Teijin Group Sustainability Website Content 2021

Sustainability

Message from CSRO

Toward the Realization of a Sustainable Society

Toshiya Koyama
Executive Officer, Member of the Board
Chief Social Responsibility Officer

In recent years it seems as though not a day goes by when the word"sustainability" does not appear in newspapers and other media. I
am always a little puzzled, however, because the word is often usedwithout a subject. What exactly is it that must be sustained? Thinking
about this question, I understand that the subject must be the society
in which we live. So, what is the starting point of this social
sustainability?
The origin of corporate social responsibility in Europe apparently was
the issue of unemployment among young people in the 1990s. Since
European society could not be sustained if the matter were left
untouched, not only governments but companies also set abouttackling the youth unemployment issue. Every person constitutes anessential asset for society. Therefore, since companies were handlingsocial assets, they had to accept the accompanying responsibility.
Companies educate and train people and then have them create
value. Accordingly, I believe that human rights definitely lie at theroot of social sustainability.
Besides human rights, our business would not survive without thesustainability of suppliers. In addition, in the supply of goods andservices, it would be inexcusable if they were harmful to people.
Furthermore, in the process from producing the goods and services
that we supply to delivering them to the customer, the emission ofmuch carbon dioxide would mean that we were cohorts in bringing
about climate change.
In this way, to sustain society, steady efforts are necessary to solve
multiple problems one by one. The Teijin Group intends to contributeto the sustainability of society by continuing to challenge issues
around the clock in our effort to enhance the quality of life, which is
our corporate philosophy.

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Sustainability

Sustainability Policy and SDGs
Based on the following sustainability policies, the Teijin Group contributes to the development of a sustainable world by
providing value to solve social issues through three solutions focusing on people: (1) environmental value solutions; (2)safety, security and disaster mitigation solutions; and (3) demographic change and increased health consciousness
solutions.

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SDGs Approach Policy

To realize a sustainable world, our focus will be on people, to provide innovative solutions to enhance the quality of life, while minimizing theimpacts of our activities on the environment and society.

CSR Basic Policy
The Teijin Group defines its CSR Basic Policy as follows. Basically it’s a long-term policy, but enumeration of specific issues in it are reviewed in
the medium term.

CSR Basic Policy
1. Basic Stance: Sustainable Development of Business and Society
Work positively and proactively on important issues related to corporate social responsibility such as the environment, society andgovernance (materiality) with high sensitivity to aim for sustainable development of business and society as “an enterprise that isessential to tomorrow’s society.”
2. Contribute to Society through Business
Proactively grasp those problems that society needs to solve related to the environment, safety/security/disaster mitigation andhealth, and provide sustainable solutions to such problems through business.
3. Appropriately Respond to Various Risks
Manage various risks related to business activities appropriately such as corporate ethics and compliance, environmental impacts,
quality assurance, occupational safety, etc., and demonstrate strong resilience even when risks actualize.
4. Dialogue with Society to Improve Continuously
Maintain positive dialogue with society and continuously improve these recognitions and practices. At the same time, contribute togaining and maintaining social recognition as a “sustainability advanced enterprise” globally.

Participation in the Global Compact

Teijin Group Sustainability Website Content 2021

Teijin Limited joined the UN Global Compact* in March 2011 by a decision of the Board of Directors. Participation in this global initiative forsustainable development is voluntary. Participating companies are required to follow the 10 basic principles of the Global Compact relating to“human rights,” “labor,” “environment” and “anti-corruption.”
As a global company, in order to practically implement high-quality CSR management, in FY2011, the Teijin Group reviewed its Corporate Codeof Conduct and Corporate Standards of Conduct based on the principles of the UN Global Compact. In addition, in terms of business activities,
we clarified policies to practically implement the basic principles such as respecting human rights.
Further the Teijin Group has revised its previous Corporate Code of Conduct and Standards of Conduct to the Code of Conduct to clarify theGroup’s engagement with the United Nations’ Sustainable Development Goals (SDGs), the Global Compact and other frameworks in accordancewith changes in the social environment in June 2018. Our new Code of Conduct now includes the statement, “Integrity: We act with integrity incompliance with laws and regulations, and show respect for human rights and local communities in which we operate.”
Additionally, in March 2019, we established the Teijin Group Human Rights Policy. Under this policy, we pledge to endeavor not to be involved
directly-or to be complicit indirectly by way of external affiliates-in any kind of human rights violations in our business activities, in recognitionof the fact that respect for human rights is an important social responsibility to be fulfilled as a company.
* UN Global Compact: A set of voluntary corporate-action principles proposed by the former Secretary General Kofi Annan during the World Economic Forum (Davos
Forum) held in January, 1999.

The Ten Principles of the UN Global Compact
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.
LabourPrinciple 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

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Sustainability

Management System and Promotion Activities
We have organized the risks and opportunities the Teijin Group faces, and established a sustainable management base topromote CSR activities.

Management System
The Teijin Group aims for sustainable development of business and society by promoting CSR activities integrated in business, and has
appointed a Chief Social Responsibility Officer as the person in charge of CSR activities, who is demonstrating strong leadership.
The basic CSR policy and strategies are discussed in the Group CSR Committee, and the CSR Officer comprehensively considers the internal andexternal environmental audits and internal audit results to make proposals to the management committee. That management committee
deliberates and makes decisions for the CSR basic policy and strategies.

Promotion Activities

Teijin Group Sustainability Website Content 2021

We have organized the risks and opportunities the Teijin Group faces with the aim of contributing to the development of a sustainable world,and established a sustainable management base to promote CSR activities.
In order to implement the Teijin Group’s CSR activities in a unified and effective manner, a main division/organization in charge is specified
under the supervision of the CSR Officer for each important CSR issue. This main division/organization then starts the PDCA cycle of planningmedium- to long-term and single fiscal years (Plan), implementing this plan (Do), evaluating (Check), and improving (Action) to achieve ongoing
improvement and enhancement of our CSR activities.

PDCA approach to CSR activities

Group CSR committee
The Teijin Group has regular meetings of the Group CSR Committee chaired by the CSR Officer twice a year.
[Topics]
Sharing the Group’s response to important CSR issues and progress toward achieving its goals
Extracting issues related to important CSR matters of the Group and making proposals for countermeasures
In FY2020, we invited external experts and discussed initiatives on important issues such as an Environmental Medium-term Plan Roadmap ,internal carbon pricing, supply chain BCP, and BCM, while also sharing information on anti-corruption compliance and global regulation for theprotection of personal data.

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Results of reviews by Chief Social Responsibility Officer(Law violations and occurrence of accidents)
The Teijin Group conducts a survey by the Chief Social Responsibility Officer of the Compliance and Risk Management(CRM) activities inbusiness groups and group companies. This review checks the response of each business group and group company to important CSR issues
and assesses whether there were any serious violations of laws or accidents based on the compliance and risk management activities survey
submitted from business units and group companies.Of the matters reported to the Chief Social Responsibility Officer in October 2020, there
were no serious ones relating to violations of laws or accidents.

Implementation of employee awareness survey
We have been implementing an employee awareness survey to monitor the understanding and behavioral of employees in light of ourphilosophy, including the Code of Conduct, and to consider future measures to achieve greater understandings and awareness.
In FY2020, we shelved the implementation of the questionnaire and are re-setting target values based on the new Medium-Term Management
Plan and reviewing our operations and systems for global expansion with the survey scheduled to resume from FY2021.

External Evaluations
Status of inclusion in SRI indices (as of August 2021)
The Teijin Group was evaluated on its initiatives for ESG to date, and for its transparency in information disclosure. As a result, we continue to be
included in the following leading socially responsible investment (SRI) indices.
Inclusion in Socially Responsible Investment (SRI) Indices
Dow Jones Sustainability Indices
FTSE4Good Index Series
Ethibel Investment Register

Selected for the components of all four ESG Indices used in Government Pension Investment Fund (GPIF)MSCI Japan ESG Select Leaders Index
MSCI Japan Empowering Women Index (WIN)FTSE Blossom Japan Index
S&P/JPX Carbon Efficient Index

Note: The inclusion of the Teijin Group in the MSCI Index and the use of the MSCI logo, trademark, service marks or index names by the Teijin Group, are not attempts by
MSCI and affiliated companies to sponsor, advertise or promote sales. The MSCI indices are the exclusive property of MSCI and the names and logos of MSCI and MSCI
Indexes are trademarks or service marks of MSCI or its affiliates.

As a company with excellent ESG initiatives, we have been selected for two programs
Nadeshiko Brand 2021 for promoting the active role of women in the workplace
Company with Excellent Health Management (White 500)

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Sustainability

Materiality and KPIs
We introduce the five material issues of the Teijin Group, and the key performance indicators (KPIs) and target values.

Materiality of the Teijin Group
Materiality is social issues that we prioritize in our actions to realize our long-term vision of being a company that supports the society of the
future.
In the Medium-Term Management Plan 2020-2022, based on global social issues and the goals set forth in the SDGs, we have organized risks andopportunities that our company faces and identified five material issues to be addressed as management issues from fiscal 2020 onward.

Teijin Group Sustainability Website Content 2021

Materiality and SDGs

Learn more about materiality here
Climate Change mitigation and adaptation

Achievement of a circular economy

Realization of healthy and comfortable livingfor people

Further strengthening of sustainable
management base

Safety and security of people and local
communities

Process of identifying materiality
The Teijin Group grasps a wide range of social issues and screens them by conducting a materiality analysis from the perspective of their degreeof importance to the Teijin Group and degree of impact on stakeholders. The Chief Social Responsibility Officer then consults with external
experts. The Teijin’s Group Management Committee finally identifies the materiality to the Teijin Group.

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STEP1 Grasp and screen
Grasp the trends of a wide range of social issues including the SDGs, and digest them

STEP2 Analyze materiality
The digested social issues are analyzed and mapped two-dimensionally, with importance of the social issues to the Teijin Group in ascendingorder along the horizontal axis, and impact on stakeholders in ascending order along the vertical axis.

Method for determining impact on stakeholders (vertical axis)

Stakeholders are categorized into (1) shareholders and investors, (2) employees, (3) customers, (4) suppliers, and (5) local residents. The
ascending order of degree of impact on stakeholders is determined by whether a social issue is of particular interest to each stakeholder
category and then categorizes into high, medium and low.

Method for determining degree of importance to Teijin Group (horizontal axis)

Importance to the Teijin Group is determined from both the degree of impact on business (taking into account both the positive and negative
aspects), and also the prospect and likelihood of the issues occurring.

STEP3 Select material issues
From the issues analyzed at STEP 2, we select those issues which have a particularly high importance to the Teijin Group and a high degree of
impact on stakeholders.

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STEP4 Dialogues with external experts
We conduct dialogues with external experts about the Teijin Group’s process of identifying Materiality and the selected issues.

Details of Implementation

We conducted dialogues about the Group’s process of identifying materiality and the selected issues in October 2019, and received inputs fromexternal experts from a wide range of perspectives.

Connecting business fields with solutions helps improve corporate value

When organizing its materiality with a focus on the SDGs, I believe
Teijin can establish a greater sense of a narrative by showing how its
three solutions, which are created as a result of its business activities,
contribute to society. In addition, Teijin should be able to enhance its
corporate value to an even greater extent by extending a particularmaterial or business across multiple solutions. I also think it isimportant for each employee to gain an understanding on the kind of
business opportunities that are created by responding to the SDGs.

Hidemi Tomita
Director,
Lloyd’s Register Japan K.K.

Backcasting from the future with a view to the next 100 years is important

From the viewpoint of a long-term investor, the purpose of acorporation’s efforts toward ESG and the SDGs is to achievesustainable value creation over the long term. To that end, it isimportant to accumulate existing businesses and make commitments
to the future and then think backwards on how to accomplish them.
In addition to considering “what” actions it should undertake, Teijinshould think about “why” they are pursuing a particular action. I
therefore would like to see Teijin promote backcasting with a focus on
the next 100 years. Going forward, the extent to which Teijin can
ascertain changes in the business environment and consider aspects
outside the perspective of its past successes will become increasingly
more important.

Ken Shibusawa
Founding Partner & Chairman of the Board,
Commons Asset Management, Inc.

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Looking forward to long-term value creation related to climate change

From a short-term perspective too, Teijin deserves praise forsupporting the Task Force on Climate-related Financial Disclosures(TCFD). I think the Company could benefit from adopting a more
long-term perspective with its vision and strategies. I would like to
see Teijin establish goals for 2030 through a backcasting approachthat considers the kind of company Teijin aims to be by its 150-year
anniversary. If Teijin’s management is able to indicate the direction
toward which the Company is heading, I believe that knowledge ofthis path will spur various ideas from employees on how to reduce
CO2 emissions and other matters. To survive as a company going
forward, it is crucial to pursue efforts from the perspective of value
creation related to climate change.

Toshihiko Goto
Chief Executive Officer, Sustainability Forum Japan
Board Member, Global Compact Network Japan

Key dialogues held in the past
Dialogue on human rights with external expert (FY 2019) (PDF:49KB)
Corporate Governance Talk (FY 2018) (PDF:161KB)
Promoting of Diversity & Inclusion (FY 2017) (PDF:170KB)
Materiality Initiatives (FY2016) (PDF:9.29MB)
Holding a consultation about CSR procurement (FY2015)(PDF:91KB)
Identify Material CSR Issues (FY2014)(PDF:154KB)
True Diversity -- The Next Step in the Advancement of Female Employees (FY2013)(PDF:2.5MB)
How Teijin Aramid Creates Qualitative Value in the Chain (FY2012) (PDF:3.36MB)
CSR in Disasters (FY2011) (PDF:3.57MB)How Should Environmental Initiatives for China be Structured? (FY2010)(PDF:3.23MB)
Toward Better Home Oxygen Therapy (FY2009)(PDF:993KB)
Toward Expanding ECO-CIRCLE® (FY2008) (PDF:2.38MB)
Operation of the Environmentally Friendly Design Guidelines (FY2007)(PDF:1.03MB)
Promotion of “ECO-CIRCLE®” (FY2006)(PDF:1.41MB)

STEP5 Identify material issues
The Group Management Committee deliberates, checks, and identifies the Teijin Group’s Materiality. The current five material issues wereidentified at the Group Management Committee in December 2019.

KPIs & Targets
The KPIs for each material issue set by the Teijin Group are indicated below.
Materiality

1. Climate Change mitigation and adaptation
2. Achievement of a circular economy
3. Safety and security of people and local communities
4. Realization of healthy and comfortable living for people
5. Further strengthening of sustainable management base

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Materiality

KPIs

TargetReference

1.2.3.4

Sales ratio of the three solutions

by FY2030

75% or more of total sales

Newlycreated in
April 2020

1

Avoided CO2*1 emissions*2

by FY2030

Avoided emissions > Total emissions

Newly
created in
April 2020

1

Climate Change(Group CO2*1emissions)

FY203030% reduction vs. FY2018(total amount)

Revised inJuly 2021

FY2050Net Zero Emissions

Newly
created in
April 2020

1

Climate Change (Supply Chain CO2*1 emissions*3)

FY203015% reduction vs. FY2018(total amount)Newlycreated inJuly 2021

2

Water (Freshwater Intake)

FY203030% improvement vs. FY2018(volume of freshwater intake per sales
unit)

Newly
created in
April 2020

3

Hazardous Substance

FY203020% improvement vs. FY2018(hazardous chemical substanceemissions per sales unit )Updated in
April 2020

2

Resources Recycling

FY203010% improvement vs. FY2018(volume of landfill waste per sales unit)

Updated inJune 2020

5

Diversity & Inclusion
No. of female executives

April 1,2031

10+Updated in
April 2020

No. of non-Japanese executives

April 1,2031

12+

Update in
April 2020

Japan*6

No. of managers (orhigher)April 1,
2031

300+

Update in
April 2020

US

No. of senior managers*7

April 1,
2031

10

Newly
created in
April 2020

EU

No. of global coretalents*8

April 1,
2031

10

Newly
created in
April 2020

China

No. of senior managers*7

April 1,
2031

12

Newly
created in
September
2020

Diversity of
Executives*4

Women’sadvancement
key goals*5

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Materiality

KPIs
ASEAN

*1
*2
*3
*4
*5
*6
*7
*8

TargetNo. of senior managers*7

April 1,2031

8+Includes CO2, methane and nitrous oxide
CO2 emissions that the Company's products have contributed to in the supply chain downstream
Covers Scope 3 emissions in Category 1 (purchased goods and services) except trading businesses
Total number of board directors, statutory auditors, group executive officers, and group corporate officers
Key goals are set based on regional situations
Major subsidiaries in Japan: Teijin Limited, Teijin Pharma Limited, Teijin Frontier Co., Ltd., Infocom Corporation
President or his/her direct report in a Group company
Human resources of female senior managers selected and certified as executive candidate

Reference
Newly
created in
September
2020

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Sustainability

Solutions and Value Creation
The Teijin Group creates new value and provides it to society through three solutions that leverage its strengths.

Solutions and Value Creation
The Teijin Group has inherited the DNA of “Evolution and Ambition”. In our 100-year history, we have been solving the challenges of that era andproviding various solutions. Our current goal is to contribute to the realization of a sustainable world. To this end, we will strive to create newvalue that society needs in three elds: “Environmental value solutions,” “Safety, security and disaster mitigation solutions” and “Demographic
change and increased health consciousness solutions.”
In addition, we will further focus on strengthening the management base, which is the foundation for that, and responding to risks
appropriately.

Value creation at a glanceTeijin Group Sustainability Website Content 2021

Value provided that contributes to solving problems

Sales for the “three solutions”
The Group’s targets for FY2030
Total sales ratio of 75% or more for the three solutions

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Statistics of sales for the “three solutions”