CSR
operations

TEL’ s corporate philosophy and CSR
Corporate philosophy

We strive to contribute to the development of a dream-inspiring society
through our leading-edge technologies and reliable service and support.
TEL considers CSR to be the embodiment of its corporate philosophy, which has been firmly upheld since TEL’s founding. TEL pursues sustainable operations from the viewpoints of corporate governance, legal and regulatory compliance, and business ethics
while creating new value through its products and services. Based on these efforts, TEL implements CSR activities to help solve
social problems. TEL will continue to pursue CSR activities to build stakeholder trust, improve corporate value, and promote thegrowth of a sustainable and dream-inspiring society.

Corporate
Philosophy

Sustainable operations
Material
issuesManagement
Policies
CSR Policy

Business operations
Creation of new value

Contribution
to the solutionof socialproblems

Advancement ofdream-inspiring
society

Increasing
corporate value

TEL Values

CSR policy
TEL has developed a CSR policy that outlines the principles and values that form the foundation of its CSR activities.

61

Corporate Activities

TEL provides safe, high-quality products and services to customers around the world and works toward theenrichment of society.

2

Business Ethics

TEL acts in compliance with the laws and regulations of the countries in which it operates, observes international regulations, and acts in accordance with strict business ethics. We do not engage in any conductthat impedes fair and open market competition.

3

Respect for Individuals

TEL respects the character and individuality of each person. We value the diversity of employees, share astrong sense of mission, and promote the development of a vibrant work environment.

4

Environment

TEL seeks to achieve harmony with the global environment. By developing and providing eco-friendly products, we strive to reduce our own impact on the environment and help our customers reduce theirs as well.

5

Communication with
Stakeholders

TEL discloses information in a fair, impartial, and timely manner; strives to engage in two-way communications; and works to meet stakeholder expectations.

6

Social Contribution

As a good corporate citizen, TEL promotes the development of local communities and the betterment ofsociety worldwide.

TOKYO ELECTRON Sustainability Report 2016

CSR promotion framework
Through the end of fiscal year 2016, TEL semiannually convened a CSR promotion committee, consisting of the CSR Promotion Corporate Director, CSR Promotion Executive Officer, and the heads of related departments. The committee discussed CSR, set goals,
and checked the progress of ongoing action plans. TEL held CSR monthly meeting to share information about departmental CSR
issues and promote improvement. Starting in fiscal year 2017, TEL semiannually convenes the CSR management council, comprising
the CEO, corporate directors, and division general managers. At the same time, the CSR promotion committee has been reorganized
into the CSR global promotion committee to further enhance CSR activities at the global level.
Theme
Sustainable
management

Goals for fiscal year 2016●

CSR
management●

Effectively use and maintain CSR management
system.
Regularly report on CSR activities at management meetings.

Results for fiscal year 2016
Convened management council joined by CSR Promotion Corporate Director and CSR Promotion Executive Officer to review CSR activities and set
goals for the next fiscal year.
●
Reported on primary CSR activities at the corporate management council.
●

Stakeholder communication
Business activities are based on good communication with stakeholders and society at large. That is why TEL considers building
stakeholder trust essential to its operations. Accordingly, TEL discloses information on the progress of its initiatives and future
direction of its business in a fair and timely manner through regular briefings and its corporate website. In addition, TEL interacts
with stakeholders on many occasions and through various contact points. This helps us accurately understand their views and expectations, and allows TEL to quickly reevaluate and adjust its course of business as appropriate.
Through these efforts, TEL is reducing the latent impact of social and environmental issues on its business while seeking to improve its competitiveness and market position to maintain sustainable business operations.
Theme
Communication

Goals for fiscal year 2016
Stakeholder
engagement●●

Disclosure

Formulate company-wide stakeholder engagement policy and execution plan.
Expand the scope of communication on main social
contribution activities.

Results for fiscal year 2016●●

Evaluated the positions and priorities of stakeholders. The formulation ofengagement policy and execution plan will continue in fiscal year 2017.
Enhanced communication on TEL’s social contribution activities in Japanand abroad.

TEL’s keystakeholders

Divisions in charge

Key communication methods

Shareholders/investors

Management, IR

Earnings announcement (quarterly), Medium-term management plan briefing, Interviews, Factory tours

Customers

Sales, R&D, Marketing

Interviews, Executive meetings, Customer satisfaction survey (annual), Technology conferences

Suppliers

Procurement, Purchasing

Production update briefing (semiannual), Partners day (annual), STQA1 audit, Interviews

Employees

Management, HR

Employee meetings, Technology conference, Interviews, Global engagement survey (annual)

Local communities

Local administration teams

Factory tours, Participation in local activities, Visits to/interviews with local authorities, Social contribution
activities

Governments/associations

Local administration teams

Legal and regulatory compliance/notification/monitoring/advocacy, Industry group activities, Alliances withexternal organizations

1 STQA: Supplier Total Quality Assessment

Examples of initiatives
Technology conferences
TEL holds technology conference meetings of various sizes throughout the year,
addressing the needs of specific business units, markets, regions, and so forth.
These conferences serve as venues for information sharing and multifaceted communication and have received positive reviews from customers, TEL employees,
and other participants. Through these networking events, TEL is effectively sharing information to support innovation and the development of high value-added
products and services.

TOKYO ELECTRON Sustainability Report 2016

7

CSR operations
Participation in international CSR initiatives
TEL is taking an active part in international CSR organizations, such as the United Nations Global Compact
and the EICC®*, a CSR alliance of the electronics industry.
In fiscal year 2016, we assigned EICC promotion personnel at TEL locations in Japan and in the U.S. to promote effective compliance with the EICC Code of Conduct. These personnel also reinforce operational compliance for the Asian, European, and U.S. regions where TEL conducts business. For major suppliers, those whose
total business with TEL accounts for over 80% of our procurement spending, we have implemented a Supply
Chain CSR Assessment to ensure control over our supply chain based on the EICC Code of Conduct.
* EICC® is a registered trademark of Electronic Industry Citizenship Coalition Incorporated.

Theme
Sustainable
management

Goals for fiscal year 2016
EICC●

Results for fiscal year 2016

Build a global framework for EICC compliance promotion
and implement training.

●

Appointed EICC promotion personnel to overseas bases to build andreinforce compliance. Initiated training programs.

Evaluations by external organizations
To enhance medium- to long-term corporate value, TEL is using evaluations by external organizations
as benchmarks of its operations. In fiscal year 2016, TEL was chosen as a Sustainability Yearbook Member and an Industry Mover by RobecoSAM AG1, a research institute that cooperates with the Dow Jones
Sustainability Indices (DJSI). Since 2003, TEL has been a part of the FTSE4Good Global Index, a prominent
index for social responsibility investment (SRI). TEL has also been selected by Morgan Stanley CapitalInternational (MSCI) for the MSCI ACWI ESG Index and the MSCI World ESG Index.
1 RobecoSAM AG: An investment specialist founded in 1995 focused exclusively on Sustainability Investing

Social issues surrounding our business
International initiatives to realize a sustainable society, such as the UN Sustainable Development Goals (SDGs) and the Paris Agreement, have begun to be implemented. Businesses are also being requested to leverage their operational strength to help resolve
diverse social issues on a global level.
The semiconductor production equipment industry, which TEL is a part of, has made remarkable contributions to people’s lives
through constant technology innovation. This advancement and diversification of semiconductor process technologies comes withthe risk of higher development costs. In addition, any delay in responding to customer needs can lead to lost opportunities for entering markets. Insufficient compliance with climate change related laws and regulations in the countries where TEL operates can
put its marketing opportunities as well as its reputation at risk. There are many other social issues surrounding TEL’s operations,as listed below. We believe being prepared for and proactively responding to these issues is critical to both ensuring our businessgrowth and attaining a sustainable society.
Social issues most relevant to TEL

Risk prevention and countermeasures

Technical differentiation and innovation

Continued investment in R&D, Open innovation
Environmentally friendly products, Prevention of global warming, energy-saving initiatives

Climate change
Unpredictable risks to business continuity: natural disasters, war, terrorism, infectious diseases
Anti-corruption measures and fair business practice

BCP programs

Health and safety

Continued initiatives to reinforce governance, Education on ethics and compliance
CSR-based procurement, Participation in conflict minerals initiatives, Green procurement, BCP of suppliers
Achieving an invigorating workplace, Reinforcement of diverse programs, Human
resource development
Safety initiatives, Improvement of employee health and workplace environment

Tightening of legal restrictions by governments and others

Information gathering on related laws, Policy advocacy initiatives, Legal compliance

CSR in the supply chain
Securing human resources worldwide, retention of key personnel

Policy advocacy initiatives
It is essential for a business that its products and technologies earn public acceptance in a manner that does not disregard requirements of society. Creating synergy between businesses and society can lead to greater advancement of the semiconductor industry and bring solutions to many social issues, TEL, as a member of SEMI2 and other industry organizations, is engaged in advocacy.
These initiatives involve lobbying governments and local authorities for public policies and regulations that benefit society in apractical and rational way. TEL believes that when backed by a good grasp of regulatory trends, active participation in advocacy
initiatives can reduce the sustainability risk of manufacturing operations, not only for TEL itself but also for its customers.
2 SEMI: A global industry association serving the supply chain of manufacturing equipment, raw materials, and related services in such fields as semiconductors, flat panel displays(FPDs), nanotechnology, MEMS, photovoltaics, and related technologies

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TOKYO ELECTRON Sustainability Report 2016

Business opportunities and mid-term vision
The IoT-enabled future
From a medium to long-term perspective, the electronics industry is about to enter the age of the Internet of Things (IoT), where
everything is connected to the internet. The number of devices with internet connectivity is expected to reach 50 billion in 2020,
and the volume of data exchanged across the global networks is predicted to soar at an average annual rate of 23%. The demand for
greater data processing capabilities, faster transfer rates, less power consumption, and higher screen resolution will only continue
to rise.
Due to these trends, TEL is simultaneously pursuing R&D into more sophisticated miniaturization, new structures and new materials technologies, new memory chips based on new device technologies, and new packaging technologies. Being a semiconductor
production equipment manufacturer with diverse technologies, TEL’s diverse capabilities will be in much greater demand in thenear future.
2025 Economic impact of IoT$11.1T($900B in 2015)2020 Number of things with
Internet connectivity:

50B

2020 Market size for semiconductors(14.2B in 2014)

Automobiles$391B

Traffic($335B in 2015)
Datacenter
Smart home

MemoryProcessor
SensorCloud

Smart cityAI(artificial
intelligence)

Datacenter

Datacenter

Big data analytics
Industrial equipment

Wearable devices

2020 Market size for WFE

IP traffic

CAGR 23％$36.6B1(2014-2019)

Mobile devices

Medical treatment and healthcare($31.5B in 2015)

Source: CISCO, McKinsey & Company,
Semiconductor and WFE2 markets (worldwide): Gartner, Forecast: Semiconductor Wafer-Level Manufacturing Equipment, Worldwide, 1Q16 Update. April 14, 2016
１ CAGR: Compound Annual Growth Rate
２ WFE：Water Fab Equipment

Mid-term vision
A truly global company generating high added value and profits in the semiconductor and flat panel display industries through innovative technologies
and groundbreaking proactive solutions that integrate diverse technologies.
There are some factors that are required to integrate TEL’s diverse capabilities asa semiconductor production equipment manufacturer and provide innovative
solutions to customers. These include advanced technology development capability, services and technologies for speedily addressing customers’ problems,
and world-class earnings power. To attain the goals of our Medium-term management plan by the fiscal year ending March 2020, TEL has chosen these threefocus areas to drive the implementation projects.

Enhancingproduct
competitiveness

Reinforcing
customer
responsivenessStrengthening
earnings power

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CSR operations
Materiality assessment
Process for identifying material issues
TEL identifies material issues based on the following process:Step 1.

Identifying social issues
Various departments concerned with CSR examined the variety of social issues from thestandpoints of SDGs, the UN Global Compact,
GRI, and so on. They worked with departmentsin charge of risk management and organization strategy to select social issues that are ofgreat significance to TEL.

Step 2.

Assessment of relevant business issues
and prioritization
After the social issues were identified in Step 1,
their relevance to our business issues was assessed and key issues were prioritized.

Step 3.

Verification of feasibility
Inviting external experts as advisors, theMateriality Review Council was convened to<External ideas and assessments used for reference>
UN Sustainable Development Goals
The Ten Principles of the UN Global Compact● EICC Code of Conduct● GRI G4 Guidelines● Expectations from SRI and TEL’s ranking● Social norms and interest of the citizenry● Inputs from stakeholder communication● Views and requests given in response to our reports andthrough the Internet● Advice of third-party support organizations on analysis ofmateriality●●<TEL’ s principles, business environment,
and policies used for reference>
Corporate Philosophy
Management Policies● CSR Policy● Underscored items in the medium-term vision● Investment trends● Plans for new businesses● TEL Values● Social issues and opportunities surrounding our operations● Benchmarks of competitors in the industry●●<Principal views and suggestions obtained>●

evaluate the feasibility of each material issue identified in the previous fiscal year. The
principal views and suggestions gained at
the Council were as follows:

●

●

●

●

Materiality Review Council

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TOKYO ELECTRON Sustainability Report 2016

A review of the material issues for fiscal year 2016 revealed
that, in order to improve the choice of issues for the next
fiscal year, more emphasis should be placed on the perspectives of management strategy and social issues. In addition, operational priorities should be made clearer.
With regard to customer responsiveness, opportunities are
growing at every stage of operations from equipment design through post-sales service. Customer engagement is
becoming more important than ever before.
In step with the advancement of technology, market expectations on innovation, new technologies, and speed, areincreasing and must be addressed.
Value creation in supply chain management is essential, andwe need to maintain good relationships with our suppliers.
As the labor force in Japan is shrinking, we need to take aglobal approach to HR management and provide an environment that enhances intellectual productivity regardlessof the employees’ nationality and culture.

Identifying material issues
TEL fulfills the roles and responsibilities of a corporate citizen in the international community through its support for the UN Global
Compact and by endeavoring to solve social issues identified in the UN SDGs. In determining the materiality of the corporate issues
at hand, TEL sought to thoroughly understand its business environment and risks, while also placing an emphasis on clarifying theconnection between the social issues and TEL’s operations.
As a manufacturer of semiconductor production equipment,
Materiality matrix
TEL believes it can contribute to the advancement of technoloPerspective of
stakeholders
Enhancing productgies that support and enrich people’s lives by fully understanding
competitivenessmarket changes and real customer needs and by continuously
Reinforcing customer
responsivenessdelivering innovative next-generation products. TEL also considStrengthening earnings
ers it important to streamline its operations and gain world-classpower
earnings power. This will allow us to attain sustainable growth
Maximizing dreams
and driveand medium- to long-term improvements in the enterprise valEstablishing sustainable
ue and to realize a dream-inspiring and engaging workplace with
operations
fully functional compliance and governance systems. In addition,
this approach will continue to show TEL’s focus on human rights
and labor issues, as we continually offer challenging opportunities
for personal growth.
Based on this position, and mindful of the need to be comprehensive and concise, TEL chose the material issues for fiscal
Perspective of business continuity and growthyear 2017 while also keeping the previous year’s material issues
in perspective.

CSR goals for fiscal year 2017
For fiscal year 2017, TEL has set 16 goals related to 5 material issues and is working to achieve them.
Material issues
Enhancing productcompetitiveness

Reinforcing customer
responsivenessStrengthening
earnings power
Maximizing dreams
and drive

Establishing sustainable
operations

ThemesGoals

Innovation

Maintain development costs at the fiscal year 2016 level.

Environmental contributionof productsContinue initiatives to reduce per-wafer consumption of energy and pure water by 10% by
fiscal year 2019 (as compared with fiscal year 2014).

Customer satisfaction

Get 3.0 points or more on a 4.0 scale for every item in the customer satisfaction survey.

Quality

Implement PDCA1 training and disseminate the TEL 6-Step model (8D problem solving
method2).

Information security

Ensure all target employees take a training course in information security.

Improve profitability

See Annual Report 2016

Streamline operations

Maintain the number of TPM programs at the fiscal year 2016 level.

Create an invigorating
workplace

Provide a work environment that supports continuous growth while ensuring performance-responsive, scrupulously fair treatment of employees.

Social contribution

Maintain the number of social contribution programs at the fiscal year 2016 level.

Corporate governanceImprove the operation of the Board of Directors through annual effectiveness evaluations.

Compliance and ethics

Ensure all employees complete training courses in business ethics and compliance.

Business continuity
management

Provide business continuity plan (BCP) training at principal manufacturing sites and headquarters, revise the BCP manual and implement safety confirmation system training (all tobe performed annually).

SafetyTCIR3: Less than 0.5.

Environmental management

Reduce energy consumption by 1% on a per-unit basis4 from the fiscal year 2016 level.
Maintain water consumption at the fiscal year 2012 level (on a per-unit basis).
Reinforce supply chain management through supply chain CSR assessment*.

Supply chain management* Targeted at high-ranking suppliers whose aggregate business with Tokyo Electron accounts for 80% of
its procurement.

1 PDCA: A method for continually improving operations by iterating the four steps of Plan, Do, Check, and Act
2 8D problem solving method: A method for solving problems in quality improvement through eight disciplines or processes
3 TCIR: Total Case Incident Rate (the number of workplace injuries per 200,000 work hours)
4 Per-unit basis: Energy consumption (environmental burden) divided by values closely associated with energy consumption, such as production volume, number of employees or
total floor area

TOKYO ELECTRON Sustainability Report 201611