Disclosures Based on TCFD Recommendations
Management Involvement in Sustainability

Governance

Risk
Management

Tokuyama positions the issue of climate change as one ofto discuss risks such as climate change, human rights and CSR

the greatest management risks. In February 2021, Tokuyama

procurement, creating a framework for identifying and evaluating

announced its support for the TCFD recommendations,those risks and opportunities across organizations. Particularlyand in April 2021 it established a Carbon Neutral Strategy

important matters are discussed in the CSR Promotion Council

Division, reporting directly to the President. Climate-relatedchaired by the President, and reported to the Board of Directors.

risks and opportunities that have an impact on the Group’s

The Board of Directors confirms the progress of action plans in line

business have been analyzed and reflected in Medium-Termwith quantitative targets established to “contribute to mitigation

Management Plan 2025.

of global warming,” which is a priority issue in both Medium-Term

In FY2022, a new Sustainability Committee was establishedManagement Plan 2025 and future investment plans.

Business Opportunities in the 1.5°C Scenario

FutureEventsExpansion ofelectrification ofmobility

Rapid
digitalization

Spread of energysaving housing

Rapid increasein demand forwater electrolysis
equipment

Expansion ofdemand for lithium
batteries

Expansion ofsemiconductor
demandIncrease in demand
for functional
materials, e.g.
insulation material

Ion exchange
membranes

Photoresist developer

Business
Opportunities
Products andTechnology

Framework for Promoting Carbon Neutrality

Spread of greenhydrogen

Water electrolyzers

Sustainability Committee

Board ofDirectors

ReportCSR Promotion
CouncilPresident andAll ExecutiveOfficers• Consideration of cross-organization issues concerning sustainability includingclimate change• Corporate Planning Division, Corporate Social Responsibility Division, GeneralAffairs and Human Resources Division, other divisions designated by thecommittee chair

InstructSupportRequest

Environment Committee

Silica for CMP

Thermalmanagement
materials

High-purity IPA
Thermal management
materials, etc.

Emissionsfrom Energy
Consumption

consumption rate. Now, however, it has designated total CO2Strategy

Medium-Term Management Plan 2025 incorporates risks

a 4°C scenario on a timeline from the present until 2050 bysuch as increased costs caused by carbon pricing, thereferring to the International Energy Agency (IEA) transition

impact of changes in customers’ procurement policies,

risk scenario and the Intergovernmental Panel on Climate

and the impact of changes in the policies of financial andChange (IPCC) physical risk scenario. The Company aims

investment companies on funding, as well as new businessto mitigate climate-related risks by transforming its portfolio

opportunities in the area of the environment. Furthermore,from that of an energy-intensive company to one of a value-

the Company implemented analysis of a 1.5°C scenario andcreative company.

PolicyRegulation

Reputation

1.5℃

MarketMarketRecyclingEfficiency
4℃

PhysicalRisk(acute)Risks

Strengthening ofcarbon tax
Request forlarge CO 2emitters to make
improvements
Penetrationof green
procurement bycustomers
Increasing
demand fromenvironmental
industries
Requests for
CCU-related
products
Increased severityof abnormal
weather,rising sea level

Increase of funding costs associated with requests
and divestment by investors

Recycling technology
for photovoltaics
modulesemissions as company-wide measurement and performanceindicators in Medium-Term Management Plan 2025, andEmissions fromRaw Materials(limestone)

specified as targets a 30% reduction in FY2030 with FY2019
as a baseline, and the achievement of carbon neutrality in
FY2050. Furthermore, emissions are calculated for categories

KPIs and Targets

Captivepowerplants

Zero CO 2 emissions(target of 50% reduction in FY2030)

CementSeek to reduce limestone
consumption

Chemicals

Explore possibility of offsetting
emissions with CCU technologies,
green products, etc. (alreadyunderway)

1 through 7 and 9 for Scope 3, and certification has beenobtained from an external organization.
➡P17 “Carbon-Neutrality Action Plan”

FY2050 CO2 Emission Reduction Target

Climate Change Scenario Analysis

Increased operating costs associated with carbon
pricing system(Reference: Base year FY2019 total CO 2 emissions ofapproximately 6.76 million tons)

Conversion ofsewage sludge intobiomass

Incorporation into Medium-Term Management Plan 2025

Climate Change Scenario Analysis (Risks and Opportunities)

Impact on the Company

Plaster sheets

Waste gypsum
board recyclingtechnology* Business opportunities in 4°C scenario include cement-type stabilizers required for disaster prevention and disaster mitigation, and diagnostic agents for addressing infectious diseases• Tracking GHG emissions and implementing energy-saving measures• Corporate Social Responsibility Division, Tokuyama Factory, Kashima Factory,
Business Divisions

EventSuper-insulated,highly-airtight plastic
window sashes

Response to large
quantities of wastefrom photovoltaics
panelsDivisionsand Group
Companies(GHG) emissions, the GHG discharge rate, and the energy

Type

Increase in demand
for recycling ofwaste material andindustrial waste

Polycrystalline silicon

Until now, the Company has managed greenhouse gas

Scenario

Formation of a closed-loop society

Opportunities

Countermeasures

Transformation of portfolio into energy-efficientbusiness model
Consideration of introduction of renewable energy

Reduction of CO2 from energy

Impact[Power Plants] Use biomass/hydrogen (ammonia) as mono-fuel or in combination withother fuels, use local energy[Cement] Increase combustible waste usage[Manufacturing] Increase energy efficiency, improve processes, upgrade equipment

Large

❶

Medium(70) %

CO 2 emissions:

Increase of capital investment associated with requests
for changes in energy-saving manufacturing processes

Execution of planned improvements and capital
investment
Establishment of energy-saving manufacturingprocesses

MediumExpansion of waste treatment and resource utilizationindustries, expansion of industries against global
warming

Commercialization of renewable resources andenergy (biomass, hydrogen, ammonia, etc.)

Large

Entry into new business areas through establishmentof carbon recycling systems

Acceleration of research and development, fieldtrials and implementation in actual business

Large

Damage to production equipment due to flooding orwindstorms, delayed production plans and increased
costs due to disruption of supply chains

Expansion of BCP response such as strengtheningof disaster prevention measures and use ofMedium
multiple procurement sources

Reduce CO2 from raw materials[Cement] Increase SCMs, develop calcium recycling technologies[Chemicals] Improve processes

Approx. 6.76
million tons

Green products,
technological innovations

Common for ❶ through ❸❷(10) %

Transform business portfolio
Collaborate with other companies in Shunan petrochemicalcomplex, productively use waste heat
FY2019 (Baseline)

Goals for FY2050[R&D] Develop CCU technologies andgreen products❸(20) %