Sustainability Report

2023
TOKIWA Sustainability reportB r i n g i n g b e a u t y,
excitement andjoy to the worldTable of Contents
Company Overview

SOCIAL

Editorial Policy

Top message

3

Monozukuri manufacturing safe products

38

TOKIWA's Progress

4

Human rights

40

TOKIWA Value Chain

5

Prohibit forced labor, human trafficking, and child labor

41

Company/Group Overview

6

Human Resource Development

42

Health and safety

43

the human body while continuously reducing

Promoting Diversity, Equity & Inclusion

47

environmental impact throughout the supply chain) at

Employment and Benefits

50

the centre of product development and manufacturing

TOKIWA Sustainability

With the mission of bringing beauty, excitement and joy
to the world, TOKIWA has been working to solve
environmental and social issues by placing sustainable
beauty (product development that minimizes impact on

TOKIWA Sustainability

8

Materiality identification

9

Efforts to Address Key Issues

10

TOKIWA Strengths

11

Corporate governance52

our stakeholders of our sustainability initiatives andExternal Evaluation, Initiative, Certification and Accreditation

12

Compliance55

achievements.

Sustainability Promotion Structure

13Internal control system

57

Stakeholder Engagement

14

Information Security

58

Scope of Coverage

TOKIWA Sustainable Beauty

since 2020.

GOVERNANCE

The 'TOKIWA Sustainability Report' is compiled to inform

TOKIWA Corp.'s domestic locations are included in thereport; some information on TOKIWA Group companies is

APPENDIX

also included.

TOKIWA Sustainable Beauty

16

ENVIRONMENT62

TOKIWA Sustainable Beauty Activity Indicators

17

SOCIAL

68

Expansion of Clean and Green Beauty Formulation

18

January 2022 to December 2022

Sustainable packaging

21*Some information includes information before December 2021

Aiming for a Symbiotic Society

23

and after January 2023.

ENVIRONMENT

How to use PDF

TOKIWA Group Environmental Policy

25

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Category of contents

Reducing the burden on the environment

26

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Environmental Management

29

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Initiatives at Group Companies

31

Responsible supply chain

32

TOKIWA Sustainability Report 2023

Period covered

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Publication Date
November,2023

Reporting cycle
Once a year

Reference Guideline
GRI Standard

2

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Top message
Bringing beauty, excitement and joy to the world
way we manufacture and sell that makes products which
resonate with the people who use them. We believe that our
products will enrich people's lives and bring smiles to people's
faces.
Of course, it is important to make people feel beautiful, discovera new self, have courage, and smile through the use ofcosmetics. However, it is also very important for TOKIWA, as amanufacturer, to contribute to solving environmental issues
such as how to reduce CO₂ emissions, in the manufacturing anddelivery processes, how to utilize resources effectively, and how
to pass on a better environment to the next generation.

TOKIWA was founded in 1948 in Nakatsugawa City, Gifu
Prefecture, surrounded by nature and forests, as a pencil
manufacturer. Since then, while consistently engaged in
manufacturing products to enrich the lives of consumers, weentered the cosmetics business in 1969 when we began
production of eye pencils utilizing our know-how in pencil
manufacturing.
Currently, TOKIWA is concentrating its management resourceson the cosmetics business, with the mission of bringing beauty,
excitement and joy to the world, and aims to enrich the lives ofpeople around the world through the development andmanufacture of cosmetics, and to make the world a place full ofsmiles.

Monozukuri manufacturing that responds toenvironmental changes
We feel that changes in society and lifestyles are changing theway we perceive cosmetics as a product group, and we arebeing asked to innovate. It is not only about improving thequality and functions of products as before, but also about the
TOKIWA Sustainability Report 2023

As a manufacturing company, business growth and resource
consumption are considered to be correlated. We believe thatsustainable business growth and addressing environmental
issues can be reconciled by accelerating investment in more
efficient production models and reducing environmental impact,
such as the development and manufacture of refillable products,
the development of long-lasting products, recyclable containers,
and the use of renewable energy.
Promotion of Sustainable Beauty
TOKIWA's sustainable beauty is a combination of clean beautyand green beauty. This is our effort to minimize the impact on
the global environment and human body while improving
quality and functionality.
Due to the nature of cosmetics as products that come into
direct contact with the skin, care must also be taken regarding
ingredients and formulations. In addition to complying with thelaw, we do not use ingredients that may affect the human body,and we invest in the procurement of safer raw materials.
Furthermore, we invest in the procurement of safer raw
materials and pay attention to the improvement of the lives of
producers of such raw materials.

DE&I as a driving force for business growth
Most users of cosmetics are women, and it is important for
women to play an active role in the development of better
products and business development. Promoting diversity,
equity, and inclusion at TOKIWA in particular will be a driving
force for sustainable business growth, and we will
simultaneously pursue understanding and promoting DE&I
initiatives that transcend gender.
Furthermore, we believe that the development andmanufacture of better makeup products and their delivery topeople around the world through collaboration with various
companies will enable people to become more confident, and to
rediscover themselves, which is a major pillar of social
contribution that TOKIWA can contribute. More than half of theworld's population of over 8 billion people do not use makeup
on a daily basis, and we are committed to working together
and developing new products with the belief that providing
makeup products that are easy to use, convenient, and easy toenhance one's attractiveness will enrich the lives of people
around the world and fill the world with smiles.
TOKIWA's mission cannot be realized without theunderstanding and cooperation of all our stakeholders,
including our business partners, suppliers and employees. We
hope you will take the time to read this Sustainability Report,
and together we can steadily strive for a better future.

Hiroyuki Kanai,
President and CEO
3

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXTOKIWA's Progress
Our company, which started out manufacturing pencil shafts, has grown by diversifying into paper manufacturing and otherResearchersbusinesses. We entered the cosmetics business in 1969, and since 2009 we have continued to develop as a cosmetics OEM specialist.

100+

The manufacturing technology and spirit that we have cultivated over the years has been passed on to formulation development
Annual production

and container development, and being able to perform these in an integrated manner is one of our strengths.

100 mil + units*TOKIWA global 2022

Patents

400+

Tokyo HQ

*In Japan

2009
Inauguration of TOKIWA Corporation

Factory at the time ofits establishment

Paper Manufacturing Nagoya
Factory
Automatic shaft-making
machine No. 1

1954
Company Flag of
TOKIWA Sangyo Co.

1948

Automatic grader for shaft
plates (TAS-1)

1965

1983

Groundbreaking of
Nagoya Paper Mill

Developed automatic grain
grading device for shaft
plates.

Development of
the automatic
shaft making
machine1991
Merger of four separate
enterprises
Start of TOKIWA
Corporation

2003

TOKIWA Sangyo Co.
established
Manufacture of pencil
shaft plates

1996

Cosmetics division
opened in Tokyo
TOKIWA Sustainability Report 2023

New cosmetics
line opens at
Nakatsugawa
Factory.

Kunshan Tokiwa Cosmetics
Co., Ltd. (China) established

Ochiai Factory
established

1980
1969

Transfer of paper
manufacturing business
Became a specialist cosmetics
OEM

Kunshan Tokiwa
Cosmetics Co., Ltd.

Nakatsukawa Factory

Ochiai Factory4Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXTOKIWA Value Chain
The TOKIWA Group captures the desires and needs of our customers and the consumers beyond them. By maximizing our strengths, we are building a value chain that deliver on the mission of Bringing
beauty, excitement and joy around the world. We will continue to promote sustainability in our value chain, aiming to create both social and economic value, in order to contribute to solving social andenvironmental issues that will continue to change in the future.

Production

Procurement

Logistics

CustomerInnovation
Proposal Sales
Proposal

TOKIWA
strength
TOKIWA
Quality

Requests and Orders

TOKIWA
Sustainable
BeautyConsumerRequirements

Product
DesignM

TOKIWA Sustainability Report 2023

Researchand ProductDevelopmentce
at Sustai Strengthening cturennabiliernaty Infrastru
r
ia l
e
s
Gov
5

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

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APPENDIX

Company/Group Overview
TOKIWA Corporation

TOKYO Tokyo HQ

Date of Establishment

July 23, 1948OSAKA Osaka office

Nakatsugawa Head Office

Head Office Location

1-9-5 Oji, Kita-ku, Tokyo

AICHI

Nakatsugawa factory

Trade name

Representative
CapitalNo. of employees

Nagoya office

Hiroyuki Kanai, President and CEO

862

２companiesJapanfacilities (Production facilities:

Ochiai factory

SAITAMA

76.70 million yen

TOKIWA Group, Inc. 6 companies
7 locations)

GIFU

４companies

Global technology centre

Mizunami factory

Global logistics centre

Toki factory

SONAX Corporation

Komanba factoryGroup
Companies (Production facilities:
2 locations)as of December 31, 2022

OfficeResearch centre

Production facility

CHINA
Kunshan Tokiwa Cosmetics Co., Ltd.
Shanghai office
Guangzhou office

PHILLIPINESTOKIWA Subic Corporation

USA
TOKIWA COSMETICS INTERNATIONALFRANCETOKIWA-C.M.C EUROPE INC. (PARIS OFFICE)TOKIWA Sustainability Report 2023

6

TOKIWA
Sustainability

TOKIWA Sustainability Report 2023

7

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXTOKIWA Sustainability
TOKIWA is committed to Bringing beauty, excitement and joy

to the world by becoming a truly sustainable company thatbalances business growth and social contribution through being
environmentally friendly and being people friendly
Based on this concept, we aim to realize a sustainable society
and enhance our corporate value by identifying materiality

Missionissues, setting targets, and promoting initiatives.

2030
visionBringing beauty,
excitement and joy to the world.
To become a truly sustainable company thatbalances business growth with social contribution⚫ The first choice for customers of prestige and masstige colour cosmetics.
⚫ To be the best partner for all stakeholders, including customers, suppliers,
employees, and shareholders

Keyissues⚫ Recognized internally and externally as a manufacturing company that isfriendly to people and to the earth

Environmentally friendly

People friendly⚫ Integrated development of sustainable⚫ Diversity, Equity and Inclusion

formulations/containers⚫ Sustainable Procurement⚫ Partnership-based value creation⚫ Reduction of CO₂ emissions over the⚫ Generate continuous innovation, improve technological capabilities

entire life cycle
TOKIWA Sustainability Report 2023

⚫ Human Resources Training & Development⚫ Ensure product safety and security
8Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Materiality identification
Materiality (key issue) Identification Process
With environmentally friendly and people friendly as the main

Environmentally friendly Reduce environmental
impact and coexist in harmony with nature

pillars of TOKIWA's sustainability, we conducted a materiality
analysis based on the importance of material issues from asocial perspective, which considers our responsibility as amanufacturing company to address global environmental andExtractionof potential
themes

85 candidate themes (environment: 20,
society: 46, governance: 19) were extracted
based on the UN Global Compact ISO 26000,
SDGs, and examples from other companies.

Importance
RatingManagement committee members, employees,
and external experts discuss the selectedcandidate themes and evaluate theirimportance to business growth and corporate
value improvement. Materiality matrix was
created by mapping the evaluation results on
the two axes of importance from theperspective of society and importance to
TOKIWA, and 8 materialities (key issues)
were selected.

social issues, and importance to Tokiwa, which considers
business impact and our commitment to corporate growth.

1 Integrated development and of sustainable
formulations/containers

2 Sustainable procurement
3 Reduction of CO₂ emissions over the entire life cycle
People Friendly Fulfilment of Social Responsibility
1 Diversity Equity & Inclusion
2 Human Resources Training and Development
3 Partnership-based value creation
4 Generate continuous innovation, improve technologicalcapabilities

5 Ensure product safety and security

Validity
Assessment

Selected 8 materialities are reviewed by the
Board of Directors and finally approved by theCEO.

Materiality Matrix

Importance from a social
perspective

Approval

Verify the appropriateness and consistency ofthe selected materialities by exchanging
opinions with the department in charge ofeach issue and external experts.

3
2

1
5
1

2

4
3

Importance to TOKIWA
TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Efforts to Address Key Issues
At TOKIWA, each department sets specific targets for initiatives based on the identified materiality.
To achieve this goal, we make decisions as necessary to allocate management resources in a focused manner, and we promote this through ESG projects and sustainable beauty projects.
Each of these efforts will also contribute to the SDGs, and the entire company will work together to take on the daily challenge of becoming a company that balances business growth with social contribution.
Materiality (Key Issue)

Classification

Environmentally
Friendly

Reduction ofenvironmental
impact andcoexistence withnature

KPI

Goals (actions to be taken)

2023

Integrated developmentof sustainable
formulations/containers① Promote commercialization of clean beauty formulations(Percentage of new products supported each fiscal year)② Promote adoption of 3R containers

2030

① 80％
② 40％

① 90％
② 45％

Sustainable Procurement① Use of RSPO-certified palm oil-derived raw materials① 80%② No procurement of raw materials using mineral② Continue to maintain zero
resources mined in conflict areas
procurement③ Procurement of raw materials in compliance with REACH ③ Maintain and continue
regulations
compliance① 85％② Continue to maintain zeroprocurement③ Maintain and continuecompliance① 90％② Continue to maintain zeroprocurement③ Maintain and continuecompliance

CO₂ emissions overthe entire life cycle volume
reduction

CO₂ emission reduction (vs. 2019 Scope 1 and 2*)

20%

28%

55%

Diversity Equity &Inclusion

Increase the percentage of women in management
positionsFemale managers:
7%

Female managers:
20%

Female managers:
30%

Company-wide education and training program
Development and deployment of the TOKIWA Campus• Establishment of training system• Introduction of e-Learning• Establishment of production

Development of departmental
and hierarchy-specific training
content development manuals
and training tools

TOKIWA Campus training
system completed and inservice

Positioning partnerships between companies as part of ourdevelopment strategy with domestic and international
Number of joint development
partners, and providing products that delight our customers projects:
through synergy effects.
2/year(Promote joint development with partner companies)

Number of joint development
projects:
4/yearNumber of joint development
projects:
5/year

Generate continuous
innovation, improve
technological capabilities

Clarify development projects and take advantage of thecharacteristics of formulations and containers tosimultaneously develop and create unique innovation items(Patenting Innovation)

Number of patent and otherapplications:
20/yearNumber of patent and otherapplications:
20/yearNumber of patentapplications:30/year

Ensure product safety andsecurity

Keep serious problems at zero

0/year0/year0/yearHuman Resources Training
and Development① 63%② 32.5%2027

training system• Next Generation Leader Training
People friendlyPartnership-based value
Fulfilment of Social
creation
Responsibility* Scope of Greenhouse Gas (GHG) Emissions

TOKIWA Sustainability Report 2023

SDGs to be addressed

Scope 1: Direct emissions from own fuel use and industrial processes
Scope 2: Indirect emissions from the use of electricity and heat purchased by the company

10Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

TOKIWA Strengths

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Innovation

Since entering the cosmetics business in 1969,
we have continued to develop our strengths and create products that are
loved by general public.

Simultaneous development of
formulations and containers
Unique design and patented technology
Production technology to realize ideas

Innovation

TOKIWA Quality
World-class quality
On-time delivery and service response
Global production with TOKIWA quality

TOKIWA
Quality

Makeup Contract Manufacturing
Market Entrant Share (FY2022)
35.2％ (no. 1)

TOKIWA Corporation

3 Strengths

Number of items handled
1,200+(1,000+ in Japan)

TOKIWA
Sustainable
BeautyTOKIWA
Sustainable Beauty
TOKIWA Sustainable Beauty Philosophy
Formulations (Clean & Green)
Containers (Clean & Green)

Number of transacting companies
220+(180+ in Japan)* Source: Yano Research Institute 2023
Cosmetics Contract Manufacturing, Containers and Ingredients Market
Outlook and Strategy

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

External Evaluation, Initiative, Certification and Accreditation

APPENDIXAs of April 30, 2023,

TOKIWA is working toward its vision of 2030,
to be a truly sustainable company thatbalances business growth with social
contribution, in order to realize its mission ofbringing beauty, excitement and joy to theworld.
We promote sustainable business activities byendorsing external evaluations and initiatives,
obtaining the relevant certifications, andcontributing to sustainable society by
manufacturing cosmetics.
In this context, we received an A- rating in
2022 Climate Change from CDP, an

2022 CDP Climate Change Report A2022 Supplier Engagement

EcoVadisBronze Certification

Leader Selection

FSC®CoC Certification

RSPO Associate Member
Supply Chain Certificationinternational non-profit organization, andwere selected as a 2022 Supplier
Engagement Leader.
In April 2023 we joined the United Nations
Global Compact, which is recognized as auniversal value, to fulfil our social
responsibility in corporate activities based on
the ten principles in the four areas of humanrights, labour, environment, and antiIS 759490 / ISO27001

corruption, as advocated by the United
Nations.

April 2023

JIS Q 14001

Joined the United Nations

JSAE 403

Global Compact

Certification obtained at TOKIWA* Scope of application: International Sales
Division, Information Systems Department

Ochiai Factory

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Sustainability Promotion Structure
TOKIWA Sustainability Promotion Structure
TOKIWA formulates sustainability strategy,
including materiality issues and contributions
to a sustainable environment and to society,and discusses its progress at the Management
Committee chaired by the CEO. The contentsof these reports are reported to the Board of
Directors to oversee execution.
To promote sustainability activities, a Chief
Sustainability Officer (CSO) has been
appointed and given responsibility andauthority for sustainability activities
throughout the TOKIWA Group. Under the
CSO's direction, the Sustainability Promotion
Division is responsible for execution ofoperations related to promotion, disclosureand spreading the news throughout thecompany.
As a specific promotion activity, we haveorganized the ESG Project, and each team
(Environment Team, Labour & Human Rights
Team, Ethics Team, and Procurement Team)is responsible for objectively evaluating andidentifying problems from an ESG perspective
and promoting improvements.
In addition, we believe that it is essential topromote sustainability by working on CSV(Creating Shared Value) and advancing
research and development while being
conscious of our contribution to the SDGs.
The Sustainable Beauty Project manages
these development efforts, targets andachievements, shares them within thecompany, and promotes them as importantmeasures at the centre of our management
plan.
TOKIWA Sustainability Report 2023

TOKIWA Sustainability Promotion Structure

Message from the Chief Sustainability Officer

We contribute to the realization of a sustainable society
Board of directors

by manufacturing products that are friendly to people
and the environment.

CEO

In the market environment, people's views and values are diversifying amidst

President

rapid changes in lifestyles, and the traditional uniform concept of affluence andManagement Committee(Sustainability Strategy)

happiness is becoming increasingly diversified.

CSO

Chief Sustainability Officer(Officer in Charge)

In line with its corporate mission, Bringing beauty, excitement and joy to theworld, TOKIWA is committed to becoming a truly sustainable company thatbalances business growth and social contribution, placing sustainability at the

Sustainability Promotion Divisioncentre of corporate management and aiming to realize a sustainable society
through manufacturing that is friendly to people and the environment before
the year 2030.

External Relations andPublic Affairs Department

Sustainability promotion dept.

We are accelerating sustainability actions through our business activities incollaboration with stakeholders in the value chain, as well as with regional
offices and corporate divisions within the Group.

ESG Projects

ESG Project Organization Chart

Under the leadership of our Chief Clean Beauty Officer in 2020, we have placedsustainable product development at the centre of our product development

Steering Committee

strategy and have fully launched actions to deliver sustainable products
through our core technologies. In 2021, the Chief Clean Beauty Officer will be

project ownerrenamed Chief Sustainability Officer and a new Sustainability Promotion
Department will be established to deliberate and manage sustainability-related

project leader

issues for the entire TOKIWA Group in a professional manner, thereby further
strengthening the promotion structure throughout the company and speeding

secretariat

up the process of ESG-conscious management.
We will continue to seize the rapid changes in the world and strive to create

Environment
Team

Labour and Human
Rights Team

EthicsTeam

ResourcesTeam

Sustainable
Beauty Projectsocial value and solve social issues through our core business.
Chief Sustainability Officer Senior Vice President

Masaharu Ichioka

13Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Stakeholder Engagement
TOKIWA considers its employees, shareholders, customers, suppliers, industry associations, and local communities to be particularly important stakeholders.
By engaging in dialogue, collaboration, and mutual understanding with our stakeholders, we hope to realize our mission, Bringing beauty, excitement and joy to the world
and contribute to the realization of a sustainable society.

In addition to appropriate compensationand occupational health and safety, each
employee feels a sense of fulfilment andcontinues to grow with the company.

employee

Shareholder

Customer

Implement initiatives based on timely andappropriate disclosure and constructive
dialogueNot only embodying ideas, but also
striving to understand customers' needs
and making proposals to solve problems

Sharing of company plans, performance, status, etc.; exchange of opinions between management andemployees

town hall meeting

Twice a year

Engagement Survey

Annually

Share the strength of employees' connection to the company and identify issues

Monthly

Communicate and share health and safety information

Safety and Health Committee
Support for Employee Health Promotion

As and when

Industrial physician interviews, stress checks, and mental health careInternal Reporting Desk

As and when

Third-party contact for early detection of misconduct and protection of whistleblowers

AGM

Annually

Discussion and resolution on business report, consolidated financial statements, audit results and otherreports and resolutions

Mid-term Business Plan

Annually

Report and discussion of mid-term business plan

Financial Results Briefing

Annually

Report on financial results, management strategies, business initiatives, etc.

Daily sales activities

Daily

Sales activities to expand orders for new products and progress of new product projects

Product Presentation

As and when

Presentation of products that anticipate customer needs

Regulatory and quality information exchange

As and when

Exchange of information, sharing and opinions on cosmetics-related regulations in Japan and overseas

Participation in cosmetics-related exhibitions

Annually

Attract new customers by participating in cosmetics-related exhibitions in Japan and overseas

Supplier

Industry Associations
Member Companies

Local Community

Build good partnerships through fair,equitable, and open transactions basedon rational processes and judgement, as
well as procurement that takes humanrights and the environment into
consideration.

Constructive information sharing for
further development of the industry
Conducting a dialogue on activities tobecome a company that the community
can be proud of

TOKIWA Sustainability Report 2023

Explanation of Purchasing Policy

As and when

Share and understand sustainable purchasing policies

CSR Procurement Questionnaire

Annually

Evaluating and understanding the implementation of the policy

quality review meeting

As and when

Proactive avoidance of quality risks and sharing of opportunities

quality audit

As and when

Proactive avoidance of quality risks and sharing of opportunities

Japan Cosmetic Industry Association

As and when

Sharing of information on industry guidelines and trends

Japan Cosmetics Contract Manufacturers
Association, JC/OEM Seminar.

Once every
two months/
annually

Sharing of OEM industry trends, issues, information, etc.

Exchange and sponsorship activities, etc. in
the region according to the region (domestic
or overseas)

As and whenInteraction with local government and local residents, exchange of opinions and promotion of understandingof corporate activities

14

TOKIWA
Sustainable Beauty

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXTOKIWA Sustainable Beauty
Through the Sustainable Beauty Project,
TOKIWA promotes the development of sustainable products that are friendly to people and the environment.
In research and development, we believe it is important
to work toward solving issues one step at a time, day byday. We define TOKIWA Sustainable Beauty as an all-TOKIWA Sustainable Beauty

encompassing definition of a formulation or containerthat meets the criteria for being friendly to people andthe environment. Even if only one of its formulations orcontainers is so.
In this context, we also consider environmental issues
that may affect not only those who use cosmetics but

TOKIWA
Clean Beauty

TOKIWA
Green Beauty

TOKIWA Clean Beauty means

TOKIWA Green Beauty means

also many other people as TOKIWA Green Beauty, ifeven one of these criteria is met.
TOKIWA Clean Beauty is the most stringent definition ofpeople- and eco-friendly TOKIWA Sustainable Beauty.
This is because it falls under all of the clean formulation

Setting general guidelines for a stricter

Using ingredients approved by RSPO that are

standards established by cosmetics specialty stores anddefinition of Clean Beauty than exist currently,

considerate to the environment, shifting to 3R

cosmetics manufacturers, which are becoming stricter

without using potentially harmful ingredientscontainers, effective usage of limited earth resources,
restricting carbon emissions as much as possible

every year. This also falls under our own standards(TOKIWA Clean Standards), which we pioneered in
anticipation of the global market a few years later.

People Friendly

Environment Friendly[Trademark applied for]TOKIWA Clean Standard Logo MarkTOKIWA Sustainability Report 2023

16

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

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APPENDIXTOKIWA Sustainable Beauty Activity Indicators
Sustainability Activity Target Values and Achievement Rates

3R
Clean formulation

3R containers

Percentage of clean formulations newly

Reducing regulated plastics

3R container *1 product shipment ratio

Regulated plastics *2 reduction ratio◼ Target Details◼ Target Details

registered◼ Target Details
Percentage of clean beauty formulation

Percentage of total shipments accounted

Percentage reduction in overall plastic use

products that are generally defined infor by shipments of 3R products

by replacing regulated plastics andEurope and in the US out of the total

increasing refills, etc.

number of TOKIWA formulation products

target90％2022 result

60％

2030

Progress to
goal

67％

target45％

2022 result

24％

2030

Progress to
goal

2030

target45％

2022

result16％

51％

Result（％）
100

Result（％）
100

Result（％）
100

80

80

80

60

60

60

40

40

40

20

●: Achievement rate

020●: Achievement rate

02021 2022 2023 2024 2025 2026 2027 2028 2029 2030

35％●: Achievement rate

02021 2022 2023 2024 2025 2026 2027 2028 2029 2030

*1 3R(Reduce, Reuse, Recycle) Products that fall under
the definition of container products

TOKIWA Sustainability Report 2023

20

Progress togoal

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
*2 What is Regulated Plastics: Europe, etc. Styrenic resins suchas ABS, POM resins, etc., which are increasingly regulated

17

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

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APPENDIX

Expansion of Clean and Green Beauty Formulation
Through Sustainable Beauty, we promote the development of people- andenvironment-friendly formulations and deliver products that consumers can use withpeace of mind.
Talc-freeNano-free

Preservative-freeTalc may contain asbestos, a carcinogen.

Nano raw materials (e.g., fine-particle

Cosmetics widely and generally contain

When we use talc, we make sure that it does

titanium dioxide, fine-particle zinc oxide) arepreservatives such as parabens andnot contain asbestos, but we also offer awidely used because of their high UVphenoxyethanol. We are considering

range of talc-free formulations to makescattering effect and transparency. Although

preservative-free formulations for moreconsumers feel more comfortable using talc.

its safety has been confirmed in various

safety and people-friendly products.

studies, there are some concerns in the

GMO-freeUnited States and Europe. In order to makethe products safer to use for consumers

Cruelty-free *1

Many uncertainties still remain regarding thearound the world, we are working to develop

For many cosmetics, so-called animal testing,safety of genetically modified plants. As weformulations that use UV scatterers with large

in which ingredients and final products areactively use plant-derived raw materials, weparticles and maintain their functionality.

administered or applied to animals, has been

refrain from using raw materials that may
be contaminated in order to reduce consumer

concerns.
GMO: Genetically Modified Organism

PEG-free
Although we meet safety standards for theuse of PEG, we are considering formulations
that minimize the use of PEG in order toaddress concerns about impurities it may
contain.

Silicone-freewidely conducted to confirm their safety andefficacy on the human body.

Silicones, which are used in many cosmetics,

Currently, some countries and states in theare said to be materials with low

U.S. and Europe have laws and regulations

environmental impact due to their lowthat prohibit animal testing. From thedependence on petroleum resources.

viewpoint of animal protection, we are

However, since they do not decompose in theworking on formulation development by

natural environment and their long-term

adopting raw materials and ingredients that

effects have not been elucidated, we areare not tested on animals.

working to refrain from using volatile cyclic
silicones and other silicone compounds ingeneral.

*1 From raw materials to development,
manufacturing and product distribution no
animal testing in any process.

PEG: Polyethylene Glycol
TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Expansion of Clean and Green Beauty Formulation
We are actively promoting people- and earth-friendly formulation development.
UV absorber free

Microplastic-free *1

Compliance with REACH
regulation *1

Compliance with Prop65

In recent years, studies have shown that UVWith regard to microplastics, which areabsorbers such as oxybenzone and octinoxate

believed to lead to marine pollution, theTo protect against the effects of chemical on

Water and Toxic Enforcement Act of 1986, ishave a negative impact on marine life andmanufacture, import, and sale of products

human health and the global environment,a California law enacted in November 1986.

coral reefs. They are said to be one of thethat contain microbeads and can be washed

we have adopted raw materials andcauses of coral reef bleaching phenomena

away with water have been banned in theingredients that comply with the REACH

and genetic damage to marine organisms.

United States and Europe.

regulation and are developing formulations

To protect the marine environment, we are

The Japanese cosmetics industry has also

working to develop formulations that do notbeen promoting self-imposed restrictions on

contain these ingredients.

the use of these substances in facial cleansing

containing them.
*1 A contraction of 'Registration, Evaluation,
Authorisation, Restriction and Chemicals', this isEuropean legislation on chemical management.

and other wash-off products.
Our mainstay makeup cosmetics containmany ingredients made from microplastic

The State of California compiles a list of

CHEMICALs that are known to cause cancer
and reproductive abnormalities. As of 2020,
there are over 1,000 chemicals on the list,
and the list is constantly being updated. At
TOKIWA, formulations are being developed incompliance with Prop65.

SVHC not used

Use of RSPO SC certified oilmaterials, such as feel-improving agents and

SVHC is a substance subject to authorization

To protect the natural environment, TOKIWA

lame agents, and we are working to develop

listed in Annex XIV of the REACH regulation

prioritizes the use of ingredients (rawformulations for all makeup cosmetic items(Substances of Very High Concern).

materials) manufactured with RSPO-certified(foundations, lipsticks, etc.) that contain lessmicroplastic materials.
*1 Microplastics: Solid plastic particles consisting of
mixtures of polymers and functional additives of
5 mm or less.

TOKIWA Sustainability Report 2023

Prop 65, officially known as the Safe Drinking

TOKIWA uses raw material ingredients thatoils that are well controlled.

do not contain these substances of very highconcern.

19Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Expansion of Clean and Green Beauty Formulation
Examples of products developed

Botanical Lush Lip
Botanical Gloss Lip Stick◼ Natural origin index 100 * ISO 16128 compliant

PEG Free◼ Contains glossy oil for a lustrous sheen◼ Excellent stability

RSPO

Nano Free

Carbon black free black liquid eyeliner
Carbon Black Free Black Liquid Eyeliner

Realized by developing TOKIWA's original slurry!
◼ Ultra-matte finish◼ Matte finish despite being carbon black free
◼ Long-lasting, deep tints

Micro Plastic
Free

Cruelty Free

◼ Smoothly draws uninterrupted lines.

Cleansing balm born of nature
Natural Cleansing Balm

GMO Free◼ Natural origin index 100* ISO 16128 compliant◼ Clean cleansing balm from nature◼ Clean cleansing with vegetable oil
More than 57% of the oil composition consists of vegetable oils

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Sustainable packaging (containers with consideration of reduced environmental impact, safety, etc)
Expansion of 3R products
To realize a sustainable society, we are taking
actions with the 3Rs (Reduce, Reuse,

3R

ReduceReuse

RecyclePlastic reduction(wood, paper, metal)

Refillable(long-use, visualization ofremaining volume)

Use of recycled materials(PCR, PIR)

suppression of outbreak

Recycle) of containers and packaging in mind.
Reduce – we are developing containers madeof other materials (wood, paper, metal) andbiomass plastics to reduce plastic use, as well

Reduction of petroleum-derived plastics(biomass plastics)

as long-use containers that can be used
longer than usual.

Refillable(long-use, visualization of remaining
volume)Reuse – we are expanding our refill products
so that the main body can be reused.

reuse

Refillable(customized)

Recycling – we have experience with products
using recycled materials (PCR and PIR
materials), and have developed and delivered

Ratio of 3R item usage, and target
50%

recyclingSingle material products(mono-material)

Target45％

products that are easier to recycle with asingle material (mono-material).

40%

32.5％

30%

3R

20%

24％
18％

21％

10%

0%
2020
TOKIWA Sustainability Report 2023

2021

2022

2023

2030

Example of refill type pencil
21

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GOVERNANCE

APPENDIX

Sustainable packaging (containers with consideration of reduced environmental impact, safety, etc)
Expansion of 3R products – Reuse (Refill)
TOKIWA has long specialized in refilltype products. Refill products have beenshown to reduce GHG (greenhouse gas)emissions compared to non-refill
products based on LCA (Life Cycle

Safety Considerations

Cumulative
GHG emissions (t)

(t)
2000

Approx.

62%

reduction

In consideration of safety, materials used forControl) and other regulations depending on

containers are checked for compliance withthe situation.

REACH (EU Regulation on Registration,
Evaluation, Authorization and Restriction of1500

Chemicals), FDA (U.S. Food and Drug

Assessment) verification results.

Administration), Prop 65 (U.S. Environmental
1000

Protection Agency, Office of Toxic Substances

In addition, in selecting materials, we aremoving away from materials of concern inconsideration of their impact on the humanbody. (Details P.33)

500

0
1st year

2nd year

3rd year①Non-refill(integrated with holder)① Non-refill products (integrated with holder)

4th year

5th year②Refill(pencil only)② Refill (pencil part only)
products

Container Specifications

Dispensing eyebrow pencil

Decoration

UV coating and printing on holder exterior parts

Product strength

500,000 units per year

Delivery to

EU Export Estimatedannual usage quantity:①Non-refill: 500,000 units/year②Refills: 500,000 units of main body/first year + 500,000 units of refills/every year)* For the above conditions, in the case of ② the refill section only, the annual GHG emissions are 68.9 tons vs. ① In thecase of non-refill type, the amount of emissions is 305.5 tons, which means that emissions can be reduced byapproximately 77% when used repeatedly from the second time onward.

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Aiming for a Symbiotic Society
Inclusive Design Initiatives
What is inclusive design?

Our specialty, colour makeup, has focused on the pursuit of
one's own beauty after makeup is applied, based on thepremise that one does one's own makeup. We would like tocollaborate in the development of products that are easy to use
for people with disabilities, the elderly, and others who havedifficulty applying makeup by themselves, in terms of bothprescriptions and containers, which are our strengths, in the

Exclude people with disabilities, the elderly, foreigners, etc. from theplanning and development process A design method that involves
planning and development with a diverse group of people who havebeen constrained by the constraints that have been imposed on them
Disabled
personexcitement and joy and lead more fulfilling lives.
As part of this effort, from 2023 we first began meeting

Step 1

Understand what conditions and situations occur
when people with disabilities are excluded.

Foreigners

Previous design
methods

hope that more people around the world will experience beauty,

Development of colour cosmetics withdisabled people

Step 2Non-disabled
personElderly

Design with input from and together with peopleof various demographics as much as possible.

Other

Disabled people to develop the product.

Step 3

Step 4
Disabled
personElderly

高齢者

Foreigners

Inclusive
designEnables diverse users to choose the best method
for their situation.

So that the user gets as comparable anexperience as possible.

Meeting where disabled people can touch the prototype

Other

Non-disabled
personTOKIWA Sustainability Report 2023

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ENVIRONMENTTOKIWA Sustainability Report 2023

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Company Overview

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TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXTOKIWA Group Environmental Policy
Environmental Policy
In accordance with TOKIWA's basic philosophy on theenvironment, we recognize that global conservation is
one of the issues common to all humankind, and we
regard harmony with the environment as one of themost important management issues, and promote
continuous improvement of the environment with theparticipation of all employees.

Concept of Environmental Burden Reduction
The effects of climate change, including extreme weather events, are becoming more severe
every year. In addition, we recognize that preservation of biodiversity and effective use ofresources are common issues worldwide, and we have set reduction of CO₂ emissions, reductionof water consumption, and reduction of waste as priority actions while aiming for carbon
neutrality by 2050.

1. Reduction of CO₂ emissions◼ Reduction of CO₂ emissions from energy consumption (Scope 1 and Scope 2)
To reduce CO₂ emissions from electricity and fuel used in business activities, We promote theuse of renewable energy through the purchase of free electricity and the introduction of solar
power generation.
◼ Increased energy efficiency
Efforts will be made to improve energy efficiency through building insulation design and theselection of energy-efficient equipment and facilities.
◼ Reduction of indirect CO₂ emissions from the value chain (Scope 3)
We will also work with each stakeholder to reduce CO₂ emissions related to the value chain of
products and services, including the manufacture of raw materials, shipping and transportation,and use of sold products.

TOKIWA Sustainability Report 2023

2. Reduction of water consumption◼ In light of the importance of water resource
management in cooperation with stakeholders,we will promote sustainable use of water
resources by striving to understand the water
cycle and the environment in the basin, reducewater consumption, use water effectively, andthoroughly manage water quality.
◼ We will not only comply with laws andregulations, but also encourage everyone,
including employees, to contribute to reducing
water consumption, while respecting the healthywater cycle in the water system, the uniquelocal culture related to water, and water andsanitation.

3. Waste reduction◼ In order to use limited resources carefully,
we aim to support our customers'
decarbonisation and provision of productsthat comply with laws and regulations byproviding total services ranging fromdevelopment of low-carbon cosmetics todevelopment of cosmetic containers andpromotion of 3R (Reduce, Reuse, Recycle).
◼ We will strive to comply with the laws andregulations governing waste managementin each country and region, optimize theuse of resources throughout the value
chain, and reduce the generation of waste.
25

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APPENDIX

Reducing the burden on the environment
Decarbonisation Initiatives
In addition, the world is paying attention to decarbonisationand fossil-derived raw materials as environmental
countermeasures against climate change and otherenvironmental issues, and laws and regulations are being
tightened. We recognize that solving these environmental andsocial issues is an important management issue, and we aretaking the following concrete measures to mitigate risks andseize opportunities.
◼ The company has been reducing CO₂ emissions by switching
to CO₂-free electricity at domestic production sites◼ The company will invest a cumulative total of approximately
100 million yen from 2021 to 2026 to support the
decarbonisation of the commissioned companies, from thedevelopment of low-carbon cosmetic formulations to thedevelopment of cosmetic containers* and the promotion of
the 3Rs (reduce, reuse, recycle) in material procurement.
*Containers for makeup cosmetics using PS (polystyrene)-free, refill,recycled materials, mono-materials, wood FSC® certified,sustainable packaging materials in wood

◼ Palm oil consumption in the world is expected to triple by2030 from 2010 levels, and there are concerns about
deforestation and supply instability due to development forpalm oil production. To prevent these problems, we arepromoting the switch from conventional palm oil to certified
sustainable palm oil.

Reduction of CO₂ emissions from energy consumption(Scope 1・Scope 2)(t-CO₂-e)

TOKIWA is committed to reducing
Scope

CO₂ emissions from electricity andBase region

2019

2020

2021

2022

Japan

326

245

305

315

Overseas

247

320

210

136

Total

574

565

515

452

Japan

2,707

2,447

1,653

233

Overseas

2,809

2,615

2,784

3,278

Total

5,516

5,062

4,437

3,511

fuel used in its business activities. As
part of this effort, we use renewableenergy in our factories, offices, andScope1other facilities and constantly
promote energy efficiency.
Scope2

Carbon neutrality initiatives (Scope 1 and 2)
Scope 1・2 Emission Trends(t-CO₂-e)
8000
Scope1 Japan

Scope1 Overseas
6000
Scope2 Japan
Scope2 Overseas

4000

Changes in Evaluation Results by CDP
2019

2020

2021

2022

C

B

B

A-

ClimateChangeAssessment

2000

0

2019

2020

2021

2022

2030

2050

（target）
TOKIWA Sustainability Report 2023

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TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Reducing the burden on the environment
Use of Renewable Energy (Scope 2)

Improve energy efficiency (Scope 2)

Ten TOKIWA-owned sites in Japan are promoting the use of

TOKIWA's factories strive to improve energy efficiency

renewable energy by purchasing CO₂ -free electricity from electric

through building insulation design and the selection of

power companies.

efficient equipment that leads to energy savings.

In 2022, the share of renewable energy in TOKIWA's overall
electricity was 50%.
We will continue to actively promote the installation of solar panels
at our factories and sites in China, the Philippines, and elsewhere.

◼ Conversion to LED lighting
We are promoting the use of LEDs for factory lighting to
reduce power consumption. (By October 2022, all lighting
at Nakatsugawa, Ochiai, Mizunami, Komanba, and Tokifactories will be converted to LED)

Toki factory ariel view
Solar power generation(rooftop-mounted) 48Kw

◼ Highly insulated buildings
In order to contribute to the reduction of CO₂ emissions by
reducing energy consumption for air conditioning andother equipment, the Mizunami Factory has adopted
lightweight insulation with excellent heat insulation
performance for its buildings.

TOKIWA Mizunami FactoryCO₂-free electric powerpurchasing contract

TOKIWA Sustainability Report 2023

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TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Reducing the burden on the environment
Reduce/reuse/recycle waste

Understanding indirect CO₂ emissions (Scope 3) in the value chain
Energy is also consumed and CO₂
is emitted at various stages in thevalue chain of products andservices, such as during the
manufacture of raw materials,
shipping and transportation, anduse of sold products. Regarding
the indirect CO₂ emissions in suchvalue chains, First, we are trying tounderstand the scope of our direct
involvement, and we recognizethat more than 95% of the total
emissions are from the productionof raw materials and othermaterials, their transportation, andthe transportation of products
shipped.

We are working to reduce, reuse, and recycle waste generated（㎏）
within the company, mainly at our factories, as part of our60
Sustainable Beauty Project. We promote reuse and recycling bystrictly sorting and managing waste by material and converting50
it into resources. In addition to corrugated cardboard and40
paper, we also reduce the volume of waste plastictransportation protection trays (blisters) by compressing and30
melting them in-house, and provide them as recycled materials.

Scope3 Emission Trends（t-CO₂-e）

150000In addition, to minimize waste generated after productshipment, we propose various initiatives to our customers,such as reducing packaging materials, simplifying containers
and packaging, eliminating manuals, and reducing the weightof corrugated containers.

100000

20
10
0

2019

2020

2021

2022

50000

We will work together with
suppliers and other stakeholders topromote reduction efforts.

After becoming recycledmaterial, it is recycled
into gardening pile andgardening rope (cordage).

0
2019

2020

2021

2022

■ 1. Products and services purchased■ 4. Transportation and delivery (upstream)■ Other（t-CO₂-e）
Scope

Category

2019

2020

2021

2022

1. Products andservices purchased

113,784

71,99977,726

94,3404. Transportation anddelivery (upstream)

3,935

4,105

4,394

8,216

Other

5,391

7,567

4,689

4,985

Total

123,110

8,367186,809 107,541

Scope3TOKIWA Sustainability Report 2023

Tray recycling volume

Reduction of water consumption
In the use of water in the production of cosmetics,
we are actively working to conserve water in the
production process, in addition to complying withthe standard values set by wastewater treatment.
Since the production process uses a large amountof water for equipment cleaning, we haveintroduced automatic cleaning equipment tailoredto the manufacturing equipment at each factory
to reduce water consumption through efficientcleaning and other means.

Unit:㎥
Municipal water2019 2020 2021 2022
consumption
Japan: Production
33,395 29,811 23,923 27,466
HQJapan: Indirect
departments

3,023

2,583

3,283

3,387

Overseas

29,246 27,093 23,121 17,918

Total

65,664 59,487 50,327 48,771

Target: 5% reduction by 2030 (compared to 2019)28

Company Overview

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GOVERNANCE

APPENDIX

Environmental Management
ISO 14001 Initiatives

Ochiai Factory ISO14001◼ Ochiai Factory Environmental Slogan

Based on our environmental policy, the TOKIWA GroupThrough the activities of our organization

has obtained ISO 14001 certification, an international

and the manufacturing of cosmetics, westandard for environmental management systems, at our

will protect limited resources and the global

Ochiai Factory (Nakatsugawa City, Gifu Prefecture) andenvironment, and promote sustainable

Kunshan Tokiwa Cosmetics Co., Ltd. (Kunshan City,

development through harmony between

China) in order to reduce environmental risks in our

the environment and the economy.

manufacturing activities.

Neighbourhood river cleanup activities
JIS Q 14001
JSAE 403
Certification obtained at TOKIWA
Ochiai Factory

TOKIWA Ochiai Factory Side of factory building◼ Ochiai Factory Energy Consumption Summary (2022 Results)
2022 Energy dependence ratio by type(% of total value)

At the Ochiai Factory, 96% of energy
comes from electricity and 4% fromLP gas used in the hot water
manufacturing facility.

Electricpower

All electricity is switched to CO₂-free

96％

electricity, contributing to the
reduction of CO₂ emissions and the
diffusion and expansion of renewableenergy.

TOKIWA Sustainability Report 2023

LP Gas4％

Electric power
Electricity
usage
Self-generated
electricity rate

2,438,000kwh/year(203,000kwh/month)０％

Other energy
LP gas

12 t/year (1.0 t/month)CO₂-free electric powerpurchasing contract
29

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GOVERNANCE

APPENDIX

Environmental Management
Ochiai Factory ISO14001◼ Reduction of waste◼ Strict adherence to water quality standards through septic tank management

The Ochiai Factory collects waste by separating it into resource

Wastewater generated in the manufacturing process at the Ochiai Factory is separated

waste and general waste, and is actively working to reduce

into treated wastewater and sludge in a septic tank facility installed on the factory sitewaste by recycling 96% of waste in FY2022.

that uses both physical treatment methods and chemical treatment methods, and is

Waste bulk, together with sludge-like waste bulk collected intreated in compliance with the standards of the Water Pollution Control Law.

the septic tank shown above, is sent to a cement company for

Due to such strict control of the wastewater treatment flow, there have been no cases

reuse as raw material for cement after undergoing variousof administrative guidance on wastewater quality in the past.

treatment processes at a dedicated contractor as shown in the
figure on the right.

We will continue our efforts to ensure compliance with laws and regulations and to

reduce the burden on the rich nature of the Kiso River system.
Converting waste bulk into cement raw material

Converting waste bulk into cement raw material[Waste disposal / recycle flow]
Waste collection

factory
block

Separation

Dehydratingprocess

Mixturecontrol

Mixing

Simplified
sedimentation
tank/Screenregulatingtank

Sludgestoragetankcoagulation
sedimentation
tank

Batch-type
activatedsludge tankpost-dehydration
drainage

biologicalfiltrationtankeffluenttank

DryingProduct shipping Moisture content
To landfill
Disposal
To moisture removal
To cement company as cement ingredient

TOKIWA Sustainability Report 2023

Sludgestoragetank

Sludgedehydrator

SludgeRecycling

To thesedimentation
ponddischarge

30Company Overview

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TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Initiatives at Group Companies
Case Studies
Group Company Name: TOKIWA SUBIC Corporation (TSC) Country: Philippines◼ Environment
TSC conducts tree planting and beach cleanups in cooperation with companies in Subic
Technopark, an industrial park where TSC is located.
The tree-planting program is designed to raise awareness about
the importance of trees in our lives and environment, and toencourage the restoration of ecosystems to improve the global
environment and minimize the effects of climate change.

Mangrove planting is expected to improve soil erosion prevention, reducewater pollution, create catchment areas that reduce flooding, andmaintain fishing activities.
Through the collection of discarded trash, we conduct beach cleanups
to raise awareness of the marine debris problem.

◼ Environment/Society
The Subic Technopark District, where TOKIWA Subic is located, holds monthly Pollution Control

Officer (PCO) meetings attended by all Subic Technopark locators, including TSC. At this meeting,environmental concerns are discussed, including any inconvenience the locator may encounter.
Other social activities include participation in and sponsorship of the National Commission on
Indigenous Peoples.
In addition, TSC has introduced compressed the working week (two days off per week while
maintaining the same weekly working hours) for a period beginning October 2021 to reduceenergy consumption by reducing operating days and improve work-life balance, while taking into
account production planning.
TOKIWA Sustainability Report 2023

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GOVERNANCE

APPENDIX

Responsible supply chain
Basic Concept
In procuring raw materials and parts, we
believe it is important to strengthen
cooperation with suppliers and build a
responsible supply chain in order tocontribute to a sustainable society.
In order to build a responsible supply chain,
we established TOKIWA Corporation CSR
Procurement Guidelines in June 2020.
In August 2020, we formulated the TOKIWA
Corporation Sustainable Raw Materials
Procurement Guidelines, taking into
consideration biodiversity conservation, zerodeforestation, child labour, forced labour, andhuman rights issues.

Plan
Do
Check
ActionTOKIWA Sustainability Report 2023

Promoting CSR Procurement –TOKIWA Corporation CSR
Procurement Checklist

Training for sustainableprocurement

In order to promote CSR procurement thatenhances the sustainability of society and thecompany, we request our suppliers to
conduct a self-check using the TOKIWA
Corporation CSR Procurement Checklist. The
self-checks are conducted in the four areas ofcompliance and risk management, humanrights and labour, environment, safety andsecurity, and information security. The PDCA
cycle, which includes periodic monitoring
based on collected responses and feedback to
suppliers, aims to build a responsible supply
chain.

Development of procurement-related policies, etc.
• TOKIWA Corporation Basic Purchasing Policy• TOKIWA Corporation CSR Procurement Guidelines• Sustainable Raw Materials Procurement Guidelines• Procurement risk analysis (risk mapping)• TOKIWA Corporation CSR Procurement Checklist
questionnaire to suppliers.

• Evaluation of Responses to the TOKIWA Corporation

CSR Procurement Checklist Implementation
Prospective
companies toimplement

Targeted
companies toimplement

Domestic &Overseas
Suppliers

Number of
responses

Rate ofresponse

We procure parts, etc. from domestic suppliers inJapan and overseas suppliers mainly in Asia.
The ratio of overseas purchase value in 2022 is
57.4% in Japan and 42.6% overseas.

15,00050.0%

12,000

40.0%

9,000

30.0%

6,000

20.0%

3,000

10.0%

0

2018

2019

2020

2021

2022

0.0%

2020 192 companies 72 companies 9 companies 71 companies 98.6%
Domestic purchasing(million yen)2021 179 companies 81 companies 10 companies 80 companies 98.8%

Overseas purchasing(million yen)2022 178 companies 44 companies 13 companies 44 companies 100.0%2023 184 companies 51 companies 13 companies－

Overseas purchasing amount ratio－

CSR Procurement Checklist Results
Target: 0 companies procuring from high-risk suppliers in 2030
low-risk

medium-riskhigh-risk

2020

－

－

－

2021

41 companies

34 companies

5 companies

2022

29 companies

14 companies

1 companies

2023

－

－

－

CSR Procurement Checklist Questionnaire• Follow-up with suppliers based on response evaluations• Disclosure of information on activities

We provide training for buyers in our
Purchasing and Procurement Department
on sustainable procurement.
（Implemented July 2023）

Domestic parts procurement ratio

APPENDIXTOKIWA Corporation Basic Purchasing
PolicyAPPENDIXTOKIWA Corporation CSR Procurement Guidelines

APPENDIXTOKIWA Corporation Sustainable Raw Materials
Procurement Guidelines

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APPENDIX

Responsible supply chain
Plastics regulations for container
materials

Plastics Regulation Flow

Plastic materials are widely used in cosmetics
containers, and there are many different
materials, which are generally used for

1990s

PVC

different parts depending on their

Polyvinyl■ Dioxin is generated when burning at low temperaturescharacteristics and properties.

→ Ozone layer depletion concerns

There are concerns that the ingredients used

■ Phthalate esters as plasticizers → CMR substance concern

in plastics may have adverse effects on the• Vinyl chloride association and environmental association

human body and the environment, and their= Safety has been confirmed.

use is being regulated worldwide.

• It is widely used in water pipes and food wrapping film.

However, the regulations are also handled
differently in different countries and regions.

2000s

PC

TOKIWA has always been quick to respond to■ Environmental hormone (Bisphenol A detected): CMR substance concernmaterial regulations.

• It has high transparency and is used for airplane windows andIn addition to complying with thesebulletproof glass.

government and manufacturer regulations,
TOKIWA is voluntarily substituting materials
that may have environmental or safety

2018

POM

TOKIWA Sustainability Report 2023

Polyacetal (polyoxymethylene) Low VOC grade (<10ppm)■ Used when volatile organic compounds (formaldehyde) are generated.

concerns in advance of the regulations.
• From the HP of the Ministry of Health, Labourand Welfare: It is considered important tocontinue to promote research and studies on
polycarbonate, polystyrene and polyvinyl chloride
used in plastic containers for food products.
However, there are no scientific findings thatindicate any serious effects on human health, andthere is no need to immediately ban the use ofpolycarbonate, polystyrene, and polyvinyl
chloride.
https://www.mhlw.go.jp/www1/shingi/s9811/s1
119-2_a_13.html

Polycarbonate• Because of its high sliding properties, it is often used for screws andother internal components of pencil containers.

2022

PS

PS: Polystyrene (styrene resin)
ABS: Acrylonitrile, butadiene, styrene
SAN: AS (acrylonitrile styrene)◼ Acrylonitrile, styrene CMR substance concerns

33Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Responsible supply chain
Development of formulations using RSPO*1 SC certified oils
We give priority to the development of
formulations using RSPO-certified oil for raw
materials that use palm oil to contribute to
the promotion of sustainable palm oil and tomeet the demands of customers who requirecertified products.
We joined the RSPO as an associate member
in 2019 and have been working to obtain SC
certification*2 for our production factories
since 2021, with four factories*3 currently
certified.
We are replacing 76% of palm oil-derived raw
materials purchased in 2022 with RSPO-Check out our progress at
www.rspo.org

certified raw materials.
We will continue our efforts to procuresustainable raw materials that take into
consideration social issues and theenvironment in the regions where the raw
materials are produced.

*1 Roundtable on Sustainable Palm Oil isa non-profit international membership organization that develops and implements international standards
for sustainable palm oil products. Participants include various parties from the palm oil industry.
*2 Supply Chain Certification System Certificationthat a system has been established to ensure that palm oil is passed through all stages of the supply chain(manufacturing, processing, and distribution processes) without error.
*3 Ochiai Factory and Komanba Factory obtained SC certification in 2021
Nakatsugawa Factory and Toki Factory obtained SC certification in 2022

TOKIWA Sustainability Report 2023

34

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Responsible supply chain
Use of raw materials not involved in childIn make-up cosmetics, items that produce a particularly sparkling shine and gloss are often madewith ingredients derived from a natural mineral called mica. This natural resource, with its uniquelustre, is used not only in cosmetics, but also in various industries and products such as
automobiles, electrical appliances, and paints, and is in very high demand. Most of these mica
originated in eastern India.
There is a problem of child labour for poor children in eastern India, and it is illegal to mine mica.
With regard to natural minerals such as mica, we use only raw materials that have been verified
as not being involved in child labour.

TOKIWA Sustainability Report 2023

35

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Responsible supply chain
FSC® certification (Forest Stewardship Council®)In order to promote sustainable material

In Nakatsugawa City, Gifu Prefecture, a city

procurement, we obtained FSC® CoC

rich in forest resources, we have beencertification*1 for our wooden products in

manufacturing cosmetics such as eyebrows

October 2021.

and lip liners with wooden pencils since 1948,

FSC® (Forest Stewardship Council®) is aninternational certification system for forest
products procured from forests that areproperly managed to ensure the continued

when we started our original business of
pencil production. In addition to theseconventional wooden-axle pencils, we havedeveloped a wooden feeder pencil last year.

use of limited forest resources into the future.

The FSC® logo can also be used on the

FSC® certified products are environmentallycontainer. Wooden ejector containers are afriendly products that represent that they

new development that enables up to 60%

originate from properly managed forests andplastic reduction by replacing some of the

can use the exclusive logo mark.

ejector containers with wood, and the line-up
includes containers for eyebrow pencils,
eyeliner pencils, and liquid eyeliners.
We will continue to focus on further

sustainable material procurement andinnovative product development.

（License no.: FSC®-Ｃ170726）*1 CoC certification CoC= Chain of Custody. A
system that certifies that wood and paper
products produced from certified forests areproperly managed and processed.
TOKIWA Sustainability Report 2023

36

SOCIALTOKIWA Sustainability Report 2023

37

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Monozukuri manufacturing safe products
TOKIWA has established a high-level quality control system in compliance with ISO22716 for thesafety control of raw materials and manufacturing processes to deliver safe and high-quality
cosmetics to the world under the mission of bringing beauty, excitement and joy to the world. We
have established the following quality policy whereby we are constantly striving to improve ourquality control system.

TOKIWA Corporation Quality Policy
We will build QA and continuously improve quality inorder to accurately understand customer needs andsupply products that provide satisfaction and trust.
To achieve the policy• We all recognize the importance of quality and aim to realize quality
improvement through Monozukuri manufacturing.
• We comply with laws and regulations, regulatory requirements, andinternal rules to provide products that suit our customers’ requests.
• We aim for zero complaints.
• Further enhance quality control and assurance of new products fromdesign to product shipment.
• We aim to supply product quality that surpasses that of ourcompetitors as well as build quality based on cost.

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Monozukuri manufacturing safe products
QA Promotion Structure

Ensuring Product Safety

TOKIWA is committed to producing high quality cosmetics that can be used with peace of mind,
and all related departments, from product design to manufacturing. We work every day to earn
the trust of our customers.
QA Committee

CEO

Domestic &International Sales Div.

QA Committee Secretariat

QA Headquarters

Zero Complaint Project

Production
Operations
Division

Formulation
Development
Division

Package
Development
Division

SCM Division
Purchasing
Department

TOKIWA Subic
Corporation

Kunshan Tokiwa
Cosmetics Co., Ltd.

QA Support Flow Chart

We have established and are operating a

Customer

Customer QA Support Organization Chart sothat we can promptly receive, investigate, andDomestic &International Sales Div.

respond to customer requests for investigations
regarding problems that occur during use.
After receiving the survey request from the

QA Committee

Kunshan Tokiwa
Cosmetics Co., Ltd.

QA Committee
Secretariat

QA Headquarters

sales department representative in the QA
Headquarters, delivery to the relevant

Products are subjected to small- and medium-scale test production, as needed, before going into
mass production, and various evaluations and tests of safety and stability are conducted to reportand share quality information with our customers. We are constantly striving to deliver safe andreliable products.

Internal sharing of quality problems and prevention of recurrence

Nakatsugawa Factory,
Ochiai Factory
Mizunami Factory,
Komamba Factory
Toki Factory

QA Support Structure

TOKIWA develops and produces people-friendly cosmetics by selecting raw materials incompliance with the Cosmetics Standard (Notification No. 331 of the Ministry of Health andWelfare) and other related laws and regulations, with the safety of our customers as our top
priority.
We also strive to keep abreast of voluntary standards and guidelines at the Japan Cosmetic
Industry Association, and maintain close communication with our customers to ensure information
sharing and early response.

In the event that there is a serious problem with a product pointed out by a customer, the QA
Department will send information to the responsible engineer or quality control manager at eachfactory, and where necessary, conduct an emergency on-site inspection and take measures toprevent the spread of the problem.
Once a month, the QA Department holds a Quality Meeting (Zero Complaint Project) attended
by the responsible engineers or representatives from all the factories, where detailed information
on each case is shared to prevent recurrence and to prevent the occurrence of such complaints inother products.
Once every six months, a QA Committee meeting is held, attended by the responsible director andthe head of the department, to review the issues raised during the half year and to approve
important quality-related matters.

departments within the company is madethrough the survey system of the indicateditems in the company's customer management

Departments

system.
TOKIWA Sustainability Report 2023

39

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Human rights
Human Rights Policy

Standards of Conduct

In line with our mission to bringing beauty, excitement and joy to the world, the TOKIWA

In the CSR Code of Conduct, the TOKIWA Group's code ofGroup understands that the human rights of all those who can be affected by our

conduct, we clearly state the standards of conduct based on ourbusiness activities must be respected in light of international human rights standards, andhuman rights policy and promote business activities that

we will do our utmost to ensure that the dignity of these people is protected. To clarify

respect human rights.

this policy, we have established the TOKIWA Group Human Rights Policy.
We also require our suppliers, business partners, and others to respect and not violate

TOKIWA Group CSR Code of Conduct

human rights in accordance with these principles.

Code of Conduct for Human Rights

In order to promote respect for human rights, we will create a framework for effective• Prohibit child labour and forced labour

countermeasures by establishing an appropriate reporting desk to prevent the occurrence• Prohibition of discriminatory hiringof human rights violations, and we will conduct human rights due diligence to assess the• Prohibit discriminatory personnel actions and treatment

impact of our business activities on human rights, and continuously monitor and report• Promote equal employment opportunities for men andthe impact to appropriate parties. If any negative impact on human rights should occur

women, and prohibit sexual harassment and power

through our business activities, we will respond appropriately by providing fair andequitable remedial measures to resolve the issue.

harassment.
• Equality in the workplace• Accessibility to work environment and employment

TOKIWA Group Human Rights Policy
Initiatives set forth in the Policy
1. Prohibit forced labour, human trafficking, and child labour
2. Respect for diversity
3. Maintain employee health & safety
4. Benefits and Wages
5. Freedom of Expression and Protection of Privacy
6. Respect for freedom of association and exercise of theright to collective bargaining

TOKIWA Sustainability Report 2023

• Active promotion of women and people with disabilities• Consideration for the health and safety of our employees• Safe and clean work environment• Health Care and Mental Health Care Response• Provide reasonable wages and rewards• Reasonable benefit programs and policies• Fair and equitable personnel evaluation and appropriate
personnel transfers• Support for employee training and development

40Company Overview

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TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Prohibit forced labor, human trafficking, and child labor
Based on the TOKIWA Group Human Rights Policy and the CSR Corporate Code of Conduct, weare promoting efforts to correctly understand, recognize, and improve human rights issues,
including prohibition of forced labour, human trafficking, and child labour, not only in the Group'sbusiness activities but also throughout the value chain.
Within the TOKIWA Group, we conduct human rights training to raise employee awareness, andwe expect our business partners and suppliers to understand and support this policy and to follow
our CSR procurement guidelines.
Human rights training
Initiative
Conduct human rights
training, including at Group
companies
TargetOnce every two years

TOKIWA Corporation

2020

2021

2022

implementation implementation

Kunshan Tokiwa
Cosmetics Co., Ltd.

implementation

TOKIWA Subic
Corporation

implementation implementation

Human Rights Due Diligence Process
The TOKIWA Group follows the

1. Policy Commitments

procedures outlined in the United

1) TOKIWA Group Human Rights Policy

Nations Guiding Principles on2) Basic Purchasing Policy and CSR Procurement

Business and Human Rights, andhas determined and is working on
the following human rights due
diligence process.

Guidelines
2. Risk identification and assessment
1) Identification of human rights issues in the value chain2) Risk assessment3) Determination of Priority Issues
3. Implementation and review of preventive measures

TOKIWA Sustainability Report 2023

Employee Training
TOKIWA Group employees are provided with e-learning or group education using the PowerPoint
material Business and Human Rights provided by the Ministry of Justice to promote understandingof human rights issues.
Training has been completed for executives, including those at overseas affiliates, and we plan toexpand the scope of training to supervisory positions and below in the future.

Identification of risks related to Prohibition of Forced labour, Human
Trafficking, and Child labour
At TOKIWA Group's domestic locations, employment is limited to those 18 years of age or older
who do not fall under the category of juveniles under 18 years of age with protective regulations
to ensure their health and welfare, and this is clearly stated in the Rules of Employment. As for
dispatched workers, we request that dispatchers limit their dispatch to those who are at least 18
years old. Therefore, the risk of child labour does not exist.
Although forced labour and human trafficking are low-risk due to Japanese labour practices, etc.,
even for temporary staff, the only potential risk, we try to avoid them by using a highly credible
temporary staffing agency and conducting CSR self-checks.

Complaint Handling Mechanism
The TOKIWA Group has prepared a global whistle-blowing mechanism for employees to consult
and report all issues of corporate ethics, including potential human rights issues, through anexternal whistle-blowing desk that is independent from the business lines, and the Company
handles complaints and other matters reported in accordance with internal rules.
1. Initiatives for Overseas Subsidiaries
Although the Asian region, including China, is considered to have higher risks related to humanrights and recruitment, we have overseas subsidiaries (KTC and TSC) in China and the Philippinesthat employ local employees.
In addition to providing human rights training for executives, we closely monitor human rights
violations, including prohibition of forced labour, human trafficking, and child labour, byconducting CSR self-checks.

1) Implementation and review of preventive measures

2. Participation in the UN Global Compact (joining in 2023) subcommittee

2) Education on Human Rights

Section meetings organized primarily by members of the UN Global Compact are useful as anopportunity to develop expertise and leadership in a particular area. Relevant personnel will
participate in subcommittee activities and discussions to access the latest trends and bestpractices to improve our efforts.
41

Company Overview

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TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Human Resource Development
The TOKIWA Group aims to realize a business strategy that enables us to both grow our businessand contribute to society, and to realize our mission: Bringing beauty, excitement and joy to theworld. To this end, we believe it is necessary for each and every employee to have a high level ofawareness and to mobilize their individual strengths to create further beauty innovation throughmanagement with the participation of all employees, and we are making various efforts todevelop such human resources.
In human resource development, the foundation is acquisition of work experience through on-thejob training, which is reinforced by personnel evaluation and feedback and skill acquisition
through internal and external training. Furthermore, our goal is to develop human resources thatare adaptable to global business development by providing growth opportunities according to theaptitude and career plans of individual employees.

Main human resource development system
Personnel rating system
TOKIWA conducts personnel evaluations three times a year by means of interviews. Our
personnel system is based on a job qualification system, and while evaluations are reflected insalary increases, promotions, and bonuses, the personnel evaluation interview is not merely an
evaluation, but is viewed as an opportunity for growth through development plans and feedback
for each employee in the company.
In addition, each affiliated company conducts personnel evaluations in accordance with TOKIWA's
personnel evaluation system, which is based on the size of the company and other factors.

Personnel relocation request
TOKIWA has established a personnel evaluation system that fairly assesses employees' abilities,
aptitudes, and performance, as well as a self-assessment system and a target management
system, providing an environment in which employees can proactively develop their career plans
and maximize their abilities.
Employees who wish to be transferred can directly inform their supervisors of their transfer
request by filling in the Transfer Request Form on the Personnel Evaluation Sheet used during the
Personnel Evaluation Interview described above. In addition to interviews, you may also request atransfer at any time by filling out a Request for Transfer Request Form. Requests for transfers arecommunicated to the Human Resources Department, and transfers are possible when conditions
are met.
TOKIWA Sustainability Report 2023

Revision of personnel evaluation system
We are moving away from a seniority-based promotion system and a system of promotion andadvancement based on proficiency in graded positions. We plan to introduce management by
objective (MBO), job performance, and behavioural characteristic checks by the end of 2023, inorder to utilize human resources with high job performance capabilities regardless of theircompany history, age, gender, or nationality, and to establish a next-generation development
career plan based on a promotion and advancement system that places the right person in theright job according to the career plan of each individual.
We are also considering the introduction of a role grading system for cooperative employees, andare in the process of formulating compensation levels based on the level of role they play in thework they are in charge of (skill level, substitutability, complexity, discretionary level,interpersonal relationship level, etc).

Support for employee training and capacity building
TOKIWA encourages the acquisition of relevant skills and know-how and self-development inorder to help individual employees demonstrate their abilities and creativity. TOKIWA sets up
opportunities for education and training, and supports employees to attend seminars andeducational courses for their learning.

Systematic implementation of employee training
To resolve the issues faced, we conduct harassment training, human rights training, management
and supervisor training, etc., using a combination of face-to-face, online, e-learning, and otherdelivery methods. From FY2022, the scope of the program will be expanded to include training forcooperative employees.
training expenses per person each year
Initiative
Implement systematic
employee training
Target 2028
Training amount 8,500
yen/year per person

2020

2021

ー

5,364

4,644

2,532

8,052

13,800TOKIWA Subic Corporationー

10,236

4,620

SONAX Corporation

ー

0

0

TOKIWA COSMETICS INTERNATIONAL

ー

0

0

TOKIWA Corporation
Kunshan Tokiwa Cosmetics Co., Ltd.

2022

42

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Health and safety
Achieve employee health and a pleasant work
environment
Employees are our greatest asset. We believe that individual employees' full exercise of theirabilities in a workplace that is healthy in mind and body and pursues safety and security will leadto increased corporate value.
To achieve this employee health and a comfortable work environment, we have established a
Basic Policy on Occupational Health and Safety based on the TOKIWA Group Human Rights Policy
and the CSR Corporate Code of Conduct and are promoting efforts to achieve this goal.
Occupational Health and Safety Basic Policy
1. Providing a safe and secure working environment• Identify and reduce risks that could lead to occupational
accidents and health problems before they occur.
• Establish a health & safety management system and improvethe management level.
• Promote the creation of an open and comfortable workplacewith close communication.
2. Implementation of prevention-oriented hygiene
management measures• Prevent work-related illnesses by ensuring work environment
management, work management, and health management.
• Promote mental health care and prevent the occurrence ofmental health problems.
• Prevent health problems caused by overwork throughreduction of overtime and holiday work.
• Ensure 100% health check-ups and use the results to prevent
disease.
• Thoroughly implement measures against new coronas toprevent the occurrence of infected persons within the company.

TOKIWA Sustainability Report 2023

Occupational Health and Safety Initiatives
We place the highest priority on the health of all Group employees, and work to maintain andimprove it by providing a safe and hygienic work environment, complying with laws, regulations,and internal rules related to health & safety, and responding appropriately to health risks toprevent occupational accidents, prevent occupational diseases, maintain and promote health, andcreate a comfortable workplace.
The scope of the health and safety policy includes temporary employees and employees ofsubcontractors (subsidiaries of the Company) who work at the Company's business sites.

Health & safety Management Initiatives
Health and Safety Committee/Risk Assessment
Risk assessments are conducted for each department and process at each production site. In
order to identify and understand dangers and dangerous properties, we also utilize regular on-site
patrols by health & safety managers at each site and health and safety patrols by the Health and
Safety Committee to review work methods and procedures and implement other improvement
measures according to priorities based on the magnitude of risk. After implementation, we
accumulate improvement know-how and deploy it to other locations, while conducting periodic
reviews.

PM Committee Activities
Production maintenance is called PM (Productive Maintenance) and refers to maintenanceperformed to improve the productivity of equipment throughout its life cycle, from theintroduction of new equipment into a factory to its disposal due to deterioration or other reasons.
In PM activities, we consider lowering the cost of manufacturing and maintaining equipment fromthe design stage, and aim to increase the productivity of the equipment as a whole by also
lowering the cost of loss due to equipment deterioration over time.
Safety and sanitation are also important considerations in this process. Proper maintenance andinspection of equipment will reduce equipment breakdowns and problems and the associatedsafety risks and health concerns.
43Company Overview

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TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Health and safety
Accident frequency rate
Initiative
Achieve zero accidents at allsites
Target 2028
All accident frequency rate
0.00 / Intensity rate 0.00

ISO 45001 certification

2020

2021

2022

TOKIWA Corporation

0.638

1.931

0.00

Through ISO 45001 certification, we aim to review our current health and safety activities,

Kunshan Tokiwa Cosmetics Co., Ltd.

0.00

0.00

0.00

prevent work-related injuries and illnesses for all workers, and provide a safe and healthy work

TOKIWA Subic Corporation

0.00

0.00

0.00

SONAX Corporation

0.00

0.00

0.00

environment.
*Certification scheduled: 2024 Mizunami Factory

Ensure the use of health & safety protective equipment
Accident intensity rate

2020

2021

2022

In order to protect the health & safety of our employees when working, we ensure that they use

TOKIWA Corporation

0.001

0.00

0.00

the necessary health and safety protective equipment through work procedures.

Kunshan Tokiwa Cosmetics Co., Ltd.

0.00

0.00

0.00

TOKIWA Subic Corporation

0.00

0.00

0.00

SONAX Corporation

0.00

0.00

0.00

2020

2021

2022

TOKIWA Corporation

84.3%

91.9%

92.3%

Kunshan Tokiwa Cosmetics Co., Ltd.

100%

100%

100%

TOKIWA Subic Corporation

100%

100%

100%

ー

100%

72.7%

Health checkup uptake rate
Initiative
To ensure thorough healthmanagement of employees,
maintain 100% healthcheck-up rate, which is thebasis of health management
Target 2028

SONAX Corporation

Specifically, we use protective equipment appropriate for the process and hazardous materials
used, including protective goggles to protect eyes from hazardous materials and dust, dust masks
to protect breathing from dust, gloves with protective functions to protect hands from chemicals
and cuts, ear muffs to protect ears from noise, etc.

100% health check-up rate

TOKIWA Sustainability Report 2023

44

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Health and safety
Health Care Initiatives
We regard employee health as our most important management resource, and aim to help
employees achieve healthy and fulfilling lives by actively supporting individual voluntary healthactivities and promoting organizational health activities.

Mental health measures
As mental health care, we promote line care and provide mental health education for managers.
In addition, annual stress checks are conducted every year, and appropriate follow-up, such as
interview guidance, is provided for high-stress employees.

Health management of employees dispatched overseas
For expatriates, medical examinations are conducted before, during, and after their return toJapan, and the results are used to determine whether or not they can be dispatched overseas. In
order to prevent infectious diseases, the company pays for the necessary vaccinations for the
dispatched workers. In addition, we have a support system that allows you to visit a medical
institution with peace of mind in the event that you need medical care abroad due to illness orother reasons.

Conduct health check-ups and take measures
to prevent lifestyle-related diseases
As part of employee health management, we conduct periodic health check-ups for all employees,
including expatriates, with the aim of achieving a 100% examination rate. After health check-ups
are conducted, those with findings are recommended to undergo a secondary examination andhealth guidance is provided. In cooperation with health insurance societies, we also actively
provide specific health guidance to those who have metabolic syndrome.
With regard to the improvement of the medical check-up rate, the rate is almost 100% for officesthat conduct traveling medical check-ups, but the rate is slightly lower for offices that go to
designated clinics for medical check-ups, partly due to the COVID-19 pandemic. Improvement will
be achieved by strengthening guidance through the job system.
TOKIWA Sustainability Report 2023

Measures to prevent passive smoking
In response to the revision of the Health Promotion Law in April 2020, we are working on
measures to prevent passive smoking, such as setting up smoking-only rooms based on the
Guidelines for Prevention of Passive Smoking in the Workplace.

Infection Prevention Measures
We provide necessary vaccinations for business travelers and those who plan to be stationed
overseas, depending on their destinations. In addition, as a countermeasure against newcoronavirus infection, we conduct hand washing, temperature checks, masks, ventilation, andother educational activities, as well as telework, and have established various guidelines forprevention and spread of the virus in accordance with government policy, and ensure that all
employees are aware of these guidelines. In addition, employees who are infected or potentially
infected are restricted from coming to work by granting special leave to prevent the spread of
infection.

Safety and Health Management System
We have established a safety and health management system for the entire company andbusiness sites based on the Safety and Health Management Regulations. We promote systematic
measures to ensure the health and safety of our employees, to promote their health, and tocreate a comfortable work environment. Based on the measures set by the general manager ofthe entire company, safety and health activities are developed at each business site under thegeneral management of the site manager.

Labour conference
We have concluded a labour agreement and a labour-management agreement on health andsafety with the TOKIWA Labour Union, and issues related to health and safety are also addressedin labour-management discussions. The Health and Safety Committee, which is set up at eachbusiness site, has half of its members recommended by the TOKIWA labour Union, as required bylaw, and deliberates monthly on measures to prevent hazards and health problems, as well as on
the causes of industrial accidents and measures to prevent their recurrence.
45Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

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GOVERNANCE

APPENDIX

Health and safety
Establishment and activities of the Health and Safety Committee

Conducting evacuation drills

TOKIWA and its domestic affiliates have established a Health and Safety Committee or HealthIn addition to conducting regular evacuation drills for earthquake and fire scenarios, we conduct

Committee at all business sites with 50 or more full-time workers as required by law. As forearthquake simulation vehicles and smoke simulation during evacuation drills to raise employee

overseas offices, TSC in the Philippines has established a Safety and Health Committee insafety awareness and improve their practical understanding of crisis management so that theyaccordance with Philippine legislation.

can respond calmly and appropriately (limited to some target locations).

Qualifications, training and seminars on health and safety

Establishment of Health and Safety Committee
TOKIWA Corporation Office name

Number of
eligible workers

Establishment status

Tokyo HQ

86

Establishment of HealthCommittee

Global Technology Centre

114

Establishment of Healthand Safety Committee

Global Logistics Centre

64"

Nakatsugawa Factory,
Nakatsugawa Head Office354"

Ochiai Factory349"

Mizunami Factory

198"

Toki Factory

163"

Komanba Factory

38"

Employees participate in various health and safety training programs to learn to protect theirsafety and health, minimize risks, and improve their safety awareness.

2022 Acquisition and participation• The first type of health manager• Worker in charge of handling crane work

• Safety manager• Arc welding work

• Hazard knowledge training• Electricity (low voltage) handling• Woodworking machine operator• Risk Assessment Practical Training• Forklift operator• Electrical Safety Training• Training for chemical substance supervisors• Responsible person who manage of industrial• Person in charge of wearing protective
equipment• Work supervisor

Installation status

Kunshan Tokiwa Cosmetics Co., Ltd.

268

Establishment of Healthand Safety Committee

TOKIWA Subic Corporation

207"

SONAX Corporation

26

Not subject

TOKIWA Sustainability Report 2023

• Chemical agent handler• worker in charge of cargo pilingNumber of
eligible workers

Affiliated companies Company namewastes• Protective equipment

46

Company Overview

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TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIX

Promoting Diversity, Equity & Inclusion
Purpose of Promoting
We believe that diversity as an organization is essential for a company to meet the diverse needsof the market and to achieve sustainable growth and development, and that it is important toensure diversity in human resources and to have a correct understanding of the importance ofdiversity. Based on the TOKIWA Group Human Rights Policy and the CSR Corporate Code of

Promotion of women's activities / Launch of the DEI project
In corporate management, there is a growing recognition that maximizing the diverse
personalities of each employee leads to higher value creation.

Conduct, we respect human rights by prohibiting discrimination based on race, ethnicity, religion,

However, despite the fact that the majority of our users and more than half of our employees arenationality, origin, gender, or any other form of discrimination. We are implementing awareness-

women, the percentage of women in our senior management is low, and we have been slow toraising measures and policies to ensure that employees are not harassed in the workplace, andtake advantage of our female employees.

that employees who are pregnant or caring for children can make appropriate use of the systems
and balance their work and family care responsibilities.

To improve this situation, we launched the DEI Project in December 2021, consisting of the initialletters of Diversity, Equity, and Inclusion, with the aim of promoting women's activities inparticular, and build an organizational culture in which women can shine.

The DEI project is implementing initiatives based on the following three themes
1. Learn about diversity
Unconscious bias training
2. Creating a Supportive Work Environment
Creating a work environment that respects the individuality of each employee based on the

Workplace Comfort Questionnaire.
3. Support for each individual
Review of the evaluation system to ensure fairness and transparency.

Initiative
Specific actions for women’s empowerment
will be initiated at TOKIWA.
Target 2030

Ratio of female
management staff

2020

2021

2022

TOKIWA Corporation

5％

4％

7％

TOKIWA Group, Inc.

17％

19％

20％

30% female managers
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APPENDIX

Promoting Diversity, Equity & Inclusion
Other Initiatives
Diversity Training

Employment of people with disabilities

Ongoing employee training is provided for the purpose of promoting diversity. We use BusinessWe are committed to employing people with disabilities in order to create opportunities for peopleand Human Rights provided by the Ministry of Justice as a teaching material, and enhancewith handicaps such as physical and intellectual disabilities to play an active role. We will continue

education through in-person or online training.

to promote the expansion of work areas and recruitment of people with disabilities while creating

We have also conducted Unconscious Bias training for executives, and plan to conduct thistraining for managers and below in the future.

Prohibition of Harassment
The TOKIWA Group does not tolerate sexual harassment, power harassment, or any other form ofharassment in the workplace. This policy is disseminated through harassment training and othermeans.
We established Harassment consultation office in the Human Resources & General Affairs Division
to respond to consultations and complaints.

an attractive and easy-to-work-in workplace for them.
Initiative

Legally mandated
employment rate

2020

2021

2022

TOKIWA Corporation

2.6％

2.6％

2.7％

Maintain employment above the legally
mandated employment rate
Target 2030
Legal employment ratio (2.3%) or higher(TOKIWA alone)

Japanese-style toilets converted
to Western-style toilets
Western-style toilets may be more accessible

The Company will establish an office to eliminate harassment by providing guidance to the parties

to the elderly and people with physicalinvolved and department supervisors, and by taking personnel measures.

disabilities. By making restrooms easier to

In addition to the consultation counter, we have established an external whistle-blower desk anduse, we will provide a comfortable working

a system of investigation and punishment by the Compliance Department and the Risk

environment for a diverse range of users andManagement Committee to ensure that harassment is totally eliminated.

improve barrier-free accessibility.

Acceptance of Workplace Training from Special Needs Schools

Scheduled to be implemented in 2023-2024(Nakatsugawa Factory and Ochiai Factory)

We accept students from the upper secondary school of a nearby special-needs school for on-thejob training with a view to employment after graduation. Participating students are able tounderstand the basic attitude and behaviour for working after graduation and the characteristicsof their own disabilities, and companies are able to confirm the characteristics and abilities of thestudents before hiring them, which is effective in ensuring smooth employment after graduation.
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APPENDIX

Employment and Benefits
Employment and Benefits Initiatives
Based on the TOKIWA Group Human Rights Policy and the CSR Corporate Code of Conduct, weare promoting further improvements in working conditions, such as reforms in work styles andenhancement of benefit programs, to realize a workplace environment in which diverse humanresources can demonstrate their abilities.
Paid leave usage rate
Initiative
Enhance measures toreform work styles.
Target 2028
70% Paid leave usage
rate

Employment Transparency
In order to secure useful human resources and make the recruitment process transparent, we willplace open recruiting ads in Hello Work and specialized job sites. In the selection process,applicants' abilities and experience are evaluated through a recruitment test and interview, and a

2020

2021

2022

TOKIWA Corporation

76.1%

79.9%

80.6%

hiring process at the appropriate time. Furthermore, to prevent discrimination, we train our

Kunshan Tokiwa Cosmetics Co., Ltd.

67.2%

72.0%

68.0%

recruiters not to ask for unnecessary information in selection documents and not to ask irrelevant

TOKIWA Subic Corporation

17.0%

23.8%

12.5%

SONAX Corporation

ー

46.1%

69.4%

TOKIWA COSMETICS INTERNATIONAL

ー

67.0%

14.2%

decision is made by a consensus of several persons in charge. Applicants will be notified of thequestions during interviews. This ensures employment transparency and the prevention of
discrimination.

Work-style reform
Employees are a company's greatest asset, and maximizing the performance of individual

Dissemination of working conditions

employees leads to increased corporate value. We are also working on work style reform torealize a work environment in which all employees can focus on their work with ease, making theWith regard to working conditions such as remuneration, working hours and holidays,

most of their characteristics. We introduced a telecommuting system in 2020 and a flexitime work

occupational health and safety, welfare, and service discipline, Work and Others and related

system in 2021.

regulations are always available for viewing via groupware and internal shared drives, and we aremaking efforts to disseminate the working conditions. In addition, we disseminate this information

as a training item in the new employee education program.
Personnel transfers are communicated to the labour union and the members concerned within aperiod of at least one month, while giving due consideration to the details of the transfer inaccordance with the collective labour agreement.
With regard to reassignments, workplace transfers, secondments, transfers, establishment of new
offices or sites, consolidation, elimination, or organizational changes that may affect 10 or moreunion members, the details are to be notified to and discussed with the labour union at theearliest possible time.
TOKIWA Sustainability Report 2023

Certified as Excellent Company for Work-Life Balance Promotion
by Gifu Prefecture
In recognition of the results of our corporate activities
to support work-life balance, we were certified as an
Excellent Company for Work-Life Balance Promotion
by Gifu Prefecture in February 2016, and renewed
the certification in December 2021.
Gifu Prefecture HP

Work-Life Balance Promotion by Gifu Prefecture

https://www.pref.gifu.lg.jp/page/8314.html
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APPENDIX

Employment and Benefits
Welfare programme
To foster job satisfaction among our employees, we offer a full range of benefit programs,
including congratulatory and condolence money, rented company housing, and access to domestic
and international recreation and leisure facilities provided by the Tokyo Cosmetics Health
Insurance Association, of which we are a member.

Engagement Survey Research
We understand that continuously increasing engagement, which refers to the degree to which
employees are highly motivated to contribute to the company and voluntarily demonstrate theirabilities, will lead to higher corporate value.
TOKIWA conducted a survey of all employees. Based on the survey results, issues are identified
and improvement measures are studied and implemented by the relevant departments.

Initiative
Improve engagement by conducting
engagement surveys and implementing
remedial measures.

Engaged Employees
Satisfaction

2022

TOKIWA Corporation

35％

Target 2028
65% employee satisfaction

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APPENDIX

Corporate governance
Basic Concept
In order to realize our mission Bringing beauty, excitement and joy to the world by becoming a truly sustainable company
that balances business growth and social contribution, we are practising and strengthening corporate governance andproperly operating a system of management transparency and rapid decision-making. In addition, by keeping abreast ofsocial trends and actively engaging with stakeholders, we will examine the state of our corporate governance from time totime and implement necessary measures and improvements as appropriate.

Basic Principles of Corporate Governance
The TOKIWA Group will conduct corporate management based on the following five basic principles in order to achievesustainable growth and enhance corporate value over the medium to long term.

Ensuring shareholder rights and equality

1. The Company shall respect the rights of shareholders, ensure the equality of shareholders, and strive to create anenvironment for shareholders to exercise their rights.
2. Appropriate collaboration with all stakeholders
We recognize that our employees, shareholders, customers, suppliers, industry groups, and local communities areimportant stakeholders, and we strive to coexist and cooperate with all stakeholders to achieve sustainable growth ofthe company and to create medium- to long-term corporate value.
3. Ensure appropriate information disclosure and transparency
In addition to appropriate disclosure in accordance with laws and regulations, we will actively and proactively
disseminate information other than this disclosure in an effort to ensure transparency.
4. Management oversight by the Board of Directors and establishment of an independent audit system
The Company shall strive to properly execute the roles and responsibilities of the Board of Directors in order to ensuretransparent, fair, and flexible decision-making, while maintaining an independent audit system.
5. Ensuring credibility through accountability and dialogue with shareholders
We will disclose and explain the direction of sustainable growth to our shareholders and engage in constructive dialogue.
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APPENDIX

Corporate governanceCorporate Governance Structure
The TOKIWA Group has determined that the following governancestructure is effective in establishing a sound corporate governancestructure and continuously improving corporate value.
Board of directors
The Board of Directors makes decisions on important business mattersand supervises the execution of business operations. Corporate
auditors are also required to attend the Board of Directors meetingsand express their opinions when deemed necessary.

TOKIWA Sustainability Report 2023

Executive Advisory Council
The Management Advisory Council consists ofexecutive officers and other persons appointed bya resolution of the Board of Directors to deliberate
on matters to be discussed by the Management
Council, which the President deems necessary forprior discussion among officers and others prior to
the Management Council, or matters that should
be discussed among officers and others for
management reasons, although they are notmatters to be resolved at the Management Council.
Risk Advisory Committee
The Risk Deliberation Committee has been
established as an advisory body to the Chief
Compliance Officer (President) on all internal risks,and manages risks related to compliance violations,etc.

Dismissal byelection

Dismissal byelection

Dismissal byelection

Board of directors
Director: 1
Outside director: 3
Audit
AdviceNominating andCompensation
Committee

Risk Advisory
Committee
Appointment,
dismissal and supervision

CEO
Audit

Management conference

Executive Advisory
Council

Audit

Auditor: 1

Auditors
We have auditors who are familiar with the Group's business,management structure, laws, finance and accounting, and internal
controls. Corporate auditors ensure sound management by auditing
the execution of duties and the status of corporate assets incooperation with the accounting auditor, the internal audit division,and the compliance division. Corporate auditors attend meetings ofthe Board of Directors, the Management Committee, and otherimportant internal meetings, hear reports from directors and others,
inspect important approval documents, and examine the status of theGroup's operations and assets. When necessary, the auditor may
direct an investigation to be conducted by an assistant employee orthe head office administration department. Through these efforts, we
conduct rigorous audits of the execution of duties by directors andothers, including the maintenance and operation of internal control
systems, and fulfil the function of monitoring management. The
Company also works closely with the internal audit department andaccounting auditors to improve the effectiveness of audits.

Management conference
The Executive Committee, consisting of directors,
corporate auditors, executive officers, and otherpersons appointed by resolution of the Executive
Committee, establishes specific executive policies
based on policies determined by the Board of
Directors, deliberates all important management
matters, and reports on the progress and results of
Executive Committee deliberations, monthly
financial results and the latest annual forecast, andmatters related to individual executive policies
other than those mentioned above that are
conducted according to the basic policy of theBoard of Directors.

Accounting auditor

Nominating and Compensation Committee
The Nomination and Compensation Committee, consisting of the
President and Representative Director, Outside Directors, andCorporate Auditors, is established on a voluntary basis. Whenappointing Executive Officers, the President and Representative
Director recommends candidates from among those who are deemed
to meet the prescribed requirements, and the fairness and validity of
the recommendation is confirmed by the Committee before it issubmitted as an agenda item to the Board of Directors for deliberation.

General Meeting of Shareholders

Sustainability
Promotion Division
ReportExecutive Officer
in Charge

Inspection

Business Unit

Audit
・

Group company

Guidance

QA Headquarters
Internal
Audit OfficeComplianceDepartment

Cooperation

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APPENDIX

Corporate governanceTraining Policy for Directors and Executive Officers
TOKIWA provides guidance and training by experts or outside lecturers as needed to directors andexecutive officers to enhance their skills and improve their knowledge of their roles andrequirements in the execution of management duties.

Assessing Board EffectivenessIn order to ensure and maintain the effectiveness of these governance structure, TOKIWA Grouphas been evaluating the efficacy of the Board of Directors by corporate auditors since FY2023 withrespect to the following items.

1. Management

attitude,philosophy

and7. Competitive Transactions by Directors

ethics of each director

8. Directors' Conflict of Interest Transactions

2. Character of each Director

9. Profit sharing regarding the exercise of

3. Obligations of each Director

shareholder rights

4. Responsibilities of each Director

10. Transactions with related parties

5. Misconduct by Directors

11. Insider trading

6. Disqualification of Directors

12. Other matters

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APPENDIX

Compliance
Compliance Policy andRegulations
The TOKIWA Group is actively working toachieve the highest ethical and legal
standards in all aspects of our businessconduct and expects all of our employees andall those acting on our behalf to maintainsimilar standards. As part of this commitment,
we have established a Compliance Policy on
Anti-Corruption, Money Laundering andEconomic Sanctions. This policy applies to allindividuals performing work for the Company,
including senior management, officers,
directors, employees (whether permanent,
fixed-term, temporary, or otherwise),consultants, contractors, and others who
have a relationship with the Company. Third
parties working on behalf of the Company
shall also comply with the principles set forthin this policy.

In order to ensure compliance andthoroughness with this policy, we haveestablished Compliance Regulations based on
this policy and regularly provide all employeeswith training to deepen their understanding of
the compliance policy. We have alsoestablished an internal reporting system thatguarantees anonymity and an independent
third-party organization that can receive
reports not only from domestic and overseas
employees but also from external parties suchas business partners.

Compliance Promotion Structure

Compliance Education

The Chief Compliance Officer of the TOKIWA Group is the President, and the Risk Deliberation
Committee has been established as an advisory body to the Chief Compliance Officer regarding allinternal risks.
The Risk Deliberation Committee consists of the President, Outside Directors and Outside
Corporate Auditors and is chaired by the President.
Under the supervision of the Chief Compliance Officer, the Head of Compliance Division, appointed
by the Board of Directors, makes decisions on important matters related to the promotion ofcompliance, and promotes and oversees compliance, including anti-corruption.
The Compliance Committee, which oversees the compliance of each division, promotes companywide compliance by formulating compliance-related policies, measures, and annual plans, as well
as checking the progress of each division's compliance measures, providing guidance and advice,
and reporting the details of such measures to the Risk Review Committee.
Compliance Promotion Structure Chart
Board of directors
Reporting (Violations and Risks)Compliance CEO (President)
Report Submitting
opinionHead of Compliance Department

Risk deliberationcommittee
Chair President
Outside Directors andOutside Corporate Auditors

Monitoring andsupervision

Compliance Committee
Chair
MemberHead of Compliance Department

Each compliance officer (Head of each department)

results Trends andInformation Reports

PolicyCompliance Department
Overall coordination ofcompliance implementation

All compliance managers (head of each department)
Divisions and Group Companies
TOKIWA Sustainability Report 2023

Appointment

To raise awareness of compliance, we
conduct training to familiarize all employees,
including directors, and temporary staffing
agencies with our compliance policy, andobtain compliance policy agreement forms. In
addition to this, the Company provides ethicsrelated training via e-learning, which islimited to positions only, and conducts
education to deepen the understanding ofsuch training.

Fairness of operations/conflictsof interest
The TOKIWA Group emphasizes integrity,
fairness, and impartiality in all aspects of its
operations and expects its relationships withall parties with whom it does business to be inaccordance with its compliance policy.
All of our officers and employees (regardlessof employment status) must avoid conflicts ofinterest between their personal activities andtheir roles in the conduct of our business.
Because this personal conflict of interest
arises when an individual's private interests
improperly interfere with the interests of theCompany, its members, its investors, or its
affiliates, it is the Company's policy to prohibit
such conflicts without the written approval of
the compliance officer.
Specifically, we prohibit such activities asusing one's position with us to obtain
unauthorized personal favours, includingloans or guarantees of debt, from any personor entity for oneself, one's family or others.
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APPENDIX

Compliance
Tax ComplianceInternal Reporting System
The TOKIWA Group has established a reporting desk andinternal reporting rules as a means of early detection andcorrection of compliance violations by appropriately
handling reports and consultations regarding informationand opinions on all compliance issues.
The Reporting Rules stipulate the reporting handlingsystem, handling of reports, and responsibilities of relatedparties for the protection of whistle-blowers and others.
Reported cases that fall under any of the following
categories, such as acts in violation of laws andregulations, serious violations of rules and regulations,acts contrary to business customs, unfair transactions,and serious acts contrary to socially accepted norms, arehandled under the direction and supervision of the Risk
Deliberation Committee.

Internal Reporting
Misconduct Incidents, etc. Response Flow

Employee
Cooperation
request

2. Serious violations of regulations (e.g., improper
reimbursement of expenses, improper business travel,
continuous improper attendance, improper
entertainment, improper gifts offered or received,
leakage of secrets, etc.)
3. Acts that are not fair (transactions that have notundergone fair review, transactions with conflicts ofinterest such as transactions between a company andan individual, etc.)
4. Serious conduct in violation of socially accepted
norms/ethical codes of conduct (including harassmentand other inappropriate conduct)

Tax policy

Acknowledgement

ReportThird-party contact

Compliance Department

1. Violation of laws and regulations (corruption/bribery,money laundering, breach of trust/embezzlement/theft,accounting irregularities, violation of antitrust laws,
etc., violation of related laws and regulations inbusiness operations)

Compliance Officer
Investigative
commission
AuditorOutside attorney

ReportEntrusting

Risk Advisory
Committee
CEO
Outside Director
Outside auditor

Human Resources
Department
Disciplinary committee*From the start of operation in 2020 to December 2022, there have been no incidents of reporting of serious violations of
the regulations.
TOKIWA Sustainability Report 2023

As a company with global operations, the TOKIWA Group has established the following
tax policy to maintain and improve tax compliance by complying with the tax laws andguidelines of each country and region.

Basic policy
In order to achieve our mission, Bringing beauty, excitement and joy to the world,
our group complies with all laws and regulations, both in Japan and overseas, andmaintains and enforces internal rules.
In taxation, we comply with international rules and tax-related laws andregulations to fulfil our social responsibility and maximize corporate value by
paying appropriate taxes in the countries in which we operate.
Tax Risk Management
In addition to systematically responding to tax system revisions, the Group strives
to minimize tax risks by making advance inquiries to tax authorities as necessary,in addition to receiving advice from tax specialists on important matters such as
possible differences of opinion with tax authorities.
Tax Planning
The Group recognizes the importance of appropriate tax planning, including theeffective use of preferential tax treatment, to maximize cash flow and increase
corporate value.
We will not engage in any acts intended to avoid taxation that would circumventthe purpose of the laws and regulations of each country.

Relationship with Tax Authorities
Through communication with tax authorities, the Group will endeavour to build andmaintain good relationships, and will provide factual explanations and responses ingood faith. We will appropriately address and improve any problems identified
during tax audits, etc.
Transfer pricing
The Group sets transaction prices applicable to transactions with foreign affiliates inaccordance with the laws and regulations of each country or region and thetransfer pricing guidelines published by the Organization for Economic Cooperation
and Development (OECD), and in accordance with the arm's length principle. In
addition, when documentation is obligatory or necessary due to the size of thetransaction, tax risk, etc., documentation will be performed as appropriate.
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APPENDIXInternal control system
Basic Concept
The TOKIWA Group's Internal Audit Office audits the entire
group's business operations to ensure that they are conducted
appropriately and efficiently from a perspective independent of
the business execution line. We also conduct audits of the risk
management status of subsidiaries, and share information onreports from subsidiaries at audit information liaison meetingsand other meetings.
The results of audits by the Internal Audit Department arereported to the President and CEO, and regular reports are also
made to the Corporate Auditors to share information. In
addition, we exchange opinions with the accounting auditor on
audit schedules, audit procedures, etc., as needed, and work

closely with the accounting auditor on internal control audits.
In addition, the Internal Control Office will ensure theeffectiveness, efficiency, and appropriateness of operations as
required by the Companies Act and the Financial Instruments
and Exchange Act, and will maintain and improve internal
control efforts with the aim of achieving a level of internal
control appropriate for the TOKIWA Group. We assess theeffectiveness of TOKIWA Group's internal control by using amethod that conforms to the guidelines for internal control overfinancial reporting based on the Financial Instruments andExchange Act.

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APPENDIX

Information Security
Basic Concept
Information Security Policy

With the rapid development of digital technologies, changes in corporate activities utilizing these technologies are
expanding our business opportunities, while at the same time increasing the risk of information leakage due to

1st ed.
January 1, 2022
TOKIWA Corporation
Hiroyuki Kanai, CEOexternal cyberattacks and disruption of corporate activities and supply chains.

We regard information security as an important management issue and have established an information security
policy and information management regulations to promote efforts to enhance information security. TOKIWA will
enhance its competitiveness by appropriately protecting its many information assets, including personal information,and by building good and ongoing relationships with external parties, including customers.
Our information security policy and information management regulations are established and operated based on
the Information Security Management System: ISO27001 (hereinafter referred to as ISMS), with the following
three key points in information management.

In our business activities, we utilize many information assets,
including personal information entrusted to us by our customers,
and we recognize that protecting these information assets is a
top management priority in order to meet the expectations of
all stakeholders.
Therefore, we declare that we will formulate our Information
Security Policy, establish and operate an ISMS (Information

Confidentiality

Integrity

Availability

Security Management System) based on this policy, and makecompany-wide efforts to continuously improve it in light ofchanges in the environment surrounding our company.
In addition, we have established the following security
objectives
A State in which only authorized

A State in which information has not

A State in which those who need thepersons have access to the information.

been destroyed, altered, or erased.

information can access it when they need it.

In light of the changing environment in which we operate, we are making company-wide efforts to continuously

and will ensure that all measures are implemented to achievethese objectives.
• Respect and comply with customer contracts and legal

or regulatory requirements.

improve this system.

• Prevent information security incidents before they occur.
• In the event of an information security incident, minimize

the impact.

IS 759490 / ISO27001* Scope of application: International Sales Division, Information Systems Department
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APPENDIX

Information Security
Structure and Operation
We have appointed a director in charge of security andEach department's Information Security Committee member

organized a Security Committee under the director to establish,

will annually identify information assets and review anddeploy, and continually improve ISMS. Each department has animplement security measures for each.

Information Security Committee member, who, in cooperation
with other committee members, conducts departmental

periodically audited by internal auditors to evaluate whether

education, incident reporting, and countermeasures.

they are being properly implemented and whether there are

ISMS started with the Information System Department, theany opportunities for improvement.

main body of the Security Committee (2022), and expanded

The activities and internal audit details are reported to thethe scope of application to the International Sales Division in
2023. We plan to continue to roll it out sequentially throughout
the company in the future.

The status of operation of the introduced measures will bedirector in charge on a regular basis, and a system isestablished to ensure that the information is utilized in theconsideration of future policies and security measures.
Information Security Structure
Top Management (Management)
ISMS Internal Audit Manager
Oversee audits related to the information security
management system and its implementation

Security Committee

Information Security Committee Chairman
Report to top management on the performance of the ISMS, which oversees theimplementation and operation of the information security management system.

ISMS Person responsible
for education
Develop and implement
an education plan on ISMSTOKIWA Sustainability Report 2023

Department manager(Information Security Committee membersof each department)

Manage the department as thedepartmental representative for the
information security management system.

Information system manager

ISMS documentation manager

The manager of the Information System Division,
who implements security control measures tomaintain ISMS in accordance with the rules andregulations for information system management.

Maintain and manage documents
and records related to the information
security management system
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APPENDIX

Information Security
Education

Security checks by outside experts

Even with a complete security management system in place,

In order to objectively evaluate the current security level andindividual employees must have the correct understanding andclarify issues, we undergo security checks by a third-party

awareness of the system in order to operate it properly. The

organization, and by addressing these issues, we are further

education manager of the Security Committee updates the e-

improving our security system.

learning content every year, and all employees are required totake the course. Comprehension is also monitored throughconfirmation tests and, if necessary, refresher training is• Quarterly review of activities with security firms• Annual review of activity plans with security firms

provided. In order to experience and learn from the practice,
we regularly send out e-mails that mimic cyber attacks, andfollow up individually with any employee who has mishandled
the response.

Zero security incidents continued
In 2022, we expanded the operation of ISMS, educated our

Example 1

employees on information security within the company, andYou left your briefcase in a restaurant, and it was picked up by another person – personal information goes astray
Security NEXT – 2016/03/03

implemented EDR (Endpoint Detection and Response), a type ofDocument handling
Company documents to be handled as follow.

Principles of data security: meaning and importance of activity
Principles of data security is the basic rule of the company’s data security activity, and guides our activity
Principles of data security includes the aim (security aim) for the company’s introduction of ISMS
Essential

Understand the security aims included in the data security principles(Security aims) * extract from data security principles• Confidentiality of customer contracts and legal or regulatory requirements• Take all measures to prevent data security incidents• In the event of a data security incident, reduce the effect as much as possible

Essential

security solution, for all users, including overseas offices. No

appeals have been received.
However, the risk of information leakage due to increasingly
sophisticated cyber attacks and accidents still exists. We arecommitted to addressing these threats and continuously
improving our information security.

* Please refer to the next page for data security principles

Each member to think how to comply with the above security aims

Education manual: e-learning

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APPENDIXTOKIWA Sustainability Report 2023

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APPENDIXENVIRONMENT
Responsible supply chain
TOKIWA Corporation
Basic Purchasing Policy
With the mission of Bringing beauty,
excitement and joy to the world, TOKIWA
Corporation strives to serve customers
through revolutionary innovation, superior
product quality and responsiveness, and clean
beauty that is friendly to the people and theenvironment as well as aim to be a company
that meets expectations and contributes
sustainably to society. To achieve this, we willconduct purchasing activities based on thepolicies listed below.
1. Quality-oriented① In line with TOKIWA Corporation's Quality
Policy, we prioritize quality and safety, andalso place emphasis on cost.

3. Compliance① We will comply with social norms, relevantlaws and regulations, and the spirit of suchlaws and regulations, and conduct sensible
activities that are trusted by society.
② No personnel involved in purchasing haveany personal interest in any suppliers.
Furthermore, we will not accept any
compensation, gifts, or entertainment forthe purpose of obtaining or securing
inappropriate business benefits.

③ We will not force anyone to donate or use
our products or services.
④ We will cut ties with anti-social forces suchas organized crime groups, rejectunreasonable demands, and not provide
funds.

② We welcome new technologies andproposals that improve value for ourcustomers.

⑤ We strive to prevent corruption andmoney laundering, and strictly comply
with various trade sanctions laws related
to economic sanctions.

2. Open and fair transactions

4. Human Rights① We conduct procurement activities that
support proper corporate activities
through fair, equitable and opentransactions based on rational processes
and judgment.

① We understand internationally recognizedhuman rights and conduct businessactivities that respect international codesof conduct regarding human rights.

② When selecting business partners, we
comprehensively evaluate their CSR
initiatives, business conditions, technicalcapabilities, proposal capabilities, etc., inaddition to quality (Q), cost (C), delivery
time (D), and stable procurement.
TOKIWA Sustainability Report 2023

② We will cooperate with a wide range ofstakeholders to ensure that we do not
become complicit in human rights
violations.

③

Fundamental principles and rights at work,
as below, shall be respected.

• Effective recognition of freedom of
association and the right to collective
bargaining;• Prohibition of all forms of forced labour;• Prohibition of child labour• Elimination of discrimination in
employment and occupation;• Prohibition of inhuman treatment andharassment.
④ We value diversity, equality, and inclusion,and consider race, ethnicity, nationality,
gender, gender identity, sexual orientation,age, language, religion, beliefs, politicaland other opinions, origin, as well as aim
to avoid discrimination based on property,
family origin or other status, marital status,
family relationships, lifestyle, disability,
disease, background, etc. Moreover, in allof our activities, we accept people ofvarious nationalities and cultural
backgrounds, and strive to create anenvironment in which they can continue towork actively without being unfairly
excluded due to their various attributes orbackgrounds.

5. Consideration of the environment○ We shall strictly adhere to laws,
ordinances, and industry voluntarystandards, and aim to create a society thatcoexists and harmonizes with nature. We
will work with our business partners topractice purchasing activities that areconsiderate of the global environment,with consideration for the environment
and prevention of pollution.
6. Mutual trust and prosperity withbusiness partners○ We will build long-term relationships oftrust with our business partners and strive
for coexistence and mutual prosperity.
Furthermore, we will work with ourbusiness partners to properly manage andprevent various risks, and strive to avoid
any impact on society and management.
7. Management of Confidential
Information○ Personal and confidential information
provided by business partners will beappropriately managed and will not be
disclosed internally or externally without
consent.
8. Promoting CSR purchasing○ We will actively promote CSR purchasing
and contribute to the development of asustainable society together with ourbusiness partners.
Date of enactment: June 20, 2020
Revision 1: September 30, 2022
62

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXENVIRONMENT
Responsible supply chain
TOKIWA Corporation
CSR Procurement Guidelines
1. Structure/Compliance/Risk Management
1-1. Legal compliance
We shall comply with the laws andregulations of each country. We also
constantly monitor international norms,
guidelines, industry standards, and theirtrends, and strive to conduct transactions
that respect these.
1-2. Prohibition of corruption and bribery
We will maintain healthy and typicalrelationships with politics and government
and will not engage in bribery or illegal
political donations.
1-3. Prohibition of abuse of dominant position
We will not take advantage of our superior
position to engage in acts that put ourbusiness partners at a disadvantage.
1-4. Prohibition of inappropriate profit-sharing
and receipt of benefits
We will not provide or receive
inappropriate benefits in our relationships
with stakeholders.
1-5. Prohibition of conduct that restricts
competition
We will not engage in any behaviour that
obstructs fair, transparent,
and free competition.

TOKIWA Sustainability Report 2023

1-6. Respect for intellectual property
There shall be no infringement on theintellectual property of other companies.
1-7. Eradicate relationships with anti-social
forces
We will not have any relationships with
anti-social forces or organizations thatthreaten the order and safety of civilsociety.
1-8. Prevention and early detection of fraud
We will carry out activities to prevent
fraudulent acts and establish systems todetect and respond to them at an earlystage.
1-9. Information disclosure
Regardless of whether disclosure isrequired by law or not, we willproactively provide and disclose
information, including information on thebusiness situation, to stakeholders.

1-10. Emergencies
To protect the safety of life and body,
we prepare emergency response
measures based on the assumption ofdisasters and accidents that may occur,and thoroughly disseminate them within
the workplace.
1-11. Supply Chain Certification
We ask our business partners to fulfil
their social responsibilities, including thematters stipulated in this guideline.

2. Human rights/labour
2-1. Prohibition of forced labour
No form of forced or involuntary labour
shall be performed.
2-2. Prohibition of child labour
The labour of children under theminimum working age stipulated by law
is prohibited.
2-3. Prohibition of discrimination
We will respect the laws and cultures ofeach country and region, and will notdiscriminate in respect of employment
opportunities, recruitment, promotions,compensation, or other treatment basedon human rights, ethnicity, nationality,
religion, creed, place of birth, gender,
age, physical disability, etc.
2-4. Prohibition of inhumane treatment andharassment
We respect the human rights of ouremployees and prohibit harsh andinhumane treatment, including abuse
and all types of harassment.
2-5. Respect for freedom of association andexercise of the right to collective
bargaining
Respect for freedom of association andexercise of the right to collective
bargaining shall be given.

2-6. Diversity & Inclusion
We recognize the diversity of humanresources and work to create anenvironment where people can accept
each other, participate without exclusion,
be given equal opportunities regardlessof their attributes, and continue to workwith enthusiasm.
2-7. Appropriate wage payment
We will pay salaries to employees incompliance with all wage-related laws,
including minimum wages, overtime,and statutory benefits.
2-8. Appropriate management of working
hours
We shall appropriately manage
employee working hours to ensure thatthey do not exceed legal limits.
2-9. Safety and health management of theworking environment
We shall assess risks to workplace safety
and ensure safety through appropriate
design, technology, and management
measures.
In addition, we will assess the situations
in which people come into contact withorganisms and chemicals that areharmful to the human body, as well as
noise and odours in the workplace, andtake appropriate measures to create anenvironment where each employee canwork safely and healthily.
2-10. Regular management of employees
We understand the health status of
employees and shall perform
appropriate health management.
63

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXENVIRONMENT
Responsible supply chain
3. Environment

4. Safety/Security/Information

3-1. Tackling Environmental Management

4-1. Tackling Environmental Management

We will build and operate an

We will establish and operateenvironmentally friendly management

management systems that takes quality

system.

into consideration.

3-2. Management of Chemical Substances

4-2. Providing accurate information about

We will control chemical substances

products and services

specified by laws and regulations that

We will provide accurate information

are handled in the manufacturing

about products and services

process.
3-3. Minimizing environmental impact

4-3. Product Safety
Products and raw materials shall meet

We will strive to minimize the impact of

the safety standards stipulated by theour business on the environment.

laws and regulations of each country, as

3-4. Permits and regulatory compliance
We obtain permits and licenses
stipulated by environmental laws andwell as the standards required by ourbusiness partners.
4-4. Preventing leakage of personal andregulations, and report as necessary.

confidential information

We will also prevent pollution and health

We will ensure thorough information

damage and ensure thoroughsecurity and appropriately manage andcompliance with environmental laws andprotect personal information andregulations.

confidential information.

Date of enactment: June 20, 2020
Revision 1: January 1, 2023

TOKIWA Sustainability Report 2023

64

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXENVIRONMENT
Responsible supply chain
TOKIWA Corporation
Sustainable Raw Materials
Procurement Guidelines
In order to promote the development of asustainable society as stated in TOKIWA
Corporation's Basic Purchasing Policy, we
have established sustainable raw material
procurement guidelines for palm-derived raw
materials and conflict mineral raw materials
that have environmental and social issues andare promoting sustainable procurement.
Additionally, in order to protect against theeffects of chemical substances on humanhealth and the environment, we comply with
REACH regulations and promote sustainableprocurement.

1. Palm oil
TOKIWA Corporation promotes the
procurement of palm-derived raw materials
that take into account environmental andsocial issues.
For newly procured palm-derived raw
materials, we will use RSPO-certified products.
Furthermore, by 2030, we will switch all
palm-derived raw materials we purchase to
RSPO-certified products.
TOKIWA Sustainability Report 2023

RSPO, officially known as Roundtable on
Sustainable Palm Oil is a non-profit
organization comprised of sevenstakeholders involved in palm oil. RSPO
considers sustainable palm oil production
to not only be in compliance with relevant
legal systems, but also to be economically
viable, environmentally appropriate andsocially beneficial.
The RSPO Principles and Criteria (P&C)
defines 40 standards under sevenprinciples and provides specific indicatorsand guidance for each standard. The
content of the Principles and Standards isreviewed every five years to keep pacewith changing circumstances. We have twosystems in place as certification systems
for each process - certification thatsustainable production is carried out inaccordance with Principles and Criteria(P&C) at the production stage (P&C
certification) and a certification that asystem has been established to ensure thatcertified palm oil is passed through allstages of the supply chain (SC certification).

2. Conflict minerals
Regarding the mineral raw materials
purchased at TOKIWA Corporation, we

promote the procurement of raw materials
that do not use mineral resources mined inconflict areas.
Conflict minerals are mineral resources
mined in conflict areas such as Africancountries. In particular, the U.S. Financial
Regulatory Reform Act (Dodd-Frank Act),
enacted in March 2017, defines regulated
mineral resources as four substances: tin,tantalum, tungsten, and gold (3TG).
Subsequently, in 2017, the EU Conflict
Minerals Regulation was enacted in Europe.
Conflict areas: Democratic Republic of theCongo (DRC) and nine neighbouring
countries (Republic of the Congo, Angola,
Zambia, Tanzania, Uganda, South Sudan,
Rwanda, Central African Republic, andBurundi) Conflict minerals: tin, tantalum,
tungsten, gold and its derivatives

EU (European Union) that came into effecton June 1, 2007 Under the REACH
Regulation, with some exceptions,registration with the European Chemicals
Agency (ECHA) is required in order to sellchemical products of 1 ton/year or more
within the EU, whether existing or new.
Furthermore, if there is an intentional
release of a product, it is necessary to'register' it, and if it contains a substance ofhigh concern regarding toxicity (SVHC), it
is necessary to take measures such as'notification' or 'communication'.
Date of enactment: August 20, 2020

3. REACH regulations
Regarding raw materials purchased by
TOKIWA Corporation, we promote
procurement of raw materials that comply
with REACH regulations.
REACH (Regulation for the Registration,
Evaluation, Authorization and Restriction ofChemicals) is a chemical regulation in the65Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXENVIRONMENT
CO₂ emissions
Scope3

Scope1
Units

2019 FY

2020 FY

2021 FY

2022 FYJapan

t-CO₂-e

326

245

305

Overseast-CO₂-e

247

320

210

Total

t-CO₂-e

574

565

515

CategoryUnits2019 FY

2020 FY

2021 FY

2022 FY315

1. Products and Services Purchased

t-CO₂-e

113,787

71,99977,726

94,340136

2. Capital goods

t-CO₂-e

2,557

4,914

1,868

1,970

452

3. Fuel and energy businesses(not included in Scope 1 or 2)
4. Transportation and delivery(upstream)t-CO₂-e

824

794

939

871

t-CO₂-e

3,935

4,105

4,394

8,216

5. Waste generated from businesst-CO₂-e

326

395

360

398

6. Business trips

t-CO₂-e

176

180

168

181

7. Employee commuting

t-CO₂-e

611

618

583

626

12. Disposal of products soldt-CO₂-e

898

666

771

939

Total

t-CO₂-e

123,115

83,67186,809107,541

Scope2Market standards

Units2019 FY

2020 FY

2021 FY

2022 FYJapan

t-CO₂-e

2,707

2,447

1,653

233

Overseast-CO₂-e

2,809

2,615

2,784

3,278

Total

t-CO₂-e

5,516

5,062

4,437

3,511

Location standards

Units2019 FY

2020 FY

2021 FY

2022 FYJapan

t-CO₂-e

2,926

2,540

3,164

3,166

t-CO₂-e

2,534

2,615

3,011

3,278

Overseas
Total

t-CO₂-e

5,460

5,155

6,175

6,444

Supply Chain Emissions (Scope 1/2/3)
Units2019 FY

2020 FY

2021 FY

2022 FY

Scope1

t-CO₂-e

574

565

515

452

Scope2t-CO₂-e

5,516

5,062

4,437

3,511

Scope3t-CO₂-e

123,115

83,67186,809107,541

Total

t-CO₂-e

129,205

89,297

91,760111,503

4.4

4.7

4.3

4.2

Basic unit of sales t-CO₂-e/million yen* Scope2 is market standard

Scope3 Calculation method
Category

Calculation method

Calculated by multiplying the amounts of purchased/acquired products
1. Products and services purchasedor services by the emissions base unit
Calculated by multiplying the amount of each capital good purchased
2. Capital goods
or acquired by the emissions base unit.
3. Fuel and energy (not included in Calculated by multiplying the physical quantity data (consumption
Scope 1 or 2) Related activities
amount) of various energies by the emission base unit
Calculated by multiplying fuel consumption, payment costs, etc. by
4. Transportation, delivery
emissions base unit for each type of logistics such as transportation(upstream)and storage
Calculated by multiplying various waste emissions by emissions base
5. Waste generated from business
unit (excluding emissions from overseas subsidiaries)
Calculated by multiplying the number of employees by emission base
6. Business trips
unit
Calculated by multiplying the number of employees by the number of
7. Employee commute
business days per year and emissions base unit
Calculated by multiplying the estimated amount of various waste
12. Disposal of products soldemissions by the emission base unit
* Unit emissions are based on the "Database on Unit Emissions for Calculating Greenhouse Gas Emissions of Organizations
through Supply Chains (Ver. 3.2)", etc. Categories 8 to 11 and 13 to 15 are excluded because they are difficult to calculate or
do not apply.

TOKIWA Sustainability Report 2023

66

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXENVIRONMENT
Amount of energy usedUnits

2019 FY

2020 FY

2021 FY

2022 FY

Oil/gas

MWh

2,030

1,750

1,725

1,678

Electricity/steamMWh10,556

9,563

12,12011,590Total

MWh12,586

11,313

13,845

13,268

Basic unit of sales

MWh/million yen

0.4

0.6

0.6

0.5

Units

2019 FY

2020 FY

2021 FY

2022 FY

Manufacturing HQ

MWh

0

0

2,697

5,357

Indirect

MWh

0

0

447

1,355

Overseas

MWh

0

0

0

0

Total

MWh

0

0

3,144

6,712

Units

2019 FY

2020 FY

2021 FY

2022 FY

Use of Renewable Energy

Amount of waste
Organic waste

t

22.9

15.5

194.2

30.4

Inorganic waste

t

863.3

939.2

676.3

692.8

Total

t

886.2

954.8

870.5

723.2

2019 FY

2020 FY

2021 FY

2022 FY㎥

33,39529,811

23,923

27,466

㎥

―

―

―

4,550

㎥

3,023

2,583

3,283

3,387

Overseas: City water㎥

29,24627,09323,121

17,918Total㎥

65,66459,48750,32753,321City water and well water consumption
Units
Japan (Manufacturing HQ):City water
Japan (Manufacturing HQ):
Well water
Japan (indirect sector):
City water

TOKIWA Sustainability Report 2023

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXSOCIAL* Human resources-related data is based on data as of December 31, 2022 unless otherwise specified.

Number of employees, age composition, female ratio
TOKIWA CorporationMale• TOKIWA Corporation, SONAX Corporation
Reference: JapanCountry where groupcompanies are located • Kunshan Tokiwa Cosmetics Co., Ltd.: China

TOKIWA Subic Corporation
2020

2021

2022

Under 30

60

47

51

30 to 49 years old

179

171

Over 50

2021

2022

Under 30

9

9

9

184

30 to 49 years old

1623Over 50

77

89

100

316

307

335

106

72

85

30 to 49 years old

230

203

213

Over 50

201

223

229

537

498

527

Employees (Number)

853

805

862

Ratio of female employees (%)

63%

62%

61%

Female Under 30

TOKIWA COSMETICS INTERNATIONAL
2020

Kunshan Tokiwa Cosmetics Co., Ltd.

Male

2020

2021

2022

Under 30

ー

0

0

23

30 to 49 years old

ー

1

2

Over 50

ー

0

2

ー

1

4

ー

1

2

2

1

2

33

34

111

115

110

30 to 49 years old

65

65

62

30 to 49 years old

ー

0

1

Over 50011Over 50

ー

0

1

176

181

173

ー

1

4

Employees (Number)

203

214

207

Employees (Number)

ー

2

8

Ratio of female employees (%)

87%

85%

87%

Ratio of female employees (%)

ー

50%

50%

Female Under 30

SONAX Corporation

2020

2021

2022

Under 3032

3

30 to 49 years old

3535Over 50

8

2021

2022

ー

0

0

36

30 to 49 years old

ー

7

8

9

Over 50

ー

46

45

48

5

4

5

221

217

208

7

6

7

233

227

220

Employees (Number)

279

272

268

Ratio of female employees (%)

84%

83%

82%

30 to 49 years old
Over 50

TOKIWA Sustainability Report 2023

Female Under 30

TOKIWA-C.M.C EUROPE INC.
2020

Female Under 30

Male

27

Under 30Male

• TOKIWA Subic: Philippines• TOKIWA COSMETICS INTERNATIONAL: USA• TOKIWA-C.M.C EUROPE INC.: France

2020

2021

2022

Under 30

ー

0

0

8

30 to 49 years old

ー

0

0

3

3

Over 50

ー

0

0

ー

10

11

ー

0

0

ー

0

0

ー

0

0

30 to 49 years old

ー

9

8

30 to 49 years old

ー

1

1

Over 50ー

67Over 50

ー

0

0

ー

15

15

ー

1

1

Employees (Number)

25

25

26

Employees (Number)

2

1

1

Ratio of female employees (%)

ー

60%

58%

Ratio of female employees (%)

ー

100%

100%

Male

Female Under 30

Male

Female Under 30

68

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXSOCIAL* Human resources-related data is based on data as of December 31, 2022 unless otherwise specified.

Number of employees by employment type

Ratio of women by position

TOKIWA Corporation

Full-time employee

SONAX Corporation
2020

2021

2022

447

407

432

TOKIWA Corporation
2020

2021

2022

Full-time employee

10

10

11

13

13

2020

2021

2022

Board member

0%

20%

33%

13

General Manager or above

11%

8%

10%

Manager or above

0%

0%

5%

Cooperating employee(Full-time part-timer)

224

245

291

Cooperating employee(Full-time part-timer)

Other (Short time, contract)

182

153

139

Other (Short time, contract)

2

2

2

Employees (Number)

853

805

862

Employees (Number)

25

25

26

2020

2021

2022

2020

2021

2022

272

266

262

Full-time employee

ー

2

8

ー

0

0

Kunshan Tokiwa Cosmetics Co., Ltd.

Full-time employee

TOKIWA COSMETICS INTERNATIONAL

Cooperating employee(Full-time part-timer)

7

6

6

Cooperating employee(Full-time part-timer)

Other (Short time, contract)

0

0

0

Other (Short time, contract)

ー

0

0

279

272

268

Employees (Number)

ー

2

8

Employees (Number)

TOKIWA Subic Corporation

Full-time employee

TOKIWA-C.M.C EUROPE INC.
2020

2021

2022

203

214

207

2020

2021

2022

Full-time employee

2

1

1

ー

0

0

Cooperating employee(Full-time part-timer)

0

0

0

Cooperating employee(Full-time part-timer)

Other (Short time, contract)

0

0

0

Other (Short time, contract)

ー

0

0

203

214

207

Employees (Number)

2

1

1

Employees (Number)

TOKIWA Sustainability Report 2023

* Officers: Directors, auditors
General Manager and above: Executive Officer, Centre Director, Chief Researcher,
Vice President, Senior Director, Assistant to General Manager, Manager(Expert),
Factory Manager, Deputy Factory Manager, General Manager
Manager and above: Deputy General Manager, Senior Manager, (Head of office) ,Manager

Ratio of nationalities in senior management
positions
2020

2021

2022

TOKIWA Corporation (Japan)

100%

100%

100%

Kunshan Tokiwa Cosmetics Co.,
Ltd. (China)

86%

93%

93%

TOKIWA Subic (Philippines)

100%

100%

100%

* Senior management: Executive officer to general manager level

Number of temporary workers
2020

2021

2022

TOKIWA Corporation

296

446

524

TOKIWA Subic

108

119

147

69

Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXSOCIAL* Human resources-related data is based on data as of December 31, 2022 unless otherwise specified.

Number of new hires (full-time employees)
TOKIWA Corporation

Male

TOKIWA Subic Corporation
2020年

2021年

2022年

Under 3051

12

30 to 49 years old

32Over 50

2

2020年

2021年

2022年

Under 30

0

0

0

6

30 to 49 years old

0

0

0

2

Over 50

0

10

3

20

11

4

16

30 to 49 years old

0

0

19

Over 50

1

0

2

12

4

37

22

7

57

Female Under 30

Total (Number)

Kunshan Tokiwa Cosmetics Co., Ltd.

MaleTOKIWA COSMETICS INTERNATIONAL

Male

2020年

2021年

2022年

Under 30

ー

0

0

0

30 to 49 years old

ー

0

0

0

0

Over 50

ー

0

1

0

0

0

ー

0

1

1

0

1

ー

0

1

30 to 49 years old

0

0

0

30 to 49 years old

ー

0

1

Over 50000Over 50

ー

0

1

1

0

1

ー

0

3

1

0

1

ー

0

4

2020年

2021年

2022年

Under 30ー00Female Under 30

Total (Number)

SONAX Corporation

2020年

2021年

2022年

Under 30002

30 to 49 years old

01Over 50

0Male

Female Under 30

Total (Number)

TOKIWA-C.M.C EUROPE INC.
2020年

2021年

2022年

Under 30

ー

ー

0

2

30 to 49 years old

ー

ー

3

30 to 49 years old

ー

0

0

0

0

Over 50ーー0Over 50

ー

0

0

0

1

4

ー

ー

3

ー

0

0

0

0

1

ー

ー

1

ー

0

0

30 to 49 years old

0

2

10

30 to 49 years old

ー

ー

2

30 to 49 years old

ー

0

0

Over 50000Over 50ーー0Over 50

ー

0

0

0

2

11

ー

ー

3

ー

0

0

0

3

15

ー

ー

6

ー

0

0

Female Under 30

Total (Number)

TOKIWA Sustainability Report 2023

Male

Female Under 30

Total (Number)

Male

Female Under 30

Total (Number)

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Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXSOCIAL* Human resources-related data is based on data as of December 31, 2022 unless otherwise specified.

Childcare leave (As of December 31, 2022)

Number of work-related injuries and illnesses

TOKIWA Corporation

Number of injury fatalities
2020

Male

Number of rights holders

2021

7

2022

12

6

TOKIWA Corporation

Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

Number of acquirers(Acquisition rate)

1 (14%)

2 (17%)

6 (100%)

Number of people returning
to work
Number of employees who
have been back to work formore than 12 months(Rate of people
returning to work)

1

―

0

6 (300%)(Retention rate)0―

1 (100%)

0

7

7

7

Female Number of rights holders

(0%)

(0%)

Number of acquirers(Acquisition rate)

6 (86%)

7 (100%)7 (100%)

Number of people returning
to work
Number of employees who
have been back to work formore than 12 months(Rate of people
returning to work)6―

7 (117%)8 (114%)(Retention rate)7―

5 (83%)

7 (100%)* Reinstatement rate = number of employees reinstated in that year/number of employees reinstated in theprevious year

Percentage of people conducting
performance evaluations

Training time per person (h)TOKIWA Corporation
Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation
SONAX Corporation
TOKIWA COSMETICS
INTERNATIONALTOKIWA Sustainability Report 2023

2020

2021

2022

―

1.2

0.2

9.5

10.1

10.3

TOKIWA Corporation
Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

1.0

11.1

3.1

―

0.0

0.0

SONAX Corporation

1.4

TOKIWA COSMETICS
INTERNATIONAL

―

40.0

2020

2021

2022

100%

100%

100%

99%

98%

98%

98%

98%

100%

100%

100%

100%

―

100%

100%

Number of deaths from disease

2020

2021

2022

0

0

0

2020

2021

2022

0

0

0

0

0

0

0

0

0

TOKIWA Corporation

Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

0

0

0

0

0

0

SONAX Corporation

0

0

0

SONAX Corporation

0

0

0

Total

0

0

0

Total

0

0

0

2020

2021

2022

2020

2021

2022

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

SONAX Corporation

0

0

0

SONAX Corporation

0

0

0

Total

0

0

0

Total

0

0

0

2020

2021

2022

5

6

5

0

0

0

0

0

0

SONAX Corporation

0

0

0

Total

5

6

5

Number of serious injuries
TOKIWA Corporation
Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

Number of sick people
TOKIWA Corporation
Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

Number of injury fatalities
TOKIWA Corporation
Kunshan Tokiwa
Cosmetics Co., Ltd.
TOKIWA Subic
Corporation

71Company Overview

TOKIWA Sustainability

TOKIWA Sustainable Beauty

ENVIRONMENTSOCIAL

GOVERNANCE

APPENDIXSOCIAL* Human resources-related data is based on data as of December 31, 2022 unless otherwise specified.

Basic salary per employee (Male/female ratio)

Labor union membership ratio,
number of labour-management negotiations

TOKIWA Corporation

TOKIWA Corporation(100 for male)

2020

2021

2022

Full-time employee

75

74

76

Cooperating employee(Full time part)

92

94

101

New graduate employees

100

100

100

New graduate employee
minimum wage ratio

109

106

102

TOKIWA Labour Union

2021

2022

38%

39%

41%

7 times

12 times

12 times

2020

2021

2022

96%

95%

90%

0 times

0 times

0 times

Kunshan Tokiwa Cosmetics Co., Ltd.

* Minimum wage: Gifu prefecture where major factories are located is 100* As for the difference in wages between men and women, there is no difference inwages for equal work, the difference is due to differences in personnel composition bygrade and other factors.

Welfare benefits for open-ended andfixed-term employment

2020

KTC Labour Union

TOKIWA
Corporation

Kunshan Tokiwa
TOKIWA Subic
Cosmetics Co., Ltd.
Corporation

SONAX
Corporation

Field

Policy content

Social insurance

Health insurance, welfare pension, nursing care insurance,
employment insurance, workers' compensation insurance

〇

〇

〇

〇

〇

✕

〇

〇

birth insurance, housing reserve fund,

✕

✕

〇

〇

✕

✕

✕

✕

PensionDefined contribution pension

〇

✕

✕

✕

〇

〇

✕

✕

Livelihood
supportCommuting expenses allowance, uniform loan, lunch
expenses assistance (Partially applicable)

〇

〇

✕

✕

〇

〇

〇

〇

Self-development Correspondence education/qualification acquisition subsidies

〇

✕

〇

〇

〇

〇

✕

✕

Wealth creation

Asset accumulation savings

〇

〇

✕

✕

✕

✕

✕

✕

Employee stock ownership plan

〇

✕

✕

✕

✕

✕

✕

✕

Residence

Company housing/singles apartment rental

〇

✕

✕

✕

✕

✕

✕

✕

Childcare/nursing care

Vacation, leave of absence, short-time working hours related
to childcare and nursing care,

〇

〇

〇

〇

〇

〇

〇

〇

Other

Celebration and condolence money, long service award

〇

〇

〇

〇

〇

✕

✕

✕

Group insurance

〇

〇

✕

✕

〇

✕

✕

✕

TOKIWA Sustainability Report 2023

Indefinitely Fixed term Indefinitely Fixed term Indefinitely Fixed term Indefinitely Fixed term

72

TOKIWA Corporation
Tokyo HQ
5F, Kyotoku Building, 1-9-5 Oji, Kita-ku, Tokyo
114-0002

TEL: 03-3914-2111 (main)

FAX: 03-3913-8411

https://www.tokiwa-corp.com
Contact: Sustainability Promotion Department