ABOUT THE COVER Toray Group An Indigenous Forest Raised from Acorns— The Toray Mishima Plant Forest In the autumn of 1973, 4,000 Toray employees kicked off the company’s project to create a forest reserve in the area surrounding the CSR REPORT 2007 Mishima Plant by collecting fallen acorns from area temples, shrines and mountains. Under the guidance of Yokohama National University bioecologist Professor Akira Miyawaki (now professor emeritus), the acorns they gath- ered were raised to seedlings at each workplace and then planted by the employees themselves. Miyawaki argues that indigenous plant species are best able to survive and prosper even when earthquakes, fires or landslides bring difficult conditions—that the ancient groves of trees remaining at temples and shrines around the country are ’s true botanical heritage, capable of covering the earth even without excessive human intervention. Today, over thirty years later, the laurel, camphor, white oak and other trees that were planted have grown into a magnificent grove covering more than 10,000 square meters. Toray’s 13 offices and plants including the Mishima Plant, have worked towards environ- mental preservation through their contributions to the afforestation of approximately 190,000 square meters in total, using methods akin to that of the ancient groves.

Toray Industries, Inc.

Nihonbashi Tower 1-1 Nihonbashi-Muromachi 2-chome, Chuo-ku, 103-8666, JAPAN Telephone: 81 (3) 3245-5111 Telephone: 81 (3) 3245-5115 (Product Information) Facsimile: 81 (3) 3245-5054

The information in this report is available on our website: http://www.toray.com Contact: CSR Operations Department Telephone: 81 (3) 3245-5143 Facsimile: 81 (3) 3245-5134

Issued: December 2007 Next scheduled issue: December 2008

Dow Jones Sustainability World Index comprises more than 300 companies around the world that represent the top 10% of leading companies committed to sustainability.

MS-SRI, the Morningstar Socially Responsible Investment Index, tracks the share performance of 150 selected Japanese companies based on their commitment to CSR.

The KLD Global Climate 100SM Index is made up of companies that are leaders in providing solutions to global warming and offsetting its long-term effects.

This document is printed on 70% recycled paper with low volatile organic compound soy ink using Toray Waterless Plates, planographic printing plates that require no dampening water containing isopropyl or alkaline developers. Contents Corporate Slogan and Management Philosophy ...... 02 Contents and Editorial Policy ...... 03 Message from the President ...... 04 The thinking behind our corporate slogan ■Toray Group Overview Having marked the 80th anniversary of our founding in 2006, we at Toray Group believe that building a Business Activities: Through the Practice of Innovation ...... 06 stronger management foundation and continuing to evolve through continuous innovation is History: Toray’s 80 Years and Innovation ...... 08 increasingly important to enable us to achieve sustainable growth, at the same time as we are continu- Product Areas: Toray Products, Surprisingly Nearby ...... 10 ing to adapt quickly to changes in the external environment. ■CSR Activity Highlights As we pursue new approaches, strategies and bold policies, we look to continue on our path of Action on Global Warming Initiatives ...... 12 dynamic evolution and sustainable growth based on the keyword “Innovation.” Toray Group Activities for Overcoming Water Resource Issues ...... 14 incorporated these ambitions into a new long-term corporate vision called “AP-Innovation TORAY Pursing the Advancement of Women and Work-life Balance ...... 16 21” that was launched in April 2006. The plan adopts “Innovation by Chemistry” as our corporate Toray Group CSR: Today and Tomorrow ...... 18 slogan and leads the Group to becoming “a global top company of advanced materials” within 10 ■CSR Guideline 1 years by pursuing technological innovation with “Chemistry” as the its core. Basic Policy & Enhance Corporate Governance and We will rise to the challenge of “Innovation” not only in technology, but also in every aspect of Management Transparency ...... 20 our corporate activities as we realize our corporate philosophy of “contributing to society through the ■CSR Guideline 2 creation of new values with innovative ideas, technologies and products” by putting the ideal of Uphold Corporate Ethics and Comply with Laws and Regulations ...... 22 “Innovation” into practice. ■CSR Guideline 3 Emphasize Safety, Accident Prevention, and Environmental Preservation ...... 24 ■CSR Guideline 4 Ensure Product Safety and Quality ...... 36 Companies Covered in this Environmental-related Report ■CSR Guideline 5 The environmental reporting in this CSR Report Perform Risk Management ...... 38 Management Philosophy covers Toray Industries, Inc., as well as Toray Group manufacturing companies in Japan and ■CSR Guideline 6 overseas that conduct safety, health, accident Promote Dialogue with Stakeholders ...... 40 Corporate Guiding Principles prevention, and environmental audits. Safety Corporate Philosophy data not only include the manufacturing compa- ■CSR Guideline 7 nies listed below but also non-manufacturing companies. Statistics are presented for Toray Step Up Environmental and Recycling Efforts ...... 44 Contributing to society through the creation • Safety and Environment Industries, Inc. as well as 62 Japanese sub- ■CSR Guideline 8 Placing top priority on safety, accident prevention and sidiaries and affiliates and 33 overseas sub- sidiaries and affiliates. Secure and Train Personnel and Promote Human Rights ...... of new value with innovative ideas, environmental preservation, ensuring the safety and health of our 48 technologies and products employees, our customers and local communities, and actively ■CSR Guideline 9 Japanese Subsidiaries and Cooperate with Suppliers in their Environmental and Social Initiatives ...... promoting environmental preservation Affiliates 26 Companies 52 ■CSR Guideline 10 Du Pont-Toray Co., Ltd. Toray PEF Products Inc. • Ethics and Fairness Opelontex Co., Ltd. Toray Advanced Film Co., Pursue Social Initiatives ...... 54 Obtaining the trust of society and meeting the expectations by Ogaki Fuso Spinning Co., Ltd. Ltd. Toray , Inc. Dow Corning Toray Co., Ltd. Environmentally Friendly Products and Technologies ...... 56 Corporate Missions acting fairly while maintaining high ethical standards and a strong Inami Textiles, Inc. Toray Fine Chemicals Co., sense of responsibility and maintaining transparency in Matsumoto Textiles Co., Ltd. Ltd. Environmental Impact Overview ...... 58 Toray Coatex Co., Ltd. Soda Aromatic Co., Ltd. management Towa Orimono Co., Ltd. Toray ACE Co., Ltd. Chemical Substance Emissions and Transfer Data ...... 59 •For our customers Toray Monofilament Co., Ltd. Toray Engineering Co., Ltd. To provide new value to our customers through high-quality Toyo Tire Cord Co., Ltd. Toray Precision Co., Ltd. Environmental Data for 12 Toray Plants ...... 60 • Customer-focus Toyo Flocking Co., Ltd. Suido Kiko Kaisha, Ltd. products and superior services Maruichi Co., Ltd. Toray Medical Co., Ltd. Providing customers with new values and solutions, and achieving Sowa Co., Ltd. Toray Research Center, Inc. External Commendations ...... 62 Toyo Seiko Co., Ltd. Toyo Jitsugyo Co., Ltd. • For our employees sustainable growth together External Evaluation ...... 64 To provide our employees with opportunities for self Overseas Subsidiaries and Third Party Comments ...... 65 development in a challenging environment • Innovation Affiliates 29 Companies Achieving continuous innovation in all corporate activities, and Global Reporting Initiative Guidelines Reference Chart ...... 66 aiming for dynamic evolution and growth Toray (America), Inc. Chronology of CSR Initiatives ...... • For our shareholders Toray Resin Co. 67 Toray Carbon America, Inc. To provide our shareholders with dependable and trustworthy Toray Composites (America), Inc. management • Fieldwork and Initiative Toray Fluorofibers (America), Inc. Editorial Policy Strengthening fieldwork abilities and initiative, the foundations of Toray Textiles Europe Ltd. Alcantara S.p.A. our corporate activities, through consistently learning from one In 2003, Toray Group created the CSR Committee and formulated a three-year CSR road map. In December 2004, the Toray Textiles Central Europe s.r.o. CSR Committee drew up the Group’s CSR Guidelines and created respective Action Programs. Since then, CSR Reports • For society Toray Plastics Europe S.A. another and constant self-driven efforts are published annually to review CSR activities and initiatives in accordance with the ten guidelines. To establish ties and develop mutual trust as a responsible Société des Fibres de Carbone S.A. P.T. Acryl Textile Mills As part of an effort to rise to the challenge of “Innovation” in every domain of our corporate activities, Toray corporate citizen P.T. Century Tbk Group is pursuing “CSR Innovation” as a priority management issue. For these reasons, this Report incorporates • Global Competitiveness P.T. Easterntex “Innovation” as one of its themes in describing progress in Toray Group’s CSR activities. Pursuing competitiveness through global top quality standards and P.T. Synthetic Textile Mills P.T. Indonesia Toray Synthetics cost management, and achieving growth and expansion in the Luckytex () Public Co., Ltd. Report coverage global marketplace Thai Toray Textile Mills Public Co., Ltd. Environmental content: Thai Toray Synthetics Co., Ltd. Toray and 55 manufacturing subsidiaries and affiliates that conduct safety, health, accident prevention, and environmental audits as listed Penfabric Sdn. Berhad to the left (a total of 56 companies) • Global Coalition Penfibre Sdn. Berhad Social content: Toray Plastics () Sdn. Berhad Primarily Toray, with coverage of subsidiaries and affiliates according to the status of their initiatives in various areas Developing global coalition through integrated internal linkages Toray Fibers (Nantong) Co., Ltd. Toray Sakai Weaving & Dyeing (Nantong) Co., Ltd. Economic content: and strategic alliances with external parties Toray Fibers & Textiles Research Laboratories (China) Toray and 242 consolidated companies (a total of 243 companies) Co., Ltd. TALTEX (Zhuhai) Ltd. Target period • Emphasis on Human Resources Toray Plastics (Shenzhen) Ltd. FY 2006 (April 1, 2006, to March 31, 2007) Toray Film Products (Zhongshan) Ltd. Providing an environment where employees find value in their Toray Sanko Precision (Zhongshan) Ltd. This Report also includes more recent information up to June 2007. work, and building positive, energetic relationships between Toray Saehan Inc. (Korea) Reference guidelines people and the organization Environmental Reporting Guidelines (2003 Edition), published by Japan’s Ministry of the Environment (Adopted April 1995) Throughout this report an asterisk (*) is used to indicate a Sustainability Reporting Guidelines 2002, issued by the Global Reporting Initiative registered trademark of Toray Industries, Inc. or member company of Toray Group. This Report complies with the Japan Responsible Care Council’s Responsible Care Code.

Toray Group CSR REPORT 2007 2-3 Message from the President Through “Innovation,” Toray Group strives to become a business group offering high value to all stakeholders by playing a leading role in contributing to society.

Introduction by inevitable economic fluctuations; you might call it a formulating the long-term corporate vision “AP-Innovation “self-improvement management style.” In doing so we TORAY 21” with the goal of securing sustainable growth In 1926, Toray was originally founded under the name Toyo have sought to incorporate what we believe to be the most and further leap. We have adopted the corporate slogan of as a manufacturer of the synthetic fiber viscous important aspect of management capability, namely, the “Innovation by Chemistry” based on our corporate philoso- rayon. We celebrated our 80th anniversary in 2006. wisdom to take steps to cope with difficult times while phy of “contributing to society through the creation of new Since our founding, our corporate culture has been avoiding complacency in times of prosperity. value with innovative ideas, technologies and products” forged under the concept of “Safety First” along with the The second aspect of our management capability is the and reflecting our aim of becoming “a global top company fundamental philosophy of “aiming for strength and disci- “development of global operations.” Starting with fibers & of advanced materials.” pline, we place importance on the development of our textiles, Toray Group has been developing its businesses on In addition to pursuing technological innovation, we human resources and our contribution to society,” reflect- a global scale for more than 50 years. Subsequently we seek to achieve high profitability, evolve dynamically, and ing our tradition of “R&D-centered management” and expanded our global operations in plastic resins and films, grow sustainably by rising to the challenge of “Innovation” “management with a pioneering spirit.” followed by carbon fiber composite materials, which are in every aspect of our corporate activities. This management philosophy bore fruit in the commer- increasingly used as structural materials for aircraft. As a cialization of the three major synthetic fibers of , poly- result of these efforts, we are now securing significant prof- ester, and acrylic. Since 1970, when the company name was its in regions of the world that are experiencing growth changed to Toray, we have progressively expanded opera- Toward More Active CSR Initiatives in demand. In addition to seeking to expand our businesses and tions to include plastic resins, films, and chemical products, The third aspect is the practice of adhering at all times to increase profitability, we are dedicated to the principles of as well as carbon fiber composite materials, IT-related prod- the approach of “continual cultivation of strategic busi- corporate social responsibility through the active pursuit of ucts, pharmaceuticals and medical products, water treat- nesses,” a strategy for facilitating sustainable growth by safety, accident prevention, environmental preservation, ment, and more. consistently developing medium- and long-term earnings corporate ethics, and legal compliance programs. Toray pillar. Specifically, we are moving to effect a strategic Group has always practiced management with an emphasis Using History and expansion of our businesses in carbon fiber composite on social responsibility, and we believe that playing an Experience as Assets materials and IT-related products as drivers of near-term active role through social contributions and striving to offer profitability, while cultivating operations that are expected high value to all stakeholders are important factors to fulfill As Toray Group looks toward the future, our history and to develop into the pillars of future business: life science our long-term corporate vision. experience provide numerous assets to be deployed and uti- including pharmaceuticals and medical products; our water I am pleased to reaffirm our commitment to achieving lized. One of these is our “power of know-how accumulated treatment, which is closely involved in resolving the planet’s bold yet sustainable development in the 21st century by in the workplace” in R&D, manufacturing technologies, and environmental challenges; and new businesses utilizing building a robust management foundation and evolving marketing and sales; another is our “power of manage- non-petrochemical raw materials. through the theme of “Innovation.” ment” with a high degree of flexibility to adapt to changing For corporations, the fulfillment of CSR is a constant times to promote greater progress. imperative. This CSR Report summarizes the accomplish- One form taken by this “power of know-how accumu- ments of Toray Group’s CSR activities during FY 2006, and I lated in the workplace” is the core technology cultivated by Environmental Change am confident that it will enable you to gain an understand- the business of synthetic fibers, which are organic synthetic as a Positive Opportunity Today, the social and economic environment in which Toray ing of how we are making steady, step-by-step progress. chemistry, , and biotechnology. Group operates continues to change at an extraordinary I look forward to your understanding and support for Furthermore, we have broadened the domain of our propri- pace. In all manufacturing industries, there is unprecedented Toray Group’s corporate activities, now and in the future. etary technology by integrating leading-edge nanotechnol- competition on a global scale, as well as soaring prices in ogy with these core technologies and thereby accelerated crude oil. Critical issues such as energy and the natural September 2007 the development of new products and technologies. Other resource agenda, the global environment problems, and important assets include manufacturing technologies and rising demand for corporate social responsibility, require capabilities which have enabled us to steadily improve qual- each of us to effectively respond to these diverse changes. President, CEO and COO, ity and productivity with an emphasis on the details, and We see our most important task as coping with these Representative Director sales and marketing capability in the form of a corporate changes in the external environment and treating them as Toray Industries, Inc. culture that seeks to provide new value from the customer’s opportunities for securing sustainable growth. For this rea- perspective. son, we continue to take steps to create a strong manage- Our management capability incorporates three signifi- ment foundation for our operations while pursuing cant aspects. First is our adoption of a stance that seeks to “Innovation” to create new value. This forward-looking strengthen our profit base through self-improvement evolution is of great importance to our future. effort. Through the company’s daily operations we have Toray Group celebrated its 80th anniversary in 2006, created a robust business model that is not easily affected

Toray Group CSR REPORT 2007 4-5 Toray Group Overview 1 2 3 Business Activities Through the Practice of Innovation

Overview of Toray Industries, Inc. FY 2006 FY 2006 (as of March 31, 2007) Net Sales by Operating Income by Business Segment Business Segment Overview of the Mid-term Business Strategies “Project Innovation TORAY 2010 (IT-2010)” Established January 1926 5％ Paid-in capital ¥96,937,230,771 8％ Importance and Objectives of IT-2010 Five Innovations and Eight Projects 4.5％ 10.5％ 6％ Number of employees 36,553 (consolidated) 18.5％ Fibers & Textiles Long-term Corporate Vision Five Innovations Eight Projects Key Issues 39％ Plastics & Chemicals ¥1,546.5 17％ ¥102.4 IT-related Products AP-New TORAY 21 AP-Innovation TORAY 21 (1) Business Structure Innovation Transformation to a highly profitable group Number of consolidated companies 17％ billion billion 18.5％ Carbon Fiber Composite Materials Innovation of Project by innovative business portfolio change 1 business (as of March 31, 2007) Environment & Engineering (2) Overseas Business Enhancement of overseas business structure Strengthening Project profitability and expansion of its business Life Science & Other Businesses Mid-term Business Strategies Japan Overseas Total 32％ Goals in and 24％ around 2010 (3) Advanced Material Businesses Rapid commercialization of new Consolidated subsidiaries 67 77 144 Expansion Project advanced materials IT-2010 Net sales: NT-Ⅱ 2 Innovation of (4) R&D Capabilities Innovation Continuous generation of large-scale Equity method subsidiaries 35 22 57 FY 2006 End of March 2007 “Management based ¥1,800 billion technologies Project R&D themes NT21 “Offensive on Innovation” FY 2006 (5) Manufacturing Technology Generation of world-leading quality with Equity method affiliates 16 25 41 Net Sales by Employees by “Corporate management Geographic Segment Net Sales by Market Geographic Segment posture” -Challenges for further Operating income: Innovation Project the lowest costs in the world Structure growth- ¥150 billion Total 118 124 242 Reinforcement -Establish and defensive foundation for (6) Cost Innovation Project Cost reduction for intensified profitability Operating income Innovation of management further growth- 3 Thorough implementation of customer- Toray postures” to net sales ratio: competitiveness (7) Marketing and Sales Innovation 8.3% Project oriented, proactive marketing and sales 19％ -Break away Toward a Global Top Asia from crisis- Company of Advanced Consolidated business results ROA: Materials 4 Innovation of (8) Corporate Brand Strengthening Increase the value of the corporate brand (FY 2006) 19％ 8% business-awareness Project Million yen ¥1,546.5 Asia ¥1,546.5 36,553 Japan employees Japanese Net sales 1,546,461 billion Japan 27％ billion Asia ROE: 58％ subsidiaries 11% 5 CSR Innovation Promoting CSR line activities, strengthening security trade administration, 47％ and establishing and establishing and using internal controls systems Operating income 102,423 71％ 26％ April 2002 April 2004 October 2006 Around 2010 Ordinary income 97,520 Net income 58,577 North America, Europe, North America, Europe, North America, Europe, and other areas and other areas and other areas 10％ 15％ 8％

Toray Group Business Strategy and Toray Group Global Network Long-term Corporate Vision and “IT-2010” Basic Strategies Current Status With bases in 21 countries and regions including Japan, Mid-term Business Strategies Since 2002, we have been working to strengthen our Toray Group continues to expand globally. In our In April 2006, Toray Group formulated a new long- 1. Transformation to a highly profitable business constitution and reform our business structures Foundation Businesses of “Fibers & Textiles” and “Plastics term corporate vision called “AP-Innovation TORAY business group through the “Project NT21” and “Project NT-II” mid-term & Chemicals,” global operations utilizing a worldwide 21” designed to ensure sustainable growth and new (1) Transforming to a highly profitable business group –Transform to a highly profitable business group while continuing business expansion. management reform programs. Moreover, we have been network of production facilities anchor a fundamental advances. In October of the same year we developed –Improve capital efficiency. aggressively promoting projects such as “Expanding strategy for ensuring earnings stability. the mid-term business strategies IT-2010 to rise to the (2) Expanding Strategically Expanding Businesses Advanced Material Businesses”, “Expanding No. 1 We are also developing Strategically Expanding (profit growth driver) challenge of “Innovation” not only in technology, but –Increase profits by expanding Strategically Expanding Businesses while securing Businesses”, and “Expanding Businesses Outside Japan,” Businesses that focus on advanced materials worldwide in every aspect of our corporate activities, while creat- stable profit by Foundation Businesses. and these efforts have underpinned a process of steady with close links to growing markets, including “IT-related ing new value and actively contributing to sustainable (3) Expanding Strategically Developing Businesses (next profit growth driver) recovery and improvement in our business results. Products” that are expanding actively in Korea and development and environmental preservation. –Develop strategically next generation profit growth driver businesses after 2010. Toray Group is involved in a wide range of business “Carbon Fiber Composite Materials” in which we are IT-2010 identifies the development of the five inno- (4) Advancing business structure reform activities. Throughout all of our operations we have simultaneously expanding manufacturing capacity in the –Advance business structure reform by expanding Strategically Expanding Businesses vations of business structure, technologies, competi- and Strategically Developing Businesses. sought to develop and cultivate markets by taking three key regions of Japan, the U.S., and Europe. tiveness, business-awareness, and CSR as key challenges (5) Expanding advanced materials advantage of core technologies — organic synthetic while seeking to dramatically transform our manage- –Expand advanced material businesses in every segment and increase their ratio of net sales. chemistry, polymer chemistry, biotechnology, and nan- ment with the “Innovation” theme by implementing otechnology — as well as advanced materials developed Main Countries and Regions with 2. Expansion of advanced materials in four Toray Group Subsidiaries and Affiliates eight company-wide projects. major growing business fields by combining these technologies. It is a distinctive char- We aim to realize our corporate philosophy of “con- (1) Information / Telecommunications / Electronics acteristic of Toray Group that we have deployed these tributing to society through the creation of new values –Business expansion in the digital network-related product markets including flat panel display televisions, cellular phones, and personal computers. businesses globally. with innovative ideas, technologies and products” by Even as our Foundation Businesses in “Fibers & China North America practicing “Innovation” based on the “AP-Innovation (2) Automobiles / Aircraft East Asia Chinese Taipei –Development of products to meet expanding markets in hybrid cars and car electronics. Textiles” and “Plastics & Chemicals” continue to secure Europe Korea TORAY 21” long-term corporate vision and IT-2010 –Expansion of application parts by widening advanced functional availability of carbon fiber composite materials and engineering plastics. earnings, we have broadened our focus on what we term Middle East mid-term business strategies. United States (3) Life Science Strategically Expanding Businesses, including “IT-related –Creation of innovative bio-tools through bio/nano-technological integration. Southeast Thailand Products” and “Carbon Fiber Composite Materials,” to United Kingdom Asia Vietnam South America (4) Environment / Water-related / Energy augment its income and profit. At the same time, we –Development of new applications for fibers & textiles, plastic resins and films using France Malaysia non-petrochemical raw materials. have grown Strategically Developing Businesses, next- Germany Saudi Arabia Indonesia –Global expansion of water treatment businesses with a core of high-performance Iran Brazil separation membranes. generation businesses in areas such as “Environment” Switzerland United Arab Emirates –Development of new materials for next-generation energy systems including solar Italy cells, fuel cells, and wind power generation. and “Life Science” that will drive sustainable growth in (As of June 2007) the future.

Toray Group CSR REPORT 2007 6-7 Toray Group Overview 1 2 3 History

Net sales Billions of yen TorayTToray’oray’s 80 YearYears anand InnovationInnovation 1, 400 2003 CSR Committee formed. Sinince itits founfoundinging ofof TorayToray as a manufamanufacturerturer ofof rayonrayon chemihemicalal fifiber,er, TorayToray GroupGroup hahas cononsistentlytently ririsenen toto thethe 1,200 challengehallenges ofof pioneeringpioneering advanvanced tetechnologiehnologies forfor itits Toyo Products (currently Du Pont-Toray) is 1964 established as the company’s first joint timetimes. FollowingFollowing thethe celeelebrationration ofof thethe 80th0th anniveranniversaryary venture with an overseas company. 1986 New corporate symbol introduced. 1,000 ofof ourour founfoundinging inin 2002006, wewe adopteopted “InnovationInnovation by ChemiChemistrytry” as ourour nnewew corporateorporate slogan,logan, signalingignaling a Corporate name changed to commitmentommitment toto tetechnologihnologicalal innovationinnovation centereentered onon Thai Toray Textile Mills and Toray 1970 Toray Industries, Inc. Nylon Thai are established, becoming 800 chemihemistrytry anand aspirepire toto becomeome “a gloglobalal toptop companyompany ofof 1963 the company’s first overseas manufacturing companies. advanvanced mmaterialaterials.” 80th Anniversary Toray Advanced 2006 Materials Exhibition / Symposium held. 600 Toyo Rayon is listed on the Tokyo and First overseas employee is 1934 Stock Exchanges. 1957 dispatched to New York. 1995 New management philosophy formulated.

400 The trading company Trilon is 1955 founded, becoming Toray’s first overseas investment.

200 1926 Toyo Rayon Co., Ltd., founded. Consolidation → 0

1950 1960 1970 1980 1990 2000

Amenity 1955 Company milestones Company milestones 1981 1966 Toray introduces Breath•O* Company creed “Toyo Rayon Timecards are abandoned in Electronics & Information Materials Pharmaceuticals & Medical Products Japan’s first soft contact lens 1993 2006 serves society” adopted. favor of employee self-reporting Toray starts to market Toptical , a color filter designed for continuous wear. * Toray starts to market 3D-Gene*, an ultra of work attendance. for liquid crystal displays that does not use high-sensitive DNA chip that opens up the the harmful heavy metal chromium. possibility of tailor-made clinical treatments. Fibers & Textiles 1951 Fibers & Textiles Toyo Rayon launches Japan’s 1963 Toyo Rayon starts production of Japan’s first full-scale production of nylon. first modified cross-section silky-touch Tetoron filament Sillook*

2005 Water Treatment Electronics & Information Materials Pharmaceuticals & Medical Products Southeast Asia’s largest water treatment 1979 1992 facility commence operation in Singapore Toray begins synthesizing and marketing Dorner , Toray introduces the Toray Waterless Plate*, * using the advanced Toray Romembra* the world’s first printing plate material that the world’s first prostacyclin (PGI2) derivative reverse osmosis membrane elements. does not generate liquid waste. formulated for oral administration. Company milestones Plastics 1962 Company milestones 2004 Toyo Rayon School of Technology and Business 1974 Toray develops the world’s first opens to train technicians to deal with the rapid Toray introduces a maternity leave program to flexible polylactic acid (PLA) film. pace of technological innovation (name changed help employees balance work and family life, Fibers & Textiles 1941 to Gisen School in 1978). anticipating the subsequent legislation of Toyo Rayon succeeds in synthesizing Nylon 6, such programs in 1991. a first in Japan. 1960 Social contributions Fibers & Textiles Carbon Fiber Composite Materials Fibers & Textiles Toyo Rayon Science Foundation 1971 1971 1927 (now Toray Science Foundation), Toray starts to market Ecsaine*, Toray starts production of world’s 1985 Pharmaceuticals & Medical Products Production of rayon begins at Toray Shiga Plant. a pioneering private research support the world’s first suede-like first PAN-based carbon fiber Torayca* Toray starts to market Feron*, the world’s first natural interferon ß preparation. organization, is founded. man-made microfibers. 1996 Fibers & Textiles Toray starts to market Fieldmate* biodegradable fishing line. 1958 Company milestones Toyo Rayon begins promoting female employees to management positions, a move that is ahead of its time in Japan.

Toray Group CSR REPORT 2007 8-9 Toray Group Overview 1 2 3 Product Areas ❸

❹

❾ ❽

❶

❾

❺ ❼ ❻ ❾ ❷ Toray Products, Surprisingly Nearby In town Household ❺Automobile parts ❻Clothing ❼Container and ❽Cellular phone Toray products support your life and make it secure, creating a picture of your future. packaging materials components Developing more lightweight Toray is developing products From the very beginning, Toray fibers clothe people, serving to protect them and cars is a key theme in the drive that use carbon-neutral, Toray is working to commercialize Cellular phone manufacturers helping them realize their dreams. to save energy. Various non-petrochemical raw Ecodear*, a polylactic acid PLA are increasingly turning to engineering plastics and materials such as SOTAKE* material manufactured using corn Toptical*, a proprietary Toray Toray materials have a virtually endless array of uses. Torayca* carbon fiber bamboo-based fiber, Ecodear* and other 100% plant-based raw color filter for liquid crystal composite materials are corn-based biological fiber, and materials, for use in packaging displays that eliminates use Ultimately, Toray products evolve with the times to create new lifestyle choices. increasingly used as Aminos* soy protein fiber. films and other products. of the environmentally alternatives to steel parts. harmful heavy metal chromium.

Outdoors

❶Water treatment facilities ❷Fishing line ❸Aircraft materials ❹Solar cells Enlarged view Water treatment facilities use a The world’s first biodegradable Use of the carbon fiber Lumirror* polyester film is used variety of advanced separation fishing line, Fieldmate* reverts composite material Torayca* in as back sheeting for outdoor Automobile parts manufactured SOTAKE* bamboo composite fiber Ecodear* PLA materials Cellular phone using membranes to convert seawater to nature by breaking down airframe components enables solar panels, where it helps using Toray products Toptical* into freshwater and to help into water and carbon dioxide dramatic improvements in fuel collect energy from sunlight. make effective use of water gas due to the biological economy and passenger resources by treating and activity of bacteria found in comfort for next-generation recycling tap water and water and soil. aircraft. wastewater. Office

❾Office equipment ❾ Fire-retardant plastic ❾ Innovative printing technologies resin parts The polylactic acid Toray Waterless Plate* is a printing plate material for material Ecodear* is also Halogen-free engineering plastic materials offset printing that helps improve printing efficiency while used to manufacture that are resistant to high temperatures are contributing to environmental preservation thanks to a computer cases. used in products such as printers and printing process that generates no liquid waste. Materials electric/electronic connectors. printed using this technology bear the Butterfly Mark. Seawater desalination plant Fieldmate* biodegradable Artist image of the next-generation Billboard incorporating solar cells (Okinawa) fishing line Boeing 787 in flight at Toray Mishima Plant

Butterfly Mark Computer with an Electric/electronic connector Toray Waterless Plate* Ecodear* case made of Toray engineering printing plate material plastic materials

Toray Group CSR REPORT 2007 10-11 CSR Activity Highlights 1 2 3 Action on Global Warming Initiatives CSR Activity Highlights 1 Action on Global Warming Initiatives Providing Products That Help Lower Use of CFRP Components in Automobiles and Associated Weight Savings Toray recognizes global warming as a critical challenge and is Energy Use and GHG Emissions ● ● Toray launched the “Ecodream” Project in FY 2005 with the Vehicle weight can be reduced 200kg by using 200kg of CFRP. ● Roof ● working to reduce Green House Gas (GHG) emissions. target of doubling FY 2005 net sales of environmentally ● Trunk lid ● Door panel friendly products by FY 2010. In keeping with the project’s key ● Hood ● Toray Group has steadily lowered GHG emissions thanks to a combination of consistent energy conservation efforts dating themes of saving energy and lowering GHG emissions, we are to the aftermath of the 1973 oil embargo and more recent actions such as moves as conversion to more environment focusing our efforts on carbon fiber composite materials and friendly fuels. As a manufacturer responsible for supplying materials to a range of industries, we anticipate that our own products derived from non-petrochemical raw materials. For a 1.5 ton vehicle initiatives will be augmented in the years to come by increased market demand for products that help lower energy use On one hand, increasing net sales of environmentally and GHG emissions. friendly products (i.e., increasing production volumes) has the effect of driving up our emissions of GHG. The produc- tion of carbon fiber, a light, strong, and corrosion-resistant Side door sill Toray Group (Japan) GHG Emissions material, involves considerable energy use and GHG emis- ● Establishing New Targets for Global ● Platform ● sions due to high temperatures required in the manufactur- ● Front quarter Warming Countermeasures Subsidiaries and affiliates, CO2 (10,000 tons CO2 per year) panel ● Toray, N O ing process. However, the material’s significant contribution Structural members Panel members In FY 2005, we set global warming initiative targets of 350 2 ● Toray, CO to more lightweight aircraft and automobile designs, which Steel CFRP Steel CFRP reducing GHG emissions 10% over FY1990 levels by FY 2008 2 (280kg) (140kg) (120kg) (60kg) 300 ● 22 32 ultimately help to conserve energy and lower CO2 emissions ● and holding CO2 emissions to 1990 levels. We formulated 49 Source: “Innovative Global Warming Technological Program,” Ministry of Economy, 250 52 34 39 40 47 will offset the increase in the environmental impact caused by Trade and Industry (FY 2003 to 2007) new targets in FY 2007 in response to forecasts indicating 42 30 25 ● ● 200 16 the manufacturing process. ● that we would be able to meet these targets through con- 14 16 ● Toray is aware of these tradeoffs. We are committed to Reducing● CO2 Emissions with Lighter Cars ● verting fuel used in boilers from oil to natural gas, and con- 150 213 231216 212 216 213 224 helping reduce emissions throughout the lifecycle of carbon The use of CFRP can lower the weight of the mild steel sistent energy conservation activities such as reducing heat 100 fiber end products such as aircraft and automobiles while sheets used in automobiles by 50%, yet this highly safe loss. The target selection process took into account expected 50 meeting our own goals for lowering GHG emissions during material can absorb 1.5 times more energy than steel. Use expansions in the scale of our operations under our mid-term 0 the manufacturing process. of CRFP is expected to expand in the automotive field in business strategies and incorporated the following goals into 90 0304 05 06 08 10 () (Base year) (Forecast) (Target) coming years. our basic approach: Improvements in Next-generation Aircraft Fuel Simulations by the Ultra Light Steel Auto Body, Ultra – Toray will set targets in terms of absolute quantities Economy and Reductions in CO2 Emissions Light Steel Auto Closures, and Ultra Light Steel Auto and at a minimum will maintain Japan’s reduction Toray Group (Japan) Energy Consumption Demand for carbon fiber reinforced plastic (CFRP)*1 is grow- Suspension Project indicate that widespread● adoption of ratio as established by the Kyoto Protocol. Subsidiaries and affiliates ● ● (Unit: Million gigajoules) ing in the aviation industry, where fuel economy and lighter-weight● cars using CFRP would reduce annual CO2 – Toray Group (Japan) will manage targets using unit Toray ● 40 environmental countermeasures are increasingly seen as emissions by 3.88 million tons by 2030. Conversely, a reduc- energy consumption. ● 3.8 important considerations. Lightweight designs are expected tion of approximately 3 tons of CO2 could be expected per 2.1 3.1 3.2 3.7 30 3.2 vehicle over the course of 10 years. In other words, CFRP New Targets 3.2 to yield benefits in the form of improved fuel economy and reduced CO2 emissions. automobiles also have an environmental contribution to 20 make from the standpoint of CO2 balance. 1.Toray will reduce GHG emissions by at least 6% over 30.332.7 31.829.5 30.0 31.5 33.1 *1 Carbon fiber reinforced plastic (CFRP): A composite material that is FY 1990 levels by FY 2010. cured and molded after impregnating with plastics 10 resin. Exceptionally strong, CFRP characteristically allows designs that 2.Toray Group (Japan) will reduce unit GHG emissions (per weigh less while offering the same strength and rigidity as metals Estimated Energy Savings and CO Emission Reductions by 2030 net sales) by at least 15% over FY 1990 levels by FY 2010. 0 such as steel and aluminum. 2 90 0304 05 06 08 10 (Fiscal year) Energy savings 3.Toray Group (including overseas subsidiaries and (Base year) (Forecast) (Target) Total CO2 emissions vehicles affiliates) will raise its targets for reducing unit energy CFRP Parts in the Boeing 787 Gasoline equivalent Crude equivalent reductions consumption by at least 2% annually. 2010 200,000 22,000 kl/year 20,000 kl/year 51,000 tons-CO2/year GHG reduction by converting to more Weight reductions of more than 20% over a comparable environmentally friendly boiler fuels aluminum design can be achieved by using CFRP for 50% of 2020 2,600,000 690,000 kl/year 630,000 kl/year 1,590,000 tons-CO2/year Part of an initiative to reduce emissions airframe structural materials by weight. Reduction Plan for Meeting the New Targets by annual 60kt of CO2 by converting from 2030 6,300,000 1,680,000 kl/year 1,530,000 kl/year 3,880,000 tons-CO2/year fuel oil to natural gas, this gas-fired boiler In terms of specific reduction countermeasures, Toray is giv- became operational in July 2007. Source: “R&D of Carbon Fiber-reinforced Composite Materials to Reduce Automobile Weight” Used in combination with advanced engines, project under NEDO’s New Global Warming Prevention Technology Program. ing the highest priority to internal efforts to reduce emis- this approach yields 20% better fuel economy (Assumptions: 10 year vehicle useful life; 2.5 km/l improvement in fuel economy per 200 sions rather than relying on emissions trading. and lower CO2 emissions. kg reduction in weight; total of 6,300,000 vehicles in use by 2030; technology used in luxury and high-end mid-market vehicles) – Reductions through energy conservation – Development of new industrial processes improving Natural gas boiler at the efficiency Mishima Plant – Reductions through converting to more environmen- In search of biofuel solutions tally friendly fuels We are seeking to further reduce 27kt – Expansion of energy conservation activities overseas CO2 annually by powering boilers with a mixture of wood chips and coal. Operation is expected to begin 2 Related article in January 2010 after trial at the CFRP GFRP* See page 27 for examples of initiatives in FY 2006. Ehime Plant. CFRP (sandwich structure) Aluminum Other metals Inspecting wood chips at Imabari-Kako *2 Glass fiber reinforced plastic (GFRP): A molded material reinforced with glass fibers. (supplier)

Toray Group CSR REPORT 2007 12-13

● ●

● ● ● ● ● ● ● ●

● ● ● ● ● ● ● ●

● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

● ● ● ● ● ● CSR Activity Highlights 1 2 3 Activities for Overcoming Water Resource Issues CSR Activity Highlights 2 Activities for Overcoming Water Resource Issues Increasing Demand for Seawater Desalination Total Water Production Capacity of Plants Using As worldwide water shortages intensify, Toray expects Toray’s RO Membrane Toray is addressing issues on water shortages and safety from a 3 demand for effective use of seawater and wastewater will (10,000 m /day) Seawater 1,200 Brackish water increase to secure sustainable water sources, in addition to global viewpoint. Ultrapure water 1,030 the use of limited river and groundwater resources. 1,000 Many countries are currently experiencing water shortages due to the rapid pace of population growth and social develop- Until now, the methods of evaporation and electrodialy- 800 790 ment. These shortages exert a serious effect not only on everyday lives but also on food production and natural ecosys- sis have been used to desalinate seawater. However, RO is 600 640 tems. Observers also fear that problems involving the safety of the water supply, for example water pollution caused by 510 becoming the preferred approach thanks to the develop- 430 400 370 inadequate wastewater treatment facilities, are becoming increasingly serious. Toray is working to address these problems ment of technologies for improving RO membrane perform- 310 240 ance (water permeability and salt rejection), lowering the RO 200 170 200 from a global perspective to ensure it remains responsive to the needs of society. 110 130 membrane cost per unit of freshwater generated as well as 0 operational energy consumption. 9596 97 98 99 00 01 02 0304 05 06 (Fiscal year) Toray has accumulated significant expertise in seawater Water Issues Around the Globe Membrane Technology Contributing desalination with exceptional RO membranes, and our products Participation in the World Water With seawater accounting for 97.5% of the water on Earth, to Water Environment Issues are used by water treatment plants worldwide. As a result, we Forum and Other Activities the freshwater required to maintain human life is only Human beings require water for a range of applications help desalinate a total of 2 million cubic meters of seawater Although efforts to combat global warming have begun in 2.5% of the total. Moreover, because most freshwater is including agriculture, industry, and daily life. For example, each day (as of June 2007), enough water to sustain approxi- the world’s major countries, international partnerships and locked up in glaciers and underground aquifers, experts we need membranes for extracting pure water from seawa- mately 8 million people in their daily lives. initiatives to address water problems continue to lag. As part believe that only 0.01% of freshwater is accessible for use ter and for drinking water, membranes to remove the bac- of our efforts to increase partnerships with relevant entities in by people. Today this invaluable supply of water is experi- terium cryptosporidium, which cannot be killed by chlorine. order to address the world’s water problems, Toray has partici- encing a range of problems. Worldwide, 1.1 billion people Toray developed and brought to market RO membrane pated in the World Water Forum, a gathering sponsored by must walk at least 30 minutes to obtain the water they (reverse osmosis membrane) for manufacturing ultrapure the World Water Council, UNESCO, and related Japanese require each day, and 2.6 billion people live without access water for industrial applications in 1980 and later applied the government agencies, since its third meeting in 2003. We to toilets and other hygienic facilities. Ecosystem damage technology to seawater desalination. We have developed a also actively support the Japan Water Forum, a non-profit caused by deteriorating water quality is also a fear. More variety of separation membranes based on our core compe- organization that operates primarily in Japan. recently, alarms are being sounded about water shortages tencies of organic synthetic chemistry, polymer chemistry, In an effort to address the world’s water and its hygienic caused by the effects of global warming and falling ground- biotechnology, and nanotechnology. Used in combination, problems, Toray Group is committed to making an interna- water levels due to development. these products deliver the membrane technologies that are tional contribution consistent with these support activities by needed to implement efficient water treatment. Sulaibiya (Kuwait), the world’s largest wastewater reclamation plant by membrane providing membranes and other advanced water treatment Capacity: 320,000 m3/day technologies. Photograph: GE-Ionics (U.S.) Water Resource and Example of Membrane Technology Application

RO membranes RO (removal of salt content)

Nano-filtration membranes NF (removal of harmful substances) Hiromu Takeuchi General Manager, Special Assignment Ultrafiltration membranes Water Treatment & Environment Business UF Planning & Administration Dept. (removal of viruses and other contaminants) River Microfiltration membranes Domestic water Brackish water treatment plants MF (elimination of contaminants such as Agricultural water cryptosporidium) NF Tuas (Singapore), Reverse Osmosis Building, SingSpring Few nations are as blessed with high-quality water and an absence Groundwater Wastewater treatment equipment using Desalination Plant, Hyflux Ltd, one of the world’s largest seawater of urgent water source problems as Japan. Regions around the MBR Residences MF membranes MF reverse osmosis desalination plants world are experiencing problems such as water shortages and RO 3 water-related environmental pollution in the face of rapid UF Capacity: 136,000 m /day NF RO Photograph: Hyflux Ltd (Singapore) population growth and industrial development on a global scale. RO Water purification NF These problems are also having an increasing impact in the form Industrial plants NF plants of water-related food shortages and hygiene issues. Global MF UF warming is also affecting the Earth’s water environment, and observers point out that damage from flooding and drought Sewage-treatment Farmland and conditions is growing more frequent. MBR plant MF rice paddies MBR RO To solve the world’s water problems, it is necessary to develop Recycling Industrial water water treatment technologies that meet the different water quality Reuse (reclamation) Lake MF RO UF and infrastructure conditions in each country and region. Local RO problems must be addressed in the context of existing regional policy. As a membrane manufacturer, we are developing our water treatment business through global partnerships with organizations involved in constructing and maintaining water-related infrastructure. The successful development of four advanced Discharge separation membrane products (RO, NF, UF and MF), advanced Seawater Kinuta & Kinuta-shimo Purification Plants (Tamagawa/Tokyo, Japan), technologies such as the membrane bioreactor MBR method, and desalination one of Japan’s largest filtration facilities technologies for ensuring efficient facility operation attests to our Seawater plant Capacity: 88,000 m3/day ability to meet a variety of water source and water treatment Discharge Photograph: Suido Kiko Kaisha, Ltd. (Japan) objectives.

Ocean

Toray Group CSR REPORT 2007 14-15 CSR Activity Highlights 1 2 3 Pursing the Advancement of Women and Work-life Balance CSR Activity Highlights 3 Pursing the Advancement of Women and Work-life Balance

Toward Balancing Work and pay for babysitter services, reviewed the system for registering Toray works with employees to create workplace Family Life employees seeking reemployment, and reviewed our short- time and flextime work systems. environments that facilitate participation by women while Systems Designed to Help Employees Balance Work and Family Life Compliance with the Law to Promote Measures to implementing programs that promote work-life balance. We are working to enhance these systems as we work to Support the Development of the Next Generation Issues of equal employment opportunity and female participation is a common theme to the world. Japan’s aging population create a culture in which employees can make energetic We established a First Action Plan in FY 2005 based on Japan’s contributions while balancing the demands of work and and diminishing birthrate are making it more important for corporations to help employees balance their responsibilities at Law to Promote Measures to Support the Development of the family life. We are particularly proud of either meeting or Next Generation, which took effect in April 2005, and had work and at home. Our aggressive efforts to advance women’s roles while balancing work and personal life are created to exceeding legally mandated provisions in systems related to implemented the provisions of the plan by the end of FY 2006. both meet these needs and increase the Group’s medium- and long-term human resources competitiveness. childcare, family-care, leave and maternity protection, and As a result of these efforts, in May 2007 we received certifica- we are working to make systems accessible and responsive to tion that confirmed the First Action Plan meets the individuals who wish to use them. the standards set by the Next Generation Law. Advancement of Women Project 2004 is geared to create structures that enables women to Several new systems to ensure good working conditions that Starting in FY 2007, we plan to establish a Toray has led Japanese companies in proactively offering pursue even more fulfilling careers by making our history of were designed in FY 2006, were launched in FY 2007. Second Action Plan and pursue new initiatives employment and work opportunities to women as well as in steady accomplishment in female participation a key part of Specifically, we established a new system to help employees in this area. providing equal compensation to male and female employees. our corporate culture. The Advancement of Women Project launched in FY Systems Designed to Help Employees Balance Work and Family Life (Key Changes in April 2007)

Action Description of changes Before changes

Advancement of Women Project Initiatives The company signed a contract to give employees access to babysitter New program services at a discounted rate (employees can use services that typically Established new system to help employees Date Action Description cost individuals ¥2,000 per hour for ¥900 per hour). Employees (male and pay for babysitter services. female alike) are eligible to participate until the end of the fiscal year in Formulated various proposals for the advancement of women. In FY 2006, summarized 2 years of activities which their children enter the third grade of elementary school. October 2004 Formed Working Team. and reported to executive committees. The registration period for reemployment was extended to 10 years. The registration period had been 3 years, and Reviewed the system for registering Reemployment as full-time employees is now available immediately compensation was limited to non-regular General Manager of the Personnel & Industrial Relations Division, who serves as the implementation leader August and Implementation leader conducted employees seeking reemployment*1. for some employees depending on the nature of their job, their desired employee levels for six months, after which for this project, visited all plants. Participants discussed and shared views on topics including the purpose of role, and their personal circumstances. individuals could become full-time employees. September 2005 enlightenment rounds. the project and key considerations in training female employees.

Enabled concurrent use of short-time work systems All short-time and flextime work systems can now be used Employees were unable to use these systems Responds to questions and consultations concerning various programs, canvas employee opinions, and November 2005 Provided consultant services. designed to give employees time off for childcare, concurrently. in combination. apply their views to the policy formulation process. family-care leave, and maternity protection with flextime systems.

December 2005 to The forum aims to foster the development of female leaders, reform female employee awareness and boost Held Advancement of Women Forum with morale, and build networks. Six workshops and lectures were held for female employees at the Tokyo head Extended employee eligibility for childcare The period of time over which employees are eligible for these systems These systems had been available only until February 2006 workshops and lectures (first session). office and Osaka head office with about 300 employees in total participating. short-time work systems, flextime systems, was extended until the end of the fiscal year in which their children children began elementary school. overtime/holiday work limits, and night work limits. enter the third grade. *1 This system provides reemployment opportunities for employees who must leave the company to get married, have children, care for children, care for sick or elderly family members, or accompany a spouse December 2006 to Held Advancement of Women Forum with Total of three workshops and lectures for female employees at the Tokyo Head Office (open to individuals who has been transferred. February 2007 workshops and lectures (second session). who were unable to participate in the first session) with 120 employees in total participating. Related article See page 50 for more information about Toray’s efforts to create a corporate culture that facilitates participation by female employees. Began an ongoing series of articles in the From January 2007 internal company newsletter introducing Articles to introduce examples of female employees who have developed careers in Toray Group, balanced examples of female career development. the demands of work and personal life, and the support offered to them in their workplaces.

Enhanced policies designed to help Up to March 2007 employees achieve work-life balance and Planned new programs and reviewed existing programs based on discussions held by the Working Team. reviewed associated programs. These programs will be launched in FY 2007. Couple takes childcare leave together

Takahiro Maeda The mom’s view The dad’s view Pharmaceuticals & Medical Products I took maternity and childcare leave from October I took six months of childcare leave from October Division, Administration Dept. 2005 to September 2006. Afterwards it was easy 2006, when my wife went back to work after her Toray Industries, Inc. for me to return to my original job because my childcare leave. We took full advantage of the Ayumi Maeda husband also took childcare leave. company’s system, which allows employees to take Health Management Center, When I hurried home at the end of my first day childcare leave until the end of the fiscal year in Shiga Plant which the child reaches the age of 1. As for my Toray Industries, Inc. back, I was surprised to see my husband getting ready for dinner with our son in a carrier on his impressions of my time as a stay-at-home dad, I think back. I respected my husband’s decision to take the idea of fathers helping raise their children childcare leave, but I never imagined that he includes sharing responsibility for household chores. would actually become a stay-at-home dad! It Each partner must do what they can, when they can. seems that only a few male employees take When your partner does something for you, you childcare leave, but I hope that more will consider must show appreciation. I feel that I came to this option in the future in order to encourage appreciate the secret to balancing work and family life women to participate more actively in the and ensuring a harmonious home during the time I The Working Team for the Advancement of Women Workshops provided an opportunity to reflect on Work-life balance and mental health were important spent on childcare leave. It was a great experience for Project was launched with 12 women and 6 men their future goals themes in the lectures workplace. my wife and I to both take childcare leave.

Toray Group CSR REPORT 2007 16-17 Corporate Ethics and Legal Compliance Code of Conduct CSR Guidelines (Adopted December 2004 and revised June 2005) Toray Group CSR: (Adopted October 2003) 1 Contribute to society ■ Basic Policy & Enhance Corporate Governance and As a company aspiring to be a New Value Creator, provide trustworthy products and services that satisfy our customers. Management Transparency Sincerely pursue CSR activities to help create a sustainable society by fulfilling Today and Tomorrow 2 Communicate with society our Corporate Philosophy, Corporate Missions, and Guiding Principles, and Communicate with the various parties associated with the company, including its 1 customers and shareholders as well as members of the local community. Actively strive to enhance corporate governance and management transparency. Toray Group carries on a legacy of CSR activities by creating action programs and reviewing them and fairly disclose pertinent information about the company. 3 Behave as a good corporate citizen annually based on CSR Guidelines that broadly incorporate tomorrow’s CSR. We emphasize practicing Comply with laws and regulations, respect human rights, and actively contribute to ■ Uphold Corporate Ethics and Comply with Laws CSR at each workplace and have launched CSR line activities at subsidiaries and affiliates. society as a good corporate citizen. and Regulations 4 Play an active role in preserving the global environment Earn the trust of society by all executives and employees upholding our Recognize that playing an active role in preserving the global environment is an Corporate Ethics and Legal Compliance Code of Conduct and acting with important management issue, and strive to coexist with the environment in all fairness, high ethical standards, and a sense of responsibility. 2 Steady Pursuit of CSR Activities of the Internal Control Department in October 2006 in corporate activities by conserving energy, reducing emissions and waste, promoting recycling, and so forth. Toray Group has long pursued corporate activities by paying order to comply with the Financial Instruments and 5 Prioritize fairness and trust in corporate activities dues to stakeholders — customers, employees, sharehold- Exchange Law. Engage in proper trade based on free, fair, and transparent market competition, and ■ Emphasize Safety, Accident Prevention, and ers, and local communities — in an effort to fulfill our conduct corporate activities that earn the deep trust of society. Environmental Preservation Related article corporate philosophy of “contributing to society through 6 Comply with national laws and regulations Give safety, accident prevention, and environmental preservation top priority See page 21 for more information about the CSR promotion framework. Pursue management reform from a global perspective, comply with the respective above all other management issues, and work to ensure the safety and health 3 the creation of new value with innovative ideas, technolo- national laws and regulations in overseas operations, and be self-disciplined with of society and employees while protecting the environment in all of our gies and products.” high ethical standards. Conduct corporate activities with respect to the culture and business activities, from procuring raw materials to manufacturing, supplying, customs of each country and contribute to the advancement of local communities. Current CSR activities can be traced back to the creation Towards the Next Step and disposing of products. 7 Raise motivation and create a corporate culture that lets of the CSR Committee as an entity reporting directly to CSR Innovation is one of the Five Innovations identified employees demonstrate their ability ■ Ensure Product Safety and Quality the president. After the original mid-term action plan was by Toray Group’s IT-2010 Mid-term Business Strategies, Strive to create a corporate environment that allows each and every employee to Recognize the importance of product safety and quality assurance in supplying be motivated to demonstrate their ability, respect individual human rights, safe and highly reliable products, and strive to enhance management systems completed, we adopted a new three-year CSR road map which establish targets as we approach 2010. We are character, and personality, and maximize creativity and professionalism. and disclose appropriate information. 4 in March 2006. The action programs for each guideline seeking to achieve sustainable growth while meeting 8 Break off relations with antisocial forces are implemented and revised each year. Always work for the good of society, break off relations with antisocial forces that threaten society’s demands by pursuing activities established to the order and safety of civil society, and take a resolute stand as a unified company. The CSR line activities launched at Toray in 2005 are achieve our company-wide strategy in accordance with being promoted in companies throughout the entire the CSR Guidelines, as well as department-specific CSR ■ Perform Risk Management Ten Basic Environmental Rules Seek to reduce potential risk, develop a system capable of responding quickly Group. For Japanese subsidiaries and affiliates, we began line activities designed to address issues selected by indi- to unexpected situations and disclosing accurate information, and work to with six model companies, later extending the program vidual departments. (Adopted January 2000) inform all employees about this system. 5 to all Japanese subsidiaries and affiliates by the end of FY Our CSR road map is designed to set general directions 1 Prioritize environmental preservation 2006. For overseas subsidiaries and affiliates, we have and specific targets for the entire Group with an emphasis We shall comply with all laws, regulations, and agreements in all of our business activities while placing the highest priority on environmental preservation in the appointed model companies in the Southeast Asia region, on materiality and viability. We believe that the pursuit of manufacture, handling, use, sale, transport, and waste disposal of products. ■ Promote Dialogue with Stakeholders and we plan to steadily extend the program. We have Toray Group’s CSR activities through the PDCA manage- 2 Prevent global warming Encourage dialogue and cooperation with employees, shareholders, investors, also been active on the organizational front by creating a ment cycle and the steady implementation of the road map We shall promote energy conservation and work to reduce our unit energy business partners, consumers, local communities, non-profit organizations, framework for promoting CSR, for example by establish- will enable us to earn and maintain the trust of our stake- consumption and our carbon dioxide emissions. government and administrative agencies, mass media, analysts, and other parties. 6 ing a department responsible for promoting CSR activities. holder communities continuously into the future. 3 Achieve zero emissions of environmental pollutants We shall strive continuously to reduce our emissions with the ultimate goal of Progress in internal control systems includes the creation achieving zero emissions of hazardous chemical substances and waste materials into the environment. ■ Step Up Environmental and Recycling Efforts 4 Use safer chemical substances Pursue research and technological development related to environmentally We shall collect, maintain, and provide information on the health and environmental effects friendly products and recycling, and contribute to improving the global of the chemical substances we handle while striving to use safer chemical substances. CSR Road Map (Mid-term Action Plan) environment by developing and expanding environmental, safety, and amenity businesses. 7 Company-wide Issues Progress 5 Promote recycling FY 2006 FY 2007 FY 2008 We shall develop recycling technologies for products, containers, and packaging (excluding department-specific issues and separate themes) (as of March 31, 2007) and cooperate with society in promoting the recovery and reuse of such items. Improvement Planned ☆ Established CSR Operations Group within ■ Secure and Train Personnel and Promote Human Rights of promotion 1. Reorganization of committee system / Corporate Planning Dept. 6 Improve the level of environmental management 1 system Establishment of dedicated organizations Implemented ◎ (September 2006) We shall work to maintain and improve the level of our environmental management Secure and train personnel and diversify employment while striving to protect while working to upgrade our environmental management technology and skills, employee jobs, respect human rights, and continuously improve workplace Planned ☆☆ ☆ performing self auditing, and taking other measures. Plan-Act 2. Review of CSR Guidelines and Action Programs Created 2006 edition and put it into practice environments. 2 Implemented ○ 8 Japanese subsidiaries Planned ☆☆ ☆Began company-wide promotion of CSR activities 7 Contribute to society through environmental 3-1. Deploy CSR Line Activities at Japanese and affiliates Implemented ◎ at subsidiaries and affiliates improvement technologies and products and overseas subsidiaries and affiliates Overseas subsidiaries Planned ☆☆Started CSR line activities at overseas subsidiaries We shall meet the challenge of developing new technologies and shall contribute and affiliates Implemented ○ and affiliates in the ASEAN region to society through environmental improvement technologies as well as products Planned that place a low burden on the environment. ■ Cooperate with Suppliers in their Environmental and 3-2. Implement dialogue with stakeholders ☆☆ ☆Began strengthening communication with local Implemented △ communities through CSR line activities Social Initiatives 3 Do 8 Improve the environmental management of our overseas Planned ☆☆Created and backed systems for promoting legal Cooperate with suppliers in promoting CSR activities, including environmental 3-3. Establish CSR data management system compliance and CSR line activities, for example by businesses consideration, compliance with laws and regulations, and promotion of human Implemented ○ integrating internal company BBS In our overseas business activities, we shall place top priority on complying with rights. 9 local laws and regulations, and further, we shall manage those businesses in 3-4. Develop and implement measures for spreading and Planned ☆☆ ☆Began CSR lectures in training programs, accordance with the management standards of Toray Group. promoting CSR activities Implemented ○ including seminars for overseas employees Planned Currently investigating evaluation areas based on 4-1. Formulate CSR self-evaluation standards ☆ 9 Improve employees’ environmental awareness Implemented △ rating and survey items We shall strive to improve our employees’ awareness of environmental issues ■ Pursue Social Initiatives Planned ☆☆ ☆ through environmental education, social activities, internal communications Voluntarily conduct promotional programs for science and technology, arts and Check 4-2. Implement CSR audits Continued to investigate how to best implement this step 4 Implemented △ activities, and other means. culture, social welfare, sports, and other activities by allocating an appropriate Planned 4-3. Fixed-point observation (CSR awareness surveys) ☆☆ ☆Continued to investigate how to best implement this step amount of resources as a good corporate citizen. Implemented △ 10 Share environmental information with society 10 We shall deepen mutual understanding of Toray Group environmental policies and Planned ☆ Internal control system Established the Internal Control Department in October 2006 practices by widely publicizing our environmental preservation efforts and their Compliance with new corporate Implemented ◎ Other results in environmental reports and other publications directed at local 5 laws and internal control systems Compliance with Japanese Planned ☆ Began recordkeeping in pilot divisions to implement communities, investors, and the media. SOX regulations Implemented ○ compliance with the Financial Instruments and Exchange Law ■Plan/investigate/continue ■Implement/deploy ☆ Planning period ◎Complete ○Implemented according to plan △Delayed slightly

Toray Group CSR REPORT 2007 18-19 Basic Policy & Enhance Corporate Governance CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Management Transparency Basic Policy & Enhance Corporate Governance 1 and Management Transparency

established the Internal Control Department in October 2006 PDCA Cycle in CSR Management Action Program (FY 2006) as an entity reporting directly to the president. ● CSR Action Programs Toray Group will implement the PDCA Cycle by building a CSR management sys- We continue to steadily expand efforts to implement ● Three-year Environmental Plan tem. We will also maintain and enhance management transparency by bolstering recordkeeping and other control mechanisms that were origi- accountability with corporate governance and internal control systems. nally developed in pilot divisions in our head office and con- Prepare objectives Action Program Results solidated subsidiaries, and we expect associated internal con- and plans trols to be operational by the end of FY 2007. Implement 1. All Japanese subsidiaries and affiliates finished establishing CSR tasks and training Establish direction monitor and review all employees, and overseas subsidiaries and affiliates began similar efforts. and vision report to 2. The Group established the Internal Control Department and began building an Dialogue with Labor Unions stakeholders internal control system for ensuring compliance with J-SOX regulations. Members of management at the Senior Vice President level ● Management Philosophy ● Confirm achievement 3. The Group established the CSR Operations Group in the Corporate Review status of Action Programs and higher meet with labor representatives at the union ● CSR Guidelines Planning Division. ● Environmental and head level and higher at the biannual Central Labor and ● Corporate Ethics and Legal CSR accounting Management Council, where they exchange management Compliance Code of Conduct Commitment ● Ten Basic Environmental Rules ● Management review information and engage in dialogue with the labor union. Toray’s basic approach to CSR consists of working to fulfill the social responsibilities we have Implementation Leader as a company, striving together with society to achieve sustainable development, and becom- In order to resolve each labor-related issue, Labor and Motoo Yoshikawa ing an “Excellent Company” with global reach. I believe my role as CSR Committee chairman Management Council meet separately. In FY 2006, input from We established the CSR Operations Group in the Corporate Executive Vice President and is to spread CSR activities throughout Toray Group in order to increase the transparency of the union played a role in enhancing the Group’s programs Strategic Planning Division in September 2006 to strengthen Representative Director management while working to enhance internal controls and staying abreast of the latest Overall Coordinator for CSR for helping employees balance work and family life. Overall Coordinator for the Internal legal and ISO developments. CSR line activities and extend them throughout the Toray Control Department and Security Trade Group. The CSR Operations Group was spun off to become Administration Department CSR Committee Chairman the CSR Operations Department in June 2007. Toray Industries, Inc. CSR Promotion Framework Toray Group considers the promotion of CSR and growth in CSR Activities at Subsidiaries and Affiliates profitability as twin pillars of equal and central importance in The entire Toray Group seeks to pursue CSR activities as Toray Group Governance Structures ence to the authority of top management, a system that management. defined by the CSR Guidelines and Action Programs in combi- Toray Group has established unique governance structures reserves specific decision-making rights for each organiza- nation with the basic approach to management laid out in based on an overriding goal of pursuing a style of man- tional entity. Promotion of CSR on the Company-wide, the Corporate Philosophy, Corporate Missions, and Corporate agement that brings accountability to society, maintains To ensure operational efficiency, the Executive Committee Subsidiary/Affiliate, Division, and Facility Level Guiding Principles. transparency, and responds in good faith to the trust of and Board of Senior Vice Presidents together play a delibera- The CSR Committee, which reports directly to the president In April 2006, we launched CSR line activities by training our communities. tive role in facilitating resolutions by the Board of Directors and is chaired by the vice president, coordinates the activities key individuals at six model companies in Japan (Towa Toray Group has established a set of Information and decisions by the president. The Executive Committee is of six company-wide committees. CSR/Legal Compliance Orimono, Toray Monofilament, Ichimura Sangyo, Toray Disclosure Principles in order to ensure the independent responsible for the general direction of policy, while the Committees have been established in each subsidiary and International, Toray Construction, and Soda Aromatic). We and fair disclosure of relevant information. The Principles Board of Senior Vice Presidents concerns itself with issues in affiliate, division, and plant, where they promote CSR activi- subsequently began training key individuals at remaining are available online. implementation. Additionally, company-wide committees ties and serve as task force units of the CSR Committee. Japanese subsidiaries and affiliates in September 2006 and established to oversee key management themes play a sup- One unique aspect of Toray Group’s approach is CSR line launched CSR line activities in March 2007. The complete text of the Information Disclosure Principles is available plementary role in management execution along with the activities, a program that emphasizes on-site action with 100% We also began extending CSR activities to our overseas on the Toray website. CSR Committee. employee participation. Specifically, each worksite defines subsidiaries and affiliates, starting with three countries in Governance Structures CSR issues based on the viewpoint of multi-stakeholders, Southeast Asia (specifically, in Thailand, Malaysia, and General Stockholders Meeting Monitoring by the Board of Corporate Auditors CSR Guidelines, and Action Programs and then addresses Indonesia). The Board of Corporate Auditors which serves to enhance them through the PDCA Cycle. Election Election Election monitoring of the Group’s management is comprised of four Board of auditors, including two external auditors. AuditCorporate Audit Board of Resolution In addition to regular attendance at meetings of the Board Auditors Directors CSR Committee and Promotional Organization Executive Committee & of Directors by all auditors, the Board of Auditors met 11 Accounting Auditing President Approval Board of Senior Company-wide Company-wide cross- Division- and plant- Auditor Department Vice Presidents times in FY 2006. Toray maintains an organizational capability committees divisional committees level committees Internal audit Company-wide for monitoring directors’ execution of Group operations CSR Committee CSR Committee Secretariat Saiful Mazuari Osman Committees through periodic meetings with all directors and general man- Risk Management Leader, CSR Secretariat Audit Business execution Risk Management Committee CSR agers combined with regular audits of all worksites, plants, Committee Penfibre Sdn. Berhad Divisions and Japanese Overseas Committee CSR/Legal and Japanese and overseas subsidiaries and affiliates in Legal Compliance Compliance Committee plants in subsidiaries subsidiaries Committee Following Toray Group’s selection of “CSR Japan and affiliates and affiliates Departmental Corporate Ethics committees accordance with the policies and plans adopted by the Board Board of Committee Human Rights Human Rights Innovation” as one of its business strategies of Corporate Auditors for each fiscal year. The Auditing Directors Promotion Committee Promotion Committee and the decision to actively expand CSR Implementation by the Board of Directors and Department assists in audits when requested by auditors. President Traffic Safety Subcommittee activities to regions outside Japan, Penfibre was appointed as Safety, Health, and Model Company in Malaysia to promote CSR line activities. After Executive Committees Environment Committee Safety and Health Committee Environment and Penfibre’s president announced the launch of CSR activities in his The Board of Directors consists of 30 members. Because Toray Internal Control Department Established Global Environment capacity as the CSR Committee chairman in March 2007, we Global Environment Subcommittee Accident Prevention Committee Committee created a company-wide organization including both fibers and Group believes that the fulfillment of management responsi- Starting with the first fiscal year beginning from April 2008, Recycling Committee Recycling Committee films business to promote the CSR program. bility and transparency are best served by basing management Japan’s Financial Instruments and Exchange Law will require Product Safety Committee Product Safety Committee We aim to become an ideal CSR model company by encourag- judgments and decision-making on a specialized knowledge of companies to submit reports detailing internal control over Communications Committee ing understanding and participation on the part of all employees. local operations, our governance structures do not include financial reporting and independent audits by outside audi- Security Trade Administration Committee external or executive directors. Rather, we follow an inde- tors. As part of our efforts to build an effective internal con- pendent approach to governance founded on strict adher- trol system and comply with the new law’s requirements, we Non-CSR Affairs Committee

Toray Group CSR REPORT 2007 20-21 Uphold Corporate Ethics and Comply with Laws CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Regulations Uphold Corporate Ethics and Comply with Laws 2 and Regulations

All Toray executives and employees (including part-time Establishing and Operating Reporting and Implementation Leader Action Program (FY 2006) and temporary personnel) receive the Corporate Ethics and Consultation Channels Kiyoshi Fukuchi Employees who witness or suspect a corporate ethics or Toray Group will conduct ongoing educational activities concerning corporate Legal Compliance Handbook, which indicates the Code of Vice President, General Manager legal compliance violation are, in principle, to first report to Personnel and Industrial ethics and legal compliance while taking action as necessary to adjust to legal and Conduct and detailed explanations and notes. The second Relations Division other changes in the environment in which we operate. edition of the Handbook was published in April 2007 in or consult with their direct superior. If unable to do so, they Toray Industries, Inc. response to revisions of the Group’s Management Philosophy, may opt to take the issue to the consultation office oper- Action Program Results changes in applicable laws and regulations, and other new ated by their division or plant, or directly contact the 1. The Group continued educational activities at Toray and 115 Japanese and information. chairperson or secretariat of the Legal Compliance overseas subsidiaries and affiliates. The Group also creates similar codes of conduct, guide- Committee by means of a special hotline or email. During 2. The Group implemented “FY 2006 CSR and legal Compliance Line Activities” in FY 2006, at the request of the labor union in response to all workplaces lines, handbooks, and other 3. The Group sought to enhance security trade administration training, build information for Japanese and the enactment of the Whistleblower Protection Act, we internal control systems, and develop a distribution system for legal reform overseas subsidiaries and affili- added representatives of the labor union to reporting and information on a company-wide basis. ates with CSR/Legal Compliance consultation offices. The Executive Meeting, attended by Committees. representative directors, also accepts a range of proposals Commitment and opinions from employees regarding corporate ethics In extensive business operations in 21 countries and regions worldwide, Toray Group considers and legal compliance. corporate ethics and legal compliance to be among its most important management issues. Observing applicable laws and regulations in international society and in each of the countries We are aggressive about protecting the confidentiality of within which we operate is critical, as is contributing to society as a good corporate citizen Corporate Ethics and Legal Compliance employees reporting possible violations. During FY 2006, through programs that are grounded in local conditions. Going forward, we are committed to Handbook provisions prohibiting discrimination against employees acting as a model in steady, thoughtful action by fostering an understanding of the importance of corporate ethics and legal compliance on the part of every employee and ensuring that the making such reports or seeking advice, and establishing dis- imperative of compliance is put into practice throughout the Group’s everyday activities. Related article ciplinary action for false accusations, were added to labor See page 19 for the complete text of the Corporate Ethics and Legal contracts and company regulations. Compliance Code of Conduct.

Emphasizing Corporate Ethics and Promoting Corporate Ethics and Legal Compliance Corporate Culture Based on Ethics and Reporting and Consultation Channels Legal compliance The figure to the lower left illustrates the framework within Legal Compliance Executive Meeting Toray Group considers corporate ethics and legal compliance which Toray promotes corporate ethics and legal compliance. Toray encourages autonomous and voluntary educational to be among its most important management issues. Based on The Corporate Ethics Committee, which is chaired by the activities in every workplace to help spread employee Legal Compliance Committee Legal Compliance Committee a clearly defined stance and the leadership of top manage- president, discusses policies related to corporate ethics and awareness of corporate ethics and legal compliance issues. Chairperson or Secretariat (Personnel Department) ment , Toray Group works together toward this goal. the employee code of conduct, and encourages labor and Workplaces regularly discuss such issues at monthly management to work together for CSR efforts. The Legal meetings, conduct study groups, and research case stud- Responsible director or Local CSR/ division or Legal Compliance Compliance Committee is primarily composed of front-line ies in corporate misdeeds reported by the media. plant general manager Committee Framework for Promoting Corporate Ethics section managers and works to facilitate closer communica- Company-wide activities and initiatives in FY 2006 and Legal Compliance tion with top management. The Division- and plant-level included efforts to enhance legal compliance training in Upper-level manager Reporting and consultation office CSR/Legal Compliance Committees develop on-site activities security trade administration and the deployment in First (Member of Legal Corporate Ethics Committee step Direct superior Compliance Committee / Labor Union) Chair based on individual employees’ awareness of related issues. November of a Legal Reform Information Distribution President During FY 2006, the Group sought to augment the activi- System through which information about changes in laws Members ties by creating a new Corporate Ethics and Legal Compliance that are applicable to the Group’s activities is sent out to all Employee witnesses or suspects illegal activity, violation of Members of the Board and Chair of Toray Labor Union internal company rules, or deviation from social norms Observers Group in Toray’s Affiliated Companies Division to oversee the divisions as well as Japanese subsidiaries and affiliates in a Auditors Secretariat promotion of related activities, added to the previously estab- weekly email. We also launched a Company-wide Personnel Department lished CSR/Legal Compliance Committees at each Japanese CSR/Legal Compliance Bulletin Board system on the Strengthening Security Trade Administration Legal Compliance Committee subsidiary and affiliate. We also strengthened our compliance Company intranet in February 2007 as part of an effort to Following a warning issued in May 2006 by the Ministry of Chair framework by appointing directors and section heads in strengthen our ability to distribute information about legal Economy, Trade and Industry regarding an application for Executive Vice President and Representative Member of the Board in Charge of CSR Members charge of legal compliance at all subsidiaries and affiliates. compliance issues. authorization to export certain products to , Toray Executive Vice Presidents and Representative Member of the Board, We also continued to establish CSR/Legal Compliance and Toray International immediately established the Senior Vice President and Representative Member of the Board; General Manager of Manufacturing Division, General Managers of General Administration Committees at overseas affiliates, and as of March 31, 2007, Security Trade Administration Countermeasures Division and Legal Divisions, General Manager of Internal Control Department, and representatives from the division- and plant-level CSR/Legal Compliance Committees committees have been established at 63 overseas companies. and the Security Trade Administration Department. These Observers new organizational entities were created to form the basis Auditors Secretariat Corporate Ethics and Legal Compliance Code of of a framework for administering exports via third countries, Personnel Department Conduct and the Handbook three-country transactions, and imports by overseas affiliates All Toray Group executives and employees are obligated to in response to increasingly strict domestic and international Division and Plant-level CSR/Legal Compliance Committees Chair observe the specific provisions of the Corporate Ethics and regulations. Other FY 2006 initiatives saw the Group con- Division or plant general manager Legal Compliance Code of Conduct adopted in October 2003 ducting training for all offices and plants, surveying relevant Members In principle, the general managers of each department, in all of their corporate activities, both in Japan and overseas. divisions and departments, and providing guidance in but additional members can be added as needed. Violations of these rules result in strict punishment pend- implementing improvements. We also continued to build Plant-level committees also include branch labor union leaders. ing an inquiry conducted by the Rewards and Sanctions organizational frameworks for Japanese and overseas Committee and are followed by disclosure of relevant infor- subsidiaries and affiliates that handle listed (controlled) Legal Focus, Toray’s legal reform information website mation, an investigation of cause, and action to prevent a (operated by Dai-Ichi Hoki Co., Ltd.) substances and provide relevant training. recurrence.

Toray Group CSR REPORT 2007 22-23 Emphasize Safety, Accident Prevention, CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation Emphasize Safety, Accident Prevention, and 3 Environmental Preservation

Implementation Leader Responsible Care (RC) Activities Safety, Health, Accident Prevention, and Akihiro Nikkaku Action Program (FY 2006) Although chemical substances play an indispensable role in Environmental Audits Executive Vice President and modern society, they can have adverse effects on human Toray Group conducts annual Safety, Health, Accident Representative Director The Safety, Health, and Environment Committee will spearhead implementation of Overall Coordinator for the the 2006 company-wide Safety, Health, and Environment Action Policy. health and the natural environment if handled improperly. Prevention, and Environmental Audits to evaluate and Product Safety and Quality Assurance Planning Department Environmental preservation efforts will focus on meeting the targets laid out in the Responsible Care refers to the responsible and voluntary improve conditions and management at all manufacturing General Manager, Second Three-year Environmental Plan and formulating the Third Three-year implementation of appropriate safety, health, and environ- companies and plants. Specifically, the audit process encom- Manufacturing Division Environmental Plan. Toray Industries, Inc. mental measures when handling chemical substances passes three stages: an internal audit at each plant using a Action Program Results throughout the product lifecycle, from development and uniform auditing checklist, a preliminary on-site audit or manufacturing to distribution, use, and disposal. Toray has document audit by the auditing staff, and an executive 1. The Group met targets in the Second Three-year Environmental Plan, which ended with FY 2006, in reducing emissions of greenhouse gases, SOx and NOx, been an active member of the Japan Responsible Care Council audit by Toray’s board of directors and representatives or and PRTR chemical substances. (JRCC) since its establishment in 1995. FY 2006 initiatives supervisory company presidents for each region or country. 2. The Group redoubled Zero Accident Program efforts in light of 31 industrial focused on reviewing and rebuilding a new chemical During FY 2006, audits conducted at a total of 13 Toray accidents, two of which were serious. substance notification system and pursuing GHS*1 compliance. plants and laboratories, 25 plants at Japanese subsidiaries and affiliates, and 40 plants at overseas subsidiaries and *1 The Globally Harmonized System of chemical product categories and labeling. affiliates focused on issues such as the dangers of oxygen Commitment deficiency and forklift safety countermeasures. In the critical area of safety, we are striving to achieve the world’s lowest rate of lost-worktime injuries by pursuing the Step-up 3Z (Zero Accident Program), an important part of the IT-2010 ISO14001 Certification Manufacturing Technology Innovation Project. Environmentally, we are working to further lower As part of our RC activities, we have been working to the impact of our operations and contribute to the realization of a recycling-based society by acquire certification under the ISO14001 international stan- achieving the targets set forth in the Third Three-year Environmental Plan adopted in FY 2007. dards for environmental management. All 12 of Toray’s plants have already been certified. During FY 2006, 1 Japanese subsidiary as well as 6 overseas subsidiaries/affili- ates and 7 associated plants were certified, bringing the Unified Management of Safety, Safety, Health, Accident Prevention, and total to 42 subsidiaries/affiliates and 58 plants. Environmental Preservation Promotion System Health, Accident Prevention, and A Safety, Health, Accident Prevention, and Environmental Audit in progress Environmental Preservation Issues Toray’s company-wide committees ●Safety, Health, and Environment Committee ISO14001 Certification (As of March 31, 2007) Toray Group seeks to manage safety, health, accident preven- ●Recycling Committee ●Global Environment Committee REACH Regulation Compliance tion, and environmental preservation issues in a unified, ●Global Environment Subcommittee Toray: All 12 plants Shiga, Seta, Ehime, Nagoya, Tokai, Aichi, Okazaki, Mishima, Chiba, Tsuchiura, The European Union’s new REACH*2 chemical regulations Group-wide manner that includes Japanese and overseas sub- Japanese subsidiaries and Overseas subsidiaries and Gifu, Ishikawa affiliates (nationwide) affiliates (by country and region) took effect in December 2006, extending comprehensive sidiaries and affiliates. Each year we identify Safety, Health, ●Safety, Health, Accident Prevention, ●Safety, Health, Accident Prevention, Japanese subsidiaries and affiliates: 30 plants at 18 companies* controls to existing chemical substances. Toray Group Accident Prevention, and Environmental Action Policies and and Environment Conference and Environment Committee Du Pont-Toray Co., Ltd.; Opelontex Co., Ltd.; Toray Textiles, Inc.; ●Safety, Health, Accident Prevention, formed a REACH Countermeasure Promotion Department to pursue their implementation throughout the Group; in and Environment Managers Conference Overseas subsidiaries Toray Coatex Co., Ltd. (Kyoto, Chemical Products Plant); and affiliates Toray Monofilament Co., Ltd.; oversee compliance with the new regime and established 2006, we addressed the 16 Priority Actions listed in the Japanese subsidiaries ●Safety, Health Accident Prevention, Toyo Tire Cord Co., Ltd.; Toyo Plastic Seiko Co., Ltd. (Mishima, Koriyama); structures to pursue compliance at all Toray divisions and table to the lower right. The company-wide Safety, Health, and affiliates and Environment Committee Toray PEF Products Inc. (Konan, Tsukuba); Toray Advanced Film Co., Ltd. ●Safety, Health Accident Prevention, ●Safety, Health, Accident Prevention, (Mishima, Takatsuki, Fukushima, Nakatsugawa); departments as well as Japanese and overseas subsidiaries and Environment Committee reviews conditions at all Group Toray’s plants, divisions and Environmental Audits and Environment Committee Dow Corning Toray Co., Ltd. (Chiba, Fukui); and departments ●Safety, Health, Accident Prevention, ●Mutual Inspections by Country and affiliates. We are currently identifying targeted prod- companies and plants as well as associated performance in and Region Toray Fine Chemicals Co., Ltd. (Moriyama, Matsuyama, Tokai, Chiba); ●Environmental Preservation and Environmental Audits ucts in preparation for preliminary registration, which starts these areas to discuss and determine future directions and Management Committee ●Mutual inspections of safety and Toray Engineering Co., Ltd. (Numazu); ●Safety and Health Committee accident prevention Soda Aromatic Co., Ltd. (Noda, Koriyama, Okayama Chemicals); in June 2008. policies. Issues involving environmentally friendly products, ●Safety, Health, Accident Toray ACE Co., Ltd. (Ehime); Suido Kiko Kaisha, Ltd.; Prevention, and Environmental Audits product recycling, and global warming countermeasures are ●Mutual inspections by general managers of manufacturing departments Ichimura Sangyo Co., Ltd.; Toray International, Inc.; Chori Co., Ltd. *2 REACH: Registration, Evaluation, Authorization and Restriction of ●Mutual inspections of safety and accident prevention *In addition to the companies listed here, 12 subsidiaries located on the grounds of Toray plants have Chemicals the responsibility of the Global Environment Committee. also received certification. Each November we host the Toray Group Safety Meeting in Japan to promote safety awareness. This educational pro- Toray Group Safety, Health, Accident Prevention, and Overseas subsidiaries and affiliates: 28 plants at 24 companies Examining Environmental Efficiency Indicators Environmental Action Policies for 2006 USA: Toray Plastics (America), Inc. (Rhode Island, Virginia); gram is typically attended by more than 200 guests including A variety of environmental efficiency indicators have been Policies Priority Actions Toray Resin Co.; Toray Fluorofibers (America), Inc. proposed recently to express the relationship between busi- the president and other directors of the Board of Toray and C • Improve workplace UK: Toray Textiles Europe Ltd. ommon Hold meetings before and after work ● France: Toray Plastics Europe S.A. ness activities and their environmental impact. Because no its Japanese subsidiaries and affiliates, as well as plant general discipline ● Enhance education and management structures (laws, SOP) • Enhance risk ● Execute Business Continuity Plan (BCP) in the event of a major earthquake Italy: Alcantara S.p.A. standard approach has yet been determined for calculating managers and other employees. Enhance risk management and strengthen response capability Czech Republic: Toray Textiles Central Europe s.r.o. management ● an integrated indicator that incorporates various environ- ● Strictly follow SOP Indonesia: P.T. Century Textile Industry Tbk; P.T. Easterntex;

Related article S • Follow basic safety ● Enforce use of protective equipment and enhance P.T. Indonesia Toray Synthetics mental impacts, Toray Group is experimenting with express- ft Health afety rules See page 32 for more information about workplace safety. associated management Thailand: Thai Toray Textile Mills Public Co., Ltd.; Thai Toray Synthetics Co., Ltd. ing the results of environmental initiatives by calculating • Eliminate near- ● Develop countermeasures for serious near-accidents and (Bangkok, Ayutthaya); Luckytex (Thailand) Public Co., Ltd. (Mill-2) accidents apply horizontally throughout organization (increase safety of separate environmental efficiency indicators for principal rotating parts and moving parts on machinery) Malaysia: Penfibre Sdn. Berhad (Mill-3); Penfabric Sdn. Berhad (Mill-3, Mill-4); Toray Plastics (Malaysia) Sdn. Berhad ● Emphasis on handling and management of chemical substances environmental evaluation items instead of using an inte- • Rigorously manage Promote mental health management China: Toray Fibers (Nantong) Co., Ltd.; occupational health ● grated indicator. ● Pursue asbestos countermeasures Toray Sakai Weaving & Dyeing (Nantong) Co., Ltd.; A P ● Systematically promote anti-earthquake measures Toray Plastics (Shenzhen) Ltd.; Toray Film Products (Zhongshan) Ltd.; r cc evention (using both “hardware” and “software”) Toray Sanko Precision (Zhongshan) Ltd.; Related article ident • Enhance accident ● Review fire prevention equipment and associated Toray Fibers & Textiles Research Laboratories (China) Co., Ltd. prevention measures management methods See pages 58 to 59 for more information about environmental Korea: Toray Saehan Inc.; STECO, Ltd. efficiency indicators. 2007 Safety, Health, Accident ● Review and improve accident prevention and environmental measures at chemical plants

Prevention, and Environment Envi • Achieve targets

r Achieve targets for reducing environmentally harmful emissions Conference for Japanese onment established by the ● Colored companies and plants gained certification during FY 2006. Subsidiaries and Affiliates Second Three-year ● Strive to achieve zero emissions Environmental Plan ● Pursue green procurement and green purchasing

Toray Group CSR REPORT 2007 24-25 Emphasize Safety, Accident Prevention, CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation

Three-Year Environmental Plans of greenhouse gases (GHG), chemical substances, SOx, NOx, Action on Global Warming Initiatives Deployment of a Natural Gas Cogeneration Toray Group is pursuing systematic efforts to reduce its envi- and dust. Overseas subsidiaries and affiliates could not Toray is working systemically to reduce greenhouse gas emis- System at the Shiga Plant ronmental footprint by setting a basic environmental policy achieve the plan’s targets due to production increases, sions and prevent global warming through measures such as Construction is ongoing on a for the medium-term. although they made efforts to reduce atmospheric emis- conserving energy and converting to more environmentally project to increase overall effi- The Second Three-Year Environmental Plan ended in FY sions of chemical substances and total waste. friendly fuels. ciency by conversion from fuel 2006 after guiding dramatic progress in reducing emissions oil to natural gas and deploy- Toray’s action on Global Warming Initiatives ing a cogeneration system. The new system, which is designed Results of the Second Three-Year Environmental Plan Toray has established the goal of reducing GHG emissions by 10% compared to FY 1990 levels by FY 2008. Steady to reduce emissions by another Evaluation Theme FY 2006 Target Results Reference Page energy conservation efforts during FY 2006, including the 40ktCO2, should come online in Shiga Plant (1) Reduce greenhouse gas emissions conversion of boilers at the Shiga Plant and a cogeneration January 2008. (FY 2008 target compared to FY 1990) 27 Toray GHG: 10% reduction GHG: 9.6% reduction (FY 2008 forecast: 12% reduction) ○ system at the Chiba Plant to city gas and reductions in heat Prevention of CO2: Reduce to FY 1990 levels CO2: 1.7% increase △ loss, generated steady progress as we reduced emissions by Taking Energy Conservation Activities Overseas global warming (2) Energy conservation 9.6% compared to FY 1990 levels. Toray Sanko Precision (Zhongshan) Toray: Reduce unit energy consumption by 1% annually Toray has also set a target of a 1% annual reduction in Ltd. is continuing energy conser- Japanese subsidiaries and affiliates*1: Reduce unit energy Toray: 3.5% reduction in unit energy consumption ○ 27 consumption by 1% annually Japanese subsidiaries and affiliates: 1% reduction at 11 plants ▲ unit energy consumption, and in FY 2006 we achieved a vation activities with the goal of reducing power consumption Reduce chemical substances emitted to atmosphere 3.5% reduction. Steady efforts at each plant and energy Toray (compared to FY 1995) conservation assessments by company experts contributed by 1,200 megawatt-hours per PRTR Law substances: 80% reduction PRTR Law substance emissions: 74% reduction △ 28 to this success. year under the guidance of a JCIA PRTR substances: 70% reduction JCIA PRTR substance emissions: 78% reduction ○ Joint activities by Toray Sanko Precision GHG Emissions (Toray) senior expert from Toray. (Zhongshan) and Toray Industries (South Manegement Japanese subsidiaries and affiliates (compared to FY 1998) China) PRTR Law substances: PRTR Law substance emissions: 66% reduction of chemical 60% reduction ○ (10,000 tons, CO ) N2O emissions substances JCIA PRTR substances: 60% reduction JCIA PRTR substance emissions: 62% reduction ○ 28 2 300 CO2 emissions Developing New Manufacturing Processes to Overseas subsidiaries and affiliates (compared to FY 2000) 52 14 16 Improve Efficiency PRTR Law substances: 30% reduction PRTR Law substance emissions: 9% increase × 42 30 25 JCIA PRTR substances: 30% reduction JCIA PRTR s substance emissions: 12% increase × 28 200 Carbon fiber composite mate- rials help reduce fossil fuel Toray (compared to FY 1998) consumption by enabling SOx emissions: 40% reduction SOx: 2,626 tons (48% reduction) ○ 100 213 231216 212 216 213 Air quality NOx emissions: 15% reduction NOx: 2,353 tons (18% reduction) ○ 29 more lightweight designs for Dust emissions: 40% reduction Dust: 175 tons (45% reduction) ○ 0 aircraft and automobiles. We 90 03 04 05 06 08 (Fiscal year) are working to develop manu- Toray (compared to FY 1998) (Base year) (Target) facturing processes that use at Water BOD emissions: 20% reduction BOD: 1,271 tons (19% reduction) △ 30 quality COD emissions: 20% reduction COD: 940 tons (11% reduction) ▲ least 10% less energy compared Discussion at the Torayca* Energy Consumption and to conventional processes. Technical Department Toray Unit Energy Consumption Index (Toray) Total waste generated: 27% reduction over FY 1998 Total waste generated: 0.6% increase × Landfill waste: 5% or lower of total waste generated Landfill waste: 2.0% ○ 31 Energy Related article Recycling rate: 95% or higher Recycling rate: 93.0% △ Unit energy consumption See page 13 for more information about the contribution of carbon Waste (Million gigajoules) fiber composite materials to energy conservation. reduction (Index) Japanese subsidiaries and affiliates 40 100 100 Total waste generated: 20% reduction over FY 1998 Total waste generated: 15% increase × 91.3 93.0 Landfill waste: 3.8% Landfill waste: 5% or lower of total waste generated ○ 31 91.7 88.4 80 Recycling rate: 75% or higher Recycling rate: 83.3% ○ 30 Initiatives to Protect the Ozone Layer 60 Toray halted use of chlorofluorocarbons (CFCs) in all manufac- *1 Type 1 energy control designated plants ○: Target achieved △▲: Nearly achieved ×: Target not achieved 20 40 turing processes in 1994. We have also stopped purchasing 30.3 32.7 31.0 29.5 30.0 CFCs for use in refrigerators and are working to replace exist- 10 20 Third Three-Year Environmental Plan We are committed to reducing the environmental effect of ing CFCs with alternative compounds. The Third Three-Year Environmental Plan that took effect our operations and pursuing steps to achieve a recycling-based 0 0 in FY 2007 articulates Toray Group’s overall approach to society even as we plan for increased production by imple- 90 03 04 05 06 (Fiscal year) (Base year) environmental issues by establishing Group-wide targets. menting environmental countermeasures on an ongoing basis. FY 2006 Results and FY 2007 Plan (Initiatives to Prevent Global Warming) Area New Targets (FY 2010 targets) Second Three-Year Environmental Plan (FY 2006 targets) FY 2006 progress FY 2007 plan Toray: 6% or greater reduction in greenhouse gases over FY 1990 Prevention of 1% annual reduction in unit energy consumption 3.5% year-on-year reduction Continue regular energy conservation activities and global warming Toray Group (Japan): 15% or greater reduction in greenhouse gases per unit sales over FY 1990 Individual target for subsidiaries and plants (including overseas): 2% or greater annual reduction in unit energy consumption energy conservation assessments 10% reduction in GHG 9.6% reduction in GHG emissions over FY 1990 Install natural gas cogeneration system at the Shiga Plant Toray emissions over FY 1990*1 Manegement Atmospheric emissions of PRTR Law target substances, Toray Group: 55% reduction over FY 2000 Complete fuel conversion for the boilers at the of chemical 1.7% increase in CO2 emissions over FY 1990 Atmospheric emissions of volatile organic compounds (VOCs), Toray Group: CO2 reduction to FY 1990 level substances 55% reduction over FY 2000 Mishima Plant Continue regular energy conservation activities and Pursue the goal of zero emissions Japan 1% annual reduction in unit energy consumption 1% or greater reduction at 11 plants Percentage of simply disposed waste*2, Toray Group: 34% or lower energy conservation assessments Waste reduction Percentage of landfill waste, Toray Group (Japan): 5% or lower Recycling rate*3, Toray Group: 85% or higher Separate targets by company Conducted an energy conservation Continue regular energy conservation activities and Overseas assessment at 6 plants energy conservation assessments *2 Percentage of waste not put to effective use (i.e., waste disposed of in landfills, by simple incineration, etc.). *3 Recycling rate (%) = (recycled wastes + valuable resources) + (total waste generated + valuable resources) x 100 *1 FY 2008 target

Toray Group CSR REPORT 2007 26-27 Emphasize Safety, Accident Prevention, CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation

Voluntary Initiatives to Reduce Atmospheric Emissions of JCIA PRTR Substances Initiatives to Prevent Air Pollution Atmospheric Emissions (Overseas Subsidiaries and Affiliates) Atmospheric Emissions of Chemical Number of target substances FY 2006 reduction target We met all voluntary reduction targets laid out in the (Tons) SOx Overseas subsidiaries and affiliates 46 30% reduction 6,000 5,967 NOx Substances Japanese subsidiaries and affiliates 73 60% reduction Second Three-Year Environmental Plan thanks to active (Tons) Dust Consistent with its emphasis on the importance of reducing Toray 91 70% reduction efforts at the Shiga Plant, Chiba Plant, and other facilities to 5,000 4,000 4,803 atmospheric emissions of chemical substances, the Group has convert from fuel oil to city gas. 4,000 407 3,570 reduced emissions of PRTR Law substances by 57%. The Third 3,000 2,924 3,000 2,565 Three-Year Environmental Plan also incorporates initiatives to Toray Group Performance 2,201 1,698 2,000 reduce atmospheric emissions of volatile organic compounds 2,000 60% reduction 60% reduction Toray Group met the reduction targets laid out in the Second 1,699 1,489 448 (Group-wide) 1,028 1 468 (Group-wide) 1,000 (VOCs)* . 481 Three-Year Environmental Plan with FY 2006 emissions of 609 492 506 988 457 285 1,000 860 0 679 SOx and NOx each falling by 12% and emissions of dust rising 1,532 703 644 03 04 05 06 (Fiscal year) Toray Group Performance and Future Initiatives 689 0 542 437 340 460 by 2%. The conversion of fuel oil boilers at the Shiga Plant 2 ○Reducing Atmospheric Emissions of PRTR Law* (Base year) 03 04 05 06 06 (Fiscal year) and Chiba Plant to use city gas enabled particularly signifi- Initiatives at Toray (Target) Substances Note: The base year is the fiscal year in which surveys began (Toray: 1995; Japanese subsidiaries cant reductions in SOx and dust emissions. During FY 2006, boilers at the Shiga Plant were converted Toray achieved a year-on-year reduction in emissions of 9% and affiliates: 1998; overseas subsidiaries and affiliates; 2000). Efforts to switch to low-sulfur fuels and strengthen to city gas began operation in November 2006, reducing in FY 2006, although it couldn’t completely reach the operational management at Japanese subsidiaries and the environmental impact of Toray operations by cutting Second Three-Year Environmental Plan’s target of a 74% our commitment to continue to pursue voluntary reduc- affiliates helped lower emissions compared to the previ- emissions of SOx by 338 tons, NOx by 89 tons, and dust by reduction over the base year FY 1995. Japanese subsidiaries and tions. We are also extending our reduction efforts from ous fiscal year. 7 tons over approximately six affiliates achieved their targets for the second year in a row JCIA PRTR substances to include all VOCs, with the goal of At overseas subsidiaries and affiliates, aggressive efforts months of use. with a 66% reduction over FY 1998 levels. Overseas subsidiaries cutting overall Group emissions by 55% compared to FY over the last two or three years to convert boiler operation Starting in FY 2007, year- and affiliates reduced emissions 5% compared to the previous 2000 levels. from fuel oil to natural gas at companies in Southeast Asia round operation of the Shiga year, although increases in production since 2003 make that drove dramatic reductions of 56% for SOx, 50% for NOx, and Plant’s city gas boilers and the *1 VOCs: Japan’s Air Pollution Control Law was revised in 2004 to estab- equivalent to a 9% increase in emissions over FY 2000 levels. lish the target of cutting nationwide atmospheric VOC emissions by 56% for dust compared to the base year FY 2001. conversion from heavy fuel oil FY 2010 by 30% compared to FY 2000, through emissions regulations As a result, the entire Group posted significant reduc- to city gas at the Mishima Plant and voluntary efforts by emitters. Atmospheric Emissions of PRTR Law Substances *2 Law designed to assess environmental emissions of certain designated tions of 52% for SOx, 39% for NOx, and 53% for dust (operational in July 2007) are Number of target substances FY 2006 reduction target chemical substances and encourage improvements in their management. compared to the base year (Toray: 1998; Japanese and expected to further reduce SOx *3 Japan Association Overseas subsidiaries and affiliates 34 30% reduction overseas subsidiaries and affiliates: 2001). emissions over FY 2006 levels by (Tons) Japanese subsidiaries and affiliates 46 60% reduction 2,500 Toray 59 80% reduction Initiatives at Toray 360 tons at the Shiga Plant and 800 tons at the Mishima Plant. During FY 2006 we completed 2,000 391 Overall Group emissions are the installation (2nd stage) of a Atmospheric Emissions (Toray) 1,500 expected to decrease by 56% 796 57% reduction regenerative combustion facil- (Tons) Natural gas boiler at the (Group-wide) 63% reduction SOx compared to FY 2006 levels. Mishima Plant 1,000 ity for organic exhaust gases at 6,000 NOx 426 445 (Group-wide) 450 Dust 428 274 the Chiba Plant. The new facil- 5,003 500 1,070 460 370 259 270 318 ity, which will enable the plant Initiatives at Overseas Subsidiaries and Affiliates 342 348 307 279 4,000 0 214 3,251 3,364 FY 2006 saw a dramatic reduction in emissions in (Fiscal year) to reduce emissions by 14 tons, 2,856 2,991 3,000 (Base year) 03 04 05 06 06 2,666 2,626 Thailand, Indonesia, and Malaysia due primarily to the (Target) is expected to become fully 2,462 2,308 2,353 2,420 Note: The base year is the fiscal year in which surveys began (Toray: 1995; Japanese subsidiaries 2,000 completion of efforts to convert companies with high and affiliates: 1998; overseas subsidiaries and affiliates; 2000). operational during FY 2007. atmospheric emissions to the use of natural gas. We plan Efforts to boost recovery of 319 182 192 198 175 190 to continue working aggressively to convert equipment process exhaust gases at the 0 ○Reducing Atmospheric Emissions of JCIA*3 PRTR Regenerative combustion facility (2nd 9803 04 05 06 06(Fiscal year) to natural gas use. Ehime Plant reduced emissions stage) at the Chiba Plant (Base year) (Target) Substances We checked meas- by 7 tons. Toray and its Japanese subsidiaries and affiliates achieved urement of exhaust year-on-year reductions of 22% and 8%, respectively, dur- Atmospheric Emissions (Japanese Subsidiaries and Affiliates) gas concentrations ing FY 2006, achieved Second Three-Year Environmental (Tons) SOx for companies in Initiatives at Overseas Subsidiaries and Affiliates 100 NOx Plan targets. Overall the Group reduced emissions by 60% Dust Southeast Asia and Toray Plastics (Malaysia) Sdn. Berhad continued efforts 84 82 over the base year. 80 78 China using the begun last year to boost recovery of organic exhaust gases instrumental analysis during FY 2006. 60 ○Voluntary Reductions Under the Third Three-Year 50 method, and we are The initiative is expected to yield maximum results dur- 40 43 Environmental Plan 37 working to enhance ing FY 2007 by reducing emissions by 63 tons, and the com- 30 The Third Three-Year Environmental Plan established the 20 19 operational manage- pany plans to systematically implement similar initiatives in 15.2 11.9 target of reducing Group-wide atmospheric emissions of 8.1 6.3 ment. the future. 0 Measurement of exhaust gas concentrations at PRTR Law substances by 55% over FY 2000 levels, reflecting 03 04 05 06 (Fiscal year) Perfabric Sdn. Berhad

FY 2006 Results and FY 2007 Plan (Initiatives to Reduce Atmospheric Emissions of Chemical Substances) Second Three-Year Environmental Plan (FY 2006 targets) FY 2006 progress FY 2007 plan FY 2006 Results and FY 2007 Plan (Initiatives to Prevent Air Pollution) Second Three-Year Environmental Plan (FY 2006 targets) FY 2006 progress FY 2007 plan 70% reduction in JCIA PRTR substances Toray 78% reduction Utilize catalytic combustion facility at the Ehime Plant. over FY 1995 40% reduction in SOx emissions over FY 1998 48% reduction Convert fuel for boilers at the Mishima Plant 60% reduction in JCIA PRTR substances Japan 62% reduction Implement measures at Toray Advanced Film Co., Ltd. over FY 1998 Toray 15% reduction in NOx emissions over FY 1998 18% reduction Lower fuel-triggered NOx by converting fuel for boilers to natural gas 30% reduction in JCIA PRTR substances Overseas 12% increase Implement measures at Toray Plastics (Malaysia) Sdn. Berhad. 40% reduction in dust emissions over FY 1998 45% reduction Convert fuel for boilers at the Mishima Plant over FY 2000

Toray Group CSR REPORT 2007 28-29 Emphasize Safety, Accident Prevention, CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation

Initiatives to Prevent Water Pollution As a result, overall BOD emissions for Toray Group fell Initiatives to Reduce Waste Zero Emissions Activities Toray Group purifies all wastewater from plant production 34% compared to the base year (Toray: 1998; Japanese and Toray Group is redoubling initiatives to improve recycling Toray Group defines zero emissions as a waste stream activities with activated sludge treatment and other systems overseas subsidiaries and affiliates: 2001). rates and achieve zero emissions as part of larger efforts to where simply disposed waste accounts for 1% or less of before release. Although we were not able to meet COD tar- bring about a recycling-based society. total waste generated, and each of our Group companies gets, we came extremely close to meeting BOD targets Water Emissions and plants works to achieve zero emissions by pursuing (Overseas Subsidiaries and Affiliates) because of improvements in manufacturing processes and Waste Reduction Activities waste reduction activities. During FY 2006, 4 plants wastewater treatment facilities. (Tons) BOD Despite reduction activities such as process stabilization and achieved zero emissions for the first time to bring the total 4,000 3,915 3,845 COD 3,593 3,656 recycling of waste products, the total volume of waste gen- to 13 plants at 9 companies, an increase of 2 plants over the Toray Group Performance 3,000 erated by Toray Group grew 5,000 tons over the previous previous year. Efforts to meet the Second Three-Year Environmental Plan 2,000 year to 9,300 tons, approximately 7,000 tons of which were target of reducing BOD emissions by 20% were only able to due primarily to increased production. Key reduction activi- ○Initiatives at Opelontex Co., Ltd. 1,000 804 Building on ongoing recovery and recycling of materials achieve a 19% reduction due to an emissions increase of 647 581 598 ties included the construction of a sludge dryer at the including yarn waste and waste paper tubes, we achieved 150 tons over FY 2006. 0 Okazaki Plant to reduce waste volume, efforts to increase Although we reduced COD emissions by 11% compared 03 04 05 06 (Fiscal year) throughput at TFC’s Chiba Plant wastewater treatment zero emissions by implementing thermal recycling of waste to the base year, a year-on-year increase of 1.7% prevented Note: BOD and COD figures reflect totals for 33 plants at 24 companies facility to reduce the volume of wastewater that must be cloth contaminated with machine oil. us from reaching our voluntary reduction target. Going for- treated at outside facilities, and the achievement of more ward, we will be redoubling process improvements and stable production at Indonesia Toray Synthetics through ○Initiatives at Maruichi Fiber Co., Ltd. (Nou Plant, wastewater stabilization. Initiatives at Toray enhanced cleaning at the company’s facilities to reduce Itoigawa Plant) BOD emissions at Japanese subsidiaries and affiliates Water quality improvement efforts at the Ehime Plant yarn waste. We achieved emissions by augmenting existing recycling of increased 2% year-on-year due to increasing production, while included the construction of a new MBR treatment facility, During FY 2006, Toray Group reduced landfill waste by materials such as waste yarn with efforts to utilize a neigh- COD emissions fell 10%. which began operation in 3,000 tons compared to the previous year to 19,000 tons. boring recycling center to generate electricity from waste BOD emissions at overseas subsidiaries and affiliates rose August 2006. Compared to con- Toray’s landfill rate for FY 2006 was 2.0%, marking the incineration and to recover and recycle unburnable waste as 3% year-on-year in Southeast Asia and China, while COD ventional treatment facilities, fourth straight year we have achieved the target of 5.0%. a raw material for cement production. emissions fell 5%. the plant’s high throughput Japanese subsidiaries and affiliates met targets for the allows it to output treated second straight year with a landfill rate of 3.8%. We share innovations at plants that have achieved zero water at a higher level of purity Our recycling rate improved 1.9% over the previous year emissions among Group companies and plants to enable more Water Emissions (Toray) while maintaining higher acti- The Ehime Plant’s new MBR treatment to 93.0%, barely missing the target of 95%, while Japanese companies and plants to achieve that goal in the future. facility (Tons) BOD vated sludge concentrations. subsidiaries and affiliates posted a recycling rate of 83.3% 2,000 COD to meet the target of 75% for the second year in a row. The 1,575 Initiatives at Japanese Subsidiaries and Affiliates Zero Emission Companies and Plants in FY 2006 1,500 recycling rate for overseas subsidiaries and affiliates was 1,297 1,271 1,260 Zero emissions initiatives at the Chiba Plant of Toray Fine 65.7%, an improvement of 0.8% over the previous year. 1,053 1,096 1,126 Toray Seta Plant, Okazaki Plant, Gifu Plant, Tsuchiura Plant 1,000 941 941 924 940 840 Chemicals Co., Ltd. (TFC) include completely breaking down highly concentrated organic liquid waste in spray combus- Matsumoto Textiles, Toray Coatex, Maruichi Fiber (Nou Plant, 500 (ppJapan Itoigawa Plant), Toyo Plastic Seiko (Mishima Plant), g) tion equipment and treating Du Pont-Toray, Opelontex, Soda Aromatic (Koriyama Plant) 0 liquid waste generated during 9803 04 05 06 06 (Fiscal year) Overseas Toray Film Products (Zhongshan) (Base year) (Target) the polysulfide polymer man- Total Waste Generated and Simply Disposed Waste (Toray Group) (Colored companies and plants achieved zero emissions for the first time during FY 2006.) Note: BOD figures include all 12 plants and 1 research center. COD figures include the 6 plants subject to ufacturing process with acti- Total Pollutant Load Control. vated sludge and activated Total waste volume Simply disposed waste volume carbon adsorption equipment Overseas Overseas Recycling Rate and Landfill Rate (Toray Group) Japan Japan （％） Recycling rate to reduce COD concentrations (1,000 tons) 100 Toray Toray 91.4 91.1 93.0 Toray Water Emissions to 5 mg/l or lower levels. Liquid waste spray combustion 100 86.2 88.5 80.8 83.3 Japan equipment at TFC (Chiba) 35.1 33.3 30.1 80 74.0 (Japanese Subsidiaries and Affiliates) 80 29.2 29.9 65.3 80.7 64.9 65.7 Overseas 58.3 (Tons) BOD Initiatives at Overseas Subsidiaries and Affiliates 60 60 55.4 28.5 150 COD 24.7 31.6 26.2 27.4 57.5 Landfill rate Toray Plastics (Shenzhen) Ltd. 26.1 52.0 40 40 32.7 47.5 Toray 27.3 26.7 45.6 120 22.7 Japan (TPSZ) constructed a new anaer- 33.5 32.3 31.1 20.3 33.7 23.3 20 17.8 27.6 20 Overseas 92.9 6.0 90 obic coagulation treatment 8.6 6.7 6.9 6.3 5.1 4.7 3.8 73.3 71.3 72.6 0 8.8 4.8 6.8 5.7 5 11.7 64.7 0 4.44.4 4.14.1 3.83.8 2.02.0 60 56.9 52.1 facility capable of processing 46.7 9803 04 05 06 (Fiscal year) 9803 04 05 06 (Fiscal year) 30 300 cubic meters of waste- (Base year) (Base year) Note: Overseas figures do not include Toray Saehan, which began tracking waste statistics in FY 2006. The inclusion of data for Toray Saehan improves the overseas recycling rate to 73.9% and the landfill rate to 50.3%. 0 water from its resin compound 03 04 05 06 (Fiscal year) manufacturing process daily. New wastewater treatment facility at 4.4 4.1 3.8 2.0 TPSZ in China Note: BOD figures include 24 plants at 19 companies. COD figures include the 7 plants subject to Total Pollutant Load Control. FY 2006 Results and FY 2007 Plan (Waste Reduction)

Second Three-Year Environmental Plan (FY 2006 targets) FY 2006 progress FY 2007 plan

Total waste generated of 24,500 tons or less 33,700 tons Reduce simply disposed waste Toray Landfill rate of 5% or lower 2.0% Increase recycling rate FY 2006 Results and FY 2007 Plan (Initiatives to Prevent Water Pollution) Recycling rate of 95% or higher 93.0%

Second Three-Year Environmental Plan (FY 2006 targets) FY 2006 progress FY 2007 plan Total waste generated of 19,800 tons or less 28,500 tons Reduce simply disposed waste Japan Landfill rate of 5% or less 3.8% Increase recycling rate Recycling rate of 75% or lower 83.3% 20% reduction in BOD emissions over FY 1998 19% reduction Reduce BOD and COD at the Ehime, Nagoya, and Toray With no overall targets, individual companies set their Reduce simply disposed waste Tokai Plants, and other plants Overseas 20% reduction in COD emissions over FY 1998 11% reduction own targets for reducing waste Increase recycling rate

Toray Group CSR REPORT 2007 30-31

4.4 4.1 3.8 2.0 Emphasize Safety, Accident Prevention, CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation

Occupational Safety Initiatives Zero Accident Initiatives Accident Prevention Initiatives Distribution Safety Initiatives The first item in the Corporate Guiding Principles of Toray’s Toray Group is working to completely eliminate serious acci- In addition to conducting accident preparedness drills, Toray Toray works to ensure shipping safety by maintaining a sys- Management Philosophy is “Safety and Environment,” reflect- dents and achieve the world’s lowest rate of lost-worktime pursues a variety of voluntary safety activities to prevent acci- tem that facilitates emergency communications in the event ing the top priority we give to creating a safe workplace culture injuries through Zero Accident. dents involving fires and explosions. of shipping accidents and conducting emergency drills. and working environment. Since 2006 we have been pursuing Group-wide Safety Activities zero accident activities as one of the Manufacturing Voluntary Safety Inspections with Toray’s Safety Management of Hazardous Substances Technology Innovation Projects under the IT-2010 mid-term Key Toray Group safety Proprietary Checklist A variety of legal regulations such as the Fire Service Law, business strategies. The entire Group is working together to policies are determined Toray Group has prepared the FP Checklist, a proprietary High Pressure Gas Safety Law, and Poisonous and Deleterious meet the project’s target of completely eliminating serious acci- by the Safety, Health, and checklist of 550 items relating to fire and explosion accident Substances Control Law require the assurance of safety dents and achieving the world’s lowest rate of lost-worktime Environment Committee prevention. The entire Group, including subsidiaries and when transporting hazardous substances. Toray’s Hazardous injuries*1 (0.05 or lower). To do so, all companies, offices, and communicated to affiliates, works to prevent fire and explosion accidents by Substance Transport Safety Management Regulations gov- and plants create annual plans, and directors responsible for Japanese and overseas utilizing the checklist to conduct voluntary annual inspec- ern matters related to the safe transport of combustible or the project manage plants’ efforts across the organization. subsidiaries and affiliates tions. hazardous materials. We are working to conclude safety Similarly, responsible directors bring a perspective that through the Safety, Health, agreements with customers, suppliers of raw materials and cuts across individual businesses to bear in creating and pur- Accident Prevention, and 25th Toray Group Japan Safety Meetingt Preventing Recurrences by Sharing Accident resources, and distribution partners to define the specific suing plans to address business-specific issues. Environment Conference Information division of safety management roles and responsibilities for subsidiaries and affiliates. The annual Toray Group *1 Number of fatalities and injuries causing lost work days per 1 million In the event of a fire accident or near-accident, a Fire during shipment and material handling. Safety Meeting, which is attended by Toray’s president, man-hours. Accident/Near-accident Report is issued as a means of shar- board members, office and plant general managers, presi- ing information throughout the Group to prevent similar Initiatives to Reduce Distribution Accidents dents of Japanese subsidiaries and affiliates, and other Toray Group Safety Achievements accidents from occurring in the future. The entire Group The Transport Safety Law*2 enacted in October 2006 man- employees, provides an opportunity for participants to listen Toray Group experienced a total of 31 accidents in 2006 (Lost implemented countermeasures to prevent recurring acci- dates improvements in distribution and transport safety. As first-hand to the policy objectives of top management, hear work time and Non-lost work time), of which 3 occurred at dents following two serious accidents in 2006, when a heat part of its responsibility as a shipper, Toray has long asked reports on safety activities by Toray and Japanese sub- Toray, 13 at Japanese subsidiaries and affiliates, and 15 at over- medium circulation pump caught fire at the Nagoya Plant distribution partners involved in shipping Toray products to sidiaries and affiliates, and work together toward safety seas subsidiaries and affiliates. The rate of lost-worktime (see CSR Report 2006 for more information) and a lightning work aggressively to prevent overloading, and during FY activities and safety management, for example by applying injuries was 0.27 (Toray parent: 0.20), and the overall accident strike sparked a fire at the Seta Plant. 2006 we sought to increase the effectiveness of those their respective strengths and innovations horizontally rate including accidents that did not cause lost worktime was efforts by conducting random checks of truck weight at across the Group. 0.39 (Toray parent: 0.27). These numbers compare favorably to Related article each of our plants. In the future we will continue to work Japan’s overall manufacturing industry rate of 1.02. See page 35 for more information about the lightning strike and fire with our distribution partners to reduce distribution acci- at the Seta Plant. 2006 Safety Slogan dents by regularly conducting similar activities. IT-2010 Achieve Zero Accident. *2 A law requiring shippers to establish and strengthen safety manage- Accident Prevention Education and Drills ment systems. Everyone Keep the Basic Rule! Number of Labor Accidents (Toray Group) Toray Group companies believe that giving employees first- hand experience of the potential dangers of the chemicals Principal 2006 initiatives (No. of accidents) Toray Emergency Response 300 Japanese subsidiaries and affiliates they handle and the frightening potential of fires and Toray maintains emergency (including regional affiliates) • Observe work standards 250 explosions with test devices Overseas subsidiaries and affiliates communication systems and • Enforce use of protective equipment and 200 increases the effectiveness conducts emergency drills to enhance associated management 150 of accident prevention prepare for accidents that might • Develop countermeasures for serious near-accidents 100 efforts. To this end, we sys- and apply laterally throughout the organization occur during the shipment of its 50 tematically conduct experi- products. In the event that such 0 mental demonstrations of an accident were to occur, our 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 (Year) Related article fires and explosions. response systems are capable of See page 24 for more information about Toray’s system for promoting We also conduct system- safety, health, accident prevention, and environmental preservation. dispatching support personnel to atic fire prevention drills the accident site immediately. In Explosion demonstration (Shiga Plant) covering communications, addition, drivers of shipping Introduction of Automated External Labor Accident Frequency Rate (Toray Group) evacuation, firefighting, vehicles carry Yellow Cards*3 Defibrillators (AED) (Rate) Japanese manufacturing industries and other activities to minimize dam- bearing descriptions of emer- Toray placed AEDs, which were recently approved for 4.0 (accidents causing lost worktime) age in the event of an accident. We gency measures for minimizing general use by the government, in all offices, plants, and 3.5 Toray Group (all accidents) Yellow card conducted comprehensive fire drills, damage at accident sites. laboratories. Employees at all worksites are preparing for 3.0 Toray Group 2.5 (accidents causing lost work time) emergency task force drills, and emer- *3 Cards summarizing the names of any hazardous substances, applica- accidents by undergoing training on how to use the devices 2.0 gency communication drills last year. ble laws and regulations, hazardous properties, emergency accident 1.5 as well as in CPR techniques. Dust explosion experiment procedures, emergency reporting and contact information, methods 1.0 for minimizing the spread of damage, and other information. 0.5 0.0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 (Year)

AED placement Lifesaving drill with an AED Firefighting drill (Tsuchiura Plant) Emergency drill (Okazaki Plant) (Tokyo head office) (Nagoya Plant)

Toray Group CSR REPORT 2007 32-33 Emphasize Safety, Accident Prevention, CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 and Environmental Preservation

Environmental Accounting Toray Group Facility Investment in Safety, Health, Environmental Risk Management the surface and aerating it. Neither facility has fallen Toray introduced environmental accounting in FY 1999 to Accident Prevention, and Environmental Toray Group seeks to control and reduce environmental risk below environmental standards, but steady cleanup work record environment-related investments and costs and calcu- Preservation Projects in order to fulfill the “Safety and Environment” priorities is making a difference. late their effectiveness. In addition to the environmental preservation, energy conser- that occupy the top position in the Corporate Guiding We are committed to con- vation, recycling, and other areas targeted by environmental Principles of Toray’s Management Philosophy. ducting voluntary surveys, Accounting Results for FY 2006 accounting, Toray tabulates facility investment related to reporting and otherwise dis- Capital investment totaled 2.09 billion yen, primarily for safety, accident prevention, and health. FY 2006 investment Managing Environmental Risk closing survey results, and updating electrostatic precipitators on boilers, reducing in this category totaled 4.3 billion yen for Toray, 1.3 billion Toray Group considers environmental risk management to undertaking purification atmospheric emissions of chemical substances, enhancing for Japanese subsidiaries and affiliates, and 1.8 billion yen be a critical priority. The Safety, Health, and Environment measures in the event that any pollution is discovered. Pumping and aeration facility at the wastewater treatment facilities, and renovating product for overseas subsidiaries and affiliates. Committee deals with Group-wide directions and policies, Nagoya Plant recycling facilities. Safety investments centered on retrofitting existing while individual plants strive to manage and reduce Costs totaled 6.75 billion yen, of which 1.79 billion yen equipment to improve fundamental safety, while accident environmental risks. These activities are reviewed during was allocated to air quality efforts and 2.28 billion yen for prevention investments sought to strengthen buildings to annual Safety, Health, Accident Prevention, and Environmental and Accident Prevention water quality efforts. Operating costs for existing exhaust increase resistance to earthquakes. For domestic affiliates, to Environmental Audits. Compliance and Accident Report gas and wastewater treatment facilities accounted for the reduce atmospheric emissions of chemical substances at In addition to conducting emergency response drills, The Virginia Plant operated by Toray Plastics (America), majority of those charges. Toray Advanced Film Co., Ltd., while overseas investments we work to increase individual employees’ awareness of Inc. was cited with one violation in FY 2006 when the These expenditures saved 570 million yen in energy costs included boosting wastewater treatment facility capacity at environmental issues by offering “wastewater eduction contracted waste treatment volume exceeded the level and 30 million yen in waste disposal costs while netting 980 Penfabric Sdn. Berhad (Malaysia) and installing an exhaust tours” designed to show workers where the wastewater for which the plant had received a permit. Upon being million yen in sales of valuable recycled resources. gas desulphurization facility on coal boilers at Toray Fibers they wash down the drain ends up. informed by the relevant regulatory agency of the mistake, (Nantong) Co., Ltd. the company immediately took corrective action and “Wastewater education tours” at the Okazaki Plant implemented a system of checks to ensure that the problem Toray FY 2006 Environmental Accounting Toray Facility Investment would not recur. Five accidents occurred at Toray Group facilities during Costs 0.2 FY 2006, including a lightning-triggered fire at the Seta Investments InvestmeExpenses Plant (see sidebar below). All were reported immediately Item Subcategory and description (million yen) (million yen)) 2.5 to the relevant local government which implemented Air (including CFC countermeasures) 704 1,794 12.5 Water quality 726 2,282 Investment by 16.5 Investment by 7.0 countermeasures to prevent a recurrence. In addition, the Pollution Noise and vibration 7 29 Toray 2.5 Japanese subsidiaries prevention and affiliates Shiga Plant received a total of 18 complaints and requests osts Greening 2 278 Employees observe the Wastewater treatment Discharge outside of c costs Foul odor and other 215 17 ¥4.32 billion ¥1.82 billion route followed by waste- facility the plant from local residents concerning wastewater odor, noise, ea r Global environment Energy conservation and water at their workplace and other annoyances. We took these complaints 246 n/a 9.6 2.5 4.5 preservation costs global warming prevention 1.2 seriously and responded in good faith by making Resource Industrial waste reduction, 1.2 improvements. recycling, disposal, and PCB 119 1,311 0.7 0.5 Business a recycling costs waste disposal services 0.3 Soil and Groundwater Pollution Prevention Toray Group constructs embankments around facilities Upstream and Product recycling 68 34 downstream costs Container and packaging recycling 0 4 1.7 Environmental preservation and storage tanks holding hazardous or dangerous sub- Environmental and Accident Prevention Incidents 4.2 Energy conservation stances to prevent spills from leaking into the surround- in FY 2006 (Toray Group) Investment by Waste treatment and reduction Indirect labor costs, ISO overseas subsidiaries ing area or seeping into the soil. Management certification and maintenance, 2.5 Recycling and other 0 406 and affiliates activity costs environmental communications, Safety We continue to deal with soil pollution that was dis- Administrative punishments due to 1 and education ¥1.31 billion violations of laws and ordinances*1 Accident prevention covered at the Nagoya Plant (see CSR Report 2005 for 1.3 Regional initiatives, support 3.1 Health more information) and have currently installed 71 purifi- Accidents, etc. (fires, explosions, 5 Social initiative costs for organizations, etc. 0 34 environmental accidents, etc.) cation wells. Similarly, we have installed 57 purification Environmental SOx fines, soil purification, etc. 0 558 wells at Toray Monofilament Co., Ltd. (see Toray Group Complaints/requests (noise, odor, etc.) 18 damage costs Toray Facility Investments and Environmental Report 2002 for more information), where Total 2,087 6,747 Environmental Preservation Costs *1 Includes improvement orders and fines. Improvement guidance and we continue to purify groundwater by pumping it up to recommendations are included in accident figures. (Hundred million yen) Environmental preservation costs 120 Environmental facility investments Effectiveness 80 75.5 Lightning-triggered Fire at Seta Plant issue that was garnering increasing attention, we took action to 66.2 63.1 67.5 Item Amount (million yen) On August 12, 2006, a lightning strike sparked a fire at the Seta address facilities containing it and launched a program of health 40 40.2 Plant’s No. 2 Plant (Textile Development Center). The solid wood examinations for approximately 3,000 interested current and past Reduction in energy costs 574 28.1 20.9 construction of the facility’s roof and ceilings aggravated fire- employees who had handled even small amounts of asbestos in Reduction in industrial waste disposal costs 31 11.0 0 fighting efforts, and approximately 11,000 square meters were the past. We are working in good faith with individuals diag- Sales of valuable recycled resources 975 03 04 05 06 (Fiscal year) destroyed in the blaze. No employees were injured, although one nosed with asbestos-related health issues by helping them apply neighborhood resident was taken to the hospital for smoke for workers’ compensation and providing an ongoing program of inhalation as a precaution (she was not seriously injured). Smoke medical examinations. Our understanding of the health effects Toray Environmental Accounting Standards from the fire drifted into neighboring residential areas and incon- on past and present Toray Group employees as of March 31, venienced residents, but we worked in good faith with the resi- 2007, is described in the table below. ●Energy cost reduction figures show the amount of reduction for 12 months ●Some categories were changed based on the Ministry of the Environment’s after the completion of an energy conservation facility. Expenses are not dents’association to wash cars and otherwise make amends. We have not been contacted about health issues by residents Guidelines for FY 2005. recorded because they are deducted when the effect is calculated. living near affected facilities. Only economic effects that can be determined with a high degree of cer- ● Waste disposal cost reduction figures show the amount of reduction Health Effects and Response to Asbestos tainty are calculated. Presumed effects are not calculated. ● achieved through waste reduction efforts and resource recycling for 12 Toray Group has manufactured and imported building materials Certified occupational accidents (Toray Group) 17 (10) ●Capital investment also includes investments for which environmental months after the measures are undertaken. containing asbestos in the past, and some of our buildings and preservation is not the main objective. Capital investment resulting from leases is also included. Expenses include labor costs and depreciation. ●In allocating reserves to cover anticipated future expenses for PCB waste facilities were constructed using building materials and thermal Certified health victim based on the Asbestos Law (Toray Group) 4 (4) However, internal labor costs related to local volunteer activities are disposal and other matters, the entire amount is expensed in the year the insulation containing asbestos. not included. reserves are allocated. Following our recognition in 2005 of asbestos as a serious Number of individuals (fatalities)

Toray Group CSR REPORT 2007 34-35 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Ensure Product Safety and Quality 4 Ensure Product Safety and Quality

Product Safety System Action Program (FY 2006) Auditing and coordination Direct ruling functions Toray Group will continuously and systematically work to improve product safety Product Safety President management through the Product Safety Committee, a forum for promoting Committee Divisional and Departmental product safety issues throughout Toray Group, and maintain and improve our • Discuss important Product Safety Committees General manager of division or quality assurance program as well as continuously improve product quality by issues department of new product anticipating our customers’ needs. • Confirm safety of products placed on the market Approval to place new Director in charge of Propose basic • Follow up on reports of the Product product on the market Action Program Results Instruction on policies manufacturing new product basic policies Safety Review Board 1. In addition to conducting thorough product safety checks before a product is Propose • Follow up on MSDS preparation important issues • Discuss important issues, and formulate, New product brought to market, The Group created a structure for following-up on product approval application Consult safety after products have been introduced to the market. improve and eliminate standards 2. The Group reviewed product safety control system of affiliated companies and Product safety Advise made appropriate changes where required. Product Safety managers 3. To continue to improve product safety and quality assurance, a new organization Managers Council • Confirm safety of new product covering the entire company was established, together with new Quality Product Safety • Discuss specific measures Review Board Assurance Departments in each business. • Discuss product safety Implementation Leader Products • Review product safety Akihiro Nikkaku Commitment • Company Products Executive Vice President and To implement an increased emphasis on product safety and quality which are critical to the com- Company-wide Secretariat marketed products, Representative Director Divisional and products manufactured on contract, Overall Coordinator for the Product Safety pany’s success, we created the Product Safety and Quality Assurance Planning Department with departmental secretariats products purchased, sold and and Quality Assurance Planning a company-wide scope, as well as Quality Assurance Departments in each business area. This year development prototype products Department General Manager, Manufacturing Division we will focus on these activities as we build the “Quality” and “Customer-focus” aspects of the Toray Industries, Inc. Toray Group corporate image in the 21st century.

chemicals) to MSDS (Material Safety Data Sheets). Divisional ately with product accidents, complaints, and near-accidents. and departmental Product Safety Committees also meet As we pursue a range of businesses that provide products with the Product Safety Managers Council to set annual and services to both consumers and other businesses, our Product Safety and Quality Newly-established Product Safety and Quality product safety themes, and in close cooperation with those respect for the “Eight Rights of the Consumer” is a funda- Assurance at Toray Assurance Planning Department in charge of production, technology and sales, work to mental and constant theme in our dealings with all customers. As part of the “AP-Innovation TORAY 21” Long-term To strengthen the quality assurance program for our improve the level of product safety management. We strive to ensure product safety and quality by undertaking Corporate Vision, Toray Group created the “Quality” and expanding international and OEM production activities, the To ensure both Japanese and overseas affiliates have the major programs and initiatives. “Customer-focus” aspects of its corporate image for the 21st Product Safety and Quality Assurance Planning Department, same safety management as Toray, all have enacted the We are also working to improve accessibility for users of century, as a focus for unifying and driving product safety and covering the entire Toray Group and under the direct super- product safety control regulations. The affiliated companies major consumer goods, for example by staffing a toll-free quality assurance. vision of the President, was established in December of division, each division and department mainly provide sup- product inquiry number. 2006. At the same time, Quality Assurance Departments port and guidance so that the product safety level of the Quality Policy (revised June, 2007) were established in each business division’s Product Safety entire Toray Group is improved. For more information on the “Eight Rights of the Consumer” Secretariat, by adding the function of quality assurance. please see our website. We give top priority to the product quality offered to our This is to further ensure product quality in a wide range of New Product Safety Confirmation customers as well as safety and environment in our business areas-fibers and textiles, films, plastics, composite New product safety checks are undertaken by the Director in corporate activities. We work on the quality management charge of manufacturing new product. The examination with the stance of “Customer First” materials, electronics and information materials, pharma- Acquiring Quality Certification ceuticals and medical products. includes a safety check of the product itself, the MSDS, an As part of our quality assurance program, each production 1. We make our best efforts to meet our customers’ expectations The Product Safety and Quality Assurance Planning examination of the instruction manual (including warning plant has acquired quality assurance certification to the ISO with products and services of high satisfaction. Department sets product safety and quality policy for the labels), catalogs and other safety information sources used by 9001 standard. In the same manner, our subsidiaries and 2. We commit ourselves to abide by the “Quality First” entire company, and provides guidance and management the customer, as well as a confirmation of the environmental affiliates in Japan and overseas have also obtained ISO9001 principle, and to improve quality and reliability of our product, in all our divisions such as sales, manufacturing for the individual Quality Assurance Departments. During impact of the product. When any doubts about product certification. and research and development. FY 2006, we reexamined the quality policy based on our safety emerge as a result of these checks, the Product Safety Because Toray Group manufactures a diverse range of 3. We establish the quality at the stage of design and Corporate Philosophy, focusing on a customer-first, quality- Review Board, a group of impartial, knowledgeable individuals products, various quality certifications are required to meet development, and ensure it in the manufacturing first approach. from both inside and outside the company, will convene, and the respective characteristics of the individual products. For process to meet quality requirements. the product must pass their review before going to market. example, for the manufacture and sale of pharmaceuticals 4. We continuously strive to organize, maintain and Thorough, Ongoing Product Safety Activities Safety is also followed-up after the product is delivered. and medical products, GMP*1 or the ISO13485*2 certifica- improve our quality management system. 3 Toray Industries’ product safety system is shown in the dia- tions are acquired, while ISO/TS16949* certification is gram on page 37. As the basis for product safety manage- Strengthening Approaches to Product Safety required for automotive applications. For reinforced carbon ment, each year the Product Safety Committee sets out Information fiber composite products for use in aircraft, plants must Product Safety Management Basic Policy product safety issues common to the entire company; then, Regulations concerning product safety information are being gain JIS Q9100*4 certification. These are just a few examples 1. We shall place priority on the various measures through discussions with the Product Safety Managers strengthened in Japan, including revisions to the Industrial of Toray’s active pursuit of the appropriate certification for required to ensure product safety. Council, the Divisional and Departmental Product Safety Safety and Health Law to enact more rigorous labeling and each office or plant. Committees plan comprehensive activities. During FY 2006 documentation, and a November 2006 revision to the 2. We shall conduct adequate safety evaluation prior to *1 GMP: Good Manufacturing Practices for pharmaceutical production and marketing a new product. the product safety management systems at affiliated Consumer Product Safety Law to require product accident quality control *2 Quality management system standard for medical devices 3. For products already on the market, we shall take Japanese and overseas companies were reviewed and reporting. In response to these changes, we are working to build and improve systems for dealing quickly and appropri- *3 Quality management system standard for automotive applications note of information from customers and the general improvements put in place, including a move from GHS (a *4 Quality management system standard for aerospace applications public and always remain attentive to safety. globally-unified system for the classification and labeling of

Toray Group CSR REPORT 2007 36-37 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Risk Management Performance 5 Perform Risk Management

Action Program (FY 2006) Risk Management System (in Normal Times) Risk Management System (in Emergencies) (Emergency Quick Response System) 1. Toray will promote systematic risk reduction activities at each division, depart- CSR Committee ment, office and plant, review current conditions, and propose future issues and President policies through the Risk Management Committee. 2. In preparation for major earthquakes, a Business Continuity Plan (BCP) focusing Asks President to establish Instructions regarding emergency headquarters on head office functions, information systems, and an early resumption of produc- activities Report on activity status tion will be developed. Officials responsible Company-wide CSR Committee Emergency Action Program Results or when emergency Risk Management occurs Headquarters Risk Management Committee Committee (Heads of divisions/ Emergency 1. Each division, department, office and plant addressed a number of important departments) Chief Sub chief press releases risks and pursued systematic activities under the on-site lines initiative. Staff 2. BCP for a major earthquake was developed, including an emergency response Inquiry for management Secretariats systems and activity status plan for the head office, information systems, and earthquake-resistant coun- Report on management Company-wide policy systems and activity status First Report termeasures for major production-related facilities. implementation Reports from the division On-site Emergency Implementation Leader where emergency occurred Headquarters Norihiko Saitou Commitment Risk Management Committee conducted by each division, Emergency headquarters Supporting department, office and plant Media Reports of each company/country plants Senior Vice President Risk management is at the very heart of business management. Because it is impossible to con- Chief Responsible for supervision of the trol every risk, it is essential to identify potential risks and minimize their effects before an inci- General Administration & Legal Sub chief Division, Investor Relations dent occurs. We are committed to strengthening our risk management activities in the future in Staff Department, Corporate order to ensure Toray Group’s sustainable development. Secretariats Communications Department, and Advertising Department Toray Industries, Inc. Notification to related in-house divisions*1 *1 Notification will be conducted according to the Emergency Reporting Route for Significant Disasters, Environmental Accidents, and Other Crisis Outbreaks.

Promoting Risk Reduction Activities Developing and Promoting a Major Activities Plan Promoting the Business Continuity The Following Head Office BCP Has Toray is actively working to reduce risk in business-as-usual Each division, department, office and plant has established Plan (BCP) Been Executed: conditions as well as to prevent future crises. At the same its own major activities plan, and developed its own risk Toray works to maintain a BCP for restoring operations more management activities. The following outlines some of the quickly and more comprehensively in the event of a stoppage 1. Emergency response plan for major earthquakes time, we are also preparing a crisis management framework An emergency response plan for Tokyo head office has been created and by adopting Crisis Management Regulations to enable us to main activities undertaken in FY 2006: due to a large-scale natural disaster or similar event. was explained at a meeting of the emergency task force personnel in Specifically, we approach the task of formulating the BCP by December 2006. Seventy people were selected for the emergency deal with crises that could have a dramatic impact on the con- mobilization team (those who will go to work immediately after securing tinuation of management and business activities. assuming the occurrence of a major earthquake and examin- their own safety and that of their family). Major Activity Plan ing operations from the standpoints of (1) Head Office func- Developing a Risk Management System 1. Violation of corporate ethics 3. Export control tions (2) information systems, and (3) early resumption of pro- 2. Preparation of manuals describing important business Divisions, and legal compliance duction. operations and their continuation Toray’s risk management system is illustrated in the figure departments 4. Product safety, etc. Manuals describing important business operations and their continuation on page 39, and is divided between risks encountered in 2. Information leak As part of an effort to enhance existing production facili- by different personnel in the event of an accident or disaster have been ties in order to protect human life and minimize any impact created by the divisions in question, and the content of both has been normal times and emergencies. Offices, 1. Earthquake countermeasure 3. Environmental accident reviewed by outside specialists. In normal times, the Risk Management Committee pur- plants 2. Fire and explosion 4. Response to suspicious outside the company, since 2002 we have been working to persons, etc. strengthen resistance to an earthquake measuring intensity 3. Safety confirmation system sues company-wide risk management by following up on A decision was made in early 2007 to test a system for using text the risk management conditions resulting from the activi- Lower 6 through a series of countermeasures designed to pre- messaging on mobile phones to verify employee safety at worksites in the ties of the Risk Management Committees in each of Toray’s vent major damage and collapse. We have also worked where Tokyo area. RiskActivity condition divisions, departments, offices and plants and reports its possible to strengthen utility and other buildings that are Divisio findings to the CSR Committee. The Committee also handles Violation of corporate deemed to play an important role in the BCP so that they can ethics, and legal Executed education and study meeting the company-wide risk management policy, including the compliance related to laws and regulations withstand an earthquake measuring an intensity of Upper 6. n s, depa New projects such as manufacturing facilities for important Initiatives to Protect Personal planning and execution of personnel education and training. Information leak Implemented regular inspection of When an actual accident or environmental crisis occurs, information security management products have been designed to withstand an earthquake Information r tme Export control Executed education and study meeting measuring an intensity of Upper 6. Toray put in place a system for protecting personal information information is transmitted along the emergency report related to export control

n Earthquake proofing has also been undertaken in the by introducing a set of Personal Information Management

route and the Crisis Management Regulations go Offices, pla into ts Product safety Implemented product safety review effect, causing emergency headquarters to be established Shiga Information Systems Center. Regulations in March 2005, predating the enactment of both on-site and at the company level. The On-site Reevaluated earthquake protection To ensure that the company’s head office can continue to Japan’s Personal Information Protection law in April of the Earthquake standards and executed earthquake function in case of a disaster, a plan has been made for the same year. Emergency Headquarters coordinates with the Company- emergency training. Implemented wide Emergency Headquarters to deal with the incident earthquake-proofing of important buildings establishment of an emergency office in Tokyo, including To better assess the individual information in our possession, identification of emergency task force personnel and indi- we created a Personal Information Management Database on while bringing in support from other plants and divisions in Undertook voluntary inspections based the area. The Company-wide Emergency Headquarters Fire and explosion on an independent checklist of fire and viduals subject to emergency mobilization. In preparation the company intranet and registered all personal information explosion risks makes and implements decisions from a company-wide per- for temporary shutdown of Tokyo head office, we have retained by the company departments. The database is subject n ts Established standards and undertook started compiling a manual for temporary transferring of to regular inspections. spective, for example dealing with government agencies Environmental accident training under abnormal drainage. and providing emergency information to individuals and head quarter function to Osaka head office and other plants. Response to Strengthened control of entry and exit, Related article organizations both inside and outside the company. reviewed and reinforced crime For more on environmental risk management, please see page 35 suspicious persons prevention systems

Toray Group CSR REPORT 2007 38-39 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Promote Dialogue with Stakeholders 6 Promote Dialogue with Stakeholders

Action Program (FY 2006) Yurakucho district as part of the commemoration of the 80th anniversary of its establishment. These events were conceived Toray Group will review its corporate behavior and implement reforms through the to provide a better understanding of TORAY Group and its practice of CSR line activities by promoting dialogue and cooperation with respec- future directions for our stakeholders represented by cus- tive stakeholders. tomers, representatives of the media, analysts, and Toray Action Program Results Group employees and their families. 1. The development of CSR line activities has strengthened communication activities Space at the TORAY Advanced Materials Exhibition was Implementation Leader with stakeholders at the workplace level. divided into 10 different themed zones, with displays and Norihiko Saitou 2. To commemorate the 80th anniversary of the company’s foundation, the Toray videos presenting the past, present and future of the Group. Senior Vice President Advanced Materials Exhibition and Toray Advanced Materials Symposium were Responsible for supervision of The more than 9,000 people who visited the Exhibition over the General Administration & held in September 2006 to facilitate communication with various stakeholders. Legal Division, Investor Relations two days gained a better understanding of Toray as an Department, Corporate Communications Department, advanced materials company. Meanwhile, the TORAY Full-size mockup, Boeing 787 aircraft (TORAY Advanced and Advertising Department Commitment Materials Exhibition) Toray Industries, Inc. Advanced Materials Symposium featured internationally Two-way communications with our stakeholders is seen as the basis for our business devel- renowned instructors in an event that was highly praised by opment. By providing information and listening to the voices of stakeholders—customers, employees, shareholders and local communities—our goal is to think first about respond- the some 1,400 people attending. ing to these voices and make them the basis for management activities.

Dr. Ryoji Noyori, President of the Toray President Sadayuki Sakakibara Stakeholder Communications Events Commemorating Institute of Physical and Chemical greets visitors at the TORAY Advanced Through CSR Line Activities the Company’s 80th Anniversary Research (RIKEN), speaks at the TORAY Materials Symposium Demonstration with full-sized car built using Toray materials (TORAY Advanced Materials Exhibition) One of the defining characteristics of Toray Group is our pur- In September 2006, the company held the TORAY Advanced Advanced Materials Symposium suit of CSR line activities, an important and unique program Materials Exhibition and TORAY Advanced Materials at the workplace level that involves all employees. CSR activi- Symposium at the Tokyo International Forum in Tokyo’s The following chart summarizes dialogue and collaboration between stakeholders and Toray Group. See the indicated page numbers for more specific examples. ties are promoted through stakeholder communications, as each workplace identifies its own stakeholders and deter- Shareholders and Business Local International mines its own issues. CustomersInvestors Partners Employees GovernmentCommunities NPOs CitizensCommunity Media Each workplace in Toray Group specifies its own personal stakeholders, determines the subjects to meet the expecta- Basic Stance Create trust by Provide accurate Observe laws and In response to the Cooperate with Promote interaction Promote ties-up with Share common Actively expand our Play a part in forming tions of this group, and actively works to find a solution to listening to the business information regulations and diversity of each other, and work with people living people in NPOs perceptions with wave of global public opinion, voices of customers, to ensure smooth consider impacts on employment, create to maintain a sound near our plants, to to advance mutual people who are our activities to create a through public those seen as most important. The sum of these individual through making communication. the environment, and workplaces that are relationship. explain our business cooperation. indirect customers, better society. accountability and workplace CSR line activities is stakeholder communications in products and also open the doors easy to work in. practices and by taking their transparent providing services. to fair trade. environmental wishes into account. management. Toray Group, and dialogue with stakeholders is a critical activities. requirement in pursuing CSR activities that are characterized by full participation. Communication • Website • Website • Website • Website • Website • Website • Website • Website • Press releases • Press releases Tools • Press releases • Financial Results • Corporate Profile • TorayNavi intranet • Corporate Profile • Corporate Profile • Corporate Profile • Advertising • Website • Website • Product pamphlets • Financial Report • Company magazine • CSR Report • CSR Report • CSR Report • Corporate Profile • Corporate Profile • Corporate Profile • Product descriptions • Business Report People • Site Reports • Site Reports • CSR Report • CSR Report • CSR Report Basic Policies to Promote Dialogue • MSDS • Annual Report with Stakeholders • Advertising (adopted September 2005)

1. Toray Group will promote dialogue and collaboration with all stakeholders, including customers, shareholders & investors, business partners, Communication • Marketing and • Stockholder meetings • Purchasing activities • Results briefings • Plant tours • Plant tours • Support NPO • Exhibitions, events • International • Press conferences employees, government, local communities, NPOs, Opportunities sales activities • Investor briefings • Surveys • Labor-management • Producing and • Meetings to exchange activities • Inquiries page on conferences • Press Interviews citizens, international community and the media. • Consumer service • IR activities • Briefings consultation on releasing various opinions with local the website • Toray Science • Surveys representatives corporate reports community associations Foundation 2. Each company in Toray Group, through dialogue and management • Volleyball clinic by (Japan, ASEAN) collaboration with stakeholders, will take steps to Toray Arrows enact reforms designed to increase the satisfaction p.37 p.42 p.33、p.52-53 p.21、p.42 p.35 p.43 p.43p.40-41 p.55 p.43 level of everyone. 3. All Toray Group employees, in their respective Reflect Dialogue / • Joint product • Regular reporting • Joint operations and • Improve working • Conclude individual • Conclude individual • Participate in NPO • Develop products • Develop products workplaces, shall create an environment conducive to Promote development and study of development conditions agreements agreements activities with the end-users that contribute to CSR activities, and, in order to increase the satisfaction Collaboration • Creating products shareholders and • Green procurement • Improving the • Promote volunteer in mind society and the and services that investors opinions and CSR workplace activities • Support academic environment level of stakeholders, specific issues shall be environment determined, and steps taken to provide solutions. reflect customers’ at board meetings procurement and cultural • Support academic voices • Systems activities and cultural activities maintenance

p. 13, 45-47 p.42 p.52-53 p.16-17 p.55p.43 p.54-55 p.15

Toray Group CSR REPORT 2007 40-41 CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Promote Dialogue with Stakeholders

Communications with Stockholders Reflecting the Voice of Stockholders and Investors Communications with Local Communications with NPOs and Investors in Management and Business Activities Communities In 2006, Toray was again a supporter of the Community The opinions of stockholders and investors received through Care Aid Program, sponsored by the Community Care Aid Easy-to-Attend General Stockholders Meetings the Investor Relations Department are regularly reported to Interaction with Local Communities Through Center. This support is gradually beginning to generate To make its General Stockholders Meetings easier for the Board of Directors, and also regularly discussed with the Sports and Events results, and we are committed to continuing to actively fos- investors to attend, Toray avoids scheduling them on dates companywide Communications Committee, and reflected in Sports were the vehicle for a wide range of interaction with ter communication with NPOs through the Center, which when other companies’ typically hold similar meetings. We the company’s management activities. local communities, such as volleyball training sessions with works to support NPOs seeking to bring about a society in also send out invitations as far in advance as possible to give the TORAY ARROWS, and employees coaching judo and which everyone can live in comfort and safety (social wel- stockholders adequate time to consider the meeting’s propos- kendo at sports grounds and gyms around the country. As fare in a broad sense). als. In FY 2006, we sent out invitations four weeks prior to Communication with Employees an example, the Okazaki Plant has held kendo training ses- the date of the meeting. sions since 1978; in FY 2006 the local primary and secondary Presentation on “Innovation and Creativity at school teams took part and scored highly in the national Communications with the Media Explanatory Meetings for Investors My Section” kendo competitions. The Corporate Communications Department serves as the On the day that business results are released, the president To enable the entire Group to work together in implement- Visitors were also welcomed to the Shiga Plant and the interface between the company and various media organi- holds briefings to provide institutional investors and security ing the IT-2010 Mid-term Business Strategies, labor and Toray Human Resources Development Center in Mishima. In zations, providing them with press and publicity informa- analysts with an opportunity to hear opinions about the management co-sponsored a kickoff event entitled FY 2006 nearly 1,700 visitors in 240 groups visited the Shiga tion. As well as fulfilling the company’s responsibility for management directly from investors and securities analysts. “Innovation and Creativity at My Section” in November Plant, and nearly 500 visitors in 40 groups visited the Toray information disclosure, its activities are intended to proac- To enhance direct communication with individual 2006. Some 300 people, including the president, executives, Human Resources Development Center. Toray proactively tively shape public opinion. Information disclosure means investors, the chief IR officer and department staff attend Toray Labor Union chairman, union leadership, and other seeks communication with local communities such as invita- the active transmission of information, even that which briefings sponsored by the Nagoya and Fukuoka stock employees, attended the event and watched presentations tions to the summer festivals held at each plant. might be sensitive or negative, based on Toray’s exchanges. describing 12 activities Information Disclosure Principles. selected from 570 entries Internet-based Information for Stockholders submitted by workplaces For more on Toray’s Information Disclosure Principles, and Investors throughout the company. please see our website. To promote information disclosure to stockholders and Talks by Toray’s president investors, Toray maintains an IR section on its website. This and the chairperson of the Major Media Activities in 2006 provides information such as notification of business results Toray Labor Union pre- and other announcements to the securities exchange and the ceded the presentations Press conferences 191 media, as well as materials from briefings, all with the immedi- and were broadcast live acy of the web. These materials are also quickly translated into through Toray’s internal Press interviews given 458 English and provided on the website. In February 2007, an network to all offices and At the presentations (November 2006) additional section designed for individual investors was cre- plants. Surveys conducted 400 ated, providing full information disclosure that is easy to understand. Results Briefings for Employees Following the announcement of annual and semi-annual busi- ness results, the president and other executives travel to each office and plant to present Results Briefings that are also Major IR Activities in 2006 Providing Information to attended by employees of subsidiaries and affiliates. The Special volleyball clinic by the TORAY ARROWS at the Numazu School for Stakeholders Approximate briefings include explanations of financial results and pro- Children with Disabilities, Shizuoka Prefecture (July 2006) Activity Attendees from Toray Number of number of meetings participants vide an opportunity for attendees to exchange opinions Providing Information Through the Website and among themselves and with management. President, Financial Publications Business Results Accountant Director, During FY 2006, we Toray provides a wide range of information — corporate, Announcements Director in charge of 4 819 investor relations held Results Briefings at research and technology development, stockholders and 15 locations. The events Directors in Charge of investors, and CSR activity information — through our Briefings on Business Manufacturing Division, facilitated energetic com- Strategies for 1 36 website, as well as with printed corporate profiles, CSR General Managers of munication, including Institutional Investors Divisions & Departments reports and other materials. To improve access for those questions about initia- visiting the website and provide quicker navigation for tives for pursuing IT-2010 individuals looking for specific content, the Japanese web- Briefings for Director in charge of 2 321 Individual Investors investor relations projects and steps for Kendo training session site was updated in April 2007 and re-launched as two sites: at the Okazaki Plant increasing profitability in http://www.toray.co.jp for corporate information, and Director in charge of (July 2006) Interview Handling investor relations, Always the face of high prices of http://www.toray.jp for product and service information. The for Investors and 683 Investor Relations available raw materials and fuels. Global site will also be revised in FY 2007. Analysts Department staff Business results briefing, Tokyo (November 2006)

Employees of the Ishikawa Plant join in the 25th Jonkara Dance Contest Summer Festival at the Okazaki Plant (August 2006) (August 2006)

Toray Group CSR REPORT 2007 42-43 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Step Up Environmental and Recycling Efforts 7 Step Up Environmental and Recycling Efforts

Promoting the “Ecodream” Project Initiatives to Design Environmentally Action Program (FY 2006) Since the establishment of the Global Environment Research Friendly Products Toray Group will promote environmentally friendly products making clear the Laboratories in 1991, we have utilized all of the Group’s Toray is working to develop and commercialize products benefits of improvements in the global environment. We will also establish the resources and capabilities to reduce the environmental impact and technologies based on the concepts of “Clean” and role and future vision for recycling. of our operations. These include resource and energy conser- “Less Energy” with goals such as CO2 reduction, energy Action Program Results vation, environmental clean-up, and recycling, and we have reduction, water purification, air purification, reductions in provided products and technologies designed to take advan- hazardous substances, and recycling. 1. The Group expanded applications for polylactic acid (PLA), a material that tage of the results of this research to society. “Ecodream” is reduces CO2 emissions and derived from plants. 2. The Group expanded case studies of recycling programs that are closely linked the general name for our environmental conservation activ- Development of Non-petro Chemical Products to customers, for example air conditioner fans. ities, and we are focusing Toray Group’s resources and capa- Toray is working to develop and commercialize non-petro bilities on enhancing and advancing associated initiatives. chemical products in response to increasing interest in these We have adopted the name “Ecodream” Project to describe materials from the standpoint of preventing global warming Commitment initiatives aimed at expanding our businesses by providing and dealing with resource depletion. Of these substances, PLA In the 21st century,it is important for corporate initiatives designed to help bring about a environmentally friendly products, including recycled products, is manufactured using plant-origin mate- sustainable, recycling-based society. As a group of materials manufacturers founded on technology, Toray Group is committed to actively improving the global environment by and are seeking to double FY 2005 net sales of Toray Group’s rials such as corn and is a carbon neutral promoting research and development into environmentally friendly products (including environmentally friendly products by FY 2010. material that does not increase CO2 levels, recycled products) and expanding our businesses in the fields of environment, water, and Implementation Leader even when incinerated. We are devel- Implementation Leader energy, which have been identified as key areas in the IT-2010 Mid-term Business Chiaki Tanaka Strategies. Expanding Toray Businesses oping PLA fibers, textiles, and plastic Executive Vice President and Through the “Ecodream” Project products under the Ecodear* brand. Blanket made with Representative Director Ecodear fiber filling General Manager, Technology Center Net sales Others Toray Industries, Inc. (hundred million yen) Recycling Ecodear* is the registered trademark for 3,500 Reduction of hazardous substances Toray’s PLA materials. Air purification 3,000 Water purification Reduction of CO2 emissions In FY 2006, , Ltd., selected Ecodear* plastic for use in 2,500 Pursuing Environmental Design to Environmental and Recycling and energy use manufacturing a desktop mobile phone cradle. Nano-alloy Create Environmentally Friendly Initiatives 2,000 technology, which is capable of dispersing small amount of Products In line with our vision of making a global contribution in 1,500 high-performance polymers throughout a PLA substrate at the Toray Group pursues environmental design in order to conserving resources and protecting the environment to nanometer level, dramatically improves PLA’s heat resistance, 1,000 develop environmentally friendly products. We incorporate develop a sustainable, recycling-based society, we are work- impact resistance, and formability, the Life Cycle Assessment (LCA) approach into the product ing to reduce the environmental impact of Toray Group 500 enabling its use in a variety of elec- tric and electronics products. design, research and development, and production, as products. We are developing environmental products as 0 shown in the figure below. well as recycled products and technologies with a reduced 2004 2005 2006 2007 2010 Tomy Company, Ltd., chose PLA Before commercializing new products, divisions are environmental load based on the concepts of “Clean” and (Planned) (Planned) for its “Nohohon Family” toy required to create an Environmental Assessment Checklist “Less Energy.” because it is an environmentally as part of the Product Safety Review. Environmental data as friendly material capable of offer- well as product safety data are subject to review and verifi- Related article ing the safety required of a toy, cation before products are commercialized. Structures for Promoting Environmental Recycling See pages 56 and 57 for a list of Toray Group’s environmentally along with the same strength as the friendly products. petroleum-based ABS resin conven- Company-wide secretariat: Corporate Planning Dept. Related article tionally used. Takara Tomy’s “Nohohon Family” Please see pages 36 and 37 for more information about the Product Secretariat made from Ecodear* Safety Review. Global Environment Committee Environment & Expected effects Products Company-wide Safety Dept. committees Recycling Committee PLA fibers, plastics and films, 3GT fibers & textiles, Corporate Marketing Reduction of CO gas Environmental Impact of Manufacturing Planning Dept 2 bamboo composite fibers, cellulose fibers, soy bean Fibers & Textiles Division protein fibers, flexible heat-resistant films “Nohohon Family” Fibers & Textiles Recycling Dept. Technology Center Planning Dept Where conventional manufacturing has Toray Environmental Product Design Process Resins & Chemicals Division Carbon fiber composite materials for transport, Resins & Ecology & Recycling Dept. an impact of 100: Energy reduction machinery, engineering plastics, components for wind Films Division turbine generators, components for fuel cells, films for Conventional Planning R&D Production Evaluation Customer Business Torayca & Advanced Composites Division solar cells, capacitor films for hybrid cars 100 development Corporate Marketing CO2 emissions Electronics & Information Related Planning Dept Ecodear* 85 • Set strategic objectives Products Division Water purification RO, NF, UF, MF, and MBR membranes, water treatment (water treatment) • Set environmental Technology Water Treatment & Environment Division system businesses, Torayvino* quality standards Center 3Rs • Gather information Technology-related departments 100 Reduce Air purification Heat-resistant bag filters (PPS, PTFE fibers), air filters Fossil resource Conventional of Divisions and Departments Technology Center Reuse consumption * 87 Research and Technology Center Planning Dept Ecodear Recycle technology development Reduction of hazardous Non-halogen fire retardants (fibers & textiles, plastics, Technology-related departments in films), waterless CTP plates, non-halogen circuit the Manufacturing Division substances • LCA design • LCA evaluation Research & Development materials, heavy-metal-free color filters • Environmental and feedback Research & Development Division Planning Dept education system International Planning Dept. Recycling PET, Nylon-6, PBT, ABS, PPS, CFRP, Toraysurou*, DMSO • Green procurement Subsidiary and International Division affiliate Affiliated Companies development Affiliated Companies Division Administration Dept.

Toray Group CSR REPORT 2007 44-45 CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Step Up Environmental and Recycling Efforts

Recycling Cross-flow Fan Materials from Air Conditioners Toray Saehan, Toray Group’s Korean subsidiary, began Recycling Initiatives Fibers & Textiles Recycling production of PLA sheet (non-oriented film) using a newly Toray’s basic approach to recycling is known as “Less Energy Toray established the Fibers & Textiles Recycling Department in installed manufacturing facility with an annual production Recycling.” We strive to achieve waste-free and efficient recy- the Fibers & Textiles Division to facilitate proactive recycling Recovery and sorting Old Crush capacity of 5,000 tons. cling by employing a variety of technologies according to the initiatives. For example, we developed technologies to turn (specially designed Toray has been successful in creating a number of non- properties of the material being recycled. Nylon-6 fiber in used clothes into new fiber, due to the fact pulverizer) Cross-flow fan petro chemical products other than PLA, including Foresse*, that manufacturing Nylon-6 from crude oil requires more Used air conditioner (indoor unit) a new fiber manufactured energy than polyester and other fibers. using the world’s first appli- Recycling Activities Principles During FY 2006, we signed an agreement with Patagonia (adopted in March 2004) Crushed cation of the melt spinning Inc. to work together on Nylon-6 materials recycling. Under particles technique for cellulose; 1. We shall design, produce, and sell products that the new initiative, Toray will melt down non-standard Aminos*, a fiber made from reduce the impact on the environment. materials generated during the manufacture of other prod- vegetable protein; and 2. We shall purchase and use materials and products ucts, form the resulting mixture into chips, and spin them SOTAKE*, a textile produced which will help reduce impact on the environment. into Nylon-6, which will then be used by Patagonia to man- using bamboo as a raw 3. We shall disclose information related to recycling ufacture clothing for sale. Garments made of this recycled material. During FY 2006, programs and recycled goods. material can be manufactured using approximately 1/6 Composite Materials Recycling we successfully produced 4. We shall voluntarily cooperate with customers to the energy required Since developing technology for recycling CFRP for use in rein- textiles with Foresse*, recycle or otherwise appropriately dispose of our to produce clothing forcing concrete in 2004, we have been working in conjunction products. including super-lightweight using virgin Nylon-6 with other carbon fiber manufacturers on the Recycling textiles made with hollow derived from crude oil. Committee of the Japan Carbon Fiber Manufacturers A Foresse* display created by Miyake fibers and super-soft textiles Design Studio Co., Ltd., for the TORAY Moreover, CO2 emis- Association to promote recycling initiatives for carbon fiber, a made with extra fine fibers. Advanced Materials Symposium. sions generated dur- material that is expected to see increased production and sales Recycling Vision ing the manufacturing in coming years. During FY 2006, we finalized the specifica- process can be dra- tions for a carbon fiber recycling system in preparation for the • Approach recycling based on the concept of Products That Help Reduce Hazardous Substances “Less Energy” matically reduced to construction of a pilot carbon fiber recycling plant, and we Company-wide Toray Group technologies are also hard at work reducing the • Pursue sustainable recycling through approximately 1/5 of look forward to demonstrating the viability of carbon fiber partnerships with customers Joint announcement with Patagonia use of hazardous substances. the conventional pro- recycling technologies through the construction of this plant. For example, the world’s first • Approach recycling based on the concepts of duction process. Fibers & Waterless CTP Plate*1, developed and “Less Energy” and “Total Recycling” Textiles recycling • Expand efforts through partnerships commercialized by Toray, enables with users Related article See page 13 for more information about CFRP. images to be formed using a near- • Approach recycling based on the concept of Comparison of Nylon-6 Material Recycling infrared laser and offers exceptional Plastic recycling “Less Energy” printing capabilities for a wide range of • Focus on profitable material recycling using Where conventional manufacturing the life cycle inventory (LCI) technique 2 has an impact of 100: CFRP Recycling Process fields. Moreover, this innovative tech- CO emissions nology reduces alkaline developer liquid • Demonstrate a pilot recycling plant as part of Conventional: Crude oil to Nylon-6 fibers 100 a national project Thermal decomposition waste and volatile organic compound Composite materials Toray System: Fiber waste to Nylon-6 fibers 20 CFRP Injection molding recycling • Lead the carbon fiber industry by establishing pulverization process and carbon fiber process (VOC) emissions by eliminating the need recycling methods recycling processes for dampening water during the print- Fossil resource consumption Classification Thermal Reuse ing process. The product received the Conventional: Crude oil to Nylon-6 fibers 100 Recovery Sorting decomposition Milling Pelletization Sixth (FY 2006) Green & Sustainable Waterless plate and the Toray System: Fiber waste to Nylon-6 fibers 17 Chemistry (GSC) Award in recognition of Butterfly Mark Basic Approach to Recycling its contribution to lowering environ- The Recycling Committee, a subcommittee of the Global mental impacts. Environment Committee, oversees recycling efforts in accor- In addition to providing material products, we develop dance with the Recycling Activities Principles adopted in 2004. highly regarded manufacturing equipment. The Toray Slit Our goal is to pursue recycling in a sustainable manner Plastic Recycling Coater, developed and commercialized by Toray, utilizes through partnerships with customers. In recycling ABS, Nylon, PBT, PET, and PPS resins, Toray focuses film manufacturing nozzle In FY 2006 we established a Recycling Vision to pave the on material recycling, an approach that allows plastic resins to technology to coat materials way for dramatic increases in awareness, and we have be reused without undergoing a depolymerization process. (photo resists) using only a slit launched a variety of initiatives in order to implement We collaborated with Hitachi Appliances, Inc., to develop new nozzle. The system helps dra- this vision. technology for separating and recycling glass-fiber-reinforced matically reduce loss of coat- AS resins used in fans in indoor residential air conditioner ing liquid while contributing units. In addition, we shared the Wastech 2006 Awards to energy savings. Committee Chairperson’s Special Award with Toray Slit Coater Electric Corporation and Hyper Cycle Systems Corporation in *1 Computer-to-plate, a system for directly printing image data on recognition of the success of a program that we have pursued printing plates with lasers. in partnership with since 2005 to recycle cross-flow fans.

Toray Group CSR REPORT 2007 46-47 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Secure and Train Personnel and Promote Human Rights Secure and Train Personnel and 8 Promote Human Rights

Implementation Leader Kiyoshi Fukuchi Action Program (FY 2006) ous needs in every field. We conduct many types of training for employees of all levels and in all areas to improve manage- Vice President , Genaral Manager We will initiate group-wide efforts in areas such as securing and training personnel, pro- Personnel and Industrial Relations ment performance, sales performance, production manage- Division moting human rights, diversifying employment, increasing opportunities for women, 2007 Human Rights Toray Industries, Inc. balancing the demands of work and home, and improving the workplace environment. Promotion ment skills, professional skills, and international operations. For Campaign pamphlet example, the voluntary Challenge Training Program helps Action Program Results (left) and posters motivated employees develop their own talents while the (center and right) 1. The Group conducted a number of human rights training programs including the 2006 Overseas Junior Training Program develops human resources Human Rights Promotion Campaign. suitable for employment globally. 2. The Group strengthened measures to achieve diversity in our human resources and to For FY 2007 we will focus on responding to revisions to train our personnel, actively hiring both recent graduates and those with work experience. Beginning in FY 2007, as a way to strengthen the develop- 3. The Group executed a Phase 1 Action Plan to maintain compliance with the Next the Equal Employment Opportunity Law and, given the ment of sales personnel, we began implementing a human Generation Law, strengthened our support system for balancing work and home, and diversification of types of employment, on promoting resources training program based on consistent training held lectures and training sessions under our Advancement of Women Project. human rights for non-regular employees such as temporary objectives for a designated “initial training period” spanning and part-time workers. the first three years after joining the company. Commitment Harassment Prevention The most important factor for Toray Group in striving to become the world leader in advanced Early Leadership Development materials is working to secure, develop and retain talented personnel who can flourish on Toray established Sexual Harassment Prevention Guidelines in To cultivate future executives, courses to the global stage. Indeed, an emphasis on human resources is counted among our corpo- 1999. When problems arise we swiftly launch an investigation promote unified management have been rate guiding principles. Respecting each employee as a valuable resource, I personally com- mit myself to taking the lead in promoting various initiatives to create a happy, vibrant and take firm steps both to help the victim and prevent a reoc- held at the Toray Management School corporate group where all employees can find meaning in their work and the corporate currence. In addition to educating our employees about sexual since 1991. Here section managers learn culture encourages taking on new challenges. harassment through training seminars at each level of our the knowledge and skills needed to organization, counseling services have been established and become corporate executives. Leadership Training the Speak-Up Program (complaint box) adopted at each Toray Toray is also working to train section and unit managers in office and plant. coaching skills*1 and to improve their problem-solving skills of sexual harassment and bullying or "power harassment" We also undertake educational activities aimed at prevent- through logical thinking*2 concepts. Human Rights Promotion Efforts in the workplace, as well as considering human rights issues ing “power harassment." We also established the Toray School of Technology and Toray Group believes that respect for human rights is a in dealing with a diversifying workforce. In an effort to Business, where mid-level employees at manufacturing plants fundamental rule indispensable to the management of the raise each employee’s awareness of human rights issues we are trained in a one-year live-in schooling environment. company. We therefore strive to promote and increase held training sessions for operational and administrative Developing Human Resources That awareness of human rights issues while prohibiting discrimi- managers at each office and plant, and conducted *1. Communication skills to encourage independent action in subordinates. Can Create New Value *2. Skills to define and solve problems in a rational, logical manner. nation in any form based on factors such as race, creed, workshops in conjunction with workplace study groups. The development of human resources is one of Toray Group’s gender, academic background, nationality, religion or phys- most important managerial objectives. We conduct personnel ical characteristics in the areas of recruiting, hiring, position- Human Rights Promotion System training with three objectives: the cultivation of fair-minded FY 2006 Company-Wide Training ing, compensation, education and retirement. In addition, we members of society who have high ethical standards and a Corporate Ethics Committee Course Enrollment (Toray) respect international rules such as the United Nations Chair sense of responsibility; the training of professionals with Training Category Persons Enrolled Universal Declaration of Human Rights, the ILO Treaty and President advanced expertise, technical skills and originality; and the Members Management 895 the United Nations Global Compact, prohibiting forced Members of the Board and Chair of Toray Labor Union cultivation of leaders with foresight and a sense of balance. Technical Observers 645 labor and child labor under any circumstances, and comply Auditors Sales 371 with the laws and regulations of each country and region in Secretariat Rational and Well-organized Training System International 74 Personnel Department which we operate. The Toray employee education system represents a rational, General 479 Company-wide Human Rights Promotion Committees systematic approach to human resources responding to vari- Total 2,464 Chair Note: Excludes divisional and plant-level training Human Rights Promotion System General Manager, Manufacturing Division We have established a Human Rights Promotion Section within Deputy Chair General Manager, Personnel & Industrial Relations Division the Industrial Relations Department, as well as Human Rights Members Personnel Training Programs Promotion Committees under the Corporate Ethics Office and Plant General Managers General Manager, Personnel Department, General Manager, Affiliated Companies Division Management Technical Sales International General Committee that function both company-wide and at the Chair of Toray Labor Union Executive training General and specific Secretariat Management Strategic technology Marketing Executive outside studies in Japan office and plant level. In addition, we have appointed Industrial Relations Department, Human Rights Promotion Section Toray Management School Toray Group or overseas leaders training Training Executive Seminar Human Rights Promotion Officers for each workplace; some Toray Group Management School Overseas Junior Training Leadership Program 300 such officers dedicate themselves to making the work Office and Plant-Level Human Rights Promotion Committees Development Section Management Technological development Toray Group Senior Sales Leadership Challenge Training Chair Business Area leaders improvement training leadership training Training Management Seminar environment more pleasant and productive. Office and Plant General Managers Program (open enrollment) HR Promotion Officers Management supervisor training Production management training Sales Skills Improvement Training Toray Group Management Seminar Assigned for each workplace. Labor union chapter officers also participate. Workplace leaders IT education Implementation of Human Rights Toray School of Business and Technology Divisional and plant-level training Toray Group Supervisor Seminar Training outside the Training Workshops Mid-Level engineer patent training Marketing Strategy Training Overseas assignment company FY 2006 Human Right Training and Seminars basic training Cross-industry exchange To help increase awareness and promote a correct under- Knowledge and skills Common management Various technical courses Sales Skills Improvement Training Professional shared across divisions training seminars standing of human rights issues, we held training work- Held at Held at Outside Development Management skill courses English writing head offices Offices and Plants Seminars Sales Practice Courses shops and campaigns both at head offices and at each 19 events 1,409 events 57 events Knowledge and skills specific to each division Divisional and plant-level training office and plant. The FY 2006 campaign, which took as its Language skills 1,520 28,662 135 Developing Divisional and plant-level training improvement Distance learning theme "Broaden the Circle of Human Rights and Workplace Responsible participants participants participants Secondary technical training Secondary sales training training Members of New employee training Harmony at Your Workplace," focused primarily on prevention Society Primary technical training Primary sales training

Toray Group CSR REPORT 2007 48-49 CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Secure and Train Personnel and Promote Human Rights

A Personnel System That Prizes Employee Thanks to the consistent pursuit of these initiatives, both Employment of Disabled Persons Systems for Developing and Training Motivation and Accomplishment the number and proportion of women ranked at the level of Toray has fulfilled its social obligations of employing disabled Local Personnel Toray adopts the following personnel systems to create a unit manager or higher has continued to increase, with persons through achieving the legally required employment In order to implement global dynamic organizational culture that encourages individuals 5.04% of supervisory or managerial positions held by women ratio of 1.8%. Our efforts to provide a work environment in management, it is essential who dare to explore new possibilities to contribute to the as of April 2007. which disabled individuals find it easy to perform their jobs that core local personnel company. encompass “hardware” steps such as providing barrier-free have a thorough understand- Initiatives to Balance Work and Family Life spaces as well as “software” aspects such as training at the ing of Toray’s management Toray strives to enhance systems that help employees balance time of hiring and refinements in the work environment based philosophy and guidelines. This system establishes annual objectives for each employee. Management-by- At the end of the fiscal year, employees and their supervisors work and family life in order to both lay the groundwork for a on suggestions and requests from disabled employees. Development and promotion objectives system meet to review the extent to which they were able to meet their corporate culture conducive to the advancement of women initiatives include organizing Training overseas local personnel objectives. and empower both male and female employees to choose a training programs in Japan This system is designed to facilitate a fair evaluation of variety of lifestyles. Employment Ratio of Disabled Persons (Toray) for core local staff at their Personnel employee contributions in terms of duties, responsibilities, In particular, we have exceeded legally mandated benefits （％） evaluation system 1.98 respective levels and incorporating an off-site training plan into capabilities, and results. for support systems related to childcare, family-care, and 2.0 1.93 1.95 the individually-focused long-term career development plans. 1.9 Under this system, employees meet with their supervisors maternity protection, based on our commitment to keep sys- We held the first Toray Group Executive Seminar in Japan 1.82 1.84 Individual twice yearly in a one-on-one setting. Supervisors work to tems responsive to a diverse range of employee needs and 1.8 for local executives and board members in 2004 and the sec- meeting system develop their subordinates’ skills and ensure that they accept 1.7 the validity of their evaluations. accessible to workers. Utilization of these programs by male ond seminar was held in 2006. The Toray head office also employees is gradually becoming more common, and in FY 1.6 participated in training programs held in each country and Self-assessment 1.5 system (for managers, Employees survey topics such as their own work experience 2006 three male employees took advantage of the childcare 03 04 05 06 07 (Year) region to help create networks among local participants and occupational and desires concerning topics such as job transfers in an leave program. Note: Figures for June of each year foster global leadership ability, including intercultural annual process that is linked to individual personnel transfers. specialists, and In keeping with our goal of encouraging employee utiliza- communication skills. general staff) tion of these systems, we provide information about new pro- Career Assessment Employees participate in a regular compound review grams as well as program changes and benefits in internal System consisting of work presentations and personnel interviews. FY 2006 Overseas Local Personnel Training Results (for general staff) We focus on the direction of their future growth. company newsletters and on the company intranet. Mid-career Recruitment and Employment of International Students (Toray Group) We recruit from inside the company as appropriate in order to Internal recruiting Toray promotes the mid-career recruitment of experienced ensure optimal staff assignments and support employees’ Utilization of Childcare and Toray Group Management School 12 system Toray Group Senior Management Seminar autonomous efforts to direct their own careers. Family-care Leave Systems (Toray) individuals with specialized knowledge and skills and employ- Training in Japan 16 ment of international students who have graduated from Toray Group Management Seminar 16 We revised this system in April 2005 to boost awards above Toray Group Supervisor Seminar Bonus system for 02 03 04 05 06 (Fiscal year) 13 past levels in an effort to accelerate the creation of exceptional Japanese universities and Japanese students who have employee inventions inventions. Employees taking graduated from overseas universities. Our workplaces pro- Local Training 54 (0) 79 (0) 70 (0) 80 (4) 78 (3) 3rd Europe Senior Management Seminar 12 childcare leave vide opportunities for these groups to make the most of (participated in by Toray) 1st U.S. Senior Management Seminar 19 Employees taking their skills and personal qualities. family-care leave 4 (0) 2 (0) 2 (1) 4 (0) 3 (1)

Creating an Organizational Culture Note: Number of employees beginning the leave (men) Conducive to the Advancement of Development and Promotion of Local Personnel Overseas Women Related article Toray initiatives to facilitate active participation by female See pages 16 and 17 for more information about advancement To promote global management, Toray Group encourages employees reach back to at least 1958, when we began pro- of women and work-life balance. the development of human resources at the local level, moting women to management positions, making us a pio- including promotion to executive positions. This approach Akiko Konishi neer among Japanese companies. Our similarly deep-rooted grows from our identification of the localization of manage- Manager, Personnel Employment Section commitment to create a workplace responsive to the needs Initiatives Encouraging Diversity in ment personnel at overseas subsidiaries and affiliates as one Personnel Division of women is evidenced by our introduction of a childcare Employment of our business strategies. Toray Industries, Inc. leave program in 1974, anticipating the legislation of such Toray Group works to build workplaces in which employees programs nearly 20 years later. In fact, a Toray subsidiary pro- from different backgrounds can coexist with one another Infrastructure for Developing and Promoting Three years ago when I was assigned to the secretariat of the Advancement of Women Project, I was extremely confused about how to moted a female employee to the position of president in while making the most of their respective skills and perform- Local Personnel tackle my new job. 2003, and we launched the Advancement of Women Project ing their jobs in an engaged, energetic manner. Positions deemed critical for the global management of Toray When I asked people in the company for their impressions about in 2004 to redouble efforts to create a corporate culture con- Group have been classified into four levels based on a “Advancement of Women” and what it should mean, everyone had their Reemployment System Group-wide common standard, and head office is working own ideas. Some women even criticized us for placing too much ducive to the participation of female employees. emphasis on women in this day and age. As part of its efforts to encourage the participation of individ- with overseas subsidiaries and affiliates to develop and pro- However, everything came together after the General Manager of the uals over age 60, Toray concluded a labor-management agree- mote local staff in these positions, who are known as Personnel & Industrial Relations Division, the project leader, explained on ment for union members in 2001 and introduced a reemploy- “National Core Staff.” visits to all plants and at working team meetings that the purpose of the Number of Women in Management Positions and initiative was to increase human resources competitiveness. By Women as a Percentage of the Workforce (Toray) ment system that is open in principle to all employees who For example, we have specified the Group-wide skill approaching this problem from the point of view of human resources (People) Department wish to continue working. The labor-management agreement requirements and code of conduct expected of “National Core competitiveness, it becomes clear that we must move beyond the current 191 197 manager situation. 200 178 3 3 concerning this reemployment system was revised in Staff” in the form of the Toray Global Competency Model. 164 3 There are still too few women in the corporate society, and they 149 2 42 Section manager December 2005 to expand coverage to include employees in Based on this we pursue career development by creating indi- 125 1 34 38 continue to work under various types of pressure. I believe that reducing 150 27 Unit manager management and occupational specialist categories. vidually-focused long-term career development plans. Other 2 27 this pressure, if only slightly, and helping women build solid careers is 4.77% 5.04% exactly the kind of “Innovation” we need to create a truly appealing 100 25 Percentage of In November 2006 we finalized plans to progressively priorities include the development of the Toray Global 4.48% women company where men and women alike can pursue jobs they find 4.09% increase the maximum age for reemployment and concluded Database to facilitate information sharing. 3.06% personally and professionally fulfilling. 50 3.69% a new labor-management agreement. As a result, the reem- 0 98 121 135 141 150 152 ployment period will be extended to age 65 by April 2013. 0203 04 05 06 07 (Year) Note: Figures for April of each year

Toray Group CSR REPORT 2007 50-51 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Cooperate with Suppliers in their Environmental and Social Initiatives Cooperate with Suppliers in their 9 Environmental and Social Initiatives

Banned Chemical Substances 47 substance groups Reducing Transport-related CO2 Emissions Changes to the Rationalization in Energy Use Law enacted Action Program (FY 2006) Chemical substances whose use is prohibited in Japan in April 2006 require businesses (Specified Consigner) out- Toray Group will implement an internal approval process for CSR partners based on the • Type I substances under the Chemical Substances Control Law (PCBs, etc.) results of surveys of CSR promotion efforts for procurement and purchasing. We will • Substances whose manufacture is prohibited by the Labor Safety and Health sourcing the transport of at least 30 million tons of freight also encourage suppliers that do not meet our approval standards to improve their CSR Law (asbestos, others) etc. per year to submit an energy conservation plan as well as programs. regular reports detailing energy use. Controlled Chemical Substances 64 substance groups To comply with these changes, Toray completed and Action Program Results 1.Chemical substances whose manufacture is restricted in Japan (requiring approval for manufacture or reporting of use) began operating a system for gathering the requisite CO2 1. The Group began registering suppliers whose CSR activities rise to Toray Group 2.Chemical substances whose applications are restricted by overseas laws emissions data in FY 2006. standards as CSR Procurement Partners. applicable to Toray products Toray has long undertaken a variety of initiatives to reduce 2. Procurement from CSR Procurement Partners during FY 2006 accounted for • Type II substances under the Chemical Substances Control Law approximately 90% of total purchases of principal raw materials. (trichloroethylene) etc. transport-related CO2 emissions with the cooperation of distri- 3. The Group conducted a survey of CSR promotion efforts at suppliers. • Substances controlled by EU/RoHS directives (cadmium, others) etc. bution partners, including the use of larger transport vehicles. Going forward, we are committed to reducing CO2 emissions Commitment as a Specified Consigner through distribution innovations such It is necessary to approach a company’s social responsibility not only within the range of its own Initiatives with Distribution Partners as modal shift. corporate operations but also throughout the entire value chain. Consequently, we believe that During FY 2006, we reduced CO2 emissions by approxi- suppliers’ CSR measures, including environmental and social considerations, are important crite- Basic Distribution Policies mately 800 tons by means of a modal shift away from truck Implementation Leader ria in purchases of raw materials. In the Purchasing & Logistics Division, we see our mission as Kazuhiro Maruyama promoting CSR procurement throughout Toray Group. 1.We shall select our transport and storage providers and transport. Senior Vice President determine individual agreements impartially and based on General Manager, Purchasing & factors such as economic rationality with consideration given Examples of Key Initiatives to Reduce Logistics Division to price, quality, supply stability, technological capabilities, Transport-related CO2 Emissions (FY 2006) Toray Industries, Inc. reliability, and efforts to reduce environmental impacts. CO2 reduction 2.We shall be open in selecting our transport and storage • Import of products via the port in vicinity of usage site 70% providers, rather than relying exclusively on companies with • Direct shipment of products from plants to customers 50% which we have done business in the past or companies affiliated with Toray Group. • Joint vehicle operation with customers 40% Toray Procurement and Purchasing partners (suppliers) to fulfill their social responsibilities in regards to issues such as environmental preservation, legal 3.We shall comply with relevant laws and regulations, consider Activities environmental preservation, and fulfill our corporate social International Transport Initiatives compliance, and respect for human rights. The CSR responsibilities in outsourcing our transport and storage Procurement Guidelines address the kind of initiatives that cor- operations. Due to the globalization of our business, we have also been working to reduce the environmental impact of interna- Basic Purchasing Policies porations are being called upon to pursue in areas ranging 4.We shall cooperate with our transport and storage providers from corporate ethics and risk management to product safety in gauging and reducing the environmental impact of our tional shipping in the face of annual increases in shipments 1.Toray does its best to select suppliers and determine indi- transport and storage operations. of products and raw materials, and the collection of pack- vidual purchases fairly and on the basis of economic and human rights. aging materials between countries. During FY 2006, these rationality, with consideration for price, quality, ability to Strengthening Cooperative Ties with Distribution provide stable supplies, technological capabilities, Expanding Purchases from efforts included a transition to reusable steel frames for reliability, and other factors. Partners CSR Procurement Partners raw carbon fiber textiles exported from Japan to Europe We have adopted a set of Basic Distribution Policies to 2.In selecting suppliers, Toray opens its doors to a wide Toray believes that to achieve a sustainable society, it is and the United States, and the guide continuing efforts to reduce the environmental range of companies inside and outside Japan. Toray does important to undertake initiatives throughout the supply adoption of a system for utilizing Packaging not rely solely on vendors it has existing or past relation- impact of our domestic transport and storage operations. In Materials chain while building collaborative partnerships. As a concrete our domestic collection network Japan ships with, or on members of its corporate group. addition to recommending that the transport and ware- step toward strengthening of the CSR supply chain for our to reuse core tube and steel 3.In making purchases, Toray complies with relevant laws housing companies that act as our distribution partners products, we conducted a survey to assess the status of CSR frames for film products imported and regulations while taking environmental preservation acquire environmental management certifications such as and fulfilling corporate social responsibility (CSR) issues initiatives on the part of the approximately 2,800 suppliers from Malaysia to Japan. ISO14001, Green Management, and Eco Stage, we have put into account. Toray actively pursues green procurement from whom we regularly purchase raw materials and fuel, We plan to build similar sys- and purchasing as part of its environmental efforts. into operation a system of joint initiatives such as a modal components, and packaging materials. We designated suppli- tems for reusing packaging mate- Malaysia shift to reduce transport-related CO2 emissions. Product 4.Toray works to maintain and improve the quality of pur- ers whose responses met our own standards as CSR rials for products imported to chased products through cooperation with its suppliers. Japan from other Asian countries. Procurement Partners, and today we are working to increase Basic Distribution Policies Briefing 5.Toray works to uphold its corporate social responsibili- the proportion of our overall purchasing from these suppliers. ties on a company-wide basis. Toray held a Basic Distribution Policies Briefing for man- Initiatives for Improving Transport Quality agers and executives from distribution partners with the Implementing Green Procurement Guidelines In conjunction with its distribution partners, Toray launched goal of deepening their understanding of our Basic Our Green Procurement Guidelines include our own lists of a series of initiatives in FY 2006 to improve transport quality Basic Purchasing Policies and Distribution Policies and current issues. The session served as banned and controlled chemical substances and require so as to avoid inconveniencing customers with freight losses CSR Procurement Guidelines an opportunity for participants to reaffirm that Toray and assessments of the environmental control status for items or damages during product delivery. Toray employees visited Because most of Toray’s products are used as materials for our its distribution partners are pursuing environmental and we procure. worksites operated by distribution partners and worked to customers’ products, customer needs play an important part in social measures from a common The results of a survey including controlled chemical sub- spread awareness by identifying potential problem areas in guiding our purchases of raw materials, fuels, packaging mate- perspective by providing useful stances conducted in December 2004 based on the Green the handling of Toray products by using highly visible dia- rials, assembly component materials, and equipment. Toray information for corporate man- Procurement Guidelines were applied to the RPS purchasing grams. This initiative succeeded in reducing product losses has adopted a set of Basic Purchasing Policies in order to assure agement, including a lecture on system in April 2005, and we provide customers with or damages during storage and transport in FY 2006 by fair transactions based on these customer needs. We have also building internal controls by a Specific Chemical Substance Content Information Sheets. 25% compared to the previous year. adopted CSR Procurement Guidelines to encourage business certified public accountant who attended as a guest lecturer. Related article See Toray’s website for more on the CSR Procurement Guidelines. Basic Distribution Policies Briefing See page 33 for more information about distribution safety initiatives.

Toray Group CSR REPORT 2007 52-53 CSR Guideline CSR Guidelines 1 2 3 4 5 6 7 8 9 1 0 Pursue Social Initiatives 10 Pursue Social Initiatives

grants, and its work continues to be highly regarded today. Support for Cultural Events Action Program (FY 2006) Two recipients of the Toray Science and Technology Prize Toray’s ongoing support for cultural activities include sup- Toray Group will continue its program of autonomous social contribution activ- have gone on to win the Nobel Prize. port for the Musée d’Orsay Exhibition held at the Kobe City ities in accordance with the Toray Group Social Initiative Policies, mainly Museum and the Tokyo Metropolitan Art Museum (spon- through donations to the Toray Science Foundation. We will also support sored by Nikkei Inc.); performances of the Shanghai Quartet employee participation in volunteer activities. Principal Toray Science Foundation Activities in Japan; activities designed to promote international (1) Toray Science and Technology Prize exchange in arts and culture; performances of the Youkiza in Action Program Results An award honoring outstanding achievements in science and technology 1. In keeping with the Toray Group Social Initiative Policies, the Group contributed Japan, a theater that has been giving marionette perform- at least 1% of its consolidated ordinary income in monetary and other gifts to (2) Toray Science and Technology Grant ances for over 370 years; activities supporting the training of a Grants to young researchers engaged in basic research projects in the social contribution activities during FY 2006. fields of science and technology new generation to keep cultural traditions alive. 2. Donations to relief efforts for the Noto Peninsula earthquake that occurred on March 25, 2007, were augmented by the volunteer efforts of employees from (3) Toray Science Education Prize the Hokuriku Branch and Ishikawa Plant. A prize presented to junior and senior high school teachers who have given creative and innovative lessons in science with good results

Commitment (4) Science Lecture Meetings Implementation Leader As expressed in our Corporate Philosophy, the ultimate objective for our management is “con- Norihiko Saitou tributing to society.” We believe that the selection of which businesses will form the backbone Senior Vice President of a company’s management is responsible for determining the significance of that company’s Responsible for supervision of the General Administration & Legal existence. Toray Group is committed to developing its businesses under the concept of “safety, Toray Science Foundations in Division, Investor Relations health and environment” as we continue to support progress in areas such as science and tech- Department, Corporate nology, arts and culture, and sports. Three ASEAN Countries Communications Department, and Advertising Department Toray Science Foundations were established from 1993 to Toray Industries, Inc. 1994 in Malaysia, Thailand, and Indonesia to support and pro- mote research in science and Poster for the Musée d’Orsay Japanese marionette performance at the Youkiza Toray Group Social Contribution Results of Social Contribution technology while working to Exhibition Activities Activities in FY 2006 spread science and technology. Toray Group has made “For society: to establish ties and Toray Group’s ongoing program of social contribution activi- These organizations undertake Sponsoring Crown Events develop mutual trust as a responsible corporate citizen” one of ties included FY 2006 donations of about ¥1,040 million on a a variety of activities and pro- Award ceremony at the Thailand Although the Toray Cup Shanghai International Marathon the Corporate Missions included in its Management consolidated basis, or approximately 1.1% of its consolidated grams each year. Toray Science Foundation (sponsored by the City of Shanghai) and the Toray Pan Pacific Philosophy, and we have created a legacy of ongoing social ordinary income. On a non-consolidated basis, Toray con- Open (Toray PPO) tennis tournament (sponsored by Toray) contribution activities through donations to Toray Science tributed about ¥770 million, or approximately 1.5% of its non- are conducted as part of our advertising program, the pur- Foundations in Japan and ASEAN countries. Based on these consolidated ordinary income. To Nurture Future Generations pose of such sponsorship is to give something back to society. efforts, we have adopted the Toray Group Social Initiative Principal activities included donations to the Toray Science Toray conducts a variety of programs intended to help nurture The Toray PPO tennis tournament includes various activities, Policies to serve as a guide and model for these activities. Foundation and Toray Science Foundations in Malaysia, future generations. including exchanges between young Japanese and Korean These Policies describe our commitment to invest 1% of our Thailand, and Indonesia; assistance for Mishima City in tennis players and the presentation of rackets to people in consolidated ordinary income in social contribution activities in Shizuoka Prefecture, to whom we provide water for irrigation, Major Activities in FY 2006 Asian countries. accordance with our membership in the 1% Club established firefighting, and a water park; co-sponsorship of the Musée • Supported the Fourth Japan Science & Engineering Challenge 2006, a science by the Japan Federation of Economic Organizations d’Orsay Exhibition; and disaster relief following earthquakes in and technology contest for high school students (sponsored by Asahi Shimbun). (Keidanren) in 1990. central Java, Indonesia, and on the Noto Peninsula, Ishikawa • Supported Science Camp, a hands-on science and technology program for Prefecture. high school students who intend to pursue careers in science (sponsored by the Japan Science and Technology Agency). Toray Group Social Initiative Policies (adopted May 2005) Historic sites/preservation of traditional • Supported Master Class performances by the Shanghai Quartet. culture; other 5％ • Supported the DCA JUNIOR Awards, in the Toray Digital Creation Awards (DCA). 1.Based on its Corporate Philosophy of “contributing to society through the creation of new value with innova- International exchange 4％ • Supported the Sustainable Society Education Support Project (sponsored by Academic/research/education 53％ Diamond, Inc.), a program that donates the book Tales of Life: Eleven Stories Toray Cup Shanghai International Toray PPO tennis tournament awards tive ideas, technologies, and products,” we will contrib- Environmental of Biodiversity to elementary, middle, and high schools throughout Japan. Marathon ceremony ute to sustainable development of local and international preservation 5％ society as a good corporate citizen while continuously • Supported Japan Tent (sponsored by the Japan Tent Steering Committee), an supporting employee social initiatives. event held in Ishikawa Prefecture that promotes international exchange Participating in Volunteer Relief Efforts among students from around the world. for the Noto Peninsula Earthquake 2.We will pursue unique programs dedicated to improve- Community social welfare/ A total of 54 Toray employees—48 from the Ishikawa ment of social welfare in local communities, international Art/culture/sports 17％ exchange through traditional culture, sports promotion, disaster aid 16％ Plant, including the general manager, and 6 from the and especially the advancement of science. Hokuriku Branch, including the branch general manager— 3.Using company awards and other measures, we will create Toray Science Foundation participated in volunteer a culture that encourages employees to participate in soci- activities sponsored by the ety in constructive ways like volunteer activities, all the Toray established the Foundation while performing aid activities with an eye to local needs. in 1960 to contribute to basic Ishikawa Prefecture Disaster research in science technology and Relief Headquarters in the 4.We will examine all marketing and advertising activities aftermath of the earthquake from the perspective of social contribution before finaliz- to the development of science ing them. technology and culture. The that struck the Noto Peninsula Foundation was hailed at the time on March 25, 2007. 5.We will contribute funds amounting to about 1% of our The 47th Toray Science and High school students DCA JUNIOR 2006 Grand Volunteers load trucks with waste consolidated ordinary income to social initiatives. as a pioneer in private research Technology Prize Award Ceremony conduct an experiment Prize winning picture at Science Camp

Toray Group CSR REPORT 2007 54-55 Environmentally Friendly Products and Technologies Toray Group pursues environmental design practices in an effort to contribute to environmental preservation by reducing the environmental load of its products. Environmental benefits Environmental benefits ABCDE FG Business ABCDE FG Business Product/technology Description Product/technology Description area *1 *2 *3 *4 *5 *6 area *1 *2 *3 *4 *5 *6 PPS fibers and fluorofibers used to collect ash in the exhaust gas of garbage incinerators and Non-halogen fire-resistant PET film that does not generate harmful bromine compounds during Torcon*, Toyoflon*, Lumirror* ZV Teflon*, Tefaire* coal-fired boilers. incineration or disposal. Ecodear* Environment friendly polylactic acid fiber made from corn or other plants. Steel sheet laminating films Polyester films for laminating steel sheets as a replacement for PVC in unit bathrooms.

SOTAKE* Bamboo-based fiber combining the superior features of natural bamboo with Toray’s technologies. Food can laminating films Polyester films ideal for laminating cans as a replacement for chemical coatings or plating. Fiber made from plant-based cellulose. Also, the spinning process does not involve organic Films for capacitors for Ultra-thin polypropylene film that remains stable under the very high voltages needed to improve hybrid Foresse* solvents, but uses the melt spinning method. Films hybrid cars car efficiency. Aminos* Plant protein fiber made from proteins derived from soybeans. Solar cell films Polyester film ideal for use as the backing for solar cells.

UNFLA-ex* Non-halogen fire resistant polyester material using phosphorous flame retardants. Solar control films Polyester film that helps reduce energy consumption in air conditioners and heaters by reflecting heat. Fibers & Warmsensor* Moisture-absorbent, heat-generating, insulating material achieved through special fiber structure Transparent evaporating Transparent gas barrier film that does not generate chlorine- or nitrogen-based gases or aluminum Textiles processing. film Barrialox* residue when incinerated. Eco Dye process Low-energy carpet fiber dyeing method that reduces the amount of water needed for dyeing and cuts the number of processes through consistent dyeing and heat treatment. Ecodear* Polylactic acid film made from plant-origin materials like corn. Fieldmate* biodegradable Fishing line that largely breaks down into water and carbon dioxide to return to the natural fishing line environment if accidentally left in the water or on the ground after use. PAN carbon fiber used in wind power generator blades and compressed natural gas (CNG) tanks for Fieldmate* biodegradable Biodegradable tree wrapping material that returns to the natural environment over time. Torayca* carbon fiber material low-emission CNG vehicles, in addition to contributing to weight reduction for aircraft and automobiles. Recyclon* Recycled fiber made from used PET (polyethylene terephthalate) bottles and other materials. Torayca* prepreg Sheet-form carbon fiber used as a lightweight structural material for aircraft. Means for manufacturing new nylon-6 by depolymerizing spent nylon-6 products into their constituent Torayca* advanced Nylon-6 recycling Carbon Fabrication materials (CFRP). monomers and then repolymerizing. Fiber composite materials Composite Acrylic recycling Means for recycling acrylic fiber scrap from spinners, knitters, and other manufacturers by Toray carbon paper Electrode material for fuel cells, which are expected to offer a clean source of energy. dissolving it to make new fibers. Materials A method for using Torayca* fabrics made from lightweight, reinforcing carbon fibers to extend the Torayca* fabric construction useful lives of existing buildings and bridges. Ecodear* Advanced plastic based on polylactic acid made from plant-origin materials like corn. Torayca laminate construction A simple construction method consisting of bonding together surface-treated carbon fiber reinforced * sheets, thereby shortening construction time and improving work environments. Non-halogen fire-retardant ABS, Non-halogen fire-retardant plastics that do not generate harmful bromine compounds during incineration or disposal. nylon, PBT resins Photosensitive polyimide that can be developed using an environmentally friendly alkali aqueous solution Positive Photoneece* Automotive engineering plastics Plastics that can reduce weight and improve fuel economy when used in automotive parts. instead of organic developing fluids. Type K, Type S Toray copper-clad Non-halogen copper-clad polyimide film that does not generate harmful bromine compounds during Eco Toyolac* Recycled ABS (acrylonitrile butadiene styrene copolymer) resin. IT-related polyimide laminate film incineration or disposal. Products Toptical* LCD color filter Color filter manufactured using environmentally friendly black matrix resins instead of harmful heavy metals. Eco Amilan* Recycled nylon resin. Toray Waterless Plate* Offset printing plates that do not use any dampening water, which ends up as harmful wastewater after printing. Eco Toraycon* Recycled PBT (polybutylene terephthalate) resin.

Eco Torelina* Recycled PPS (polyphenylene sulfide) resin. Reverse osmosis membrane element used for the production of drinking water and ultrapure water for Plastics Romembra* & the semiconductor industry. Chemicals PBT resin ceramic PBT resin for injection molding that can serve as a substitute for thermoset plastics and ceramics appearance grade with exceptional texture and luster. Water treatment systems Water purification systems that use reverse osmosis membranes to desalinate seawater and brackish water. Thiokol LP* Liquid polysulfide polymer that is used as a sealant material for laminated glass. Ultrafiltration, microfiltration membrane modules Ultrafiltration and microfiltration membrane modules used in the production of drinking water. Environmentally friendly sponge that is made from wood pulp, does not generate harmful gases Cellulose sponge Membrane bioreactor Modules for MBR systems, which allow reuse of effluent and wastewater. when incinerated, and is biodegradable when buried in the ground. (MBR) modules Toraymicron* Ultra-fine nonwoven fabric used in air filters and masks that trap microscopic particles. Water Home-use water purification systems that remove residual chlorine, impurities, and common bacteria treatment Torayvino* by combining hollow membrane fibers and activated carbon. & Wosep* microfiber non- A non-woven fabric made from polypropylene microfibers that can separate the oil content of oil- Air filters Air conditioning and industrial process filters that trap microscopic particles using electrolyte microfiber woven material contaminated wastewater and does not generate harmful gases after disposal. Environment non-woven fabrics. Ion exchange fibers used in decontamination of water condensate in nuclear power, water quality Loop Bonding* and A technology that uses resin-molded fasteners and nylon-cut fibers to keep tiles on exterior walls from Ionex* testing filter papers, and water purification systems. Tough Binder* construction falling off. Recyclable DMSO (Dimenthyl sulfoxide) used as a stripping agent and cleaning solution for Tekarisarari* Oil-removing cloth made using microfiber technology that can be washed and reused. DMSO electronic components. oil-removing cloth *1 Associated with reduced CO emissions and exhaustible resource use. 1 Water-permeable ceramic Recycled ceramic material with water permeability and water-retention qualities that is ideal for 2 A CO2 reduction* blocks Toraysurou* reducing the heat island effect and preventing urban flooding. *2 Associated with reduced energy consumption or energy generation. B Energy reduction*2 A recycled product that uses 80% tile waste material whose water-retention capabilities help mitigate *3 Associated with water purification. C Water purification*3 Toraycool* *4 Associated with air purification. D Air purification*4 summer heat. *5 Associated with reduction or prevention of hazardous substance emissions. 5 *6 Products and technologies associated with recycling. E Hazardous substances reduction* F Recycling*6 A coating system capable of applying films using only a slit nozzle to reduce material waste, production G Other Toray Slit Coater waste, and power consumption. Environmental measurement Services including surveys of various environmental problems; analysis of extremely low concentrations and surveying of dioxins, PCBs, endocrine disruptors, persistent organic pollutants, and perfluorooctanyl sulfonate; and report publishing. Others Analysis and evaluation of Services including analysis of gases given off by materials, analysis of hazardous materials defined in industrial materials RoHS directives in electric and electronic equipment, and combustion testing of various materials. Consulting services including statutory environmental assessments and surveys and analysis of other Environmental consulting natural and living environments.

Television with a frame made of Ecodear* Clothing made with SOTAKE* and other materials Clothing made with Automotive part (manifold) made using Installed Torayvino* home-use water Wind power generator blades made plant-origin plastic for use with the “Cool Biz” energy conservation Foresse* engineering plastics purification system using Torayca* carbon fiber campaign

Toray Group CSR REPORT 2007 56-57 Environmental Impact Overview Chemical Substance Emissions and Transfer Data PRTR Law substance emissions and transfer data for FY 2006

Toray Japanese Subsidiaries Overseas Subsidiaries Toray Japanese Subsidiaries and Affiliates and Affiliates and Affiliates (Tons; dioxins: mg-TEQ) (Tons; dioxins: mg-TEQ) Atmospheric Water Soil emissions/ Waste Atmospheric Water Soil emissions/ Waste INPUT Substance name emissions emissions company landfill transfers Substance name emissions emissions company landfill transfers Energy (millions of gigajoules) 30.0 3.2 26.4 Methyl acrylate 0.4 0.6 0.0 0.0 Ethyl acrylate 0.2 0.0 0.0 0.0 Water (million of tons) 196 14.8 34.2 Acrylonitrile 53.1 4.8 0.0 61.9 2-aminoethanol 0.0 0.0 0.0 82.0 Raw materials Acetaldehyde 8.2 0.0 0.0 0.0 1-Allyloxy-2,3-epoxy propane 0.0 0.0 0.0 0.6 Antimony and antimony compounds 0.0 0.0 0.0 0.5 Linear alkylbenzene sulfonate and 0.0 0.0 0.0 0.9 OUTPUT Bisphenol-A type epoxy resin 0.0 0.0 0.0 18.5 linear alkylbenzene sulfonate salts Ethylbenzene 0.0 0.0 0.0 0.3 Ethylbenzene 6.6 0.0 0.0 1.7 2005 2006 YoY (%)2005 2006 YoY (%)2005 2006 YoY (%) Reference Ethylene oxide 1.2 0.0 0.0 0.0 page Ethylene glycol 0.7 0.0 0.0 105.8 Ethylene glycol monoethyl ether 5.6 0.2 0.0 0.0 Ethylene glycol 0.0 0.0 0.0 9.0 Greenhouse gases (tens of thousands of tons-CO ) p.27 2 0.0 15.0 0.0 31.7 Ethylene glycol monoethyl ether 3.6 0.0 0.0 0.2 237 230 -3.0 38.8 37.6 -3.1 124 ε-Caprolactam Six gases including CO2 142 14.5 Ethylene diamine 0.0 0.0 0.0 0.1 Xylene 13.1 0.0 0.0 0.7 PRTR Law target substances (tons) p.28 o-Chlorotoluene 0.7 0.0 0.0 0.0 Epichlorohydrin 0.2 0.0 0.0 5.4 Atmospheric emissions 307 279 -9.1 259 270 4.2 450 428 -4.9 Chlorobenzene 3.6 0.0 0.0 72.4 Xylene 50.5 0.0 0.0 93.5 Water emissions 32 27 -15.6 0 0 0 1 1 0 Chloroform 4.1 0.0 0.0 42.1 Chloroethene 0.0 0.0 0.0 0.1 Waste transfers 972 772 -20.6 1,284 1,404 9.3 902 837 -7.2 Cobalt and cobalt compounds 0.0 1.0 0.0 6.5 Chlorobenzene 0.0 0.0 0.0 12.2 1,1-Dichloro-1-fluoroethane (HCFC-141b) 1.1 0.0 0.0 0.0 Air pollutants (tons) p.29 Inorganic cyanide 36.0 0.0 0.0 0.0 1,3-Dichloro-2-propanol 0.0 0.0 0.0 16.1 SOx 2,991 2,626 -12.2 42.9 18.8 -56.2 2,924 2,565 -12.3 1,4-Dioxane 0.0 0.3 0.0 0.0 NOx 2,308 2,353 1.9 82.4 49.6 -39.8 1,489 2,198 47.6 Diuron 0.0 0.0 0.0 1.1 Dichloromethane 4.8 0.0 0.0 17.7 Ash 198 175 -11.6 15.2 11.9 -21.7 492 505 2.6 o-Dichlorobenzene 0.0 0.0 0.0 1.0 N,N-dimethylformamide 37.1 0.0 0.0 318.0 p-Dichlorobenzene 2.5 0.0 0.0 0.0 Styrene 0.0 0.0 0.0 0.2 Industrial wastewater (millions of tons) Decabromodiphenyl ether 0.0 0.0 0.0 0.1 177 185 4.5 11.4 12.3 7.9 19.8 20.2 2.0 Dichloromethane 2.8 0.0 0.0 5.8 N,N-dimethylformamide 22.8 1.8 0.0 59.7 Toluene 158.7 0.0 0.0 780.6 Water pollutants (tons) p.30 Styrene 27.0 0.0 0.0 2.0 Bis (2-ethylhexyl) phthalate 0.0 0.0 0.0 1.7 BOD 1,126 1,271 12.9 71.3 72.6 1.8 581 599 3.1 Decabromodiphenyl ether 0.0 0.0 0.0 1.2 Hexamethylene di-isocyanate 0.0 0.0 0.0 0.1 COD 924 940 1.7 34.2 32.8 -4.1 3,845 3,656 -4.9 Terephthalic acid 0.0 0.0 0.0 237.0 Poly (oxyethylene) alkyl ether 0.0 0.0 0.0 50.2 Nitrogen 727 748 2.9 18.4 17.0 -7.6 ̶ ̶ ̶ Dimethyl terephthalate 0.0 0.0 0.0 1.4 Poly (oxyethylene) octylphenyl ether 0.0 0.0 0.0 0.2 Phosphorus 36 40 11.1 1.7 1.2 -29.4 ̶ ̶ ̶ Trichloroethylene 1.3 0.2 0.0 0.0 Formaldehyde 0.1 0.0 0.0 0.4 Waste (thousands of tons) p.31 Toluene 1.5 0.0 0.0 41.8 Methacrylic acid 0.0 0.0 0.0 1.9 Recycled 25.4 28.8 13.4 20.5 22.3 8.8 8.8 12.7 44.3 Nickel 0.0 0.2 0.0 0.0 Methyl methacrylate 0.2 0.0 0.0 0.0 Incinerated and other 4.5 3.8 -15.6 5.6 5.2 -7.1 6.4 6.1 -4.7 Nitrobenzene 0.0 0.0 0.0 28.4 3-Methylpyridine 5.5 0.0 0.0 10.4 Direct landfill disposal 1.2 0.7 -41.7 1.3 1.1 -15.4 13.9 19.0 36.7 Hydroquinone 0.0 0.0 0.0 0.1 α-Methyl styrene 0.0 0.0 0.0 0.4 Pyridine 0.0 0.0 0.0 2.8 Molybdenum and molybdenum Coal ash (thousands of tons) compounds 0.0 0.0 0.0 0.6 64.8 60.6 -6.5 14.5 10.6 -26.9 m-Phenylenediamine 0.0 2.2 0.0 0.0 Recycled ̶ Dioxins 4.3 0.0 0.0 12.3 Direct landfill disposal 0.4 1.3 225.0 ̶ 5.1 8.1 58.8 Bromomethane 72.0 0.0 0.0 0.0 Total 270 0 0 1,404 Benzene 0.3 0.8 0.0 0.0 Boron and boron compounds 0.0 0.0 0.0 2.5 Note: Of the 46 PRTR Law substances of Japanese subsidiaries and affiliates, emissions or transfers of the above 31 substances exceeded 50 kg. Water pollutant calculations include the following companies: Poly (oxyethylene) alkyl ether 4.2 0.0 0.0 0.3 Poly (oxyethylene) nonylphenyl ether 0.0 0.0 0.0 3.6 1 BOD COD* Nitrogen/phosphorus Manganese and manganese compounds 0.0 0.2 0.0 2.5 Toray All 12 plants and 1 laboratory 6 plants subject to Total Pollutant Load Control All 12 plants and 1 research laboratory Methyl methacrylate 18.6 0.0 0.0 40.6 Japanese subsidiaries and affiliates 24 plants at 19 companies 7 plants at 7 companies plants subject to Total Pollutant Load Control 24 plants at 19 companies Dioxins 3.2 35.0 0.0 306.6 Overseas subsidiaries and affiliates 33 plants at 24 companies Total 279 32 0 772 *1 COD figures for Toray, Japanese subsidiaries and affiliates, and facilities in Korea are given in CODmn (using the potassium permanganate method). Note: Of Toray’s 59 PRTR Law substances, emissions or transfers of the above 40 substances ex- COD figures for other overseas subsidiaries and affiliates are given in CODcr (using the potassium dichromate method). ceeded 50 kg.

GHG Emissions Air Pollutants Water Quality Environmental efficiency indicator GHG Environmental efficiency indicatorSOx Environmental efficiency indicator BOD (Japanese subsidiaries 150 300 286 NOx 200 186 and affiliates) 171 116 158 102 210 214 214 150 Environmental 100 100 96 200 123 80 143 151 100 120 116 100 50 100 100 100 Efficiency Indicators 50 A variety of environmental efficiency indicators have 0 0 0 90 03 04 05 06 (Fiscal year) 98 03 04 05 06 (Fiscal year) 98 03 04 05 06 (Fiscal year) been proposed recently to express the relationship (Base year) (Base year) (Base year) between business activities and their environmental impact. Such indicators are considered to have the Atmospheric Emissions of Chemical Substances Waste Note: Data reflects totals for Toray Group (Toray, Japanese subsidiaries Environmental efficiency indicator advantage of enabling fluctuations in business activi- PRTR Law Environmental efficiency indicator Environmental efficiency indicator and affiliates, and overseas subsidiaries and affiliates). Data for substances Total waste volume 300 greenhouse gases reflects the Japanese Group (Toray and ties to be excluded from evaluations of environmen- 300 264 277 VOCs Simply disposed waste volume Japanese subsidiaries and affiliates). tal preservation results. 214 213 191 206 200 176 175 200 Toray Group calculates separate environmental 156 144 137 147 Note: Environmental efficiency = Amount of sales / environmental 107 103 115 120 efficiency indicators for principal environmental eval- 100 100 100 100 100 100 impact Amount of sales refers to total sales for manufacturing companies included in environmental impact calculations. uation items. All indicators showed improvements for 0 0 Environmental efficiency indicators are expressed using a value FY 2006. 00 03 04 05 06 (Fiscal year) 98 03 04 05 06 (Fiscal year) of 100 for the base year. (Base year) (Base year)

Toray Group CSR REPORT 2007 58-59 Environmental Data for 12 Toray Plants

Each of 12 Toray plants publishes an annual site report.

Shiga Plant Seta Plant Ehime Plant Okazaki Plant Mishima Plant Chiba Plant Yoshiyuki Yamamoto Yuji Yoshimura Yasunobu Nishimoto Kousuke Katsuki Yuji Okamura Akira Hirai General Manager, Shiga Plant General Manager, Seta Plant General Manager, Ehime Plant General Manager, Okazaki Plant General Manager, Mishima Plant General Manager, Chiba Plant

GHG Emissions 133,000 tons-CO2/year 5,000 tons-CO2/year 480,000 tons-CO2/year GHG Emissions 131,000 tons-CO2/year 261,000 tons-CO2/year 24,000 tons-CO2/year

Air 4 tons/year 0 tons/year 80 tons/year Air 8 tons/year 7 tons/year 67 tons/year Water Water PRTR Emissions 0 tons/year 0 tons/year 10 tons/year PRTR Emissions 0 tons/year 0 tons/year 0 tons/year Soil & landfill 0 tons/year 0 tons/year 0 tons/year Soil & landfill 0 tons/year 0 tons/year 0 tons/year Waste transfers 117 tons/year 0 tons/year 219 tons/year Waste transfers 33 tons/year 36 tons/year 3 tons/year

SOx 469 tons/year 0.6 tons/year 515 tons/year SOx 185 tons/year 858 tons/year 3.0 tons/year Gas NOx 103 tons/year 1.7 tons/year 771 tons/year Gas NOx 162 tons/year 377 tons/year 15.7 tons/year emissions emissions Ash 22 tons/year 0.3 tons/year 40 tons/year Ash 59 tons/year 22 tons/year 1.2 tons/year

Water BOD 226 tons/year 0.7 tons/year 114 tons/year Water BOD 46 tons/year 73 tons/year 7.3 tons/year emissions COD n/a n/a 160 tons/year emissions COD 58 tons/year n/a 78 tons/year

Wastewater 27.6 million m3/year 0.4 million m3/year 35.6 million m3/year Wastewater 8.0 million m3/year 37 million m3/year 4.4 million m3/year

Recycled 2,725 tons/year 111 tons/year 7,056 tons/year Recycled 5,156 tons/year 1,383 tons/year 3,548 tons/year Waste Simple incineration and other 685 tons/ year 0.5 tons/ year 260 tons/ year Waste Simple incineration and other 0 tons/ year 105 tons/ year 67 tons/ year Landfill disposal 6 tons/year 0 tons/year 102 tons/year Landfill disposal 4 tons/year 67 tons/year 26 tons/year

Ecsaine* man-made suede Toraylon* blended yarn Tetoron* staple fiber Nylon filament yarn Tetoron* filament yarn Lumirror* polyester film Medical products Torayca* carbon fiber Filtryzer* artificial kidney Dorner* (prostacyclin [PGI2] derivative) Principal manufactured products Principal manufactured products Toray Waterless Plate* Toyolac* ABS resin Toptical* color filter Inoue balloon catheters and Toraycon* PBT resin printing plate Feron* natural interferon-ß preparation Electronics & information materials Anthrone* P-U catheters Romembra* reverse osmosis membrane module Torayvino* home water purifier Lumirror* polyester film

Nagoya Plant Tokai Plant Aichi Plant Tsuchiura Plant Gifu Plant Ishikawa Plant Eizou Goto Satoshi Kanehara Mikio Sugimura Masayuki Shinzawa Satoru Hagiwara Shunsuke Komichi General Manager, Nagoya Plant General Manager, Tokai Plant General Manager, Aichi Plant General Manager, Tsuchiura Plant General Manager, Gifu Plant General Manager, Ishikawa Plant

GHG Emissions 225,000 tons-CO2/year 805,000 tons-CO2/year 35,000 tons-CO2/year GHG Emissions 38,000 tons-CO2/year 99,000 tons-CO2/year 59,000 tons-CO2/year

Air 16 tons/year 79 tons/year 0 tons/year Air 0 tons/year 5 tons/year 0 tons/year Emissions Water 2 tons/year 18 tons/year 0 tons/year Emissions Water 0 tons/year 0 tons/year 0 tons/year PRTR PRTR Soil & landfill 0 tons/year 0 tons/year 0 tons/year Soil & landfill 0 tons/year 0 tons/year 0 tons/year Waste transfers 81 tons/year 236 tons/year 40 tons/year Waste transfers 0 tons/year 12 tons/year 0 tons/year

SOx 5.6 tons/year 15.4 tons/year 18.6 tons/year SOx 17 tons/year 403 tons/year 134 tons/year Gas Gas NOx 297 tons/year 348 tons/year 25.7 tons/year NOx 1.8 tons/year 60 tons/year 186 tons/year emissions emissions Ash 7.3 tons/year 7.7 tons/year 1.6 tons/year Ash 0.3 tons/year 3.9 tons/year 10.5 tons/year

Water BOD 369 tons/year 410 tons/year 3.4 tons/year Water BOD 0.5 tons/year 12 tons/year 9.7 tons/year emissions COD 222 tons/year 414 tons/year n/a emissions COD n/a 8.8 tons/year n/a

Wastewater 31.6 million m3/year 16.9 million m3/year 2.1 million m3/year Wastewater 0.3 million m3/year 11.2 million m3/year 9.6 million m3/year

Recycled 2,507 tons/year 4,870 tons/year 234 tons/year Recycled 84 tons/year 787 tons/year 164 tons/year Waste Simple incineration and other 2,838 tons/ year 302 tons/ year 1 tons/ year Waste Simple incineration and other 0 tons/year 0 tons/year 0 tons/year Landfill disposal 304 tons/year 153 tons/year 13 tons/year Landfill disposal 0 tons/year 0 tons/year 15 tons/year

Caprolactam Amilan* nylon resin Ecsaine* man-made suede Toraycon* PBT resin Terephthalic acid Nylon filament yarn Tetoron* filament yarn Torayfan* BO polypropylene film Lumirror* polyester film Principal manufactured products Gypsum Tetoron* chips Raytela* plastic optical fiber Principal manufactured products Nylon filament yarn Various fine chemicals Torelina* PPS resin Torelina* PPS film

Note: Plant names and general managers are current as of August 2007.

Toray Group CSR REPORT 2007 60-61 External Commendations

Environment and Social Responsibility Toray Awarding institution Commendation Recipient company, plant, or individual Governor’s Award for Distinguished Service in Promoting Proper Green Cross Award Industrial Waste Disposal Shizuoka Prefectural Industrial Waste Governor’s Award for Distinguished Service in Management Association Promoting Proper Industrial Waste Disposal Mishima Plant Toray’s Mishima Plant received the Hideki Utsunomiya of the Environmental Governor’s A w a rd for Distinguished Service Security Section at Okazaki Plant and Michio Japan Industrial Safety & Green Cross Award Hideki Utsunomiya (Okazaki Plant) in Promoting Proper Industrial Waste Niwa of the Manufacturing Division, both Health Association Michio Niwa (Manufacturing Division) Disposal in recognition of the Mishima Plant short-term contract employees, received the Ishikawa Prefecture Community Ishikawa Prefecture Governor’s Award employees’ efforts to “reduce, recycle, and Green Cross Award at the 65th meeting of Welfare Council (Volunteer Organization Category) Ishikawa Branch, Toray Labor Union reuse waste products and promote proper the Japan Industrial Safety & Health industrial waste disposal,” including ISO Association in recognition of their long-term Wastech Executive Committee Awards Committee Chairperson’s Special Award Toyolac Department, Chiba Plant 14001 initiatives. achievements in the cause of improving industrial safety and health.

Japanese Subsidiaries and Affiliates

Awarding institution Commendation Recipient company, plant, or individual Awards Received by Japanese Subsidiaries and Affiliates

Fukushima Labour Bureau, Fukushima Labour Bureau Director’s Ministry of Health Labour and Welfare Excellence Award Soda Aromatic Co., Ltd. (Koriyama Plant) Governor’s Commendation for Governor of Shiga Prefecture Businesses Demonstrating and Outstanding Toray Precision Commitment to Technical Skill Testing Aichi Prefecture Aichi Prefecture Governor’s Commendation Chiryu Hotel Restaurant “Narihira”/“Matsuri” Chiba Prefectural Police Chief Safe Drivers Chiba 2006 Dow Corning Toray (Chiba Plant)

Kanazawa Chamber of Commerce and Industry Fifth Kanazawa Eco Award Incentive Prize Ichimura Sangyo (Kanazawa Head Office) Soda Aromatic Co., Ltd. (Koriyama Plant) Toray Precision won the Shiga Prefecture Ichimura Sangyo (Kanazawa Head Office) won the Fukushima Labour Bureau Director’s Governor’s Commendation for Businesses won the Fifth Kanazawa Eco Award Excellence Award in recognition for its Demonstrating and Outstanding Commitment Incentive Prize. health assurance measures. to Technical Skill Testing. Overseas Subsidiaries and Affiliates

Awarding institution Commendation Recipient company, plant, or individual Excellent Award on Safety, Occupational Heath and National Quality Management Presidential Award Work Environment and Excellent Award on Labor Relation and in Production Innovation Ministry of Labor and Social Welfare Excellent Award on Safety, Occupational Heath and Work Environment Thai Toray Synthetics (BKK, AYU) Lobor Welfare Toray Saehan received the National Thailand Ministry of Labor and Social Welfare Excellent Award on Safety, Occupational Heath and Work Environment Luckytex (Thailand) (Mill-1, Mill-2, and Mill-3) The government of Thailand recognized the Quality Management Convention from Ministry of Labor and Social Welfare Excellent Award on Labor Relations and Labor Welfare Luckytex (Thailand) (Mill-1, Mill-2, and Mill-3) Mill-1, Mill-2, and Mill-3 operated by Korea’s Ministry of Commerce, Industry Luckytex (Thailand) with the Excellent Award and Energy. Ministry of Commerce, Industry and Energy National Quality Management Convention Toray Saehan on Safety, Occupational Heath and Work Presidential Award in Production Innovation Environment as well as the Excellent Award on Labor Relations and Labor Welfare. Korea Korea Management Association Consulting Category Received at Hall of Fame Prize in Energy Innovation Toray Saehan Korea Productivity Award Korean Occupational Safety and Heath Agency Award Zero Accidents 20 times Achievement Daehan Precision United Shelby County Chamber of Commerce States and Solid Waste Management District Recycler of the Year Toray Resin

Research and Technical Development

Awarding institution Commendation Recipient company, plant, or individual 2006 Japan Society for Composite Materials Award 6th Green & Sustainable Chemistry Award (2006) 2006 Japan Society for Composite Materials Award Advanced Composites Development Center and (Technical Award) Japan Society for Composite Materials (Technical Award) Composite Materials Research Laboratories The Advanced Composites Development The Electronic & Imaging Materials Center and Composite Materials Research Research Laboratories was Society of Fiber Science and Technology 32nd Society of Fiber Science and Technology Fibers and Textiles Research Laboratories Technical Award (2006) Laboratories together received the 2006 recognized with the 6th Green & Japan Society for Composite Materials Sustainable Chemistry Award (2006) Japan Institute of Invention and Innovation Incentive Award for Invention, Chubu Region, 2006 Local Commendation for Invention Chemicals Research Laboratories Award (Technical Award) for work to for their work on development of the develop short-cycle integrated RTM molding environment friendly CTP waterless Japan Institute of Invention and Innovation Incentive Award for Invention, Chugoku Region, Composite Materials Research Laboratories technology for large-scale CFRP. plate and printing system. 2006 Local Commendation for Invention Green & Sustainable Chemistry Network 6th Green & Sustainable Chemistry Award (2006) Electronic & Imaging Materials Research Laboratories

Chemical Society of Japan 12th CSJ Award for Technical Development (2006) New Frontiers Research Laboratories Information Science and Distinguished Service Award for Training Tokiko Shindo (Information & Research Department) Technology Association Japan and Education

Toray Group CSR REPORT 2007 62-63 External Evaluation Third Party Comments

H: Recycle resources P: Ensure a safe Sustainable Management Rating Torayand reduce wasteIndustries, In andc. healthy environment Sustainable Management Rating Evaluation FY 2006 for FY 2006 L: Reduce environmental Since 2003, Toray Group has participated in the evalua- J: Preserve biodiversity burden of transportation R: Ensure equal opportunity tion conducted by the Sustainable Management Rating C: Compliance O: Fulfill responsibility I: Control chemical to consumers Institute as a way to obtain an objective review of how substances Q: Ensure continuous well our activities meet and how closely we respond to employment D: Risk management society’s needs. K: Prevent global S: Balance work warming and private life As in the previous fiscal year, our FY 2006 evaluation N: Create a corporate B: Corporate F: Quantify material culture with the goal governance H: Recycle resources was divided into 63 "leaves" arranged on a Sustainable and energy and reduce use waste ofP: a Ensuresustainable a safe community andand healthyhealthy Management Tree. Leaves are grouped in threes (for environmentenvironment E: Information L: Reduce environmental T: Promote CSR strategy, organization and performance) and arranged on disclosure and burden of transportation communication procurement 21 small branches. These small branches are further A: Management O: Fulfill responsibility arranged along three larger branches representing man- philosophy toto consumersconsumers agement (5), environment (8) and society (8). Each leaf is M: Prevent and G: Reduce eliminate soil environmental and water colored according to the evaluation score for the cate- burden of pollution products and gory it represents: dark green (superior), standard green services N: Create a corporate F: Quantify material culture with the goal (excellent), pale green (good), yellow (acceptable) or and energy use of a sustainable community brown (unacceptable). U: Configure a shared estate Following our high marks from FY 2005, we also with the local community received a strong evaluation overall for FY 2006 as a com- Environment pany approaching the sustainable management ideal. Management Society Seen by category, however, there were areas both where the evaluation improved over last year and where Sustainable it declined. Causes for areas of decline are thought to be Management Tree primarily the adoption of a strict interpretation of bound- aries in evaluating global corporations.

The Toray Group is committed to working on these Strategy Strategy Superior Excellent Good areas for improvement identified by external sources as we renew efforts to pursue CSR activities that meet the Organization Acceptable Unacceptable Not Applicable

demands of society. Performance Performance No Leaf H: Recycle resources P: Ensure a safe and reduce waste and healthy environment L: Reduce environmental Inclusion of Toray Stock burden of transportationin Socially Responsible Investment Funds Adoption of Toray Stock by Major Japanese SRI Funds O: Fulfill responsibility Name of Fund Nickname Operating Company Socially Responsible Investment (SRI) to consumers is an investment approach that seeks stable profits by identifying and eval- Asahi Life SRI Social Contribution Fund Asu no Hane Asahi Life Asset Management Co., Ltd. uating companies not only through traditional financial AIG/Resona Japan CSR Fund Seijitsu no Mori AIG Global Investment Corp. analysis but also from the standpoint of CSR, looking at AIG-SAIKYO Japan CSR Fund Suiren AIG Global Investment Corp. N: Create a corporate their social andF: Quantifyregional material contribution, culture environmental with the goal fac- AIG-Hirogin Japan Stocks CSR Fund Class G AIG Global Investment Corp. and energy use of a sustainable tors, corporate governance, legal compliance, community corporate Shinkin SRI Fund Shinkin Asset Management Co., Ltd. ethics, employment practices, human rights issues and Fukoku SRI Fund Shinkin Asset Management Co., Ltd. treatment of consumers. Chikyuryoku Shinko Investment Trust Management Co., Ltd. STAM SRI Japan Open (SMA Only) STB Asset Management Co., Ltd. SRI funds select corporations for inclusion in their port- STB SRI Japan Open Good Company STB Asset Management Co., Ltd. folios based on various investigations. The Toray Group STB Japan Stock SRI Fund STB Asset Management Co., Ltd. actively responds to such investigations with the goal of Sumishin DC Good Company STB Asset Management Co., Ltd. having its stock incorporated into these funds. The table Daiwa Eco Fund Daiwa Asset Management Co., Ltd. to the right lists socially responsible investment funds in Daiwa SRI Fund Daiwa Asset Management Co., Ltd. Japan that include Toray in their portfolios. Nikko Eco Fund Nikko Asset Management Co., Ltd In addition, Toray stock is included in stock indexes of Pension Reserve Eco Fund DC Eco Fund Nikko Asset Management Co., Ltd companies selected from a CSR perspective, including the Japan SRI Open Kizuna Japan Investment Trust Management Co., Ltd. Morningstar Socially Responsible Index (MS-SRI), which Morningstar SRI Index Open Tsunagari Nomura Asset Management Co., Ltd. targets Japanese stocks, and the KLD Global Climate 100 Eco Balance Umi to Sora Sumitomo Mitsui Asset Management Co., Ltd. Index, which targets global stocks. Eco Partners Midori no Tsubasa Mitsubishi UFJ Asset Management Co., Ltd. Mitsubishi UFJ SRI Fund Family Friendly Mitsubishi UFJ Asset Management Co., Ltd. CSR Ranking Note: The information in the above list is current as of March 31, 2007 based on the most recent prospectuses and fund-management reports published by each company over Name of Media Date Published Name of Ranking Toray Ranking the previous year. It does not constitute a guarantee that these funds have subsequently continued to maintain Toray stock in their portfolios. 10th Corporate Nikkei Business December 1, 2006 Environmental 115th Daily Management Survey Global Corporate Ranking “Newsweek Global 500” Newsweek July 4, 2007 201st Japan CSR + Financial Performance “Excellent Companies 500”

Toray Group CSR REPORT 2007 64-65 Global Reporting Initiative Guidelines Reference Chart Chronology of CSR Initiatives

Item Guideline CSR Report Page Item Guideline CSR Report Page Vision and strategy Environmental performance indicators Business and CSR Activities Environment and Responsible Care Activities 1.1 Statement of the organization’s vision and strategy regarding its contribution to sustainable development. 4-5 EN3 Energy Direct energy use 12, 26 1.2 Statement from the CEO describing key elements of the report. 4-5 EN4 Indirect energy use Toyo Rayon Co., Ltd. founded 1926 Water EN5 Total water use 58 Toyo Rayon Health Insurance Association established 1940 Profile on reporting organization EN8 Emissions, effluents, Greenhouse gas emissions. 12, 26, 58 Toyo Rayon Labor Union Federation established 1946 2.1 Name of reporting organization. 3 and waste (CO2, CH4, N2O, HFCs, PFCs, SF6) 60-61 Monthly company magazine Toray Newsletter first published (name changed to People in April 1986) 1953 2.2 Major products and services. 10-11, 56-57 EN9 Use and emissions of ozone-depleting substances. （27） 2.3 Operational structure of the reporting organization. 6 EN27 Biodiversity Objectives, programs, and targets for protecting and restoring native (Back cover) Company creed “Toyo Rayon serves society” adopted 1955 2.4 Description of major divisions, operating companies, subsidiaries, and joint ventures. 3 ecosystems and species in degraded areas. Pension plan established 1956 28-29 58 60-61 2.5 Countries in which the organization’s operations are located. 3, 6 EN10 NOx, SOx, and other significant air emissions. , , 31 58 60-61 Central Production Committee convenes (reorganized into the Labor and Management Council in 1965) 1958 2.6 Nature of ownership (legal form). 6 EN11 Total amount of waste by type and treatment method. , , 58 60-61 Toyo Rayon Science Foundation established (now the Toray Science Foundation) 2.7 Nature of markets served. 6 EN12 Significant discharges to water by type. , 1960 35 2.8 Scale of the reporting organization. 6 EN32 Water sources and related ecosystems/habitats significantly affected by （ ） English annual report first published discharges of water and runoff 2.9 List of stakeholders. 40-41 1965 Accident Prevention Technology Section established (now the Environment & Safety Department) EN13 Significant spills of chemicals, oils, and fuels in terms of total number and n/a 2.10 Contact person(s) for the report. Back cover Mandatory retirement age of 60 adopted 1966 2.11 Reporting period for information provided. 3 total volume. 52 2.13 Scope of the report. 3 EN33 Suppliers Performance of suppliers relative to environmental components of 1969 Environmental Pollution Prevention Committee established (now the Safety, Health, and Environment Committee) programs and procedures described in response to Section 3.16. 2.14 Significant changes that have occurred since the previous report. n/a Company name changed to Toray Industries, Inc. 1970 Environment Technology Section established at all Toray plants (now the Environment & Safety Section) EN14 Products & services Significant environmental impacts of principal products and services.13, 14-15, 56-57 2.15 Basis for reporting situations that can significantly affect comparability. n/a 1973 Environment Management Regulations and Basic Policy for Greening adopted; 35 2.16 Nature, effect and reasons for any re-statements. n/a EN16 Compliance Obligations and penalties for violating environmental regulations. 53 Plant greening work started 2.17 Decisions not to apply GRI principles or protocols in the preparation of the report. 3 (Refer to GRI) EN34 Transport Significant environmental impacts of transportation used for logistical purposes. 34 Five-day workweek implemented 2.18 Criteria and definitions used in any accounting for economic, environmental, and social costs and benefits. 34 EN35 Overall Total environmental expenditures by type. 1974 Accident prevention and safety inspections of chemical plants started (expanded to all plants in 1984) 2.19 Significant changes since issuing previous reports in the measurement methods n/a Child care leave of absence system established Occupational Safety and Health Management Regulations enacted applied to key economic, environmental, and social information Social performance indicators 1976 Accident Prevention and Safety Management Regulations enacted 2.20 Policies and internal practices to enhance and provide assurance about the accuracy, 65, 66 LA1 Employment Breakdown of workforce. 6 completeness, and reliability that can be placed on the sustainability report. 1979 Chemical Substance Safety Management Guidelines enacted Best effort to cover LA12 Employee benefits beyond those legally mandated. 17 guideline items, Toray Welfare Society established Standard for the Prevention of Earthquake Disasters established 2.21 Policy and current practice with regard to providing independent LA4 Labor and employee- Policy and procedures involving information, consultation, and negotiation 21 1980 assurance for the full report. Third Party Comments section employer relations with employees over changes in the reporting organization’s operations. 1981 Energy Technology Department established 2.22 Means by which report users can obtain additional information and reports about economic, environmental, Back cover LA6 Health and safety Formal joint health and safety committees comprising management and 24 1982 First Company-wide Grand Safety Meeting held and social aspects of the organization’s activities, including facility-specific information. worker representatives. Product Safety Management Regulation enacted LA7 Standard injury, lost day, absentee rates and number of work-related fatalities. 32 Governance structure and management systems 1983 First Energy Conservation Technology Presentation Meeting held LA9 Training & Education Average hours of training per year per employee by category of employee. （49） 1984 3.1 Governance structure of the organization, including major committees under the board of 20-21 LA16 Description of programs to support the continued employability of 49 Environment, Accident Prevention, Safety, and Health Assessment system established at the equipment planning stage directors that are responsible for setting strategy and for oversight of the organization. employees and to manage career endings. First Monday of each month established as a company-wide Safety and Accident Prevention Day 3.2 Percentage of the board of directors that are independent, non-executive directors. 20 LA17 Specific policies and programs for skills management or for 49 Corporate Philosophy, “contributing to society through the creation of new value by innovative ideas, technologies, and products,” adopted 1986 lifelong learning. English language version of company magazine People first published 1989 Mutual inspections of safety and accident prevention start at Japanese subsidiaries and affiliates LA10 Diversity & Description of equal opportunity policies or programs, as well as 16 3.4 21 38-39 Admitted into Keidanren’s 1% Club Board-level processes for overseeing the organization’s identification and , opportunity monitoring systems to ensure compliance and results of monitoring. 1990 First Grand Safety Meeting of Domestic Subsidiaries and Affiliates held management of economic, environmental, and social risks and opportunities. LA11 Composition of senior management and corporate governance bodies, including 50 Industrial Waste Reduction Project started 3.6 Organizational structure and key individuals responsible for oversight, 20, 21, 22, 24 ,37 female/male ratio and other indicators of diversity as culturally appropriate. implementation, and audit of economic, environmental, social, and related policies. 1991 Global Environment Committee and Product Safety Committee established 39, 44, 48 HR1 Strategy & Description of policies, guidelines, corporate structure, and procedures to 48 Global Environment Research Laboratory established (now Global Environment Research Laboratories) 3.7 Mission and values statements, internally developed codes of conduct or principles, and policies 2, 19, 24, 36, Management deal with all aspects of human rights relevant to operations. relevant to economic, environmental, and social performance and the status of implementation. Started shortening scheduled working hours with the goal of 1,800 hours 1993 Safety, health, accident prevention, and environmental audits start at Toray plants 40, 46, 52, 54 HR2 Evidence of consideration of human rights impacts as part of 52 Toray Science Foundations established in Indonesia and Malaysia 3.8 Mechanisms for shareholders to provide recommendations or direction to the board of directors. 42 investment and procurement decisions. HR3 Description of policies and procedures to evaluate and address human 52 Toray Science Foundation established in Thailand 3.9 Basis for identification and selection of major stakeholders. 18-19, 40 1994 Safety, Health, Accident Prevention, and Environment Conference and Product Safety Conference created rights performance within the supply chain and contractors. 3.10 Approaches to stakeholder consultations. 40-43 for Japanese subsidiaries and affiliates HR8 Employee training on policies and practices concerning all aspects of 48 3.11 Type of information generated by stakeholder consultations. 40-43 human rights relevant to operations. Purchase and manufacturing use of certain chlorofluorocarbons abolished 3.12 Use of information resulting from stakeholder engagements. 40-43 HR4 Non-discrimination Description of global policy, procedures, and programs preventing all 48-49 Management Philosophy (Corporate Philosophy, Corporate Missions, and Guiding Principles) adopted 1995 Joined Japan Responsible Care Council as a founding member 3.13 Explanation of whether and how the precautionary approach or principle is 24, 32-33, forms of discrimination in operations. Involved in establishing the Ecological Life and Culture Organization Safety, health, accident prevention, and environmental audits start at overseas subsidiaries and affiliates addressed by the organization. 34 36-37 HR6 Child labor Description of policy excluding child labor and of procedures and programs 48 , Toray Human Resources Development Center opens 1996 Externally developed, voluntary economic, environmental, and social charters, sets of principles, to address this issue. 3.14 3 Toray Europe Labor and Management Council established or other initiatives to which the organization subscribes or which it endorses. HR7 Forced labor Description of policy to prevent forced and compulsory labor and of 48 procedures and programs to address this issue. Human Rights Promotion Committee established 3.15 Principal memberships in industry and business associations and national and international advocacy organizations. 3 HR9 Disciplinary practices Description of appeal practices. 23 Corporate Ethics Committee established 1997 3.16 Policies and systems for managing upstream and downstream impacts, including 52-53 HR10 Non-retaliation policy and effective, confidential employee grievance system. 23 1998 Safety, health, accident prevention, and environmental audits start at Japanese subsidiaries and affiliates supply chain management as it pertains to outsourcing and supplier environmental 52 Safety, Health, Accident Prevention, and Environment Conference and Product Safety Conference created for and social performance, SO1 Community Policies to manage impacts on communities in areas affected by the 41, 43 organization’s activities and procedures and programs to address this issue. overseas subsidiaries and affiliates and product and service stewardship initiatives. 14, 25, 36 1999 Environmental Report published SO4 Awards relevant to social, ethical, and environmental performance. 62-63 3.17 Reporting organization’s approach to managing indirect economic, environmental, 13, 14-15, 45 Second Waste Reduction Plan prepared and social impacts resulting from its activities. SO7 Competition & Description of policy, procedures, management systems, and compliance 22-23 Price setting mechanisms for preventing anti-competitive behavior. Toray Group Domestic Grand Safety Meeting held (first Group meeting) 3.18 Major decisions during the reporting period regarding the location of, or changes in, operations. n/a PR1 Customer health & Policy for preserving customer health and safety during use of products 36-37 2000 Three-Year Environmental Plan started, Ten Basic Environmental Rules adopted 3.19 Programs and procedures pertaining to economic, environmental, 18, 20, 22, 24, Safety and social performance. and services and procedures and programs to address this issue. Toray Group Environmental Management Standards established 36, 38, 40, 44, Environmental accounting results for FY 1999 announced 48, 52, 54 PR2 Products & Policy for procedures, management systems and compliance 36-37 3.20 Status of certification pertaining to economic, environmental, and social management systems. 24, 37 Services mechanisms related to product information and labeling. All 12 Toray plants acquire ISO14001 certification PR3 Respect for privacy Policy, procedures, management systems, and compliance mechanisms Reemployment system introduced 2001 Recycling Committee established Economic performance indicators 39 for consumer privacy. Compliance Committee established 2002 EC1 Customers Net sales 6 CSR Committee established 2003 Second Three-Year Environmental Plan started EC2 Geographic breakdown of markets. 6 CSR Guidelines and Action Programs adopted 2004 CSR Annual Report published EC10 Public sector Donations to community, civil society and other groups 54 CSR Line Activity started 2005 CSR Report published ■ Indicates essential items and indicators ■ Indicates optional indicators CSR Operations Group established in the Corporate Planning Department 2006 CSR Operations Department established 2007 Third Three-Year Environmental Plan started

Note: GRI (Global Reporting Initiative) Guidelines: Guidelines for sustainability reporting released by an international NGO headquartered in Amsterdam

Toray Group CSR REPORT 2007 66-67