (A)＋(B)＋(C)Dynamism in Management(Dynamic Network Organization)

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Management Strategies

Manufacturing Strategies

Carbon Neutrality

Progress to Date - Identifying GHG Emissions Reduction Themes -The Kaneka Group aims to reduce Scope 1 and 2 GHG emissions, which include
domestic and overseas Group companies, by 30% by 2030 (compared to fiscal 2013)
and to achieve carbon neutrality by 2050.

In fiscal 2023, we carried out research activities into
GHG reduction themes at our domestic and overseas Group companies for the GHG emissions

reduction of 30% set in our 2030 target. We expanded our reduction themes, including potential ones,
to a cumulative total of 720,000 tons.

GHG Emissions Reduction Theme Potential

For Scope 1 emissions, we will upgrade our coal boilers to gas turbine co-generationequipment, thoroughly save energy through the efficient recovery of plant exhaust heat,

Fiscal 2022
Uncovered potential

Fiscal 2023
Additional potential

GHG emissions
reduction theme
Total potential

1) Fuel conversion

310,000 tons–

310,000 tons

2) Energy saving

90,000 tons

110,000 tons

200,000 tons

3) Process innovation

100,000 tons–

100,000 tons

4) Use of renewable energy, low CO2 emission factor
for electricity and steam power

40,000 tons

70,000 tons

110,000 tons

Reducing GHG Emissions Total

540,000 tons

180,000 tons

720,000 tons

Itemand promote process innovation for energy-intensive equipment.
For Scope 2 emissions, we will promote the use of renewable energy andlow CO2 emission factor for electricity.

Additional potential

180,000 tons

Fiscal 2013
GHG emissions(actual)2023 potential

720,000 tons
2022 potential

Decarbonization (310,000 tons)
3 years ahead of schedule

Scope 1

540,000 tons

950,000

1.08 million
tons

tons

Scope 1

480,000 tons
Scope 2*

Scope 2*600,000 tons

600,000
tons

1) Fuel Conversion

3) Process Innovation

We are planning to move our decarbonizationahead of schedule by three years (expecting toachieve it by 2027 instead of 2030).
Takasago Manufacturing Site plans to install a newgas turbine co-generation system in 2027 as part ofour decarbonization and GHG emissions reduction
measures. In addition, we will, as appropriate, selecttype of fuel, including non-fossil fuels, and theamount of electricity that we purchase, balancing
economic efficiency and environmental contribution.

The vinyl chloride monomer production innovation
pilot will begin demonstrating GHG reductions in
2024. We plan to include the production of Green
PlanetTM in our uses for hydrogen and CO2 in the
production process.

2) Energy Saving

2013

Total 1.55
million tons

2027

2030

2050

2030 GHG emissions (target)

Total 1.08 million tons

We investigated the implementation of exhaust heatrecovery technology using heat pumps, including at
our domestic Group companies. Together with ourongoing energy saving efforts, this has added apotential reduction of 110,000 tons.

4) Use of Renewable Energy, Low CO2
Emission Factor for Electricity and SteamPower
As a Scope 2 reduction measure, Kaneka Malaysia
will switch to biomass-derived steam in 2025.
Kaneka Group will expand the installation of inhouse photovoltaic power generation systems on
plants and other premises in Japan and overseas as
we promote the use of renewable energy. At ouroverseas plants, we plan to use a low CO2 emission
factor for electricity.

30% reduction compared tofiscal 2013

* Since the CO2 emission factor for electric power companies is subject to change, we expect our emissions to be equivalent to those of fiscal 2013.

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Management Strategies

Manufacturing Strategies

Digital Transformation (DX)We will transform our operations to meet the needs of the new era. We will achieve digitaltransformation by promoting production innovation using digital technology and byadvancing a digital platform for business throughout the Company.

DX roadmap

2020

Creating new value

2030

Digital marketingTechnology establishment and mass
production through R2B+P

Production DX & Carbon Neutral
Project Committee

Reform of contacts with markets andcustomers

Progress

Field Operation Zero
Zero on-site work in the plant

Shift to monitoring-driven operations

・Expanding field-led digital themes(Results: 30 projects, approx. 600
million yen/year)

・Setting goals for development ofbasic technologies for optimizing
production plans
・Achieved FOZ at Tomatoh
Manufacturing Site

Stabilizing production process

Data/communication

Strengthening digital platform
Strengthening infrastructure

infrastructure, use of AI
Developing human resources for AI and datautilization, and DX planning

Developing digital talent

At the Tomatoh Manufacturing Site
(Hokkaido), which is scheduled forlaunch in May 2024, we will improve
productivity by fully automating the
medical device production line.
We will promote the introduction ofrenewable energy using our own
photovoltaic power generation
systems and realize a manufacturingsite with a low environmental impact.

・Started study of carbon footprint

Optimizing costs through production
and logistics

Using AI to check operational safety

Increasing Productivity with Field Operation Zero

・Core system (ERP) update

Field-Led AI and Data Utilization That Is Unique to Kaneka
At each site, highly trained digital
personnel take the lead in using AI
and data infrastructure to solve
problems. As of the end of fiscal
2023, we have taken on 120
themes, of which 30 projects haveyielded results of approximately 600
million yen per year.
We aim to train up to 1,050 AI anddata utilization personnel by 2030,
and will promote 100 themes per
year (results: approximately 2 billion
yen/year).

・Expanding human resources for AI
and data utilization

Expansion of Human Resources Utilizing AI and Data
(Cumulative total: personnel)
1,200

1,050
1,000

800

600

400

200

・Updating the internal network
・Deploying integrated data
infrastructure

530

0

320
200
120

2021

60

Digital Talent

AI Infrastructure

We are expanding the number of
personnel who can carry out AI anddata utilization in-house, including atdomestic Group companies.
Fiscal 2023 cumulative total: 320
Fiscal 2030 target: A roughly
threefold increase to 1,050

At our production sites, AI is being
implemented mainly by highly
trained digital personnel.
We are proceeding with verificationof the effectiveness and risk of using
generative AI in each business area.

Kaneka Integrated Report 2023

2023

2025

2030

(Fiscal year)(Plan)

Research and development

Strengthening Digital Platform

2022
Production

Impact(Millions of yen/year)

AI and Data Utilization Themes

Data Integration/
Communication

Optimal operation
Automatic control

Data integration: We are gradually
expanding the integrated data infrastructure that connects production
to business.
Communication: We are strengthening the communication networkthat supports digital transformation
by expanding IT devices, utilizing
images, etc.

Anomaly prediction(Equipment and quality)
Image and sound analysis
Plan optimization(Production/sales/inventory)

・Optimal automatic operation of the drying process
・Automatic adjustment of molecular weight in culture
processes, etc.
・Detecting equipment anomalies to improve operating rate
・Prediction system for foaming conditions, etc.
・Reducing losses by monitoring the coating furnace exit
・Detection of print stains, etc.
・Optimization of inventory provisions
・Production planning optimization, etc.
Total

300

200

50

50
600

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61

Business Foundation
List of Directors
Chairman of the Board(Representative Director)

Kimikazu Sugawara

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/corporate/

Corporate Governance(June 29, 2023)

President(Representative Director)

Minoru Tanaka

Member of the Board
Senior Managing Corporate
Executive Officer

Member of the Board
Executive Vice President

Kazuhiko Fujii

Basic Policy

Shinichiro Kametaka

Member of the Board
Managing Executive Officer

Guided by our Corporate Philosophy, Kaneka aims toachieve sustainable growth, improve medium- tolong-term corporate value, and build trust among all
stakeholders, including shareholders, investors, customers, local communities, vendors, and employees,
realizing optimum corporate governance to fulfill oursocial responsibility.
Kaneka believes that a working corporate governancefunction is extremely important for realizing diverse,
global business growth and maintaining the optimal
allocation of corporate resources to the R&D, production and sales activities that support that growth. It isalso essential for realizing sustainable growth together
with the medium- to long-term improvement of corporate value. From that perspective, Kaneka is working
to enhance corporate governance, both to ensuretransparency and fairness in decision-making and tobuild more dynamic management through swift, bolddecisions. Kaneka believes the following basic items
are particularly important in those efforts.
● Respecting and ensuring the equality of shareholder
rights● Collaborating with other stakeholders in the value-creation process● Ensuring transparency through the timely, appropriate disclosure of information● Strengthening the oversight and strategic recommendation functions of the Board of Directors byleveraging the independence and insight of its
independent member of the board● Appropriately communicating and encouraging
understanding of Kaneka’s corporate philosophy andpolicies among all stakeholders● Conducting a constructive dialogue with shareholders based on an understanding of Kaneka’s corporate policies

Efforts to Strengthen the Governance Capacity
Mamoru Kadokura Katsunobu DoroJun Enoki

Toshio Komori

2006–
Separation ofmanagement andexecution

Independent Member of the Board
Outside directors

Committees

Mamoru Mohri

Jun Yokota

Yuko Sasakawa

Hiromi Miyake

Internal control system
Corporate governance

Audit & Supervisory
Board Member

Masami Kishine
Shinobu Ishihara
Hiroshi Fujiwara
Yasuhiro Uozumi

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Kaneka Integrated Report 2023

Senior Managing
Corporate Executive
Officer

Akira Iwazawa
Yasuaki Nuri
Masaaki Kimura

Independence criteria
for outside directors
Managing Executive Officer

Executive Officer

Atsushi Kawakatsu
Yoshiki Takeoka
Kazuo Ochiai
Shinji Mizusawa
Kan Okabe
Osamu Ishida
Takuo Ishibashi

Yasuyoshi Ueda
Naoki Furukawa
Hiroyuki Deguchi
Isao Otsu
Masanobu Yamada
Ryuichi Maruyama
Katsutoshi Shichijo

Satoshi Suzuki
Masashi Nishikawa
Satoru Katayama
Masahiro Ueda
Etsuo Yoshiike
Riichi Nishimura

Effectiveness evaluation

2010–

2020–

2006 Introduced the executive officer system
2006 Changed the number of directors from 21 to 13
2011 Appointed an outside director
2015 Increased the number ofoutside directors from 1 to 2

2020
Increased the number of outside directors from 2 to 4
2022 Appointment of one female director
2023 Increased the number of female directors from
1 to 22015 Established the Nomination& Compensation Advisory
Committee
2015 Established the Independent
Outside Director’s Meeting

2021 Majority of the Nomination & Compensation
Advisory Committee is the Independent Outside
Directors

2006 Formulated the Basic Policy on Internal Control System
2015 Formulated the Basic Policy on Corporate Governance2013 Formulated the Criteria for Independence of Outside Directors
2016 Commenced the effectiveness evaluation on the Board of Directors

Ken Matsumoto
Shozo Ishizaka
Takeo Watanabe
Hiroshi Ando
Ryou Shimizu
Masanobu Sugawara

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Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/corporate/

Corporate Governance
Organizational Design

Corporate Governance Structure

We currently have four independent outside directors
and two independent outside Audit & Supervisory
Board Members. Since both the overseeing of business operations by the Board of Directors and auditingby the Audit & Supervisory Board are functioning well,
Kaneka has chosen to be a Company with Audit &Supervisory Board under the Companies Act.

Diagram of Corporate Governance System

General Meeting of Shareholders

Board of Directors

ReportReportIndependent Outside
Directors’ Meeting
Nomination &Compensation Advisory
Committee

Appointment

Appointment

Chairman of the Board of
Directors

Appointment

President
Audit

Management
Committee
Cooperation

Cooperation

The Engine of
Sustainability
Management

Audit &
Supervisory
Board

Internal Audit,

Internal Control
Divisions including
Operation Production, R&D, Evaluation
General Administration; andGroup Company

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Kaneka Integrated Report 2023

Internal Control
Department

Accounting Audit

Accounting
AuditorMain items
Organizational structure

Company with Audit &Supervisory Board

Term of office of directors

1 yearAdopted executive officer system

Yes

Organization that assists thepresident in decision making

Management Committee

Voluntary advisory body to theBoard of Directors

Nomination &Compensation Advisory
Committee

Other important bodies

Independent Outside
Directors’ Meeting

Directors and the Board of Directors
The Board of Directors seeks to ensure efficient andeffective corporate governance in order to realize thecompany’s sustainable growth and increase corporate
value in the medium to long term.
The Board of Directors exercises its oversight functions on overall management to ensure fairness andtransparency, as well as to appoint management
positions, evaluate and determine remuneration,
evaluate serious risks and determine strategies tocounter them, and make the best decisions on important business operations. The Board of Directors
makes resolutions on important matters related to the
management of the Kaneka Group after deliberationby the Management Committee, which includes thepresident. There are at most 13 members on the

Board of Directors. Of these, four are independent
outside directors, in principle, to strengthen the oversight function. Directors serve for a period of one year
to clearly define management responsibilities.
The Board of Directors met 14 times in fiscal 2022.
(The rate of attendance by Directors and Audit &Supervisory Board Members was 98.8%). Based on
the rules of the Board of Directors, it discussed anddecided on the mid-term management plan, annual
budget, financial policy, key personnel, quarterly/
year-end accounts, and strategic investments. The
Board of Directors also received and discussed reports on each business division with regard to progress on the mid-term management plan and themonitoring of issues.

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Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/corporate/

Corporate Governance
Audit & Supervisory Board Members and the Audit & Supervisory Board
Audit & Supervisory Board Members and the Audit &Supervisory Board seek to ensure healthy and sustainable corporate growth and to establish a structurewith good corporate governance that can gain social
trust by checking on the performance of directors inregard to their duties.
The Audit & Supervisory Board comprises four members, two of whom are independent outside members, and performs audits in coordination with the

Accounting Auditor and the Internal Control Department. Audit & Supervisory Board Members are given
space to periodically exchange views with the representative director, and monitor the state of business
operations when necessary, by attending key meetings of the Board of Directors and those of the Management Committee, which decides on the implementation of important matters, as well as division
head meetings.

Nomination & Compensation Advisory Committee / Independent Outside Directors’ Meeting
We have established the Nomination & Compensation
Advisory Committee and Independent Outside Directors’ Meeting. The Nomination & Compensation Advisory Committee discusses remuneration of Directors,
and candidates for Directors and Audit & Supervisory
Board Members, and reports them to the Board of

Directors. The Independent Outside Directors’ Meeting
discusses the effectiveness of the Board of Directors
to report to the Chairman of the Board of Directors. In
order to increase neutrality, the majority of the Nomination & Compensation Advisory Committee are theindependent outside directors.

Implementation of Business Operations
Kaneka has adopted the executive officer system toharmonize the oversight function of directors with theimplementation function of business operations, which
also facilitates decision-making and clearly defines
roles. The Board of Directors decides on key management strategies and business operations of the entire
Kaneka Group, while executive officers handle business operations in their respective areas of responsibility. The Executive Officers’ Meeting is held monthly toshare management policies and issues with the aim ofachieving management goals speedily. Division heads,
including executive officers appointed by the Board of
Directors, are given extensive authority over daily
business execution. Monthly division head meetings
are held to enable the directors and Audit & Supervisory Board Members to directly hear progress reports
from each division head. The Internal Control Department evaluates the effectiveness of internal control
and conducts an internal audit.

Selection Criteria for Directors
At Kaneka, directors are selected by the Board of
Directors, on the basis of character, judgment, expertise and experience as well as ethics, after deliberation by the Nomination & Compensation Advisory
Committee, which is comprised of directors andindependent outside directors.
We are expanding diverse businesses globally. In
order for the Board of Directors to make accurate andprompt decisions and supervise these corporate
activities, we place great importance on appointing

directors with different backgrounds such as diverse
knowledge, experience, and expertise. Specifically,
we expect knowledge, experience, and abilities related to business, global, technology, diversity andcorporate & governance. We also believe that theBoard of Directors as a whole has well-balanced
knowledge, experience, and abilities, and is composed of an appropriate number of people.
In selecting directors, no restrictions are made interms of gender, age or nationality.

Skills Matrix of the Members of the Board

Name

Position in the Company

Fiscal 2022
attendance
at Meetingsof the Boardof Directors

Knowledge, experience, and expertise
Business

GlobalTechnology

Diversity

Corporate &Governance

Kimikazu Sugawara

Chairman of the Board(Representative Director)

100%

〇

〇

〇

〇

Minoru Tanaka

President (Representative Director)

100%

〇

〇

〇

〇

Kazuhiko Fujii

Member of the Board,
Executive Vice President

100%

〇

〇

〇

Shinichiro Kametaka

Member of the Board,
Executive Vice President

100%

〇

〇

〇

Mamoru Kadokura

Member of the Board,
Senior Managing Corporate
Executive Officer

100%

〇

〇

Katsunobu DoroMember of the Board,
Managing Executive Officer

100%

〇

〇

〇

Jun Enoki

Member of the Board,
Managing Executive Officer

100%

〇

〇

〇

〇

Toshio Komori

Member of the Board,
Managing Executive Officer

–

〇

〇

〇

〇

Mamoru Mohri

Independent Member of the Board

100%

〇

〇

〇

Jun Yokota

Independent Member of the Board

100%

〇

〇

〇

Yuko Sasakawa

Independent Member of the Board

100%

〇

〇

Hiromi Miyake

Independent Member of the Board

–

〇

〇

〇

〇

〇
〇

〇

〇

Note: The above details are true as of the end of the 99th Annual General Meeting of Shareholders held on June 29, 2023.
The table above does not show all the skills of each Member of the Board.

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Kaneka Integrated Report 2023

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Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/corporate/

Corporate GovernanceAnalysis and Evaluation of Effectiveness of the Board of Directors

Total Amount of Remuneration for Directors and Audit & Supervisory Board Members
Total amount by type of remuneration

Kaneka regularly implements an analysis and evaluation of the effectiveness of the Board of Directors, anddiscloses a summary of the evaluation results. Specifically, the Chairman of the Board of Directors periodically receives reports from the Independent Outside
Director’s Meeting and opinions from the internal
directors.
Based on these reports, the current status of operations of the Board is evaluated. In the evaluation
process in fiscal 2022, the Independent Outside Director’s Meeting held discussions focusing on the operation of the Board of Directors (number of meetings

held, frequency, length, contents of information
provided beforehand, contents of agendas, deliberations, etc.), role of outside directors, information
provision to outside directors, and risk management.
Based on the discussion results, the Board of Directors conducted a self-evaluation. As a result, it has
been confirmed that the Board of Directors functions
effectively in making decisions on important mattersfor the Group such as risk management and supervising business execution. We will continue to enhancethe effectiveness of our Board of Directors througheffectiveness evaluations.

Standards for Independence of Outside Directors/Audit & Supervisory Board Members
We have defined the Standards for Independence ofOutside Directors/Audit & Supervisory Board Members to guarantee the independence of independent
outside directors and Audit & Supervisory Board

Members in practice. The standards are disclosed in
our notice of convocation of general meeting of shareholders, corporate governance report, etc.

Remuneration of Members of the Board, etc.
Matters relating to decision policies relating to thedetails of individual remuneration, etc., of Members of
the Board.

Category

Personnel
eligible forpayment

Total amount
paid

Directors(Of which, outside directors)

13(5)

Audit & Supervisory Board
Members(Of which, outside Audit &Supervisory Board Members)

4
(2)

Basic
remuneration

Performancelinked
remuneration(bonus)Non-monetary
remuneration(stock option
remuneration)

686 million yen(68 million yen)

530 million yen(68 million yen)

110 million yen(–)

45 million yen(–)

82 million yen(34 million yen)

82 million yen(34 million yen)––

Note: Amounts are rounded down to the nearest unit.
The amount for non-monetary remuneration (stock option remuneration) is the cost amount recorded for the most recent stock acquisition rights granted to eight
directors excluding outside directors.

Policy on Strategic Shareholdings
Kaneka holds the minimum amount of strategic shareholdings necessary for maintaining and strengthening
business relationships, business alliances, and capitalalliances.
Each year we periodically review our strategic shareholdings after comprehensively assessing the appropriateness of the purpose of the holdings and theeconomic rationale in terms of the returns and risks
associated with such holdings. When we determinethat a holding is of low necessity, we reduce thenumber of shares that we hold. Each year, we reporton these initiatives to the Board of Directors anddisclose an overview of them. In fiscal 2022, we soldfour listed stocks as a result of the assessment described above.
In addition, the exercise of voting rights pertaining to
the shares held by the policy will be carried out after
determining the approval or disapproval of each individual proposal after setting the exercise criteria.

Strategic Shareholdings
How this policy is determined
The Company decided on this policy by resolution of
the Board of Directors held on February 9, 2021

Fiscal 2019

following deliberation by the Nomination & Compensation Advisory Committee.

Basic policy
The remuneration of our directors is appropriate, fair,and balanced. It aligns to the medium- to long-term
interests of shareholders, increasing the motivation ofMembers of the Board toward maximizing the Company’s corporate value.
Remuneration for internal directors consists of monthly remuneration as fixed remuneration, bonuses as

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Kaneka Integrated Report 2023

Number of listed company stocks soldTotal amount sold related to decrease in
number of sharesFiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

1

4

3

4

12(*)

397 million yen

859 million yen

36 million yen

2,283 million yen

2,889 million yen* Figures for fiscal 2023 are up to the 3rd quarter

performance-linked remuneration, and stock option
remuneration as non-monetary remuneration. Individual remuneration is determined according to the job
responsibilities of each individual. For outside directors, only monthly remuneration is provided as fixed
remuneration.

Basic Policy for the Internal Control System and Status of Operation
The Company has established a Basic Policy for theInternal Control System by resolution of the Board of
Directors. We periodically assess and review thispolicy as appropriate to ensure that our internal control system is effective. In fiscal 2022, we confirmed
the status of operations with respect to (1) the compliance system and risk management system, (2) thesystem for the efficient performance of duties bydirectors, and (3) the system for management ofsubsidiaries and the system for auditing by Audit &Supervisory Board Members.

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69

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/promotion/prm/

ESG Promotion

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/risk/

Business Risks and Uncertainties

Basic Policy

Basic Policy

In 2018, Kaneka Group established the ESG Charter to
evolve its ESG management. Aiming to provide valuable solutions globally with a focus on chemistry, the

ESG Charter serves as an action agenda for each
employee to materialize our Corporate Philosophy.

Kaneka Group has formulated a basic risk management policy to respond to potential risks in business

operations, aiming for the goal of “Wellness First” tomake the world healthy.

Risk Management System
Promotion System
We reorganized our ESG-related organization with theestablishment of the Engine of Sustainability Management on April 1, 2022. It is tasked with overseeing
and enhancing ESG management. The Engine of
Sustainability Management consists of eight implementation organizational entities. These work topromote ESG and the SDGs overseeing the activitiesof all related departments across the organization. We
will work to protect the environment, to contribute to
the restoration of humanity, and to strengthen “Wellness First” health management to support a societythat nurtures life.

Diagram of ESG Promotion System
President (Representative Director)

Our basic risk management policy is that each division
identifies operational risks and other types of risks
that it may face, takes appropriate preventive measures, and responds appropriately in cooperation withother relevant divisions if a risk manifests itself.
For preventive measures against potential risks including those related to ethics and legal compliance, theCompliance Committee oversees the development
and implementation of the company-wide plans.
When a risk occurs or is likely to occur, theCompliance Committee handles the risk in cooperation with the relevant divisions.
We regularly check whether the above-mentioned
activities are implemented properly to prevent our risk
management system from falling into mere formality,
and strive to maintain and improve its effectiveness.
For operational risks and other risks related to ourbusiness and financial situation, see the Financial
Section.

Enhancing Crisis Management Systems

Management Committee

The Engine of Sustainability Management(General Manager: Executive Vice President)
General Affairs (Stakeholders Relations) Department

Secretariat Division

Investor & Public Relations Department

Based on our basic risk management policy, we haveset forth Crisis Management Regulations that define
our basic system and roles for emergency response,
providing emergency examples and clarifying ranks,etc. We will continue to fulfill our social responsibility
by maintaining corporate activities while avoiding andreducing adverse effects on the Kaneka Group as
much as possible.

In preparation for an emergency, we regularly conduct
a disaster drill and a safety confirmation system drill.
We also provide employees with the Crisis Management Handbook about the initial response. This handbook explains emergency procedures: proper incident
notification, instructions, consultation, and response,
as well as the smooth flow of information.

ESG Integrated Report Bureau
Compliance Committee (Secretariat: Legal Department)
Raises awareness of corporate ethics and legal compliance and ensures that the entire Group
understands and respects these.
Safety Committee (Secretariat: Global Safety Integrity Center)Chaired by the director in charge of safety and security, this committee sets policies and goals foroccupational safety and security disaster prevention, and checks progress.
DX & Carbon Neutral Committee (Secretariat: Global Production & Engineering Integrity Center)
Accelerates initiatives for digital transformation and carbon neutrality.
Work Culture Committee (Secretariat: General Affairs (Stakeholders Relations) Department)
Promotes reform of work styles to meet the needs of the new era.
Diversity Committee (Secretariat: Human Resources Department)
Promotes company-wide policies from recruitment to training, rotation, promotion, etc., including
promotion of diversity and women’s activities.

Business divisions, staff departments, manufacturing sites, research institutes, Group companies

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Kaneka Integrated Report 2023

Strengthening of Information Security
Information systems play a key role in all aspects ofbusiness activities.
Based on our Basic Information Management Policy
and Information Management Regulations, we have
put in place a risk management system at the Kaneka
Group that is led by management. Within the IoT
Solutions Center (Information Systems Department),
we have set up an organization for information security. Through this organization, which is headed by the
information management manager who is the director
in charge, we appropriately manage information to
avoid information leakage and other risks, and promote effective use of information and efficiency inoperations.
To protect the Group’s information assets, we haveintroduced a global SOC* and strengthened our threat
detection and monitoring system (which operates 24hours a day, 365 days a year). Drawing from the knowledge of external experts, we continuously strive toenhance security levels throughout the supply chain.
In addition, we communicate our Basic Information
Management Policy, Information Management Regulations, and Information Security Guidebook to all employees through training and other means to ensurethat they understand and follow them, and provide
e-learning and education and training on targeted
attack e-mails and other topics. We also cooperatewith each department and Group companies on training for information management personnel and otheractivities as we strive to ensure that personal information and other data are properly managed.
* SOC (Security Operation Center): A system for monitoring and analyzing
threats to information systems.

Kaneka Integrated Report 2023

71

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/compliance/

ComplianceIntellectual Property

Basic Policy
Viewing compliance as an important management
issue, we implement various initiatives to ensure compliance among all directors and employees not onlywith all applicable laws and regulations, but also withbusiness and social ethics. We aim to improve our

Basic Policy
compliance activities by thoroughly implementing the
ESG Charter and the Code of Ethical Conduct, which
serve as the guidelines for the behavior of each director and employee, enabling us to build relationships oftrust with our stakeholders.

Promotion System
We have established, under the Engine of Sustainability Management, a Compliance Committee, an organization that supervises the corporate ethics and compliance of the Kaneka Group. The Compliance
Committee meets twice a year to set compliancepolicies and targets for the Kaneka Group and tocheck on progress.
We also work to oversee and direct the entire Groupon compliance matters, to check the status of awareness and compliance, and to establish and maintainthe appropriate consultation and reporting hotlines.

Internal Reporting and Establishment of Consultation Hotlines
To prevent compliance violations and ensure early
detection and prevention, we have established whistleblowing (internal reporting) services within the
Company and at outside law firms. The services areavailable to Kaneka Group directors and employees
and their families, former employees who have resigned within the past year, and businesses withwhich the Company has relationships, including partner companies and suppliers.
We have also established a consultation hotline forharassment and assigned several counselors to each
workplace, who are made up of Health Consultation

Office and Human Resources Department staff aswell as labor union representatives.
In fiscal 2022, there was one case of reporting andconsultation. Fact-finding investigations and hearings
were conducted, and the cases were handled inaccordance with internal rules. The details of the caseare reported regularly to the Compliance Committee.
In addition, we have established rules on whistleblowing and employee employment regulations to ensurethat whistleblowers and consultants are not subject toany discrimination.

Anti-Corruption and Anti-Bribery Initiatives
As a signatory to the United Nations Global Compact,
Kaneka Group has declared its commitment to “workagainst corruption in all its forms, including extortionand bribery,” as stated in the Ten Principles.
Our Code of Ethical Conduct stipulates that we shallstrive to maintain lawful and sound relationships with
political and government entities and with all ourbusiness partners. The Compliance Guidebook also
provides an easy-to-understand explanation of corruption and bribery prevention.

Respect for Human Rights
Human rights are the rights that anyone can feel, theright to live like a human being, which each and every
one of us is born with. Since its foundation, Kaneka
has practiced respect for humanity in its management. We have a fine tradition of maintaining a culture
and climate that tries to make the most of the goodqualities of each individual. We see respect for humanrights as a fundamental principle that should be upheld by the Company and each of its employees.

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Kaneka Integrated Report 2023

For more information, see our website.
https://www.kaneka.co.jp/en/esg/governance/intellectual-property

Throughout our business activities, we strive to raiseawareness of respect for individuality and humanrights.
To maintain a workplace environment where all employees feel healthy and fulfilled in their work andwhere there is no harassment, we will deepen awareness and understanding among employees and makethe workplace environment a more comfortable place
for them to work.

Kaneka Group secures intellectual property rights,
such as patents for our R2B+P results, aiming toprovide prompt solutions to help resolve social issues.
All our researchers and engineers recognize intellectual property as one of the outputs of R2B+P activities
and actively seek to acquire intellectual property rights
for their achievements including know-how.
To respect the intellectual property rights of others

and avoid patent disputes, we make sure to carry out
patent searches, trademark searches, and design
surveys at various stages in the business development process, such as theme proposals, capital
investments, commercialization, specification changes, and brand naming, taking every possible precaution to ensure clearance.

Promotion System
The Intellectual Property Department, which operates
directly under the President, works to secure andmaintain the Kaneka Group’s intellectual property,
which supports our business. At each of our regional
headquarters in the Americas, Europe, and Asia, wehave put a framework in place for assigning intellectual property specialists to respond directly to local
issues. To mitigate intellectual property risks andprevent leaks of trade secrets at Group companies inJapan and overseas, we are also shoring up cooperation between the various Group companies and theIntellectual Property Department.
Based on our Corporate Governance Code, which werevised in 2021, we continue taking actions to improve

our governance of intellectual property. The director in
charge of the Intellectual Property Department receives reports and gives directions at monthly reporting meetings.
In addition, intellectual property strategy meetings areheld once a year for each division. These meetings areattended by general managers of the division, theresearch division, and the Intellectual Property Department. We will continue to strengthen the linkage
between our intellectual property strategy and thebusiness and research strategies of each division,
with the aim of contributing to business performance.

Respect for Rights
Internal Training - Information Leakage and Legal Compliance
To prevent our proprietary technology and know-how
from being leaked, we provide intellectual property
protection training to sales representatives. The training, which includes measures against leakage ofconfidential information, is provided when these staff
are developing customers or providing samples. We

also regularly provide training to instill respect for therights of others and strengthen compliance with laws
and regulations on copyright, covering topics such as
preventing copyright infringement when creating
materials.

Protecting our Brands
To support the brand development of our mainstay
products, we have acquired trademarks in countries
around the world to protect the brands of global products such as KANEKA Biodegradable Polymer Green
Planet™ and KANEKALON™ hair accessory products.
We constantly monitor trademark applications aroundthe world, working continuously to prevent othersfrom licensing the same or similar trademarks. If an
application for a similar trademark is detected, anobjection is filed with each country’s patent office,which leads to others being prevented from licensing
similar trademarks.
To ensure that our trademarks are correctly used andapplied in our business, we held separate trademark

seminars in fiscal 2022 for sections of our organizationsuch as business divisions that hold a large number of
trademarks and the IR department.

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Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/environment/env/

Environment
Basic Policy

Targets and Performance

In keeping with our corporate philosophy, we at the
Kaneka Group will contribute to realizing sustainable
development and the enrichment of society byconserving resources and reducing environmental
impacts at each stage of the entire product lifecycle.

Promotion System and Policy
When dealing with important matters relating to
global environment protection, the Corporate Manufacturing Integrity Center, which is under direct presidential control, and the Global CSV (Quality Environment) Center take the lead role in sharing the issues
with the Management Committee, the Plant Management Committee, and other relevant bodies and thenformulating policies and measures.
With specific focus on carbon neutrality, we haveestablished a DX & Carbon Neutral Committee under
the control of the Engine of Sustainability Management to accelerate initiatives.

TargetEnergy intensity index (*1)

Average annual reduction of 1% or more

90.5 (all parent manufacturing sites)(0.1% year-on-year increase)
Five-year average decrease of 0.3%

CO2 emission intensity
index (*2)

Average annual reduction of 1% or more
(fixed emissions factor)
Estimated fiscal 2022 performance 91.4
(fiscal 2030 target 84.3)

85.0 (all parent manufacturing sites)

Diagram of Promotion System

In our business activities, we are taking steps toreduce environmental impact and ensure appropriate
chemical substance management and information
disclosure, with the Global CSV (Quality Environment)
Center playing the central role in environment conservation activities.
Meanwhile, toward realizing a sustainable society, we
have set out the Basic Policies for Responsible Careunder which we ensure strict observance of laws
protecting human health and safety and rigorouscompliance with environmental legislation such as the
Air Pollution Control Act and the Water Pollution Control Act and the criteria set out in related agreements.
Internal auditing, ESG safety and quality inspections,and other tools are used to confirm compliance and to
manage environmental impact and risk reduction.

President (Representative Director)
Organs responsible for deciding policy and measuresand for auditing activities

Air and water pollution prevention

Strict compliance with standards set by Air Pollution Control
Act/Water Pollution Control Act and with criteria agreed withlocal governments

Chemical substanceemissions reduction

VOC emissions 1,800 tons or below

Due to increased production volume and changes in productmix, VOC emissions, at 1,821 tons, were not on target

Waste reduction

Kaneka final landfill disposal rate: 0.2% or
below
Zero emissions at Kaneka and Group
companies in Japan

Kaneka final landfill disposal rate 0.038%
Zero emissions achieved by Kaneka and Group companies inJapan based on final landfill disposal rate of 0.37% (*3)

Corporate Manufacturing Integrity Center
Global Production & Engineering Integrity Center

Fiscal 2022 performance

Global CSV (Quality Environment) Center
Management Committee, Plant Management
Committee

Carbon Neutral Policy Formulation

Visited disposal subcontractors where on-site survey was
possible and carried out checklist-based inspection

Check legal compliance of waste disposal subcontractors*1 Energy intensity index: a value for energy intensity indexed against a value of 100 for fiscal 2013. The value is calculated by dividing manufacturing energy
consumption by activity volume (all parent manufacturing site production volume).
*2 CO2 emission intensity index: a value for energy-origin CO2 emission intensity indexed against a value of 100 for fiscal 2013. The value is calculated by dividing
energy-origin CO2 emissions by activity volume.
*3 Zero emissions (Kaneka definition): final landfill disposal volume less than 0.5% of total generated waste.

The Engine of Sustainability Management
DX & Carbon Neutral Committee(Secretariat: Global Production &Engineering Integrity Center)

Material Balance in Production Activities (Fiscal 2022)

Kaneka and Group companies in Japan 47 Overseas Group companies 16

INPUTS (Energy and resource inputs)

Production DX & Carbon Neutral
Project Committee
Main rawmaterials

1,398.2 thousand
288.8 tons

Energy(GWh Conversions)

3,802
GWh
1,042

Water

27.3 million m3
6.8

Business divisions, staff departments, manufacturing sites, research
institutes, Group companies
Manufacturing sites
Research institutes
Facilities

Basic Policies for Responsible Care
1. Protect the natural ecosystem and reduce environmental impact
2. Offer safe products and information
3. Develop products and technologies in consideration of the environment and safety

Major OUTPUTS (Material outputs by product and waste category)
Product output
Products

Atmospheric emissions

1,749.8 thousand
282.0 tons

GHG

4. Reduce waste and promote the recycling of plastics
5. Enhance process safety, disaster-prevention, and occupational safety and health
6. Win public confidence

74

Kaneka Integrated Report 2023

Waste
Final landfill

279.9
tons
4,233.8

1,095 thousand
269 tons-CO2e

SOx

81.6
tons
4.4

NOx

786.7
tons
127.1

Emissions into water systems
Chemical oxygen
demand

228.7
tons
102.5

Suspended
solids

188.4
tons
43.5

Kaneka Integrated Report 2023

75

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/environment/env/

Environment
Major Climate Change Risks and Opportunities: Business Impact and Countermeasures

Information Disclosure in Line with TCFD
With people and technology growing together intocreative fusion, we will break fresh ground for the
future and tie in to explore New Values. We are also
committed to challenge the environmental issues ofour planet and contribute to upgrading the quality oflife. Guided by this corporate philosophy, Kaneka
Group will leverage its products and services toglobally offer useful solutions to the issue of climatechange, and will fulfill its social responsibilities regarding the various climate change-related impacts associated with the production and distribution processes.
As part of this, we expressed our support for therecommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in March 2021.

GovernanceTo integrate and strengthen ESG management, we
reorganized our ESG-related operations with effectfrom April 1, 2022, to establish a new organization
known as the Engine of Sustainability Managementwith an executive vice president (director) as its general manager. Under its supervision, the DX & Carbon
Neutral Committee is tasked with driving our carbon
neutral production strategy.
The committee will promote carbon neutrality byaccelerating initiatives that integrate DX with carbon

neutral activities in the manufacturing field while collaborating with business divisions, staff departments,
manufacturing sites, research institutes, and groupcompanies. Every three months, the committee willreport on its activities to the Engine of Sustainability
Management, who will discuss and decide the direction of its activities going forward, so that these can bereflected into strategies, major action plans, businessplans, etc. The results will be reported to the representative director.

Type

Regulatory/
legal

Changes in society

Strengthening of GHG
emissions regulation

The impact of climate-related risks andopportunities on the organization’s business,strategy, and financial plans(●Climate change risk/●Climate change
opportunity)
Depreciation and amortization costs
arising from GHG emissions reduction

・Enhancing and expanding ecofriendly products

Increase in operating costs due to theintroduction of carbon taxes◎ Early fuel conversion of private
power generator facilities
・Continuous energy saving in theexisting manufacturing process
・Process innovation
・Use of renewable energy and low
CO2 emission factor for electricity
・Introduction of internal carbon
pricing (ICP) system (from fiscal
2024)

Increase in procurement costs due totaxes on the production of petrochemicalderived packaging plastics
Growing demand for products that
contribute to the realization of a circularsociety, such as biodegradable plastics
and low-carbon and decarbonizationrelated products◎ Mass production of Kaneka
biodegradable polymer Green
PlanetTM◎ Promoting research anddevelopment to produce theKaneka biodegradable polymer
Green PlanetTM from carbon
dioxide and hydrogen●

Fluctuations in fuel costs due to pricechanges in crude oil, etc.

◎ Early fuel conversion of private
power generator facilities
・Continuous energy saving in theexisting manufacturing process
・Use of renewable energy and low
CO2 emission factor for electricity●

Increase in purchase and sales fares dueto the introduction of decarbonization
technology in transport vehicles and thetransfer of credit purchase costs●

Regulatory/
legal

Increased operationalcosts due to introductionof carbon tax (incl. supply
chain)●

TechnologicalAcceleration of the circular
economy●MarketIncreased demand forbiomass-based resins anddecreased demand forfossil-based plastics●

Strategy
To identify climate change-related business risks andopportunities and to set out relevant strategies, metrics, and targets, we formulated business impact
scenarios in line with the 1.5 and 4 scenarios andanalyzed the extent of the impacts in fiscal 2021. In
fiscal 2022, we conducted a scenario analysis,

identifying transition risks and opportunities. Based on
the findings of that analysis, this fiscal year we added
physical risks to the items deemed to potentially havea severe impact on Kaneka’s business in 2030. These
are shown along with specific examples and countermeasures in the table on the right.

TechnologicalLow-carbon trends
affecting raw material
and energy sources

Risk Management
Risks related to climate change are managed by the
Global CSV (Quality Environment) Center under the
Corporate Manufacturing Integrity Center. In formulating risks related to climate change and prevention
measures, after discussions with business divisions,manufacturing divisions, and research divisions, theGlobal CSV (Quality Environment) Center of the Corporate Manufacturing Integrity Center presents its proposals and deliberations to the Engine of Sustainability
Management, which addresses them in collaboration
with each department.

MarketImpact of extreme weather
events on Company
factories and supply chain

Extremeweather76

Kaneka Integrated Report 2023

Increased demand forrenewable energy, energy
networks, and energysaving-related products

Increased demand forbuilding materials in
preparation for disasters
caused by extreme weather
eventsCountermeasures(◎indicates priority areas)

・Reviewing procurement policies
・Strengthening supply chain
management initiatives◎ Enhancement and expansion of
products related to solar power
generation
・Enhancing and expanding insulating
material for residential buildings(Kanelite Foam™)・Developing storage batteries●

Growing demand for materials for ZEB
and ZEH●

Events caused by flooding due to heavy・Assessing water risks at Kaneka
rainfall or water shortages. Such events
Group sites
could include production stoppages at our ・Periodically reviewing BCPs
factories, supply chain disruptions, etc.,
leading to lost sales opportunities andincreased building damage●

Higher sales of building materials
products that curb damage caused byweather disasters

・Development of embankment foam
(KanepearlTM, Kanelite FoamTM)

Kaneka Integrated Report 2023

77

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/environment/env/

Environment

Metrics and Targets

Climate Change Initiatives

Kaneka Group will realize carbon neutral operations by
2050. As an interim milestone, we have set a target of
reducing GHG emissions by 30% in 2030 comparedto fiscal 2013.

In fiscal 2022, the sum total of Kaneka Group’s Scope
1 and Scope 2 GHG emissions was 1,363.9 thousand
tons CO2e (11.7% lower than fiscal 2013). Scope 3
emissions from the parent company Kaneka amounted to 2,884.1 thousand tons CO2e.

GHG Emissions*1 and Energy Origin CO2 Emission Intensity Index(Thousand tons-CO2e)
2,500

100.0

95.7

91.4

85.8

Preventing Pollution and Managing Chemical Substances

85.0
80

1,614

1.545

1,484

342

231

1,500

1,455

294

30% reduction
compared withfiscal 2013

1,548
328

284

1,364
269

We are working for the prevention of air and waterpollution, the appropriate management of toxic chemical substances, and the reduction of related emissions.
Our production activities comply with the standards
specified in the Air Pollution Control Act and the Water
Pollution Control Act as well as the criteria in agreements with local governments.
To promote water conservation, we monitor our intakeof water and take care to use it efficiently. Also in
fiscal 2022, we conducted water risk assessments foreach Kaneka Group site and the bases of Group
companies in Japan and overseas. We use an assessment tool (Aqueduct Water Risk Atlas) to identify

60

1,080

1,000

40
1,314

1,272

1,190

1,220

1,171

1,095

500

2013
(Base year)

2018

2019

2020

2021

20

2030 (Fiscal year) 02022

GHG emissions:
Kaneka and Group companies in Japan
Overseas Group companies
CO2 emission intensity index for all parent manufacturing sites (right scale)

Scope 1 and 2 Emissions (Kaneka)

Scope 3 Emissions (Kaneka)(Thousand tons-CO2e)(Thousand tons-CO2e)

1,500

4,000

1,105

3,143
1,032

318

1,000

1,022

246

1,072

3,000

962
336

263

2,905

2,884

2,000

500

787

2018

786

2019

760

2020

736

2021

624

2022 (Fiscal year)

Scope 1 direct emissions (*2)
Scope 2 indirect emissions from purchased of acquired electricity, and heat (*3)

1,000

0

2018

2019

2020

2021

recycling rate (*4) for the Kaneka Group by 1% eachyear. We will continue promoting the 3Rs as well as
the improvement activities through process analysis
using Material Flow Cost Accounting (MFCA).
*4 Volume of generated industrial waste that is recycled (total figure forindustrial waste that is subject to reuse, recycling or heat recovery).

2022 (Fiscal year)*2 Non-energy CO2 emissions and CO2-equivalent of methane and N2O emissions are included.
*3 Scope 2 emissions calculated using the location-based method for Kaneka and Group companies in Japan were 519 thousand tons CO2e (including 449 thousand
tons CO2e for Kaneka). For Group companies outside Japan, Scope 2 emissions were the same calculated using location-based and market-based methods.

Kaneka Integrated Report 2023

Reducing waste saves resources, cuts costs, andhelps protect the environment by lowering CO2 emissions. By following the 3Rs (Reduce, Reuse, andRecycle), we promote reduction and recycling ofindustrial waste as we strive for zero emissions from
Kaneka and our Group companies in Japan. In addition, we are working to use our resources effectively
based on our new target of improving the resource

Scope 3 other indirect emissions (upstream/downstream) (*2)

*1 GHG emissions volume: a value indicating the sum total of energy-origin CO2 emissions, non-energy-origin CO2 emissions, and the CO2 equivalents of methane andN2O emissions, calculated in accordance with the GHG protocol.

78

areas with high water stress and, based on the proportion of water intake from water-stressed areas tototal water intake, have confirmed that Kaneka Group
as a whole does not face high water risks. Goingforward, we will expand the scope of the assessment
targets in terms of geographical location and time,and prioritize and implement measures based on
results of the assessment.
In the area of chemical substance management, wereduce and control the emissions of volatile organic
compounds (VOCs) and chemical substances subject
to the Pollutant Release and Transfer Register (PRTR)
Act, including six toxic air pollutants set independently.

Reducing Waste and Recycling Resources

3,345

2,082

338

0

also working to introduce carbon-life cycle analysis(cLCA) and indirect GHG emissions calculation. Carbon-life cycle analysis (cLCA) uses an LCA-based
quantitative evaluation to calculate the contribution to
GHG emissions reduction relative to comparable
products. Indirect GHG emissions calculation covers
business activities throughout the supply chain (Scope
3 emissions).

100

91.6

2,000

0

To address global warming, we at the Kaneka Groupare working to promote energy conservation andreduce CO2 emissions through a range of measures,
including our own environmental capital investment
program.
We are implementing life cycle assessment (LCA) for
our main products and intend to successively expand
the range of products covered going forward. We are

Biodiversity
Considering the impacts of our businesses on ecosystems, we at Kaneka strive to develop technologies,
materials and products that have less environmental
impact, as well as to mitigate the environmental
impact of our production.
As part of our social contribution activity, we also

support, participate in, and cooperate with the biodiversity activities of outside bodies.
・ Osaka Manufacturing Site: Settsu-no-mori Kaneka
Biotope・ Shiga Manufacturing Site: Walnut School

Kaneka Integrated Report 2023

79

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/social/safety-quality/

Safety (Process Safety and Disaster Prevention, Occupational Safety)
Basic Policy
Placing the top priority for management on safety, we
have established the Basic Policy on Safety, underwhich all employees as well as all persons working at

Safety Initiatives
the Kaneka Group and our partner companies work tocreate safe and healthy workplaces, pursuing the goalof no accidents and no disasters.

Promotion System and Policy
Established under the Engine of Sustainability Management, the Safety Committee sets policies andgoals related to occupational safety, process safety,
and disaster prevention and to check their implementation and progress.
As set out in our Basic Safety Policies, our Zero Accident Principles, and Kaneka Group Code of Conduct,
we prioritize safety above all else, observe the principles of safety, and work to ensure that safe practice istaken on board and strictly adhered to. In this way weseek to guarantee safety and peace of mind throughstable day-to-day manufacturing operations. In his
greetings at New Year and on the yearly anniversary of
our foundation, the president delivers a related message directly to employees.

Diagram of Promotion System
President (Representative Director)
Organs responsible for deciding policy and measuresand for auditing activities

Based on a shared commitment to safety first,
management and frontline staff are working tofoster a safe culture and ensure the intrinsic
safety of equipment, thus inspiring public trustin the safety of our manufacturing sites.
We work constantly to ensure that safety isthoroughly maintained. We have put in place
the Zero Accident Principles, based on which
members of top management lead our efforts
to ensure that each employee follows the rules
and puts them into action.

Message from the President
While continuing my plant tours, I have seen for myself how eachplant is raising its safety awareness. You can see it taking hold on
the shop floor.
When it comes to safety, there is no such thing as perfection.
We must always act with a sense of urgency. We must stay vigilant,
focusing all our efforts on ensuring that throughout our operations
we prioritize preventing accidents and disasters.
We must not overlook even the most minute signs of danger, instead
working thoroughly to foresee and forestall accidents and problems.
Management will do its utmost to protect the lives, safety, andsecurity of all our employees.

The Engine of Sustainability Management
Safety Committee
Committee chair: director in charge of process
safety(Secretariat: Global Safety Integrity Center)

Organs responsible for implementing measures andactivities
Corporate Manufacturing Integrity Center

Targets and Performance
TargetFiscal 2022 performanceStrengthen process safety anddisaster prevention
Ensure occupational health and safety

1) Ensuring the safety of equipment and processes
Internal third-party HAZOP (*) inspection, HAZOP competency improvement training,
expansion of internal regulations on equipment, reducing risk of getting trapped or caught
in processing and assembly plants
2) Fostering a safety culture
Implementation of various safety training activities, guidance by external experts,
promotion of experiential learning
3) Readiness for emergency
Emergency response and evacuation drills and comprehensive disaster prevention drills
carried out

Process accidents
Occupational
accidents

1) Process accidents: 72) Occupational accidents: Accidents resulting in lost time: 7; accidents not resulting in lost
time: 10.

Global Safety Integrity Center
Business divisions, staff departments,
manufacturing sites, research institutes,
Group companies

Zero accidents*HAZOP (Hazard and Operability Studies): A hazard identification technique used for chemical plants.

Basic Safety Policies

Zero Accident Principles
Accident Frequency Rate

● Safety forms our management foundation, and is

the basis of all corporate activities.
We take action with priority given to ensuring safety inall activities in the company.
● Safety is the foundation of local and worldwide

communities’ confidence in Kaneka.
We do our best to develop their trust.
● Safety is based on our belief that

“All accidents can be prevented.”
We always move forward without being satisfied withlukewarm results.
● Safety is the responsibility of every employee inaccordance with his/her duties.
We fulfill our responsibilities by mutually clarifying theduties we have assumed.
● Safety must be maintained continuously.

Accident Severity Rate

● All people, you and me, are indispensable

We ensure everyone is working safely.
[Pledge of zero accidents]● Safety is everyone’s responsibility

We do not miss sparing the time to seek safety.
[Participation in safety]● There is no trick to safety

We always value a fundamental approach to it.
[Adherence to safety basics]● Be aware of potential danger

We endeavor to eliminate safety risks.
[Safety in advance]● Where there is carelessness, there is the possibilityof an accident
We do not allow even a small chance of negligence.
[99%, yet 0%]

2.5
2.0

1.83
▲

1.80
▲

1.95
▲

1.5
1.0
0.5
0

0.90
◆
0.36
■
0.23
0.00
▼
2018

0.94
◆
■ 0.78
0.52
0.00
▼
2019

0.93
◆
0.26
0.18 ■
0.00▼
2020● All Kaneka Group ▼ All parent manufacturing sites▲ All Japanese industry ◆ Chemical industry

2.09
▲

1.07
◆

0.25
■
▼ 0.23
0.19
2021

0.10

2.06
▲

0.06
0.04

0.50
■
0.35

0.02
(Year)■ All Group companies in Japan and overseas

Accident Frequency Rate: An indicator that shows the frequency ofoccupational accidents that caused death and/or injury by indicating thenumber of casualties per total 1 million actual working hours.

0.09
▲

0.09
▲

0.09
▲

0.09
▲

0.08

1.16
◆

0.00
▼
2022

0.09
▲

0

0.06
◆

0.06
◆

0.03
■
0.02
0.00

▼
2018

0.02
■ 0.02
◆
0.01
0.00
▼
2019

0.03
◆
0.00 0.00
0.00
▼
■
2020

● All Kaneka Group ▼ All parent manufacturing sites▲ All Japanese industry ◆ Chemical industry

0.02
◆
0.00
0.00
▼
■
2021

0.03
■
0.02
0.00
▼
2022

(Year)■ All Group companies in Japan and overseas

Accident Severity Rate: An indicator that shows the level of severity ofoccupational accidents by indicating the number of lost work days per total
1,000 working hours.

Note: Frequency and severity rates are calculated for regular employees, contract employees, and temporary employees dispatched from outside
the company. The scope of calculation does not include employees seconded to outside companies or employees of subcontractors.

We ensure safety through steady efforts on a daily basis.

80

Kaneka Integrated Report 2023

Kaneka Integrated Report 2023

81

Business Foundation

For more information, see our website.
https://www.kaneka.co.jp/en/esg/social/safety-quality/product.html

Quality (Product Responsibility)

Supply Chain Management

Basic Policy
Aiming to benefit society and satisfy customers
through a stable supply of safe and reliable products,
Kaneka Group has set Quality Management Regula-

Basic Policy
tions to ensure thorough day-to-day quality control andproduct safety at all stages, from product design anddevelopment to delivery to customers.

Promotion System and Policy
The Global CSV (Quality Environment) Center operates the Quality Management Conference and theProduct Safety Review Conference. Through thesebodies, we coordinate quality assurance activities
throughout the Kaneka Group and drive quality management, including product safety assurance, at allstages from product design and development to raw
material procurement, manufacturing, storage, andtransportation. Each of our businesses undergoes
regular third-party auditing and inspection based on
ISO 9001 and other established standards and regulations. We also take steps in-house to enhance ourquality management system and thereby raise product quality standards through ESG safety and quality
inspections and internal audits.

Diagram of Promotion System
President (Representative Director)

Corporate Manufacturing Integrity Center

Quality Management Conference
Product Safety Review Conference

Basic Procurement Policy
We will engage in procurement activities that enhance the corporate value of both Kaneka and our business
partners.
● We will endeavor to reduce environmental damage by engaging in green procurement.
● We will provide opportunities for business partners to make fair and rational transactions in consideration ofquality, price, supply stability, technical development capabilities, environmental protection, and safety.
● We will abide strictly by the relevant Japanese and foreign laws and regulations.

Organs responsible for implementing measuresandactivities
事業部、スタッフ部門、工場、研究所、グループ会社

Quality Assurance

Chemical Substance Management

 e held quality management conferences on fourWoccasions, inviting personnel in charge of quality
management in each business division, to instill the
Company-wide policy and instructions and to exchange views on product quality assurance andshare quality information.
● Through the Product Safety Review Committee, we
put in place a system to ensure product safety andservice for product launches, such as those of new
medical devices and products related to Kaneka
biodegrad­able polymer Green Planet™. To further
enhance product safety, we have revised the review
committee’s standards for pharmaceutical intermediates.
Going forward, we will continue working to enhance
the quality management system, through audits,
inspections, and other checks and human resource
training. In this way, we aim to ensure full complianceand product safety throughout the entire supply chain.

We take appropriate action at all stages of productdevelopment, manufacturing, transportation, sales,and disposal based on a clear grasp of the requirements of Japanese and international laws and regulations on the management of chemical substances,with each division adapting its response to its particular circumstances.
For raw material procurement, we have establishedthe Green Procurement Standards to prevent mixingof chemicals prohibited under the Control Act. (*1)
When supplying products, we take active measures topublish information on the hazard level of the chemical
substances, including displaying a GHS (*2) label andproviding a product safety data sheet.

Kaneka Integrated Report 2023

In 2015, we signed the United Nations Global Compact
to show our agreement with its principles for voluntaryaction in the four areas of Human Rights, Labour,
Environment, and Anti-Corruption. In 2018, with theaim of further evolving our ESG management, we
additionally set out an ESG Charter as an action agenda for each individual employee to help realize ourcorporate philosophy. On this basis, we pursue procurement activities for a sustainable society.

●

Global CSV (Quality Environment) Center

Product Responsibility Initiatives

82

Kaneka Group works to build relationships of trustwith its business partners (suppliers) with the aim ofmutual increase in corporate value. Under our Basic
Procurement Policy, we pursue efficient procurement
activities that also take account of fairness and equity
in terms of ensuring safety and quality, protecting the
global environment in areas such as climate change
and biodiversity, showing respect for human rights,
and ensuring legal compliance.

Organs responsible for deciding policy and measuresand for auditing activities, conferences

Business divisions, staff departments, manufacturing
sites, research institutes, Group companies●

For more information, see our website.
https://www.kaneka.co.jp/en/esg/social/csr/

Responsible Procurement Initiatives
In all procurement activities within the framework ofour business operations, we undertake responsible
procurement and management of raw materials andother resources. Our Basic Procurement Policy requires the general manager of each business division
to put in place and take charge of an appropriate
system to manage procurement, including that ofmineral raw materials, with the cooperation of business partners.
Additionally, as part of sustainable raw material procurement that takes due account of the environmentand human rights, we have acquired RSPO supply
chain certification.

Declaration of Partnership Building
Based on the belief that it is important to actively
work on strengthening the supply chain, Kaneka
endorses the aims of the Council on Promoting Partnership Building for Cultivating the Future advanced by
the Cabinet Office and other related ministries andagencies. We announced our Declaration of Partnership Building in October 2022. The aim is to build new
partnerships by promoting cooperation, coexistence,and coprosperity with business partners in the supply
chain and other business operators seeking to create
value.

*1 Chemical Substances Control Act: Act on the Evaluation of Chemical
Substances and Regulation of Their Manufacture, etc.
*2 GHS: A worldwide system for classifying and labelling chemicals according
to their hazardous properties.

Kaneka Integrated Report 2023

83

Business Foundation

For more information, see our website.
Communication with stakeholders
https://www.kaneka.co.jp/en/esg/social/stakeholder/

Social contribution activities
https://www.kaneka.co.jp/en/esg/social/contribution/

Communication with Stakeholders
Basic Policy

Employees × Community/Society

Under its ESG Charter, which declares that ‘we fulfill
our corporate responsibility by empowering individual
employees to put our corporate philosophy into practice through serious, forward-looking effort,’ Kaneka
Group, aspires as a good corporate citizen to a

Initiatives

Customers

Providing technology
and productinformation and an
online store on our
official website

Holding a sweet potato dig withsmall children and toddlers fromthe neighborhood
Society

Issuing reports (To Our Shareholders)
twice a year
Shareholders
andInvestors

sustainable future in partnership with all its stakeholders.
We will work to build relationships of trust with stakeholders through active information disclosure andcommunication with the aim of realizing this sustainable society.

Communication
・Communication with customers throughsales and marketing・Information posting on websites andsocial media
・Exhibitions
・Quality assurance/customer support

・Interaction with local residents/
participation in local events/dialogue
・Fostering youth development/hosting plant
visits・Supporting disaster reconstruction
・Participation in initiatives

Exploring Manufacturing and the Wonder of ChemistryAs part of Kaneka’s efforts to support the educationof the next generation in the community andsociety, we teach classes on manufacturing andon-site classes. Retired employees and current
employees, including new hires, serve as lecturers.
We conduct the Kaneka Manufacturing Class atelementary schools near Kaneka Takasago Manufacturing Site, Osaka Manufacturing Site, and Shiga
Manufacturing Site. The aim of the class is toincrease children’s interest in and understanding of
manufacturing. In the class, sixth graders assembled Scrollers II (a small self-powered rolling robot)
kits, gaining a sense of the fun and satisfaction of
making things.

・Opinion exchange with investors/analysts,
holding of business and results briefings
・Timely and appropriate information
disclosure on the corporate website
・General Meeting of Shareholders
A scene from a field trip class (photo on the right: A shock
absorption experiment with eggs)

Providing a workplace that supports
employee health
Employees

Vendors

Providing an online store thatconnects household tables andbakeries nationwide bysupporting the purchase anddevelopment of ingredients・Regular questionnaire surveys anddialogue with vendors
・Cooperation, coprosperity and coexistencewith vendors
・Quality improvement in logistics
operations
・Appropriate information disclosure・Internal whistleblowing system

Carrying out local clean-up
activities

・Initiatives on global environment
protection/resource conservation/
environmental impact reduction
・Promotion of environmental impact
reduction in raw material procurement
・Cleaning activities/local forest
conservation/environmental conservation
activities
・Appropriate information disclosure

The
Environment

84

・Communication between employees
・Employee health consultations
・Labor-management dialogue
・Penetration of internal whistleblowing
systemKaneka Integrated Report 2023

Kaneka Manufacturing Class(Bottom right: Scrollers II craft kit)

Elementary schools near the Kaneka Kashima
Manufacturing Site are conducting field trip classes for chemical experiments based on a concept
of “Let’s get into science.” Using our own products, we conducted experiments around theproperties of foamed polystyrene including foaming, shock absorption, and insulation properties,
giving students a chance to experience the wonderof chemistry.
We will continue supporting students’ education
with an emphasis on lighthearted fun.

Participating in TABLE FOR TWO Activities at the Company Cafeteria
Kaneka has been participating in TABLE FOR TWO(TFT) activities since 2010.
TFT is a social contribution activity aimed at addressing food imbalance, whereby developing
countries suffer from hunger and malnutrition,
while developed countries have problems withobesity and lifestyle diseases. The employee
cafeteria offers a menu with reduced calories toprevent obesity and lifestyle diseases. For every
one of these meals that is bought at a company
cafeteria, 20 yen is donated through TFT towardschool meals for children in developing countries.
In 2022, we donated the equivalent of 7,697 meals(153,940 yen).
The program also started at the Kashima Manufacturing Site from December 2022. We will continue

activities to share meals and deliver hearty school
lunches at employee cafeterias at all Kaneka
factories.

© TABLE FOR TWO
The amount of 20 yen is equivalent to one school lunch
serving in the supported regions.

Kaneka Integrated Report 2023

85

Appendices
Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETSKANEKA CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2023 and 2022

AssetsMillions of yen

Thousands of
U.S. dollars

2022

2023

2023

Current assets:
Cash and cash equivalents

Liabilities and net assets

Millions of yen

Thousands of
U.S. dollars

2022

2023

2023

Current liabilities:¥

40,699¥40,712$

304,793

Short-term loans payable¥

108,070¥

84,014$809,337

Notes and accounts receivable – trade, and contract assets

170,154

164,128

1,274,276

Current portion of long-term loans payable

8,420

5,978

63,059Inventories

168,115

140,483

1,259,009

Lease liabilities

1,037

641

7,769

Short-term loans receivable from unconsolidated subsidiaries and affiliates

1,304

1,481

9,772

Other current assets

18,193

17,656136,249

Trade88,66392,068663,999

Allowance for doubtful accounts(1,502)(1,552)(11,252)

Construction

7,610

6,353

56,996396,964

362,910

2,972,849

Other

18,785

20,770140,682

Total current assets

Notes and accounts payable:

Income taxes payable

5,055

3,466

37,863

Accrued expenses

14,82815,467

111,046

Other current liabilities

5,770

5,740

43,211

Total current liabilities

258,242

234,502

1,933,966

Non-current liabilities:
Property, plant and equipment:Land

33,07932,855

247,729

Buildings and structures

240,711

228,539

1,802,680

Machinery, equipment and vehicles

665,388

640,545

4,983,062

Construction in progress

32,062

24,105

240,113

Leased assets

17,963

6,549

134,531989,205

932,596

7,408,117

Less accumulated depreciation(696,590)(661,321)(5,216,732)

Property, plant and equipment, net

292,615

271,275

2,191,385

Bonds payable

10,00010,00074,889Long-term loans payable

33,706

28,627

252,429

Lease liabilities

14,7093,569

110,159

Net defined benefit liability

20,82931,559155,990

318

295

2,381

Deferred tax liabilities

1,705

2,018

12,771

Provision for product warranties

2,057

2,331

15,406

Other non-current liabilities

4,648

1,850

34,809Total non-current liabilities

87,97480,253658,838

247,485

Provision for directors’ retirement benefits

Contingent liabilities
Net assets:
Shareholders’ equity:
Capital stock
Authorized — 150,000,000 shares
Intangible assets:

14,977

16,189121,243

33,04633,046

Capital surplus

Issued—	  68,000,000 shares

32,24531,392

241,485

Retained earnings

323,213309,5072,420,532

Less treasury stock, at cost — 3,106,293 shares in 2023

Unconsolidated subsidiaries and affiliates

3,641

3,635

27,273

Other

53,913

55,107403,753

597

660

4,473

Deferred tax assets

4,450

7,504

33,329Other

14,55011,190108,970

(283)

(300)

(2,123)76,87077,796575,676

Total investments and other assets(11,528)(85,428)

362,417

2,824,075

22,204

21,331

166,288

(3)

(4)

(28)

11,543

4,381

86,449Valuation difference on available-for-sale securities

Investment securities:

Allowance for doubtful accounts(11,407)377,098

Accumulated other comprehensive income:Investments and other assets:Long-term loans receivable		 2,761,323 shares in 2022
Total shareholders’ equity¥ 782,640¥

726,959$

5,861,155

Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans

6,529

(975)

48,897

Total accumulated other comprehensive income

40,27324,732

301,607

622

619

4,661

Subscription rights to shares
Non-controlling interests
Total net assets

18,427

24,435138,004

436,422412,204

3,268,349¥ 782,640¥

726,959$

5,861,155* The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, using the prevailingexchange rate on March 31, 2023 which was ¥133.53 to U.S. $1.00.

86

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Kaneka Integrated Report 2023

87

Appendices
CONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSKANEKA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years Ended March 31, 2023, 2022 and 2021

KANEKA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years Ended March 31, 2023, 2022 and 2021
Thousands of
U.S. dollars

Millions of yen

2022

2023

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Gain on sales of investment securities
Depreciation of inactive non-current assets
Income from compensation for damage
Loss on disposal of property, plant and equipment
Loss on valuation of investment securities
Foreign exchange gains (losses), net
Equity in earnings of affiliates, net
Litigation expenses
Restructuring charges
Impairment losses
Product warranty expenses
Loss on disaster
Other, net
Income before income taxes and non-controlling interests
Income taxes
Current
Deferred
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent¥¥

755,821556,895
198,926
163,838
35,087¥

691,530
494,880
196,649
153,086
43,562

2021¥

577,426
410,486
166,940
139,395
27,544

2023

$

1,917
(1,965)
1,410(1,147)—(1,839)(1,448)
1,888
137
—
—
—
—
—
(1,666)32,373

1,648(1,064)19(628)—(1,638)
—
1,159
132
—
(2,692)(1,059)(2,331)—(703)
36,405

1,445(1,259)
796
(596)
1,624
(2,402)
—
250
109
(289)
—
(897)
—
(1,099)(3,025)22,201

14,360(14,719)
10,562(8,594)—(13,774)(10,846)
14,144
1,027
—
—
—
—
—
(12,483)
242,446

9,010
(711)
24,074
1,066
23,008

10,075(1,398)27,7281,240
26,487

6,372(1,354)
17,184
1,353
15,831

67,480(5,330)180,296
7,989
172,307

¥

¥

$

yen

Net income per share—basic¥

5,660,313
4,170,564
1,489,748
1,226,979
262,768

349.59¥406.01¥

242.68

U.S. dollars

$

2.61

33,046$

247,485

31,10330,962

235,096

789

—

—

5,913

63
853
32,245289
289
31,392141
141
31,103475
6,388
241,485309,507289,544

280,265

2,317,884(7,599)—23,008(5)(1,696)
13,706323,213(6,523)—
26,487(1)—
19,963309,507(6,523)(21)
15,831(7)—
9,278
289,544(56,911)—
172,307(39)(12,707)
102,648
2,420,532(11,528)(11,535)(11,583)(86,339)(8,051)
30
8,142
121

(4)
10
—
6

(3)
52
—
48

(60,296)
228
60,978911(11,407)(11,528)(11,535)(85,428)

21,331

20,863

14,246

159,749

Net changes of items other than shareholders’ equity

873

468

6,616

6,538

Total changes of items during the period

873

468

6,616

6,538

22,204

21,331

20,863

166,288

(4)

(9)

(103)

(35)

0

5

93

6

Balance at the end of current period

404.95242.13

2.61

Accumulated other comprehensive income

100.000.82

Valuation difference on available-for-sale securities
Balance at beginning of year
Changes of items during the period

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
KANEKA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years Ended March 31, 2023, 2022 and 2021
Millions of yen

Thousands of
U.S. dollars

2021

2023

2022

2023

¥

27,728¥17,184$

180,296

882
0
7,594
7,509

455
5
8,495
1,179

6,746
93
3,924
5,825

6,611
6
56,87756,2371
15,98940,064(7)
10,12837,856

10
16,60033,784

9
119,742300,039

38,5491,515¥

31,392110.00¥33,046—
247,485348.66¥¥—33,046110.0024,0742023—
33,046

Net income per share—diluted¥

33,0462021—
33,046

Cash dividends applicable to the year

Net income
Other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests¥

Thousands of
U.S. dollars

2022

2023

Shareholders’ equity
Capital stock
Balance at beginning of year
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Capital surplus
Balance at beginning of year
Changes of items during the period
Increase by share exchange
Change in treasury shares of parent arising from transactions
with non-controlling interests
Total changes of items during the period
Balance at the end of current period
Retained earnings
Balance at beginning of year
Changes of items during the period
Dividends from surplus—¥110.00 per share
Change of scope of consolidation
Net income attributable to owners of parent
Disposal of treasury stock
Increase by share exchange
Total changes of items during the period
Balance at the end of current period
Treasury stock
Balance at beginning of year
Changes of items during the period
Purchase of treasury stock
Disposal of treasury stock
Increase by share exchange
Total changes of items during the period

Millions of yen¥¥

36,2801,575¥¥

31,978
1,806$$

Balance at the end of current period
Deferred gains or losses on hedges
Balance at beginning of year
Changes of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period

0

5

93

6

Balance at the end of current period

(3)

(4)

(9)

(28)

288,693
11,345* The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, using the prevailingexchange rate on March 31, 2023 which was ¥133.53 to U.S. $1.00.

88

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89

Appendices
CONSOLIDATED STATEMENTS OF CASH FLOWSKANEKA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years Ended March 31, 2023, 2022 and 2021
Millions of yen

Thousands of
U.S. dollars

2021

2023

2022

2023

Foreign currency translation adjustments
Balance at beginning of year

¥

4,381

¥

(3,753)¥

(7,395)$32,812

Changes of items during the period
Net changes of items other than shareholders’ equity

7,162

8,135

3,641

53,637

Total changes of items during the period

7,162

8,135

3,641

53,637

Balance at the end of current period

11,5434,381(3,753)86,449(975)(2,160)(7,956)(7,304)Remeasurements of defined benefit plans
Balance at beginning of year
Changes of items during the period
Net changes of items other than shareholders’ equity

7,504

1,184

5,796

56,202

Total changes of items during the period

7,504

1,184

5,796

56,202

Balance at the end of current period

6,529

(975)

(2,160)48,897

619

516

482

4,635

3

102

34

26

Subscription rights to shares
Balance at beginning of year
Changes of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of current period

3

102

34

26

622

619

516

4,661

24,43523,424

22,128

182,993(6,007)

1,010

1,295

(44,988)

Non-controlling interests
Balance at beginning of year
Changes of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period(6,007)

1,010

1,295

(44,988)

Balance at the end of current period

18,427

24,43523,424

138,004

412,204

381,040

354,094

3,086,977(7,599)(6,523)(6,523)(56,911)

—

—

(21)

—

Net income attributable to owners of parent

23,00826,487

15,831

172,307(60,296)

Total net assets
Balance at beginning of year
Changes of items during the period
Dividends from surplus—¥110.00 per share
Change of scope of consolidation
Purchase of treasury stock(8,051)(4)(3)

Disposal of treasury stock

25

9

44

188

Increase by share exchange

7,235

—

—

54,184

63

289

141

475

Change in treasury shares of parent arising from transactions
with non-controlling interests
Net changes of items other than shareholders’ equity

9,537

10,905

17,47771,423

Total changes of items during the period

24,21831,163

26,945

181,371

Balance at the end of current period¥

436,422¥412,204¥

381,040$

3,268,349* The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, using the prevailingexchange rate on March 31, 2023 which was ¥133.53 to U.S. $1.00.

90

Kaneka Integrated Report 2023¥¥

32,37339,456
—
—
—
—
—
(139)
(110)
(1,917)
1,965
(137)
630
(1,410)1,448—(3,474)(24,875)(4,785)(4,620)34,402
1,942(1,955)
1,177—(6,856)28,710Thousands of
U.S. dollars

2021

2023

2022

2023

Cash Flows from Operating Activities
Income before income taxes and non-controlling interests
Depreciation and amortization
Restructuring charges
Impairment losses
Product warranty expense
Insurance claim income
Income from compensation for damage
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Equity in earnings of affiliates, net
Loss (gain) on disposal of property, plant and equipment
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Gain on sales of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
OthersSubtotalInterest and dividend income received
Interest expenses paid
Proceeds from insurance income
Proceeds from compensation for damage
Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and distributions of investment securities
Proceeds from redemption of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Payments of loans receivableCollection of loans receivable
OthersNet cash used in investing activities
Cash Flows from Financing Activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Proceeds from share issuance to non-controlling shareholders
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from change ofscope of consolidation
Cash and cash equivalents at end of period

Millions of yen¥

36,40537,953
2,692
1,059
2,331
(1,671)—879
162(1,648)
1,064
(132)
498
—
—
(19)
(25,608)(27,541)
14,6283,328
44,381
1,717(1,085)
512—(11,419)
34,106¥22,201
36,262—897——(1,624)2,034
59(1,445)
1,259
(109)
765
—
—
(796)
(246)
8,838
1,392
6,221
75,7101,533(1,325)—
1,624(3,502)
74,040$242,446
295,488—————(1,043)(828)(14,360)
14,719(1,027)
4,719(10,562)
10,846—(26,019)(186,293)(35,841)(34,604)
257,636
14,545(14,645)
8,817—(51,345)
215,008(39,628)87(2,363)
(909)
2,509
—

(37,329)—(2,601)(77)877—(39,431)—(2,965)
(74)
57
104

(296,778)
653(17,700)(6,811)
18,793
—

—

(336)

—

—

(99)
336
(1,902)(41,970)

(398)
632
(362)
(39,595)

(874)
1,145
(1,191)(43,229)

(741)
2,521
(14,248)(314,311)

21,814
13,541(6,198)(863)(8,051)
0(7,599)
0
(284)

6,606
9,119
(9,390)(618)(4)
0(6,523)0(231)(3,515)776(11,712)
(501)
(3)
0
(6,523)—(260)

163,366
101,409(46,421)(6,467)(60,296)3(56,911)
0(2,127)(6)
12,352894(13)40,712(63)(1,105)946(5,647)46,360(162)(21,903)
(198)
8,708
37,606(51)
92,505
6,696(100)
304,894—
40,699¥—40,712¥45
46,360$—304,793

Kaneka Integrated Report 2023

91

AppendicesFinancial Highlights

Nonfinancial Highlights

Net Sales / Operating Income

Net Income Attributable to Owners of Parent / ROE(Billions of Yen)

(Billions of Yen)

1,000
800

50

43.6
36.0

755.8

691.5

621.0

601.5

35.1

577.4

600

40

10
2018

2019

2020

2021

2022 (Fiscal year) 0

Net sales
Operating income (right scale)

45.2

45.1

500
40.2

312.2

100
0

59.3

26.0

236.6
53.4

26.5

(%)

(Billions of Yen)

50

500

2019

15.8

3,000

2020

231.2
52.9

22.8

73.6
62.7

34.0

2021

152.1

10

100

2018

2019

2020

2021

2022 (Fiscal year) 0

0

29.4

Other

4.7

4.9

27.8

2018

2019

53.5

2020

80
53.3

2021

R&D expenses
R&D expenses ratio (right scale)

Kaneka Integrated Report 2023

2,000
1,545

60

1,500

40

1,000

30.9

(%)

(Billions of Yen)

8.0

300

32.7

25

24

53.3

4.3

155.0

4.0

146.2

2021

2022 (Fiscal year) 0

4,201

0

2013
(Base year)

4,211

2018

1,758

4,247

4,092

4,105

3,802

2019

2020

2021

20

500

2022 (Fiscal year)

0

1,905

1,743

1,821

40

2019

New product sales
New product sales ratio (right scale)

1,314

1,272

24

24

165.7
137.5

80
1,484

2020

2021

1,548

1,455

294

1,364

328

284

269

2013
(Base year)

2018

1,190

2019

1,171

1,220

2020

2021

1,095

60

20

2022 (Fiscal year)

1,000

20

36.9
11.7

10.7

24.9

25.2

24.9

2018

2019

2020

9.0

37.7

35.6

34.1

10.1

6.8

27.6

27.3

2021

2022

10

500

0

2018

2019

2020

2021

(Fiscal year)

2022

0

Volume and Rate of Waste Sent to Final Landfill(%)(Thousand tons)(Tons)

30

100
80

20

40

2022 (Fiscal year) 0

0

81

80

77

71

60

51

1996

19

6

7

2018

2019

18

16.33

10,000

49

47

15

17

16

5

7

5

2021

■ Amount of waste generated by Kaneka and Group companies in Japan■ Amount recycled by Kaneka and Group companies in Japan■ Amount of waste generated by overseas Group companies■ Amount recycled by overseas Group companies

4,684

5,294

6,301
5,110

4,000

16

2020

12

6,000

35
18

11,549

8,000

56

48

(%)

12,000

89

84(Fiscal year)

Overseas Group companies

Waste Generated and Recycled

22
161.8

100

85.0

40

33.9

1,587
30

2022 (Fiscal year) 0

10

2018

342

85.8

Kaneka and Group companies in Japan
Overseas Group companies
CO2 emission intensity index for all parent manufacturing sites (right scale)

1,500

20
0

231

91.6

60

6.0
4.5

1,614

95.7

Kaneka and Group companies in Japan

100

2020

1,042

80

2,000

2.0

2019

4,844

91.4

100

New Product Sales / New Product Sales Ratio

10

2018

1,227

Net assets
Shareholders’ equity ratio (right scale)

200
4.8

436.4

20

142.0

29.0

381.0

412.2

40

113.1

1,033

100.0

(Million m3)

200

109.3

1,084

5,474

2,500

(Tons)

20

115.7

5,125

100

(%)

74.6

42.4

5,189

90.5

Water Consumption

51.1

47.3

1,316

90.4

Volatile Organic Compounds Emissions

300

50.7

857

5,527

92.4

Kaneka and Group companies in Japan
Overseas Group companies
Energy intensity index for all parent manufacturing sites (right scale)

30

354.1

5,059

(Thousandtons-CO2e)

94.9

1,500

2022 (Fiscal year) 0

77.9

37.0

91.6

4,500

2.0

2018

6,000

100.0

GHG Emissions and Energy Origin CO2 Emission Intensity Index

4.0

400

40

92

6.0

40

341.6

(Billions of Yen)

0

7,500

360.7

R&D Expenses / R&D Expenses Ratio

20

0

8.0

23.0

10

48.8

Asia
North America
EuropeOverseas sales ratio (right scale)

30

14.0

40.0

39.3

400
249.7

4.2

5.7

(GWh)

Net Assets / Shareholders’ Equity Ratio(Billions of Yen)

200

22.2

4.6

26.5

(%)

Net income attributable to owners of parent
ROE (Return on equity) (right scale)

Overseas Sales / Overseas Sales Ratio

300

30

20

200

7.1

6.7

20

400

0

40

30

27.5

26.0

(Billions of Yen)

Energy Consumption and Energy Intensity Index

2022 (Fiscal year)

2,000
0

1.05
1996

877
2018

0.95
761
2019

0.54

9
4,234

6

3
0.37
280
350
2021
2022 (Fiscal year)
0.43

479
2020

Kaneka and Group companies in Japan
Overseas Group companies
Final landfill disposal rate for Kaneka and Group companies in Japan (right scale)

Kaneka Integrated Report 2023

93

AppendicesNonfinancial Highlights

Corporate Profile

Percentage of Female Hires

Corporate Profile (March 31, 2023)

Number and Rate of Employees Taking Childcare Leave(%)(Persons)(%)

27.3

30

24.7

60

26.7
22.4

21.1

100

100

100

100

100

18

20
5

0

2018

2019

2020

2021

2022

(Fiscal year)

0

3

2018

14

19

17

100

(%)

100

100

100

100

31

2020

2021

94

95

Facilities inJapan

Osaka (Osaka Prefecture)2022 (Fiscal year) 0

Shiga (Shiga Prefecture)

2-3-18, Nakanoshima, Kita-ku, Osaka
530-8288, Japan

40

Date of
Establishment

September 1, 1949

Paid-in Capital

33,046 million yen

Number of
Employees

11,545 (Including consolidated subsidiaries)

100

(%)

100

3.0
2.5
2.0

93
90

Nagoya (Aichi Prefecture)
Takasago (Hyogo Prefecture)

Osaka Head Office44
20

Sales Office
Manufacturing Site

1-12-32, Akasaka, Minato-ku, Tokyo
107-6028, Japan

Kashima (Ibaraki Prefecture)
Research
Institutes

Material Solutions New Research Engine
Electronics Research Laboratories
Bio-Pharma Research Laboratories
Agri-Bio & Supplement Research Laboratories
Regenerative Medicine and Cell Therapy
Laboratories

3,447 (Non-consolidated)

Photovoltaic & Thin Film Device ResearchLaboratories
Engineering Research Laboratories

Employment Rate of Persons with Disabilities

98

95

Tokyo Head Office

14

9
2019

19

22

Number of employees: Male
FemaleRate: ● Male (right scale) ● Female (right scale)

Return Rate of Employees Taking Childcare Leave

Offices8040

10

KANEKA CORPORATION

53

47

20

Name

120

Process Development Research Laboratories
Green Planet Technology Laboratories

2.17

2.21

2.2

2.2

2.38
2.2

2.53
2.3

2.35

AffiliatedCompanies

111 Subsidiaries

URL

https://www.kaneka.co.jp/en/

2.3

1.5

(Including 43 (in Japan) and 46 (overseas)
consolidated subsidiaries)

1.0
85
0.5
2018

80
● Male

2019

2020

2021

2022

(Fiscal year)● Female

0

2018

2019

2020

Employment rate of persons with disabilities

2021

2022

(Fiscal year)

We will establish a head office in each region so that we can run our business in a way that is rooted in the region.
The Kaneka Group operates in 21 countries around the world, including Japan.

Legally mandated employment rate

Europe11
companies

Training Costs (per Person)

Number of Days and Rate of Paid Leave Taken(Thousands of yen)(Days)(%)

100

20

80

100

76.7
64.5

60

58.4

59.7

15
57.5

66.3
12.8

70.3
13.6

66.6

68.0

13.0

13.2

Global Network (March 31, 2023)

72.7
14.1

Kaneka Europe Holding N.V.

75

10

50

5

25

40
20
0

2018

2019

2020

2021

2022 (Fiscal year)

0

2018

2019

Number of days of paid leave taken
Rate (right scale)94

Kaneka Integrated Report 2023

2020

2021

2022 (Fiscal year) 0

Asia
27
companiesJapan
43
companies

Americas8
companies

Kaneka Americas Holding, Inc.
Kaneka Asia Co., Ltd.

Kaneka Integrated Report 2023

95

Appendices
Investor Information

Editorial Policy

Stock Basic Information (March 31, 2023)
CommonStock Traded

Prime Market, Tokyo Stock Exchange

Transfer
Agent

Mitsubishi UFJ Trust and Banking
Corporation

Shareholder Composition
1.4%

Accounting
Auditor

150,000,000 shares

Issued Shares

68,000,000 shares

Number of
Shareholders

26,28829,449,000 shares(56 shareholders)

8.8%

Foreign companies

Sustainable Solutions for an Evolving World.

18,032,000 shares(348 shareholders)

KPMG AZSA LLC

Authorized CapitalFinancial institutions

20.0%

Number of
Shareholders

43.3%

26,288

Individuals and others
13,567,000 shares(25,445 shareholders)Other companies
5,997,000 shares(395 shareholders)

26.5%

Financial instruments firms

The Kaneka Integrated Report 2023 was prepared as a booklet reporting
financial and non-financial information. We hope that it will help stakeholders understand the Kaneka Group’s medium- to long-term value creation.
Kaneka Group is strengthening efforts for ESG management to contribute to
the sustainability of the earth and the establishment of a sustainable society.
In this report, we convey our strong determination toward our mission,‘KANEKA thinks “Wellness First.”’ We outline how we find a healthy balance between social value and economic value creation through our business so that we can help solve social issues.
We hope that this will help our shareholders, investors, and other stakeholders deepen their understanding of our company.

Kaneka Integrated Report 2023

953,000 shares(44 shareholders)Notes: Share numbers are rounded down to the nearest thousand.
Percentages are rounded to the nearest decimal point.

Cautionary Statement Regarding Forward-looking Statements
Major Shareholders
Share Units Owned(thousand shares)

Percentage of Total
Shares Issued (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

7,279

11.22

Nippon Life Insurance Company

3,114

4.80

Sumitomo Mitsui Banking Corporation

3,091

4.76

Meiji Yasuda Life Insurance Company

2,825

4.35

BNYMSANV AS AGENT/CLIENTS LUX UCITS NON TREATY 1

2,369

3.65

MUFG Bank, Ltd.

2,308

3.56

Custody Bank of Japan, Ltd. (Trust Account)

2,193

3.38

Mitsui Sumitomo Insurance Company, Limited

2,104

3.24

Kaneka Business Partner Shareholding Association

1,283

1.98

Kaneka Employee Stock Ownership Plan

1,249

1.93

Name of Shareholders

Notes: The numbers of Share Units Owned are rounded down to thousands of shares.
The Percentage of Total Shares Issued is calculated by using deducting number of treasury shares from Number of Shares Issued and Outstanding and rounded
to two decimal places.
In addition to the above list, the Company maintains 3,106 thousand shares of treasury stock.

Common Stock Price Range(Tokyo Stock Exchange; Yen)

ESG Index and Socially Responsible Investing
Evaluation

Years ended
March 31

2019

2020

2021

2022

2023

High

5,620

4,535

5,000

4,990

4,040

Low

3,640

2,112

2,406

3,165

3,175

Notes: Figures up to and including April 3, 2022 are stock prices quoted at theTokyo Stock Exchange (First Section). Figures up from April 4, 2022 on
are stock prices quoted at the Tokyo Stock Exchange (Prime Market).

(as of December 2023)

The forward-looking statements in this report are based on information currently available to the Company andcertain assumptions that the Company deems to be reasonable. Such statements do not constitute a commitmentby the Company that they will be achieved. Actual results may differ significantly due to various factors.

Reporting Organizations
The scope of reporting includes Kaneka and its consolidated group companies in Japan and overseas. However, thescope of data concerning Responsible Care activities covers Kaneka and 63 Group companies (47 in Japan and 16
overseas).
In this document, Kaneka Corporation is referred to as “the Company” or “Kaneka” and Kaneka Corporation and its
group companies are referred to as “the Group” or “Kaneka Group.” Where the text refers only to “Group companies,” this does not include Kaneka Corporation.
The totals of figures presented in tables and graphs may differ due to rounding. Some items contain revisions todata from previous years.

Referenced Guidelines
GRI Standards; Environmental Reporting Guidelines 2012 of the Ministry of the Environment; Environmental Accounting Guidelines 2005 of the Ministry of the Environment

Information Tools
Kaneka Group posts a variety of information on its
official website as a tool for communicating withstakeholders.

Financialinformation

	Financial Results and Presentations
	Reports (To Our Shareholders)	Integrated Reporthttps://www.kaneka.co.jp/en/ir/

Non-financial
information

Further details about the Kaneka
Group’s ongoing ESG activities are available
on our website.
ESG activities
https://www.kaneka.co.jp/en/esg/

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Kaneka Integrated Report 2023

Kaneka Integrated Report 2023

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