Tokyo Ohka Kogyo : （3.75 MB）

Stakeholder Engagement

To Establish Win-Win Relationship with All Stakeholders

TOK will create and achieve long-term sustainable value by generating new solutionsandbreak- throughs through collaboration with stakeholders in response to increasingly complicated socialissues and advanced technological requirements.

Value Creation Story

Initiatives to Address Material Issues

Data Section

for Enhancing Corporate Value

Customers

Shareholdersand investors

Employees

and

Suppliers/startups

future

generations

		Academics,					National/
research		institutions,		local governments and
and	consortium		local communities

TOK aims to establish win-win relationships with all stakeholders as stated below.

Our Stakeholders

Customers

Shareholders and investors

Employees	Contribute to a sustainable	Suppliers and
and future	startups
generations	future through chemistry

"The e-Material

Global Company®"

Academics,	National/
research institutions,	local governments and
and consortium	local communities

TOK will contribute to the resolution of new social issues and unanticipated risks by creating shared value through close communication with stakeholders in Japan and overseas.

• Shared value

• Provide new added value that inspires customers (overarching aspiration under TOK Vision 2030)
• Build relationships of trust that create continued value in cutting-edge fields
• Establish a production structure that guarantees stable supply to society

• Policies and basic initiatives

• Focus on Strategy 3 under TOK Medium- Term Plan 2024
  (see page 32)
• Make record-high capital investments to support stable production in the semiconductor industry that grows at an unprecedented speed
• Execute customer-oriented strategies (trifecta of development, manufacture, and marketing) to be further deepened and advanced
• Provide a flexible response to multi-site operations of customers
• Execute risk distribution by having production sites in five regions across the world

• Communication channels

• Customer-orientedsites established in Japan, the United States, China, South Korea, and Taiwan, and face-to-face meetings at customer sites (partially replaced with online meetings)

• Specific examples and latest achievements

• Received supplier awards from many customers

■ Shared value

● Established long-term sustainable growth and corporate value enhancement

● Increased capital efficiency ● Reduced capital costs

● Strengthened engagement through constructive dialog

■ Policies and basic initiatives

● Communicate with enhanced transparency of business management through timely and fair disclosure of information on finance and business activities

● Director, Executive Officer, and Department Manager of General Affairs Department undertake management and oversight as IR Officer

● Records of opinions and requests received through dialogs are collected and regularly reported to all directors for information dissemination and sharing

● In accordance with the Disclosure Policy, TOK endeavors to provide consistent information to ensure fair, timely, and appropriate disclosure

• TOK established rules for the manage- ment of insider information and strives to ensure stringent observance

• Communication channels ● Business results meetings for
  institutional analysts/investors (two sessions*)

● Individual meetings with institutional

analysts/investors (277 sessions*)

● Financial results briefings for individual investors (eight sessions*)

● The integrated reports, business reports to shareholders, and the notice of the convocation of the ordinary general meeting of shareholders are published on our website.

• Specific examples and latest achievements

• Individual meetings with institutional analysts/investors containing ESG topics (12 sessions*)

* Achievements in FY 2021/12

■ Shared value

■

Shared

value

● Frank, open-minded business

culture

as

●

Solid

partnership

to

create

high

added

one of the management principles

value

● New personnel system and measures

●

S

upply

chain

guarantees

a

stable

that respect the values of each

supply

to

society

while

respectingthe

individual

environment

and

human

rights

●

An

environmentthat enables a longer

●

B

ased

on

the

Occupational

Health and

working life (e.g., enhancement of

Safety

Policy,

the

utmost

priority

is

re-employment system)

placed

on

the

maintenance

of the

health

Policies and basic initiatives

and

safety

of

all

internal

and

external

■

persons

(workers)

who

provide

service in

●

The philosophy of the TOK Group Policy

on Leveraging Human Resources is

the

work

environment

of the

TOK

Group

●

O

pen

innovation

through

corporate

incorporated into the respective human

ventures

resource measures

● Focus on Strategy 4 under the TOK

■

Policies

and

basicinitiatives

Medium-Term Plan 2024 (see page 32)

●

Chemical

substanceregulations,

● Focus on enabling all employees to

customer

requirementstandards, and

work with enthusiasm and pride as an

TOK procurement policy are shared

overarching aspiration under TOK Vision

through the TOK Group Standards on

2030; Also feature the leveraging of

Chemical Substances Management

global human resources as one of the

● Business is transacted with impartiality,

Seven Management Strategies under

fairness, and transparency based on

the Vision

the CSR Policy, while respecting human

■ Communication channels

rights, and considering society and the

● Employee engagement survey

global environment

● Information management complies with

● Dialog sessions between young

the TOK Group Information Management

employees and the president

Policy

● Group reports issued in multiple

■ Communication channels

languages (Japanese, English, Korean,

and Chinese)

● Inspection and verification of

● The internal reporting system to identify

manufacturing systems through periodic

and improve or prevent compliance risks

audits (on-site and online)

at an early stage

● Joint research and development in the

(Reports received: three times*)

new R&D building

■ Specific examples and latest

■ Specific examples and latest

achievements

achievements

● Strengthened communication to foster

● Started open innovation in the new R&D

unity on a global basis (by issuing the

building

group reports and the president's video

message in multiple languages, etc.)

● Implemented CSR training for all

employees, directors, and officers in

Japan: participation rate 100%*

* Achievements in FY 2021/12

Developed high-refractive materials through open innovation with Pixelligent Technologies, LLC (USA)

■ Shared value

• Implemented initiatives toward

technological breakthrough throughindustry-academia collaboration

• Enhanced and streamlined basic research through industry-academia

collaboration ● Expedited R&D process through

collaboration with international research institutions

• Acquired business opportunities through

participation in the industrial consortium

■ Policies and basic initiatives

● Accumulated technological seeds that will lead to future blue oceans and new concepts

• Acquired a broad range of technological seeds through open innovation in order to input internal resources at full scale as soon as the market takes off

• Communication channels ● Sent TOK human resources to
  universities and research institutions in Japan and overseas

● Initiated joint research and development ● Provided grants for research and

• development through the Tokyo Ohka Foundation for the promotion of science and technology

• Specific examples and latest achievements

• Established a joint laboratory with Yokohama City University (July 2019)
• Provided grants through the Tokyo Ohka Foundation for the promotion of science and technology in 2021: 99 projects, ¥43.21 million

Implemented joint research with universities in the development of cutting-edge photoresists

■ Sharedvalue

● Sustainable development of society ● Response to global risks, including

climate change,infectious diseases, and geopoliticalrisks

• Response to unanticipated risks that

will emerge

• Policies and basic initiatives ● Contribute toa sustainable future through chemistry as ourpurpose

● Ensureclose collaborationwith national

andlocal governments andcommunities

toward the overarching aspirationunder TOKVision 2030

● Proactively promotesocial contribution

activitiesin the areasaround TOK busi- nesssites, emphasize cooperation and collaboration with local communities,and establish a relationship of trust

■ Communication channels

• Negotiations with competent authorities in Japan, the United States, South Korea, and Taiwan related to environ- mental regulations and applicable laws
• Activities in accordance with the local policies and objectives in response to climate change risks and infectious disease risks, as well as decarbonization initiatives
• Emphasize the local communication at normal times as the basis of stable value provision to society

• Specific examples and latest achievements

• Dialogs about the environment and society: 579 participating employees*
• Dialogs with local communities (suspended in 2021 considering the risk of COVID-19)
• Donations to local governments and organizations, including relief money for preventing the spread of COVID-19 infection: ¥104.08 million*

* Achievements in FY 2021/12

Intel Corporation	Business results meeting was held online
EPIC Distinguished Supplier Award	(FY 2021/12)
(2022)

Sponsored dialog sessions between young employees and the president

Participated in JOINT2, a consortium for the development of next-generation semiconductor packaging technology

Participated in the afforestation activities with residents of Kanagawa Prefecture through the Kanagawa Trust Midori Foundation

050 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 051

Our Material Issues

Initiatives to Address Material Issues for Enhancing Sustainable Corporate Value

TOK defines material issues as the starting point for its long-term initiatives with the goal of attaining the TOK Vision 2030, a 100-year company by 2040, and carbon neutrality in 2050, and the Company has recently formulated new material issues closely linked to the TOK Medium-Term Plan 2024.

- Toward Achieving a Sustainable Future -

TOK aims to become "The e-Material Global Company®" by contributing to a sustainable future through chemistry under the TOK Vision 2030, and the Company contributes to a sustainable future where diverse benefits will be realized through semiconductor technologies employed in autonomous vehicles, AR/VR, remote medical care, remote agriculture, and remote construction work with the communication revolution (Beyond 5G) at the core.

The TOK Medium-Term Plan 2024 was formulated by backcasting from the Vision in order to acquire abundant business opportunities pertaining to a sustainable future, while implementing countermeasures against a variety of risks that include the increasing severity of climate change, the spread of infectious diseases, and the surge in issues with economic security.

TOK has defined five new material issues aimed at the enhancement of sustainable corporate value by handling risks and opportunities as above. The Company increase the effectiveness of key initiatives and KPI for each material issue by promoting a PDCA cycle in close linkage with the TOK Medium-Term Plan 2024.

Process of defining new material issues

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

TOK Vision 2030

Contribution to the achievement

of a sustainable future

Backcasting

Accumulated achievements

TOK Medium-Term Plan 2024

Close linkage

New material issues

Material issues	SDGs to which	ESG fields	Risks and opportunities
we contribute

• Intensifying global competition in the semiconductor industry and increased geopolitical risks
• Expansion of the role of cutting-edge semiconductors in innovation and the resolution of social issues

						■ Technological advancements and market expansion in both the miniaturization and 3D packaging of
						semiconductors
Contribution to innovation and						■ Expansion of applications and social needs of semiconductor technologies (such as life science-related materials,
					functional materials, and optical materials)
the creation of social value
					■ Risk reduction and long-term stable growth through the diversification of the business portfolio and the
						multiplication of target markets
					Society	■ Supply shortage due to the tight supply-demand condition of semiconductors
					■ More difficult and complex customer requests
					(S)
					■ Increase in needs for ultrahigh purification in semiconductor materials
						■ Intensifying competition for recruitment in semiconductor-related industries
						■ Global personnel development in conjunction with the increase in overseas sales ratio

• Increasing the importance of happiness in society (wellbeing)

Pursuit of happiness
■ Creating innovation and increasing competitiveness through the leveraging of diverse human resources
in personnel
				■ Aging of employees and the utilization of "know-why" of senior human resources
					■ Borderless expansion of supply chain
					■ Escalating geopolitical risks

Step 1

TOK selected the issues it needs to address to create sustainable value by considering the applicable guidelines in Japan and overseas, and the Responsible Care Code of the Japan Chemical Industry Association.

Step 2

TOK evaluated the selected and then pri- oritized the issues from the two axes of the importance for society and stakeholders, which took into account day-to-day dialogs with ESG investors and other stakeholders, and the importance to TOK management, which considered strategies under the TOK Vision 2030 and the TOK Medium-Term Plan 2024, and then the Company identified the five most important items.

Step 3

TOK defined the identified items as new material issues, along with key initiatives and risks and opportunities in a PDCA cycle for each issue, through discussions and approval at meetings of the Board of Directors.

					■ Increase in the potential risks involved in business growth and the increase of stakeholders
					■ Rapid changes in the business environment
					■ Increase in the sustainability requirements
Establishment of				Governance	■ Upgrading of supervisory and control functions to directly link business growth to the enhancement of corporate
			value
resilient organization				(G)
■ More stringent laws and regulations based on global initiatives for sustainability and decarbonization

• Maintenance and enhancement of social trust and brand power in local communities overseas
• Increasing tail risks that include pandemics and extremely severe natural disasters
• Acquisition of risk resilience to continuously fulfill supplier's responsibility
• Increasing climate change risks and accelerated initiatives for global decarbonization

■ Cost increases due to the introduction and spread of carbon pricing

■ Cost increases due to more precise temperature control for cutting-edge products

■ Expansion of energy-saving effects through advancement in the miniaturization of semiconductors ■ Expansion of power semiconductor material and equipment markets

Global environmental	■ Increase in water stress due to global warming
conservation considering	■ Increasing interest in the marine plastics issue
future generations	Environment ■ Expansion of a circular economy

1. ■ Tighter emissions regulations in major developed countries

■ Further risk reduction by satisfying standards stricter than regulatory requirements

New material issues

Contribution to		Pursuit of		Establishment		Global environmental		Supply chain
innovation and the		happiness in		of resilient		conservation considering
				sustainability
creation of social value		personnel		organization		future generations

■ Increased risk of global biodiversity loss

• Risk reduction through initiatives addressing biodiversity and water resources as a single issue

						■ Tighter chemical substance control regulations in major developed countries
						■ Increased product value by taking thorough action prior to legislation from before and during the early stages of
Supply chain sustainability						material development
				Society	■ Increased risks of accidents due to the increase of production sites, production volume, and operating hours
					(S)	■ Further risk reduction through RBA audits and ISO 45001 certification

052 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 053

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Material Issues, 2021 Results, and 2022 Issues, Qualitative Objectives, and KPI Objectives

[Self-assessment of goal achievement]

• Implemented with accomplishments

• Implemented with room for further accomplishments × Yet to be implemented or accomplished

SDGs to which

Evalu-

Material issues

the Company

ESG fields

Key initiatives

Issues and objectives for FY 2021/12

Main achievements, progress, and KPI in FY 2021/12

Issues, qualitative objectives, and KPI objectives for FY 2022/12

Pages

ation

contributes

Increase the global

■ Rapidly and steadily work to develop a support structure rigorously focused on

■ Provide technologies, quality, environment, and added value that contribute to the value creation

customer satisfaction along with R&D

process of customers

P58-61

market shares of cutting-edge

■ Through rigorous marketing, TOK will carefully identify solutions that lead to the

■ Consolidated net sales: Increased by 19.1% year on year

○

■ Continue development and improvement from a thoroughly customer-oriented perspective

P34-41

photoresists

creation of new value for customers and intensively and proactively address issues

■ Ambitiously develop technologies required for 5G, IoT and other innovations

■ Ambitiously develop technologies required for 5G, IoT and other innovations

■ R&D efficiency: Aim to achieve and maintain 200%

Contribution to innovation

Acquire and create core

■ Expand the development of cutting-edge materials at the new R&D building

■ Continue to develop and strengthen commercial viability in new business fields (high-functional

■ Expand collaborative projects with other companies and groups

■ Number of collaborative projects promoted with other companies and groups: Increased by approx.

P43

and the creation of

technologies for electronic

○

films, life science-related materials, and optical materials)

■ Continue to develop and strengthen the commercial viability of high-functional

2% year on year

P51

social value

materials and new fields

■ Expand collaborative projects with other companies and groups

films, life science-related materials, and optical materials

Secure stable supplies of

■ Improve detection sensitivity for metal impurities that comply with customer development

P4-5

high-quality products and

■ Improve detection sensitivity for metal impurities in compliance with customer

■ Improve detection sensitivity for metal impurities that comply with customer development roadmaps

○

roadmaps

P42

establish an optimal produc-

development roadmaps

■ Create new value through DX (material development utilizing materials informatics/shift to smart

P61

tion system for the Group

factories)

P74

■ Employee engagement: Promote initiatives toward the objective for 2024: Improve by 3 points

Society

■ Ratio of paid leave taken: 73.8%*

(vs. 2021)

■ Continue to promote a good work-life balance

■ Employee-friendly environment: Promote initiatives toward the objective for 2024: Improve by

■ Increased childcare leave taken (male employees: 5 in 2020 to 11 in 2021 with the user rate

(S)

Improve employee

■ Expanded flex time to more departments and introduced work from home

7 points (vs. 2021)

increasing to 41%)*

as an official system

■ Continue to promote a good work-life balance

engagement and promote

■ Introduced the hourly paid holiday system

○

P62-71

■ Introduced an hourly paid holiday system

■ Childcare leave user rate among male employees: Maintain at 30% or more

people-oriented management

■ Formulated the new personnel system in detail toward introduction in 2022; reported the system

■ Formulated a new personnel system in detail toward introduction in 2022

■ Expanded flex time to more departments and introduced work from home as an official system

details to employees

■ Implemented training for new managers and transferred employees

■ Introduce new personnel system and appropriately operate the system to set it in place

■ Introduced training for department heads

■ Continue to implement training for department and division heads

Pursuit of happiness

■ Promote health & productivity management

■ Limited personnel exchange within the Group due to the impact of COVID-19

in personnel

■ Continue to promote corporate activities that leverage diversity

■ Continue to promote corporate activities that leverage diversity

P62-71

■ Ratio of non-Japanese employees: 26.2%

△

■ Promote personnel exchanges within the Group

■ Promote personnel exchanges within the Group

P81

■ Ratio of local hires in overseas management positions (consolidated basis): 54.5%

Diversity and inclusion

■ Implemented a female career planning seminar for young female employees

■ Continue to promote women in the workplace

■ Continue to promote women in the workplace

■ Implement training for female employees pursuing management positions

P62-71

■ Ratio of women in senior and middle management: 3.8%*

○

■ Continue to promote career training featuring life stages

■ Ratio of women in senior and middle management: Aim to increase to twice the level by 2030

P81

■ Ratio of female new graduates hired: 17.0%*

(vs. 2020)

Respect for human rights and

■ Continue efforts to prevent harassment

■ Implement antiharassment and human rights education

○

■ Continue efforts to prevent harassment

P62-71

fair working conditions

■ Implement human rights education

■ Implement antiharassment education for department heads

■ Implement human rights education

■ Awareness building activities through the group-wide sharing of the examples of effective

Establish a sound and effi-

■ Promote effective utilization of information

information utilization

■ Streamline the operation of Information Management Committee

■ Review all cybersecurity measures

■ Reviewed cybersecurity structures and strengthened countermeasures against cyberattacks at group

○

P96-97

cient management foundation

■ Strengthen cybersecurity measures

■ Maintain and entrench information management standards

companies

■ Conducted information management training

• Establish a new remuneration system and formulate performance indicators

				concerning the next medium-term plan	■ Formulate and disclose the skill matrix of directors		■ Continue to thoroughly operate the PDCA cycle to improve the effectiveness of the Board of
				■ Formulate skill matrix of directors	■ Evaluate the Board of Directors in the previous fiscal year and make improvements to identified		Directors (assess its effectiveness once a year)
				■ Continue to thoroughly operate the PDCA cycle to improve the effectiveness of	issues	○	■ Enhance internal control functions	P78-93
			Strengthen the effectiveness	the Board of Directors (assess its effectiveness once a year)	■ Revise the content of the questionnaire for the Board of Directors evaluation		■ Continue to check the approval authority and approval request operations
			■ Enhance internal control functions	■ Check and correct the approval request operation and implement approval request training		■ Establish new CSR and sustainability governance structures
			of governance	■ Confirm the operating status after the revision of authorities
				■ Review the committee structure and the operation of the Group Management	■ Discontinued the GMS Committee structure
				System (GMS)		■ Reviewed the manufacturing transfer process and the OEM process
				■ Reviewed the product development process	○	P94
				■ Visualize operations to achieve standardized and globally optimized operations	■ Established a risk transfer analysis process
				■ Established a governance structure pertaining to the shutdown and establishment of subsidiaries
Establishment of		Governance		in the Group
		■ Conducted compliance training
a resilient organization		(G)
				■ Continue activities to instill compliance	■ Revised compliance rules		■ Continue activities to instill compliance
				■ Started the operation of periodic checks on laws and regulations (four times annually)
				■ Formulate and disseminate the list of applicable laws and the legal management	○	■ Continue periodic checks on laws and regulations (four times annually), and review the list of	P94-95
				■ Issued the Explanatory Guidance on CSR Policy
				procedures		applicable laws and legal management procedures
			Compliance	■ Formulated the list of applicable laws and the legal management procedures and notified the
				related departments
					■ Three reports were received, for which solutions and recurrence prevention measures were promptly
				■ Continue appropriate operation of the internal reporting system	explored through consultation with an expert (legal advisor)	△	■ Continue appropriate operation of the internal reporting system	P94-95
				■ Further enhance and disseminate the internal reporting system	■ Examined the review of the internal reporting system in response to legal amendments	■ Further enhance and disseminate the internal reporting system
					■ Explained and reported on the internal reporting system through compliance training
					■ Continued the activities to reduce risks assessed as highly impacting business continuity, such as
				■ Work to reduce risks previously and newly identified through risk assessments	the risk of spread of COVID-19 infection and the risk in the supply of raw materials
				■ Formulated BCP scenarios and restoration principles at the production sites of overseas subsidiaries		■ Reduce risks previously and newly identified through risk assessments
			Risk management	■ Create a unified BCP for the Group to begin implementation in 2022
			■ Continued the creation of a unified BCP for the Group for the following fiscal years	△	■ Continue to hold drills to increase awareness and aim to maintain a high response rate	P95-96
			■ Continue to hold drills to increase awareness and aim to maintain a high response
				■ Conducted drills to improve awareness of the safety confirmation system in the event of major		■ Conduct desktop drills anticipating actual damage
				rate
				natural disasters
					Held four company-wide drills with a high response rate maintained in all sessions
							* Unconsolidated

054 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 055

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Material Issues, 2021 Results, and 2022 Issues, Qualitative Objectives, and KPI Objectives

[Self-assessment of goal achievement]

• Implemented with accomplishments

• Implemented with room for further accomplishments × Yet to be implemented or accomplished

SDGs to

Evalu-

Material issues

which we

ESG fields

Key initiatives

Issues and objectives for FY 2021/12

Main achievements, progress, and KPI in FY 2021/12

Issues, qualitative objectives, and KPI objectives for FY 2022/12

Pages

ation

contribute

Develop, manufacture, and market environment-

■ Stably supply i-Line photoresists for power semiconductors

■ Stably supply and increase sales of i-Line photoresists for power semiconductors

■ Stably supply and increase sales of i-Line resists for power semiconductors

P24-29

○

P37

friendly products

■ Increase sales of equipment for power semiconductors

■ Increase sales of equipment for power semiconductors

■ Increase sales of plasma ashing systems for power semiconductors

P38-41

Proactive response to new environmental regulations

■ Introduce a comprehensive management system for

■ Introduce a comprehensive management system for environment-related data

○

■ Introduce a comprehensive management system for environment-related data and prepare to start

P102-109

environment-related data

operation in 2023

■ Proactive information disclosure

■ Proactive information disclosure

Proactive disclosure of environmental information

Publish the Integrated Report and disclose environmental

Publish the Integrated Report and disclose environmental information on the website

○

■ Proactive information disclosure through the Integrated Report and on the website

P50-51

information on the website

■ Disclosure of the ESG Data Book

Create environmental management structures

■ Examine methods for the effective implementation of

■ Identify risks and opportunities at each department in Japan to set company-wide objectives

○

■ Create environmental management structures throughout the TOK Group

P72-75

Initiatives

company-wide environmental management activities

toward

Improve energy-related CO2 emissions per base unit*

■ Reduce energy-related CO2 emissions (per base unit) by 15 points

■ Reduce energy-related CO2 emissions (per base unit) by at least 35 points compared with 2019

○

■ Reduce energy-related CO2 emissions (per base unit) by 15 points by 2030 compared with 2019

P102-103

realization

[Medium-term target] Reduce energy-related CO2

by 2030 compared with 2019

of carbon

emissions (per base unit) by 15 points by 2030

■ Reduce energy-related CO2 emissions (per base unit) by 1 point

neutrality

compared with 2019 (Scopes 1 and 2)

■ Reduce energy-related CO2 emissions (per base unit) by at least 27 points compared with 2020

○

■ Reduce energy-related CO2 emissions (per base unit) by 1 point compared with the previous year

P102-103

compared with the previous year

■ Reduce energy consumption (per base unit) by 15 points by 2030

■ Reduce energy consumption (per base unit) by 19 points compared with 2019

○

■ Reduce energy consumption (per base unit) by 15 points by 2030 compared with 2019

P102-103

Improve energy consumption per base unit*

compared with 2019

[Medium-term target] Reduce energy consumption (per

■ Reduce energy consumption (per base unit) by 1 point compared

■ Reduce energy consumption (per base unit) by 1 point compared with the previous year

base unit) by 15 points by 2030 compared with 2019

■ Reduce energy consumption (per base unit) by 11 points compared with 2020

○

P102-103

with the previous year

■ Measures against the aging of equipment and the introduction of new energy conservation systems

Improve energy consumption per base unit in

■ Reduce energy consumption (per base unit) by at least 1 point

■ Reduce energy consumption (per base unit) by 1 point compared with 2020

○

■ Reduce energy consumption (per base unit) by 1 point or more compared with the previous year

P102-103

distribution*

compared with the previous year

■ Achieve efficient transportation by improving the loading rates of vehicles

Global environmental

conservation consider-

Measures to prevent global warming at overseas

■ Promote production activities considering energy conservation

■ Promote production activities for energy conservation

○

■ Promote production activities for energy conservation

P103

ing future generations

manufacturing sites

Environment

■ Propose and implement plans at each site

■ Propose and implement plans at each site

○

■ Reduce water consumption by renewing equipment

P104-105

Examples: Cyclic use of blowing water for air conditioners and cooling water for equipment

■ Promote the cyclic use of water

(E)

Initiatives to address water risk*

■ Reduce domestic water consumption by 15% by 2030 compared

■ Domestic water consumption: Increased by 0.4% compared with 2019

■ Reduce domestic water consumption by 15% by 2030 compared with 2019

with 2019

△

P104-105

Promote

■ Continue measures against flooding risks

■ Continue measures against flooding risks

■ Continue measures against flooding risks

resource

Initiatives to address the marine plastics issue

-

-

-

■ Introduce product packaging materials derived from bioplastics

P75, 109

recycling

Reduce industrial waste*

■ Reduce (per base unit) by 15 points by 2030 compared with 2019

■ Industrial waste generation (per base unit): Increased by 9.5 points compared with 2019

△

■ Reduce (per base unit) by 15 points by 2030 compared with 2019

[Medium-term target] Reduce (per base unit) by 15

■ Industrial waste disposed in landfills ➞ less than 1%

points by 2030 compared with 2019

■ Industrial waste disposed of in landfills: Less than 1%, achieving zero emissions

○

■ Industrial waste disposed of in landfills: Less than 1%, achieving zero emissions

P106-107

Achieve zero emissions

Prevent air, water, and soil pollution

■ Excess of operational thresholds: None

■ Excess of operational thresholds: None

○

■ Excess of operational thresholds: None

Conserve

■ Manage CFC leakage volume through the proper management of

air, water,

Countermeasures against ozone-depleting substances

equipment

■ Manage CFC leakage volume through the proper management of equipment

○

■ Manage CFC leakage volume through the proper management of equipment

P109

■ Examine the introduction of non-CFC equipment when renewing

■ Examine the introduction of non-CFC equipment when renewing facilities

■ Examine the introduction of non-CFC equipment when renewing facilities

and soil

facilities

environments

Eradicate environmental accidents that affect external

■ Environmental accidents: No major accidents

■ Environmental accidents: No major accidents

○

■ Environmental accidents: No major accidents

parties

Preserve

Improve awareness of biodiversity based on the TOK

P108-109

■ Continue ongoing employee training

■ Implement CSR training for employees, as well as all directors and officers: 100% participation rate

■ Implement ongoing employee training

Biodiversity Protection Declaration and encourage

○

biodiversity

■ Continue activities to preserve forests

■ Dispatch employees to participate in activities at the Kanagawa Trust Midori Foundation

■ Continue activities to preserve forests

participation in related activities

Precisely

Carry out appropriate and reliable management of

■ Establish chemical substance information management system

■ Establish a chemical substance information management system

■ Establish a chemical substance information management system

■ Continue to strengthen and operate chemical substance

○

chemical substances

■ Continue to strengthen and operate a chemical substance management system

■ Continue to strengthen and operate a chemical substance management system

address

management system

laws and

P110-112

■ Formulate and promote an equipment renewal plan based on

■ Formulate and promote an equipment renewal plan based on the road map toward the deadline for

■ Formulate and promote an equipment renewal plan based on the road map toward the deadline for

regulations

Properly comply with the PCB Special Measures Act

the road map toward the deadline of disposal of PCB waste (low

○

the disposal of PCB waste (low concentration) in 2027

the disposal of PCB waste (low concentration) in 2027

concentration) in 2027

Supply chain

Foster a safety culture

■ Establish and improve occupational health and safety management

Occupational

systems

■ Strengthen risk assessment for occupational health and safety

■ Prepare to acquire ISO 45001 certification and extend the scope of certification

sustainability

○

health and

Promote safety education and training, and disaster

■ Prepare to acquire ISO 45001 certification and extend the scope of

■ Acquire ISO 45001 certification at four domestic sites

(Complete acquisition at all sites in Japan by 2023)

drills

certification (Complete acquisition at all sites in Japan by 2023)

P113-114

safety/

Society

Reduction of

■ Strengthen risk assessment and hazard prediction activities for

■ Issue the Guidelines for Risk Assessment and Hazard Prediction for infrequent operations and

(S)

Promote risk assessment activities in chemical

risks posed

infrequent operations

strengthen the activities

○

■ Foster safety culture by reestablishing the 5S

substance handling work

■ Establish Lockout/Tagout (LOTO) rules

■ Set the LOTO rules in place through the horizontal expansion of findings in the RBA audit

by chemical

substances

No major accidents

■ Achieved no major accidents

■ Workplace accidents: 8

○

■ Achieved no major accidents

P113-114

■ Achieved zero accidents resulting in lost workdays

* Unconsolidated basis and consolidated subsidiaries in Japan

056 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 057

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Message from the Director in Charge of Marketing and Development

Accelerating initiatives for the material issue contribution to innovation and the creation of social value as one of the strategies for the medium-term plan

Kosuke Doi	Director, Executive Officer, Department Manager,
Marketing Dept. and Research and Development Dept.

For example, if the era of optical semiconductors and quantum computers arrives, which are anticipated to play the main role in the next generations to follow the 3D packaging of semiconductors, there is a risk that the material technologies that the Company has accumulated may become obsolete.

To reduce such R&D risks on a medium- to long-term basis, the Sales Strategy Division and the Strategic Alliance Division are engaged in research and marketing looking more than ten years ahead in close collaboration with the Research and Development Department.

The Sales Strategy Division drives initiatives to counter the latest environmental risks and issues

In addition to the activities above, the Sales Strategy Division drives initiatives to counter the latest environmental risks and issues related to semiconductor materials in cooperation with the EHS Division as part of the initiatives for a new material issue, "supply chain sustainability."

As activities to strengthen the regulation of PFAS* are promoted in full scale in the United States and Europe, TOK is striving to develop materials that will achieve both the substitution of PFAS and the further improvement of performance based on the achievements of marketing and information collection by the Sales Strategy Division and the EHS Division.

* Per- and polyfluoroalkyl substances

TOK Medium-Term Plan 2024, new material issues, and initiatives toward TOK Vision 2030

Seizing abundant business opportunities through a full-portfolio strategy

As indicated on page 52, the TOK Group will pursue the enhancement of sustainable corporate value by promoting a PDCA cycle in close linkage with new material issues and the TOK Medium-Term Plan 2024 backcasting from the TOK Vision 2030.

Upgraded customer-oriented strategies

To a new value creation stage through the advanced collaboration of development and marketing

The TOK Group achieved sustainable growth by globally promoting its customer-oriented strategies based on the trifecta of development, manufacturing, and marketing as its core competences. To further advance this structure, we introduced a new structure for the further collaboration of development and marketing in April 2022. In the new structure, I serve as

vehicles, the further acceleration of decarbonization and green innovation, the expansion of the metaverse market, and technological development aimed at the next-generation communication standard (6G), causing the further increase of data use and semiconductor use.*2

*1 Source: World Semiconductor Trade Statistics

*2 Source: SEMI

Reduction of potential risks in supply chain

The TOK Group has continuously ensured compliance with environmental regulations applicable to the products and is sincerely responding to new environmental regulations. As the Group receives requests from many customers to further reduce the environmental impact of existing products and influence on human health, TOK will seize new business opportunities with the Sales Strategy Division acquiring such needs and undertaking related marketing activities.

Promote the full-portfolio strategy toward customers in all aspects

As specific measures, the Group will first promote the full-portfolio strategy toward customers in all aspects in Japan and overseas based on the recognition of risks and opportunities described above. TOK will steadily acquire increased demand in all fields, including photoresists for various light sources (EUV, ArF, KrF, and g/i-Line),high-purity chemicals, high-density integration materials, and power semiconductor systems, thereby powerfully undertaking initiatives for a

the department manager of both the Marketing Department and Research and Development Department. The respective deputy department managers supervise both departments. The new organizational structure consists of product groups without a division between marketing and development, and personnel appraisals are also conducted in an integrated manner for both departments. In this way, we are accelerating one-team value creation based on the seamless collaboration of marketing and development.

Megatrends/risks and opportunities

Semiconductor industry continues growing

The global semiconductor market substantially grew by 26.2% year-over-year in 2021, the second highest growth rate after 28.0% in 2004. The market size became the largest ever at US$555,893 million.*1

In 2022, the growth rate of the semiconductor market decreased because of the partial slowdown of demand at home during the COVID-19 pandemic. However, positive growth by 16.3% year-over-year is expected because the shift to electronic equipment offering higher functions and higher efficiency proceeded through the expanded utilization of AI, the further dissemination of 5G & IoT, and initiatives for decarbonization and renewable energy sources combined with the substantial increase in the prices of semiconductors used in individual devices.*1

On a medium- to long-term basis, the forecast is that the semiconductor market will grow to US$1 trillion in 2030, almost double the present size, owing to the spread of autonomous

In the meantime, transportation costs have remained high because of the tight distribution conditions, while suppliers have suspended the supply of some products because of the impact of high crude oil prices, which further increased the procurement risks in supply chain. TOK strengthened the procurement structure with the SCM Procurement Department, which started operation in January 2022, at its core. In the development of new materials, the Company is proactively accelerating new risk hedge measures that include the procurement of raw materials from more than one supplier.

While semiconductor demand will continue to steadily increase, overlapped orders and over-procurement by users are being observed. Therefore, the Company will prevent excess inventory by anticipating and monitoring possible repercussion risks in the event of weaker supply-demand condition in the future.

While photoresists are the growth driver at present, the shift to domestic production is expanding in China, South Korea, and other Asian countries, suggesting the possibility of intensified price competition mainly in general-purpose products. The TOK Group will maintain and strengthen its advantage by sustaining its business model since foundation to continuously specialize in high-value-added fields of high technological difficulty.

Reducing R&D risks on a medium- to long-term basis

In research and development, the Group will strengthen countermeasures against potential risks on a medium- to long- term basis, so that TOK can continue maximizing its strengths in long-run R&D as our unique corporate culture.

EVs and renewable	Data servers	Smartphones	IoT sensors	HPC	AI	Autonomous
energy systems	vehicles

EUV and

High-purity

chemicals

High-density

g/i-Line excimer

KrF excimer

ArF excimer laser

(Thinners and advanced

integration materials

laser photoresists

laser photoresists

photoresists

surface preparations)

for

for

for

for

for

cutting-edge packaging

semiconductors of

semiconductors of

power semiconductors

3D-NAND

process and high-

a 10 nm to 3 nm scale

a 10 nm to 5 nm scale

frequency wave devices

058 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 059