Fiscal 2022 Highlights of Sustainability Activities

• Continue with self-led conservation activities.

• Continue to be open to the public and communicating externally, including regular dialogue with schools.

• Promoted conservation through voluntary activities (maintenance by the relevant parties) and site-wide activities (beautification activities within business sites).

• Public exhibitions were still being canceled as a measure to prevent the spread of COVID-19, so there were no visitors from the general public.

• Thanks to ongoing dialogue with schools, 365 schoolchildren visited on school excursions—the highest number ever. Also, visiting guest lessons were presented at four schools (for a total of 356 students).

• Continue with self-led conservation activities.

• Continue to be open to the public and communicating externally, including regular dialogue with schools.

• Continuing to support forest thinning mainly in Iwate Prefecture through the use of Paper Products that Contribute to Forest Thinning (Forest Neighborhood Association).

• Continuing to support forest thinning mainly in Iwate Prefecture through the use of Paper Products that Contribute to Forest Thinning (Forest Neighborhood Association).

• Continuing to support forest thinning mainly in Iwate Prefecture through the use of Paper Products that Contribute to Forest Thinning (Forest Neighborhood Association).

• Strengthening the comprehensive management system: Preparation of raw materials data. System efficiency study on REACH quantity monitoring.

• Promotion of compliance with laws and regulations in each country: Monitoring information and establishing policies for the revision of laws and regulations concerning chemical substances in Japan and overseas. Implementation of measures accompanying the revision of the PRTR Law and Industrial Safety and Health Act.

• Utilized quantity counting functions of Japanese Chemical Substances Control Act such as REACH to check the chemical substance content, and made a report about it in 2022.

• Complete revision of SDSs in response to revision of PRTR Law. We are still implementing our response to the revision of and Industrial Safety and Health Act.

• Promotion of compliance with laws and regulations in each country: Monitoring information and establishing policies for the revision of laws and regulations concerning chemical substances in Japan and overseas. Continued implementation of measures accompanying the revision of Industrial Safety and Health Act. Response to changes in chemical regulations, particularly in the EU.

• Japan: Nine business sites under our direct control/belonging to subsidiary companies.
Overseas: Specify priority business sites in China, Southeast Asia, as well as North America and Europe.

• Improve system to further enhance internal audits.

• Japan: Nine business sites under our direct control/belonging to subsidiary companies.
Overseas: Carried out at 1 business site in China, Southeast Asia, North America, and Europe.

• In order to enhance internal audits, we included guidance on how to review the content of questions and identify and correct issues in our training to facilitate deeper exploration of issues in a unified manner.

• Japan: Nine business sites under our direct control/belonging to subsidiary companies.
Overseas: Specify priority business sites in China, Southeast Asia, as well as North America and Europe.

• Improve system to further enhance internal audits.

• Secure stable procurement of raw materials affected by carbon neutrality.

• BCP measures for special raw materials produced by SB-Kawasumi are implemented.

• Secure stable procurement of green chemicals.

• Secure power derived from renewable energy in Japan after 2023, and pursue investigation and introduction of solar and biomass power generation at domestic and overseas bases.

• Begin investigation of and evaluation of alternatives to raw materials affected by carbon neutrality.

• List the raw materials at risk for SB-Kawasumi, and prepare and implement a BCP response plan.

• Secure Bio-PE, ensure supply framework for furfuryl alcohol, and conduct market research into bio-phenol and bio-methanol.

• Secure sufficient power derived from renewable energy for business sites in Japan in 2023, and increase amount of solar power generated by 3.4 times in Japan and 15.6 times overseas compared to 2021.

• Investigate use of minerals survey templates in relevant supply chains for existing raw materials in order to continue our efforts for responsible mineral procurement.

• Conduct surveys of major suppliers using CSR check sheets.

• Secure stable procurement of green chemicals.

• Support procurement of power derived from renewable energy and adoption of solar power generation.

• Activities conducted until last year will continue, and we will also strengthen human resource development elements to ensure customer trust. In particular, personal know-how is shared.

•We held face-to-face business briefings with trading firms for the first time in three years, and were able to interact with customers while introducing actual products.

• We exhibited at mobility-related exhibitions (Automotive Engineering Exposition 2022, Car-Ele Japan 2023), and IoT-related exhibitions (CEATEC 2022). Approximately 2,000 customers came to our booths, where we conducted business negotiations and introduced our latest initiatives for addressing social issues such as the environment and SDGs.

• Promote making activities visible and encourage change in employee awareness to take the extra step beyond “customer satisfaction” to “impressing customers.” Under our policy of “making customer satisfaction (CS) a top priority,” our CS Promotion Committee highlights QCDS activities throughout the entire company, and strives to implement CS activities that facilitate participation by departments with few points of contact with customers, as well as employees at overseas locations and subsidiaries.

• Develop and update contents for information dissemination tools through a wide range of media including external advertising, billboards, and websites.

• Provide company-wide support for social contribution activities.

• Continued to provide support for the Japan Inclusive Football Federation, which the company signed a partnership agreement with.

• Develop and update contents for information dissemination tools through a wide range of media including external advertising, billboards, and websites.

• Provide company-wide support for social contribution activities.

• Expanding ratio of revenue from SDG-contributing product and technology sales
Fiscal 2023 target: 50% or higher.

• Expanding ratio of net sales from SDG-contributing product and technology sales
2020 37.2% ⇒ 2021 47.8% ⇒ 2022 54.5% greater.

• Expanding ratio of revenue from SDG-contributing product and technology sales
Fiscal 2023 target: 50% or higher
(Progress toward fiscal 2030 target of 70% or higher).

• Continue to carry out employee training at SB School.

• Continue to carry education for management staff.

• A total of approximately 29,000 employees attended, Approx. 43,000 hours of education provided.

• Continue to carry out employee training at SB School.

• Continue to carry education for management staff.

• Continue a ratio of female career-track recruits of 20% or greater.

• Ratio of female hirees: 26% (7 of 27 hirees recruited upon graduation).

• In September 2022, we declared our commitment to promoting Diversity, Equity, and Inclusion (DE&I) as our first step toward promoting the empowerment of women.

• Conduct training for both executive level and management level.

• Continue a ratio of female career-track recruits of 20% or greater.

• Establish DE&I Promotion Office.

• Establish Women's Empowerment Working Group.

• Conduct education and awareness-raising activities with the goal of increasing the ratio of female employees in management positions to 5% by 2025.

• Start activities for LGBTQ people, and employees with employment restrictions due to nursing care, disabilities, etc.

• Employment rate for people with disabilities: Maintain statutory employment rate of 2.3% or more.

• Continue internships for people with disabilities.

• Employment rate of people with disabilities: 2.72%.

• Internships accepted from schools for the deaf: Two from two schools, one of whom will be hired in April 2024.

• Employment rate for people with disabilities: Maintain statutory employment rate of 2.5% or more
(From March 2024, the statutory employment rate is set to increase to 2.5%).

• Continued internships for people with disabilities.

• Continue to support work with both childcare & nursing care.

• Promotion of taking of birth leave and parental leave for men.

• Shorten prescribed work hours for shift workers

• Increase the number of days of simultaneous downtime at the production plant.

• A 100% rate of returning to work after taking childcare leave (No nursing care leave taken).

• Childcare leave participation rate in fiscal 2022: 25.9% for men, 100% for women.

• Implementation of regular working hours for shift workers: 1,849 hrs/yr ⇒ 1,834 hrs/yr (▲15 hrs).

• Increase in the number of days of simultaneous downtime at production plants: 20 days/yr ⇒ 22 days/yr.

• Relaxation of the number of consolidated working hours at production sites: 10 times/yr ⇒ 8 times/yr.

• Continue to support work with both childcare & nursing care.

• Continued promotion of the taking of birth leave and parental leave for men.

• Flexible start time when working from home.

• Increased number of days of annual paid leave.

• Expansion of menstrual leave.

• Liberalization of dress codes at work.

• Continue implementing the Data Health Plan, preventing the worsening of illnesses in our company and certain Group companies in Japan.

• Continue to achieve a 100% rate of employees receiving regular scheduled health checks.

• Increase the specific health guidance rate.

• Continued efforts to prevent illnesses from becoming severe.

• Achieve a 100% rate of employees receiving regular scheduled health checks.

• Continue implementing the Data Health Plan, preventing the worsening of illnesses in our company and certain Group companies in Japan.

• Continue to achieve a 100% rate of employees receiving regular scheduled health checks.

• Increase the specific health guidance rate.

• Achieve recognition under Certified Health and Productivity Management Organization Outstanding Recognition Program.

• Revision of Our Code of Conduct and establishment of Group Code of Ethics (replacing existing Group Code of Business Ethics and Conduct).

• Partial revision of the Compliance Reporting System with the revision of the Whistleblower Protection Act in mind.

• Promoting compliance awareness activities (dissemination of our Code of Conduct, Group Code of Ethics and whistle-blowing system, review of Compliance Slogans, in-house newsletters, e-learning training, etc.).

• Completed revision of our Code of Conduct and establishment of the Group Code of Ethics in July 2022.

• Completed revision of Compliance Whistleblower System in June 2022.

• Conducted compliance awareness activities in October 2022.

• Implementing company-wide compliance training in the Compliance Enhancement Month (Our Code of Conduct, Group Code of Ethics, overview of internal whistleblowing system etc.).

• Compliance awareness by publishing ”Way to Become a Compliance Master!” (4-panel comics + commentary) in our in-house newsletter.