Toho Titanium
Green Procurement Guidelines

June !" 2019
Toho Titanium Company Limited

Establishment: October 1, 2006
Revision: June 7, 2019

Table of Contents

1. Introduction
2. Scope of Application
3. Requirements to Consider in Procurement
4. Desired Implementation Requirements
5. Application of Green Procurement
Attachment: Guidelines for Banned Environmental Impact Substances

1. Introduction
The Toho Titanium Group (hereinafter referred to as the "Toho Group"), acomprehensive titanium manufacturer, is engaged primarily in the titanium business,and also conducts an electro-ceramic materials business and olefin polymerization
catalyst business by making use of technology and intermediate products from thetitanium refining process.
Fully recognizing the effects these business activities have on the environment, theToho Group is working on original measures to reduce environmental risks as well as
to "use resources and technology effectively" and "reduce environmental loads," byimproving yield and extraction rates, improving quality, process reduction, recycling,and energy conservation in all operation stages along with a basic environmental
policy that allows the Toho Group to contribute to global environmental conservation
through "reasonable and effective use of resources and technology."
To this end, the Toho Group has decided to promote green procurement andestablished the "Green Procurement Guidelines" based on the recognition that it isalso essential to utilize materials and equipment by taking into consideration thereduction in environmental loads when procuring the materials and equipment
necessary for business activities.
These Guidelines show "essential requirements (minimum requirement levels)" to beobserved and "desired requirements (desired level)" to be taken into account whenpromoting green procurement. Failing to meet these "essential requirements" mightmake it necessary to cancel our business relationship with subcontractors, etc. The
desired requirements" will be used for future reference in our procurement.
If standards other than those set forth in these Guidelines are required due tospecification requirements for the materials and equipment, we will specify suchstandards in the purchase specifications and other documents which will bedetermined separately.
Also, please note that the green procurement standards are subject to subsequentchanges in laws and regulations, and social trends.
We therefore would like to ask your cooperation with these Guidelines.

[Green procurement policy]
We will contribute to "creation of a sound material-cycle society," "prevention of global
warming" and "promotion of 3Rs"* through green procurement efforts.
If the functions, prices and delivery periods of products to be procured are equivalent,
we will evaluate the degree of environmental load reduction based on the "essentialrequirements" and "desired requirements" and procure those products that impose alower environmental load.
* 3Rs = Recycle, Reduce and Reuse

2. Scope of Application
These guidelines cover the following materials and equipment at present.
(1) Facility materials (manufacturing facilities)
Facilities related to titanium manufacture, electronic materials and functional
materials, and olefin polymerization catalysts(2) Operational materials
All purchasing products "used for manufacturing titanium-related products,products related to electro-ceramic materials and functional materials andproducts related to olefin polymerization catalysts" and facility maintenancematerials(3) Office supplies
All materials and equipment used at the headquarters, branches, offices and otherplaces of business

3. Requirements to Consider in Procurement
Essential Requirements
We will procure materials and equipment from suppliers that meet the following
requirements. Suppliers are requested to submit confirmation to us that they meet theessential requirements.
(1) Essential requirements for suppliers
Our major consideration when determining which materials and equipment toprocure is the degree to which the materials and equipment reduce environmentalloads and whether the companies that are manufacturing and selling the materials
and equipment are taking an active stance toward environmental conservation.
We will examine the efforts made by the companies toward environmental
conservation and procure materials and equipment from suppliers that meet thefollowing conditions.
a) Creation of an environmental management system
Factories and offices which develop, manufacture, and sell materials andequipment are required to create an environmental management system.
Suppliers are required to effectively implement the ISO-14001 environmental
management system or their own environmental management system throughthe PDCA cycle which includes the following steps:▪ Establish environmental policies.
▪ Appoint an environmental management representative and set up anorganizational structure for environmental management.
▪ Identify and comply with environmental laws and regulations.
▪ Establish and carry out environmental objects, targets and plans.
▪ Create a chemical substance management system.

▪ Conduct environmental education and training for employees.
▪ Periodically check the status of legal compliance and environmentalactivities.
b) Nonuse of banned substances in the manufacturing process
In the manufacturing process, suppliers must not use any banned substancesthat are separately specified by Toho Group.
Note) The banned substances are those specified in the ELV (End-of-LifeVehicle) (enforced from October 2000) in the EU, the RoHS (Restrictionof Hazardous Substances) (enforced from July 2006) to regulate special
hazardous substances included in electrical and electronic appliances,
the REACH regulations (enforced from June 2007) for general molded
products, and those which may induce ozone layer destruction and sickbuilding syndrome.
c) Cooperation in a survey of contained chemical substances
Regarding the survey of chemical substances contained in materials andequipment, suppliers are required to submit to us a survey report on chemical
substance contents (in the JGPSSI format). (JGPSSI: Japan Green
Procurement Survey Standardization Initiative)(2) Essential requirements for procuring materials and equipment
The materials and equipment to be procured are required to have low
environmental loads.
To avoid environmental contamination and harm to human health, measures must
be taken to prevent hazardous substances from being released when procured
materials and equipment are used, scrapped, or disposed of. By ensuring thatprocured materials and equipment do not contain any substances that may cause
damage to the environment or human health, the Toho Group intends to design
more eco-friendly products and conduct more appropriate disposal activities.
The Toho Group will therefore procure only those materials and equipment that do
not contain any substances we separately specify as banned substances.
The word "Contain" as used in these Guidelines means "intentionally containing
banned substances." Although impurities, which are unavoidable are notconsidered as banned substances, the contents must not exceed the thresholdlevel* of hazardous substances indicated in the "Guide for Banned Environment
Impact Substances."* Threshold level: the maximum level at which substances do not start to develop
toxicity4. Desired Implementation Requirements
Suppliers are requested to give us periodic reports on the following items for ourfuture reference.
(1) Desired implementation requirements for suppliers
We ask suppliers to understand the commitment of the Toho Group to "creation ofa sound material-cycle society," "prevention of global warming" and "promotion of3Rs" and to implement these items as below.
a) Implementation of environmental assessment of materials and equipment
Suppliers are requested to perform environmental assessment of materials
and equipment when designing the materials and equipment so as to reduce
the environmental loads of the materials and equipment at the design stage.
The environmental assessment of materials and equipment is a preliminary
assessment that takes environmental factors into consideration at thedevelopment stage based on environmental design concepts such as
prevention of global warming, resource recycling, and elimination ofenvironmental impact substances so as to provide eco-friendly materials andequipment that use less resources or energy to the market.
b) Making efforts for global environmental conservation
Suppliers are requested to make efforts to implement these items for global
environmental conservation as below.
Reduction of substances that may cause global warming, reduction in waste
generation, management of chemical substances, reduction in resource
consumption, reduction in the environmental loads of wrapping and packaging
materials, and implementation of environmental assessment (control of air
pollution, water pollution, ground contamination, noise, vibration, etc.).
c) Implementation of green procurement
Suppliers are requested to establish green procurement standards and apply
such standards to the procurement of parts and components of materials andequipment.
d) Provision of information on inclusion of SVHC under the REACH regulations
In case of inclusion of the SVHC (*1) under the REACH regulations (*2),
suppliers are requested to obtain information on the SVHC and promptly report
this to us accordingly.
*1) SVHC means Substance of Very High Concern under the REACH
regulations and lists of specific SVHC are published as needed.
https://www.echa.europa.eu/candidate-list-table*2) The REACH regulations are regulations for Registration, Evaluation,Authorization and Restriction of Chemicals enforced from June 1, 2007 byEU.

(2) Public disclosure of information
Suppliers are requested to proactively disclose environmental information onmaterials and equipment and their commitment and achievements concerning
environmental conservation.

5. Application of Green Procurement(1) Supplier-by-supplier surveya) Each supplier is requested to provide information on its management stancetowards environmental conservation and materials and equipment.
b) We will examine the state of the environmental management system and otherrelated matters.
c) We will check whether or not banned substances are used.
(2) Product-by-product survey
We will survey the contents of banned substances.
(3) Notification of changes
In case of any change in answers to a survey form, suppliers are requested tonotify us of such change.
(4) Notification of the inclusion of banned substances exceeding thresholdlevels
Suppliers are requested to immediately inform the relevant departments when
they identify the inclusion of banned substances exceeding the threshold levels.
(5) Any and all information received from suppliers will be treated with thehighest confidentiality.

Attachment:
Guidelines for Banned Environmental Impact Substances
1. Purpose of the Guidelines
The purposes of these Guidelines are to clarify substances that must not be included
in manufacturing processes and materials and equipment and share information on
the banned substances among the Toho Titanium Group (hereinafter referred to as
the "Toho Group") and suppliers and thereby improve the environmental quality ofToho Group products.

2. Banned Substances and Threshold Levels
1) Banned substances in products
The following substances must not be intentionally used, and even if they areimpurities must not exceed the threshold level.** Threshold level: the maximum level at which substances do not start to develop
toxicity(a) Heavy metals (which are contained in wrapping materials, plastics, ink, paints,etc.)• Cadmium and its compounds
wrapping materials, plastics, ink and paints: less than 5 ppm
raw metals containing zinc:less than 75 ppm
others:less than 20 ppm• Lead and its compounds:
less than 100 ppm• Chromium VI compounds:
less than 100 ppm• Mercury and its compounds:
less than 100 ppm
In packaging materials however, the total contents of the above four
substances must not exceed 100 ppm.
(b) Chlorinated organic compounds• Polychlorinated biphenyls (PCB):

less than 50 ppm• Polychlorinated naphthalene (PCN):

prohibited to include(substances with 3 or morechlorine atoms)
less than 50 ppm• Polychlorinated terphenyl (PCT):• Chlorinated paraffins (CP):prohibited to include(substances with carbon lengthof 10–13)• Mirex:prohibited to include(c) Brominated organic compounds• Polybromobiphenyls:

less than 1000 ppm• Polybromodiphenylethers:

less than 1000 ppm

(d) Organotin compounds• Tributyltin compounds:

less than 1000 ppm• Triphenyltin compounds:

less than 1000 ppm(e) Asbestos:prohibited to include(f) Formaldehyde:less than 0.1 ppm

2) Banned substances in the manufacturing process(a) Ozone depleting substances• CFCs, Halons, HBFCs, HCFCs, methyl bromide and carbon tetrachloride• 1,1,1-trichloroethane(b) Chlorinated organic solvents• 1,1,2-trichloroethane• 1,2-dichloroethane• 1,1-dichloroethylene• 1,2-dichloroethylene• Dichloromethane (methylene chloride)• Chloroform• Trichloroethylene• Tetrachloroethylene

Note 1: Threshold level means the concentration of banned substances that the Toho
Group applies to the management of materials and equipment.
Note 2: The Toho Group may, in its own right, allocate lower figures to theseregulation and management values in accordance with its circumstances(such as client requests).
Note 3: If any treaties, laws and regulation, or guidelines of business fields stipulate
regulations on substances not listed in these Guidelines, suppliers arerequested to completely observe them.

3. Application(1) These Guidelines are established for preventing environmental impacts ofproducts and do not cover all the substances banned by laws and regulations.
These guidelines are therefore subject to review in terms of global environment
conservation.
(2) Although these Guidelines are to be observed as a general rule, in special cases
where these Guidelines cannot be observed, for example the use of substances
which are listed in these guidelines but exempted by laws and regulations orsubstances for which no technological solution has been developed to provide
alternative substitutes including components made from such substances, then weallow the managers at business operations that procure the substances todetermine their availability.
(3) These Guidelines show a list of a minimum number of banned substances that all
the business operation must commonly observe. Each business operation cantherefore add original banned substances to the list depending on the requests
from clients.