Quality Management

KYB Group Basic Policy for Quality
KYB and its Group companies are committed to restoring the trust they have lost, and have established a medium-term action plan forcompliance with the KYB Group Basic Policy for Quality to do so. To prevent a recurrence of quality-related misconduct, we will continue
to foster and establish an awareness of compliance as the prerequisite for and foundation of quality management.

The KYB Group shall:
1. Address quality improvement with honesty driven by the belief that quality is the basis for business.
2. Deliver safe and secure products in compliance with promises to customers as well as with laws
and regulations.

Quality Assurance System
We have built and operate an ISO 9001-compliant quality
assurance system that emphasizes the quality of work processes
as well as the quality of products and services. We strive each
day to make improvements in all aspects of quality.
At KYB, we implement what is called a three-step evaluation
system for the development and mass production of products, thedevelopment of technologies, manufacturing methods, and so on.
We make every effort to achieve high quality throughout the
product life cycle, from the product planning stage, to defectreduction and change management after mass production andshipment. At our production bases, we take a variety of quality
improvement measures under the leadership of base managers
and plant managers, and we are working to promote the unerring
operation of our three-step evaluation system. Furthermore, toensure the quality of mass-produced products, we also follow thissystem for single, small-lot orders and when production is moved
to another production base.

Development of Products and Technologies througha Three-Step Evaluation System and the Quality
Safety Audit
Step
Prior and model
development
DR0 evaluation meeting

Orderdevelopment
DR1 evaluation meeting

Mass-production
development andproduction
preparations

Goal of the Three Steps

Quality
Assurance Step

Proof of possibility(Description and evaluationof development quality)

Development
quality

Proof of mass production(Description and evaluationof development quality)

Start quality

Proof of applicability andserialization(Demonstration andevaluation of start quality)

Mass-production
quality

Quality Safety Audit
Evaluate manufacturing site, manufactured products anddata to confirm that mass-production quality is problemfree and that reliable production and shipment are possible.

Quality Safety Audit
DR2 evaluation meeting

Mass production
Initial flow
management

Bad News First
Execute (until the reporter receives feedback)
When abnormalities arise: Stop, Call, Wait

Strengthening the Quality Audit System
KYB is strengthening its quality audit system to thoroughly
prevent quality-related misconduct. Quality audits evaluate thematerialization of risks of quality-related misconduct, improvementof such risks, and the effectiveness of the improvement measurestaken. In addition, we are working to achieve our goals by
evaluating whether our plans for quality assurance and quality
control activities are being implemented effectively andsystematically, and the effectiveness of our measures, among
other factors.

Revision of Quality Audit Regulations (March 2020)
We conduct quality audits to prevent quality-related misconduct
and to identify the actual conditions of quality assurance andquality control activities. We reflect the results in our business
management, and work to improve the level of our quality
assurance and quality control activities.

Establishment of Procedures for Dealing with
Quality-Related Misconduct (April 2020)
We newly established procedures to strengthen compliance inmanagement and maintain social credibility by establishing a
24

KYB Group Report 2020

framework for appropriate response to reports of organizationalor personal quality-related misconduct from employees or otherparties and by conducting early detection and correction ofquality-related misconduct.

Improvement of Quality Division Structure
Within the Quality Division, a functional division at the head office,the Quality Control Department was previously responsible for
quality auditing and quality control operations. The QF Promotion
Department was newly established within the division as the coreof quality improvement operations from analyzing quality data to
taking measures against quality defects. By separating thefunctions of management and practical execution, we intend tostrengthen the functions of our quality maintenance management
and improvement activities.

New Structure of Quality Division
Quality Division

Quality Control Department

QF Promotion Department

Supply Chain Management

Basic Policy for Procurement
KYB works to fulfill its corporate social responsibility (CSR) andcontinues to be a company that society can rely upon. Suppliers
are important partners for us in continuously developing ourbusiness through monozukuri (Japanese manufacturing expertise)and contributing to the realization of an affluent society.
Our basic policy for procurement is described below.

Basic Approach to Procurement① Procurement activities aimed at the coexistence and mutual
prosperity of KYB and its suppliers② Legal compliance③ Quality first④ Safety and health, human rights and labor⑤ Continuous cost reduction activities⑥ On-time delivery⑦ Protection of the natural environment⑧ Construction of global procurement system⑨ Risk management⑩ Classified information management⑪ Prevention of corruption▶ For details, please see the Company website.

https://www.kyb.co.jp/english/company/csr.html

Specific Initiatives
FY2019 Procurement Policy Briefing
We held the FY2019 Procurement Policy Briefing in April 2019 in
Tokyo and Nagoya. Suppliers involved in manufacturing were invited,
and to strengthen cooperation, the Chairman, President Executive
Officer and other members of KYB senior management explained our
corporate policy, procurement
policy, quality policy and thepolicies of each of ourbusinesses to representativesof our suppliers. They also
recognized excellent suppliers
who contributed greatly to
QCD,* and presented
commemorative shields andAt the Tokyo briefing
mementos.
* Quality, cost and delivery

Supplier QC Circle Convention
In November 2019, the 49th Supplier QC Circle Conference was heldat Atsuta Shrine Hall in Nagoya. This competition is held every year toencourage improvement activities among our suppliers. This year,
237 people from 152
companies attended.
Representative teams fromeach company announced theresults of their activities for theyear, and NTN Corporation
was awarded the gold medal.

Theme Study Group Improvement Activities
Thirty suppliers who participate in our theme study groups worked
on improvement activities throughout FY2019 under the themesof quality and business continuity plans (BCP). Results included
reduction of quality defects and the creation of a BCP crisis
management system, and the groups also obtained approval from
the Ministry of Economy, Trade and Industry for tax incentives,
financial support and manufacturing subsidies for the BCP activities
of small and medium-sized enterprises. We will use the results ofthese activities to improve quality and BCP management systems
at our suppliers.
In FY2020, the name will be changed to Keneikai and a newteam will be used to conduct improvement activities.

Survey of Status of BCP
To understand the BCP status of suppliers we conducted aquestionnaire for self-assessment consisting of 100 items in sevencategories (actions for anticipated risks; securing personal safety andemergency evacuation; emergency measures taskforce; confirmationof employee safety; confirmation of property damage; instructions
for returning home and measures for people who have difficulty
returning home; and restoration taskforce). Moreover, we surveyed
the status of readiness of the entire supply chain with regard to amajor earthquake. In this way, we have all suppliers review thestatus of their BCPs and encourage them to study issues requiring
improvement and systematically implement BCP activities.

Initiatives to Prevent Human Rights Violations in
the Supply Chain
In recent years, there has been growing demand for companies toprevent human rights violations globally, including in their supply chains.
For example, under the Dodd-Frank Wall Street Reform andConsumer Protection Act, companies are required to perform due
diligence and identify whether their products contain tantalum,
tungsten, tin or gold purchased from mines in the Democratic
Republic of Congo (DRC) and nine neighboring countries, where theextraction of such mineral resources may be used to finance or
benefit armed groups that are causing human rights violations andenvironmental destruction. The aim of the Dodd-Frank Act is toindirectly cut off financial sources from these “conflict minerals” toprevent such human rights violations. The EU has taken a broader
approach to restricting conflict minerals by requiring all companies
importing mineral resources into the EU to take similar actions.
In light of the Dodd-Frank Act, the KYB Group annually checks its
products with the cooperation of its suppliers, summarizes the results
and reports to customers that request such information.
In addition, in accordance with the U.K. Modern Slavery Act 2015
we annually release a statement on KYB Group business activities andinitiatives to prevent slave labor and human trafficking in our supply
chain, including the above-mentioned conflict mineral measures. We
will carry on with our awareness-raising activities on prohibiting
human rights violations and slavery labor.
▶ For details, see the “Supply Information” section of the Company website.

https://www.kyb.co.jp/english/company/supply_
information.html

At the awards ceremony

KYB Group Report 202025

Human Resources Management

Human Resources Development
We nurture people with a high awareness of compliance who
can compete internationally by linking (1) our education system,(2) employee rotation and (3) promotion and evaluation to
improve the attributes of each employee.

The KYB Human Resources Development System
Nine Required Attributes

Ability to meet social responsibilities

Specialized knowledge/skills

Reduced riskof misconduct

Basic knowledge/skills

Improvement and reform ability

Task and strategy formulation ability

Challenge orientation

Instruction and training ability

Mutual respect and teamwork

Awareness of compliance and ethics

People with ahigh awarenessof compliance
who can competeinternationally

Employeerotation

Training
rotation

Educationsystemto improve
attributes

Specific Initiatives
Compliance Awareness Education
The KYB Group is committed to an open corporate culture in which
management and employee communication is energized by sharing
perceptions of the current state of affairs.
We promote quality management, which is fundamental tomanagement, by positioning compliance awareness as thefoundation of the KYB Group. We are working to foster a mindset
of following moral, ethical, legal and societal rules among not only
senior management but all employees.

Regain trust
Senior management
Shared perceptionof the current
state of affairs

Strategy of successthrough quality management

An opencorporate culture

Executives, managers
and supervisors
Promotion(selection) andevaluation
Appointment of
human resources
with a highawareness ofcomplianceTransparency

Energetic communication

Employees
Delivering 100% quality

Compliance awareness*
The foundation of the KYB Group* Mindset of abiding by moral, ethical, legal and social rules

Small Group Activities
In each workplace, we form small teams that have been optimized for specific objectives. Guided by a supervisor, they work to establish
compliance awareness and improve safety, quality and productivity. The goal of these Companywide activities is to help prevent
improprieties, enhance corporate performance, energize the workplace and improve communication, and to develop our people byenhancing their ability to make improvements.

Basic Approach for Small Group Activities
Formulate policies (Goals and measures)
Execute policies (Goals and measures)Supervisor support must be suited to the problems and tasks that arise in policy execution.

Select and address next theme

Continuous initiatives as an organization

Identify problems and tasks
Theme resolution

Continuous initiatives as individuals

Select themes

Assess abilities and certify qualiﬁcations

Formulate action plans
Resolve problems and achieve tasks
Summarize, report and announce

Deploy and use results
Reﬂect on and review activities

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KYB Group Report 2020

Acquire methods for
improvement andbusiness knowledge

Education and training
Improve motivation
and awarenessEvaluate and commend

Promoting Health Management
KYB Health Declaration
KYB sees the health of employees and their families as an important management resource and a source of corporate vitality,
and is working to achieve sustainable growth through the creation of an environment in which all employees can work in good
health both physically and mentally.
We are committed to actively supporting employees who are engaged in health promotion activities and to promoting
organizational measures for health promotion in order to live up to our Corporate Spirit by “building a corporate culture full ofvitality and holding high goals.”
November 1, 2019

Masao Ono
Representative Director and President Executive Officer

Organizational Structure for Promoting Health Management
Health management ofﬁcer(Representative Director,
President Executive Ofﬁcer)

Health management promotionofﬁcer (Director in charge of
Human Resources)

Health management
promotion team

Human Resources Planning Department
Health Management Center

Policy execution

Health Insurance Association
Functional andbusiness divisions

SupportLabor Union

Key Initiatives
1. Measures for Lifestyle-Related Diseases

Class-Specific Education in FY2019(Collaboration with Health Insurance Association)• Creating an environmentthat facilitates exercise
We have installed walking
courses and hold Companywide
walking events.

Seminars Heldin FY2019

Attendance Rate

Supervisors–

Postponed to the following fiscal year
as a COVID-19 countermeasureManagers

476.4%• Activities for promoting freedom from harassment incooperation with functional and business divisions• Initiatives to keep the percentage of employees undergoingscheduled health checkups at 100% and to improve thepercentage of employees undergoing specified health checkups
Percentage of Employees Undergoing Health Checkups
Regular Health
Checkups

Specified Health
Checkups

FY2017

100%

73.5%

FY2018

100%

77.4%

FY2019

100%

88.3%

• Health seminars
Visiting lecturers give annual
health seminars at all of ourbusiness locations in order toraise health consciousness
among employees.

2. Mental Health Measures• Promoting mental health education
We promote class-specific education for primary prevention of mental
health issues in the workplace.

Based on the belief that freedom from harassment is essential for
creating a vibrant and rewarding workplace, we have made freedom
from harassment a corporate priority and are executing policies for all
functional and business divisions.

3. Passive Smoking Countermeasures• Smoking environment countermeasures
Based on the secondhand smoke prevention policy established in
April 2020, we are in the process of prohibiting smoking in all areas
in stages.
April 2020: Abolition ofindoor smoking areas
January 2021: No smoking
during working hours (notobacco break)April 2022: Complete
prohibition of smoking anddiscontinuation of tobacco
sales at all business sites• Support for smoking cessation
We provide ongoing support for employees who want to quit smoking.

KYB Group Report 202027

Promoting Work Style Reform
Basic Approach
We are focusing on building and enhancing systems using thethemes shown on the right to achieve a rewarding workplace inwhich diverse individuals can contribute over the long term.
In addition, in FY2018 we began conducting an Employee
Awareness Survey for all KYB employees regarding workplace
climate, working conditions, management policy and othermatters. Answers are anonymous, and an external organizationcompiles and analyzes the results. Consequently, response rates
have been high (95.6% for the first survey in 2018, 97.1% for
the second survey in 2019) and we have learned the true
opinions of employees.
We will continue to conduct this survey regularly and use thedata to promote Companywide initiatives for employee work
style reform.

1. Support for work-life balance
Flextime system, encouragement of taking annual paid
leave in a continuous block, etc.
2. Consideration of diverse work styles
Promotion of telecommuting, shortened working
hours to accommodate childcare, etc.
3. Promotion of employee healthSee “Promoting Health Management” on page 27
for details.
4. Improvement of work process efficiency
Includes projects to streamline operations

Specific Initiatives
Enhancing the Productivity of Administrative Operations
In FY2017, we launched the Administrative Operations Productivity
Improvement Project and are working to improve efficiency andadded value in administrative operations, including general affairs,
accounting, human resources and production management.
Each administrative department aims to improve work process
efficiency through a transition to higher added value by reviewing
existing work from the perspectives of Eliminate, Reduce andChange. As part of this initiative, we have introduced robotic
process automation (RPA) tools to automate routine work processes
and we are conducting activities to shorten internal meetings (30smart meeting activities). We will continue to study and verify all
measures to increase efficiency in order to improve the productivityof administrative operations.

Eliminate

Eliminate process
entirely① Terminate process② Eliminate

redundancies

ReduceIncrease processing
speed and quality(Quantity andQuality ÷ Time)① Standardize② Systematize

ChangeReduce work processunit costs(Yen ÷ Time)① Change managers② Outsource

Support for Work-Life Balance
KYB supports work-life balance for its employees as a means tocreate an environment in which employees can participate withenthusiasm. In April 2018, we extended the childcare leave period

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KYB Group Report 2020

to the end of April after the child turns three in order to support
employees raising children. Employees had indicated that thechildcare leave period stipulated by law made it difficult to placechildren in nursery school because the leave period ended in the
middle of the fiscal year, before the start of the school year.
Furthermore, we revised the flextime system in April 2019 byextending the period of the workday available for flextime workand applying the system uniformly at all business locations. This
enables flexible work styles that match employees’ private lives
and work schedules.

Promoting Telecommuting
One of our work style reform initiatives has been to promotetelecommuting, with the goal of reducing time and energy spent incommuting, and using the time saved more effectively. In November
2017, we launched a trial program focused on supporting work-lifebalance for employees raising children or providing nursing care forfamily members. Following a series of reviews of eligibility andsystem improvements, the program became an official system asof April 2020. We have now expanded its scope to coveradministrative operations at all business sites, including plants,
allowing employees to telecommute up to twice a week.
In addition, we registered with the organization implementing the
Telework Days 2019 and Winter Smooth Biz Practice Period programs
conducted by government ministries and the Tokyo Metropolitan
Government, and encouraged employees to telecommute.
Based on employee
feedback, we plan to improve
our telecommuting system bymaking it more user-friendly,
and to broaden eligibility.

Winter Smooth Biz Practice Period

Human Resources Management

Diversity
Empowering Diverse Human Resources
The entire KYB Group accepts and respects diversity regardless of gender, nationality, disability or other attributes. To be able to support
the active participation of our diverse human resources, we are working to create an environment where all employees can play anactive role while gaining satisfaction from their work. To that end, we are stepping up job rotation and encouraging the use of annual
paid leave.

From “Continuing to Work” to “Playing an Active Role”
By accepting and respecting the diversity of women, people with disabilities,
non-Japanese employees and others, we aim to be a company that is attractive to stakeholders.

Top management

Diversity management

Managers

Raising awareness

Employees

Improved working environment

Self-directed career planning

Recruit talented women

Key Initiatives
Stepping Up Job Rotation

Encouraging Use of Annual Paid Leave• Stepping up job rotation in cooperation with each /businessdivision/function• Manager-led encouragement of use of annual paid leave

To facilitate women’s career planning, we are proactively promoting
career development and new career opportunities through job rotation.

To help support work-life balance through the use of paid leave, weare conducting activities to encourage managers to take the lead inusing their annual paid leave.

Certification as a 2020 Health & Productivity
Management Organization
In March 2020, KYB received certification under the Health &Productivity Management Organization Recognition Program as acompany that considers employee health management strategically.
We view the health of employees and their families as an importantmanagement resource and the source of corporate vitality, and wewill continue to strive to create a work environment where each
employee is physically and mentally healthy and can work
enthusiastically to achieve the sustainable growth of the Company.

KYB Group Report 202029

Environmental Management

Basic Approach
KYB launched a new medium-term strategy in FY2020. Environmental
initiatives are a global issue, and countries worldwide are working
to reduce CO2 emissions to prevent global warming. The KYBGroup has introduced solar power generation systems andimproved the efficiency of heat source equipment. We have also
reduced CO2 emissions by adopting energy-saving technologies
such as LED lighting. Furthermore, with the cooperation of external
experts, we are steadily making other improvements such as
visualizing wasted energy through diagnostics, reducing leakageof air and steam used in production equipment, and decentralizing
air compressors.
Overseas, we are implementing 100% green power purchasesof wind and solar power at our base in Spain, and we are also
considering introducing green energy at our base in Mexico. We willcontinue to work toward achieving environmental impact targets, andin so doing contribute to a sustainable society. One measure will be tofurther promote energy-saving activities that support the reduction of
CO2 emissions, and to boost waste volume reduction and recycling.

Basic Environmental Policy
Environment & Safety Management System

SloganProtect the Green Earth and Create
Environmentally Friendly Products

Basic Environmental Policies
The KYB Group creates user- and earth-friendly products.
We actively promote environmental conservation
activities as an important tool for evaluating
management.
1. Develop and build up production and corporate
activities based on recycling to reduce impacts on
the environment.
2. Strive to ensure long-term and sustainable
operations throughout the entire KYB Group.
3. Work to promote relationships with local
communities and contribute to society as a good
corporate citizen.
4. Clarify the role of each employee and encourage
the participation of all employees.

We established the Environment & Safety Committee, and havepositioned officers responsible for environment and safety as
leaders. Under the following system, KYB works to promote unity
in environment and safety initiatives.
KYB’s Environment & Safety Management System
President Executive Ofﬁcer
Executive Ofﬁcer in chargeof Environment & Safety
Environment & Safety
Committee

Respective business units
Plant General Manager

Chairman: Executive Ofﬁcer incharge of Environment & Safety

Subcommittees
Environment Preservation
Subcommittee
Energy-saving Plant Subcommittee
Safety and Health Subcommittee

Overall Safety
Supervisor

Environment
Supervisory Ofﬁcer

Safety and HealthCommittee

Environment
Supervisory Committee

Subcommittees

Subcommittees

Environmental & Safety Mid-Term Policy
Phase 1 (2011-2013)
1. Creation of energy-saving plants• Reduce CO2 per basic unit by 1%each year and cut CO2 emissions
by 25% compared with FY1990
levels by 2020
2. Creation of waste-free plants• Reduce final disposal amount ofindustrial waste by 65% comparedwith FY2000 levels by 2015
3. Creation of accident-free plants• Prevent industrial accidents
through risk assessment• Develop safety simulation facilities,
etc.

30

KYB Group Report 2020

Phase 2 (2014-2016)
1. Creation of plants that aim tominimize energy consumption
and waste• Reduce energy consumption per
basic unit by 1% compared with
FY2013 levels• Reduce amount of industrial waste
per basic unit by 3% comparedwith FY2013 levels
2. Creation and expansion of
production bases with zeroindustrial accidents• Improve employees’ awareness ofsafety and eliminate critical hazard
sources

Phase 3 (2017-2019)
1. Creation of plants that aim tominimize energy consumption
and waste• Develop environment for partial
supply of energy• Promote measures through energy
visualization• Promote waste volume reduction
and recycling
2. Creation and expansion of
production bases with zeroindustrial and fire accidents• Promote risk assessment andcountermeasures against industrial
accidents• Promote measures for zero fire
accidents

Phase 4 (2020-2022)
1. Creation of plants that aim tominimize energy consumption
and waste• Consider environmental
friendliness by reducing energy
consumption and CO2 emissions• Utilize energy sources with low CO2
emissions and promote initiatives toprevent global warming• Promote measures through energy
visualization• Contribute to creation of sustainable
society while considering ESG
initiatives and develop energy andfacilities that are environmentallyfriendly• Promote waste volume reduction
and recycling
2. Creation and expansion of
production bases with zeroindustrial and fire accidents• Promote risk assessment andcountermeasures against industrial
accidents• Promote measures for zero fire
accidents

Results of Environmental Conservation Efforts and Future Initiatives
We developed the Environmental Management Activity Plan basedon the Company’s environmental policy and implemented avariety of activities at each production base to achieve our targets.
However, compared with FY2016 levels, which was thebenchmark, we failed to achieve our targets for CO2 emissions,due in part to an increase in production volume. For industrial

waste, until FY2018 we presented it as the amount of overall
emissions, but from FY2019 we clarified the definition of recycling
and presented it as the volume of actual emissions. In addition,
we will work to improve the efficiency of production facilities,
further reduce energy consumption, improve productivity andpromote recycling.

Results for FY2019○: Goal attained ×: Goal not attained

Theme

Target ValueFY2019 Result

Prevention of
global warming

CO2 emission volume

93,650 t-CO2 or less

96,745 t-CO2

×

Energy saving

Energy consumption
per basic unit

0.69 kℓ/million yen or less0.75 kℓ/million yen

×

Improvement of
resource recovery
and recycling rate

Recycling rate

92.8% or higher

91.8%

×

Zero emission

4.6% or less

3.4%

○

General waste

489 t or less

515 t

×

General waste perbasic unit

2.03 kg/million yen or less2.25 kg/million yen

×

Metal scrap

17,393 t or less

19,319 t

×

Metal scrap per basic
unit

244 kg/million yen or less285.0 kg/million yen

×

Industrial waste

3,157 t or less

3,557ｔ×Industrial waste perbasic unit

25.94 kg/million yen or less28.8 kg/million yen

×

Reduction ofwaste

Overview of Major
Initiatives in FY2020

Evaluation

Global Warming Prevention
Measures include replacing lightingwith LEDs, LVDs, and other highly
efficient devices, adopting inverter
control for hydraulic units,
upgrading to high-efficiency
compressors, eliminating leakage of
air, reducing air consumption inplants, and implementing activities
for environment impact reduction
by installing high-efficiency air
conditioning equipment andcontrolling facility temperatures.
Waste Material Reduction
Measures include reducing paintdust through biological treatment,
introducing waste treatment andreduction systems, turning waste
into valuable products andpromoting recycling.

Notes: 1. Basic units are calculated using marginal proﬁt.
2. For energy, crude oil equivalent is calculated for electricity and fuel, and the total value indicates energy consumption.
3. CO2 emissions and energy consumption per basic unit are calculated using methods determined by KYB.
4. We have been promoting recycling activities to reduce industrial waste since FY2019. Therefore, recycling that turns waste into valuable products has been excluded.

Environmental Impact by Business Activity
KYB uses energy, water, chemicals and a variety of other resources. In order to make efficient use of those limited resources in production,
we take steps to reduce waste, CO2 and other emissions.

Input

Production Activities

Raw materials (Metal, non-metal)

Development/Design

192,982 t
Procurement

EnergyElectric power

Fuel/Gas

108,607 MWh

20,229 kℓ

1,604 km3
Chemical substances (PRTR law target substances)

316 t

Production process

Amount of waste

3,557 t(Reuse, etc.)(Landfill disposal)

Production

2,606 t772 tDistribution

Emission into atmosphere
CO₂
NOx(Crude oil equivalent)

Water

Output• Development of technologies andproducts that are environmentallyfriendly as a result of recycling,energy saving and safety, etc.
• Promotion of green procurement• Promotion of modal shift

96,745 t-CO2

37 t

SOx

Dust

2t

0.37 tRecycling inside Company

Recycling outside Company• Scrap (Effective utilization in the KYB Group)• Deteriorated solution for chrome plating• Water used for rinsing in chrome plating process, etc.

• Metal scrap• Waste oil• Waste plastic• Grinding powder • Waste thinner • Paper, cardboard, etc.

Scrap

Recycling company

Related company

KYB Group Report 202031

Chemical Substance Management
Response to Environmental Controls on Products
For the protection of the environment, the REACH Regulations,other ELV1 and RoHS directives,2 and various laws and regulations,which contain increasingly stringent provisions, have been establishedand are being implemented. In order to address stricter REACH
and other regulations, in FY2013 we built a chemical substance
database, which is a breakdown of each of our products containing
chemical substances subject to the regulations. By FY2015, we
had implemented its use throughout the KYB Group, conductedinvestigations of the relevant substances contained in our
products, and collected relevant data. By using our database, we
can rapidly respond to requests from clients to determine thepresence or absence of not only banned substances and restricteduse materials but also of substances of very high concern, whichhave been periodically added to the REACH Regulations since theenforcement of the rule.
We will continue to provide products that meet client andmarket needs.
Notes: 1. A directive that came into effect in the EU in October 2000 to reduce
environmental impact caused by end-of-life vehicles.
2. A directive that came into effect in the EU in July 2006 that restricts the useof speciﬁc hazardous substances found in electrical and electronic products.

Risk Assessment of Chemical Substances
In FY2015, we assessed the health risks related to chemical
substances at all of our production bases in Japan. In FY2016, we

assessed risk of explosion and fire from chemical substances at
the Gifu South Plant and Gifu East Plant. For the assessment,
we explained to all of our departments that handle chemical
substances about the three elements for combustion (i.e.,combustibles, oxygen and ignition sources), flashpoint and ignition
temperature, which are the basic factors in explosions and fires.
Chemical substances handled by the plants include invisible
gaseous substances and those with flashpoints below room
temperature. By conducting risk assessments and sharing
information Groupwide through the chemical substance database,we strive to provide useful information to those who handlechemical substances so that they understand the importance ofeliminating ignition sources to prevent explosions and fires causedby chemical substances.

Response to PCB Disposal
Transformers and other electrical equipment containing PCBs are
stored securely at each of our business establishments. We
concluded a disposal contract with a company specializing indetoxification processes and started disposal in FY2012.
We have been promoting the disposal of transformers at eachGroup company, and will complete the disposal of the electricalequipment we have stored by the end of summer 2020. We willcontinue with appropriate disposal of equipment that exhibits low
concentrations of PCBs.

ISO 14001 Certification Acquisition
In order to systematically develop initiatives for environment conservation, we are introducing and promoting an ISO 14001 environmental
management system. We will shift to the 2015 edition sequentially in renewal examinations.

Japan

32

Overseas
KYB

Year of Certiﬁcation
Registration

Gifu South Plant (Including Gifu East Plant,
Production Technology R&D Center, Machine Tools
Center, KYB Motorcycle Suspension Co., Ltd.)

Feb. 2000

Sagami Plant (Including the Basic Technology R&D
Center and the Electronics Technology Center)

Dec. 2000

Kumagaya Plant

Group Companies Overseas

Year of Certiﬁcation
Registration

KYB Manufacturing Taiwan Co., Ltd. (Taiwan)

Jun. 2001

KYB Steering Spain, S.A.U. (Spain)

Jun. 2001

KYB Suspensions Europe, S.A.U. (Spain)

Dec. 2001

KYB Americas Corporation (United States)

May 2002

KYB (Thailand) Co., Ltd. (Thailand)

Jul. 2003

Dec. 2000

KYB Steering (Thailand) Co., Ltd. (Thailand)Aug. 2003

Gifu North Plant (Including KYB Kanayama Co., Ltd.)

Dec. 2001

PT. Kayaba Indonesia (Indonesia)

Nov. 2004

Group Companies in Japan

Year of Certiﬁcation
Registration

KYB-UMW Malaysia Sdn. Bhd. (Malaysia)

May 2005

KYB-UMW Steering Malaysia Sdn. Bhd. (Malaysia)

May 2005

Kayaba System Machinery Co., Ltd. (Mie Plant)

Dec. 2000

Takako Vietnam Co., Ltd. (Vietnam)

Jan. 2007

Takako Industries, Inc. (Shiga Plant)

Feb. 2003

KYB Manufacturing do Brasil Fabricante deAutopeças S.A. (Brazil)Mar. 2007

KYB-YS Co., Ltd.

Apr. 2004

KYB Industrial Machinery (Zhenjiang) Ltd. (China)

Apr. 2009

KYB Trondule Co., Ltd.

Nov. 2008

KYB Manufacturing Czech, s.r.o. (Czech Republic)

Aug. 2009

Changzhou KYB Leadrun Vibration Reduction
Technology Co., Ltd. (China)

Jan. 2010

Wuxi KYB Top Absorber Co., Ltd. (China)

Nov. 2013

KYB Group Report 2020

Takako America Co., Inc. (United States)

Feb. 2013

KYB Manufacturing Vietnam Co., Ltd. (Vietnam)

May 2013

KYB Advanced Manufacturing Spain, S.A.U. (Spain)

Jun. 2015

Environmental Management

OSHMS and ISO 45001 Certification Acquisition
In order to systematically implement initiatives to build an
occupational health and safety management system andstrengthen its foundation, we are introducing and promoting
OSHMS ISO 45001. We introduced OSHMS at the Gifu North
Plant in FY2004, and we have been rolling it out Groupwide(OSHMS in Japan and ISO 45001 overseas).

Our overseas bases have acquired OHSAS 18001 certification.
We will gradually promote the shift to the international standard
ISO 14001 environmental management system.

Bases with OSHMS and ISO 45001 Certification (As of April 2020)
Japan (OSHMS)

Overseas (OHSAS 18001 and ISO 45001 Certification)

Gifu North Plant (Including KYB Kanayama Co., Ltd.)KYB Americas Corporation (United States)

Gifu South Plant (Including Gifu East Plant, Production Technology R&D
Center, Machine Tools Center, KYB Motorcycle Suspension Co., Ltd.)KYB (Thailand) Co., Ltd. (Thailand)
PT. Kayaba Indonesia (Indonesia)

Sagami Plant (Including the Basic Technology R&D Center and theElectronics Technology Center)

KYB-UMW Malaysia Sdn. Bhd. (Malaysia)

Kumagaya Plant

KYB Industrial Machinery (Zhenjiang) Ltd. (China)

KYB-UMW Steering Malaysia Sdn. Bhd. (Malaysia)

KYB Manufacturing Czech, s.r.o. (Czech Republic)

Takako Industries, Inc. (Shiga Plant)

Changzhou KYB Leadrun Vibration Reduction Technology Co., Ltd. (China)
KYB-YS Co., Ltd.

Wuxi KYB Top Absorber Co., Ltd. (China)

KYB Trondule Co., Ltd.

KYB Manufacturing Vietnam Co., Ltd. (Vietnam)

Environmental Accounting
The amounts of investment and cost were calculated with reference to the Environmental Accounting Guidelines, 2005, provided by the
Ministry of the Environment.

(Millions of yen)

Cost Type(1) Businessarea cost

Major Contents

Invested Amount/Cost(1)-1 Pollution prevention cost

• Air pollution and water pollution prevention activities• Maintenance and inspection of pollution prevention facilities• Analysis and measurement of atmosphere and water quality

305.9(1)-2 Global environmental
conservation-cost• Energy conversion• Energy-saving activities

19.5(1)-3 Resource circulation cost

• Recycling of plant waste• Reduction of industrial waste

367.4(2) Upstream/downstream cost

Not available

0.0(3) Management activity cost

• Maintenance and management of ISO 14001• Monitoring of environmental impact

91.7(4) R&D cost

• Environmentally friendly product development• Lightweight products and products containing less hazardous chemical
substances

77.0(5) Social activity cost

• Support of non-proﬁt environmental protection• Afforestation and maintenance of scenery around plants

20.2(6) Environmental remediation cost

Not available

0.0(7) Other cost

• Internal environmental conservation• Welfare conservation

22.7

Grand total

Not available

904.3

Note: Classification and Definition of Environmental Conservation Costs
Invested amount: Expense for the purpose of environmental conservation during the target period with effect that continues for a number of terms and running cost for
those periods.
Cost: Cost or loss generated from expenditure of finances/services for the purpose of environmental conservation.

KYB Group Report 202033

Environmental Management

Activities at Production Bases
Energy Savings by Introducing Inverter Pumps for
Coating Equipment Pretreatment

Reducing Environmental Impact with LED
Lighting in Plants

KYBT (Thailand) is moving ahead with replacement of inverter
pumps when upgrading pretreatment pumps. By switching to
inverter pumps, we were able to reduce CO2 emissions by 87.75
t-CO2 annually. Furthermore, the equipment is expected to reduce
maintenance costs due to its few components.

The Gifu North Plant has been phasing in LED lighting since FY2017.
In FY2020, we also reduced lighting in conjunction with the move
to 2,500 LED spotlights in offices and plants. The use of LED
lighting reduces energy consumption by the crude oil equivalentof approximately 160 kℓ per year. We will promote the shift to
LED lighting at other Group plants.

Reducing Material Transportation throughIn-house Production
At KYB Advanced Manufacturing Spain, total truck mileage driven
was shortened by moving manufacturing in-house in FY2019 andreducing material transportation. As a result, we were able toreduce CO2 emissions by 55% and annual emissions to 14 tons.

Improvement of Local Environment(Reduction of Neighborhood Noise)KYB Suspensions Europe in Spain is near a residential area, and wehave reduced noise levels in the daytime by 55 dBA and by 50
dBA at night. We measured at 33 points, made a soundproofing
plan, tested effectiveness in advance, and then implemented theinitiative. As a result, noise was reduced at all measurement
points. Significant noise reduction was achieved at all of the mostimportant peripheral points, especially at night. The initiative wasalso approved by the government of Navarre.

Reducing Environmental Impact by Upgrading
Cationic Electrodeposition Coating Equipment
The Kumagaya Plant
now employs zirconium
conversion coating, a first in
the special-purpose vehicleindustry, as the pretreatment
for undercoating. In 2018,
we upgraded cationicelectrodeposition coating
equipment and started
full-scale operation in May 2019. Compared to the zinc phosphatecoating used by many companies with cationic electrodeposition
coating equipment for chemical conversion coating, sludge was
reduced by about 90%, and since heavy metals, phosphorus andnitrogen dioxide are not used, the amount of environmentallyhazardous substances generated was greatly reduced. In addition,
the upgrades improve the paint quality for concrete mixer trucks,
which need an exterior that is both highly durable and attractive.
We will make further efforts to create products that areenvironmentally friendly and contribute to society.
34

KYB Group Report 2020

Industrial Waste Reduction by Extending the
Cleaning Liquid Replacement Cycle
Plant No. 1 of KYB Kanayama Co., Ltd. made cleaning liquid
replacement quantitative rather than periodic in FY2018. As aresult, the plant was able to reduce the amount of effluent by
one-third. KYB Kanayama also broadened deployment of thissystem to Plant No. 2 in FY2019 to further reduce industrial waste.

Compressor Operation Review to Save Energy
KYB Kanayama reviewed
air supply operations due
to oversupply at certain
times of day. The resulting
improvements reduced monthly
electricity consumption by
21,120 kwh from 311,680 kwh
to 290,560 kwh, and reduced CO2 emissions by 11,088 t-CO2.

Waste Reduction by Introducing Garbage
Processing Equipment
Approximately 350 kg of garbage was discharged from thecafeteria at the Sagami Plant per month. A garbage processor was
introduced to enable in-house garbage disposal, resulting in zero
emissions and reduction of processing costs. In addition, this device
uses microorganisms to decompose food waste into water andcarbon dioxide, thus contributing to environmental protection.

“Special Award for Outstanding Foremen in
Occupational Safety” from the Minister of Health,
Labor and Welfare
In January 2020, the assistant manager of the Manufacturing
Department of Hydraulic Components Operations at the Gifu
South Plant received the “Special Award for Outstanding Foremenin Occupational Safety” from the Minister of Health, Labor andWelfare. This was the fourth time a KYB Group employee hasreceived this award, which recognizes an outstanding foreman
who has practiced appropriate safety guidance with a high levelof safety awareness. We will continue to put the safety of ouremployees first as we strive for zero occupational accidents.