Advantest : Sustainability Data Book

Sustainability Data Book 2023

Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

Contents

Contents ………………………………………………………………………………………………………………… 2

Editorial Note ………………………………………………………………………………………………………… 3

Advantest's Sustainability …………………………………………………………………………… 4

Message from Advantest's Director of Sustainable Management … ……………………………………………	5
Advantest's Sustainability Journey … ……………………………………………………………………………………	6
Materialities and the ESG Action Plan …………………………………………………………………………………	7

Basic Policy and System for Promoting ESG Initiatives …………………………………………………………… 11

Our Activities in FY2022 ………………………………………………………………………………………………… 12

Stakeholder Engagement … ……………………………………………………………………………………………… 15

Involvement with External Initiatives … ………………………………………………………………………………… 17

External Recognition ………………………………………………………………………………………………………… 20

Environment ………………………………………………………………………………………………………… 23

Mitigation of Climate Change (Prevention of Global Warming) ………………………………………………… 24

Approach to Climate Change… ……………………………………………………………………………………… 24

Environmental Management………………………………………………………………………………………… 25

Environmental Policies… ……………………………………………………………………………………………… 27

Environmental Education (ESG Education)………………………………………………………………………… 27

Climate Change Initiatives in Our Business Activities … …………………………………………………………… 30

Green Products…………………………………………………………………………………………………………… 30

Product Recycling… …………………………………………………………………………………………………… 31

Initiatives to Address Supply Chain Emissions…………………………………………………………………… 32

Recycling Resources… ………………………………………………………………………………………………… 35

Initiatives on Environmental Risk Management … …………………………………………………………………… 36

Management of Legal Compliance Regarding Environmental Impacts… ………………………………… 36

Management of Chemical Substances……………………………………………………………………………… 37

Involving Our Business Partners……………………………………………………………………………………… 40

Compliance with the Laws and Regulations in Each Country… ……………………………………………… 41

Environmental Communication …………………………………………………………………………………………… 43

Environmental Initiatives… …………………………………………………………………………………………… 43

Initiatives for Biodiversity……………………………………………………………………………………………… 44

Biotope…………………………………………………………………………………………………………………… 46

Society ……………………………………………………………………………………………………………………… 48

Employment and Diversity … ……………………………………………………………………………………………… 49

Human Resources Basic Philosophy………………………………………………………………………………… 49

Efforts to Promote Diversity… ……………………………………………………………………………………… 49

Employment Data………………………………………………………………………………………………………… 52

Supporting Diverse Working Styles ……………………………………………………………………………………… 56

Initiatives for Work-Life Balance……………………………………………………………………………………… 56

Creating a Workplace with Higher Job Satisfaction… ………………………………………………………… 59

Employee Engagement… ……………………………………………………………………………………………… 61

Human Resources Development, Fair Evaluation and Treatment ………………………………………………… 63

Policies Regarding Human Capital…………………………………………………………………………………… 63

Efforts to Develop Human Resources……………………………………………………………………………… 64

Fair Evaluation and Treatment……………………………………………………………………………………… 68

Employee Health and Safety ……………………………………………………………………………………………… 69

Promotion of Health and Productivity Management… ………………………………………………………… 69

Promotion of Occupational Health and Safety…………………………………………………………………… 71

Respecting and Protecting Human Rights … ………………………………………………………………………… 73

Human Rights Policy… ………………………………………………………………………………………………… 73

Efforts in the Workplace… …………………………………………………………………………………………… 74

Community Activities … …………………………………………………………………………………………………… 76

Taking Responsibility for Our Products ………………………………………………………………………………… 80

Supporting Product Safety and Quality… ………………………………………………………………………… 80

Efforts to Improve Customer Satisfaction………………………………………………………………………… 82

Innovation Initiatives… ………………………………………………………………………………………………… 85

Intellectual Property Protection ………………………………………………………………………………………… 88

Supply Chain Management ………………………………………………………………………………………………… 89

Governance … ………………………………………………………………………………………………………… 93

Corporate Governance ……………………………………………………………………………………………………… 94

Management Structure………………………………………………………………………………………………… 94

Executive Compensation System… ……………………………………………………………………………… 102

Internal Control System……………………………………………………………………………………………… 104

Risk Management … ……………………………………………………………………………………………………… 105

Risk Management System………………………………………………………………………………………… 105

TCFD-based Climate Change-related Information Disclosure……………………………………………… 106

Business Continuity Initiatives……………………………………………………………………………………… 109

Compliance … ……………………………………………………………………………………………………………… 111

Initiatives to Promote Ethical Business Practices……………………………………………………………… 111

Export Control… ……………………………………………………………………………………………………… 113

Tax Compliance………………………………………………………………………………………………………… 114

Information Security… …………………………………………………………………………………………………… 115

ESG Data … ……………………………………………………………………………………………………………… 117

Material Flow………………………………………………………………………………………………………………… 118

Data Collection … ………………………………………………………………………………………………………… 119

Environmental Data…………………………………………………………………………………………………… 119

Social Data … ………………………………………………………………………………………………………… 126

Governance Data … ………………………………………………………………………………………………… 134

Approach to Data Aggregation and Third-Party Verification …………………………………………………… 136

Approach to and Methods for Environmental Data Collection… ………………………………………… 136

Third-Party Assurance… …………………………………………………………………………………………… 138

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Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

Editorial Note

Advantest aspires to help realize a safe, secure, and comfortable society and sustainable future as well as to solve social issues by enhancing our semiconductor testing business while expanding our business into peripheral business areas. Just as the value of our semiconductor testing is hard to see, it is harder to discern what the value of non-financial information is. Precisely because of its uncertainty, we strive to disclose information on our approach and initiatives for E (environment), S (society), and G (governance) in our second mid-term management plan (2021 to 2023) that is easy for our stakeholders to understand and access.

Our Sustainability website shares our approach and initiatives for sustainability from an ESG perspective along with detailed performance data. It is updated as necessary with the aim of disclosing information on sustainability in a comprehensive and prompt manner.

The "Sustainability Data Book" is an annual report of information on our Sustainability Website as of the end of August, published every year in PDF format. In this data book and our website, we refer to the GRI standards along with other guidelines to offer a more comprehensive summary of our activities. Regarding climate changes, we are disclosing information in accordance with the "Task Force on Climate-related Financial Disclosures (TCFD)" since FY2021.

Relationship with the Integrated Annual Report

Advantest positions our "Integrated Annual Report" as a "One-stop Handbook" for disclosing our corporate value from financial and non-financial perspectives. The Sustainability Data Book is an appendix to the Integrated Annual Report, compiled with the aim of providing a comprehensive and detailed report on information related to ESG.

About information disclosure

Scope of the Sustainability Data Book

Period covered	April 1, 2022 to March 31, 2023
Initiatives and activities before the period covered as well as those up to August
	2023 are also included to aid in content comprehension.
Target organizations	Advantest Corporation and its major domestic and overseas consolidated
subsidiaries
Issuance	Issued in October 2023 as an annual report (The next issue is scheduled to be
released in October 2024)

Guidelines Referenced

・GRI Standards

・SASB Standards

・ISO26000 Guidelines

・Ten Principles of the United Nations Global Compact

・Ministry of the Environment of Japan, "Environmental Reporting Guidelines 2018"

Third-party Assurance

Third-party assurance has been obtained from Ernst & Young ShinNihon LLC to ensure increased reliability of selected social and environmental performance indicators in FY2023 included in the ESG Data on our website.

Contact Information

For inquiries related to sustainability Sustainability Promotion Office

・Send comments by email to: [e-mail]

・Send comments by fax to: [phone]

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Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

Advantest's Sustainability

Message from Advantest's Director of Sustainable Management … …………… 5

Advantest's Sustainability Journey … …………………………………………………… 6

Materialities and the ESG Action Plan …………………………………………………… 7

Basic Policy and System for Promoting ESG Initiatives … ……………………… 11

Our Activities in FY2022 ………………………………………………………………… 12

Stakeholder Engagement ………………………………………………………………… 15

Involvement with External Initiatives …………………………………………………… 17

External Recognition … …………………………………………………………………… 20

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Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

Message from Advantest's Director of Sustainable Management

Messages from the director of sustainable management regarding social safety, security, and sustainability.

Towards a "safe, secure, and comfortable society"

The global economy in 2023 shows concerns of recession, which is increasing due to monetary tightening and soaring energy prices in major developed countries in Europe, the U.S., and Asian countries. In addition, the slowdown in growth due to the impact of COVID-19 pandemic and the tense situation in Ukraine, which continued last year, has acted as a drag on economic activity, while sluggishness and financial risks are also heightening in emerging developing countries and regions. Therefore, it is essential to implement reforms to curb inflation and implement macroeconomic and financial stabilization policies at the national level, especially in major countries, to establish a strong and sustainable economic foundation beyond 2024. In addition, the challenges

confronting humanity, such as decarbonization and reduction of air pollutants in response to climate change and global environmental issues, preservation of biodiversity, and labor market mobility in response to the declining birthrate and aging population, are becoming increasingly serious with each passing year. In light of this economic and social environment, we are striving to maximize customer satisfaction by accurately grasping customer needs and providing solutions in our core semiconductor test equipment business through fair and prudent corporate activities, all while improving our corporate value by ensuring sustainable management that emphasizes the aspects of "Environment", "Social", and "Governance".

The following are our ESG initiatives from the Second Mid-Term Management Plan (MTP2), which was formulated and launched in FY2021. As for the "E," the environmental aspect of ESG, together with setting goals focusing on key issues such as greenhouse gas reduction, introduction of renewable energy, shortening production time by optimizing production processes, strengthening development and sales of green products, and initiatives addressing resource recycling and biodiversity, we have also evaluated and improved our KPIs. As for the "S," the social aspect of ESG, we enhanced our activities concerning human rights and occupational health and safety, conflict minerals elimination, respecting and observing fair trade practices and procurement policies aiming for increased transparency and reliability of the entire supply chain as a means to fulfill our corporate social responsibilities. In addition, as global human resource measures, we are making efforts to promote diversity, instilling human rights policies and strengthening relevant education, and enhancing employee engagement. Also, for our customers, we strive to improve customer satisfaction. As initiatives for the "G," or governance aspect, our board had frequent discussions based on business strategy briefings, considered how to increase its efficiency and effectiveness, conducted succession planning in detail, and discussed further penetration of the Advantest Way to our employees worldwide. We are also working to reinforce our compliance and risk management systems.

On the other hand, innovations in the areas of digital infrastructure such as communication networks and data centers represented by rapid changes in technology, and the evolution of semiconductors used in a variety of electronic devices lay at the core, spurring the acceleration of digital transformation in the world we live in. Advantest delivers safety, security, and comfort to people worldwide through semiconductor test. Semiconductors are now incorporated into a wide variety of products and infrastructure, from industrial goods to commodities. They enrich people's lives, enhance convenience, and help to solve social issues. These same semiconductors are rapidly evolving to deliver even higher performance in their many roles. As semiconductors come to be used in more and more diverse applications, defective semiconductors no longer just cause inconvenience. Defects in the semiconductors used in automobiles, medical equipment, and data servers can lead to serious problems and even loss of life. Therefore, it is essential for semiconductor manufacturers to carefully check the quality of their devices during the verification process to ensure that they operate as designed, and inspect them thoroughly during mass production. Advantest's products are used for these processes. That is why we believe that our products play a key role in everyone's safe, secure, and comfortable lifestyles.

As for our future "Environment" aspect of ESG management, we will create a roadmap for our participation in the RE100 initiatives to further strengthen our response to climate change issues and aim to reduce greenhouse gas emissions by 60% by FY2030 compared to FY2018. We are determined to work together with our customers, business partners, and other stakeholders to help realize a decarbonized society. In terms of "Society," our human capital policy describes the promotion of diversification from various perspectives, including not only race and gender, but also of different cultures and backgrounds, and to engage in reforming various personnel systems, including human resources education, skills development, human resources promotion, and compensation systems. Corporate culture transformation is carried out under the spirit of INTEGRITY, our core value, which helps shape each employee's actions. We are also committed to acting in a manner that protects our stakeholders' human rights, and are working to eliminate any attendant risks to human rights from our corporate activities by strengthening our compliance and risk management systems. In terms of "Governance," in order to strengthen the CxO structure introduced in 2021, we shifted from one to three representative directors from January 2023, with the aim of enhancing our global management system. This transition is part of our succession plan, and we are also working to further strengthen our management structure by diversifying our human resources through the appointment of global human resources.

We have designated the "further promotion of ESG initiatives" as one of the key strategies of our mid-/long- term management policy and will continue to deliberate means towards further enhancement of corporate value and the building of a sustainable society.

We appreciate your continued support.

September 2023

Yasuo Mihashi

Senior Excutive Officer, CFO & CSO

Executive Vice President, Corporate Strategy Group

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Sustainability

Advantest's Sustainability Journey

Advantest continues its sustainability journey through promotion of ESG.

Basic Stance

A company can survive and grow only by continuously contributing to the common good and the enrichment of people's lives. Therefore, the sustainable development of the company itself cannot be achieved unless its management enhances the sustainability of society and the global environment.

Advantest's purpose and mission is "Enabling Leading-Edge Technologies". This points to our continual quest for greater social development in the form of contributions to the common good driven by leading- edge technological innovation in electronics, supported by our measurement technology and embodied by our products and services, with which we strive to provide ever greater value to customers around the world.

Advantest's management goal is to improve corporate value over the medium to long term by contributing through our business activities to a sustainable society that is safe, secure, and comfortable. In order to sustainably develop our business, we must build good relationships with all our stakeholders, including society as a whole, the global environment, our customers, shareholders, employees, and business partners, and develop these relationships in a well-balanced manner. We believe that this is a top-priority endeavor, and by pursuing it, corporate value will improve and stakeholder value will also increase.

Semiconductors and Sustainability

We believe that semiconductors will help secure and support a sustainable future for all of us.

Semiconductors are now embedded in every part of our lives. They are indispensable components not only of personal computers and smartphones, but also domestic appliances, automobiles, and industrial equipment. We now live in a world where everything is connected to the Internet. As the number of networked devices connected to the network increases, the amount of data in the world is expected to increase every year.

On the other hand, demands for reducing environmental impact are also affecting semiconductors. The growth of their energy consumption has been restrained thanks to the advances resting on miniaturization, higher-performance gains, and an emphasis on energy-saving. There has also been a remarkable improvement in the performance and proliferation of power semiconductors. Advantest is responsible for offering test solutions so as to aid semiconductor manufacturers in providing higher-performance semiconductor devices. These efforts will ultimately lead to contributions to future global energy conservation.

Advantest's mission is to continue to meet the challenges (high quality and performance assurance, shortest time to mass production) that our customers face in the evolution of semiconductors, which is driven by the two axes of digital transformation (DX) and green transformation (GX). In carrying out that mission, all executives and employees are guided by "The Advantest Way," and commit to respecting all stakeholders and working for sustainability, while at the same time seeking to ensure the sustainable development of our company and achieve medium- to long-term improvement of corporate value.

For details, please refer to "Innovation Initiatives".

Semiconductor Test Delivers Safety, Security, and Comfort

Realization of Sustainability through ESG Promotion

Advantest recognizes that attentive management based on our purpose and mission is essential for resolving sustainability issues, and creating corporate value over the medium to long term, and has formulated a mid/long-term management policy, our Grand Design, as well as a mid-term management plan. In addition, we are now focused on instilling "The Advantest Way" among our executives and employees.

"The Advantest Way" is the foundational set of our guidelines and commitments that unites the members of the Advantest Group, embracing diverse cultures, languages, customs, and values into one team, and assuring maximum potential of our diverse human capital. The Advantest Way consists of six elements: the first three, our "purpose and mission", "vision", and "core values" stipulate what the Advantest Group aims to be and what we should do in order to create value and contribute to the common good over the mid/ long term. The second three, "ESG for sustainability", "guiding principle (Quest for the Essence)", and "ethical standards" define the basic mindset required of Advantest's executives and employees for successful implementation of the first three elements.

We have laid out "sustainability through promotion of ESG" as one of the three foundations that support our vision. We have set out the ESG Initiatives Basic Policy and formulated an ESG Action Plan 2021-2023

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Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

for its implementation for the achievement of both the creation of a sustainable society and the sustainable growth of the Group. The ESG Action Plan 2021-2023 sets out 27 goals and KPIs for E / S / G in total. We have deployed these goals among company-wide units and have been working on their promotion and implementation ever since.

Advantest will continue its sustainability journey through the promotion of ESG.

The Advantest Way

Materialities and the ESG Action Plan

This page introduces our materialities and the ESG Action Plan.

The Mid-Term Management Plan is an initiative to achieve our Grand Design with a goal of 2027 and to continue sustainable growth thereafter. In order to contribute to a sustainable future through our business, we reviewed our materiality in the second Mid-Term Management Plan (MTP2), which began in fiscal 2021, and made the five strategies themselves materiality for the entire Advantest Group.

One of Advantest's materialities is the "further enhancement of ESG initiatives." In an effort to drive this materiality, we have set out the ESG Initiatives Basic Policy and formulated ESG Action Plan 2021- 2023 based on these policies. Subsequently, we have updated our ESG Action Plan to incorporate the Enhancement of Initiatives for Human Rights Issues based on discussions at the ESG Global Review Meeting.

In the Sustainability Data Book, we report on our sustainability initiatives based on ESG Action Plan 2021- 2023.

For the details of our materialities, please refer to Integrated Annual Report 2023.

Integrated Annual Report 2023

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Sustainability

ESG Action Plan 2021-2023

ESG	Key Issue	Person in	Objective	KPI			Target Value
Charge*1	2021	2022		2023	2030
			Reduce GHG emissions from business activities by 60% by	GHG emissions reduction amount/	35%	38%		40%	60%
		CSO	2030 (vs. FY2018)	rate
E
Climate Change
(Environment)		Raise renewable energy usage to 70% by 2030, Group-wide	Coverage rate by renewable energy	50%	53%		55%	70%
	(Scope 1+2)
		CPO	Reduce production times 30% through production process	Production time reduction rate for	15%	25%		30%	TBD*2
			reviews (vs. FY2020)	target models (vs. FY2020)
		CPO	Promote the use of renewable energy by suppliers and	Number of suppliers who use	10	20		40	TBD*3
	Value Chain		contractors	renewable energy
				Set basic unit
	(Scope 3)		Reduce CO2-equivalent emissions (basic unit) per test by	Reduction rate in basic units
		CTO	calculation	→		20%	50%
		50% by 2030	(vs. FY2018)
			definition
								Announce release	Total elimination
	Green Products	CTO	Develop products that are free from polluting substances	Total elimination of PFAS in coolant	New methodology in development plan	of PFAS in next-
	plan
								generation models
					JPN:90%				JPN:90%
	Resource		Improve in-house recycling rate by promoting the 3Rs	Waste recycling rate (Japan/overseas)	Other regions:	→		→	Other regions:
	CHO			73% or more				73% or more
	Recycling
			Maintain Group-wide water usage at FY2016 levels	Water resource usage	288,000m3/year	→		→	288,000m3/year
			Promote nature conservation activities	Planning and implementation rate of	10 activities	14 activities		18 activities	20 activities
	Biodiversity	CSO	(protection of endangered species in biotope, tree planting,	planned, 80%	planned, 80%		planned, 80%	planned, 80%
	nature conservation activities
			beach clean-up, etc.)	implemented	implemented		implemented	implemented
	ESG management		Share and solve/mitigate ESG issues (risk management,	Due diligence implementation rate for
	CPO	human rights/occupational safety, environment, fair trade,	90%	95%		100%	100%
	at Supply Chain	major customers
S		compliance, etc.)
(Social)
		Fair treatment in gender	Female manager ratio	9.0%	10.0%		10.5%	17.0%
			Edification and practice of human rights	Participation rate of educational	100%	→		→	100%
			training
	Diversity,
	CHO
		Return-to-work rate after maternity
	protection, and			100%	100%		100%	100%
			leave (JPN)
	respect for human		Work-life balance
	rights
		Exercise rate of childcare leave by	12%	20%		25%	50%
				males (JPN)
		CPO	Conflict minerals elimination	Percentage of suppliers confirmed to	100%	100%		100%	100%
		be free of conflict minerals*4

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Contents	Editorial Note	Advantest's	Environment	Society	Governance	ESG Data
Sustainability

ESG	Key Issue	Person in	Objective	KPI		Target Value
Charge*1	2021	2022	2023	2030
		CCRO	Raise customer satisfaction under New Normal	Ranking of TechInsights customer	1st	→	→	1st
		circumstances	satisfaction survey
	Customer
					→
	satisfaction,
					No target value
	employee
	CHO	Edification and improvement of attractive corporate culture	Score of Gallup survey	3.5	since the survey	3.8	4.1
	engagement
						has not been
						conducted
			Maintaining and enhancing occupational safety and health	Occupational accident rate (frequency rate)	0	→	→	0
	Investing in human
	CHO	Promotion of health management	To be selected in White 500 (JPN)	Selected	→	→	Selected
	resources
			Employee capacity building	Education and training expenses	-	5.0	6.0	10.0
			(100MY)
			Provide outside directors with updates on business and	3 times/year	3 times/year	→	→	3 times/year
			management issues
			Intensify discussion through Off-site meetings by board	2 times/year	2 times/year	→	→	2 times/year
			members
G
				Discussion by the			Discussion by the
(Governance)				Policy/process making, planning,	Nomination and			Nomination and
			Succession planning	Compensation	→	→	Compensation
			updates	Committee and	Committee and
	Board	Group			report to the			report to the
			Board of Directors			Board of Director
	effectiveness	CEO
			Outside directors
			Diversity of board members	Outside directors must include female	must include at
			least 1 female	→	→	Goal continuation
			representation (>40%)
				representation
					(>40%)
					Introduction
			Add ESG performance assessment to compensation	Start from FY2021	of executive
			compensation	→	→	Goal continuation
					system linked to
					ESG indicators
	Corporate	CHO	Work Shop/training for all employees (The Advantest Way,	Participation rate for e-learning	100%	→	→	100%
	culture and Code	Law, Regulations, Information securities, etc.)	(100%)
	of Conduct,
			Regularly discuss internal control	Regular
	compliance, risk	CCO	Strengthening Internal Control	→	→	Goal continuation
	management	issues	discussion

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Sustainability

ESG	Key Issue	Person in	Objective	KPI			Target Value
Charge*1	2021	2022		2023	2030
	Promotion &		Support & Report group-wide Policy, Strategy, Plan and	Report to Executive Management	2 times/year	→		→	Goal continuation
		implementation	Committee and BoD (once a year)
	support of ESG
				Publication
	management	CSO
	(Sustainable	Timely and appropriate disclosure		of Integrated
		Issuance every year
	Management		Annual Report,	→		→	Goal continuation
		(Integrated Annual Report, Sustainability Databook)
	Working Group)			Sustainability Data
					Book, etc.
*1: Group CEO: Group Chief Executive Officer	*2: Set products and target values considering future product lifecycles
CCRO: Chief Customer Relations Officer	*3: Set target values based on investigation of future major suppliers
CHO: Chief Human Capital Officer	*4: KPIs are changed according to actual activities
CPO: Chief Production Officer
CSO: Chief Strategy Officer
CTO: Chief Technology Officer

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