TEIJIN LIMITED

Caux Round Table

June 28, 2023
Caux Round Table Japan
Hiroshi Ishida, Executive Director

Status of Human Rights Due Diligence by the Teijin Group
Caux Round Table Japan (“CRT Japan”), a non-profit organization, and Teijin Limited(“Teijin”) have concluded an advisory service agreement on initiatives related to the UN
Guiding Principles on Business and Human Rights (“UNGPs”) and ESG from 2019 and holdregular dialogues at least once a month. In these dialogues, CRT Japan provides Teijin withinformation on global social trends and issues of concern to stakeholders, and discussions
are held with Teijin’s Chief Social Responsibility Officer, who is in charge of CSR, or
members of related departments, to determine the direction Teijin should take.
This report is a third-party commentary on how Teijin, as the headquarters of the TeijinGroup, has developed a UNGPs-based management system that incorporates this external
perspective and how it intends to proceed in the future.

Characteristics of the Teijin Group’s business operations
Teijin is a pioneering venture company with a corporate history spanning more than 100
years. The Teijin Group’s corporate philosophy is “Enhancing Quality of Life,” whose
purpose is to enhance the quality of life through a deep insight into human nature andneeds, together with the application of our creative abilities.
The Teijin Group consists of the four business domains of Materials, Healthcare, Fibers &Products Converting, and IT, each diversified and global in scope. Since its operation, theTeijin Group has been striving for people-centered management. Since 2018, the Group has
begun full-scale efforts to implement the UNGPs formulated by the United Nations in 2011.
Approaches to be taken by the Teijin Group to implement the PDCA cycle based on UNGPs
Given that the Teijin Group’s business domains vary widely due to its diversified
management, it would not be efficient to implement all the initiatives required by the
UNGPs at once throughout the Teijin Group. Therefore, Teijin should implement its
initiatives in stages and push forward with them while building consensus with internaland external stakeholders. In particular, the Teijin Group should focus on the upstream ofits supply chain and promote the implementation of initiatives according to UNGPs in
business areas where it can directly impact. In addition, it is necessary to continue dialogue

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with stakeholders regularly to respond flexibly to urgent social issues.

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Teijin Group initiatives, future actions and evaluation
In light of its diversified and global business structure characteristics, Teijin is conducting
human rights due diligence on the entire Teijin Group in stages as follows. First, Teijinholds dialogues with CRT Japan, overseas experts, and other stakeholders regularly andconfirms the existence of potential risks based on the risk assessment at regular monthly
meetings with CRT Japan. In addition, the Teijin Group conducts its own CSR procurement
questionnaires of its suppliers to proactively clarify and monitor the status of their efforts
to address human rights issues. Through these processes, CRT Japan and Teijin agreed in2020 to conduct human rights due diligence impact assessments in a phased manner for
the following three events in Teijin’s business areas, excluding the IT business domain, in
the order of the most significant adverse impacts on society. We are currently moving into
the implementation phase.
1. Regarding the working environment at outsourced sewing and processing companies
in the Fibers & Products Converting business domain (particularly Teijin Frontier),
Teijin collaborates with the Global Alliance for Sustainable Supply Chains, a thirdparty organization, and conducts educational activities that integrate seminars anddirect dialogues with rights-holders, including workers, every year. In addition, Teijincommenced the Zero Fee Project in FY2019, aiming to remove the burden of payment
on technical intern trainees. Teijin first narrowed its focus to the Fibers & Products
Converting business domain, which is considered to have a significant adverse impact
on society and then integrated it with existing CSR questionnaires while involving athird-party organization. This initiative is a good practice of a management systemthat incorporates external perspectives, and CRT Japan looks forward to Teijin’s
continued implementation of this approach.

2. Teijin commenced in November 2021 to consider holding a direct dialogue on theworking environment at manufacturers of febuxostat, the active ingredient of Feburic,which is the flagship product of its healthcare business, and its relationship with thesurrounding community. Teijin then discussed with relevant departments in January
2022. As a result, Teijin decided to strengthen traceability in febuxostat, not only forsecuring stable supplies of its flagship product but for responding to a significant
supply responsibility to society. Through collaboration with overseas manufacturers ofactive ingredients, Teijin is now moving toward implementing direct dialogue
upstream in the supply chain to the extent that it can directly influence them. CRT
Japan looks forward to its initiative. Since last fall, overseas NGOs and CRT Japan

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have pointed out that it is essential to conduct due diligence that incorporates human

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rights and the environment from 2022, and the then Chief Social Responsibility
Officer gave top priority to the early implementation of such due diligence andcommitted to take advantages of this series of works as a learning opportunity. This isthe background of the selection.

3. Teijin discussed with CRT Japan in January 2022 its potential direct dialogue on thetreatment of migrant workers employed in each business under the Materials
business domain, especially in overseas locations1. In this discussion, Teijin recognized
that, in light of the current Russia-Ukraine war, it is necessary to confirm, especiallyin the European region, whether human rights violations (discrimination) against
Russian and Ukrainian nationals are occurring. Therefore, Teijin decided to move
forward with arrangements for direct dialogue, if necessary.
Subsequently, since the Russian invasion of Ukraine began on February 24, 2022, theTeijin Group has donated 10 million yen through the United Nations Children’s Fund
(UNICEF) and the Office of the United Nations High Commissioner for Refugees(UNHCR) as humanitarian assistance to people in Ukraine and displaced areas whoare experiencing difficulties in their lives. In addition, TEIJIN AUTOMOTIVETECHNOLOGIES CZECH offers financial support to 30 directly employed Ukrainian
workers for daily necessities and housing expenses of displaced families andultimately provides the same supports to 10 employees who petition.
In addition, Teijin promptly sent its delegate from the then Corporate Ethics andCompliance Group of CSR and Compliance Department to TEIJIN AUTOMOTIVETECHNOLOGIES CZECH to conduct interviews regarding 30 Ukrainian nationals
and the situation their families face. The investigators stressed to the company’s
management the importance of paying attention to the working conditions of the 50
Ukrainian workers sent by the agency, in addition to the 30 directly employed, and of
implementing the UNGPs in line with the National Action Plan of the Czech Republic.
CRT Japan will support the further continuation of this effort.

Initiatives in FY2022
In FY2022, Teijin continued its CSR survey of business partners and conducted in-depth
interviews directly with 72 domestic and foreign companies whose survey answers indicatedconcerns related to human rights issues such as not employing individuals under 15 yearsof age and not having young workers to work late at night or overtime. Among these 72
In Teijin, however, labor-intensive assembly sites are increasingly automated andlimited to combined operations.
1

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companies, Teijin confirmed that none of them were involved in actual instances of slavery,

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human trafficking, or any other violations of human rights. For the remaining two
companies, Teijin was unable to confirm the actual situation in FY2022. Consequently,
Teijin continues to identify the actual situation.
In addition, Teijin conducted a survey to determine if any foreign technical intern trainees
were employed within the Group, excluding those in the Fibers & Products Converting
business which had already been subject to a prior Teijin survey. This revealed that there
was employment at one of the business partners. Given the limitation in directlyinterviewing these foreign technical intern trainees, Teijin conducted an interview with thecontact person in charge. The result of this interview confirmed that there were no humanrights issues of particular concern to the foreign technical intern trainees. The efforts to
conduct direct dialogue and attempt to approach rights-holders through an in-depth focused
approach are commendable. CRT Japan acknowledges Teijin’s efforts and expects Teijin toencourage that supplier to conduct human rights due diligence based on the UNGPs and to
conduct direct interviews with technical intern trainees with a third-party organization.
Teijin has made a strategic decision to delegate a portion of its sustainability efforts to the
procurement division, primarily responsible for actual procurement operations. This aims
to foster the establishment of a management system based on the UNGPs and towidespread the understanding of the UNGPs across its supply chain. This move is a clear
indication of Teijin’s commitment to cross-divisional efforts in the future. Following thetransfer, CRT Japan anticipates the procurement division to become responsible for CSR
procurement-related activities and collaborate with the sustainability division.
CRT Japan’s role and responsibility in Teijin’s future initiatives
Toward the implementation of a management system for the UNGPs that incorporates
external perspectives, CRT Japan expects that after completing the impact assessment of
the three human rights themes identified so far in the potential risk assessment, Teijin willappropriately address, resolve, and monitor any matter that needs to be improved and will
disclose information in a manner consistent with the UNGPs.
Teijin is also keen to establish and operate a grievance mechanism at the global level totake preventive measures against human rights violations in areas that have not beenhighlighted in this human rights due diligence process.
Teijin recognizes that it will probably take three to five years to implement the PDCA cycle
following the UNGPs throughout the Teijin Group. In the meantime, CRT Japan, as a third

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party, will navigate Teijin appropriately to ensure that its initiatives, processes, and paths

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lead to the desired results and do not diverge from what the UNGPs expect of privatecompanies.

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Below are references

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The following is cited from Teijin’s disclosed information

Progress of the Teijin Group’s human rights due diligence efforts
2018: Potential human rights risk desktop assessment
The Global Alliance for Sustainable Supply Chains was contracted to conduct a desktop
study of potential human rights risks in the Teijin Group by business domains andgeographic regions, and RIGHTSDDLIMITED (UK), a subcontractor of the alliance,
conducted a study on the “likelihood of complicity in modern slavery”.
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Scope: 153 domestic and overseas group companies categorized into 11 businesses
within the Teijin Group

Methodology: Score the “risk of human rights violations” for each of the 11
businesses

Results: The Fibers & Products Converting, which is positioned as a laborintensive industry, was identified as having a relatively high potential risk ofhuman rights violations due to the nature of its business characteristics and theregions in which it operates.

2019: Measures to address potential human rights risks
For the implementation based on the UNGPs, Teijin concluded an advisory service
agreement with CRT Japan, a third-party non-profit organization. While incorporating thedetails of the Teijin Group’s efforts to date, Teijin and CRT Japan discussed measures for atransition from human rights themes identified in the potential human rights due diligencerisk to impact assessment for identifying human rights issues.
2019: Dialogues with overseas experts
On October 11, 2019, Teijin participated in a dialogue session in Tokyo organized by CRT
Japan and held a dialogue between experts in “Business and Human Rights” and the TeijinGroup Chief Social Responsibility Officer. While recognizing Teijin’s efforts to date to
involve the supply chain at Teijin Frontier, the experts expressed expectations that Teijin
will be able to further identify and address human rights issues for rights-holders throughimpact assessments in the future.
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Overseas Experts (honorifics omitted)
Puvan J Selvanathan, CEO, Bluenumber Foundation
Paulina Murphy, Engagement Director, World Benchmarking AllianceCamille LePors, Senior Researcher, World Benchmarking Alliance, CHRB
Rishi Sher Singh, Specialist Global Supply Chain in India

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Caux Round Table◼ Teijin (honorifics omitted)
 Yasuhiro Hayakawa, Chief Social Responsibility Officer, Senior Executive Officer, TEIJINGROUP
 Yukako Kurose Manager, Corporate Ethics and Compliance Group, CSR & ComplianceDepartment
 Shuichi Osaki, General Manager, CSR Planning Department
 Kohei Hayakawa, General Manager, Corporate Ethics and Compliance Group, CSR &Compliance Department◼ Facilitator (CRT Japan)
 Hiroshi Ishida

Human rights due diligence initiatives
From November 2019 to March 2020, Teijin conducted a human rights due diligence risk
assessment in accordance with the UNGPs in collaboration with CRT Japan. In this process,Teijin explained to CRT Japan the flow of the CSR procurement questionnaire surveys
conducted by the Teijin Group since FY2014 and the process for improvement based on thesurvey results. As a result, CRT Japan confirmed the scope and number of companies
surveyed and efforts and initiatives regarding the post-survey process for improvement.
Teijin then identified potential human rights risk issues from the Teijin Group’s businessdomains which significantly cause adverse social impact.
Effectiveness of existing initiatives
Teijin explained to CRT Japan the flow of the annual CSR procurement questionnaire
surveys conducted since FY2014 and the mechanism of the improvement process based on
survey results. Based on this explanation, CRT Japan confirmed the validity of the overallmechanism. CRT Japan then provided advice on the importance of making suppliers awareof the improvement process that Teijin will be working on after the surveys andsubsequently confirmed the effectiveness of the PDCA cycle for this improvement processby reviewing suppliers that received a low mark.
Teijin and CRT Japan then identified potential human rights risks from business domainsof the Teijin Group that significantly cause adverse social impacts and formulated measures
to be implemented in FY2020 and beyond.
1. Education and guidance for improvement for business partners
i. Online seminars in Japan and overseas (China, Vietnam, Indonesia) for
business partners of Teijin Frontier Co.
2. Interviews with processing consignees
i. Interviews with domestic and overseas business partners that Teijinconsidered necessary to confirm their initiatives for human rights
3. Review of CSR Procurement Guidelines and survey items in response to thesocial conditions related to matters of human rights violations in the supply
chain
4. Promoting the CSR Procurement Guidelines among business partners
5. Review of grievance handling mechanisms

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Dialogues with experts
Teijin participated in a dialogue session in Japan organized by CRT Japan on October 13,
2020, and held a dialogue between leading experts in the field of “Business and Human
Rights” and the Teijin Group Chief Social Responsibility Officer. The experts commented on
the following points (1) In the future, the actual situation of foreign workers at suppliers indomestic operations should be monitored to see if any human rights issues are occurring
among them; (2) In efforts based on the UNGPs, the management decision-making process
should be made more visible; and (3) Information should be disclosed more proactively.
◼ Overseas experts (honorifics omitted)
 Livio Sarandrea, UNDP Bangkok Regional Hub Manager and Chief Adviser of Regional
Program on Business and Rights, and UNDP global lead of Business and Human Rights,
UNDP Bangkok Regional Hub
 Pauliina Murphy, Engagement Director, World Benchmarking Alliance◼ Teijin (honorifics omitted)
 Yasuhiro Hayakawa, Chief Social Responsibility Officer, Senior Executive Officer, TEIJINGROUP
 Yukako Kurose General Manager, Corporate Ethics and Compliance Group, CSR &Compliance Department
 Shuichi Osaki, General Manager, CSR Planning Department◼ Facilitators (CRT Japan)
 Hiroshi Ishida, Executive Director
 Hitoshi Morotomi

2020: Identification of actual human rights risks (Initiatives from the scope of direct impact)
The “Zero Fee Project” for technical interns at Teijin Frontier
The business of Fibers and Products Converting, which has adopted foreign technical interntrainees by utilizing the foreign technical intern training program for years, conducted its
internal survey and found the fact that the foreign trainees have come to Japan by paying
a large fee to sending organizations in their own country. To improve this, Teijin Frontier
has launched the so-called, “ZERO-FEE PROJECT,” which would eliminate the foreign
trainee’s fee burden by having the factory that accepts the foreign trainee pay such fee from
FY2019. Subsidiaries of Teijin Frontier that accept the foreign trainee have established a
Code of Conduct regarding Foreign Workers and informed the supervising organization,and from FY2020, such subsidiaries have borne the fee required for sending foreign trainees.
In order to secure this ZERO-FEE, such subsidiaries have decided to accept foreign trainees
from the supervising organization that discloses the information on fees at the sending
agency. Such subsidiaries also confirm directly with the foreign trainees that they have notpaid such fees.
2021: Dialogues with experts

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2021, and held a dialogue between leading experts in “Business and Human Rights” andthe Teijin Group Chief Social Responsibility Officer. In the future, Teijin will promote
initiatives involving the supply chain to see if there are any environmental or human rights
impacts in business areas other than Teijin Frontier, which Teijin has been implementing
to date. Experts commented that it is time to move beyond human rights in a narrow sense
to a broader approach to human rights. They also mentioned the need to evolve the form ofengagement, including relationships with local communities, to make it a global effort.
Overseas experts (participated online)
Paulina Murphy, Engagement Director, World Benchmarking Alliance
Livio Sarandrea, Manager & Chief Advisor, UNDP Bangkok Regional Hub
TeijinToshiya Koyama, Member of the Board of TEIJIN LIMITED, Executive Officer, Chief Social
Responsibility Officer, TEIJIN GROUP
 Yukako Kurose, General Manager, Corporate Ethics and Compliance Group, CSR &Compliance Department
 Shuichi Osaki, General Manager, CSR Planning Department
 Kohei Hayakawa, Manager, Corporate Ethics and Compliance Group, CSR & ComplianceDepartment◼ Facilitators (CRT Japan)
 Hiroshi Ishida, Executive Director
 Hitoshi Morotomi
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2022: Dialogues with experts
Teijin participated in a dialogue session in Japan organized by CRT Japan on October 19
and held a dialogue with leading experts and international NGOs in the field of “businessand human rights” as part of efforts to verify the effectiveness of the methods and resultsof human rights due diligence in the Teijin Group and to consider the future direction ofefforts. In that dialogue, Teijin received an excellent evaluation for its efforts to engage withexternal rights-holders. Teijin also received a number of comments, such as that having an
opportunity for joint discussion and assessment between the departments in charge ofhuman rights and those in charge of the environment is a good opportunity forunderstanding issues involving human rights and the environment, and that it is essential
for the Teijin Group to identify stakeholders with whom it intends to have dialogue and toselect reliable local partners in order to build relationships with them.
◼ Overseas experts (honorifics omitted)
 Sean Lees, Business and Human Rights Specialist, UNDP Bangkok Regional Hub
 Tayla Swissa, Research Project Manager for CHRB, World Benchmarking AllianceSarah Bradbury, Research Analyst to support the Social Transformation, World

Benchmarking Alliance◼ Teijin (honorifics omitted)

Caux Round Table Japan
Shibuya Sanshin Mansion 505, 29-33 Sakuragaoka-cho Shibuya-ku Tokyo 150-0031 JAPANhttps://crt-japan.jp/en/Toshiya Koyama, Member of the Board of TEIJIN LIMITED, Executive Officer, Chief Social
Responsibility Officer, TEIJIN GROUP
 Shuichi Osaki, Corporate Officer, Deputy Chief Social Responsibility Officer
 Kohei Hayakawa, Group Manager, Corporate Ethics & Compliance Group, CSR & ComplianceDepartment
 Yukako Kurose, Manager, Corporate Ethics & Compliance Group, CSR & ComplianceDepartment
 Seiichi Shibasaki, Manager, Corporate Ethics & Compliance Group, CSR & ComplianceDepartment◼ Facilitator (CRT Japan)
 Hiroshi Ishida, Executive Director
 Hiotshi Morotomi
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Aim for the widespread understanding of human rights among business partners (crossdivisional efforts)
The Teijin Group recognizes the necessity of collaborative efforts with relevant departments
to ensure that slavery and human trafficking do not take place in any part of the Group’s
operations or within its supply chains. Until FY2021, human rights efforts were led by thedivision in charge of sustainability. In FY2022, the Teijin Group decided to delegate a
portion of these efforts to the procurement division. Following this transfer, theprocurement division is in charge of CSR procurement-related activities, such as suppliersurveys, and collaborates with the sustainability division. Through this management
structure, Teijin aims to further promote the widespread understanding of UNGPs in its
supply chains.
Human rights due diligence impact assessment (emphasis on an in-depth approach)
The Teijin Group recognizes the presence of certain issues related to foreign technical interntrainees such as long working hours, poor working environment, and low wages, and that
the Teijin Group needs to address these issues. In FY2022, the Teijin Group proactively
engaged with multiple suppliers employing foreign technical intern trainees under thetechnical intern training program with the objective of getting cooperation in conducting an
on-site survey. The Teijin Group visited one supplier, which expressed its willingness tocooperate, and conducted an interview survey with the person in charge. Through this onsite survey, we confirmed that there were no issues of particular concern regarding thecircumstances of the technical intern trainees at this supplier.

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