TEL's Sustainability

Sustainability and Framework of Corporate Principles

Sustainability Operations

Initiatives for Sustainable Development Goals (SDGs)

Medium-term Management Plan

Participation in Global Initiatives

Third-party Recognition

Stakeholder Engagement

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 Operations

Our approach to sustainability initiatives is to practice our Corporate Philosophy through realizing our Vision. We implement sustainability initiatives that we have organized into the following four frameworks: Governance, Strategy, Risk Management, and Metrics and Targets.

Main Initiatives in the Four Frameworks

Governance	The Corporate Sustainability Management Department has been established under the Corporate Planning Division at headquarters, reporting directly to the CEO, overseeing sustainability initiatives across the entire Group The Sustainability Global Committee meets twice a year and the sustainability managers in charge of overall sustainability in domestic Group companies as well as overseas subsidiaries participate, sharing initiatives that align across the entire Group and discussing the promotion of global projects The Sustainability Committee, chaired by the executive officer in charge of sustainability, meets twice a year. Division Officers and presidents of domestic Group companies and overseas subsidiaries attend to review sustainability-related risks and opportunities, manage short- and medium- to long-term sustainability goals, formulate sustainability-related policies, and approve individual themes. Decisions on important matters are made at Corporate Officers Meetings, the highest decision-making body on the executive side Group-wide sustainability initiatives are reported to the Board of Directors as appropriate, and the Board of Directors supervises these initiatives
Strategy	Expand medium- to long-term profit and continuously enhance our corporate value through the fusion of social and economic value of business activities based on the concept of TSV (TEL’s Shared Value), which is the same as CSV, to solve social issues leveraging our unique corporate resources and expertise Identify key topics as material issues*¹ and leverage our strengths to drive business activities across the value chain centered on these material issues While implementing a range of sustainability initiatives, contribute to developing, and solving issues in, industry and society by providing the Best Products with innovative technology, and the Best Technical Service with high added value
Risk Management*²	Respond appropriately and promptly to a diverse range of risks related to semiconductors, including geopolitics and market changes, and develop a risk management structure for achieving sustainable growth Establish the Corporate Project & Risk Management Office (CPRO) in the Corporate Planning Division to promote more effective activities, and carry out enterprise risk management In addition to minimizing the impact of risks, that may be faced when conducting business, by giving them full consideration from a future perspective, also view them as business opportunities and appropriately address them Comprehensively identify various risks in our business activities based on their degree of impact on the Group and their likelihood of occurrence, identify 16 major risk items, and appoint risk owners for each. Confirm the status of initiatives for issues of particular concern, and discuss improvement measures, in meetings attended by the CEO and Division Officers
Metrics and Targets	Set key indicators for continuous corporate value enhancement³ in our Medium-term Management Plan and annual sustainability goals⁴ Regularly review the results and status of the achievement of key indicators and annual goals, as well as future initiatives, at the review meetings attended by the CEO Continuously conduct activities to achieve each indicator and goal under the persons responsible for each indicator and goal

Refer to Material issues

Refer to Risk Management

Refer to Integrated Report Key Indicators for Continuous Corporate Value Enhancement

Refer to Annual Sustainability Goals and Key Indicators

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 Division Officers 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

This Medium-term Management Plan sets financial targets of net sales of 3 trillion yen or more, an operating margin of 35% or more, and ROE of 30% or more by fiscal 2027, to further improve our world-class operating margin and ROE. Amid the expectation of further increasing demands for semiconductors and significant future growth in the semiconductor production equipment market, we will advance various initiatives throughout the value chain, always strive for the Best Products, Best Technical Service and aim to achieve medium- to long-term profit expansion and continuous corporate value enhancement.

Financial Targets

	Fiscal Year 2025 Performance	Financial Targets (Target Year: Fiscal Year 2027)
Net Sales	2,431.5 billion yen	3 trillion yen or more
Operating Margin	28.7%	35% or more
ROE^*	30.3%	30% or more

ROE: Return On Equity

Participation in Global Initiatives

We actively participate in a variety of global initiatives in order to practice sustainability in our business activities.

We signed onto the United Nations Global Compact (UNGC) in 2013 and are working to contribute to the realization of sound globalization and a sustainable society through compliance with its Ten Principles in the four areas of Human Rights, Labor, Environment, and Anti-Corruption.

United Nations Global Compact

We joined the Responsible Business Alliance (RBA) in 2015, and we work with our suppliers to ensure compliance with the RBA Code of Conduct, which covers labor, environment, health and safety, ethics, and management systems.

Responsible Business Alliance

We are carrying out initiatives for reducing our greenhouse gas emissions based on international standards, and our greenhouse gas emission reduction targets for fiscal 2031 have been validated as the Science Based Targets (SBTs) as Science Based Targets initiative (SBTi). Furthermore, net zero targets to reduce greenhouse gas emissions across the whole value chain, including Scope 1, 2 and 3 set for fiscal 2041, also received SBTi validation. We will continue to implement concrete measures and manage progress as we work to achieve targets based on international guidelines.

Science Based Targets initiative (SBTi)

We participate in the CDP, an international environmental information disclosure initiative that aims to promote the disclosure of corporate information related to the climate, water, and forests. Through highly transparent disclosure and concrete measures, we will contribute to the realization of a sustainable society in collaboration with local communities.

CDP

We joined the global industry association SEMI* in 1978 as a member company, and engage in the promotion of the international standardization and sustainability efforts of the semiconductor industry as a whole. We are also a member of the Energy Collaborative (EC) established by the SEMI Semiconductor Climate Consortium (SCC) and contribute to decarbonization through the use of low carbon energy.

SEMI：Semiconductor Equipment and Materials International

Evaluation from Third-party Institutions

Our sustainability initiatives are evaluated globally from the perspectives of environment, society, and governance. Environmental initiatives include promotion of CO2 emission reductions and resource circulation, adoption and expansion of renewable energy, and development of energy-efficient technologies. Social initiatives include promotion of human resource development, maintenance of high employee retention rates, and a commitment to prevent harassment. And governance initiatives include development of highly transparent management structures and strengthening of risk management. As a result of these evaluations, we continue to be ESG investment indices. Specifically, those indices include the Dow Jones Best-in-Class Asia Pacific Index, FTSE4Good Index Series*¹, FTSE JPX Blossom Japan Index*¹, MSCI Selection Indexes*¹, and MSCI Japan ESG Select Leaders Index*¹. In 2025, we were also selected as an A List company, the highest rating awarded by CDP*², in recognition of our performance in water security and supplier engagement.
The Tokyo Electron Integrated Report 2025 received the NIKKEI Integrated Report Award 2025 Semi-Grand Prize presented by Nikkei. The report was also well-received by many of our stakeholders for our easy-to-understand integrated disclosure of concrete outcomes and vision for the future.

Learn more

Please see here for details.

CDP is a non-governmental organization (NGO) founded in the United Kingdom, and supported by investors, that surveys companies and governments
around the world on climate change and water resource management.

Stakeholder Engagement

We actively create opportunities for dialogue and hold mutual communication with our stakeholders to allow us to accurately comprehend their demands and expectations as we deploy our business activities. We strive to build a solid relationship of mutual trust with all the stakeholders surrounding our company by working steadily to fulfill our roles and responsibilities in society.

Shareholders/Investors

Relationship with Stakeholders	Shareholders and investors provide our company’s capital, while expressing their opinions, demands and expectations of our company from the shareholder/ investor perspective through constructive dialogue and through exercising their voting rights at the Shareholders’ Meeting We share our management vision and growth scenario with shareholders and investors, and incorporate the opinions and demands we hear from them into our management in an effort to enhance our corporate value
Value Provided to Stakeholders	Return of profit generated from business activities Enhanced corporate value through the realization of our medium- to long-term growth
Main Engagement Opportunities	Earnings release conference, Medium-term Management Plan briefing, IR Day IR conference, IR road show1, individual IR interview Shareholders’ Meeting Investor event (CEO appearance) held in conjunction with major domestic and international exhibitions related to semiconductors and technology

IR road show: IR activities presented directly to shareholders and investors

Customers

Relationship with Stakeholders	Customers purchase the semiconductor production equipment we provide and also utilize services necessary for maintaining that equipment We not only provide products, services and solutions but also create technology roadmaps spanning multiple generations and carry out joint technology development with customers
Value Provided to Stakeholders	Best Products with innovative technology Best Technical Service with high added value Environmentally friendly products and services with a focus on safety and quality Solutions that satisfy a variety of application needs
Main Engagement Opportunities	Technology conference Joint development Customer Satisfaction Survey

Suppliers

Relationship with Stakeholders	Suppliers supply the materials and human resources necessary for our company’s business administration, and also perform customs clearance, logistics operations and other operational services In addition to purchasing these materials and operational services, we cooperate with our suppliers on the further development and improvement of these aspects and enhancement of their quality. We build a sustainable supply chain that takes into account labor, the environment, health and safety, ethics and the like
Value Provided to Stakeholders	Promote social issue initiatives and enhance the added value of products and services through collaboration with our company Business opportunities in the semiconductor production equipment markets Maintaining soundness and strengthening competitiveness throughout the entire supply chain
Main Engagement Opportunities	Production update briefing TEL Partners' Day/TEL E-COMPASS Day Sustainability Assessment STQA* audit

STQA: Supplier Total Quality Assessment

Employees

Relationship with Stakeholders	Our employees contribute to enhancing our corporate value by demonstrating their individual capabilities and pursuing personal growth through making use of opportunities for education We promote the improvement of employee engagement under management that emphasizes employee motivation
Value Provided to Stakeholders	A workplace environment replete with dreams and vitality and enables employees to realize their full potential based on mutual trust between the organization and individuals Opportunities for career development and skill improvement Fair performance review and remuneration commensurate with results
Main Engagement Opportunities	Employee meeting Global engagement survey Training and workshops

Local Communities

Relationship with Stakeholders	Local communities are striving to offer more value by working to foster local industry and educate human resources We contribute to the development of the local communities where we operate through employment opportunities, initiatives to preserve the local environment and paying taxes to local municipalities
Value Provided to Stakeholders	Human resources development and employment opportunities Promotion of environmental preservation in communities Financial contributions through tax payments
Main Engagement Opportunities	TEL FOR GOOD (Social contribution activities) Tours of plants and offices Environmental debriefing

Governments/Associations

Relationship with Stakeholders	Governments and associations not only require companies to comply with laws, regulations, industry codes of conduct and other rules, but also aim to work in partnership with companies to bring about development at the industrywide, national and community level While carrying out our business activities in compliance with such laws, regulations, industry codes of conduct and the like in the countries and communities where we operate, we contribute to social development and the resolution of societal issues by accurately grasping social needs
Value Provided to Stakeholders	Solutions that help the industry and society solve issues and develop Business activities that comply with laws, regulations, industry codes of conduct and other rules
Main Engagement Opportunities	Cooperation with government and administrative agencies Collaboration with global initiatives and NGOs etc. Industry group activities

Engagement with Governments, Industry Groups,
and Other External Stakeholders

Basic Stance on “Engagement with Governments, Industry Groups, and Other External Stakeholders”

We have formulated a vision to become "a company filled with dreams and vitality that contributes to technological innovation in semiconductors." We are engaged in business activities based on TEL's Shared Value (TSV), aiming for sustainable corporate value enhancement through the advancement of semiconductor technological innovation. This is based on the idea of Creating Shared Value (CSV). The concept behind CSV is that, by using their unique resources and expertise to help resolve societal issues , companies can realize sustainable growth through the creation of social and economic value.
We believe that, for sustainable corporate value enhancement, it is important to build trusting relationships with a wide variety of stakeholders. As such, we engage with governments, industry groups, and a variety of other relevant external stakeholders in each country and region where we do business. In doing so, we aim to increase medium- to long-term profit, enhance sustainable corporate value, and help resolve issues that meet the demands of society and contribute to societal development.

Engagement with Governments

As a company that is expanding its business globally, our activities are influenced by the various polices and regulatory measures that the governments in each country and /region where we do business implement. To respond appropriately and quickly to policy and regulatory developments, we have established specialized organizations and representatives in each major country and /region where we operate. These organizations create opportunities for us to engage with relevant government personnel and communicate information about our business activities accurately and appropriately. In these ways, we are indirectly involved in policy-making processes. In addition to protecting our business interests, we seek to leverage our unique resources and expertise to help find solutions to societal problems while considering the various policies in each country or region.

Examples of Engagement with Governments
- Outreach to promote the understanding of our business operations
- Explanation of our business to government officials and policymakers in Japan, Europe, the U.S., Asia, and elsewhere*¹
- Participation in workforce training and development initiatives, such as the UPWARDS Program*²
- Participation in side events held during inter-governmental discussions

In the U.S., we disclose information in accordance with the Lobbying Disclosure Act.　See here for details.

UPWARDS: U.S.- Japan University Partnership for Workforce Advancement and Research & Development in Semiconductors

Engagement with Industry Groups and Other External Stakeholders

We participate in a variety of trade associations and semiconductor and electronics-related industry groups to collect information relevant to our operations, including future business opportunities, policy trends and risks, and important societal issues.
In addition, through discussions with other industry group member companies, we share perspectives and acknowledge the effects of common issues on industry.
For example, through our involvement in trade associations and industry groups,*¹ including SEMI and the Semiconductor Equipment Association of Japan,*² several of our executives and employees participate in committee activities, analyze industry studies, and contribute to the formulation of policy recommendations while collaborating with other domestic and international stakeholders. In addition to facilitating the healthy development of the semiconductor equipment manufacturing industry and related industries, we aim to contribute to solutions to global issues that cannot be handled by individual companies alone, such as climate change, human rights, supply chain resilience, workforce training, and research and development.

This includes organizations that make recommendations on political and societal issues, but does not mean that we support all of the policy positions of those organizations.

Tokyo Electron’s Representative Director, President & CEO Toshiki Kawai has served as Chairman of the Semiconductor Equipment Association of Japan since May 2023.