Governance Strategy

Message from the Chairman

Managing the Boardof Directors to Achieve
Our Purposeof Directors strives to establish an environment in which thisCode is respected, and all our people act with high ethicalprinciples as a matter of course.
The promotion of decarbonization as a response to climate change is one of the most important targets of the Oji
Group’s sustainability strategy. To achieve this goal, we haveformulated our Environmental Vision 2050, and we are working on initiatives based on the Environmental Action Program
2030, which are the milestones for the Vision. As measures
to reduce emissions, while promoting the fuel conversion of
our coal-fired boilers in Japan and the introduction of renewable energies, we will strive to increase CO2 absorption andfixation by expanding the land area of our overseas forest

Representative Director andChairman of the Board,
Oji Holdings Corporation

Masatoshi Kaku

plantations. The Oji Group will steadily advance, step by step,
toward the achievement of our goals by implementing measures to protect the global environment in our efforts to build
a sustainable society.
In 2022, we established the Sustainability Committee, with
the Group CEO as chair, to discuss the risks of and measures
for sustainability. The progress of our efforts toward decarbonization is reported to the Committee, and lively discussions takes place on future developments. The Committee
also discusses a variety of other matters, including humanrights due diligence, supplier risk surveys, product safety, andinclusion and diversity. The Board of Directors will also closely
monitor the Group’s efforts toward sustainability challenges.

Succession Plan Implementation and Human Capital Management
Review of FY2022 as Chairman of the Board• Evaluation of the Board of Directors in terms of progressin the first year of the Medium-term Management Plan
• How were outside directors’ opinions from external perspectives reflected?

Strengthening of Governance and Promotion of Sustainability Strategy• Higher standards of governance required of the Oji
Group and initiatives to achieve them
• Complying with the TCFD recommendations and monitoring initiatives based on our Environmental Vision andEnvironmental Action Program• Progress made with the establishment of the Sustainability Committee
In recent years, companies are being called on to improvetheir corporate governance from various perspectives. Need-63

The Oji Group Integrated Report 2023

less to say, we need to strengthen our supervisory structure,with the Board of Directors at the center, by building a firm
governance system that factors in a range of perspectives.
However, we are a company comprising individual officers andemployees, and I believe that the most important thing of all isthat every one of them acts with sound and high ethical principles. The Oji Group established the Oji Group Corporate
Code of Conduct based on the fundamental values and philosophy that we have cultivated to date, and all officers andemployees are required to comply with that Code. The Board

In addition to advanced expertise regarding the Oji Group’sbusiness, the Group CEO and other chief officers are expected to have strong leadership and corporate management
skills that will enable them to manifest the Group’s management and growth strategies and to solve problems in response to the demands of society. The Oji Group has adopted a COMPANY system under which the businesses of theGroup are consolidated into closely related business groups
for management purposes, with the aims of accelerating thedecision-making and clarifying management responsibilitiesof each business. This system allows the executive management team of each COMPANY and business company to improve the capabilities and knowledge required for corporate
management within the scope of the businesses for which
they are responsible. This leads to the development of thenext generation of human resources who will be able to as-sume the management of the Oji Group as a whole. The
Nomination Committee, most of whose members are Independent Outside Directors, discusses these succession plans
and selects executive candidates.
The development of employees is just as important anissue as the development of executive candidates. The Oji
Group must achieve its sustainable growth through thegrowth of its employees. We believe that it is our responsibility to help employees to undertake more advanced andrewarding work by providing them with assistance to upgrade their skills, and in doing so, offer a rich and fulfilling
life to all our employees. For this reason, we will place efforts into the establishment of skills development and careerdevelopment systems for employees and of a human resources management system, and into the improvement of
the working environment. We will continue these efforts with
an awareness that the mission of management and theBoard of Directors is to make the Oji Group a corporategroup whose employees continue to grow with high motivation and work with happiness.

Governance Strategy

With the renewal of the Board of Directors and executive management structure under Group CEO Hiroyuki Isono, FY2022,
the first year of the new Medium-term Management Plan, wasa year in which the Oji Group aimed for further evolution withnew resolve. Although the COVID-19 pandemic, which hadsuch a tremendous impact on our daily lives and economic
activities over the past three years, has finally come close to
an end, the sharp rises in fuel and raw materials prices thatbegan with Russia’s invasion to Ukraine have been prolonged
with the increase in demand as the global economy has returned to normal. These trends dealt a major blow to the earnings of the Oji Group. To ensure the continuation of stablesupply of our products, we implemented gradual price revisions after obtaining our customers’ understanding of theneed to pass the increases in raw materials and fuel prices
onto our own prices. Even so, our FY2022 results fell significantly short of our initial plans. Even as that harsh businessenvironment continues in FY2023, the Oji Group must continue to work on initiatives for future growth and evolution. We
also recognize that we have a grave responsibility, imposed on

us by the international community, to tackle global environmental problems such as climate change and marine plastics
waste.
After the formulation of the Medium-term Management Plan
in May 2022, the Board of Directors held repeated discussions
on various issues, such as investment and R&D for the future,
the appropriateness of risk-taking, and the optimal allocation ofhuman capital, as well as our responses to the harsh businessenvironment. Precisely because of the uncertainties of the economic and social environment, in addition to making decisions
that will drive the Group forward, the Board of Directors is required to supervise the execution of business through appropriate risk management. Oji Holdings currently has four Independent Outside Directors on its Board of Directors, all of whom
possess knowledge and expertise in industries that differ fromthose of the Oji Group. They put their knowledge and expertise
to use in contributing to discussions from broad perspectives,
while enhancing the diversity of the Board’s membership. We
hold briefings for Outside Directors in advance on matters to be
proposed to the Board of Directors and reflect their opinions in
the discussions at Board of Directors meetings. There are times
when they make quite harsh comments about matters such as
risk management that have been overlooked by the executive
management team. I hope that they will continue to performtheir supervisory function in the Board of Directors.

• Initiatives for the development of executives and senior
management for the next generation• The Oji Group’s approach to human capital management

The Commitments We Want to Convey to Our Stakeholders• What the Board of Directors will advance in the future toachieve our Purpose• Enhancing stakeholder engagement
In line with the formulation of the Long-term Vision and theMedium-term Management Plan, we developed our Purpose, based on the Oji Group’s Management Philosophy, toconvey it in simpler terms. The Purpose expresses our intention to contribute to society and to the Earth by growing forests, which represent the core of the Group’s business, andby delivering products from forest resources. As our paper
business is itself sustainable, we believe that making reliable
products that are needed by the market will, in itself, contribute to the building of a sustainable society. Developing newmaterials derived from wood and demonstrating the potentialof forest resources are also crucial roles for us. The Board of

Directors will support management decisions made by the
executive team while undertaking risk assessments appropriately, to ensure that the progress being made towardachieving our Purpose is not halted, even in a difficult business environment.
In February 2023, the Oji Group marked its 150th anniversary. Since its founding, we have been able to grow as acorporate group that contributes to the Earth and society
thanks to the tremendous support we have received from all
our stakeholders, including shareholders, investors, customers, business partners, employees, and local communities.
Going forward, we will strive to provide information that iseasier to understand and to achieve further evolution while
deepening our engagement with all stakeholders. We hopethat you will continue to grant us your exceptional understanding and support.

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64

Governance Strategy

Corporate Officers (Oji Holdings Corporation)

Masatoshi Kaku

Hiroyuki Isono

Michihiro Nara

Sachiko Ai

Representative Director and Chairman of the Board
Chairman of the Board

Representative Director of the Board
President and Group CEO

Independent Outside Director of the Board

Independent Outside Director of the Board
April 1989

April 1978
Joined the former Nippon Pulp Industry Co., Ltd.
April 2011
Corporate Officer, the Company
April 2012
Executive Officer, the Company
October 2012 Executive Officer, the Company
June 2013
Director of the Board and Executive Officer,
the Company
April 2019
Representative Director of the Board,
President and CEO, the Company
April 2022
Representative Director and Chairman of theBoard, the Company (to the present)

April 1984
Joined the Company
October 2012 Director of the Board, Oji Management
Office Inc.
April 2014
Corporate Officer, the Company
June 2015
Director of the Board and Executive
Officer, the Company
April 2021
Director of the Board and Senior Executive
Officer, the Company
April 2022
Representative Director of the Board,
President and Group CEO, the Company(to the present)

April 1974
June 2004

Fumio Shindo

Kazuhiko Kamada

Representative Director of the Board
Executive Vice President
Division of duties:
Corporate Sustainability Division
Innovation Promotion Division
Group Technology Division
In charge of Oji Engineering Co., Ltd.

Director of the Board
Senior Executive Officer
Division of duties:
Corporate Governance Division
Chairman, Celulose Nipo-Brasileira S.A.
President, Oji Management Office Inc.
In charge of:Oji Human Support Co., Ltd.
Oji Business Center Co., Ltd.
Oji Paper Management (Shanghai) Co., Ltd.
Oji Asia Management Sdn. Bhd.
Oji Logistics Co., Ltd.

April 1984
April 2014
April 2016
April 2017
April 2018
June 2019
April 2021
April 2023

Joined the Company
Corporate Officer, Oji Paper Co., Ltd.
Director, Oji Paper Co., Ltd.
Corporate Officer, the Company
Executive Officer, the Company
Director of the Board and Executive Officer,
the Company
Director of the Board and Senior Executive
Officer, the Company
Representative Director of the Board andExecutive Vice President, the Company(to the present)

May 2013
April 2014

Joined Oji Management Office Inc.
President and Representative Director, Oji
Forest & Products Co., Ltd.
January 2015 Corporate Officer, the Company
June 2015
Director of the Board and Executive
Officer, the Company
April 2022
Director of the Board and Senior Executive
Officer, the Company (to the present)

Akio Hasebe

Director of the Board
Executive Officer
President, Functional Materials COMPANY
President, Oji Functional Materials Progressing Center Inc.
President, Oji Imaging Media Co., Ltd.

Director of the Board
Executive Officer
President, Industrial Materials COMPANY
President, Oji Industrial Materials Management
Co., Ltd.

April 1984
April 2016

April 1986
April 2017

April 2017
April 2019
June 2020

Joined the former Honshu Paper Co., Ltd.
Corporate Officer, General Manager, Sales
Division, Oji F-Tex Co., Ltd.
Director and Corporate Officer, General
Manager, Sales Division, Oji F-Tex Co., Ltd.
Corporate Officer, the Company
Director of the Board and Executive Officer,
the Company (to the present)

April 2019
April 2022
June 2022

Joined the Company
Director, Oji Industrial Materials Management
Co., Ltd.
Corporate Officer, the Company
Executive Officer, the Company
Director of the Board and Executive Officer,
the Company (to the present)

June 2014
June 2015

June 201665

Independent Outside Director of the Board

April 1983
April 2008

Joined Japan Airlines Co., Ltd.
Manager, In-flight Sales Group, Japan Airlines
Co., Ltd.
April 2012Manager, Passenger Cabin Dept., JAL
Express Co., Ltd.
October 2014 Manager, Cabin Attendants Section 4, Haneda
Airport, Japan Airlines Co., Ltd.
April 2015
Professor, College of Foreign Studies, Kansai
Gaidai University (to the present)
June 2019
Outside Director, Member of the Board,
ShinMaywa Industries, Ltd. (to the present)
June 2021
Independent Outside Director of the Board,
the Company (to the present)

April 1981
Joined Mitsubishi Corporation
June 1998
Director, Nichiryo Baking Co., LTD.
April 2004
Senior Vice President, Lawson, Inc.
September 2004 Executive Managing Officer, Lawson, Inc.
November 2005 Unit Manager of Lawson Business, Mitsubishi
Corporation
April 2006
Unit Manager of Retail Business, Mitsubishi
Corporation
April 2014
Senior Vice President (“riji”) and General
Manager of Life Industry Group CEO Office,Mitsubishi Corporation
April 2017
Advisor, Itoham Yonekyu Holdings Inc.
June 2017
Director Chairman of the Board, Itoham
Yonekyu Holdings Inc.
June 2022
Independent Outside Director of the Board,
the Company (to the present)

Tomihiro Yamashita

Teruo Yamazaki

Audit & Supervisory Board Member

Audit & Supervisory Board Member

April 1982
Joined the Company
October 2012 General Manager, Internal Audit Department,
Corporate Governance Division, the Company
April 2014
Audit & Supervisory Board Member, Oji
Container Co., Ltd.
April 2016
Corporate Officer and Deputy General
Manager, Technology Division, Oji Container
Co., Ltd.
June 2017
Audit & Supervisory Board Member, theCompany (to the present)

April 1982
Joined the former Honshu Paper Co., Ltd.
February 2016 Deputy Mill Manager, Ebetsu Mill, Oji F-Tex
Co., Ltd.
April 2019
General Manager, Internal Audit Department
and Corporate Compliance Department,
Corporate Governance Division, the Company
April 2023
General Manager, Internal Audit Department,
Corporate Governance Division, the Company
June 2023
Audit & Supervisory Board Member, theCompany (to the present)

Hidero Chimori

Noriko Sekiguchi

Independent Outside Audit & Supervisory Board Member

Independent Outside Audit & Supervisory Board Member

April 1983
June 2002

March 1994 Registered as Certified Public Accountant
January 2002 Re-registered as Certified Public Accountant
November 2010 Representative of Sekiguchi CPA Office(currently Sekiguchi Noriko CPA Office)(to the present)
July 2012
Registered as Certified Tax Accountant
June 2015
Outside Director, TOKYO OHKA KOGYO
CO., LTD.
January 2019 Executive Officer, Chifure Holdings Corporation
June 2021
Independent Outside Audit & Supervisory
Board Member, the Company (to the present)
June 2022
Outside Audit & Supervisory Board Member,
Ryoden Shoji K.K. (currently RYODENCORPORATION) (to the present)
July 2022
Auditor, Japan International Cooperation Agency(to the present)
March 2023 Outside Director, Audit and Supervisory
Committee Member, TOKYO OHKA KOGYO
CO., LTD. (to the present)

June 2006

Registered as an attorney-at-law
Outside Audit & Supervisory Board Member,
OMRON Corporation
Outside Audit & Supervisory Board Member,
DUSKIN CO., LTD.
Independent Director, Audit & Supervisory
Committee Member, Kobe Steel, Ltd.
Outside COMPANY Auditor, ROHM Co., Ltd.
Outside Director, Member of the Board, Audit
and Supervisory Committee Member, ROHM
Co., Ltd. (to the present)
Independent Outside Audit & Supervisory
Board Member, the Company (to the present)

Takayuki Moridaira

Yuji Onuki

Takashi Nonoue

Director of the Board
Executive Officer
President, Household and Consumer Products
COMPANY
President, Printing and Communications MediaCOMPANY
President, Oji Nepia Co., Ltd.

Director of the Board
Executive Officer
President, Forest Resources and Environment
Marketing COMPANY
President, Oji Green Resources Co., Ltd.
President, Oji Forest & Products Co., Ltd.

Independent Outside Audit & Supervisory Board Member

The Oji Group Integrated Report 2023

April 2021

Hiromichi Ogawa

June 2016

April 1982
Joined the former Honshu Paper Co., Ltd.
October 2012 Director, Oji Green Resources Co., Ltd.
April 2014
Managing Director, Oji Green Resources
Co., Ltd.
April 2021
Corporate Officer, the Company
April 2022
Executive Officer, the Company
June 2022
Director of the Board and Executive Officer,
the Company (to the present)

June 2020

Independent Outside Director of the Board

June 2021

Joined the Company
Corporate Officer, Oji Paper Co., Ltd.
Director, Oji Paper Co., Ltd.
Corporate Officer, the Company
Executive Officer, the Company
Director of the Board and Executive Officer,
the Company (to the present)

April 2019

Seiko Nagai

June 2019

April 1985
June 2013
April 2016
April 2020
April 2022
June 2022

June 2016

Joined The Mitsubishi Trust and Banking
Corporation (currently Mitsubishi UFJ Trust andBanking Corporation)
Executive Officer, General Manager, Corporate
Consulting Division, Mitsubishi UFJ Trust andBanking Corporation
Executive Officer, General Manager, Audit
Division, Mitsubishi UFJ Trust and Banking
Corporation
Executive Officer, Acting General Manager, Audit
Division, Mitsubishi UFJ Financial Group, Inc.
Independent Outside Director of the Board,
the Company (to the present)
Director and Managing Executive Officer,
Audit Division (CAO), Mitsubishi UFJ Trust andBanking Corporation (to the present)
Managing Executive Officer, Group Deputy CAO,
Mitsubishi UFJ Financial Group, Inc. (to the present)

Governance Strategy

Shigeki Aoki

June 2013

Registered as an attorney-at-law
Outside Audit & Supervisory Board Member,
Nihon Tokushu Toryo Co., Ltd.
Outside Audit & Supervisory Board Member,
Seiko Epson Corporation
Independent Outside Director of the Board,
the Company (to the present)
Outside Director, Nihon Tokushu Toryo Co.,
Ltd. (to the present)
Outside Audit & Supervisory Board Member,
Chori Co., Ltd.
Outside Director (Audit & Supervisory
Committee Member), Seiko Epson Corporation
Outside Director (Audit & Supervisory
Committee Member), Chori Co., Ltd.

April 1982
Appointed as public prosecutor
January 2015 Director-General of the Public Security
Intelligence Agency
September 2016 Superintendent Public Prosecutor of the
Fukuoka High District Public Prosecutors
OfficeFebruary 2018 Retired from Superintendent Public Prosecutor
April 2018
Inspector General of Legal Compliance of the
Ministry of Defense
March 2021 Retired from Inspector General of Legal
Compliance of the Ministry of Defense
June 2021
Registered as an attorney-at-law
June 2022
Independent Outside Audit & Supervisory
Board Member, the Company (to the present)

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66

Governance Strategy

Corporate Governance

The Oji Group established the Oji Group Corporate Code of Conduct based on the fundamental values and philosophy that have been
handed down since the Group’s foundation and has undertaken business activities with an awareness of its role as a corporate memberof society and a strong sense of ethics throughout the Group. In order to increase corporate value and become a company that istrusted by society, we have built corporate governance structures described below and continuously enhanced the functions of theBoard of Directors, positioning the enhancement of corporate governance as a priority management issue. Going forward, we will work
to ensure management efficiency, soundness, and transparency, while building trusting relationships with all stakeholders.

Basic Concepts, Framework, and Operational Policies
Fundamental Policies on Corporate Governance
The Fundamental Policies on Corporate Governance set forth the basic concepts, framework, and operational policies regarding
corporate governance.
https://www.ojiholdings.co.jp/english/group/policy/governance.html

Nomination Committee and Compensation Committee
The Nomination Committee and Compensation Committee were established as advisory bodies to the Board of Directors in 2015.
These two committees ensure objectivity and transparency in decisions of the Board of Directors concerning nomination andcompensation, and the Compensation Committee analyzes the effectiveness of and deliberates the evaluations of the Board of
Directors. Each of the Committees consists of two internal Directors and four Independent Outside Directors.
Roles of Nomination Committee
Formulate nomination, appointment, and dismissal policies
related to personnel affairs for Directors, Audit & Supervisory
Board Members, Corporate Officers, and Corporate Advisors,deliberate on candidates, and submit recommendations to theBoard of Directors.

Structures of the Nomination Committee and the Compensation Committee and Their Meetings Held in FY2022
Position

Corporate Governance Report
The Oji Group posts its Corporate Governance Report, which it submits to Tokyo Stock Exchange, on its official website.
https://investor.ojiholdings.co.jp/en/ir/library/governance_report.html

Corporate Governance Structures
The Oji Group has adopted a “COMPANY system” under which Oji Holdings oversees the formulation of Group management
strategies and Group governance and each COMPANY, made up of closely-related businesses, plays a central role in business
operations. This structure accelerates decision making by each business unit and clarifies management responsibilities.
In addition, as a company with Audit & Supervisory Board, Oji Holdings reinforces Group-wide governance through audits ofthe execution of duties by Directors carried out by the Audit & Supervisory Board Members and the Audit & Supervisory Board.
The Board of Directors consists of 12 Directors (including four Independent Outside Directors) and the Audit & Supervisory Board
consists of five Audit & Supervisory Board Members (including three Independent Outside Audit & Supervisory Board Members),
and Representative Director and Chairman of the Board chairs the Board of Directors.

General Meeting of Shareholders
ReportingAccounting Auditor

Appointment anddismissal

Audit & Supervisory Board

Appointment anddismissal

Auditing

Board of Directors

Audit & Supervisory Board
Members’ Office
Determining the proposals of appointment,
Cooperation dismissal, and refusal of reelection
Judgement of appropriateness of accounting audits(Auditing firm)

Accounting
auditsNomination Committee
Compensation Committee

Reporting

Representative Director of the Board,
President (Group CEO)Internal Audit Dept.

Direction and supervision

Auditing

Discussion
and reporting

Group Management Meeting
Direction and supervision

Discussion and reporting

Corporate Officers

Corporate Governance Div.
Corporate Compliance Dept. Legal Affairs Dept.
General Affairs Dept. Public Relations and Investor Relations Dept.

Corporate Sustainability Div.

Masatoshi Kaku
Hiroyuki Isono

1/1
Committee Chair

Attendance

2/2

1/1

Michihiro Nara
Sachiko Ai
Seiko Nagai
Hiromichi Ogawa

Committee Chair

1/1
1/1
1/1
1/1

2/2
2/2
2/2
2/2
1/1

* Concerning Independent Outside Director Hiromichi Ogawa’s attendance at meetings of each Committee, the scope of the total number of meetings includes
only those meetings held after his appointment on June 29, 2022.

Policy on Determination of Director Compensation and Total Compensation Amount
Policy on Determination of Director Compensation
Oji Holdings has designed its compensation programs with an emphasis on the roles performed by the Director compensation program
such that the Board of Directors promotes sustainable growth and increasing medium- to long-term corporate value of the Company
and pursues enhanced profitability and capital efficiency. The compensation program and determination policies are set forth in theFundamental Policies on Corporate Governance. Director compensation comprises base compensation that is fixed compensation,bonuses that reflect short-term performance, and stock-based compensation that reflects medium- to long-term improvement incorporate value. Determinations are made by the Board of Directors based on recommendations submitted by the Compensation
Committee. Evaluation for bonuses takes into consideration the overall status of achievement of evaluation items concerning ESG.
Please refer to the Annual Securities Report for details concerning performance-linked compensation including bonuses and stockbased compensation.
Securities Reports (in Japanese) https://investor.ojiholdings.co.jp/ja/ir/library/securities.html
Performance-linked compensation
Position

Fixed compensation

Representative Director and Chairman of the Board
Representative Director of the Board, President and Group CEO
Representative Director of the Board, Executive Vice President
Director of the Board, Senior Executive Ofﬁcer
Director of the Board, Executive Ofﬁcer
Independent Outside Director

50%
50%
50%
50%
50%
100%

Bonuses

Stock-based
compensation

Subtotal

25%
25%
25%
25%
25%
—

25%
25%
25%
25%
25%
—

50%
50%
50%
50%
50%
—

Total

100%
100%
100%
100%
100%
100%

* The payment ratios will fluctuate due to changes in performance-linked compensation such as bonuses and stock-based compensation.

Sustainability Committee

Total Amount of Compensation for Each Officer Category, Total Amount of Compensation, Etc. by Type, and Number of Eligible Officers (FY2022)

Other business companies

Ofﬁcer category

Total amount ofcompensation(million yen)Group companies

The Oji Group Integrated Report 2023

Compensation Committee

Corporate Sustainability Dept.
Safety Administration Dept.

Each COMPANY

67

Attendance

Discussion and reporting

Appointment, dismissal,
and supervision
Reporting

Nomination Committee

Ratios of Performance-linked Compensation and Non-performance-linked Compensation

Reporting

Cooperation
Direction

Offering opinions

Name

Representative Director andChairman of the Board
Representative Director of theBoard, President
Independent Outside Director
Independent Outside Director
Independent Outside Director
Independent Outside Director

Governance Strategy

Corporate Governance Structural Diagram

Appointment anddismissal

Roles of Compensation Committee
Deliberate on compensation structures, compensation levels,and evaluation of Directors, Corporate Officers, and Corporate
Advisors as well as analysis and evaluation of the effectivenessof the Board of Directors, and submit recommendations to theBoard of Directors.

Total amount of compensation, etc. by type (million yen)
Performance-linked compensation
Fixed compensation
Stock-based
Bonusescompensation

Number of eligibleofﬁcers(persons)

Directors (excluding Independent Outside Directors)

459

206

136

117

11

Audit & Supervisory Board Members (excluding Independent Outside Audit &Supervisory Board Members)

55

55

—

—

2

Independent Outside Directors and Independent Outside Audit & Supervisory
Board Members

99

99

—

—

9

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Governance Strategy

Corporate Governance

Policy and Process for Nomination of Directors and Audit & Supervisory Board Members

Independent Outside Officers

PolicyStatus of Activities by and Reason for Appointment of Independent Outside Officers
Oji Holdings has appointed four Outside Directors and three Outside Audit & Supervisory Board Members, each of whom is designatedas an Independent Officer. The Independent Officers attend Board of Directors meetings and the briefings (held basically twice amonth) conducted by the officer responsible for the Corporate Governance Division regarding matters submitted to the Management
Meetings and matters planned to be submitted to the Board of Directors meetings. The Independent Outside Directors make up theNomination Committee and the Compensation Committee.
Persons with highly specialized and wide-ranging knowledge who are able to express opinions that are independent frommanagement and from the perspectives of various stakeholders are selected as Independent Outside Director candidates, andpersons with excellent character and insight, a high level of specialization, and extensive experience are selected as Independent
Outside Audit & Supervisory Board Member candidates.
In FY2022, the attendance of the total of seven Independent Outside Directors and Independent Outside Audit & Supervisory Board
Members at the Board of Directors meetings (15 meetings held) averaged 97.9%, and the attendance of Independent Outside Audit& Supervisory Board Members at the Audit & Supervisory Board meetings (13 meetings held) was 100%.

The Fundamental Policies on Corporate Governance of the Oji Holdings stipulate as a Director nomination policy that the Board of
Directors shall comprise Directors with diverse knowledge and expertise concerning the business operated by the Group in a wellbalanced manner. The Fundamental Policies also stipulate that candidates be nominated for Directors who possess excellent characterand insight and who may contribute to the sustainable growth as well as the increase of medium- to long-term corporate value of theGroup, and that candidates be appointed for Audit & Supervisory Board Members who are capable of executing the duties of Audit& Supervisory Board Members, and who possess excellent character and insight as well as high level of specialization and extensive
experience.
Process
When nominating candidates for Directors, the Nomination Committee, an advisory body to the Board of Directors, deliberates andrecommends to the Board of Directors. As for nomination of candidates for Audit & Supervisory Board Members, the Nomination
Committee recommends to the Board of Directors with the consent of the Audit & Supervisory Board, following deliberation among
the Nomination Committee. The Board of Directors receives reporting from the Committee, deliberates, and makes decisions.

Main Activities of Independent Outside Directors in FY2022

Directors’ Skill Map
Oji Holdings has identified the skills that members of the Board of Directors should possess as described below, to ensure that theBoard of Directors makes appropriate management decisions and is highly effective in the supervision of business execution to realize
the Group’s management strategies.
Relevance to Long-term Vision
Category

Expected skills

Corporate management

Essential management skills necessary for the achievement of a sustainable business corporation and management strategies
Skills necessary for contributing to the sustainability and growth of a corporation through ﬁnance as well as for oversight of management

Sales and marketing

Skills necessary to achieve the sustainable growth of a corporation through understanding the needs of society and earning
appropriate income

Attended 15 of
15 meetings(100%)

Sachiko Ai

Summary of statements made and duties performed with respect to expected role
Fulfilled the role expected of him by making comments concerning the Company’s management from an independent standpoint, from a multifaceted perspective, including legal viewpoints as an attorney-at-law, andbased on his extensive experience, high level of expertise, and wide-ranging insight

Skills concerning the development and utilization of diverse human resources essential for the sustainable growth andevolution of a corporation and achievement of management strategies

Purchase and procurement

Skills concerning stable procurement of raw materials as the foundation of production activities and the management offorests as sustainable sources of wood raw materials

Seiko Nagai

Attended 15 of
15 meetings(100%)

Hiromichi Ogawa

Attended 11 of
11 meetings(100%)

Skills for managing international business activities essential for the Oji Group’s global business activities

Fulfilled the role expected of her by making comments concerning the Company’s management from an independent standpoint, from a multifaceted perspective from the business world, including the financial area,and based on her high level of expertise and abundance of insight
Fulfilled the role expected of her by making comments concerning the Company’s management from an independent standpoint, from a multifaceted perspective, including professional viewpoints developed throughcustomer service and university teaching, and based on her extensive experience, high level of expertise, andwide range of insight
Fulfilled the role expected of him by making comments concerning the Company’s management from an independent standpoint, from a multifaceted perspective, including professional viewpoints developed throughmanagement of retail business and food manufacturing companies, and based on his extensive experience,high level of expertise, and wide range of insight* Concerning Mr. Hiromichi Ogawa’s attendance at meetings of the Board of Directors, the scope of the total number of meetings includes only those meetingsof the Board of Directors held after his appointment on June 29, 2022.

Skills concerning environmental, social, and governance aspects of corporate activities that are the foundation of corporate
management and essential for sustainability* Items marked with “ ” have particularly high relevance.

Main Activities of Independent Outside Audit & Supervisory Board Members in FY2022

The capabilities of each Director are as follows:
Name

*

69

Corporate
management

Position

Masatoshi Kaku

Representative Director andChairman of the Board

Hiroyuki Isono

Representative Director of theBoard, PresidentGroup CEO

Fumio Shindo

Representative Director of theBoard, Executive Vice President

Executive Vice President

Kazuhiko Kamada

Director of the Board

Senior Executive Ofﬁcer

Shigeki Aoki

Director of the Board

Executive Ofﬁcer

Finance Manufacturing Research
Sales
Personnel
Purchase
and
and
and
and
and labor
andInternationality
accounting technologies development marketing management procurement

ESG

Name

Hidero Chimori

Akio Hasebe

Director of the Board

Executive Ofﬁcer

Takayuki Moridaira

Director of the Board

Executive Ofﬁcer

Yuji Onuki

Director of the Board

Executive Ofﬁcer

Michihiro Nara

Director of the Board(Independent Outside)

Sachiko Ai

Director of the Board(Independent Outside)

Seiko Nagai

Director of the Board(Independent Outside)

Hiromichi Ogawa

Director of the Board(Independent Outside)

Governance Strategy

Personnel and labor
management

Attended 15 of
15 meetings(100%)

Manufacturing and technologies Skills essential for building an organizational structure for sustainable product supply, achieving higher productivity,
Research and development addressing environmental issues, and making innovation out of the core technologies that have been built up

ESG

Michihiro Nara

Attendance at Boardof Directors meetings

Environmental Profitability
Product
issuesimprovement development

Finance and accounting

Internationality

Name

Noriko Sekiguchi

Takashi Nonoue

Attendance at Boardof Directors meetings

Attendance at Audit &Supervisory Board
meetings

Attended 15 of
15 meetings

Attended 13 of
13 meetings(100%)(100%)

Attended 14 of
15 meetings

Attended 13 of
13 meetings(93.3%)(100%)

Made statements based on her abundant practical experience at companies in addition to her extensive experience, high-level expertise, and wide-ranging knowledge on financial accounting as a certified public accountant

Attended 10 of
11 meetings

Attended 9 of
9 meetings(90.9%)(100%)

Made statements based on his extensive experience, high-level expertise, andwide-ranging knowledge as a public prosecutor and attorney-at-law

Statements at meetings

Made statements based on his extensive experience, high-level expertise andwide-ranging knowledge, in particular, in the corporate legal affairs and corporate
governance field, as an attorney-at-law* Concerning Mr. Takashi Nonoue’s attendance at meetings of the Board of Directors and the Audit & Supervisory Board, the scope of the total number of
meetings includes only those meetings of the Board of Directors and the Audit & Supervisory Board held after his appointment on June 29, 2022.

marks indicate the abilities that each Director possesses, but the abilities in which each Director can demonstrate greater strength and expertise are listed
according to his or her position in the Company below. The above list is based on their positions, and does not represent all of the abilities possessed by each
Director.
Representative Director of the Board: Up to four (4) Director of the Board and Senior Executive Officer: Up to four (4)Director of the Board and Executive Officer: Up to three (3) Director of the Board (Independent Outside): Up to two (2)The Oji Group Integrated Report 2023

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70

Governance Strategy

Corporate GovernanceCompliance

Effectiveness Evaluation of the Board of Directors

The Oji Group Corporate Code of Conduct and Behavior Standard

The Fundamental Policies on Corporate Governance stipulates that the Board of Directors shall conduct analysis and evaluation of theeffectiveness of the Board of Directors every year, and take required measures to ensure the effectiveness of the Board of Directors
as a whole as well as disclose an overview of the findings. In order to evaluate the effectiveness of the Board of Directors, we conduct
a survey on the role, structure, and operation of the Board of Directors from April to May every year with all Directors and Audit &Supervisory Board Members. The evaluation findings are analyzed by the Compensation Committee, in which Independent Outside
Directors participate, and then deliberated by the Board of Directors based on the analysis results.
As a result of the analysis and evaluation of the Board of Directors of FY2022, it was confirmed our Board of Directors and its subordinate
meetings have continued to function well. To a survey question on the roles of the Board of Directors in “formulating the Group management
strategies and presenting the directions,” many stated that fervent discussions by the Board of Directors including Independent Outside
Directors on the issue from the stage of drawing up the FY2022 Medium-term Management Plan led to a clear presentation of the directions.
Regarding the operation of the Board of Directors, to a question on “supervision of the management team,” many respondents highly
evaluated the Company’s efforts to enhance the supervisory function of the Board including the enhancement of provision of information to
Outside Officers. It was also noted that the agendas should be set with better considerations to allocate more time for discussions related
to overall Group management. In response to this suggestion, the criteria for selecting the matters to be discussed at the Board of Directors
meetings were reconsidered to allow the Board to focus on deliberating more important matters. Regarding the “composition and discussionof the Board of Directors,” some commented that, while the current composition is well-balanced, discussion on future possibilities is neededof having Outside Directors as the majority of the Board or appointing an Outside Director to Chairman of the Board. In light of the evaluation
findings, we will continue to consider and take measures necessary for the Board of Directors to function better.

The Oji Group incorporated the principles on human rights, labor, the environment, and anticorruption of the United Nations Global
Compact and established the Oji Group Corporate Code of Conduct and the Oji Group Behavior Standard, action guidelines for theCode, in 2004. They were revised in FY2020 to reflect the social environment including the SDGs and the Management Philosophy,
to make them more in line with the demands of the times.
The Oji Group Corporate Code of Conduct is adopted as guiding principles for the Oji Group companies for conducting corporate
activities based on awareness of our responsibilities as a corporate citizen in international society, and on high ethical principles
appropriate for an organization that enjoys the trust of society. The Oji Group Behavior Standard is adopted toward the materializationof the spirit of the Oji Group Corporate Code of Conduct, as a standard to be followed in the daily activities of all management andemployees as a member of international society.
The alteration or abolition of the Corporate Code of Conduct and the Behavior Standard requires a resolution by the Board of
Directors. With the involvement of the Board, this Code of Conduct and the Behavior Standard have been established as the standardof activities performed by all officers and employees of the Oji Group. The Code of Conduct and the Behavior Standard have beentranslated into the respective languages of each country in which the Group has its business sites and are made known to all officers
and employees that belong to the Group. All officers and employees of the Oji Group strive to understand the Oji Group Corporate
Code of Conduct and the Oji Group Behavior Standard correctly and to practice them. If an action against them is conducted or if aviolation is suspected, it must be reported or consulted with a supervisor or the compliance office of the company or worksite, or the
Corporate Ethics Helpline (Group internal whistleblowing) desks.
The Oji Group Corporate Code of Conduct https://www.ojiholdings.co.jp/english/group/policy/conduct.html
The Oji Group Behavior Standard https://www.ojiholdings.co.jp/english/group/policy/behavior_standard.html

Procedure for the Effectiveness Evaluation of the Board of Directors
TimingProcess

April

Survey for effectiveness evaluation of the Board of Directors·Respondents: All Directors and Audit & Supervisory Board
Members·Aggregated by: Corporate Governance Division

May

June

Report from the Compensation Committee to the Board of
Directors
Discussion and approval by the Board of Directors
Implementation of measures to improve effectivenessRespondents evaluate effectiveness regarding the following nine points ona five-point scale and comment on the reasons.
Any other comments outside those nine questions may be entered freely inthe comment section.
No.

Question topics

1

Formulating the Group management strategies and presenting
the directions

2

Deliberating and examining business execution

3

Support for prompt and unwavering business execution

4

Supervision of the management team

5

Internal control and risk management

6

Composition and discussion of the Board of Directors

7Time and frequency of deliberation

8

Provision of information to participants

9

Implementation and effects of measures for the improvement of
the Board of Directors

10

Comment

Management
Philosophy

The Oji Group
Corporate Code of
Conduct

The Oji Group
Behavior Standard

Direction that the Oji Groupwill take“Creation of Innovative Value”“Contribution to Future and theWorld”“Harmony with Nature and Society”

Guidelines for Group
companies“Promotion of Corporate activities
based on high ethical principles
appropriate for an organization thatenjoys the trust of society”“Contribution to the genuine
enriched society”

Action guidelines for all
management and employeesof the Oji Group“Behavior standard to be adopted in
the daily activities in order to materialize the spirit of the Oji Group
Corporate Code of Conduct”

Governance Strategy

From
July

Analysis by the Compensation Committee

Survey Questions

Scores are totalized for all respondents and by group (inside officers,
Outside Officers, Directors, and Audit & Supervisory Board Members) andchanges from previous results are also examined.

Policy for Strategic Shareholding
The Company strategically holds shares that are expected tocontribute to the sustainable growth of its business and theimprovement of corporate value over the medium to longterm as part of its management strategies for the purposeof business alliances and strengthening and maintenance oflong-term and stable relationships with business partners. The
Board of Directors examines for each individual stock every year
whether the purpose of strategic shareholding is appropriate
and whether the benefits and risks associated with strategic
shareholding are commensurate with the capital cost to verify
the appropriateness of the holding. In order to reduce strategic
shareholding, we sell shares properly and appropriately if therationality for holding them has diminished.
In FY2022, we reduced the number of companies held forstrategic shareholding, but the balance of our holding increased
due to rising stock prices.
Please refer to the Annual Securities Report for details
concerning individual stocks held for strategic shareholding.
Securities Reports (in Japanese)71

The Oji Group Integrated Report 2023

Sharing the Code of Conduct and Behavior Standard and Providing Follow-up Sessions
Strategic Shareholding
Balance(¥ billion)

Number of companies(Companies)
130

200
150

122

121
117

100
50
0

60.7

2019

70.1

2020

68.4

2021

114
82.9

2022 (FY)

120

110

100

We have prepared a booklet and distributed it to officers andemployees to thoroughly disseminate the contents of theOji Group Corporate Code of Conduct and the Oji Group
Behavior Standard. In addition, with the revision in October
2020, we also prepared education and explanatory materials,
and translated the education materials into 12 languages foroverseas employees as a as starter, which we continue totranslate into more languages as necessary. The translationsof the education materials are distributed as part of the“Compliance News” periodically published by the Corporate
Compliance Department for Japan and overseas and used atworkplace compliance meetings at Group companies, in order
to disseminate the Oji Group Corporate Code of Conduct andthe Oji Group Behavior Standard and encourage employees topractice the Standard.

Compliance News in Languages Other Than JapaneseChineseMalay

EnglishBurmeseGermanNepali

Hindi

Portuguese

Indonesian

Thai

KoreanVietnamese

Since May 2022
Gujarati

Tamil

To be added in 2023
Italianhttps://investor.ojiholdings.co.jp/ja/ir/library/securities.html
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72

Governance Strategy

Compliance

Risk Management

Measures for Promoting Compliance

The Oji Group undertakes business activities with a strong sense of ethics set forth in the Oji Group Corporate Code of Conduct andimplements appropriate risk management practices. In response to the rapid expansion of the areas where we operate businesses,
we will reinforce our risk management structure globally to ensure business continuity and the steady development of our businesses.

The Corporate Compliance Department of Oji Holdings draws up policies and measures for promoting business ethics and compliancein the entire Group. It also formulates and reviews the Oji Group Corporate Code of Conduct and the Oji Group Behavior Standard andestablishes internal whistleblowing systems and rules on anti-corruption. In addition, at domestic and overseas Group companies,
compliance managers and compliance promotion leaders play a central role in promotion activities and work to instill business ethics
and compliance awareness throughout the Group.
Activities for Raising Compliance AwarenessAs part of daily compliance activities, compliance promotion
leaders at respective workplaces and companies organize
regular workplace compliance meetings to raise awarenessamong all employees. Many opportunities are provided by the
Corporate Compliance Department for employees to acquirenecessary knowledge including compliance training as part ofrank-based training for newly-appointed managers and new
employees as well as periodic internal training on themes thatare common to all Group companies such as the Subcontract
Act, the Antimonopoly Act, and the prevention of bribery. Also,
the “Compliance News” is issued every month to introduce current internal and external compliance topics, provide teachingmaterials in quiz format, explain the Oji Group Corporate Codeof Conduct and Oji Group Behavior Standard, and inform employees of the internal whistleblowing system.
• Participation in workplace compliance meetings at unit companies in Japan in the second half of FY2022: 97.2%

Internal Whistleblowing System
The Oji Group has operated the Corporate Ethics Helpline (illustrated in the diagram on the right) since 2004 to provide all officers
and employees (including part-time and short-term employees)
the opportunity to consult and make reports with the aim of prevention or remediation through early discovery of violations of laws
and regulations and misconduct, and has adapted its regulations
to meet the amended Whistle-Blower Protection Act in June
2022. Whistleblowing desks are established both internally (in the
Oji Holdings Corporate Compliance Department) and externally(a law firm), which receives reports via multiple channels including telephone, email, postal mail, and fax for the convenience ofwhistleblowers.
The breakdown of reports and consultations received by theinternal and external whistleblowing desks of the Corporate Ethics
Helpline in FY2022 is shown on the right. Reports or consultations
concerning “harassment” and “work environment / human relations” accounted for the majority, including consultations on miscommunication with a supervisor or coworker in the workplacein daily work. Depending on the nature of the subject matter ofreport or consultation, basically the Corporate Compliance Department staff or the compliance promotion leader of the company investigates the matter carefully from a fair standpoint andtake action to solve the problem and resolve concerns, includingreferring the matter to a lawyer or other third party.

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The Oji Group Integrated Report 2023

Under the development and supervision by the Board of Directors, the Oji Group has established Group Risk Management Regulations
and works to manage risks in the flow described below.

Risk exploration
andidentification

When identifying risks, we categorize risks associated with all tangible and intangible assets we own into
those affecting the entire Oji Group and those affecting the business execution by Group companies and divisions.

Implementation ofrisk reduction
measures andprevention measures

Responsible management and support divisions recognize each risk associated with business execution,and implement risk reduction and prevention measures.

Risk assessment

Senior management training

After revision
Group Anti-Bribery andAnti-Corruption Regulations(Providing Benefit)

Before revision
Group Anti-Bribery Regulations(and guidelines related to bribery)(and Guidelines About Providing Beneﬁt)

Submission andreporting to theBoard ofDirectors, etc.
Group-wide
sharing ofidentified risks

We screen investments and loans, such as those for new businesses, not only by examining economic aspects but also from the viewpoint of environment, social, and governance by following the Oji Group Corporate Code of Conduct, the Oji Group Behavior Standard, the Oji Group Partnership Procurement Policy, theOji Group Human Rights Policy, and other criteria. We also ensure that the Internal Audit Department andrelated departments conduct regular audits.
The Board of Directors supervises the enhancement and implementation of risk management. Management
divisions regularly report their risk management status to the Group Management Meeting, and submit andreport key issues to the Board of Directors meeting. If a new risk occurs, it will be submitted to the GroupManagement Meeting and the Board of Directors meeting.
If the risk assessment detects a risk, we share the risk information across the Oji Group to prevent the risk
from occurring again in the Group.

Group Anti-Bribery andAnti-Corruption Regulations(Receiving Benefit)(and Guidelines About Receiving Beneﬁt)

Risk Management Structure
Audit & Supervisory Board

Employment contract termination/renewal

Harassment

5 cases (3.8%)

44 cases (33.1%)

Governance Strategy

Anti-Corruption Initiatives
We established Group Anti-Bribery and Anti-Corruption Regulations and guidelines to ensure transparency of political contributions, prohibit illegal contributions or donations, and prohibit
bribery and other corrupt acts and practices. In order to establish good, wholesome relationships with business partners, in
April 2020, we established new rules and guidelines prohibiting
in principle “receipt of benefits” which may raise suspicion ofbribery in addition to preexisting rules.

In April 2023, we provided senior management training to newly
appointed officers (including corporate officers) of Oji Group
companies. The video of the training program was made available on our portal site for officers already in office to view for acertain period of time to confirm their knowledge.

Flow of Risk Management

Cooperation

Internal Audit Dept.

Auditing

Board of Directors

Reporting

Development and supervision

Key issues submission and reporting

Group Management Meeting

Reporting

Development and supervision

Working hours and breaks

Submission and reporting

10 cases (7.5%)
Employment
contract terms andworking conditions

17 cases (12.8%)

Compliance with laws
and regulations, etc.

22 cases (16.5%)

Number of reports/
consultations received
by the Helpline
in FY2022:
133 cases in total

Auditing

Corporate Governance Div.
Corporate Compliance Dept.
GeneralAffairs Dept.

Work environment /Human relations

Corporate Sustainability Div.
Corporate Sustainability Dept.

Legal
Affairs Dept.

Safety Administration Dept.

Innovation
Promotion
Div.

Group
Technology
Div.

Public Relations andInvestor Relations Dept.

35 cases (26.3%)
Sustainability Committee
Oji Management Office Human Resources Div., Financial Div.,
Corporate Planning Div., Oji Business Center, and Oji Green Resources

COMPANY Risk Management Dept.
Group companies

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74

Governance Strategy

Risk Management

We categorize major risks that may have a material effect on our financial position, etc. into three groups: risks of long-term issues,
risks associated with our management strategies, and risks arising from execution of business, and take the following measuresagainst them.

Icons to the right represent material issues(for details, see P86).

Countermeasures against Major Risks
Type of risk

Content of risk

Main countermeasures against risks

Type of risk

Content of risk

Risks of long-term issues
Climate change

Risks arising from execution of business
Risk of production bases andsupply chain in and outside
Japan being affected by natural disaster
Risk of fire, occupational accident, environmental accident
and other unexpected circumstance occurring

We have formulated a business continuity plan (BCP) for a business interruption risk
due to disasters, etc. and provide emergency education and conduct disaster drills
on a regular basis. In addition, we have established the Group Disaster Control Office
as a permanent organization, thereby establishing a system for obtaining the latest
information promptly. We also share information about the causes of and measuresagainst disasters across the Group, and work to minimize damage.
With regard to environment, we have set voluntary management values that arestricter than the environmental regulatory standards for example, thereby striving toprevent environmental accidents.
With regard to safety, we have developed safety measures and safety operation manuals for production facilities and ensure that personnel are familiarized with them. We
have also built safety and health management structures and work to prevent occupational accidents.

Risk of health damage to employees or temporary suspension of operations beingcaused by the global spreadof infection similar to COVID-19

Laws, regulations,and other rules

Risk of not being able to comply with laws and regulationsof various countries, and theirrevisions and amendments

We place adherence to compliance at the top of material management challenges inour business activities. We translated the Oji Group Corporate Code of Conduct andthe Oji Group Behavior Standard into the respective languages of overseas where we
operate to ensure that personnel not only in but also outside Japan are familiarizedwith and follow them. We also ensure that responsible divisions take initiative in providing training on relevant laws, regulations, and other rules to prevent violation ofthem.

Litigations andother actions

Risk of being a party to litigations, disputes, or other legal
proceedings in the course ofbusiness

With respect to litigations and other actions filed against us, we prevent a disputefrom occurring by discussing with business partners and clarifying terms of contract.
We also have in place a system to deal with any litigation and other actions filed
against us in collaboration with law firms.
If an event which may have a negative impact on reputation arises as a result of litigation and other actions, we promptly respond to the event, and publish appropriate
information as necessary to maintain our reputation.

Product liability

Risk of damages based on
product liability being claimed

We provide safe and secure products by establishing the Group Quality Control Regulations, building a quality control system, and implementing quality design and manufacturing in compliance with relevant laws and regulations and in accordance withvoluntary management values.
We work to prevent risks associated with product liability from occurring by establishing the Group Product Safety Management Regulations, and ensuring the department in charge of overseeing quality management across the Group provide assistance in and conduct audit on the safety product management implemented byquality management divisions of Group companies.

Exchange rate
fluctuations

Risk of fluctuations in exchange rates in product sales,
raw material purchases andother transactions using various currencies

We monitor currency movements and impact of them on our results from time totime, and hedge risks using derivatives such as exchange forward contracts, currency option trading and currency swaps transactions, as necessary.
In Japan, we hedge a certain portion of exchange rate fluctuation risks by borrowing
and lending operating receivables denominated in foreign currency and operating
payables denominated in foreign currency within Group companies.

Information
leakage

Risk of confidential information
being leaked due to willful
conduct including external cyberattacks or negligence

In the Group Information System Usage and Risk Management Regulations, we clarify the risk management operation system and organization and their roles and comprehensively set out matters to be complied with by information system users, thereby managing risks across the Group.
With stricter rules on the system usage applying to highly confidential information, we
take measures to prevent unauthorized access, data theft, spoofing email, and thelike.

We have the Group Risk Management Regulations in place, and in the event of a serious incident to be addressed by the overall Group, we establish the Group emergency headquarters to confirm the safety of employees and check the damage suffered.
We work to minimize the effect on our business activities by continuously reviewing abusiness continuity plan (BCP), and promoting digital transformation (DX) in manufacturing, marketing, administrative processing, and other activities.

Risks associated with our management strategies
Facing a shrinking market, we restructure domestic business production systems
and pursue rationalization such as through business collaboration with other companies in our industry. We also strive to secure cash flow through thorough cost reduction and efficient CAPEX. We expand portfolio by investing the cash thus obtained indomestic businesses where growth in demand is expected, and overseas markets
where economic development is expected, and allocating it for the development of
new material products, etc.
In order to enhance our medium- and long-term corporate value and achieve a sustainable development, we work to promote working style reforms and diversity to ensue active participation of various human resources.

Structural changes in demandarising fromdevelopment ofinnovation

Risk of structural changes indemand arising primarily fromchanges in people’s lifestyles
and companies’ efforts for
digital transformation

Fluctuations indemandRisk of decline in demand for
products arising from domestic business fluctuations and acontinuing decline in population

We work to strengthen our business foundation that can tolerate market fluctuations
through thorough cost reduction, etc.
In the field of industrial materials, we work to differentiate us from other companies bypromoting total packaging and strengthening product development capabilities with
the integrated material and processing management, thereby curbing the effects onsales and securing cost competitiveness in case of any demand fluctuation.
In other business fields, as well, we work on the development of new products suchas paper products that support the shift to plastic-free materials and functional paperwith new properties in order to improve profitability.

Fluctuations in
global market
conditions

Risk associated with procurement prices of raw materials
and fuels which are influenced
mainly by fluctuations in demand, countries’ changes totheir trade policies, and wars
Risk of sales prices of pulp
being influenced by global
market prices

We have established a department in charge of the Group-wide procurement strategy in order to monitor markets in relation to the procurement of raw materials and fuels and strive to maintain a variety of suppliers, and promote advantageous procurement.
We have the Oji Group Partnership Procurement Policy in place and confirm with allof our suppliers on safety and legality of raw materials. We work to ensure stableprocurement through more environmentally- and socially-friendly procurement practices and enhanced relationship with suppliers.
In terms of procurement of recovered paper, we strive to maintain recovered paper
recycling systems. We also strengthen coordination with relevant companies with theaim of ensuring stable recovered paper procurement.

Overseasbusiness

Risk of war, political or social
instability, decelerating economic growth, revisions tolaws, regulations, and tax systems, destabilizing financial
conditions, human rights issues, etc. taking place inoverseas markets where theGroup operates

We have established regional headquarters that specializes in gathering informationon the political, economic, and social conditions of neighboring countries to prepare
for and respond to all relevant risks before they emerge. We also diversify risks byhaving operations in a wide range of countries.
To reduce risks, we enhance our ability to collect information and reduce the amountof investments through joint ventures operated with local leading companies.
With regard to human rights issues, we ensure that personnel are familiarized with
the Oji Group Human Rights Policy we established, and implement initiatives aimed
at ensuring respect for human rights.

Securities Reports (in Japanese)75

The Oji Group Integrated Report 2023

Governance Strategy

Occurrence ofdisasters, etc.
The Task Force on Climate-related Financial Disclosures (TCFD), see P29-30

Pandemic

Main countermeasures against risks

https://investor.ojiholdings.co.jp/ja/ir/library/securities.html
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76

Governance Strategy

Independent Outside Directors’ Roundtable Discussion

Risk Management

Leveraging Non-financial Resources of High Quality
to Achieve Medium- to Long-term Growth

Measures for Information Security
The Oji Group positions information obtained through its
business activities as important assets. We have established aGroup-wide information security promotion system to respondto the ever-sophisticating IT environment, and to prepare forcyber threats such as information leak, unauthorized access,and sophisticating ransomware as well as for natural disasters.
Oji Business Center Co.,Ltd, as a department that oversees our
information system risk management, inspects the information
system risks across the Group, and maintains, manages andworks to improve the Group’s IT security. Within the Company,a dedicated team for cyber incident response has also beenorganized. Keeping abreast of the latest risk trends, it provides
support in the event of an incident, plans and proposesorganized response measures, conducts educational activities
and provides information through internal newsletters, andconducts regular drills against targeted email attacks.
Recently, we are reviewing our regulations to respond to
the increased use of cloud services, changes in work styles
including the spread of remote work, and the amendment of the
Act on the Protection of Personal Information. We will continue
to work to ensure these measures are implemented and tostrengthen our information security to counter increasingly
sophisticated cybercrimes.

Information Security Structural Diagram

Group Management Meeting
ReportingOverseeing department
Oji Business Center
Requestandreporting

Promotion Managers Meeting

GuidanceandsupportPromotion teams
Group companies

The Oji Group’s BCP*1 BCP is an abbreviation for Business Continuity Plan, for emergencies such as disasters and pandemics.
*2 BCM is an abbreviation for Business Continuity Management, which means comprehensive and integrated management for business continuity including
formulation of a business continuity plan and its continuous improvement, i.e., introduction, operation, and review.

We have established the Group Disaster Control Office as a permanent organization to prepare for
Building a Group disaster
control system

disasters such as fire, earthquake, storm, and flood. We have formulated rules on the reporting ofdisaster and accident information, establishing a system enabling us to obtain the latest information
promptly. We also share information on disasters that occurred within the Group promptly to workon recurrence prevention measures.

By holding a regular Disaster Prevention Committee and conducting a large-scale safety confirmaEnhancing disaster con-tion drill using a safety confirmation system and disaster prevention drill at each workplace, we

trol measures

work to raise employees’ awareness of disaster prevention and strengthen disaster prevention
measures.

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Sachiko Ai

Seiko Nagai

Hiromichi Ogawa

Michihiro Nara was appointed
as a Director at Oji Holdings inJune 2014. As an attorneyat-law, he has high-level expertise and experience in civil
and commercial affairs. He isserving concurrently as an
outside director at other companies as well.

Sachiko Ai was appointed asa Director at Oji Holdings inJune 2020. Having worked
for many years at a major
trust bank, her wide-ranging
business experience also includes corporate sales andconsulting as well as corporate planning and auditing.

Seiko Nagai was appointed
as a Director at Oji Holdings inJune 2021. After working as amanager at a major airline
company, she took up a university position. As a professor in a foreign language department, she is involved in
education and research.

Hiromichi Ogawa was appointed as a Director at Oji Holdingsin June 2022. He has abundant
experience as a corporate
manager in the retail industry
and for a food company. Of
particular note, his accomplishments include strengthening
governance structures.

Evaluation of the First Year of the
FY2022–2024 Medium-term Management Plan and Issues
A year of decisive selection and concentration (Nara)
Nara In FY2022, the first year of the Medium-term Management Plan, I believe that management decisions on selection and concentration were made more decisively thanever. I assess that proactive decisions have been made onpractical investments toward the future. I believe that thishas become an effective approach when we consider medium- to long-term growth.
Nagai I have the impression that forums such as theManagement Meetings and the Board of Directors havebeen active in discussing whether the business should
be divested or invested in, with proper decision-making
indicators presented.
Ai Discussions were also held in fields close to the sales
frontlines. In particular, due to the soaring fuel costs andlogistic costs, I imagine that the sales divisions struggledwith passing those cost increases onto our prices, butfrom its supervisory position, the Board of Directors discussed how sufficient sales volumes could be secured

and where to focus our targets from the perspective ofprocess confirmation.
Ogawa After I was appointed as an Independent Outside
Director in June of last year, my first project was the acquisition of Adampak Group, the high-performance label printing and converting business, which was the most pivotal
matter of the whole year. The Group Management Meetings, advance briefings for the Outside Officers, and theBoard of Directors gave me the impression that thoroughdiscussions were taking place on the matter.
Nara In terms of selection and concentration, we cansay that we are now properly verifying each decision after
it has been made.
In that respect, there have been changes across theboard in company-wide approaches to investment, in themethods for presenting proposals to the Board of Directors, and in the preparation of briefing materials that will
form the premise of decisions. I am impressed that sucha large company has been able to make such a majortransformation in a few short years.
Ai I feel the same way. When we voice opinions in theOutside Officer briefings, those opinions will have been
compiled and circulated among the other officers by thetime of the Board of Directors meeting. The speed of thisprocess has increased. I feel that the discussions in thebriefings are now being reflected immediately in the

The Oji Group Integrated Report 2023

Governance Strategy

At the Oji Group, we have formulated a BCP*1 for each COMPANY to respond to an emergency when a risk associated with businessexecution arises, which we review as necessary as part of our BCM*2.
In the event of a serious incident to be addressed by the overall Group, we establish the Group Emergency Headquarters to confirm
the safety of employees, check the damage suffered, and take prompt measures to continue supplying products to our customers.

Michihiro Nara78

Governance Strategy

Independent Outside Directors’ Roundtable Discussion

Board of Directors. I sense a keenness to incorporate
opinions and make changes.
Ogawa In FY2022, while there were no avoiding impacts of external circumstances such as the supply chain
disruptions, exchange rate fluctuations, and soaring fueland raw materials prices, it was a year of working out
how to minimize the impacts of those circumstances. In
the monthly briefing materials for the Board of Directors,
resources market prices and costs were presented, andprice revisions and issues were properly explained, so I
could see that the people on the frontlines made great
efforts. Thanks to thorough self-help efforts, the efficiencyof raw materials procurement, production, and sales has
improved, so I believe we can expect to see the fruits of
those efforts in 2023 and beyond.
Nagai In initiatives for environmental issues, which is oneof the pillars of the Medium-term Management Plan, I
commend the sustainability surveys of main suppliers
that began in FY2020, the 100% traceability of suppliers
under the Wood Raw Material Procurement Guidelines,
and the improvements made in effective waste utilization
ratios. In my conversations with internal officers and discussions in the Board of Directors and other meetings, I

Evolve the Board of Directors from a forum forbriefings to one for deeper discussions (Ogawa)Nagai I feel the same way. I think that there are several
different ways in which such discussions could be given
more depth, such as narrowing down the topics discussed in the Board of Directors, cutting back on explanations to concentrate more on discussions, or setting
up other opportunities such as offsite meetings.
Ogawa I feel the same way in respect of enhancing
strategic discussions. The Board of Directors Rules havebeen revised in 2023, so I hope we can delve deeper into
key proposals and deepen our strategic discussions.
One other important point is how to maintain a senseof speed in risk management. From the perspective of
BCP as well, the question is how quickly risks such aschanges in the business environment, labor safety management, and compliance can be detected and how
swiftly we can respond to them. Company rules are inplace, so I believe that there is a call on the Board of Directors for governance that ensures thorough penetrationand implementation of those rules.

Ai Human capital management is attracting attention. The
Company is making steady progress in such areas as human resources education, working style reforms, health andproductivity management, and inclusion and diversity. On theother hand, it needs to keep evolving, without standing still in
its current state. For example, Oji has a target of raising thepercentage of female managers to 5.5% by the end of
March 2025, but how will this be addressed across the entire company? Also, when viewed globally, what shape themanagement structure of employees of nationalities otherthan Japanese, who make up about 5 0% of the Group’s
workforce, should be is also a key issue from the perspectiveof inclusion and diversity.
Nara We may talk simply about human capital management, but what is needed, I believe, is a change in awareness at the top management level from the perspectiveof how to view our human resources as capital and makebest use of them. It is not the same as investment ingoods and money.
Nagai The weak concept of “human capital” is an issue
faced by many companies in Japan. Quite the opposite,
human resources have been viewed as “human costs.”
To secure human resources amid a declining birth rate,
the concept of investing in people will be essential.
Ogawa Personnel is the very meaning of management
strategy. The ideal is the deployment of human resources
to suit the Company’s strategies. To expand our global
strategy, we need to develop Japanese human resources
who are capable of managing overseas businesses, and I
also think it will be important to develop and promote local managers at our overseas sites.
Nagai Last year, for the first time, an initiative was conducted in which individual employees could apply fortransfers of their own volition. I heard that the number ofapplicants was greater than envisaged. This means thatthe awareness of individual employees has been changing significantly even before any change in the Company’s awareness. Policies that allow individuals to think forthemselves and be proactive are extremely important as
a way of demonstrating to everyone in the Company thatOji is not afraid of change.
Ai It is also a good trend from the perspective of well-being. From the viewpoint of innovation as well, having
many people who act with initiative will mean a greater
abundance of ideas.

The Oji Group Integrated Report 2023

Governance Strategy

The Oji Group Integrated Report 2023

Shifting thinking from human costs to humancapital (Nagai)

Effectiveness Evaluation of theBoard of Directors and Issues

Nara Nine years have passed since I was first appointed
as an Independent Outside Director. In these nine years, I
feel that discussions in the Outside Officer briefings havebecome much more active. Matters discussed in thosebriefings are immediately compiled and shared with all officers, and also Chairman Kaku presents their contents to
the Board of Directors.
President Isono also sets up opportunities for exchanges of views with the Outside Officers, and we havebeen able to exchange opinions about the Medium-termManagement Plan. I see this as a major turnaround in the
consciousness of the management team.
Ogawa In the year since I was appointed, I have the impression that the Company has been complete with asense of history and reality in its design and operation of
the various systems. We have briefings for Outside Officers, we are able to attend Group Management Meetings
as observers, and we are given opportunities to tour
frontline facilities both in Japan and overseas. In that respect, even amid the limited volume of information available, I have a strong sense of the Company’s willingness
to disclose information to us.
Ai If I were to point out one issue, I feel that there needs
to be deeper discussions about larger topics from longterm perspectives, such as how to develop global humanresources, and what should be done about the directionof governance in a group that includes more than 300
subsidiaries and affiliates, including overseas.

79

Human Capital Management

have sensed the efforts being made to achieve company-wide unity of intentions toward green innovation,
thanks to the establishment of the Purpose.
Nara In sustainability initiatives, Oji has created advantageous circumstances. Oji has declared “Harmony with
Nature and Society” in its Management Philosophy. Oji
makes more effective use of its large-scale forest resources, and , in the eyes of its stakeholders, it is now acompany in harmony with society as this declaration suggests.
Ai Forest resources are not only resources for the promotion of sustainability. They are also being used in cellulose
nanofibers, plastic-free products, and plastic-reduced
products. I hope to see Oji actively promote its forest resources.

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Governance Strategy

Independent Outside Directors’ Roundtable Discussion

ployees but also our stakeholders, I believe that theGroup will move forward in one direction.
Ai The Oji Group marked the 150th anniversary of its
foundation this year. It will now take on the challenge of its
next 150 years. As stated in our Purpose, we will continue
in our challenge of bringing this world a brighter future
filled with hope. While we are in times of an unpredictable
future, we will seek to go “Beyond the Boundaries.”
Ogawa The high quality of its non-financial information
will also become an engine for the growth of the Oji
Group.
Further, it is demonstrating its comprehensive capabilities while maintaining a good balance between offense
and defense toward the achievement of the Long-term
Vision. Because the Oji Group has such as wide range ofbusinesses, it has established ample defensive structures
against risks. On the other hand, it is also taking offensive
moves toward product development in new areas andtoward sustainability. I believe that this corporate cultureof controlling the balance between offense and defense
is what will lead to its next evolution.

Take challenges that lead us “Beyond theBoundaries” (Ai)Nara We are now in an era that has moved from shareholder capitalism to stakeholder capitalism. Through its
corporate activities, the Oji Group will contribute to shareholders, business partners, employees, and beyond to
the global environment. To that end, we will need to place
efforts into research and development, including new
businesses. For that reason as well, I would like to askthat our stakeholders watch over our growth with a longterm view.
Nagai Two years have passed since I was appointed asan Independent Outside Director. In that time, seeing theGroup’s business sites in Japan and overseas, one thingthat I have realized is that the people working there havea strong spirit that they are working for a company thatgrows forests and utilizes forests. If we can share thatrecognition that the Oji Group is a company that grows
forests and utilizes forests together with not only our em-

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The Oji Group Integrated Report 2023

Audit & Supervisory Board Members as
Monitors and Preventers of Risks
Independent Outside Audit & Supervisory Board Member

Noriko Sekiguchi
Auditing Required for Global Business Expansion
The Oji Group is a global corporation that provides products to countries and regions all over the world under the Management
Philosophy of “Contribution to the Future and the World.” Having declared the “expansion and enhancement of overseas businesses”
in the Long-term Vision, the Group is eying challenges in new areas and the acquisition of overseas businesses. This includes increasing
sales through strategic investments and M&As, with a 2030 target of net sales of over 2.5 trillion yen. In the governance of the overseas
businesses development, the Group will need to consider the risks unique to new businesses, as well as the risks of not being able
to fully grasp the actual businesses situation due to physical distance from Japan and differences in business customs, laws andregulations, and culture. While doing so, it will need to continue with personnel exchanges and monitoring based on the assumptionof these risks. Prompt and appropriate decision making in the management of overseas business companies should be afforded
maximum respect, but on the other hand, in terms of Group governance, we need to consider achieving greater transparency of thedecision-making process and strengthening the second line at each COMPANY in tandem. In recent years, temporary restrictions on
personnel exchanges due to the global spread of COVID-19 have made monitoring from Japan more difficult. Regarding auditing by the
Audit & Supervisory Board Members, in addition to the auditing of business execution at each individual COMPANY through monitoring,
we have returned to conventional on-site audits in FY2023. I believe that the essence of auditing is “to see the real place, the realdata, and the real products, and to listen to people’s voices” from two perspectives: the auditing of the overseas business companies
themselves and auditing of the overseas businesses by each COMPANY from management and administrative angles. Taking into
account the temporary monitoring difficulties due to travel restrictions, I believe that we need to reaffirm the proper development andoperation of internal controls through collaboration with the Internal Audit Department.
With an eye on future expansion of overseas businesses, I would like to make recommendations for audit systems that are moresuited to the Oji Group, while strengthening coordination among the three types of audits: audits by the accounting auditor, the Internal
Audit Department, and the Audit & Supervisory Board Members.

Auditing of Safety, Environment, and Compliance
The Oji Group has developed structures for the management of occupational safety, and, in addition to clarifying the responsibility
framework, it is managing and implementing the Group Safety and Health Management Rules properly. In terms of awareness raising
initiatives, the Oji Group conducts activities to raise awareness of safety, environment, and compliance by publishing ComplianceNews, which is rich in creative ingenuity, in multiple languages and disseminating it to all employees of the Group.
In the audits by the Audit & Supervisory Board Members as well, in addition to on-site visits, we check the development statusof the structures for safety and health management and environmental management. Looking at the occupational accident reports,
however, I sense that a disregard for the rules, such as failure to wear safety belts in places where they are compulsory, may beleading to accidents. Occupational safety is at the core of corporate activities and is a top priority. The horizontal sharing of recurrence
prevention measures across the Oji Group is being done with a sense of speed, but from the perspective of day-to-day safetymeasures, I would like to see the incorporation of superior systems, such as accident prevention systems that use digital technology.
I also hope that upper management at the manufacturing sites will adopt a greater intensity and attentiveness in calling more strongly
for compliance with basic rules.

Governance Strategy

Messages for Stakeholders

Message from an Independent Outside
Audit & Supervisory Board Member

My Hopes for the Oji Group and My Mission as an Audit & Supervisory Board Member
As Key Audit Matters (KAMs) in the FY2022 consolidated financial statements of Oji Holdings, the accounting auditor listed thereasonableness of the estimates related to impairment loss tests of non-current assets in the household base paper business of
Jiangsu Oji Paper and the accounting impacts of the cyclone at Pan Pac, and listed the valuation of stocks of subsidiaries and affiliates
as a KAM in the non-consolidated financial statements. The listing of KAMs in the Audit Report will deepen the understanding of us,
the Audit & Supervisory Board Members, of the audits conducted by the accounting auditor and enhance our discussions with theaccounting auditor and executive management. I believe that this will lead to the strengthening of corporate governance.
The Oji Group celebrated its 150th anniversary in 2023. I believe that the corporate value of the Oji Group lies in the trust of its
stakeholders, which is earned not only by its contributions to people’s lives through its products, but also by realizing a sustainable
society through the circulation of its forest resources. Currently, among the matters presented to the Board of Directors, in addition
to financial information such as investment effectiveness, we also have proper discussions about non-financial information, such asenvironmental matters. Reflecting the fact that the spirit of “Harmony with Nature and Society” that has been nurtured across thedifferent eras is the foundation of the Oji Group’s business, I will fulfill my mission as an Independent Outside Audit & Supervisory Board
Member so that it may continue to be a company that is trusted by its stakeholders.

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Sustainability Strategy

Sustainable Business Model

Sustainable Business Model “Resource Circulation throughout the Value Chain”
Paper manufacturing, which is the foundation of the Oji Group, is supported by three types of recycling: “forest recycling” to practice sustainable
forest management, “water recycling” to tackle the reduction of water intake and purification of wastewater and “paper recycling” to recycle
recovered paper. We are working to deploy this sustainable business model globally and enable our businesses to contribute to building asustainable society.

Cascading use of forest resources

Procurement

Lumberproduction

Timberoffcuts

Sustainable
forest resources

Woodchips

Manufacturing

Manufacturing

Sales

Pulp

Paper, paperboard,
new materials(Consumption)

Fuel
Sawmill residue

Black liquor

Unused trees

Waste

Biomass power generation(Renewable energy)

Water

Forestrecycling

recycling(Circular use of resources)(Sustainable forest management)

Wood pulp

Pulp
manufacturing

Recycled pulp

Used
paper
recoveryWater
treatment
business

Paper

recycling

Sales,(Circular use of resources)
management,
logistics

Harmony with nature andsociety

About 60% of the raw material of thepaper is recovered paper and about 40%
is wood. We are working on the promotionof use of recovered paper by collecting andutilizing various types of recovered paper
while maintaining its recycling system.

Cellulose

Hemicellulose

Various wood-derived
materials
Wood-derived biomass plastics
Cellulose nanofiber (CNF)
Sulfated hemicellulose, etc.

The Oji Group Integrated Report 2023

Net-zero carbon

Sustainability Strategy

Paper and pulp manufacturing requires alarge amount of water. We reduce water
intake by treating used water and reusing
it in the manufacturing process. We also
work on purification of wastewater andreduction of environment impact.

Development of new materials
derived from wood

83

Environmental
Vision 2050

Consumption

CO2 absorption
and fixation by
forests
Under the concept of “those who use trees
have the responsibility to plant trees,” we areworking on sustainable forest managementby planting, cultivating, and utilizing trees
and planting them again while giving due
consideration to the local ecosystem in Japanand overseas to create abundant forests.

Products

Aiming for Further Development of the Sustainable Business Model
Toward the realization of a decarbonized society, renewable forest resources havegathered significant attention. Alongside the conventional use of wood resources as raw
materials for paper manufacturing, the Oji Group is accelerating their use in fields outsideof papermaking. Specifically, we are expanding our biomass power generation business,
which utilizes wood chips as a primary fuel, across Japan. We are proactively making useof unused trees such as forest residues, for which few applications had previously beendeveloped. In addition, we are accelerating green innovations for the future, including
developing wood-derived biomass plastics, promising replacements for petroleumderived plastics, cellulose nanofiber (CNF), and wood-derived pharmaceutical products.

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Sustainability Strategy

Core Competencies and Material Issues

Material Issues
The Oji Group has continuously been working on enhancing corporate value in the medium- and long-term by accurately responding
to ever-changing social trends and addressing the needs of customers and society. To develop the sustainable business model that
forms the basis of these efforts, material issues were identified in the following processes in 2019.
Furthermore, in response to the increasing demand for disclosure of non-financial information and developments in the internalsituation such as the formulation of Purpose, Long-term Vision, and Medium-term Management Plan, we reviewed our material issues
in 2023 to identify new definitions and components, and revised KPIs for human capital enhancement.
Process for Identifying Material Issues
Step 1

Identification of corecompetencies
Step 2Extraction of possible
issuesStep 3

Assessment andanalysisCore Competencies
The Oji Group possesses Oji Forests spanning 603,000 ha domestically and overseas. As the Group engages in a cycle of cultivating forest
resources, utilizing them, and cultivating them again, we are developing a wide range of businesses without regard for business domain.
With these forest resources as our core competencies, we will aim to develop business and contribute to realizing a sustainable society.

Sustainable Forest Management
Giving due consideration to environmental conservation, the Group possesses production forests primarily for producing wood spanninga total of 455,000 ha, with 176,000 ha domestically and 279,000 ha overseas, as well as conservation forests spanning 148,000
ha, with 12,000 ha domestically and 136,000 ha overseas. Implementing sustainable forest management, which is environmentally,socially, and economically conscious, is ingrained in our businesses.

Validity assessment andapproval

Global Network and Sales
We are proactively developing our businesses on a global level, including our packaging business, which engages in the integrated
manufacturing of folding cartons and corrugated containers from base paper; as well as our household paper, thermal paper, pulp,
and other businesses. We are expanding our businesses in response to continuously growing overseas market needs.

Category

The Oji Group Integrated Report 2023

We verified the validity of the identified material issues and obtained approval at the Management
Meeting. The necessity of reviewing material issues is discussed at the Sustainability Committee
every year as we need to consider such issues as changes in the social environment and newly
emerged issues.

E

Material Issues

S
SocialDefinitions

Mitigation and adaptation
to climate change

Contribute to mitigation of climate change by reducing GHG emissions throughout the supply
chain and promoting CO2 absorption and fixation by forests.

Sustainable forest
management andbiodiversity conservation

In the forests we own and manage, practice sustainable forest management in harmony withthe environment and local communities, utilize forest resources, and achieve the multi-functionality of forests, including biodiversity conservation.

circular use of resources

To prevent resource depletion, promote the effective use of paper and water, which we viewas valuable reusable resources.

Reduction ofenvironmental burdens

Promote waste reduction and purification of wastewater and exhaust gases in the manufacturing process to minimize environmental impact on surrounding areas.

Respect for human rights

Do not tolerate human rights violations in any of our business activities.

Enhancing human capital

Secure and foster diverse human resources (human capital) necessary for sustainablegrowth. Establish an environment in which every employee can fully demonstrate their potential and work comfortably.

Environmental

Ensuring workplace safety
Ensure the safety and health of all employees and relevant persons.
and healthG
Governance85

We assessed each issue based on both social importance and business importance. The issues
were narrowed down and sorted out in reference to opinions from external organizations.

Material Issues and Definitions

Development of New Materials Derived from Wood
Aiming to create new value, we are developing new materials, including cellulose nanofiber (CNF), a promising material for numerous
fields; wood-derived biomass plastics; and wood-derived pharmaceutical products using hemicellulose.
Application of Fundamental Paper Manufacturing Technologies
Utilizing the fundamental technologies we have cultivated in our paper manufacturing business, we aim to expand our businesses
in various fields which will help reduce our environmental impact. This includes developing our renewable energy business with afocus on hydroelectric power generation and wood biomass power generation, industrial water production, and industrial wastewater
treatment businesses.

We extracted issues comprehensively from SDGs, global risks, the assessment made by ESG assessment organizations, important matters recognized by the Group, our goals and dialogue withstakeholders.

Sustainability Strategy

Utilization of Renewable Resources
We promote recovered paper recycling. The recovered paper makes up about 60% the raw material of the paper. We also thoroughly
circulate and reuse the water that is essential to paper manufacturing in our production processes, and create systems for reducing
the amount of water used and purifying wastewater in a sophisticated manner.

Step 4

We identified five core competencies to support our business development centered on forest resources.

Responsible raw materials In the supply chain for procurement of all raw materials, pay close attention to environmental
procurement
and social issues, including human rights, and address them responsibly.
Supply of safe and secure
products

Supply safe and secure products worldwide.

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Sustainability Strategy

Material Issues and KPI

Category

Material issues

Mitigation andadaptation toclimate changeE
Environmental

Properly manage and conserve forests
Utilize forest resources
Promote conservation of biodiversity andecosystem
Build relationships with local communities

circular use ofresources

Promote utilization of recovered paper
Reduce water risks(promote water recycling, etc.)

Respect forhuman rights

SocialReduce GHG emissions(Scope 1, Scope 2)
Absorb and fix CO2 by forests
Reduce GHG emissions throughcollaboration with suppliers(Scope 3, etc.)
Increase the usage of renewableenergyImprove energy efficiency

Sustainable forest
management andbiodiversity
conservation

Reduction ofenvironmental
burdens

S

Components

Enhancing humancapitalEffective waste utilization
Purify wastewater
Purify exhaust gases

Consider human rights in all businessactivities
Consider human rights in the workplace

Improve work-life management
Enhance employees’ skills
Inclusion & diversity
Foster greater compliance awarenessPromote well-being of employees
Prevent occupational accidents

Responsible raw
materials
procurement

Environmental consideration in the
supply chain
Human rights consideration in the
supply chain
Compliance with laws and social
standards and fair trade

Supply of safe andsecure products

Stably supply products
Ensure product quality

G

Current value*1(Unless otherwise specified, for FY2030)

Reduce GHG emissions by at least 70%
compared to FY2018 (Scope 1, Scope 2)
GHG emissions reduction : 20%
Net increment in carbon stocks by forests : 50%
The actual carbon stocks in living biomass*2
expanded to at least 170,000 kt-CO2 (calculated value)

4.7%
11.8%
122,450 kt-CO2
54.7%

Improve energy consumption intensity by atleast 1% per year for the 5-year average

3.8% reduction(from FY2018 to FY2022)

Increase the rate of overseas forest certificationacquisition*3 (maintain the domestic rate at 100%)

Japan 100%, Overseas 94%

Expand overseas forest plantations to 400,000 ha

279,000 ha(Conservation forests 136,000 ha)

Recovered paper utilization ratio*4(Japan) : At least 70%

68.0%

Reduction of water intake intensity by at least
6% compared to FY2018

12.9% reduction

Improve effective waste utilization ratios*5
Japan at least 99%, Overseas at least 95%

Japan 99.4%, Overseas 83.4%

Reduce emission intensity for substances of environmental
concern in wastewater by 15% from FY2018

BOD: 35.1% reduction, COD : 10.0%
reduction, SS: 24.0% reduction

Reduce SOx emissions intensity in exhaustgases by 15% from FY2018

15.4% reduction

Percentage of target people who get educationand training in human rights :
100%

95.6%
(2,566 participants fromJanuary to July 2023)

Total working hours: less than 1,850 hours(26 companies in the Main Office region in Japan)

1,830 hours

Percentage of male employees taking childcare
leave, etc.: 100% (16 companies in Japan*6 )98.8%

Percentage of female managers: at least 5.5%
(16companies in Japan*6, at the end of March 2025)

3.6%

Percentage of female new graduates hired forgeneralist-track positions*7: at least 30%

37.7% (Joined the company on
April 1, 2023)

Employment rate of people with disabilities :at least
2.3% (81 companies in Japan*6, June 2023)

Six applicable Group companies inJapan*6 : 2.51%, 81 companies inJapan*6 : 2.20% (June 2023)

Participation in compliance meetings : 100%
(Oji Holdings and all subsidiaries in Japan)

97.2% (Second half of FY2022)

Achieve zero fatal and serious work-related
accidents*8 (each fiscal year)

Three accidents (from January
1 to December 31, 2022)

Lost time injury frequency rate*6:
50% reduction compared to FY2018 (0.89)

1.11 (from January 1 to
December 31, 2022)

Conduct sustainability surveys on all main
suppliers*9

100% (Survey period :FY2020–FY2022. Follow-up
surveys to be conducted later.)
100%

GovernanceZero product liability accidents (each fiscal year)

Zero accidents*1 Aggregation period : Unless otherwise specified, from April 2022 to March 2023 or as of March 31, 2023. Boundary of data aggregation: Unless otherwise specified, Japanese and overseas consolidated companies*2 The actual carbon stocks in living biomass (CO2 tons)
Production forest : Actual merchantable volume at the end of each fiscal year x Biomass expansion coefficient x (1 + underground / above-ground ratio) x Wood density x Carbon ratio x CO2 conversion coefficient
Conservation forest : Remaining area at the end of each fiscal year x above-ground biomass of natural forest x (1 + underground / above-ground ratio) x carbon ratio x CO2 conversion coefficient*3 Forest certification acquisition rate : [Overseas] Area ratio in company-owned production forests, [Japan] Area ratio in company-owned forests excluding shared forests

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The Oji Group Integrated Report 2023

Value provided to society

Corresponding SDGs

Reference

16.5% reduction

Renewable energy usage rate of at least 60%
through reduction of coal consumption

Achieve full traceability based on the Wood Raw
Material Procurement Guidelines

Major initiatives

Reduce GHG emissions through improving production efficiency, savingenergy, and utilizing renewable fuel and waste fuelAbsorb and fix CO2 through sustainable forest management
Expanded use of non-fossil fuels and biomass fuels as alternatives tofossil fuelDevelop biomass power generation business
Develop eco-friendly products

Mitigation of climate change
Increase in the usage of renewable energy
Improve in energy efficiency
Enhancement of eco-friendly technologies

Forest management based on the “Sustainable Forest Management
Policy”
Maintain and expand the multi-functions of forests
Sustainable forest management such as promotion of forest plantationand conservation of company-owned forests

Conservation of biodiversity and ecosystem
Job creation
Employment, education, and medical support

Paper recycling (improve the recovered paper utilization ratio)
Reduce water intake and improve water recycling
Expand the water treatment business overseas

Mitigation of climate change
Reduction of waste
Contribution to the solution of the water shortage
issue
Safe water supply

Reduce and effectively use waste
Develop eco-friendly products and biodegradable materials
Set voluntary management values that are stricter than the environmental
regulatory standards
Purify wastewater and save emissions of chemical substances in exhaust
gases

Safety and health
Reduction of air and water pollution

P25-307.2,7.3
7.a

9.4,9.5

12.2

13.1,13.2
13.3

6.6

8.7

14.2

15.1,15.2
15.3,15.4
15.5,15.c

6.4,6.5

12.4,12.5
12.6

14.1

15.1,15.2
15.3,15.4
15.5,15.c

3.9

6.1,6.3,6.4

11.6

14.1,14.2
14.3

8.5,8.7
8.8

10.2,10.3
10.4

P31-34

P89-92P89

17.7,17.8

Formulate and implement the Oji Group Corporate Code of Conduct, theOji Group Behavior Standard, and the Oji Group Human Rights Policy
Perform internal audits and implement the whistleblowing system
Raise awareness of compliance and human rights through in-housetraining
Assess risks associated with suppliers’ respect for human rights
Implement human rights due diligence

Respect for human rights

Implement human resource strategies and develop human resources
Promote working style reforms
Promote diversity

Active participation of diverse human resources
Realization of innovation
Improvement in productivity

P93~94
5.1,5.4
5.5,5.c

P95-98
5.1,5.4
5.5,5.c

8.2,8.5
8.8

10.2,10.3

Sustainability Strategy

Ensuring workplace safety andhealthKey performance indicators (KPIs)

Establish safety and health management structures and promote activities
aimed for safety and healthThoroughly ensure safety in the handling of machines and equipment and in other operations
Promote safety education (introduce VR risk experience education, etc.)
Promote physical and mental well-being of employees
Create comfortable work environments
Respond to infectious diseases including COVID-19

Safety and health

Promote CSR procurement, taking into consideration the environment andsociety following the Oji Group Partnership Procurement Policy and the
Wood Raw Material Procurement Guidelines

Forms of responsible production and consumption
Protection of the rights of workers and reduction ofenvironmental impact throughout the entire
supply chain

8.7

12.1,12.4
12.6

15.1,15.2

Stably supply own products
Ensure safe quality design and management in compliance with relevantlaws and regulations and stricter voluntary management values
Provide customers with information on safety of raw materials(chemicals, materials)
Supply of FSCTM certified products (FSCTM C014119, etc.)

Supply of safe and secure products
Reduction of environmental burdens
Dissemination of eco-friendly technologies todeveloping countries

9.4,9.b

12.4,12.6

17.7

P99-100
8.8

P101-102P102*4 Recovered paper utilization ratio = Volume of recovered paper consumed ÷ Total volume of fiber raw materials consumed (total consumption of recovered paper, wood pulp, and other fiber raw materials)*5 Effective waste utilization ratio = (Amount of waste generated − Amount of landfill waste) ÷ Amount of waste generated × 100*6 For the calculation method, see P111.
*7 Percentage of female new graduates hired for generalist-track positions: Hired by Oji Management Office Inc. (excluding sports recruits)*8 Serious accidents : The Oji Group considers accidents of Class 3 or higher as per the Appended Table of the Enforcement Regulation of the Workers’ Accident Compensation Insurance Act to be serious accidents.
*9 Suppliers in top 75% of transaction amount

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Sustainability Strategy

Circular Use of Resources (Water)

6.4,6.5

12.4,12.5
12.6

14.1

15.1,15.2
15.3,15.4
15.5,15.cBasic Approach

Initiatives for Water Risks

The Household and Industrial Materials Businesses, Forest Resources and Environment Marketing Business, and Printing andCommunications Media Business, which are core businesses of the Oji Group, use a huge amount of water. Their water intake
accounts for 94% of that of the entire Group. We reduce water intake by reusing water and using it in multiple stages in the mills as
limited resources. In addition, used water is treated through multi-stage purification to return as much water as possible to water
areas.

The depletion of water resources and damage from floods that have been caused by climate change in recent years pose significant
risks not only to the continuity of businesses but also to industries and people’s health in the community where businesses aredeveloped. The Oji Group strives to identify water risks in businesses based on the assessment made by the World Resources
Institute (WRI), a global environmental research organization.
The analysis of water risk assessment of all 290 business sites based on the WRI’s water risk assessment tool AQUEDUCT (3.0)
showed that there were 14 sites that were located at areas with high water risk (High and Extremely high).
Water intake at the 14 sites accounted for less than 1% and their production accounted for about 2% of the total. This indicatesthat water risk in the entire business is deemed low. In 2022, assessments of the status of water shortage and flood occurrence werealso carried out at those sites (India, Thailand, China, etc.). None of the sites had visible issues in production or operation, and nomaterialized water risks were found.

Water Intake Reduction
The paper mills take water from rivers, etc. while reusing water used in the processes by purifying water and returning it toprevious processes to reduce water intake and use water resources effectively (see diagram below).
The Oji Group’s total water intake for FY2022 stood at 710
million m³, total water drainage at 673 million m³, and water
consumption at 37 million m³.

Source of intake (rivers, industrial water, underground water, etc.)
Water intake (filtration, pretreatment, etc.)

Collected and treated water
Reuse in the
manufacturing process

Digestion Washing Bleaching Washing Pulp conditioning Washing Dehydration

Drying Winding

To achieve the target for the reduction of water intake intensity, Oji Paper, Oji Materia, Oji F-Tex, and Oji Nepia, whosewater intake accounts for approximately 80% of that of theentire Group, have formulated specific reduction plans for2030 and are working on the reduction. The Sustainability
Committee receives quarterly reports from each company on
actual reductions and makes yearly reports to Directors.

Water Intake , Wastewater , and Water Intake Intensity
Water intake

Wastewater

Water intake intensity(million m³)(thousand m³/¥ mil.)

737 701500

714 676706 672

0.75

673

0.49

0.42
0.25

0

0.00

2019

2020

2021

2022

*BOD (Biochemical oxygen demand)
The amount of oxygen consumed when organic matter is broken down
by aerobic microorganisms. The most widely used indicator of pollution.
When BOD is high, foul odors, etc. begin to be produced.
COD (Chemical oxygen demand)
The amount of oxygen required as calculated from the amount of oxidantthat is consumed when organic matter is oxidized.
SS (Suspended solids)
Particulates suspended in water

Release of Substances of Environmental Concern in
FY2022 (Wastewater)
Regulatory levels of emissions

68

67

-48%

50

35

27
25

-79%

-80%
14

6
0

74

277,907

39%

6,737

45%

Low to medium (10–20%)

109

306,501

43%

5,179

35%

Medium to high (20–40%)

93

123,865

17%

2,801

19%

High (40–80%)

7

1,520

0%

136

1%

Extremely high (>80%)
Total

BOD

7

173

0%

144

1%

290

709,966

100%

14,997100%*5-level assessment of AQUEDUCT (3.0), the WRI’s water risk assessment tool. It shows the degree of potential competition among other users in water use.
The higher the value, the more competitive and riskier. https://www.wri.org/aqueduct

COD

River Basin Management by CENIBRA, Brazil

CENIBRA is engaged in a eucalyptus plantation and pulp business by extracting water from the Doce River basin in the Minas
Gerais state, Brazil. In recent years, the surrounding areas have been experiencing years of low rainfall, and the drought crisis has
become a concern for the entire region.

Installation of water reservoirs in forests
From 2018 to 2020, the company installed 51 reservoirs in its forests. Thesereservoirs will be able to store more than 1 million m3 of water, and the water stored
during the rainy season will slowly percolate underground, thereby recharging water
sources. The locations of these reservoirs have been selected so that residents canalso use them, thus ensuring harmony with the local community in the use of water
resources.
Water reservoir constructed in CENIBRA’s own forest

Actual emissions

(kt)
75

Production (kilo ton)SS

Subsoiling
In recent years, CENIBRA has been plowing into the soil that has been compacted
by heavy machinery in its forests prior to planting to promote the regular infiltrationof rainwater into the soil and to improve the growth of plantation trees. Currently,
we are further disseminating this technology and knowledge to farmers, especiallyin areas where livestock are raised, to help restore groundwater recharge functions
in grazing lands and improve water quality by reducing soil erosion.

Sustainability Strategy

Purification of Wastewater
At mills, we manage wastewater quality with voluntary
management values that are stricter than the regulatory
values. We are working to purify the wastewater. For example,
COD emissions for substances of environmental concern* in
wastewater have been reduced by at least 48% comparedto the emissions in keeping with the regulatory values to purify
the wastewater.

(FY)

A star mark indicates that FY2022 figures have been assured by
KPMG AZSA Sustainability Co., Ltd.

Wastewater treatment

Water intake (thousand m³)

Low (<10%) or No data

Topics250

Process water collection and purification

Number ofbusiness sites

0.50

0.52

0.49

710

Collect process water from each stage ofmanufacturing and purify the water

Discharge to public
water area

FY2022
Water risk

1.00

1,000

750

Water Risk Assessment*

Subsoiling (shown magnified in the circle)

Installation of septic tanks on the land of watershed farmers
The company donated 100 septic tanks in 2020 to improve the water quality ofrivers in the project area and public health indicators throughout the neighborhood.
These septic tanks are used to treat domestic wastewater by farmers, including
cooperating businesses in the company's Forestry Promotion Program.
Septic tanks donated to third parties

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90

Sustainability Strategy

Circular Use of Resources (Recovered Paper)

6.4,6.5

12.4,12.5
12.6

14.1

15.1,15.2
15.3,15.4
15.5,15.cBasic Approach
In Japan, around 60% of the raw materials for paper production comes from recovered paper. The recovered paper from households
is mainly collected through “community collection” and “administrative collection by local authorities” and utilized for the paper
production at the paper mills. Recently, the idea of sustainable paper recycling is becoming more important under the circumstanceof growing demand for paper as an alternative material for de-plasticization. The Oji Group produces newsprint, printing paper, andpaperboard that contain recovered paper in mills across Japan. Recovered paper collected locally is utilized in mills belonging to the
Oji Group, mainly in mills located near the source of material, and contributes to keeping a healthy recovered paper recycling system.
For further improvement our recovered paper utilization ratio, the Oji Group challenges to utilize various types of recovered paper andcontributes to domestic circular use of resources in Japan.
Mills Using Recovered Paper
Newspapers

Newspapers are printed bynewspaper companies acrossJapan and delivered to readers.

Recovered Paper Used at Kneading Pulper

Plasterboard

Paper tube

Paper container

Gold and silver paper

Mill wrapper

PP laminated paper

Paperboard mill
Newsprint/Paper millConfidential document recycling
facility (Oji Materia Edogawa Mill)

Newspaper recycling
Newsprint

Initiatives for the Expanded Use of Recovered Paper
The Oji Group is involved in recycling confidential documentsthat were previously often incinerated and difficult-to-process
recovered paper that were unsuitable for paper recycling.
Recycled pulp regenerated at kneading pulper, dissolving
equipment dedicated for difficult-to-process recovered paper,is used for containerboard and other products.
The Group has started to create a recycling system for
paper cups and other paper which are attracting attention for
expanding recycling, and promote recycling as a raw material
for paperboard.

Kneading pulper, dissolving
equipment for difficult-to-recycling
paper (Oji Materia Fuji Mill)

Old newspapers

Initiatives in Overseas Group Companies

Newsprint is made fromold newspapers and pulp.

Old newspapers are collected
and shipped to paper mills.

Present State and Activities in Japan*1 Recovered paper utilization ratio = Volume of recovered paper consumed
÷ Total volume of fiber raw materials consumed (total consumption ofrecovered paper, wood pulp, and others)

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The Oji Group Integrated Report 2023

Malaysia
GSPP manufactures containerboard made of recovered paper,and significantly enhanced production capacity in 2021.
In 2022, GSPP imported recovered paper from overseas
including New Zealand and Japan, in addition to collecting
approximately 370,000 tons of recovered paper in Malaysia.
GSPP examines the quality of recovered paper when receiving
it, striving to maintain the quality of recovered paper.

Oji Fibre Solutions’ recovered paper collection vehicle

Quality check by GSPP when receiving recovered paper

Trend in the volume of Recovered Paper Consumption andRecovered Paper Utilization Ratio*1
Volume of recovered paper consumption (kt)
Old corrugated containers
Old magazines

Old newspapers

OthersRecovered paper utilization ratio (%)
Oji Group companies in JapanAll Japan*2
(kt)
8,000

(%)
70.0

7,000

68.0

6,000

66.0

5,000

64.0

4,000

62.0

3,000

60.0

2,000

58.0

1,000

56.0

0

2015

2016

2017

2018

2019

2020

2021

*2 Source for all Japan: Paper Recycling Promotion Center

2022 (FY)

54.0

TopicsTrend in Global Recovered
Paper Recycling

Supply and demand of paper and paperboard products
fluctuates depending on international economic trends.
For example, in Southeast Asia and India, where economic
growth is rapid, demand for containerboard is increasing.
Such fluctuations have a large impact on recovered paper,a raw material of those products. The Oji Group strives forstable procurement of recovered paper by taking advantage
of its broad network and quickly capturing changes in thetrends.

Sustainability Strategy

Current Recovered Paper Utilization Ratio
The Oji Group consumes 3.81 million tons of recovered paper
for its production annually. This is equivalent to 24% of 15.70
million tons of the total recovered paper consumed in Japan.
The breakdown of recovered paper use is as follows: 57%
old corrugated containers, 18% old magazines, and 16% oldnewspaper. The recovered paper utilization ratio*1 continues toincrease year on year as the use of recovered paper expands.
In recent years, The decline in printing paper production has
been greater than the increase of paperboard, whose recovered
paper utilization ratio is higher, and changes in the paper productvariety composition have pushed up the overall recovered paper
utilization ratio. While the ratio was 67.1% in FY2021, it rose to67.6% in FY2022 due to a decrease in printing paper production
and an increase in paperboard production.
The Oji Group has maintained a high recovered paper utilization
ratio by continuously working on the recycling of various typesof recovered paper. Since FY2021, we have been working tofurther expantion the use of recovered paper with the aim ofachieving a recovered paper utilization ratio of 70% or more (inJapan) under the Environmental Action Program 2030.

New Zealand
Oji Fibre Solutions (Oji FS) is New Zealand’s only containerboard
manufacturer and largest consumer of recovered paper.
It boasts a recovery volume that exceeds not only its own
consumption, but also that of the country’s domestic
consumption. Oji FS collected about 240,000 tons in FY2022,
and the surplus exceeding its own consumption was exported
overseas, mostly to the Oji Group company GSPP (Malaysia).

Change in the volume of imports/exports of old corrugatedcontainers in the main regions

Europe*2

2018

2.47
million t
1.37 million t

2022

India

North America
6.85 million t

4.65 million t

China 2.75

million t

Japan

0.64
million t

4.25
million t

Southeast Asia*1

1.80 million t*1 Countries included in the data for Southeast Asia: Vietnam, Thailand,
Malaysia, Indonesia*2 Countries included in the data for Europe: EU, United Kingdom†
Created based on the trade statistics of each country

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92

Sustainability Strategy

Respect for Human Rights

5.1,5.4
5.5,5.c

Basic Approach

FY2022 Initiatives

Respect for human rights constitutes one of the material issues of the Oji Group. Not only our employees but all of our suppliers share
our beliefs regarding respect for human rights, and implement concrete initiatives which will help prevent human rights issues.
In the belief that the responsibility to respect human rights is an important element of the global code of conduct, in August 2020
we established the Oji Group Human Rights Policy in order to further strengthen and implement initiatives involving respect for humanrights. The policy is based on the United Nations Guiding Principles on Business and Human Rights, and clearly states that we supportand respect the international norms listed below, conduct human rights due diligence and appropriate employee education, andoperate the Business Ethics Helpline to remedy negative impacts on human rights.
International Bill of Human Rights
ILO Declaration on Fundamental Principles and Rights at Work, which includes ban on forced labor and child labor andelimination of discrimination
United Nations Global Compact
In the supply chain, the Oji Group Partnership Procurement Policy asks business partners to uphold human rights, protect workers’
rights, ensure workplace safety and health, and take other necessary measures. In addition, supplier sustainability surveys (page 101)are conducted regularly targeting suppliers in Japan and overseas.

1. Implementation of human rights due diligence
We conducted human rights assessment that reviews humanrights and labor practices.

Oji Group Partnership Procurement Policy

https://ojiholdings.disclosure.site/en/themes/187/

Results of Supplier Sustainability Surveys

https://ojiholdings.disclosure.site/en/themes/189/

Material issues and promotion status regarding sustainability are discussed at the Sustainability Committee, which ischaired by the Oji Group CEO and consists of Directors ofOji Holdings Corporation (including Independent Outside
Directors).
Discussions take place twice a year, where policies andaction plans are formulated for measures against climatechange, sustainable forest management, human rights,
promotion of inclusion & diversity, and other topics andprogress is monitored. The contents of the discussions arebrought before the Group Management Meeting as necessary.

Sustainability Promotion StructureGroup Management Meeting
Development andsupervision

Submission andreporting

Chairman: Representative Director of the Board, President (Group CEO)
Discussion
andreportingCommittee: Director of the Board, Officer responsible for Corporate Sustainability Div.
Director of the Board, Officer responsible for Corporate Governance Div.
Director of the Board, COMPANY President
Director of the Board appointed by Group CEO
Secretariat: Corporate Sustainability Dept.

Corporate Sustainability Div.
Corporate
Governance Div.

Continuous improvement
through PDCA cycles

Information
disclosure(Guiding Principle 21)

Follow-up surveys(Guiding Principle 20)

Innovation
Promotion Div.

GroupTechnology Div.

Oji Management Office Human Resources Div., Financial Div.,
Corporate Planning Div., Oji Business Center, Oji Green ResourcesGroup Companies

The Oji Group Integrated Report 2023

*2 Ministry of Economy, Trade and Industry, “Guidelines on Respecting
Human Rights in Responsible Supply Chains”

Target8 technical interns at Oji Packaging
Results
The CRT’s report confirmed that there were no major issues inworking hours, wages, health and safety, communication, etc.
and a good, trusting relationship had been established.
Report on interviews with technical interns
https://ojiholdings.disclosure.site/Portals/0/pdf/themes_217/results_
of_interviews_with_foreign_workers.pdf (in Japanese)

Stakeholder engagement*1 Excluding companies with few employees or that share the administration
division with another company• 39 overseas wood raw material suppliers (rate of response:
100%)
Results
While no materialized serious human rights risks were identified, we asked business sites with organizational issues (e.g.
department or person in charge of matters related to humanrights is unclear) to make improvements.
Improvement examples• Clarified the structure and person responsible for respecting
human rights: 3 companies• Clarified the structure and person responsible for spreading
information on the consultation office: 2 companies
Human rights assessment results
https://ojiholdings.disclosure.site/en/themes/217/

By implementing human rights due diligence and taking othermeasures, we will continue to strive to find materialized andpotential human rights risks and work to reduce such risks.
2. Thorough respect for human rights (understanding working
environments of non-Japanese workers in Japan)
Targeting 92 consolidated companies in Japan, we conducteda survey on the status of employment of non-Japanese workers (including technical interns and temporary employees) andcompliance with relevant laws and regulations.
Results
At 23 companies that employ non-Japanese workers, wefound no issues in terms of legal compliance and treatment.

COMPANY

93

Group company Oji Packaging organized interviews conductedby external experts (Caux Round Table Japan (CRT Japan)).

3. Investigation on potential human rights risks (interview
with foreign technical interns conducted by external
experts) and sharing of case studies
To learn about the actual working conditions of foreign technicalinterns, who are often said to be in a vulnerable position*2,©CRT Japan
Interview with technical interns conducted by CRT Japan

Sharing as a case study
Based on advice from the CRT, the interview results wereshared in the Oji Group as a best practice. In addition, we
checked the state of labor practices, etc. with four companies that accept technical interns. While the state wasmostly satisfactory, some business sites had salary slips
and workplace accident prevention signs in Japanese
only. We shared what should be improved and confirmed
the willingness to make improvements.
4. Education
Human rights education is provided as part of various training
programs. Additionally, we have been providing Diversity Management Web Training to managers in the Group. In FY2022,
the theme was “Human Rights from an International Perspective,” and 2,566 managers attended the training.
We have also prepared a new English translation of the Oji
Group Human Rights Policy Handbook and have been using
it for human rights education.

Sustainability Strategy

Development andsupervision

Sustainability Committee

Key issues
discussion andreportingIntegration with internal
divisions and procedures
and implementation of
appropriate actions(Guiding Principle 19)

10.2,10.3

Target• 157 consolidated companies*1 (rate of response: 96.8%)

Human Rights Initiatives Promotion Structure

Board of Directors

Human rights
risk assessment(Guiding Principle 18)

Building of a correction and complaint handlingmechanism (Guiding Principle 22)https://ojiholdings.disclosure.site/en/themes/108/

Human rights due diligence (Guiding Principle 17)
Formulation of the human rights policy(Guiding Principle 16)

Oji Group Human Rights Policy

Cycle for Human Rights Due Diligence

8.2,8.5
8.8

5. Dialogue and discussion
We participated in Global Compact Network Japan’s Human
Rights Education Subcommittee and Human Rights Due Diligence Subcommittee and exchanged information with experts, including other companies and NPOs.

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94

Sustainability Strategy

Enhancing Human Capital

5.1,5.4
5.5,5.c

8.2,8.5
8.8

10.2,10.3

Oji Group Human Resource Philosophy
Me s s a g e f ro m Ge n eral M a na ge r, H um an Re so urces D i vi si o n
Sustainable improvement of corporate value by practicing Management Philosophy, Purpose, and management strategies (including Long-term Vision)

Policies and Initiatives for Enhancing
the Value of and Leveraging Human Capital

Our goal in enhancing human capital: Securing and fostering human resources who embody the Oji Group Human Resource Philosophy
Oji Group Human Resource Philosophy

Director of the Board, General Manager, Human Resources DivisionHigh ethical principles / Understanding and practicing of Management Philosophy, Purpose, and management strategies / Awareness of

Kazuya Asataniand efforts for transformation Self-training and contribution to the organization’s growth and evolution / Actions with global awarenessOji Management Office Inc.

What is the background of and reason for enhancing the value ofhuman capital?
The Oji Group has rolled out corporate activities under the fundamental principle of “a company’s strength originates from human resources (human capital).” Enhancing the value of and leveraging human capital is expected to become increasingly important in the
recent social environment, where we are asked to make a rapid shift
to an industry structure that keeps pace with a global and sustainable digital society, as well as to secure, promote, and leverage diverse human resources.
What would be the ideal employee profile?
The Oji Group Human Resource Philosophy on the next pageshows the profile of employees who contribute to the medium- tolong-term improvement of corporate value. We expect them to uphold high ethical principles as members of society; understand andpractice our Management Philosophy, Purpose, and management
strategies; accurately understand changes in and requests from society; press ahead with transformation awareness and take on challenges; strive for self-training and contribution to the organization’s
growth and evolution; and take actions with global awareness tocontribute to the improvement of corporate value and achievementof a sustainable society.

Could you elaborate on the initiatives for creating an environmentthat enhances the value of human capital and ensures that thevalue is demonstrated to the fullest?
In addition to cementing the three foundational elements I mentioned earlier, we systematically implement each business company’s
rank-based training and function-based training to develop each employee and organization’s capabilities. Going forward, we will particularly focus on developing global human resources and boosting digital literacy. In January 2023, we completed the construction of Oji
Group Training Center at the foot of Mount Fuji in Shizuoka Prefecture. Making full use of this facility, we will develop human resources
and strengthen organizational capabilities through in-house training
and meetings.
To improve productivity and flexibly embrace diverse workstyles
and lifestyles, we will continue to promote working style reforms,
such as reduction of total working hours and introduction of remote
work, thereby supporting improvement in work-life management.
Where do you stand on the ideal corporate culture and relationshipbetween the company and employees?
It is best if the company and employees could learn from eachother, facilitate each other’s growth, and improve each other on an
equal footing. Organizations competitive in the long term are thosethat pay attention not only to each employee’s growth and self-realization but to successor development and organizational growth andlearn, grow, and evolve perpetually.
Companies, however, cannot survive perpetually if they just follow
and pass on precedents and fail to adapt to social changes. We will cultivate a culture where there is free and open-minded communication,
have each employee express diverse views and ideas, learn every day ina lively, sincere, humble*, and autonomous manner, create an organization where employees facilitate each other’s growth and evolution, andaim to adapt speedily to changes in and requests from society.
word “humble” here means learning with an honest and introspec* Thetive attitude and acting objectively and reasonably, which is broader thanbeing modest and reserved.

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The Oji Group Integrated Report 2023

Active participation and demonstration of the full potential of every employee
Achieving innovation based on diverse values and creative ideas
Development of abilities and careers of diverse human resources

Improvement in work-life management (working style reforms and health and productivity management)

Change in mindset and behavior of each employee, and managers’ management style that facilitates subordinates’ growth and evolution
Leveraging human resources (treating employees fairly based on merit and enhancing engagement)

Three fundamental elements

Respecting human rights and promoting inclusion & diversity
Observing all the rules of compliance, safety, and environment

Inclusion & Diversity
The Oji Group asks all employees to uphold core common values, such as the Management Philosophy, Purpose, and Human Resource Philosophy.
The Oji Group is also promoting “inclusion & diversity” with a view to “vitalization of individuals and the organization.” We aim to make full useof each employee’s diverse values, ideas, and abilities and let them facilitate each other’s growth, regardless of attributes such as race, nationality,
ethnicity, place of origin, thoughts and beliefs, values, religion, age, gender, sexual orientation, sexual identity, disability, social status, or social
position, which will ultimately strengthen the Group’s competitiveness.
Group-wide policies and targets for promoting diversity are shared at the Sustainability Committee every six months. We also have appointed theGroup CEO as Chief Health Officer to work on health and productivity management.
Women in Management Positions and Female New
Graduates Hired for Generalist-Track Positions
To promote active participation of women, we aim to increase thepercentage of women in management positions to 5.5% by the endof March 2025. The target is applicable to 16 consolidated subsidiaries in Japan with 301 or more employees. As of the end of March
2023, the percentage of women in management positions is 3.6%.
Since FY2018, famale new graduates in career-track positions in major Oji Group companies are recruited by Oji Management Office Inc.
to secure talented human resources and improve operational efficiency. Our target is to achieve at least 30% in the percentage of famale new graduates in career-track positions, and we strive to secure candidates for future female managers. In FY2023, we hired 20
female new graduates, which accounted for 37.7% of famale newgraduates in career-track positions. Aiming to eliminate gender gaps

in employee development, we provide training such as career building training for employees on the generalist track to develop
pre-management male and female employees. In addition, measures
we have taken to help employees balance work and childcare include opening “Nepia Sodaterrace,” a nursery in Edogawa-ku, Tokyo, and offering nursery subsidies for employees who return to work
early from their childcare leave.
In addition to helping employees balance work and childcare as
explained above, nursery “Nepia Sodaterrace” aims to address theissue of children on nursery waiting lists, thereby fulfilling corporatesocial responsibility. Not only our Group employees but also local
residents can use the nursery. (As of the end of March 2023, fourchildren of employees and nine children of local residents are using
the nursery.)

Percentage of female managers

Percentage of famale new graduates in career-track positions

Number of female managers
Percentage of female managers

2.9

3.1

2.5
1.8

2.0

42

44

2014

2015

56

2016

66

2017

72

2018

3.5

3.6

3.7

3.6

Number of famale new graduates in career-track positions
Percentage of famale new graduates in career-track positions

38.3
82

2019

85

2020

88

2021

84

2022 (FY)

Sustainability Strategy

What are the foundational initiatives for developing ideal employees?
Observing all the rules of compliance, safety, and environment is
the most important element, we call for understanding and practiceby repeatedly explaining about them in various training programs andmeetings. This is because having the company and each employee
act in a sincere manner as members of society and creating a healthy
workplace where employees can work safely and with peace of mind
are requirements for the company’s survival and the foundation for all
corporate activities.
Next, we respect human rights and promote inclusion & diversity.
The basic idea is to respect (accept) human resources as people,
make the most of each person’s diverse abilities, and facilitate eachother’s growth. If this idea takes root, it is likely that diversity will also
take root naturally (there will be no need to consciously promote diversity). To change the mindset and implement specific measures,
we have set numerical targets in Japan for promoting and recruiting
women to be managers and employing people with disabilities, andare working on them in a systematic way. Furthermore, to encourage
men to engage in childcare, we have established our own paternity
leave system and have been advising each eligible employee to takethe leave. As a result, the ratio of eligible male employees who took
the leave have risen to 98.8%.

Third, to leverage human resources (treat employees fairly basedon merit and enhance engagement), we have introduced a merit-based personnel system and rolled out across the entire Group. Byclarifying the role each employee is expected to play and engaging inperiodic dialogues, we aim to develop and leverage human resources appropriately and treat them fairly.
We also launched an open recruitment system with in the GroupFY2022. The system is believed to have helped leverage highly motivated human resources and invigorate the organization, as well as
facilitate self-reliant career development and enhance employee engagement.

40.0

34.0

18

18

2018

2019

30.6

30.0

37.7
20

15

15

16

2020

2021

2022

2023 (FY)A star mark indicates that FY2022 figure has been assured by KPMG
AZSA Sustainability Co., Ltd. For the calculation method, see P111.

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Sustainability Strategy

Enhancing Human Capital

Percentage of Male Employees Taking Childcare Leave
The Oji Group’s target for the percentage of male employees taking childcare leave is 100% for 16 consolidated companies in Japan
with 301 or more employees. We thus actively encourage men to engage in housework and childcare. In FY2022, the percentage was
98.8%, including manufacturing sites where employees work in three shifts.
Employment Rate of People with Disabilities
We have proactively promoted the recruitment of people with disabilities, including the July 2007 establishment of Oji Clean Mate (incharge of cleaning the headquarters building), a special-purpose subsidiary under the Act to Facilitate the Employment of Persons
with Disabilities staffed primarily by people with mental disabilities. For the six major companies in the Group (including Oji Holdings)
subject to special treatment for related companies, the employment of people with disabilities is 2.51% (as of June 1, 2023), satisfying
the statutory employment rate (2.3%). We will further expand the employment of people with disabilities.
Employees of Nationalities Other Than Japanese
In achieving diversity, we position the development of global human resources as an important theme. All new graduates hired forgeneralist-track positions in major Oji Group companies in Japan are recruited by Oji Management Office Inc. to secure talented
human resources. In FY2023, three generalist-track employees of nationalities other than Japanese were hired as candidates for future
managers in Group companies in Japan. We will continue to hire a certain number of non-Japanese employees, and also promote
them to managerial positions. As of March 2023, there are 23 generalist-track employees of nationalities other than Japanese. Eightof them are managers, whose job includes the operation and management of local businesses of overseas Group companies. In
addition, we strive to create an environment that encourages each employee to demonstrate their abilities, such as an environment
where non-Japanese employees can communicate with each other and easily consult with HR representatives.
Of the 37,845 Oji Group employees, 57% (as of the end of March 2023) are employees of overseas Group companies. Corporate
managers and employees in managerial positions of those companies mainly consist of locally hired personnel. In 2019, we appointed
a non-Japanese employee as a Corporate Officer.
Mid-Career Recruitment
To secure human resources who can promptly realize the management strategies, we have been conducting mid-career recruitment.
In FY2022, the Group hired 18 mid-career employees through Oji Management Office Inc., of which six are playing an active role as
managers. We will continue to hire a certain number of mid-career employees, and also promote them to managerial positions. In
addition, we leverage alumni human resources (employees who rejoined the Group after leaving for reasons other than mandatory
retirement) by promoting those who gained effective outside experience.

Reduction of total working hours(26 Oji Group companies in the Main Office region)

97

The Oji Group Integrated Report 2023

HR and Pay Systems (Role-Based Personnel Grading System, Extended Retirement Age, Discretionrry Labor System
for Researchers)
We properly operate the role-based personnel grading system, which is a merit-based personnel system focused on role expectations
and performance instead of virtual seniority. Each employee is treated in accordance with the significance of roles demonstrated
through their abilities.
To let senior employees play an active role in a lively manner, we introduced the “retirement at age 65” system in FY2017 at
major Group companies in Japan, so that those employees can fully demonstrate their knowledge, skills, and abilities nurtured intheir corporate careers and work with enthusiasm. In addition, a reemployment system up to age 67 was introduced in FY2023 for
employees who meet certain conditions.
We have implemented the certified researcher system and creative personnel development system under which we grant researcherswith particularly high levels of specialized knowledge discretion regarding their work styles and provide working environments thatallow them to focus on research. We thus promote innovation through creative accomplishments based on diverse values and ideas.
The number of employees eligible for the creative personnel development system roughly doubled in FY2022 from the previous years.
Training
To develop human resources in line with the Oji Group Human Resource Philosophy, we have enriched in-house training in accordancewith career stages. In particular, we are committed to developing global human resources to fully pursue the management strategies.
The Oji Group Fuji Training Center, a new base for the exchange and development of human resources constructed in Fujinomiya
City, Shizuoka Prefecture, started operation in February 2023. The center hosts not only Group-wide training sessions but thoseorganized by business companies. All training that takes place atthe training center includes education on compliance, safety, andenvironment, the Long-term Vision, and the Purpose. We thus seek
thorough understanding and penetration of these topics.
Global human resource development training, which has beensuspended due to the COVID-19 pandemic, is scheduled to resume
in FY2023 with revised contents. We also plan to focus primarily on
boosting digital literacy in driving forward the development of humanresources who can promote digital transformation.

Exterior of the Oji Group Fuji Training Center

Main training content (Organized by Oji Management Office)Total working hours (hours/year)

Goals

2,050

Global human resource
development

1,996
1,933
FY2014
Target: 1,900 hours

From FY2015 onward
Target: 1,850 hours

1,861

Health and Productivity Management
We established the Oji Group Health Declaration in October
2020. We are working on ensuring the good health of employees
under the leadership of our Chief Health Officer (Group CEO). Our
activities for health and productivity management are promoted
through cooperation between companies, health insurance
unions and labor unions of the Oji Group, and the industrial
physicians of each business site. These measures aim to create
working environments where employees can actively work in a
lively manner and with sound health.
In March 2023, we were recognized under the 2023
Certified Health and Productivity Management Organization
Recognition Program (Large Enterprise Category) for threeconsecutive years from FY2021.

To leverage human resources who are the source of value creation, practice the Management Philosophy and Purpose, and thoroughly
pursue objectives in line with the management strategies (including the Long-term Vision), we aim to treat employees fairly based on
merit and enhance engagement.

2013

2014

2015

2016

2018

2019

2020

2021

Eligible employees

2022 (FY)Managerial personnel
development
Career design
Support for employee
ability development

Examples of health and productivity management
activities
Conduct health examinations and stress checks
Installation of Health Consultation OfficeFlu vaccinations (workplace vaccinations, cost subsidized)
Hourly use of accumulated annual leave to go to the hospital

OutlineGlobal human resource development training (has been suspended due to the COVID-19 pandemic and is scheduled to resume in FY2023 with revised contents)
New manager training

New managers

Manager duties, HR programs, and evaluator training

New general manager training

General manager level

Dialogue with CEO and acquisition of knowledge andskills required to achieve division strategies

Career building training for employeeson the generalist track
Career design training for young employeeson the generalist track

Pre-management employees
Understand the functions required of managers, and improve capabilities for setting
on the generalist track
and solving issues
3rd year employees on theAssess their own abilities and establish goals for career self-reliancegeneralist track

Personal-empowerment system

Qualiﬁed individuals

Management training

1,839 1,825 1,827 1,819 1,843 1,830
2017

Name of training

Sustainability Strategy

Total Working Hours
Since FY2014, we have been working on the reduction of total
working hours as part of working style reforms. Specifically, toimprove productivity and implement working styles that pivot thefocus away from how long employees work, we are improving
operational efficiency, taking advantage of the flex-time system andremote work, and encouraging employees to take annual paid leave.
Our current target for the total annual working hours is 1,850
hours (for 26 Oji Group companies in the Main Office region), andthe actual working hours for FY2022 totaled 1,830 hours.

Leveraging Human Resources (Treating Employees Fairly Based on Merit and Enhancing Engagement)

Support for self-reliant career development

Open Recruitment System With In The GroupTo promote autonomous career development based on employees’ intentions, and to strengthen business, revitalize the organization,and improve employee engagement by appropriately assigning and effectively utilizing highly motivated human resources, we launched
an open recruitment system with in the Group in FY2022 for regular employees and overseas expatriates of Group companies inJapan.
The actual open recruitment took place in October 2022, and many applied for job openings including those for overseas expatriates
in the India region and positions in departments in the new Group Business Development Division of Oji Management Office Inc. 19
successful applicants who passed the document screening and interview were transferred to their new positions.

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98

Sustainability Strategy

Ensuring Workplace Safety and Health
8.8

Basic Approach

Under the policies of “observing all the rules of compliance, safety, and environment is the core of business activities” and “basic
principle with safety as its absolute top priority,” the Oji Group aims to become a company where workers can work in a safe
environment and with a sense of security.

Safety and Health Management
StructuresOji Group Safety and Health Management
Structures aim to prevent occupational
accidents and maintain and promote thegood health of Group employees (including
affiliates and business operators whoenter the Group’s premises on a temporary
basis), and also clarify responsibilities
relating to safety and health. It stipulates
fundamental matters in the Group Safety
and Health Management Rules.

Group CEO
Direction and Supervision

ReportingOji Holdings Corporation
Corporate Sustainability Division
Safety Administration Dept.
Direction and Supervision

Reporting

Each COMPANY

Direction and Supervision

Reporting

COMPANY Management Companies
Safety and Health Management Division
Direction and Supervision

Independent Business Companies

ReportingMain Companies
Head Office

Main Companies
Head Office
独立事業会社
Safety and Health Management Division

Safety and Health Management Division
Direction
andSupervision

ReportingDirection
andSupervision

ReportingDirection
andSupervision

Affiliated Companies

ReportingDirection
andSupervision

ReportingAffiliated Companies

Workplaces

Workplaces

Workplaces

Workplaces

Safety and Health

Safety and Health

Safety and Health

Safety and HealthManagement Division

Management Division

Management Division

Management Division

Lost Time Injury Frequency Rate (Safety Performance)
The Oji Group’s lost time injury frequency rate* had been on adeclining trend since 2016 but increased in 2021. The figure
was 1.11 in 2022. According to the Ministry of Health, Labourand Welfare’s Survey on Industrial Accidents (businesses withat least 100 employees), in 2022, the rate in all manufacturingindustries was 1.25 and the rate in the pulp, paper, and paper
processing manufacturing industry was 1.59.
* For the calculation method, see P111.

Lost Time Injury Frequency Rate
Japan

Overseas

Whole GroupAll manufacturing industries

Pulp, paper, and paper processing manufacturing industry
2.0

1.88
1.56

1.5

1.0

0.5

1.46

1.31
1.15

1.25

1.07

1.02

1.20
1.01

1.20
1.08

0.79

0.89
0.76

0.88

2017

2018

1.02

0.61

2016

1.85
1.59

1.54
1.21

1.31
1.09

0.67

0.85
0.81
0.76

0.97
0.84

2019

2020

2021

1.29
1.25
1.11
0.86

Ensuring Compliance with the Main Principles for Safety
and Related Rules and Implementing Hands-on Risk
Training Using Virtual Reality (VR)In addition to ensuring compliance with all four basic rules
for safety, in place since the 2022 Occupational Safety and
Health Promotion Plan, we have prepared safety operation
manuals that include matters to be observed, matters that areprohibited, and non-routine work procedures. We conduct
education and training repeatedly, while checking the level ofunderstanding and mastery.
Our own content is used for VR-based hands-on risk
training. We create opportunities for contractors (including
companies other than unit companies) to experience thetraining, thereby seeking to prevent occupational accidents.
Oji Group companies (each division including head office,etc.) and workplaces in Japan hold workplace safety andhealth meetings, where rules are familiarized and participants
exchange opinions, share information, and deepen discussion.
We thus roll out initiatives to create a workplace safety climate
and a safety culture based on employees’ own thinking.

Checking matters to be observed and matters that are prohibited

VR-based hands-on risk training Workplace safety and health meeting

Improvement of Safety of Machinery/equipment (Safety
Inspections of New Equipment)
When Group companies in Japan construct or operate new
equipment, Oji Holdings Corporation’s Safety Administration
Department, COMPANY, and the relevant company conductsafety patrol as well as safety inspection prior to trial operation.
They point out and correct unsafe matters and behaviors,
thereby preventing accidents.
At sites where construction work contractors are in operation,
the site is divided using barricades and other tools to clearly
separate work areas, and instructions are given for thoroughcommunication and coordination between areas. We also
point out issues regarding detailed safety measures, such asmeasures to ban people from entering areas where machines
and equipment are operating, and require immediate corrections,
whether construction works are done by us or a contractor.

Revitalization of Safety Activities (Enhanced Safety Patrol)
In addition to conventional safety auditing and patrol, westarted enhanced safety patrol in 2022.
It not only involves going around the site but staying for acertain period of time and engaging in fixed-point observationof workers’ behavior, as well as inspecting equipment. Underthe responsibility of heads of workplaces, we are working
to improve matters that have been pointed out, such as
drawing a clear line between areas where forklifts operate andpeople work, checking rules when using forklifts and actually
educating workers, and separating the path for forklifts fromthat for pedestrians in workplaces.

Safety inspection of new equipment

Enhanced safety patrol

2022 (Year)A star mark indicates that 2022 figures for Japan, overseas, and thewhole Group have been assured by KPMG AZSA Sustainability Co.,Ltd.

Oji Group’s 2023 Occupational Safety and Health Promotion Plan
In 2022, two fatal forklift and heavy machinery accidents occurred in Japan and one fatal work-related traffic accident occurred
overseas, claiming three precious lives in total. The number of accidents that resulted in time off from work was roughly the same as
the previous year, and about half of them were due to non-compliance with safety rules. Observing and making others observe themain principles for safety and safety rules has therefore been set as the most important measure. As a new initiative, we started fixedpoint observation in enhanced safety patrol. In addition, we are actively improving the safety of machines and equipment.

99

1. Basic policies:

The Oji Group will promote activities with the target of zero work-related accidents across the entire Group withsafety as its absolute top priority.

2. Slogan:

Always Follow the Rules and Ensure that Others Follow the Rules to Prevent Fatal and Serious Accidents

3. Key Targets(Targets of the entire Oji Group): To achieve the zero fatal and serious work related accidents

4. Key Measures:

1) Full compliance with the main principles for safety and related rules, and implementation of VR (virtual reality)
hazard experience training
2) Improvement of safety of machinery/equipment
3) Revitalization of safety activities
4) Strengthening of collaboration between overseas group companies
5) Management of physical and mental health, and improvement and maintenance of the workplace environment

The Oji Group Integrated Report 2023

Sustainability Strategy

0.0

1.94

Initiatives for Prevention of Occupational Accidents

Initiatives for Prevention of Occupational Accidents
in Companies Overseas
Rolling Out Hands-on Risk Training Using
Virtual Reality (VR)Beginning in 2020, we are gradually conducting hands-on
risk training sessions using VR at overseas workplaces.
Overseas participants’ comments on the highly immersive
VR video included, “I was amazed that it actually felt likeusing the machine. I was surprised when the controller was
pulled (exactly when I was getting caught). The experience
felt real. It was a new experience.” Every year, we create
original content which includes scenarios that haveoccurred in the Oji Group so that employees can have afresh experience in an environment that is similar to theoperation sites where they work every day. We will continue
to enhance each employee’s awareness toward safety andsensitivity to risks.

VR-based hands-on risk training

The Oji Group Integrated Report 2023

100

Sustainability Strategy

Responsible Raw Materials Procurement
8.7

Basic Approach

The Oji Group is expanding and enhancing its CSR (Corporate Social Responsibility) procurement, which takes environmental andsocial factors into consideration when procuring raw materials. The Group shares the Oji Group Partnership Procurement Policy withall its divisions involved in procurement, and requests the understanding of new suppliers before starting transactions. When revising
the Policy, the Group informs all suppliers of the revisions to fulfill its social responsibilities along the entire supply chain.
In tandem with the expansion of Group overseas businesses, the number of overseas suppliers has been on the sharp rise. Since
FY2020, therefore, we have conducted sustainability questionnaire surveys of main suppliers, on top of confirming the status ofoperation of the Oji Group Partnership Procurement Policy and the Wood Raw Material Procurement Guidelines.
Oji Group Partnership Procurement Policy (revised in 2018)
1 Ensure stable supply
2Comply with laws and social standards, and engage infair trade

3 Consider the environment

4 Demonstrate social concern

5 Communicate with society

https://ojiholdings.disclosure.site/en/themes/187/

Offer competitive prices

Ensure quality and delivery

Comply with relevant laws and international conventions

Maintain sincere and healthy relations with business partners

Reinforce environmental management systems

Protect biodiversity

Reduce waste and effectively use resources

Reduce environmental impact

Address climate change (reduce greenhouse gas emissions
mainly through energy conservation, and promote carbon dioxide
absorption as well as carbon fixation mainly through sustainable
forest management)

Manage chemical substances

Protect human rights (prohibit child labor, forced labor, discrimination, and harassment)

Ensure workplace safety and healthProtect labor rights (maintain good labor relations, avoid long
working hours, ensure payment of above-minimum wage, andrespect freedom of association as well as right to collective bargaining)

Contribute to society and the local community

Build relationships of trust with stakeholders through communication

Respect the cultures and customs of othercountries

Manage water resources

Results of Supplier Sustainability Surveys (FY2020–2022)

101

The Oji Group Integrated Report 2023

FY2022 Sustainability Survey on Wood pulp Contained in the Base Paper Purchased (Procured by the Base Paper Manufacturers)
In FY2022, we conducted a survey on wood pulp contained(92.3%) used the wood for which forest certification, etc. werein the base paper purchased (procured by the base paper
acquired and legality verified. In regard to the brands for which
manufacturers), which had not been covered in the previous
the origin of the wood used has not been identified, we will resurveys, to ensure the legality of the wood used. It turned out
place them with brands of base paper for which the legality ofthat, of the 570 brands of base paper purchased, 526 brands
the wood used has been verified, by the end of FY2023.
Number of brands

Ratio

Notes

Base paper purchased

570

100%

BreakdownBase paper for which the legality of the wood used has been veriﬁed

526

92.3%

Forest certiﬁcation, etc. acquired

Base paper for which the origin of the wood used has not been identiﬁed

5

0.9%

To be replaced in FY2023

Other

39

6.8%

Customer-speciﬁed base paper

The Oji Group specifies items to confirm the origin of wood, forest management methods, illegallylogged wood, mixture of wood with high conservation values, and human rights violations basedon the Wood Raw Material Procurement Guidelines, and procures only raw materials that are
produced in properly managed forests. It is possible to trace the source of wood throughout theentire process from the forests of origin, woodchip mill to paper manufacturing and pulp mill.
In FY2021, the Group procured 4,429 kBDT (bone dry tons) of woodchips in Japan andoverseas and 183 kADT (air dry tons) of market pulp, obtained traceability reports from all the
suppliers, and confirmed with a third-party organization that the procurement was in accordancewith the Wood Raw Material Procurement Guidelines.

Wood Raw Material Procurement Guidelines (revised in 2023)
https://ojiholdings.disclosure.site/en/themes/188/

Breakdown of Supplier Ratings
E-ratedS-rated6%

4%

D-ratedThird-party audit report on the
traceability report

A-rated7%

8%
Number of suppliers
that responded:548

C-rated32%

B-rated43%

Making use of forest certification systems

The Oji Group manufactures products certified by FSCTM(FSCTMC014119, etc.) and PEFC (JIA-PEFC-COC-0808, etc.)
by making use of forest certification systems that support
sustainable forest management.

FM
Certification

CoC
Certification

Forest Resources

Mill (intermediate products)

Recoveredpaper

Woodchip/pulp
paper, paperboard,
processed lumber products

CoC
Certification

Score rating

Criteria

Number of suppliersS

750 or more

24A

650 or more but less than 750

45B

500 or more but less than 650

235C

250 or more but less than 500

175D

100 or more but less than 250

37

E

Less than 100

32

Total score

Perfect score: 800548

Rated based on the total score of eight items

Eight items from an ESG perspective
Corporate governance related to CSR
HumanrightsLabor
Environment
Quality and safety
Basic attitude toward supply chain
Harmonious
coexistence with local communities
Information
security/protection and fair corporate activities

FSCTM
Certified Products
PEFC
Certified ProductsPlant (end products)
Copying paper,household paper,
corrugated containers

Sustainability Strategy

Future initiatives
To achieve continuous improvement, we will provide
feedback of the response results to suppliers so that they
can understand their strengths and weaknesses in ESG.
Going forward, we will strive to improve the response
rate, while conducting ongoing assessments of suppliers
whose scores are significantly lower than the average.
Moreover, we will progressively work on other initiatives,
including the human rights and environmental due diligenceof primary suppliers.

15.1,15.2

Achieved Traceability at Wood Raw Material Suppliers (FY2022)

Appropriately disclose and protect information

The FY2022 sustainability survey was conducted of 213
suppliers—comprising the suppliers of recovered paper,
pulp, base paper, woodchips, chemicals, and fuels (PKS,
RPF, etc.) that had been surveyed until FY2021, as well as
those supplying fossil fuels and subsidiary materials (filmsubstrates, inks, etc.)—of which 120 suppliers responded.
Set out below are the results of the surveys that wereconducted of a total of 895 suppliers from FY2020 to FY2022.
Number of suppliers that responded to the surveys was 548(rate of response: approx. 61.2%).
The surveys were conducted for eight items listed froman ESG perspective in the form of questionnaire.
The average score of all suppliers calculated by adding thepoints of all eight items including corporate governance, humanrights, and labor was 481 (out of 800), which was about 60%.
The item with a high average score was “labor” at 68, while theone with a low average score was “corporate governance” at
53. In the FY2022 survey, 10 suppliers were rated D and three
rated E. We also conducted a sustainability survey on wood
pulp contained in the base paper purchased (procured by thebase paper manufacturers).

12.1,12.4
12.6

PEFC/31-32-130

These products use woodchips that conform to therequirements of the systems. We have obtained FM
certification*1 for our overseas plantation forest operations
and CoC certification*2 for our production, processing,and distribution operations within the Group. By acquiringcertification throughout the entire process from forests toprocessing mills and distribution, we supply a wide range offorest certified products, from intermediate to finished products
such as copy paper and household paper.
In addition, we have the Forest Certification System
Implementation Committee within the Group to ensure theproper operation and effective use of the forest certification
systems.

CoC
Certification

Customers
Distribution, users,
consumers

Sales, Management,
Logistics*1 FM certification: Confirmation of forest management*2 CoC certification: Confirmation of management on processing anddistribution of produced wood

The Oji Group Integrated Report 2023

102

Financial and Non-financial Data

Financial and Non-financial Highlights

Financial Highlights
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

1,241.5

1,332.5

1,347.3

1,433.6

1,439.9

1,485.9

1,551.0

1,507.6

1,359.0

1,470.2

1,706.6

(%)

16.7

20.3

22.8

27.8

28.2

31.0

32.0

29.9

29.3

33.5

37.6

Operating profit(¥billion)

43.5

57.3

43.9

72.0

70.2

70.8

110.2

106.1

84.8

120.1

84.8

Profit attributable to owners of parent(¥billion)

21.6

31.6

15.5

12.7

40.3

36.2

52.0

58.2

49.6

87.5

56.5

Free cash flows(¥billion)

29.2

42.1

(74.6)

84.8

117.2

49.2

74.0

59.7

35.5

51.0

(105.0)Net D/E ratio(times)

1.4

1.1

1.0

1.0

0.8

0.7

0.7

0.6

0.6

0.7

0.8

Return on equity (ROE)

(%)

4.6

5.9

2.6

2.1

6.7

5.6

7.7

8.5

6.9

10.9

6.3

Capital investment, etc.

(¥billion)

70.1

76.7

80.1

57.4

57.9

69.3

62.1

97.5

98.4

114.0

100.1

(¥)

10.0

10.0

10.0

10.0

10.0

10.0

12.0

14.0

14.0

14.0

16.0

Segment

Net sales(¥billion)

Overseas sales ratio

Dividend per shareNon-financial Highlights

ESG data

https://ojiholdings.disclosure.site/en/themes/116/

Forest certification acquisition rate*1

Greenhouse gas (GHG) emissions*2

Water intake

Lost time injury frequency rate (LTIFR)*2

Japan 100%, Overseas 94%

7,470 kt-CO2e

710 million m3

1.11

Change from end-FY2021 +2 percentage points (overseas)

Change from FY2021 -136 kt-CO2e

Change from FY2021 -4.3 million m3

Change from 2021 +0.14

Company-owned forests in Japan (SGEC (%))
Overseas forest plantations (FSCTM, etc. (%))

100

92

100

94

100

GHG emissions (kt-CO2e)
GHG emissions intensity (t-CO2e/¥million)

100

100
91

92

94

5.05
7,836

5.49

5.07

Water intake (million m3)

7,460

488.6

740

737

519.7

Domestic

7,606

Whole Group

1.29

416.0
706

7,470

Overseas

485.9

5.17

4.38
7,650

477.4

Water intake intensity (m3/¥million)

710

714

1.09

1.08

1.01

1.11
0.97

0.85
0.89

0.88

0.81

0.84

0.86

2021

2022

0.76

0.76
0.67
2018

2019

2020

2021

2022
(fiscal year-end)

2018

2020

2021

2022

2018

Effective waste utilization ratio*1

2020

2022

2021

2018

2019

2020

(FY)

Percentage of female managers*2 (16 Group companies in Japan)(year)

Number of employees (excluding temporary employees)

91.0%

3.6%

37,845

Change from FY2021 -3.2 percentage points

Change from end-FY2021 -0.1 percentage points

Change from end-FY2021 +2,237 (overseas +2,413)

3.75

3.84

Effective waste utilization ratio (%)

Number of female managers

3.67

3.5

3.19
5,660
5,219

5,400

Percentage of female managers

3.6

82

3.6

85

88

84

72
94.8

94.2

93.6

94.0

Overseas36,30919,169

3.1

5,440

3.7

Japan

52.8

Percentage of overseas employees

36,81019,82336,03435,60819,456

19,240

53.9

54.0

54.0

16,987

16,57816,36837,84521,653

57.2

94.2
17,140Financial and Non-financial Data

5,440 thousand kL oile
Change from FY2021 +40 thousand kL oile
Energy consumption (thousand kL oile)
Energy consumption intensity (kL oile/¥million)

5,822

2019

(FY)

Energy consumption*2

3.75

2019

16,192

91.0
2018

2019

2020

2021

2022

2018
(FY)

2019

2020

2021

2022

2018
(FY)

2019

2020

2021

2022
(fiscal year-end)

2018

2019

2020

2021

2022
(fiscal year-end)*1 See P87-88 for calculation method / *2 See P111 for calculation method

103

The Oji Group Integrated Report 2023

The Oji Group Integrated Report 2023

104

Financial and Non-financial Data

Analysis and Evaluation of Management Performance

FY2022 Business Performance
In FY2022, demand recovered following the reopening of economic activities that had stagnated due to the spread of
COVID-19; the pulp market rose; and the Group revised its prices in response to the impact of the recent sharp rise in raw
materials and fuel prices. For these reasons, net sales were1,706.6 billion yen, an increase of 236.5 billion yen (16.1%) year
on year. The overseas sales ratio was 37.6%, an increase of
4.1 points year on year.
Operating profit was 84.8 billion yen, a decrease of 35.3 billion yen (down 29.4%) year on year, due to the significant impact of higher raw materials and fuel prices despite the positive elements such as the price revisions mentioned above
and an increase in sales volume. Ordinary profit was 95.0 billion yen, a decrease of 40.1 billion yen (down 29.7%) year on
year, mainly due to a decrease in exchange gain caused by
the revaluation of foreign currency-denominated receivables
and payables. Profit before income taxes was 84.6 billion yen,a decrease of 44.6 billion yen (down 34.5%) year on year, andprofit attributable to owners of parent was 56.5 billion yen, adecrease of 31.0 billion yen (down 35.5%) year on year.

Financial Position
Cash flows provided by operating activities decreased by 125.3
billion yen year on year to 18.3 billion yen (cash flows provided
by operating activities for FY2021 were 143.6 billion yen). The
main increase in cash was 157.7 billion yen calculated by adding depreciation and amortization to profit before income taxes(195.1 billion yen for FY2021). The main decreases in cash werean increase in trade receivables of 43.9 billion yen (an increaseof 21.0 billion yen for FY2021), an increase in inventories of
42.6 billion yen (an increase of 26.0 billion yen for FY2021), andincome taxes paid of 46.9 billion yen (payment of 22.3 billion
yen for FY2021).
Cash flows used in investing activities were 123.3 billion yen(cash flows used in investing activities for FY2021 were 92.6
billion yen) due in part to payment for acquisition of property,
plant, equipment, and intangible assets. The payment for acquisition of property, plant, equipment, and intangible assets

Financial Data Highlights

included capital investments necessary for reinforcing and renewing capacities, improving quality, saving labor, increasing
productivity, ensuring safety, and conserving the environment.
Cash flows provided by financing activities were 101.8 billion
yen (cash flows used in financing activities for FY2021 were136.0 billion yen) due in part to proceeds from issuance ofcommercial papers.
Total assets at the end of FY2022 stood at 2,296.0 billion
yen, an increase of 242.3 billion yen from the end of the previous fiscal year. The increase was primarily due to increases inproperty, plant and equipment, accounts receivable–trade,
and inventories, along with foreign currency translation differences owing to the further depreciation of the yen. Liabilities
totaled 1,331.5 billion yen, an increase of 153.2 billion yen fromthe end of the previous fiscal year, due in part to an increase
in interest-bearing debts. Net interest-bearing debts (interest-bearing debts minus cash and cash equivalents, etc.)
were 731.3 billion yen, an increase of 136.6 billion yen from theend of the previous fiscal year. Net assets totaled 964.6 billion
yen, an increase of 89.1 billion yen from the end of the previous fiscal year, mainly due to increases in foreign currencytranslation adjustment and retained earnings.

Consolidated Financial Forecasts for FY2023
For our consolidated financial forecasts for FY2023, the Oji
Group anticipates net sales of 1,800.0 billion yen, operating
profit of 100.0 billion yen, ordinary profit of 100.0 billion yen,and profit attributable to owners of parent of 65.0 billion yen.
Our Medium-term Management Plan ending in FY2024 hasentered its second year. We have been facing drastic changes
in the business environment, including sharp rises in raw materials and fuel prices and significant fluctuations in foreign exchange rates. However, we will continue to steadily implement
our “Initiatives for Environmental Issues—Sustainability—,”“Initiatives for Profitability Improvement—Profitability—,” and“Initiatives for Product Development—Green Innovation—” toachieve further growth and evolution, and to enhance our corporate value.

Changes in Assets and Profit/Loss
Segment

Profit per share (¥)

1,550,991

1,507,607

1,358,985

1,470,161

1,706,641

Operating profit(¥ million)

110,212106,125

84,793

120,119

84,818

Ordinary profit(¥ million)

118,370

101,289

83,061

135,100

95,008

Profit attributable to owners of parent(¥ million)

51,97758,181

49,63587,50956,483

Total assets(¥ million)

1,951,369

1,885,280

1,981,438

2,053,752

2,296,018

Net assets(¥ million)

815,406

831,657

865,606

875,470

964,564

Profit per share

(¥)

52.52

58.78

50.13

88.35

57.00

Net assets per share(¥)

684.50699.12758.28859.29945.27

1. Profit per share was calculated by dividing profit attributable to owners of parent by the average number of shares outstanding for the year under review upon subtracting fromit the number of treasury stocks.
2. Net assets per share were calculated by dividing net assets by the number of shares outstanding at the end of the year under review upon subtracting from it the number oftreasury stocks.
3. Numbers less than one million yen are rounded down to the nearest million.

Operating Profit, Ordinary Profit, Profit Attributable to Owners of Parent,
Operating Profit Margin

32.0

1,507.6

1,359.0
29.3

29.9

Operating profit (¥billion)
Ordinary profit (¥billion)
Profit attributable to owners of parent (¥billion)
Operating profit margin (%)

1,470.2

37.6

33.5

758.28699.12684.50110.2

106.1 101.3
87.5

84.8 83.1
58.2

52.0
7.1

7.0

2019

105

The Oji Group Integrated Report 2023

788.3

56.5

49.6

2021

2022

(FY)

2018

535.0

581.7

50.13

2020

650.5

647.7
511.4

497.3

731.3

594.7

8.2

6.2

5.0

2021

2020

2022

(FY)

2018

Cash flows from investing activities (¥billion)

2019

2020

2022

2021

(FY)

Free cash flows (¥billion)2022(105.0)

143.6

127.1
91.6

92.6

66.6

64.8

Cash in Cash out

Cash in Cash out

Cash in Cash out

Cash in Cash out

Cash in Cash out

2018

2019

2020

2021

2022

18.3

6.3
2021

51.0

35.5

59.7

124.5

57.00

8.5

2019

40.8

37.9

36.7

95.0
84.8
620.6

74.0

88.35
10.9

6.9

2020

34.7

120.1

118.4

140.6
58.78

Net interest-bearing debt (¥billion)

41.4
135.1

945.277.7

2019Interest-bearing debt (¥billion)
Equity ratio (%)

859.29

52.52

2018

Interest-Bearing Debts, Net Interest-Bearing Debts, andEquity Ratio

ROE (%)

1,706.6
1,551.0

FY2022Financial and Non-financial Data

Net assets per share (¥)

FY2021

Changes in Cash Flows

Net Assets per Share, Profit per Share, and ROE

Overseas sales ratio (%)

FY2020(¥ million)

Cash flows from operating activities (¥billion)
Net sales (¥billion)

FY2019Net sales

2018

Net Sales and Overseas Sales Ratio

FY2018

123.3
(FY)

(FY)

The Oji Group Integrated Report 2023

106

Financial and Non-financial Data

Financial Data Highlights

Consolidated Financial Statement

Status of Individual Segments (FY2022)

Consolidated Balance Sheet

Segment

Household and Industrial Materials(¥ million)

Functional Materials(¥ million)

Forest Resources andEnvironment Marketing Business(¥ million)

Printing and Communications Media(¥ million)

Other(¥ million)

Subtotal(¥ million)

Adjustments(¥ million)

Total(¥ million)

Net sales

Operating profit

780,527(1,234)

219,902

15,487423,801

68,530280,980(4,779)318,130

8,448

2,023,342

86,451(316,700)(1,632)

1,706,641

84,818Forest Resources and Environment Marketing Business

10.9

40.2

20.9

10.6

18.4

13.9

15.7

14.1

16.7

Notes receivable–trade60,22764,768Notes and accounts payable-trade234,650

251,176

Accounts receivable–trade

Short-term loans payable

166,445

226,739−

86,000Accounts payable-other

24,653

20,111

260,231309,604

Contract assets

3,983

2,995

Short-term securities

11,074

6,299

Merchandise and ﬁnished goods

98,616

117,473

Work in process

20,294

23,510Accrued expenses

51,45749,809

Income taxes payable

23,993

16,643

Other

31,81836,591

Total current liabilities

533,020

687,070

Bonds

155,000

155,000

Long-term loans payable

329,062

320,599

Raw materials and supplies

106,266

140,337

Short-term loans receivable

4,764

4,101

Accounts receivable-other

18,57533,877

Other

18,80036,717

Allowance for doubtful accounts
Total current assets(1.4)

FY2021

(5.5)

17.9

21.5

79.2

12.5

45.5

9.8

14.6

5.9

Net sales and operating profit composition by business segment were calculated excluding adjustments (adjustments for internal transactions, etc.).

Deferred tax liabilities

64,01369,283

Accumulated depreciation(513,533)(529,962)

Deferred tax liabilities for land revaluation

7,737

7,732

Buildings and structures (Net)

196,448

216,045

Machinery, equipment and vehicles

2,495,207

2,629,592

Net deﬁned beneﬁt liability

54,02253,537

Accumulated depreciation(2,156,261)(2,221,722)

Long-term deposits received

6,809

6,620

338,946

407,869

Other

28,616

31,609Tools, furniture and ﬁxtures

61,622

63,934

Accumulated depreciation(56,037)(57,380)

Total non-current liabilities

645,261

644,383

5,585

6,553

1,178,282

1,331,453

Common stock

103,880

103,880

Total liabilities
NET ASSETS

Land

240,765

242,287

Forests

116,490

133,123

Plantations

92,343111,352

Leased assets

65,35676,573(22,713)(29,209)

Capital surplus

99,16385,892Retained earnings

567,150

607,593

Treasury stock(13,277)(12,949)

Total shareholders’ equity

756,918

784,418

Leased assets (Net)42,64347,363

Construction in progress

94,091

43,6391,127,315

1,208,234

Shareholders’ equity

Goodwill

3,472

11,868

Accumulated other comprehensive income

Other

8,079

14,119Valuation difference on available-for-sale securities

30,50041,573

Total intangible assets

11,552

25,988Deferred gains(losses) on hedges

2,076

474

168,545

180,067

Revaluation reserve for land

5,728

5,716

Foreign currency translation adjustment

29,59385,253Remeasurements of deﬁned beneﬁt plans

26,415

19,514

Total accumulated other comprehensive income

94,314

152,531

Investments and other assets
Investment securities
Long-term loans receivable

5,571

4,693

Long-term prepaid expenses

3,497

2,760

Net deﬁned beneﬁt asset

61,542

53,837

Deferred tax assets

8,819

6,816

Other

22,09526,921

Share acquisition rights

157

134

Non-controlling interests

24,08027,480Total net assets

875,470

964,564

2,053,752

2,296,018

Total investments and other assets
Total assets

The Oji Group Integrated Report 2023

Non-current liabilities

746,007

Total non-current assets

107(1,791)
788,670

709,982

Allowance for doubtful accounts†(1,790)645,795

Commercial paper(982)(1,972)

269,089

273,124

1,407,956

1,507,347

2,053,752

2,296,018

Total liabilities and net assets

The Oji Group Integrated Report 2023

Financial and Non-financial Data

Forest Resources and Environment Marketing BusinessCurrent liabilities

50,774

Intangible assets

Operating Profit Composition by Business Segment

FY2022(March 31, 2023)

44,749Total property, plant and equipment

Functional Materials
Other (%)

(March 31, 2022)

Cash and deposits

Accumulated depreciation

Household and Industrial Materials
Printing and Communications Media(March 31, 2023)

LIABILITIES

Tools, furniture and ﬁxtures (Net)FY2021(March 31, 2022)

Current assets

Machinery, equipment and vehicles (Net)38.6

Current
consolidated
fiscal year

Property, plant and equipment

Net Sales Composition by Business Segment

FY2022Previous
consolidated
fiscal year

ASSETS

Buildings and structures

Functional Materials
Other (%)

Current
consolidated
fiscal year

Non-current assets

1. Adjustment amount is mainly the adjustment concerning internal transaction.
2. Numbers less than one million yen are rounded down to the nearest million.

Household and Industrial Materials
Printing and Communications Media(¥ million)

Previous
consolidated
fiscal year

108

Financial and Non-financial Data

Consolidated Financial Statements

Consolidated Statement of Income(¥ million)

Previous consolidated fiscal year
⎛ From April 1, 2021 ⎞⎜⎜⎝ To March 31, 2022 ⎠Current consolidated fiscal year
⎛ From April 1, 2022 ⎞⎜⎜⎝ To March 31, 2023 ⎠(¥ million)

Previous
consolidated
fiscal year

Current
consolidated
fiscal year

Previous
consolidated
fiscal year

Current
consolidated
fiscal year

Net increase (decrease) in short-termloans payable(23,001)

33,31086,000⎛ From April 1, 2021 ⎞⎛ From April 1, 2022 ⎞⎜⎜⎜⎜⎝ To March 31, 2022 ⎠⎝ To March 31, 2023 ⎠⎛ From April 1, 2021 ⎞⎛ From April 1, 2022 ⎞⎜⎜⎜⎜⎝ To March 31, 2022⎠⎝ To March 31, 2023 ⎠Net sales

1,470,161

1,706,641

Cost of sales

1,126,207

1,366,642

Cash flows from operating activities

339,999

Proﬁt before income taxes

129,262

84,617

Depreciation and amortization

65,88573,034804

1,058

Net increase (decrease) in commercial
paper

—

6,995

7,895

Proceeds from long-term loans payable

26,00364,655

Repayment of long-term loans payable(5,218)(59,881)

Purchase of treasury shares of subsidiaries(77,000)—

Repayments of lease obligations(6,952)(6,618)Dividends paid

(13,889)(14,883)

Payment from changes in ownershipinterests in subsidiaries that do not
result in change in scope of consolidation(35,059)

(307)

(883)

(487)

(136,002)

101,787

Effect of exchange rate change on cash
and cash equivalents

4,691

4,637

Net increase (decrease) in cash andcash equivalents(80,291)

1,413

Cash and cash equivalents at the beginningof the year

135,669

55,474

Increase in cash and cash equivalents
resulting from mergers of subsidiaries

115—

Decrease in cash and cash equivalents
resulting from exclusion of subsidiaries fromconsolidation

(20)

(50)

55,47456,837Gross profit

343,954

Selling, general and administrative expenses
Freight expenses

112,417

135,135

Amortization of goodwill

Cash Flows from ﬁnancing activities

Warehouse expenses

6,771

6,747

Depletion of standing timber

Salaries and wages

52,957

55,10531

911

Retirement benefit expenses

(241)

695

Increase (decrease) in allowance for
doubtful accounts

Depreciation and amortization

5,624

6,080

(Increase) decrease in net deﬁned
beneﬁt asset(3,498)(3,240)Other

46,306

51,417

Total selling, general and administrative expenses

223,834

255,181

Increase (decrease) in net deﬁned
beneﬁt liability(60)(1,415)120,119

84,818Interest income

883

1,367

Dividends income

3,269

3,632

Exchange gains

15,4048,337

Equity in earnings of affiliates

2,679

Gain on valuation of derivatives

1,367

Operating profit
Non-operating income

Interest and dividend income(4,152)(5,000)Interest expenses

6,692

6,310

Exchange loss (gain)(12,626)(6,911)Equity in (earnings) losses of afﬁliates(2,679)(2,924)282(1,052)

2,924

Loss (gain) on return of assets fromretirement beneﬁts trust(1,049)—2,838

Loss on disposal of non-current assets

2,283

3,159

Loss (gain) on sale of investment securities

Other

6,777

6,325

Business restructuring expenses

1,869

1,909

Total non-operating income

30,381

25,427(Increase) decrease in trade receivables(20,960)(43,889)(Increase) decrease in inventories(26,001)(42,615)

Non-operating expenses
Interest expenses

6,692

6,310

Increase (decrease) in trade payables

33,937

9,533

Other

8,708

8,925

Other

(10,243)(18,740)

Total non-operating expenses

15,401

15,236

Subtotal

166,771

62,642

135,100

95,008Interest and dividend income received

4,962

7,731

Interest paid

(5,805)(5,169)Insurance claim income

904

4,992

Income taxes paid

(22,341)(46,940)

Gain on sale of investment securities

651

1,065

Net cash provided by operating activities

143,587

18,262Gain on return of assets from retirement benefits trust

1,049

−

Other

2,300

270

Total extraordinary income

4,906

6,327

Payment for acquisition of property,
plant, equipment and intangible assets(98,659)(94,109)

Proceeds from sales of property,
plant, equipment and intangible assets

2,905

555

Payment for acquisition of investment
securities(1,308)(1,747)

Proceeds from sales and redemption of
investment securities

4,967

3,404

Ordinary profit
Extraordinary income

Extraordinary loss
2,007

7,634

Loss on disposal of non-current assets

2,283

3,159

Business restructuring expenses

1,869

1,909

−

1,839

4,584

2,175

Total extraordinary losses

10,745

16,718

Profit before income taxes

129,262

84,617

Income taxes-current

37,47626,434

Income taxes-deferred

(614)

41

Total income taxes

36,861

26,476

Profit92,40058,141

Other

Profit attributable to non-controlling interests

4,890

1,657

Profit attributable to owners of parent

87,50956,483The Oji Group Integrated Report 2023

Other
Net cash provided by (used in) ﬁnancing
activities

Cash and cash equivalents at the end of
the year

Cash flows from investing activities

Payment for loans receivable

(546)

(911)

Proceeds from collection of loans receivable

1,640

2,484

Payment from changes in ownershipinterests in subsidiaries that result inchange of scope of consolidation(1,441)(32,864)

(125)

(85)

(92,567)(123,274)

Other
Net cash used in investing activities

Financial and Non-financial Data

Loss on disaster

Provision for loss on litigation

109

Consolidated Statement of Cash Flows

The Oji Group Integrated Report 2023

110

Financial and Non-financial Data

Third-Party Independent Assurance Report

A star mark indicates that FY2022 figures have been assured by KPMG AZSA Sustainability Co., Ltd.
Environmental Data
Aggregation period: Japan: April 1 through March 31 of each fiscal year / overseas: January 1 through December 31 of each fiscal year
(April 1 through March 31 for India and Myanmar)
Boundary of data aggregation: Consolidated subsidiaries in Japan and overseas, excluding nonproduction sites(see note for VOC emissions)Greenhouse gas (GHG) / Energy consumption

Greenhouse gas emissions (Scope 1 + Scope 2)*1
Scope 1
Scope 2
Scope 3 Purchased goods and services*2
Implied reduction in greenhouse gas emissions by FIT electric power sales*3
Energy consumption (crude oil conversion)*4(kt-CO2e)(kt-CO2e)(kt-CO2e)(kt-CO2e)(1,000 kL)

FY2020
7,460
6,267
1,193
3,430

FY2021
7,606
6,398
1,208
3,663

5,822

5,660

5,219

5,400

FY20227,470*5
6,399*5
1,071*5, *6
3,670*5480
5,440*5under the Feed-in Tariff (FIT) scheme for renewable energy indirectly reduces the CO2
emissions associated with electric power users.
Implied reduction = amount of FIT electric power sales x national average emission
factor
FIT electric power sales: The amount of electricity from biomass, hydroelectric, andsolar power generation sold under the FIT scheme by Group companies in Japan
National average emission factor: An emission factor used in the calculation of theequivalent amount of CO2 reduced by using non-fossil electric power under thegreenhouse gas emissions calculation, reporting, and disclosure system*4 Energy consumption: Energy consumption in conjunction with the manufacture of
products is calculated excluding the following energy use.
Consumption relating to the electric power business (supply of electricity or heat toother parties) and transport by Group-owned vehicles is excluded.
Energy relating to the supply of electric power or heat to other parties is excluded
from fossil fuel and non-fossil fuel derived energy.
The sources of unit calorific values are the following laws and international standards.
Japan: Act on Rationalizing Energy Use and Shifting to Non-fossil Energy and Act
on Promotion of Global Warming Countermeasures
Overseas: IPCC 2006 Guidelines for National Greenhouse Gas Inventories
For comparability with the reduction targets, the unit calorific values for non-fossil fuels are the same as those used for FY2018.
*5 For sites that had trouble in collecting data due to natural disasters, FY2022 data
are estimates calculated using production volumes and actual FY2019-2021 data.
*6 For some overseas sites, calculated emissions decreased by 92 kt-CO2e as theemissions factors of purchased steam were adjusted according to actual situations.

FY20182,875
523

Environmental impacts
(kt)
(t)

FY20192,757
481

FY20202,733
227

FY2021
2,772
232

FY2022
2,989 *5
182

Register (PRTR) law have been included.
Of the substances subject to PRTR law, those corresponding to the 100 types of
VOC indicated by the Ministry of the Environment based on the Air Pollution
Control Act have been included.

*7 Industrial waste generation
The volume of waste generated includes valuable materials (general waste is
not included).
*8 VOC emissions
Domestic Group companies subject to Japanese Pollutant Release and Transfer

FY2019736,684
701,024

FY2020706,298
671,965

FY2021
714,281675,849

FY2022709,966 *5
672,780 *5(%)

FY2018
0.89
0.76
1.01
3.1

FY2019
0.88
0.67
1.08
3.5

FY2020
0.81
0.76
0.85
3.6

FY2021
0.97
0.84
1.09
3.7

FY2022
1.11
0.86
1.29
3.6

(%)

2.17

2.27

2.31

2.35

2.51

1.91

2.01

2.04

2.10

2.20

(1,000 m3)
3

Social Data
Occupational safety / Diversity

Whole GroupJapan
Overseas
Percentage of female managers*10 16 companies in Japan
Employment rate of people with Six applicable Groupdisabilities*11
companies in Japan

Lost time injury frequency rate
(LTIFR)*9

81 companies in Japan(%)*9 Aggregation period: From January 1 to December 31
Boundary of data aggregation: Oji Holdings Corporation and its consolidated
subsidiaries
LTIFR = (the number of lost time injuries ÷ total working hours) × 1,000,000
Until 2021, total working hours were calculated based on the number of Group
company employees (regular employees and temporary/non-regular employees)
as of the end of September, assuming the annual working hours per person is
2,000 hours. Beginning in 2022, actual total working hours until the end of December as reported by the companies have been used. Calculated using the method
used up to 2021, LTIFR for FY2022 would be 1.25, 0.98, and 1.46 for whole Group,Japan, and overseas, respectively.
*10 Aggregation date: March 31 of each fiscal year / Boundary of data aggregation:
16 Group companies in Japan (with 301 or more employees at the beginning of
aggregation in September 2015)

ESG data

111

Percentage of female managers = Number of female managers ÷ Number of all managers*11 Aggregation date: June 1 after each fiscal year
Boundary of data aggregation:· Six applicable Group companies in Japan: Oji Holdings, Oji Nepia, Oji Imaging
Media, Oji Paper, Oji Management Office, and Oji Clean Mate
· Eighty-one companies in Japan: Eighty-one companies in Japan that have atleast 43.5 employees and are required to hire at least one person with disabilities
under the FY2023 statutory employment rate of 2.3% (including the six applicableGroup companies)
Employment rate of people with disabilities (actual employment rate) = Number ofregular workers with physical or intellectual impairments or with mental illness ÷
Number of all regular workers(Workers with short working hours are counted as 0.5 workers and persons withsevere disabilities are counted as two persons.)

To the Representative Director of the Board, President and Group CEO of Oji Holdings Corporation
We were engaged by Oji Holdings Corporation (the “Company”) to undertake a limited assurance engagementof the environmental and social performance indicators marked with (the “Indicators”) for the period from April
1, 2022 to March 31, 2023, except for the lost time injury frequency rate, which is for the period from January
1, 2022 to December 31, 2022, and for the employment rate of people with disabilities, which is as of June 1,
2023 included in its Oji Group Integrated Report 2023 (the “Report”) for the fiscal year ended March 31, 2023.
The Company’s Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the“Company’s reporting criteria”), as described in the Report.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures wehave performed. We conducted our engagement in accordance with the ‘International Standard on Assurance
Engagements (ISAE) 3000, Assurance Engagements other than Audits or Reviews of Historical Financial
Information’ and the ‘ISAE 3410, Assurance Engagements on Greenhouse Gas Statements’ issued by theInternational Auditing and Assurance Standards Board. The limited assurance engagement consisted of making
inquiries, primarily of persons responsible for the preparation of information presented in the Report, and applying
analytical and other procedures, and the procedures performed vary in nature from, and are less in extent thanfor, a reasonable assurance engagement. The level of assurance provided is thus not as high as that provided bya reasonable assurance engagement. Our assurance procedures included:Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing theReport and reviewing the Company’s reporting criteria.
Inquiring about the design of the systems and methods used to collect and process the Indicators.
Performing analytical procedures on the Indicators.
Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators
in conformity with the Company’s reporting criteria, and recalculating the Indicators.
Visiting the Oita Mill of Oji Materia Co., Ltd. selected on the basis of a risk analysis.
Evaluating the overall presentation of the Indicators.
Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes us
to believe that the Indicators in the Report are not prepared, in all material respects, in accordance with theCompany’s reporting criteria as described in the Report.
Our Independence and Quality Management
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics
Standards Board for Accountants, which includes independence and other requirements founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
In accordance with International Standard on Quality Management 1, we design, implement and operate asystem of quality management including policies or procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements.
/s/ Kazuhiko Saito
Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
October 17, 2023

Financial and Non-financial Data

(1,000 m )FY2018740,398
708,494

Water intake and wastewater

Water intake
Wastewater

FY2019
7,650
6,323
1,327
3,766

(kt-CO2e)*1 Greenhouse gas (GHG)
Scope 1 calculation
Japan: Calculated in accordance with Act on Rationalizing Energy Use and Shifting
to Non-fossil Energy (Energy Conservation Act) and Act on Promotion of Global
Warming Countermeasures (Global Warming Act)· Emissions relating to the electric power business (supply of electricity or heat toother companies) and transport by Group-owned vehicles are included.
· CO2 emissions from the use of purchased fuels made from waste are excluded.
Overseas: Calculated based on the Greenhouse Gas Protocol Initiative· Greenhouse gas (GHG) emissions from simply burning waste are excluded.
· Greenhouse gas (GHG) emissions from waste disposal and wastewater treatment
are excluded.
· Non-energy greenhouse gas (GHG) emissions resulting from quicklime production(lime kiln) are excluded.
Scope 2 calculation
Japan: Basic emissions factors of individual electric power companies publishedby the Ministry of the Environment and the Ministry of Economy, Trade and Industry
Overseas: IEA-published CO2 emission factors by country in 2010
*2 Scope 3 Purchased goods and services: Emissions associated with activities up to
the point when materials/components, materials related to purchased goods andsale, etc. are manufactured. For emission intensities, we have referred to the“Emission intensity database for calculation of GHG emissions by organizations
throughout the supply chain (ver. 3.2)” and the “CO2 equivalents common intensity
database (ver. 4.0).”*3 Implied reduction in greenhouse gas emissions by FIT electric power sales
The amount of reduction is estimated based on the premise that electric power saleIndustrial waste generation*7
VOC emissions*8

FY2018
7,836
6,394
1,442
3,923

Independent Assurance Report

Notes to the Reader of Independent Assurance Report: This is a copy of the Independent Assurance Report andthe original copies are kept separately by the Company and KPMG AZSA Sustainability Co., Ltd.

https://ojiholdings.disclosure.site/en/themes/116/

The Oji Group Integrated Report 2023

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112

A Year at theOji Group

Financial and Non-financial Data

Corporate Data / Stock Information / Evaluation from Society

Company Profile (as of March 31, 2023)

Stock Information (as of March 31, 2023)

Company name
Director of the Board, President

Listing stock exchange
Securities Identiﬁcation CodeShare register manager andaccount administration authority
for special accounts

Headquarters address
Start of businessCorporate establishment
Capital
Total number of authorized shares
Total number of issued shares(treasury stocks included in the total)
Number of shareholders
Number of employees of theconsolidated GroupOji Holdings Corporation
Hiroyuki Isono
7-5, Ginza 4-chome, Chuo-ku, Tokyo
104-0061 Japan
February 12, 1873
August 1, 1949
¥103,880 million
2,400,000,000 shares
1,014,381,817 share(21,423,438 shares)
85,662

Mailing address
Toll-free telephone number

Launched “nepia Hana-Celeb facial towel.”
(P50)

March
March

Tokyo Stock Exchange
3861
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku,
Tokyo Japan
Transfer Agency Department, Sumitomo
Mitsui Trust Bank, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo
168-0063 Japan+81-120-782-031

Announced the renewal of “nepia Yasashii
Genki!” (launched in April 2023)©Yanase/F·T·N

2023

37,845

Principal Shareholders (as of March 31, 2023)
Name of shareholder
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account 4)
Sumitomo Mitsui Banking Corporation
Nippon Life Insurance Company
Mizuho Bank, Ltd.
STATE STREET BANK AND TRUST COMPANY 505001
Oji Group Employee Stock-holding Association
The Norinchukin BankSTATE STREET BANK WEST CLIENT - TREATY 505234

Treasury stocks

Shares held(Thousands)
147,974
68,241
34,22831,66825,65821,636
20,507
20,422
16,65415,153

Percentage of total
shares issued
14.9
6.9
3.4
3.2
2.6
2.2
2.1
2.1
1.7
1.5

1. The Company holds treasury stock of 21,423 thousand shares, which is excluded from the above list.
2. The percentage of total shares issued has been calculated after excluding the Company’s treasury stock(21,423 thousand shares).
3. Numbers less than one thousand are rounded down to the nearest thousand.

Financial institutions /Securities companies

2.1%

Oji Container established and relocated a corrugated container plant and started operation. (P47)

February

January

46.5%

Other domestic
corporations
8.8%

December
Distribution of
Shareholders(as of March 31, 2023)

Announced a plan to acquire IPI, a company that manufactures and sells liquid packaging cartons and filling machines.
Individualand others
19.1%

Marked 150th anniversaryof the Oji Group on
February 12.

Foreigninvestors
23.5%

September

FTSE Blossom Japan Index*
FTSE4Good Index Series

GSPP started operation of new corrugated container plant. (P47)

October

Evaluation from Society
Oji has been selected for the FTSE Blossom Japan Index, an ESG index by FTSE Russell, since September 2019. (Scope: Oji Holdings)

November

Opened OJI GROUP FUJI TRAINING CENTER. (P98)

Oji has been selected for the FTSE4Good Index Series, an ESG index established by FTSE Russell, since September 2019. (Scope: Oji Holdings)

FTSE Blossom Japan Sector Relative Index*

AugustOji has been selected for the FTSE Blossom Japan Sector Relative Index, an ESG index established by FTSE Russell, since April 2022.
(Scope: Oji Holdings)

SOMPO Sustainability Index

Oji has been selected since June 2019 for the SOMPO Sustainability Index, which is used for SOMPO Sustainable Investment, an investment
product of SOMPO Asset Management Co., Ltd. (Scope: Oji Holdings)

July

S&P/JPX Carbon Efficient Index*

Oji has been selected for S&P/JPX Carbon Efficient Index since September 2018. Constituents of the index are selected with a focus oncompanies’ disclosure of environmental information and carbon emissions per net sales. (Scope: Oji Holdings)

Dow Jones Sustainability Asia Pacific Index

Oji has been selected since November 2020 as a constituent of the Dow Jones Sustainability Asia Pacific Index, one of the Dow Jones
Sustainability Indices (DJSI) selecting companies based on their outstanding performance on sustainability issues.

Oji Green Energy Tokushima started
operation of biomass power plant inTokushima Prefecture. (P58)

Ojitex (Vietnam) Co., Ltd.
started operation of new
corrugated container
plant. (P46)

June

Oji has been selected since June 2017 for MSCI Japan Empowering Women (WIN) Index, an ESG index established by MSCI Inc. (Scope:
Oji Holdings)

Acquired Adampak Pte. Ltd., a highperformance label printing and converting company. (P53)

May“Eruboshi” certification received under the Act on Promotion of Women’s Participation and Advancementin the Workplace
On December 21, 2017, Oji was granted “Eruboshi” (Grade 3, the top grade) company certification by the Minister of Health, Labour andWelfare in recognition of its efforts to promote women’s participation and career advancement. (Scope: Oji Holdings)

April2023 Certified Health and Productivity Management Organization Recognition Program

On March 8, 2023, Oji was recognized under the 2023 Certified Health and Productivity Management Organization Recognition Program(Large Enterprise Category), administered jointly by the Ministry of Economy, Trade and Industry (METI) and the Nippon Kenko Kaigi. (Scope:
Oji Holdings and Oji Management Office)CDP

In December 2022, Oji was recognized for its sustainable forest management by global environmental non-profit CDP, earning an “A” scorein Forest (Timber). (Scope: Oji Holdings)

ESG Finance Awards JapanIn February 2023, Oji was selected as an Environmentally Sustainable Company in the Environmentally Sustainable Company Category at the
fourth ESG Finance Awards Japan. (Scope: Oji Holdings)*An ESG index selected by the Government Pension Investment Fund (GPIF).

113

The Oji Group Integrated Report 2023

2022

Announced
Medium-termManagement Plan,
Long-term Vision,and Purpose.

Financial and Non-financial Data

MSCI Japan Empowering Women (WIN) Index*

Development of Eco-friendly Cup Base Paper Ready for Material Recycling. (P40)

The Oji Group Integrated Report 2023

114

Public Relations and Investor Relations Dept.,
Corporate Governance Div.
7-5, Ginza 4-chome, Chuo-ku, Tokyo
104-0061 Japan
https://www.ojiholdings.co.jp/english/
Issued in October 2023