Background on Materiality Identification

In developing the Plan, the Company has specified 18 materialities (“Materialities”) as important subjects/ issues which the Company prioritizes for a sustainable society.

The Company, under its corporate mission "we will develop new, innovative technologies and applications with a commitment to environmental sustainability, thereby enabling the advancement of technology for the betterment of humanity”, has long been committed to contributing to society and achieving sustainable business growth.

By specifying Materialities this time, the Company recognizes social subjects/issues to which we should contribute and address. The Company plans to update the Materialities on a regular basis based on social trends and the status of our own initiatives.

Materiality Identification Process

Identified Materialities

Materiality Matrix

Explanation of Materialities

Environment

Materiality	Specific Background	Relevant SDGs
Response Climate Change	The world urgently needs to address climate change, and we recognize the importance of taking concrete measures to address climate change. To date, we have been reducing CO2 emissions by establishing energy conservation committees at each of our plants to ensure meticulous energy management. In the future, we will monitor emissions at each site, set mid- to long-term reduction targets for the entire company, and promote various measures to further reduce our environmental impact.
Conservation of Water Resource	Some of our products use a large amount of groundwater in the production process, and water is an important natural resource that is indispensable for our business activities. Therefore, we will ensure the effective use of water resources by reducing the amount of water used (or input), to continue stable business activities, as well as to conserve forests and recharge water sources (*). ＊Please refer to the explanation of "Society (S) Contribution to Local Communities" for our efforts regarding forest conservation and water source recharge.
Chemical Substance Management	Appropriate management of chemical substances for environmental protection, human safety, business continuity, etc. is a serious responsibility of companies. We will strengthen our management system, appropriately grasp the regulatory status in each country, and ensure compliance with related laws and regulations and additional standards*. We will also promote ongoing efforts to meet the standards required by our customers regarding chemical substance management.
Contribution to Recycling Society	To achieve both environmental conservation and economic development, it is important to build a recycling-oriented society by making effective use of limited resources, reducing and recycling waste emissions, and properly disposing of waste. We will also promote ongoing efforts to conserve resources throughout the supply chain.

Social

Materiality	Specific Background	Relevant SDGs
Occupational Health and Safety	Ensuring the safety of our employees is our highest priority, and we aim to eliminate occupational accidents by implementing measures to prevent them at our domestic and overseas locations. We will also work to improve the health of our employees, eradicating long working hours and strengthening mental health measures. We will strive to maintain the health of our employees and ensure that they can work with peace of mind through both accident prevention and health maintenance.
Well-being	Our management stance is "We aim to be a company that motivates employees to excel by creating a great work culture.“ We will continue to foster an organizational culture that allows employees to feel fulfilled and comfortable in their work and promote initiatives to realize wellbeing through improvements in the work environment, review of personnel systems, and sufficient consideration for work-life balance.
Diversity and Human Resource Development	The success of diverse human resources and the development of human resources are indispensable for the continuous development of our business. In order to promote diversity, we will work to create a workplace environment where people can feel comfortable and fulfilled regardless of gender, race, nationality, creed, disability, etc. In order to develop human resources, we are providing educational opportunities through our training programs and reviewing our training programs, and will continue to enhance our training programs for each position.
Contribution to Local Communities	We have several bases and factories in Japan, and we are committed to activities that take the local environment into consideration. Since a large amount of groundwater is used in the production process of our products, we are continuing activities to contribute to the local environment under the theme of "Water Offset" in Itoshiro, Shirotori-cho, Gujo City, Gifu Prefecture, which is located in the upper reaches of a river in Gifu Prefecture where many of our production sites are located. Through reforestation, the company is working with local organizations to protect the natural environment of the water source area and maintain or increase the soil's water-holding capacity, and will continue to value its ties with the community.

Governance

Materiality	Specific Background	Relevant SDGs
Integrity	We will be strongly conscious of integrity (sincerity and sincerity) as the base of "pride in manufacturing," which we cherish, and we will think for ourselves based on social norms and ethics, and reexamine the challenges, problems, and operations that we face. We will promote the strengthening of our integrity mindset to solidify our "pride in manufacturing.
Corporate Governance / Compliance	Our Management Policy is to "We adhere to rules and regulations and strive to improve the quality of our technologies and management, thereby strengthening our stakeholders’ confidence and trust”. We are committed to thorough compliance with laws and regulations, as it is essential for sound economic development, business continuity, and sustainable development for a company to comply with all laws and regulations and to ensure fair business practices. In strengthening corporate governance, we recognize the importance of strengthening our global management system. We will continue to actively communicate with our stakeholders and make efforts to utilize their opinions in our corporate activities.
Protection of Intellectual Property	The intellectual property of our products and technologies developed over many years of research and development is an important asset of our company. We will strive to secure and protect intellectual property, prevent leakage of our technologies, and strengthen research and development. We will also comply with intellectual property laws, patent laws, etc., and respect the intellectual property of others.
Information Security Management	In response to the increasing risks related to information security, we will build robust security measures and strive to prevent damage from occurring. In addition, we will further promote the development of an emergency management system to ensure a stable supply of products to our customers without delay in the event of an emergency.
Risk management	As a company that contributes to the semiconductor industry, which is indispensable to society through polishing technology, it is our responsibility to ensure a stable supply of products. We strive to improve our business continuity and emergency response capabilities by taking measures in advance to prepare for the occurrence of serious incidents. In addition, We will contribute to our customers' stable business activities by establishing a system that ensures a stable supply of products even in an emergency.

Value Create

Materiality	Specific Background	Relevant SDGs
Supply Chain Management	Geopolitical risks, climate change, and the intensification of natural disasters have made the stable procurement of raw materials and the establishment of logistics networks a challenge. Securing stable raw material procurement and logistics is essential for business continuity and stable supply to customers. We will respond flexibly to changes in the business environment that may occur in the future and fulfill our supply responsibilities under any circumstances. In addition, there is a potential risk of human rights violations and environmental destruction when procuring raw materials, and we will continue to take necessary measures to ensure responsible raw material procurement.
Quality Management	We believe that the quality of our products, which contribute to the semiconductor industry through polishing technology, affects our customers' businesses and, by extension, the daily lives of ordinary consumers. As semiconductors continue to miniaturization, it is essential for our business to have quality assurance capabilities that enable us to meet ever-increasing quality requirements and quality control capabilities that ensure stable quality. We will work on stable process control, quality verification, and quality improvement, and also continue to strengthen our quality control system.
Research and Development	As a leading company in the field of precision polishing, we have continued our research and development for many years. We will continue to challenge for the highest quality and performance in the cutting-edge field of semiconductors, where further miniaturization is progressing, and develop and provide products that meet customer requirements in a timely manner. At the same time, we will leverage our proprietary technologies cultivated through the development of polishing materials to promote the development of new applications that contribute to sustainability.
Digital Transformation	We are promoting DX with the aim of strengthening our composition development capabilities, improving productivity, enhancing quality control capabilities, and efficiently utilizing human resources. Going forward, the Company will develop a system for DX promotion and promote it company-wide.
Productivity	Improving productivity is an important issue in order to stably meet customer demand and to cope with the declining birthrate, aging population, and shrinking workforce. We will strive to improve productivity by reviewing and optimizing current processes, optimizing the value chain, and utilizing DX.