2022

INTRODUCINGESG
REPORT&

This Report embodies OUR AIM
TO CONTINUE GROWING AS AN
ENVIRONMENTALLY RESPONSIBLE
AND
ETHICALLY
SOURCED
BUSINESS, therefore reaffirming
our commitment to transparency,
sustainability, and good governance,
particularly in matters of sustainable
and profitable growth, attention to
our Stakeholders, and the Vision
Zero’s Approach (Zero accidents,
Zero occupational illnesses, Zerowastes, Zero inequalities, Zero lackof knowledge).

INTRODUCING ESG REPORT

We will aggressively promotebusinesses that contribute to global
GHG (Greenhouse gas) reductions.
With this ESG Report based on the
GRI Standard, Tsubaki Nakashima
wants to both illustrate the decisions
taken in 2021 and developed in
2022, that started to impact thecompany – last year and in the years
to come-, the organizational
structures and resources deployed,
the main results achieved in theyear 2022 and the targets both in
the long term (Medium Term
Plan 2021 – 2023) and referring to
the year 2023.

METHODOLOGICAL NOTEENVIRONMENTAL SOCIAL GOVERNANCE

INTRODUCING

2022 has been a difficult year for
Tsubaki Nakashima for bothexogenous and endogenous
reasons. In particular, the economic
and political instability linked to
the war in Ukraine exponentially
increased energy costs, impacting
business and market in general.
From the point of view ofsustainability and of the sustainable
development strategies decided by
the company in 2021, the results
have been seen: TSUBAKI
NAKASHIMA HAS STRENGTHENED,
AWARENESS OF THESE ISSUES HAS
INCREASED, AND MANY ACTIVITIESHAVE BEEN UNDERTAKEN. In our
Mid-Term Strategy, we outline apolicy of enhancing our contribution
to and engagement with the SDGs
(Sustainable Development Goals)
through business activities. This
policy is an expression of ourcommitment. WE WILL CONTRIBUTE
TO RESOLVING MAJOR SOCIALISSUES by promoting a decarbonized
and recycling-based society, and by
establishing a resilient value chain,including promoting sustainable
raw materials procurement.
Achieving a decarbonized society isa long-term endeavor, but we also
believe
PROMOTING
GHG(Greenhouse gas) REDUCTIONSWILL PRESENT NEW BUSINESSOPPORTUNITIES.

5

GRI
2

GeneralDisclosures 2021

GRI
3

Material Topics
2021

GRI
201

Economic
Performance
2016

GRI
202

Market Presence
2016

GRI
203

Indirect
Economic Impacts
2016

GRI
204

Procurement
Practices
2016

GRI
205

Anti-corruption
2016

GRI
206

Anti-competitive
Behavior 2016

GRI
207

Tax
2019

GRI
301

Materials
2016

GRI
302

Energy
2016

GRI
303

Water
and Effluents
2018

GRI
304

Biodiversity
2016

GRI
305

Emissions
2016

GRI
306

Waste
2020

GRI
308

Supplier
Enivornmental
Assessment 2016

GRI
401

Employment
2016

GRI
402

Labor/Management
Relations
2016

GRI
403

Occupational
Health and
Safety 2018

GRI
404

Training
and Education
2016

GRI
405

Diversity andEqual Opportunity
2016

GRI
406

Non-discrimination
2016

GRI
407

Freedom of
Association andCollective
Bargaining 2016

GRI
408

Child Labor
2016

GRI
409

Forced orCompulsory
Labor 2016

GRI
410

Security Practices
2016

GRI
411

Rights ofIndigenous
People 2016

GRI
413

Local
Communities
2016

GRI
414

Supplier Social
Assessment
2016

GRI
415

PublicPolicy
2016

GRI
416

Customer
Health and
Safety 2016

GRI
417

Marketingand Labeling
2016

GRI
418

CustomerPrivacy
2016

For Tsubaki Nakashima that
Statement coincides with the ESG
Report and represents the resultof the commitment to notify its
stakeholders of the performancesand results achieved in general andin the sustainability area.
The Statement contains dataand information referring to
Tsubaki Nakashima Co. Ltd. andits subsidiaries as of December
31, 2022 (hereinafter “Tsubaki
Nakashima” or “TN”).
THE REPORT IS BASED ON A
MULTI-STAKEHOLDER APPROACH
involving the joint analysis ofactions taken in respect of themain stakeholders with whom
the Company interacts. For thedetails on the material topics,
see the specific paragraphs.
The 2022 ESG Report, preparedannually over the calendar year,
respects the same deadlines as theAnnual Financial Report.
The Report has been prepared inaccordance with the Sustainability
Reporting Standards of the
Global Reporting Initiative (GRI)(inaccordance-comprehensive
option).

The Sustainability Report is drawn
up according to a system ofindicators (KPI - Key Performance
Indicators) which measure thecompany’s
performanceandthe degree of achievement ofobjectives previously established
for areas in which the Company has
major impact.
The KPIs are defined based on:
THE ANALYSIS OF THE GRI, aninternational organization whichdevelops universally applicableguidelines for drawing up
sustainability reports.
THE DEMANDS RECEIVED FROMSTAKEHOLDERS.
THE COMPANY HAS GAINEDEXPERIENCE IN SUSTAINABILITY.

INTRODUCING ESG REPORTMETHODOLOGICAL NOTE

The Disclosure of Non-Financial Statement (hereinafter “Statement” or “ESG
Report”) complies with the GRI Standard (see below) and with the local laws andregulations concerning the disclosure of non-financial information.

7

and ENVIRONMENT which does
its part every day to contribute to atruly sustainable future; this way of
being and acting is fundamental to
the success of our 20 PLANTS, in
the countries and communities inwhich we operate.
We are a manufacturer ofprecision balls, rollers, ball screws

and blowers, very high precisioncomponents for the metrology
sector but also of medical devices
with regional production andprocurement, short lead times
and accurate, through a networkof production and well-organizedsale that meets the needs of ourcustomers.

PRECISION FOR A CHANGINGAND SUSTAINABLE
WORLD

As social, industrial, technological and lifestyle changes proceed globally,
we have decided to make THE FOUNDATIONS OF BUSINESS VALUEREALIZATION more solid and current:
1. SUSTAINABILITY, as the simultaneous achievement of economic
prosperity, creation of a healthy, safe, and low environmental impact, where
everyone is equal, with equal rights and duties, equal opportunities. In our
vision, zero impact, in a holistic sense, is fundamental: VISION ZERO for us
is zero accidents, zero damage to people and environment, but also zeroinequalities and zero lack of knowledge, which means equal opportunities
for our employees.
2. THE HIGHEST QCDS (Quality, Cost, Delivery, and Service), to be
the best-in-class, customer- and market-oriented ball manufacturer bycontinuously improving products, processes, and services.
3. ONE TEAM SPIRIT, which is the basis of our corporate culture, of
our corporate identity.

4. TRANSFORMATION, that is, being more and morea global company with an INTERNATIONAL MENTALITY
every day, precisely by continuously transforming ourorganization to ALWAYS BE ONE STEP AHEAD, capableof seizing opportunities to be better, stronger, moreaware. The armed branch of this transformation is the
MONOZUKURI understood as a set of processes, which
encompasses activities of thought, remodeling,organization, action, continuous improvement aimed
at the creation of high-quality products.
5. The orientation towards continuous GROWTH, interms of commercial solidity and profit, to anticipate
market needs, satisfy customer expectations, findnew customers, new markets and new business
opportunities. As Tsubaki Nakashima, we are awareof the RESPONSIBILITY we have towards the people
who work for us and the world around us.

CEO MESSAGE

TsubakiNakashima
isa
MANUFACTURING COMPANY
that operates on three continents(Asia, Europe and America) andis STRONGLY COMMITTED toserving its customers, creating awork environment in which its
employees can feel motivated,
respectful of available resources9In every plant today we can boast HIGH-LEVEL PROFESSIONALS in the
Safety, Environment and Energy fields. Our Sustainable Development
Model, developed in 2021 and based on three fundamental
pillars - INTEGRATED GOVERNANCE SYSTEM; SUSTAINABLE
MONOZUKURI; COMMUNICATION AND BRAND IDENTITY - hasbegun to unfold all of its enormous potential in its true meaning and
if on the one hand it has consolidated the foundations of Corporate
Governance, on the other it has allowed us to set the cornerstones on
which industrial and on processes.  
In January 2022 we defined the Carbon Footprint (based on Science
Based Target Methodology), during the year we developed specific
Energy efficiency projects; in autumn we identified the opportunities interms of innovative technologies and energy purchasing and at the endof 2022 we developed a specific Green Electricity and Waste recycling
Strategy, which will be applied in the next years.
An important element that measures the results achieved, in addition
to the KPIs that we will see in this Report, is the company’s decision
to disclose our impacts on the environment and natural resources andtake action to reduce negative impacts through the CDP.

A
A-

LEADERSHIP

B
B-

MANAGEMENTCC-

AWARENESSD
D-

DISCLOSURE

CDP IS A NOT-FOR-PROFITCHARITY that runs the global
disclosure system for companies
to manage their environmental
impacts. This project enables
companies to progress towards
ENVIRONMENTAL STEWARDSHIP
throughbenchmarking
andcomparison with peers, in order tocontinuously improve their climate
governance. Tsubaki Nakashima tocertify and make its commitment
to sustainability reliable andtransparent joined CDP - Carbon
Disclosure Project in 2022.
Tsubaki Nakashima obtained
Level B for the “Climate Change”
category, which, in addition to
being the third level of eight, is also
higher than the Asia regional
average of C, and higher than the
Metal products manufacturingsector average of C. Tsubaki
Nakashima obtained a high scoreregarding:
BUSINESS STRATEGY,FINANCIAL PLANNING& SCENARIO ANALYSISTARGETS
GOVERNANCE
This means that the sustainability
strategy has been set up correctly
and is strong and reliable.
Instead, the areas where Tsubaki
Nakashima needs to improve aredata collection and calculation ofindirect Scope 3 emissions andthe area related to green energy.

For both of these weaknesses, Tsubaki
Nakashima has already started the
PROCESS OF IMPROVEMENT; infact, it is analyzing the CO2 emissionsof raw material suppliers and isanalyzing the strategy for purchasing
green energy and planning to install
photovoltaic systems at its plants.
Scoring at CDP is MISSION-DRIVEN,
FOCUSING ON CDP’S PRINCIPLESAND VALUES for a sustainableeconomy, and highlighting thebusiness case to do this. The scoring
represents the steps a company
moves through as it progresses
towards environmental stewardship,
and they are:DISCLOSURE
AWARENESS
MANAGEMENTLEADERSHIP.
This tells us that we are on the righttrack and how much effort we will
put into achieving excellence. We
believe that transparency, openness,and risk management, as well as theefforts we are making to transform
our Company will allow us to bestronger, to protect and improve ourcompany’s reputation, boost ourcompetitive advantage, uncover risks
and opportunities, and track andbenchmark progress.

CEO MESSAGE

This is why in 2022 WE WORKED HARD FOR SUSTAINABLE
DEVELOPMENT that will allow us to improve the performance of ourplants, in all respects. The Sustainability Committee has not only defined
the strategies and guidelines for sustainable development but has also
started working with many of our plants on ENERGY EFFICIENCYPLANS, better use of resources, respect for the environment, reductionof environmental impacts; and 2023 will also involve those entities inwhich it was not possible to start operating this past year, also due tothe restrictions caused by the pandemic.

11

men will not only allow us to overcome theadversities of these years, but will create theconditions for responsible, sustainable, andprofitable development.
Director and Representative
Executive Officer, CEO
Koji Hirota

CEO MESSAGE

Tsubaki Nakashima reiterates its support for theUnited Nations SUSTAINABLE DEVELOPMENTGOALS (SDGs) and our environmental
sustainability goals are in line with global
sustainability targets (Paris Agreement).
The vision, the awareness of the mission wewant to accomplish, combined with our dailycommitment, the work of our women and

13

+

VISION“THE WHAT”= TN POLICY“ACTION”

OUR

MISSION
BUILDING THE
TRUST OF OURSTAKEHOLDERSGROWING AND THRIVINGWITHIN OUR
COMMUNITIESAND HELPING TO
CREATEA MORE SUSTAINABLE

WORLD

OUR

ACHIEVE

VISIONPROFITABLE AND
SUSTAINABLE GROWTH

WITH AN UNWAVERING COMMITMENTTO IMPROVEMENT, PRODUCTAND CREATING EXCELLENCESHAREHOLDER VALUE

WITH AN INCREASING DEDICATION TO

SUSTAINABILITYWITHIN ITS LEADERSHIP, OPERATIONS,EMPLOYEESAND INVESTMENTS.

VISION, MISSION AND MANAGEMENT PRINCIPLESMISSION“THE WHY”

MANAGEMENT+ PRINCIPLES“THE HOW”

15

We aim to become a TRULY GLOBALCOMPANY with an international
mindset, deeply TRANSFORMING
our organization to stay one stepahead of the curve.
We aim to be a Company that
continues to achieve SUSTAINABLE
AND PROFITABLE GROWTH.

We will create a team worldoriented culture - ONE TEAMSPIRIT - convinced that the VALUE
of our people is the sum of their
COMPETENCES, HUMILITY AND
ABILITY to achieve results, withPOSITIVE ATTITUDE.

With our creativity we will PROVIDEOUR CUSTOMERS WITH HIGHESTQCDS (quality, cost, delivery,
service), drawing ideas from ourstakeholders.

PROFITABLE AND SUSTAINABLE VALUEOPERATIONAL EXCELLENCESUSTAINABILITYQCDSCOMPLIANCE
VISION ZERO

MARKET ORIENTEDCONTINUOUS IMPROVEMENTGROWTHGLOBAL REACH, LOCAL DEPTHMONOZUKURIORGANIZATIONAL REMODELING

TRANSFORMATIONTN CULTURE
V = [C2+H+A] x A

ONE TEAMVISION, MISSION AND MANAGEMENT PRINCIPLES

We will TRANSFORM our Company
on a CONTINUOUS basis to makethe best products in the world, in a
SUSTAINABLE WAY.

17

Tsubaki Nakashima Policy represents the actions we’ll take to ensure our Vision, Mission andManagement Principles are executed: aligned around People, Planet and Prosperity, we’ll
continue to measure our performance and improve all aspects of what we do.

POLICY[ Koji Hirota • President and CEO ]19

FoundedbyKosabuto
Chikamori, TOYO STEELBALL SEISAKUSHO started
manufacturing steel balls forbicycles.

9
3
9
1 41
19

9
5
9
1 61
19

Launched as a joint-stockcompany as Toyo Steel Ball
Manufacturing Co. Ltd., began
MANUFACTURINGAND
SALE OF CHROME STEELBALLS, the cornerstone ofsteel balls for bearings.

STARTEDMANUFACTURING AND SALE OF BALLSCREWS. Went public on the
OTC market in Osaka. LISTEDON THE SECOND SECTION
OF BOTH THE TOKYO ANDOSAKA STOCK EXCHANGES.

3
197

Started manufacturing andsale of ceramic balls, using
SPHERICAL
SURFACEPROCESSING TECHNOLOGY.

8
8
9
1 90
19

2
0
0
2 06
20

ACQUIRED TSUBAKI STEELBALL CO. LTD. IN JAPAN, andthe assets of Hoover Group’s
steel ball division in the UnitedStates LISTED ON THE FIRSTSECTION OF BOTH THE
TOKYO AND OSAKA STOCKEXCHANGES.

Established TAICANG Plant
in China, acquired KRASNIK
Plant in Poland and CHONGQING Plant in China.

OUR HISTORYOUR HISTORY

4
193

21

Established TAIWAN Plant,
INDIA Plant and acquired
UNITED KINGDOM Plant
and THAILAND Plant.

5
1
0
2

7
1
0
2

0
2
0
2

1
2
0
2

2
2
0
2

Opened OSAKA OFFICE as agroup headquarter in Japan.
Established
KOREA
DISTRIBUTION
CENTER.
Re-listed on the first sectionof the Tokyo Stock Exchange.

ACQUIREDPRECISION
BEARINGCOMPONENTS GROUP OF NN INC. (7
PLANTS).

Released SUSTAINABILITYREPORT (current ESG - ENVIRONMENT SOCIAL GOVERNANCE - REPORT) for the
first time.

CERTIFIED IATF 16949.
ESTABLISHED A SUSTAINABILITY COMMITTEE tobecome a sustainable andprofitable company.

Transferred to the PRIME
MARKET OF TOKYO STOCKEXCHANGE and obtained
the FIRST CDP (CARBONDISCLOSURE
PROJECT)
SCORE.

OUR HISTORYOUR HISTORY

0
1
0
2 13
20

23

Tsubaki Nakashima is a global
Company producing a broad
range
of
HIGH-QUALITY
INDUSTRIAL
PRECISIONBALLS, ROLLERS, CAGES, ANDSHEET METAL PARTS used forbearing and other applications.
Tsubaki Nakashima is a known
brand in MEDICAL AND
HYGIENE EQUIPMENT AND
CERAMIC BUSINESS, as well as
the Japan’s first manufacturer ofball screws for general industrialuse, where the products are used
in industrial machines, electric
injection molding machines,
semiconductor manufacturing
equipment, industrial robots, andadvanced medical equipment.

We strive to constantly increase
the quality of our products andachieve zero defects. In refining
our manufacturing processes, wehave developed in-house bothproprietary grinding machines toachieve sphericity and our own
inspection machines to ensure
consistent quality for ourcustomers.

COMPANY STRUCTURE

Tsubaki Nakashima Co. Ltd. isheadquartered in Katsuragi,
Nara - Japan, with offices in
Osaka, Singapore, and 20
PLANTS IN 12 COUNTRIES:Japan, Italy, Poland, Slovakia, The
Netherlands, United Kingdom,
Bosnia, China, Thailand, India,
Taiwan, and United States. This
enables Tsubaki Nakashima to
respond to various Customer
needs, local procurement, quick
delivery, and superior Customer
support.

The following are SOME KEY FACTS ABOUT THE COMPANY:COMPANYNAMETSUBAKI NAKASHIMA
CO., LTD.

STOCK EXCHANGE
LISTINGTOKIO STOCK EXCHANGE
PRIME MARKETTOTAL NUMBER
OF ISSUED SHARESAT THE END OF
THE PERIODDECEMBER 31, 2022:
41.599.600 SHARES(INCLUDING TREASURYSHARES)

CODE NUMBER

6464

URL HTTPS://WWW.TSUBAKI-NAKASHIMA.COM/JPREPRESENTATIVE

KOJI HIROTA,
DIRECTOR
AND REPRESENTATIVEEXECUTIVE OFFICER, CEO

CONTACTHISASHI TATE,DIRECTOR
AND EXECUTIVE OFFICER,SENIOR EVP, CFO

The Company’s corporate structure is made up of a highlevel company organized by a Board of Directors made upof 7 members and a Management Committee made up of 6
members.

COMPANY PRESENTATION AND STRUCTURE

WHO WE ARE

COMPANY PRESENTATION

25

6

ASIA

20 PLANTS

6

AMERICA

JAPAN

4

4

GLOBALPRESENCE

Tsubaki Nakashima Co. Ltd. is headquartered in Nara, Japan, with offices in Osaka,
Singapore, Seoul and 20 plants in 12 Countries: Japan, United States, Italy, Poland,
Slovakia, The Netherlands, United Kingdom, Bosnia, China, Thailand, India and Taiwan.
This enables Tsubaki Nakashima to respond to various
customer needs, local procurement, quick delivery,and superior customer support.

COMPANY PRESENTATION AND STRUCTURE

TSUBAKI NAKASHIMAEUROPE27

TSUBAKI NAKASHIMA
Krasnik, POLAND

Okayama, JAPAN

Sechibaru, JAPAN

Koriyama, JAPANKatsuragi, JAPANEUROPE

Sault St. Marie - MI, USA

Kysucke, SLOVAKIANORTH AMERICA

Erwin - TN, USA

Worthing, UK

Mountain City - TN, USA

Pinerolo, ITALY

Cumming - GA, USA

Konjic, BOSNIA

ASIA

Silvassa, INDIA

20 PLANTS
Chongquing, CHINA

Kunshan, CHINA

Taichung, TAIWANTaicang, CHINA

Rayong, THAILAND

GLOBALPRESENCE

COMPANY PRESENTATION AND STRUCTURE

Veneendaal, NETHERLANDS

29

Tsubaki Nakashima’s Mid-Term Strategy–2021–2023- bears two important words,
TRANSFORM NEXT, signifying thecompany’s commitment to a continuous process of sustainable transformation and rationalization. For this reason, in 2022 and forthe year to come, the last of the MidTerm Strategy, our energies will focus on:
Accelerating the GROWTH, strengthening theearning power of our Regions, and investing in
Global Ceramic Business and Medical Device
Business. Growth means Profit generation,
Sales, Marketing, Business Development, newGeographical areas, Investments and People.
TRANSFORMING the Company in asustainable way, executing our strategic
projects, reforming our business, significantly
improving the chances of a successfultransformation, focusing on bringing aboutchangeandoperating todeliver transformation
programs,
sustainableinfrastructures,
technologies and methodologies, businessreform and transformational leadership.
Developing and streamlining of Planning &Promotion Structure for MANAGEMENTCONTROL, M&A, PEOPLE MANAGEMENT todrive sustainable strategies.

ORGANIZATIONAL CHARTORGANIZATIOTHE COMPANY ORGANIZATIONCHART (2023)
AND ORGANIZATIONAL CONCEPT

31

FINANCE AND
ADMINISTRATION

TRANSFORMATIONCHIEF FINANCIAL
OFFICER
Strategy
Corporate planning
IR, IS/ITDX Development

MONOZUKURI

Chief Controller

Engineering
R&D

CHIEF HUMANRESOURCES OFFICER
Sustainability
Policy & Planning
ComplianceHR

Purchasing
Supply Chain
Quality
Laboratory
Continuous
Improvement
Plant Mgr
Sustainable
Development

GROWTHCHIEF
TRANSFORMATIONOFFICER
Sustainability
initiatives
Challengeof becoming
Best-in-Class
manufacturer
Roller Business
Development
Americas Business
ReformDX Development(co-owner)

Key AccountManagers[SKF,
Schaeffler,
GKN]

Key AccountManagers[except
as notedleft]

CHIEF GROWTH OFFICER
GrowthGlobal Ceramic Business
Medical Device Business
Asia Market Growth
Direct Control
of Linear Business
Sales Proﬁt
Japan, China, GCB, MDB
TJL
TJTEuropeBalls
Rollers

Americas
Balls
Rollers

Japan
Balls
Blowers

China

GlobalCeramic
Business

Medical
DeviceBusiness

TEI
TEP
TES
TEB
TEN-R
TEN-S
TEU
TSI

TAG
TAE
TAC

TJB
TJS

TCT
TCK
TCC

TJO
TSR

TAM

ORGANIZATIONAL CHARTORGANIZATIO

CEO

33

65%

PRECISIONROLLERS AND STAMPINGS10%PRECISION
CERAMIC BALLSLINEARSAND BLOWERS

PLASTIC BALLSMEDICALDEVICES

12%

7%

2%

2%

SPECIALLY
MANUFACTUREDPRODUCTS

1%BALL RELATED PRODUCTS

1%Core Business

GrowthTransformation

Niche

OUR PRODUCTSOUR PRODUCTSPRECISIONSTEEL BALLS

35

STEELBALLSAPPLICATIONSYOU CAN FINDTSUBAKI NAKASHIMASTEEL BALLS IN

70% OF CARSOUR PRODUCTSPRECISION???
37

CERAMICBALLSAPPLICATIONS

OTHER
BALLS
APPLICATIONSOUR PRODUCTSPRECISION???
39

APPLICATIONSOUR PRODUCTS

MEDICALDEVICESAPPLICATIONSSPECIALLY
MANUFACTURED[BALL RELATED]PRODUCTS???
41

OUR PRODUCTSROLLERSAPPLICATIONS???
43

OUR PRODUCTS

LINEARSAND BLOWERSAPPLICATIONS???
45

MID-TERM STRATEGYTRANSFORM

MID-TERMSTRATEGY
2021/2023

47

QUALITY DELIVERYCOST SERVICEHIGHESTQUALITY
AND WIDEST
PRODUCT
LINEUP

ACCUMULATION OF PRODUCTION
KNOW-HOW BY IN-HOUSE
EQUIPMENTOUTSTANDING
POSITIONSTABLE AND STRONG
CASH FLOW
GENERATIONSYNERGY GENERATION BY GLOBALONE MANAGEMENT TEAMSTRONGESTGLOBAL FOOTPRINT
FOR LOCALPROCUREMENT
AND LOCAL SALESIN A NICHE
MARKETSTABLEPERFORMANCEWITH STRONGCUSTOMERRELATIONSHIPROBUSTSHAREHOLDERPOLICY

MID-TERM STRATEGYTRANSFORM

MID-TERMSTRATEGY
2021/2023

CREATION
FRAMEWORKTN’S VALUE

49

EXPANSION OF
CERAMIC BUSINESSMORE FOCUS
ON ELECTRICAL
VEHICLES
AND WIND ENERGYONE TEAM
MANAGEMENTSYSTEM(INTEGRATED)GROWTHSTRATEGY

EXPANSION AND GLOBALDEVELOPMENT
OF MEDICAL DEVICE
BUSINESSVISIONZERO
APPROACH

ENVIRONMENT SOCIAL& GOVERNANCE STRATEGYEXPANSION
OF STRENGTHENING
IN ASIAN
MARKETS
TRANSFORMATION AND SUSTAINABLE
PROJECTS IN MONOZUKURI,
THROUGH RESPONSIBLE
USE OF ENERGY,SLUDGE RECYCLING,
IMPROVEMENT
OF MATERIAL YIELD,
AND ERGONOMICS

MID-TERM STRATEGYTRANSFORM

MID-TERMSTRATEGY
2021/2023

STRATEGYPOLICY

51

E

GLOBALSUSTAINABILITYSYSTEMQUALITY
MANAGEMENTSYSTEMSUSTAINABLE
DEVELOPMENT
PROJECTSTN ACADEMYSUSTAINABILITY
SAFETYAND HEALTHRISK ASSESSMENT
AND EHS
INSPECTIONSTOOLKITSSE-LEARNING
PLATFORM
RENEWED
HR PROCESSESINTEGRATEDCORPORATEGOVERNANCERISK MANAGEMENTCOMMITTEESUSTAINABILITYCOMMITTEEG

MID-TERM STRATEGYTRANSFORM

MID-TERMSTRATEGY
2021/2023

VISION ZEROAPPROACH

ZERO ACCIDENTS
ZERO OCCUPATIONAL ILLNESSESZERO WASTESZERO INEQUALITIESZERO LACK OF KNOWLEDGE

53

CAPTURED THE MACRORECOVERY AND ENHANCEDSALES, BOTH IN QUANTITY& QUALITY THROUGHGROWTHSTRATEGIESSALES GROWTH
AND A PRECISE
STRATEGYTO OFFSET
THE INFLATIONAND ENERGYCOSTSINCREASED

2022
ACCELERATEDTHE GROWTH
OF CERAMIC BUSINESSEXPANSION OF SALESIN MEDICAL DEVICE
BUSINESSEXPANSION
OF ASIAN MARKETSBUILDING
A FOUNDATIONFOR THE
FUTURERESTRUCTURING OF
EUROPEAN ROLLERS BUSINESS(WITHDRAWAL THE ROLLER BUSINESSFROM THE NETHERLANDS)LAYING THE GROUNDWORKFOR INDIA’S SECOND PLANTCOMPLETEDMAJOR EXPANSIONOF CERAMIC BALL SUPPLYCAPACITY TO SUPPORT RAPID PROGRESS

IN EV, MAJOR EXPANSION OF PRODUCTIONCAPACITY IN THAILAND, SECURING OF RAW
MATERIALS AND DIVERSIFICATION OF SOURCINGMONOZUKURI INNOVATION

AT MOTHER FACTORY (KATSURAGI, JAPAN)

SHAREHOLDER’S
RETURNPERSISTENCEOF DIVIDEND POLICY:
AIMING FOR
AN ANNUAL DIVIDEND
OF 30 PER SHARE

MID-TERM STRATEGYTRANSFORM

MID-TERMSTRATEGY
2021/2023

STATUS
2022

55

GOALS AND OBJECTIVESQMS IMPLEMENTATION, implementing everywhere the basic proceduresin order to mitigate Customer risks.
AUDITING SYSTEM exented in every plant worldwide, giving the guidelines
for a consistent monitoring of our day-by-day process control.
QUALITY DEPARTMENT focused on special processes, working together
with the Engineering Team in controlling and improving the harmonizationin Heading, Heat Tretment, Peening, Scanning.

OTHER KEYS ACTIVITIESDefine internal STANDARD ROLLING ELEMENT CLASS,
for different application.
Continue the BENCHMARKING ACTIVITIES on Steel sourcesand High-Quality Balls.
Extend the use of RISK MANAGEMENT PROCESS.
Feasibility process and Engineering Change extended use;
support to extend the use of RFQ AND ECR processes and awarenessof CUSTOMER STANDARDS.
Global CUSTOMER FOCUS.
Global ZERO CUSTOMER COMPLAINTS VISION; extend use of customer
complaints and 8 D report data base; measure the reaction performanceand share the TN plant ranking of NCC/NPC; support the TN plants
on customers discussions and opportunities of improvements.
Support the organization to implement appropriate governancesystem of SUSTAINABILITY.

GLOBAL QUALITY AND CENTRAL LAB

GLOBAL QUALIT

The QUALITY AND CENTRAL LAB FUNCTION is a fundamental element forachieving the strategic objective of becoming the best manufacturer of balls,
through the tool of the Quality Management System (QMS) and through theactivities aimed at eliminating or minimizing the risks for our Customers.

57

Analysis and benchmark to IMPROVE OUR QUALITY.
TN EXPANSION PROJECTS supporting
the new plants / projects in Quality excellence development.
TN / SKF INNOVATION PROJECT.

OTHER KEY ACTIVITIESGLOBAL LABORATORY SUPPORT ACTIVITIES

2022 MAIN TASKSIMPROVE ONE TEAM CULTURE inside the TN Central Lab.
Continue support the Technical Mid-Term Strategy Transform Next 2023 in:Process and Product Development
New suppliers / materials homologation
New NDT method for Ceramic
Support sales exploration on new market opportunities
and engineering on process/products innovation.
Continue to provide TECHNICAL GUIDANCE AND ACTIVITIES
for supporting the:analysis and tests, root causes on internal products/processes
issues, assessment of new opportunities and validate innovative
products/processes solution, improve the knowledge and imagineof the company trough training, coaching and technical eventswith Universities collaboration (as sources of new talents).

2022 CENTRAL LABPERFORMANCE
SCHÄFFLER IOX PROJECT; Support the cooperation Project started withcustomer; Quality and Laboratories as opportunity activities with Customer.
To complete and edit the FEASIBILITY STUDY FOR AEROSPACE PLANT
for rolling elements
Support the TN Academy– Quality basic tools, QMS requirements, Customer needs/applications
GLOBAL QUALITY WORKSHOPS meeting.
Central Laboratory support activities.

ITALY Unit
KPIc (Analysis & Testing)
ITALY Unit
KPIs (OTD+Efficacy)
JAPAN Unit
KPIc (Analysis & Testing)JAPAN Unit
KPIs (OTD+Efficacy)≤ 590 €/NR
≥ 92%
≤ 77.894 /NR≥ 93%

GLOBAL QUALITY AND CENTRAL LAB

GLOBAL QUALIT

OTHER KEY ACTIVITIES59

Tsubaki Nakashima seeks to contribute to theachievement of a sustainable society throughits business activities and thereby become an
indispensable company. For this reason, WE
ENDORSE AND TAKE PART IN NUMEROUS
INTERNATIONAL CONGRESSES AND
MEETING to share what we are doing and tolearn from others.

INTERNATIONAL EVENTSINTERNATIONALINTERNATIONAL EVENTSAND PARTICIPATION
IN EXTERNAL INITIATIVES61

It has been held in National Exhibition and Convention Center (Shanghai) from December 8 to 11,
2022. Covering an area of 55.000 sqm. During the exhibition, Shanghai International Bearing Summit
Forum, the connection between production and demand, and a series of technical seminars will beheld accordingly. Discuss about the development trend of bearings market and case studies.

MESSE DUSSELDORF 2022

PRESENTING OUR MEDICAL DEVICE BUSINESSJASIS 2022

(the initials of JASIS = Japan Analytical & Scientific Instruments Show) is the cutting-edge scientificinstruments, analytical system & solution exhibition which will support the advances of science,
analytical instruments and scientific equipment makers. As Asia’s largest exhibition in this field, we willfurther strengthen collaboration with various leading industries and related organizations worldwide,
to contribute to the advancement of science in the future and to find a place for business development.

BEARING WORLD

Würzburg, Germany
International Conference 2022
FVA: Noise and process improvement

ASTM - BEARING AND TRANSMISSION STEEL TECNHOLOGY SYMPOSIUM
New Orleans, USA

Processional slip and micro inclusion effecton fatigue life of bearing rolling element.
Simulating and validating the effectof distributed manufacturing surface defects.
Experimental and statistical study
on the noise contribution
Processional slip and micro inclusion effecton fatigue life of bearing rolling element
Andrea Uva and Maria Anna Bafaro,Central Laboratory

INTERNATIONAL EVENTSINTERNATIONAL

2022 CHINA INTERNATIONAL BEARING INDUSTRY EXHIBITION

63

Mental healthand wellbeing at workplace
Franco Dutto

MEMBERSHIPSFIORP
INTERNATIONAL FOUNDATION FOR THE ORGANIZATIONAL RISK PREVENTION

Annual ORP Congress, Cartagena de India, Colombia 2022 - Franco Dutto
3000 participants, the most important event in Latin America about Safety, Health, and Wellbeing

INTERNATIONAL SOCIAL SECURITY ASSOCIATION (ISSA)GLOBAL VISION ZERO BUSINESS COUNCIL

Vision Zero Summit Japan 2022 Dates: 11-13 May 2022
Theme: Redefining Safety, Health and Well-being for the New Normal – Franco Dutto

ASSOCIAZIONEPICCOLE IMPRESE, TORINOUNIONMECCANICA, TORINO

Franco Dutto is a member of their Councils

ABMA - AMERICAN BEARING

Evelise Faro is a Board Member

INTERNATIONAL EVENTSINTERNATIONALVISION ZERODENMARK 2022

65

For many decades Tsubaki Nakashima, in its various local offices, has developed a PROFOUND
RELATIONSHIP WITH THE TERRITORY, and in particular with schools of all levels and universities,
giving not only the possibility to students to visit factories and with our employees, but above all
to carry out training internships, experiencing in the field what it means to operate in an organizedreality. Time spent as high school, college, and PhD students is rewarded with scholarships or
expense reimbursements that allow students to feel valued for their contributions and treatedwith respect in an inclusive manner.
The number of students hosted each year is many hundreds.

Bosnia / Herzegovina [above]
Elementary school visiting Katsuragi, Japan [below]

RELATIONS WITH SCHOOLSSCHOLARSHIPSRELATIONS WITH SCHOOLS AND UNIVERSITIES:SCHOLARSHIPS AND TRAINING INTERNSHIPS

67

PLANETENVIRONMENTALPROSPERITYECONOMICALCONSERVATIONPHILOSOPHYISSUESTARGETS AND KPISSYSTEMSISSUESSUSTAINABILITY
LAND
ETHIC

MORAL
ECONOMYPEOPLE
SOCIAL ISSUESPOLICIESSTATEMENTIn Tsubaki Nakashima we started from
the MANAGERIAL STATEMENTS,
from the construction of conceptual
pillars, on which to base the HIGHLEVEL POLICIES AND PROCEDURES(One Team Management System, baseof the Corporate Governance), realguidelines for all our plants aroundthe world.
But also, to make available SYSTEMS,
based on ISO STANDARDS (Quality,
Environment, Health and Safety,
Energy, Ethics), which would allow
a disciplined and standardized
management.
Lastly, the MEASUREMENT OFPERFORMANCES which presupposes
the identification of functional
objectives for the achievement of thesustainability targets.

CORPORATE GOVERNANCE

GOVERNANCE

SUSTAINABILITY as the simultaneous achievement of ECONOMIC PROSPERITY(for instance, growth and profit), the creation of a HEALTHY, SAFE AND LOWENVIRONMENTAL IMPACT environment, where everyone is EQUAL, with equal
rights and duties, equal opportunities.
Then, the attitude, the results and the merit will make the diﬀerence.
But to do it, we needed a lighthouse and most of the 17 UNITED NATIONSSUSTAINABILITY DEVELOPMENT GOALS are perfectly fit for that.

69

OPERATIONSSTRATEGY
CODE OF BUSINESS ETHICSCORPORATEGOVERNANCE POLICIESFINANCE AND ACCOUNTINGPROCEDURESIT PROCEDURESQUALITY MANAGEMENT SYSTEMGLOBAL SUSTAINABILITY SYSTEMMANUAL OF COMPLIANCE
CODE OF BUSINESS ETHICS
NON-RETALIATION POLICY - WHISTLE-BLOWER
CONFLICT OF INTERESTDATA PROTECTION
TRACKING REGULATIONSPROTECT WELL-BEING
CREATE POSITIVE RELATIONSHIPSLABOR STANDARDSCHILD LABORNONDISCRIMINATION AND EQUAL OPPORTUNITIESINCLUSION AND DIVERSITYASSOCIATION, BARGAINING, WORK ORGANIZATIONTSUBAKI NAKASHIMA AWARDSGOALS AND OBJECTIVES - PERFORMANCE EVALUATIONGOAL AND GAIN SHARING PROGRAM
BONUS SYSTEM, ACCRUALS AND RELEASE OF ACCRUALSONBOARDING POLICYBLOGGING AND SOCIAL MEDIA - EMAILING AND INTERNET POLICYTRAVEL POLICYGLOBAL MOBILITY PROGRAM
COVID-19 - GUIDELINES BASED ON ISO 45005-2021
CLIMATE CHANGE AND GHG EMISSIONSEDUCATIONAL ASSISTANCE PROGRAMCOMPANY CARS EU – SUSTAINABILITYCORPORATE GOVERNANCE

GOVERNANCE

CODE OF BUSINESS ETHICS

71

Tsubaki Nakashima has adopted a MANUAL OF COMPLIANCE, CODE OF BUSINESSETHICS AND RELATED POLICIES addressed to all those who have employment,
collaboration, consultancy, or other relationships with the Company.
The Manual of Compliance, Code of Business Ethics and related policies dictates therules of correctness and transparency that distinguish the company's work and is basedon a series of principles with values, which are then declined within the code:

HEALTH SAFETY AT WORK,ENVIRONMENTAL PROTECTION,RESPONSIBLE USE OF NATURALRESOURCES(THROUGH THE GLOBAL SUSTAINABILITY SYSTEM)ACCOUNTING ACCURACYRELATIONS WITH SUPPLIERS
AND INTERLOCUTORSOF THE COMPANYRELATIONS WITH AUTHORITIESAND COMMUNITIESCONFIDENTIAL AND RELEVANT
INFORMATIONORGANIZATIONAL MODEL
AND SUPERVISORY BODIESPROTECTION OF PERSONAL DATAREPORTING IN CASE
OF VIOLATIONS
OF THE PROVISIONS OF THE CODEPERSONNEL POLICIESAND LABOR STANDARDS(I.E., EQUAL OPPORTUNITIES, INCLUSION
AND DIVERSITY, FREEDOM OF ASSOCIATION,
CHILD LABOR)SOCIAL POLICIES((I.E., GOAL AND GAINSHARINGPROGRAMS, AWARDS)

TRANSPARENCY AND COMPLETENESSOF INFORMATIONCORPORATE GOVERNANCE

GOVERNANCECORPORATE GOVERNANCE 2022

73

Our
CORPORATEGOVERNANCE
SYSTEM consists of the Board of Directors,
Nomination Committee, Compensation
Committee, and Audit Committee assupervisory
bodies.
Management
Committee, Sustainability Committee andRisk Management Committee are businessexecution bodies. We have adopted theorganizational design of a company with anominating committee, etc., because webelieve that the separation of supervisionand execution is a means of enhancing
corporate value by strengthening thesupervisory function and ensuring prompt
management.
The BOARD OF DIRECTORS, consistingof 7 Directors (including four outside
Directors), makes decisions on basic
management policies and supervises theexecution of business by the Executive
Officers. Each of the outside Directors has
his or her own area of expertise and basedon their extensive experience and wide
range of knowledge, they provide advice
and exchange opinions on management,
thereby fulfilling the supervisory function.
The
NOMINATIONCOMMITTEE
consists of two outside Directors(including the Chairman) and one inside
Director, and most of the committee

members are outside Directors to ensure
the appropriateness of nominations.
The Nomination Committee decides thedetails of proposals for the election anddismissal of Directors.
The COMPENSATION COMMITTEE
consists of two outside Directors (including
the Chairman) and one inside Director andhas a system to ensure the appropriatenessof remuneration; it determines thebasic policy on remuneration, etc. for
Directors and Executive Officers and theamount of remuneration for everyone.
The AUDIT COMMITTEE is composedof three outside Directors, each of whom
has a different area of expertise, and is
appointed based on the belief that audits
from various perspectives are possible.
The Audit Committee audits andsupervises the execution of business by
the Directors and Executive Officers anddecides on the content of proposals forthe appointment and dismissal of theaccounting Auditor to be submitted to
the General Meeting of Shareholders. In
addition, we have established a system
in which a full-time assistant to the Audit
Committee assists the Audit Committee.

COMPLIANCE
PROMOTIONSYSTEM
Under the supervision of the
President and Representative
Executive Officer, who is incharge of overall management,compliance is promoted
mainly by the Executive Officer
in charge of HR, Compliance &Sustainability (CHRO)
In addition, an Internal Audit
Office has been establisheddirectly under the President
and Representative Director
to conduct internal audits
and confirm the status ofcompliance. In addition,
an assistant to the Audit
Committee
hasbeenestablished under the directsupervision of the Audit
Committee to audit thecompliance status of directors
and other officers.
The Internal Audit Office, theAudit Committee assistant,and the accounting auditor
share information as necessary
to strengthen cooperation.

CORPORATE GOVERNANCE

GOVERNANCE

To conduct business and grow on a global scale, the Group is working to strengthen its highly transparent and objective Integrated Corporate Governance System. In addition, we
have established a Management system with a sense of unity by realizing a group company
management function with efficiency and expertise.

75

The main goals considered for the
Risk Management process andCommittee (RMC) are:

The Risk Management process is atool to manage the high potential
future risk in advance.

To provide to Management
Committee timely and transparent
notice of signiﬁcant issues

In case the case happened alreadywithout alert and then the “riskprobability” is 100% (because it has
already) this process shall be used
to analyze its connected impacts
managing and minimizing therelated future consequences.

To ensure fair and well consideredhandling of Customer claims
and/or other relevant internal
issues, minimizing potential
impacts
To grow the (risk) consciousnessof the entire Organization

In case this case will have noconnected consequences, It’s a fact
and TN management shall follow
the regular business ﬂow process
to manage and to negotiate thespeciﬁc outcome.

RISK MANAGEMENTMANAGING RISKRISK MANAGEMENT PROCESSAND COMMITTEE

77

MANAGEMENTPROCESS ARE:

RISK MANAGEMENTAPPROACH IS
APPLICABLE TO ALL
POTENTIAL ISSUESCONNECTED
to each aspect of thebusiness (Operations,
Quality, Purchasing,Sustainability, Tax, etc);
P.e. customer claims/
alerts, warranty ﬁeld
returns, internal waste
value, internal defectanalysis, supplierquality performance,internal or external
audit results, material
shortage - cost supply
issues, customer
insolvency,
environment
analysis, etc.

To use the IATF
Quality System
to deﬁne procedures
and rules to be
applied (referringto international
standards for Risk
Management)

Risk Management process ﬂow should mirror
TN Organization withlocal, regional, global,“macro-region”,
corporate levels

To apply PDCA cycle
and Risk Potential
Severity, deﬁning thetime frame to complete
Risk Management
Process.

To better deﬁne Global
Functions’ role in shortmedium and long term,
raising Organization
awareness throughspeciﬁc training
sessions (i.e. during
the next Global Meetings)
and daily support

RISK MANAGEMENTMANAGING RISKMAINPILLARSOF RISK79LOCAL PLANTS (POTENTIAL RISKS)THE RMC MEMBERS ARE:

RELATEDGLOBALFUNCTIONS

6 PERMANENT MEMBERSCGO CHAIRMANCTO RESPONSIBLE
CFO
CHRO
MONOZUKURIQUALITY AND CENTRAL LAB(RMC ADMINISTRATOR)REGIONAL/DIVISIONALPRESIDENTS

OTHER PERTINENT GLOBALOR CORPORATE FUNCTIONSOTHER RELEVANT MEMBERS(BY COMPETENCE)RISK
ANALYSISANALYSISRISK
ASSESSMENT

THE PROCESSIS AUTOMATED
AND PRESENTIN OUR ONE TEAMSOFTWARE

RISK
MANAGEMENTCOMMITTEEMANAGEMENT COMMITTEEREGIONSAND DIVISIONSRISK MANAGEMENTMANAGING RISKRISKMANAGEMENTCOMMITTEE

81

(IS PHILOSOPHY)

Clearer visibility of thepotential issues, but alsoof the managerial style/approach to the risk,
prevention, rapidity
and eﬀectivenessInvolve more (and increaseeﬀectiveness of supportof) the Global Functions in
the process of addressing
issues, ﬁnding solutions,planning preventive andcorrective actions

Have a Wider viewand being a sort of glue
between diﬀerent partsof the Organization

Accelerate Best Practice
implementation (alreadyexisting, in order to keep
it simple and fast)

Reinforce the conceptof organizational
discipline

Help the Organization
to grow in terms of risk
prevention awarenessand in terms ofconsistency

RISK MANAGEMENTMANAGING RISKADDITIONAL
BENEFITS

THE PROCESSIS AUTOMATED
AND PRESENTIN OUR ONE TEAMSOFTWARE

83

and efficiency of final products.
For this reason, we believe that
not only supplying high-quality
products, but also giving

DUE CONSIDERATION to the environment
in the manufacturing process
will help reduce the environmental
impact of the entire value chain.

OUR ENVIRONMENTTN ATMOSPHERAPPROACH
TO SUSTAINABILITY

Products provided by the Tsubaki
Nakashima Group, including precisionballs, contribute to improving
the energy performance

85

T
N
E
M
T
I
M
M
O
C
R
OU

Tsubaki Nakashima shall continue to improve its own organization, processes, products,
and services, AIMING AT REACHING ZERO defects, zero accidents and zero environmental impact and the improvement of the energy performance by means of:
the involvement, participation andco-responsibility of the employees
and workers representatives where
they exist, collaborators and suppliers
and other relevant parties with theintention of making them awareof their individual duties, also throughspecific communication initiatives, while
promoting a healthy and safe behavior,and being aware of the rational useof energy
embracing the philosophy of the 5 Z’sof sustainability approach, we strive tohave Zero accidents, Zero occupational
illnesses, Zero wastes, Zero inequality andZero lack of knowledge
the implementation of all that isnecessary to guarantee the safeguardingof the environment and health and safety
in the workplaces

the development of production
processes, oriented to continuous
improvement of the safety, environmental
and energy standards, to reduce andeliminate the negative impacts in an
economically feasible manner, by making
provision for the acquisition of products
and services with a view to improve theenergy and environmental performances
the commitment to preventing defects,
accidents, and environmental impacts
rather than identifying thema constant respect for company,
customer and governmental healthand safety, environmental and energy
requirements
a continuous improvement of the
management and performances ofhealth and safety, environmental andenergy matters by locating the necessary
resources in order reach the set objectives
and targets, using adequate monitoringand evaluation tools

All the above to satisfy the requests and expectations of our employees, customers andshareholders in the best possible way, increasing the reputation of the company andstrengthening our leadership position.

OUR ENVIRONMENTTN ATMOSPHEROUR ENVIRONMENT

87

Tsubaki Nakashima consumes resources and,in the process of conducting business activities
across the life cycles of its products and services,emits GHGs and other emissions to the air,land, and water. Following the specifications
indicated by the ISO 14001: 2015 standard
and our Integrated Corporate Governance, wehave assessed the environmental impacts ofour business activities across the value chain to
REDUCE OUR IMPACTS.

LIFE CYCLE THINKING
Tsubaki Nakashima defines an ecoconsiderate product as one for which
environmental impacts are consideredfrom product conception to mission
completion; that is, at every phase of thelife cycle, from design and manufacturing
to transport, usage, and recycling.

THINK
Tsubaki Nakashima takes
a life-cycle thinking approachin efforts to minimize
customers’ environmental
impacts by providing productsthat offer environmental
performance.Almost
all our products are 100%
recyclable – we use steel,plastic, glass, ceramic,
aluminum, and othermaterial that could havea second life.

CHOOSE

CREATE

Climate Change Policy,
Pollution Prevention& Chemical Management

OUR ENVIRONMENTTN ATMOSPHERUSE OF RESOURCES
AND SUSTAINABILITY

In the Minimum Technical Standards
set up, we focus our attention on
Management of Chemical Substances
in manufacturing, replacing hazardous
substances with non-hazardous andrecycle them into the process,as much as possible.

89

USE

DELIVER
responsible use of natural
resources, as well asof other resources is key,in our approach.

RECYCLE& REUSEAll our products
are RECYCLABLE,
almost 100%.
Oil, coolants
and other
substances
are recycled asmuch as possible.

Through the creation of eco-considerate products,
we are cooperating with our Customers to expand
our environmental impact mitigation efforts beyond
Tsubaki Nakashima’s doors. The Group’s coreproduct, precision balls, are basically manufactured
and delivered in regions close to customers for local
production for local consumption in order to reduce
emissions, as well as prevent damage and breakage caused
by long-distance transportation. Although the procurementof raw materials, manufacturing, sales, and after-sales
service are carried out at each site according to thecharacteristics of each product and region,
important visions and directions in business
operations such as purchasing, quality
assurance, and technology development
are formulated at the Tsubaki
Nakashima Headquarter andcommunicated to each site.

OUR ENVIRONMENTTN ATMOSPHER

Transport / Value Chain – Our motto is Global Reach and Local
Depth, working to serve our Customers close to their factories,
also to reduce transportation and material handling.

91

We are actively working to reduce environmental
impacts throughout the value chain by leveraging ourefficient, compact, and precision technologies to IMPROVE THE ENVIRONMENTAL PERFORMANCEOF OUR PRODUCTS
PRODUCTS, utilizing renewable energy, andenhancing our business activities
in order to achieve our targets.

RESPONSIBLE SOURCINGOF MINERALS

Where minerals such as tin, tantalum, tungsten, gold
(3TG) and cobalt are mined in conﬂict-affectedor high-risk areas such as the Democratic Republicof Congo (DRC) and adjoining countries, the revenue
from the mining and trading of these minerals is a sourceof funding for armed groups and anti-government forces
carrying out atrocities and human rights abuses.
Minerals sourced from such conﬂict-affected or high-riskareas have the potential to promote conﬂict, humanrights violations and environmental degradation. Tsubaki
Nakashima considers MINING to be an intensive process
involving social and environmental risks, and believes
the minng of metals and minerals, including conﬂict
minerals (3TG) and cobalt mined in the DRC, as well asother minerals mined in other regions, must be
managed. Tsubaki Nakashima’s policy is that we want NO
PART IN ANY HUMAN RIGHTS VIOLATIONS OR ENVIDESTRUCTION. While sourcing minerals
RONMENTAL DESTRUCTION
that originate in conﬂict-affected or high-risk areas, wewill not, by any means, tolerate, knowingly profit from,contribute to, assist with or facilitate the commission by
any party of any form of human rights violations
or abuses, or support operations that result in the
degradation of socioeconomic andenvironmental stability.

OUR ENVIRONMENTTN ATMOSPHER

INDICATORS AND TARGETS

93

14001

GLOBAL SUSTAINABILITY SYSTEM
ISO 14001, ISO 45001, AND ISO 50001
Our– a multisite integrated system based on- has been implemented in all our factories in the world.

A responsible use of resources and energies,
as well as tracking and reducing Green House Gas (GHG)
emissions, will allow us to lessen our climate change
impact and provide important opportunities
to help drive momentum for global climate action.

45001

50001

The recently createdis responsible for assisting the Management Committee
by fulfilling a preparatory, consultative and advisory role inassessments and decision-making processes
with regard to Environmental, Social and Governance issues,
related to Tsubaki Nakashima business and its engagementwith all stakeholders,the Corporate Governanceof the Company, and the review of scenarios
envisaged in the preparation of the Medium Termand Business Plans, based also on the analysis
of significant issues for the creation of long-term value.

OUR ENVIRONMENTTN ATMOSPHERSUSTAINABILITY COMMITTEEAs Tsubaki Nakashima, we recognize our responsibility
to address the environmental and social impacts of ourbusiness.

95

ESG

Products and Services
Business Operations alignedwith global social trends

EN
Productivity Innovation
VIR
and Competitiveness
ON
Strategic MarketingME
Effective use of energy and resourcesNT

Productivity Improvement - Motus 4.0

Climate change
Contributing to the environment(procurement, products)
Respect of human rights
Diversity
Training and development,
employees engagement
Supply Chain

SO
CI
AL

Product Quality and Development
ComplianceManagement Systems

GOV
ERN
ANCE

SDG TICK NOTICES 68

OUR ENVIRONMENTTN ATMOSPHERCORPORATE SOCIALREPONSABILITY THEMES97

HARMFUL

STRENGTHSWEAKNESSESOPPORTUNITIESTHREATSATTRIBUTESOF THETHE OBJIECTIVEORGANIZATIONTO ACHIEVINGTHE OBJIECTIVE

INTERNAL
ORIGIN
STAFF
STAFF
CUSTOMER BASE
MARKET POSITIONPRODUCTS/SERVICEPROFIT MARGINSTO LOW
FINANCIAL RESOURCESCOMPETITIVE
MARKET POSITIONVULNERABILITY
SALES CHANNELSLACK OF NEW PRODUCTSPROFITABLE
FINANCIAL RESOURCESGROWINGSALES CHANNELSTARGET
DEFINITIONSUSTAINABILITY

ECONOMYFAILING SALESNEW TECHNOLOGYLACK OF FINANCIALRESOURCESINCREASEDCOMPETITIONLOSE OF KEY STAFF
DECREASING PROFITSCASH FLOWECONOMYFAILING SALESNEW TECHNOLOGYLACK OF FINANCIALRESOURCESINCREASEDCOMPETITIONLOSE OF KEY STAFF
DECREASING PROFITSCASH FLOWCONTINUE TO BULD A COMMON GROUND: COMPANY IDENTITY,VALUES AND PRINCIPLES, COMMON RULES AND POLICIES,
BUSINESS DISCIPLINE, SUSTAINABLE PROJECTS
MAKE THE LIFE EASIER: COMMONS SYSTEM, PLATFORM AND
STANDARDS TO MANAGE HR, COMPLIANCE AND SUSTAINABILITYTN ACADEMY (SAFETY, SUSTAINABILITY,CORPORATE GOVERNANCE) E-LEARNING PLATFORM
COMPENSATION-PAY PER PERFORMANCESUPPORT “TRANSFORM NEXT 2023”
APPLY GRI STANDARDS AND DISCLOSE BY CDPATTRIBUTES OF THE
ORGANIZATIONEXTERNAL
ORIGINATTRIBUTES OF THE
ENVIRONMENTSWOT ANALYSISINTRODUCING SWO

INTERNAL
HELPFULORIGINTO ACHIEVING99

OLD PLANTS AND OLD MACHINES INCREASE THE SAFETYRISKS AND USE OF ENERGY, AS WELL AS THE POTENTIAL
ENVIRONMENTAL IMPACTS
ENERGY NOT ALWAYS PERCEIVED AS AN OPPORTUNITYCULTURAL AND LINGUISTIC BARRIERSBEST PRACTICE AS OPPORTUNITY TO ACCELERATETHE GROWTH IN COMPANY CULTURE AND ACTIONSPRESSURE FROM STAKEHOLDERS
TO BE MORE SUSTAINABLE“GREEN” INCENTIVES (POTENTIALLY)
DIGITALIZATION
ESG (GRI) AS A NEW STANDARD TO IMPROVECDP DISCLOSURE
E-LEARNING PLATFORMS FOR TRAININGHIGHER COST OF ENERGY AND NATURAL RESOURCESHIGHER COST OF WASTE DISPOSAL,
LIKE GRINDING SLUDGE
REDUCED MOBILITY DUE TO THE PANDEMIC(STILL APPLICABLE)

SWOT ANALYSISINTRODUCING SWO

HIGH SUPPORT FROM THE CEOCOMPANY IS ORIENTED TO SUSTAINABILITY
PROCESS TO STANDARDIZE SYSTEMS, MATERIALS,
EQUIPMENT, MACHINES, MANUFACTURING FLOWGLOBAL SUSTAINABILITY SYSTEM AND MINIMUMTECHNICAL STANDARDS - ROAD TO FULL INTEGRATIONSUSTAINABLE DEVELOPMENT STRUCTURE
AND NEW ESH&E MANAGERS ALMOST EVERYWHERE
TN ACADEMY101

INTERNAL STAKEHOLDERS

are represented not only by shareholders
and company management, but above all by
employees and collaborators, the heart ofthe company, who are in direct contact withcustomers every day, representing Tsubaki
Nakashima. The company strongly believes in
the integration and concrete motivation of its
employees by stimulating training at 360° andin particular on fundamental issues such as
safety at work and the principles establishedby the highest ethic’s standards. Shareholders
and company management guide the strategy
and operations of the Company in compliancewith and sharing ethical and moral principles.

EXTERNAL STAKEHOLDERS

include suppliers and contractors, who
are selected through a precise evaluation
system, as well as based on compliance withthe principlesgoverned by our QMS andGSS: being a supplier of Tsubaki Nakashimameans committing to extend the same ethicalprinciples that guide the company also to its
supply chain and along the entire value chain. A
relevant external stakeholder is the Customers.

Both categories of stakeholders (internal and external) have legitimate expectations regarding thework of Tsubaki Nakashima and, in relation to the most relevant stakeholders, the possibility of
expressing opinions and suggestions, both in clear and anonymous (i.e. Surveys), through various
sharing tools made available by the company and with periodic meetings. Thanks to these listening
processes, the company has the opportunity to understand their needs and evaluate them toimprove its activities and its impact on them. In general, stakeholder involvement takes place incompliance with the principle of inclusiveness, through which Tsubaki Nakashima undertakes toencourage the activeparticipation of all internal stakeholders in corporate life and strategic decisions.

OUR STAKEHOLDERSSTAKEHOLDERS

Tsubaki Nakashima places great importance on maintaining and building relationships of trust with
its stakeholders based on long term collaboration. We engage with a diverse group of stakeholders
around the world, including the people who manufacture our products (our employees, ourcontractors, our agents), the communities we work in, the Customers and Suppliers that we workwith and the Investors who make our work possible. Through these collaborations, we are working
toward co-creating an equitable and regenerative future. We aim to center our business strategy,
investments, engagement and reporting on the environmental, social and governance (ESG) topics
that are most important to our business and our stakeholders across our value chain. As we seek
to accelerate our progress — and leverage our size and scale to benefit people, the planet, and ourbusiness — our ESG priorities guide our actions in a cohesive, compelling and risk-minded manner.
In order to have a common but also specific approach to our Stakeholders and respecting the ISOs
requirements, we are dividing them into two main categories: internal and external.

103

SUPERVISORSCUSTOMERSMEDIA AND SPECIAL
INTERESTED PARTIES

EXTERNALSTAKEHOLDERS

INTERNALSTAKEHOLDERS

WORKERSCOMMUNITIESTOP MANAGEMMENTSTOCK EXCHANGE
BOARD OF DIRECTORSCONTRACTORSAND SUBCONTRACTORS

WORKERS’
REPRESENTATIVESINVESTORSSHAREHOLDERSSUPPLIERS

OUR STAKEHOLDERSSTAKEHOLDERSLEGISLATOR AUTHORITIESREGULATORY AGENCIES105CARBON NEUTRALITY by 2050: carbon neutrality is a state of net-zero CO2 emissions.
This can be achieved by balancing emissions of CO2 with its removal.

VISION ZERO

ZERO ACCIDENTS, ZERO OCCUPATIONAL ILLNESSSES,
ZERO WASTES, ZERO INEQUALITIES,ZERO LACK OF KNOWLEDGE

INTEGRATEDCORPORATEGOVERNANCE

SUSTAINABLE INSTITUTIONAL
DEVELOPMENT
INTERNAL
EXTERNAL
TN ACADEMYG M CGOVERNANCEMONOZUKURICOMMUNICATIONSTRATEGY AND PILLARSSTRATEGY

The Paris Agreement and the AGENDA 2030 of the United Nations aim to strengthen the
global response to the threat of climate change by keeping a global temperature rise thiscentury well below 2°C above pre-industrial levels.
As a result, several global goals have been set to fight climate change:
Global CO2 emissions need to be reduced by 45% by 2030 from 2010 levels(last official data available)

107

ROAD TO 2030
MEASURES FORENVIRONMENTALSUSTAINABILITY

Carbon footprint
Water footprint
Other relevant
environmental impacts
Settingenvironmental KPIs
Benchmarking
between plants

Analysis of energy
and environmental
efficiency measuresalready carried out
Calculationof savings/beneﬁts
obtained in terms ofenvironmental impact
Re-calculation of KPIs

Analysis of the neededinterventions aimed
at reducing the carbon
footprint
Analysis of theinterventions aimed
at reducing
the water footprint

ENVIRONMENTAL
DATA
COLLECTION

Calculationof multi-year
environmental
sustainability targets
Calculation of GHG
reduction goals with
science-based targets
Drawing up theenvironmental
sustainability plan
between plants

ADOPT INNOVATIVE TECHNOLOGIESTO PRODUCE GREEN ENERGY
PURCHASE GREEN ENERGY THANKS TO
THE RENEWABLE ENERGY CERTIFICATES-27.5% CO2 TONSBY 2030 COMPAREDTO 2019

CHALLENGE: IMPROVE THE GENERALEFFICIENCY OF TN PLANTS
THROUGH HIGH UTILIZATION

AIMING TO ACHIEVECARBON NEUTRALITY
BY 2050

2030
SUSTAINABILITY
ROADMAP

DEFINITION OF THE
ENVIRONMENTAL
STATE OF ART
OF THE GROUP

DEFINITION AND
CALCULATION OF
SUSTAINABILITY
KPIS

DEFINITION OF
SUSTAINABILITYTARGETS ANDGOALSDESIGN THE
SUSTAINABILITY
PLAN FOCUS
ON 2022
AND ROAD
TO 20302030
CO2 EMISSIONSTSUBAKI NAKASHIMA

132,619 CO2 TONS
2022
CO2 EMISSIONSTSUBAKI NAKASHIMA

1

2

3

4

5

186,252 CO2 TONSSUSTAINABILITYENVIRONMENTAL ENVIRONMENTALTARGETSTARGETSACHIEVEDTO BE ACHIEVED

STRATEGYENVIRONMENTALSTATE
OF THE ART

REDUCE ENERGY CONSUMPTION

109

CEO

CTO

MONOZUKURISUSTAINABLE
DEVELOPMENT

All the strategies and activities are reviewed by the
Sustainability Committee, which is responsible for assisting
the Management Committee by fulﬁlling a preparatory,
consultative and advisory role in assessments and decisionmaking processes with regard to Environmental, Socialand Governance issues, related to Tsubaki Nakashimabusiness and its engagement with all stakeholders, theCorporate Governance of the Company, and the review
of scenarios envisaged in the preparation of the Medium
Term and Business Plans, based also on the analysis ofsigniﬁcant issues for the creation of long-term value.

CFO

CHRO

WHAT IS IMPORTANT
FOR ENVIRONMENTAL SUSTAINABILITY
Natural gas consumption
Other fuel consumption
Electrical energy consumption
Percentage of renewable energy

Scope 1 CO2
Scope 2 CO2
Scope 3 CO2

SUSTAINABLE
ADVISOR

Volume of water usedfrom the mains and well
Volume of recovered rain water
Volume of disposed water

6 REGIONS

Quantity of hazardous waste
Quantity of recycled waste

20 PLANTS

Raw materials quantity
Additives and chemicals quantity
Packaging materials quantity

ENERGYCO2 EMISSIONS
WATER
WASTE
MATERIALS

ENVIRONMENTAL
KPISSpeciﬁc energy
consumption (kWh/ton)
Percentage of renewableenergy (% Green energy)

Carbon footprint (ton CO2 / ton)
Scope 1 & Scope 2
total emissions (ton CO2)

Water footprint (m3 / ton)
Percentage of disposal water(% disposal water)

Hazardous waste(ton hazardous waste / ton)
Sludge (ton sludge / ton)
Percentage of recycled waste(% of recycled waste)

SUSTAINABILITYCOMMITTEESUSTAINABILITYCOMMITTEE111

CO2 EMISSIONS [CO2 TONS]

the total CO2 emissions of Scope 1 & Scope 2 are monitored on a monthly basis and calculated
taking into account the guidelines provided by the GHG Protocol and the ISO 14064. Scope 2
emissions, that are mainly related to electricity consumptions, are currently calculated using the
Location Based methodology and considering the emission factors from ecoinvent database.
One of the goal for 2023 is to monitor Scope 2 emissions by using the Market Based methodologythat results to be more accurate. Tsubaki Nakashima has set up a 2030 target for the total CO2
emissions (Scope 1 & Scope 2) by using the Science Based Target Initiative tool. Another goalfor 2023 is to start to monitor Scope 3 emissions, especially those related to raw materials
consumptions and transport.

CARBON FOOTPRINT [CO2 TONS/TONS]

Tsubaki Nakashima carbon footprint is calculated taking into account Scope 1 & Scope 2
emissions and the production expressed in tons. This KPI reﬂects the sustainability of Tsubaki
Nakashima factories and targets are set up taking into account the planned CO2 reduction andthe organization’s future rate of production.

SPECIFIC ENERGY CONSUMPTION [MWH/TONS]This KPI is the ratio between energy consumption and production expressed in tons and this is
an indicator of the energy efficiency of Tsubaki Nakashima factories. The lower this KPI and thehigher is the energy efficiency of Tsubaki Nakashima. The first point in the sustainability roadmap
to achieve the CO2 reduction goal is about energy efficiency, and that is why Tsubaki Nakashima,
in addition to indicators on emissions, decided to also fix an indicator for energy consumption.
Therefore, the targets set for this KPI reﬂect the projected CO2 reduction, but also take into
account self-production and green energy purchasing strategies.

% OF GREEN ENERGY

this indicator is useful to monitor the amount of green energy consumed by the organizationand to properly set the strategy on purchasing and self-producing green energy and to monitor
the results obtained. Tsubaki Nakashima plans to consume 100% renewable electricity by 2040.

SUSTAINABILITY

KPIS

Tsubaki Nakashima has set up and monitors several KPIs to measure its sustainability
performance.

113

ELECTRICITY EMISSION
FACTOR EXAMPLES

0,74 CO2

CO2 EMISSIONS CATEGORIESTONSSCOPE 1: DIRECT GHG EMISSIONS - NATURAL GAS,
LPG, PROPANE COMBUSTIONSCOPE 1SCOPE 2SCOPE 3SCOPE 2: INDIRECT GHG EMISSIONS FROM IMPORTED
ENERGY (ELECTRICITY)

1 MWH =ELECTRICITYSCOPE 3: INDIRECT GHG EMISSIONS CAUSEDBY THE ENTIRE VALUE CHAIN (RM, TRANSPORTS)

1,03 CO2TONS

1,01 CO2TONS

0,42 CO2TONS

0,67 CO2

FULLY CONTROLLED BY TSUBAKINOT UNDER CONTROL OF TSUBAKI

TONS

1,39 CO2TONSTOTAL CO2 EMISSIONS = SCOPE 1 + SCOPE 2 EMISSIONSCARBON FOOTPRINTTOTAL CO2 EMISSIONS [ CO2 TONS ]CO2 TONS=TONSTOTAL PRODUCTION [ TONS ]95% OF TSUBAKI NAKASHIMA’S
CO2 EMISSIONS COME
FROM ELECTRICITY CONSUMPTION

The emission factor related to electricity varies foreach country because it depends on the fuel mix
used for the electricity production of each country!

FOSSIL FUEL EMISSION
FACTOR EXAMPLES

1000 M3 = 2,59 CO2

NATURAL GASTONS1000 = 1,58 CO2

LITERS LPGTONSThe emission factor related to fossil fuels is thesame for each country because the compositionof natural gas and fuels does not vary!

ROAD TO SUSTAINABILITY

There are many factors that inﬂuence thedefinition of targets:
EXOGENOUS FACTORS (for example,
the closures due to Covid, the raw
materials and energy crisis due to the war
in Ukraine, the market, new applications,etc.) and ENDOGENOUS FACTORS (theclosure and opening of new factories,
new production lines, product mix, typeof products, production increases, etc.).
During 2022 Tsubaki Nakashima
developed 26 sustainability projects,
started to purchase green energy,
installed 3 new photovoltaic systems, andperformed 10 sustainability workshops.
All these activities avoided the emissionsof 12,035 CO2 tons. However, considering
the rate of production growth and thestartup of the new plant in Bosnia, thisCO2 reduction is equivalent to a 3%
reduction in Tsubaki Nakashima’s carbon
footprint (i.e., 4,600 CO2 tons reductionof total emissions compared to 2021).
For that reason, despite the developmentof these activities, CO2 reduction has notbeen enough to reach the ambitious 2022
sustainability target of 169,204 tons CO2.
Considering the above reasons, the target
was found to be too aggressive, so thetarget for 2023 was adjusted by tending
to the evolution of the organization. The
final target to 2030 remains the same but
the path to achieve it changes.

SUSTAINABILITY

CO2CALCULATIOTHE IMPORTANCE OF ENERGY EFFICIENCY

115

2019

Tsubaki Nakashima strongly believes in the sustainabletransformation of its products and production processes. For
this reason, we decided to set the sustainability goals in linewith those of the United Nations and the Paris Agreement
on climate change using the methodology proposed by
Science Based Target. Supporting this green transition for
Tsubaki Nakashima is also a moral obligation, not only to ourcustomers and suppliers, but also to shareholders, employees,
and society at large. The first goal it has set is to reduce CO2
emissions by 27.5% by the end of 2030, and the strategy forachieving this is based on concrete and tangible projects.

182.923 CO2 tons

2021
190.849 CO2 tons

2022

IMPROVING ENERGY EFFICIENCY OF THE PLANTS
THROUGH THE IMPLEMENTATIONOF RENEWABLE ENERGY SYSTEMS
THROUGH A STRATEGY FOR PURCHASING
GREEN ENERGY SHARES

186.252 CO2 tons

2030
132.619 CO2 tons

It is a not easy road, even though it is a real commitment,a challenging task that needs a lot of investments.

SUSTAINABILITY IN NUMBERS

10

WORKSHOPSPERFORMED

4%

INCREASE
OF THE ENERGYEFFICIENCY

B

CDP - CARBONDISCOLSURE
PROJECT SCORE
LEVEL

4

26

PHOTOVOLTAICSYSTEMS
INSTALLED IN TN
PLANTSSUSTAINABILITY
PROJECTSDEVELOPED

4.220
CO2 TONSAVOIDED FOR
GREEN ENERGY
PURCHASE

SUSTAINABILITYA NOT EASY ROAROAD TO SUSTAINABILITY

117

During 2022, several workshops related to environmental
sustainability were carried out. The purpose of these on-site
workshops was to increase the plants' awareness of climate change
and environmental sustainability issues. In addition, in each plant
visited, on-site analyses were performed to evaluate the energy
efficiency of the production process and several opportunities
for improvement were subsequently analyzed. A summary of the
improvement opportunities identified is given in the table below.

10

SUSTAINABILITY
WORKSHOPSPERFORMED

32

SUSTAINABILITY
PROJECTSIDENTIFIED

10.132

MWH OF POTENTIAL
ENERGY SAVINGS

4.727
CO2 TONS
OF POTENTIAL
REDUCTIONINDIA

SUSTAINABILITY WORKSHOPSWORKSHOPS

2022:
SUSTAINABILITY WORKSHOPS

119

SUSTAINABILITY WORKSHOPSWORKSHOPSUSABEFOREAFTER
HEAT TREATMENT IMPROVEMENTAFTER THE WORKSHOPS

121

JAPANSUSTAINABILITY WORKSHOPSWORKSHOPS

MEASUREMENTS AND OPERATIONSDURING THE WORKSHOPS

123

CDP is a not-for-profit charity that runs the global disclosure systemfor companies to manage their environmental impacts. This project enables
companies to progress towards environmental stewardship throughbenchmarking and comparison with peers, in order to continuously
improve their climate governance. Tsubaki Nakashima to certify and makeits commitment to sustainability reliable and transparent joined CDP Carbon Disclosure Project in 2022. Tsubaki Nakashima obtained Level B for
the “Climate Change” category, which, in addition to being the third level ofeight, is also higher than the Asia regional average of C, and higher than the
Metal products manufacturing sector average of C.
Tsubaki Nakashima obtained a high score regarding:
BUSINESS STRATEGY, FINANCIAL PLANNING & SCENARIO ANALYSISTARGETS
GOVERNANCE
This means that the sustainability strategy has been set up correctly and isstrong and reliable. Instead, the areas where Tsubaki Nakashima needs toimprove are data collection and calculation of indirect Scope 3 emissions
and the area related to green energy. For both of these weaknesses, Tsubaki
Nakashima has already started the process of improvement; in fact, it isanalyzing the CO2 emissions of raw material suppliers and is analyzing thestrategy for purchasing green energy and planning to install photovoltaic
systems at its plants.

SUSTAINABILITY WORKSHOPS

CDP PROJECTCDPCARBON DISCLOSURE PROJECT

125

4.865
CO2 TONSAVOIDEDIN EUROPEREGION

2022: ENERGYEFFICIENCY

3%

OF ENERGYREDUCTION
NEW ELECTRIC MOTORS& VSD INSTALLATION

2.253
CO2 TONSAVOIDEDIN CHINAREGION222

CO2 TONSAVOIDEDIN AMERICASREGION

During 2022 to support the first milestone on the road to2030 related to the reduction of energy consumptions, fivespecific projects useful for increasing the energy efficiency
of Tsubaki Nakashima's production processes were analyzed.

2%

OF ENERGYREDUCTIONCOMPRESSED AIR
LEAK REDUCTION

3%OF ENERGYREDUCTIONFURNACES
INSULATIONIMPROVEMENTGOAL
ACHIEVED

158
CO2 TONSAVOIDED
IN GCBREGION125
CO2 TONSAVOIDED
IN JAPAN
REGION

7.623
TONS
REDUCEDAs a result of the development of these projects within
plants, the KPI related to energy efficiency increased
by 4% in 2022 compared to 2021.

2%

OF ENERGY REDUCTIONLAMPS REPLACEMENTWITH LED

1%

OF ENERGY REDUCTIONPUMPING SYSTEMOPTIMIZATIONGOAL
ACHIEVED+4%ENERGYEFFICIENCY(VS 2021)

SUSTAINABILITY

REEN NUMBER

2022: SUSTAINABILITY
PROJECTS DEVELOPEDDuring 2022, 26 projects related
to the continuous improvement ofenvironmental sustainability of Tsubaki
Nakashima's plants were developed.

127

OF INSTALLEDSOLAR PANELSIN ITALY

65 kW
OF INSTALLEDSOLAR PANELSIN POLAND

60 kW
OF INSTALLEDSOLAR PANELSIN INDIA

5 kW

OF INSTALLEDSOLAR PANELSIN JAPAN

2022: INSTALLEDPHOTOVOLTAIC PLANTS

460 kW
192
OF INSTALLEDSOLAR PANELSIN TSUBAKI
NAKASHIMA

CO2 TONSAVOIDEDSUSTAINABILITY

PHOTOVOLTAIC

330 kW

129

INDIA - SILVASSA PLANT

POLAND - KRASNIK PLANT

JAPAN - KATSURAGI PLANT

2022: GREEN ENERGY PURCHASING

In addition to the photovoltaic systems, during 2022 some of Tsubaki Nakashima's
factories purchased green energy shares to promote the lowering of CO2 emissions
and the green transition:

100%

RENEWABLE
ELECTRICITYSLOVAKIA PLANT

100%
RENEWABLE
ELECTRICITYUK PLANT10%RENEWABLE
ELECTRICITY
KATSURAGI PLANT
JAPAN**FROM NOVEMBER 2022

10%

RENEWABLE
ELECTRICITYOKAYAMA PLANT
JAPAN*

10%

RENEWABLE
ELECTRICITY
KORIYAMA PLANT
JAPAN*GOAL
ACHIEVED

4.220
CO2 TONSSAVED

SUSTAINABILITY

PHOTOVOLTAICITALY - PINEROLO PLANT

131

CHINA
73.336 TONS CO2EUROPE
58.503 TONS CO2

AMERICAS
25.855 TONS CO2
JAPAN29.894 TONS CO2

2021

CERAMIC
3.261 TONS CO2

TSUBAKINAKASHIMA
190.849
TONS CO2

CHINA
71.296 TONS CO2EUROPE
57.622 TONS CO2

AMERICAS
25.155 TONS CO2
JAPAN28.567 TONS CO2
CERAMIC
3.612 TONS CO2

2022

TSUBAKINAKASHIMA
186.252TONS CO2GOAL
ACHIEVED

4.597 TONS CO2 AVOIDED

GOAL
ACHIEVEDCARBON FOOTPRINT (TON CO2 / TON) 2021

2022

JAPAN

2,3

2,6

EUROPE

1,4

1,4

CERAMIC

35,9

31,4

CHINA

2,3

2,2

AMERICAS

1,9

1,8

TSUBAKI NAKASHIMA

1,94

1,88

2019

2021

2022

2020

-3% OF THE CARBON FOOTPRINTSUSTAINABILITYCARBONFOOTPRINTQUANTITY OF CO2 TONS (SCOPE 1 AND SCOPE 2)
PRODUCED PER TON OF PRODUCTTOTAL QUANTITY OF CO2 TONS (SCOPE 1 AND SCOPE 2) EMITTED

133

2019

GOAL
ACHIEVED

2020

2021

2022

-4% OF SPECIFIC
ENERGY CONSUMPTION

2022

JAPAN

3,1

3,5

EUROPE

2,5

2,4

CERAMIC

49,5

44,0

CHINA

2,2

2,1

AMERICAS

4,0

3,2

TSUBAKI NAKASHIMA

2,7

2,6

+ 4% OF ENERGYEFFICIENCYSUSTAINABILITY

ENERGYQUANTITY OF ENERGYCONSUMED PER TON OF PRODUCTENERGY INTENSITY (MWh / TON PRODUCT)
2021

135

Tsubaki Nakashima water consumption in 2022 was equal to 277 million liters.
Considering that, in average, un person consumes 237 liters of water per day,Tsubaki Nakashima water consumption during 2022 is equivalent to the annual
water consumption of 3,215 people.
The water footprint of Tsubaki Nakashima during 2022 was equal to 2,8 liters/
kg (i.e. m3/tons) and this value is very low compared, for example, to the water
footprint of beef production 15,000 liters/kg

GOAL
ACHIEVED

2022

JAPAN

3,3

3,3

EUROPE

3,1

2,9

CERAMIC

3,8

2,7

CHINA

3,3

3,4

AMERICAS

2,6

0,4

TSUBAKI NAKASHIMA

3,1

2,8

-10%
OF WATER FOOTPRINTSUSTAINABILITY

WATER

Water footprint [m3/tons] is the ratio between water consumptions (m3) andthe production expressed in tons. Tsubaki Nakashima currently monitors thisindicator as another key aspect of a company's sustainability, but because no major
deterioration is found, a long-term target has not been set but only annual targets
for monitoring. In addition, this indicator does not appear to be a key indicator
for the organization with respect to CO2 emissions and carbon footprint for thatreason Tsubaki Nakashima currently focuses its attention on reducing greenhousegas emissions but in any case it also keeps the water consumption under control.

QUANTITY OF WATERCONSUMED PER TON OF PRODUCTWATER (M3 / TON PRODUCT)
2021

137

Recycled rate reﬂects the percentage of recycling waste. In order to calculate thisKPI the most important categories of waste are taken into account. One of the goalfor 2023 is to develop projects to recycle our production sludge.
On whether or not waste is recyclable, as well as on the very definition of waste,
as well as on whether or not it is dangerous, national regulations are very different
from each other.
In some countries sludges are considered hazardous and non-recoverable waste,
while in others it is the opposite; it is therefore necessary to keep the differences inmind when reading the data

GOAL
ACHIEVED

2021

2022

JAPAN

51%

67%

EUROPE

33%

34%

CERAMIC

28%

41%

CHINA

36%

42%

AMERICAS

10%31%

TSUBAKI NAKASHIMA

31%

41%

+10%
OF RECYCLED RATESUSTAINABILITYWASTE

QUANTITY OF RECYCLED RATE

139

31
SUSTAINABILITY
PROJECTS
PLANNED,8SUSTAINABILITY
WORKSHOP
PLANNEDIN CHINA,EUROPE, USA

SCOPE 2 EMISSIONSMARKET BASEDCALCULATIONALREADY KICKED OFF+
STRATEGY FORPURCHASE GREEN
ELECTRICITYFOR EACH REGIONFEASIBILITY
OF THE INNOVATIVETECHNOLOGIESALREADY
KICKED OFF

RAW MATERIALSSUPPLIERSENGAGEMENT
IN THESUSTAINABILITY
ROADMAPSLUDGERECYCLING
PROJECTSDEVELOPMENT
IN JAPAN, POLAND
AND ITALYPOTENTIAL
REDUCTION OF

16.000
CO2 TONS+118%
VS 2022SUSTAINABILITY

2023 PROJECTDEVELOP
5 ENERGYEFFICIENCYPROJECTSSTRATEGYFOR GREEN
ENERGYPROCUREMENTROADMAPFOR INNOVATIVETECHNOLOGIESTO PRODUCEGREEN ENERGYSCOPE 3
EMISSIONSANALYSIS:RAW
MATERIALS

DEVELOPMENT
OF WASTE
RECYCLING
PROJECTS141

OUR COMMITMENT TO PEOPLE

COMMITMENT
TO PEOPLE

OUR

143

We set STANDARD OF BEHAVIOR for team members and all
stakeholders while at work, helping all our employees comply withapplicable laws and regulations, guiding the decision-making process,reinforcing the commitment to impeccable character.
As part of the Tsubaki Nakashima team, each employee takes careof himself/herself and each other and Tsubaki Nakashima promotes
SAFETY, HEALTH, AND SOCIAL RESPONSIBILITIES BECAUSE PEOPLE
MATTER – not just to the Company, but to fellow team members,
friends, families, and communities.

VISIONCREATE A MULTI-ETHNICALAND TN MONOCULTURAL ORGANIZATIONMISSION

Foster differences to create added value and give new
and growth perspectives, balance the interests of the parties
by maximizing their mutual benefit, integrate and help people
grow, creating a safe, fair work environment where everyone
is valued and valued for what they give.

INTEGRITYAND
ACCOUNTABILITYRESPECTAND
COMPASSIONPASSIONAND
COMMITMENTVALUES

We value the power of Individual and Collective know-how: we growthe business and in parallel improve the work environment by building
positive and enduring relationships.
We appreciate and favorite the contribution of every team member inevery location. It is the variety of talent, ideas, opinions and experiences– what we call the TN COLLECTIVE KNOW-HOW – that gives a
broader understanding of the marketplace and the world around. It is
how we build high-performance teams and deliver innovative solutions
for customers. In everything the Group does, diversity is a competitive
advantage, and it drives creativity, innovation, decision making andability to serve our Customers.

PROXIMITYPEOPLEOUR COMMITMENT TO PEOPLE

MANAGEMENT

Tsubaki Nakashima operates, trains, and secures its People
based on unified rules, with the aim of ensuring that all
employees working around the world continue tomove toward the future as One Team.
We have worked to create a multiethnic but
monocultural work environment, withour corporate culture, our visions,approaches, systems, processes;
and our culture embraces andharmonizes differences inrace, language, tradition,
habits, way of thinking.

145

We have plants and offices in Japan, United States,
Italy, Poland, Slovakia, the Netherlands, Bosnia,
China, Thailand, India, and Taiwan, and in each ofthese countries, local employees take the lead in
conducting activities. As a Corporate Group with
global operations, we aim to UTILIZE DIVERSEVALUES in our business, and promote diversity
by appointing suitable personnel to roles of
responsibility regardless of nationality, promoting
the career of women, and employing people withdisabilities. In our Group we have 31 different
nationalities. Diversity is key, always.

We value gender balance and the overcoming of any stereotype, discriminationor prejudice, in order to create the best
conditions in which each person can
express themselves. TN is committed toincreasing the strengthening of awarenessinitiatives at all levels and promotes
policies and actions aimed at promoting
equal opportunities, work-life balance, thesharing of family responsibilities and theremoval of potential obstacles, including
those related to sexual orientation.

GENDERWe recognize and value integrated strategies
for the development and managementof the needs of the different generations
that work together within the organization.

We recognize equal opportunities for all
its people regardless of sensory, cognitiveand motor disabilities. In this context, it
is committed to implementing concretemeasures to promote the integration andinclusion of people with disabilities, making
full use of their talent and skills in the Company
and thus contributing to the removal ofcultural, sensory and physical barriers.

DISABILITY
We are committed to promoting andsystematizing the mix of different cultures
within it through the promotion of anintercultural vision and open to multi-level
discussion, based on organizational and social
cooperation.

GENERATIONS INTERCULTURALISMOUR COMMITMENT TO PEOPLE

MANAGEMENTTSUBAKINAKASHIMA
DOES NOTACCEPT
CHILD LABOR

We are an organization committed to the
RESPECT OF HUMAN RIGHTS ANDUPHOLDING LABOR STANDARDS. This respect
and commitment are central to the success of
TN entities in all the communities in which it
operates. Our Labor Standards Policy is alignedwith the principles established within the
Universal Declaration of Human Rights and incombination with TN Managerial Statement
and Code of Business Ethics, reinforces thecommitment to ensuring all internal and external
stakeholders are treated with dignity and respect.

147

Tsubaki Nakashima recruits, develops, andpromotes personnel on the basis of merit andstrives to maintain a work environment free fromdiscrimination and harassment.

ASSOCIATION AND WORKER’SREPRESENTATIVES

Tsubaki Nakashima supports a person’s right tocome together with others to promote, pursue,
and defend common interests, respecting theright of all people to join or not join a trade union
to bargain collectively. We respect employees
right to collective bargaining and ensures labor
agreements are developed with employee
representatives and, at a minimum, comply withlocal rules and regulations.
The business encourages open dialogue andtransparency, so that management and unions areencouraged to work together, in compliance with
non-disclosure principles, to achieve a prosperous
outcome.

COMPENSATION
AND BENEFITSWE BELIEVE
THAT A GOOD WORKENVIRONMENTMEANSPHYSICALENVIRONMENTALL PLACES OF WORK,ALL SITES, AND AREAS
WHERE WORKIS CARRIED OUTCORPORATE CONDITIONSCOMPANY VALUES, COMPANY POLICIES AND PROTOCOLS, LEADERSHIP STYLE,EMPLOYER’S PROGRAMS FOR EMPLOYEES (E.G.: TRAINING, RECREATION, AND
ENGAGEMENT), JOB BENEFITS (E.G.: SALARY, STI, LTI, HEALTH INSURANCE, DENTAL
INSURANCE, PENSION SYSTEMS...), JOB CONDITIONS (TERMS OF EMPLOYMENT,FLEXIBILITY), SOCIAL BEHAVIORS (G&O, PE, TEAMWORK, OPENNESS,
TRANSPARENCY, SOCIAL AND INDIVIDUAL DYNAMICS), JOB SATISFACTION AND
EMPLOYEE OPINIONSSET OF RULES
THE METHODSOF PERFORMING
THE JOB'S FUNCTIONS

Tsubaki Nakashima is strongly committed on these three fronts, because we believe that
ONLY WITH A HOLISTIC APPROACH CAN WE TRULY CREATE A WORK ENVIRONMENT
where everyone can find their own motivation to achieve results.
Our approach to compensation and benefits, and related policies, ensures that employees
are being paid fairly, and describes terms for workers’ compensation, allowances, benefits,
and bonuses (short-term and long-term incentive plans) at different levels of our organization.
Compensation and benefits can be subject to differing Countries’ laws and regulations, butthere is a deep and strict alignment with the Company's culture, Corporate Governance andManagement Principles.
Clear rules concerning compensation and benefits increase employee motivation. We believethat the promise of rewards and recognition for high-performing employees encourages
people to work harder to meet both personal and company goals and objectives.
Effective and fair compensation also enrichens your company culture, employees are more
likely to recommend working for your organization and this further increase company loyalty
and reduce employee turnover.

OUR COMMITMENT TO PEOPLERECRUITMENTRECRUITMENT

149

This is the formula we apply in all the processes related to people (from hiring to future
opportunities). In 2022, the average number of hours of specific training (excluding
on-the-job training) per employee was 42 hours; greater in countries where personnel
turnover was significant (USA, Slovakia) with peaks of 170 hours on average, lower
in countries with stable personnel with work experience and profound technical andbehavioral knowledge. In those cases, the training concerned the sustainability andoccupational safety

OUR COMMITMENT TO PEOPLE

TRAINING

For the DEVELOPMENT OF OUR PEOPLE, we have established and improved(every after year) an education and training system and we are continuously working
to provide opportunities for all employees to acquire the knowledge, skills, andtechniques necessary to perform their duties accurately and promptly, both insideand outside the workplace. In the Vision Zero, this is Zero lack of Knowledge.
We believe that the VALUE OF OUR MANAGERS should be the ratio between
Competencies, Humility and Ability to operate. However only our Attitude can be theright multiplier to achieve or not the success.

151The CHALLENGES OF TN ACADEMY we had to face in 2022 were many: large number ofparticipants, distribution of plants across different time zones, prerequisites of knowledge forparticipation in TN Academy, thorough knowledge of company policies, ethics and vision, varying
training and induction strategies and procedures across the plants.
The SOLUTION we identified for the future development of TN Academy, as well as a more agile
management of training at local level, and specifically the on-boarding processes, was alearning management system available online for all plants, with acommon training platform – identical courses globally,
training library available on the platform andcorporate trainings as well as plant-specific trainings all under one system

TSUBAKI NAKASHIMA ACADEMY (TN ACADEMY) aims to enhance the customer
value we create. To this end, we teach our Managers and Talents basic technology andskills and have them experience Monozukuri (the art and science of manufacturing)by performing specific manufacturing and managerial tasks step by step. This helps
them tackle jobs from different angles.
In 2021 we focused our efforts on Manufacturing, Quality, People Management and
Finance for non-specialists.
In 2022 we spent a lot of energy on Sustainability training and workshops, Corporate
Governance, Safety and Health, with face-to-face training courses (including fieldaudit exercises), or remotely as already happened the previous year.

TALENTLMS PLATFORM
COMMONREGISTRY
TN ACADEMY(CORPORATE)TRAINING PLANS(LOCAL)TALENT LIBRARY(PRE-DESIGNED COURSES)OUR COMMITMENT TO PEOPLE

TN ACADEMYNEW TRAINING AND DEVELOPMENT TOOL

153

The criteria for evaluating employees who work a full day and employees who work shorter hours
are identical. This was done to ensure a level playing field when it comes to advancement andpromotions. Employees are evaluated (Performance Evaluation and Competency Assessment
process) based on their ACHIEVEMENTS WITH RESPECT TO GOALS (Goals and Objectives
Process) and based on their BEHAVIORS AND COMPETENCES, with respect to the Tsubaki
Nakashima Competencies we identified in the last years and we changed in 2022.

PURPOSES
THE PLATFORM WE SELECTED IS TALENT LMS

Talent LMS will become the Tsubaki Nakashima Training Platform with common:
On-Boarding Programs - partially readyCorporate Governance Training (Code of business ethics and related policies)
already present
Safety and Health training courses, based on our footprints – already present
Sustainability training
Quality Management System#Motus 4.0
Finance for non-specialists

Leverage a SINGLE TOOL
for identification of
performance relative
to assigned goals andrelevant competencies
for the prior year
Everyone has
goals that support
OVERALL GOALS
Create, maintain
ALIGNED GLOBAL
performance
evaluation process
Evaluate and develop
ONE SETOF COMPETENCIES
across Tsubaki Nakashima
SIMPLICITYSMARTPURPOSES OF THE GOALS AND OBJECTIVE PROCESSTRANSLATE FINANCIAL TARGETS
IN INDIVIDUAL AND SPECIFIC TASKSADDRESS THE ISSUES WE HAVE IN EVERYORGANIZATION (E.G.: QUALITY, FORECAST
ACCURACY, OEE, PRODUCTIVITY…)GOALS MUST BE CONNECTED
TO THE STRATEGY (MTP) AND BPGOALS MUST BE THE RESULT OF A DISCUSSIONBETWEEN EMPLOYEEAND MANAGEROUR COMMITMENT TO PEOPLEEVALUATIONSETTING TARGETS AND EXPECTATIONSEVALUATE PERFORMANCES AND COMPETENCIES155

In order to be more focused on simplicity
and alignment with the Mid-Term Strategy
Transform Next 2023, we modified andupdated the Managerial Competencies:
the elements related to the assessmentof competencies, which were 5 (Leading
by Examples, Growth, People, Inspiration
and Delivery) have become 4 taking
into consideration both behavioral
competencies(EthicalLeadership)
andfutureorientation(Growth,Transformation), but also the technicalcompetencies specific to the tasks androle performed and the ability to meet
expectations and achieve expected results.

These are NOW THE CARDINAL POINTS OF OUR EVERY ACTION,
which is why they are represented graphically by a compass

LEADING
BY EXAMPLE

FUTUREORIENTED

DELIVERTECHNICALCAPABILITIESOUR COMMITMENT TO PEOPLE

COMPETENCIES

During the Performance Evaluation andCompetency Assessment 2021 we useda SET OF ELEMENTS which was able totranslate the Managerial Statements inManagerial Competencies.

157

MEDIAN AGE: 46
Americas TAE
MDB TAM

Americas TAC
50

Japan TJTWORKFORCE COMPOSITION

China TCT

40

Japan TJL

China TCC

30
20
10

Japan TJS

The plants with the youngest staff are the Asian ones (India, Thailand, and Taiwan), which aremoreover the most recent ones within our organization. Those with the most experienced
staff are the Dutch and Italian ones, which have been founded for more than 60 years and arewitnessing a progressive generational change, the American one of Erwin, where NN Inc. wasfounded in 1980. acquired in 2017 by Tsubaki Nakashima and the Polish one, also in this casewith a very long industrial tradition behind it.
Men represent 79% of the entire population and women 21%; Tsubaki Nakashima is amanufacturing company, and we believe that the efforts made in Ergonomics and Automation
will continue to allow many women to join us, also in activities that were historically performedby male personnel.

China TCX

Japan TJB

Europe TEP

GCB TJO

Europe TEN

GCB TSR

Europe TEIEurope TEU

Americas
China
China
EuropeEurope
GCB
Japan
MDB

Europe TES
Europe TSI

Europe TEB

The composition of the personnel varies greatly from plant to plant, both for reasons linked tothe culture of the country (in some there are not even female candidates for worker positions,but only for white-collar categories) and for industrial history - it is necessary to compare thesedata with those of the chronological ages, to understand what the historical evolution has been.
IN MOST PLANTS, WOMEN PLAY KEY MANAGERIAL ROLES AS MANAGERS, DEPARTMENTHEADS, AND SUPERVISORS.

OUR COMMITMENT TO PEOPLE

MEDIAN AGE

The median age in our plants guarantees experience, knowledge and commitment, everywhere159

BX Award is recognizing the resultsof peers and colleagues in our group
who have achieved excellence andserve as inspiration and example
for others. We want to inspire andcelebrate positive behaviour, results
and successes. Thriving as a Company
and acting as a worldwide leader
in our business segment can only
be realized by showing exceptional
results and world-class excellence inall the things we do, independent fromthe role we fulfill in the Corporate –Region/Division – Plant or level of
responsibility we hold. Our goal isthat every employee step on board
and feels the spirit of being part of awinning team.

60

Award
nominations

THE BIGGEST CONTRIBUTOR: JAPAN (40)
THE MOST CONSISTENT: CHINA(3 PLANTS CONTRIBUTED PER QUARTER)
THE MOST AWARDED EMPLOYEESIN ONE QUARTER: JAPANPARTICIPATED IN EACH QUARTER:
EUROPE, JAPANREGIONS WITH NO SUBMISSIONSIN A QUARTER: AMERICAS, ASIA

Plants67

Awardedemployees

50
40
30

9

7

21

8

6

22

4

2

12

9

6

12

30

21

20
10
0
1ST QUARTER

2ND QUARTER

3RD QUARTER

4TH QUARTER

TOTAL

12

OUR COMMITMENT TO PEOPLE

TN AWARDS

BX - BE EXCEPTIONAL AWARD

161

Tsubaki Nakashima aims to recognize
and reward excellence across theOrganization, inspiring us to be better,to think bigger and to continue togrow, profitably through the TN Best
Plant Award, which recognizes thecontinuous pursuit of excellence inevery aspect of the business including
customers, employees,
and environment.

For Tsubaki Nakashima is importantto recognize those in our organization
who have really made a difference,and to consider, in addition to theability to generate profit while
keeping the promises of the Business
Plan, the 4 Cardinal Points of our
Performance Evaluation’s process.

ONE TEAM SPIRITETHICS AND COMPLIANCELEADING
BY EXAMPLEABILITY
TO ACHIEVE
THE TARGETS(OPERATING PROFIT)ALIGN ACTIONSWITH CORPORATEGOALSGROWTHORIENTATION (3NS)
CONTINUOUS
SUSTAINABILITY
DEVELOPMENT APPROACH

FUTUREORIENTED

DELIVERTECHNICALCAPABILITIESPROCESS FOCUS (PRODUCTIVITY, QUALITY,
ONTIME DELIVERY, INVENTORY MANAGEMENT)PROCESS IMPROVEMENT INNOVATION,
PROJECTS, KAIZEN)OUR COMMITMENT TO PEOPLE

TN AWARDS

BEST RUN PLANT AWARD

163

BEST RUN PLANT AWARD
Sales and OP will be overachieved.
Continuous challenge of process
improvement for acquisition of new
business and for cost saving, andsupport to TSR's improvement
activities as Ceramic ball motherplant.
Energy saving activities are on goingsuch as switching to LED lights, stop
air leaking (Solar panels’ installation
planned in 2023).
Supplier award from Schaeﬄer and
NTN.
IATF certified since 2021, ISO14001
certified since 2022

OUR COMMITMENT TO PEOPLE

WINNER PLANTS

TJO, GLOBAL CERAMIC BUSINESSOKAYAMA, JAPAN165

BEST RUN PLANT AWARD
Fully realized TEU strategy focusing
on "BRP/TCB business" andachieved a PO of 22.8%.
Improved and developed strong
relationship with key customers.
Created a new method to manage
operational productivity by keeping"Cost of Non-Quality" low (YTD Nov,
BP/0.6% vs Actual/0.2%).
and improving On-time Delivery(Nov 2021/69.8%
vs Nov 2022/91.1%) resulting
in reduced sales back log.

OUR COMMITMENT TO PEOPLE

WINNER PLANTS

TEU, EUROPE REGION
WORTHING, UNITED KINGDOM167

EMPLOYEEOF THE MONTH(TAG - TAM)

BARBECUE AND COOKING, JULY (ABOVE) - COMPANY PICNIC, AUGUST (BELOW) - (TAG)

SOCIAL INITIATIVESINITIATIVESAMERICAS REGION
TAG (GEORGIA),
TAC - TAE (TENNESSEE)MEDICAL DEVICE
BUSINESS TAM (MICHIGAN)

169

SPOT RECOGNITIONPROGRAM, AUGUST(ABOVE)RECOGNITIONFOR EMPLOYEES:
5S, CONTINUOUS
IMPROVEMENT(BELOW)(TAG)

WELLNESSINVOLVING ALL AMERICAN PLANTS

ENCOURAGE SIMPLE,CONSISTENT MOVEMENT.

Connect a fitness tracker
or smartphone to get stepping
together. Compete in fun
challenges that are accessible
for every fitness level.

EMPLOYEE
APPRECIATION DAY, JULYEMPLOYEE OF THE MONTH
ANNIVERSARY AWARDSVETERANS DAY
RECOGNITIONVENDING BUCKSPROGRAM(TAE)
WATER AND COOLING BANDANASDURING SUMMER HEATICE CREAM MACHINE (TAE - TAM)

SOCIAL INITIATIVESINITIATIVESAMERICAS REGION
TAG (GEORGIA),
TAC - TAE (TENNESSEE)MEDICAL DEVICE
BUSINESS TAM (MICHIGAN)

171

VETERAN DAY (RIGHT)
HALLOWEEN (BELOW LEFT)COOKING (BELOW RIGHT)(TAM)

THANKSGIVING AND CHRISTMAS MEALSCHILDREN’S CHRISTMAS GIFT CARDSANGEL TREE AT CHRISTMASCHILDREN’S CHRISTMAS T
REE ORNAMENT DECORATION CONTEST(TAG - TAE, LEFT) - (TAM, ABOVE)

SOCIAL INITIATIVESINITIATIVESAMERICAS REGION
TAG (GEORGIA),
TAC - TAE (TENNESSEE)MEDICAL DEVICE
BUSINESS TAM (MICHIGAN)EMPLOYEE’S CHILDRENSCHOLARSHIP PROGRAM (TAE)
EMPLOYEE’S CHILDRENAT SCHOOL (TAM)
SHRINERS CIRCUS TICKETS
FOR EMPLOYEES (TAE)NORTHEAST STATE COLLEGE
MACHINE TOOL TECHNOLOGY
CLASS TOUR (TAE)
AMERICAS REGIONHANDS OUT YETI TUMBLERS
WITH THE COMPANY
NAME ENGRAVEDTO ALL EMPLOYEES173

(FROM ABOVE RIGHT)
15TH AUGUSTYEAR END PARTY
DUSSHERA CELEBRATIONTSR (THAILAND)(BELOW LEFT)TEAM BUILDINGTEB (BOSNIA)DEVELOPMENT
OF NEW PERSONNEL
AND VISITS TO THE FACULTY
OF MECHANICAL ENGINEERINGFROM SARAJEVOARRANGING PRACTICEFOR NEW ENGINEERS
AND STUDENTS

TJB (JAPAN)
VISIT OFAN ELEMENTARYSCHOOLTCK (CHINA REGION) WOMEN'S DAY

SOCIAL INITIATIVESINITIATIVESTSI (INDIA)

175

CHRISTMAS
PARTY
(LEFT
AND BELOW)(FROM ABOVE LEFT)FUNDRAISINGFOR CHILDREN IN HOSPITALAT CHRISTMASFUNDRAISING
FOR POOR FAMILIESSPONSORSHIPSUPPORTING
SOCIAL ASSISTANCE
MOBILITYHELPINGUKRAINE POPULATIONSOCIAL INITIATIVESINITIATIVESTEI (ITALY)177

14001

45001

50001

Global Sustainability System(based on ISO 14001, ISO 45001
and ISO 50001) appliedin 20 plants and certified.

14 PLANTSHAVE ISO 14001
CERTIFICATION
5 PLANTSHAVE ISO 45001
3 PLANTSHAVE ISO 50001

important ISO Standards of which one ofthem is ISO 45001 (OCCUPATIONAL HEALTHAND SAFETY), established in FY2018 andprogressively deployed in all the factories.
GSS (in its SH portion) is covering safety,
health, disaster prevention, and facilities;
this original Tsubaki Nakashima program isbased on an occupational safety and healthmanagement system that also conforms
to International Labour Organization (ILO)
guidelines. Since that program came into
effect, we have enforced the GSS Manualand Procedures and manage our workplaces
with the idea that EVERY WORKPLACE ISRESPONSIBLE FOR MAINTAINING ITSOWN SAFETY.

HEALTH & SAFETYHEALTH&SAFETY

Tsubaki Nakashima believes that providing
and maintaining a SAFE AND HEALTHYWORK ENVIRONMENT and promoting
PHYSICAL AND MENTAL WELL-BEING
are the foundation of a healthy company.
Accordingly, understanding that safety andhealth are the lifeblood of the company, we
have instituted safety and health systems
and activities at our sites around theworld, so that our employees and partners
can enjoy working as part of a team in ahealthy environment and in the knowledge
that they are safe and secure. The corecomponent of this effort is the TSUBAKI
NAKASHIMA GLOBAL SUSTAINABILITYSYSTEM (GSS), according to the 3 most179

NUMBER OF INJURIES
USA/TAG65CH/TCK

4

EU/TEI

JP/TJB

3
EU/TEU

2

JP/TJS

GCB/TSR

1
0
EU/TEP

EU/TES

USA/TAE-B

JP/TJL

INJURY FREQUENCY BY PLANT

TCK

TEN - RTEN - SMP

TEB

TEI

TES

TEP

TEU

TSI

TAE - R

TAG

CH

CH

CH

EU

EU

EU

EU

EU

EU

EU

EU

US

USA USA USA GCB GCB MDBINJURY SEVERITY BY REGION
Injury Severity = Number of Lost Workdays x 200.000 / Total Worked Hours.

THE FREQUENCY AND SEVERITY OF
OCCUPATIONAL ACCIDENTS IN MOST OFTSUBAKI NAKASHIMA’S PLANTS WERE

LOWER THAN THE
NATIONAL AVERAGE(REFERRED TO 2021).

TAM

TCC

J

TSR

TCT

J

TJO

TJS

J

TAC

TJT

J

TAE-B

TJL

0,5 1,1 0 2,5 0 0 1,3 0 0 0 2,4 1 0 0 0 0 4,6 3,8 4,2 0,9 1,6 0

HEALTH & SAFETY

Injury/Illness Cases (Recordable + Lost days + Ergonomic in juries/illnesses events) x 200.000 / Total Worked Hours

TJB

HEALTH&SAFETY

7181

Tsubaki Nakashima seeks to improve its safety and health programs around the world byholding regular meetings at all the organizational levels to share information, discuss issues andopportunities to improve to achieve ZERO Accidents and ZERO Occupational Illnesses. At theManagement Committee level, during the bi-weekly meeting, our Executives update one anotherabout actions being taken and discuss issues to identify opportunities for improvement. At theRegional and operational level, Managers, Supervisors, Workers’ Representatives and Sustainability
Representatives also meet regularly to share information (Sustainability Committee). According to
the Global Sustainability System, an annual Management Review has been prepared in every plantand consolidated at Global Level.
Starting in 2019, we have developed a system of internal standards, based on international technicalregulations (ISO) pertaining to safety, health and the environment, which is called Minimum
Technical Standard, in order to:

Ensure all
Tsubaki Nakashima
Plants run the businessin a manner that results in

Injury Free, Incident Free and noadverse environmental impacts,
in full compliance with TN
Management Principles,International Standards
and local Laws.

MINIMUM TECHINCAL STANDARDS

is a method of establishing uniformity of minimum expectations,over 43 minimum techincal EHS & E standards developed.
Clearlystate TN Plants’obligation to developa Sustainability Plancomplying with the
Minimum TechnicalStandards

Ensureall Tsubaki
Nakashima Plants

utilize consistent EHS &Energy standards andestablish/share
Best Known
Methods

A Procedure containing the International Minimum Standards
A Visual example of what we are talking about
A detailed and complete training session, with pictures and drawings
Each MTS has adjoining MTS implementation Checklist

HEALTH & SAFETYHEALTH&SAFETY

SAFETY MANAGEMENT INITIATIVES

183

Tsubaki Nakashima analyzes all occupational injuries and accidents, identifies causes, andmakes plans for preventing similar incidents. Occupational accidents are reported in the form of
PRELIMINARY ACCIDENT REPORT AND ROOT CAUSE ANALYSIS which describes accident causes,
countermeasures, and actions that all sites are to take to prevent similar accidents in the future.
These reports are placed on the intranet (One Team Software) and discussed with employees.

In 2022, we implemented TWO NEW TOOLS: for environmental, safety and health inspection
and a toolkit for safety and health risk assessment. This allows for an in-depth initial (and periodic)
assessment, action plans for troubleshooting and improvement, and frequent monitoring of safety
status. At the end of 2022 we then transformed the Safety & Health Inspection toolkit into softwaremodeled on the Auditing system and preventive and corrective actions already adopted in the
Quality Management System.

SUSTAINABILITY AUDITS AND ENVIRONMENT AND SAFETY
INSPECTIONS IN 2022

TSUBAKI NAKASHIMAPROFESSIONAL DEVELOPMENT THROUGH SAFETY AND HEALTH TRAINING
Tsubaki Nakashima considers safety and health training vital for protecting employees.
The training curriculum is tailored to the position, roles, and responsibilities of employees.
Training for non-management employees focuses on practical techniques such as risk assessment
and hazard prediction. Training for managers and supervisors focuses on leadership. All Group
companies use the Training Plan to include specific EHS training. Our Chief HR Officer provided
training concerning the Global Sustainability System and Minimum Technical Requirements to theManagement Committee, Regional Presidents and all the HR & Sustainability Team members.

SAFETYENGINEERING MANUALOur Safety Engineering Manualis a detailed guidance on how machine
guarding, and electrical safety is
to be set up and maintained
to ensure employee protection.

As can be seen from thegraphs, the number ofInspections and Audits has
been impressive and destined
to grow in quantity andquality. We therefore expecta sharp decrease in accidents
in the coming years

HEALTH & SAFETYHEALTH&SAFETYRAISING PEOPLE AWARENESS WITH ACCIDENT REPORTS

185

During 2022, and thanks to the decrease in travel difficulties following the pandemic, training
courses on safety and health were held - with 31 modules and different topics, audits and awarenessacquisition in the field involving 75 managers and supervisors in Japan, 25 in Thailand and over
150 in Europe. In 2023, there are plans to extend the training to America and China, thus covering
the entire organization. The Talent LMS e-learning platform will make it possible to use all thetraining material (and course videos) both for on-boarding new employees and for refresh training.

HEALTH & SAFETYHEALTH&SAFETY

SAFETY TRAINING

187

AMERICAS REGION
TAC - TAE (TENNESSEE)In 2022, both TAC and TAE improved their facilities to better comply with the standards of Tsubaki Nakashima, be at the forefrontof innovative, creative, and inclusive ideas and suggestions, help
create a safer environment, and build a team atmosphere.

TSI (INDIA)

3 IMPORTANT PROJECTSIN THE FIELD
OF WASTE REDUCTION,ELIMINATING LEAKAGESIN THE PRODUCTION
DEPARTMENTS.
INTRODUCE
RETURNABLE
PACKAGINGTO CUSTOMERS.

(RIGHT)ERGO AI STUDYAND CORRECTIONS(VIA TUMEKEERGO APP)(LEFT)
IMPLEMENTINGFULLY ELECTRIC
HOISTS/ELIMINATING
PUSH-PULL MANUALHOISTS FROMMOST ACTIVE AREAS.
INSTALLATIONOF HIGH VIZ LOTO
(LOCK OUT-TAG OUT)STATIONS IN HIGH-TRAFFIC AREAS.
IMPLEMENTATION OF
KEVLAR PROTECTIVESLEEVES PREVENTING
DERMATITIS.
PARTNERED WITH
XENA WORKWEAR ON
PROPERLY FITTINGPPE FOR ALL WOMENIN THE WORKPLACE.

IMPLEMENTED HOT WORKPERMITS-CONTRACTORSAFETY PROGRAMSEMPLOYEE OF THE MONTH
PROGRAMS.
REVAMPED TAC SAFETY/SUSTAINABILITY TEAM
WITH NEW EMPLOYEES,GREATER FOCUS
AND MORE PRO-ACTIVEINTENSITY
MONTHLY SAFETY AWARDCONTEST IF NO INCIDENTS(TAC)

HEALTH & SAFETY INITIATIVESOTHER INITIATIVEBRIGADE
TCC (CHONGQUING) FIRE
TRAINING

189

TSR (THAILAND)NEW N PROPYL BROMIDESYSTEM to prevent pollution

in the plant environment
and protect people’s health.

CLEANING AREAS IN THE PLANTHEALTH CHECKDRUG TESTNEW WIRE DRAWER

FIRE TRAINING

cleaning systemin the heading department

TWO (2) SMOG HOG
VENTILATION UNITS

put in place to eliminate unhealthy
smoke and reduce the oil mist fromcontaminating and causing oil build
up on machinery helping to reduce
health effects and potential fires.

White factory project

HEALTH & SAFETY INITIATIVESOTHER INITIATIVETAG (GEORGIA)

191

TCT (CHINA)

HONEY PRODUCTION
BEE PROJECTSOLAR ENERGY POWER
RENEWAL ACTIVITIESIN THE PLANT

CLEAN THE WORLDTJB (JAPAN)
FIRST AID TRAINING
AND FIRE DRILLHEALTH & SAFETY INITIATIVESOTHER INITIATIVETEP (POLAND)

193

During 2022 Tsubaki Nakashima has started to engage
its MAIN SUPPLIERS IN THE SUSTAINABILITY
ROADMAP AND IN THE GREEN TRANSITION. We
believe that all of our suppliers must be committed tothe same challenges as we are facing, in other words,
those related to sustainability. We also believe that itis really important to share and support each otherin this journey. The purpose of this self-assessment
questionnaire is to evaluate the Social, Governance andEnvironmental impacts of our main suppliers.
Following the guidelines of the GRI standard weevaluated several areas:
ISO certifications
Business ethics
Child labour
Forced labour
Freedom of association
Discrimination
Working hours
Compensation
Safety and Health
Environment
Carbon footprint & sustainability goals
Percentage of renewable energy used

SUPPLIERS

SUPPLIERS

In 2022 our efforts were concentrated in collecting
Scope 3 data for our raw material suppliers, and toextending the ESG questionnaire to all of our suppliers
through our local purchasing networks during 2023

195

RAW MATERIALSSUPPLIERS EVALUATED81%

SUSTAINABILITY AND SUPPLIERS 2023

One of the goals for 2023 is to let the Suppliers
understand our strategy and activities and understandtheirs. For that purpose, we plan to analyze with the
Suppliers:

ARE ISO 14001
CERTIFIED

actions taken to address the significant actual andpotential negative environmental impacts identified in
the supply chain, and whether the actions are intended
to prevent, mitigate, or remediate the impacts;

29%

ARE ISO 50001
CERTIFIED

how expectations are established and defined incontracts with suppliers to promote the prevention,
mitigation, and remediation of significant actual andpotential negative environmental impacts, including
targets and objectives;

62%

whether suppliers are incentivized and rewarded for theprevention, mitigation, and remediation of significant
actual and potential negative environmental impacts;

MONITOR THEIRCARBON FOOTPRINT43%MONITOR THEIR %OF RENEWABLE ENERGY62%

HAVE SET TARGETS
FOR SUSTAINABILITY

practices for assessing and auditing suppliers and theirproducts and services using environmental criteria;
the environmental criteria for the assessment will bebased on the contents of GRI 302: Energy, GRI 303:
Water and Eﬂluents, GRI 305: Emissions.

SUPPLIERS

SUPPLIERS

91%

197

Through a specific tool for collecting data relating to sustainability (EGS THROUGHNUMBERS), obviously including Corporate Governance, and specifically the violations of
the law contested by the Authority as well as access to the available Hot Lines, we monitor
on a monthly basis what happens in our factories. Based on this we can state that during
the year 2022 Tsubaki nakashima reported ZERO Violations of any law and local regulation,
as well as ZERO Complaints from our Employees

COMPLIANCE AND LAWS

ZERO VIOLATIONZERO VIOLATIONS!

199

INTRODUCING ESG REPORT AND METHODOLOGICAL NOTE

4-7

STRATEGY AND PILLARS

106 - 107

MESSAGE FROM THE PRESIDENT AND CEO

8 - 13SUSTAINABILITY

108 - 117VISION, MISSION AND MANAGEMENT PRINCIPLES

14 - 17SUSTAINABILITY WORKSHOPS

118 - 125

POLICY18 - 19SUSTAINABILITY

126 - 141

OUR HISTORY

20 - 23

OUR COMMITMENT TO PEOPLE

142 - 167

COMPANY PRESENTATION AND STRUCTURE

24 - 29

SOCIAL INITIATIVES

168 - 177

ORGANIZATIONAL CHART

30 - 33HEALTH & SAFETY

178 - 187

OUR PRODUCTS

34 - 45HEALTH & SAFETY INITIATIVES

188 - 193

MID-TERM STRATEGY

46 - 55

SUPPLIERS

194 - 197

GLOBAL QUALITY AND CENTRAL LAB

56 - 59

ZERO VIOLATIONS

198 - 199

INTERNATIONAL EVENTS

60 - 65

INDEX

200 - 201

RELATIONS WITH SCHOOLS

66 - 67

CREDITS

202 - 203

CORPORATE GOVERNANCE

68 - 75

NOTES

204 - 205

RISK MANAGEMENT

76 - 83

OUR ENVIRONMENT

84 - 97

SWOT ANALYISIS

98 - 101

OUR STAKEHOLDERS

102 - 105

INDEX

INDEX

PAGES

PAGES

201

Many of the pictures collected in this edition havebeen taken by FRANCO DUTTO, CHRO of Tsubaki
Nakashima. You have appreciated them in most of thepages of this report.
Some other pictures are under license of
DEPOSITPHOTOS.COM. Specifically: drawing of thebridge on pages 14-15 (© Alinart/Depositphotos.
com), picture of the Tokio Exchange on pages 24-25(© sepavone/Depositphotos.com, picture on page 37of the Shinkansen (© vincentstthomas/Depositphotos.
com) and of the blue car (© MaR1Art1/Depositphotos.
com), picture of the subway on page 45 (© fransz/
Deposiphotos.com), picture of people on pages 102103 (© Wirestock/Depositphotos.com).

CREDITSCREDITSThe graphic design and the graphic development of thecontents in this publication were thought and createdby MARIO BOIS, Italian eclectic artist, that expresses his
creativity in different fields, being: graphic designer,
actor in theatre and film industry, journalist, director,
author and poet. He played the main character in"FIORI", movie nominated among the three finalists
at Italian Golden Globe in Rome in 2022. Since 2021
he’s glad to be called to work at new strategies andideas for an efficient, creative and impressive corporate
identity and communication for Tsubaki Nakashima.

203

205

NOTES

NOTES

Edited in March / April 2023.