Stakeholder Engagement

Ensuring We Continue to Earn Society’s Trust

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Communication with Shareholders and Investors
We will help realize a sustainable society through our business activities while building trust-based relationships with society by

It is important that ISK Group continue to earn society’s trust so that we can grow in a sustained manner.

communicating with all stakeholders, not just customers, suppliers, and employees.

We established the Multi-Stakeholder Policy on February 1, 2023 to build an even better trust-based

We’ve put in place structures to promote dialog with shareholders, and we are dedicated to providing continued stable return for

relationship with our stakeholders.

shareholders.

We place importance on giving back to our employees and giving consideration to our business partners
from the perspective of both contributing to the realization of a sustainable society and increasing
corporate value through our business. Therefore, we have put into place the following policies to achievethis.

1. We have an IR Committee, which reports directly to the president, as an entity charged with formulating the policies andstrategies that guide our IR activities, studying how information should be disclosed, and implementing associated measures.
2. We’ve appointed a director in charge of public relations to oversee issues related to constructive dialog with shareholders andinvestors.

Trust-Based Relationships with Employees

3. We hold financial result briefings twice a year in spring and fall to provide a forum for communication between top management

We will concentrate on maximizing added value through sustainable growth and productivity improvement by investingand institutional investors. During individual interviews with institutional investors, IR officers engage in lively discussions on

management resources in growth areas, and by developing and boosting our employees’ skills.

growth strategies for each of our businesses, shareholder returns, and other topics. Web-based briefings have replaced face-

We strive to continuously return the earnings and results we generate to our employees by increasing salaries at appropriate times

to-face briefings and become standard since the pandemic, making it possible to flexibly respond to interviews.

and with appropriate methods based on the social conditions and the company’s situation, creating an inspiring, fulfilling work
No. of participants in company orientations(including online participants since FY2020)

environment, and actively nurturing human resources who are innovative and can provide value to society.
Trends in institutional investor IR coverage

Collaboration with Business Partners
We have endorsed the aims of the “the council on promoting
partnership building for cultivating the future” promoted by theGovernment of Japan, The Small and Medium Enterprise Agency,
and other organizations, and have released a Declaration on

FY2018FY2019FY2020

FY2021

FY2022FY2018FY2019FY2020

FY2021

Domestic investors

77

48

39

71

51

May

42

36

call off35

FY202235

Overseas investors

14

19

9

19

21

November

39

32

22

38

34

Total

91

67

48

90

72

Total

81

68

22

73

69

4. We work to provide the materials we disclose in both Japanese and English

Building Partnerships.

to make it convenient for shareholders and investors who don’t speak Japa-

We will strive to ensure all our suppliers and business partners

nese to learn about our operations. Shareholders’ meeting convocations are

related to our products and services understand and comply withtranslated into English in their entirety, including business reports. Those

our initiatives, and we aim to build new partnerships by promoting

materials are made available on our website, the website of the Tokyo Stockcooperation, coexistence, and co-prosperity with all business partners. Thus, we will fulfill our corporate philosophy of contributing

Exchange, and the electronic voting platform used by institutional investors.

to a better society, life and environment through chemical technologies; respecting shareholders, customers, suppliers, local

System for electronic provision of materials for General Meetings of Share-

communities and employees; and abiding by laws and regulations and maintaining transparency in business activities.

holders starting with our 2023 shareholders’ meeting. Related materials areprovided electronically and in print earlier than legally required.

Declaration of Partnership Building (in Japanese)
https://www.iskweb.co.jp/cms_QvjyqMOahIEeY67QUD5y4guNNOnpblYc/wp-content/uploads/2023/01/20221227_f4899c59931190576547cfb6edae0e04.pdf

5. We host an annual roundtable with major shareholders with voting rights

2023 ordinary general meeting of shareholders

about topics such as our business performance and Corporate Governanceinitiatives. In addition to reporting views and information from those events to the Board of Directors and sharing them withdirectors and members of the audit and supervisory board, we use them to improve our governance.

32

Stakeholder Engagement

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Communication with the Local Community
Safety and Disaster Preparedness
Yokkaichi Plant

Central Research InstituteIn preparation for emergencies, Yokkaichi Plant conducts annual joint drills

Comprehensive disaster drills are held for all personnel every September

with the plant’s Self Disaster Team and the local fire department, which are

to raise awareness of disaster preparedness. After the drill, the fireopen to the local residents.

department provides us with feedback so we can conduct more effective

In fiscal 2020 and 2021, due to the impact of COVID-19, we cancelled thedrills. In fiscal 2022, we erected a smoke house to simulate the fear of

joint training with the fire department and the public was, and conductedsmoke and experience evacuation in the event of fire with the cooperation

emergency drills in-house only. But in fiscal 2022, for the first time inof the fire department, and participants learned how to protect themselvesfrom smoke.

three years, we restarted joint drills with the local fire department. We work
to improve our level of disaster preparedness each year by adding newelements (such as the use of drones) to the drills.

Joint drill by ISK’s Self Disaster Team and the local fire
department

Evacuation drill using a smoke experience house

Community Cooperation Activities
Yokkaichi Plant

Central Research Institute

We hold regular plant tours twice a year and special classes for students from local junior high school to build further trust with the

Employees volunteer to clean up the surrounding area and assist the community association where our dormitory is located to actively

local community. In terms of social contribution activities, we voluntarily carry out clean-up activities around the plant, and we also placecommunicate with the local community and promote understanding for our business activities.

importance on local events and participate in various community-organized events.
Family Day 2022 Event

Blood Drives

Japanese Red Cross Society Silver Achievement Award
presentation

Our Head Office in Osaka and the Central Research Institute hold

The Central Research Institute organized a Family Day for its employees andtwo blood drives each year, while the Yokkaichi Plant holds three

their families. The event offered a social gathering with business managers,

blood drives each year. Between the three of them, the sites attract

workplace tours, a lecture on agrochemicals, and chemical experimenta total of about 100 donors for each drive. The blood drives haveworkshops. The day was a valuable opportunity for participants to see theirearned ISK letters of gratitude from the governor and from the local

family members at work, and the event was a great success. The organizers

branch of the Japanese Red Cross Society. In 2023, the Yokkaichi

were confident they especially conveyed the joys of chemistry to the children,

Plant received a Silver Achievement Award from the Society’s Mie

who enthusiastically engaged in the experiments. After having their families

Prefecture Branch, making the site one of just 5 corporations inwatch them at work, the employees are more motivated and more engaged

the prefecture to be recognized with the honor and highlighting thewith their work.

Experiments to experience chemical reactions

extent of its contribution. ISK will continue to hold blood drives aspart of its community service program.

33

Board of Directors and Executive Officers

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Term of office as Director
Number of shares held (as of March 31, 2023)
Attendance at Board of Directors meetings (from June 28, 2022 to June 27, 2023)
Attendance at Audit & Supervisory Board meetings (from June 28, 2022 to June 27, 2023)

Board of Directors (As of June 30, 2023)
Kenichi Tanaka

Hideo Takahashi

Executive Director,
Chairman

Executive Director
President & Chief Executive Officer
Chief Compliance Officer (CCO)

9 years
25,727
20/20 (100%)

Hiroshi Okubo
Director
Managing Executive Officer
Director of Corporate Administration &Planning Headquarters

4 years
14,627
20/20 (100%)

Kiyomitsu Yoshida

Yasunobu Kawazoe

Director, Senior Managing
Executive Officer, in charge ofOrganic Chemicals BusinessDirector
Managing Executive Officer
Director of Finance & Accounting
Headquarters

5 years years
10,963
20/20 (100%)

1 year7,900
19/20 (95%)

Masaki Shimojo
Director
Managing Executive Officer,
Director of Inorganic Chemicals Sales &Marketing R&D Strategy Headquarters
Assistant Director of R&D Strategy Headquarters

4 years
20,814
20/20 (100%)

3 years
8,014
20/20 (100%)

Tatsuo Hanazawa

Satoshi Ando

Akemi Uchida

Outside Director

Outside Director

Outside Director

4 years
3,300
20/20 (100%)

3 years
1,600
19/20 (95%)

New appointment-

Audit & Supervisory Board Members (As of June 30, 2023)
Yoshihito Akiyama

Yoichi Kobayashi

Norihisa Kusumi

Yasuhiro Koike

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

2 years
5,182
20/20 (100%)
12/12 (100%)

New appointment
10,600-

New appointment-

New appointment-

34

Board of Directors and Executive Officers

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Skills Matrix, Reasons for Appointment (at the 100th Ordinary General Meeting of Shareholders)Name
Position

Skills matrix
Business
Management foundation
foundation

VisionCorporate
Human
Financialmanagement, Environment, R&D,
Global Legal, risk
accounting
management society production business management resource
strategy
strategy

Reasons for appointment

Director
Kenichi Tanaka
Executive Director, Chairman✓✓

Hideo Takahashi
Executive Director
President & Chief Executive Officer
Chief Compliance Officer (CCO)

✓

✓

✓

Hiroshi Okubo
Director
Managing Executive Officer
Director of Corporate Administration &Planning Headquarters

✓

✓

✓

Kiyomitsu Yoshida
Director
Senior Managing Executive Officer
In charge of Organic Chemicals Business

✓

✓

✓

Yasunobu Kawazoe
Director
Managing Executive Officer
Director of Finance & Accounting Headquarters
Masaki Shimojo
Director
Managing Executive Officer, Director of Inorganic
Chemicals Sales & Marketing
R&D Strategy Headquarters
Assistant Director of R&D Strategy Headquarters

✓

✓

✓

✓

Tatsuo Hanazawa
Outside Director

✓

✓

✓

✓

✓

✓

Mr. Kawazoe has carried out important operational responsibilities and demonstrated appropriate decision-making and supervision in the areas of finance, accounting, and governance based on expertise in finance andaccounting that he accumulated over many years at financial institutions, along with his extensive experience and track record. He has also managed corporate communications activities. He was appointed with the
expectation that he would use this experience and expertise in the planning of business strategy and other policies, deliberations, and operational oversight by the Board of Directors.

Mr. Shimojo has worked primarily in sales, research, product development, and manufacturing in ISK’s inorganic chemicals segment. He has carried out important operational responsibilities and demonstrated appropriate
decision-making and supervision in the areas of R&D and domestic and international market expansion based on his extensive experience and track record. He was appointed with the expectation that he would use thisexperience and expertise in the planning of business strategy and other policies, deliberations, and operational oversight by the Board of Directors.

✓✓

Mr. Hanazawa offers appropriate advice and oversight, especially in the areas of domestic and international market expansion and the environment, based on his domestic and international experience, particularly inagricultural policy, and his experience in environmental matters. He also contributes actively as the chairperson of the Compensation Committee and as a member of the Personnel Committee and Evaluation Committee. He
was appointed with the expectation that he would fulfill his role as an outside director from an independent perspective.

✓✓

Mr. Ando draws on his highly specialized knowledge as an attorney and on his extensive experience and expertise in corporate law to offer appropriate advice and oversight of the company’s management from an objective
and legal perspective in the areas of law, risk management, finance, and accounting. He also contributes actively as a member of the company’s Compensation Committee, Personnel Committee, and Evaluation Committee. He
was appointed with the expectation that he would fulfill his role as an outside director from an independent perspective.

✓

✓

✓

✓

Mr. Okubo has worked in the production, environmental, and safety and health departments at our plant, as well as working in management at an affiliate. He is currently Director of Corporate Administration &Planning Headquarters, where he is in charge of furthering human rights due diligence and DX.
He was appointed with the expectation that he would use this experience and expertise in the planning of business strategy and other policies, deliberations, and operational oversight by the Board of Directors.
Mr. Yoshida has worked primarily in areas such as sales, R&D, and research institute operations in ISK’s organic chemicals segment. He has carried out important operational responsibilities and demonstrated
appropriate decision-making and supervision in the company’s management based on his extensive experience and track record. He has been head of ISK’s organic chemicals segment since June 2021. He wasappointed with the expectation that he would lead the planning of business strategy and other policies, deliberations, and oversight of operations in both bioscience and healthcare.

✓

Satoshi Ando
Outside Director
Akemi Uchida
Outside Director

Mr. Takahashi became Executive Director in June 2021 after working in research, product development, and sales and serving as plant director and director of the R&D Strategy Headquarters. Since his appointment, he has carried out important
operational responsibilities and demonstrated appropriate decision-making and supervision in the company’s management based on his extensive experience and track record.
He was appointed Executive Director with the expectation that he would be a driving force in the company’s management through his experience, track record, and leadership towards realizing the Vision 2030 long-term vision.

✓

✓

✓

Mr. Tanaka has exhibited strong leadership since becoming Executive Director in 2015. In addition to formulating medium-term business plans twice and Vision 2030, our long-term vision for 2030 which serves as
the basis for the current medium-term business plan, and managing the entire ISK Group in a precise and efficient manner, he has focused on increasing the effectiveness of the Board of Directors and overseeing
the company’s operations since becoming Executive Director Chairman in June 2021.
He was appointed because of his knowledge in the external environment in which the ISK Group operates and in corporate governance.

✓✓

Ms. Uchida has a wealth of experience in corporate administration and planning, human resources, risk management, finance, and administrative accounting, and has worked as a director of global companies developing, manufacturing,and selling in fields such as pressed car components and refrigeration devices. She was appointed with the expectation that she would support ISK’s management through an outside perspective of objectivity and impartiality.

✓

Mr. Akiyama has worked in administration and sales at ISK and has served as a director and Audit & Supervisory Board member at affiliates in Japan and overseas. He was appointed with the expectation that he would use
this experience and expertise in carrying out appropriate auditing and supervision of ISK’s business in an objective manner.

Audit & Supervisory Board Members
Yoshihito Akiyama
Audit & Supervisory Board Member✓

Yoichi Kobayashi
Audit & Supervisory Board Member
Norihisa Kusumi
Outside Audit & Supervisory Board Member
Yasuhiro Koike
Outside Audit & Supervisory Board Member

✓

✓

✓

✓

✓
✓
✓

Mr. Kobayashi’s experience includes working in organic chemicals and legal at ISK and acting as a director at an overseas affiliate. He was appointed with the expectation that he would use this experience and expertise incarrying out appropriate auditing and supervision of ISK’s business in an objective manner.

✓✓

Mr. Kusumi is well versed in corporate management, having amassed a wealth of knowledge in his many years, including as a director, at financial institutions. He was appointed with the expectation that he would audit ISK’s
business operations from an independent, fair standpoint.
Mr. Koike has amassed expertise and experience through his work as a lawyer, as well as significant knowledge about managing companies. He was appointed with the expectation that he would audit ISK’s business
operations from an independent, fair standpoint.

35

Interview with Newly Appointed Outside Officer

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Dataoccurring but at the expense of any dynamic freedom in conducting corporate activity. Of course, you need to create systems which willhead off potential scandals, but I feel that an important consideration is the sincerity with which problems are addressed when they dooccur. Getting this wrong will impact a company’s fortunes.
To ensure corporate longevity, I believe it is important to reduce these sorts of negative risks as much as possible and, when the occasion
arises during discussions among the Board of Directors meeting, I would like to respond to such risks by stopping whatever needs to be

Risk Management
and Diversity

stopped and promoting whatever needs to be promoted.
Diversity
I am ISK’s first female director, but that does not mean I think we should just go out and get a bunch of female employees for whateverreason. This is because I believe diversity means creating an environment where it is considered normal to have all sorts of different
people with all sorts of different characteristics, including young and old, men and women, LGBTQ, different nationalities, etc.
Why do we even focus on diversity in the first place? Because we want to grow our business, plain and simple. When we consider

Outside Director

Japanese steadily declining working population, and when we think about it from a global business perspective, does it seem like a good

Akemi Uchidaidea to employ only men, only Japanese? In order to expand our business around the world, is it not essential that we incorporate morediverse ways of thinking? I also feel it is important that we give attention to those who are underrepresented.
Nearly all of my corporate life has been a series of firsts as a minority member of a company: the first female manager, the first executiveor the first director who has transferred, etc. Because minorities are sometimes the only ones who are different and have different
opinions to everyone else, they must always be able to explain and persuade others of their view.

CareerNo doubt this is an experience commonly encountered by employees who are posted overseas. Views which are taken for granted in yourI have been involved with corporate planning and management strategy for a long time and, in the course of that, have not only worked

own country may be treated as incomprehensible by those around you while you are posted overseas. Hence, you will regularly need to

on strategy and numbers but also risk management and human resources strategy from a management perspective. In addition, I

explain and persuade others of your views. Personally, I have those sorts of experiences even within my own country. I have found thishave experience with corporate acquisition, both in Japan and overseas, building internal control systems, dealing with scandals andsort of minority experience to be useful when pursuing business globally, capitalizing on it in the course of operations following acquisition

conducting compliance activities. In particular, with regard to risk management, I have been involved with the creation, and subsequentof an American company.

operation, of systems and mechanisms which enable major risks to be addressed properly.

I feel that ISK already has a diversity-friendly foundation in place; so, I would like to focus first on increasing opportunities for meeting

The benefit of all this for me was that, at a young age, I was able to be involved in both offensive and defensive aspects of corporate

and dialoging with a variety of different people.

strategy creation and risk management at the same time, giving me a real sense of what management itself is like.
New Business
Risk Management

At the company I was with most recently, one of the things I was working on as a corporate officer was branding for IT-related equipment.

The most important part of risk management, I believe, is corporate culture.

We had a keyboard with advanced functionality aimed at specialists, namely programmers and researchers, and, although it was a niche

Although I have only just become an outside director for ISK, my first impression has been that, with regard to integrity, which is of utmost

brand, we were attempting to increase awareness among general users about the advantages of the keyboard’s functions.

importance in risk management, all of the directors at ISK, starting with Chairman Tanaka and President Takahashi, demonstrate great

I believe that pursuing new business is an important part of management. I also feel that there is something appealing about creating

integrity in how they handle matters. A substantial range of information is reported to the Board of Directors meeting, which both insidesomething new. Although the business which ISK is involved with differs from that which I was directly involved with previously, I am

and outside directors thoroughly discuss through a free and open exchange of opinions.

interested in digging deeper into problems in marketing. I am keen to put my B to C experience to use in whatever form.

When developing systems to prevent scandals, accidents and other such situations, an overly strict system will prevent problems from36

Interview with Newly Appointed Outside Officer

Building an Effective System
Without Having a False Sense of
Security

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Cultivating a Culture
Inconducive to Compliance
Violations

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Norihisa Kusumi

Yasuhiro Koike

I joined The Daiwa Bank, Limited (now Resona Bank, Limited) in 1987, and after 33 years of working for banks and three years

I have been involved in ISK compliance-related duties as an outside attorney since 2011, including serving as a member of ISK’s

working for a bank-related company, I came to ISK thanks to a connection I have with this company.

Compliance Committee and serving a contact person for the ISK legal hotline. The first time I heard the word “compliance” wasI worked at five group banks and holding companies and gained first-hand experience working as a branch manager at a variety

around 1998 while working in connection with a finance-related organization. My appreciation of how important compliance isof locations in Osaka. At the head office, I worked in various departments, including corporate governance, human resources andfor companies came later as I worked on a criminal case involving food fraud. A quarter of a century has passed since then, and,auditing.

although the meaning of “compliance” may continue to change, its importance only grows.

My impression of ISK as an outsider was that it was a historically trailblazing company. I felt that it was a company possessed of

Up until now I have only ever observed ISK as an outsider, and my impression was that the majority of ISK’s various department

great foresight and the strong determination to stick to its convictions. It was also evident that, following the unfortunate incident

heads and managers were extremely polite, professional, smart, and not pushy with their opinions (although there were, of course,of the past, the company was pulling together as one to restore people’s trust in it.

exceptions). However, since my appointment as an audit and supervisory board member, I have been a witness to the honest and

The company I come from, Resona Holdings, Inc., is a company which has experienced a management crisis.

uncompromising exchange of opinions which takes place during important company meetings, particularly meetings of the Board“Stop thinking that banks are somehow special. You are part of the service industry!” That was the harsh change of mindset whichof Directors and Executive Management Committee. At these meetings I get a real sense of a culture of openness. I would like forthe outside officers appointed to rebuild corporate management brought with them following our acceptance of public funding.

this culture of openness to be pervasive company-wide.

In terms of control system, we transitioned to being a company with a nominating committee. This was done to strengthen andReports of harassment, such as power harassment, made via the ISK legal hotline and other reporting avenues available toensure the thoroughness of our corporate governance. I cannot forget the tension of the Board of Directors, the majority of which

employees are rare compared with other companies; however, that does not mean that there is no power harassment at ISK.

was made up of outside directors.

Power harassment can be factor which leads to employees committing, or being unable to prevent, serious compliance violations,

While many companies in recent years actively pursue corporate governance as an “offensive measure” essential for sustainable

such as when an employee commits an illegal act because his or her superior has imposed an unreasonable quota, or when an

growth and not simply as a means of preventing scandals, the key to achieving this is focusing on the development of systems

employee knows of an illegal activity taking place but is unable to tell anyone about it. Power harassment is something which canwhich are effective without having a false sense of security. I believe this requires, first, “fostering a healthy awareness of crisis,”happen all around us and which is often linked with serious compliance violations.

second, a “shared awareness down to the smallest structural detail,” and, third, a “organizational culture of openness in which

It is from that perspective that I want, first, to eliminate power harassment at ISK in order to facilitate the cultivation of a corporate

people don’t overlook changes.”

culture which is inconducive to compliance violations.

I will do my utmost to use my experience for the benefit of ISK.

37

Corporate Governance

About ISK

Basic Policy

Value Creation Strategies

Foundation for Value Creation

Corporate Data

• Corporate Governance Structure

In addition to making contributions to social development, protection of life and environmental preservation, ISK strives constantly
to respect our shareholders, customers, suppliers, local communities and employees while maintaining transparency in business

General Shareholders’ Meeting

activities abiding by laws and regulations.
In order to enhance corporate value by maintaining steady business growth and securing profitability, efforts to improve business

Selec
tio
dismisn andsaltransparency, reliability and corporate health are among management’s most important concerns, and we have worked hard tostrengthen Corporate Governance through business management and enhanced internal controls founded on compliance.

Corporate Governance Structure
Structurally, we operate as a company with an Audit & Supervisory Board. In addition, we set Executive Management Committee

SuperAvuisdit &or y B

Cooperationo a rdg
Cooperation

progress in important activities and projects. We have also introduced Executive Officer system with the aim of speeding up
decision-making related to business activities.

Cooperation

Furthermore, we have the committees listed on the following page in order to strengthen our Corporate Governance.
The supervision and solving of important issues related to climate change, digital transformation (DX), and human capital are

ditor/
dent Anutants
n
e
p
e
d
In c Accou
Publig

Auditing

Auditinunder the Board of Directors in order to speed up decision-making by the Board of Directors and efficiently monitor and assess

Selection anddismissal

ati
Consult

Board of Directors

Executive
Management
Committeendtion aSelec issal
dism

Opinioon

Auditinns

ittee
tion Comm
Compensa
ittee
el Comm
Personncarried out on a company-wide basis by the Sustainability Promotion Committee, which is chaired by the Executive Director andPresident.

Executive Director and President

Sustainability Promotion Committee Activities

Office o

The committee convened three times in fiscal 2022 and has
met twice so far in fiscal 2023. The following matters have been
deliberated on in the past year.

al AuditInter
auditninalg• Identifying priority risks in human rights measures• Expansion of scope of coverage of TCFD
In addition to existing initiatives [climate change, humanrights due diligence, health and productivity management, ourIntegrated Report, and digital transformation (DX)], we havebegun pursuing human capital-based management.

f Intern

Sustainability Promotion Committee

Ope(Execurating divisi
otive Of
ficers,ns
etc.)

Internal controls

ittee
Comm
e
c
n
lia
e
Comp
Committe
agement
n
a
M
k
is
R
Corporate
ittee
Comm
n
o
i
t
a
E va l u
ittee
Comm
s
n
io
t
Rela
Publicmmitteeotion Co
m
o
r
P
y
it
bil
Sustaina
ttees
ommi
C
r
e
h
Ot
sions
ol divi tc.)
r
t
n
o
c
,e
al
Intern ive Officerst(ExecuAdvice andguidance

Corporate
Lawyers

38

Corporate Governance

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Major Organizational Entities Related to Corporate GovernanceFunctionsBoard ofDirectors

Audit &
Supervisory
Board

Chairperson

Executive Director and President

Members

Directors

Functions

The Executive Management Committee under the Board of Directors in order to speed up decision-making
by the Board of Directors and efficiently monitor and assess progress in important activities and projects.

Times convened

13 times

Composition

Chairperson

Executive Director and President

Members

The chairperson may require the attendance of such personnel as deemednecessary.

FunctionsAudits the Board of Directors’ execution of its responsibilities, for example by attending Board of Directors and other importantbodies and visiting departments regularly to exchange views in accordance with an audit plan adopted by the Audit &Supervisory Board, at least half of whose membership consists of independent Outside Audit & Supervisory Board members.

Times convened

12 times

Composition

Compliance
Committee

18 times

Times convened
Composition

Executive
Management
Committee

The Board of Directors meets at least once a month to make decisions concerning important matters,
report on the progress of operational execution and action plan implementation, review performance, anddiscuss and make decisions about how to deal with related issues.

Chairperson

Inside Audit & Supervisory Board member

Members

Inside Audit & Supervisory Board members, independent Outside Audit &Supervisory Board members

Functions

Develops compliance structures based on the corporate philosophy and promotes corporate management
predicated on compliance, for example by conducting compliance education and responding to the issues
that come from its whistleblowing system.

Times convened

2 times
Chairperson (CCO)

Composition

Members

Executive Director and President
Directors, Audit & Supervisory Board Members, Headquarters Directors, Outside
lawyer, ISK Labor Union chairperson

Functions

Corporate Risk
Management
Committee

Assesses and manages corporate risk incurred in the course of operations, formulates countermeasures,and deals with risks that have manifested themselves

Times convened

2 timesComposition

Chairperson

Executive Director and President

Members

Inside Directors, Headquarters Directors

1 times

Times convened

Evaluation
Committee
Composition

Chairperson

Independent Outside Audit & Supervisory Board member

Members

Independent Outside Directors, Inside Audit & Supervisory Board members,
Independent Outside Audit & Supervisory Board members

Note: Five of seven positions on the committee (71%) are filled by independent Directors and Audit & Supervisory Board members.

Compensation
Committee

Functions

Offers views in response to requests for advice from the President, who is delegated by the Board of
Directors about concerning the remuneration of directors and executive officers.

Times convened

2 timesComposition

Chairperson

Independent Outside Director

Members

Independent Outside Directors, Independent Outside Audit & Supervisory Board
members

Note: All five positions on the committee (100%) are filled by independent officers.

Personnel
Committee

Functions

Responds to inquiries from the President, who is delegated by the Board of Directors about the appointmentof CEO’s successor and candidates for new Director or Audit & Supervisory Board member positions, asadvising the Board of Directors

Times convened

5 timesComposition

Chairperson

Independent Outside Director

Members

Independent Outside Directors, Independent Outside Audit & Supervisory Board
members

Note: All five positions on the committee (100%) are filled by independent Directors and Audit & Supervisory Board members.

Public Relations
Committee

FunctionsComposition

Directors of major subsidiaries
Functions

Analyzes and evaluates the overall effectiveness of the Board of Directors

Sustainability
Promotion
Committee

Ensures transparency by disclosing information to investors in a timely manner, ensures the timely
disclosure of information from Yokkaichi Plant to the local community, and promotes communication
between our stakeholders and the company
Chairperson

Executive Director and President

Members

Directors, Representatives of Branches, Headquarters Directors, and others

Functions

Undertakes initiatives to address climate change, human rights, diversity and inclusion, health andproductivity management, and DX

Times convened

3 timesComposition

Chairperson

Executive Director and President

Members

Inside Directors, Headquarters Directors, and others

39Corporate Governance

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Board of Directors Effectiveness Analysis, Evaluation, and Results
In view of the responsibilities for Boards of Directors stipulated in the Corporate Governance Code, and in order to improve theAwareness of Issues

functioning of the Board of Directors, an Evaluation Committee comprised of Outside Directors and Audit & Supervisory Board

Based on the promise we made to stakeholders in our Integrated Report, we have formulated a strategy to create value in the ISK

members has been established under ISK Board of Directors and in line with Board of Director evaluation-related rules. Every year

Group. To achieve the foundation for this, we are aware that we must continue to raise the viability of the entire Board of Directors.

since fiscal 2016, this committee has analyzed and evaluated the overall effectiveness of the Board of Directors and provided theTo this end, we must focus on issues where there has been low achievement for the past seven years: by strengthening theBoard with its results for deliberation and approval, after which an outline of those results is released publicly. In fiscal 2022, as

practical functions of the internal audit departments, and by strengthening collaboration between internal audit departments andwell, an evaluation of the Board of Directors’ overall effectiveness was carried out in accordance with this policy.

Directors and Audit & Supervisory Board members. The Board of Directors is looking earnestly at these issues and will continue
to ensure that higher evaluation of viability will lead to sustainable growth for the company and increase our medium- and long-

Method of Evaluation

term corporate value.

In fiscal 2022, the number of questions on the evaluation was changed to 38 from 39 in fiscal 2021. Regarding this change, thenumber of issues to deal with in fiscal 2022 decreased, and for one issue each question was divided into three items, with the

Future Initiatives

other 30 items being the same as the questions in fiscal 2021.

Based on the analysis and evaluation results of the overall Board of Directors effectiveness, the Board of Directors has identified

Again this year, we invited participants to freely offer their opinions of the Board of Directors’ overall effectiveness as part of theself-evaluation, and we increased the size of the space for participant comments to better solicit views from directors and Audit& Supervisory Board members.
The Evaluation Committee gave this questionnaire to all Directors and Audit & Supervisory Board members. The responses wereanalyzed and evaluated, after which all 9 Directors were interviewed. Based on the evaluation results report from Evaluation
Committee, our Board of Directors made a determination on the evaluation of the overall effectiveness of the Board of Directors
for fiscal 2022.
Analysis and Evaluation Results of Overall Board of Directors Effectiveness1. Areas, participants’ evaluations and factors(1) Comparing the fiscal 2021 and 2022 assessments of the areas, except for one area (composition of Board of Directors), fiscal
2022 achievement was higher in all seven areas. Of these, achievement level exceeded 90.0% in three areas.
(2) Average overall achievement for participants increased from 76.9% (90-99% for three participants, 80-89% for three, 7079% for two, and 60-69% for five) in fiscal 2021 to 84.4% (90-99% for four participants, 80-89% for six, and 70-79% forthree) in fiscal 2022. Analysis shows that the reason for this increase is that ISK pursued improvement and reform against abackground of higher expectations for boards of directors of companies; for example, satisfying the principles required by thePrime Market (both principles and supplementary principles), and management in line with the SDGs and ESG.
2. Ensuring the Board of Directors’ Overall Effectivenessthe following six priority initiatives for fiscal 2023, which it is proactively pursuing in order to achieve substantial improvement in
its overall effectiveness.
(1) An issue dealt with last year was how the Board of Directors and Executive Management Committee operate in terms of theirpositioning and roles. The Executive Management Committee is where important matters are first deliberated on, and here
directors and Audit & Supervisory Board members put forth opinions upon. This results submitted to the Board of Directors as
the final bill, then the Board of Directors discuss. At the Board of Directors, the Executive Management Committee members
explain their main points, point out effects on business performance and risks that have manifested themselves, make rational
decisions towards formulating a bill, and strive for prompt, effective decision-making. Meetings are also held with Outside
Directors in order to provide them with the comprehensive information they require on important matters.
(2) The ISK Group’s corporate purpose is “To continue contributing to better living environments through chemical technologies.”
This purpose is the starting point for our core competence of chemical technologies, around which we have our three strengths:
the ability to develop proprietary technologies; the ability to accommodate quality and environmental requirements; and theability to collaborate globally. These are supported by our management capabilities, which we leverage to expand our business.
To continue growing, we believe it is crucial to make maximum use of our ability to develop proprietary technologies tofoster new businesses and strengthen our management foundation. The Business Creation Committee, a cross-organizational
committee chaired by the President, studies matters intensively on a short-term basis. However, we will further speed up
processes towards the start of new businesses and new products by engaging in free and vigorous discussion.

While the goal is to ensure overall Board of Directors effectiveness, the results differed significantly for inside directors (90.0%)
and Evaluation Committee members (80.3%). This worked out to an overall average of 84.8%, almost the same as the averagefor participants of 84.4%. This indicates that the Board of Directors’ overall effectiveness is being assured.

40

Corporate Governance

About ISK

(3) We will work to substantively strengthen the functions of our internal audit departments and to ensure collaboration between

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Policy on Cross-Shareholdings

directors and members of the audit and supervisory board. We will also actively use the results of internal audits and other

ISK maintains an amount of cross-shareholdings deemed to build a smooth, stable, and ongoing relationship with business

investigations to inform advice and action so that directors can contribute not only in their own area of responsibility, but also topartners, in line with our business strategy. The status of cross-shareholdings is disclosed in our securities report. Other

management as a whole.

shareholdings have been appropriately reduced.

(4) To ensure active oversight of group companies’ operations, we will require regular reporting on risks and issues while working toensure sufficient oversight of directors’ performance of their responsibilities and contributions to overall management.
(5) In addition to pursuing their own studies, for example to acquire necessary knowledge so that they can fulfill their own roles andresponsibilities, directors must provide sufficient oversight of their peers’ performance of their responsibilities.
(6) We will address issues related to sustainability, ensuring that the state of their progress and matters requiring discussion are

Independence Criteria for Outside Directors
Independence criteria have been established for Outside Directors and Audit & Supervisory Board members. These appear on
the ISK website.

deliberated by the Sustainability Promotion Committee, communicated clearly to outside directors and members of the audit andsupervisory board, and included in the form of general information in the Integrated Report.

About ISK: Corporate Governancehttps://www.iskweb.co.jp/eng/company/governance.html• Evaluation Results of the Effectiveness of the Board of Directors (fiscal 2022)
FY2021

VIII. Ensuring the Board of
Directors’ Overall
Effectiveness

79.1%
84.8%
VII. Progress made on
issues from previous
year that required
improvement

82.1%
I. Composition ofBoard of Directors 82.1%
95.0%
90.0%
85.0%
80.0%
75.0%
70.0%
65.0%
60.0%
55.0%
50.0%

FY2022We are continually working to expand and improve our Group internal control systems in order to ensure the appropriateness of
subsidiary governance as well as the maintenance of compliance systems. For details, please refer to ISK Corporate Governance

II. Management by
Board of Directors

90.6%
94.0%

Report.

83.2%
91.2%

Corporate Governance Report (in Japanese)

III. Agenda of Board of
Directors

https://www.iskweb.co.jp/company/pdf/corporate_governance.pdf?

72.7%
80.5%

67.0%
75.8%

VI. Minutes of Board of
Directors’ meetings

Basic Policy for the Internal Control System

IV. System supporting 76.9%
Board of Directors 85.6%
V. Self-evaluation of 80.8%
each director
90.8%

41

Corporate Governance

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Remuneration of Directors
Policies for Determining Amount and Calculation of Each Director’s Compensation

Policies for Determining the Timing and Conditions of Remuneration andCompensation for ISK directors is stipulated in the Officer Compensation Regulations adopted by the Board of Directors andOther Compensation for Directors

comprises base remuneration, which is based on job position, and performance-based remuneration. Base remuneration is paid

The Officer Compensation Regulations adopted by the Board of Directors stipulate that base remuneration is calculated on aaccording to the Officer Compensation Regulations to directors and executive officers according to their role and position. Outsidemonthly basis and paid on the same day as employees’ monthly salaries, while performance-based remuneration and otherdirectors are paid only base remuneration due to their independent position in executing duties.

compensation is paid on the same day as employees’ summer bonus.

Policies for Determining the Nature of Performance Indicators and for Calculating the Amounts and• Remuneration of Directors in Fiscal 2022

Quantities of Performance-Based Remuneration and Other Compensation
The performance-based portion of directors’ remuneration (excluding Outside Directors) consists of annual performance-based

Director category

remuneration and long-term performance-based remuneration, which are structured to ensure both objectivity and a connection
with corporate performance in line with the Officer Compensation Regulations approved by the Board of Directors. Annual
performance-based remuneration is calculated based on a comprehensive consideration of the company’s performance, forexample in the form of net income attributable to owners of parent, which is the final result of corporate activities, together withindividual performance evaluation.
Policies for Determining Non-Monetary Remuneration and for Calculating Associated Amounts andQuantities
The non-monetary portion of directors’ remuneration (excluding Outside Directors) consists of transfer-restricted shares, and thetotal amount of monetary claims necessary to grant those shares to directors (excluding Outside Directors) may not exceed ¥90

Total remuneration by type (Million yen)
Total
PerformanceTransferremuneration
Base
based
restricted share(Million yen) remuneration
remuneration compensation

Applicable
Directors(Persons)

Directors(excluding Outside Directors)

237

179

51

6

7

Audit & Supervisory Board Members(excluding Outside Audit &Supervisory Board Members)

36

36

ー

ー

2

Outside Directors

55

55

ー

ー

5

Total

329

271

51

6

14

million per year (excluding the employee portion for officers who also serve as employees). In addition, the total number of normal
shares newly issued or disposed by the company may not exceed 95,000 per year. (However, if it becomes necessary to adjust
the total number of normal shares that are issued or disposed of as transfer-restricted shares, for example due to a stock split orreverse split involving normal shares, including any gratis allocations, the total number may be adjusted within reason.) The Boardof Directors is responsible for determining the specific timing and distribution of such awards to directors.
Relative Proportions of Remuneration and Other Compensation for Individual Directors
The relative proportions of base remuneration and performance-based remuneration and other compensation is determined by
the Board of Directors after consultation with the Executive Director and Chairman, taking into account advice sought from theCompensation Committee by the Executive Director and President, to whom the Board delegates the task of considering eachyear’s performance and other factors.

42

Risk Management

About ISK

Basic Policy

Value Creation Strategies

Foundation for Value Creation

Corporate Data

High Priority Risk

We in the ISK Group pursue risk management with the aim of preparing for various risks that could seriously impact the smooth
operation of our business, and in the event of an emergency, appropriately and swiftly addressing it in order not to harm thehealth, safety, or interests of stakeholders, restoring our business operations as soon as possible, protecting our corporate
resources, and minimizing the damage to our business.

Risk Management System
We have “risk management regulations” governing our basic policy on risk management and risk management system. We have

Major Risk

Explanation of Risk

Major Measures

Delay in, or failure
to achieve, productapproval orregistration(agrochemicals andanimal healthproducts)[Agrochemicals]
Risk of postponement, or abandonment, of launch of new
agrochemicals due to stricter agrochemical-related regulations• Take proper approach to countries’ registration agencies andauthorities• Assess other companies’ agrochemicals registration and survey
their registration status• Secure personnel with expertise in highly specialized fields,
ensure handover of registration know-how[Animal health products]
Although PANOQUELL™-CA1 has received conditional
approval from the FDA in the U.S., there is a risk that final
approval will be denied or postponed in the U.S., or thatapproval will be denied or postponed in Europe• Use consultants and other means to gather information on
trends related to the rules and approval of the regulatory
authorities• Team up with contract manufacturers or sales partners

Earthquake,tsunamiRisk of damage to facilities and products, suspension of
production and business operations, and human casualties if
the plant should suffer serious damage due to tsunami,liquefaction, or other factors resulting from a large-scale
earthquake• Provide aging facilities with seismic reinforcement• Step up product storage at multiple bases(at elevated locations,etc.)• Update business continuity plans• Get business interruption insurance to cover business
continuity expenses as a response after earthquake• Sign committed line of credit with financial institutions, which isapplied to earthquake disasters

Difficulty procuring
material, problem at
supplier

Risk of supply shortage for specific raw materials due tooperational accidents, political instability, or stricter
environmental regulations in producing regions or countries.
In the case of overseas toll manufacturers, risk of limitations
on procurement due to stricter regulations in the country or
their operational accidents• Purchase from various suppliers in multiple countries• Closely coordinate with subcontractors and suppliers• Perform rapid planning adjustment and proper inventory control• Expand the range of usable raw materials

Poor governance atgroup company

Risk of accounting fraud, bribery, or quality fraud because oflack of thorough control over overseas group companies• Organize and clearly stipulate the functions and roles of ThreeLines model (business divisions, back-office divisions, internal
audit division)• Make rules for group companies• Refine and publicize internal rules, strengthen internal auditing

Worker shortage,
non-transfer ofskills andtechniques

Risk of not securing human resources, or skills and techniques
not being passed from the experienced to younger employees,
due to fewer young people, an aging population, change in the
supply–demand balance of the labor market, and increased job
mobility• Hire employees through diverse channels• Compile know-how• Train human resources, and study ways to make work environment
more pleasant and expand employee support systems so as toretain employees

also established the Corporate Risk Management Committee, aimed at appropriately managing and preparing for various risks
surrounding our business. The Corporate Risk Management Committee is held twice a year, or whenever necessary, summarizing
risk assessments, selecting major risks with high priority, discussing plans for risk countermeasures, and confirming progress on
those countermeasures.
The Sustainability Promotion Committee’s jurisdiction includes priority issues (Materiality), climate change risk, and human rights
risk, for which it advances their measures in coordination with the Corporate Risk Management Committee.

Board of Directors
Report matters discussed to Board of Directors

Corporate Risk Management
Committee

Chaired by the President,
comprising Directors of each Headquarters

GM of each division

Comprising GM and presidents of subsidiaries

Risk Management Process
Plan

Do

Check

Act

Monitor progress on
implementation ofcountermeasures

Summary andimprovement plan

Implement risk countermeasures
Identify risks from a company-wide perspective
Assess risk impact and probability
Select major risks to address
Formulate countermeasure plans against risk
Allocate risks to each person/division in charge
Decide on risk countermeasure policies
Decide on action plan for countermeasures

Implement risk
countermeasures

Review progress on
implementation

Report to management
Consideration on
countermeasure plans

43Risk Management

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Risk Map
Large

Risks related to major operations such as procurement, manufacturing, etc.
Risks related to functional continuity such as general affairs, HR, etc.
External environment risks
Risks in management strategy
Environmenta risks
such as leakage ofhazardous material

Earthquake,tsunami★

Advent ofinnovativetechnology

Fire, explosion★ ISK Group’s high priority risks

Dependence on
specificcustomer

Lawsuit,
Reversal of
Violation of law
contract(Anti-Monopoly Act)
deferred tax asset
deficiency trouble

Incorrect selection Difficulty
procuring material,of development
material
problem at supplier★
Inadequate
ESG response
Economic
downturn

Impact on
business
Failure of
IP strategy

Cancellation or
erasure of permits,
licenses, or registrations

Abnormal weather(agrochemical sales)

Crop injury by
agrochemical
products

Aging and breakdown of Delay in, or failure
Revised andequipment andto achieve, productstricter laws
machinery
approval or registration★ and regulations

Financial risk(exchange rate, etc.)

Skyrocketingraw material
prices

Stricter environmental
Poor governanceregulations due toat group company★
climate change

Skyrocketing
fuel prices

New entries andintensifying
competition

Change in thecustomer/supplier’s
environment

Quality defect,
recallProblems withcustomers or
suppliers

Breach of confidentiality
by employees
who transfer or quit

Delay in, or stoppage of,product ortechnology development

Technology
drain

Inadequate ESG
responseby supplier

Corruption suchas datafalsification

Mass infection,diseaseSoilcontamination

Customer bankruptcy
and bad debt

Internationaltax risk

Natural disaster(except for earthquake
and tsunami)

Missing tax filing,misrecognition of
tax law

Stranded assets

Cyberattack

Worker shortage,
International
Failure of new
conflict/dispute, terrorism, non-transfer ofbusiness, capitalskyrocketing tariffs
skills and techniques★ investment, M&A

Workplace
accident

Human rights issue(sexual harassment, workplace
power harassment)

Probability of occurrence

Large

Notes:
1: Regarding level of effect on business and probability of occurrence, we set risk scenarios and assess each risk impact or damage in order for assessors to have a common understanding. The risk scenario used here is a worst-case scenario, i.e. the biggest threat among the possibilities.
2: ISK defines risk as any possibility of physical or economic damage to ISK, loss of trust, or others causing disadvantages.

44Compliance

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Basic Philosophy

Fiscal 2022 Compliance-Related Training and Awareness-Raising at ISKISK Group places the utmost importance on compliance. We have formulated a code of conduct in order to carry out business

ISK Group carries out compliance-related training in accordance with an annual plan, which is discussed and approved by therooted in our corporate philosophy, with the aim of thoroughly complying with laws and regulations, conducting fair and equitable

Compliance Committee. Besides job grade-specific training, training on specific topics is planned and carried out according tobusiness practices, and maintaining a high level of corporate ethics.

social conditions. Many ISK Group members joined training.

Because a company cannot exist without society’s trust, we have launched a Compliance Committee towards fulfilling our corporate responsibility and contributing to society. The committee puts compliance front and center and ensures that we promptly

Online learning and e-learning for new employees and other employees

report any compliance violations.

Focus: General compliance-related basic training

ISK Group Code of Conduct

ISK: 60 employees, Affiliates: 13 employees Total: 73

https://www.iskweb.co.jp/eng/compliance/observance.html

Advanced compliance training for newly appointed assistant managers

Compliance Promotion System (Overview)
Based on our reflection on the Ferosilt problem, in November 2005 we appointed a Chief Compliance Officer (CCO) and established the Compliance Committee. This committee operates under the Board of Directors and is chaired by the President (as CCO),
and comprises directors (excluding outside directors), directors of each headquarters, audit and supervisory board members,
affiliate presidents, a labor union representative, an outside lawyer, and the secretariat. In addition, each division has a compliance

Focus: Development of human resources who facilitate compliance-based management
ISK: 8 employees, Affiliates: 1 employees Total: 9Group training for newly appointed managers
Focus: Acquisition of compliance knowledge required by managers
ISK: 11 newly appointed managers

promotion manager and a compliance leader. The Compliance Committee has met about twice a year. It currently meets every

E-learning on personal information protection laws for ISK Group managers

March and September, with March 2023 marking the 34th session.

Focus: Understand what personal information is and learn what rules company employees should abide byHighlights from recent years include the following.
• Discussion and revision of the ISK Group Code of Conduct• Discussion of and response to whistleblowing and requests for consultation in relation to compliance violations• Preparation and monitoring of compliance training plans• Report on and discussion of compliance activities in each division• Training for board members, held every second year, led by outside instructors• Establishment of Whistleblowing Rules
Rules state that any person acting unjustly towards a whistleblower will be subject to disciplinary action.
As for the number of cases of whistleblowing or consultation related to compliance in recent years, there were two in fiscal
2018, four in fiscal 2019, four in fiscal 2020, two in fiscal 2021, and eight in fiscal 2022.

ISK: 364 ISK Group managers
Workplace-specific specialized law seminars• These seminars give participants knowledge on laws covering their particular division with the goal of strengthening adherence to laws, the basis of compliance.
• Managers select specialized laws that relate to their division and about twice a year lead seminars in their division.
• Workplace members take turns being the instructor in sessions in which they explain specialized laws, thus raising workplaceknowledge from the bottom up.
Compliance library training program• Employees watch videos about compliance issues that they face every day at work. Videos format examples include 3-minutedramatizations and instructional videos made in-house.
• Instructors in the program are senior position managers in each workplace in turn.

Video on ISK’s History of Compliance Activities• In fiscal 2022, a cumulative total of 819 sessions were held, including the specialized law seminars and library training, withIn order to keep past instances of compliance violations in mind, a video called “ISK Group Compliance History” was createda cumulative total of 10,483 participants.

and has been viewed by all constituents. The video shows what ISK has been doing to regain the public’s trust and conveys theimportance of being in compliance.

45

Special FeatureCompliance

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Road to Rebuilding Trust as the New Ishihara Sangyo

Working to Regain Lost Trust

It has been fifteen years since the comprehensive compliance audit conducted in March 2008. We have learned much fromIn the wake of the Ferosilt problem, we have worked to improve our corporate structure, company operations and internal culture forreflecting on our response to the series of environmental scandals which began with the Ferosilt problem. As we head towards

the primary purpose of revising our compliance system and building an organizational structure possessing a culture of openness.

Vision 2030 Stage II, we will examine what ISK’s approach will be and what efforts have been made thus far.

(1) Active disclosure of information
With the aim of greater plant transparency, we provide tours of the Yokkaichi Plant to local residents. Also, we have established

The Ferosilt Problem and the Comprehensive Compliance Audit

voluntary emission standards which are stricter than legal and regulatory standards for wastewater, waste gas, wastes and various

Ferosilt, a soil backfilling material developed as means for reducing industrial waste, had been on the market since 2001.

other environmental impact substances, and, in addition to displaying actual values in real-time on an environmental information bulletin

However, when amounts of hexavalent chromium and other substances exceeding environmental standards were detected inboard in front of the Yokkaichi Plant’s main gate, we disclose environmental data on our homepage and elsewhere (in Japanese).

areas where Ferosilt was used, we did our utmost to carry out a voluntary recall of the product. The amount of Ferosilt sold was
720,000 tons in total, but, because it was mixed in with sand and soil at the backfilling sites, the amount of material collected
was more than twice that, approximately 1,880,000 tons. All Ferosilt was collected at a total cost of around 60 billion yen. Finaldisposal of the material was completed in 2015, ten years after collection began.
In 2008, the ISK Group conducted a comprehensive compliance audit based on a questionnaire survey of all Group members.
From the results, we identified seven cases of past misconduct that had a significant external impact, and, after disclosing these,
undertook corrective action and improvement.

(2) Establishment of an Environmental Expert Committee
In 2008, we established an Environmental Expert Committee, chaired by anoutside expert, in response to the identification of contaminated soil andunderground water at the Yokkaichi Plant site. In line with the Committee’s
guidance, we implemented various measures, including ascertaining the statusof contamination on the plant premises, installing barrier wells and pumping
up underground water. We have confirmed that the installation of barrier wells

Completion of Removal of Illegally Buried Waste at the Yokkaichi Plant
In 2017, we began removing to a disposal site waste which was illegally buried at the Yokkaichi Plant (two locations on that grounds

prevents contaminated underground water from spreading beyond the premises via the underground water vein. Also, in 2022, webegan enclosing high-concentration pollution sources with purification agents (hot spot measures) and are monitoring progress.

of the northeastern part of the plant and the plant site embankments) and discovered through a comprehensive compliance audit.

Environmental Expert Committee website (in Japanese)

Under normal circumstance, this illegally buried waste should have been removed immediately, but, given the complications

https://www.iskweb.co.jp/kankyou/

surrounding the Ferosilt problem situation, it took a long time until all the waste was removed.
In March 2022, all removal work was completed, a Completion Report for the Removal of Waste Buried at the Yokkaichi Plant was
submitted to Mie Prefecture, and land leveling work in the area was also completed.

Inspection of barrier wells by the Environmental Expert Committee(3) Conducting compliance education
To ensure that the lessons of past problems are not forgotten, we conduct compliance education aimed at ISK Group members.
In recent years, we have conducted job grade-specific training, online learning, and group training for newly appointed managers.
Also, with regard to health and safety, process safety and disaster prevention, environmental protection, and other topics, weregularly conduct training which is run by outside and in-house instructors.
Tackling the Challenges of a New StageIn fiscal 2019, after a difficult road of addressing scandals and rebuilding trust from society, ISK issued dividends for the first timein fourteen years. After a “defensive” period during which we worked hard to return our company to a state of normalcy, we are

2018
Removal work is underway

2023
Land leveling work is completed

now on the “offensive,” pursuing future-focused business development. All ISK Group members are actively engaged in business,having their eyes set on Vision 2030, and with the absolute imperativeness of our corporate philosophy to “abide by laws andregulations; maintain transparency in business activities” etched in our minds.

46Responsible Care Activities

About ISK

ISK’s Responsible Care
Stakeholders

and safety assurance. In particular, ourEnvironmental
protection

activities encompass chemical productand distribution safety specific to theprevention, and occupational health andCorporate Data

Companies that handle chemicals voluntarily undertake Responsible Care activities to provide

activities aimed at environmental, health,tal protection, process safety and disasterFoundation for Value Creation

What is Responsible Care?

ISK undertakes Responsible Care (RC)chemical industry, as well as environmen-

Value Creation Strategies

Chemicals/
product
safetysafety, along with dialog with society,

Safety anddisasterprevention

Management
Occupational
systemhealth andsafetyLocal residents
Customers
Dialogwithsociety

Distribution
safetyenvironmental, health, and safety assurance covering everything from chemical substance development
to production, distribution, usage, final consumption, disposal, and recycling.
The results of these activities are shared and discussed with stakeholders. Responsible Care originated in
Canada in 1985 and has subsequently spread to companies around the world.

Government
Institutional investors
Shareholders

Responsible Care Achievements in Fiscal 2022 (Summary)

Executive
Employees, others

Category

Achievements

Evaluation

Planned emission reduction of
PRTR-listed materials

The volume of emissions into the air andtransferred off-site was reduced, but thevolume of discharge into public water areas
increased.

−

Reduce energy intensity and electricity demand leveling assessment
intensity by 1% year-on-year

Energy intensity increased by 4.7% year-onyears, thus failing to achieve 1% reduction
target.

−Reduce, reuse, and recycle waste

Continued reducing industrial waste by reusing and recycling materials with recoverable
value.

✓

Process safety anddisaster prevention

Eliminate plant accidents(fire, explosion, leakage)

There were no plant accidents.

✓

Occupational healthand safety

Achieve “zero lost time accidents” ateach ISK site

There was one lost-time accident at the
Yokkaichi Plant.

−

Distribution safety

Implement emergency response card
(so-called Yellow Card),
GHS label, and SDS management

Yellow Cards, GHS labelling, and SDSs wereappropriately implemented.

✓

Chemicals/
product safety

Properly manage chemical substances and provide customers with SDSs

We appropriately notified the authorities
on the use of chemical substances andprovided SDSs.

✓

Dialog with
community

Provide information to community
Interact more with local communities

More two-way communication was carriedout with local citizens.

✓common to many different industries.

ISK Makes Presentation on Safe Handling of Chemicals
at 8th Responsible Care Yokkaichi Forum

Fiscal 2022

Environmental
protection

The Japan Chemical Industry Association (JCIA), of which ISK is a member, carries out responsible care activities
including the holding of discussion forums with local residents in areas where there are chemical plants. After the

Objectives

COVID-19 pandemic forced the temporary stoppage of these gatherings, on October 28, 2022 the JCIA was able tohold the 8th Responsible Care Yokkaichi Forum, the first such meeting in four years.
The approximately 100 attendees included local
residents and participant from local governmentand companies at the venue, with other such representatives taking part online. ISK was one of thecompanies making a presentation, on the topic ofefforts to ensure the safe handling of chemical
substances. With Yoshihito Takeda, a professorat Hokkaido University as the moderator, a question-and-answer session and discussion were
held between corporate representatives and local
residents.

ISK makes a presentation at the forum

47

Environment

About ISK

Dealing with Climate Change

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Strategy
Chosen Climate Change Scenarios

ISK Group has pursued and strengthened sustainable management initiatives from the perspective of SDGs for medium-term

Referencing climate change scenarios published by the IEA (International Energy Agency) and IPCC (Intergovernmental Panel onbusiness plan, Vision 2030 Stage I. In view of emergency and importance, ISK Group is making efforts toward the “Dealing

Climate Change), we selected scenarios of a rise of 1.5–2°C and 4.0°C. Recognizing that climate change’s impact on businesswith climate change, reducing environmental impacts” as an identified priority issues (Materiality). ISK Group strives to analyze,

becomes more evident in the medium- and long-term, we analyzed the impact of climate change until 2050, as the time horizon.

examine, and disclose the information related to the climate change issues under the TCFD recommendations, and in carrying

Analysis of the scenario for fiscal 2023, we extends to the organic chemicals business. All businesses of the ISK Group (inorganicout business activities, ISK Group will contribute to address environmental and social issues to realize a sustainable society andchemicals/organic chemicals) were analyzed under the scenarios.

improve its corporate value.
Sustainability*Referenced climate change scenarios• 1.5–2°C scenario: Scenario with sustainable development and climate policy to keep temperature rise under 2°C compared to pre-industrial levels but
to also aim to keep it to 1.5°C or less (IEA NZE 2050, IEA SDS, SSP1-2.6, RCP2.6)• 4°C scenario:
Maximum emissions scenario with no climate policy and development dependent on fossil fuels(IEA STEPS, SSP2-4.5, RCP8.5)

Dealing with climate change

https://www.iskweb.co.jp/eng/environment/climate.html

Scenario Analysis Process

GovernanceConcrete efforts in response to climate change are carriedout by our Climate Change Team. This team operates under
the Sustainability Promotion Committee, which reports directly to the President.
The team comprises people from factory management,
manufacturing divisions, administrative department, and ISK

Board of Directors
Discuss, report

Decide, supervise

Identify major risks andopportunities

Gather future forecast data

• Gather highly reliable, external future forecast data related to major risks and opportunities.
• Organize the future forecast data for each scenario and, along with relevant personnel at ISK,
examine possible future world outlooks.

Calculate impact on business• Using the collected future forecast data and in-house data, quantitatively assess what possible
impacts the highly important risks and opportunities will have on business for each scenario.

Executive Director President

affiliates.

• Gather information on risks and opportunities in the chemical industry.
• Identify climate change risks and opportunities for ISK, and narrow down the major potential risks
and opportunities that could have a large impact on our business.

The efforts and measures the team comes up with are deliberated on at Sustainability Promotion Committee meetings

Sustainability Promotion Committee

held at least twice a year, and those approved are consulted

Consider responses• Consider ways to deal with climate change risks and opportunities that have a particularly
large impact on business.
• Consider other efforts and ways to implement them when necessary.

on and passed by the Board of Directors.
The progress of activities by the Sustainability Promotion
Committee, including the Climate Change Team, is reported

Climate Change Teamevery three months to the Board of Directors, which supervises these activities.

48

Environment

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Risk Management

Scenario Analysis Results
The ISK Group used external information to analyze the main climate change risks and opportunities in our business, and gathered future forecast data related to

One of the eight priority issues (materiality) that the ISK Group has identified is “dealing witheach risk and opportunity.

climate change and reducing environmental impacts.”

Based on this, we considered the risks and opportunities that arise from the transition to the carbon neutral society under each of the 1.5–2°C and 4°C scenario. We

In recognition of the urgency of climate change, the ISK Group has established the Climate

then analyzed the major risks and opportunities that could impact our business up until 2050.

Change Team under the Sustainability Promotion Committee. This team identified climate

As a result, for the 1.5–2°C scenario, we identified risks such as greatly increased operating costs due to the imposition of a carbon tax on CO2 emissions.

change risks, the results of which are assessed and controlled by the Sustainability Promotion

Therefore, recognizing the importance of reducing CO2 emissions across the entire ISK Group, we will proceed with various planned measures towards achieving

Committee. When necessary, matters are reported to the Corporate Risk Management

carbon neutrality by 2050.

Committee.

Business Risks and Opportunities Identified through Risk Level Assessment and Scenario Analysis

Major Risks and Opportunities

Policies/ Introduction of carbon tax,
regulations stricter CO2 emission regulations

Coveredbusiness

Time horizon: Short term: 2025, medium term: 2030, long term: 2050

Explanation

Increased operating costs due to the imposition of a carbon tax on
Inorganic chemicals
CO2 emissions
Organic chemicals(For 1.5°C: Cost increase of approx. 17.2 billion yen in 2050*)

TimehorizonChronic

Financial
impact(2050)

Medium–long–

Responses aimed at reducing risks and seizing opportunities• Shift boiler fuel away from coal
• Rebuild manufacturing systems• Implement carbon capture and use renewable energy• Expand sales of electronic components (semiconductors etc.), materials (IPM products), and others that
reduce environmental impact• Create new technologies and products (Organic: Develop IPM products with a view to smart agricultureusing AI and IoT, etc.)• Utilize subsidies and subsidy systems for capital investment and product development• Increase yields and reduce waste• Reduce CO2 in procurement through cooperation with suppliers and the industry• Diversify the energy sources• Pursue thorough energy savings• Proactively strive to reduce environmental impact• Pursue thorough information disclosure

Short

Rise in severity of extreme weather
Inorganic chemicals
events such as typhoons and floods
Rise in insurance costs due to higher risks of disaster striking bases
Organic chemicals• Expand and improve BCPs, conduct drills• Increase the number of suppliers• Consider a backup manufacturing system

Short• Revise terms of insurance contracts

Organic chemicals Decrease in sales of agricultural materials due to farmers’ damage from floods

Short• Develop materials that solve new issues arising from extreme weather (rain-resistant materials, biostimulants that counter heat stress, and others)• Select certain countries for priority development and marketing based on predictions of changes in
uncertain ecosystems (pests, weeds, etc.)

Inorganic chemicals
Property damage and lost profits due to disasters
Organic chemicals
Acute

On major risks
Financial impact more than minus one billion yen:
Financial impact less than minus one billion yen:

Explanation of risks and opportunities

Developing low-environmental impact products and strengthening
Shift to meeting consumer needs for Inorganic chemicals manufacturing systems
Technologies
Mediumlow-carbon products
Organic chemicals (Calculation of evaluation of financial impact includes rise in semiTransition
conductor demand)risks
Rising raw material prices
Increased procurement costs, rising material prices due to limited
Inorganic chemicals
Medium(titanium ore, coke, others)
availability
Markets
Inorganic chemicals
Energy cost fluctuations
Sharp price fluctuations in coal, fuel oil, gas, and electricity
Short–medium
Organic chemicals
Greater awareness of environmental Inorganic chemicals Fewer product orders and lower investor ratings due to delay in
Reputation
Mediumconsciousness among customers
Organic chemicals decarbonization

Physicalrisks

On major opportunities
Financial impact more than one billion yen:
Financial impact less than one billion yen:

Rise in average temperature,
extreme change of weather patterns

Organic chemicals

Increasing sales opportunities provided by selling of materials that
Medium–longrespond to ecosystem changes*Financial impact evaluation uses carbon pricing in each country under the 1.5°C scenario (IEA NZE 2050) for the calculation of cost impact (Scope 1, 2). Note that the organic business includes subcontractors (Scope 3).

49

Environment

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Indexes and Targets

ISK Group Aiming for Carbon Neutrality by 2050

For Scope 1 and 2 GHG (greenhouse gas) emissions, in addition to those disclosed last year at ISK Group companies in Japan,

With climate change becoming a major worldwide issue, the ISK Group has identified dealing with climate change and reducing

we also calculated those at overseas group companies so as to understand emissions for the entire ISK Group. Scope 3 (supply

environmental impacts as priority issues (materiality) and aims to become carbon neutral by 2050.

chain) emissions were also calculated in order to grasp the overall state of GHG emissions from ISK Group business activities.
To reduce Scope 2 GHG emissions, the Yokkaichi Plant has begun including renewable energy from biomass in the electricity thatit purchases.

<Reduction Targets>

2030: Target CO2 emissions reduction by 30% (against FY2019)
2050: Challenge carbon neutrality (net zero emissions)

GHG (Greenhouse Gas) Emissions of ISK Group (1,000 t-CO2)• CO2 Emission Reduction Road Map

GHG emissions

FY2019 (base year)

FY2020

FY2021

FY2022

Scope1

471

408

488

476

Scope2

20

19

23

22

Total

490

427

511

498

The ISK Group has set the reduction

strive for reduced emissions andcarbon neutrality in order to promote Climate Change Mitigation
and Adaptation.

Scope3Category

Calculated
Scope

FY2022

Non-consolidated

444.23Purchased goods and services

Category 2

Capital goods

Consolidated

14.55

Category 3

Fuel and energy-related activities
not included in Scope 1 or Scope 2

Consolidated

52.71

Category 4

Upstream transportation and distribution Non-consolidated
Waste generated in operations

Category 6

Business travel

Category 7

Employee commuting

Total of GHG Emissions of Scope3

Shift boiler fuel away from coal
+CO2 Rebuild manufacturing systems
Thoroughly save energy
Use renewable energy,
capture carbon
Improve processes

+CO2

2019

2030

Base year

Carbon neutral
Use innovativetechnologies, other4.33

Consolidated(in Japan)

3.00

Consolidated

0.23

Non-consolidated

0.47

+CO2

Carbon negative -CO2

TargetScope 1, 2, 3 GHG Emissions Share

Category 1

Category 5

30% reduction

targets for CO2 emissions (Scope 1
and Scope 2). We will continue to

GHG emissions calculated based on GHG Protocol

GHG Emissions of Scope3 (1,000 t-CO2)

Approx. 500,000 tons

Net zero

2050
TargetScope 1, 2: ISK Group
Scope 3: Set for each category

Challenge by using developing proprietary technologies
In order for ISK to continue contributing to better living environments through chemical technologies, we strive to develop

Scope1
Scope351 %47 %manufacturing and product technologies that contribute to energy savings and carbon neutrality.
In manufacturing technologies, when aging manufacturing equipment needs to be upgraded or new plants have to bebuilt, we make concrete proposals that realize the installation of equipment that uses minimal energy. For example, forprocesses that require large amounts of energy, such as pulverization and calcination, we gather as much informationas possible about the latest equipment and conduct testing before installing the actual equipment. We are also studying

Scope2

2%

519.52
Scope1,2,3 Total 1,017.43 (1,000 t-CO 2)technologies to make existing equipment more heat efficient and have been obtaining promising results on the effects.
We also offer technical support in the procurement and selection of environmentally friendly raw materials.
On the product technologies side, we are in the process of developing mass-production technologies for highly functional
heat storage material based on HASClayTM, developed by the National Institute of Advanced Industrial Science andTechnology. The aim is to put this heat storage material to effective use in systems that capture waste heat from power
generation facilities and plants and use it for drying, air conditioning, and agriculture climate control.

50

76

1,457
1,600
534
1,200

1,867
1,200

328
1,100

1,639
1,200

5,258
26,00021,000
7,300

2018

7,300

2019

7,700

2020

9,800

2021

7,800

2022 (FY)7,435

53,0002018

44,000

2019

8,000

18,00023,00036,00032,000

2020

2021

2019

67,725

66,1122021

62,1902022 (FY)66,50552,860

2018

2020

2021

2022 (FY)

2019

2020

0.14
0.12

2019

537,990419,645

50,0001,000,000 1,000,000 830,000 1,000,000 970,000

2022 (FY)

2018

4,062

2020

534,114120,000 130,000 410,449 110,000
5,000 100,000 2,900
6,100
2,900

180,930
148,134 146,343

2018

441,449

17,000

2019

2020

2021

120,000
4,900

2022 (FY)291,677

3,404

2018

10,231

385,025
5.173

4,503

8,975

5,500

2021

0.14

0.13
0.11

2022 (FY)42,2772018

39,194201935,1522020

39,189 38,609

2021

2022 (FY)

0.12

0.07

0.07

0.07

0.07

2018

2019

2020

2021 2022 (FY)

0.07

52

SocialAbout ISK

Occupational Safety and Health

Value Creation Strategies

Foundation for Value Creation

Corporate Data

To achieve these goals, the Yokkaichi Plant has formulated, and is implementing, an action plan. Some of the initiatives from this planare presented below.
(1) Implementation of various risk assessments relating to new and existing processes

Basic Policy
ISK’s safety and health policy is to ensure the safety, security, and health of employees and local residents by complying withsafety and health-related laws, preventing accidents and disasters, building a pleasant work environment, and constantly raising
the level of safety and health. Additionally, we have established “occupational safety and health, operation safety, and disasterprevention” as one of our Group’s key issues (materiality) and are promoting initiatives aimed at achieving a lost injury frequency
rate and severity rate of zero.

Because the Yokkaichi Plant handles amount of high pleasure gas, it has been designated as a special disaster prevention areafor petroleum complexes in accordance with the Act on the Prevention of Disaster in Petroleum Industrial Complexes and Other
Petroleum Facilities.
As part of risk management for such important locations, we conduct risk assessments with What-If Scenario Analysis to identify
potential sources of danger.
(2) Normalization of pointing and calling

Safety and Health Management Structures

Pointing and calling involves stopping, observing a target, pointing, calling

In line with our “Basic Policies on Environmental Protection and Safety & Health Promotion,” we have established the Environment,(vocalizing), and listening in order to prevent operational errors. However,

Safety & Health Management Committee under the purview of the Office of President to deliberate on the highest level policy

pointing and calling for every area to be checked is hard to do during operation.

proposals relating to safety and health, the environment and chemical substance management. Below this is the Safety and

Therefore, a checkpoint-specific level system has been adopted.

Health Council which, in addition to the organizations that promote environmental conservation and undertake chemical substanceLevel 1 Visual check

management, promotes occupational safety and health promotion awareness.

Level 2 Visual and pointing check
Level 3 Visual, pointing and calling check

Board ofDirectors

Executive Director
and President

Environment, Safety &Health Management
Committee

Environment, Safety &Health Audit Committee

Level 4 Stopping (adopting proper posture) and performing visual, pointing, and calling check
Level 4 pointing and calling is used at the plant entrance in particular in order to raise awareness.
(3) Promotion of autonomous management of chemical substances

Environmental Council

In response to the stipulations regarding “autonomous management of chemical substances” in the amended Order for Enforcementof the Industrial Safety and Health Act, we are working to prevent health problems through both legally mandated and voluntarily

Executive Management
Committee

Safety & Health Council

adopted management methods, which include appointing chemical substance managers and protective equipment managers,
conducting risk assessments, and implementing measures to reduce exposure, in a systematic way.
(4) Promotion of falling accident prevention

Chemical Substances
Management Council

With employees getting older, falling accidents are becoming more common and can result in lost worktime. As a countermeasure,
we are removing the steps around workers as well as painting them in easily noticeable colors. We have also introduced safety shoes

Safety and Health Management Systemwith increased toe spring (the distance that the tip of the toe rises from the floor when the shoe is placed on a level floor) which makeAt ISK, we have established “president-directed environmental, safety and health goals” which reflect the characteristics ofit harder to trip.

operation at each business location, and, in order to achieve these goals, key initiatives are set at the beginning of each fiscal year.
Here, we will look at the initiatives of our sole plant, the Yokkaichi Plant.
Fiscal 2023 President-directed Environmental, Safety and Health Goals for the Yokkaichi Plant (safety and health-related only)
1. Eliminate plant accidents (fire, explosion, leakage, etc.)
2. Achieve zero workplace accidents (zero lost-time accidents)
3. Improve health awareness and prevent health disorders
4. Promote safety and health and health measures for older workers
5. Achieve zero lost-time accidents involving commuting employees’ vehicles

The progress of these activities is assessed during monthly meetings of the Safety and Health Committee, at which countermeasures andother actions are reviewed and revisions made as needed. In addition, departmental and plant-wide reviews are conducted at the endof each fiscal year; activity summaries for each are created and provided to each other, including ISK Group companies, at the Safety &Health Council; information is shared and issues are sorted out; and then those issues are escalated to the Environment, Safety & HealthManagement Committee for deliberation.
After reflecting on the initiatives of the current fiscal year, the Environment, Safety & Health Management Committee sets goals for the
next fiscal year, and new initiatives are planned at each business location; thus a PDCA cycle is implemented to foster an upward spiralin occupational safety and health and health promotion awareness.

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Respect for Human Rights
ISK Group Policy on Human Rights

Designation of Human Rights Risks to Be Prioritized

We formulated the ISK Group Policy on Human Rights to further our efforts in respecting individuals. Based on international humanPlacing the highest priority on human life, the ISK Group has identified initiatives to address as priority human rights risks. Theserights standards such as the International Bill of Human Rights, the policy proclaims ISK’s dedication to preventing discrimination

include responding to the fact that our major manufacturing sites are located in areas expected to be damaged by a Nankai

and harassment and respecting individual privacy. It also details how we implement education and training to effectively achieve

Trough earthquake, enhancing our response to geopolitical risks, responding to workplace-specific risks like long working hours

these goals and conduct due diligence, as well as disclose pertinent information. The ISK Group Policy on Human Rights will guideand harassment, and responding to increasingly sophisticated information security risks.

our efforts to further respect human rights at all our worldwide bases. The policy, which was formulated with advice from outside

We also believe that it is necessary to understand the current state of human rights at suppliers and business partners andexperts, was approved by the Board of Directors on April 8, 2022.

communicate with them in order to further increase transparency.

Sustainability

Respect for Human Rights

Human Rights Risks to Be Prioritized

Affected Group

Health and safety

Workers at ISK’s groupcompanies

Long working hours

Workers at ISK’s groupcompanies• Normalization of long working hours due to personnel
shortages, diversification of work styles, etc.

Harassment / abuse /corporal punishment

Workers at ISK’s groupcompanies• Occurrence of harassment accompanying thediversification of work and human relationships

Leakage of personal information
or invasion of privacy

Workers at ISK’s groupcompanies Customers• Diversification of risk factors, such as unauthorizedaccess and cyberattacks, accompanying thedevelopment of information technology

Human rights issues at
suppliers and business partners

Workers at suppliers andbusiness partners• Insufficient understanding of the actual state of humanrightshttps://www.iskweb.co.jp/eng/environment/human_rights.html

Implementation of Human Rights Due Diligence
The ISK Group is working to build mechanisms

Steps in Human Rights Due Diligenceto identify and prevent or mitigate human rights
issues negatively impacting society.
In fiscal 2022, with the cooperation of outside
experts, we examined our principal businesses
and associated value chains, identified andevaluated human rights issues that could havea negative impact on human rights through ourbusiness activities, and then designated thosehuman rights risks to be prioritized.

Identification

Processof the adverse impacts ofhuman rights issues

for identifying
the adverse impacts ofhuman rights issues

Prevention and mitigation

Identification ofhuman rights issuesof adverse humanrights-related impacts

Follow-up surveyof the effectiveness of
our actions
Information dissemination andcommunication

with outside stakeholders

Major Human Rights Risks• Large-scale earthquakes, pandemics, etc.
• Protest activities, terrorism and kidnappings in regionswith geopolitical risks and at our overseas sites

Evaluation
Exchange of views withexperts and others
Human rights
risks to be prioritized

Human Rights Education and Training for Employees
In fiscal 2023 we conducted video training aimed at all Group employees in order to ensure their foundation ofknowledge regarding human rights in business, as well as to deepen their understanding of the human rights-related
initiatives undertaken by the ISK Group.
The training was divided into three components: “What are human rights?” “Worldwide Trends Regarding Businessand Human Rights,” “Initiatives of the ISK Group.” This training serves to raise awareness among employees about
respect for human rights, and this, in turn, leads to increased corporate value.

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SocialAbout ISK

Disclosure of Human Rights Risks to Be Prioritized

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Sustainable Procurement
Within the ISK (Ishihara Sangyo Kaisha, Ltd.) Group, we pursue socially responsible procurement activities through our business
operations, in collaboration with suppliers and contractors, as specified in our Code of Conduct and Policy on Human Rights. We

Message from an Outside Expert

hereby adopt the Policy on Procurement in order to promote such socially responsible procurement activities.

I welcome the fact that the ISK Group has begun to undertake human rights due

ISK Group Policy on Procurement

diligence.

1. Legal Compliance

The potential negative impact of business activities on human rights (human rights
risks) is identified with a focus on stakeholders, who are rights holders of human

ISK Group complies with laws and regulations of each country and region and conducts procurement activities sensibly inrights, and is evaluated with the severity of the impact on human rights used as

accordance with social ethics.

a priority indicator. Listing the health and safety of the ISK Group employees as ahuman rights risk to be prioritized is in line with the latest trends in the international
community. The International Labour Organization adopted its core labor standards
in 1998, and added “promoting safe and healthy working environments” to them in

Attorney, New York State-licensed attorney
Member, Steering Committee,
Business and Human Rights Lawyers Network JapanEmi Omura

2022. Thus, the importance of occupational safety and health was reaffirmed as fundamental human rights.
Regarding long working hours and harassment, the protection of the lives and physical and mental health of workers is requiredby domestic laws and regulations. However, the United Nations Guiding Principles on Business and Human Rights require
initiatives which go beyond compliance with domestic laws and regulations. For example, companies are required to confirm
whether work style is being reformed or harassment countermeasures are taken among suppliers or business partners. In
addition, I believe that it is necessary to deal with personal information and privacy in accordance with international standards
in order to prevent serious situations that threaten the lives, bodies, and livelihoods of individuals, while taking into account

2. Fair and Reasonable Transactions
ISK Group provides opportunities openly to both domestic and overseas suppliers and contractors and is committed to fairtransactions. ISK Group conducts reasonable procurement activities by considering multiple elements in a comprehensive
manner, including quality, price competitiveness, supply stability and capacity for technological development.
3. Establishing Partnerships
ISK Group strives to promote mutual understanding with suppliers and contractors and to strengthen partnerships by building
relationships based on trust.
ISK Group will take reasonable and appropriate steps to determine to the best of its knowledge that its suppliers and contractors
practice the values espoused by ISK Group as set forth in the Appendix.
4. Promoting Social Responsibility

differences in the privacy protection laws of the countries where your company operates.

ISK Group respects human right as a member of the international community and conducts procurement activities in

I have understood that the ISK Group will work on future initiatives to identify concrete human rights issues at suppliersconsideration of various aspects of sustainability such as environment and safety.

and business partners and to promote dialogue with stakeholders in the process of human rights due diligence. The ISK

In addition, ISK Group will actively participate in international initiatives such as Responsible Care activities, management ofGroup promotes initiatives related to environmental impact, including waste disposal, and advocates process safety, disasterconflict minerals (3TG, cobalt) and procurement of sustainable palm oil.

prevention, and environmental protection activities in the Multi-Stakeholder Policy that ISK formulated in 2023. A measure to

The ISK Group will publicize initiatives concerning procurement activities pursuant to this Policy via the ISK Group website and/or Integrated Reports.

be taken would be to reconsider environmental issues faced by suppliers and business partners from the perspective of humanrights through dialogue with local communities.
Initiatives on human rights that lead the chemical industry will help increase productivity and secure and maintain excellent

Sustainability

Sustainable Procurement

https://www.iskweb.co.jp/eng/environment/procurement.html

human resources through the improved job satisfaction of employees, gain support from business partners and customers,
and strengthen relationships of trust with them. I believe that such initiatives will bear fruit in the form of an increase in theevaluation of corporate value by domestic and foreign shareholders and investors, and will surely contribute to the further
development of the ISK Group.
I look forward to the progress of human rights due diligence in the future.
Note: The above comments represent the views of Ms. Omura as an individual attorney. They do not reflect the views of any law offices ororganizations to which she belongs, or of any organizations for which she serves as a director or officer.

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Message from the Director of General Affairs & Human Resources Headquarters

Sympathize company's vision andAchieve personal career vision
Within the ISK Group, we have codified, in line with our Vision 2030 long-term vision, the “Purpose” that we want our Group toserve in contributing to society. While maintaining core competitive strength through our chemical technology, we will rely on
our corporate philosophy, the willingness to embrace challenges which is part of our founding DNA, our “Value Creation Core”
including our ability to develop proprietary technologies, our ability to collaborate globally, our ability to accommodate quality,and environmental requirements, and our management capability etc., express our Group’s commitment to delivering better living
environments to the people of the world. It is our purpose, which resonates with all Group employees and provides a more tangible
sense of connection with society, that will serve as the compass indicating the direction of our future efforts.
I believe that by fostering individual contemplation and action about what one can do for society and how to go about realizing
the ISK Group’s purpose, while at the same time aligning the ISK Group’s purpose with each individual’s career vision, a senseof motivation and rewarding challenge is created which will, ultimately, lead every employee to say, “I’m happy I joined the ISKGroup.”– Cultivating Diverse Human Resources to Tackle the Challenge of Value Creation –Management Targets(Vision 2030)[Purpose]
To continue contributing to better
living environments throughchemical technologies
Eight Most Important Issues• Dealing with climate change, reducing
environmental impacts• Technological development capabilities• Supply chain management• Occupational health and safety,
operation safety and disaster prevention• Diversity and inclusion• BCP, risk management• Corporate governance• Reforming workstyles by pursuing digitaltransformation (DX) and streamlining
operations

Value Creation
Core

Related management
challenges

Human capital
items

Ability to develop
proprietary
technologies

New business creation

External knowledge utilization

R&D strength improvement

Development strength index

Individual/organizationa
activation

Engagement improvement

Ability tocollaborate globally

Response toenvironmental
changeHuman resources system reform

Sustainable production activity

Health and safety

Interconnection

Ability to accommodate
quality and environmental
requirements

Management
capability

Diversity andinclusion

Human resources development

Flexible work styles

Empowering women
Organizational strengthening/
driving force enhancement

Within the ISK Group, we consider people to be our greatest asset
and regard human resources as company capital. We believe that“human resources are the source of our competitive strength,” and,thus, invest in human resources is indispensable to increasing our
medium- to long-term corporate value.

Greater corporate
value

Contributing to realization of a sustainable society
together with improving our corporate value
through such business activities.

In order to link human capital with value creation, we foster the growthof the autonomous “individual,” which leads, also, to the growth of the

Director of General Affairs &Human Resources Headquarters

Yoshio Nishiyama

organization and, by extension, the growth of the company as a whole.

and business strategies. We will continue to develop ourselves as an organization in which all employees aspire to addressThis allows each employee to have a sense of his or her contribution

the challenges facing society, which attracts diverse and specialized human resources, and that exists as a group in which all

to increasing corporate value, thereby furthering the growth of theemployees are empowered to demonstrate their individual talents and skills. Towards that end, we will promote training to help

“individual” and creating a virtuous spiral. And, in order to maintainemployees acquire those abilities and qualities that all employees should possess, as well as those abilities required for thethis crucial upward spiral, we believe it is essential to link humanperformance of specific roles, and we will also bolster systems which encourage self-improvement and tackling challenges inresource strategies and personnel measures based on management

order to foster independent skills development and self-growth.

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

– Human Capital Investment Initiatives –We will implement five human resources strategies to realize value creation and personal and organizational growth.
1. Optimal placement of human resources

Experiencing Cross-cultural Exchange via Overseas Training

We will secure a necessary and sufficient number of human resources to implement our business strategies and place them in

I made use of the in-house training program to receive language

accordance with our business strategic priorities. We are focusing on mid-career hiring as part of our efforts to acquire highly

training in India for six months.

specialized human resources, such as management personnel and DX personnel, and to strengthen diversity in terms of genderThis training was a valuable opportunity to not only learn the language

and nationality. Mid-career hires utilize the skills and experience they have cultivated externally, while leveraging our corporate

but also to learn about the lives and dispositions of the local people.

resources, to contribute to their own success and that of the company. In fiscal 2022, 64.5% of all hires were mid-career hires.

In particular, I feel that having an understanding of their proactive
approach and attitude towards things will be extremely important

2. Skill acquisition and strengthening
We prepare training programs to help employees acquire the skills and expertise necessary to execute business strategies,
and we provide them with a variety of opportunities for experience, both domestically and internationally, inside and outside thecompany. We have courses to improve their global business skills, such as online courses they can take at home. They can also
go to a language school to learn foreign languages as well as take part in overseas training and other options.
In particular, we engage in active human resources investment to facilitate skill-building among those personnel with the willand desire to grow, and to facilitate acquisition among promoted employees of the skills necessary to produce better results.

for smooth communications with them in the future. Currently, I am
in charge of product development, marketing and sales in the South
Asia region and apply what I learned in language training to my daily
work.

Product Development & Marketing Division,
Biosciences Business Headquarters
Asia Pacific GroupJun Sawano

Specifically, we carried out top leader training (training of next generation of executives), management leader training (middle
management layer), newly appointed manager training, and ISK management school (selective), for each job level, and also
Training independently selected by each department. In fiscal 2022, we invested an average of 50,000 yen for all employees.
• Time and Money Invested in Employee Training Programs (non-consolidated)
Training time per person

Training cost per person

Hour/person

24
21
4.5

10,000 yen/person

3.9

4.6

In 2022, we established an education and training system and launched relevant
initiatives with the aim of cultivating outstanding future personnel and fostering

20
16

Development of an Education and Training System and Launch of
Relevant Initiatives at the Yokkaichi Plant

skill-building for everyone that will ensure the Yokkaichi Plant is a sustainable

5.0

business location. In addition to providing training by job level, hands-on safety
training and other training, we conduct in-house training in “foundational
knowledge” and have introduced e-learning in order to raise the skill level ofyoung personnel, in particular, to foster operational improvement based on
fundamental rules and principles that will ensure we are a sustainable plant.

2019

2020

2021

2022

(FY)

(Included training to improve employee capabilities, annual training by job level, career training, next-generation executive training, etc.)

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Employee Training Programs and Career Development Support
Once employees enter ISK, the company develops their capabilities by holding courses company-wide at certain points in their careers in order to make them aware of their roles in society and the company and to boost various skills.

Training by job level

Training for selected members

Role awareness for managers and chief

Foster executives

Newly appointed Purpose: Rethink the role of managers and improve workplace management abilities.
manager training Content: Through lectures, participants learn management basics, business improvement, assessment methods, finance, and marketing.
Newly appointed
chief training

Selective

Purpose: Make new chief aware of their leadership role in the workplace as a stepping stone towards becoming managers.
Content: Participants learn what chief should know about the state of the organization, their roles and expectations, executing
duties, and running an organization.

Content: Learn the basics of marketing using own company as a theme. Develop presentation skills through public speaking.

Purpose: Train next generation of executives, boost their management abilities, and give them the power to think and act like executives.
Content: Participants take lectures from experts in management strategy, Human Resource (HR) management, leadership, finance,accounting, etc., and discuss issues with members of other companies.

Management Purpose: Cultivate the logical thinking skills necessary for middle management layer to become a future executive.
leade training Content: Participants learn systematically the areas of “people”, “goods”, and “money.”

Improve mid-level employees’ capabilities
Purpose: Teach mid-level employees (new graduate hires in their fifth year at ISK and Mid-Career Hires with about the same years of
Mid-level
experience) how to assess the current state of the company and what it should do in future.
employee training

Top leader
training

Training of core human resources
Selective

Purpose: Candidates in their 30s who appear ready to be managers are selected and learn how to improve their global communica-

ISK Managementtion and other business skills.
SchoolContent: Training includes leadership, finance, marketing, accounting, and English conversation classes.

Strengthening basic skills as working members of society

Encountering Different Business Perspectives Through ISK Management School
3rd yeartraining

Purpose: Employees in their third year reflect on themselves and how they can improve, and build a foundation for becoming
effective leaders who can improve productivity in the workplace.
Content: Participants work on improving self-esteem.

2nd yeartraining

Purpose: Employees in their second year learn to take action independently and proactively, work well with others, and contribute to the organization.
Content: Training covers self-management basics (time management and planning, how to raise and maintain motivation, and work well with others).

1st yeartraining

Purpose: Participants reflect on their first year at ISK and learn about their role in working with and fostering younger employees so that they can
succeed in their second year.
Content: Using a motivation graph, participants reflect on their first year at ISK as well as learn team problem-solving processes through planning meetings.

6-monthtraining

Purpose: Learn the duties of each ISK department. Learn the fundamentals of a working member of society, how to get jobs done, and what type of employee you should be.
Content: Participants take lectures by ISK’s legal and corporate planning departments, build the foundation for becoming a businessperson, and reaffirm the importance ofmaking reports, keeping the lines of communication open, and asking for advice.

intentions underlying our strategies. I also had opportunities
Yokkaichi Plant
Functional Materials
Production Division
Production Group Chief

to engage in discussion with members of other departments
and companies who work in different business sectors to
me. This exposed me to perspectives on a variety of issues,

Takuya Hiramatsu

such as sales, finance and human resources, which I had

The training in the ISK management school involved not only

extremely valuable for a tech-focused person such as myself

the systematic study of business-related knowledge andwho rarely gets to experience such a multitude of different

thinking, I feel it has changed my perspective on my own

perspectives. I will keep the business-related thinking andorganization. During training, we applied business frameworks

knowledge, as well as big-picture and multifaceted perspectives,

and thinking to case studies used to teach about problem

that I gained from this training in mind as I actively participate inanalysis and strategies in a variety of different businessthe building of a future vision for, and the management of, mycontexts, and this has made me more aware of changes in theorganization and, thereby, help improve the capabilities of theexternal environment surrounding our company as well as theentire organization.

no experience with previously, making the whole experience58

SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

3. Empowering women
We are working from a medium- to long-term perspective to create an environment where women’s participation is commonand expected. Specifically, we are actively recruiting female recent graduates and mid-career hires, as well as promoting female

Tackling the Challenge of the Management Promotion Exammanagers, and, in terms of balancing work with child care, regardless of gender, we are cultivating workplaces where there isworkplace-wide understanding of, and support for, the life events, thereby fostering the development of a corporate culture which

so, last year, I took the management promotion exam.

empowers women to pursue their careers without interruption. In fiscal 2022, childcare leave acquisition late was 36% for male

After returning from childcare leave in 2019, I shifted

employees and 100% for female employees.

to morning work using the flex-time system to be able
to go and pick up my child thank to coordinating with

4. Improving engagement

my husband. Within the department, when it is time

In order to enable individuals to demonstrate their full potential and contribute to increased productivity and corporate value

Central Research InstituteResearch Management Division
Planning Group Manager

amidst an increasingly diverse range of attitudes and needs employees have with regard to lifestyle and career development, it isimportant that we cultivate employee-friendly work environments which improve the motivation of every employee. We hope that,

Sekimi Morino

as we accommodate a diverse workforce with flexible work style options, such as by introducing work-from-home and flex-timesystems to facilitate work-life balance, this will contribute to a greater awareness of individual work efficiency.
• Increasing Support for Work-Life Balance(Non-consolidated)
Childcare leaveacquisition rate

Employees taking shortened
work hours for childcare
Persons

Men (%)
Women (%)

100

100

100

100

• Engagement Survey Results
FY2022
FY2023Business potential

Sense offairness oftreatment

4.50
4.00

Work meaning/
contribution

20

24.0
6.1
2019

2020

15.6

36.0

2021

2022

Diverse work
styles(FY)

Interpersonal relations

the company, such as work-from-home two days a

At the Central Research Institute, my responsibilities

week.

include performing technical surveys prior to patent

My job involves working outside my department as

application and coordinating with external organization

well, and I intend to capitalize upon this to gain a moreregarding contract work. My supervisor always advise me

diverse perspective as I accumulate experience so thatto pursue my work "as if you were in a higher position;”

I can continue working in an ever-broader capacity.

5. Cultivating DX personnel
technology utilization) and X (operational and business model transformation). Although a DX mindset has not yet been cultivated

2.50

14

currently utilizing a variety of systems offered within

The aim of DX is not to introduce IT (information technology) but, rather, to facilitate the co-evolution of D (data and digital

3.00

20

and encourages me with a call of “It’s time!” I am also

5.00

3.50

20

to go home, my superior is considerate of that fact

Sense ofself-growthcompany-wide, we are conducting training for all employees intended to improve their overall skills, and we are working to
improve IT literacy as well as strengthen the development of DX personnel.

Support fromsuperiors

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Digital Transformation (DX) Initiatives

DX Promotion Structures

One of the priority goals for medium-term business plan ,Vision 2030 Stage I, is Reforming workstyles by pursuing digital transformation

In order to realize our DX vision, we have established a DX Promotion Team which is under the purview of the Sustainability(DX) and streamlining operations.

Promotion Committee. We are working to improve labor productivity and achieve workstyle reform by establishing themed

We will promote digital technology-driven, company-wide DX and strengthen our business foundations with the aim of expanding existing

project groups to focus implementation on those areas closely tied to business operations and, thereby, produce results whilebusiness and creating new business adapted to customers’ and society’s changing needs and the changing business environment.

accumulating small success stories.

DX Strategy and Roadmap<Project Groups>

With a vision of utilizing DX to accelerate the realization of better living environments through chemical technologies, we arepromoting DX in accordance with the following strategic policies. While our initial goal is to finish a DX-Ready stage, as wework toward Vision 2030, we will foster increasing maturation over the medium- to long-term to transform ourselves into an

Sustainability
Promotion
Committee

RPA
Paperlessorganization which leverages advanced digital technology.

DX Promotion
Team

1. Expanding existing business and creating new business adapted to customers’ and society’s changing needs
2. Reforming workstyles and strengthening manufacturing systems by pursuing streamlining operations
3. Improving IT literacy of all employees and utilization of digital technology and data

Production System
Strengthening
Program

4. Reforming to the environment and culture where innovative idea can be attempted and implemented easily and swiftlyStage I

Stage II

Stage III

Goal

DX-Prep

DX-Ready

DX-Emerging

DX-Excellent•Establishing a corporate DX
promotion system•Reforming workstyles andstreamlining operations•Strengthening the production
capacity of the Yokkaichi Plant•Accelerating operational reformand digitalization(new fundamental Go-Live)•Going completely paperless•Stimulating interdepartmental
collaboration•Accelerating businesscreation•Organization with aculture of innovation"

2024

Yokkaichi Plant
Problem-Solving
Activities•Establishment of
new business pillars

Workflow/TeamsAI Translations/Meeting Records/AI Contracts
AI Drug Discovery
IT Literacy
Project Management

Cultivating DX personnel•Cultivating DX personnel•DX certification (Ministry of Economy, Trade and Industry)2022

DX-ReadyWith the aim of building a system which makes business departments to independently pursue DX, we first define the necessary
DX personnel our company needs and then provide individually tailored training in order to cultivate human resources who
2027

2030

possess operational knowledge and a certain level of IT skill.
DX Environment Development

New business model creation

DX-Ready stage

In order to promote DX, we need to develop an environment where a shared awareness exists of the importance of moving away

Acceleration of digital innovation
We have developed digital infrastructure tohave business departments to pursue innovation
and become self-sustaining.

We are expanding existing business throughinterdepartmental cooperationand the use of digital technologies.

from existing ways of doing things and of embracing challenge. The DX Promotion Team is responsible for developing a system
We are using DX to accelerate therealization of better living environments
through chemical technologies.

“DX Verification Promotion Plan” to address the provision of consultations and cost-related support when starting DX activity
verification (with a small start), as well as strengthening both the IT infrastructure system and hardware environment.

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SocialAbout ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Health & Productivity Management Promotion

Introduction of Transfer-restricted Share Incentive System

At ISK, we treat health and productivity management as part of our management strategy and, thus, endeavor to create a

In fiscal 2022, in order to improve employee benefits and facilitate sustained growth in corporate value, we introduced to theworkplace where the individual mental and physical health of employees is promoted, enabling them to work to their full potential.

Ishihara Sangyo Kaisha Employee Stock Ownership Association a transfer-restricted share incentive system aimed at supervisors.

Our Health & Productivity Management Promotion System is overseen by the Human Capital Management Promotion TeamWe believe this will lead to greater “stakeholder-focused management” by facilitating an alignment of interests between

established under the purview of the Sustainability Promotion Committee, where overall health and productivity management

supervisors and stakeholders, such as by fostering a management-participation mindset wherein the supervisors who assist withplanning and operation is primarily handled by human resources departments (including on-staff public health nurses), the healththe running of the company think about corporate value creation from the same perspective as the shareholders and investors andinsurance union and the labor union, jointly. Additionally, the progress of initiatives is regularly reported to the Board of Directors

by ensuring wealth realization through economic benefits derived from the long-term growth in ISK share value.

and Sustainability Promotion Committee, who discuss what further initiatives should be taken.

In fiscal 2023, we also introduced this system for supervisors at our domestic Group companies in order to strengthen the GroupIn fiscal 2022, we promoted health and productivity management from the two perspectives of “improving health literacy” andmanagement mindset and foster a sense of unity. Through this, we will further leverage the Group’s collective strength towards“maintaining and improving physical and mental health.” To improve health literacy, we conducted e-learning aimed at managers

achievement of the Vision 2030 goals and improvement of our corporate value.

(100% participation rate), and survey results showed that it had a helpful impact on how they approach employees’ healthmanagement.
In the future, we will conduct e-learning and other training on the topics of “food” and “sleep.” Additionally, to help employees inmaintaining and improving their mental and physical health, we make use of not only the “Brief Job Stress Questionnaire” but also
the “New Job Stress Questionnaire,” which includes additional questions about work engagement, workplace unity and whether
the workplace is free of harassment. In order to improve psychological safety at workplaces where there are many employees withhigh levels of stress, we contract an external organization to implement a workplace improvement program as part of our efforts
to provide emotional care and better workplaces.

ISK has been recognized as a Health & Productivity Management Outstanding Organization (largescale corporate sector) in 2023
under the Certified Health & Productivity Management Outstanding Organizations Recognition Program overseen by the Ministryof Economy, Trade and Industry (METI) and the Nippon Kenko Kaigi.
The Yokkaichi Plant, which accounts for more than 80% of our employees, wasalso recognized as a “Mie Tokowaka Health Management Company (White Mie)”in 2023.
In the first half of fiscal 2023, our domestic Group companies also formulated
health declarations in the name of each company’s representative director andmade them known to their employees. All of the ISK Group will continue to work
together to promote the health and productivity of its employees.

61Initiatives to Spread ISK Group’s Purpose

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

[Purpose]

Continuing to Contribute to Better Living
Environments through Chemical Technologies

To help employees adopt this purpose as their own, we conduct workshop-style training
which uses employees as facilitators. Participants engage in a voluntary exchangeof opinions about the direction of the company from an internal rather than external– Connecting Our Purpose with Employees’ Aspirations –perspective, as well as share their experiences and aspirations with one another. This is an
opportunity for employees to think deeply about the significance of what they do at ISK, thus

The purpose of the ISK Group encompasses a “willingness to embrace challenge in order to provide the indispensable.”

not only fostering a connection between the company’s purpose and the work employees

We provide opportunities for purpose-related talks amongst the employees themselves to guarantee that this purpose resonatesdo, but also, with the values each employee holds.

with our employees and encourages them to contribute to society through ISK's business activities.

This training has been conducted approximately 60 times company-wide and adopts across-functional format at each business location. Allowing employees to engage in opinion
exchange with members of different departments that they would not normally interact withhelps to give them new insights and awareness.

In-house enlightening poster

Voice of a Training Participant
To be perfectly honest, prior to this training,
Training for managers

I had no idea what relationship ISK Group’s

Choosing managers who have been throughtraining to serve as instructors

purpose has with my day-to-day operations.
After taking the training and thinking about
it for myself, I felt that the best thing I could
do was start by trying to connect this purpose
with my daily duties.
I have also come to understand that in themodern society, companies cannot simply
pursue profit, they need to think deeply about
Yokkaichi Plant
Titanium Dioxide Production Division Finishing Process Group
Assistant Unit Leader

Communicating personal experiences with one
another

Sharing future actions to be taken as a group

their purpose in order to ensure that they areseen by society as essential.

Hisanori Ban

62