10 Sustainability Programs

In our approach to materiality, formulated in December 2021, Nippon Sanso Holdings specified 24 material issues, including three fundamental preconditions for our existence, namely, respect for human rights, safety and security, and corporate ethics. To address the material issues we identified, under the four-year MTP NS Vision 2026, which began in April 2022, we created eight sustainability programs to be implemented across the Group. Under the MTP Next Innovation 2030, which begins in FYE2027, we have expanded the eight programs started during the previous MTP and newly added initiatives related to employee engagement and sustainable business.

List of Sustainability Programs

E	①Carbon Neutral Program Ⅰ(Continuation) ②Carbon Neutral Program II(Continuation) ③Sustainable Business Program(New) ④Sustainable Water Program(Continuation) ⑤Zero Waste Program(Continuation)	Reduce our Group’s GHG emissions Reduce customers’ GHG emissions through environmentally friendly products and services Expand businesses that resolve environmental and social issues Effective use of water resources and reduction of water-related risks Reduction of industrial waste and effective use of resources
S	⑥Safety First Program(Continuation) ⑦Quality Reliability Program(Continuation) ⑧Talent Diversity Program(Continuation) ⑨Employee Engagement Program(New)	A security and safety culture Increasing quality and reliability Secure and develop diverse talent Enhance employee well-being and engagement
G	⑩Compliance Enhancement Program(Change)	Strengthen activities that promote compliance

Relationship with Materiality

Carbon Neutral ProgramⅠReduce our Group’s GHG emissions

We aim for carbon neutrality by 2050 through technological breakthroughs.

While maintaining the basic framework of the previous MTP, NS Vision 2026, we are working to reduce the Group’s Greenhouse gas (GHG) emissions (Scope 1 and Scope 2). Based on our current GHG emissions and the outlook for the power emission factor, among other factors, management has newly set targets for FYE2036. In line with our aim of achieving carbon neutrality by 2050, we are also working to reduce GHG emissions by 9% in FYE2031 and by 21% in FYE2036 compared with the FYE2019 level.

Main Initiatives

Carbon Neutral Program IIReduce customers’ GHG emissions through environmentally friendly products and services

Contribute to reducing customers’ GHG emissions through environmental product offerings and applications

Through its products and services, the NSHD Group helps customers reduce their GHG emissions. As a target for our contribution to GHG reductions, we aim to increase our contribution to GHG reductions (Category 1) by 30% in FYE2030 compared with FYE2025. Please refer to the following for our definitions of categories.

Aggregate and manage them classified into the following two categories

• Category 1: GHG emissions avoided based on the calculation methodology referenced by the WBCSD^* (third-party verified)
• Category 2: GHG emissions avoided based on the previous calculation methodology, excluding Category 1

^*World Business Council for Sustainable Development

Sustainable Business ProgramExpand businesses that resolve environmental and social issues

Expansion of businesses that resolve environmental and social issues

We set a new goal for Sustainable Business to contribute to resolving environmental and social issues through our products and services in resilient markets* essential to daily life.

*This refers to markets (such as food and beverages and healthcare) that can adapt quickly to external disruptions and uncertainty, and sustain growth and investment while recovering.

Main Resilient Markets and Applications of Our Products and Services

1) Food and Beverages

• Reduction of food waste and extension of shelf life through gas control and frozen storage
• Contributing to the conservation of aquatic resources by supporting aquaculture businesses with oxygen gas and other products

2) Medical and Healthcare

• Providing products and services that meet diverse needs from hospitals to home medical care
• Providing Water‑18O as the starting material for PET diagnostic agents used in cancer and Alzheimer diagnosis.

3) Lifestyle

• Offering THERMOS‑brand products that reduce disposable containers and save energy through insulation for cooling and heating

Sustainable Water ProgramEffective use of water resources and reduction of water-related risks

Effective use of water resources and reduction of water-related risks

To promote more efficient water use and build a business structure that is resilient to water-related risks, NSHD will advance initiatives aimed at reducing water withdrawal intensity (= (water intake: thousand m3) / net sales) by 10% in FYE2030 compared with FYE2025.

Action Plan

Develop water management plans for facilities located in Aqueduct-designated extremely high risk and high risk areas (baseline water stress)

Results of Water Stress Level Survey

The NSHD Group conducts a survey of water stress at all of its production sites in order to apprehend the risks related to use of water resources and facilitate a more effective response to water risks. Using the Aqueduct water risk assessment tool developed by the World Resources Institute, we surveyed water stress at 129 sites, with the following results.

*Water risk category: Baseline water stress
Upper level: Water usage (thousand m3), lower level: Number of production sites

	High	High-medium	Medium	Medium-low	Low
Japan	0	0	1,456	1,566	46
	[0/21]	[0/21]	[9/21]	[11/21]	[1/21]
United States	1,018	2,667	1,949	748	1,470
	[6/50]	[14/50]	[8/50]	[8/50]	[14/50]
Europe	3,770	0	5,707	0	15,104
	[9/33]	[0/33]	[9/33]	[0/33]	[15/33]
Asia and Oceania	875	113	361	612	1,497
	[6/23]	[1/23]	[5/23]	[6/23]	[5/23]
Thermos	0	0	61	0	101
	[0/2]	[0/2]	[1/2]	[0/2]	[1/2]
Total	5,663	2,780	9,534	2,926	18,218
	[21/129]	[15/129]	[32/129]	[25/129]	[36/129]

• Data as of FYE2025
• Water stress survey conducted using Aqueduct water risk assessment tool
• Reporting boundary: Production sites with ASU, HyCO, or liquid carbon dioxide facilities with annual water withdrawal of 20,000 m3 or more and Thermos

Zero Waste ProgramReduction of industrial waste and effective use of resources

Reduction of industrial waste and effective use of resources (3Rs: reduce, reuse, and recycle)

To build a resource-circulating business, NSHD will promote initiatives aimed at reducing waste intensity (= (waste generated: tonne) / net sales) by 10% in FYE2030 compared with FYE2025.

Main Initiatives

• Effective use of resources through improved production efficiency
• Reduction of waste through thorough separation and disposal, and sale of scrap metal and other valuables
• Reduction of landfill waste through promotion of recycling

Safety First ProgramA security and safety culture

We aim for world-class safety in the industrial gas industry.

NSHD positions safety as the foundation of its corporate existence and highest priority. With a target for lost time injury rate in place as we aim for zero accidents, we continuously monitor a range of indicators, including occupational accident rates, and enact safety measures that comprehensively suppress accidents and occupational injuries.

Main Initiatives

Quality Reliability ProgramIncreasing quality and reliability

We aim to improve quality and reliability.

We instill a quality-oriented culture to further reform employee awareness and aim to enhance our quality and reliability by promoting the introduction of automation technologies.

Initiatives to Improve Reliability

Instilling a Quality-Oriented Culture, Further Reforming of Employee Awareness

• Thorough quality ethics and compliance education
• Implementation of quality audit
• Sharing of quality complaint information and horizontal expansion of corrective and improvement actions

Promoting Introduction of Automation Technologies

• Promotion of automation, etc. (elimination of manual data entry), in testing, inspection, and analysis records

Increasing Customer Satisfaction of Semiconductor Specialty Gas Products

• Efforts to increase customer satisfaction through the activities of the Semiconductor Specialty Gases Quality Committee (SSG‑QC)
  [Reference] To promote supplier quality management, we will steadily implement evaluations based on the Responsible Business Alliance (RBA) Code of Conduct.

Talent Diversity ProgramSecure and develop diverse talent

We aim to secure and develop diverse talent.

Through the promotion of diversity and inclusion, we are strengthening our global competitiveness and transforming our corporate culture. We have set KPIs related to empowering women and focus Groupwide efforts to achieve them. We encourage personnel exchanges across regions in order to broaden their perspectives and grow while learning about each other’s different backgrounds.

Major initiatives to achieve KPIs

Japan

• Development of female managers and leaders, and awareness reform (sponsorship program, training for aspiring female managers, unconscious bias training)
• Opportunities for dialogue to promote D&I (town hall meetings, International Women's Day events)

Initiatives for personnel exchanges

Established task-based global teams that span regions (Examples: Promotion of programs at operating companies for the production of bulk gases and achievement of carbon neutrality and operational excellence Promotion Project)

Employee Engagement ProgramEnhance employee well-being and engagement

Enhancing employee well-being* and engagement

Across the Group, we are working to improve engagement by creating an environment where employees can work with both fulfillment and peace of mind. These efforts encourage each employee to maximize their potential and help energize the organization, forming a critical foundation for sustainable mid- to long-term corporate value creation. As an indicator of the effectiveness of these initiatives, NSHD aims to achieve a sustainable engagement score** of 83 or higher in FYE2030.

* Well-being refers to a state in which employees are physically, mentally, and socially healthy, resonate with the Company’s vision and values, and are able to fully demonstrate their capabilities.
** It is a comprehensive indicator that captures: (1) attachment to the Company (Engaged), (2) a workplace environment that supports productivity and performance (Enabled), and (3) physical, interpersonal, and emotional well-being at work (Energized). Companies with higher scores on this indicator tend to demonstrate higher labor productivity and stronger business performance, and correlations with financial indicators have also been confirmed.

Please refer here for the year-by-year results of employee engagement surveys, including the sustainable engagement score, and for initiatives to improve engagement.

Compliance Enhancement ProgramStrengthen activities that promote compliance

We always aim to maintain zero serious compliance violations.

To further promote and ensure compliance, and to strengthen compliance promotion activities at each operating company, taking into account the actual circumstances of each region and business, we always aim for zero serious compliance violations while using compliance surveys as an indicator for strengthening activities. We aim for a compliance survey score of 80 or higher in FYE2030.

Specific Measures for Achieving the Goal

Promote Group common action plans and region-specific action plans based on the actual circumstances of each region and business