Environmental Management and Third-party Assurance

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Environmental Management and Third-party Assurance together with the Global Environment

KOKUYO recognizes that environmental problems, including global warming and the reduction of forest resources, are pressing issues. We will bring together the best business brains to develop sustainable solutions.

The Group’s Vision for the Environment

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.

Environmental principles

KOKUYO was founded with the vision to enrich the world through our products and services. An enriched world is a sustainable world. Such a world requires global action to fight climate change, conserve scarce resources, and protect biodiversity. To play a leading role in this perennial worldwide challenge, we will bring together the best business brains to develop sustainable solutions.

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.

Material Issue		Outcome	2030 Challenge Goal	2024 Commitment Goal
Safeguard the planet as a place for work and life	Material issue 3 Response to the Climate Crisis	Our collaboration with partners contributes toward carbon neutrality throughout our supply chains.	We are working with partners to achieve carbon emissions reductions targets based on the Science Based Targets initiative (SBTI).	Reduce CO2 emissions: Reduce CO2 emissions in Japan by 50% compared to 2013
	Material issue 4 Contribution to a Recycling-oriented Society	Our collaboration with partners and customers leads the way toward a zero-waste society by reducing, reusing, and recycling.	Over 16% of the Japanese population participates in our programs for building a circular economy, creating positive behavioral changes in society.	100% of new products based on the recycling-oriented design guidelines
			We conduct numerous experiments for a circular economy, encouraging more companies to commit.
	Material issue 5 Contribution to a Society That Coexists with Nature	We safeguard the planet by balancing business activities with natural capital.	We now disclose our carbon footprint and actions to minimize it, encouraging an eco-friendly attitude in the market.	-

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*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

Reference: This is how we performed in 2021

C0₂ reduction target	CO₂ emissions in 2013	2030 target	2021 result	Change from 2013 level
Emissions down by 26% from 2013 level by 2030	30,683t-CO₂	22,705t-CO₂	23,720t-CO₂	Down 22.7%
Use forests to offset CO₂ emissions
Forests thinned at about 150 hectares and contributing to absorption of at least 6,000 tons of CO2 a year		Thinned area: 111.9 / CO2 absorption: 5,368 t-CO ₂

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Environmental Management System

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 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.

Environment-related documents are managed under a system called MELON. In a July 2013 upgrade, MELON’s coverage was expanded and the system was made more user-friendly, efficient, and accurate. We have an environmental management system to which we have added our overseas business division that is responsible for the operation and management of our overseas business, Actus interior retail business and special subsidiary of Heartland from 2022. The aim of doing so is to tackle environmental problems that are diversifying and becoming more complicated in Japan and overseas.

Environmental Education

To educate employees about environmental issues, inform them about the environmental targets, and train them in accident/emergency responses and management protocols, the ISO Promotion Office organizes briefings on environmental legislation and provides training to members of the internal audit team.

Training employees to respond to spills (KOKUYO MVP)

Education/training category	Number of attendees
Education/training category	2019	2020	2021
General environmental education	1,891	2,708	2,561
Briefings on environmental targets and legislation	367	162	372
Accident/emergency response drills	232	211	325
Training for internal audit team	56	96	30
Other training	192	7	744
Total	2,738	3,184	4,032

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First-, second-, and third-party audits

First-, second-, and third-party audits are performed to ensure conformity across our corporate group. 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 third-party audits, an independent body performs the audit in compliance with the requirements of ISO 14001. The audits focus most of all on legal compliance. In 2021, first-party audits were performed from July 1 to August 6, second-party audits were performed from August 17 to September 17, and third-party audits were performed from November 30 to December 10. There were 38 issues identified in internal audits. Of those, the most were in relation to waste matter with nine such issues identified. However, we believe that this is a result of an increasing ability to internally detect defects and to then take improvement and corrective measures against them by ourselves.
There were no issues identified in the ISO14001 audit, but the focus of that audit has shifted from planning aspects to operational aspects in terms of opportunities for improvement. This means there are an increasing number of areas for which there are even higher expectations. Therefore, in addition to strengthening operational aspects, we feel it is necessary to consider implementation methods to ensure the internal audits that check those operational aspects will function even better. Those methods include conducting mutual audits across departments and conducting first-party audits as openly as possible. We started the ReEDEN Project that has been commended by those outside our company and received the highest number of good points in the ISO14001 audit since undergoing the audit to transition to the 2015 version in December 2016. The ISO14001 audit in 2021 was a renewal audit.

Year	2019	2020	2021
Sites audited	118	74	77
First-party audit	61	59	61
Second-party audit	16	15	16
Extraordinary audit	41	-	-
Issues identified	83	48	38
Minor nonconformity	25	13	14
Corrective action	58	35	24

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Year	2019 (Periodic)	2020 (Periodic)	2021 (Periodic)
Sites audited	17	20	21
Excellent aspect	1	1	0
Good aspect	5	2	16
Minor nonconformity	0	0	0
Opportunity for improvement	21	26	32

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Internal audit
(KOKUYO Mie Plant)

ISO14001 audit
(KOKUYO Osaka Office WS)

ISO14001 audit
(KOKUYO Tokyo Shinagawa Office)

ISO14001 audit
(KOKUYO MVP Tottori Plant)

ISO14001 audit
(KOKUYO Logitem Okayama DC)

ISO14001 audit
(KOKUYO Shibayama Plant)

Overview of Third-party Reviews of Environmental Performance Data

We underwent a third-party review by Bureau Veritas Japan to receive opinions from an independent standpoint regarding the accuracy, transparency, consistency, validity and completeness of the environmental performance data (environmental burden data and Scope 3) of 31 companies*1 in the KOKUYO Group. It also visited workplaces to see how data was being measured and management. Three Japanese workplaces were visited: KOKUYO Tokyo Shinagawa SST Office, KOKUYO Product Shiga and KOKUYO Logitem Ina DC. One overseas workplace was visited: the Shanghai Plant of KOKUYO Commerce (Shanghai). The review identified eight excellent aspects and 10 opportunities for improvement. It also identified 43 issues requiring corrective action. During the review period, we rectified the 43 issues.
The review found that there are some sites where underlying materials are appropriately filed and where data transparency is secured. Nevertheless, it also identified some sites where there are omissions in the registration of data and where the basis of calculations is not clear. 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 in the future.

Year	2019	2020	2021
Excellent aspects	12	8	8
Opportunity for improvement	11	11	10
Issue requiring corrective action	38	42	43
Aspect requiring better transparency	17	13	0

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Environmental performance data
third-party review
(KOKUYO Product Shiga)

Environmental performance data
third-party review
(KOKUYO Logitem Ina DC)

Environmental performance data
third-party review
(KOKUYO Tokyo Shinagawa SST Office)

*1 The review covered data reporting from the following organizations:

	Consolidated subsidiaries	Affiliates
Japan	KOKUYO Co., Ltd.	KOKUYO K Heart Co., Ltd., Heartland Co., Ltd., IWAMI Paper Industry Co., Ltd., KOKUYO Hokkaido Sales Co., Ltd., KOKUYO Tohoku Sales Co., Ltd., KOKUYO Kitakanto Sales Co., Ltd., KOKUYO Tokai Sales Co., Ltd., KOKUYO Hokuriku-Niigata Sales Co., Ltd. , KOKUYO Sanyo-Shikoku Sales Co., Ltd.
Japan	Kaunet Co., Ltd., KOKUYO Marketing Co., Ltd., KOKUYO Supply Logistics Co., Ltd., KOKUYO Logitem Co., Ltd., KOKUYO Product Shiga Co., Ltd., KOKUYO MVP Co., Ltd., LmD International Co., Ltd., Actus Co., Ltd., KOKUYO Finance Co., Ltd, KOKUYO & Partners Co., Ltd.
Overseas	KOKUYO Vietnam Co., Ltd., KOKUYO Malaysia Sdn. Bhd., KOKUYO (Shanghai) Management Co., Ltd., KOKUYO Commerce (Shanghai) Co., Ltd., KOKUYO Furniture (China) Co., Ltd., KOKUYO Design Consultants (Shanghai) Co., Ltd., KOKUYO International Asia Co., Ltd., KOKUYO International (Malaysia) Sdn. Bhd., KOKUYO Vietnam Trading Co., Ltd., KOKUYO CAMLIN Ltd.	KOKUYO-IK (Thailand) Co., Ltd.

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Environmental Management and Third-party Assurance