Fujibo Holdings, Inc.

SUSTAINABILITYREPORTSUSTAINABILITYREPORT

2023

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATACONTENTS
02 CORPORATE OVERVIEW

17		

Corporate Philosophy, Fujibo Vision				Charter of Conduct		Priority Themes of Environmental Activities,
Addressing the TCFD Recommendations andCompleting the CDP Questionnaire		Corporate Governance System,
Board of Directors, Audit & Supervisory Board,
Committees, etc.

		Overview of the Environmental Loads ofBusiness Activities

		Status of Independent Officers,
Evaluation of Effectiveness of Board of Directors,
Messages from Outside Director and Outside Auditor		About Fujibo Holdings,
Key Management Indicators
		Business Description

06 TOP MESSAGE
07 THE FUJIBO GROUP SUSTAINABILITY		

Basic Policy		Sustainability Management System

		

ESG Basic Policy

ENVIRONMENT
Basic Concept, Environmental Policy		Efforts to Reduce Greenhouse Gas Emissions
		Reduction of Environmental Loads
on Water Resources		Reduction and Recycling of Industrial Waste,
Reduction of Environmental Loads ofChemical Substances		Conservation of Biodiversity

		Roadmap to the “Desirable Future Position”
of Fujibo Group

25 SOCIAL		Double Materiality in Enhancing Sustainability
Management		

Basic Concept		Diversity & Inclusion

36 GOVERNANCE		

Basic Concept		Compensation for Officers, Policy and Procedures
for Nominating Candidates for Directors
		

Corporate Officer Skill Matrix

		COMPLIANCE		Basic Approach to Compliance,
Compliance Management
		Initiatives for Raising Compliance Awareness,
Compliance Education, Internal Reporting System,
Response to Compliance Violations,Monitoring the Enhancement of Compliance Awareness		

Anti-Bribery Policy, Tax Compliance		Materiality: Initiatives for Important Themes		

Respect for Human Rights		Value Creation Process		

Human Resource Development

		
RISK MANAGEMENT		

Communications with Stakeholders

		

Health and Productivity Management

		Basic Concept, Risk Management System

		What is the FUKU-NO-WA Project?

		Safety and Health of Employees		Supply Chain Management

		Risk Determination Process, How to Dealwith Material Risks, Business Continuity Plan		

Quality Assurance		Contributing to Local Communities		Guidelines and Initiatives on Intellectual Property,
Compliance with Anti-Monopoly Act,
Information Security47■ SCOPE OF REPORTThe Fujibo Group (Fujibo Holdings, Inc. and its domestic and overseas Group companies)■ REPORTING PERIOD
Mainly for FY 2022 but including certain periods before and after the fiscal year
■ DATE OF ISSUANCE
September 2023

ESG DATA		

Governance Data, Social Data		

Environmental Data

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATACORPORATEOVERVIEW

Corporate Philosophy
We will always support leading-edge industries
by providing new technologies and products demanded by the times,
capitalizing on our technology and experience cultivated overmore than a century of Fujibo’s history.
In this way, we are committed to realizing a more prosperous
and sustainable future for people, society, and the global environment.
The Fujibo Group abides by its corporate philosophy “we will always support leading-edge
industries by providing new technologies and products demanded by the times, and arecommitted to realizing a more prosperous and sustainable future for the people, society
and the global environment.” Our corporate slogan is to become “a high value-added
company leading the future with organic materials technology.” We have always valued thespirit of “The Focus on Innovation,” which is to challenge the future and innovate ourselvesby leveraging the technologies we have cultivated for more than 100 years since ourestablishment. In order to achieve a sustainable future based on this “innovative spirit,” wewill incorporate the constantly changing demands of society and the market into ourmanagement strategies by implementing our three visions, and aim to achieve thesedemands as our medium- and long-term goals.
In addition, we will strive to create a prosperous and sustainable future together with our
stakeholders, including shareholders, employees, business partners and local communities,
by establishing a robust governance that emphasizes global environmental stewardship.

Fujibo Vision
Making a Breakthrough and Going ahead of the Times— Guidelines for Being a Manufacturer

We will contribute to human life and industrial development by constantly overcoming
challenges to make breakthroughs, such as strengthening the competitiveness of our corebusinesses and creating new businesses in growth markets.

Management with Integrity and Sustainable Growth— Guidelines for Corporate Management

Recognizing the importance of enhancement in our corporate governance and risk
management, we will pursue sincere corporate management that is trusted by shareholders
and other stakeholders in accordance with our corporate philosophy.

Respecting the Individual and Fostering Harmony— Guidelines for the Working Environment

We provide each employee with fair opportunities and fair evaluations, and create anenvironment where they can work together to improve through friendly competition.
By respecting the individual, we will create a workplace that fosters competitivenessand teamwork.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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ESG DATA

In order to realize our corporate philosophy, the “Fujibo Group Charter of Conduct,” which recognizes the importance of corporate social responsibility, wasestablished as a concrete guideline not only for complying with laws and regulations, but also acting in a fair and honest manner with social common sense.

Charter of Conduct
1. Contribution to sustainable economic growth and social challenges		The Group will develop socially useful and safe products and services to meetcustomers’ expectations, and strive for sustainable economic growth andsolutions to social challenges through innovation and business activities.
2. Fair and sound business activities		The Group will engage in fair and free competition, appropriate transactions andresponsible procurement, and will not provide nor receive improper benefits. The
Group will also maintain a sound relationship with politicians and governments.
3. Fair information disclosure and constructive dialogue with stakeholders
		The Group will proactively and effectively disclose corporate information in atimely and fair manner and engage in constructive dialogue with various
stakeholders of the Group to enhance our corporate value.
4. Environmental initiatives
		Recognizing that efforts to address environmental issues is a common challenge
for all humankind, the Group will work to reduce environmental loads, achieve a
recycling-based society, and reduce environmental risk in all our businessactivities to contribute to the realization of a sustainable society.
5. Respect for human rights		The Group will support universal initiatives related to human rights from aninternational perspective, and carry out management that respects human rights.

6. Customer trust		To obtain customer trust, we will provide appropriate information on our products
and services in accordance with laws and regulations, and will be fully
accountable for quality assurance.
7. Contribution to social engagement and development
		As a good corporate citizen, the Group will proactively participate in society andcontribute to its development.
8. Work style reforms and enhancement of the work environment		The Group will promote a work style that enhances our employees’ capabilities andrespects their diversity, personality and individuality. In addition, the Group will create
a comfortable work environment that takes health and safety into consideration.
9. Thorough crisis management		The Group will thoroughly implement organizational crisis management in
preparation for natural disasters, pandemics, terrorism, cyberattacks and otherevents that threaten civil life and corporate activities.
10. The role of top management		The top management will establish an effective governance system for the Groupin order to implement this Charter. The top management will also encourage our
supply chain to work in accordance with the spirit of this Charter.
			 In the event that a violation of this Charter of Conduct occurs that undermines thetrust of society, the top management will take the initiative to resolve the problem,
investigate its cause, prevent a recurrence, and will fulfill our responsibilities.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITY

About Fujibo Holdings

CATEGORY

Fujibo Holdings, Inc.

Address
Tokyo Headquarters
		 1-18-12 Nihonbashi Ningyocho, Chuo-ku, Tokyo 103-0013, Japan
Osaka Branch		Oak Sakaisuji Honmachi Building,		 1-8-12 Honmachi, Chuo-ku, Osaka 541-0053, Japan
Establishment

March 24, 1896

Capital

6,673,832,000 yen

Representative

Masahide Inoue, Representative Director and President

Number of Employees

SOCIAL

GOVERNANCE

ESG DATAAs of September 30, 2023

Corporate Facts
Company Name

ENVIRONMENTMAJOR COMPANY POSITIONING

MAJOR PRODUCTMANUFACTURING

SALES AND SERVICING
Fujibo Ehime Co., Ltd.

Polishing
Pad
Business

Polishing Pad for
Ultra-high Precision Work,
Nonwoven Fabric andArtificial Leather

Fujibo Ehime Co., Ltd.

Industrial
Chemicals
Business

Industrial Chemicals

Yanai Chemical Industry Co., Ltd.

Yanai Chemical Industry Co., Ltd.

Spun Yarn,
Knitted Material andFunctional Fibers, etc.

Fujibo Textile, Inc.

Fujibo Textile, Inc.

Thai Fujibo Textile Co., Ltd.

Thai Fujibo Textile Co., Ltd.

Secondary Products
such as Asamerry and
B.V.D.

Fujibo Textile, Inc.

Fujibo Textile, Inc.

Fujibo Apparel Corporation

Fujibo Apparel Corporation

Jintana Fujibo Corporation

Fujibo Shanghai Co., Ltd.

—

Fujichemi Co., Ltd.

Fujichemi Co., Ltd.

Fujichemi Co., Ltd.

Tokyo Molding Co., Ltd.

Tokyo Molding Co., Ltd.

IPM Co., Ltd.

IPM Co., Ltd.

Lifestyle
ApparelBusiness

1,273 (Consolidated, as of March 31, 2023)
Other
Businesses

Vehicle and Automotive
Components, etc.
Chemical Products

Taiwan Fujibo Precision Materials
Co., Ltd.

Fujichemi Co., Ltd.
Taiwan Fujibo Precision Materials
Co., Ltd.

Key Management Indicators
売上高
Net
Sales

営業利益
Operating Profit

経常利益
Ordinary Profit

EBITDAEBITDA(million yen)
（百万円）

(million yen)
（百万円）

(million yen)
（百万円）

(million yen)
（百万円）

50,00040,00038,70136,93235,916

37,66910,00010,00010,000

8,000

8,000

8,000

30,0006,000

20,0004,000

10,000

2,000

0

（年度）
(FY)

5,285

6,000

5,877
4,872

4,079

4,000

2020

2021

2022

(FY)
（年度）

6,045

6,000

2020

2021

2022

（年度）
(FY)

6,382

4,000
2,000
0

0

2019

7,997

7,811

5,041

4,329

2,000

0

2019

5,450

9,221

2019

2020

2021

2022

（年度）
(FY)

2019

2020

2021

2022

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

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ESG DATABusiness Description
Polishing Pad BusinessIndustrial Chemicals Business

Lifestyle Apparel Business

Other Businesses(Chemical Products Business)

Ultra-high Precision polishing pads
which are used for processing“semiconductors,” a key partin the digital society

One of the largest domestic contract manufacturers specializing
in industrial chemicals

Unique business developmentin apparel production
and sales

Manufacturing of molded items
for medical and precision fields
and metal molds

The “semiconductor,” a key part in the digital society,is a device essential to the creation of a sustainable
society as it is used in various fields, including
smartphones, tablets, 4K LCD TVs and hard disks forstorage devices. The business of Ultra-high Precision
polishing pads maintains a substantial share of the
global market for polishing for the fabrication of
most-advanced logic/memory semiconductor
devices and silicon wafers for semiconductor
substrates, and it supports the realization of asustainable society. Starting with the Nyugawa Plant
i n E h i m e P r e f e c t u r e, w e h a v e u n p a r a l l e l e d
production capacity with five bases in Japan andabroad, and with an organizational structure inwhich development, manufacturing and sales
departments work closely together to provide
products and services, the business will continue tocontribute to the realization of a sustainable society
as the core business of the Fujibo Group. At thesame time, the business will also serve as a driving
force for our own sustainable growth.

The Industrial Chemicals Business, among the top tierof businesses specializing in contract manufacturing
in Japan, possesses manufacturing technologies andknow-how in organic synthesis cultivated over many
years. The Industrial Chemicals Business is growing
significantly due to the high reputation from
customers for the high quality and high-mix, lowvolume manufacturing required for contract
manufacturing of organic synthesis intermediates,
such as electronic materials including 5G and EV
materials, functional chemicals, raw materials forpharmaceuticals that contribute to healthy andfulfilling lives. In addition to the Yanai Headquarters
Plant, we have further increased our production
capacity by expanding the Plant to establish a
production system to meet customer needs. Throughthe provision of high- performance chemical products
and technologies, we will improve customer
satisfaction and contribute to the realization of abetter and more sustainable society.

As one of the three elements of “clothing, food andhousing” that support our daily lives, the clothingbusiness plays the role of “clothing,” and we have
kept the craftsmanship of manufacturing technology
and commitment to quality that we cultivated as anancestor business, and have developed ourbusiness mainly in the downstream sector. The
B.V.D. brand, which internally produces from originalyarns, has established a highly transparent “supply
chain” emphasizing respect for human rights andenvironment conservation in the production
process. We will take the lead in social andenvironmentally-friendly activities and contribute to
the creation of social value. In addition, we havealso been focusing on the reuse and recycling ofclothing for a long time, and as the main sponsor of
the FUKU-NO-WA Project, we are supporting therealization of a sustainable society.

The Fujibo Group is engaged in the manufacturing ofmolded items for medical and precision fields andmetal molds as the fourth pillar. The injection molding
division, which has an established reputation for its
plastic molding technologies, is expanding its
business by focusing on the medical device field andprecision device field, in addition to its high-quality
molding technology. In the mold division, we havebeen building a system that will respond to a wide
range of needs in serving the automotive andprecision fields. To such ends, we made IPM Co., Ltd.,
which possesses substantial technological strengths
in the field of precision molds, part of the FujiboGroup on November 1, 2022, and have accordingly
been leveraging Group synergies encompassing
everything from small precision molds to medium andlarge molds.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

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ESG DATATop Message

Embracing Innovation andAchieving Disruptive Growth
Representative Director
and President
Fujibo Holdings, Inc.

Embracing Innovation in a Highly Uncertain Business Environment

Having set Henshin (Transformation) as its top management priority under the Medium-termManagement Plan “Zokyo 21-25” (Increase and Strengthen), the Company has been working
to achieve operating profit of ¥10 billion by FY2025. This entails improving profitability
through a shift to high profit businesses, strengthening and increasing earning power, andaiming to serve as the No. 1 player in a niche segment chosen by customers.
Currently, the world is exhibiting signs of economic recovery as a trajectory toward
containment of the COVID-19 pandemic ensues. However, the outlook remains uncertain
amid factors that include persisting inflation with resource and energy prices remaining athigh levels against a backdrop of deteriorating global affairs. In addition, the increasing
severity of climate change issues that include regular occurrence of heatwaves, droughts,
massive forest fires, and flooding due to torrential rains suggests the need to return tofundamentals in order to address these concerns. Moreover, companies are expected todisclose non-financial information that warrants the trust of all stakeholders particularly
given a scenario where disclosure of information related to sustainability (responding toclimate change, human capital, diversity, etc.) in annual securities reports has become
mandatory effective from the fiscal year ended March 31, 2023.
As such, whereas substantial uncertainty is bound to persist when it comes to the businessenvironment surrounding companies, Fujibo will strengthen its sustainability management
practices toward achieving objectives of its Medium-term Management Plan “Zokyo 21-25”(Increase and Strengthen), which will entail embracing innovation while closely monitoring
world affairs and economic trends.

Promoting Sustainability Management

As part of its sustainability promotion efforts, the Company actively engages in initiatives
that entail reducing its environmental loads and enhancing work-life balance in looking
toward addressing issues of the environment, society, and governance relevant to its
business processes. Our initiatives in FY2022 have primarily involved promoting efforts toaddress the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD), promoting health and productivity management taking into account employee

MASAHIDE INOUE

safety and well-being, establishing workplace environments that empower women, andpromoting support for balancing careers with childcare and nursing care.
First, we have taken steps on the environmental front to address the TCFD recommendations. We have calculated Scope 3 greenhouse gas emissions, thus enhancing the visualization of our supply chain emissions. We also engaged in initiatives to reduce greenhousegas emissions that have entailed seeking to reduce environmental loads through use of­renewable energy with Yanai Chemical Industry Co., Ltd.’s establishment of a new warehouse featuring a Net Zero Energy Building (Net ZEB) design.
Next on the social front, we have been promoting human capital management practices byfostering a culture that empowers a diverse range of human resources, premised on thenotion that innovation stems from where employees equipped with diverse traits fully
unleash their individual strengths. Having established our Health and Productivity
Management Declaration in September 2022, we have been promoting employee healthmanagement and were recognized under the large enterprise category of the 2023 CertifiedHealth and Productivity Management Outstanding Organizations Recognition Program in
March 2023. Meanwhile, we have been appointing women to management positions at ourplants including those of Fujibo Ehime Co., Ltd. under our efforts to facilitate careerdevelopment for encouraging involvement in management among our female employees.
We have also been implementing work style reforms by which we have been proceedingwith initiatives to elevate employee productivity and motivation by harnessing DX tools toreshape individual employee attitudes and approaches with respect how they do their jobs.
Finally on the corporate governance front, we stringently engage in risk management throughongoing compliance with laws and regulations, social norms, ethics, and internal regulations.
Going forward, we seek to maximize shareholder value by strengthening our internal control
functions to ensure reliability of our sustainability information, pursuing management efficiency
while also ensuring transparency and soundness of our sustainability information.
We will strengthen our sustainability management practices as we hold to our commitmentof maintaining harmony with our communities, society, and the global environment going
forward. In so doing, we will contribute to development of a sustainable recycling-basedsociety with the aim of serving as a company that gains the trust of its stakeholders.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATATHE FUJIBO GROUPSUSTAINABILITY

Basic Policy
The Fujibo Group implements “sustainability management” that incorporates sustainability
at the core of our business strategy.
The Group’s sustainability management is characterized by achieving sustainability
through a well-balanced implementation of “profit-making,” growth, profitability, social
contribution, and fair and transparent SDGs management founded on integrity.
A company must be financially profitable in order to pay dividends to its shareholders andachieve sustainable growth. In addition, focusing on being a public institution, it is importantto establish a strong relationship with stakeholders as a company that is more trusted by
the society under proper corporate governance. Our Group will continue to work toward
the sustainable enhancement of our corporate value.

The Fujibo Group’s Sustainability Management

Investors

ESG Filter

SDGs Management

Shareholder Returns“Profit-making,”
Growthand Profitability

Social Contribution
and Integrity

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITY

Sustainability Management System
At present, the world is facing many serious social challenges, including climate change,and society’s expectations of companies as a leader in solving these issues are
increasing. Against this backdrop, we established the ESG Committee in April 2021 topromote sustainability management across the entire Fujibo Group by addressing
important issues related to the SDGs, in line with the launch of our Medium-termManagement Plan “Zokyo 21-25.”
The ESG Committee is headed by the President and consists of three subcommittees: theEnvironment Subcommittee, the Social Subcommittee and the Governance Subcommittee.
The Committee will make recommendations to ensure that the Group responds
appropriately to sustainability issues and that its sustainability efforts lead to medium- tolong-term improvements in corporate value. In this system, each subcommittee addresses
various issues related to sustainability promotion, and then consults with the ESG
Committee, the Management Committee, or the Board of Directors depending on the levelof importance. Therefore, the Board of Directors makes final decisions on important policies
and initiatives for overall management and also controls and supervises the Management
Committee and the ESG Committee, and other relevant bodies.
Although the Polishing Pad Business, Industrial Chemicals Business, Lifestyle ApparelBusiness and Other Businesses have different requirements for sustainability, we willproactively tackle them from the perspective of risks and opportunities.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATAThe Fujibo Group’s Sustainability Management System
BOARD OF DIRECTORS
ReportManagement, supervision anddetermination of important matters

MANAGEMENT COMMITTEE
ReportJudgment and determinationof various measures

ESG COMMITTEE
ReportE SUBCOMMITTEE

Formulation of various measures andbring down to each subcommittee

S SUBCOMMITTEEG SUBCOMMITTEEFUJIBO HOLDINGS’ DIVISIONS AND ITS SUBSIDIARIES

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

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ESG DATAESG Basic Policy
The Group is committed to the realization of its corporate philosophy,“we are committed to realizing a more prosperous and sustainable future for people,
society, and the global environment,” through its business activities.

1 Environmental Policy

2 Social Policy

3 Governance Policy

In order to realize a sustainable global environment, theGroup will respond to climate change, consider
biodiversity, and promote a recycling-based society
through the effective use of resources and energy.
In addition, the Group will establish an environmental
management system to achieves the above goals andwill further strengthen our environmental conservation
initiatives in compliance with environmental laws andregulations.

The Group will work to realize a better society while
respecting diversity regardless of gender, age or
nationality, providing opportunities to demonstratecapabilities, and promoting the improvement of theworking environment, as well as actively connectingwith various stakeholders. The Group will also actively
engage in community contribution activities and play arole in helping to solve social challenges as a memberof the local community.

In accordance with the Fujibo Group Charter of Conduct,
the Group will further enhance managementtransparency and maintain its management oversightfunction to prevent accidents and fraud, and aim forsustainable growth. In addition, the Group will
strengthen its business risk management system,
including those of its Group companies, and further
promote BCP (Business Continuity Plan) against
disasters.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

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ESG DATA

Roadmap to the “Desirable Future Position” of Fujibo GroupThe Fujibo Group has formulated and implemented five medium-term management plans (“Henshin 06-10,” “Toppa 11-13,” “Maishin 14-16,”“Kasoku 17-20” and “Zokyo 21-25”) since 2006 to resolve management challenges of the time. At present, we are aiming to strengthen
our ability to generate profit through fair and transparent management based on growth, profitability, social contribution, and integrity,
which are the characteristics of the Group’s sustainability management, and once again aim to become “an outstanding No. 1 player in aniche segment” and an irreplaceable sustainable company for people, society, and the environment.

“Outstanding
No. 1 player
in a niche segment”

Further accelerate growth and increase earning power
toward 2025 to realize our desirable future position.

Polishing
Pad
Business

2006 ― 2010
Medium-termManagement Plan

Industrial
Chemicals
Business

2014 ― 20162011 ― 2013

Medium-termManagement Plan

Medium-termManagement Plan

Medium-termManagement Plan

“Zokyo”

2017 ― 2020
Medium-termManagement Plan

“Kasoku”

Sustainability“Maishin”“Toppa”

The Fujibo Group’s Sustainable
Management
Social Contribution and Integrity“Henshin”

FY 2006

Enhance our“ability togenerate profit”

2021 ― 2025

Other
Businesses
Lifestyle
ApparelBusiness

Desirable Future
Position

FY 2010

FY 2013

FY 2016

FY 2020

FY 2025

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYD ouble Materiality
in Enhancing Sustainability Management

Impactsof climate change
on companies

Environmental
and Social Materiality*2

Companies

ClimateImpacts of corporate
activities on climate arefinancial materiality.

Major stakeholders:investors, etc.

GOVERNANCE

ESG DATA

1. Sincere Efforts toward the Realization of a Sustainable Environment and Society	In order to maintain the sustainability of the global environment, we aim toestablish a stable and sustainable procurement and supply system by working
on the preservation of the natural environment and biodiversity and promoting
effective utilization of resources.

2. Adaptation to Climate Change	We will work to reduce the environmental loads of our business activities toachieve a decarbonized society and respond appropriately to the potential
impacts of climate change on companies that may arise in the future.

3. Co-creation of Value with Various Stakeholders

Double Materiality

Financial Materiality*1

SOCIAL

Five Materialities

In order to achieve a sustainable society, the Group has analyzed the magnitude of theeffects and the impact of our business activities on stakeholders, the economy, society andthe environment. At the Board of Directors meeting, we identified five materialities basedon the concept of “double materiality,” which integrates materiality from the investors’
perspective (financial materiality) and materiality from the stakeholders’ perspective(environmental and social materiality).
The concept of double materiality is defined in an update to the Non-Financial Reporting
Directive (NFRD) based on the Corporate Sustainability Reporting Directive (CSRD) issued
by the European Commission in April 2021, which provides a framework for future
disclosures.

Single Materiality

ENVIRONMENT

Impactsof corporate
activities
on climate

Companies	Through our business activities, we will emphasize dialogue with various
stakeholders and contribute to the sustainable growth and development of local
communities and other organizations.

4. Creation of an Environment that Accepts Diversity
and Maximizes Individual Capabilities
ClimateMajor stakeholders:consumers, clients, employees,
investors, etc.

The Concept of Double Materiality
Based on the Corporate Sustainability Reporting Directive (CSRD) issued by the European
Commission in April 2021, the Non-Financial Reporting Directive (NFRD) has been updated
to provide a framework for disclosures in the future.
*1	Financial Materiality / Events essential to understanding the financial developments and results and financial
conditions of a company*2	Environmental and Social Materiality / Impacts that corporate decision-making and business activities have on
the outside world	We will respect diversity regardless of gender, age, nationality, etc., and promote
the development of a work environment that will enable employees todemonstrate their abilities free from anxiety.

5. Enhancement of Corporate Governance and Thorough Complianceand Risk Management

	We aim to achieve sustainable growth by implementing high transparency in ourmanagement practices and maintaining a risk management system to preventthe occurrence of accidents and fraud.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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ESG DATA

Materiality: Initiatives for Important Themes
The Fujibo Group is promoting the following initiatives through our business activities in order to achieve a sustainable society together with all of our stakeholders:
Important ThemesSpecific Initiatives

Achievements in FY2022

Conservation of the natural environment and biodiversity· Conservation of water resources· Reduction of soot and smoke· Management of chemical substances based on the Pollutant
Release and Transfer Register (PRTR) Act· Reduction of marine plastic pollution and the promotionof eco-plastic products· Recycling of resources

Water resources input: 1,832 thousand m³ (Down by 226 thousand m³ year on year)
Water resources discharge: 1,372 thousand m³ (Down by 263 thousand m³ year on year)
Soot and smoke emissions: 40 tons (Up by 2 tons year on year)
Amount of PRTR substances treated: 7,812 tons (Down by 249 tons year on year)
Waste discharge: 47.9 thousand tons (Down by 0.2 tons year on year)
Participation in the FUKU-NO-WA Project and the promotion of reuse

Addressing the TCFD recommendations
Initiatives to reduce greenhouse gases· Reduction of greenhouse gas emissions· Conversion to renewable energy

Greenhouse gas emissions(Scope 1 + Scope 2): 62.9 thousand tons (Up by 2.7 thousand tons year on year)(Scope 3): 128.7 thousand tons (Up by +4.2 thousand tons year on year)• CO₂ reduction attributable to electricity derived from renewable energy at Fujioka
Factory: 163 tons
• Establishment of new warehouse with Net Zero Energy Building (Net ZEB)
design at Yanai Headquarters Plant
CO₂ reduction: 20 tons (5 months from November 2022 to March 2023)

Co-creation of Value
with Various Stakeholders

Dialogues with stakeholders· Contribution to solving social contribution issues throughbusiness activities· Timely and appropriate information disclosure and listening to thevoices of the capital market· Strengthening of partnerships and building of a better supply chain· Coexistence with local communities· Development and evaluation of human resources

Sales activities
Shareholders’ meetings and financial results briefing sessions
Quality assurance support
Cleanup activities
Career development training

Creation of an Environmentthat Accepts Diversity andMaximizes Individual Capabilities

Diverse organizations and respect for human rights· Response to work style reforms· Support for women’s career development· Strengthening of education and training systems and educational
programs· Promoting employee health maintenance and enhancement(promoting health and productivity management)

Response to the revised Child Care and Family Care Leave Act
Promotion of Robotic Process Automation (RPA) deployment
Expansion of language training
Provision of career development training for junior and middle-level employees
Recognition under 2023 Certified Health and Productivity Management Outstanding
Organizations Recognition Program (large enterprise category)
Implementation of smoking cessation program

Highly transparent management· Promotion of response to the Corporate Governance Code (CGC)· Strengthening of the Risk Management System

Effectiveness of Board of Directors• Increased diversity• 2 female outside directors, of whom 1 is a foreign national (ongoing)
Enhancement of cybersecurity• Established CSIRT framework to handle unforeseen incidents

Sincere Efforts toward theRealization of a Sustainable
Environment and Society

Adaptation to Climate Change

Enhancement of Corporate
Governance and ThoroughCompliance and Risk Management

Related to SDGsa

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Value Creation Process
In serving as the “No. 1 player in a niche segment chosen by customers,” the Fujibo Group creates economic and social value through providing high-value-added products.
External environment trends

Intensificationof global
environmental
issues

InputsBusiness model (Value Creation Process)Achievements in FY2022

Fujibo Vision

Financial capitalSound financial baseassets: ¥42.9 billion• Net• Capital adequacy ratio: 69.9%

Human capital
Diversity of human resources

umber of employees• N(consolidated):
1,273
of female managers: 8.6%
• RRatio
atio of non-Japanese in• management
positions: 10.6%
Accelerating
technologicalinnovationand digitaltransformation

Geopoliticalinstability— Guidelines for Being a Manufacturer

Management with Integrity
and Sustainable Growth— Guidelines for the Working Environment

Innovation cycle

3 locations overseas

Vision for 2025

No. 1 player
in a nichesegment chosen
by customers

Specialize and advanceinto high-growth,high-profit business areas

Current
position

Strengthen
and increase
earning
power“Kyo:” Strengthen
the value proposition
Adopt an “advanced contracting
business” style with focus
on providing solutions

Support

Reform operation processes by continuing and fortifying DX
Build an operational foundation to support a new business format

Production
Research andtechnology
development

Polishing
Pad

Shareholders Increase corporate value and return profits toshareholders

Henshin(Transformation)

Chemical
Products

Outcomes (value provided to society)Industrial
Chemicals

Lifestyle
ApparelManufactured capital

expenditure: ¥4.0 billion• CMapital• anufacturing9sites:
locations in Japan“Zo:” Increase revenue
opportunities

Respecting the Individualand Fostering Harmony³

Social capital
Diverse partnerships
Alliances with local
communities

Net sales: ¥60 billion
Operating profit: ¥10 billion
Operating income margin: 16.7%
ROE: 10% or more
ROIC: 10% or more

— Guidelines for Corporate Management

lectricity consumption:• E71,873
thousand kWhater resources input:• W1,832
thousand m• R&D expenses: ¥1.1 billion

Financial targets

Making a Breakthroughand Going ahead of the Times

Natural capitalIntellectual capital
Accumulated manufacturing
technologies

Output: Targets of the Medium-term Management Plan “Zokyo 21-25”

Sales

Customers rovide safe, secure and quality products; buildP
trust relationships; improve customer satisfaction

Clients

 ngage in fair and equitable transactions;Ebuild partnerships

Employees

 rovide a comfortable and rewarding workplace;Penhance systems and education to maximize
their capabilities

Local
communities nsure safe and secure plant operations;Econtribute to community development; build andmaintain trust relationships

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

Communications with Stakeholders
The Fujibo Group takes various opportunities to communicate with shareholders, investors and other stakeholders.
Through such communications, we will work together to create new corporate value.

Dialogues with Stakeholders

Shareholders
and investors

Roles of The Fujibo Group

Communication tools

Status of communications

Timely information disclosure such as operating results,
management policies and medium-term management plans

Financial results, reference materials for financial
results and video distributions

Shareholders’ meetings

Building trust relationships

Annual Securities Reports

Shareholder returns

Corporate governance reports

Financial results briefing videos

Completion of CDP (climate change) questionnaire

Customers

Clients

Employees

Financial results briefing sessions
Meetings with institutional investors

Providing safe, secure and quality products

Product brochures

Direct response by the person in charge

Building trust relationships

Quality Assurance Certificates

Quality assurance support

Improving customer satisfaction

Contact

Various exhibitions

TV commercials

AuditsCorporate website

Customer service officeSuzu Bra (Cool Bra) Community website

Joint research

Sustainability Procurement Guidelines

Purchase activities

Fair and equitable transactions

Opinion exchanging meetings
Quality support
Providing a comfortable and rewarding workplace

The Group’s internal newsletters

Labor-management council

Enhancing systems and education
to maximize their capabilities

Intranet

Various training

Internal Reporting Contact Office(corporate ethics hotline)

Dialogues with management
Interviews with junior and middle-level employees
Women’s conference

Ensuring safe and secure plant operations

Local
communities

Contributing to community development
Building and maintaining trust relationships

Corporate information (video and pamphlets)

Actively participating in local communities
Exchanging opinions and cooperatingwith local governments and neighboring companies
Information disclosure (website)
Recruitment campaigns (universities, etc.)

ESG DATA

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITY

What is the FUKU-NO-WA Project?
The Fujibo Group promotes SDGs management and is working on a Group-wide basis
toward achieving the SDGs as a means of contributing to society. As one such example,
we engage in efforts to address social challenges of resource recycling through the FUKUNO-WA Project clothing reuse activity.
It is an activity to reuse usable clothes donated bycompanies and individuals, sell them to domestic or foreign
specialized dealers or at the FUKU-NO-WA Marché, anddonate the sales proceeds to para-sport associations. This
project was hosted and managed by SANKEI SHIMBUN
CO., LTD. and selected as a “model business for sustainable
use of resources” by the Environmental Bureau of the Tokyo
Metropolitan Government in 2016 and 2017. The FujiboGroup agrees with the purpose of the activity and joins it as
an official partner.

Five SDGs We are Working on through the FUKU-NO-WA Project
The FUKU-NO-WA Project supports the principles of the United Nations Sustainable
Development Goals (SDGs) and aims to contribute to 5 goals out of 17 goals through thepromotion of reuse of clothes.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Quality Education
Unique classes and activities are given at schools from kindergartens touniversities to learn environmental problems and an inclusive society using
FUKU-NO-WA as a case study. The FUKU-NO-WA Project will continue to provide
various opportunities for learning.

Decent Work and Economic Growth
The FUKU-NO-WA Project sells home delivery kits called FUKU-NO-WA at home.
The production of special kits for sales is outsourced to welfare service facilities
in Tokyo, aiming to realize an inclusive society through work sharing.

Responsible Consumption and Production
Japan is one of the biggest consumers of clothes, where about 1 million tons ofclothes are disposed of every year, of which 70% is incinerated. The FUKU-NOWA Project contributes to building a sustainable cycle of production andconsumption by developing an environment for reuse and recycling of clothing
and reusing as much clothes as possible.

Climate Action
Since its launch in 2016, the project has reused and recycled approximately 500
tons of clothes and reduced CO2 emissions which otherwise would have been
produced if such clothes had been incinerated. We have also taken steps toreduce CO2 emissions from collection, transportation, and distribution of clothes.

Partnerships for the Goals
The FUKU-NO-WA Project has built partnerships with companies, industry groups,
governments and schools and aims to contribute to development of para-sports
and SDGs through the promotion of reuse of clothes (efficient collection and more
adoption of reuse).

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SUSTAINABILITY

Reuse and Recycle to the Maximum Extent

ENVIRONMENTSOCIAL

GOVERNANCE

Toward the Realization of an Inclusive Society

In the FUKU-NO-WA Project, we regularly check whether donated clothes are reusable.
Then we sell some of the donated clothes at the FUKU-NO-WA Marché in Japan, and theothers are sent to more than 15 countries such as India, Pakistan, or Cambodia after being
sorted in a factory in Malaysia, and resold at clothing markets. Unmarketable clothes aresent to factories and recycled into rags or other products.

As an official partner of the FUKU-NO-WA Project, Fujibo Holdings regularly collects clothes
to be donated to the project at its Tokyo Headquarters. We also contribute to the initiativein a variety of ways, such as supplying clothing developed throughout the selling process
for charity sale events. Proceeds from the events are used to cover the cost of making
uniforms for Japan’s para-sports national teams, as well as lecturer fees for para-sports
players who are sent to schools and other groups participating in FUKU-NO-WA activities.
In FY2022, experiential para-sports workshops and experiential paravolley (sittingvolleyball) workshops were held.

Clothes donated
By post or drop-off

Warehouse of a secondhand clothing company (Harajuku Chicago Inc.)
Reception/Weighing

Donated clothes

Accumulation/Compression and Packaging/Loading

Carry inTransported to Malaysia by ship

Malaysia/Secondhand clothing factory
Sorted by clothing type
Select and ship according to theclimate and culture of each region

Worldwide/Secondhand clothing markets

ESG DATA

Transport

Sorted on site

Unmarketable clothes are recycled
into different forms.

15 countries around the world, including India

Factories, etc.

Markets around the world
Malaysia, Pakistan, Bangladesh

Rags, etc.

Experiential paravolley (sitting volleyball) workshop and
FUKU-NO-WA activities

FUKU-NO-WA Marché

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATAENVIRONMENT

Basic Concept
In order to reduce our environmental loads and to fulfill our corporate social responsibility,
the Fujibo Group has established an environmental policy and has set a management
strategy to resolve issues through our business. Our Group recognizes that global
environment issues, which have become urgent issues in the international community, areof the top priority, and strives to achieve our corporate philosophy “we are committed torealizing a more prosperous and sustainable future for people, society and the global
environment.” Specifically, we are promoting efforts to reduce the environmental loads ateach of our business sites, including preservation of air and water environment,
preservation of biodiversity, resource saving or reduction of waste, and proper managementof chemical substances.

Environmental Policy
Basic Philosophy
	The Fujibo Group will work together to realize its corporate mission of “we arecommitted to realizing a more prosperous and sustainable future for people,
society and the global environment.”

Basic Policy
1. Compliance with environmental laws and regulations
T he Group will comply with environmental laws and regulations, and	
agreements we have agreed upon.
2. Responding to climate change
The Group will give due consideration to the mitigation of climate change and	adaptation to the effects of climate change.
3 Consideration for biodiversity
The Group will give due consideration to the preservation of the environment	such as natural systems, and the maintenance and conservation of biodiversity.
4. Effective use of resources and energy
Recognizing the finite nature of resources and energy, the Group will strive for	waste control, reuse, recycle, and make effective use of waste.
5. Establishment of an environmental management system
The Group will strive to continuously enhance and improve its environmental	management system.
6. Dissemination and disclosure of environmental policies
We will widely disclose this environmental policy as well as inform all employees	of the Group.

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Priority Themes of Environmental Activities
The Fujibo Group incorporates the following items in its management strategy as priority
themes of environmental conservation and focuses on achieving each initiative.
1. Reduction of greenhouse gas emissions
	The Fujibo Group’s greenhouse gas emissions from energy use consist of only CO2(carbon dioxide), with no emissions of CH4 (methane), N2O (nitrous oxide) or othergases. We will continue to actively promote the shift to renewable energy to further
reduce greenhouse gas emissions.
2. Efforts to reduce the environmental loads of water resources	At each of our business sites, we implement environmentally-friendly drainage
treatment using the activated sludge process and in compliance with laws including
the Water Pollution Control Act and the Sewage Act. We also are actively working on
the efficient use of water resources.
3. Promotion of the reduction of industrial waste	We are promoting detoxification by incineration of industrial waste such as waste liquid(organic pollutant) generated in the production process. We process unstable chemical
substances internally to enhance safety, and reuse some of them as energy resources
as fuel for incineration equipment.
4. Reduction of the environmental loads of chemical substances	The Group properly manages the amount of PRTR substances (chemical substancesthat are subject to the PRTR) handled, released, and transferred. We are also working
on activities together with our customers to reduce our environmental loads.
5. Efforts for resource recycling and energy saving in operation	With the understanding of the finite nature of resources and energy, we are working onenergy-saving activities and also promoting the reduction, reuse and recycling of waste.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Addressing the TCFD Recommendations
and Completing the CDP Questionnaire
The Fujibo Group recognizes that climate mitigation measures to realize a decarbonizedsociety are an important management issue. Accordingly, in November 2021, the Groupannounced its support for the Task Force on Climate-Related Financial Disclosures (TCFD)
recommendations,*1 which provide guidelines for starting the disclosure of climate changerelated information. The following discloses key information about our response to climatechange-related risks and opportunities, in line with TCFD recommendations.
In addition, the Group has completed questionnaires (results for FY2022) issued by CDP,*2
which provides investors, companies and others with a global information disclosure system
to manage their environmental impact. The Group intends to use the CDP score on thequestionnaire responses to address climate change issues in the future.
*1 TCFD: A task force established by the Financial Stability Board (FSB), which is an international organization consistingof central banks and financial authorities of major countries and regions in the world. The TCFD published its final
report in June 2017, recommending that companies disclose their “governance,” “strategy,” “risk management” and“indicators and goals” (11 items in total) related to risks and opportunities arising from climate change.
*2 CDP (formerly Carbon Disclosure Project): CDP is a non-governmental organization (NGO) managed by a charity in
the United Kingdom. CDP runs the global disclosure system used by investors, companies, states, regions, and cities
to manage their environmental impacts. Based on the requests of institutional investors who conduct ESG investment
and suppliers, CDP sends questionnaires to companies to obtain their environmental information. There are three
types of questionnaires for climate change, forests, and water security.

1. Governance	The Fujibo Group’s ESG Committee, chaired by the President, makes decisions onimportant environment-related targets and initiatives. In that regard, we enlist a system
whereby climate change-related risks and opportunities are identified by the ESG
Committee, which meets twice annually. The Environment Subcommittee, operating asa subcommittee of the ESG Committee then addresses such challenges andaccordingly consults with either of the ESG Committee, Management Committee, or
the Board of Directors, depending on the level of importance. The Board of Directors
makes final decisions upon having received reports from the relevant bodies such as
the ESG Committee, then controls and supervises progress thereof.

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SUSTAINABILITY

2. Risk Management
	We have been engaged in establishing and maintaining a system for identifying andmanaging Group-wide information on risk, including climate change-related risk. We
have accordingly established the Risk Management Committee, which collects andanalyzes information pertaining to risk management and takes action if a riskmaterializes. Meanwhile, the ESG Committee also identifies risks and opportunities
from the standpoint of their likelihood of occurrence and monetary importance, andtakes action accordingly. Specifically, the Environment Subcommittee coordinates witheach operating company to examine and implement countermeasures. Efforts of the
Risk Management Committee and ESG Committee to engage in risk management
entail reporting matters to the Board of Directors and Management Committee,
depending on the level of importance.

■ Governance System for Climate Change

Fujibo Holdings, Inc.

ESG Committee

Board of Directors
Management Committee
Environment and Safety
Promotion Department

Risk Management
Committee

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

3. Strategy
	The Fujibo Group enlists the five procedural considerations listed below with respect
to identifying risks and opportunities related to climate change, evaluating the impact
of such risks and opportunities on its business activities, formulating strategies, andtaking action accordingly.
(1) Identification of climate change-related risks and opportunities(2)	A ssumptions for scenario analysis (define applicable businesses and climatechange scenarios)(3) Impact of risks and opportunities on business, strategy, and financial planning(4) Strategies (transition planning) and resilience pertaining to risks and opportunities(5) Main risks and opportunities and measures to address such risks and opportunities
4. Metrics and Targets
	Greenhouse gases emitted as a result of our business activities consist solely of CO₂
with no emissions of CH₄ (methane) or N₂O (nitrous oxide). Whereas we are likely to
consume more energy moving ahead amid our ongoing expansion of production, weare striving to reduce our greenhouse gas emissions by promoting a transition to
renewable energy. Going forward, we will strive to increase our corporate value andcontribute to achieving a decarbonized, low-carbon society by persisting with businessactivities that place even greater emphasis on environmental concerns.
Greenhouse gas emissions / Energy consumption (domestic + overseas)
Scope 1 CO 2 emissions (thousand tons of CO 2)
Scope 2 CO 2 emissions (thousand tons of CO 2)
Energy consumption (TJ)
(thousand（千t-COtons
2） of CO 2 )

(TJ)
（TJ）

1,250

100.0
80.0

Group companies

60.0

Environmental manager

40.0

914.4

883.4

57.6

55.7

35.4

33.8

928.5

948.9

60.1

62.9

35.3

35.5

750
500
250

20.0
0.0

1,000

22.2

21.9

24.8

27.3

2019

2020

2021

2022

0

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Overview of the Environmental Loads of Business Activities
The Fujibo Group monitors the amounts of energy and chemical substances used in business activities, as well as the emissions of CO2 and waste, to get an overall picture of theenvironmental activities each fiscal year to assess the achievement of our targets.

Flow of Materials in Our Production Activities for 2022
INPUT

OUTPUT

Raw materials: 
Polishing Pad Businessand Industrial Chemicals Business

32 thousand tons

Total greenhouse gas emissions:

Scope 1 + Scope 2



BUSINESS ACTIVITIES• Scope 1-CO emissions:2(Down by 1 thousand tons year on year)

948 TJ(Up by 20 TJ year on year)

27 thousand tons (Up by 2 thousand tons year on year)

35 thousand tons (Up by 0 thousand tons year on year)• Scope 2-CO2 emissions:

Development
Energy input:

62 thousand tons (Up by 2 thousand tons year on year)• Scope 3-CO emissions:
2

Production



128 thousand tons (Up by 4 thousand tons year on year)

Water resources discharge:

Water resources input:

1,832

thousand m3

Distribution(Down by 226 thousand m³ year on year)

7,812 tons

(Down by 249 tons year on year)

1,372 thousand m (Down by 263 thousand m³ year on year)
3

Waste:
Sales
Amount of chemical substances handled(PRTR substances):

47 thousand tons (Down by 0 thousand tons year on year)
Soot and smoke:
40 tons (Up by 2 tons year on year)
Chemical substance emissions (PRTR substances)
tons (Up by 1 ton year on year)• Emissions:

31• Transfer: 897 tons (Down by 561 tons year on year)

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Efforts to Reduce Greenhouse Gas Emissions
B.V.D. Packaging

From 2021, Fujibo Apparel Corporation has switched all packaging materials used for its
flagship products to “Green Nano” packaging. “Green Nano” is a new environmental material
manufactured and sold by Aitoz Machinery Co., Ltd. By adding only 3% of this material toconventional plastic raw materials, CO2 emissions can be reduced by around 30% duringincineration. The use of “Green Nano” has led to a reduction of CO 2 emissions ofapproximately 23 tons over the period between April 2022 and March 2023.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Establishment of New Warehouse with Net Zero Energy Building (Net ZEB)
Design at Yanai Plant

In November 2022, Yanai Chemical Industry established a new warehouse. The warehousehas obtained third-party organization Building Energy-efficiency Labeling System (BELS)
Certification for its Net Zero Energy Building (Net ZEB) design equipped with solar panels
as part of the building’s specifications. We have established a system for using renewableenergy for operations of the main warehouse building, office building, works facility, andexisting warehouses.

Overhead view of warehouse enlisting Net ZEB design

BELS Certification obtained by thewarehouse

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Reduction of Environmental Loads
on Water Resources
The Fujibo Group’s business activities are dependent on abundant water resources, mainly
the Seto Inland Sea. Recognizing that we are supported by water and the blessings ofnature that produce it, we are working to reduce the environmental loads of our water
resources.
Nyugawa Plant and Oita Plant, both of which face the Seto Inland Sea, have wastewater
treatment facilities that use the activated sludge process. The activated sludge processuses microorganisms to decompose the wastewater and remove the sludge bysedimentation. The supernatant liquid is tested for water quality before being returned tothe sea for environmentally friendly wastewater treatment. We also strive to maintain andmanage appropriate water quality in compliance with the Act on Special Measuresconcerning the Conservation of the Environment of the Seto Inland Sea and other total
volume control systems.
Each business site complies with the Water Pollution Prevention Law and the Sewage
Act, regularly inspects water quality and discharges water in public water areas.
In addition, in order to contribute to the conservation of water resources in the Seto
Inland Sea, we are also a member of “The Association for the Environmental Conservationof The Seto Inland Sea,” a public interest incorporated association.

Wastewater treatment facility in Oita Plant

Drainage treatment facility in Takefu Plant

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Efforts to Reduce Environmental Loads on Water Resources

A large amount of water is used in the dye process in production of textile products. Fujibo
Textile Wakayama Factory is gradually replacing the dyeing machines with “low liquor ratiotype” which significantly reduces the amount of water and dyes used, thereby reducing
environmental loads.

FY 2022 Water Quality Data (Average Value)
Item

Maximum
permissible
limit

FE

YC

FT

Quality of wastewater(average value)Standardvalue

Nyugawa

Oita

Yanai

TakefuWakayamapH

5.8 − 8.6

7.66

7.14

7.90

7.16

7.33

Mineral oil (mg/L)

5mg/L

0.01

—

0.00

0.52

0.00

BOD (mg/L)

160mg/L

—

—

0.00

0.81

58.30

COD (mg/L)

160mg/L

2.90

12.29

16.87

1.25

85.70

Total nitrogen (mg/L)

120mg/L

5.59

21.80

0.69

1.00

5.28

Total phosphorus

16mg/L

0.71

3.00

0.01

0.05

0.94

All items cleared
FE Nyugawa, Oita: BOD test not required for ocean discharge.
YC Yanai: BOD test not required for ocean discharge. The mineral oil value was obtained through external analysis.
FT Wakayama: Discharged into the sewerage system.
*FE: Fujibo Ehime, YC: Yanai Chemical Industry, FT: Fujibo Textile

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Reduction and Recycling of Industrial Waste
The Fujibo Group is committed to reducing
Internally processed
Outsourced
industrial waste and recycling resources.
(thousand tons/year)（千トン／年）
We sort waste into valuables, recyclables
50
48.2
47.9
and industrial waste and store and dispose
44.9
44.5
40
of them accordingly at each of our busi18.8
20.5
ness sites. In addition, we emphasize
30
24.7
26.2
­e fforts to cut down on waste through20
loss-reduction practices that involve reus29.1
ing work in progress generated during the
27.6
10
20.2
18.3
manufacturing process and implementing
0
stringent yield management.
2019
2020
2021
2022
The Yanai Headquarters Plant detoxifies
liquid waste generated in the production
process by decomposing liquid waste into water and CO2 through combustion treatment. We
are working to reduce our environmental loads through internal processing of approximately
80 tons of liquid waste per day using a submerged combustion system. Moreover, thisenables us to minimize the risk of secondary pollution, such as dioxins, through hightemperature combustion treatment. We manage the soot and smoke generated during
combustion by keeping them below the standard level using a detoxification system. We also
reuse some of the liquid waste as fuel for incinerators to reduce our environmental loads.
While the submerged combustion system burns waste liquid, it generates soot andsmoke (soot and dust, sulfur oxides (SOx), nitrogen oxides (NOx)). We regularly measure,record and store soot and smoke data in compliance with the Air Pollution Control Act.
Changes in soot and dust emissions(tons/year)（トン／年）
30.0

24.8

21.8

18.0
12.0
6.0

6.3

7.7

0

Submerged combustion system at Yanai
headquarters plant (newly installed)

2019

2020

2021

SOCIAL

2022

GOVERNANCE

Changes in SOx emissions

Changes in NOx emissions(tons/year)（トン／年）

12.0
9.0

ESG DATA(tons/year)（トン／年）

Changes in industrial waste disposal volume

24.0

ENVIRONMENT

40.0

10.9

30.0

8.0

6.0

30.2

32.7

20.0

3.0

3.9

4.1

2021

2022

0

14.8
10.0

10.1

0

2019

2020

2019

2020

2021

2022

R eduction of Environmental Loads
of Chemical Substances
For the proper management of chemical substances generated at our manufacturing sites, wemanage the amount of chemical substances handled, released, and transferred at each facility
in accordance with the PRTR Act (the Act on Confirmation of Release Amounts of SpecificChemical Substances in the Environment
Changes in total handling volume of PRTR substancesand Promotion of Improvements to the(tons/year)（トン／年）
Management Thereof). Regardless of the
10,000amount of emissions into the envi­ron­
8,651
8,448
8,061
8,000
7,812
ment, we conduct proper monitoring andimplement appropriate control measures
6,000
to reduce the amount of use and emis­
4,000
sions in accordance with environmental
laws and regulations.
2,000
Furthermore, in addition to the work the0Company does alone, we are also
2019
2020
2021
2022
working together with our customers to
reduce environmental loads.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Conservation of Biodiversity
In order to create a society in harmony with nature where ecosystems are properly
preserved and we can enjoy the gifts of nature for the future, the Fujibo Group is working
on the conservation of the environment of the Seto Inland Sea. We will contribute to theconservation of biodiversity through community participation in solving the plastic waste
problem, donation to the Keidanren Nature Conservation Fund, and use of certified forest
conservation materials, etc.

Investment in the Aquarium “Umitamago”
In interactions with local communities, our business sites and factories, which aresurrounded by the rich ecosystem of the Seto Inland Sea, support biodiversity conservation
efforts. We are involved in a variety of measures to safeguard the Seto Inland Sea’s uniquebiota, such as investing in Marine Palace Co., Ltd., which manages the Aquarium“Umitamago” in Oita.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Our Efforts to Stop Marine Plastic Pollution
The Fujibo Group participated in the Japan Clean Ocean Material Alliance in 2018. This is
an international business alliance project to solve marine plastic pollution, which is a
global issue.
Member companies are required to properly manage waste, mainly to ensure preventionof plastic littering and to promote 3R technologies and development and dissemination ofhighly biodegradable alternative materials for plastic and paper products. In addition topromotion of eco-plastics, the Fujibo Group is working on biological conservation throughthe prevention of marine pollution together with various companies involved in the effective
use of overall plastic products.

Donation to Keidanren Nature Conservation FundAs a member of the Japan Business Federation (Keidanren), we agree with the purpose of
the Keidanren Nature Conservation Fund. Furthermore, we provide support for conservation
projects as a company and donations to a charitable trust, the Nature Conservation Fund,every year from the perspective of social contributions.

Our Efforts to Preserve Forests
The B.V.D. brand uses FSC-certified sub materials (tags). FSC is anational system to identify and certify products that are made following“proper forest management” for the purpose of sustainable use andpreservation of forests. The B.V.D. brand has switched all of its tags topaper made from FSC-certified wood since 2020.

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GOVERNANCE

ESG DATASOCIAL

Clothing collected in FUKU-NO-WA activities

Paravolley (sitting volleyball) and FUKU-NO-WA activities

Basic Concept
The Fujibo Group respects diverse values regardless of gender, age, nationality, etc., andpromotes the provision of opportunities to demonstrate one’s abilities and the improvementof the working environment based on the guiding principle of “constantly overcome
challenges to make breakthroughs” set out in the corporate vision.
In the workplace, we will respect individual abilities and promote the creation of anenvironment where people can work together to improve under fair opportunities and fairevaluation, and create a workplace that fosters healthy competitiveness and teamwork.
We are also working together with our various stakeholders to realize a better society.
As a global corporate citizen, we will actively participate in local revitalization initiatives
and local contribution activities and fulfill our roles in solving social challenges as a memberof the local communities.

Japanese national sepak takraw (kick volleyball) team and FUKU-NO-WA activities

The Group has designated the following items as priority themes to be tackled throughsocially conscious management, and will focus on achieving each of them.
1. Diversity & Inclusion
	We will build a corporate culture of mutual respect through inclusion of diversity.
2. Respect for human rights
	In accordance with the “Fujibo Group Human Rights Policy,” we will respecthuman rights.
3. Human resource development
	Recognizing that employees are our corporate asset, we will work to develop them.
4. Health and productivity management
	We will aim to stimulate our organization and increase our corporate value by
promoting employee health maintenance and enhancement.
5. Safety and health of employees
	The Safety and Health Committee and a Group-wide organization, will play a central
role in ensuring the health and safety of employees.
6. Supplier management
	We will ensure responsible procurement in accordance with our Sustainability
Procurement Guidelines.
7. Quality assurance	To provide customers with high-quality products, we will appropriately manage
our internal quality management systems.
8. Contribution to local communities	As a member of the local community, we will actively get involved in local
community activities to contribute to its revitalization.

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Diversity & Inclusion
The Fujibo Group believes that inclusion of diversity such as race, gender, age, gender
identity, disability, etc., will create a corporate culture of mutual respect that will propel us togrow together.

Approach to Ensuring Diversity
The Group’s labor policy is based on the motto, “Respect the individual, cultivate harmony,”and stipulates, “We provide fair opportunities and evaluations for each employee and create
an environment where they can improve through friendly competition. Respect forindividuality creates a workplace that improves competitiveness and team work.” As wemove forward with the upgrading of our business structure, we believe that respecting
diversity regardless of gender, age, nationality, etc., providing opportunities for employees todemonstrate their abilities, and promoting the improvement of the working environment willcontribute to sustainable growth and the enhancement of corporate value.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Development of Work Environment for Work With Energy and Enthusiasm
The Group has addressed the following policies to create a work environment where
everyone can work with energy and enthusiasm:
1. Value teamwork at workplace;
2. Clarify goals and policies of each department to help each employee fully understandtheir role in the organization and fulfill their duties;
3. Avoid excessively long work hours and properly manage work hours;
4. Place an industrial physician and a person in charge of health insurance affairs at aworkplace and provide mental care and healthcare.

Initiatives for Aging Society
While our retirement age is 60, we have a policy to flexibly allow various work styles after
the age of 60.

Human Resource Development andInternal Environment Policies to Ensure Diversity

We are implementing the following measures to pursue employee satisfaction in an aging
society:

The Group provides opportunities for a diverse range of human resources to demonstrate
their abilities and play an active role, regardless of gender, age, nationality, disability, etc.
We are also promoting the development of an internal environment in which each employee
can work with peace of mind and vigor in a healthy state.

1. Allow applicants to extend their employment until the age of 65 and to adopt various
work styles after their retirement in accordance with our reemployment system;
2. Hold seminars for middle-aged and older employees;
3. Give healthcare and aftercare, mainly medical checkups for lifestyle diseases;
4. Encourage club activities for health improvement;
5. Give special consideration to employees with elderly family members in accordance with
our leave of absence program for nursing care;
6. Promote self-development activities for lifelong education.

1. Promotion of flexible work styles and improvement of work-life balance( 1 ) Support for balancing childcare and nursing care, regardless of gender(2) Flextime system(3) Work from home
(4) Post-retirement reemployment system(5) Employment of people with disabilities(6) Proactive promotion of leave usage
2. Paid leave utilization in FY 2022
Average annual paid leave utilization rate: 50.6% (Up by 2.9 pp year on year)
Average annual days of paid leave utilization: 10.0 days (Up by 0.3 days year on year)

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Promote Women’s Participation

Voluntary and Measurable Targets and Their Achievements

We ensure fair and equal opportunities for employment, promotion and compensation, etc.
and provide opportunities for education and training as well as development of the next
generation regardless of gender. We also have taken steps to ensure that women’s skill
development and careers are not interrupted by enhancing the leave of absence programs
system to support both childcare and nursing care. The ESG Committee is currently
studying initiatives to further promote women’s career development.
As of March 31, 2023, the number of employees for the Group in Japan and overseas is1,273, of which 441 (34.6%) are female. Of the 441 female employees, 13 are managers andthe ratio of women in management positions is 8.6%. If the number of female managers
increases in various workplaces such as development, manufacturing and sales, that willbring diverse perspectives and further enhance our corporate value.

We set a target of the ratios of females, non-Japanese and mid-career hires in management
positions recognizing the importance of ensuring diversity at management level, who play acentral role in management. We have set a target for the same ratios for FY2025, which isthe final fiscal year of the current medium-term management plan, “Zokyo 21-25.” We willfurther enhance diversity in the future by increasing the number of core personnel.

Item

Ratio of female
managers
Ratio of females
in management
candidate positions
Ratio of non-Japanese
in management
positions
Ratio of mid-careerhires inmanagement positions

Current

TargetTarget Period

8.6%(13 / 151)

10% or higher

End of March,
2026

15.2%
(20 / 132)

8% or higher

End of March,
2026

10.6%
(16 / 151)

13% or higher

End of March,2026

17% or higher

End of March,2026*female managers/all managers*female candidates for management positions/
all candidates for management positions*non-Japanese managers/all managers

20.5%(31 / 151)
*mid-career hires /all managers* Managers are classified as supervisors under the Labor Standards Law, and are the sum of department managers andsection managers.
* Calculated based on figures including domestic and overseas Group companies.
* “Current” represents the figures as of the end of March 2023.

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Respect for Human Rights
The Fujibo Group follows our corporate philosophy “we will always support leading-edge industries by providing new technologies and products demanded by the times, and are committed torealizing a more prosperous and sustainable future for the people, society and the global environment” and stipulates in the “Fujibo Group Charter of Conduct” that we will conduct managementthat respects the human rights of all people.
We have developed “The Fujibo Group Human Rights Policy” (hereinafter, the “Policy”) pursuant to the “United Nations Guiding Principles on Business and Human Rights” and Japan’s“National Action Plan on Business and Human Rights” developed in compliance therewith, and will address respect for human rights based on the Policy as a guide in order to fulfill our
responsibility to respect human rights of all people involved in our business.

The Fujibo Group Human Rights Policy
1. Scope of application
	This Policy applies to all employees and officers of the Group. The Group also expects
all business partners, including its suppliers, to understand and support this Policy.
2. Basic concept
	The Group will respect human rights as stipulated in the “International Bill of Human
Rights” and the “Declaration on Fundamental Principles and Rights at Work” by theInternational Labour Organization (ILO). In conducting business activities, the Group is
taking initiatives to respect human rights pursuant to the “United Nations Guiding
Principles on Business and Human Rights” and Japan’s “National Action Plan on
Business and Human Rights” formulated in accordance with the UN’s Guiding
Principles.
3. Compliance with laws and regulations
	The Group understands and adheres to the laws, regulations and rules related to its
business in all countries and regions where it conducts business activities. In theunlikely event that the laws and regulations in the relevant country or region differ
from or conflict with international norms for human rights, the Group will seek ways tomaximize respect for internationally recognized human rights principles within thescope of the laws, regulations and rules of the country or region.

4. Corporate Human rights due diligence	Based on the concept of human rights due diligence in accordance with the “Guiding
Principles on Business and Human Rights,” the Group will strive to understand,prevent and mitigate human rights violations or effects that may result in indirect
racial abuse.
5. Establishment of remedy and grievance mechanism	If it becomes evident that the Group’s business activities infringe on human rights or
cause an impact that may indirectly result in human rights violations, the Group will
endeavor to take the necessary steps to address the situation.
6. Education and training	The Group will strive to provide appropriate education and training in order toeffectively implement this Policy throughout its business activities.

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Human Resource Development
The Fujibo Group aims to become the “outstanding No. 1 player in a niche segment” as its
long-term vision. For this vision, we believe that employees are our corporate assets andhave established an organization to promote human resource development since 2010.
Based on our ideal of creating a small yet highly talented workforce, we will continue tosupport the development of multi-skilled workers in step with our business portfoliotransformation. In order to support the growth of our employees, we provide a training
system tailored to careers, such as theme-based training and re-skilling aimed at thedigitalization of business processes. Moreover, in October 2021, we established a dedicateddepartment for promoting human resource development at Fujibo Ehime Co., Ltd., which is
working on skills development with a view to creating new value.
1. Develop problem-solving human resourcesWe provide well-developed career training to actively support employees to develop
themselves into problem-solvers. After joining the company, the Human Resources
Department and the department unit together to provide OJT, and then provide theemployee with opportunities to solve problems and understand customer needs on thejob site, as well as various training by the Human Resources Department, to prepare forpromotion to managerial positions. We also fairly evaluate the knowledge, skills andattitudes of mid-career hires and actively help them get promoted to management.
2. Develop globally competent resourcesIn order to develop globally competent human resources, we provide language training
covering mainly English, Chinese (including Taiwanese), Thai and Japanese and alsooffer language study programs in various countries to achieve higher personal
development goals.
3. Develop next-generation leadersIn order to realize sustainable corporate management, we develop next-generation
leaders to be able to have balanced capabilities and insights by giving them experiencein leading a small group at first and gradually bigger groups or a subsidiary.

Improvement of Education and Training Programs
The Group supports employees’ growth through various training programs. Training
programs include education and training and next-generation development, as well as
mental health education such as workplace safety education, environmental education and

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

self-development. In addition to human resource development and work-related training,
we are also increasing opportunities for education while taking into account the work
environment and employees’ health.
■ Training System
Manager training upon appointment, training upon promotion (upgraded employment
designation or job title), job category-specific training, occupation-specific training, rankspecific training, overseas language study programs, language instruction by class level(classroom-based learning, lessons provided in the workplace, online learning), allowanceto cover costs of distance learning courses for self-development, theme-specific learning
sessions at each of our business sites.

Investment in Human Capital
Investment in human resources is fundamental to the sustainable growth of the Company, and
the Group actively provides education and training opportunities to draw out and enhance theknowledge, skills, and abilities of individuals. We are committed to enhancing the capabilitiesof each and every one of our employees to realize a sustainable way of working.
■ Investment in Human Capital to Increase Corporate Value
Personnel investment

Related management
strategies and measures

GrowthInvestment to nurture anddevelop the abilities of internal
human resources
Proactively recruit expert
human resources

Development of
new businesses
and products

Revise the remuneration system
to strengthen competitivenessMeasures to improve
employee engagement

Investment to enhance
the health of employees

Increase
corporate value

Improvement in employees’
approach to challenges
and creativity

Reinvestment

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Health and Productivity Management

ENVIRONMENT

Based on its recognition that employees serve as true corporate assets, the FujiboGroup works to establish workplace environments that are mindful of employee
health and safety in seeking to achieve work styles that enhance their capabilities
and respect their diversity, personalities, and individuality.
We are committed to realizing a more prosperous and sustainable future forpeople, society and the global environment. Our initiatives to such ends will entail
ensuring the safety and security of our employees, actively promoting employee
health maintenance and enhancement, and enabling each and every employee towork enthusiastically.
September 2022
Masahide Inoue
Representative Director and President
Fujibo Holdings, Inc.

System for Promoting Health and Productivity Management
We promote health and productivity management on a Group-wide basis enlisting aframework whereby the Representative Director and President of the Company serves as
Chief of Health and Productivity Management Promotion and whereby the General Affairs
Department and Human Resources Department primarily coordinate with the general affairs
departments associated with each of our Group companies and business sites as well as
the Safety and Health Committee. The departments also coordinate with the Fujibo Health
Insurance Society and industrial physicians.

GOVERNANCE

ESG DATA■ System for Promoting Health and Productivity Management
Chief of Health and Productivity
Management Promotion(Representative Director
and President)

Based on its corporate philosophy, the Fujibo Group has established a health and productivity
management program enlisting strategic practices from a managerial perspective under its
Medium-term Management Plan “Zokyo 21-25.” Our initiatives to promote employee healthmaintenance and enhancement stimulate our organization in part by enhancing employee
vitality and heightening productivity, which in turn prompts expectations of better financial
results and increased corporate value. We furthermore maintain an internal environment inwhich employees are able to work enthusiastically by implementing various initiatives under
our system for promoting our Health and Productivity Management Declaration.

Health and Productivity Management Declaration

SOCIAL

Health and Productivity
Management Promotion Unit
(General Affairs Department andHuman Resources Department)

Fujibo Health
Insurance Society

Coordination

Coordination

ReportCoordination

Group companies and business sites(general affairs departments andSafety and Health Committee)

ESG Committee

Industrial
physicians

Coordination

Recognition under 2023 Certified Health and Productivity Management­Outstanding Organizations Recognition Program (large enterprise category)On March 8, 2023, the Fujibo Group gained recognition
under the 2023 Certified Health and Productivity
Management Outstanding Organizations Recognition
Program (large enterprise category) for its health andproductivity management initiatives with respect to theCertified Health and Productivity Management
Outstanding Organizations Recognition Program
jointly implemented by Japan’s Ministry of Economy,
Trade and Industry (METI) and Nippon Kenko Kaigi.

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Safety and Health of Employees
The Fujibo Group is committed to ensuring the safety and health of employees at businesssites, with the Group-wide organization Environment and Safety Promotion Department
playing a central role. We launched a safety measures project in 2010 and establishedsafety and health management regulations in April 2011. We are promoting zero workplace
accident activities as the top priority goal by developing and improving our Group-widesafety and health management system and conducting regular safety inspections andguidance at all business sites.

Initiatives for Safety and Health Education

ENVIRONMENTSOCIALESG DATA

Assessment of Safety Risks
The Fujibo Group is implementing initiatives to thoroughly identify and evaluate risks related
to employee safety, including accidents and injuries. When making capital expenditures or
upgrading facilities, we conduct multifaceted risk assessments and, if necessary, chemical
substance risk assessments to ensure that all possible engineering and administrative
measures are taken. The Environment and Safety Promotion Department inspects each
workplace, evaluates risk countermeasures and instructs necessary measures in accordancewith its annual plan. We will continue to strive to prevent serious accidents and further
enhance the security and safety of our employees and the local communities.
■ Safety Promotion System

Fujibo Holdings

We provide safety education at our manufacturing sites to ensure the safety of employees.
■ Specific Initiatives• Safety education tailored to different age groups (new employees, foremen, managers,
age-inclusive for older workers, etc.)• Education to heighten hazard awareness (risk assessment, workplace injury prevention
training, near miss incidents, harmful effects of chemical substances on the human body, etc.)• Education related to employee health (mental healthcare, etc.)

GOVERNANCE

Board of Directors

ESG Committee

Management Committee

Risk Management Committee

Environment and Safety Promotion Department
Safety measures project

Human Resources
Department

Group companies
Industrial physicians

Risk assessment
Engineering safety measures
Managerial safety measures

General Safety and Health Manager
Compliance with Industrial
Safety and Health Act
Zero workplace
accidents
Workplace injury prevention

Safety inspection

Safety and Health Committee
Safety education
Near miss incidents

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Sustainability Procurement Guidelines

Supply Chain Management
The Fujibo Group has established an appropriate transaction policy and is conducting
responsible procurement in order to support the development of a sustainable society
throughout the supply chain. The policies cover legal compliance, fair transactions,environmental considerations and respect for human rights (prohibition of child labor andforced labor) among others.

1. Organizational governance( 1 ) Regulatory compliance and respect for international norms
	The Group will comply not only with laws and regulations applicable to its home country and thecountries and regions where it operates, but also respect the International Code of Conduct.
(2) Respect for sustainability
	The Group will respect the spirit of sustainability, establish policies to improve sustainability,and build an organizational structure to achieve this goal.

Securing Sustainable Supply Chain

2. Fair trade and ethics( 1 ) Prohibition of bribery
	The Group will neither give, offer or promise a bribe to any person, whether directly or
indirectly, nor will it accept bribes.
(2) Prevention of improper provision and receipt of benefits	The Group will not provide, receive or tolerate improper benefits in relation to stakeholders.
(3) Prohibition of abuse of superior bargaining position
	The Group will not take advantage of its superior position as a purchaser or consignor to
impose any disadvantage to suppliers and contractors.
(4) Prohibition of competition restricting practices
	The Group will not engage in any acts, such as cartels and bid-rigging, that impede fair,transparent and free competition.
(5) Respect for intellectual property rights
	The Group will not infringe on the intellectual property rights of others, such as patent rights,
utility model rights, design rights, trademark rights, copyrights and trade secrets.
(6) Proper export control
	The Group will establish a clear control system for the export of goods and technologies
regulated by laws and regulations, and carry out proper export procedures.
(7) Information disclosure	The Group will appropriately provide and disclose information on business activities, financial
conditions, performance and risk information to stakeholders, regardless of whether or notdisclosure is required by laws and regulations.
(8) Prevention and early detection of misconduct	The Group will prevent misconduct through personnel training and education and set up aninternal reporting contact office to respond to early detection of misconduct.
(9) Prohibition of insider trading	The Group will not buy or sell shares of a client company based on non-public, important
information regarding its business.
(10) Confidentiality
	The Group will take protective measures for information security in order not to cause damage
to its own company and others, and properly manage and protect personal information ofcustomers, third parties and employees, as well as confidential information received from
customers and third parties.

Plan

Formulation anddisclosure of
Sustainability
Procurement
Guidelines

ActionFollow-up of
suppliers

Sustainability
Procurement
Guidelines

Do

Request forcooperation of
suppliers

Check

Confirmation ofcooperation

Formulation of Sustainability Procurement Guidelines
The Fujibo Group is strengthening supply chain management to promote responsible
corporate behavior in the supply chain based on the concept of sustainable management.
We have established the Group’s “Sustainability Procurement Guidelines” and will share ourvalues with our business partners and implement the guidelines.
We have prepared this guideline in reference to the “CSR Supply Chain Guidebook”
published by the Japan Electronics and Information Technology Industries Association (JEITA).

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3. Human rights and labor( 1 ) Prohibition of forced labor	The Group will hire all employees of their own free will and will not subject them to forced orbonded labor. The Group will also ensure that employees can leave the company at their own
discretion.
(2) Prohibition of inhumane treatment
	The Group will respect the human rights of its employees and prohibit harsh and inhumane
treatment of any kind, including abuse, sexual harassment, power harassment, and corporalpunishment.
(3) Prohibition of child labor	The Group will not employ children under the minimum working age in countries or regions
where it conducts business activities, nor will it allow young workers to engage in employmentthat would impair their development.
(4) Prohibition of discrimination
	The Group will eliminate discrimination in recruitment and employment and strive to ensure
equal opportunities and fair treatment.
(5) Appropriate wages
	The Group will comply with statutory minimum wages in countries or regions in which it
conducts business activities and will not make unreasonable wage reductions.
(6) Appropriate working hours	The Group will comply with the statutory limits of the countries and regions in which it conducts
business activities, and appropriately manage the working hours, holidays and leave of
employees. The Group will also strive to restrict long working hours, improve its system andcreate a workplace culture that encourages balance between work and personal life.
(7) Employees’ rights to organize	The Group will respect employees’ rights to organize as a means of realizing labormanagement discussions, such as working environment and wage levels.
(8) Approach to conflict minerals
	The Group will not procure raw materials, parts or products that use conflict minerals.
(9) Industrial safety and health	The Group will evaluate risks to workplace safety and ensure safety through appropriate
design, technology and management measures. The Group will identify situations in
the workplace with regard to risks from exposure to chemical substances, organisms,
noise, offensive odors and other similar conditions that are harmful to human body, andtake appropriate measures. In addition, the Group will also conduct appropriate healthmanagement for all employees.

(2) Minimize environmental loads (wastewater, sludge, exhaust gas, etc.)
	The Group will comply with laws and regulations related to air, water quality and chemical
substances in countries or regions where it conducts business activities, and make further
improvements through voluntary standards as necessary.
(3) Environmental permits and administrative approvals
	The Group will obtain the necessary permits and approvals from local authorities inaccordance with the laws and regulations of the countries or regions where it conducts
business activities, and submit the requested management reports to local authorities.
(4) Effective utilization of energy and resources	The Group will set voluntary targets for resource and energy saving, and continue to makeeffective use of resources and energy.
(5) Conservation of water resources	The Group will strive to conserve water resources through efficient use of water and reuse byrecycling.
(6) Reduction of waste
	The Group will set voluntary targets for reducing final waste and strive for continuous
reduction.
(7) Reduction of greenhouse gas emissions
	The Group will set voluntary targets for reducing greenhouse gas emissions and work towards
continuous reduction.
(8) Biodiversity and environmental conservation initiatives
	The Group will assess the impact of its business activities on biodiversity, reduce negative
impacts, and strive to conserve biodiversity and the environment.

4. Environmental conservation( 1 ) Environmental management system	The Group will build and operate an environmental management system to promote
environmental practices appropriate for its business.

6. Social contribution( 1 ) Contribution to society and local communities
	The Group will actively engage in activities that contribute to the development of international
and local communities in order to realize a sustainable society.

5. Quality and product safety( 1 ) Ensuring product safety
	The Group will strive to ensure sufficient product safety so that products meet the safety
requirements stipulated by the laws and regulations of each country. The Group will also
engage in preventive activities to prevent the occurrence of quality problems and respondpromptly when problems occur.
(2) Quality management system	The Group will establish and operate a quality management system to promote quality
assurance initiatives.
(3) Accurate provision of product and service information
	The Group will provide customers and consumers with accurate information about products
and services.

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Raw Cotton Traceability

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Quality Assurance

Given its labor-intensive nature, cotton cultivation undeniably tends to encompass social
problems such as health hazards affecting those involved in production, child labor, and forcedlabor. However, raw cotton used in Fujibo Group’s textile products addresses such concerns
through measures that include our practice of obtaining proof of origin documentation.

B.V.D. Brand Produced with Consideration for Human Rights and Working Environments
We have established a traceability framework with respect to our B.V.D. products. It
begins with the process of spinning raw cotton bearing the aforementioned proof oforigin documentation. Meanwhile, the framework furthermore enables us to verify
that production has been carried out in ethical and safe factories that have acquired
the WRAP certification (plant audit certification by a third-party organization).
As such, B.V.D. is a brand that gives rise to trust between the Company and ourcustomers given that such products result from such stringently controlled
production process.

In order to ensure a stable supply of high-quality products to our customers, theindependent quality control departments of each company and business units of the FujiboGroup conduct quality control and quality assurance operations according to thecharacteristics of each product and respond to increasingly sophisticated needs throughthe promotion of quality management systems and various improvement activities.
The Internal Audit Office continuously monitors and measures the status of thedevelopment, from an independent perspective in order to prevent quality-related incidents,
responds to customer requests, identifies issues and quickly corrects them.
■ Quality Assurance System

ESG Committee

Fujibo Holdings
Board of Directors

Risk Management Committee

Management Committee
Internal Audit Office

Traceable system for the B.V.D. brandGroup companies
Quality Policy and Quality Targets

CottonB.V.D. certified
factories<In-house factory/
outsourcing factory><In-house factory/
outsourcing factory>

WRAP (Worldwide Responsible Accredited Production)

Certification (In-house factory)

ISO Audit

Customers

Business Units

Cotton farmers

Spinning
mills

Education System
TPM Activities
Skill Certification

Customer Satisfaction
Quality Management
SystemInternal Quality Audit

Quality Inspection
Process Inspection

Quality Assurance Division

B.V.D.

(with proof of origin)●T en business sites have ISO9001 (Quality) certification.
● Five business sites have ISO14001(The Oita Plant of Fujibo Ehime Co., Ltd. was registered in September 2022.)● Two business sites have WRAP certification (a labor and environmental certification program).

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SUSTAINABILITY

As a member of the local community, the Fujibo Group actively participates in community
activities to contribute to the revitalization of local communities. We are also working tointeract and communicate with local residents byproviding opportunities in order for them to learn more
about our Group.

Yanai City Budokan / Contribution to Naming Rights

Yanai Chemical Industry Co., Ltd. is committed tosupporting local youth education. In 2016, at therequest of Yanai City in Yamaguchi Prefecture, we
acquired the naming rights to a sports facility in the city.
We named the facility “FUJIBO Yanai Kagaku Budokan.”
The facility has become popular among members of
the local community and has been widely used as avenue for the promotion of sports in the city.

Disaster Relief / Clothing Donation

The Fujibo Group donates underwear, which is a daily
necessity, to assist people in areas affected by largescale disasters such as earthquakes, typhoons andfires. Since December 2021, we have been a member of the Social Emergency Management
Alliance (SEMA), which provides disaster relief in Japan through collaboration between
private-sector companies and civil society organizations (CSOs). If there is a large-scaledisaster, we will use the SEMA framework to supply men’s and women’s innerwear andunderwear according to the needs of those in disaster-affected areas.
Emergency-disaster response alliance SEMAThe Company

Transportation bymember companies, etc.

B.V.D.

NPO • NGO

Deliver supplies to people
in disaster-affected areas
with the cooperation ofNPOs and NGOs

SOCIAL

GOVERNANCE

ESG DATA

Support for Sports

Contributing to Local Communities

Request for the provision of
essential supplies based on
local needs during a largescale natural disaster

ENVIRONMENT

Evacuation
shelters, etc.

Sponsorship of a Professional Golfer
We have signed and maintained a sponsorship agreementwith female professional golfer Kana Mikashima since
October 1, 2021. We provide her with Fujibo Apparel
Corporation’s product “B.V.D. Power Athlete,” which is an
ideal underwear for athletes aiming to achieve their peak
performance.

Support for Sepak Takraw Competitions
We furnish support the sport of sepak takraw (kickvolleyball). For instance, we provide athletes of the sportwith Fujibo Apparel Corporation’s “B.V.D. Power Athlete”
products, which are an ideal type of underwear for athletes
aiming to achieve peak performance. In September 2023,
the sepak takraw team representing Japan took part in the
19th Asian Games held in Hangzhou, China.
Going forward, we will continue to support sepak takraw
competitions as the sport grows in popularity.

Sponsorship of 37th East Japan Women’s Ekiden
This was the fifth consecutive competition that we haveprovided sponsorship for the East Japan Women’s Ekiden
long-distance relay race, thereby showing our support for
Fukushima’s recovery and the women’s track and fieldcommunity (the race was canceled in 2020 as a result of
measures to contain the spread of the COVID-19 pandemic).

Professional golfer Kana
Mikashima

Sepak takraw (kick volleyball)competition

Poster for the 37th East Japan
Women’s Ekiden

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

GOVERNANCE

Basic Concept
Our primary goal is to maximize our shareholder value by pursuing management efficiency
and ensuring soundness. In addition, we focus on ensuring management transparency, strive
to disclose information to the maximum extent possible, and absorb various opinions fromboth inside and outside the company, thereby improving corporate governance and raising
corporate ethics.
Based on our basic recognition as a member of society, we will comply with laws and regulations, observe social norms and corporate ethics, and operate in accordance with internal
rules in order to earn the trust of our customers, employees, business partners, shareholders,investors, and other stakeholders, as well as society, by increasing our corporate value whileaiming for sustainable development through sound management. To implement this, we also
observe the Fujibo Group Charter of Conduct established as a corporate behavior charter.
We have established the Compliance Committee to ensure compliance with laws and regulations, fairness and ethics in corporate activities. In addition, to enhance functioning of theCommittee, we have established a corporate ethics hotline, including an external legal consultation service provided by lawyers, as a body to handle information on potential violations,
thereby building a system enabling management to decide and handle material businessinformation. We also have the Internal Audit Office to audit the execution of various management activities from a fair and independent standpoint and to contribute to the effective
achievement of management goals.
Furthermore, we have taken measures to improve corporate governance, such as having
corporate auditors (including outside auditors) properly audit management, including participation in the Board of Directors, where they are responsible for making decisions on ouroperation and supervising the execution of directors’ duties, separating supervision fromexecution through introduction of the executive officer system, and reinforcing the management supervising function by outside directors.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENT

Corporate Governance System
Fujibo Holdings is a company with an Audit & Supervisory Board, and is taking initiatives tospeed up the decision-making process of the Board of Directors, ensure greater transparency,
and strengthen the oversight functions of the Audit & Supervisory Board.
Since June 2013, the Company has been inviting outside directors to oversee management from a more objective standpoint based on their abundant experience and extensive
knowledge as executives. This enables the Company to build a system to strengthen thefunctions and roles of the Board of Directors, which include decision-making on businessexecution and supervision of the directors’ execution of duties.
The Company’s system allows corporate auditors to attend the Board of Directors and theManagement Committee to understand the process of important decision-making and thestatus of business execution, and to conduct management audits appropriately.

■ List of Corporate Governance Systems
Shareholders’ Meeting
Appointment/Dismissal
Nomination
Committee

Reports, etc.

Decision on execution of business/
Supervision of execution of duties
Audit

Board of Directors(3 outside directors and 5 internal directors)
Compensation
Committee

Reports, etc.

ReportAppointment/Supervision/
Dismissal

Internal Audit

Accounting Auditor
Corporate Auditors

Audit

Risk Management Committee
ESG Committee

Fujibo Holdings’ divisions and its subsidiaries

ESG DATATo ensure effective functioning of our corporate governance, the Company has establisheda system which enables the Board of Directors to execute its management oversight function with a high degree of independence, with independent outside directors accounting for
more than one-third of the total number of directors.
The Company’s Audit & Supervisory Board consists of corporate auditors, including outside
auditors, in order to further enhance the fairness, soundness, and transparency of management. To strengthen management monitoring and supervisory functions, the Company has
appointed corporate auditors with expertise and knowledge of finance and accounting, andthe corporate auditors collaborate with the internal audit department and accounting auditors.
In addition, the Company has established a Compliance Committee that deliberates onimportant compliance-matters and monitors
the status of implementation, and the Risk
Management Committee that promotes
consistent risk management initiatives for
the Company. Furthermore, in April 2021,
we established the ESG Committee to proAppointment/Dismissal
Appointment/
Dismissal
mote sustainability management practices
Audit & Supervisory Board
across the entire Group by responding to(3 outside auditors and 1 internal auditor)
important issues related to SDGs.

Compliance Committee
Internal Audit Office

GOVERNANCE

B oard of Directors, Audit & Supervisory Board,
Committees, etc.

Execution of business
Management Committee

SOCIAL

Accounting Audit

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Status of Independent Officers
Out of the eight directors of the Company, three outside directors -- Ms. Ruth Marie Jarman,
Mr. Hisashi Kobayashi and Ms. Rieko Sato -- are independent officers who satisfy the eligibility requirements set by the Tokyo Stock Exchange. Selected outside directors are individuals who can contribute appropriately to corporate governance from a more objective
standpoint and are unlikely to have conflicts of interest with general shareholders. They
are also selected based on consideration of their gender and international background.
Among our four corporate auditors, three outside auditors -- Mr. Hideaki Onishi (full-time),
Mr. Kotaro Otsuka and Mr. Katsuya Fujii -- are also independent officers who make use of
their high level of expertise and extensive experience in monitoring management, andproviding appropriate advice at the Board of Directors as necessary.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Evaluation of Effectiveness of Board of Directors
To further strengthen the effectiveness of the Board of Directors, we conduct a Survey
on Evaluation of the Effectiveness of the Board of Directors covering all officers, including
outside directors and corporate auditors. We will continuously carry out self-evaluation
surveys for directors and auditors every year, and discuss the results of the analysis at theBoard of Directors to further improve the ­effectiveness of the Board of Directors to contribute to the enhancement of corporate value.

Messages from Outside Director and Outside Auditor
Outside Director: Rieko Sato

I’m Rieko Sato. I was appointed as an outside director in June 2022.
Since joining Tokyo Electric Power Company, Co., Ltd. in 1990, I’ve
gained experience working in a variety of fields, i­ncluding technology, sales, human resources development, assistance to thoseaffected by the Fukushima Nuclear Power Station ­accident, management, and as an auditor. The start of the phased liberalizationof electric power retailing in 2000 and an incident of misconduct
in the nuclear power division facilitated the implementation of avast array of reforms. Even as my position changed, I remained
engaged in promoting those reforms. Although my experience is in a different business sector, I’m thrilled to participate in the management of the Fujibo Group, which has proactively
implemented business transformation and achieved excellent results.
To realize sustainability management, which is a key priority in the Medium-term­Management Plan “Zokyo 21-25,” every employee’s practical skills will be critical. I’d liketo visit as many frontline business locations as possible, listen to the voices of employees,
including their issues and requests, and apply this knowledge to management. I haveparticipated in internal reforms and management at a predominantly male-staffed company.
This experience, I believe, will enable me to provide valuable feedback in areas suchas diversity and human resources development. Even if my contribution may be small, I
intend to do everything in my power to ensure that the Company continues to be a firmwith which its customers prefer to do business for many more years to come.

Outside Auditor: Katsuya Fujii

After having joined Kao Soap Co., Ltd. (currently, Kao Corporation), I was put in charge of introducing and promoting investor
relations (IR) and economic value added (EVA) management
indicators, with a primary focus on accounting and finance. Inthat capacity, I encountered various challenges, which included enduring some failures, and gained support from many colleagues along the way. I served as a corporate auditor for six
years at Kao Soap affiliated companies and for four years at theparent company.
The Fujibo Group persists in taking on challenges in seeking to help realize a more
prosperous and sustainable future, as cited in its corporate philosophy. It is my hope that
I will be able to be of some help as the Group engages in business while taking on risks
inherent in such challenges. The role of a corporate auditor is that of performing audits toassess directors with respect to execution of their professional duties. I accordingly seek
to facilitate long-term growth of our corporate value by further strengthening our on-site
operations while taking on responsibility in corporate governance, which involves visiting
our respective sites of business where I engage in open and candid discussions with
our employees. I will accordingly contribute to Fujibo in terms of appropriately managing
risks, upholding compliance, and setting the stage for business development by continuing to take on challenges.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Compensation for Officers
The compensation for the Company’s directors (excluding outside directors) consists of­basic remuneration (monetary remuneration) as fixed remuneration and restricted stockcompensation (non-monetary compensation). The amount of the monetary remuneration isdetermined by the Compensation Committee under delegation from the Board of Directors.
Outside directors, who are responsible for supervising functions, shall be paid only basic
remuneration (monetary remuneration) as fixed remuneration in light of their duties.
Non-monetary compensation consists of shares of the Company’s common stock that are
subject to a certain period of restriction on transfer and events of free acquisition by the company and other terms. We have adopted the restricted stock compensation with a view to give
incentives to strive for the continuous enhancement of our corporate value and to promotefurther sharing of values between directors (excluding outside directors) and shareholders.
Compensation for directors and corporate auditors, etc.

Classification ofofﬁcers

Total amount ofcompensation, etc.
(in million yen)

Total amount of compensation, etc.
by classification (in million yen)Basicremuneration

PerformanceNon-monetary
based
compensation, etc.
remuneration, etc.

Number of
eligible officers

Directors(outside directors)

185 (20)171 (20)—

13 (—)

10 (4)

Corporate auditors(outside corporate auditors)

49 (29)49 (29)

—

—

4 (3)

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATAP olicy and Procedures for Nominating Candidates
for Directors
The Nomination Committee and the Compensation Committee, with the majority of members
consisting of independent outside directors, have been established to consider importantmatters such as decisions on the nomination and remuneration of management and directors.
The committees will review the appointment and dismissal of directors, etc., and decisions on
remuneration in an effort to improve the independence, objectivity and accountability of theBoard of Directors’ functions.
In selecting candidates for directors, we consider candidates with the character and insight
suitable for directors and those who will contribute to the sustainable growth of the Group.
For internal director roles, we select candidates who are considered to have the expertise,
experience, and capabilities in their areas of responsibility.
As for outside director roles, we select nominees from a wide range of candidates who
have abundant experience as corporate managers and a high level of insight into world
affairs, social and economic trends, etc., so that they can be expected to supervise management from a broader perspective and from an independent standpoint, further enhance thetransparency and fairness of management, and provide appropriate advice on managementfrom a medium- to long-term perspective.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Corporate Officer Skill Matrix
Fujibo’s Board of Directors is committed to achieving optimal performance from the perspective of helping the Company attain sustainable growth along with medium- to long-term gains
in corporate value by enhancing its management oversight function. This entails striking an optimal balance with respect to its overall knowledge, experience, and capabilities, harnessing
diversity, including that which involves international representation on the Board of Directors, and enlisting independent outside directors equipped with extensive experience.
As of September 30, 2023
Execution ofbusiness

Independent
officers

Name

Current position and responsibilities
in the Company

Corporate
management
and strategy

Production
technology/
Safety and quality

Sales andmarketing●●Directors●

Masahide Inoue

Representative director and chairman of the Nomination Committee
and the Compensation Committee●●

Yasuo Toyooka

Representative director and member of the Nomination Committee
and the Compensation Committee●●

Osamu Hirano

Representative director●●

Yoshimi Mochizuki●●

Tatsuya Sasaki●●

Legal affairs andrisk management

Internationality

Finance andaccounting

●
●
●
●

●

Corporate Auditors●

Ruth Marie Jarman

Member of the Nomination Committee and the Compensation Committee

●

●

●

●

Hisashi Kobayashi

Member of the Nomination Committee and the Compensation Committee

●

●

●

●

Rieko Sato

Member of the Nomination Committee and the Compensation Committee

●

●

●

Atsunori Noguchi

Full-time corporate auditor

●

●

●

●

Hideaki Onishi

Full-time corporate auditor

●

●

●

●

Kotaro Otsuka●

Katsuya Fujii

●

●
●

●

●

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Audit & Supervisory Board

Consultation

COMPLIANCE
Basic Approach to Compliance
In order to realize our corporate philosophy of “we will always support leading-edge industries by providing new technologies and products demanded by the times, and are committed to realizing a more prosperous and sustainable future for the people, society and theglobal environment,” and to achieve sustainable growth and create medium- to long-term
corporate value, we believe it is important for our directors, officers, and employees to recognize the importance of corporate social responsibility and to act with social common sensein compliance with social rules and regulations, both in Japan and abroad.

■ Compliance Management System
Shareholders’ Meeting

Board of Directors

Management Committee

Compliance Officer

Compliance Management

Corporate Ethics Hotline andOutside Consultation Service(Lawyers)

Compliance Committee
Secretariat

The Group has established the Fujibo Group Charter of Conduct to enhance the personalqualities of each employee and officer and to instill a strong sense of discipline within the
Company, with the goal of conducting corporate management that ensures not only compliance with laws and regulations, but also adherence to social norms and corporate ethics.
To promote these efforts across the Group, we have selected a Compliance Officer, formeda Compliance Committee, and appointed chiefs of compliance and compliance managers at
each business site and factory. Through these measures, we have created an organizational
structure centered on the Compliance Committee.
As a whistleblowing body to augment and enhance those functions, a corporate ethics
hotline, including an external legal consultation service provided by lawyers, has been
established.

Compliance Management Department(Legal Department)

ReportInstruction

Internal Audit OfficeInstruction

ReportHolding company
Chief of Compliance

Compliance Manager

Officers of the holding company

Audit

Consultation

Group companies
Chief of Compliance

Compliance Manager

Officers of each Group company

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Initiatives for Raising Compliance AwarenessIn order to conduct sound business activities, not only do we comply with laws and regulations, but also expand the range of subjects and scope to be observed, such as social norms
and corporate ethics. In order to prevent anticipated risks associated with business activities,
it is important to engage in compliance management and provide education to all employees
to raise their compliance awareness. As part of the Fujibo Group’s efforts to spread and raisecompliance awareness, we make sure that our employees are familiar with the “The FujiboGroup Charter of Conduct” and “Principles of Conduct,” and provide opportunities for employees to acquire correct knowledge of relevant laws and regulations (such as the Unfair
Competition Prevention Act, Trade Secret Management Guidelines, and compliance with laws
and regulations on product quality and labeling). We have also prepared a system in which
the Legal Department and other relevant departments work with external experts to respondto possible legal risks, such as compliance violations due to lack of compliance awareness or
knowledge. In addition, we strive to spread awareness of compliance by informing employees of revised laws and regulations, such as harassment prevention laws and the Work Style­Reform Act, in our internal newsletter each time we respond to internal regulations.

Compliance Education
Each business site conducts compliance awareness-raising activities (compliance programs)
on a semi-annual basis, and provides compliance education for employees where they learn
about important regulatory measures, etc. The results and issues are verified and reported to
the Compliance Committee. We provide compliance education for each level of employees,
including newly hired employees and those recently promoted to management positions. We
also hold study sessions on individual topics such as information security and bribery.

Internal Reporting System
In accordance with the “Corporate Ethics Hotline Operation Procedures,” we have established an internal “Corporate Ethics Hotline” as a point of contact for inquiries and concerns about corporate ethics and regulatory compliance. The “Corporate Ethics Hotline”
is operated not only in-house, but also in cooperation with external consultation services
which include female lawyers. This is done to create an environment in which it is easy for
employees to report any concerns, and to handle the consultations and reports fairly and

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

with respect to privacy. In accordance with the Whistleblower Protection Act, we give due
consideration so as not to disadvantage not only the callers (whistleblowers), but also those
who cooperate with them.
We are also working on a whistleblowing system that is not limited to internal use, but
throughout the entire supply chain including the employees of our business partners.

Response to Compliance Violations
In the event of an incident that may result in a potential compliance violation within theGroup, the matter is reported immediately to the relevant department and the Compliance
Committee. Following the report of the incident, the Compliance Committee responds immediately by conducting an investigation. If a compliance violation is found as a result, corrective measures and recurrence prevention policies are formulated and implemented not
only in the relevant department, but also throughout the Group to thoroughly prevent therecurrence of compliance violation. A system has been established for compliance officers
to report serious compliance violations to the Risk Management Committee.

Monitoring the Enhancement of Compliance AwarenessIn order to enhance awareness of compliance, we are working on the dissemination andthorough enforcement of the “The Fujibo Group Charter of Conduct”, establishing an organizational structure centered on the Compliance Committee and setting semi-annual targets
for awareness-raising activities such as priority legal measures to comply with important laws
and regulations.
With regards to compliance promotion efforts, each department is required to report to
the Compliance Committee on a semi-annual basis, examining the implementation of thecompliance program and any problems that have arisen. In addition, the Internal Audit Officeconducts multifaceted monitoring, including confirmation of the status of compliance withlaws, regulations and internal rules in operational audits; confirmation of the status of development and operation of control to prevent frauds and errors, such as proper segregation ofduties and IT control, in internal control assessments on financial reporting; and confirmationof whether the quality audits system, in compliance with quality-related laws and regulations,to prevent any inadequate incidents.

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Anti-Bribery Policy
The Fujibo Group recognizes bribery as a serious risk factor that undermines corporate
credibility. We focus on preventing any form of corruption, including bribery, collusion, embezzlement and breach of trust, and ensuring a sound business environment. We have­established the following Fujibo Group Anti-Bribery Policy to ensure thorough compliancewith anti-­bribery laws and internal regulations applicable in the countries and regions where
we conduct business, and to demonstrate ethical and honest behavior. We request all officers,
employees and business partners to thoroughly abide by this policy.

[Fujibo Group Anti-Bribery Policy]
1. Prohibition of bribery
The Group will not give, offer or promise bribes to any person, directly or indirectly, andwill neither accept bribes.
2. Appropriate approval procedures and post factum confirmation procedures
The Group will make payments to public officials following the appropriate approval
procedures, and conduct appropriate post factum confirmation such as monitoring thestatus of compliance with this Policy through internal audits.
3. Establishment of an anti-bribery promotion system
Through training etc., the Group will ensure full understanding and compliance with laws
and regulations relating to bribery and this Policy.
4. Bribery risk assessment and control procedures
The Group will conduct risk assessment related to anti-bribery laws and regulations, andestablish and operate risk-appropriate control procedures. When commencing transactions with a new business partner or at the time of an M&A, etc., the Group will carry out
a preliminary assessment of the counterparty according to bribery risk.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATATax Compliance
1. Basic position
The Fujibo Group’s basic policy is to comply with the tax-related laws and regulations as wellas the various rules of each country where it conducts business activities, while implementing tax measures in accordance with the transfer pricing guidelines and other rules established by the OECD (Organisation for Economic Co-operation and Development). We strive
to properly report and pay taxes throughout the Group.
2. Tax governanceIn the Fujibo Group Charter of Conduct, the Group states that it will comply with social rules,laws, and regulations both in Japan and abroad, as part of its efforts to conduct fair and soundcorporate activities and to conform to the international community. It is critical to maintainand improve tax governance in order to increase corporate value. We collaborate with Group
companies and divisions to share information about tax issues and report on tax enforcement
conditions. Through these and other measures, we strive to develop our governance system.
3. Transactions between related companies
The Group strives to ensure that transactions with overseas related parties are conducted
properly based on the arm’s length principle in accordance with OECD transfer pricing guidelines and various countries’ transfer pricing taxation principles. With an understanding of theintent of generally accepted rules and guidance related to international taxation, such as the
Action Plan on Base Erosion and Profit Shifting (BEPS), the Group pays taxes in a proper andtimely manner in accordance with each country’s tax laws and regulations, treaties and otherrules in line with its business performance. The Group will not engage in any improper tax
avoidance activity.

5. Keeping of records and maintaining ﬁnancial control
The Group will maintain records and financial control to ensure accountability in compliance with anti-bribery laws and regulations and this Policy.
In addition, the Group will periodically review this Policy and its compliance procedures,and make the appropriate revisions and improvements as necessary.

4. Relationships with tax authorities
The Group will respond to tax authorities with integrity and will maintain constructive andsatisfactory relationships with them. The Group will conduct prior consultations as needed
and will strive to conduct proper tax reporting, while working to reduce tax risk.

6. Penalties
In the event that an officer or employee violates anti-bribery laws or regulations or thisPolicy, the Group will carry out the necessary investigation properly and promptly, andwill take the appropriate punitive action against the violating party in accordance with
the internal regulations of each Group company.

5. Ensure transparency
In accordance with the provisions of the Financial Instruments and Exchange Act, the Group
discloses the amount of tax due, the reconciliation of the effective statutory tax rate, andother matters in its annual securities report.

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GOVERNANCE

ESG DATARISK MANAGEMENT
Basic Concept
The Fujibo Group strives to ensure sound management and stable earnings to achieve sustained growth by detecting various risks that may have a material impact on our business
operations at an early stage and managing them in a prompt and appropriate manner when
they become apparent. Hence, we consider risk management as an important matter of ourbusiness strategy and have set a basic policy for risk management.

Risk Management System
We are working on establishing and maintaining a system to identify and manage risk information pertaining to the entire Group. In our Risk Management System, we have established
the Risk Management Committee to collect and analyze information on various risks surrounding the Group and to take measures when risks become apparent. Depending on thenature of risk, the committee consults with internal and external experts to take action froma more specialized perspective.

■ Risk Management System
Shareholders’ Meeting

Board of Directors

Audit & Supervisory Board

Management Committee

Risk Management Committee

General Affairs Department, Human Resources
Department and Legal
Department

Corporate Planning Department
and Finance and Accounting
Department

Credit risk

Market risk

Liquidity
riskBusiness Information Tangible
risk
asset risk asset risk

Humanresources
risk

Operational riskPrimary check

Fujibo Holdings’ divisions and its subsidiaries

Internal Audit Office

Legal risk

Reputation
risk
Secondary
check

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Risk Determination Process
The Risk Management Committee addresses development of a process or system to prevent
risk occurrence while visualizing and identifying potential material risks. Specifically, we identify material risks and assess their impact and frequency of occurrence in accordance withthe following process:1. Determine materiality of risks through risk analysis;
2. Develop a plan to manage each risk;
3. Evaluate and improve the plan afterward and implement continuous measures.
By continuously implementing the PDCA cycle of countermeasures, evaluation, and improvement in the risk management process, we believe that we can respond to risks more effectively.

How to Deal with Material Risks
Based on the findings of internal audits and other factors, we identify “material risks” every year
from the perspective of necessity of measures and the degree of impact on corporate management and society. The material risks in FY 2022 are as below: For these risks, r­ espective
risk handling departments have taken necessary measures:[Material Risks]• Unusual changes in financial condition, business results and cash flows;• Risks associated with important contracts;• Dependence on particular products and customers;• Risks concerning intellectual property;• Legal restrictions;• Product liability;• Impact of natural disaster or power outage, etc.;• Impact of infectious diseases such as COVID-19;• Impairment loss on fixed assets;• Risks associated with climate change;• Risks associated with securing human resources.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATABusiness Continuity Plan
In the event of a major natural disaster, pandemic caused by an epidemic, large-scale terrorist attack or riot in Japan or overseas, war, or any other incident, accident, or problem that
seriously interferes with the Group’s business operations, we will take the following actions
to ensure the safety and security of its employees while continuing its business operations
smoothly, ensuring an early recovery and a stable supply of products and services, and supporting the recovery and reconstruction of local communities and customers. In an emergency, we have established an emergency headquarters and a system to respond quickly and­appropriately in cooperation with related departments.
Both the Polishing Pad Business and the Industrial Chemicals Business are establishingmultiple business sites, which is a key component of the business continuity plan (BCP).

● Industrial Chemicals Business
Takefu Plant (Fukui Prefecture)
Yanai Headquarters Plant(Yamaguchi Prefecture)● Polishing Pad BusinessOyama Plant (Shizuoka Prefecture)
Kozakai Plant (Aichi Prefecture)
Nyugawa Headquarters Plant(Ehime Prefecture)
Oita Plant (Oita Prefecture)
Taiwan Fujibo Precision Materials Co., Ltd.
(Taiwan)

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FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
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SUSTAINABILITY

Guidelines and Initiatives on Intellectual Property
The Fujibo Group is proactively undertaking strategic initiatives related to intellectual property
to strengthen our technological competitiveness for global expansion and to enhance ourcorporate value. Specifically, we strive to secure the superiority of our business and contribute to a sustainable society through the appropriate protection of intellectual property rights,
the proactive utilization of intellectual property rights, the pursuit of innovation in originaltechnology, and the monitoring of patent registrations in the global market.
At the same time, we are striving to promote our business in a fair way so as not to infringe
other companies’ rights from the R&D phase.
1. Organizational system
The “Intellectual Property Office” has general control over patents, utility models, designs
and trademarks among intellectual property. The Intellectual Property Office has establisheda management system to facilitate the strategic acquisition and management of our intellectual property and secures business advantages and a certain degree of freedom in researchand development to promote the strategic use of the intellectual property as sources of thecompany’s competitiveness.
2. Invention and innovation promotion system
As a system to promote the creation of intellectual property, we have established an award
system for outstanding inventions that contribute to our business, and a reward system toreturn substantial benefits for employee inventions.
3. Education system
We hold workshops for relevant departments for the understanding and establishment ofbasic ideas of intellectual property and carry out activities to encourage all employees toprotect and utilize intellectual property. Further, we are improving our education system on
intellectual property, such as inviting external experts to give practical lectures for frontline development and sales personnel on how to handle risks associated with intellectual­property and give lectures for new employees or candidates for promotion.
4. Actions against counterfeit products
Textile products, such as B.V.D., have a risk of brand damage caused by unauthorized use of
the brand by third parties. For this reason, we are resolutely taking action against the sale ofcounterfeit products of our brand and the use and description of similar trademarks throughthe monitoring of Internet sales sites.

ENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Compliance with Anti-Monopoly Act
The Group strictly prohibits any actions that violate each country’s competition laws. In orderto ensure that all employees are aware of and thoroughly comply with competition laws, wehave established a “Code of Conduct for Compliance with Anti-Monopoly Act” and provide
training in competition laws and compliance. We are also working on the establishment of acompany-wide compliance system to ensure compliance with the Anti-Monopoly Act, including the establishment of a hotline for consultation about suspicious conduct.
Furthermore, in order to prevent actual or suspected cartel activities, we have set criteria
for attending meetings with competitors and industry group meetings, and prohibit inappropriate contact and information exchange with competitors.

Information Security
The Group recognizes various information obtained in the course of our business activities as important assets. It is our responsibility to properly manage, and prevent leakageof all information assets, including information on research and development, technology
and management and confidential information about our customers and clients. In order toproperly protect and manage these important assets, we have formulated an “Information
Security Policy,” with an aim to establish and further improve our information security system.
We are attempting to prevent unauthorized access from the outside by ensuring awarenessof compliance rules relating to the protection of information, including corporate informationand personal information, under the “Information Security Policy.”
In order to maintain and manage information security, we also have established a comprehensive management system by instituting an Information Security Committee.
In terms of activities in FY2022, we increased the Group network’s resilience to cyber­attacks, provided e-learning programs to improve all employees’ IT literacy and drills on
targeted email attacks, and started developing a so-called Computer Security Incident­Response Team (CSIRT) to put a framework in place for swiftly implementing countermeasures in the unlikely event of a cybersecurity incident.

47

FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWESG DATATOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATAThe periods covered are the fiscal years ended March 31, 2020, 2021, 2022 and 2023, or as of March 31 of each year, unless otherwise noted.

Governance Data
Corporate governance
Number of directors

2020

2021

2022

Managers

2023

Number of managers (Consolidated)(ratio)FY2019FY2020

FY2021

FY2022

Total

162

139

153

151

Male

151

127

140

138

Female11(6.8%)

12(8.6%)

13(8.5%)

13(8.6%)

Total

8

8

8

8

Male

7

7

6

6

Female1122

Number of outside directors (ratio)

3(37.5%)

3(37.5%)

3(37.5%)

3(37.5%)

Number of women at a general manager level or higher(ratio of female employees to all employees at a generalmanager level or higher)

3(5.1%)

4(8.5%)

4(8.0%)

4(8.3%)

Number of non-Japanese directors (ratio)1(12.5%)

1(12.5%)

1(12.5%)

1(12.5%)

Ratio of females at a section manager level(ratio of females to all employees at a section manager level)8(7.8%)

8(8.7%)

9(8.7%)

9(8.7%)*As of June 30 of each year

Number of employees by employment type
Number of employees by employment type(Consolidated)

Social Data

* The number of temporary employees is the annual
average.

Employee composition
Number of employees (Consolidated)

FY2019Total

FY2020

1,251

1,156

FY2021

FY2022

1,195

1,273

Number of employees by gender(Consolidated) (ratio)

FY2019FY2020

FY2021

FY2022

Total

1,251

1,156

1,195

1,273

Male

771

732

761

832

Female480(38.4%)

424(36.7%)

434(36.3%)

441(34.6%)

Number of non-Japanese employees (Consolidated)

461

399

400

391

*Excluding temporary employees

Reemployment of retirees

Employment of people with disabilities*Domestic consolidated subsidiaries

Number of employees with disabilities (ratio)*As of June 1 of each year

FY2022

1,156

1,195

1,273

Temporary

155

123

126

172

FY2019FY2020

FY2021

FY2022

Total

32

53

77

Male

25

44

68

83

7
(21.9%)

9(17.0%)

9(11.7%)

20(19.4%)

FemaleNumber of reemployed retirees (ratio)

FY2021

1,251*Domestic consolidated subsidiaries* Including mid-career hires

FY2020Regular

Recruitment

Number of hires (ratio)
Diversity

FY2019FY201912(75.0%)

2020
15(1.6%)FY202016(88.9%)

2021
16(1.9%)FY2021
9(69.2%)

2022
15(1.7%)

103

FY202224(88.9%)

2023
18(1.9%)48

FUJIBO HOLDINGS, INC. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTSCORPORATE OVERVIEWTOP MESSAGE

SUSTAINABILITYENVIRONMENTSOCIAL

GOVERNANCE

ESG DATA

Environmental Data
Employee data

FY2019*Domestic consolidated subsidiaries

Average age of employees

Average years continuously
employed

FY2020

FY2021

Energy and greenhouse gas emissions

FY2022*Domestic and overseas consolidated subsidiaries

Total

41.8

41.6

41.8

41.2

Male

42.0

41.6

41.6

40.9

Female

41.1

41.8

42.3

42.2

Total

18.0

17.4

17.3

16.0

Male

18.1

17.4

17.0

15.8

Greenhouse gas emissions(thousand tons)

17.2

17.6

18.2

17.2

*Wages of female employees as apercentage of those of male employees

All employees

50.8%

54.0%

57.3%

60.3%

Regular

61.9%

63.6%

68.5%

72.0%

Electricity consumption(thousand kWh)

Temporary

40.1%

53.3%

51.4%

49.8%

Three-year new-graduate
employee retention rate

Total

73.1%

60.9%

94.4%

96.3%

Male

76.2%

60.0%

92.3%

95.8%

60.0%

66.7%

100.0%

100.0%

6.2%

6.6%

3.4%

3.8%

Female*The retention rate for new graduates hired three
Femaleyears ago as of the end of each fiscal year.)

Total turnover rate

*The ratio of those in Japan resigning during the year against the numberof employees in Japan as of the end of each fiscal year

Work-life balance

FY2019*Domestic consolidated subsidiaries

Number of days of paid leave given

FY2022

20.4

19.7

43.3%

42.5%

47.7%

50.6%

1
(5.3%)

3(17.6%)

3(20.0%)

9(45.0%)

Male0(0.0%)

1(6.7%)

0(0.0%)

3(18.8%)

Female1(50.0%)

2(100.0%)3(75.0%)

6(150.0%)

Total

Total

3

3

1

3

Male

0

0

0

1

Female33

12

Employees’ monthly average overtime hours

9.2

10.7

9.2

8.0

Employee health

FY2019FY2020

FY2021

FY2022Stress check participation rate

98.9%

98.3%

98.6%

98.6%

Percentage of individuals with high stress

12.8%

12.7%

14.7%

10.8%

FY2021

FY2022

57.6

55.7

60.1

Scope 1

22.2

21.9

24.8

27.3

Scope 2

35.4

33.8

35.3

35.5

62.9

–

–

124.5

128.7

Total

914.4

883.4

928.5

948.9

Total

67,227

66,20470,936

71,873

Water resources

FY2019*Domestic consolidated subsidiaries

FY2020

FY2021

FY2022

Water resources input(thousand m3)

Total

1,756

1,871

2,059

1,832

Water resources discharge(thousand m3)

Total

–

–

1,635

1,372

Waste and chemical substances

20.8*Average of all employees and excluding paid leave carried forward

Number of employees who work
shorter hours for childcare

FY2021

22.1

Rate of annual paid leave taken
Number of employees who tookparental leave(Parental leave uptake rate)

FY2020

FY2020

Scope 1 + Scope 2

Scope 3
Energy consumption (TJ)

Gender wage gap

FY2019FY2019*Domestic consolidated subsidiaries

Waste discharge(thousand tons)

FY2020

FY2021

FY2022

Total

44.5

44.9

48.2

47.9

Outsourced

26.2

24.7

20.5

18.8

(Of which, recycled)

–

–

12.0

9.0

(Of which,sent to landfill)

–

–

8.5

9.7

Internally processed

18.3

20.2

27.6

29.1

6.3

7.7

24.8

21.8

Soot and dust emissions (tons)
SOx emissions (tons)

8.0

10.9

3.9

4.1

NOx emissions (tons)

30.2

32.7

10.1

14.8

Amount of PRTR substances treated (tons)

8,651

8,448

8,061

7,812