TOKYO ELECTRON LIMITED

TEL's Sustainability

Sustainability and Framework of Corporate Principles

Tokyo Electron’s sustainability initiatives are the practice of its Corporate Philosophy through achieving its vision. We make clear the material issues in our growth and promote these initiatives. Together with the building of a resilient management foundation, by providing high-value-added products and services, we contribute to the resolution of issues and development of industry and society as well as the achievement of the SDGs.

To be a company that is highly trusted and loved by society, we work on medium- to long-term profit expansion and continuous corporate value enhancement.

Framework of Corporate Principles Corporate Philosophy: Purpose of Tokyo Electron’s existence and its mission in society We strive to contribute to the development of a dream-inspiring society through our leading-edge technologies and reliable service and support. Vision: Top priorities to be addressed to realize the Corporate Philosophy A company filled with dreams and vitality that contributes to technological innovation in semiconductors TEL Values: Attitudes, codes of conduct, and values to be observed by each employee Pride/Challenge/Ownership/Teamwork/Awareness

Sustainability Promotion Framework

We promote sustainability activities throughout the entire Group through the following committees.

Conference Name Participants Function  Meeting Frequency
Sustainability Committee
  • Corporate Officers and General Managers
  • Presidents of the Group companies in Japan and overseas companies
  • Set and manage progress of sustainability goal (short-, medium-, and long-term)
  • Promote company-wide projects*1
Twice annually
Sustainability Global Committee
  • The executive officer in charge of the sustainability promotion
  • Heads of related departments
  • Sustainability managers of the Group companies in Japan and overseas companies*2
  • Promote activities for achieving annual sustainability goals (short- and medium-term)
  • Implement global projects
Twice annually
Sustainability Monthly Meeting
  • Person in charge of sustainability at relate divisions
  • Share information on sustainability activities
  • Discuss cross-division sustainability initiatives
Monthly

Report and discuss important issues at the Corporate Officers Meeting, the highest decision-making body on the executive side Corporate Officers' Meeting: Refer to the Corporate Governance System

Sustainability Manager: Person responsible for coordinating all aspects of sustainability at the Group companies in Japan and overseas companies

In addition to these committees, we invite all employees to submit examples of sustainability in the workplace, toward issue resolution and advancement of industry and society, and practice of our Corporate Philosophy. Outstanding initiatives are awarded the TEL Sustainability Award by the CEO and shared throughout the entire Group as best practices.

Initiatives for Sustainable Development Goals (SDGs)

The SDGs are a universal set of goals to achieve by 2030, which were unanimously adopted by the United Nations Sustainable Development Summit in 2015.We conduct activities on a company-wide basis, and for each CSR fiscal year and medium-term goal, and each material issue, we clarified the SDGs it is working toward through business.

Additionally, we regularly hold SDGs workshops where employees working in a variety of fields come together autonomously to share activities through business and discuss issues such as future prospects toward the achievement of the SDGs.

Tokyo Electron Supports the SDGs

In fiscal year 2022, we reaffirmed the 17 goals and 169 targets* being undertaken by the priority themes of our material issues.

169 targets reaffirmed: Our initiatives toward the 17 goals and 169 targets that make up the SDGs. Refer to 169 Targets of the SDGs

Medium-term Management Plan

In addition to pursuing sustainable operations in line with our approach to sustainability, we also strive to generate medium- to long-term profit expansion and continuing corporate value enhancement by creating new value through our business and contributing to the resolution of industrial and social issues and to the development of industry and society. In June 2022, we revised our vision and set new financial targets in the new Medium-term Management Plan and also announced our main initiatives for the future to achieve the new Medium-term Management Plan as well as our capital policy, shareholder return policy and other measures.

Financial Model Targets in the New Medium-Term Management Plan

In addition, we have expressed our approval of the recommendations offered by the Task Force on Climate-related Financial Disclosures (TCFD*3) and are pursuing initiatives based on the framework of governance, strategy, risk management, indicators and targets relating to the risks and opportunities that climate change presents to its business.

Financial Targets

 Financial Targets(by FY2027)
Net Sales ¥3 trillion or more
Operating Margin 35% or more
ROE* 30% or more

ROE: Return On Equity

Participation in Global Initiatives

We participate in a variety of global initiatives and promote sustainability in our business activities.

The United Nations Global Compact (UNGC) is a global initiative that promotes sustainability, proposed by former UN Secretary-General Kofi Annan at the 1999 World Economic Forum. We signed onto the UNGC in 2013 and are working to contribute to the realization of sound globalization and a sustainable society in accordance with its Ten Principles in the areas of Human Rights, Labor, Environment and Anti-Corruption.

United Nations Global Compact

The Responsible Business Alliance (RBA) is a global initiative promoting supply chain sustainability focused on the electronics industry. We joined the RBA in 2015, and as a member company, we work together with suppliers to ensure compliance with the RBA Code of Conduct comprised of five sections: Labor, Environment, Health and Safety, Ethics and Management Systems.
RBA audits are carried out mainly at major manufacturing sites in Japan and overseas, and we implement any necessary corrective actions.

Responsible Business Alliance

In 2020, we expressed our approval of the recommendations offered by the Task Force on Climate-related Financial Disclosures (TCFD)*. We are conducting ongoing disclosures and discussions based on the framework of governance, strategy, risk management, metrics and targets relating to the risks and opportunities that climate change presents to our overall business.

Task Force on Climate-related Financial Disclosures

Refer to TCFD

Third-party Recognition

Our sustainability initiatives have allowed us to continue to be selected as a constituent stock under leading global ESG indices, including the DJSI Asia/Pacific Index*1, FTSE4Good Index*2, MSCI ESG Leaders Indexes*3, Euronext Vigeo World 120 Index*4 and STOXX Global ESG Leaders indices*5. In fiscal 2023, we were selected under the Bloomberg Gender-Equality Index (GEI) and evaluated as a low-risk company in Sustainalytics’ ESG Risk Ratings*6, as well as being selected for the first time as an “All-Star” under the 2023 All-Japan Executive Team*7 announced by Institutional Investor.

Additionally, we received recognition as one of the top 500 companies under the 2023 Certified Health & Productivity Management Outstanding Organizations Recognition Program*8 for the 5th consecutive year, while the Tokyo Electron Integrated Report 2022 was selected again as an “Excellent Integrated Report” by the Government Pension Investment Fund (GPIF)’s external asset managers entrusted with domestic equity investment, continuing from the previous year.

DJSI: Dow Jones Sustainability Indices. An ESG investment index of S&P Dow Jones Indices LLC. The DJSI Asia Pacific covers companies in that region.

FTSE4Good Index: An index related to environmental performance and corporate social responsibility developed by FTSE Russell.

MSCI ESG Leaders Indexes: Companies that have high ESG performance are selected from the MSCI Global Sustainability Index, an ESG investment index developed by Morgan Stanley Capital International (MSCI). Please refer to the link for the logo’s disclaimer.Please refer to the link for the logo’s disclaimer.

Euronext Vigeo World 120 Index: An index selected by NYSE Euronext and Vigeo Eiris composed of 120 companies that excel from an ESG perspective.

STOXX Global ESG Leaders indices: STOXX, a subsidiary of Deutsche Börse, selects companies that meet its evaluation standards based on the results of research from the ESG research company Sustainalytics.

Sustainalytics’ ESG Risk Ratings: An ESG risk measured for institutional investors by Sustainalytics in the Netherlands. The rating is based on a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. ©2023 Sustainalytics. All rights reserved. This article contains information developed by Sustainalytics (www.sustainalytics.com).Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.

A group of listed Japanese companies delivering excellent IR activities and selected by Institutional Investor magazine, based on votes cast by global institutional investors and analysts.

Certified Health & Productivity Management Outstanding Organizations Recognition Program: The program publicly recognizes particularly outstanding organizations that are practicing health-oriented business management, based on initiatives attuned to local health-related challenges and toward health promotion initiatives led by the Nippon Kenko Kaigi.
Our Group companies in Japan have been certified under this program since 2019.