The present third-party opinion was prepared based on an exchange of opinions as well as a review of the "DENKA REPORT 2019" and the CSR information website on the Denka website.

We are currently in what is called the VUCA era. VUCA refers to a situation characterized by "Volatility," "Uncertainty," "Complexity," and "Ambiguity," and we are facing a difficult time in which to predict the future of companies. In this environment, it is important to consider what to value and what criteria to use for making decisions. This report describes the ideas, directions, and specific processes for breaking through this era, and we hope it will dispel various concerns of our readers.

A representative example of this is the transformation of the Company into a completely different entity through the specialization of our businesses. In order to achieve this, we must first clarify the definition of specialty chemicals, and then set an ambitious target of increasing the percentage of our specialty chemicals business to 90% by fiscal 2022. President Yamamoto has stated that he will take the lead in promoting a change in awareness throughout the Company to achieve this goal. Furthermore, he has announced various measures that will convince readers that we can achieve our goals, such as a transformation of our business portfolio and the introduction of innovative processes.

I believe that ESG management is an effective management approach for surviving in the VUCA era. The SDGs wedding cake model, which is explained later, shows that the economy is supported by society, and society is supported by the environment. ESG management can be said to be the approach of building this idea into management. When I reviewed your definition of specialty businesses, I found that it states, "Businesses that are in line with ESG initiatives, have uniqueness and high added value, are not easily influenced by external environments, and have top-class market shares, as well as businesses that have such potential in the near future." The fact that you placed ESG considerations at the beginning of the definition conveys your strong desire to practice ESG management. Furthermore, in the statement made by a researcher, "As a researcher, I believe that pursuing a more efficient production method with a lower environmental impact is a prerequisite for technological development," I could see that the idea of having ESG as a prerequisite, which means that the development of new products that would harm the environment is unacceptable, has permeated among employees. I believe that this permeation will promote the healthy growth, which is one of your growth visions, from aspects other than work style reform.

It is becoming clear that the negative aspects (negative assets) of technology can no longer be overlooked, and that their mitigation and resolution have become issues. Therefore, we expect that our technologies will be verified and reported from the perspective of ESG management.

Efforts toward the SDGsPresident Yamamoto stated that the SDGs are "a very well-designed compass," and I believe that they are also a "compass" for navigating through the VUCA era. In this report, we have taken a step forward from last year by clarifying the consistency between "The Denka Value" and the SDGs, as well as the steps for introducing the SDGs, through the "Presidential Interview" and "Contributions to the SDGs." In fiscal 2019, you plan to consider Step 2: Identifying Priority Issues and Setting Goals, and Step 3: Reporting and Communicating with Stakeholders Inside and Outside the Company. I hope that you will steadily implement these steps and make further progress. When reporting, I expect you to organically connect your corporate philosophy and management plan with the elements of CSR, materiality, and ESG, which President Yamamoto mentioned as follows: "In the past, CSR, materiality, and ESG elements did not connect well, but I feel that they have come together with the SDGs." I also hope to see reports that use the SDGs as a subject to show the progress of the goals and targets you have identified as priority issues. Furthermore, Step 4, "Creating New Businesses and Expanding Market Areas," is an area of strong interest for many stakeholders. To date, most SDG reports have focused on mapping your current initiatives and products and services to your goals and targets. However, the numerous goals and targets you have set are issues recognized by the international community, and the market for products and services that contribute to solving these issues is extremely large. Therefore, I hope to see further concretization of Step 4. You mentioned that you are currently considering this in the New Business Development Department, and I look forward to seeing the results.

The CSR information websites are important sources of information that complement integrated reports. As sustainable investment is rapidly expanding, ESG information is attracting attention, and companies are becoming more proactive in their disclosures, making various efforts for the convenience of users. On this website, in addition to performance data and activity topics that are updated frequently, I was told that more specialized information will be posted. I also feel that there is a strong commitment to providing the latest information at all times, such as by including update dates for the information.

However, upon reviewing your current website, I feel that the disclosure items and content are insufficient for a company that advocates ESG management. I suggest that you verify your current disclosure status using benchmarks from other companies in addition to the GRI Standards and the Environmental Reporting Guidelines 2018 that you are using as references for report creation. We have entered an era where the risks of not disclosing information outweigh those of disclosing it.