SUPPLY CHAIN MANAGEMENT

KOKUYO Group Sustainable Procurement Policy

To ensure that the earth and society remain sustainable, the Kokuyo Group will strive to build mutual understanding and trust with our supply chain partners with shared understanding of the Kokuyo Group’s value of co-creation with empathy, work together to fulfill our social responsibilities, and continue contributing to social development.

1. 1.
   Quality management
   By providing products and services that enrich “work, learning and living,” we will continue to respond to the trust of customers and pursue customer satisfaction. We will conduct comprehensive risk management and provide accurate product and service information.
2. 2.
   Respect for human rights
   The Group understands the culture and business customs of various countries and regions and aims for a society where the rights of all people are respected.
   The Group does not permit unfair discrimination or child and forced labor. Moreover, the Group does not conduct transactions with companies, groups, or other entities that engage in such practices.
   The Group does not allow sexual harassment, power harassment, bullying, or other such violations of human rights.
3. 3.
   Health and safety
   We will comply with health and safety related laws and regulations including the Industrial Safety and Health Act.
   We will pay appropriate wages and allowances, provide welfare programs, properly conclude labor agreements, comply with applicable laws and regulations, and protect the rights of workers.
   We will encourage continuous and self-initiated workplace improvement and strive to prevent occupational accidents and illness.
4. 4.
   Environmental preservation
   The Group takes environmental protection initiatives on a global scale, and by actively participating in communities and acting as a good corporate citizen, seeks to create mutually beneficial relationships with society.
   The Group respects and observes environment-related laws, and in all its activities, takes initiatives to protect the environment. Moreover, the Group conducts activities that give consideration to the natural environment and biodiversity.
5. 5.
   Fair trade
   We will establish and implement an appropriate system for internal control to obtain logical assurance that we are achieving the four goals of effectiveness and efficiency in operations, reliability of reports, compliance with laws and regulations related to our business activities, and the maintenance of assets.
   When engaging in procurement, we will comply with the applicable laws, regulations, treaties, and so on in each country and region and follow industry standards and international norms (including standards formulated by the KOKUYO Group).
   We will take a firm stand and not accede to any improper demands made by criminal organizations that threaten the good order and safety of civil society. Furthermore, we will not have any business dealing with such organizations.
   We will respect the rights of trading partners, take action to prevent all corruption including extortion and bribery, and will practice sound, proper, and fair trade.
6. 6.
   Information security
   We will properly manage confidential corporate information including sales, technical, and management information as well as personal information and prevent loss and leaks of information.
   We will not engage in insider trading including trading of the shares of our own company or affiliated companies based on non-public material inside information and will not engage in any conduct that induces insider trading.

KOKUYO Group Sustainable Procurement Standards

To ensure that the earth and society remain sustainable, the KOKUYO Group establishes these KOKUYO Group Sustainable Procurement Standards as a statement of what we want to achieve in collaboration with trading partners based on the KOKUYO Group Code of Conduct and KOKUYO Group Sustainable Procurement Policy. We also ask our trading partners to ensure that the requirements stated below are implemented, and that they in turn seek their trading partners’ understanding of the KOKUYO Group Sustainable Procurement Standards and promotion of the requirements therein.

1. 1.
   Quality management
   By providing products and services that enrich “work, learning and living,” we will continue to respond to the trust of customers and pursue customer satisfaction. We will conduct comprehensive risk management and provide accurate product and service information.

   1. 1-1
      Ensuring product safety
      We will fulfill our responsibilities as a supplier by designing, manufacturing, and selling products that satisfy safety standards established by the laws and regulations of each country and ensuring adequate product safety.
   2. 1-2
      Quality management
      We will comply not only with applicable laws and regulations relating to product and service quality, but also KOKUYO Group quality standards and customer requirements.
   3. 1-3
      Provision of accurate product and service information
      We will appropriately disclose information relating to our business activities, product quality and safety, and so on and will strive to understand and provide product and service information in response to requests from stakeholders.
   4. 1-4
      Management of the risk of disasters and other risks
      We will create risk management systems during normal times and provide stable supplies of products to customers.
2. 2.
   Respect for human rights
   We understand the culture and business customs of various countries and regions and aim for a society where the rights of all people are respected. We will not permit unfair discrimination or child and forced labor. Moreover, we will not conduct transactions with companies, groups, or other entities that engage in such practices. We will not allow sexual harassment, power harassment, bullying, or other such violations of human rights.

   1. 2-1
      Prohibition of child labor and forced labor
      We will not permit unfair discrimination or child and forced labor. Moreover, we will not conduct transactions with companies, groups, or other entities that engage in such practices.
   2. 2-2
      Prohibition of sexual harassment, power harassment, and discrimination
      We will not allow sexual harassment, power harassment, bullying, or other such violations of human rights. Furthermore, we will give appropriate consideration to requests from workers relating to religious practices.
   3. 2-3
      Freedom of association and right to collective bargaining
      We will comply with local laws and regulations and respect the right of workers to organize as a means of conducting labor-management discussions regarding working environments, wage levels, and other issues.
3. 3.
   Health and safety
   We will comply with health and safety related laws and regulations including the Industrial Safety and Health Act. We will pay appropriate wages and allowances, provide welfare programs, properly conclude labor agreements, comply with applicable laws and regulations, and protect the rights of workers. We will encourage continuous and self-initiated workplace improvement and strive to prevent occupational accidents and illness.

   1. 3-1
      Occupational health and safety
      We will give due consideration to employee health and safety and strive to create comfortable workplaces.
   2. 3-2
      Consideration for work hours
      We will not require workers to work in excess of the limits set by laws and regulations in the regions where they work. Furthermore, we will appropriately manage workers’ work hours and days off with due consideration for international standards.
   3. 3-3
      Appropriate wages and allowances
      We will comply with all applicable laws and regulations concerning compensation (including minimum wages, overtime pay, and allowances and deductions from wages required by law) paid to workers. We will also take into consideration wage levels that can provide for the necessities of life (living wages).
   4. 3-4
      Responses to emergency situations
      To prepare for emergency situations such as disasters and accidents that could harm human life and physical safety, we will identify such emergency situations including the likelihood of occurrence, prepare action procedures for emergency measures that will minimize harm to workers and assets, install necessary facilities and so on, and conduct education and training so that action can be taken in the event of a disaster.
   5. 3-5
      Occupational accidents and occupational illnesses
      We will identify, assess, record, and report on the status of occupational accidents and occupational illnesses and take appropriate countermeasures and remedial measures.
   6. 3-6
      Industrial safety
      We will identify, assess, and appropriately manage the risk of worker exposure to harmful biological, chemical, and physical effects in the workplace.
   7. 3-7
      Consideration for work that imposes physical burdens
      We will identify and assess work that imposes physical burdens on workers and appropriately manage such work so that it does not lead to occupational accidents or occupational illnesses.
   8. 3-8
      Safety measures for machinery and equipment
      We will assess whether there are any safety-related risks concerning machinery and equipment that workers use in their work and take appropriate safety measures.
   9. 3-9
      Facility health and safety
      We will appropriately ensure health and safety in facilities provided for workers (dormitories, cafeterias, bathrooms, etc.).
   10. 3-10
       Health and safety communication
       We will provide education and training on appropriate health and safety information regarding the various hazards that workers may be exposed to while working using language and methods that workers can understand and establish systems for workers to provide feedback concerning their safety-related opinions.
   11. 3-11
       Worker health management
       We will perform appropriate health management for all employees.
4. 4.
   Environmental preservation
   The Group takes environmental protection initiatives on a global scale, and by actively participating in communities and acting as a good corporate citizen, seeks to create mutually beneficial relationships with society.
   The Group respects and observes environment-related laws, and in all its activities, takes initiatives to protect the environment. Moreover, the Group conducts activities that give consideration to the natural environment and biodiversity.

   1. 4-1
      Reduction of energy consumption and greenhouse gas emissions
      We will strive to improve energy efficiency and take measures to continuously reduce our energy consumption as well as greenhouse gas emissions across our entire supply chain.
   2. 4-2
      Atmospheric emissions
      We will implement appropriate measures to reduce atmospheric emissions of harmful substances.
   3. 4-3
      Water management
      We will appropriately manage the impact of water intake and discharge on the surrounding natural environment. To do this, we will monitor the use and release of water and strive to conserve water. Before wastewater is discharged or disposed of, we will monitor, control, and process it and we will identify sources of pollutants that could cause water contamination and appropriately manage them.
   4. 4-4
      Preservation of biodiversity
      We will strive to conserve the raw materials used in our business and preserve biodiversity in the regions where we conduct business.
   5. 4-5
      Effective use of resources and waste management
      We will promote the 3Rs (reduce, reuse, recycle) and strive to effectively use resources and curtail the generation of waste.
   6. 4-6
      Management of chemical substances
      We will identify, label, and manage chemical substances and other materials that pose risks to people and the environment and manage them to ensure safe handling, transportation, storage, use, recycling or reuse, and disposal.
   7. 4-7
      Management of chemical substances in products
      We will comply with applicable laws and regulations and customer requirements concerning the prohibition or restriction of use of specific substances in products.
   8. 4-8
      Social contribution
      We will actively participate in social, educational, and cultural support initiatives, interaction with local communities, beautification programs, volunteer programs, and so on.
5. 5.
   Fair trade
   We will establish and implement an appropriate system for internal control to obtain logical assurance that we are achieving the four goals of effectiveness and efficiency in operations, reliability of reports, compliance with laws and regulations related to our business activities, and the maintenance of assets.
   When engaging in procurement, we will comply with the applicable laws, regulations, treaties, and so on in each country and region and follow industry standards and international norms (including standards formulated by the KOKUYO Group). We will take a firm stand and not accede to any improper demands made by criminal organizations that threaten the good order and safety of civil society. Furthermore, we will not have any business dealing with such organizations. We will respect the rights of trading partners, take action to prevent all corruption including extortion and bribery, and will practice sound, proper, and fair trade.

   1. 5-1
      Compliance
      We will comply strictly with national and regional laws and regulations, social norms, and corporate ethics and strive to educate employees.
   2. 5-2
      Fair and transparent trade
      We will conduct fair and transparent trade that respects free competition. Furthermore, we will not use our status as the buyer to demand money, goods, or special treatment from trading partners.
   3. 5-3
      Prohibition of dealings with criminal organizations
      We will take a firm stand and not accede to any improper demands made by criminal organizations that threaten the good order and safety of civil society. Furthermore, we will not have any business dealing with such organizations.
   4. 5-4
      Protection of intellectual property rights
      We will protect intellectual property rights and not engage in any improper use.
   5. 5-5
      Prohibition of conflicts of interest
      We will not engage in any conduct where officers or employees use their status to gain personal benefit contrary to the proper interests of the company.
   6. 5-6
      Protection of whistleblowers
      We will protect the confidentiality of information relating to whistleblowing and the anonymity of whistleblowers and eliminate any retaliation against whistleblowers.
   7. 5-7
      Prohibition of insider trading
      We will not engage in insider trading including trading of the shares of our own company or affiliated companies based on non-public material inside information and will not engage in any conduct that induces insider trading.
   8. 5-8
      Responsible minerals procurement
      We will not procure minerals—such as tantalum, tin, tungsten, and gold—used in the products that we manufacture if it is found that they cause or contribute to any serious human rights violations, environmental destruction, corruption, conflict, and so on in conflict and high-risk regions.
   9. 5-9
      Ensuring reliability of reports
      We will ensure the reliability of reports (including nonfinancial information) and will not tolerate the falsification of records or significant misrepresentations in applications, reports, and such.
6. 6.
   Information security
   We will properly manage confidential corporate information including sales, technical, and management information as well as personal information and prevent loss and leaks of information. We will not engage in insider trading including trading of the shares of our own company or affiliated companies based on non-public material inside information and will not engage in any conduct that induces insider trading.

   1. 6-1
      Defense against cyber attacks
      We will take defensive measures against cyber attacks and other threats and conduct management to prevent harm to the company and others.
   2. 6-2
      Protection of personal information
      We will comply with relevant laws and regulations relating to and appropriately manage and protect all personal information including the personal information of suppliers, customers, consumers, and employees.
   3. 6-3
      Prevention of leaks of confidential information
      We will appropriately manage and protect not only our own confidential information, but also confidential information received from customers and third parties.

KOKUYO Group Responsible Minerals Procurement Policy

The KOKUYO Group's purpose statement is "Presenting a tomorrow you can't wait for." By solving material issues and creating social impact through our business activities, we seek to create a self-directed, collaborative society where diverse people mutually enhance each other's creativity and continue to solve social issues while feeling their own sense of satisfaction.

The mining and trading of minerals in conflict and high-risk regions around the world may lead to issues, including forced labor, child labor, and other human rights violations as well as environmental destruction. The profits obtained through mining and trading of minerals in these regions may also become funding for armed forces. The use of minerals from these regions may help contribute toward conflict, human rights violations, environmental destruction, and so on.

The KOKUYO Group recognizes problems with such minerals as a key social issue and has formulated the KOKUYO Group Responsible Minerals Procurement Policy to undertake responsible minerals procurement that does not use minerals that are related to conflict, human rights violations, and such.

1. 1.
   The KOKUYO Group undertakes responsible minerals procurement while referencing the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
2. 2.
   The KOKUYO Group will not procure minerals—such as tantalum, tin, tungsten, and gold—used in the products that we manufacture if it is found that they cause or contribute to any serious human rights violations, environmental destruction, corruption, conflict, and so on in conflict and high-risk regions.
3. 3.
   In line with the purpose of this Policy, we will also ask the trading partners of the KOKUYO Group to undertake responsible minerals procurement.