Daiseki : ＥＳＧ Ｒｅｐｏｒｔ ２０２１

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Top Message

Addressing Five Priority Issues to Become the No. 1 Recycling Company in Asia and Help Realize a Sustainable Society

Steady Efforts Aimed at Achieving the VISION 2030 Long-term Vision

With industrial waste liquid recycling as our core business for more than 60 years since our founding, the Daiseki Group has grown into one of Japan's leading resource recycling companies. In 2018, we formulated VISION 2030, our long-term management vision for FY2031, with the aim of becoming the No. 1 recycling company in Japan and throughout Asia,

both in terms of quality and quantity.

In FY2021, ended February 28, 2021, the social environment underwent tremendous changes due to the spread of COVID-19, significantly impacting the Daiseki Group's business. However, business is steadily improving in line with the resumption of production by customers in the manufacturing industry. The challenge in FY2022 will be returning business performance to pre-COVID-19 levels and achieving even more.

Under VISION 2030, we are targeting consolidated net sales of JPY150bn and operating profit of JPY25bn

in FY2031, which will be achieved by developing businesses in three main locations, establishing three new core businesses and capturing a 30% market share at its core domestic businesses. In April 2021, the Daiseki Group announced its Medium-term Management Plan for the period FY2022-2024, which sets targets for the achievement of VISION 2030. The new Harima plant will commence operations by FY2023, and by FY2024, we will enhance processing capabilities at our Kansai, Kyushu and Kanto Works in an attempt to expand business.

From FY2022 onward, we will continue to expand market share in Japan through the acquisition of new customers and M&A projects. We are also examining and reviewing new sites in collaboration with related departments. We solicited new business ideas from employees three times and are considering commercializing some of these proposals. In these ways, we will continue working to establish these three pillars.

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Vision 2030 Long-term Vision

Daiseki aims to triple net sales and operating profit compared to FY2018 and become the sun of the industrial waste industry.

Promoting Five Priority Issue Initiatives in Line with the SDGs

The Daiseki Group has identified five priority issues: environment, people, safety, communities and society, and compliance, and promotes initiatives in line with the United Nations Sustainable Development Goals (SDGs) for realizing sustainable communities and society.

Among these issues, the environment is at the heart of Daiseki Group business, which contributes to the creation of a recycling- oriented society through the appropriate treatment and recycling as a resource of wastewater, waste oil, sludge and other waste generated from customer production activities.

In October 2020, the Japanese government declared its commitment to achieving carbon neutrality (virtually zero greenhouse gas emissions) by 2050 with the aim of realizing a carbon-free society. As the movement toward decarbonization spreads across the world, there is growing demand for recycled fuel manufactured and sold by Daiseki as a substitute for coal. To meet these needs, we are moving forward with capital investments based on long-term plans to increase the processing capacity and recycled fuel production capacity of each site.

In terms of people, we aim to realize comfortable workplaces for employees and operational efficiency through various measures including paperless offices and the promotion of systematization. Going forward, we will continue to create comfortable workplaces facilitating employee physical and mental health with the aim of being certified as an Outstanding Health & Productivity Management Company by the Ministry of Economy, Trade and Industry.

Safety and compliance are positioned as the basis of our activities. Safety efforts include the promotion of Company-wide work accident prevention activities and safety countermeasure enhancements.

With respect to communities and society, the entire Group engages in activities that contribute to communities and societies. For example, in FY2021, Daiseki Eco. Solution received a letter of commendation from the Minister of the Environment for assisting with the transportation of wastewater from the Diamond Princess cruise ship stranded due to COVID-19. Regarding compliance, again in FY2021 we held study sessions for all employees on important themes in line with annual planning. Employees conducted discussions during these study sessions, initiating an interactive approach to answering questions raised.

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Coverage

Daiseki Five Priority Issues and Related SDGs

We strive to promote recycling based on the philosophy of "making the best use of limited resources" and work to prevent odors and other adverse impacts and reduce burdens on the environment.

While fulfilling our responsibilities as a company involved in recycling, Daiseki promotes a work-life balance through the pursuit of meaningful work and lifestyles for all employees.

Daiseki takes great care in the handling of waste containing highly dangerous and harmful chemical substances with the aim of eliminating accidental spills and chemical reactions.

▷ Local Communities Related SDGs No.12,17

Without understanding from the people living near our facilities, Daiseki would not be able to engage in business. We strive to exchange opinions, engage in dialogues and perform community contribution activities.

This is the most important issue for the Daiseki Group, which operates business under a license from the local government, thus we make an effort to provide continuous education and training to increase employee awareness.

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