Toyo Ink SC : Sustainability Data Book 2023

Corporate Philosophy

Corporate Policy

People-oriented management

We, the Toyo Ink Group, endeavor to be a company that contributes to the enrichment of life and culture throughout the world.

Providing value through products and services

We will endeavor to provide the utmost confidence and satisfaction to customers and other consumers by creating new value in the market, improving the quality of life, and providing products and services that contribute to the development of culture and help improve the global environment.

Sincerity in business activities

We will endeavor to conduct business activities sincerely, fairly, and appropriately at every stage, from the procurement of raw materials to the sales of products. We will make healthy profits through our business activities and return these profits to our shareholders and other stakeholders.

Active communication and disclosure of information

We will promote wide-ranging communication with society and disclose management information actively and honestly.

Social action program

In order to encourage lifestyles with social value, as a good corporate citizen striving for harmonious coexistence with the community, we will contribute to society through our primary business activities and also implement a program of social action.

Global environmental protection

We will make efforts at every stage of our business activities to reduce the burden on the environment. We will address global environmental problems as our major challenge and actively work for global environmental protection.

Creating a comfortable and self-realizing working environment We will respect each employee's character and identity and create a safe and rewarding working environment so that each employee can exercise his or her abilities and initiative. We will create labor environments, whether in Japan or overseas, that are free from discrimination, and we will never permit child labor, forced labor, or any other activity that violates human rights.

Ensuring compliance

We will ensure compliance with laws and regulations in Japan and overseas as well as with international treaties and regional social norms, and we will make rational, conscientious, and ethical decisions and act accordingly.

Ideal corporate governance

We will establish a group management system that can manage risks appropriately and respond actively and flexibly to changes in the business environ- ment. We will strive to establish a management system that enables us to achieve our ideal―to be viewed by society as a good and desirable company.

(Established April 2005)

Integrated Report (PDF / issued once a year)

Toyo Ink Group website

WEB https://schd.toyoinkgroup.com/en/

Please go to the "Contact Us" page on the website to provide us with your opinions and comments about this report.

Caution concerning forward-looking statements

The opinions and forward-looking statements contained in this report are our views as of the time of the creation of this re- port. We do not guarantee or promise the accuracy or completeness of this information. Accordingly, future results may differ from those expressed in our forward-looking statements.

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Social

Ensuring Quality and Safety

Pursuit of Customer Satisfaction (CS)

Human Resource Management

Promoting Diversity and Inclusion

Promoting Healthy Work-Life Balance

Health and Productivity Management

Occupational Safety and Health, Process Safety and Disaster Prevention

Respect for Human Rights

Supply Chain Management

Social Contribution Activities

Governance

Corporate Governance

Risk Management

Compliance

Tax Affairs

Intellectual Property Management

ESG Data Collection

Environmental

Social

Governance

GRI Content Index

Group Corporate Profile

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The Toyo Ink Group defines its TSV2050/2030 Sustainability Vision as a medium- and long-term goal of its sustainability activities. The SIC-IImedium-term management plan has set a non-financial goal, which reads "Enhance the value of management resources for sustainable growth" as one of its three pillars. To achieve this goal, we are carrying out sustainability management.

"Enhance the value of management resources for sustainable growth"̶ is an essential structural reform for us to become a more sustainable corporate group. It is based on four themes: Reform of work styles and personnel systems, Advancement of DX, Transformation of the governance system, and Promotion of environmental management. In FY2022, we renamed and reorganized the CSR Generalization Committee into the Sustainability Committee, driving group-wide sustainability activities and establishing a system to support individual sustainability activities in close cooperation with the departments of each Group company. Under this new system, we focused on two sustainability issues that we had identified as insufficient in the past: human rights and CSR procurement.

Specific actions we have taken include the formulation of the Policy on Human Rights in view of global trends in human rights issues, a fundamental revision to the Procurement Principles and the Standard for Selecting Suppliers, and the development and publication of the Sustainable Supply Chain Guidelines. A CSR procurement survey to major suppliers in Japan reveals that nearly 80% of the suppliers agree and assent to the Toyo Ink Group's policy and guidelines.

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As for Promotion of environmental management, we are making positive investments in boosting the capacity to produce materials for lithium-ion batteries and in the development of biomass raw materials and other products of environmental value in a bid to help reduce CO2 emissions from society for achieving carbon neutrality.

The Toyo Ink Group has a corporate philosophy of People -orientedmanagement and understands that strengthening human capital is one of the top priority issues to tack- le. We will also strive to enhance diversity and inclusion (D&I), to create a workplace environment that is fulfilling to workers, and to develop personnel capable of digital transformation (DX.) In January 2023, the D&I Promotion Office was established in the Human Resources Department. Under a new structure, we will speed up our activities. We will respect diverse values and strive to make ourselves an organization where employees with all attributes can display their potential.

In January 2024, we will be making a fresh start after changing our company name to artience Co., Ltd. The name change expresses to all stakeholders, both inside and outside the company, the Group's strong determination to contribute to a new era, to achieve further growth, and to transform into a company that delivers pioneering value to people around the world with cutting-edge technologies amid dizzy- ing changes in the social environment. Please look forward to the Group's major transformation, aimed at achieving the sustainable growth of both the Group companies and society.

TOYO INK GROUP Sustainability Vision

Setting direction and goals by backcasting starting from our ideal corporate image

TSV2050/2030 consists of TSV2050, which indicates a direction to reach our ideal vision with 2050 as the target year, and TSV2030, which sets various interim targets by back- casting toward 2030 as a milestone. We have set goals along three directions: "Providing products and services that realize a sustainable society," "Reducing the environmental impact of manufacturing," and "Building a foundation for trust." We will take initiatives, using TSV2050/2030 as guidance for sustainability activities and aiming to achieve carbon neutral-

ity by 2050, a goal that is included in the SIC-IImedium-term management plan.

The Toyo Ink Group has been aiding the development of society by supplying products and services needed by society at that time to enrich people's lives and culture. That is in line with our corporate philosophy, endeavoring to be a company that contributes to the enrichment of life and culture throughout the world, and our purpose.

TSV2030

TSV2050

◆The percentage of sales from sustainability-enhancing products will be 80%

◆Increasing the number of products able to contribute to the reduction of CO2 emissions throughout their lifecycle

◆Making all products sustainability-enhancing products ◆Helping customers achieve decarbonization

TSV2030

◆CO2 emissions

35% reduction in Japan (from the FY2020 level)

35% reduction overseas (compared to the FY2030 BAU) ◆Amount of waste treated off-site

50% reduction in Japan (from the FY2020 level) ◆Harmful chemical substance emissions

30% reduction in Japan (from the FY2020 level)

TSV2050

◆Achieving net zero CO2 emissions from production activities and minimizing their environmental impact

◆Minimizing waste generation ◆Realizing sustainable water use

TSV2030

TSV2050

◆Sourcing raw materials in ways that are friendly to the environment and good for society

◆Respecting the diversity of employees and co-existing in harmony with the natural environment and local communities

◆Continually restructuring our governance system

◆Continuing to reform and transform our supply chain, human resources, regional activities, and governance from the perspective of environmental and social contribution

Basic approach

In the SIC-IImedium-term management plan launched in 2021, we laid out the vision of being "a company that contributes to a new era through the enrichment of life and culture" with three key policies: (1) Improve the profitability of businesses, (2) Create more priority areas of development, and (3) Enhance the value of management resources for sustainable growth (change of the corporate structure.)

In recent years, awareness of sustainability has been increasing worldwide, including responses to climate change, carbon neutrality, and initiatives for achieving the SDGs. In January 2022, we formulated our TSV2050/2030 sustainability vision, which outlines our ideal vision for driving our corporate activities from a medium to long-term perspective based on three key points: (1) Contributing to sustainability through all of the products and services we provide (Provid- ing products and services that realize a sustainable society,)

1. Minimizing the environmental impact of manufacturing, including carbon neutrality, and (3) contributing reliably to the improvement of social sustainability.
   For more than 120 years since its founding, the Group has continued to provide value demanded by customers and society by leveraging its unique core technologies. The Group's goal of sustainable management is to continue to provide the products and services needed by customers and society, and fulfill its supply responsibilities based on busi- ness continuity, as a company that will continue to be cho- sen by society. We will continue to promote sustainable management by implementing management strategies un- der the SIC-IImedium-term management plan and steadily

Sustainability promotion system (after July 2023)

Board of Directors

executing measures to address material issues, and the goals of TSV2050/2030 that lie beyond.

Promotion system

The Sustainability Committee is chaired by the Group's Chief Sustainability Officer, with the Group CEO as chief supervisor. The committee formulates plans, implements, evaluates, and follows up on all Group-widesustainability-related activities. it also reports regularly to senior management at meetings of the Group Management Committee and the Board of Directors, and receives instructions on how to respond as necessary.

For FY2022, the group-wide meeting of the Sustainability Conference was held in September as in usual years to share the progress of sustainability activities and activity pol- icies. After the meeting, we held training for officers and department managers, which was also open to other personnel wishing to take it, helping them to deepen their understanding of diversity.

In July 2023, the ESG Promotion Office was established as a body that specializes in implementation of ESG activities.

Main sustainability committee themes in FY2022

・Response to climate change (consideration of energy saving measures and introduction of renewable energy, etc.)

・Information disclosure and communication (information disclosure based on the TCFD recommendations, expanding disclosure of non-financial information, etc.)

・Respect for human rights (diversity promotion project, establishment of human rights policy and discussion of activities)

・Promotion of CSR procurement (revision of procurement Principles and Standard for Selecting Suppliers, and establishment of guidelines)

President and Representative Director,

Group CEO

Supervision

Sustainability Committee

Chair: Chief Sustainability Officer (Director)

Secretariat: ESG Promotion Office, Corporate

Communication Department

ESG Promotion Subcommittee

Secretariat: ESG Promotion Office

Compliance Subcommittee

Secretariat: Legal Department

Risk Management Subcommittee

Secretariat: General Affairs Department

Group Management

Committee

Reporting

・Formulating plans, promoting, evaluating and following up the Groupwide sustainability actions (reporting them to management)

・Holding Sustainability Conference (Group-wide meeting) and sharing policies and reports on sustainability activities

・Distribution of information on group-wide sustainability activities to insiders and outsiders

・Advancing Group-wide sustainability activities based on TSV2050/2030

・Practical tasks and promotional activities related to climate change, including information disclosure based on the TCFD recommendations

・Identification of material issues and acceleration of efforts to resolve issues in ESG fields

・Planning and advancing compliance activities for the entire Group, and providing information internally and externally

・Promoting compliance with laws related to management and establishing corporate ethics

・Planning and advancing risk management activities for the entire Group, and providing information internally and externally

・Preventing occurrence of risks and promoting measures for alleviating damages from risks

Cooperation /

Collaboration ESG

Promotion

Office

・Departments that conduct different activities in ESG fields

Working to resolve social and environmental issues through organizational collaboration

In recent years, against the backdrop of growing awareness of the global environ- ment, resources and widespread recognition of the SDGs, demands are now being placed on companies to take measures to help solve social and environmental issues such as achieving carbon neutrality and creating a circular economy. In response to these demands, in FY2022, the Group established the TSV2050/2030 sustainability vision. In FY2023, we will establish the ESG Promotion Office to strengthen our organization, with the aim of further accelerating the next medium -term management plan. It is difficult to achieve environmental targets such as reducing CO2 emissions through activities in the production division alone, so it is crucial to improve efficiency in our sales strategies and reform technical methods and processes. Through interdivisional collaboration and sharing of information and awareness, we will implement comprehensive measures to enhance the feasibility of our sustainability strategy. We will also make efficient use of management resources in these activities to create new value.

Tetsuaki Sato

Director in charge of Sustainability (CSO)

STEP1

Identifying issues

STEP2

Prioritizing material issues

STEP3

Narrowing the issues from stakeholders' perspective

STEP4

Formulating the material

issues

Process of formulating the material issues

Workshops were held with officers̶primarily members of the CSR Promotion Subcommittee (now the ESG Promotion Subcommittee)̶to identify potential material issues to be addressed, including international guidelines, material issues for chemical manufacturers, aspects in which the Group is expected to have a significant impact on the economy, society, and the environment.

Based on the candidate material issues identified, the CSR Promotion Committee (now as CSR Promotion Subcommittee) mapped the issues, with coordinate axes of materiality for stakeholders and materiality for the Toyo Ink Group. Thus, the Committee narrowed the candidate issues down to high-priority ones.

WEB For the results of mapping of the material issues identified, see page 38 of Integrated Report 2023.

The members of the CSR Promotion Subcommittee (now the ESG Promotion Subcommittee) responsible for identifying material issues then further narrowed down the key issues through continuous internal and external communication, such as dialogues with external experts and internal workshops.

We organized the material issues that were narrowed down, ideal states, boundaries (extent of their impact,) and other points, thereby clarifying the five material issues, position of each, and relationships between them. After approval by the CSR Management Committee (now the Sustainability Committee) and the Group Management Committee, we formulated a set of material issues in FY2017 and began activities based on them in FY2018.