ENVIRONMENTAL MANAGEMENT

Environment Environmental Management

KOKUYO Group Environmental Policy

Building a sustainable society will require the creation of a decarbonized and recycling-oriented society that can coexist with nature. The KOKUYO Group Environmental Policy defines the following seven items as the specific activity items to achieve that: response to the climate crisis; contribution to a recycling-oriented society; contribution to a society that coexists with nature; procurement, development and supply of environmentally friendly products; legal compliance and pollution prevention; information disclosure and communication; and environmental management. Each operating company sets targets in line with the characteristics of their business based on this KOKUYO Group Environmental Policy. They then strive to improve their environmental performance.

KOKUYO Group Environmental Policy We recognize that global warming, depletion of resources, biodiversity conservation and other global environmental problems are perpetual issues shared by the whole world to achieve a sustainable society. Accordingly, the KOKUYO Group will assume the lead in taking action to resolve these issues by bring together the wisdom of various people involved in our business activities.
Response to the Climate Crisis	We will take measures to significantly cut and absorb the amount of greenhouse gasses we emit to realize a decarbonized society.
Contribution to a Recycling-oriented Society	We will strive to thoroughly save resources and reduce waste materials as far as possible and then effectively utilize them as resources to develop a recycling-oriented society.
Contribution to a Society That Coexists with Nature	We will promote the conservation of biodiversity and the reduction in harmful chemical substances through our business activities to minimize our environmental impact on ecosystems.
Procurement, Development and Supply of Environmentally Friendly Products	We will reduce our environmental burden over the entire product life cycle and will work on the development of new environmental technologies and green procurement.
Legal Compliance and Pollution Prevention	In addition to environmental laws and regulations, we will seek to observe the industry guidelines we have accepted and our own standards, as well as to prevent environmental pollution.
Information Disclosure and Communication	We will actively disclose environmental information, work on communication with our customers and all external entities, and will fully engage in environmental preservation activities.
Environmental Management	We will strive to continuously improve our environmental performance and to solve social issues through our business activities to realize a sustainable society.

We have set challenge goals for 2030 and commitment goals for 2024.

Our materiality assessment has identified three critical challenges: respond to the climate crisis, contribute toward a recycling-oriented economy and contribute toward a society that coexists with nature. We started considering the state we want to achieve in 2030 and then established indicators (KPI) for that when promoting activities. We have set ambitious targets for 2030 as challenge goals and targets we are aiming to realize in the Medium-Term Plan as commitment goals to serve as a milestone for that.

This target applies to the following companies: KOKUYO, KOKUYO Product Shiga, KOKUYO MVP, KOKUYO Logitem, KOKUYO Supply Logistics, KOKUYO Marketing, Kaunet, Actus, KOKUYO Finance, KOKUYO & Partners, LmD International, KOKUYO K Heart, and Heartland

SBT：Science Based Targets

Environmental Management System (EMS)

Our Environmental Management System (EMS) consists of an integrated accreditation system for planning, R&D, production, marketing, sales, services, storage, and shipment. Since 2004, the system covers KOKUYO and all major subsidiaries in Japan. While keeping the core elements of the EMS consistent across the group, we differentiate according to the scale of the environmental impact. Specifically, operating companies and plants with a relatively large environmental impact get case-specific treatment, while those with less impact get standard treatment. We also try to give the companies sufficient leeway to manage their environmental impacts in a manner that suits the nature of their businesses. For example, we allow the companies to set environmental targets in line with their business strategies.

Previously, our environmental initiatives were led by the Environment Committee. This committee coordinated efforts to address environmental issues and monitored socioenvironmental trends. However, we later decided that a more group-wide approach was necessary to deal with the increasingly diverse and complex environmental issues in Japan and around the world. In 2022, we reorganized the committee into a subcommittee (Environmental Subcommittee) of the new Sustainability Committee and increased its membership to include Actus (our interior retail business) and Heartland (a special subsidiary—a company focused on employing people with disabilities). The Environmental Subcommittee has three taskforces for leading cross-organizational efforts to accomplish the goals for the three material issues: the Climate Crisis Taskforce, the Recycling-oriented Society Taskforce, and the Taskforce for Coexistence with Nature.

Environmental Education

We provide training opportunities to raise employees’ awareness about environmental conservation, learn the knowledge necessary for accomplishing our environmental goals, and gain the expertise to deal with emergencies. These opportunities include briefing sessions about environmental law, which are provided by the ISO Promotion Office, workshops for training the auditing team, and an assortment of training provided by each corporate division. In fiscal 2022, we focused on educating employees about Japan’s Air Pollution Control Act, which has toughened the obligations for preventing asbestos dispersal. Consequently, we saw higher attendance numbers for the sessions on environmental goals and regulation.

Education and training category	Number of attendees
	2020	2021	2022
General environmental education	2,708	2,561	2,611
Briefings on environmental targets and legislation	162	372	1,711
Accident/emergency response drills	211	325	234
Training for internal audit team	96	30	17
Other training	7	744	68
Total	3,184	4,032	4,641

Internal (first- and second-party) auditing and third-party auditing

Internal audits (first- and second-party audits) are performed to ensure conformity across our corporate group, with a focus on legal compliance. In first-party audits, the auditee (a group company) performs the audit on itself. In second-party audits, our ISO Promotion Office performs the audit on the auditee. In 2022, first-party audits were performed from July 1 to September 8, second-party audits were performed from August 1 to September 12, and third-party (ISO 14001) audits were performed from December 5 to 9. The first- and second-party audits identified 26 instances requiring corrective action. The most common of the issue (there were seven such instances) concerned operations management.

The third-party audit found no issues as such. However, compared to previous reports, the section on “opportunities for improvement” raised the bar for us, the auditor’s emphasis having shifted from evaluating compliance to evaluating the effectiveness of practices. Given the heightened expectations, we must toughen the operational side and take actions to enhance internal auditing. Such actions will include interdepartmental auditing and making the first- and second-party auditing as transparent as possible.

The third-party audit highlighted as a “good aspect” our projects for promoting biodiversity. One example is the award-winning Yui-no-Mori Project. Another is Mie plant’s success in greenifying its vicinity, which earned the plant an award. The third-party audit in 2022 was a surveillance audit.

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  ISO14001 audit
  (KOKUYO Osaka Office WS)

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  ISO14001 audit
  (KOKUYO Tokyo Shinagawa Office)

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  ISO14001 audit
  (KOKUYO Mie Plant)

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  ISO14001 audit
  (KOKUYO Logitem Tokyo DC)

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  ISO14001 audit
  (KOKUYO Logitem Sapporo DC)

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  ISO14001 audit
  (KOKUYO Product Shiga)

Overview of Third-party Reviews of Environmental Performance Data

Our environmental reporting was independently reviewed and certified by Bureau Veritas Japan for the purpose of receiving independent feedback on the accuracy, transparency, consistency, validity, and completeness of the reporting. In its third-party review, Bureau Veritas Japan reviewed environmental performance data and scope 3 emissions data pertaining to the 31 organizations that make up KOKUYO Group.*1 It also visited workplaces to see how data was being measured and managed. Three Japanese workplaces were visited: KOKUYO’s Hokuriku sales office, KOKUYO MVP’s Tottori plant, and KOKUYO Supply Logistics’ Ibaraki distribution center. One overseas workplace was visited: KOKUYO Camlin’s Patalganga plant). The review identified 11 excellent aspects and 12 opportunities for improvement. It also identified 38 issues requiring corrective action and seven opaque aspects requiring better transparency. During the review period, we rectified the issues and clarified the opaque aspects. The review commended our approach to measuring and collecting data, while highlighting certain areas for improvement, such as the need to correct weighing scales and clarify review approaches. In light of the issues raised, we will work harder to improve the accuracy and precision of disclosures both internally and throughout our supply chains.

Third-party audit certificate

Year	2020	2021	2022
Excellent aspects	8	8	11
Opportunity for improvement	11	10	12
Issue requiring corrective action	42	43	38
Aspect requiring better transparency	13	0	7

Third-party audit of environmental performance data at KOKUYO Supply Logistics’ Ibaraki distribution center

The review covered data reporting from the following organizations