Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental preservation
• Safety
• Accident prevention
• Corporate ethics
• Legal compliance
• Stakeholder communication
• Human rights
• Supplier CSR
• Social initiatives

Environmental Achievements

• Reduced greenhouse gas emissions by 3.6% compared to FY Mar/91.
• Achieved BOD reduction and waste landfill rate targets.
• Japanese subsidiaries and affiliates achieved their recycling rate targets.
• Reduced atmospheric emissions of PRTR Law substances by 67% over FY Mar/96.
• Reduced atmospheric emissions of JCIA PRTR substances by 47% over FY Mar/96.
• Reduced SOx, NOx, and dust emissions.
• Reduced BOD emissions by 20% over FY Mar/99.
• Eight plants at six companies achieved zero waste emissions status.

Social Achievements

• Established the Working Team to Promote the Advancement of Women.
• Enacted CSR Procurement Guidelines to promote better supplier practices.
• Established Personal Information Management Rules.
• Launched a Multi-Communication Campaign to improve internal communication.
• Maruichi Fiber received Minister of Health, Labour and Welfare Award for excellent employment of disabled people.

Governance Achievements

• Established the CSR Committee.
• Prepared CSR Guidelines and Action Programs.
• Established Personal Information Management Regulations.
• Revised and strengthened control of raw materials with Green Procurement Guidelines.
• Established company-wide Crisis Management Regulations.

Climate Goals & Targets

Environmental Challenges

• Soil contamination at the Nagoya Plant.
• Soil contamination at Toyo Seisen.
• Wastewater abnormality at the Tokai Plant.
• Increased total waste generated year-on-year.

Mitigation Strategies

• Publicly disclosed survey results and initiated cleanup efforts at contaminated sites.
• Replaced contaminated soil at Toyo Seisen and monitored groundwater.
• Installed fiber filtration equipment and continuous monitoring equipment at the Tokai Plant to prevent recurrence of wastewater abnormality.
• Implemented measures to reduce and recycle waste.

Supply Chain Management

Supplier Audits: Questionnaire survey of approximately 1,300 suppliers.

Responsible Procurement

• CSR Procurement Guidelines
• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI), Japan’s Ministry of the Environment’s Environmental Reporting Guidelines, Responsible Care Codes of Practice

Certifications: ISO 14001

Sustainable Products & Innovation

• Ecodear PLA fiber
• Recycled ASG plastic
• Sotake bamboo fiber
• SALAKALA quick-drying material
• Environmentally friendly plastics & films

Awards & Recognition

• Minister of Health, Labour and Welfare Award (Maruichi Fiber)
• Safety Award (Toray Gifu Plant)
• Various other awards listed on pages 54-55

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• 12% reduction in GHG emissions over FY 1990 levels at Toray.
• 18% reduction in GHG emissions per unit sales over FY 1990 levels for Toray Group (Japan).
• 54% reduction in atmospheric emissions of PRTR Law-specified substances over FY 2000 levels.
• 51% reduction in atmospheric emissions of volatile organic compounds (VOCs) over FY 2000 levels.

Social Achievements

• Launched various human rights educational programs, including the 2007 Human Rights Promotion Campaign.
• Improved management systems for hiring new graduates and experienced individuals, enhancing workforce diversity.
• Granted certification under the Phase 1 Action Plan of Japan’s Law for Measures to Support the Development of the Next Generation.
• Implemented initiatives to improve work-life balance, including childcare and family-care leave systems.

Governance Achievements

• Reviewed and implemented “Basic Policy for Internal Control Systems” in compliance with Japan’s Corporate Law.
• Established internal control systems for financial reporting in compliance with Japan’s Financial Instruments and Exchange Act.
• Strengthened security trade administration following a warning from Japan’s Ministry of Economy, Trade and Industry (METI).

Climate Goals & Targets

Environmental Challenges

• Global warming and its impact on water resources and the need for environmentally conscious materials.
• Need to reduce the environmental impact of production processes and promote recycling.
• Maintaining legal compliance across diverse global operations.
• Balancing work and family life for employees.

Mitigation Strategies

• Development and use of CFRP for lighter automobiles and aircraft, reducing fuel consumption and CO2 emissions.
• Development of seawater desalination and wastewater reclamation systems using high-performance membrane technologies.
• Implementation of the Third Three-Year Environmental Plan with targets for GHG emission reductions, waste reduction, and recycling.
• Implementation of various human rights educational programs and improved management systems for hiring and training.

Supply Chain Management

Responsible Procurement

• CSR Procurement Partner Standards
• Green purchasing initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Water resource shortages

Transition Risks

• Regulations on GHG emissions

Opportunities

• Development of environmentally friendly products and technologies.

Reporting Standards

Frameworks Used: Japan Responsible Care Council’s Responsible Care Code

Certifications: ISO 14001 (multiple plants)

Sustainable Products & Innovation

• Ecodear＊ (PLA fibers and plastics)
• Foresse＊ (cellulose-based fibers)
• CFRP
• RO membranes

Awards & Recognition

• Environmental Business Award: “eco japan cup 2007”
• Chinese Chemical Fiber Industry’s Environmentally Friendly Enterprise Award
• Presidential Award in Production Innovation
• Nikkei BP Technology Award for Ecology Division
• Okochi Memorial Production Prize

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• 20% reduction in GHG emissions compared to FY 1990
• 63% reduction in atmospheric emissions of PRTR Law-specified substances compared to FY 2000
• 62% reduction in atmospheric emissions of volatile organic compounds (VOCs) compared to FY 2000
• 81% recycling rate
• 2.6% landfill rate
• Achieved zero emissions at 18 plants

Social Achievements

• Introduced a reemployment system for all employees who wish to continue working, extending the reemployment period to age 65 by April 2013
• Achieved the legally required employment ratio of 1.8% for disabled persons
• 6.08% of unit manager level positions or higher held by women in April 2009
• Various initiatives to encourage full utilization of the labor of individuals over age 60
• Various initiatives to encourage diversity in employment
• Various social contribution activities generating approximately 1,020 million yen in donations

Governance Achievements

• Established an internal control system for financial reporting
• Implemented a Group-wide risk management system
• Established a CSR Committee that reports directly to the president
• Established CSR/Legal Compliance Committees at each subsidiary and affiliate, division, and plant
• Implemented various measures to prevent non-compliance and strengthen corporate ethics and legal compliance

Climate Goals & Targets

Environmental Challenges

• Price fixing of cross-linked high-foaming polyethylene sheets (resulting in administrative orders from the Japan Fair Trade Commission)
• Global economic downturn impacting production efficiency and unit energy consumption
• Water scarcity in various regions of the world

Mitigation Strategies

• Implemented thorough measures to prevent recurrence of price fixing
• Implemented energy conservation measures to reduce GHG emissions
• Provided water treatment membrane technology to regions suffering from water scarcity

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines

Climate-Related Risks & Opportunities

Opportunities

• Development and promotion of next-generation materials such as Carbon Fiber Reinforced Plastics (CFRP) for the automotive and aircraft industries

Sustainable Products & Innovation

• Environmentally-friendly products contributing to environmental burden reduction and global warming prevention
• Carbon Fiber Reinforced Plastics (CFRP)
• Plant-based plastics
• High-performance films
• High-performance chemicals
• IT-related materials
• RO membranes

Awards & Recognition

• 2008 Humanitarian Award from the United Nations Association of New York
• 2008 Life Cycle Assessment Society of Japan Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 8% in distribution activities compared to FY2006.
• Reduced GHG emissions by 25% compared to FY1990.
• Achieved zero emissions at 20 plants.
• Reduced atmospheric emissions of PRTR Law-specified substances by 69% compared to 2000.
• Reduced atmospheric emissions of VOCs by 70% compared to 2000.

Social Achievements

• Achieved legally required employment ratio of 1.8% for disabled persons.
• Introduced a reemployment system for all employees.
• Increased the ratio of unit manager level positions or higher held by women to 6.36% in April 2010.
• Reduced the number of labor accidents to an all-time low of 14 cases across the Toray Group in 2009.
• Implemented various initiatives to improve work-life balance for employees.

Governance Achievements

• Established the CSR Committee in 2003.
• Formulated CSR guidelines.
• Improved corporate governance system and enhanced management transparency.
• Established a Group-Wide Risk Management Committee.
• Implemented an internal control system for financial reporting.

Climate Goals & Targets

Environmental Challenges

• Global warming
• Depletion of fossil fuels
• Water shortages
• Economic downturn impacting production
• Maintaining high ethical standards and legal compliance across the global supply chain.

Mitigation Strategies

• Developed and implemented Project EcoChallenge.
• Established the Global Environment Business Strategic Planning Department.
• Implemented life cycle management (LCM).
• Developed T-E2A tool for evaluating environmental load reduction and economic efficiency.
• Implemented various energy conservation initiatives.
• Switched from heavy oil to natural gas in some plants.
• Strengthened internal controls and compliance programs.
• Provided thorough training on security trade administration and antitrust law compliance.

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines
• Ethical procurement practices
• Green procurement and purchasing

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Expansion of new energy resource and energy saving businesses

Sustainable Products & Innovation

• Carbon fibers
• Water treatment membranes
• Engineering plastics
• Polylactic acid (PLA) resin
• Bio-based plastics

Awards & Recognition

• Italian Republic President’s Prize
• Minister of Health, Labour and Welfare Award for Outstanding Safety
• John D. Spellman Safety Award
• Minister of the Environment Award
• Investor in France Award

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility (CSR)
• Environmental Sustainability
• Green Innovation
• Safety
• Human Resources Development
• Corporate Governance
• Legal Compliance
• Risk Management
• Stakeholder Engagement
• Social Contribution

Environmental Achievements

• Achieved a 16% reduction in GHG emissions compared to FY 1990 (Toray); 8% reduction for Group companies in Japan.
• 66% reduction in atmospheric emissions of PRTR Law-specified substances compared to FY 2000.
• 69% reduction in atmospheric VOC emissions compared to FY 2000.
• Achieved zero emissions at 24 plants at 15 subsidiaries/affiliates.
• Recycling rate of 86.3%.

Social Achievements

• Increased ratio of unit manager level positions or higher held by women to 6.77%.
• Achieved legally required employment ratio of 1.8% for disabled persons.
• Implemented a reemployment system for employees over 60.
• Improved systems for work-life balance, including childcare and family care leave.
• Zero product accidents.

Governance Achievements

• Improved corporate governance system and enhanced management transparency.
• Achieved zero violations of laws or ordinances.
• Implemented a Group-wide risk management system.
• Established a Corporate Ethics Committee and a Company-Wide Legal Compliance Committee.
• Abolished executive retirement benefit scheme for directors and auditors, replacing it with a stock-options program.

Climate Goals & Targets

Environmental Challenges

• Impact of the Great East Japan Earthquake on plant operations and employee commutes.
• Supply chain disruptions.
• Rising CO2 emissions due to strong sales.
• Asbestos-related health hazards from past building materials use.
• Compliance with Antitrust Law.

Mitigation Strategies

• Full-scale resumption of operations in May after the earthquake.
• Upgraded in-house electric power plant.
• Full review of disaster countermeasures.
• Upgraded and expanded risk management structure and systems.
• Secured enough raw materials to meet current requirements.
• Implemented measures to prevent reoccurrence of Antitrust Law violations, including regular audits and refresher training.

Supply Chain Management

Supplier Audits: CSR audits conducted on a portion of principal suppliers, manufacturing subcontractors, and sales agencies.

Responsible Procurement

• CSR Procurement Guidelines established.
• CSR pledge forms signed with procurement partners.
• Internal system for prompt response to CSR questionnaires from customers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (implied by discussion of earthquake impact).

Transition Risks

• Fluctuations in raw material markets (implied).

Opportunities

• Development of energy-efficient products (e.g., HEATTECH®, CFRP).

Reporting Standards

Frameworks Used: ISO 26000

Certifications: ISO 14001 (most manufacturing companies)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 6 (Clean Water and Sanitation)

Toray's initiatives in renewable energy, Green Innovation, recycling, water treatment, and GHG emission reduction contribute to these SDGs.

Sustainable Products & Innovation

• HEATTECH®
• Bio-based plastic
• Carbon fiber reinforced plastic (CFRP)
• Water treatment membranes
• ECODEAR® biodegradable fiber

Awards & Recognition

• Various awards for safety, environmental performance, and IR activities (see report for details).

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Corporate Ethics and Legal Compliance
• Safety, Accident Prevention, and Environmental Preservation
• Product Safety and Quality
• Risk Management
• Communication
• Green Innovation Businesses
• Human Resources Development
• CSR Procurement
• Social Contribution Activities

Environmental Achievements

• Reduced greenhouse gas emissions by 14% compared to 1990 levels.
• Reduced atmospheric emissions of VOCs by 71% compared to 2000 levels.
• Reduced atmospheric emissions of PRTR Law-specified substances by 68% compared to 2000 levels.
• Achieved zero emissions status at 29 plants.
• Improved waste recycling rate to 90%.

Social Achievements

• Launched the Toray Smile Support Program, a point-based system offering various programs for childcare and home acquisition.
• Initiated a telecommuting program to improve work-life balance.
• Expanded commuting allowance system to include bullet train travel.
• Achieved legally mandated employment rate of persons with disabilities (2.0%).
• Continued to increase the number of women in management positions.

Governance Achievements

• Established a Group-wide Risk Management Committee.
• Implemented an online CSR training program for managers.
• Established a Corporate Ethics and Legal Compliance Helpline.
• Improved systems for product safety and quality assurance.

Climate Goals & Targets

Environmental Challenges

• Series of accidents and explosions at chemical plants in Japan, impacting supply chains.
• Increased number of fires and near accidents at Toray plants in 2012.
• Potential risks from major earthquakes.
• Growing concerns about water resources and environmental impact from industrial wastewater.

Mitigation Strategies

• Launched a second phase of the Fire Prevention Project, including comprehensive inspections of ductwork and expert taskforce reviews.
• Carried out company-wide earthquake response drills and created a new management protocol.
• Improved systems for product safety and quality assurance.
• Implemented various initiatives to reduce environmental impact, including life cycle assessment and T-E2A tool.

Supply Chain Management

Supplier Audits: Surveys of principal suppliers every two years (90% of total purchases).

Responsible Procurement

• CSR Procurement Guidelines.
• Inclusion of CSR-related provisions in basic contracts with suppliers.
• Request for written pledges from existing suppliers to uphold CSR provisions.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Opportunities

• Development of energy-efficient products (e.g., carbon fiber for lighter vehicles).

Reporting Standards

Frameworks Used: ISO 26000

Certifications: ISO 14001, ISO 9001, GB/T28001

Sustainable Products & Innovation

• Green Innovation Products (energy-saving, new energy, biomass-derived, water treatment, air purification, low environmental impact, recycling)
• ecodear® brand of biomass-based polymer materials and products.

Awards & Recognition

• Green factory award (Thai Toray Textile Mills)
• Superintendent’s Civic Spirit Award (Toray Composites (America))
• Prime Minister’s Prize at the Japan Industrial Technology Awards (Toray)
• Grand Prize at the 11th Japan Innovators Awards (Toray’s Composite Materials Research Laboratories).

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Sustainability
• Energy Sustainability
• Health Maintenance and Longevity
• Corporate Ethics and Legal Compliance
• Safety, Accident Prevention, and Environmental Preservation
• Human Rights
• Product Safety and Quality
• Supply Chain CSR
• Stakeholder Engagement

Environmental Achievements

• Reduced greenhouse gas emissions by 21% compared to 1990 levels (Toray)
• Reduced atmospheric emissions of PRTR Law-specified substances by 71% compared to 2000 levels (Toray Group)
• Reduced atmospheric emissions of VOCs by 75% compared to 2000 levels (Toray Group)
• Achieved zero emissions at 42 plants
• Increased recycling rate to 84%

Social Achievements

• Launched career advancement seminars for women, resulting in increased networking and career planning
• Conducted discussion meetings for women across business locations to address work-life balance issues
• Achieved 100% implementation of CSR training across group companies
• Maintained zero product accidents
• Implemented human rights education and training across 100% of group companies in Japan

Governance Achievements

• Established a group-wide system for self-inspections and mutual internal control audits
• Implemented a new system for conducting export control compliance checks
• Established internal rules for corporate ethics and legal compliance
• Expanded the whistle-blowing system to include direct reporting of serious misconduct

Climate Goals & Targets

Environmental Challenges

• Increased complaint-related costs due to customers' more exacting quality requirements
• Increased simply disposed waste rate at group companies outside Japan due to changing production processes
• Increased CO2 emissions from transport due to increased truck transport and decreased load efficiencies
• Failure to meet target for percentage of priority risks improved due to changes in incident reporting requirements
• One violation of laws or ordinances (improperly received subsidies)

Mitigation Strategies

• Investigating the cause of major product complaints and implementing countermeasures
• Implementing measures to prevent similar incidents from occurring again and reinforcing compliance
• Implementing modal shift to rail transport and increasing load volumes
• Implementing information security measures and improving business continuity plans
• Returning illegally received subsidies and taking steps to prevent recurrence

Supply Chain Management

Supplier Audits: 526 companies surveyed in 2016

Responsible Procurement

• CSR Procurement Guidelines
• Supplier Code of Conduct (Penfabric Sdn. Berhad)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: GRI G4 (Core)

Certifications: ISO 14001

Third-party Assurance: Lloyd's Register Quality Assurance Limited (LRQA)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 6 (Clean water and sanitation)
• Goal 3 (Good health and well-being)
• Goal 8 (Decent work and economic growth)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

The report highlights how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Green Innovation products (e.g., waterless UV offset printing system, high-efficiency organic thin-film solar cell module)
• Life Innovation products (e.g., TRK-950, P-U CELSITE PORTTM EV, RAPROSTM)

Awards & Recognition

• Prize of Excellence from Environmental Communication Awards (two consecutive years)
• Mercury Excellence Award in Annual Reports
• LACP Silver Award in the digital-based reports category

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resources
• Resource Depletion
• Health Maintenance and Longevity
• Corporate Ethics and Legal Compliance
• Human Rights
• Product Safety and Quality
• Supply Chain Management
• Biodiversity

Environmental Achievements

• Reduced greenhouse gas emissions by 20% compared to 1990 levels (Toray Group in Japan)
• Reduced atmospheric emissions of PRTR Law-specified substances by 67% compared to 2000 levels (Toray Group)
• Reduced atmospheric VOC emissions by 72% compared to 2000 levels (Toray Group)
• Achieved zero emissions at 45 plants
• Improved water usage per unit of sales by 5.5 points compared to the previous fiscal year

Social Achievements

• Launched the Toray Group Policy for Human Rights
• Implemented CSR education in 100% of Group companies
• Maintained zero product accidents
• Improved available annual paid leave used by employees to 88.4%
• Expanded initiatives for women's advancement in the workplace

Climate Goals & Targets

Environmental Challenges

• Inappropriate overwriting of product inspection report data by a subsidiary (Toray Hybrid Cord, Inc.)
• Increased greenhouse gas emissions due to increased production volumes
• Shortfall in achieving legally mandated employment rate of persons with disabilities in some Japanese group companies
• Increased CO2 emissions from distribution activities due to increased transport volume
• Shortfall in achieving modal shift target

Mitigation Strategies

• Established a new Quality Assurance Division to strengthen compliance in product quality assurance
• Implemented various measures to reduce energy consumption and greenhouse gas emissions
• Continued efforts to improve workplace conditions and support for employees with disabilities
• Implemented measures to improve transport efficiency and reduce CO2 emissions from distribution
• Continued efforts to achieve modal shift target through various initiatives

Supply Chain Management

Supplier Audits: CSR surveys conducted for 214 processing suppliers outside Japan and 633 business partners in Japan

Responsible Procurement

• CSR Procurement Guidelines
• Requesting major suppliers and business partners to practice CSR
• Checking for use of conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and renewable energy technologies

Reporting Standards

Frameworks Used: GRI Standards 2016, Responsible Care Code (Japan Chemical Industry Association)

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Lloyd’s Register Quality Assurance Limited (LRQA)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 6 (Clean water and sanitation)
• Goal 13 (Climate action)
• Goal 3 (Good health and well-being)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)

Toray's Green and Life Innovation businesses contribute to these goals through various initiatives

Sustainable Products & Innovation

• Green Innovation products (energy-saving, new energy, biomass-derived, water treatment, air purification, low environmental impact, recycling)
• Life Innovation products (medical technologies, preventative treatments)
• ecodear™ PET
• ecodear™ PTT
• HEATTECH™
• LIVMO™ protective clothing
• waterless UV offset printing system

Awards & Recognition

• 2017 Top 100 Global Innovators (Clarivate Analytics)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resources
• Resource Depletion
• Health and Longevity
• Corporate Governance
• Human Rights
• Supply Chain Sustainability

Environmental Achievements

• Reduced greenhouse gas emissions per unit of sales by 12% compared to 2013.
• Reduced water usage per unit of sales by 23% compared to 2013.
• Achieved a 76% reduction in atmospheric VOC emissions compared to 2000.
• Achieved a 73% reduction in atmospheric emissions of PRTR Law-specified substances compared to 2000.
• Increased CO2 emissions avoided by the use of Toray Group products throughout the value chain to 196 million tons-CO2 in fiscal 2019 (avoided 5.1 times more CO2 emissions than in fiscal 2013).

Social Achievements

• Increased sales of Life Innovation products to 223.2 billion yen.
• Implemented human rights education and training in 100% of Group companies.
• Achieved legally mandated employment rate of persons with disabilities in 100% of Toray Group companies in Japan.
• Increased the percentage of women in management positions (specific percentage not explicitly stated, but progress noted).

Climate Goals & Targets

Environmental Challenges

• Decreased demand for lithium-ion battery separators and resins for automobiles and motorcycles.
• Supply chain disruptions (implied due to global events like COVID-19)
• Meeting increasing expectations for carbon fiber recycling technologies.
• Addressing compliance issues at some group companies.

Mitigation Strategies

• Developed alternative sourcing strategies (implied through discussion of supply chain management and risk mitigation).
• Strengthened and expanded the system for supplying material to make non-woven masks in response to the COVID-19 pandemic.
• Implemented a group-wide emergency headquarters to respond to the COVID-19 pandemic.
• Provided support and guidance from Toray’s main plant in Japan to group companies with high accident rates.
• Implemented stricter management of hot work and improved the duct sediment inspection and cleanup to prevent fire-related accidents.

Supply Chain Management

Supplier Audits: CSR surveys conducted biannually on major suppliers, business partners, and distribution companies.

Responsible Procurement

• CSR Procurement Guidelines
• Basic Purchasing Policies
• Basic Distribution Policies
• CSR clause added to supplier agreements.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes, typhoons)

Transition Risks

• Changes in demand for certain products
• Fluctuations in fuel prices

Opportunities

• Development of energy-efficient products and renewable energy technologies

Reporting Standards

Frameworks Used: GRI G4 Guidelines

Certifications: ISO 14001, ISO 9001

Third-party Assurance: Lloyd’s Register Quality Assurance Limited (LRQA) for greenhouse gas emissions

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)
• Goal 6 (Clean water and sanitation)
• Goal 12 (Responsible consumption and production)
• Goal 3 (Good health and well-being)

Initiatives described in the report align with these SDGs through various programs and product development.

Sustainable Products & Innovation

• Porous carbon fiber with a continuous pore structure
• Nanoslit Nylon textile
• HFUG Series ultrafiltration membrane modules
• &+™ fiber made from recycled PET bottles

Awards & Recognition

• Inclusion in DJSI Asia Pacific, FTSE4Good Index, FTSE Blossom Japan Index, MSCI ESG Indexes, Ethibel Pioneer & Excellence Registers, CDP Water Security A List, and SOMPO Sustainability Index.
• Various awards for outstanding website and IR publications.

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Ethics and Compliance
• Safety, Accident Prevention, and Environmental Preservation
• Product Quality and Safety
• Risk Management
• Communication
• Contributing Solutions to Social Issues through Business Activities
• Human Rights Promotion and Human Resources Development
• Facilitating CSR Initiatives Throughout the Supply Chain
• Social Contribution Activities as a Good Corporate Citizen

Environmental Achievements

• Reduced greenhouse gas emissions per unit of revenue
• Reduced water consumption per unit of revenue
• Reduced atmospheric VOC emissions (at least 70% lower than fiscal 2000)
• Achieved a high waste recycling rate (at least 86%)
• 100% usage survey of certified palm oil products
• Systematically adopted renewable energy

Social Achievements

• Achieved 100% implementation of human rights education and training across group companies
• Achieved the legally mandated employment rate of persons with disabilities (100%)
• 100% of employees returned to work from childcare leave
• Year-on-year reduction in employees exceeding 45 hours/month of non-statutory working hours
• About 90% of available annual paid leave used by labor union members
• Conducted interviews to exchange opinions within the company (80% progress rate)

Governance Achievements

• Regularly held Toray Group Business Strategy Discussion sessions at Board of Directors meetings (8 times per year)
• Board of Directors’ positive assessment of the implementation of the Basic Policy for Internal Control Systems (90%)
• Zero major violations of laws or ordinances
• Implementing internal legal audits of group companies, with improvements made based on previous year's audits
• 100% of group companies provided information and implemented education on major laws and regulations

Climate Goals & Targets

Environmental Challenges

• Risks related to major earthquakes in Japan
• Information security risks
• Human rights challenges in the supply chain
• Conflict mineral issues in the supply chain

Mitigation Strategies

• Prepared and regularly reviewed business continuity plans for key products
• Conducted regular drills to establish a group-wide emergency response headquarters
• Monitored and bolstered the contents of communications and enhanced education and training on the risk of cyberattacks and information leakage
• Addressed issues in the supply chain such as human rights challenges and conflict mineral issues through CSR surveys and audits, pledges from suppliers, and working with suppliers to promote greater awareness

Supply Chain Management

Responsible Procurement

• Requesting suppliers to practice CSR
• Conducting CSR surveys and audits of suppliers
• Having suppliers make pledges regarding CSR

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Increased contribution to CO2 reduction in the value chain by 8 times compared to fiscal 2013 by increasing the supply of GR products.
• 30% reduction of GHG emissions per unit of sales revenue compared with fiscal 2013 levels, by 2030 (target).

Social Achievements

• Not disclosed

Governance Achievements

• Established the Sustainability Committee in April 2021 to accelerate initiatives and promote achieving the Toray Group Sustainability Vision.

Climate Goals & Targets

Environmental Challenges

• Carbon tax burden (estimated at US$800 million under 1.5℃ and 2℃ scenarios)
• Water usage restrictions
• Increased competition in various sectors
• Reduced demand for products related to internal combustion engines
• Increased procurement costs for fossil-based raw materials and fuels
• Increased cost of waste processing
• Contraction of markets for plastics and high-performance materials
• Increased demands to reduce GHG emissions
• Less demand for warming materials and winter sports applications
• Impact on raw materials procurement and plant operations due to climate change

Mitigation Strategies

• Initiatives to achieve GHG emissions and water usage targets outlined in the Toray Group Sustainability Vision
• Energy conservation initiatives
• Meeting new demand for electrification and biomaterials
• Strengthening supply chains
• Business continuity plan
• Water conservation initiatives and greater collaboration
• Promoting wastewater recycling
• Reducing transport distances, modal shift to ship and rail transport, and raising transportation efficiency
• Waste reduction initiatives
• Recycling businesses

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Asking suppliers to implement initiatives to reduce GHG emissions and conserve energy

Climate-Related Risks & Opportunities

Physical Risks

• Rise in temperatures
• Destabilization of water and food supply
• Increased severity of disasters
• Water usage restrictions
• Impact on raw materials procurement, plant operations, etc.

Transition Risks

• Increased electricity costs
• Carbon tax burden
• Increased competition
• Reduced demand for products related to internal combustion engines
• Increased procurement costs for fossil-based raw materials and fuels
• Increased cost of waste processing
• Contraction of markets for plastics and high-performance materials
• Increased demands to reduce GHG emissions
• Less demand for warming materials and winter sports applications

Opportunities

• Growth of renewable energy-related business
• Growth of storage battery-related business
• Growth of energy conservation-related business
• Growth of business related to hydrogen manufacturing, transport, storage, and use
• Growth of materials business for electric mobility
• Growth of businesses contributing to a circular society
• Growth of biomaterials business
• Growth of recycled materials business
• Growth of businesses contributing to waste reduction
• Growth of businesses related to dealing with heat
• Growth of businesses related to infectious disease measures
• Growth of businesses related to water and food supply
• Growth of businesses related to disaster mitigation

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Lloyds Register Quality Assurance Limited (for GHG emissions by Toray Industries, Inc.)

UN Sustainable Development Goals

• SDG 7: Affordable and Clean Energy
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 6: Clean Water and Sanitation
• SDG 14: Life Below Water
• SDG 15: Life on Land
• SDG 3: Good Health and Well-being

Not disclosed

Sustainable Products & Innovation

• Bio-based and recycled raw materials
• Battery separator films
• Industrial-use carbon fibers
• RO membranes
• Porous carbon fiber for gas separation membranes
• Bio-based PET fibers
• Ultrasuede PX ultra-microfiber non-woven fabric
• High-performance packaging materials
• VOC-free waterless printing system for flexible packaging
• Materials for air purification products
• Functional garments (cooling materials)
• Insulating and heat shielding products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Ethics and Compliance
• Safety, Accident Prevention, and Environmental Preservation
• Product Quality and Safety
• Risk Management
• Communication
• Contributing Solutions to Social Issues through Business Activities
• Human Rights Promotion
• Establishing Sustainable Supply Chain
• Social Contribution Activities

Environmental Achievements

• 36.0% reduction of greenhouse gas emissions per unit of revenue compared to fiscal 2013
• 101% increase in solar power generation capacity compared to fiscal 2022
• 87.0% waste recycling rate
• 72.5% reduction of atmospheric VOC emissions compared to fiscal 2000
• 35.3% reduction of water usage per unit of revenue compared to fiscal 2013

Social Achievements

• 106% year-on-year increase in male employees taking childcare leave
• 81.1% year-on-year reduction in employees exceeding 45 hours/month of non-statutory working hours
• 124% increase in social contribution expenditure compared to the average expenditure over the last six years
• 18,816 beneficiaries of educational support activities

Governance Achievements

• 96% of Group companies implementing internal legal audits
• 100% of Toray Industries, Inc. employees trained in quality assurance compliance
• 100% of Group companies providing information and implementing education on major laws and regulations
• 35% of Group companies implementing self-assessment and results follow-up using the internal control checklist
• 35% of Group companies implementing information security evaluation and risk reduction

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: 76.8% of suppliers agreeing to the Toray Group CSR Procurement Guidelines

Responsible Procurement

• Compliance with laws and regulations, amelioration of global warming, environmental conservation, and respect for human rights

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed