CSR REPORT2019
NOK C O R P O R A T IO N

KOREAJAPANGERMANYCHINANOK Group's
Global Operations

TAIWANINDIA
THAILAND

EuropeVIETNAMMALAYSIASINGAPORE
INDONESIAUNITED STATES OF
AMERICA

Asia

North
America
Table of Contents
NOK Charter of Corporate Behavior

2

Message from the President

3

Concept of CSR and Our Organization

5

O

Strategy & Management
Management Foundation

F

6

NOK Group Business Overview

8

O

NOK Group's Products Support Daily Lives9

NOK Group's Technologies and Products

10

FUKUSHIMANOK Group
KANAGAWA Head OfficeTOKYO
SHIZUOKA

Environmental Performance
Environmental Management

11

E

Input & Output of Our Business Activities
Results and Targets

13

E

Environmental Performance Data

15

E

Toward the Realization of a Sustainable Society

Reports from NOK Group Sites

17

E

Bases of NOK CORPORATION

18

E

Environmentally Conscious in All Business Activities
Procurement Policy

KUMAMOTO

14

E

Global Warming Countermeasures

IBARAKITOTTORI

Bases of NIPPON MEKTRON, LTD.

19

E

Bases of SYNZTEC CO., LTD.

21

E

Bases of NOK KLUEBER CO., LTD.

22

E

Bases of UNIMATEC CO., LTD.

Social Performance
Custmer First

23

C

Social / Local Area Activities

Communication with Shareholders, Investors and External Organizations
Relations with Employees

H

25

I

L

Third-Party Opinion

C

29
30
34

Editorial Policy

The symbols next to chapter titles indicate the chapter's relevance to the seven core
subjects of social responsibility as defined by ISO26000.
O

Organizational GovernanceH

Human Rights

L

Labor Practices

E

The Environment

F

Fair Operating Practices

C

Consumer Issues

I

Community Involvement and Development

This report has been edited in reference to ISO 26000:2010Guidance on Social Responsibility.
●Period Covered
Most of the activities described in this report were carried out in FY2018(April 1, 2018, to March 31, 2019), but some took place in FY2019.
●Organizations Covered
All divisions of NOK Corporation and other NOK group companies inJapan and abroad.
●Date of Issue for Japanese Version: July 2019
●Date of Issue for English Version: August 20191

NOK Charter of Corporate Behavior
Established on May 1, 2006 / Revised on July 1, 2019
NOK Corporation

Management Policies

1. The Management has to run the Company based on
feelings of love and trust in its employees.

1. We are committed to be a strong and unique parts supplier while
focusing its managerial resources on core business areas.

2. We are committed to be a profitable and robust company while fulfillingcompany-wide cost reduction programs ranging from front-line sales tomanufacturing floor.

3. The Management has to run the Company while making
absolutely incredible efforts against all odds and risks.

3. We are committed to continuously improving our quality while
producing and selling our products that are proven to be technologicallyunique and socially useful, on a global scale.

4. The Management has to run the Company while pursuing
dreams with management plan.

Principles of Corporate Behavior
1. Provision of Socially Useful
Products
2. Fair and Appropriate Trade
3. Proper Disclosure andManagement of Information
4. Thorough Risk Management
and Severance of all relations
with Antisocial Forces andGroups
5. Commitment toEnvironmental Conservation
6. Promotion of Social
Contribution Activities
7. Cooperation with theInternational Community
8. Respect for Human Rights
9. Provision of a Safe andComfortable Working
Environment

10. Responsibilities of Our Officers

11. Response to Problems

We will develop and provide socially useful and safe products through the creation of new value, andprovide pertinent information regarding products and have sincere dialogues with end users andcustomers while also working to achieve sustainable economic growth and solve social issues, thereby
gaining their satisfaction and deeper trust.
We will ensure that we engage in fair, transparent, and free competition, that transactions are appropriate,
and that responsible procurement is carried out, when selling products and purchasing materials. Also, wewill maintain a sound and proper relationship with political bodies and government agencies.

We will disclose accurate information about the Company timely and appropriately, and have constructive
dialogues with the various stakeholders who surround our business in order to increase the corporate
value. Also, we will protect and properly manage personal and customer data and other types of
information as well as intellectual property rights.
We will resolutely provide systematic risk management to prepare against activities of antisocial forces,
terrorists, cyberattacks, natural disasters, and other elements that threaten the lives of the public andbusiness activities. Especially we will resolutely confront any antisocial forces or groups and sever all
relations with such groups.
We will proactively initiate environmental conservation activities while taking into account the factthat commitment to solving environmental issues is a prerequisite for a company to engage in businessactivities as a going concern.
As a good corporate citizen, we will actively participate in communities and contribute to theirdevelopment.

As a global corporation, we will comply with laws and regulations of the countries and regions where ourbusiness operations are based, and respect human rights and other international norms of behavior (ex.
prohibition of child labour and forced labour). Also, conduct business by taking into consideration the local
culture and customs as well as the interests of stakeholders, and contribute toward the development of thelocal economy and society.
We will carry out management that respects the human rights of all people.

We will realize a work style that enhances the abilities of employees while respecting their diversity,
character and personality, and by drawing a line between public and private matters, and maintaining
order in the workplace, we will realize a comfortable working environment that takes cleanliness, health,and safety into consideration.

Our officers, while carrying out management with the recognition that it is their role to realize the spirit ofthis Charter, will establish effective internal control systems, and will take the lead in an exemplary manner
to implement the Charter within the entire NOK Group, while encouraging our business counterparts to
act in a manner consistent with this Charter. In addition, our officers will constantly listen to opinions fromboth within and outside the Company to ensure compliance with business ethics.

In the event that a matter in noncompliance with this Charter arises, which causes society to lose trustin us, our officers will take steps such as taking the lead in solving the problem, identifying the cause,and taking measures to prevent the recurrence of similar problems, thus fulfilling their responsibilities.
Moreover, they will publicly disclose relevant information promptly and appropriately, fulfill theiraccountability requirements, indicate those who are in authority and those who are responsible, andseverely punish those involved, including themselves.

2

3 Society

2. The Management has to run the Company while uniting toensure full ventilation without forming any cliques.

2 Environment

Management Principles

1 Strategy & Management

We, NOK Corporation, are committed to being an entity that fulfills the role of driving efforts toward therealization of a sustainable society according to the Management Principles under the NOK spirit. We will pursue
this through developing the Management Policies in such a way that all its stakeholders are proud of us and chasetheir dream with us; and, while upholding the principle of fair and free competition, through creating added
value that is socially useful, generating employment, and autonomously acting responsibly. In order to achieve
this realization, we will behave according to the eleven principles set forth below in the Principles of Corporate
Behavior in both domestic and overseas operations, so as to respect human rights, comply with related laws,
regulations, and international rules as well as the spirit behind those, and discharge our social responsibility
with a strong sense of ethical values.

Message from the President

Reinforcing business structure forsustainable growth and becoming a highly
profitable corporate group in which all
stakeholders can take pride
President of

NOK CORPORATION

Kiyoshi Doi

Our Three-year Plan for Reinforcing Business
Structure for Sustainable Growth

Under the new plan, we will also emphasize better, more reliable

As of recently, global politics and the global economy are becoming

continuity management (BCM) system based on the lessons learned

quality by making comprehensive efforts to prevent the occurrence

and outflow of defective products. We will rebuild our businessincreasingly uncertain. The world today is plagued by the rise offrom the 2011 Great East Japan Earthquake and the 2016 Kumamoto

nationalism triggered by immigration issues as well as struggles

Earthquake.

for power, including trade wars, accompanied by a slowdown ofAnother priority for us is implementing a management spirit

the global economy. Wealth disparities, inequality of educationalthat respects human dignity . Respect for human dignity is one

oppor t unit ies, relig ious conf lic t s and tensions related toof the Management Principles of the NOK Group. We aim to build

immigration have worsened, with a series of disputes continuing

a workplace where all employees can feel that they are growing

to break out in many regions of the world. Meanwhile, in Japan,

through their work, and that what they are doing is meaningful

the economy is growing, albeit at a low rate, the unemployment

to societ y and directly or indirectly linked to the improved

rate remains low and t here is a chronic shor t age of labor.

performance of their organization or company. Our policies

Recognizing and preparing against such risks and uncertainties,

for organizational operation, personnel systems and employee

the NOK Group strives to produce low-cost original products—

education will be constantly reviewed and improved from thesebacked by technology—which are useful to society, and sell themperspectives.

at reasonable prices all over the world.

The NOK group launched a Three-year Plan (mid-term businessContinuing Environmental Managementplan) in FY2017. Its underlying policy is Reinforcing Business

The NOK Group is committed to environmental conservation

Structure for Sustainable Growth . In pursuit of becoming a highly

profitable corporate group in which all stakeholders can take pride,a c t i v i t i e s b e c a u s e w e c o n s u m e e n e r g y a s a d e v e l o p e r,

driver assistance systems (ADAS), and as new technology trends

qua lit y are key f ac tors t hat we must foc us on in order tomanufac t urer and seller of produc t s used in automobiles,

NOK places top priority on steadily continuing business. As themachinery, and electronic devices. Safet y, environment andautomotive industry moves toward electrification and advanced

remain a prefer red par t s supplier to c ustomers. T his has

emerge, including advances in artificial intelligence (AI), we seek tobecome particularly true in the past several years and is now a

optimize our customer base by expanding sales of existing products

precondition for sustainable business activities. The NOK Groupand by boosting development and sales of new products.

promotes environmental management, with the recognition

3

A Corporate Group in Which All Stakeholders
Can Take Pridethat taking initiatives to address environmental issues is one ofbuilding a recycling-oriented society by cutting back on the use

We believe that communicating with local communities as a goodof environmentally hazardous substances, reducing waste andcorporate citizen is essential for the continuation of businessdeveloping environmentally friendly products at the global level.

activities. Among various social contributions we have made to date

The Paris Agreement was adopted by COP21, which is officially

are implementing community support programs in districts where

known as the 21st Conference of the Parties to the United Nations

our sites are located and sponsoring events relating to the education

Framework Convention on Climate Change, and entered into

encourages open communication and a workplace where employees

its greenhouse gas emissions by 26% from the 2013 levels by

can work with a sense of fulfillment. This is a part of our efforts to2030. In response to this move, the Japan Auto Parts Industries

implement the management spirit that respects human dignity. The

Association (JAPIA), of which NOK is a member, established a

NOK group aims to be an enterprise that not only brings economic

voluntary environmental action plan to pursue its targets to bebenefits to stakeholders, but also makes them proud.

achieved by FY2020 and FY2030. The NOK Group has developed amedium- to long-term environmental plan in view of these goals.

2 Environmentof younger generations. We also seek to build an organization thatforce later in 2016. In this climate accord, Japan pledged to reduce

1 Strategy & Management

our top priorities. We intend to make sustained contributions to

CSR Report

Take on Challenges for the Next-Generation Environment. Its three

NOK published it s f irst Env ironment al Repor t in 2004 andpillars are prevention of environmental problems, which is forhas cont inued since t hen, w it h t he t it le being changed topractical and effective BCM actions; reduction of our environmental

Environmental & Social Report in 2006. It was renamed again

impact for future generations, which seeks to help Japan fulfill

as the CSR Report in 2017 to better describe our business andits pledge under the Paris Agreement; and enhancement of thesocial activities in addition to environmental efforts. This reportenvironmental hazardous substance management system to meetis an important tool to improve the way we communicate withexternal requirements, which relates to environmental quality. We

stakeholders and the public. We would look forward to receiving

will also address the recently discussed topics of environmental

frank opinions and comments on the report.

impact on water and biodiversity conservation in the course of these
activities.

In FY2017, we have started deliberations to draw up a mediumto long-term environmental vision for NOK to strengthen ourenvironmental management. We are striving to share more of the
NOK group's environmental activities with stakeholders.

Group
Three-year Plan (FY2017 to FY2019)
Slogan“Reinforcing Business Structure for Sustainable Growth”
Chairman's Initiatives(1) Building well-balanced customer mix-Targeting sales expansion and new business creation(2) Achieving sustainable unrivalled quality(3) Establishing practical and effective BCM(4) Implementing management spirit that respects human dignity-Fostering vibrant people and workplace

4

3 Society

Our Environmental Policy for the three years starting FY2017 is toConcept of CSR and Our Organization
Concept of CSR
As stated in the Charter of Corporate Behavior, the NOK Groupof corporate social responsibility (CSR) is an integral part ofaspires to drive the realization of a sustainable society while

continuous business activities.

operating its business in a way that makes our stakeholders

We also value communication with stakeholders as an effective

proud to pursue their dreams with us.

way to broadly examine the business climate and situation, as

All of our business activities are built on the NOK Charter ofwell as to identify business risks and opportunities. The NOK

Corporate Behavior (Management Principles, Management Policies

group aims to be a company that not only brings benefits toand Principles of Corporate Behavior). We believe that fulfillingstakeholders, but also makes them proud.

the environmental, social and corporate governance aspects

Local
Community
and Society

Customers

Stakeholders

Suppliers

Shareholders
andInvestors

Financial
Institutions
To be a responsible developer,
producer and seller of products aswell as energy consumer, we strive
to reduce environmentally hazardous
substances and waste and develop
environmentally friendly products.

Quality Control
Occupational Healthand Safety
Employment Measures

Waste Reduction
Energy Conservation
Chemical Substances Control

Environmental
Consciousness
Green Procurement
Ecodesign
Resource Conservation

Employees

Contribution
to Society

NOK Group's
Business Activities

Compliance
Information Disclosure

Corporate
Governance

Cooperation with
Local Community
Social Contribution
Working Conditions

Corporate GovernanceRisk Management

We h a v e a n i n t e r n a lsystem that ensures fair
and appropriate business
transactions as wellas business activities
that respect laws andinternational rules,
and seek to disclose
information in a timely,
appropriate manner.

Principles of Corporate Behavior

NOK Charterof Corporate
Behavior

Management Policies
Management Principles

Our CSR Organization

We provide products that meetcustomer needs, endeavor to createa workplace where every employee
can work safely with a sense offulfillment, and contribute to the local
community and global society as agood corporate citizen.

Board of Directors

The CSR Committee was organized in October 2016 to increase theReports and Proposals

awareness of CSR throughout the company and to promote CSR

Approval

CSR Committee

activities more effectively.
Chair: Manager of Corporate Administration Office

Reports

Members: Representatives of the Environment Control Dept.,

Related Internal Organizations
Central Environmental Protection Committee
Internal Control Audit Committee
Risk Management Committee
BCM Committee
Information Security Committee
Divisions
Safety and Health Committee
Labor-Management Council

Procurement Control Dept., Corporate Planning Dept., Corporate
Communication Dept., Legal Affairs Dept., General Affairs Dept.,
Personnel Dept., Safet y & Health Dept., Corporate IT Of fice,Engineering Administration Dept. and Sales Administration Dept.
The CSR Committee collects reports from related internal committees
and divisions and oversees company-wide CSR activities while
disseminating external information, such as issuing CSR reports.

5

Management Foundation
Corporate Governance System
NOK's head office divisions have established rules for the internalContinuously strengthening the corporate governance system iscontrol system. In accordance with the rules, these divisions give

one of our business management priorities, and we are committed

directions to NOK's operating divisions and subsidiaries, while theto this goal.

control system to determine the progress of improvement andcorporate auditors. In our organization, directors who are well-

implementation. In FY2018, there were no legal violations orversed in operations work together in harmony, while good

lawsuits against NOK that affected our performance critically.

governance is maintained through mutual monitoring by internaland external directors, as well as through management audits
conducted by statutory auditors, including external auditors.

2 Environment

Corporate Governance System
Shareholders' Meeting
Appoint/Remove

Board of Directors

Appoint/Remove

Audit/Report

Refer important
issuesReport executed
operations

Consult

Appoint/
Supervise

Independent Auditor

Exchange information
ReportInternal Control Audit Committee

Reply

Chairman and President/Representative Director
ReportReportReportCheck progress of business plans,Management Meetings and Management Reviews management policies and operating
plans

Central Labor Management Council, etc.

DirectDirectExplain or discuss business plans,
important organizational changes,
management policies, etc.
ReportHead Office Divisions
DirectRisk management, compliance, quality/environmental management, etc.

Operating Divisions/Group Companies

Audit
Audit

The numbers of directors and auditors are as of June 30, 2019.

Compliance System

Crisis Management

Pursuant to the NOK Principle of Corporate Behavior, the

Our Corporate Risk Management Office takes the initiative in

Behavioral Guidelines Concerning Employee Compliance set

building our crisis management system, setting the following basic

forth the rules that employees must observe in their business

policies:

activities.

(1) Give first priority to ensuring safety, protecting people and

The NOK Group has designated October of every year as

saving people's lives.

a compliance promotion month in order to regularly inform(2) In the event of a disaster in the local region, make proactive

employees of NOK's compliance initiatives and to help raise

contributions to the reconstruction of the region as a member

their awareness of compliance, such as through conductingof the community.

a survey of all employees on their compliance awareness.

(3) In an emergency, minimize the impact on our customers andWe also continuously promote awareness. Efforts include

other stakeholders by continuing business to the extent

distributing a compliance guide to every employee, publishingpossible in order to fulfill our responsibilities.

a series of articles entitled An Introduction to Compliance in

To ensure quick information gathering in the event of a major

company newsletters, conducting compliance training during

disaster, we maintain a safet y confirmation system and an

new employee orientation and providing workshops for new

emergency calling tree, and have emergency communication

managers.

devices in place. We also store supplies necessary to resume
business smoothly.

Risk Management

The Central BCM Committee was formed with the mission of establishinga more effective business continuity management (BCM) system

To effectively address diversifying risks, the NOK groupbased on our experience of past disasters. Under the initiative of thepromotes an organization-wide risk management system withcommittee, we are planning and implementing group-wide measures in

the Risk Management Committee as its center.

terms of facilities, systems and employee education, including reinforcing
production facilities against earthquakes, strengthening product supply
functions, reviewing the current business continuity plans and conducting
projects that encourage the reform of employee awareness. Through allthese endeavors, we maintain our robust business continuity system.

6

3 Society

5 Auditors (including three external auditors)

Appoint/Remove

ReportBoard of Statutory Auditors

9 Directors (including two external directors)

1 Strategy & Management

Internal Control Audit Committee periodically audits the internal

NOK has adopted the format of a company with a board of

Information Security Measures

Business Plan

To protect information received from customers, preserve

We intend to be a competitive, world-leading enterprise groupcompany assets such as proprietary technologies, and ensure

under the management principle of respect for human dignity.

1 Strategy & Management

appropriate use of information assets, we have established theIn the Three-year Plan that started in FY2017, the NOK group

2 Environment

systematic renewal and enhancement of security devices, in order

NOK Group Information Security Policy. Also, the Information

seeks to achieve sustainable growth and development bySecurit y Commit tee has been formed to closely align our

optimizing its customer base through sales expansion and new

information security efforts with our business activities and tobusiness creation, further improving and stabilizing quality,

involve top management in this initiative.

establishing a BCM system, and developing human resources to

In FY2018, we continued our ongoing review and upgrade of ourdrive these activities.

overall information security regulations, as well as undertaking

Reporting and Whistle Blowing System

to deal with increasingly shrewd and sophisticated cyberattacks.

The NOK group provides a reporting and whistle blowing system

In addition, the Information Security Committee assessed risks

for the early detection and correction of compliance regulation

associated with information assets, consistently enhancing our

violations.

abilities to manage risks. We will continue to implement a P-D-

An employee who has noticed a violation can contact theC-A cycle to maintain and improve our information security

reporting hotline. If the violation continues even after the reporting

measures.

or the employee finds it difficult to report the case, he or she can

3 SocietyProtection of Intellectual Property

contact the whistle blowing hotline.
The whistle-blowing hotline consists of the Internal Control Audit

Our Behavioral Guidelines Concerning Employee Compliance

Committee and independent lawyers. Reports can be maderaise awareness among employees by providing precautions

anonymously, provided they are objective and specific. Moreover,regarding adherence to laws related to intellectual property

the whistle - blower is p rotec ted against disadvantageous

rights. This is one of our efforts to promote patent application andtreatment under the compliance regulations.

rights acquisition for our inventions. The Guidelines also advocate
respect for intellectual property rights of third parties. The NOKGroup endeavors to prevent infringement of other companies'
patents through patent search.
To protect NOK's brands, we combat counterfeiting, even outside
Japan, through our Anti-Counterfeit Committee. In FY2018, we
uncovered 11 counterfeit factories in China and got 1,066 web
pages selling imitation products taken down from online sales sites.

Anti-Corruption Initiatives
The NOK Group works to fight against bribery and corruption by
stipulating the following in its Principles of Corporate Behavior:“Wewill engage in fair, transparent, and free competition and ensure
appropriate transactions and responsible procurement. We also

NOK Group Whistle-blowing Hotline

maintain a sound and proper relationship with political bodies andgovernment agencies.”
Pursuant to the Principles, the Behavioral Guidelines Concerning
Employe e Co mpliance p ro hibit collusive rel atio nships an dViolation

corrupting behaviors involving business partners and public officials,
including excessive entertainment and bribery. The guidelines❸Investigation/
Correction

also forbid embezzlement and misappropriation and other actsthat may affect company profits. These rules are communicated to
employees through providing education and distributing compliancehandbooks to help them maintain a high level of awareness.

Employee

In the event of a violation of the Group's anti-corruption policy, theRisk Management Committee is primarily responsible for taking❹Response

action. Information on violations of the anti-corruption rules can be❶Reporting

shared via the whistle-blowing hotline.

❹Response

Choose❶Reporting

The Internal Control Audit Committee conducts annual anticorruption audits and reports the results to the Board of Directors.
In FY2018, there were no violations across the Group.

Internal Hotline〈NOK〉
Secretariat of the Internal Control
Audit Committee(Legal Affairs Dept.)

7

External Hotline〈Lawyer〉❷Cooperation

NOK Group Business Overview
Net Sales and Operating Income (FY2014 to FY2018)

Sales by Segment (FY2018)■ Net sales (Billions of yen) ■ Operating income (Billions of yen)
Billions of yen

400

100

693.7

746.1

713.1

669.5

48.3

44.9

39.8

2016

2017

20

44.4%
297.4

0
2018 （FY）■ Seal Business

51%
341.7

■ Electronic Products
Business■ Roll Business■ Other Business

Seal Business

2 Environment

2015

Net Sales:
669.5 billion yen

40
23.1

2014

80
60

67.1

200
0

729.3

1.5%
10.4

1 Strategy & Management

800
600

3.0%
20.1

Billions of yen

Net sales: 341.7 billion yen

3 SocietyOperating income: 36.2 billion yen
Major products: Oil seals, O-rings, dust covers, industrial rubber
and resin products, rubber sound and vibration isolators
Major operating companies: NOK CORPORATION, UNIMATEC CO., LTD.
Founded in 1941, NOK is Japan's first oil seal manufacturer.
This functional part seals oil and is used in automobiles and manyother machines in a wide range of industries. NOK also develops,
produces and sells items that leverage our synthetic rubber
processing technology, including O-rings and packings.

Electronic Products BusinessNet sales: 297.4 billion yen
Operating income: △14.2 billion yen
Major products: Flexible printed circuits (single-sided, doublesided, multilayer and component assembly FPCs)
Major operating company: NIPPON MEKTRON, LTD.
The company develops, manufactures and sells flexible printed
circuits (FPCs). FPCs are built-in electronic devices that requirecompact, lightweight and super-flexible electronic circuit boards.
They are commonly found in smartphones, mobile phones, harddisk drives and digital cameras. As automobiles are employing
an increasing number of electric and electronic components,
automotive FPCs are finding wider applications including switches,
sensors and lights.

Roll Business

Other BusinessNet sales: 20.1 billion yen

Net sales: 10.4 billion yen

Operating income: △0.1 billion yen

Operating income: 1.2 billion yen

Major products: Development and charge rollers, cleaning blades,
fixing belts, pressure rollers, products for financial terminals,
products for textile machinery,

Major products: Special lubricants (grease, oil and coatingproducts for automobiles, industrial machinery, electric
appliances, food machines, etc.)

Major operating company: SYNZTEC CO., LTD.

Major operating company: NOK KLUEBER CO., LTD.

Production of highly functional rollers for office equipment such

We develop, manufacture and sell a range of lubricants that offer

as copiers and printers.

excellent performance under harsh operating conditions, such as
super-high or super-low temperatures, at high speed or under heavyloads. Comprehensive services are available to help customers
improve the productivity of their facilities and machinery and to reduce
maintenance costs.

8

NOK Group's Products Support Daily Lives

1 Strategy & Management

Automobile and Traffic Safety ProductsElectronic Devices

The NOK group's products for automobiles and motorcycles include seal products (such as

NOK's FPCs, precision rubber and resin

oil seals, O-rings and gaskets), flexible printed circuits (FPCs), rubber vibration isolators,

components are built into various electronic

dust covers and lubricants. We also offer lane control/guidance products and shock
absorbers.

devices, such as smartphones, mobile phones,
computer hard disk drives, and digital cameras.

2 Environment

General Industrial Machinery

3 Society

NOK's oil seals, O-rings, gaskets, packings, and belts areused in construction machinery (such as power shovels,
bulldozers and cranes), agricultural machinery (such as
tractors and grain combines) and plant machinery for

Aircraft andRockets

Robots

Our seal products are installed
in engines and turbo pumps foraircraft and rockets.

robots.

Our flexible printed circuits (FPCs)
are used in industrial and consumer

various industries (such as steel, paper and food).

Power Generation Plants
Our oil seals, O-rings and lubricants are built
into equipment and auxiliaries for thermal power
plants and renewable energy power plants (suchas wind, hydroelectric, photovoltaic and solar
thermal plants).

Residential
Equipment
NOK's O-rings are found in watersupply systems, water purifiers andshower toilet seats, while CELLSEAL
and membrane humidifiers are usedin residential fuel cells.

Office Equipment andATMs
The NOK group's products are installed incopiers, printers and other office equipment,
including development rollers, charge rollers,
fixing belts and cleaning blades. Our billbeater rubber is used in ATMs and otherfinancial terminals.

9

NOK Group's Technologies and Products
The NOK Group's operations are grouped under the
categories of the Seal Business, the Electronic Products
Business, the Roll Business and Other Business, and its
technologies and products developed in the respective
business domains are widely used in automotive and otherapplications. The NOK Group builds on its wide-ranging
capabilities to develop new technologies in an effort tocontribute to a sustainable society through its parts usedin customers' products.

Smartphones and digital cameras
Our FPCs, precision rubber and resin
components are used in electronic devices,such as smartphones, personal computersand digital cameras.

3 Society

Automobiles and traffic safety products
NOK's oil seals, O-rings and other seal
products as well as rubber vibration
isolators are used in both automobiles
and motorcycles. We also offer lane
control /guidance products such as
pylons.

Construction and agricultural machinery
Our gaskets, packings and lubricants areused in construction machinery, such as
bulldozers and cranes, and agricultural
machinery, such as tractors.

Nippon Mektron, Ltd.

NOK CORPORATIONSYNZTEC Co., Ltd.

Electronic Products Business

Seal BusinessRoll Business

UNIMATEC Co., Ltd.
Seal BusinessAircraft, marine vessels and rockets

2 Environmentchanges and developments such as electric cars, thehydrogen-powered economy and the super-smart society,
the NOK Group's technologies and products continue tosupport people's lives in ways they may not even be awareof.

The NOK Group offers a diverse lineup of products,
including different types of seal products, flexible printed
circuits (FPCs), resin parts, products for office equipment
and lubricants. Although our products can be foundeverywhere in daily life, they are seldom directly visible toconsumers. Amid a new era that is ushering in dramatic

1 Strategy & Management

Initiatives to Support Everyday Life and Contribute to a Sustainable Society

Household and healthcare products
NOK offers hollow fiber membranes forwater purifiers, rubber electrodes for
power assist applications and cell seals forhousehold fuel cell systems.

NOK Klüber Co., Ltd.
Group companies: 88
Aﬃliates: 23

Other Business

111 companies in total

The NOK Group's seal products are usedin aircraft and rocket engines as well as instern tubes of marine vessels.

Offices and factories
Our various types of roll products
are used in office equipment,such as copiers and printers,
while special polyurethane belts
and mechanical seals are used atfactories.

TSSD products that use recyclable recycled plastic
With auto parts being its mainstay business, NOK contributes to traffic safety and smooth traffic flows through its products.
Our lineup of traffic signs & safety devices (TSSDs) includes lane control/guidance products and impact buffers for smootherroad traffic flows and accident prevention. These have been developed with our rubber synthetic and processing techniquesthat we have accumulated over a long period of time. The material used is NOK's“Iron Rubber”(special polyurethane rubber),having high reliability and a track record of being used as the material for a wide range of mechanical parts. Even under harshoutdoor environments where it is difficult to use conventional rubber and plastic products, Iron Rubber products offer superior
durability such that the high quality and functionality are maintained for an extended period of time. In particular, center
median blocks are made from environment-friendly recycled plastic. They are recyclable and a certified recycled product ofIbaraki Prefecture. These TSSD products made by NOK are demonstrating their benefits and supporting road traffic safety andsmooth vehicle flows on roads across Japan.

10Environmental Management
Basic Policies on Environmental Conservation
1 Strategy & Management

On the basis that the company is a member of the society, we give all our employees full recognition to the fact that ourbusiness activities, products, and services have diverse relations to the environmental impact in the global scale. We set andimplement the Basic Policy on Environmental Conservation from a longitudinal perspective in order to contribute to therealization of sustainable development of a society toward future generations.

1

2 Environment

2
3

3 Society4567Based on our unique technology, we promote the improvement of technology and development of products withenvironmental considerations to reduce the negative environmental impacts.

We promote energy saving to prevent the global warming, and promote reuse and reproduction of resources andreduction of wastes corresponding to the recycling society.
Setting the goals by NOK central environmental protection committee, we will continue environmental improvement
cooperating with business partners including suppliers, strengthen the control of chemical substances, prevent global
environmental pollution and strengthen the effort to initiative of water environmental impact.

We comply with related laws and regulations, local government ordinances, and regional agreement, etc., and promote
activities for environmental conservation.
We comply with self-imposed restrictions by the industry and customers, and positively engage in the requirementsfrom our stakeholders toward environmental issues.

We disclose information on environmental conservation and social contribution activities, and positively communicate
with local and broader society.

As a good corporate citizen, we strive to continually improve the environmental management system, as well as
promoting all employees to recognize the importance of biodiversity and conservation of global environment andcultivate the awareness toward the global environment.

●Third revision on April 1, 2018

President of NOK Corporation
Chairman of Central Environmental Protection Committee

Kiyoshi Doi

Environmental Management System
To promote our environmental management activities smoothly

conservation activities are led by subcommittees, which formulate

and steadily, company-wide efforts are made under the following

and promote group-wide energy conservation initiatives and long-system. The Central Environmental Protection Committee, chaired

term environmental vision.

by the President, sets the overall direction of our environmental
m a n a g e m e n t a n d i m p l e m e n t s i t . A c t u a l e n v i ro n m e n t a l

President

Director of Environmental Management(General Manager of Corporate Quality &Environmental Control Office)Central Environmental
Protection Committee
Subcommittee for Reduction ofEnergy Consumption

Meeting of Environment Office

Subcommittee for Promotion ofEnvironmental Management

Plants (Fukushima, Kitaibaraki, Fujisawa, Tokai,
Shizuoka, Tottori, Kumamoto)● Director of Environmental Management at Plant● Committee for Environmental Protection at Plant● Plant Environment Office11

Nok will promote activities aimed at supporting the next generation by upholding the slogan “laying afoundation for environmental management”

2 Environment

Operating Officer, General Manager of Corporate
Quality & Environmental Control Office(Director of Environmental Management)

Tomio Nakayama

Environmental Management System
NOK has established a mechanism compliant with ISO14001 andF Y2 019 E nv i r o n m e nt a l Po l i c y

is implementing an environmental management system. Having

Laying a Foundation forEnvironmental Managementsites are operating a single unified environmental management

obtained integrated ISO14001 certification, all of NOK’s production
system.

Pheriority Action Items

To ensure compliance with environmental laws and regulations,
as is strictly required by ISO14001, NOK’s divisions and group● Maintain and improve an EMS

companies have identified laws and regulations that they must

・Ensure that compliance with ISO140001:2015 is astandard operation at NOK・Review the method of environmental impact assessment
・Raise awareness of environmental conservationand deepen understanding of the respective roles ofindividuals

observe, along with key control items, and periodically check andevaluate the compliance status. We will continue our effort forearly detection of possible risks related to environmental accidents
and compliance and for prevention of nonconformities.

● Prevention of environmental problems (for BCM)

● Registration Agency: Japan Automobile Research Institute,・Prevent problems through reliable change-point
monitoring and prevent recurrence by investigating root
causes・Implement effective self-inspection on compliance andRegistration Body
● Certificate Number: JAER 0335

environmental quality; correct and improve deficiencies● Reduction of our environmental impact for the
next generation (for the Paris Agreement, etc.)

NOK Environment Mark・Reduce carbon dioxide emissions: achieve a reductionof 1% in emission intensity from FY2018 by promoting
energy conservation activities
・Maintain a recycling rate of waste at 98% or higher

To raise employee awareness of environmental conservation, we
asked them to submit proposals for the company's environment
mark. The mark chosen as the best design has been used as the● Rigorously control environmentally hazardous
substances in compliance with external requirements

symbol of NOK's environmental conservation activities.
The mark combines three letters that・Efforts to discontinue the use of specific phthalates in
products
・Increase the accuracy of investigation forenvironmentally hazardous substances contained in
products, and promptly respond to inquiries

read NOK , where N represents Nature , K

indicates Keep , and the O in the centeris designed in the shape of a globe. This
design effectively conveys the message

Protecting Nature on Earth.

12

3 Societyexternal parties. To achieve these objectives,
NOK Group companies closely cooperated
in implementing various initiatives. However,society’s demands for a prompt responseto challenging environmental issues haveintensified beyond our initial expectations.
At this point, the NOK Group is not fully
prepared to meet such requirements.
In F Y2019, the final year of the threeyear plan, we will redefine our visions forboth society and the Company to clarify
challenges, and strive to achieve the goals.
Furthermore, to take a fresh step toward
the next phase of our efforts in the periodof the next three -year plan starting in
FY2020, we will formulate specific targets
and measures and make untiring efforts tocontribute to building a sustainable society
and enhancing corporate value.

1 Strategy & Management

Since the adoption of the Paris Agreementin 2015, momentum toward the realizationof a d e c a r b o n ize d s o ci et y h a s b e e ngathering around the world . T he N O KGroup has promoted its efforts based on
the Group’s three-year plan from FY2017,
which upholds an environmental policy
titled“Take on Challenges for the NextGeneration Environment.”This is in line withJapan’
s commitment to reduce greenhousegas emissions by 2030, and the Japan
Auto Parts Industries Association (JAPIA)’s
voluntary Action Plan on the Environment.
NOK has defined its priority action items as:(1) Prevention of environmental problems;(2) Reduction of our environmental impact
for future generations; and (3) Enhancementof the environmentally hazardous substancemanagement system to meet requirements ofInput & Output of Our Business Activities
NOK Corporation and Production Subsidiaries in Japan during FY2018
1 Strategy & Management

INPUT
Raw Materials

Total amount used:
95,842t

2 Environment

Rubber… …………………………… 14,137 t
Additives & Adhesives… …… 11,659 t
Plastics… …………………………… 1,220 t
Metals……………………………… 68,826 t

PRTR*1Substances
Volatile Organic Solvents…… 1,242ｔ

OUTPUT

DesignEmission to the Atmosphere● Environmental Assessment of Products● Environmental Impact Assessment

CO₂ (Production)*2……… 189,721 t-CO2
PRTR Substances(Production)… …… 134 t
CO₂ (Raw Materials)*3 …… 178,051 t-CO2

Procurement

Emission to Water

Returned Water……………… 232,038 ㎥
Sewage System… ……………… 9,308 ㎥
PRTR Substances…………………… 25 kg
BOD load*4…………………………… 1.47 t● Environmental Impact Assessment● Green Procurement

3 Societyused:
Energy (Production) Total amount
3,302,739GJElectricity… ……………… 317,699 MWh
Gasoline……………………………… 168 kL
Kerosene…………………………………… 91 kL
Heavy Oil A… …………………… 1,008 kL
Light Oil………………………………… 53 kL
LPG… ……………………… 1,308,040 kg
Utility Gas… ……………… 406,350 N㎥

Water

total water intake:
409,134m3

City Water… ………………… 311,414 ㎥
Industrial Water……………… 31,655 ㎥
Ground Water… …………… 66,065 ㎥● Environmental Audit ofFacilities and Machines

Waste● LCA (Life Cycle Assessment)● Pollution Control● Chemical Substances Control● Energy Saving● Waste Reduction● Environmental Impact Assessment

Units Sold

Logistics

8,471 Million Pieces● Efficient Transportation● Promotion of Modal Shift

The amount of diesel refers to the total amountpumped into trucks exclusively used for bothtransportation between production sites andlogistics centers and between logistics centers andcustomer sites.
tkm (ton-kilometer) = (Number of boxes transported)× (Mass) × (Kilometers driven)

Total emissions:45,209t

Industrial Waste… ……………… 15,125 t
Recycled Waste………………… 13,885 t
Final disposal… …………………… 1,240 t
Valuable waste… ……………… 30,084 t
CO2 … ………………………… 3,703 t-CO2（Outsourced Waste Disposal）*5

Production

Energy (Logistics)
Diesel……………………………… 3,834 kL
Ship… ……………………… 1,270,000 tkm
Truck… …………………… 3,245,000 tkm

Total emissions:
241,346m3

Emission to the Atmosphere (Logistics)

CO2

CO₂ emissions from exclusive trucks are calculatedby the fuel method. CO₂ emissions from cooperativetransport by truck, ship and rail are calculated by
the ton-kilometer method. The amount shown above
is a sum of both results.

Customers★Scope of coverage

10,542 t-CO2*2 CO2

The above input and output refer to the amounts from business activities at
NOK’s seven divisions (Fukushima, Nihonmatsu, Kitaibaraki, Fujisawa, Shizuoka,
Tokai, Tottori and Kumamoto) and 17 production subsidiaries in Japan (Tohoku
Seal Industry, Miyagi NOK, Miharu Industry, NOK Metal, TSK, Nihonmatsu
Seal Industry, Isohara Polyurethane Industry, ISSHIN Industries, MYK, Kikugawa
Seal Industry, TVC, SAGA SEAL Industry, Kumamoto Seal Industry, Kusu NOK,
Nichinan NOK, Kawazu Kogyo, TOSU Seal Industry). Exceptions are PRTR
substances, water used and emission to water, for which the amounts refer only
to NOK’s seven divisions.

CO₂ emissions are calculated in accordance with the greenhouse gas
emissions accounting and reporting manual under the Act on Promotion of
Global Warming Countermeasures.

*3 CO2（Raw Materials）

CO₂ emissions are calculated from the mass data of purchased raw materials
while referring to the JAPIA LCI Guideline.

*4 BOD load

Biochemical oxygen demand (BOD) is one of the indicators of water pollution
and represents the amount of oxygen used by microorganisms to decompose
pollutant organic material in water. The figure for BOD load was obtained bymultiplying the BOD measurement by the amount of effluent to rivers.

*1 PRTR

Pollutant Release and Transfer Register, a publicly accessible database ofhazardous chemicals released to the environment and transferred off-site fortreatment in the form of waste. It brings together information about which
chemicals are being released, how much and from which sources. (Source:
Website of the Ministry of the Environment)*5 CO2（Outsourced Waste Disposal）

CO₂ emissions are calculated based on the emission factor database fororganizations calculating GHG emissions through supply chains.

13

Results and Targets
FY2018 Results and FY2019 Targets for Environmental Protection
FY2018Environmental Policy

FY2019TargetResultTargetPrevent environmental problems

Promotion ofcompliance self-audit
in Japan and abroad

Compliance selfaudits conducted inJapan and abroad

Promotion ofcompliance self-audit inJapan and abroad

Maintain and improve EMS

Eliminate operational problems(Review the environmental aspects of changes andirregular activities)

Sufficient quantity andSufficient quantity andSufficient quantity andquality of human assets
quality of human assets
quality of human assets
securedAbsolute CO₂ emissions (t-CO₂)* from NOK's divisions

47,357

1.630

1.536

1.521

Intensity per square meter (t-CO₂/m²) at development divisions

0.180

0.171

0.169

VOC emissions to the environment (t) from NOK's divisions

805

790

Below 790

CFC facilities (number of machines)

109

87

80

Absolute CO₂ emissions (t-CO₂)* from NOK group companies inJapan and abroad

788,364

821,341

813,128

VOC emissions to the environment (t) from NOK group companies inJapan and abroad

3,266

3,871

Below 3,871

Creation of a databaseto manage products
containing environmental
hazardous substances

Made preparatory work for creationof a database to manage products
containing environmentallyhazardous substances

Creation of a database to
manage products containing
environmental hazardous
substances

Upgrading ofenvironmental quality
voluntary audits

Voluntary audit items
upgraded and audits
conducted

Continuing of voluntary
audits on environmental
quality

Promptly respond to requests for investigation ofenvironmental hazardous substances contained in

Create and expand use of efficient
products
environmental hazardous substancessurvey system

Plan for information sharing systems

Formulation of Long-term Environmental Vision for 2030
NOK Twin Green Plan 2030
As climate change and energy issues have become
increasingly serious problems, the Paris Agreement
entered into force to combat global warming and theSustainable Development Goals (SDGs) were adopted

by the United Nations. In line with such global initiatives,
NOK has formulated the NOK Twin Green Plan 2030 topromote our environmental conservation activities for asustainable society.

Green Factory

Green Product

NOK will reduce CO2 emissions from factories by
20% from FY2007 through environment-friendly
manufacturing initiatives.

NOK promotes the development of productsthat contribute to next-generation environmentfriendly technologies.
Initiatives

Initiatives

・ Develop products that contribute topopularization of next-generation energy-saving
technologies, such as fuel cells

・ Develop production equipment that consumes
20% less energy than conventional equipment
・ Actively promote the use of renewable energy

・ Contribute to reducing environmental impact throughthe development of low-friction technologies
that help achieve greater fuel efficiency

・ Reduce waste and aim to achieve a recycling rate of 100%・ Reduce water consumption and ensure cleaner
wastewater・ Develop functional membranes that help recycle
water (supply of clean water and water circulation)

・ Control and reduce hazardous chemical substances
throughout processes

・ Rigorously manage chemical substances containedin products to improve their environmental quality●Relevant SDGs

●Relevant SDGs

14

3 Society50,243

2 Environment

Reduce environmental
hazardous substances

52,986

Intensity (t-CO₂/million yen) at production divisions

1 Strategy & Management

Action Item
Comply with environment-related laws and regulations(Monitor and eradicate environmental problems bythorough compliance)Global Warming Countermeasures

Activities of Subcommittee for Reduction of Energy Consumption
1 Strategy & Management
2 Environment

Based on the NOK Twin Green Plan 2030, NOK
engages in continuous and strategic energy
conservation activities with the goal of reducing
CO2 emissions from plants by 20% from FY2007
through environment-friendly manufacturinginitiatives.
In FY2018, NOK actively implemented various
measures for plant buildings, including replacing
conventional lights with LED lights, adopting the
Top Runner Program for motors and introducing
solar energy. We also promoted the establishmentof a system for more robust energy conservation
management by adopting IoT technology tovisualize power consumption.
In terms of facility development initiatives, we
examined ways to simultaneously achieve energy

conservation and comfort at plants. We pursued
a comfortable work environment while reducing
air-conditioning and heat loads through curbing
heat release from production facilities, controllingexhaust air and reusing exhaust heat. We also
developed a tool for constantly monitoring energy
consumption and started proposing items for
improvement of an energy management systemthrough visualization.
We will continue activities to improve our energy
efficiency through expanding energy conservation
measures and developing energy-efficient facilities
and tools.
Chair of the Subcommittee for Reduction ofEnergy Consumption.

Manager of Production Engineering Dept.,
Production Engineering Technology Office
Chair of the Sub Committee for Reduction of Energy Consumption

Yushi Nakahata

3 SocietyWe then went on to verify the finding we obtained on thesmall-size model on the actual model. The vulcanizer wasplaced in a booth and an adequate exhaust airflow passage
secured to confirm changes in work environment loads andfacility energy loads.
This experiment provided
a good prospect for heatradiation control measuresand optimization of exhaust
heat, which are likely toh el p achieve re du c tio ns
o f a i r- c o n d i t i o n i n g a n dmachine heat loads
w it h o u t co m p ro misin g
the comfortable working
enviro nment. We will
apply these measures toa c t u a l p ro d u c t i o n s i te s
and continue development
activities to reduce energy
consumption.

CO2 emissions and emission intensity in FY2018
In addition to energy conservation measures in production,
N O K u n d e r to o k i n i t i a t i v e s a i m e d a t re d u c i n g f u e lconsumption in the distribution process. However, in
FY2018, CO2 emissions and emission intensity remained
unchanged from the previous year.
The Subcommittee for Reduction of Energy Consumption,
through proposing challenges to be tackled and expanding
the scope of activities as well as developing energy efficientfacilities, will promote more rigorous continuous activities
for improvements, with a view to contributing to energy
conserving corporate activities.

Development of Energy-Saving Equipment
NOK's energy conservation efforts are mainly designed to
improve conventional methods through optimizing processparameters and improving productivity and to develop new
methods and new production facilities.
Introduced here is a case focused on a vulcanizer, one of
NOK's key production facilities. We studied ways to reduce
the load of air conditioners on factory floors and the heatload from equipment while maintaining a comfortable work
environment. We examined measures for improvement,
including optimally installing heat insulators and securing anadequate exhaust airflow passage to address heat released
from the machine and exhaust heat, which degraded theworking environment. Firstly, we measured heat discharge
fro m a small -size m o d el to w hich th e im p rovem ent
measures were applied, and confirmed a 64% reduction inheat discharged to the work area, as compared with themachine without the improvement.

【Verification using a real vulcanizer】【Measurement of heat released from the small-size model.
Achieved a 64% reduction of heat discharge】

15

Visualization of Power Consumption

Plant building 1

By equipment
Molding
machine

H: Air-conditioning system 33,480

L: Bonderizing
machine, mixer
K: Extruder
J: Kneader
I: Lighting system

Light【Capturing and analyzing energy data for each hierarchy】

Daily Trend of Power Consumption
29 Jun 18h Unit 2 Cub Motive 2-6-2-149, Power consumption: 2,218kWh

Electricity used [kWh]N: Vulcanizing
molding
machine

B: Boiler
C: Air compressor
F: Cooling water system
G: Pump

Compressor

Air
conditioner

3 Society

O: Secondary
vulcanization
furnaceBy distribution
panelboard

Distribution panelboard

H: Air-conditioning
systemDay [day]【Analysis of uses of electricity and daily fluctuation】

Location

Use of Renewable Energy
NOK proactively introduces renewable energy sources aspart of BCM measures to prepare for electricity failure andother emergency situations, in addition to using renewableenergy in normal times. In FY2018, approximately 84 MWhof renewable energy was used at NOK divisions for theyear. We will encourage the group companies to proactively
introduce renewable sources.

Type

Electricity reduced

Fukushima Plant(Exterior light)

Solar panel

12.2 MWh/year

Kitaibaraki Plant (Isohara
Polyurethane Industry)(Rooftop)

Solar panel

61MWh/year

Shizuoka Plant(Guard gate)

Solar panel

5MWh/year

Tottori Plant(Guard gate)

Solar panel

5.6MWh/year

Solar panel andwind power generator

0.6MWh/year

Kumamoto Plant(Exterior light)【Use of Renewable Energy】

16

2 Environment

A: Power receiving,transforming anddistributing facility

P: Metal processing
machineBy power
receiving andtransforming facility

Power receiving andtransforming facilities

Facilities

Electricity by time unit: Proportion of facilities registered
Z: OthersPowerconsumption DB

Power company

1 Strategy & Management

The Subcommittee for Reduction of Energy Consumption
promoted the development and provision of energ ymonitoring tools in order to enhance energy management
activities. Based on the concept of “visualization,” thetool enables power consumption data collected to be
displayed on a terminal on a real-time basis to analyze
what the energy is used for, trends and changes in energy
consumption.
Energy management requires monitoring and analysis ofconsumption trends by use at each site. This tool meets therequirements while data is stored in the power consumption
database for sharing. By sharing data before and after
the improvement and the analysis findings, further energy
conservation effects can be expected at the NOK Group asa whole.

Toward the Realization of a Sustainable Society

1 Strategy & Management
2 Environment

Activities to Reduce VOC Emissions

Activities to Reduce Waste■ Long-term target■ Long-term target■ Background and activities■ Background and activities

B a s e d o n b e n c h m a r k s s e t i n t h e JA P I A v o l u n t a r yenvironmental action plan, NOK aims to reduce VOC
emissions by 30% in FY2030 from FY2000 (the base year
for NOK divisions) as its long-term target. As to hazardous
air pollutants (dichloromethane, trichloromethane andtetrachloroethylene), we have set a long-term target of
reducing the emissions by 95% from FY2000.

B a s e d o n b e n c h m a r k s s e t i n t h e JA P I A v o l u n t a r yenvironmental action plan, NOK has promoted activities
to reduce waste emissions and set its long-term reduction
target of maintaining a recycling rate of 85% or higher. In
particular, the NOK Group aims to achieve the goal of anindustrial waste recycling rate of 99% or higher at the grouplevel.

3 SocietyAs a result of activities to reduce VOC emissions, weachieved in 2010 a net reduction of 50% from emissionsof 2,503 tons in FY2000, which substantially exceeded
the long-term target of 30%. From FY2011, we made it aminimum target to keep the VOC emissions at the current
level and strived to achieve a further reduction.
I n F Y 2 017, w e c o m p l e t e l y e l i m i n a t e d t h e u s e o fdichloromethane at the last overseas site. With this, thethree air toxics were totally eliminated at 11 sites in Japan(including production subsidiaries) and six sites outside
Japan as of the end of FY2017.

In FY2014, the committee in charge of zero emissions
activities at the NOK Group was renamed the Subcommittee
for Waste Management, which has since led the Group's
efforts to control the generation of waste. As a result, therecycling rate for industrial waste approached its ceiling,sitting at 99.8% or higher at NOK's divisions and production
subsidiaries in Japan from FY2013.

■ Results for FY2018

Although we did at one point achieve the recycling rate of
99.8% or higher for industrial waste, the rate dropped to94.8% due to the start of operation during the second halfof FY2017 of a foundry (a production subsidiary in Japan),whose waste was disposed of in landfills. However, as aresult of technical investigations that started October 2018,
we managed to recycle 44.8% of the emissions from theentire foundry and to improve the recycling rate at the endof FY2018. Previously, cast products were manufactured byoutsourcing and substantial costs and CO2 emissions wereassociated with their management and transport, whichwere regarded as problems. The integrated production
within the Group helped reduce the cost and the CO2
emissions.

■ Results for FY2018

In FY2018, NOK strived to reduce emissions of toluene,
which had been our long-standing concern, to zero, and
did in fact achieve net zero emissions by installing exhaust
treatment equipment. In addition, we continued to seek out
the next reduction target of VOCs, an initiative we started
in FY2017. We also explored how to improve the yield oforganic solvents in adhesives and paints used in certain
processes and found a technique that seemed likely toachieve a roughly 25% reduction. This technique has alreadybeen employed at some sites. These efforts resulted in a
year-on-year reduction of 23% at NOK's production sites.
Meanwhile, VOC emissions from production subsidiaries inJapan have remained almost unchanged, with an increase of
2.6% in FY2017 and a decrease of 2.9% in FY2018. Although
we have achieved a long-term reduction on the group level,
we have failed to reduce the emissions substantially in thepast three years, achieving only a slight reduction from
FY2016.

■ Future plans

To regain the high recycling rates we at one time achievedprior to FY2016, NOK is working to reduce waste emissions
through efforts to find new recycling methods.

Compliance with PRTR Law

In FY2018, we reported six regulated substances under
the PRTR law, which mandates that companies submit
information on environmental release and transfer of
specified toxic chemicals.

■ Future plans

Having eliminated the emissions of dichloromethaneand toluene, which were our outstanding concern, we
completed “radical” VOC reduction activities. Goingforward, our focus will be on studying ways to curb VOC
emissions from adhesives and paints in each process. If
the use of organic solvents increases due to a production
increase, we will begin a technical study and technology
development to prevent the increase of VOC emissions.

●Results for FY2018
Substance Name

Zinc Compounds(Water-Soluble)
XyleneEmissions（kg）
CabinetOrder
PublicAtmosphere
Landfill
No.
Water

Transfer（kg）
Soil

Drainage

Off-site

1

0

25

0

0

0

0

80

87

0

0

0

0

12

N,N-Dimethylformamide

232

98

0

0

0

0

15,448

Toluene300

133,470

0

0

0

0

33,295

Methylnaphthalene

438

85,239

0

0

0

0

0

Methylenebis(4,1-Phenylene)
Diisocyanate

448

1

0

0

0

0

700

218,895

25

0

0

0

49,455

Total

Scope of coverage: NOK's seven divisions
See ★ on page 13 for the details of NOK's seven divisions.

17Environmental Performance Data
INPUT
Item

Unit

FY2016FY2017FY20182,917,984

3,302,739

Electricity

GJ

2,614,662

2,814,003

3,167,459

Fuels

GJ

103,742

103,981

135,280

Total water intake

m3

835,100

369,906

409,134

City waterm3

268,719

280,634

311,414

Industrial waterm

3

454,156

29,22431,655Groundwaterm3

112,224

60,04866,065Volatile organic solvent used

t

1,360

1,479

1,242

Raw materials usedt

73,50859,56095,842

Rubbert

12,098

10,46814,137

Additives & adhesivest10,3308,360

11,659

Plastics

t

895

717

1,220

Metalst50,18540,01568,826

Million yen

709

847

1,194

Investment

Million yen

73

149

451

ExpensesMillion yen

636

698

743

Environmental conservation cost

OUTPUT
Item

Unit

Total CO 2 emissions

t-CO2

282,319

353,371

371,475

Scope 1

t-CO2

6,400

6,384

8,315

Scope 2t-CO2

149,746

161,163

181,406

Scope 3*1

t-CO2

126,173

185,823

192,2963

261,328

277,378

241,346m3

252,962

269,208

232,038

3

8,366

8,170

9,308

Total wastewater discharge
Public watersm

FY2016FY2017FY2018Sewage systemm

BOD load

t

1.33

1.42

1.47

VOC emissions

t

1,266

1,334

1,088

Industrial waste emissionst

11,333

12,733

15,125

Amount of waste recycledt11,317

12,27813,885

Amount of waste in landfills

t

16

455

1,240

Valuable materialst

10,608

11,22430,084

Recycling rate*2

%

99.9

98.1

97.3

*1

1 Covers Categories 1, 5 and 9 of the GHG Protocol's 15 categories of Scope 3.

*2

A certain amount of valuable materials in waste is factored into the calculation of the rate, according to internal standards.

18

3 Society

2,718,404

2 Environment

GJ

1 Strategy & Management

Total energy

Environmentally Conscious in All Business Activities
Environmental Impact Assessment for Design

Application of the Standard of Environmental Impact Assessment for Design in FY2018

We assess the environmental impact of designs of new products,

1 Strategy & Management

Division

new materials and new production machines in accordance with

Applicable Cases

Fukushima & Nihonmatsu

NOK's Standard of Environmental Impact Assessment for Design.

Kitaibaraki

During the design phase, we plan for the disuse of environmental

Performance Improved

827

107

1,097

26

hazardous substances, low energy consumption, high productFujisawa

149

77

yields, downsizing, long service life, low friction and low wear

Shizuoka

684

15

performance, as well as reuse, low waste and recycling of end-of-

Tokai

10

2

Tottori

235

53

Kumamoto

122

95

3,124

375

life products.

2 Environment

Total

Standard of Environmental Impact Assessment for Design

3 Society

Production

Spread ofEnvironmental
Hazardous Substances●Avoid use of environmental

hazardous substances●Design production processes
with low environmental
impactDisposal

Use

Material Consumption

Disposal of Waste● Improve the yield rate of products●Make products reusable● Save materials by downsizing●Adopt low emission or● Improve service life of products

recyclable designs thatare easy to disassemble

Energy Consumption● Minimize exhaust heat from molding

machines●Adopt machine designs that use energy

efficient components●Adopt low friction design to save energy

during use

Environmental Protection Cost

Trend of Environmental Investments and Costs●NOK's seven divisions

NOK calculates its environmental investments and expenses in

Item2014 2015
Environmental investments (million yen) 133
788
Environmental costs (million yen) 792
700(million yen) 925 1,488
Total

its business activities annually to fulfill its environmental social
responsibility and promote environment conservation activities
efficiently and effectively.
O u r e n v i ro n m e n t a l i n v e s t m e n t s i n F Y2018 i n c l u d e t h e

2016
73
636
709

2017 2018 （FY）
149
451
698
743
847 1,194（Millions of yen）

introduction of high-efficiency air-conditioning systems and the

2,000

replacement of conventional lighting with LEDs as energy-saving
measures, along with the improvement of wastewater treatment

1,500

facilities.
We are introducing solar panels, which also serve a function

700

1,000

under BCM.

743
500
0

792
133
2014

788
2015

■ Environmental investments

636
73
2016

698
149
2017

451
2018 （FY）■ Environmental costs

Note: See ★ on page 13 for the details of NOK's seven divisions.

19Biodiversity
for NOK Biodiversity Conservation.

ecosystem services. Based on the results, we have confirmed

This standard defines the biodiversity-related actions wethe direction that NOK should take to conserve biodiversity andshould take in our business activities and promotes biodiversity

established a common internal regulation in FY2011, the Standard

conservation.

Head View of Relationship between NOK Business Activities and Biodiversity

Store

Protect
speciesProtect
biosystem

Rubber

Leather product

Metal

Detergent/degrease

Resin

GreaseChemicalTextileTransport

Customer
Product

Store

Protect
biosystem

Transport

Waste

Waste
disposal

Reuse

Protect
biosystem

RecycleLandfill

Business
Activities

Carrier

Manufacturer

Product/service
Discharge

Effluent treatment

Pipeline
Tanker

ＧＨＧ /ＣＯ２

Deodorize/dust removal

ChemicalTransport

Water

Transport
Mining

Bio Resource

Oil & Gas

Agriculture
Prevent fromdepletion

Sustainable useof bio resource

Transmission

Fuel

SupplyPump upgroundwater

Supplier

Use ofgroundwater

Coal

Forestry

Uranium

Oil

Fishery

Electricity

Gas

LivestockPrimary Energy

Electricity

Water

Air/water/soil
SOC
GHG emission

Protect
biosystem

Protect
biosystemNOK Business and Biodiversity
Activities

Related Ecosystem Services and Impact

1 Efforts to reduce CO₂ emissions and emission intensity

Impact on climate change

2 Promotion of water use reduction and water reuse

Impact on fresh water use and water purification ability

3 Reduction of nonconforming products, improvement of yields, reduction ofindustrial waste and improvement of the recycling rate

Use of wood, paper, textile, fuel, oils and fats, raw materials, genetic
resources, biochemical substances, natural medicines, etc., and collectionof biological resources

4 Prevention of entry of specified chemical substances into exhaust, andrestriction of volatile chemical substances, dust, etc.

Atmospheric quality and climate

5 Prevention of entry of hazardous substances, oil, etc., into drainage

Impact due to discharge of contaminants into waters

6 Management of nighttime outdoor lighting to limit leaked light and lighting hours Impact of nighttime lighting and noise
7 Compliance with applicable laws and regulations, including the Noise
Protection from natural disasters associated with water retention and soil
Regulation Act, Vibration Regulation Act, Soil Contamination Countermeasures erosion, recreation and spiritual wellness, and changes in habitats due toAct, Air Pollution Control Act, and Water Pollution Control Act
land use
8 Proper disposal of industrial waste

Protection from natural disasters associated with water retention and soil erosion,
recreation and spiritual wellness, and changes in habitats due to land use

9 Implementation of internal environmental education, participation in social
environmental activities, etc.

General20

3 Society

Wooden/paper productLand
providerLand use/
Construction

Protect
biosystem
Raw material

Carrier

Controlstorage

Carrier

Sub material

Constructor

2 Environment

Transfer ofnonnative
species

Air/water/soil
SOC
GHG emission

1 Strategy & Management

We assessed our impact and dependence on biodiversity andReports from NOK Group Sites
NOK Divisions

Group Companies

Fukushima and Nihonmatsu Plants

NIPPON MEKTRON, LTD. (MEK)

1 Strategy & Management

The Fukushima Plant introduced a green parking area when the factorybuilding was expanded in order to secure green space.
Tw o n ew b u i l d i n g s w e re co n s t r u c te d a t t h e N i h o n m a t s u Pl a n t .
Each building is furnished with energy-efficient ancillary facilities (airconditioners) to minimize CO2 emissions. To meet various regulatory
requirements incidental to the construction of the buildings, the plant files
notifications in a timely manner.

The MEKTEC Group has promoted the reduction of CO2 emissions throughenergy conservation activities and achieved a year-on-year reductionof approximately 2% in FY2018. As to the use of renewable energy, theGroup successively introduces solar power generation facilities, mainly atsites outside Japan. Following the existing facilities at MMCS (China), a
photovoltaic facility started operation at MMCT (Thailand) in May 2018
(total output of 1.4 MWh/year). MEKTEC Taiwan also started operation ofa system in November 2018 (1.0 MWh/year), thereby contributing to the
reduction of CO2 emissions.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ
Kitaibaraki Plant

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

2 Environment

The Kitaibaraki Plant is engaged in EQT* activities that integrate efforts for
quality and cost reduction.
In FY2018, the plant was commended for its energy conservation activities
and awarded the prize of excellence by the Kanto Region Electricity Usage
Rationalization Committee. Moreover, resin blocks (center median blocks)
made from recycled plastic were awarded a recycled product certification
by Ibaraki Prefecture.
In FY2019, the plant will ensure that management of change-points,
including the start of operation at a new material and adhesive building,are conducted in order to preserve the environment.
* Environment, Quality and Total cost reduction

SYNZTEC CO., LTD.（SZT）

The SZT group engages in production at its group companies in Japanand abroad. Independent efforts by SZT are focused mainly on support forinternal sections in technology and quality control by initiating activities toreduce nonconforming products and save more energy.
In FY2018, a production function was transferred from another plant
to the Yokosuka Plant, and various concerns associated with thetransfer emerged. To begin with, the Plant set a target to reduce waste
emissions. The SZT Group will make concerted efforts to further promote
environmental conservation activities.

3 Societyｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ■ Fujisawa Plant/Shonan R&D Centerｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ
UNIMATEC CO., LTD. (UMT)The Shonan R&D Center pursues environment-friendly development
p rac tice in basic te chn olo g y research an d p ro du c t an d material
development. We are also developing production technologies to achieve
further energy and resource conservation, in addition to improving theefficiency of production equipment. Moreover, the Center also focuseson technical suppor t for NOK plant s to help them promote theirenvironment-friendly manufacturing. Our support contributes to extending
product lifetimes, reducing torque and improving yield. The Fujisawa Plant
and Shonan R&D Center actively take part in environmental activities inlocal communities, including cleanup activities in Fujisawa City as well as
sponsoring Enoshima Aquarium as an“Enosui eco Supporter.”

As a chemical factory striving to establish a failsafe system for theabsolute prevention of accidents, UMT has been engaged in the risk
assessment and management of pipelines on the premises of the plantsince FY2018, with the goal of preventing the leakage of environmental
pollutants. Having completed the transition to a management systemcompliant with ISO14001:2015, the management system is integrated with
operational processes and has incorporated the abovementioned riskbased concept. Efforts for wastewater treatment facilities at UMT include
reducing the amount of effluent and the volume of sludge. These measures
are intended to simultaneously reduce the environmental impact ofeffluent/emissions and effluent-related costs. UMT has thus established asystem that contributes not only to the environment but also to society.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

Shizuoka Plant

Wuxi NOK-Freudenberg Oil Seal Co., Ltd. (WNF)

With the completion of the transfer of the Honjo Factory of Kikugawa
Seal Industry Co., Ltd. in May 2018, Shizuoka Plant resumed full-fledged
operation. The Plant will continue to maintain a high level of awarenessregarding compliance also this year.
Recently, we have focused on energy conservation activities and are
conducting concrete and effective measures, including holding seminars
taught by representatives of external organizations, introducing energysaving equipment and taking countermeasures against atmosphericleakages from production facilities.

WNF continues its environmental activities in accordance with ISO14001.
To reduce power consumption, we have introduced an automatic
switching function that turns cooling tower air blowers on and off andadopted a narrower size of compressed air pipelines for facilities forthe efficient use of electricity. To raise environmental awareness among
employees, WNF provides new employees with basic environmental
training every year. Persons in charge of environmental management gather
from all departments every month for mutual exchange and environmental
meetings, thereby developing their interest in environmental conservation.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

Tokai Plant

NOK Vibration Control China Co., Ltd. (NVCC)

As the leader of NOK's long-standing contribution to environmental
conservation through seal technology, the Tokai Plant has engaged in thedevelopment and production of innovative products that have facilitatedthe popularization of fuel cell vehicles and the effective use of water
resources. With a high level of environmental awareness and motivation
for new products to be launched in the market, we have consolidated thesystem to fulfill our corporate social responsibilities.

NVCC is promoting company-wide energy saving activities. In FY2018
it substantially reduced power consumption through cutting down theamount of electricity used in the power-intensive melting process ofcasting, and through efficiently using compressors. Also in FY2018, selfaudits and independent audits were conducted in compliance withenvironmental laws and regulations, with a view to reinforcing theenvironmental conservation system.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ

Tottori Plant

Thai NOK Co., Ltd. (TNC)

The Tottori Plant launched the full-fledged operation of a foundry tointernally produce cast parts from this year. To reduce waste (slag)
generated at the foundry, we were engaged in activities to improve therecycling rate.
Moreover, we reviewed the energy intensity of the foundry and conductedfine-tuned energy management. The Tottori Plant will continue these
efforts to reduce waste emissions and energy consumption.

TNC has been implementing various initiatives for environmental
co ns e r vati o n . In FY2018 , it s p l a nt i n Pha nt h o n g cu t a n n u al CO 2
emissions by 3,297 tons through its energy-saving activities, including
the replacement of chillers with a more efficient, energy-saving modeland a reduction in the use of compressed air. Moreover, TNC actively
participates in recycling and tree-planting activities in the local community
to help employees develop a high level of awareness of environmental
conservation. We will continue improving our environmental management
system to enhance our environmental performance.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ
Kumamoto Plant

The Kumamoto Plant periodically performs environmental measurementsof drainage from the plant and groundwater on the premises to protect
the Aso region's water resources, which have been conserved by local
residents. Such activities to contribute to local environmental protection
are conducted continuously.
In FY2018, the Plant 's energ y conservation ef fort for reducing theheat load of outdoor units of air conditioners was recognized by
Kumamoto Prefecture and won the Kuma Eco Prize for Global WarmingCountermeasures by Business.

ｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰｰ
P.T. NOK Indonesia (NIN)In FY2018, NIN promoted the replacement of decrepit hydraulic units
for vulcanizing presses with an energy-efficient model (reducing power
consumption by 50%) as a measure to save energy. We also installed
additional wastewater treatment facilities and boosted treatment capacity
in an effort to cope with our production expansion plan.
In FY2019, NIN plans to change the layout of equipment that generates
dust and wastewater as part of ef forts to improve the workplaceenvironment. We will also automate the monitoring of wastewater
treatment facilities, establish a special team tasked solely with operationand maintenance of the wastewater treatment facilities, and strive
to ensure compliance with environmental laws and regulations on acontinuous basis.

21

Procurement Policy
The NOK group's procurement from suppliers complies with its Procurement Policy
The NOK Group believes that if we are to fulfill our
corporate social responsibility, it is essential that ourawareness is shared across the procurement supply

1 We comply with laws, regulations and social norms.
2 Based on the idea of free competition, we select suppliers ina stringent manner by providing fair and equal opportunities.
3 We share mutual interests and benefits with suppliers basedon the idea of mutual prosperity.

We are asking our suppliers to understand theProcurement Policy shown on the left and respect the
NOK Charter of Corporate Behavior and CSR Procurement
Guidelines in business transactions with us.

2 Environment

4 We engage in open communication and build a relationship oftrust with suppliers.

chain.

5 We conduct improvement activities proactively in collaboration
with suppliers.

To fulfill our corporate social responsibility, we carry out procurement activities in accordance with the following policies:

2. Respect for human rights

3. Safety
4. Green procurement

5. Confidentiality

6. Elimination of anti-social
forces
7. Activities regarding
conflict minerals
8. Contribution to local
communities
9. Sharing awareness with
suppliers

We comply with laws and regulations, including the competition laws, trade laws,
environmental laws and social norms of relevant countries.

We do not deal with business entities that would use forced or child labor, that would
engage in unlawful employment of foreign nationals or any other illegal employment andthat would not satisfy industrial safety and health requirements.

We prioritize the safety of customers and consumers and purchase products that satisfy
safety requirements.

We carry out procurement activities based on the NOK Group Green Procurement
Guideline with consideration for preserving the global environment .
We deal with suppliers that can appropriately manage and control the confidentiality of
information on customers, individuals and technologies, etc. obtained through business
transactions.
We do not deal with any organized crime groups, any of their members and related
individuals nor any other antisocial forces as well as any business entities associated withthem.

We strive to avoid purchasing minerals and products that use minerals from countries
where inhumane armed forces are active and mining minerals for their financial
resources.
We contribute to the development of local communities by promoting business
transactions with local suppliers.
We strive to ensure that the NOK Charter of Corporate Behavior and the CSR Procurement
Guidelines are respected throughout the supply chain.

N O K's p ro d u c t i o n a c t i v i t i e s a re ce n te re d o n i n d u s t r i a lcontrols beyond production processes to procurement activities,

components made from polymeric materials, such as synthetic

we have established the N O K G roup G reen Procurementr u b b e r a n d re s i n . We a re c o m m i t te d to e n v i ro n m e n t a l

Guideline. Controlling environmental hazardous substances

co ns e r vati o n a c tiv iti es su ch a s m a na gi n g e nv i ro n m e nt al

and building a system to guarantee the non-inclusion of thesehazardous substances used in production processes, saving

substances throughout the supply chain are our priorities.

energy and resources, and reducing waste. To extend these22

3 Society

CSR Procurement Guidelines

1. Compliance with laws andregulations

1 Strategy & Management

Procurement Policy

Customer FirstThe NOK Group continues its efforts to provide customers withhigh-quality products and services.

1 Strategy & Management

Quality Management System

2 Environment

To continuously supply products that meet customer
re q u i re m e n t s , we h ave s te a d ily wo rke d o n q u a l i t y
improvement by implementing our quality managements y s t e m , w h i c h c o m p l i e s w i t h I S O 9 0 01 a n d o t h e rinternational standards.

President
Corporate Quality & Environmental Control Office

Quality officers conduct on-site diagnoses for quality
assurance. Group companies in and outside Japan closely
exchange information on the quality management system inan effort to ensure that NOK's products have a uniform levelof quality on a global basis. In this way we strive to enhancecustomer satisfaction.

Quality & Environmental Control Officer
Divisions
Quality Control Manager

Group Companies in Japan
Group Companies Abroad

3 Society

Quality Education and Continuous Quality
Improvement Activities through Actual Practice
NOK Group QC Circle Meeting

NOK's educational programs are common throughout thecompany, with key programs being the Quality Dojo and
SuT Seminar.

The NOK Group encourages employees to form quality
control (QC) circles: autonomous small groups that engage
in quality improvement activities.

Firstly, the Quality Dojo started in 2009 with an aim todevelop employees capable of communicating, practicing
and promoting the culture of“Quality First”in their day-today work. Each division has quality trainers (Quality Dojo
Masters) who run the Quality Dojo training center andprovide disciples with training and education. Disciples who
graduate from the Dojo are certified as Quality Leaders*1
and they are responsible for providing guidance and training
to their subordinates while engaging in their own quality
improvement activities as part of their duties. Thus far, theprogram has produced over 800 Quality Leaders in andoutside Japan.

Upholding the mot to of “pursuing down - to - ear th
improvements by going back to the starting point of QC
circles,”presentation meetings are held at NOK divisions
in Japan and group companies in and outside Japan every
year. In FY2018, 1,093 QC circles participated in suchmeetings globally. Eight circles, each selected at a regionalpresentation meeting, gathered and reported their activities
at the NOK Group QC Circle Meeting, where the best QC
circle in the NOK Group was decided.
At the NOK Group, QC circle activities are widely conducted
at many of our sites, group companies and affiliates both inand outside Japan.

The second key program is the SuT Seminar. SuT,*2 which
is pronounced“satto ”in Japanese, is a series of seminarcourses aimed at encouraging the use of tools to speedily
solve problems. Many employees have taken the courses
and applied the methods they learned to QC circle activities
and process improvement efforts.
M o re over, we hold a meeting calle d N -Ac t * 3 where
achievements of the two initiatives are presented. Resultsof activities by Quality Leaders who completed the Quality
Dojo program are reported for the Act-Q category, while
those by SuT course participants are presented for the Act-S
category. The N-Act has been a great opportunity to sharemodel activities across the Group, further expanding ourquality improvement activities.
*1 Quality Leader is a title given to an employee who has completed the Quality
Dojo program.
*2 SuT is an acronym for Speed-up Tools of problem solution, and means a toolthat expedites the solution of problems.
*3 N-Act is an acronym for NOK Action Changes Tomorrow.

23

Promotion of Products at Exhibitions

NOK strives to reduce nonconforming products to improve
qualit y and cut back on waste. We have al so b een
committed to developing human resources through these
activities.

NOK exhibits at many trade shows in Japan and elsewhere
every year. Through exhibitions, we seek to make ourtechnologies and products known to a broader range ofprospective and existing customers, and to improve ourunderstanding of market needs.
We also organize in-office exhibitions in which our products
are displayed in a spare space at customers' sites. This
provides us an opportunit y to better understand thecustomer needs and encourage communication with them.

Exhibition at Automotive Engineering
Exposition 2018 Yokohama
The NOK group joined many exhibitions in FY2017 as inprevious years.

* Fault Tree Analysis, a method of failure and accident analysis.

In-house Quality Award System
Our quality award system was introduced in FY2008 toboost quality improvement activities. All employees of the
NOK group in Japan are eligible. Following a nominationand selection process that takes place every six months,
organizations that have accomplished excellent results
through ef fec tive qualit y improvement ac tivities arehonored. Articles on the outstanding improvements they
have achieved appear in company newsletters.
Nomination guidelines were revised in FY2012 so that theaward system can promote quality improvement activities
more effectively. The revised system encourages nominationsof projects that are feasible and implementation by teams
to increase quality awareness among employees.
The top prize for the first half of FY2018 was awarded
to T VC Co rp o ra t i o n fo r i t s a ch i eve m e n t o f q u a l i t y
improvement through rigorous worker education and byboosting communication. For the second half, the top
prize was presented to the NOK Tohoku Logistics Centerin recognition of the Center's brilliant quality improvement
activities in its warehouse and shipping operations, which
led to the Center receiving no customer complaints fora period of 10 years. The quality award system helps us
to create a workplace culture that encourages quality
enhancements and improvement.

Establishment of Customer Support Center
The Customer Support Center responds to various inquiries
concerning the contents of catalogs and assists customers
to select the right products for their needs. Questions andrequests received by the Customer Support Center andvia the website are reported to relevant departments asfeedback. This input provides information used in resolving
challenges that customer face and in proposing new
projects.

24

3 Society

At t h e Au to m o t i v e E n g i n e e ri n g E x p o si t i o n 2018
Yokohama held in May 2018, NOK exhibited products andtechnologies that contributed to quietness, anti-corrosion
measures and low-electricity consumption as required
for electric vehicles. NOK displayed technologies related
to three themes of vibration and noise isolation, PCU &secondary battery, and motors, highlighting the fact thata wide range of NOK's products can also be applied toEVs.

2 Environment

In FY2011, the Zero Nonconformity Project was launched. In
Japan, the project was extended to production subsidiaries
in FY2013 in an effort to make project activities “selfpropelling,”or freestanding. Basically, this project requires
the repeated observation of gemba (actual place) and
gembutsu (actual thing) and verification based on a certain
mechanism. It has helped employees to develop theirabilities to solve problems on-site. Results of the verification
based on mechanisms are represented in an FTA* to be
managed as a proprietary technique for use in the future.
Activities under this project, which work on many technicalthemes, are being implemented every year at sites in andoutside Japan. The nonconformity reduction activities are
now conducted at group companies in and outside Japanon a routine basis and at the initiative of each company.
We will further expand this project and make it a standard
activity across the Group.

1 Strategy & Management

Nonconformity Reduction Activities

Social / Local Area Activities
Support for“AICHI: No Longer the
Worst”Road Safety Project1 Strategy & Management
2 Environment

With the highest rate of car ownership in Japan, Aichi
Prefecture has also had the highest rate of traffic fatalities
in the country for 15 consecutive years*. To reduce traffic
fatalities by raising road safet y awareness, Chunichi
Shimbun Co., Ltd. launched the “AICHI: No Longer the
Worst”Road Safety Project in 2016 in collaboration withradio and television stations based in Nagoya City, and withthe cooperation of the Aichi prefectural police department.
As a manufacturer of auto parts, NOK has joined the
project since FY2017 in support of the project's objective toeliminate traffic accidents from this world.

3 SocietyNow that people aged 65 years or older account forthe majority of traffic fatalities in Aichi Prefecture, thechallenge is to reduce accidents involving the elderly. In
FY2018, measures to support road safety for the elderly
and activities focused on pedestrian protection were
undertaken.
* As of 2018

Sponsorship for NHK Gakusei Robocon 2018
NHK Gakusei Robocon (Student Robot Contest) 2018,
Japan's preliminary for the ABU Asia-Pacific Robot Contest
2018, took place on June 10, 2018 at Ota City General
Gymnasium in Tokyo. NOK has been sponsoring NHK
Robocon since 2015 as a way of supporting the next
generation of engineers. The theme for the 2018 contest
was“Nem Con”(shuttlecock throwing), inspired by the
traditional northern Vietnamese event of the same name.
Each round of the competition featured t wo robot sfrom each team. Aiming for a ring, the first robot threw
a shuttlecock handed to it by the second robot. If the
shuttlecock passed through the ring, the team earned
points. “These serious matches involving robots thatstudents had built themselves by overcoming difficulties andexercising their creativity were thrilling to watch in today'scontest,”commented one employee who observed theevent.“I watched the games with my first-grade daughter,
who loves the Robocon so much that she wants to makerobots herself when she grows up,”said another, adding,“My daughter and I got excited when a robot made a greatplay.”A third said:“I was really into the heated battles,
which can rightly claim another name of ‘Koshien' forscience students.”

Sponsorship for Tech Plan Grand Prix
The NOK Group cosponsored the first Tech Plan GrandPrix in Shizuoka held on July 7, 2018, the second Tech Plan
Grand Prix in Ibaraki held on November 24 and the first Tech
Plan Grand Prix in Fukushima held on February 9, 2019. The
Tech Plan Grand Prix is a program organized and operated
by Leave a Nest Co., Ltd. Its aim is to discover scientifictechnology and business seeds with the potential to form
the basis for new industries in each participating countryaround the world and each prefecture in Japan. In supportof this objective, the NOK Group provided cooperation forthe program.
The NOK Group continues to support the discovery anddevelopment of R&D ventures based in the regions where
the Group operates its sites. In addition, through networking
and collaboration with external organizations, we will
strenuously undertake initiatives for open innovation andnew business creation.

The bold and free-thinking ideas of student engineers on
display at this event, along with their hard work, neverfail to generate excitement among the audience. NOK
will continue to sponsor this event in and after 2019 toencourage their development.

25

NOK was a cosponsor of Kids Engineer 2018, which washeld on July 27, 2018 at PACIFICO Yokohama. Organized by
the Society of Automotive Engineers of Japan, Kids Engineer
provides a hands-on learning opportunity for schoolchildren
and is aimed at encouraging their interest in various fields ofscience, technology and monozukuri (manufacturing skills),
particularly around automobiles.

From September 4 to 8, 2018, the 16th Student Formula
Japan took place at Ogasayama Sports Park ECOPA ,Shizuoka Prefecture. Student Formula is a competition
organized by the Society of Automotive Engineers of Japan.
Teams of students race with small-sized formula racing carsthat they have planned, designed and built themselves.
The event is aimed at developing young professionals who
can facilitate the growth and promotion of the automobile
industry and related technologies by supporting students
through cooperation among industry, academia, government
and the local community. As well as the actual performanceof the car, the comprehensive monozukuri capabilit y,including the concept, design and cost of the car, isevaluated.

This was the third time for NOK to cosponsor this event.
NOK offered a program to allow children to experience“the world of auto parts—small components that play bigroles”through videos and quizzes. We used creativity andingenuity in designing the program to help participantsreadily understand the“big”roles played by“small”parts incars through exhibits that they could see, touch and enjoy.

Sponsorship for World Food Day 2018 Campaign
Even as 800 million people around the world suffer fromhunger, about 1.3 billion tons of food is wasted each year.
This is equivalent to around one third of the total amountof food produced worldwide. To coincide with World
Food Day on October 16, the United Nations World Food
Programme (WFP) conducted the Zero Hunger Challenge toeliminate food waste and eradicate hunger during the entire
month of October 2018. The campaign is intended to arouse
the interest of the general public in developed countries
toward hunger in developing countries as we make efforts to
reduce food waste, a challenge familiar to those of us living
in developed countries. The campaign also provided foodassistance to starving people. NOK sponsored this campaign
to show support for its aims.

Sponsorship for National Tree-Planting Festival
The national tree-planting festival has been held to deepen
the public understanding of forests and greenery, which
are fundamental to the protection of national public land.
The event for 2018 took place on June 10 in Fukushima
Prefecture on the theme of “growing forests of hopeand life.”In support of the objective of the event, NOK
cooperated with the organizers to contribute to the local
community as a company with a production base in theprefecture.

26

3 Society

NOK has been a sponsor since FY2008 and has provided
N O K G ro u p p ro d u c t s to s o m e o f t h e p a r t i ci p a t i n guniversities. NOK will continue to sponsor this event andis proud to support young engineers who are enthusiastic
about building cars.

2 Environment

Sponsorship for 16th Student Formula Japan

1 Strategy & Management

Sponsorship for Kids Engineer 2018

Sponsorship for Hamamatsucho GreenSound Festa Hama Matsuri

Sponsorship for Minato City Half Marathon 2018

1 Strategy & Management

The Minato City Half Marathon 2018, the first marathon
race held in Minato City, took place on December 2, 2018with NOK as a cosponsor. The race course started in frontof Shiba Park, extended through Shimbashi Station andShinagawa Station and finished at Tokyo Tower. Under the
winter sunshine, 4,698 athletes competed, among them 11
runners from the NOK Group, who all completed the race
within two hours. Another roughly 70 employees lined up
along the course to rousingly cheer the runners on.

The Hamamatsucho Green Sound Festa Hama Matsuri washeld by Nippon Cultural Broadcasting Inc. on November 3,
2018 in Hamamatsu-cho. NOK has cosponsored the event
since FY2016 for the purpose of contributing to the local
community.

2 Environment

This year's event attracted a total of 128,500 visitors to
the Hamamatsu-cho area, where event venues such as
Zojoji Temple, Tokyo Tower, Nippon Cultural Broadcasting,
HAMASITE Gurume and Shiba Commercial High School aresituated.

NOK will cosponsor the event again in FY2019 with the aims
of making contributions to the local community and raising
the public profile of the company through sporting events.

3 Society

At the“NOK presents KIDS EXPO—Kids Expo 2018”held at
Shiba Commercial High School, NOK set up a PR booth andoffered a puzzle game to teach children about automotive
parts. Moreover, on the special stage, a performance called“NOK Presents Kid's Expo Science Show”was presented.
Under the theme of “ the Wo nder of Fric tio n,” N O K
demonstrated experiments that used huge balloons anddaruma otoshi blocks as well as other experiments featuringliquid nitrogen and rubber.

27

Initiatives at VNN, a NOK Group company

In January 2019, NOK offered to cosponsor the“Enosui eco”
program for ecology under EcoAction 21,* promoted by
Enoshima Aquarium (Enosui). As a supporter, NOK will assist
in conservation efforts, including investigation and research
into the biological and ecological diversity of Sagami Bay,cleanup activities, and waste reduction efforts. In addition,
NOK will proactively take part in beach cleanup activities
and foster a relationship with the local community.

VNN is a wholly owned subsidiary of NOK Corporation
located in Amata Industrial Park in Dong Nai Province,
southern Vietnam. The area VNN is located in was the siteof fiercely contested battles during the Vietnam War. Taking
this history of the region into account, VNN focuses oncommunity and social contribution as a company rooted in
the community.

2 Environment

As part of such contribution initiatives, VNN purchased
photo frames from a facility that sells small products createdby people with disabilities and health problems caused by
Agent Orange. Fitted with a commemorative photo, thephoto frames are given to visitors to VNN as a gift.

* The environmental management system formulated by the Ministry of theEnvironment

1 Strategy & Management

Corporate Member of Enosui eco Supporter

3 Society

Sponsorship for the 4th Japan BtoB
Newspaper Advertising Award for Students
The Japan BtoB Newspaper Advertising Award for Students
organized by the BtoB Advertising Association Japan and
the Nikkan Kogyo Shimbun, Ltd. was inaugurated with thegoal of deepening students' interest in and understandingof BtoB companies. NOK has cosponsored the competition
since FY2017 in support of its purpose. For the 2018
competition, students produced newspaper ads in line withrequirements given by eight corporate cosponsors, including
NOK.
The issue NOK wanted to address with a newspaper ad was
the low level of NOK's name recognition. NOK's concern wasthat although it is making everyday life easier for people, its
products are seldom seen by consumers because they areused inside finished products made by other companies.
NOK requested an ad that would let people know whatkind of businesses the company is engaged in. Twelve
entries were submitted in response, and a panel of judges
convened on March 27, 2019 award the Gold Prize to an
advertisement that addressed NOK's requirement.

Accepting Interns from Universities andTechnical Colleges
NOK actively provided oppor tunities for students toundertake work experience at a variety of workplaces
within the company, with the objective of human resource
development through industry-academia cooperation.
Humanitiesstudents

Sciencestudents

Total

Participants in 2-week internship program

0

31

31

Participants in 1-day internship program

60

176

236

―

1

1

Participants in long-term(4-month) internship program28

Communication with Shareholders, Investors and External Organizations
Exhibition at Tokyo Stock Exchange IR
Festa 2019

Financial Results Briefings

1 Strategy & Management

The NOK group holds two financial results briefings every
year, one in May for annual results and another in November
for interim results. Securities analysts, institutional investors,
research institutions, journalists and financial institutions areinvited to these sessions, where we explain financial results
and forecasts, and also respond to questions.

2 Environment

The Tokyo Stock Exchange IR Festa 2019 was held fromFebruary 22 to 23, 2019 at the Tokyo International Forum.
Organized by the Tokyo Stock Exchange, this event aims tooffer an opportunity for individual investors to communicate
with listed companies. NOK participates in this event every
year with the objective of promoting fair disclosure. NOK
held company briefing sessions at its booth again this year
and explained our business activities, performance andgrowth strategy. We distributed questionnaires to visitors
after every briefing session and received responses from 767of them. The event allowed us to obtain valuable feedback
from individual investors.

Presentation materials used for financial results briefings areavailable at NOK's website.

IR Calendar
1Q

2Q

3Q

4Q

Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

3 SocietyDuring the Festa, students of college investment clubs
affiliated with the Union of Student Investment Clubs
organized an event in which they visited each company's
booth and evaluated the exhibits and presentations. Outof a field of roughly 80 exhibitors, NOK was named theNo. 1 company. NOK is committed to providing easy-tounderstand, fair and accurate information on a continuous
basis.

Announcement offinancial results
Annual shareholders'meetingAnnouncement of
1Q results

Announcement of
2Q results

Announcement of
3Q results

Relations with External Organizations
The NOK group is a member of economic organizations andindustry associations and participates in their activities. We
cooperate with these external organizations by acting as a
general affairs committee member of the Japan Auto Parts
Industries Association (JAPIA) and the chair of the Japan
Electronics Packaging and Circuits Association (JPCA).
At JAPIA, we seek to contribute to the development of
the automobile and automobile parts industries. NOK isa member of subcommittees on the environment and on
conflict minerals, and exchanges views with other JAPIA
members.

29

Relations with Employees

Item 1 of NOK's Management Principles stipulates asfollows:“The Management has to run the Company basedon feelings of love and trust in its employees.”We value thelife of each employee and respect their humanity. At thesame time we maximize the potential of each employee,t h e re by m a i nt a i n i n g a n d rei n fo rci n g t h e co m p a ny 'scompetitive edge. In everything from our Management
Policies and our work procedures to our recruitment anddevelopment of human resources and our benefits package,
we firmly uphold the stance of respecting human rights
across all aspects of our operations. The company's various
measures are implemented on the premise of secure andstable employment.

A system to rehire employees who have reached mandatory
retirement age was introduced in 2006. We seek to improve
the system so that healthy retired people who still wish towork can make full use of their rich work experience andadvanced skills gained through their career at NOK. For
example, retired employees can pass their work-related
knowledge and techniques on to younger generations
while improving their livelihood through reemployment
under the system. In FY2016, flexible working patterns werepermitted and working conditions were revised to facilitate
reemployed personnel taking on more active roles and toenhance their job satisfaction.

Facilitating Work Style Reform

Adhering to Basic Rules for Employees
NOK's Principles of Corporate Behavior set forth Respectfor Human Rights and Provision of a Safe and Comfortable
Working Environment. Our Behavioral Guidelines Concerning
Employee Compliance embrace the idea of respect fordiversity, personality differences and individuality andprohibit discrimination based on race, color, creed, religion,
nationality, age, gender, national origin and physical andmental disabilities. The Guidelines further stipulate thatno form of discrimination is to be tolerated, and forbid
harassment. To address harassment, an employee hotline isavailable at each division.

■ Shortening total actual working hours
We have endeavored to shorten the total number of actual
working hours to help employees pursue comfortable andaffluent lifestyles, and will consider and implement newmeasures to:- Substantially lower the upper limit of overtime work hours- Improve the rate of paid leave taken by encouraging
employees to take leave in a planned manner, including by
taking consecutive days off.

■ Compliance with labor-related laws
Group companies are instructed to ensure compliance withlabor-related laws of their respective countries, namely,
the local equivalents to the Labor Standards Act, the Labor
Union Act and the Minimum Wage Act of Japan. Moreover,
NOK periodically confirms that the group companies are
abiding by basic rules concerning the prohibition of childlabor and forced labor.

- Operate a flextime system■ Supporting diverse work styles
NOK provides childcare leave, nursing care leave and other
employee benefit systems to help employees work in waysthat suit their lifestyles. To ensure the systems are properly
functioning and facilitate their use by employees, we areproviding information and advice on them.

Promoting Active Roles of Diverse Human Resources■ Advancement of female employees■ Exploring new working arrangements

NOK provides training and guidance to enable female
e m p l o y e e s t o b e p ro m o t e d t o m a n a g e m e n t- t r a c k
positions and on to executive positions according to thewillingness and abilities of existing female employees in
non-management-track positions. We have also increased
the number of female candidates to be recruited for
management-track positions.

NOK will consider new work style arrangements, taking into
account the efficiency gains available through teleworking
and the realization of an optimum work-life balance for
employees.

Self-evaluation and Reporting System

The medium-term plan for this initiative is to increase thepercentage of new female recruits placed in managementtrack positions to 10% by 2020. The plan has also set thetarget of transferring 20 female employees to managementtrack positions also by 2020.

Each year, employees are provided with an opportunity
to report on their workplace situation and the job they
aspire to have in the future. Depending on the contents of
the report, such as the desired career path, an interview
with a supervisor is arranged as needed. Results of the selfreporting are used to develop and utilize human resources
effectively in order to ensure that the right personnel areappointed to the right positions, thereby improving theworkplace environment.

Supporting Active Roles for People with Disabilities
N O K is p ro m o t i n g t h e e m p l oy m e n t o f p e o p l e w i t hdisabilities. As of FY2017, we achieved the mandatory
employment rate. Going forward, we will increase our
employment of people with disabilities in line with the
FY2018 revision of the regulatory employment rate.

30

3 Society

NOK has consistently implemented various measures to help
employees to achieve both professional and personal goals,
including the reduction of working hours. Going forward, we
will consider and undertake various other measures fromthe viewpoint of work style reform.

■ Respect for basic human rights

2 Environment

Reemployment after Retirement

1 Strategy & Management

PolicyWorkplace Communication

Rate of employment of new female graduates for management-track positions

1 Strategy & Management

NOK aspires to create an open workplace. Executives
and managers take the lead in creating and maintaining aworkplace where good communication is ensured between
superiors and subordinates, among coworkers and between
departments. For example, there is a program in which each
workplace plans and implements a social gathering, which
the company pays for.

Rate of recruitment (%)

FY2014 FY2015 FY2016 FY2017 FY2018
5.9
2.9
3.1
4.4
6.1

Rate of employment of persons with disabilities (as of the end of FY)
Rate of employment (%)

Human Resources Development Program

FY2014 FY2015 FY2016 FY2017 FY2018
1.78
1.96
1.98
2.06
2.06

Number of persons reemployed after retirement

2 Environment

NOK's human resources development program consistsof level-specific education and development/specialized
education. Level-specific education is mandator y for
employees after specified years of service and for those in
specified positions. Development/specialized education isdesigned to train employees in skills that are considerednecessary for their duties by their supervisors.

Number of persons reemployed

FY2014 FY2015 FY2016 FY2017 FY2018
48
65
47
54
67

Number of paid-leave days taken
Number of days

3 SocietyThis program facilitates the personal development of each
employee, as it supports those employees who actively
work on their own capacity building, based on a discussion
with their immediate superior. Trainee records are managed
and monitored in the in-house training management system.
In FY2018, 829 employees received training through thisprogram. The total training time for the level-specificeducation across the entire company was 13,741 hours(FY2018).

FY2014 FY2015 FY2016 FY2017 FY2018
12.9
13.6
13.5
13.5
13.6

Number of employees who took childcare/nursing care leave
Childcare leave
Nursing care leave

FY2014 FY2015 FY2016 FY2017 FY2018
57
51
47
54
53
1
1
0
1
0

Rate of turnoverRate of turnover (%)

Special-purpose training

FY2014 FY2015 FY2016 FY2017 FY2018
1.0
1.2
1.2
1.1
1.3

Training programs meeting various needs are available, suchas those aimed at providing support for female employees
and for employees rehired after retirement age, as well as
those for improving workplace productivity.

Development of global human resources
This program seeks to develop employees who can actively
apply English at work rather than people who can simply
speak English well . Employees who pass preliminar yinterviews are assigned duties individually, and receive onthe-job and off-the-job training for a year.

Executive officer training

Department Manager

Department manager training

New employee

4th year follow-up training
Interview

Special training

4th year
3rd yearWorksite leader training

Temporaryassignment
training

New manager training

Sub-section Chief,
Assistant Section Manager

Global humanresourcesdevelopment

Manager follow-up training
Section Manager

Business skills
training

Length of service, job position

Operating Officer

New employee training

Junior training
programManagement
program

Top management
programLevel-specific education

31

Special skill
training program

Human resources
development program

Development/specialized education

NOK Group Safety Principles

Activities during FY2018“Safety is the foundation for implementing management spirit■ Activities for safety and healththat respects human dignity, my desire and my mission”

Occaupational Health and Safety Management System

Major safety activities

330

No. of units undergoing facility safety improvements

622

Investment in facilities and equipment forsafety measures(major capital investment projects at NOK)

370 million yen(automated warehousing,cranes, etc.)

To support physical health, we have promoted activities toencourage employees to engage in exercise through seminars
on lifestyle diseases (at the head office), seminars to prevent
back pain and stiff shoulders (at the divisions) and walk events(at the head office and divisions). These initiatives have beenrecognized and NOK was certified as a sports promotion
company by the Tokyo metropolitan government in FY2018.

Safety officer

Central Safety and
Health Committee

Major mental and physical healthpromotion activities

Safety and HealthControl Division【Safety and Health Mottos】

No. of participants in basic training on
facility safety standards

To meet the mental health needs of employees, we havea counseling system in place that incorporates individualinterviews by clinical psychologists, in addition to efforts byemployees by themselves, line care and care provided by inhouse specialists. We have also established a free 24/7/365
telephone hotline staf fed by an external professional
institution to deal with mental health problems at an earlystage and provide support for a smooth return to work.

President

Head Office143■ Mental and Physical Health【Organization to Promote the Safety and Health Activities】

Divisions

FY2018

No. of participants in safety, hygiene andhealth training for line managers

Telephone health consultation(by reason for call)Group companies【Safety and Health Standards】

32

FY2018867
Concerned about physical symptoms: 293
About treatment: 238
About stress and mental health: 66

Rate of receiving comprehensive checkup

99.9%

Rate of receiving secondary
comprehensive checkup

89.4％

3 SocietyWe have established a safety and health management
organization headed by the president of NOK to promote
safety and health activities. The Safety & Health Dept. of the
Corporate Administration Office, which supervises safety
and health affairs at a corporate level, promotes groupwide activities in collaboration with safety secretariats atdivisions, the head office and group companies. In addition,
our Safety and Health Mottos were developed back in
1976 with the aim of maintaining and raising the safety
awareness of employees and helping them to acquire safetyknowledge. The Mottos have been used by all employees
as a textbook to share awareness of safety in operations.
In 1988, we further formulated the Safety and HealthStandards to set standards for employee education andtraining as well as for facility safety. These standards areapplied to on-site operations of relevant departments.

2 Environment

A s to safet y education, line managers receive safet y,hygiene and health training at the time of their appointment
and again at the beginning of their third year to ensure acommon awareness of safety and health issues. In addition,
facility safety standards are utilized to provide the facility
development and production departments with educationand to secure safet y during the processes of design,
introduction and remodeling of facilities.

1 Strategy & Management

Our safety and health policy for FY2018 was improvement ofsafety and health control practice. We thoroughly identified
and remedied unsafe conditions, conducted worksite
patrols and observed work processes to provide guidancefor corrective actions. When contractors conduct work on
NOK premises, we ensure the sharing of near miss incident
information, risk prediction training and adherence to safety
working procedures.

Respect for human dignity is one of the NOK Group's
management principles, and we believe that safety is a
crucial precondition for respecting human dignity. Safety
represents both a mission for management and a desireof all employees. At the NOK Group, safety has been wellrecognized as a top priority in all operations. To explicitly
communicate a message on safety from top management
to employees as well as raise and ensure safety awarenessand eliminate industrial accidents, we formulated the NOKGroup Safety Principles in FY2017 and are promoting oursafety activities accordingly.

■ Activities to improve the workplace environment

Number of Industrial Accidents (NOK, including contract employees)

1 Strategy & Management
2 Environment

We first launched activities to improve the workplaceenvironment in FY1993. We took measures and madeimprovements in terms of managing working environments(noise, heat and cold), operations (posture and handlingof heavy objects) and support systems (provision offacilities for relaxation). In particular, we focused on
reinforcing and promoting measures to reduce workloads
and control heat. We regularly review our measures in aneffort to address changes in the respective environments.

(No. of accidents)

50
40
30

3
2016

0

3 SocietyAs part of its efforts around respecting human dignity, theNOK Group is also committed to traffic safety initiatives.
We have rigorously exercised control, education andguidance for safe driving in the hope that we can reduce,even if only slightly, the number of people adversely
affected by traffic accidents and prevent employees
from violating traffic rules and becoming involved in an
accident. NOK divisions are undertaking traffic safety
lookouts and holding traffic safety seminars taught by
JAF and local police departments. We also commend
drivers with no history of traffic violations by number ofyears of safe driving. In FY2018, a total of 840 employees,
including 76 drivers who had not been involved inan accident or violation for at least 30 years, werecommended.

22

20

18

20
0
2017

4
2018

(FY)

■ Lost time injuries ■ Injuries not accompanied by lost time

Number of Industrial Accidents (Production subsidiaries, including contract employees)(No. of accidents)

68

70

57

60
50
40

39

20

56
50

30
33

10
0

Number of Traffic Accidents (NOK)

6
2016

7

12

2017

2018

(FY)

■ Lost time injuries ■ Injuries not accompanied by lost time(No. of accidents)

150

Lost Time Injury Frequency Rate

100

0

20

10

■ Activities for traffic safety

50

23

20

108

113

2016

2017

2018

(FY)

■ Cases where NOK was responsible and NOK and theother party were both responsible

Questionnaire on NOK CSR Report 2018

20% 0%■ Easy to understand80%■ Hard to understandFY2018Average among manufacturers

1.15

1.02

1.20

NOK

0.22

0.00

0.34

Production subsidiaries

0.29

0.41

0.47

○ I cannot see any differences with other companies. It would be better
if NOK's characteristics and unique initiatives were described. (40s;securities industry)○ The contents are substantial. It would be great if a description ofefforts for diversity were incorporated. (40s; securities industry)○ The Report well conveyed the contribution of the NOK Group to
creating a sustainable society with its technology as a manufacturer.
(30s; financial institution)○ I was able to understand well NOK's approach to CSR based on
the NOK Charter of Corporate Behavior and the top message. (30s;construction industry)○ I suggest that illustrations be included so that students would find it
easier to understand. (30s; broadcaster)○ The Report helped me to deepen my understanding of initiatives
taken by each department. (30s; printing industry)○ I suggest that particular efforts for quality as a manufacturer be
described more in detail. (30s; printing industry)○ Specific environmental activities are described, which is good. (20s;manufacturing industry)○ It would be good if specific information for ESG investment weredisclosed. (60s; manufacturing industry)■ Average

What do you think about the contents of the CSR Report 2018?

80%

FY2017■ Opinions and feedback (Excerpts)

What do you think about the CSR Report 2018?

20% 0%FY2016106■ Excellent■ Average■ Poor33

Third-Party Opinion on CSR Report 2019
Mr. Masatoshi Ikari

Advisor, PDCA Co., Ltd
Representative, Sustainability Consulting
Part-time Teacher, Seikei University

Importance of Non-financial Information

Relationship between the NOK Group’s Products
and Activities and the SDGs other than Those
Related to Environmental Issues

Initiatives toward a more sustainable world have been gaining
momentum, as exemplified by the Sustainable Development Goals(SDGs) adopted at the United Nations Summit in September
2015 and by the Paris Agreement in December of the same year.
Also, in Japan, interest in ESG investment has grown since theGovernment Pension Investment Fund (GPIF) signed up to the
Principles for Responsible Investment (PRI) in September 2015.
Investors, who used to evaluate only sales, profits and otherelements of the “financial” value of a company, are now assessing
also the “non-financial” value, which indicates how the company
addresses environmental and social issues, as a benchmark toascertain whether or not the company can achieve long-term,
stable growth.

In the Long-term Environmental Vision for 2030 that wasformulated and published last year, the NOK Group has identified
the environmental Sustainable Development Goals relevant to its
environmental objectives. Meanwhile, I would like to call attention
to the fact that traffic safety products of the NOK Group facilitate
the achievement of Target 3.6 relating to road traffic safety of Goal
3 (Good Health and Well-being) of the SDGs. The NOK Group’s oil
seals, O-rings and gaskets used in construction machinery andother general industrial machinery contribute to Goal 9 (Industry,Innovation and Infrastructure). With regard to the Group’s activities
in terms of social contributions, NOK sponsors such events as the
NHK Gakusei Robocon, Kids Engineer and Student Formula Japan,
which are all related to Goal 4 (Quality Education). Moreover, many
initiatives stated in Relations with Employees are relevant to Goal 5(Gender Equality) and Goal 8 (Decent Work and Economic Growth).
In this way, I encourage the NOK Group to closely examine its
products and activities also from the perspective of the nonenvironmental SDGs and clarify the connection between these
Goals and the Group’s products and activities.

Against this backdrop, NOK published the first Environmental
Report in 2004, renaming it the Environmental & Social Reportin 2006 and then the CSR Report in 2017, through which thecompany has continuously disclosed information on its nonfinancial value. First of all, I would like to commend this point.

Respect for Human Dignity in Management

Respecting human dignity is upheld in the Management
Principles and the Message from the President. In the 2019
Report, this policy is objectively confirmed by the data provided
in the Relations with Employees section, including the rate of
employment of new female graduates for management-track
positions, the number of persons reemployed after retirement, thenumber of paid-leave days taken and the rate of comprehensive
checkups received, in addition to the number of employees who
took leave, which has been reported in previous reports. Moreover,the Report discloses a new item of data, the number of traffic
accidents, which is rarely made available by other companies. I
give the company high marks for having disclosed all this data.
These indicators can be regarded as key performance indicators(KPIs) for human resources management, and it is expected thatfurther improvements will be made based on the P-D-C-A cycle ina similar manner as for environmental management.

In Formulating a New Three-year (Medium-termManagement) Plan from FY2020

I believe that FY2019 falls into the period during which a new
three-year (medium-term management) plan from FY2020 isformulated. In recent years, a considerable number of companies
have incorporated the SDGs into their medium-term management
plans and integrated their financial value and non-financial value
as a way to effectively promote their corporate value to investors
and other stakeholders. Therefore, I would encourage the NOKGroup to appropriately incorporate the SDGs concerning social
challenges, in addition to those on environmental issues, into the
new three-year medium-term management plan from FY2020, inreference to the connections above.

Response to Third-Party Opinion
Noriyuki Takahashi

Senior Operating Officer andManager of Corporate Administration Office
Chair of the CSR Committee

We deeply appreciate the valuable opinions we have received. The
2019 report is our third CSR Report, and we believe that we havemade progress with each issue thanks to the third-party feedback.

business with a clear awareness of the relevance to the SDGs andhave not proactively advertised our contribution to the Goals. The
new three-year plan will be launched in FY2020. Going forward,
we will endeavor to give our stakeholders a better understandingof NOK’s efforts for the SDGs.

We boast that our company’s Management Philosophy, business
contents and operational practice are compatible with the SDGs.
Yet, as you pointed out, we have not necessarily conducted34

Company ProﬁleCompany Name： NOK CORPORATION
Registered Head Oﬃce : 1-12-15 Shiba Daimon, Minato-ku, Tokyo 105-8585, Japan
Head Oﬃce :Mita MT Building, 3-13-12 Mita, Minato-ku, Tokyo 108-0073, Japan

Established :December 2, 1939

Capital :23,335 million yen

Business Details : Manufacture, purchase, import and sale of seals, industrial functional parts, hydraulicand pneumatic equipment, plant machinery, synthetic chemical products, electronic
products and various other products; and the provision of associated services such as
installation of machinery and devices

Contact●About the CSR report in general：
Corporate Communication Dept., Corporate Administration Oﬃce, NOK Corporation
Mita MT Building, 3-13-12 Mita, Minato-ku, Tokyo 108-0073, Japan
TEL: +81-3-6891-0191 FAX: +81-3-6891-0067●About the Environment part of the report：
Environmental Control Dept., Corporate Quality & Environmental Control Oﬃce, NOK Corporation
4-3-1 Tsujido-Shinmachi, Fujisawa City, Kanagawa 251-0042, Japan
TEL: +81-466-35-4612 FAX: +81-466-35-4631©NOK CORPORATION. No part of this report, including any text, photograph and illustration contained herein,
may be reprinted or reproduced without prior permission of NOK CORPORATION.