Establishing Sustainable Supply Chain

Toray Group CSR Procurement PoliciesRevised March 2022¹

1. Establish an internal CSR organization to facilitate CSR initiatives throughout the supply chain and sincerely committed to it.
2. Promote fair transactions grounded in corporate ethics, and comply fully with all laws and regulations, as well as social norms inside and outside Japan, when making purchases.
3. Take into account the impacts that purchasing activities have on the labor environment and health and safety. Also, engage in risk management through, for example, responding swiftly to unexpected situations and disclosing accurate information.
4. While appropriately managing chemical substances, pursue raw materials procurement that takes into account impacts on the environment such as green procurement and green purchasing.
5. Promote dialogue and cooperation with business partners and other stakeholders.
6. Maintain and strive to improve product quality and safety.
7. Respect human rights, eliminate all forms of discrimination, and strive to improve workplace environments. Additionally, do not be complicit in the infringement of human rights in the supply chain, such as through forced labor, slave labor, child labor, and unjust low-wage labor.
8. Do not use minerals from conflict regions or high risk regions, nor minerals that clearly contribute to conflicts or infringe upon human rights.
9. Prevent leaks of confidential information and respect intellectual property rights.
10. In selecting business partners, take into account their CSR initiatives, such as compliance with laws and regulations, respect for human rights, environmental preservation, and the like, while seeking strict adherence to the Toray Group CSR Procurement Guidelines and facilitating CSR initiatives throughout the supply chain.

1. 1 Approved by a resolution of the Board of Directors, the Toray Group CSR Procurement Policies are the new and revised version of the earlier CSR Procurement Guidelines, which were formulated in 2004.

Toray Group CSR Procurement GuidelinesFormulated March 2022

The major contents of the new CSR Procurement Guidelines formulated in March 2022 are as follows.

1. Ethics and Compliance
   1. (1) Legal Compliance
   1. Strictly adhere to the laws and regulations of each country and region, and carry out business activities grounded in corporate ethics. Establish compliance policies and build a framework and training system in order to ensure thorough compliance.
   2. (2) Strict Adherence to Competition Laws
   1. Refrain from conduct that obstructs fair competition, such as unjust transaction restrictions (private monopolies, cartels, bid rigging, etc.), as well as unfair trade practices or abusing a dominant bargaining position.
   3. (3) Preventing Corruption and Prohibiting Bribery
   1. Do not, for the purpose of obtaining improper advantage, provide to or solicit money or goods (including facilitation payments) from parties concerned, and do not provide or accept gifts or hospitality exceeding the acceptable range of social norms. Furthermore, do not engage in illegal political donations and the like.
   4. (4) Prohibition against Behavior that Presents a Conflict of Interest
   1. Do not engage in behavior that is against the interest of the Company and in the interest of yourself, a business partner, or a third party, and do not accept inappropriate demands from Company customers or employees of business partners.
   5. (5) Protecting Confidential Information and Personal Information
   1. Strictly adhere to each country and region's laws and regulations on business partner, third party, and Company employee information, as well as business partner and third party confidential information. Obtain said information, strictly manage and protect said information, and use it within an appropriate scope of business.
   6. (6) Whistle-blowing System and Whistle-blower Protections
   1. Establish a system for Company employees and business partners to report legal and statutory violations, as well as matters of concern related to the business. Safeguard whistle-blowers to ensure that they are not subject to termination, threats, harassment, or other disadvantages, nor are they subject to retaliation.
   7. (7) Appropriate Import/Export Management
   1. Follow appropriate import/export procedures and properly manage the import/export of technologies and products subject to the laws and regulations of each country and region.
   8. (8) Respect for and Safeguarding of Intellectual Property
   1. While appropriately safeguarding the Company's intellectual property, demonstrate respect for the intellectual property of third parties and do not infringe upon their intellectual property rights.
   9. (9) Appropriate Information Disclosure
   1. Engage in the timely and appropriate disclosure to stakeholders of management, financial, business activity, and other information stipulated for disclosure in the laws and regulations of each country and region. Also, strive for mutual understanding and the maintenance and enhancement of trusting relationships with stakeholders through communication.
   10. (10) Responsible Procurement of Mineral
   1. Carry out procurement activities with due consideration so that raw materials, such as minerals, contained in our products do not contribute to human rights violations, environmental destruction, or conflicts in the areas in which they are produced. If there are materials of concern, carry out measures to avoid their use.
2. Safety, Accident Prevention, and Risk Management
   1. (1) Occupational Safety Management
   1. In order to protect the safety and health of employees, ensure that equipment, working conditions, and working procedures are safe. While adhering to the labor laws and regulations of each country and region, strive to avoid occupational accidents by establishing educational programs and safety measures to prevent incidents.
   2. (2) Occupational Health Management
   1. Assess the work environments of each workplace, including chemical substance control, noise, odors, etc., and, while establishing measures to avoid injuries to health, strive to manage employee health through regular health exams and the like.
   3. (3) Responding in Times of Emergency
   1. In order to protect lives and physical well-being, forecast potential disasters, diseases, etc. and prepare and disseminate response measures for times of emergency.
   4. (4) Business Continuity Plan (BCP) Initiatives
   1. In order to maintain the continuity of business activities, identify risks that may interfere with business and carry out initiatives for preventing and mitigating those risks.
3. Environmental Preservation
   1. (1) Environmental Management
   1. While strictly adhering to the environmental laws and regulations of each country and region, build a company-wide management framework for promoting environmental activities and strive to continually utilize and improve those frameworks.
   2. (2) Reduce Emissions of Greenhouse Gases
   1. Control greenhouse gas emissions in business activities and promote activities that continually reduce those emissions, while striving to effectively utilize energy.
   3. (3) Minimize Impacts on the Environment
   1. Manage and reduce emissions of substances that have an impact on the environment, and strive to prevent air, water, and soil pollution.
   4. (4) Resource Reduction and Waste Product Management
   1. Appropriately handle waste products, mitigate waste production, promote recycling, and strive to effectively utilize resources.
   5. (5) Chemical Substance Management
   1. While endeavoring to keep products free of chemical substances legally prohibited by each country and region, appropriately manage and handle chemical and other substances released into the outside environment.
   6. (6) Concern for Biodiversity
   1. While preserving biodiversity and striving for its sustainable use, engage in raw materials procurement that takes biodiversity into account.
4. Product Quality and Safety
   1. (1) Maintain and Improve Quality
   1. Strive to improve quality while building frameworks for appropriate quality control and quality assurance, and maintaining quality that meets expectations.
   2. (2) Product Safety
   1. Strictly adhere to the laws, regulations, and standards of each country and strive to ensure product quality and safety. In the event that a quality issue does arise, handle it promptly and appropriately.
5. Human Rights Promotion
   1. (1) Respect for Fundamental Human Rights and Elimination of Discrimination and Harassment
   1. Respect fundamental human rights and, in all aspects of employment, including recruiting, hiring, placement, compensation, training, and resignation, do not engage in any discriminatory treatment on grounds of race, creed, color, sexuality (including gender identify and sexual orientation), religion, nationality, language, physical characteristics, economic status, place of origin, etc., and do not engage in any form of harassment.
   2. (2) Prohibition of Child Labor and Due Consideration toward Young Workers
   1. Do not hire workers who do not meet the eligible working age stipulated by the laws and regulations of each country and region. Additionally, exercise particular consideration for the health and safety of employees under the age of 18, based on the laws and regulations of each country and region.
   3. (3) Prohibition of Forced Labor and Slave Labor
   1. Do not utilize forced, compulsory, involuntary, exploitative, or slave labor, nor labor obtain through human trafficking. Additionally, no forms of work shall be forced and employees shall be assured the ability to voluntarily end their employment.
   4. (4) Wages and Benefits
   1. Make payments appropriately and strictly adhere to the laws and regulations of each country and region regarding minimum wage, overtime work, payroll deductions, piecework payments, and other allowances. Additionally, do not carry out any unjust wage reductions.
   5. (5) Working Hours
   1. Strictly adhere to the laws and regulations of each country and region regarding the determination of employee work hours and holidays, and the granting of annual paid leave.
   6. (6) Dialogue and Cooperation with Employees
6. Facilitating CSR initiatives throughout the Supply Chain
   1. (1) Request for Initiatives to Business Partners
   1. While requesting that suppliers, contracted processors, and other business partners strictly adhere to the provisions of these Guidelines or their equivalent, work to thoroughly promote these Guidelines through regular surveys and inquiries on the status of implementation by business partners.

Basic Purchasing PoliciesRevised March 2022

1. Toray does its utmost to select suppliers and determine actual purchases fairly and on the basis of economic rationality, with consideration for price, quality, capability to provide stable supplies, technological capabilities, reliability, and other factors.
2. In selecting suppliers, Toray opens its doors to a wide range of companies inside and outside Japan. Toray does not rely solely on vendors it has existing or past relationships with, or on members of its corporate group.
3. Toray works to maintain and improve the quality of purchased products through cooperation with its suppliers.
4. Toray strictly adheres to its Toray Group CSR Procurement Policies and Toray Group CSR Procurement Guidelines, and works to promote purchasing that upholds Toray’s corporate social responsibilities on a company-wide basis.

Basic Distribution PoliciesRevised March 2022

1. Toray does its utmost to select transport and warehousing providers and determine individual agreements impartially and based on factors such as economic rationality with consideration given to price, quality, supply stability, technological capabilities, reliability, and efforts to reduce environmental impact.
2. In selecting transport and warehousing providers, Toray opens its doors to a wide range of companies, rather than relying exclusively on companies with which we have done business in the past or companies affiliated with Toray Group.
3. Toray works to cooperate with our transport and warehousing providers in gauging and reducing the environmental impact of our transport and warehousing operations.
4. Toray strictly adheres to its Toray Group CSR Procurement Policies and Toray Group CSR Procurement Guidelines, and works to promote distribution activities that uphold Toray’s corporate social responsibilities on a company-wide basis.