TOKYO KEIKI : ESG Report 2020

ESG Report

2020

Management Philosophy

It is the mission of our Company and our Group to contribute to society, with a focus on our business of leveraging electronics and other advanced technology to create products that embody functions of human senses: measurement, cognition, and control.

1. Continually hone our technology to develop products that lead the world.
2. Anticipate changes in the market and create new value.
3. Prioritize quality in our products and earn the trust of customers.
4. Develop human resources who improve their abilities and their

character to contribute to fulfilling our mission.

1. Engage in sound and fair corporate activities in line with social norms.
2. Protect the environment and work to conserve limited resources.
3. Increase our overall corporate value and meet the expectations of our stakeholders.

Group Code of Conduct

1. We will aim to develop the best technologies and products through ingenuity and unceasing effort.
2. We will work to create new products and new businesses that anticipate the needs of the market.
3. We will provide safe, reliable products and services to earn the trust of our customers.
4. We will devote ourselves to self-improvement and will seek to be the leader in our fields.
5. We will observe laws and regulations and will strive to act sincerely and conscientiously as a member of society.
6. We will protect beautiful nature and will value precious resources.
7. We will share our Company's policies with stakeholders and will focus on achieving our goals with passion and a sense of mission.

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Company profile (as of September 30, 2020)

Trade name:	Tokyo Keiki Kabushiki-gaisha
Company name in English: TOKYO KEIKI INC.
Founded:	May 1, 1896
Established:	December 21, 1948
Paid-in capital:	¥7,217,597,300
Employees:	1,307 (Consolidated: 1,673)

Editorial policy

We issue this report for the purpose of providing easily understood information on ESG at TOKYO KEIKI to stakeholders including customers, business partners, shareholders, investors, local communities, and employees. Our goal is to make this report a useful tool for communication with our stakeholders.

Period covered

Fiscal 2019 (April 2019 to March 2020)

Some data and information on activities from April 2020 are also included.

Scope of coverage

Financial information:

TOKYO KEIKI INC. and its domestic and overseas consolidated subsidiaries

Non-financial information:

TOKYO KEIKI INC.

TOKYO KEIKI AVIATION INC.

TOKYO KEIKI POWER SYSTEMS INC. TOKYO KEIKI RAIL TECHNO INC. MOCOS JAPAN CO., LTD.

Referenced guidelines

GRI Standards

Contents

Management Philosophy /
Group Code of Conduct … ………………	1
Editorial policy / Contents …………………	2
Message from the President ………………	3
Company History … ………………………	5
Our Businesses … …………………………	6
Financial and Non-Financial Highlights ……	7

Spotlight

125 Years of TOKYO KEIKI and our Contributions to Society

Spotlight 1

Our History of Contribution to Society … 9

Spotlight 2

Solving Social Issues with Technological Development … ………………………… 11

Environmental Initiatives

Environmental Policies and Frameworks …… 13

Environmental Targets and Performance … 14 Climate Change Initiatives … ……………… 15

Initiatives for a Recycling-Oriented Society and Biodiversity … ………………………… 17

Social Initiatives

Compliance and Risk Management… …… 21

Commitment to Quality … ………………… 23

Together with Employees … ……………… 25

Human Rights … …………………………… 27

Occupational Health and Safety …………… 28

Social Contribution … ……………………… 29

Corporate Governance

Corporate Governance … ………………… 31

Stakeholder Engagement… ……………… 34

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Message from the President

A pioneer in instruments

The year 1896 marked our Company's start in the manufacturing of pressure gauges, indispensable equipment for ships, at a time when Japan had accumulated nearly no industrial technology and its only option was importing advanced technology products from overseas. Since that time, by developing, commercializing, and broadly disseminating the advanced precision equipment required by every era, we have played a part in the modernization of Japan as the country's first instrument manufacturing company. The word "keiki" appearing in our company name was also coined by our company's founder, from the English term "measuring instrument."

Although 125 years have passed since our founding, we have remained consistent in always tackling the development of new things and meeting the expectations of persons around us. Our products may not be conspicuous in everyday life, but our key technologies are placed into vital roles in countless areas including transportation, energy, fisheries, agriculture, and disaster readiness, supporting safety in people's lives. We believe that we bear a responsibility to ensure people's safety, address social issues, and contribute to the realization of a

sustainable society through innovations and technological resources born from our development process.

What we can do to prepare for and mitigate disasters

This past year left us all at the mercy of a newly emerged virus. Indeed, it would be no exaggeration to call 2020 a year that started with and ended with the coronavirus.

Moreover, under the effects of climate change, the recurrence of unexpectedly severe rains nearly every year is becoming commonplace in Japan. Heavy rains in July of 2020 caused significant damage in the Chubu region and Kyushu, especially in Kumamoto Prefecture. Some observers see such climate change and new infectious diseases as signs that the planet is becoming unable to withstand the burden of humankind's economic activities.

Our Company can contribute to disaster readiness and mitigation in a wide range of fields. Our products are used in many areas of disaster readiness, including prediction and warning of flooding due to rising river levels, early warning of mudflows due to heavy rain, early detection of earthquakes, and tide level monitoring to warn of tsunami or storm surge, to guard the safety of people.

We can no longer ignore the destruction of nature caused by human activities. The time has come for

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Message from the President

companies, too, to fulfill their responsibilities toward the environment as members of society. Our Company will strengthen its ESG initiatives so that we can continue sustainable growth as a company while protecting the earth's environment.

Aiming for growth from a global perspective with the SDGs at the core

Our Company has many businesses and products that support social infrastructure, and there are many cases in which meeting customers' demands has led to solutions to social issues and the assurance of safety. We are in a privileged position in which satisfying our customers is simultaneously beneficial to society, a fortuitous circumstance for our Company as a gathering of engineers. Furthermore, many of our products have earned the top share in their varied fields, while also making major contributions to the stability

of our management. Examples of these include marine equipment such as our marine gyrocompasses and autopilot products, which command an overwhelming share in Japan and overseas; our ultrasonic rail inspection cars that guard the safety of railway rails; our high-performance radars that see active use on land, on the sea, and in the air; and our ultrasonic flowmeters that are indispensable in water and sewerage systems and in agricultural water management.

At the same time, we cannot deny that our global expansion is lagging, as evidenced by our high dependence on specific markets and the fact that the domestic market accounts for over 80% of our total sales. Relying solely on the Japanese market, with its declining birthrate and aging population, will leave us to face difficulties in achieving sustainable growth. We must leverage the strengths we have built up, expand our business domains, and work more than ever to open up overseas markets. Our recognition of this is reflected in the three basic policies that we have set in our fiscal 2019 medium-term management policy: (1) Expansion of our business domains, (2) Promotion of globalization, and

1. Continuous strengthening of our existing businesses. An ESG perspective is particularly vital in the promotion

of globalization. Taking the SDGs as a relevant metric, we

aim to actively tackle solutions to social issues that involve the safety of people around the world. We will earn profits by uncovering ways to solve global social issues and by contributing to the achievement of a sustainable society. We seek to be a company that continuously grows through such a positive cycle.

Creating value for a new era through proactive wisdom and mindset

To achieve social contribution and secure corporate profits, we need to develop markets by solving social issues through innovation while exerting wisdom that utilizes the strengths of our products, technologies, sales, and services in a proactive, not passive, manner. However, the social issues linked to the SDGs encompass vast fields involving the entire world, and there are limits to what a single division or department can do. All of our employees must acquire a deep understanding of the SDGs and ESG issues, and must adopt a mindset of taking independent action while sharing wisdom across departmental borders.

We are also making attempts to enhance employee awareness through collaboration on company-wide improvement activities that we have conducted since fiscal 2018. We plan to greatly expand these activities, successively linking them to form a greater whole, in order to create the value that TOKYO KEIKI offers in environmental protection.

The global novel coronavirus pandemic continues to threaten human lives and hit economies hard. It has affected the performance of our Group as well, particularly in our civilian sector business. To ensure the safety of employees, who are important stakeholders, we are undertaking new work systems that include staggered commuting hours, satellite offices, and working from home.

As we continue to meet the expectations of our stakeholders and work to grow our business and contribute to society, we ask for your ongoing guidance and support.

President

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