Sustainability strategy

12
Unifying thinking

3

Developing strengths(invisible assets)

4
Picturing the desired future

5
Evaluation analysis for achieving the vision

Developing strategies, acting andrepeatedly evaluating and improving

Tackling the climate change problem —Sustainability strategy

Reducing environmental impact

Solving social issues through business activities

At the Sansha Electric Manufacturing Group, we are accelerating activities to protect the global environment, believing that theconservation of the global environment is a duty that must be fulfilled for the good of future generations and the reduction of theenvironmental impact of business activities is one of the Group’s most important tasks.

Environmental management system

Basic policy
While international society is currently facing climate change and many other social and environmental
problems and it is necessary for companies to implement initiatives for building a sustainable society,
the Sansha Electric Manufacturing Group will help solve social issues through its businesses, such as
the development of products using power electronics and creativity, in its efforts to improve its corporate
value and establish a sustainable society. We will behave in a manner that fully considers the impact ofthe Group’s business activities on society and the global environment. We will strive to earn the trust ofstakeholders.

The Board of Directors determines the basic policy on
environmental initiatives and the Corporate Planning Conference,
which is attended by the President and Executive General
Managers, discusses specific actions and studies measures.
Specific initiatives related to environmental protection and energy
conservation are planned by the Environmental Management
Implementation Committee, which meets regularly. The plans arediscussed at the Corporate Planning Conference and decisions
on them are made by the Board of Directors.
The Environmental Management Implementation Committee
is composed of managers from individual departments andbases, and the Quality and Environment Planning Department
acts as the administrative office for this committee.

Board of Directors

Decision on policy

Corporate Planning
Conference

Discussing initiatives

Planning specificinitiatives

Environmental Management
Implementation Committee

Implementing
initiatives

Individual departments
and bases

Promotion structure
The Group understands that actions to address sustainability issues are a priority management issue
from the perspective of increasing corporate value over the medium and long term. The Board ofDirectors determines the basic policy and the Corporate Planning Conference discusses specific actions
and studies measures. Related committees collaboratively implement individual measures with otherinternal committees.

Sansha Electric Manufacturing Group Environmental Policy
The Group is aware that conservation of the global environment is a corporate social responsibility. We will work to reduce
environmental impact and consider biodiversity to aid the realization of a sustainable society.

1

Observance ofenvironmental laws
and regulations

We will observe environmentallaws and regulations and meetequivalent requirements.

Board of Directors

Environmental Management
Implementation Committee

Developing and making decisions
regarding basic policy

Environment
Personnel Development Committee

ReportHuman resource development andemployee engagement

Instruction

Corporate Planning Conference

Collaboration

All our personnel will be awareof importance of conserving
biodiversity and act in due
consideration of it.

We will work to reduce greenhousegas emissions from businessactivities.

6Reduction of theenvironmental impactof products

We will always strive to create
environmentally-friendly productdesigns to provide productswith little environmental impact
throughout their life cycle.

3Contribution to a
recycling-orientedsociety

We will strive to minimize waste
and efficiently use resources toaid the realization of a sustainable
recycling-oriented society.

74

Reduction of hazardous
substances

We will work to reduce emissions ofsubstances that adversely impact theenvironment and to prevent pollution.

Continuous improvement of theenvironmental management system

We will be aware of impact our business activities
and products have on the environment andwork to continuously improve our environmental
management system.

Occupational safetyInternal Control Committee

Observance of environmental laws and regulations

ISO14001 certifications we have acquired

Compliance and risk management

Instruction

Collaboration

Business departments and group companies
Implementation

43

Considerationof biodiversity
conservation

Prevention of global
warming

Safety and Health Committee

Deliberating on matters including
information about material social andenvironmental risks

Report52

We understand the laws and regulations that apply to groupcompanies as well as those that we should observe, andevaluate compliance regularly to ensure laws and regulations areobserved.
At the Sansha Electric Manufacturing Group, there were noviolations of environmental laws or regulations in FY2022. We willcontinue to strive to ensure proper control.

CertificationbodyJapan Quality Assurance Organization

Registration
numberSemiconductor Manufacturing Division
Power Supply System Manufacturing Division

JQA-EM7548
JQA-EM7051

Date ofregistration

Semiconductor Manufacturing Division
Power Supply System Manufacturing Division

June 28, 2019
February 14, 2014

SanRex REPORT 2023

44

Sustainability strategy

123Developing strengths(invisible assets)

Unifying thinking

4
Picturing the desired future

5

Developing strategies, acting andrepeatedly evaluating and improving

Evaluation analysis for achieving the vision

Environmental initiatives

Towards carbon neutrality in 2050
At the Sansha Electric Manufacturing Group, we recognize theimportance of constantly lowering CO2 and waste emissions
from production activities. Based on this understanding, we set
the following goals in FY2021.

Waste reduction achieved by ending the use of plastic
packing materials

Reduce the CO 2emissions of all groupcompanies 46% by 2030

Achieve carbon
neutrality by 2050

Our plants have been using reusable shipping containers andtaking other actions in an effort to minimize waste emissions
from business activities and to reduce packing materials andcushioning materials. In the future, at the Okayama Plant, we will
successively replace plastic packing materials with cardboard for
new products in a bid to reduce plastic consumption.

(Compared to FY2013)

Reduction of CO2 emissions — Achievements and goals (Scope 1 and 2)
Compared to FY2013

30.3%(Unit: tons CO2)

Waste emissions and recycling ratio
Total emissions (left scale)

(%)

98.2

1,000

Replacement of the gas airconditioning system

10,064

99.0

626

610

98.7

98.7

704

668

100500Compared to FY2013

Replacement of transformers
and the air-conditioning system(Okayama Plant)

98.5

794

Installation of solar (PV) power
generation system (Okayama Plant)

14,428Recycling ratio (right scale)

(t)

50

46.0%
0

7,791020182019202020212022(FY)

The data covers Sansha Electric Manufacturing Co., Ltd. and its group companies basedin Japan.

Efforts to efficiently use water resources
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030(FY)

In FY2022, the CO 2 emissions of the Group as a whole increased year on year to 10,064 t-CO 2 . Factors for theincrease were 1 an increase in energy consumption associated with the production volume and2 the worsening of the CO 2 emission factor of Chugoku Electric Power.

We are planning to make capital investments to accelerate thereduction of CO2 emissions.
I nstallation of solar (PV) power generation
system at the Okayama Plant
Replacement of the gas air-conditioning systemat the headquarters with an electric system
Replacement of the air-conditioning system atthe Okayama Plant

Further, we plan to reduce emissions by promoting initiatives
including process improvements in the manufacturing
department, the company-wide improvement of efficiency, andaddition and revision of reduction items based on the latest
environmental technologies.
In addition, to set a reduction target for Scope 3 CO2emissions, we are working to understand the current situation.

In recent years, we have seen various problems related towater occur, including water shortages attributed to droughts
associated with climate change and flooding damage. The
semiconductor manufacturing process necessarily consumesa vast amount of pure water for the removal of etching andcleaning chemicals and the cooling of equipment. At theOkayama Plant, we are striving to reduce water consumption
by setting a reduction target for water consumption per wafer
production volume, with the goal of promoting the efficient use ofwater resources.
In FY2022, water consumption increased due to the increaseof production volume, but consumption per wafer decreased.

Water consumption
Industrial water(1,000 m )

25

23

21

21

3.5

3.9

9.7
3.6

20
3.8

100

12.5

151.0

138.5

129.3

137.1

135.7002019

2020

20212022(FY)

Data is from the Okayama Plant of Sansha Electric Manufacturing Co., Ltd.

Achieving a departure from fossil fuels

45

Water usage intensity (Right scale)(m3/wafer)

25200

2018

The Okayama Plant accounts for approx. 80% of the entire
Group’s total power consumption. At the plant, we have replaced
the lighting system with an LED lighting system and introduced
an Energy Management System (EMS). In addition, of two
cleanroom buildings (Buildings A and B) that consume hugeamounts of electricity because of the strict air-conditioning
management that is required, we improved the efficiency ofBuilding B’s outside-air-processing air conditioners by renovating
the existing heat source equipment (cold water chiller and steamboiler) to use a high-efficiency, air-cooled heat pump chiller and
we also introduced variableflow control. Further, wehave begun to use waste
heat from production
equipment to preheat andreheat outside air and weadopted a dry fog system
for humidity control, which
has led to the termination ofHigh-efficiency air-cooled modular chiller atsteam humidification, which
the Okayama Plant
was the greatest challenge.

Clean water (Left scale)3

We have expanded these initiatives to Building A. In FY2022,
we achieved a departure from fossil fuels by renovating theair-conditioning heat source equipment for the cleanrooms of
Building A.
Heavy oil consumption at the Okayama Plant (liters)
90,00083,55880,05175,028Initiatives for controlling water quality
Our Okayama Plant runs wastewater treatment facilities
to purify the wastewater from the manufacturing process anddischarge treated wastewater that fulfills our standards which
are more strict than specified in laws and regulations. To control
wastewater contamination, we are working to reduce anddetoxify hazardous substances and to collect non-detoxifiablehazardous substances. We also inspect water quality regularly
and monitor wastewater quality.

Wastewater volume and chemical oxygen demand(COD) load
Wastewater volume (left scale)

COD load (right scale)(1,000 m3)

(kg)

200

300

267.8

245.4

224.3

222.3
197.2

71,210100

150

60,000

137.8

124.0

115.9

120.1

121.8

30,000
00

2018

9,676

2019

2020

2021

2022

(FY)

Data is from the Okayama Plant of Sansha Electric Manufacturing Co., Ltd.

02018

2019

2020

2021

2022

(FY)
Wastewater treatment facilities at the Okayama Plant

SanRex REPORT 202346