TOCALO Co., Ltd. Sustainability Report 2023

Contents
Contents / Editorial Policy …………………………………………………………………………………………… 1
Message from the president ………………………………………………………………………………………… 3
Long-term vision and materiality …………………………………………………………………………………… 7

ESG data ……………………………………………………………………………………………………… 104
GRI Standards reference table ………………………………………………………………………………… 112

1

TOCALO Co., Ltd. Sustainability Report 2023

Editorial Policy
TOCALO is a specialized manufacturer of surface treatments focused on thermal spraying. We believe that it is important for us to contribute to society
by maximizing the benefits of the various functions of coatings, including saving resources, saving energy, and reducing environmental impact, as wellas to progress toward achieving carbon neutrality, including reducing CO2 emissions. This report has been prepared to present up-to-date information(as of August 2022) in an easy-to-understand manner about TOCALO and its consolidated subsidiaries with a focus on the activities of the parent
company for fiscal 2021 (April 2021 to March 2022).

2

Sustainability

Message from the president

We are using our unique expertise in
manufacturing every way we can to help
create a sustainable society.
ESG management that values manufacturing
I am Kazuya Kobayashi, and I am honored to introduce myself upon myappointment on June 23, 2023 as Representative Director, President andExecutive Officer of TOCALO.

Kazuya Kobayashi
President and Representative
Director

TOCALO is thoroughly engaged in applying ESG-focused management toward our
vision of creating a “bright future for people and nature,” and I intend to put all of
my effort into continuing this drive because I believe ESG initiatives are extremely
important.

In my career, I have served as the General Manager of two plants and the General
Manager of the Production Headquarters, and I would like to use this experience
to put particular focus on how we can use manufacturing to contribute to asustainable society.

Manufacturing requires highly dedicated human resources. For our employeesthat are committed fully to their jobs at all of our worksites, I intend to invest fully
to enhance production efficiency and improve the work environment.
Management and employees will share ideas so we can continue delivering
consistent quality and better products to our clients.

I particularly want to emphasize the pride of being a craftsperson involved in
manufacturing, and the expertise each employee has in the work they do. Rather
than simply pursuing efficiency by mechanically mass-producing products, we put
care and effort into our work. Some defects can be prevented with just fiveseconds of care. With just a little thought, we can deliver heartfelt products to ourcustomers. I learned this from the generation before me, and I want to pass thisdown to the generation that follows me.
3

Connecting individual employee growth to the Company’s growth
I also want our employees to have clear goals for themselves and to know what they need to do so they can
attain their goals. In addition, I would like them to think carefully about how pursuing their goals can contributeto the Company.

To develop that caliber of human resources, we will invest all that is necessary and aim to be a company that isrichly diverse and respects each person’s opinion. We will also allow flexible workstyles, such as remote work,and create a work structure that can accommodate individual workstyle proposals.

Through measures like these we are creating an environment that supports the career ambitions of all
employees and that will lead to overall sustainable growth for TOCALO.

Low environmental impact manufacturing
We are also working to reduce the environmental impact ofmanufacturing operations. I have been promoting inter-plant initiatives
since fiscal 2021 when I was General Manager of the Production
Headquarters. One initiative was to take successful energy-saving
initiatives that were being implemented at individual plants and sharethat know-how with all of our plants. We will continue to incorporate
best practices in this way to further reduce our overall environmental
impact.

Electricity accounts for 95% of the energy that TOCALO consumes, so
reducing our power consumption will be essential. Three of the major
consumers of electricity are compressors, dust collectors, and coolingequipment. While maintaining our standard of quality, we are working to
improve the efficiency of our thermal spraying technology, which willsave energy by shortening the time the equipment is in operation.

We have also set environmental performance targets, including cutting
Scope 1 and 2 greenhouse gas emissions to 46% of the fiscal 2013 levelby fiscal 2030 on a consolidated basis. By purchasing electricity derived
from renewable energy sources, we reached the 46% reduction mark on
a non-consolidated basis in fiscal 2022. To reach our target, however,
we have to do more than just purchasing power from renewable energy
sources. We intend to pursue every avenue, including increasing our inhouse power generation, to achieve our Group target.
4

Joining with local industries for further growth in the future
Any industry can use our technology with any material. Renewableenergy generation equipment and semiconductor manufacturing
equipment are only the beginning. We are not restricting our focus to
specific industries, but are looking into a wide range of industries forapplications for our surface modification technology.

At this moment, I am strongly interested in creating strong ties between
our Company and local communities. We have manufacturing sites
participating in industries all across Japan, and I would like each site toreflect the characteristics of their region. By strengthening theseconnections, the growth of our business can revitalize a region and help
ensure our business continuity.

We will achieve sustainable growth by valuing the interrelation of ouremployees, the environment, and local communities and byremembering that the small extra effort of dedicated craftsmanshipmay seem inefficient or unnecessary but is the heart of manufacturing.

Aiming to be a 100-year company and the perennialcompany of choice.
Hiroshi Goto
Director,
Managing Executive Officer; General Manager, Administrative Headquarters

I participate in management as General Manager of the Administrative Headquarters and as a Director.
Our company has thrived for 72 years, but for us to reach 100 years, it is essential that we take a longterm view, at the core of which is our sustainability.
When we unveiled our medium-term management plan in November 2021, we also presented our longterm vision for a “bright future for people and nature.” Now, in the plan’s second year, looking back on
the past, the top-down approach within the Company has been a success and is steadily producing
results. However, I feel that we are still only halfway through the process in terms of every employee
getting behind the plan and putting it into action. We are therefore putting together a new training
program that we will implement throughout the Company to set in motion a bottom-up approach from
employees.

5We have identified five items as issues of materiality that are essential to address in order to fulfill our
long-term vision. Among the five, the most critical materiality is “Advanced coating and latent market
development.” Our business model is not to mass-produce top-selling products, but to make products
to order. We must continue to develop new coating technologies and cultivate new markets for society
to keep needing our company, and for us to survive.
In recent years, we have been actively investing capital, supported by our strong sales forsemiconductor manufacturing equipment, and we expect these conditions to continue for several
more years. However, our ability to continue to grow our business when these favorable conditions
come to an end will depend on our ability to develop advanced coatings and cultivate latent markets.
We must devote all of our efforts to developing coatings that fully meet society’s needs and expanding
their applications worldwide.
We have also stepped up how we use our business activities to contribute to addressing
environmental issues. We are seeing steady results from the KPIs we set for the value of orders in theenvironmental and energy fields. While working to reduce the environmental impact of ourmanufacturing activities, we will also continue to develop coatings that improve the environmental
performance of various industries.
Another key materiality is cultivating and activating diverse human resources. We established theDiversity Promotion Committee in July 2020 and the Diversity Promotion Division in February 2022,
and I feel that the Company’s systems and mechanisms for strengthening the diversity of humanresources have been put into place in the past two years. I also feel that the understanding that a wide
variety of human resources, including the active participation of women, is necessary for theCompany’s long-term growth is steadily taking root in the Company.
Beginning in fiscal 2022, we launched a “global experience” program to develop human resources whowill be the core of our worldwide business expansion and an internal “DX human resources
recruitment” program in which we are selecting and training individuals in data and digital technologies
that will lead to future innovation. We will continue to advance programs toward new directions andgrowth as we cultivate the human resources we will need for the Company’s future.
In April 2023, I began visiting all of our factories and talking to employees to get a direct “feel” for how
our sustainability strategies and measures are permeating our activities and what our employees think
about them. In talking with younger employees, they reminded me of an eye-opening fact that, to them,
the year 2051, when we will become a 100-year company, is not a point in the distant future, it’s a point
along the path to their future.
I will do my utmost to fulfill my responsibility to deliver to the next generation a TOCALO that willcontinue to be the “company of choice” by society in our 100th year and beyond for the next 30 and 50
years.

6

Sustainability

Long-term vision and materiality

Long-term vision and mission
We are pursuing solutions for social issues and improving our corporate value as a group in line with our Vision(Goal for 2030) and Mission.

Vision (Goal for 2030)

Contributing to a bright future for people and nature
MissionEnhance corporate value through continuous growth focused on ESG
Provide high quality and high value-added products (coatings) to customers
Be always trusted by customers, shareholders, business partners, and local residents
Contribute to environmentally friendly technologies
Be a company that all employees and their families are proud of, and create a safe working
environment where employees enjoy working

7

Materiality and KPI
We have identified specific issues (materiality) to focus on to fulfill our Vision (Goal for 2030) and Mission.
We identified the points of materiality by first reviewing international standards, such as the GRI Standards, andthen selecting possible candidate issues while considering megatrends, social issues, and the requirements
and expectations of stakeholders.
We then considered them in relation to the strategies of the medium-term management plan and selected theissues that were in accord with the medium- and long-term direction of our business. The Board of Directors
approved the following five items as issues of materiality.
Furthermore, we have set key performance indicators (KPIs) to manage our materiality.

Materiality

Main initiatives

Related information

Invest with a focus on developing advanced
coatings
Develop high-performance coatings forthe foundational elements of people’s
lives (such as digitalization,
infrastructure, medical care, agriculture)
Develop coatings that help proliferate andimprove the efficiency of renewableenergy power generation (such as wind

1. Advanced coating

power, hydropower, geothermal power,

and latent market

storage batteries)

development

Develop coatings that help customers
reduce greenhouse gas emissions (bysupporting non-fossil fuels, recycling
equipment)

Offer optimal solutions to customers
Grow from a supplier to a partner
Set up projects in priority areas
Foster experts in problem-solving
8

SolutionsSurface modification
technology′s ability toprotect the future global
environment
Quality management andcustomer satisfaction​

Materiality

Main initiatives

Related information

Advance decarbonization (carbon
neutrality)
Investigate thermal spraying methods
that do not use fossil fuel
Reduce power consumption by improving
processing methods

2. Environmental

Use renewable energy

impact reduction
measures

Environmental
management
Material balance
Targets and results
Climate change measures​

Measures to reduce waste and protect the​Waste reduction andenvironment

environmental
Reduce, recycle, and properly dispose ofconservation​

waste
Understand and improve water and air
pollution conditions
Reduce the use of harmful substances

Improve manufacturing process
sophistication and efficiency
Promote automation and IoT
Begin practical application of new coating
formation technology

3. Manufacturing

Create smart on-site construction

customer satisfaction​

sophistication andquality improvement

Quality management andReinforce the quality control system
Establish and promote productperformance assurance
Implement quality controls systems (suchas ISO)
Construct a Product Qualification Plan

9

Materiality

Main initiatives

Related information

Form a medium- and long-term humanresource development plan
Develop human resources and technicaltraining
Methodically develop global human

4.Cultivate and activate

resourcesdevelopment
Occupational safety anddiverse humanresources

Human resource

Create a comfortable work environment

healthDiversity

Fully engage in safety first
Promote diversity (value the talents ofwomen, persons with disabilities, midcareer employment)
Promote workstyle reform

Lay the management foundation for a longsurviving company
Act in accordance with corporate ethics

5. Thoroughcompliance (acting inaccordance withcorporate ethics)(social mores, ethics and morals, theenvironment, local community

Compliance

contribution)

Corporate governance

Actively promote ESG initiatives
Promote engagement with domestic andforeign investors
Fully comply with the Corporate
Governance Code10

Scope of KPIs: TOCALO Co., Ltd. (non-consolidated)
1. Advanced coating and latent market development

FiscalMain initiatives

KPI

Definition

Fiscal 2022

Fiscal 2021

achievement

achievement

Total: 262

Total: 251

Total: 30

Total: 33

Total: 31

5%

4.7%

5.0%

2025
goal

Invest with a focus on(1) Domestic

developing advanced
coatings

No. of patents

patents

Total:owned(2) Overseas

280

patents

Develop highperformance coatings
for the foundational
elements of people’s
lives (such as
digitalization,(1) Domestic

infrastructure, medical

applicationscare, agriculture)(2) Overseas

Develop coatings that

No. of patent

help proliferate andapplications

improve the efficiency of

applications(including
PatentCooperation

renewable energy power

Treatygeneration (such as

applications)wind power, hydropower,
geothermal power,
storage batteries)
Develop coatings that
help customers reduce

Ratio of

(R&D spending +greenhouse gas

development

technical

emissions (byspending todevelopment

supporting non-fossil

sales

spending) ÷fuels, recycling(consolidated)sales x 100

equipment)

11

FiscalMain initiatives

KPI

Definition

Fiscal 2022

Fiscal 2021

achievement

achievementyen(1) 1,326(1) 891(2) 8,500

million yen​million yen​million(2) 6,401(2) 6,117

yenmillion yen

million yen

Total:

Total: 7,727

Total: 7,008

10,500

million yen​million yen​

Total: 23.3%

Total: 21.1%

2025
goal

Financial valueof ordersreceived forsurfacetreatment
processing in
the following
areas:(1)
Environmental
and energy
Financial valueof ordersreceived inenvironmental
field
(1)
Offer optimal solutions tocustomers
Grow from a supplier toa partner
Set up projects in

Environmental
and energy
equipment(2) Repaired andrefurbishedproductsequipment(devices,
facilities, andservices relating
to theprevention ofenvironmental
pollution,measures tocounter global
warming,
processing of(1) 2,000
millionmillionyen

waste andeffective use ofpriority areas

resources, andFoster experts inconservation ofproblem-solving

the naturalenvironment)(2) Repaired andrefurbishedproducts (items
suited to reuse
and refurbisheduse)(1) Sales toforeigncompanies
Ratio of(2) Royalties

overseas salesreceived from(consolidated)

overseas(3) Sales ofoverseassubsidiaries

12

Total:
25%

2. Environmental impact reduction measures

Main initiatives

KPI

Definition

Fiscal 2025

Fiscal 2022

Fiscal 2021

goal

achievement

achievement

6,990 t-CO2

17,450 t-CO2

33.1%

30.7%

Advance decarbonization(carbon neutrality)
Non-

Investigate thermal
spraying methods that
do not use fossil fuel
Reduce power

consolidated
Greenhouse gas

Scope 1 and 2

emissionsemissions(Scope 1, 2)(Fiscal 2013

consumption byemissions:improving processing

14,736 t-CO2

7,900 t-CO2(Achieved
less than
54% offiscal 2013）

emissions)

methods
Use renewable energy

Measures to reduce waste
and protect theenvironment
Recycled

Reduce, recycle, andproperly dispose of
waste

volume ÷
Ratio of waste(volume ofrecycled

waste +

Understand and improverecycled

water and air pollution

volume) x 100

conditions
Reduce the use ofharmful substances

13

40%

3. Manufacturing sophistication and quality improvement

Main initiatives

KPI

Fiscal 2025

Fiscal 2022

Fiscal 2021

goal

achievement

achievement

constructionーー

60 persons

46 persons

29 persons

approved by the

Total: 25

Total: 18

Total: 15

Japanese

persons

persons

persons

Definition

Improve manufacturing
process sophistication
Amount of

Capitalcapitalinvestment for

Promote automation

investment

promotion of

and IoT

contributing toautomation andimproving

IoT and practicalsophistication

application ofand efficiency of

new coating

manufacturingformation

process

technology

and efficiency

Begin practicalapplication of new
coating formation
technology

Under

Create smart on-site
construction

No. ofemployees
passing test
(Grade 3 or
No. ofemployees
passing QC test

higher) relating
to quality
control
approved by theJapanese

Reinforce the quality

Society forcontrol system

Quality Control(total number)

Establish and promote
product performanceassurance

No. of

Implement quality

possessing

employees

controls systems (suchqualifications as

as ISO)
Construct a ProductQualification Plan

No. ofemployees
possessing
qualifications as
nondestructive
inspectionengineers

nondestructive
testing
engineers

Society for NonDestructive
Inspection(1) Penetrant
testing(2) Ultrasonic
testing

14

4. Cultivate and activate diverse human resources

FiscalMain initiatives

KPI

Definition

2025
goal

Fiscal 2022

Fiscal 2021

achievement

achievement

Total: 28

Total: 18

Total: 192

Total: 178

persons

persons

63,200 yen

54,200 yen(1)
Presentations to
No. ofprofessional

technology-societies

related external(2) Publishedpresentations

essays andTotal: 25

commentary
articlesNo. ofemployees
possessing thefollowing
Form a medium- andnational

long-term humanqualifications

resource development
plan
Develop human

No. ofemployees
possessing

resources and technicalqualifications as

training

technicians(total number):(1) Spraying
technician(2) Machining
technician

Total:
240
persons(Grade 2 or

Methodically develop

higher)global human resources(3) Metal heat
treatment
technician(Grade 3 orhigher)Annualeducational
Educational
spending per
employeespending ÷ no.
of employees at

80,000end of termyen(including
temporaryemployees)

15

FiscalMain initiatives

KPI

Definition

Fiscal 2022

Fiscal 2021

achievement

achievement

1.80

0.62

0.03

0.00

13%

11.0%

9.5%

5%

2.3%

1.4%

90%

68.0%

31.3%

2025
goal

No. of deaths
Rate offrequency ofoccupational
accidents

and injuries due
to occupational
accidents ÷ total
no. of actual

Aimingfor zeroworking hours x
1,000,000

Total no. of
Severity rate ofCreate a comfortable

occupational

work environment

accidents

working days
lost ÷ total no.

Aimingof actualfor zeroworking hours x
1,000

Fully engage in safety
first

No. of female

Promote diversity (value
the talents of women,

Ratio of female

persons withfull-time

disabilities, mid-career

employees

employment)

full-time
employees ÷total no. of fulltime employees
x 100

Promote workstylereformNo. of female
Ratio of female

managers ÷managers

total no. ofmanagers x 100

No. of men
Ratio of men
taking childcare
leavetaking childcare
leave ÷ no. ofmen eligible forchildcare leave x
100

16

5. Thorough compliance (acting in accordance with corporate ethics)

FiscalMain initiatives

KPI

Definition

2025
goal

Fiscal 2022

Fiscal 2021

achievement

achievement

Lay the managementfoundation for a longsurviving company
Act in accordance withcorporate ethics (social
mores, ethics andmorals, theenvironment, local
community
contribution)
Actively promote ESG
initiatives
Promote engagement

No. ofRatio ofemployees
receiving
compliancetraining

employees
receiving
compliancetraining ÷ no. of
eligible
employees x
100with domestic andforeign investors
Fully comply with the
Corporate Governance
Code

17

100%
100%

（Conducted 3
times）ーSustainability | Environment

Environmental management

We have established an environmental management system at all of our sites and are making continuous
improvements based on proper operation.

Basic philosophy

Promotion of ISO14001

Scope of application

Compliance with environment-related laws and regulations

Environmental accounting

Environmental Education and Training

Basic philosophy
Basic environmental philosophy
TOCALO recognizes that “continuously improving the global environment and preventing pollution” is one of themost important challenges of our time. Our basic environmental philosophy is to use surface modification
technologies to save resources, save energy, and reduce our environmental impact to protect the global
environment and contribute to society.

Environmental policy (Revised: June 23, 2023)
Through our activities, products, and services focused on surface modification technologies, TOCALO will
strive to continuously improve the environment based on the following policy in accordance with our basic
environmental philosophy.
1. Constantly recognize the environmental impact of our activities, products, and services, and establish,
implement, and maintain an environmental management system.
2. Commit ourselves to preventing environmental pollution, using sustainable resources, and preventing
climate change.
3. Commit ourselves to the continuous improvement of our environmental management system.
4. Comply with environmental laws and regulations relating to our operations, products and services, as wellas other requirements to which we agree.
18

5. Based on this environmental policy and the environmental impact of our activities, products, and services,
set environmental targets and engage in activities based on the following themes to contribute to theimprovement of the environment:(1) Energy and resource conservation in business activities(2) Environmental contribution through promotion of business activities

To successfully implement this policy, we will set environmental targets and contribute to environmental
conservation by bringing together the strengths of all our divisions and all levels of our workforce.

Environmental management organization structure

Promotion of ISO14001
Certified at all sites
We are continually improving our environmental management system to contribute to society and protect the
global environment by conserving resources and energy and reducing our environmental impact.
Since acquiring ISO 14001 certification at all our sites in 2012, we have maintained our 100% certification rateeven when relocating or launching new sites.

19

Status of ISO 14001 certification (certification number JQA-EM2253) (In order ofregistration date)
Acquisition of certification

Expansion of certifiedPlants and research laboratories

sites

Headquarters

March 2002

Thermal Spraying Technology R&D Laboratories

March 2002

Kitakyushu Plant

September 2005

Nagoya Plant

September 2006

Kobe Plant

September 2006

Tokyo Plant Gyoda Workshop

September 2007

Kurashiki Plant *Name changed to Kurashiki Plant in 2022 upon relocation of the former
Mizushima Factory.​

September 2007

Akashi Plant

September 2009

Miyagi Technical Service Center

August 2012

Tokyo Plant Suzumi Workshop

August 2018

History of ISO14001 certification

Close history of ISO14001 certification

The Headquarters and Thermal Spraying Technology R&D
March 2002

Laboratories were the first sites in TOCALO to acquire ISO14001
certification.

20

The Thermal Spraying Technology R&D Laboratories relocated from
October 2004

Higashinada-ku, Kobe City to the Minami-Futami Industrial Park,
Akashi City.

The registered address of the Thermal Spraying Technology R&D
Laboratories changed to the new address.
September 2005
The Kitakyushu Plant was the first plant to acquire certification.

September 2006

September 2007

September 2009

October 2010

July 2011

The Nagoya Plant, Kobe Plant, and Akashi No. 3 Plant acquired
certification.

The Tokyo Plant (Gyoda Workshop) and Mizushima Plant acquired
certification.

The Akashi Plant acquired certification. All major TOCALO sites werecertified.

Akashi Plant No.3 relocated and integrated with the Akashi Plant.

The Miyagi Technical Service Center was established in Miyagi
Prefecture.

Each sales office acquired certification.
September 2011
Certification of Akashi Plant No.3 was cancelled.

August 2012

The Miyagi Technical Service Center acquired certification. All
TOCALO sites were certified.

The Kobe Plant relocated from Higashinada-ku, Kobe City to Nishi-ku,
August 2014

Kobe City. The former plant, where some production processes
remained, became the Fukae branch office of the Kobe Plant.

December 2014

September 2015

The Akashi-Harima Plant acquired and placed under the control of the
Akashi Plant.

The registered address of Kobe Plant changed to the new address.

21

February 2016

The Nagoya Plant relocated from Midori Ward, Nagoya City to Tokai
City, Aichi Prefecture.

The Akashi-Harima Plant acquired certification following the start offull-scale operations.
September 2016
The registered address of the Nagoya Plant changed to the new
address.

August 2017

September 2017

August 2018

July 2020

August 2020

The Headquarters relocated from Fukae, Higashinada-ku, Kobe City to
Minatojima (Port Island), Chuo-ku, Kobe City.

The registered address of the Headquarters changed to the new
address.

Tokyo Plant No.2 (Suzumi Workshop) was newly certified following
the partial relocation (Gyoda Workshop).

The Kita-Kanto Sales Office relocated.

The registered address of Kita-Kanto Sales Office changed to the new
address.

The registered name of the Mizushima Plant changed to Kurashiki​
April 2022

Plant and the registered address changed from Matsue, Kurashiki​City
to Unozu, Kojima, Kurashiki City The former Mizushima Plant
remained a sub-plant of the Kurashiki Plant

The registered name of Tokyo Plant (Gyoda Office) changed to Tokyo
Plant Gyoda Workshop.

September 2022

The registered name of Tokyo Plant No.2 (Suzumi Workshop)changed to Tokyo Plant Suzumi Workshop.

The registered name of Mizushima Plant changed to Kurashiki Plant
and the registered address changed to the new address.

22

Scope of application
The scope of application of the environmental management system applies to the business activities of
TOCALO Co., Ltd.

(1) Target organization
TOCALO Co., Ltd.
Headquarters / Miyagi Technical Services Center / Tokyo Plant Gyoda Workshop / Tokyo Plant Suzumi
Workshop / Nagoya Plant / Kobe Plant / Akashi Plant / Thermal Spraying Technology R&D Laboratories /Kurashiki Plant / Kitakyushu Plant(2) Certified activities
R&D, manufacturing, sales, and after-sales service of surface modification products using thermal spray andperipheral technologies(3) Location (physical scope) and scope of activities
The contents are in accordance with matters registered with JQA.

Organization name

①Headquarters, TOCALO
Co., Ltd.

Address

Scope of activities

6-4-4 Minatojima
Minamimachi, Chuo-ku,
Kobe, Hyogo②Miyagi Technical Service

21-11 Kitanaka Bessho,

Center (Miyagi TSC),

Kawauchi, Osato-Cho,

TOCALO Co., Ltd.

Kurokawa-Gun, Miyagi

Yamanashi Sales Office,
TOCALO Co., Ltd.

Corporate management and support
operations at the Headquarters

Manufacture, sale, and after-sales
service of surface modification
products using thermal spraytechnologies

Sales and after-sales service of surface
1-1-24 Iida, Kofu, Yamanashi

modification products using thermal
spray and peripheral technologies

23Organization name③Tokyo Plant (Gyoda

Workshop), TOCALO Co.,Ltd.

④Tokyo Plant No.2 (Suzumi

Workshop), TOCALO Co.,
Ltd.

Kanagawa Sales Office,
TOCALO Co., Ltd.

Kita-Kanto Sales Office,
TOCALO Co., Ltd.

⑤Nagoya Plant, TOCALO
Co., Ltd.

Address

Scope of activities

Manufacture, sale, and after-sales
1-1-1 Gyoda, Funabashi,

service of surface modification

Chiba

products using thermal spray andperipheral technologies

Manufacture, sale, and after-sales
606-5 Suzumi-cho,service of surface modification

Funabashi, Chiba

products using thermal spray andperipheral technologies

1-14-20 Shinyokohama,Sales and after-sales service of surface

Kohoku-ku, Yokohama,modification products using thermal

Kanagawa

spray and peripheral technologies

2F, 1086-45 Shimohamadacho, Ota, Gunma

Sales and after-sales service of surface
modification products using thermal
spray and peripheral technologies

Manufacture, sale, and after-sales
33-3 Nibanwarishimo,

service of surface modification

Nawamachi, Tokai, Aichi

products using thermal spraytechnologies

Shizuoka Sales Office,
TOCALO Co., Ltd.

⑥Kobe Plant, TOCALO Co.,Ltd.

Fujioji Bldg.102, 411-1,
Motoichiba, Fuji

Sales and after-sales service of surface
modification products using thermal
spray and peripheral technologies

Manufacture and after-sales service of
1-5 Mitsugaoka, Nishi-ku,

surface-modified products using

Kobe, Hyogo

thermal spray and peripheraltechnologies⑦Akashi Plant, TOCALO Co.,Ltd.

Manufacture, sale, and after-sales
14-1, Minamifutami, Futami-

service of surface modificationcho, Akashi, Hyogo

products using thermal spraytechnologies

Akashi Plant (Akashi-

15-1 Higashi-Shinjima,

Manufacture and after-sales service ofHarima Plant), TOCALO Co.,

Harima-cho, Kako-gun,surface modification products using

Ltd.

Hyogo

thermal spray technologies
24Organization name

⑧Thermal Spraying

Address

Scope of activities

Technology R&D

14-3 Minamifutami, Futami-Laboratories, TOCALO Co.,

Cho, Akashi, Hyogo

Ltd.

⑨Kurashiki Plant, TOCALO
Co., Ltd.

Research and development of surface
modification products using thermal
spray and peripheral technologies

Manufacture, sale, and after-sales
2030-28, Kojimaunotsu,

service of surface modification

Kurashiki, Okayama

products using thermal spraytechnologies

Manufacture, sale, and after-sales
Mizushima Plant, TOCALO
Co., Ltd.

2-38, 2-chome, Matsue,

service of surface modification

Kurashiki City, Okayama

products using thermal spraytechnologies⑩Kitakyushu Plant, TOCALO
Co., Ltd.

1-48 Torigoe-cho, Kanda-cho,
Kyoto-gun, Fukuoka
Prefecture

Manufacture, sale, and after-sales
service of surface modification
products using thermal spraytechnologies

25

(4)Scope of impact

Within the site

Scope of potential impact

1. Design and development
2. Improvement of production processes

Environmental aspects of the interface are as
follows.
1. Energy management
2. Purchasing management
3. Outsourcing Management
4. In-house subcontracting management of otherplants
5. Waste management
6. Distribution, use, and disposal of products afteruse
7. Service management

Compliance with environment-related laws and regulations
Identifying laws and regulations to be observed and confirming the status ofcompliance
TOCALO compiles a list of environmental laws and regulations to be observed and regularly checks the statusof compliance. Details of compliance include notifications to the government, appointments, and regulatory
values.
To date, we have not been subjected to fines or punishment in relation to environmental laws.

26

Major environmental laws and regulations related to TOCALO's business
Waste Management and Public Cleaning Law

Air Pollution Control Law

Water Pollution Control Law

Sewerage Law

Soil Contamination Countermeasures Act

Septic Tank Law

Noise Regulation Law

Vibration Regulation Law

Offensive Odor Control Law

Factory Location Law

Act on Confirmation, etc. of Release Amounts of
Act on Rational Use and Proper Management ofSpecific Chemical Substances in the Environment

Fluorocarbons

and Promotion of Improvements to theManagement Thereof ("PRTR Law")

Poisonous and Deleterious Substances Control

Fire Service Act

Law

Industrial Safety and Health Act

High Pressure Gas Safety Act

Law Concerning the Promotion of the Measures to

Act on Rationalizing Energy use and Shifting to

Cope with Global Warming

Non-fossil Energy

Act on Promotion of Resource Circulation for
Plastics

27

Environmental accounting
We focused on investing in environmental facilities, such as wastewater andwaste gas treatment systems, and noise-prevention measures at new plants.
The graph below shows the cumulative amount of environment-related capital expenditures. Our main
environmental facilities include dust collectors that do not emit dust, soundproofing equipment that shields
noise from dust collectors, and energy-saving equipment.
In fiscal 2022, we carried out a range of actions for energy saving, including installing electricity monitoring
meters and high-efficiency compressors.

Cumulative environmental
investments

Breakdown of capital expenditures

28

Environmental education and training
We provide general education for all employees.
We systematically conduct education and training on the operation of
the environmental management system and how to respond to
emergencies, as required by law.

The main themes are "Environmental policy," "Significance of Operating
an Environmental Management System," and "Waste Handling," which
are taught with initiatives in each workplace.

Environmental training

Through such education and training, we are working to raise awarenessand the level of understanding.

29

Sustainability | Environment

Material balance

We strive to reduce environmental impact by ascertaining and analyzing the actual status of how muchresources and energy are used in our production processes and what kind of environmental impacts are
generated.

30Input (Energy, Raw materials, Water intake)

Energy consumption volume

Fiscal 2018

Electricity (MWh)Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

39,81740,15539,82542,491​42,891

217

229

209

203

188

LPG (kg)

12,807

13,161

10,61516,014

16,188

Diesel (kl)

34

31

31

32

26

Gasoline (kl)

100

108

101

88

88

City gas (m³)

110,227

128,768

160,944

165,732

149,164

Kerosene (kl)Trend regarding volume of use of raw materials
Note: Not including substrates

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Thermal spray materials (t)

291.5

325.2

297.2

271.9

298.7

Other materials (t)

65.8

74.0

59.2

94.3

113.1

Note: Due to partial omission in aggregating data for other materials, performance data has been revised for the period from fiscal 2018 to fiscal 2021.

Trend regarding volume of water intake

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Clean water (m³)

63,525.0

63,610.0

65,850.0

69,552.0

78,410.0

Pure water (m³)

29.8

19.8

18.1

16.5

18.0

Groundwater (m³)

0.0

0.0

0.0

0.0

0.0

31

Output (Waste, Emissions to atmosphere, Effluent, Recycling)
Trend regarding volume of waste emissions

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

General business waste (t)

59.7​

70.0​

59.3​

57.6

61.2

Total industrial waste (t)1,776.1​

1,840.6​

1,959.5​

2,113.5​

2,161.4​

Trend regarding volume of emissions to atmosphereFiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

3.1

2.5

1.0

1.0

1.3

PRTR Law Class 1 Designated Chemical Substances (t)Note: Due to partial omission in aggregating data for fiscal 2021 performance, figures have been revised.

Effluent volume

Fiscal 2018

47,613.0

Fiscal 2019

Fiscal 2020

47,625.0

49,338.0

Fiscal 2021

54,776.0

Fiscal 2022

60,810.0

Sewage (m³)（2,330.4）（2,528.0）（1,640.1）（1,939.4）（1,518.1）

Seawater (m³)

11,283.0

10,434.0

10,984.0

9,193.0

9,710.0

Note: The numbers in parentheses are the volume of factory effluent that has undergone wastewater processing
Note: Wastewater discharged from sites using septic tanks is defined as “seawater.”32

Recycling volume

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Metal scraps (t)

145.8

90.6

108.4

90.1

111.7

Thermal spray material waste (t)

24.1

28.6

27.4

21.2

15.1

Blasting material waste (t)

569.1

570.8

716.4

686.2

715.6

Oil waste/Solvent waste (t)

11.2

9.2

12.0

12.0

16.6

Paper (t)

29.9

19.2

46.2

38.3

33.2

Note: Due to revised recycling standards and the resulting re-tabulation of data, waste plastic performance data has been removed.

33

Sustainability | Environment

Targets and results

We have established three major themes and are working on environmental activities by setting targets at eachsite.
We have set a CO2 reduction target for fiscal 2030 of 46% lower than the level in fiscal 2013 in accordance withgovernment targets.

Results in fiscal 2022 and targets for fiscal 2023

Results in fiscal 2022 and targets for fiscal 2023
Results in fiscal 2022
We achieved our target in 36 out of 37 categories.
The Energy Conservation and Environment Conference, led by the newly established Environment Promotion
Department, was held every three months to further promote environmental activities, including energy
conservation throughout the Group. Specific initiatives included converting several sites to 100% power
generated from renewable energy sources, upgrading to energy-saving, high-efficiency air conditioners, andcreating power consumption visualization to help determine the next plan. Each TOCALO site sets independent
environmental targets.
In fiscal 2022, the ratio of electricity consumption (MWh) to sales (millions of yen) was reduced to 1.07 from1.61 in the previous fiscal year, showing results in our energy-saving and efficiency efforts.
The main themes in fiscal 2022 related to ISO 14001 were conserving energy and resources in our businessactivities, using our businesses to make a positive contribution to the environment, and mitigating climatechange. As a result, although we did not achieve one of our energy conservation-related targets, we weresuccessful in achieving all other 36 targets.

34

Targets for fiscal 2023
We are focusing on conserving energy and resources in our business activities,
using our businesses to make a positive contribution to the environment, andmitigating climate change.
TOCALO has set the group goal of reducing greenhouse gas emissions to 54% of the fiscal 2013 level by fiscal
2030. We will achieve that first by improving our production efficiency to consume less electricity and also byusing solar power generation to produce our own power source and purchasing electricity generated fromrenewable energy sources.
We are also replacing the remaining fluorescent lights with LEDs and planning to recycle the cooling water usedin plants. Although our environmental performance could waver slightly because of the order-driven nature of
our industry, we are working to achieve our reduction targets for greenhouse gas emissions as quickly as
possible.
In fiscal 2022, one of our measures was to install additional electricity monitors to visualize electricity usage.
Going forward, our task is to determine how to efficiently reduce electricity consumption based on moredetailed electricity consumption data. We will continue to try out various methods as we work toward further
energy conservation.
Our main themes in fiscal 2023 related to ISO 14001 will continue to be conserving energy and resources in ourbusiness activities, using our businesses to make a positive contribution to the environment, and mitigatingclimate change. All of our bases will set goals and conduct activities toward the same targets.

35

Site

Environmental target

Target for fiscal 2022

Fiscal 2022 results

Conserving energy and resources in our business activities

Establishing technologies
contributing to the environment(promoting automation)(1) Energy-saving: Automating
Miyagi

Energy- and resourcesaving activities

inspections(2) Energy-saving: Automating
inspections(3) Resource-saving:(1) On hold(2) On hold(3) On hold(4) On holdAutomating blasting(4) Energy-saving: Automating
thermal spraying

Energy- and resource-

Installing energy-saving hybridsaving activities

chillers

Energy- and resource-

Reducing electricity use by TD

Confirmed reductionsaving activities

process

impactCompleted order

Held meetings withmaterial
manufacturers
Energy- and resourcesaving activities
Tokyo Gyoda

Exploring collection and

Selectedmaterial reuse of waste

manufacturers forthermal spray materials

reuseCompleted thermal
spray testing withrecycled materials

Thermal spray material use
Reduction of theduring rework/re-coating 1.8%

defect rateor less of total material

1.80%

use/year

Reduction of thedefect rate

Quality control
nonconformance/complaint
rate 0.07% or less/year

36

0.0004%

Site

Environmental target

Target for fiscal 2022

Energy- and resource-

Reduce thermal spray materialsaving activities

use by 10%

Fiscal 2022 results

Achieved 10 cases ofat least 10%
reduction

Keep dust collector operation

Dust collector

Energy- and resource-

time within 140% of arc time

operation time within

saving activities

through booth environment

140% of arc time: 9 of

improvements

12 months

Examine resource

Examined recycling

consumption reduction

carbide tips,

methods

grindstones, etc.

Tokyo Suzumi
Energy- and resourcesaving activities

Reduction of thedefect rate

NagoyaEnergy- and resourcesaving activities

Quality control
nonconformities: 3 cases orless/month

Investigate peak electricity
consumption trends andrebalance use

Energy- and resource-

Measures to reduce electricity

saving activities

consumption: 1 case/year

3 nonconformities or
less: 9 of 12 months

Lowered peak power
consumption by
dividing lunch breaks
into three shifts

1 caseKobe
Water resource use

Measures to reuse water
resources: 2 cases/year37

2 casesSite

Environmental target

Target for fiscal 2022

Fiscal 2022 results

Formulated plan,
Energy- and resourcesaving activities

Zero air leaks by visualizing air
data through air flow
management

executed action,
confirmed zero airleaks throughobservation,
continuing cycle

Recycle empty thermal spray
Promotion of recycling

material plastic containers:

1,210 kg

1,000 kg/year

Promotion of recycling
Akashiof thermal spraymaterials by Thermal
Spray 1 Department

Recovery rate of A materials:
6,900 kg or more/year at

Akashi Plant: 7,000

Akashi Plant overall, 140 kg orkgmore/year at Akashi No. 4

No. 4 Plant: 150 kg

Plant

Promotion of recyclingof thermal spray

Recovery rate of B materials:

materials by Thermal

130 kg or more/year

182.78 kg

Spray 2 Department

Promotion of recyclingof thermal spray

Recovery rate of C materials:

materials by Thermal

440 kg or more

465.8 kg

Spray 3 Department

R&D

Kurashiki

Energy- and resourcesaving activities

Reduction of paper
usage

Identify electricity consumption
through installation ofelectricity monitors

Reduction of paper usage to
14,500 sheets or less/month,
174,000 sheets or less/year

Installed electricity
monitors for all
equipment over 10
kW output

Average 13,418
sheets/month,
161,016 sheets forthe year

Reduction of the ratio of annual
Kitakyushu

Energy- and resource-

power consumption to sales by

Reduced by 7.95%

saving activities

5% from the previous fiscal

year on year

year

38

Site

Environmental target

Target for fiscal 2022

Fiscal 2022 results

Contributing to the environment by promoting business activities

New project orders: ¥1,000,000
Headquarters

New proposals/orders

or more/monthTarget: ¥12,000,000 or¥70,033,000

more/year

Tokyo Suzumi

New proposals/orders

NagoyaNew proposals/orders

Orders received for new items:¥350,000,000 or more/year

Orders received for new items:¥512,400,000 or more/year¥443,430,000¥530,003,000

Orders received for new items
Kobe

New proposals/orders

helping with customer GHG

10 orders

reduction: 10 orders/year

Akashi

New proposals/orders

New development
activities

R&D

Number of new customer

Average 19.5

visits: 19 or more visits/monthvisits/month, 234

Target: 228 or more visits/year

visits for the year

Initiatives for new
development: 60 or more

60 cases

cases/year

In-house development of
New development
activities

coatings or equipment tocontribute to environmental

4 cases

improvements: 3 or more
projects/year

Kurashiki

New proposals/orders

Kitakyushu

New proposals/orders

Orders received for new items:¥137,000,000 or more/year

Orders received for new items:¥252,000,000 or more/year

39¥184,820,000¥401,176,000

Site

Environmental target

Target for fiscal 2022

Fiscal 2022 results

Mitigating climate change

Headquarters

Promoting business

Disclose Group company

activities

environmental information

Energysavings/renewableenergypartially disclosed on
the corporate website

Reduce CO2 emissions by(1) Completed switch

switching to renewable energyin October(1) Switch to electricity from

(2) Construction

renewable energy

completed in March(2) Reduce emissions by 50%(3) Higher efficiency

during LP gas use by switchingachieved in Octoberequipment

through repowering(3) Improve efficiency of solar

MiyagiConsolidated data

Visualization

power generation facilities andcompleted invisualize generation results

November

Reduce CO2 emissions throughwork style reforms and sales
activities(1) Achieved: Average(1) Reduce CO2 emissions

reduction of 15%

from commuting by 15%(2) Achieved: 3 cases

Global warming

through telecommuting(3) Introduction not

mitigation(2) Eco actions (fromcompleted, but

improvement proposals to

examinations toward

implementation): 3 cases/year

introduction(3) Plan to introduce one EVcompletedvehicle and improve charging
infrastructure in fiscal 2023

Completely eliminate
AkashiGlobal warming

equipment using the R-22 CFC

mitigation

Replace target equipment orformulate improvement plan40

All equipment
eliminated except 2
units; upgrade plan
formulated forremaining units

Site

Environmental target

Target for fiscal 2022

Fiscal 2022 results

OthersContracted with
NagoyaPromotion of recycling

Investigate and examine

contractor recycling

recyclable waste

100% of waste
plastics

Akashi

Reduction of waste

Kitakyushu

Reduction of waste

Separate disposal of waste
dust: 20,000 kg/year or more

25,670 kg

Reduce waste emissions by

Reduced by 21% year

0.5% of sales year on year

on year41

Sustainability | Environment

Climate change measures

TOCALO is adopting renewable energy sources and implementing other climate change initiatives to reduce
CO2 emissions.

Global warming mitigation
We are implementing comprehensive measures to reduce electricity
consumption, installing energy-saving equipment, and planning to convert torenewable energy sources.
The Group’s CO2 emissions are primarily the result of the energy sources we use, which include primary energy
derived from fossil fuels, such as kerosene, diesel oil, LPG, and city gas, and the secondary energy source ofelectricity. Converted to CO2, electricity accounts for the vast majority—88.72%—of our CO2 emissions.
TOCALO takes meticulous steps to conserve electricity as a regular part of efficient business operations while
also implementing measures including installing energy-saving equipment and upgrading aging equipment withenvironmentally efficient equipment.
We are also taking steps to convert to renewable energy sources that do not emit CO2 in power generation.
These steps include aggressive measures to reduce CO2 emissions by using solar power to generate our own
energy and by purchasing electricity generated from renewable energy sources.
In fiscal 2022, we reduced our CO2 emissions by approximately 60% and the ratio of CO2 emissions to sales
decreased by approximately 65% compared to the previous fiscal year. The reduction is the result of our efforts
to increase purchases of electricity derived from renewable energy sources. The decline in the ratio ofemissions to sales reflects the improved production efficiency after installing energy-efficient equipment.

42

Breakdown of energy consumption in fiscal 2022
(CO2 equivalent, consolidated)

Change in CO2 emissions (Scope 1 and 2)

Change in electricity usage

Note:
Adjusted emission coefficients are applied to CO2emissions from purchased electricity from FY2020 onward.
CO2 gas added in FY2021, acetylene gas been added in
FY2022.

43

TOPICS

Generating solar power at the Okayama Kurashiki Plant
Okayama Prefecture is known as the “Land of Sunshine” for its low annual rainfall and generally sunny
weather. The new plant we opened in Kurashiki, Okayama, in April 2022 is equipped with theCompany’s first full-fledged in-house power generation system including approximately 3,500 square
meters of solar panels on its expansive roof.
The Kurashiki Plant’s solar power system generated electricity covering 23% of the plant’s total
electricity demand in fiscal 2022. The result, which takes into consideration the relocation of factoryequipment from the Mizushima Plant in December 2022, was in line with our estimates.
Along with improving the efficiency of our production operations, using in-house generated electricity
to meet our energy needs is a key step to reducing our CO2 emissions. We plan to take this a stepfurther by introducing in-house power generation that uses renewable energy sources to further reduce
our environmental impact and greenhouse gas emissions.

Solar panels on the Kurashiki
Plant

44

VOICE

This is our first plant to use in-house generated power,
and we are aiming to make the system more efficient.
Kazunori Ikeda (General Manager, Sales Department, Tokyo Plant)

I was the Kurashiki Plant manager until March 2023, and I was involved in the plant’s design andconstruction and the solar panel installation. The electricity generated by the solar panels has been
reducing the plant’s electricity costs and CO2 emissions since April 2022.
Prior to installing the panels, we calculated the amount of electricity that could be generated based on
historical solar radiation data. Okayama Prefecture has relatively low rainfall and is known as the “Landof Sunshine,” making it one of the best locations in Japan for solar power generation. We installed as
many solar panels as we could to generate enough power to meet the plant’s electricity needs. Thiswas our first attempt to install a full-scale power generation system. We had to overcome many
challenges, including trying to calculate the actual installation cost and obtaining approval from theCompany, but in the end the installation was successful.
In the year since the system started operating in April 2022, the system has generated 313,294 kWh ofpower, which is equivalent to 23% of the Kurashiki Plant’s electricity consumption. In addition, CO2
emissions were reduced by 22.6% (170 tons of CO2), which was very close to our estimate.
Installing the panels has given us more opportunities to talk with employees about solar power
generation, and I think it is raising awareness about energy conservation. We are also looking toenhance the system, such as by adding storage batteries, so that we can also make use of the powerthat can be generated during off days and in the early morning. I would like the plant to take fulladvantage of the benefits of having its own power generation system.

45

Supporting the Kobe Airport Island Blue Carbon Project“Blue carbon” is attracting attention as a new countermeasure for
global warming. Blue carbon is the carbon that is absorbed byseaweed, sea grass, phytoplankton, and other sea organisms.
Kobe City is promoting blue carbon in its Kobe Airport Island Blue
Carbon Project, which focuses on the various types of seaweed
growing on the gentle stone seawall around Kobe Airport Island.
The Japan Blue Economy Association certified the volume of CO2that the ecosystem is absorbing under its J Blue Credit program in

Monitoring survey (underwaterphotography)

2022.
As a company headquartered near Kobe Airport, we purchased J
Blue Credits equivalent to absorbing 3.9 tons of CO2 as one of ourmeasures to counteract global warming. Through initiatives like J
Blue Credit, we will continue to work with local communities toreduce our environmental impact.
Kobe City Carbon Neutral Port Initiative:

The Kobe Airport Island waterfront

https://www-city-kobe-lg-jp.translate.goog/a49918/cnp.html?
_x_tr_sl=ja&_x_tr_tl=en&_x_tr_hl=en
Carbon Neutral Ports Initiative:
https://www.mlit.go.jp/en/kowan/kowan_fr4_000011.html
Kobe City is promoting blue carbon initiatives to make Kobe Port a
Carbon Neutral Port (CNP).

46

Sustainability | Environment

Waste reduction and environmental conservation

TOCALO is constantly monitoring the environmental impact of its business activities, products, services, andstrive to prevent pollution.
Through the reduction of waste and the appropriate management of hazardous substances, TOCALO iscommitted to continuous improvement.

Appropriate management of chemical substances
Air pollution prevention

Waste Reduction

Soil and water pollution prevention

Noise countermeasures

Appropriate management of chemical substances
In accordance with the PRTR Law, we report the amounts of chemical
emissions and transfers.
In fiscal 2022, TOCALO reported the amount of designated chemicals released into the environment andtransferred for six substances in accordance with the PRTR Law (Pollutant Release and Transfer Register:Chemical Substance Release and Transfer Notification System). The emissions met all regulatory standards
under the act.

47

Release and transfer volume of PRTR Law, type 1 designated chemicals in fiscal 2022

Released amount (kg)

Emission
intotheatmosphere

Transferred amount (kg)Discardinginto

Landfilldisposal

Releaseinto

the soil atatpublicwaters

place ofplace ofbusinessbusiness

Transferring

Transferringtooff-sitesewerage(industrialwaste)

Chrome andtrivalent chrome

10.2

0

0

0

0

6,230

802

0

0

0

0

1,800

1 480

0

0

0

0

670

Nickel

9.8

0

0

0

0

8,820

Vanadium compound

1.9

0

0

0

0

0

Boron compounds

0

0

0

0

4.9

10,500compounds

Cobaltand its compounds

TolueneNote: Following the PRTR Law, the volume of vanadium compounds, for which we submitted a report in fiscal 2021, was reported as zero in fiscal 2022
because the volume handled that year was less than 1 ton. (The PRTR Law requires reporting when the annual amount of vanadium compounds
handled at a business site exceeds 1 ton.)

1 Toluene emissions into the atmosphere amounted to 480 kilograms.
Toluene is a substance contained in organic solvents (such as thinners), and the emission volume is calculated byestimating the amount of volatile organic compounds (VOCs) evaporated based on the natural drying method used.

48

Waste Reduction
We are properly disposing of all types of waste, from general waste to speciallycontrolled industrial waste.
(1) General waste
Paper constitutes the majority of business-related general waste, and we are committed to reusing andrecycling paper. When confidentially is an issue, we work with the paper manufacturers to dissolve
materials chemically.
(2) Industrial waste
Waste oil accounted for 39% of our industrial waste, which was the largest component. Waste oil emits
from cooling water that is added to grinding oil for use as a coolant with wet grinders (machines for roll
grinding). More than 90% of the water is tap water. After disposal, it is used at cement factories andelsewhere to adjust combustion temperature.
The other main components of industrial waste are sludge (21%), mixed waste (10%), slag (9%), waste
alkali (7%), glass and ceramic scraps (6%), and waste plastics (5%).
Sludge contains large amounts of dust generated from thermal spraying. Although thermal spray dust isdry, it is treated as sludge with strict disposal standards.
Mixed waste is defined as a mixture of several types of waste that is difficult to sort.
Slag is a mineral slag, and wet slag from industrial operations is considered as sludge which is strictly
controlled in waste treatment. TOCALO disposes as sludge any slag tailings that are wet or had thepotential of getting wet.
Most of the alkaline waste is washing solution from TD treatment that contains a small amount of
sediment. The solution is weakly alkaline due to its boron content. In certain instances, it may be treated as
sludge.
Glass and ceramic scraps, such as refractory bricks, contain ceramic-based grinding materials that cannot
be recycled.
Waste plastics include material containers and secondary materials, as well as waste paper and wood
scraps that contain oil. Our recycling and other efforts resulted in less waste than in the previous year.
(3) Specially controlled industrial waste
Most of this waste is dust generated by thermal spraying using chromium-containing materials (such as
stainless steel) and collected by a dust collector. When the dust volume exceeds the regulatory limit indissolution tests, it is disposed of as specially controlled industrial waste.

49

Changes in total waste emissions

Breakdown of specially controlled industrial waste

Note:
Results for hazardous specially controlled industrial waste infiscal 2020 have been revised.

Changes in total waste emissions/sales

50

VOICE

Spreading environmental awareness and developing
environmentally friendly activities
Kohei Ishizuka (Miyagi Technical Service Center, FS Manufacturing Section)

I am in charge of process management and industrial waste treatment in the Manufacturing Section.
In April 2023, I was put in charge of the Miyagi Technical Service Center (Miyagi TSC) ‘s Environment
Secretariat. In addition to my own tasks, I also strive to understand the company's operations andcontribute as a team member to reduce environmental impact.
I’m relatively new to environment-related work. Right now, the biggest challenges for me are finding
information about changes in environmental and waste-related laws and regulations and how toincorporate the changes into our internal business processes. I also think it’s important that all of theemployees at our operating sites have a similar awareness of environmental issues as I do, but it’s
been difficult to establish a shared awareness.
My own perception has changed since I was put in charge of the environment. As a member of the
Manufacturing Section, I was only thinking about how to make a good product, but now I also think
about what we are emitting when we make a product and how much of an impact those emissions canhave on the environment. I’ve also changed some of my smaller daily habits. For example, I now lookat documents on a computer as much as possible to reduce paper usage.
My goals are to incorporate actions that reduce our environmental impact into our business processes
and to establish environmental awareness among not just the people in charge, but all employees. I
also want everyone at our operating sites to engage in environmentally friendly conduct.

51

TOPICS

Introducing translucent clear paper files
We produce clear file folders printed with our corporate mascot.
The folders used to be made of transparent plastic, but to reducethe impact of plastic on the environment, in fiscal 2022 we started
producing semi-transparent file folders made of paper.
We wanted a material that would provide the benefit of plastic’s
transparency and the environmental friendliness of paper, andClear file folders made of paper

came up with the idea of making file folders using semitransparent tracing paper.
We started by trying the folders in-house, and now are sharing
them outside the Company, such as by inserting them in thepamphlets we give out at exhibitions.
The clear paper file folders are even better than plastic folders inmany ways because they last longer and are stronger. Every day,
we are thinking of ways to make the ideal folder that is easy to use
and good for the environment. The clear paper folders are giving
us more opportunities to think about what we can do to protect
the earth.

Recycling of miscellaneous recyclable paper at Headquarters (Kobe City)
Kobe City has been implementing an initiative for the recycling of used paper (miscellaneous
recyclable paper) that is emitted by business operators targeting the business operators of Port Island
and Rokko Island, and the TOCALO Headquarters (within Kobe City Port Island) has been participatingin this initiative since March 2020. A large amount of shredder dust is generated at the Headquarters,
and this is recovered and transported to designated locations in Kobe City by contracted transportcompanies.

52

Air pollution prevention
Dust generated in the thermal spraying process is safely collected before it canbe released into the atmosphere.
TOCALO's main products modify surfaces by way of thermal spraying,
which uses powder or wire as a material. The material is fed into a
combustion flame or plasma jet, where it is melted and then sprayed toform a coating.
Powders that did not melt or did melt but were not deposited whensprayed become dust. Dust collectors collect the dust before it can bereleased into the atmosphere. (Photo)

Cartridge-type dust collector

Thermal spraying is a dry process and the collected dust is mostly dry,so there is no need for waste liquid treatment. A duct draws the airborne
dust in a thermal spray booth into the dust collector where it is filteredwith internal filters made of woven and nonwoven fabrics. The fine layerof dust that collects on the filter surface becomes thick can clog thefilter, causing the filter to lose suction pressure and reducing theefficiency of the dust collection. Using a pulse jet, compressed air isused at regular intervals to remove the dust and maintain process
efficiency.
Dust that can be reused is recycled, and dust that cannot be reused
becomes industrial waste.
As of the end of fiscal 2022, we have not confirmed the generation of
sulfur oxide (SOx) from our operations.

53

Soil and water pollution prevention
Soil and water pollution prevention is particularly critical because soil andwater quality directly affect surrounding communities.
Processes at the Kobe Plant use surface modification technologies
other than thermal spraying. Wastewater that requires detoxification
treatment is detoxified at a coagulating sedimentation treatment facility

Plant wastewater treatment
steps (coagulating andsedimentation treatment
facility)prior to being discharged into the sewage system. As a precaution for
an accidental leak of wastewater, the plant has installed pipes andconcrete walls to prevent and quickly and visually detect leaks. Antispreading materials are also in place to prevent leaks from spreading. In
addition to periodic monitoring and measurements, the equipment is
controlled by a rigorous system compliant with applicable laws andregulations.

Noise countermeasures
Noise barriers have been installed and noise measurements are also carriedout regularly.
The main types of equipment that generate noise of a concerning level
are air compressors, dust collectors, and other blowers. However, in
addition to this equipment, there are other noise sources, and we aretaking steps to avoid disturbing the neighborhood by implementing
soundproofing measures such as installing these facilities insidebuildings and installing special soundproof walls.
In addition, we regularly measure noise levels to ensure that our

Noise measurement using specialized

facilities and equipment are within regulatory limits.

equipment

54

Supporting environmental organizations
TOCALO has begun actively supporting the following
environmental organizations as another way to help protect the
global environment through our activities. We are providing
support for greening, protecting biodiversity, and otherenvironmental activities.
In May 2023, we donated ¥500,000 yen to the Green Fund

Certificate of Appreciation from the

managed by the National Land Afforestation Promotion

President of the National Land
Afforestation Promotion

Organization.

Organization

The Green Donation Funds is used for forest maintenance incommunities in Japan and overseas as well as for disaster relief,
forest environment education, and to support greening efforts
overseas. We will continue to support efforts to promote forest
conservation and greening both in Japan and overseas.

In August 2022, TOCALO contributed ¥200,000 to WWF Japan.

You can find out more about TOCALO’s contributions to society at
the following links. ​For further information, click here:
Green Donation Funds: https://www.green.or.jp/english/
WWF Japan: https://www.wwf.or.jp/

55

Sustainability | Environment

Response to the TCFD Recommendations

In August 2023, TOCALO announced its support for the TCFD* recommendations.

TOCALO’s vision is to contribute to a bright future for people and nature, so we have positioned tackling climatechange as a management priority. We will focus our expertise as a coating manufacturer to help clientsconserve resources, reduce labor, and lower environmental burden for a decarbonized society. We will also
actively disclose our efforts concerning climate-related risks and opportunities.​
Note: The Task Force on Climate-related Disclosures. The TCFD was established in 2015 by the Financial Stability Board, abody representing the central banks and financial authorities of various countries as well as international organizations,following the mutual recognition by influential countries that climate change is having a major impact on financial
markets. The TCFD recommendations on climate-related financial disclosures were released in 2017. In addition to
encouraging companies and other organizations to disclose information related to climate change, they also provide aframework for making such disclosures.

Governance
We have established the Sustainability Committee to formulate sustainability policies and action plans and tomonitor the progress of our efforts. It also deliberates on our response to climate change. The committee ischaired by the president and includes full-time directors and the general managers of business divisions
among its members. It meets four times a year in principle.
The Board of Directors receives reports from the committee concerning every aspect of sustainability, including
climate change, and deliberates on and approves matters as necessary. The Board of Directors approved a
medium-term management plan that includes climate change-related targets at a meeting held in October
2021 and material issues that include climate change initiatives at a meeting held in December 2021.

56

Risks, Opportunities, and Response Measures

ImpactCategoryType

Details

TimeframeonBusiness

Financial Impact
Unless indicated, thescenario is 2
FY2030℃ in

Transition risks

Response Measures

Renewable energyLong-term green
electricity contracts
Considerincorporating
additional renewableenergy sources,
such as solar power(increase the ratio ofrenewable energy
consumption byswitching to
renewable energy
sources)
Consider methods
for storing electricity
Increase in energy
procurement costs
following the

Medium- to

introduction of

long-term

Carbon tax: ¥120

generated using

million*solar power*2030 carbon tax

Mediumcarbon pricing
systems
Policy andestimated to be

Facilities$130/t-CO2.

Upgrade facilities to*Foreign exchange

increase productivity

rate $1 = ¥133

Replace equipment

regulatory

with leading energy
saving models,
including air
conditioners,
refrigerationequipment, LED
lightbulbs, andcompressors
Upgrade facilities toeliminate CFCs
VehiclesSwitch company
vehicles to hybrid
modelsConsider introducing
electric vehicles, etc.

Increase inmaterials
procurement costs

Medium- tofollowing thelong-term

MediumーEnhance information
gathering

introduction ofcarbon pricing

Decrease in sales
related to thermal
power generation:

Decreased coating
demand from coalMarket

fired power plants
and other power
generation facilities¥1.08 billion (down
51% from FY2022*)

Short- tomediumterm

Medium*The rate of decline

in thermal power
generation is basedthat use fossil fuels

on the Japanese
government’s Sixth
Strategic Energy Plan

57

Adapt to technology
geared toward
alternative fuels suchas hydrogen,ammonia, andbiomass

Impact
CategoryType

Details

TimeframeonBusiness

Financial Impact
Unless indicated, thescenario is 2
FY2030℃ in

Response Measures

Enhance and expand
management andA loss of reputation

information disclosure

amongconcerning CO2

stakeholders,emissionsinvestor outflow anda drop in share
Reputational

price, or rejection of

Short- torecruitment

medium-opportunities due totermMediumーStrengthencommunication withstakeholders

insufficient
response andConsider acquiring

information

third party certification

disclosure regarding

to improve theclimate change

trustworthiness of
information disclosure

Physical risks

Many of our businesssites are located incoastal areas, where
potential flood risk
damage is higher
from storm surges

Formulate disasterthan from otherplans and consider

sources, such as

moving plants inriver flooding.

coastal areas that

Event of a flood-classhave a high risk ofdisaster at the six

flooding due to risingbusiness sites*1

tides and high waves

located in potential
storm surge flood
areas:
Sales loss due to
shutdown: ¥5.84
billion*2
Incurring of recovery

Damaged facility

costs due torestoration cost:damage to plants¥8.85 billion*3and operational*1 Local government

stoppages causedby disasters such as
Acutehazard maps indicate

Counter instantaneous

six business sites

power failures caused

located in potential

by lightning strikes

storm surge areas:(complete introduction

Nagoya Plant, Headof UPS devices,

Production delays

Office, Akashi Plant,

countermeasures forand increased costs

Thermal Spraying

hydraulic control

due to supply chain

Technology R&D

equipment)

disruptions

Laboratories,

typhoons, heavy

Medium- torains, and lightning

long-term

strikes

Large

Kurashiki Plant, andKitakyushu Plant*2 The number ofdays of shutdown isbased on the Manualfor Economic
Evaluation of FloodControl Investmentof the Ministry ofLand, Infrastructure,
Transport andTourism*3 Assumption is one

flood event willcause 70% ofmachinery andequipment to failbeyond repair

58

Strengthen business
continuity planning,
including measuresconcerning supply
chainsImpact
CategoryType

Details

TimeframeonBusiness

Financial Impact
Unless indicated, thescenario is 2
FY2030℃ in

Response Measures

Lower material volume
by reducing
consumption andimproving efficiency(including recycling),
Increase inpass on priceprocessing material

increases

costs: ¥1.52 billion
Procurement(48% increase fromdifficulties and

FY2022*)steep price rises*The rate of pricedue to increasing
metal demand amid

Medium- tolong-term

Largeincrease forprocessed materials

decreasing

is based on theextraction volume

market growthforecast for the main

Monitor fluctuations in
suppliers’ prices due
to changes at mines
caused by regulations
on materials
extraction, including
metalsmetal materials usedby the Company

Pursue customer
satisfaction
concerning quality by
investigating theimpact of changes at

Chronic

mines on quality℃ 2050)(+4

Nagoya Plant, which
is located in a floodzone, is inundated ormuch of the
Plant damage due
to rising sea levelneighborhood isLong-term

Large

under water*.
Plant relocation
cost: ¥1.63 billion

Strengthening
information gatheringand floodcountermeasures*Assumption of a 0.3

meter sea level risefrom 2022 to 2050

Increased impact on
employee health due
to heat stroke,
infectious diseases,

Improve working
Short- tolong-term

Mediumーenvironments using
cutting edge air
conditioning

etc.

59

Impact
CategoryType

Details

TimeframeonBusiness

Financial Impact
Unless indicated, thescenario is 2
FY2030℃ in

Response Measures

Develop and market
coating technology
tailored to customers’
GHG emissions
reduction efforts(alternative fuels suchas hydrogen,ammonia, andbiomass, recycling
facilities, etc.)

Revenue growth

Revenue increase inthrough an increase

environmental

in opportunities toTechnologicalcapture new

Short- tocustomers driven by

long-term

energy-related
Mediumbusinesses: ¥1.79
billion (an increase

the need ofof 135.3% of fiscal

customers to adapt

2022)

to climate change

Develop and market
coating technology
tailored to efforts topromote andstreamline naturalenergy power
generation (windpower, hydropower,
geothermal power,

Opportunities

storage batteries, etc.)

If raw materials
producers switch torenewable energy,
showcase our ability tosupply customers withcoatings that generate
zero Scope 3 GHG
emissions

Increase in potential
orders by

Revenue increase

encouraging
understanding of
Reputational

how coating
technology

Short- tolong-term

connects to energy

Largefrom repair andActively showcase ourrevitalization-related

position as the leadingbusinesses: ¥5.59

company for thermalbillion (an increase

spray coatingof 87.4% of FY2022)

saving and GHG
emission reductions

Short-term:
Within thenext fiveyears
Mediumterm: To
2030
Long-term:
To 2050

60

Risk management
We have positioned climate change risk as a serious business risk, and it is incorporated into the management of eachdivision. The Sustainability Committee also monitors risk management on a cross-divisional basis. The Board of
Directors receives reports on matters such as the results of this monitoring and then deliberates and decides uponcompany-wide response measures.

Metrics and targets
Electricity accounts for 94.67% (CO2 equivalent) of the energy consumed by the Company and the vast majority of our
CO2 emissions.
We have set a target for fiscal 2030 Scope 1 and 2 greenhouse gas emissions to be below 54% of the level of fiscal
2013, representing a 46% decrease. We have also set a medium-term target to reduce non-consolidated GHG emission
to under 54% by fiscal 2025.
We are also working to increase the waste recycling rate to 40% by fiscal 2025 as a countermeasure for the soaring costof processing materials due to rising demand for metals and a declining extraction volume.
We are preparing to meet increasing opportunities to secure orders for our coatings by advancing our technologicaldevelopment and engaging in public relations to communicate how our coating technologies help conserve energy andreduce GHG emissions. We have also set targets for fiscal 2050 for order volume in the environmental field,
encompassing environmental energy equipment and repaired and refurbished products.

Countermeasure

KPI

Fiscal 2025 goal

Convert toGHG

renewable

emissions7,900 t-CO2

energy, improve(non-(Less than 54%

efficiency, andconsolidated,of fiscal 2013

reduce electricity

Scope 1 andemissions)consumption

2)

61

Fiscal 2022 achievement

Fiscal 2021 achievement

6,990 t-CO2

17,450 t-CO2

Countermeasure

KPI

Fiscal 2025 goal

Fiscal 2022 achievement

Fiscal 2021 achievement40%

33.1%​

30.7%(1) 1,326 million yen​

(1) 891 million yen​

(2) 6,401million yen​

(2) 6,117 million yen

Total: 7,727 million yen​

Total: 7,008 million yen​

Improveefficiency andreduceconsumption(including

Waste
recycling rate

recycling) ofmaterials

Advancedevelospment ofour coating
technologies

Financialand engage invalue ofpublic relations

ordersto communicate

received in

how our

environmental(1) 2,000 million

coatings

field

yen

contribute to(1)(2) 8,500 million

client efforts toEnvironmentalyenreduce GHG

and energy

Total: 10,500

emissions,equipment

million yen

conserve energy,(2) Repaired

and promote theandadoption andrefurbishedefficiency of

products

natural energy
power
generation.

62

Sustainability | Society

Quality management and customer satisfaction

We are aiming to be a company trusted by customers and are striving to provide products and services thatsatisfy customer requirements.
We also want our business partners to grow alongside us through activities based on our partnerships.

Enhancing customer satisfaction

Acquisition of ISO 9001 certification

Acquired JIS Q 9100, Nadcap certification (for the aerospace industry)

Enhancing customer satisfaction
Working daily to deliver inspiration to customers
We believe that the high value-added coating products that TOCALO
delivers satisfy and inspire our customers through our high level ofquality control and good services. We strive to communicate theinformation our customers need diligently and sincerely at every
opportunity from proposal, order receipt, and delivery to after-sales
service.
We are fully committed to quality control and our research anddevelopment. In addition to operating a quality management systemcompliant with both ISO 9001 and the aerospace industry certification
JIS Q 9100, we also hold QA-presentation competitions to announce theresults of quality control efforts, and technology report-presentationcompetitions to announce the results of new research. These
tournaments are designed to raise the level of both technologies andquality management throughout the Company. We also established the
Quality Headquarters, headed by a director, to strengthen ourmanagement system.

63

In 2017, we moved our headquarters to the Kobe Biomedical Innovation
Cluster (KBIC; Chuo Ward, Kobe City), where we are focusing on market

Photographs from the exhibition(SURTEC2023 Surface Technology
Element Exhibition in February 2023)

development in medical fields and collaborating with manufacturers in
the area. We also actively participate in exhibitions on the themes of“Medicine,” “Environment and Energy,” and “Transportation Equipment.”
In fiscal 2022, TOCALO exhibited at five trade shows. As a problemsolving company, we proactively seek to identify customer issues andwork with customers to realize better products and services.

Exhibits in fiscal 2022
September 2022: The International Industrial Fair Kobe 2022 (Kobe International Exhibition Hall)
October 2022: Kansai Healthcare and Medical Equipment Development Exhibition 2022 (INTEX Osaka)
October 2022: Automotive World Nagoya (Port Messe Nagoya)February 2023: 2nd Highly-functional Material Week (Makuhari Messe)
February 2023: SURTECH2023 Surface Technology Element Exhibition (Tokyo Big Sight)

In 2022, we launched TOCALO PARK, a metaverse enabling business discussions, including to pitch our surface
treatment technologies. In fiscal 2022, we held four events on TOCALO PARK, including a technical seminar.
Events on TOCALO PARK feature various materials used at actual exhibitions, with engineering and sales
representatives presenting the latest technologies and case studies by industry. The COVID-19 pandemic has
made corporate provision of information over the Internet much more common, and the number of visitors to
our metaverse has grown with each passing event. We intend to continue holding a range of events going
forward to meet the needs of our customers.
For more information about TOCALO PARK (Japanese site only), click here.

64

EMPLOYEE VOICES

Becoming a more preferred partner through rigorous
customer orientation
Shu Adachi (Akashi Plant, Sales Division, Sales Department 1)

My role in the Sales Division is to handle steel manufacturers, and, as a sales representative, I am
tasked with finding solutions to my customers' problems with TOKARO's surface treatment technology.
In my work, the most important thing for me is to maintain a strong customer orientation, andtherefore I am constantly thinking about what I can do to make the customer happy and be helpful tothem. By putting myself in the customer's shoes, I can better understand their potential needs.
As part of our after-sales service, we perform regular inspections of surface-treated conveyor rollers
every one to three months. Any abnormalities could cause an issue if left untreated, so we make sure
to be diligent in our inspections and ensure our customers can enjoy stable operation.
I fondly remember an instance where we helped a customer avoid issues by discovering and rectifying
an abnormality during one such inspection. At that time, the client said to us that we had been quite a
bit of help in taking responsibility for after-sales service, implying that they would be relying on us
going forward. It was then that I realized how important our popular after-sales services have been in
our customers choosing TOCALO.
We believe that every problem that occurs with a customer's product for which we have performed
surface treatment has a clue to its solution at the customer's site. For us, it is of great importance not
only to win the trust of our customers but also to develop technologies through an accurate
understanding of what kind of problems are occurring in actual operations involving our services. This
is why we will continue to maintain a rigorous customer orientation in our field-first sales activities.

65

Acquisition of ISO 9001 certification
All plants have acquired certification.
We continually improve our quality management system in order to improve customer satisfaction and earnsocial trust through quality assurance.

Status of ISO 9001 certification

ISO 14001-

Registered

Registration

certified plant

datenumberCertified activities

Thermal spray processing for industrial machinery
Kitakyushu
Plant

Jul. 1998

JQA-2470

parts, equipment parts for the chemical industry, andparts for FPD and semiconductor manufacturing
equipment

Surface treatment processing for industrial parts
Tokyo Plant

May 1999

JQA-QM 3344

(thermal spray processing and other peripheraltechnologies)

Surface treatment processing for industrial parts
Akashi Plant

Oct. 1999

JQA-QM 3810

(thermal spray processing and other peripheraltechnologies)

ZAC processing of parts for FPD and semiconductor
Kobe Plant

May 2003

JQA-QMA

manufacturing equipment

10001

TD processing of insert block molds for automobile
forming moldKurashiki
Plant

Nagoya Plant

Dec. 2011

Nov. 2017

JQA-QMA
14492

Surface treatment processing for industrial parts(thermal spray processing and other peripheraltechnologies)

JQA-

Surface treatment of parts for general industrial and

QMA15690

aerospace industries (thermal spraying)66

Quality control system

Process

Implementation

Certified activities

items

Interviews
Review ofGathering information through interviews to realize customer
requirements

Considering

customerordersrequirements

Analysis of the use environment for each customer

Preliminary

Proposalverification test

Process

Implementation

Certified activities

items

Processing
Ordersdirectives(processing

Drawing

instructions)Purchase

Input customer requirements into processing directives(attachment of drawings, purchase specifications, etc.)

specifications

Process

Implementation

Incoming
inspection
Purchasing
Manufacturing

Certified activities

items

process control
Manufacturing
process control
Shipment
inspection

Incoming inspection (prevention of non-conforming partsand materials into the manufacturing process based on
source management)
Purchasing management (purchase of conforming products
from selected suppliers)
Manufacturing process (management of individual
processes based on 5Ms to provide stable product quality)
Shipment inspection (provision of products that meetcustomer requirements)

67

Process

Shipment

Process

Implementation

Certified activities

items

Traceability
management

Management of process history by product identification

Implementation

Certified activities

items

After-sales

After-sales

servicefollow-up

Quality surveys of tie-ups in engineering, manufacturing andsales by visiting customers
Sincere response to customer complaints

68Acquired JIS Q 9100, Nadcap certification (for the aerospaceindustry)
The Nagoya Plant has acquired certification for the aerospace industry.
JIS Q 9100 was established to manage the quality of aerospace defense products, which requires advanced
quality control. To satisfy requirements specific to the aerospace industry, the Nagoya Plant acquired
certification in November 2008. The Akashi Plant was also certified in 2014, but the aircraft-related work was
consolidated at the Nagoya Plant, and the certification was returned at the end of March 2020.
Nadcap is an international certification system under which the Performance Review Institute (PRI), an NPO in
the United States, reviews special process operations in the aerospace and defense industry.

JIS Q 9100 and Nadcap certification

ISO 14001-

Registered

Registration

certified plant

datenumber

Nov. 2008

JQA-AS 0044

Mar. 2014

9676204446

JIS Q
9100

Certified activities

Surface treatment of aerospacecomponents (thermal spraying)

Nagoya Plant
Nadcap69

Surface treatment of aerospacecomponents (thermal spraying)Sustainability | Society

Respect for human rights

The TOCALO Group is committed to respecting the human rights of all stakeholders, including employees andbusiness partners.
We are furthermore committed to the eradication of discrimination and harassment.

Respect for human rights
TOCALO Group Human Rights Policy
The TOCALO Group is a company that sincerely and creatively promotes sound business activities andcontributes to creating a flourishing society. The Corporate Code of Conduct stipulates ethical standards thatall Group officers and employees are expected to follow.
The Code of Conduct states the Group's basic policy on human rights is to respect for basic human rights,
prohibit discriminatory treatment and child and forced labor, and foster a workplace culture that recognizes
diversity and individuality.
*Corporate Code of Conduct
In accordance with the Code of Conduct, the TOCALO Group Human Rights Policy clearly states the Group’s
responsibility to uphold human rights. The Group recognizes that any of its business activities has the potential
to directly or indirectly infringe human rights. The president and chief executive officer are responsible for
efforts to ensure human rights are respected for all people involved in its business activities.
1. Respect for human rights
The Group respects internationally recognized human rights as stipulated in the International Bill of Human
Rights and the International Labor Organization Declaration on Fundamental Principles and Rights at Work.
The Group complies with applicable laws and regulations in the countries and regions where we conductbusiness activities in accordance with the United Nations Guiding Principles on Business and Human
Rights.
We respect the internationally recognized human rights when a contradiction exists between internationallyrecognized human rights and the laws and regulations of a country or region.

70

2. Scope of application
The Human Rights Policy outlines the Group’s responsibility to implement measures to respect humanrights and applies to all officers and employees of the Group. The TOCALO Group expects all of its business
partners to follow the policy.
3. Human rights due diligence
The Group maintains a system for conducting human rights due diligence and identifies and takes steps toprevent and minimize actual and potential human rights infringements in the Group’s business activities andvalue chain.
The Group also appropriately discloses information about our human rights measures and their progress on
our website and via other means.
4. Correction and remedy
If it becomes clear that a Group business activity has directly or indirectly caused, promoted, or been
involved in a human rights infringement, we will take appropriate internal and external steps to correct andremedy the situation. We will additionally develop effective corrective and remedial mechanisms.
5. Dialogue and discussion with stakeholders
The Group will engage in dialogue with various stakeholders about ways to improve its efforts to respecthuman rights based on Human Rights Policy.
6. Education and training
We will provide Group officers and employees with appropriate education and training to ensure the Human
Rights Policy is taken into consideration and effectively put into practice in all of our business activities.
June 23, 2023
Kazuya Kobayashi
Representative Director President and Executive Officer
TOCALO Co., Ltd.​

71

Eliminating all discrimination among employees
The Compliance Handbook expressly stipulates that the company shall respect the fundamental human rightsof employees and shall not discriminate against or harass individuals for reasons unrelated to the performanceof one’s duties. This includes race, nationality, ethnicity, beliefs, religion, age, sex, sexual orientation, physicalcharacteristics, presence or absence of disability, internal position, type of employment, property, place oforigin, marital status, or any other reason that may harm the dignity of the individual. Furthermore, instructions
have been given stating that reasons unrelated to the performance of duties cannot be made selection criteria
during the new hiring of employees.

Prevention of harassment
In order to prevent harassment, we conduct regular harassment training for all employees and have establishedinternal and external contact points, the latter operated by third parties, for whistleblowing and consultation
regarding harassment and other issues.
Our Compliance Handbook is distributed to all employees to raise awareness of compliance and corporate
ethics.
Percentage of employees with disabilities
2.71% (non-consolidated, end of March 2023)

72

Sustainability | Society

Human resource development

Human resource development
The people we seek
We seek individuals who will embody our corporate mottos of Technology & Ideas, Youth & Passion, Harmony &Reliability, and Good Service and seek to take them to a new level.

Human resource development policy
We aim to be the best partner for our clients by creating value with our surface modification technologies. To
achieve this, we must cultivate personnel with the ability to work autonomously in the four key areas ofreinforcing our market development, reinforcing our technological development, enhancing the sophisticationof our manufacturing, and realizing sustainable growth to become a 100-year company. We accordingly provide
various growth opportunities to employees to bring out their potential and motivation and support theadvancement of their careers.

Human resource development policy
1. Improve proposal-based sales capabilities to provide optimal solutions
We strengthen our proposal-based sales capabilities so we can provide optimal solutions to diverse
customer needs. We do this by providing employees with opportunities to join projects in our priority fields
and our conference where employees give presentations about actual business case examples so they can
expand their specialized knowledge and learn from actual application cases.
2. Encourage ingenuity in manufacturing and solidifying our foundation (personnel development)
We encourage thinking creatively about ways to improve manufacturing efficiency so we can both provide
coatings designed to individual customer specifications and increase our production capacity. One of theways we do this is through initiatives to improve manufacturing, including holding QA-presentationcompetitions. We also have mechanisms (personnel development) to ensure work processes are performed
according to specifications and procedure manuals, which are overseen and supervised by a foreman.

73

3. Continuously enhancing quality control
A quality management system is of fundamental importance to our business because of the extreme
difficulty confirming the quality of a coating after it has been applied. To maintain strict control of thecoating application process, we encourage employees to obtain skills that will further improve our quality
control systems, including earning quality control certification (QC Kentei) and non-destructive inspectionengineer qualifications.
4. Cultivate a corporate culture with a flexible approach to technology development
The technology report presentation competitions and technical conferences we hold for employees are
events that embody our Technology & Ideas motto. We foster a corporate culture that creates enthusiasm
for technological development and flexible thinking unbound by pre-existing concepts.
5. Provide digital education and selecting DX human resources
Digitalization and DX are important to improving the productivity and quality of all operations. We are
implementing digital education to raise the digital literacy (the ability to understand and use it) throughout
our organization. We are also selecting and training individuals as DX human resources who can use data
and digital technology to lead to innovation.
6. Cultivate strategic thinking by broadening perspectives with a global experience program
We are launching a new global experience program to develop human resources who will lead not only our
global expansion but also for our corporate development in the long term. The program is intended tobroaden the perspectives and nurture the strategic thinking of highly motivated employees.

74

KPIs for human resource development (non-consolidated)

Item

KPI

FY2025

FY2022

FY2021targetresultresultEncourage ingenuity in
manufacturing and solidifying

Number of certified technicians

our foundation (personnel(total)

240​

192

178

60

46

29

25

18

15

25

28

18

¥80,000¥63,200¥54,200

development)

Number of people passing QC
certification tests (total)
Continuously enhancing
quality control

Number of qualified nondestructive testing engineers(total)Cultivate a corporate culture
with a flexible approach totechnology development

Overall

Number of externalpresentations (academic
society presentations, research
papers, commentary articles)

Education expense per
employee75

Human resource programs (non-consolidated)

76

VOICE

Providing full support to employees taking on new
challenges
Hiroshi Goto
Director, Managing Executive Officer, General Manager of Administrative Headquarters

For TOCALO to continue growing and developing into the best company it can be, all of our employees
must likewise continue growing. One of our missions is to create an environment where our employees
can grow. I am particularly focused on creating an environment where employees are eager to take on
new challenges.
In fiscal 2022, we launched the global experience program to train the human resources that will leadour global development into the long term and introduced an internal “DX human resources
recruitment” in which we are selecting and training individuals to use data and digital technology forinnovation. Younger employees in particular have been very interested in these programs, and theapplications have far outnumbered the number of spaces.
We are creating an environment that encourages employees to take on new challenges and providing
full support. We expect these efforts to greatly support the growth of highly motivated employees
which will contribute to the Company’s overall growth.

77

Investment in human capital
Our human resource development policy is to actively invest in developing and strengthening the humanresources we need to become the best partner for our customers. TOCALO Co., Ltd. invested a total of ¥48
million, or ¥54,200 per employee, in employee education in fiscal 2021.

78

Sustainability | Society

Diversity

TOCALO has set “Cultivating and actively engaging diverse human resources” as a material issue (materiality)
for our sustainable growth. We also provide employee training and an internal work environment where
employees can actively express their individuality and abilities.
In addition, we ensure our working conditions meet or exceed the standards stipulated by laws and regulations.
We engage in ongoing dialogue aimed at creating and preserving a fulfilling work environment andcompensation structure, including holding discussion meetings between company and labor union executives
about six times a year.

Creating a comfortable work environment
Supporting work-life balance

Diversity Promotion Activities

Third-party Evaluations

Creating a comfortable work environment
Work environment policy
We will maintain a comfortable work environment for all employees so that they can express their individuality
and abilities and achieve harmony between their work and private lives.

79

Work environment principles
1. Foster corporate culture with psychological safety
Foster an open corporate culture where all employees feel comfortable expressing their opinions andfeelings and where everyone is supportive of taking on challenges.
2. Maintain and improve a comfortable work environment, including health and safety
We ensure employee workplace safety and health in accordance with the Labor Standards Act and theIndustrial Safety and Health Act and strive to maintain a clean, functional, and people-friendly working
environment.
Please see Occupational safety and health initiatives​for details.
3. Provide equal-opportunity career advancement and merit-based evaluations
We actively employ human resources with various attributes (nationality, age, presence or absence ofdisabilities) who can feel motivated to work to their full potential. We promote the active participation of
women. We provide equal opportunity for career advancement and merit-based evaluations.
Please see Diversity and Human resource development for details.
4. Support employees balancing work with childcare and nursing care
We provide career assurance to employees who are raising children or providing nursing care by offeringand disseminating information about our temporary leave, holidays, shortened work hours, and otherprograms. We also take steps to maintain the understanding and cooperation of superiors and others in theworkplace.
Please see Supporting work-life balance for details.
5. Create a workplace environment allowing flexible work styles and healthy work activity
We strive to provide and develop flexible work structures (work locations, hours) and to create a work
environment where employees can physically and mentally work in a healthy manner. We believe that aflexible and healthy work environment improves productivity and enables work-life balance.
Please see Supporting work-life balance for details.
6. Provide learning opportunities and establish an award program
We provide a variety of learning opportunities for employees to improve their work skills and advance theirpersonal development. We also created an award system to stimulate employee motivation.
Please see Human resource development for details.

80

KPIs for work environment (non-consolidated)

Item

Maintain and improve a

KPI

FY2025

FY2022

FY2021targetresultresultOccupational safety

Target isincident frequency

zero

Labor safety incident

Target isseverity rate

zero

1.80

0.62

0.03

0.00

13%

11.0%

9.5%

5%

2.3%

1.4%

90%

68.0%

31.3%

comfortable work environment,
including health and safety

Percentage of female
full-time employees
Equal career opportunity and meritbased evaluations
Percentage of female
managers

Support balancing work andchildcare/nursing care

Percentage of male
employees taking
childcare leave

Please see the section ESG data for data on human resources.

81

Competitive ratio in recruitment by gender for the last three fiscal years (non-consolidated)

Employment management classification

Female competition ratio (A)Male competition ratio (B)Career track

3.57 times

4.20 times

Skills and clerical positions

0.33 times

1.00 times

Total number of hours of overtime and holiday work per worker per month in the most recent fiscal year
(non-consolidated)
The total of overtime and holiday work is less than 45 hours each month in all employment management
categories.

Various career courses (non-consolidated)
Status of mid-career recruitment and re-employment, such as conversion to regular workers in the last threefiscal years

Last three

Action taken

fiscal years

Number of people

A. Conversions to regular workers, hired dispatchedworkers

Fiscal 20202022

8 (Conversions to regular
workers, hired dispatchedworkers)

B. Conversion between employment management
categories that contributes to career advancement

D. Mid-career recruitment of females over age 30
as regular workers

82

14 (same as above)

15 (not including the above)

Diversity Promotion Activities
Promotion of diversity
In July 2020, we launched the Diversity Promotion Committee with the goal of becoming a company where
diverse human resources can work comfortably and enthusiastically. We revised our internal regulations basedon constructive opinions and information regarding improving our Company received from employees fromvarious backgrounds, genders, ages, and affiliations. We also proactively produce and distribute pamphlets andposters.
In February 2022, we established the Diversity Promotion Division, which is dedicated to further strengthening
these activities. Along with our current priority of promoting the advancement of women, we are taking
proactive steps to create a worker-friendly workplace environment.
See here for details
Note: The link is for an external website.

83

VOICE

Constantly promoting diversity and creating a culture
where employees can work with enthusiasm
Yuka Wakabayashi (Diversity Promotion Division, HR & General Affairs Division)

The Diversity Promotion Division established in April 2022 is implementing company-wide measures topromote the active participation of women, establish better work styles, and create a workplaceenvironment with the aim of realizing a company where diverse human resources can work
energetically and comfortably.
In fiscal 2022, the division focused on making sure it is operating at full power and on raisingawareness of diversity issues, as well as actively promoting public relations through the internal
newsletter and presenting participatory events. We also conducted interactive training sessions for
managers, and in a survey 90% of managers responded that “the Company’s diversity has improved.” I
believe these efforts have greatly improved the level of attention to diversity within the Company andadvanced our diversity.
Our aim is not only to create a workplace environment with a good work-life balance, but also to createa culture where human resources of all genders and nationalities play an active role. Accommodating
diversity and a wide range of perspectives will be especially important in the future global society. We
want to create an open atmosphere where our diversity gives rise to innovation.
During my year and a half in the Diversity Promotion Division, I’ve met people from various
departments and occupations. At this year’s family event, I was reminded once again that behind each
employee is a family of many people. I want to continue improving our Company one step at a time so
we will be a positive factor in all three elements of our employees and their families, the Company, andsociety.

84

Publication of General Business Owner Action Plan
We publish a General Business Owner Action Plan based on the Act on Advancement of Measures to Support
Raising Next-Generation Children and the Act on the Promotion of Female Participation and Career
Advancement in the Workplace.
General Business Owner Action Plan based on the Act on Advancement of Measures to Support Raising NextGeneration Children
General Business Owner Action Plan based on the Act on Promotion of Female Participation and Career
Advancement in the Workplace
Adobe Reader is required to view PDF files.
Adobe Reader can be downloaded from the button on the left.

Supporting work-life balance
Improving our programs and increasing acceptance
Employees and management are working together to improve our programs supporting a balance between
work and life by reducing extended working hours and encouraging employees to take annual paid leave. We
have also established a childcare-leave system to help employees balance work and child rearing amid Japan’s
rapidly declining birthrate and aging population. In addition, we are improving the work environment to bettersupport health management during pregnancy and after childbirth.
We are also reforming workstyle options and our workplace culture to support employees who need to work
while caring for family members, and are raising awareness of the available workstyle options.
In March 2023, we added a condition to support for people balancing work and infertility treatment by allowing
leave for fertility treatment.

85

Third-party Evaluations
Kurumin Plus Certification
To be a company with a diverse and enthusiastic workforce, the Diversity
Promotion Committees at each worksite are leading efforts to strengthen our
employee support programs, such as for people balancing childcare and work,and to encourage male employees to take childcare leave. In March 2023, we
introduced a leave program to support employees undergoing infertility treatment
and ran programs to promote awareness and understanding of infertility
treatment. These efforts earned us Kurumin Plus certification as a company
supporting employees who are balancing work with raising children and infertility
treatment.
Please see the section ESG Data Collection for data on the percentage of employees taking paid leave andchildcare and nursing care leave.

86Sustainability | Society

Occupational safety and health

At TOCALO, we are committed to the upkeep and improvement of a facilitative work environment where
employee health and safety is an important consideration.
In addition, we focus efforts on mental care for our employees, working to create a safe environment where
they can work with greater comfort and peace of mind.

Industrial safety and health initiatives​
We are also focusing on ensuring safety in the event of a disasterWe strive to maintain and improve a comfortable work environment that gives consideration to safety andhealth, as well as enhance various systems related to welfare in compliance with the Labor Standards Act andthe Industrial Safety and Health Act. Parallel to this, each business site has established its own measures toensure safety and minimize damage in the event of a disaster.
In order to prevent occupational accidents from occurring, the entire company is making concerted efforts tovigorously promote safety and health measures.
As one of our initiatives in this regard, we receive tutelage and advice regarding health issues and health &safety from an outside director who is a specially-appointed professor of the Osaka University Campus Life
Health and Counseling Center.

872023 safety and health policy
TOCALO’s safety and health policy is based on the principle that “safety takes precedence over everything.” The
policy provides guidelines for “maintaining and improving work environments” and “achieving zero accidents
and zero injuries” by showing due consideration to safety and health in ways that safeguard and enhance thehealth of all employees.
We will strive to create a bright and rewarding workplace by:
1. Complying with laws and regulations related to safety and health related to our business and relevantinternal regulations
2. Continuing industrial health and safety activities (inspections, patrols, and education) and striving to raiseawareness of health and safety
3. Aiming to reduce the hazards that cause accidents and disasters by promoting visualization and risk
assessments based on 5S-activity initiatives and analysis of workplace injuries, as well as to acquire JIS Q
45100 certification
4. Showing due consideration to mental health so that employees can work in a healthy state of mind
5. Thoroughly providing health & safety education for new employees beginning when they join the company
6. Promoting the safety activities of on-site partner companies and subcontractors

Heat stroke countermeasures at manufacturing sites
In recent years, summer heat has become increasingly severe, and temperatures at manufacturing sites havebeen higher than before, increasing stress on employees. The higher the temperature gets, the greater the riskof heat stroke becomes, so this could adversely affect the health of our employees.
To prevent such risks, we are firstly improving our air-conditioners. Air-conditioners are installed at most of ourflat panel display (FPD) and semiconductor processing plants (FPD and semiconductors make up just over 50%
of total sales), and we are actively introducing them at other worksites as well.
Measures other than air-conditioning are implemented at sites as required, such as exhausting hot air andsteam generated in operations to the outside, reducing outdoor heat input through the use of heat-shielding
coating, and installing large-scale air blowers. In addition, for personnel, we are promoting rehydration and salt
supplementation with salt candies, installing spot coolers, and introducing air-conditioned clothing. With thesemeasures in place, many of the workers at sites say that the work has become easier, which has also led tomore efficient work.
However, there are some sites where countermeasures are not yet sufficient, and further improvements arenecessary. We will continue to consider the health of our employees and take appropriate measures at eachbusiness site.

88Approach to mental health
Our initiatives to support the employee mental health of our employees include annual stress checks asrequired by law and give feedback on the results to individuals. We also seek to improve our work environments
by performing diagnoses of our company structures to identify structural issues.
We offer stress checks to employees and additionally provide contacts for consultation.
In 2022, we contracted with SOMPO Health Support Corporation to provide health management services thatprovide employees with mental conditions the opportunity to consult with industrial health advisors. The
consultations will serve as a preventive measure to reduce instances of employees taking a leave of absence.

Initiatives for raising safety awareness
Each office holds monthly meetings of the Health and Safety Committee where risks regarding workplaces areassessed, and feedback on the results is given to employees. An effort is made to share the information fromthe committee meetings at company-wide health and safety meetings in which all offices participate every
other month. Effort is also made to raise safety awareness by providing education centered on safety
education to new employees entering the Company that is and focusing on foreman training that is based on
guidance from external consultants.

89

Sustainability | Society

Health management

Health management is a priority management issue at TOCALO and we take steps to provide full support for
employee mental health care and work-life balance so all employees can work energetically and safely.

Basic approach to health management
Positioning of Company health management
In 2023, we announced our Declaration on Health Management based on the belief that efforts to maintain andimprove employee health are fundamental to human capital management. We are actively implementing healthmanagement as part of our drive for sustainable growth toward becoming a 100-year company.

90

Declaration on Health Management
Our medium-term management plan stated our mission to “make employees and their families proud of ourCompany as a place to work with enthusiasm and safety,” and we accordingly implemented measures to“develop human resources” and “create a work environment that is clean, functional, and people-friendly.”In addition to the above, fulfilling our mission will also include actively advancing health management
measures by “promoting mental and physical health” and “increasing employee engagement (eagerness tocontribute to the Company).”
Kazuya Kobayashi
Representative Director,
President and Executive Officer

Health management policy
1. We actively support each and every employee so they can work independently to improve their physical andmental health.
2. We create comfortable worksites that are clean, functional, and people-friendly.
3. We regularly evaluate the results of health and productivity management initiatives and maintain a systemfor continuous improvement. Management will demonstrate leadership to promote employee participationin health management.

91

Health management promotion initiatives
Health management promotion structure
The Personnel and General Affairs Division promotes the Company’s health management. The TOCALO
President serves as the Chief Health Management Officer and the General Manager of the Administrative
Headquarters serves as Health Management Promotion Officer. The Personnel and General Affairs Division
forms and executes its policies and strategies while cooperating fully with the Production Headquarters incharge of safety and health, labor unions, external organizations (health insurance associations), and external
experts (occupational physicians).

Priorities
1. Promote mental health
2. Promote physical health
3. Create a clean, functional, and people-friendly work environment
4. Improve work-life balance92

Approach to mental health
Our initiatives to support the employee mental health of our employees include annual stress checks asrequired by law and give feedback on the results to individuals. We also seek to improve our work environments
by performing diagnoses of our company structures to identify structural issues.
We offer stress checks to employees and additionally provide contacts for consultation.
In 2022, we contracted with SOMPO Health Support Corporation to provide health management services thatprovide employees with mental conditions the opportunity to consult with industrial health advisors. The
consultations will serve as a preventive measure to reduce instances of employees taking a leave of absence.

Initiatives to improve work-life balance
We are introducing and expanding our systems for accommodating flexible work locations and work hours andtaking steps to create a physically and mentally healthy work environment. We believe these efforts will
enhance productivity and improve employee work-life balance.

93Sustainability | Society

Social engagement

We aim to be a company that enjoys friendly relations with its neighbors through cleanup activities in thesurrounding areas, participation in community events and youth development programs, and promotion ofsports.

Community cleanup activities

Contributing to youth development

Contributions to society

Community cleanup activities
Cleanups tailored to business locations and the particular traits of theirsurrounding communities
TOCALO's community cleanup activities began as part of our activities
to contribute to local communities. As always, the cleanups are
conducted while paying close attention to traffic and wearing highvisibility orange bibs.
Quite a bit of garbage tends to find its way to the area around the Kobe
Plant, often fireworks residue and barbecue leftovers discardedat a
nearby park. Something that has been encouraging in our regularcleanup activities is that our neighbor companies have told us theywould like to start their own activities based on ours.
A team from the Thermal Spraying Technology R&D Laboratories, withthe proper permissions, cleans the green area of the nearby Akashi
Cleanup activities near the Nagoya

Seaside Park.
The Akashi Plant engages in monthly cleanup activities in conjunction
with the cleanup activities of its industrial park.
At the Head Office, we pick up litter on sidewalks and in gutters aroundthe office on a monthly basis.

94

Plant

Although cleanup activities were scaled down due to the COVID-19
pandemic, we are gradually rebuilding these activities to their previous
levels and will sustain community cleanup activities going forward in a
way that is tailored to each business location and the particular traits of
their surrounding communities.

Cleanup activities near the Head OfficeContributing to youth development
Supporting the Akashi-jyoki Gakudo Soft Baseball Tournament
TOCALO has been a special sponsor of the Akashi-jyoki Gakudo Soft Baseball Tournament since its launch in2012. In its finest traditions, 20 teams from the local prefecture (Hyogo) battled it out in the 2022 tournament,with tournament awards bestowed by the head of the Akashi Plant at the closing ceremony.

Past Akashi-jyoki Gakudo Soft Baseball Tournaments and the Akashi TOCALO Baseball Stadium95

Accepting internships
TOCALO has been hosting interns annually since fiscal 2007. For safety reasons during the pandemic, we did
not accept interns in fiscal 2022.
We usually accept one or two interns from Helmut Schmidt University in Germany each year. The interns spend
over a month in summer at the Thermal Spraying Technology R&D Laboratories where they experience ourbusiness activities and our research and development work on thermal spray technology. Mutual
understanding of the German and Japanese cultures is also deepened through exchanges during both workand private time with our employees. We are looking forward to resuming the intern program.

Overseas interns gaining hands-on experience (fiscal 2019)96

Contributions to society
We maintain a special annual budget for providing donations to community and social contribution activities.
The following are a few of our recent activities.

September 2023 Support for green funding for the Aichi Prefecture Green Transformation Project
We donated ¥200,000 to the “Green Funding” project of the Aichi Prefecture Revegetation Promotion
Committee to raise funds for forest maintenance and greening activities.

August 2023 Donation to the 100th Anniversary Commemorative Project of the Department ofMetallurgical Engineering of the School of Engineering at Tohoku University
We donated ¥1 million to the project to help the prestigious department continue cultivating materials
researchers for another 100 years.

August 2023 Donation to Kobe University 120th Anniversary Commemoration
On the 120th anniversary of the founding of Kobe University, we donated ¥500,000 to help generate knowledge,
develop human resources, enrich and improve the environment, and provide grants for student scholars.

​ ugust 2023 TOCALO Scholarship for International Students in the University of Hyogo Global BusinessA
CourseFollowing the ¥1 million scholarship provided in February, we decided to provide an additional ¥1 million
scholarship for a second international student in the Global Business Course of the School of Economics andManagement, University of Hyogo.

​August 2023 Sponsorship of Hyogo Machinami Garden Show in Akashi 2023
We donated ¥100,000 to a flower and green event held in Akashi Park, which is home to the Akashi TOCALO
Baseball Stadium*
Note: TOCALO has acquired naming rights to the stadium

97

May-June 2023 Donations to support children and child-rearing
We donated to the following organizations to support their activities helping to raise healthy children and create
environments that facilitate raising children.
Kurashiki City Children's Fund (¥100,000)
Food Bank Kitakyushu Life Again (¥500,000)
Tokai City Picture Book Support Project for Families (¥500,000)

May 2023 Donations to Okayama University of Science
We donated ¥100,000 to be used for educational and research activities to foster the success of talented
individuals in society.

May 2023 Corporate membership in the Kobe Philharmonic
Since fiscal 2023, we have become a corporate member of the Kobe Philharmonic Association (annual
membership fee of ¥500,000), supporting the orchestra and showing a continued commitment to the arts in the
Kobe area.

May 2023 Endorsement of the Green Fund of the National Land Afforestation Promotion Organization
In fiscal 2023, we once again donated ¥500,000 to the Green Fund to support the forest maintenance andgreening activities of the National Land Afforestation Promotion Organization.

(Yen in thousands)

FY2021

Total spending for social contribution

6,460​

98

FY2022

10,600​Close past year contributions

March 2023 Sponsor of the 40th Kobe Jazz Street
We contributed ¥300,000 to the Kobe Jazz Street event, which will be held in October 2023 tocelebrate the 100th anniversary of jazz music in Kobe.

February 2023 Donation to the Be Kobe Mirai Project
We became a corporate ambassador and donated ¥500,000 the Be Kobe Mirai Project tosupport the youth who will be the future leaders of the city. Kobe Mayor Kizo Hisamoto is thehonorary project leader.

February 2023 TOCALO Scholarship for International Students in the University of Hyogo
Global Business Course
We continued our scholarship program by providing a ¥1 million scholarship to an international
student in the Global Business Course of the School of Economics and Management,
University of Hyogo.

February 2023 Endorsement of the Blue Carbon Creation Project on Kobe Airport Island(Purchase of J Blue Credits)
J Blue Credits are offset credits for “blue carbon,” which is carbon dioxide absorbed by marine
and coastal ecosystems, such as seagrass beds. The funds generated by this project will be
used to support private organizations working to conserve and create blue carbon as part of
the Port of Kobe’s efforts to become carbon neutral and Kobe Airports’ efforts to decarbonize
its operation. TOCALO has announced its endorsement and contributed ¥900,000 to theproject.

99

January-February 2023 Donations to support children and child-rearing
We donated a total of ¥2.2 million to the following organizations to support their activities
helping to raise healthy children and create environments that facilitate raising children.
Funabashi, Chiba Prefecture (Corporate Hometown Tax)
Akashi, Hyogo Prefecture (Corporate Hometown Tax)
Harima, Kako, Hyogo Prefecture (Corporate Hometown Tax)
Akashi City Children’s Fund
Hyogo Children’s Support Organization NPO

January 2023 Donation to the Young Member Fellowship Fund of the Japan Thermal Spray
Society
We donated ¥200,000 to foster young researchers involved in thermal spraying and to advancethe development of the thermal spray industry.

In August 2022, TOCALO made a contribution of ¥200,000 in support of WWF Japan.

July 2022 Donation to the Kibou no Machi Project of Kitakyushu City
We donated ¥1 million to help Houboku, an NPO in Kitakyushu City, build an integrated social
welfare facility based on its concept of “a city where anyone can ask for help when they needit.”

May 2022 Endorsement of the Green Fund of the National Land Afforestation Promotion
Organization
We donated ¥500,000 to the Green Fund to support the forest maintenance and greening
activities of the National Land Afforestation Promotion Organization.

May 2022 Donation to the Kobe Philharmonic Orchestra
At the request from the Kobe Philharmonic Association, we donated ¥1 million to promotecultural and artistic activities in our hometown of Kobe.

100

April 2022 Donation for humanitarian relief in Ukraine
We donated ¥3 million to the United Nations High Commissioner for Refugees (UNHCR) for
humanitarian aid to those affected in Ukraine and surrounding areas.

December 2021 University of Hyogo Global Business Course TOCALO ScholarshipThis fiscal year, we again provided TOCALO Scholarship, a one-year monthly scholarship of¥80,000 to one international student of the Global Business Course of the School of Economics
and Management.

June–July 2021 COVID-19 pandemic response support
We donated a total of ¥5.5 million to the following organizations to help healthcare
professionals working day and night to protect society from the impact of the COVID-19
pandemic.
Kobe Medical Support Fund

Funabashi, Chiba Prefecture

Akashi, Hyogo Prefecture

Harima, Kako, Hyogo Prefecture

Tokai, Aichi Prefecture

Fukuoka Prefecture

Kurashiki Riverside Hospital (Ohara

Tohoku University

HealthCare Foundation)

August 2020 University of Hyogo Global Business Course TOCALO Scholarship
Under our agreement with the University of Hyogo to support the “development of humanresources to play an active role in the international community,” we provided a one-year
monthly scholarship of ¥80,000 to one international student of the Global Business Course of
the School of Economics and Management. We are the first corporate entity to create a
program at the university to provide continuing scholarship support to an international student.

101June 2020 COVID-19 pandemic response support
We donated a total of ¥3.9 million to the following organizations to help healthcare
professionals working day and night to protect society from the impact of the COVID-19
pandemic.
Kobe, Hyogo Prefecture: Donation to the Kobe Medical Support Fund
Kurashiki, Okayama Prefecture: Donation for pandemic response measures
Funabashi, Chiba Prefecture: Donation to the Funabashi pandemic response measures
Akashi, Hyogo Prefecture: Donation to the Akashi pandemic response support
Harima, Kako, Hyogo Prefecture: Donation to support pandemic response measures of
medical staff and childcare workers
Tokai, Aichi Prefecture: Donation to purchase goods for medical professionals engaged inpandemic response activities
Miyako Medical Association (Yukuhashi, Fukuoka Prefecture): Donation of 6,000 masks

December 2019 Support for Typhoon Hagibis reconstruction efforts
We donated ¥1 million to the reconstruction efforts of the city of Sano in Tochigi Prefecture,site of the Sano Factory of our subsidiary Japan Coating Center, and the town of Osato in
Miyagi Prefecture, site of the Miyagi Technical Service Center, in the wake of Typhoon Hagibis
in October 2019.

November 2019 Donations to the Hojo Railway Revitalization Support Project in Kasai
We donated ¥3 million to the Hojo Railway Revitalization Support Project to improve the local
public transportation infrastructure in the city of Kasai in Hyogo Prefecture, which is withincommuting distance from both our Kobe Factory and Akashi Factory.

September 2019 Support for international students at the University of Hyogo
We created a three-year fund to donate ¥1 million annually to the Global Business Course
International Student Support Fund at the University of Hyogo. The fund will provide first-year
scholarships for new international students.

102

July 2018 Donations for heavy rain disasters
We donated ¥3 million to the city of Kurashiki in Okayama Prefecture, site of our Mizushima
Plant, to provide aid to victims and help reconstruct the city following the heavy rain events.

October 2016 Donations to the Kumamoto Reconstruction Assistance Project
We donated ¥5 million to the Kumamoto Reconstruction Assistance Project of Kumamoto
University to help the reconstruction of Kumamoto University from damage incurred during the
Kumamoto earthquakes in April 2016.

March 2011 Great East Japan Earthquake reconstruction support
We donated ¥20 million to the reconstruction efforts of Miyagi Prefecture and ¥10 million to
the town of Osato in Miyagi Prefecture, site of our Miyagi Technical Service Center, which wasunder construction, from damage caused by the Great East Japan Earthquake.

103

Sustainability

ESG data

Environment

Society

Governance

Environment
Climate change measures

FiscalFiscalFiscalFiscalFiscal

2018

2019

2020

2021

2022

19,193

16,75015,95017,450

6,990

0.58

0.54

0.49

0.48

0.17

CO2 emissions (Scope 1 and 2) (Consolidated) (t-CO2)

ー

ー

ー

31,121

16,118CO2 emissions (Scope 1 and 2) / Sales (Consolidated) (t-CO2)

ー

ー

ー

0.71

0.33

39,81640,15539,82442,49142,891

1.21

1.29

1.21

1.16

1.07

Electricity usage (Consolidated) (MWh)

ー

ー

ー

66,37165,025

Electricity usage / Sales (Consolidated) (MWh / millions of

ー

ー

ー

1.51

1.35

CO2 emissions (Scope 1 and 2) (Non-consolidated) (t-CO2)

CO2 emissions (Scope 1 and 2) / Sales (Non-consolidated)(t-CO2)

Electricity usage (Non-consolidated) (MWh)Electricity usage / Sales (Non-consolidated) (MWh / millionsof yen)yen)

Note: See Climate change measures for more information.

104

Waste reduction

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

39,81740,15539,82542,49142,891

217

229

209

203

188

LPG (kg)

12,807

13,161

10,61516,014

16,188

Diesel (kl)

34

31

31

32

26

Gasoline (kl)

100

108

101

88

88

City gas (m³)

110,227

128,768

160,944

165,732

149,164

Thermal spray materials (t)

291.5

325.2

297.2

271.9

298.7

Other materials (t)

65.8

74.0

59.2

94.3

113.1

1,776.1​

1,840.6

1,959.6

2,113.5

2,161.4​

1,709.1

1,758.9

1,883.0

2,017.6

2,022.7

General business waste (t)

59.7

70.0

59.3

57.6

61.2

Specially controlled industrial waste (t)

67.0

81.6

76.6

95.9

138.6

61.6

48.3

50.4

69.0

113.3

5.4

33.3

26.1

26.9

25.3

51.8

56.4

57.4

55.3

50.3

1.8

2.2

1.8

1.6

1.5

2.0

2.6

2.3

2.6

3.5

3.1

2.5

1.0

1.0

1.3

Electricity (MWh)Kerosene (kl)Energyconsumption
volumeVolume of use of
raw materials

Total industrial waste (t)Industrial waste (not including speciallycontrolled industrial waste) (t)Specially controlled industrial waste
Volume of waste(hazardous waste) (t)emissions
Specially controlled industrial waste (nonhazardous waste) (t)Industrial waste / Sales (t / billions of yen)

General business waste / Sales (t /billions of yen)

Specially controlled industrial waste /Sales (t / billions of yen)

Volume ofemissions toatmosphere

PRTR Law Class 1 Designated Chemical
Substances (t)105Volume of water
intakeEffluent volume

Recycling volume

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Clean water (m³)

63,525.0

63,610.0

65,850.0

69,552.0

78,410.0

Pure water (m³)

29.8

19.8

18.1

16.5

18.0

Groundwater (m³)

0.0

0.0

0.0

0.0

0.0

Sewage (m³)

47,613.0

47,625.0

49,338.0

54,776.0

60,818.0

Sewage (treated plant wastewater) (m³)

2,330.4

2,528.0

1,640.1

1,939.4

1,518.1

Seawater (m³)

11,283.0

10,434.0

10,984.0

9,193.0

9,710.0

Metal scraps (t)

145.8

90.6

108.4

90.1

111.7

Thermal spray material waste (t)

24.1

28.6

27.4

21.2

15.1

Blasting material waste (t)

569.1

570.8

716.4

686.2

715.6

Oil waste/Solvent waste (t)

11.2

9.2

12.0

12.0

16.6

Paper (t)

29.9

19.2

46.2

38.3

33.2

Note: See Waste reduction and environmental conservation for more details.

106SocialHuman resources data (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

ー

ー

ー

9.5% (71 of 750)

12.3% (100 of 811)

ー

ー

ー

38.5% (67 of 174)

39.9% (55 of 138)

ー

ー

ー

9.1% (2 of 22)

9.1% (2 of 22)

ー

ー

ー

1.4% (2 of 140)

2.3% (3 of 131)

ー

ー

ー

12.8% (6 of 47)

27.7% (13 of 47)

ー

ー

ー

27.3% (6 of 22)

45.8% (11 of 24)

Percentage of temporary employees*1

ー

ー

ー

18.8% (174 of 924)

14.5% (138 of 949)

Male

ー

ー

ー

12.8 years

13.1 years

Femaleーーー

9.5 years

9.7 years

Male

ー

ー

ー

13.0 years

11.1 years

Femaleーーー

7.6 years

4.8 yearsーーー

2.3% (21 of 924)

0.8% (8 of 949)

Regularemployees
Percentage of female
employees
Temporaryemployees

Percentage of female executives

Percentage of female workers inmanagement positions

Regularemployees
Percentage of female
workers among new hires
Temporaryemployees

RegularAverage

employees

consecutive
tenure bygenderTemporaryemployees

Voluntary turnover rate*2*1 Temporary employees are directly-hired employees, such as part-time and contract employees, and do not include dispatched employees*2 Excluding mandatory retirements of regular, contract, and other full-time employees

107

Human resources data (consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

ー

ー

ー

16.6% (198 of 1,196)

19.4% (252 of 1,300)

ー

ー

ー

40.4% (111 of 275)

43.3% (71 of 164)

ー

ー

ー

4.4% (2 of 45)

4.2% (2 of 48)

ー

ー

ー

5.0% (11 of 218)

5.3% (11 of 207)

ー

ー

ー

19.8% (21 of 106)35.7% (41 of 115)

employeesーーー

34.9% (15 of 43)

53.6% (15 of 28)

※

ー

ー

ー

18.7% (275 of 1,471)

11.2% (164 of 1,464)

Male

ー

ー

ー

11.7 years

11.9 years

Femaleーーー

9.7 years

9.3 years

Male

ー

ー

ー

9.3 years

11.5 years

Femaleーーー

6.3 years

5.6 yearsーーー

5.4% (80 of 1,471)

3.1% (45 of 1,464)

Regularemployees
Percentage of female
employees
Temporaryemployees

Percentage of female executives

Percentage of female workers inmanagement positions

Regularemployees
Percentage of female
workers among new hires
Temporary

Percentage of temporary employees 1

RegularAverage

employees

consecutive
tenure bygenderTemporaryemployees

Voluntary turnover rate*2*1 Temporary employees are directly-hired employees, such as part-time and contract employees, and do not include dispatched employees*2 Excluding mandatory retirements of regular, contract, and other full-time employees

108Percentage of mid-career hires (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

36%

29%

30%

21%

Percentage of mid-career hires

Fiscal 2022

46.8% (22 of 47)

Note: Including appointments of dispatched employees to regular employee positions, and excluding appointments of contract employees to regular
employee positions. New graduates hired outside of April are considered new graduate hires

Average paid holiday utilization rate (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

70%

66%

66.0%

76.5%

ー

Average paid holiday utilization rate

Note: Paid holiday utilization rate = Number of paid holidays utilized / Number of paid holidays granted (not including portion carried over from previous fiscal
year) x 100
Average paid holiday utilization rate = Combined paid holiday utilization rate for all employees / Total number of employees

Use of caregiver leave (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Number of eligible employees

ー

0

0

0

0

Number of employees utilizing leave

ー

0

0

0

0

Note: Caregiver leave is for taking care of a family member in need of nursing care for at least two weeks

Use of childcare leave (non-consolidated)

Fiscal 2018

Number of eligible employees

Number of employees utilizing leave

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Male

ー

25

19

32

25

Female

ー

7

8

2

3

Total

ー

32

27

34

28

Male

ー

0

0

10

17

Female

ー

7

8

2

3

Total

ー

7

8

12

20

109

Use of nursing leave (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Male

ー

4

4

8

13

Female

ー

3

2

5

7

Total

ー

7

6

13

20

Note: Nursing leave is for taking care of a family member in need of nursing care
Note: Including people who took hourly-based leave; a person who took multiple leaves during the fiscal year is counted as a single person taking leave

Use of care leave (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Male

ー

18

12

22

27

Female

ー

7

2

5

8

Total

ー

25

14

27

35

Note: Care leave is for raising children until they begin attending elementary school
Note: Including people who took hourly-based leave; a person who took multiple leaves during the fiscal year is counted as a single person taking leave

Percentage of employees with disabilities (non-consolidated)

Percentage of employees with disabilities

Fiscal 2018

Fiscal 2019

Fiscal 2020

ー

ー

ー

Fiscal 2021

Fiscal 2022

2.88%

2.71%

Gender pay gap (non-consolidated)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Regular employees

ー

ー

ー

ー

70.2%

Temporary employees

ー

ー

ー

ー

62.3%

Note: See Diversity for more details about our human resource initiatives.

110

Fiscal 2022

GovernanceFiscalFiscalFiscalFiscalFiscal

2018

2019

2020

2021

2022

Percentage of outside directors

ー

ー

ー

50.0% (450.0% (4

of 8)

of 8)

Percentage of female directors

ー

ー

ー

25.0% (225.0% (2

of 8)

of 8)

ー

ー

ー

6

4

ー

ー

ー

9

4

Number of consultations received
through the Clean Line System

Number of consultations received
through the external reporting system

111

Sustainability

GRI Standards reference table

Data on this website is presented in reference to the GRI Sustainability Reporting Standards. Further details oneach item are available at the provided links.

GRI 2 : General Disclosures
300： Environmental

GRI 3: Material Topics

400： Social

200： Ecomonic

GRI 2 : General Disclosures
1.The organization and its reporting practices
Number

2-1

2-2

Title of disclosure

Corresponding page

Organizational details

About us > Company data－

Entities included in the organization’s sustainability
reporting

2-3

Reporting period, frequency and contact point

2-4

Restatements of information

Sustainability

Sustainability > Environment >Material balance112

Number

2-5

Title of disclosure

Corresponding page－

External assurance

2. Activities and workers
NumberTitle of disclosure

Corresponding page

About us > Company data
2-6

Activities, value chain and other business
relationships
Technology

2-7

Employees

2-8Workers who are not employees

Sustainability > ESG data－

3. Governance
Number

2-9

2-10

2-11

2-12

2-13

Title of disclosure

Corresponding page

Governance structure and composition

Investor relations > Governance >Corporate governanceNomination and selection of the highest

Investor relations > Governance >governance body

Corporate governance

Chair of the highest governance body

Investor relations > Governance >Corporate governanceRole of the highest governance body in overseeing

Investor relations > Governance >the management of impacts

Corporate governance

Delegation of responsibility for managing impacts

113－

Number

2-14

Title of disclosure

Corresponding page

Role of the highest governance body in

Investor relations > Governance >sustainability reporting

Corporate governance

2-15

Conflicts of interest

－

2-16

Communication of critical concerns

－

2-17

2-18

Collective knowledge of the highest governance

Investor relations > Governance >body

Corporate governanceEvaluation of the performance of the highest

Investor relations > Governance >governance body

Corporate governance

Investor relations > Governance >2-19

Remuneration policies

2-20

Process to determine remuneration

2-21

Annual total compensation ratio

Corporate governance

Investor relations > Governance >Corporate governance－

4. Strategy, policies and practices
NumberTitle of disclosure

Corresponding page

2-22

Statement on sustainable development strategy

2-23

Policy commitments

2-24

Embedding policy commitments

2-25

Processes to remediate negative impacts

Sustainability > Message from thepresident

Sustainability > Society > Respectfor human rights

Sustainability > Society > Respectfor human rights

114－

Number

2-26

Title of disclosure

Corresponding page－Mechanisms for seeking advice and raisingconcerns

2-27

Compliance with laws and regulations

2-28

Membership associations

No violation (FY2022)－

5. Stakeholder engagement
NumberTitle of disclosure

Corresponding page

2-29

Approach to stakeholder engagement

－

2-30

Collective bargaining agreements－

GRI 3: Material Topics

NumberTitle of disclosure

Corresponding page

3-1

Process to determine material topics

3-2

List of material topics

3-3Management of material topics－
Sustainability > Long-term visionand materiality

Sustainability > Long-term visionand materiality

115

： Ecomonic

200

Economic Performance
Number

201-1

Title of disclosure

Corresponding page

Direct economic value generated and distributed

Investor relations > Management
policy > Financial highlights

Investor relations > Business risks

201-2

Financial implications and other risks andopportunities due to climate change

Sustainability > Environment >Response to the TCFD
recommendationss

201-3

201-4

retirement plans－

Financial assistance received from government－

Defined benefit plan obligations and otherMarket Presence
Number

202-1

202-2

Title of disclosure

Corresponding page

Ratios of standard entry level wage by gendercompared to local minimum wage

Proportion of senior management hired from thelocal community

116

－
－

Indirect Economic Impacts
NumberTitle of disclosure

Corresponding page203-1

Infrastructure investments and services supported

－

203-2

Significant indirect economic impacts－

Procurement Practices
Number

204-1

Title of disclosure

Corresponding page－

Proportion of spending on local suppliers

Anti-corruption
Number

205-1

205-2

205-3

Title of disclosure

Corresponding page

Operations assessed for risks related to corruption－

Communication and training about anti-corruption

Sustainability > Long-term vision

policies and procedures

and materiality

Confirmed incidents of corruption and actions

Investor relations > Governance >taken

Compliance

Anti-competitive Behavior
Number

206-1

Title of disclosure

Corresponding page

Legal actions for anti-competitive behavior, antitrust, and monopoly practices

117

No violation (FY2022)

Tax
NumberTitle of disclosure

Corresponding page207-1

Approach to tax

－

207-2

Tax governance, control, and risk management

－

207-3

207-4

concerns related to tax－

Country-by-country reporting－

Stakeholder engagement and management of：

300 Environmental
Materials
NumberTitle of disclosure

Corresponding page

Sustainability > Environment >301-1

Materials used by weight or volume301-2

Recycled input materials used

－

301-3

Reclaimed products and their packaging materials－

118

Material balance

Energy
NumberTitle of disclosure

Corresponding page

Sustainability > Environment >Material balance
302-1

Energy consumption within the organization
Sustainability > Environment >Climate change measures

302-2

Energy consumption outside of the organization

－

302-3

Energy intensity－
Sustainability > Environment >Material balance

302-4

Reduction of energy consumption
Sustainability > Environment >Climate change measures

302-5

Reduction in energy requirements of products andservices－

Water and Effluents
NumberTitle of disclosure

Corresponding page303-1

Interactions with water as a shared resource

－

303-2

Management of water discharge-related impacts

－

303-3

Water withdrawal

Sustainability > Environment >Material balance

119Number

Title of disclosure

Corresponding page

Sustainability > Environment >Material balance
303-4

Water discharge
Sustainability > Environment >Waste reduction andenvironmental conservation

303-5

Sustainability > Environment >Water consumption

Material balance

Biodiversity
NumberTitle of disclosure

Corresponding page

Operational sites owned, leased, managed in, or
304-1

adjacent to, protected areas and areas of highbiodiversity value outside protected areas

304-2

304-3

services on biodiversity－

Habitats protected or restored－

Significant impacts of activities, products, and

IUCN Red List species and national conservation
304-4

－

list species with habitats in areas affected byoperations

120－

Emissions
NumberTitle of disclosure

Corresponding page

Sustainability > Environment >Climate change measures

305-1

Sustainability > Environment >Direct (Scope 1) GHG emissions

Response to the TCFD
recommendations

Sustainability > ESG data

Sustainability > Environment >Climate change measures

305-2

Energy indirect (Scope 2) GHG emissions

Sustainability > Environment >Response to the TCFD
recommendations

Sustainability > ESG data

305-3

Other indirect (Scope 3) GHG emissions

305-4

GHG emissions intensity－
Sustainability > Environment >Climate change measures

Sustainability > Environment >Climate change measures
305-5

Reduction of GHG emissions
Sustainability > ESG data

305-6

305-7

Emissions of ozone-depleting substances (ODS)

Nitrogen oxides (NOx), sulfur oxides (SOx), andother significant air emissions－
Sustainability > Environment >Waste reduction andenvironmental conservation

121

WasteNumber

306-1

306-2

Title of disclosure

Corresponding page

Waste generation and significant waste-related
impacts

Sustainability > Environment >Waste reduction andenvironmental conservation

Management of significant waste-related impacts－
Sustainability > Environment >306-3

Waste reduction andWaste generated

environmental conservation

306-4

Sustainability > Environment >Waste diverted from disposal

Material balance

Sustainability > Environment >306-5

Waste reduction andWaste directed to disposal

environmental conservation

Supplier Environmental Assessment
Number

308-1

308-2

Title of disclosure

Corresponding page

New suppliers that were screened using
environmental criteria

Negative environmental impacts in the supply
chain and actions taken

122

－
－

： Social

400

Employment
Number

401-1

401-2

Title of disclosure

Corresponding pageNew employee hires and employee turnover

Benefits provided to full-time employees that are
not provided to temporary or part-time employees

Sustainability > ESG data－
Sustainability > Society > Diversity

401-3

Parental leave
Sustainability > ESG data

Labor/Management Relations
Number402-1

Title of disclosure

Corresponding page

Minimum notice periods regarding operationalchanges－Occupational Health and Safety
Number403-1

Title of disclosure

Corresponding pageOccupational health and safety management
system123

Sustainability > Society >Occupational safety and healthNumber

403-2

Title of disclosure

Corresponding page

Hazard identification, risk assessment, andincident investigation－
Sustainability > Society >

403-3

403-4

Occupational safety and healthOccupational health services

Worker participation, consultation, andcommunication on occupational health and safety

Sustainability > Society >Occupational safety and health

Sustainability > Society >403-5

Worker training on occupational health and safety

Occupational safety and health

Sustainability > Society >
403-6

403-7

Promotion of worker healthOccupational safety and healthPrevention and mitigation of occupational health

Sustainability > Society >and safety impacts directly linked by businessOccupational safety and healthrelationships

403-8

Workers covered by an occupational health andsafety management system

Sustainability > Society >Occupational safety and health403-9

Work-related injuries－

403-10Work-related ill health－Training and Education
Number404-1

Title of disclosure

Corresponding page

Average hours of training per year per employee

124－Number

404-2

404-3

Title of disclosure

Corresponding page

Programs for upgrading employee skills andSustainability > Society > Humantransition assistance programs

resource development

Percentage of employees receiving regularperformance and career development reviews－

Diversity and Equal Opportunity
Number

405-1

405-2

Title of disclosure

Corresponding page

Diversity of governance bodies and employees

Ratio of basic salary and remuneration of women
to menSustainability > ESG data

Sustainability > ESG data

Non-discrimination
Number406-1

Title of disclosure

Corresponding page

Incidents of discrimination and corrective actions

Sustainability > Society > Respecttaken

for human rights

Freedom of Association and Collective Bargaining
NumberTitle of disclosure

Corresponding page

Operations and suppliers in which the right to407-1

freedom of association and collective bargaining
may be at risk

125－

Child Labor
Number408-1

Title of disclosure

Corresponding page

Operations and suppliers at significant risk forincidents of child labor－

Forced or Compulsory Labor
Number409-1

Title of disclosure

Corresponding page

Operations and suppliers at significant risk forincidents of forced or compulsory labor－

Security Practices
Number

410-1

Title of disclosure

Corresponding page

Security personnel trained in human rights policies－

or procedures

Rights of Indigenous Peoples
Number411-1

Title of disclosure

Corresponding page

Incidents of violations involving rights ofindigenous peoples

126

No violation (FY2022)

Human Rights Assessment
Number

412-1

412-2

Title of disclosure

Corresponding page

Operations that have been subject to human rights－

reviews or impact assessments

Employee training on human rights policies or

Sustainability > Society > Respect

proceduresfor human rights

Significant investment agreements and contracts
412-3

－

that include human rights clauses or that
underwent human rights screening

Local Communities
Number

413-1

413-2

Title of disclosure

Corresponding page

Operations with local community engagement,

Sustainability > Society > Social

impact assessments, and development programs

engagement

Operations with significant actual and potential
negative impacts on local communities－

Supplier Social Assessment
Number

414-1

414-2

Title of disclosure

Corresponding page

New suppliers that were screened using social
criteria

Negative social impacts in the supply chain andactions taken

127

－
－

Public Policy
Number415-1

Title of disclosure

Corresponding page－

Political contributions

Customer Health and Safety
Number

416-1

416-2

Title of disclosure

Corresponding page

Assessment of the health and safety impacts ofproduct and service categories

Incidents of non-compliance concerning the healthand safety impacts of products and services－
No violation (FY2022)

Marketing and LabelingNumber

417-1

417-2

417-3

Title of disclosure

Corresponding page

Requirements for product and service information－and labeling

Incidents of non-compliance concerning productand service information and labeling

Incidents of non-compliance concerning marketing
communications

128

No violation (FY2022)

No violation (FY2022)

Customer Privacy
Number418-1

Title of disclosure

Corresponding page

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

129

No violation (FY2022)