Sustainability Report2023

“Creating Inspiring Materials in Earnest”
Tayca Group has more than a century of history since its founding, throughout which we have based ourapproach to manufacturing on integrity.
The testimony of the better solutions we have realized with the “sources of excitement” born from sincerely
facing challenges that arise, through repeated trial and error, without compromise, thinking and devising, we call“inspiring materials.”
Without a doubt, this forms our identity.
Tayca Group will continue to create inspiring materials in order to “bring dreams and smiles to the world.”

CONTENTS
03 About Tayca Group
05 President’s Message
07 Consolidated Financial Highlights
09 Tayca Group Products

11 Management Strategy
13 Business Strategies

15 Sustainability
17 Materiality (Important Issues)of the Tayca Group19 Inspiring Materials

01

TAYCA CORPORATION｜Sustainability Report 2023

23 Environment
31 Social
39 Governance

Editorial Policy
We will share sustainability information of Tayca Group in an

Reporting Period

accessible manner, organizing matters we consider important to all

FY2023 (April 1, 2022 to March 31, 2023)
Certain initiatives that fall outside of this period are also
included.

of our stakeholders and to Tayca Group, from environment (E), social(S), and governance (G) perspectives, in the form of Sustainability
Report.
We hope that this report can function as a communication tool withall of our stakeholders to assist their understanding of Tayca Group.

Reporting Scope
Tayca Corporation and its consolidated subsidiaries(in Japan and overseas)

Published
August 2023

TAYCA CORPORATION｜Sustainability Report 2023

02

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

About Tayca Group
Tayca Group, centered on Tayca Corporation, comprises companies responsible for the trade, warehousing, and engineering
sectors in Japan, together with companies in the USA, Thailand, and Vietnam that handle manufacturing and sales of electronic
industry materials and surfactants, all operating under a common Management Philosophy, Management Policies, and Corporate
Slogan.
Tayca Corporation, our core company, was founded in 1919 and therefore has over a century of history, over which time it hasestablished an approach to manufacturing focused more than anything on integrity. Tayca Group values integrity, and we havebeen sincerely dealing with customers and society, and have repeatedly conducted business activities to bring dreams and smiles
to people around the world by providing inspiring products and services that exceed their expectations.
We will actively promote initiatives for the realization of a sustainable society and to address materiality (important issues), bywhich we aim for enhanced corporate value and sustainable growth in order to be a company that is trusted by all of its
stakeholders also for the next 100 years.

Management
Philosophy

1. Full participation management
Develop an open management structure that is based on full participation by all members of
the global group to promote unity and efficiency in corporate management.

2. Increased social contributions and corporate value
Creating inspiration that responds to the social needs and demands of customers to increase
our social contribution and corporate value.

Management
Policies

Management Philosophy and Management Policies

1979

1919

1949
May

Stocks were listed on the Tokyo
and Osaka stock exchanges

December

Teikoku Synthetic Fertilizer Co., Ltd.* was founded inpresent-day Funamachi, Taisho-ku, Osaka-shi

Celebration held tocommemorate thecompany’s 60th
anniversary

5. Information disclosure
Emphasize dialogue with stakeholders for timely and appropriate information disclosure.

Corporate
SloganAugustCelebration held tocommemorate thecompany’s 70th anniversary;company name changed to
Tayca Corporation*Company name at the time of founding“Creating Inspiring Materials in Earnest”

2006

2014

2022

Kumayama Factory wascompleted (Akaiwa-shi,
Okayama Prefecture); surface
treatment business began
production

TAYCA (VIETNAM) CO.,LTD.
was established in Dong Nai,
Vietnam to manufacturesurfactantsPiezoelectric Single Crystal
Mass-Production Factorycompleted within Osaka Factory

September

February

TAYCA (VIETNAM) CO.,LTD.

60th anniversary celebration(Hotel Plaza)

Osaka Factory launched shortly
after the company’s founding

Recognize environmental protection and safety assurance as our social missions with the goalof achieving harmony between our corporate activities and global environmental protection.

Ensure regulatory compliance for fair and proper management.

1989

November

3. Harmony with the global environment

4. Ensure complianceTayca Group formulated its Management Philosophy and Management Policies in April 2020 to express the social mission it
should fulfill and its fundamental approach in its actions in view of the coming 100 years. This philosophy and these policies
incorporate our intention to aim for the realization of a sustainable society and for increased corporate value, based on the pillars
of inspiring our customers and creating new value that takes the global environment into consideration, through the concentrated
strength of all our employees and the power of chemistry.
At the same timing, we also formulated our Corporate Slogan. This expresses the attitude of Tayca Group to always believe inmaking things that inspire our customers and to offer things that they will want.

History of Tayca Group

Tayca Group creates materials that impress customers with the power of chemistry
and delivers dreams and smiles to the world.

Kumayama Factory
Left: Factory building
Right: Office building andresearch laboratory

Notice of construction plan
approval (Osaka Asahi Shimbun
newspaper)

March

Named in METI’s Global
Niche Top Companies
Selection 100 List

January

Piezoelectric Single Crystal
Mass-Production Factory

AprilTransitioned from the First
Section of the Tokyo Stock
Exchange to the Prime Market due
to a review of the Tokyo Stock
Exchange’s market sections

1920

1951

1983

1995

2001

2018

Osaka Factory (Funamachi, Taisho-ku,
Osaka-shi) was completed and began
production of superphosphate fertilizers
and lead-chamber sulfuric acid

Production oftitanium dioxideat Okayama
Factory began

Production of microtitanium dioxide at
Okayama Factory began

Osafune, Okayama Factory(Setouchi-shi, Okayama
Prefecture) was completed
along with thecommercialization of thesurface treatment business

TAYCA (Thailand) Co.,Ltd.
was established in Chonburi,
Thailand to manufacturesurfactants

TRS Technologies,Inc. (Pennsylvania,
USA) made a subsidiary of Tayca inorder to expand the piezoelectricmaterials business

November

April

1938

1941

Equipment was installed in Osaka factory
to produce sulfuric acid by the Lurgi
Contact Process, and production ofconcentrated sulfuric acid began

Construction began of
Okayama Factory(Nishikozai, Higashi-ku,
Okayama-shi)

October

July

1961
June

Production of surfactants
at Osaka Factory began

November

OctoberJanuary

2019

July

December

Construction of Osaka Factory
Research Laboratory completed(March 1, 1958)

TAYCA (Thailand) Co.,Ltd.

The Company celebrated
the centennial of its
founding

Osafune, Okayama Factory03

TAYCA CORPORATION｜Sustainability Report 2023

TAYCA CORPORATION｜Sustainability Report 2023

04

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernancePresident’s Message

Aiming for Harmony with the
Global Environment andEnhanced Corporate Value
Tayca Group, founded in 1919, formulated a long-term management vision,
MOVING-10, in FY2021, based on our management philosophy “Tayca Group
creates materials that impress customers with the power of chemistry anddelivers dreams and smiles to the world,” to start a new chapter in our history.
It positions three elements—environment, social, and governance, that is
ESG, as our most important issues, while in our management strategy, we aim
to build a business that creates economic and social value, and to actively
promote sustainability activities, while harmonizing our relationships withstakeholders and the global environment. At the same time, we believe thatstrengthening respect for human rights and governance are indispensable as
the foundation to support this, and we therefore established the Tayca Group
Sustainability Basic Policy, which we are now implementing.

Shunji Idei

President, CEO & Representative Director

Review of FY2023
In FY2023, with the relaxation of restrictions on activities imposed due to COVID-19, we envisaged a year of hope as
cosmetic and other industries returned to normal. But Tayca Group suffered significant impacts from substantialchanges in the external situation, including the impact of Russia’s invasion of Ukraine, which caused a sharp rise in
prices of raw materials and fuel, and the interest rate gap between Japan and other countries, which led to extreme
depreciation of the yen.
Meanwhile, with worldwide attention focused on climate change and other social issues, it gave us an opportunity
to review materiality for the Tayca Group.
Within our business, we constructed a new factory and restructured specialized divisions in the life sciences andenvironmental energy fields, two business fields that play a key role for the next generation. Going forward, we will
launch full-scale operations of these factories we proactively invested in, while we will also continue making newinvestments with the intention to improve profitability, leading to further growth.

Resolving Social Issues with Our Unique Technologies
Since our founding, we have continued our journey aiming to be a company that is essential to society. This spirit hasremained unchanged to the present, as we focus on research and development into products that enrich people’s lives
and contribute to preservation of the global environment. An example are cosmetics ingredients that use micro titanium
dioxide and micro zinc oxide, for which we were listed in METI’s Global Niche Top Companies Selection 100 List in 2014.
These are products that not only protect people’s skin from ultraviolet rays, but also reduce damage to coral reefs andother marine resources. In addition, infrared-refracting titanium dioxide is a product we developed as a global warming
countermeasure. Furthermore, in 2020, we were included in the Global Niche Top Companies Selection 100 List for thesecond time related to piezoelectric materials, with which we have made great advances. Piezoelectric materials aremainly used in probes for medical ultrasound image diagnosis, a medical field expected to grow in the future. We hope tothereby contribute widely and deeply to addressing basic issues of people’s health.
Tayca Group’s strength is in the highly unique technologies it has developed by continuing to respond directly andhonestly to its customers’ needs. Leveraging this strength, we will further accelerate growth as a leading global nichecompany, and continue capital investment in R&D in our ongoing endeavors to evolve technologies that will contribute to
the resolution of social issues.

05

TAYCA CORPORATION｜Sustainability Report 2023

Toward the Achievement of Carbon Neutrality
Tayca Group identifies climate change response as an important issue for management, and believes that reducing
emissions of CO2, a greenhouse gas, is a particularly crucial matter. In this context, we set company targets to reduceenergy-derived CO2 emissions by 50% by FY2031 (compared with FY2014 levels), and to achieve carbon neutrality by
FY2051. As measures to achieve this, we are advancing fuel conversion to low-carbon energy and have begun replacing
coal boilers with LNG boilers, which are expected to start full-scale operation in 2025. In addition, we are striving tofurther reduce emissions through a combination of measures including rationalization of manufacturing processes,
updating to power-saving, high-efficiency equipment, and the transition to production of environmentally friendly
product lines.

Acceleration of Human Resource Investment
Toward the achievement of MOVING-10, we respect the diversity of each employee, and believe in the necessity ofproviding a workplace environment where all employees can thrive, and in investing to nurture human resources.
Recently, we have made efforts in childcare support in particular, introducing a childcare support system in FY2022
and striving to create a work environment where it is easy to take childcare leave. We are seeing clear results fromthese efforts, including the ongoing achievement of a 100% return to work rate for employees who took childcare leave,
and an increase in men taking childcare leave.
Our new personnel evaluation system was launched in April 2023. We are clarifying the role expectations of eachposition, boosting employee motivation, and establishing an environment where all employees can vigorously andproactively engage in their work.
In addition, we are driving two large-scale projects aimed at nurturing employees with new ideas and energy who
will drive the company. The first is our DX Promotion Project, which aims to introduce new technologies to improve
work efficiency and productivity. The second is our Management Talent Development Project, to nurture humanresources who hold a company-wide, management perspective. Both projects are comprised of mid-level members
who will lead the next generation.
Through initiatives such as these, we are accelerating human resource development based on key concepts of theability to think for themselves, motivation to always tackle new endeavors, and a mentality that does not fear failure.

Enhancing Corporate Governance
Enhancing of corporate governance is indispensable for swift and appropriate decision-making, and to maintain andimprove transparency and soundness of management. Tayca Group has an Audit & Supervisory Committee, and has
appropriately appointed independent outside directors in its efforts to strengthen the audit and supervisory functions of
the Board of Directors.
Furthermore, we clarify the division of management decision-making and the supervisory and business executionfunctions, and have established a management system that can respond to rapid changes in the business environment
in a flexible and agile manner. In addition, we are striving to boost the fairness, transparency, and objectivity of theappointment of directors and executive officers, and procedures relating to remuneration, etc., and to enhance
governance.
Corporate governance is the basis for Tayca Group to contribute to the realization of a sustainable society throughits corporate activities, and going forward, we will continue to strengthen it in order to build a more robust managementfoundation.

To All of Our Stakeholders
FY2024 is the final fiscal year in our mid-term management plan, MOVING-10 STAGE 1. In order to continue to be an
essential company, we will accelerate initiatives for the resolution of materiality as identified by Tayca Group, and growtogether with all of our stakeholders, with the aim of resolving social issues and enhancing our corporate value.
We look forward to your continued understanding and support.

TAYCA CORPORATION｜Sustainability Report 2023

06

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceConsolidated Financial Highlights
Functional Chemical Business
Net Sales

Operating Profit(Billion yen)(Billion yen)

60
50

6

54.7
47.3

40
30

3

20

2

10

1

0

0
2019

2020

2021

5.8

2022

2023

4.2

19.4

2.2

2

0
2020

2021

2022

2023

0.9

2021

2022

0
2019

(FY)

0.9

2020

2021

2022

2023

2019

(FY)

2020

2023

(FY)

●

Net sales of general usage titanium dioxide increased year on year, mainly due to a gradual recovery in demand in thedomestic market, although export sales volume declined due to factors including the lockdowns in China.

●

Both sales volume and net sales of specialty use micro titanium dioxide, micro zinc oxide, and surface treatment
products increased year on year due to recovery in overseas sales, primarily to the United States.

5

5.7

5

4.7

4

4.0

3.8

4.1

4

Electronic Material and Basic Chemical Business

3

2.7

2.8

2

2

2.9

1.9

1

1

Net Sales

Operating Profit(Billion yen)(Billion yen)

30

2.5

26.2

25

0

0
2020

3.3

3

1

(Billion yen)

2019

3.5

22.8

5

(Billion yen)

3

24.5

10

Profit Attributable to Owners of Parent

6.0

24.4

4

27.1

15

2.9

Ordinary Profit
6(Billion yen)

20

3.6

2019

(FY)

(Billion yen)

25

4

38.4

Operating Profit

30

5

46.3

45.4

5.8

Net Sales

2021

2022

2023

2019

(FY)

2020

2021

2022

2023

20

(FY)

21.5

19.5

2.0

22.1
17.7

2.0

2.3

2.2
1.8

1.6

1.5

15
1.0

10

0.5

5

Overview by Segment

0

Composition of Net Sales by Segment
Other
●

2.5%

Transportation and storage ofindustrial chemical products, etc.

Electronic Material andBasic Chemical Business

Functional Chemical Business

48.0%

Piezoelectric materials
Electroconductive polymers● Surfactants● Sulfuric acid
● Manufacture and sale of non-polluting
anti-corrosive pigments, etc.
●●

07

TAYCA CORPORATION｜Sustainability Report 2023

0
2019

49.5%
FY2023

Net sales

54.7billion yen

Titanium dioxide
Micro titanium dioxide● Micro zinc oxide● Manufacture and sale of surface
treatment products, etc.

2020

2021

2022

2023

(FY)

2019

2020

2021

2022

2023

(FY)

●

Net sales of surfactants increased year on year as a result of increased sales at overseas consolidated subsidiaries andsales price revisions, despite a decline in sales volume due to a drop in sales for industrial applications.

●

Sales volume and net sales of conductive polymers and related products decreased year on year due to sluggish
demand for ICT equipment and the delayed development of 5G infrastructure.

●

Net sales of pollution-free anti-corrosive pigments increased year on year due to sales price revisions, although sales
volume decreased as a result of sluggish demand for automotive paints.

●

Net sales of piezoelectric materials increased year on year as a result of steady sales to overseas customers, including
overseas consolidated subsidiaries, despite inventory adjustments by domestic medical equipment customers.

●
●

Other
●

Net sales in the warehousing business increased as a result of acquisition of new customers and price revisions;however, overall net sales decreased year on year primarily due to a decrease in transportation business revenues.

TAYCA CORPORATION｜Sustainability Report 2023

08

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceTayca Group Products

Tayca’s Products Transform into Various Forms
to Support People and Society

Titanium dioxide

Surfactants

support the daily lives of people and society while demonstrating their unique functions in familiar places
such as homes and offices. They also contribute to the environment.

Surface treatment products

Powder cosmetics

Our titanium dioxide is used throughout
living spaces as a high-quality white
pigment for paints, printing inks, plastics,
papers, synthetic fibers, and otherproducts.

The actions of surfactants in cleaning,emulsification, dispersion, solubilization,
and wetting are utilized for a wide range ofhousehold products such as detergent,
toothpaste, and cosmetics as well as
industrial products.

The Tayca Group offers a diverse product lineup with different functions and applications. These products

Full-color photocopiers

Infrared-refracting titanium dioxide
Sebum adsorption powder
Sericite

Surface treatment products
for photocopy toner

Shampoo and detergent

Electroconductive polymers

SurfactantsComputers
Electroconductive polymers

Exterior walls and roofs

for capacitors essential
for powering computers

Titanium dioxide
Infrared-refracting titanium dioxide
Photocatalytic titanium dioxide

Photocatalytic titanium dioxide
Photocatalytic titanium dioxide uses
ultraviolet rays from natural light, together
with water and oxygen—all of which areclean energy sources—to generate anoxidizing effect that decomposes andeliminates harmful organic substances.
This function can also be used for
deodorizing and antibacterial applications.

Tayca isA lways
Nea rbyAutomotive paints

Infrared-refracting titanium dioxide canblock the near-infrared rays contained innatural light, helping to reduce the rise insurface and interior temperatures, reduce
the heat island effect, and increase theefficiency of air conditioners in thesummer when painted on. It is used in road
paints, architectural exterior paints, andautomotive paints.

Sunscreen cosmetics
Paved roads
Infrared refracting
Titanium dioxide(non-polluting anti-corrosive pigments)
Aluminum triphosphate is widely used inprimer paints as an environmentallyfriendly pigment that prevents rust anddoes not contain heavy metals.

TAYCA CORPORATION｜Sustainability Report 2023

Electroconductive polymers are used incapacitor, antistatic, and touch panel fields,
organic electroluminescence (EL), andorganic thin-film solar cells by taking
advantage of their ability to conduct
electricity through doping. A great leap
forward is expected in these applications in
the future.

Piezoelectric materials
Piezoelectric materials are used indiagnostic ultrasound equipment that cansafely examine the inside of the bodywithout using X-rays, etc., during
pregnancy checkups and heart andabdominal diagnoses. They are also usedin non-destructive testing equipment andsilicon wafer cleaning equipment for
semiconductor manufacturing, which can
precisely clean minute contaminants withminimal damage.

Tayca products are involved ina variety of fields,from daily use household products
to medical equipment.

Medical equipment

Aluminum triphosphate

09

Tayca products arealways being usedsomewhere around you.

Titanium dioxide
Non-polluting anti-corrosive pigments

Infrared-refracting
titanium dioxide

Surface treatment products are functional
powders made by surface treating fineparticle products with organic compounds.
They are used in a wide range ofapplications such as cosmetics, recording
materials, and resins.

Micro titanium dioxide
Micro zinc oxide
Surface treatment products

Fertilizer for fields
and flower bedsPiezoelectric materials
for medical ultrasoundmachine probes

Sulfuric acid

Micro titanium dioxide, micro zinc oxide

Sulfuric acid

These products are used mainly in cosmetics
applications to protect the skin from ultraviolet rays,
but are also used in industrial applications such as
automotive paints.

As a fundamental chemical, sulfuric acid is used in all areas of industry, from chemicalindustries such as pharmaceuticals, batteries, dyes, and fertilizers to heavy industries, such as
metal and steel. In recent years, demand for sulfuric acid has been increasing both in Japanand internationally, including for the cleaning of integrated circuits in household appliances.

TAYCA CORPORATION｜Sustainability Report 2023

10

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceManagement Strategy

Accelerating Portfolio Shift Toward 2030 andContributing to Solving Social Issues through Businessfirst milestone toward achieving the “MOVING-10” target for FY2030. We are carrying out initiatives toactively promote each of the ESGs, expand our business, and strengthen our earnings base.

Long-term Management Vision

Mid-term Management Plan (FY2021 - 2024)

MOVING-10

MOVING-10 STAGE1

Basic Philosophy

Basic Philosophy

Tayca Group’s management philosophy is “We will use the power of chemistry to create the source of inspiration and bring dreams
and smiles to the world.” We are working to solve social issues through our business activities. We have begun a new history in
FY2021, the 101st year since the establishment of the Tayca Group. As such, we have formulated our long-term management
vision “MOVING-10” with a view to the next 10 years in order to realize our management philosophy. We will work earnestly withcustomers to realize better solutions through uncompromising trial and error and focus on profitability more than ever under our
Basic Policy of “Creating Inspiring Materials in Earnest.” In doing so, we will accelerate our portfolio shift from general-purpose
products to specialty products and create a leading global niche products. Through this Basic Policy, we aim to expand ourbusiness, strengthen our earnings base, and contribute to solving social issues to sustainably increase our corporate value.

We formulated the “MOVING-10 STAGE1” mid-term management plan starting in 2020 to realize our “MOVING-10” long-term
management vision. Various COVID-19 restrictions have been gradually eased and the economy has shown signs of a pickup.
However, the outlook remained uncertain due to soaring raw material and fuel prices, as well as concerns of an economic
slowdown caused by the prolonged situation in Ukraine and monetary tightening in Europe and the United States among otherfactors. Under these circumstances, the Tayca Group will come together to grow even further by focusing on expansion throughinnovation and the creation of new materials based on activities that place greater emphasis on profitability in FY2024, the final
year of the “MOVING-10 STAGE1” mid-term management plan. In doing so, we will strive to expand our business and strengthen
our earnings base in order to realize our long-term management vision.

No distance from users
Global expansion● Solution proposals● Open innovation

Key Activities●●

Deep market
cultivation
Creation of
inspiringmaterials

Further growth

Shift to a portfolio centered on specialty product sales
Specialty
products
Generalpurposeproducts

32%

Generalpurposeproducts

FY2021

Basic Policy●

Shift management resources to growth businesses
where we have strengths●

Create leading global niche products●

Transform business structure in response tochanging environment●

11

The Tayca Group has formulated “MOVING-10 STAGE1,” a mid-term management plan that serves as the

Leverage group synergies

TAYCA CORPORATION｜Sustainability Report 2023

Specialty
products

53%

FY2030●Further expand Functional Chemical and Electronic Material businesses (accelerate portfolio shift)●

Cultivate and launch the environmental energy field (second pillar to support the next generation)●

Promote the creation of new materials (keywords: “niche market” x “growth areas”)●

Promote business efficiency (improved productivity, automation)●

Promote human resource development (diversity, work style reform)●

Enhance corporate value by promoting SDGs management

Target Management Indicators (Consolidated)
Targets for the Group as a whole (Final fiscal year: FY2024)

Net sales

55

Target Management Indicators

billion yen

Operating profit

Operatingprofit ratio

ROE

7.5

14 %

9%

billion yen

EBITDA11

billion yen

We have set the following management indicators as goals of“MOVING-10” (FY2030).

FY2010

FY2020

FY2030Operatingprofit ratio

5%

13%

15% or higher

ROE

3%

8%

12% or higher

TAYCA CORPORATION｜Sustainability Report 2023

12

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceBusiness Strategies
Business Strategies by Field

Sites in Japan

Life Sciences Field

We will shift management resources to the fields of cosmetic ingredients and electronic materials, which
are growth businesses, to maintain and further expand our position as a comprehensive manufacturer ofcosmetic ingredients and a top manufacturer in the piezoelectric market for medical products.
●

For functional fine particle products, we are aiming to become a comprehensive manufacturer of cosmetic ingredients bydeveloping new materials, working together with other collaborating companies, and utilizing our Tokyo Creation Laboratory to
collaborate with downstream businesses. We will accomplish this by further accelerating global expansion throughstrengthened material development capabilities, improved formulation technology, GMP compliance, and branding promotion.

●

For piezoelectric materials, we will maintain our position as global niche top by accelerating sales of conventional composite
materials as well as single crystal materials, expanding into peripheral materials and other areas, and promoting technologicalinnovation with our affiliate company TRS Technologies, Inc.

Applicable Sites

Head Office
Tayca Trading Co., Ltd.

Kumayama Factory
Okayama Research Laboratory,
Kumayama Annex●

Surface treatment products,
functional fine particle
products

Tokyo BranchTokyo Creation Laboratory
JAPAN SERICITE CORPORATIONHead Office, Tokyo Branch, Okayama Factory/Okayama Research Laboratory,
Electronic Materials Department
JAPAN SERICITE, TFT, TRS

Environmental Energy Field

We will make the environmental energy field the second pillar of the future of the Tayca Group by aiming
to develop, nurture, and launch products with higher functionality using the Tayca Group’s proprietary
technologies. We will accomplish this by creating products in fields where the core technologies of the
Tayca Group can be utilized, such as environmental conservation catalysts, storage battery materials,
and electroconductive polymers.
Applicable Sites

Kumayama Factory,
Osafune Factory●Surface treatment products●

Titanium dioxide, functional fineparticle products, etc.

Osaka Factory/
Osaka Research Laboratory
Electronic Materials Department
TFT Corporation●

Head Office, Tokyo Branch, Okayama Factory/Okayama Research Laboratory, Osaka Factory/Osaka Research Laboratory

Chemical Field

Okayama Factory/
Okayama Research Laboratory

Tayca Warehousing Co., Ltd.
Tayca M&M Corporation

Surfactants, sulfuric acid,anti-corrosive pigments,
electroconductive polymers,piezoelectric materials, etc.

Overseas Sites

We will strive to maximize profits by reducing costs, focusing on profitability-oriented sales, andstrengthening cooperation with overseas affiliates in Thailand and Vietnam as well as by thoroughly
reducing costs through more efficient production.
Applicable Sites

Head Office, Tokyo Branch, Okayama Factory/Okayama Research Laboratory, Osaka Factory
Tayca (Thailand), Tayca (Vietnam)

TAYCA (Thailand) Co.,Ltd.
●

Surfactants

Industrial Services Field

The industrial services field is an important business field that supports the trading company functions,logistics functions, and facility maintenance functions of key industries. We are aiming to develop eachbusiness while collaborating with all business fields by utilizing the Tayca Group’s network and its
technological capabilities and functions as a manufacturer.
Applicable Sites

13

Head Office, Tokyo Branch, Okayama Factory, Osaka Factory
Tayca Trading, Tayca Warehousing, Tayca M&M

TAYCA CORPORATION｜Sustainability Report 2023

TAYCA (VIETNAM) CO.,LTD.
●

Surfactants

TRS Technologies,Inc. (U.S.)●

Piezoelectric materials

TAYCA CORPORATION｜Sustainability Report 2023

14

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

Sustainability

We will Contribute to the Realization of a
Sustainable Society by Creating Value
through Our Business Activities

Corporate sustainability promotion is becoming increasingly important toward realizing a sustainable

Basic Philosophy

Sustainability Promotion System

The Tayca Group has provided a variety of chemical industrial products that meet the needs of the times and society since it wasestablished in 1919.
We have established the management policies of “full participation management,” “increased social contributions and corporate
value,” “harmony with the global environment,” “thorough compliance,” and “information disclosure.” We comply with the Group Codeof Conduct to promote the establishment trustworthy corporate management and realization of our management philosophy.
The Tayca Group has incorporated the promotion of sustainability as an important management theme in our long-term
management vision and mid-term management plan, in order to contribute to the realization of a sustainable society. We have also
formulated a Basic Policy and promotion system to create value through business activities based on our management philosophy
and to contribute to the development of a sustainable society.

society. The Tayca Group will contribute to the realization of a sustainable society by actively working tosolve social issues from the perspectives of environment (E), social (S), and governance (G) and creating
value through our business activities.

Basic Philosophy
In the process of promoting sustainable corporate activities, there are many issues common to the entire company, such as risks
and opportunities due to climate change, and we have established the “Sustainability Promotion Committee” to address theseissues, as it is necessary to strengthen our efforts across divisions and departments.

Sustainability Promotion Committee● Sets targets for the Tayca Group’s sustainability promotion activities.

Basic Policy
Tayca Group’s management philosophy is “We will use the power of chemistry to create the source of inspiration and bring
dreams and smiles to the world”. We have been earnestly dealing with customers and society, and have repeatedly conductedbusiness activities to bring dreams and smiles to people around the world by providing inspiring products that exceed their
expectations. Based on this management philosophy, we have established and put into practice the “Tayca Group Sustainability
Basic Policy” as follows.

Role● Verifies the status of efforts by each division and links them to the next actions.
● Reports to the Board of Directors and the Management Committee, and discloses information on thestatus of activities.

Organization Chart
Board of Directors

1. Building Businesses that Create Economic and Social ValueThe Tayca Group’s business activities are to be trusted and valued by society, and we aim to pursue sustainability throughinnovation and problem solving.
● We strive to maintain and improve product quality and safety.

Management Committee●

Sustainability Promotion Committee

2. Relationship with Stakeholders
We will build a stable relationship of trust with our shareholders and investors through timely and appropriate information
disclosure and dialogue.
● With customers and business partners, we will provide products and services that prioritize safety and security, and work
toward long-term mutual prosperity.
● We will respect the culture and customs of local communities and society, both within and outside of Japan, and develop
relationships of mutual trust.
● We will place the highest priority on health and safety for our employees and strive to improve the working environment. In
addition, we will actively develop personnel systems and education and training systems for skill development.
●

3. Harmony with the Global Environment●●

We will strive to prevent global warming, reduce environmental impact, and make effective use of resources.
We will continue to develop environmentally friendly products.

4. Respect for Human Rights●●

We will respect human rights and diversity and promote an equal and rewarding personnel system and workplace.
We will conduct our business activities with respect for human rights and diversity throughout our supply chain.

Chairperson

Director in charge of Environment & Quality Control Dept.

Department
in charge

Environment & Quality Control Department

Committee
Members

General Managers of the Corporate Planning Department,
General Affairs Department, Human Resources Department,
Sales Department, Tokyo Branch, Purchasing Department,
Osaka Research Laboratory, Okayama Research Laboratory,
Osaka Factory, Okayama Factory, Kumayama Factory, andElectronic Materials Department

The chairperson of the committee shall report on the activities of the committee to the
Executive Committee and the Board of Directors, and matters directed by the Executive
Committee or the Board of Directors shall be thoroughly directed to the relevant
departments by the departments in charge.

5. Compliance with Governance●15

We will conduct fair and transparent business activities in compliance with international rules, laws, and regulations, andrecognize our social responsibility through thorough compliance.

TAYCA CORPORATION｜Sustainability Report 2023

TAYCA CORPORATION｜Sustainability Report 2023

16

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceMateriality (Important Issues) of the Tayca Group

Basic Philosophy
The Tayca Group has identified materiality (important issues) in order to become a company that is trusted by its stakeholders.
We will achieve sustainable growth by contributing to the environment and society through these initiatives.

Materiality Identification Process
The Tayca Group has identified “Tayca Group Materiality” to address as management in order to strive for the sustainableenhancement of corporate value through the achievement of the “MOVING-10” long-term management vision toward 2030 andbusiness activities that lead to solutions for social issues.

Identified Materiality
Issues that can contribute more to stakeholders through our business are expressed in Tayca’s uniquely established classificationof “inspiring materials,” based on issues related to Environment (E), Social (S), and Governance (G), which are important for thepromotion of sustainable corporate activities.

Major Materiality Initiatives of the Tayca Group
Important Issues (Materiality)

Overview (Sub-materiality)

Major initiatives of the Tayca Group

Inspiring Materials
Select Issues
STEP

1

Select issues to be addressed in consideration of the Tayca
Group’s “MOVING-10” long-term management vision andcorporate philosophy, based on international guidelines andsocial issues in the chemical manufacturers

Contribute to the healthy andprosperous lives of people
through the power of chemistry
cultivated over many years

2●●

Expand growth businesses
Transform business model●●

Create new businesses
Create high-value-added
services

Discuss Important Issues
The Sustainability Promotion Committee discusses the selectedissues, categorizes and organizes them by theme, and identifies
the important issues (materiality) of the Tayca Group●

Cultivate next-generation
businesses● Enhance research and development
capabilities● Develop leading global niche
products● Promote open innovation●

Continuously enhance corporate
value by solving social andenvironmental issues
STEP

Accelerate global expansion
Maintain and strengthen quality
control standards● Strengthen solution proposals● Expand co-creation value●

Environment
Reduce CO2 emissions
Address chemical substanceregulations● Maintain low emissions ofenvironmentally hazardous
substances●

Promote sustainable corporate
activities that consider the global
environment and society
STEP

3

STEP

4

17

TAYCA CORPORATION｜Sustainability Report 2023

Assign Priority
Each important issue is prioritized in terms of its importance tothe Tayca Group and stakeholders, and the important issues are
narrowed down

Approve and Decide
Refined materiality are reviewed and approved by theManagement Committee and reported to the Board of Directors

Address climate change issues● Address product-related
regulations● Environmental conservation●●

Social
Accelerate innovation creation
through human capitalmanagement that respects
individuals and leverages
diversity

Respect human rights
Promote flexible work styles● Accelerate business efficiency(promoting DX)● Enhance employee training●

Diversity & inclusion● Promote human resource
development and advancement●●

Governance
Establish and operate strong
corporate governance

Ensure compliance
Strengthen information security● Manage business portfolio● Enhance stakeholder engagement●●

Improve transparency andsoundness of management●

TAYCA CORPORATION｜Sustainability Report 2023

18

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceInspiring Materials
Contributing to the Healthy and Prosperous Lives of People
through the Power of Chemistry Cultivated Over Many Years

Exhibiting at the Cosmetic Ingredients & Technology Exhibition Japan (CITE Japan)
We have exhibited the Cosmetic Ingredients & Technology
Exhibition Japan (CITE Japan) every time since 2003 in orderto provide the latest information to as many customers as
possible. At this year’s CITE JAPAN 2023, we exhibited four
new products with the customer’s point of view in mind basedon Tayca’s fundamental and applied technologies that wehave cultivated over the years. We received a high level ofinterest from many customers. We hope to deliver new
inspiration to more stakeholders through these activities.

The Tayca Group has been seeking to contribute to the healthy and prosperous lives of people throughinspiring materials such as functional raw materials, mainly ultraviolet ray blocking agents used incosmetics, and piezoelectric materials used in medical ultrasound diagnostic imaging machines.
We will continue to make persistent efforts and improvement at a high level in order to deliver inspiring
materials to as many people as possible around the world.

Establishing Piezoelectric Single Crystal Supply System in Japan and the U.S.
TRS Technologies (U.S.), a piezoelectric material
manufacturer, joined the Tayca Group in 2018, and asingle-crystal manufacturing factory was completed in Tayca
Osaka Factory in 2022. We aim to provide inspiring materials
to the world in the field of healthcare by establishing a
piezoelectric single crystal supply system in both Japan andthe United States. We are expanding our promotional
activities both in Japan and internationally by actively
providing customers with samples, participating in exhibitions
and academic conferences, and contributing papers tojournals.

TRS members

Members participating in the exhibition

Exhibition booth

Product presentation
Piezoelectric single-crystal wafers“ZEC-1” Can Be Used with Carbomer!
Elution Control Micro Zinc Oxide.

“Boost-touch” Spherical Silica
Encapsulating Micro Titanium Dioxide

We developed the revolutionary new zinc oxide “ZEC-1” byfinding a way to make the surface of zinc oxide particles
react more densely with surface treatment agents. ZEC-1
has extremely high water repellency, reducing the amount ofleached zinc ions to about 1/50th of conventional products.
This makes it possible to use ZEC-1 in combination withcarbomers.

We succeeded in producing “Boost-touch” silica, a sphericalsilica encapsulating micro titanium dioxide, by combining
titanium dioxide dispersion technology with silica particle
synthesis technology. This material functions as a boosting
agent to improve UV-protection capability. It is attracting agreat deal of interest from customers.

Watermolecule

Watermolecule

Smoothfeel

Zinc ion

Zinc oxide Surface
treatment

Conventional surface-treatedzinc oxide

Zinc oxide

Micro titanium
dioxide

SiO2

TiO2

Protection
againstUV rays

Surfacetreatment

ZEC-1 new zinc oxide

Conventional surface-treated zinc oxide does not completely coat thezinc oxide portion, even in the surface-treated area. This allows watermolecules to penetrate, causing zinc ions to leach out. The ZEC-1 newzinc oxide has a dense surface treatment that completely coats thezinc oxide, making it impenetrable to water molecules.

19

Spherical silica

TAYCA CORPORATION｜Sustainability Report 2023

Spherical silica

15 nm micro particles
Encapsulates 5%titanium dioxide

Various piezoelectric materials

Most Recent Conferences/
Paper Presentations
International conference:“Dielectric and Piezoelectric Properties of Sm-Doped
PIN-PMN-PT Single Crystals for Medical UltrasoundTransducers”

Exterior view of the piezoelectric single-crystal
material manufacturing facility

Academic paper:“Piezoelectric properties of Pb (Mg1/3Nb2/3) O3-PbTiO3 based
piezoelectric single crystal thin plate transducers”

In these presentations, we demonstrated that highpiezoelectric properties can be maintained even in thin plate
oscillators by applying single crystal material developed
jointly with TRS Technologies, which has traditionally had
high piezoelectric performance, and the processing
technology developed by Tayca to piezoelectric single
crystals.

IEEE IUS 2022 venue“Boost-touch” silica encapsulating micro titanium
dioxide in spherical silica particles

TAYCA CORPORATION｜Sustainability Report 2023

20

About Tayca GroupManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceInspiring Materials
Continuously Enhancing Corporate Valueby Solving Social and Environmental Issues

The Tayca Group has contributed to the global environment and society by developing products based on
the fundamental and applied technologies that we have cultivated over many years.
We will continue to pursue inspiring materials in the environmental/energy, electrical/electronics, andmedical/healthcare fields by utilizing the technologies and knowledge we have accumulated to solve
further social and environmental issues.

1 Electroconductive polymer related materials

2 Environmentally harmonious materials

Electroconductive polymers and their dispersions are mainly usedin capacitors. In addition to computers and communication basestations, they are expected to be expanded to automotive
applications requiring high reliability in the near future. They are
products that contribute to the realization of information andlow-carbon societies.

We have developed a new manufacturing method for micro
zinc oxide that has succeeded in significantly reducing CO2
emissions while maintaining functionality. We will continue toaccelerate research and development based on the keywords
of “harmony with the global environment” and “contribution
to the global environment,” aiming for a sustainable society.

Research andDevelopment Products

3 Semiconductor packaging materials

1 Electroconductive

New product development

polymer related materials

Applied Technologies
2 Environmentally

Functionalization

harmonious materials

Reactivity

Sulfonation
Organicsynthesis

Fundamental
Technologies

Analysis

We aim to provide high-quality materials for the niche fieldin semiconductor packaging materials through theminiaturization of newly developed spherical silica andoptimal surface treatment. We will also take on thechallenge of innovation in digital technology, which will
become more sophisticated in the future.

Antistatic

Hydrophilic

3 Semiconductor

packaging materials

Inorganic
synthesis

Electrification

Surface properties

Dispersion

Particle control

Dispersibility

Surfacetreatment

Optical control

Ceramics
Synthesis

4 Storage battery device materials
Materials utilizing inorganic synthesis and particulation
technologies enable higher energy density, higher output,
and longer cycle life for storage battery devices. We aim tocontribute to the popularization and expansion oflithium-ion batteries and the development of a sustainable
society.

4 Storage battery

device materials

5 Highly transparent

Sintered form

titania materials

Microfabrication

5 Highly transparent titania materials
6 Cosmetic ingredients
7 Piezoelectric materials

21

Highly transparent titania materials with high transparency
and refractive index enable high functionality in opticalelements such as displays and AR glasses. We also offer
solvent-free products that consider the global environment,
including energy-saving products.

7 Piezoelectric materials

6 Cosmetic ingredients

Medical ultrasound imaging machines using piezoelectric single
crystals enable sharper echo images. This can improve theaccuracy of medical diagnoses. We will contribute to theimprovement of people’s health through the development of
medical technology.

We have newly developed micro titanium dioxide and zincoxide powders that can be easily dispersed in mediums.
These products simplify the manufacturing process of
cosmetics and save energy. We will contribute to anenergy-saving and recycling-oriented society by designing
products based on their life cycles.

TAYCA CORPORATION｜Sustainability Report 2023

TAYCA CORPORATION｜Sustainability Report 2023

22

About Tayca Group

Environment
Environmental issues such as climate change are major and urgent challenges that the world must
now work together to address.
The Tayca Group is committed to actively reducing carbon dioxide (CO2) emissions, while both
handling risks and taking opportunities in our business activities to achieve sustainable growth.

Management
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

Climate Change
Basic Philosophy
We recognize that addressing climate change is an important issue. As our initiatives for reducing carbon dioxide (CO2) emissions,
we promote the reduction of CO2 emissions by following our approach to carbon neutrality while combining various options suchas converting fuel to low-carbon energy, rationalizing the production process, upgrading production equipment, and shifting
production items to environmentally friendly products.

Related SDGs

CO2 Emissions *1
We worked on rationalizing production processes andupdating to power-saving and high-efficiency facilities in
FY2023. However, CO2 emissions at Tayca(non-consolidated) increased slightly compared to theprevious fiscal year as a result of higher capacity utilization.

Basic Philosophy

1. Promote research and study on the environmental impact of ourbusiness activities, products, services, and substances we
handle. Consider the impact from research and development
through to disposal, and strive to develop products andtechnologies that are more environmentally friendly.
2. To contribute to resource and energy conservation and global
environmental preservation, we will strive to further promoteresource and energy conservation.
3. Take necessary measures to prevent pollution, including thedisposal of soot, sewage, and waste generated by our businessactivities.
4. Promote measures to recycle and reuse waste materials andstrive to reduce waste.
5. Strive to develop an environmental management system,
including the securing of qualified personnel necessary forwork related to environmental management as stipulated bylaw, etc., and educate employees on environmental awareness,knowledge, and practices.
6. In addition to promoting the maintenance of green areas andenvironmental facilities in and around factories, we shall pay
attention to the trends of administrative authorities and local
residents regarding products, operations, waste, etc., and strive
to communicate with them to gain their correct understanding.
7. When conducting international business, we shall endeavor to
respond to environmental issues in the same manner as we doin Japan to the extent possible, and shall actively provide
safety information, etc. on chemical substances related to ourbusiness.
8. We will periodically review our environmental management
activities and strive for continuous improvement.

23

TAYCA CORPORATION｜Sustainability Report 2023

Tayca (non-consolidated)(thousand tons)

200

194

200

187

Group companies *2

200

169

10

150

*1 Subject scope: Total of Scope 1 and 2 (energy-derived)

The Tayca Group recognizes that addressing climate change through our business activities is an important management issue.
We are taking appropriate measures in accordance with our Basic Policy on Sustainability.

Environmental Policy

CO2 Emissions*2 Group companies are calculated from FY2023. Subject companies are
Tayca Warehousing Co., Ltd., Tayca M&M Corporation, TAYCA (Thailand)Co., Ltd., TAYCA (VIETNAM) CO., LTD. and TRS Technologies,Inc.

Environmental Management System

Acquisition of ISO14001 at All Factories
in Japan
We acquired ISO 14001 certification, an international
standard for environmental management systems
that aims to reduce environmental risks andcontribute to the environment, for all of our factories
in Japan. We are continuously improving ourenvironmental management by establishing ageneral manager policy for each area every year andrepeating the PDCA cycle, which is the foundation ofmanagement, with a focus on individual
management targets.

Environmental Management System
Structure
We have appointed an environmental management
supervisor (factory manager for factories and generalmanagers of the Environment & Quality Control
Department for the head office and branch offices) tooversee each area, headed by the Director in charge ofEnvironment & Quality Control Department. We haveestablished a structure whereby the person responsible
for environmental management and the person
responsible for implementation are engaged inpractical environmental management tasks in eachdepartment under the supervision of the environmental
management supervisor.

190

50

0

Basic Philosophy
The Tayca Group aims to minimize the environmental
impact of our activities in order to achievesustainable development in response to global
environmental issues.

100

2019

2020

2021

Tayca (non-consolidated)

2022

2023

(FY)

Group base

CO2 Emission Reduction Targets
2030 target

50% reduction
in CO2 emissions(compared to FY2014*)

2050 target

Carbon neutrality* CO2 emissions in 2013: 180,816 tons

Our Initiatives to Reduce CO2 Emissions
Fuel Conversion from Coal to LNG (Liquified Natural Gas)
The power generation facilities at the Tayca Okayama
Factory use coal boilers and steam turbines to generatesteam and electricity. Since coal-fueled power generation
facilities emit large amounts of CO2, the factory is in theprocess of upgrading its facilities to switch from coal to LNG.
Full-scale operation is scheduled for 2025. It is expected toreduce CO2 emissions by approximately 23% relative to theCO2 emissions reduction target for 2030.

Satellite image of LNG

TAYCA CORPORATION｜Sustainability Report 2023

24

About Tayca GroupManagement
Strategy

Environment

Risks and Opportunities Related to Climate Change
Disclosure Items Recommended by the Task Force on Climate-Related Financial Disclosures (TCFD)

Sustainability

Inspiring
Materials

Global Changes
Item

Social[Impact on Operating Profit; Legend]

1.5°C Scenario
Category

Environment

Risks/Opportunities
Category

Item

Impact on
Operating
ProfitGovernance

Negative Impact

Positive Impact

Proposed Risk Response

Occurrence
Timing*

Review manufacturing processes
and thoroughly save energy● Convert fuel to low-carbon,
renewable energy● Shift from energy-intensive
general purpose products toenvironmentally-friendly
high-performance products

Mediumterm●

Basic Philosophy
We analyzed each scenario in accordance with the process outlined in the TCFD recommendations, assuming a 1.5°C or 4°C
increase in global average temperature compared to pre-industrial levels. First, we analyzed the risks and opportunities posed byclimate change by dividing them into two broad categories: risks related to the “transition” to a low-carbon economy and risks
related to “physical” changes caused by climate change. We then identified items that we believe will have a high degree of
impact. The Tayca Group aims to achieve sustainable growth by incorporating these risks into our management strategies andimplementing them.

Policies
andRegulations

Introduction of carbon
tax and GHG emission
regulations

Increased carbon tax burden

Large

Increased sales ofelectroconductive polymers forcapacitors due to the
popularization of electric vehicles● Increased sales of commercial
products (sol, etc.) that
contribute to saving energy

Large

Mediumterm●

Increased sales of battery
materials to meet growing
demand for storage batteries

Large

Mediumterm●

Increased sales by maintaining
and improving competitive
advantage for IR and UVlight-blocking titanium dioxide

MediumMediumterm●●

Promotion of energy
saving andelectrification

Technological
Development Technological

GovernanceRiskinnovation in clean
energyThe Tayca Group considers addressing issues related to climate change to be one of its most important management challenges.
The Sustainability Promotion Committee, chaired by the Director in charge of the Environment & Quality Control Department,
manages risk at the management level and works to create opportunities. In addition, progress is reported to the Management
Committee and the Board of Directors.

Opportunity

Opportunity

Technologicalinnovation in IR and UV Opportunity
light blocking

Refer to Sustainability / Sustainability Promotion System on page 16 for details
Increase in energy
costs

Risk

Medium●Reduced sales due to delay inresponse to the demand for
low-carbon, especially in Europe

Cannot becalculated●

Increase sales of plant-derived
surfactants due to shift in
preference for plant-derived
products

MediumStrategy
The following two scenarios were analyzed based on the TCFD framework with regard to the impact of climate change on thebusiness and financial performance of the Tayca Group.

MarketReturn to plant-derived
products rather thanpetrochemical-derived
products

1.5°C scenario : Scenario of transition to a low-carbon economy
4°C scenario : Scenario with increased physical climate change risks
These climate change scenarios refer to information from the Intergovernmental Panel on Climate Change (IPCC) and theInternational Energy Agency (IEA). The 1.5°C scenario uses IPCC SSP1-1.9 (a scenario that keeps temperature increase below
1.5°C based on sustainable development), while the 4°C scenario uses IPCC SSP5-8.5 (a maximum emissions scenario without
climate policy based on fossil fuel dependent development). The time horizon of the analysis is generally based on the year 2030
for transition risks and the year 2050 for physical risks. The risks and opportunities identified are shown in the table on the right.

Market demand for
low carbon

Reputation

Increasingly strict
evaluation bystakeholders

Risk

Opportunity

●

Risk

Category

The Sustainability Promotion Committee plays a central role in the company-wide identification, evaluation, and response to
climate change-related risks and opportunities. It is responsible for improving the level of risk management and ensuring smoothbusiness operations.
In addition, as with the process of company-wide risk management, important risks are analyzed by the Management
Committee, and their impact and management status are reported to the Board of Directors as appropriate.

Item

Risks/Opportunities
Category

Risk

Item

Major
Proposed
Reductions** Subject scope: Scope 1 and 2 (energy-derived)
Refer to Environment / CO2 Emission Reduction Targets on page 24

Mediumterm

Cannot becalculated

Proactively disclose information
on climate change response
strategies, environmentallyfriendly products, etc.
● Strengthen stakeholder
engagement

Mediumterm

Impact on
Operating
ProfitProposed Risk Response

Occurrence
Timing*Thoroughly enforce occupationalsafety● Automate and reduce manpowerin factory operations

Medium- tolong-term

Occurrence of risks to employee
health and safety, such asheatstroke on hot days
● Increased air conditioning costs
at each factory

Small

Increased sales of Titanium
Dioxide for Blocking IR Radiation,
which reduces temperature
increases in buildings and roads● Increased sales of cosmetic
ingredients (micro titanium
dioxide, micro zinc oxide, surface
treatment products, etc.) due torising demand for UV care

Opportunity

Large

Increased cost of removing
sediment deposited at the mouthof rivers flowing into the Seto
Inland Sea

Medium●Fuel conversion to low-carbon energy● Rationalization of manufacturing process● Thorough implementation andenhancement of energy saving

Mediumterm

Increase in frequencyof heavy rainfall

Procurement of green electricity● Reconstruction of business portfolio● CO2 recovery and recycling● Use of new technologies●

Risk

Damaged company sites due tothe frequent occurrence of windand flood damage● Factory operations impacted due
to supply chain disruptions●

Risk

Physical(Acute)●●Increase in averagetemperature

The Tayca Group is also considering reduction targets and major reduction measures for CO2 emissions to achieve carbon
neutrality. We are also in the process of calculating Scope 3 for CO2 emissions.
●

Accelerate development of
products and manufacturing
processes that emit less CO2
during production

●

●

●

Physical(Chronic)

Indicators and Targets

Mediumterm

4°C Scenario
Global Changes

Risk Management

Reduced corporate value due todelayed response to climatechange and lack ofcommunication

Review manufacturing processes
and thoroughly save energy● Invest in power-saving andhigh-efficiency facilities●

Increased energy costs
associated with switch torenewable energy●

Intensification of
extreme weather
events●Opportunity

Increased sales of storage
battery materials due toexpansion of storage battery
market in response to disasters

Mediumterm

Respond thoroughly incooperation with local
governments

Mediumterm

Ensure business continuity
through BCPs
● Diversify supply chain

Longterm●

Large(Covered bydamageinsurance)

Large

●

Mediumterm* Medium-term: ~2030, long-term: ~2050

25

TAYCA CORPORATION｜Sustainability Report 2023

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26

About Tayca Group

Environment

FY2023 Results
Tayca’s material balance is as follows.

Raw materials
266,000 tons
● Energy
69,100 kl●(crude oil equivalent)

●

Water
11.3 million m3

Business Activities

OutputInvestment in Environmental Measures
We invested approximately 1.3 billion yen in total forenvironmental measures, with particular emphasis on
security and disaster prevention measures (renewal of
aging facilities) and health and safety measures(improvement of the work environment) in FY2023, asshown in the chart on the right.

Energy Consumption
Despite the changeover to energy-saving type facilities,
energy consumption increased compared to the previous
year due to improved operating rates.
Energy consumption intensity decreased from the previous
year due to the changeover to energy-saving type facilities
and efficient production.

We will continue our efforts to reduce energy consumption
intensity by installing energy-saving facilities and conducting
highly efficient production.

●

Hydrogen fluoride is disclosed by converting fluoride contained in seawater used for cooling facilities into hydrogen fluoride.
It is not generated during processes.

* PRTR Act: A system to compile and disclose data on the extent to which potentially harmful chemical substances are released into the environment ortransported out of business sites in wastes, and from what sources

PRTR Substances: Atmospheric Emissions●(tons)

20

15

Cumene/isopropylbenzene
Ethylbenzene

15.67

1.7%

6.9%

16.37
15

Initiatives to Reduce Industrial Waste
The volume of industrial waste generated in FY2023
increased compared to the previous fiscal year.
We are actively working to recycle industrial waste,
primarily by reusing it as a raw material for cement. We willcontinue efforts to reduce the volume of industrial waste
we generate and to reduce waste by recycling.

18.9%

●

●

Energy consumption (left axis)
Energy consumption intensity vs. previous year (right axis)(thousand kl)

(%)

100

120

102

100

68

71

108
61

98
100
69 80

98
67

20

0

0

2020

2021

2022

2023

(FY)

Amount recycled
Amount ultimately disposed in landfills
Volume of industrial waste generated(thousand tons)

70

66.5

59.6
42.9

48.8

60.4

63.9

2021

2022

2023

2019

(FY)

Emissions of sulfur oxides (Sox), nitrogen oxides (NOx),and soot and dust in FY2023 decreased compared to theprevious fiscal year.
We are working to constantly reduce atmospheric pollutant
emissions by using low-sulfur heavy oil for boilers, which
are a source of atmospheric pollutants, and by installinghigh-performance after-treatment equipment to remove
SOx, NOx, and soot and dust from combustion gases
generated during processes.

Initiatives to Reduce Factory Wastewater andWater Pollutant Emissions
●

49.1

46.1

●

54.2
●

15.6

16.4

13.5

13.9

15.2

0

2019
TAYCA CORPORATION｜Sustainability Report 2023

2022

2023

3.89

0

2020

2020

2021

(FY)

Atmospheric Pollutant Emissions (Non-consolidated)(tons)SOx (left axis)

200

Soot and dust (right axis)

NOx (left axis)(tons)

9
8

7

160

7

7

138
120

6

116

114

114

4

80

61

52

40

5

4

88

59

54

4

3

3

54 2
1
0

2019

70.9

30

27

6.46

0

Industrial Waste Volume (Non-consolidated)

10

6.38

2020

2021

2022

2023

(FY)

40

20

20

4.62

3.85

60

40

40

10

Initiatives to Reduce Atmospheric
Pollutant Emissions

Security anddisaster prevention
measures

Energy Consumption (Non-consolidated)

50

10.17

5

2019

71.9%

60

11.77

0

Health andsafetymeasures

60

20

5

Other 0.5%

Other

Hydrogen fluoride
Manganese(tons)

Response to energy saving

Response to pollution

80(Non-consolidated)

XyleneToluene10(Non-consolidated)

PRTR Substances: Water Discharge(Non-consolidated)

Ratio of Investment in Environmental Measures

2019

●

Governance

We are promoting measures to reduce PRTR substances without being affected by increases or decreases in production
volume as much as possible.

●

We will continue to implement energy-saving measures while
being mindful to reduce environmental impact and ensure
the safety of our manufacturing facilities.

●

Social

●

12.04

●

Environment

Total emissions of substances subject to reporting under the PRTR Act* in FY2023 decreased slightly compared to theprevious fiscal year.

*1 By-products are not included in products *2 CO2 emissions are the amount of CO2 generated by energy use●

Inspiring
Materials●

Products*1 : 224,000 tons
Atmospheric emissions
CO2: 190,000 tons*2 /SOx: 88 tons / NOx: 54 tons
● Water system emissions
Total wastewater: 8.982 million m3 /COD: 39 tons
● Industrial waste: 70,000 tons

Head office● Tokyo Branch● Osaka Factory● Okayama Factory● Kumayama Factory●(including seawater)●

Sustainability

Emission of Substances Covered by PRTR Act

Material Balance

Input

Management
Strategy

2020

2021

2022

2023

(FY)

The total volume of wastewater discharged in FY2023
decreased slightly compared to the previous fiscal year. COD
emissions were the same as the previous fiscal year.
The Okayama Factory, which is Tayca’s main factory, hasestablished voluntary management values that are evenstricter than those of the Water Pollution Prevention Act andthe Act on Special Measures concerning Conservation of theEnvironment of the Seto Inland Sea, and is working to ensure
thorough management of and compliance with these values.
We have been continuously reducing COD, which is subject tototal volume regulations, through water purification treatment.

We will continue to reduce the amount of water used throughwater conservation and recycling to reduce total wastewater
discharge.

Total Wastewater and COD Emissions (Non-consolidated)
Total wastewater (left axis)
COD emissions (right axis)(thousand m3)

10,000

8,975
8,000

42

(tons)

9,044

9,026
7,894
41

6,000

36

39

8,982
39

50
40
30

4,000

20

2,000

10

0

0

2019

2020

2021

2022

2023

(FY)

TAYCA CORPORATION｜Sustainability Report 2023

28

About Tayca Group

Environment

Management
Strategy

Sustainability

Inspiring
Materials

Environment

Responsible Care

Addressing Preservation of the Global Environment

Basic Philosophy

Specific Initiatives

The Tayca Group supports the aims of the Responsible Care Global Charter and implements Responsible Care to protect theenvironment, safety, and health.

Development of Microplastic Alternatives

Responsible Care Implementation System
The Tayca Group implements and improves safety, health, and environmental measures throughout
the entire life cycle from development to manufacturing, distribution, use, final consumption, anddisposal based on these basic principles under the supervision of the Director in charge of theEnvironment & Quality Control Department. The results are reported to the President, who gives
instructions for improvement. We also operate an environmental management system based on theenvironmental ISO 14001 standard to reduce our environmental impact.

Environmental
conservation

Energy intensity(Promotion ofenergy saving)

Safety and disaster prevention
Occupational healthand safety

The Tayca Group’s spherical silica
Our spherical silica

Results

Reduction of 1% ormore from FY2022 levels

Decreased by 2.2%
from FY2022

No equipment accidents

No equipment accidents

No accidents with lost time

Accidents with lost time: 4

Logistics safety

No serious logistics accidents

Chemical safety

No product liability issues

Communication with society(collection of silica particles)

FY2023 Targets

No accidents with no lost timeGovernanceMicroplastics are fine plastic debris with a diameter of 5 mm or less that are a cause of marine pollution. These particles
are difficult to collect due to their size and continue to accumulate in the ocean without naturally decomposing, which isfeared to have a serious impact on the ecosystems of marine organisms. Resin beads, which are widely used insunscreen and makeup cosmetics to improve skin feel, can become microplastics that pollute the ocean.
The Tayca Group has developed a spherical silica as an alternative to resin beads that is soft and smooth to the touch,which is not possible with conventional inorganic substances, by applying surface treatment to silica, a substance withlow environmental impact. Most recently, we have been developing a wide variety of spherical silica with different particle
sizes to further enhance tactile characteristics for cosmetic applications.

Priority Items and Results for Responsible Care Activities in FY2023
Priority Items

SocialComposite
multilayer
structure

Silica surface
Microplastics, which are a cause of marine
pollution

Softness is achievedby the composite
multilayer structure of
the silica surface

Dense pore structure

Accidents with no lost time: 4

Promotion of risk management/crisis management

No serious logistics accidents
No product liability issues
Compliance with domestic/
overseas chemical regulations

Implementation of appropriate
information disclosure

Information on Responsible Care
activities reported above

Dialogue with stakeholders

Refer to Social /Communication with Stakeholders on page 37

Contributing to Coral Reef Preservation
There has been a growing concern in recent years that some organic ultraviolet
absorbers, which are ingredients in sunscreen products, are affecting coral reef
ecosystems. Hawaii and Key West, Florida, in the U.S. are working to protect coral
reefs by regulating the sale and distribution of sunscreens containing these organic
ultraviolet absorber ingredients.
Titanium dioxide and zinc oxide are recognized by the U.S. Food and Drug
Administration (FDA) as GRASE (Generally Recognized As Safe and Effective) . The
Tayca Group’s micro titanium dioxide and micro zinc oxide products are inorganic
UV dispersant with minimal impact on coral reefs.

Support for Roundtable on Sustainable Palm Oil (RSPO) Activities

Biodiversity
Basic Philosophy

The Tayca Group supports the aim of sustainable palm oil production and use, andhas been supporting RSPO activities since 2012. We obtained RSPO certification at
our Osaka Factory in June 2017 and at our Okayama and Kumayama Factories in
2020, with each factory using certified raw materials.

We recognize that preserving biodiversity is one of the most important issues that society as a whole must address.
We are not only working to reduce substances with environmental impact emitted from the Tayca Group’s sites and factories,
but also from the supply chain as a whole.

29

TAYCA CORPORATION｜Sustainability Report 2023

TAYCA CORPORATION｜Sustainability Report 2023

30

About Tayca GroupManagement
StrategySocialRealizing a society in which each person can feel a sense of fulfillment and happiness is part of acompany’s sustainability activities.
The Tayca Group is actively promoting initiatives to enrich people and society through efforts including
respect for human rights, work style reform, assurance of occupational health and safety, and humanresource development.

Related SDGs

Sustainability

Inspiring
Materials

Environment

SocialGovernanceWork Style Reform
Basic Philosophy
We aim to improve the work-life balance of our employees by introducing a system that can flexibly accommodate their lifestyles
to create an environment in which they can maximize their abilities.

Reduction of Long Working Hours●

We have designated every Wednesday as a “No Overtime Day.” It has been over 10 years since its introduction, and theimplementation rate has remained at more than 90%●

Overtime work is capped at 30 to 40 hours per month in principle. In cases exceeding this amount, labor and management
confirm the nature of the overtime and whether or not it is continuous, in order to reduce overtime work.

●

We introduced a time and attendance management system to enable managers to check the work status of employees in atimely manner, and to manage and adjust working hours.

Respect for Human Rights

No Overtime Day Implementation Rate

Average Monthly Overtime Hours(%)(Hours)(Non-consolidated)

Basic Philosophy(Non-consolidated)

100

The Tayca Group positions respect for human rights as one of the foundations of sustainability. We have formulated a Code of
Conduct that establishes “respect of the individual ability and personality of our employees regardless of their nationality andgender” as an important issue to be addressed by management. We have also clearly stated in rules of employment thatharassment of any kind is prohibited. We also strive to ensure that the human rights of each individual are respected by our
suppliers and various stakeholders, and thoroughly familiarize them with our efforts.

25

97.7

97.5

97.9

97.6

97

22.5

97.2

22.1

21.7

20

17.6

Human Rights Policy

94

15

91

10

88

5

19.4

1. Respect for basic human rights
85

We recognize the diversity of individual values and respect and protect the human rights of each person.

0

2019

2020

2021

2022

2023

2019

(FY)

2020

2021

2022

2023

82

82

2022

2023

(FY)

2. Elimination of discrimination
We respect the individual’s personality and do not discriminate on the basis of “gender,” “age,” “nationality,” “race,”“sexual orientation,” “religion,” “LGBT,” etc.

3. Prohibition of harassment

Improving the Paid Leave Utilization Rate●●

We do not tolerate any form of harassment, including sexual harassment and power harassment.
●

4. Prohibition of child labor and forced labor
We do not tolerate child labor, forced labor, or other unfair labor practices in our business activities.

5. Recognition and respect of freedom of association and the right to collective bargaining
We will respect the fundamental rights to freedom of association and collective bargaining.

6. Maintenance of an appropriate work environment●

The paid leave utilization rate has remained at around 80%
for the past 10-plus years.
We have been operating a planned annual leave system(currently max. 7 days given) since FY1999, prior to when it
was legally mandated.
We have made it easier for employees to take paid leave byintroducing a system for half-day and hourly annual leave.
Lost paid leave can be accumulated for up to 40 days under
the accrued paid leave system. Conditions for taking leave
are not limited to the employee’s own personal injury orillness; it can be used for a wide range of purposes,
including family care and nursing, medical checkups during
pregnancy, infertility treatment, volunteer work, and recovery
from infectious diseases.

Paid Leave Utilization Rate
(Non-consolidated)

(%)

100
80

76

79

76

60
40
20
0

2019

2020

2021

(FY)

We will create a safe, clean, healthy, and comfortable work environment.

Diversity & Inclusion
Harassment Consultation
Sections in charge of personnel and labor affairs, labor unions, lawyers, and others at each business site of the Tayca Group serveas harassment consultants. They respond appropriately and do not treat the those seeking consultations unfairly.

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TAYCA CORPORATION｜Sustainability Report 2023

We promote diversity and inclusion with the goal of fostering an organizational culture that enhances organizational productivity
and competitiveness. We do this by recruiting human resources with a variety of attributes such as age, gender, nationality, race,
sexual orientation, religion, LGBT, etc., and accepting their differences in thinking and individuality.

TAYCA CORPORATION｜Sustainability Report 2023

32

About Tayca GroupManagement
StrategySocialRealizing Flexible Work Styles
The Tayca Group aims to maximize productivity as an organization by creating an environment in which each employee can
independently choose the most efficient way to work from a variety of flexible work styles.

●

We will create an environment in which employees can work with a sense of fulfillment and satisfaction and fulfill theirprofessional responsibilities while maintaining work-life harmony at each stage of their private lives, including child-rearing andnursing care. We believe that a clear distinction between work and private life enhances the motivation of each employee andallows them to maximize their abilities. The Tayca Group positions work-life balance as something that enhances corporate vitality.
We are working to create an environment in which employees can work enthusiastically by expanding systems and creating aworkplace climate that facilitates their utilization. We have also officially introduced telework and flextime systems, which had been
introduced temporarily as a countermeasure against COVID-19 infections.

●

Governance

We are also making steady progress in efforts to achieve our target of a 12% ratio of women in management positions in the Tayca
Group.

●

Female Employee Hiring
Percentage

Ratio of Women in Management
Positions

(%)

(%)

(Non-consolidated)
40
30

We have prohibited smoking during working hours at all of our business sites since
October 2018 in order to create a workplace where all employees can play an activerole in good health and with peace of mind.

10(Consolidated)
15

37.5

29.2

10

8.3

20

We conduct stress checks once a year in accordance with laws and regulations.
We offer interviews with industrial physicians for employees who wish to havethem.
● Employees who work significant overtime hours are interviewed by an industrial
physician to check their physical and mental health.

Lunchtime seminar

●

●

10.1

0

2021

Mental health initiatives:

9.4

5

9.8

0

●

2022

2023

2021

(FY)

2022

2023

(FY)

In order to support female employees in fully demonstrating their abilities, the menstrual leave stipulated by Article 68 of theLabor Standards Act was renamed “68 Leave” in our internal regulations to facilitate application, and up to two days per month
were made available as paid leave.

We will continue to promote the creation of workplaces where women can play active roles for a long time.

Childcare Support

Employment of Persons with Disabilities●

We introduced the “Tayca Childcare Support Plan” in April 2021 as a system that allows employees to flexibly choose the way
they work according to the growth of their children and their family environment. Employees with children up to the end ofelementary school can choose one of the following five work styles per month: flextime, shortened working hours, no overtime,four-day workweek, or telework. In the two years since the system was introduced, the number of employees using it increased
1.7 times in the previous fiscal year compared to FY2022 as it became more popular.

●

In order to improve support for male employees taking childcare leave, we promote the use of the Tayca Childcare Support Plan
and childcare leave by informing eligible employees of the details of the system as appropriate, including childcare leave at birth.
As a result, 52% of eligible male employees took childcare leave in the last fiscal year. We will continue to improve theenvironment surrounding childcare leave, including the follow-up system, to ensure that the system is utilized in the future.

Tayca Childcare Support Plan
Utilization Rate in FY2023

Childcare Leave Utilization Rate for
Eligible Male Employees(Non-consolidated)(Non-consolidated)

We hire persons with disabilities based on their aptitude for the job and the location and extent of their disabilities. We believe that
employment of persons with disabilities is a corporate social responsibility, and we will work to expand employment of persons withdisabilities going forward.

Occupational Health and Safety
Basic Philosophy
We prioritize safety above all else. We always aim to achieve zero occupational accidents and are committed to creating anenvironment in which employees can work at their best, including the maintenance and promotion of good health and early return
to work after recovering from an illness.

Occupational Accidents

(%)

60

●

52.4

Flextime
Shortened working hours

28%

29%

No overtime
Four-day workweek

40

Telework
●

20

12.5

36%

6.3
0

2021

2022

2023

(FY)

In the event of an occupational accident, the Health and Safety
Committee investigates the cause and confirms measures toprevent recurrence. We also promptly disseminate accident
information throughout the company to prevent similar
accidents from occurring.
We conduct safety patrols by theme, such as equipment failureand 5S, in addition to regular patrols. Both labor andmanagement cooperate in checking factories to improve safety.

We will continue our health and safety activities with the aim ofachieving zero accidents going forward.

Number of Occupational Injuries (Non-consolidated)(Accidents)

Accidents withlost time
Accidents withno lost time

15
12
9
6

9

13

3
3

8
4

7

2019

TAYCA CORPORATION｜Sustainability Report 2023

8

14

6

0

33

Social

We established a General Employer Action Plan for Tayca (non-consolidated) for 2022 in accordance with the Act on the Promotionof Women’s Active Engagement in Professional Life. We set one of our targets as “10% or higher ratio of female employees to total
employees,” and have focused on hiring female employees by recruiting new graduates, mid-career hires, and appointing fixed-term
employees as full-time employees. As a result, we have achieved a ratio of female employees that far exceeds our target.

The health checkup rate for employees is 100%. Based on the results of healthcheckups, interviews with industrial physicians are held as necessary to encourage
early treatment. As part of our efforts to maintain good health, we conduct
lunchtime seminars and other programs to keep employees healthy.

7%

Environment●

Health Management●

Inspiring
Materials

Promoting Female Participation●●

Sustainability

1

2020

3
3

2021

4
1

2022

2023

(FY)

TAYCA CORPORATION｜Sustainability Report 2023

34

About Tayca Group

SocialManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

Human Resource Development

CSR Procurement

Basic Philosophy

Basic Philosophy

In light of our global business expansion, we emphasize the development of core human resources who can be active on a global
scale and who can be entrusted with management responsibilities in the future. We are continuously and intensively developing
human resources so that they can realize their full potential at an early stage, regardless of their gender, nationality, work history,
age, or other factors. We are also working to improve the abilities of all employees by fostering their ability to think independently,
willingness to take on new challenges, and mentality of never fearing failure.

The Tayca Group aims to build good partnerships based on relationships of mutual trust and enhance mutual corporate value by
promoting initiatives aimed at sustainable purchasing and procurement in cooperation with our suppliers.

Tayca is committed to honest business dealings that are fair, equitable, and transparent, with the aim of building relationships oftrust with suppliers and achieving sustainable development, while strictly adhering to respect for human rights and compliance.

Deepening Employee Training
●

●

●

●

●

We are implementing selective early-stage management educational training todevelop core human resources who will learn managerial thinking and businessconceptualization skills.

1. Ensure Compliance

We strive to improve the language skills of our employees through methods suchas overseas language training, face-to-face English conversation lessons, ande-learning.
We send young and mid-career employees to our overseas subsidiaries to gain
experience working overseas and develop their management sense.
We use a brother/sister system for new employees to help them become
accustomed to their new jobs and work environment. We have also established asystem whereby employees who have been trained under this system can become
mentors after several years, thereby improving their communication andmanagement skills.

●

We conduct procurement activities in compliance with relevant domestic and international laws and regulations, as well
as social norms.

●

We do not have personal relationships or personal interests with all suppliers.

2. Information Management
New employee training●

We maintain the confidentiality of information obtained in the course of business and manage it appropriately.

3. Environmental Conservation●

We provide training by job level at each stage of an employee’s career, from hiring
to retirement, according to their age and role.

We are working to build more in-depth training systems by verifying theeffectiveness of these training programs in a timely manner.

Basic Procurement Policy

We will conduct procurement operations in an environmentally friendly manner, such as by reducing the burden on the
global environment.

4. Respect for Human Rights●

Group work in second-year employee training

We respect human rights and strive to eliminate human rights violations such as unfair discrimination, harassment,child labor, and forced labor, and we procure from suppliers that are not complicit in such violations.

5. Fair and Equitable Transactions

Personnel Systems Aimed at a More Proactive Efforts
At the Tayca Group, our management policy calls for “full participation management.” To this end, it is important that all
employees understand our management philosophy and work toward the achievement of our long-term management vision. In
April 2020, we reviewed our previous personnel system, the job qualification system. We introduced a new role grading system for
management positions and revised the evaluation system and wage structure. We are revising the system to eliminate seniority
factors and focus solely on the achievement of roles and the progression of abilities, thereby enhancing employees’ desire to takeon challenges and leading to steady growth.
In April 2023, we also made major revisions to the system for general employees. The role grading system for managers wasintroduced for general employees as well. We have set challenging organizational targets as a system to promote growth, andhave created an environment that enables employees to boldly take on new challenges. We will continue our efforts inestablishing and operating these new personnel systems to ensure that they function properly.

●

We will provide all suppliers with opportunities for fair and equitable competition on an equal footing.

●

We will conduct our procurement activities in a globally open manner.

6. Supply System●

We will strive to procure from suppliers that maintain and improve their quality, price, stable supply, and technologicaldevelopment capabilities at an appropriate level.

7. Supply Chain Management●

We will not procure conflict minerals that are complicit in illegal activities in conflict areas or human rights abusescaused by such activities.

Accelerating Operational Efficiency
We established the DX Promotion Office as a specialized department in FY2022 tostrengthen the Tayca Group’s DX strategy for the future. We have been working on
various business reforms such as reviewing existing systems, automating internalbusiness processes using RPA and cloud services, and electronic contracting using
AI and other cutting-edge technologies. In the last fiscal year, we launched a new DX
project with young and mid-career employees from various divisions who have avariety of experience in DX, which will become even more important in the future. We
are discussing and carefully scrutinizing matters to be addressed by the Tayca Groupin the future in order to realize them.

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TAYCA CORPORATION｜Sustainability Report 2023

CSR Procurement Initiatives

During the project

As corporate activities become increasingly globalized, there are increasing demands for companies to “contribute to the building
and development of a sustainable society” as part of their corporate social responsibility (CSR). In light of these circumstances, it
has become essential to promote procurement activities that place greater emphasis on CSR factors such as environmental
protection, labor environment, and human rights in addition to the conventional factors such as quality, performance, price, anddelivery conditions. The Purchasing Department of the Tayca Group has created a “CSR Self-Check Sheet” and conducts surveys ofsuppliers to promote CSR procurement.
For example, titanium, a component of titanium ore, one of our major raw materials, is a high-grade crust-forming element. In
addition to procuring titanium from multiple regions around the world, we are aware of reserve amount in each producing regionand strive to ensure that stable procurement is not hindered by depletion.

TAYCA CORPORATION｜Sustainability Report 2023

36

About Tayca Group

SocialCommunication with Stakeholders

Stakeholders

Shareholders/
Investors

Shareholders
and investors

Relationshipof trust

Cooperation andcollaboration

All members of local
communities andsociety that the Tayca
Group interacts withthrough our businessactivities

Local
communities
and society

Customers
and suppliers

Partnership

Customers/
Suppliers

Job satisfaction

Local
Communities/
Society
Employees

Communication with Local Communities and Society
Each of our sites regularly conducts cleanup activities in thesurrounding areas. We also participate in community events and hostfactory tours. In doing so, we promote communication with local
communities.

37

In the Okayama region, we conducted cleanup activities in
the Nabeshima area on March 11, 2023, and in the Sotowa
area on March 19, 2023, together with local residents.

●

In the Kumayama region, employees of the Osafune,
Okayama Factory participated in the 13th Setouchi-shi Fire
Prevention Association’s Fire Extinguishing Technology
Training Competition on October 13, 2022.

TAYCA CORPORATION｜Sustainability Report 2023

Environment

Social

We will build a stable
relationship of trust throughtimely and appropriate
information disclosure anddialogue.

We will provide products andservices that prioritize safety
and security, and work
toward long-term mutual
prosperity.

We will respect cultures andcustoms, both within andoutside of Japan, anddevelop relationships of
mutual trust.

Tayca’s Responsibility●

Maintain and improve
corporate value●

Appropriate return of profits●

Timely and appropriate
disclosure of corporate
information●

Response to ESG investment●

Provision of safe, reliable, andvaluable products and services

Governance

We will place the highest
priority on health and safety
and strive to improve theworking environment. In
addition, we will actively
develop personnel systems
and education and training
systems for skill
development.

Communication Method●

Ordinary General Meeting of
Shareholders (one time/year)●

Company information sessions
for individual investors●

Information disclosure on website●

Contact for inquiries●

Implementation of factory tours●

Supplier support in sales andprocurement divisions●

Fair and equitable transactions●

Support and collaboration forsustainable procurement●●

Appropriate management of
supplier information

Holding of exhibitions andinformation sessions●

Information disclosure on website●

Sponsorship of local events, sports
organizations (Fagiano Okayama),
etc.

●

Holding of dialogue with local
residents●

Holding of roundtable discussions
with local students, factory tours●

Participation in local fire drill
competitions●

Traffic safety patrols●

Regular health checkups, stresschecks, and interview guidancewith industrial physicians●

Self-assessment, feedback
interviews (two times/year),180-degree evaluation (onetime/year)●

Labor-management council
meetings●

Contribution to local
development●

Prevention of
accidents/disasters,
environmental conservation

Employees of the
Tayca Group and theirfamilies

Employees●

Inspiring
Materials

PolicyAll of the Tayca Group’sbusiness partners

We are a member of the Responsible Care Committee of the Japan Chemical Industry Association. We maintain the environment,
health, and safety, publicly announce the results of our activities, and engage in dialogue and communication with society.

Overview of Main Activities

Sustainability

Dialogue with Stakeholders

The Tayca Group is committed to revitalizing communication and to achieving prosperous coexistence with our stakeholders
through our business activities.

All Tayca Group
shareholders andinvestors

Management
Strategy●

Consideration for health aswell as occupational healthand safety●

Utilization and development of
human resources●

Creation of a workplace where
diverse human resources canplay an active role●

Workplace gatherings●

Company newsletter (fourtimes/year), company intranet

Cleanup activities in the Okayama region

Participation in the 13th Setouchi-shi Fire Prevention
Association’s Fire Extinguishing Technology Training
Competition

TAYCA CORPORATION｜Sustainability Report 2023

38

About Tayca Group

Governance
Strengthening the governance system that serves as a foundation for supporting corporate growthManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

Board of Directors

is one of our most important management issues. The Tayca Group is committed to building asystem that earns the trust of our various stakeholders and will work with sincerity to enhance the

Basic Philosophytransparency and soundness of our management.

The Board of Directors consists of 10 members, including
four outside directors. It meets once a month in principle to
make decisions on matters stipulated by law and the Articles
of Incorporation and other important management matters,
as well as to supervise the execution of each director’s
duties. In addition, the Board of Independent Outside
Directors, consisting of independent outside directors, meetsregularly to actively contribute to the discussions at Board
meetings.

Related SDGs

Corporate Governance

Number of directors under the Articles
of Incorporation

13

Term of office of directors under the
Articles of Incorporation*

1 yearChairman of the Board of Directors

President

Number of directors

10

Appointment status of outside directors

Appointing

Number of outside directors

4

Number of outside directors designatedas independent directors

4(Number of female directors)(1)* Term of office of directors who are Audit & Supervisory Committee
members is 2 years

Basic Philosophy
Our goal is to establish a corporate governance framework that earns trust from shareholders, customers, and other stakeholders
by making timely and informed decisions, enhancing transparency, and achieving management stability.

Position, etc.

Outline of Corporate Governance System
Tayca is a company with an Audit & Supervisory Committee. We have established the Board of Directors, Audit & Supervisory
Committee, and Accounting Auditors as the main bodies of the corporate governance system, and the Internal Auditing
Department and other bodies as complementary bodies, to further enhance corporate governance by strengthening our internal
control system.
Ordinary General Meeting of Shareholders
Appointing/Dismissing

Nomination andRemuneration
Committee

ReportingDirectors(excluding Audit & Supervisory
Committee members)

Advising

ReportingBoard of Directors
Auditing/Supervising

ReportingSelecting/
Supervising

Appointing/Dismissing

Audit &
Supervisory
Committee

Collaborating

Directors(Audit & Supervisory
Committee members)

Collaborating

Collaborating

Auditing

Board of Independent
Outside Directors

President,
CEO & Representative Director

Reporting audits/
improvements

Collaborating

Collaborating

Internal Auditing Department
Instructing

Accounting Auditors

Management Committee(Executive Officer)

Compliance Committee
Instructing
improvements

Collaborating

ReportingBusiness Divisions

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TAYCA CORPORATION｜Sustainability Report 2023

Names, etc. of Directors (as of June 27, 2023)

Internal
auditing

ReportingAccounting auditing

Name

Responsibilities and Significant Concurrent Positions

Representative Director
President Executive Officer

Shunji Idei

In charge of the Internal Auditing Department

Director
Managing Executive Officer

Masahiko Nishino

In charge of the Corporate Planning Department,
Environmental and Quality Department and Purchasing Department
President of Tayca Trading Co., Ltd.

Director
Managing Executive Officer

Yasuyuki Nakatsuka

In charge of the Personnel Department, General Affairs Department,
Accounting Department and DX Promotion OfficeDirector
Senior Executive Officer

Tamataro Iwasaki

In charge of the Research Planning Office, Osaka Research Laboratory,
Okayama Research Laboratory, Osaka Factory, Okayama Factory,
and Kumayama Factory

Director
Senior Executive Officer

Yoshihiro Murata

In charge of the Sales Department
Manager of Tokyo Branch

Director
Audit and Supervisory
Committee Member (Standing)

Akira Miyazaki

Director
Audit and Supervisory
Committee Member

Hitoshi Tanaka

Lawyer of Yodoyabashi & Yamagami Legal Professional Corporation

Director
Audit and Supervisory
Committee Member

Koji Yamamoto

Professor, Faculty of Business Administration, Osaka Gakuin University
Representative Audit Commission member of Osaka Prefecture
Dean, Faculty of Business Administration, Osaka Gakuin University

Director
Audit and Supervisory
Committee Member

Mamiko Ozaki

Invited Professor of the Department of Chemical Science & Engineering,
Kobe University
Invited Professor of RIKEN Center for Biosystems Dynamics Research

Director
Audit and Supervisory
Committee Member

Tsuyoshi Inoue

Director and Advisor, DAIICHI KIGENSO KAGAKU KOGYO CO., LTD.

TAYCA CORPORATION｜Sustainability Report 2023

40

About Tayca Group

GovernanceManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernance

Audit & Supervisory Committee

Nomination and Remuneration Committee

Basic Philosophy

Basic Philosophy

The Audit & Supervisory Committee consists of five members: one full-time Audit & Supervisory Committee member and fourpart-time Audit & Supervisory Committee members (including four outside Audit & Supervisory Committee members). It inspects
approval and other documents and conducts audits of the execution of duties by directors as well as other matters.

The Nomination and Remuneration Committee consists of seven members: three internal directors and four independent outside
directors. It is chaired by the President, CEO & Representative Director. The purpose of the Nomination and Remuneration
Committee is to enhance corporate governance by strengthening the fairness, transparency, and objectivity of procedures related
to the nomination and compensation of directors and executive officers.

Independent Outside Officers
Name

Supplementary Explanation
Regarding Conformance Items

Reason for Appointment
As a lawyer, Hitoshi Tanaka is well-versed in corporate legal affairs. We believethat his professional insight and wealth of experience cultivated over the years
will be reflected in the management of the Company.

Hitoshi Tanaka

Koji Yamamoto

Mamiko Ozaki

Hitoshi Tanaka is a lawyer at
Yodoyabashi & Yamagami
Legal Professional Corporation,
a company with which we havea consulting agreement.

There are no special interests
between Koji Yamamoto and
the Company.

There are no special interests
between Mamiko Ozaki and theCompany.

Reason for Designation as Independent Director

We have designated him as an independent director because we believe that his
professional insight and wealth of experience cultivated over the years will bereflected in the management of the Company from an independent perspective.
In addition, while Yodoyabashi & Yamagami Legal Professional Corporation,
to which he belongs, receives advisory fees from the Company based on anadvisory contract, the amount is small compared to the size of said corporation.
Therefore, we believe that he is independent from the Company’s management
and maintains a neutral and fair position that does not pose a risk of conflict ofinterest with general shareholders.
We believe that his professional knowledge and wealth of experience related toaccounting as a longstanding university professor will be reflected in the
Company’s management.

Reason for Designation as Independent Director

We have designated him as an independent director because we believe that his
professional insight and wealth of experience cultivated over the years will bereflected in the management of the Company from an independent perspective.
Mamiko Ozaki has been active over many years as a technical researcher. She isalso the first woman to serve as the Chair of Japanese Society for Comparative
Physiology and Biochemistry. We believe that her professional insight andwealth of experience cultivated over the years will be reflected in the
management of the Company.

Reason for Designation as Independent Director

We have designated her as an independent director because we believe that her
professional insight and wealth of experience cultivated over the years will bereflected in the management of the Company from an independent perspective.
We believe that his wealth of experience and broad insights cultivated over theyears as a manager will be reflected in the management of the Company.

Reason for Designation as Independent Director
Tsuyoshi Inoue

Tsuyoshi Inoue is Director andAdvisor of DAIICHI KIGENSOKAGAKU KOGYO CO., LTD., oneof our suppliers

We have designated him as an independent director because we believe that his
wealth of experience and broad insights cultivated over the years as a manager
will be reflected in the management of the Company from an independent
perspective. In addition, as stated on the left, he is a Director and Advisor at oneof our suppliers. However, the transaction amount is small, and said company is
not one of our major suppliers, so there is no business relationship that could
influence our decision-making. Therefore, we believe that he is independent fromthe Company’s management and maintains a neutral and fair position that does
not pose a risk of conflict of interest with general shareholders.

Management Committee
Basic Philosophy
The Management Committee consists of the Chairman of the Board of Directors, the President, CEO & Representative Director,
directors in charge of or who head a part of the organization, and directors and executive officers who are full-time Audit &Supervisory Committee members. It meets once a month in principle to discuss and decide on policies and plans for the
execution of important business operations and the implementation of such operations. The Management Committee aims toensure certainty of results as well as to promote the efficiency of business execution.
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TAYCA CORPORATION｜Sustainability Report 2023

Matters Discussed by the Nomination and Remuneration Committee
1. Matters concerning nominations

2. Matters concerning compensation

Matters concerning selection and termination of the Representative
Director● Matters concerning the appointment and dismissal of directors● Matters concerning the appointment and dismissal of executive
corporate officers and executive officers● Matters concerning the composition of the Board of Directors● Matters concerning nomination policy/criteria and decision-making
processes● Matters concerning the formulation and operation of succession plans●

Matters concerning the total amount ofcompensation and individual compensation for
directors● Matters concerning compensation
policies/levels for directors and executive
officers●

3. Other important managerial matters deemednecessary by the Board of Directors

Skill Matrix for Directors and Audit & Supervisory Committee Members
Experience / Knowledge / Expertise
Position, etc.

Name

OutsideIndependent

President, CEO &Representative
Director

Shunji
Idei

Director
Managing Executive
Officer

Masahiko
NishinoDirector
Managing Executive
Officer

Yasuyuki
Nakatsuka

Director
Senior Executive
Officer

Tamataro
IwasakiDirector
Senior Executive
Officer

Yoshihiro
MurataDirector
Audit and Supervisory
Committee Member(Standing)

Akira
MiyazakiDirector
Audit and Supervisory
Committee Member

HitoshiTanakaOutsideIndependent

Director
Audit and Supervisory
Committee Member

Koji
Yamamoto

OutsideIndependent

Director
Audit and Supervisory
Committee Member

MamikoOzaki

OutsideIndependent

Director
Audit and Supervisory
Committee Member

Tsuyoshi
Inoue

OutsideIndependent

Corporate
Management

Manufacturing
Legal /
Technology /Finance /Risk
Accounting Research andManagement
Development

Sales Personnel Overseas Environmental/ Labor Experience
Society

TAYCA CORPORATION｜Sustainability Report 2023

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About Tayca Group

GovernanceManagement
Strategy

Sustainability

Inspiring
Materials

Environment

SocialGovernanceCompliance

Compliance System

Basic Philosophy

Compliance Committee

All members of the Tayca Group comply with our established Code of Conduct, recognize our corporate social responsibility, andconduct fair and transparent business activities.
In addition, we have established a Compliance Committee to oversee compliance status and address any violations that may
arise.

We have established a Compliance Committee for the purpose of deliberating and formulating compliance systems and policies,
monitoring the status of compliance implementation, and addressing incidents of noncompliance. It meets every six months inprinciple.

Tayca Group Code of Conduct
1. Compliance with Laws and In-house Rules
In performance of our duties, we will comply with any and all applicable laws and ordinances, as well as in-house rules andregulations.
● We will fully recognize social ethics, and act with good judgment and a sense of responsibility as a member of society.
●2. Contributions to Society●●

We will respect local history, culture and customs, and conduct social activities to contribute to the development thereof.
As a member of a local community, we will actively foster communication with the local community, and fulfill the role of acorporate citizen.

Internal Reporting“Compliance Cards” are distributed to employees of the Tayca Group and partner companies.
When a report of a matter involving a compliance issue is received at the Reporting Desk, the content of said report is reported
to the Corporate Planning Department and a Compliance Committee meeting is held.
We prohibit any disadvantageous treatment of a person who has made a report in relation to said report, and ensure that thisis thoroughly understood throughout the company.

Compliance Training
The Tayca Group conducts timely compliance training, including preventing harassment. We will continue to promote theeducation of our employees as a corporate group that not only complies with laws and regulations, but also instills confidence incustomers to do business with us.

3. Protection of the Global Environment
We will endeavor to protect the environment in accordance with laws and ordinances pertaining to the environment, andtake a planet friendly approach to our corporate activities.
● We will actively promote energy savings, resource savings and recycling, and endeavor to promote the efficient use ofresources and energy, and the reduction of waste.
●

4. Thoroughness of Corporate Ethics
We will perform all business transactions according to the principle of fair, transparent and free competition.
● We will take a firm attitude against antisocial forces and organizations.
● We will maintain healthy relations with individuals and organizations concerning political and administrative activities.
●

5. Respect of Employees’ Human Rights
We will respect individual ability and personality of our employees regardless of their nationality and gender, and behave ingood faith and in a fair manner.
● We will endeavor to create a safe, clean and healthy working environment that allows employees to work comfortably.

Business Continuity Plans (BCP)
Basic Philosophy
In the event of natural disasters such as earthquakes, tsunamis, and typhoons, accidents such as factory fires, and pandemics
due to new viruses that threaten business continuity, we prioritize the value of human life and restore supply systems startingfrom our main products to preserve and enhance corporate reliability.

Basic Policy on BCP●

1. We will make our utmost efforts to ensure the safety of our employees and their families.
2. Strive to prevent secondary disasters so as not to cause inconvenience to the local community.

6. Safety Concerning Products
In each phase of development, design and manufacture of products, we will always pay attention to safety, and aim at
providing high-quality, highly safe products.
● In case of any accident regarding the products provided by us, we will promptly and adequately handle the situation with thesafety of consumers and customers as the foremost priority.
●

7. Strict Management of Corporate Assets and Information
We will ensure the internal management of the confidential information, intellectual property rights and any other tangible aswell as intangible assets of the Corporation. In addition, we will handle personal information with due care to prevent the useof such personal information for purposes other than originally intended, or the loss, leakage and the like thereof.
● We will also respect and properly handle any confidential information, intellectual property rights and personal informationof other corporations.
● After retirement from the Corporation, we will observe and fulfill our confidential obligations concerning the confidential
information obtained during our tenure of office.
●8. Fair Disclosure of Corporate Information●

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We will apply proper accounting treatment in accordance with relevant laws and ordinances, and endeavor to rapidly andadequately disclose corporate information.

TAYCA CORPORATION｜Sustainability Report 2023

3. We will strive for business continuity by continuing the supply of our main products or restoring the supply
system as quickly as possible. We will make every effort to continue our business.
4. Contribute to the local community by cooperating in the reconstruction of the surrounding areas.

BCP System
Tayca has implemented a BCP system, comprising the BCP Task Force headquarters at the head office and BCP Divisions in eachregion. The BCP Task Force is lead by the BCP Task Force General Manager, who is the President, and regional BCP Divisions areheaded by a general manager representing each region.

BCP Training
We conduct employee training at each business site based on business continuity plans to prepare for unforeseen
circumstances. We have prepared a BCP manual and conduct tabletop drills in expectation of disasters so that we can resume
production activities and fulfill our supply responsibilities as soon as possible.

TAYCA CORPORATION｜Sustainability Report 2023

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About Tayca Group

Governance

Information Security
Basic Philosophy
The use of information systems and DX is essential for the operation of companies and organizations. While there are advantages
to managing information digitally, there are also various security threats such as virus infections and unauthorized system access,as well as equipment failures due to disasters and other issues. Therefore, we are taking measures to protect confidential
corporate information from these various risks.

Basic Policy

Management
Strategy

3. Implementation of education
Tayca will aim to increase awareness of information security by conducting the required education for all employees
so that the importance of information assets is fully recognized.

Environment

SocialGovernanceTrade name

Tayca Corporation

Head Office

4-11-6 Tanimachi, Chuo-ku, Osaka-shi, 540-0012

Head Office Address

1-3-47 Funamachi, Taisho-ku, Osaka-shi, 551-0022

Established

December 22, 1919

Capital stock

9,855,953,999 yen

Business year

From April 1 to March 31 of the following year

Number of employees

832 (consolidated)
554 (non-consolidated)

Description of business

Manufacture and sale of various industrial chemical products (including titanium dioxide, surfactants, sulfuric
acid, micro titanium dioxide, surface treatment products, non-polluting anti-corrosive pigments, piezoelectricmaterials, and electroconductive polymers)

Factories

Okayama-shi, Akaiwa-shi, Setouchi-shi (all in Okayama Prefecture), Osaka-shi

Consolidated
Subsidiaries

Domestic
Tayca Warehousing Co., Ltd.
Tayca Trading Co., Ltd.
TFT Corporation

2. Observance of laws
Tayca will observe such as laws and regulations, concerning information security.

Inspiring
Materials

Corporate Information (as of March 31, 2023)

1. Protection of information assets
Tayca will strive to fully prepare by putting regulations in place to secure the confidentiality, integrity and availability of
information assets and taking appropriate measures organizationally and technologically so that no unauthorizedaccess, leakage, falsification, loss or theft, etc., occurs with regard to information assets.

Sustainability

Tayca M&M Corporation
JAPAN SERICITE CORPORATION

Overseas
TAYCA (Thailand) Co., Ltd.
TAYCA (VIETNAM) CO., LTD.
TRS Technologies, Inc.

4. Continuous improvement
Tayca will aim for the establishment and continuous maintenance and improvement of information security
management systems to respond to new threats by regularly carrying out audits and evaluations of the state of
implementation of information security measures, and reviewing information security measures and related
regulations and management systems as needed.

Information Security Measures
Our basic approach is based on multifaceted security measures (multi-layered protection and disaster mitigation). We implement
the following measures:●

Establish an information system management system●

Establish an information sharing system centered around the System Management Division●

Implement security inspections through IT asset inventory surveys●

Implement security inspections through ID/password management●

Conduct education (holding information sessions, posting on bulletin boards, etc.) when new systems are introduced andimportant incidents occur

Stock Status (as of March 31, 2023)
Prime Market of the Tokyo Stock Exchange
Listed market
Securities Code 4027

Major Shareholders
Name
CACEIS BANK/QUINTET LUXEMBOURG SUB AC/UCITS CUSTOMERSACCOUNT

Number of shares held (Thousands)

Shareholding ratio (%)

2,437

10.51

MITSUI & CO., LTD

1,784

7.69

The Master Trust Bank of Japan, Ltd. (Trust account)

1,658

7.15

Mitsubishi Corporation

1,630

7.03

Yamada Sangyo Co., Ltd.

1,470

6.34

Bank Retirement Benefit Trust Account re-entrusted by Mizuho Trustand Banking Co., Ltd.
Re-trust Trustee, Custody Bank of Japan, Ltd.

1,009

4.35

Tayca Corporation Trading-Partner Shareholding Association

824

3.55

Chuo-Nittochi Group Co., Ltd.

694

2.99

Kansai Paint Co., Ltd.

612

2.64

SUMITOMO CORPORATION

500

2.15

(Standing Proxy: The Hongkong and Shanghai Banking Corporation Limited
Tokyo Branch Custody Service)* In addition to shares described above, Tayca Corporation holds 2,539 thousand shares as treasury shares

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TAYCA CORPORATION｜Sustainability Report 2023

TAYCA CORPORATION｜Sustainability Report 2023

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4-11-6 Tanimachi, Chuo-ku, Osaka-shi, 540-0012
https://www.tayca.co.jp/english/