To Proterial Group Procurement Partners

Proterial Group
Sustainable Procurement Guidelines

January 2023

(1st Edition)

Proterial, Ltd.
Procurement Division1

Contents
1.

Proterial Group Policies and Initiatives ................................... 4

1-1. Proterial Group Policies ......................................................................... 4
1-2. Proterial Group Procurement Initiatives ............................................. 11

2. Proterial Group Supplier Code of Conduct .............................. 12
A. Labor ....................................................................................................... 12
B. Health and Safety .................................................................................... 15
C. Environment ............................................................................................ 17
D. Business Ethics ...................................................................................... 19
E. Management System ............................................................................... 21
F. Product Quality and Safety ..................................................................... 23
G. Prevention of Personal and Confidential Information Leakage ............ 23

3. Revision History ........................................................................ 25

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These Guidelines were established based on Proterial Group’s various policies,
initiatives, widely recognized global standards, and other references. (*)(*) References:-

United Nations Universal Declaration of Human Rights
https://www.un.org/en/about-us/universal-declaration-of-human-rights
United Nations Guiding Principles on Business and Human Rights
https://www2.ohchr.org/english/bodies/hrcouncil/docs/17session/A.HRC.17.31_en.pdf
OECD Guidelines for Multinational Enterprises
https://www.oecd.org/daf/inv/mne/48004323.pdf
OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas
https://www.oecd.org/corporate/mne/mining.htm
ISO 9000（QUALITY MANAGEMENT）
https://www.iso.org/iso-9001-quality-management.html
ISO 14001（ENVIRONMENTAL MANAGEMENT）
https://www.iso.org/iso-14001-environmental-management.html
ISO 45001（Occupational health and safety）
https://www.iso.org/iso-14001-environmental-management.html
RBA（Responsible Business Alliance）Code of Conduct 7.0（2021）
https://www.iso.org/iso-14001-environmental-management.html
JEITA（Japan Electronics and Information Technology Industries Association）
The Guideline (2020）*Currently Japanese only
https://www.jeita.or.jp/japanese/pickup/category/2020/200331.html

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1.

Proterial Group Policies and Initiatives

1-1. Proterial Group Policies
A-1. Corporate Philosophy

MissionVisionValuestriving for the highest standards in our originaltechnologies, products , processes, and people,
e ill bring ne levels of value to customers
all around the orld.

Through the creation of bestin class materials ,to be a company that solves individual customer
issues and contributes to the prosperity andvitality of all.

e earn the trust of our customers and otherstakeholdersby being honest and sincere
in our daily activities and by understanding
our obligation to the people and communities
e serve.

cross our organi ation, e respect diversity
and the free and independent e changeof opinions, learn from each other, andcollaborate to achieve our common goal.

A-2. Proterial Group Code of Conduct
Always Act with Integrity
The corporate philosophy of the Proterial Group promotes our Mission: “Make the best
quality available to everyone;”, Vision: “Leading sustainability by high performance;”, andValues: “Unfaltering integrity” and “United by respect”.
The “Proterial Group Codes of Conduct” provides support to the officers and employees
in their decision making and stipulates the actions they should take to realize thiscorporate philosophy and to fulfill our social responsibilities.
The officers and employees of the Proterial Group pledge to fully understand andcomply with the Proterial Group Codes of Conduct, and to always base their actions on
the principle of integrity.
1. A Company that Contributes to Society(1) We will contribute to resolving social issues by promoting innovative solutions,accelerating collaborative creation with partners and stakeholders, and further
integrating social and environmental responsibility into our business activities. We
will strive to develop technologies that contribute to social development and use themwith due consideration of their impact on society.
4(2) We will strive to develop technologies that contribute to social development and use
them with due consideration of their impact on society.
(3) We envision a decarbonized society, a resource-recycling society, and an ecosystempreservation society. To this end, we will endeavor to reduce CO2 emissions, usewater and other resources efficiently, and minimize impacts on natural capitalthroughout our value chain.
As a corporate citizen, we will make efforts to build rapport with communities andcontribute to their development by working together to resolve social issues.
2. Sincere and Fair Business Activities
2.1 Fair Trading(1) To ensure fair and open competition, we will observe the fundamental rules of trade,including domestic and overseas competition laws and regulations, and act incompliance with legislation and sound corporate ethics.
(2) We will have no relationship whatsoever with antisocial forces anywhere in the world,and resolutely reject involvement in improper or antisocial transactions.
(3) Should we become aware of business-related information that could possibly
correspond to undisclosed important information (insider information) concerningbusiness partners, including customers and procurement partners, we will not leakthis information to any third parties or trade the shares of said business partners until
the information is officially disclosed.
(4) We strictly prohibit and will not be involved in illicit acts including bribery, corruption
or money laundering. We will neither give or receive gifts nor extend or accept
invitations to business entertainment beyond socially accepted limits, as we
recognize that such practices can foster corruption. When working with politicalentities, we will build and maintain sound and transparent relationships.
(5) We will help maintain international peace and security through compliance with allapplicable laws and regulations concerning import and export and will operate
appropriately according to our internal rules and policies.
(6) We will comply with applicable laws, respect social cultures and practices, and act
sincerely and fairly in countries and regions where we have operations. Furthermore,
we will do so guided by international norms and standards even in areas where
legislation is not adequately enforced.
2.2 Relationships with Procurement Partners(1) With a global vision, and mindful of the long-term perspective, we will find qualified
procurement partners and build fair, equal and close partnerships with them, working
together to build mutual understanding and trust.
(2) In selecting procurement partners, we will thoroughly review the quality, reliability,
delivery time, and price of the materials they provide as well as their businessstability and technological capability. We will give due consideration to their adoptionof social responsibility practices, including the abolishment of human right
infringements and unfair discrimination, and environment-related initiatives.
5(3) We will not accept any personal benefits from procurement partners in procurementtransactions.
2.3 Relationships with Customers(1) We will provide products and services that meet the needs and requiremen ts of ourcustomers, complying with relevant laws and standards and ensuring quality andsafety by setting additional standards of our own when necessary.
(2) We will communicate with customers sincerely, address defects and customer
complaints quickly and in good faith and strive to determine causes in order toeliminate them and prevent recurrence.
(3) In the event we are unable to, or there is a possibility that we are unable to, fulfill the
specifications required by the customer, we will promptly communicate the facts tothe customer, consult with them, and address the situation in good faith .
3. Respect for Human Rights(1) We will promote our understanding of internationally recognized human rights andwill respect and not infringe on the human rights of all those involved in the businessactivities of the Proterial Group.
(2) We will implement human rights due diligence appropriate to the social
circumstances of the countries and regions where we have operations and the natureof our businesses, products, and services there.
(3) We will assess and prevent potential violations of human rights. In the event of sucha violation, we will promptly take internal and external actions to correct and remedy
the situation.
(4) We will respect individual human rights in the recruitment and treatment of
employees and during all other company activities. We will not engage in any actsthat may impair individual dignity or discriminate on bases such as sex, sexual
orientation, age, nationality, race, ethnicity, ideology, belief, religion, social status,
family origin, disease, disability.
(5) We will hire employees in compliance with the relevant laws and regulations in eachcountry and region, and in accordance with international norms and standards. We
will not use child labor that employs children below the minimum working age orforced labor that is against the will of employees.
(6) We will strive to resolve issues through sincere and constructive discussion between
management and employees, in compliance with the laws, regulations, and labor
practices of each country and region, and in accordance with international norms andstandards.
4. Building a Work Environment That Brings Out Employee Strengths(1) Prioritizing health and safety above all else, we will strive to ensure the safety of
employees and the workplace. In addition, we will promote the physical and mental
health of employees and their families.

6(2) We will support flexible work styles and respect diverse values, creating workplaces
that provide employees with a sense of accomplishment and personal growth, andwe will promote the sustainable growth of the organization and individuals.
(3) We will invest in educational programs to help employees expand their capabilities
and exercise their strengths. Supervisors will fairly and appropriately support, guide,
and educate their employees to develop their abilities.
5. Information Management and Communication(1) We will promote the ethical handling of information, to ensure respect for humanrights and security, through the proper management of personal information based on
our Personal Information Protection Policy.
(2) We will properly manage and protect confidential information related to our businessactivities in compliance with domestic and international laws and regulations as wellas our internal rules and policies.
(3) In order to maintain and e pand our trusting relationship ith the Proterial Group’s
diverse stakeholders, we will actively disclose information, and respond to
stakeholders responsibly through dialogue and other means of communication.
6. Protection of Intellectual Property and Brand(1) We will protect our own intellectual property, respect third-party intellectual property,
and use both effectively for smooth business operations.
(2) We will manage our own and third-party confidential information by importance andmanage and handle it appropriately based on this ranking.
(3) We will protect and enhance the value of the Proterial Brand, recognizing it as animportant management asset.
7. Securing Corporate Assets
We will use all our corporate assets only for business activities and other appropriate
purposes and manage them properly to protect their value.
8. Risk Management
We will actively forecast risks that will impact business activities, and implement
necessary measures to prevent, avoid and alleviate the emergence of these risks. We
will make concerted efforts throughout the Proterial Group to secure employee safety
and business continuity in case of disasters and threats such as earthquakes, tsunamis
and floods, cyberattacks, and terrorism.
9. Responsibilities of Employees
Employees shall pledge to act honestly in compliance with the Codes of Conduct andbased on integrity. If they become aware of any non-compliant activity, they shallimmediately report to their manager, the related department or via the internal reporting
system.
10. Rresponsibilities of Officers
Officers shall take the initiative to comply with the Codes of Conduct and make theirbest efforts to conduct business based on integrity, corporate ethics and the law. In the7event of violation of the Codes of Conduct, top managers shall swiftly take corrective
measures and actions to prevent the recurrence of similar incidents, while at the sametime strictly disciplining themselves as well as those involved in the violation .

Supplementary Provisions to the Proterial Group Codes of Conduct
The Proterial Group Codes of Conduct shall apply to all officers and employees ofProterial, Ltd. and its consolidated subsidiaries.
Each subsidiary shall streamline its organizational structure and systems (e.g., internalreporting system, disciplinary system, etc.) to comply with the Proterial Group Codes ofConduct. In the event of any violation, disciplinary action shall be taken in accordancewith the related rules and internal procedures.
Established
Revised

September 17, 2010
January 5, 2023

A-3 Proterial Group Code of Ethics and Compliance・Proterial Group Compliance Program (PGCP)The Proterial Group has established the Proterial Group Compliance Program (PGCP)
based on the spirit of observing the highest level of ethical standards, complying withapplicable laws and regulations in all countries and regions where the Group operates its
businesses, and respecting fair business practices. Under this program, the Group will
make constant efforts to accomplish its mission under the highest standards of ethic s
and integrity.

A-4 Proterial Group Human Rights Policy
Proterial Group (hereinafter “Proterial”) ill continue to operate business in a sincere,
fair and transparent manner under its corporate philosophy. For the company’s fairbusiness operation, Proterial is committed to fulfill its responsibility to respect humanrights and not to be involved in operations and business relationship where human rights
are infringed.
1. The Responsibility to Respect Human Rights
Proterial strives to meet its responsibility to respect human rights by not infringing on
human rights and addressing negative human rights impacts with which the company
may be involved through its operations and business relationships. Proterial understands
human rights to be, at a minimum, those outlined in the International Bill of Human
Rights and the International Labor Organi ation’s Declaration on Fundamental Principles
and Rights at Work. The responsibility to respect human rights applies to all officers an demployees of Proterial and its consolidated subsidiaries.
8

Proterial expects its business partners and other parties whose own impacts may bedirectly linked to Proterial’ operations, products or services to respect and not infringe
upon human rights and will respond appropriately where they are not respecting humanrights.
2. Relationship to P
’V
P
Proterial is aware that as a business enterprise it is a member of society and cancontribute to creating an environment in which human rights are respected. Meeting the
responsibility to respect human rights is key to operating as a responsible business, andis accepted to be a baseline expectation for all companies. It is an expression of Good
Practice Guidance for Proterial Group Companies. This policy supplements the Code of
Conduct for Proterial Group Companies and CSR policy.
3. Implementing the Responsibility to Respect Human Rights
Proterial is committed to meeting the responsibility to respect human rights throughimplementing the UN Guiding Principles on Business and Human Rights.
Proterial adheres to national laws and regulations in each market in which it operates.
Where Proterial faces conflicts between internationally recognised human rights andnational laws, the company will follow processes that seek ways to honour the principles
of international human rights.
Where Proterial identifies that it has caused or contributed to a negative human rights
impact, the company will provide for or cooperate in legitimate processes to provide
remediation.
Proterial will provide appropriate training and capacity building in order to embed thispolicy commitment into all of its activities and to ensure human rights due diligence isunderstood and effectively implemented. Proterial is committed to engaging in dialogue
with and consulting relevant external stakeholders about addressing potential and actual
human rights impacts.

Formulated on December 12, 2013
Revised on January 5, 2023

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B-1 Proterial Group Policy Basic Stance on Materials Procurement
1. Open and Global Procurement
Our procurement activities shall be based on principle of free and open competition,
without consideration for nationality, corporate scale or past performance.
2. Fair and Impartial Transactions
The selection of Procurement Partners shall be based on fair and impartial evaluations,taking into consideration quality, price, deadline, technological capacity, businessreliability, service and other elements of economic logic. No employee shall accept gifts
or personal benefits from Procurement Partners.
3. Building Partnerships
Transactions with all Procurement Partners shall be done from a fair and equal position.
We shall make every effort to uphold and improve mutual understanding and relations oftrust from a long-term perspective so that we can build partnerships capable ofsupporting mutual growth and development on a sustained basis.
4. Legal Compliance
Our procurement activities shall comply fully with all relevant laws and regulations, andin accordance with existing social standards. These shall be no relationships with antisocial forces, which pose a threat to the safety and peace of society.
5. Consideration for Human Rights, Workplace Safety and HealthWe shall carry out our procurement activities with uncompromising regard for humanrights, workplace safety and health. Procurement partners shall likewise be required tomake firm commitments to upholding human rights, workplace safety and health.
6. Preservation of Confidential Information
The confidential information of procurement partners we acquire during procurement
activities shall be handled ith discretion equal to hoe treat our company’s o n
information. We shall not disclose this data to third parties or use it for any purpose otherthan what we have stated without the consent of the procurement partners in question.
7. Conservation of the Environment
We shall place priority on procuring materials from Procurement Partners devoted to theactive pursuit of environmental conservation, and on materials characterized by low
environmental loads.

10B-2 Proterial Group's policy for Responsible Supply Chain of Minerals
The Proterial Group is committed to responsible procurement activities as its policy toensure that the procurement of materials containing conflict minerals (tin, tantalum,
tungsten, and gold) and cobalt does not encourage the activities of armed groups,
human rights violations including child labor, corruption, and environmental destruction in
the conflict and high-risk regions.
The Group also respects the OECD Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and High-Risk Areas and conducts moredetailed investigations based on the Guidance while understanding social issues and the
expected roles of companies in the regions.
For its procurement partners, the Group ill continue to inquire into their minerals’country of origin and supply chains using the Conflict Minerals Reporting Template(CMRT) issued by the Responsible Minerals Initiative (RMI) and request its procurement
partners to procure minerals from smelters certified under RMI’s Responsible Minerals
Assurance Program (RMAP).

1-2. Proterial Group Procurement Initiatives
Proterial Group attaches great importance to sustainability in its value chains.
In dealings with its procurement partners, the Group commits itself thoroughly to
procurement activities based on its policies and codes of conduct introduced in “1 -1.
Proterial Group Policies.” The Group has formulated the Proterial Group's policy for
Responsible Supply Chain of Minerals to address the issue of materials containing
conflict minerals and is promoting responsible procurement activities based oninternational guidelines.
Proterial Group is advancing its initiatives with a strong belief that developing businessactivities with a focus on sustainability will lead to mutual prosperity for the ProterialGroup and its procurement partners. Proterial deeply appreciates its procurement
partners carefully reading and following these Guidelines with the above purposes in
mind.

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2. Proterial Group Supplier Code of Conduct
A. LaborYour company must uphold the human rights of workers and treat them with dignity andrespect as understood by the international community. This applies to all types ofworkers, including temporary staff, migrant workers, students, and direct employees.
(1) Recruitment and Employment of Workers
Your company must not use forced, bonded (including debt bondage) or indentured
labor, involuntary or exploitative prison labor, slavery, or human trafficking. This includes
transporting, harboring, recruiting, transferring, or receiving persons by means of threat,
force, coercion, abduction, or fraud for labor or services. Unreasonable restrictions mustnot be imposed on workers entering and exiting company-provided facilities (including, if
applicable, orker dormitories and living quarters) and orkers’ freedom of movement in
the facilities.
As part of the hiring process, your company must provide all workers with a written
employment agreement that includes employment terms and conditions stated in theirnative language or a language properly understood by them. Foreign migrant workers
must receive the employment agreement prior to departure from their home country, andno substitution or changes are permitted in the employment agreement upon arrival in
the destination country unless these changes are made to meet local laws and provide
equal or better terms. All work must be voluntary, and workers are free to leave work at
any time or terminate their employment without penalty or punishment if reasonable
notice is given as per their contract.
Your company must not retain or other ise destroy, conceal, or confiscate orkers’
identification certificates or immigration documents (government-issued identification,
passport, work visa, personal ID card, etc.). Employers are allowed to retain these
documents only if such retention is required by law, but even in this case, workers arealways allowed access to their documents.
Your company must not make workers bear recruitment fees or other expenses related
to their employment charged by employers’ agents or sub-agents. Any such costs foundto have been paid by workers will be refunded to the workers.
(2) Employment of Young Workers
Your company must not use child labor at any stage of manufacturing. The term “child”
refers to any person under the age of 15, under the age for completing compulsory
education, or under the minimum age for employment in each country, whichever ishighest. Your company must have an appropriate mechanism to verify the age of its
workers. Legitimate workplace learning programs are approved as long as they comply
with all laws and regulations. Workers under the age of 18 (young workers) are not to12engage in work, including night shifts and overtime, that may jeopardize their health orsafety.
Your company must ensure appropriate management of student workers by properly
maintaining their employment records, conducting rigorous due diligence of educational
partners, and protecting student orkers’ rights in accordance ith applicable la s andregulations. Your company must also provide all student workers with appropriate
support and training for their tasks. s for student orkers’ ages, in the absence of
local laws, the wage rates for student workers, interns, and apprentices will be at least
the same as those for other entry-level workers performing equal or similar tasks.
(3) Working Hours
Studies on business practices have revealed that overwork is clearly linked to lower
productivity, higher turnover, and a greater risk of injury and illness. Your company must
therefore ensure that working hours do not exceed the limit set by local laws. Further, thetotal weekly working hours, including overtime, must not exceed 60 hours or the legal
working hour limit, except in the case of emergencies or unusual circumstances. All
overtime work must be voluntary. Efforts must also be made to prevent workers frombeing overworked, and workers will be granted appropriate days off (at least one holiday
that complies with local laws or 24 consecutive hours of rest in any seven -day period,
whichever is longer).
(4) Wages and Benefits
Compensation paid to workers must comply with all applicable wage laws, including
those relating to minimum wages, overtime work, and legally mandated benefits. In
compliance with local laws, workers must be paid for overtime work at a rate higher thantheir regular hourly rate. Workers must be timely provided with easy-to-understand pay
slips that include sufficient information to verify accurate compensation for the work
performed during each payment period. All temporary, dispatch, and outsourced workers
are to be used within the limits of local laws.
(5) Humane Treatment of Workers
No workers will be subjected to harsh or inhumane treatment that includes violence,
gender-based violence, sexual harassment, sexual abuse, corporal punishment, mental
or physical coercion, bullying, public shaming, or verbal abuse; nor will there be thethreat of any such treatment. Your company must clearly define and communicate toworkers its disciplinary policies and procedures in support of these requirements.
(6) Non-Discrimination/Non-Harassment
Your company must be committed to a workplace free of harassment and unlawful
discrimination, and not engage in discrimination or harassment based on race, color,age, gender, sexual orientation, gender identity and expression, ethnicity or national
origin, disability, pregnancy, religion, political affiliation, union membership, veteranstatus, protected genetic information, or marital status in recruitment and employment
practices such as wages, promotions, rewards, and access to training opportunities.
13

Workers must be provided with reasonable accommodation for religious practices. In
addition, workers or potential workers must not be subjected to medical tests, including
pregnancy and virginity tests, or physical exams that could be used in a discriminatoryway.
(7) Freedom of Association
Your company must respect the right of all workers to form and join trade unions of theirown choosing, bargain collectively, and participate in peaceful assembly as well as theright to refrain from such activities in accordance with local laws. Workers and/or theirrepresentatives must be able to openly communicate and share their ideas and concernswith management regarding working conditions and management practices without fearof discrimination, reprisal, intimidation, or harassment.

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B. Health and Safety
Your company must recognize that a safe and healthy work environment enhances thequality of products and services, product consistency, and workforce stability and morale,
in addition to minimizing the occurrence of work-related injuries and illnesses. Your
company must also recognize that continuously providing information and education toworkers is essential to identify and resolve health and safety issues in the workplace.
Widely recognized management systems, such as ISO 45001 and the ILO Guideline on
Occupational Safety and Health Management Systems, may provide useful information toformulate corporate codes.
(1) Occupational Safety
Your company must identify and assess its orkers’ e posure to potential health andsafety hazards (chemical, electrical and other energy sources, fire, vehicles, and falls),
and mitigate the hazards using the Hierarchy of Controls. This approach includes
eliminating hazards, substituting processes and materials, controlling through proper
design, implementing engineering and administrative controls, preventive maintenance,and safety work procedures (including lockout/tagout), and providing ongoing
occupational health and safety training. When hazards cannot be controlled properly bythese means, workers must be given appropriate, well-maintained personal protective
equipment, and education on the risks related to these hazards must be provided
effectively in a language properly understood by workers. Appropriate measures mustalso be taken for pregnant women and nursing mothers, such as work reassignment toavoid serious hazards, eliminating or reducing occupational health and safety risks
involving their work assignment, and providing reasonable accommodation for nursing
mothers.
(2) Emergency Preparedness
Your company must identify and assess potential emergency situations and events, andminimize the impact by implementing emergency plans and response procedures,
including emergency reports, notification to employees, evacuation procedures, andtraining and drills for workers. Emergency drills must be conducted at least once a year
or as required by local laws, whichever is more stringent. Emergency measures include
appropriate fire alarm and suppression systems, visible and unobstructed exit routes,
facilities with appropriate emergency exits, contact information for emergency
responders, and recovery plans. These measures and procedures must focus on
minimizing harm to life, the environment, and property.
(3) Occupational injury and illness
Your company must have procedures and systems in place to prevent, control, track,and report occupational injuries and illnesses. These procedures and systems must
include provisions to encourage reporting from workers, classify and record injury andillness cases, provide the necessary medical treatment, investigate the cases in detail,implement corrective measures to eliminate the causes, and facilitate the orkers’ return
to work.
(4) Industrial HygieneYour company must identify, assess, and control orkers’ e posure to chemical,
biological, and physical agents based on the Hierarchy of Controls. If potential hazards
are identified, your company must seek opportunities to eliminate or reduce the hazards.
15

If elimination or reduction is not feasible, the hazards must be controlled through proper
design, and engineering and administrative controls. When hazards cannot be controlled
properly by these means, workers must be provided with and use appropriate, well maintained personal protective equipment free of charge. Protection programs must be
implemented continuously and include education on the risks associated with thesehazards.
(5) Accommodation for Physically Demanding WorkYour company must identify, assess, and control the risk of injury for workers engaged
in such work as manual material handling, physically demanding tasks, repetitive heavy
lifting, prolonged standing, and forceful assembly tasks in order to prevent problems fromoccurring.
(6) Machinery Safeguarding Measures
Your company must assess safety hazards of production and other machinery. Phy sicalguards, interlocks, and barriers must be installed and properly managed and maintained
where machinery poses an injury risk to workers.
(7) Sanitation, Food, and HousingYour company must provide workers with ready access to clean toilet facilities, pot able
water, and sanitary food preparation, storage, and eating facilities. Worker dormitories
provided by your company must be maintained in a clean and safe condition, and beequipped with appropriate emergency exits, hot water for bathing and showering, proper
lighting, heating, ventilation, individually secured accommodations for storing personaland valuable items, and reasonable personal space with easy access.
(8) Health and Safety Communication
Your company must provide appropriate workplace health and safety information andtraining on all identified workplace hazards (including, but not limited to, mechanical,
electrical, chemical, fire, and physical hazards) to workers in their native language or alanguage properly understood by them. Health and safety-related information must be
clearly posted in facilities or placed in locations identifiable and accessible to workers.
Training will be provided to all workers prior to the beginning of work and regularly
thereafter. Workers will be encouraged to raise health and safety concerns without
retaliation.

16

C. Environment
Your company must recognize that environmental responsibility is integral to the
manufacture of world-class products and identify the environmental impact ofmanufacturing activities and minimize the adverse effects on the community, theenvironment, and natural resources while safeguarding public health and safety. For
Proterial Group’s green procurement approaches, please refer to the Proterial Group
Green Procurement Guidelines.
(1) Environmental Permits and ReportingYour company must obtain, maintain, and update all required environmental permits(e.g., discharge monitoring), approvals, and registrations, and comply with theiroperational and reporting requirements.
(2) Pollution Prevention and Resource Reduction
Your company must minimize or eliminate pollutant emissions and waste generation at
the source by installing additional pollution control equipment, modifying production,
maintenance, and facility processes, or implementing other means. The use of natural
resources, including water, fossil fuels, minerals, and virgin forest products, must be
controlled through modifications of production, maintenance, and facility processes,
materials substitution, reuse, conservation, and recycling, or other means.
(3) Environmentally Hazardous Materials
Chemicals, waste, and other materials posing a hazard to humans, or the environment
must be identified, labeled, and managed to ensure their safe handling, movement,
storage, use, recycling or reuse, and disposal.
(4) Solid Waste
Your company must implement a systematic approach to identifying, managing,
reducing, and responsibly disposing of or recycling solid waste (non-hazardous).
(5) Air Emissions
Your company must characterize, routinely monitor, and control air emissions of volatileorganic chemicals (VOCs), aerosols, corrosives, particulates, ozone depleting
substances, and combustion byproducts generated from operations, and treat thesesubstances as required prior to discharge. Ozone depleting substances are to beeffectively managed in accordance with the Montreal Protocol and applicable regulations.
Your company must routinely monitor its handling of substances emitted into the air andthe performance of its air emission treatment systems.
(6) Materials Restrictions
Your company must comply with all applicable laws, regulations, and customer
requirements regarding the prohibition or restriction of specific substances in products
and during manufacturing, including labeling for recycling and disposal.
17

(7) Water Management
Your company must implement a water management program that documents,characterizes, and monitors water sources, use, and discharge, while seeking
opportunities to conserve water and controlling contamination routes. All wastewatermust be characterized, monitored, controlled, and treated as required prior to discharge
or disposal. Your company must routinely monitor its wastewater treatment systems andwater tanks to ensure optimal performance and regulatory compliance.
(8) Energy Consumption and Greenhouse Gas Emissions
Your company must establish a corporate-wide greenhouse gas reduction goal. Energy
consumption and all relevant Scope 1 and 2 greenhouse gas emissions must be tracked
and documented, and their comparisons with the reduction goal publicly reported. Your
company must seek ways to improve energy efficiency and minimize its energy
consumption and greenhouse gas emissions.
(9) Conservation of Biodiversity and Ecosystems
To conserve biodiversity and ecosystems that serve as the foundation for the survival ofboth humanity and business, your company must procure raw materials and productswith an awareness of their impact while keeping the following items in mind.
--

Preferential procurement of paper and office supplies confirmed to be producedwith consideration given to biodiversity and ecosystems
Ecologically friendly approaches to mining raw materials and developing,producing, and procuring raw materials, components, and products
Consideration for the local ecosystem, such as protecting rare species in theregion before land acquisition or rebuilding and avoiding habitat fragmentation
Promotion of nature conservation activities, including growing forests with native
species and planting trees to conserve ecosystems
Pollution prevention from the perspective of ecosystem conservation, 3R (reduce,reuse, and recycle) activities, and continuous improvements of energy
conservation activities
Request for suppliers to promote ecosystem conservation18

D. Business Ethics
Your company must uphold the following highest standards of business ethics to meetits social responsibilities and to achieve success in the marketplace.
(1) Continuing Commitment to Business IntegrityYour company must maintain the highest level of integrity to continue its business, anduphold a zero-tolerance policy that prohibits all forms of bribery, corruption, extortion,and embezzlement. All business transactions must be conducted with transparency andaccurately reflected in your company’s accounting books. Monitoring and proceduresmust be implemented to ensure compliance with anti-corruption and related laws.
(2) Elimination of Improper Advantages
Your company must not promise, offer, authorize, give, or accept bribes or other meansof obtaining undue or improper advantages. This prohibition covers promising, offering,authorizing, giving, or accepting anything of value, either directly or indirectly, through athird party in order to acquire or retain business, assign business to someone else, orotherwise gain improper advantages. Monitoring, record keeping, and procedures must
be implemented to ensure compliance with anti-bribery and anti-corruption laws.
(3) Disclosure of Information
All business transactions must be conducted with transparency and accurately reflectedin your company’s accounting books and records. Your company must disclose
information regarding its labor, health and safety, environmental conservation efforts,business activities and structures, financial status, and performance in accordance withapplicable regulations and prevailing industry practices. Falsification or
misrepresentation of events occurring in your company’s supply chains or implemented
measures is unacceptable.
(4) Intellectual PropertyYour company must respect and protect intellectual property rights. Transfer oftechnology and knowhow must be conducted in a way that does not infringe on
intellectual property rights, and information of customers and suppliers must also be
safeguarded.
(5) Compliance with Fair Business, Advertising, and Competition Laws
Your company must conduct its business activities in accordance with fair competition
rules, and its activities must comply with all applicable competition laws, such as
accuracy and integrity in advertising. Appropriate measures must also be taken to protect
customer information.
(6) Protection of Whistleblowers and Elimination of Retaliation
Your company must maintain a program to ensure the protection of supplier andemployee whistleblowers, unless prohibited by law, and disseminate and support a
process to enable its personnel to raise concerns without fear of retaliation. A systemthat allows allegations of wrongdoing to be reported must be guaranteed.

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(7) Responsible Minerals Procurement
To reasonably assure the procurement of minerals is consistent with the Organization
for Economic Co-operation and Development (OECD) Due Diligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas orequivalent due diligence frameworks. Your company must adopt policies and conduct
due diligence on the sources and chains of custody for minerals such as tin, tantalum,
tungsten, and gold contained within its manufactured products. Please refer to theProterial Group's policy for Responsible Supply Chain of Minerals to better understandour procurement approaches.

20E. Management System
Your company must adopt or establish a management system with a scope related tothe contents of this Code. The management system must be designed to ensure thefollowing:a. Compliance with applicable laws, regulations, and customer requirements related
to your company’s operations and products.
b. Conformance with these Guidelines; and Identification and mitigation ofoperational risks related to these Guidelines.
c. The management system must also facilitate continual improvements.
The management system must contain the following elements:(1) Company Commitment
Your company must provide corporate social and environmental responsibility policy
statements affirming its commitment to compliance and continual improvements that areendorsed by the executive management and posted in its facilities in the local language.
(2) Management Accountability and ResponsibilityYour company must clearly identify the senior executive and company representative(s)responsible for ensuring the implementation of its management system and associatedprograms. Senior management must review the status of the management system on aregular basis.
(3) Response to Legal and Customer Requirements
Your company must establish a process to identify, monitor, and understand theapplicable laws, regulations, and customer requirements, including the items listed inthese Guidelines.
(4) Risk Assessment and Management
Your company must establish a process to identify legal compliance, environmental,
health and safety risks (*) as well as labor practices and ethical risks associated with its
operations. To manage identified risks and ensure regulatory compliance, your company
must determine the relative significance of each risk and implement appropriate
procedural and physical controls.
(*) Areas to be included in a risk assessment of the environment, health, and safety
are production bases, warehouse/storage facilities, plant/facility support equipment,laboratories and test areas, sanitation facilities (toilets), kitchens/cafeterias, and worker
housing/dormitories.

(5) Setting of Improvement Objectives
Your company must present written performance goals, targets, and implementationplans to improve its social, environmental, and health and safety performance, including
a periodic assessment of your company’s performance in achieving these objectives.
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(6) Development of Training ProgramsYour company must establish training programs for managers and workers to implement
its policies, procedures, and improvement objectives and to meet the applicable legal
and regulatory requirements.
(7) Communication with Workers, Suppliers, and Customers
Your company must establish a process to communicate clear and accurate information
about its policies, practices, expectations, and performance to workers, suppliers, andcustomers.
(8) Worker Feedback, Participation, and GrievanceYour company must establish ongoing processes, including an effective grievancemechanism, to assess orkers’ understanding of the practices and conditions covered bythese Guidelines and promote continuous improvements after obtaining feedback andidentifying violations. A safe environment must be provided for workers to voice
grievances and offer feedback without fear of reprisal or retaliation.
(9) Audits and Assessments
Your company must implement periodic self-evaluations to ensure conformity with legal
and regulatory requirements, these Guidelines, and customer contract requirements
related to social and environmental responsibility.
(10) Corrective Actions
Your company must establish a correction process to respond to the deficiencies
identified by internal or external assessments, inspections, investigations, and reviews.
(11) Documentation and Records
Your company must create and maintain documents and records to ensure regulatorycompliance, conformity with company requirements, and appropriate confiden tiality toprotect privacy.
(12) Supplier ResponsibilityYour company must establish a process to communicate these Guidelines to suppliers
and monitor their compliance.

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F. Product Quality and Safety(1) Product Safety
Your company must ensure sufficient product design safety and sell products with anawareness of its responsibility as a manufacturer. Product safety must be ensured incompliance with laws and regulations, with consideration also given to the safety thatshould be expected from products. Laws, regulations, and safety and other standards
related to product safety (Japan: Act on Product Safety of Electrical Appliances andMaterials, Consumer Product Safety Act, Household Goods Quality Labeling Act,detailed rules in various laws and regulations, Japanese Industrial Standards (JIS), etc.;
overseas: Underwriters Laboratories (UL), British Standards Institution (BSI), CanadianStandards Association (CSA), etc.) must be observed. Product safety must also include
traceability (procurement of parts and materials, manufacturing processes, etc.) andother management methods and prompt response to problem solving.
(2) Promotion of Quality Assurance Activities
Your company must formulate a quality assurance policy and accordingly proceed withquality assurance activities daily to make continuous improvements through the Plan-DoCheck-Act (PDCA) cycle. To this end, your company will establish and promote a quality
management system that develops an organizational structure, outlines an activity plan,and specifies responsibility assignment and procedures. For major quality management
systems, please refer to ISO9000, ISO/TS16949, and ISO13485.

G. Prevention of Personal and Confidential Information Leakage(1) Protection against Threats to Computer Networks Including Cyberattacks
Your company must take measures to prevent threats to computer networks, including
cyberattacks, from affecting its internal and external operations. These threats include
viruses, worms, spyware, ransomware, social engineering, and targeted attacks.
Computers or servers infected with viruses and other malware may leak customer andconfidential information or attack other companies’ computer net orks, causing serious
harm due to the stagnation of daily operations and the loss of trust. In addition, carefulattention must be paid to targeted attacks and other types of threats by hackers who may
break into computer networks and leak or destroy a variety of information, resulting insimilar damage.
(2) Privacy Protection
Your company must be committed to effectively protecting personal information andprivacy of all people involved in its business, including suppliers, customers, consumers,
and workers. Personal information must be collected, stored, processed, transmit ted, andshared in accordance with laws and regulations related to privacy and information
security.
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(3) Measures to Prevent Personal Information Leakage
Your company must ensure that personal information (*) is not obtained, used,disclosed, or leaked illegally and unfairly by formulating codes and policies to becomplied with by workers, while thoroughly managing the information through the PDCA
cycle.
(*) Personal information refers to information about a living individual that can be used to
distinguish that specific individual’s identity, such as name, date of birth, and otherdescriptions (including anything that easily matches other information to identify a
specific individual).
(4) Measures to Prevent Leakage of Customer and Third-party Confidential
Information
Your company must ensure that all confidential information (*) of customers and third
parties is not obtained, used, disclosed, or leaked illegally and unfairly by thoroughlymanaging the information through the PDCA cycle.
(*) Confidential information refers to information disclosed in a written form (including
electromagnetically or optically recorded data information) that is designated asconfidential in an agreement or information orally disclosed after confidentiality is
notified.

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3. Revision History
Edition1

Revised Date
Details
January,2023 Created the 1st edition of the "Proterial Group Sustainable
Procurement Guidelines".

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