Sustainability Strategy

Core Competencies and Material Issues

Material Issues
The Oji Group has continuously been working on enhancing corporate value in the medium- and long-term by accurately responding
to ever-changing social trends and addressing the needs of customers and society. To develop the sustainable business model that
forms the basis of these efforts, material issues were identified in the following processes in 2019.
Furthermore, in response to the increasing demand for disclosure of non-financial information and developments in the internalsituation such as the formulation of Purpose, Long-term Vision, and Medium-term Management Plan, we reviewed our material issues
in 2023 to identify new definitions and components, and revised KPIs for human capital enhancement.
Process for Identifying Material Issues
Step 1

Identification of corecompetencies
Step 2Extraction of possible
issuesStep 3

Assessment andanalysis

Core Competencies
The Oji Group possesses Oji Forests spanning 603,000 ha domestically and overseas. As the Group engages in a cycle of cultivating forest
resources, utilizing them, and cultivating them again, we are developing a wide range of businesses without regard for business domain.
With these forest resources as our core competencies, we will aim to develop business and contribute to realizing a sustainable society.

Sustainable Forest Management
Giving due consideration to environmental conservation, the Group possesses production forests primarily for producing wood spanninga total of 455,000 ha, with 176,000 ha domestically and 279,000 ha overseas, as well as conservation forests spanning 148,000
ha, with 12,000 ha domestically and 136,000 ha overseas. Implementing sustainable forest management, which is environmentally,socially, and economically conscious, is ingrained in our businesses.

Validity assessment andapproval

Global Network and Sales
We are proactively developing our businesses on a global level, including our packaging business, which engages in the integrated
manufacturing of folding cartons and corrugated containers from base paper; as well as our household paper, thermal paper, pulp,
and other businesses. We are expanding our businesses in response to continuously growing overseas market needs.

Category

The Oji Group Integrated Report 2023

We verified the validity of the identified material issues and obtained approval at the Management
Meeting. The necessity of reviewing material issues is discussed at the Sustainability Committee
every year as we need to consider such issues as changes in the social environment and newly
emerged issues.

E

Material Issues

S
SocialDefinitions

Mitigation and adaptation
to climate change

Contribute to mitigation of climate change by reducing GHG emissions throughout the supply
chain and promoting CO2 absorption and fixation by forests.

Sustainable forest
management andbiodiversity conservation

In the forests we own and manage, practice sustainable forest management in harmony withthe environment and local communities, utilize forest resources, and achieve the multi-functionality of forests, including biodiversity conservation.

circular use of resources

To prevent resource depletion, promote the effective use of paper and water, which we viewas valuable reusable resources.

Reduction ofenvironmental burdens

Promote waste reduction and purification of wastewater and exhaust gases in the manufacturing process to minimize environmental impact on surrounding areas.

Respect for human rights

Do not tolerate human rights violations in any of our business activities.

Enhancing human capital

Secure and foster diverse human resources (human capital) necessary for sustainablegrowth. Establish an environment in which every employee can fully demonstrate their potential and work comfortably.

Environmental

Ensuring workplace safety
Ensure the safety and health of all employees and relevant persons.
and health

GGovernance85

We assessed each issue based on both social importance and business importance. The issues
were narrowed down and sorted out in reference to opinions from external organizations.

Material Issues and Definitions

Development of New Materials Derived from Wood
Aiming to create new value, we are developing new materials, including cellulose nanofiber (CNF), a promising material for numerous
fields; wood-derived biomass plastics; and wood-derived pharmaceutical products using hemicellulose.
Application of Fundamental Paper Manufacturing Technologies
Utilizing the fundamental technologies we have cultivated in our paper manufacturing business, we aim to expand our businesses
in various fields which will help reduce our environmental impact. This includes developing our renewable energy business with afocus on hydroelectric power generation and wood biomass power generation, industrial water production, and industrial wastewater
treatment businesses.

We extracted issues comprehensively from SDGs, global risks, the assessment made by ESG assessment organizations, important matters recognized by the Group, our goals and dialogue withstakeholders.

Sustainability Strategy

Utilization of Renewable Resources
We promote recovered paper recycling. The recovered paper makes up about 60% the raw material of the paper. We also thoroughly
circulate and reuse the water that is essential to paper manufacturing in our production processes, and create systems for reducing
the amount of water used and purifying wastewater in a sophisticated manner.

Step 4

We identified five core competencies to support our business development centered on forest resources.

Responsible raw materials In the supply chain for procurement of all raw materials, pay close attention to environmental
procurement
and social issues, including human rights, and address them responsibly.
Supply of safe and secure
products

Supply safe and secure products worldwide.

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Sustainability Strategy

Material Issues and KPI

Category

Material issues

Mitigation andadaptation toclimate changeE
Environmental

Properly manage and conserve forests
Utilize forest resources
Promote conservation of biodiversity andecosystem
Build relationships with local communities

circular use ofresources

Promote utilization of recovered paper
Reduce water risks(promote water recycling, etc.)

Respect forhuman rights

SocialReduce GHG emissions(Scope 1, Scope 2)
Absorb and fix CO2 by forests
Reduce GHG emissions throughcollaboration with suppliers(Scope 3, etc.)
Increase the usage of renewableenergyImprove energy efficiency

Sustainable forest
management andbiodiversity
conservation

Reduction ofenvironmental
burdens

SComponents

Enhancing humancapitalEffective waste utilization
Purify wastewater
Purify exhaust gases

Consider human rights in all businessactivities
Consider human rights in the workplace

Improve work-life management
Enhance employees’ skills
Inclusion & diversity
Foster greater compliance awarenessPromote well-being of employees
Prevent occupational accidents

Responsible raw
materials
procurement

Environmental consideration in the
supply chain
Human rights consideration in thesupply chain
Compliance with laws and social
standards and fair trade

Supply of safe andsecure products

Stably supply products
Ensure product quality

G

Current value*1(Unless otherwise specified, for FY2030)

Reduce GHG emissions by at least 70%
compared to FY2018 (Scope 1, Scope 2)
GHG emissions reduction : 20%
Net increment in carbon stocks by forests : 50%
The actual carbon stocks in living biomass*2
expanded to at least 170,000 kt-CO2 (calculated value)

4.7%
11.8%
122,450 kt-CO2
54.7%

Improve energy consumption intensity by atleast 1% per year for the 5-year average

3.8% reduction(from FY2018 to FY2022)

Increase the rate of overseas forest certificationacquisition*3 (maintain the domestic rate at 100%)

Japan 100%, Overseas 94%

Expand overseas forest plantations to 400,000 ha

279,000 ha(Conservation forests 136,000 ha)

Recovered paper utilization ratio*4(Japan) : At least 70%

68.0%

Reduction of water intake intensity by at least
6% compared to FY2018

12.9% reduction

Improve effective waste utilization ratios*5
Japan at least 99%, Overseas at least 95%

Japan 99.4%, Overseas 83.4%

Reduce emission intensity for substances of environmental
concern in wastewater by 15% from FY2018

BOD: 35.1% reduction, COD : 10.0%reduction, SS: 24.0% reduction

Reduce SOx emissions intensity in exhaustgases by 15% from FY2018

15.4% reduction

Percentage of target people who get educationand training in human rights :
100%

95.6%
(2,566 participants fromJanuary to July 2023)

Total working hours: less than 1,850 hours(26 companies in the Main Office region in Japan)

1,830 hours

Percentage of male employees taking childcare
leave, etc.: 100% (16 companies in Japan*6 )98.8%

Percentage of female managers: at least 5.5%(16companies in Japan*6, at the end of March 2025)

3.6%

Percentage of female new graduates hired forgeneralist-track positions*7: at least 30%

37.7% (Joined the company onApril 1, 2023)

Employment rate of people with disabilities :at least
2.3% (81 companies in Japan*6, June 2023)

Six applicable Group companies inJapan*6 : 2.51%, 81 companies inJapan*6 : 2.20% (June 2023)

Participation in compliance meetings : 100%
(Oji Holdings and all subsidiaries in Japan)

97.2% (Second half of FY2022)

Achieve zero fatal and serious work-relatedaccidents*8 (each fiscal year)

Three accidents (from January
1 to December 31, 2022)

Lost time injury frequency rate*6:
50% reduction compared to FY2018 (0.89)

1.11 (from January 1 toDecember 31, 2022)

Conduct sustainability surveys on all main
suppliers*9

100% (Survey period :FY2020–FY2022. Follow-up
surveys to be conducted later.)
100%

GovernanceZero product liability accidents (each fiscal year)

Zero accidents*1 Aggregation period : Unless otherwise specified, from April 2022 to March 2023 or as of March 31, 2023. Boundary of data aggregation: Unless otherwise specified, Japanese and overseas consolidated companies*2 The actual carbon stocks in living biomass (CO2 tons)
Production forest : Actual merchantable volume at the end of each fiscal year x Biomass expansion coefficient x (1 + underground / above-ground ratio) x Wood density x Carbon ratio x CO2 conversion coefficient
Conservation forest : Remaining area at the end of each fiscal year x above-ground biomass of natural forest x (1 + underground / above-ground ratio) x carbon ratio x CO2 conversion coefficient*3 Forest certification acquisition rate : [Overseas] Area ratio in company-owned production forests, [Japan] Area ratio in company-owned forests excluding shared forests

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Value provided to society

Corresponding SDGs

Reference

16.5% reduction

Renewable energy usage rate of at least 60%
through reduction of coal consumption

Achieve full traceability based on the Wood Raw
Material Procurement Guidelines

Major initiatives

Reduce GHG emissions through improving production efficiency, savingenergy, and utilizing renewable fuel and waste fuelAbsorb and fix CO2 through sustainable forest management
Expanded use of non-fossil fuels and biomass fuels as alternatives tofossil fuelDevelop biomass power generation business
Develop eco-friendly products

Mitigation of climate change
Increase in the usage of renewable energy
Improve in energy efficiency
Enhancement of eco-friendly technologies

Forest management based on the “Sustainable Forest ManagementPolicy”
Maintain and expand the multi-functions of forests
Sustainable forest management such as promotion of forest plantationand conservation of company-owned forests

Conservation of biodiversity and ecosystem
Job creation
Employment, education, and medical support

Paper recycling (improve the recovered paper utilization ratio)
Reduce water intake and improve water recycling
Expand the water treatment business overseas

Mitigation of climate change
Reduction of waste
Contribution to the solution of the water shortage
issue
Safe water supply

Reduce and effectively use waste
Develop eco-friendly products and biodegradable materials
Set voluntary management values that are stricter than the environmental
regulatory standards
Purify wastewater and save emissions of chemical substances in exhaust
gases

Safety and health
Reduction of air and water pollution

P25-307.2,7.37.a

9.4,9.5

12.2

13.1,13.2
13.3

6.6

8.7

14.2

15.1,15.2
15.3,15.4
15.5,15.c

6.4,6.5

12.4,12.5
12.6

14.1

15.1,15.2
15.3,15.4
15.5,15.c

3.9

6.1,6.3,6.4

11.6

14.1,14.2
14.3

8.5,8.7
8.8

10.2,10.3
10.4

P31-34

P89-92P89

17.7,17.8

Formulate and implement the Oji Group Corporate Code of Conduct, theOji Group Behavior Standard, and the Oji Group Human Rights Policy
Perform internal audits and implement the whistleblowing system
Raise awareness of compliance and human rights through in-housetrainingAssess risks associated with suppliers’ respect for human rights
Implement human rights due diligence

Respect for human rights

Implement human resource strategies and develop human resources
Promote working style reforms
Promote diversity

Active participation of diverse human resources
Realization of innovation
Improvement in productivity

P93~94
5.1,5.4
5.5,5.c

P95-98
5.1,5.4
5.5,5.c

8.2,8.5
8.8

10.2,10.3

Sustainability Strategy

Ensuring workplace safety andhealthKey performance indicators (KPIs)

Establish safety and health management structures and promote activities
aimed for safety and healthThoroughly ensure safety in the handling of machines and equipment and in other operations
Promote safety education (introduce VR risk experience education, etc.)
Promote physical and mental well-being of employees
Create comfortable work environments
Respond to infectious diseases including COVID-19

Safety and health

Promote CSR procurement, taking into consideration the environment andsociety following the Oji Group Partnership Procurement Policy and theWood Raw Material Procurement Guidelines

Forms of responsible production and consumption
Protection of the rights of workers and reduction ofenvironmental impact throughout the entire
supply chain

8.7

12.1,12.4
12.6

15.1,15.2

Stably supply own products
Ensure safe quality design and management in compliance with relevantlaws and regulations and stricter voluntary management values
Provide customers with information on safety of raw materials(chemicals, materials)
Supply of FSCTM certified products (FSCTM C014119, etc.)

Supply of safe and secure products
Reduction of environmental burdens
Dissemination of eco-friendly technologies todeveloping countries

9.4,9.b

12.4,12.6

17.7

P99-100
8.8

P101-102P102*4 Recovered paper utilization ratio = Volume of recovered paper consumed ÷ Total volume of fiber raw materials consumed (total consumption of recovered paper, wood pulp, and other fiber raw materials)*5 Effective waste utilization ratio = (Amount of waste generated − Amount of landfill waste) ÷ Amount of waste generated × 100*6 For the calculation method, see P111.
*7 Percentage of female new graduates hired for generalist-track positions: Hired by Oji Management Office Inc. (excluding sports recruits)*8 Serious accidents : The Oji Group considers accidents of Class 3 or higher as per the Appended Table of the Enforcement Regulation of the Workers’ Accident Compensation Insurance Act to be serious accidents.
*9 Suppliers in top 75% of transaction amount

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