Basic Policy and System for Promoting Sustainability Initiatives

A company can survive and grow only by continuously contributing to the common good and the enrichment of people's lives. Therefore, the sustainable development of the company itself cannot be achieved unless its management enhances the sustainability of society and the global environment.

Advantest's purpose and mission is "Enabling Leading-Edge Technologies". This points to our continual quest for greater social development in the form of contributions to the common good driven by leading-edge technological innovation in electronics, supported by our measurement technology and embodied by our products and services, with which we strive to provide ever greater value to customers around the world.

Advantest's management goal is to improve corporate value over the medium to long term by contributing through our business activities to a sustainable society that is safe, secure, and comfortable. In order to sustainably develop our business, we must build good relationships with all our stakeholders, including society as a whole, the global environment, our customers, shareholders, employees, and business partners, and develop these relationships in a well-balanced manner. We believe that this is a top-priority endeavor, and by pursuing it, corporate value will improve and stakeholder value will also increase.

Based on these ideas, our medium- to long-term management policy "Grand Design" sets out our vision statement as "Be the most trusted and valued test solution company in the semiconductor value chain".

We believe that semiconductors will help secure and support a sustainable future for all of us.

In fact, almost all of our businesses are related to semiconductors, which are indispensable for the future development of various industries and for the realization of a more sustainable future society.

Semiconductors are now embedded in every part of our lives. They are indispensable components not only of personal computers and smartphones, but also domestic appliances, automobiles, and industrial equipment. We now live in a world where everything is connected to the Internet. As the number of networked devices connected to the network increases, the amount of data in the world is expected to increase every year.

On the other hand, demands for reducing environmental impact are also affecting semiconductors. The growth of their energy consumption has been restrained thanks to the advances resting on miniaturization, higher-performance gains, and an emphasis on energy-saving. There has also been a remarkable improvement in the performance and proliferation of power semiconductors. Advantest is responsible for offering test solutions so as to aid semiconductor manufacturers in providing higher-performance semiconductor devices. These efforts will ultimately lead to contributions to future global energy conservation.

Advantest's mission is to continue to meet the challenges (high quality and performance assurance, shortest time to mass production) that our customers face in the evolution of semiconductors, which is driven by the two axes of digital transformation (DX) and green transformation (GX). In carrying out that mission, all executives and employees are guided by "The Advantest Way," and commit to respecting all stakeholders and working for sustainability, while at the same time seeking to ensure the sustainable development of our company and achieve medium- to long-term improvement of corporate value.

For details, please refer to "Innovation Initiatives".

Advantest recognizes that attentive management based on our purpose and mission is essential for resolving sustainability issues, and creating corporate value over the medium to long term, and has formulated a mid/long-term management policy, our Grand Design, as well as a mid-term management plan. In addition, we are now focused on instilling "The Advantest Way" among our executives and employees.

"The Advantest Way" is the foundational set of our guidelines and commitments that unites the members of the Advantest Group, embracing diverse cultures, languages, customs, and values into one team, and assuring maximum potential of our diverse human capital. The Advantest Way consists of six elements: the first three, our "purpose and mission", "vision", and "core values" stipulate what the Advantest Group aims to be and what we should do in order to create value and contribute to the common good over the mid/long term. The second three, "Sustainability Policy", "guiding principle (Quest for the Essence)", and "ethical standards" define the basic mindset required of Advantest's executives and employees for successful implementation of the first three elements.

We have laid out "Sustainability Policy" as one of the three foundations that support our vision. Advantest has formulated the sustainability policy as a component of "The Advantest Way" from the perspective of expanding our contribution to society and further creating value for its stakeholders, and is working to promote sustainable management on this basis. In addition, we will continue to identify issues related to the creation of business value, such as improving customer value; strengthening the business foundation, such as upgrading human capital; strengthening the management foundation, such as reviewing the management execution system; addressing social and environmental regulations and risks; and trends in international disclosure standards on sustainability, from the perspectives of both stakeholders and our own company. The issues identified as important from the perspective of both stakeholders and the company are organised into "Sustainability Action Plan", which is a subordinate plan of the Med-Term Management Plan. In formulating a new medium-term sustainability action plan, we have completely reorganised the themes to be addressed to be linked to the Grand Design and the Third Med-Term Management Plan (MTP3), from the perspective of increasing the value provided to stakeholders, and have set new medium-term targets for each of these themes. New medium-term targets have been set for each of these themes. In conjunction with this, the name of the plan was changed to better reflect the content and scope of future initiatives.

Advantest will continue its sustainability journey based on Sustainability Policy.

Based on the Sustainability Policy, which sets medium-term targets, Advantest promotes overall activities while assigning each CxO, including the Group CEO, to be responsible for individual issues. Furthermore, by incorporating the Sustainability Action Plan into specific annual business plans for each unit, Advantest strives to make steady progress in our overall initiatives.

In addition, in order to promote sustainability-related initiatives in a flexible manner throughout the company, Advantest established the Sustainable Management Working Group (SMWG) in 2020, an organization directly linked to the Executive Management Committee, to promote both the growth of our own businesses and our contribution to social issues. This is a company-wide committee comprising the leaders of all business, functional and regional units, and is headed by the Group CEO. This committee regularly updates and discusses sustainability issues that need to be addressed across the company, based on analyses of the significance of ESG issues in each unit and other information, in order to further promote and deepen sustainable management.

The overall progress of sustainability initiatives in Advantest is regularly reported to the Executive Management Committee and corrective measures are discussed as necessary.

Sustainability initiatives in Advantest are promoted with the involvement of the Board of Directors, with individual reports to and supervision from the Board of Directors depending on the importance of the matter. The Sustainability Action Plan 2024-2026, which was formulated in synchronization with the third Medium-Term Management Plan (MTP3) starting in FY2024, was also reported to the Executive Management Committee and the Board of Directors on its content and targets. The contents and targets of the plan were discussed and decided by the Executive Management Committee and reported to the Board of Directors.

Advantest strives to disclose information on sustainability areas and issues that Advantest identifies as important, as well as their indicators and targets, to its stakeholders in a timely and appropriate manner through Integrated Reports and Sustainability Data Book. As part of this, third-party assurance is obtained for key indicators.