TOCALO Co., Ltd. Sustainability Report 2022

Contents
Contents / Editorial Policy………………………………………………………………………………………………1
Message from the president……………………………………………………………………………………………3
Long-term vision and materiality………………………………………………………………………………………8Countermeasures to prevent the spread of COVID-19……………………………………………………………80
GRI Standards reference table…………………………………………………………………………………………88

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TOCALO Co., Ltd. Sustainability Report 2022

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 well as to progress towardachieving 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 toMarch 2022).

2

Sustainability

Message from the president

We will continue to grow as we pursue ourvision to build a “bright future for people
and nature”
A unified TOCALO led by ESG management
I believe our goal to build a “bright future for people and nature” is a good guide
toward realizing our vision. Even as the business environment around us changes, we

Noriyuki Mifune

will stay focused on attaining our goal.

President and Representative
Director

The biggest change for us in FY2021 was the decision to move to the new Prime
Market of the Tokyo Stock Exchange. As a publicly traded company on the Prime
Market, we must uphold and even greater level of accountability to society.
Companies are being strongly urged to disclose information related to sustainability,
including meeting the recommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD). Fulfilling our responsibilities is essential to ensuring
sustainable growth for our Company, and TOCALO is advancing a unified effort to stepup the measures we have been implementing.

Promoting ESG management will continue to be a priority, but ESG management itself
is not our objective. Our ultimate goal is to enhance our corporate value by building a“bright future for people and nature.”3

New Environmental Promotion Department to lead GHG emission reduction
In the year since the Environmental Promotion Department was created in 2021, we have initiated various efforts tobetter understand our environmental performance and reduce our environmental impact.

The medium-term management plan includes a target to reduce our greenhouse gas (GHG) emissions in fiscal 2030
by 46% from the fiscal 2013 level (as set by the Japanese government). We are doing our part to realize a carbonneutral society by taking steps to reduce GHG emissions from our business activities while also using our businessto help reduce emission volumes throughout society.

We provide surface modification technologies that give new properties and functions to the products and production
equipment of our customers. Our surface treatments lower GHG emissions by improving product performance andextending equipment service life.

One example of how our treatment technologies can improve environmental performance is in coal-fired power
generation, which uses fossil fuels. As power companies seek to reduce GHG emissions and make theirenvironmental footprints as small as possible, our surface treatments are indispensable to make existing equipment
operate more efficiently and extend their service life. Our technology can also improve power generation efficiency inthe renewable energy sector. We are receiving inquiries from an expanding range of fields, including a rapidly
increasing number of inquiries from the hydroelectric power generation sector.

In the automotive industry, our technologies are used on production lines for lithium-ion batteries, semiconductors,
and other electronic components as well as on numerous production lines for steel sheet used to reduce vehicle
weights.

In our own operations, approximately 95% of our GHG emissions are attributable to the use of electricity, and we aretaking steps to lower electricity consumption by improving our productivity and by actively converting to renewableenergy. The entire company is committed to achieving carbon neutrality.

4New Diversity Promotion Division enabling various work styles
We believe that the most important factor for sustainable growth as acompany is to allow each individual’s personality to shine through and play
an active role. In July 2020, we created the Diversity Promotion Committeewith the mission to identify issues related to workstyle reform and to ensure
the company remains a dynamic environment where employees can workwith enthusiasm. Although we have been actively working with eachbusiness site to address issues, we decided to establish a dedicateddepartment in the head office to take the lead in advancing reforms, and in
February 2022 created the Diversity Promotion Division.

We believe that if we provide positions where each person can use theirabilities to the fullest and offer a variety of work styles, then we will be acompany of workers who are highly motivated and have long careers at theCompany. By communicating to our employees that the Company is fullycommitted to reform, we believe our employees will change their approachto their jobs, accept each other for who they are, and create a workplacewith a diverse workforce.

We are also focusing on developing our human resources. We provide
educational programs to enhance expertise in various fields, including plans
to develop “digital” and “global” human resources.

Encouraging active discussion and strengthening governance
We are also strengthening our corporate governance. In fiscal 2021, we introduced an executive officer system,
strengthened the executive team, and fortified the supervisory function of the Board of Directors. The Board of
Directors continues to actively discuss how governance can be further improved. We are also formulating a
succession plan and examining ways to strengthen our structure for the future.

The Company’s directors are deeply committed to making TOCALO better and are actively engaging with people
inside and outside the Company. By maintaining open relationships and holding frank discussions, we can continue
our strong growth in the future.

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Rapidly achieving sustainable growth while building a “bright future for people andnature”
The TOCALO Group is working in unity to fulfill our responsibility to society. To be a company that is fully embraced
by its stakeholders, I believe we must take steps to further decrease our environmental footprint and continue to giveback to society while continuing to secure profits.

We will remain true to our principles as we adapt to the changing times and continue reaching forward to grow as webuild a “bright future for people and nature.”

A leader in surface modification technology helping society
achieve carbon neutrality
Hiroshi Hisano
Director, Senior Managing Executive Officer

As Environmental Director, I am placing particular emphasis on ensuring that all TOCALO employees areaware of environmental issues and that we are all working together to protect the environment. In addition to
the Environment Division, we have established the Environmental Promotion Department at the head officeto accelerate our efforts to help protect the Earth’s environment. The department is working with the
manufacturing division and equipment engineers at each plant to improve equipment operating rates andproduction efficiency. The exchange of opinions and sharing of good practices among our worksite
managers across Japan is adding fresh vitality to our activities. At the same time, we are replacing older
equipment with more energy-efficient equipment that consumes less electricity. The Environment Division is
working with all worksites on recycling reusable resources and reducing industrial waste, which has been
focus points for several years.

We are particularly focused on reducing GHG emissions and have set performance targets in the mediumterm management plan to reduce Scope 1 and 2* emissions, primarily by reducing energy consumption at
our plants. We have plans to investigate ways and reduce Scope 3* emissions in our supply chain.
Note: The Greenhouse Gas Protocol provides international standards for calculating and reporting GHG emissions. Scope
1 is direct GHG emissions from the company’s operations, such as from fuel combustion. Scope 2 is indirect GHG
emissions associated with energy, such as electricity, that a company purchases. Scope 3 is indirect GHG emissions
from other sources.

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The largest portion of our GHG emissions comes from the use of electricity, but we also consider the use offossil fuels in some thermal spraying processes to be an issue, and we are currently examining ways toconvert to other energy sources. As a leading company in surface modification technology, we are dedicatedto also being a leader in environmental technology and are engaging in collaborative research with
universities and other institutions.

In addition to reducing the environmental impact of our operations, our environmental activities are also
having another positive effect. Our employees are gaining a deeper understanding of environmental issues,and they are then able to propose ideas to customers for reducing their environmental impact and improving
production efficiency.

Our business is surface modification for customer equipment parts and products. Surface modification for
semiconductor manufacturing equipment contributes to higher performance and yield, energy saving, andimproved functionality for various types of equipment. Our highly functional coatings also save resourcesand energy by preventing the wear and tear of equipment parts and by enabling materials to be reused byonly processing their surfaces. I would like to attract more attention to the environmental benefits of oursurface treatments.

My biggest objective is to unite all employees and use our surface modification technology to contribute tocarbon neutrality and resource recycling. We will continue advancing our company-wide effort to addressenvironmental issues and fulfill our vision to build a “bright future for people and nature.”7

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 (Goalfor 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

8Materiality
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, and thenselecting possible candidate issues while considering megatrends, social issues, and the requirements andexpectations of stakeholders.
We then considered them in relation to the strategies of the medium-term management plan and selected the issues
that were in accord with the medium- and long-term direction of our business. The Board of Directors approved thefollowing five items as issues of materiality.

Materiality

Main initiatives

Related information

Invest with a focus on developing advanced coatings
Develop high-performance coatings for thefoundational elements of people’s lives (such as
digitalization, infrastructure, medical care, agriculture)
Develop coatings that help proliferate and improvethe efficiency of renewable energy power generation

Solutions(such as wind power, hydropower, geothermal power,

Surface modification

Advanced coatingstorage batteries)

technology′s ability toand latent market

Develop coatings that help customers reduce

protect the future global

development

greenhouse gas emissions (by supporting non-fossil

environment

fuels, recycling equipment)

Together with customers
and suppliers

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

9Materiality

Main initiatives

Related information

Advance decarbonization (carbon neutrality)
Investigate thermal spraying methods that do not use
fossil fuelEnvironmental
impact reduction
measures

Reduce power consumption by improving processing

Environmental

methods

management

Use renewable energy

Material balance
Targets and results

Measures to reduce waste and protect the environment

Measures to reduce
environmental impact

Reduce, recycle, and properly dispose of waste
Understand and improve water and air pollution
conditions
Reduce the use of harmful substances

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

Manufacturingsophistication andtechnology
Create smart on-site construction

quality
improvement

Together with customers
and suppliers

Reinforce the quality control system
Establish and promote product performanceassurance
Implement quality controls systems (such as ISO)
Construct a Product Qualification Plan

Cultivate andForm a medium- and long-term human resource

Together with ouractivate diverse

development plan

employees

human resources

Develop human resources and technical training
Methodically develop global human resources

10Materiality

Main initiatives

Related information

Create a comfortable work environment
Fully engage in safety first
Promote diversity (value the talents of women,
persons with disabilities, mid-career employment)
Promote workstyle reform

Lay the management foundation for a long-surviving
company

Thoroughcompliance (actingin accordance withcorporate ethics)

Act in accordance with corporate ethics (social
mores, ethics and morals, the environment, local

Compliancecommunity contribution)

Corporate governance

Actively promote ESG initiatives
Promote engagement with domestic and foreign
investors
Fully comply with the Corporate Governance Code11

Sustainability | For the 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 the mostimportant challenges of our time. Our basic environmental philosophy is to use surface modification technologies tosave resources, save energy, and reduce our environmental impact to protect the global environment and contributeto society.

Environmental policy (Revised: May 1, 2021)
Through our activities, products, and services focused on surface modification technologies, TOCALO will strive tocontinuously 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 climatechange.
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 well asother requirements to which we agree.

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5. Based on this environmental policy and the environmental impact of our activities, products, and services, setenvironmental targets and engage in activities based on the following themes to contribute to the improvementof 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 rate evenwhen relocating or launching new sites.

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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 201814

History of ISO14001 certification

Close history of ISO14001 certification

March 2002

The Headquarters and Thermal Spraying Technology R&D Laboratories
were the first sites in TOCALO to acquire ISO14001 certification.

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

August 2014

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

The Kobe Plant relocated from Higashinada-ku, Kobe City to Nishi-ku,
Kobe City. The former plant, where some production processes remained,
became the Fukae branch office of the Kobe Plant.
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December 2014

September 2015

February 2016

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.

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 thepartial 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​Plant
April 2022

and the registered address changed from Matsue, Kurashiki​City to Unozu,
Kojima, Kurashiki City The former Mizushima Plant remained a sub-plantof 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 toTokyo Plant Suzumi Workshop.

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

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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

Corporate management and support operations at

Minamimachi, Chuo-ku,

the Headquarters

Kobe, Hyogo②Miyagi Technical21-11 Kitanaka Bessho,

Manufacture, sale, and after-sales service ofService Center (Miyagi

Kawauchi, Osato-Cho,surface modification products using thermal

TSC), TOCALO Co., Ltd.

Kurokawa-Gun, Miyagi

spray technologies

Yamanashi Sales Office,
TOCALO Co., Ltd.

Sales and after-sales service of surface

1-1-24 Iida, Kofu,

modification products using thermal spray and

Yamanashi

peripheral technologies

17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.

Shizuoka Sales Office,Address

Scope of activities

Manufacture and after-sales service of surface

1-1-1 Gyoda, Funabashi,

modification products using thermal spray andChiba

peripheral technologies

Manufacture, sale, and after-sales service of

606-5 Suzumi-cho,surface modification products using thermal

Funabashi, Chiba

spray and peripheral technologies

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

Kohoku-ku, Yokohama,modification products using thermal spray and

Kanagawa

peripheral technologies

2F, 1086-45

Sales and after-sales service of surface

Shimohamada-cho, Ota,

modification products using thermal spray andGunma

peripheral technologies

Manufacture, sale, and after-sales service of33-3 Nibanwarishimo,
Nawamachi, Tokai, Aichi

modification products using thermal spray and

TOCALO Co., Ltd.

Motoichiba, Fuji

⑥Kobe Plant, TOCALO

1-5 Mitsugaoka, Nishi-ku,
Kobe, Hyogo⑦Akashi Plant, TOCALO

14-1, Minamifutami,Co., Ltd.

spray technologies

Sales and after-sales service of surface

Fujioji Bldg.102, 411-1,

Co., Ltd.

surface modification products using thermal

peripheral technologies

Manufacture and after-sales service of surfacemodified products using thermal spray andperipheral technologies

Manufacture, sale, and after-sales service of

Futami-cho, Akashi, Hyogo

surface modification products using thermal
spray technologies

Akashi Plant (Akashi-

15-1 Higashi-Shinjima,

Manufacture and after-sales service of surface

Harima Plant), TOCALO

Harima-cho, Kako-gun,modification products using thermal spray

Co., Ltd.

Hyogo

technologies⑧Thermal Spraying

14-3 Minamifutami,

Research and development of surface

Futami-Cho, Akashi,

modification products using thermal spray andHyogo

peripheral technologies

Technology R&D

Laboratories, TOCALO Co.,
Ltd.

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Organization name

⑨Kurashiki Plant,

Address

Scope of activities

Manufacture, sale, and after-sales service of2030-28, Kojimaunotsu,

surface modification products using thermal

TOCALO Co., Ltd.

Kurashiki, Okayama⑩Kitakyushu Plant,

1-48 Torigoe-cho, Kanda-

Manufacture, sale, and after-sales service ofcho, Kyoto-gun, Fukuoka

surface modification products using thermal

Prefecture

spray technologies

TOCALO Co., Ltd.

spray technologies(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 other plants
5. Waste management
6. Distribution, use, and disposal of products after use
7. Service management

19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 status ofcompliance. 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.

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 andFluorocarbons

Promotion of Improvements to the Management
Thereof ("PRTR Law")

Poisonous and Deleterious Substances Control Law

Fire Service Act

Industrial Safety and Health Act

High Pressure Gas Safety Act

Law Concerning the Promotion of the Measures to

Act on the Rational Use of Energy

Cope with Global Warming

Act on Promotion of Resource Circulation for Plastics

20

Environmental accounting
We focused on investing in environmental facilities, such as wastewater and waste
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.
Investments were higher than usual in fiscal 2021 due to the installation of new equipment with the relocation of theKurashiki Plant (former Mizushima Plant). Significant investment was also made to soundproof the Tokyo Plant
Gyoda Workshop.

Cumulative environmental
investments

Breakdown of capital expenditures

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Environmental education and training
We provide general education for all employees.
We systematically conduct education and training on the operation of theenvironmental 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 aretaught with initiatives in each workplace.
Environmental training

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

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Expectations for surface modification technology to reduce
environmental loads
Toshihiko Koyama
Audit & Supervisory Board Member

Global trends and environmental buzzwords have changed frequently in recent years with media reports on
all sorts of topics appearing every day. In these conditions in November 2021, we announced our mediumterm management plan and our vision to contribute a “bright future for people and nature.” TOCALO’s
surface modification technology is an environmentally friendly technology that helps our customers saveenergy and resources, while also being a key element in the manufacturing processes of innovative
customer products. Demand from society to reduce GHG emissions and electricity consumption willcontinue to grow. While continuing to supply surface modification coatings to customers to reduce theirenvironmental impact, we are also anticipating increasing demand for quick provision of materials to reduce
the environmental impact of production activities.

My role as an auditor is to audit the management and operational status so TOCALO can generate healthyand sustainable growth and enhance its corporate value over the long term. For this reason, I believe thatsharing the good practices that we find in our company audits throughout TOCALO will lead to even more
effective environmental activities.

TOCALO was listed on the Prime Market in April 2022. With this new status, I will fulfill my duty as acorporate auditor by rigorously examining the operational status of the executive side so the Company willcontinue growing and be able to make an even greater contribution to society and protect the environment.

23

Sustainability | For the environment

Material balance

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

Input (Energy, Raw materials, Water intake)

Energy consumption volume

Fiscal 2018

Electricity (MWh)Fiscal 2019

Fiscal 2020

Fiscal 2021

39,81740,15539,82542,491​

217

229

209

203

LPG (kg)

12,807

13,161

10,61516,014

Diesel (kl)

34

31

31

32

Gasoline (kl)

100

108

101

88

City gas (m³)

110,227

128,768

160,944

165,732

Kerosene (kl)Note: Results for fiscal 2018 to 2020 have been revised to correct omissions in the city gas data.

24

Trend regarding volume of use of raw materials
Note: Not including substrates

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Thermal spray materials (t)

291.5

325.2

297.2

271.9

Other materials (t)

59.9

72.6

55.7

90.9

Trend regarding volume of water intake

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Clean water (m³)

63,525.0

63,610.0

65,850.0

69,552.0

Pure water (m³)

29.8

19.8

18.1

16.5

Groundwater (m³)

0.0

0.0

0.0

0.0

25

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

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

General business waste (t)

60

70

59

58

Total industrial waste (t)

1,776

1,841

1,960

2,113

Trend regarding volume of emissions to atmosphere

PRTR Law Class 1
Designated Chemical Substances (t)Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

3.1

2.5

1.0

0.02

Effluent volume

Fiscal 2018

47,613.0

Fiscal 201947,625.0

Fiscal 2020

49,338.0

Fiscal 2021

54,776.0

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

Seawater (m³)

11,283.0

10,434.0

10,984.0

9,193.0

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.”26

Recycling volume

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Metal scraps (t)

145.8

90.6

108.4

90.1

Thermal spray material waste (t)

24.1

28.6

27.4

21.2

Blasting material waste (t)

569.1

570.8

716.4

686.2

Oil waste/Solvent waste (t)

11.2

9.2

12.0

12.0

Paper (t)

29.9

19.2

46.2

38.3

－

－

5.3

115.1

Waste plastic (t)Note: Waste plastic recycling monitoring commenced in fiscal 2020.

27

Sustainability | For the environment

Targets and results

We have established two major themes and are working on environmental activities by setting targets at each site.
We have set a CO2 reduction target for fiscal 2030 of 46% lower than the level in fiscal 2013 in accordance withgovernment targets. We have been preparing specific measures so that we can start efforts in this regard in fiscal
2023.

Results in fiscal 2021 and targets for fiscal 2022

Results in fiscal 2021 and targets for fiscal 2022
Results in fiscal 2021
We achieved 27 of our 33 targets.
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 renewableenergy sources, upgrading to energy-saving, high-efficiency air conditioners, and creating power consumption
visualization to help determine the next plan. Each TOCALO site sets independent environmental targets.
The main themes in fiscal 2021 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 climate change.
We achieved 27 of our environmental targets for the year. We came up short but are continuing to pursue 4 energy
conservation targets, 1 target for business activity promotion, and 1 target in the other category.

28

Targets for fiscal 2022
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 by using solar
power generation to produce our own power source and purchasing electricity generated from renewable energy
sources.
We are also replacing the remaining fluorescent lights with LEDs and planning to recycle the cooling water used inplants. Although our environmental performance could waver slightly because of the order-driven nature of ourindustry, we are working to achieve our reduction targets for greenhouse gas emissions as quickly as possible.
Our main themes in fiscal 2022 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 mitigating climatechange. All of our bases will set goals and conduct activities toward the same targets.

29

Site

Environmental target

Target for fiscal 2021

Fiscal 2021 results

Conserving energy and resources in our business activities

Increased
Headquarters

Promotion of

Expand external disclosure of

information

environmental data

ESG-related investment

disclosure on thedisclosure​

information

updated corporatewebsiteEnergy- and resourcesaving activities

Convert 100% of lighting to LED

100%

Miyagi
Energy- and resource-

Develop high-yield thermal spraysaving activities

specifications: 1 project/year

1 project/year
Continue advancing
technical engineering

Install energy-saving equipment
Energy- and resource-

and conduct equipment

saving activities

maintenance: 4 or more

6 projects/year

projects/year

Tokyo Gyoda

Reduction of thedefect rate​

Reduction of thedefect rate​

Tokyo Suzumi

Thermal spray material for
1.80%

rework
3.0% or less of total

Quality control
nonconformance/complaint rate

0.02%

0.07% or lessImprove production facilities andEnergy- and resource-

methods to reduce resourcesaving activities

consumption: 3 or more

4 projects/year​

projects/year

Examined recycling
Energy- and resource-

Recycling to reduce resource

carbide chips,

saving activities

consumption

grindstones, other
parts

30

Site

Environmental target

Reduction of thedefect rate​

NagoyaTarget for fiscal 2021

Fiscal 2021 results

Quality control nonconformities:
3 cases or less/month, 36 cases

35 cases/year

or less/year

Reduction of the

100% non-conformity report

defect rate​issuance

Reduction of electricElectric power-saving measures:

power consumption​

1 or more projects/year or more

100%

2 cases/year

Project quotation

Kobe
Energy- and resource-

Measures to reuse watersaving activities

resources

completed but work
not begun. Plan toinstall equipment
next year

Akashi

Promotion ofrecycling of thermal

Recovery rate of A material:

spray materials by

66.5% at Akashi Plant overall,Thermal Spray 1

19.5% or more at No. 4 Plant

Akashi Plant: 79.9%
No. 4 Plant: 28.9%

Department

Promotion ofrecycling of thermal
spray materials by
Thermal Spray 2

Recovery rate of B materials:
27.0% or more

13.50%

Department

Promotion ofrecycling of thermal
spray materials by
Thermal Spray 3

Recovery rate of C materials:
6.5% or more

4.90%

Department

Promotion ofrecycling of thermal
spray materials by
Thermal Spray 4

Recovery rate of D materials:
1.5% or more

Department

31

2.40%

Site

Environmental target

Reduction inelectricity
consumption

Promotion of energyKurashiki

and resource-saving
activities

Target for fiscal 2021

Installed flow sensors to monitor
compressed air flow

nonconformities​

Checked for air leaks
and implemented
repairs

Completed survey ofReduce paper usage andpaper usage,transition to digital

digitized some work
reports

Nonconformities: 3 or less
Reduction of

Fiscal 2021 results

cases/month, target of 36 cases/year
Nonconformance rate: Target
under 0.30%

Nonconformities: 28
cases/year,
nonconformance
rate: 0.20%

Kitakyushu
Volume of heat-resistant tape
Reduction of

used:nonconformities​

Reduce ratio to previous year

9.40%

sales by 10%

Contributing to the environment by promoting business activities

Headquarters

MiyagiTokyo Suzumi

NagoyaPromotion of new
project proposals

New projects: 12 or more
projects/month, target of 144 or
more projects/year

Promotion of new

Promotion of new item orders:project proposals

score of 120 or more points/year

Orders for new
products

Orders for new
products

167 projects/year​

330.5 points/year​

Number of orders received for
new items: 480 or more

888 cases/year

cases/year

Receipts of orders for newly
evaluated products: 60 or more

85 cases/year

cases/year

Collaborate with plant sales
Kobe

Proposals for longservice life coatings

departments to attract orders fortrial products: 5 orders/year(from June: 1 order every 2months)32

10 orders/yearSite

Akashi

Environmental target

Promotion of new
businesses

Target for fiscal 2021

Fiscal 2021 results

Number of new customer visits:
18 or more visits/month, 216 or

240 visits/year​

more visits/year

New development

Initiatives for new development:

activities

60 or more cases/year

53 cases/year

In-house development of

R&D
New development
activities

coatings or equipment tocontribute to environmental

6 cases/year

improvements: 3 or more
projects/year

Kurashiki

Kitakyushu

Orders for new
products

Promotion of new
project development

New item orders: 10 or morecases/month, 120 or more

171 cases/year

cases/year

New item orders: 15 or moreorders/month, 180 or more

426 cases/yearorders/year

Mitigating climate change

NagoyaPromotion ofrenewable energy

Calculate cost/benefit of

Determined to installinstalling solar panels (including

solar panels in theroof rental)

next fiscal year

Systematically eliminate CFC
R22 equipment and replace withenergy-saving equipment
AkashiGlobal warming

Systematically replace large

Progressing​as

mitigation

chillers and air conditioners withplannedenergy-saving models
When replacing spot coolers,
install energy-saving models

OthersTrial operation
Kobe

Pollution prevention

Introduced filter presses to

conducted, but

reduce industrial waste (sludge)

installation
postponed33

Sustainability | For the environment

Measures to reduce environmental impact

We at TOCALO are constantly aware of the environmental impact of our business activities, products, and services, and strives to prevent
environmental pollution and continuously improve our environmental performance through energy conservation, waste reduction, andappropriate management of hazardous substances.

Global warming mitigation
Air-pollution countermeasures

Appropriate management of chemical substances
Soil and water pollution prevention

Reduction of waste

Noise countermeasures

Global warming mitigation
We are implementing comprehensive measures to reduce electricity consumption, installingenergy-saving equipment, and planning conversion to renewable energy sources.
Our main sources of energy are kerosene, diesel oil, LPG, and city gas, which are primary energy sources derived from fossil fuels.
Electricity, which is a secondary energy source, accounts for 94.67% of our energy consumption and therefore the vast majority of our
CO2 equivalent emissions.
The CO2 equivalent is calculated by dividing the user’s electricity consumption volume into the power company’s total volume of CO2
emissions, and using the resulting coefficient to convert the electricity usage into equivalent CO2 emission volume. Electric power
suppliers publish their coefficients every year. However, even using the same amount of electricity, a company’s CO2 emissions can vary
substantially because of the different methods the power companies use to generate electricity.
TOCALO takes meticulous steps to save electricity as a regular component of efficient business operations while also implementing
measures including installing energy-saving equipment and upgrading aging equipment with environmentally efficient equipment.
We are also taking steps to convert to renewable energy sources that do not emit CO2 during power generation. These steps include
aggressive measures to cut CO2 emissions by using solar power generation for in-house energy production and purchasing electricity
generated using renewable energy sources.
The installation of energy-saving equipment and our other measures produced tangible results in fiscal 2021, as our ratio of electricity
consumption to sales declined from fiscal 2020.

34

Breakdown of energy consumption in fiscal 2021 (CO2 equivalent, consolidated)

Change in CO2 emissions (Scope 1 and 2)*Adjusted emission coefficients are applied to CO

Changes in electricity usage

2 emissions frompurchased electricity from FY2020 onward.
*Dry ice was added in FY2021 but is not used as an energy source.
*The electricity and diesel fuel CO emission coefficients have been revised
2

based on the latest data, and historical data has been retroactively corrected.

Our CO2 emissions increased in fiscal 2021. The year-on-year increase is due to our increase in production volume as well as higher CO2
emission coefficients for the power companies from which we source electricity. At the same time, our ratio of CO2 emissions to sales
decreased slightly from the previous fiscal year, indicating that we have improved our production efficiency. Some of the improvement
may also have come from several of our business sites converting to purchasing electricity produced using renewable energy.

35

TOPICS1

Improving fuel efficiency by analyzing vehicle driver data
We use telematics service with in-vehicle communication and GPS equipment to collect vehicle information of vehicles, and thenanalyze each driver’s data for ways to improve fuel efficiency. By analyzing driving distance, fuel efficiency, idling time, thenumber of sudden accelerations, and the ratio of constant-speed driving time, we can provide individual recommendations forfuel-efficient and safe driving.
We also found that hybrid vehicles provide significantly better fuel efficiency than gasoline-powered vehicles and accordingly
allocated hybrid vehicles to long-distance drivers. This is contributing to reducing our overall gasoline consumption. Thisapproach enabled us to visualize the benefits of fuel-efficient vehicles and provided concrete data to use when acquiring
vehicles.
Our hybrid-vehicle introduction ratio is currently 26.7％, and we plan to sequentially make all company vehicles hybrid vehicles.

We intend all vehicles used in company operations to be hybrid, electric, or other type of environmentally efficient vehicle in thenext four years.
Percentage of hybrid vehicles

Fiscal 2019

19.7%

Fiscal 2020

Fiscal 2021

％

21.1%

26.7

Commercial vehicle (hybrid vehicle)

36

TOPICS2

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 the Company’s first full-fledged in-house power generation
system including some 3,500 square meters of solar panels on its expansive roof.
During the first two months of full-fledge operation in May and June, the solar power systems generated 39.6% and 34.8%,
respectively, of the power we used. Currently, there is some surplus power generation capacity depending on the time of day, but
once all plant facilities have been relocated from the Mizushima Plant, it is expected that the plant will be able to fully utilize its
power generation capacity.
Along with improving the efficiency of our production operations, using in-house generated electricity to meet our power needs isa key step to reducing our CO2 emissions. We plan to take this a step further 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

37

Appropriate management of chemical substances
In accordance with the PRTR Law, we report the amounts of chemical emissions and transfers.
In fiscal 2021, TOCALO reported the amount of designated chemicals released into the environment and transferred for six substances inaccordance with the PRTR Law (Pollutant Release and Transfer Register: Chemical Substance Release and Transfer Notification System).
Emissions met all regulatory standards under the act.

Release and transfer volume of PRTR Law, type 1 designated chemicals in fiscal 2021

Released amount (kg)

Emission intotheatmosphere

Chrome andTransferred amount (kg)ReleaseDiscarding

Landfill

into

into the soil at

disposal atTransferring

off-sitepublicplace ofplace ofto sewerage(industrial

watersbusinessbusiness

Transferring

waste)

6.7

0

0

0

0

4,810

2.2

0

0

0

0

1,020

1 990

0

0

0

0

610

8.4

0

0

0

0

7,380

Vanadium compound

0

0

0

0

0

3,600

Boron compounds

0

0

0

0

0

8,700

trivalent chrome compounds

Cobaltand its compounds

TolueneNickel38

* We handled less than 1 ton of 1-2-4 trimethylbenzene in FY2021, and therefore submitted notification of the amount as 0 in accordance the PRTR Law. We
had submitted notification of handling of the substance in FY2020. (PRTR Law requires notification when the annual amount of 1-2-4 trimethylbenzene
handled at each business site is 1 ton or more.)* We handled less than 0.5 ton of nickel compounds in FY2021, and therefore submitted notification of the amount as 0 in accordance the PRTR Law. We
had submitted notification of handling of the substances in FY2020. (PRTR Law requires notification when the annual amount of nickel compounds
handled at each business site is 1 ton or more.)

1 Toluene emissions into the atmosphere amounted to 990 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.

39

Reduction of waste
We are properly disposing of all types of waste, from general waste to specially controlledindustrial waste.
(1) General waste
Paper constitutes the majority of business-related general waste, and we are committed to reusing and recycling paper. Whenconfidentially 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 and,after disposal, it is used at cement factories and elsewhere to adjust combustion temperature.
The other main components of industrial waste are sludge (17%), mixed waste (10%) waste plastics (9%), waste alkali (9%), slag(7%), and glass and ceramics (6%).
Sludge contains large amounts of dust generated from thermal spraying. Although thermal spray dust is dry, 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. The percentage of mixed waste increased fromlast year owing to revisions to how the waste is sorted.
Waste plastics include material containers and secondary materials, as well as waste paper and wood scraps that contain oil.
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.
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 the potential of getting wet.
Glass and ceramic scraps, such as refractory bricks, contain ceramic-based grinding materials that cannot be recycled.
(3) Specially controlled industrial waste
Dust collectors capture most of the dust generated by thermal spraying using chromium-containing materials (such as stainlesssteel). When the dust volume exceeds the regulatory limit in dissolution tests, it is disposed of as specially controlled industrial
waste.

40

Changes in total waste emissions

Breakdown of specially controlled industrial waste

Changes in total waste emissions/sales

41Plastic waste reduction
TOCALO is also addressing the global issue of plastic waste.
We are progressively replacing disposable plastic products, such as thermal spraymaterial containers, transportation materials, and packaging materials, withmaterials that are environmentally friendly and can be reused. We are also actively
promoting recycling and taking steps to reduce the amount of materials used.
In July 2021, each business site began examining the possibility of replacing thespoons and other utensils used in their lunch cafeterias with environmentallyfriendly materials. All locations have introduced utensils made with environmentally

Paper plate and wooden spoon

friendly materials, such as bioplastics, or switched to reusable metal utensils. We
are also testing different materials to use for the lunch containers. Discussions arecontinuing at all sites to find more ways to reduce waste and food loss.

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 bybusiness operators targeting the business operators of Port Island and Rokko Island, and the TOCALO Headquarters (within
Kobe City Port Island) has been participating in 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 transport companies.

42

Air pollution prevention
Dust generated in the thermal spraying process is safely collected before it can be 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 itis melted and then sprayed to form a coating.
Powders that did not melt or did melt but were not deposited when sprayed become dust.
Dust collectors collect the dust before it can be released into the atmosphere. (Photo)
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 filtered with internal filters made of woven and nonwoven
fabrics. The fine layer of dust that collects on the filter surface becomes thick can clog
the filter, causing the filter to lose suction pressure and reducing the efficiency of the dust
collection. Using a pulse jet, compressed air is used at regular intervals to remove thedust 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 2021, we have not confirmed the generation of sulfur oxide (SOx)from our operations.

43

Cartridge-type dust collector

Soil and water pollution prevention
Soil and water pollution prevention is particularly critical because soil and water 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 prior to being discharged into the sewage system. As aprecaution for an accidental leak of wastewater, the plant has installed pipes andconcrete walls to prevent and quickly and visually detect leaks. Anti-spreading materials
are also in place to prevent leaks from spreading. In addition to periodic monitoring andmeasurements, the equipment is controlled by a rigorous system compliant withapplicable laws and regulations.

44

Plant wastewater treatment steps(coagulating and sedimentation
treatment facility)

Using wastewater treatment to reduce our environmental impact
Kiyofumi Kusumoto (Chief, Manufacturing Section, Kobe Plant)

I have been involved in wastewater treatment and in charge of wastewater management at the Kobe Plant for about 25 years.
Our wastewater treatment is mostly done by sensors that measure pH and potential values, but there are also elements thatcannot be quantified, such as the color or the smell. I am proud of the high level of wastewater treatment that we achievethrough accurate measurements and accumulated experience.
Considering the trends in the environment, however, I believe we can do even better. To comply with legal standards, we have no
choice but to administer large amounts of neutralizing agents, but those agents remain in the wastewater even after treatment.
The neutralizing agents are automatically injected, but we are also making small manual adjustments to prevent the injection
volume from becoming excessive. I would like to be able to make the adjustments even more accurate so we can make ourenvironmental impact even smaller.
I would also like to pass on the knowledge and experience from my 25 years to the next generation. I want to quantify the part of
my job that I execute based on experience to make a fully automated program. It would be very gratifying if I can contribute evena little to reducing our environmental impact.

Noise countermeasures
Noise barriers have been installed and noise measurements are also carried out regularly.
The main types of equipment that generate noise of a concerning level are aircompressors, dust collectors, and other blowers. However, in addition to this equipment,
there are other noise sources, and we are taking steps to avoid disturbing theneighborhood by implementing soundproofing measures such as installing thesefacilities inside buildings and installing special soundproof walls.
In addition, we regularly measure noise levels to ensure that our facilities and equipment
are within regulatory limits.
Noise measurement using specialized equipment

45

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 areproviding support for greening, protecting biodiversity, and other environmental
activities.
In May 2022, we donated ¥500,000 yen to the Green Fund managed by the National
Land Afforestation Promotion Organization. The Green Donation Funds is used forforest maintenance in communities 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 inJapan 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/​

46

Certificate of Appreciation from the Presidentof the National Land Afforestation Promotion
Organization

Sustainability | For the environment

Response to 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 are advancing initiatives based on the TCFD* recommendations and actively
disclose information in four core areas: governance, strategy, risk management, and metrics and targets.
Note: The Task Force on Climate-related Disclosures. The TCFD was established in 2015 by the Financial Stability Board, a body
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 andother organizations to disclose information related to climate change, they also provide a framework for making suchdisclosures.

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 is chairedby 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 mediumterm 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.

Strategy
In 2022, we started identifying risks and opportunities related to climate change. In the table below, we have outlined
the risks and opportunities concerning TOCALO Co., Ltd. that have been identified as of June 2022, as well as
relevant response measures. Going forward, we intend to engage further in this area, including expanding the scope
to include the entire Group and calculating financial impact, as well as to factor these risks and opportunities into ourbusiness strategies.

47

Risks, Opportunities, and Response Measures
CategoryType

Details

Timeframe

Impact on BusinessResponse Measures

Renewable energyLong-term green electricity contracts
Consider incorporating additional renewable energy
sources, such as solar power (increase the ratio ofrenewable energy consumption by switching to
renewable energy sources)
Consider methods for storing electricity generated using
Increase in energy

solar power

procurement costs
following the

Medium- to long-term

Medium to large

introduction of carbon

Facilities
Upgrade facilities to increase productivity

pricing systems

Replace equipment with leading energy saving models,

Policy and regulatory

including air conditioners, refrigeration equipment, LED
lightbulbs, and compressors
Upgrade facilities to eliminate CFCs
VehiclesSwitch company vehicles to hybrid models
Consider introducing electric vehicles, etc.

Transition risks
Increase in materials
procurement costs
following theLong-term

MediumEnhance information gathering

introduction of carbon
pricing

Fall in demand forcoatings for facilities
Marketthat use fossil fuels,
such as coal-fired

Short- to mediumterm

MediumAdapt to technology geared toward alternative fuels suchas hydrogen, ammonia, and biomass

power plants

A loss of reputation

Enhance and expand management and information

among stakeholders,

disclosure concerning CO2 emissions

investor outflow and adrop in share price, or
Reputational

rejection of recruitment

Short- to medium-

opportunities due totermMediumStrengthen communication with stakeholders

insufficient response
and information

Consider acquiring third party certification to improve thedisclosure regarding

trustworthiness of information disclosure

climate change

Physical risks

Incurring of recovery

Formulate disaster plans and consider moving plants incosts due to damage

coastal areas that have a high risk of flooding due to rising

to plants andtides and high waves

operational stoppages
caused by disasters
such as typhoons,
Acuteheavy rains, lightning
strikes, and rising sea

Long-term

largelevelsCounter instantaneous power failures caused by lightning
strikes (complete introduction of UPS devices,
countermeasures for hydraulic control equipment)

Production delays andincreased costs due toStrengthen business continuity planning, including

supply chain

measures concerning supply chainsdisruptions

Chronic

Increased impact on
employee health due toheat stroke, infectious

Short- to long-term

MediumMedium- to long-term

Medium

Improve working environments using cutting edge air
conditioning

diseases, etc.

Procurement

Monitor fluctuations in suppliers’ prices due to changes atdifficulties and steep

mines caused by regulations on materials extraction,

price rises due toincluding metals

decreasing extractionof metals

48

CategoryType

Details

Timeframe

Impact on BusinessResponse Measures

Pursue customer satisfaction concerning quality by
investigating the impact of changes at mines on quality

Develop and market coating technology tailored tocustomers’ GHG emissions reduction efforts (alternative
fuels such as hydrogen, ammonia, and biomass, recycling
facilities, etc.)

Revenue growththrough an increase in

Develop and market coating technology tailored to efforts

opportunities toTechnologicalcapture new customers

Short- to long-termlarge

to promote and streamline natural energy power

driven by the need ofgeneration (wind power, hydropower, geothermal power,

customers to adapt tostorage batteries, etc.)

climate change
Opportunities

If raw materials producers switch to renewable energy,
showcase our ability to supply customers with coatings
that generate zero Scope 3 GHG emissions

Increase in potential
orders by encouraging
understanding of how
Reputational

coating technology

Short- to long-term

connects to energy
saving and GHG
emission reductions
Short-term: Within thenext five years
Medium-term: To 2030
Long-term: To 2050

49

large

Actively showcase our position as the leading company forthermal spray coating

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

Metrics and targets
Energy consumption by TOCALO Co., Ltd. includes primary energy derived from fossil fuels in the form of kerosene,light oil, LPG, and natural gas, and secondary energy in the form of electricity.
Converted to CO2, electricity and kerosene account for 92.55% and 3.22% of emission respectively, and 95.77% in
total, meaning these two energy sources are responsible for the majority of the Company’s CO2 emissions.
TOCALO Co., Ltd. has set the target for fiscal 2030 of reducing Scope 1 and 2 GHG emissions by 46% of fiscal 2013
levels (or in other words, keeping them under 54%). Going forward we plan to implement initiatives that include
expanding the coverage of CO2 emission measurement, setting long-term targets, and broadening efforts to include
Scope 3 emissions.
We will also set targets for other climate change response measures.

Change in CO2 emissions (Scope 1 and 2)

50

Sustainability | Together with society

Together with customers and suppliers

We are aiming to be a company trusted by customers and are striving to provide products and services that satisfy
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 of quality control
and good services. We strive to communicate the information ourcustomers 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 the results ofquality control efforts, and technology report-presentation competitions toannounce the results of new research. These tournaments are designed toraise the level of both technologies and quality management throughout theCompany. We also established the Quality Headquarters, headed by adirector, to strengthen our management system.

The TOCALO exhibit at the 7th Mass-

In 2017, we moved our headquarters to the Kobe Biomedical Innovation
Cluster (KBIC; Chuo Ward, Kobe City), where we are focusing on market
development in medical fields and collaborating with manufacturers in thearea. We also actively participate in exhibitions on the themes of “Medicine,”“Environment and Energy,” and “Transportation Equipment.” In fiscal 2021,
51

Trans Innovation Japan in 2021

TOCALO exhibited at 4 trade shows. As a problem-solving company, we
proactively seek to identify customer issues and work with customers torealize better products and services.

Exhibit in fiscal 2021
Medtec Japan 2021 (Tokyo Big Site) April
Manufacturing Fair 2021 (Marinemesse Fukuoka) October
13th Kobe Manufacturing SMEs Exhibition November
7th Mass-Trans Innovation Japan (Makuhari Messe) November

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

Status of ISO 9001 certification

ISO 14001certified
plant

Kitakyushu
Plant

Tokyo
Plant

Akashi
Plant

Registered

RegistrationdatenumberCertified activities

Thermal spray processing for industrial machinery parts,
Jul. 1998

JQA-2470

equipment parts for the chemical industry, and parts for FPD andsemiconductor manufacturing equipment

May 1999

Oct. 1999

JQA-QM

Surface treatment processing for industrial parts (thermal spray3344

processing and other peripheral technologies)

JQA-QM

Surface treatment processing for industrial parts (thermal spray3810

processing and other peripheral technologies)

ZAC processing of parts for FPD and semiconductor
Kobe Plant

May 2003

JQA-QMA

manufacturing equipment and general industrial machinery parts

10001

TD processing of insert block molds for automobile forming
mold

52

ISO 14001certified
plant

Kurashiki
Plant

Nagoya
Plant

Registered

Registrationdatenumber

Dec. 2011

Nov. 2017

Certified activities

JQA-QMA

Surface treatment processing for industrial parts (thermal spray14492

processing and other peripheral technologies)

JQA-

Surface treatment of parts for general industrial and aerospace

QMA15690

industries (thermal spraying)

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.)

specifications53

Process

Implementation

Incoming
inspection
Purchasing
Manufacturing

process control
Manufacturing
process control
Shipment
inspection

Process

Shipment

Process

Certified activities

items

Incoming inspection (prevention of non-conforming parts andmaterials into the manufacturing process based on source
management)
Purchasing management (purchase of conforming products fromselected suppliers)
Manufacturing process (management of individual processes
based on 5Ms to provide stable product quality)
Shipment inspection (provision of products that meet customer
requirements)

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 and sales byvisiting customers
Sincere response to customer complaints

54

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

967616467

JIS Q
9100

Certified activities

Surface treatment of aerospace components(thermal spraying)

Nagoya Plant
Nadcap55

Surface treatment of aerospace components(thermal spraying)Sustainability | Together with society

Together with our employees

Our company complies regarding the payment of wages above the minimum levels set in each region, and in our
Corporate Ethics Guidelines, we state the obligations we have to employees and our determination to meet thoseobligations so that employees can maximize their abilities and achieve self-fulfillment.
We also comply regarding maintaining working conditions above the standards set forth in laws and ordinances. We
hold labor-management gatherings that include company-side management and the management of labor unions
around six times per year, and repeatedly engage in talks with the aim of realizing higher quality work environments
and treatment.

Creating an environment for all employees to thrive
Occupational health and safety initiatives

Respect for human rights

Work-life balance

Creating an environment for all employees to thrive
Initiatives to support balancing work and childcareChildcare and caregiver leave
Shorter working hours and leave for childcare and nursingChildren nursing care and caregiver holiday leave

Initiatives to create a comfortable work environment
Introduced a new e-learning system
Awards and incentive programs

56

Initiatives to create an environment in which all employees can fully demonstrate
their abilities
Re-employment program for retired employees
Extension of retirement age
Stress checks
Introduction of refreshment leave
Introduction of flextime systems
Implementation of an hourly-based paid leave system
Introduction of telework

Human resources data (non-consolidated)

Fiscal 2021

Full-time/Careertrack

Full-

Percentage of female employees

time/Professional

Temporaryemployees

11.1%（43/386 people）（28/364 people）

7.6%

38.5%

（67/174 people）（2/22 people）

Percentage of female executives

9.0%

Percentage of female workers in management positions

1.4%（2/140 people）

Full-time/Careertrack

Full-

Percentage of female workers among new hires

time/Professional

Temporaryemployees

18.1%（4/22 people）（2/25 people）

8.0%

27.2%

（6/22 people）％（174/924 people）

Percentage of temporary employees1

18.8

57

Fiscal 2021

Full-time/Career-

Male 12.5years, Female

track

9.8yearsMale and female average number of years of

Full-Male 13.2years, Female

continuous service

time/Professional

9.1years

Temporary

Male 13.0years, Female

employees

7.6years

Voluntary turnover rate2

2.2％（21/924 people）

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

Human resources data (consolidated)

Fiscal 2021

Full-time

16.5%（198/1196 people）

40.3%（111/275 people）

Percentage of female employees
Temporaryemployees（2/45 people）

Percentage of female executives

4.4%

Percentage of female workers in management positions

5.0%（11/218 people）

Full-time

19.8%（21/106 people）

Percentage of female workers among new hires
Temporaryemployees

34.8%（15/43 people）％（275/1471 people）

Percentage of temporary employees1

18.6

Male and female average number of years of

Full-time

continuous service

58

Male 11.7years, Female
9.7yearsFiscal 2021

Temporary

Male 9.3years, Female

employees

6.3years

Voluntary turnover rate2

5.4％（80/1471 people）

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

Percentage of mid-career professionals

Fiscal 201836％

Fiscal 201929

Fiscal 2020

％

30

％

Fiscal 2021

21％

Note: Including temporary appointments from dispatched employees, and excluding permanent appointments from contract
employees
New graduates hired outside of April are considered new graduate hires.

Competitive ratio in recruitment by gender for the last three fiscal years

Employment management classification

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

2.6 times

2.68 times

Skills and clerical positions

0.33 times

1.06 times

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

59

Various career courses
Status of mid-career recruitment and re-employment, such as conversion to regular workers in the last three fiscal
years

Last three
Action taken

fiscalNumber of people

years

A. Conversions to regular workers, hired dispatchedworkers

Fiscal2019-2021

21 (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 asregular workers

21 (same as above)

1 (not including the above)

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.

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

Prevention of harassment
Measure to prevent harassment included harassment training for all employees in 2020. We introduced harassment
training for managers in fiscal 2019.
To raise compliance awareness, the company distributes the Compliance Handbook to all employees, and has
established contact points for whistleblowing and consulting on harassment and other issues inside and outside theCompany.
Employment rate of persons with disabilities
2.88% (non-consolidated, end of March 2022)

61

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 and health, aswell as enhance various systems related to welfare in compliance with the Labor Standards Act and the Industrial
Safety and Health Act. Parallel to this, each business site has established its own measures to ensure safety andminimize 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 andCounseling Center.

2022 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 andzero injuries” by showing due consideration to safety and health in ways that safeguard and enhance the health 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 relevant internal
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
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

62

Heat stroke countermeasures at manufacturing sites
In recent years, summer heat has become increasingly severe, and temperatures at manufacturing sites have been
higher than before, increasing stress on employees. The higher the temperature gets, the greater the risk of heatstroke 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 our flat
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 steam generated inoperations to the outside, reducing outdoor heat input through the use of heat-shielding coating, and installing largescale 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 these measures in place, many of theworkers at sites say that the work has become easier, which has also led to more 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.

Approach to mental health
Our initiatives to support the employee mental health of our employees include annual stress checks as required bylaw 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 that provide
employees with mental conditions the opportunity to consult with industrial health advisors. The consultations willserve 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 from thecommittee 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 on entering the Company to new employeesthat is centered on safety education, and focusing on foreman training that is based on guidance from external
consultants.

63

Work-life balance
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 based on theconstructive opinions and information employees shared regarding improving our company received from
employees from various backgrounds and all genders, ages, and affiliations. We also proactively produce anddistribute pamphlets and posters.
In February 2022, we established the Diversity Promotion Division, which will be 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.

64Creating a corporate culture that empowers diversity
Yuka Wakabayashi (Manager, Diversity Promotion Division, HR & General Affairs Division)

TOCALO created the Diversity Promotion Committee and launched a company-wide project in July 2020. The
committee gathered people of all ages and all departments, including the company president, whose firsttask was to identify the good points and issues related to diversity at each operating site. The atmosphere at
the committee was one in which people of all perspectives and ages had equal opportunity to openly
express their views. The younger members offered numerous fresh opinions that spurred much lively
discussion.
Although I believe our company started its discussion of diversity late compared to other companies,
considering that many of our employees were not familiar with the concept of diversity, I think that
establishing a foundation for our diversity activities was a great achievement.
The Diversity Promotion Division took over the committee’s activities in 2022 as a division fully dedicated todiversity activities. The division’s first objective is to increase diversity awareness inside the company
through events, in-house publications, and other activities.
We have also created special team to promote diversity at all of our plants and offices. Our mission is forthese teams to form a nationwide network that will accelerate our efforts.
We have just embarked on a long road ahead for promoting diversity, and I believe the first step is topromote women in the workplace. I am looking forward to creating a corporate culture that not only
supports women, but also supports all people who are “different,” including foreigners and people withdisabilities. I want our corporate culture to be a strength for TOCALO.

In addition to reducing long working hours and promoting the use of paid holidays,
we are also enhancing our childcare-leave system and raising awareness ofworkstyle options.
Employees and management are working together to make changes to support a balance between work and life by
reducing extended working hours and encouraging employees to take annual paid leave. We have also established achildcare-leave system to help employees balance work and child-rearing amid Japan’s rapidly declining birthrate andaging population. In addition, we are improving the work environment to better support 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
also caring for family members, and are raising awareness of the available workstyle options.

65

Average paid-holiday utilization rate
Note: Paid-holiday utilization rate = number of paid holidays utilized/number of paid holidays granted (not including portion carriedover from previous fiscal year) × 100
Average paid-holiday utilization rate = total of paid-holiday utilization rates of all employees/number of all employees

Fiscal 2021 result-calculation period: April 2021 to March 2022

Fiscal 2019

Approx. 70%

Fiscal 2020

Fiscal 2021

Approx. 66%

Approx. 66%

Use of caregiver leaves
Note: Caregiver leave is for taking care of a family member who needs nursing care for at least two weeks

Fiscal 2019

Fiscal 2020

Fiscal 2021

Number of eligible employees

0

0

0

Number of utilizing employees

0

0

0

Use of childcare leave
Note: Childcare Leave is for taking care of a child under the age of one in the same household

Fiscal 2019

Number of eligible employees

Number of utilizing employees

Fiscal 2020

Fiscal 2021

Male

25

19

32

Female

7

8

2

Total

32

27

34

Male

0

0

10

Female

7

8

2

Total

7

8

12

66

Work efficiently and put full effort into both work andchildcare!
Keisuke Majima (Tokyo Plant, Sales Division, Sales Department 2)

The job of my Sales Division is to be the point of contact with our customers, to find issues that we can use
our surface modification technology to fix, and to propose solutions. We work every day to satisfy ourcustomer and increase orders.
In March 2022, I became the first male employee at our company to take childcare leave for more than amonth, and ultimately was away from work for about 80 days. I had heard that no one in the Sales Division
had ever taken childcare leave before, so I was a little worried about whether it would be all right to take time
off and also whether I would really be able to return to work as it was before.
However, my superiors and coworkers were very supportive when I applied for the leave, and made me feelvery comfortable with my decision.
The childcare leave allowed me to spend quality time with my family. I also learned firsthand how difficult it
is to take care of an infant, so now even though I’m back at work, my wife and I are continuing to share thechild raising duties.
I am giving more of my time to raising our children at home, so I don’t have the time to work as much as I did
before. Because my time is limited, I am trying to use the time as efficiently as possible when I do my job.
I’ve also noticed that there are a lot of tasks in our department that rely on a specific person to take care of,and I think that getting rid of tasks like that will improve the efficiency of our whole department.

Use of nursing leave
Note: Nursing leave is for taking care of a family member in need of care

Fiscal 2019

Fiscal 2020

Fiscal 2021

Male

4

4

8

Female

3

2

5

Total

7

6

13

Note: Including people who took hourly-based leave; a person who took multiple leaves during the fiscal year are counted as 1.

67

Use of care leave
Note: Care leave is for raising children until they begin attending elementary school

Fiscal 2019

Fiscal 2020

Fiscal 2021

Male

18

12

22

Female

7

2

5

Total

25

14

27

Note: Including people who took hourly-based leave; a person who took multiple leaves during the fiscal year are counted as 1.

Initiatives for human resource development
Our company has established education & training rules in order to promote self-development and mutual
development, and enable the development of creativity through the performance of professional duties.
We first of all provide education to new employees and mid-career professionals for the acquisition of basic
concepts and knowledge & skills regarding the company and work. Subsequently, education at individual workplaces,
managerial education, supervisor education, specialized education, and so on are provided at the appropriate times
as necessary.

Primary Training Programs
New employee training
Second and third-year employee training
New supervisor training
Management candidate training
New management training

68Sustainability | Together with society

Together with local communities

We are aiming to be a company that enjoys the familiarity of local residents earned through participating in cleanup
activities in the surrounding areas, local events, youth development programs, and by promoting sports.

Community cleanup activities

Contributing to youth development

Contributions to society

Community cleanup activities
Scaled down activities due to COVID-19
TOCALO scaled down its local cleanup activities in fiscal 2021 as a measure
to prevent the spread of Covid-19. In addition, we implemented a policy ofwearing masks and avoiding close contact during the cleanups. As always,
the cleanups were conducted while paying close attention to traffic andwearing high-visibility orange bibs.
Prior to the pandemic, the Miyagi Technical Service Center picked up
garbage in the local industrial park and along local roads, weeded around

Cleanup activities near the Tokyo Plant

the plant, and adjusted signs for safe driving in the industrial park. The

Gyoda Workshop

activities were held four times a year during the snow-free period from April
to November. The Thermal Spraying Technology R&D Laboratories regularly
cleaned the green area of neighboring Akashi Kaihin Park. The park officekindly gave us permission to clean inside the park, and the park office evenposted our cleanup activities on its website.
Our sites also carry out activities according to local needs. The Kobe Plant
making a major effort to keep nearby parks clean from large amounts ofgarbage that are thought to be left behind by people using fireworks andhaving barbecues. The Akashi Plant conducts monthly cleaning activities at
its local industrial parks. Other companies near the Kobe Plant have told usthat they are following our example with their own cleanup activities, which
is a great encouragement for us.

69

Cleanup activities near the Nagoya Plant

Contributing to youth development
Supporting the Akashi-jyoki Gakudo Soft Baseball Tournament
After a two-year hiatus due to the Covid-19 pandemic, the Akashi-jyoki Gakudo Soft Baseball Tournament returned infiscal 2022 thanks to the prevalence of vaccinations and other measures to prevent the infection from spreading.
TOCALO has been a special sponsor of the tournament since its launch in fiscal 2012.

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

70

Accepting internships
TOCALO has been hosting interns annually since fiscal 2007. For safety reasons during the pandemic, we did not
accept interns in fiscal 2021.
We usually accept one or two interns from Helmut Schmidt University in Germany each year. The interns spend overa month in summer at the Thermal Spraying Technology R&D Laboratories where they experience our businessactivities 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 work and private time with our employees.
We are looking forward to resuming the intern program.

Overseas interns gaining hands-on experience (fiscal 2019)71

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 activities in past years.

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 basedon its concept of “a city where anyone can ask for help when they need it.”

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 promote cultural and artistic
activities in our hometown of Kobe.

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

72

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 andnight 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 HealthCare

Tohoku University

Foundation)

August 2020 University of Hyogo Global Business Course TOCALO Scholarship
Under our agreement with the University of Hyogo to support the “development of human resources to to play anactive 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.

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 andnight 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 in pandemic response
activities
Miyako Medical Association (Yukuhashi, Fukuoka Prefecture): Donation of 6,000 masks73

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 Factoryof 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 within commuting 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

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 tovictims 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 thereconstruction 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 was under construction, from damage causedby the Great East Japan Earthquake.

74

Sustainability | Together with society

For shareholders and investors

We promote IR activities from the perspective of our shareholders and investors, with a basis of prompt and accurate
information disclosure.

Information disclosure policy

Main IR activities

Dividend policy

Information disclosure policy
We strive to disclose information in an easy-to-understand manner throughshareholder newsletters and our website.
We strive to earn the trust of our shareholders and investors by disclosing corporate information, such as
management policies and financial data promptly, accurately, and fairly from the perspective of these shareholders
and investors.
In disclosing information, we comply with statutory disclosure standards and disclosure rules set forth by the stock
exchanges.

IR associated tools
Securities reports and quarterly reports
Financial Results (Quarterly)
Newsletter for Shareholders

The latest Newsletter for Shareholders can be viewed on this page

（Japannese only）.
Fact Book

Company briefing materials for investors
IR information on our website
Investor relations information can be found in detail on this page.

75

Main IR activities
Strong focus on meetings with individual investors
We actively engage in communications withstakeholders through corporate briefings for investors
and meetings with analysts and domestic and foreign
institutional investors to provide opportunities for direct

Nikkei IR anddialogues between shareholders, investors, and top

Investor Fair
President Mifune speaking at an

management.

information session for investors (liveWe also regularly participate in asset management

broadcast)

expos to improve our name recognition, broaden our
corporate recognition, and expand our base of investors
and people interested in our company.
We hold company information sessions for investors
twice a year in Tokyo. In response to requests frominvestors, in November 2021 we added a hybrid meeting
format for investors to participate either in-person or
online. We are also looking forward to appearing inperson at the upcoming Nikkei IR and Investor Fair thatwill be held at the Tokyo Big Sight for the first time inthree years in August 2022. A virtual presentation booth
will also be available so investors can visit us online.
TOCALO also maintains a corporate website withaccess to the latest investor relations information. The
website provides important disclosure information andhighlights our business activities and content, including
information on the TOCALO Group’s strengths and oursurface coating technology’s contribution to protecting
the environment.

76

announcement

Dividend policy
Our dividend was JPY 45 per share in fiscal 2021.
We consider the return of profits to shareholders to be an important management policy, and strive to continuously
pay stable dividends that are based on the outcomes of our business performance. At the same time, we actively
strive to enhance shareholder returns.
In fiscal 2021, we paid a dividend of 45 yen per share (including an interim dividend of 20 yen). As a result, thedividend payout ratio (consolidated) was 39.6%. Retained earnings will be allocated to R&D and capital investment,
which are indispensable for business growth and strengthening corporate structure, in order to enhance our mediumto long-term share value through business development and expansion.

77

Sustainability | Together with society

Business continuity activities

Risk management

Information security policy

Risk management
Comprehensive measures for disasters and other events
Our risk management system is based on the Compliance Committee's cross-sectional oversight of the status of risk
management and examination of company-wide measures. A Business Continuity Plan was created on April 1, 2010
and is updated annually.
Each department creates rules and guidelines and publishes manuals to raise awareness of its relevant risks related
to compliance, responses to antisocial forces, the environment, disasters, quality, information security, credit
management, investment & financing, and export management. When an unexpected situation occurs, an Emergency
Management Headquarters is immediately established to implement countermeasures in accordance with ourEmergency Management Protocol.
In addition to the above, the Board of Directors promptly appoints directors to be responsible for responding to risks
that have newly arisen and establishes systems for responding appropriately.
We also conduct annual disaster prevention drills in preparation for emergencies. Our main sites conduct fire drills
and large-scale disaster-response drills envisioning various situations, such as an earthquake or tsunami. Our
disaster preparation also includes stockpiles of emergency supplies at all sites.

78

Information security policy
We are a manufacturer specializing in surface modification coatings that is both a solutions provider company
responding promptly and suitably to customer needs and an R&D-driven company constantly developing anddelivering high-quality, high-performance coatings. Ensuring information security is therefore of utmost importance,
and we accordingly implement the following measures:
1. Maintain management rules regarding information security
2. Provide information security training to officers and employees
3. Conduct safety management for contractors handling confidential information
4. Confirm compliance status through self-monitoring and internal audits
5. Regularly review the information security management system

79

Sustainability

Countermeasures to prevent the spread of COVID19

Countermeasures to prevent the spread of COVID-19—Safety for employees and customers—

The COVID-19 pandemic has affected Japan and the world and has transformed our lives.
TOCALO is implementing measures to prevent the spread of the disease with an emphasis on the following
concepts.
Prioritizing the safety of employees and their families, customers, and business partners.
Ensuring thorough risk management for business continuity.
In February 2020, in accordance with the basic policies announced by the government, our Company began
measures to prevent infections, such as avoiding the three Cs (closed spaces, crowded places, and close-contact
settings) and wearing masks, while maintaining the operations of our plants. On March 1, we established the COVID19 Countermeasure Headquarters headed by our President, and then implemented measures related to commuting
to work, sales activities, and internal operations based on “not getting COVID-19,” “not passing on COVID-19,” and“not bringing in COVID-19.” To continue our business and protect the health of employees, we have been revisingthese measures according to the situation. The measures remain in effect as of August 2022.
During the COVID-19 crisis, we have been doing our utmost to work closely with our customers and fulfill theirrequests while paying abundant attention to safety. We are continuing our ongoing earnest efforts to contribute tosociety through our surface modification technologies.

80Specific countermeasures
TOCALO initiatives (January 2020 to end of August 2022)(Scope of report: TOCALO domestic facilities)

January 2020 to March 2020 Confirmation of COVID-19 infection and prompt launch of measures toprevent spread of infections in Japan

January

1/16 First confirmation of infection in Japan

Donation of masks to subsidiaries in China
Checking of employees' temperatures before work every day

February

Promotion of staggered work hours
Voluntarily refraining from going on business trips
Promotion of web conferencing
Guidance on wearing masks

3/9 Expert Meeting calls for “avoiding 3Cs”
Establishment of COVID-19 Response Headquarters
Refraining from visits as much as possible

March

Formulation of Work Attendance Standards as COVID-19
countermeasure
Promoting avoidance of 3Cs at dining halls
Allowing driving to work to avoid public transportation

81April 2020 to May 2020 Issuance of state of emergency declaration, enhancement of measures

4/7 Issuance of state of emergency declaration in seven prefectures
4/16 Expansion of state of emergency declaration to all of Japan, with
13 prefectures as Prefectures under Specific Cautions
April

Telework Promotion
Distribution of 50 masks per employee, request for thorough wearingof masks
Training of new employees shifted to online training

5/27 Lifting of state of emergency declaration
May

Resumption of customer visits (with prior approval from customers
required)June 2020 Responding to “new normal” and flexible shifting of measures

6/19 Government announcement of phased easing
In response to the easing of measures by the government, ourJunemeasures were reviewed (wearing of masks, telework, staggered
work hours, business trips, commuting by car, etc.).
Donations were made to seven domestic medical institutions.

82

July 2020 to December 2020 Start and end of Go To Travel

7/22 Start of Go To Travel campaign (excluding Tokyo)
July

Strengthening of measures accompanying spread of infections(regarding wearing of masks, business trips, etc.)

Having company partly cover expenses for PCR tests and antibody

September

tests following business trips and construction if requested(including family members)

12/15 Decision for nationwide suspension of Go To Travel
Recommending commuting by car in order to avoid public

Decembertransportation
Discouraging company visits by guests
Online implementation of ISO 14001 internal audit regarding someofficesJanuary 2021 to March 2021 Second state of emergency declaration and start of vaccinations

January

1/8 Issuance of state of emergency declaration in four prefectures

February

2/17 Start of COVID-19 vaccinations in Japan

3/21 Lifting of state of emergency declaration
March

Allowing of business trips, including outside of prefecture, as
necessary
Allowing of visits by guests

83April 2021 to June 2021 Third state of emergency declaration, strengthening of measures

4/5 Application of semi-state of emergency measures in threeprefectures
4/25 Issuance of state of emergency declaration in four prefectures
Strengthening measures (wearing of masks, etc.)

April

Installing disinfection devices and CO2 measurement devices inclosed spaces whenever possible
Recommending telework, staggered work hours, commuting by car,etc.
Voluntarily refraining from going on business trips
Discouraging company visits by guests

Permission for taking of compensated half holiday or compensatedMayholiday on day of vaccination (and the next day onward in the case offever)

6/20 Lifting of state of emergency declaration in all prefectures except
Okinawa
June

Establishment of period of isolation measures following returns toJapan from overseas business trips

July 2021 — Fourth state of emergency declaration and holding of Tokyo Olympics & Paralympics

July

7/12 Issuance of state of emergency declaration in Tokyo
7/21 Start of Tokyo Olympics

8/2 Issuance of state of emergency declaration in four prefectures,
Augustapplication of semi-state of emergency measures in five prefectures
8/24 Start of Tokyo Paralympics

84

January 2022 — Coronavirus Omicron variant spreads

January

1/18 Internal countermeasures for the Omicron variant reviewed andrefortified

3/21 Priority prevention measures discontinued, general coronavirus
Marchcountermeasures maintained
Measures ongoing

Work style
Staggered work hours
We implemented this to avoid the 3Cs during commuting. It also helped to reduce the density of locker rooms anddining halls.
Web conferencing
We actively implemented web conferences in order to avoid the 3Cs. With this, we can also interact with people faraway immediately and see their faces. This led to more efficient business operations.
Telework
We introduced telework actively to divisions/departments capable of such a workstyle. We were able to participate in
web conferences from home as well and were able to use time effectively.
Driving to work
Although driving to work was not permitted except for some business locations, it was temporarily allowed as acountermeasure for COVID-19.

85

Daily operations

Temperature measurement anddisinfection
Alcohol disinfectant bottles were set
out in various locations to encouragefrequent disinfection. Employee andWearing masks

Cafeteria

We have distributed masks to all

We removed seats from one side of

employees, and have decided thattables and prohibited face-to-facemasks should be worn during work

seating during meals. At some sites,at all times except in the following

we divided employees into two

visitor temperatures were taken, andsituations: (i) when walking alonegroups and staggered lunch times. In

safety measures implemented.

during commuting, (ii) when alone inaddition, CO2 concentration meters

an isolated room, and (iii) when

were installed to monitor air

eating, smoking, and taking breaks.

circulation.

Online management of daily
temperatures and concerns were
begun to provide timely daily
assessment of the health status of

We have implemented measures toensure that a distance of at least two

employees and their families. The

meters is maintained from thesystem enabled immediate

nearest person, and this has included

measures to be taken to prevent themaking marks on the ground for

infection from spreading.

standing positions at locations
where masks are removed.

86

Business sites

Use of conference rooms

Desk layout

3C countermeasures among
workers

To avoid the 3Cs, large meetings

We rearranged desks to avoid face-were held online and seats wereto-face seating and create space inadequately spaced and partitions set

between them. Between the desks,

up in conference rooms. Desks wereshields were installed to prevent

there are also cases in which people

moved to make use of unused

spread of droplets.

work at a close distance. In such

more distance between workers, butcase, 3C avoidance measures wereconference rooms. CO2
concentration meters were installed

Manufacturing sites have relatively

Note: The shield is marked with a dottedline in the photo.

in all rooms for regular monitoring of

taken with vinyl sheets, etc., andcareful consideration was given to
the safety of workers and products.

air circulation.

Note: The photograph has been partially edited out of consideration for confidentiality.

87

Sustainability

GRI Standards reference table

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

： General Disclosures
300： Environmental
102

103

400

： Management Approach： Social

200： Ecomonic： General Disclosures

102

Organizational profile
NumberTitle of disclosure

Corresponding page

102-1

Name of the organization

About us > Company data

102-2

Activities, brands, products, and services

Technology

102-3

Location of headquarters

102-4

Location of operations

102-5

Ownership and legal form

About us > Company data

102-6

Markets served

About us > Company data

102-7

Scale of the organization

About us > Company data

About us > Location of plants andoffices

About us > Location of plants andoffices88Number

Title of disclosure

Corresponding page

About us > Company data
102-8

Information on employees and other workers

Sustainability > Together withsociety: Together with our
employees

102-9

Supply chain

About us > Company data

chain

－

102-11

Precautionary Principle or approach－102-12External initiatives－

102-13

Membership of associations－

102-10Significant changes to the organization and its supply

Strategy
NumberTitle of disclosure

Corresponding page

About us > Greetings

Investor relations > Management102-14

Statement from senior decision-makerpolicy > Message from the
President

Sustainability > Message from the
President

Investor relations > Focus issues

102-15Key impacts, risks, and opportunities
Investor relations > Business risks

89

Ethics and integrity
Number102-16

Title of disclosure

Corresponding page

Values, principles, standards, and norms of behavior

Investor relations > Management
policy > Management policy

Investor relations > Management
policy > Compliance102-17

Mechanisms for advice and concerns about ethics
Investor relations > Management
policy > Corporate governance

Governance
NumberTitle of disclosure102-18Governance structure102-19Delegating authority

102-20102-21

102-22102-23102-24102-25

Corresponding page

Investor relations > Management
policy > Corporate governance－

Executive-level responsibility for economic,

Investor relations > Management

environmental, and social topics

policy > Corporate governanceConsulting stakeholders on economic, environmental,
and social topics－

Composition of the highest governance body and its

Investor relations > Management

committees

policy > Corporate governance

Investor relations > Management

Chair of the highest governance body

policy > Corporate governanceNominating and selecting the highest governance

Investor relations > Managementbody

policy > Corporate governance

Investor relations > Management

Conflicts of interest

policy > Corporate governance90

Number102-26102-27102-28

Title of disclosure

Corresponding page

Role of highest governance body in setting purpose,

Investor relations > Management

values, and strategy

policy > Corporate governanceCollective knowledge of highest governance body

Investor relations > Management
policy > Corporate governanceEvaluating the highest governance body's

Investor relations > Management

performancepolicy > Corporate governanceand social impacts－

102-30Effectiveness of risk management processes－

102-31

Review of economic, environmental, and social topics－

Highest governance body's role in sustainability
reporting－102-33

Communicating critical concerns－

102-34Nature and total number of critical concerns－

102-35

Remuneration policies

102-36

Process for determining remuneration

102-37

Stakeholders' involvement in remuneration－

102-38Annual total compensation ratio－

Percentage increase in annual total compensation－

102-29102-32102-39Identifying and managing economic, environmental,

Investor relations > Management
policy > Corporate governance

ratio

91

Investor relations > Management
policy > Corporate governanceStakeholder engagement
NumberTitle of disclosure

Corresponding page102-40

List of stakeholder groups－

102-41

Collective bargaining agreements－

102-42

Identifying and selecting stakeholders－

102-43

Approach to stakeholder engagement－102-44

Key topics and concerns raised－

Reporting practice
NumberTitle of disclosure

Corresponding pagestatements－

102-46

Defining report content and topic Boundaries－

102-47

List of material topics

102-45

Entities included in the consolidated financial

Sustainability > Long-term visionand materiality

Sustainability > For theenvironment

102-48：Material balance

Restatements of information
Sustainability > For theenvironment：Measures to reduce

environmental impact

102-49Changes in reporting

102-50

Reporting period－
Sustainability (Editorial Policy)

92

Number

Title of disclosure

Corresponding page102-51

Date of most recent report－102-52

Reporting cycle－

102-53

Contact point for questions regarding the report－102-54Claims of reporting in accordance with the GRI
Standards

102-55

GRI content index

102-56External assurance

GRI Standards reference table

GRI Standards reference table－： Management Approach

103

Number103-1

Title of disclosure

Corresponding page

Explanation of the material topic and its Boundary

Sustainability > Long-term visionand materiality

Sustainability > For the

103-2

The management approach and its components

environment：Environmental

management

103-3

Evaluation of the management approach93－

： 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 > For theenvironment：Response to the

TCFD Recommendations

201-3

201-4

plans

－

Financial assistance received from government－

Defined benefit plan obligations and other retirement

Market 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 the local
community

94－－

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－

policies and procedures

Confirmed incidents of corruption and actions taken

Investor relations > Management
policy > Compliance

Anti-competitive Behavior
Number

206-1

Title of disclosure

Corresponding page

Legal actions for anti-competitive behavior, anti-trust,and monopoly practices95

No violation (FY2021)

Tax
NumberTitle of disclosure

Corresponding page207-1

Approach to tax

－

207-2

Tax governance, control, and risk management－

Stakeholder engagement and management ofconcerns related to tax－

Country-by-country reporting

－

207-3

207-4

：

300 Environmental
Materials
NumberTitle of disclosure

Corresponding page

Sustainability > For theenvironment：Material balance

301-1

Materials used by weight or volume301-2

Recycled input materials used

－

301-3

Reclaimed products and their packaging materials－

96Energy
NumberTitle of disclosure

Corresponding page

Sustainability > For the
302-1

Energy consumption within the organization

environment：Measures to reduce

environmental impact

302-2

Energy consumption outside of the organization

－

302-3

Energy intensity－
Sustainability > For the302-4

environment

Reduction of energy consumption：Measures to reduce

environmental impact

302-5

－

Reductions 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 dischargerelated impacts－
Sustainability > For the303-3

environment

Water withdrawal：Material balance

Sustainability > For theenvironment

303-4：Material balance

Water discharge
Sustainability > For theenvironment：Measures to reduce

environmental impact

97

Number

Title of disclosure

Corresponding page

Sustainability > For the303-5

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

304-4

services on biodiversity－

Habitats protected or restored－

IUCN Red List species and national conservation list
species with habitats in areas affected by operations－

Title of disclosure

Corresponding page

Significant impacts of activities, products andEmissions
NumberSustainability > For theenvironment：Measures to reduce

environmental impact
305-1

Direct (Scope 1) GHG emissions
Sustainability > For theenvironment：Response to the

TCFD Recommendations

305-2

Energy indirect (Scope 2) GHG emissions

Sustainability > For theenvironment：Measures to reduce

environmental impact

98

Number

Title of disclosure

Corresponding page

Sustainability > For the：Response to theenvironment

TCFD Recommendations

305-3

－

Other indirect (Scope 3) GHG emissions

Sustainability > For the305-4

environment

GHG emissions intensity：Measures to reduce

environmental impact

Sustainability > For the

305-5

environment

Reduction of GHG emissions：Measures to reduce

environmental impact

305-6

305-7

－

Emissions of ozone-depleting substances (ODS)

Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions

Sustainability > For theenvironment：Measures to reduce

environmental impact

Waste
Number

306-1

306-2

Title of disclosure

Corresponding page

Waste generation and significant waste-related
impacts

Sustainability > For theenvironment：Measures to reduce

environmental impact－

Management of significant waste-related impacts

Sustainability > For the306-3

environment

Waste generated：Measures to reduce

environmental impact

Sustainability > For the306-4

environment

Waste diverted from disposal

99：Material balanceNumber

Title of disclosure

Corresponding page

Sustainability > For the306-5

environment

Waste directed to disposal：Measures to reduce

environmental impact

Environmental Compliance
Number

307-1

Title of disclosure

Corresponding pageNon-compliance with environmental laws andregulations

Sustainability > For theenvironment：Environmental

management

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

100

－
－

： Social

400

Employment
NumberTitle of disclosure

Corresponding page

Sustainability > Together with
401-1

New employee hires and employee turnoversociety: Together with our
employees

401-2

－

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

Sustainability > Together with

401-3

society: Together with ourParental leave

employees

Labor/Management Relations
Number402-1

Title of disclosure

Corresponding page－

Minimum notice periods regarding operationalchangesOccupational Health and Safety
NumberTitle of disclosure

Corresponding page

Sustainability > Together with
403-1

Occupational health and safety management systemsociety: Together with our
employees

403-2

Hazard identification, risk assessment, and incident
investigation

101－

Number

Title of disclosure

Corresponding page

Sustainability > Together with403-3

society: Together with our

Occupational health services

employees

403-4

Worker participation, consultation, andcommunication on occupational health and safety

Sustainability > Together withsociety: Together with our
employees

Sustainability > Together with

403-5

Worker training on occupational health and safety

society: Together with our
employees

Sustainability > Together with403-6

society: Together with our

Promotion of worker healthemployees

403-7

403-8

Prevention and mitigation of occupational health andSustainability > Together withsafety impacts directly linked by businesssociety: Together with ourrelationships

employees

Workers covered by an occupational health and safety
management system

Sustainability > Together withsociety: Together with our
employees

403-9

Work-related injuries－

403-10Work-related ill health－102

Training and Education
Number

404-1

404-2

404-3

Title of disclosure

Corresponding page－

Average hours of training per year per employee

Programs for upgrading employee skills and transition
assistance programs

Sustainability > Together withsociety: Together with our
employees－

Percentage of employees receiving regularperformance and career development reviews

Diversity and Equal Opportunity
NumberTitle of disclosure

Corresponding page

Sustainability > Together with
405-1

Diversity of governance bodies and employees

society: Together with our
employees

405-2

－

Ratio of basic salary and remuneration of women tomen

Non-discrimination
Number406-1

Title of disclosure

Corresponding page

Incidents of discrimination and corrective actions
taken

Sustainability > Together withsociety: Together with our
employees

103

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－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

104

Rights of Indigenous Peoples
Number411-1

Title of disclosure

Corresponding page

Incidents of violations involving rights of indigenous
peoples

No violation (FY2021)

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 orprocedures

Sustainability > Together withsociety: Together with our
employees

Significant investment agreements and contracts that
412-3

－

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, impact
assessments, and development programs

Operations with significant actual and potential
negative impacts on local communities

105

Sustainability > Together withsociety: Together with 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 and－actions taken

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

106－
No violation (FY2021)

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 product andservice information and labeling

Incidents of non-compliance concerning marketing
communications

No violation (FY2021)

No violation (FY2021)

Customer Privacy
Number418-1

Title of disclosure

Corresponding page

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

No violation (FY2021)

Socioeconomic Compliance
Number419-1

Title of disclosure

Corresponding pageNon-compliance with laws and regulations in thesocial and economic area

107

No violation (FY2021)