Toray Group’s Approach to Climate Change

Toray Group is committed to its current corporate philosophy of “contributing to society through the creation of new value.” This is in keeping with a principle since Toray’s foundation in 1926 that corporations are public institutions that should contribute to society through business. Based on this corporate philosophy, Toray Group has for many decades focused on creating innovative technologies and advanced materials that provide solutions to various social challenges, including global environmental issues, and has helped to build a sustainable world.

The Group will help to reduce global greenhouse gas emissions and help to realize a carbon neutral world by 2050 by expanding the Sustainability Innovation (SI) Business that have long been a Toray focus, including renewable energy, hydrogen, and materials for electrification, and by developing products that help with greenhouse gas absorption, such as CO₂ separation membranes.
In addition, Toray Group aims to reduce its own greenhouse gas emissions (Scope 1 and Scope 2) and become carbon neutral by 2050. It will do this by expanding the Sustainability Innovation Business, which in return will provide Toray Group with sustainable energy and raw materials, as well as by developing and introducing innovative processes and CO₂ recycling technology that utilize CO₂ as a resource. Moreover, the Group is also committed to promoting the reduction of Scope 3 emissions that will reduce greenhouse gas emissions throughout the entire supply chain.
To accelerate initiatives to address climate change, the Group established the Sustainability Committee, chaired by the president, as an organization that oversees measures to combat climate change, as well as the Climate Change Subcommittee and the Circular Economy Subcommittee that work under the committee's auspices, in April 2021. The Climate Change Subcommittee works to reduce greenhouse gas emissions (Scope 1 and Scope 2) at Toray Group, as well as greenhouse gas emissions throughout the entire supply chain (Scope 3). The Circular Economy Subcommittee has formulated policies and action plans to promote a circular economy as an integral part of initiatives to address climate change. Progress on these activities is regularly reported to the Board of Directors.

Further, in order to achieve carbon neutrality in 2050, Toray Group recognizes the need to make changes and take a leap in technological innovation based on non-conventional ideas, as well as the need for efforts that are not limited to single corporations, but involve industry, government, and broader society working together to achieve this goal. The Group holds discussions and pursues dialogue with affiliated economic organizations, industry associations, and government, working with these entities to achieve the goals of carbon neutrality and the Paris Agreement by 2050.

Major Affiliations: Organizations/Committees/Subcommittees (partial list)

• Nippon Keidanren (Japan Business Federation): Sub-Committee on Global Environment, Committee on Environment
• Japan Association of Corporate Executives: Environment and Energy Committee (Report in Japanese)
• Japan Chemical Industry Association: Technical Affairs Committee
• Japan Chemical Fibers Association
• Japan Environmental Management Association for Industry

In May 2019, Toray Group declared its support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and has proactively disclosed Group information in accordance with these TCFD recommendations.

Toray Group will continue to accelerate its pursuit of sustainable growth for the Group and initiatives to address climate change, as well as actively disclose information in accordance with the TCFD recommendations.

<Toray Group Efforts to Date>

One of the corporate commitments presented in Toray Group’s Long-Term Corporate Vision, AP-G 2000, introduced in 1991, was to play an active role in protecting the global environment, and in the same year, the Group established the Global Environment Research Laboratory. In the following year (1992), the management of Toray Group affirmed its determination to take active steps to address global environmental issues, one of which was the formation of the company-wide Global Environment Committee.
In 2000, Toray Group formulated its Three-Year Environmental Plan of medium-term environmental preservation goals, which included targets for reducing greenhouse gas emissions. The Group continued to pursue activities in line with this plan through its Fifth Medium-Term Environmental Plan (targets set for FY2020).
In 2009, Toray Group established its Global Environment Business Strategic Planning Department under the direct control of the president for the purpose of promoting and supporting company-wide plans, development, and business integration of Toray Group global environment business strategies. Since 2011, under the Group’s Long-Term Corporate Vision AP-Growth Toray 2020, this department has been central in efforts to expand the Group’s Green Innovation businesses and promote Toray products and services that provide solutions to global environmental challenges and issues related to resources and energy.
Moreover, in the face of the increasing severity of such global environmental challenges as climate change, in July 2018 Toray Group announced the Toray Group Sustainability Vision, which sets out Toray Group initiatives and quantitative targets for fiscal 2030 with a view to realizing the World as Envisioned by Toray Group in 2050. The Group has continued to focus on promoting efforts to achieve this vision. In May 2020, Toray Group announced its Long-Term Corporate Vision, TORAY VISION 2030－Achieving sound, sustainable growth and creating social value, which runs through the end of fiscal 2030. At the same time, the Group released its Medium-Term Management Program, Project AP-G 2022 “Resilience and Proactive Management”－Sustainable Growth and New Development, which covers the three-year period starting in fiscal 2020.
Based on its core values of contributing to society through its business activities, management from a long-term perspective, and people-centric management, Toray Group has established TORAY VISION 2030 with the aim of providing new value to society by focusing on the four perspectives of the world envisioned under the Toray Group Sustainability Vision. This will be achieved by sharing Toray's management strengths in R&D, sales & marketing, and production, and by pursuing co-creation with the customers and business partners that make up the supply chain, all with a materials-oriented approach.

<Progress on Project AP-G 2025 Sustainability Goals>

	FY 2022 Forecast2	FY 2025 Target2
Revenue from Sustainability Innovation (SI) Business	1,300 billion yen (2.3-fold)	1,600 billion yen (2.8-fold)
CO2 emissions avoided in value chain	9.5-fold	15.0-fold
Water filtration throughput contribution by Toray’s water treatment membranes	2.4-fold	2.9-fold
Greenhouse gas emissions per unit of revenue1 in production activities	26% reduction	40% reduction
Greenhouse gas emissions of Toray Group in Japan	18% reduction	20% reduction
Water usage per unit of revenue1 in production activities	27% reduction	40% reduction

1 FY 2013 results are based on net sales (J-GAAP)
2 Each relative ratio is calculated in comparison to FY 2013

In 2022, Toray Group newly established the Environmental Solutions Department within the Corporate Marketing Planning Division for the purpose of promoting and supporting Group-wide plans, development, and business integration of Toray Group circular economy strategies.