NGK SPARK PLUG GroupCSR Report

2016

CSR Report <Digest Version>

Ceramic Type Glow Plug
Iridium PlugCo
Contributing
to low fuelconsumption throughoutstanding ignitability
and durability

Contributing to
improved combustionin diesel engines andreduction of exhaustgas, with excellent hightemperature durability

Our Main Products

Exhibiting Visible Effects
in Unseen Places
Even though many of our products are small, they actually make a big
contribution to your life, society and the environment.

Packages for Image Sensors

Contributing to image sensor
C
technology in consumer,
industrial, and medical
applications

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CSR Report 2016 Digest Version

BIDEMICS for Aircraft
Component Processing
Applications

Contributing to theaircraft industry
through long life andhigh cutting speedZirconia Exhaust Gas
Oxygen Sensor

Contributing to cleaner exhaustgas as a key component
in air-fuel ratio control
CONTENTS
1 Our Main Products
15 Responsibilities and Actionsfor Stakeholders
3 Our Business Activities
15 With Our Customers
5 Message from the President
17 With Our Shareholders and Investors
9 Special Feature
18 With Our Suppliers
Our CSR Activities

19 With Our Employees
23 With Local Communities andInternational Society

25 Responsibilities and Actions
to Environment
25 For Environmental Protection

29 Management
29 Corporate Governance
30 Compliance/Risk Management

Editorial Policy
The CSR Report 2016 is edited with the intention of informing all of our various stakeholders about the CSR activities of the NGKSPARK PLUG Group. Please refer to the Company’s website for detailed information.

https://www.ngkntk.co.jp/english/csr/

Bone Filling Materials (Bio Ceramics)

Contributing to recovery frombone fractures and bone loss
on the frontline of advanced
medical treatment

NGK SPARK PLUG Group2

JapanConsolidated subsidiaries ····· 10
Unconsolidated subsidiaries ····· 1
Equity method affiliates ····· 1
Non-equity method affiliates ····· 1

Asia / South America /Other
Consolidated subsidiaries ····· 19
Unconsolidated subsidiaries ····· 2
Equity method affiliates ····· 1
Non-equity method affiliates ····· 3

Our Business Activities

Contributing to Local Communities
Right Across the WorldNet Sales

Net Income
Non-consolidated

Consolidated(million yen)383,272

347,636
329,758
302,798
284,746
266,468 278,166 279,161
280,000
224,811 220,328
210,000
350,000

Non-consolidated(million yen)
25,52428,000 24,475
21,000140,000

14,00070,000

7,000

0

2011

2012

2013

2014

2015

(fiscal year)

Technical
Ceramics
15%

Automotive
Components
84%383,272

0

2011

20,90930,815
20,162

2012

2013

Other 11%

Asia 19%

2014

2015

(fiscal year)

Japan 16%

383,272(million yen)

Europe 25%

CSR Report 2016 Digest Version

36,75331,791

15,737(million yen)3

31,049Percentage of Sales Outside JapanNet Sales by Segment
Other 1%

32,70435,000Consolidated

North
America
29%
Outside
Japan

84

%

Europe
Consolidated subsidiaries ····· 4North America
Consolidated subsidiaries ····· 7
Unconsolidated subsidiaries ····· 3

and the Environment
Ratio of operating income to net sales
Consolidated
(%)

17.9

18.0

17.3

15.7

15.0
12.0
9.0

8.6

7.8

2011

2012

6.0
3.0
0

2013

2014

2015

(fiscal year)

Corporate Outline (as of March 31, 2016)
Company name:
Headquarters:
Establishment:
Capital:Business:

NGK SPARK PLUG CO., LTD.
14-18, Takatsuji-cho, Mizuho-ku, Nagoya
October 26, 1936
47,869 million yen
1. Manufacturing and selling spark
plugs and related products forinternal-combustion engines
2. Manufacturing and selling technicalceramics and applicable productsGroup companies: 46 subsidiaries (11 in Japan and 35
outside Japan) and six affiliates

No. of Employees
Non-consolidated(People)15,00012,760No. of Group
employees:

14,524

13,197

12,000
9,000
6,000

5,809

5,823

Consolidated

5,829

3,000
0

2013

2014

2015 (fiscal year)

NGK SPARK PLUG Group4

President’s Message
for Stakeholders

Delivering Real Valueto All Stakeholders
Shinichi Odo

Representative Director
Chairman of the Board
Chief Executive Officer
President Officer
NGK SPARK PLUG CO., LTD.

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CSR Report 2016 Digest Version

I would like to begin by offering my condolences to those affected by the large earthquakethat struck Kumamoto in April 2016. I pray for everyone’s safety and a speedy recovery.

The NGK SPARK PLUG GROUP’s Approach to CSR Management
NGK SPARK PLUG was founded in 1936 and celebrated its 80th anniversary in 2016.
Today, we proudly supply products that are truly indispensable to society. I am very
grateful for the patronage and support of stakeholders and the hard work of ourpredecessors that made this possible. At the same time, we are determined to achieve
greater sustainable growth by our 90th and 100th anniversaries.
This means that each and every employee must always consider the value of ourexistence from the perspective of stakeholders in order for us to realize sustainablegrowth while fulfilling our responsibilities to society. This is because together thecompilation of each and every employee considering the meaning and purpose of theirwork, their ability to growth professionally, and the value they can provide to stakeholders
represents the real value we deliver to stakeholders as a company. This also represents a
responsibility we bear toward society and the very meaning of our existence as acompany. Having employees think and act will lead to their personal growth, the growthof the company, and, as an extension, enable the company to contribute to the growthand development of society as a whole.
On top of this, we are able to create the value we provide as a company only after
employees establish and implement targets based on the company’s mission and targets,whereby the targets of each
employee and the company areintertwined. This connection
between employees and thecompany as well as society
represents the roots of our CSR,
I believe. It also represents the
NGK SPARK PLUG GROUP’s
approach to CSR.

NGK SPARK PLUG Group6

President’s Message for Stakeholders

The NGK SPARK PLUG GROUP’s Responsibilities to Society
A corporation must enhance corporate value and achieve sustainable growth. This corporate
value comprises not only business value such as sales and profits, but also social value.
I believe that we can fulfill our responsibilities to society only after balancing thisbusiness value and social value, while also correctly understanding the expectations ofstakeholders. The NGK SPARK PLUG GROUP constantly strives to enhance corporate value
based on the following approaches.
• We will prepare for natural disasters on a daily basis and strive to ensure a quick
restoration of service and stable supply of products in the event of a disaster.
• We will establish a robust governance system and strive to enhance managementtransparency and greater awareness of compliance to avoid fatal scandals that could
negatively affect the operations of the company.
• We will supply high quality products to customer following our long-standing
commitment to quality and establish sound relationships with suppliers in order tomanufacture high quality products.
• We will work on a wide range of relationship building in order to foster correctunderstanding of the NGK SPARK PLUG GROUP, while strengthening our message tosociety and raising the visibility of the NGK SPARK PLUG GROUP, deepening two-way
communication with stakeholders.
• Although we are focusing on the greater involvement of women in the workplacewith diversity positioned as a key management issue, we will expand our efforts tocreate sound workplaces globally where diverse human “assets” can thrive
professionally irrespective of nationality, age or disability.
• We will always support development of the local communities where we operate andstrive to achieve coexistence by giving back to these communities in various ways.
• We will carry out business activities considerate of the environment, being fully
mindful of environmental issues and focusing the development and provision of
products and services that help to alleviate environmental issues.

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CSR Report 2016 Digest Version

Delivering Real Value to Stakeholders
This year marks the seventh year under the NGK SPARK PLUG GROUP’s The Evolution of
NGK SPARK PLUG, which represents a long-term management plan detailing our vision
for 2020. The Evolution of NGK SPARK PLUG, which started in 2010, is separated into thethree stages of Delving, Renovating, and Evolving, and, through efforts in each of thesestages, ultimately we will provide Real Value to all stakeholders.
This Real Value becomes real value only after our approach aligns perfectly with the
expectations of stakeholders. Our business environment continues to change at an
unprecedented pace, while the expectations of stakeholders and our role in society, too,
continue to change. Based on a correct understanding of these changes, we willthoroughly explain our approach and utilize stakeholder feedback in our efforts to further
enhance corporate value. We must use this cycle to deliver Real Value to all stakeholders.
We hope to be a company that is truly indispensable to the world even in 20 years
when we celebrate our 100th anniversary. To become such a company, employees musthave pride in their work, consider their responsibilities and what Real Value means forstakeholders, produce results, and be able to explain this approach and perspective with ease.

NGK
Existing
SPARK business
PLUG

DelvingRenovating

FY2010 to 2012

FY2013 to 2015

Delve into existing
business and seek
new business

Launch new
products or new
business

Evolving

FY2016 to 2018

Develop existingand new businessat an accelerated rate

Real
Value

NGK
SPARK PLUG
in 10 years• Monozukuri
Company• Highly Profitable
Company• Progressive
Company• Human “Asset”
Company

We are pleased to announce the release of CSR Report 2016, which details our activities
during fiscal 2015. We very much appreciate your honest and unreserved comments
and opinions.

NGK SPARK PLUG Group8

Special Feature

Our CSRNGK SPARK PLUG, CO., LTD., which celebrated
the 80th anniversary of its establishment this year,
will continue to be an indispensable company
that fulfills its social responsibility to all stakeholders,even beyond our 90th and 100th anniversaries.

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CSR Report 2016 Digest Version

Our CSR
CSR is usually translated into Japanese as “kigyo no shakaiteki sekinin (corporate social responsibility).”
However, we communicate it to our employees as “meeting stakeholder expectations and needs
through our business to make stakeholders happy,” which is easy to understand.

An Unchanging Aspiration from Our Establishment to the Present Day
The Aspiration Contained in Our Founding Charter
NGK SPARK PLUG was established in 1936 in a spin-off of
the Spark Plug Division of NGK INSULATORS, LTD., ourfounding entity.
This is the Founding Charter created 80 years ago when
NGK SPARK PLUG first came into being. This Founding
Charter allows us a glimpse of the objectives and aspirations
at the time of the company’s establishment. According tothis, “The internal combustion engine was in the process ofshifting into exports due to rapid progress in traffic conditions.
NGK INSULATORS, LTD., which has focused on this, hasrepeatedly conducted research into spark plugs since 1922,
and we will establish NGK SPARK PLUG CO., LTD. in orderto further develop and advance this area, contributing tonational culture.”
In other words, it can be seen that NGK SPARK PLUG
was established with the objective of contributing tonational culture (the internal combustion engine industry).

Founding Charter“Contributing to national culture”
The Aspiration Contained in Our Corporate Philosophy

Corporate
Philosophy

2Management
Policy3
1

ActionGuideline

We created our Corporate Philosophy in 1996, the 60th
anniversary of our establishment. A corporate philosophy
expresses a constant approach for a company to promote
its business activities.
The three elements of Commitment, Management
Policy and Action Guideline constitute our Corporate
Philosophy, which states, “We will deepen mutual trust andconfidence, suggest new value with our eyes on the future,and contribute to the peoples of the world” as its slogan.

Commitment“Contributing to the peoples of the world”
Thus, while the times when each of them was created are different, NGK SPARK PLUG has maintained
a constant aspiration to “contribute to the nation and the world,” that is society, since its establishment.

“Wanting to serve society through business”
NGK SPARK PLUG Group10

Building Positive Relationships with Society Through BusinessOur connections with society

Customers

Shareholders
and Investors

Suppliers

Local Communities
and International
Society

Environment

Employees

NGK SPARK PLUG engages in business activities with the aspiration of “wanting to serve society
through business.” Society here indicates the people and organizations with which we haverelationships and they are called “stakeholders.”“Stakeholders” refers to the suppliers that deliver raw materials and equipment to us, thecustomers that buy the products we sell, and the employees involved in our business activities.
The shareholders and investors that provide us with capital and the local communities andinternational society where we have production and sales sites are also our stakeholders.
Meanwhile, although not a stakeholder in the sense of referring to people or organizations, weare also connected with the environment that takes in the CO2 and the waste discharged by ourbusiness activities and consideration for the environment is also a responsibility that a company
should fulfil.

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CSR Report 2016 Digest Version

Acting in Accordance with Our Promotion System Basedon Our CSR Philosophy and Policy
Organization of our CSR Philosophy and Policy
Enhancement of Corporate Value

Corporate
Philosophy
Corporate Codeof Conduct

We act based on our Corporate
Code of Conduct and
our CSR Policy in order to realize
our Corporate Philosophy.

• Human Resource Policy• Occupational Safety and
Health Basic Policy• Social Contribution Policy• Environmental Policy• Risk Management Policy• Compliance Policy• Information Security Policy• Corporate Quality Policy• Information Disclosure Policy• Procurement Policy

CSR Policy

CSR Promotion System
CSR Committee

Risk Management Dept.
(Secretariat)

Chairman: President & CEO

BCM-WG

Quality
Committee

Safety and HealthCommittee

Environment
Committee

CSR Procurement
WG

Confidentiality
Management
Committee

Risk Management
WG

Export Control
Committee

Compliance
Committee

The CSR Committee determines the priority themes for each fiscal year, to implement CSR Policy.
The Committee also oversees and evaluates CSR-related activities implemented by the respective
expert committees and divisions, and makes appropriate proposals regarding them, so as toachieve full optimization of CSR activities, thereby strengthening our business foundations.
The CSR Committee sets up respective working groups as deemed appropriate, each ofwhich holds discussions on specific themes to develop countermeasures.
We have established a company-wide CSR promotion system by securing close coordination
between the CSR Committee, the CSR Promotion Sub-Committee and expert committees.
NGK SPARK PLUG Group12

Establishing Targets for CSR Promotion Activities
We have identified the material issues for the NGK SPARK PLUG Group and establishedmedium-term targets for fiscal 2020 and short-term targets for each year. In the establishment ofshort-term targets, the individual expert committees and departments prepared targets reflecting
the Corporate Philosophy, Corporate Code of Conduct and CSR Policy based on a recognition of
expectations and needs from stakeholders, and these targets were approved by the CSR Committee.
Fields of Activities

Medium-term targets (by fiscal 2020)· Promote a CSR PDCA cycle on a global basis

Company-wide
CSR Management · Promote CSR awareness-raising activities on a global basis

Department in charge
Risk Management Dept.

Compliance· Construct a global promotion system
Company-wide
Promotion
System· Continue education on helpline content· Continue compliance awareness and knowledge training

Compliance Committee· Continue monitoring of compliance awareness and knowledge and corporate culture change
Security Control· Deploy educational tools to NGK SPARK PLUG and group companies in Japan andmonitor implementation status and effectiveness· Continuously improve security control, including group companies, and establish system
for surveillance of implementation status

The Confidentiality
Management Committee

Export Control· Establish a system for surveillance of implementation status of appropriate export
controls, including group companies

The Export Control
Committee

Information
Security· Continuously reduce security risk of group companies through deployment of Group
Information Security Regulations

Information Systems
Dept.

· Implement patent review activities for mainstay products prior to design review meeting,including group companies

Management· Establish new methods to deal with increasingly sophisticated counterfeiters, particularly
Respect for and in emerging countries
Protection ofIntellectual Property· Have at least 15% of submitted patents be differentiation patents utilizing a patentIntellectual
Dept.
portfolio that adds rivals’ information
Property Rights· Implement IT-BCP measures· Involve trademark aspects in strengthening our brand organization· Enhance intellectual property education, including group companies
Risk Management· Expand business continuity management system to group companies in Japan
BCP/BCM

With Our
Customers· Construct a management system that can respond to not only earthquakes but also
other disasters

BCM Working Group· Construct a procurement BCP framework and expand and operate it at group companies

Procurement Group· IT-BCP countermeasures for server infrastructure (cloud utilization)

Information Systems Dept.

Company-wide· Build company-wide risk management suited to NGK SPARK PLUG
Risk Management

Risk Management Dept.

Safety andQuality

With Our
Information
Shareholders
Disclosureand Investors

Quality Committee,
Corporate Quality· Expand quality management to all group companies aimed at delivering value to all customers Management Div.
· Disseminate information that leads to increased shareholder trust
Public Relations Dept.
· Expand quality assurance to all group companies with a focus on goods for all customers· Disseminate information in an easy-to-understand and approachable manner on a
global level

Risk Management Dept.

· Construct a framework for an IR strategy aimed at institutional investors

Accounting & Finance
Dept.

· Disseminate information that captures stakeholders’ expectations and the changes insocial trends

Risk Management Dept.

· Implement fair evaluations that correspond to clear expectations· Establish educational programs that target the leaders of each group company
With Our
Employees

Employment andHuman Rights· Employ diverse human resources strategically· Achieve personnel and human resource functions that contribute to the promotion ofmanagement strategy· Further encourage the promotion of active participation by women13

CSR Report 2016 Digest Version

Human Resources Dept.

Fields of Activities

With Our
Employees

Medium-term targets (by fiscal 2020)

Employment
and Human
Rights· Zero workers leaving their jobs in order to provide nursing care

Occupational
Safety and
Health· Raise productivity by decreasing the rate of onset of mental illness

Department in charge· Achieve the mandatory number for employment of people with disabilities

Human Resources Dept.

· Promote active participation by seniors· Develop systems that make it difficult for accidents to occur aimed at developing a
global safety culture

Environment & Safety
Management Dept.

· Improve the framework for evaluation aimed at global optimum procurement anddeploy and operate at group companies

Procurement Div.

With Our
Suppliers

CSR
Procurement

With Local
Communities
and International
SocietySocialContribution· Continually enhance the social status of the NGK SPARK PLUG Group through social
contribution activities

Public Relations Dept.

For Environmental
Protection

Environment· Promote environmental activities aimed at achieving global Eco Vision

Environmental Committee,
Environment & Safety
Management Dept.

· Reduce risk in the supply chain by thoroughly establishing CSR procurement

Procurement Div, Risk
Management Dept.

· Promote education and enlightenment aimed at reducing risk utilizing supplierseminars, etc.

Implementing Initiatives Aimed at Raising Awareness of CSR
We continuously implement CSR awareness-raising activities.
We have been running elementary CSR training since 2014 as an awareness-raising activity soeach and every employee feels more familiar with CSR.
Our elementary CSR training is expected tolead to changes in awareness about work, anincrease in motivation, and pride in thecompany as employees become aware of theconnections between themselves and society
and of their contribution to society.
In addition, we regularly publish the CSR
Newsletter and hold lectures by experts tocontinually raise awareness of CSR.
Training

Each Individual Is Aware, Considers, and Acts
In our elementary CSR training, after learning about the establishment of the company,
the significance of CSR, and relationships with stakeholders, employees participate ingroup work that uses card games which get participants to recognize who theirstakeholders are and to consider by themselves how to make these stakeholders happy.
By being aware of and considering the fact that the company makes stakeholders
happy in various ways, the awareness of individual employees changes and their actions
change. As a result, the company changes and makes stakeholders happy again. Throughsuch a cycle, we will continue to be a company that is indispensable to the world.

Making stakeholders HappyNGK SPARK PLUG Group14

Responsibilities and Actions for Stakeholders

With Our Customers
Our company is able to continue its
business activities through the
manufacture of goods and thesubsequent purchase of these bycustomers. We are always aware ofcreating the best value for customers,
and strive to provide products with
the quality, price, technology, andsafety that customers demand, always
on schedule.

Expectations and demands of customers
Quality

SafetyDelivery
date

Price

Customers
Technology

Service

CSR Policy
Corporate Quality Policy
We are committed to “Customer focus”,“Involvement of all members”, “Continuous
Improvement”, to provide “Quality Products”
to the society, and create new value.

Making customers

Happy

by meeting the above

Running “Quality Activity Events” Year RoundWe run quality management events year round, not only in Japan’s Quality Month which isheld every November. Our quality expos are held at all the sites of group companies in Japanand are visited by more than 5,000 employees each year. We established the expos as anopportunity to share our approach to quality
as well as the diverse quality-related initiatives
in workplaces. In addition, we work tomaintain and enhance quality through arange of events such as raising awarenessabout quality through collection of quality
slogans and attendance at lectures on quality,
evaluation of the results of activities at QC
Circle workshops, and promotion of problem
solving through tours of inspection by local
senior management, including overseas
business sites.
A quality expo

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CSR Report 2016 Digest Version

Quality Training Raising the Quality of Our Manufacturing

Quality training

We are working to develop our human “assets”
as “making things is making people.” We haveestablished training programs that include
quality control and QC Circle Activities, andmany of our employees attend these programs.
We are also further strengthening moreadvanced support activities at sites. We expectthat training participants will gain significant
awareness by revising points on techniquesthrough familiar themes in addition to spreading
this awareness to the employees around them.

Voice of Our Training Leader

Moving from Knowing to Being Able
to Use Quality Knowledge

Fujii

Corporate Quality Management Div.

In our quality training programs, we hear feedback on
being able to acquire knowledge such as “I obtained new
knowledge” and “I found out about points for analysis.”
We are providing practical instruction on the themes ofindividual employees in order to turn this knowledge into
something that can be applied to practice. Going forward,
we will continue to enhance the quality of products andwork through the development of human “assets” withthe ability to apply quality knowledge to practice.

Communication through Exhibitions and Events
We make sure to have PR booths at exhibits
and motor sports events. These provide
valuable opportunities that allow us to meetwith customers and explain our products
and technologies directly, and we also use
these opportunities to identify constantly
evolving needs.

<44th TOKYO MOTOR SHOW 2015>
We used exhibited diorama of towns where people live to
explain our products and technologies which are widely usedin motorized societies in a way that was easy to understandwith the theme “A dancing heart, driven by NGK.”<PR booth exhibits at race circuits>
In fiscal 2015, we exhibited a total of six times in PR booths
at race circuit venues when motorcycle and automotive
racing events were being held. In addition to introducing
our products to motor sport fans, we held stage events
that included bingo games and spark plug replacement
experiences in which many customers took part.

NGK SPARK PLUG Group16

Responsibilities and Actions for Stakeholders

With Our Shareholders and Investors
Our company has received investment
from many shareholders and investors.
We work to make timely andappropriate disclosure of information
through IR activities and on our
website, while enhancing our corporate
value and paying stable dividends.
CSR Policy

Expectations and demands ofshareholders and investors
Information
disclosure

Stabledividends

Timelybriefings

Shareholders
andinvestors

Improvementof businessperformance

Information Disclosure Policy
Aiming to become an enterprise capableof receiving great support and popularity
from people around the world, we strive
to conduct transparent business operations
and fair information disclosure.

Making shareholders
and investors

Happy

by meeting the above

Engaging in Activities to Make Shareholders and Investors Familiar
with NGK SPARK PLUG CO., LTD.
We hold company briefing sessions for shareholders and investors. In fiscal 2015, in order toraise our profile, which remains low nationwide, we visited areas all over Japan again to get
the unedited opinions of investors and our shareholders. We will continue to value dialogue
with all investors and our shareholders.
Voice of Our Investor Relations
Representative

Aiming to Raise Corporate Value
Uchikawa

Public Relations Dept.

Our goal in the Public Relations Department is to get all
stakeholders to understand the company “accurately,”“deeply,” and “constantly,” to raise corporate value.
Going forward, we will continue to make every
effort to disseminate the appropriate information andraise the quality of communication.

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CSR Report 2016 Digest Version

Responsibilities and Actions for Stakeholders

With Our Supplier
Our Group is able to create and sell its
products thanks to the provision of raw
materials, components, and more by
suppliers. Our suppliers are valuable
partners of our company; we aim toconstruct sound relationships with
suppliers and grow together.

Expectations and demandsof suppliers
Equitable
dealings

Education
supportCSR Policy

Properpayment

Suppliers

Cooperative
relationship

Procurement Policy
We aim to realize globally optimal procurement
based on our quality products principle. To thisend, we focus on strengthening cooperation
with suppliers and promoting our CSR efforts
throughout our supply chain system, while at thesame time striving to carry out proper purchasingtransactions when procuring materials and parts,
based on the following guidelines:

Making suppliers

Happyby meeting the above

Promoting Follow-Up Activities for Regular Supplier Assessments
Once a year, we conduct regular assessments of targeted suppliers and inform them of theresults. We visit suppliers where follow-up is particularly required to consult about
difficulties, carry out onsite confirmation, consider together what to improve so as toovercome weaknesses and implement improvement activities. We will continue to further
deepen our relationships of trust with suppliers not only through day-to-day purchasingtransactions, but also through follow-up and support activities.
Voice of Our Supplier Improvement
Promotion Organizer

Improvement through Communication
NakataProcurement Div.

Our hope is that follow-up activities for suppliers translate
into continuous improvement of suppliers.
Therefore, rather than unilaterally requesting
improvements, we try to listen to suppliers’ opinions tolink together improvements that are satisfactory to bothof us.

NGK SPARK PLUG Group18

Responsibilities and Actions for Stakeholders

With Our Employees
The business activities of our Group are
made possible by the respective roles
played by our employees. We consider our
employees to be human assets, and strive tocreate work-friendly environments in which
diverse employees can work in safety.

Employees’ expectations
and demands
OccupationalsafetyWe acknowledge that employees are the mostimportant management resources. In light of
this, we respect the diversity and individuality of
our employees and cultivate abundant humanresources, striving to promote the further
development of our Group as a whole.

Employees
Welfarebenefits

Appropriate
evaluations

Making employees

Happy

Basic Policy on Industrial Safety and Health
We strive for occupational safety and health as
the starting point of business activities on thebasis of respect for human life and dignity.

Education

HealthCSR Policy
Human Resource Policy

Diversity

by meeting the above

Promotion of Diversity
We promote diversity in our organization as we believe that diversity and inclusion are
essential for companies to attain sound growth and ensure happiness for all employees.
Here, diversity means an employee-friendly workplace that accepts different personnel“assets” (one in which all people regardless of their gender, age, disability or nationality,
enjoy their work) and includes diverse values and ideas that move the company forward.

Focus on Employing Non-Japanese Nationals
Since 2013, we have started putting a particular focus on employing non-Japanese nationals
in our new graduate recruitment, and have consistently employed at least three non-Japanese
students each year.
Moreover, recently we have not only been putting efforts into employing foreign students
at Japanese universities, but also non-Japanese students who have learned Japanese atuniversities overseas and wish to find work in Japan.
We have been active in this way from the angle of recruitment with aim of forming
a global organization to respond to rapid globalization.

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CSR Report 2016 Digest Version

Strengthening and Maintaining Initiative to Promote Active
Participation of Women
We are promoting the active participation of women as a management strategy from the
top down. The “DIAMOND Project” launched in June 2013 with the following principles:“changing the corporate culture,” “changing the consciousness,” and “changing theenvironment.” We hold events, such as “Forum for Female Employees,” “Training for Next
Generation Female Leaders,” and “Career Advancement Support Program,” “Career
Training for Employees Returning from Childcare Leave,” and “Women’s Networking” tosupport female employees in building their career and to stimulate their ambition. We also
held lecture meetings for all senior managerial employees once or twice a year to deepen
their understanding of diversity management.
Furthermore, in all departments, including those of Japanese group companies, generalmanagers devised and implemented action plans that suited their own departments. In fiscal 2015,
we presented Encouragement Awards to departments with outstanding initiatives. We arealso expanding systems to create a workplace that is more comfortable for female employees.
Voice of the Project Leader

We Aim to Create a Company Where
All Employees Can Play an Active Role
OtsukaHuman Resouses Dept.

Our company has many excellent female employees.
I hope we will be a company where all employees canwork comfortably and their ideas can be realized.
Member of DIAMOND Project(Front row, center: Otsuka)

Efforts to Upgrade Monozukuri Skills

Practical training in the use of tools

NGK SPARK PLUG CO., LTD. is a manufacturing
company, and maintaining and upgrading
our monozukuri (manufacturing) skills isessential in order to continue producing
quality items. However, there are concerns
about a decline in monozukuri skills at
Japanese companies in general due to themass retirement of the baby boomers andthe shift of young people away frommonozukuri with the changing times.
Therefore, we established the Monozukuri
Education and Training Center andcontinually provide education and training
on the necessary knowledge and skills at theappropriate times.

NGK SPARK PLUG Group20

Responsibilities and Actions for Stakeholders

With Our Employees
Initiatives that Consider Work-Life Balance
We are promoting initiatives that consider the work-life balance of our employees. In fiscal
2013, the number of employees on childcare leave exceeded 50, and male employees havealso been taking leave each year recently. Moreover, almost all employees returned to work
after taking leave.
We have changed the system for the shorter work day for child rearing by extending
availability from the conventional period of the first grade of elementary school to the endof the third grade, allowing employees who wish to use the system to spend more time
involved in their children’s development.
Also, labor and management work together to make active efforts aimed at reducing
total actual working hours. Awareness raising
Number of Employees Using the Leave Schemes
posters have been put up at all worksites inPaternity leave
Maternity leave
Nursing care leave
efforts to set out and publicize initiatives in
Number of users (unit: persons)
employees’ own worksites. Long working
60hours are prohibited as a rule, and
55
53
1
48
4
Wednesdays are designated a simultaneous
47
50
45
45
3
1
1
1
company-wide “No Overtime Day.”40
At worksites that have been unable to
30
54
49
44
44
45
46
implement this, management and labor20
confirm the reasons for it as well as
10
3
2
2
1
1
0
countermeasures and make efforts for the02010 2011 2012 2013 2014 2015
rigorous implementation of this system.
(fiscal year)

Anti-harassment Measures
The company management and the labor union are working together to prevent any
harassment and to protect the human rights of all employees.
Work Rules explicitly prohibit all sorts of behavior that constitute harassment, and wehave an anti-harassment committee responsible for the prevention of such behavior by raisingawareness through the company newsletter and provide level-specific training programs.
Also, all plants have an advisor, who is designated jointly by the company management
and the labor union, to create an environment where it is easy for employees to voice concerns.

Toward Elimination of Occupational Accidents
In fiscal 2015, the total number of accidents was 13, and the total frequency rate was 1.06.
The number of accidents itself was at the same level as the past few years. However, theresults of labor and management’s joint safety and health activities which include risk

21

CSR Report 2016 Digest Version

assessment, on-the-spot risk prediction and pointing and calling are becoming apparent little
by little as accidents involving departments operating equipment that are likely to lead toserious accidents and accidents resulting in absence from work have been on a downward
trend. On the other hand, the percentage ofoccupational accidents involving temporary
workers is on the increase. Therefore, we areworking with temporary employment
agencies in an effort to reinforce training
and awareness and promote further
reductions in occupational accidents.
Furthermore, in fiscal 2015, we worked
to raise employees’ awareness of traffic
safety by introducing dashcams into
company-owned vehicles and holding traffic
safety seminars for all employees.
A traffic safety seminar

Safety and Health Committee Activities with Workers
in the Workplace
As one activity to create a safe and secure workplace, the Safety and Health Committee
introduced a new inspection technique called “Safety Observation” in fiscal 2015.
In the conventional inspections, there was a tendency to focus on identification of the
5S in the workplace. However, under Safety Observation, we check workplace risks, primarily
the actions of workers, by observing from a fixed place in the workplace because manyoccupational accidents occur due to unsafe actions during work.
Through Safety Observation, it is possible to be aware of unsafe actions that arise frommuri, muda, mura (unreasonableness, waste and inconsistency) by workers that is notnoticed when simply looking at work procedure manuals. Participants have also expressed
positive opinions including such comments as, “I felt that it is an effective way to improve
work methods.”
Voice of Our Safety and Health Leader

Participation by All Members
in Safety Declarations

Ichikawa

Environment & Safety Management Dept.

The cooperation of every single person working in theworkplace is needed in order to reduce industrial
accidents. During the safety, health and environment
conferences held at each plant every year in order to get
employees to think about safety a little and translatethoughts into action, we got people, including managers,
to fill out “My Safety Declaration.” We really want people
to put their safety declarations into practice in theworkplace as well and increase the amount of time they
spend thinking about safety.

NGK SPARK PLUG Group22

Responsibilities and Actions for Stakeholders

With Local Communities andInternational Society
Our company has established sites in every
region of the world. We respect local culture
and customs, and engage in smoothcommunication with local communities.
As members of those communities, we aim
to work together in building a comfortablesociety, and strive to participate in regional
development, environmental preservation,and other activities that contribute to society.

Expectations and demands of local
and international communities
Transportation
safetyEnvironmental
preservation

Regional
development

Local andinternationa
communities

Support for
culture andthe arts

CSR Policy
Social Contribution Policy
As a good corporate citizen, we at the NGKSPARK PLUG Group aim to contribute to society
through the effective use of management
resources.

Making local andinternational
communities

Happy

by meeting the above

Expanding our Locally Rooted Social Contribution Activities bothin Japan and Abroad
NGK SPARK PLUG CO., LTD.
To encourage the further development of
culture and the arts, as well as to contributeto the invigoration of local communities, we
held a musical event at NTK Hall in Nagoya,a venue that bears our company name inJapanese through a partnership in namingrights. We have held the event since 2013,
inviting residents of the community, families
in Aichi Prefecture who were impacted by
the Great East Japan Earthquake, andemployees of the company. In 2015, about
3,500 people came to the musical event.

Letters off appreciation
ppreciationnfrom visitors to the event

23

CSR Report 2016 Digest Version

NTK CERATEC CO., LTD.

Spark Tec Tono CO., LTD.

Taking our change of name as an opportunity andhoping to be a company loved by our home region of
Sendai, our Headquarters Factory made a donation ofrehabilitation equipment to the Sendai City Council ofSocial Welfare.

At the suggestion of employees, we took part in a local
cleanup within Kani, Gifu Prefecture. Employees fromthe Nino Headquarters Plant and the Tono Plant joinedwith members of their families, with 85 persons in total
taking part in the cleanup.

NGK Spark Plug (Shanghai) CO., LTD.

NGK Spark Plugs (U.S.A.), Inc.

Employees of our company stood at intersections on
non-working days to urge passersby to observe traffic
signals, contributing to the maintenance of orderly traffic
in the city.

We took part in the Adopt-A-Highway program,
becoming foster parents to the arterial road in front of
the West Virginia Factory and performing cleanups andplanting activities.

NGK Spark Plugs(U.K.) LTD.
Employees bicycled
through five European
countries to raise
funds for people with
Down syndrome.

Ceramica e Velasde Ignicao NGK
do Brazil Ltda.
We donated ceramictiles manufactured byour company, for use
as materials in
sculptures made inschools by local artists.

NGK SPARK PLUG Group24

Responsibilities and Actions to Environment

For Environmental Protection
The CO2 and wastes generated by ourbusiness activities have an impact on
the local and global environment. We
work toward environmental preservation
through means including energy
conservation, effective use of resources,
appropriate management of chemicalmaterials, and development and provisionof environmentally friendly products.

Concern for the global environment
Energyconservation

Efficient useof resourcesThe
managementof chemicalmaterials

Reductionof wastes
Environmentallyfriendly
products

Environment
Pollution
prevention

CSR Policy
Environmental Policy
As a globally developing core manufacturingcorporation, we are aiming to simultaneously
realize environmental preservation andcorporate growth, based on the participationof all our employees, in order to contributeto the construction of a sustainable society.

Making the environmentand communities

Happy

by meeting the above

Formulating Global Eco Vision 2020 and launching activities
In our activities for environmental conservation, we set medium-term environmental targets.
From fiscal 2016, we have drawn up a vision for our company and launched activities under
Global Eco Vision 2020.
We set four importantenvironmental tasks, “Natural
resources”, “Global warming”, “Toxic,
hazardous chemicals” and “Key quality(Environmentally-Friendly products)”,
under Global Eco Vision 2020. By
tackling these tasks through ourbusiness activities and on a foundationof legal compliance, communication,and raising consciousness of theenvironment we will work to enhance
our manufacturing power, increase ourbrand value, and contribute to not only
the sustainable development of ourcompany, but of society, also.

25

CSR Report 2016 Digest Version

Comment from a participant in formulating
Global Eco Vision 2020

Nakamura

Environment and Safety Management Dept.

It is important to undertake environmental activities from a long-term
standpoint and with all participants focused on the same things. While
our company had already been engaged in activities established under
Eco Vision, the name for our medium-term environmental targets, in
April 2016 we established Global Eco Vision 2020, which depicts our
vision for the company in fiscal 2020.
Global Eco Vision 2020 aims to align the direction of managerial
tasks, business tasks, and environmental activities. It was shaped
through considerations of what society demands of us and what is
important for us as a company, with a particular focus on importantenvironmental issues.
I was involved in its formulation as a member of a cross-departmental
working group. Under the Vision, we will push ahead with environmental
activities in a way that lets employees come together as one, and will
strive to provide true value in terms of the environment.

Meeting Our Target for Reducing CO2 Emissions
In fiscal 2015, our CO2 emissions was
158,800 tons, meeting our fiscal 2015
target of 188,000 tons and also lower thanin fiscal 2014. In addition, intensity ofemissions improved by 20% compared withfiscal 2007. The target was attained throughupdating of facilities (for energy efficiency)
and achieving an energy-savings effect byrevising our manufacturing conditions.

Transition of Emission Volume ofEnergy-Origin CO2 (Offices and Plants)
Non-consolidated
Domestic Group(consolidated certification)
CO2 emissions (10,000t-CO2)
0.78
0.71
32
24
16
8
0

Trend in CO2 Emissions
Domestic Group (consolidated certification))
Domestic Group (other than consolidated certification)
Overseas Group (manufacturing)
CO2 emissions (10,000-CO2)

20.89
14.57
7.01

Intensity (Domestic Group(consolidated certification))
Intensity (t-CO2/million yen)

0.65

17.19

12.07

17.35

11.23

0.57

16.36

15.88

10.04

23.84
2.95

20

20.38
3.19

20.76
3.41

3.28

20.35
3.62
0.86

16.36

15.88

19.65

15
10

20.89

17.19

17.35

5
0

2007

2012

2013

2014

2015

18.80

8.83

0.8
0.6
0.4
0.2

1990 2007 2012 2013 2014 2015 2015

0(fiscal year) (Targets)

Africa2%

North
America
24%

30
25

0.65

0.59

Asia
30%
Europe3%

Percentageof emissions
by overseas
regionSouth
America
41%*For purchased electricity, the GHG protocol CO2
emission coefficient for each country is used. For
fuel, the same coefficients as in Japan are used.

(fiscal year)*The numbers for FY2015 include emissions for domestic Group
companies thatare not included in the consolidated certification.

NGK SPARK PLUG Group26

Responsibilities and Actions to Environment

For Environmental Protection
Energy Conservation during Transportation
As a Specified Consigner designated underthe Act on the Rational Use of Energy, we
endeavor to reduce CO2 emissions duringtransportation. In fiscal 2015, our energy
use intensity was 0.359 kL/100 million yen,which fell below the target of 0.408 kL/100
million yen.
This is attributable to measures bytransportation departments, such as
reducing packaging weight throughchanges to the form of packaging, switching
to more local waste disposal firms, andshortening transport distances throughplant reorganization and consolidation.

Transition of CO2 Emissions as Consigner

Reduction of Waste Generated

Reducing the Amounts of Tap
and Well Water Used

Intensity (Non-Consolidated)
Intensity (kL/100 million yen)
0.6

5,000
4,000

0.444

0.480

0.5

0.404

0.393

3,480
2,812

3,000

2,863

2,906

0.359

0.4

2,672

0.3

2,000

0.2

1,000

0.1

0

2007

2012

2013

2014

2015

0

(fiscal year)

In fiscal 2015, the waste intensity was
0.040 tons / million yen. By reducing theamount of ceramic sludge produced in our
manufacturing process and increasing
manufacturing process yield, we havelowered the waste intensity 59% comparedwith the fiscal 2007 level.

In fiscal 2015, our water use intensity was 4.67
m3 / million yen. Water use intensity improvedby 38% compared with fiscal 2007 due toconserving water by changing manufacturingconditions and upgrading and updating toequipment with a high water-savings effect.

Trends in Volume of Waste Generated

Trends in Volume of Tap Water / Well Water Used

Non-consolidated
Domestic Group(consolidated certification)

Intensity (Domestic Group(consolidated certification))

Volume generated (tons)
40,00030,00020,000Intensity (tons/million yen)
0.100

0.098
28,85526,052

0.075

0.058
0.044
12,74410,000027

Non-consolidated
CO2 emissions (t-CO2)
6,000

9,513

2007

2012

11,9068,308

2013

Non-consolidated
Domestic Group(consolidated certification)

0.040 0.050

10,997 11,157
7,453

2014

CSR Report 2016 Digest Version

6,461

2015

(fiscal year)

0.025
0

Intensity (m3/million yen)

Volume used (10,000m3)

10

350
280
210

0.040

Intensity (Domestic Group(consolidated certification))

7.58
190

8

6.98

224

5.35
154

140

99

89

70
0

2007

2012

4.90

4.67

136

130
67

143

2013

75

2014

2015

(fiscal year)

6
4
2
0

Handling of Hazardous Chemical Substances within the GroupTo respond appropriately to increasingly
strict chemical substance regulations
worldside, we perform non-containment
management for products and usage
management within plants.
For hazardous chemical substances,
we set hazard rankings according to toxicity
and the strictness of regulations, andestablish handling standards for each rank.
In fiscal 2015, we reviewed the operationof our hazard rankings and strengthened
our structure for examinations of whether
to use a substance.
From here on out, we will work
toward substitution of hazardous chemical
substances and the strengthening ofmanagement, to assure compliance withlaws and with the demands of customers.

Management System
Customer request

Legal regulation

Information acquisition

Information control

Hazard rank (internal standards)

Noncontainment
managementof products

Usage managementin plants

Developing Environmentally Friendly Products
Our company provides products that contribute to the environment, including spark plugs
and automotive oxygen sensors that help improve fuel efficiency and purify exhaust gases
from automobiles, as well as LED packages and cutting tools that are long-lasting and help
conserve energy and resources. We are also undertaking development of new products inthe environmental area, such as solid oxide fuel cells (SOFCs).
From here on out, we will strengthen activities to promote energy and resource
conservation more than ever in the manufacturing process, by working these into the design
stage. Through this, we will advance development of products that contribute to theenvironment in terms of both product functions and manufacturing processes.

NGK SPARK PLUG Group28

Strengthening the business foundation

Management
In order for our company to continue
its business activities, it is necessarythat we be a company that is recognized
and trusted by stakeholders. We aim
to continue as a trusted company
through every officer and employee
acting in compliance with laws,
regulations, and rules, while we build
a sound management structure andprepare for possible risks.

CSR Policy

Actions required of global companies

We will identify the risks that could have serious
impact on our business activities based on thecomprehensive understanding of the risks related
to our Group, and take necessary measures toprevent the occurrence and recurrence so that therisks are reduced to an acceptable level. Even if
such a risk should occur, we will also strive to restore
and continue smooth business operations, thereby
maintaining trust from our stakeholders.

Sound
management
Preparation
for risksCompliancewith laws,
regulations,and rules

Information
security

Making all stakeholders

Happyby conforming to the above andcontinuing our business

Compliance Policy
With recognition that our company is amember of society, we enhance corporate
ethics and understand the spirit and meaningof laws, company regulations, internationalrules, and social norms in order to appropriately
meet social demand and become a company
trusted by the international community.
Risk Management Policy

Information Security Policy
We regard all of our own information assets as
one of our management resources. Throughthe proper protection and effective use of
our information assets, we pursue healthy
maintenance and development of our business.

Corporate GovernanceNominating Outside Directors and Strengthening
Corporate GovernanceAt the Ordinary General Shareholders’ Meeting in 2016, NGK SPARK PLUG CO., LTD.
increased the number of its outside directors by one, bringing the number of outside
directors to three in order to further clarify the separation between management andexecution and to strengthen corporate governance.
The outside directors attend meetings of the Board of Directors, providing supervision
for the execution of duties as well as advice from an independent perspective based on theirgreat experience, deep insight, and expert knowledge.

29

CSR Report 2016 Digest Version

Compliance
Promoting Compliance Education
To reinforce employee awareness of compliance, we havebeen continuing to conduct workplace training based onconventional seminars aimed at different levels of thecorporate structure, the Compliance Guidebook, andCompliance Newsletter.
In fiscal 2015, we held 14 seminars for employeeswith internal instructors as well as seminars for officers
with experts as an activity to respond to infringements ofcompetition laws that came to light in fiscal 2014.
Moreover, we conducted onsite audits into compliancewith competition laws at Group companies in theAmericas, Asia, the Middle East, and Africa andconfirmed there is thorough awareness of the rules.
Going forward, too, we will continue to confirm ourcompliance system and carryout education globally.
Compliance Guidebook

Risk Management
Holding Company-Wide Disaster Prevention Training and Disaster
Imagination Game (DIG) Training for Officers

A scene from DIG training for officers

Every year we hold training based on the
scenario of a large-scale earthquake toprepare for an emergency situation.
At the time of the company-wide disasterprevention training in November 2015, after over
4,000 employees participated in an emergency
evacuation, they moved to a primary evacuation
center. We also had water pumping drills by
the in-house fire brigade and fire extinguisher
use drills for the primary fire-fighting people.
Meanwhile, in disaster imagination
training for officers, there were drills in
returning operations to normal assuming a
shutdown of operations.
NGK SPARK PLUG Group30

14-18 Takatsuji-cho, Mizuho-ku
Nagoya, Aichi Prefecture 467-8525, Japan
https://www.ngkntk.co.jp
For inquiries, please contact our Risk Management Department, Corporate Strategy Group
Tel: +81 52-872-6248 Fax: +81 52-872-5999
E-mail: csr@mg.ngkntk.co.jp[Period covered]
From April 1, 2015 to March 31, 2016
Some other very recent activities and cases are also
included.
[Organizations Covered]Social aspects· NGK SPARK PLUG CO., LTD.
However, this Report may also cover the activities ofsubsidiaries and affiliates inside and outside Japan.
In such cases, specific company names are indicated.
Environmental aspects· NGK SPARK PLUG CO., LTD.
· 11 consolidated subsidiaries and one affiliate in Japan[Publishing Director]
Shinichi Odo
Representative Director and Chairman of the Board
Chief Executive Officer
President Officer[Editor in Chief]
Masaya Futamura
General Manager
Risk Management Department, Corporate Strategy Group[Published]
September 2016 (Publication of the next report isplanned for August 2017.)* Please recycle this booklet as used paper when it is
no longer needed.