2014 Environmental & Safety Report

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1 2014

2 In 2015, the DAISO Group will celebrate its 100th anniversary amidst an environment of great change and promise. For our centennial year, we have crafted Next Frontier-100 (FY2014-FY2018), a medium-term management plan intended to drive growth under our new Group vision. Under this vision, we will take further steps to reduce greenhouse gas emissions and improve the working environment for our employees. We will work daily to accomplish this through our participation in the Responsible Care (RC) initiative for environmental and safety activities. In the area of environmental protection, the Cost Reduction & Environmental Burden Reduction Project we have been promoting for some time was reorganized in 2014 into the Cost Restructuring Project Team. We will continue creating new products and businesses that will contribute to the development of a low-carbon recycling-based society. With our unique environmental technologies, we hope to protect biodiversity while pursuing environmentally aware business activities. As a manufacturing company, the DAISO Group strives to foster a safety-first culture. Beyond the hard measures that is, those that address our production facilities we also deploy soft measures, including training to ensure all employees understand the rules and principles governing the activities at our chemical plants. Based on the theme Zero Accidents 2014: Preventing Major Accidents Through Mutual Understanding and Shared Information, the entire company is dedicated to achieving zero accidents and zero injuries. This goal will require every employee to step up his or her safety awareness while working to improve the DAISO Group s Strategy Intended to Prevent Serious Accidents. Moving forward, the Group plans to promote CSR management in accordance with the basic tenets of Responsible Care (RC). In doing so, we will remain fully aware of our societal responsibilities as a global corporation. October 2014 REPRESENTATIVE DIRECTOR PRESIDENTIAL EXECUTIVE OFFICER Tamotsu Sato 1

3 Contributing to a more affluent society Responsible Care activities (preserving the environment and ensuring safety through total life cycle care of chemical substances) Preserving the environment by implementing the ISO standard By focusing on chemicals as a means of creating a sustainable environment and contributing to society, the DAISO Group is: Creating technologies and products that are trusted worldwide Implementing quality assurance through the ISO 9001 standard and GMP system Providing unique products with high functionality Developing eco-friendly products and technologies Conducting business with enthusiasm and in good faith Introduction of enterprise resource planning package (ERP) Implementing a compliance program with the goal of earning public trust as a reliable company The directors and employees of the DAISO Group stringently comply with all relevant laws and regulations and always uphold proper corporate ethics in accordance with our Compliance Program as a business entity governed by our corporate philosophy. In order to continue growing our business and increasing our corporate value, each of our employees works diligently and maintains his or her confidence and responsibility as a professional. On the other hand, we recognize the individuality and diversity of our employees, and above all, we acknowledge that we must all spare no effort in achieving our targets. Internal Controls Stakeholders President Internal Reporting Compliance Committee Auditors Audit Group Expert Committee Corporate Philosophy Action Guidelines Code of Conduct Crisis Management Education & Training Directors Employees Compliance System

4 Responsible Care is a voluntary management initiative for implementing improvements and procedures in support of health, safety, and environmental preservation. Through this initiative, management policies are adopted to protect the environment and uphold safety over the entire product life cycle from the development, manufacture, and distribution of chemical substances to their application, final consumption, and disposal. This approach is based on the Responsible Care principles of self-direction and acceptance of responsibility as applied to enterprises engaged in the manufacture or handling of chemical substances. Under Responsible Care, DAISO CO., LTD. operates as an enterprise friendly to both people and the environment by advocating the corporate philosophy of contributing to the emergence of a more affluent society through chemical-focused operations. This Environmental & Safety Report (Report on Responsible Care Activities) summarizes our Responsible Care code, which encompasses health, safety, and environmental preservation as well as process safety and accident prevention. This report was compiled according to the Environmental Reporting Guidelines (Fiscal Year 2007 Version) of the Ministry of the Environment of Japan. Scope of Report Reporting period: April 1, 2013 March 31, 2014 (Data on occupational safety cover the calendar year.) Reporting entities: Head Office, Tokyo Office, R&D Div. Research Center, Kokura Plant, Amagasaki Plant, Matsuyama Plant, and Mizushima Plant While strictly complying with relevant laws and regulations, DAISO shall make continuous progress with voluntary management initiatives by setting voluntary criteria related to integrated safety management of chemical substances in keeping with the spirit of Responsible Care. We shall develop and maintain this management system. All directors and employees shall act with purpose and address targets indicated by our policies. We shall expand our public communication efforts and strive to gain further public trust. We shall provide training and education for practical application and better understanding of our policies. 1. Environmental Preservation (1) Promoting environmental preservation by ensuring harmony with the natural environment (2) Taking steps to reduce environmental impacts during the development of products and processes while promoting conservation of energy and resources (3) Communicating to maintain harmony with the local community while seeking conservation and improvement of the living environment 2. Process Safety and Disaster Prevention (1) Prevention of accidents and disasters (2) Maintaining a crisis management system (3) Implementing thorough management of high-pressure gases and hazardous materials and the like (4) Implementing process safety controls for facilities and equipment 3. Occupational Safety and Health (1) Eliminating work accidents (2) Enhancing and improving the work environment (3) Taking steps to maintain and promote good health 4. Distribution Safety (1) Ensuring the safety of product transport by strictly complying with legal and other requirements (2) Reducing safety risks during the product transport and distribution stages 5. Quality Assurance and Chemical & Product Safety (1) Providing customers with excellent products according to our corporate philosophy (2) Giving top priority to product safety under our stringent quality management system (3) Reducing costs while placing a priority on quality 6. Dialogue with the Public (1) Reporting our Responsible Care activities and other initiatives to relevant groups and organizations. (2) Proactively engaging in dialogues and activities with local communities. After implementing our RC activities, we officially announced this policy both inside and outside the company. April 1, 2003 President DAISO CO., LTD. RC Internal Audit ISO Internal Audit Measures to prevent serious accidents Follow-up Checks Reports Reports RC Committee Workplace RC Committee RC targets and measures for the fiscal year and adoption of the RC action plan Adoption of the RC action plan at workplaces Workplaces Activities based on the RC action plan and campaigns to prevent serious accidents President RC Committee Chairman: Director Responsible for RC Members: Divisional managers, general manager of labor union Office: RC & Quality Assurance Department RC Internal Audit Audit and report on RC action status Reports & Proposes Instructs RC Promotion Conference Measures to prevent serious accidents Follow Instructs & Promotes Workplace RC Committee (Occupational Safety & Health and Process Safety &Disaster Prevention Committee) Chairman: General Manager of workplace We are continuously improving our RC activities including Occupational Safety and Health and Process Safety & Disaster Prevention by adopting the PDCA cycle. RC Committee RC Promotion Conference Review of plan and incorporation of changes in the plan for the subsequent fiscal year according to the RC action report and legal requirements

5 Targets for Fiscal 2013 Results for Fiscal 2013 Long-term Targets Environmental Preservation To ensure proper operation of environmental impact reduction equipment and to improve the recycling rate To reduce CO2 emissions and energy consumption to 80% or less of the fiscal 1990 level CO2 emissions were 99.6% compared to the fiscal 1990 level. The energy consumption rate (crude oil equivalent) was 88.5% (decrease of 2.3% compared to the previous fiscal year), under the increase of CO2 emission factor on the electric energy. To reduce environmental impacts during the development of products and processes while promoting conservation of energy and resources To seek harmony with the local community while preserving and improving the living environment Process Safety and Disaster Prevention To promote ongoing measures to prevent serious accidents and disasters The achievement rate for implementing measures to prevent serious accidents was approximately 100%. To prevent accidents and disasters To maintain a crisis management system To implement stringent management of high-pressure gases and hazardous materials and the like To implement process safety controls for equipment Occupational Safety and Health Distribution Safety To eliminate work accidents Number of work accident in fiscal 2013: 4 (3 in previous year) Target not achieved. To maintain safe transport and eliminate in-plant truck loading accidents Distribution accidents in fiscal 2013: 3 (3 in previous year) To eliminate work accidents To enhance and improve the work environment To maintain and promote good health To ensure the safety of product transport by strictly complying with legal and other requirements To reduce safety risks during the product transport and distribution stages Chemical and Product Safety To ensure stringent compliance with laws targeting chemical products Appropriate procedures in accordance with REACH and the other laws about chemistry articles were carried out. To provide our customers with excellent products according to our corporate philosophy To give top priority to chemical and product safety under our stringent RC, quality, and environmental management system To reduce costs while placing a priority on quality Dialogue with Society To publish an RC activity report and submit it to the government and to promote communication with society Submitted reports to the government and to the Japan Chemical Industry Association. To respond appropriately to requests for investigations and to provide reports on our business operations Environmental Preservation Process Safety and Disaster Prevention Occupational Safety and Health Distribution Safety Chemical and Product Safety Dialogue with Society To ensure proper operation of environmental impact reduction equipment and to improve the recycling rate To reduce CO2 emissions and energy consumption rate to 80% or less of the fiscal 1990 level To promote ongoing measures to prevent serious accidents and disasters To eliminate work accidents To maintain safe transport and eliminate in-plant truck loading accidents To ensure stringent compliance with laws targeting chemical products To publish an RC activity report and submit it to the government and to promote communication with society

6 Our production volume increased in fiscal 2013, compared to in fiscal 2012, but water consumption decreased by about 24%. Atmospheric emissions decreased from the preceding fiscal year, since the operation of a boiler powered by alternative forms of energy such as hydrogen and city gas were suitably performed. The material balance resulting from our production activities during fiscal 2013 is shown below. (Data covers the Kokura Plant, Amagasaki Plant, Matsuyama Plant, and Mizushima Plant) Five Plants of DAISO CO., LTD. CO2 Water Energy consumption (crude oil equivalent) Raw materials *Packing used for shipment represents the weight of the paper bags, plastic bags, and polyester containers used as packaging materials for our products. Production of goods Packing used for shipment* Packing voluntarily collected SOX NOX Ash dust COD Nitrogen Phosphorus Wastewater Waste PRTR The chemical industry has adopted the goal of achieving an average energy consumption rate of 80% compared to the fiscal 1990 level for the period from fiscal 2008 to 2012; moreover, it has also voluntarily adopted environmental preservation activities on a global scale. And from fiscal 2013, the new plan Achieving a Low Carbon Society of Global Scale (from fiscal 2013 to 2020) has started. DAISO is taking steps to reduce its environmental impacts through initiatives to conserve energy, reduce wastes, and prevent global warming while strictly complying with legal and other requirements; moreover, we respond to emergencies in our business operations as one of our RC activities. Our three mainline plants have acquired certification of registration with ISO 14001, the international standard for environmental management systems, and are continuously adopting improvements.

7 About This Report Under Responsible Care, DAISO CO., LTD. operates as an enterprise friendly to both people and the environment by advocating the corporate philosophy of contributing to the emergence of a more affluent society through chemical-focused operations. This Environmental & Safety Report (Report on Responsible Care Activities) summarizes our Responsible Care code, which encompasses health, safety, and environmental preservation as well as process safety and accident prevention. This report was compiled according to the Environmental Reporting Guidelines (Fiscal Year 2007 Version) of the Ministry of the Environment of Japan. Reporting Entities Head Office, Tokyo Office, R&D Div. Research Center, Kokura Plant, Amagasaki Plant, Matsuyama Plant, and Mizushima Plant Reporting Period April 1, 2013 March 31, 2014 (Data on work accidents cover the calendar year.) RC & Quality Assurance Dept , Awaza, Nishi-ku, Osaka , Japan Tel. +81-(0) Fax. +81-(0)

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