T OYO BO R E POR T 2022

T OYO BOR E POR T
2022
Year Ended March 31, 2022

TOYOBO CO., LTD.
Osaka Umeda Twin Towers South,
1-13-1 Umeda, Kita-ku, Osaka 530-0001, Japan
Telephone: +81-6-6348-3111
URL: https://www.toyobo-global.com/■ Corporate Sustainability Department
Telephone: +81-6-6348-3046
E-mail: sustainability@toyobo.jp

Disclaimer
This report contains forward-looking statements regarding the
Toyobo group’s plans, outlook, strategies, and performance.
These forward-looking statements are based on judgments
derived from currently available information. Accordingly,
please be aware that actual results may differ from theseforward-looking statements due to various risks anduncertainties. Factors that may affect our future outlook include
the economic environment in which we conduct our business,competitive pressures, relevant laws and regulations, changes
in product development, and exchange rate fluctuations.
However, the factors that could affect our forecasts include,
but are not limited to the above.

TOYOBO REPORT 2022
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For 140 years,
we have worked to realize aprosperous society.

The spirit of Jun-Ri-Soku-Yu (adhering to reason leads to prosperity), which was one of the mottos of our founder,
Eiichi Shibusawa, and subsequently became our corporate philosophy, has been the foundation for our growth.
The attitude that Jun-Ri-Soku-Yu represents—in terms of contributing toward solving various issues that haveaffected society at different times, seeking the prosperity of society, and the way that our company itself hasachieved growth—can be thought of as a forerunner of today’s concept of Creating Shared Value (CSV). Having
continued to embody this spirit, in 2022 Toyobo celebrated its 140th anniversary.

INDEX
Introduction
TOYOBO PVVs ・・・・・・・・・・・・・・・・・・ 001
New Corporate Logo and Business
Outline・・・・・・・・・・・・・・・・・・・・・・・・・ 003

Principle“Jun-Ri-Soku-Yu”(Adhering to reason leads to prosperity)

Our Vision

We will continue to create
the solutions needed by“Jun-Ri”

people and the earth with• Do what must be done (positive standpoint)• Don’t do what must not be done
(defensive standpoint)materials and science.

VisionCEO Message・・・・・・・・・・・・・・・・・・・ 005(Feature) Mitsubishi Corporation andToyobo Top Management Discuss the
New Joint Venture ・・・・・・・・・・・・・・ 009
Value Creation Process・・・・・・・・・・・・ 013
Sustainable Vision 2030 ・・・・・・・・・・・ 015
Six Types of Capital・・・・・・・・・・・・・・・ 017
Materiality・・・・・・・・・・・・・・・・・・・・・・・ 019
Strategy and Practice of Value Creation(Feature) Dialogue with ESG Investors・ 023

CFO Message・・・・・・・・・・・・・・・・・・・ 027
Disclosure Based on TCFD
Recommendations ・・・・・・・・・・・・・・・ 031
2025 Medium-Term Management
Plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 033
The Basis of Value Creation
Sustainability Management・・・・・・・・・ 042(Feature) From the KAERU Projectto KAERU ・・・・・・・・・・・・・・・・・・・・・・ 045
Environmental Policy and Activities・・・ 047
Social Contribution Policy andActivities ・・・・・・・・・・・・・・・・・・・・・・・ 059
Fire Prevention Measures ・・・・・・・・ 059
Response to the Quality-Related
Misconduct Incidents ・・・・・・・・・・・ 060
Governance Policy and Activities ・・・・ 075(Feature) Roundtable Discussion
with Outside Directors・・・・・・・・・・・ 075

Management Team and Skill
Matrix・・・・・・・・・・・・・・・・・・・・・・・・ 079
Corporate Governance・・・・・・・・・・ 083
Overview of FY2022
Key Events in Fiscal 2022・・・・・・・・・・ 093
Financial andSustainability Highlights ・・・・・・・・・・・ 095
Overview by Solution・・・・・・・・・・・・・・ 099
Key Financial Data
(FY2012–FY2022) ・・・・・・・・・・・・・・・・ 101
Reference Material
Investor Information andCorporate Data ・・・・・・・・・・・・・・・・・・ 103
Company History・・・・・・・・・・・・・・・・・ 105

Editorial policy“Soku-Yu”

Since 2019, Toyobo has issued an Integrated Report that presents both financial information and sustainability information such as environmental, social, andgovernance (ESG) related data. Through this Integrated Report, we aim to deepen understanding of the company among our wide range of stakeholders, including
our shareholders and investors. This report includes content that is focused on the Sustainable Vision 2030 and the 2025 Medium-Term Management Plan
(2025 MTP) formulated from this through backcasting, along with the views of top management, dialogue with investors, and a roundtable discussion with outside
directors. We have striven to ensure that this report will help readers to develop an understanding of Toyobo’s value creation from multiple perspectives.

• Adhering to “Jun-Ri” leads to a prosperous
society while also realizing self-growthThis is the founding spirit of our company
and is our belief.

Reporting entity:
Unless otherwise stated, the report refers to
TOYOBO CO., LTD. (non-consolidated basis), andreferences to “Toyobo” or the “company” mean
TOYOBO CO., LTD.
Numerical data in financial information is reported
on a consolidated basis.

Our Values

Reference Guidelines, etc.:• GRI “Sustainability Reporting Standards”• International Integrated Reporting Council (IIRC)“International Integrated Reporting Framework”• Ministry of the Environment “Environmental
Reporting Guidelines” (2018 versions)• Ministry of Economy Trade and Industry“Guidance for Collaborative Value Creation”

Reporting period:
April 2021–March 2022 (Partially includes
information dated after April 2022)
Published:
October 2022 (next scheduled publication:
September 2023)

We welcome change,
enjoy change,

Financial informationand create change.

Our website

TOYOBO Spirit Our 9 Commitments
Challenge

Reliability

Collaboration

Investor Relations

Annual Financial Report

FACT BOOK

Here, we bring together investor relations(IR) materials such as financial results,
annual financial reports and businessresults presentations for the benefit ofshareholders and investors. We alsopresent an overview of the company’s
current financial status and businessperformance, stock information, an IR
calendar, and a FAQ, etc.
https://ir.toyobo.co.jp/en/ir.html

Prepared in accordance with therequirements of Paragraph (1), Article 24of the Financial Instruments and ExchangeAct, the Annual Financial Report presents
a summary of the company’s current
situation, details of its business areas, thecurrent state of its facilities, its operational
status, and its financial statements, etc.
https://ir.toyobo.co.jp/en/ir/library/
securities.html

The FACT BOOK presents key financial
data, for both the company as a whole andindividual segments, covering a period of
11 years. It also presents non-financial
data covering a period of five years.
https://ir.toyobo.co.jp/en/ir/
library/fact.html

TOYOBO REPORT(Integrated Report)

Sustainability-related Information
Our website

Think Ahead

001

CreateTOYOBO REPORT 2022

Accomplish

SafetyFirst

Customer
Satisfaction

FactualBasis

MutualDiversity
Communication

ProvidingOpportunities

Sustainability

Sustainability Reports

Corporate Governance Report

Here, we present information about
Toyobo group’s ESG-related initiatives,
along with relevant data.
https://www.toyobo-global.com/
sustainability/

PDF versions, compiled in November
each year, of sustainability-related
information posted on the company’s
websitehttps://www.toyobo-global.com/
sustainability/report/

This report presents information about
Toyobo group’s approaches and systems,in accordance with Japan’s Corporate
Governance Code.
https://ir.toyobo.co.jp/en/ir/library/
governance.html

This report outlines our company’svalue creation-oriented growthstrategy, and presents an overview ofour business operations. We actively
utilize this report as a tool for dialogue
with shareholders, investors and otherstakeholders.
https://www.toyobo-global.com/susta
inability/report/

TOYOBO REPORT 2022002

B eyo nd Horizons
Our new corporate logo and tagline
In our new logo, the wash of black represents outer space, andthe blue-colored area represents the outline of the Earth. The logo
represents our strong determination to use our company’s
technologies and products to help address the problems affecting
the Earth. The tagline Beyond Horizons embodies the concept ofgoing beyond what we have already achieved and making further
progress. This is the motto of our whole company, including bothofficers and ordinary employees, which reflects our commitment:“While working to solve the world’s problems, we can expect toencounter difficulties, but limits are there to be overcome. Looking
ahead to the future, let us continue to challenge ourselves.”

Solution-Specific Product Case Studies

Net Sales by Solution Division
Others 3.1%

Life Science• Bio-related reagents• Medical membranes• Medical equipment

Related sales¥

35.0 billion

Lifestyle andEnvironment• Desalination membranes• VOC treatment equipment

Films andFunctional Materials• Packaging films• Industrial films• Photo-functional materials

9.3%

Protecting lives in accidents

Eliminating water shortages

Speeding up diagnostics

LCD film with more natural color reproduction

Airbag yarn and fabrics

RO membranes for seawater desalination

SARS-CoV-2 Detection Kit

Food loss reduction

Improving automobile fuelefficiency

Balancing air pollution prevention
and resource recovery

Shortening operation times andreducing the burden on patients

Transparent vapor-deposited film ECOSYAR®

Engineering plastics

VOC recovery equipment

Nerve regeneration conduit Nerbridge®

Recycling and resource
conservation

Creating future mobility

Providing comfort and security

Supporting the lives of dialysis
patients

Film of recycled PET resin CYCLE CLEAN®

Manipularer® concept car

Three-dimensional cushion material
BREATHAIR®, Electret air filter ELITOLON®

Artificial kidney hollow fiber membranes ofstable and reliable quality

Related sales

30.4%

Sales
Ratio

45.3%

¥

170.3 billion(FY2022)

Mobility

11.9%• Engineering plastics• Airbag fabrics

Related sales

Related sales¥¥

114.3 billion

Improved LCD screen
performance

44.7 billion

Note: Names followed by the ® symbol or by “TM” are registered trademarks or pending trademarks respectively in Japan of TOYOBO CO., LTD.

003

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The Basis of
Value Creation

Overview of
FY2022

Reference
Material

CEO Message
integrating marketing concepts and digital technology toformulated by projecting how the business environment will

our core technologies, such as polymer, bio / medical,

evolve in the next 10 years under the various environmental

environmental, and comfort design to generate innovation

changes and issues. That projection became the basis forthat will address the social issues.

the “five social issues” that the group will focus on solving,Society is at major turning point. We anticipate abusiness environment characterized by dramatic, massrights for people throughout the supply chain andscale, and discontinuous change. Evolving personalrealaizetion of a decarbonized society. Toyobo Vision 2030

values, changing business activities driven by digitalis to usher in both a prosperous society where people cantransformation, and growing demand for carbon neutrality

live with peace of mind, and the enhancement of corporate

and a circular economy are just a few of the manifold

value, through addressing those issues.

changes that are having a major influence on corporate

I would like to add that, as a corporate executive, I

management. Change brings risk, but it also opens new

know that it is always the worksites that are leading ouropportunities to contribute to society and grow ourbusiness. Worksites encompasses not just thebusiness. We will deal with discontinuous changes in our

manufacturing sites, but also the R&D centers, the sales

business environment by following our Jun-Ri-Soku-Yu

departments, and the corporate departments. Being a

corporate philosophy to “do what must be done.” Bycompany where each and every employee works with adoing that, there is no doubt that we will be contributing

sense of pride and purpose is fundamentally essential toto a prosperous society where people can live with peaceachieving sustainable growth. The employees at ourof mind and increasing the group’s corporate value.

worksites are naturally the central players in the long-term
vision. The long-term vision shows clearly the company

Ikuo Takeuchi
President & Representative
Director, CEO & Co-COO

what we want to be and the areas we want to contribute.

Formulating the long-term Vision 2030

Sustainability-oriented management

Adopting a sustainable growth mindset

meaning to the work each of us is doing so we can all
make the vision our own.

Vision 2030 (long-term vision) and the 2025

2025 Medium-Term Management Plan

founder Eiichi Shibusawa. The fire accidents and

MTP) showing what we want the group to be in 2030.

quality-related misconduct incidents in recent years,

Sustainable Vision 2030 incorporates the long-term

however, have shaken the trust in the group. Currently,

perspective that has lacking in our management

We launched the 2025 MTP in April 2022 as the first step

Toyobo celebrated the 140th anniversary of its founding

we are radically revising and overhauling our safety,

approach. The long-term vision, which is subtitledtoward our long-term vision. The plan covers the first fouron May 3, 2022. We would like to express our gratitude

disaster prevention, quality assurance, and other systems“Realizing sustainable growth,” expresses our firmof the nine years to 2030, which we are calling “Four years

for the unfailing support and cooperation of ourto reestablish solid trust in all of our companies.

commitment to conduct management that is centered on

to rebuild and prepare” (the next five years will be the “Five

Conditions for corporate continuity

Four years to rebuild and prepare

customers, employees, business partners, local

Throughout our history, we have addressed thesustainability. We are shedding the short-term survival

years to achieve growth”). The current plan has four corecommunities, shareholders, and all stakeholders.

social issues of the age by always endeavoring into newmindset that characterized our culture during the many

initiatives: establish thorough safety, disaster prevention,

I believe the group’s success over nearly a century andbusiness fields, developing new products, and changing

years of structure reform and making a dramatic shift toand quality assurance, reorganize the business portfolio,

a half arises from three key factors. First, we earn the trust of

our business content to create the “new” that is neededfocusing on sustainable growth.

prepare for the future, and rebuild the foundation.

society. Second, we modify our business content and createby society and the times. The roots of our bio / medical

new products matched to the changes in the businessgo back 50 years to when we first began developing

framework we created in fiscal 2019 presents our vision

portfolio over the past several years. To enhance

conditions. And third, we have an organization and people

technologies for air and water in what we now call ourto “continue to create the solutions needed by people

management effectiveness, all businesses have been put

with the capabilities for business execution and reform.

environmental solutions business. Those activities seemand the planet with materials and science.” The newly

into the category of either profitability or growth potential

The TOYOBO PVVs corporate philosophy

Management has been reorganizing the businessprescient given the growing importance of thosecreated the long-term vision further clarifies our vision by

and then stratified into four levels of businesses focusingbusiness on addressing social issues following thebusinesses today. We are now establishing a firmtaking a global perspective on sustainability andon expansion, new businesses to be developed,

corporate philosophy of Jun-Ri-Soku-Yu (adhering tofoundation of safety, disaster prevention, quality, humanpresenting a focused image for how and in which fields

businesses with stable earnings, or businesses requiring

reason leads to prosperity), which was a motto of ourcapital, and intellectual property. On that base, we are

we will contribute to sustainability. The vision was

improvement. The films, life science, and environment

Since its founding, the group has been focusing its

005

Linking the work in front of us to company’s future gives

In May 2022, we announced the long-term Sustainable
Medium-Term Management Plan [FY2023 -2026] (2025Management approach

which include healthy and comfortable spaces, human

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VisionStrategy and Practiceof Value Creation

The Basis of
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Overview of
FY2022

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Material

CEO Message
and functional materials businesses are categorized aslaunched a greenhouse gas emission reduction plan

Meanwhile, the change of the corporate culture willbusinesses focusing on expansion, and we plan to

aimed at achieving carbon neutrality in fiscal 2051. In

continue. For the past year, I’ve been encouraging open

allocate roughly 70% of growth investment to those areas

May 2022, we increased our emissions reduction target

communication where people can talk casually but

and to strengthening our competitive advantages in theirfor fiscal 2031 to a reduction of at least 46% in Scope 1

frankly about company matters. We are creating anmarkets. In the films business, for example, we are

and 2 emissions versus fiscal 2014. We haveatmosphere where people at the worksites feel they canaiming to become the world’s leading manufacturer of

implemented several energy-saving measures andspeak out and know that they will be heard. I personallyeco-friendly “green” films. To attain that goal, we are

improved the energy efficiency of our manufacturing

enjoy these discussions and joined about 20 of them thisinvesting in new production lines for films used inoperations. In April 2022, we introduced an internal

past year. I believe these opportunities to express

multi-layer ceramic capacitors (MLCCs), which we

carbon pricing program. We have also converted our fuelthemselves can help employees become more aware of

anticipate will be a growing market. We are also

sources to fuels with lower carbon contents and havetheir roles in the company, create stronger connections

expanding our domestic and overseas production of gas

been procuring and using renewable energy. We are also

among people, and help create pleasant environments

barrier films, which help reduce food loss.

planning additional measures to strengthen our climate

where people work with pride and satisfaction.

We have also categorized some operations as
businesses requiring improvement, and are moving

2051, including converting to carbon-free fuels,

swiftly to implement master plans to bring the businesses

electrifying our production processes, increasing our

New joint venture with Mitsubishi Corporation

Toyobo group. Collaborating with a trading company

up to standard. Also in this category is the environmental

procurement of renewable energy, and introducing afrom a completely different industry will give us

and functional materials business, which had been

carbon offset and carbon-negative program.

Fostering a third-pillar business and a
growth mindset

previously categorized as a business generating stable

We will also be “remaking” the group by overhauling

opportunities to come in contact with viewpoints andbusiness management methods that we may have been

earnings. We changed the categorization a businessthe group infrastructure and methodically addressing

As part of the growth strategy of the 2025 MTP, we areoutside the scope of a manufacturing company like ours.

focusing on expansion and took a major step to improveaging equipment and facilities. We are planning roughly

preparing to split of our environment and functional

I am particularly looking forward to opportunities tothe operation by creating a new joint venture withdouble the amount of capital investment under thematerials business and establish a new joint venture withexpand into overseas markets and develop new business

Mitsubishi Corporation that we expect to provide acurrent plan compared to the previous plan. The

Mitsubishi Corporation. Scheduled to commence

models.

substantial boost to the business around 2030.

investment is aimed at rebuilding the foundations of ouroperations in 2023, the new company will engage in the

As we prepare for the future, we will be placing

business and will include investing ¥115 billion in growth,planning, development, manufacture, and sale oftechnological advantages over its 140-year history. As weparticular emphasis on open innovation. We believe it will

¥92 billion in core system and infrastructure maintenanceenvironmental solutions equipment, aqua membranes,

look to the future, I believe we must formulate a “newbe essential to cooperate and collaborate with various

and upgrades at our manufacturing sites, and ¥33 billion

super fibers, functional filters, engineering plastics,

growth mindset” with new marketing concepts andpartners to accelerate the spread of our technologies andin environmental improvements, such as safety and

VYLON®, HARDLEN® and other items, which currently

entrepreneurship so we can take full advantage of thestrengths and also to address the increasingly diverse

disaster prevention, energy conversion, and energy

generate combined annual sales of roughly ¥100 billion.

opportunities in our changing world and transform themand complex social issues. We are therefore looking for aconservation.

We have made great strides in our film and life

into dramatic growth for the group. This collaboration

wide range of partners among other companies, among

007

change countermeasures to meet our goals for fiscal

The company “foundation” that I consider the most

The Toyobo group has cultivated a wealth ofscience businesses in the past several years. However,presents a golden opportunity to do develop thisuniversities and research institutes in academia, and also

important is our worksites or, more specifically, ourtheir overall performance has stagnated. The businesses

mindset, and I am certain it will lead to a new model foramong startup companies both in Japan and overseas.

people. I also consider one of my primary imperatives tounder the heading of “environment and functional

business growth.

With these partners we will seek to engage in open

be to create a work environment where every Toyobo

materials” have used their highly original technologies andcollaboration in pursuit of innovation while also seeking togroup employee feels a sense of pride and purpose inproducts to carve out their own markets and generatea prosperous society where people can live with peace of

create and provide new value. Recent initiatives in thistheir work and can fulfill their potential. One step we havestable profits. Nevertheless, the market is such that wemind, and the enhancement of corporate value, throughdirection include comprehensive agreements signed withThe Toyobo group is aiming in 2030 to usher in bothtaken is to introduce a new human resource system inare not likely to be able to generate significant growth

addressing those issues. In short, we aim to be a

Kobe University in April and with Osaka Metropolitan

fiscal 2023, which was first major overhaul of the system

without a partner. We have a multitude of decarbonization

sustainable company contributing to the sustainability of

University in June of this year. We will be advancing joint

in some 20 years. The new system is designed toand other products that contribute to a sustainable

society. We will “welcome change, enjoy change, andresearch in the Life Science field and in membrane

encourage and support employees to take their own

society, and collaborating with Mitsubishi Corporation

create change” and commit ourselves to “doing what

technology that will help realize carbon neutrality while

initiative for personal transformation. The system will

provides the potential to grow the business into a thirdmust be done.”

also exploring the potential for collaboration in various

facilitate strengthening the onsite capabilities of ourpillar alongside the film and life science businesses.

We would like to ask our stakeholders for theirother fields.

continued understanding and support for the group.

manufacturing operations by promoting group-wide

Establishing the new joint venture has another

Another major way we will be preparing for theactivities aimed at establishing worksite-led production

important objective. We want the fusion and innovation

future will be initiatives related to climate change and toinnovation and by offering more education programs forthat come from melding with a completely different

realizing a carbon-free society. In fiscal 2022, we

engineering and on-site leaders.

corporate culture to act as a catalyst for change in the

TOYOBO REPORT 2022

President & Representative
Director, CEO & Co-COO

TOYOBO REPORT 2022008

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
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Reference
Material

Visionpartner with strong businesses to try and compete inbehind our decision to go ahead with the plan.

global markets.

Takeuchi Our objective in creating the new company,

In addition, we wanted to not only generate profit,

as we state in our 2025 MTP is to develop environment

but to also fulfill our duty to create a sustainable

and functional materials business into a third pillar of

business that would contribute to society and protect

earnings and our next growth driver. One expectation I

the environment. I told you our idea and said perhaps

have for the JV is that it will provide an outsidewhat our company was thinking was quite close to whatperspective on Toyobo’s business approach andToyobo was thinking.

practices, so we can reexamine them and create more

Takeuchi At the time, I was Controlling Supervisor of

added value. The benefits of the JV are not only from the

Corporate Planning Division, not yet CEO, and we had

new company, but also from the positive effects that canjust started putting together the Sustainable Vision 2030

reverberate throughout the Toyobo group.

Ikuo Takeuchi

Kotaro Tsukamoto(long-term vision) and 2025 Medium-Term Management

President & Representative
Director, CEO & Co-COO
TOYOBO CO., LTD.

Group CEO, Industrial Materials Group
Executive Vice President
Mitsubishi Corporation

Plan [FY2023-2026] (2025 MTP), both of which we

also open doors for more options to develop our overall

announced in May 2022. We were deep in discussions

business in many areas, such as procurement,

about how to base them on our corporate philosophy ofenvironmental measures, and business expansion

Jun-Ri-Soku-Yu, which means adhering to reason leads

overseas. I see the connection with Mitsubishi

to social prosperity. Right at that time, your company told

Corporation as a major intangible asset that will

us that our products can play a greater role in society,undoubtedly enhance our ability to respond to thewhich reminded us of our company’s existence value.

changes in society over the next 10 and 20 years.

SpecialFeatureMitsubishi Corporation and Toyobo Top
Management Discuss the New Joint VentureThis partnership with Mitsubishi Corporation could

Tsukamoto The business environment for the materials
field is changing dramatically with the transition to

Mitsubishi Corporation and Toyobo are joining forces with a new company aimed at capturing the
global market growth. Kotaro Tsukamoto, Mitsubishi Corporation Group CEO and head of theIndustrial Materials Group, and Toyobo CEO Ikuo Takeuchi talked about the process leading to
the partnership and their vision of the new company’s future.

electric vehicles requiring lighter materials andmovement in society to become carbon neutral. We areresponding by constructing a resilient managementfoundation, setting up an unconventional businessTsukamoto The Industrial Materials Group needed tomodel for co-creation, and pursuing global alliances—all

implement significant changes, and we engaged inof which will contribute to increasing the overall global

numerous discussions before making the decision tocompetitiveness of the Japanese materials industry.

establish the joint venture (JV). We also asked

Takeuchi Our materials technology offers highly

been involved in for over 20 years but we were just notourselves, what functions can we offer Toyobo? andcompetitive environmental performance. Together withable to achieve significant growth. As we talked about

can we play a meaningful role in raising the company’s

Mitsubishi Corporation’s vast network, I would like to

Tsukamoto We approached Toyobo three years ago

ways we could collaborate, we realized that working

corporate value and bring about the change that willbuild the JV into a global player.

about the prospect of creating a business together.

together could create huge potential for the business.

elevate it to the next stage that you envision?

Tsukamoto To do that, we want to start with the small

What was your initial reaction when we brought up

Tsukamoto At that time, our company had justthe idea?

New joint venture that enhances
both company’s value009

Fresh insight from an external
perspective triggers change

across a broader range of businesses.
There was one business in particular that we had

At the same time, we looked at what we had todetails, such as refining the business processes, and let

transitioned to a new group structure. The Industrial

offer. Our extensive knowledge as a general trading

the business develop to generate good synergy effects.

Takeuchi I remember that we originally talked about

Materials Group had been established about six

company could help give the JV a strong management

Takeuchi The JV will be a major change for Toyobo,

possibly doing one business together. Later as wemonths earlier, and we were looking for ways to growfoundation, and our worldwide network could maximize

since we will be transferring roughly 25% of all of ourcontinued talking and you saw our wide variety ofour business. We had always been a trading businessthe multiplying effect with Toyobo’s technology forbusiness into the company. Some employees may feel

products, the discussion expanded to a collaborationand invested in related businesses, but we wanted tobusiness growth overseas. Those two points weresome apprehension about that, but if we can start

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VisionThe Basis of
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Overview of
FY2022

Reference
Material

accumulating successes -even just small successes-

and the second is to improve the sustainability of

have survived this long because we have always lived up

Corporation’s approach to its manufacturing businesses

I think everyone will see that the plan is working and getsociety. We believe contributing to the sustainability ofto the reliability society puts in us and because we haveshare the same principles and underlying premises.

behind it. That’s why the first three to six months will besociety will underpin the sustainability of our company.

evolved our business as the world has changed. For our

We believe the JV embodies that concept. The

business to evolve, we had to be continuously creating

critical.

Becoming the “first call” fordomestic and overseas customers

Tsukamoto I agree. Building a track record ofcompany will be engaging in the environment andsomething new. With the new JV, we intend to create asuccesses will be essential. I also think it will befunctional materials business and will focus on creating a

new second business that is new in every aspect fromimportant to create a sense of anticipation.

lineup of products that contribute to resolving thebusiness and technology to human resources.

Mitsubishi Corporation currently has roughly 100

environmental issues that society is now facing. So

Tsukamoto Taking on new challenges is absolutely

so-called consolidated companies just in the Industrial

helping address the problems the world is facing will

essential. I strongly convey to our employees that we will

Tsukamoto Starting with the concept what kind ofMaterials Group. Of course, not all of them are growing,

generate growth for the new company and, when it

certainly sometimes fail, but we should learn from ourcompany we want the JV to be in the future, we are

but the ones that are doing well seem to have frontline

grows into a third pillar of earnings, will lead to thefailures and move on to the next challenge. I definitely

asking what our goals should be and how will we achieve

employees that are excited about their work.

growth of Toyobo.

want to pass on that spirit to the new JV.

them. From there we will set the management plan and

Takeuchi That sense of nervous excitement andTsukamoto That aligns perfectly with our company’s

Takeuchi That is correct. In my discussions with yourdraw up rules for the daily operations. That’s all ahead of

anticipation that comes with change is really important.

way of thinking and core essence. We want to build acompany, I feel the strong desire and commitment tous, but right now everyone in our group is very excited

The chance for younger employees to work side by side

third pillar of earnings by creating businesses thatgrow. Your company has taken on numerous

about the potential. I am looking forward to getting thewith everyone at Mitsubishi Corporation to tackle theprovide solution for various social issues.

challenges. Our company has finally stabilized after

business up and running as quickly as possible.

new challenge will be a particularly good experience thatcoming through a rough period when we were fighting

I want to create a company that everyone knows thatwill become an asset for our group in the future.

for our survival, and we could easily get stuck with an

wherever they go in the world, if you contact that company

attitude of “we’re fine as we are.” I hope that yourthey will provide the functional materials you need.

company will provide a positive stimulation so we canTakeuchi It truly will be “the company you call first.”

A shared vision to grow bycontributing to solving social issues

Injecting a market perspective, spiritof taking on new challenges, and astrong commitment to growth into
the Toyobo group

Tsukamoto We also announced a three-yearchange that mindset.

Most of the employees at the JV are from ourgroup, so we are the ones who must take the initiative.
We cannot passively wait for Mitsubishi Corporation to

Safety and compliance areabsolutely fundamental

bring in business ideas. It’s essential that we actively

medium-term management plan in May 2022, which

Tsukamoto One more objective I have for the joint

centers on what we call “MC Shared Value” (creating

venture is to take the businesses that have establishedshared value). The plan highlights our message that we

steady earnings in the Japan market, and to steadily

are going to put all of the MC Group’s energy into

expand them overseas. My biggest dream is to grow the

Tsukamoto Our group is a trading company, but we

The ultimate key to making the company a successaddressing social and industrial issues and continuously

JV into the first company that our customers contact toalso have some manufacturing businesses, so safety

will be each employee’s individual engagement. I would

create shared value. This is precisely what we are trying

meet their needs.

and compliance are the top priorities. In my view, they

like our employees to work with the attitude of “welcome

to do with the creation of the new joint venture.

Takeuchi The Toyobo group generally approaches

are non-negotiable.

change, enjoy change, and create change,” which is

Takeuchi Yes, that is absolutely true. I’ve been looking

business by thinking about the technology, but we needTakeuchi That will surely provide peace of mind to theone of our group values. I look forward to our groupat your company’s advertisements and other materials

to change that and get into the habit of thinking from aemployees at the worksites. During the four years of theemployees and everyone at Mitsubishi Corporationand thinking about various ways we can put Toyobo

market perspective. I think that may be a crucial point

previous medium-term management plan, our group

working together to make this venture a success andtechnology to use.

for the management of the new company.

had two fire accidents and we lost two colleagues. We

achieve growth. Thank you for talking with me today.

also had quality-related misconduct incidents. The entire

Tsukamoto Thank you very much.

In our long-term vision, we state that we are aiming

011

Strategy and Practiceof Value Creation

When we celebrated the group’s 140th anniversary

boundaries and be actively pursue ideas as a single
company.

to “Realizing sustainable growth.’’ We hear that term ain May 2022, the message I conveyed to employees

company is now working to restore reliability andlot these days, but we actually mean two separate

was that it was not by chance that the company hasreestablish unwavering trust in our company. I believe

sustainabilities. The first is to be a sustainable group,

been around for 140 years, rather it was inevitable. We

that what Toyobo is aiming for and Mitsubishi

TOYOBO REPORT 2022

work together with your company to go across

TOYOBO REPORT 2022

012

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

VisionValue Creation Process
Our value creation process takes the TOYOBO PVVs corporate philosophy framework as its starting point, anddemonstrates how we use various types of capital to create value and increase value for all stakeholders.
Through this process, the Toyobo group aims to accumulate and convert capital to continue creating “thesolutions needed by people and the earth.”Why are we doing what we do?

Values & Principle

What are we working to achieve?

Outcomes (Sustainable Vision 2030 targets)
People: Contributing to solutions for social issues in ahumancentric way
Employee well-being and human rights in the supply chain

▶

p.001

• People First: employee safety,
company pride and rewardingwork• Respect for human rights
across the entire supply chain

An employee
engagement score ofover 70%

How are we going to achieve our goals?

Outputs

Business activities

Accumulation of various types
capital through businesses• Mold releasing film for
MLCC• Transparent
vapor-deposited film

Inputs• Laminate film for steel plates

CapitalFilm• Eco-conscious films

Financial capital
A healthy lifestyle and health care

Ideals we seek torealize
To be a group that
continually createsmaterials and sciencethat become solutions
for people and the planet• Contributing to the field of
epidemiology• Helping to improve quality of life

10 million annual
tests conducted throughthe provision of diagnostics ofinfectious diseases

Manufacturing capital• Infection diagnosis-related
products

Intellectual capital
Human capital• Artificial kidney hollow fiber• Virus removing filters

Smart communities and comfortable spaces• Contributing to the realization ofa humancentric digital society• Creating comfortable spaces

Total sales of car cabin air

Social / relationship capital• Blood purification
membranes

Natural capitalLife Sciencefilters: 1.2 million units

Six Types ofCapital▶

p.017

Company
History▶

p.105• Engineering plastics

Sustainable Vision
2030
Realizingsustainable growth
Ushering in both aprosperous society
where people can livewith peace of mind, andthe enhancement ofcorporate value
▶

p.015

Planet: Contributing to solutions for social issues inconsideration of the entire Earth• VOC treatment equipment• RO and FO membranes• High-performance fibers

A decarbonized and circular society• Contributing to carbon
neutrality• Establishment of an ecosystemfor circulating resources• VYLON® and HARDLEN®

Ratio of GHG emissions
reduction in Scope 1 and 2:

Environment andFunctional Materials

over 46% compared with
FY20142025 Medium-Term Management Plan

▶

p.033

Digitaltransformation

Materiality

▶

p.019

New business

Sustainability Management

▶

p.042

Clean water areas, air and soil, and the preservation of biodiversity• Improving the environment
through solutions• Food loss and waste reduction
and sustainable foodSales volume of highly functionalfilms that contribute to reducing
food loss and waste:

Fourfold increaseover FY2021

Conversion to capital by internalizing the external economy and other methods

013

TOYOBO REPORT 2022

TOYOBO REPORT 2022

014

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

VisionSustainable Vision 2030
Toyobo has formulated Sustainable Vision 2030 in May 2022 to achieve sustainable growth while moving away

Sustainability goals by social issue

from survival thinking that overemphasizes short-term results. Through innovation and the 3Ps (people, planet,and prosperity), we aim to usher in both a prosperous society and the enhancement of corporate value by making

Five social issues

contributions to solving social issues.

“Jun-Ri-Soku-Yu” : adhering to reason leads to prosperity
Ideals we seek
to realize
Social change
and trends in2030

To be a group that continually creates materials and sciencethat become solutions for people and the planet

Innovation
Standardization in handlingsafety, human rights andsocial justice issues

Increased and diversified
needs concerning access to
medical care/health promotion

Demographic changes,
humancentric innovation,
accelerated urbanization

PeopleEmployee well-being andhuman rights in the
supply chain

Decarbonization,
resource circulation,
limited natural resources

A healthy lifestyle andhealth care

PlanetEmployee well-being and humanrights in the supply chain

1 • People First: employee safety, company pride and rewarding work
• Respect for human rights across the entire supply chain

Social issues
to be solved
throughcommitment

A healthy lifestyle and health careto the field of epidemiology
2 •• Contributing
Helping to improve quality of life

Smart communities andcomfortable spaces

Smart communities and comfortable spaces

to the realization of a humancentric digital society
3 •• Contributing
Creating comfortable spaces

Goals forthe future

4

A decarbonized and circular society• Contributing to carbon neutrality• Establishment of an ecosystem for circulating resources

Clean water areas, air and soil, and thepreservation of biodiversity

5 • Improving the environment through solutions• Food loss and waste reduction and sustainable food

Prosperity

A decarbonized andcircular society

015

TOYOBO REPORT 2022

■ Sustainability Indicators■ Financial Indicators

zero

Serious incidents

Consolidated sales

600 billion yen

Employee engagement scoreover 70%

Operating profit margin over 8.3%

GHG emissions cut (over FY2014)
Scope1 and 2

over 46%
Carbon neutrality in FY2051

ROE

over 9%Ratio of green materials in main business operations**In reference tofilm business

ROIC

over 7%60%•Achieving zero accidents in workplaces•Certified as a top tier company for Outstanding Health and Productivity
Management by FY2026•Engagement score: over 70%•Respect for human rights across the entire supply chain•Expanding and improving educational and training systems for employees•Number of tests conducted by the provision of infectious disease diagnostics, etc.:
10 million per year
•Number of dialysis patients receiving Toyobo dialysis membranes: 250,000•Share in the market of raw materials for biochemical and other tests: 30%•Number of patients provided with Toyobo regenerative inducers:
100,000 per year
•Proliferation and expanded sales of 3D network-structured fiber materials
in the medical and nursing care fields•Sales of product groups supporting DX: 1.5-fold increase over FY2021•Total sales of car cabin air filters: 1.2 million units•Creation of a comfortable space inside electric vehicles throughsound and heat management(A decarbonized society)•Ratio of GHG emissions reduction in Scope 1 and 2: over 46%
compared with FY2014
Net zero in FY2051
Avoided emissions > Amount of GHG emissions throughout the entire value chain•Entry into new solution fields
Osmotic power generation, offshore cables and insulating
resin for wind power generation, adhesive sheets for cells
used in fuel cell vehicles, electrode materials for large
storage batteries, hydrogen-related materials, etc.

(A circular society)•Achieve final disposal rate from business activities: less than 1%•Produce a 60% ratio of green films•Join resource circulation ecosystem (R PLUS JAPAN)

Ushering in both a prosperous society where people can livewith peace of mind, and the enhancement of corporate value1) Contributing to solving social issues through our business2) Sustainable growth: a solid foundation and trajectory for future growth3) People First: safe and secure workplaces, rewarding work employees can be proud of, and the opportunity for personal development

Where we’dlike to be
by 2030

FY2031 target

Clean water areas, air andsoil, and preservation of
biodiversity•Air volume treated using VOC recovery equipment:
7 billion Nm3 per year
•Desalination of sea water using membranes: equivalent to the volume oftap water for 10 million people•Sales volume of highly functional films that contribute to reducing food loss
and waste: fourfold increase over FY2021•Entry into sustainable food fieldNote) “Employees’ well-being and human rights in the supply chain” corresponds to the materialities of “human capital” and “safety and disaster prevention.”
Others correspond to their similarly named materialities.

TOYOBO REPORT 2022

016

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

VisionSix Types of Capital
Accelerating value creation through the strategic use and growth of capital
Toyobo group has grown by identifying societal changes and needs, and contributing to solving social issues.
We have accumulated a variety of capital along the way that contributes to our strength today.
We will pursue to create further value through the strategic use and growth of capital.

Manufacturing
capitalFinancial capital
Toyobo group is currently reviewing ourportfolio and focusing the management
resources on growth fields. Moreover,
we are also promoting the creation of
new businesses and technologies in
addition to DX as preparation for the
future from a long-term perspective. In
order to achieve these measures forsustainable growth, we are striving tomaintain a sound financial position
while steadily making the investments
needed from a long-term perspective.

• Stable financial position
Rating and Investment Information, Inc.
(R&I) Rating
FY2021
Evaluation

FY2022A-

EvaluationA-• Cash flows from operating activities
FY2021

FY202235 billion￥￥

17.1billion

Since the founding of our group 140
years ago, we have been committed to
manufacturing based on the corporate
philosophy of “Jun-Ri-Soku-Yu”(adhering to reason leads toprosperity), which means to enrichingoneself while solving social issues.
From our various production sites bothin Japan and around the world, we
create a diverse range of products andsolutions that support people’s daily
lives and society. By promoting DX,
such as converting to smart factories,
we will continue to upgrade andexpand our manufacturing capital.

• Production sites in Japan
FY2021

FY20227sites7sites• Production sites overseas(Countries/regions)
FY2021

FY202215sites

15sites017

TOYOBO REPORT 2022

Human capitalSocial /relationship capital

After expanding its spinning businessto synthetic fibers and chemical fibers,
Toyobo group has since acquired andnurtured core technologies such as
polymerization and modification,
molding and processing, andbiotechnology, while responding to theneeds of the day. We will create
innovations that address social issues
in the future through a combination ofmarketing perspectives and digitaltechnology. We will also aggressively
invest in R&D to achieve this goal.

Toyobo group has more than 10,000
employees worldwide. In keeping withthe principle of people first, we will
ensure safety, security, and health while
creating environments where
employees with diverse attributes cancontinue to feel pride and fulfillment intheir work. Furthermore, as part of ourefforts to boost the creation of
corporate value, we are developing
human resource policies tied to
management strategies, such as
strengthening employee engagement
and reskilling training.

Toyobo group has offered wide range of
products and services in the areas oftextiles and chemicals, from upstream
to downstream on the supply chain.
The result has been a building of
reliability with diverse customers andsuppliers, as well as collaborations withthe government, industry, andacademia to create innovative solutions.
We will continue to proactively
participate in open innovation with othercompanies, joint research with
universities, and initiatives aimed atsolving social issues.

• Ratio of R&D expenses to net sale
FY2021

3.8%

FY2022

3.7%• Primary R&D sites
FY20213sites

FY20223sites• Core technologies• Capital investment
FY2021

FY202223.3 billion￥￥

Intellectual capital

33.6 billion

Polymerization andmodification, molding andprocessing, biotechnology• Number of employees
FY2021

10,149FY2022

10,5033.1%

FY2022

3.7%

As a global textile and chemical
manufacturer, Toyobo group’s products
and business activities require asubstantial amount of resources, andwe are committed to conserving them.
Currently, in addition to combatingclimate change by setting thelong-term goal of reducing greenhousegas emissions, we are promoting thedevelopment of technologies to deal
with plastic problems.

• Energy consumption• Strong relationships withcustomers and suppliers

FY2021

13,166 TJ

FY2022

13,216 TJ• Sales ratio of eco-conscious• Ratio of women managers
FY2021Natural capital• Collaborations with othercompanies and universities

products
FY202129.9%

FY2022

33.8%• Number of employees engaged

in R&D
FY2021

Approximately

500

FY2022• Participation in various initiatives

515
TOYOBO REPORT 2022

018

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

VisionMateriality
Based on our long-term vision for 2030
In fiscal 2021, Toyobo group identified material issues in response to the demands and expectations of our
stakeholders, and to realize our Vision of being a “group that will continue to creates the solutions needed bypeople and the earth.” In fiscal 2022, we reviewed them based on our future vision, Sustainable Vision 2030.

Relationship between Sustainable Vision 2030 and materiality
to address in order to become a sustainable company
through contributing to the resolution of social issues.
From the two axes of impact for stakeholders and for thegroup, the highest priority items are clearly identified.

Identification process
We selected candidate social issues with reference toexternal initiatives and 12 international guidelines,
including the GRI Standards. We then clarified thepositive and negative impact of these social issues

through internal surveys and interviews. Our materiality
finally was determined after approval by the Board of
Directors, taking into account the views of external
parties such as institutional investors.

Enormous

Influence on stakeholders (present)

In anticipation of society and trends in 2030, Sustainable
Vision 2030 sets five social issues that the group cancontribute to solving through its businesses (▶p.015“Sustainable Vision 2030”).
Materiality refers to important issues for the group

Materiality map
Decarbonized society
and a circular society

Healthy lifestyles and healthcare
Good quality water areas, air, soil &biodiversity
Human rights(entire supply chain)

HumancapitalSmart community & comfortable spaces

Innovation

Partnerships
DX• Safety and disaster prevention• Compliance (including quality)• Governance

Big

Ascertaining and listing social
issues on a global scale

Influence on Toyobo group (present to 2030)
Measures toachievetargets

UNGC, GRI Standards, SASB Standards, etc.

Enormous[Note] “Employee well-being” is included in the materialities of “human capital” and “safety and disaster prevention.”
Human capital: Human resources management (education, securing), diversity & inclusion, health management
Partnerships: Supply chain, social contribution, stakeholder engagement

Internal survey and impact assessment
Officers, employees

Analyzing competitors, hearing viewsof external consultants, etc.
Determination of the Board of
Directors following discussion at
the management meetings

019

TOYOBO REPORT 2022

Setting targets(KPIs) for eachmateriality item

Verifyingachievement
statusManagement of materiality KPIs (PDCA)
Relecting materiality inmedium- andlong-term
management plans

Makingadjustments
as needed

Canvassing
the viewsof third
parties

Disseminating information about this series of processes
in our Integrated Report and on the company website.

In order to further ensure the progress management ofmateriality initiatives, we have assigned officers in charge
and formulated KPIs and targets for each materiality. We
reviewed our materiality based on Sustainable Vision
2030, we announced in May 2022.
In fiscal 2023, we will consider targets and KPIs for

new material issues. In addition, to ensure the successof PDCA, the progress of KPIs is reported and shared atquarterly meetings of the Sustainability Committee.
Discussion results of the Sustainability Committee
are reported to the Board of Directors as appropriate.

TOYOBO REPORT 2022020

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Materiality KPIs

3,8,11,
12,17

KPIs: timeframe for achievement set for each theme

Officer inchargeTaichi Sakai
Executive Officer
Head, Safety andDisasterManagement
Division

Themes1) No. of major accidents*
2) Frequency rate of workplace accidents
resulting in lost workdays3) No. of fires or explosions
4) No. of abnormal events and accidents (spills)* Major accidents: Defined according tointernal standards based on the definition
stipulated by the Ministry of Health,Labour and Welfare

Targets
1) 0 accidents per year2) 0.25 or less
3) 0 accidents per year4) 0 accidents per year

FY2021 results
1) 1 accident
2) 0.703) 1 accident
4) 0 accidents

FY2022 results

As of April 2022
Main
topic

Related
ESGs

Related
SDGs

1)
2)

Quality

S G

8,12

Yoshio Araki
Director,
Executive Officer
Head, Quality
Assurance Division

No. of incidents related to products*
Implementation status of product safety
and quality assurance training* Incidents related to products: Definedaccording to internal standards based on
the definition stipulated by the Ministry of
Economy, Trade and Industry

Officer incharge1) 0 accidents
2) 0.423) 1 accident
4) 2 accidents

All targets apply every year (calendar
year)

We are continuing to consider target setting for “accident prevention initiatives”
1) 0 incidents per year2) 100%

1) 0 incidents
2) 80%

1) 0 incidents
2) 100%

Human
resource
management

All targets apply every yearS

3,4,5,8

Masakatsu
Shirai
Director,
Executive
Officer
Controlling
Supervisor of HR,
Administrationand Legal
Division

We are continuing to consider target setting for “Quality-related” themes

Corporate
governance

Respect forhuman rights

Ability toprovidesolutions (R&D,
and intellectual
property)

Materiality

E S G

Related
SDGs

Supply chain
management

Reducing
greenhousegas emissions

Reducing
environmental
impact

G

Ｓ

E S

E S

E

E

16

3,4,5,8

3,4,6,7,
8,9,12,
13,14

1,2,3,6,
8,12,13,
14,15,16

7,13

6,12,14,
15

Masakatsu Shirai
Director, Executive
Officer
Controlling
Supervisor of HR,
Administration and
Legal Division

Masakatsu Shirai
Director, Executive
Officer
Controlling
Supervisor of HR,
Administration and
Legal Division

Yasuo OtaManaging
Executive Officers
Controlling
Supervisor of
Innovation DivisionNobuya Fujiwara
Executive Officer
Controlling
Supervisor of
Procurement andLogistics
Department

Taichi Sakai
Executive Officer
Head, Safety andDisasterManagement
Division

Taichi Sakai
Executive Officer
Head, Safety andDisasterManagement
Division

1) 25 meetings
2) Disclosed in the
Toyobo Report(integrated report), andon the company
website3) Disclosed in the
Toyobo Report(integrated report), andon the company
website1) 24 meetings
2) Disclosed in the
Toyobo Report(integrated report),
and on the company
website3) Disclosed in the
Toyobo Report(integrated report),
and on the company
website1) Once a year for 20% of
nonconsolidated* employees2) 2.3%* “Nonconsolidated” here refers to TOYOBO
CO., LTD., TOYOBO STC CO., LTD., and
TOYOBO INFORMATION SYSTEMCREATE CO., LTD.
Target for FY2026

1) 24.1%
2) 2.2%

1) 27.6%2) 2.2%

1) (Corporate research)
Percentage of research themes that
contribute towards the realization of SDGs 6,
12, 13 and 14, which are related to the ability
to provide solutions as defined by Toyobo,
and to the realization of SDGs 3 or 7, which
are necessary for the achievement of asustainable society2) (Research undertaken by individual businessdivisions)
Clarification on a company-wide basis of thecurrent situation in regard to research themes,
and setting of company-wide targets
3) No. of cases of intellectual property
information analysis
4) No. of cases of business termination due topatent infringement
5) No. of overseas patent applications finalized
through collaboration with business divisions
or with R&D units
6) Completion of review of Outstanding Patent
Application Award candidates7) No. of intellectual property education projects
targeting TOYOBO CO., LTD., and no. of suchprojects targeting Toyobo group companies

1) At least 75% by FY2022 (and at
least 90% by FY2026)
2) –3) Annual target: 20 cases
4) Annual target: 0 cases5) Annual target: 2 applications
6) Target: By Dec. 31, 2021
7) Annual target:
TOYOBO CO., LTD.: 13 projects;
Toyobo group companies: 6
projects

1) –2) –3) 17 cases4) 0 cases5) 2 applications
6) –7) TOYOBO CO., LTD.:
13 projects; Toyobo
group companies: 5
projects

1) Ratio of CSR procurement surveys
returned
2) Ratio of reduction in CO2 emissions perunit of transportation* related to logistics

1) 90% or above(In years when a survey is not
implemented, we carry out
dialogue with business partners
that had issues in past surveys)
2) Year on year reduction of 0.5%

1) No. of meetings of the Board of
Directors / committees2) Attendance rate of officers at meetings
included in 1).
3) Disclosure of details of evaluation of theBoard of Directors’ effectiveness1) Implementation status of human rights
education and training
2) Employment ratio of people withdisabilities* CO2 emissions per unit of transportation(g-CO2/t-km) represent CO2 emissions (in grams)
for every 1 tonne of goods transported over 1 km.

1) Disclosure of results2) Disclosure of results3) Disclosure of details ofeffectiveness evaluation

1) 71%
2) –3) 20 cases4) 0 cases5) 2 applications
6) Review completed.
Awards scheduled to
begin in FY 2023.
7) TOYOBO CO., LTD.:
15 projects; Toyobo
group companies: 6
projects

KPIs: timeframe for achievement set for each theme
ThemesTargets

1) Training core overseas personnel in Japan2) Training investment per employee (andtraining time)3) Achievement of women manager ratio
target4) Ratio of annual paid leave taken
5) Reduction in annual time worked outside
specified working hours(no. of employees working more than 360
hours of overtime per year / total no. of
employees)6) Ratio of men employees taking
childcare leave
7) Certified as a “White 500 Company” forOutstanding Health and Productivity
Management
8) Improvement in how positive employees
feel about their work, based on an
employee engagement survey
a. Percentage of respondents agreeing
with the statement that they do not feelthat their day-to-day work is difficult toperformb. Percentage of respondents agreeing
with the statement that the company
respects the diverse views and ideas ofeach individual employee1) 15 employees per year*2) ¥50,000 per year* (21 hours)3) 5.0% or above*4) 75%*
5) Reduction of 20% (2.0%)*
6) At least 80% of eligible men
employees taking childcare
leave*
7) Obtain / Maintain*8) a. Increase in the percentageof respondents agreeing withthis statementb. Increase in the percentageof respondents agreeing withthis statement

1) Increase in awareness of compliance

Materiality

Management base (basic preconditions to materiality)

Safety anddisasterprevention

Related
ESGs

Category

Main
topic

Compliance

S G

16

Masakatsu
Shirai
Director,
Executive
Officer
Controlling
Supervisor ofHR,
Administrationand Legal
Division

Compliance(R&D andIntellectual
Property)
1) Establishing a systemfor conducting
questionnaires
2) Year on year reductionof 0.6%

1) Greenhouse gas emissions(consolidated)
2) R&D investment targeting climatechange3) TCFD / scenario analysis disclosure1) 30% reduction from FY2014*
2) We will start to discuss and respondto this issue from now on3) We have started to discuss andrespond to this issue from 2H
FY2022* Target for FY2031
Set target in anticipation of increase ingreenhouse gas emissions
accompanying net sales growth(FY2031: ¥500 billion)

1) 26% reduction(902 thousand t-CO2)
2) —
3) —

1) VOC emissions (total for operations inJapan)
2) Discharge of hazardous substances into
water (total for operations in Japan)
3) Waste volume (consolidated)
4) Final disposal (landfill disposal) rate (total
for operations in Japan)5) Expanding products and services that
contribute to the environment(ECO-PARTNER SYSTEM®) (TOYOBO
CO., LTD. only)

1) 60% reduction from FY2015*2) 80% reduction from FY2015*3) 15% reduction from FY2016*4) Less than 1% every year5) Sales ratio held by ECO-PARTNER
SYSTEM® products 40%*
*Targets for FY2031

1) 14% reduction2) 56% reduction3) 4% increase4) 0.2%5) 30%S G

161) 93%
2) Year on year reductionof 0.5%1) 26% reduction(900 thousand t-CO2)2) —3) ▶p.031

1) 29% reduction2) 36% reduction3) 8% increase4) 0.2%5) 34%

Data security,
privacyCommunication
withstakeholders

S G

S G

17

17

Yasuo OtaManaging
Executive
Officers
Controlling
Supervisor of
Innovation
Division

Ichiro Takai
Managing
Executive
Officer
Controlling
Supervisor of
Corporate
Planning
Division

Masakatsu
Shirai
Director,
Executive Officer
Controlling
Supervisor ofHR,
Administrationand Legal
Division

FY2021 results

1) Canceled because of
COVID-192) ¥50,000 (17.67 hours)3) 3.7%4) 72.3%
5) (3.8%)
6) 64.4%
7) Certified as a Health andProductivity Management
Organization 2022
8) a. 33%
b. 42%

1) Improvement in compliancequestionnaire responses

1)

1)

a. Does the company
emphasizes compliance ?

a. I feel that it does, or by andlarge I feel that it does: 88%

a. I feel that it does, or by andlarge I feel that it does: 79%

b. Awareness of “Compliance
Mini Study”

b. I read every issue, or I
sometimes read it, or I readthose articles that are ofinterest to me: 78%

b. I read every issue, or I
sometimes read it, or I readthose articles that are ofinterest to me: 78%

c. Compliance study sessions
Held 11 times + video
delivered to all employees
Various other trainings
Held 13 timesc. Compliance study sessions
Held 10 times + video
delivered to all employees
Various other trainings
Held 21 times

Expansion of compliancestudy sessions (Managers) andvarious other trainings
c. Compliance study sessions
Various other trainings

2) Awareness and use of complianceconsultation desks

FY2022 results

1) Canceled because of
COVID-192) ¥24,000 (12.95 hours)3) 3.1%4) 64.0%
5) (3.0%)
6) 80.0%
7) Certified as a Health andProductivity Management
Organization 2021
8) —* FY2026 targets

2) Improvement in compliancequestionnaire responses

2)

2)

a. Awareness of complianceconsultation desksa. 92%

a. 87%

b. Ease of use of complianceconsultation desksb. I would like to try using it, or I
can’t really say one way or theother: 89%

b. I would like to try using it, or I
can’t really say one way or
the other: 93%

37 cases handled

62 cases handled

Disclosure of no. of cases
handledAll inclusive

Category

Toyobo has set KPIs for promoting materiality initiatives. These KPIs are adjusted as necessary to correspond to the target achievement status.
The results are reported annually to the Board of Directors.

3) No. of serious legal violations

3) 0 violations per year3) 2 violations

3) 0 violations

1) No. of product safety or quality
assurance violations in the R&D QA
system2) No. of violations of ministerial
guidelines or of funding bodies’ rules
3) Violations of rules governing
handling of research topics
4) No. of cease and desist orders
received relating to display items

1) 0 violations per year2) 0 violations per year3) 0 violations per year4) 0 orders per year

1) –
2) –
3) –
4) 0 orders

1)
2)
3)
4)

1) No. of information security education
sessions provided*2) No. of incidents (information leaks, service
outages, etc.)*
3) Implementation of information security
measures**1) 15 times per year2) 0 incidents per year
3) Disclosure of promotion
contents

1) 19 times2) 0 incidents
3) Under discussion at the Cyber
Security Committee

1) 23 times2) 0 incidents
3) Activities being promoted, with
the Cyber Security Committee
playing a central role

1) 90
2) 1443) 14 times4) 2 times

1)
2)
3)
4)

0 violations
0 violations
0 violations
0 orders

All targets for FY2022* Scope is TOYOBO CO., LTD., TOYOBOSTC CO., LTD., and TOYOBOINFORMATION SYSTEM CREATE CO., LTD.
** Scope is consolidated subsidiaries(determined while monitoring the situation)
Specific measures aimed at consolidated
subsidiaries• Application of Information Security Policy• Roll out of measures to strengthen
office automation and factory
automation
1) No. of press releases
2) No. of interviews with investors
3) Frequency of meetings with
employees and labor unions
4) Frequency of engagement withstakeholders

1) 75 per year2) 150 per year*
3) At least 30 times per year
4) Twice a year

93
148
47 times
1 timeAll targets for FY2022* Target covers the period from
August 2021 to July 2022

Ability to provide solutions: Specific contribution areas have been outlined in the Sustainable Vision 2030, and, going forward, the setting of KPIs will be discussed.
Product lifecycle management: This item has been deleted pursuant to the revision of the company’s materiality.

021

TOYOBO REPORT 2022

TOYOBO REPORT 2022

022

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Strategy and Practice of Value Creation

DIALOGUE

Dialogue with ESG Investors
ESG Analyst

President & Representative Director

Toyobo President Ikuo Takeuchi sat down with Megumi Sakuramoto, Executive ESG Analyst at
Asset Management One Co., Ltd. to discuss the sustainable growth of the Toyobo group.

The long-term vision forcefully and clearly states thebe so important to stay on course with the long-term

three core objectives for what you want the company tovision. A view of the future is crucial in an era of VUCA

be in 2030: Contributing to solving social issues through(volatility, uncertainty, complexity and ambiguity) when it’sbusiness operations; Sustainable growth with a solid

difficult to anticipate what’s ahead. The vision isfoundation and track for future growth; and People First

exceptional for the clarity of its image of the future ofwith safe workplaces where employees can work withsociety and the markets.

peace of mind, pride, and a sense of rewarding workand self-growth.
Takeuchiplan, which is where we hope you wil show strong
leadership.

are basically the same as those I expressed when I*VUCA: volatility, uncertainty, complexity and ambiguity

I'm pleased to hear that. I made every effort

became president. I tried many ways to put them into

Takeuchito word and explain my objectives plainly so they would

succinct words until they were finally boiled down tochallenges head on and fostering a corporate culture

be understood. I wanted not just our investors andwhat they are now.

with the whole group focusing on sustainable growth. I

stakeholders, but all our employees and group

Sakuramoto

impressions of the recently announced Sustainable

employees to have a clear understanding our long-term

concepts of sustainability, the company’s people, and

Vision 2030 (long-term vision) and 2025 Medium-Termvision and 2025 MTP. We started from the corporate

earning profits by contributing to solving social issues. I

Management Plan [FY2023 -2026] (2025 MTP). When I

philosophy and projected forward for our long-term

felt it was both faithful to our fundamentals and also

saw the shift the company has made to pursue

vision, and from there we backcast to map out our

sharp and forceful, not a like a razorblade but like a saw

sustainable growth, my impression, to exaggerate just a

medium-term management plan. That enabled us tothat would still cut even if some teeth were to break off.

little, was the sleeping lion has finally awakened.

ultimately put together a consistent story.

A bold and clear long-term vision forsustainable growth
Sakuramoto

First, I would like to share my general

I also watched the video where you presented the023

The elements behind those core objectives

With the vision in place, all that is left is execute theTakeuchi

Sakuramoto

Working back from the long-term vision

The vision is very clearly built around theI’d also like to point out that the ESG elements in

I understand. I am going to lead by facing

will talk often with group employees to inspire themand create a mindset for enjoying the change.

A completely new portfolio focuses on
growth
Sakuramoto

Looking at the 2025 MTP, I see thatthe long-term vision would not immediately affect your

Toyobo is taking a long-term perspective andcompany’s objectives and found your narrative easy toand then presenting the medium-term plan asbusiness performance, but will work more subtly overchallenging itself to pursue goals that would be difficult

understand terms and convincing.

preparation for the future is particularly commendable.

time, like traditional Chinese medicine. That’s why it willto achieve with medium-term plans every four years.

TOYOBO REPORT 2022

ProfileProfileMegumi Sakuramoto

Ikuo Takeuchi

Executive ESG Analyst,
Responsible Investment Group, Investment Division,
Asset Management One Co., Ltd.

President & Representative Director,
CEO & Co-COO TOYOBO CO., LTD.

Mr. Sakuramoto began his career at Pacific
Consultants International and joined Yasuda Trust& Banking (now Mizuho Trust & Banking) in March
1990, where he was a fund manager and analyst in
the investment operations of the Pension
Management Division. He later worked at theMizuho Pension Research Institute and joined
Asset Management One as an ESG analyst in
October 2016. He was appointed to his present
position in January 2021.

Mr. Takeuchi joined Toyo Boseki (now Toyobo) in
April 1985 became General Manager of Corporate
Planning Office in October 2014. After serving as
Chairman of a Chinese subsidiary, he wasappointed Head of the Functional Membrane andEnvironmental Division. He was appointed
Executive Officer in April 2018 and Managing
Executive Officer in April and Director in June 2020.
He was appointed to his present position in April
2021.

TOYOBO REPORT 2022

024

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

Importance of disclosure and dialogue
about corporate activities

You have even reorganized the business portfolio.

final version of the vision came out, all of our department

where diverse human resources can thrive and be theSetting quantitative standards, assessing and stratifying

managers considered it not as some plan that suddenly

driving force for the transformation that we are aiming

each business in terms of profitability and growthappeared but as the long-term vision that everyone hadfor in our long-term vision and 2025 MTP. We will

potential, and planning to concentrate resources in key

created together.

stimulate innovation by securing staff with diverse

Sakuramoto

The vision’s success will depend on all of theexperience, sensibilities, values, and expertise andcompany’s information disclosure policies and dialogue

company’s officers and employees getting behind it andencouraging them to work together and develop theirwith stakeholders. Risk disclosure is crucial to earning

management theme at Toyobo. Past reform only aimed

making it their own. If you think the vision is separate

abilities.

the trust of investors and financial markets. Disclosure

at eliminating unprofitable and low-profit businesses.

from what you are doing at the company, you will not be

We’re taking a completely different approach now in thatsuccessful. Your work is part of the long-term vision. I

personnel system in fiscal 2023. The system is designed

but so is disclosure of Japan-specific risk, such as

we are asking how we can build a business thatwould even say the long-term vision can give meaning toto create a workplace where every group employee canearthquakes or tsunamis related to the Nankai Trough.

contributes to society, and how we can then increase

your life and work. If you can feel that connection to yourexperience growth and work with pride and purpose.

Takeuchiour profits from that business. Our focus is now fully on

life, then the long-term vision will be meaningful to you.

We are also constructing a Personnel Database that werisk with our highest priority on risk related to safety,

those two points. At the same time, the joint venture with

Sakuramoto

will be able to use to plan and implement a humanaccident prevention, and quality, and make every effort

Mitsubishi Corporation increases the growth potential for

vision permeate deeply among employees.

capital strategy closely linked to our management

to conscientiously disclose the related information. We

businesses that are already generating steady earnings.

Takeuchistrategy by enabling three key activities: nurturing

also seek to identify other forms of risk, create

focus areas all create intriguing potential.
TakeuchiPortfolio reform has always been a major

The portfolio reform symbolizes our conceptual

It will take a constant effort to make theYes, that will be critical, and I’ve alreadyOne specific step we took was to introduce a new

Lastly, I would like to ask you about therelated global issues like climate change are important,

We actively seek to identify and respond to

started to work on that. The other day when I announced

next-generation managers, providing job matching andcomprehensive risk maps, and formulate and implement

shift from survival to pursuing sustainable growth, which

the long-term vision to the group, in my message I

reskilling. Along with this, we plan to make our biggest

workaround and mitigation measures. Earthquakes areunderlies the long-term vision.

included a question for everyone to think about: What isever increase in investment for human resource

indeed a material issue that occurs frequently in Japan,

the purpose of creating a long-term vision? I wanted todevelopment.

and I would like to reexamine the risk and formulate a

Key to fulfilling the vision is fully
convincing our officers and employees
I mentioned that solid leadership will bepractical business continuity plan.

convey that our aim is not to create the long-term vision
but that it is important for group employees to make thevision “personal” and to take action to make it a reality.

Sakuramoto

Combining external and internal
knowledge for DX

I want to fully disclose these risks, and I also wantto communicate to investors and other stakeholders themeasures we are taking to mitigate the risks.

I also recommended the leaders at all of theimportant to fulfilling the long-term vision and 2025

worksites to explain the long-term vision and 2025 MTP

Sakuramoto

MTP, but it will also be essential to gain thefor the group and for their departments and then toto the 2025 MTP. What is your plan for DX?

understanding and cooperation of everyone in thethoroughly discuss them with everyone to hear what

Takeuchicompany. That is especially critical now with the drastic

they think and how they feel about it.

Digital transformation (DX) is also central

We had already been working on DX, but

Sakuramoto

I think the company could also be moreproactive about disclosing positive information. If
investors don’t hear about countermeasures, they will

we recently hired a new director for the IT and DX

assume there are none.

In addition to linking our current activities to the

Planning Department to speed up the transformation. In

Takeuchi

I view the changes less as drastic andlong-term vision, each department and individual must haveJune 2022, we also brought in Mr. Hiroshi Fukushi as anwhen I saw the positive reaction in the capital markets

more as a natural progression. We are following thean action plan. We also know that “execution is everything”

Outside Director from Ajinomoto Co., Inc., where he wasafter we issued our integrated report. I was even told by

Jun-Ri-Soku-Yu principle and just “adhering to reason.”and will be diligently conducting follow up for the plan.

the Chief Digital Officer and leading the company’ssome people that sharing information more widely could

management reform and DX. He will provide aneven boost our stock price.

objective view on what we are doing, and I look forward

Sakuramoto

to hearing his frank opinions and recommendations.

technology, and many other positive attributes. I feelreforms you are planning.
Takeuchi

Still, because of the various organizational
structures and positionings, it’s by no means easy to do
this across all our companies. That’s where your idea of
having everyone in the company making it their own

025

Strategy and Practiceof Value Creation

A human resources strategy linked to the
management strategy

Sakuramoto

personal the long-term vision is so important. The

Sakuramoto

Corporate Sustainability Department, as the secretariat

In recent years, investors have been

You are indeed actively moving on DX.

I realized the importance of that in 2021

Toyobo has a solid principle,

that the company is not disclosing all that it could. I

I’d also encourage you the Toyobo DNA from yourwould like to see Toyobo receiving the recognition that it

increasingly looking at corporate policies related to140-year history. The knowledge of internal personnel

deserves.

for the vision, and held multiple discussions with theemployees, or human capital, as a way of assessing a

who are deeply familiar with the company will be

TakeuchiSolutions Divisions (Business Division) and Corporatecompany from a long-term perspective. The rapidly

extremely important to obtain the full potential of DX.

advance our long-term vision and 2025 MTP and share

Departments (operations departments) when forming thechanging market conditions and changing workstyles

Takeuchidraft vision. The executive officers then also met

during the pandemic are creating a whole new value

from both inside and outside the company will be key.

other stakeholders. Thank you for coming today.

numerous times to put the vision together. During thesystem, making it more important than ever that the

Mr. Fukushi has already been talking with executives

Sakuramoto

discussions, the officers looked at the bigger picture

strategy vectors of management and human resourcesand employees about the DX strategy. I’m looking

talking with you.

beyond their own departments or position and primarily

are aligned. What is Toyobo’s human resources strategy?

forward to what the changes will bring for the company.

focused on what would be best for the group. When the

TakeuchiTOYOBO REPORT 2022

That is very true. Combining knowledge

That is excellent advice. We will steadily

the progress, issues, and results with investors andThank you very much. It was a pleasure

Our basic strategy is to foster worksites

TOYOBO REPORT 2022

026

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

CFO Message

necessary for the company’s future. So, while being

communicated throughout the group. Although they did

prepared to put on the brakes, I’m also ready to step on

not instantly change the organizational culture, thethe accelerator.

important point is that we now have a solid foundation

One of my other roles is to support the work sites
by objectively analyzing a company’s financial

to build on for the future.
Redefining our corporate philosophy and clearlyfoundation and a business’s cash generation ability andstating Toyobo group’s Vision and Values provides thetelling them with conviction, “It’ll work. We can do it!”criteria for our employees and business departments todecide what must be done and what must not be done.

Achievements of the previous
Medium-Term Management Plan
In fiscal 2022, the final year of the 2018 Medium-Term

Representative Director,
CFO & Senior Managing
Executive Officer
Controlling Supervisor ofManagement andAdministration Division

We will take on the risk necessary to attainour long-term objectives and establish
sustaining growth.
Boosting corporate value througheffective cash allocation

year to ¥375.7 billion driven by ongoing strong demandfor industrial films and PCR test reagents even amid the

The 2025 Medium-Term Management Plan (2025 MTP)

worldwide COVID-19 pandemic. Operating profit grewthat we launched in fiscal 2023 was formulated by

6.6% to ¥28.4 billion as the Life Science business drove

backcasting from the goals of the long-term Sustainable

overall growth that overcame the sharp increases in the

Vision 2030. 2025 MTP sets targets for fiscal 2031 ofprices of naphtha and other raw materials and fuels in¥600 billion in net sales and ¥50 billion in operating

the second half of the fiscal year. Profit attributable toprofit as milestones and the four years to fiscal 2026 asowners of parent surged 206.2% to ¥12.9 billion on an

the period to remake and prepare the company for

improvement in extraordinary income.

fulfilling the long-term vision.

Net sales surpassed the 2018 Plan target of ¥375

The plan’s targets for net sales and operating profit

billion. Operating profit fell short of the ¥30 billion target,

are quite ambitious considering our current levels. To

largely due to the impacts of the fire accident and theachieve them, we will need to aggressively engage insharp rises in raw material and fuel prices. However,

upfront investment in many areas, including inoperating profit grew by over 30% over the plan’s four

equipment to fortify our existing businesses, R&D to

years, and the operating profit margin improved fromdevelop new businesses, and in the human resources

have to be aware of the waterline to ensure the ship can

6.5% to 7.6%. We steadfastly maintained our financial

and DX that will be the foundation for growth. Due tobe navigated safely through the various risks, anddiscipline with the equity ratio moving in the 36–38%

this aggressive investment, during the plan’s four years

funding has to be actively managed to ensure no leaks

range and the debt-to-equity ratio remaining below the

we expect to investment spending to exceed operating

The Chief Financial Officer’s role is often compared tooccur below the waterline that could threaten to sink the

1.0x standard for financial soundness. I believe the

cash flow and our debt to increase. That will be thethe brakes on a car. The CEO steps on the accelerator

ship. For a company to grow, however, it must do morecompany was able to operate reasonably well in terms“preparation” stage, however, and when we moveto race toward fulfilling the vision, and the CFO pushes

than just stay afloat.

of finance during the four years of the plan.

beyond that stage in fiscal 2026, we expect all ouron the brakes at the right time and the right amount of

I believe that the CFO’s primary mission is to

I believe the achievements of our non-financial

businesses to have exponentially greater earning powerstrength. That’s an easy to understand image, but the

manage the allocation of cash for increasing corporate

activities during the 2018 Plan were even greater. Top

while our free cash flow steadily increases as we pay

CFO’s role goes well beyond that. Certainly, the mostvalue. We must analyze all types of risks andamong the achievements is the reconstruction of thedown the debt.

fundamental mission of financial management is toopportunities to determine when, where, and how muchcorporate philosophy framework in fiscal 2020. The

ensure the company does not fail, to ensure it does notwill be the best way to allocate a limited amount of cash.

Jun-Ri-Soku-Yu (adhering to reason leads to prosperity)equipment to strengthen the ability of all our businesses

run out of funds.

Risk is inevitable. But we need to avoid risks that could

corporate philosophy was completely reinterpreted andto generate cash. Capital spending under the previous

damage the corporate value and take the risks that are

the TOYOBO PVVs were put into clear language andfour-year plan amounted to ¥115.8 billion, and we plan

Funds are like the waterline on a ship. You always

027

announced the long-term Sustainable Vision 2030.

Four years of preparation for aggressive
growth investment

Management Plan, net sales increased 11.4% year on

Hiroshi Otsuki

From this, we were then able to put together our recently

TOYOBO REPORT 2022

The first step will be to aggressively invest in

TOYOBO REPORT 2022

028

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

CFO Message

to more than double that to ¥240 billion during the new

expenses absolutely must not be reduced. We

needed to achieve the dramatic growth, I believe theplan. Following our financial discipline, our policy has

determined that, no matter the circumstances, we will

new joint venture will lead us to a completely different

been to keep capital investment within range ofallocate 3.6-3.8% of sales to R&D. R&D is essential tobusiness models for generating growth.

depreciation, but we will exceed that level with the

expanding our possibilities for the future.

investment we are planning for the next few years.
As we invest for business growth, we will also be

and many other departments will certainly face many
challenges in the process, but the effort will be worth it. I

into two categories of profitability and growth and thenEmbarking on a new challenge with
Mitsubishi Corporation

further stratified into businesses focusing on expansion,

We know it would be very difficult to achieve our target

new businesses to be developed, businessesof ¥600 billion in net sales in fiscal 2031 only throughgenerating stable earnings or businesses requiringorganic growth of our existing management resources.

improvement. We will continue aggressively investing in

Understanding that was our impetus for embarking on

the films and the Life Science businesses, which are

the new joint venture with Mitsubishi Corporation that

EBITDA and ROIC added to corefinancial indicators

categorized as businesses focusing on expansion. In the

we announced in March 2022.

We added EBITDA, which adds depreciation to operating

stratifying our business portfolio. Businesses will be put

environmental/functional materials business, which is a

We had numerous discussions inside the company

also think there will be a positive ripple effect not justamong the people directly involved in the venture but
across all businesses and back-office departments.

profit, to the key management indicators in the 2025 MTP

The capital policy during the 2025 MTP calls forbusiness generating stable earnings, we will reevaluate

before making the decision to set an ambitious target

to encourage a management mindset for active

investment that will significantly exceed operating cash

the potential of each product as we develop theand then create a joint venture company that will enable

investment. The 2025 MTP also sets both ROE and ROIC

flow as we invest aggressively in growth with priorities

business into a full-fledged solutions businesses. We will

the dramatic growth needed to attain the target. We

as key indicators to increase management focus on

on measures for safety and disaster prevention and foralso pursue new growth avenues through a joint

even discussed if we really needed to set such a highcapital efficiency. Due to the nature of our business,environmental protection. Our policy will be to maintain acompany we will establish with Mitsubishi Corporation

target, and if continuing in our current direction would

calculating ROIC for each operation is problematic, so

total shareholder return ratio at a stable 30%. We(discussed below), which we will seek to develop as abe sufficient. However, the clients we supply ourinstead we use the roughly equivalent ROCE.

expect to distribute dividends of ¥40 per share in fiscal

third core earnings driver.

products to, their customers, and consumers are

We have been following a standard of holding theconstantly changing. As a maker of intermediate

D/E ratio below 1.0x. During this preparation phase inmaterials, our survival depends on our ability to respondthe 2025 MTP when we will be conducting upfront

to boost our operating cash flow and capital surplus

to those changes. If we stop evolving, we will findinvestment, however, we will allow the ratio to elevate toduring the subsequent medium-term management planourselves becoming further and further away from thethe 1.2–1.3x range as we seek to use more of our

beginning in fiscal 2027, which would allow us toneeds of our customers and the markets.

available leverage.

implement a more proactive shareholder return policy.

R&D expenses are essential to expanding
our possibilities
In addition to our businesses focusing on expansion, we

2023, unchanged from the previous fiscal year.
We expect a successful 2025 MTP to position us

will also be actively investing in new businesses to be

The joint venture is very exciting to me as the CFO.

At the same time, since it is not desirable toI believe it is important duty as CFO to engage indeveloped. Our annual investment on R&D has been

Joining with a trading company in a completely different

increase debt without improving our cash creation

dialogue with all stakeholders so everyone has a clear

around ¥12 billion over the past several years. Duringindustry is a growth strategy I have never experienced

capability, we have also adopted another guideline ofunderstanding of the scenarios we see for realizing

the 2025 MTP, we will increase our R&D budget to ¥15

before, and I think the endeavor will bring hugemaintaining a net debt to EBITDA ratio near 4x. We

business growth in the future.

billion annually.

advantages to the company. It’s an opportunity for us asbelieve that a certain level of cash creation will give us

Due to the nature of our business, it takes ana manufacturing company to encounter management

the flexibility to allow debt to rise to that level.

average of seven or eight years for an R&D investment

ideas and business approaches and perspectives thatto manifest as a commercial business. There have been

we could not have thought of on our own. I expect thistimes in the past when we restricted R&D spending

joining with a completely different culture to change

because of tight financial conditions, and as expectedToyobo’s corporate culture for the better. I’m especially

We recognize returning profits to shareholders andwe see few new businesses emerging seven and eight

excited about the potential to develop new businesses

investors is a high priority for companies and an important

years later.

in overseas markets, which is truly an “encounter withpart of cash allocation. In addition to distributing

the unknown.”

dividends, we will also consider share buybacks andOur managers all agree that, even if we do not see
immediate results, for the future of the company, R&D

029

Our manufacturing sites, management divisions,

TOYOBO REPORT 2022

As we adapt to the new mindset that will beLong-term perspective on profit return

We look forward to your continuing support as we
position the company for long-term growth.
Representative Director, CFO & Senior Managing Executive Officer
Controlling Supervisor of Management and Administration Division

other avenues for returning profit to shareholders.

TOYOBO REPORT 2022

030

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Strategy and Practice of Value Creation

Disclosure Based on TCFD Recommendations
Recognizing the scale of the impact of climate change on our group and stakeholders, we have identified a“decarbonized and circular society” as one of our materialities. In January 2020, we announced our support for
the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD), and have beenworking on initiatives and disclosures that follow them.

Governance

Climate change-related risks and opportunities
Based on the 2°C and the 4°C scenarios, we identified
risks and opportunities for the film business. We
extracted and consolidated highly important risk andopportunity items, then summarized them from theperspective of societal change and discussed proposed
measures for each.
Toyobo group has set the goal of achieving carbon
neutrality by reducing greenhouse gas(GHG) emissions
Societal change
and its impact

The entire Toyobo group is working together to formulatea strategy to achieve carbon neutrality by 2050, and tocontribute to realizing a carbon neutrality in society as awhole. Under the Sustainability Committee, which ischaired by the President, we established asubcommittee called the Carbon Neutral Strategies

Council in April 2021 as a platform to accelerate ourinitiatives. The Carbon Neutral Strategies
Cross-functional Team, made up of members fromacross the company to formulate strategies andmilestones for carbon neutrality, has been placed under
the Council to work on concrete measures.

(1) Introduction
and rise ofcarbon pricing(2) Cost impact ofdecarbonization

Risks/Opportunities
Risk

Risk/
Opportunity

Strategy
Scenario analysis
First, we analyzed how climate change would impact ourbusiness based on two scenarios for our core film
business, which is expected to be relatively largely
impacted.
In the scenario limiting temperature rise to 2°C,
societal changes associated with the shift to a
decarbonized society could affect our business. In
response, we will begin to examine rationalization of the
manufacturing process, study the introduction ofrenewable energy and carbon-free fuel (hydrogen,ammonia, etc.).

Scenarios

Vision ofsociety

Reference

Risks andopportunities

031

If the temperature rise is around 4°C, our businessmay be affected by damage to production facilities andsuspended supplies of raw materials due to extreme windand flood damage. We will work to prevent this byperiodically reviewing and updating our BCP, reviewing
raw material inventory levels, and considering multiple
purchases. On the other hand, our analysis shows that wemay be able to capture new business growth
opportunities as our technologies and products meet thegrowing expectation and demand of customers for
products that contribute to low carbon emissions.

2°C

4°C

Bold policies and technological innovations will be promoted to limit the averagetemperature increase to 1.5°C by the end of the century and to achieve thedevelopment of a sustainable society. The societal changes brought by thetransition to a decarbonized society will likely affect businesses.
<Examples>
Introducing a carbon tax and higher carbon prices
Shifting to automobile electrification and expanding renewable energy

Although Intended Nationally Determined Contributions (INDCs) and other national
policies have been implemented in line with the Paris Agreement, the average
global temperature will rise by about 4°C by the end of this century. Climatechange, with rising temperatures, will likely affect businesses.
<Examples>
Increasing flood damage due to heavy rain

SDS (IEA WEO2020/ETP2020, 2°C scenario)
NZE (IEA Net Zero by 2050: A Roadmap for the Global Energy Sector, 1.5°C scenario)
RCP2.6 (IPCC AR5, 2°C scenario)

RCP8.5 (IPCC AR5, 4°C scenario)
STEPS (IEA WEO2020/ETP2020, 4°C scenario)

Transitional risks and opportunities are likely to materialize

Physical risks and opportunities are likely to materialize

TOYOBO REPORT 2022

(3) Growing
demand for
low-carbon
products

Opportunity

Increasing raw material prices(carbon price pass-through, etc.)

Approaching and collaborating with suppliers(low-carbon raw material development, production technology support)
Diversifying raw material procurement methods(expansion of multiple purchases and local procurement)

Medium- tolong-term

Introduction and rise of carbon
pricing

Expanding introduction and procurement of renewable energy
Promoting higher efficiency and energy conservation in production processes
Switching from fuels such as coal to those with fewer GHG emissions for in-houseelectricity generating equipment
Examining use of carbon-free fuels (such as hydrogen and ammonia)
Examining introduction of innovative technologies, including CCU and CCS

Medium- tolong-term

Fluctuating costs due to thepromotion of energy conservation,
the introduction of high-efficiency
equipment, and other factors

Pursuing innovation and ultra-high efficiency in production processes
Increasing efficiency of production in the entire value chain(integration and strengthening of cooperation with affiliate companies, M&As)

Medium-term

Fluctuating costs due to theintroduction of renewable energy

Selecting renewable energy procurement methods

Medium- tolong-term

Increasing need and demand for
low-carbon anddecarbonization-related products

Expanding production and sales of eco-conscious products(products that contribute to GHG emissions reduction)
Developing and expanding sales of materials related to renewable energy andcarbon-free fuels
Promoting research and development of low-carbon anddecarbonization-related products and technologies

Medium-term

Decreasing demand for products derived
from petrochemical raw materials, andtighter plastics regulations
Demand for decreased carbon
content during productmanufacturing(4) Intensifying
wind andflood damage
due to risingtemperatures

Risk(5) Productdemandfluctuations
due to risingtemperatures

Opportunity

Our measures

Medium-term

Expanded sales of eco-conscious
products using various certifications
Risk

at least 46% (Scope 1 and 2, compared to fiscal 2014)
by fiscal 2031, and achieving net zero emissions by fiscal
2051 (▶p.047 Climate Change). From April, 2022, we
introduced an internal carbon pricing system, and will
utilize this system as one of the criteria for future
investment decisions. We are accelerating investments
such as in low-carbon and decarbonization facilities,
energy efficiency, and development facilities aiming toincrease avoided emissions.

Utilizing recycled raw materials and biomass materials
Developing recycling-oriented materials and products and establishing recycling scheme
Expanding introduction and procurement of renewable energy
Promoting higher efficiency and energy conservation in production processes
Switching from fuels such as coal to those with fewer GHG emissions for in-houseelectricity generating equipment
Examining use of carbon-free fuels (such as hydrogen and ammonia)
Examining introduction of innovative technologies, including CCU and CCS

Medium-term

Disrupted raw material supplies due
to frequent disasters

Reviewing inventory levels, and expanding multiple purchases

Medium- tolong-term

Damaged equipment and suspended
operations due to extreme weather
conditions

Conducting BCP training and enhancing measures for production sites in coastal areas
Decentralizing production sites, and introducing highly durable equipment

Medium-term

Increasing demand for measures toprevent infectious diseases(prevention/treatment) due to risingtemperatures

Expanding demand for food packaging-related products
Promoting research and development of products and technologies to prevent
infectious diseases

Future direction of scenario analysis
In the future, we plan to conduct scenario analyses for company-wide and individual businesses and other factors thatwill take CO² emissions and financial impacts into account.

TOYOBO REPORT 2022

032

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Strategy and Practice of Value Creation

2025 Medium-Term Management Plan
Previous Medium-Term Management Plan

2025 Medium-Term Management Plan

(FY2019 to FY2022)(FY2023 to FY2026)

Change to Sustainable
Growth −2025 as a milestone−

What has been achieved• Organization of “TOYOBO PVVs” corporate
philosophy framework• Expansion of industrial film business(Operating profit approx. triple)• Expansion of biotechnology and medical materials
business (Operating profit approx. double)• Maintenance of sound financial structure

Measure1

Measure2

Financial targets and results
FY2020

FY2021

Measure3

FY2022

Net sales (¥bn.)

336.7

339.6

337.4

375.7

375

Operating profit(¥bn.)

21.7

22.8

26.7

28.4

30

Operating profit
margin (%)

6.5

6.7

7.9

7.6

8.0

Profit attributableto owners ofparent (¥bn.)

-0.6

13.8

4.2

12.9

16

MeasureROE (%)

-0.3

7.8

2.3

6.8

≥ 8.0

D/E ratio

0.93

0.98

1.01

0.98

< 1.00CAPEX ¥115.8 billion/4 years

4

Preparations for the future• Creation of new businesses and technologies: strengthen
environment and biotechnology-related andMirai Value Proposition Project• DX strategy: SFA1, MI2, Smart Factory,
and new methods of earning• Roadmap for carbon neutrality (2050)

FY2019 FY2022
Targets in
Medium-Term
Management
Plan

Financial targets and image

Reorganization of the businessportfolio• Stratify businesses(return on capital employed and growth potential)(1) Forcing on expansion: propose and implement growthmeasures, and enhance competitive advantage(2) Stable earnings: seek or maintain and improve growth(3) Requiring improvement: implement the master plan forwhat the business should be• Fluctuations in reliability: large-scale fire accidents, quality-related
misconduct incidents• Delay in business expansion targeting growth• Delay in normalization of challenging projects(including additional challenging projects)

Realizing sustainablegrowthThorough safety, disaster prevention,and quality assurance• Execute a master plan for safety and disasterprevention “zero accidents”• Restructure the quality assurance management structure• Establish a risk management structure

What we haven’t achieved and new issues

Rebuilding the foundation

FY2026FY2023
FY2031
Targets
Forecasts
Estimates(2025MTP)
Net sales (¥bn.)

410

450

600

Operating profit(¥bn.)

24

35

50

Operating profit
margin (%)

5.9

7.8

8.3

EBITDA (¥bn.)

45

63

90

Profit attributable toowners of parent(¥bn.)

13

15

23

ROE (%)

6.6

≥ 7.0

≥ 9.0

ROIC (%)*

4.1

≥ 5.0

≥ 7.0

D/E ratio

1.05< 1.20< 1.00Net Debt /EBITDA ratio

4.0

< 5.0

< 4.0

*NOPAT / (Interest-bearing debt + Net assets)• Promotion of human resources development and diversity• Workplace capabilities in manufacturing• Development of the business base
• Governance / Compliance• Change of the organizational culture

Challenges toward
the future
Solving five social issues

1 Sales Force Automation: Sales support system
2 Materials Informatics: The efficient exploration and development of materials
through informatics methods utilizing AI, machine learning, statistical analysis, etc.

Achieve growth

Four years to rebuild and prepare
Net sales

Backcasting

Operating profit margin

9.0

Net sales (¥bn.)

600.0

7.9%

500.0
400.0

6.5%

7.8%

7.6%

8.3%

6.7%

7.0
6.0

300.0

5.9%

200.0

5.0
4.0

100.0
0

033

TOYOBO REPORT 2022

8.0

2019

2020

2021

2022

2023 (Forecast)Targets in 2025 Medium-Term Management Plan

Estimates for 2031

Operating profit margin (%)

FY2019Sustainable Vision 2030

3.0
(FY)

TOYOBO REPORT 2022

034

VisionFour measures

Measure1

Execute a master plan for safety anddisaster prevention “zero accidents”

Thorough safety, disaster prevention,and quality assurance

We will proactively invest in disaster prevention andupgrade aging equipment for safety and disasterprevention. We have also set up disaster prevention training
centers to raise individual awareness, and are reminding
workplace managers on the importance of regularly
listening to their subordinates and of raising one’s voice
when sensing danger.
We have significantly revised our promotion structure
regarding quality. Moreover, we are working to reform ourorganizational culture, and are building a new quality
assurance culture.
We are also working to strengthen our risk management
structure concerning both of these issues, and are striving tocreate a structure that ensures the sustainability of our businessbased on the assumption that there will always be risks.
(▶p.059-064 Fire prevention measures / Response to thequality-related misconduct insidents / Safety and Disaster
Prevention / Quality)
Measure2

Reorganization of the business portfolio

In order to take measures for business stratification, we haveevaluated each business on the two axes of profitability andgrowth potential, and classified each business into four
quadrants: new businesses to be developed, businesses• Measures for issues detected through comprehensive
on-site inspections and disaster prevention checks• Investment in safety disaster prevention,and renovation of aging equipment• Safety and disaster prevention training, and creation ofsafety culture (secure and safe workplace)

Restructure the quality assurance
management structure• Enhancement of personnel and structure,creation of mechanisms, and introduction of systems• Quality assurance training, and creation of organizational
climate and quality cultureHigh

New businesses
to be developed

Commercialization
Preparation(¥bn.)

700.0

400.0
300.0
200.0
100.0
0

Measure3

600

Normalization
Revitalization

375.7

Profitability

Businesses withstable earnings

High• Mold releasing film for MLCC
• Transparent vapor-deposited film
• Laminate film for steel plates• Eco-conscious films

Target in
2025 MTP

Film

Estimates for
FY2031

Preparations for the future

By combining Toyobo group’s four core technologies withtechnology and know-how related to marketing anddigitalization, we are promoting the creation of innovationfrom a long-term perspective. One example of this issustainable food products, which we are currently working
to commercialize. We are also developing innovative
products and technologies that will meet the needs of the
new era, including renewable polymers, acute blood

Sparking innovations

Amount of R&D investments

Fusing technologies: combining four coretechnologies with marketing and digitalization(¥bn./year)

Ratio of R&D expenses
to net sales 3.6-3.8%

25.0

19.7

20.0
Bio / medical
technology• The entire Group’s
capital efficiency
indicator is ROIC,• The management
indicator for eachbusiness is ROCE.

Determine whether the business is a “businesses with stable earnings” or a “businesses requiring improvement,” taking into account not only the hurdle rate but
also qualitative information. Consider measures by stratified business.

TOYOBO REPORT 2022

Life Science

Film

FY2022
Results• Engineering plastics• VYLON® and HARDLEN®
• VOC treatment equipment• RO and FO membranes• High-performance fibers• Infection diagnosis-related products• Artificial kidney hollow fiber• Virus removing filters• Blood purification membranes

OthersEnvironment andFunctional
Materials
Life Science

15.0
10.0

Low

Low

Environment andFunctional Materials

450

Seeking
growthBusinesses requiring
improvement

035

Main expanding businesses

500.0

Growthpotential

Reference
Material

Changes in net sales of the group• Creation of risk map (identifying locations of risks anddegree of impact: preparation)• Improvement of the group’s corporate governance→ establishment of the Corporate Business Management
Dept. of Subsidiaries and Affiliates• Enhancement of monitoring system

t
en
tm
s
e
f
inv t o ge
ive emen antassv
gre anc ad
Ag Enh itiveetBusinesses focusingmpoc
on expansion

Overview of
FY2022After this reorganization, we designated these threebusinesses of film, life science, and environment andfunctional materials as businesses focusing on expansion.
Of the group sales target of ¥600 billion for fiscal
2031, we aim to achieve ¥220 billion in our core businessof film, ¥80 billion in life science, which is expected to
grow from fiscal 2026, and ¥250 billion in environment
and functional materials, where we will establish a new
joint venture.

600.0• Profitability : Return on capital employed (ROCE) = Operating profit / Capital employed *Target hurdle rate of 6.5%
• Growth potential : Compound annual growth rate (CAGR) *Target hurdle rate of 4.5%

The Basis of
Value Creation

pharmaceuticals businesses by fiscal 2026, each of which
are businesses requiring improvement.
In the environment and functional materials business, we
anticipate significant business opportunities from the response
to environmental issues and the growth of electric vehicles. We
expect the environment and functional materials business to
become our third pillar following the film and life sciencebusinesses, and are aiming for the further expansion andgrowth in the new joint venture with Mitsubishi Corporation.

Risk management structure

focusing on expansion, businesses requiring improvement,
and businesses with stable earnings. The compound annual
growth rate, which is the judgment standard for growthpotential, is based on the chemical industry average targetof 4.5% per year, and the return on capital employed, whichis the judgment standard for profitability, is based on a targetof 6.5% in terms of capital costs.
We are aiming for the normalization of the textile,
airbag fabrics, and contract manufacturing ofStrategy and Practiceof Value Creation

ComfortdesignPolymertechnology

Environmental
technology

Digitalization

15

5.0
0

Marketing

11.9

FY2019-FY2022 Results FY2023 -FY2026 Plan FY2027 -FY2031 Plan
Annual amount of R&D investments(including intellectual property-related expenses)

1st in “Patent overall ranking for technologies related to polymer
films and sheets” (Calculated by Patent Result Co., Ltd. in 2021)

TOYOBO REPORT 2022

036

Visionactivities, we are also proactively promoting thedevelopment of IT environments from various perspectives.
In addition, we have set an interim target of reducing
greenhouse gas emissions (Scope 1 and 2) by at least 46%
in fiscal 2031 compared to fiscal 2014 in order to achievecarbon neutrality by fiscal 2051.
(▶p.047 Climate Change)

purification products, raw materials for nucleic acidmedicine manufacturing, and organic photovoltaics
materials.
For R&D investment, we expect to allocate 3.6% to3.8% of net sales, which is the average level in the industry.
We are considering future resource allocation based on abroad overview of the entire process, including capital
expenditure related to R&D.
In order to accelerate innovation in all of our business

Developing and improving the IT
environment to accelerate andpromote business and innovation

Transforming
businessmodel

Co-creating
businessmodelsCreating
newbusinesses

Carbonneutrality

Open
innovation

Expanded collaboration with partners insideand outside the Toyobo group

Strategy and Practiceof Value Creationthat balances job responsibilities and compensation. In
addition, we are considering revising the promotion systemfrom one that was previously designed for men to one for avariety of people, including women and foreigners, to

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

promote diversity. While the ratio of women managers is
3.7% as of fiscal 2022, we aim to increase this to at least
5.0% by fiscal 2026.

Capital expenditure
We will spend ¥240 billion for capital expenditure,
approximately double the amount invested during theprevious medium-term management plan period, byplacing the top priority on safety, disaster prevention, andenvironmental investments, increasing investments forsustainable growth.
Of this, we plan to invest ¥115 billion in growth focusing
mainly on the three businesses of film, life science, andenvironment and functional materials, which have been
designated as businesses focusing on expansion.

Inventing new businesses and launching them immediately

Sophisticationof businessprocesses
and services

Developing IT
foundation

Developing and improving a platform to utilize structured and unstructured data(¥bn.)

Being able to have dialogues anddiscussions about the same
information among people fromdifferent departments

300.0
Sophisticationof researchanddevelopment

Production
innovation

Optimizationof supply chain
management

Optimizationof customer
contact points

MI, Smart Factory, SFA

Developing business systems and IT infrastructure,enhancing security
Enabling anyone to do a job safely anywhere at any time and flexibly
dealing with changes in business situation and the environment

Diversificationof workstyles(with “BringYour Own
Device”)

150.0
Disuse ofhostcomputersID
integration

Cloud
nativesRebuilding the foundation

We are rebuilding the foundation of Toyobo group based onthese five themes.

Particularly regarding human resources, we
conducted a major review of our human resource system infiscal 2022. We reviewed our seniority-based system anddesigned a system to promote younger employees to
executive positions with an eye toward a job-based system• Sophisticate the core system• Maintain businesses• Strengthen the foundation

50.0

FY2019 - FY2022

FY2023 - FY2026

Previous Medium-Term
Management Plan

2025 MTP

Governance / Compliance▶ p.073-074, p.083-090

Change of the organizational culture• Instillation of “TOYOBO PVVs”, organizational development,
addressing people with the polite suffix “-san” attached totheir name, and serious chats▶ p.045-046

037

TOYOBO REPORT 2022

Workplace capabilities in manufacturing

Rebuilding
the foundation• Safety, disaster prevention and environmental measures• In-house power facilities, etc.

based on the previous capital expenditure and dividend
payments.

▶ p.065-070

Cash-In• Restructuring of governance structure• Group Business Management• Strengthen compliance structure and the internal
auditing function• Respect for human rights in the supply chain

Safety, disaster prevention andenvironmental investments ¥33 bn.

Capital policy : Cash flow allocation
Over the four years of our 2025 MTP, we anticipate cash
flows from operating activities of ¥144 billion.
We plan to procure external financing for any shortfalls

Promotion of Human Resources, Workstyle Reform, and Diversity• Reform human resource system: Evaluation, educational expansion, rotation,
appoint suitable personnel for the right position• The next generation of management, promotion of women’s participation andadvancement (Women leader development seminars)

Investment for remaking ¥92 bn.

¥115.8 bn.

100.0

0

4

• Film forming/processing line
• Integrated line for dializer• New wing for biotechnology• R&D building renovation, etc.

¥240 bn.

250.0
200.0

▶ p.073-074, p.083-090

MeasureGrowth investment ¥115 bn.

• Production innovation activities, and engineering
education systematization

Development of the business base
• Renewal investment, and consider a concept for theentire company and production sites• Update legacy systems

Cash flows fromoperating activities¥144 bn.
External
financing¥110 bn.

Cash-Out
Safety, disaster prevention andenvironmental investments

Dividend¥33 bn.

¥14 bn.
OthersInvestment for remaking¥92 bn.

Growth investment¥115 bn.

Growth investment

Film¥115 bn.
EnvironmentandFunctional
Materials

Life
Science

TOYOBO REPORT 2022

038

VisionGrowth strategy by business

Net Sales Target of Film Business(¥bn.)

250.0
200.0
150.0
100.0
50.0

FY2022

FY2026

FY2031

Life Science businessIn bio, Toyobo aims to lead the world in the infectious
diseases diagnostics field. We will expand our diagnostics
business to include raw enzyme, reagents, diagnostic
reagents, and diagnostic equipment for genetic testing,utilizing our strength in advanced protein purification
technology. We also expanded overseas for enzymes forbiochemical diagnostic reagents, such as blood glucose,cholesterol, creatinine, GOT and GPT.
In addition, in membrane technology, we aim to
improve the quality of life of patients, and to expand
artificial kidney hollow fiber and virus removal filters using
our hollow fiber separation membrane technology.

039

TOYOBO REPORT 2022

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

CSV examples

Film businessToyobo aims to accelerate our shift to eco-conscious
products and increase our ratio of green products, such as
biomass, recycled, or volume-reduced, to 60% by fiscal
2031 and 100% by fiscal 2051.
In industrial film, we will continue to expand sales ofhighly functional films and make increased capital
expenditure in line with the growth of the IT market andmobility electrification. We will also expand synergies withthe subsidiary of our consolidated Teijin Film Solutions
Limited and grow our recycled film business.
In packaging films, we will contribute to realizing adecarbonized society and circular society by providing films
made from biomass and recycled raw materials.
In addition, we will focus on the overseas developmentof barrier films for food loss and waste reduction, and the
production of highly rigid films for volume reduction.

0Strategy and Practiceof Value Creation

Expand high-end applications with film withsuperior smoothness
Mold releasing film for MLCCNet Sales of Life Science Business(¥bn.)

80.0
60.0
40.0
20.0
0

FY2022

FY2026

FY2031

Environment and Functional Materials businessToyobo has established a new joint venture with Mitsubishi
Corporation to plan, develop, manufacture, and sellfunctional materials, and has signed an agreement to start
operations. We will spin off its environment and functional
materials business to the newly established company, andprovide investments in cooperation with Mitsubishi
Corporation. The investment ratios are 51% for Toyobo and
49% for Mitsubishi Corporation. The goal of establishing
this new company is to achieve further growth in the global
market through the combination of our technologicalstrengths with Mitsubishi Corporation’s comprehensive
strengths.
There are about 10 fields that we aim to contribute toin fields where we expect growth, such as water, air, weight
reduction, and batteries, and we plan to establish a newcompany by April 2023.
Net sales of Environment and Functional
Materials business(¥bn.)

250.0
200.0
150.0
100.0
50.0
0

FY2022

FY2026

FY2031

Ceramic capacitors are generic electronic components that
regulate current and temporarily store electricity. They areused in a variety of electronic circuits, automotive applications,and consumer appliance applications.
Our releasing films such as COSMOPEEL®, moldreleasing film for MLCC, are indispensable whenmanufacturing ceramic capacitors. We support the spreadand development of IoT and AI as the only manufacturer withan integrated process from production of the raw film tocoating of the releasing layer.
We also have the film forming technology to achieve
superior smoothness, and plan to manufacture films forhigh-end applications with inline coating.* We will install inline
coating facilities at our Utsunomiya Plant in fiscal 2025.
* Inline coating is the implementation of a process to form a coating layer during the film
forming process. Forming the coating layer during the film forming process at a highspeed enables high productivity, while stretching the coating layer after forming realizes
a superior uniform thickness.

Film that contributes to reducing food loss and waste
Transparent vapor-deposited film ECOSYAR®
ECOSYAR® is a transparent vapor-deposited film withsuperior gas barrier properties, and contributes to the
reduction of food loss and waste through its strength in thelong-term storage of food.
Since it is not vapor-deposited with metal, it can beheated in a microwave. Another strength is that it contains
no chlorine compounds and does not generate chlorine
gas when burned.
The transparent vapor-deposited film market is
growing globally at 10% per year. Toyobo group aims toquadruple its sales volume of barrier films, which contributeto food loss and waste
reduction, in this market byfiscal 2031 compared to fiscal
2021. Our plant in Indonesia
went into full operation in
fiscal 2021, aiming to meetglobal demand.
Food packaging using ECOSYAR®

Expand in the genetic testing field such as PCR testing
Raw enzymes, reagents, diagnostic reagents, anddiagnostic equipment for genetic testing
Toyobo group has expanded its diagnostics business toinclude raw enzymes, reagents, diagnostic reagents, anddiagnostic equipment for genetic testing, with its strength in
the technology to produce highly functional proteins.
We supply enzymes for diagnostic reagents used inbiochemical diagnosis to diagnostic agent manufacturers,
and also provide GENECUBEⓇ, a fully automated gene
analysis system that can easily and quickly perform
processes from nucleic acid extraction to amplification anddetection using our unique high-speed nucleic acidamplification technology. This contributes to the earlier
diagnosis of diseases and the proper use of medicines.
Furthermore, the SARS-CoV-2 Detection Kit -Multi- uses aunique, inhibition-resistant gene amplification enzyme, whichenables the elimination of the gene extraction andpurification processes. The optimization of enzyme functions
by adjusting reagent formulations reduces the time required
for the amplification process of extracted genes to less thanhalf of the traditional process. Processes from extraction tomeasurement can be completed in as little as 60 minutes.
Toyobo also contributes to overseas demand withenzymes for biochemical diagnostic reagents (blood glucose,cholesterol, creatinine, GOT and GPT, etc.).

Excellent biocompatibility
due to cellulosic membrane
Artificial kidney hollow fiber membrane
Toyobo provides artificial kidney hollow fiber membranewith the aim of contributing to the improvement oftreatment outcomes and quality of life of the growing
number of dialysis patients every year.
The hollow fiber membrane boasts an outstanding
waste removal performance with little degradation overtime. The membranes are made from natural cellulose,
which reduces the incidence of allergic reactions during
treatment and provides superior biocompatibility.
In cooperation with Nipro Corporation, we havedecided to establish a new plant that can integrate
production from hollow fiber production to processing andcommercialization into dialyzers. In order to meet the globally
increasing demand for dialyzers, we aim to start operations
in July 2024 and to enhance our production system.

Integrated production plant for CTA
dialyzers

Nipro Corporation’s CTA dialyzer thatuses Toyobo's hollow fiber membrane

TOYOBO REPORT 2022

040

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation

Sustainability Management
Message from Head ofCorporate Sustainability Division

The Basis of
Value Creation
Sustainability Management
Message from Head of Corporate Sustainability Division ...... 042
Management structure ............................................... 043
Our sustainability activities .......................................... 044(Feature) From the KAERU Project to KAERU ................ 045
E Environmental Policy and Activities

Climate Change ................................................... 047
Resource Circulation .............................................. 049(Feature) Contributing to the Development of Prototype
PET Bottles Made from 100% Plant-Derived Raw Materials . 051
Living in Harmony with Nature .................................. 054
Eco-Conscious Products ........................................ 057
S Social Contribution Policy and Activities

Fire Prevention Measures (FY2022) ............................ 059
Response to the Quality-Related
Misconduct Incidents (FY2022) ................................. 060
Safety and Disaster Prevention ................................. 061
Quality ............................................................... 063
Human Resources Management ................................ 065
Respect for Human Rights ....................................... 071
Supply Chain Management ...................................... 073
G Governance Policy and Activities(Feature) Roundtable Discussion with Outside Directors ... 075
Management Team and Skill Matrix.......................... 079
Corporate Governance ......................................... 083
Compliance ....................................................... 089
Risk Management / Data Security and Privacy ........... 091

041

TOYOBO REPORT 2022

Nobuya Fujiwara
Executive Officer
Head of Corporate Sustainability Division

People around the world understand the terms andmessages related to sustainability, and the importance ofcarbon neutral, a circular economy, and other concepts is
widely recognized. Recently, a new idea has risen to theforefront: nature positive.
Nature is a broad concept covering both animate andinanimate objects, and the word evokes a strong sense
wanting to restore the nature that people have lost.
From ancient times, people who have considered
humans as part of nature and thought of people andanimals along with non-living things like water andmountains all as part of nature can easily grasp themessage of “nature positive.”
Our corporate philosophy of Jun-Ri-Soku-Yu means
adhering to reason leads to prosperity. In this phrase,
reason has a broad meaning, which also means law ofnature. The nature positive message can also be said toalign with our philosophy, in the sense that it represents
following the law of nature.
Carbon neutral, circular economy, and nature positive
are all very closely related, and any initiatives for them must
be based on scientific evidence.
We announced our Sustainable Vision 2030 (long-term
vision) in May 2022 (▶p.15 “Sustainable Vision 2030”).
Following our long-term vision, we are promoting ascience-based innovation approach to realizing sustainable
management for our ultimate customers —people and the planet.
The long-term vision defines five areas where the

Toyobo group will focus on solving problems and clearlysets the direction for the group to move forward. One ofthose five areas is “employees well-being and human rights
in the supply chain.” We will develop an environment where
employees can fulfill their potential and continue to grow asworkers, and use engagement surveys to continue
improving the worksites. We will also broaden our CSR in
procurement activities and throughout the supply chain.
As an effort to contribute to a decarbonized society,
we formulated a plan to reduce GHG emissions with thegoal of achieving carbon neutrality in fiscal 2051.We
recently increased the reduction target amount for fiscal
2031 (▶p.47 “Climate Change”). We are making steadyprogress toward achieving our target using an internalcarbon pricing system and TCFD scenario analysis while
we are also preparing to earn SBT certification.
Nature positive initiatives to create “good conditions ofwater areas, atmosphere and soils and biodiversity” include
our efforts to provide water, atmosphere, and soil solutions,
reduce food loss and waste, and create sustainable foodproducts.
These activities contribute to resolving social issues
and create a competitive advantage for the company.
Applying the Toyobo group’s many solutions to solve social
issues and contributing to attaining the SDGs are directly
connected to the purpose of our existence. Our long-term
vision is to create new value in two ways --by helping realizea prosperous society where people can live with peace ofmind (social value) and by enhancing our corporate value.
We will share with stakeholders via various media ourprogress following our vision to create new value.

TOYOBO REPORT 2022

042

VisionOur sustainability activities
Since its founding, the group has practiced the idea ofgrowing its own business by contributing to the prosperityof society through a forerunner of today’s CSV concept,
based on the corporate philosophy of Jun-Ri-Soku-Yu(adhering to reason leads to prosperity), which was one ofConceptual Framework—Sustainability, CSV and ESG

Promoting positive
impacts

Creating social
value throughour business

CSV

Having a plus(+)
impact on society

ESG

Reducing emissions of greenhouse gases, Respecting human rights / Social andenvironmental considerations in the supply chain

Apr. 2020

Established the Corporate Sustainability Department. Incorporated ESG elements into management and strategy to enhance
information dissemination to stakeholders.

Controlling negative
impacts

Apr. 2020

Established the Sustainability Committee, chaired by the President (renamed the CSR Committee).

Not having a minus (–)
impact on society

Apr. 2021

Placed Corporate Sustainability Department under the direct supervision of the President.

Apr. 2021

Established a structure to promote the realization of carbon neutrality. Established the Carbon Neutral Strategies Council andthe Carbon Neutral Strategies Cross-Functional Team.

Apr. 2021

Established the Risk Management Committee, chaired by the President.

Apr. 2022

Established the Corporate Sustainability Division.

work-style reforms. We have also established a Risk
Management Committee under the Sustainability
Committee to enhance our sustainability risk management.
In April 2020, the Corporate Sustainability Department
was established as the organization responsible forformulating and promoting various specific measures,
disseminating them externally and facilitating external
dialogue. In April 2021, it was put under the directsupervision of the President, and in April 2022, theCorporate Sustainability Division was established.

Board of Directors

Board of Corporate Auditors

President

Board of Managing Executive Officers
and Controlling Supervisors

Safety and Disaster Management
Committee
Global Environmental Committee

Risk Management Committee
Chair:President
Members:Heads of Solutions Divisions
Officers responsible for staff andcorporate departments
General Managers of Risk Management
and Compliance Functions
Secretariat:Corporate Sustainability Department

Corporate Planning
Committee

Financial Control
Committee

UN Global Compact (UNGC)
In January 2020, Toyobo became a signatory to the
UNGC, and also joined Global Compact Network Japan,
which comprises Japanese companies and organizations
that are UNGC signatories. As a responsible corporate
citizen, this reflects our endorsement of the goal toresolve global issues and realize sustainable growth. We
also gather information through our participation in thesubcommittees of Global Compact Network Japan,
utilizing this in our day-to-day activities. From fiscal 2021,
we are participating in subcommittees such as ESG,
Supply Chain, Environmental Management, Kansai-based
regional subcommittee, Reporting Research. Toyobo willcontinue to contribute to realizing a sustainable society byfollowing the ten principles of the UNGC.

The Ten Principles of UNGC

Human
RightsInformation Committee
Research & Development
Committee

Compliance CommitteeIntellectual Property Committee

Corporate departments

Principle 1:
Businesses should support and respect
the protection of internationallyproclaimed human rights; andPrinciple 2:
make sure that they are not complicit inhuman rights abuses.

p.019-022,
p.071-074

Principle 3:
Businesses should uphold the freedom of
association and the effective recognition of
the right to collective bargaining;

LabourPrinciple 4:
the elimination of all forms of forced andcompulsory labour;

p.019-022,
p.070-074

Principle 5:
the effective abolition of child labour; andPrinciple 6:
the elimination of discrimination in respectof employment and occupation.
Principle 7:
Businesses should support a precautionary
approach to environmental challenges;

Environment

Principle 8:
undertake initiatives to promote greater
environmental responsibility; andp.019-022,
p.040,p.044,
p.047-058

Principle 9:
encourage the development and diffusionof environmentally friendly technologies.

Internal Control Committee

PL/QA Committee*
Export Reviewing Committee

the mottos of our founder, Eiichi Shibusawa.
Since fiscal 2021, we have been fully promoting
activities aimed at sustainability management. We haveset strategies and milestones, particularly focused on our
carbon neutral and circular economy initiatives.

Signed the UN Global Compact and joined the Global Compact Network Japan.
Announced our support for the TCFD recommendations.

Sustainability Committee
Chair:President
Members:Heads of Solutions Divisions
Officers responsible for staff
and corporate departments
Secretariat: Corporate Sustainability
Department

Reference
Material

Jan. 2020

Corporate Sustainability Department, Solutions Divisions, Corporate departments

Management structure
The group has established a Sustainability Committee(chaired by the President), which meets on a quarterly
basis to confirm the progress made in implementing
sustainability activities and to discuss new issues that need
to be addressed. In fiscal 2022, we discussed several
themes, including: (1) GHG emission reduction scenarios
as part of efforts toward carbon neutrality; and (2)measures and KPI settings based on the results andanalysis of employee engagement surveys as part of

Overview of
FY2022

Initiatives and their purpose

Solutions Divisions

Responding to society’s needs inour management and business development

The Basis of
Value Creation

Period(Addressing social issues)

Sustainability

Strategy and Practiceof Value Creation

Solutions Divisions

AntiCorruption

Principle 10:
Businesses should work against corruption
in all its forms, including extortionand bribery.

p.019-022,
p.089-090* Product Liability/Quality Assurance Committee

043

TOYOBO REPORT 2022

TOYOBO REPORT 2022

044

Strategy and Practiceof Value Creation

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation

FeatureFrom the KAERU Project to KAERU: Establishing a cultureof “continued change”

Previous KAERU activities
After failing to achieve the past four medium-term
management plans and experiencing compliance violation
incidents, volunteer officers came up with an idea from asense of crisis and the need for change. In April 2018, withthe support of a majority of its employees, Toyobo group
started the KAERU Project (kaeru means “to change”)
throughout the company with the participation of all officers
and employees.
In March 2019, we established the TOYOBO PVVs, acorporate philosophy framework that would serve as abanner for reform, and have been promoting reform fromboth the “strategy, system and structure” and “work andculture” perspectives, centered on instillation activities withthe participation of all officers and employees.
The March 2022 employee survey (3,668
respondents; 84% response rate) shows that 43% of the
respondents feel that they are experiencing “positivechange” in the workplace, and 83% of these
employees are participating in KAERU activities.
Through the initiatives to date, we have witnessed not
only tangible changes in terms of concrete measures andnumerical values, but also a genuine change in the atmosphere
within Toyobo and in the comments of employees.

Instillation of “TOYOBO PVVs”(Core of activities)

Strategy /SystemBehavior /Creation

Strategy, system andstructural reform(officers and corporate staff)

Work and culture reform(with full participation)

Strategy, system andstructural reform

FY2019FY2020Development of philosophy system

Future of KAERU
Toyobo group believed that the TOYOBO PVVs could
only be achieved by further expanding the change andestablishing a culture of “continued change.” That is
why we changed the name of the “KAERU Project” to“KAERU Department” in FY2023, and to continue theconstant reforms with the participation of all officers
and employees.

FY2021★ Establishment of TOYOBO PVVs (March 2019)
Formulation of growth scenario

FY2022

FY2023★ First organizational culture and job satisfaction survey
Sustainable Vision 2030
Formulation of 2025 Medium-Term Management Plan

Key issues
Improvement of officer teamstrength

Work and corporate
culture reform

Roundtable discussion (managerial positions) : https://bcove.video/3xd69iY (available only in Japanese)
Roundtable discussion (regular employees): https://bcove.video/3RS54VB (available only in Japanese)

Mitsuhiko Akiyama,
Nonwoven Materials
Operating
Department

Takeshi Mochizuki,
Internal Audit
Department

Atsushi Tsukada,Engineering
Department, Iwakuni
Production Center

Risa Tanaka, Production
Innovation Section andEngineering
Department, Iwakuni
Production Center

Tomoko Tamura,
Packaging Operating
Department

Satoru Ashitaka, Quality
Assurance Management
Department,
Environmental
Management
Department

Tokuyuki Higuchi,
Nonwoven Materials
Operating
Department

Q. How has the KAERU Project changed Toyobo?
A. Ashitaka In the past, we rarely discussed the work of people who performed different tasks in the same department, but there
is now an atmosphere in which people are willing to do so. Sometimes conversations can get a little heated, but I think that is okay.
Akiyama Our activities taught me the value of listening and communicating, and I participated in efforts to improve team strength(organizational development). As a result of my experiences with KAERU, I have made meetings in my own department more interactive. I
think it is a good thing that many different opinions are being expressed.

Q. How is the culture created through KAERU?
A. Mochizuki I think KAERU became easier to understand after the TOYOBO PVVs were created. The key word for the TOYOBO PVVs
instillation activities I took part in was “empathy.” A new sense of spontaneity within Toyobo has emerged since instead of doing
KAERU as they are told, the notion that “we are doing it because we can identify with it” is valued.

Reorganization
Establishment of performance
management system
Operation of new humanresource system

Reform of performance management system

Introduction of multifaceted
evaluation system
Revision of personnel
evaluations

Reform of human resource system
Digital strategy / Marketing strategy
TOYOBO PPVs instillation activities★ Relocation ofhead office

Concept of ideal work styles
Proposal and establishment of work styles
Business visualization/improvement

Business standardization/systemization

Creation of opportunities forawareness
Improvement and reform bytaking advantage ofawareness
Cross-departmental initiatives

Increasing those with awareness
Basic organizational development training: 91 participants
Facilitation training: 866 participants
Creating opportunities for awareness
Visualizing department operations: 100% progress
Drawing department operations in company-wide unified
workflow chart: 75% progress
Presentations and talk sessions: 21 held with a total of
approximately 1,470 participants
Dialogue and exchange workshops: around 180 held with a
total of approximately 730 participants(all officers, the president and employees, in each workplace,across departments, etc.)

TOYOBO REPORT 2022

Linking awareness to change
Identifying issues from visualization andworkflow chart: 550 cases
Supporting improvement: 205 cases out of
550 issues
Connecting change agent
Work style proposals by cross-departmental Approachteams: 23 subcommittees with a total of
155 participants(meetings, 3S, information sharing,guidance and training, business manners,
utilization of IT tools, paperless, officelayout)Q. What are some methods to expand KAERU activities?
A. Ashitaka We lowered the bar for participation so that anyone could start with something small at first.
Tamura A large number of people think that you have to be very passionate about the company in order to join KAERU activities. I
think it is important to approach employees and let them know that it is fine to participate even just by casually wanting to know
more about other departments.

Q. What are some of the challenges faced in promoting KAERU and what was learned from them?
A. Tsukada At first, I started out by thinking I could make changes very aggressively, but I had a hard time gaining the acceptance ofmembers. I decided to change my style to one in which I listened to and understood each workplace and everyone’s
circumstances and feelings before moving forward. I was conscious of trying to make sure that activities would also lead to thegrowth of the planning team members.

Enhancement of team strength (organizational development)

KAERU in numbers (April 2018–July 2022)

045

Looking back on the four years of the “KAERU Project”—Comments from planners and promoters
We held a roundtable discussion with seven of the 290 members who have been involved in the planning and promotion of the
KAERU Project. Here are some excerpts. You can watch the full roundtable discussion on our website.

Q. What are some positive effects from implementing KAERU?
Awareness

KAERU members (planners
and promoters): 8 full-time,
152 concurrent

Fullparticipation

KAERU supporters (former
members, supporters, etc.):

A. Tanaka Because my work usually finishes within the Iwakuni Production Center, it was great to be able to talk with everyone at thehead office about the company and learn different opinions.
Tamura Everyone in the subcommittee I belonged to was very earnest and kind. It was fun to see that the opinions I had freely
expressed being taken seriously and sincerely, and leading to positive changes in the company.

KAERU activity participants:

Q. How did you change?

KAERU(change)(improvements
and reforms)

130

2,471

* As of July 2022

A. Higuchi I honestly thought it would mean more work in the beginning. But after participating, I wanted to play a role in improving
the many problems in each department, including my own. I truly feel that things are gradually changing.

TOYOBO REPORT 2022

046

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Environmental Policy and Activities

E Climate Change
Basic approach

Targets and results

Initiatives

The Glasgow Climate Pact was adopted at the 26th
Conference of the Parties to the United Nations Framework
Convention on Climate Change (COP26) in 2021, with theaim of addressing the global issue of climate change. The
Pact incorporates a commitment to strive to keep the risein average global temperatures within 1.5°C, which would
have a less severe impact than the earlier target of 2°C, byutilizing the latest scientific know-how, and it thus set a defacto goal for the world to work toward. The Pactconfirmed that the next 10 years will be vitally important forrealizing this, and that it is important to reduce overall
global CO2 emissions by 45% by 2030 compared to 2010,
and to cut emissions to net zero by 2050.
Toyobo group recognizes that the need for climatechange response measures constitutes a very important
issue affecting society, and one which will have a major
impact on the company’s business. With this in mind,
Toyobo has set itself the target of achieving carbon
neutrality by fiscal 2051.

With regard to Scope 1 and 21 greenhouse gas (GHG)
emissions associated with our business activities, we haveset ourselves the target of realizing net zero emissions byfiscal 2051. In May 2022, we raised our intermediate-termtarget for fiscal 2031 to a target of reducing emissions by atleast 46% compared to fiscal 2014.
In order to contribute toward realizing the decarbonizedsociety, we are proceeding with efforts to reduce GHG
emissions from the entire value chain deriving from activities
that are related to our own business, while also working to
expand the contribution that we make toward reducing
GHG emissions through our products and services.

Reduction of Scope 1 and 2 emissions
We have formulated plans for Scope 1 and 2 emissions
reduction aimed at realizing carbon neutrality, and ouremissions reduction measures have taken concrete shape.
Based on the plans, we have raised our intermediate-termtarget for fiscal 2031 to a target of reducing emissions by atleast 46% compared to fiscal 2014, and we are proceedingwith emissions reduction activities.
Our emissions reduction activities include continuous
efforts in the areas of energy-saving activities andenhancing production efficiency. We are also implementing
a transition toward low-carbon energy use, by switching tofuels with lower carbon contents for our in-house electricity
generating equipment, and installing additional gas
co-generation system2 equipment. Besides the adoption ofrenewable energy, including photovoltaics and small-scalewind power systems, to help us become carbon-neutral,
and the electrification of production processes, we are also
exploring the potential for switching over to carbon-freefuels, including mixed combustion.

Targets(FY2031)

Results(FY2022)

Scope 1 and 2
GHG emissions(consolidated)

Reduction of at least
46% (compared to
FY2014)26% reduction(900 thousand
tonnes CO2)As regards the results in fiscal 2022, total Scope 1 and 2
GHG emissions came to 900 thousand tonnes CO2. While
sales increased by 11.4%, because we were implementing
energy-saving activities and measures to enhance
production efficiency, GHG emissions remained at roughly
the same level as in fiscal 2021.

Targets for Scope 1 and 2
Emissions Reductions from Business Activities
Conversion to carbon-freefuels, electrification of
production processes, carbon
offset and carbon-negative
measures, etc.

Fuel conversion promotion,
production efficiency
improvements, renewableenergy adoption, etc.

Initiatives

1 Scope 1: Direct emissions from owned or controlled sources
Scope 2: Indirect emissions from the use of purchased electricity,heat and steam

Reduction of at least46%

Net zero

2014

2031

2051

(FY)

964

Targets for the Entire Value Chain(including contribution through products and solutions
for the target year FY2051)

Present
FY2051

231

904
196

Scope2(Thousand tonnes CO2)

873
174

902

900

184

182

Introduction of renewable energy
We are proceeding with the installation of photovoltaic
power generation and small-scale wind power generation
facilities at each of our business sites, making use of roof
spaces and unused land.
Reduction of Scope 3 emissions
With regard to Scope 3 emissions, we are implementing
reduction measures mainly for Category 13 and Category
114 emissions, which account for a particularly large shareof Toyobo group’s emissions.
In the case of Category 11 emissions, we haveidentified GHG emissions hotspots when VOC recovery

GHG Emissions
Scope1(Thousand tonnes CO2)

2 Gas co-generation systems are systems that use natural gas to generate
electricity, with the waste heat being harnessed to produce steam and hot
water that are used in manufacturing processes, for supplying hot water,
for air conditioning, etc.

Promotion Structure (As of April 2022)
733

709

699

718

718

President

Expansion
GHG emissions throughout
the value chain

047

TOYOBO REPORT 2022

Avoided emissions

2018

2019

Aggregation scope: Consolidated

2020

2021

2022

(FY)

3 Category 1: Emissions from activities (such as manufacturing) relating topurchased goods and services
4 Category 11: Emissions from use of sold products

Expanding our avoided emissions
Most of the Toyobo group’s products are materials orintermediate goods. Many of these products contributetoward reducing GHG emissions, and we are performing
calculations to quantitatively determine the size of thecontribution. We will expand our contribution to reducing
emissions by increasing sales of forward osmosis (FO)membranes for osmotic power generation, reverse osmosis(RO) membranes for seawater desalination, renewableenergy materials, and recycled materials, in particular.
Structure to achieve carbon neutrality
In April 2021, Toyobo established the Carbon Neutral
Strategies Council and the Carbon Neutral Strategies
Cross-Functional Team (CN-CFT) to formulate andpromote strategies to achieve carbon neutrality.
In order to make steady progress towards therealization of carbon neutrality, we have also establishedworking groups (WGs), with members from different units
across the entire company, within the CN-CFT.
WGs’ main initiatives● Formulation of the plans for Scope 1 and 2 emissions
reduction (covering the period through to fiscal 2051)● Calculation and promotion of life cycle assessment, thecompany’s carbon footprint, and avoided emissions● Promotion of related innovation( ▶p.031 Disclosure Based on TCFD Recommendations)
Subcommittee Carbon Neutral Strategies Council

Comprising members of the Board of Managing Executive Officers andControlling Supervisors

Board of Directors

Reductionequipment is in use, for electric power and other utilities,
and we are implementing measures to control theseemissions. More specifically, we are working to substantially reduce emissions at the level of individual units, byenhancing the performance of the adsorbent materials anddesorbent materials used, and by building energy-saving
drive systems.

Sustainability
Committee
Addressing acomprehensive range ofissues relating tocorporate sustainability

VariousCommittees

Carbon Neutral Strategies Cross-Functional Team
Leader: Head of Corporate Sustainability Division
Secretariat: Corporate Sustainability Department
Participant: Solutions Divisions, Production Technology Division, Corporate
Planning Division, Innovation Division, Safety and Disaster
Management Division

TOYOBO REPORT 2022

048

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Environmental Policy and Activities

E Resource Circulation
Increasing consumption of natural resources and energy,
and increasing generation of waste, are becoming serious
problems throughout the world. As a result, there is a global
trend to realize a transition away from conventional
uni-directional resource usage toward the circular economy,in which resources are used in a sustainable manner.
Toyobo group is aiming to help realize the circular
economy through its business activities by implementing
initiatives to achieve the greenification (i.e., utilization of
biomass and recycled raw materials, and volume reduction)1of plastic in the value chain, reduce waste, and conserve
water resources.
1 This excludes some products where safety or lifespan is an issue.

Plastic resource circulation
Basic approach
Plastic is an indispensable material for modern society, but it
is also associated with issues such as the problem of waste,
depletion of natural resources, and its impact on climatechange. Against this background, the promotion of plastic
resource circulation is becoming increasingly important. In
Japan, April 1, 2022 saw the coming into effect of the Act on
Promotion of Resource Circulation for Plastics, the aim ofwhich is to realize a strengthening of comprehensive
resource circulation systems in relation to the plastics thatare used in so many different things in our daily lives.

Toyobo Group’s Initiatives in Relation to the Plastic Lifecycle and Resource Circulation

Biomass raw
materials
Crude rawmaterials

Production
Chemical recycling

Mechanical recycling

Toyobo group has been actively engaged indeveloping products and technology that reduce theimpact on the environment, to contribute to realizing thecircular economy. With regard to plastic products, we areproceeding with greenification in order to make thematerials that we provide sustainable. Besides increasing
the usage rate for biomass and recycled raw materials, weare also working on the commercialization of biomass
plastic that maintains high functionality. Furthermore, when
designing new products, we implement eco-conscious
design, by reducing the amount of plastic used or using
mono-material design. We are also working to re-use
materials including offcuts in our production processes.

When developing and commercializing related
technologies, we explore technologies from all over theworld, and we proactively collaborate with externalorganizations and other companies.
Having adopted the slogan “Catalyzing Circular
Economy,” Toyobo group is contributing toward therealization of the circular economy through a wide range ofinitiatives, and by fulfilling our responsibility to future
generations, we are aiming to realize sustainable growth.

Biomass raw materials

Eco-conscious design

It is anticipated that the use of biomass raw materials will reduce
dependence on fossil fuel resources as a raw material for plastics, andhelp mitigate climate change through the reduction of CO2 emissions.
Toyobo group is switching over to and expanding the use of biomass
raw materials and is working actively to develop new raw materials andmaterials.

Toyobo group is working to make its products more eco conscious.
Reduce• Reducing the amount of raw material needed, by developing andcommercializing thinner, lighter materials• Reducing the amount of packaging material used, by simplifying
packagingMono-material solutions
Increasing recyclability by having products consist of just one type of plastic

Related technologies
and products

Collaborative projects andother joint initiatives• BIOPRANA®
• VYLOAMIDE®
• HOLLOSEP®
• Polyethylene Furanoate(PEF) resin (currently
under development)• Partnership with Avantium N.V. to develop
PEF resin• Partnership with Suntory Group andAnellotech, Inc. to develop PET resin thatuses 100% plant-based raw material• Japan BioPlastics Association• Japan Plastics Industry Federation

Chemical recycling²

Through these initiatives,
we are realizing the greenification ofplastic products
Used plastic

Raw materials

Collaborative projects and other joint initiatives
Eco-conscious
designRecycling in the
production process

Re-useProduction

Plastic materials
Minimization
Consumption
Eco-conscious
design

Plastic products
Waste

049

TOYOBO REPORT 2022

We are one of the founders of R Plus Japan, Ltd., through which we are
actively promoting the development of chemical recycling technology to
produce high-quality recycled plastic by turning used plastic back into
crude raw material.

Production• R Plus Japan, Ltd. • Anellotech, Inc. • Japan Chemical Industry Association

Related technologies and products• SPACECLEAN®
• Highly heat-resistant, high-rigidity biaxially oriented polypropylene(OPP) film

Recycling in production processes
We collect airbag material offcuts and film product offcuts, and re-use
them as material for producing either the same type of product ordifferent products. In this way, we are able to reduce the amount ofwaste generated by our production processes.
Related technologies andproducts• ECOKURELEAF®
• ECOVYLOPET®
• COSMOSHINE SRF®

Collaborative projects andother joint initiatives• Resource circulation project(KAMISHINE® mold releasing film)

Mechanical recycling³

Responding to the issue of marine plastic waste and microplastics

We are working actively to develop and sell products that contributetoward conserving resources through the use of recycled materials.
We have also developed TOYOBO GS Catalyst®, an innovative
polyester polymerization catalyst that reduces PET degradation when PET
material is used repeatedly in closed-loop recycling such as“bottle-to-bottle” recycling. Utilizing this technology, and with a main focus
on PET, we are working to expand our presence in the global mechanicalrecycling technology and mechanical recycling materials markets.

With the aim of reducing the amount of marine plastic waste, Toyobo isparticipating in initiatives such as the Clean Ocean Material Alliance(CLOMA) established in Japan, and is undertaking the development
and dissemination of substitute materials.

Related technologies
and products• ECHORCLUB®
• Crisper®
• TOYOBO GS Catalyst®

Collaborative projects andother joint initiatives●

Licensing of technology to Indorama
Ventures Public Company Limited

Collaborative projects and other joint initiatives• CLOMA
2 Chemical recycling: This refers to chemically breaking down used plastic
to turn it back into crude raw material that can bereused.
3 Mechanical recycling: This refers to crushing and melting used plastic togenerate raw resin, which is used as a material forrecycled plastic.

TOYOBO REPORT 2022

050

VisionFeatureStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Contributing to the Development of Prototype PET Bottles
Made from 100% Plant-Derived Raw Materials

Toyobo group is actively promoting the switch to biomass
raw materials and the utilization of recycled raw materials,
with its goal to increase the ratio of green film products1 to
60% by 2030. We have used our core technologies todevelop a variety of eco-conscious products.
In December 2021, Suntory Group and Anellotech,
Inc. jointly developed a prototype PET bottle made from
100% plant-derived raw materials (100% bio-based PET
bottles) using one of our core technologies,
polymerization.2 Generally, PET resin is produced by thepolymerization of terephthalic acid and ethylene glycol,
which are both derived from fossil fuel resources.
Anellotech’s technology enabled to produce terephthalicacid efficiently from plant-derived raw materials. The
group’s success in polymerizing 100% bio-based PET resin
from bio-based terephthalic acid and bio-based ethylene
glycol contributed significantly to the development of 100%
bio-based PET bottles.
1 Promotion of the use of biomass and recycled raw materials, and volume reduction
2 Chemical reactions to produce desired polymers

always watching for any abnormalities in each and every process. As a result, we were able
to obtain the same quality. It was a true relief when all of the polymerization was completed.
I believe that the skills I cultivated since joining the company and the abundant
PET-related data and expertise that was accumulated over many experiences were key tothis success. In working on polymerization, I learned many things from my managers andthose in my department. I believe that it was this warm support that enabled us to succeed
even while being pressured not to fail.
I would like to continue engaging in various projects to further increase confidence in
Toyobo’s technological capabilities, and contribute to the development of products that
positively contribute to society.

Team members of 100% bio-based
PET resin project

Manufacturing Flow of 100% Bio-Based PET Bottles

Creating an organization that can pass on skills

Utilizing our coreadvanced polymerization
technology

Bio-based terephthalic acid100% Bio-based
PET (polyethylene
terephthalate)

Bio-based ethylene glycol

100% Bio-based
PET bottles

Fostering a culture of nurturing young engineers throughout
Functional Materials Production and Technology Operating Department

Both traditionallyderived from fossil
fuels resources

Polymerization

Pellets

Polymerization of 100% bio-based PET resin

Key to success is a thorough preliminary examination leveraging cultivatedknowledge and technical capabilities

Yuichiro Matsuura
Polymers Development Center,
Tsuruga Research andProduction Center

051

TOYOBO REPORT 2022

Creating bio-based terephthalic acid has been considered difficult. While it was successfully
generated using Anellotech’s technology, it resulted in only a few dozen kilograms as apolymerization sample, which was much smaller quantity than anticipated. When
implementing polymerization, we normally expect some failures, but with such a small amount,
not even a single failure is acceptable. For this reason, after thoroughly analyzing andpreparing the raw materials and equipment, respectively, the team determined thepolymerization conditions after numerous discussions. The actual polymerization was repeatedmore than a dozen times in small quantities in order to disperse the risk and produce as much
100% bio-based PET resin as possible. However, the increased frequency requires anawareness of variations in quality. Each operation to adjust the temperature or pressure was
performed carefully step by step to avoid such variations, and then fine-tuned according todifferences among lots of raw materials and in the daily temperature and humidity. I remember

Gaku Maruyama
General Manager of Tsuruga
Polymers Plant
and Manager of Polymers
Development Center,
Tsuruga Research andProduction Center

I am very happy to have contributed to the development of a 100% bio-based PET bottles
prototype with Toyobo’s technology, and I am proud of the members who accomplished this.
Toyobo’s facilities enable consistent technological development, from basic studies likethose in university laboratories to condition studies for commercial production in plants. Ourstrength lies in our extensive facilities and wealth of data and know-how based on many yearsof experience. We have earned the confidence of customers in our polymerization technology,
and they often entrust us with various polymerizations.
In such a privileged environment, our department actively assigns large projects to young
engineers in the second and third year of their careers in order to encourage them to grow as
professionals. We know that there is a lot of pressure and anxiety associated with “can’t-fail”
projects such as these, and we do our best to support them.
Throughout the projects, engineers deal with advanced technology in addition to thepolymerization work itself. As a result, I feel that the young engineers have learned andadapted the technologies that were inherited from predecessors at Toyobo.
I feel rewarded when I hear feedback such as, “I am glad I had this experience eventhough I made some mistakes,” or when I see young participants in this project using theirknowledge to help engineers who are less experienced.
The Functional Materials Production and Technology Operating Department as a whole
has this kind of “culture of nurturing young engineers.” I would like to continue to develop
human resources and contribute to the company’s growth by giving younger engineers work
they are responsible for, and providing them with the support to do so.

TOYOBO REPORT 2022

052

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Environmental Policy and Activities

Environmental Policy and Activities

E Resource Circulation
Waste reduction

Water resources

Basic approach
Each of Toyobo group’s production sites is implementing
initiatives to reduce, reuse, and recycle waste. By reducing
the amount of waste through measures such as recycling
non-conforming products and offcuts, and by finding ways
to effectively utilize, as far as possible, the waste that we dogenerate, we are striving to minimize the amount of waste
sent to landfill.

Basic approach
Water is a precious resource that keeps us alive andsupports our lifestyles, and conserving water resources is
an important global issue. Toyobo group contributes towardenhancing usable freshwater resources, both within andoutside Japan, through our seawater desalination products
and businesses. We also work to conserve water resources
through the recycling of water in our own businessactivities, and by keeping the amount of water that we use
to a minimum.

Targets and results
We have set ourselves the goal of reducing waste by 15%(compared to fiscal 2016), and we will keep the final
disposal (landfill disposal) rate down to less than 1% while
proceeding with waste reduction.

Results
Water Intake by Region(million m³)

FY2018FY2019FY2020

FY2021

FY2022

Initiatives

Targets(FY2031)

Results(FY2022)

Japan

90.8

86.4

89.1

83.4

84.5

Waste volume(consolidated)

15% reduction(compared to FY2016)

8% increase

Overseas

1.3

1.2

1.4

1.1

1.4

In fiscal 2022, the amount of waste increased by 8%compared to fiscal 2016. This was due to an increase inproduction volume. On the other hand, we achieved a
consolidated final disposal rate of 0.4%, continuing tosuccessfully meet our target in this regard.
Initiatives
To reduce the amount of waste, we are collecting offcuts
produced during manufacturing processes and reusing themas material for producing either the same type of product ordifferent products. We are also making effective use of items
such as used plastic packaging materials by recycling themin the form of pallets. Furthermore, when outsourcing thedisposal of industrial waste, we select outsourcing providers
that are capable of implementing recycling.
With regard to polychlorinated biphenyl (PCB) waste,
we are proceeding with appropriate disposal in asystematic manner. We are proceeding with systematic
disposal of electric facilities containing low-concentration
PCBs that are currently still in use.

053

E Living in Harmony with Nature

TOYOBO REPORT 2022

Total

92.1

87.6

90.5

84.5

85.9

Aggregation scope: Consolidated

Initiatives
Toyobo group recognizes that conservation of water
resources is an important issue in terms of ensuringbusiness continuity, and we are proceeding with efforts to
reduce the amount of water intake and promote water
recycling. By reusing waste such as cooling water used in
manufacturing processes, we are striving to reduce ourwater intake. We are now also evaluating water risk foreach of our production sites by using the AQUEDUCT
Water Risk Atlas compiled by the World Resources Institute.
In line with the TOYOBO Group Fundamental Policyon the Global Environment, we comply with environmental
regulations set by national and local government authorities
and rules set by environmental conservation agreements. In
addition, in our self-management standards, we have set
criteria which may in some cases be more rigorous than thestatutory requirements in terms of water discharge from our
production sites, while installing pollution prevention
equipment.

Our daily lives and our economy are supported by thebenefits that we receive from a wide range of living creaturesand ecosystems, or in other words, from biodiversity.
Toyobo group handles a wide range of chemical
products, and produces items such as textile products,
packaging containers, and raw materials forpharmaceutical products. To minimize the negative impactthat our operations have on the global environment and on
ecosystems, we are working to conserve biodiversity, byimplementing thorough management of chemical
substances, as well as striving to reduce our impact on theenvironment, including the atmosphere and on water area.

Chemical Substance Management Structure
Chemical SubstanceManagement Subcommittee
Secretariat(Quality AssuranceManagement
Department)

Technology
Department

Safety andDisasterManagement
Department /Environmental
Management
Department

Engineering
Departments

Environment &Safety Office

Solutions Divisions
Operating Departments

Chemical substance management
Basic approach
Toyobo group endeavors to manage chemical substances
appropriately throughout the product lifecycle (research,development, design, manufacturing, sales, use, anddisposal), in order to help conserve the global environment,
support disaster prevention, ensure workers’ health andsafety, guarantee product safety, and ensure conformity
with each country’s chemical substance regulations.
Chemical substance management structure
In order to promote appropriate management of chemical
substances, Toyobo group has established a management
structure at each production site. Each Solutions Division
supervises the activities of the production sites and groupcompanies under their jurisdiction.
In addition, we have created the TOYOBO Chemical
Substance Management Classification in compliance with
relevant laws and regulations—both international anddomestic—as well as client requests. This classifies thechemical substances we handle into five levels, and the
management procedures are specified for each level or“rank.” Use of substances in rank A and B is permitted only
when the risks are thoroughly assessed, mitigation
measures are taken, and the risk is deemed tolerable. We
are continuously making efforts to reduce the overall usage
volume of rank A and B substances by optimizing andreplacing these substances.

Group
companies

Manufacturing
Departments

ManagementatGroup
companies

Development
Departments

Management at
Production sites

TOYOBO Chemical Substance Management
Classification
Management
Category

Notes (relevant laws andregulations, etc.)

A

Substances requiring
particularly strict
management

Chemical Substances Control Law,1 Industrial Safety
and Health Act, Poisonous and Deleterious Substances
Control Act, Act on the Protection of the Ozone Layer
through the Control of Specified Substances, etc. and
Other Measure, Act on the Prohibition of Chemical
Weapons and Control, of Specific Chemicals, POPs,2
PIC,3 RoHS,4 REACH,5 etc.

B

Substances requiring
strict management

Chemical Substances Control Law, PRTR,6 Industrial
Safety and Health Act, Poisonous and Deleterious
Substances Control Act, REACH, etc.

C

Substances requiring
strict exposure
prevention measures

Chemical Substances Control Law, PRTR, Industrial
Safety and Health Act, Poisonous and Deleterious
Substances Control Act, Fire Service Act, etc.

D

Substances requiringexposure prevention
measures

PRTR, Industrial Safety and Health Act, etc.

E

OthersOther than A–D

Rank

1 Chemical Substances Control Law: Act on the Regulation of Manufacture andEvaluation of Chemical Substances
2 POPs (treaty): Stockholm Convention on Persistent Organic Pollutants
3 PIC (treaty): Rotterdam Convention on the Prior Informed Consent Procedure for
Certain Hazardous Chemicals and Pesticides in International Trade
4 RoHS: Restriction of the use of certain Hazardous Substances in electrical andelectronic equipment
5 REACH: Registration, Evaluation, Authorisation and Restriction of Chemicals
6 PRTR: Pollutant Release and Transfer Register

TOYOBO REPORT 2022

054

Strategy and Practiceof Value Creation

VisionChemical substance management activities
Recent years have seen new requirements to manage
chemical substances within the supply chain. Suchrequirements also apply in Japan, following the coming into
effect of the Act on the Regulation of Manufacture andEvaluation of Chemical Substances. (Chemical Substances
Control Law), as well as other regulations relating to chemical
substance management. Additionally, the Globally
Harmonized System of Classification and Labeling ofChemicals (GHS) has been adopted by the United Nations.
In view of this situation, Toyobo has introduced achemical substance management system covering every
stage from procurement through to manufacturing andsales. This is to realize green procurement while providing
accurate and prompt support to our customers. We
employ this system to investigate the use of regulated
substances and carry out surveys regarding content inproducts. The system also supports suppliers in creating
safety data sheets (SDS) for chemical substances.

Reducing environmental impact
Basic approachWith regard to chemical substances that are emitted into
the atmosphere or into water areas, Toyobo group has set
self-management standards that go beyond the statutory
requirements and reduction targets. Based on these, we
implement rigorous management and are working to
reduce emissions.
Targets and results
We have set ourselves the targets of reducing emissions
into the atmosphere of substances that have an impact on
the environment by 60%, and of reducing such emissions
into water area by 80%, compared to fiscal 2015, by fiscal
2031.
Initiatives

Targets (FY2031)

Results (FY2022)

VOC emissions(Japan total)

60% reduction(compared to FY2015)

29% reduction

Discharge ofhazardous substances
into water(Japan total)

80% reduction(compared to FY2015)

36% reduction

Japan total: TOYOBO CO., LTD. and domestic consolidated subsidiaries

In fiscal 2022, we succeeded in reducing emissions into theatmosphere by 29%, and emissions into water area by
36%, compared to fiscal 2015.
Initiatives
Toyobo group estimates and reports the amount ofemissions and amount transferred for chemical substancesthat are subject to PRTR. Based on the overall results thatare announced each year, we strive to utilize thisinformation effectively in reducing the amount of emissions
and the amount transferred.
We are proceeding with the improvement andreplacement of production equipment and installations, theimprovement of operating conditions, the installing ofequipment for removing relevant substances, and theadoption of substitute raw materials and auxiliary materials,
in order to reduce emissions.

Biodiversity
Basic approach
TOYOBO Group Fundamental Policy on the Global
Environment calls for the group to actively support andparticipate in environmental protection and biodiversity
conservation activities throughout society and in local
regions, as a good corporate citizen. In doing this, we strive
to minimize the impact of our business activities on
ecosystems. We are working to strengthen our initiatives
aimed toward the conservation of biodiversity byformulating our own Action Guidelines for Biodiversity
Conservation, and by expressing our support for theInitiative Based on the Declaration of Biodiversity by
Keidanren in 2022.
Action Guidelines for Biodiversity Conservation
We recognize that biodiversity is an essential part of asustainable society. As a group which continues tocreate the solutions needed by people and the earth,
we will endeavor to understand the impact of ourbusiness activities on the conservation of biodiversity,and strive to conserve the three types of biodiversity(species, genetic, and ecosystem diversity) throughvarious activities.
• We will work to understand how the group’s businessactivities depend on and affect biodiversity, andendeavor to avoid or minimize negative impacts.
• We will strive to give consideration to biodiversity
conservation throughout the entire value chain.
• We will contribute to conservation by promoting thedevelopment of biodiversity-conscious products andtechnology.
• We will support and promote conservation activities
through employee participation, and throughcooperation and collaboration with various

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Heritage sites, IUCN Protected Areas (Management
Categories I-VI), or Ramsar Convention wetland sites thatshould be conserved within 1 km of the production site,
and we have collated this information.
The biodiversity conservation activities that we undertakeat each production site are based on the relationship between
Toyobo group’s business activities and biodiversity and on thelocal environment at each production site.

stakeholders, including local communities and NGOs.
• We will comply with domestic and overseas
agreements on biodiversity.
Initiatives
We identify the relationships between our businessactivities and biodiversity, and then seek to make a positive
contribution through our products and solutions, minimize
the environmental impact of our business activities, andundertake biodiversity conservation activities incollaboration with local communities.

* Abbreviation of “Integrated Biodiversity Assessment Tool,” a
database of the world’s protected areas in which the United Nations
Environment Programme (UNEP) and other organizations participate.

Initiatives through our business activities
The Toyobo group utilizes a variety of environmental
protection technologies, including in-house developed VOC
treatment equipment, to remove harmful chemical
substances from water and gases emitted at our production
site. In addition, we have installed monitoring systems within
our production process to ensure that no harmful chemical
substances are released accidentally. We also strive toimprove our manufacturing processes so as to minimize theamount of these substances that is used and emitted.

Toyobo group’s business activities and its
involvement in biodiversity
The relationships between Toyobo group’s businessactivities and biodiversity are organized as shown in the
figure below.
In addition, at all domestic and overseas production
sites of our group, by using IBAT,* we have conductedsurveys to determine whether there are any rare species orimportant natural environments such as World Natural

Relationship between Business Activities and Biodiversity [Risks and Opportunities]
Life cycle ofbusiness activities

Design /Development

Procurement of
raw materials

Energy resources

InputsDistribution /Packaging

Production

Product use /Consumption

Recycling /Disposal /Incineration

Crude oil / Natural gas, etc.

Metals / Mineral resources

Crude oil / Iron, etc.

Renewable resources

Water / Plant-derived materials / Wood / Paper, etc.

Chemical substances

Chemical substances

Petrochemicals

Paper, etc.

Water, etc.

Climate change,
environmental
impact, habitat loss,
decrease inbiological resources,
and invasion offoreign species

Plastics, etc.
Products and services produced by each Solutions Division(Films and Functional Materials, Mobility, Lifestyle and Environment, Life Science)

Emissions into
the atmosphere

Outputs

Impacts(risk)
Impact on
ecosystems

Discharge into waters

BOD, COD, etc.

Waste

Waste generation

Waste

Climate change

Greenhouse gas generation

Environmental impact

Pollution of air, water and soil, and depletion of resources

Habitat loss /Decrease in biologicalresources
Invasion of foreign
species

Habitat loss /Decrease in biologicalresources, etc.

Examples of
eco-conscious
products

BOD, COD, etc.

Discharge to soil

Climate change
Contributions(opportunities) Environmental impact
Contribution
to biodiversity
conservation

CO², NOX, SOX, dust and soot, etc.
BOD, COD, etc.

Invasion of foreign
species

Greenhousegas reduction
Osmotic power
generation plant
employing FO
membranes

Habitat loss /Decrease in biologicalresources

Habitat loss / Decrease in biological resources

Impacts (risks)
resulting from theland use of thebusiness location

Invasion of foreign
species

Greenhouse gas reduction (Energy conversion / Energy conservation), and development of eco-conscious products
Resource recycling, waste reduction, appropriate chemical substance management, use of renewable resources,and development of eco-conscious products
Activities to reduce the above-noted environmental impacts, promotion of awareness of CSR Procurement
Guidelines and White Logistics, control of genetically modified organisms, social contribution activities, and forest
conservation activities

Resource
recycling
BREATHAIR
Use ofplant-derived raw
materials
BIOPRANA ONY

Compiled with reference to the “Map of Relationships between Corporations and Biodiversity” published by the Japan Business Initiative for Biodiversity.

055

TOYOBO REPORT 2022

TOYOBO REPORT 2022

056

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Environmental Policy and Activities

E Eco-Conscious Products
Basic approach
As clearly stated in the TOYOBO Group Charter ofCorporate Behavior, Toyobo group strives to save energy
as well as reduce and re-use resources. We also develop
products and technologies that help reduce the impact on
the environment.

Mechanism for certification of
eco-conscious products
These products and technologies are defined andevaluated under our Eco-Review system. This systemevaluates the following aspects at every stage in the
product life cycle: preventing climate change, reduction ofchemical substance use, resource conservation, waste
reduction, and other environmental contributions. Productsthat meet these standards are certified as ECO-PARTNER
SYSTEM® products. Since the Eco-Review is carried out at
each stage in the product life cycle—from R&D tocommercialization—issues that require improvement froman environmental protection perspective are identified andRO membranes for seawater desalination

improved at an early R&D stage prior to the subsequent
review. Consequently, we are contributing to theenvironment as we develop our products and technologies.

Targets and results
Initiatives
Sales ratio held by
ECO-PARTNER
SYSTEM® products(TOYOBO CO., LTD. only)

Targets(FY2031)

Results(FY2022)

40%

33.8%

In fiscal 2022, sales of ECO-PARTNER SYSTEM® products
accounted for 33.8% of the company’s total sales. Goingforward, we will continue to create eco-conscious products.
In addition, we are considering expanding the scopeof application of the certification system to include groupcompanies, and have begun to identify issues in order tocalculate the sales ratio held by ECO-PARTNER SYSTEM®
products for the entire group.

Globally, water shortages are becoming an increasingly
serious problem. We provide hollow fiber reverse osmosis(RO) membrane, which enables desalination to be performed
with low energy consumption, to countries throughout theworld, especially in regions where there is inadequate accessto fresh water. By comparison with the conventional
multi-stage flush (MSF) method, Toyobo’s method using RO
membrane makes it possible to achieve a substantial
reduction in CO2 emissions.
Toyobo’s RO membrane is made mainly from biomass
material, and it has a number of unique features, including
long product lifespan of eight years or more, and being able
to produce high-purity fresh water. Additionally, the superior
chlorine resistance of the membrane material keeps
maintenance costs down.
Going forward, we will be expanding production of RO
membrane so that it can be used to meet the daily waterneeds of around 10 million people through seawater
desalination (this is the target for Sustainable Vision 2030).

Biomass Mark* for ourhollow fiber membrane
in HOLLOSEP®
Seawater desalination plants

Avoided emissions (reduction of CO2 emissions)

Approx.

9 million t-CO

2

Amount of fresh water produced

Approx.

900 million m³

Estimated value calculated by Toyobo based on theassumption that the RO membrane elements sold by
Toyobo in fiscal 2022 are used for eight years.

* The Biomass Mark is allowed to be labeled on products and materials containing a certain percentage of biomass after the composition, proportion,
quality, and safety of the raw biomass is verified by a third-party organization composed of academic experts.

VOC recovery equipment
Eco-Review Evaluation Items

Review and Certification Process

Design anddevelopment• Designing eco-conscious products

Raw materials• Using recycled materials and alternative
raw materials to petroleum-based raw
materials• Considering biodiversity

Production• Using energy-saving and clean energy• Reducing water use and effectively using
raw materials• Reducing waste

Distribution andpackaging• Reducing transportation energy• Reducing packaging waste

Use andconsumption• Reducing resource consumption• Increasing lifespan

Recycling, disposal,
and incineration

Person in charge ofdevelopment
Apply
Secretariat

審査・認定プロセス
Review
Approve• Reducing hazardous chemical emissions• Biodegradability and recyclability

Certification• Chair of Global
Environmental Promotion
Committee• Members of Global
Environmental Promotion
Committee• General Manager ofBusiness Unit
• Supervisor ofEnvironmental Safety
Management at Production
Center• Implementation Officer• Chair of Global
Environmental Promotion
Committee

Sales by Evaluation Standard of ECO-PARTNER SYSTEM® Products
Five evaluation standards
Preventing climatechangeResource conservation¥45.7 billion¥28.4 billion

Waste reduction

Reduction of chemical
substance use

Other environmental
contributions¥49.3 billion¥44.0 billion¥29.1 billion

Toyobo’s VOC recovery equipment is used around the world tocontrol emissions of volatile organic compounds (VOCs), which
are feared to affect the atmosphere and human health.
Our VOC recovery equipment incorporates an innovative
built-in activated carbon fiber K-FILTER®, which is used in various
industries to recover dichloromethane used in the lithium battery
separator manufacturing process, and to control emissions andrecover ethyl acetate (which is used in dry lamination andadhesive processes), toluene, and IPA etc.
Our activated carbon fiber K-FILTER® has superior
adsorption and desorption capabilities and contains lessimpurities than granular activated carbon, enabling high-quality
solvent recovery and excellent energy efficiency. Our VOC
recovery equipment can reduce carbon dioxide emissions byapproximately 40 to 80% compared to conventional VOC
combustion equipment when treating combustible VOCs such as
ethyl acetate and toluene (according to research by Toyobo).
Going forward, to contribute toward the realization of thedecarbonized society, we will expand applications of our VOC
recovery equipment and sales promotion of our nitrogen desorption
type VOC recovery equipment, which is more energy efficient.

VOC recovery equipment

VOC recovery amount (Dichloromethane)

Approx.

3 million tonnes

Estimated value, calculated by Toyobo, of the amountof VOCs (specifically, dichloromethane) that would berecovered if our VOC recovery equipment sold by
Toyobo in fiscal 2022 is operated for 15 years.

Note: Net sales in the figure include duplicates because they are determined based on multiple criteria.

057

TOYOBO REPORT 2022

TOYOBO REPORT 2022

058

Strategy and Practiceof Value Creation

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Fire Prevention Measures (FY2022)
In the wake of the September 2020 fire accident at the Toyobo
Inuyama Plant, the Toyobo group is taking two main approaches toimproving safety prevention. We are fostering a culture of safety byclearly establishing safety as the highest priority and revising our
education structure. We are also fortifying our safety infrastructure byformulating a plan to enhance our safety and disaster prevention
equipment and management and by developing specific PDCA cycles.
Fostering a culture of safety
We had always stated that worksite “safety is the highest priority,”
but we now recognized that the problem was that management
involvement was insufficient. To foster a deeply imbedded cultureof safety, in April 2022 we announced the New Safety Declaration.
The New Safety Declaration clarifies for all employee ourmanagement stance of placing the highest priority on safety
related to occupational labor and conditions, our products, and ourequipment. Measures to change our awareness of safety issues
include revamping the position-based safety education system
and introducing safety workshops and education programs for
management level employees led by external organizations. A
safety workshop for management-level employees was held in
December 2021, with all of the participating company executives
having the opportunity to study safety conditions at various
companies.
We distributed video footage of the Inuyama Plant fire to each
worksite to stimulate discussions about safety and to ensure thelessons learned from the disaster are not forgotten.

Response to the Quality-Related Misconduct Incidents (FY2022)

In fiscal 2022, we also launched a project with safety
specialists advising on the formulation of disaster prevention
management standards for fire prevention that will apply across thegroup. The standards were carefully constructed to allow sites to
conduct their own inspections in accordance with their specificconditions. We have also added a system for safety specialists to
conduct regularly scheduled inspections of the operating
conditions at each worksite.
A Medium-term Safety and Disaster Prevention Plan has also
been created to avoid the situation of short-term budget planning forbusiness operations leading to postponements of measures andspending for safety and disaster prevention. We worked withexternal specialists to create detailed risk maps for 15 sites forevaluating the natural disaster risk at each site and to guide theimplementation of disaster countermeasures. The risk map will also
be used in our planning for future production sites. In addition, weplan to review the disaster prevention measures at all sites andidentify sites requiring additional measures for fire containment, suchas to prevent a fire from spreading to adjacent buildings. We arepreparing a budget with ¥18.6 billion in additional funds to be used
for prevention measures by fiscal 2026.
We are also setting up disaster prevention training spaces atall of the group’s primary production sites. In August 2021, theIwakuni Production Center conducted a training program to raiseawareness of disaster prevention that included simulating past
accidents with reenactments. We plan to set up and utilize more
safety training spaces in the future (▶p.061: Safety and Disaster
Prevention).

Fortifying for safety infrastructure
We continue to apply the PDCA cycle to fortify our safety anddisaster prevention infrastructure. The group established theDisaster Management Department and the Occupational Safety
Department under the Safety and Disaster Management Division,
which is directly overseen by the president, in fiscal 2021.
Subsequently, to improve the efficiency and simplify theorganization of our safety management, we reorganized thestructure and the Safety and Disaster Management Department
and Environmental Management Department were brought under
the Safety and Disaster Management Division in April 2022.

Steps to Enhance Our Culture of Safety
FY2022

Reestablish sharedvalues andcommunications

FY2023

FY2024
Increasing independent stage1

Emerging interdependent stage1

Top management commitment statement
An expression of management commitment and action, and a demonstration of tangible leadership(Declaration of Action, on-site dialogues)
Workshops for specific position levels (all levels

broaden to group companies and overseas sites)

1 This expression is a quote from the dss+ Bradley curve of the stages of safety culture development.
2 3S: Sort, straighten, sweep

TOYOBO REPORT 2022

Full-scale investigations into the incidents
As part of our comprehensive investigation following the discovery of
quality issues with the PLANAC® products, in spring 2021 Toyobo
conducted an anonymous questionnaire survey of all 10,101 group
employees and officers (excluding the already completed
questionnaires of the Engineering Plastics and certain otherdepartments) to determine if there was knowledge of any additional
product quality issues. The company received 7,391 responses(response rate; 73.2%), in which were reported 111 cases requiring
additional investigation. A follow-up questionnaire was then conductedof respondents who had provided their name, but since more than halfof the responses were anonymous, the company issued newquestionnaires requiring respondents to provide their name.
The follow-up questionnaire was distributed in summer 2021
to 9,452 group employees and officers in Japan and overseas,from which 8,866 responses (response rate: 93.8%) were received.
We confirmed from the questionnaire responses that there
were some agreement violations. We discussed the issues with theStrengthening the quality risk management system
The company responded to the quality-related misconduct
incidents by adopting a “three lines of defense” structure at thestart of fiscal 2022. The multi-layered structure for detecting andpreventing quality-related misconduct positions the businessdivisions as the first line of defense and the Quality Assurance
Division and Internal Audit Department as the second and thirdlines of defense.
The Quality Assurance Division, which is the second line ofdefense, identified improper inspections and other items as
significant quality-related risks, and led and assisted risk
assessments at each business unit. The division formulated
measures to reduce risk and has begun assisting in the applicationof the measures.
The Internal Audit Department, the third line of defense,
created a Risk Management Audit Team to perform quality audits
for the first and second lines of defense. The department collects
information on the operation status and current issues of the
Quality Assurance Division and the business divisions, andexamines the best approach to coordinating audits.
In the second half of fiscal 2022, the Internal Audit
Department began a first line audit with the Quality Assurance
Division. The department also audited the Quality Assurance
Division and had a frank dialogue with the division about
expectations for its supervision of the Solutions Divisions.
We also implemented data integrity (DI) measures related toquality, including automating the inspection report processes of the
Solutions Divisions’ Quality Assurance Departments to reduce
human error, among other initiatives (▶p.063: Quality).

First line

Second line

Third line

Risk Management by Business Divisions

Risk Management by Corporate Departments

Audit by Internal Audit Department

Risk identification,
countermeasure creation,
monitoring

Internal audits

FY2025

3S2 activities (production innovation, small group)
Continuously improve ability to identify on-site risks, develop
human resources
capable of Ｋな人づく
noticing andり
rectifying abnormalities
異常に気付き、改善できる新３059

Status of the engineering plastics department
Following the quality-related misconduct incidents to PLANAC® andother products, we have been in contact with our customers
individually have and reacquired certification from Underwriters
Laboratories (UL) for some of our products.
We also proceeded to investigate the status of all of our productthrough questionnaires and other methods. Any quality-related
matters in the Engineering Plastics Department that were consideredserious issues, such as violations of our agreements with customers,
were considered priority issues and reported individually to all
associated customers.
Our investigations and confirmations with the cooperation of ourcustomers have found no significant defects related to product safety
or basic functionality. We are continuing to make improvements.

customers and received confirmation that the issues were notrelated to quality. Including this result, at this time we have not
identified any serious quality-related issues.
We recognize that violations of agreements with customers,
non-observance or the lack of internal rules, and concerns aboutcompliance awareness are priority issues that must be addressed.
We will make these issues known internally and use the findings
from the questionnaires to continue recurrence prevention
measures at all of the group’s work sites and organizations.

The Three Lines Model for Quality Control

Mostly dependent stage1
Fostering a cultureof safety(employee behavior
and awareness)

The Toyobo group is responding to the quality-related misconduct
incidents discovered related to the PLANAC® and otherengineering plastics in 2020 by firmly establishing “manufacturingthat fulfills our promise to provide safety and security from thecustomer’s perspective” and by fortifying the inspection and quality
confirmation mechanisms in the group’s risk management system.

Dailybusiness
execution

Checksandseparationof duties

Role and responsibility

Role and responsibility• Responsible for responding and reducing to risk
during events and identifying and reducing withsupport and advice from Corporate Departments• Responsible for implementing and establishingdivisional risk countermeasures, and reviewing thestatus of the countermeasures• Identify overall and group-wide risk and formulate
and apply countermeasures from a perspective
independent from business operations• Responsible for horizontal deployment ofrecurrence prevention measures• Monitor the status of risk response and provide
support and advice

Business Division/Production Site

Quality Assurance Division

Role and responsibility• Audit the application and status of first andsecond line risk reduction measures from an
independent and objective perspective• Responsible to management for assuring theeffectiveness of all processes

Internal Audit Department

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VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Safety and Disaster Prevention
Approach and policy

principle. The Safety and Disaster Management Promotion
Committee meets six times a year, to discuss and decide on
concrete matters and manage activity progress status, inaccordance with the Basic Policy. The Committee alsoorganizes teams, composed of the committee chair andcommittee members, which visit individual production centers,
plants, and group companies to perform safety and environmental
assessments and on-site inspections of activity status.
Furthermore, each production center and plant has its
own Health and Safety Committee, which is composed of
employee representatives, managers and experts, and whichinvestigates and deliberates on matters relating to employee
safety, disaster prevention and health, including risk
assessment status, at each workplace.
Labor union representatives also participate in thediscussions of the Safety and Disaster Management Promotion
Committee and the Health and Safety Committee.

Toyobo group recognizes that ensuring health and safety is aprecondition for successful corporate activities. We haveformulated the TOYOBO Group Basic Policy on Health & Safety,
which applies not only to our employees but also to thepersonnel of partner companies (contractors), and we are
striving to build a safe workplace environment. Our safety
declaration for fiscal 2023 is “We will thoroughly implement‘putting safety first,’ and we will emphasize labor safety,
environmental safety, product safety, and equipment safety.”

Structure
In order to achieve steady progress in initiatives relating tosafety and disaster prevention, which are the most importantmanagement issues, we have established the Safety andDisaster Management Division, which is a body reporting
directly to the President, with a high degree ofdecision-making authority.
We have also established the Safety and Disaster
Management Committee and the Safety and Disaster
Management Promotion Committee under the Sustainability
Committee, which deliberate on matters relating to safety anddisaster prevention activities, decide on policies, verify progress,
and report to the Board of Directors. The Safety and Disaster
Management Committee is chaired by the Executive Officer who ishead of the Safety and Disaster Management Division, and its
members comprise the Co-COO, Senior Managing Executive
Officer and Managing Executive Officers responsible for overseeing
individual divisions and departments. In addition, Corporate
Auditors and other persons appointed by the committee chair canalso attend meetings of the committee as observers, and express
their views. Ordinary committee meetings are held once a year in

Targets and KPIs
We will strive to prevent disasters and accidents by clarifying
and thoroughly complying with basic safety throughout theentire Toyobo group.

KPIs and Results
Initiatives

KPIs

Targets

Results(2021)

No. of major
0 accidents
0 accidents
accidents*
per year
Frequency rate ofworkplace accidents
0.25 or
2. Prevent workplace
0.42
resulting in lost
less
accidents
workdays(enhance safety forpeople, equipment
No. of fires or
0 accidents
1 accident
and operations, andexplosions
per yearpromote security and No. of abnormal events, 0 accidents
2 accidents
disaster prevention)
accidents (spills)
per year* Major accidents: Defined according to internal standards based on thedefinition stipulated by the Ministry of Health, Labour and Welfare
1. Build a culture ofsafetyToyobo Group Structure for Safety, Disaster Prevention, and the Environment
ToyoboToyobo group

Activity Planning /Implementation /Management

Solutions Divisions

Production
Center /PlantsHealth and
SafetyCommittee
Environment &Safety OfficeSustainability Committee

President(Chair: Head of the Safety and Disaster Management Division)(Members: Heads and Controlling Supervisors1)
Safety and Disaster Management Committee(Chair: Head of the Safety and Disaster Management Division)(Members: Heads and Controlling Supervisors2)
Global Environment Committee

Safety and Disaster
Management Promotion
Committee

3

Global Environment
Promotion Committee

3

TOYOBO Group Environment
and Safety Committee

Policy Formulation and Auditing(Secretariat4)
Safety and Disaster Management Department /Environmental Management Department

Making people, equipment,
and processes safer
We identify major sources of potential danger and take steps
to prevent major accidents from occurring. We clarify onsite
risk, and we make improvements to equipment andprocedures on the basis of risk assessments and research
procedures. We then include this information in procedure
manuals and utilize it in safety education. In cases when an
accident does occur, by investigating it, we help to prevent
similar accidents from occurring in the future. Additionally,
with regard to accidents that occur at other companies andworkplaces, we check whether there is a similar risk at ourown workplaces and take steps if necessary.
In April 2020, we began to issue “Safety and Disaster
Prevention News.” Using the lessons from accidents anddisasters that have actually occurred in the past, it helps tospread awareness by providing easy-to-understandexplanations, supported by illustrations, regarding key points
to note to conduct operations safely, and how to respond in
the event of an accident.

Promotion of disaster prevention
Learning from fire accidents, we have revised the content of
our training drills so that they are more practical, and haveendeavored to ensure that all workers are able to participate
in them at least once a year, in order for everyone to be able

to protect their own workplaces in the event of fires.
We will promote reliable measures to enhance disasterprevention at all sites with the aim of creating sites that do
not allow fires to occur, and that prevent casualties andminimize other damage if they do occur. To this end, we haveformulated fire prevention equipment guidelines and disasterprevention management standards, and we are working to
reduce the risk of fires.
With regard to natural disasters, we will continue to
implement disaster mitigation measures by reinforcing
buildings against earthquakes, improving office and plant
infrastructure, and conducting emergency response drills.

3S activities and training
We undertake 3S (sort, sweep, and standardize) activities,
which are the foundation for safety and disaster prevention
activities, on a company-wide basis. We have put in place asafety and disaster prevention training system that is sharedthroughout the company, and we provide the safety anddisaster prevention training that is needed at each level.
In addition, with the aim of realizing effective safety anddisaster prevention knowledge training, we have installed
Disaster Prevention Training Workshops—training spaces inwhich panel-type displays play a central role—in all
production centers, and we have established Disaster
Prevention Experience Training Facilities at key sites.

Establishment of a disaster prevention training center at
the iwakuni production centerWith the aim of looking back on and learning from
accidents that have occurred in the past, and preventing
the lessons from being forgotten, in August 2021 a new
Disaster Prevention Training Center was opened at the
Iwakuni Production Center, where personnel canexperience the terrifying nature of accidents and make useof simulation equipment.
This is a training center, where, for example, besides
being able to experience the awfulness of fires andexplosions, such as dust explosions and fires caused bystatic electricity, it is also possible to experience the horrorof accidents that involve being pulled into machinery. The
center also shares case studies of accidents that haveoccurred in Toyobo group in the past.

To provide additional opportunities for personnel toenhance their knowledge of and awareness of fires andsmoke, and to pay more attention to safety and disasterprevention, we have started internal training and arepromoting internal education. Going forward, we will beconsidering how to put in place a framework that can beutilized effectively throughout Toyobo group.

Each Company

1 Deliberates and decides policy on safety and disaster prevention 2 Deliberates and decides policy on the global environment
3 Deliberates and decides specific matters, and manages progress 4 Supports activities, provides information, and conducts interdepartmental coordination

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062

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Quality
Approach and policy

Structure

Targets and KPIs

Product safety promotion activities

Toyobo group is striving to ensure customer satisfaction
and win customers’ trust, not only through the safety of our
products and services, demonstrating concern for theenvironment and maintaining compliance with relevant laws
and regulations, but also through high quality standards. In
order to achieve this, we have formulated the TOYOBOGroup Basic Policy on Quality Assurance and the TOYOBOGroup Basic Policy on Product Safety. To safeguard thequality and safety of the products and services that we
provide, we have established an appropriate management
system, we perform quality inspections using suitableprocedures, and we also strive to ensure that data isproperly handled.
Responding to the quality-related misconduct
incidents that were discovered in our engineering plastics
business in fiscal 2021, we are putting new systems inplace in order to win back the trust of our business
partners and of all other stakeholders. (▶p.60 for moredetails of “Response to the quality-related misconduct
incidents (FY2022)”)

Toyobo group has established the PL / QA Committee as astanding committee that oversees product liability (PL) andquality assurance (QA). The chair of the committee is theControlling Supervisor Director of the Quality Assurance
Division, which comprises persons in charge from eachbusiness and persons in charge (executives) from thecorporate staff. Ordinary committee meetings are held
twice a year in principle, and meetings of the PL/QA
Standing Committee comprising general managers are held
six times a year. The committee met eight times in fiscal2022.
We established the new Quality Assurance Division on
April, 2021 as one of the measures to prevent recurrence of
inappropriate conduct. Under the new division, we have placed
the Quality Assurance Management Department, and also the
Quality Assurance Departments which are in charge of Solutions
Division. By establishing the independence of the quality
assurance related departments, a function which was previously
implemented in each business division (Solutions Division), we
have strengthened its control over the business divisions. In
addition, the Quality Assurance Management Department has
been given the authority to guide and suspend thedevelopment, production, and sales of the company and groupcompanies regarding product safety(PS) and QA of Toyobo
group, and we are working to reconstruct an appropriate quality
management system and strengthen governance.

We will increase customer satisfaction by practicing quality
management throughout our entire supply chain, including
upstream areas, and ensuring quality that can be trusted.

For each department and group company, we conduct PL /QA assessments carried out by the Quality Assurance
Division, which has been made independent of thebusiness divisions, or by QA personnel from different
departments, to verify and improve PS activities. Moreover,
we have established criteria for assessing PS and PL risk,
and based on these criteria, we carry out inspections at
each stage, from product development to sales, striving to
reduce risk.
All possible measures are taken to ensure PS, andtraining drills are also conducted on a regular basis at all
business divisions based on PL incident scenarios. PS
remains a crucial theme throughout the whole of the group,
and we will continue to mitigate risk as much as possible
and strive to fulfill our social responsibility.

Product Liability（PL）Response System
TOYOBO Group Basic Policy on Product Safety
PS response
determinationof policy

PL/QA Committee
Chair: Head of Quality Assurance Division

Deliberation anddetermination ofReporting
PS response
measures
Implementation of
PS measures

Implementationof productsafety review

Implementationof PL response
drill

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TOYOBO REPORT 2022

Before and After Reorganization of the QA Structure
After reorganization

President

Quality
Assurance
Division

PL/QA Promotion Committee
Chair: Head of Quality Assurance Division

PL/QA Assessment

Bioethics Review Committee
Chair: General Manager of Quality
Assurance Management
Department
PS Review Board
Chair: General Manager of Quality
Assurance Management
Department
PL Response Drill

Quality Assurance Management Department
Films and Functional Materials Quality
Assurance Department
Mobility Quality Assurance Department
Lifestyle and Environmental Quality
Assurance Department
Life Science Quality Assurance Department

Before reorganization

Sales andMarketing
Division
President

Films and Functional
Materials Solutions
DivisionFilms and Functional
Materials Quality
Assurance
Department

Mobility Solutions
Division

Mobility Quality
Assurance Department

Lifestyle andEnvironmental
Solutions Division

Lifestyle andEnvironmental Quality
Assurance Department

Life Science
Solutions Division

Life Science Quality
Assurance Department

Production
Technology Innovation
and Quality
Assurance Division

Quality AssuranceManagement
Department

KPIs and Results
Initiatives

1. Realize stablesupply, contributeto solutions forcustomer issues,
meet customer
needs
2. Ensure productsafety and quality

KPIs

Targets

Results(FY2022)

No. ofincidents
related to
products*

0 incidents per
year

0 incidents

Implementation
status of PS
and QA
training

100%

100%

* Incidents related to products: Defined according to internal standards
based on the definition stipulated by the Ministry of Economy, Tradeand Industry

Quality assurance
Employees have shared access to the Quality Assurance
Manual, which describes the basic approach and code of
conduct for all employees when implementing Toyobo
group’s development, production and sales activities, and use
it as the basic philosophy for Toyobo group manufacturing.
In addition, we have formulated the Quality Assurance
Guidelines, and we are aiming to develop a system thatguarantees quality. Moreover, a QA system is established foreach product and service so that quality and product safety
can always be guaranteed at each stage. In September
2021, we implemented a revision of the Quality Assurance
Guidelines, adding definitions for online systems that will
reduce manual processing and manual intervention whenhandling quality data, so as to eliminate opportunities fordata falsification from the perspective of enhancing datareliability. Additionally, checks are repeatedly carried out bybusiness supervisors, related internal and external parties,
and experts, to ensure that no incidents occur in the market.

Product safety and quality assurance
training
We implement PS and QA training not only for new
employees and new managers, but also for other
employees at each level.
In fiscal 2022, we conducted training for new
employees and department-specific training throughe-learning in a packaged format, with four online courses
over the year. In all, 302 people received this training. In
fiscal 2023, we intend to begin implementing case study
sessions focused on quality-related misconduct incidents,
to further enhance awareness.
As part of our efforts to strengthen ourawareness-raising system in response to quality-related
misconduct incidents, we have designated November as
Quality Month, and this is implemented annually. During thisperiod, we conduct various awareness-raising activities,
including the displaying of messages from the President
relating to QA in each business site using digital signage
and posters, and the holding of seminars on PL / QA.

TOYOBO REPORT 2022

064

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Human Resources Management
Basic approach
In line with our own corporate growth strategy, Toyobo
group aims to realize the TOYOBO PVVs corporate
philosophy framework, which is centered around humanresource management in which “each individual can workwith a sense of growth, pride, and satisfaction.” To achievethis, we respect employee individuality and support work
practices that allow employees to demonstrate theirindividual skills, and build environments where a diverse
work force can thrive.
As an example, we have formulated and shared a
Human Resources Development Plan and we are increasing
the amount we invest in employee education. We prohibit
inappropriate behavior, such as various forms of harassment,in our workplaces and ensure there is no discrimination in
the way we employ, evaluate, and treat employees.

each business site and group company, which leads to theformulation and execution of human resourcesmanagement plans. Regarding key issues in the annual
management plan, reports are made to the relevant
executive officer each quarter and the issues are alsodeliberated on by the Sustainability Committee. In addition,
important measures are discussed by the Board ofManaging Executive Officers and Controlling Supervisors
and Board of Directors.

Targets and KPIs
Targets
Toyobo group will build an organizational structure for theentire group that enables employees to work easily and feelsatisfaction with their work, that ensures fairness and integrity,and that is considerate of diversity and human rights.

Structure

Developing human resources

The Managing Executive Officer in charge of the HR
Division is responsible for the group’s human resourcesmanagement. The Human Resources Department creates
regular opportunities for discussion and information sharing
with the departments responsible for human resources at

Basic approach
Toyobo group considers human resources to be our mostimportant asset. We support the growth of each and every
one of our employees, while respecting their diversity. We
believe that the continuation and development of the group

KPIs and Results
Initiatives

KPIs

Targets

Results (FY2022)• Develop humanresources (build
careers, develop
capabilities)• Promote work-lifebalance• Ensure equality inrecruitment andtreatment of
employees• Realize diversity andinclusion• Maintainpeople-friendly work
environments(promote health)

Training core overseas personnel in Japan

15 employees per year*

Canceled because of COVID-19

Training investment per employee (training hours)¥50,000 per year (21 hours)*¥50,000 per year (17.7 hours)

Achievement of women in managerial positions ratio target

5.0% or above*

3.7%

Ratio of annual paid leave taken

75%*

72.3%

Reduction in overtime work exceeding annual statutory
permitted overtime hours (no. of employees working morethan 360 hours of overtime / total no. of employees)

Reduction of 20% (2.0%)*

3.8%

Ratio of men employees taking childcare leave

Total number of days of absence
leave taken increased by at least
20% for at least 80% of thoseeligible for absence leave*

64.4% of those eligible forabsence leave, nine days
absence leave taken

Certified as a “White 500 Company” for Outstanding
Health and Productivity Management

Obtain / Maintain

Certified as a Health &Productivity Management
Outstanding Organization 2022

Increase in employee work satisfaction based on
engagement survey(1) Increase in positive
response rate(2) Increase in positive
response rate(1) 33%(2) 42%(1) Percentage of positive responses to “No difficulty inperforming daily work”(2) Percentage of positive responses to "Respects eachindividual's diverse opinions and ideas"

as a whole can be achieved by building an environment inwhich our employees can flourish both inside and outside
the company and realize their own potential.
Toyobo carries out human resource development
based on a training program categorized by job level, typeand objective, from the newly employed to top
management. Over our long history, we have fostered an
approach of valuing “people”—our most important asset—
and this is shared throughout the group.
Based on this approach, the new human resource
system put into operation in July 2022 implements specificpolicies such as promoting and supporting capacity
building, treating and evaluating in accordance with job
responsibilities, enhancing management skills, andencouraging the active participation of diverse professional
human resources, so that each of our employees can feel
growth, pride, and satisfaction.
Initiatives
For Toyobo group’s initiative to train the next generation ofmanagement, the group plans to provide chosen personnel
with internal and external management executive
development training. In order to further broaden theirexperience, we will also give them the opportunity toundertake business operation and management duties tohone their management skills, which will help us achieve
our succession plan. The group has been holding the
Human Resource Meeting to discuss measures to cultivate
the next generation of management from fiscal 2022. The
meeting will be divided into the company-Wide Human
Resource Meeting, which mainly discusses the successionof management positions, and the Department Human
Resource Meeting, which mainly discusses the successionof positions with high levels of operational expertise, andtopics will include the selection and rotation of humanresources and support for the training of successor
candidates. We will be able to find and develop humanresources and increase their effectiveness throughcoordination between these two meetings. We will also
promote diversity and inclusion to enhance our capabilities
over the medium to long term, and in addition to promoting
the advancement of women, we will proactively recruit
career and non-Japanese employees so that we canincorporate more knowledge and experience from outside
Toyobo. Furthermore, we conduct company-wide training
for all managers to ensure the thorough awareness ofsafety and disaster prevention, occupational safety, quality,
our corporate philosophy framework TOYOBO PVVs, andcompliance.

Company-Wide
Human Resource
Meeting

Department
Human Resource
Meeting

Members

Members

President,
controllingsupervisors,1 etc.

Controllingsupervisors,operating department heads,2 etc.

For

For

All management
personnel

Alignment

Solution Department and staff 3
personnel

AgendaAgendaSelection, training
and rotation ofhuman resources

Selection, training
and rotation ofhuman resources

1 Oversees each division and Management and Administration Division
2 Oversees specific fields across multiple business divisions
3 “Corporate divisions” including corporate planning, management andadministration, and human resources

Developing global human resources
Toyobo group implements a “Short-term Overseas
Business Training” in which around 10 employees in two
separate groups from Japan are sent overseas for training
each year (first and second half of the year). This motivates
younger and mid-career employees to participate in
Toyobo’s global business, and also represents a major
opportunity for them to further their careers.
In addition, local candidates for management fromoverseas offices are selected to undergo training in Japan
twice each year. This aims to enhance their understandingof Toyobo and deepen interaction with employees who
work in Japan.
(The national staff training was cancelled in fiscal 2022
due to the COVID-19 pandemic.)

Employee engagement
We need to align the vectors of organizational goals andpersonal growth, given that we position companies andemployees as being equal. To this end, we started surveys
on organizational climate and job satisfaction targeting all
officers and employees in fiscal 2022.

* Targets for FY2026

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066

Vision

These surveys will keep us periodically appraised of
employee engagement, and create an environment in which
they can proactively work with a sense of pride and fulfillment.

Diversity and inclusion
Basic approach
Toyobo group believes that personal and organizational
growth is achieved through a process of mutual respectamong our employees, with their differing work styles,
careers, genders, nationalities, races, and beliefs, andthrough cooperation to achieve our shared objectives. We
respect different opinions and a wide range of values, andcooperate to achieve ambitious goals together.
Promoting the empowerment of women
Toyobo group established the Women Empowerment
Promotion group within the Human Resources Strategy
Department, and the group has been engaged in activities
to promote the empowerment of women. We hold events
such as presentations, seminars for managers, womenleader development seminars, and Women Empowerment
Promotion Project on a continuous basis, in order to realizea change of mentality among our employees.
Number and Ratio of Women in Managerial Positions (FY)
2018

2019

2020

2021

2022

Number of women managers(chief-class and higher)

12

12

14

19

25

Ratio of women managers(chief-class and higher)

2.0

2.1

2.4

3.1

3.7

Number of women managers(manager-class)

5

8

12

13

19

Ratio of women managers(manager-class)

1.2

1.9

2.7

2.8

3.8

Besides setting various numerical targets, including
raising the ratio of women in managerial positions1 to 5.0%
by fiscal 2026, we continue to maintain the target of having
women account for at least 40% of recent graduates
recruited onto the managerial career track,2 in order toincrease the pool of candidates for cultivation as future
women managers.
In addition, we started a Career Development Support
Program in fiscal 2022 for women employees on theregional career track3 to meet with their supervisors over a
period of three years on a schedule that includes adevelopment plan, on-the-job training, specialist technical

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TOYOBO REPORT 2022

skills and other knowledge, as well as self-development,with repeated annual reporting and refresher training.
Whereas in the past there was no clear career development
path for women employees on the regional career track,such a path has now been created, and the company iscontinuing to provide support to help women employees tofully develop their capabilities.
Targets (by end of FY2026)
1

Raise the share of managers who are women to at least 5.0%

2

Raise the share of women on the managerial career track4 to at least 22%

3

Raise the percentage of eligible men employees taking childcare
leave to at least 80%, and increase the number of days ofchildcare leave taken by at least 20%

Eruboshi certification7 for promoting women’s participation
and advancement in December 2021.
In addition, as part of our childcare support, we have
set up the Toyobo Nursery School at the Research Center(Otsu City, Shiga Prefecture). This not only allows for
employees to return from childcare leave early or according
to a plan, but also creates an environment where
employees can have children with peace of mind.

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Administration Departments at each business site held fourtimes a year. As part of efforts to improve working
environments, the Tsuruga Research and Production Centerand the Inuyama Plant have been made with a universal
design and others are sequentially being upgraded.
KPIs and Results
KPIs

Targets(FY2026)

Results(FY2022)

Employment ratio ofpeople withdisabilities

2.3%

2.2%

Work-life balance

Key Measures
Seminars

Results

2-star Eruboshi certification

Women leader development
seminars (introductory andintermediate)

Held 10 times

Career planning seminars for
women employees

Held 19 times

Seminars for managers on
managing women employees

Held 50 times

Men employees taking childcare
leave (FY2022)

Ratio taking leave: 64.4%

Career Development Support
Program for women employees

Started in fiscal 2022

Interviews

Held with a cumulative total of 1,058
employees(approximately 150 per year,
including men employees)

1 Including all women employees with the rank of section chief-class or higher.
2 Career track for employees who are expected to be active throughout theentire company.
3 Career track for employees whose career is expected to be confined to
one specific business site.
4 Defined as all employees on the managerial career track, including those
who have only just joined the company.
5 This is one of the targets for promoting D&I to realize sustainable growth inline with “.The NEW Growth Strategy” announced by the Keidanren in
November 2020.
6 The Women’s Empowerment Principles were formulated jointly by UNGC
and UN Women in 2010.
7 2-star Eruboshi criteria: Must meet 3–4 of the specified criteria, and must
demonstrate continued improvement for a period of at least twoconsecutive years.

Women Empowerment
Promotion Project

Activities implemented continuously
over a five-year period, withchanging participants

Babysitter support system(Childcare costs incurred while
away on business trips)

Entirely covered by the company

Mentoring system

A total of 368 mentoring pairs(achieved over a period of three
years, with pairs being changed
every six months)

Establishment of a nursery within
the company (at the ResearchCenter with a capacity of 10
children)Cumulative total no. of users: 33
children over four years

Toyobo group also has a policy of participating actively
in external initiatives. The company has already expressed its
support for the 30% by 2030 Challenge5 to raise the ratio of
women officers to 30% by 2030, and for the Women’s
Empowerment Principles,6 in addition to signing a statement
committing to act in accordance with the WEPs.
Through these activities, the company received 2-star

Strategy and Practiceof Value Creation

Toyobo Nursery School at the Research Center

Active participation of diverse human resources
In addition to activities to promote the participation andadvancement of women, we are also working to ensurethat the assessment and treatment of employees focuseson ability and is not influenced by differences such as
gender and nationality, and we are aiming to cultivate a
corporate culture in which diverse employees canparticipate actively and find job satisfaction.
We have introduced a senior employee system topromote employment by rehiring employees who haveretired at the retirement age of 60 and who wish tocontinue working and are considered capable of working
normally. The rehired senior employees actively help to train
younger employees and pass on skills.
In regard to raising the ratio of employees withdisabilities, because it is crucial that initiatives are carriedout at a company-wide level, we share information andactively encourage the recruitment of people withdisabilities at meetings of the managers of General

Basic approach
Toyobo group is engaged in work style reform so that ouremployees can work with renewed efficiency and achieve agood balance between work and personal life. We also
provide support such as the Childcare Shortened Work
Hour Program, Nursing Care and flextime system, andtelecommuting. Building an environment that enables more
flexible work styles tailored to each employee’s life stage
provides an opportunity to enhance creativity. Letting eachindividual do their best with confidence, pride, peace ofmind, and a forward-looking mindset helps to build astronger foundation for the company.
The TOYOBO Group Charter of Corporate Behavior
declares, “We will respect employee diversity and support
work practices that allow employees to demonstrate theirindividual skills. Moreover, we will provide workplaces thatare conducive to productive work while taking health andsafety into consideration.”
Main initiatives
Toyobo has introduced schemes that go above andbeyond the legal requirements, including the Childcare
Shortened Work Hour Program and Nursing Care Leave,
and we also provide a flextime system. Since fiscal 2020,
five days of paid leave has been offered as Childcare
Leave. In conjunction with this change in the system, weare encouraging men to take childcare leave. Men
employees who have a child are notified of the system
individually and are recommended to take this leave by
their immediate supervisor. We will continue thesepromotion efforts until it becomes normal for men
employees to take childcare leave.

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Vision

Maintenance and promotion of health
Basic approaches
Toyobo group is engaged in initiatives for maintaining andimproving employees’ physical and mental wellbeing inorder to create comfortable workplaces that are consciousof employee health. From fiscal 2020, we have begun
working on health and productivity management, which
considers and strategically implements health administrationfrom a managerial perspective, and we are promoting
initiatives to contribute to organizational revitalization andimproving business performance through maintaining andimproving employee health, and increasing productivity.
Health and productivity management structure
In March 2020, Toyobo group formulated the TOYOBO
Health & Productivity Management Declaration in order toproactively and systematically address health andproductivity management, as well as establishing a
promotion structures. Under the Managing Executive Officer
controlling supervisor of the HR Division who is also theChief Health Officer (CHO), the Labor Affairs Department,
the occupation physicians and nursing professionals andthe health insurance association work in close coordination
to implement priority programs.

1. Initiatives for raising employees’ health awareness:
education and training
2. Initiatives for improving employees’ lifestyle habits:
exercise, diet, support for quitting smoking, etc.
3. Initiatives for strengthening mental health, including
improvement measures for high-stress employees
and workplaces
Initiatives for improving employees’ lifestyle habits
As the COVID-19 pandemic has changed how we workand live, forcing us to face a variety of restriction, we place
the utmost importance on mental and physical health. In
fiscal 2022, we created and launched our own smartphone
application called Tsunagaru Kenko/Toyobo Zukan (Leading
to health/Toyobo illustrated book), into which a wide range
of opinions were considered with the help of subcommittee
members of the KAERU Project (kaeru means "to change"),a project to change the corporate culture.
As the first initiative, we provide an application whichlets employees interact with each other freely by taking
pictures of flowers they see while walking and post themwith comments. We hope that this application will create aspace for a positive chain of events by helping employees
to start exercising daily and connect with each other.
Health checkups
Toyobo aims to have a (actual) 100% rate of healthcheckups by industrial health staff at each business site.

Management Meeting
Report

Health andproductivity
management
promotion
structure

Chief Health Officer (CHO)

Health insurance association

Cooperation
Labor Affairs
Department

occupation physicians,
nursing prifessionals

Our health checkups for lifestyle-related diseases,
cancer, and other ailments are more comprehensive thanrequired by law.
In cooperation with the health insurance association,
we conduct cancer screenings for any staff (employees andtheir dependents) who want them, and we are working toensure early detection and treatment of diseases including
in family members.
Our occupation physicians check the results of healthcheckups for all employees, and in the event of any
abnormal findings, meet with and provide health guidancein cooperation with nursing professionals. If necessary, theyalso provide examinations and treatment at clinics, andreferrals to specialized medical institutions. We also support
the maintenance and improvement of employee health byproviding health consultation structures and environments.
Furthermore, the health insurance association actively
provides specific health guidance on approaches to reducerisks faced by high-risk patients.
We continue to improve structures and environments
for health examinations and consultations, to support themaintenance and improvement of employee health.
Restricting long working hours
Beginning in fiscal 2019, if long working hours exceed acertain standard* for three months consecutively, for any
employee including management staff, then measures toprevent recurrence will be discussed in management
meetings. Management and employees at each businesssite have set a specific cutoff point, and keep tabs on workthat leads to excessive hours in order to promote their
reduction. We have also set the number of employees
doing overtime as a KPI, and have set a reduction of 20%
as a target.
Management and employees at each business site
have designated a no overtime day, and we encourage
employees to go home on time so they can enjoy personaland family time.
Furthermore, in order to prevent mental health issues
caused by long working hours, we have put in place stricter
standards than legally mandated, and we hold interviews
with occupation physicians.

Strategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

industrial health staff (one to five) at each business site. We
also provide personalized support to employees sufferingfrom high levels of stress, based on the results of a stresscheckup. We are planning to identify and resolve issues inhigh-stress workplaces based on the results of group
analysis shortly.
With regard to mental healthcare when telecommuting
as a measure to tackle the spread of COVID-19, we haveaddressed the importance of self-care and so-called “linecare,” care provided by managers for the wellbeing of theemployees and measures to improve the workplace,issuing information so as to maintain and support ouremployees’ physical and mental wellbeing.
Health management support for expats
Every year, the number of expats is increasing as we
accelerate our global expansion. We support those expats
to enable them to engage in their work while maintaining
their health, including by requiring physical examinations
before going overseas, and providing immunizations, local
medical system support, and medical information.
External evaluation
As in 2021, the company was certified in the large
enterprise category of the 2022 Certified Health &Productivity Management Outstanding Organization
Recognition Program, a project conducted jointly by the
Ministry of Economy, Trade and Industry and the Nippon
Kenko Kaigi (Japan Health Council). By fiscal 2026, we aim
to be certified as a “White 500 Company,” a certification
given to outstanding organizations.
We will further strengthen and promote healthmanagement through measures such as continuing toactively work to maintain and improve employee health,and through this increase our corporate value.

* Over 80 hours overtime in two consecutive months + over 45 hours in thethird month

Key measures under the TOYOBO Health &Productivity Management Declaration
We have formulated the TOYOBO Health & Productivity
Management Declaration, and we are working on thefollowing key measures.

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Internal company announcement poster

Mental healthcare initiatives
Toyobo provides annual mental health lectures to managers
in order to increase their awareness and understanding of
mental healthcare. Individual consultations are also given by

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VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Respect for Human Rights
Basic approach

Targets and KPIs

Respecting human rights is essential for Toyobo group to
fulfill its responsibilities as a member of society andcontinue as a trusted company. In this regard, respecting
the rights of employees and trading partners, who areimportant stakeholders for the group, is crucial to enablingthem to demonstrate their abilities, and to work with vigor
and energy. In recognition of this, we have included “4.
Respect for Human Rights” and “6. Active Employee
Participation” within the 10 principles of the TOYOBOGroup Charter of Corporate Behavior. We have also
positioned relevant items as materiality (key issues) and are
advancing initiatives accordingly.
As a way to openly express our position on this both
inside and outside the company, the group became asignatory to the United Nations Global Compact (UNGC) in
January 2020. We also support and respect otherinternational agreements relating to human rights, such as
the International Bill of Human Rights, the International
Labour Organization (ILO) Declaration on Fundamental
Principles and Rights at Work, and the Children’s Rights
and Business Principles. The TOYOBO Group Human
Rights Policy,* which was drawn up in October 2020,
conforms to the UN Guiding Principles on Business andHuman Rights. With regard to respect for human rights inthe supply chain, our CSR Procurement Guidelines clearlystipulate items relating to respect for human rights(including the prohibition of child labor and forced labor anddiscrimination based on gender identity including LGBT), tobe considered when selecting business partners.

Targets• Toyobo group will carry out initiatives to ensure respect
for basic human rights and diversity throughout the entire
group, including providing training to foster such respectamong employees.
• Through these initiatives, we will aim to be a fair company
that is trusted by society.

* TOYOBO Group Human Rights Policy
https://www.toyobo-global.com/sustainability/society/human_rights/

Structure
In April 2021, Toyobo group established a unit responsible
for human rights within the Human Resources Department,with the aim of emphasizing respect for human rights in
Toyobo group in a proactive, systematic manner.
The Managing Executive Officer who is the controllingsupervisor of the HR Division has overall responsibility formatters relating to human rights.

KPIs and Results
Initiatives

KPIs• Avoid human rights
violations• Eliminate child laborand forced labor• Respond to humanrights laws andregulations(Modern Slavery
Act, etc.)• Ensure equality inrecruitment andtreatment of
employees

Implementation
status ofhuman rights
education andtraining

Targets(FY2026)

Results(FY2022)Once a year for
20% of nonconsolidated*
employees

27.6%* TOYOBO CO., LTD., TOYOBO STC CO., LTD., and TOYOBOINFORMATION SYSTEM CREATE CO., LTD.

Complaint handling and internalreporting systems
The Complaint Handling Committee and the Compliance
Consultation Desks within the internal reporting systemprovide consultations and handle reports regarding humanrights. In order to ensure that employees can use thesesystems with peace of mind, the name and other details of
employees making reports or receiving consultations are
kept private and we guarantee that these individuals will not
be negatively affected by their action. We also strive todetect and solve human rights issues at an early stage
through compliance surveys.(▶p.089: Compliance)

Respect for human rights from a global
perspective
In the countries and regions, where Toyobo group hasbusiness sites, there are various human rights related issues
that reflect the specific political, economic and social
circumstances. Such issues may include discrimination inregard to employment and work roles, unfair labor practices,

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forced labor and child labor, infringement of the humanrights of foreign workers, and involvement in corruption. For
each Toyobo group business site, it is vitally important togive due consideration to these human rights related issues.
In order to identify the issues that Toyobo group needs
to take into consideration from among the human rights
related issues existing in each region, we are participatingin the relevant sub committes of Global Compact Network
Japan, alongside human rights NGOs and other participant
companies. We are aiming to deepen our understanding of
human rights by gathering information on international
human rights issues and other issues that corporations
need to pay attention to. Going forward, we will continue toidentify human rights related issues that we need toconsider at each of the Toyobo group’s business sites.

Respect for workers’ rights
Respecting the right to freedom of association and tocollective bargaining
Toyobo group respects freedom of association andcollective bargaining rights. The realization of the TOYOBO
PVVs has been established as a joint target for management and labor, and we strive to build constructive, stable
labor relations.
Labor union activity at Toyobo is based on the union
shop system,* and all employees that are eligible to join alabor union under the labor-management agreement reached
between labor and management join the labor union.
The company’s union represents all union members,
and the results of bargaining between labor and management
are applied unconditionally to all union members. Under theterms of the labor-management agreement, employees atmanager level and above are not permitted to join the labor
union, and so the overall union membership rate is 79.0%(as of the end of fiscal 2022).
* The union shop system is a system whereby all workers employed at aparticular workplace are required to join the labor union for that workplace.

The labor union is represented at meetings of theCentral Management Council by staff from the union
headquarters, and is represented at Branch Management
Council meetings by staff from the relevant union branch,while the company is represented by the President atmeetings of the Central Management Council, and by thebusiness site manager or plant manager at BranchManagement Council meetings. Topics addressed during
discussions between labor and management include theoperational status of the company, changes in the amountof pay rises, and the working environment.
Infringements of labor standards, etc.
In fiscal 2022 there were no cases of non-compliance withlabor standards, and no cases of human rights violations.
Toyobo group complies with legislation specifying minimum
wages in the countries and regions in which it conducts
business activities, and pays salaries in accordance withthe relevant legislation.

Internal education initiatives
Toyobo group has created an English version of the
TOYOBO Group Charter of Corporate Behavior in order toimplement internal education that enables employees aroundthe world to share the same vision. We inform employees ofrules and examples regarding respect for human rights, theprohibition of discrimination, the prohibition of child laborand forced labor, and the protection of personal information
through the TOYOBO Group Compliance Manual.
Furthermore, we have been holding seminars on
respect for human rights alongside other initiatives aimed at
improving awareness of human rights among employees.
In fiscal 2022, as in the previous fiscal year, in eachbusiness site, we implemented training for new hires,
grade-specific education, lectures, and training sessions for
personnel appointed as promoters of human rights, with a
total of 396 personnel participating in such activities.

Dialog between labor and management
We arrange repeated opportunities for frank discussion between
labor and management aimed at realizing the TOYOBO PVVs,
and we promote the building of the foundations needed forevery single employee to be able to work with energy andenthusiasm. Meetings of the Central Management Council,
attended by representatives of the labor union headquarters
and of company management, are held once a year, andmeetings of the Branch Management Councils are held
once a year at each of the nine branches in Japan.

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VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Social Contribution Policy and Activities

S Supply Chain Management
Basic approach
Toyobo group is contributing toward the achievement of
the SDGs, which support the development of asustainable society, throughout our entire supply chain byestablishing an appropriate trading policy and conducting
procurement and logistics responsibly. To realize this, wehave formulated CSR Procurement Guidelines1 that deal
with matters such as legal compliance, fair trade,consideration for the environment, and respect for humanrights (including the prohibition of child labor or forcedlabor and discrimination based on gender identity
including LGBT), and Green Procurement Guidelines2 thatare considerate of the environment. In August 2022, werevised our CSR Procurement Guidelines based on
various recent global issues.
Additionally, based on the principle of “2. Fair businesspractices” in the TOYOBO Group Charter of Corporate
Behavior, we practice fair competition and dealings andresponsible procurement, and maintain healthy
relationships with customers, business partners and society
as a whole.

[ Results obtained in CSR procurement surveys in FY2022 ]KPIs and Results
Initiatives

KPIs• Realize
sustainable,
responsible
procurement
and logistics

1．Ratio of CSR
procurement
surveysreturned(every two
years)• Carry outtransactions
that are fairand respecthuman rights• Build a
decarbonizedsociety

2．Ratio of
reduction in
CO2 emissions
per unit oftransportation*
in relation tologistics

Targets

Results(FY2022)

1．93％
1．90% or above (Inyears when asurvey is not
implemented, we
carry out dialogue
with business
partners that past
surveys had issues)
2．Year on year
reduction of 0.5%

2．Year on
year
reductionof 0.5%* CO2 emissions per unit of transportation (in g-CO2/t-km) represents thenumber of grams (g) of CO2 emitted per tonne of goods transported
over one kilometer.

CSR procurement

On April 1, 2022 we reorganized the Procurement andLogistics Department, and established three new groups
under it: the Material Procurement Group, the Logistics
Management & Plant and Machinery Procurement Group,and the Procurement and Logistics Planning Group. We areworking to speed up and enhance our ability to respond tovarious types of risks relating to procurement and logistics.

We have formulated our CSR Procurement Guidelines andGreen Procurement Guidelines with the aim of fulfilling oursocial responsibilities, such as ensuring legal compliance,
product quality and safety and respect for human rights,
and enhancing value throughout our entire supply chain
through initiatives such as contributing to regional
communities and environmental conservation.
As training, we have all personnel with responsibilities
for procurement and logistics read through the TOYOBOGroup Compliance Manual -including the CSR Procurement
Guidelines—together on an annual basis. During thesetraining activities, each Procurement and Logistics
Department group manager ensures that relevant personnel
are familiar with the CSR Procurement Guidelines.

Targets and KPIs

CSR procurement survey

Targets• Throughout its supply chain, Toyobo group aims to realize
procurement and logistics that involve fair and sincere
transactions, respect human rights, and consider impact
on both society and the environment.
• We reduce CO2 emissions by promoting green logistics,
such as implementing a modal shift to rail and sea
transportation and improving loading efficiency.

We conduct a survey among our key business partners
throughout the world, based on the CSR Procurement
Guidelines. This allows us to verify the status of their CSR
activities, while facilitating them to deepen theirunderstanding of our CSR activities.

1 CSR Procurement Guidelines
https://www.toyobo-global.com/sustainability/guideline/
2 Green Procurement Guidelines
https://www.toyobo-global.com/sustainability/guideline/green/

Procurement structure

CSR procurement surveys covers social issues such as the environment, safety, human rights, labor, and compliance (including
prevention of bribery, embezzlement, and other forms of corruption), as well as information security. Through these surveys, weare able to evaluate suppliers’ risk in relation to social issues. We collaborate with suppliers to address the issues identified
through risk assessment, and we strive to enhance the overall level of CSR activities throughout the supply chain. When we
begin doing business with a new supplier, we ask them to sist us by responding to a survey, and we also ask existing suppliers
to collaborate on surveys. If issues are identified through a CSR procurement survey, we take corrective measures.

■ Survey overview• Aggregation scope and no. of suppliers covered
185 suppliers representing 90% of overall transaction volume• Survey items
Compliance and ethics / Supply chain management / Stakeholders /Risk management / Environmental activities / Human rights andworking conditions / Promotion structure / Product safety• Survey content• Breakdown of Suppliers
The survey was drawn up based on the Toyobo group’s CSR
Procurement Guidelines. The CSR Procurement Guidelines were
Raw materials
60%
suppliers
compiled with reference to SDGs, the UN Global Compact, and theEquipment andCharter of Corporate Behavior promoted by the Japan Business15%
machinery suppliers
Federation (Keidanren).

Logistics providers

6%

Outsourced
manufacturers, etc.

19%

■ Aggregated results
The survey completion and return rate for tier-one suppliers was 93% (172 out of 185 companies).
Risk assessment
rank

Points bandA

96 points or higher

116

67%

CSR measures implemented are excellent ⇒ Feedback on survey results

B

80–95 points

51

30%

CSR measures implemented are adequate ⇒ Feedback on survey resultsC

60–79 points

42%

Response: engage in dialogue with the supplierD

40–59 points

1

1%

Response: engage in dialogue with the supplier and request improvements

E

Less than 40 points

00%

Response: engage in dialogue with the supplier, request improvements, andconsider whether to continue doing business with that supplier

Evaluation Resultsof CSR ProcureMent Survey
A
B

2%

1%

No. ofSharecompanies of total

0%

Content and response

Evaluation Scores of
CSR Procurement
Product safety
SurveyCompliance and ethics
100

74

80

74

60

52

40

30%

C
D
E

Promotion system

67%

20

87

89

0

Stakeholders

72

76
Human rights andworking conditions

Supply chain
management

76

Risk management

Environmental activities■ Evaluation results
The survey results showed no compliance violations relating to matters such as the environment or product quality. With
regard to supply chain management, an area where evaluation performance tended to be quite low overall, we asked
each company to promote measures in this area, emphasizing its importance.
With respect to the five companies that were deemed to have relatively high risk (i.e., those companies ranked as Cor D) based on the evaluation results, we undertook verification by engaging in dialogue with these companies. Throughthis process, we confirmed that two of the companies in question were actually implementing CSR measures without any
significant problems. The remaining three companies had been unable to implement CSR measures properly because
they did not have a CSR promotion structure in place. We provided them with support and guidance by introducing casestudies of measures that we had taken, and we asked them to put in place the necessary systems and promote CSR.

Note: On this page, data that is not specified as referring to Toyobo group refers to TOYOBO CO., LTD. only.

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074

VisionThe Basis of Value Creation

Roundtable Discussion with
Outside Directors

Masaru Nakamura

Takafumi Isogai

Kimie Sakuragi

Masaaki Harima

Outside Director

Outside Director

Outside Director

Outside Director

Mr. Nakamura has extensive
experience and wide-ranging
knowledge from his career thatcommenced in 1977 at Sumitomo
Corporation where he went on to serve
such as corporate officer, executive
officer, managing executive officer,
senior managing executive officer, andadvisor. He joined Toyobo as an
Outside Director in 2017.

Mr. Isogai has a specialist perspective
and wide-ranging expertise in quality
control field from his career inacademia that began in 1987 as an
Assistant Professor and then Professor
at Osaka University and subsequently
at Kobe University and the University ofMarketing and Distribution Sciences.
He joined Toyobo as an Outside
Director in 2018.

Ms. Sakuragi has extensive experienceand wide-ranging knowledge incorporate ethics, compliance andsustainability fields from her career at
Benesse Holdings. After joining
Benesse in 1981, she held the Chief ofBusiness Ethics and Compliance Officeand the Audit and Supervisory Board
Member. She joined Toyobo as an
Outside Director in 2019.

Mr. Harima has a specialist perspectivefrom his background as a lawyer andwide-ranging expertise gained from his
career that started as an Assistant Judgein 1977. He later founded the Harima
Law Office (now the Fushimimachi
Lawyer’s Office). He joined Toyobo as an
Outside Director in 2020.

Governance for sustainable growth
Evaluation of the governance system
and its effectivenessNakamura When I was appointed as an outside
director in June 2017, there were two outside directors.
When the number rose to four in 2019 to meet social
standards for governance, I remember feeling that it waseasier to share my opinions. Having that feeling mademe understand the importance of a Board of Directorsthat is balanced with outside directors.
Isogai Ms. Sakuragi, you were appointed in 2019.
Sakuragi Yes, I became Toyobo’s first women director in

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June 2019. To be honest, I felt a lot of pressure.
Nakamura Since you joined the board, it’s been very
interesting to hear your insight on ethical perspectives.
Your views on women’s topics like advancement in theworkplace and on candidates for when creating
succession plans are also invaluable contributions.
Sakuragi Initially, I was worried because I had noexperience in the manufacturing industry, but thecompany was very welcoming. My first impression wasthat Toyobo greatly values its corporate philosophy.
Purpose management has been a popular phrase inrecent years, and it is an active part of Toyobo’s
corporate philosophy. Managers here often talk about
the purpose of our business, and the outside directors
are often asked too, which makes me feel everyone istruly committed to the corporate philosophy.
Harima I think the Board of Directors’ monitoring
function is still getting stronger. In June 2022, thenumber of outside directors grew to five of the 10
members of the board. Diversity remains an issue
though, because there are still few women and no
non-Japanese on the board.
Nakamura Diversity in skills is also important. Most of
the internal directors came up through the company, so
their range of skills can be narrow. Outside directors
bring a range of skills. The balance of internal andoutside director roles is balanced now, but theexperience and knowledge of non-Japanese will be
crucial when begin focusing on overseas markets. I
believe that this will be an important perspective tokeep in mind when considering candidates for director
in the future.
Isogai I agree that the skill matrix of candidates isimportant. My specialty is in quality control, and I haveworked with numerous companies on quality issues.

Strategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

That experience and those skills are the basis for my
input to discussions.
Harima I have felt completely open about stating my
opinions during the two years I have been on the board.
The revised criteria for submission to the board’s
discussion agenda has reduced the items requiring adecision by the board, which is giving us more time to
discuss important topics.
Nakamura In addition to attending the board meetings,
the outside directors participate in twice-monthly
briefings on the agenda items when we can ask forfurther information or clarification. The time saved fromnot needing to verify details is giving us more time fordeeper discussions at the meetings. The volume of
information provided to the outside directors has also
been increasing over the past few years.
Sakuragi That freedom to voice opinions has led tosome very long and heated discussions that can last
over several meetings. Sometimes it’s a shock to comeout of the meeting and find it’s dark outside. The
system creates a good atmosphere.
One area I think we should spend more time
discussing is the longer-term management strategies. I
think the board’s primary purpose should be todeliberate and set long-term strategies, businessportfolio strategies, and investment strategies. We
naturally spend much time on those topics when
preparing the Sustainable Vision 2030 (long-term vision)and 2025 Medium-Term Management Plan [FY2023-2026] (2025 MTP), but I believe they warrant
continuing discussion going forward.
Isogai I once asked the board why there was so little
discussion about the future, and they did then starttalking about it more. So they are open to talking about
issues for the future, but I agree that more discussion isneeded.
Nakamura Much of the discussion over the past three
years has been about the fire accident and quality-related
misconduct incidents. Those discussions were necessary
and I believe that because we kept talking about it wewere able to formulate the measures that have beenreasonably effective. Of course, we continue to discuss
those issues. At the same time, now that the long-term
vision and 2025 MTP are under way, I would like to see
the board shift its focus to a longer-term perspective on
ESG, DX, and the business portfolio.
Isogai I agree. I also think the twice-yearly open
discussion meetings with corporate auditors and theinformation we receive about the annual audit plan andthe discussions between the president and corporate
auditors are extremely informative. I think the board
should also consider holding those meetings more
frequently.

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VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation

Roundtable Discussion with
Outside Directors
Fire prevention measures and response to
the quality-related misconduct incidents
Harima Regarding the safety and disaster prevention
measures after the fire, the board recognizes that an
excessive focus on short-term profits and too much
distance between the worksites and the head office
were among the causes of the accidents, and it isactively working to establish a new organizational
culture that puts safety ahead of everything. One key
part of the safety and disaster prevention are the steps
to make it easier for people at the worksites tocommunicate with the head office.
Isogai The company also has established a casecommittee of corporate auditors and outside directors—
including all four of us—to review the quality-related
misconduct incidents. The executive department has
been resolutely implementing the prevention measuresthe committee has recommended, and the conditions
are improving.
Harima The effectiveness evaluations of the Board of
Directors in fiscal 2022 indicated a need to strengthen
the internal auditing. In the past, much of the Internal
Audit Department’s staff were from accounting, and thegeneral corporate audits tended to be primarily
examinations of financial items. The internal audits wereweak in the area of quality assessments. We
recommended that the audits could be improved bystaffing the Internal Audit Department with personnel
with various areas of expertise, not just financial. We
also recommended having an executive officer be incharge the department, which has been done. There isalso now a system for regular reporting of the status of
the internal audits directly to the board.

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Nakamura The company has also created the Risk
Management Committee to strengthen its risk
management, and there has been a certain degree of
improvement in safety and disaster prevention andresponse to the quality-related misconduct incidents.
The 2025 MTP also contains measures in these areas.
The executive department is fully engaged in these
efforts, and, through the board, we are keeping on topof the situation, providing our advice, and monitoring
the progress.
Isogai There have been instances where companies
with divisional structures have not shared information
because they are in competition with each other. That
has led to many times when a business has developed
quality issues and other problems because it was
pursuing profits. Digitalization is making it easier tocreate connections between business divisions. I would
like to see the company take this as an opportunity tomake fundamental changes and to continue working
toward realizing comprehensive quality control.

Sustainable Vision 2030 and the 2025
Medium-term Management Plan
Sakuragi The announcement of the long-term vision
has finally provided a clear picture of the company’s
path forward. The long-term vision statement says
Toyobo is working for “people and the earth,” and weare committed to not being overly rigid in our thinking
and to responding flexibly to changes in the surrounding
environment. In that spirit, I would ask the board to notview the long-term vision for 2030 as set in stone, but tobe willing to modify the vision as necessary.

Harima I also have high expectations for “employee
well-being” one of the five social issues set forth in thelong-term vision. The long-term vision is to be acompany that is people first, with safe work
environments where employees can work with peace ofmind, pride, rewarding in their work. Management has
been trying to work with the worksites since the fire
accidents and quality-related misconduct incidents, butthere still seems to be some distance between them attimes. I really would like to see the company put its
total effort into its vision for employee well-being andcreate a fresh atmosphere. That very well could
become the foundation of all the strategies.
Sakuragi Yes, it could. I’ve also thought that the“inward-looking” aspect of Toyobo’s organizational
culture could have contributed to the quality incidents. I
don’t think that aspect has been completely eliminated.
I think it’s important for each individual employee tolook at the changes not just inside the company, but inJapan and the world as well, independently and with
their own eyes. I feel strongly that we need to take thatwider perspective on the company or else it will bedifficult to fully achieve the Sustainable Vision.
I believe that, on the most fundamental level,
Toyobo’s corporate philosophy and mentality closely
match the current sensibilities in society, and I encourage
the company to do all it can to incorporate society’s
perspectives into its businesses and operations.
Isogai The long-term vision and 2025 MTP also
reminded me that Toyobo is a deeply committed to its
objectives and puts 100% into everything it does.
When I hear the Research Center announcements,
I’m astounded by some of the amazing leading-edge
technologies they develop. There are so many that havereal potential, such as the desalination membranes thatturn seawater into drinking water and the super fibersthat can be used on floating offshore wind turbines. I
was really surprised recently when I heard that Toyobo
is developing low environmental impact “sustainable
food” production. I had no idea Toyobo was even doing
research in that field!
Nakamura That’s what Toyobo does. It looks for ways
to apply promising technologies to various markets andturn them into successful businesses. A highlysophisticated technology may not have a market. We
can’t make a product and try to sell it, we have tofollow what the market wants.
Isogai That’s why finding partners for open innovationand collaboration is also important.
Nakamura The markets are changing so fast that thecompany needs to accelerate its technology
development just to keep up. The company also must
formulate a new business model.

Achieving long-term growth
Sakuragi I was most impressed with the detailed
numerical targets in the long-term vision and 2025 MTP.
When framing a vision for long-term growth, setting
ambitious targets for net sales and operating profit isessential, and being obsessive about meeting thosetargets is critical.
Nakamura President Takeuchi has called the time it
took for Toyobo, as a manufacturing industry, todownsiz the textile business and then to get the film
business up and running as a period of “survival,” but it
has also been an extended period when the company
was forced to be patient. I’m sure that the fundamental
drive to pursue profits was still lingering inmanagement’s minds during that time, and they may
have thought they could at least try to generate a little
profit. That might be why the company was adamant
about setting very specific goals when projecting to along-term perspective.
Harima The view of the company from investors andothers is that they want Toyobo to get bigger, and thecompany is believed to have the resources to do that.
Nakamura We are also strongly of that opinion, and werecommended in the board discussions that the target
figures in the long-term vision and 2025 MTP reflect
that. The company is planning to establish a joint
venture with Mitsubishi Corporation, but overall it has
not been very aggressive with M&A. We suggested that
more dynamic strategies could be used to create future
vision. The Board of Managing Executive Officers andControlling Supervisors held many meetings about andultimately announced target figures that are both
ambitious but still realistically possible to achieve.
Isogai The company has finally moved beyond survival
thinking and begun to focus on the pursuit ofsustainable growth. I believe that the businesses thathave been nurtured over time are now able to maintaintheir profitability.
Nakamura The targets are indeed the result of many
discussions, and I know the company is absolutely
committed to achieving them. The structure forachieving the targets is in place. Following the true
spirit of the Jun-Ri-Soku-Yu principle, we hope that
employees will have an open mind and imagine how
fulfilling the vision will benefit our customers andgenerate profit for the company. I think the company
could benefit from discussing how to bring thatprinciple even more into play. We all will do everything
we can to help the company succeed.

TOYOBO REPORT 2022

078

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Governance Policy and Activities

G Management Team
Directors
Seiji Narahara

Ikuo Takeuchi

Chikao Morishige

Masaru Nakamura

Takafumi Isogai

Kimie Sakuragi

Chair of the Board &Director

President & Representative
Director, CEO & Co-COO

Vice President andRepresentative Director &Co-COO

Outside Director

Outside Director

Outside Director

Controlling Supervisor of
Corporate Sustainability
Division, Internal Audit
Department, and KAERU
Department

Jan. 1988
Apr. 2010
June 2011
Apr. 2014

Joined the Company
Executive Officer
Director and Executive Officer
Representative Director, President and Chief
Operating Officer
Apr. 2021 Chair of the Board & Director(current position)

Apr. 1985 Joined the Company
Oct. 2015 Deputy Director, General Manager of Corporate
Planning Office
Apr. 2018 Executive Officer
Apr. 2020 Managing Executive Officer
June 2020 Director and Managing Executive Officer
Apr. 2021 President & Representative Director, CEO &Co-COO (current position)

Assistant to the President.
Controlling Supervisor of
New Company
Establishment Office. Headof Films and Functional
Materials Solutions Division

Apr. 1983 Joined the Company
Apr. 2014 Deputy Director, General Manager of Films
Development Department
June 2014 Deputy Director, Senior General Manager of
Plastics Production Technology Department
Apr. 2017 Executive Officer
Apr. 2019 Managing Executive Officer
Apr. 2020 Senior Managing Executive Officer
June 2021 Representative Director and Senior Managing
Executive Officer
Apr. 2022 Vice President and Representative Director &Co-COO (current position)

Yutaka Ouchi

Masaaki Harima

Hiroshi Fukushi

Director and Managing
Executive Officer

Outside Director

Outside Director

Mar. 1981 Joined Fukutake Publishing Co., Ltd.
(current Benesse Holdings, Inc.)
Apr. 1995 Supervisor of Book Businesses in Publishing DivisionNov. 1998 Chief of Business Ethics and Compliance OfficeJan. 2003 Manager of Business Ethics and Compliance Office
June 2003 Standing Audit & Supervisory Board Member(retired in June 2019)
Apr. 2007 Adjunct Professor of the University of Aizu Graduate School(current position)
June 2019 Outside Director of the Company (current position)
June 2021 Outside Director of the Board(Audit and Supervisory Committee Member) of Isuzu Motors
Limited (current position)
June 2021 Outside Director of Kumagai Gumi Co., Ltd. (current position)

Head of Life Science
Solutions Division

Apr. 1977 Assistant Judge at Osaka District Court
May 1981 Registered as an attorney at law(Osaka Bar Association)
Sep. 1987 Founded Harima Law Office(current Fushimimachi Lawyer’s Office)Apr. 2010 Chairman of Osaka City Fair Work Committee
June 2011 Outside Corporate Auditor of Ishihara Sangyo
Kaisha, Ltd. (current position)
June 2014 Independence Committee of the Company
June 2020 Outside Director of the Company (current position)
Apr. 2021 Chairperson of Osaka Prefecture Pollution
Examination Committee (current position)

May 1980 Joined Kyowa Hakko Kogyo Co., Ltd.
(currently Kyowa Kirin Co., Ltd.)
June 2009 Director of Kyowa Hakko Bio Co., Ltd.
Mar. 2012 Managing Executive Officer of Kyowa Hakko
Kirin Co., Ltd. (currently Kyowa Kirin Co., Ltd.)
Apr. 2019 Joined the Company
Apr. 2020 Managing Executive Officer
June 2021 Director and Managing Executive Officer(current position)

Corporate Auditors

TOYOBO REPORT 2022

Jan. 1987 Assistant Professor of Faculty of Liberal Arts,
Osaka University
Apr. 1996 Assistant Professor of Graduate School ofEngineering Science, Osaka University
Apr. 2002 Professor of Faculty of Mercantile Marine,
Kobe University of Mercantile Marine
Oct. 2003 Professor of Faculty of Maritime Sciences,
Kobe University
Apr. 2013 Professor of School of Commerce, Universityof Marketing and Distribution Sciences
Apr. 2018 Part Time Lecturer, University of Marketing andDistribution Sciences
June 2018 Outside Director of the Company(current position)

Representative Director andSenior Managing Executive
Officer

Nov. 1987 Joined the Company
Oct. 2014 Deputy Director, General Manager of Plastics
Planning and Management Office, andManager of Film Business Management Office
Apr. 2017 Executive Officer
June 2020 Director and Executive Officer
Apr. 2021 Director and Managing Executive Officer
Apr. 2022 Representative Director and Senior Managing
Executive Officer (current position)

079

Joined Sumitomo Corporation
Corporate Officer
Executive Officer
Managing Executive Officer
Senior Managing Executive Officer
Adviser
Outside Director of the Company(current position)

Hiroshi Otsuki

Controlling Supervisor ofManagement andAdministration Division,
Supervisor of KAERU
Department

Yasuhiro Iizuka

Apr. 1977
Apr. 2006
Apr. 2008
Apr. 2010
Apr. 2012
Apr. 2016
June 2017

Takayuki Tabo

Hiroyuki Sugimoto

Akihiko Irie

(Outside)(Outside)

Apr. 1984 Joined Ajinomoto Co., Inc.
June 2011 Corporate Executive Officer
June 2013 Member of the Board & Corporate Vice President,
General Manager, Bioscience Products & Fine Chemicals
Division
June 2015 Member of the Board & Corporate Senior Vice President
June 2017 Representative Director
June 2019 Director, Corporate Executive Deputy President,
Chief Digital Officer
June 2021 Representative Executive Officer & Executive Vice President
June 2022 Senior Corporate Advisor (current position)
June 2022 Outside Director of the Company (current position)

CEO & Co-COO

Senior Managing Executive Officers

Executive Officers

Ikuo Takeuchi

Hiroshi Otsuki

Nobuya Fujiwara

Muneo Hirooka

Seiji Yamazoe

Kazuyuki Kawata

Shigeo Nishiyama

Co-COO & CTO

Managing Executive Officers

Yoshihiro Nomi

Kenji Fujihashi

Taichi Sakai

Nobuyuki Hoshino

Chikao Morishige

Shigeo Takenaka

Ichiro Takai

Naoki Fujii

Masanao Kudo

Yasuo Ota

Yoshio Araki

Eiichi Shimizu

Atsushi Sogabe

Yutaka Ouchi

Masakatsu Shirai

Takahito Sagara

Tadao Kuroki

TOYOBO REPORT 2022

080

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Attendance Record at Board of Directors and Corporate Auditors, Skills (As of June 2022)
Attendance record (attendance percentage)
FY2022Age

GenderNomination
andCompensation
Advisory
Committee

Chair of Each
Committee

Board ofDirectors

Board ofCorporate
Auditors

Nomination
andCompensation
Advisory
Committee

GeneralManagement

Seiji Narahara

65

Men

〇

Board of Directors

19/19（100％）ー

5/5（100％）○

Ikuo Takeuchi

59

Men

Board of Managing
Executive Officers andControlling Supervisors

19/19（100％）

ー

○

〇

Chikao Morishige

62

Men

15/15（100％）

ー

〇

○

Hiroshi Otsuki

61

Men

19/19（100％）ー

Yutaka Ouchi

65

Men

15/15（100％）ー

19/19（100％）ー

19/19（100％）ー

19/19（100％）ー

Directors

OutsideCorporate Auditors

Independent○(Chair)Masaru Nakamura

○

○

68

Men

Takafumi Isogai

○

○

73

Men

Kimie Sakuragi

○

○

63

Women

Masaaki Harima

○

○

71

Men

18/19（95％）

ーHiroshi Fukushi

○

○

64

Men

ー

ー

Yasuhiro Iizuka

63

Men

Takayuki Tabo

61

Men

(Newly appointed)

081

Of the experience and background required by the company, skills that are
particularly beneficial

Hiroyuki Sugimoto

○

○

69

Men

Akihiko Irie

○

○

65

Men

TOYOBO REPORT 2022○

ObserverBusiness
Operation /Sales

Production
Technology /R&D○

Term of
OfficeReason for Appointment〇

11 yearsー〇

2 yearsー

1 yearー

2 years

ー

ー

〇

〇

○

1 year

〇〇5 years

Has leveraged his extensive experience and wide-ranging
knowledge as a manager

4 years

Has leveraged his extensive experience and wide-ranging
knowledge as an academic specializing in the quality control field○

3 years

Has leveraged her extensive experience and wide-ranging
knowledge in the fields of corporate ethics, compliance,and sustainability○

2 years

Has leveraged his extensive experience and wide-ranging
knowledge as an attorney at law

ーHas leveraged his extensive experience and wide-ranging
knowledge as a manager and high level of expertise in thebiotechnology and digital fields

4 years

ー

ー

〇

5/5
（100％）〇〇〇

19/19（100％） 15/15（100％）〇○

15/15（100％） 10/10（100％）〇

15/15（100％） 10/10（100％）

Overseas
Experience

○

〇

5/5
（100％）

Risk
Management /Compliance〇〇

18/19（95％） 15/15（100％）

Finance /Accounting

5/5（100％）

〇

〇

〇

○

〇

1 year

〇〇〇5 years

Has leverage his extensive experience and wide-ranging
knowledge as a certified public accountant

1 yearHas leverage his extensive experience and wide-ranging
knowledge of corporate auditors at other companies, including
listed companies〇

TOYOBO REPORT 2022

082

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation* As of June 2022

Overview of Boards and Committees

Governance Policy and Activities

G Corporate Governance
Basic approach and structure overview

Board of Directors

Main Issues (FY2022)

Members:●

Number of meetings
held in FY2022: 19

the three policies of (1) ensuring timeliness and accuracy
in decision-making, (2) ensuring transparency inmanagement, and (3) emphasizing fairness, and will
work to appropriately collaborate with all stakeholders,such as shareholders.
Furthermore, by carrying out its fiduciary responsibility
and accountability to shareholders, we will ensure theeffectiveness of corporate governance and continually workon its improvement.

Based on the corporate philosophy of Jun-Ri-Soku-Yu(adhering to reason leads to prosperity), we believe that our
purpose is to contribute to solving social issues through its
proprietary technologies after ascertaining these issues
from a long-term perspective.
Toyobo, to respond to the changing times andcontinuously enhance corporate value, has established

Members* and Roles

Board of Corporate
Auditors
Number of meetings
held in FY2022: 15

Role:

The Board of Directors receives reports on the progress of medium- and long-term
themes, including from the perspective of sustainability, and the status of businessexecution in each business, and conduct appropriate supervision.
In addition, by taking our fiduciary responsibility and accountability to shareholders
into account, it works to build a corporate governance structure that will enable us tosustainably enhance corporate value.

Members:

4 members, including 2 independent outside corporate auditors.

Role:

The Board of Corporate Auditors attends the Board of Directors meetings and otherimportant meetings, states opinions when necessary, and audits the execution
performance by directors through audits of each department’s operation.
KPMG AZSA LLC has been appointed to conduct accounting audits required
under Japan’s Companies Act. The Board of Corporate Auditors receive reports on
auditing plans and auditing results from the accounting auditor, and meet with them toperiodically exchange information. Information is also exchanged with the Internal Audit
Department, which monitors the effectiveness of internal control.

Members:

3 members, including 2 independent outside directors and the Chair. The Nomination
and Compensation Advisory Committee is led by an outside director. 1 outside
corporate auditor also participates as an observer.

Corporate Governance Structure (as of June 2022)

General Meeting of Shareholders
InsideElection anddismissal

OutsideElection anddismissal
Accounting auditing

Nomination andCompensation
Advisory Committee

Board of Directors

Consultation

2 outside directors (67%) /Chair

Decision-making, supervision,
election, and dismissal

Accounting Auditor
Reporting5 inside directors / 5 outside directors (50%)
including 1 women director (10%)

ReportingElection anddismissal

Board of Corporate Auditors

2 inside corporate auditors /2 outside corporate auditors (50%)
including 0 women auditors (0%)

ReportingBoard of Managing Executive Officers andControlling Supervisors

Corporate Planning Committee

Board of Executive Officers

Financial Control Committee

Cooperation

Assessing theappropriateness

Board of Managing
Executive Officers
and Controlling
Supervisors

Role:

Based on proposals from the President, the Nomination and Compensation Advisory
Committee deliberates basic policies and criteria on the nomination of officers andsuccession planning, and reports to the Board of Directors.

Members:

12 members, including those also serving as directors. The Chair and 2 insidecorporate auditors may also participate and state their opinions.

Role:

The Board of Managing Executive Officers and Controlling Supervisors deliberates inadvance on matters to be resolved by the Board of Directors, and determines mattersrelated to business execution entrusted by the Board of Directors. The Corporate
Planning Committee and the Financial Control Committee have been established underthe Board of Managing Executive Officers and Controlling Supervisors to manage risks
related to management.

Members:

13 members. The Sustainability Committee consists of the Chair and the members of theBoard of Managing Executive Officers and Controlling Supervisors, and the President
serves as chair. 2 inside corporate auditors may also participate and state their opinions.

Number of meetings
held in FY2022: 32

Sustainability
Committee

Cooperation

Sustainability Committee

Business
execution

Number of meetings
held in FY2022: 5

Number of meetings
held in FY2022: 4

Role:

The Sustainability Committee reviews the progress of company-wide sustainability
activities each quarter, and discuss new issues to be addressed and company-widerisks. The content of the Committee’s discussions is reported to the Board of Directors
on a regular basis.

Members:

19 members. The Corporate Planning Committee members are selected from eachspecialized field and business departments. The Director in charge of planning serves
as chair.

Risk Management Committee
Various Committees

Functional organization

Internal
auditing

Internal Audit Department

Corporate Planning
Committee

Internal auditing

Number of meetings
held in FY2022: 9
Auditing

Group Companies

AuditingRole:

The Corporate Planning Committee provides opinions and deliberates from a
professional and managerial perspective on strategic matters, including important
capital investments, new businesses, new company establishment, technology
introduction, and business alliances, based on the entrustment of the Board ofManaging Executive Officers and Controlling Supervisors. This is to improve theefficiency of deliberations and resolutions by the Board of Managing Executive Officers
and Controlling Supervisors and to ensure the proper approval process, including
matters concerning affiliate companies.

Members:

1 Chairperson, and 4 standing committee members.

Role:

The Financial Control Committee pursues improving the efficiency of deliberations andresolutions at the Board of Managing Executive Officers and Controlling Supervisors,
and the appropriateness of the approval process by expressing opinions anddeliberating from a professional and managerial perspective on important individual
investments, loans, guarantees, and other matters. In addition, it seeks to streamline
the deliberation or resolution of matters not subject to deliberation or resolution at themeetings, as required by various rules and regulations.

Each Group Company’s
Corporate Auditors

Composition of the Board of Directors

Ratio of
OutsideDirectors

50%

083

TOYOBO REPORT 2022●●

Independent
outsidedirectors:
5 members
Insidedirectors:
5 members

Term of
OfficeAverage of

3.1 years

Important investment deals
Safety and disaster prevention, and quality
initiatives● Quality-related misconduct incidents● Human resource system, and humanresource development● Sustainable Vision 2030
● Cross-shareholdings● Management policy, and management issues● R&D-related● Business strategy● Establishment of joint ventures●

Determination of auditing policy and auditingplans● Sharing the results of operational andaccounting audits, and visiting audit toaffiliate companies● Attending and confirming details of important
meetings, including Board of Directors● Sharing details of discussions with board● Confirming important documents●

Review of officer compensation system
Basic policy and criteria for nomination,
election and dismissal of officers● Recommendation of candidates for directors
and corporate auditors, and election anddismissal of management team members●●

Auditing

ReportingPresident

Nomination andCompensation
Advisory Committee

10 members. The Board of Directors consists of the Chair, who chairs the Board of
Directors, 5 independent outside directors, and a director who is also as the executive
officers. The number of directors on the Board of Directors is set at 14 or less, with atleast a third being outside directors, and the term of office for directors is set at one
year.

●

0–3 years:
7 members●

4–9 years:
2 members●

10 years ormore:
1 memberDiversity(Ratio of Women
Director)

10%

Women
director:
1 member● Men
directors:
9 members●

Financial Control
Committee
Number of meetings
held in FY2022: 15

Same issues as the Board of Directors

Progress report on materiality and KPIs
Initiatives toward carbon neutrality (Scope 1,2 GHG emissions reduction plan, etc.)● KPI settings in work-style reforms, etc.
●●

Significant capital investment projects
Matters regarding new businesses● Matters regarding the establishment of newcompanies● Other important matters (investments,
technology introductions, business alliances,acquisitions, etc.)● Review of major Corporate Planning
Committee matters●●

The following matters of individual importance:● Investments and lending● Guarantees and reservations of guarantees(including management awareness letters)● Collateral provision for third parties

TOYOBO REPORT 2022

084

VisionElection and dismissal of top management
and nomination of candidates for directors
and corporate auditors
PolicyThe election and dismissal of top management members(executive officers who also serve as directors) and thenomination of candidates for directors and corporate
auditors are based on whether they are outstanding
individuals who have the appropriate insight for theirrespective posts, while also taking into consideration thecriteria for nominating directors and corporate auditors, andare decided by the Board of Directors after deliberation by
the Nomination and Compensation Advisory Committee.
(1) Stance on composition of the Board of Directors
and Board of Corporate Auditorsa) Board of Directors
The Board of Directors is comprised of the Chair of theBoard, outside directors, and directors who also serve as
executive officers, in order to have a balanced structure withthe expertise and skills necessary to appropriately provide
strategic direction and made decisions on importantbusiness operations, and the independence necessary tostrengthen supervision of management, while also ensuring
diversity in terms of professional background, gender, age,etc. Based on the concepts of (1) ensuring timeliness andaccuracy in decision-making, (2) ensuring transparency inmanagement, and (3) emphasizing fairness, the Articles ofIncorporation stipulate that the Board of Directors musthave no more than 14 members, and that the ratio ofoutside directors be at least one-third of members.
b) Board of Corporate Auditors
The Board of Corporate Auditors comprises humanresources with expertise and skills in finance and accounting
as well as knowledge of the group’s business, from theperspective of ensuring the effectiveness of auditing.
(2) Summary of criteria for nomination, etc.
a) Candidates for directors (excluding candidates foroutside directors)
Candidates for directors should have knowledge,
achievements, experience, and skills as a manager, as well
as a company-wide perspective

085

TOYOBO REPORT 2022b) Candidates for outside directors
Candidates for outside directors are expected tocontribute to the enhancement of corporate value andthe strengthening of supervision, such as providing
business suggestions and management support
Candidates for outside directors must meet separately
specified independence criteria for outside directorsc) Candidates for corporate auditors
Candidates for outside corporate auditors are expected
to have ability to make appropriate judgments from an
independent and objective standpoint in the auditing of
the performance of duties, etc.
Candidates for outside corporate auditors must meet theindependence criteria
Procedures for nominations, etc.
The Nomination and Compensation Advisory Committee,
comprising a majority of outside directors, has been
established as an advisory body to the Board of Directors
to ensure fairness and transparency, and is chaired by anoutside director.
The Committee deliberates and reports to the Boardof Directors on basic policies and criteria for nominating
officers and succession planning, etc., based on proposals
from the President.
Dismissal policy and procedures
In the event of an act of misconduct, impropriety, or actions
suggesting a breach of trust, or of other reasons that makethe member unsuitable to serve as an officer, after
deliberation by the Nomination and Compensation Advisory
Committee, a decision will be made by the Board of
Directors on their dismissal.

Training programs for officers
As well as giving explanations to newly appointed directors
and corporate auditors concerning their roles andresponsibilities, the company sends executive officers to an
external training program upon their appointment, in orderto acquire the necessary knowledge.
In addition, newly appointed outside directors andoutside corporate auditors are given explanations
concerning the company’s operations, finances, andorganization, etc. and provided visits to each business site.
They are continuously provided with opportunities after
assuming office to acquire the necessary knowledge inorder to sufficiently fulfill their roles and responsibilities.

Evaluating the effectiveness of theBoard of Directors
In order to further enhance the functions of the Board of
Directors, the company carried out an overall analysis andevaluation of the effectiveness of the Board of Directors infiscal 2022 with the support of an external organization. An
outline of this evaluation is as follows.
Method of analysis and evaluation of effectiveness(1) Target: All directors and corporate auditors(2) Method: Conducted a survey with approximately 40
questions, and provided the responses directly to an
external service provider.
(3) Analysis and evaluation: The Board of Directors
conducted the analysis and evaluation based on reportsof aggregate results from the service provider.
Summary of evaluation results(1) Member numbers for the Board of Directors, the ratio ofinternal and external members, and the Chair’s
management of meetings procedures were evaluated as
generally appropriate.
(2) It was confirmed that certain results and improvements
were achieved as a result of addressing the five issues
identified previously [1) strengthened risk management
including of safety and disaster prevention, and QA,2) strengthening the group-wide internal
audit functionality, 3) tackling medium- and long-term
themes, 4) initiatives towards succession planning andappointment procedures for Chief Executive Officers,and 5) further streamlining of Board of Directors’
management of meetings procedures].
(3) However, items 3), 4), and 5) received relatively low
evaluations, and were identified as future issues to beaddressed in addition to strengthening group
governance. Item 1) also remains a future issue to beaddressed in order to further improve throughcontinuous initiatives.
Issues and future initiatives
The Board of Directors is working to improve its own
effectiveness as a whole through the following initiatives.
(1) Risk management including of safety and disasterprevention, and QA
We will monitor the activities of the Risk Management
Committee to further enhance the group-wide risk
management structure.

Strategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

We will monitor the progress and ensure the effectivenessof the implementation of the master plan for safety anddisaster prevention and the restructuring of the QA
management structure.
(2) Enhancing discussion on solutions to medium- tolong-term management issues such as DX
We will address themes set in the annual plan at the
beginning of meetings to enhance discussion.
We will increase the use of venues other than the Board of
Directors, and strengthen collaboration with the Sustainability
Committee and Risk Management Committee.
(3) Further initiatives towards succession planning andappointment procedures for Chief Executive Officers
We will further ensure transparency and fairness byreceiving activity reports from the Nomination andCompensation Advisory Committee, and other initiatives.
(4) Further streamlining of Board of Directors’
management of meetings procedures
We will review the operation of the Board of Directors as
follows in order to further improve efficiency, and to ensuresufficient time for deliberation on important management
issues.
Earlier advance distribution of materials, and moredetailed explanations beforehand
Streamlined explanations(5) Strengthening group governance
We will receive reports from the newly established
Corporate Business Management Department of
Subsidiaries and Affiliates on the business management ofgroup companies, such as on risk management, andbecome involved appropriately.

Officer compensation system
Basic Policy
Toyobo’s system of officer compensation is designed asfollows, in line with basic policy, within the monetary amountresolved at the Annual General Meeting of Shareholders.
1) Provide incentives that lead to Toyobo group’s sustained
growth and enhance corporate value over the longer term2) Secure highly talented management personnel
3) Set determination procedures that are objective andhighly transparent
Compensation structure and levels are reviewed
based upon the company’s business environment, levels of
employee salaries, and other companies’ levels based uponsurveys conducted by specialized external organizations.

TOYOBO REPORT 2022

086

VisionMonetary compensation(including performance-based amounts)(1) Composition of monetary compensation
Monetary compensation for directors (excluding outside
directors) is a fixed monthly compensation, comprising
the following two components:
1) Compensation by position for directors (representative
director, director)
2) Compensation by position for directors also serving as
executive officers(2) Compensation by position for directors who also
serve as executive officers
1) Comprises set amount by position and the short-term
incentive reflecting the previous fiscal year
company-wide evaluation and performance evaluation of
the overseen department.
2) The KPI for the company-wide performance evaluation isthe consolidated operating income, given that this is amajor management indicator. The specific amount shallbe determined in accordance with this by the Board of
Directors based upon advice from the Nomination andCompensation Advisory Committee.
3) Performance evaluations of overseen departments will
be determined by a comprehensive overview of its
performance taking into account improvements inoperating profit and ROA.
4) Compensation is calculated individually using formulas
determined by the Nomination and Compensation
Advisory Committee, and based upon company-wide
performance evaluations and the performance evaluationof the overseen department, and decided upon by the
Board of Directors.
5) Compensation for the Chair of the Board & Director isthe same as the President, taking into account their duties.

Stock compensation
In order to increase incentives to sustainably enhance
corporate value and to promote more value sharing withshareholders, a certain percentage of compensation is
granted annually as non-monetary compensation for
granting restricted shares (non-performance-based,
provided in advance).
Ratio of compensation
Compensation for directors also serving as executive
officers is designed to appropriately increase incentives toincrease corporate value, and the ratio of the fixed portion,short-term incentive portion, and the non-monetarycompensation is 7:2:1 (when 100% of KPI achieved).
(Shifted to the new compensation system in July 2022)
Other(1) Compensation for outside directors is to be fixed monetarycompensation in view of their role and independence.
(2) Compensation for corporate auditors is to be fixed monetarycompensation in accordance with their duties andresponsibilities, and is to be decided by discussions with thecorporate auditors in view of their duties and responsibilities.
(3) The Nomination and Compensation Advisory
Committee, comprising a majority of outside directors
as members, has been established as an advisory bodyto the Board of Directors to ensure the transparency
and objectivity of decisions regarding compensation.
The Nomination and Compensation Advisory Committee
receives advice from the Board of Directors anddeliberates on the system, level, and calculation methodof officer compensation, in addition to the targets set forthe company-wide performance evaluations forming
part of the compensation by position. The Board of
Directors makes the final decision on the amount of
individual compensation based upon the report from theNomination and Compensation Advisory Committee.

Details of Officer Compensation (FY2022)

Position

087

Total
compensation, etc.

Basiccompensation

Performance-based
compensation

Non-monetary compensation(Compensation for granting
restricted shares)

In fiscal 2022, the Board of Directors partially revised theofficer compensation system based on a study of social
trends surrounding executive compensation andappropriate incentives to improve performance. The main
points of the review are as follows and were implemented
starting in July 2022.
(1) Composition of compensation
a. Reduce the percentage of basic compensation byposition and increase the percentage of short-term
incentive compensation.
b. After review, the ratio of basic compensation byposition, short-term incentive compensation, andlong-term incentive compensation (compensation for
granting restricted shares) should be 6:3:1.

(¥ mn)(¥ mn)(¥ mn)

Directors (including outside
directors)

422 (41)

310 (41)82 (−)

30 (−)

12 (4)

Corporate Auditors (including
outside corporate auditors)

69 (17)69 (17)

− (−)

− (−)

6 (3)

Total (including outside
officers)

491 (59)379 (59)82 (−)

30 (−)

18 (7):

Basic compensation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material(2) Composition of short-term incentive
compensation
The ratio of company-wide performance to theperformance of the department in charge to be reflected in
short-term incentive compensation shall be as follows:
Representative directors and executive directors:
company results only
Directors: company performance = 2, Performance ofthe department in charge = 1
Executive officers (full-time): company performance= 1, Performance of the department in charge = 2(3) Performance indicator for short-term incentive
compensation
The performance indicator used to evaluate
company-wide performance will be changed fromoperating income to EBITDA*, in turn linking it to the goalsof the 2025 Medium-Term Management Plan.
* Earnings Before Interest, Taxes, Depreciation, and Amortization(EBITDA) is an indicator that indicates a company’s profit level.

Ratio of Compensation
Short-term incentive
compensation
Reflect the previous fiscal year’s
composition of short-term incentive
compensation:

Long-term incentive
compensation
Composition for granting restricted
shares=6:3:1

History of Strengthening Corporate Governance2013
Corporate Governance
Structure
Directors (of which areoutside directors)
Corporate auditors (of which areoutside corporate auditors)

Promotion Boards andCommittees

Number of
officers*(¥ mn)TOYOBO REPORT 2022

Review of officer
compensation system* Including mid-period appointments and resignations
Total compensation by type

Strategy and Practiceof Value Creation

Compensation-related

Policies and Code of
Conduct

2014

2015

2016

2017

2018

2019

2020

2021

2022

● 2005: Introduced the Executive Officer System● 2013: 9 members(1 member)● 2015: 10 members (2 members)● 2018: 9 members (3 members)● 2021: 11 members (4 members)● 2019: 10 members (4 members)● 2022: 10 members(5 members)● 2013: 4 members (2 members)● 1998: Established the Ethics Committee (the current Compliance Committee)● 2004: Established an Advisory Board on Officer Provisions, etc.
(the current Nomination and Compensation Advisory Committee)● 2008: Established the CSR Committee (the current Sustainability Committee)● 2015: Established the Nomination Committee(the current Nomination and Compensation Advisory Committee)● 2015: Established the Liaison Meetings of Outside Officers● 2016: Started evaluating the effectiveness of theBoard of Directors● 2021: Established theNomination andCompensation Advisory
Committee● 2021: Established the
Risk Management
Committee● 2019: Introduced the plan of compensation for granting
restricted shares● 1998: Formulated the Business Conduct Guidelines (the current TOYOBO Group Charter of Corporate Behavior)● 2000: Formulated the TOYOBO Group Employee Conduct Standards● 2015: Formulated the Corporate Governance Basic Policy● 2019: Established the TOYOBO PVVs
corporate philosophy framework

TOYOBO REPORT 2022

088

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Governance Policy and Activities

G Compliance
Basic approach

Based upon our corporate philosophy of Jun-Ri-Soku-Yu(adhering to reason leads to prosperity), at the core of
Toyobo group’s compliance activities is the idea of “Do whatmust be done” and “Don’t do what must not be done.”

Promotion structure
The goal of the Compliance Committee, which iscomprised of members from the Board of Managing
Executive Officers and Controlling Supervisors, is topromote group-wide compliance from a management
perspective. A Compliance Promotion Committee, which
has been established as a sub-committee of theCompliance Committee, considers specific initiatives, andthe Legal and Compliance Department promotes
compliance throughout the group as a whole. In fiscal
2022, the Compliance Committee convened twice, and theCompliance Promotion Committee convened four times.
They have worked toward enhancing the effectiveness ofeducation, training, and preventive measures.

Compliance consultation desks
Toyobo group provides an internal compliance consultation
desk (internal reporting service) and external complianceconsultation desk for all group employees. These receive
reports and give consultations regarding workplaceviolations of laws and regulations or fraudulent acts, actsthat violate anticompetition laws, corruption—including
bribery and embezzlement—and bullying or harassment,
and work toward early detection of these problems andtoward rectifying them and preventing their recurrence.

To enhance awareness of the consultation desks, infiscal 2022, special stickers outlining how to use them were
produced, and distributed within Toyobo workplaces.
Also, as the quality-related misconduct incidents thatwere discovered in fiscal 2021, was not reported via theinternal compliance consultation desk, in October 2021, an
external compliance consultation desk was established,using a specialist external service provider.
In fiscal 2022, there were a total of 62 consultations,seven of which were made through the external complianceconsultation desk. For the cases that were deemed to be
problematic, we implemented corrective measures,
recommended disciplinary action, provided advice to theconsulting parties, and answered their questions.
Details of Consultations Handled by the Compliance
Consultation Desks (FY2022)
Details of consultations

Increase inawareness ofcompliance

Awareness anduse of complianceconsultation desks
No. of serious legal
violations

Targets
Improvement in compliancequestionnaire responses
Expansion of compliance study sessions(Managers) and various other trainings

14

Suspected abuse of authority

10

Quality and data related matters

5

Questions and opinions relating to internal systems and rules, etc.

5

Matters relating to COVID-19 and/or vaccination

4

Matters relating to working hours, overwork, etc.

3

Bullying or harassment

2

Suspected accounting irregularities, etc.

2

Inquiries regarding the reporting system / framework, etc.

2

Matters relating to occupational safety

1

Matters relating to the handling of reports

1

Suspected violations of the law

1

Others

12

Total

62

Results (FY2022)
Does the company emphasize compliance?
I feel that it does, or by and large I feel that it does: 79% (down 9% YoY)1● Awareness of “Compliance Mini Study”
I read every issue, or I sometimes read it, or I readthose articles that are of interest to me: 78% (roughly the same as in the previous year)●●●

Compliance study sessions Held 10 times + video delivered to all employees
Various other trainings Held 21 times
Awareness of compliance consultation desks 87% (down 5%)
Ease of use of compliance consultation desks
I would like to try using it, or I can’t really say one way or the other: 93% (up 4%)2

Improvement in compliancequestionnaire responses●

Disclosure of no. of cases handled

62 cases handled

0 violations per year

0 violations●

1 In October 2021, “I can’t really say one way or the other” was added as one of the responses that could be chosen for the survey question (for reference, theshare of respondents choosing this response was 17%)
2 There were three possible responses that could be chosen for the survey question: “I would like to try using it,” “I can’t really say one way or the other,” and “I
would not be keen on using it.”089

TOYOBO REPORT 2022

Main Activities in FY2022
Initiatives

Overview

Revision of, and ensuring
familiarization with, the
TOYOBO Group
Compliance Manual

In order to strengthen the understanding of all Toyobo group employees and ensure that they are thoroughly familiarized with
relevant rules, based upon the principles declared in the TOYOBO Group Charter of Corporate Behavior, we havesummarized the rules to which employees are subject in the TOYOBO Group Compliance Manual. During Compliance
Enforcement Month every year, we revise the manual (both the Japanese-language and English-language versions) anddistribute it to group employees. We also edit the manual to produce localized versions at our overseas business sites. At
each workplace, we have employees read through the manual together to familiarize themselves with the TOYOBO Group
Charter of Corporate Behavior.

Awareness-raising activities
during Compliance
Enforcement Month

Video messages (covering safety, quality, and compliance) from the President and other executive officers were disseminated.
We are also working to raise awareness of the compliance consultation desks, using posters and digital signage.

Holding compliance study
sessions

We held 10 compliance study sessions targeting management-level personnel from all Toyobo business sites including
headquarters, branches, production centers, and at 37 affiliate companies. With members of the relevant departments ofcompliance, QA, and IT acting as lecturers, a total of 1,084 employees participated in these sessions, which covered topics
such as management’s role in preventing misconduct, preventing harassment, and cyber security. We have also created avideo of the study sessions edited for general employees, and distributed this to group companies.

Various other trainings,
including level-specifictraining, occupation-specifictraining, etc.

As part of level-specific and occupation-specific training for managers, new employees, sales staff, and personnel being sent
on overseas assignments, we implemented 21 compliance education sessions. Also, we have implemented discussion-type
training activities for managers, focusing on topics that are of particular importance to the company, such as safety, quality,
and compliance, from fiscal 2022 onwards.

Issuing case study reports

A “Compliance Mini Study,” which educates employees about compliance violations in a case study format, is issued
monthly, and heads-up reports are issued occasionally based on cases that have occurred within Toyobo group.

Incidents

Communication and labor management

KPIs and Results
Initiatives

Education and awareness-raising activities

Questionnaire implementation
During Compliance Enforcement Month, which is held eachyear, we implement an anonymous questionnaire. This
examines employee awareness of compliance, including
ethics, safety, quality, confidential corporate information,harassment, the organizational culture, and use of theconsultation desks. Through this, we confirm the status ofcompliance risks in the workplace.
In fiscal 2022, we received 6,765 responses from
employees, and the results of the questionnaire survey weredisclosed to all employees. Details on individual problems
and issues are shared with related departments in a form
that does not identify the respondent—this has proved
useful in improving the situation and preventing problems.

Anti-corruption initiatives

and entertainment. We ensure that these are wellunderstood. Additionally, in order to build fair and healthy
relationships with business partners, we have put in placerules regarding the accepting of gifts and entertainment.
These include a requirement to decline to accept money orits equivalent, or gifts and entertainment that exceedsocially accepted norms, and the introduction of a reporting
system for when gifts or entertainment are received.
In fiscal 2022, as part of our company-wide risk
management activities, we implemented a legal compliancerisk assessment. Based on a variety of risk scenarios, we
performed assessment in terms of the two axes of theseverity of impact and the likelihood of a risk occurring. The
results obtained confirmed that the level of corruption risk,
including bribery, was relatively low across all Sales andMarketing Divisions.
* Toyobo Group Anti-Bribery policy
https://www.toyobo-global.com/company/compliance/anti-bribery/

Toyobo group positions the prevention of corruption in all
forms, such as bribery, as a priority issue for compliance.
Particularly with regard to bribery, in addition to Toyobo
policies* and regulations, we have also decided uponguidelines that detail specific rules covering matters suchas judgments and monetary standards when giving gifts

TOYOBO REPORT 2022

090

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

The Basis of Value Creation
Governance Policy and Activities

G Risk Management

Risk management structure
On April 1, 2021, Toyobo group established a Risk
Management Committee headed by the President, forcentralized management of risks throughout the group. The
committee comprises members of the Board of Managing
Executive Officers and Controlling Supervisors as well as
members nominated by the chair, and in fiscal 2022, its firstyear of establishment, it convened four times.

Management Structure and Processes
Sustainability Committee

Reporting

Risk Management Committee

Various Committees
Safety and Disaster
Management Committee

Internal Control
Committee

Global Environmental
Committee

Information
Committee

Product Liability /Quality Assurance Committee

Research & Development
Committee

Compliance
Committee

Intellectual Property
Committee

Export Reviewing
Committee

Participation /ReportingCorporate Sustainability
Department

Monitoring

Participation /Reporting

TOYOBO REPORT 2022

Follow-up

Summary ofactivities

Risk Management andCompliance Functions
Considering / Expanding / Monitoring measures

Risk owners
Execution of Measurement / Self Inspection

091

Board ofDirectors

The main risks recognized that could have a material
impact on Toyobo group’s operating results and financial

position are as listed below. The list does not include all therisks related to Toyobo group.
Forward-looking statements were determined by thegroup as of the end of fiscal 2022.

Recognized risks
Financial risks

Incurred or highly probable risks

Medium- to long-term risks

Foreign exchange rate
fluctuation● Major interest rate rise
● Substantial decline in stock
prices● Impairment loss of fixed assets●

Occurrence of disasters, accidents andinfections● Further worsening of political andeconomic situations● Inappropriate conduct in the contents ofthird-party certification registrations, etc.

●●

Purchase of raw materials (▶p.073)
Product defects (▶p.063)● Securing of human resources (▶p.065)● Climate change(▶p.047)● Environmental impact (▶p.049, p.055)● Information security (▶p.092)●

Laws, regulations andcompliance (▶p.089)● Overseas business activities● Litigation●

Data Security and Privacy
Basic approaches and structureWith the continuing development of the information society,the effective utilization of data to drive product and technology
development and make a meaningful contribution toward
society and the environment has become the key to survival
for companies. On the other hand, inappropriate handling ofdata can cause significant damage and negative impacts,
including loss of sales opportunities due to leakage ofconfidential information and information system outages.
Toyobo group has formulated an Information Security
Policy, and strives to ensure that all information assets areappropriately managed and utilized. In fiscal 2022, we
worked to familiarize employees with the basic rules, forexample by disseminating a video explaining the Information
Security Policy, and guidelines and training videos for
managers and information system users.
Toyobo Information System Create Co., Ltd., one of ourgroup companies, has obtained ISO 27001* certification,and undergoes an external audit based on ISO 27001 on anannual basis. Toyobo Information System Create Co., Ltd.
has been commissioned to assign personnel to perform
information system management at five Toyobo business sites(head office, the Research Center, the Tsuruga Research andProduction Center, the Iwakuni Production Center, and theInuyama Plant; these five sites represent half of all Toyobo
business sites in Japan), and also provides comprehensive
management at other business sites using Toyobo Information
System Create’s management system.
The problem of cyber-attacks has been getting steadily
more serious over the past few years, and Toyobo’s overseas
business sites and group companies have become targets
on many occasions. With this in mind, we have been working

to bring the information security measures of our affiliatecompanies, both in Japan and overseas, up to the same levelas Toyobo aiming to strengthen information security throughToyobo group as a whole.
* ISO 27001 is an international standard for information security
management systems.

Toyobo Group Information
Security Management Structure
Chief Information Security Officer (Responsible Executive Officer)
Formulating basic policy and plans

Cyber Security Committee(Chair: General Manager, IT and DX Planning Department)
Formation of / instruction on
management structure

Mutualcollaboration
Support for activities /reporting・Training・Drills
・Measures
・Audits

Information Security Officer(Responsible Executive Officer,
leader of each group)
Policydissemination
Implementation
instructions

Asset
designation
Execution of
measuresDept. person in charge* Basic Policy on Business Risk
https://www.toyobo-global.com/sustainability/governance/risk/

Business risks

Dept. person in charge

Toyobo group has established a Basic Policy on Business
Risk* that outlines our fundamental stance on risk
management activities. Based on the Policy, we identify
various types of risk that could pose a threat across theentire range of our business activities, and manage risk
appropriately according to the characteristics of each risk.
In an emergency situation, we immediately set up a task
force under the direction of the relevant executive officer,
and bring the crisis under control through a swift response.
By putting these structures in place and conducting the
aforementioned initiatives, we work hard to maintain thetrust of our customers, the local community, and ourshareholders and other stakeholders.

This Risk Management Committee brings together risk
management activities (identification, analysis, evaluation,and response), as well as formulating risk management
policies for the group as a whole. It is working to strengthen
our risk management structure by aiming to build effective
and sustainable organizations and approaches.
In fiscal 2022, we began to operate the structure that
we had designed and to promote activities aimed at
reducing risks. We also started working to achieve
company-level risk management and develop reduction
activities targeting specific risks.
As a starting-point for these activities, we
implemented assessment of company-wide risks. Basedon a variety of risk scenarios, we performed assessment interms of the two axes of the severity of impact and thelikelihood of a risk occurring, and the results of thisassessment were used to identify major company-widerisks that we need to pay particular attention to. Goingforward, we will implement periodic monitoring activities inrelation to these risks.
As part of our management operations, in order tobuild a company-wide structure to identify risks throughout
the company, prevent their occurrence and ensure early
detection, and also put in place measures to prevent
reoccurrence, we are realizing the sustained
implementation of self-directed risk management activities
appropriate to particular business areas and roles.

Dept. person in charge

Basic approach

Initial incident report
Initial response, recovery

Departments responsible forLegal ComplianceInternal Rules
Personal Information Management
Education & Training
Information Systems Operation
Incident Response

Convening of related parties
Final report

Computer Security Incident Response Team (CSIRT)
A virtual team convened according to the severity of the information security incident

TOYOBO REPORT 2022

092

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Overview of FY2022

Sustainability management

Key Events in Fiscal 2022

■ Issuing social bonds
In December 2021, Toyobo issued the company’s firstsocial bonds.* To issue the bonds, a framework wasformulated that followed the Social Bond Principles (SBP)
2021 of the International Capital Market Association (ICMA)and the relevant guidelines.
Through the issuing of these bonds, we aim to further
the creation of customer value and the provision of social
value. In addition, by spreading awareness of our proactive
implementation of CSV and SDGs related activities, and byincorporating constructive dialogue with stakeholders into ourbusiness activities, we are driving our sustainable growth.

Eco-conscious products design■ Development of laser-printable film for exterior labels
We have developed LesireTM, laser-printable film for exterior labels, for use with products
such as foods and cosmetics, which is the first film product of its kind.* By effectively
utilizing the technology that Toyobo has cultivated over the years, we have made it
possible to print labels directly using an ordinary, general-purpose laser printer.
LesireTM is expected to enhance productivity by eliminating the need for ink
replenishment and coating processes. In addition, because there is no need to wash off
ink or coating material before recycling, the film is more suitable for recycling, and will help
to conserve resources. Going forward, we will continue to expand our line-up of
eco-conscious products and contribute toward the realization of the circular economy.
* Based on a Toyobo survey.

Laser-printable film LesireTM forexterior labels
Text and symbols can be printed clearly(transparent type on the top;
milky white type on the bottom)■ Toyobo succeeds in polymerizing 100% bio-based PET resin
In December 2021, we succeeded in polymerizing polyethylene terephthalate (PET) resinthat is made solely from plant-derived raw materials. It was provided for use as trial
production raw material in the manufacturing of PET bottles that use only plant-derived
raw material, which are being developed jointly by Japan’s Suntory Group and U.S.
biochemical start-up Anellotech, Inc.
With the aim of making a further contribution toward the realization of the circular
economy, we are promoting the shift toward plant-derived raw materials and the effective
utilization of recycled resources. Working through R Plus Japan, Ltd., a joint venture company
established with Suntory and other companies in the Japanese plastics value chain, we areworking to ensure that used plastic is recycled. (▶p.049 “Plastic resource circulation”)

Overview

100% bio-based PET resin polymerized
by Toyobo (left)
PET bottle made from 100%plant-derived raw material, developedby the Suntory Group and Anellotech,
Inc. (photo courtesy of Suntory) (right)

Name:

TOYOBO CO., LTD.—43rd unsecured straight bonds(with inter-bond parri passu clause) (social bonds)

Total amount ofissue / Term

¥10 billion / 7 years
Expenses relating to manufacturing of medical film

Overview offund use andcompatibility
with the SDGs

(Expenses relating to R&D and equipment
investment for items such as artificial
kidney hollow fiber membranes, andvirus-removing membranes)

Expenses relating to reagent manufacturing(Expenses relating to R&D and equipment
investment for items such as raw material
enzymes for use in diagnostic reagentsand genetic testing reagents)* Social bonds are bonds issued to raise funds for business activities that willcontribute toward solving social issues■ Adoption of internal carbon pricing system
In April 2022, we began operation of our internal carbon
pricing system, which is a framework for setting an internal
price for the company’s CO2 emissions. In relation to capital
investment and investment in R&D facilities that may lead toan increase or decrease in CO2 emissions, we apply theinternal carbon price when calculating expenses, and use
the calculation results as one of the criteria for investment
decision-making.
Through the effective utilization of this system, we aim
to reduce our greenhouse gas (GHG) emissions to net zeroby fiscal 2051, and become carbon neutral.

System Overview
Internal carbon
price:¥10,000 / t-CO2

Applicable to:Capital investment and investment in R&D facilities that
may increase or decrease CO2 emissions

Method ofapplication:

With regard to the increase or decrease in CO2emissions resulting from individual equipment
investment plans (including R&D equipment), theinternal carbon price will be applied when calculating
expenditure and used as a reference for investment
decisions.

External evaluation■ Inclusion as a component stock in ESG indices

Next-generation, cutting-edge technologies■ Development of smart clothing that uses conductive material
Using COCOMI® stretchable conductive film, we have developed COCOMI® Cycling
Undershirt smart clothing for cyclists to use when training. This new product went on sale
via e-commerce retailer Amazon in May 2021.
When a user is wearing the COCOMI® Cycling Undershirt, a heart rate sensor canbe attached to the shirt to measure the heart rate. High-precision measurement ispossible because of the superior stretchability and conductivity of COCOMI®, andbecause the electrode area is carefully positioned to facilitate movement. At the sametime, as this product provides the stretchability, UV protection and quick-drying water
absorption capability expected of sportswear, it supports effective training.
Going forward, we will continue to develop new applications for COCOMI® across awide range of fields, such as healthcare and nursing care.

093

TOYOBO REPORT 2022

In June 2021, Toyobo was selected, forthe first time, for inclusion as acomponent stock in the FTSE Blossom
Japan Index, an international ESG
investment stock index. In March 2022,
Toyobo was selected for inclusion as acomponent stock in the FTSE Blossom
Japan Sector Relative Index.

THE INCLUSION OF TOYOBO CO., LTD. IN ANY MSCI INDEX, AND THE
USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEXNAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF TOYOBO CO., LTD. BY MSCI OR
ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVEPROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

In December 2021, Toyobo wasselected, for the first time, for inclusion
as a component stock in the MSCIJapan ESG Select Leaders Index.

In February 2022, Toyobo wasselected, for the first time, as a Supplier
Engagement Leader, the highest
possible evaluation under the Carbon
Disclosure Project (CDP) supplierengagement evaluation framework.

COCOMI® Cycling Undershirt

TOYOBO REPORT 2022

094

Strategy and Practiceof Value Creation

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

Overview of FY2022

Financial Highlights
Net Sales / Overseas Sales Ratio
Net sales

Capital Expenditure /Depreciation and Amortization

Operating Profit / Operating Profit Margin

Overseas sales ratio

Operating profit

Operating profit margin

Capital expenditure(¥ bn)(%)(¥ bn)

400.0

40.0
375.7

40.0

35.0

35.0

7.0

35.0

30.0

30.0

28.4 6.0

30.0

250.0

25.0

25.0

5.0

25.0

200.0

20.0

20.0

4.0

20.0

337.4

350.0

34.3

33

300.0

7.9
7.6

26.7

(%)

(¥ bn)

8.0

40.0

150.0

15.0

15.0

3.0

15.0

100.0

10.0

10.0

2.0

10.0

50.0

5.0

5.0

1.0

5.0

Cash Flow

Depreciation and amortization

Cash flows from operating activities
Free cash flow

Cash flows from investing activities(¥ bn)

50.0
33.6

40.0

35

30.0
17.1

20.0

23.3
19.1

20.1

10.0

3.4

0
-10.0

0

0
2012

2014

2016

2018

2020

0

0

2022

2012

(FY)

2014

2016

2018

2020

2022

In fiscal 2022, sales of COSMOSHINE SRF® increased due to the operationof a new line, and sales of raw materials and reagents for PCR testing
expanded. Meanwhile, due to the effect of rising raw material prices foritems such as packaging film, engineering plastics, airbag fabrics, polyester
staple fiber and nonwoven filament fiber spunbond, operating profit only
reached ¥28.4 billion, up 6.6% from the previous fiscal year.

Profit (Loss) Attributable to Owners of Parent /EPSInterest-Bearing Debt / Shareholders’ Equity /Debt-To-Equity Ratio (D/E ratio)

Profit (loss) attributable to owners of parent
Earnings per share (EPS)Interest-bearing debt

Shareholders’ equity

-30.0

2012

(¥ bn)(times)(¥ bn)

200.0

2.00

50.0

100.0

7.5

75.0

5.0

47.3

150.0

1.50

1.01 0.98

100.0

0.50
185.7 194.9

2012

2014

2016

2018

2020

2022

(FY)

In fiscal 2022, Toyobo recorded an impairment loss of ¥9.4 billion due toimpairments, including its contract manufacturing business ofpharmaceuticals, but recorded a gain of ¥6.5 billion from the partial sale ofinvestment securities and an increase in operating profit, resulting in profit
attributable to owners of the parent of ¥12.9 billion, roughly three times the
profit of the previous fiscal year.

0

0
2012

2014

2016

2018

2020

2022

45.8

48.5

40.0
6.8

35.0

Interest-bearing debt at the end of fiscal 2022 was ¥191.2 billion, up ¥4.2
billion from the previous fiscal year, due to the financing through borrowing
for capital expenditure. However, shareholders’ equity increased ¥9.2 billion
from the previous fiscal year to ¥194.9 billion due to an increase in retained
earnings, resulting in a D/E ratio of 0.98.

2014

2016

2018

2020

2022

(FY)

25.0

(%)

(Yen)

(%)

45

90.0

9.0

40

80.0

8.0

35

70.0

30

60.0

25

50.0

7.0

5.5 6.0

5.0

5.1

5.0
4.0

15.0

3.0

10.0

2.3

2012

2014

2016

2018

2020

2022

Total return ratio

10.0

5.4

0
(FY)

2012

(FY)

Cash dividends per share

5.0

-25.0

-2.5

1.00

2022

EBITDA30.0

187 191.2
50.0

0

0

ROIC

20.0

50.0

4.2 12.9 25.0

2.5

ROE

45.0

150.0

10.0

2020

Cash Dividends per Share / Total Return Ratio

ROA

(yen)

125.0

2018

ROA / ROE / ROIC / EBITDA

D/E ratio

175.0

12.5

2016

In fiscal 2022, cash flows from operating activities recorded an inflow of¥17.1 billion due to factors such as inflows of depreciation and amortizationand income before income taxes, and outflows due to an increase ininventories and other factors.
Cash flows from investing activities recorded an outflow of ¥24.6 billion,
owing to factors including the purchase of property, plant and equipment
and intangible assets. As a result, free cash flow recorded an outflow of ¥7.5
billion, a decrease of ¥10.9 billion from the previous fiscal year.

17.5
15.0

2014

In fiscal 2022, capital expenditures increased by ¥10.3 billion from theprevious fiscal year to ¥33.6 billion, and depreciation and amortization was¥20.1 billion as a result of investments such as in production facilities for
packaging films and mold releasing films for MLCC.

(¥ bn)

144.8

-24.6
-31.7

-40.0

0
(FY)

In fiscal 2022, sales of raw materials and reagents for PCR testing expandedin the life science business, and sales prices increased in the film and otherbusinesses in response to rising raw material prices. Net sales resulted in an
11.4% increase compared to the previous fiscal year to ¥375.7 billion. The
overseas sales ratio reached 34.3% from sales growth in China andSoutheast Asia, and other regions.

-7.5

-20.0

20

10

1.0

5

0

0

ROA was 5.5%, remaining largely unchanged from the previous fiscal year.
ROE was 6.8% due to an increase in profit attributable to owners of theparent. ROIC was 5.1% due to an increase in operating profit. EBITDA was¥48.5 billion due to an increase in operating profit and depreciation andamortization.

40.0
27.6

15

2.0

(FY)

84.6

40

40

30.0
20.0
10.0
0

2012

2014

2016

2018

2020

2022

(FY)

The dividend per share was ¥40, for a total return ratio of 27.6%.
Note: Toyobo conducted a 10-for-1 reverse stock split of common stock on October 1,
2017.

Note: Fiscal 2018: 10-for-1 reverse stock split of common stock.
Fiscal 2019: ¥13.8 billion in losses due to fires.
Fiscal 2021: ¥7.8 billion of impairment losses in acrylic fiber business.

095

TOYOBO REPORT 2022

TOYOBO REPORT 2022

096

Strategy and Practiceof Value Creation

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

Overview of FY2022

Sustainability Highlights
Ratio of Women Managers
ECO-PARTNER SYSTEM® Sales / Sales Ratio

GHG Emissions / Reduction Rate vs. FY2014
Scope 1

Scope 2(thousand t-CO2)

1,200

28.1

1,000
800

25.7

25.5
231
20.6

196

174

184

25.9

(%)

(¥ bn)

30.0

300.0

25.0

250.0

20.0

200.0

15.0
10.0

400
200

709

699

718

718

5.0

2019

2020

2021

2022

Aggregation scope: Consolidated

Water Intake by Region
Japan total

27.8

36.0
30.0

1.2

202.9

199.3

199.1

197.3

241.7

6.0
56.3

55.2

60.6

59.0

81.8

2018

2019

2020

2021

2022

0

0

100.0

100.0

100.0

100.0

69
80.0

50

80.0
64.4

46.3

40

20

1

27

24

19
1.0

0

40.0

30

32

1.1

2018

2019

2021

2022

R&D Expenses

2.7
2.0

2.50

2.1

2.1

1.9

10

1.4

1.2

5

0.7

12 5

12 8

14 12

19 13

25 19

2018

2019

2020

2021

2022

0

0

90.8

86.4

89.1

83.4

1.5

84.5

1.56

1.50

Aggregation scope: TOYOBO CO., LTD., TOYOBO STC CO., LTD,TOYOBO INFORMATION SYSTEM CREATE CO., LTD.

Toyobo group

3.3

3.4

3.8

3.7

4.0

Manufacturing industry average

1.31

(%)

3.1

40.0

1.48

1.20

1.20

1.02
3.0

0.9

8.0

2.0

0.6

1.0
20.0

0.69

1.0

0.3

0

0

10.4

11.0

11.7

12.7

13.8

4.0

0.59

0.71

0
2018

2019

2020

2021

2022

(FY)

0
2018

2019

2020

2021

2022

(FY)

Water is a precious resource that keeps us alive and supports our lifestyles,
and conserving water resources is an important global issue. Toyobo groupcontributes toward enhancing usable freshwater resources, both within andoutside Japan, through our seawater desalination products and businesses.
We also work to conserve water resources through the recycling of water inour own business activities, and by keeping the amount of water that we use
to a minimum. In fiscal 2022, our water intake was 85.9 million m³, with water
intake in Japan accounting for more than 90%.

As an initiative to quantitatively evaluate our environmental protection
activities, we conduct environmental accounting based on the Environmental
Accounting Guidelines 2005 issued by the Ministry of the Environment ofJapan. In fiscal 2022, capital investment for environmental protection was¥1.48 billion, and the amount spent for protection and maintenance was¥2.91 billion. This primarily includes the cost of statutory environmental
impact measurements, industrial waste disposal, various inspection, andassociated personnel costs.

Aggregation scope: Consolidated

Aggregation scope: TOYOBO CO., LTD.

TOYOBO REPORT 2022

2018

2019

2020

2021

2022

(FY)

We are strengthening our R&D activities in order to generate new value andachieve sustainable growth, and 2025 Medium-Term Management Plan
incorporates strategic investment in R&D, including intellectual property.
R&D expenses amounted to ¥13.8 billion in fiscal 2022, and the ratio of R&D
expenses to net sales was 3.7%.
Aggregation scope: Consolidated

0.70

0.74

0.42

0.31

0.5

0

1.21

1.2

12.0

1.08

(FY)

Led by the Women Empowerment Promotion Group, which was establishedin fiscal 2016, we have been promoting various initiatives from the threeperspective of recruitment, cultivation, and support for employment
continuation. As a result, there were 25 women in chief-class and higher
positions in fiscal 2022, and the women manager-class position consisted of
19 people, increasing by 4.8 times from fiscal 2016. We have set achieving
a ratio of women managers of at least 5.0% in fiscal 2026 as a KPI for thegroup, and the entire company is working together to reach this target.

2.0

60.0

2.8

2.8

2.4

Frequency Rate of Lost Workday Injuries

Ratio of R&D expenses to net sales

16.0

2.32

3.5

3.1

(FY)

In fiscal 2020, we adopted a new system, offering paid childcare leave for the
first five days. In addition, men who had previously taken little childcare leave
were encouraged to do so by their managers, and we also provided
information about childcare leave to increase utilization. As a result of these
efforts, the number of men who took childcare leave increased significantly
from fiscal 2020.
In fiscal 2022, 58 men employees, or 64%, utilized childcare leave. We
will continue our initiatives to achieve our childcare leave utilization target of
80% by fiscal 2026.

(¥ bn)

2.34

20.0

0
2020

R&D Expenses

2.91

25
20

1

4.2

3.8
3.7

15

Environmental Protection Costs
Maintenance costs

(%)

30

60.0

Aggregation scope: TOYOBO CO., LTD.

2.5

Ratio of women managers (chief-class and higher)

(%)

100.0

58

Aggregation scope: TOYOBO CO., LTD., TOYOBO STC CO., LTD,TOYOBO INFORMATION SYSTEM CREATE CO., LTD.

3.0

1.1

100.0

80

(FY)

We have operated the ECO-PARTNER SYSTEMⓇ since fiscal 1999 as a
unified brand of products and technologies that contribute to reducing
environmental impact. To achieve certification under the ECO-PARTNER
SYSTEMⓇ brand, assessments are made for every stage of a product, fromraw materials through to disposal, and the product is evaluated in terms of
its contribution to reducing environmental impact from five perspectives
including resource conservation. Sales in fiscal 2022 totaled ¥81.8 billion,
and the ratio to net sales was 33.8%. We are working to create
eco-conscious products with targets of reaching a ratio to net sales of 40%
by fiscal 2031 and 60% by fiscal 2051.

1.4

80.0

100

18.0
12.0

Investments

1.4

Utilization for men

60(¥ bn)

1.3

No. of women managers (manager-class)

Utilization for women

24.0

50.0

Overseas total(million m3)

097

27.7

29.9

100.0

(FY)

Toyobo group has set the goal of achieving carbon neutrality or net zero
GHG emissions by fiscal 2051. In addition, in May 2022, we raised the fiscal
2031 target to “46% or more reduction in GHG emissions compared tofiscal 2014.” In fiscal 2022, GHG emissions remained at the same level as
the previous fiscal year by promoting energy-saving activities and production
efficiency improvement measures, despite an 11.4% increase in net sales.

100.0

150.0

0

0
2018

(%)

33.8
30.4

No. of men

Ratio of women managers (manager-class)

182

600

733

No. of women

Total sales of Toyobo
ECO-PARTNER SYSTEMⓇ sales
ECO-PARTNER SYSTEMⓇ sales ratio

Reduction rate vs. FY2014

No. of women managers (chief-class and higher)

Childcare Leave Utilization

2017

2018

2019

2020

2021

(Year)

Toyobo group is striving to achieve zero accidents in accordance with the
Toyobo Group Basic Policy on Health & Safety. In 2021, the frequency rateof lost workday injuries was 0.42, inclusive of affiliated businesses at thesame business site.
* Frequency rate of lost workday injuries refers to the rate of accidents resulting in lost
workday injuries per one million hours worked.
Aggregation scope: TOYOBO CO., LTD. and domestic consolidated subsidiaries

TOYOBO REPORT 2022

098

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Overview of FY2022

Overview by Solution
Films and Functional Materials Solution
Overview of fiscal 2022
In fiscal 2022, Toyobo’s Films and Functional Materials
Solutions Division had net sales of ¥170.3 billion, andoperating profit of ¥19.9 billion.
In the film business, the packaging film field had achallenging year, due to the impact of rising raw materials
prices. Within the industrial film field, COSMOSHINE
SRF®, a polarizer protective film for LCDs, achieved asales revenue increase of approximately 20% as a result of
a new production line commencing operation, while moldreleasing films for MLCC posted sales revenue increase of
approximately 15% for the same reason.
In the functional materials business, our VYLON®
industrial adhesive product saw strong sales for electronic
applications.
Forecast for fiscal 2023
It is anticipated that persistently high raw materials prices
will have a negative impact on performance in fiscal 2023.
On the other hand, we will be adding a new production
line for manufacturing mold releasing films for MLCC in
response to growing demand in the telecommunications

Lifestyle and Environment Solutions
equipment market. We will also be expanding productionof COSMOSHINE SRF®, a polarizer protective film for
LCDs, through the installation of a new production line,
supported by steady demand for use in the manufacturingof large-screen TV sets.
Based on the above, we anticipate net sales of ¥188
billion and operating profit of ¥19 billion in fiscal 2023.

Operating profit (¥ bn)

Net sales (¥ bn)

Operating profit margin (%)

25.0

250.0
200.0
150.0 127.1

152.8

170.3

188.0

20.0

19.0 20.0

15.0 14.6
10.0 11.5

100.0

15.0
13.1

11.7

10.1

5.0

50.0
0

25.0
20.0 19.9

2020 2021 2022

2023 (FCST)

0

10.0
5.0

2020

2021

2022

(FY)

0.0
2023 (FCST)(FY)

Mobility Solution
Overview of fiscal 2022
In fiscal 2022, Toyobo’s Mobility Solutions Division had net
sales of ¥44.7 billion and operating loss of ¥1.8 billion.
The engineering plastics business posted strong
sales overseas, and was able to adjust prices overseas inresponse to rising raw materials prices. Within Japan,
however, price adjustments failed to keep pace with rising
raw materials prices.
The airbag fabrics business saw an increase in sales
due to the recovery in automotive sector production
volumes. However, inability to adjust prices sufficiently inresponse to rising raw materials prices caused difficulties.
Forecast for fiscal 2023
In the engineering plastics business, raw materials prices
are expected to remain high, but we will continue to adjust
our sale prices.
We are also proceeding with price adjustments in theairbag fabrics business, and we are striving to improve therevenue structure of this business. Our new yarn plant inThailand was scheduled to begin operation in 2022,

Overview of fiscal 2022
In fiscal 2022, Toyobo’s Lifestyle and Environment
Solutions Division had net sales of ¥114.3 billion andoperating profit of ¥3.5 billion.
In the environmental solutions business, there was afall in orders for VOC treatment equipment, which is used torecover solvents, resulting from the slowdown in businessactivity overseas in the previous year.
With regard to the nonwoven fabrics business, salesof spunbond nonwoven filament fiber were negatively
affected by the reduction in production volume in theautomotive sector and by rising raw materials prices.
In the functional fiber materials business, demand for
IZANAS® and ZYLON® super-fibers recovered, leading toincreased sales of these products.
As regards the textiles business, while there wasstrong demand for traditional Arabic fabric, demand for
products oriented towards sports applications anduniforms was depressed.
Forecast for fiscal 2023
In the environmental solution business, we will be

responding to the increased demand for VOC treatment
equipment that is related to the growth in the number oflithium-ion battery production facilities being established in
response to the global trend toward electric vehicle adoption.
We will be enhancing the efficiency of our textiles
business through the integration of resources madepossible by the restructuring of group companies.
Based on the above, we anticipate sales of ¥125
billion and operating profit of ¥3 billion in fiscal 2023.

Operating profit (¥ bn)

Net sales (¥ bn)

Operating profit margin (%)

150.0

10.0

128.4
109.1 114.3

120.0

125.0

TOYOBO REPORT 2022

8.0

90.0

6.0

8.0
5.9

6.0
4.4

60.0

4.0

30.0
0

4.6

4.0

2.0
2020

2021

2022

2023 (FCST)

0

2020

2021

3.5
3.0

2022

(FY)

3.0

4.0

2.4 2.0
0.02023 (FCST)(FY)Life Science Solution
aiming to start full-scale commercial production in 2023,
and we are in the process of obtaining certification from
customers.
Based on the above, we anticipate net sales of ¥55
billion and operating loss of ¥1.6 billion in fiscal 2023.

Net sales (¥ bn)

Operating profit (¥ bn)

100.0

6.0

80.0

4.0
55.0

60.0
40.0

43.9

36.6

2.0

44.7
0

20.0

–2.0

0

–4.0

2020 2021

2022

2023 (FCST)
(FY)

–0.7

2020

–1.6
2021

–1.8
2022

–1.6
2023 (FCST)(FY)Overview of fiscal 2022
In fiscal 2022, Toyobo’s Life Science Solutions Division
had net sales of ¥35 billion and operating profit of ¥8.7 billion.
In the biotechnology business, there was an increase insales of raw materials and reagents for use in PCR testing,and of genetic screening devices and diagnostic drugs.
The contract manufacturing business ofpharmaceuticals was relatively subdued due to reduced
capacity utilization relating to the response to FDA
requirements.
In the medical products business, sales of artificial
kidney hollow fiber membranes and of virus-removing
membranes were robust.
Forecast for fiscal 2023
In the biotechnology business, demand for PCR testing is
expected to fall as the COVID-19 pandemic eases.
The main focus in the contract manufacturingbusiness of pharmaceuticals will be on responding to FDA
requirements, aiming to get the business back on anormal footing as soon as possible.

In the medical materials business, we will continue toexpand sales of artificial kidney hollow fiber membranes
and of virus-removing membranes. We are working
actively to develop sales of Nerbridge® nerve regeneration
conduit in the U.S. market, and striving to grow sales ofBonarc® bone regeneration inducing materials in theJapanese market.
Based on the above, we anticipate sales of ¥31
billion and operating profit of ¥5.5 billion in fiscal 2023.
Operating profit (¥ bn)

Net sales (¥ bn)

Operating profit margin (%)

50.0

10.0

40.0

35.0

30.0 25.5

27.1

20.0

40.0

6.0
4.0

3.8

2.0 14.9

10.0
0

2020

2021

2022

50.0

8.7

8.0
31.0

2023 (FCST)
(FY)

099

10.0

0

2020

5.5 30.0

4.5

20.0

24.7
17.7

16.7

2021

2022

10.0

0.0
2023 (FCST)(FY)TOYOBO REPORT 2022

100

Vision

1. The company applied Partial Amendments to
Accounting Standard for Tax Effect Accounting in thefiscal year ended March 31, 2019.
2. By resolution of the 159th Annual General Meeting of
Shareholders held on June 28, 2017, the company
carried out a 10:1 consolidation of shares, effective
October 1, 2017. On the same date, the company
changed the number of shares constituting a trading
unit from 1,000 shares to 100 shares.

Overview of FY2022

Key Financial Data (FY2012–FY2022)

3. ROE: Profit attributable to owners of parent / Average
shareholders' equity at beginning/end of fiscal period
4. ROA: Operating profit / Total assets
5. ROIC: NOPAT / Average invested capital at
beginning/end of fiscal period Invested capital: Net assets+ Interest-bearing debt
6. Base year is fiscal 2011 (fiscal year ended March 31, 2011).
7. EBITDA: Operating profit + Depreciation andamortization (including goodwill)

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

8. From the fiscal year ended March 31, 2015, the AP (acrylate
fiber) business was moved from Films and Functional Polymers
to Industrial Materials. From the fiscal year ended March 31,
2017, the AC (activated carbon fiber) business was moved
from Industrial Materials to Healthcare, and the AP business
was moved from Industrial Materials to Textiles and Trading.
9. Starting from fiscal 2021, the company revised its businesssegments. The figures for fiscal 2020 have been reclassified forthe purpose of comparison.

FY2022

Fiscal year

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Items of consolidated statements of income (¥ mn)
Net sales
Operating profit
Ordinary profit
Extraordinary income
Extraordinary losses

349,505
18,305
15,730364
5,231

339,009
17,081
15,5222,673
5,420

351,577
21,006
18,426595
5,151

351,279
20,580
16,257
1,160
5,101

347,763
23,123
20,393702
4,871

329,487
23,332
20,650469
7,179

331,148
23,923
20,415
11,492
13,683

336,698
21,727
17,7881,519
19,204

339,607
22,794
18,035
11,206
9,525

337,406
26,657
20,706629
15,753375,720
28,43023,092
6,529
14,825

4,587

7,639

8,154

8,117

10,1509,444

13,044(603)

13,774

4,202

12,865

11,097
Comprehensive income
9,065
Items of consolidated balance sheets (¥ mn)1
Current assets
184,739
177,735
Non-current assets
262,707
260,105
Current liabilities
164,831
162,850
Non-current liabilities
127,093
127,267
Net assets
155,522
147,724
Shareholders’equity
138,024
130,572
Total assets
447,445437,841
Interest-bearing debt
159,430
154,888
Cash flow (¥ mn)
Cash flows from operating activities
30,354
14,192
Cash flows from investing activities(11,294)(15,061)
Cash flows from financing activities(2,636)(11,531)
Free cash flow
19,060(869)
Cash and cash equivalents at end of period
26,467
9,481
Capital expenditure, depreciation and amortization, R&D expenses (¥ mn)
Capital expenditure
18,041
16,517
Depreciation and amortization
13,246
19,473R&D expenses
9,966
10,819Per share information (¥)2
Net assets per share
155.35147.26
Earnings per share (EPS)
8.61
5.17
Dividends per share
3.50
3.50
Financial indicators
Overseas sales ratio (%)
23.4
21.8
Operating profit margin(%)
5.0
5.2
Return on equity3(%)
5.7
3.6
Return on assets4(%)
3.8
4.2
Return on invested capital5(%)
3.4
3.8
Price earnings ratio(%)
18.58
22.81
Dividend on equity(%)
2.3
2.4
Total shareholder return6(%)
139.2
101.3
Equity ratio(%)
30.8
29.8
EBITDA7 (¥ mn)
30,32837,778D/E ratio
1.16
1.19
Results by business segment (¥ mn)8, 9
Net sales
Films and Functional Polymers
137,394
138,437
Industrial Materials
71,891
71,221
Healthcare
24,83926,580
Textiles and Trading
79,211
87,999Real Estate and Other Business
25,67325,267
Operating profit
Films and Functional Polymers
7,634
8,574
Industrial Materials
5,453
5,342
Healthcare
4,170
4,133
Textiles and Trading
213
1,058
Real Estate and Other Business
2,740
2,478
Adjustment(3,128)(3,280)12,98818,182

2,147

13,51915,611

(467)

4,437

9,471

12,112

184,630
271,625
160,582
150,558
145,115
142,310456,256
170,721

196,607269,202146,250
158,472
161,087
157,988465,809
177,085

186,633
257,954
130,690
153,795
160,101
156,915444,587
165,358

196,293
254,497
136,865
143,016
170,910
167,773
450,790
169,230

186,571258,924
125,110
135,870
184,515
180,561445,495
145,594

193,125
267,922
131,768
148,053
181,226
176,585
461,047
164,769

206,416
282,458
122,321
183,916
182,636
177,890
488,874
175,139

212,963
278,225
131,444
171,109
188,635
185,729
491,188
186,958

239,314
278,460
146,750
173,876
197,149
194,876
517,774
191,249

23,927(22,218)(10,839)
1,709
19,177

20,107(20,089)797
17
20,38932,337(10,636)(21,384)
21,701
20,101

26,872(14,132)(324)
12,74032,17922,353(1,174)(27,831)
21,17825,857

7,838(24,286)
12,608(16,448)
22,16744,255(39,216)(1,805)
5,040
25,08435,028(31,678)
5,340
3,350
34,526

17,097(24,608)(1,729)(7,511)
26,43320,074
14,038
10,474

17,491
14,916
10,81917,336
14,434
11,266

18,36014,93911,114

21,25915,666
10,40225,512
15,823
11,02236,44517,005
11,69023,25319,095
12,656

33,64020,08013,792160.289.18
3.50

177.959.14
3.50

176.75
11.43
3.50

188.9810.64
3.50

2,034.04
146.9340.00

1,989.29(6.80)
40.00

2,003.01
155.1240.00

2,090.47
47.30
40.00

2,192.17
144.75
40.00

26.6
6.0
5.8
4.6
4.3
17.65
2.2
143.8
31.2
35,044
1.20

28.5
5.9
5.4
4.4
4.2
17.72
2.1
146.7
33.9
35,496
1.12

29.5
6.6
6.4
5.2
4.8
14.78
2.0
155.4
35.3
37,557
1.05

29.2
7.1
5.8
5.2
4.8
18.14
1.9
178.3
37.2
38,272
1.01

29.0
7.2
7.5
5.4
4.9
14.29
2.0
195.8
40.5
39,589
0.81

30.5
6.5
(0.3)
4.7
4.4
—
2.0
142.1
38.3
37,550
0.93

32.3
6.7
7.8
4.7
4.5
7.37
2.0
122.8
36.4
39,799
0.98

33.0
7.9
2.3
5.4
5.0
30.11
2.0
149.5
37.8
45,752
1.01

34.3
7.6
6.8
5.5
5.1
7.55
1.9
125.3
37.6
48,5090.98

148,000
71,70427,34479,08925,440
7,794
5,501
5,140
2,952
2,732
(3,113)146,029
71,52028,77785,093
19,860
6,988
6,601
5,042
2,334
2,630
(3,016)

143,398
70,522
27,72385,486
20,634
9,920
6,288
4,726
2,500
2,841
(3,152)

138,574
59,92536,42377,552
17,013
12,747
3,875
5,242
1,066
3,344
(2,941)

148,667
63,45435,72368,317
14,987
13,713
4,262
5,179
645
2,820
(2,694)

156,241
66,54034,67564,585
14,657
13,727
2,620
5,170
914
2,233
(2,936)

127,127
43,905
128,40925,538
14,62914,582
(701)
5,936
3,798
2,623
(3,444)

152,842
36,573
109,148
27,087
11,75720,028(1,572)
4,376
4,517
2,302
(2,993)

170,326
44,721
114,295
35,003
11,37519,897(1,753)
3,453
8,655
2,218
(4,041)

Profit (loss) attributable toowners of parent

101

Strategy and Practiceof Value Creation

TOYOBO REPORT 2022

Films and Functional Materials
Mobility
Lifestyle and Environment
Life Science
Real Estate and Other Business
Films and Functional Materials
Mobility
Lifestyle and Environment
Life Science
Real Estate and Other Business
Adjustment

TOYOBO REPORT 2022

102

VisionStrategy and Practiceof Value Creation

The Basis of
Value Creation

Overview of
FY2022

Reference
Material

Reference Material

Investor Information (As of March 31, 2022)
Stock Listings

3101

Transfer Agent

Sumitomo Mitsui Trust Bank, Ltd.
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
100-8233, Japan

Independent Auditors

Composition of Shareholders

The Prime market of the Tokyo Stock
Exchange

Stock Code(Based on number of shares held)
Other domestic
companies

Securities
companies

4.11%

2.31%

KPMG AZSA LLC
3-6-5, Kawara-machi, Chuo-ku, Osaka
541-0048, Japan

Common Stock

Authorized: 200,000,000 shares
Issued: 89,048,792 shares

Paid-in Capital¥51,730 million

Number of Shareholders

63,059General Shareholders’Meeting

Held in June every year

Number of Shares
Constituting One Unit

100

Corporate Data (As of March 31, 2022)

Main Business Sites
in JapanForeigncompanies
and others

20.06%

Osaka Umeda Twin Towers South,
1-13-1 Umeda, Kita-ku, Osaka 530-0001, Japan
Telephone: +81-6-6348-3111
May 3, 1882
Established
Number of Employees 10,503 (Consolidated) / 3,831 (Nonconsolidated)
Head Office

Number of
Shareholders

Financial
institutions

63,05940.71%

Individuals
and others

Main Business Sites
Outside Japan

32.81%■ Major Shareholders• Tokyo Branch• Nagoya Branch• Tsuruga Research and Production Center• Iwakuni Production Center• Toyama Production Center• Research Center• Utsunomiya Plant• Takasago Plant• Inuyama Plant• TOYOBO (SHANGHAI) CO., LTD. (China）• TOYOBO (THAILAND) CO., LTD.
• TOYOBO INDUSTRIAL MATERIAL(THAILAND) LTD.
• PT. TOYOBO TRIAS ECOSYAR (Indonesia)• TOYOBO TEXTILE (MALAYSIA) SDN. BHD.
• ARABIAN JAPANESE MEMBRANE
COMPANY, LLC (Saudi Arabia)

Number of shares
held (thousands)

Percentage ofvoting rights (%)

The Master Trust Bank of Japan, Ltd.

15,613

17.56

Custody Bank of Japan, Ltd.

7,401

8.33

■ External Recognition (ESG related)

National Mutual Insurance Federation of Agricultural Cooperatives

3,558

4.00

Inclusion in ESG indexes

Toyobo Employees Stockholders’ Association

2,049

2.31

Toyukai

1,861

2.09

NIPPON LIFE INSURANCE COMPANY

1,750

1.97

DFA INTL SMALL CAP VALUE PORTFOLIO

1,436

1.62

Meiji Yasuda Life Insurance Company

1,402

1.58

JP MORGAN CHASE BANK 385781

1,203

1.35

STATE STREET LONDON CARE OF STATE STREET BANK AND TRUST,BOSTON SSBTC A/C UK LONDON BRANCH CLIENTS- UNITED KINGDOM

1,115

1.26

Name of shareholder

Takasago Plant
Iwakuni
Production Center

Toyama Production Center
Utsunomiya Plant

Inuyama Plant

Tokyo Branch

Nagoya Branch
Research Center
Head Office• TOYOBO U.S.A., INC.
• TOYOBO DO BRASIL PARTICIPACOES
LTDA.
• TOYOBO CHEMICALS EUROPE GMBH
(Germany)• SPINREACT, S.A.U. (Spain)

Toyobo was selected for inclusion as a component stock in the FTSE Blossom Japan Index, an international ESG investment stock index, inJune 2021, as a component stock in the MSCI Japan ESG Select Leaders Index in December 2021, and as a component stock in the FTSE
Blossom Japan Sector Relative Index in March 2022.
Toyobo has also been selected for inclusion as a component stock in the MSCI Japan Empowering Women Index (WIN).

THE INCLUSION OF TOYOBO CO., LTD. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO
NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF TOYOBO CO., LTD. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE
THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Note: The percentage of voting rights is calculated based on the number of shares remaining after deducting treasury stock (which totaled 152,550 shares)■ Stock Prices

Other Recognition
Toyobo’s initiatives have received the following external recognition:

Highest / lowest stock prices for the past five years

FY

Tsuruga Research andProduction Center

2018

2019

2020

2022

2021

Highest (¥)

2,249(218)

2,164

1,684

1,687

1,505

Lowest (¥)

1,900(184)

1,386

903

1,033

1,046

1. Stock price quotations are from the Tokyo Stock Exchange (First Section).
2. The highest and lowest stock prices shown for fiscal 2018 are figures following the share consolidation. Figures in parentheses show pre-share consolidation amounts.

103

TOYOBO REPORT 2022

TOYOBO REPORT 2022

104

Strategy and Practiceof Value Creation

VisionThe Basis of
Value Creation

Overview of
FY2022

Reference
Material

Reference Material

Company History
We have developed our business while responding to the needs and issues of
the times through technology

Core technologies
Polymerization,
modification

Ever since its founding, Toyobo group has attached great importance to technology development. Toyobo’s technology
achievements can be grouped into three core technology areas.
By making effective use of these technologies, we have been able to create products and services that meet the
expectations of the market and of society.

Molding,
processing

Biotechnology■ Relationship between Technology and Products
Key technologies

Evaluation technology

Key products and solutions

Markets

Establishment of Osaka Boseki in 1882, and Mie Boseki in 1886, adopting production equipment and technology from the U.K.
Natural fiber spinning and weaving
technology•Expansion into the rayon
business in the 1920s

Composite fiber apparel products•Launched acrylic fiber business in 1956
•Followed by launch of polypropylene, polyester and nylon businesses

Recycled fiber
manufacturing technology

2

Synthetic fiber
manufacturing technology
Polymerization,
modification

Physical andstructural analysis

Synthetic organic chemistry
technology
Copolyester technology
Polyolefin modification technology

Chemical analysis

6 Developed TOYOBO GS Catalyst ® aluminum catalyst in 2002

Computational
mechanics

3 Launched
K-FILTER® VOC
recoveryequipment in 1975

•Start of super fiber business (IZANAS® and ZYLON®) in the 1990s

Synthetic fibers

Computational
science

Devicedevelopment

5 Start of production of artificial kidney hollow fiber membranes in 1981

1

Mobility
Films

Molecular arrangement control
technology
Functional film technology
Compound technology
Separation technology•Birth of Toyobo’s film business and plastic business in the 1970s
4 Development of seawater desalination elements in 1979
•Started research on the treatmentof pulp effluent using cultured
yeast as an environmental
pollution control measure in 1948

Highly functional resins

Engineering plastics

Began development of VYLON® resin for adhesives and coating agents in the 1960s

Molding,
processing

Films and Functional
Materials

Lifestyle andEnvironment

Separation membrane
Filter adsorbent

7 Start of supply film for use in displays in 2013

Yeast cultivation
technology

Comfort evaluation
Biotechnology

Enzymes and diagnostic reagents

Cultural technology
Genetic engineering

Life Science

Contract manufacturing business ofpharmaceuticals•Launch of uric acid kit (diagnostic reagent for clinical test) in 1972

Medical equipment

8 Launch of COVID-19 kit in vitro diagnostics in 2020

1

1948

2

Preserving the water environment

Achievement of liquid waste
treatment by breaking down andeliminating sugars using yeast
Biotechnology

105

TOYOBO REPORT 2022

1956

3

1975 onwards

Providing comfortable clothing

Achieving clean and healthy air

Development into a manufacturer ofhighly functional textiles, from cotton
and wool to synthetic fibers

Providing equipment that realizes
efficient VOC recovery, and which
can facilitate reuse

Molding, processing

Molding, processing

4

1979 onwards

Realizing effective use of seawater

Supplying membranes used inseawater desalination equipment
Molding,
processing
成形・
加工

5

1981 onwards

6

2002 onwards

Enhancing dialysis patients’quality of life

Working on resource recycling

Providing membranes withoutstanding filtering performance for
artificial kidneys

Providing eco-conscious aluminumcatalysts that do not containheavy metals

Molding, processing

Polymerization, modification72013 onwards

Improving the digital environment

Providing films for monitor
screens that excel in water
resistance and durability
Molding,
processing
成形・
加工

8

2020 onwards

Working to make diagnosis ofinfectious diseases more convenient

Providing COVID-19 kit in vitro
diagnostics

Biotechnology

TOYOBO REPORT 2022

106