CONTENTS

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Environment

Environmental management
Environmental management system

Environmental vision
INOAC respects the natural environment of ourirreplaceable earth and contributes to realizing an affluent
society that is comfortable to live in through technology
harmonized with our environment andenvironment-friendly corporate activities.

Environmental policy

In order to engage in environmental activities in an organized fashion, the Person Responsible for Environmental Management
implements integrated management related to the environment, under the direct control of top management. In addition, thecompany as a whole also engages in environmental activities under the direction of the Environment Committee. We haveorganized specific section committees to handle industrial waste and energy saving, and we coordinate environmental
management through these committees while seeking further improvements in mitigating our environmental impact. As westrengthen the connection between environmental management and our main business in managing our objectives, we are also
supporting the appropriate efforts where changes are taking place, such as newly built business locations, buildings, andproduction lines.
Environmental Preservation Promotion System(1) We observe environmental laws and regulations, thoroughly
ensure compliance, and engage in business activities that society
can trust.
(2) We work to reduce CO2 emissions such as by saving energy, tohelp achieve a carbon neutral society and prevent global
warming.
(3) We work on resource conservation, waste reduction and recycling
to contribute to a recycling-oriented society.
(4) We properly manage chemicals that could impact theenvironment and seek to preserve our environment by reducing
risk.
(5) We actively develop products with less environmental impact,
contributing to the conservation of nature throughout the life
cycles of the products.
(6) We engage in environmental management, educate employees
about the environment, implement environmental audits, andcontinue to improve.
(7) We contribute toestablishing a sustainable
society through local
environmental preservation
work as good corporate
citizens.

CSR REPORT 2022

Person Responsible
for CN Committee

CN Committee(CO 2 reduction)

Energy Section Committee
Raw Materials Section Committee

Top management

Environment Committee(ISO 14001-related)

Person Responsible
for Environmental Management

Waste Reduction Committee

Logistics Section Committee
Departmental Section Committee

Chemical Substances
Management Committee* CN: Carbon Neutrality

Internal environmental audits

External environmental examinations

We implement internal environmental audits to checkthe operational state of our environmental management
system. The audit team consists of two to three
employees who have completed the auditor trainingprescribed by the company. The team checks if theenvironmental management system is being properly
operated, maintained, and improved. We create audit
guidance and take steps such as revising checklists toemphasize efforts toward goal achievement andcompliance in order to improve the quality of the audits.

The Japan Quality Assurance Organization (JQA), an external
certification body, conducts examinations to check if ourenvironmental management system is functioning properly inaccordance with ISO 14001:2015. The majority of examinations
during FY 2021 were conducted remotely due to the pandemic. In
the results, one point for improvement was identified, but swift
corrective action was taken afterward, and we were able to renew
our certification. Also, as overall findings, some issues were raisedin terms of environmental aspects, competences and awareness,and processes such as compliance evaluations.
12

CONTENTS

Introduction

Feature Story

SocialEnvironment

Governance

Data & Statistics

Environment

Environmental management

Reducing our environmental footprint

Summary of major activities in FY 2021

Activities to reduce waste

The results of our main environmental efforts in FY 2021 are shown in the table below. In terms of reducing CO2
emissions resulting from energy use, the CN Committee took the lead in implementing various initiatives.
However, fluctuations in production volume due to factors such as world trends and the semiconductor shortage
resulted in lower production efficiency, thus we were unable to reach our targets. For industrial waste disposal, we
moved forward with efforts to reduce our volume of industrial waste disposal including in recycling and disposal ofvaluables. Our disposal of valuables is shrinking on a yearly basis, and we did not achieve the corresponding
goal. For emissions of PRTR substances, we made progress in efforts such as replacing the materials that
contain these substances. Since we are producing higher volumes of products that use PRTR substances, ouremissions of these substances also increased year-on-year.

In waste reduction, the company-wide Waste Reduction
Committee led efforts to improve our rate of productcommercialization by reducing defects and increasing yield,
and to reduce waste by reusing more material cutoffs. The
committee is working on technology to recycle cross-linked
polyethylene material cutoffs that we produce and isdeveloping a cyclical system to re-employ material cutoffs
that would normally be discarded as raw materials.
Production lines are currently being prepared for mass
production of recycled material. The committee is striving tocommercialize recycled materials and reduce waste.

Initiative
Reduce energy
consumption(in plants)
Reduce waste(in plants)

Targets in FY 2021

Achieved in FY 2021

Measured units(tons/million yen)

0.500 or less

0.5276[CO 2 emissions (tons)][81,337 (2020 result)][83,876 (2021 result)]

Measured units(tons/hundred million yen)

6.7 or less7.0

[treated amount (tons)][10,653 (2020 result)][10,814 (2021 result)]

1.97 or less

2.2 or less[286 (2020 result)][331 (2021 result)]

At least 1,298

1,722

Issuance of CSR reportIssuance of CSR report

Measured units
PRTR substances(tons/hundred million yen)reduction in release[amount emitted +and transfer amounts
amount transferred (tons)]

Environmental
proposal activities*

Number ofenvironmental
improvements

Environmental communication

Target reached* ISO 14001 targets

Not yet reached but progressing

ResultActivities to reduce the use ofenvironmentally hazardous substances
We use PRTR substances such as m-tolylene diisocyanate,a raw material for polyurethane foam, as well as xylene andtoluene which coatings contain. To reduce the amount ofthese substances handled, released, and transferred, we
have made progress in replacing dichloromethane and bis(2-ethylhexyl) phthalate plasticizer which is partially left overas foaming agent. On the other hand, we also launched new
products that use coatings containing large quantities ofthese substances, so our overall amounts handledincreased compared to the previous year. Efforts to address
water-related risks

PlantsSeino Plant Ikeda Factory
Seino Plant Ikeda 2nd Factory
Seino Plant Ohno Factory

Yana Plant
Yana 2nd Plant
Ishimaki Plant

Shinshiro Plant
Kira Plant
Toyohashi Plant

Hadano Plant
Uruma Plant

Associated companies (including affiliates)
Hokkaido INOAC
Tohoku INOAC Kogota Plant
Tohoku INOAC Wakayanagi Plant
Tohoku INOAC Kitakami Plant
Tohoku INOAC Tsukidate Plant
Higashi Nihon INOAC
Nishi Nihon INOAC

CSR REPORT 2022

Kyushu INOAC Kikuchi Plant
Kyushu INOAC Ukiha Plant
Kyushu INOAC Yukuhashi Plant
Kyushu INOAC Kitakyushu Plant
TFJ Saitama
TFJ Fukama
RIC Taketoyo

RIC Mie
HUKLA Japan
Taiyo Rika Industry Seki Plant
Daito Kasei
I-Sheet Industries
Meinan Aiko Kasei
Far East Tooling(tons)

12,000
9,300

9,000

10,166

9,671

2019

2020

10,814

6,000
3,000
0

2018

2021

PRTR (amount emitted + amount transferred) (tons)(tons)

400
300

306

320

2018

2019

301

331

200
100
0

2020

2021

Target not reached

Business locations from which environment data is collected to summarize major activities are shown below.
Anjo Plant
Sakurai Plant
Nanno Plant

Waste treatment amount (tons)

PEC Okazaki
Miyama KaseiIWFKINOAC Housing & Construction
Materials Ibigawa
INOAC Housing & Construction
Materials Ariake
Kyushu Color Foam

Efforts to address water-related risks
Since we use large volumes of water for cooling our facilities
and cleaning, we consider water to be a precious resource.
Our previous activities for water-related risks involved efforts
to address droughts, water-related disasters, waterpollution, and water regulations. For water recycling, we
recycle the water we use to clean equipment in our coatingsprocesses. As measures against water pollution, we
conduct training to prevent spills or runoffs of raw materials,
and we also monitor ground and drainage water. To reducewater usage going forward, we started conducting present
state investigations in FY 2022 and are pushing forward withactivities geared toward reductions.

Water intake (thousand m3)
Clean waterIndustrial use water

Groundwater(thousand m 3)

3,000
2,392

2,392

2,377

2,352

2,000
1,939

1,918

1,971

1,990

249
204

206
228

182
224

168
234

1,000

0

2018

2019

2020

2021

13

CONTENTS

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Environment

Environmental risk & information management
Observing environmental laws andregulations
At INOAC, we identify environmental laws andregulations that are relevant to our business activities
and manage them on a daily basis. Through monitoring,measurement, and assessment at each plant, weprevent environmental pollution and otherwise conduct
environmental risk management to ensure that we
properly comply with laws and regulations related tonoise and industrial waste treatment as part of ourenvironmental management system. In accordance withbusiness ethics, we will continue strictly observing
environmental preservation agreements with local
governments, including environmental laws andregulations.

Major environment-related laws and regulations pertaining
to our businessAir

Air Pollution Control Act, Automobile NOx PM Law,
Act on Special Measures against Dioxins

Water quality and soil

Water Pollution Prevention Act, Purification Tank Act,
Sewerage Act, Soil Contamination Countermeasures Act

Noise, vibration & odor

Noise Regulation Act, Vibration Regulation Act,
Offensive Odor Control Act

Chemical substances

Act on Confirmation, etc. of Release Amounts of SpecificChemical Substances in the Environment and Promotionof Improvements to the Management Thereof, Poisonousand Deleterious Substances Control Act

Resource conservation& recycling

Act on the Rational Use of Energy, Act on the Promotionof Sorted Collection and Recycling of Containers andPackaging, Act on Rational Use and Appropriate
Management of Fluorocarbons, Act on Special Measuresconcerning Promotion of Proper Treatment of PCB
Wastes, Waste Management and Public Cleansing Act

Disaster prevention

Fire Service Act, High Pressure Gas Safety Act

Factory Location Act, Act on Improvement of
Pollution Prevention Systems in Specified Factories,
Radio Act* Local government ordinances are omitted* Some of the above are abbreviatedGeneral & others

Promoting IMDS, chemSHERPA and more
INOAC registers information on chemicals and reports it to our customers through IMDS*1, particularly in theautomotive field which is our main field of business. We have a management system to obtain the necessary
information via our supply chain and to register the information into IMDS.

Information collection through IMDS in INOAC – reporting process and chemical management system
Component supplier
Products

INOAC
Components list
drawings, etc.

Material supplier

In-house database
Products
Component parts
Materials
Chemical
substances

IMDS
data

Auto
manufacturer,
etc.

Materials
Chemical
substances

Creating an in-house database
The Automotive Division is creating an in-house database through which information on chemical
substances contained in parts and materials purchased from clients is identified based on information
about chemical substances, and centrally managed. This has allowed us to be certain of ourcompliance with laws and regulations on chemical substances and client requirements which increaseeach year, while also helping to improve the efficiency and the reporting accuracy of information weregister in IMDS and when examining the chemical substances contained in our products.

Establishment and implementation of green procurement criteria
We ascertain what chemical substances are regulated by laws, regulations, and by our customers,
based on which we create our green procurement criteria - a list of those chemical substances that
we should work to reduce. We present these criteria to clients and use them to obtain information on
chemical substances contained in raw materials to be purchased. We are also consistently monitoring
the latest regulatory developments, based on which we revise these criteria once each year.

Communication about chemical substance management
The Global Quality Assurance Division is acompany-wide organization forenvironmental stewardship, which organizes
and leads meetings for the chemical
substance management sections of eachdepartment once every two months. They
review green procurement criteria, check the
management system and establish orchange its operating rules, and exchange
opinions concerning the latest trends inchemical regulations, such as the REACH
regulation and RoHS Directive. They also
periodically audit the management system ineach department. We strive to maintain andimprove chemical substance management
systems that are appropriate and reliable.

H old r e

g u l a r mee t ing s
Procurement
sections
Automotive
parts sections

Global Quality
Assurance
Division

Polyurethane
products
sections

Rubberproducts
sections

Maintain and improve
management systems

Plastic
products
sections

I mp l eme n t a u di t s a t e ach o f t he s ec tion sTraining for emergencies
We also collect information and report it to our clients using the chemSHERPA format, which is widely used in
the industrial world, especially the electrical machinery industry.
*2*1 IMDS (International Material Data System): A database for transmitting and obtaining information on materials and chemicals over the Internet for the
automotive industry, which was originally developed to comply with the EU ELV*2 chemSHERPA: A unified format to transmit information on chemicals contained in products in the supply chain, which the Ministry of Economy, Tradeand Industry took the initiative in developing

CSR REPORT 2022

We identify accidents and emergencies according to the characteristics of each business facility, andperiodically conduct training to prevent and stop the spread of environmental pollution resulting fromearthquakes, fires and leakage of oils and raw materials. In 2021, disaster prevention training was
conducted at the Anjo Plant (in Aichi Prefecture) on July 21 and raw material spill prevention training
was conducted in manufacturing sections on October 22. These trainings were smaller in scale due tothe pandemic. In other facilities, training for emergencies and urgent circumstances is conducted on a
preparatory basis.

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