Enabling
the Future

Integrated Report 2022
Year Ended March 31, 2022

1-3-26 Koyama, Shinagawa-ku, Tokyo 142-0062, Japan
Tel: +81-3-5788-8512
https://www.nipponsanso-hd.co.jp/en/

Released on September 28, 2022
Revised on September 28, 2022

OUR ROAD MAP

Group Philosophy

Proactive. Innovative. Collaborative.
Making life better through gas technology.
The Gas Professionals

OUR
ROAD MAP

Group Vision
We aim to create social value through innovative gas solutions that
increase industrial productivity, enhance human well-being, and contributeto a more sustainable future.

2050

Realizing carbon neutrality
with gas technology• Further promoting energy savings• Increasing efficient use of energy• Promotion of the use ofrenewable energy and green power• Carbon capture and offsets

Nippon Sanso Holdings Corporation has formulated a new medium-term management plan,
NS Vision 2026, covering the period from FYE2023 to FYE2026. The Company has set bothfinancial and non-financial key performance indicators (KPIs), and has also announced thedetails of its activities for achieving them. Naturally, these are by no means final goals.
With this, the first year of NS Vision 2026, our journey toward realizing our Group Vision
to “enhance human well-being and contribute to a more sustainable future” has begun.

2026

Medium-term management plan NS Vision 2026, ending in FYE2026
Financial KPIs (FYE2026)

Non-Financial KPIs

Revenue¥975 billion–¥1,000 billion*
Core Operating Profit¥125 billion–¥135 billion*

Environment
Reduction rate of GHG emissions (Base year: FYE2019)18% (FYE2026) 32% (FYE2031)
GHG reduced emissions through environmental product offer

Our External Environment(Environment and Society)
The main features of our external environment are of climate impact,economic uncertainty, geopolitical instability, development of a digital

2022

EBITDA Margin

Lower customer GHG emissions through environmental product offerings
and applications > NSHD group GHG emissions (FYE2026)

Group:≥ 24%

Safety Management

Japan, the United States, Europe,
Asia and Oceania, Thermos:≥ 17%–33%

Human Resources

Lost time injury rate

Rate of female employees≤ 1.6 (FYE2026)≥ 22% (FYE2026)
25% (FYE2031)

society, and diversification of thinking and lifestyles. We are under

Adjusted Net D/E Ratio

pressure to respond to these changes.

≤ 0.7 times

Rate of receiving compliance training

ROCE after Tax

100% (FYE2026)

Compliance≥ 6%* Due to uncertainty in the global economy, revenue
and core operating profit are shown in a range.

NIPPON SANSO HOLDINGS CORPORATION

1INTEGRATED REPORT 2022

Rate of female management posts≥ 18% (FYE2026)
22% (FYE2031)

OUR ROAD MAP

WE ARE NSHD!
The Nippon Sanso Holdings Group has more than 19,000 employees working in
32 countries and regions worldwide. We are working together in a united effort
to realize the Group Vision and medium-term management plan slogan,“Enabling the Future.”

NIPPON SANSO HOLDINGS CORPORATION2INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

3INTEGRATED REPORT 2022

SECTION 0

SECTION 3

SECTION 4

SECTION 5

OUR ROAD MAP

OUR STRATEGYOUR SUSTAINABILITYOUR MANAGEMENT

Medium-Term Management Plan NS Vision 2026

1 OUR ROAD MAP

POINT 0158 Dialogue: Ideal Sustainability for the NSHD Group86

Corporate Governance

32 Materiality

62 Sustainability Initiatives under the Medium-Term

88

Corporate Governance Structure

92

GCCO Message

66 Reporting Based on the Recommendations of the TCFD

94

RCCOs Message

68 Sustainability Topics

96

Risk Management

74 The Nippon Sanso Holdings Groupʼs Human Resource Strategy

98

Global Information Security Council (GISC)

75 Message from Head of the HR Division

99

Messages from Outside Directors

76 Hot Topics in Human Resources

104

Members of the Board of Directors,(1) Total Electronics

Nippon Sanso Holdings has formulated a new medium-term
management plan, NS Vision 2026, covering the period fromFYE2023 to FYE2026. We have more than 19,000 employees working
in 32 countries and regions worldwide in a united effort to realize themedium-term management plan slogan, “Enabling the Future,”
and the Group Vision beyond that.

36 Creating Growth Opportunities to Increase Earning Capability(2) Increasing Productivity

38 Creating Growth Opportunities to Increase Earning Capability(3) Realization of a Carbon-Neutral Society

40 At a Glance

SECTION 1

Corporate Governance

30 Medium-Term Management Plan NS Vision 2026
34 Creating Growth Opportunities to Increase Earning Capability

P.1 OUR ROAD MAP

The Nippon Sanso Holdings Groupʼs Sustainability Initiatives

Management Plan

78 Roundtable Discussion:

Audit & Supervisory Board Members, and Executive Officers

42 Industrial Gases Business

What Opportunities Do NSHD Group Employees Have in

43 Electronics Business

Order to Realize Their Personal Goals through Business?

110

Skills Matrix of Corporate Officers

44 Strategy by Segment: Gas Business in JapanOUR COMMITMENT

46 Strategy by Segment: Gas Business in the United States

The Nippon Sanso Holdings Groupʼs Resolve

48 Strategy by Segment: Gas Business in Europe

8 CEO Message

50 Strategy by Segment: Gas Business in Asia and Oceania

14 CFO Message

52 Strategy by Segment: Thermos Business
54 Thermos Business

POINT 02

SECTION 2

P.30 Medium-Term Management Plan
NS Vision 2026

OUR VALUE CREATIONINFORMATIONPOINT 03P.62 Sustainability Initiatives under
the Medium-Term Management Plan
Nippon Sanso Holdings will promote sustainability management
through the new medium-term management plan, NS Vision 2026,
and has started programs for various sustainability initiatives based on
its new materiality. The NSHD Group will continue striving for sustainable growth and further increases in its corporate value with the aimof realizing a comfortable future for people, society, and the earth.

Under the four geographic hubs and Thermos business structure, weestablished five focused fields: Sustainability management, exploringnew business toward carbon neutrality, total electronics, operational
excellence, and digital transformation (DX) initiatives. We will
strengthen the Group’s comprehensive capabilities and achieve
further growth to provide a bright and comfortable future for people,
society, and the earth.

The Nippon Sanso Holdings Groupʼs Value Creation

20 Our Value Creation Story
22 Expand Four Geographic Hubs and Thermos–
Nippon Sanso Holdings Group

24 Continuing Our Sustainable Growth–

approach to value creation. In editing the report,
we have referred to the IFRS Foundation'sIntegrated Reporting Framework, and the
Guidance for Integrated Corporate Disclosure andCompany–Investor Dialogue for Collaborative
Value Creation, published by the Ministry of
Economy, Trade and Industry (METI).
REPORTING BOUNDARY In the 2022 report, we havefocused on communicating the business activities
and initiatives in each specific region of operations.
To describe the activities of the individual companies
or groups, we have applied the following expression
standard. Furthermore, the terms “Nippon Sanso
Holdings Group” or “the Group” may be used forconvenience to refer to Nippon Sanso Holdings and
its Group companies. These terms may also be usedin cases where there is no beneficial purpose in
identifying a specific company.

NIPPON SANSO HOLDINGS CORPORATION

EXPRESSION STANDARD• Formal names (e.g., Nippon Sanso Holdings
Corporation): Used primarily in the formal
titles of corporate officers, executive officers,
and employees• T runcated formal names (e.g., Nippon Sanso
Holdings): In principle, used as the basic way of
expressing company names•A cronyms (e.g., NSHD): Used as a simple expression to allow the reader to identify a particularcompany in the context (e.g., in dialogue)• Generic expressions (e.g., the Company, the Group):
Capitalized to describe Nippon Sanso Holdingsor the Nippon Sanso Holdings Group, and usedwith lower case (e.g., the company, the group)
when describing segment operating companies

Non-Financial Highlights

116

Sustainability Data

130

Policies

132

Corporate Data

134

Awards135

Editorial Note

Important

Disclosure System

We strive to guarantee
management transparency and believe in theimportance of building
relationships of trust withstakeholders through dialogue. Accordingly, in thisreport we place a priority
on ensuring that stakeholders understand ouroverall value creation process.
Since FYE2017, we have published an annual
integrated report. The purpose of this report isto provide financial information, including that
related to corporate strategies and operating conditions, and non-financial information, such asthat related to environmental protection andsocial contribution initiatives and to corporate
governance. Information has been selected withconsideration to relevance to give shareholders,investors, and other stakeholders an accurate
overall understanding of the Nippon Sanso
Holdings Group, its operating activities, and its

11-Year Financial and Non-Financial Summary

114

Contents

Our Characteristics and Strengths

26 Value Creation Story

Editorial Policy

112

This report contains important basic informationthat Nippon Sanso Holdings Corporation particularly wishes to communicate to stakeholders. In
the 2022 version of the integrated report, wehave provided more important sustainability
information and non-financial information(quantitative data), while our sustainability
website covers sustainability approaches andmore detailed measures implemented by the
Nippon Sanso Holdings Group. For the latest
financial information, please refer to the investor
relations (IR) information page on our corporatewebsite as before.

Financial and important non-financial information

Integrated Report 2022
Basic information on the Company’s
overall operating activities

Financial Information
Website (IR information)
Details financial and share andshareholder information
for investors
https://www.nipponsanso-hd.co.jp/en/ir/

INTEGRATED REPORT 2022

Sustainability Website
The NSHD Group’s sustainability
website provides information regarding
the Group’s sustainability approaches
and measures, as well as more detailed
information about sustainability initiatives.
https://www.nipponsanso-hd.co.jp/en/
sustainability/

Data in this report is for FYE2022,
ended March 31, 2022, although some FYE2023
activities and future issues and targets are also featured.
PERIOD COVERED

Wide-ranging
4

Non-Financial Information

NIPPON SANSO HOLDINGS CORPORATION

5INTEGRATED REPORT 2022

OUR COMMITMENT

We have utilized the business network wehave built so far with a correct understanding of the respective strengths ofeach region to establish a system for sharing and developing best practices. We willhone our competitive advantages andenhance the Group’s demonstrated value
by pursing operational excellence in ouroperating companies in each region of theworld. Moreover, we are determined tocontribute to the realization of a sustainable society through the technologies wehave developed to date and further technology innovation going forward.

OUR
COMMITMENTSECTION 1

The Nippon Sanso Holdings Group’s Resolve

NIPPON SANSO HOLDINGS CORPORATION

6INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

7INTEGRATED REPORT 2022

OUR COMMITMENT

CEO Message

FYE2022—
A Year of Facing Challenges
Amid a COVID-19 pandemic that has no end in sightand rising geopolitical tension and division, these are
increasingly troubled times. In this situation, I would
like to extend my thanks to all of the stakeholders who
have supported us. With your help, the NSHD Group
achieved extremely good results in FYE2022. This was
mainly attributable to a strong recovery in demand,
despite COVID-19; a revision of our sales prices in lightof high energy costs, which have a significant impact
on the production of industrial gases; and our continued efforts to reduce costs and expenses. In Europe
and the United States in particular, where we are
extremely sensitive to changes in our earnings figuresamid unprecedented high electricity and logistics costs,
rather than absorbing these in daily operations, we had
a strong incentive to negotiate with our customers, andI believe it was this that ultimately led to our strong
results. The business environment and trading practices
differ from region to region, so simple comparisons are
not really appropriate, but it certainly set an example forour operations in Japan and Asia and Oceania.
Although the economy made a strong recovery lastyear, it is no easy task to restore global supply chainsonce they have been broken by impacts such as COVID19. Across the entire Group, we will thoroughly minimize
the risk from impacts from the external environment
while demonstrating our resilience to capture stableindustrial gases demand, which has now bottomed
out. We will work to ensure that we generate earnings
by providing added value to our customers, which will
drive further increases in corporate value.

NS Vision 2026—
Our First Medium-Term
Management Plan under the Holding
Company Structure
The Company announced its new medium-term management plan, NS Vision 2026, in May 2022. The plan
describes five focused fields: Sustainability management, exploring new business toward carbon neutrality,

NIPPON SANSO HOLDINGS CORPORATION

total electronics, operational excellence, and digitaltransformation (DX) initiatives. Among these, I think“operational excellence” in particular has been facilitated by our transition to a holding company structure,
because it allows for the sharing of best practices
between regions. This is perhaps the most significant
aspect of the transition.
Under the holding company structure, the Grouphas four geographic hubs—Japan, the United States,
Europe, and Asia and Oceania—along with the
Thermos business. I consider this to be the optimal
structure for the Group’s businesses. Each of theseregions and businesses have their respective strengths.
For example, Europe excels in the area of corporate
governance, while the United States has taken rigorous
action to expand its business and increase profits.
Australia and Asia are areas with enormous growthpotential for industrial gases, and we are expecting
increasing business opportunities in this region. In
Japan, we have developed R&D, safety technologies,
and plant engineering capabilities that we can now
deploy in more areas globally. Furthermore, as theGroup’s only B2C business, the Thermos business will
provide an example for the industrial gases business interms of its processes, awareness, and ideas on customer service and sustainability initiatives. The ability topick up on these best practices and deploy them effectively in each region and business is a characteristic
strength of the holding company structure. The mostimportant task of Nippon Sanso Holdings is to use thisto establish competitive advantages and increase thecomprehensive capabilities of the Group.
Nippon Sanso Holdings also played a central role in
the process of formulating NS Vision 2026 by conducting
proper communication with each operating company.
Moreover, the plan was also discussed thoroughly in
the Global Strategy Review Committee and the Global
Risk Management Committee, two committees that
include members from every Group company. To
address the tasks of making further increases in profitability and progress on carbon neutrality, it is importantthat we get a firm grasp of the risks and opportunities
related to our businesses and propose strategies, thencarefully analyze the risks for those strategies andstrengthen our response to them. The two committees
provide a forum for deeper discussion on these points.
They work together organically to establish businessstrategies that are effective and powerful from all perspectives. Since these strategies and risk countermeasures

8

INTEGRATED REPORT 2022

We want to develop our business,
pursue our vision for the Company,
and contribute to the world throughindustrial gases.
Toshihiko Hamada
Representative Director,
President CEONIPPON SANSO HOLDINGS CORPORATION9INTEGRATED REPORT 2022

OUR COMMITMENT

CEO Message

are shared between all operating companies, these committees also play a role in promoting operational excellence.
Finally, the policies formulated by the two committees areultimately reported to the Board of Directors, which provides
feedback on them. Looking back on the plan formulation
process, I feel confident that these committees are functioning effectively as we intended that they should before
introducing them. Going forward, we will execute the plan
while ensuring effective governance with this structure.
As I have described, NS Vision 2026 was createdthrough an extremely robust process. Through this process,we could see for example that while our profits in Asia are
currently small in scale, we have a firm grasp of the businessenvironment in these countries, which have ample roomfor growth, giving us confidence in their future potential.
On the other hand, until we discussed the setting of
numerical targets for non-financial goals, they seemed
intangible and ethereal. In our focused field of “sustainability
management,” we aim to promote understanding of theconcept that ensuring safety is vital to the survival of ourbusiness because “selling gases is commensurate withselling safety.” To this end, we had been trying to coordinate with each region, but found it particularly difficult tocreate key performance indicators (KPIs) for the entire
NSHD Group in terms of greenhouse gas (GHG) emission
reduction targets, because each country and region has
different laws and measures in place. However, Nippon
Sanso Holdings has led this initiative, making a supreme
effort to communicate with offices in each country while
ascertaining and assessing their current statuses, identifying priority tasks going forward, and setting numericaltargets. Of course, we do not consider our current nonfinancial KPIs to be in their final form. I think it is importantthat we continue to meet the changes occurring in
the world, including the United Nations Sustainable
Development Goals (SDGs), positively and flexibly andstrive constantly to improve our response to them.

short-term measures; they are extremely important measures that will have an impact on our future corporate
value. To make such improvements, we must have a clear
understanding of our current profitability upon which tobase our actions. That is why we have listed all the data,
including figures that show our weaker areas; we wereaiming to create a strong awareness of where we need tomake improvements.
A further task that we must accomplish for improving
profitability is to review our prices so that they are commensurate with our costs, the value we provide, and economic value of our goods and services. At the same time,
as a manufacturing business, the Group should ideally beworking hard to reduce its costs; and cost cutting canreally only be achieved with technological advances.
Another task we must address is developing equipment
and building systems that save energy. For example, evenif we were to increase our ratio of green electricity, if ouroverall energy consumption more than offsets the green
energy improvement, not only would our profitability
decrease but our environmental impact would also
increase. To avoid this, we are working to establish operational excellence in technology, specifically by expanding
the use of plants and gas-using equipment and systems
developed with leading Japanese technology in Europe,
the United States, and Asia. To realize operational excellence, we must also create and implement systems forutilizing human resources. Under the holding company
structure, if we can appoint people who understand bestpractices to handle a wide range of information and share
best practices in each region around the world, we will beable to achieve results more quickly.
I have a real sense that shifting to the holding company
structure has accelerated the Company’s globalization, andI believe this has also been felt by the employees. I feelthat a considerable number of employees would like towork overseas, particularly among the younger generation.
Now, as the Group is accelerating its moves to globalizeinternally, we will work quickly to prepare programs thathighlight the appeal of being posted to work in a new
country or region, and promote awareness of them among
all Group personnel.

Confirmation of Our Current Status
Results in an Increase in Profitability
In NS Vision 2026, we provided data on market ranking byregion in the industrial gases industry and a comparison of
profitability between the leading global companies. As alisted corporation, Nippon Sanso Holdings is obliged tomake investments for the future and increase its earning
capability, while also making returns to stakeholders.
In addition, our measures to improve profitability are not

NIPPON SANSO HOLDINGS CORPORATION

Direction for Total Electronics
Electronics is one of the fields with the greatest growthpotential during NS Vision 2026. As such, we have made“total electronics” one of the five focused fields in the plan.

10

INTEGRATED REPORT 2022

Our customers in the electronics field have strict expectations for their own products, and by extension for the
purity of the gases we provide. In that sense, they are
extremely conservative. I believe they want us to provide
high-quality product stably and in large quantities.
Meanwhile, while they are very interested in new technologies and processes, their first priority is to ensure reliable supplies of high-quality gases. However, if we stop
there, we will never be able to create new value. One of
our strategies for the electronics field is to firmly understand what is required of us right now, and having built
up trust with our customers based on our performancerecord, communicate with them with the aim of developing and supplying new products and solutions and expanding our business.
Furthermore, the electronics industry uses enormous
quantities of nitrogen gas to ensure safety inside plants
and to transport wafers. To meet the demand for nitrogen,
the NSHD Group produces and supplies large-capacity air
separation units (ASUs), but our development of this business overseas has been slow. By improving this situation
through active business alliances with local companies, wewill further develop our business in the electronics field.
Moreover, by promoting DX, predicated on rigorous
information security, we aim to create a system that can
automatically gather information about the amounts ofgases used by customers, their purity specifications, and soforth, then rapidly reflect this in the Group’s gas production. This is also related to the focused field of “DX initiatives” in NS Vision 2026, and I would like to see theCompany begin working on it in the second half ofthe plan period.

Realizing Carbon Neutrality by 2050
Appropriate investment decisions and their execution will
be an essential part of carrying out NS Vision 2026, andthis is one of Nippon Sanso Holdings’ most importantroles. Our traditional approach to investment was to use
the funds earned by our operating companies and allocate
them appropriately according to market conditions. We
have many years of experience in this approach, and insome ways it is simple. However, when making capital
investments to realize carbon neutrality and providing gas
on-site for customers who are promoting carbon neutrality,
we need to consider more than just the gas supply apparatus, as the issues of capturing and transporting CO2 after
the gas has been used also arise. By widening the scope of

NIPPON SANSO HOLDINGS CORPORATION11INTEGRATED REPORT 2022

OUR COMMITMENT

CEO Message

issues that the Group is engaging with in this way, we start
to see differences in investment recovery periods and evaluations compared to our previous investment approach.
I think we may encounter new kinds of investment decisions that we have not experienced before. We will have
many discussions on such issues regarding investments forenvironmental measures.
NS Vision 2026 also includes our scenario analysis basedon the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), and in doing so
we have broadly responded to the recommendations.
However, our specific actions in this area are decided
and driven by the Company itself. Looking ahead, the Group
Sustainability Management Office will lead the deeper
conversation about our response to the risks and opportunities we have identified in relation to climate change.
Another of the focused fields in NS Vision 2026 is“exploring new business toward carbon neutrality.” At thisstage, however, our exploration is just beginning. Initially,
we will treat the initiatives of our European operation as bestpractice, since they are the most advanced in this area, andthen expand them to other regions and business units.
Realizing a carbon-neutral society is no easy task, technologically or economically. As such, currently many of ourcustomers are not able to transition directly to a carbonneutral state. Helping these customers to make a start by
reducing their GHG emissions is the idea behind exploringnew business toward carbon neutrality during the periodof the medium-term management plan.
However, carbon neutrality is not something that the
NSHD Group can promote alone; we must always think
about it in terms of our engagement with customers. As
we deepen our customer relationships, we will be able tobetter understand their issues and how best to resolve
them, enabling the customer and the NSHD Group toadvance toward realizing the customers’ targets througha beneficial relationship. However, since we must basicallymake a proposal regarding the customer’s existing processes, our proposals will be custom-made systems that
rely on the Company’s technological capabilities and engineering. Producing a number of high-quality proposals as“The Gas Professionals” will enable us to sell industrial
gases and equipment to supply them, as well as new
equipment for reducing CO2 emissions. By accumulatingthese kinds of deals as quick wins, and appealing to customers based on our knowledge and performance record,
we will drive this strategy forward with accelerating speed.
The NSHD Group’s industrial gases business has always
delivered value through the process of resolving issues
identified through communication with customers.
Rather than simply selling products, we use invisible assets

NIPPON SANSO HOLDINGS CORPORATION12INTEGRATED REPORT 2022

(value) to deliver results. In this sense, exploring new business toward carbon neutrality is actually the essenceof the industrial gases business.
In the Thermos business, we will continue to flexibly
combine vacuum-insulation technology and metal processing technology with our unique lifestyle comfort concept
to create discerning products for inspired lifestyles. At thesame time, we will continue working to reduce environmental impact throughout the entire product life cycle.
Today, the world is working to achieve carbon neutrality
by 2050. It is difficult to clearly define the image of a society that has realized this in the future. However, on theroad to reaching this goal, everything that we have cometo know will change. Taking a prescriptive approach to
how things should be could stifle new ideas with thepotential for significant future developments.
What we can say, however, is that as a company wewant to be able to contribute to the world through theindustrial gases business and the Thermos business, tomake a better society in 2050 and beyond.

who has management experience in the manufacturingindustry, and Masako Miyatake, who is an expert on international law, have been appointed as outside directors,
and we expect them to contribute significant insights.
Moreover, we continue to include the presidents of ouroperating companies in the United States and Europe on
the Board of Directors in order to have a global perspective. Looking ahead, global society is expected to changeeven more rapidly and to become even more complex. To
respond to these trends and enhance our multidirectionalrisk assessment, we will promote countermeasures such as
strengthening our understanding of international law.

Our Vision for the Future
Every country has different tasks that must be done, or
should be done. The nature of the tasks may also differ
depending on the state of industrial development.
Fortunately, industrial gases are certain to be used by allindustries in every country. In other words, there are many
opportunities for the NSHD Group to contribute to industry. To meet this challenge, we will communicate carefully
with our customers, and with our stakeholders, aiming toprovide both social value and economic value to advancesociety through business. Moreover, we will make full useof best practices in our global business activities as we
continue to increase our corporate value, operating ourbusinesses with all our full capabilities. At the same time,
we will continue to pursue our ideal form as a corporation
by further enhancing our governance structure. As a result,
we will be able to increase our corporate value, which is
the greatest contribution we can make to our shareholders
and investors.
Based on this policy, the Group will continue to create
value, aiming not only to achieve its current targets but
also aiming for developmental growth by exceeding successive targets in the future.

Corporate Governance andExpectations of Outside Directors
Nippon Sanso Holdings is a listed company with a majority
owner, so protecting the interests of minority shareholders
is also an important priority. We have been particularly
conscious of this, and have now brought our corporate
governance into line with Japan’s Corporate GovernanceCode. However, even if we faithfully follow the Code to
the letter, that will not lead directly to the growth of theCompany. Without a firm commitment to corporate
governance by the company that implements it, it will
be meaningless.
If governance does not function effectively, resulting ina serious compliance incident, the impacts will go beyond
a deterioration in corporate value and share price andactually hamper future growth by impeding fund procurement and acquisition of human resources. In this way,
corporate governance is extremely important for bothfinancial and non-financial aspects. The responsibility for
setting up and implementing corporate governance lies
with Nippon Sanso Holdings, and the Board of Directors
plays an especially important role. In order to fulfill this roleand contribute to society, the Board of Directors must
actively incorporate a wide range of knowledge and information from a management perspective while also taking
into consideration society overall. Now, Katsumi Nagasawa,

NIPPON SANSO HOLDINGS CORPORATION

September 2022

13

INTEGRATED REPORT 2022

OUR COMMITMENT

CFO Message

Overview of FYE2022

Leveraging our strong
cash generation to reduce
debt and invest in the future
while also returning profits
to shareholders

occurred in FYE2022. After adjusting the base year
(FYE2022) for energy pass-through charges, surcharges, andforeign currency, our sales growth on a comparable basis is
expected to increase just over 2.5%. We expect solid sales
growth in the United States, Asia and Oceania, and Thermosand modest growth in Europe and Japan. The entire organization is focused on improving profitability through pricing
efforts, productivity, and cost reduction initiatives along withcost and inflation recovery activities. Our team’s hard workand focus will enable COI next year to grow at an accelerated 4.2% and on a constant-currency basis, 4.9%. There isno need to adjust for pass-through charges and surcharges
as these do not impact the absolute COI figures. As we lookto the macroenvironment, we are concerned with the uncertainty and mounting risks. The main risks are the RussiaUkrainian crisis, China’s zero-COVID policy, energy crisis, andrising inflation and interest rates. Our team is working diligently to manage controllable factors and we remain committed to achieving these targets under the current
environment.
As evidenced over the last few years, our Company has aproven, successful, diversified, and resilient business model.
Our Company generates solid cash flows in both strong andsoft economic conditions. Looking to FYE2023, we expect toincrease our operating cash flows to approximately ¥169
billion, an increase of approximately ¥20 billion. The main
drivers of the increase are improved operating income performance and more disciplined working capital management. The strong cash flows will enable us to invest in the
future of our business through cost reduction and productivity projects, capital growth projects, and acquisitions. It is
anticipated that we will spend nearly 60% of our operating
cash flow on investments to strengthen and improve ourCompany’s financial performance. In addition, we will continue to reduce debt and will strive to attain a targeted
adjusted net D/E ratio at a more favorable rate of 0.86.

On behalf of the NSHD executive team, I would like toexpress our deepest appreciation and thanks to the approximately 20,000 hardworking and dedicated employees
engaged in 32 countries and regions around the world foran excellent year. Our employees are our greatest asset, andtheir strong performance is evident in the results delivered
this past year. On a year-on-year basis, sales increased
17.0%, core operating income (COI) increased 17.7%, operating income increased 13.9%, and net income attributableto owners of the parent increased 16.1%. COI and operating
income both exceeded ¥100 billion for the first time in
Company history. All segments contributed to this improvement in both sales and profit. Our Group companies generated strong operating cash flows of nearly ¥150 billion. Thisstrong cash generation allowed us to fund capital projects
and investments totaling just over ¥75 billion, to pay dividends of around ¥14 billion to our shareholders, and to
make debt payments of over ¥50 billion. Debt reduction
remained a priority throughout the year. We successfully
reduced our adjusted net debt-to-equity (D/E) ratio to 0.94,
which is below the 1.01 target set at the beginning of lastyear. All five major segments contributed to the solid growthand cash generation. Our Company is well positioned financially to invest in the future growth of our business. As further evidence of our improved financial health, Rating andInvestment Information, Inc. (R&I) recently announced an
upgrade to our long-term debt issuer rating to A from A-.

R&I and JCR Credit Ratings
As of May 2022:
Rating and Investment Information, Inc. (R&I)
Long Term BondA

Subordinate Bonds and Loans

BBB+

Japan Credit Rating Agency, Ltd. (JCR)Long Term BondA+

Subordinate Bonds and LoansA–

Medium-Term Plan (MTP)
I am delighted to participate in NS Vision 2026, Enabling the
Future. Over the past year, the organization has been working diligently to prepare and refine strategies, stress test
assumptions, and prepare actions plans to achieve established goals. The executive team has focused on reviewing,
guiding, and driving the teams toward attainable targets.
As I look across the segments and the significant number ofstrategic opportunities that lie ahead, I am very excited about
our Company’s future, and I am confident that our mediumand long-term outlook is bright. The management team

Alan David Draper
Current Year Targets and Outlook

Executive Officer,
Group Finance and Accounting Office, and CFO

Looking forward to FYE2023, sales are expected to contractfrom ¥957 billion to ¥950 billion, which is a reduction of-0.7%, or ¥7 billion. This comparison is not on a consistentbasis due to different foreign currency exchange rates andunprecedented pass-through charges and surcharges thatNIPPON SANSO HOLDINGS CORPORATION14INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

15INTEGRATED REPORT 2022

OUR COMMITMENT

CFO Message

team will focus on low-profitability businesses and restructure them to achieve improved profitability or exit those thatare neither profitable nor a strategic fit in the NSHD Group.
Our MTP considers and excludes the estimated impact ofthese changes. In addition, COI is expected to grow significantly to between ¥125 billion and ¥135 billion, which,adjusting for foreign currency, is 5.2% to 7.3% CAGR,
respectively. The pass-through charges, surcharges, andreorganization of low-profit business has little impact on
COI comparability. Our NSHD vision, “We aim to create social
value through innovative gas solutions that increase industrial
productivity, enhance human well-being, and contribute to amore sustainable future,” is at the core of our five strategies
that will help us achieve a strong core operating income
growth rate. The successful execution of our five MTP strategies of sustainability management, exploring new businesstoward carbon neutrality, total electronics, operational
excellence, and DX initiatives will enable us to achieve
outsized income growth.
We will continue to evaluate capital projects with criticalfinancial and commercial criteria to help ensure project internal rates of return are compared to regional hurdle rates so
we are investing in solid economically and financially based
projects for our shareholders. As evident in our MTP investment forecast of ¥433.0 billion over the next four years, thisis a sizable increase in capital investment compared to what
we have spent over the last several years. The reasons for theincreased spend above the rates of the past few years are as
follows: The NSHD Group has an improved financial situation

clearly understands the targeted objectives, and everyone isaligned with the five main strategies in NS Vision 2026: sustainability management, exploring new business toward
carbon neutrality, total electronics, operational excellence,and DX initiatives. In addition to the main strategies, each
operating segment also has key tasks, activities, and objectives that will propel them towards their strategic goals.
Two of the metrics that will be focused upon during the
MTP are ROCE after tax and EBITDA. We changed the calculation of the ROCE metric to an after-tax basis to allow better
comparability with our global peers. In addition, more emphasis
and attention will be placed on EBITDA and related margins,
allowing a more comparable analysis across the industrial
gases industry. Given our debt position, we will continue to
use the adjusted D/E ratio through the end of this MTP.
NS Vision 2026 builds on the past achievements of each
operating unit. The main key performance indicators arerevenue, COI, EBITDA margins, adjusted net D/E ratio, andROCE after tax. Our revenue target is ¥975–1,000 billion,
COI target is ¥125–135 billion, EBITDA for the Group is
expected to exceed 24%, adjusted net D/E ratio to be below
0.7, and ROCE after tax to be at or above 6%. While thecalculated revenue growth is about a 1% compounded annual
growth rate (CAGR), the underlying growth on a consistentbasis as normalized for foreign currency, pass-throughcharges, surcharges, and expected portfolio restructure ofunderperforming low-profit businesses results in a CAGR of
2.6% at ¥975 billion of revenue to 3.3% at ¥1,000 billionof revenue, respectively. During the MTP, our management

Cash Flow Forecast

Closing Remarks

and soundness as a result of our significant debt reduction;
capital investments over the past few years were influenced
by fiscal constraints and belt tightening due to the unprecedented COVID-19 pandemic; and there are a significant
number of carbon neutral and DX project opportunities
that the Group will undertake during the next four years.
In addition to capital investment, we will also continue toexplore acquisition opportunities across Europe and theUnited States, allowing us to further expand our geographic
footprint and improve our customer density in given regions.
Capital allocation is a critical function of the Nippon Sanso
Holdings executive team. Our capital allocation approach isconsistent with the past. The operating cash flows generated
through our business units will be used to pay down debt,
to fund capital investment, and to return shareholder value
through dividends. We expect our cash flow allocation to beapproximately 60% for investments with the remaining 40%
to be used for debt payment and dividends. Our adjusted
net D/E ratio will be at or below 0.7 at the end of the MTP
period, reflecting an anticipated conversion of a ¥100 billionof hybrid debt to clean debt during this period. This will be asound financial accomplishment ensuring NSHD remains on
track to build upon our solid financial foundation. Dividend
payments will be a continued focus of our team. We will
strive to maintain stable and reliable dividend payments
based on business growth similarly to the way we have successfully managed this over the past eight years at a CAGR
of approximately 14%.

It is essential that we provide the investment community withvaluable insight into the performance of our business. During
the MTP, we will introduce financial initiatives with the objective of improving our external reporting to the financial community and providing better comparability with othercompanies within the industrial gases industry.
In the MTP, NS Vision 2026, the NSHD Group has an
appropriate blend and balance of business targets that areachievable, motivating, and challenging. Activities will beprioritized based on their ability to yield prompt benefits.
The entire NSHD Group is excited to focus and deliver on thetangible and challenging opportunities ahead of us and todeliver positive results for shareholders, employees, and society.

Dividend Trend(Billions of yen)

27.1%

26.2%

24.9%

24.3%
59.7

22.7%

0.4

55.6
15.7

End of FYE2022 cash
(Actual)Free cash flow*1

Scheduled debt
maturities*2

Annual dividend

Other regarding
financing activities*1 Cash flows from operating activities + (Announced) Divestiture proceeds – CAPEX*2 Indicates cash paid (including Repayments of lease obligations)

NIPPON SANSO HOLDINGS CORPORATION

20

78.6
3.8

Forex effectand others

12

End of FYE2023 cash
(Forecast)

2014

Interim dividend

16

INTEGRATED REPORT 2022

23.0%

34

(Yen)

93.6

23.5%

13

23.3%

20.3%

23.9%

25

23

28

36

30

16
CAGR approx. 14%

2015

2016

J-GAAP

IFRS

Year-end dividend

Dividend payout ratio

2017

2018

NIPPON SANSO HOLDINGS CORPORATION

2019

2020

2021

2022

2023
(Estimated)(Years ended March 31)

17

INTEGRATED REPORT 2022

OUR VALUE CREATION

OUR
VALUE
CREATION

The Nippon Sanso Holdings Group operates in four geographic hubs: Japan, theUnited States, Europe, and Asia andOceania. To build a more competitive operating structure comparable with otherglobal gas majors, in October 2020 theGroup transitioned to a pure holding company structure. This new structure enables
us to delegate authority to regional operating companies for swift decision-making
and appropriate allocation of management
resources. We have also created a structure that enhances the comprehensive
capabilities of the Group by clarifying
responsibility for business execution andperformance, and sharing and enhancing
the strengths of each operating company.

SECTION 2

The Nippon Sanso Holdings Group’s Value Creation

NIPPON SANSO HOLDINGS CORPORATION18

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION19

INTEGRATED REPORT 2022

Leeden National Oxygen Ltd.
(Formerly National Oxygen Pte. Ltd.)Our Value Creation StoryOUR VALUE CREATION

Nippon Sanso was established in Japan in 1910. The Company grew in step with the nation’s
industrial sector, eventually capturing the leading share of the Japanese industrial gases
market. Seeking further growth, the Company set its sights on the global industrial gases
market, investing in Singapore and the United States in 1980s, and widening its network to
include China, Thailand, the Philippines, Taiwan, and Vietnam in the 1990s, followed by India,
Indonesia, Australia, Myanmar, Cambodia, and Peru in South America in the 2000s. In the
United States, the Company has engaged in aggressive M&As through its local operatingcompany, Matheson Tri-Gas, Inc. Then, in 2018, it began to expand its business in Europe,acquiring a portion of the European industrial gases business of U.S. company Praxair, Inc.,and establishing Nippon Gases Euro-Holding S.L.U. In 2020, the Company transitioned to aholding company structure, and in 2022, formulated the medium-term management plan,
NS Vision 2026. With this plan, the NSHD Group continues seeking further growth.

1910

Established Nippon Sanso Ltd.
The Company’s founder, Takehiko Yamaguchi, identified
the social importance and future potential of producing
and supplying oxygen separated from air within Japan.
Korekiyo Takahashi, then deputy governor of the Bank ofJapan (and later prime minister), showed interest in Mr.
Yamaguchi’s ideas, and decided along with other officersof the Bank of Japan to make an investment.

• 1918
Established Toyo Sanso K.K.
• 1935
Succeeded in producing Japan’s first air
separation unit (ASU) for manufacturingoxygen

1995年
大陽酸素と東洋酸素が合併し大陽東洋酸素が発足

1982

Established National Oxygen Pte. Ltd.
in Singapore aiming to expand business in
ASEAN countries• 1995
Merged Taiyo Sanso Co., Ltd. and Toyo Sanso K.K.
to launch Taiyo Toyo Sanso Co., Ltd.

Operating company in the United States
Matheson Tri-Gas, Inc.

• 1946
Established Taiyo Sanso Co., Ltd.
• 1964
Opened the first on-site plant to realize
reliable, high-volume gas supplies• 1970s
Started early on development of electronicmaterials gases needed for semiconductor
manufacturing, establishing a position in
the electronics market• 1978
Commercialized the world’s first stainlesssteel vacuum-insulated bottle

1999

Merged U.S. Matheson Gas Products, Inc.
and Tri-Gas Inc., to launch current Matheson Tri-Gas, Inc.

2018

Acquired a portion of theEuropean industrial gases
business of U.S. industrial
gases supplier, Praxair, Inc.

2008

Established Dalian Changxing Island
Taiyo Nippon Sanso Gas Co., Ltd. in China• 2012Acquired Singapore-based industrial gases
and welding equipment manufacturer
Leeden Limited

2015

Acquired Australian liquefied
petroleum gas (LP gas) and industrial
gases distributor Renegade Gas Pty Ltd
with a view to expanding into theindustrial gases market in Australia

2016

2019

Acquired the U.S. HyCO business ofGerman industrial gases supplier, Linde AG

2020

Transitioned to a holding company structure and changed the company
name. The former name, “Taiyo Nippon Sanso Corporation,” was transferred to a newly established operating company in Japan.

Acquired a portion of the U.S. industrial
gases business and relevant businessassets of French industrial gases supplier
Air Liquide S.A.

2022

Launch of medium-term management plan
“NS Vision 2026” ( P.30)
ACT Stainless Pot, the world’s first stainless steel
vacuum-insulated bottle, launched in 1978

NIPPON SANSO HOLDINGS CORPORATION

20INTEGRATED REPORT 2022

Operating company in Europe
Nippon Gases Euro-Holding S.L.U.

NIPPON SANSO HOLDINGS CORPORATION21

INTEGRATED REPORT 2022

3%

OUR VALUE CREATION18%
Gas Business in JapanThe Company’s global expansion which began in 1980s has evolved into abusiness operation structure comprising a global network of four geographic
hubs in Japan, the United States, Europe, and Asia and Oceania, as well as the
Thermos business, with more than 19,000 employees on a consolidated basis.
Every NSHD Group employee around the world seeks to embody the Company’s
tagline, “The Gas Professionals,” in their daily operations. As a pure holding
company, Nippon Sanso Holdings will coordinate with the regional operatingcompanies in each of the four geographic hubs and Thermos to promote higher
quality operations and higher earnings across the entire Group.

¥372.0 billion

Gas Business in the United States

957.1¥224.8 billion

818.2

Thermos Business¥26.8 billion

740.3

850.2

¥123.5 billion

Revenue by Segment

Affiliated Companies(Global)(Of which, in Japan)

101.1 billion

307

139

Overseas
Revenue Ratio

Countries and Regionsof Operation

Industrial Gases Global Market
Share Ranking

59.2%

32

4th

Consolidated Numberof Employees

billion

19,398FYE2022

FYE2021

FYE2020*1

FYE2019

FYE2018

Percentage of Revenue by Business

Operating
ProfitRevenue*1 The consolidated number of employees is the figure for all
Group companies as of March 31, 2022. The aggregation
method is different from that used in the non-financial information section (▶P.112–P.113, P.115, P.120) later in the report

Revenue

Thermos
Business
Gas Business
in Europe

1,360

employees

2,912

employees

Gas Business in
the United States

Gas Businessin Japan

4,448

employees

Gas Businessin Asia andOceania

Expand Four Geographic Hubs and Thermos

22

INTEGRATED REPORT 2022

6,346

employees

4,246

employees

Nippon Sanso Holdings GroupNIPPON SANSO HOLDINGS CORPORATION

79%

Thermos

Gas Business in Asia and Oceania

646.2

957.1

Electronics¥209.7 billion¥¥

Industrial gases

Gas Business in Europe

NIPPON SANSO HOLDINGS CORPORATIONOther*286

employees*2 Employees who are assigned
to the Group’s Corporate
Administration Division orEngineering Division andcannot be classified undera specific segment.

23

INTEGRATED REPORT 2022

Our Direction
The Nippon Sanso Holdings Grouparound the World

Providing a Safe, Reliable Supply
of Industrial Gases for All Industries

Introducing Agreeable, Environmentally Friendly
Lifestyles in the Thermos Business

The Nippon Sanso Holdings Group operates
in four geographic hubs: Japan, the UnitedStates, Europe, and Asia and Oceania. To
build a more competitive operating structurecomparable with other global gas majors, in
October 2020 the Group transitioned to apure holding company structure. In addition,
the Thermos Business supplies THERMOS
brand products to over 120 countries
worldwide.

In its industrial gases business, the Group
provides a constant supply of industrial gases
24 hours a day, every day of the year, to a wide
range of industries, such as steelmaking,chemicals, automotive, shipbuilding, machinery,food, healthcare, and electronics. We believethat our safe and reliable delivery of industrial
gases as “The Gas Professionals” can contribute to the development of these industries aswell as to the resolution of social issues.

In the Thermos Business, product development starts fromthe concept of sustainability. We consider it our mission toachieve both convenience and environmental preservation,and use our proprietary vacuum-insulation technology tointroduce new kinds of lifestyles that are agreeable topeople and society and also environmentally friendly. In the
Thermos Business, we contribute to energy saving withvarious technologies and the use of imagination, whileproviding new value that realizes agreeable lifestyles.

Special Features of Our Structure
Industrial Gases Business Model of
Production at the Site of Consumption
Different customers use different types andquantities of our main industrial gases, suchas oxygen, nitrogen, and argon, depending on
their applications. Therefore, to transport andsupply industrial gases safely, reliably, andefficiently, we build a supply network in which
the site of production and consumption arecontained in a certain geographic area.

Holding Company Operations
Connecting Operating Companies
at the Four Geographic Hubs
Our regional operating companies have a
deep understanding of their local businessenvironment as well as market and customer
characteristics. Giving each operating company greater authority helps to achieve fast,
agile management and business operation byincreasing decision-making speed. Meanwhile,the holding company executes cross-regional
measures to encourage leveraging of thecomprehensive capabilities of the Group andallocates resources appropriately to operatingcompanies.

Business Structure Comprising a
Global Network of Four Geographic
Hubs and the Thermos BusinessAs a pure holding company, the Nippon Sanso
Holdings Group is building a structure for
integrating management with the operatingcompanies through the proposal of strategies,
enforcement of compliance, and enhancement of the risk management structure covering the entire Group. It will also pursue
operational excellence by sharing and developing best practices across all NSHD Group
companies.

Nippon Sanso Holdings Group Structure
Gas Business in Japan

Kenji Nagata
Representative Director
and President

Taiyo Nippon Sanso
Corporation Group

Thermos Business

Gas Businessin the United States

Yuji Kataoka

Thomas Scott Kallman

Representative Director
and President

Three Changes Caused by the Transition
to a Holding Company Structure

1

2
3

Thermos K.K. Group

Toshihiko Hamada

Chairman and CEO

Representative Director,

Matheson Tri-Gas, Inc. Group

President CEO

Delegation of authority for swift

Nippon Sanso
Holdings Corporation

decision-making and appropriate
management resource allocation
Clarification of business execution
responsibility and results

Gas Businessin Asia and Oceania

Gas Business
in Europe

Proactive sharing and development of

Tsutomu Moroishi

Eduardo Gil Elejoste

Senior Executive Officer,
Group Corporate Planning Office
Nippon Sanso Holdings Corporation

Chairman and President

outstanding initiatives by each operatingcompany, strengthening the comprehensive
capabilities of the Group

Nippon Gases
Euro-Holding S.L.U. GroupOperating company groups
in Asia and Oceania* The Oceania and Asia Management Division has been establishedwithin the Group Corporate Planning Office to oversee businesspromotion for companies in Asia and Oceania.

NIPPON SANSO HOLDINGS CORPORATION24

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

25

INTEGRATED REPORT 2022

Our Characteristics and Strengths

Continuing Our Sustainable
GrowthOUR VALUE CREATIONOUR VALUE CREATION

Value Creation Story

OUTCOMEGroup Vision

Under the medium-term management plan NS Vision 2026, the entire Group has reaffirmed its understanding of theexternal environment. In our business activities, we will share our best practices in each region in pursuit of operational excellence, aiming to deliver both social value and economic value, and thereby increase our corporate value.

We aim to create social value through innovative gas solutions that increase industrial productivity,
enhance human well-being, and contribute to a more sustainable future.
PeopleSociety

Earth

Respect everyone and contributeto people’s growth, health,and job fulfillment

Fulfill our function as part of social
infrastructure and contribute to thedevelopment of a wide range
of industries

Contribute to the preservationof a sustainable global
environment

Key Considerations: Environment and Society
Climate impact

Economic uncertainty

Development of a digital society

Geopolitical instability

Diversification of thinking and lifestyles

Enabling the Future

Business Activities

Pursuit of operational excellence

Medium-Term Management Plan “NS Vision 2026” (▶P.30, P.62)

Sharing of best practices

Materiality (▶P.32)

Industrial gases
business

us

in
e

Japan

ss
ics
bus
ine

ec
El

ss

United States

OUTPUT

tr
on

b
os
Therm

The GasProfessionals

EuropeThermos

Industrial Gases BusinessDomainElectronics BusinessDomainThermos BusinessDomain(▶P.42)Oxygen, nitrogen, argon, etc.
Equipment, facilities,
solutions provision(▶P.43)
Electronic materials gases, etc.
Equipment, facilities,
solutions provision(▶P.54)
Vacuum-insulated bottles, tumblers,
fry pans, etc.
Ecological product line

Asia and
Oceania

type B1-J

Plant and engineering technologies/Gas handling technologies/Gas application technologies/Supply modes(on-site, bulk, packaged)/Vacuum-insulation technology/Quality, safety, and environmental management
Risk Management (▶P.96)

NIPPON SANSO HOLDINGS CORPORATION

Corporate Governance (▶P.86)

26

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

27

INTEGRATED REPORT 2022

OUR STRATEGY

We formulated our first medium-term
management plan, NS Vision 2026, after theestablishment of Nippon Sanso Holdings
Corporation in October 2020 with the vision that,“We aim to create social value through innovative
gas solutions that increase industrial productivity,
enhance human well-being, and contribute toa more sustainable future.”
Under the four geographic hubs and Thermos
business structure, we established five focusedfields: Sustainability management, exploring new
business toward carbon neutrality, total electronics,
operational excellence, and DX initiatives. We will
strengthen the Group’s comprehensive capabilities
and achieve further growth to provide a brightand comfortable future for people, society, andthe earth.

OUR
STRATEGYSECTION 3

Medium-Term Management Plan NS Vision 2026

NIPPON SANSO HOLDINGS CORPORATION

28

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

29

INTEGRATED REPORT 2022

OUR STRATEGY

SloganEnabling the Future
Medium-Term Management Plan

Focused Fields

NS Vision 2026

Sustainability
Management
P.62–P.65

NS Vision 2026 is based on recognition of the current situation and designed tostrengthen the Group’s comprehensive capabilities and promote its growth throughfive focused fields, with new financial and non-financial KPIs under the business operation structure of four geographic hubs and the Thermos business.

DX Initiatives

Exploring New Businesstoward Carbon Neutrality

P.37

P.38–P.39

Key Considerations: Environment and Society
Operational Excellence

Total Electronics

P.36

ClimateimpactEconomic
uncertainty

Geopoliticalinstability

Developmentof a digitalsociety

P.34–P.35

Diversificationof thinking
and lifestyles

Business Strategy by Segment

Our urgent task is to strengthen
the Group’s comprehensive
capabilities in order to respond

Key Considerations: Industrial Gases Market

to the changing world andEurope5,719

21,994

18,51920,215

#1

#4

#4

#6

1.0–1.5%

2.5–3.0%

2.0–2.5%

4.0–4.5%

2019 Industrial Gases Market*(Millions of U.S. dollars)
2019 Market Ranking
GDP Growth Rate (Assumed)

Gas Business in
the United States(Matheson Tri-Gas Group)

P.46

P.48

Asia
and Oceania

NS Vision 2026

¥975 billion–¥1,000 billion*

≥ 24%

34.8%
33.1%

Non-Financial KPIs
Environment
Reduction rate of GHG emissions (Base year: FYE2019)

GHG reduced emissions through environmental product offer

Lower customer GHG emissions through environmental product offerings andapplications > NSHD group GHG emissions (FYE2026)

Group:

A

Safety Management
Lost time injury rate

Rate of female employees

Asia and Oceania, Thermos:≤ 1.6 (FYE2026)≥ 22% (FYE2026)
25% (FYE2031)

27.1%

Compliance

Adjusted Net D/E Ratio

NSHD

20.4%
10%

30%

40%

Source: Refinitiv Eikon most recent fiscal year-end* The ratio of cash-based profit arising from business activities to revenue. The EBITDA margin has been employed fromthe current medium-term management plan as an indicator of profitability based on cash flow, excluding the impact of
M&A and capital expenditures.

NIPPON SANSO HOLDINGS CORPORATION30INTEGRATED REPORT 2022

Rate of female management posts

Rate of receiving compliance training≤ 0.7 times

20%

Human Resources

Japan, the United States, Europe,≥ 17%–33%

C

P.52

18% (FYE2026) 32% (FYE2031)

EBITDA Margin

EBITDA Margin*(Thermos Group)(Asia and Oceania region
business company group)

Revenue¥125 billion–¥135 billion*

Task: Improve Profitability

Thermos Business

P.50

Financial KPIs (FYE2026)

Core Operating Profit

0%

Gas Business in
Asia and Oceania

Numerical Targets (KPIs)

Formulation ofMedium-Term
Management Plan

* Estimation based on “Gasworld Industrial Gas Market Forecast 2020”

B

Gas Business in Europe(Nippon Gases
Euro-Holding Group)

P.44

in each region.

The
United StatesJapan(Taiyo Nippon Sanso Group)

enhance our standing

Objective: Reliable Acquisition of Business Opportunities
Regional market overview

Gas Business in Japan

100% (FYE2026)≥ 18% (FYE2026)
22% (FYE2031)

ROCE after Tax≥ 6%* Due to uncertainty in the global economy, revenue
and core operating profit are shown in a range.

NIPPON SANSO HOLDINGS CORPORATION

31

INTEGRATED REPORT 2022

OUR STRATEGY

Materiality

Reflecting an increasing social awareness of sustainability and global environmental issues as well as the dramaticchange in our corporate structure, our materiality, initially formulated in 2015, was revised and obtained approval of
the NSHD Board of Directors in December 2021.
Preconditions for the Existence of an Enterprise

Respect for
Human Rights

Safety and Security

Background and Objective for Review of Materiality • Since 2015, when the previous material issues were identified, social awareness of sustainability and global environmental
issues has increased, and the Group’s corporate structure has changed dramatically.
• Under the holding company structure, we have newly identified priority issues globally with an awareness of regional company
business and social contribution initiatives, to clarify the issues that need to be addressed globally.
• We manage and disclose the status of progress on issues that the Group should address (materiality) using the KPIs set out in
medium-term management plan NS Vision 2026. This enables us to strengthen and enhance our initiatives to help resolve issues.

Corporate Ethics
Materiality Identification Process 1Extraction of issues
We identified approximately environmental and social issues related to the Company’s businessactivities, making reference to international guidelines such as the Global Reporting Initiative (GRI)
Guidelines, the United Nations Global Compact, and ISO 26000, as well as the SDGs and evaluation
points used by environmental, social, and governance (ESG) evaluation organizations.

2Internal survey and identification of materiality candidates
We conducted a global employee survey to confirm consistency and appropriateness with eachregion’s business and to quantitatively evaluate the level of importance on two axes: “stakeholders”
and “Nippon Sanso Holdings.”

Step

3

Internal discussion and decision
The Management Committee, Global Strategy Review Committee, and the Board of Directors discuss the appropriateness and conduct a comprehensive evaluation of the material issues and theirprioritization, and create a materiality matrix.

Step

4

Approval
Identified with Board approval.

Step
Extremely highStrengthening communication
with stakeholders
Sustainable supply chain
 ontribution to regional and industrial
Cdevelopment as social infrastructure

Very highPursuit of customer satisfaction

Conservation of water resources
Coexistence with local communities echnology and R&D capabilities thatT
support the creation of customer value
and social value
Promotion of initiatives for
digital i­ nnovation
Employee and family healthHigh

Importance to stakeholders

Diversity and inclusion

Product and service safety and quality
 roviding products and services thatP
contribute to resolving environmental
and social issues
Climate change mitigation and adaptation
 ffective use of resources and prevention
Eof pollution

 trengthening information securitySmeasuresImprovement of productivity and promotion of production optimization
 evelopment and maintenance ofDhuman resources

Conservation of biodiversity

Improvement of employee engagement

 rotection and effective utilizationPof intellectual property

 rovision of comfortable and prosperousP
lifestyles

High

Very highStep

Extremely highImportance to Nippon Sanso Holdings
Key issues related to the global environment

Key issues related to social systems

NIPPON SANSO HOLDINGS CORPORATION32

Key issues related to the Company and its organizational structure

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

33

INTEGRATED REPORT 2022

OUR STRATEGY

Creating Growth Opportunities to Increase Earning Capability (1)Total Electronics

Case
Studies

Semiconductor manufacturers are expected to grow going forward. To uphold the trust we have built with customers in this industry, we will provide quality assurances, new products, and technology solutions, while promoting
further utilization and strengthening of the Group’s current resources.

ActionPlan

Become a global supplier in the semiconductor ecosystem• Offer robust/updated quality assurances, new products, and technology solutions• Leverage and enhance our existing group capability and solutions

East Asia: Expanding Production Capacity of Diborane

Diborane (B2H6) is an essential material used in the manufacture of all kinds of semiconductors, from highly advanced
through to commodity products.
Recently, demand for diborane has risen sharply as customers expanded their production capacity, particularly forsemiconductor memory. Accordingly, we have been implementing plans to double our diborane production capacity
in Japan, South Korea, and China. We also plan to investingin production capacity aligned with expected demand andfavorable trends.
Electronic materials gases production plant in Yangzhou, China

Initiatives to Achieve Financial Targets 

1Enhance the Semiconductor Specialty Gases (SSG) business• Expand product lineup and production capability• Improve Group SSG quality and responsiveness

Basic Technologies Supporting Business Expansion

2

Group capability enhancement for equipment, ASUs, and engineering• Leverage group capability for equipment in the electronics business• Enhance the possibility to acquire on-site business for semiconductor investment• Expand opportunities to supply semiconductors and photovoltaic cells in Asia

3

DX introduction• Enhance productivity and semiconductor quality through DX

The NSHD Group’s basic technologies are vital to promoting NS Vision 2026. These technologies include plant andengineering technologies, which cover design through maintenance of ASUs that produce air separation gases; gas
handling technologies, for the continued reliable and efficient production and supply of air separation gases; and gas
application technologies, which relate to the application of gases in various fields such as food freezing and metal
processing using the gases’ special characteristics. We will utilize these technologies and continue with uncompromisingresearch and development to provide optimal solutions that meet a wide range of customers’ demands, including
electronics customers.
Organizations Related to the Basic Technology System
Nippon Sanso Holdings Group Basic Technologies

In NS Vision 2026, our aim is to become a global supplierin the semiconductor ecosystem by enhancing our production capacity and quality and further optimizing our supply
chain in electronic materials gases, which have been at theheart of this strategy. Moreover, as a Group, we will leverage
our strength in being able to provide electronics customers
with all aspects of ASUs, supply equipment for electronicmaterial gases, and engineering. We will leverage these overa wider range of areas to contribute to improvements incustomers’ productivity and quality, aiming for further growth.

As the semiconductor market has grown, with customers
expanding their businesses on a global scale, the NSHDGroup has increased its business area from the United States
and Japan to Taiwan, South Korea, China, and Southeast
Asia. Furthermore, in 2018 we added the European business,creating a support structure which is able to respond to every
region where semiconductor customers are growing.
We are committed to providing high value added products
and services by optimizing our supply chains and researchand development. We has centralized our response to global
customers which is in line with total electronics strategy. In
addition, We are supplying products and services based on
customer needs in each region, enhancing production andexpanding its operations.

NIPPON SANSO HOLDINGS CORPORATION

Plant andengineering
technologies

Gas Businessin JapanGas handlingtechnologies

Gas Businessin the UnitedStatesGas application
technologies

Gas Business
in Europe

Gas Businessin Asia andOceania

We are resolving customers’ issues and providing new value to meet market needs inevery area through the Group’s basic technologies.

34

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

35

INTEGRATED REPORT 2022

OUR STRATEGY

Creating Growth Opportunities to Increase Earning Capability (2)Increasing Productivity

DX Initiatives (1) Focus on digitization and digitalization efforts

Another important task in NS Vision 2026 is to improve profitability. By pursuing operational excellence, an activity
for increasing productivity of the entire Group, we will streamline and optimize our overall operations.

ActionPlan

Phase 1: Digitization(1) Foster a Groupwide productivity improvement mindset through global operational excellence events(2) Target early success by horizontal sharing of best practices across operating companies(3) Promote standardization and optimization of operations throughout the Group

Achieve cost reduction effect of more than ¥56.0 billion in
total over four years** Gross basis

Procurement

Production

increasing results as best practices, helping to cultivate
Groupwide awareness of operational excellence. By promoting operational excellence focus and activities across theGroup and actively spreading good examples to operatingcompanies, we will improve the Group’s overall profit bymore than ¥56.0 billion.

Operational excellence means building a competitive advantage by increasing the results and efficiency of business activities, aiming to achieve sustainable growth and enhance
productivity throughout the entire Group.
Nippon Sanso Holdings runs operational excellence events,
where each operating company shares its initiatives for

Asia and Oceania: Operational Excellence Promotion Activities

In the Asia and Oceania region, we are conducting activities
to promote operational excellence known as “Shiba
Productivity.” For countries that are new participants in Shiba
Productivity, an introductory program called Awareness isheld, comprising two events: Summer Camp and Fes. At
Summer Camp, participants identify and report on inefficiency or waste in their operations, and at Fes they present
specific projects that they have undertaken to improve on
them. In FYE2022, over 70 employees from six countries
attended Awareness. Nippon Sanso Vietnam Joint Stock
Company in Vietnam and Nippon Sanso (Thailand) Co., Ltd.
in Thailand implemented the projects, which have enabled
them to make productivity gains in their operations.

Tent collapsed

Too busy tent area

Defects, Skill
Dangerous BBQ
Crazy traffic jam

Kick-off meeting for Awareness 2021
1

Transportation, Waiting

Defects, Skill

Shipment and Logistics

Sales and MarketingTechnology Development and Engineering

Value

General Administration
HR: Employee Engagement

Introduced Technologies• Digital Marketing• Process Automation• Data Science

Within the NSHD Group, we will establish a DX organization and promote initiatives such as digital marketing,remote operation, and process automation, aiming to create
new value in the future by connecting our entire value chain
digitally, from procurement to supply. We also plan to conduct a rapid upgrade of our global IT security system andcountermeasures, as these will play an even more importantrole going forward ( P.98).

DX is closely connected with each of the five focused fields
in NS Vision 2026. Phase 1 involves converting analog data
into digital data. Phase 2 aims to increase efficiency by digitalizing specific business processes, including automatingthem. Phase 3 aims to create new value for customers byconnecting society and systems through digital networks.
During the medium-term management plan, we will mainly
be focused on Phases 1 and 2. Each operating company willconduct initiatives to improve customer engagement, operational excellence, and employee engagement.

Case
Studies• Remote Operation • Autonomic Systems

Global IT Security

Base

Case
Studies

Phase 3: DX

Route to Value Creation

Operations

Group
Goals

Phase 2: Digitalization(2) Prioritize these three fields: Customer engagement, Operational excellence, Employee engagement(3) Initiatives by regional management (4) Dedicated DX organization in the NSHD GroupPursuing Operational Excellence 

ActionPlan

DX Initiatives

Japan: Building a Remote Operation System for Our Core Production Plant

In Japan, the working-age population is projected todecrease going forward, and securing personnel needed tooperate production facilities is a looming issue for business
continuity. Meanwhile, rigorous plant operation based on
more sophisticated risk evaluation is required, particularly in
our ASUs, which are the Group’s core production facilities. In
this environment, Taiyo Nippon Sanso Corporation will introduce a remote operation system that allows us to maintain
operation management with a significant degree of sophistication, thereby enabling improvements in productivity and a plant
operation system that realizes effective use of human resources.
We will evaluate this system and aim to realize remote
operations of manufacturing plants that strictly adhere tolegal requirements. In FYE2024, we plan to open the Remote

Operation Center (tentative name) and gradually expand
target plants. This center will be established to handle plant
operation management, plant equipment management,
and quality control, among others, and will harness digitaltechnology such as the Internet of Things (IoT) and artificial
intelligence (AI) in addition to the remote monitoring technology cultivated at the Total Monitoring Center.
Remote Operation Center
Remote monitoring and operation

Operation
optimization

Remote statusmonitoring

Plant operation management

Operation data

Event
notification

Abnormality
detection

Early signdetection

Remote quality
monitoring

Plant equipment management

Operation
performanceOn-site video

Device guidancevaluesSensor warning

Production plant
Conceptual Drawing of Remote Operation at Core Production Plant

NIPPON SANSO HOLDINGS CORPORATION36

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION37

INTEGRATED REPORT 2022

Quality statusmonitoring

Traceability

Quality control

Analysis data

Quality control
ledgerOUR STRATEGY

Creating Growth Opportunities to Increase Earning Capability (3)Realization of a Carbon-Neutral Society
The NSHD Group will contribute to the reduction of GHG emissions in its customers’ industries throughenvironmental product offerings and solutions. We will strengthen initiatives to develop the necessary technologies
to achieve this goal, and promote stronger collaboration with strategic partners on technologies that we lack. In
parallel, we will strive to bolster our communication capabilities to ensure that our various stakeholders understandour initiatives.

Carbon-Neutral Programs We are implementing two programs aimed at realizing carbon neutrality in 2050: Carbon Neutral Program I ( P.63), which is
aimed at reducing the Company’s own GHG emissions, and Carbon Neutral Program II, which aims to help customers lower their
GHG emissions by providing them with solutions such as environmental product offerings, equipment, and services. Here, we
introduce our provision of solutions under Carbon Neutral Program II.

Exploring New Business Opportunities for a Carbon-Neutral Society Gain some “quick-win” carbon-neutral projects
ActionPlan• Join or capture carbon-neutral projects in the steelmaking, glass, ceramics, aluminum, and non-ferrous
metals markets• Acquire HyCO projects for a hydrogen society

CaseStudies

United States: Long-Term Hydrogen Supply Agreement for Renewable Fuels

Matheson Tri-Gas, Inc. (MTG) signed a long-term supply
agreement to meet hydrogen requirements for renewablediesel production for a 75,000 bpd (barrel per day) refinery
owned by Vertex Energy with hydrogen from an existing facility
as well as newly generated hydrogen from renewable fuels.
MTG has an established long-term track record as a manufacturer and supplier of stable safe hydrogen. In this project,
the feedstock for manufacturing hydrogen will not be fossil
fuels, but renewable hydrocarbon fuels (including bionaphtha and other biofuels) produced as by-products from renewable fuel manufactured by Vertex Energy, making it possible
to manufacture and supply hydrogen with an extremely low
carbon footprint.
This agreement will be the first occasion for Nippon Sanso
Holdings to establish a HyCO plant that uses renewablehydrocarbon fuel as feedstock, demonstrating the Group’scommitment to the supply of industrial gases for commercially sound renewable energy projects toward carbon neutrality. Furthermore, the project also represents a significant

additional dimension for the Group’s global HyCO footprint.
In the development of the global HyCO business, the NSHDGroup will continue to actively explore target customers andprojects, undertaking careful scrutiny of their feasibility andeconomic viability, while continuing to realize businessgrowth and contribute to a carbon-neutral society.

Existing HyCO plant

R&D and strategic partners• Join various carbon-neutral projects and share knowledge within the Group• Find potential strategic partners• Increase resource investment into specialist R&D themes such as combustion technology, etc.

Case
Studies

Japan: Greening the Industrial Furnace Combustion Process

External/internal communication with all stakeholders• Establish communication platform• Enhance our presence through proactive efforts such as posting carbon-neutral activities on social media

The NSHD Group has already organized a global carbonneutral working group to explore new business toward therealization of a carbon-neutral society. We will build up a
track record in quick-win projects in fields where we canleverage our industrial gases and supply equipment and ourdevelopment and engineering capabilities, while also promoting research and development and strengthening collaboration with strategic partners.
We will also establish a communication platform to disseminate information to stakeholders inside and outside the

NIPPON SANSO HOLDINGS CORPORATIONGroup, aiming to capture new business opportunities. To thisend, in September 2022 we established a dedicated website
for carbon-neutral projects.

Dedicated website for carbon-neutral projects:“We enable a carbon neutral world”
https://www.carbonneutralworld.com/

38

INTEGRATED REPORT 2022

Combustion efficiency can be increased by changing from air
combustion to oxygen combustion. The Group’s R&D base at
Taiyo Nippon Sanso’s Yamanashi Solutions Center is developing oxygen combustion technologies for various applications.
Oxygen combustion technology involves adding high-purity
oxygen to combustion-supporting gas to increase the combustion efficiency using air with an oxygen concentration of
21% or higher. The process produces a higher flame temperature compared to combustion in air, and the nitrogencomponent in the combustion-supporting gas can be lowered, reducing the amount of energy carried away as exhaustgas. As a result, the technology is used in various combustion
applications, such as high-temperature blast furnaces andsmelting furnaces, where it helps to save energy and reduce
CO2 emissions. We will apply our strengths in oxygen

NIPPON SANSO HOLDINGS CORPORATION

combustion technology across a broader range, aiming toconvert various kinds of industrial furnaces from air combustion to 100% oxygen combustion.

Oxygen combustion

39

INTEGRATED REPORT 2022

OUR STRATEGY

At a Glance

The three business domains of the NSHD Group are industrial gases, which supports a wide range of industries from basic industries such as steelmaking, chemicals, automobiles, and construction, to domains such as
food and medicine; electronics, which contributes to the manufacture of semiconductors and the creation of new technologies; and Thermos, which brightens people’s daily lives with the themes of comfort and convenience. These business domains are operated and promoted via five business segments. We aim to accurately grasp the market characteristics of each region while sharing and developing the best practices andstrengths cultivated in each region across the Group to strengthen its comprehensive capabilities.
Outline of Business

Main Products and Services (Revenue by product for FYE2022)

Gas:
PackagedBulk
On-siteSpecialty gases (electronic materials gases, etc.)

Equipment and installation:● Gas-related, plants (supply equipment ASUs, etc.)● Electronics-related (piping installation, impurity removal andpurification equipment, etc.)

Taiyo Nippon Sanso Group30.1 14.4

Taiyo Nippon Sanso holds the top share of the Japanese industrial

Gas
Business in
Japan

26.8

gases market at around 40%. It has the main R&D and engineeringfunctions for the Nippon Sanso Holdings Group, and a structure
Gases

that enables it to meet customers’ demands. The company supports manufacturing with a nationwide supply network and stable

2,206億円¥245.1billion

78.0

122.4

Equipment andinstallation, other¥126.9 billion

operations at highly efficient production plants.

By sharing knowledge and technologies
advanced at R&D bases in Japan throughout theGroup, we have established a structure capableof meeting market needs in every region.

100.1

Matheson Tri-Gas Group
Matheson Tri-Gas is building an industrial gases supply network

Gas
Business in
the UnitedStates8.1
23.9

centered on major manufacturing areas such as California, whichleaders in the petroleum industry. In 2019, we acquired a portion

Gases

7.6

47.9

boasts the largest state economy, as well as Texas and Louisiana,

Equipment and¥176.5 billion

installation, otherof the HyCO business* from former Linde Gas North America,¥48.2 billion

40.6

thereby further expanding our product lineup.
* The HyCO business separates hydrogen (H2) and carbon monoxide (CO) fromfeedstock such as natural gas and supplies it to the petroleum refining andpetrochemical industries through on-site operations.

Three businessdomains operated
and promoted
by five businesssegments

96.5

The Matheson Tri-Gas Group’s largest ASU wasestablished to serve the petrochemical industry
facing the Gulf of Mexico, where it conducts
on-site operations.

Industrial gases
business

Nippon Gases Euro-Holding Group
9.7

Nippon Gases Euro-Holding operates in 13 countries, centered in

Gas
Business in
Europe39.7

Iberia (Spain and Portugal), Italy, and Germany, and has built a

42.7

stable and highly efficient business base. The company is developGases

ing its business across a wide range of fields to capture growth

Equipment and¥194.8 billion

installation, otheropportunities, including healthcare in Spain, refrigerants in Italy,
and oxygen supplies for aquaculture in Norway.

¥14.9 billion

14.9

The company maintains a strong focus on productivity to ensure a safe, reliable, and efficient supply,
and to reduce GHG emissions during transport.

102.4

Electronics
business

Asia and Oceania region business company group
4.2

Our industrial gases business operates mainly in Australia,

Gas
Business in
Asia and
OceaniaSoutheast Asia, China, and India, while the electronics business is

4.5

37.8

focused mainly in China, Taiwan, and South Korea. The Group has
Gases

identified East Asia as an important area for its electronics business¥96.0 billion

due to a high concentration of global semiconductor manufacturers.

49.0

Equipment andinstallation, other¥27.4 billion

22.9
In East Asia, we have built an outstanding supply
chain that supplies gases used as materials in thesemiconductor manufacturing process with rigorous quality control, safety, and stability.

4.9

Thermos Group
Thermos K.K. of Japan is the main company in the group, which

4.5

ships THERMOS brand products to over 120 countries around the

Thermos
Businessworld. The group contributes to energy saving through various¥26.8 billion

technologies and creative capabilities, including vacuum-insulation

Japan
Overseas

technology cultivated in the industrial gases business. At the sametime, it provides new value through products that realize comfort-

22.3

able lifestyles.

NIPPON SANSO HOLDINGS CORPORATION40

INTEGRATED REPORT 2022

Vacuum-insulated bottles for cold carbonateddrinks allow people to enjoy carbonated drinks
by keeping them cool for a longer time.

NIPPON SANSO HOLDINGS CORPORATION

41

INTEGRATED REPORT 2022

Thermosbusiness

OUR STRATEGY

Industrial Gases BusinessElectronics BusinessIn the industrial gases business, we supply various industries, such as steelmaking, chemicals, and automobiles,
primarily with our mainstay air separation gases, as well as hydrogen and carbon dioxide. We also provide oxygenand other products for medical use. The industrial gases business responds to different needs in each region aroundthe world, with operating companies in each region cultivating and expanding their businesses at the local consumption level and in accordance with the local characteristics and customers. As the holding company, Nippon
Sanso Holdings acts as a driver to share and expand best practices in each region, aiming to grow the industrial
gases business further.

We supply various electronic materials gases used in the manufacturing processes for semiconductors, LCDs, andsolar cells in the electronics industry, as well as bulk gases such as nitrogen used for safety purposes. We also provide
equipment related to gas supply. In addition, we offer services such as the installation of piping to maintain the quality of the supplied gases, as well as cylinder exchanges and equipment inspection on customers’ sites. Electronicmaterials gases are manufactured at our plants in Japan, the United States, South Korea, China, Singapore andEurope, and delivered through our global supply network. With this structure, we can provide a reliable supply ofhigh-quality gases to meet the increasingly sophisticated requirements of our customers in the electronics industry,
while also meeting customers’ demands in terms of ensuring safety.

Reliable Supplier Utilizing the Optimal Supply Methods to Diverse Markets
The industrial gases business supplies
essential industrial gases such as oxygen,nitrogen, and argon at the required time,in the required amount, and in a reliable
manner using the optimal supply method.
Since its foundation in 1910, the Company
has used the gas technologies it has developed to supply industrial gases to fields suchas materials, chemicals, fabrication, life sciences, food, agriculture, electronics, andenergy. As an essential business, we provide
powerful support for our customers’ industrial activities.

Industrial Gases
Supply Model

Medical Business
The NSHD Group operates a medical business as a subsegment of the industrial gases business. We supply medical gases such as
oxygen, nitrogen, and carbon dioxide (dry ice) to medical and medical-related institutions. Liquid helium at the ultra-low temperature of –268.9°C is used to cool the superconducting magnets in magnetic resonance imaging (MRI) equipment. Furthermore,
we also supply medical-related equipment. In addition to supplying medical gases and equipment to medical institutions, we
supply home oxygen therapy (HOT) equipment to patients who undergo ongoing treatment at home. Moreover, our liquid nitrogen cryopreservation containers for cell storage are used by advanced research laboratories for induced pluripotent stem (iPS) cells
and so forth. The Group is contributing to various medical front lines through the supply of gases and equipment.

Electronics Business in Europe
While the European market does not have production ofadvanced logic device and memory device, several of theGroup’s customers hold large shares of the global market for
power semiconductors, automotive microprocessors, and compound semiconductors, among others, and are continuously
investing to expand their manufacturing capacity or build newplants. Moreover, although Europe’s share of the global semiconductor market is less than 10%, proposal for a law to support investment in semiconductor manufacturing is underconsideration, with the aim of recovering market share over the
medium to long term. Several of our global customers havealready decided on investments, and the sector is expected to
grow going forward in the near future.
The Nippon Gases Euro-Holding S.L.U. Group operates inthe European region, supplying electronic materials gases
to almost all of the major European customers, mainly inGermany, Italy, and France, where semiconductor manufacturers have a large number of sites.
In 2018, the company joined the Nippon Sanso HoldingsGroup, which considers the electronics business as a corebusiness, and immediately began working on creating business and technology synergies. On the business front, thecompany has been working to optimize the supply chain andwidening the use of NSHD Group products.
Our plant in Belgium is the core of the business, andwe are working here to improve quality and safety, while
expanding our investments to widen the range of products
and services to meet growing demand. In addition,
we are also making progress to strengthen our warehouseand logistics bases to contribute to the expansion ofEuropean market.

Electronic materials gases plant in Belgium

FYE2023 Business PlanFYE2023 Business Plan
The NSHD Group has always responded to customers’ needs beyond industrial gases, supplying various gas-related equipment
as well as related services and various solutions. Now, we aim to go a step further, leveraging the combined capabilities of theGroup to provide value in the form of our “invisible assets,” such as knowledge, expertise, and technology. In areas where we
can respond technologically but that are not yet noticed by customers, we will continue to actively explore and propose solutions
with excellent cost effectiveness, thereby increasing the Group’s assets and enabling it to provide customers with optimal individualized solutions. With regard to our initiatives for carbon neutrality, we will also seek to contribute in the same way, by providing resolution strategies for customer issues from the aspect of industrial gases ( P.38).

NIPPON SANSO HOLDINGS CORPORATION42

INTEGRATED REPORT 2022

Looking at the business environment, solid demand is
expected for electronic materials gases due to continued
expansion of production capacity by customers in response
to high demand for semiconductors used in next-generation
communications, the IoT, data centers, and mobility applications. Our customers’ investment plans to boost production
capacity are also increasing, and the Company will need tobolster its stable supply systems to meet future growth indemand for electronic materials gases. We have alreadyannounced an increase in production capacity for diborane
in Japan, South Korea, and China, and will also move to

NIPPON SANSO HOLDINGS CORPORATION

strengthen production capacity and distribution networks
in Europe, the United States, and other regions in line withlocal demand conditions. At the same time, we will continue
to further optimize the procurement and supply chains that
we have already developed.
Moreover, we are optimizing and standardizing ASUs for
global semiconductor customer’s needs at Taiyo Nippon
Sanso, this will enhance our capabilities in supporting all
semiconductor manufacturers in bulk gas offerings, and in
the equipment device business will strengthen supporting
capability in Southeast Asia.

43

INTEGRATED REPORT 2022

OUR STRATEGY

Strategy by Segment

Gas Business in Japan
Message from Director in Charge of the Gas Business in Japan

Outline of Business
Since the Company’s foundation in 1910, it has produced high-quality industrial gases throughout Japan to contribute to the development of the country’s industry, expanding its business by providing the various effects and benefits of these gases. A number ofJapanese industries will continue to maintain a strong presence in the global market going forward thanks to their rigorous safety
and quality management, and our unchanging mission is to supply the needs of these industries. With our sights on the goal of“Enabling the Future,” we will adapt with agility to Japan’s changing industrial and business environment, leveraging the full potential of industrial gases to contribute to the development of a wide range of industries and solutions to social issues.
As demand and production activity decline with the maturation of Japan’s economy, and the labor force decreases due to thefalling birthrate and aging population, the current state of Japan’s economy and society means that high economic growth can nolonger be expected. Under this environment, in the new medium-term management plan, we have positioned “strengthen corebusiness through profitability improvement” and “growth exploration and expansion” as two strategic pillars for the Gas Businessin Japan, and we are aiming to optimize the value of the business by focusing on measures to maximize profitability.

Business History Highlights• Provided on-site supply (piping) of industrial
gases in major industrial areas in Japan• Provided reliable supply of industrial gases tomajor Japanese steelmakers

Bases
Head office (Taiyo Nippon Sanso Corporation)

Branch office, sales office
Laboratory
ASU
Electronic materials gas manufacturing base• Developed the Total Gas Center that supplies
total gas and services, such as high-quality
nitrogen gas and electronic materials gases forthe electronics industry in Japan, such as semiconductor and LCD manufacturers• Built a high-volume production system for
Water-18O stable isotope, which is used as amaterial for positron emission tomography(PET) testing reagents, using the cryogenic
separation method• Manufacture and delivery of space chambers
and test equipment that can reproduce theenvironment situation of outer space, highvacuum and cryogenics

History1910	Nippon Sanso was established under
the name Nippon Sanso Ltd. (Founding)
1918
Toyo Sanso K.K. was established.
1935	Completed the first ASU to be
produced in Japan
1946
Taiyo Sanso Co., Ltd. was established.
1954	Started Japan’s first liquid oxygen bulk
business
Started on-site supply business
1964
1995	Taiyo Toyo Sanso Co., Ltd. waslaunched. (Merger of Taiyo Sanso Co.,
Ltd. and Toyo Sanso K.K.)
2004	Taiyo Nippon Sanso Corporation was
launched. (Merger of Nippon Sanso
Ltd. and Taiyo Toyo Sanso Co., Ltd.)
2020	Launched anew as the operatingcompany for Japan following thetransition to a holding company structure

Results for the Fiscal Year
Japan’s manufacturing sector saw strong performance in the electronics-related industry,
such as semiconductors. However, temporary halts in plant operations due to semiconductor shortages caused issues for the automotive industry and others. Moreover, although
the steel, non-steel, transport equipment, metal processing, chemical, and other industries
recovered from the sharp downturn in the previous fiscal year, overall they have made a
gradual recovery.
In this environment, Taiyo Nippon Sanso Corporation’s revenues from its main product, airseparation gases increased year on year, driven by a recovery in production activities in relatedindustries from the impacts of economic stagnation caused by COVID-19 in the previous fiscal
year. Furthermore, in the electronics-related field, revenues from electronic materials gases
and related equipment and installation increased as a result of customers' operating at full
capacity; however, sales of air separation units (ASUs) and cutting and welding equipment for
metal fabrication decreased year on year and remained lackluster. Helium sales decreased
markedly year on year as a result of the country being forced to apply Japanese shipping
restrictions due to the impacts of turmoil in global marine container shipping networks.
As a result of the above revenue was ¥372.0 billion (up ¥30.0 billion year on year),and segment profit was ¥30.9 billion (up ¥1.0 billion year on year).
* Segment classifications were reorganized in FYE2022, and results for FYE2021 have been presented based on
the new classification.

NIPPON SANSO HOLDINGS CORPORATION44

INTEGRATED REPORT 2022

Aiming to Maximize the Value ofthe Business in Japan to Realize“NS Vision 2026.”

Kenji Nagata
Member of the Board, Nippon Sanso Holdings Corporation
Representative Director and President, Taiyo Nippon Sanso Corporation

Current Analysis and Future Outlook
Nippon Sanso Holdings launched a
new medium-term management plan,“NS Vision 2026,” in April 2022, with theslogan “Enabling the Future.” The havoc
caused by the COVID-19 pandemic for over
two years and the Russia-Ukrainian crisis
starting in February 2022 have increased
uncertainty and opacity in the social andeconomic environment. However, we arecommitted to realizing NS Vision 2026,
seeing the current uncertainty as a reason
to demonstrate the characteristics of theindustrial gases business to the fullest,
pursuing profitability and aiming to maximize the value of the Gas Business in Japan.
Strategies in the New Medium-Term
Management Plan
Air separation gases such as oxygen, nitrogen, and argon are highly versatile, withfunctions and effects that can be used in all
kinds of industry. At the same time, they arealso scalable. To maximize the functions andeffects of industrial gases, gas separation
technologies and related equipment anddevices are essential. Through the supply ofvarious industrial gases, the company has
developed gases and gas application technologies and equipment, expanding theequipment business through the industrial
gases business. Through these initiatives, werealize the Group vision for the Gas Businessin Japan, to “demonstrate the full potential
of industrial gases and constantly press
ahead with our contribution to a wide range
of industries and solutions to social issues as
The Gas Professionals.” Toward realizing NS
Vision 2026, the Gas Business in Japan has
identified profitability as an area where it
must take an even more rigorous approachthan before. The Gas Business in Japan has

two strategies, broadly speaking. The first is
to strengthen our base business in industrial
gases and so forth. Under the iGaaS (industrial Gases as a Service) concept, we propose
a solution comprised of gases and relevant
services and equipment, which enables us toprovide even higher value. In this way, we aim
to strengthen our fundamental business andincrease our earning capability. Furthermore,
we will also generally review our businessstructure with a view to maximizing profitability by examining which kinds of products
and businesses demonstrate the essential
character of Taiyo Nippon Sanso and which
do not.
For the second strategy, we will develop
new value and business domains by realizing
innovation inspired by gases. Currently, inadvanced forms of gas control technologies
we are focusing mainly on 3D printers, thebio field, stable isotopes, and composite
semiconductors, and we will also focus ondeveloping new materials gases as well as
various equipment and devices to be incorporated into semiconductor manufacturing
equipment with a view to leading a total
electronics strategy.
Toward Achieving Financial KPIs
The company has set “iGaaS 10∙15∙20”asits long-term targets through to 2030.
“iGaaS 10” is a 10% improvement of
productivity, “iGaaS 15” is the achievementof operating profit margin of 15%, and“iGaaS 20” is the realization of 20% ofsales from new items, products, and service
supply. During the period of the mediumterm management plan, we have formulated individual action plans for eachbusiness unit to achieve the targets, andwe are promoting activities based on these.
In addition, we will pursue profits by

NIPPON SANSO HOLDINGS CORPORATION

45

appropriately adding to the value provided
by products and services through pricing
activities. Furthermore, the Taiyo Nippon
Sanso Group is conducting measures for
improving profit margins, such as minimizing loss and improving efficiency throughROIC management, including improvements in operational productivity and the
cash conversion cycle through optimizationof Group operations and other measures.
Sustainability Strategy
As a core operating company, Taiyo Nippon
Sanso Corporation conducts sustainablebusiness operations predicated on all key
elements—environment, safety and quality,
employee engagement, and compliance–in
our efforts for “Enabling the Future.” In
terms of the environment, we are focusedon reducing GHG emissions in our own
business operations and will strive to realize
carbon neutrality through industrial gases.
In particular, one area where we are making
a focused effort to reduce GHG emissions isin developing oxygen combustion burners,
which help to increase energy efficiency.
We have developed this technology overmany years, and in addition to oxygen
combustion burners, we are also developing various applications in the fields ofhydrogen and ammonia combustion.
Another technology is CO2 capture. Byfurther advancing the gas separation andcapture technologies that we have cultivated over a long period, we will respondto the needs for capturing exhaust gas invarious industrial furnaces. The functions
and effects of industrial gases can be usedin all kinds of fields to realize carbon
neutrality.

INTEGRATED REPORT 2022

OUR STRATEGY

Strategy by Segment

Gas Business in the United States
Message from Director in Charge of the Gas Business in the United States

Outline of Business
Matheson Tri-Gas, Inc. (MTG) was founded in 1927 as a specialty gas supplier and merged with Tri-Gas, an industrial gas supplier,in 1999 to form Matheson Tri-Gas, Inc. The largest U.S. wholesaler of acetylene and a major supplier of nitrous oxide and dry ice,
MTG accounts for over 20% of the NSHD Group’s net sales. The company operates a nationwide network of ASUs, liquid carbon
dioxide plants, and electronic materials gas plants. In the field of electronic materials gas in particular, MTG has a world-classproduction facility, located in New Johnsonville, Tennessee.
The business strategy foundation is a strong safety culture based on “best practice” process and procedure. This culture isenhanced through the continuous improvement focus of our Quality Strategy, which utilizes Lean Six Sigma methods to drive efficiencies and reduce costs. The combination of best practice process and procedure and continuous improvement efforts positions
the company to win new business opportunities in support of its vertical integration and cross-selling growth strategies.

Business History Highlights

Bases• Promoted bulk liquid and packaged gas supply
from plants located mainly in the southern
United States (1992–2004)• Expanded bulk gas supply with new and acquired
plants in California, Texas, Louisiana, Nebraska,
and Iowa (2004–2015)• Achieved a national supply network in the UnitedStates with the acquisition of Air Liquide assets(2016)• Established supply of on-site hydrogen throughthe acquisition of Linde's U.S. HyCO business(2019)

History
1983	Entered the gas business in the UnitedStates after then Nippon Sanso
acquired Matheson Gas Products, Inc.,
which has a proven track record as a
specialty gas manufacturer
Acquired Tri-Gas, Inc
1992
1999	Merger between Matheson Gas
Products and Tri-Gas
2004	Acquired six ASUs from Air Liquide
2006	Acquisition of BOC Helium business andLinweld Inc., one of the largest independent gas distributors in the United States2009	Acquired Valley National Gases, thelargest independent gas distributor in
the United States, to expand cylinderbusiness area nationwide
2010
Acquired Western International,
the largest wholesale supplier ofacetylene in the United States
2014	Acquired Continental Carbonic
Products, a major U.S. carbon dioxide
manufacturer, and made a full-scale
entry into the CO2 and dry ice market
2016	Acquired 18 new ASUs and businessassets from Air Liquide
2019
Acquired Linde’s U.S. HyCO businessCorporate headquarters
ASU
Carbon dioxide plant
Nitrous oxide plantOperating base

Results for the Fiscal YearAs always, our top priority is the safety of our team, our customers, and our communities.
We routinely conduct site safety stand downs to address specific opportunities to improve
our safety performance, and in FYE2022 we implemented monthly Senior Manager Safety
stand downs to ensure the Safety Imperative message is communicated through our mostsenior managers to their operations at the site level. The productive dialogue in these
discussions has shown very positive results in improving the organization’s safety record.
The inflationary pressures on all economies this past year are well known and MTG
has put close attention on cost management delivering over a 6% reduction in ourcontrollable cost stack. We have worked hard to secure profits by timely and appropriate
cost recovery through surcharge programs and margin preservation through pricing
management to offset cost items that are uncontrollable.
Lastly, MTG has placed more focus on ESG priorities, assigning management and across-functional team to guide our response to our obligations to protect and improvethe environment, meet social responsibilities, and comply with governmental and corporate regulations and guidelines.
As a result of these initiatives, revenue was ¥224.8 billion (up ¥34.8 billion year onyear) and segment profit was ¥27.3 billion (up ¥4.1 billion year on year).

NIPPON SANSO HOLDINGS CORPORATION46

INTEGRATED REPORT 2022

We Aim to Foster Groupwide Productivity
through the Promotion of Standardization and
Optimization of the Group’s Operations Based on
Shared Best Practices.
Thomas Scott Kallman
Member of the Board, Nippon Sanso Holdings Corporation
Chairman and CEO, Matheson Tri-Gas, Inc.

Current Analysis and Future Outlook
MTG has experienced a period of tremendous growth since 2005, delivering a compounded annual sales growth rate of over
12% and operating profit of over 20%
fueled partly by strategic acquisitions andcapital projects and partly by our bestpractice and continuous improvement
culture and disciplined implementation of
our sales model. Our compounded annual
growth rate the last five years has been
almost 8% for sales and over 16% foroperating profit. We are very excited tocontinue to strengthen and expand thebusiness by optimizing our current business
unit results and engaging the market for
new acquisitions and capital project investments that create profitable operating
leverage.
Looking ahead, on a fundamental level
we are focused on further progress in oursafety performance, of course, with theultimate goal of zero injuries. We are also
placing particular focus on product delivery
obligations despite supply chain disruptions
and nationwide driver shortages in recent
years. In both cases, these safety and reliability challenges are receiving intenseemphasis from our entire Team. Additionally,close attention to timely and effective pricemanagement is a high priority to help sustain
our margins despite the erosion due to
inflation pressures.
Strategies in the New Medium-Term
Management PlanAmong the five focused fields of the new
medium-term management plan NS Vision
2026, MTG will place additional weighton sustainability, total electronics, andoperational excellence as areas we canmake the most significant contributions.
Sustainability management is core to operating in a socially responsible fashion as it
impacts our shareholders, customers, communities, teammates, and families. MTG is
an important contributor to the NSHD Total
Electronics effort and also relies heavily on
our Total Electronics teammates in Japanand South Korea for their support in thisfield to make the NSHD Total Electronics
offering especially competitive. Operational
excellence is essential to maintaining ourcompetitiveness in the U.S. market. We aim
to foster groupwide productivity throughthe promotion of standardization andoptimization of the Group’s operations
based on shared best practices.
Toward Achieving Financial KPIs
Our business is separated into our Industrial
Division and Electronics Division, for which
both set safety and quality excellence as thefoundation on which the businesses drives
profitable growth. In our Industrial Division,close management of cost, price, andcontract terms combined with active crossselling activity allow the best opportunities
to achieve our financial KPIs. The Electronics
Division also closely manages its costs,
pricing, and contract terms but also puts
extensive effort into product differentiation
to improve competitiveness and justify
premium pricing based on increased value
our products can provide to the customer.
In general, we are committing resources toimprove the recruiting process and sales
training processes to establish both as truecompetitive advantages in the marketplace.
In addition, we view development of our

NIPPON SANSO HOLDINGS CORPORATION

47

on-site and pipeline capabilities to be an
attractive longer term opportunity to generate more stable and profitable growth.
Sustainability Strategy
MTG’s approach to sustainability is pragmatic and measurable. We continuallyassess new vehicle technology for performance enhancements that enable safer andmore efficient operation. Similarly, we arelooking for novel water treatment advancements that could save chemical and water
consumption. In the case of power, fuel,and water, we have established baseline
measurements against which we can trackprogress against reduction targets.
By leveraging automation technology todesign safety and quality assurance into
core business processes (dry ice ops, cylinder filling, plant operations, and logistics),
we not only improve efficiencies and quality
but more importantly reduce the risk of
injury for our team. In support of this effort,
we have established a team of automationengineering specialists.
Lastly, compliance with MTG policies
and government regulations is supported
through required training across the entire
organization. Specific training includes
adherence to our Code of Conduct, delegation of authority and corporate safety,
quality, and HR policies.

INTEGRATED REPORT 2022

OUR STRATEGY

Strategy by Segment

Gas Business in Europe
Message from Director in Charge of the Gas Business in Europe

Outline of Business
The business strategy of Nippon Gases Euro-Holding S.L.U. (NGE) is based on the excellence of our people. Our employees workwith our customers to help them achieve their business goals, including their sustainability goals. Following our business strategy, in
FYE2022 we accelerated and strengthened various initiatives and programs to improve our talent attraction and retention capabilities. Some examples are the extended online learning package, our continuously improved performance process, the “Growing Our
Leadership” training, the “Talent Pipeline and to Watch” programs, “Female Sponsoring,” and “Succession Planning.” The excellent results of our recent employee engagement survey show that we are on the right track.
Our strategy of People Excellence, Reinforced Governance, Operational Excellence, Optimized Base Business, and Profitable Growth,builds on our current solid situation, as a company, in Europe: A profitable business, with a sizable market share, a lean, agile, andflat organization, and a highly experienced staff and management. There are differences between the regions, where we do business, in terms of size, assets, employee population, and market share, so that implementation of the strategy may differ to meetour goals. The strategy is European, the execution local.

Business History Highlights• On-site supply (piping) to several majorindustrial areas in Europe (Belgium, Germany,
Italy, and Spain)• Growth in bulk supply throughout
Europe based on customized applications
technology offerings for our customers inmany diverse markets

Bases
Head office
Major company bases
Sales office
ASU
Operational base
CO2 terminal• Recently started up a new ASU in Norway tosupport the aquaculture industry and a liquidcarbon dioxide terminal in Ireland to optimize
CO2 supply chain•C ustomer focus and productivity are at the rootof our financial results• E xpansion of our health and homecare offeringin Italy

History
In December 2018, our company acquired theindustrial gases European operations from the
U.S. company Praxair. This included businesses in
Belgium, Denmark, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden,
and the United Kingdom. We are currently
expanding our European operations under the
NGE brand.

Results for the Fiscal Year
Our safety performance has received four major awards from the European Industrial
Gases Association, including the award for the safest company in Europe. Our company
has received this award 9 times in the last 10 years. We have also had an excellent
compliance year.
Financially, NGE achieved better results than budgeted. Revenue was ¥209.7 billion(up ¥49.7 billion year on year) and segment profit was ¥26.3 billion (up ¥5.2 billion
year on year).
In information technology, we have focused on cybersecurity and DX introducing
state-of-the-art technologies. In productivity, we achieved record savings by executing
more than 1,000 projects.
As part of the decarbonization strategy of NSHD, NGE has been working on market
trends, technologies, competitors, and regulatory reforms. In Operations, sustainability isa cornerstone of our business strategy, strongly increasing the renew­able energy share of
our consumption. We also reduced the carbon foot­print of our logistics operations. AII
our sites are included in the zero waste program. In engineering, NGE had a strong
collaboration with Taiyo Nippon Sanso and Matheson Tri-Gas.

NIPPON SANSO HOLDINGS CORPORATION48

INTEGRATED REPORT 2022

We Will Focus on the Excellence of Our People
to Both Optimize Our Core and Our Operational
Excellence, while Reinforcing Our Governance.

Eduardo Gil Elejoste
Member of the Board, Nippon Sanso Holdings Corporation
Chairman and President, Nippon Gases Euro-Holding S.L.U.

Current Analysis and Future Outlook
In the summer of 2021, due to an increasein demand of natural gas across the world
and tensions related to the supply of natural
gas to Europe from the Russia-Ukrainiancrisis starting in February 2022, the natural
gas price in Europe increased dramatically,
with a significant impact on electricity price,which reached record prices above €200/
MWh. This energy crisis created an inflationary environment in Europe resulting in a coststack increase for NGE of more than 20%
over our original budget. NGE offset thisincrease through price increases, surcharges,
and productivity actions, negotiating andworking closely with our customers to passthrough these unprecedented costs andachieving the budgeted operating profit.
The record price of natural gas also
caused a large problem for European
ammonia producers, causing a shortage ofCO2, a by-product of ammonia production.
Our teams negotiated temporary surcharges
with our CO2 customers to cover theincreased CO2 costs during the crisis.
Originally, the unprecedented natural
gas and electricity prices in Europe wereconsidered to be of limited duration, withexpert analysts predicting a return to“normality” starting April 2022. This hopewas destroyed with the Russia-Ukrainiancrisis starting in February 2022. Current
predictions are that the “abnormal” costsituation will continue in 2023. NGE willcontinue to work with customers, suppliers,and partners to offset a cost situation significantly higher than expected when the budgets were approved.

Strategies in the New Medium-Term
Management Plan
During the new medium-term management
plan, we will execute the following strategies:• Optimize our base business• Focus on people excellence• Reinforce governance• Optimize operational excellence• Profitably grow more than the market
We will focus on the excellence of ourpeople to both optimize our core and ouroperational excellence, while reinforcing
our governance. This will allow us to growprofitability, ahead of the market, thereby
contributing to the slogan of NS Vision
2026, “Enabling the Future.”
Toward Achieving Financial KPIs
We will steadily grow our core operating
income from FYE2021 to FYE2026. We will
increase profitability indicators such as core
operating profit margin and EBITDA margin
by FYE2026.
To achieve our goals, we will execute thefollowing strategies:• Grow our volumes with existing and newcustomers on their way to carbon neutrality• Deliver products with decreased overall
carbon footprint• Deliver products to customers with lower
cost per tonne, enabling margin expansion• Through a combination of initiatives toincrease productivity and earn customers’
trust, implement pricing strategies thatwill offset the additional cost to ourbusiness

NIPPON SANSO HOLDINGS CORPORATION

49

Sustainability Strategy
Our NGE Group vision is that of the NSHDGroup: “We aim to create social value
through innovative gas solutions that
increase industrial productivity, enhance
human well-being, and contribute to amore sustainable future.” Accordingly, we
will be focusing on the following:• Climate change, innovation, and technology: Focusing on realizing carbon neutrality and increasing energy renewablesources• Environment: Managing the use ofresources, productivity programs, andwaste management programs• Safest operations• People: Increasing employee engagement,
diversity and inclusion, and community
engagement• Compliance: Ethics and integrity.

INTEGRATED REPORT 2022

OUR STRATEGY

Strategy by Segment

Gas Business in Asia and Oceania
Message from Director in Charge of the Gas Business in Asia and Oceania

Outline of Business
The Group’s business in Asia and Oceania started in earnest from Singapore in 1982. By the 1990s, this initial foray had been followed by expansions into Malaysia, China, South Korea, the Philippines, Taiwan, Vietnam, and Thailand. In the 2000s, we continued
expanding into India, Australia, Indonesia, and Myanmar. We have defined China, Singapore, Malaysia, and Thailand as stable
markets, which have long histories of industrial development and sufficient build up supporting industries. We will steadily increase
the profitability of our existing businesses centered on the bulk gas business, while pursuing sales and investment opportunities in
the growth industries of semiconductors, electronic components, biotechnology, and food. We also expect environment-related
business opportunities. On the other hand, we see Vietnam and the Philippines as growth markets, where we will steadily execute
investments for the future through concentrated investment of management resources, aiming to expand our solid foundation
there. East Asia plays an important role in the Group’s total electronics business. We will increase our competitive advantage andservice level in this region, including enhancing the local manufacturing capacity for semiconductor materials gases, and promotemeasures to expand the scope of our business.

Business History Highlights• Contributed to industry development by strengthening industrial gases supply capacity in step witheconomic development• Established supply chains since 1990 covering
each region in East Asia, where the global semiconductor industry is concentrated• Centralized information about global electronics
users and developed the total electronics system
for timely and appropriate proposal and promotion of the required gases• Developed the industrial machinery and safety
equipment business, centered on Southeast Asia
• Responded to increased demand in Australia andThailand by developing the LP gas business forindustrial and consumer use

Bases

Regional headquarters
Operating base
ASU

History
1982	Established National Oxygen Pte. Ltd.
in Singapore
1993	Established Dalian Nippon Sanso Guangming
Gas Co., Ltd. in Dalian
1994	Capital participant in Ingasco, Inc.
in the Philippines
1995	Established Matheson Gas Products
Korea in South Korea
1996
Established Nippon Sanso Taiwan Inc.
1998	Capital participant in Vietnam Japan Gas
Co., Ltd. in Vietnam
2002	Established Taiyo Nippon Sanso Trading(Shanghai) Co., Ltd. in Shanghai, China
2003	Established Shanghai Taiyo Nippon
Sanso Gas Co., Ltd. in Shanghai, China
2010	Investment in K-Air India Gases Pvt. Ltd.
in India2012	Made Leeden Limited of Singapore into
a subsidiary2013	Established PT Samator Taiyo Nippon
Sanso Indonesia in Indonesia
2015	Acquired Renegade Gas Pty Ltd in Australia
Made Air Products Industry Co., Ltd. in
Thailand into a subsidiary2016	Established Taiyo Nippon Sanso
Myanmar Co., Ltd. in Myanmar
Acquired Taiyo Gases Co., Ltd. in Thailand

Results for the Fiscal Year
In Singapore, an increase in demand for semiconductor materials gases and nitrogen gas
is expected as large-scale investments in the areas of electronics and chemistry continue.
In December 2021, we completed construction and commissioning of a nitrogen gas
generator in the chemical and biochemical industries in western Singapore. In Malaysia,
to keep pace with increasing local economic growth, we expanded carbon dioxide production and started a dry ice manufacturing business. In Vietnam, we completed an
on-site project for a petrochemical manufacturer, expanding our business base evenfurther. In the Philippines, we maintained a solid supply of medical oxygen during the
COVID-19 pandemic in response to the request of the national government as a leading
manufacturer of liquid oxygen. In Thailand, we installed additional ASUs in Rayong
Province and started operations. In Australia, while our LP gas business is expected tocontinue performing steadily, we also grew sales in our bulk gas and carbon dioxidebusinesses as part of business diversification. In East Asia, the electronics business continued to see brisk demand from semiconductor-related customers driven by a move toward
domestic semiconductor production and an increase in demand for use in data centers.
Production increases by major customers also provided impetus, leading to significant
growth in sales volume.
As a result of the above, revenue was ¥123.5 billion (up ¥21.4 billion year on year)
and segment profit was ¥12.8 billion (up ¥3.9 billion year on year).

NIPPON SANSO HOLDINGS CORPORATION

50INTEGRATED REPORT 2022

We Will Continue to Make Aggressive Capital
Investments in the Asia and Oceania Region in Line
with Its Expected High Growth and Increase in
Business Opportunities in the Environmental Field.
Tsutomu Moroishi* The Oceania and Asia Management Division
has been established within the Group
Corporate Planning Office to oversee businesspromotion for companies in Asia and Oceania

Senior Executive Officer,
Group Corporate Planning Office*Current Analysis and Future Outlook
With the global spread of vaccines from2021, the economy of the Asia and Oceania
region is gradually returning to is preCOVID-19 condition. GDP growth in China,
India, and the five major ASEAN countries is
expected to be 5.9% in 2022, a high levelcompared to the 3.9% growth projected foradvanced countries (data as of January 2022).
Increase in demand as represented by GDP
growth shows a recovery in demand for bulk
gas in all countries in the region comparedto the previous fiscal year, and the trend has
continued to increase since April 2022.
The Gas Business in Asia and Oceania ischaracterized by the high ratio of the electronics business. The region is currently
seeing rapid expansion of the semiconductor
industry, which is fueling steady growth indemand for semiconductor materials gases.
The Russia-Ukrainian crisis has caused
concerns over the destabilizing of helium
sources. However, as stated above, theoverall trend is for economic recovery fromCOVID-19, and we therefore expect continue solid business growth.
In the bulk gas business, despite differencein the degree of growth in each country,
overall there is a common trend of continued
high-level growth and increasing economic
sophistication. In this environment, we
expect to see an increase in demand andbusiness opportunities for nitrogen usedin electronic components, chemicals, andbiotechnology, and carbon dioxide andhydrogen used in environmental applications.
In the electronics business, we will firmly
capture demand by conducting timely
expansion of manufacturing capacity inregions where there is demand, mainly for
products that are differentiated by ourtechnologies and safety features. At thesame time, we will improve distribution
services by increasing our warehousing andso forth. We will formulate and promotethese strategies by coordinating between
each of the Group’s regions, and managing
operations within the framework of theinternal regional organization, East Asia Total
Electronics.
As noted above, our policy is to continue
to make aggressive capital investments inline with expected high growth and anincrease in business opportunities in theenvironmental field.
Strategies in the New Medium-Term
Management Plan
Our comprehensive strategies for the Asiaand Oceania region are as follows:• Develop business with the goal of becoming the main comprehensive gas manufacturer in each country within the region• Initiate measures for realizing a carbonneutral society• Through productivity activities, firmly establish
measures for achieving efficient operations• Establish independent management structure within the region while clarifying
responsibility, such as adding management
functions to the Singapore regional holding company.
Examples of specific steps to be taken
include the following:• Continue strategic investments aligned withhigh economic growth within the region andexpand business with global customers• Expand the semiconductor materials gases
business by strengthening production
capacity, mainly in South Korea, Taiwan,
and China• Propose new products and services tomeet new demand, such as the medical
field and DXNIPPON SANSO HOLDINGS CORPORATION

51• Respond to environmental issues throughhydrogen supply and efficient use andreuse of carbon dioxide.
Through the above strategies and initiatives, we will increase our presence in the
Asia and Oceania region.
Toward Achieving Financial KPIs
To achieve our financial KPIs, we will focus
on shortening collection times for accounts
receivable. Through continuous efforts toright-size inventory and so forth, we will
increase operating cash flow and bolster free
cash flow, to enhance our capacity to repay
debt. We will be especially rigorous with ourmanagement of working capital and continue to monitor fluctuations in working
capital at each company in the region.
In other initiatives, we will continue toinvest aggressively by allocating investmentof operating cash flow within the region.
Sustainability Strategy
In the area of safety, we are aiming to
reduce occupational accidents, traffic accidents, and accidents resulting in property
damage by over 10% each fiscal year. In thearea of quality, we will strive to maintain andpromote quality management in line with
the Nippon Sanso Holdings Product Safety
and Quality Policy. In terms of the environment, we aim to contribute to the development of an environmentally friendly society
in every country. For human resources, wewill strengthen our regional network while
focusing on increasing the human resources
development capabilities of each company.
In governance, our aim is to maintain thecorporate culture of each regional operatingcompany while ensuring rigorous compliance and risk management.

INTEGRATED REPORT 2022

OUR STRATEGY

Strategy by Segment

Thermos BusinessMessage from Director in Charge of the Thermos Business

Outline of Business
The Thermos Business is operated by Thermos K.K. in Japan and its Group companies. Thermos K.K. has production subsidiaries in
Malaysia and the Philippines, and a sales subsidiary in South Korea. Furthermore, we have affiliated companies in China, the UnitedStates, and Germany, among others, and through our regional bases we have shipped Thermos brand products to over 120 countries around with world. We develop products and propose lifestyles tailored to the market characteristics of each country, as wellas the local customs and cultures.
Compared with the global market for vacuum-insulated bottles, the market in Japan is large in scale but also rather mature. In thisenvironment, Thermos K.K. has created a market for portable vacuum-insulated mugs, and continues to hold a high market share, with
the Thermos brand continuing to increase in recognition year by year. In the South Korean market, we established a sales company 10
years ago, and the brand has made steady headway by diversifying sales channels and increasing sales and profits.

Business History Highlights

Bases• Pioneered the stainless steel vacuum-insulatedbottle market, and led the shift from glass tostainless steel bottles• Launched Japan’s first sports bottles designed
for drinking directly from the bottle for cold
drinks. The popularity of these products createda new market• Strengthened lineup of portable vacuum-insulatedmugs (hot and cold use) and used promotions tofirmly establish a lifestyle of using personal bottles.
The JNL series, which led other companies inweight reduction, became a hit product withcumulative sales over 20 million units• Launched a portable food container for hot soup,which achieved strong market penetration due toa surge in the popularity of thermal cooking

Headquarters (Thermos K.K.)
Sales office
Manufacturing plant

Results for the Fiscal Year
History
1978	Nippon Sanso (the company name at
the time) developed the world’s firststainless steel vacuum-insulated bottle
1989	Acquired the Thermos Company of theUnited Kingdom, the United States, andCanadaLaunched the vacuum-insulated cooking
pot Shuttle Chef®
1998
Launched vacuum-insulated sports bottles
1999
Launched vacuum-insulated portable mugs2001	Established Thermos K.K. through a
corporate split from Nippon Sanso2009	Launched vacuum-insulated foodcontainers
2013
Launched vacuum-insulated tumblers
2014	Acquired German high-quality vacuuminsulated bottle brand, alfi
2018
Launched Thermos brand frying pans

Looking at results for FYE2022, sales increased atop growth in our expanded productrange of tumblers and frying pans against a backdrop of increased stay-at-home demand
due to the spread of COVID-19. On the other hand, sales of our core product, portablevacuum-insulated bottles, were level year on year, with performance not recovering froma sharp drop in 2020 caused by people refraining from going outside and a loss ofinbound tourism demand due to the pandemic.
By sales channel, while mass retailers have been reducing the size of their sales floors
for lifestyle goods, the company drove sales expansion by focusing on online channel
sales, including its direct sales online shop. It also added five direct sales stores, expanding the total number to 19, which contributed to expanding brand recognition byenabling direct contact with consumers.
With regard to products, as we proceed with development of new functional offerings, we have responded to rising demand for carbonated beverages and consumer
feedback asking for a way to keep carbonated beverages cold while carrying themaround, and in March 2022 we launched a bottle for carbonated beverages for the firsttime in about 20 years. We also conducted various promotional measures centered on
tumblers, frying pans, and vacuum-insulated food containers with the goal of promoting
understanding and use of our products by consumers.
In the South Korean market, we proceeded to launch new products tailored to the
local market, and also expanded sales by setting up our own website.
As a result, revenue was ¥26.8 billion (up ¥2.8 billion year on year) and segment profit
was ¥6.4 billion (up ¥1.2 billion year on year).

We Will Propose New Lifestyles and Create Markets
by Accurately Grasping the Changes to Consumer
Lifestyles, Consumption Patterns, and Market
Environment Due to the COVID-19 Pandemic.
Yuji Kataoka
Representative Director and President
Thermos K.K.

Current Analysis and Future Outlook
The prolonged COVID-19 pandemic has
extended over two years, bringing a significant shift in the mindsets and lifestyle ofconsumers during that time. These changes
appear to be firmly established now. We
have adapted our business to these changes
in society and the living environment, proposing lifestyles through products andexpanding sales of cooking utensils andtumblers. On the other hand, in addition torising prices for resources and a weakening
yen, both exacerbated by the Russia-Ukrainiancrisis, we also see stagnation in the Chinese
economy as significant risks in our market
environment that we must respond to.
Furthermore, as consumer purchasing
behavior changes, we will propose abundant
living and new lifestyles for the postCOVID-19 and with-COVID-19 scenarios by
diversifying our sales channels and offering
a wide-ranging product lineup. By empathizing with consumers to develop new
products that encapsulate their needs andinsights, we will continue to expand sales
through directly operated stores and online
channels. We will also enhance our mutualcommunication systems with consumers ina focused effort to cultivate loyal customers.
In our overseas business, we are looking
at expanding our sales bases to strengthen
the base of the Thermos brand in Southeast
Asia. We see rapid recovery from the

Vacuum-insulated portable mugs

NIPPON SANSO HOLDINGS CORPORATION52

INTEGRATED REPORT 2022

Thermos frying pan series

COVID-19 pandemic and increasing ourpresence as urgent priorities and willaddress them.
Strategies in the New Medium-Term
Management Plan
Under our management vision, “To growsustainably and become a value-creatingcompany that is trusted by all,” we have set
as our companywide priorities (1) strengthening proposal capabilities, (2) developing
and strengthening human resources,(3) increasing customer satisfaction, and(4) actively engaging with the SDGs. As wellas increasing our merchandising capabilities, we will also expand our product range
and sales channels to increase customer
experience value as we aim to cultivate andexpand the Thermos brand. We will propose new lifestyles and create markets that
accurately reflect the changes in consumer
lifestyles, consumption patterns, andmarket environment.
Toward Achieving Financial KPIs
Consumers’ lifestyles are changing dramatically and their needs are becoming more
complex, causing increased uncertainty in themarket. We recognize that it is important toeducate and develop human resources who
can act autonomously in this kind of situation. To this end, we will invest strategically in

NIPPON SANSO HOLDINGS CORPORATION

53

personnel education as well as continuing toinvest in research and development, advertising and promotion, and sales promotion thatare vital to the growth of our core business.
We will also proactively invest in developmentof systems such as DX as a means of reforming our operations. Furthermore, we will work
to increase our distribution efficiency torespond to expansion in volume as we growour earnings. The environment is a challenging one, but we will strive to maintain ouroperating profit margin through pricing
strategies that reflect the Thermos brand’s
capabilities and merchandising capabilities
in the market.
Sustainability Strategy
Based on our corporate philosophy of“Thermos continues to introduce new kindsof lifestyles that are agreeable to people
and society and also environmentallyfriendly,” we incorporate an awareness ofsustainability into management. We consider
the practice of sustainable management
and the provision of solutions to social
issues through our business to be the very
essence of our corporate philosophy, andwe will therefore promote ESG activities. In
terms of the environment, we will develop
energy-saving products that contribute to
reducing the environmental load of society
through heat insulation technology, as wellas promoting the proposal of environmentally conscious lifestyles. In other areas, forexample, we will focus on creating workplaces that provide a comfortable work
environment and a sense of worth andachievement in their work. Through these
activities, we will also contribute to theSDGs, earn the trust of our stakeholders,and increase corporate value, ultimately
leading to the growth of the company.

INTEGRATED REPORT 2022

OUR STRATEGYInterview with a Thermos
Product Fan!

Thermos BusinessIn 1978, our Company developed the world’s first stainless steel vacuum-insulated bottle using vacuum-insulation
technology cultivated in the industrial gases business and then began manufacturing and sales operations. In 1989,
Nippon Sanso acquired the Thermos business (manufacture and sales of Thermos brand glass vacuum-insulatedbottles and so forth) from U.S. company Household International Inc., thereby starting the history of the Thermos
brand in the Company. Then, in 2001, Nippon Sanso’s household goods business was split off to establish Thermos
K.K. Today, the company operates in over 120 countries and regions around the world. Thermos K.K.’s brand concept,“Thermos Magic,” expresses our aspiration of creating inspired lifestyles that offer better taste, immediate convenience, and heartwarming comfort by combining our vacuum-insulation technology flexibly with unique lifestylecomfort ideas.
In the Thermos business, we provide a product lineup to offer people delicious taste and convenience in various
situations that includes sports bottles and portable mugs. In addition, through these products we propose environmentally friendly lifestyles by saving energy, helping to realize a sustainable society. ( P.73)

Synergies with Thermos
Nippon Sanso Holdings retains Thermos K.K. in the Group forreasons such as its high profitability and cash flow generation
ability. In addition, it is also expected to grow by capturingchanges in consumer behavior, such as the trend promoting
personal bottles as a way to reduce single-use plastics.
Moreover, unlike the industrial gases business, the Thermos
business is Nippon Sanso Holdings’ sole B2C business, creating a broad range of contact points with general consumers.
We operate through almost every sales channel, including
retail stores and e-commerce, to provide customers with

opportunities to encounter our products in a range of settings. In the Thermos business, we have established a process
for receiving feedback directly from customers and reflecting
it in our manufacturing and development. We believe thatthese ideas can be deployed in the manufacturing, development, and customer service of the industrial gases business.
Nippon Sanso Holdings considers Thermos K.K. to be an
important member of the Group, and will continue to share
best practices between businesses going forward.

Strengthening Brand Capabilities

Thermos K.K. is an essential member of the NSHD Group,and there are many fans of Thermos products inside theCompany as well. We conducted interviews with employees to
ask them why they love Thermos products and what they
think about the Thermos business.

There are expectations ofThermos as a recognized brandamong consumers.

I am José Luis Chesa, external communications director at Nippon Gases
Euro-Holding, based at our European headquarters in Madrid. As the person
responsible for our brand—and a great enthusiast of it—and because of theenvironmental commitment in our company’s DNA, I am doubly proud tobe able to use one of our Thermos products for both coffee and water during
my work days in the office. The possibility to avoid wasting resources bothmaterial (plastic or paper cups) and energy (constantly reheating coffee),combined with the aesthetic beauty of the Thermos product portfolio, makethem a huge attraction for any employee of our group. To this must be
added the expected value of such a recognized brand in the consumer:
Reliability, quality, and flexibility—able to adapt to any lifestyle and use—
while respecting the values of the group to make life better.

José Luis Chesa
External Communications Director,
Nippon Gases Euro-Holding S.L.U.

My family and I can feelthe powerful thermal-retention

With its corporate philosophy of “Thermos continues to introduce new kinds of lifestyles that are agreeable to people andsociety and also environmentally friendly,” Thermos K.K. has
spent many years in product development, marketing, andsales activities to enable customers to have comfortable lifestyles. In addition, our product development has been recognized for its quality and reliability, drawing on the high safety
standards cultivated in Nippon Sanso Holdings’ gases businessto maintain a strong brand image. Moreover, we have earned
recognition for strong customer support and replacement
parts services that enable long service life of products after
purchase, helping to create a reputation for high quality associated with the Thermos brand.
Moreover, as part of its customer relationship management
activities, Thermos K.K. operates a membership organization
for Thermos fans, called “CLUB THERMOS.” The programorganizes events for members and original collaboration
projects with culinary researchers, and so forth, with the aim

NIPPON SANSO HOLDINGS CORPORATION

of providing opportunities for direct communication
with users. This is useful for new product development,
improvement of existing products, and marketing sales measures. We also conduct effective brand image promotions
by creating opportunities for customers to handle products
directly by opening corporate stores in shopping malls andother locations.

abilities of Thermos products.

I used Thermos products during club activities when I was at school, and I stilllove using them at home and at work after joining the Company. The 350 ml
portable mug sits neatly on my desk, and I have made use of the Soup Jarfor brining lunch from home, especially over the past two years when we’vebeen avoiding eating out due to COVID-19. My father also uses a special
outdoor bottle for his hobby of mountain climbing. My family and I can feelthe powerful thermal-retention abilities of the products. When I see Thermos
products used not only in-house as gifts for visitors or our own use whenworking at our desks but also at the forefront of vacuum-insulated bottles
and cooking utensil markets, I feel delighted at their achievements as an
employee of the NSHD Group.

Haruna Yasukuni
Administration Section, Administration Department,
Kyushu Regional Branch
Taiyo Nippon Sanso Corporation

CLUB THERMOS54

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION55

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

The NSHD Group is focusing on sustainability management as one of the focusedfields of the medium-term management
plan NS Vision 2026. At the same time,
we are mindful of our recently revisedmateriality, and have started programs forvarious sustainability initiatives. These
programs will be conducted by operatingcompanies in each region, while Nippon
Sanso Holdings manages their progressstatus appropriately and proactively
discloses it to strengthen and enhance
our initiatives for resolving issues.
As “The Gas Professionals,” the Groupaims to achieve sustainable growth andfurther increase its corporate value by providing innovative gas solutions to enhance
human well-being and contribute to amore sustainable future.

Norwegian marine aquaculture facility

SECTION 4

Filling a hydrogen-fueled racing carOUR
SUSTAINABILITY
The Nippon Sanso Holdings Group’s
Sustainability Initiatives

Wastewater treatment

NIPPON SANSO HOLDINGS CORPORATION56

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION57

INTEGRATED REPORT 2022

Bottles made in collaboration with the Institutefor Raptor Biomedicine Japan

OUR SUSTAINABILITY

Dialogue

Ideal Sustainability for the NSHD GroupAs social issues such as climate change and other environmental problems continue to mount, companies need torelate their businesses to resolving these issues and contributing to society in order to grow sustainably. Moreover,sustainability management has been put forward as one of the focused fields in the medium-term management plan
NS Vision 2026. Chief Sustainability Officer (CSO) Takeshi Miki invited stewardship specialist Shizuko Ohmi to discuss
the ideal sustainability for the NSHD Group.

The Need to Disclose Non-Financial Information
Thank you for joining me today. You have been
involved in ESG for some time, and I’ve been looking forward
to meeting you. Over the past few years, Nippon Sanso
Holdings has been strengthening its initiatives on sustainability,
but as we have only just gotten started I would be glad to hear
your thoughts and reflect them in our targets for the future.
To touch briefly on my own background, I joined theCompany in 2017 and was appointed CSO in 2019. I oversee
sustainability for the entire NSHD Group.
Ohmi Thank you for inviting me. For my part, I started mycareer as an analyst in charge of Japanese stocks at a foreign
securities company. From around 1997 to 2013, I was
assigned to the chemicals industry, and I have been following
Nippon Sanso Holdings since it was Taiyo Nippon Sanso
Corporation, learning about the Company through plant
visits and so forth. I participated in NSHD’s perception study*
in 2020, and I think that is how I came to be here with you
today. Currently, I am head of investment stewardship at
JPMorgan Asset Management (Japan). I hope to offer somecomments today that reflect various perspectives, including
those from Europe and the United States.
Miki Looking back at that 2020 perception study, what
was your image of the Company at the time?
Ohmi Taiyo Nippon Sanso, as it was named at the time,
showed a proactive desire to expand globally and have a
global presence, rather than staying closeted inside Japan,
and I felt this was extremely positive. The Company was also
expanding its business in tandem with various industries, andits multifaceted nature in that regard drew my attention.

Thank you for sharing that. We also received feedback pointing out that our disclosure of ESG-related information was a little thin, and I felt this when I became head ofsustainability. For example, on the environmental front, ourraw material for industrial gases is air, which we separate out
into oxygen, nitrogen, argon, and so forth. Since we don’t
use fossil fuels, our operations cause very little pollution to
the atmosphere, water, or soil. I think the reason for ourapparent lack of disclosure was simply due to the fact thatour business doesn’t cause a lot of environmental issues
to begin with. Furthermore, since the Company is mainly
involved in B2B operations, we didn’t sense a strong need
to appeal to consumers regarding our sustainability.
Ohmi So, in 2020, the Company’s volume of disclosure wasinsufficient, even though the Company was aware of this.
As you said, I think many Japanese companies probably had
the idea that even if they weren’t specifically talking about
it, they were doing it. In particular, unlike financial disclosure,non-financial activities are difficult to see from the outside,and so unless a company is actively disclosing that information, people on the outside won’t have any way to know
about it.

Miki

Takeshi Miki

Shizuko Ohmi

Senior Executive Officer,
Group Sustainability Management Office,and Chief Sustainability Officer (CSO)

Executive Director
Head of Investment Stewardship
JPMorgan Asset Management (Japan) Limited

NIPPON SANSO HOLDINGS CORPORATION58

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

Miki* An interview survey of analysts and fund managers who have participated in a financial
results presentation, in which a production company asks for their impressions andrequests on behalf of the listed company

59

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Dialogue:
Ideal Sustainability for the NSHD GroupOn the investor side, there is anincreasing trend of wanting to lookat both the environmental impacts
and the positive sides.

Dramatic Improvement in ESG Management over the Past Few Years
Now that I think about it, at the time we hadn’t even disclosed a GHG emission reduction target. We had formulated
various internal KPIs but hadn’t communicated them externally. Not communicating them is the same as not having
them, so this time we have set absolute values for our GHG
emission reduction target and announced them publicly.
We are also gradually responding to other items requiredby evaluating organizations.
Ohmi Over the past two years, you seem to have madeprogress on the environment, social, and governance, but my
impression is that you have made particularly good progresson governance. The Board of Directors has also been scaled
down, and you have increased diversity by including female
and non-Japanese members. Furthermore, at the recent
General Meeting of Shareholders you went even further andmade the majority of directors outside directors. In a global
context, a majority of independent members is considereda given for ensuring transparency and oversight over governance, but in fact few Japanese companies meet thisstandard. This means that NSHD is quite advanced among
Japanese companies. Looking at the environment and social,
you have comprehensively disclosed global human resource
data, along with a clear description of various policies. In
that sense, I believe you have made considerable progresson the environment, social, and governance over these
two years.

About three years ago, we started promoting thedisclosure of our information as a listed company, which has
only increased our sense of urgency in needing to advance
our ESG initiatives even more. One of the main reasons for thishas been the entry of Nippon Gases Euro-Holding S.L.U. into
the Group. Europe has an extremely high awareness of sustainability, and the NSHD Group has been invigorated by thejoining of our European company as this sparked a change in
our thinking.
In 2019, we expressed our support for the TCFD recommendations, and with the transition to a holding company
structure in 2020, we revamped our Code of Conduct andvarious policies. In 2021, we reformed our sustainability
systems, and established the Group Sustainability
Management Office. Then, with the announcement of our
medium-term management plan in 2022, we started ournon-financial programs and also became a signatory to theUnited Nations Global Compact. In the area of governance,
in 2021 we welcomed a female outside director aboard andin 2022 two of our five outside directors are women.
Ohmi You’ve taken a systematic approach I see. I believe thatyou are at the point of where you have agreed with the TCFD
recommendations and are now preparing to start the disclosures.
This represents significant progress from two years ago.
Miki We expressed our support in 2019, by we hadn’t
really prepared scenario analysis at that point, so we havedone so now with our new medium-term management plan.
Miki

Expectations for the Group to Unite and Deepen Cooperation to Achieve Its Targets
Miki Despite our progress to date, I think there are still
many issues to be addressed. For example, how will we talkabout our opportunities? We have declared our goal of
becoming carbon neutral and expressed our intention of
making a business out of reducing customer GHG emissions.
But, what specifically are we goingto do, and how? If we can answer
I would like us to take a wider view
these questions successfully andof domains related to sustainability
expand our business, then I thinkand eventually focus on other fields
investors will understand andas well, so that we can also appeal
support our efforts.
to investors in fields where we canOhmi I get the impression thatoffer a unique approach.
Nippon Sanso Holdings has beenhighly evaluated on its risk management, but that its overseas
competitors have been evaluatedhigher on their opportunities.

NIPPON SANSO HOLDINGS CORPORATION60

INTEGRATED REPORT 2022

Shizuko Ohmi
After positions at S.G. Warburg Securities, Lehman Brothers, andCredit Suisse Trust Bank, joined Amundi Japan in 2003. Assigned
head of the ESG Research Division in 2015. In 2020, jointed
JPMorgan Asset Management (Japan) Limited. Appointed Headof Investment Stewardship. CMA (Certified Member Analyst of
the Securities Analyst Association of Japan).

On the investor side, there is an increasing trend of wanting
to look at both the environmental impacts and the positivesides. For example, when themed funds screen for potential
investees by focusing on resolving environmental issues, theyneed to have sufficiently rational reasons. If the investee has
defined their environmental contribution, for example, andrecorded solid data based on their definition, then we areable to use that as grounds to select that company as one
that contributes to the environment. It is extremely important
to manage risks properly, but I would like to emphasize thatinvestors are also looking at the business opportunities.
Miki In our new medium-term management plan, we
have set out various action programs. The carbon-neutral
program is divided into two sections, I and II. In Carbon
Neutral Program I, we focused on how far we can reduce
the Group’s GHG emissions. In Carbon Neutral Program II,
we are thinking about how we can grow our business by
reducing our customer GHG emissions.
In our business related to hydrogen, which is drawing
attention as a form of green energy, we have used someassistance from our Global HyCO business to expand ouroperations even in Peru. Moreover, with oxygen combustion
technology, fossil fuel combustion becomes far more efficient, increasing the concentration of CO2 and making iteasier to capture. I believe there are business opportunities inthis area as well. We also have a carbon dioxide gas business,
which may lead to expansion of CCUS* as well. For now,
one of the points of the new medium-term management
plan is to think about what we can commercialize next andtry it out.

It seems that your past efforts are now beginning tobear fruit. We can sense management’s intentions in theclear targets that have been set out for them. I think giving
sustainability such an important role in NSHD’s business strategy and treating it as an essential aspect shows that theCompany has deepened its awareness in this regard.
Miki These days, our discussion has come to focus mainly
on carbon neutrality. However, there are a wider range ofareas in which we can contribute through sustainability.
Through industrial gases, the NSHD Group can contribute toareas such as health through the medical field and to reducing food waste by extending food preservation periods. I
would like us to take a wider view of domains related tosustainability and eventually focus on other fields as well, sothat we can also appeal to investors in fields where we canoffer a unique approach.
Ohmi The Company’s disclosure over these two years hasreally advanced. You have kept your sights firmly on yourtargets for materiality issues, and in various ways you have
prepared platforms for them. I therefore have high expectations that the whole Company working together will produce great results over the coming three years. In addition,
you now have a clear global management structure able toproperly discuss global sustainability strategies, and while
there are no doubt difficulties in terms of being a global
company, I am really looking forward to seeing all parts of
the Company working together with deeper cooperationto achieve sustainability targets.
Ohmi* CCUS: Carbon capture, utilization, and storage

NIPPON SANSO HOLDINGS CORPORATION61

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Sustainability Initiatives under the
Medium-Term Management PlanAs the world seeks solutions to global-scale environmental issues and a host of social issues, sustainability, as
represented by the SDGs, is becoming an increasingly important focus for company activities. Given this situation,in creating its medium-term management plan, which starts in April 2022, the Company has revised the materiality(material issues) originally formulated in 2015. (▶P.33)

Launch of Eight Non-Financial Programs In our new approach to materiality, we have identified three fundamental preconditions for the Company’s existence, namely,
respect for human rights, safety and security, and corporate ethics, and we have specified 21 material issues. To address theseissues, we have created eight non-financial programs that will run across the entire Nippon Sanso Holdings Group. Under the
medium-term management plan, we aim to strengthen and enhance our initiatives for promoting these eight programs with
the intention of contributing to the realization of a sustainable society. As we promote these initiatives, we will establish KPIs
as necessary, both for the NSHD Group and for individual operating companies, to drive our progress.

Further promotion of energy conservation and efficiency of energy use

Promotion of the use of renewableenergy and green power(1) R eplacement of air separation units(ASUs)(2) R eduction of electricity usage through(1) Switch to electricity companies withlow emissions coefficients

digital solution technologies(3) S treamlining of logistics and review

9% reduction

6,000 –

GHG emissions (Thousands of tonnes CO2e)

18%

Results

7,000 –

reduction
from
FYE201932%

reduction
from
FYE2019

5,000 –
4,000 –
3,000 –

ut

2,000 –

y

lit

ra

* Base year: The Gas Business in Europe and the U.S.
HyCO business have taken FYE2019 as a base year
along with the NSHD Group.
The figure for the volume of GHG emissions for
FYE2019, which is the reference value, shows theactual GHG emissions in FYE2019 plus the following: 1) estimated emissions of the Gas Business in
Europe in FYE2019 and 2) estimated emissions of
the U.S. HyCO business in FYE2019.

(1) Promote CO2 capture(2) Carbon offset through new technology,
forest conservation, and tree-planting
activities, etc.

(2) Purchase green power certificates(3) Introduce renewable energyof transport

GHG Emission Reduction Targets

Carbon capture and offsetsne• Corporate Ethics• Strengthening communication with stakeholders• Strengthening information security measures• Rigorous employee education and training• Prevent compliance violations• Detect compliance violations through disseminating andoperating the whistleblowing system• Dialogue with shareholders and investment analysts• Enhancement of information disclosure• Maintenance and improvement of information security
systems

GHG Emission Reduction Targets
FYE2026: 18% reduction FYE2031: 32% reduction (Base year: FYE2019)on• Initiatives to ensure safe and reliable supply• Reinforcement of quality assurance and management
systems• Sharing information on workers’ and other accidents
and best practices• Safety education• Investment for safety• Creation of environments to promote innovationand diversity• Embrace and motivate diversified talents• Promote cross-regional talent exchanges• Enhance successor development plans• Health management initiatives• Contribution to the medical field• Initiatives for resolving social issues• Provision of comfortable and prosperous lifestyle• Promotion of sophisticated ICT use• Strategic acquisition of intellectual property and promotion of use in business

KPI

rb

• Safety and Security• Product and service safety and quality• Respect for Human Rights• Sustainable supply chain• Diversity and inclusion• Development and maintenance of human resources• Employee and family health• Improvement of employee engagement• Contribution to regional and industrial development
as social infrastructure• Provision of comfortable and prosperous lifestyles• Coexistence with local communities• Improvement of productivity and promotion of
production optimization• Technology and R&D capabilities that support thecreation of customer value and social value• Pursuit of customer satisfaction• Promotion of initiatives for digital innovation• Protection and effective utilization of intellectual
property

Realizing carbon neutrality through technological breakthroughscaG• Providing products and services that contribute toresolving environmental and social issues• Climate change mitigation and adaptation• Effective use of resources and prevention of pollution• Conservation of water resources• Conservation of biodiversity• Development and sales expansion of products that
contribute to solutions for environmental and social issues• Reduction of GHG emissions• Further promotion of energy conservation and efficiencyof energy use• Promotion of the use of renewable energy andgreen power• Carbon capture and offsets• Appropriate waste management and recycling• Efficient utilization of water

Relevant SDGs

Aiming for carbon neutrality in 2050

d
ar

S

Principal Initiatives

Carbon Neutral ProgramⅠ

w
To

E

Materiality

Reduction of the Group’s GHG emissions

1,000 –
0–

FYE
2019

FYE
2022

FYE
2026

FYE
2031

2050

Reduce customer GHG emissions through environmental product offerings and applications

Carbon Neutral Program Ⅱ
The Group’s products and services will help to achieve a reduction in GHG emissions that exceeds theGroup’s own GHG emissions.
KPI(Lower customer GHG emissions through environmental product offerings and applications) >(NSHD group GHG emissions) (FYE2026)
Global GHG reduction through NSHD’s products and technologies

The main GHG emission reduction
contribution initiatives are as follows.

Realize a reduction in GHG emissions through environmental products,
offerings and applications*•O xygen-enriched combustion in blast
furnaces• H2 and NH3 combustion in industrial

GHG Emission Reduction Contribution
Total: 6,865 thousands of tonnes CO2e
FYE2022

Products and services
3,176 thousands of tonnes CO2e

FYE2021

Products and services
2,892 thousands of tonnes CO2e

furnaces•C arbon capture and utilization

Industrial gases
3,689 thousands of tonnes CO2e

Total: 5,066 thousands of tonnes CO2e
Industrial gases
2,174 thousands of tonnes CO2e

* Please refer to P.128 for a breakdown of environmental products, offerings and applications

NIPPON SANSO HOLDINGS CORPORATION62

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION63

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Sustainability Initiatives under the Medium-Term Management Plan

Reduction in waste emissions

Cultivating a culture of safety

Zero Waste Program

Safety First Program
Aim for world-class safety in the industrial
gases industry
As a group that handles various gases under high pressure,safety is a fundamental essential for our existence. We arededicated to continuing safe, stable supplies by further
promoting safety in accordance with our motto of “sellinggases is selling safety.” As a Group KPI, we will target alost-time injury rate (number of lost-time injuries per million
work hours) of 1.6* or lower, and strive to be a global
leader in safety.

Promoting the 3Rs (reduce, reuse, and recycle) andbuilding systems for waste reduction and resource
circulation
Promoting the 3Rs of waste processing is a requirement of
our times. We will set and pursue KPIs for each operatingcompany to reduce waste emissions and landfill volume.
For example, in the Gas Business in Japan, Taiyo Nippon
Sanso Corporation will work to halve its industrial waste
landfill disposal by FYE2026 under its new Halve Amountof Landfill Disposal (HALD) initiative.

* Targeting a reduction of around 40% from the average for FYE2017–FYE2021 (2.53)

Effective use of water resources

KPI

Sustainable Water Program

Lost-time injury rate: 1.6 or lower(FYE2026)

Specific measures for achieving the target• S haring information on workers’ and other accidents
and best practices• S afety capability by using DX, AI, and the IoT• S afety education/utilizing the Technical Academy• Investment for safety
At Taiyo Nippon Sanso Corporation, we are also
taking the following measures for safety in addition
to targeting the lost-time injury frequency rate:
 educe workplace accident rate•R•R
 educe the rate of vehicle accidents whiletransporting products•R educe the number of facility accidents•C CPS assessment (▶P.73)

List of Non-Financial Programs

S
G

Quality Reliability Program

Talent Diversity Program
Talent development strategies for sustainable growth
The Group intends to actively accept people of diverse
talents, cultures, and values, and to develop them as“The Gas Professionals.” We are making a concentrated
Groupwide effort in regard to participation by womenin particular and have set KPIs to measure this. We are also
promoting cross-regional talent exchanges.

Instilling corporate awareness of emphasis on
quality and enhance quality and reliability of theGroup’s products
As a corporate group dealing mainly in industrial gases,
we consider our unwavering quality commitment to be thestable supply of products that underpin a range of industries, and that because our product is an invisible gas,reliability is an essential quality that we must provide. We
will promote a culture that emphasizes quality by keeping
our important promises to customers and strive to further
raise awareness among employees. We will also aim toincrease the Group’s quality and reliability by promoting
the introduction of automation technologies.

KPI

FYE2022(Results)

FYE2026(Targets)

Rate of female employees

20.5％

22 . 0 ％Rate of female management posts

14.8％

18 . 0 ％Compliance penetration and enforcement

Compliance Penetration Program

Instilling corporate awareness of emphasis on quality• Quality ethics and compliance education• Quality audit program• Share information on quality complaints along withmeasures for remediation and improvement

Compliance training at all operating companies
The Group considers respect for human rights, safety andsecurity, and corporate ethics to be fundamental preconditions for its existence. To promote them thoroughly, we
conduct various forms of training to ensure that all
employees are aware of compliance and have a correctunderstanding of it. With a common understanding thatthe key to establishing compliance is ensuring that all
employees receive compliance training, we have set it as a
non-financial KPI in the medium-term management plan.

Promote the introduction of automation technologies• Automation of test, inspection, and analysis
recording• Digitalization of quality management system
Increase satisfaction of electronic materials
gases customers• Increasing customer satisfaction through the activitiesof the Semiconductor Specialty Gas Quality Committee

KPI

Rate of receiving compliance training: 100%
(FYE2026)

Non-Financial KPIs for the Nippon Sanso Holdings GroupNon-financial programs

Initiative

Carbon Neutral ProgramⅠ

Reduce the Group’s GHG emissions

Carbon Neutral Program Ⅱ

Reduce customer GHG emissions through environmental productofferings and applications

Zero Waste Program

Reduction in waste emissions

Sustainable Water Program

Effective use of water resources

Safety First Program

Reduction in lost-time injury rate, etc.

Quality Reliability Program

Reduction in number of claims about products, offerings
and applications

Talent Diversity Program

Utilization of diverse talent

Compliance Penetration Program

Compliance education and enforcement

NIPPON SANSO HOLDINGS CORPORATION

Increase human resource diversification and engagement

Initiatives for increasing reliability

Conservation of water resources
The NSHD Group has identified “conservation of water
resources” as one of its material issues, and aims toconserve water resources in its business activities throughthe efficient use of water. Specifically, we are working toeffectively use water resources and address water risk by
reducing the amount of water used in gas production
plants and so forth.

E

Initiatives for increasing quality and reliability64

INTEGRATED REPORT 2022

Environment

Human Resources

Reduction rate of GHG emissions (Base year: FYE2019)

Rate of female employees

18% (FYE2026) 32% (FYE2031)≥ 22% (FYE2026)
25% (FYE2031)

GHG reduced emissions through environmental product offer

Lower customer GHG emissions through environmental product offerings andapplications > NSHD group GHG emissions (FYE2026)
Safety Management

Compliance

Lost time injury rate

Rate of receiving compliance training≤ 1.6 (FYE2026)

100% (FYE2026)

NIPPON SANSO HOLDINGS CORPORATION

65

INTEGRATED REPORT 2022

Rate of female management posts≥ 18% (FYE2026)
22% (FYE2031)

OUR SUSTAINABILITY

Reporting Based on the Recommendations of the TCFD

Nippon Sanso Holdings expressed its support for the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)* in November 2019. The Group has been working to reduce environmental impacts and saveenergy, and to expand its lineup of products that contribute to reducing GHG emissions. Based on the recommendations of the TCFD, we are steadily carrying out these initiatives and phase in improvements to our relevant information disclosure. Recently, in conjunction with the announcement of NS Vision 2026, we conducted a scenario analysis
based on the TCFD recommendations and announced the results. Going forward, we will conduct internal improvement activities and work to increase the corporate value of the entire Group through dialogue with stakeholders.
* The TCFD announced its final recommendations report in June 2017, which recommends that all companies and other organizations disclose information about governance, strategy,
risk management, and metrics (indicators) and targets regarding climate change-related risks and opportunities.

Risk Management
We will construct a Groupwide risk management structure, and will identify, assess, and manage climate-related risks.
Climate change risk identification, assessment, and management process
Committees

Risk identification, assessment, and management• Global Risk Management
Committee• Global Strategy Review
Committee• Technological Risk Liaison
Committee• Construction of risk management system in Nippon Sanso Holdings Group companies to enable early discovery of long-term
risk, prevention, and rapid response in cases of risk materialization• Risk importance determined by occurrence frequency × Financial or strategic impact• Annual Global Strategy Review Committee meeting (Chairperson: CEO) to determine financial or strategic impact on business• Specific countermeasures for items determined by the Global Strategy Review Committee determined at the Technological Risk
Liaison Committee meeting held between Nippon Sanso Holdings and operating companies, then deployed globally

Governance Governance Structure for Climate Change Issues

The Company has established a governance structure forclimate change issues, and the entire Group is engaged ininitiatives on climate change. Up until now, sustainability
initiatives have been promoted under the supervision of the
Chief Sustainability Officer (CSO). Moreover, in November
2021, the Company established the Group Sustainability
Management to provide general oversight of sustainability
activities such as deliberation and formulation ofclimate change-related strategies and risks.

Board of Directors

Reporting

Metrics (Indicators) and Targets
In the medium-term management plan, we will set out indicators and targets to be used for assessing and managing risks andopportunities, then use them to evaluate our progress.

Supervision
Representative Director, President CEO

Initiatives• Sustainability data (▶P.117)• Independent assurance report (▶P.129)• We disclose non-financial KPIs in our medium-term management plan (▶P.63–P.65).

• Eight sustainability programs and non-financial KPIs (▶P.63−P.65)

Management Committee
Global Strategy Review Committee
Global Risk Management Committee
Global Compliance Committee
Group Sustainability
Management Office

CSO

Signatory to the UNGC

Technological Risk Liaison Committee
Gas Business in Japan, Gas Business in the United States,
Gas Business in Europe, Gas Business in Asia and Oceania, Thermos Business

Strategy • For the transition scenario, the Sustainable Development
Scenario (SDS) of the International Energy Agency (IEA)
was used, and for the physical climate scenario, the Fifth
Assessment Report (RCP8.5) of the UN’s Intergovernmental
Panel on Climate Change (IPCC) was used as a reference
for impact analysis.
• The table below shows the results of our analysis and synthesis of the NSHD Group’s opportunities and risks andtheir possible impact on our procurement, operations, andproducts/services.

• Based on the TCFD recommendations, we identified opportunities and risks under the transition scenario (under 2°C
scenario) and the physical climate scenario (4°C scenario),then performed an assessment of the opportunities andrisks, mainly for the gas business, in each region based on
an indicator of “potential for impact” × “magnitude of
impact.” Significant negative financial impacts to theCompany were considered to be risks, while positive
impacts were treated as opportunities.

The Company is a signatory to the United Nations Global Compact (UNGC) and was registered as a participating company in January 2022. Nippon Gases Euro-Holding S.L.U. is also registered as a participating company. Companies andorganizations that have signed the UNGC observe and practice ten principles related to four areas. In doing so, we willfurther promote initiatives to make an even greater contribution to a sustainable society.
Four Areas and Ten Principles of the UNGC
Area

Principle

Human
RightsBusinesses should
Principle 1. support and respect the protection of internationally proclaimed human rights; andPrinciple 2. make sure that they are not complicit in human rights abuses.

LabourBusinesses should
Principle 3. uphold the freedom of association and the effective recognition of the right tocollective bargaining;
Principle 4. the elimination of all forms of forced and compulsory labour;
Principle 5. the effective abolition of child labour; andPrinciple 6. the elimination of discrimination in respect of employment and occupation.

NSHD Group’s Climate Change-Related Opportunities and Risks, Analysis Results, and Response
Type
Policyregulations

Financial
impactLargeBusiness risks

Business opportunities

Response/Actions by the NSHD Group<Medium to long term>• Decrease in profits due to increased tax burden<Medium to long term>• Acquire business opportunities by differentiating through early response• Increase introduction of renewable energy by power purchase agreement and green power
certificates• Promote the development of environmental product offerings and applications that contributeto low carbonization• Promote energy saving by improving productivity through the introduction of DX technology,
etc. (introduction of SAITEKI optimization of delivery)

Technology

Replacement to low-carbon
alternative products/Progress inenergy saving

Medium<Medium to long term>• Decrease in sales of existing products due to screening of low-carbon
products<Short to medium term>• Increase profit margin by energy saving• Increase in demands for existing products that contribute to low carbonization<Medium to long term>• Increase in business opportunities through environmental product offerings andapplications that contribute to low carbonization

Markets

Changes in market needs/
Changes in customers’ businessactivities

Large<Long term>• Decrease in sales due to changes in the manufacturing process of thesteel and chemical sector• Decrease in sales due to new entrants utilizing by-product O2 gas as
demand for water electrolysis process expands<Medium to long term>• Increase in demand for blue and green H2• Increase in demand for green fuels• Increase in demand for CO2 capture for CCUS

• Promote the introduction of carbon-free (H2, NH3) combustion technology• Expand the use of oxygen combustion• Acquire demand for medium-scale CO2 capture in response to CCUS
• Expansion of the H2 supply business by the HyCO business• Increase sales of environmental product offerings and applications that contribute to low carbonization

Reputation

Industry criticism

Large<Medium to long term>• Investor valuation decline for GHG emitting companies<Medium to long term>• Continue stable funding by demonstrating contribution to GHG emission reduction•D isclosure of quantitative data on GHG emission reduction contributions through integrated
reports, etc.
• Promote disclosure of non-financial information

Acute

Intensification of disasters/
Frequent typhoons/Heavy rain/
Droughts

Medium<Medium to long term>• Plant shutdowns due to disasters caused by abnormal weather• Increase in premiums paid

Chronic

Sea level rise/Rise inaverage temperatures

Small<Long term>• Narrowing of profit margin due to increase in running costs of air separation units caused by rising temperatures

Transition
PhysicalClimate change risks
Introduction of carbon pricing–<Medium to long term>• Increasing demand for medical products to treat diseases

NIPPON SANSO HOLDINGS CORPORATION

Disclosed details• We disclose Scope 1, Scope 2, and Scope 3 GHG emissions (▶P.117).

66

INTEGRATED REPORT 2022

Businesses should
Principle 7. support a precautionary approach to environmental challenges;
Environment
Principle 8. undertake initiatives to promote greater environmental responsibility; andPrinciple 9. encourage the development and diffusion of environmentally friendly technologies.
AntiCorruption

Businesses should
Principle 10. work against corruption in all its forms, including extortion and bribery.

• P romotion of disaster countermeasures•U se of insurance• R eplacement of aging air separation units to reduce running costs• P rovision of medical oxygen, etc.

NIPPON SANSO HOLDINGS CORPORATION67

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Sustainability Topics

Japan

Initiatives toward the Realization of a Carbon-Neutral Society through Hydrogen/Ammonia and Oxygen Combustion Technologies

Taiyo Nippon Sanso Corporation is working to develop an oxygen burner thatcan efficiently increase the temperature inside a furnace. The company’s
product lineup includes SCOPE-Jet®, a burner developed to reduce the rateof power consumption and increase productivity for the electric arc furnacesteelmaking industry, which consumes large amounts of electric power, byreducing production time through a higher burner flame temperature createdwith oxygen. In March 2021, the company developed the new SCOPE-Jet®
SCAN, which combines oxygen applications (gas-using equipment and technology) and a laser gas analyzer unit. SCOPE-Jet® SCAN uses real-time analysis values to control the feed amounts of oxygen, fuel, and carbon, increasing
the efficiency of oxygen usage, which is also expected to reduce CO2 emissions. Going forward, the system will be introduced mainly into electric arc
furnaces, and the company will work on developing even wider applications.

One of the challenges for realizing a carbon-neutral society is to build a supply chain for green fuels that do not emit
CO2 and develop the technology to use it. Specifically, a key aspect is the efficient delivery of green fuels from theirproduction site to their consumption site, and one method is to make use of hydrogen (H2) and ammonia (NH3). By
combining this with oxygen combustion technology that Nippon Sanso Holdings has been researching and developing for over half a century, we will contribute to faster social implementation of green fuels.

Japan

Development of Fuel Ammonia Combustion Technology for Industrial Furnaces

Taiyo Nippon Sanso Corporation has been selected as the contractor fora project commissioned by the New Energy and Industrial Technology
Development Organization (NEDO) for development of fuel ammonia combustion technology for industrial furnaces. The aim of the project is todevelop ammonia combustion technology for industrial furnaces that are
unable to use ammonia in order to contribute to the decarbonization of theindustrial sector. Taiyo Nippon Sanso has a track record for various industrial
furnaces within and outside Japan, including oxygen burners for glass melting
furnaces. The project covers a five-year period from FYE2022 to FYE2026.
Taiyo Nippon Sanso is proceeding with development of ammonia-oxygen
combustion and oxygen-enriched combustion.

球状シリカ写真
Ammonia-oxygen combustion industrial furnace (glass
melting furnace)
原料

球状シリカ写真Japan

Joint Development of Spherical Silica Manufacturing Technology Using Carbon-Free Fuel

Spherical silica is used as a filler for semiconductor sealant. As the scope ofsemiconductor applications has expanded over the past few years, demands
regarding the quality of spherical silica have been increasing. The traditional
manufacturing method carries a risk of carbon contamination from fossil
fuels, which impairs insulating performance and reduces the reliability ofthe semiconductor. In February 2022, Taiyo Nippon Sanso Corporation and
Admatechs Company Limited developed a melting and spheroidizing technology using carbon-free ammonia-oxygen combustion to enable the production of high-quality spherical silica free from carbon contamination.

Japan

原料material
Raw

処理後
After processing

EuropeNIPPON SANSO HOLDINGS CORPORATION68

SCOPE-Jet® SCAN system overview

Confidential

NGE Signs a Collaboration Agreement with Sarralle toward Decarbonization of the Steel Industry

In December 2021, Nippon Gases Euro-Holding S.L.U. (NGE) announced abusiness alliance with Sarralle in the provision of engineering services regarding hydrogen burners, among others. Sarralle is headquartered in Spain, andis a leading company in engineering services in the steel industry and others.
ConfidentialUnder the alliance agreement, NGE will supply burner technologies andSarralle will work to install them for end users. Hydrogen burners use hydrogen as an energy source instead of natural gas, and are considered an important element for achieving decarbonization of industry. Furthermore, NGE
will collaborate with Sarralle to promote project opportunities for the use ofhydrogen burners and other industrial gases for the steel and other industries, including provision of gas application technologies.

Example of samples from spheroidizing technology

Initiatives to Promote the Use of Carbon Dioxide Gas

処理後
1

Carbon dioxide gas is used widely for retaining the freshness of food, carbonating beverages, and as a coolant in theform of dry ice and as a welding gas. To achieve a carbon-neutral society, it is necessary to collect CO2 and use it
effectively. The NSHD Group is working to develop such applications. Moreover, we will contribute by building a CO2
supply chain for CO2 applications that are seeing increasing demand.

Successfully Melting Glass Using a Hydrogen-Oxygen Burner to Drastically Reduce CO2 Emissions

In April 2022, Taiyo Nippon Sanso Corporation successfully conducted ademonstration test with 100% hydrogen combustion to melt glass using ahydrogen-oxygen burner jointly developed with Nippon Electric Glass Co.,
Ltd. The jointly developed hydrogen-oxygen burner can switch the mix ratioof natural gas and hydrogen as needed. In the demonstration test, it was
confirmed that the same melting capability could be obtained with either
combustion fueled using 100% hydrogen, or a mixture of both natural gas
and hydrogen, or only natural gas. This enables a significant reduction of CO2
emissions from melting furnaces.

Highly Efficient Oxygen Usage System SCOPE-Jet® SCAN

1Flame from 100% hydrogen combustion

INTEGRATED REPORT 2022

EuropeNGE’s Liquid Carbon Dioxide Carrier

NGE’s carbon dioxide business has a 19% share of the European market, andis the second largest in the region. The company operates three liquid carbon
dioxide carrier vessels to connect its 12 carbon dioxide gas plants with markets
in every region. The vessels can transport between 1,200–1,800 tonnes ofliquid carbon dioxide with each voyage, carrying approximately 300,000
tonnes per year. Furthermore, they are also used as floating storage tanks
during maintenance of the companies’ storage tanks or plants. Going forward,
NGE will continue to accurately comprehend the current and future status ofneeds by following consumption trends in Europe overall from an overhead
perspective as it continues to supply countries with carbon dioxide products
as necessary.
NIPPON SANSO HOLDINGS CORPORATION

69

Carrier vessel “Froya”

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Sustainability Topics

Initiatives to Promote the Use of Carbon Dioxide Gas
Japan

Installation of CO2 Liquefaction System for Demonstration Trial

Taiyo Nippon Sanso Corporation cooperated with Taiheiyo Cement
Corporation in the CO2 liquefaction process for the “Development of Carbon
Circulation Technology for the Cement Industry” project of NEDO. In
February 2022, the company established a CO2 liquefaction system at
Taiheiyo Cement’s Kumagaya Plant. The system will recycle CO2 emitted in
the cement manufacturing process as a resource for reuse as raw material for
cement and civil engineering material. Taiyo Nippon Sanso provided technicalcollaboration on a series of processes for liquefaction of captured CO2 in atrial demonstration of separating and capturing CO2 from cement kiln
exhaust gas.
Japan

Initiatives in the Medical Field
The NSHD Group promotes better quality of life for patients by contributing to testing and treatment through products and services in the medical field, such as homecare medical equipment and medical gases. In response to therapid spread of COVID-19 in recent years, we have been striving to provide a stable supply of ventilators and provided support for those using medical equipment for the first time, such as producing a helpful pocket guide. We
also contribute to advanced medical research with the automated cell cryopreservation system CryoLibrary® in thefield of cell cultivation, and stable isotopes such as 18O used as the raw material for a diagnostic reagent in positronemission tomography (PET), and 17O, which is used in a new form for magnetic resonance imaging (MRI).

Japan
Exterior of the CO2 liquefaction system

Start of Demonstration for Effective Use of CO2 Captured from Power Plants

Nippon Ekitan Corporation is participating in a demonstration test for making effective use of CO2 captured from coal-fired
power plants jointly conducted with Osaki CoolGen Corporation (a company jointly established by Electric Power Development
Co., Ltd. (J-POWER) and The Chugoku Electric Power Co., Inc.) and Sera Saien Co., Ltd. Osaki CoolGen aims to achieve innovative, low-carbon coal-fired thermal power generation by combining an integrated gasification combined cycle (IGCC) power
plant with CO2 separation and recovery. In the demonstration test, CO2 from an IGCC power plant of Osaki CoolGen, is
captured, liquefied, and transported and used to replace CO2 that has been used for accelerating photosynthesis in a tomato
greenhouse. It will contribute to realizing a carbon-neutral society by pursuing the possibilities for effective use of CO2.

The doubly labelled water (DLW) method is the only international
standard method able to measure with high precision the amountof energy expenditure of a subject under free-living activities, using
oxygen-18 and heavy water. Taiyo Nippon Sanso Corporation has
supported the spread of DLW and researchers around the world
through long-term supply of the stable isotopes (Water-18O and
D2O). In 2021, the results of an international research project into
energy expenditure supported by the International Atomic Energy
Agency were reported in the prestigious global academic journal
Science (August 13, 2021 edition), further highlighting this work.
EuropeSource: Sera Saien Co., Ltd.

Source: Osaki CoolGen Corporation

United States

Illustration provided by Dr. Yosuke Yamada of the National Institutes of Biomedical
Innovation, Health and Nutrition

Spanish Medical Equipment Manufacturer Joins the NSHD Group

Nippon Gases Italia S.r.l. acquired a majority of the share of the Spanish medical
equipment manufacturer Noxtec Development SL. This will enable the twocompanies to work together on technological improvements of medical
equipment used for nitrous oxide treatment. Nitrous oxide has a vasodilatory
effect in cardiopulmonary blood vessels, and is currently used to treat pulmonary hypertension. The inhaled nitric oxide therapy market is expected to growgoing forward. Both companies have a high level of technology and knowledge related to medical equipment development and medical gases, which
they will combine in an effort to further improve the quality of medical
equipment and services.

World

Use of CO2 in Wastewater Treatment

Contribution to Healthy Longevity Using Stable Isotopes

Noxtec Development SL.

The NSHD Group’s Contributions in the Global COVID-19 Pandemic

As COVID-19 infections surged globally, the NSHD Group supplied medical oxygen to meet a rapid increase in demand fromgovernment requests and so forth. We also strove to secure ventilators and pulse oximeters amid a spike in demand in orderto stably supply them to medical institutions. In other areas, we developed cryopreservation containers and provided dry ice
for transporting vaccines to support the cold chain and contribute to the medical front lines.

In this project, CO2 was used to treat wastewater instead of a process using
acid. The pharmaceutical company CSL Behring LLC used sulfuric acid for
wastewater treatment, but the strong acid caused various corrosion issues forequipment. Matheson Tri-Gas, Inc. responded to a request from CSL Behring
to propose a wastewater treatment system using CO2 and run a trial operation. The results far exceeded expectations, and led to a full implementation.
As a result, the corrosion issues were completely resolved, while achieving
adequate wastewater treatment function.
CSL Behring LLC

Supply of oxygen to hospitals

NIPPON SANSO HOLDINGS CORPORATION70

INTEGRATED REPORT 2022

Supply of oxygen to sanatoriums

NIPPON SANSO HOLDINGS CORPORATION

Cryopreservation containers for transporting vaccines Blood oxygen level meter (pulse oximeter)71

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Sustainability Topics

Initiatives for Food Issues

Thermos K.K.’s Initiatives

The NSHD Group aims to reduce food loss by proposing solutions to customers that use gas application technologies
to harness the properties of industrial gases. These include extending the preservation period of food by rapid freezing using liquid nitrogen (-196°C) and injecting nitrogen gas into food packaging to prevent oxidation and extend
shelf lives. We not only provide a stable supply of oxygen gas essential to the operation of marine and land-based
aquaculture industries but also contribute to highly efficient aquaculture operations with high stock densities andaccelerated growth through appropriate control of oxygen levels in water.

Thermos K.K. contributes to energy conservation through its insulation and various other technologies and its creative
capabilities, while creating new value that realizes comfortable lifestyles, guided by its corporate philosophy of“Thermos continues to introduce new kinds of lifestyles that are agreeable to people and society and also environmentally friendly.” Our bottles, tumblers, soup jars, and other products use vacuum-insulation technology to keep
food and beverages at the temperature where they taste best. This is convenient for people’s lifestyles, and also
contributes to reusing resources and reducing waste. We also proactively conduct initiatives with various industries,groups, and local governments aimed are realizing a sustainable society.

World

Advanced Gas Application Technologies Contribute to Initiatives to Reduce Food Loss

Nippon Sanso Holdings is also developing gas application technologies for reducing food loss. In Thailand, many local specialty
goods such as durians and mangos are exported to other countries. By rapid freezing these specialty goods, using liquid nitrogen,they can now be preserved for long periods without changing their taste, texture, color, or other properties. Fresh produce suchas fruit must be harvested within a limited period, and large amounts must be harvested at the same time. Rapid freezing technology using liquid nitrogen enables large quantities of produce to be processed without waste, helping to reduce food loss.
Furthermore, gases such as nitrogen, oxygen, and carbon dioxide can be injected into packaging of small snacks and cut vegetables to extend their shelf lives, with various ripple effects such as reducing food loss, improving production planning, andexpanding transportation range. Nippon Sanso Holdings will contribute to the resolution of various issues confronting the foodindustry through gas application technologies such as modified atmosphere packaging (MAP) and liquid nitrogen freezing systems.
Extending Shelf Life

Minimizing Damage

By controlling the composition of the atmosphere inside packaging,changes to the fresh flavor, nutrients, and aroma can be prevented
while also preserving the color and preventing deterioration.

Nitrogen gas does not pass easily through films, and can be used toprotect food from the load weight of other food and shocks during
the manufacturing process, transport, and on the sales floor.

Examples of
Increasing
the Number ofDays in Storage

Fish

Pizza

Castella cakeGas
packaging

8 days21 days

57 daysAtmosphericpackaging

4 days6 days11 daysPreservation
temperature

3°C or lower

3°C

30°C

Oxidation Prevention, Bacteria Control,
Freshness Preservation
We protect food using the different properties of each gas. For
example, nitrogen gas prevents oxidation and carbon dioxide gas
slows the increase of bacteria, while oxygen gas prevents meat fromchanging color (although color changes caused by quality deterioration will still occur).

Japan

In September 2021, Thermos K.K. concluded an “SDGs Partner” agreementwith B.LEAGUE professional basketball team ALVARK TOKYO Co., Ltd. At the
team’s home games during the 2021–2022 season, the two companies will
collaborate on the “Personal Bottle Promotion Project,” calling on spectators
to bring their own personal bottles to the games in an effort to reduce plastic
waste from PET bottles at the venue.

Japan

Durians, a local specialty

Retaining Shape and Form
Using packaging that seals the food and the gas only, the original
taste and texture of the food can also be preserved without losing
its shape.

 onducting Projects Aimed at Reducing Plastic Waste
Cat Sports Venues

President Kunihiko Hayashi of ALVARK TOKYO Co., Ltd. (left)
and President Yuji Kataoka of Thermos K.K.

Cooperation Agreement with Kumamoto City to Work on Preserving Groundwater

In March 2022, Thermos K.K. entered a Cooperation Agreement for Realizing
a Sustainable Society through Water with Kumamoto City. Kumamoto City is
working to preserve its groundwater and to promote use of personal bottles
and reduction of PET bottle waste as initiatives toward achieving the SDGs.
Thermos K.K. entered the cooperation alliance with Kumamoto City in order tosupport these efforts. The company is promoting the use of personal bottles
by city residents and producing and selling limited edition original design
bottles to promote participation in groundwater preservation activities, aswell as conducting a campaign to promote the use of personal bottles at
Kumamoto City-organized events.

Limited edition original design bottle

Safety Initiatives
Japan Creation and Use of CCPS Evaluation (High-Pressure Gas Version)

Rapid freezing system

Taiyo Nippon Sanso Corporation has developed its own accident intensity standards, based on the Center for Chemical Process Safety (CCPS) evaluation method* and in consideration of thepotential impact of high-pressure gases. The company evaluates accidents in Japan based on a five-level scale and five characteristics: (1) physical injuries, (2) property damage, (3) potential
impact of high-pressure gases, (4) environmental impact, and (5) social impact and media coverage. The evaluation results in an overall number of points by which the company quantifies intensity.
* This is a method proposed by the U.S. Center for Chemical Process Safety to prevent process-related accidents and disasters.

Effects of food gas packaging

Intensity

Characteristics
Potential Impact of High-Pressure Gases

Japan

Participating in Open Innovation on Cultured Meat

In October 2021, Taiyo Nippon Sanso Corporation participated in an open
innovation platform called the CulNet Consortium, hosted by IntegriCulture
Inc. The consortium is a platform aiming to achieve mass production of cellderived products such as cultured meat. Companies with strengths in various
areas, such as culture medium and culture tanks, participate in the platformto promote joint research. Taiyo Nippon Sanso participated with the goal ofdeveloping relevant gas application technologies, such as control of dissolved
gas and atmospheric gas in the cell cultivation process.

Environmental Impact

Social Impact andMedia Coverage

Potentially fatal
Impact on wide area off-site

Environmental response
costing ¥250 million
or moreSignificant impact on local community
Large-scale investigation and monitoring bygovernment, etc.
National media coverage lasting several news cycles

Leakage with the potential for
injuries
Impact off-site

Potential for serious injuries
Impact off-site

Environmental response
cost of between ¥100
million and ¥250 million

Local evacuation required
Investigations and monitoring conducted by
prefectural governments and police
Brief coverage by national media

Leakage with no physical injury
or property damage (including
minor leakage)

Potential for serious injuries
Site-wide impact on-site

Environmental response
cost of less than ¥100
millionRequest to evacuate residents living around theplant as a precautionary measure
Investigations and monitoring conductedby the company
Local media coverage

Internal damages of
Leakage with no physical injury but
Minor leakage with physical injuries or
between ¥2.5 million potential for property damage or otherproperty damageand ¥10 million
impact inside the facility–

No physical injury but impact
inside the facility

Short-term remedialaction requiredLong-term investigations or monitoring by thecompany not needed
Brief coverage by local media

Internal damages of
Minor leakage with no physical injuries
between ¥250,000
or property damageand ¥2.5 million–

Incident with no physical injuries or property damage
Explosion or fire: Sound of explosion and/or small fire
Rupture or destruction: Sound of rupture sound and/or
deformation

–

–

Level

PointsPhysical Injuries

Property Damage

Spewing and Leakage
Inert Gases, Flammable Gases

Spewing and Leakage
Flammable Gases, Toxic Gases

Spewing and Leakage
Specialty High-Pressure Gases

Explosion/Fire, Rupture/
Breakage, Other

1

27

Multiple job site deaths
Death of one or more persons off-site

Internal damages of¥1 billion or more

Potentially fatal leakage
Impact on wide area off-site

Potentially fatal leakage
Impact on wide area off-site

Potentially fatal leakage
Impact on wide area off-site

29Single job-site death
Multiple lost-time on-site injuries

Internal damages of Leakage with the potential for serious
between ¥100
injuries
million and ¥1 billion
Impact off-site

Leakage with the potential for serious
injuries
Impact off-site

3

3

Lost-time injuries affecting one ormore persons off-site
Lost-time injury affecting one person
on-siteInternal damages ofbetween ¥10 millionand ¥100 million

Leakage with the potential for minor
injuries
Leakage with the potential to cause
site-wide damage on-site

Leakage with the potential for minor
injuries
Leakage with the potential to cause
damage within the facility

4

1

Lost-time accident off-site affecting
one or more persons
Lost-time accident on-site affecting
one or more persons

50.3

First aid required for one or more
persons on-site–

Source: IntegriCulture Inc.

NIPPON SANSO HOLDINGS CORPORATION72

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION73

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

The Nippon Sanso Holdings Group’s Human Resource Strategy

Message from Head of the HR Division

The NSHD Group’s business is operated through the individual efforts and capabilities of approximately 20,000
employees worldwide. The Group Philosophy and Group Vision are deeply rooted in the Group’s regional operatingcompanies and Thermos. By promoting the development of human resources sharing the same values globally, we
aim to promote the development of the NSHD Group and the achievement of medium-term management plan
NS Vision 2026 together.

Basic Approach
We are approaching the third year since the
COVID-19 pandemic spread around the world.
I would like first to express my profound pride
and appreciation for the Group’s employees
worldwide, who have carried out their roles
as essential workers during this time andfulfilled the Company’s mission to society.
Our new medium-term management
plan, NS Vision 2026, started in April 2022.
Up until now, our plans have focused mainly
on profitability, but this plan adds to thattargets related to the SDGs, which are an
increasing social concern, as we reaffirm theneed for the NSHD Group’s business activities to help resolve issues for customers andsociety in general. To achieve the goals of
NS Vision 2026, each operating company
has planned a variety of actions, and theexecution of these depends solely on thestrength of our human resources. Moreover,to leverage this strength, it is important tocreate an environment that includes respectfor human rights, diversity, training systems,
and treatment systems, and to build a corporate culture in which people can be confident in their mental health safety.
Furthermore, as I am continually saying,
the core quality of human resources is integrity. This is an essential quality underpinningour corporate activities, including aspects
such as safety, which is of the highest importance to the Group. Without integrity, we
cannot earn the trust of any of our stakeholders, including investors. With integrity
providing a foundation, the Group will work
toward realizing a comfortable future forpeople, society, and the earth. To this end, I
believe it is essential that we secure, develop,
and circulate human resources who are able
to accept different regional values, customs,
and cultures, as well as diversity in terms ofgender, race, and so forth.

“The Gas Professionals”
Increasing engagement by sharing and understanding the Philosophy and Vision
Nippon Sanso Holdings’ Philosophy and Vision

Taiyo Nippon SansoGroup

Matheson Tri-Gas
Group

Nippon Gases
Euro-Holding Group

Asia and Oceania region
business company group

Thermos Group

Human resource exchanges and promotion of best practices
Basic values of health, integrity, and resourcefulness
HealthIntegrity

Understands the Importance of Occupational
Health and Safety: Looks after their own healthand helps create positive working environments

Earns Customer Trust: Exhibits a dedication
to reliable supply and quality assurance andresponds with sincerity

Displays a Positive Attitude: Has a positive attitude
and sees projects and work through to completion

Exhibits a Well-Formed Character: Maintains
an agreeable temperament and promotes mutual
trust and respect

Demonstrates Organizational Capabilities:
Uses communication to overcome limited personnel levels and maximize teamwork

Endeavors to Fulfill Responsibility to Society:
Works to comply with safety, security, and environmental standards, as well as with social norms

Resourcefulness
Knows the Customer: Responds to customers’
expectations and interests
Knows Himself/Herself: Works to realize personalgoals and acquire knowledge and skills crucial to aprofessional and strives to act independently
Knows Society: Strives to be open, grasp changes,
and looks to the future

The Nippon Sanso Holdings Group Philosophy has the tagline “The Gas Professionals.” To nurture such professionals with a senseof mission and a desire to contribute to society and the world, it is important to focus on the qualities of health, integrity, andresourcefulness. These values have been inherited by the Company from the time of its predecessor, the former Taiyo Nippon
Sanso Corporation. Each operating company will focus on these essential qualities, making reference to its own unique values aswell and modifying them into a concept that is easy to understand. Since health, integrity, and resourcefulness are shared by all
Group companies, including Thermos, which operates globally, employees say that they find them easy to understand.

Strategy for Improving Employee Engagement 
The NSHD Group is making a focused effort to improve
employee engagement by sharing and understanding theGroup Philosophy and Group Vision. As a group that operates globally, we have taken measures to advance employee
engagement such as promoting human resource exchange
programs, diversity and inclusion, and improving NSHD’s
personnel systems. From the perspective of diversity andinclusion, from FYE2023, we have set “rate of female

NIPPON SANSO HOLDINGS CORPORATION

employees” and “rate of female management posts” asnon-financial KPIs for the first time. We will not only strive toexpand opportunities for participation by female employees
but also to create an organization and systems befitting a
global company. In addition, with regard to improving
employee engagement, we are currently conducting a global
employee engagement survey, the results of which will bereflected in our human resource strategies going forward.

74

INTEGRATED REPORT 2022

Human Resource Exchanges
We are promoting the creation of a humanresource exchange system as an action planunder NS Vision 2026. We recognize thathuman resource exchanges is an extremely
effective means of encouraging innovation andincreasing work productivity. The Group has
already been promoting initiatives to enhance
its comprehensive capabilities by sharing thepoints where each operating company
excels, and this is starting to produce significant productivity gains. To make positivechanges in long-ingrained work processes, it
is important to share opinions with people
who have different values and gain new
insights from them. In several projects, suchas the drive toward carbon neutrality, theemployees of respective operating companies come together via networks to engage
in lively discussions. Talented employees
throughout the world use both real andvirtual formats to exchange views with one
another, enabling even better knowledge andresults for both companies and individuals. We
are therefore working to establish systems forcommunication to promote exchanges of
opinions. Regarding IT security, we havealready built an organization that assigns
the best people to the right positions acrossoperating companies. We consider thecontinued assignment of the optimal humanresources to each division in every organization of the NSHD Group to be the ultimate
human resource exchange.
Work Styles
Another important priority from the perspective of securing diversity and promoting
active roles for women is to enhance oursystems for creating comfortable working
environments. In the non-financial KPIs of
the new medium-term management plan,
we have included female employees as arate of female employees and a rate offemale management posts. The Group hasa high percentage of female employees andmanagers in Europe, parts of Southeast Asia,and at Thermos, while the percentage is low
in Japan and the United States. We will
create an environment, system, and training
programs to enable everyone to achieve
their fullest potential regardless of gender.
From another perspective, the spread of
the COVID-19 pandemic has led to various
discussions on productivity, mainly regarding
the pros and cons of work style-related
matters. In particular, with regard to remote
working, each company is thinking about
the balance of working remotely and in theoffice, seeking to find the best approachthrough trial and error in terms of productivity, innovation, and mental health. NSHD’s
HR Department will review work styles while
sharing best practices with its operatingcompanies, aiming to improve employees’
work–life balance and support each company and community in taking measures
suitable for their respective situations.
The Group has excellent talented humanresources all over the world. I am confident
that all employees will commit themselves
deeply to the Company’s Vision and Mission
and carry out their duties toward theachievement of NS Vision 2026, thereby
growing as people and contributing tosociety and the earth, working with pride
as “The Gas Professionals,” or Thermos
professionals.

I believe it is essential that we secure,develop, and circulate human resources who
are able to accept different regional values,
customs, and cultures, as well as diversity interms of gender, race, and so forth.

Satoshi Wataru
Senior Executive Officer ofGroup Human Resources & Corporate Secretariat Office,General Manager of Human Resources andChief Health Officer (CHO)
Nippon Sanso Holdings Corporation(Additionally appointed as General Manager of
Human Resources and Head of Corporate Unit,
Member of the Board, Senior Executive Officer,
Taiyo Nippon Sanso Corporation)

NIPPON SANSO HOLDINGS CORPORATION75

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Hot Topics in Human Resources

Asia and Oceania
In the Asia and Oceania region, Nippon Sanso Holdings Singapore Pte. Ltd. (NSHS) is the Group’s flagship company inSoutheast Asia and is expanding its human resource development initiatives to other operating companies in the area.
NSHS aims to build a talent pool* for a diverse team of “The Gas Professionals” by focusing on the development andeducation of leaders, managers, and employees; employee engagement; and nurturing diverse global talent.

Europe* Securing talent over the medium to long term as well as the mechanism for securing such talent

Nippon Gases Euro-Holding S.L.U. (NGE) has adopted safety, compliance, and diversity and inclusion as its conduct
guidelines. We run programs for supporting women and increasing awareness of the SDGs through NGE’s digital HR
tool, PeopleHub. NGE has a strongly rooted awareness that the foundation of its business strategy is “People
Excellence.” In FYE2022, we strengthened various initiatives and programs, such as the Women’s Sponsorship
Program and succession planning for attracting and retaining talent.

Next-Generation Leadership Development Program

Women’s Sponsorship Program

The next-generation leadership development program started with an online webinar format in April 2021 and is now in its
second year. Over a two-year period, approximately 30 next-generation leader participants develop the necessary competencies
for leadership using two programs—Nippon Sanso ASEAN+ Leaders Sandbox VR© and C-Suite-LED-Talk Series©. The courses
cover business strategy, engineering, safety, compliance, global trends in human resources, as well as the leadership competencymodel of “Managing Self, Leading Others.” The participants took part in a total of 15 webinars during the first year, which also
provided opportunities for discussion regarding measures for responding to a situation of increasing uncertainty, such as the
COVID-19 pandemic.

As a measure to promote diversity and inclusion, NGE launched the Women’s Sponsorship Program in 2020. By promoting thevisibility and growth of female managers, we aim to promote career mobility and to advance women to upper management. The
first program ran through to May 2022, with 15 participants, each assigned a sponsor from the executive management, including the CEO. The 15 participants were given opportunities for development, networking, and visibility through the PeopleHub
programs and through close sharing of information and opinions with their sponsors.

Participant
SponsorSudarat Klaipong

Wilson Tan

Daniela Savalli

José María Martínez Gallo

Supervisor, Purchasing Section, Admin
Taiyo Gases Co., Ltd.

Manager, Special Project, Engineering
Nippon Sanso Holding Singapore Pte. Ltd.

IT JDE Process Specialist
Nippon Gases Italia S.r.l.

European Operations Director
Nippon Gases Euro-Holding S.L.U.

I want to use the knowledge I have gained
from the program to make an even greater
contribution to the company.

I want to grow in step with the organizationand take my career to a higher level.

Through participation in the program, I was given an
opportunity to develop extremely important anduseful skills and capabilities for the future.

This structured program allowed both mentors andmentees from different nationalities, backgrounds,
and fields of expertise to learn from each other, andstart building a professional network.

I participated in the next-generation leadership development program with the goal of gaining opportunities for
self-improvement and effective networking. In the program, I was able to increase my knowledge by exchanging
ideas during discussion sessions, taking part in quizzes,
and viewing articles and videos about personal growth.
I was encouraged to apply what I learned in my actual
work, and this enabled me to acquire the skills needed fora leader to constantly push my own boundaries and maintain reliability. Through the program, I was able to connect
with like-minded people and exchange opinions in a directmanner, which I believe will lead to future innovation in
the organization. I want to grow in step with the organization and take my career to a higher level.

Participating in the next-generation leadership development program has given me opportunities to acquire coreskills to be an effective leader. Through the leadershipcompetency model of “Managing Self, Leading Others,”
I have learned various skills that I have applied in my dayto-day work. There were also sessions for me to learn
about global trends in the industrial gases industry, which
I was able to reseach on various topics and present to therest. In addition, I had opportunities to make friends andinteract with colleagues in different subsidiaries in the Asiaand Oceania region. As a Thai, I have come up against thelanguage barrier, but I am determined to use the knowledge gained from the program to make an even greater
contribution to the company. I look forward to progressing
my career even further at Taiyo Gases Co., Ltd.

NIPPON SANSO HOLDINGS CORPORATION76

INTEGRATED REPORT 2022

I was selected as one of a small number of participants forthe mentoring program for female employees. I decided
to join because I thought it would be a great opportunity
for my personal and professional development. I was able
to communicate with all of the participants in the program, and received comprehensive support from my sponsor. The sponsors take their roles very seriously and madeevery effort to help us improve our activities. Throughparticipation in the program, I was given an opportunity
to develop extremely important and useful skills and capabilities for the future, such as effective communication,
collaboration, and organization. On top of that I gained
visibility and expanded my network.

NIPPON SANSO HOLDINGS CORPORATIONIn this program, 15 female participants are assigned mentors
through a matching process. This structured program
allowed both mentors and mentees from different nationalities, backgrounds, and fields of expertise to learn fromeach other, and start building a professional network. The
main purpose of the program is to increase career mobility
and visibility for female employees at NGE, to provide aspace for promoting development opportunities, and toincrease diversity. Looking at Daniela, who participated in
the program, I feel that her ability to communicate effectively with customers and employees improved, enabling
resolution of internal conflicts and so forth. We look forward to having people with abundant professional knowledge participate in the program and create an environment
where they can develop their skills.

77

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Roundtable Discussion

What Opportunities Do NSHD Group Employees Have in Order toRealize Their Personal Goals through Business?
In the medium-term management plan NS Vision 2026, we have emphasized increasing employee engagement. With
the announcement of the plan, we conducted a discussion between five young employees who are actively working in
our four geographic hubs and the Thermos business and HR Department Manager Yasukazu Takada of the HR Division at
Nippon Sanso Holdings. The participants discussed their ideas regarding their sense of purpose in the workplace and realizing their personal goals through business. They also considered the kind of organizational culture that is needed toincrease employee engagement going forward.

r
hea
o
t
lad
.
as g views
Iw
r
u
o
y

Yasukazu Takada

Tomoe Nakamura

Gus Mustakas

Cristina Gutiérrez Domenech

Kane Dillon

Shota Suzuki

Manager, HR Division
Nippon Sanso Holdings Corporation

Gas Separation Development Dept.,
Yamanashi Technology Solution Center, R&D Unit
Taiyo Nippon Sanso Corporation

Regional General Manager,
Packaged Gas – East Zone
Matheson Tri-Gas, Inc.

Engineer, Packaged Gas Distribution
Nippon Gases España S.L.U.

Financial Accountant, Finance
Supagas Pty Ltd

Leader, Promotion Group,
Brand Strategy Division, President's Office
Thermos K.K.

What the young employees have learned through their careers
After that, my involvement expanded beyond storefront
promotions to include larger projects such as advertising andgeneral promotion. Today, I am the leader of the promotion
group, providing a wide range of operation support for public
relations, events, trade shows, and so forth. Through mywork, I have many opportunities to interact directly withcustomers. When I can see that our message has really gotten
through to consumers as a result of our branding and promotion, I feel a real sense of satisfaction.
Mustakas I have really been looking forward to this meeting.
Thank you for having me here. I joined Matheson Tri-Gas(MTG) when it acquired my previous company in the same
sector in 2016. This was one of the most significant andmeaningful events of my life. After joining MTG, I was in

Takada To begin, I would like to ask you to introduce yourselves and tell us about your career up to now. Also, pleaseshare some of the challenging experiences or things that you
have learned in your career.
Suzuki I joined Thermos as a new graduate in 2012. My firstassignment was with the Sales Division, where I was responsible for sales to customers such as home centers, supermarkets, and sports equipment mass retailers. In 2015, I was
assigned to the Advertising and Promotion Department,
where I was mainly in charge of storefront promotions, using
my experience in sales. Ever since then, I’ve learned to thinkand plan along the lines of how to capture retail sale spaces
as a brand and what message we want to communicate toconsumers, rather than simply focusing on one product.

NIPPON SANSO HOLDINGS CORPORATION78

INTEGRATED REPORT 2022

cost accounting, where I was responsible for formulating costmodels and so forth. After that, I worked as the manager ofa production division at another company, before transferring
to Supagas Pty Ltd to brush up my accounting skills again,
where I worked in management accounting and financial
accounting. I didn’t have much experience in financial
accounting, but Supagas gave me the opportunity, whichenabled me to acquire knowledge and build up skills in a new
field. In the five years since I started my career at Supagas,
the company itself has also grown significantly. When I wasinterviewed for Supagas, the interviewer made an impression
on me by commenting that Supagas is a small fish in a big
pond. I interpreted that comment to mean there would bemany chances to achieve significant growth. I love being able
to put my name on something that I have made and say withpride,“I am the person who made this.” I am currently feelingcharge of corporate sales of bulk gases for three years. Since
then, I have been working as General Manager of the U.S.
Eastern Region, a role in which I am responsible for meetingtargets on safety, quality control, compliance, and growththrough profitability. The most difficult challenge of my career
to date was responding to COVID-19; but I learned various
things through the process of facing difficulties, and I am
proud that we managed to continue our essential business
operations. MTG’s corporate culture has a deeply entrenchedemphasis on safety. Naturally, we take safety very seriously
both as a company and as a team, but when I consider that
this also helps indirectly to ensure the safety of each employees’ family, then I feel extremely fulfilled in my role.
Dillon I am very happy to meet all of you. After graduatingfrom university in 2011, I worked in a pharmaceutical company for about two and a half years, mainly in manufacturing

NIPPON SANSO HOLDINGS CORPORATION79

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Roundtable Discussion:
What Opportunities Do NSHD Group Employees Have in Order toRealize Their Personal Goals through Business?

fulfilled in my work in the accounting field, but I would also
be keen for the opportunity to be involved in a new field.
Gutiérrez Hello. Thank you for giving me this opportunity toparticipate. I joined the company eight years ago through aninternship while I was a university student. After completing
the internship, I spent five years working in the European Bulk
Distribution team working in standardization and optimization projects across Europe before moving one year ago to
the position I hold now. I currently work in the Packaged Gas
Distribution department at Nippon Gases España S.L.U. and I am
also responsible for some of our warehouses. As an example ofprojects I have been involved in the past that aimed to optimize
and standardize operations in the logistics field is the installationof onboard computers to save drivers’ work hours. In my daily
work, I am also involved in projects to reduce costs, improve
productivity, and ensure safety. I think I was quite lucky to start
my career in the European division, as I was able to meet people
from several cultures, share different approaches, and learn fromothers' experiences, absorbing knowledge in each interaction.
As I mentioned before, I started a new position a year ago, andit has been a big challenge for me to lead a new team during
the pandemic. However, even when it was difficult to meet inperson, we tried to keep our communication as close as possible,
and I think we have succeeded in building a robust team.

In the five years since I joined Taiyo Nippon Sanso
Corporation, I have been assigned to the R&D Unit, where mymain work is the design of the pre-purification adsorbers in
ASUs for factories and plants. Recently, I conducted a series ofexperiments to obtain a design standard for a new adsorption
material. By organizing that data, I also worked on creatinga standard that enables the Japanese ASU design teams to
make designs more easily. A major challenge for me recently
was participating in a joint development project with an outside company. There were two challenging aspects. The firstwas how to explain the specialist content in an easy-to-understand manner to people from completely different fields. I
made a real effort to maintain the quality of the specialist
content while observing the responses of the other person tosee if they had understood. The second was holding meetings
during the pandemic. We held meetings with outside companies online, but it was difficult to read people’s expressions,and often I could not tell if they had really understood or not.
Takada Thank you. The COVID-19 pandemic is unprecedented, and I am sure that everyone around the world has
been experiencing similar difficulties.
Nakamura

Realizing personal goals in different ways
travel distances and CO2 emissions as much as possible, andwe cannot take safety or compliance lightly at all. Moreover,for me it is also relevant to consider the working environment.
I believe it is extremely important that my team members feelthat they are listened to, respected, valued, and taken into
account when they are working. Another key point is that wemust never stop learning. I took up a new position in 2021,
and I want to keep learning every second of the day andtaking on new opportunities. I believe that by doing so I willrealize my personal goals.
Dillon To realize my personal goals, I think it is necessary totake all kinds of opportunities to encourage my own growth.
I believe that my personal goals should include learning skills,
but it is also important to consider growth for the sake of thecompany. So, it is important that my growth as a professional
result in some benefit for the company, and I think that iswhat it means to realize personal goals in my work. We alsoneed to make sure that supervisors understand this.
Mustakas In my work, I aim to maintain a positive impact on
my team and on my customers. One example of this is smiling. I also believe it is important to contribute to the environment and to ensure safety. With regard to customers, I really

Takada Next, I would like to ask you what opportunities you
find to realize your personal goals through business in the
NSHD Group. What does realizing personal goals mean foryou? And do you have an aspiration that you could only realize in the NSHD Group?
Nakamura One of the inherent characteristics of the NSHDGroup is that it requires a lot of electric power for air separation. These days, there is strong social interest in the SDGs
and in curbing CO2 emissions. I have had an interest in foodcrises, having studied genetic engineering related to food atuniversity. The food crisis is also caused in part by climatechange, and if we can contribute to reducing CO2 emissions
by reducing the amount of electric power usage, then I thinkthat indirectly we can help to stop food crises from worsening. I feel my personal goals are realized when I see that operations and industrial gas supplies are being conductedsmoothly through my plant designs. I can really feel that
we are providing powerful support behind the scenes.
Gutiérrez I want to do the kind of work that can provide
added value to the company and to society. This means that I
need to work as productively and efficiently as possible. Since
I handle supplies and logistics, it is important to reduce long

NIPPON SANSO HOLDINGS CORPORATION80

INTEGRATED REPORT 2022

Many Thermos products contribute to sustainability, and webelieve that customers should not have to compromise on
convenience. To communicate to customers that using
Thermos products will enable them to realize a convenient
lifestyle, I think it is important to have them pick the products
up for themselves and try them out first.
Takada Thank you for your answers. I believe that everyone
will have a different interpretation of a difficult question like
“What does realizing personal goals mean for you?” I thinkhaving your own purpose in the workplace, so that you feelthat your presence causes things to happen, is also a kind ofrealization of personal goals, as is realizing the mission that isgiven to us by the Company in a way—so it seems that it cantake various forms.

feel great when customers see MTG as a partner rather thana simple vendor or supplier. It is very satisfying when we move
past the simple relationship of a supplier and have a sense of
growing together.
I have three sons. When I look at the medium-term management plan, it talks about sustainability and carbon-neutral
initiatives, and when I think about having a positive impact on
the future for my children from that perspective, I believe it
leads to a sense of realizing my personal goals.
Suzuki My idea of realizing my personal goals is making surethat the Thermos brand is widely recognized by all, thereby
realizing Thermos’ corporate philosophy of “Thermos continues to introduce new kinds of lifestyles that are agreeable
to people and society and also environmentally friendly.”

Toward improving employee engagementcertainly improve engagement and would also lead to therealization of personal goals.
Mustakas As Mr. Dillon said, the important thing when
thinking about employee engagement is to view employees
at the level of the individual. It is important to have a cultureof valuing connections between individuals, and by caring
also about team members’ lives outside of work, relationshipsof trust can be cultivated with them. I think it is really important to show an ability to empathize in the sense of valuing
team members as fellow human beings, not only in the context of work. This makes it easier to get team members tocome onboard with various initiatives and encourages themto feel passionate about work.

Takada The materiality chart ( P.32) presenting the key
issues that the NSHD Group needs to address includes
improvement of employee engagement. What kind of measures should the Group take to improve engagement? I
would like to hear your ideas, either for your own company
or for the entire Group.
Dillon I think it is extremely important that the supervisors
explain clearly to the team what the company’s goals andlong-term vision are. I also think it is important for the management team to provide a sufficiently clear explanation, andto align employees’ goals with those of the company. For
example, when assigning new employees, it would be ideal to
deploy them taking into account whether their personal goalsalign with what the company is trying to achieve. That would

NIPPON SANSO HOLDINGS CORPORATION81

INTEGRATED REPORT 2022

OUR SUSTAINABILITY

Roundtable Discussion:
What Opportunities Do NSHD Group Employees Have in Order toRealize Their Personal Goals through Business?

the issues in a discussion format. I believe that would help toachieve the kind of diversity I am thinking about.
Mustakas Recently, MTG hired a female driver. She has been
an outstanding team member from the perspectives of safety
awareness, work quality, and work ethics. I would like to see
more female professionals like her in the industrial gases
sector, and I would like to offer them equal opportunities.
In connection to what Ms. Nakamura was saying, I think thatup until now there has been a chronic bias in thinking thatdrivers should be male. However, this female driver is also
extremely talented, and I think it was an excellent decisionof the company to hire her. It is a very good sign.
Suzuki At Thermos, we are also working to increase theratio of female managers from a perspective of diversity. But
looking at people from my generation, I feel that the difficulties lie in being unable to fully return to work after major life
events such as marriage and child care, and being unable toadvance a career due to the interruption in employee evaluations. To increase the number of female managers, I think it isimportant to create a system that can cover these points andan evaluation system that will enable them to advance tomanagement positions after returning to the workplace.

Gutiérrez I also agree with these comments. In addition,
especially in the last few years I have noticed that in Europe
a number of systems have been put in place to promote
employee growth. It is also important for management togain mutual understanding on where targets are to be set.
I myself have found that setting agreed targets is extremely
effective for increasing my motivation. There is also a wealthof activities in Europe related to diversity. For example, thisweek the company held interviews for female engineers. They
were asked about whether they felt they could work comfortably and whether there are any areas where diversity has yet
to advance. I think this is a wonderful initiative that will help
to improve employee engagement.
Nakamura Like Ms. Gutiérrez, I am also focusing on diversity.
My idea of diversity is to pursue comfort. With regard toengineers, in particular, since there are few women in theseroles they tend to be less comfortable for women. As a result,
I would also like to see a diversity program like the one
described by Ms. Gutiérrez introduced at Taiyo Nippon Sanso.
I have seen commercial safety training videos that havegender and generation bias, which made me feel extremely
uncomfortable. To prevent this kind of thing, I think it would
be good to provide opportunities for everyone to think about

NIPPON SANSO HOLDINGS CORPORATION82

INTEGRATED REPORT 2022

Aiming to carry out the medium-term management plan through workwith regard to streamlining operations, recovering costs, andhuman resources. Moreover, having incorporated sustainability
concepts, I want to build long-term relationships with customers and take on new projects. I am very proud to be amember of Nippon Sanso Holdings Group.
Gutiérrez Sustainability is a consistent theme throughout
the medium-term management plan, so I think that executing
the plan will bring good results and lead to our success as
a company. The five focused fields of the plan are extremely
reasonable. Personally, I believe that I can contribute toachieving the plan through DX. By conducting various formsof analysis and actively utilizing big data, I expect to minimize
the impact of soaring energy prices resulting from the recent
Russia-Ukrainian crisis, economic crisis, and changes of legislation we have been experiencing the last few months oreven years.
Takada Thank you all for sharing your enthusiasm. The
contribution and influence of the young employees working
on the front lines are vital for achieving our financial andnon-financial targets through the five Groupwide focusedfields and segment-specific strategies. In February 2021,
Nippon Sanso Holdings created a global policy regarding
respect for human rights, contribution to local communities,
and employment and labor. Based on this policy, I would liketo coordinate with the Group’s internal operating companies
and promote efforts to increase diversity and inclusion, attractand develop talent, and improve employee engagement,
which are emphasized in the medium-term management plan
as well. In the area of diversity and inclusion, we will implement initiatives centered on further encouraging active participation of women. We will share information between
Group HR divisions regarding the best practices of regions thatare comparatively advanced in this regard, aiming to support
and accelerate their responses. In addition, as part of aneffort to attract and develop human resources who can work
across regional and business boundaries and drive initiatives
to tackle Groupwide issues, we will also focus on creating
human resource exchange schemes within the Group. As
members of the same NSHD Group, I would like all of us tomake an effort to achieve medium-term management plan
NS Vision 2026. Please keep up your good work and thankyou for participating in today’s discussion. I was glad to hear
your views.

Under the new medium-term management plan,
strategies have been created for five Groupwide focusedfields and for the four geographic hubs and the Thermos
business. How do you all view these strategies? And how doyou want to contribute to them through your own work?
Nakamura I have an interest in improving operational
excellence. When we deal with other departments, we areoften in the dark about how the other department works,
and so we are working every day to identify problems andqueries. In terms of operational excellence, I would like tomake it possible for all divisions to share knowledge andeliminate waste. I think one way that I can contribute directlyis through using DX to eliminate waste. For example, we still
use a paper-based system for cylinder management, but if wewere to adopt easy inventory management using tags, we
could reduce waste and labor, and that would improve
operational excellence.
Dillon At Supagas, I feel that the price of LP gas isextremely high. Previously, we have been able to forecast
price movements to a certain degree, but now this has
become incredibly difficult to do. In this environment, I think
it is important to consider how to grow while maintaining
profit margins. Currently, the high LP gas prices are affecting
sales prices. However, it is important to think not only of
increasing sales prices but also of reducing costs. If we canreduce costs, then we can eliminate the need to pass highprices on to sales prices, which should help us to be morecompetitive. It is from this perspective that I want to contribute to realizing the medium-term management plan.
Suzuki Thermos is the only B2C company in the NSHDGroup. I feel that I can contribute to the medium-term
management plan focused field of sustainability management
by increasing recognition of the Thermos brand and products
to encourage their use for sustainability activities that fit into
daily life. My work is directly related to increasing brandrecognition, and so I plan to make an effort in this area.
Mustakas We need to place even more emphasis oncollaboration with regard to matters such as providing equal
opportunities to employees, developing successors, andcontributing to sustainability. Going forward, I think thatsharing and implementing best practices will become importantin this regard. For example, activities that have succeeded at
Thermos could also be applied in MTG’s business. Even between
different segments, there are bound to be things to learn
TakadaNIPPON SANSO HOLDINGS CORPORATION83

INTEGRATED REPORT 2022

SECTION 5

OUR MANAGEMENT

Nippon Sanso Holdings aims to grow sustainably and increase its corporate value
over the long term. We therefore consider
that the essence of corporate governanceis to consider the position of stakeholders,
including shareholders, customers,
employees, and local communities, andto ensure transparency and fairness indecision-making. This definition includes
leveraging our resources effectively toincrease the vitality of management
through swift and resolute decisionmaking. We will operate under a highly
effective corporate governance system
toward achieving the goals of mediumterm management plan NS Vision 2026.

OUR
MANAGEMENT
Corporate Governance

NIPPON SANSO HOLDINGS CORPORATION84

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION85

INTEGRATED REPORT 2022

OUR MANAGEMENT

Corporate Governance

Basic Approach to Corporate Governance 

Evaluation of the Board of Directors’ Effectiveness 

Nippon Sanso Holdings’ Board of Directors has formulated
the Principles of Corporate Governance*, which provide
guidance on corporate governance. Realizing the Company’ssustainable growth and long-term increase in corporate
value, and benefiting all stakeholders, including shareholders, customers, employees, suppliers, and local communities,

involves ensuring the fairness and transparency of decisionmaking. Moreover, we are working to enhance corporate
governance, believing that its essence lies in making effective
use of our management resources, and to increase thevitality of management through swift and conclusive
decision-making.

Our Principles of Corporate Governance stipulate that theBoard of Directors carry out an annual analysis and evaluation of its overall effectiveness based on self-evaluations byeach director, and make a summary of the results public ina timely and appropriate manner. The Board of Directors

continues to conduct analyses and evaluations of its effectiveness and make constant efforts to enhance it. Based on
the results of the Board of Directors’ effectiveness evaluation
for FYE2021, the Board conducted the following main initiatives in FYE2022.

Evaluation Process
Measures to Strengthen Corporate Governance

2015

2016

June	Reduced the number of members as provided in our Articles of Incorporation (from 20 or less to 15 or less);
reduced the number of directors (from 16 to 11); and appointed two independent outside directors to speed
decision-making
June–July	Established the position of Chief Compliance Officer (CCO) to ensure effective compliance
Established the Internal Controls Office to assist the CCO
Established the Principles of Corporate Governance and disclosure policies
OctoberJune	Established the Advisory Committee on Appointments and Remuneration (consisting of the Chairman,
President CEO, and outside directors) to improve the transparency and objectivity of decisions regarding theappointment and compensation of officers and other personnel
	Introduced performance-linked executive compensation tied to the results of the medium-term management
plan as an incentive for medium-term growth

2017

June	Reduced the number of directors from 10 to seven (including two independent outside directors) to establish
further separation of business execution and supervision, as well as to strengthen the supervisory function of
the Board of Directors

2018

February	Appointed a CCO and Regional Chief Compliance Officers (RCCOs) in North America, East Asia, Taiwan,
Southeast Asia, India, and Australia to strengthen the Group compliance system; established global compliance management regulations, regarded as a unified Group standard; and held a meeting of the Global
Compliance Committee, attended by RCCOs under the GCCO to share information on the status of legal
compliance within the Group, the progress of legal actions, and other topics
June	Established the Technical Academy to serve as an in-house training facility to provide education on security
and disseminate technology from the perspective of technology risk management

2019

March
Appointed RCCOs in Europe
June	Appointed Thomas Scott Kallman (Chairman and CEO, Matheson Tri-Gas, Inc.), who is responsible for theGas Business in the United States, and Eduardo Gil Elejoste (Chairman and President, Nippon Gases EuroHolding S.L.U.), who is responsible for the Gas Business in Europe, as directors to strengthen our global
management structure for oversight and decision-making from more diverse perspectives

2020

October	Transitioned to a holding company structure and changed company name to Nippon Sanso Holdings
Corporation

2021

June	Appointed an additional independent outside director (from two to three independent outside directors),
increasing the ratio of outside directors to one-third of the Board of Directors, and thereby diversifying its
composition and strengthening its supervisory function

2022

June	Appointed two additional independent outside directors (from three to five directors) to the Board of
Directors, increasing the ratio of independent outside directors to a majority, in order to diversify its
composition and strengthen its supervisory function* Principles of Corporate Governancehttps://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sanso-holdings-corporate-governance-principles_en.pdf

NIPPON SANSO HOLDINGS CORPORATION86

INTEGRATED REPORT 2022

The Board of Directors’ Secretariat briefs the directors on the method of Board evaluation, items for evaluation,and schedule for FYE2022.

1

January

2

February Directors submit their evaluations to the Board of Directors’ Secretariat.

3

March

The Board of Directors’ Secretariat distributes the report on evaluations to the directors.

4

April

The Board discusses the evaluations.

5

May

Based on the above discussions, the Board decides an annual schedule, including details of what is to be discussed ona priority basis by the FYE2023 Board.

Evaluation Items (Overview)
1) What the Board was or was not able to effectively engage in during this fiscal year regarding its four responsibilities* laid out
in the Principles of Corporate Governance2) What the Board was or was not able to discuss effectively in formulating the new medium-term management plan3) What the Board should discuss and monitor on a priority basis in the next fiscal year4) Composition of the Board
5) Activities of the Advisory Committee on Appointments and Remuneration
6) Management of Board meetings, support for independent outside directors, training of directors* (1) Supervise the overall business and its management, (2) establish and maintain internal control systems, (3) choose, appoint, and dismiss the President CEO and other management
personnel, evaluate them, and decide their level of remuneration, and (4) decide business strategy and take on important executive decisions

Results of the Evaluation

Future Issues

The Board gave the self-evaluation that it effectively played the role
it was expected to perform. From among the directors, some points
were rated highly regarding Board activities in FYE2022, including
the following:Some directors requested that the following points bediscussed further at Board meetings. The Board agreed to
conduct further discussions on these points in FYE2023.

1) By appointing an American CFO who has work experience in Europe andallowing him to report on business results from a global point of view,it has become possible to understand the status of our Group’s
management in greater detail.
2) W ith the CEOs of our U.S. and European operations appointed as Board
members, we are able to have Board discussions while always being
aware of business operations in the United States and Europe.
3) By appointing a female director, we have been able to realize Board diversity.
4) T he Board met five times to discuss formulation of the new medium-term
management plan, and each Board meeting was able to conduct useful
discussions thanks to voluntary participation in the debate by the representatives of each business segment.
5) B y setting non-financial KPIs in the medium-term management plan, wewere able to show society our posture toward sustainability.

NIPPON SANSO HOLDINGS CORPORATION

871) Our Company’s role as a holding company should be
discussed continuously.
2) T he Board should continue discussions as to how the
Company can contribute to customers and society
through its business, including the hydrogen business,regarding the realization of carbon neutrality.
3) P eople experienced in business management should be
appointed as independent outside directors.
Matters deemed as future issues in the Board’s evaluation
will be discussed continuously during the monitoring of themedium-term management plan, to be taken up at three
Board meetings a year, and on other occasions.

INTEGRATED REPORT 2022

OUR MANAGEMENT

Corporate Governance Structure

Nippon Sanso Holdings’ governance is characterized by rapid decision-making and appropriate allocation of management resources.
This is achieved by delegating authority to the operating companies in each of the four geographic hubs and the Thermos business,
which support an industrial gases business model that produces gases on the site of consumption. As a group that has global business operations, supervision of management decisions and business execution requires a multifaceted valuation of a wide range ofrisks based on expert knowledge informed by close contact with the front lines. We have therefore adopted the “company with an
Audit & Supervisory Board” corporate governance model, under which the Board of Directors is responsible for making decisions
related to business execution above a certain scale, including M&As and investments, and the Audit & Supervisory Board members
themselves audit business activities.

Board of Directors
Outside directors as a percentage of
total Board of Directors’ members

Female directors as a percentage of
total Board of Directors’ members

55.6%

22.2%

Outside directors 5
Inside directors 4

Advisory Committee on Appointments and Remuneration

Management Committee

The Advisory Committee on Appointments and Remuneration consists of theRepresentative Director, President CEO and five independent outside directors, and ischaired by Akio Yamada (outside director). The committee receives requests for advice
from the Board of Directors regarding selection of candidates for directors and Audit &Supervisory Board members, appointment and dismissal of the Representative Director,
President CEO and executive officers, selection of the successor to the Representative
Director, President CEO, and revision of internal rules regarding remuneration of directors.
The committee reports the results of its deliberations back to the Board of Directors.
Since the majority of the members of the Advisory Committee on Appointments andRemuneration are independent outside directors, it is able to ensure independence fromthe parent company in the appointment of management team members, thereby helping
to ensure transparency and objectivity in the decision-making of the Board of Directors.

The Management Committee consists mainly of theRepresentative Director, President CEO and executive
officers. Based on the Group’s basic policies as determined by the Board of Directors, the committee deliberates and makes decisions on important mattersrelated to the execution of duties by the Representative
Director, President CEO.

Female directors 2
Male directors 7

Global Strategy Review Committee

Audit & Supervisory Board
The Audit & Supervisory Board is an independent body entrusted by the shareholders toaudit the decision-making process of directors and the state of business execution by
management. The board conducts its business in accordance with applicable laws, regulations, the Company’s Articles of Incorporation, and other rules.
The Audit & Supervisory Board consists of four full-time members, including three outside
members (two of whom are independent outside members). Each member of the board
engages in audit activities from a neutral and objective perspective, bringing their expertise to
the audit process. The board conducts a detailed discussion of the results of its audit activities,
making recommendations as necessary and strives to ensure sound management.
The Audit & Supervisory Board conducts the following types of activities in accordancewith audit policies and plans as determined by the board on an annual basis.
• Attendance at important internal meetings (Board of Directors’ meetings, Management
Committee meetings, etc.)• Interviews with directors, executive officers, and other members of senior management• Inspection of important decision-making documents, etc.
• Audits of Japanese and overseas Group companies
The Audit & Supervisory Board strives to improve the effectiveness of audits throughclose coordination with the Company’s internal audit division, internal control division, andindependent auditor. The board also engages in the regular exchange of information andopinions with outside directors.
We have established an independent office for the Audit & Supervisory Board. This
office is staffed with full-time employees who assist members of the board in their duties
and under their direction.
Audit & Supervisory
Board structureInternal Members(full-time) 1
Outside Members(full-time) 3

General Meeting of Shareholders

Appointment/
dismissal

Appointment/
dismissal
Appointment/
dismissal

Audit

Board of Directors
Advisory Committee on
Appointments and Remuneration

Consultation

Nine members,
five of whom are outside

Audit &
Supervisory Board

50%

Audit ofoperations
Audit ofaccounts

Supervision

Representative Director, President CEO

Four members,
three of whom are outside

Global Strategy Review Committee
Management
Committee

Global Risk Management Committee

Corporate
Audit Office
Global Compliance Committee
Internal audit

Independent Auditor

The Global Strategy Review Committee meets once a year in principle, and consists of
the Representative Director, President CEO, the vice president, executive officers, division
managers, Audit & Supervisory Board members, and persons designated by the chairperson. Prior to the making of a resolution on the NSHD Group’s forecasts for the next fiscal
year, the committee confirms the details of each operating company’s strategy and deliberates on the optimal allocation of resources across the entire Group. It also formulates theGroup’s management strategy and manages its progress. The committee formulates themedium-term management plan, sets quantitative and qualitative targets for achieving theplan, and manages operating results through quarterly monitoring. Among items determined by the Global Strategy Review Committee, specific countermeasures for casestudies related to technology risk are determined at Technological Risk Liaison Committee
meetings and other meetings held between Nippon Sanso Holdings and operating companies, then deployed globally.
Main Items at Meetings Held in FYE2022
The following Groupwide management issues items were deliberated: Economic andbusiness environment forecasts, financial targets, Group helium strategy, policy onsustainability initiatives, policy on carbon-neutrality-related initiatives, total electronics
strategy, and Group R&D initiatives policy.
The following operating company management issues were deliberated: Policy for initiatives to achieve forecasts for FYE2023 and policy for initiatives regarding sustainability.

Audit ofaccounts

Chairperson: Representative Director,
President CEO

Chairperson: Representative Director,
President CEO
Coordination

ReportingResponse
Appointment/
dismissal

Independent outside Audit & Supervisory Board
members as a percentage of total Audit &Supervisory Board members

Chairperson: GCCO

Global Risk Management Committee
The Global Risk Management Committee meets once a year in principle and comprises
the Representative Director, President CEO, who chairs the committee, directors, Audit &Supervisory Board members, the CCO, executive officers, division managers, operatingcompany presidents, and the persons in charge of promoting regional risk management.
The committee deliberates on the selection of the Group’s material risks, matters related tocountermeasures, basic policy on risk management for all Group companies, and mattersrelated to regulations and plans.

Holding Company Divisions and Affiliated Business Companies

Independent outside
Audit & Supervisory
Board members
Coordination

NIPPON SANSO HOLDINGS CORPORATION

88

Nippon Sanso Holdings’ Board of Directors
consists of nine directors, with a majority offive being independent outside directors. This
Board structure facilitates appropriate management decisions. Furthermore, two of thedirectors are non-Japanese and two are
women, thereby achieving diversity in its
composition. The Board meets monthly to
discuss important matters and receive reportson the status of Nippon Sanso Holdings’
businesses. The Board also oversees theexecution of business by the Representative
Director, President CEO.

INTEGRATED REPORT 2022

Global Compliance Committee
The Global Compliance Committee is convened once a year in principle by the GCCO toensure the effectiveness of the Group’s compliance. At the meetings, the Compliance
Promotion Policy and compliance promotion activities in each area are shared, andindividual issues are discussed as necessary.

NIPPON SANSO HOLDINGS CORPORATION89

INTEGRATED REPORT 2022

OUR MANAGEMENT

Corporate Governance Structure

Remuneration for Officers

Relationship with the Parent Company Remuneration for directors and Audit & Supervisory Board
members is determined by resolution at the annual General
Meeting of Shareholders in line with the total compensation
limits for directors and Audit & Supervisory Board members.
The amount of remuneration for each director is determinedin accordance with the remuneration standard resolved at
the Board of Directors by the Representative Director,
President CEO, who is delegated by the Board of Directors,
while remuneration for each Audit & Supervisory Board
member is determined by discussion among the Audit &Supervisory Board members. We have established theAdvisory Committee on Appointments and Remuneration,
which comprises multiple independent outside directors andthe President CEO and is chaired by an outside director. The
committee deliberates the appropriateness of remuneration

Type of
Remuneration

Ratio

proposed after being consulted by the Board of Directors andthe Audit & Supervisory Board and reports the results of its
deliberations to the Board of Directors and the Audit &Supervisory Board. Directors’ remuneration consists of basic
monthly remuneration and performance-linked bonuses, andis reflected in the amount paid to each person.
At its Board of Directors’ meeting held on June 17, 2022,
the Company decided to add non-financial KPI-linked
bonuses to directors’ remuneration from July 2022 onward.
In addition, directors and outside directors whose main
duties are as officers of subsidiaries are paid only the fixedbasic monthly remuneration for remuneration as directorsof Nippon Sanso Holdings.
Remuneration for Audit & Supervisory Board members,
including outside members, consists of base salary.

Type of
Remuneration

Ratio

Basic monthly
remuneration(fixed)Approx. Fixed remuneration
by rank5

Evaluation indicator–

Degree of achievement of budget for each fiscal year
targeted in the medium-term management plan

Basic
Approx.
monthly
remuneration
6(fixed)Performance- Financial
linked bonuses KPI-linked
bonuses(variable)

Performancelinked
bonuses(variable)*1–

Evaluation
weight4

The amount of rank-specificremuneration is linked to thedegree of achievement of theannual budget targeting the
medium-term management plan(consolidated revenue and core
operating profit margin) and thedegree of earnings growth fromthe previous fiscal year (consolidated revenue, core operating
profit, and profit attributable toowners of parent).

4

Non-financial
KPI-linked
bonusesNon-financial
KPI-linked
bonuses

1

Linked to the degree of achievement of (certain) non-financial
KPIs set in the medium-term
management plan

• Consolidated revenue

20.5%• Consolidated core operating profit margin

20.5%

We concluded a basic agreement with our parent company,
Mitsubishi Chemical Group Corporation (MCG), on May 13,
2014. Under this agreement, MCG committed to respecting
our autonomy, supporting and cooperating with us under
the MCG Group Management Regulations. In turn, we conduct all business functions independently, including management, finance, sales, and research and development.
In situations where the interests of the parent company
conflict with shareholders other than shareholders of theparent company, the directors of Nippon Sanso Holdings act
to avoid harm to the interests of the shareholders other than
the shareholders of the parent company. We have appointed
five independent outside directors and two full-time independent outside Audit & Supervisory Board members.

These individuals oversee the Company to ensure there areno conflicts of interest between the parent company andshareholders other than shareholders of the parent company.
Furthermore, we have voluntarily established the Advisory
Committee on Appointments and Remuneration*, which
ensures independence from the parent company in the selection of a management team. While parent company MCG isa holding company, the Nippon Sanso Holdings Group and
Mitsubishi Chemical Corporation, the main operating company of the MCG Group, engage in transactions, totaling¥5,784 million in FYE2022.
* This is a voluntary committee of the Company that advises the Board of directors on
selection of candidates for directors and Audit & Supervisory Board members as well as
the appointment and dismissal of the Representative Director, President CEO and otherexecutive officers.

Developing the Next Generation of Leaders We recognize that fostering the next generation of management personnel is an important issue in our Group governance structure. The Advisory Committee on Appointments
and Remuneration has been discussing a development planfor our next generation of managers. Part of these discussions concerns the qualities required of the next generationof management and policies for training. As the Nippon
Sanso Holdings Group expands globally, we must develop
human resources who have experience not only in Japanbut also overseas, and have a thorough knowledge ofour business.

We are aware of the small number of female managers in
our European operations, and have implemented an active
succession program for women to resolve this issue (▶P.77).
In October 2020, each of the 15 participants in this18-month program was assigned a member of management,
including the President CEO, as a mentor. Top managers
offered their mentees the benefit of experience, advice on
overcoming challenges, and more. The program is designed
to develop the next generation of managers, and we intend
to introduce the program to other regions based on our
success in Europe.

Year-on-year earnings growth

Training for Top Management • Consolidated revenue

19.6%• Consolidated core operating profit

19.6%• Profit attributable to owners of parent

19.6%• Lost time injury rate
• Rate of receiving compliance training–

Facing an even faster pace of global business, we offer
ongoing management training programs to foster decisionmaking skills reflecting the broad-based knowledge andinsight required of our top managers. In November 2021, we
conducted training for full-time directors, Audit & Supervisory
Board members, and executive officers of Nippon Sanso
Holdings and Taiyo Nippon Sanso, designed to deepen theirunderstanding of the latest laws and regulations regarding
corporate governance, and to reaffirm the importance ofhandling their practical operations in accordance with therequirements of the internal control system (risk management) and laws and regulations, bearing in mind specificrecent instances of corporate misconduct.

*1 Performance-linked bonuses (variable) = Rank-specific standard amount x Coefficient based on evaluation related to performancelinked bonuses*2 Since the medium-term management plan had not been formulated yet for FYE2022, “degree of achievement in the budget of FYE2022(consolidated revenue and core operating profit margin)” is used to calculate directorsʼ performance-linked bonuses (approved by the
Board of Directorsʼ meeting held on June 18, 2021), instead of “degree of achievement of the annual budget targeting the medium-term
management plan (consolidated revenue and core operating profit margin)” specified by the Companyʼs internal regulations on
remuneration for directors.

NIPPON SANSO HOLDINGS CORPORATION90

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION91

INTEGRATED REPORT 2022

OUR MANAGEMENTGCCO Message

I believe that what is requiredof us as we engage in businessduring this era of extreme
uncertainty and risk is integrity.

In the area of compliance, we are implementing measures
based on thorough education, building and internal promotion of effective internal reporting systems, and active
involvement and communication from the top managementof each organization as we design our measures at eachbusiness entity to suit the characteristics of each region andbusiness. In the area of risk management, recognizing thatbusiness strategy and risk management are two sides of thesame coin, we have built an enterprise risk management
structure, in which NSHD runs the Global Risk Manage­ment
Committee and shares recognition of important risks, andmonitors the risk response by each operating company.
I believe that the integrity of a company is ensured by the
integrity of the individuals who work there. My mission as
the Chief Compliance Officer (CCO) for the entire NSHDGroup is to create systems that eliminate factors that hinder
employees’ efforts to practice integrity. I believe this will
create the kind of corporate culture that empowers people
to speak up when they have concerns regarding complianceor risk.

The era in which we are now living is one in which risks thathave been foreseen are unfortunately beginning to materialize. A pandemic caused by an unknown virus and geopolitical risks have come to pass in the form of COVID-19 and theRussia-Ukrainian crisis. Moreover, in this era it is also becoming increasingly complex to make value judgments. The riseof various types of social media, which was considered aneffective tool for supporting communication and promoting
mutual understanding, also has a darker side as it exacerbates division in society as well. More than anything, this isan era of dramatic transformation. Since the industrial revolution, people have advanced and expanded society withthe power of huge amounts of fossil fuel; but in this era,
we now have to completely revise this approach fromthe ground up.
I believe that what is required of us as we engage inbusiness during this era of extreme uncertainty and risk is
integrity. This means engaging in our work with integrity,
in other words rigorously ensuring compliance, and monitoring
the various envisaged risks with integrity, which is to say
proper risk management.
At NSHD, rigorous compliance and appropriate risk
management are considered the foundation of business
management. We are therefore working to educate andcreate structures for these, and to build systems.

Compliance Promotion 
Nippon Sanso Holdings Corporation has determined a basic
compliance policy for the Group and established organizations and regulations to ensure its effectiveness. We
appointed a Group Chief Compliance Officer (GCCO) for theCompany and Regional Chief Compliance Officers (RCCOs)
in every region overseas. The GCCO conducts training in linewith compliance risks in Japan and overseas, clarifying rules
for responding to compliance violations and communicatingthese rules to all Group companies. The GCCO and RCCOs
have the authority to instruct and oversee compliance activities, striving to improve and gain support for complianceacross the Group.

Compliance Structure
Board of Directors• Group compliance reports are swiftly
reported to the GCCO

Japan CCO
(Taiyo Nippon
Sanso Corporation)*Concurrently the

Kazuyuki Futamata
Senior Managing Executive
Officer, Group Chief
Compliance Officer (GCCO),(Taiyo Nippon Sanso
Corporation GCCO),
with responsibility forGroupwide internal control

NIPPON SANSO HOLDINGS CORPORATIONThe GCCO and RCCOs have established an internal communication system in Japan and overseas to ensure a systemthat enables them to report without fear of disadvantage inthe event that they discover a compliance violation or potential violation within the NSHD Group.
In addition, the NSHD Group continuously conducts compliance education and training for employees at every level.
The above activities are shared among all CCOs when theycome together for the annual Global Compliance Committee
meeting, promoting a unified approach to compliance promotion for all regions worldwide.

92

INTEGRATED REPORT 2022

GCCO

North
America CCO(Matheson Tri-Gas,
Inc.)

Southeast
Asia CCO(Nippon Sanso
Holdings Singapore
Pte. Ltd.)

Global Compliance Committee• T he GCCO shares compliance policy andcountermeasures with the entire Group

GCCO

Internal Control Office

East Asia CCO

India CCO

(Taiyo Nippon
Sanso (China)
Investment
Co., Ltd.)(Taiyo Nippon
Sanso India
Pvt. Ltd.)

Australia CCO(Supagas Pty Ltd)

Consolidated subsidiaries and affiliates

NIPPON SANSO HOLDINGS CORPORATION93

INTEGRATED REPORT 2022

Taiwan CCO(Nippon Sanso
Taiwan, Inc.)

Europe CCO(Nippon Gases
Euro-Holding
S.L.U.)OUR MANAGEMENT

RCCOs Message

Message from Southeast Asia CCO
The NSHD Group’s compliance promotion activities are being conducted in each region under the leadership of theRegional Chief Compliance Officers (RCCOs), who have detailed knowledge of the business as well as the characteristics and status of each region.
For FYE2022, the RCCOs for North America and Southeast Asia will introduce their fundamental philosophies,
frameworks, and various measures on promoting compliance.

Message from North America CCO
Approach to compliance in North America andits distinctive characteristics
At Matheson Tri-Gas, Inc. (MTG), we view compliance as key
to the success of our business. Compliance provides ourworkforce with the legal and regulatory boundaries within
which we conduct business. Within these legal and regulatory boundaries, our compliance program also provides the
ethical framework to make our business decisions. We
encourage our team to make ethical decisions within a culture of integrity based on our corporate values and goals.
Our culture is driven from the top management and reinforced throughout our management ranks. Each decision we
make is set with ethical boundaries to identify what goodcan come of the decision and, alternately, what harm cancome from the decision.

training on the legal and ethical boundaries established bysuch policies and procedures, providing guidance and support when making decisions within such boundaries, andimplementing an anonymous whistleblower system where
employees can be uninhibited in reporting potential compliance violations.
We empower our business team to make legal and ethicaldecisions when managing and mitigating the risks they arepresented with. Our compliance goal is to continue to raise
ethical awareness while acting within the confines of legal
and regulatory boundaries.
Approach to compliance promotion system of Nippon
Sanso Holdings Group as a whole
We coordinate all of our compliance efforts with NSHD and
its global compliance program. And we continue to learn
from other NSHD business groups as we develop our companywide compliance initiatives. Overall, NSHD compliance has
established a detailed compliance framework that all regional
businesses will benefit from as we move forward in attaining
our overall business goals and objectives.

Current compliance-related measures
With NSHD’s sustainability focus, we have also now formalized the concepts of ESG into our ethical decision-making
process. Overall, MTG’s compliance program is detailed androbust. It starts with establishing policies and procedures
applicable to all our employees, and is reinforced throughApproach to compliance in Southeast Asiaand its distinctive characteristics
Southeast Asia is characterized by its diversity of laws andregulations, local business environments, and cultures spanning seven countries. To help realize integrated managementof this diversity, we have put in place a compliance management framework, comprising Prevent, Detect, and Respondpillars. This serves as a basis and a roadmap for establishingcompliance at each operating company.
We have been focusing particularly on the Prevent pillar asa baseline for compliance steps and controls for all Southeast
Asian operating companies. Based on this, all operatingcompanies conduct a yearly compliance risk assessment todetermine priority areas. In view of the limited resources ofeach company, we centrally develop an annual plan andactivities to address these priority areas.
We hold monthly Compliance Community of Practice (CCoP)
Meetings with the operating companies’ compliance teams,
at which we explain and discuss our initiatives to deepen
mutual understanding. Moreover, we hold one-on-one meetings
with each company, called Compliance Promotion Meetings,
every two to four months, to engage closely with each compliance team on an individual level. Furthermore, we hold theSoutheast Asia Regional Compliance Networking Meeting eachyear for compliance representatives to share their compliancepromotion efforts and compliance risk assessment results, andto determine compliance risk priority areas, among others.
Nippon Sanso Holdings GCCO Kazuyuki Futamata andthe Nippon Sanso Holdings’ compliance team attend.
In 2019 and 2020, we promoted the celebration ofCompliance Awareness Week across Southeast Asia toincrease the level of compliance awareness in this region. We
developed this into Compliance Development Week in 2021
by bringing business ethics further to the forefront, and weplan to hold a similar event in 2022 as well.

staff to make yearly conflict-of-interest declarations. Staff will
acquire skills for making ethical decisions in gray areas bylearning to apply the ethical decision-making framework
introduced in 2021.
There is a high corruption risk in most of Southeast Asia.
We therefore plan to launch an anti-gratification statement
this year for operating companies’ business partners to signand to take a strong stand against corruption.
Furthermore, given the current heightened cybersecurity
risk, we will include another cyber risk awareness training in
FYE2023.
Approach to compliance promotion system of Nippon
Sanso Holdings Group as a whole
Under Nippon Sanso Holdings’ Global ComplianceManagement Policy, and as repeatedly emphasized by GCCO
Futamata, compliance not only means the observance oflaws and regulations, etc., but also includes observance ofcorporate ethics. Nippon Sanso Holdings’ policy emphasizes
corporate ethics, which resonates very much with our focus
on business ethics in the Southeast Asia region since
FYE2022. Nippon Sanso Holdings gives us flexibility to adapt
our compliance programs and activities to the needs of thisdiverse region.
The annual Global Compliance Committee meeting is agreat opportunity for Nippon Sanso Holdings to share dayto-day compliance best practices and measures as One
Company, One Team.
Mission and Role as an RCCOThe main objective of the compliance promotion system isto ensure the effectiveness of compliance by Nippon Sanso
Holdings Group companies in Southeast Asia, and I also
consider this to be my mission.
My role as an RCCO is to be a catalyst to help ourSoutheast Asian operating companies to embrace compliance in line with this mission. It is through these efforts that
I will strive to establish trust with all of our stakeholders.

Current compliance-related measures
In line with our focus on business ethics, we recently rolled
out the Conflict-of-Interest Policy and the requirement for all

Stephen Stroud

Clara Teo

Executive Vice President–Administration,
Regional Chief Compliance Officer–North America, & General Counsel
Matheson Tri-Gas, Inc.

Legal & Compliance / Regional Compliance Officer
Senior Vice President
Nippon Sanso Holdings Singapore Pte. Ltd.

NIPPON SANSO HOLDINGS CORPORATION94

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION95

INTEGRATED REPORT 2022

OUR MANAGEMENT

Risk Management

Risk Management Structure 

Risk Management Process 

The NSHD Group built a new risk management structurewith its transition to a holding company system in October
2020. Our goal was to consider the risks to the overall Group
from a management perspective looking at the medium tolong term, to clarify the roles and responsibilities in risk management activities, and to optimize the risk management
structure for all Group companies.
As the person in charge of global risk management, thePresident CEO has ultimate responsibility for the preparationand implementation of the Group’s risk management
structure covering all Group companies.

Furthermore, the presidents of the operating companies
are in charge of risk management in their respective regions,and have responsibility for the preparation and implementation of their respective regional risk management structures.
They oversee persons in charge of promoting regional risk
management, who promote risk management in each region,
gather risk information within the Group, and share best practices.
This new risk management structure has increased theeffective­ness of our risk management, and under this structure
we are promoting activities for reducing the risk of theoverall Group.

Board of Directors

The Group identifies and assesses risks by recognizingchanges in the business environment and looking at theirpotential to both increase and damage corporate value.
From the results of this assessment, we identify importantrisks and conduct risk response and monitoring in accordance with our risk response policy to optimize the risk
response across all Group companies.

Risk

Risk

identificationassessment

Our risk management processes include a process for
NSHD and its operating companies, and a process for important risks that require a priority organization-level response.
Both of these processes comprise the steps of risk identification, risk assessment, risk response policy determination,risk response measure determination, response to risk, andmonitoring and review.

Risk response

Risk response

policymeasuredetermination

determination

Response

Monitoring

to riskand review

Management Committee
Global Risk Management Committee
Chairperson: Representative Director, President CEO(Person in Charge of Global Risk Management)

Global Strategy
ReviewCommittee

Global Risk Management
Promotion Secretariat(Group Internal Control Officeof NSHD)

Each Office
各室
NSHD
of
NSHD
各室
NSHD

Taiyo Nippon
Sanso Group

Matheson
Tri-Gas Group

Nippon Gases
Euro-HoldingGroup

Asia and Oceania
region businesscompany group

Thermos GroupRegional Risk
Management
Supervisory Manager(TNSC President)

Regional Risk
Management
Supervisory Manager(MTG President)

Regional Risk
Management
Supervisory Manager(NGE President)

Regional Risk
Management
Supervisory Manager(Group Planning
Officer of NSHD)

Regional Risk
Management
Supervisory Manager(Thermos President)

Regional Risk
Management
Promotion Staff

Regional Risk
Management
Promotion Staff

Regional Risk
Management
Promotion Staff

Regional Risk
Management
Promotion Staff

Regional Risk
Management
Promotion Staff

Group
company

Groupcompany

Groupcompany

Groupcompany

Groupcompany

Groupcompany

NIPPON SANSO HOLDINGS CORPORATION

Group
company

96

Groupcompany

Groupcompany

INTEGRATED REPORT 2022

Global Compliance
Committee

Risk Management
Liaison Meeting- Maintaining and strengthening the business foundation- Securing and developing the human resources to support
the above two themes.
At the meeting, a lively discussion was held, including theviews of individual operating companies on these risks andthe perspective of the entire NSHD Group. By sharing risk
awareness and promoting risk response as the NSHD Group,
we will make our achievement of medium-term management
plan NS Vision 2026 a certainty.
Furthermore, the Risk Management Liaison Committee
meets twice a year as a complement to the Global Risk
Management Committee, with the purpose of confirming
risk information and the status of risk response at each
operating company and sharing best practices.
Looking forward, NSHD will coordinate with each operating company to promote risk management activities for theentire Group.

The Group’s Global Risk Management Committee meetsonce a year. It liaises with the Global Strategy Review
Committee so that the management team can understandthe Group’s overall business strategy in terms of both risk
and opportunity.
The main criteria for selecting the important risks for theGroup are as follows:- Risks that are to be managed from a Group management/
all-company perspective with a medium- to long-term view
- Risk that impact the Group’s business foundation, or certain
important businesses.
In addition, we also base our selection on the NSHD’smateriality issues and business strategies, such as themedium-term management plan.
At the Global Risk Management Committee meeting heldin February 2022, three important risk themes were identified for the Group:- Climate change and the decarbonization movement, andglobal economic and social changeGroupcompany

NIPPON SANSO HOLDINGS CORPORATION97

INTEGRATED REPORT 2022

OUR MANAGEMENT

Global Information Security Council (GISC)

Messages from Outside Directors

The council was established in October 2021 to address the increasing importance of cybersecurity as a business risk andthe heightened level of cybersecurity threats. A Global IT Security Assessment was recently completed and it evaluates thecybersecurity maturity of our businesses across the world. The result of this assessment allowed us to: Identify best practices,close security gaps, define areas of priority, and develop a long-term strategic security roadmap.
The council will define security standards, controls, and overall governance including identification and tracking of existing
threats and incidents. Its operational management activities include the discovery and remediation of vulnerabilities, strengthening of technical solutions, and response to security incidents. Finally, improving cybersecurity culture and behaviors through userawareness initiatives, training, or other campaigns.
Considering the current council structure and the security footprint in the regions, the council will work parallel streams.
The first stream relates to global initiatives, where opportunities were identified in terms of standardization or global coordinationand the second includes specific regional initiatives based on the security maturity profile and prioritization efforts to mitigate
potential risks.

Nippon Sanso Holdings’ business environment is experiencing a time ofgreat upheaval, and corporate governance is also in a transition period.
With the election of two new outside directors at the General Meeting of
Shareholders held in June 2022, outside directors now make up a majority
on the Company’s Board of Directors. Furthermore, there are now two
female outside directors, representing increasing progress on diversity.
With the formulation of the new medium-term management plan NS Vision
2026, the role of outside directors is set to increase even further. In thissection, we spoke with the outside directors.

Supporting and overseeing the progress of the new
medium-term management plan is an importantmission for outside directors.

Q

IT security is paramount toa Company’s success.

Q

How do you plan to be involved in the new
medium-term management plan in your role as
an outside director?

A

I believe that an important role for outside directors going
forward will be to see whether the five strategies presented
in NS Vision 2026 are being executed in a concrete manner,and to support and oversee their progress. To realize the targets, each of the four geographic hubs needs to engage inactive discussion about the themes, exchanging opinions andinformation, making adjustments, and incorporating bestpractices in the businesses of each company.
In addition, at the Advisory Committee on Appointments
and Remuneration, of which I am the chair, our important
issues are selection of a successor to the Representative Director,
President CEO, introduction of a human resources development
program to equip the next generation of managers to compete
globally, and promoting active participation by women. With
regard to remuneration, I think it is important to formulate an
object evaluation standard for non-financial KPIs.

NSHD Global Information Security Structure

Toshihiko Hamada
Representative Director, President CEO

Jan Van den Bulck
Global Information Security Director

Taiyo Nippon Sanso
Group,
Thermos Group

Matheson Tri-Gas
Group

Nippon Gases
Euro-Holding Group

Asia region businesscompany group

SupagasGroup

Reporting lines ensure centralized oversight, but regional engagement to minimize IT security risk.
The scope of the program follows the international risk-based framework from the National Institute of Standards and Technology (NIST) Cybersecurity Framework.

NIPPON SANSO HOLDINGS CORPORATION98

INTEGRATED REPORT 2022

Outside Director

Corporate value is the total sum of value creation by all stakeholders, and Nippon Sanso Holdings’ Group Vision is truly an
expression of this. The recently announced new medium-term
management plan, NS Vision 2026, is the eventual result ofmultiple discussions between representatives from the four
geographic hubs on each theme of the Vision. The
Company will incorporate the current social economic
issues of each country through its business targets, while simultaneously growing and expanding its business.

Cesar Callejo

Cesar Callejo
Global Information Security Chairman

Akio YamadaAGlobal Information Security Chairman

Alan David Draper
Executive Officer & CFO

What is your opinion of Nippon Sanso Holdings’
corporate governance and new medium-term
management plan?

NIPPON SANSO HOLDINGS CORPORATION99

INTEGRATED REPORT 2022

OUR MANAGEMENT

Messages from Outside Directors

The role of outside directors is to provide opinionsfrom a neutral, fair, and objective standpoint.
Q

What is your opinion of Nippon Sanso Holdings’
corporate governance?

A

Japan’s Corporate Governance Code was formulated in 2015,
when I was appointed outside director of then Taiyo Nippon
Sanso Corporation. At the time, the Company showed some of
the common issues that tend to occur with merged companies.
However, the Company approached the implementation of its
corporate governance honestly and correctly in accordance with
the Code, and overcame those issues, enhancing and strengthening the function of the Board of Directors. I think the honestyof this approach was commendable.
The role of outside directors is to provide opinions from aneutral, fair, and objective standpoint. I think that opinions fromoutside directors free from concerns over internal situations andpast obligations have contributed to enhancing and strengthening the Company’s Board of Directors.

Q

What is your opinion of the new medium-term
management plan?

A

Over the past seven years, the Company has acquired a portionof the European business of Praxair, Inc. and the U.S. HyCO
business of Linde AG, becoming a global company in the literal
sense of the word. In October 2020, the Company transitioned
to a holding company structure. This change in structure is amark of the Company’s growth over these past seven years.
Turning to the future, the Company has announced the five
focused fields in the new medium-term management plan. Of
these, my particular focus is on “sustainability management”
and “exploring new business toward carbon neutrality.” These
are fields about which the outside directors should have a lot tosay. The number of female outside directors has also increased,
and we should now see opinions from various different perspectives being offered at Board of Directors’ meetings.
With regard to compliance, we are entering an era of tremendous change, where companies are required to commit to sustainability for the sake of human survival, and to provide reliable
information about these matters to the world. In the coming era,
we will need to consider people and the climate much morethan we have in the past. The new medium-term management
plan is designed to answer the needs of such an era.

NIPPON SANSO HOLDINGS CORPORATION100

INTEGRATED REPORT 2022

I will work to raise the awareness offemale employees in order to increase the number ofwomen aiming for management roles.

Q

What is your opinion of Nippon Sanso Holdings’
corporate governance?

A

At Nippon Sanso Holdings’ Board of Directors’ meetings, Board members
exchange opinions actively, and I feel that governance is working well.
I believe that two commendable points are the compliance education andtraining, and the efforts to create a foundation for strong governance.
In terms of issues to be addressed, if there were a regular meeting
only for independent outside directors, I think that we would be able
to exchange information and share our thoughts more closely
regarding issues related to the activities of management and theBoard of Directors, the development of future executive management, and so forth.

Q

With the appointment of two new outside directors,
they now make up the majority. What is your ideal vision
for the Board of Directors?

A

I think that accepting two outside directors with completely
different fields of expertise has provided Nippon Sanso
Holdings with an opportunity to reexamine the administration and supervision of its management structure. Moreover,they may propose innovative ideas and opinions that would
not occur to directors promoted from inside the Company.
I will also strive to ensure I can give better advice to assist
the Company’s sustainable growth by taking an overall
view of its situation.

Q

What is your opinion of the new medium-term
management plan?

A

The aspect of the new medium-term management
plan that I want to focus on is achieving the targets
for the ratio of female managers among theGroup’s non-financial KPIs. I plan to approach thisby continuing to make many opportunities totalk with female employees at the Company
in person and help to raise their awareness.
I think one of my roles is to help increase
the number of women aiming for
management roles.

Mitsuhiro Katsumaru
Outside Director

NIPPON SANSO HOLDINGS CORPORATION101

INTEGRATED REPORT 2022

Miri Hara
Outside Director

OUR MANAGEMENT

Messages from Outside Directors

I aim to contribute to governance at Nippon Sanso
Holdings by facing difficulties together and making
changes together.

Since Nippon Sanso Holdings has advanced technologies that can help society
to decarbonize, as a member of the Company I am determined tohelp it achieve the targets of its new medium-term management plan.

Q

What experience and skills have you acquired?

Q

What experience and skills have you acquired?

A

I have 40 years of experience working at Hitachi, Ltd., where
I was involved from my junior to mid-level years in project management on construction and operation of nuclear power plants.
After that, I worked in manufacturing at plants, overseas strategy
at the head office, and in management of the electric power division. This has given me a wide range of experience from upstream
down to the front line of an electrical equipment manufacturer.
While the products are different, I think the fundamentals of
manufacturing and project management are universal, andI believe that I can contribute to governance with regard tobusiness policy and strategy of each business unit of the
Nippon Sanso Holdings Group from the perspective of
manufacturing management and technology.

A

After working at a foreign bank, in 2002 I was registered as an attorney andsince then I have been working in creating financing schemes and contracts,
regulation and corporate compliance advice in the finance industry, and in-court
and out-of-court dispute resolution. I have also worked on the front lines ofdispute resolution at a U.S. federal court (in St. Louis, Missouri). I have also
lectured at Keio University Law School on arbitration, mediation, and negotiation,with the aim of connecting practice with academia. At Nippon Sanso Holdings,
I hope to be of service by sharing my accumulated knowledge of global
compliance, intra-organizational conflict prevention, and financial practice.

Q

What is your impression of Nippon Sanso Holdings?

A

I feel that Nippon Sanso Holdings’ medium-term management planand its signing of the United Nations Global Compact really show the
Company’s commitment to working together for the global environment and building a sustainable society. There have not been so manyorganizations taking these issues seriously to date. I am certain that
Nippon Sanso Holdings has technologies that will be able to contributeto the global environment in its HyCO business and the carbon captureand storage (CCS) project. As a member of such an organization, I
feel not only fulfilled but honored to be able to help the Company
achieve the targets of its medium-term management plan.

Katsumi Nagasawa
Outside Director

Q

What is your impression of Nippon Sanso Holdings?

A

I have also been involved with the Company as a user of its
products. Industrial gases have an inseverable relationship with the
manufacturing industry, and has grown up together with Japan’snational industries, particularly its traditional heavy manufacturingindustries. From this perspective, as the leading Japanese company
in the industrial gases field, and one of the four major global
players, Nippon Sanso Holdings has a stable management base.
Now, with heavy manufacturing industries in a contraction
phase, the Company faces the challenge of shifting to growthfields. However, high-tech industry, such as semiconductors,
also requires industrial gases, and these are expected to provide
further growth opportunities.

Q

What are you excited about in your appointment as
an outside director?

A

I am sure that as a global company, Nippon Sanso Holdings
faces a variety of risks in advancing its business. I think the roleof outside directors is to discern the opportunities and risks
when executive officers have made a proposal and judge it
dispassionately. I hope to make correct judgments based on myexperience. Also, I believe that Japan’s manufacturing industry
is lagging behind on international issues such as the SDGs andsustainability. As a manufacturer that has had to grapple withthe same concerns, I aim to contribute to Nippon Sanso Holdings
by facing difficulties together and making changes together.

NIPPON SANSO HOLDINGS CORPORATION102

INTEGRATED REPORT 2022

Q

What are you excited about in your appointment as
an outside director?

A

As an attorney, I have experienced the degree to which conflictinside an organization, such as trouble between employees, canhinder a company’s productivity and erode worker motivation.
I have also spent time researching how to resolve and prevent suchconflicts. I hope to share this knowledge with everyone at Nippon
Sanso Holdings, which is a global company, and help to invigorate
the organization. In addition, as we are now in an era wherelaws are applied across national boundaries, I also plan to contribute to thinking about compliance from a global perspective.

NIPPON SANSO HOLDINGS CORPORATION103

INTEGRATED REPORT 2022

Masako Miyatake
Outside Director

OUR MANAGEMENT

Members of the Board of Directors,
Audit & Supervisory Board Members, and Executive Officers* The self-introductions included in the list of directors, Audit & Supervisory Board members, and executive officers are intended to offer a more personal insight that cannot be gleaned froma career history. The officers wrote freely in reply to questions about their hobbies, recent interests, goals for the coming fiscal year, and favorite or recommended gas (including services andrelated products).

Members of the Board of Directors
Number of shares owned:
6,000 shares

April
1981 Joined the Company
July
2002 Executive vice president responsible for Specialty Gas Technology, Matheson Tri-Gas, Inc.
October 2005 Deputy general manager of Semiconductor Gas Section of Electronics Division, the Company
April2006 General manager of Semiconductor Gas Section of Electronics Division, the Company
January 2010	Subordinate directly to general manager of Electronics Division and general manager ofBusiness Strategy Promotion Section, the Company
June2014 Managing director, Nissan TANAKA CorporationJune
2016 Senior managing director, Nissan TANAKA CorporationJune
2017 President and representative director, Nissan TANAKA Corporation
June
2020 Director, executive vice president of the Company (Aide to the President)
June
2021 Representative Director, President CEO (current)

Attendance at Board of Directors’
meetings:
14 of 14 meetings
Committee assignments:
Advisory Committee on Appointments
and Remuneration,
Management Committee,
Global Strategy Review Committee,
Global Risk Management Committee

Looking back over the past year, the Company’s growth has been much greater and more dynamic than my own. Also, I feel that I
haven’t made enough effort on my personal growth. Since I can’t do any exercise that has a high risk of injury or accident, my entire
exercise consists of walking during my commute. These days I enjoy observing the trees and flowers in my neighborhood and feeling theseasons, growing plants at home, and spending time with my grandchildren. Recently, when I see any small children, not only my grandchildren, I am struck by how amazing mothers are. I wish I had been more sensitive to this some 30 years ago.

Members of the Board of Directors
Number of shares owned:
0 shares
Attendance at Board of Directors’
meetings:
13 of 14 meetings
Committee assignments:
Global Strategy Review Committee,
Global Risk Management
Committee

April
1981 Joined Argon S.A.
January 1992 Director of Marketing, responsible for Spain and Portugal, Argon S.A.
September 1996 Director of Business Development, responsible for Europe, Praxair España, S.L.
January 2000 Director of Marketing, responsible for Europe, Praxair Euroholding S.L.
October 2004 CEO, Germany, Praxair Euroholding S.L.
January 2006 CEO, Germany and Benelux, Praxair Euroholding S.L.
April
2008 CEO, Praxair España S.L. (now Nippon Gases Espana S.L.U.); CEO, Praxair Portugal S.A.
December 2016 President, Praxair Euroholding S.L.
December 2018 Chairman and President, TNSC Euro-Holding S.L.U. (now Nippon Gases Euro-Holding S.L.U.) (current)June2019 Director of the Company (current)

I have spent my entire professional life working in the industrial gases business, in which I landed straight after finishing my mechanicalengineering studies and my military service. I studied engineering because in my hometown, a very industrial town, the engineering school
had an extremely strong reputation and solid prestige. As an engineering student, I was sent to the artillery division in the military, where I
finished my service as a second lieutenant. Until I was offered my first general management assignment (in Germany in 2004), my whole
career had been spent in sales and marketing. I was fortunate to be assigned, over the years, jobs in liquid applications, specialty gases
marketing, packaged gases marketing, overall marketing for Spain and Portugal, and finally overall marketing for Europe. My hobbies
include golf, hiking, building model ships, reading (fiction and non-fiction), and chess.

Member of the Board,
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

Toshihiko Hamada
Representative Director, President CEO

Number of shares owned:
11,500 shares

April
June
April

1981 Joined the Company
2013 Executive officer, general manager of North Kanto Branch2016 	Executive officer, deputy general manager of Industrial Gases Division, general manager of Gases Business Unit,
and general manager of Product Management Unit
June
2016 	Senior executive officer, deputy general manager of Industrial Gases Division, general manager of Gases Business
Unit, and general manager of Product Management Unit
April
2017 Senior executive officer, and general manager of Industrial Gases Division
June
2018 Senior managing executive officer, director, and general manager of Industrial Gases Division
October 2020 Director of the Company, and representative director and president of Taiyo Nippon Sanso Corporation (current)

Attendance at Board of Directors’
meetings:
14 of 14 meetings
Committee assignments:
Global Strategy Review Committee,
Global Risk Management
Committee

What I want to strive toward in FYE2023 is “mass activity,” which is one of the key concepts in the Yozai Kanri (preparatory material
management) approach that the Company is currently implementing. My mass activity is to increase dialogue with those on the front line,
which has been difficult to accomplish as a result of the COVID-19 pandemic. I want to hear about a variety of things, such as the new
medium-term management plan and workplace issues, and to talk about them. In my personal time, my habit is to spend days off walking
with my wife and our dog in various parks. I was never particularly fond of animals, but we started to keep a dog about two years ago at
my daughter’s request. Since then, I’ve become quite affectionate of our family dog, but I’m still afraid of large dogs if they approach me at
the dog run.

Kenji Nagata

Eduardo Gil Elejoste

Number of shares owned:
2,300 shares
Attendance at Board of Directors’
meetings:
14 of 14 meetings
Committee assignment:
Advisory Committee on
Appointments and Remuneration

April
1967 Joined General Secretariat of Japan Fair Trade Commission
June2000 Secretary general, Japan Fair Trade Commission
December 2003 Commissioner, Japan Fair Trade Commission
April2009 Senior advisor to Jones Day
June2010 Audit & Supervisory Board member, Daiichi Sankyo Co., Ltd.
March 2014 Audit & Supervisory Board member, The Yokohama Rubber Co., Ltd.
June
2014 Director, Watahan & Co., Ltd.
June
2015 Outside director of the Company (current)
March 2018 Chairman, Fair Trade Institute (current)

I joined Japan’s Fair Trade Commission in 1967, and have been involved in numerous operations. The commission has a strong image
as the regulatory agency in charge of dealing with collusion and cartels, but it is really an economic agency involved in various activities
for maintaining and promoting a competitive environment for the Japanese economy. We believe that there cannot be growth withoutcompetition. Since retiring, I have had roles as an audit & supervisory board member at Daiichi Sankyo Co., Ltd. and The Yokohama RubberCo., Ltd., and teaching competition law at Doshisha University. I also participated in a study group with academics and corporate law
experts in Kyoto, and participated in a working group for thinking about the growth of Japanese companies with managers of listedcompanies in Tokyo.

Akio Yamada

Member of the Board,
Representative Director and President,
Taiyo Nippon Sanso Corporation

Member of the Board(Outside Director)

Number of shares owned:
0 sharesJuly
1981 Joined BOC Group, plc
January 2000 Vice president, general manager responsible for Eastern Region, BOC Group, plc
January 2005 Executive vice president responsible for Industrial Gas Group, Matheson Tri-Gas, Inc.
January 2008 Senior executive vice president and COO, Matheson Tri-Gas, Inc.
June
2009 President and COO, Matheson Tri-Gas, Inc.
January 2013 President and CEO, Matheson Tri-Gas, Inc
June2017 Chairman, President, and CEO, Matheson Tri-Gas, Inc.
April
2019 Chairman and CEO, Matheson Tri-Gas, Inc. (current)June2019 Director of the Company (current)

Attendance at Board of Directors’
meetings:
13 of 14 meetings
Committee assignments:
Global Strategy Review Committee,
Global Risk Management
Committee

I have been in the industrial gas industry for over 40 years and have performed in both operating and sales positions. My principle goal
is to continue to reduce and ideally eliminate injury to members of our Team. One example of how we are pursuing this goal is we havecommitted resources to achieve automation of tasks that involve significant repetitive material handling. Commercially, we believe our
integrated portfolio of products gives Matheson a competitive advantage that can be leveraged in the form of cross-selling to Customers
who have a need for multiple product categories. Longer term, we are motivated by the challenge to continue to optimize the capital
investments made in expanding our production network and reducing the carbon intensity of our operations.

Number of shares owned:
1,500 shares
Attendance at Board of Directors’
meetings:
14 of 14 meetings
Committee assignment:
Advisory Committee on
Appointments and Remuneration

April
1978 Appointed as a public prosecutor assigned to Tokyo District Public Prosecutors OfficeJuly1989 First secretary of Embassy of Japan in Germany
April2005 Assistant vice minister, Ministry of Justice (responsible for general policy integration)
December 2010 Superintending prosecutor, Takamatsu High Public Prosecutors OfficeJune2012 Superintending prosecutor, Hiroshima High Public Prosecutors OfficeJuly2014 Resigned from superintending prosecutor position
October 2014 Registered as an attorneyJune2015 Outside director of the Company (current)
March 2017 Director of Shimano Inc. (current)

I was formerly involved in policy creation in Japan’s Ministry of Justice. Implementing new policies requires new language for persuading
people around you. I have worked on general anti-crime measures with the slogan “making Japan the world’s safest country again” andhave assisted legal system reforms in Asian countries with the slogan “supporting law and order in Asia.” Now, as an individual, I am
searching for a slogan to encourage Japanese society facing the challenges of low growth and super aging.

Thomas Scott Kallman

Mitsuhiro Katsumaru

Member of the Board,
Chairman and CEO, Matheson Tri-Gas, Inc

Member of the Board(Outside Director)

NIPPON SANSO HOLDINGS CORPORATION104

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION105

INTEGRATED REPORT 2022

OUR MANAGEMENT

Members of the Board of Directors, Audit & Supervisory Board Members, and Executive Officers

Members of the Board of Directors
Number of shares owned:
0 sharesJune
1988 Director, Hara Estate K.K. (current)
October 2017 Founder and partner, Tax Corporation Yokohama Benten Accounting, Inc. (current)June2020 Outside director, SECOM Co., Ltd. (current)June2021 Outside director of the Company (current)

Attendance at Board of Directors’
meetings:
10 of 10 meetings

Audit & Supervisory Board Members
Number of shares owned:
9,000 shares
Attendance atBoard of Directors’ meetings:
14 of 14 meetings

April
1979 Joined the Company
June2013 Manager of Corporate Audit OfficeJune2014 Executive officer and manager of Corporate Audit Office
January 2015 Executive officer assigned to Mitsubishi Chemical Holdings Corporation (now Mitsubishi Chemical Group Corporation)
March 2017 Resigned from executive officer position
April
2017 	Executive officer, manager of Industrial Gases Strategy Office in Corporate Strategy Division,
Mitsubishi Chemical Holdings Corporation (now Mitsubishi Chemical Group Corporation)
March 2018 Resigned from executive officer position at Mitsubishi Chemical Holdings Corporation
April
2018 General manager of Corporate Planning Office of the Company
June2018 Audit & Supervisory Board member (current)

Committee assignment:
Advisory Committee on Appointments
and Remuneration

Attendance at
Audit & Supervisory Board meetings:
17 of 17 meetings

At university, I majored in management and accounting. After marrying and raising children, I obtained a tax accountant qualificationand established a tax accounting office. Subsequently, I was appointed as the first female director of SECOM Co., Ltd. In 2021, I also
became the first female director of Nippon Sanso Holdings, and in 2022, the number of female outside directors has increased to two.
We will combine our strengths to provide a female perspective to help the Company.

My hobby is visiting shrines and temples. When I put myself in the vicinity of power spots that have existed since ancient times, I feelenergized and refreshed, physically and mentally. When I was a student, I often visited shrines and temples in Kyoto and Nara. After
starting work, I visited shrines and temples near my office. For FYE2023, my goal is to complete my list of shrines and temples to visit in the
Kanto area. One of the Company’s services that I recommend is having lettering put onto THERMOS products. I think this option would be
widely used for exchanging presents with family and friends, as well as for events.

Miri Hara
Junzo Tai

Member of the Board(Outside Director)

Audit & Supervisory Board Member

Number of shares owned:
0 shares

April
April

1980 Joined Hitachi, Ltd.
2006 	General manager of Nuclear Power Business Development & Management Division, Nuclear Systems Division,
Power Systems Group, Hitachi, Ltd.
October 2008 Vice president of Hitachi Power Systems America, Ltd. (now Mitsubishi Power Americas, Inc.)*
October 2010 General manager of Global Business Division, Power Systems Company, Hitachi, Ltd.
January 2011 	General manager of Global Business Division, Power Systems Company, Hitachi, Ltd.and
CSO of Hitachi-GE Nuclear Energy, Ltd.
April
2012 	Corporate officer for Hitachi, Ltd,; General manager of Hitachi Works, Power Systems Company,
Power Systems Group, Hitachi, Ltd.
April
2014 Managing corporate executive officer, President & CEO of Power Systems Company, Power Systems Group, Hitachi, Ltd.
April
2016 Managing corporate executive officer, CEO of Nuclear Business Unit, Hitachi, Ltd.
April
2017 	Senior corporate officer for Hitachi, ltd., general manager of Global Nuclear Business Division,
Nuclear Business Unit, Hitachi, Ltd.
April
2019 Chairman of the Board, Hitachi-GE Nuclear Energy, Ltd.
April
2020 Outside director, Sugino Machine Limited (current)June2022 Outside director of the Company (current)

Committee assignment:
Advisory Committee on
Appointments and Remuneration* The nuclear power-related business of the former Hitachi Power System America, Ltd. was transferred to Hitachi America, Ltd.

Katsumi Nagasawa
Member of the Board(Outside Director)

Today, I feel that both the world and myself as an individual are changing. As I approach my mid-60s, looking ahead 10 to 15 years
from now, I want to take on challenges in new fields that I have not experienced. Partly because of COVID-19 countermeasures, my only
hobby is playing golf with my wife. It has also been an excellent opportunity for us to revisit our relationship.
Familiar gases for me would be hydrogen generated by nuclear reactors and nitrogen for preventing it from combusting. While recognizing the hazardous nature of hydrogen, we are looking at using it with human wisdom together with technologies and nuclear power.

Number of shares owned:
0 shares

April
1983 Joined The Chase Manhattan Bank N.A (now JPMorgan Chase Bank, N.A.)
October 2002 Registered as an attorney (Deregistered in 2011 to study abroad and reregistered in 2014)
October 2002 Joined Koga & Partners
June2004 Joined Asahi & Koma Law Offices (now Nishimura & Asahi)
November 2014 Joined Nakano Law OfficeNovember 2014	Reconciliator, Dispute Reconciliation Center for Nuclear Damage Compensation regarding Fukushima Nuclear Plant,
Ministry of Education, Culture, Sports, Science and Technology (current)
April2015 Conciliation Commissioner, Tokyo Family Court (current)
April
2018 Joined Blakemore & Mitsuki (current)
December 2018 Deputy Secretary-General, Japan International Dispute Resolution Center (current)
March 2019 Outside director, SUMIDA CORPORATION (current)
April
2021 Professor, Keio University Law School (current)June2022 Outside director of the Company (current)

Committee assignment:
Advisory Committee on
Appointments and Remuneration

My life’s work as a lawyer has been in conflict resolution and conflict prevention within organizations. I search for effective resolution
for conflict through a combination of trial, mediation, arbitration, and negotiation. I believe that coaching and an ombudsman system withmediation skills are effective means for realizing conflict prevention and increasing communication inside an organization, and have been
making an effort to promote the spread of these methods. My hobbies are dancing and opera. I decided on the slogan “hydrogen gas willsave the earth.”

Number of shares owned:
600 shares

April
April

Attendance atBoard of Directors’ meetings:
14 of 14 meetings

April
April
July

Attendance at
Audit & Supervisory Board meetings:
17 of 17 meetings

April
April
May
June
June
June
June

1983 Joined The Fuji Bank, Limited (now Mizuho Bank, Ltd.)2010 	Executive officer and general manager of Americas Financial Products Division of Mizuho Corporate Bank, Ltd.
(now Mizuho Bank, Ltd.)2012 Managing executive officer in charge of branches, Mizuho Bank, Ltd. (to July 2013)2013 Managing executive officer in charge of corporate banking, Mizuho Corporate Bank, Ltd.
2013 	Managing executive officer in charge of corporate banking, Mizuho Bank, Ltd. (Mizuho Bank, Ltd. andMizuho Corporate Bank, Ltd. merged to form the current Mizuho Bank, Ltd.)2014 Senior general manager, Mizuho Bank, Ltd.
2014 Resigned from Mizuho Bank, Ltd2014 Senior general manager, Sharp Corporation2014 Director and executive managing officer, Sharp Corporation
2016 Resigned from Sharp Corporation
2016 Senior general manager, Mizuho Bank, Ltd.
2017 	Resigned from senior general manager position at Mizuho Bank, Ltd.
Outside auditor of the Company (current)

These past few years, I have gotten into the routine of running through my neighborhood every morning, weather permitting. I can feelthe change of the seasons through the trees, flowers, and stars, while the running helps to clear my head, and sometimes I notice something or realize something (not to say I realize anything particularly amazing). I hope to continue this routine for as long as I can. My
favorite gas is oxygen. It may be difficult to handle, but it feels deep.

Akihiro Hashimoto
Audit & Supervisory Board Member(Outside Auditor)

Number of shares owned:
0 shares
Attendance atBoard of Directors’ meetings:
14 of 14 meetings
Attendance at
Audit & Supervisory Board meetings:
17 of 17 meetings

April
1981 Joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation)June
2012 Executive officer and general manager of Corporate Management Office, Mitsubishi Chemical Holdings Corporation		(now Mitsubishi Chemical Group Corporation)
April
2015 Executive officer, general manager of Finance & Accounting Department, Mitsubishi Chemical Corporation
April
2017 	Managing executive officer (in charge of Corporate Management Department and Finance & Accounting
Department), Mitsubishi Chemical Corporation
April
2019 	Director and managing executive officer (in charge of Corporate Management Department and Finance &Accounting Department), Mitsubishi Chemical Corporation
March 2020 Resigned from director and managing executive officer position at Mitsubishi Chemical Corporation
April
2020 Advisor to the Company
June2020 Outside auditor (current)This past year and a half I have been relentless in sticking to online English conversation classes twice a day and golf practice.
Considering my age at 64, I’m arguably old for learning something new, and at first I felt a little like I had waited too long. However, every
day I’m really seeing the truth of that old saying about the power of persistence. The acquisition of the European business has made theCompany a gas major for the first time, and as a member of it I hope to continue contributing in the same spirit as before, toward realizing
the ideas of the new medium-term management plan.

Masako Miyatake

Masahiro Osada

Member of the Board(Outside Director)

Audit & Supervisory Board Member(Outside Auditor)

NIPPON SANSO HOLDINGS CORPORATION106

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION107

INTEGRATED REPORT 2022

OUR MANAGEMENT

Members of the Board of Directors, Audit & Supervisory Board Members, and Executive Officers

Audit & Supervisory Board Members
Number of shares owned:
0 shares

Executive Officers

April
April

1985 Joined The Fuji Bank, Limited (now Mizuho Bank, Ltd.)2012 	Executive officer, general manager of Corporate Banking Division No. 13, Mizuho Corporate Bank, Ltd.
(now Mizuho Bank, Ltd.)
April
2014 Managing executive officer, head of Investment Banking Unit, Mizuho Financial Group, Inc.
		Managing executive officer, head of Investment Banking Unit, Mizuho Bank, Ltd.
April
2016 Managing executive officer in charge of Specific Business of Global Corporate Company, Mizuho Financial Group, Inc.
		Managing executive officer, head of Global Corporate Division, Mizuho Bank., Ltd
April
2017 Senior general manager, Mizuho Financial Group, Inc.
March 2019 Resigned from senior general manager position at Mizuho Financial Group, Inc.
April
2019 Audit & Supervisory Board member (full-time), Mizuho Human Service Co., Ltd.
March 2020 Resigned from Audit & Supervisory Board member (full-time) position at Mizuho Human Service Co., Ltd.
April
2020 Senior general manager, Mizuho Financial Group, Inc. (current)June2020 Resigned from senior general manager at Mizuho Financial Group, Inc.
		
Outside auditor of the Company (full-time)
October 2020 Audit & Supervisory Board member of Taiyo Nippon Sanso Corporation (current)

Attendance atBoard of Directors’ meetings:
14 of 14 meetings
Attendance at
Audit & Supervisory Board meetings:
17 of 17 meetings

This is my second year as an Audit & Supervisory Board member, and there is still a lot that I have yet to see of the industrial gases
business, both globally and locally. I strive to dig down to the root of each matter that I encounter in audits, analyzing and discussing themso that I can make useful proposals to the Company. In my personal life, I am really into voice training, which I started three years ago, andrecently feel as though I have finally grasped the idea of projecting my voice from my abdomen. I’m hopeless at it but I love it.

Kazuya Kobayashi
Audit & Supervisory Board Member(Outside Auditor),

April
1984 Joined the Company
November 1991 	Assigned to the Thermos company (USA)
November 2001 Corporate planning Department, President office, Administrative Division
April
2006 General manager of Secretariat Office (in charge of project promotion)
April
2013 	General manager of Corporate Communications Department, Corporate
Administration Division
April
2014 	General manager of Project Department, Corporate Planning & Global
Operations Division

After a two-year blank period due to the pandemic, in FYE2023 I am anxious to take as many opportunities as possible to meet inperson with people at overseas operating companies and talk with them about the medium-term management plan and business growthstrategies.
In my time off, I go to concerts with friends from my junior high school days and play golf with high school friends and my family. Also,
once I started looking after some tropical fish that my son left at our house, I found that I quite enjoy it, and my next small project is toinstall a carbon dioxide additive device for the water weed.

1986	Joined the Ministry of International Trade and Industry (at the time)
Head of Energy Conservation Measures Department, Head of Product Safety
Department, Head of Chemical Control Department
Also served as head of Examination Department, Patent Office, Deputy AssistantMinister of the Minister’s Secretariat (in charge of Industrial Safety), and others
July2017	Retired from the Ministry of Economy, Trade and Industry
December 2017	Joined the Company. General manager of Technological Affairs Division
June
2018	Executive officer, deputy general manager of Technological Affairs Division
June
2019	Executive officer, general manager of Technological Affairs Division, Chief
Sustainability Officer (CSO)
October 2020	Executive officer, general manager of Group Technological Affairs &Environment Office, CSO, Nippon Sanso Holdings Corporation; Executive
officer, general manager of Technological Affairs Unit, project leader of
KAITEKI Promotion Project, Taiyo Nippon Sanso Corporation

Taiyo Nippon Sanso Corporation

April

2021	Executive officer, general manager of Group Technological Affairs &Environment Office, CSO, Nippon Sanso Holdings Corporation; Senior
executive officer, head of Technological Affairs Unit, project leader of KAITEKI
Promotion Project, Taiyo Nippon Sanso Corporation
June
2021	Senior executive officer, general manager of Group Technological Affairs &Environment Office, CSO, Nippon Sanso Holdings Corporation; Senior
executive officer, head of Technological Affairs Unit, project leader of KAITEKI
Promotion Project, Taiyo Nippon Sanso Corporation
November 2021	Senior executive officer, general manager of Group Sustainability
Management Office, CSO, Nippon Sanso Holdings Corporation; Senior
executive officer, head of Technological Affairs Unit, project leader of KAITEKI
Promotion Project, Taiyo Nippon Sanso Corporation (current)

Takeshi MikiI wouldn’t go so far as to call it a hobby, but I do enjoy listening to music and watching or playing sports. I often watch YouTube at home. Recently, I checkthe channels of Kaze Fujii and Shingo Katayama. I also enjoy watching comedy. My favorite four-character idiom is fukusen kaishu (revealing something that wasforeshadowed). I don’t have a favorite gas, in particular, but I do feel that there may still be much for us to learn about gas. For example, it would be amazing if
we were able to achieve in-vivo imaging using O! I would like to see the Company create something that creates a buzz. That might be my target for FYE2023!
17

Executive Officers
April
April
June

April
April

Kazuyuki Futamata
Senior Managing Executive Officer,
Taiyo Nippon Sanso Corporation GCCO

1980 	Joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical
Corporation)
2003	Director, manager of Human Resources Operations Center, Alpastaff Inc.
2011	Executive officer, general manager of Human Resources Division,
Mitsubishi Chemical Corporation; Executive officer, general manager ofCEO’s office, Mitsubishi Chemical Holdings Corporation (now Mitsubishi
Chemical Group Corporation)2013 	Executive officer, Mitsubishi Rayon Co., Ltd. (now Mitsubishi Chemical
Corporation) (responsible for Internal Control Division)2015 	Executive officer, Mitsubishi Rayon Co., Ltd. (responsible for Human Resources,
General Affairs, Information Systems, and Internal Control divisions); Executive
officer, general manager of Human Resources Office, Mitsubishi Chemical
Holdings Corporation (now Mitsubishi Chemical Group Corporation)

1985 Joined the Company
2008 	General manager of Finance Department, General Affairs Division2015 	Executive officer, deputy general manager of Human Resources Department
2016 Executive officer, general manager of Human Resources Department
2017 	Executive officer, general manager of HR Division, general manager ofCorporate Planning Office, CHO
October 2020 	Executive officer, general manager of Group Human Resources & Corporate
Secretariat Office, general manager of Human Resources Department, CHO,
Nippon Sanso Holdings Corporation; General manager of Human Resources
Department, Member of the Board, senior executive officer, Taiyo Nippon
Sanso Corporation

Senior Executive Officer,
Member of the Board,
Senior Executive Officer,
Taiyo Nippon Sanso Corporation2017 	Director and managing executive officer, CCO (responsible for Human Resources,
General Affairs, and Internal Control divisions), Mitsubishi Chemical Corporation
January 2019 	Joined the Company. Managing executive officer, Chief Compliance Officer(CCO) (Taiyo Nippon Sanso Corporation GCCO), with responsibility forgroupwide internal control
June2019 	Director and managing executive officer, CCO (Taiyo Nippon Sanso Corporation
GCCO), with responsibility for groupwide internal control (current)June2021 	Managing executive officer, CCO (Taiyo Nippon Sanso Corporation GCCO),
with responsibility for groupwide internal control (current)

I have served as CCO for the entire Group since 2019. In my previous role at Mitsubishi Chemical Corporation, I experienced being incharge of personnel, information, and electronics-related business (including being stationed in Singapore), and of overseas operations(China). I also worked in the area of internal controls. Guided by my creed, “fortune is unpredictable and changeable,” I work to promotecompliance and risk management with an awareness that “what happens out in the world can definitely happen in the Company too.” I
revitalize myself by going to see Japanese traditional puppet theater called “BUNRAKU,” the Takarazuka Revue, and live musicals.

April
August
June
June
April

Satoshi Wataru

April

April

June

2021 	Executive officer, general manager of Group Human Resources & Corporate
Secretariat Office, general manager of Human Resources Department, CHO,
Nippon Sanso Holdings Corporation; General manager of Human Resources
Department, Member of the Board, senior executive officer, Taiyo Nippon
Sanso Corporation
2021 	Senior executive officer of Group Human Resources & Corporate Secretariat
Office, general manager of Human Resources Department, CHO, Nippon
Sanso Holdings Corporation; General manager of Human Resources
Department and Head of Corporate Unit, Member of the Board, senior
executive officer, Taiyo Nippon Sanso Corporation (current)

September 1993 Senior Accountant, Lumsden & McCormick, LLP
September 1996 Internal auditor, Praxair, Inc.
April
1999 Financial analyst, Praxair, Inc.
June
2000 Finance manager Global Supply Systems, Praxair, Inc.
June
2002 North Region, controller, Praxair, Inc.
May
2004 Director of Revenue and Volume, Praxair, Inc.

108

INTEGRATED REPORT 2022

Senior Executive Officer
Senior Executive Officer,
Taiyo Nippon Sanso CorporationJune
2005 Director of Accounting and Operations Controller, Praxair, Inc.
March 2009 Finance director & global controller, Praxair Surface Technologies
December 2014 VP Finance, IT, & Operational Excellence, Praxair Surface Technologies
April2017 VP Finance, Praxair Euroholding S.L.
December 2018 CFO, TNSC Euro-Holding S.L.U. (now Nippon Gases Euro-Holding S.L.U.)
October 2020 Executive officer & CFO of the Company (current)

I started my professional career in public accounting, where I earned my certified public accounting license in the State of New York.
The next company I joined in 1996 was an industrial gases company, and I have been in the industrial gases business ever since.
Throughout my career, I have been afforded the opportunity to live in three different countries on three different continents, each with
distinctive cultures, characteristics, and wonderful people. I enjoy every new challenge that comes along. My goal is to always bring pastexperiences, learnings, and knowledge forward with me to strengthen the Group. In my personal time, I enjoy cooking, reading, traveling,
and watching American football. I am an avid fan and supporter of my hometown football team, the Buffalo Bills!

Alan David Draper
Executive Officer

April
February
January
June
April

1986	
Joined Kokusai Electric Co., Ltd. (now Hitachi Kokusai Electric Inc.)
1998	
Joined Nippon Philips Co. Ltd. (now Philips Japan, Ltd.)
2006	
General manager of Legal Affairs Department, Philips Japan, Ltd.
2008	
Joined the Company, deputy general manager of Legal Affairs Department,
General Affairs Division2012	
General manager of Legal Affairs Department, General Affairs Division

July
2015	
General manager of Legal Affairs Department
October 2020	
Officer of Group Legal Office, Nippon Sanso Holdings Corporation; General manager ofLegal Affairs Department, Taiyo Nippon Sanso CorporationJune
2022	
Executive officer, Officer of Group Legal Office, Nippon Sanso Holdings Corporation;
General manager of Legal Affairs Division, Taiyo Nippon Sanso Corporation

I joined the Company as a mid-career hire in 2008. Before that, I worked for electronics manufacturers in Japan and Europe, and I’ve
always worked in legal affairs since I was young. When I was a child, I loved watching professional baseball, and last year my team won thechampionship, so I’ve been having a bit of baseball fever. I subscribed to a music streaming service recently, and I’m interested in listening
to various genres and finding new artists that I like.

I joined the Company in 1985, and have experience working in information systems, personnel, plant operations, secretarial duties,
finance, and various other management-related roles. The Company and society have both changed dramatically over these past decades,
but I don’t think that the social mission of industrial gases has changed at all. Looking ahead, I hope to continue carrying out my duties
without losing my sense of mission and sincerity for supporting the lives of people. In my own time, I am a railway enthusiast. I really value
spending time with many friends talking about work and about our hobbies and so on, while enjoying a meal (and a drink) and having fun
listening to music.

NIPPON SANSO HOLDINGS CORPORATION

Tsutomu Moroishi
Senior Executive Officer

April

Part-Time Audit & Supervisory Board Member,

November 2014 	Deputy general manager of Corporate Planning & Global Operations DivisionJune
2015 	Executive officer, deputy general manager of Corporate Planning & Global
Operations Division
June
2018 Executive officer, general manager of Global Operations Division
October 2020 Executive officer, general manager of Group Corporate Planning OfficeJune2021 	Senior executive officer, general manager of Group Corporate Planning Office(current)

Yutaka Okuda
Executive Officer,
Executive Officer,
Taiyo Nippon Sanso Corporation

NIPPON SANSO HOLDINGS CORPORATION109

INTEGRATED REPORT 2022

OUR MANAGEMENT

Skills Matrix of Corporate Officers

We believe that for the Board of Directors to function effectively it must consist of a diverse team of directors who have a broad
range of knowledge and experience in corporate management. To this end, we have defined the knowledge and experience thatplay important roles in Group management across eight categories: (1) Corporate management, (2) Finance and accounting,

Name

PositionsClassification
Committee positions

Toshihiko Hamada

Representative Director,
President CEO

Member of the Advisory Committee on
Appointments and Remuneration

Kenji Nagata

Member of the Board,
Representative Director and President,
Taiyo Nippon Sanso Corporation

Thomas Scott Kallman

Member of the Board,
Chairman and CEO,Matheson Tri-Gas, Inc.

Eduardo Gil Elejoste

Member of the Board,
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

Akio Yamada

Member of the Board(Outside Director)

Independent outside director
Chairman of the Advisory Committee
on Appointments and Remuneration

Mitsuhiro Katsumaru

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Miri Hara

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Katsumi Nagasawa

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Masako Miyatake

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Junzo Tai

Audit & Supervisory Board member

Akihiro Hashimoto

Audit & Supervisory Board member(Outside Auditor)

Masahiro Osada

Audit & Supervisory Board member(Outside Auditor)

Kazuya Kobayashi

Audit & Supervisory Board member(Outside Auditor)

Corporate
management

Finance andaccounting(3) Legal and risk management, (4) Sales and marketing, and (5) Development and technology. We will strive to enhance theeffectiveness of the Board of Directors further by assigning people with knowledge and experience in these categories to theright places at the right time.

Legal andrisk management

Sales andmarketing

Development andtechnology

Experience working
overseas

Experience working
in other companies

Independent outside director

Independent outside director* Details on the definition of table headings
Corporate management: Experience serving as CEO, executive, or executive officer of a listed company or CEO of a local subsidiary of a global company
Experience working in other companies: Experience working outside of the NSHD Group’s companies or the parent company Group’s companies* The chart does not present all of the officers’ knowledge and experience.

NIPPON SANSO HOLDINGS CORPORATION110INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION111

INTEGRATED REPORT 2022

Independence

INFORMATION

11-Year Financial and Non-Financial Summary(Millions of yen)Japanese GAAP
2012.3

IFRS
2013.32014.32015.32016.32016.32017.32018.32019.32020.32022.32021.3

957,169—

Revenue
Net sales—
477,451—
468,387—
522,746—559,373—641,516

594,421—581,586—

646,218—

740,341—

850,239—818,238—

Selling, general and administrative expenses

125,526

125,503

138,052

149,151

182,051

161,169

165,071

178,690

204,789

242,129

233,276

259,204

—

—

—

—

—

47,45654,73660,03365,81990,33787,251

102,71031,067

24,884

31,48935,29743,362

48,92553,664

59,862

66,86393,921

88,846

101,183

—

—

—

—

—

29,03034,74048,91941,291

53,34055,214

64,103

21,200(2,071)

20,194

20,76425,845

—

—

—

—

—

—

—

—

—

—

—

—

320,457

351,576

386,457

406,602409,344

513,164

628,714

Total equity

219,611224,253

298,475

341,207337,974

—

—

—

—

—

—

—

Total assets

—

—

—

—

—

787,505

924,281

931,047

1,771,015

1,751,732

1,836,294

1,977,026

Total assets

607,024

615,820731,677

782,357

783,248

—

—

—

—

—

—

—

Interest-bearing liabilities

241,121

253,424

278,063266,276

274,424

266,215

359,528

326,959

1,005,402

998,389

949,242929,217Core operating profit*1
Operating profit
Profit attributable to owners of parent
Profit (loss)
Total equity attributable to owners of parent

Net interest-bearing liabilities*2

206,524

228,681219,727

212,855

223,638

215,492

304,308

274,968

945,782

898,384

858,183

835,520

Cash flows from operating activities

45,98633,96456,716

58,61581,55573,34774,596

83,19998,685150,084

149,231

148,760

Cash flows from investing activities(32,748)(37,225)(55,295)(30,583)(82,130)(74,252)(147,082)(52,088)(754,969)(62,629)(59,686)(70,858)

Cash flows from financing activities(23,536)(8,181)

27,884(33,866)(1,825)(2,385)80,777(39,859)

664,925(46,242)(103,159)(77,946)

Free cash flow

13,238(3,261)

1,421

28,032

(575)

(905)

(72,486)

31,111(656,284)

87,45589,544

77,902

Cash and cash equivalents

34,596

24,74358,33653,42050,78550,72355,22051,991

59,620100,005

91,05893,697

Capital expenditures*3

31,452

31,71532,53235,201

53,611

52,657

43,79662,56976,65781,017

74,69782,036

Investment and loans receivable*2

8,035

5,672

35,7495,710

32,94125,507102,034

4,556

691,126

733

1,361

2,080

Depreciation and amortization

30,471

29,40033,50735,56844,864

39,69640,04843,266

56,111

83,79886,38092,435

Amortization of goodwill

2,472

2,719

3,668

4,959

7,352

—

—

—

—

—

—

—

Research and development costs

3,458

3,177

3,170

3,430

3,348

3,238

3,323

3,255

3,494

3,389

3,315

3,569

Profit (EPS) (Yen)

53.33(5.25)

49.42

47.98

59.72

67.08

80.28

113.0495.42

123.26127.59148.13

Annual dividends per share (Yen)

12.0

12.0

12.0

13.0

16.0

16.0

20.0

23.0

25.0

28.0

30.0

34.0

Dividend payout ratio (%)

22.5

—

24.3

27.1

26.8

23.9

24.9

20.3

26.2

22.7

23.5

23.0

Core operating profit margin (%)

6.5

5.3

6.0

6.3

6.8

8.2

9.2

9.3

9.0

11.0

10.9

10.6

Operating profit margin (%)

—

—

—

—

—

8.0

9.4

9.3

8.9

10.6

10.7

10.7

EBITDA margin*4

—

—

—

—

—

—

—

16.0

16.5

20.5

21.2

20.4
59.2

Overseas revenue ratio (%)

24.3

27.6

31.4

35.0

44.4

40.7

40.8

43.3

47.9

55.5

56.1

Selling, general and administrative expenses / revenue

26.3

26.8

26.4

26.7

28.4

27.1

28.4

27.7

27.7

28.5

28.5

27.1

Return on equity (ROE) (%)*5

10.8

(1.0)

8.4

7.0

8.2

9.1

10.3

13.3

10.4

13.1

12.0

11.2

Return on capital employed (ROCE)*6

7.0

5.5

6.2

6.2

7.4

8.1

8.4

8.4

6.2

6.4

6.1

6.8

ROCE after Tax*7

—

—

—

—

—

—

—

6.1

4.5

4.6

4.4

4.8

1.03

1.12

0.80

0.67

0.71

0.67

0.87

0.71

—

—

—

—

—

—

—

—

—

—

—

—

1.54

1.45

1.15

0.94
2,331

Net debt-to-equity (D/E) ratio (Times)
Adjusted net D/E ratio (Times)*8
Share price (March 31) (Yen)

584

638

812

1,639

1,068

1,068

1,302

1,611

1,686

1,601

2,104

Price earnings ratio (PER) (Times)

10.95

—

16.43

34.16

17.88

15.92

16.22

14.25

17.67

12.99

16.49

15.74

Number of employees (Consolidated)*9

11,588

11,468

12,955

13,142

14,127

14,107

15,86015,345

18,974

19,341

19,155

19,172

Gas Business in Japan

—

—

—

—

—

—

—

5,985

6,171

6,292

6,295

6,465

Gas Business in the United States

—

—

—

—

—

—

—

4,820

4,916

4,724

4,534

4,406

Gas Business in Europe

—

—

—

—

—

—

—

—

2,589

2,794

2,884

2,912

Gas Business in Asia and Oceania

—

—

—

—

—

—

—

3,161

4,026

4,195

4,114

4,102

Thermos Business

—

—

—

—

—

—

—

1,379

1,272

1,336

1,328

1,287

Female employees as a percentage of the total labor force (Consolidated) (%)

—

—

—

—

—

—

—

17.8

19.1

19.6

20.1

20.5

Employee turnover rate (Consolidated) (%)

—

—

—

—

—

—

—

7.6

6.2

6.1

5.7

7.1

Energy consumption (TJ)*10

—

—

—

44,62047,59947,59962,516

67,61372,014

109,512104,142

117,586
14,352

Waste generated (including valuable materials) (Tonnes)*11, *12

—

—

—

—

—

2,834

2,917

2,910

3,023

3,762

14,715

Water withdrawal (Ten thousands of m3)

—

—

—

791

816

816

1,014

1,092

1,362

3,002

4,335

4,591

GHG emissions (Scope 1) (Thousands of tonnes CO2e)*13

—

—

—

—

—

—

9

19

14

1,061

987

1,087

GHG emissions (Scope 2) (Thousands of tonnes CO2e)*13
GHG emissions (Scope 3) (Thousands of tonnes CO2e)*13, *14

—
—

—
—

—
—

—
—

—
—

—
—

3,363
—

3,838
3,671

4,056
3,634

4,747
3,667

4,664
4,341

4,834
3,408

*1 Core operating profit is calculated by subtracting losses (non-operating items) produced by non-recurring factors from operating profit. Non-recurring factors include structural reform charges, including costs associated with business downsizing or withdrawal; special severance payments; losses due to disasters or major accidents; and other factors such as the disposal of idle assets. *2 The standard changed in FYE2019 compared to previous fiscal years.
*3 The figures are based on construction, in accordance with the presentation in the annual securities report. *4 Earnings before interest, tax, and depreciation and amortization *5 Return on equity (ROE) is calculated as profit
attributable to owners of parent divided by average shareholders’ equity. Average shareholders’ equity is the average of shareholders’ equity at beginning of period and shareholders’ equity at end of period; where shareholders’equity is calculated as net assets – non-controlling interests. *6 Return on capital employed (ROCE) = Core operating profit / (outstanding interest-bearing debt + equity attributable to owners of parent) *7 Return on capital
employed (ROCE) after tax = Net operating profit after tax (NOPAT) / (outstanding interest-bearing debt + equity attributable to owners of parent)* *Using the average of the year-end balance of the previous fiscal year and the current fiscal year. *8 Adjusted net D/E ratio = (Net interest-bearing debt – equity-type debt) / (equity attributable to owners of the parent + equity-type debt). Equity-type debt is debt procured through hybrid financing that has beenrecognized as equity credit by ratings agencies (50% of the procured amount); hybrid financing is a form of debt financing that has features resembling equity, including voluntary deferral of interest, extremely long-term redemption
periods, and subordination during liquidation or bankruptcy procedures. This kind of financing does not cause stock dilution, and a certain ratio of the funds procured in this way can be recognized as equity credit by rating agencies
provided that certain conditions are met. *9 From FYE2018, we aggregated the actual results as of the fiscal year-end of each Group company. Due to differences in the fiscal year-ends, the aggregated data includes some results as

NIPPON SANSO HOLDINGS CORPORATION112

INTEGRATED REPORT 2022

of December 31. To reflect a revision of this aggregation method, we have retroactively revised the figures presented in the previous fiscal year for FYE2018 to FYE2020. *10 The energy of the consumed fuels is calculated based on the
gross calorific values specified in Japan’s Act on the Rational Use of Energy. Purchased electricity and purchased steam are converted into primary energy amounts. *11 Beginning FYE2021, main overseas consolidated subsidiaries areincluded in the reporting boundary for the amount of waste generated. *12 To improve the accuracy of data aggregation, values presented in FYE2021 have been retroactively amended. *13 GHG emissions in Japan are calculatedusing emission factors provided in Japan’s Act on Promotion of Global Warming Countermeasures (for electricity, up until FYE2021 the basic emission factors for each electricity provider and from FYE2022 the adjusted emission factors
for each provider). For GHG emissions overseas, Scope 1 emissions are calculated using emission factors set forth in Japan’s Act on Promotion of Global Warming Countermeasures. Scope 2 emissions are calculated using countryspecific emission factors published by the IEA. However, for electricity in Europe, beginning FYE2021 a separate emission factor for each electricity provider is used, and emissions are calculated making reference to the Guarantee ofOrigin. Furthermore, from FYE2022, emissions from electricity use at Taiyo Gases Co., Ltd. and Top Thermo Manufacturing (Malaysia) Sdn. Bhd are calculated using emissions coefficients for each electricity provider, while emissions
from electricity use in the United States, China, Taiwan, and Singapore are calculated using published grid coefficients for each country. *14 Due to a revision of the aggregation method, figures presented in previous fiscal years havebeen retroactively amended.
For information about the reporting boundaries for environmental data, please refer to Non-Financial Highlights (▶P.114).

NIPPON SANSO HOLDINGS CORPORATION113

INTEGRATED REPORT 2022

INFORMATION

Non-Financial Highlights

Indicators withmark have been assured by KPMG AZSA Sustainability Co., Ltd.

GHG Emissions

Energy Consumption

Number of Employees by Segment (Consolidated)

Number of Employees by Gender (Consolidated)Thousands of tonnes CO2e

Terajoules (TJ)

Number of individuals

Number of individuals

6,000

5,808
499 1

5,000

871

4,000

3,856
492 1

4,070
488 1

3,000

1,033

1,087

2,330

2,494

2,273

2019

2020

5,651
511 11
1,049

2,164

2,066

5,921
638

120,000

15

100,000

885

80,0002,130

60,000

2,000
1,000
0

40,000

2018

2,014

2,253

2021

2022

117,586
109,512240
10,952
104,1429,437 13174
9,201
28,46825,06824,96067,613
9,188 1472,0149,174 14

23,282

24,50737,94636,17235,12938,31937,04833,63537,442

2018

2019

2020

2021

2022

18,974
1,272

19,341
1,336

19,155
1,328

19,172
1,287

15,345
1,379

4,026

4,195

4,114

4,102

3,161

2,589

2,794

2,884

2,912

4,820

4,916

4,724

4,534

4,406

10,000

5,985

6,171

6,292

6,295

6,465

5,000

2018

2019

2020

2021

2022

20,00015,00010,00040,484

15,34515,0000(Years ended
March 31)

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries

The majority of GHG emissions of the Nippon Sanso Holdings Group is emissions from ASUs and the HyCO
business. Due to a global recovery in gas demand, GHG emissions increased year on year to 5,921 thousandsof tonnes CO2e

In the energy usage of the Nippon Sanso Holdings Group, approximately 85% is electricity used by ASUs andapproximately 9% is fuel for the HyCO business. Due to a global recovery in gas demand, energy consumption increased year on year to 117,586 TJ.

Electricity Consumption

Water Withdrawal

Gigawatt hours (GWh)

Ten thousands of m3

0(Years ended
March 31)

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries

10,013945 1

10,000
8,000
6,000
4,000
2,000
0

6,874
919 1
2,385

7,290
912 1

2,464

2,511

2,861

9,592
908 16

4,000

2,762

2,442
2,824

4,335
205 17The consolidated number of employees for FYE2022 was 19,172. Investments in the European businessthrough M&A resulted in the addition of European personnel in FYE2019. Despite changes in each segment
since then, the overall number has remained level.

3,114

3,569

3,866

3,742

3,402

3,783

2018

2019

2020

2021

2022

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries

3,000

3,002
229

2,000

1,317

1,092
198
365
529

1,000
0

(Years ended
March 31)

1,362
222
457

2018

724

683

732

676

746

2019

2020

2021

2022

Millions of yen

12,000

8,000

4,000

0

5,691
2,910

117

3,023

3,762
80

2,793

2,943

3,675

2018

2019

2020

(Years ended
March 31)

3,255
3,000

593

3,494
48

614

34

3,389
658

39

3,315
589

3,569
32

19.6

20.1

20.5

13.7

13.7

14.6

14.8

12,611

15,353

15,54615,307

15,233

2018

2019

2020

2021

2022

659

2021

%

2,846

0

(Years ended
March 31)

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries* In FYE2021, main overseas consolidated subsidiaries were added to the reporting boundary.
* To improve the accuracy of data aggregation, values presented in FYE2021 have been retroactively amended.

2018

2019

2,691

2020

Gas Business in Japan
Gas Business in the United States
Gas Business in Asia and Oceania
Thermos Business

2,694

2,872

2021

2022

(Years ended
March 31)

Gas Business in Europe

Research and development costs in FYE2022 increased year on year to ¥3,569 million. In research anddevelopment, we work on the development of new products and technologies for various fields, basedon our proprietary gas technology, which will contribute to earnings growth.

GHG emissions: GHG emissions in Japan are calculated using emission factors provided in Japan’s Act on Promotion of Global Warming Countermeasures (for electricity, up until FYE2021 the basic emission factors for each electricity
provider and from FYE2022 the adjusted emission factors for each provider). For GHG emissions overseas, Scope 1 emissions are calculated using emission factors set forth in Japan’s Act on Promotion of Global WarmingCountermeasures. Scope 2 emissions are calculated using country-specific emission factors published by the IEA. However, for electricity in Europe, beginning FYE2021 a separate emission factor for each electricity provider is used,114

INTEGRATED REPORT 2022

7.1

2.10

6.2

6.1

2019

2020

5.7

6.0

0.73

0.73

0.64

0.52

2019

2020

2021

2022

2.0

0

(Years ended
March 31)

2018

2021

2022

(Years ended
March 31)* Numbers above are aggregated from actual figures of the Nippon Sanso Holdings Group companies as ofthe end of each fiscal year. Due to differences in the reporting periods, part of the data includes figures as ofthe end of December.

The lost-time work injury frequency rate in FYE2022 decreased to 0.52 at Taiyo Nippon Sanso Corporation,
while also decreasing to 2.10 for the Nippon Sanso Holdings Group overall as other regions shows the samegeneral trend. We continue to prevent occupational accidents through measures including the analysis ofcauses of occupational accidents and proposal of countermeasures, as well as providing education for increasing employees’ ability to recognize danger.

The employee turnover rate in FYE2022 was 7.1%. Hereafter, we will continue taking steps to retain humanresources by executing measures to enable employees to feel a sense of worth and achievement in their work
to improve employee engagement.

Employment Ratio of Persons with Disabilities(Taiyo Nippon Sanso; as of June 1 each fiscal year)

Internal Directors and Independent Outside Directors
Number of individuals

5.0

%

10

100

8

2.0

Since FYE2021, the Company has disclosed industrial waste generated by its main overseas consolidated
subsidiaries. Industrial waste generated by the Nippon Sanso Holdings Group decreased year on year to
14,352 tonnes, as a decrease in the amount of waste generated by specialty gas plants in the Gas Business in
the United States outweighed the impact of adding gas filling stations in the Gas Business in Europe to thereporting boundary in FYE2022.
* Waste generated by the Gas Business in Japan is the volume for which the Company issued a manifest.

NIPPON SANSO HOLDINGS CORPORATION

7.6

2.51

Taiyo Nippon Sanso Group
Nippon Sanso Holdings Group
Reporting boundary: Consolidated subsidiaries with production divisions in Japan and overseas* To improve the accuracy of data aggregation, values presented in past fiscal years have been retroactively
amended.

2,000

2,612

0.0
(Years ended
March 31)

Employee Turnover Rate (Consolidated)

4.0

4,187
2022

2018

3.0

2,909

2.20

20.0

10.0

37

1,000

5,505

0

%

4,000

3,486
87

0.45

729

707

Research and Development Costs

2,371
758 395 1,399

3,939

4.0
1.00

Tonnes

14,352

3,848

Looking at the consolidated labor force by gender, as of the end of FYE2022, there were 15,233 male
employees and 3,939 female employees. The Nippon Sanso Holdings Group has actively promoted career
opportunities for female employees, and the percentage of female employees out of the total labor force
rose 0.4 percentage point from the previous fiscal year-end. The percentage of female managers was up 0.2
percentage point from the previous fiscal year-end. Hereafter, we will continue various measures to promote
career opportunities for female employees, such as improving working environments and improving systems.

2,703

2,730

The Nippon Sanso Holdings Group’s water withdrawal increased significantly, with the inclusion in the reporting
boundary of the acquired HyCO business and the Gas Business in Europe from FYE2020 and the water withdrawal
in the HyCO and liquid carbon dioxide plants of the Gas Business in Europe from FYE2021. Water withdrawal for
FYE2022 was 4,591 ten thousands of m3, a slight increase over the previous fiscal year.

2,366

3,795

40.0

2.00

Waste Generated (Including Valuable Materials)

14,715

3,621

19.1

8.0

2.68
2.32

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Gas production facilities and business sites with facilities specified under the Water
Pollution Prevention Act belonging to consolidated subsidiaries of Nippon Sanso Holdings Corporation in
Japan and main overseas consolidated subsidiaries

Production processes for industrial gases use a significant amount of electric power. The bulk of the Nippon
Sanso Holdings Group’s electric power consumption goes to the operation of ASUs. Due to a global recovery
in gas demand, electric power consumption increased year on year to 10,776 GWh.

16,0003.00

19,172

Male (Left scale)
Female (Left scale)
Female employees as a percentage of the total labor force (Right scale)
Female managers as a percentage of total managerial positions (Right scale)* Numbers above are aggregated from actual figures of the Nippon Sanso Holdings Group companies as of theend of each fiscal year. Due to differences in the reporting periods, part of the data includes figures as of theend of December.

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business* Numbers above are aggregated from actual figures of the Nippon Sanso Holdings Group companies as of theend of each fiscal year. Due to differences in the reporting periods, part of the data includes figures as of theend of December.

4,591
393 2019,155

30.0

17.8

0

(Years ended
March 31)Frequency Rate of Occupational Accidents Resulting
in Lost Workdays*

5,000

10,776
1,094 23

19,341

2,734* The frequency rate expresses the frequency of accidents resulting in lost workdays in a fiscal year,
calculated as the number of injuries/deaths due to occupational accidents per million work hours

12,00018,9749.5

5,000
20,000%20,000

2.2

2.3

2.3

6

2.5

2.0

4

1.0

2

0

0

2018

2019

2020

2021

2022

(Years ended
March 31)

2

5

2

50

29
29

2018

2

2

7

7

3

2019

60

6

44

33

33

40

22

22

11

20

2020

2021

2022

33
4

80

0
(Years ended
March 31)

Internal directors (Left scale)
Independent outside directors (Left scale)
Percentage of directors serving concurrently as executive officers (Right scale)
Independent outside directors (Right scale)* Regarding the number of directors and outside directors, the President CEO is counted as an executive officer.

In FYE2022, individuals with disabilities accounted for 2.5% of our labor force, which is more than the legally
mandated rate for private-sector companies in Japan of 2.3%. The Nippon Sanso Holdings Group endeavors
to provide working environments in which individuals with disabilities can reach their full potential and tosupport the realization of a society that enables individuals with disabilities to play an active role that leverages
their abilities.

In FYE2022, the Board of Directors comprised six internal and three independent outside directors, withdirectors serving concurrently as executive officers accounting for 11.1% of the Board as a whole andindependent outside directors accounting for 33.3%. The Advisory Committee on Appointments andRemuneration, which is chaired by an independent outside director and comprises the President CEO andindependent outside directors, was established to improve the transparency and objectivity of procedures
for appointing and determining remuneration for directors.

and emissions are calculated making reference to the Guarantee of Origin. Furthermore, from FYE2022, emissions from electricity use at Taiyo Gases Co., Ltd. and Top Thermo Manufacturing (Malaysia) Sdn. Bhd are calculated using
emissions coefficients for each electricity provider, while emissions from electricity use in the United States, China, Taiwan, and Singapore are calculated using published grid coefficients for each country.
For information on main subsidiaries, please see Sustainability Data (▶P.122).

NIPPON SANSO HOLDINGS CORPORATION115

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Material Balance and Environmental Contribution of the Nippon Sanso Holdings Group

Environment
Unit

Raw material

EnergyFuels

Energy consumption ratio
by segment

1.0% 1.3%

0.2%

1.5%

11,856 TJ
104,976 TJ(107.76 million kWh)Electric power

INPUT

Energy consumption ratio
by facility

117,586 TJ

Heat

754 TJ

Water

4,591 ten thousands of m3

Water supply fromlocal government

10.2%

9.3%
31.8%
24.2%

86.0%
34.4%

1,759 ten thousands of m3

Groundwater

271 ten thousands of m3

Surface water

2,558 ten thousands of m3

Air separation
HyCO business
Liquid carbon dioxide businessDistribution
Other

3 ten thousands of m3

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asiaand Oceania
Thermos Business

BUSINESSACTIVITIESOtherOUTPUTAir separation

HyCO business

GHG Emissions

5,921 thousands of tonnes CO2e

Scope 1

1,087 thousands of tonnes CO2e

Scope 2

4,834 thousands of tonnes CO2e

Distribution

GHG emissions ratio
by facility

GHG emissions ratio
by segment

1.4% 1.1%

0.2%
10.8%

18.0%

2,988 ten thousands of m3

Wastewater

Liquid carbon dioxidebusiness

1.1%

15.0%

38.1%

14,352 tonnes

Waste emissions

78.4%

3,875 tonnes

Waste disposed of as landfill* Please refer to P.117–P.119 for the reporting boundary and waste amount calculation method.
Indicators with mark have been assured by KPMG AZSA Sustainability Co., Ltd. with respect toactual results for FYE2022.

Air separation
HyCO business
Liquid carbon dioxide businessDistribution
Other

36.0%

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asiaand Oceania
Thermos Business

GHG Emission Reduction Contribution
6,865 thousands of tonnes CO2e*1
Products and services*2

Industrial gases*3, *4

3,176
thousand of tonnes CO2e

3,689
thousand of tonnes CO2e

Indicators with mark have been assured by KPMG AZSA
Sustainability Co., Ltd.

*1 For details on the reporting boundaries and calculation methods, please refer to P.128, “Calculation
Methods for GHG Emission Reduction Contribution.”*2 GHG emission reduction contribution for products and services is calculated in accordance with the
Guidelines for Quantifying GHG Emission Reductions of Goods or Services through Global Value
Chain (Ministry of Economy, Trade and Industry).
*3 GHG emission reduction contribution from the use of industrial gases*4 GHG emission reduction contribution through industrial gases includes the reduction contribution of
consolidated subsidiaries in Japan, Europe, Asia and Oceania, and certain affiliated companies.

NIPPON SANSO HOLDINGS CORPORATION

116

FYE2022

FYE2021

Greenhouse Gas (GHG) Emissions

Material Balance
Air, natural gas, by-product gas(CO2 raw material)

FYE2020

INTEGRATED REPORT 2022

GHG Emissions Scope 1

Thousands oftonnes CO2e

1,061

987

1,087

GHG Emissions Scope 2

Thousands oftonnes CO2e

4,747

4,664

4,834

GHG Emissions Scope 3—Total for the Following Categories*

Thousands oftonnes CO2e

3,667

4,341

3,408

Category 1
Purchased goods and services

Thousands oftonnes CO2e

883

883

897

Category 2*
Capital goods

Thousands oftonnes CO2e

65

44

42

Category 3
Thousands ofFuel- and energy-related activities not included in Scope 1 and Scope 2 tonnes CO2e

276

248

276

Category 4
Upstream transportation and distribution (Including transportation
services whose cost is borne by the Company)

Thousands oftonnes CO2e

40

37

39

Category 5
Waste generated in operations

Thousands oftonnes CO2e

N/A

2

1

Category 6
Business travel

Thousands oftonnes CO2e

1

1

1

Category 7
Employee commuting

Thousands oftonnes CO2e

3

3

3

Category 8
Upstream leased assets

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 9
Downstream transportation and distribution

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 10
Processing of sold products

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 11
Use of sold products

Thousands oftonnes CO2e

1,583

2,436

1,466

Category 12
End-of-life treatment of sold products

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 13
Downstream leased assets

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 14
Franchises

Thousands oftonnes CO2e

N/A

N/A

N/A

Category 15
Investments

Thousands oftonnes CO2e

816

687

683

Reporting boundary: Scope 1 emissions and Scope 2 emissions represent Nippon Sanso Holdings and its main consolidated subsidiaries. For information on Scope 3 emissions aggregation, pleaserefer to P.126–P.127.
Scope 1 emissions: Direct emissions occurring from sources owned or controlled by the company
Scope 2 emissions: Indirect emissions from the use of electricity, steam, and heat
Scope 3 emissions: Indirect emissions other than Scope 2 emissions
GHG emissions in Japan are calculated using emission factors provided in Japan’s Act on Promotion of Global Warming Countermeasures (for electricity, up until FYE2021 the basic emission factors for each electricity provider and from FYE2022 the adjusted emission factors for each provider). For GHG emissions overseas, Scope 1 emissions are calculated using emission factors set forthin Japan’s Act on Promotion of Global Warming Countermeasures. Scope 2 emissions are calculated using country-specific emission factors published by the IEA. However, for electricity inEurope, beginning FYE2021 a separate emission factor for each electricity provider is used, and emissions are calculated making reference to the Guarantee of Origin. Furthermore, fromFYE2022, emissions from electricity use at Taiyo Gases Co., Ltd. and Top Thermo Manufacturing (Malaysia) Sdn. Bhd are calculated using emissions coefficients for each electricity provider, whileemissions from electricity use in the United States, China, Taiwan, and Singapore are calculated using published grid coefficients for each country. Please refer to P.126–P.127 for calculation
method for Scope 3 emissions.
Indicators with mark have been assured by KPMG AZSA Sustainability Co., Ltd. for FYE2022.
* Due to a revision of the aggregation method, figures presented in previous fiscal years have been retroactively amended.

NIPPON SANSO HOLDINGS CORPORATION117

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

FYE2020

Unit

FYE2022

FYE2021

Products and Services
Industrial Gases

FYE2020

FYE2021

FYE2022

Waste

Contributions to Environmental Protection through Products

GHG Emission Reduction
Contribution

Unit

Thousands of tonnes CO2e

2,373

―

Thousands of tonnes CO2e

3,176
3,689

2,892
2,174

See P.128 for details about reporting boundaries and the calculation methods.

Energy Usage

Energy Consumption
Electric power
Fuels
Heat

109,512
97,483
11,378651

Terajoules
Terajoules
Terajoules
Terajoules

104,142
93,40010,004
738

117,586
104,976
11,856754

Waste generated*1
Waste disposed of as landfill*2
Hazardous waste generated*3
Waste recycled*4

TonnesTonnesTonnesTonnes

3,762
284
197
2,381

14,715*5
7,152
1,799*5
4,885*5

14,352
3,875
2,015
7,623

Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries
Beginning FYE2021, main overseas consolidated subsidiaries are included in the reporting boundary. Waste generated by the Gas Business in Japan is the volume for which the Company issued
a manifest.
*1 Includes valuable materials *2 Includes residue after intermediate treatment outside the Group company *3 Includes specially controlled industrial waste*4 We consider waste collected to be the amount of resources recycled. *5 To improve the accuracy of data aggregation, values presented in FYE2021 have been retroactively amended.

Reporting boundary: Nippon Sanso Holdings and its main consolidated subsidiaries
The energy of the consumed fuels are calculated based on the gross calorific values specified in Japan’s Act on the Rational Use of Energy. Purchased electricity and purchased steam are converted into primary energy amounts.

The figures for chemical oxygen demand (COD) emissions, nitrogen emissions in wastewater, and phosphorus emissions have been omitted from disclosure since the amounts of these emissions
have been immaterial. The Nippon Sanso Holdings Group uses water primarily for indirect cooling, and its impacts on water quality are therefore not large. Taiyo Nippon Sanso and its Japanesesubsidiaries have five business sites that are subject to restrictions on the concentration of COD, nitrogen, and phosphorous emissions in wastewater. The total amounts of COD, nitrogen, andphosphorous emissions for all five sites amount to less than one tonne each.

Environmental Impact

GHG Emissions

Nitrogen oxide (NOx) emissions
Sulfur oxide (SOx) emissions
Particulate emissions
Volatile organic compound (VOC) emissions

Tonnes

3.2
1.4
0.1
10

1.8
1.0
0.1
5

2.0
1.1
0.1
8

Tonnes21

8

10

TonnesTonnesTonnesReleases of substances designated under the Pollutant Release
and Transfer Register (PRTR)*

Water Usage
Breakdown ofsources of fresh water
withdrawnTen thousands of m3
Ten thousands of m3
Ten thousands of m3
Ten thousands of m3
Ten thousands of m3
Ten thousands of m3

Thousands of tonnes CO2e
Thousands of tonnes CO2e
Thousands of tonnes CO2e
Thousands of tonnes CO2e
Thousands of tonnes CO2e
Thousands of tonnes CO2e

5,808
2,273
2,164
871
499
1

5,651
2,014
2,066
1,049
511
11

5,921
2,253
2,130
885
638
15

109,51237,04837,94625,0689,437
13104,142
33,63536,172
24,9609,201
174

117,586
37,442
40,48428,468
10,952240

10,013
3,742
2,861
2,464
945
1

9,592
3,402
2,824
2,442
908
16

10,776
3,783
3,114
2,762
1,094
23

3,002
732
724
1,317
229

4,335
676
707
2,730
205
17

4,591
746
729
2,703
393
20

3,762
3,675

14,715*2
5,505
5,691
758
395
2,366*2

14,352
4,187
3,486
2,909
1,399
2,371

Energy Consumption

Reporting boundary: Consolidated subsidiaries in Japan, including Taiyo Nippon Sanso Corporation* Due to a revision of the aggregation method, figures presented in previous fiscal years have been retroactively amended.

Water Withdrawal
Water supply from local government
Municipal waterIndustrial water
Groundwater
Surface water
Other

GHG Scope 1 + Scope 2
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business

3,002
1,496
429
1,067
276
1,230

Ten thousands of m3

4,591
1,759
576
1,183
271
2,558
3

4,335
1,472
490
982
258
2,602
3

̶

Reporting boundary: Gas production plants operated by consolidated subsidiaries of Nippon Sanso Holdings in Japan, business locations with facilities specified under the Water Pollution
Prevention Act, and main overseas consolidated subsidiaries

Total
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos BusinessThousands of gigajoules
Thousands of gigajoules
Thousands of gigajoules
Thousands of gigajoules
Thousands of gigajoules
Thousands of gigajoules

Electricity Consumption

Total
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos BusinessMillions of kWhMillions of kWhMillions of kWhMillions of kWhMillions of kWhMillions of kWh

Water Withdrawal

Result of Water Stress Level Survey Results
The NSHD Group conducts a survey on water stress over all of its production sites in order to apprehend the risks related to use of water
resources and facilitate more effective response to water risks. Using the Aqueduct water risk evaluation tool developed by the World Resources
Institute, we surveyed water stress at 119 sites, with the following results.
* Water risk category: Baseline water stress
Upper level: Water usage (thousand m3), lower level: Number of production sites

High

Medium–highMediumMedium–low

Low

Japan

0
(0/24)

0(0/24)

1,834(6/24)

4,675(15/24)488(3/24)The United States840(5/44)

305(3/44)

1,469(13/44)490(4/44)

4,122(19/44)

Europe752(7/29)

0(0/29)

9,521(8/29)

249(3/29)

16,489(11/29)Asia and Oceania

270(3/20)

115(1/20)

724(5/20)

797(6/20)

1,805(5/20)

Thermos

0
(0/2)

0
(0/2)

0
(0/2)

84
(1/2)

111
(1/2)

Overall

1,862(15/119)420(4/119)13,548(32/119)

6,295(29/119)

23,015(39/119)

Total
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business

Ten thousands of m3
Ten thousands of m3
Ten thousands of m3
Ten thousands of m3
Ten thousands of m3

̶

Ten thousands of m3

Waste Generated (Including Valuable Materials)*

1

Total
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business

TonnesTonnesTonnes―――Tonnes87

TonnesTonnes*1 Beginning FYE2021, main overseas consolidated subsidiaries are included in the reporting boundary. Waste generated by the Gas Business in Japan is the volume for which the Company
issued a manifest.
*2 To improve the accuracy of data aggregation, values presented in FYE2021 have been retroactively amended.

• FYE2022 data
• Conducted a water stress survey using the Aqueduct water risk evaluation tool
• Reporting boundary: Production sites with ASU, HyCO, or liquid carbon dioxide facilities with annual water withdrawal of 20,000 m3 or more and Thermos

NIPPON SANSO HOLDINGS CORPORATION118

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION119

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Society
Unit

FYE2020

FYE2021

FYE2022

Employees and Diversity (Consolidated)

Unit

FYE2020

FYE2022

FYE2021

Employees, Diversity, and Work–Life Balance (Registered employees of Taiyo Nippon Sanso Corporation)
Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals

Employees*
Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business

19,341

19,155

19,172

Employees

6,292

6,295

6,465

Employees by gender

4,724

4,534

4,406

Male

2,794

2,884

2,912

Female

4,195

4,114

4,102

1,336

1,328

1,287

Employees by gender
Number ofindividuals
Number ofindividuals

Male
FemaleNumber ofindividuals

2,024

2,065

2,075

Number ofindividuals
Number ofindividuals

1,775

1,789

1,784

249

276

291

20s and below

%

18.9

19.5

19.8

30s

%

19.7

20.1

20.3

Employees by age group (Composition ratio)

15,54615,307

15,233

40s

%

29.6

27.6

25.7

3,795

3,848

3,939

50s and above

%

31.8

32.9

34.2

Employees by age group (Composition ratio)

Years of consecutive service

20s and below

%

16.8

16.6

16.4

Overall average

Years

17.9

17.8

17.8

30s

%

24.8

24.6

25.0

Men

Years

18.5

18.5

18.6

40s

%

29.0

28.6

30.1

Women

Years

13.8

12.9

13.3

50s and above

%

29.4

30.2

28.5

Average age

Years

41.9

42.3

42.4

New hires

Number ofindividuals

109

102

85

%

3.1

2.8

3.3

Hours

31,20032,16016,320Years of consecutive service
Overall average

Years

12.4

11.3

11.4

Employee turnover rate*1

Men

Years

12.7

11.7

11.5

Companywide employee training hours*2

Women

Years

11.5

9.5

11.1

New employee training hours

Average age

Years

41.0

42.3

44.2

Employee training hours

New hires

Number ofindividuals

2,095

1,893

2,917

Unions members

Hours

13,897

17,716

21,504

Number ofindividuals

1,146

1,195

1,214

%

56.6

57.8

58.5

0

0

0

Employee turnover rate

%

6.1

5.7

7.1

Union members as a percentage of the total number of employees

Female employees as a percentage of the total number of employees

%

19.6

20.1

20.5

Layoffs*

Female managers as a percentage of total managerial positions

%

13.7

14.6

14.8

Female employees as a percentage of total number of employees

%

12.3

13.4

14.0

Female managers as a percentage of total managerial positions

%

1.5

1.5

1.5

* Aggregated from actual figures of the Nippon Sanso Holdings Group companies as of the end of each fiscal year. Due to differences in the reporting periods, part of the data includes figures asof the end of December.

Number ofindividuals

3

Employment ratio of persons with disabilities (as of June 1 of each fiscal year)
Employees and Diversity (Non-Consolidated)

Number of employees reemployed after retirement

Number ofindividuals

̶

81 *

86 *

Number ofindividuals
Number ofindividuals

̶

66

71

̶

15

15

Female employees as a percentage of the total number of employees

%

̶

18.5

17.4

Female managers as a percentage of total managerial positions

%

̶

4.1

3.6

Employees
Employees by gender
Male
Female* Includes employees working concurrently for Taiyo Nippon Sanso Corporation (47 employees in FYE2021, 49 employees in FYE2022)

NIPPON SANSO HOLDINGS CORPORATION

120

INTEGRATED REPORT 2022

Employees using childcare leave systems
Men
Women
Employees using nursing care leave or long-term nursing care leave
Usage rate for annual paid leave*4

%

2.3

2.3

2.5

Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals

64

74

82

7

16

19

0

6

6

7

10

13

0

0

0

%

62.5

60.2

61.5

0

0

0

Number ofindividuals

Employees using volunteer leave system*1 Employee turnover rate is the number of employees leaving the Company during the fiscal year (including mandatory-age retirees and excluding personnel transferring to other Group companies) divided by the number of employees at the end of the fiscal year
*2 Reporting boundary: Training hours of Taiyo Nippon Sanso Corporation employees and Taiyo Nippon Sanso Group employees who took training held by Taiyo Nippon Sanso Corporation*3 Employees leaving the Company for reasons attributable to the Company (dismissals)*4 T he number of new days granted in the reporting year is the denominator. The number of days used in the reporting year is the numerator. The denominator does not include the number ofdays carried over from the previous fiscal year.

NIPPON SANSO HOLDINGS CORPORATION121

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Unit

FYE2020

FYE2021

FYE2022

GovernanceUnit

FYE2020

FYE2022

FYE2021

Activities of Committees

Others (Consolidated)

Expenditures on social contribution initiatives

Millions of yen

49.4

109.7

84.5

Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals

Management Configuration
Internal directors* Data is calculated on a consolidated basis from FYE2021.

Independent outside directors

9

9

9

7

7

6

2

2

3

4

3

1

Occupational Health and Safety

Directors serving concurrently as executive officers

Frequency rate of occupational accidents resulting in lost workdays(Number of injuries / fatalities due to occupational accidents per million work hours)

Percentage of directors serving concurrently as executive officers

%

44.4

33.3

11.1

Nippon Sanso Holdings Group (Including Taiyo Nippon Sanso Group)

ー

2.20*

2.51*

2.10

Independent outside directors as a percentage of total Board of
Directors’ members

%

22.2

22.2

33.3

Taiyo Nippon Sanso Group

ー

0.73

0.64

0.52

Female directors as a percentage of total Board of Directors’ members

%

0.0

0.0

11.1

Term of appointment

Years

1

1

1

Frequency of Board of Directors’ meetings

Times

12

11

14

Attendance at Board of Directors’ meetings

%

99.1

98.0

98.4

%

100.0

100.0

100.0

0

0

0

4

4

4

1

1

1

2

2

2

* To improve the accuracy of data aggregation, values presented in past fiscal years have been retroactively amended.
Reporting boundary: Consolidated subsidiaries with production divisions in Japan and overseas

Attendance of independent outside directors at Board of Directors’ meetings

Reporting Boundary

Number of directors attending less than 75% of Board of Directors’ meetings

Main consolidated subsidiaries
Consolidated subsidiaries in Japan including Taiyo Nippon Sanso Corporation (International Carbon Dioxide Co., Ltd. added from FYE2022);
Matheson Tri-Gas, Inc.; Nippon Gases Euro-Holding S.L.U. and its consolidated subsidiaries; Leeden National Oxygen Ltd.; Leeden Gases Sdn. Bhd;
Nippon Sanso Ingasco, Inc.; Nippon Sanso Ingasco Philippines, Inc.; Nippon Sanso Ingasco Clark, Inc.; Nippon Sanso (Thailand) Co., Ltd.;
Ayutthaya Industrial Gases Co., Ltd.; Taiyo Gases Co., Ltd.; Nippon Sanso Vietnam Joint Stock Company; Taiyo Nippon Sanso India Pvt. Ltd.;
Shanghai Taiyo Nippon Sanso Gas Co., Ltd.; Suzhou Taiyo Nippon Sanso Gas Co., Ltd.; Dalian Changxing Island Taiyo Nippon Sanso Gas Co., Ltd.;
Dalian Taiyo Nippon Sanso Gas Co., Ltd.; Yangzhou Taiyo Nippon Sanso Semiconductor Gases Co., Ltd.; Matheson Gas Products Korea Co., Ltd.;
Nippon Sanso Taiwan, Inc.; Taiyo Nippon Sanso Engineering Taiwan, Inc.; Fu Yang Gas Co., Ltd.; Supagas Pty Ltd; Nippon Sanso Myanmar Co., Ltd.;Top Thermo Manufacturing (Malaysia) Sdn. Bhd; Vacuumtech Philippines Inc.

Beginning FYE2021, environmental data includes the HyCO plant and liquid carbon dioxide plant of Nippon Gases Euro-Holding S.L.U. and its
consolidated subsidiaries, Top Thermo Manufacturing (Malaysia) Sdn. Bhd. and Vacuumtech Philippines Inc.; and from FYE2022, data was addedfrom Nippon Gases Euro-Holding S.L.U. and its subsidiary filling sites, Leeden Gases Sdn. Bhd., and Matheson Gas Products Korea Co., Ltd.

Audit & Supervisory Board members
Internal Audit & Supervisory Board members
Independent outside Audit & Supervisory Board members

Number ofindividuals
Number ofindividuals
Number ofindividuals
Number ofindividuals

Independent outside Audit & Supervisory Board members as a percentage of total Audit & Supervisory Board members

%

50.0

50.0

50.0

Female Audit & Supervisory Board members as a percentage of total
Audit & Supervisory Board members

%

0.0

0.0

0.0

Frequency of Audit & Supervisory Board meetings

Times

16

16

17

Attendance at Audit & Supervisory Board meetings

%

92.2

100.0

100.0

Attendance of independent outside Audit & Supervisory Board members
at Audit & Supervisory Board meetings

%

89.6

100.0

100.0

Number of Audit & Supervisory Board members attending less than 75%
of Audit & Supervisory Board meetings

Number ofindividuals

1

0

0

Average age of directors and Audit & Supervisory Board members
Number of executive officers*
Female executive officers as a percentage of total executive officers

Years

64.3

64.8

65.8

Number ofindividuals

22

7

6

%

0.0

0.0

0.0

* Figures for FYE2021 represent executive officers of Nippon Sanso Holdings (including the President CEO). Figures for FYE2020 and earlier represent executive officers of Taiyo Nippon Sanso
Corporation (including the President CEO).

NIPPON SANSO HOLDINGS CORPORATION122

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION123

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Unit

FYE2020

FYE2022

FYE2021

FYE2020

Unit

FYE2022

FYE2021

Intellectual Property

Activities of Committees

Advisory Committee on Appointments and Remuneration
Members
Internal directors
Independent outside directors
Frequency of meetings
AttendanceManagement Committee
Members
Frequency of meetings
Attendance*1
Investment Committee
Members*2
Frequency of meetings
Attendance*1
Global Strategy Review Committee
Members
Frequency of meetings
Attendance
Global Risk Management Committee
Members
Frequency of meetings
Attendance
Global Compliance Committee
Members*3
Frequency of meetings*4
Attendance*1 Average attendance rate

Intellectual Property and Research and Development*2 Excluding additional attendees and Secretariat

Number of individuals
Number of individuals
Number of individuals
Times
%

3
1
2
11
100.0

3
1
2
6
100.0

5
2
3
10
100.0

17
16
97.1

13
6
100.0

13
11
100.0

12
2
100.0

15
1
93.3

15
3
93.3

Number of individuals
Times%
Number of individuals
Times%
Number of individuals
Times
%

̶
̶
̶

17
1
100.0

17
1
100.0

̶
̶
̶

17
1
100.0

18
1
100.0

20
0

20
0

8
1
87.5

Registered patents
Patents

1,255

1,578

1,591

Japan

Patents

802

925

941

Overseas

Patents

453

653

650

Total

* Figures through FYE2020 represent Taiyo Nippon Sanso Corporation patents only. The figures for FYE2021 onward represent the total for all NSHD Group operating companies combined.

NSHD Patents

Times%
Number of individuals
Times

̶

%
*3 Excluding attendees and Secretariat from FYE2022

̶

1%

1,800
1,500

1,255

1,200

1,094

1,147

900

328

373

453

738

774

802

2018

2019

2020

600
300
0

Number of individuals

Ratio of NSHD Patents by Business

Patents

Japan

Overseas

1,578

1,591

653

650

8%

11%
12%
925

34%

941

17%
2021

12%

2022 (Years ended

35%

Number of
Patents Overseas

Number of
Patents in Japan

941

20%

650

25%

March 31)

* Figures through FYE2019 represent the number of patents as of December 31 of
the previous fiscal year. The figures for FYE2020 onward represent the number ofpatents at fiscal year-end. Figures through FYE2020 represent Taiyo Nippon Sanso
Corporation patents only. The figures for FYE2021 onward represent the total for
all NSHD, including those of its operating companies.

25%

Industrial gases
Plant and engineering

Electronics-related products
MedicalThermos
Others

*4 Not held during FYE2020 or FYE2021 due to COVID-19

Research and Development
Remuneration for Officers

Research and Development

Remuneration for directors (excluding outside directors)
Millions of yen
Total
Millions of yen
Basic remuneration
Millions of yen
Corporate political contributions
Remuneration for Audit & Supervisory Board members (excluding independent outside members)
Millions of yen
Total
Millions of yen
Basic remuneration
Remuneration for independent outside directors
Millions of yen
Total
Millions of yen
Basic remuneration
Remuneration for independent auditors
Millions of yen
Total
Millions of yen
Remuneration for audit services
Millions of yen
Other remuneration for independent auditors

255
162
93

263
169
94

200
141
59

25
25

27
27

28
28

102
102

100
100

108
108

198
195
3

210
209
1

222
218
4

Not adopted
AdoptedNot adopted
AdoptedNot adopted
AdoptedAdopted(Internal)(Currently disclosed on
the Company website)

Millions of yen

3,389

3,315

3,569

Gas Business in Japan

Millions of yen

2,691

2,694

2,872

Gas Business in the United States

Millions of yen

658

589

659

Thermos BusinessMillions of yen

39

32

37

Total

OthersAnti-takeover measures
Code of ethics—

Policy on transparency of tax affairs——

Millions of yen
Corporate political contributions*
Number of violations
Violations of rules for the prevention of corruption
Monetary penalties incurred as a result of violations of guidelines forMillions of yen
the prevention of corruption

AdoptedAdopted(Currently disclosed on
the Company website)

0.0
0

0.0

０

0.2
0

0.0

0.0

0.0

* Reporting boundary is consolidated from FYE2022.

NIPPON SANSO HOLDINGS CORPORATION124

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

125

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Calculation Methods for Scope 3 GHG Emissions
Referenced Guidelines
Our Scope 3 GHG emissions are calculated based on the Corporate Value Chain (Scope 3) Accounting and Reporting Standard
issued by the GHG Protocol.
For emission factors, we used the emission factor database Ver. 3.1 provided in the Green Value Chain Platform, the Inventory
Database for Environmental Analysis (IDEA v2) for supply chain GHG emissions accounting, and information included in MiLCA
Ver. 2, a life-cycle assessment software developed by the Japan Environmental Management Association for Industry.
Reporting Boundary
Unless otherwise specified, the data covers Nippon Sanso Holdings and its consolidated subsidiaries in Japan, including
Taiyo Nippon Sanso Corporation.
Calculation Method by Category

Category 1
Purchased goods and services

Calculated by multiplying the amounts of products and services in physical or monetary units purchased by Taiyo Nippon Sanso Corporation by the respective emission factor for each type of productor service. However, emissions from transport and shipping services and from oxygen, nitrogen, andargon purchased from Taiyo Nippon Sanso’s consolidated subsidiaries or affiliates are included in thereporting boundary of Scope 1 or 2, or categories 4 and 15 of Scope 3, and are therefore deductedfrom the procured amounts used for this calculation.

Category 2
Capital goods

Calculated by multiplying the amounts of capital investment during each reporting fiscal year by anemission factor per price of capital goods.

Category 3
Fuel- and energy-related activities
not included in Scope 1 and 2This category includes emissions associated with the extraction, production, and transportation of­ urchased fuels and those consumed in the production of electricity and steam that are purchasedpby the Group.
Fuels: Calculated by multiplying the amount purchased during the fiscal year by an emission factor
for each fuel type.
Electricity and steam: Calculated by multiplying the amount purchased from outside the Group by
the upstream emission factor for each purchased energy reflecting electricity transmission loss.

Category 4
Upstream transportation and distribution (Including distribution services
whose cost is borne by the Group)

Calculated by subtracting the CO2 emissions from logistics subsidiaries, which are included in Scope 1
emissions, from the CO2 emissions reported for Taiyo Nippon Sanso Corporation and Nippon Ekitan
Corporation as specified shippers in accordance with the Act on Promotion of Global WarmingCountermeasures.
CO2 emissions related to transportation and distribution of products for which Taiyo Nippon Sanso
Corporation and Nippon Ekitan Corporation bear the transportation costs are included in this category.

Category 5
Waste generated in operations

Calculated by multiplying industrial waste output by the emission factors for each waste type(including transportation stages).

Category 6
Business travel

Calculated by multiplying the number of employees of consolidated subsidiaries in Japan, including
Taiyo Nippon Sanso Corporation by the emission factor (0.13 tonnes of CO2/person/year).

Category 7
Employee commuting

Taiyo Nippon Sanso Corporation employees: For train commuters, the annual payment for commuter
passes is multiplied by an emission factor per transportation expense. For car com­muters, the roundtrip distance is multiplied by the annual number of commuting days and an emission factor perperson-kilometer for passenger car.
Employees of Japanese consolidated subsidiaries: The number of employees is multiplied by theannual number of commuting days, and multiplied by the emission factor per commuting day.

NIPPON SANSO HOLDINGS CORPORATION126

INTEGRATED REPORT 2022

Category 8
Upstream leased assets

Since the amount of applicable lease assets is negligible, emissions in this category are not calculated.

Category 9
Downstream transportationand distribution

The emissions associated with the transportation of sold products whose cost is borne by Taiyo
Nippon Sanso Corporation and Nippon Ekitan Corporation fall within category 4 as the Group basically bears the cost of transporting products.

Category 10
Processing of sold products

The Taiyo Nippon Sanso Group’s main product group is gas, and since it is difficult to rationallycalculate the GHG emissions associated with the processing of these products, the emissions are
not calculated.

Category 11
Use of sold products

The amount of CO2 emissions generated from the use of propane gas (LP gas), liquid carbon dioxidegas, and dry ice, and from use of electricity for the operation of its ASUs during the service life,
which were sold to customers outside of the Taiyo Nippon Sanso Group.

Category 12
End-of-life treatment of sold products

The Taiyo Nippon Sanso Group’s primary products are gases (oxygen, nitrogen, and argon). After use,these gases return to the atmosphere and do not become waste. Furthermore, since the gas containers are loaned, and therefore the amount of waste from sold is negligible, emissions in this category
are not calculated.

Category 13
Downstream leased assets

Since the amount of applicable lease assets is negligible, emissions in this category are not calculated.

Category 14
Franchises

As the Group does not have any businesses in this format, there are no emissions in this category.

Category 15
Investments

Calculated by multiplying the GHG emissions of each of the eight affiliates of Taiyo Nippon Sanso
Corporation in Japan that produce gas by the Company’s shareholding ratio (as of the fiscal year-end).
The eight companies’ GHG emissions are based on their actual emissions in the reporting period.

NIPPON SANSO HOLDINGS CORPORATION127

INTEGRATED REPORT 2022

INFORMATION

Sustainability Data

Calculation Methods for GHG Emission Reduction Contribution

Independent Assurance Report

We include the following products and services sold by consolidated subsidiaries of Nippon Sanso Holdings and certain affiliatedcompanies in the calculation of GHG emission reduction contribution. The calculation method per product or service is as follows.
The CO2 emission factors used for electricity are 0.453 t-CO2/MWh in Japan, 0.402 t-CO2/MWh in Europe, and the emissions
factors published by the IEA for each country in Asia and Oceania.
Environmental product offerings
and applications
Products and services

Combustion-type exhaustgas abatement system
Reporting boundary: Consolidated
subsidiaries in Japan

SF6 recovery service
Reporting boundary: Consolidated
subsidiaries in JapanSCOPE-JET®
Reporting boundary: Consolidated
subsidiaries in JapanMG Shield®

Reporting boundary: Consolidated
subsidiaries in Japan

New refrigerants
Reporting boundary: Consolidated
subsidiaries in Europe

Nitrogen gas supply system
for laser processing (PSA)
Reporting boundary: Consolidated
subsidiaries in Japan

Shuttle Chef®
Reporting boundary: Consolidated
subsidiaries in Japan

Hydrogen station
Reporting boundary: Consolidated
subsidiaries in Japan
Industrial gases

Oxygen-enriched combustion in blast furnaces
Reporting boundary: Consolidated
subsidiaries in Japan and Europe,and affiliated companies in Japan

Oxygen-enriched combustion in electronic furnaces
Reporting boundary: Consolidated
subsidiaries in Europe and Asiaand Oceania

Argon (Ar) welding
Reporting boundary: Consolidated
subsidiaries in Europe

Calculation method for GHG emission reduction

Independent Assurance Report
To the Representative Director, President CEO of Nippon Sanso Holdings Corporation

Calculation period
FYE2020

FYE2021

FYE2022

We were engaged by Nippon Sanso Holdings Corporation (the “Company”) to undertake a limited assurance engagement of the envi-

Contribution to GHG emission reduction through products and services using the Nippon Sanso Holdings Group’s proprietary technologies

ronmental and social performance indicators marked withAn average processing capacity of 0.6 L/min for nitrogen trifluoride (NF3) gas per one combustion-type exhaustgas abatement system was assumed, and this value was multiplied by the number of such systems that were
installed in FYE2019 and FYE2022, the number of operating hours per year, and the global warming potential(GWP) of NF3 to calculate the GHG emission reduction contribution. The amount of CO2 emissions from fuelused in combustion equipment was deducted

included in its Integrated Report 2022 (the “Report”) for the fiscal year ended March 31, 2022.

The volume of sulfur hexafluoride (SF6) gas recovered in FYE2022 was multiplied by its GWP to calculate GHG
emission reduction contribution.

Based on actual observed values at two electronic furnace manufacturers who had introduced SCOPE-JET®, theelectricity-saving effect per volume of jet oxygen (kWh/Nm3) was calculated. The ratio of the number of plantsthat have introduced SCOPE-JET® to the total number of electric furnace manufacturing plants was multipliedby the volume of crude steel products by electric furnaces in Japan in FYE2022, and the resulting number was
assumed to be the production volume of crude steel contributed by the electricity saving from SCOPE-JET®. The
amount of oxygen consumed by SCOPE-JET® in the production of this crude steel, and the amount of electricity
saved per volume of oxygen were multiplied by the CO2 emission factor for electricity to calculate the GHG emission reduction contribution. The amount of the CO2 emissions generated during the manufacture of the oxygen
was deducted.
The amount of SF6 gas whose use was avoided through use of MG Shield® sold in FYE2022 was multiplied by thegas’ GWP to calculate the GHG emission reduction contribution.

○

○

○

(the “Indicators”) for the period from April 1, 2021 to March 31, 2022

The Company’s Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s reporting

○

○

○

criteria”), as described in the Report.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We conducted our engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements

○

○

○

other than Audits or Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance Engagements on Greenhouse Gas
Statements’ issued by the International Auditing and Assurance Standards Board. The limited assurance engagement consisted of making
inquiries, primarily of persons responsible for the preparation of information presented in the Report, and applying analytical and otherprocedures, and the procedures performed vary in nature from, and are less in extent than for, a reasonable assurance engagement.
The level of assurance provided is thus not as high as that provided by a reasonable assurance engagement. Our assurance procedures

○

○

○

included:• Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report and reviewing theWe calculated the amount of reduction contribution by assuming a 7% per year leakage rate of new refrigerants
sold from FYE2016 to FYE2022, and multiplying leakage amount by the difference between the GWP of alternative refrigerants and the GWP of new refrigerants. The reduction contribution assumes annual leakage of 7%
from equipment sold in the preceding fiscal year, continuing at the same rate in the next fiscal year.

Company’s reporting criteria.
−○○• Performing analytical procedures on the Indicators.
• Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with the

The annual power consumption of Taiyo Nippon Sanso Corporation’s conventional air compressor was comparedwith that of the energy-saving type nitrogen gas supply system to calculate the annual electricity saving fromusing the energy-saving type system. The annual electricity saved was multiplied by the CO2 emission factor forelectricity and the cumulative number of units sold from FYE2013 to FYE2022 to calculate the GHG emission
reduction contribution.

○

The amount of electric power usage saved per year from using Shuttle Chef® when cooking was multiplied by
the CO2 emission factor for electricity and the total number of units sold over the three years from FYE2020 toFYE2022 to calculate the GHG emission reduction contribution.

○

The annual CO2 emissions, which include emissions during the manufacture of the hydrogen, emitted by fuel cellvehicles (FCVs) filled with hydrogen at hydrogen stations sold or operated by Taiyo Nippon Sanso Corporationand operated during FYE2022 was compared with the annual CO2 emissions of gasoline cars to calculate the
GHG emission reduction contribution.

○

○

○

Based on actual observed values at two electronic furnace manufacturers who had introduced oxygen burners,
the electricity-saving effect per volume of jet oxygen (kWh/Nm3) was calculated. The amount of the reduction
was calculated by multiplying the amount of oxygen transmitted to the customer by the electricity reduction pervolume of oxygen for the oxygen burner, but the CO2 emissions coefficient for electricity. The amount of CO2
emission generated in manufacturing the oxygen has been deducted.
We calculated the contribution to the reduction of overall CO2 emissions from using Ar-CO2 mixed gas as a welding gas, based on actual values when performing CO2 welding and Ar-CO2 mixed gas welding using welding
equipment. The calculation was based on the differences in welding speed and CO2 emissions to the atmosphere.
Specifically, we calculated the contribution as the difference in CO2 emissions released directly when conducting
CO2 welding and Ar-CO2 mixed gas welding with regard to the CO2 generated in both methods, adding the
reduction effect of lower electric power consumption due to increased welding speed with mixed-gas welding.
The impact of reduced electricity consumption was calculated by multiplying the amount of electricity consumption saved due to mixed gas welding by the CO2 emissions coefficient. The amount of CO2 emissions generated
in the manufacture of Ar is deducted from the contribution to reduced CO2 emissions.

NIPPON SANSO HOLDINGS CORPORATION128

INTEGRATED REPORT 2022

Company’s reporting criteria, and recalculating the Indicators.
• Visiting the Goi Plant of Chiba Sanso Center Co., Ltd. selected on the basis of a risk analysis.
• Evaluating the overall presentation of the Indicators.

○○

Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that the Indicatorsin the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described in the Report.

○○

Our Independence and Quality Control
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board forContribution to GHG emission reduction through industrial gases produced and supplied by the NSHD Group
We calculated the GHG emission reduction contribution as the difference between the amount of CO2 emissions
in the production of crude steel using 100% coke and the production of crude steel via pulverized coal combustion based on crude steel production by the eight steel companies to whom the NSHD Group supplied oxygen in
FYE2022.
This calculation method is described in “The Impact of Oxygen on Reducing CO2 Emissions in Blast Furnace
Ironmaking” (July 2011) by Dr. Michael F. Riley.
We deducted the amount of CO2 emitted during the production of oxygen and the pumping of gas into theblast furnace.

• Inquiring about the design of the systems and methods used to collect and process the Indicators.

Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity, profes−○(Japan)○(Japan andEurope)sional competence and due care, confidentiality and professional behavior. In accordance with International Standard on Quality Control
1, we maintain a comprehensive system of quality control including documented policies and procedures regarding compliance withethical requirements, professional standards and applicable legal and regulatory requirements.

/s/ Kazuhiko Saito−−○

Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
September 16, 2022

−

−

○

Notes to the Reader of Independent Assurance Report:
This is a copy of the Independent Assurance Report and the original copies are kept separately by the Company and KPMG AZSA Sustainability Co., Ltd.

NIPPON SANSO HOLDINGS CORPORATION129

INTEGRATED REPORT 2022

INFORMATION

Policies

Code of Conduct
We contribute to the creation of value of our customers in allindustries through innovative gas solutions and to the realization of an affluent and sustainable society through thecreation of a harmonious relationship between people andthe earth based on the Group Philosophy, “Proactive.
Innovative. Collaborative. Making life better through gas
technology.” We act honestly and fairly with high ethicalvalues toward the goal that we can gain trust from society
and make continuous progress.

and endeavor to ensure fair and free competition. We provide to our officers and employees necessary education on
the importance of compliance with competition laws.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Competition-Law-Compliance-Policy_
en.pdfGlobal Policy on Respecting Human Rights, Contributing
to Communities, Employment, Labor, and HealthWe support the spirit and meaning of the Universal
Declaration of Human Rights, the International Covenantson Human Rights, the Guiding Principles on Business andHuman Rights, and the United Nations Global Compact, andwe shall fulfill our social responsibilities as a business entity
through the promotion of respect for human rights in theworkplace and creation of adequate working environments.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Code-of-Conduct_en.pdf

Internal Audit Policy
Our mission is to contribute to the realization of our groupcompanies’ philosophy and vision and the achievementof business targets. Through internal audit activities, we
endeavor to add value to our group companies’ operations
or make improvement proposals, thereby contributing tosecuring sound and appropriate business operation andimproving business efficiency.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Policy-on-Respecting-HumanRights,Contributing-to-Communities,Employment,Labor-and-Health_en.pdf

Procurement Policy
We are addressing the resolution of environmental and social
issues based on the Group Philosophy, “Proactive. Innovative.
Collaborative. Making life better through gas technology.”
We believe resolving these problems and realizing a sustainable society requires joint efforts with a wide range of suppliers, and established the below procurement policy. We willcomply with this policy and contribute to realization of asustainable society.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Internal-Audit-Policy_en.pdf

Anti-Corruption Policy
We aim to prevent any form of corruption including bribery
and anticompetitive acts and to establish and maintain fairtrade practices in accordance with the Code of Conduct of
the Nippon Sanso Holdings Group.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Procurement-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Anti-Corruption-Policy_en.pdf

Procurement Guidelines
We are addressing the various issues we are facing, including
global warming, exhaustion of resources, energy, and humanrights that threaten the continuance of sustainable naturaland social environments based on the Group Philosophy,“Proactive. Innovative. Collaborative. Making life better
through gas technology.” We believe this approach cannot
be completed by a sole effort of our group; it can only beachieved by sharing perceptions and cooperating broadly
with our suppliers.
Based on this standpoint, we have established the Nippon
Sanso Holdings Group Procurement Policy to promote our
suppliers’ understanding and cooperation and have createdthe Nippon Sanso Holdings Group Procurement Guidelines onmatters that we would like our suppliers to address with us.

Global Competition Law Compliance Policy
In many countries and regions in which we conduct businessactivities, laws and rules that are generally called competition
laws prohibit anticompetitive acts using a dominant positionin the market, cartels, anticompetitive M&As, and other anticompetitive acts to ensure fair and free competition. In somecountries and regions, laws of such countries and regions
may be applied and enforced even on an act conducted outside the countries and regions if such act affects the market
in the countries and regions.
We understand that compliance with such competition
laws contributes to the benefit not only of consumers but
also of the entire society, will respect the competition laws,

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Procurement-Guidelines_en.pdf

NIPPON SANSO HOLDINGS CORPORATION

130

INTEGRATED REPORT 2022

Global Tax Policy
We understand that it is our social responsibility to comply
with the tax laws and regulations of, and contribute throughtax payments to the development of, all the countries andregions we operate in. Therefore, we are committed toaddressing the interests of various stakeholders through legal
compliant, timely, and appropriate tax payments and properand highly transparent tax management to ensure such compliance and tax payment.

Environmental Policy
We address the reinforcement of sustainability management
and contribute as “The Gas Professionals” to both the development of a globally sustainable society and the resolutionof global challenges. We will technically contribute to theresource-recycling society and to the development of asustainable society by harmonizing with the environment andendeavoring to reduce environmental impact in our businessactivities under the direction of top management.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Tax-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Environmental-Policy_en.pdf

Investor Relations (IR) Policy
We engage in constructive dialogue with market participants(including shareholders, investors, and securities analysts)
based on the concept of fair disclosure to realize sustainablegrowth and medium- to long-term corporate value improvement. In addition, we endeavor to enhance our IR activities
by providing fair, timely, and appropriate explanation anddisclosure of accurate information, including the status ofmanagement and business operation, and to utilize forenhancing corporate value by communicating the requests
and assessment by the market participants to the management to reflect them in business management.

Product Safety and Quality Policy
We, “The Gas Professionals” at the Nippon Sanso HoldingsGroup, recognize that social responsibilities are not only tocomply with the applicable laws and regulations of eachcountry and region and respect international standards but
also to provide a reliable supply of various kinds of products
and services including industrial gases safely and securely. Thisreliable supply is the source of trust and we fulfill the mission
to supply these products and services for the long term inaccordance with the concept of product stewardship and by
giving full attention to human and environmental aspects.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Product-Safety-and-Quality-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Investor-RelationsPolicy_en.pdf

Intellectual Property Policy
Recognizing that intellectual properties are important corporate assets, we work on acquiring, protecting, and using
intellectual properties in order to contribute to businesses
and society through intellectual property-related activities
and to realize our group companies’ global growth. Basedon the philosophy of legal compliance, we also respect othercompanies’ intellectual property rights and pay attention
not to infringe them.

Information Security Policy
We recognize that information management is a material
factor for internal control. This policy on information security
is established to protect our group companies and our customers from loss of social credibility, business disruption, or
the like, caused by information leakage or falsification, to becomplied with by all employees.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Information-Security-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Intellectual-Property-Policy_en.pdf

Occupational Safety and Health / Industrial Safety andDisaster Prevention Policy
We earnestly work on securing industrial safety for our business continuity, sound development, and corporate valueenhancement based on the idea of putting the safety of ouremployees including contract employees, contractors, andexternal stakeholders first. We also ensure the safety andhealth of all individuals involved in our businesses by eliminating personal injuries, diseases, and accidents during business activities in our workplaces.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Occupational-Safety-and-Health-Industrial-Safetyand-Disaster-Prevention-Policy_en.pdf

NIPPON SANSO HOLDINGS CORPORATION131

INTEGRATED REPORT 2022

INFORMATION

Corporate Data

Company Overview (As of March 31, 2022)

Group Organization (As of March 31, 2022)

Company name: Nippon Sanso Holdings Corporation

Transfer agent:

Date founded: October 30, 1910

Mizuho Trust & Banking Co., Ltd.

Paid-in capital: ¥37,344 million

2-8-4 Izumi, Suginami-ku, Tokyo 168-8507, Japan

Head office:Tel (toll free in Japan): 0120-288-324

1-3-26 Koyama, Shinagawa-ku, Tokyo 142-0062, Japan

Contact: Investor Relations,

Gas Business in Japan: Taiyo Nippon Sanso Corporation GroupGas Business in the United States: Matheson Tri-Gas, Inc. Group

Number of employees: 19,398

Group Finance and Accounting Office,Independent public accountants:

Nippon Sanso Holdings Corporation

Ernst & Young ShinNihon LLC

Tel: +81-3-5788-8512

Nippon Sanso Holdings
Corporation

Gas Business in Europe: Nippon Gases Euro-Holding S.L.U. GroupGas Business in Asia and Oceania: Operating company groups in
Asia and Oceania

Stock exchange listing: Tokyo

Thermos Business: Thermos K.K. Group

Share and Shareholder Information (As of March 31, 2022)
Status of Shares

Major Shareholders(10 Largest Shareholders, Shares Held Rounded Down to the Nearest Thousand)Number of shares authorized: 1,600,000,000

Thousands of Percentage ofshares owned total (%)

Number of shares issued: 433,092,837
Number of shareholders: 18,240
Individuals andother investors

Distribution of

15.84%

218,996

50.59

The Master Trust Bank of Japan, Ltd.
(trust account)

30,798

7.11

Client Shareholding Association of Taiyo
Nippon Sanso Corporation

9.82%
Overseas
investors

Mitsubishi Chemical Holdings Corporation

Shares by
Shareholder Type

Financial
institutions andsecurities companies

Other
Japanesecompanies

56.14%

18.20%

17,085

3.95

Taiyo Nippon Sanso Corporation

Taiyo Nippon Sanso Trading

Nippon Sanso (Thailand) Co., Ltd.

1-3-26 Koyama, Shinagawa-ku,(Shanghai) Co., Ltd.

282 Bangbon 3 Road, Kwaeng Nongkhaem,

Tokyo 142-8558, Japan

3rd Floor, No. 2 Bldg. BaoWu Tower 1859,

Khet Nongkhaem, Bangkok 10160, Thailand

Tel: +81-3-5788-8000

Expo Boulevard, Shanghai, P.R. China

Tel: +66-2-445-5010

Tel: +86-21-5835-8700

Custody Bank of Japan, Ltd. (trust account)

13,377

3.09

Meiji Yasuda Life Insurance Company

10,0072.31

Mizuho Bank, Ltd.

8,182

1.89

The Norinchukin Bank

3,500

0.81

Shareholding Association of Nippon Sanso
Holdings Corporation

3,180

0.73

JP MORGAN CHASE BANK 385632

3,167

0.73

Orense, 11, 9th Floor,

IBIDEN CO., LTD.

3,004

0.69

Madrid 28020, Spain

Nippon Sanso Ingasco, Inc.

Tel: +34-91-453-72-00

One Corporate Center, 23rd Floor,

Stock price (Left scale)

Trading volume (Right scale)(Yen)

Matheson Tri-Gas, Inc.

Leeden National Oxygen Ltd.

909 Lake Carolyn Parkway, Suite 1300,

Nippon Sanso Taiwan, Inc.

1 Shipyard Road, Singapore 628128

Irving, TX 75039, U.S.A.

5F-1 No. 1 Sec. 3 Gongdao 5th Road,

Tel: +65-6266-4868

Tel: +1-972-560-5700

East Dist., Hsinchu City 30069, Taiwan,

Nippon Gases Euro-Holding S.L.U.

* Our company holds 184,000 treasury shares.
The shareholding ratio is calculated based on the total number of issued shares, excluding
treasury shares.

Common Stock Price Range and Trading Volume

Main Affiliated Companies (As of March 31, 2022)(Thousands of shares)

3,000

30,00020,000

Taiyo Nippon Sanso India Pvt. Ltd.

Tel: +886-3-572-6588

A-201, ICC Trade Towers, Senapati Bapat
Road Pune, India 411016
91-20-30237000

Dona Julia Vargas Avenue, Corner Meralco

Supagas Pty Ltd

Matheson Gas Products Korea Co., Ltd.

Avenue Ortigas Center, Pasig City 1605,

5 Benson Road, Ingleburn, NSW 2565,

94, Eumbongmyeon-ro, Eumbong-myeon,

Philippines

Australia

Asan-si, Chungcheongnam-do,

Tel: +63-2-8626-1504

Tel: +61-2-8788-4444

Nippon Sanso Vietnam Joint Stock

Thermos K.K.

South Korea 31443
Tel: +82-41-539-7400

2,000

R.O.C. (TFC ONE Building)Company

Mita NN Bldg., 4-1-23 Shiba, Minato-ku,

Shanghai Taiyo Nippon Sanso Gas Co., Ltd.

No. 33, Road 3A, Bien Hoa Industrial Zone II,

Tokyo 108-8450, Japan

No.1959, Zhuanxing Road, Xinzhuang

Bien Hoa City, Dong Nai Province, Vietnam

Tel: +81-3-5730-0130

Industry District, Shanghai, P.R. China

Tel: +84-251-3836706~09

Tel: +86-21-6442-2966
1,000

0

10,000

2016

2017

2018

NIPPON SANSO HOLDINGS CORPORATION

2019

132

2020

INTEGRATED REPORT 2022

2021

2022

0

NIPPON SANSO HOLDINGS CORPORATION133

INTEGRATED REPORT 2022

INFORMATIONAwards

Editorial NoteJapan

United States

Acquired “efr certification” for Care for
Employees and Work–Life Balance

Designated as a 2022 Health & Productivity

Matheson Tri-Gas, Continental Carbonic

Reflecting its care for employees and work–life

Management Outstanding Organization

Products, and Western International Gas &balance, the UN-recognized entidad familiar-(Large Enterprise Category) (“White 500”)

Cylinders Received Awards at the 2021

mente responsible (efr) certification was

Nippon Sanso Holdings and Taiyo Nippon Sanso

Safety Awards

awarded to Nippon Gases Spain, Portugal, andCorporation were recognized as corporations

Matheson Tri-Gas, Inc., Continental Carbonic

Oximesa by Fundación Masfamilia. The efr

that implement particularly outstanding health

Products, Inc., and Western International Gas &certification is a management model that isand productivity management by Nippon
Kenko Kaigi.

Cylinders, Inc. received awards at the 2021

concerned with the reconciliation of personal,

Safety Awards hosted by the Compressedfamily, and work life, without losing sight of

Gas Association.

productivity and results and, therefore,
competitiveness.
Nippon Gases UK Receives International
Safety Award
Nippon Gases UK Limited was awarded a
distinction in the International Safety Awards
by the British Safety Council. The awards recog-

Taiyo Nippon Sanso’s Yamaguchi Branch

Europenize organizations that have demonstrated aand Industry Award

Nippon Gases Euro-Holding Received Fourwell-being. The Distinction level award, theTaiyo Nippon Sanso Corporation’s YamaguchiAwards at the European Industrial Gases

highest available, recognizes the hard work andBranch received the Minister of Economy, Trade

Association (EIGA) 2021 Awards

dedication of all at the site to both maintaining

and Industry Award at the 58th National High

Nippon Gases Euro-Holding S.L.U. received

and improving the safety culture.

Pressure Gas Safety Convention. The award

the EIGA Cat1 Safety Award 2021, the EIGA

was presented in recognition of the long-term

Environmental Award for its CO2 recovery in the

track record of the branch and its contribution

Netherlands, the EIGA Safety Innovation Award

to safety activities, including safety seminars for2021 (Contractor Safety) for its remote safety

customers. At the same convention, the Kanto

observation system in Italy, and the EIGA

Branch of Nissan Tanaka Corporation and thePeter Jackson Award 2021 (Best Improving

Nippon Sanso Holdings Singapore Receives

Toga Office of Nippon Tansan Gas Co., Ltd. also

Organization) for the initiatives of Nippon“COVID-19 Ambassador Division” Award

received the High Pressure Gas Safety InstituteGases Norge AS.

Nippon Sanso Holdings Singapore Pte. Ltd.

Received the Minister of Economy, Tradecommitment to occupational health, safety, andOperating Company Groups
in Asia and Oceania

received the COVID-19 Ambassador Division

Chairman’s Award.
Nippon Gases Euro-Holding Earns a Goldaward in the FYE2022 Duty of Care Awards

Shunan Sanso Received the Governor’s

Medal in the Sustainability Survey ofheld by the International SOS Foundation. The

Award for Excellent High Pressure Gas

EcoVadis of France

award recognized the company’s programs for

Business Site

Nippon Gases Euro-Holding earned a highpromoting best practices in preserving

Shunan Sanso Co., Ltd. received the Yamaguchi“gold” rating, placing it in the top 5% of

employee safety, health, and welfare.

Prefectural Governor’s Award for its excellent

surveyed firms, after a comprehensive evalua-long-term track record and safety systems andtion in the four areas of Environment, Ethics,

Leeden National Oxygen Receives themeasures.

Human and Labor Rights, and Sustainable

Outstanding Performance Award

Procurement, in a 2021 survey by EcoVadis, an

Leeden National Oxygen Ltd. was presented

Nippon Ekitan’s Keiyo Branch Received ainternational ratings organization with a focus

an Outstanding Performance Award from ITW

Letter of Thanks from the Governor ofon corporate sustainability activities.

Orbital Cutting & Welding in recognition of its

Chiba Prefecture

excellent sales performance.

Nippon Ekitan Corporation received a letter of

Nippon Gases Italia Received a Letter of

thanks for its work in delivering and retrieving

Thanks from the Italy Japan Foundation

Leeden National Oxygen the Sole Recipientcarbon dioxide gas bottles at a chicken farm

Nippon Gases Italia S.r.l. received a letter ofof the Pinnacle Award

that experienced an outbreak of a highly

thanks from the Italy Japan Foundation for its

Leeden National Oxygen Ltd. was the solepathogenic form of avian influenza in Chiba

efforts to cooperate with many medical institu-

recipient of the uvex Pinnacle Award. The

Prefecture during FYE2020.

tions right from the start of the COVID-19

award is presented by uvex as the highest

pandemic, supplying medical equipment andhonor to its distributors, and Leeden National

services, and helping to maintain a cold chain

Oxygen received it in recognition of its strong

for vaccine supplies.

performance and sales.

NIPPON SANSO HOLDINGS CORPORATION134

INTEGRATED REPORT 2022

Publication Process of This Report
In publishing “Integrated Report 2022,” the Group worked as one
under the Production Committee led by CFO Alan David Draper,
gathering and collating information on initiatives in each businessand region for the entire Group while keeping in mind our daily
conversations with shareholders and investors, the results ofinvestor survey questionnaires, and feedback and requests
received from a wide range of stakeholders.

People Who Helped to Produce This Report (in no particular order)
JPMorgan Asset Management (Japan) Limited

Overview of the Seven Planning Meetings
Main Participants at the Meetings• Nippon Sanso Holdings Corporation
Integrated Report Production Committee
Alan David Draper
Head:
Sub-head: Satoshi Wataru, Tsutomu Moroishi, Takeshi Miki
Arranger:	Kenji Koyama, Yutaka Okuda, Yasukazu Takada,
Akiko Kamata, Koichiro Kubo, Yukitoshi Tasaka,
Satoshi Suzuki, Masahisa Nagai, Yoshiyuki Hagihara,
Kouji Makino, Toshifumi Abe, Yuji Sakuramoto,
Mamoru Kai, Ryouichi Ishikawa, Takuya Shinoduka,
Yoshiyuki Niwa, Toru Nomura, Yu Yasumi,
Mitsuhiro Toda, Yoko Sugiyama, Takeyoshi Sakuma,
Masahiro Hirochi, Yuto Onai
Secretariat: Keita Kajiyama, Takayoshi Umehara,
		Soichiro Momiyama• Edge International, Inc.

Shizuko Ohmi

Nippon Sanso Holdings Corporation

Kazuyuki Futamata

Nippon Sanso Holdings Corporation

Cesar Callejo

Taiyo Nippon Sanso Corporation

Takashi Oono

Taiyo Nippon Sanso Corporation

Takuya Kawabe

Taiyo Nippon Sanso Corporation

Tomoki Nakamura

Taiyo Nippon Sanso Corporation

Takayuki Fujimoto

Taiyo Nippon Sanso Corporation

Shigemasa Yamazumi

Taiyo Nippon Sanso Corporation

Haruna Yasukuni

Taiyo Nippon Sanso Corporation

Tomoe Nakamura

IMI Co., Ltd.

Kazuyuki Kajitani

Nippon Ekitan Corporation

Yoshihiro Nitta

Matheson Tri-Gas, Inc.

Gus Mustakas

Matheson Tri-Gas, Inc.

Stephen StroudMatheson Tri-Gas, Inc.

Tony Bradshaw

Nippon Gases Euro-Holding S.L.U.

José Luis Chesa

Nippon Gases Euro-Holding S.L.U.

José María Martínez Gallo

Nippon Gases Italia S.r.l.

Daniela Savalli

Nippon Gases Italia S.r.l.

Paolo Ronzi

Nippon Gases España S.L.U.

Cristina Gutiérrez Domenech

Nippon Sanso Holdings Singapore Pte. Ltd.

Hitoshi Ishihara

Nippon Sanso Holdings Singapore Pte. Ltd.

Wilson Tan

Nippon Sanso Holdings Singapore Pte. Ltd.
Supagas Pty Ltd
Taiyo Gases Co., Ltd

Main Discussion Themes• The NSHD Group’s sustainability• The NSHD Group’s human resources• The new medium-term management plan, NS Vision 2026
• Business strategies in each region based on the new
medium-term management plan
• The NSHD Group’s governanceNippon Sanso Thailand
TAIYO NIPPON SANSO INDIA

Clara Teo
Kane Dillon
Sudarat Klaipong
Nobutoshi Hayashi
Monil Singh

Thermos K.K.

Hirokazu Ootomo

Thermos K.K.

Shota Suzuki

Thermos K.K.

Hisao Minoshima

Thermos K.K.

Shunsuke Yoshiyuki

Editorial Note
Thank you for taking the time to read Integrated Report 2022 in its
entirety. Last year, the Company published its integrated report as
Nippon Sanso Holdings for the first time after shifting to the holding
company structure. This is only the second integrated report, and wehave worked to reflect the feedback and impressions that we received
from our stakeholders regarding the previous report. Accordingly,
we have included not only input from management, the Company’s
approach to society, and business strategies but also enhanced thecontent to make the report as interesting to as many readers as possible.
In particular, in May 2022 we announced NS Vision 2026, our first
four-year medium-term management plan under the holding company structure. This integrated report is designed to help readers
gain a deeper understanding of the NSHD Group’s overall direction
through the medium-term management plan by including theCompany’s identification of material issues, its analysis of risks andopportunities, various business strategies, and financial and nonfinancial targets.

NIPPON SANSO HOLDINGS CORPORATIONThis report would not have been possible without the cooperationof many colleagues in the NSHD Group who assisted directly andindirectly with its production, and I would like to take this opportunity
to thank them.
I hope that this report will help in some way to give our many
stakeholders a sense of the tremendous potential of the NSHD Group.
Looking ahead, I aim to enhance the integrated report even further so as to deepen stakeholders’ understanding of the NSHD Groupthrough various forms of dialogue. I ask for your continued feedback
and support for these efforts going forward.

Keita Kajiyama
General Manager, Investor Relations, Group Finance and Accounting Office,Nippon Sanso Holdings Corporation

135

INTEGRATED REPORT 2022