Corporate governanceManagementfoundation

Sustainability of a Board of Directors appropriate for resolution of management issues
Based on an effective governance structure that supports improving corporate value over the medium- to long-term,in order for the Board of Directors to fulfill its roles and responsibilities, Tokyo Electron (TEL) is committed to both
assembling talented people with a good balance of knowledge, experience, and skills and ensuring diversity, as well asworking to nurture the next generation of management personnel. In addition, by operating a Board of Directors capableof properly overseeing and evaluating (monitoring) the strategic decision making of the management team responsible
for business execution, TEL is putting effort into maintaining the sustainability of a Board of Directors appropriate forresolving management issues.
Diagram of the corporate governance framework, internal control system, and risk management framework*
CSS: Corporate Senior
Staff

Shareholders' Meeting
Appointment or
dismissal

Appointment or
dismissal

Board of Directors

Audit

Appointment or
dismissal

Audit &
Supervisory Board

Nomination Committee / Compensation Committee

Audit

Independent Auditors
Cooperate

Cooperate
Cooperate

In recent years, the role played by companies has become more important for establishing a sustainable society. Furthermore, in
the area of investment, ESG investment, which emphasizes corporate environmental, social, and governance initiatives, is becoming
mainstream. In these circumstances, companies are required to steadily develop highly effective governance, to build a solidmanagement foundation that forms the basis of business activities, to contribute to solving environmental and social issues, andto creating new value. Tokyo Electron (TEL) is working to further improve its governance system, including a review of the Boardof Directors, and to ensure compliance throughout the Group, recognizing that corporate governance is essential to sustainablegrowth. In regards to the environment, the company is conscious of exacerbation of climate change and abnormal weather, andhas established a new medium- to long-term environmental vision, and is proactively working to reduce the environmental impact
of business activities. In addition, the company is promoting activities in compliance with global standards to achieve sustainable
operations not only within the company, but throughout the supply chain. TEL endeavors to build a strong and sound managementfoundation and aims to further enhance its corporate value.
Medium-term goals (5)Business execution

CSS* & Executive
Officers

Representative
Directors

Audit

Internal Control Executive Officer

Internal Audit Dept.

Risk Management Executive Officer(Global Audit Center)

Compliance Executive Officer

Various committees●

Ethics Committee●

Information Security Committee●

Export Trade Control Committee

Audit

Departments responsible● Risk Management (General Affairs Dept.)●

Build a management foundation for increasing value

Compliance (Compliance Dept.)

Business Execution Organization (All Division / All TEL Group companies)

Priority themes, Main activities

SDGs initiatives■Steadily developing highly effective governance and establishinga solid management base in order to contribute to thedevelopment of society in order to improve corporate value

Governance andcompliance

Human Environmental
rightsmanagement

Supply chain
management■Corporate governanceSupervision and evaluation of strategic decision-making, profit
sharing policy, design and results of director compensation
system, process of effectiveness evaluation of Board of
Directors, management issues■Promoting compliance as an important business strategy, anddeveloping operations in consideration of the environmentand human rights, in order to contribute to the creation of asustainable, fair, and equal society■Risk management ■Compliance ■Respect for human rights■Supply chain management Procurement initiatives■Environmental management
Global warming prevention/energy-saving initiatives, renewableenergy initiatives, water consumption reduction initiatives,
waste reduction initiatives, chemical substance management,
promotion of green procurement■TEL FOR GOOD Social contribution activities

39

TOKYO ELECTRON SUSTAINABILITY REPORT 2019

Decent work andeconomic growth

ClimateactionPeace, justice andstrong institutions

Corporate governance framework
TEL adopts the Audit & Supervisory Board System, consisting of a Board of Directors and an Audit & Supervisory Board.
Currently, among the 16 members who attend the Board of Directors meeting, which includes Audit & Supervisory Board
members, there are six outside directors and statutory auditors, including three independent outside directors, and threeoutside Audit & Supervisory Board members. Independent outside directors and outside Audit & Supervisory Board members
express frank opinions from an independent standpoint so that discussions by directors coming from within the company
do not tend toward homogeneity. This guides discussion within the Board of Directors in an appropriate direction so thatthe company can be competitive and succeed globally. TEL believes the lively exchange of opinions arising from proactive
comments by independent outside directors and Audit & Supervisory Board members is the foundation supporting optimal
decisions at TEL’s Board of Directors meetings. The Board of Directors works to achieve sustainable growth and to increase
corporate value over the medium- to long-term based on its fiduciary responsibility to shareholders. Furthermore, it strives toachieve an appropriate sense of productive tension and constructive debate through the presence of executive directors, whopossess diverse experience, knowledge, and achievements, and outside directors, who maintain objectivity.
The Audit & Supervisory Board provides a structure that enables its board members to obtain sufficient informationnecessary for audits by collecting information through on-site surveys conducted by full-time Audit & Supervisory Board
members, and by ensuring appropriate coordination with the Internal Audit Department and Independent Auditors.
Established to ensure fair, effective, and transparent management, the Nomination Committee and the Compensation
Committee support growth-oriented governance for TEL by making proposals to the Board of Directors regarding theelection of candidates for the management team and regarding compensation.

TOKYO ELECTRON SUSTAINABILITY REPORT 201940

Management foundation

Skills and diversity of the president and management teamIn the selection of executive directors, the Nomination Committee emphasizes people with outstanding execution
capabilities backed by experience, knowledge, and achievements as a manager. They must also possess high sensitivity
to all risks and the ability to accurately analyze and judge them. Furthermore, they are required to be able to directly
express their honest opinions in meetings. At the same time, in order to ensure constructive discussion incorporating
diverse backgrounds and expertise, personnel with an in-depth knowledge of all departments are proposed to the Boardof Directors as director candidates, taking into consideration the balance between Sales and Service, Manufacturing, R&D,
and Corporate Administration.
In addition, based on the TEL Succession Plan, we endeavor to nurture successor candidates, in particular from among
executive officers, who will be responsible for the next generation of executive management. Furthermore, through theexecution of daily duties, the CEO and Representative Director assesses successor candidates from various perspectives,
including capability, character, quality, and discernment, and provides constant support for them by arranging
opportunities such as job rotation and training.

Skills and diversity of outside directors
With regards to independent outside directors or outside Audit & Supervisory Board members, they are required toexpress frank opinions from an independent standpoint whereby they can guide discussion within the Board of Directors
in an appropriate direction so that the company can be competitive and succeed globally. In making these selections, TEL
aims to assemble talented people with a balance of knowledge of global business, broad insight into related industries, anextensive network of personal contacts, objectivity from the social, capital market, and other perspectives, knowledge offinance and accounting, broad legal knowledge. In addition to requirements under the Company Act, TEL has establishedseparately specified Independence Requirements to avoid conflicts of interest with general shareholders, and to ensure
the independence of outside directors and outside Audit & Supervisory Board members.

Planning and outcomes of the director compensation system
Compensation Committee
In order to secure transparency and fairness in management and appropriateness of compensation, the company has
established the Compensation Committee, which is composed of three or more directors (excluding representative
directors), including an independent outside director. The Compensation Committee obtains advice from external
experts, and analyzes and compares compensation levels and other details with high-tech companies inside and outside
Japan. Based on this analysis, it makes proposals to the Board of Directors regarding the compensation policy for directors
and executive officers, the most appropriate, globally competitive compensation system for the TEL Group, as well as
individual compensation amounts for the Representative Directors.
Annual performance-linked compensation
In regards to Corporate Director compensation, TEL uses a profit-sharing style method of calculating compensation that
determines the level of annual performance-linked compensation linked to the actual net income attributable to ownersof the parent company. In addition, from fiscal year 2019, TEL has decided to have the Compensation Committee assess
the individual performance of Representative Directors and to reflect this in the individual annual performance-linked
compensation amount.
Medium-term performance-linked compensation
TEL has introduced a medium-term performance-linked compensation system in order to link Corporate Director
compensation amounts to medium-term corporate value improvements. The payout rate varies between 0% and150% according to performance goal achievement levels for the three-year period covered, relative to a base amountcalculated based on the position and responsibilities of each Corporate Director. The consolidated operating margin andconsolidated ROE are used as performance indicators.

Supervision and evaluation of strategic decision-making
The TEL Board of Directors convenes approximately nine times per year by ensuring sufficient time for debate. The
Board of Directors meeting annual schedule is set in an effort to provide sufficient time for debate and to increase theattendance by all directors, including outside directors. In addition, prior explanations are provided to outside directors
and outside Audit & Supervisory Board members in a timely manner from the administrative office. TEL strives to provide
sufficient information to and dialog among independent outside directors and Audit & Supervisory Board members,
and, for example, in regards to matters of particular importance, TEL establishes a venue for dialog with TEL executive
management in advance.

Policies for allocation of earnings
TEL’s basic approach is for appropriate allocation of company earnings to all stakeholders.
TEL’s basic policy of allocation to shareholders is to link dividend payments to business performance on an ongoingbasis for a payout ratio of around 50% based on net income attributable to owners of the parent company.
TEL effectively uses internal capital reserves to raise corporate value through earnings growth by concentrating
investment in high-growth areas and provide returns directly to shareholders by linking dividend payments to businessperformance and earnings. Furthermore, the company flexibly implements share buybacks as part of shareholder returns.

Dividend payout ratio: 50%

Process for evaluating the effectiveness of the Board of Directors and management issues
TEL discusses and evaluates the effectiveness of the Board of Directors every year in accordance with the TEL
Corporate Governance Guidelines. In fiscal year 2019, TEL again conducted a questionnaire of all directors and Audit &Supervisory Board members regarding the effectiveness of the Board of Directors, the Nomination Committee, and theCompensation Committee. In addition to the results of this questionnaire, exchange of opinion and deliberation was
held, mainly among outside directors and outside Audit & Supervisory Board members, which was shared with the whole
Board of Directors in order to evaluate the effectiveness of the Board of Directors. For this questionnaire, in its effort
to obtain highly objective supervisory insight and evaluation, the company seeks perspective and input from external
consultants, and analyzes the results. Issues which became apparent as a result of analysis and evaluation are debatedin depth by the Board of Directors, and efforts are taken to make improvements as appropriate. Based upon this, TEL
believes that the Board of Directors, including the Nomination Committee and Compensation Committee, is functioning
effectively and fulfilling its role as stipulated in the TEL Corporate Governance Guidelines “Establishing management
strategy and vision,” “Making major operational decisions based on strategic direction,” and “Engaging in constructive,
open-minded debate.”
Management issues identified through the process of evaluating effectiveness are discussed at Board of Directors
meetings by Corporate Directors and Audit & Supervisory Board members with a diversity of opinions and experience.
Aside from Board of Directors meetings, separate off-site meetings are also held as an opportunity for focused discussion
away from individual matters for resolution.

Annual DPS of not less than 150 yen
Review dividend policy if the company does
not generate net income for two consecutive
fiscal years.

Off-site meetings are held at outside facilities.

41

TOKYO ELECTRON SUSTAINABILITY REPORT 2019TOKYO ELECTRON SUSTAINABILITY REPORT 201942

Management foundation

Risk management

ComplianceApproach to risk management

Approach to compliance

Reflecting changes in society and the business environment, the risks facing businesses are growing increasingly complex
and diverse. Tokyo Electron (TEL) considers understanding and appropriately addressing the risks that it may face in its
businesses, as well as their impacts, to be a crucial factor to sustainable corporate growth.

Stakeholder trust is essential to business activities. In order to maintain this trust, it is essential to ensure compliance andenhance corporate ethics continuously. The Fundamental Policies concerning Internal Controls within the Tokyo Electron(TEL) Group and TEL’s Code of Ethics (Code of Ethics) stipulate that all TEL Group executives and employees must comply
with laws and regulations and act with high ethical standards and a strong awareness of compliance.

Risk management system
In order to promote more effective risk management, TEL carries out enterprise risk management through a bodyestablished within the General Affairs Department at its headquarters. This body supervises risk management, analyzing
a wide range of risks arising in business activities (such as compliance risk, human resource and labor risk, and business
continuity risks) to identify key risks. It then monitors the management of these risks by the respective departments
responsible and supports their risk management activities. The status of these activities is regularly reported to the Boardof Directors and the Audit & Supervisory Board.

Auditing by the internal audit department
The Global Audit Center serves as the internal audit department for the entire Group and implements audits based on theaudit plan. Based on the results of these audits, the Center then gives instructions for making improvements as needed,follows up on progress toward these improvements and provides support. The Group’s internal control over financial
reporting in fiscal year 2019 was evaluated as effective by the independent auditors.

Risk management initiatives
Each year, we set priority management targets and strive to steadily reduce risk. In fiscal year 2019, we reinforced
measures in the following areas.
Compliance
We appointed people responsible for compliance at key overseas bases and established a system whereby they report the
progress of compliance-related activities to the Group headquarters each month. In addition, compliance risk audits are
conducted through systematic visits to overseas subsidiaries.
Business Continuity Plans (BCPs)
TEL is improving its plans based on lessons from past disasters and is surveying the earthquake risks at its overseas
locations. We are also working, on an ongoing basis, to establish alternate production structures within our network andto develop multiple sources of important parts.
Mental health, long work hours, and harassment
TEL carries out mental health-related measures based on employee stress checks and multiple seminars aimed at helping
managers look after their employees. In addition, we have introduced a mechanism to monitor excessive work hours that lead tohealth risks. TEL also holds harassment prevention seminars led by lawyers.
Management of confidential information
The Human Resources Department and the Intellectual Property Department cooperate to strengthen measures toprevent leaks of confidential information, particularly targeting employees who leave the company to ensure the proper
return and destruction of confidential information.

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TOKYO ELECTRON SUSTAINABILITY REPORT 2019

Compliance systems and initiatives
Compliance system
TEL has built a structure to implement its compliance program globally. Under the head of the Legal, Compliance Division,
compliance representatives have been newly appointed at major overseas bases to create a system for direct reporting
through the chain of command to the Legal, Compliance Division. The company has restructured its compliance system.
Specifically, compliance-related issues are immediately reported by the head of the Legal, Compliance Division to theCEO, Board of Directors, and the Audit & Supervisory Board so that they can be addressed quickly and effectively.
Corporate ethics
TEL has established the Code of Ethics as a standard of conduct by which employees and executives should abide.
To ensure awareness of this code, we distribute it in the form of booklets in Japanese and four other languages to all
employees. TEL revises its Code of Ethics as needed, in response to changes to external and internal conditions. In
addition, an Ethics Committee has been established to support and supervise the activities of Group companies inJapan and overseas aimed at more effectively promoting and raising awareness of compliance and corporate ethics.
Furthermore, directors, officers, and senior executives sign an oath to uphold the Code of Ethics and comply withcorruption-related laws every year.
Compliance regulations
Based on its Code of Ethics, each Group company in Japan and abroad has established its own compliance regulations
to ensure that every individual taking part in the business activities of the Group clearly understands the pertinent laws,
regulations and internal company rules, and consistently apply these in all of their activities.
Compliance education
TEL conducts online education and face-to-face training on topics including
corporate ethics and the basics of compliance, export compliance, insider
trading prevention, the Act for Subcontracting, and the prevention ofharassment. Depending on the topic, this education is implemented for specificlevels or across the board. We also implement ongoing testing to check thedegree of understanding among employees. From fiscal year 2020, we will
deploy a more comprehensive, systematic education program, advancing
multilingual support in an effort to foster compliance awareness and reinforce
behavior-oriented awareness-building activities among all Group employees.

Percentage of employees who havereceived web-based training

99.2%

Internal reporting system
As a means for employees to provide information outside the chain of command about behavior that may be in violationof laws or corporate ethics, we have established a hotline (organized around the tenets of confidentiality, anonymity, andprohibition of retribution) to receive internal reports. In addition, we established an external contact point for employees
and another contact point specifically for suppliers and third parties. Each overseas location has its own internal reporting
hotline, and we are building a unified internal reporting system for all overseas bases.
As a result of these initiatives, in fiscal year 2019, there were no reports or cases of noncompliance with laws,
regulations, or the Code of Ethics that could have had a material impact on the TEL Group’s business or local
communities.

TOKYO ELECTRON SUSTAINABILITY REPORT 201944

Management foundation

Respect for human rights

Supply chain management

Approach to human rights

Supply chain principles and system

Conscious of its corporate social responsibility, Tokyo Electron (TEL) recognizes that it is important to conduct itself witha strong sense of integrity. Based on this recognition, TEL has firmly upheld human rights since its founding as reflectedin the spirit of its Corporate Philosophy and Management Policies. For TEL, respecting human rights means a significant
undertaking, not only to fulfill its responsibility for eliminating adverse impacts on people caused through businessactivities, but to respect those people who support the company’s business activities, and contribute to the realization ofa sustainable dream-inspiring society. TEL incorporates the concept of respect into every aspect of its business activities,
and strives to nurture a dynamic corporate culture where each person can realize his or her full potential.
Commitment
In fiscal year 2018, TEL published its Human Rights Policy, summarizing the company’s approach to human rights inbusiness. TEL has specified the human rights it believes are particularly important in business activities as Freedom;
Equality & Non-Discrimination; Freely Chosen Employment; Product Safety & Workplace Health and Safety; Freedomof Association; and Appropriate Working Hours & Breaks/Holidays/Vacations. In preparing the Human Rights Policy, thecompany referred to the United Nations’ Guiding Principles on Business and Human Rights in addition to the International
Bill of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work which are referred to therein.
Additionally, in order to understand the demands of the times and human rights issues in the industry, the company also
refers to the Ten Principles of the UN Global Compact and the Responsible Business Alliance (RBA)* Code of Conduct.
Awareness and education
TEL is implementing on-site efforts to communicate principles relating tohuman rights not only within the company, but also with its suppliers. In fiscal
year 2019, TEL also implemented a human rights e-learning program targeting
all TEL executives and employees.

Participation inhuman rights training

100%

Impact assessment and remediation (Human rights due diligence)
TEL is currently identifying and evaluating risks and impacts relating to human rights and, based on the results,
is promoting corrective action aimed at eliminating those risks. Within the company, it utilizes self-assessment
questionnaire (SAQ) based on the RBA Code of Conduct and, for suppliers conducts a CSR survey in order to evaluate
human rights risks throughout the value chain. It analyzes and evaluates the results of these surveys conducted once per
year, and implements corrective action as required. By continuing the impact assessment and remediation process in the
future, the company will eliminate medium- to long-term human rights risks, leading to the creation of opportunities.
Grievance mechanism
TEL has constructed a framework for impact assessment and remediation, and is striving to establish an effective
business-level grievance mechanism. To date, the company has established hotlines in Japan and overseas for employees
and suppliers, and it continues to develop initiatives for grievance mechanism in-house and in the supply chain.

Awareness and education

Commitment

Promote respect for
Impact assessment and remediation

Grievance mechanism

45

TOKYO ELECTRON SUSTAINABILITY REPORT 2019

human rights initiatives*
Responsible Business
Alliance (RBA): The
RBA establishes a setof standards for supply
chains in the electronics
industry for a safe labor
environment, to ensurethat workers are treatedwith respect and dignity,
and that companies
take responsibility forenvironmental impact
in the manufacturing
process.

Procurement principles and system
The high-value manufacturing that Tokyo Electron (TEL) strives for is based on the functions of all materials andcomponents that make up the products and the pursuit of high quality. TEL values communications with suppliers andseek to grow manufacturing on a global scale with its suppliers based on ongoing trusting relationships.
TEL engages in procurement activities in line with a procurement policy which the company formulated based on thelaws, regulations, and social norms of each country as well as the RBA Code of Conduct, and which it has disseminatedinternally and to its suppliers. Under the leadership of the TEL Representative Director, President & CEO as the top of
the procurement system, issues identified during procurement activities are shared with the manufacturing company
presidents’ council and the purchasing department manager council for consideration of specific improvements.

Procurement initiatives
CSR procurement
With an aim of keeping track of its suppliers’ engagement in CSR activities, TEL has conducted a CSR Survey since fiscal year 2014.
The survey is in accordance with the RBA Code of Conduct. TEL analyzes the responses and provides feedback to suppliers inan effort to build on improvements. In fiscal year 2019, the company made extensive revisions to the survey content based on
auditing standards stipulated by the RBA and implemented the survey targeting materials suppliers,1 from which the company
procures parts and raw materials for products.
According to the survey results, no suppliers were engaged in any of the practices given particular emphasis in the RBA codeof conduct, namely child labor, forced labor, bonded labor, inhumane treatment, false reports, falsification of records, or bribery.
Neither were any suppliers of a sufficient size2 to be considered high risk in terms of compliance.
Furthermore, from fiscal year 2019, the company has begun surveying staffing and logistics suppliers, focusing on major
logistics/customs clearance operators.

1
Suppliers accounting for
more than 80% of TEL’s
procurement spend
2
500 employees or more

Supply chain CSR process
STEP 1

STEP 2

STEP 3

Appeal for CSR activities
to suppliers

Supply chain
CSR assessment

Provision of feedback
based on the results, andrequest for improvements

Responsible procurement of minerals (conflict minerals)
TEL regards taking action against conflict minerals (3TG)3 obtained through illegal exploitation, including sources
with human rights violations or poor working conditions, an important part of corporate social responsibility. The
company’s resolute goal is to eliminate the use of raw materials made from these conflict minerals as well as any parts orcomponents containing them.
In fiscal year 2019, TEL conducted its fifth annual survey on countries of origin and smelters of potential conflictminerals, using the reporting template (CMRT)4 developed by the RMI.5 As a result, TEL identified 253 RMAP6 conformant
smelters, providing the company confidence that 3TG sourced from these smelters were conflict-free. None of thematerials procured were found to contain conflict-affected 3TG.
Procurement BCP
As part of its Business continuity plans (BCP), TEL collaborates with suppliers for disaster preparation. The company
maintains a database of suppliers’ production sites so that if a crisis arises, it can promptly identify impacted suppliers
and quickly collaborate in recovery efforts. During fiscal year 2019, about 18,000 supplier sites were registered, andpost‑disaster impact surveys were conducted seven times.
In addition, for key suppliers accounting for more than 80% of the TEL’s procurement spend, it conducts a BCP survey,
analyzes their responses, and gives the results to suppliers as feedback to promote further improvement. In the fiscal year
2019 survey, improvements in overall rating level were observed at 19% of suppliers and improvements in the overall raw
score were seen at 42%.

3
3TG: Tantalum, tin,tungsten, and gold
4
CMRT: Conflict Minerals
Reporting Template
5
RMI (Remote Method
Invocation): An
organization that
inspects 3TG smelters tocertify they do not haveconflict minerals
6
RMAP (Responsible
Minerals Assurance
Process): A program
promoted and led by the
RMI for auditing smelters/
refiners that do not use
conflict minerals

TOKYO ELECTRON SUSTAINABILITY REPORT 201946

Management foundation

Environmental management
Environmental management system

Initiatives to reduce water consumption

To continuously improve its environmental activities, Tokyo Electron (TEL) has operated an environmental management
system based on ISO 14001 since 1997, primarily at its manufacturing subsidiaries. In March 2017, TEL acquired multisite ISO 14001 certification for its factories and offices in Japan that had previously acquired certification separately.
Coinciding with the multi-site certification, the company has developed a standardized Group format for environmental
impact assessments, the identification of useful environmental aspects, environmental management programs, andinternal audit checklists. During fiscal year 2019, TEL established approximately 100 environmental goals for different
levels across the entire company and carried out these improvement activities. Progress of activities and compliancewith laws and regulations are confirmed through internal audits and third-party audits. The issues identified throughthese activities are reviewed by the EHS Council, reported to the Manufacturing Company Presidents’ Council, and used inpromoting environmental activities across the entire TEL Group. Under such a management system, fiscal year 2019 wasagain free from environmental incidents, accidents, violations, and associated legal proceedings.

With the growing importance of water resource preservation in global environmental initiatives, TEL Group has
established a goal of keeping water consumption at the same level or below that of the baseline year (fiscal year 2012
for factories and offices in Japan and a fiscal year of their choosing for each overseas operation). TEL’s ongoing efforts
to achieve these goals include reusing pure water from its manufacturing operations, installing water-saving devices,
watering lawns with rainwater, and implementing the intermittent operation of cafeteria faucets.
During fiscal year 2019, an increase in its volume of production and an increase in water consumption associated withproduct development and evaluation resulted in water consumption of 1,240,000 m3, up 8% year-over-year. Moreover,
TEL achieves 12 of the 14 goals at its sites worldwide. It also discharged an estimated 905,000 m3 of wastewater.
■Example initiative
In construction of the new development building completed at Tokyo Electron Miyagi in October 2018 (Development
Building No. 2), facilities were installed to reuse water which is conventionally disposed of as sewage after processing to
remove harmful substances. These water reuse facilities are also able to reuse wastewater from the existing developmentbuilding. As a result, they expect to reuse approximately 15,000 m3 of water annually.

ISO 14001 certified factories and offices
Company nameFactory/Office nameTokyo Electron

EHS Promotion Center (Fuchu Technology Center)

Tokyo Electron Technology Solutions

Yamanashi Office (Fujii/Hosaka) Tohoku Office

Tokyo Electron Kyushu

Koshi/Ozu Office

Tokyo Electron Miyagi

Taiwa Office

Certification date

Initiatives to reduce waste

May 1998

Tokyo Electron (Kunshan)—

March 2013

TEL FSI—

March 2013

Tokyo Electron Korea

Balan Factory

July 2014

TEL Epion—

May 2018

99.2%

Initiatives to prevent global warming and save energy
Each TEL plant and office has an established goal of reducing energy consumption by at least 1% year-over-year.
Initiatives to achieve this goal include energy-saving cleanroom operation, appropriate temperature settings for officecooling and heating, the introduction of highly energy-efficient equipment, and the adoption of renewable energies.
As a result of these initiatives, in fiscal year 2019, TEL reduced energy consumption per unit sales at its plants and offices by 5%
year-over-year. However, an increase in its volume of production and an increase in energy consumption associated with productdevelopment and evaluation resulted in power consumption of 306 GWh in fiscal year 2019, up 8% year-over-year; and energyderived CO2 emissions* of 159 kilotons, up 5% year-over-year. Based on the correlation between business operations and energyuse, TEL changed to an appropriate metric at plants and offices in Japan, and standardized it across the company. Specifically,
the company adopted a metric calculated using a complex weighting of data from each area on the number of evaluation units
used in development, the number of units produced, total floor area and staff-hours. Of all 11 of its plants and offices, both thoseoverseas plus those in Japan that had set goals based on this method, goals were achieved at five of them.
■Example initiative 1
When Tokyo Electron Kyushu produces pure water, it was heating the water first, using a gas boiler, because the watertemperature was too low. Then, after the pure water had been used, it was disposed of while the temperature wasstill high. Using heat exchange between the two types of water enabled the elimination of the addition of heat before
preparation of pure water, whereby it was possible to reduce the volume of boiler gas use by 70% or more.
■Example initiative 2Tokyo Electron Miyagi is reusing waste oil from the staff cafeteria to produce biofuel, equivalent to approximately 500
kg/month in terms of CO2. In the future, they plan to use the biofuel produced in company cars.
Renewable energy initiatives
TEL promotes the use of renewable energies. At the Tokyo Electron Miyagi (Taiwa) and Tokyo Electron Technology
Solutions (Yamanashi), renewable energy generated from solar panels is used to power the factories, and monitors
displaying their energy profile have been set up at the entrances to the factories. At its Tokyo Electron Kyushu (Koshi),
generated energy is sold, helping to prevent global warming. In fiscal year 2019, TEL generated a total of 4,392 MWhof renewable energy in Japan. In addition, Tokyo Electron U.S. Holdings has continued to purchase green power, 3,834
MWh in fiscal year 2019.

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TOKYO ELECTRON SUSTAINABILITY REPORT 2019

In an effort to curb the amount of waste generated and to recycle it wherever
possible, TEL Group promotes initiatives for reducing waste. In addition
to participating in the electronic manifest system1 to ensure proper waste
management, TEL is also engaged in maintaining an appropriate amountof parts inventory and in reusing cushioning material. The company is also
Recycling rateachieving lower waste processing costs, by promoting waste sorting activities
and by modifying and increasing the capacity of space used for storing
waste so as to reduce the frequency that it is collected. In fiscal year 2019,the company conducted checks of waste disposal operators in Japan using aunified on-site checklist and shared the results. In fiscal year 2019, TEL generated 116 tons of incinerated and landfill waste
in Japan. As a result of its waste-reduction initiatives, the recycling rate2 at sites in Japan in fiscal year 2019 was 99.2%,
achieving its goal of maintaining a recycling rate of 97% or higher for the 13th consecutive year since fiscal year 2007. The
company has also maintained a high level of recycling at its overseas factories and offices of 90.0%.
■Example initiative 1
Tokyo Electron Taiwan revised its method of disposing sludge, which had been processed as landfill, to recycle it asmaterial for cement, thereby increasing the base’s recycling rate to 99%. Furthermore, the revision allowed them tosignificantly reduce the processing cost.
■Example initiative 2
As one aspect of reducing waste, the company is also proactively working to reduce the amount of copier paper used.
Some factories and offices are switching from using paper to tablets for viewing and checking procedures and plans
used at manufacturing sites. As a result of this initiative, the company not only reduced the amount of paper used, it also
expects to reduce the environmental burden and cost of toner, shredder, and paper disposal.

*
In calculating CO2
emissions, the emission
factor for TEL’s
electricity consumption
in Japan in fiscal year
2019 was substituted
by adjusted emission
factors for the electrical
power providers
concerned. The emission
factor for TEL’s overseas
electricity consumption
was substituted byestimated factors
calculated by theFederation of ElectricPower Companies
of Japan-based onvalues published by theInternational Energy
Agency (IEA)

1Electronic manifest
system: A system forelectronically tracking
the flow of industrial
waste instead of using
paper-based manifests(i.e. paper forms for
tracking industrial
waste). The system
uses a communications
network of dataprocessing centers,
businesses thatgenerate waste, andwaste collection/
disposal companies.
2
Recycling rate:(Recycled amount/
Amount of waste
generated) x 100

Management of chemical substances
TEL uses chemical substances in its product development and manufacturing phases. The use and release of chemical substances
subject to the Japanese PRTR3 law are constantly monitored and managed. Whenever TEL introduces a new chemical substanceor change the way an existing substance is used, the company checks for environmental, health, and safety risks beforehand.
It disposes of substances properly after use, either through expert waste disposal contractors or by using in-house processing
equipment. In response to the Act on Rational Use and Proper Management of Fluorocarbons, TEL conducts simple, regularinspections based on the law in an effort to monitor the amount of fluorocarbons used and recovered. During fiscal year 2019, no
TEL factories or offices exceeded the level of fluorocarbon leakage that requires reporting.

3
PRTR (Pollutant Release
and Transfer Register):A framework for
tracking, tabulating, anddisclosing quantitative
data on chemical
substances that may
be hazardous tohuman health and theecosystem, including
the amounts used anddischarged into theenvironment and theamounts transferred(as part of waste) off
the original business’s
premises

TOKYO ELECTRON SUSTAINABILITY REPORT 201948

Social contribution activities
Initiatives around the world

Approach to social contribution
The social contribution activities of Tokyo Electron (TEL) aim to contribute to the development of local communities and the resolution ofsocial issues through various initiatives while deepening relationships of trust with all stakeholders. With Innovation and Technology, Education,

Japan

Science Intercollegiate

U.S.

SEMI High Tech U

Environment, and Community Involvement as its four focus areas, TEL conducts activities according to the United Nations SDGs.
Science Intercollegiate is an eventfor university and technical college
students to present findings of theirown research. TEL has been a featured
sponsor since the first competition. In
providing an opportunity to present
their research, the event aims tomotivate students to undertake
research and to foster richly creative
scientists and engineers. The 8th
Science Intercollegiate was held at Rikkyo University on March 2–3, 2019, bringing
the total number of students presenting their research to more than 1,850 since theevent’s inception.

4 focus areas and relevant SDGs

EuropeInnovation andTechnology

Education

Environment

Community
involvement

Tokyo Electron Europe has participatedin corporate partnership activities
with educational institutions forfive consecutive years since 2015.
Through to April 2019, TEL has provided
opportunities for 360 teenagers toparticipate in the program, learning
about science and the semiconductor
industry while having fun. It was acomprehensive program, where TEL’s periodic table was distributed to participants,
and finally, a graduation ceremony was held.

Japan

TEL FOR GOOD is the new brand name that represents TEL’s social contribution activities.
From fiscal year 2019, we are using it as a collective term for social contribution events andvarious programs, donations and volunteer activities sponsored by our company aroundthe world.

Special Topics

Support for areas affected by torrential rain in western Japan in July 2018 and the Hokkaido Eastern Iburi
Earthquake
The number of victims resulting from torrential rain that
occurred in western Japan in July 2018 was the largest
recorded of all torrential rain disasters for the Heisei era(1989-2019).
In addition, the Hokkaido Eastern Iburi Earthquakethat occurred in September of the same year, caused alarge amount of damage, and much time is being spent
in recovery efforts.
TEL sincerely hopes that the areas affected can realize
a quick recovery, and made relief donations to this end.

49

TOKYO ELECTRON SUSTAINABILITY REPORT 2019

Corporate partnership activities with educational
institutions

Afforestation activities for groundwater recharge

Approximately 80% of Kumamoto
Prefecture’s water supply resources areunderground. For Kumamoto City inparticular, because 100% of the waterworks
are supplied by groundwater, preservationof groundwater is an important activity
for securing future water resources. Since
2006, Tokyo Electron Kyushu has beenworking on broadleaf afforestation suited
to groundwater recharge in Nishihara
Village, in the outer rim of southern Mount Aso. Up to March 2019, 2,800 employees andfamily members have planted a total of 4.2 ha with 13,800 trees.

Japan

Earthquake memorial event

Since 2013, Miyagi Prefecture andKahoku Shimpo Publishing Co. have held
the 3.11 Earthquake Memorial Event toencourage the prefecture’s citizens tomove on with positivity without letting
the memory of the 2011 Great East
Japan Earthquake fade. Endorsing theobjective of the event, Tokyo Electron
Miyagi has been sponsoring it since 2016.
The event featured a cheering performance by the Miyagi Recovery Cheering Squad incollaboration with local children, and a concert by a local singer.

As an official Certified Partner of SEMIHigh Tech U, Tokyo Electron America(TEA) participates by dispatching
instructors to this three-day programthat teaches STEM* skills to high school
students who seek to pursue high-tech
careers. TEA believes that linking STEM
to real-world applications at SEMI HighTech U makes learning more enjoyable for students and contributes to their growth.
* STEM: General name for the educational category of Science, Technology, Engineering, andMathematics

China

TEL Fudan ScholarshipTokyo Electron established the TEL
Fudan Scholarship Program at the
School of Microelectronics at Fudan
University in order to nurture humanresources and to raise technicalstandards within China. In 2018, the first
award ceremony was held at the school.
Six students were presented withscholarships and honorary certificates,and shared their research and accomplishments. Tokyo Electron Shanghai has further
expanded research projects with Fudan University, and building on their friendly
relations, is working to nurture even more talented graduates.

TaiwanBeach cleanup for preserving a beautiful coastline

In June 2017, Tokyo Electron Taiwan
held a charity event to coincide with its
beach cleanup in Hsinchu City, pledging
to make a donation proportionate to
the number of participants and thevolume of waste collected. On the dayof the event, many ordinary residents
who happened to be at the beach joinedwith the more than 150 employees
and volunteers, collecting over 300 kg of waste. This resulted in a donation of TWD
450,000, which was given to the National Nantou Special School.

Japan

Food Bank Yamanashi, an authorized non-profit
organization

Since 2015, as part of its “Community
Involvement” activities, Tokyo Electron
Technology Solutions Yamanashi
Regional Office has been participating in
the activities of Food Bank Yamanashi,
an authorized non-profit organizationthat delivers food items to families withchildren in need of assistance. During
summer and winter school holidays,
the office donates food items fromthe employees, with a matching gift of an equivalent amount of money from thecompany. This endeavor is ongoing.

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