Climate Change Data

Environmental Metrics

ESG Focus Areas

• Product Competitiveness
• Responsiveness to Customers
• Higher Productivity
• People and Workplaces
• Management Foundation

Environmental Achievements

• Reduced per-wafer CO2 emissions by 16% compared to FY2014.
• Achieved energy consumption reduction targets at 6 of 11 factories/offices.
• Achieved water consumption targets at 9 of 13 factories/offices.

Social Achievements

• Increased percentage of female managers to 2.0% in FY2020.
• Achieved 72.6% annual paid leave take-up rate.
• Maintained workplace injury rate below 0.5 per 200,000 work hours (0.23 achieved).

Governance Achievements

• Improved Board of Directors effectiveness through revisions to organizational structure and compensation system.
• Established a new executive committee to improve decision-making processes.
• Revised internal control systems and group company controls.

Climate Goals & Targets

Environmental Challenges

• Global economic uncertainty, climate change, human rights issues, cyber-terrorism, infectious diseases.
• Supply chain disruptions.
• Maintaining technological competitiveness.

Mitigation Strategies

• Developing alternative sourcing strategies.
• Investing in R&D and collaboration with consortiums.
• Strengthening risk management and internal controls.
• Implementing supply chain CSR assessments.

Supply Chain Management

Supplier Audits: 80% or more of suppliers (procurement volume basis) for CSR assessments; 80% or more for BCP assessments.

Responsible Procurement

• RBA Code of Conduct, CSR surveys, conflict minerals surveys, BCP surveys.

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather, disasters, water shortages

Transition Risks

• Stronger environmental laws and regulations, carbon taxes

Opportunities

• Development of energy-efficient products, cost reduction, improved corporate value.

Reporting Standards

Frameworks Used: GRI Standards, TCFD recommendations

Certifications: ISO 9001:2015, ISO 14001

Third-party Assurance: Deloitte Tohmatsu Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 8 (Decent Work and Economic Growth)
• Goal 3 (Good Health and Well-being)
• Goal 10 (Reduced Inequalities)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for the Goals)

Initiatives contribute to these goals through various activities described in the report.

Sustainable Products & Innovation

• Energy-efficient equipment, upgraded models.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Product Competitiveness
• Customer Responsiveness
• Higher Productivity
• Management Foundation

Environmental Achievements

• Reduced per-wafer emissions of CO₂ by 10.7% (compared with fiscal year 2019)
• Reduced total CO2 emissions at plants and offices by 48.5% (compared with fiscal year 2019)
• 60.3% renewable energy usage at plants and offices
• Reduced the amount of the use of wooden packaging materials by 8.6% (packaging for semiconductor production equipment)

Social Achievements

• Increased ratio of female engineers hired in April 2022 to 12% from 6% in the previous year (Japan)
• Achieved 100% “Very Satisfied” or “Satisfied” evaluations in customer satisfaction survey responses
• Employee retention rate of 96%

Governance Achievements

• Changed the composition of the Board of Directors to three inside directors and three outside directors
• Appointed a majority of outside directors to the Nomination Committee and Compensation Committee
• Introduced a Corporate Officers system

Climate Goals & Targets

Environmental Challenges

• Market fluctuation
• Geopolitics
• Research and Development delays
• Procurement, Production and Supply chain disruptions
• Safety problems
• Quality issues
• Non-compliance with laws and regulations
• Intellectual Property Rights issues
• Information Security breaches
• Human Resources challenges
• Environmental Issues (including climate change)
• COVID-19 pandemic
• Other risks

Mitigation Strategies

• Periodic review of market conditions and orders; adjusting capital investments and planning
• Monitoring international situation and diplomatic/security trends; anticipating macroeconomic fluctuations
• Establishing Corporate Innovation Division; collaborating with research institutions
• Formulating business continuity plans; developing alternate production capabilities; multiple sourcing of parts
• Prioritizing safety; implementing safety design; promoting safety training
• Establishing quality assurance system; resolving technical issues early
• Monitoring compliance activities; conducting assessments by external experts
• Advancing intellectual property strategy; building IP portfolio
• Launching dedicated security organization; establishing robust monitoring system
• Improving work environments; promoting diverse work styles; health and productivity management
• Implementing measures to reduce greenhouse gas emissions; adopting renewable energy; developing environmental technologies
• Establishing Emergency Task Force; implementing infection prevention measures
• Taking appropriate measures to counter various risks

Supply Chain Management

Supplier Audits: Sustainability assessments for 80% of procurement spend (material suppliers), 100% of customs-related operators (logistics suppliers), and 100% of employment agencies (staffing suppliers)

Responsible Procurement

• RBA Code of Conduct compliance
• Conflict minerals survey

Climate-Related Risks & Opportunities

Physical Risks

• Impacts from abnormal weather; increased costs associated with higher temperatures

Transition Risks

• Increased energy costs due to carbon taxes; reduced reputation among investors

Opportunities

• Energy-saving operations; development of low-GHG products and services

Reporting Standards

Frameworks Used: GRI Standards Environmental Reporting Guideline 2018, TCFD, UNGC, RBA

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Deloitte Tohmatsu Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7
• Goal 9
• Goal 12
• Goal 13
• Goal 5
• Goal 8
• Goal 10
• Goal 16
• Goal 3

Initiatives contribute to these goals through various aspects of business operations

Sustainable Products & Innovation

• Equipment with improved energy efficiency; products with reduced CO2 emissions

Awards & Recognition

• Clarivate Top 100 Global Innovators 2022
• Best IR Award from Japan Investor Relations Association
• Most Honored Company by Institutional Investor magazine
• CDP A List company in the water security category
• Grand Prize Company in the Corporate Governance of the Year® 2021 program

Environmental Metrics

ESG Focus Areas

• Modern Slavery and Human Trafficking
• Diversity & Inclusion
• Environmental Sustainability
• Supply Chain Responsibility
• Governance

Environmental Achievements

• Reduced Scope 1 emissions from 16 kt-CO2 in FY2022 to 22 kt-CO2 in FY2023.
• Reduced Scope 2 emissions (market standard) from 74 kt-CO2 in FY2022 to 20 kt-CO2 in FY2023.
• Increased renewable energy use rate from 60% in FY2022 to 91% in FY2023 (Japan) and from 47% to 49% (Overseas).
• Maintained recycling rate of 97% or more.

Social Achievements

• Increased percentage of women in new graduates hired from 15.3% in FY2022 to 16.5% in FY2023.
• Increased percentage of women in career-track recruits from 21.3% in FY2022 to 13.1% in FY2023.
• Achieved 100% employee participation in basic and advanced safety training.
• Improved customer satisfaction survey results to 100% in FY2023.

Governance Achievements

• Increased percentage of female managers from 2.6% in FY2022 to 2.7% in FY2023.
• Achieved 100% pledge rate for TEL’s Code of Ethics training.
• Maintained a high average rate of attendance for Board meetings (98.62% in FY2023).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Meeting increasingly stringent environmental regulations globally.
• Maintaining high employee retention rates.

Mitigation Strategies

• Established a robust due diligence system to identify and mitigate risks associated with forced labor and debt labor.
• Implemented corrective actions in the supply chain to mitigate risks based on evaluation and analysis of sustainability assessment results.
• Strengthened the structure and activities of human rights projects to deepen due diligence processes.
• Provided human rights training to all employees.
• Actively working to evaluate the effectiveness of corrective actions and review measures if needed.

Supply Chain Management

Supplier Audits: 100% of new important suppliers screened using social criteria

Responsible Procurement

• RBA Code of Conduct
• Green Procurement Guidelines
• E-COMPASS initiative

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Global Compact, Responsible Business Alliance (RBA) Code of Conduct

Certifications: ISO 14001

Third-party Assurance: Deloitte Tohmatsu Sustainability Co., Ltd.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed