Conserving Energy and Reducing Greenhouse Gas Emissions

Seeking to contribute to a carbon-neutral world, Toray Group pursues initiatives for reducing greenhouse gas emissions. In the Toray Group Sustainability Vision announced in July 2018, the Group set out the target of reducing greenhouse gas emissions¹ from production activities per unit of revenue by 30% compared with the baseline year of fiscal 2013 across the entire Toray Group worldwide as a quantitative target for fiscal 2030. In its CSR Roadmap 2022, the Group set out an interim target of reducing greenhouse gas emissions per unit of revenue¹ Group-wide by 20% by fiscal 2022 compared with fiscal 2013. As a result of efforts to reduce CO₂ emissions during manufacturing by conserving energy with improved manufacturing processes, increasing utilization of renewable energy, and reducing coal consumption, the Group reduced greenhouse gas emissions per unit of revenue by 34.6%² by the end of fiscal 2022.
In March 2023, the target set out in the Toray Group Sustainability Vision for reducing greenhouse gas emissions from production activities per unit of revenue was raised significantly from a 30% reduction compared with the baseline year of fiscal 2013 to a reduction of more than 50%¹. The Group also set a target of reducing absolute greenhouse gas emissions for Toray Group in Japan by at least 40%¹ compared to fiscal 2013, thereby accelerating the Toray response to climate change.

1. 1 Scope 1 (direct emissions from plants, offices, and vehicles, etc. owned by the Group) and Scope 2 (indirect emissions resulting from the production of electricity and other energy consumed by the Group) emissions.
2. 2 Until FY 2022, this was calculated by multiplying the GHG emissions and revenue of individual subsidiaries worldwide by the applicable Toray Industries' equity share. Starting in FY 2023 however, the calculation method will change, and the degree of financial control Toray Industries has over the individual subsidiary (not the equity share) will be used, in accordance with the GHG Protocol, the international standard. Under the latter calculation method, the reduction is 32.7%.

Toray Group sets annual energy-conserving targets for each company and plant and promotes group-wide energy-conserving activities.
It also checks the progress of its energy-conserving measures on a monthly basis.
Toray Industries is promoting energy-conserving activities with a goal of reducing its per-unit energy consumption³ by 2% annually.
In fiscal 2022, energy consumption decreased by 5.9% year on year due to more efficient use of energy and efforts to reduce energy waste and loss. However, per-unit energy consumption deteriorated 6.9% year on year due to a 12.0% reduction in production volumes, while improved 14.6% compared to the baseline year of fiscal 1990.

1. 3 Energy consumption per converted production volume

1. 4 The energy consumption shown in this graph does not include renewable energy.

Toray Group's greenhouse gas emissions (Scope 1 and 2) reduction target was established in the CSR Roadmap 2022. The Group as a whole implemented systematic reduction measures with the goal of achieving a 20% reduction of greenhouse gas emissions per unit of revenue by fiscal 2022, compared to fiscal 2013.
Overall greenhouse gas emissions (Scope 1 and 2) for Toray Group in fiscal 2022 decreased by 10.9% year on year to 4.89 million tons-CO₂ equivalent. In terms of per unit of revenue, the Group reduced emissions by 34.6%⁵ compared to the baseline year of fiscal 2013. This reduction was due to efforts to reduce greenhouse gas emissions to the bare minimum (energy-conserving through process improvement, utilization of renewable energy, and reduction of coal use at group plants outside of Japan, etc.), as well as an increase in sales revenue groupwide.

1. 5 Until FY 2022, this was calculated by multiplying the GHG emissions and revenue of individual subsidiaries worldwide by the applicable Toray Industries' equity share. Starting in FY 2023 however, the calculation method will change, and the degree of financial control Toray Industries has over the individual subsidiary (not the equity share) will be used, in accordance with the GHG Protocol, the international standard. Under the latter calculation method, greenhouse gas emissions are 5.66 million tons in FY 2013 and 5.12 million tons in FY 2022, which means a 32.7% reduction per unit of revenue in FY 2022 compared to FY 2013.

Note: Per unit of net sales until fiscal 2019, as Japanese GAAP was used until then, and per unit of revenue from fiscal 2020 onwards, as International Financial Reporting Standards (IFRS) have been adopted since then. Figures for the baseline year of fiscal 2013 are recalculated to include companies that joined Toray Group in fiscal 2014 or later.

Reduction of Coal Use at Plants Outside of Japan

Transformer substation at P.T. Indonesia Toray Synthetics

P.T. Indonesia Toray Synthetics ceased coal-fired power generation in 2021 and switched to purchased power, reducing CO₂ emissions by 250,000 ton-CO₂ per year.

Toray Group Greenhouse Gas Emissions (Scope 3)

In addition to Scope 1 (direct emissions from plants, offices, and vehicles, etc. owned by the Group) and Scope 2 (indirect emissions resulting from the production of electricity and other energy consumed by the Group), Toray Group also calculates Scope 3 emissions (other indirect emissions).

Toray Group Scope 3 Emissions

(10,000 tons-CO₂eq）

Note: Toray is currently working to identify and calculate Scope 3 emissions for all of Toray Group.

Calculation Method for Scope 3 Categories

1. * The number of companies included in the calculations differs by category.

In fiscal 2022, greenhouse gas emissions (Scope 1 and 2) at Toray Industries and its group companies in Japan decreased by 16.1% compared to the previous fiscal year. Greenhouse gas emissions per unit of revenue improved by 9.2% compared to the previous fiscal year, due to efforts to reduce emissions and an increase in sales revenue. This resulted in a 33.2% reduction compared to fiscal 2013.

Note: Per unit of net sales until fiscal 2019, as Japanese GAAP was used until then, and per unit of revenue from fiscal 2020 onwards, as International Financial Reporting Standards (IFRS) have been adopted since then.

Toray Group is systematically installing renewable energy systems. It installed and started to operate a solar power generation system at the Basic Research Center (Kamakura) in fiscal 2022. Outside of Japan, Toray Resin Co. (United States) has also begun operation of a solar power generation system, as well.
In addition, the Tokai Plant of Toray Industries began co-combusting sludge fuel, which is carbon neutral, as boiler fuel from fiscal 2017.

• Solar power generation system at Toray Industries Basic Research Center (Kamakura)
• Solar panels installed on Toray Resin Co. (United States) grounds

Effective Use of 100% Renewable Electricity at the Headquarters of Toray Industries

Toray Industries signed a green power supply service⁶ agreement with Mitsui Fudosan Co., Ltd. for the Toray head office located in Tokyo's Nihonbashi Mitsui Tower.
By utilizing, through Mitsui Fudosan, the environmental value of the wind power facilities that Electric Power Development Co., Ltd. operates, Toray’s head office has effectively used 100% renewable energy since April 2022. On a global basis, the estimated annual reduction in greenhouse gas emissions should be around 1,500 tons-CO₂.
In April 2023, the Nagoya Branch of Toray Industries, which is located in the Nagoya Mitsui New Building, introduced a Green Power Supply Service and has switched virtually all of its electricity use to 100% renewable energy.

1. 6 Green power supply service: A unique service developed by Mitsui Fudosan that uses non-fossil fuel energy certificates to provide electricity to the tenants of its office buildings, which is effectively generated using 100% renewable energy.

Initiatives to Protect the Ozone Layer

Toray Industries ceased using chlorofluorocarbons (CFCs) in all manufacturing processes and stopped purchasing CFCs for use in refrigeration equipment in 1994. The Company finished upgrading refrigeration equipment using CFCs in fiscal 2019.