NIPPON KODOSHI CORPORTION

In 1998, Nippon Kodoshi Corporation established its environmental policy (*1), and in 2006, its code of conduct (*2). Seeking to strictly abide by these core philosophies as we expand our business, we have promoted corporate activities that are respectful of people, society, and the environment.
At the same time, legal ramifications around the world and the needs of our customers (in particular as concerns regulations to products containing chemical substances) have become more advanced and complex with each passing year, so there is a limit to what we can do working solely internally to comply with these developments. Therefore, we find ourselves in a position where we must also call on our partners for assistance.
Our procurement policy stipulates purchasing materials that are eco-friendly and sold by partners who operate their businesses with a full understanding of and respect for people, society, and the environment. We codified these new terms in our green procurement standards, created in January 2019. Effective that month, we have launched new procurement initiatives following these rules. We appreciate your understanding and cooperation in this matter.

February 28, 2019
Nippon Kodoshi Corporation
Tatsuo Nakayama, Director, Quality and Environment Group

The Japanese serow is a special protected species. This image was photographed in July 2017 at our company-owned forest land (Yukyu no Mori, Goigamori) in Ubagatani, Hatayama, Aki-shi, Kochi Prefecture We are also actively engaged in environmental preservation.

In order to pursue eco-friendly procurement that is considerate of human beings, society, and the environment, we disclose to vendors the exact nature of requests concerning chemical substances, including chemicals management, including for prohibited substances, environmental management (reduction of environmental impact, sustainable society through environmental conservation, etc.), and legal compliance in order to promote their observance of these rules and regulations.

We ensure that the vendors providing materials to us comply with our green procurement standards. To that end, we ask that vendors fully understand the purpose and intent of our green procurement standards and cooperate with us.

The green procurement standards consist of the following items.

❶Terms

In order to accurately disseminate the details of these green procurement standards to vendors, this section lists and defines terms implicated in chemical substances management that may at times be difficult to understand and explains them in detail.

❷Chemical management

Here we list the requests we make of vendors as concern surveys of chemical substances restricted per RoHS and information disclosure and dissemination, among other requirements.

❸Environmental management activities

This section describes how we ask vendors to collaborate with us in reducing environmental impact and engaging in environmental conservation towards a sustainable society.

❹BCP (business continuity planning)

❺Social contributions

❻Laws and ethical code

❼Information security

❽Selection of vendors

These green procurement standards may be subject to change following laws and regulations, requests from customers, social needs, or other developments. We will notify you each time any changes are made and ask for your cooperation.
If, following these revisions, your are unsatisfied with the nature of these standards, please immediately contact our survey department or a contact person at the address below.

NIPPON KODOSHI CORPORTION　Administration Department
Telephone: 088-894-2321    Fax: 088-894-5401

6-1. Regulated chemical substances

Below is a list of the chemical substances we treat as restricted or regulated.

6-2. Allowable amount of regulated chemical substances

The amount of allowable chemical substance subject to restriction shall be that stipulated in RoHS, REACH, GADSL, the Battery Directive, and other applicable industry directives and regulations, and the threshold stipulated in our green procurement standards. However, in the case of chlorine and bromine, the below values shall be the allowable amount.
We urge vendors to comply with the thresholds we put in place.

For items requiring the creation of a separate threshold, we will consult separately with the vendor.

6-3. Surveys of regulated chemical substances

Chemicals we treat as subject to restrictions undergo surveys upon being adopted for the first time and biannually thereafter.

To disclose data to us, use the survey report form (as specified by us) and chemSHERPA. Use of our form shall only be permitted where it can be objectively demonstrated that the content represents either 1) 100% disclosure or 2) not 100% disclosure, but a full survey of the substances classified under the green procurement standards.

Where the content of a restricted chemical substance exceeds the allowable amount, or where it is below the allowable amount but is contained nevertheless, you are required to notify us with the name of the substance and the degree of concentration. You are required to contact our procurement division or green procurement standards hotline.

We may also ask for your cooperation on other surveys pertaining to chemical substances. Thank you for your understanding and cooperation.

Where required by a public organ or one of our customers, we may disclose survey reports and other information you provide, only after first having redacted the content so as to anonymize it. Thank you for your understanding on this matter.

6-4. Handling of non-conforming products

If you discover that a non-conforming product was delivered to us, please immediately contact our procurement division. The handling of the non-conforming product shall be per agreements (such as specifications) we have with the vendor.

6-5. Chemical substances management system

We ask vendors to implement and manage a system for chemical substances management that incorporates items (1)-(3) below.

(1) Clarification of allowable amount at each phase of design, development, procurement, manufacturing, and delivery
(2) Evaluation of whether proper management per the required standards is in place and being performed
(3) Disclosure of information pertaining to chemical substances found in products

*For information on creating such a system, please refer to the Guidelines for the Management of Chemicals in Products, developed by JAMP (Joint Article Management Promotion Consortium)
You can perform a self-assessment using the checklist included on the above guidelines. We encourage you to make use of this.

We consider it extremely important to pursue CSR across the entirety of our supply chain. To that end, not only do we strictly comply with our code of conduct, but also engage in CSR activities that meet industry standards (*1).
We ask our vendors for their support in helping us meet our social obligations.

*1 Industry standards: Supply Chain CSR Promotion Guidebook issued in August 2006 by the Japan Electronics and Information Technology Industries Association (JEITA)

7-1. Environmental activities

We obtained ISO14001 certification in 1998 and continue to operate our company to be people- and eco-friendly as we contribute to the creation of a sustainable and better way of life in a biodiverse world. Specifically, we engage in the following initiatives.

• (1) Filing for and submitting requisite notice to government agencies

• (2) Submitting the requisite reports to government agencies

• (3) Management of chemical substances contained in products
  *Per section 6 (Chemical management) of these standards

• (4) Management of chemical substances used in manufacturing processes
  *Per partial content in these standards (section 6: chemical management) and PRTR (The Act on Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management thereof)

• (5) Minimizing environmental impact of effluent, sludge, and exhaust

• (6) Reduction of waste products

• (7) Reduction of greenhouse gases (CO2, Freon)

• (8) Effective utilization of energy (resource conservation and low energy output)

• (9) Water resource conservation (conservation of forest reserve water sources, reduction of water use)

• (10) Nature conservation to protect biodiversity (conservation of company-owned forest, protection of rare organisms)

• (11) Implementation and operation of environmental management systems to effectively achieve the above

We ask vendors to also pursue equivalent environmental activities.

It is essential for a going concern to systematically plan ways of protecting human life and conserve assets in the event of disasters, rapidly recover the business, and minimize the impact to stakeholders. We treat large earthquakes, flooding, natural disasters, fires, accidents, and other adverse events as major risks and have established a BCP (business continuity planning) approach for enhanced emergency response handling, natural disaster impact reduction, and early recovery (such as the dispersion of production sites and procurement from multiple vendors, the construction of an IT system to that end, education and awareness about disaster prevention, implementation of training, partnerships with the local community, and public awareness activities.)
We ask vendors to create concrete plans for risk assessment disaster response and engage in initiatives to maintain the stable supply of products.

Corporations today cannot solely pursue profits and must be aware of their social and environmental impact and take responsibility for it, as well as contribute and give back to society in due kind.
We consider it a critical role in our corporate social responsibility to forge ties with the local community and disseminate information widely in order to grow in tandem with society towards a brighter, more sustainable future. For example, we are engaged in initiatives for local education of children and supporting the community in the event of disasters, forestry conservation and wild bird protection, cleanup activities, hosting of youth sporting events, and sponsoring and making charitable donations to events. We will continue contributing to society through our business, whether it is in a direct or indirect fashion.
We would actively encourage our vendors to voluntarily pursue their own CSR initiatives.

10-1. Human rights and occupational health and safety

We strictly comply with covenants prohibiting child labor and forced labor, protecting young laborers, and prohibiting immoral or discriminatory treatment, as well as work in dangerous conditions. We exercise all due care to ensure the health and safety of our workforce.
We urge our vendors to exercise due care and take appropriate measures in the countries and territories in which they do business to maintain proper standards of respect of human rights and occupational healthy and safety.

10-2. Fair and equitable transactions

In the event of corruption, bribery, provision or receipt of improper gains, unfair or unequitable restrictions on trading (such as abuse of privilege or position), or other actions that would obstruct healthy business relations, we refer to the applicable laws, codes of ethics, and our code of conduct and take appropriate action to comply with all of the above and redress the matter. We ask vendors to manage their businesses in strict compliance with applicable laws, statutes, regulations, and social codes of ethics.

10-3. Conflict minerals

Conflict minerals (those produced in the Democratic Republic of the Congo and environs) are currently regulated by the Dodd-Frank Act (part of the Dodd–Frank Wall Street Reform and Consumer Protection Act). In order to fulfill our social obligations, we never use conflict minerals or materials derived from them. We urge our vendors to procure minerals in a responsible fashion. We may also ask you to undertake a survey regarding the provenance of your minerals. Thank you for your understanding and cooperation.

11-1. Prevention of leaks of client and third party confidential/personal information
Partners must maintain and manage the categories of information below such that its unauthorized handling (obtaining, use, and disclosure) and leak is prevented.

(1) Confidential information of our company and its customers
(2) Third party confidential information
(3) Personal information applying to employees and other parties

We ask that you implement and maintain a data processing system that is equipped to protect against unauthorized use or malfeasance, or the inadvertent leak of information.

11-2. Protection against computer network threats

We regularly monitor computer networks for computer viruses, spyware, and other threats, and employ measures as necessary to protect our clients, and ask that they similarly protect us and the business partners we deal with.

Sections 6 through11 of these standards are used to evaluate new vendors and to make periodic evaluations of existing vendors, and act as a key material used to select prospective vendors.

(1) Required items: 6 through 10, and 11, of the green procurement standards
(2) Additionally weighted items: items 7-9 of the green procurement standards

We only work with those vendors who comply with or accommodate the terms of the required sections of these standards.