Ishihara Sangyo Kaisha : Integrated Report 2021

V i s i o n 2 0 3 0

Originality. Acceleration. Global Reach.

Transforming Lives Through the Power of Chemistry.

01

Vision 2030

About ISK	Value Creation Strategies	Foundation for Value Creation	Corporate Data

ISK Group's Purpose

To continue contributing to better living environments through chemical technologies

Along with Vision 2030, we ISK Group formulated Corporate Purpose, our reason for existence in society. Corporate Purpose expresses our resolve to provide better living environments for people all around the world. We will achieve this through our "chemical technologies"-such as fine particle synthesis technology, surface treatment, ultrafine particularization, and organic synthesis-the core of our competitiveness, our "corporate philosophy" anchored in ESG (environment, social, governance), "a willingness to embrace challenges" that has been in our DNA since our foundation and the three strengths; quality, technological development capability and management capability.

Basic Philosophy p03

Environment

Social

Governance

Safe and stable	quality,	State	-of-the-art capability	for
		capability	with
		development,	Management
friendly	to society,	technological
				mind
			underpinned		high compliance
life and environment
by a diverse	workforce

ISK's three strengths derived from our corporate philosophy and DNA

p07	A willingness to embrace challenges,
passed down from the founder

Code of conduct stipulating legal compliance,	p03
safety, human rights, and transparency

Purpose

To continue contributing to better living environments through chemical technologies.

02

Corporate Philosophy

About ISK	Value Creation Strategies	Foundation for Value Creation	Corporate Data

C o r p o r a t e P h i l o s o p h y

Basic Philosophy

• Contribute to social development, protection of life and environmental preservation
• Respect shareholders, customers, suppliers, local communities and employees
• Abide by laws and regulations; maintain transparency in business activities

Code of Conduct

• At ISK Group, we will strictly observe laws, regulations, social norms and Company rules, while steadfastly adhering to high ethical standards, so as to gain social trust in our business.
• In manufacturing activities, we will place the utmost priority on global environmental protection, as well as on worker safety, and will work to prevent any workplace accident or disaster.
• On the basis of respect for human rights, we will promote mutual understanding and cooperation among employees, in order to create an open and friendly workplace.
• To maintain transparency in our business activities, we will promote communication with local communities and society, and will disclose corporate information in a timely and appropriate manner.

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Contents

About ISK	Value Creation Strategies	Foundation for Value Creation	Corporate Data

About ISK	01	Introduction
	02	ISK Group's Purpose
	03	Corporate Philosophy
	04	Contents
	At a Glance
		05	Main Businesses
		06	Serving the World
Value Creation Strategies	07	Message from the President
	11	Vision 2030
	15	Value Creation Process
	16	Input and Outcome
	17	Materiality
	19	Financial and Non-Financial Highlights
	21	Message from the Director of Finance & Accounting Headquarters
	Overview by Business
		23	Inorganic chemicals business
		25	Organic chemicals business

Foundation for Value Creation 27 Stakeholder Engagement

29 Outside Directors Conversation

1. Board of Directors and Executive Officers

1. Message from the Chairman
2. Corporate Governance

1. Responsible Care Activities

1. Environmental

1. Social

1. Special Feature: The Dawn of New Products

Corporate Data	53	Financial and Non-Financial Summaries
	55	Consolidated Financial Statements
	59	History of ISK
	60	Company Profile / Group Bases
	61	Stock Information
	62	Editorial Policy

Message from the President

About ISK

Value Creation Strategies

Foundation for Value Creation

Corporate Data

Conduct Business "Aggressively" Looking Outward and Forward

With my appointment as Executive Director and President on June 25, 2021, now I brace myself for an important responsibility to guide all Ishihara Sangyo Kaisha (ISK) Group as the company enters the 101st year since foundation. With our aim of "transforming lives through the power of chemistry", I will lead our business aggressively and take the risks that we avoided in the past. We appreciate every- one's continued advice and guidance that kindly provided my predecessors over the years.

Executive Director and President

Hideo Takahashi

07

Message from the President

Conduct Business "Aggressively" Looking Outward and Forward

With my appointment as Executive Director and President on June 25, 2021, now I brace myself for an important responsibility to guide all Ishihara Sangyo Kaisha (ISK) Group as the company enters the 101st year since foundation. With our aim of "transforming lives through the power of chemistry", I will lead our business aggressively and take the risks that we avoided in the past. We appreciate everyone's continued advice and guidance that kindly provided my predecessors over the years.

Materiality			About ISK	Value Creation Strategies Foundation for Value Creation	Corporate Data
Materiality Identification Process
In formulating our "Vision 2030 Stage I"; medium-term business plan, ISK Group identified priority
issues (Materiality) that would impact corporate value in the medium-to-long term. Based on this
Materiality, we are implementing measures that contribute to the sustainable development of society
and ISK Group, as well as formulating relevant, non-financial objectives.
	• In accordance with GRI, SASB and other guidelines, as well as ISK	• Issue Importance Evaluation
STEP 1	Group's long-term vision and medium-term business plan, we identified	Very		• Dealing with climate change,
the issues we need to focus on and prepared longlist	high		reducing environmental impacts
Issue	• After consolidating and combining similar issues, the initial list of roughly			• Technological development capabilities
identification		• Stable supply of crops	• Supply chain management
	200 issues was turned into a list of 28 identified topics		• Occupational health and safety,
			• Contribution to deepening
			IPM for biorational products	operation safety and disaster prevention
	• Each issue was considered in terms of consistency with ISK Group's		• Contribution to healthcare	• Diversity and inclusion
		• Contribution to a smart society	• BCP, risk management
	purpose, philosophy, etc., and assessment at workshops held with	stakeholders	• Corporate Governance
	business divisions and management, and we carefully examine the
	• Key issues in the chemical industry, key corporate ESG topics that		• Reforming workstyles by pursuing
	"level of importance to ISK" (horizontal axis)			digital transformation (DX) and
				streamlining operations
STEP 2	institutional investors require to companies, results from employee	to
Prioritization	surveys and various other considerations were used to carefully	importance
	• Related issues were consolidated and combined to narrow the list
	examine each issue's "level of importance to stakeholders" (vertical axis)
	down to 16 issues, from which 8 issues were identified as the highest	of	• Information security	• Quality
	priority for ISK Group and its stakeholders	Level	• Coexistence with	• Stakeholder engagement
		local communities

• Outside experts reviewed the identification process and the identified Materiality to confirm their adequacy

STEP 3	• The identified Materiality for ISK Group was finalized following
Materiality	deliberation by the Executive Management Committee and approved by
identification	Level of importance to ISK
	the Board of Directors
	High		Very
		high

17

Materiality

Materiality Identification Process

In formulating our "Vision 2030 Stage I"; medium-term business plan, ISK Group identified priority issues (Materiality) that would impact corporate value in the medium-to-long term.

04